Subsidized finance: fewer emergencies and more structural investments

The research, part of a three-year program analyzing subsidized finance calls, aims to clarify how public instruments supporting investment are evolving. After a first edition focused on describing the phenomenon, the second one centered on three main questions: 

1. Are there consolidated trends in the evolution of calls, or does the system remain volatile and fragmented? 
2. What happened to the emergency measures introduced during the pandemic? Have they run out or turned into structural tools? 
3. What’s the perception of the usefulness of subsidized finance among companies in making investment decisions? 

The analysis covered 2,596 subsidized finance calls published between 2022 and 2024. The sample provides a representative picture of the sector, excluding only sizeable European programs that could have distorted the overall view. 

The first finding is that subsidized finance in Italy moves at two speeds. Regional calls are numerous but small in scale, running the risk of resource “fragmentation” and a loss of overall effectiveness. National calls, on the other hand, are few in number but most of the funding is concentrated here. 

On the regional landscape, some regions stand out for their investment capacity and continuity, confirming their virtuous performance over the three-year period (specifically Lombardy, Piedmont, Sicily, Tuscany, Veneto, Lazio, and Marche). 

From the perspective of beneficiaries, the research disproves a common belief. In numerical terms, subsidized finance does seem oriented toward micro, small and medium-sized enterprises; but in value terms, over 70% of resources are potentially accessible to large companies. Yet it’s the smaller firms that show greater efficiency in turning allocated resources into funds actually disbursed by the government. Data from the Ministry for Enterprises and Made in Italy processed by the Observatory show that in 2023, small enterprises cashed in 52.7% of the amounts granted to them, compared with just over 50% for large companies. 

A second trend concerns the nature of the contributions. Pure non-repayable grants, while still the prevalent form of funding, are decreasing (from 46% in 2022 to 34% in 2024), while “hybrids” combining subsidies and soft loans are increasing. This dynamic signals a more selective, accountable approach. 

As for objectives, the emergency approach is over; measures related to Covid and other contingencies have dropped from 24% to 2% of funds. Sustainability instead continues to be the top priority throughout the period. What’s more, digital transformation is growing; in 2024, it was the second most frequent objective, surpassing innovation and entrepreneurship. 

For the first time, the research complemented quantitative analysis with a survey of beneficiary firms, currently counting about fifty responses, mostly from micro and small companies. Early evidence shows that 81% of firm executives believe that thanks to subsidized contributions, they were able to carry out projects that they would otherwise have had to postpone or abandon. In any case, the main difficulties concern navigating calls (42%) and the complexity of application procedures (53%). 

The time horizon of projects is mainly short to medium term (within three years), which indicates a tendency to use subsidized finance as a tactical rather than a strategic lever. In addition, it’s surprising that in 47% of cases the actual impacts were greater than expected: a sign of initial caution in forecasts, but also of the real effectiveness of supported investments. The positive effects mainly involve increased productivity, process efficiency, and cost reduction, rather than environmental or social aspects (although these are indirectly influenced by such improvements).

The emerging picture is one of more strategic and less reactive subsidized finance, but the issue of fragmentation and clarity still needs to be solved. For policy makers, the challenge is to reduce the background noise generated by a multitude of calls and to concentrate resources on a few instruments with real impact that are capable of providing continuity and predictability to investments. 

For managers, the recommendation is twofold. On the one hand, subsidized finance can be an effective accelerator of innovation and digitalization projects; on the other, it requires skills, planning, and the ability to move within a complex ecosystem. 

Read the article on Osservatorio Finanza Agevolata’s first edition: 

Meloni - Helpful, but… When subsidized finance actually works.