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The impact of the Covid-19 emergency on startups and the innovation ecosystem in Italy

The Global Startup Ecosystem Report 2020 (GSER2020) – published in June, has already provided a very disarming overview in the analysis of the startup ecosystem on a global scale: after the lockdown 40% of startups would be in the so-called red zone, i.e. they would have three months or less of liquidity, and therefore of life.

In the emergency period the study shows that: more than 60% of startups have fired or reduced employees or salaries; about 31% have reduced jobs in research and development and 32% have cut jobs in Product Software, such as software engineers; 71% of startups have reduced their expenses on average by 22%.

Clarifying the Italian situation is the aim of the study carried out in July by EY and VC Hub Italia – The impact of the Covid-19 emergency on startups and the innovation ecosystem in Italy

In Italy:

  • 58% increased personnel
  • 32% saw an increase in demand
  • 27% saw revenue growth
  • 62% of the realities involved in the survey worked in smart working without compromising productivity

That said, also in the study of EY and VC Hub Italia, as well as in that of Startup Genome, the main problem related to the health emergency Covid-19 seems to be in the drop in demand: 68% of the startups said they have suffered a drop in demand; 25% a decrease of more than 50%.

The Italian Government manoeuvre is essentially structured on 3 measures:

  • 200 million from the Venture Capital Support Fund (Fondo di sostegno al Venture Capital);
  • 200 million for start-ups and innovative SMEs under the Guarantee Fund (Fondo di Garanzia);
  • an additional €100 million for soft loans under the “Smart&Start” call for proposals (Bando Smart&Start).

In a long term development perspective, it is essential that our ecosystem grows exponentially and that Italian startups become increasingly able to develop internationally.

® JIAC 2017 – C.F. 97866940584 - Credits