by Marina Hatsopoulos, Founding CEO and primary investor in Z Corporation, entrepreneur, director and angel investor.
Greece’s economic woes—compounded by the immigration situation—continue to be handled as a “crisis,” with no discussion of a long-term path forward. As a Greek-speaking Greek-American entrepreneur who has toured the technology entrepreneurship hubs of Thessaloniki, Patras and Athens, I’ve seen a glimmer of hope for the long-term future of Greece.
In all the debate about Greece, from cries for fiscal responsibility to Socialist rhetoric, we hear no long-term solutions to the underlying problem. Regardless of how Greece handles its debt, it needs to build an economy and create value, not just shuffle money around. The good news: there is an emerging group of young Greeks who understand that innovation is the path to recovery. These globally-focused Greeks, highly educated and without other job prospects, are setting the country on a new course toward technology entrepreneurship.
The Greek economy, shattered in 2008 by the debt crisis and austerity measures, shrank by 25% over six years. The loss of 1 million jobs resulted in unemployment of 28% at its peak and youth unemployment of 58%. Since the crisis began, over 200,000 Greeks have left—many of them young, highly-skilled, and educated. After 17 quarters of decline, in Q1 2014 the economy finally grew, but Greeks remained frustrated by low pay, high taxes, and unemployment. This led Greeks in 2015 to elect the left-wing Syriza party on a platform opposing austerity and promising to rehire thousands in the government, reneg on privatization plans, and raise the minimum wage. Today’s debates center around funding of the pension program. The focus continues to be on wealth redistribution, not wealth creation, and the fact remains that there isn’t enough to go around.
This is why tech entrepreneurship is such an exciting new opportunity for Greece. Greeks are natural entrepreneurs. Of the Greek immigrants in the US labor force, 16% are small-business owners, the highest rate of any immigrant group. There are many young and educated Greeks who are looking to create a new engine of growth with their tech startups.
Luckily, these entrepreneurs are not working in a vacuum. Today, there is evidence of an emerging environment friendly to technology entrepreneurship in Greece. Incubators and accelerators, such as the Egg, the Cube, I4G, Alexander Innovation Zone, and Venture Garden are cropping up left and right. Research centers such as Demokritos, Corallia, and the South-East European Research Centre, have blossomed and legislation has removed barriers to entrepreneurship. Startup competitions such as the MIT Enterprise Forum and the Hellenic Entrepreneurship Award provide a necessary catalyst to a burgeoning community of entrepreneurs, and venture funds such as Openfund, Venturefriends, PJ Tech Catalyst, Quest Holdings, and Odyssey Venture Partners are eager to invest in the promising startups.
Greece’s scrappy culture is similar to that of its successful neighbor, Israel: heavy on talent, tenacity, assertiveness, and critical, independent thinking. Both countries also have a strong global perspective. Israel’s entrepreneurial ecosystem is further along, with 44% university-educated (as opposed to 27% in Greece), and 4% of its GDP spend on R&D (as opposed to 1%). Both countries require military service, but Israel’s political plight provides hands-on technical and leadership experience, creating team players who accept failure. All this has attracted 30x more venture capital per capita to Israel than Europe. About 20 venture funds invest a total of only around €1.2B in Greece, but there is plenty of wealth from shipping and other industries available once success is proven. There are several opportunities Greek entrepreneurs can take advantage of—namely Greece’s competitive advantages in agriculture/food, tourism, IT and logistics. What’s needed now is for the Greek government to open markets, reduce bureaucracy, and provide tax incentives to encourage investment in the burgeoning technology scene.
Greek entrepreneurs aren’t waiting for the government to solve their problems. They’re moving forward. Some of Greece’s challenges—high unemployment, limited access to capital, small local markets—actually enforce the fundamentals of strong start-ups: availability of well-educated talent motivated by equity, a focus on profitability, and early globalization. Startups take years to scale up and impact the economy, so they’re not a fix for Greece’s liquidity crunch, but over the coming years an increase in the number of high-growth startups could sharply reduce unemployment. Already entrepreneurship has become a new aspiration. Now that the underpinnings required for a fertile innovation ecosystem are finally in place, Greece has the opportunity to grow and thrive.
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