The 20 most important companies in Europe include LVMH (Louis Vuitton) and Hermès in the luxury sector, ASML in semiconductors, SAP in software, L’Oréal in cosmetics, Inditex (Zara) in fashion, Nestlé in food, Roche alongside Novo Nordisk, Sanofi, GlaxoSmithKline and AstraZeneca in pharmaceuticals, Siemens in industrial automation, TotalEnergies with Schneider Electric and British Petroleum in the energy sector, Deutsche Telekom in telecommunications, Airbus in aerospace, Unilever in consumer goods and Allianz in insurance.
Not even one of these companies is Italian! Shouldn’t we be asking ourselves why such a crucial aspect of our economy is being overlooked?
One initial observation is that, despite Italy’s strong manufacturing tradition, it has invested relatively little in technology and pharmaceuticals compared to countries like Germany, France and Switzerland. Additionally, a certain aversion towards the private sector persists among Italians. This sentiment is also reflected in legislation, national collective labour agreements and court rulings, which tend to favour the public sector while penalising business growth.
Due to the influence of trade unions and their allied politicians, Italy is burdened with excessive regulations and stifling bureaucracy, which have hindered productivity growth—stagnant since the 1990s.
If we compile a brief list of the few Italian companies of international relevance, we could mention Enel and ENI (both state-owned enterprises) in the energy sector, Intesa Sanpaolo in banking, Ferrari in luxury sports cars, Assicurazioni Generali in insurance, Stellantis in the automotive sector and Luxottica in eyewear.
This is a rather meagre list for one of Europe’s most significant economies in terms of GDP and manufacturing presence. And if we exclude the two state-controlled firms and the two financial institutions, only three remain! The numbers are so low because Italian companies that try to grow are besieged by obstacles of all kinds, whereas they should instead be supported. There should be strong incentives for mergers and acquisitions to create larger, more competitive groups.
The state apparatus, once it achieves reliability and efficiency — qualities it currently lacks — should support Italian businesses in expanding their market presence abroad by creating tax incentives and providing favourable financing for international expansion.
As previously mentioned, Italy has very few companies in the tech sector, which is now the most strategic field. Therefore, the country should strongly support investments in artificial intelligence, semiconductors, biotech and renewable energy.
Effective technology hubs should be developed, like Germany’s Fraunhofer-Gesellschaft or France’s Station F, alongside a much stronger push for collaboration between universities and businesses to foster innovative hubs.
Italy’s small capital market should be expanded by encouraging stock market listings through tax incentives and significantly reducing bureaucracy to make it easier for companies to go public.
Another major weakness is the tax wedge. The tax burden on businesses in Italy is excessively high, limiting their ability to reinvest in growth and innovation.
It’s high time to confront Italy’s true entrenched power: bureaucracy. It must be streamlined, as its administrative inefficiencies have stifled growth for years.
Faster and simpler procedures are needed for authorisations, investments and new business ventures. Just as in Germany and Switzerland, there should be strong incentives for research and development, as well as for patents. Investing in R&D is crucial to creating high-value-added businesses.
In conclusion, Italy needs to foster and support national champions, helping them scale globally —exactly the opposite of the outdated, twentieth-century ideological approach that has been applied for decades.
