Multinational enterprises - Year 2023

In 2023 foreign-controlled enterprises in Italy accounted for 0.4% of resident firms, employed 9.8% of workers, generated 21.0% of turnover, and 17.5% of value added in Industry and Services. Their role is significant in foreign trade of goods and in private intra-mural R&D expenditure.

42.2% of the turnover generated abroad by Italian multinationals is directed to markets other than the host country of the Italian subsidiary. High shares of exports to Italy are confirmed in traditional Made in Italy sectors.

In Industry, access to new markets is the main motivation for making new investments abroad for three out of four Italian multinational groups. Other motivations include: improving quality and developing new products (one out of four) and gaining access to new knowledge or specialized technical expertise (one out of five).

Foreign multinationals: Industry decreases, Services increase

Originating from 106 countries, foreign multinationals were active in Italy in 2023 with 18,825 subsidiaries (+2.1% compared to 2022). They employed over 1.8 million people (+4.2%), generated €887 billion in turnover (-2.3%), produced more than €188 billion in value added (+8.3%), and supported over €6 billion in intra-muros R&D expenditure (+6.8%).

Foreign subsidiaries operate mainly in Services (71.7%), but their presence remains significant in Industry (28.3%). The turnover of foreign multinationals in Industry sector for 41.3% of total foreign-controlled turnover, down from 46.7% in 2022.

In 2023, the contribution of foreign multinationals to the main national economic aggregates remained stable compared to 2022: 9.8% of persons employed (+0.1 percentage points compared to 2022), 21.0% of turnover (+0.0 p.p.), and 17.5% of value added (+0.1 p.p.). Their contribution to in-house R&D expenditure increased to 38.3% (+0.7 p.p.).

Le multinazionali italiane confermano la presenza all’estero in 171 Paesi con 25.273 controllate
(-0,9% rispetto al 2022) che occupano oltre 1,7 milioni di addetti (-2,6%) con un fatturato di 560 miliardi (+1,3%). In particolare, per le imprese dell’Industria e dei Servizi non finanziari il fatturato al netto degli acquisti in beni e Servizi registra una crescita del 14,9% rispetto al 2022.

Italian multinationals maintained their presence abroad in 171 countries with 25,273 subsidiaries (-0.9% compared to 2022), employing over 1.7 million people (-2.6%) and generating €560 billion in turnover (+1.3%). In particular, for companies in Industry and non-financial Services, turnover net of purchases of goods and services recorded a 14.9% increase compared to 2022.

Indeed, Italian-controlled industrial enterprises operating abroad employ 914,000 people (53.3% of the total workforce employed abroad by Italian multinationals) and generate €285 billion in turnover (50.9% of Italian multinationals’ foreign turnover). Compared to 2022, the most dynamic sectors are the manufacture of basic pharmaceutical products and pharmaceutical preparations (+11.0% in turnover and +32.3% in employment), the manufacture of other transport equipment (+4.5% and +23.6%), and professional, scientific and technical activities (+10.9% and +11.7%).

Foreign multinationals have a major role in goods trade

The average size of enterprises belonging to multinational groups is high both for foreign subsidiaries in Italy (97.5 persons employed) and for Italian subsidiaries abroad (67.9 persons employed), compared to other resident enterprises in Italy (3.6 persons employed). Even taking into account structural differences in average enterprise size, productivity—measured as value added per employee—is, on average, higher for enterprises belonging to foreign multinational groups (€102.6 thousand) than for the remaining resident enterprises in Italy (€63.8 thousand).

In 2023, exports of goods generated by foreign multinational groups operating in Italy exceeded €203 billion, recording a modest increase (+1.6%) compared to 2022, while imports, at over €228 billion, showed a decline of 9.8%. These enterprises contribute significantly to Italy’s trade flows, accounting for 35.8% of national goods exports (+0.7 percentage points compared to 2022) and 49.7% of imports (+0.2 p.p.). The manufacturing sectors most affected by the presence of foreign multinationals in trade flows are the same for both exports and imports: mining and quarrying (67.9% of exports and 58.6% of imports), manufacture of basic pharmaceutical products and pharmaceutical preparations (61.4% and 71.2%), and manufacture of motor vehicles, trailers and semi-trailers (60.9% and 67.9%)

Intra-group trade flows account for 49.5% of exports and 64.7% of imports of foreign multinationals. Within intra-group exports, the highest shares are in the manufacture of motor vehicles, trailers and semi-trailers (73.8%), in the manufacture of wearing apparel and leather products (72.9%), and in the manufacture of computers, electronic and optical products, electromedical equipment, measuring instruments and watches (69%). In intra-group imports, significant values are found in the wood and cork industry (excluding furniture) and in the manufacture of straw articles and plaiting materials (78.7%), as well as in the manufacture of computers, electronic and optical products, electromedical equipment, measuring instruments and watches (66.1%).

Foreign affiliates of Italian multinationals export 42.2% of their turnover to markets other than the host country of the enterprise itself. In some sectors, however, this share is much higher: manufacture of leather and related products (91.4%), textiles and wearing apparel (78.2%), and manufacture of furniture and other manufacturing industries (72.5%).

Significant shares of exports to Italy are confirmed in the turnover of Italian subsidiaries abroad in traditional Made in Italy sectors: 51.1% for textiles and wearing apparel, 49.5% for leather and related products, and 31.9% for furniture and other industries (Figure 1). Conversely, the share of turnover destined for the foreign country where production takes place is particularly high in the manufacture of other non-metallic mineral products (75.6%), in the wood industry, printing and reproduction (70.1%), and in the manufacture of electrical equipment and non-electrical household appliances (70.1%).