• Governments around the world are responding to economic challenges of COVID-19 and the climate crisis.
  • The EU is committed to a green, digital and resilient financial recovery through its NextGenerationEU programme.
  • To kickstart the economy, the Italian government established ENEA Tech, a foundation to invest in innovative technologies and create jobs.
  • Read the paper "Building Back Broader: Policy Pathways for a Post-Pandemic Transformation" here.

COVID-19 has made us all more aware of how fragile and unbalanced our economic, social and environmental development has been at a local, national, regional and global level. The acceleration of innovation that is allowing us to cope with the pandemic should inspire us to tackle other pressing challenges that we will face throughout the next decade. In particular, climate change – recognized as one of the main threats for human mankind in the 2015 Paris Agreement Paris Agreement – but also the 17 Sustainable Development Goals (SDGs) adopted by the United Nations.

The economic recovery is offering a unique opportunity to combine the need to structurally reorient public and private investments towards climate neutral human development, and to provide a powerful stimulus to recover from the shocks triggered by the COVID-19 pandemic.

Governments around the world are ramping up investments and designing new policies to create the new markets that will drive this economic transformation. In the EU, €750 billion of the NextGenerationEU programme, coupled with the EU Multiannual Financial Framework 2021-2027, are clear examples of recovery instruments designed to cope with short term coronavirus impacts and prepare the ground for a greener, more digital and more resilient Europe.

The EU recovery strategy is also designed to strengthen its science, technology and innovation ecosystem through the Horizon Europe and similar programmes. Specific programmes – such as the recently established European Innovation Council – will also support breakthrough, disruptive innovations with the potential to scale-up that may be still too risky for private investors. The entire EU innovation strategy is following a mission-driven approach to make sure the these programmes shape the markets and can also provide concrete benefits to the European people.

The recovery will be even more crucial for Italy, where COVID-19 impacted a social and economic system that already had long-term structural problems. The Italian economy has been lagging behind peer countries over the past two decades (see the compound annual growth rate of the total productivity factors for the years 2007-2016), with R&D investments far behind the EU average. This has contributed to a stagnation in wages, low employment and lack of opportunities for the youth who have increasingly left the country over the past 10 years.

What is competitiveness?

What is economic competitiveness? The World Economic Forum, which has been measuring countries' competitiveness since 1979, defines it as: “the set of institutions, policies and factors that determine the level of productivity of a country." Other definitions exist, but all generally include the word “productivity".

The Global Competitiveness Report is a tool to help governments, the private sector, and civil society work together to boost productivity and generate prosperity. Comparative analysis between countries allows leaders to gauge areas that need strengthening and build a coordinated response. It also helps identify best practices around the world.

The Global Competitive Index forms the basis of the report. It measures performance according to 114 indicators that influence a nation’s productivity. The latest edition covered 141 economies, accounting for over 98% of the world’s GDP.

Countries’ scores are based primarily on quantitative findings from internationally recognized agencies such as the International Monetary Fund and World Health Organization, with the addition of qualitative assessments from economic and social specialists and senior corporate executives.

Nevertheless, Italy can count on being the world’s 7th largest manufacturing economy, with a vibrant entrepreneurial ecosystem mainly made by dynamic SMEs. Italy performs highly when analyzing scientific productivity, even though it suffers from brain drain in the scientific sectors and has a low capacity to transform scientific knowledge into business activities and new market creation.

Market creation through technology and innovation

In recent years, the Italian government has adopted a more proactive approach to provide patient funding for innovation and technology development, strengthening research and technology transfer. In addition to scientific research centre, the Italian Institute of Technology (IIT) and the National Innovation Fund (established in 2019 with an initial budget of €1 billion), in 2021 the Ministry of Economic Development launched the first national fund dedicated to technology transfer.

A new foundation, ENEA Tech, has been established to manage a €500 million fund for investments in innovative technologies of strategic national interest on a global scale. The mission is to expand Italian industry and strengthen its supply chains through technology transfer, with the ultimate goal to restart growth, provide better opportunities for Italian youth and develop solutions that can benefit the environment and society.

The public sector can build internal dynamic capabilities that can be used to provide patient finance for innovation and technology development.

—Salvo Mizzi, Director of ENEA Tech Foundation.

ENEA Tech aims to be a lean, independent organization led by a young, dynamic and a well-proven experienced team, whose working model is inspired by US agencies, such as DARPA and BARDA. This architecture is quite innovative for Europe and a few examples are now emerging in Germany and the UK. It is an example of how the public sector can build internal dynamic capabilities that can be used to provide patient finance for innovation and technology development, scale-up production and create demand for selected new markets of national interest.

ENEA Tech focuses on strategic technologies that can strengthen the Italian economy and society, falling in one of its four priority investment area: deep tech; green, energy and circular economy; healthcare; ICT. ENEA Tech invests at the pre-commercial and pre-competitive stages – and in micro-enterprises, startups and innovative SMEs, spin-offs and spin-outs – with typical venture capital instruments such as equity, and quasi-equity, blended finance but also grants and purchase contracts, procurement with convertible options.

ENEA Tech has a “double helix” investment scheme. The first approach is a bottom-up process called ESPA (Exploration, Experimentation, Acceleration). It is a multi-phase programme able to support the different phases of the go-to-market journey of a technological innovation. Exploration is the phase when the technology risk is still high, and technical, economic and industrial feasibility has to be proven. In this case, ENEA Tech investments span from €200,000-€500,000.

What do we mean by ‘competitiveness’?

What is economic competitiveness? The World Economic Forum, which has been measuring countries' competitiveness since 1979, defines it as: “the set of institutions, policies and factors that determine the level of productivity of a country." Other definitions exist, but all generally include the word “productivity”.


The Global Competitiveness Report is a tool to help governments, the private sector, and civil society work together to boost productivity and generate prosperity. Comparative analysis between countries allows leaders to gauge areas that need strengthening and build a coordinated response. It also helps identify best practices around the world.

The Global Competitive Index forms the basis of the report. It measures performance according to 114 indicators that influence a nation’s productivity. The latest edition covered 141 economies, accounting for over 98% of the world’s GDP.

Countries’ scores are based primarily on quantitative findings from internationally recognized agencies such as the International Monetary Fund and World Health Organization, with the addition of qualitative assessments from economic and social specialists and senior corporate executives.

The experimentation phase, where ENEA Tech investments can be up to €2.5 million, is the prototyping, demonstration and validation phase. Finally, the acceleration phase consists in speeding up the process of developing the final product/service/system just before the market uptake with investments up to €5 million. In the ESPA model ENEA Tech investment teams and experts are crucial when select the most promising technologies and business projects, as well as assessing which phase of the ESPA model the enterprise is. This is done by a transparent selection process based on a strong interaction with the technical and management team of the proponent. Target firms are SMEs selected from an open call or reported by ENEA Tech network.

The second investment approach is the so-called “tech building” investment model based on an active scouting process. In this case ENEA Tech selects the most strategic technologies, the most appropriate scientific and management talents and works in close collaboration with institutions and key players to nurture the “large Italian enterprises of the future”. In the tech building case, investments can be up to €15 million.

ENEA Tech also aims to foster synergies within the science, technology and innovation ecosystem both at a national (for example with the IIT, the Bruno Kessler Foundation, and other top universities and research and technology organizations) and EU level (including the European Space Agency). Our aim is to become a strategic hub channeling public and private expertise and resources to support the development and growth of competitive enterprises based on cutting-edge and radical technologies that will create the markets of tomorrow.