27oς economia Φοιτητικός Διαγωνισμός

5o Βραβείο Ομαδικής Εργασίας


Andreas Kouvaras, National and Kapodistrian University of Athens

Themistoklis Nimas, National and Kapodistrian University of Athens

Maria Eleni Louki, National and Kapodistrian University of Athens

Ioannis Prokopiou, University of Ioannina


1. Introduction

“Entrepreneurship” can not be given a commonly accepted term, but its definition depends on its economic and administrative approach. Entrepreneurship in general refers to the transformation of the initiative into action, which requires a series of processes such as the creation, organization and management of a business in order to achieve profit. It is inextricably linked to innovation, the pioneering, that is, the combination of knowledge with products and services (Leonard & Swap, 2005) resulting in the growth and development of the business (Tomala & Seneccal, 2004). In 1958, the method of startups appeared in the Silicon Valley area and by the end of the 90’s it became widely known through the stock market bubble of companies “dot – com”. Companies such as Google, Amazon, Apple, and more recently Instagram and Twitter, have their roots in startups (Gromov, 1995). In Greece, however, they appear late, during the years 2012 – 2014. The term startups stimulates interest as it refers to a category of companies and is not univocal. Many entrepreneurs have given their own perspective, such as Steve Blank (2012) who emphasizes the development of a temporary but at the same time repetitive and scalable model, Cassar (2014) who analyzes the importance of rapid growth in conjunction with the integration of innovation and Winborg (2009) who recognizes the need for their quick return to be an attractive investment. In this context, the lack of an innovation-oriented business environment as well as a research and development system focused on the needs of start-ups, is the main problem in Greece.

2. Existing business environment in Greece

2.1 – Ecosystem description

The structural features that make up the ecosystem of start-ups are dynamic and change over time. Ecosystems are divided into tangible and intangible. The material ecosystem is bounded by a specific area and describes processes such as: start-ups, business incubators (incubators, incubators, accelerators), funding sources, entrepreneurship and innovation organizations, universities and colleges, universities and colleges. The intangible ecosystem, on the other hand, describes processes that do not take place in a specific place such as: entrepreneurship and innovation competitions, activities and events for start-ups as well as entrepreneurship and innovation support organizations. Undoubtedly, through business plans a business can identify existing opportunities and explore risks and threats (Block & MacMillan, 1993). Industry 4.0 and technological progress in general, lay the foundations for the adoption of changes at the organizational level. At this point, traditional businesses face obstacles that hinder innovation opportunities, in contrast to start-ups for which several support structures have been developed with a view to their success (He & Wong, 2004).
The intangible and material ecosystem of Greece, being dynamic, needs a supervisory analysis as many structures that are active in it, provide various types of services, even through partnerships to support start-ups. For this reason, it is considered necessary to group the structures that are active in our country, and mainly in Athens and Thessaloniki, which are illustrated in the following diagram (Papadopoulos, 2009).

Figure 1: Structures of the Greek ecosystem of start-ups

Source: Lambropoulos, 2016

2.2 – Subject and branches of Greek start-ups

In Greece, the phenomenon of startups appeared in response to the global financial crisis during the years 2012 – 2014 (Lambropoulos, 2016). The ecosystem of our country is new, small in size while it lacks its orientation towards a specific industrial sector. More than 350 companies can be identified as start-ups (Kalavros, 2017), and this number seems to be increasing due to the creation of many structures such as the ones mentioned above as well as the holding of tenders, in order to finance and develop contacts of young people. entrepreneurs (Russell, et al., 2008).
Most of them are active in the field of information technology and software applications, while at the same time there are startups promoting traditional Greek food products of Greek culture and history and tourism, sectors that show a great competitive advantage in Greece. Then, with smaller percentages, startups appear that are active in the sectors of e-commerce, financial services, business services, energy and green technology and health (Papadopoulos, 2013).

2.3 – Legal status and necessary reforms

The success and realization of a business’s business idea is determined by the legal form that characterizes it. Greek tax legislation does not provide any special regulation for startup companies, but the legal framework is similar to traditional companies. The attractiveness of these general incentives is questionable. Depending on the number of partners, startups are divided into individual or corporate. Most of them act as legal entities of a Private Capital Company (PCC) as provided by Law 4072/2012, as it provides flexibility compared to other forms (Greek abbreviation: Α.Ε., ΚοινΣΕπ., Ο.Ε., Ε.Ε., ΕΠΕ). The creation of a single legislative framework in start-up entrepreneurship remains in demand (Dalianis, 2014).
This issue has already been established in 2012 in the legal status of Italy, while it was amended in 2015, in order to further improve and develop the scope. Italian law sets a strict framework for integrating a company into the concept of “innovative startup”, however, if this becomes possible, it enjoys a number of advantages that can support it in its first steps, such as tax breaks and exemptions, corporate flexibility governance and specific labor legislation, especially with regard to youth employment. It is, therefore, justified because this regime is an example to be imitated especially for the countries of Southern Europe (Lytras, 2015).

2.4 – Financing

Depending on the needs of each company, a combination of internal should be chosen, i.e. the cash flows from an investment and the short-term receivables and external financing (Komaris, 2013). The current economic – political situation of Greece has forced startup companies to solve the problem of seeking funding, through the following methods:

❖ Venture Capital: Finances new businesses by emphasizing the innovative ideas of founders and inspirers in order to ensure profit.
❖ Business Angels / Seed Investors: They consist of private investors, who invest in startups during their start-up phase.
❖ Crowdfunding: It is achieved through the internet, with the help of special platforms through public funding.
❖ Government – European agencies: Funding comes from government agencies through special programs (Talionis & Milioni, 2012).


Figure 2: Ways of financing startups in Greece

Source: Talionis & Milioni, 2012
(creation of the shape by ourselves)

Financing methods and stages have advantages and disadvantages related to control, accountability, level of interference, skills and competencies related to the prospects of business success (Tariq, 2013). The following figure outlines the stages of financing startups.

Figure 3: Stages of financing start-ups

Source: Tariq, 2013
(creation of the shape by ourselves)

2.5 – Extroversion

The term “extroversion” implies the shift of companies towards export-oriented activities and penetration into new markets abroad. In business, it is a necessary and capable condition for the recovery of the economy. During the financial crisis, however, a decrease in imports can be observed (Gavera, 2015). In this kind of approach, the customer can become the focus of the new service model. The first factor for the “externalization of innovation” refers to the commercialization of electronic media, facilitating two-way customer-business communication. The second factor concerns the rapid development of Web 2.0 and the development of Social Media (Trapezanoglou, 2010).
In Greece, the presence of Upstream company, one of the largest in the world in its category, specializes in software applications and services. It is a model of extroverted business model with application in two-way services via mobile phone. Its goals are achieved by sending an SMS to provide content or conduct competitions through a mobile phone. Its success is confirmed by its activity in more than 40 countries (Trapezanoglou, 2010).

3. International Environment: A look at successful startups

On the world map, startups are constantly at the forefront thanks to the multitude of opportunities encountered. Unlike in Greece, the bureaucracy is quite reduced and finding funding becomes easier due to the better economic situation, especially in the countries of the European North, Australia and America (Figure 5).
Based in the United States, the Kickstarter funding platform operates with more than $ 1.4 billion aimed at start-ups, which confirms the most favorable funding in contrast to Greece. The IT and technology sector is maintained at the top of the startup activities, while in the 2nd place the presence of the health sector is remarkable (Figure 4).

Figure 4: Startups’ Funding by sector

Source: Mashable, 2012
(creation of the shape by ourselves)
Figure 5: Top 10, +1 countries in Entrepreneurship Rankings

#1 Germany GDP: $ 4.0 trillion
Population: 82.9 million

#6 Canada GDP: $1.7 trillion
Population: 37.1 million

#2 Japan GDP: $5.0 trillion
Population: 126.5 million

#7 Sweden GDP: $551.0 billion
Population: 10.2 million

#3 United States GDP: $20.5 trillion
Population: 327.2 million

#8 Korea GDP: $1.6 trillion
Population: 51.6 million

#4 United Kingdom GDP: $2.8 trillion
Population: 66.5 million

#9 Australia GDP: $1.4 trillion
Population: 25.0 million

#5 Switzerland GDP: $705.5 billion
Population: 8.5 million

#10 Netherlands GDP: $913.7 billion
Population: 17.2 million
Spoiler Alert

#29 Greece

GDP: $218.0 billion
Population: 10.7 million

Source: https://www.usnews.com/news/best-countries/entrepreneurship-rankings, 2020
(creation of the shape by ourselves)

At this point, some models of foreign startups should be mentioned. The CoronaFree, winner of the Swedish hackathon, the inspiration of two universities and a hospital, is a solution to the issuance and confirmation of a COVID-19 disease certificate, to facilitate the return to the post-lockdown routine. Epimetrics, having its roots in India, using Big Data and Artificial Intelligence, through Geographical Identification Systems and the use of maps, allows users to track cases in real time as well as predict possible spread.
The ingredients of their success can be distinguished into three broad categories of characteristics related to: 1) The entrepreneur, 2) The business, 3) The business environment. The characteristics of the entrepreneur refer to the skills and expectations of the result (Townsend et al., 2010). The determining factor that leads to entrepreneurship is education (Acs, 2006). In the characteristics of the company, the identity of the company, the industry, the size of the costs, the economies of scale and the degree of innovation play a leading role (Santarelli, 1998). The external environment of the company is in contrast to its internal. Incubators, i.e. organizations that accelerate and systematize the process of creating successful businesses, have a key role in shaping the environment for the subsequent development of the business (Scillitoe and Chakrabarti, 2010).

4. Responding to the COVID-19 health crisis

Start-ups have played an important role in tackling the financial crisis in Greece, as a “hope” for growth. Currently, the global community is facing a new crisis, the health crisis, due to the COVID-19 pandemic. Startups can, as developed in the previous paragraphs, be the solution to this crisis.
The combination of technology and research is necessary. Our first proposal concerns the creation of a startup called “HILE” (from the terms Health & File, in Turkish means “trick”) which will aim to manage patient data through the digitization of the medical file, in order to reduce the phenomenon of bureaucracy, which is an obstacle to crisis management in the hospital environment. Undoubtedly, the legal and ethical background needs to be reviewed.
Recognizing the universal impact of the pandemic on people’s social life, our second proposal concerns the establishment of a startup called “MUSECLUES” (from the terms Museum & Clues, a pun with the 9 muses). It will be aimed at young people up to 15 years old and children will be able to participate online and in groups, in digital tours of museums looking for 9 items (as many as the muse) while collecting historical knowledge while collecting points for their group. Combining the experimental, the pedagogical and the critical type, essential components of the museum exhibitions (Pedretti, 2007), the distances – online – during the quarantine between children – culture – education will be “reduced”.

5. Conclusion

In conclusion, it is generally accepted that startups are a new culture in the business world. Despite the fact that only 4% of the submitted ideas manage to get funding and 75% of the total businesses fail, the financial result will be extremely positive. Startups can contribute 4% to a country’s GDP, being products and services of high added value. Undoubtedly, in Greece, the main problem to be addressed concerns the adoption of a single legislative framework resulting in the creation of a business environment with incentives for the establishment of start-ups. Young entrepreneurship can be the cornerstone for the development of startups, in the light of the increase in funding from the state to the “young” founders, as more and more are currently resorting to private financiers. The conception of the idea and the innovation should be externalized with the crucial role of technology and its commercialization. In this context, the study of support mechanisms, the institutional and financial models of foreign countries, is not a utopia, but on the contrary can be the basis for the development of young entrepreneurship in Greece. Finally, recognizing the contribution of startups in tackling the financial crisis, broadening our horizons and areas of action for start-ups, can be utilized in tackling the global health crisis due to the COVID – 19 pandemic. The ideas we proposed are a minimal sample of the opportunities and opportunities provided by entrepreneurship. However, the “hidden helpers” of innovation, extroversion and startups are education, technology and government financial and legislative reforms. These factors need our attention, in combination with the achievement of the 17 sustainable development goals (SDGs) of the UN in New Business Greece.

“Innovation is the only sustainable competitive advantage a company can have.”
David Friedberg, Weatherbill Founder

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