Italy is experiencing a significant demographic ageing. As of 31 December 2022, the population had dropped to 58,997,201 residents, a decline of 32,932 individuals compared to the previous year. This trend is driven not only by a natural decline but also by the “net migration balance”.
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Istat's demographic forecasts for the future of the Italian population point to a trend of decline and ageing. According to estimates updated to 2021:
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Population at the start of 2021: 59.2 million
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Projected population in 2030: 57.9 million
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Projected population in 2050: 54.2 million
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Projected population in 2070: 47.7 million
These forecasts reflect not only an overall decrease but also a change in the age composition.
The average age of the Italian population, currently 46.4 years (47.8 for women and 44.9 for men), is set to rise. Moreover, the ratio of working-age individuals (15-64 years) to non-working-age individuals (0-14 and 65+) will shift from approximately 3:2 in 2021 to 1:1 in 2050, highlighting a strong ageing trend. This progressive ageing is a phenomenon that requires in-depth analysis, especially because of its repercussions on the economic and entrepreneurial fabric of the country, with direct consequences for the work demanded of M&A operators in Italy.Relationship with Family-Owned SMEs
The ageing of the Italian population is directly reflected in the age of the entrepreneurs running family-owned SMEs, which make up a significant share of the Italian economy. SMEs, and family-owned ones in particular, are the engine of the Italian economy, with a high percentage of them led by older entrepreneurs. The AUB Observatory (AIDAF, UniCredit, Bocconi) has conducted a detailed analysis of the governance structures of Italian family businesses. According to the Observatory's data, family businesses with a turnover above 20 million euros account for 65% of all Italian companies. This percentage actually exceeds 85% if we consider the entire spectrum of Italian SMEs. https://aidaf-ey.unibocconi.eu/it/osservatorio-aub/xiv-edizione-dellosservatorio This situation presents unique challenges, particularly when it comes to generational succession and business continuity.Implications for M&A Advisors
For M&A advisors, this demographic ageing scenario represents a twofold opportunity. On one hand, there is the need to support SMEs through a process of transformation and adjustment to new demographic and market realities. On the other, there is a need to develop dedicated services to facilitate generational succession, essential to ensure business “continuity”.Among the services most likely to be in demand:
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Strategic Assessment and Planning: conducting in-depth analyses to evaluate the company's current situation and plan the transition effectively.
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Generational Succession Advisory: providing specialist support to manage the handover of corporate leadership, ensuring continuity and innovation.
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Business Process Optimisation: helping companies modernise their processes, adopting new technologies and innovative approaches to stay competitive.
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Support in the Search for Investors and Strategic Partners: last, but first in order of importance, it is becoming increasingly essential to support SMEs in the search for investors or partners who can bring capital, expertise and contact networks for sustainable growth. These services will need to undergo transformation towards faster, more efficient acquisition/disposal processes. We believe that, in this area, the use of Artificial Intelligence (AI) will be able to provide hugely important solutions.
