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Foundation for Economics and Industrial Research

Entrepreneurship in Greece:
Main trends &
characteristics
Takis Politis
General Director FEIR / IOBE

London School of Economics


London 13/03/2007

The Foundation (IOBE)


A private, non-profit, public-benefit research organisation.
Established in 1975 with a dual objective:
Promote research on current problems and prospects of the Greek
economy and its sectors
Generate reliable information, analysis and action plans not produced
elsewhere and be of high value to policy makers.

Structure
Macroeconomic Analysis and Policy Dpt

Business Trends Unit


Health Economics Unit
European Performance Satisfaction Index (EPSI) Unit
Desk for Entrepreneurship
Desk for the Public State

Microeconomic Analysis and Policy Dpt

Industrial Organization Unit


Data and Statistical Analysis Unit
Observatory of the Automotive Sector
Observatory of Tertiary Education Graduates

Research output

60 monographs since 1975.


Series of publications entitled Economic Issues, covering various economic
issues circulated to policy makers, academic and business community.
A quarterly review entitled The Greek Economy, considered by Greek and
international community, as a reliable source of information for the Greek
economy.
150 Sectoral studies, special reports, competition and strategy studies, ad hoc
studies, special thematic studies
Business & Consumer Survey reports (monthly in Manufacturing, Constructions,
Retail Trade, Services, Consumers) and bi-annual Investment Surveys in
Manufacturing.
European Performance Satisfaction Index (EPSI) surveys covering sectors like
urban transports, mobile telecommunication, super Markets, private cars and
hotels, which are used for policy and rational decision making leading to efforts
for improving competitiveness.
Participation in GEM, monitoring and evaluating entrepreneurship policies and
actions towards the promotion of entrepreneurship, ad hoc thematic studies on
entrepreneurship, etc

Structural characteristics of
employment in Greece
Active Population by labour status (2006)
Greece

Spain

Total active population


(% of population >15
years old)

45.6

49.2

42.5

52.8

50.9

48.4

Employment (% of active
pop.)

91.2

91.5

93.5

92.7

94.7

92.3

8.8

8.5

6.5

7.3

5.3

7.7

Unemployment (% of
active pop.)

Italy

Portugal

UK

EU-15

Structural characteristics of
employment in Greece
Active Population by sex
(2006)
Greece

Spain

Italy

Portugal

UK

EU-15

Total active population


(% of population > 15
years old)

45.6

49.2

42.5

52.8

50.9

48.4

Males (% of active pop.)

59.1

58.1

59.8

53.5

53.6

55,4

Females (% of active
pop.)

40.9

41.9

40.2

46.5

46.4

44,6

Active Population by age group, 2006


Greece

Spain

45.6

49.2

42.5

52.8

50.9

15 -19 y.o. (% of active pop.)

3,3

1,2

2,5

1,4

1,7

20 - 24 y.o. (% of active pop.)

8,3

6,9

9,0

6,6

8,0

25 - 29 y.o. (% of active pop.)

11,3

Total active population


(% of population > 15 years old)

13,9

Italy

14,6

Portugal UK

11,3

12,8

EU-15

48.4
5,6
9,3
10,3
36,7

30 - 44 y.o. (% of active pop.)

40,6

42,6

42,8

46,1

38,9

45 - 64 y.o. (% of active pop.)

35,2

33,6

30,3

33,0

32,6

36,0

1,4

1,8

0,7

1,6

6,0

2,1

>65 y.o. (% of active pop.)

Employment by economic activity


(%)
Greece

Spain

Italy

Portugal

UK

EU-15

98

06

98

06

98

06

98

06

98

06

98

06

Agriculture

17.9

12.0

7.7

4.9

5.8

4.2

13.8

11.9

1.7

1.3

4.7

3.7

Industry

23.2

22.0

30.5

29.5

32.7

29.8

35.1

30.4

26.7

22.0

29.7

26.5

Services

58.9

65.9

61.8

65.6

61.5

66.0

51.1

57.8

71.6

76.7

65.7

69.8

Employment by professional status (%)


Greece

Spain

Italy

Portugal

UK

EU-15

98

06

98

06

98

06

98

06

98

06

98

06

Employees

56.4

63.6

77.2

81.8

71.3

73.4

70.9

75.2

87.3

86.7

83.3

84.1

Employers

7.3

8.2

5.2

5.5

12.4

7.3

6.2

5.5

3.1

3.0

5.6

4.9

Selfemployed

25.0

21.6

14.7

11.1

12.0

17.4

19.7

18.1

9.0

9.8

9.2

9.9

Family
workers

11.3

6.5

2.7

1.4

4.3

1.9

2.3

1.2

0.4

0.3

1.9

1.2

Global Entrepreneurship Monitor


(GEM)
A non-profit academic research consortium aiming at making high
quality international research data on entrepreneurial activity readily
available to as wide an audience as possible
From a comparison of 10 countries (1999) to 42 countries in 2006
Annual executive summary comparing and contrasting levels of
entrepreneurship across the countries analysed.
Collected Data:
Adult population (telephone) survey conducted to minimum 2,000
respondents.
Expert survey: in-depth interviews with at least 18 experts in each country
from finance, policy, government programmes, education and training,
technology transfer, support infrastructure and wider society/culture.
Macroeconomic data (World bank, IMF, Eurostat, UN, OECD)

GEM focuses on three main objectives:


To measure differences in the level of entrepreneurial activity between
countries
To uncover factors determining the levels of entrepreneurial activity
To identify policies that may enhance the level of entrepreneurial activity

IOBE in GEM
The Greek representative partner in GEM from 2003
Conduct empirical research and preliminary analyses on
raw data
Population telephone survey (2000 people)
36 interviews with countrys experts

National Report on Entrepreneurship

Greeces main characteristics


Peculiarities and differences from other countries
Public policy monitoring and implications Suggestions
From 2007: Desk on Entrepreneurship
Pool of data and relevant policies
Other targeted surveys (corporate entrepreneurship, family run
business, etc)

The GEM scope of entrepreneurship

The level of the individual: it refers to any attempt to create a new venture,
self employment included.

It does not measure corporate entrepreneurship, it is not addressed to firms

It gives a prevalent rate: trends and attitudes of the population towards


entrepreneurial activity

Main indices:

Early Stage Entrepreneurial Activity: The sum of nascent entrepreneurs and


new entrepreneurs.
Nascent entrepreneurs: Those individuals (18 - 64 years old), who have
taken some action towards creating new ventures.
New entrepreneurs: Owner-managers of firms who have paid wages for
more than 3 months and less than 42 months
Established Entrepreneurial Activity
Owner-managers of firms who have paid wages for more than 42 months

Main findings (2006): How many?

A 16% of the Greek population 18-64 years old (>1,1 mill. people) were
involved in some kind of entrepreneurial activity (3rd place in Europe)
11.1% in Europe, 10.9% in UK, 14.5% in Ireland

A 8,2% (~600 thuds people) were established entrepreneurs, owners (alone


or with others) of a business venture older than 42 months (2nd in Europe)
5.4% in Europe, 5.4% in UK, 7.8% in Ireland

A 7,9% (~500 thuds people) were early stage entrepreneurs (3th place in
Europe)
6.1% in Europe, 5.77% in UK, 7.35% in Ireland

The larger part are nascents (will be entrepreneurs) and not new
entrepreneurs (ventures 3 42 months old)

Motivated by necessity: 20% of early stage entrepreneurs


(average necessity entrepreneurship in Europe: 18.6%)

F ra n c e
S lo v e n ia
S in g a p o re
R u s s ia
F in la n d
M e x ic o
S o u t h A fric a
D e n m a rk
N e th e rla n d s
UK
T u rk e y
L a t v ia
C an ad a
S p a in
Ire la n d
C z e c h R e p u b lic
G re e c e
C ro a t ia
N o rw a y
C h ile
U SA
A rg e n t in a
In d ia
M a la y s ia
Ic e la n d
B ra z il
A u s t ra lia
U ru g u a y

Low/middle growth
countries

T h a ila n d
C h in a
In d o n e s ia
J a m a ic a
P h ilip p in e s
C o lo m b ia
P e ru

Greece: 4th in
Europe

H u n g a ry

45%

G e rm a n y

40%

It a ly
U . A ra b E m ira t e s

35%

Sw ed en

30%

Jap an

25%

20%

15%

10%

5%

0%
B e lg iu m

Early Stage Entrepreneurship (2006)

P e rc e n ta g e o f a d u lt p p o p u la t io n b e t w e e n 1 8 - 6 4 y e a rs

Sectoral distribution
(2003-2006)
Extractive
sectors

Industrial
sectors

Business
Services

Consumer oriented
ventures

UK

2,9%

21,7%

39,5%

35,9%

GR

1,7%

27%

10,5%

60,7%

Established UK

9,4%

25,9%

27.4%

37.3%

GR

2,1%

31%

5,5%

61,4%

Early stage

Early stage entrepreneurship (2006)

Established entrepreneurship (2006)

Sector distribution

Sector distribution

Consumer oriented

Consumer oriented

Business Services

Business Services

Transforming

Transforming

Extractive

Extractive

10

20

30

Middle income countries

40

50

High income countries

60

10

20

30

Middle income countries

40

50

60

High income countries

70

Demographic characteristics
(2003-2006)
A male, aged 25-44 years old, High School (secondary) graduate
already working either full time or part time.
A 72% of nascent / new entrepreneurs are male
One out of three is 25-34 years old and two out of three are 25-44
year old
Three out of five have participated up to secondary education
~90% are working (full time or part time)
Greece was holding the 2nd lowest place in Europe in female
entrepreneurship (2003-2005)
But in 2006 a 4.7% of female 18-64 y.o. were nascent
entrepreneurs (european average 3.7%)
Still though almost 40% of the female ventures are created out of
necessity (19% in male) and not driven from an effort to exploit an
opportunity

Financing new ventures


Its expensive to start up in Greece
Average initial capital investment: ~83.000
(double than GEM average)

Its also risky in terms of personal funds


Own capital (from savings): 53% of the
investments cost
Half of the rest from close family and only 1/3
from Banks.

Attitudes towards entrepreneurship


High levels of self confidence (knowledge and skills to start
a business): (1st place in Europe)
But at the same time world champions in fear of failure
factor
Entrepreneurship: A desirable career choice (2nd place in
Europe)
High level of status and respect for entrepreneurs
Most people prefer that everyone had a similar standard of
living

Persistent characteristics
Policy implications
1. Perception of start-up - opportunities
negative

Small part of the population responds that in the


next months there will be some good opportunities
for starting a business in the area they live in
(exhaust of the interest rate and macroeconomic
stability boost)

However, an individual perceives more opportunities the


easier their exploitation is expected to be.

Reduce various obstacles in starting a venture in


Greece, adopt simpler processes
Improve doing business in Greece (bureaucracy)

Persistent characteristics
Policy implications
2.

The shallow sectoral pattern of new ventures

Very high percentage of new ventures aim at the final consumer


(physical person), reproducing established entrepreneurship
pattern

The problem of networking.

Encouragement of closer ties between SMEs and larger firms:


start as a supplier
3.

The central role of family in informal investment

Intense role played by the family, large use of own capital

High risk option, hardly a second chance.

New funding mechanisms & schemes: possibility for synergies


between them and family (own) funding, towards a more
rational allocation of resources

Persistent characteristics
Policy implications
4.

The fear of failure factor

World champion: Greece.


Entrepreneurship entails risk taking and experimentation.
Fear of failure discourages capable individuals from following an
entrepreneurial career

Less innovative and risky ventures: safer but also with smaller impact on the
economy: new ventures are less effective in renewing and upgrading the
productive capacity of the Greek economy compared to other countries.

Change bankruptcy law: allow a second chance.


Proper education of potential entrepreneurs
Effective mechanisms that help the entrepreneur after the initiation of
his/her venture is actually lacking in Greece
Social security system: easier transfers between waged labor and
entrepreneurial activity: the entrepreneur feels secure about pension
rights, regardless of changes in career path.

Persistent characteristics
Policy implications
5.

The ambiguous attitude of Greek society towards


entrepreneurship

Starting a business is a socially acceptable and desirable career choice,


but Greeks also detest disparities in income levels.
They wish for an entrepreneurial activity but they do not see good (safe?)
opportunities.
Very confident about their knowledge and skills but world champions in
the fear of failure factor.
Limited media coverage of success stories: entrepreneur as a manipulator
of the market

Actions for familiarization of the Greek society with success business


stories, placing emphasis on the entrepreneurs own standard of
living, but on the creative view of entrepreneurship: he/she creates
something new (business, product, service), which could not be
possible without his/her activity

Thank you for your attention


Contact : Takis Politis,
+30 210 9211253, politis@iobe.gr
URL: www.iobe.gr
GEM: www.gemconsortium.org

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