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04/11/2005 “Entrepreneurship in Greece”

Speech by the Special Secretary for Competitiveness, Mr Spiros Efstathopoulos at the Meeting held by the Foundation for Economic and Industrial Research and the Enterprise Association on “Entrepreneurship in Greece”

Friday, 4 November 2005

I would first of all like to convey to you the warm greetings of the Minister for Development, Mr Dimitris Sioufas, who is in Italy signing a transnational agreement on the natural gas pipeline. His interest in supporting entrepreneurial activity in Greece is well-known to all of us.

Thank you for inviting me to take part in this evening’s event. I congratulate you on your initiative in holding it. It is always a pleasure, but also a challenge, to discuss entrepreneurship. Particularly when the discussion is based on an internationally recognised study and the panel of speakers is made up of distinguished representatives from the world of business.

We at the Ministry of Development have made the support of entrepreneurship fundamental to our policy. But what does that mean? Not just increasing the number of businesses in this country. From the point of view of total entrepreneurship, it appears from the study that Greece is at a relatively good level.

The question is not how many new businesses are created. It is how many of them are competitive, sustainable and dynamic. How many are “opportunity-pulled ventures” – to use GEM’s terminology – and not just “necessity-pushed ventures”. It is especially positive that in 2004, the former increased, while the latter decreased.

Supporting entrepreneurship means placing emphasis on quality. We have a vision of how we want our businesses to be, and that is the direction that we are pushing for them to go in. We are encouraging high-potential entrepreneurship that contributes to employment, exports, and the country’s economic growth. We are supporting the innovativeness of established businesses, which allows them to cope with the high demands of international competition. And that is where we are lagging behind, as a country and as an economy.

Because it is clear from the study that entrepreneurship in Greece is not at the level that we would want. This is due to inflexibility and to past mistakes, but also to our very nature. Our strong individuality, our adherence to traditional products and models of production and our suspicion of change impede our ability to adapt to new conditions.

For example, in an age in which the importance of cooperation and the networking of businesses is constantly being stressed at a national and international level, in the Action on Trade that we recently announced we received only two proposals from businesses working together.

Similarly, at a time when all over the world business venture capital is a major source of financing for new activities, in Greece, most of the required capital continues to come from aspiring entrepreneurs and their families.

It is very important that we all adopt a positive attitude to change. To understand that effective reforms create the proper climate for growth and increased employment.

We recognise the role and responsibility of the public sector. Just as we also recognise our shortcomings. We are working systematically to create a fertile environment for growth, which attracts investment from both Greek and foreign entrepreneurs. This is also a primary objective under the Lisbon Strategy.

We are creating policies to:

  • deregulate markets,
  • improve legislation,
  • reduce bureaucracy
  • do away with corruption, and
  • improve support structures for businesses and their financing mechanisms.

We are placing emphasis on simplifying the law and reducing the administrative burden for businesses, and we are preparing a systematic assessment of the impact on competitiveness of every new law.

The legislative initiatives of the Ministry of Development in the areas of business licences and market operation are well-known. And others will follow. I shall focus in particular on one point: according to the study that you are presenting today, among the 34 countries participating in GEM, Greece comes first in terms of fear of failure, with more than 52%. The stigma of failure shadows Greek entrepreneurs and restricts them. That is precisely why we are proceeding with the Ministry of Justice to a reform of the laws on bankruptcy.

We have stated in no uncertain terms that we support healthy entrepreneurial activity. We have removed the notion of guilt from profit. We view it as absolutely legitimate, because it is the driving force of entrepreneurial activity, the reward for people who take a risk, work and invest, both materially and intellectually. And who contribute to society as a whole, creating jobs and national wealth.

Business is an integral part of society, directly linked with its future and its prosperity. This is something of which we must all become aware. We aim to create the “culture of entrepreneurship” that is a basic condition for Greece’s economic growth. For this purpose we are preparing to establish an Academy of Entrepreneurship.

However, it is also very important for businesses themselves to understand their role. To think outside their narrow confines. To envisage their place in the new international environment and to claim it. To map out long-term strategies, predicting and anticipating developments and not simply reacting to them. The globalised economy does not mean that when others are doing well, we are doing badly. The internationalisation of markets is an opportunity to increase the size of the entire cake, so that we can all take a piece.

It is important to support the efforts of our businesses to reach out beyond Greece’s borders. There must be a shared conviction that the faster they turn to foreign markets, the greater will be their efficiency, growth and benefits in the future.

Competition today is much tougher than it was in the past. It demands constant alertness, continuous monitoring and adaptation to new, constantly changing conditions. Conditions concerning both the needs of consumers and methods of producing, promoting and distributing products and services. On the other hand, they offer significant opportunities. The question therefore is: since businesses in other countries can exploit them, why can’t ours?

The time has come to liberate the potential of our businesses. The knowledge and skills of the Greek people with regard to entrepreneurial activity is known and recognised worldwide. Let’s exploit it. Greece can and must be a hub of entrepreneurial activity in Southeast Europe. Developed neighbouring countries, countries which are on the road towards accession to the European Union, Balkan and Mediterranean countries, the countries of Central Asia and Africa, are important markets in which Greek businesses can play a leading role.

What is necessary is a change of mindset, a change of objectives, priorities and the way in which businesses operate. The recipe for success is simple: businesses must provide what customers want, when they want it, at the level of quality and price that they need it.

There is one objective: quality. Quality everywhere. That is the only guarantee of progress and prosperity.

Innovation must constantly be highlighted at every level of entrepreneurial activity. Innovation is the combination of inventiveness and intuition, which leads to the creation of social and economic value. Especially as regards Greece, where – as the Report shows – most entrepreneurship is directed towards activities close to final consumers, innovation is even more important as a means of continually responding to their needs.

Our country is a small player in the international economic firmament. Our competitiveness cannot be based on cost of production. We must rewrite the rules of the game, to aim for the advantage of innovation, to focus on specific areas with strong potential for growth. That is what Ireland did, and it achieved the miracle. Some of the industries that offer this potential are shipping, new forms of tourism, branded agricultural products, cultural services, soft energy, and selected schools for post-graduate study.

But also from an organisational point of view, the modernisation of businesses, the exploitation of new technologies, and cooperation with research and technology bodies are essential. It is disappointing that our country lags behind in basic operations that increase the competitiveness of businesses, such as Research and Development.

Mainly, though, it is important to make the most of human resources, with continuous training and improvement of skills. Because the most important source of wealth-production today is human beings, human capital. And herein lies the role of management executives. They must be leaders, who dare, inspire, have vision, challenge received wisdom, and plan and implement change.

Ladies and gentlemen,

Entrepreneurship in Greece has great prospects, and there is visible evidence of this:

  • In the Grant Thornton International 2005 growth index, which covers 24 countries, the proportion of rapidly developing Greek businesses grew from 13% in 2004 to 15% in 2005, placing this country in ninth place internationally.
  • At the same time, exports increased 8.6% in the first half of 2005 over the same period in 2004.

The GEM Report indicates the situation that exists today. We in the ministry place particular emphasis on monitoring international indexes, recognising their importance for attracting foreign investment. I would like to use this opportunity to draw the attention of all those replying to questionnaires from international organisations to the accuracy and objectivity required when filling them in. Because subjective replies can significantly affect the position of our country in the international ranking. For example, in the Corporate Entrepreneurship Index, an improvement of our score by 1.6% would mean a rise of one place in the international ranking.

As you know, 2005 has been declared Competitiveness Year in Greece, following the initiative of the Ministry of Development and the decision of the Prime Minister and the Government. We want 2005 to be a year of recovery for the Greek economy and a year of improved quality of life for all citizens.

We believe that supporting healthy entrepreneurship is a basic means of achieving this objective. And I assure you that we are determined to encourage it in every way possible, so that we can lead the country along the path of progress and development.

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