Greece: Land of Economic Tragedy or Entrepreneurial Opportunity?
January 30, 2014 14 Comments
Would an ancient Greek playwright like Euripides have ever considered Greece’s current economic malaise a source of inspiration for a modern day Greek tragedy? Probably not. …and yet, an audience for this unwritten, modern-day Greek tragedy has surged as members of the Troika continue to relentlessly pressure Greek politicians to address their overdue financial public obligations now teetering above 170% of GDP.
One can just imagine the utter frustration that Greece’s Government VP and Foreign Minister, Evangelos Venizelos, must feel every time he updates ECB officials of Greece’s economic progress or lack thereof. At a recent ECB review meeting, Venizelos, a burly looking character, bellowed a strong opinion in the nearly empty chambers of onlookers. He told anyone who would listen that to view Greece as the “central problem” of the European and global economy was “false, dangerous, and unfair”. When I read his quote in a local paper, it sounded like the perfect opening line for a riveting and engaging modern-day Greek tragedy, whose first scene might begin as follows:
A Modern-Day Greek Tragedy
As the sun sets over the Athenian skyline, scene one begins. A spotlight, as though originating from the night sky, shines brightly upon the Acropolis. The stage is the city of Athens, while the audience is a virtual network of headline news readers who watch with great anticipation for clues on how this extraordinary Greek tragedy will unravel.
The first scene begins with a narrator’s soliloquy on Greece’s current financial woes. In a monotone voice, he tells the audience that Greece is in debt up to its eyeballs. The country of 10 million inhabitants owes over 317.31 billion euros plus interest to European bankers and other investors, …which translates to a shared debt of over 31,731 euros per Greek citizen. With unemployment at 27.8% and almost twice as high among its youth (58%), the Greek population has a slim chance of ever paying back its creditors. Increased austerity measures have helped reduce the need for more debt but have done little to address the amount the country owes overall. The severe cut backs have made Greek everyday life exceedingly difficult by spreading public misery, triggering social unrest, encouraging talent drain, and fostering capital flight.
In a baffled voice, the narrator turns to the audience and asks the following questions:
If austerity has truly brought the Greek people to a dead end, what can Greece’s leadership do today to help secure a better future? How can their government policymakers attract foreign direct investments, create local employment opportunities for its citizens, and eventually reignite a new and sustainable Greek economy? Are we doomed or is there hope among us?
Suddenly, the silence is broken. From the audience, a group representing the future of Greece, speaks out loud. Their message is direct. Their recommendations spot on and their intentions, genuine. They are none other than representatives of Greece’s young professionals.
A Dynamic Facilitated Discussion
Unwittingly scripted into this next scene, I arrived in Athens for a last-minute business trip earlier this year. Prior to my departure, I had asked various groups of Greek young professionals through LinkedIn and other sources to meet with me for an informal discussion. For nearly two hours, we chatted candidly about the future of their Greece.
They were an eclectic bunch, fifteen in all. They covered a wide range of backgrounds including post graduates, young entrepreneurs, teachers, and professionals working in the private sector. Many had spent time outside of Greece either studying or working internationally. For them, Athens was their home, and they had a vested interest in her future. I agreed to write an op-ed expressing their views so their collective recommendations could be read globally.
I began our facilitated discussion with a hypothetical question that went as follows:
If this Group was offered access to a 100 million euro fund to spend in any way they chose for the betterment of Greece, what would they do first and why?
The Group offered three suggestions, which together revealed some fundamental issues that go far deeper than the well-documented mistrust between Greeks and their government. First, funds should go toward changing Greece’s educational system and specifically toward the placement of more non-Greek teachers. Group members felt that the practice of recruiting teachers from the same student body had potentially fostered a myopic view among Greek academics. Bad teachers who have little fear of losing their jobs are rarely challenged by outside peers nor formally evaluated by their students for their comments and suggestions. With a strong bias towards ‘teaching to the test’, teachers have become unchallenged, while students have lost their genuine desire to learn for the sake of gaining new knowledge. To make matters worse, students are never certain if and when they will graduate as teacher and student strikes are common.
Exposed early on to disinterested teachers and unpredictable graduation dates, Greek students have developed an inherent dislike to academia. Their disdain for their educational system has resulted in a long-standing rift between industry and academia, one which has severely lessened the government’s support and industry interest in the development of Greek-based R&D initiatives.
From an early age, children are taught to aspire to public sector jobs. These jobs form part of a government promise that offers lifetime, financial security for its citizens. Aiming for a different career path is considered out of the main stream. Under these preconceived notions, entrepreneurship ranks low as a worthy career among Greek family members. They view young would-be entrepreneurs as fools rather than business pioneers. In fact the literal translation in Greek for entrepreneurship is ‘business man trying to do something’. …they just don’t know what that might be!
Not surprising, the second suggestion for the allocation of the hypothetical 100 million euros was to boost the poor image of entrepreneurs within Greek society. At first I thought the Group’s suggestion would also include financing for an entrepreneurial eco-system which might include a startup incubator and an innovation center. Instead it focused entirely on addressing the severely marred image of entrepreneurs within Greek society. Intrigued, I verified this stigma with other young Greeks I met during my trip and found that indeed it was true. They also felt like ‘social outcasts’ who preferred not to share their dreams with their respective friends and families.
Where American entrepreneurs relish the rebellious freedom associated with entrepreneurship, Greeks do not. Greeks rank social acceptance of their entrepreneurial dreams as a top priority. Not addressing this social concern first could significantly lessen the long-term effects of any experimental entrepreneurial program. Certainly much more can be read into this social angst, and I encourage readers to delve further into this discussion among their friends and colleagues to explore innovative approaches that will turn the tide of traditional thinking.
The third suggestion for the fund was expressed as an off-handed comment but nevertheless unveiled some valuable truths. To the Group funds should be spent to create a new and independent political party, one that would be open to delivering new government promises for financial security that were not associated with a position in the public sector.
A New Normal
Undoubtedly the Troika’s demands have forced layoffs and salary cutbacks within the Greek government that have jolted the fundamental foundations upon which Greek life has been based for decades. Today, a new normal is evolving between traditional Greek family expectations for job security and government promises. Neither has experience navigating through these troubled waters and as a result blame the other for Greece’s severely weakened economy. Workers strike frequently, making matters worse, while lawmakers struggle to acquiesce to the demands of their key industry groups. Last year alone, the government published over 240 legislative reforms, which created havoc among business owners and investors who remain on the sidelines awaiting greater economic and political visibility from their government.
The Group’s Recommendations
Hanging Merkel in effigy may help release some anger among the Greek population but as the Group pointed out, there are better ways to deal with the current crisis; however, first things first. Steps to favorably reassess the role of the entrepreneur in Greek society will very likely spark a cottage service industry of business coaches, entrepreneurial therapists, web designers, mentors, and more. Their growing presence will encourage other young adults to consider entrepreneurial pursuits, while simultaneously, reverse the current ‘social outcast’ stigma associated with entrepreneurship. If supported by favorable policies and legislation, Greeks living abroad may see this initiative as their calling card to return to Greece. Their expertise, networks, and enthusiasm should further unleash the many innovative capabilities currently bottled up within the Greek population.
The Group felt Greece could one day become a low-cost solution for big data and data analytics services globally. Just as India captured the call center and IT sectors, Greece’s mathematical prowess, recognized throughout history and the world, could drive both the low end side of the business where big databases require meticulous ‘cleaning’ as well as the high-end side of the business where sophisticated algorithms for machine- to-machine communications among devices or robots are required.
Institutes for Excellence
The Group suggested the development of an independently operated Institution for Excellence or IE whose purpose would be to teach and mentor students on the educational tools and skills needed to launch a big data and data analytics eco-system, specifically a human capital engagement research center. The Institute would reside within an existing university but operate independently. Their campus presence should reignite a new sense of purpose at academic institutions, one that industry could value and be willing to support financially. The Institute would have to be fully insulated from political influence and be governed through an independent board whose members represent its constituents equitably. The IE’s footprint should be designated a tax-free zone to help students finance their startups. Startups that reach a specific threshold in sales would be spun off into the Greek economy under a gradual legislative assimilation process.
Funding for an Institute for Excellence could come from three sources. First, from Greek diaspora who may be willing to return to Greece and actively participate in a teaching/mentorship program. Second, from a modified tax amnesty program similar to one implemented in the UK where tax avoiders can come clean with their overdue tax bill by investing in qualified startups. To help Greeks make the transition to entrepreneurship, however, this tax amnesty program could be further simplified by issuing shares from a fund whose charter includes the establishment of multiple Institutes of Excellence throughout Greece and, potentially, other countries.
A third funding source would come from international private equity funds whose involvement could lead to future investments in the IEs startup companies and relevant initial public offerings or IPOs at both local and global stock exchanges.
Existing organizations such as MIT’s Venture Mentor Service ( http://vms.mit.edu/) can be tapped for guidance, know-how, and strategy. As is often the case with entrepreneurship, the initial phases for proof of concept are the most difficult, however, there is little doubt in my mind that the 15 Greek young professionals who worked through these ideas with me in less than two hours can lead this charge. If given the chance, they and their peers could offer Venizelos with another set of talking points that will change the Troika’s next discussion from one of exasperation to one of opportunity fueled by sustainable economic growth.
© 2014 Tom Kadala