Pisa University's observatory

The Observatory on innovative SMEs is the first and only initiative in this sector and operates thanks to the collaboration between Grant Thornton professionals and the Economics and Management Department of the University of Pisa.

Mr. Giulio Greco is the Research Director of the Observatory. The aim of the Observatory is to constantly monitor and analyse innovative SMEs, in order to identify their demographic, economic, wealth, organizational and strategic dynamics. The Observatory shares the results of its research through reports, conferences, articles and presentations.

The 2020 report was presented during the award and prize-giving ceremony that were held online on 11 November at 10:30.



The 2020 edition of the Observatory on SMEs shows an increase in the companies registered with the Italian register of innovative SMEs, namely 567 companies registered between October 2019 and September 2020, compared to 432 of the corresponding previous period. However, after five years since the creation of such register, the total number of innovative SMEs is still limited compared to the potential catchment: in fact, 1.700 SMEs have registered since the creation of such register, but there are likely some tens of thousands SMEs in Italy having the requirements to be included in the innovative SMEs register.

The increase in the number of registered SMEs is limited, despite the many legislator interventions on their benefits. Among the latest of such interventions, there are those under Decree dated 7 May 2019, providing incentives for start-ups and innovative SMEs, and those under “Rilancio” Decree in April 2020.

The abovementioned “Rilancio” Decree, in fact, has allocated a provision to support venture capital of 200 million for the benefit of start-ups and innovative SMEs. An amount of 200 million Euro has been allocated, which can be sourced from the resources already granted to the Guarantee Fund for SMEs, specifically dedicated to the issue of guarantees in favour of start-ups and innovative SMEs. Lastly, incentives to capitalization were provided, in the form of relevant IRPEF deductions for investors by up to 50% of the investment amount.

It must be pointed out that some of the incentives to innovation, such as the tax credit for R&D activities, the hyper-amortization for “industry 4.0”, Patent Box, or the so-called “innovation manager” vouchers, are not exclusively for innovative SMEs, but are for the benefit of a wider number of categories.

The Observatory of SMEs shows that most innovative SMEs – approximately two thirds – can be classified as micro-enterprises, in terms of size, with a turnover lower than two million Euro. Less than 10% of innovative SMEs are middle enterprises (turnover between 10 million and 50 million), while the remaining part is included among small enterprises (turnover between 2 and 10 million Euro). To simplify the classification, the only turnover is considered as a parameter.

The average “age” of innovative SMEs 9. Some innovative SMEs could be removed from the innovative SMEs register in the next years, given the stricter recent requirements concerning the permanence of innovative SMEs in the register: in fact, innovative SMEs that have been operating for more than 7 but less than 10 years can remain in the register, if they have not yet sufficiently proven their return-generation potential.

Regardless of their age, innovative SMEs that intend to make an initial investment to finance risk – based on a business plan designed for launching a new product or entering a new geographical market – that is higher than 50% of the average yearly turnover of the last 5 years. Therefore, we could expect some innovative SMEs to be removed from the register in the next years, lacking any investment.

Among other “demographic” elements, we point out that around 60% of innovative SMEs have some patents in their portfolios. As concerns the ownership structure, less than 10% of them have a prevailing presence of women or young people. Lastly, foreign shareholders are almost inexistent.

Economic and financial analyses on those innovative SMEs for which financial statements for 2018 and 2019 were available (1098 companies), including both newly-registered and already registered SMEs, show generally good results in terms of turnover and economic and financial performances.

Innovative SMEs registered an average increase in turnover by 15% between 2018 and 2019. If we only consider those innovative SMEs that have registered an increase in turnover, the average is +30%. Average ROA is equal to 4.78%, while average ROS is 4.89%. This is a significant figure, as it is referred to a sample of 1098 enterprises, i.e. more than half of total registered innovative SMEs.

The average shareholders’ equity is equal to nearly 1.9 million Euro. This average is, however, increased due to middle enterprises data. In fact, shareholders’ equity is lower than one million Euro for half of innovative SMEs and lower than 1.3 million for 85% of them.

As concerns the industries, newly registered SMEs are mainly operating in the IT, electronic, intermediate products, chemical, and pharmaceutical, as well as non-financial services industries. These industries, which represent, in the aggregate, approximately 90% of monitored innovative SMEs, are among those that could suffer the lowest impact of the COVID 19 crisis, according to the Cerved Industry Forecast issued in May 2020.

The results of the Observatory research can be crossed with estimations of the Cerved Industry Forecast, relevant to the impact of the COVID crisis on companies’ turnover. In a soft scenario, the abovementioned industries will suffer a decrease in turnover by 10.41% in 2020 (compared with 2019), followed by an average increase by 10.37% in 2021 (compared with 2020). Therefore, the aggregate decrease in turnover between 2019 and 2021 would be approximately by 1%.

In a hard scenario, the abovementioned industries will suffer an average total decrease in turnover by 14.97% in 2020 (compared with 2019), followed by an average increase by 15.35% in 2021 (compared with 2020). Therefore, the aggregate decrease in turnover comparing 2019 with 2021 would be by less than 2%. This means that innovative SMEs could show a high resilience to the crisis and prove to be ready to seize opportunities.

The impact that the coming into force of the regulation on company crisis and insolvency could have on innovative SMEs must also be verified. The document issued by the National Council of Chartered Accountants and Certified Auditors (CNDCEC) referred to warning indicators of business crisis and drawn up in compliance with the new company crisis regulation, provides that a negative shareholders’ equity and a DSCR (Debt Service Coverage Ratio) lower than one shall be considered as warning indicators and the application of the industry indicators provided for other companies is excluded.

DSCR is meant as perspective capacity of the business to carry on the crucial R&D activity, particularly in consideration of the minimum financial need to carry out such project R&D activity. A lack of revenues and negative economic results, on the contrary, do not have any determining relevance for the identification of a crisis situation.

On the one hand, the document admits the peculiarities of innovative SMEs, but, on the other hand, it points out the responsibility that the supervisory board has to evaluate the actual innovation projection of the company and its impact on the business performance and going concern.

65 among the newly registered innovative SMEs show a negative EBITDA. Without making an analysis of each company’s specific situation, a negative EBITDA generally indicates a critical situation that could lead to a DSCR lower than one and, therefore, to a warning condition. For example, a negative EBITDA could indicate a low turnover and a lower ratio between financial charges and turnover itself. A negative EBITDA could also lead to a drastic increase in leverage and current ratio.

For further information, please contact Federico Feroci – Partner at Bernoni Grant Thornton, Marco Tarasco and Maria Rosaria Spera, or Giulio Greco – Associate Professor at the Economics and Management Department at the University of Pisa.

2020 Observatory Report

2020 Report presentation