Rising to the Challenge: “Greece can become a key global centre of entrepreneurial activity”With global tech majors looking to grow in Greece, the government is preparing for the long game, explains Christos Dimas, Deputy Minister of Development and Investment, Research, Innovation and Technology, having embarked on a multi-faceted strategy to reshape the country into a leading research and innovation hub. From landmark tax cuts and the creation of a start-up registry across to the development of an innovation district in Athens, and a technological park in Thessaloniki, the goal, adds Dimas, is to make Greece much more attractive with respect to the past and its main competitors in the region.
GIG: While Greece’s expenditure on R&D with respect to GDP increased in 2019 (standing at 1.27%) this is still far behind EU targets for R&D expenditure in Member States to reach 3% by 2020. As Greece looks to transform its economic model, what role is R&D set to play?
Dimas: Investing in research and innovation is a strategic priority for the Greek government. In fact, if you look at the European Commission’s statistics, you will find that for every euro invested in research and innovation, €11 are returned to the real economy.
While we have increased investments from public funds, we have also focused on private funds by providing companies with more incentives to either come and establish their R&D centres in Greece or, in the case of companies that already operate in Greece, to invest even further in R&D.
One of the most important initiatives that we have pushed forward, which has been active since 1 September 2020, relates to tax incentives. We have significantly increased the super-deduction for R&D expenses from 130% to 200% making Greece one of the most attractive countries in Europe for R&D investments. And according to the impact assessment that we have performed, we expect that this is an initiative that will significantly increase funding towards research and innovation in the following three years.
In addition, we have important initiatives focused on technology transfer offices, innovation clusters, and competence centres. We also have a very active plan in place for the creation of an innovation district in Athens and an important technological park in Thessaloniki, which we hope will help attract more R&D investments in the country in the following years.
GIG: What project under your leadership do you consider to be the most important for the Greek economy and why?
Dimas: If I had to only select one project, which is very difficult, I would have to go for the creation of an innovation district in Athens. The innovation district is a physical ground focused purely on innovation where we hope to attract companies and industries that are willing to establish a part of their R&D department.
This will be a ground base for the start-up community: from start-ups, spinoffs and spinouts across to synergies between them, the innovation district will be a matchmaking ground through which innovative products and services are created. It’s a project of utmost importance and it’s proceeding very quickly through a public-private-partnership model (PPP).
There isn’t anything like this initiative in Southeast Europe, and we believe it will host more than 2,400 workers in the near future. Construction of the innovation district is expected to commence towards the end of 2021.
In fact, the bidding process has already begun and we expect to start attracting important companies to create consortiums to bid on the project. It’s important to mention that as it’s a PPP, the Greek state will not bear any direct costs for this project. Instead, the government is providing the land where the district will be developed, which is located in a very central part of Athens.
GIG: Another mega-project is the Thess Intec Park in Thessaloniki, what is the status and what role do you expect the private sector to play?
Dimas: The Thess Intec Park is an emblematic initiative under the leadership of the Ministry of Development and Investments. We recently established a company that has already started collecting funds from investors who want to partake in this project. So, it’s moving ahead very quickly.
We hope that both projects – the Athens Innovation Centre and Thess Intec Park – will contribute to make Greece more attractive for important R&D projects in the following years, while establishing Greece as a leading player in research and innovation in Southeast Europe.
GIG: The Ministry recently launched an electronic registry for start-ups called Elevate Greece. What market gap does this platform endeavour to fill?
Dimas: Up until recently, we didn’t know how many start-ups we had in Greece, in which economic sector they were active, what budgets they had, or how many people were employed within this space. We had no information about the start-up ecosystem.
In fact, even if we wanted to legislate positive measures for the start-up ecosystem, the reality is that we didn’t know who we were addressing or legislating for. And there isn’t a common definition of start-ups, which is a problem not only in Greece but in countries across the world.
Consequently, we started looking at best practices in other countries and we realised that some of them have created a start-up registry. But we wanted to do more than that. We aspired to do something innovative for both European and global standards. So, we created Elevate Greece, which is an entry point to the Greek innovation ecosystem.
Besides hosting a start-up registry, Elevate Greece includes the VC funds, the accelerators, the incubation centres, and all the most important actors within the ecosystem, including private companies.
Elevate Greece’s main goal is the creation of the national start-up registry to map the Greek start-up ecosystem, monitor its progress through specific KPIs, enable networking and matchmaking among actors, address local and global potential investors, while also enabling the Greek state to implement tailor-made measures for the ecosystem.
GIG: What is your assessment of Greece’s start-up ecosystem?
Dimas: Elevate Greece has now been operating for a little more than two months. Despite the increased challenges associated with the COVID era, the results so far have been very positive and encouraging. Many start-ups and companies have expressed a real interest in Elevate Greece.
The first start-ups were registered within less than a month because they had to pass through a very specific and strict evaluation procedure to ensure they complied with our definition of a start-up. More than 600 companies have initiated the procedure to become a member of the start-up registry. While we’re happy with these first steps, we acknowledge that we are still at the beginning.
Elevate Greece is a baby and it has to grow up. We’re trying to provide Elevate Greece with all the necessary tools to ensure its success. It’s a very important initiative, not only for the start-up ecosystem, but also for the country. This is especially true considering we want to incentivise increased extroversion and address potential investors outside the country, while trying to link the Greek ecosystem with other important players across the globe.
GIG: Funding continues to be one of the biggest barriers to entrepreneurship, particularly with respect to Greek start-ups. What steps or financial tools are being developed to match start-uppers with potential investors?
Dimas: The Greek government recently legislated specific measures and tax incentives, for the first time, for business angels. As a result, people that actually invest in start-ups registered in Elevate Greece will benefit from important tax cuts.
More specifically, business angels can now benefit from a 50% tax cut with respect to the amount they have invested. This is limited to €100,000 per company, and up to three companies per year, for a total €300,000 per annum. The tax incentive is half this amount.
While this is a first step, it’s only the beginning. We want to test the waters and assess how many angel investors capitalise upon this tool, before we present additional measures. What’s important to note, however, is that this tool is currently available for angel investors who are interested in investing in start-ups that have already enrolled in our registry.
Looking ahead, our intention is to increase these incentives to create more opportunities for Greek start-ups to attract important funds from both within the country and abroad.
On the other hand, we’re currently creating an important funding tool targeting the start-up ecosystem in an effort to support the segment to deal more effectively with the COVID crisis.
We have also launched a section in Elevate Greece, which is called Official Partners. This includes more than 30 very important private companies that offer a different variety of tools and incentives for the start-up ecosystem, either regarding funding or that create more matchmaking opportunities. These include financial incentives; financial help from banks, companies, or even consulting firms; access to banking products that are tailor-made for the start-up ecosystem, and access to global innovation networks that some multinational companies provide.
GIG: A number of international investments from technology and R&D majors have targeted Greece over the past year, ranging from Pfizer and Cisco across to Microsoft, more recently. What is the strategy?
Dimas: To begin with, we have significantly improved the business environment in the country. We are fully committed to continue in this direction, to make Greece much more attractive with respect to the past and our main competitors in the region.
Secondly, we know that we have the human capital. Greeks are currently positioned in the most important companies and universities around the world. If you visit any incubation centre outside of Greece, it’s almost a given that you’ll will find Greeks involved. And while we are seeking ways to attract top tier companies to invest in R&D, one of our foremost priorities as a government is identifying how we can attract some of this talent back to the country.
Bearing in mind we have created important tax incentives for R&D investments, improved the business environment, and house the necessary human talent within the country, we believe that Greece is an attractive place. However, as we want to attract even more R&D companies to Greece, we will continue to make all possible efforts to improve the overall environment as much as we can.
GIG: What message would you like to send to international investors that are considering investing in Greece?
Dimas: Investors should definitely consider Greece as the place to be. We call upon all potential investors to come to Greece, see the opportunities, and compare us with other countries. They need to see for themselves what opportunities are available within the country. And not only opportunities to invest directly in Greece, but opportunities to leverage Greece’s location to gain a competitive advantage throughout the world.
Greece can become a key global centre of entrepreneurial activity, especially within the scope of research and development. That is our ambition and what we’re working for. We are very proud that we have already convinced important companies including Microsoft, Pfizer, Cisco, and EY to follow that road. And we’re quite sure that many other companies will follow.