the push from local industries to large conglomerates to global multinationals was sustained by a strong economy and easy access to large banking institution that could finance their operations at reasonable risk for themselves.
the small local banks in Italy could never sustain such a growth, and production remained local, with few notable exception.
sure politicking, corruption and mafia had a part in it, as they will reduce competitiveness of a company compared to others having none of such issues (i.e. the state deciding where to build factories based on unemployment and not efficiency) but a large enough company can absorb that in the bottom line and continue operating.
Medium companies are, however, completely suffocated from this.
the Italian startup stagnation is more confounding, but my personal belief is that it's likely a result of the absurd taxation the middle class gets. It's basically impossible to build up any saving to start entrepreneurship around here, as everything in welfare comes from the middle class. And existing entrepreneurs have little incentive in branching off to new unexplored areas. Without the fuel and ferment from solo founders making it, there's no culture and no substrate to fall into if a business fails. Everyone is just grabbing at their own chair, hoping not to be knocked into poverty by the next round of financial crises.