AI and Italy: The Last Chance to Escape the Low-Productivity Trap?

There is a widely accepted narrative about artificial intelligence: AI will destroy jobs, increase inequality and concentrate wealth and power in the hands of large technology companies.

That may be part of the story.

But for Italy, the more important economic question may be very different:

What if the real risk is not adopting AI fast enough?

Italy is not starting from a particularly strong position.

The country’s problem is not simply public debt. It is a combination of weak growth, low productivity, demographic ageing and a shortage of skilled workers.

The IMF identifies weak productivity growth as one of the key structural constraints on the Italian economy. The adoption of new technologies, including AI, could become an important source of future productivity growth.

Is Italy adopting AI fast enough?

In 2025, around 16.4% of Italian businesses were using at least one AI technology.

The number is increasing, but it remains below the EU average of around 20%.

The gap becomes even more significant compared with Europe’s leading adopters.

This does not mean that Italy lacks technological excellence.

Italy has world-class industrial companies, manufacturing expertise, universities, technology clusters and highly competitive businesses.

The problem is something more fundamental:

the speed at which technology is converted into productivity.

Italy’s economy is dominated by small and medium-sized businesses.

That makes AI adoption particularly important — and particularly difficult.

AI could be a game changer for Italian SMEs

A large corporation can afford data scientists, cloud infrastructure, consultants and customized AI systems.

A small company usually cannot.

Generative AI is changing that equation.

A small and medium-sized Italian company can now use AI to:

● analyze documents;

● automate administrative tasks;

● improve customer service;

● translate and create content;

● analyze commercial data;

● support sales and marketing;

● assist software development;

● automate repetitive processes.

AI could therefore become one of the first technologies capable of bringing sophisticated analytical and automation capabilities to millions of smaller businesses.

That could be particularly important for Italy.

The real problem is not AI. It is human capital.

Here is the controversial part.

I don’t think Italy’s primary problem is technology.

It is skills.

You can buy software.

You can buy cloud computing.

You can buy AI models.

But you cannot simply buy productivity.

You need people capable of integrating technology into business processes.

That means education, training, digital skills and better management.

The IMF has repeatedly highlighted the importance of productivity and human capital for Italy, particularly as demographic ageing puts increasing pressure on the labor force.

This is where AI meets Italy’s demographic problem

Italy is ageing.

That means the available workforce will become an increasingly important constraint on economic growth.

Normally, this should be a major negative for potential GDP.

But AI introduces another possibility:

producing more with fewer hours of human labor.

That does not necessarily mean eliminating millions of jobs.

It can mean increasing the economic value produced by each worker.

For an economy facing a shrinking working-age population, this could be transformative.

So perhaps the most important question is not:

> *How many jobs will AI destroy?*

It is:

> **How much more GDP can each Italian worker produce with AI?**

That is a completely different question.

Italy’s risk: using AI as just another software tool

This may be the biggest danger.

Companies may use ChatGPT or other AI tools to write emails faster or produce documents.

That’s useful.

But it is not a productivity revolution.

The real transformation happens when AI changes the production process itself.

Not:

“I use AI to do what I already do, only faster.”

But:

“Because of AI, I can organize my business differently.”

That is a much bigger transformation.

Italy does not simply need more public investment

Italy’s national AI strategy correctly identifies SMEs, AI development, industrial research and startups as important priorities.

But public money alone will not be enough.

Italy needs an environment in which private capital can invest.

That means:

less bureaucracy, stronger skills, more capital for startups, better technology transfer from universities to businesses and stronger management capabilities.

The question is not simply how much the government spends on AI.

The real question is how much economic value the private sector can create with it.

The real bet

AI is not a magic solution.

If Italy keeps the same bureaucratic processes, the same skills shortages, the same slow decision-making and the same weak investment incentives, AI will probably deliver less than its potential.

Technology amplifies what it finds.

An efficient organization can become much more efficient.

An inefficient organization can simply become inefficient faster.

The Contrarian Conclusion

The dominant narrative says that AI is primarily a threat to employment.

For Italy, I see a different risk.

The biggest risk may be arriving too late.

A country with weak potential growth, an ageing population and stagnant productivity cannot afford to miss one of the most important technological transformations of the last several decades.

AI will not solve Italy’s debt problem.

It will not stop demographic ageing.

It will not eliminate bureaucracy.

But it could do something more fundamental:

increase the economic value produced by every Italian worker.

If Italy finally manages to turn technology into productivity, AI may become more than a technological revolution.

It could become a macroeconomic revolution.

Roberto Balbino — CEO, Fintech SBB.

Independent Financial & Economic Analysis