The Italian RRP

Structure, resources and main goals of the Italian RRP

The Italian Recovery and Resilience Plan (RRP) is an ambitious set of measures expected to boost the country’s productive system and economic growth.

Over the last two decades, Italy has experienced a slow decline in its productivity, especially when compared with other European countries. In view of this, Italy decided to request a maximum amount of the resources available from the RRF and, as a result, the Italian RRP is the largest plan across the EU. This vast package of investments and reforms, with a total budget of about €191.5 bn (divided into €68.9 bn in grants and €122.6 bn in loans), is expected to increase economic growth, employment rates and, more importantly, the Italian GDP by approximately three percentage points (3%) by 2026.

It is worth noting that while the sum of €191.5 bn (assigned to Italy by the RRF) is a considerable one, additional resources have also been allocated to the Italian plan from the Next Generation EU. More specifically, Italy was granted €13.5 bn from React-EU and €0.5 bn from the Just Transition Fund. In addition to this, the set of measures outlined in the Italian RRP will be partially financed by the cohesion policies and other European funds of the 2021-2027 MFF. Finally, part of the resources for achieving the goals set in the plan will be allocated from national budget funds.

As far as the structure of the plan is concerned, the Italian RRP revolves around three main areas (also shared at EU level) – digitisation and innovation, ecological transition and social inclusion. More precisely, the measures outlined in the Italian RRP are divided into sixteen components, then grouped into six major missions: (1) digitalisation, innovation, competitiveness, culture and tourism; (2) green revolution and ecological transition; (3) infrastructure for sustainable mobility; (4) education and research; (5) cohesion and inclusion; (6) health. In line with the EU guidelines, the Italian Plan identifies the green and digital transitions as its key objectives. Moreover, a set of ‘horizontal’ priorities are defined in the plan regarding gender equality, younger generations and narrowing the gap between Southern and Northern Italy.

Specifically, for the digital field, it is important to recall the first Mission (M1) entitled “Digitisation, Innovation, Competitiveness and Culture”. M1 intends to support the country’s digital transition through an elaborate set of measures and reforms, especially focusing on the modernisation of three areas – public administrations (Component 1), private enterprises (Component 2), and tourism and culture (Component 3).

However, the reforms and investments related to the digital transition are not only limited to the first mission but can also be found in the RRP’s other five missions. In view of this, to calculate the overall investment in the digital field, I-Com took into consideration not only M1 but the digital tag of each plan mission, reaching a total sum of approximately €51.08 bn (making up 26.67% of the RRP’s overall budget).

Italy and DESI 2021: digital weaknesses and links with the RRP

As previously mentioned, during the last few years Italy has increasingly lagged behind in several areas of the digital field. This can be seen in Italy’s ranking in the 2021 edition of the Digital Economy and Society Index (DESI)[1], where it was placed 20th out of 27 EU Member States for digitalisation (DESI 2021).[2] More specifically, for the different sections, Italy ranks 25th in human capital, 23rd in connectivity, 10th in “Integration of digital technology”, and 18th in “Digital public services”. In response to this critical situation, the Italian plan defines comprehensive guidelines for all four areas assessed by the DESI.

First of all, the RRP allocates a budget of approximately €7 bn to the area of human capital. Through these resources, Italy intends to update its education system, strengthen the existing facilities, boost public employment services and increase the academic offer in digital technologies. As far as connectivity is concerned, the Italian RRP presents five projects, with a total budget of €6.7 bn. These projects are: (a) “Italia a 1 Giga”; (b) “Italia 5G”; (c) “Connected schools”; (d) “Connected health care facilities”; and (e) “Connected smaller islands”. With regards to the integration of digital technology, the NRRP allocates resources to the digitalisation of businesses (€12.8bn), the development and deployment of advanced technologies (€5.1bn) and ICT-related R&D (€1bn). Last but not least, it also outlines a set of important measures in the field of “Digital public services”, such as the creation of a national cloud-based hybrid infrastructure (Polo Strategico Nazionale), a new national cybersecurity agency, and the National Digital Data Platform (Piattaforma Digitale Nazionale Dati).

RRP monitoring and key-performance-indicators (KPIS)

The Recovery and Resilience Facility is closely connected to a performance monitoring framework and some key-performance-indicators (KPIs).

On the one hand, some KPIs appear to be slightly generic compared to those found at the EU level, while others are more detailed, varying from specific references to “ongoing monitoring”, to some even more complex ones more in line with the EU level[3].

Overall, the KPIs used at the EU level appear to be rather specific, compared to those of the Italian plan (or at least to some of them). Nevertheless, achieving the level of detail required by the more complex KPIs at EU level could be a difficult task for smaller companies or local authorities. Therefore, while the KPIs outlined in the Italian plan may be too simplistic, those provided at EU level are perhaps too technically complex in some cases.

A “Work in Progress”: 2021 in a snapshot

Moving on to a first evaluation of how the Italian plan has been implemented so far, we can observe that, in December 2021, Italy had achieved all the 51 objectives of the year and, therefore, secured the first instalment of €24.1 bn (in June 2021, Italy had already received an advance for an equal amount). In 2021, Mission 1 accounted for almost half of the objectives (namely, 25 out of a total of 51) set and achieved in the Italian RRP.  While most of these measures were connected to the entry into force of different types of relevant legislation (e.g., laws enacting Reform 1.1 “ICT purchasing process” and Reform 1.3 “Cloud first and interoperability”), others concerned the special recruitment of experts for the enactment of the RRP.

Potential impact on SMEs and general remarks

Italy’s production system is largely made up of SMEs. Yet, the digitisation of Italian SMEs is still struggling to take off and, despite some encouraging signs which followed the Covid-19 pandemic, SMEs in Italy are still lagging far behind their larger European counterparts.[4]

The Italian RRP provides important opportunities in this regard as the investments envisaged in the plan could provide a positive boost for the basic digitisation of SMEs and their competitiveness. Some measures outlined in the Italian RRP could help in the digital transition of these business. These include the “Transition 4.0″, the support of “Made in Italy” products, the internationalisation of Italian SMEs, and several “indirect” measures such as the innovation of the public administration, or easier access to credit for businesses.

From the above, we can draw some early conclusions and general remarks regarding the Italian RRP. First, it must be noted that, despite the impressive number of measures outlined in the plan, some appear to be quite generic. Other elements that could hinder a swift and successful outcome of the Italian RRP include the excessive fragmentation in the plan’s enforcement, which could cause friction where responsibilities, tasks and the hierarchy of the different offices are involved. Thirdly, despite the ambitious plan set out in the Italian RRP, a huge obstacle to the successful outcome of the latter could be connected to the scarcity of digital skills. This thorny issue, widespread across Italy, could possibly even stall the execution of the RRP altogether. Finally, the same goes for the so-called procedural “bottlenecks” that could delay investments, affect the performance of the reforms and, ultimately, put at risk the success of the entire plan.

[1] See: https://digital-strategy.ec.europa.eu/en/policies/desi

[2] To be noted that due to a change in structure an exact comparison with previous years is not possible. See: https://digital-strategy.ec.europa.eu/en/policies/desi-italy

[3] See: Italian RRP, Mission 1, Component 1, Reform 1.9 – Public Administration Reform.

[4] ISTAT (Istituto Nazionale di Statistica) – Imprese e ICT (Anno 2021), available at: https://www.istat.it/it/files//2022/01/REPORT-ICT-NELLE-IMPRESE_2021.pdf

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