Why we need bigger companies (alongside the small ones)

At first glance, recent statistics suggest that Italy is a fairly competitive country. In 2024, Italian exports reached a total value of €626 billion—unchanged from 2023, but with a 1.4% increase in volume, due to falling export prices. This result confirms the resilience of Italian exports in a context of global slowdown. Compared to other European countries, Italy is in line with both Germany (–1.4%) and France (+1.1%), further strengthening its competitiveness in international markets.

And yet, according to the 2025 ISTAT Annual Report, Italian exports remain highly concentrated. Only about 137,000 firms—less than 10% of all companies—export at all. Among them, the top 1%—just over 1,300 businesses—generate more than 55% of total export value. On the other hand, micro and small enterprises, while making up nearly 90% of all exporters, account for only 16% of total exports. This highlights a largely untapped potential. Exporting is complex and expensive, especially in today’s uncertain global environment, and it is mainly medium and large companies that can afford to compete in foreign markets.

Such polarization, where 0.01% of Italian firms generate more than half of the country’s exports, is a structural constraint that limits the widespread benefits of internationalization across the broader economy. One can only imagine how much more competitive Italy could be if more companies were able to scale up and contribute meaningfully to the country’s international performance.

The issue of small firm size also impacts the domestic economy. ISTAT data show that businesses with fewer than 10 employees have much lower productivity than larger ones. In manufacturing, the average productivity of a micro-enterprise is about 60% lower than that of a large firm (with more than 250 employees). In the service sector, the gap is even wider, around 70%.

This wouldn't be a major concern if medium-large firms were expanding. But evidence suggests that in recent years, dimensional growth has been driven by smaller firms, not larger ones. This trend pulls down overall productivity growth and, with it, wage growth for the entire country.

The structural under-sizing of Italian companies has many causes, as widely discussed in economic literature. Micro-enterprises tend to be family-run, under-capitalized, reluctant to innovate, and slow to adopt digital technologies. They often struggle to implement advanced management practices or invest in highly skilled human capital. These limitations keep them “dwarfed” over time in a world where competition increasingly hinges on innovation, talent, and technological capacity. Their access to credit and capital markets is also limited, making it harder to expand operations or reorganize efficiently.

The result? Italy has just six firms listed among the Fortune Global 500: three are state-owned (ENI, ENEL, Poste Italiane), and three are financial institutions (Intesa Sanpaolo, UniCredit, Generali).

This raises a fundamental question: What kind of capitalism do we want for Italy? It’s not a new question, but it's more urgent than ever. Italy’s future, like Europe’s, depends on the development of companies that can not only generate jobs and GDP but are also equipped to face the challenges of digital transformation and sustainability. And let’s be clear: Italian firms will be competing in a global playing field where fair play and consistent rules are far from guaranteed.

Italy’s capitalist model is well known. It has evolved through state capitalism and family capitalism, giving rise to a rich ecosystem of micro, small, and medium-sized companies that often amaze, export, and attract foreign investors. We shouldn’t dismiss this model, as it has served us well. But we must ask: where do we go from here?

One possible answer: state and family capitalism must evolve into a model that connects wealth and savings with growth. It’s not about replacing public or family-owned firms indiscriminately. Rather, it’s about welcoming a plurality of models that can drive the country forward.

To succeed, however, these different models need to share common traits:

• Good governance, rooted not only in formal compliance but also in gender balance, diverse skills, and knowledge excellence. Good governance isn’t just for large firms, it can start in small businesses too, provided it’s approached not as bureaucracy but as a mindset for sustainable growth.
  
• A quest for talent, the will to attract, nurture, and elevate people with skill and potential. Entrepreneurship and creativity are part of Italy’s DNA; we must use them to empower people.
  
• A commitment to impact, the desire to improve the environment around the company and contribute to the community, relative to the firm’s size and capacity.
  
• A view of ownership as responsibility, not control or possession. Successful companies are those where ownership evolves, where control gives way to vision and leadership.
  

Companies and capitalist models that embrace these principles will thrive. State or family capitalism may play a role at certain points along a firm’s journey, but they are not the endgame. The dangerous model is the one that rejects these challenges, clings to control, stifles growth, and drives talent out of the country. So, how do we evolve? Three clear answers emerge.

First, open up ownership to institutional investors, carefully chosen for their values, goals, and ability to contribute. Italy must move past its historical distrust of “the funds” and recognize their multiplying effect. Institutional investors represent the long-term capital needed to support pensions, insurance systems, and welfare.

Second, use the stock market, a powerful growth engine. But it requires true commitment, not tactical IPOs designed merely to boost valuations and cash out.

Third, encourage generational turnover among shareholders. This could take many forms, from startup ecosystems to innovative tools like search funds, which help aspiring entrepreneurs acquire companies with no clear successors.

Italy’s challenge is not just to define a new label for its capitalist model. But if we had to choose one, perhaps it could be “distributed capitalism”, a system that goes beyond state and family ownership to empower more firms to grow and compete.

Labels aside, what truly matters is ensuring that ownership means responsibility and embraces the principles of governance, talent, impact, and authority. Otherwise, we’ll spend the coming years telling stories of excellent companies being acquired by foreign investors, and we’ll see even fewer than six Italian names in the global top 500.

The size of our companies is not a technicality: It’s central to productivity, and thus to Italy’s global competitiveness. Without a decisive shift to support the growth, transformation, and scaling of smaller firms, we risk being stuck in an economy of low productivity, low innovation, and low wages.

Overcoming Italy’s “productive dwarfism” is a cultural challenge as much as an economic one. But it’s also the key to giving the Italian economy a more competitive and dynamic future.