The rapid developement of greek entrepreneurship

The rapid development of Greek entrepreneurship Greeks are fond of entrepreneurship and this creates a potential opportunity for foreign businessmen to seek ambitious partners in our country, given the realization of the Governments targets for the strengthening of fiscal consolidation, the preservation of high growth rates, the further deregulation of markets, the further promotion of the privatization and Public-Private Partnership policies, as well as the establishment of Greece as a key country in energy map of our region.

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By Evi Papadosifakis

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T

oday, more than one million individuals are engaged in entrepreneurial activities, and, although entrepreneurship in Greece requires substantial financial resources since half of the new/aspiring businessmen belong to the higher (1/3) income bracket of the Greek population, another one million individuals

are planning to launch business ventures within the next three-years.

This conclusion is drawn from the annual survey of the Foundation for Economic & Industrial Research (IOBE) on Entrepreneurship in Greece (2006-2007).

The survey records a substantial increase in first

The enhancement of entrepreneurial activity in Greece is accompanied by a substantial increase in the percentage of people that resorted to business activity because of the lack of alternatives for satisfactory employment.

determined by two factors: First, the existence of an efficient state that ensures developmental resource management and facilitates the economy's functioning and, second, the creative initiative of both individuals and businesses, which is the main growth driver. This belief determines our research agenda: State and entrepreneurship.

And we do our best to contribute to the effort of solving the great problems that occur in the two most crucial areas of economic life".

The chairman of the Entrepreneurship Club, Mr. A. Belles, referred to the Club's initiatives and especially the "adoption" of entrepreneurial ideas: "By means of which we will detect and support worthy proposals, which are still at the formation stage, in order to help them materialize and gain their own momentum in the context of the economy.

"In 2008", said Mr. Belles, "the Entrepreneurship Club calls for ideas from the field of green entrepreneurship, mainly expecting response from young people, and placing its mechanism to the

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stage entrepreneurship, but also the deterioration of its qualitative features. The enhancement of entrepreneurial activity in Greece is accompanied by a substantial increase in the percentage of people that resorted to business activity because of the lack of alternatives for satisfactory employment.

The survey on Greek Entrepreneurship for the period 2006-2007 is the fourth periodical publication of IOBE as a partner of the Global Entrepreneurship Monitor (GEM).

Along with the aforementioned Survey, the Entrepreneurship Observatory of IOBE presented two additional studies. The first addresses the specific problem of female entrepreneurship in Greece, and the second analyzes the Operational Programme Entrepreneurship-Competitiveness (OPEC) and makes specific proposals that could improve its efficiency in promoting entrepreneurship.

As stated by the Chairman of the Board of IOBE, Mr. Michael Cortessis, during a recent event for the presentation of the data: "The country's economic development and social progress are

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disposal of all interested parties, with enthusiasm and optimism regarding the pursued result".

The Chairman of the Hellenic Federation of Enterprises (SEV), Mr. D. Daskalopoulos, underlined the need to reform our educational system, which, as he said: "Apart from the professional qualification it provides, it is instrumental in the formation of values and mentalities. We need more innately entrepreneurial and innovative people with ambitions, leadership abilities, and cooperation skills, unafraid to set ambitious goals and assume the responsibility of achieving them. This is the only way for moving faster ahead, and approaching the objectives of growth and social well-being".

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The main findings of the survey

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1.1 million people, i.e. almost 16% of Greece's population, are engaged in some kind of entrepreneurial activity.

The GEM survey on the Greek population of working age (18-64 years) for the year 2006 reveals the following: • 1.1 million people, i.e. almost 16% of Greece's population, are engaged in some kind of entrepreneurial activity. Out of this number, 600 thousand people were Established Entrepreneurs, in other words they participated in the ownership of a business venture, while almost 540 thousand people were at the initial stages of launching some kind of venture. • 965 thousand people (14.2% of the total population) declare their intention to start some venture during the next three years. • 180 thousand people (2.7% of the population) ceased their business activity. • More than 20% of business ventures undertaken in 2006 resulted from necessity. In other words, they were undertaken by persons who resorted to entrepreneurship because of the lack of any alternative employment opportunities. • Entrepreneurship is related to older ages. The average age of new-potential businessmen has risen to 38 years (36.5 years in 2005). • 54% of entrepreneurs are only High-School graduates (Greece in ranked first in terms of secondary education graduate participation). • Finally, half of the new/potential entrepreneurs continue to originate from the higher (1/3) income bracket of the Greek population, a fact that reveals that business requires substantial financial resources.

Female entrepreneurship The most important finding from the IOBE survey is that the participation of women in business activity is less than the participation of men. The data for the year 2006 corroborate the conclusion that entrepreneurship is mainly a male activity,

not only in Greece but all over the world.

In Greece, total start-up entrepreneurship is unevenly (70%-30%) allocated between men and women, and this fact ranks Greece amongst the worst performers in Europe. In 2006, 4.7% of Greek women had started up some kind of business venture, a fact that ranks Greece at the middle of the international list.

Two out of five women (against one out of five men) state that their entrepreneurial activity is the outcome of necessity. Greek is placed at the lowest positions of international rankings for both sexes.

The most important conclusion reached by the IOBE is that, although the participation of Greek women in start-up entrepreneurial activity is substantially lower than that of men, this deficit is mainly related to the role of women in start-up ventures, and is radically reduced in the case of ventures that have already taken off. In fact, the deficit is almost eliminated in the case of "estab-

lished" entrepreneurship ÂŻ i.e. ventures that have survived for more than 3.5 years. According to this data, the participation of Greek women in total business activity is the highest among European countries.

Nevertheless, this positive outlook coexists with a series of evidence that indicate the existence of an "interfamily" allocation of roles. In other words, while venture start-up is fundamentally a male activity, responsibility for its continuation is transferred to a great extent to the women of the family.

Moreover, the positive outlook of Greek female entrepreneurship ÂŻ as compared to male entrepreneurship ÂŻ is also present in a series of qualitative features recorded by the GEM survey.

Some examples are product innovation, competition intensity, and the use of new technologies and the level of education. According to all these qualitative criteria, it seems that the business activity of Greek women is superior, or at least not inferior, to that of Greek men.

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The Operational Programme Competitiveness-Entrepreneurship (OPCE) will be the main instrument for the implementation of structural policies during the period 2007-2012.

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ENTREPRENEURSHIP POLICIES The role of OPCE The Operational Programme CompetitivenessEntrepreneurship (OPCE) will be the main instrument for the implementation of structural policies during the period 2007-2012. To this end, IOBE decided that the new OPCE should be thoroughly analyzed and that any potential improvement in its effectiveness should be pointed out.

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Priority Axis 1. Creation and Utilization of Innovation with the support of Research and Development. The IOBE proposes: • The planning of specific actions designed to encourage networking, both on the regional, and international, levels. • The necessity to forge closer links with tertiary education, both on the research, and teaching, level. • A general effort to familiarize young people studying in Universities and Polytechnics with the reality of the business and entrepreneurial world.

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Priority Axis 2. Promotion of Entrepreneurship and Extroversion. The IOBE proposes: • More targeted actions for groups of people that shift away from agriculture. • The promotion of networking between smaller

and larger enterprises.

Priority Axis 3. Improvement of the business environment. IOBE proposes: • It is necessary to create a network that will simplify, accelerate, and reduce the cost of, procedures required for starting up a venture. • It is necessary to encourage the creation of financing instruments based on, and promoting, synergies between financing from family resources and financing from independent micro-financing institutions.

• It is necessary to encourage venture start-ups through the acquisition of existing businesses.

As pointed out by the Minister of Development, Mr. Ch. Folias, at the event held by the IOBE and the Entrepreneurship Club for the presentation of the Annual Survey on Greek Entrepreneurship, the Government's reform policy pursued of the past three and a half years has had tangible results, and communicated the basic axes that will be promoted by the Government during its second term.

Among others, Mr. Folias said that this Annual Survey on Greek Entrepreneurship shows an increase in the percentage of the population which was (during the previous year) in the

preparation or start-up stage of some kind of venture, and this means the reversion of the decrease in the number of new entrepreneurs that had been recorded in the three-years from 2003 to 2005.

According to Mr. Folias, the Government's priorities during its second term of office are the following: • Enhancement of fiscal consolidation through the achievement of balanced or slightly surplus budgets by 2010, as well as the reduction of the deficits of both Public Enterprises and Entities (DEKOs), and social security funds.

• The crackdown on smuggling and tax evasion.

• The achievement of sustained high growth rates, the reduction of unemployment, the growth of employment.

• Further market deregulation, enhancement of the economy's extroversion, improvement of exports, and promotion of Greece's presence in foreign markets.

• Privatization and Public-Private Partnership policies.

• The establishment of Greece as a key country in the energy map of our region. Greece is established as a financial and business hub in SE Europe and the Eastern Mediterranean.

• The Operational Programme Competitiveness-

The government seeks to establish an institutional and financial environment that will promote Greek male and female entrepreneurship.

Entrepreneurship (OPCE) 2007-2013 is the main instrument of the structural policies that will be pursued in the context of the ESPA (National Strategic Reference Framework).

The EPAE sets three strategic objectives: the acceleration of transition to a knowledgebased economy; the development of sound, sustainable and extrovert entrepreneurship; and the safeguarding of the physical, institutional and organizational prerequisites for its promotion.

• The government seeks to establish an institutional and financial environment that will promote Greek male and female entrepreneurship. Women's participation in business activity has increased for a second year in a row, and our country is moving, for the first time, away from countries with low female entrepreneurship, and, in fact, outperforms the European norm.

• Entrepreneurship is supported by measures such as the new development law, the reduced tax rates, the simplification of the system for the formation of business startups, the reduction of red tape, the establishment of a modern institutional framework, as well as new and upgraded industrial estates.

The materialization of the National Plan for SMEs provides for 49+1 support measures, as well as financing, subsidized employment for the unemployed, and the utilization of new technologies, while SMEs and service companies will be financed, for the first time, from community resources.

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The Minister stressed that the Government's reform policy led to: • The reduction of the budget deficit from 8% of GDP in 2004 to less than 3% in 2006.

• Following the completion of the first phase of the Tax Reform, the tax burden was reduced from 35% to 25% for corporations and limited liability companies, and from 25% to 20% for general and limited partnerships, that affected hundreds of thousands of small and medium sized Greek enterprises.

• The Investment Incentives Law creates more than 21,000 new direct jobs. Investment projects of almost €8.8 billion have been approved.

• Moreover, Public-Private Partnership projects with a total worth of €3.1 billion have already been approved and are being prepared for the creation of high priority infrastructure in the regions.

• Greek exports gained new momentum, since they rose by 34.4% in the three-year period 2004-2006. Foreign investment has started again to flow into the country.

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