An article by Jacopo Pertile – Co-Founder and CEO of AzzurroDigitale
Why is it so difficult to get B2B tech startups off the ground in the Italian industrial sector?
It is a question that came back forcefully during a discussion at the SMACT Competence Center with some of the most authoritative names in the industrial and innovation sector.
Italy is the second manufacturing power in Europe, yet the percentage of active collaborations between industrial corporations and startups is very low. In a world that is racing towards automation, AI and sustainability, we are gambling our future.
Why does this happen? Here are some of the obstacles we highlighted in the roundtable:
- Little propensity for risk by management both from a cultural point of view and from company directives. Often if the project is started with a big tech and fails, everyone is responsible. If instead you rely on a startup and it doesn’t work out, it’s usually the manager’s fault. The perceived risk is personal, not corporate.
- Non-distributed R&D: often there is an ad hoc department that centralizes the entire decision-making process leading to obvious bottlenecks and over complexity.
- The negative narrative about startups: “they won’t last 24 months”, “they are poorly structured”, “they are not solid”. Statistically, many of them fail, that’s certainly true. But that’s no excuse for not trying.
- Decision-making processes in companies are slow, tied to predefined annual budgets and legal constraints far from the production reality. This leads to a very long sales cycle (12/24 months) which leads startups to need a lot of cash behind them to support themselves with all the complexities of the case.
- Lack of tax incentives to experiment with new “made in EU” technologies in the industrial sector (when will a real 5.0 plan start up again, perhaps on a European scale?).
Some proposals that have emerged:
- Autonomous budgets and spending obligations for managers to experiment with startup solutions, as part of corporate objectives. Even better if they are tied to the European territory. This is not a question of provincialism, but for the need to grow the ecosystem. With great urgency.
- Full tax exemption for investments in projects carried out by Italian deep tech startups.
- Fast track processes for MVPs, with approvals in less than 30 days that go beyond normal company procedures. The logic must be: first we see if the technology brings value and then we “cage” it in the right purchasing and legal processes.
- Educating and empowering industry leadership on the value of calculated risk.
- In cases of M&A aimed at industrial operations that strengthen our manufacturing companies, the possibility of fiscally recovering the total investment.
Industrial innovation is not an option for our territory and our Europe. It is a necessity. We need a new pact between startups and industry.
