(Adnkronos) - Nel primo episodio di “Chief of Innovation”, la serie creata e prodotta da Adnkronos e Centro Economia Digitale, Giorgio Rutelli e Rosario Cerra dialogano con Massimo Carnelos, consigliere d’ambasciata e Head of Technological Innovation and Startup del Ministero degli Affari Esteri. Carnelos ha oltre 20 anni di esperienza, non solo come diplomatico, nei campi dei servizi finanziari, affari normativi, relazioni con gli investitori e innovazione tecnologica e ha lavorato in Regno Unito, Unione Europea, Asia e Medio Oriente. Con lui si è parlato dell’ecosistema delle start-up italiane e del Venture Capital, delle biotecnologie, di tecnologie di frontiera come intelligenza artificiale, quantum computing, microelettronica, materiali avanzati, e anche dell’azione della Farnesina per portare aziende italiane nella Silicon Valley (nel 2022 a San Francisco è stato lanciato InnovIT, il centro per l’innovazione) e attrarre investitori stranieri nel nostro Paese.
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00:00Welcome to Chief of Innovation, which is a series created and produced by DNA Kronos together with Centro Economia Digitale.
00:14I am Giorgio Rutelli and on this journey with me will also be Rosario Scerra, who is President of Centro Economia Digitale.
00:22And today with us we have Massimo Carnelos, who we can define in a very inappropriate way as the Chief of Innovation of the Ministry of Foreign Affairs.
00:30In reality, he deals not only with the innovation of pharmaceuticals, but also with the innovation of Italian companies in the world and the projection of Italian companies in the world, innovative companies in the world.
00:44Let's start immediately with a first question about Italian start-ups.
00:49Italian start-ups, like a good part of European start-ups, find themselves facing an obstacle, which is basically to have a very rich and flourishing potential market, which is the European one,
01:02but which is made up of 27 member countries, in which there are different regulations, different compliance obligations, different capital markets.
01:13And so it is a significant obstacle, because it is not easy and above all it is not comparable to a market like the American one.
01:20What is the state of health of the Italian start-up ecosystem?
01:25Thank you for the invitation. Well, let's say that it is a state of health better than ten years ago, when there was the first start-up, which gave a regulation, a regulation of the sector.
01:40But it is still a sector that is far from those that are, not only American standards, but European standards, we are still behind.
01:49Our main problem, from my point of view, is that of fragmentation of the Italian ecosystem, which is actually a mirror of our economic situation, made up of small and medium-sized companies without large hubs.
02:04While the world of innovation, and in particular that of start-ups, lives on density, density of actors, different from each other, there is finance, there is the legal part, there are universities, there are public research centers, there is the big corporate that does innovation.
02:22Start-ups live in an ecosystem of this type, where there is contamination among different knowledge, because then start-ups develop new technologies, but also new ideas, new commercial ideas, new services.
02:35And where the ecosystem is fragmented, we find ourselves with so many small hubs that cannot do mass criticism. This is obviously a complex issue, because the regulator, the state, tries to bring development everywhere in the territory.
02:54When we talk about start-ups, those are the conditions to make an international hub emerge, starting at the European level. We have seen that more or less, even in European countries, at the level of hubs, there can be one or two that can emerge, you can't have six or seven hubs.
03:16Unfortunately, this is the basic situation. So, in a way, we need to put priorities. With a work that is being done with colleagues from the Ministry of Made in Italy and the company, there is a revision of the Start-up Act, which has done a good job and now serves to improve some of its parts, even on advanced experiences.
03:42This is my personal opinion on the definition of a start-up. A start-up is not a company that becomes a small or medium-sized company and maybe scales up. A start-up is a company that has to scale up very quickly, and for this there is a type of finance for a start-up called venture capital, or it has to die.
04:00So, even the director of start-ups, who has access, gives rights to a whole range of very important facilities, and more or less the various European countries copy them from each other, and then the United Kingdom has made a bit of a mess in this part of the world.
04:15But a start-up cannot live in clarity. Within two or three years, it has not been able to scale up. It is better that it disappears and emerges with another project, because then the ideas are recycled.
04:30So, with the Start-up Act, which I like to mention, because we are also giving our help, there is a whole revision of important facilities and incentives that are already there and can be improved.
04:45Certainly, there is a need to intervene in the corporate law, where the so-called recession law should be exempted. But the fundamental point is what is missing in Italy, compared to some other European countries above all.
05:01There is a lack of entrepreneurship that is able to take those risks that are typical of a start-up. So, if we look at the national assets, which is a very, very important industrial and manufacturing fabric, and a public research and development in universities, in CNR,
05:28which gives a high value of ideas and technologies and basic science, these are two assets that often lack the next link, that is, the applied research and the transformation of those ideas and solutions into a company that is able to scale up quickly.
05:50So, on the one hand, to make use of these resources that we have, to improve the level of general entrepreneurship of our founders, because these are the ones who then create a start-up, and greater coordination on the territory.
06:10The idea of a public agency that acts as a director of what happens on the territory is hospitable, there are many other countries, but Italy, alas, does not have it and it would be useful.
06:23So, let's say, light and shadow, with the need to reduce the number of start-ups, so let those who are in the start-up community enter the fact that it is not a question of having 14,000 start-ups in the dedicated record of the company, but having a good quality of what is inside.
06:51So, fewer numbers, more substance.
06:53Talking about venture capital, the OX data on venture capital investments show that in recent years there has been an explosion, especially with regard to artificial intelligence, but this explosion, paradoxically, corresponds to a concentration.
07:11Most of these investments are all in the United States, followed by China and very far, very far from the European Union. Here we are talking about a ratio of almost 1 to 10 between the United States and the European Union.
07:28The other countries that follow are the United Kingdom, which, however, has an excellent international standing, Israel, India and Germany. Germany is the first nation of the European Union.
07:42The Italian OX data is a growing data, but in some way it defines a delay in the country with respect to this venture capital dynamics.
07:57I'll give you some data that the OX provides, very specific on 2023, in which it says that Italy has exceeded a billion as investments in artificial intelligence, but in front of Spain's 3.7 billion, France's 11.7 billion and Germany's 16.3 billion.
08:20So, how does venture capital work in Italy and what can we do to improve it?
08:25So, we are definitely behind on venture capital. We have had a linear growth, this can be said in recent years, not exponential. We have now exceeded a billion annual investments in a couple of years.
08:39But the gap with France, which is a country that we could face even at the level of PIL, the gap is that France does 6, 7, 8 times more. And this is not justified, it is not understood, it is not justified even by the fact that we are a much more industrialized country.
09:04So, to understand why in Italy the venture has not reached those levels. So, we started later, this is a first element. The other is that we have few, we certainly have a larger number of funds, but they remain small.
09:30And with the risk that these funds, what do they do? They manage to help in the first phases of the growth of a start-up, but for the subsequent phases there are no larger funds that can follow the national scale, but above all international.
09:48And then these excellent companies are prey to larger foreign funds, with the concrete risk that there is a transfer of the company. So, we often talk about the escape of the brains, and we are careful, there is also the risk of company flights, which perhaps is not so often focused.
10:12So, it's a bit of a vicious circle. So, we don't have unicorn stories, which are start-up companies that reach a market value of over a billion. And since we don't have unicorn stories, we can't emerge in the rankings of the international venture capital.
10:32So, the international investors don't put money in the Italian venture capital because they judge them small, and above all they look at the track record and say, well, nothing came out of you, just as little came out of the Italian innovation hubs. So, it's a vicious circle that's hard to get out of.
10:54The important work that has been done here is certainly the creation of the Italian Innovation Fund and CDP Venture as a manager. It is a very important job because it made it possible for the state to enter a sector in Italy for the first time, where there is a clear market failure.
11:15And CDP did a very important first job in early 2021. Now they have approved a new strategy that provides a focus on some more strategic sectors, therefore deep tech, also considering two factors. The first is that you can't do everything.
11:40The second is that the government intends to focus on some strategic technologies, emerging technologies, enabling technologies, disruptive technologies. And so there is an alignment between the activities of CDP Venture and those of the government's industrial policies, we mentioned AI.
12:02This seems to me to be an important and positive step because there is an alignment between the two actions.
12:14Let's stop there, it's not that other sectors are not important, but in some cases, even in the venture world, even in the startup world, these sectors were relatively mature.
12:26The classic example is fintech. Fintech in Italy is one of the few that has managed to grow. The only two unicorns of recent years are two companies, Fintech Satisfay and Scalapay.
12:42The key point here is how to bring more institutional investors into the funds, into the Venture Capital operators, since then there must also be companies that are profitable enough to be invested.
13:11There, moving the institutional funds, then the cash, the investment funds, is back to the governor Panetta, rightly. And it's not easy, also because then we find out that in Italy there are insurances that invest in foreign venture funds, but not in Italian ones.
13:26Why do they invest in us? Because those funds are bigger, they have a track record of high returns thanks to important exits, if not unicorns.
13:41So, here we act in two ways. On the one hand, tax evasion, which can be increased, of course, if there are the resources. On the other hand, guarantee mechanisms.
13:52This is an interesting project that we are studying with SACE, that is, public guarantees, to increase the amount that institutional funds, that is, cash, investment funds, investments, put in the asset class of the alternatives in a specific venture.
14:10Will it work? Will it be able to have it? In short, this is still an open construction site, SACE is working very hard, we have given a hand to the Minister of Foreign Affairs, because we do it, because that is also a tool to make sure that there are foreign investments, that is, institutional funds, pension funds, in Italian venture funds.
14:32So, it is a way to increase the cake. So, in addition to a bit of moral suasion on the part of politics on the funds, in short, given importance to this specific type of finance, because it is the only finance that can invest in venture capital funds, in start-ups,
14:59given their high level of risk. And so, a bit of moral suasion is also needed, because then, and maybe we can address it in another subsequent question, start-ups are the companies that typically go to invest in border sectors.
15:18Let's talk then about border technologies. Border technologies are what research is focusing on the most, of course, but they have aspects that we can define as emerging, in short, to describe them, they are emerging technologies, they have not yet given 100% of themselves, and at the same time they are technologies that are expected in the next 20 years to have an explosion,
15:45and with this explosion they are able to substantially change the lives of people in a very radical way. There is a theme that concerns the application and the effects of these technologies, which are obviously transversal and concern all sectors.
16:04Let's think about artificial intelligence and quantum technologies, which are obviously transversal by definition. So, the Ministry of Foreign Affairs, how is it approaching emerging technologies?
16:21So, we have created, within the Ministry of Foreign Affairs, an office that I have the pleasure of managing, which is precisely that of technological innovation, of start-ups. And start-ups, not by chance, because they are the companies that invest in sectors at greater uncertainty and therefore at greater risk.
16:44So, having them together is not a coincidence. So, from my point of view, this has been the reasoning behind this reorganization within the Ministry of Foreign Affairs. Because the big corporate can invest in border technologies, and probably the big one does, but they do it with a specific purpose.
17:08It is the start-up that invests in what is still an unknown. I want to give you a concrete example, with numbers that I find absolutely interesting.
17:24There is a study from 2016, done by an American research center, which shows that in the thirties that ended in 2010, so 1980, 1990, 2010, the IPOs, and half of the IPOs were ex-start-ups that were listed.
17:46So, companies that had been invested in venture capital, even though in that thirties, 0.25% of American companies had received venture capital investments. In 2010, these ex-start-ups invested in venture capital were the companies that represented a fifth of the US stock market capitalization.
18:13And 44% of the research and development investments were from the private sector. What does this mean? We know the names of these companies, because we have them on our phones or on our computers.
18:29It means that venture capital, which invests in frontier solutions, innovative solutions, has completely transformed the economic system, not of a country, but of the main economy in the world.
18:44These were data from 2010. Today, in 2024, another 14 years have passed. So, I leave out the relationship and the definition of what we are today compared to 2014. It was a geological era.
19:01So, these are very concrete data on where a country, if it wants to look forward, must aim. The technologies mentioned are those that determine our future, because they are, on the one hand, transversal, they are enabling and transformative of an economic system.
19:22So, in many of these sectors, we have an advantage that is compared to what we did not have on other purely digital technologies, where perhaps we have also lost some train, but on AI we have an excellent pool of competences that come from universities, which are not by chance stolen from large corporations, such as Google.
19:52Microsoft is taken out of Italy. But how much can we really play? We can be at least in the Serie A championship. I know this because we are approached by American companies that say, we want to move to Europe, we look at the United Kingdom, which has a quantum strategy for 10 years, we look at Italy because we know that in Italy we find excellent talents.
20:17The same goes for advanced materials, so we think of our entire manufacturing industry, which has specific industrial competences in these sectors, or biotech. We have a health system that has its assets, from data to research done in public institutions and hospitals. This must all be valued.
20:41Speaking of biotech, this last topic touched upon. It is a sector with a high intensity of research and in which Italy can say something. There is always the Italian theme, which is that of the size of the companies, because in one of the last reports of ISO Biotech, it was said that 80% were small or micro-companies in this sector.
21:08And then there is a good part, I think two-thirds of the turnover, is of companies that have foreign capital. So abroad they have noticed that in Italy there is a world to invest in and that is ready to grow. But what is Farnesina doing to make this world grow and to bring it not only from abroad to Italy, but from Italy to abroad?
21:32Speaking of the size of companies, medium and small, the problem is precisely this. How do you grow a company in terms of size? By creating more markets. That is, by opening to the company the advanced markets and the emerging ones, opening the company to a greater internationalization, to partnerships with other countries, with companies from other countries.
21:58That is the way to grow a company, together with a more careful selection of public resources that must go into projects of greater added value and more futuristic projects, and the increase of private resources through a whole series of interventions, which in part are regulatory, but they are not only regulatory, they are also simply public strategy,
22:26of public actions. In this, we as the Ministry of Foreign Affairs obviously do not operate internally, but we had the idea on the advice of the Italian minister, after an important conference in November last year between Italy and the United States, precisely on biotech and how to finance biotech, the creation of a work table, a table that has no cost for the schedule,
22:52in which we put together with its trade with abroad, which as you know is monitored and receives addresses from Farnesina, the MUUR, the MIMIT obviously, which follows the pharmaceutical sector, biotech from an industrial point of view, a series of important characters, both Italian and Italians present abroad, in the academic world, in the world of research, in the world of finance,
23:20CDP Venture present with the president of the group, to gather ideas, inputs, how we can internationalize the Italian biotech world, both companies and research, and how we can make it grow in this way.
23:42And so we have gathered the inputs, a series of bilateral meetings with the components, a couple of remote plenary meetings, with a very valid moderator, Luigi Paracchi, who is in Assobiotech, in addition to being an entrepreneur, the first Italian company listed on Nasdaq.
24:06We have a work of sharing of ideas, where we are now coming to the definition of what is an interim relationship, before the interim relationship, the relationship is conclusive by the end of the year.
24:23And so we are pouring on the world of political decision-makers what are the emerging evidences, obviously we will also share these evidences with the ecosystem of research, universities, venture capital funds, startups operating in the biotech world.
24:45So for the interventions that require a regulatory action or financial interventions, we leave it to the political sphere.
24:57We as the Ministry of Foreign Affairs can be immediately operational, and we will be, by doing two things. First, by refining the action of attracting investments, marketing abroad on our opportunities.
25:14And the other, a more targeted and cohesive action, in bringing the biotech companies to the major international events, the major biotech conventions, where important decisions are made in terms of research, financing, investment in companies.
25:31We can do this immediately, on the other hand, we have a whole range of options, of suggestions, which come, I repeat, not from us, public officials, but from great experts, who have expressed themselves for free, and freely, in their opinions on how to improve the national ecosystem.
25:54Obviously, the final goal is not the internationalization itself, but the growth of the ecosystem. Because it is a sector where you cannot not be there, if you want to count on the future.
26:05You were talking about the fact of the internationalization of companies, of bringing companies where there are fairs, where there are major conventions, where there are major conferences, and Farnesina has now opened a center, almost a couple of years ago, in San Francisco, in Silicon Valley,
26:26where innovation is the biggest hub in the world. How is this experiment of having a forefront in the most important place in this sector going?
26:41We like to say that Innovit is a project of the Italian government, of the Italian state, also because the suggestion came from a visit of President Mattarella in Silicon Valley a few years ago.
26:53It is a project that we are carrying out, obviously, together with ICI Agencia and its trade with abroad, which in fact is until 2022, but it has been operational since January 1, 2023.
27:06I can say, because I manage the Innovit team, that such a success, we did not expect it. Everywhere I go in Italy, I talk about Innovit, everyone knows it in this community.
27:19First of all, it is a poly-functional physical place, which is a showcase of a different Italy from that of the common places abroad, an Italy made of innovation, technology, experimentation, great skills,
27:36from the big corporate, which obviously would not need us to go to Silicon Valley, but then Innovit thinks, it gives the idea of being a showcase of Italy, so it is also convenient for me to go through Innovit and position myself in that area as an Italian company.
28:01The numbers are not smooth, they are a bit visible on the site, hundreds of Italian entrepreneurs that we have brought there, big and small, and we bring startups there to accelerate themselves in very vertical acceleration programs,
28:21a place where events are held, where people meet and dialogue with Silicon Valley. But the thing that I would like to underline is that this is a public and private partnership, in the sense that through a band, through a race, an operator is selected for a period of time.
28:40This operator must, according to the contract, exploit activities, which are mainly acceleration programs and some institutional activities, but for the rest it can sell services to the market locally, which go to validate that place.
29:00Success, I repeat, the results are only positive, which pushes us on the one hand to stabilize this project and when possible, when we have the resources, replicate it elsewhere. This will be seen in the future, but our ambition is our desire.
29:22So Innovit is certainly a choice of success, it is a choice that is looked at with interest by other countries, which are much more advanced than us, which come to San Francisco and ask us to visit the European Commission, to show us how you work and why you have this great success.
29:40One last thing about Inno, which I must say, this is very important, this is the role, the great value added by the network of embassies and consulates, is the network of knowledge, i.e. an embassy in Washington with the ambassador, the consul general in San Francisco, who then have a list of highly profiled people to whom you can ask if they are Italians, a give-back, if they are foreigners, maybe they are interested in Italy, to participate.
30:05They are people who, both as mentors and as members of the advisory board, give you the right advice and then they open doors for you wherever you need them.
30:18This is the model that is working magnificently and that we can say is also doing a bit of school compared to countries that are more advanced than us in these areas.
30:31Well, thank you.
30:32Well, I was talking about skills.
30:35So, on skills, obviously if we want the country to take this path of innovation, of high-tech, biotech, artificial intelligence, quantum computing, quantum technology, it is evident that skills, high skills, specific skills are a strategic factor.
30:55Unfortunately, I must say that in recent years we have had a dispersion of these skills.
31:02The ISTAT data in the 2012-2021 decade speaks of about 337,000 young people between the ages of 25 and 34 who have left the country, of whom more than 120,000 have graduated.
31:18Now, it is quite evident that if we want to talk about Italian technological sovereignty, in some way these people would have been better valued within the technological innovation processes of the country.
31:32But there is not only this exit of skills, there is a theme that is just as strategic, which is that of attracting resources and skills to our territory.
31:45In this regard, what is Farnesina doing?
31:50Well, the fact that young graduates are leaving is not a problem in itself.
31:59The problem is if they do not return, because going abroad there is certainly an enrichment, and by returning they can bring new skills and a series of contacts that are very useful for the growth of the national ecosystem.
32:15I would say that what the governments have done in recent years, based on which we cannot say that Italy has not moved,
32:29because we have three types of views to attract, now we have talked about our talents that go abroad and return, but there are also foreign talents that we could attract from us,
32:38but there are also foreign talents that we could attract from us,
32:42we have three types of views, the investor view, the start-up view, and now we have the view for the digital nomads,
32:49and we have a whole series of tax exemptions, there are at least 4 or 5, from the fact tax of 100,000 euros to the return of researchers,
32:59to the tax exemptions for professionals, both as self-employed workers and as independent workers,
33:08so there are tools, and we are not behind any other country.
33:16What is still missing?
33:18What is still missing are the conditions on the territory that make Italy feel healthy,
33:26because it is not just a question of cost of living, quality of living, which in Italy is quite high, and the possibility of having a visa,
33:39there is also a question of density in terms of health, of ecosystem,
33:43that is, the person who comes here decides to move to Italy to do entrepreneurship,
33:48or to work in a company, or to create his own company, or to join a company,
33:54he always makes a speech, but if then I lose that opportunity, can I get it back?
34:00This is the mantra that exists in the financial hubs, because there are financial hubs,
34:05because London is London, New York is New York, because if I lose my country,
34:08my job is the best place to find it, and this does not exist everywhere.
34:14So Farnesina continues to do an action for the attraction of investments and talents,
34:24through these schemes that are structured in collaboration with other financial hubs,
34:32and then there is the action of our diplomatic and consular network,
34:36through German investment attractions, to convince foreign investors,
34:45both liquid investors and companies that want to move to Italy,
34:50to come to our network, because there are tax and regulatory conditions,
34:56and then when the investor arrives here in Italy, and the connection with the regions,
35:02with the territories, to fluidify all the procedures,
35:08and maybe also use public resources to promote this investment.
35:12It is not a sector that I deal with, but what we are looking at with great interest
35:19is the re-entry of technological entrepreneurs.
35:25Before we talked about start-ups, we talked about the shortcomings
35:28that we have in technological entrepreneurship.
35:32We have excellent scientists, and these scientists sometimes do not know
35:40what it is to do business, so we are at the world level, almost top
35:45in terms of paper production, research and citations,
35:49but then when we go to see the technological transfer,
35:51a bit because our public innovation centers and universities
35:56do not have such familiarity with the process of technological transfer,
36:04as for example in the United States, where they teach technological transfer,
36:08and a bit because there is not that attitude or that culture
36:12to the fact that you, a researcher, could actually make money
36:16without demonizing money, because it is what creates business,
36:21it is what creates value that is distributed on the territory
36:25through occupation, added value, paid taxes, further investments,
36:30because it is obviously a virtuous circle.
36:32So to be able to bring technological entrepreneurs
36:36who have been successful abroad, to two positive results.
36:47On the one hand, you bring someone who has a high financial
36:52availability and decides to move to Italy, and maybe he starts
36:56to do business there, or in any case he pays the taxes,
36:59within the limits of the scheme he chooses.
37:03In any case, you make a purchase.
37:06The second very important thing, looking at those handicaps,
37:12at those parts where we are still a bit behind,
37:15so technological entrepreneurship on frontiers technologies,
37:18you bring a person who not only can become a new entrepreneur
37:21on the Italian territory, but can do it as an advisor,
37:24as a consultant to the same CDP Venture that we talked about
37:29and who looks at this hypothesis with great interest,
37:33having to start investing more and more in frontiers technologies,
37:37to have people who, even for free,
37:41make you a consultancy on how to create an artificial intelligence company
37:46that produces models of artificial intelligence
37:49and knows how to scale internationally.
37:51This is very important for our country,
37:53because we don't have enough of them.
37:56Thank you, thank you Massimo Cardellos for being with us.
38:00Thank you Rosario Serra and the Centro Economia Digitale.
38:03See you at the next CIFOM Innovation meeting.