The rules of attraction (for assets)

Per sostenere la ripresa economica e garantire il benessere futuro del Paese, è cruciale aumentare l'attrattività dell’Italia agli occhi degli investitori internazionali, preservando gli investimenti correnti e incentivandone di nuovi


Foreign direct investment (FDI) is an important indicator of Italy’s ability to attract foreign investment, and with it all the associated benefits in terms of economic growth. This is a particularly important contribution for a country like Italy, which is characterized by particularly weak growth and an overall lower productivity than the main European countries.
In recent decades, however, alongside stagnant economic growth, our country has recorded lower foreign direct investment than the biggies of Europe, despite a recent improvement in its position (it now has a score of 66.3, considered “a good level of attractiveness”).

According to The European House-Ambrosetti report “Increasing Foreign Investment Attraction for the Competitiveness of Sistema-Italia. What strategy for the pharmaceutical industry? an improvement in the ability to attract foreign investment is crucial to Italy’s economic recovery and long-term well-being..

The benefits of direct investment

The paper-dedicated to the analysis of foreign investment in our country and the role of the pharmaceutical sector in this context-shows that multinational companies with foreign investment bring multidimensional value to the national economy. Their influence extends far beyond direct operations, which include research, production and marketing.

They are a significant driver for the generation of new job opportunities and the activation of complex production and distribution chains. Moreover, their impact is reflected in enhancing the competitiveness of local businesses and enriching the management culture, which benefits from the dynamism and global outlook introduced by these organizations.

According to data from the report, in Italy, multinationals contribute 16.5 percent of the country’s value added but are responsible for 27 percent of R&D investment, a significant contribution to scientific and technological progress in a country that invests only 1.4 percent of GDP in R&D (compared with 2.2 percent in France and 3 percent in Germany).

Moreover, foreign companies are distinguished by a larger average size, which translates into tangible benefits such as economies of scale, privileged access to highly skilled resources, and a greater ability to diversify and establish collaborations on an international scale.

Their production efficiency is significantly higher than that of domestic firms, with value added per employee reaching 81,000 euros (compared to 47,400 euros for Italians). They are also competitive in terms of training and professional development paths and wage levels.

Obstacles for investors

Unfortunately, however, several factors limit the desire of foreign companies to invest in Italy. These include the public debt, which in 2022 reached 144.7 percent of GDP (2,762 billion euros), the high level of bureaucracy, which affects the costs and start-up time of business activities, and the level of corporate taxation (Italy ranks third in Europe in terms of corporate income tax, at 27.8 percent).

Weighing on the pharmaceutical sector in particular are regulations that are unfavorable to the introduction of innovation, a time-to-market that is too long, and the delay in implementing the European Clinical Trials Regulation.
But above all, the current governance of pharmaceutical spending represents a major brake to the country’s attractiveness:

the pharmaceutical spending budget, set at 14.85 percent of the National Health Fund National Health Fund, has historically proved insufficient to cover spending levels, with a penalization through the payback mechanism especially of pharmaceutical companies with foreign capital.

The European House-Ambrosetti report “Increasing Foreign Investment Attraction for the Competitiveness of Sistema-Italia. What strategy for the pharmaceutical industry?”

The numbers of the pharmaceutical sector

Nevertheless, the pharmaceutical sector itself represents a spearhead of the Italian manufacturing industry and a key element of the Life Sciences ecosystem that “plays a crucial role in the country’s economic growth.” Specifically:

  • The 282 pharmaceutical companies operating in Italy generated an added value of 10.7 billion euros in 2022, accounting for 0.6 percent of Italy’s GDP, accounting for 3.9 percent of the total produced by the manufacturing industry. The added value rises to 34.4 billion euros if activated supplies and induced consumption are also considered.
  • The industry has invested 3.3 billion in innovation in 2022, including 1.4 billion for production facilities and 1.9 billion for research and development. Clinical trials represent an important and growing part of these investments.
  • The pharmaceutical sector experienced growth in the number of employees, from 65,800 in 2019 to 68,600 in 2022, an increase of 4.3 percent compared to -1 percent for the average manufacturing sector over the same period. Employment in the sector is distinguished by a high level of qualification, with 54 percent of those employed holding a bachelor’s degree, and a female employment share of 44 percent, higher than the manufacturing average.
  • In 2022, the pharmaceutical sector reached a production value of more than 49 billion euros, with total exports of 47.6 billion euros, mainly to EU countries, and a trade surplus of 9.1 billion euros.