The European Commission, the European Parliament and EU leaders have agreed on a recovery plan that will help the European Union repair the economic and social damage caused by the coronavirus health emergency and help lay the foundations for making the economies and societies of European countries more sustainable, resilient and prepared for the challenges and opportunities of the green and digital transition.
As part of this ambitious plan, NextGenerationEU is a €750 billion temporary facility designed to stimulate a sustainable, even, inclusive and equitable recovery to ensure that unforeseen needs can be met. It is the largest economic stimulus package ever funded by the EU.
The programme is structured around three pillars:
· Supporting Member States in investments and reforms
· Boosting the EU economy by stimulating private investment
· Learning from the crisis
Italy's National Recovery and Resilience Plan
The National Recovery and Resilience Plan (PNRR), presented in May 2021, fits into this context. The PNRR is a tool that outlines the objectives, reforms and investments that Italy intends to implement through the use of Next Generation EU funds, to mitigate the economic and social impact of the pandemic and make Italy a fairer, greener and more inclusive country, with a more competitive, dynamic and innovative economy.
The Plan is divided into 6 Missions, which represent the structural 'thematic' areas of intervention.
· Digitalisation, innovation, competitiveness, culture and tourism
· Green revolution and ecological transition
· Infrastructure for sustainable mobility
· Education and Research
· Inclusion and Cohesion
· Health
On 13 July 2021, Italy's PNRR was definitively approved by a Council Implementing Decision, which implemented the European Commission's proposal. A substantial annex is attached to the Decision, which defines precise objectives and targets for each investment and reform, with a timeframe of six months for the allocation of resources. PNRR, Ecofin's green light for the National Recovery and Resilience Plan of the post-pandemic European Next Generation EU, including the Italian one.
NextGeneration EU to relaunch Italian SMEs
The post-Covid relaunch also depends on the ability to seize the opportunities offered by the European plan. To make it a reality, however, a change of pace will be needed, interrupting the inertia caused by the context of uncertainty and assuming a dynamic attitude that embraces new elements such as complexity, interdependence and multidimensionality.
NextGeneration EU is the ideal stimulus for Italian companies. According to a study by Deloitte Private, 90% of companies consider it a fundamental means of supporting post-pandemic development. Strengthening these realities means protecting the excellence of our country, including Made in Italy, where often the fragmentation and small size of the players have led in the long term to problems of competitiveness and capital tension.
The final objective is to adapt one's strategic vision to the new needs of the market, without forgetting one's own specificities and strengths. According to the report, the five principles that must inspire SME leaders on their path to resilience and enable them to thrive despite difficulties are: readiness, adaptability, collaboration, trust and responsibility. These are the tools needed to lift turnover, which contracted by an average of -10.6% in 2020, with gross operating margins plummeting by an average of -22.8%.
Digitalisation: the key to navigating the New Normal
Deloitte's survey shows that Italian companies have achieved a good level of resilience: 31% of organisations in Italy are highly resilient, 59% are medium resilient, and only 10% are low resilient.
The element on which the stability of Italian SMEs is based is technology, both in the short and long term. In particular, the Italian productive system attributes a primary role to digitalisation (68%) in relaunching the economy. The latter has been driven precisely by the pandemic crisis, with a 23% increase in investments in this area. It is very interesting to note that within the next 12 months, more than eight out of ten companies intend to invest in digitalisation and innovation in order to improve their profitability.
The Italian plan contains a wide range of reforms and investments that contribute to solving important social and economic challenges. Particularly expected are measures to increase the sustainability of public finances and the resilience of the health sector, make active labour market policies more effective and improve educational outcomes. It is also hoped that the plan will encourage investment to reduce regional disparities, increase the effectiveness of public administration and the efficiency of the judiciary, improve the business environment and remove barriers to competition.