by Andreas Akaras*

It is hard to imagine a day in Athens without the likes of a waiter, a taxi driver, or a senior citizen, sounding off on social, economic, and political affairs. At first blush, one could be forgiven for believing that the answers to all our troubles exist in the chatter of the Athenian sidewalk. Yet, put your ear a little closer to the ground, and those rejoinders give way to a daunting question that asks, why shouldn’t progress for my country be reality?

By many measures, Greece is a developed and successful country with good metrics for health and happiness. Fundamentally, however, Greece is less developed, less competitive, and less wealthy than many of its peers. For comparison, Ireland a nation of 5 million has a GDP of $400 billion, and Israel a nation of 9 million has a GDP of $395 billion, while Greece a nation of 10.7 million has a GDP of $200 billion.

What Ireland, Israel, and nearly all economically advanced countries understand, is that their own people are the most important resource factor for economic development. While Greece has grown beyond the point of a low wage work force economy, it continues to rely on many low-to-medium value-added industries. By embracing the power of its people, Greece can develop high value-added industries that promote realeconomic growth and gainful employment.

The Greek economy experiences high friction from the absence of transparent business practices, a weak legal framework, underdeveloped physical infrastructure, and suboptimal education levels in relation to advanced peer competitors. Concomitantly, the high friction is aggravated by low levels of technological expertise, lackluster entrepreneurial activity, inadequate digital infrastructure, innovation aversion, limited skilled labor, and insufficient access to capital. The resultant drag on economic growth diminishes the quality of life the average citizen may enjoy.

Greece may enter the ranks of the world’s leading economies if its people and government commit to the hard work of developing a technologically advanced society. There are three categories around which a development strategy may emerge:

(1) the government’s strategic role,

(2) build-up of human capital, and

(3) investment and development of infrastructure.

In pursuing its strategic role, the initial steps that will pay immediate dividends for the economy is the government’s modernization of the judiciary, modernization of the education system, and the improvement of corporate oversight and business transparency. The government must also undertake a radical rethinking of infrastructure to include custom transport solutions and advanced infostructure.

Infrastructure investment in the 3,000 island Aegean archipelago has the potential to fundamentally alter the Greek economic landscape because of its unique mix of economic and security considerations. Importantly, more job opportunities on the Aegean islands means a sustained and potentially growing population that is available to support Greece’s sovereign interests.

The government may adapt models used by other countries that have developed knowledge based economies. One such model relies on the creation of a high-level Economic Development Board (EDB) to coordinate all the relevant ministries and stakeholders.

Thus, to expand Greece’s limited research and development capacities, an EBD may engage the national university system to deepen the level of technological research in the country. There are many highly established technology clusters and translational centers in the USA, Canada, Europe, Australia, and Asia, with which Greek academic institutions can cooperate. The EBD may also coordinate the commercialization of these research and development activities which is crucial to establishing a high technology industry.

For example, cooperation between Israel and the United States through the Binational Industrial Research and Development Foundation gave tremendous impetus to Israel’s tech industry. Today, Israel may be a small country, but it is a technology giant.

The government must support a culture of innovation and technology application throughout Greek firms such as to further enable businesses in Greece to be linked up with others throughout Europe, North America, and beyond.

It is insufficient, however, if the focus of innovation and development is limited to creating a class of tech workers that serve as an ancillary support system to foreign markets. It is imperative that society adopt high technology in the everyday life of the nation, ensuring a readymade market for innovative products. Primary customers within the country for innovation are the Hellenic Armed Forces and the vital infrastructure needs of the Aegean

islands. Development of technological applications and innovative infrastructure solutions for the Aegean has the potential to render Greece a world leader in marine focused “BlueTech” industries. Requisite for economic growth that helps Greece close the gap with its wealthier European partners. To address the absence of skilled training for those newly entering the workforce, Greece may develop training centers for post-high school graduates in cooperation with countries that have a strong vocational training capacity, i.e., Germany. Such technical centers can prepare the country’s non-university graduates for employment in the technology sector. In this fashion, Greece may produce high quality and skilled university graduates, while at the same time ensuring that technical training is available to anyone outside of higher education.

Providing technical training to an emerging workforce has additional benefits. During the euro crisis, Greece experienced a massive exodus of its most skilled working age population, and the already low birth rate in the country suffered additional strains, add to this that Greece’s population is ageing rapidly, and the long-term trajectory of the replacement workforce appears grim. Here too, however, an innovation economy can help arrest the population decline. The increase in wealth and new employment opportunities will help retain the working age population and offer economic incentive for young families to have children. Additionally, the technical skills will help innovate commercialized processes and products to address the unique needs of an ageing population. Illustratively, a focus on healthcare and the life sciences in Greece at a level comparable to its advanced EU peer competitors may generate high value jobs, research and development, innovation, increased quality care for an ageing population, medical tourism, and a workplace in which to absorb immigrants.

To obtain the full benefits of an innovation economy, Greece must attract inflows from foreign investors to finance the growth of its technology sector. A primary consideration for foreign investors is business transparency and judicial integrity. On this score, Greece ranks very low in the Corruption Perceptions Index, Index of Economic Freedom, and Global Competitiveness Index in relation to its leading EU peers. Without a transparent judicial and governance capacity, Greece will be unable to grow its economy. Modernization of the judicial system is the very first step the government must undertake for a transition to an innovation society.

By making way for greater transparency and rule of law, the government would send a signal of trust to foreign investors.

The recent EU approval of Greece’s recovery and resilience plan, known as Greece 2.0, may invigorate Greece’s transition to a technology oriented economy. As part of Greece 2.0, the EU is providing €17.77 billion in grants and €12.73 billion in loans, of which 37.5% targets climate objectives, and 23.3% promotes a digital transition.

Notably, Greece 2.0 aims to improve the judicial system, promote innovation, upgrade health care, education, and active labor market policies. All reform measures called for in Greece 2.0 must be completed by August 2026. Greece 2.0 represents a good starting point, but it does not contemplate a full transition to a knowledgebased economy.

Historically, successive Greek governments have proven themselves half-hearted reformers. Greece cannot afford half-measures, the current government, and any successive governments, must commit themselves to developing an innovation economy if they are to deliver a better tomorrow to the Greek people. The high friction and low growth

barriers that now undermine the Greek economy can be overcome. It is not expected that Greece achieves economic parity with its advanced EU peer competitors immediately, but once the path to innovation is taken, change occurs at an exponential rate.

If the government and people commence this innovation journey it will culminate in a drastically altered quality of life experience for Greek society.

And the next time we find ourselves on the Athenian sidewalk glimpsing the Acropolis, let’s remember that our ancestors’ commitment to innovation and technology has forever inspired great hearts and minds.

*Andreas Akaras is a lawyer based in Washington, DC, engaged in business and government affairs. He is an advocate for the humanities and science, serving on Kallion’s board of directors, and is founder of the Saint Andrew’s Freedom Forum.


This article is published in the January/ February issue of Greek Business File, available here.