Within the context of the European Employment Strategy (ESS) this practice is highly relevant to Employment Guideline 3: Better functioning of the labour markets, with a specific focus on reducing labour market segmentation and improving active labour market measures and labour market mobility.

Unemployment is a long-term and enduring issue in Italy. In 2018, the unemployment rate was at 10.6%, which is considerably higher than the EU-28 average (6.8%). While the rate fell in 2019 (10,0%), it remains higher than the EU-28 average (6.7%).

Vulnerable socio-economic groups such as young people, women and those living in the southern regions, are the most affected ones. For instance, in 2019, the unemployment rate for women was higher (11.1%) than for men by two percentage points (9.1%). Youth unemployment, despite an improvement of educational attainment, is still high. The unemployment rate for young people aged 15-29 is 10.5 p.p. higher than the European average (22.4% and 11.9%respectively). The rate of NEETs (Not in Employment, Education or Training) aged 20-34 was 27.8% in 2019, 11.4 p.p. higher than the EU-28 average (16.4%). The high unemployment rate and the long job search periods forced many individuals to give-up looking for a job and even emigrate abroad.

Additionally, those living in southern regions are three times more likely to be unemployed than those living in the north. In 2018, the unemployment rate in south Italy and in the Islands was respectively at 17.2% and 18.5%  while in North West and North East  was respectively at 6.5% and 5.5%.

Self-employment and entrepreneurship are common in Italy, with a rate of 22%. This means that at least one person out of five in employment is self-employed.

However, according to the GEM report 2017/2018, women and young people are less likely to start a business. Also, only 30% of new entrepreneurs have attended a training course. Barriers to entrepreneurship include access to credit, complexity of running a new business as well as lack of entrepreneurial skills (GEM, 2017/2018).

Usually support and counselling to new entrepreneurs is provided by PES counsellors. The services offered are training and tutoring for the preparation of a business plan and guidance on financial support. Alongside the PES, support at national level is also provided from the Ente Nazionale Microcredito (National Agency for Microcredit) and Invitalia (the Italian Agency for business development). At local level, regions and local authorities as well as chambers of commerce also contribute to guidance and support (Samek, 2019).

Ente Italia Microcredito is in charge of supporting the access of entrepreneurs to credit and provide them with technical support. It also delivers training for micro enterprises carried out by disadvantaged groups, including unemployed. Invitalia manages financial incentives for the creation of new businesses and innovative start-ups. Financial support is provided with micro-loans to approved business plans (Samek, 2019).

Both ‘YES I start Up’ and ‘SELFIEmployment’ aim to promote self-employment and entrepreneurship among NEETs. SELFIEmployment provides financial support to business plans between EUR 5 000 to EUR 50 000 EUR at a zero-interest rate. ‘YES I Start Up’ offers specialised training for the development of a business, which is then used to apply for financial support through SELFIEmployment.

General objective

To support the NEETs to become entrepreneurs or self-employed by providing a loan or a microcredit to NEETs aged 18-29 as part of the Youth Guarantee Programme.

Specific objectives

In the three years of the programming phase, SELFIEmployment aims to achieve the following:

• Receive 8 000 applications for finance from prospective self-employed and entrepreneurs;

• Approve 4 200 NEET applications for a loan/ microcredit;

• Disburse EUR 103 million in funding to help this target group.

'YES I start Up' aims at involving 1 600 NEETs.

• NEETs must present a business plan to apply for a SELFIEmployment loan.
• Business plan assessment by Invitalia based on their sustainability. The assessment consists on a verification of the fulfilment of the requirements and on a ‘merit assessment’. This checks technical and managerial skills of the applicant as well as the economic and financial sustainability of the project ( see Invitalia).
• Territorial offices of Invitalia support applicants during the application process. Applications from NEETs that have already attended training courses on entrepreneurship, like the 'YES I Start Up', receive priority attention. SELFIEmployment supports three different type of loan or microcredit:
  • Microcredit for financial plans between EUR 5 000 to EUR 35 000;
  • Large microcredit for financial plans between EUR 25 000 to EUR 35 000;
  • Loans for financial plans between EUR 35 000 to EUR 50 000.
• The final loan offer is confirmed by Invitalia and may differ from the amount initially applied for. Successful applicants receive their loan during the start-up phase and are required to implement their business plan within 18 months. Invitalia continue to provide support with coaching and counselling following the receipt of the loan. Microcredits/loans are granted at 0% interest and are repayable in 7 years, with monthly repayments beginning six months after the loan is granted.
• ‘YES I Start UP’ training courses support NEETs in the design of a business plan that fulfil the criteria required by SELFIEmployment. Courses combine 60 hours of theory and 20 hours of tutoring for the preparation of the business plan. Training is available across all Italian regions. Trainers are trained by the the Ente Nazionale Microcredito to provide high and consistent quality across Italy.

Since the start of SELFIEmployment (after Invitalia):

• 4 134 business plans have been presented for a total of EUR 137 million in loans requested;

• 1 403 business plans have been financed totalling EUR 45.8 million.

In the first year of application of 'YES I start UP', the measure activated 225 courses for 1 118 NEETs. Of these 170 courses were concluded with around 800 trainees.