I have friends who did a startup in Rome which went after government grants and contracts for software. I got to watch as they battled nepotism, insularity, incompetence, and extraordinarily sclerotic, glacial movement on part of the government and its affiliates and contractors, both as customers and as providers of standard societal services. Taxation is unbelievably high and bureaucratic for those (like my friends) who were straight shooters and wanted to pay taxes, unlike nearly all their competition, who dodged them.

My favorite story was when they were trying to get internet service in Trastevere. They were required to start paying the phone company (TI) as if they had internet service, and then wait. For three months. Then after they called TI wondering where the service was, they were told TI had sent someone out to install the service but he couldn't find their office. TI didn't bother to call them. So they were then required to go to the back of the queue and wait for another three months, all the while paying, followed by another excuse. This went on for the better part of a year. Meanwhile they ran the whole company off of cellular data plans.

And they're still there, and why? Because Trastevere is one of the most wonderful places in the world. It's worth it to them. But it's not surprising they're in the minority: Italy has a very, very serious brain drain problem.