Bridging the Finance Gap for Women Entrepreneurs

20. Italy: Policy insights on financing innovative women entrepreneurs

Associate Professor Michela Mari
Tor Vergata University of Rome

Professor Sara Poggesi
Tor Vergata University of Rome

Professor Paola Paniccia
Tor Vergata University of Rome

Dr. Silvia Baiocco
Tor Vergata University of Rome

Background

Innovation, as a pivotal driver of economic growth, is closely intertwined with entrepreneurship and the advancement of innovative firms. In Italy, women-led innovative start-ups comprise about 13% of all government-certified innovative start-ups in 2022, numbering approximately 1 900 out of 14 300 (MIMIT, 2023[1]). This represents an increase of 46% since 2018. However, the overall number of women entrepreneurs working in innovation-related fields remains limited, negatively impacting the number and visibility of women acting as mentors and role models for younger women.

The paucity of Italian innovative women-led start-ups can be ascribed to various factors. A first significant issue is related to education and, in particular, to the lower number of Italian women graduating in science, technology, engineering and mathematics (STEM) fields compared to men – 28 706 women relative to 45 102 men – a disparity that has persisted over the last decade (Italian National Agency for the Evaluation of Universities and Research Institutes, 2023[2]).

A second major obstacle lies in the relationship between women entrepreneurs and the financial system (OECD, 2021[3]). This relationship typically plays a pivotal role in shaping entrepreneurial intentions as well as entrepreneurial outcomes. In the case of Italy, according to the IV Report on Female Entrepreneurship, 46% of women entrepreneurs mention personal or family funds as their primary sources of financing, only 20% declaring that they rely heavily on financing from credit institutions (Unioncamere-SiCamera, 2020[4]). Women entrepreneurs are more likely to avoid seeking funding from financial institutions, primarily due to an expectation of rejection. Additionally, among those who have requested credit, a higher percentage of women entrepreneurs report that the credit provided was inadequate or the request was denied (8% of young women entrepreneurs relative to 4% of young men entrepreneurs). Also, women entrepreneurs report more frequently than men entrepreneurs being asked for third-party guarantees for credit approval (54% of young women entrepreneurs relative to 39% of young men entrepreneurs) (Unioncamere-SiCamera, 2020[4]).

In addition, the functioning of the venture capital system with respect to women entrepreneurs cannot be overlooked. As declared by the Governor of the Bank of Italy on 31st May 2024, “In Italy, venture capital activity is under-developed, with an annual investment flow of between EUR 0.5 billion and EUR 1.5 billion in the period 2021-23, which is five times lower than in Germany and France. National operators are also few and small in size.” Additionally, there is a notable lack of women among partners in venture capital firms and a limited number of investment funds directed or managed by women in Europe (Atomico, 2023[5]). These data are important to consider when analysing the issue of financing of innovative women-led firms, as the likelihood that a venture capital firm will invest in women-led businesses is three times higher when it has at least a woman among its partners (European Investment Bank, 2022[6]).

Addressing these challenges and barriers is therefore crucial for creating a more inclusive and supportive entrepreneurial environment in Italy, where women entrepreneurs can thrive and contribute fully to innovation and economic growth (Mari and Poggesi, 2024[7]).

Policy issue: Financing female-led innovative start-ups

Due to the contribution innovative start-ups can make to the socio-economic growth of the country and the challenges women face, the Italian government has identified several support mechanisms to support both women- and men-led innovative firms at the national level. These include financial instruments directed to supporting the founding and growth of innovative start-ups, financial instruments aimed at supporting access to credit and access to capital, support mechanisms for the internationalisation process, and regulatory sandboxes (MIMIT, 2023[1]).

These include the Smart and Start Italy initiative which is the main financing programme dedicated to innovative start-ups with a budget of EUR 200 million. It supports the creation and growth of innovative start-ups, financing projects ranging from EUR 100 000 to 1.5 million and start-ups not older than 60 months. This instrument offers interest-free loans covering up to 80% of the total investment. The loan coverage rate rises to 90% for start-ups composed exclusively of women or young people under the age of 35 or by at least one Italian PhD who is working abroad and intends to return to Italy. It also offers a non-repayable grant amounting to 30% of the loan only for start-ups based in specific regions (e.g. Abruzzo, Basilicata, Calabria, Campania, Molise, Puglia, Sardegna e Sicilia). Start-ups established for less than one year can use the technical and management support services in the start-up phase. To support innovative women entrepreneurs, the programme has specifically reserved EUR 100 million from the National Recovery and Resilience Plan (PNRR) for women-led start-ups. However, an Interministerial Decree on October 3, 2023, redirected EUR 90 million (out of the EUR 100 million allocated) from the Smart and Start Italy measure to the Women’s Enterprise Fund, which now has EUR 250 million in PNRR funding. This decision was based on the analysis of the applications received from women for the Smart and Start Italy measure.

Alongside these national initiatives, the numerous activities taking place at the regional level cannot be overlooked, including those led by PNICube – the National Network of Universities, Academic Incubators, and Regional Business Plan Competitions – with the National Prize for Innovation as its flagship initiative. This Prize represents the final stage of the Business Plan Competitions organized at the regional level. Promoted by the Conference of Italian University Rectors (CRUI), PNICube was established in 2004 with the mission of entrepreneurial valorisation of scientific research. Promoted by the Conference of Italian University Rectors (CRUI), PNICube was established in 2004 with the mission of the entrepreneurial valorisation of scientific research. It currently includes most Italian public universities (81%) and involves 18 out 20 Italian regions through regional business plan competitions known as Start Cups. Between 2016 and 2022, the total prize money awarded to the best innovative research-based start-up projects amounted to over EUR 10 million, including EUR 3.5 million in cash and approximately EUR 7 million in services. It is noteworthy that the percentage of women participating in the PNI increased from 22% in 2016 to 30% in 2022. Moreover, according to the Scientific Observatory of PNICube (Rapporto PNICube, 2024[8]), from 2020 to 2022, nearly 20% of innovative start-ups resulting from PNI projects were led by women, a percentage higher than the national average. This demonstrates that these initiatives can significantly stimulate women towards innovative entrepreneurial paths. These results are also due to dedicated outreach targeted at women entrepreneurs, including special awards granted in collaboration with institutions and organisations committed to promoting women’s entrepreneurship and innovation, such as the Italian Department for Equal Opportunities (Paniccia, Baiocco and Scafarto, 2025[9]).

In 2023, PNICube signed a partnership with Invitalia, the National Agency for Inward Investment and Economic Development, which is owned by the Italian Ministry of Economy. This collaboration aims to enhance the processes of technology transfer and the utilisation of the Italian research system’s outcomes. It also seeks to promote opportunities provided by incentives designed to foster the emergence and growth of innovative firms, particularly start-ups led by women. To support this goal, in-kind and monetary awards have been established for the best innovative start-up projects led by women. Specifically, monetary awards are part of the “Female Entrepreneurship” programme, managed by Invitalia on behalf of the Ministry of Enterprise and Made in Italy, which aims to spread entrepreneurial culture among women and increase their presence in the business world. These awards are financed through PNRR resources (Mission 5.C1 Investment 1.2: “Women's Enterprise Creation”).

Conclusions

Strengthening public investment explicitly oriented towards women-led innovative start-ups will help more of these businesses succeed. In addition, innovative start-ups need more supportive tech ecosystems, particularly for women tech entrepreneurs, including the right economic, social, legal, and cultural conditions. Potential areas for action include fostering public-private partnerships to spread entrepreneurial culture among women, encouraging investors’ meet-ups, pitch events, and mentorship programmes specifically targeted for women-led start-ups, encouraging increased presence of women on venture capital funds and angel networks and building mentorship programmes, networking opportunities, and access to business resources tailored to the needs of women entrepreneurs.

References

[5] Atomico (2023), State of European Tech, https://www.investeurope.eu/media/7424/atomico-state-of-european-tech-report-2023.pdf (accessed on 27 September 2024).

[6] European Investment Bank (2022), Women entrepreneurs are our best opportunity, https://www.eib.org/en/stories/investment-in-women-entrepreneurs (accessed on 27 September 2024).

[2] Italian National Agency for the Evaluation of Universities and Research Institutes (2023), I Focus del Rapporto Anvur 2023, Analisi di Genere, https://www.anvur.it/wp-content/uploads/2024/01/Focus-equilibrio-di-genere-2023.pdf (accessed on 27 September 2024).

[7] Mari, M. and S. Poggesi (2024), Current Trends in Female Entrepreneurship: Innovation and Immigration, Emerald Group Publishing.

[1] MIMIT (2023), Relazione Annuale al Parlamento sullo stato di attuazione delle policy in favore delle start-up e PMI innovative, https://www.mimit.gov.it/images/stories/documenti/20240119_-_Relazione_annuale_DEF.pdf (accessed on 27 September 2024).

[3] OECD (2021), Entrepreneurship Policies through a Gender Lens, OECD Studies on SMEs and Entrepreneurship, OECD Publishing, Paris, https://doi.org/10.1787/71c8f9c9-en.

[9] Paniccia, P., S. Baiocco and F. Scafarto (2025), “A co-evolutionary knowledge exchange network for the entrepreneurial valorization of academic research: evidence from Italy”, The Journal of Technology Transfer, https://doi.org/10.1007/s10961-025-10190-1.

[8] Rapporto PNICube (2024), Valorizzare la conoscenza con la società: sinergie tra ricerca e impresa per l’innovazione sostenibile, Osservatorio PNICube, Roma, https://www.pnicube.it/_files/ugd/5437f5_ef173befa5fa428fb69492b5235f626d.pdf (accessed on 7 October 2025).

[4] Unioncamere-SiCamera (2020), IV Rapporto Imprenditoria Femminile, https://www.unioncamere.gov.it/sites/default/files/articoli/2022-04/IV_Rapporto%20IF_slides.pdf (accessed on 27 September 2024).