International rankings have a high ability to influence investment location choices by acting on investors’ perceptions, but above all on initial screening operations that particularly concern the “business climate” of the countries in which investment is to be made.
Despite some problematic aspects, Italy enjoys a positive perception certified by some international indexes:
- The last report Foreign Direct Investment Confidence Index 2024, produced by the Kearney Agency, ranks Italy 11th out of 25 attractive economies. The index annually measures the impact of economic and regulatory policies and changes on the investment intentions of CEOs and other decision makers of around a thousand global companies.
- The Global Attractiveness Index 2023 (GAI) by The European House Ambrosetti, ranks Italy 17th out of 146 countries, showing a significant improvement and registering the largest change in the country’s ranking since GAI’s inception (in 2017 it occupied 25th position).
- The ‘brand Italy’ ranks 9th in 2023 in terms of economic value and strength of the country-brand according to the Brand Finance study.
In 2022, 243 foreign direct investment projects were announced in Italy, with an increase of 17% over 2021. Italy’s share of total FDI at European level remained constant at 4% (France and Germany hold 21% and 14% respectively). The US, France, the UK and Germany are the largest investors in Italy. 54% of the companies surveyed intend to invest in Italy in the next twelve months and 57% believe that Italy will improve its attractiveness in the next three years. Italy is promoted by investors for its commitment to ESG issues, incentives for technological innovation and human capital training (EY European attractiveness Survey 2023).
Italy’s positioning in the above-mentioned indices is not always consistent with the country’s macroeconomic reality, producing potential negative consequences on the perception of foreign investors. In fact, part of the indices are constructed, not through objective data, but through interviews designed to measure perceptions. Considering that, Italy is one of the most self-critical countries in the world, this penalises it compared to countries whose self-perception is more positive (The European House Ambrosetti).
Moreover, some peculiar elements of our legal system, such as, for example, the mandatory nature of criminal prosecution, indicate a higher number of offences, distorting the image of our country when compared with different legal systems. As part of the consolidation of the national strategy for attracting investment from abroad, a strategy has therefore been implemented to make Italy’s positioning in the various international rankings drawn up by both public and private organisations and bodies more in line with reality. To this end, the Committee to Attract Foreign Investment (CAIE) has created an internal Working Group on International Indexes (for further details see: Governance)