Italy attractive, foreign investment to grow by 5% in 2024
The positive trend started in 202o continues, while Europe declines by 5%. Our country favoured by 'nearshoring', but also by government measures
3' min read
3' min read
High taxation, the tax wedge, bureaucratic complexities, lack of infrastructure, energy costs. We are familiar with our country's problems, which for years have undermined its attractiveness to foreign capital. Yet, for some years now, the improvement of certain elements and the emergence of new competitive factors have reversed this trend, so much so that, in 2024, Italy saw an increase (of 5%) in foreign direct investment (FDI), in a European context that has, conversely, recorded an overall decrease.
Italy bucking the trend
.This is the finding of the latest edition of the EY Attractivness Survey, which reports 224 FDI projects announced last year, compared to 214 in 2023, confirming the positive trend started by our country in 2019, with a peak of 243 projects announced in 2022. 'These are very positive numbers,' comments Marco Daviddi, managing partner of EY-Parthenon in Italy, 'which testify to the consolidation of our country's attractiveness, thanks also to a series of measures adopted by the current government and also previously by the Draghi government.
Of course, much work remains to be done, since Italy, despite being Europe's fourth largest economy, is still in seventh place in the attractiveness ranking, with a market share of 4.2 per cent and with numbers still very small compared to France (1,025 projects in 2024, down, however, by 14 per cent compared to 2023), the United Kingdom (853 projects, down 13 per cent) and Germany (608 projects, down 17 per cent).
The factors of attractiveness
.The EY study does, however, highlight positive factors, which indicate a trend: 'Before Covid we were in 12th position,' observes Daviddi. 'Moreover, it is interesting to note the reasons why foreign investors choose our country: in a highly unstable geopolitical context, but also in a European context characterised by strong economic and political tensions, Italy is increasingly perceived as a reliable country, where foreign companies can find highly qualified human capital and advanced skills, especially in the digital and technological spheres.
Our country is also recognised as having attractive elements such as the quality of life - a decisive factor when a multinational company has to relocate managers and their families - but also a good level of 'social peace' and favourable labour legislation, in line with other European contexts. The much-discussed issue of labour costs is also a false problem: the tax wedge is certainly high, but labour costs are very low compared to the European average.
