After ten years, however, the average US firm has grown to around 75 employees, while the average Italian still has below 15 employees. 8 This static pattern of firm growth hinders both the within-firm and across-firm channels of TFP growth.
Within firms, firms that stay small tend to be less likely to invest in new technologies, in particular ICT investments that are crucial to succeed in the digital economy. This is because, among other things, small firms face relatively higher fixed costs when adopting ICT 9, while they exhibit higher risk aversion and encounter greater difficulties in collecting resources to finance more innovative projects.