As an American living in Italy, here's my perspective:
Italy is a wonderful place, but not a very well run country. Food, geography, history... it's fractally beautiful in that the big, amazing things are worth seeing, but you can also go to some small town and find something fascinating. It's just bursting with great places. The people are mostly a plus too, I have good friends here, and know a lot of smart hackers. When I moved here from San Francisco a number of years ago, I still had plenty of people to talk tech with. Here in northern Italy, people work fairly hard (and I'm sure there are people in the south who do as well), and don't command high salaries for their efforts. In some parts of Italy, corruption is a big problem, but it's not something I have seen much of on a day-to-day level. Of course I don't work in a field where I would, either.
The down side: bureaucracy is a nightmare, taxes are high, and a lot of people are leaving, because they can get more money elsewhere. It's no longer as cheap to live here as it once was, either. The long and the short of it is: no, I would not really consider opening a business here a good idea, although I would consider opening an R&D center to benefit from high quality workers at relatively cheap prices.
Italy is ranked quite badly here for a reason: http://www.doingbusiness.org/rankings
Italians: it is possible to change, if you work at it. I was able to help accomplish a small change myself, despite not being from here, and not having money or connections: http://www.governo.it/Notizie/Presidenza/dettaglio.asp?d=690... . So, things are not good, but if you're willing to invest some time and effort, they can be improved, a little bit at a time.
Part of the problem, IMO, is the idea that the government should 'guide' things. "Startups are good!" right? So they create a government definition of what an "innovative startup" is, and give those companies some benefits. This means more public employees to look after it, more hoops to jump through, more people trying to make a company that the bureaucrats have incentivized, rather than a company that simply does what it does. Even my own small contribution got watered down in that way: rather than simplifying SRL's (the Italian equivalent of an LLC) for everyone, they created a new category.
That's the wrong approach: what they absolutely need to do is simplify the bureaucracy, and secondly, lower taxes. First and foremost, the number and complexity of them. Paying a lot of taxes is not so bad if it's simple, straightforward, and does not take a lot of time, and you receive something for them. But all the little one-off taxes and the complexity of dealing with others is terrible.
This is all stuff economists and others have been saying for years.
As I mentioned elsewhere: Italy doesn't need to be the best place to do business. It's got lots of good things going for it. It just has to start sucking less.
If you're interested in more of 'my take on things', I write about life in Italy here: http://blog.therealitaly.com/