Italy

In general, in all over Italy, social cultural and artistic enterprises seem to have a considerable potential for the overall development of local economies. Social enterprises represent an important opportunity of employment in southern italy where third sector give employment to the 18 %  of the total number employed throughout southern Italy (this is mainly, as in the rest of Italy,voluntary work). The contribution which this type of enterprise can give it’s fundamental for the growth and development of the italian regions, bringing out local resources and enhancing entrepreneurial ones. With the innovative character of the entrepreneurial model that is embodied, it offers sustainability to economic development “tout court”. Youth unemployment is one of the principal economic and social challenges of this decade for many EU Member States, including Italy. Youth in the southern regions of Italy face a greater challenge in entering the labour market.

In Campania, Sicily, Sardinia, Basilicata and Calabria, the youth unemployment rate stood above 50%. Moreover, the youth unemployment challenge has become worse in each region over the last decade. The youth unemployment rate more than doubled in 9 of the 20 regions. Long spells of unemployment can have serious long-term effects for individuals, such as reduced earnings, increased chance of unemployment in the future and social exclusion. Inclusive and social entrepreneurship will not be a panacea for solving the youth unemployment problem but it can be a part of the policy response. Social enterprise is a fairly recent phenomenon in Italy: 65% of the non profit organisation were constituted after the 90s. But since then relations, partnership and planning have been consolidating , with new example of experiences and relations network.

Youth entrepreneurship support enjoys a high profile in Italy due to a set of National Youth Plans, which created several important institutions such as the Youth Department and the Youth Policies Fund. EU-level policies such as the European Social Fund, the Youth Employment Initiative and the Youth Guarantee reinforce national efforts and help to engage regions, provinces and local authorities in promoting and supporting youth entrepreneurship. Recent efforts to streamline the regulatory environment are paying-off in terms of a simplified process of business registration.

This will be further improved with recent legislation that increases the opportunities to meet regulatory requirements online. Youth entrepreneurs stand to be among the groups that benefit the most from these efforts. Youth can generally access a wide-range of entrepreneurship supports. Entrepreneurship training outside of the formal education system is quite accessible for youth, especially for youth entrepreneurs with innovative business projects. Similarly, coaching and mentoring is readily available, often provided with training as part of an integrated package. In addition, access to start-up financing is improving for youth entrepreneurs with two recent developments: a rapid growth of online crowdfunding platforms and recent regulatory changes to create a microfinance sector. The government benefits from a very active non-government sector, including both private and public sector organisations. Many organisations and business associations play a significant role in engaging youth in entrepreneurship, directing potential youth entrepreneurs to information and resources about entrepreneurship, providing entrepreneurship training and facilitating access to financing for business start-up.
Despite the many strengths of youth entrepreneurship support in Italy, the support system is hindered by the lack of an overall strategy. Consequently, many of the government’s efforts are single shot interventions rather than being part of a coordinated system where actions complement each other. This is further complicated by the multi-level governance system in Italy, where most entrepreneurship support programmes are implemented at the local level. This results in a disparate system where the quantity and quality of support varies greatly by region. The overall approach to supporting youth entrepreneurship support is largely concentrated on innovative projects. There are merits to this approach since innovative projects are likely to create the most jobs. However, many youth do not fit this profile and therefore have substantially fewer opportunities to access support.

With a NEET rate that exceeded 15% in 2018 (https://ec.europa.eu/eurostat) , there is a large youth population that is left under-served by the current youth entrepreneurship support system in Italy. One of the most effective ways of promoting entrepreneurship and supporting the development of entrepreneurial mindsets and skills is through entrepreneurship education in the school system. This is in the very early stages of implementation in Italy. There is a need to scale-up ongoing experiments so that more youth learn about what entrepreneurship is, its potential as a career option and acquire some basic entrepreneurship skills. Moreover, teachers and other staff currently lack training to deliver basic entrepreneurship education. Moreover, there are few entrepreneurship role models for youth, particularly disadvantaged youth.

There was little evidence that youth are exposed to role models unless they are already enrolled in some form of entrepreneurship support. Further, success stories of youth entrepreneurs are not promoted widely. Access to finance remains a challenge for many youth entrepreneurs. Microfinance is underdeveloped in Italy due largely to the relatively recent adoption of legislation that permits this activity.
Youth typically launch small-scale entrepreneurship projects and are therefore often too risky and too small for bank loans. They have few other options of obtaining small loans. Monitoring and evaluation is not widely used to learn about the impact and effectiveness of public entrepreneurship programmes. This is especially true at the local level where much of the supports are delivered. It is therefore difficult for policy makers to understand which actions are working well and which are not.

The following actions are recommended as the key priority actions for strengthening the youth entrepreneurship support system in Italy: 1. Develop a national strategy and action plan for youth entrepreneurship; 2. Strengthen entrepreneurship education throughout the school system, vocational training and higher education; 3. Promote role models for youth entrepreneurs; and 4. Create a network of one-stop shops that would provide a single entry point for youth looking for information and support related to business creation and self-employment.
Other commonly used measures to examine entrepreneurship are the set of measures developed by the Global Entrepreneurship Monitor.

Two rates of particular interest are the nascent entrepreneurship rate and the new business ownership rate, which are both measured using a common survey across nearly 100 countries. The nascent entrepreneurship rate is defined as the proportion of the adult population (age 18 to 64) that are actively involved in setting up a business they will own or co-own; this business has not paid salaries, wages or any other payments to the owners for more than three months. The new business ownership rate is the proportion of the adult population that are currently an owner-manager of a new business that has paid salaries, wages or any other payments to the owners for more than three months, but not more than 42 months. Figures 1.6 and 1.7 demonstrate that few people in Italy are involved in actively involved in setting up or running a new business relative to other EU countries. Fewer than 2% of adults and 3% of youth in Italy were actively trying to set-up a business during the 2009-2013 period. This was the third lowest rate in the EU. Similarly, only 1.5% of adults and slightly more than 2% of youth were running a new business.

These rates were the lowest in the EU.These two measures of entrepreneurship activity paint a different picture than the self-employment rates. Self-employment rates generally pick-up people who employ only themselves or a very few people in non-incorporated businesses. The nascent entrepreneurship rate and business ownership rate pick-up those people who are in the process of setting-up a business or have recently set one up. Thus, the nascent entrepreneurship rate and the new business ownership rate are more akin to a measure of flow, or intake, while the self-employment rate is a measure of the stock of self-employed people. The low nascent entrepreneurship rate and new business ownership rate for youth in Italy is somewhat surprising given the high self-employment rate for youth and that the Italian economy is heavily reliant on small businesses – nearly half of the labour force is employed in enterprises with fewer than 10 employees. Despite these low rates of activity in the early stages of the entrepreneurial process, there appears to be untapped potential for entrepreneurship in Italy.

The 2012 Eurobarometer report indicates that 44% of people in Italy would prefer self-employment to working as an employee, which is higher than the EU average (37%) (EC, 2012). The two most often cited reasons for preferring self-employment were a preference for personal independence and self-fulfillment (62%) and freedom to choose place and time of working (31%).
Youth self-employment rates in Italy are substantially higher than the EU average. This is consistent with an economy that is based on the small business sector. Overall, 22.2% of those employed in Italy were self-employment in 2014, relative to 14.4% of those in the EU. However, the self-employment rate has declined over the last decade, falling from 24.0% in 2005 to 22.2% in 2014. Youth in particular appear to be interested and active in self-employment. In 2014, the self-employment rate for youth in Italy was 13.5%. Although this is only slightly more than half of the adult rate, it is nearly triple the EU average.
However, there are still several issues that prevent the Italian social economy from taking off.

The main problems concern the management of human resources, management , patrimony and credit. Italian social enterprises depend heavily on public financing which inevitably causes serious impediments when  guaranteeing fees for professional people and collaborators as payments by public bodies are not made on a regular or continuous basis. Italian social enterprises therefore cannot maintain long-term relations with qualified personnel and a high turnover of workers is inevitable. The organisational model is fragile and unstable:the capacity of non-profit enterprises to select workers with strong intrinsic motivation seems to be weakening and there as been a gradual loss of interest by the member workers. Thus, there is a need for training in order to acquire a conscious and strategic functional articulation of tasks and roles to prevent the growth potential from being wasted. Social enterprises have become aware of the necessity to improve their system of capitalisation and investment in research and motivation, so that they do not face a future where survival strategies end up substituting those of entrepreneurial development.
Social enterprise in Italy has difficulty in establishing relations of collaboration within the tertiary sector, with public administration and other profit enterprises in the sector and also in identifying new forms of conducting integrated projects through the creation of networks. Especially small social enterprises, which make up the majority of the Calabrian entrepreneurial universe, cannot activate relational processes. The implementation of social “local systems” would instead create additional economies and produce social cohesion, which are indispensable factors for the economic development of the region.Implementing network culture is , in fact, the road to follow: social enterprise could become a real boost for development and allow Italy to overcome the great gap which separates it from the other regions of Italy.

Barriers to entrepreneurship for youth in general:youth face barriers to entrepreneurship in the areas of social attitudes, lack of skills, inadequate entrepreneurship education, lack of work experience, under capitalisation, lack of networks, and market barriers (OECD/EC, 2012):  Role models: Young people are influenced by important role models such as their parents and teachers, who often are not very aware of the requirements and opportunities of entrepreneurship. This lack of awareness among role models results in a lack of encouragement and support for entrepreneurship. A negative attitude exhibited by an important role model, or even negative social attitudes, can act as an obstacle to youth entrepreneurship.  Lack of skills: Education and training programmes often do not do enough to nurture entrepreneurial attitudes and skills; instead they aim to prepare students for a career in employment.  Lack of experience: A major determinant of business start-up and entrepreneurship performance for youth is prior work experience. However, youth typically lack the necessary human, financial and social capital to successfully start and run a new business. Moreover, relative to older people, youth are much less likely to have managerial or specialised industrial knowledge that would help them in self-employment. 

Under-capitalisation: Youth tend to have low levels of personal savings and have more difficulty than adults inobtaining external finance. Banks and other financiers typically consider credit history, past business performance and collateral when evaluating potential loans. Youth-owned firms are less likely to score well according to such measures.  Lack of developed networks: Due to a lack of experience in the workplace and in entrepreneurship, youth people are likely to have limited business networks and business related social capital. As a result, they may not be able to access a wide pool of resources and ideas. It will also be more difficult for them to build “legitimacy” amongst key stakeholders (e.g. financiers, customers, suppliers).  Market barriers: Youth entrepreneurs may face “discrimination” from customers who are sceptical about the reliability or quality of their products or services. Similarly, youth entrepreneurs are more likely to enter industries where barriers to entry are low but competition is very strong. It is important to recognise that each of these areas is inter-related. This implies that a comprehensive policy approach to supporting youth entrepreneurship should provide packages of policy tools, rather than single one-shot solutions. Adults in Italy identified the key barriers as: not enough capital (17%), a poor economic climate (14%), a lack of entrepreneurship skills (4%), a lack of a business idea (7%), too difficult to reconcile family responsibilities (9%), the risk of failure is too great (6%), and administrative difficulties (6%) (EC, 2012). These self-reported barriers are quite similar to the EU average. Data on the barriers to entrepreneurship for youth in Italy do not exist.

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