Milan, corporate investments grow but start-ups decline

Milan has always been a natural habitat for the most advanced entrepreneurial realities at the frontier of innovation. Today, the metropolitan city is home to almost 3,200 innovative start-ups and SMEs, equal to one fifth of the Italian total and with an important turnover of EUR 2.8 billion. However, the last two years represent a setback: the number of innovative realities is declining for the second consecutive year (-3.6% per year) and is now 5% lower than in the same period of 2022.

This trend does not only belong to the Milan area, but is common to the entire Lombardy region and Italy, as shown by the data presented in the ninth edition of the 'Open Innovation and Corporate Venture Capital Observatory' promoted by Assolombarda and InnovUp in collaboration with InfoCamere and the Milan Polytechnic. In Lombardy and Italy, the annual drop is even greater and equal to -4.7% and -4.1% respectively.

In the metropolitan city of Milan, the aggregate decrease in the number of innovative realities masks some divergences, which indicate a shift towards a more consolidated and mature dimension. Firstly, start-ups have decreased (-205 in the last year) but innovative SMEs have increased (+86). Secondly, considering start-ups and SMEs together, the number of those participated only by individuals or sole proprietorships has decreased, while innovative companies with shareholdings of corporate (business) shareholders and financial or innovation specialised investors have increased.

Especially important is the weight of start-ups and innovative SMEs with corporate partners, which rises to 42% in terms of number of companies and 52.5% in terms of production value (shares significantly higher than the 33.2% and 47.2% measured at the Italian level). This trend is also reflected in the presence of corporate partners in the Milan area, now amounting to 1,146 investors and growing by 18.5% over 2023.

"Despite a drop in some indicators, Milan and Lombardy continue to stand out as a reference model and driver of Italian innovation," says Alessandro Spada, President of Assolombarda. "In this sense, we are satisfied that the government has accepted our amendment regarding the elimination of the barrier to entry in the establishment of a company that required - within two years of registration in the register of innovative start-ups - a share capital of at least 20,000 euro and one employee and, at the same time, has introduced important new measures for the development of the innovative ecosystem. We have averted the risk that up to 70 per cent of start-ups would otherwise fail. The main challenge now is to increase the capacity of these companies to invest across borders to continue their growth. To achieve this, it is crucial to attract more capital, including foreign capital, to the venture capital asset class and the real economy. In addition, it is necessary to foster collaboration between established companies in the 'Made in Italy' supply chains and start-ups, and to strengthen public policies to support innovation and entrepreneurship, the real key to competitiveness in the region. Particular attention must also be paid to attracting talent, which is indispensable for facing up to increasingly fierce global competition'.