It’s not always obvious or easy to predict where the next best location is for the ever-evolving tech industry.
This may be the year of the Rabbit, but according to Orlando Crowcroft, tech and innovation editor of LinkedIn News Europe, it could also be the year of the dark horse, as he recently discussed tech sales in Italy in 2023. Let’s take a look at tech as an industry in Europe, and then Italy in particular as a tech hot-spot for 2023 — you just might uncover your next perfect product-market fit.
Demand for innovative business solutions will continue to thrive and grow. The rise of artificial intelligence (AI) and digital transformation ensure that technology continues to flourish as a major industry and shows no signs of slowing down — don’t let Big Tech’s headlines post over-hiring fool you, growth is still prevalent.
So where are the hottest European tech hubs up to now? The top three European tech hubs of London, Paris and Berlin are still the places that attract the most attention, and collectively knocked Dublin off its podium in 2022, in a list compiled by Tech.eu. What points were considered, for a location to make the list? The amount of tech companies operating in each European city, but also market composition. Add-on factors such as those that impact ability to grow as a business and work-life balance for employees were factored in, as well as salary levels.
So, besides London, Paris and Berlin, where should we look to as the “next big location” for tech hubs, going forward?
Italy is presenting itself as a worthy contender for your next European expansion target.
When considering where in Europe to go next, venture capital (VC) funding is a good predictor for a country’s overall openness to the next startup or scale-up disruptors. Italy’s VC ecosystem is showing firm signs of scaling up, hitting $1.7 billion last year and is projected to grow 64% year on year. In comparison, European investment overall is down 9%.
Which tech verticals attracted most of the VC funding? Not surprisingly the same that we see continuously selling well in Italy:
Italy aligns with the rest of Europe in seeing a continued growing investment — not just for startup funding but especially to adopt new tools — around sustainability, AI and machine learning. There’s also a maintained interest in traditional sectors like banking and telecommunications.
The exceptional growth wave of Italy’s tech scene is mainly concentrated in the areas of Milan and Rome, followed by Turin and Bologna on a smaller scale.
Don’t look at this as potential competition, but, more likely, a sign of an avid tech culture you want to be a part of. Plus, these startups need tools like yours too.
So, we know that the “boot” of Europe is one of the main economies of the European community with a large capacity of influence, but why might 2023 be the year of tech sales in Italy?
Let’s ask an expert. Stefano Barbieri has been our Italian country manager for more than five years and has more than 26 years of Italian tech sales under his belt.
Italy is one of the driving economies of the European Union, and Barbieri says that its unique culture makes it a great target for your tech sales strategy. “The natural propensity for communication makes all the sales and lead generation activities much more effective and full of interesting feedback,” he said.
Even those that were reluctant to believe that Italy could be the future of thriving tech sales are happy to admit they were wrong. Carlo Avati previously thought that Italy was at least ten years behind the likes of Berlin or Paris and their thriving startup scenes. Too old-school perhaps. Could young and dynamic ventures really do well there? Avati says that one of the most exciting parts of his journey with Hive — one of Europe's hottest startups that is re-envisioning how eCommerce brands can run and scale their operations on auto-pilot — has been in Italy, “experiencing first-hand the incredibly positive response of a market that has been eagerly waiting for a fresh and tech-focused solution to address the inefficiencies of current logistics offerings.”
Indeed, Italy is a ripe tech buyers’ market, but, like its other Mediterranean neighbors, setting up an Italian entity is a whole other challenge to your expansion. It is measurably harder to set up a business in Italy than it is, say, in North America. Italy’s tax system is painstakingly complex, and any startup targeting Italy must contend with exhausting and often confusing governmental procedures, including that a company representative has to first deposit at least 25% of the amounts contributed in cash with a bank. Compliance is another key factor, needing to always comply with GDPR and specifically align with local Italian laws, in order to avoid any unwanted fines. This extends to Italy’s arduous labor laws which make it incredibly difficult to make any changes — and you need that flexibility when you are still in the early stages of testing out a new market.
Perhaps most importantly, to succeed at selling tech in Italy, you must offer full-service coverage for your specific product or service — in Italian. And that message in Italian matters. For Italians, Stefano said, “Technology is seen as a factor of business acceleration and cost reduction.” That message must be integrated into your local campaign.
Avoid these local challenges and instead consider bringing in the expert services of an outsourced sales agency to make the job più facile. Not only do you get to avoid the rigmarole of local laws, existing tech buyer networks help you save time to market, and hit the ground running with local sales reps who are used to selling tech all day long. “The cost reduction and the flexibility of operation will help our market to grow,” Stefano explained, by partnering with a local sales outsourcing service in Italy.
Don't worry, even with our boots on the ground, you still have an excuse to come visit and eat your way across this beautiful country.
Since 2017, Stefano and our CEO Rick Pizzoli have mentored the next generation of Italian startups with UniCredit Start Lab — recently meeting and mentoring no less than 12 exciting new startups from the world of sustainability and a greener lifestyle, revolutionary healthcare and better business processes. All hot trends for 2023. All destined to thrive in Italy and beyond.
Since 2009, more than 500 startups have graduated from the Unicredit Start Lab program, where innovative Italian tech startups are carefully chosen from 700 applicants to receive 12 months of support from a dedicated UniCredit team and advice from industry experts like Rick and Stefano. There are specific initiatives to help drive their growth at all stages of the business lifecycle.
We continue to see these Italian tech startups thrive abroad, just at the same time as we see international tech startups find an eager appetite in Italy.
“Regarding the outlook of 2023, I see a real positive year ahead,” said Stefano. And we couldn’t agree more!