Demographics are now one of the main structural factors of economic and social transformation at the global level. Against the backdrop of an unprecedented increase in longevity, gradual and ongoing urbanization, the spread of tertiary education, and growing migration flows, Italy systematically finds itself at the extreme ends of these key trends. The country is characterized by a low fertility rate, a rapidly ageing population, a shrinking working-age population, and territorial imbalances. The numbers graduating from university have increased but this is countered by difficulties in integrating training, work, and development, causing a significant mismatch between employment supply and demand.
This outcome is not unexpected. It was easy to predict such a situation, determined at the national level by long-term factors in which personal choices are intertwined with persistently weak economic growth that is affecting the life plans and autonomy of the younger generations. Against this background is a fertility rate at an all-time low, which has set up a process of “dejuvenation” that looks set to produce cumulative effects that will be difficult to reverse, since the prolonged reduction in the birth rate is unlikely to be offset even by larger and better managed migration flows. This is accompanied by the rapid growth of the elderly population, in a country whose people are among the longest-lived in the world, with a marked increase in the dependency ratio and in particular that of over-65s to people of working age.
Together, these factors raise important questions for the economy and for a welfare system built during a period of demographic expansion and sustained economic growth. Without timely and appropriate action, the projections indicate a significant reduction in the overall population and labor force in the coming decades, with negative effects on potential growth, productivity, and the ability to finance the pension and healthcare systems.
The role of business and the production system has therefore assumed strategic importance. Labor shortages make human capital a decisive competitive factor, requiring investment in continuing education and training, upskilling, organizational innovation, and improved working conditions. In short, the quantitative contraction of human capital makes it essential to improve its quality.
In a similar manner, the digital transition and the adoption of artificial intelligence represent a significant challenge. On the one hand they offer the possibility of sustaining and enhancing work, including through an extension of working life, but on the other they require a cultural change in the world of business and training, based on soft skills, adaptability, distributed leadership, and more participatory organizational models. Managing generational and cultural diversity, strengthening talent attraction and retention policies, and developing corporate welfare systems are crucial levers to foster productivity and social cohesion.
However, an economic fabric of small and medium-sized enterprises such as Italy’s, which displays significant strengths but also structural weaknesses, notably in its ability to generate innovation, cannot be left to stand alone in this process. Essential support must come from structured collaboration with the education and training system, which plays a central role in responding to the demographic crisis. Schools and universities are providers not just of advanced skills, but also of social infrastructures with the capacity to foster integration, social mobility, and lifelong learning. Changes of this scope require a strong role for a system that can no longer limit itself to mere “instruction” but must again place the emphasis on “education”.
Strengthening the link between education, research, and business, along with policies aimed at retaining international students and graduates, is essential to counter the loss of human capital. At the same time, the extension of working life and the optimization of the skills of the different generations, through refresher and retraining pathways developed through lifelong learning, can help mitigate the effects of demographic decline.
However, critical issues persist that require timely action. Italy has low female activity rates, a significant share of young people not in education, employment or training (NEETs), and a marked mismatch between the demand and supply of skills and expertise. The extent of tertiary education, while expanding, remains below major international benchmarks and is not always consistent with the needs of a changing production system. The result is a combination of overeducation, shortages of technical and vocational skillsets, difficulty in finding skilled labor, and a dispersion of human capital, also fueled by the emigration of young people and university graduates. In this context, immigration is a structural resource to underpin the employment and production base, but it requires coherent attraction, integration, and optimization policies geared towards stabilizing life pathways and building a sense of belonging, rather than managing flows on an emergency footing.
Demographic trends in Italy also have a strong territorial dimension. Large urban areas, particularly the axis between Milan and Bologna, continue to attract students, workers, and businesses, but such areas often struggle to transform themselves into places where people can put down stable roots, due to high costs, limited accessibility, and life prospects perceived as temporary. At the same time, extensive inland areas and significant portions of the country are experiencing depopulation, a rapidly ageing population, and a contraction of essential services. These trends are accentuating territorial inequalities and undermining social cohesion, raising questions about the sustainability of development models and the organization of public services.
Overall, the demographic challenge should not be interpreted as an exogenous and unchangeable constraint, but rather as a policy area in which immediate interventions, accompanied by consistent and long-term choices and decisions, can affect future outcomes. The ability to offer credible prospects to the new generations, promote intergenerational solidarity, and rethink the social pact is an essential condition for preserving economic competitiveness, sustaining the welfare system, and maintaining the quality of democracy.