In order to create cash-generating businesses during a serious economic downturn, Greece is turning to the entrepreneurs and the young.
By Andy Dabilis for Southeast European Times in Athens -- 23/03/13
Prime Minster Antonis Samaras said that Greece will embrace new businesses despite its economic turmoil. [AFP]
In response to Greece Prime Minister Antonis Samaras' pledge that the country will not rely purely on international bailouts and austerity, the government is offering state support for young innovators by funding a series of business proposals in information technology, electronic media, cell phone applications and agriculture.
"This discussion signals the embracing of new Greek businesses," Samaras said, adding that while the government is cutting back, it would find funding to support young entrepreneurs.
Samaras said an unused building in central Athens would be transformed into a hub for start-ups, with the state supplying the infrastructure and supporting mechanisms for business' operation. Samaras directed three ministers to begin work to help upcoming young entrepreneurs.
Help is coming from the private sector too. The olive oil company Gaea, in a project called Reinspire Greece, said it would put up prizes for 10 promising business plans for agriculture. It offered 25,000 euros in capital, a 25,000-euro loan and links to its 27-country distribution network.
Aris Kefalogiannis, Gaea CEO, told SETimes that, "The Greek architectural sector needs a change of mindset, and that it will not come from the existing generation of farmers. Many young people with new ideas are suffering in big cities because of huge unemployment, and if we can entice them to go back to their places of origin, there can be new ways of production."
The project is tied to the sale of the company's products with a goal of 19,000 bottles, including the US and other countries. Kefalogiannis said that entrepreneurs are needed in the sector which has failed to promote Greek olive oil, much of which is sold to Italian companies and rebranded.
With unemployment at 26.4 percent – and topping 67 percent for people younger than 25, forcing many to leave the country – Greece is looking for young entrepreneurs in a number of fields to help the debt-laden economy.
Elias Spirtounias, executive director of the American-Hellenic Chamber of Commerce, which puts up a 100,000 euros annual award for innovators, said the young are a fertile and overlooked field. His institution offers them help with business plans and guidance from professional executives.
"They are excited when they have an idea, but when it comes to implementation they need help. When they have an idea, they think it's worth billions, but sometimes they land very fast. You have to direct young people looking for funding," he told SETimes.
Starting a business in Greece is not easy, as laws and tradition make it tough on the young, as veteran workers often push them aside, bottling up new ideas in a society so far reluctant to embrace innovation.
Platon Tinios, economics professor at the University of Piraeus, said there are obstacles. "Banks have to start lending and venture capital has to take off," he told SETimes.
"What prevents people from taking risks is the strange way of bankruptcy in Greece … if you start something and fail you are prevented from trying again for years," under tight laws, he added.
Despite the crisis that has seen more than 68,000 businesses close since austerity measures were imposed in 2010, 67 percent of new businesses since were service-based, and most were opened by young entrepreneurs with start-up capital from their own savings, according to a conference organised by the British Graduates Society in Athens in June 2012.
Nearly 60 percent opened a business with less than 30,000 euros invested, and most said they took the chance not because of the crisis, but because they wanted to be their own boss or believed they had a winning idea.
"There is an absolute need [for entrepreneurs] because unemployment is so high for young people and they see no chance of getting a job in the state administration, and the private sector is suffering. Not all these businesses will succeed, but the mind-set must change," Spirtounias said.
Andreas Stephanides, who set up the Hellenic Association of Young Entrepreneurs that, he said, has nearly 3,000 members across Greece, said the government has overlooked the potential.
"New ideas come from new minds … most job creations come from start-up businesses," he told SETimes.
"We have good technology and can invest in scientists, researchers, and new products to develop, but they have no money for the markets …. Young people are trying to find money abroad, in Germany, the UK and Silicon Valley," he added.
He said his group met with Samaras and several ministers last August and pushed for the kind of support that is finally beginning to develop, because there has been reluctance from the government and potential backers.
"No one wants to invest in an idea until they have the first customer," he said.