Innovation: “In With the New” Without “Out With the Old”

This past January, the New York Times ran an article highlighting the struggle of a Greek entrepreneur to get a Greek beer onto the Greek market, and to convince the government to repeal an outdated law preventing his brewery from producing mountain tea – or anything other than beer. Timely article. Currently there is a heightened focus on the need to reform laws and regulations that impact (read: hinder) business, entrepreneurship and innovation in Greece. According to the World Bank Group’s Doing Business 2010 report, the country’s business regulation environment placed it in a ranking of 109 out of 183 economies on the ease of doing business.

To address these challenges, the current administration is passing new legislation and courting large international investors, particularly in the Greek diaspora communities, and turning to its own new and potential entrepreneurs. In a speech at the 75th Thessaloniki International Fair in September, Prime Minister George Papandreou announced that: “Over the forthcoming months we will create an Investments Council with top investors and businessmen from abroad and with Managing Directors from the best companies in the world, especially of course from the Greek Diaspora so that they can contribute to drawing up a new investment effort and give us their credibility when talking to the investment community.” More recently, at a Regional Development and Competitiveness Ministry event, the Prime Minister reiterated the administration’s focus on encouraging and facilitating innovation and business.

In addition to going after large international investors, the Greek government is looking to its young entrepreneurs. As Kostas Mallios pointed out in his presentation at the TEDxAcademy in Athens last year, young people are an excellent source of innovation and creativity. Many of our most recognized inventors – Albert Einstein, Marie Curie, Bill Gates – were in their 20s when they made their big discoveries or creations.  In January, the Greek parliament passed a new investment law that includes incentives for young entrepreneurs (see a discussion, in Greek, of the new law on the Generation 700 euros blog here).  On October 20, 2010, the Regional Development and Competitiveness Ministry organized a gathering of about 100 young entrepreneurs. Much of the news coverage missed the significance of this event, covering mainly the comments of Prime Minister and Minister Michalis Chryssohoidis. What I found more interesting was that through this process, the prime minister invited comments and suggestions from participants, and responded to their input. Key feedback included the need for less bureaucracy and more regulatory and financial support for entrepreneurs and startups, recognition of the importance of failure, and facilitation of relationships between universities and entrepreneurship. Search “#younginnovGR” on YouTube to see videos of participant comments.

As part of this initiative, the government, in collaboration with young entrepreneurs, launched StartUpGreece, an online networking and collaboration platform where members (currently 2,163) can meet and exchange ideas. The site also hosts information on starting a venture or obtaining government funding. Further, the new investment law, passed in January 2011 and launched April 13, includes incentives for young entrepreneurs. In March, the Regional Development and Competitiveness Ministry announced the New Innovative Entrepreneurship, a program to offer incentives, including financial support, for innovative new enterprises or products.

While innovation may open up new job opportunities and attract foreign investment, the country’s population faces a range of hardships, such as layoffs, loss of small businesses, decreasing social welfare services, increasing taxes and fees for services no longer provided by the government. Any approach to economic development must also address how to ensure the impact reaches the broader population, from the middle and lower classes to marginalized communities. The administration must work with the private sector and citizens to address declining industries, in addition to creating new jobs. Given the specific context of Greece, investment professional and economic sociologist Aristos Doxiadis emphasizes that economic development in Greece should include a focus on the small scale economy, including small and household- or family- owned businesses and the informal rules and institutions which many of these observe.

Most importantly, the government and private sector in Greece will have to focus on developing a national strategy. As Steve Blank argues in a discussion on Startup America, a White House Initiative announced in February 2011, “an entrepreneurship initiative needs to be an integral part of both a coherent economic policy and a national innovation policy,” and must recognize and support different types of entrepreneurship. While the economic crisis is weighing on policy leaders in Greece right now and many pressing reforms need to be made, this is a desperately needed opportunity to develop a new, strategic and inclusive approach to helping both new and existing industries or businesses grow. Just as importantly, as the Greek diaspora community joins the discussion and mobilizes to support the efforts of Greek entrepreneurs or to invest in Greece, it should also consider how its efforts contribute to or impact a national growth and innovation strategy.


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