RESEARCH AND DEVELOPMENT, FOREIGN COMPANIES FOCUS ON INNOVATION WITH 33% OF PRIVATE SPENDING

Confindustria and Luiss present the fifth Foreign Companies Observatory report

Rome, 20 March 2024 - Investments of foreign-controlled companies in Italy, both in tangible and intangible assets, recorded a considerable growth in the period 2014-2022, contributing to the country's capital accumulation process. In 2022, large companies, both foreign and Italian, made about one tenth of the total investments in industry and 6% in the service sector. Moreover, these enterprises play a key role in Italian exportsrepresenting more than 34% of the total and contributing significantly to export growth in the period 2015-2021. They are mainly active in the manufacturing and automotive sectors, exporting a variety of products and services. Foreign companies demonstrate a strong propensity for innovation and adoption of advanced technologieswith significant R&D, in which they invested 5 billion in 2021, +23.4% compared to the previous year, and accounting for almost 33% of private R&D expenditure. They also make a significant contribution to patent applications in Italy, with over 12% of applications presented.

This is what emerges from the V Report carried out by the Foreign Companies Observatory of Confindustria and Luiss, in collaboration with ISTAT, Scuola IMT Alti Studi Lucca and ICE-Agenzia, "Le imprese a controllo estero in Italia. Quality, innovation, investment, sustainability, internationalisation: an agenda for the future', presented today in Rome at The Dome - Campus Luiss on the occasion of the Second Annual Meeting of the Foreign Investors Advisory Board (ABIE) of Confindustria, entitled 'Investing in the future by navigating uncertainty'. The Report analyses the role of foreign invested companies in the Italian economy and their contribution to economic growth, innovation, exports and attention to sustainability and workers' welfare.

There are 17,641 foreign enterprises active in Italy. Up by 11.8% compared to 2019, in particular in strategic sectors such as pharmaceuticals, automotive, energy, chemicals, IT and trade. Most of these companies are based in the European Union, North America and other European countries, with the United States, France and Germany contributing more than half of the total value added.

Enterprises with foreign capital are mainly concentrated in the service sector, are 12,574, representing 71.3%, even if they have a significant presence in industry with 28.7% (5,067 enterprises). In addition, their presence in the high-tech sectors in industry and knowledge-intensive sectors in services is higher than that of the other types of enterprise.

"These companies are distinguished by their presence in high-tech sectors, their focus on the circular economy, pollution monitoring and sustainable mobility. They invest in new technologies and continuous staff training." stressed Barbara Beltrame Giacomello, Vice President for Internationalisation of Confindustria and President of the Advisory Board Foreign Investors. "However, Italian companies with foreign capital face significant challenges, including a shortage of qualified personnel and bureaucratic burdens. To meet these challenges, the only way is for all of us to work together to create the conditions for them to continue to believe in our country and seize new investment opportunities'.

"The Osservatorio Imprese Estere (Foreign Companies Observatory) has an important role: through the story of companies with foreign capital, it brings the issue of industrial development, which is fundamental for Italy and Europe, back to the centre of the debate. It does so by looking at all those factors that need to be cultivated in order to create a favourable environment for investment and allow multinationals to draw up 'an agenda for the future', creating employment and innovation in our country. Alongside the economic challenge, we need to address the key issue of training human capital, an essential value for building, together with institutions and businesses, the new class of global leaders that the country system needs,' he said. Luigi Gubitosi, Luiss President.

"The Observatory's 5th Report confirms, once again, the contribution and positive impact that foreign companies are able to generate in Italy. These are companies that are distinguished by a significant propensity to invest and innovate, giving great impetus to strategic sectors, such as Research and Development and Export, which are decisive for facing the many challenges and seizing new opportunities,' said Marco Travaglia, President and CEO of the Nestlé Group in Italy, Observatory Coordinator and ABIE member. "Companies with foreign capital are also characterised by their ability to invest in several key aspects including, for example, people and their training: human capital is an essential and decisive asset for strong and competitive growth not only of the companies themselves, but of the entire national production system.

"17 February 2024