An aerial view of Thessaloniki, Greece’s second largest city, and home to one of the country’s fastest growing research and development centres. Copyright: Marianna Ianovska /

ICT & Innovation
Investment Sectors

  • 6 bn
    Est. amount of EU funds earmarked for digital transition
  • 2026
    Est. date by which 94% of the population will have access to 5G
  • 3
    Number of operators awarded 5G spectrum in December auction
  • 200%
    Tax-based deduction of expenses for R&D investments

The Silver Lining of the Pandemic: Greece’s Digital Leap

Greece is undergoing a digital transformation on the back of a multifaceted plan to fully digitise the country by 2025. Meanwhile, the country’s innovation ecosystem is winning over many of the world’s top tech and R&D giants.

When it comes to attracting investments, Greece’s abundance of highly skilled human capital coupled with its strategic location, linking East and West, are widely known as two of the country’s greatest strengths. Up until recently, however, a tangled web of bureaucracy undermined Greece’s potential as an investment destination, with the Mediterranean country bottoming out of international digitisation and competitiveness rankings. Now, a so-called digital revolution is changing this.

From the total upgrade of state services through to the creation of innovation hubs, leveraging space technology, and the full rollout of 5G technologies; the plan, according to the government’s Digital Transformation Bible, is to digitally transform Greece by 2025. The roadmap, unveiled by the Ministry of Digital Governance in December 2020, aims to simultaneously develop a strong digital technology industry and educate the next generation. And so far, Greece is making steadfast progress.

Making Strides

Previously a laggard in digital governance, Greece has recently made significant gains. The country was ranked 4th largest improver in the IMD’s 2020 World Competitiveness Report based on surveys conducted in March 2020, during the first wave of the COVID-19 pandemic. Greece jumped seven places to 46th out of 63 countries surveyed, mainly on account of its strong IT and regulatory framework improvements.

Fast forward one year, and Greece had already taken 1,100 state processes online through, the government portal launched two months ahead of schedule due to the onset of the pandemic. Additionally, by then, one fourth of the 400+ projects outlined in the government’s Digital Transformation Bible were underway.

“After years of stagnation, Greece is now rapidly accelerating its investments in digital technologies,” says Evrikos Sarsentis, Mergers, Acquisitions & Investor Relations Director at OTE Group, Greece’s largest telco operator, pointing to recent efforts to digitise public services ranging from the launch of a digital cadastral registry to the rollout of “an exemplary COVID–vaccination system.” Dubbed Operation Freedom, Greece’s online COVID-vaccination platform has been touted as a success, and was followed by a rapid COVID test results registration platform launched in April 2021.

However, the country still has a lot of catching up to do. Indicatively, the European Commission’s 2020 Digital Economy and Society Index (DESI) ranked Greece 27th out of 28 EU Member States for its poor scores in connectivity (28th), human capital (25th), use of internet services (25th), integration of digital technology (24th), and digital public services (27th). The good news is that the 2020 DESI findings are based on 2019 data, and do not, therefore, reflect the rapid acceleration in Greece’s digital transformation that was triggered by the COVID-19 pandemic.

Copyright: Helmos Observatory

The Silver Lining

Having referred to the pandemic as a dramatic catalyst for change, Prime Minister Kyriakos Mitsotakis has called for the country’s complete digital overhaul supported by 5G and next generation networks. Having auctioned 5G licences in December, the government plans to harness 5G, fibre optics, Big Data, AI, and cloud services, tapping EU, state, and private funds to digitise the country, while upskilling Greece’s human capital.

It’s no coincidence that the digital transformation is one of the twin drivers in Greece’s National Recovery and Resilience Plan, alongside the green transition. Dubbed Greece 2.0, the plan is a blueprint for the transformation of the country’s economic model in the post pandemic era, underpinning the activation of NextGenerationEU, the largest stimulus package ever financed by the European Union.

With €30.9 billion in grants and loans earmarked for Greece, in addition to €27 billion in private investments, green and digital investments are jointly slated to absorb more than 50% of EU backed funding.

Transformative projects, which are interwoven with the Digital Transformation Bible, include 5G and fibre optic infrastructure; digitising the Greek state, from the introduction of online court proceedings to the digitisation of tax services; the development of smart cities; and upskilling the workforce.

Greece’s digital economy is poised to become a key pillar moving forward, following what has become a global movement boosted by the pandemic. “Traditional industries are accelerating their pathway towards digital transformation,” says Jianbo Wang, ZTE’s CEO of Southeast Europe, Cyprus & Israel. This overhaul, however, requires the necessary infrastructure says Wang “and the most important digital infrastructure is broadband, which enables a flow of information between people and industries.”

5G Leads the Way

In an effort to expedite the launch of 5G products and services, the Greek government unveiled the creation of a mega 5G Venture Capital fund, named Phaistos, in late 2020. Established with an initial capital of €93 million, derived from 25% of the proceeds from the auction of the country’s 5G licences, the fund will bankroll start-ups active in the development of applications and services that capitalise upon 5G networks. Phaistos' capital is expected to grow through the participation of private investors.

Greece’s mobile phone market is made up primarily of three players: Cosmote, Vodafone, and WIND, with all three having been awarded 5G internet spectrum during the Greek state’s December auction. Mobile network operators have been spearheading efforts to develop fibre-based next generation networks (NGAs), to reach European broadband targets for 2025.

Cosmote, a fully owned subsidiary of the Hellenic Telecommunications Organiation (OTE) – now 46% owned and managed by Germany’s Deutsche Telekom – was the first to switch on its 5G services in December 2020. Having teamed up with Ericsson to build its 5G infrastructure, OTE currently provides 5G coverage to over 40% of the Greek population. Greece’s other carriers, Vodafone and WIND, have since both launched their 5G networks.

Greece aims for its 5G networks to reach at least 60% of the population by 2023, and 94% by 2026, explains Christina Giannopapa, Advisor to the Greek Ministry of Digital Governance, on secondment from the European Space Agency (ESA), noting that according to an EY study commissioned by the Ministry, 5G technology “can be a catalyst and multiplier for the digital transformation of the country.”

In the meantime, and with the next digital race looking towards linking connectivity with outer space, Greece is poised to be at “the heart of the next generation of satellite communications and related infrastructures within the EU,” says Giannopapa. The ESA has chosen to use four telescopes in Greece as optical ground stations, while having launched a Business Incubator Centre in Greece to support space-related start-ups.

Copyright: asharkyu / Shutterstock

Innovation to the Fore

Eager to capitalise on Greece’s large share of STEM graduates to deepen investments, an ambitious agenda is also being pressed on to bump-up Greece’s international appeal as a hotbed for R&D projects. The strategy is based on fostering the growth of Greece’s innovation ecosystem, matching start-ups with venture capital funds, accelerators, and seed funding, while also creating the necessary incentives to lure global tech giants to set up shop in Greece.

The local “environment is going from strength to strength in facilitating innovation, research and development,” says Dimitris Maniatis, CEO of Upstream – a mobile internet and online safety provider to emerging economies with 1.2 billion consumers. Upstream was one of the first, if not the first, tech companies to leverage Greece as an R&D centre for its international operations. Considered by many to be the founder of the Greek ecosystem, two thirds of the company’s employees are currently based in the Mediterranean country.

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.

Since September 2020, Greece has significantly increased the tax-based super-deduction for companies investing in R&D, increasing this from 130% to 200%. Additional incentives are in place for technology transfer offices, innovation clusters, competence centres, and angel investors who invest in start-ups registered on the state’s matchmaking platform Elevate Greece.

And several technology majors have already heeded Greece’s call, either bolstering their presence or establishing themselves in the market for the first time.

Thess INTEC Park is bound to be Thessaloniki’s first innovation and technology centre. Copyright: Thess Intec

In October 2020, Microsoft announced a €1 billion investment to create three data centres in the wider Athens area, after acquiring Greek-owned tech firm Softomotive, reportedly, for over €100 million. Pfizer announced the development of a second digital hub in Thessaloniki in December 2020. Cisco developed an Innovation Centre while Amazon launched a Web Services centre in Greece. Other names include the likes of SAP, Volkswagen, Tesla, and TeamViewer, with many companies also committing to train thousands of Greece’s workforce in IT and technical skills.

“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,” says Christos Dimas, Deputy Minister of Development and Investments, Research, Innovation and Technology, who also points to the development of two landmark innovation and technology parks in Greece’s largest cities, Athens and Thessaloniki.

“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,” adds Dimas.

Another local tech pioneer that has grown through private foreign and local investment is Skroutz, the undisputed leader of the Greek e-commerce marketplace with more than 6 million products in over 9,000 partner stores. 2020 was a milestone year for the company says CEO & Co-founder, George Chatzigeorgiou, with the pandemic acting as an accelerator for e-commerce. Daily orders surged by up a whooping 7,000%.

After getting off to a slow start, the digital era has finally arrived in Greece. Billions of euros in projects are expected to transform all aspects of the economy, creating a new model and, with it, endless opportunities for growth and investment.

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