Key developments in Italy's R&I system in 2015 include:

- Publication by the MIUR of the guidelines for the new research evaluation exercise, which will be performed by the evaluation agency (ANVUR) on the period 2011-2014. ANVUR’s final report is expected by October 2016.

- Modifications to the law on innovative start-ups, which opens the benefits to EU businesses controlling at least one branch in Italy.

- Implementation of the new R&D tax credit scheme. Businesses can benefit from a tax credit of 25% on incremental R&D expenditures; this percentage increases to 50% for extramural research carried out in collaboration with higher education institutions (HEIs) and public research organisations (PROs) or other businesses.

- New legislation on ‘patent boxes’, providing a 30% deduction from the corporation tax base on the incomes from patents, trademarks, licences and software in 2015, 40% in 2016 and 50% in 2017.

- The launch of the new National Operational Programme ‘Research and Competitiveness’ (PONREC) 2014-2020, which will trigger €1.29b, part from the European Regional Development Fund (ERDF) and European Social Fund (ESF) (€930m) and the rest from national co-financing (€360m) to the five Less Developed regions in the south (Basilicata, Calabria, Campania, Puglia and Sicily) and the three Transition regions (Abruzzo, Molise and Sardinia).

The identified challenges for Italy’s R&I system are:

1. unfavourable framework conditions and low level of business R&I activities;

2. public sector funding of R&I;

3. governance and management of the R&I system and policies;

4. territorial inequalities.