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Victoria Mindova

The turnover of Greek telecommunications companies fell by half in the period 2008-2012, which has driven the companies in the branch to reorganize their activities in times of crisis and remain profitable despite the current severe financial situation in the country. Large corporations enable small companies to develop new products (innovative services and applications for high-tech platforms) that change the environment and create opportunities for growth and profit.

"The crisis did not kill innovations. The companies develop new products and offer them on a wide range of markets. They start with the Greek market and if the products are successful, they expand their supply on foreign markets, thus becoming an element of growth in the country and abroad," George Stefanopoulos, who is the general manager of the Greek Mobile Operators Association, told GRReporter.

Stefanopoulos points out that despite the serious financial difficulties, large corporations can and create a suitable environment for the development of new technologies. These are products that have a high added value and attract the mass consumer. An example of the evolving innovative spirit is the results of 150 small Greek companies operating in the field of digital applications and development of network software. They were able to find an interesting idea applicable in a real business environment, which international companies in this sector have taken and realized in the broader market.

"It was uncommon to find such companies seven or eight years ago; they were almost non-existent actually. Now their number is 150 and they had turnover of approximately half a billion euro in 2012. Their number is not large, but they are laying the beginnings of a new business ecosystem," explains the general manager of the Greek Mobile Operators Association. The main components to develop this ecosystem are innovative ideas and collaboration between young entrepreneurs in the field and telecommunications corporations who are already established players in the market. The main part of the income of these young innovative companies comes from abroad, mainly due to the good connection between the innovator and the established player in the market.

"The work of the 150 young companies that have been able to develop themselves in the field is a good start, but it is insufficient to create a new reality. We need ten times greater economic activity to provide a more tangible result."

Some changes at the institutional level are necessary in Greece in order for the market to become more competitive. George Stefanopoulos thinks that the role of universities in the development of young people focused on innovation should be reconsidered first. Curricula should be adapted to the real needs of the economy and offer a competitive package of knowledge that will prepare the young people for a successful career in life.

Businessmen from all sectors of the economy are extremely dissatisfied with the current tax framework in Greece. Telecommunications companies also share the overall negative mood that prevails in the country on this issue. "We are the only country in the euro zone applying two times higher taxes on the use of smart phones. High tech users in Greece pay double compared with the rates established abroad – an indirect tax of 0.48 euro for a euro service, the average rate in Europe being 0.20 euro for a euro service." Stefanopoulos believes that the issue of taxation of telecommunications services should be renegotiated with the lenders’ representatives of the supervisory Troika of the International Monetary Fund, the European Commission and the European Central Bank.

He does not forget to mention the problems with the financing of innovations. Due to the economic crisis, banks cannot finance even sustainable business proposals whereas bureaucratic difficulties prevent the European funds from providing new fuel for innovations. The expert in the telecommunications sector suggests that the development of investment schemes outside the traditional financial sector should be triggered to focus on individual projects rather than on certain sectors in general.

A successful example of alternative funding for new entrepreneurs is the initiative of GAEA, which GRReporter presented last week. In it, an established company with an extensive network in the external markets has found a model for the accumulation of funds that will go for the initial capital of ten new business projects related to agriculture. The head of the initiating company Aris Kefalogiannis has drawn the idea from the Nobel Prize winner in economics Elinor Ostrom. In her opinion, corporations are the living cells of society and they are obliged to contribute to the development and growth of new ideas in addition to paying social and health insurance; to allow young people and ideas to start and develop, to be successful.