27/05/2008

The growth of the Greek economy and the need to intensify reform policies are set out in the Annual Competitiveness Report 2007, recently presented by the President of the National Council for Competitiveness and Development, (ESAA) Prof. Spyros Makrydakis.

This year?s competitiveness report features two innovations. The first is the incorporation and presentation of all remarkable indicators and reports from international organizations regarding the competitiveness of the Greek economy. The second innovation concerns the attempts made to limit the number of proposals for improving the country?s competitiveness.

According to the report, in 2007, the Greek economy continued to grow at a 4% rate, which is clearly higher than the European average. Beyond this progress, data on the competitiveness of the Greek economy reveal the need to reinforce reform policies as several countries are becoming more profitable by making more rapid changes, compared to Greece. The IMD Yearbook (Institute for Management Development) for 2007 showed that Greece is in 36th position among 55 economies, which reveals a recession in terms of infrastructure and macroeconomic performance, against the increase in the development of entrepreneurial and state effectiveness. Furthermore, the World Bank report lists Greece in 100th position among 178 countries regarding business activity (Doing Business), having fallen by five positions in 2006.

The findings of both the Hellenic Competitiveness Measurement System (hereinafter, ESMA) and foreign reports converge on certain factors: Greek performance in aspects of competitiveness, such as development, general macroeconomic stability, fiscal policy, effectiveness of financial and capital markets, freedom of movement of capital and goods, security, and tourism. General export of services and language acquisition are considered satisfactory.

On the contrary, sectors such as research and innovation, both in the business and public sphere, education, bureaucracy and overall reliability of the public sector, as well as the quality and protection of the environment, demand rapid and integrated reform measures. These are necessary in order to improve the country?s performance in these areas. At the same time, there are substantial problems in the job market where employment rates are still low, while unemployment among sensitive social groups, mainly youth and women, is still twice the average.

With respect to Research and Technology, both ESMA and foreign reports assess Greece negatively in most relevant indicators, both for research input (expenditures, staff, etc) and outputs (patent licenses, publications). Assessments by business executives regarding public research, the cooperation of universities and industry and the protection of intellectual property are also negative.

Low performance but high growth rates are recorded in the use of new technologies and broadband services, while Internet users are still at low levels compared to the EU-27. Expenditures on information technology and communications are lower than the average of the EU-27. Finally, several public services display technological inadequacy with a limited number of electronic transactions between the state and citizens.

In order to solve the problems recorded, the report deems necessary an increase in expenditures for research, combined with the establishment of objectives in research policy, connected to the potential and need for viable development at a regional level and particularly in areas where the promotion of integrated innovation development systems is desirable. Hence, the following measures are proposed:

- Providing special incentives for business activity related to the development and use of advanced technology.
- Reinforcing the adaptation of Greek businesses to the results of research by covering the costs of research staff transfer and work therein (by research centres or businesses in the country abroad).
- Establishing and supporting centres for scientific and technological excellence and dissemination of the results to businesses.
- Supporting small and medium-sized businesses with respect to the exploitation of research outcomes and innovations aimed at their commercial use.
- Assessing the results of policies related to research and innovation in all of the country?s regions.

According to the Minister for Development, Mr. Ch. Folias, the problems in Greek competitiveness cannot easily be isolated in distinct sectors but pervade a broad scope of the economic and social state of the country. Hence, it is necessary, now more than ever, to focus on promotion through coordinated actions and substantial reforms and changes.

Source: The National Council of Competitiveness and Development (ESAA), Ministry for Development