Assintel Report 2020: Italian ICT sector doubles growth despite stagnating GDP, but small companies are still struggling

Assintel, the Italian association of ICT companies and founding member of the Italian DIGITAL SME Alliance, published its much-awaited report on the state of the ICT sector in Italy.

2019 was a good year for the Italian digital industry, and 2020 promises to continue on the same path. The Italian ICT sector doubled its growth in compared to last year, withstanding a nationwide stagnation. It now exceeds 24.2 billion Euro in worth, amounting to a plus of 3.8% over 2018. This trend is predicted to continue in the coming years, with an overall +2.6% growth in IT investments for 2018-2022 (CAGR). On the other hand, the decline of growth in the telecommunication sector continues (-2.7%), diminishing the overall ICT growth to “only” 2.3% in 2019, exceeding 31 billion euro in total. The software sector grew +5.7%, hardware turned its previous negative trend around for a plus of 6.2%, and IT services also increased by +1.4%. 

The digital transformation continues to drive spending. Growing exponentially in investment among emerging technologies are the sectors of Internet of Things (+24%), artificial intelligence (+39.1%), augmented and virtual reality (+160.5%), and wearables (+116.2%). The traditional pillars of the Third Platform also continue their upwards trend: Italian companies spent +26.1% on public cloud solutions and +7.6% on big data and analytics.

Investment trends among Italian companies

The report analysed trends for 2020 to understand the directions of the market and companies’ investment intentions. The survey of over 1,000 business users shows a positive picture of growth in IT investments in 2020: over 16% of Italian companies expect to expand their budget in 2020, while only 10% are considering the possibility of rationalizing and an overall reduction in expenses. Medium and large companies drive growth: 25% of medium-sized companies and 23% of large companies intend to increase spending over the next 12 months, in some cases even above 20%. By contrast, micro and small businesses, which account for 10% and 7% respectively, are reducing their spending in the coming year. Among the geographical areas that plan to expand their ICT budget in the next 12 months, the North West leads in the absolute number of companies (about 39%), followed by the southern regions and islands (34%). Some sectors are particularly positive in forecasts: almost 30% of production industry expects to expand their ICT budget at least in single digits, while over 4% of public administration, healthcare and education see double-digit growth. There is a bit more caution in the trade sector, where almost 18% of companies expect a reduction in budgets for next year.

“In Italy, companies determined to reap the benefits of the digital transformation are focusing above all on the redesign of their business model and the monetisation of data. Although this puts Italy in line with the trend of Digital Transformation in Europe and worldwide, it is, unfortunately, necessary to point out that the speed of change is not yet uniform throughout the national industrial fabric: Italy still appears split in two based on company size”,  comments Daniela Rao, senior research and consulting director of IDC Italia.

“The challenge for the ICT community is to drive the digital transformation by really putting itself on the line: On the inside by rewriting its own business models, and on the outside by becoming a “cultural driver” towards the system of companies and public administration”, commented Paola Generali, newly-elected president of Assintel. “I see the association as a super-technological train that must gradually welcome more and more technology-aware travellers.”

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