Changing Greece—It’s Up To Us

Athanasios Kouimtzis, Managing Director at Kouimtzis Group, discusses the long evolution of the crisis in Greece and offers a new strategy for growth and development—based on restructuring Greece’s economic model.

How do you see the development of the Greek economy after so many years of recession?

Rather than speak of development, which is so often the case, I believe it is more appropriate to speak of ”restructuring” the Greek economy. In other words, before development and growth can occur, Greece needs to implement a major shift in its basic economic model.

After WWII the Greek economy grew quite well for a few decades, following a model adopted by the United States and other Western countries, designed to restructure the economic paradigm—primarily based on creating “giants” in the secondary sector of manufacturing with vertically integrated production.

With this model, Greece established several major industries, mostly in local commodities and minerals. And this worked, somewhat successfully, until a few decades ago. But then the basic Western model shifted again, with the introduction of total supply management, a faster and cheaper supply chain, and outsourcing both products and services (again led by the U.S.) to SMEs through the transfer of know how and ensuring access to financing. In this way, an entire new generation of businesses was created, and many brilliant businesspeople were able to develop thousands upon thousands of innovative, efficient, and responsive enterprises—and contribute decisively to GDP growth.

Greece, however, did not follow this model and Greek industry was not able to compete. And since this model was not followed in Greece’s primary and tertiary sectors, agriculture and tourism, so key for the country, we witnessed no consolidation in farming and a lack of major international hotel brands, despite the fact that tourism was becoming Greece’s economic driver.

So, by not expanding the SME base to serve large industry, Greece essentially prevented a new category of the economy—the innovative and entrepreneurial category—from being created. This is where new economic growth would have come from, where inclusive participation would have occurred. Instead, Greece held onto an outdated model that had no chance of success and with rising labor costs spelled years of stagnation. This, more than anything else, led to today’s crisis in Greece.

How, then, can Greece begin the process of change and healthy growth?

With the simplest and fastest way: by copying other developed—and similar—economies that have followed the expansion model. First, Greece must provide a stable and well-defined tax regime. Second, the political class must agree on long-term objectives for growth so investors are assured of continuity. The State must commit to providing a first-class infrastructure. In this way can a new breed of investors—and SMEs—be created that will power growth and employment. Greece can then have new SMEs serve its own large companies and industries and participate in the global economy, providing products and services to international giants and selling directly in the worldwide marketplace.

Why do you think that now the economy can succeed, while it has failed in the past?

Because Greece has a new generation of young businesspeople and professionals, many of them highly educated, and graduates from universities in the U.S. or the EU or, graduates of Greek universities with an international perspective. Many of these graduates have gained skills working in an international environment. I am confident that this new class of businesspeople, keen to develop a modern economy in Greece, based on hard work, innovative practices, and global cooperation, can be the foundation for a successful, new Greece. Many are already taking the lead to transform family businesses. Many are active in the start-up ecosystem. This is the hidden ammunition of the Greek economy—highly educated young people, among the best in the world. This ‘firepower’ has not been used properly and now is the time to release its charge.

Greece is a small country. Is this market large enough to support the economy through domestic consumption?

In many ways the size of a country in today’s environment is not very important. Scandinavian countries are small. Singapore is small. What matters is the health of the economic model. In addition, Greece has the tremendous advantage of being a local leader, with a strong currency, in a region of 200 million people.

And, in many ways, Greeks are very similar in mentality to U.S. citizens. Both countries are outward looking. Remember, in ancient times Greece developed because it expanded its trading to the Far East. Greeks ships sail to every corner of the globe today. 25 million visitors come to Greece every year. Proper branding—and practices—can create a new, global image of Greece in just a few years. Just look at Israel.

What are some of the other factors important to Greece’s success?

It is vital that we understand the challenges, risks, and opportunities of today’s digital era. Digital is the defining characteristic of our future and the average Greek company is far behind in this area. Today’s infrastructure in Greece must be IT based as much as it is based on ports and logistics centers. If we do not embrace the digital economy, we will have lost before we started. The new generation understands this and must be supported fully. Rather than being 26th out of 28 EU countries in IT uptake, Greece must make it a priority to be at the top of the list. All it takes is a commitment to fulfill a strategic national objective.

A strong, small economy, with digital firepower, competes with any economy—we see this everywhere in the world today. SMEs can jumpstart economic growth and be global players—provided they are supported by a national consensus over the long term. The costs of not acting today are immense and if we do not, we will burden our youth with debt—whereas we can choose to provide them with opportunity. We need to make a choice and then act on that choice. We need to change, not talk about change. We need to unite for a common purpose—the future of Greece that is one of opportunity, healthy growth, employment and hope. And only we can do that, only we can make that change.

What about your company? Tell us about the Koumtzis Group.

The Kouimtzis Group is a family organization that has been in operation for more than 80 years. We began by focusing solely in the domestic market, distributing mechanical parts and components for agri machinery and industry. Today, we are active in agriculture, industry, defense, engineering, and power generation. We are proud to be successful in the heart of Europe, and we compete well, I am happy to say, in Germany. We have built an international network to market our products through subsidiaries and local agents in 42 countries. Today, 70% of our turnover comes from the international market, with the biggest portion through our 100% subsidiary company located in Germany. Our headquarters and main facilities are in Thessaloniki.

For the manufacturing of our products we use a large number of small workshops in Greece. Additionally, we cooperate with international companies and research institutions to develop new, innovative products. Currently, we have two new exciting products in development, an innovative rotary engine and a new product for digital observation and control. At the same time, as part or our 15-year plan, we are working on a number of other products and services with our engineers that we are confident will be key to our success in new areas.

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