Combining innovation and extrovert entrepreneurship, start-ups in Greece leave no room for doubt that the country participates in the IT/digital revolution. Whereas the Greek startup industry is still in its early development, there exist success stories and strong indicators that it is capable of creating benefits for the Greek economy. Since 2013, tech startups coming from Greece have managed to build world–classproducts, score multi-million dollar rounds from world–classinvestors and exit to world–classcorporations. Taxi-beat, BugSense, Crypteia Networks, AbZorba Games, e–Food.gr and others were founded and developed in Greece and then sold to foreign investors. Furthermore, relevant data suggest that Greek SMEs have a strong attitude towards innovation and that, despite the low R&D intensity, remarkable efforts have been made in recent years to preserve public investment. Main challenges include improvement of the framework conditions by reducing barriers to entrepreneurship and establishment of a systematic evaluation process of the public R&I system, including policies and funding, to further strengthen its quality.
Tech start-ups blooming in Greece is not accidental. Skilful human capital, hard earned experience, start-up culture and funding, constitute the main assets which allow for competitive and extrovert businesses. A useful tool in the hands of those interested in raising funds is startupgreece.gov.gr., i.e. the institutional agency which provides support for foreign direct investments, promotes the international attractiveness of Greece as a start-up investors’ destination, and fosters the Greek innovation ecosystem through funding solutions at every stage (seed, start-up, early growth or development). Entrepreneurs can choose among three types of funding solutions: Greek state/EU Funding, purely European Union, purely private.
A Q&A follows with Efstratios Zafiris, Secretary General for Industry, Ministry of Economy and Development and Head of "startupgreece.gov.gr." Read more information about fund raising perspectives after the Q&A.
What are the features of the start-up policy implemented by the Ministry of Economy and Development?
The Ministry of Economy and Development designs and implements policies aimed at strengthening Small and Medium Enterprises (SMEs) and supporting new businesses, motivating dynamically developing start-ups. Multi-faceted institutional interventions are planned to remove barriers to entrepreneurship in terms of the establishment, licensing and operation of businesses. Examples include the “new development law”, co-funded state aid schemes, modern financial tools, start-up support structures (e.g. startupgreece.gov.gr), European programs for SME competitiveness, research and innovation. The Ministry's basic guidelines are to provide support to start-ups throughout their development cycle, encourage clusters, promote innovative new entrepreneurship, simplify licensing of economic activities, and so on.
Start-ups are often used as an example of how the Greek economy can return to growth. Could you elaborate on the ways that start-ups are a boost factor of the country’s financial ecosystem?
Start-ups are seen as an important lever for the Greek economy. By implementing new and innovative ideas, they fill existing gaps in the market, thus increasing GDP. They can also fill gaps in existing value chains. The majority of start-ups are targeting the international market, helping to inflow funds into the country. In addition, start-ups can become a mechanism for linking research centers with industries and production units. It is obvious that they create a significant number of new jobs.
From your experience so far, as institutional agency for start-ups, can you describe us the critical needs of young entrepreneurs who address to you?
From our experience so far, as an institutional organization for start-ups, their most critical need is funding. Furthermore, business development and marketing are also very important to start-ups. Also, many young entrepreneurs face difficulty in finding qualified staff for their companies. With regard to financing needs, young entrepreneurs are trying to secure funding, both from European funding programs and from Greek investment funds. Finally, the majority doesn’t count on bank lending.
According to the latest data Greece ranks 9th in number of participants signed contracts and 12thin budget share (EU-28) for Horizon 2020. How do you comment on that? Is there room for improvement?
The fact that Greece holds the abovementioned positions is very important. It is hopeful that Greece can rise to higher positions in the future. There is clearly room for improvement and this will be done by better understanding the requirements for participation in Horizon 2020, which is the most significant program for Research and Innovation in the EU. It is particularly crucial to link research to production. Research results should lead to new innovative products, the great ideas that arise in the laboratory, have to be transported to the market.
More information about raising funds for start-ups in Greece
Greatly facilitated by the creation of EU-backed venture capital funds that specifically target technology start-ups in Greece, successive governments placed emphasis on startup companies. More specifically, the so-called “JEREMIE funds” were put together in late 2012 under a scheme of public and private co-financing in a 70/30% ratio. Under the management of the European Investment Fund-EIF, public financing came from national and EU structural funds (from the national Operational Programme ‘Digital Convergence’ and JEREMIE scheme), while the private financing came from both institutional and individual private investors. Following the expiry of the JEREMIE funds investment period having expired, the government is seeking to move forward tech entrepreneurship and funding opportunities for scalable businesses. To this end, a new fund-of-funds is being set up along with EIF in order to pour at least €260 million to Greek startups through intermediary Venture Capitals and Private Equity funds.
Widening the Horizons - EU's Horizon 2020 for SMEs including start-ups
In terms of purely EU funding solutions, Horizon 2020 is a game-changer. The biggest EU Research and Innovation programme ever with nearly €80 billion of funding available over 7 years (2014 to 2020) is the financial instrument implementing the Innovation Union, a Europe 2020 flagship initiative aimed at securing Europe's global competitiveness. By coupling research and innovation, Horizon 2020 places great emphasis on excellent science, industrial leadership and tackling societal challenges, so that Europe is able to produce world-class science, to remove barriers to knowledge, research & innovation and to facilitate public and private sector synergies in delivering innovation.
H2020 supports SMEs with a new instrument that runs throughout various funded research and innovation fields, enhances EU international research and Third Country participation, attaches high importance to integrate social sciences and humanities encourages to develop a gender dimension in project. Cosme is a special Programme for the COmpetitiveness of Enterprises and SMEs (COSME) that will run from 2014 to 2020, with a planned budget of €2.3bn. It will facilitate SME access to finance, create supportive environment for business creation, help small businesses operate outside their home countries and improve their access to markets.
The National Documentation Centre acts as a National Contact Point for Horizon 2020 and according to the latest data (May 2017) 1,437 participants from Greece have received, thus far, a financial contribution of €437.26 million. Total number of SME participants reached 312,receiving €82.84 million. Greece ranks 9th in number of participants signed contracts and 12th in budget share (EU-28). Top five beneficiaries include:Centre for Research and Technology Hellas (CERTH) Foundation for Research and Technology Hellas (FORTH) Institute of Communication and Computer Systems (ICCS), National Technical University of Athens (NTUA) and University of Athens (UoA).
Watch the video with former EU Commissioner for Research, Innovation and Science, Geoghegan-Quinn explaining Horizon 2020.