The Bank of Italy has published the final assessment of Italy's Transition 4.0 Plan, a joint report with the Ministry of Economy and Finance and the Ministry of Enterprises and Made in Italy required under Italy's National Recovery and Resilience Plan. Covering 2020 to 2023 and focusing mainly on tax credits for Industry 4.0 tangible capital goods, the report concludes that the scheme increased firms' investment, especially among smaller businesses, but delivered more limited employment gains and did not produce widespread improvements in firm-level productivity over the observation period. Over 2020 to 2023, firms accrued about EUR 35 billion in tax credits under the plan, of which around EUR 27 billion related to technologically advanced tangible capital goods. More than 157,000 investment claims in those assets generated about EUR 60 billion of investment and nearly EUR 22 billion of tax credits. Small and medium-sized enterprises accounted for more than 60 per cent of claimed credits, manufacturing firms absorbed about 62 per cent of resources, and firms in Northern Italy accrued roughly 70 per cent. The analysis estimates that each euro of tax credit mobilised EUR 1.5 to EUR 2 of tangible investment, with investment rates rising by about 0.4 percentage points for large firms and by 3.5 to 4 percentage points for micro-enterprises. Employment effects were positive mainly for micro, small and some medium-sized firms, lifting employment among beneficiaries by an estimated 0.7 to 3.4 per cent overall. The report finds no evidence of systematic changes in workforce composition, only limited effects on labour productivity and revenue-based total factor productivity, and estimates that 4 to 8 per cent of the fiscal cost was recouped through higher personal income tax revenues, with no statistically significant effect on corporate tax bases over the same horizon.
Bank of Italy 2026-05-14
Bank of Italy publishes final Transition 4.0 assessment showing EUR 35 billion of tax credits boosted investment but not broad productivity gains
The Bank of Italy, together with the Ministry of Economy and Finance and the Ministry of Enterprises and Made in Italy, published its final assessment of Italy’s Transition 4.0 Plan, finding that tax credits for Industry 4.0 tangible capital goods significantly increased firms’ investment, particularly among smaller enterprises, but had limited effects on productivity and modest employment gains. Between 2020 and 2023, firms accrued about EUR 35 billion in tax credits, mainly for technologically advanced tangible assets, with SMEs and manufacturing firms capturing most of the support and each euro of tax credit mobilising an estimated EUR 1.5 to EUR 2 of investment. The report notes positive employment effects mainly for micro, small and some medium-sized firms, no systematic changes in workforce composition, and only partial fiscal cost recovery.