SMBs Could Help Italy Grow GDP Via Digital Innovation

Italy, which ranked fourth-to-last for digital competitiveness in Europe in 2019, could have a chance to better its standing because of the pandemic, Reuters reported. The pandemic’s forced technological acceleration could let Italy catch up.

The country could add an average of 1.9 percentage points per year to its gross domestic product (GDP) growth if its small- to medium-sized businesses (SMBs) bridge a gap of 40 percent versus Spanish peers, according to Reuters. That’s measured by the indicators ranging from eCommerce capabilities or electronic invoicing.

Italy approximates that in terms of digital investment, its businesses have fallen behind other European countries in recent years by around 2 percentage points of GDP, Reuters reported.

But since the pandemic, 86 percent of Italian respondents in a survey of mid- to large-sized firms said they had expedited digital transformation plans in 2020 compared to the 75 percent average for Europe in general, according to Reuters.

The roots of Italy’s digital deficiency come from multiple places, Reuters reported. One factor is the broadband access, which is below the threshold for the EU average. Large companies that can sustain technological investment programs are a minority. Another factor is that many firms are family-owned and operated, which means they often do not have managers with the correct skillsets to lead a digital shift.

The aging population and the low number of information communication technology (ICT) graduates haven’t helped, either, Reuters reported.

Italy has pulled ahead of neighbors in terms of developing real-time payments information, a trend that the Italian Banking Association has encouraged. Those real-time payments have done much to foster stable and efficient growth.

There are around 260 banks in the country using the service, and more are slated to sign up in the future.