Overview

The Italian ICT market was valued at an estimated $35 billion in 2021 and the digital market reached $77 billion at end of 2021. Estimated annual average growth of 2% is expected for the period 2022 to 2023. Digital transformation continues to be a priority for Italian companies and government agencies both at the local and national level. The outlook for 2022 is positive: almost half of the large Italian companies and SMEs will increase their ICT budget, with investments in innovation expected to grow by more than 4%.

Digital transformation continues to drive spending in cloud computing, mobility, social business, big data, and analytics. Investments are also growing in innovation accelerators such as artificial intelligence, virtual and augmented reality (VR/ AR), robotics, the Internet of Things (IoT), and blockchain.

In terms of volume and growth, the cloud for public administration or “national cloud” is a major catalyst for ICT investments. Between 2015 and 2021, the market value of cloud services dramatically grew. Indeed, in 2015 it amounted to roughly $1.4 billion, and, by the end of 2021, it peaked at over $3.9 billion. Infrastructure cloud services (IaaS) and platform cloud services (PaaS) are expected to record higher growth in 2022. Sixty percent of large companies have already implemented at least one IaaS.

Emerging Technologies

Internet of Things (IoT) – Major IoT segments in the Italian market include smart metering, smart asset management, smart home, and smart city. Italian organizations and consumers are playing a key role in this game of connectedness, contributing to the growth of the IoT market, which reached $7.7 billion in 2021 and is expected to increase 20% in 2022. The influence of IoT is evident in other sectors as well, such as agriculture, automotive, and telecommunications. Furthermore, the new 5G connection will allow IoT devices to communicate and share data faster than ever.

Artificial Intelligence (AI) – The value of AI in Italy continues to grow. In 2021, investments in this technology grew 27% and doubled in the last two years, reaching $366 million. Of this amount, $279 million refers to projects commissioned by Italian companies. Six out of ten large companies have at least one AI project, while for SMEs penetration stops at only 6%. Estimates are that 35% of workers will have started working with autonomous robots or autonomous vehicles by 2023. The biggest users of AI technologies are the banking and finance, advanced manufacturing, utilities, and insurance sectors.

Virtual Reality/Augmented Reality (VR/AR) – Between 2018 and 2023, the size of the VR market in Italy is expected to grow from $43 million $124 million. In 2021, Italy’s share of western Europe spending on VR was 15%.  Applications of VR technology to gaming now comprise the greatest share of VR revenue in Italy, and this is expected to continue in the coming years.

Blockchain – The Italian blockchain market is still small but expected to grow at an annual rate of 20% over the next two years (2022–2024). During summer 2022, the Italian Ministry of Economic Development announced plans to provide financial support for projects of interest to the government that utilize innovative technologies, including blockchain. According to the ministry, the incentive program has an initial budget of €45 million and is available to companies and private or public research firms of all sizes. The fund will subsidize expenses and costs from €500,000 up to €2 million. Entities must be working on projects that deploy blockchain, IoT, or AI technology in “strategic priority industries” to apply. These industries include manufacturing, education, agriculture, health, environment, infrastructure, culture and tourism, logistics and mobility, information security, and aerospace.

National Recovery and Resilience Plan (NRRP) and the ICT market

The NRRP designates €40.3 billion for digitalization, innovation, competitiveness, and culture and tourism. For example, investments will be made for the digitalization of the public administration, such as in cloud and big data and in ultra-fast broadband and high-speed connections, such as in the installation of 5G.

Resources

Anitec-Assinform: Italian ICT industry association, member of Confindustria.

Assintel: National trade association of ICT companies.

U.S. Commercial Service Italy:

Elisa Martucci, Commercial Specialist

U.S. Commercial Service, U.S. Embassy Rome

Tel: +39 06 4674 2252

Email: elisa.martucci@trade.gov