Italy falls behind other EU countries in terms of digitisation, coming 20th in the European Commission’s DESI Index, which measures the digitisation of all 27 EU Member States. To help address this and give businesses a better understanding of the growth opportunity digitisation brings, we commissioned The European House – Ambrosetti to carry out a study on “The contribution of social networks and digital channels to the growth and digitisation of Italian SMBs.”
The State of Digitisation of Italian SMBs
It emerged from the study that Italy needs to increase its level of digitisation and that this process can only happen through the digital growth of small and medium-sized businesses (SMBs), which many regard as the backbone of the country’s labour productivity. Although the Covid-19 pandemic helped to improve the use of digital collaborative solutions by 14.5% and customer communication by 12.7%, the level of digitisation of Italian SMBs has remained low. In the study’s ‘SMB Digital Index’, which investigates areas like network access, business digitisation, digital interaction with customers and ICT skills, Italian SMBs are only ranked 18th in Europe.
One of the main areas of delay in their digitisation is digital skills, where Italian SMBs rank 21st in the EU, with the lowest levels (12%) of ICT specialists in their workforce compared to the European average (18%). While the areas where Italian SMBs perform better than the European average are business digitisation (through electronic invoicing) and the adoption of digital technologies linked to the use of the cloud, which see Italy at 7th place in the EU.
“Nowadays we are at a technological tipping point. The digital acceleration we have witnessed in recent years has shown companies of all sizes that new avenues and new opportunities for growth have opened up and that we need to continue to innovate in order to remain relevant and competitive. We used to think that the traditional economy and the digital economy were separate entities. Now they are indivisible. Digital tools are at the heart of every industry and organisation and have never been more important than they are right now.” – Luca Colombo, Country Director of Meta in Italy
Social Networks are a Lever for the Growth of Italian SMBs
As part of the study, research was conducted on 30 SMBs that had effectively used social networks like Facebook and Instagram to reach new customers. Its results showed digitisation makes them more productive and boosts employment. In particular, the analysis found 4 key benefits achieved by SMBs, which are increases in revenues, the number of customers reached, followers on social networks and investments.
The social and digital channels enabled the SMBs to grow their revenues by around 20%, without having to invest in opening physical spaces. Social networks also proved a valuable ally at the height of the pandemic in 2020, because they enabled companies to maintain up to 60% of their revenues. This increase in revenue is closely linked to the customer portfolio. Whereby, the companies that used social networks and digital channels increased their customer base by 30%, spreading out nationwide and acquiring 10% more new customers in international markets.
The study also shows a 77% growth in the share of SMBs using social networks could generate an additional contribution to the GDP of up to €10.2 billion and significantly increase employment in Italy, with over 208,000 new workers in SMBs.