Fast Tracking North Greece

MAR-APR 2017|BY RAYMOND MATERA
Members of the Chamber’s North Greece Committee present proposals to develop the country’s north to its true potential, increasing GDP, employment, investment, and sustainable development.

Clusters—A Growth Model

NIKOLAS BAKATSELOS, PRESIDENT, NORTH GREECE COMMITTEE, VICE PRESIDENT, AMCHAM GREECE, CEO, PYRAMIS SA.

Advancing the economy of Northern Greece, at a time when companies are looking abroad to incorporate, at a time of brain drain and high unemployment, should be at the forefront of policy priorities.

One of the most promising models for dynamic growth in specific sectors is that of clusters—bringing together companies in the same sector to create new synergies, new idea potential, and new growth models. The Coralia Cluster in Athens, focused on microelectronics, provides a framework to emulate. Northern Greece has the potential to host a wide variety of sectoral clusters, growing out of the vibrant R&D carried out at universities and the sectoral strengths in place today. Beyond the obvious high tech areas, specialized clusters could lead to new areas of specialization in Greece with solid market potential—materials science, robotics, medicine, sports sciences, agro tech, specialized tourism, the Mediterranean diet, manufacturing R&D, energy, transport, textiles, and a host of others based on the local economy and the deep and wide interests of the scientific community.

Clusters spark a new mindset among the participating companies. In addition to providing a platform for a shared sector, clusters foster healthy competition, lead to tapping into global markets with greater mass, can greatly reduce costs that can be shared, including communication, marketing, and event costs.

In addition, with a Director or Board of Directors that can advise, monitor regional and international markets, and create a strategic plan, clusters have the potential to fast track growth, business connections, and new partnerships that a single company would struggle to achieve on its own.

Internationalize our Education!

PANAGIOTIS VLACHOS, PRESIDENT, ANATOLIA COLLEGE

The discussion regarding the need for a revitalized economic climate in Thessaloniki has been ongoing for decades. With the overall economic challenges facing the country, the need to create a less regulated environment with favorable conditions for businesses and investors is ever more glaring.

While attention rightly focuses on developing Thessaloniki’s port, tourism, energy, technology, and modern agriculture, in order to attain sustainable growth, a long-term approach is required with education reform at its center. Strides must be made in tertiary education in both existing and new fields where innovation and entrepreneurship are systematically promoted with an underlying goal of equipping graduates with globally oriented skills, driving research advancements, and creating the next generation of entrepreneurs.

It is essential that we internationalize our education, aiming to make Northern Greece, its hub. By attracting students from the U.S. and other countries, we can create a multicultural educational environment. Foreign students positively affect not only local economies, but serve as cultural Ambassadors, creating bridges between Greece and countries abroad. It is telling that Anatolia College has contributed over 6 million Euros annually to the local economy through its U.S. Study Abroad program. Emulating the Boston model, where higher education institutions have a tremendous regional economic impact, should not be viewed as a distant dream but a feasible plan.

Moving forward, we need to successfully reform our higher education system, which must be based on a level playing field between public and private institutions, to foster exchanges and partnerships with institutions abroad.

A Free Trade Zone

CAV. NIKOLAOS K. MARGAROPOULOS, MANAGING PARTNER, MARGAROPOULOS & ASSOCIATES SCIENTIA LEGIS LAW FIRM

Northern Greece was often considered not friendly towards foreign investment. Although some restrictions have been lifted, problems still exist, mainly due to the distance from Athens, where all major government authorities and agencies are located.

In recent years, attempts have been made to establish decentralized offices of government agencies that would facilitate investors and provide administrative services only offered in Athens.

Reference to tax policies that affect investments in Greece, in general, is usually made. All parties involved in the investment process recognize high taxation, high social security payments, and other pecuniary obligations to the State as not appealing to investors. On the other hand, low market values for investment, in combination with advantages of certain sectors (e.g. tourism and services) are attractive to investors. All this applies to most Greek regions.

To make Northern Greece more attractive and counterpoise with the advantages other regions offer, specific steps should be taken.

Thessaloniki’s Port privatization and improvements to land and air transportation infrastructure, coupled with Northern Greece’s highly educated and skilled human resources, high international standards of public and private education institutions that include Greek and foreign curriculum, could all be complemented by Free Trade Zones and an enhanced company services sector.

The American-Hellenic Chamber of Commerce and its North Greece Committee, as well as other business organizations, have repeatedly presented proposals. There is nothing new to invent, but it is paramount to implement what we already know would be the key to success.

Halkidiki—A New Entrepreneurial Hub

IOANNIS PANAGIOTIDIS, VICE PRESIDENT—DEPUTY CEO, PANHOL GROUP

More than ever we urgently need new foreign investment in all sectors by companies that will hire high-skilled educated young people, very well compensated and with great career perspectives. A bold initiative would be to create Educational and Business hubs like Silicon Valley in the Halkidiki region and in North Greece generally. Places that combine tourism, a nice environment, culinary experience and culture and can offer great lifestyle to youngsters who want to be educated and European baby-boomers to retire and continue working part-time, remotely. Many young people (locals and expats) can live, work, create and travel there all year and thus extend the tourism season of the region to 12 months, compared to 6 currently.

We need to establish non-profit private universities, combined with Business and Technology Parks, with fast track procedures and legal-tax legislation with clear incentives, to boost competitiveness and encourage nests of innovation and creativity.

The region’s hotels and resorts can accommodate all visitors on a 12-month basis, in collaboration with the universities and the corporations. The social and economic impact to the tourism sector and to all its stakeholders (suppliers and services) cannot easily be measured but it would be tremendous.

Imagine the magic of studying, practicing, working, living and enjoying a resort environment all year. An outstanding combination for the new generation. We should start to believe in visions and realize them.

Biogas—An Outstanding Opportunity

OLGA MITSIOLIDOU, MANAGING DIRECTOR, AGROTECH S.A.

Greece, rich in renewable energy resources, including wind, sun, and water, is developing serious RES projects that follow the example of market leaders such as Germany and Italy.

And now Greece has the opportunity to fast track another, highly promising energy source: biogas. Biogas is produced by organic material such as manure, energy crops and organic industrial waste. The organic material breaks down with the help of bacteria, a natural process that occurs in nature. Biogas can be used for the production of electrical energy or be upgraded to natural gas. It also offers a high quality fertilizer to farmers and can reduce agricultural costs. The technology is simple and fully supports the local processing of agricultural production.

Although there is an institutional framework that defines the way biogas projects will be developed, it is essential that the Greek government simplifies the procedure, especially for small breeder groups, as it is now extremely complicated and time consuming to get a license. Another critical reform to be addressed is the fact that farmers are in danger of losing their farming facility if they proceed to be issued a biogas license.

This new market in Greece has much to offer to farmers, to the agricultural economy, to employment and to scientists, biologists, engineers, and technicians.

The agricultural, economic, and environmental benefits of biogas are consequential and this growing market deserves our support, especially since it involves a sensitive and important part of the Greek economy: farmers.

Developing North Greece to its True Potential

DR GEORGIOS KATSAROS

Agriculture has always been a stronghold for Northern Greece, as significant agricultural activities are carried in various forms—mass agriculture, orchard cultivation, and vineyards to name a few. Storage, packaging and logistics facilities have significantly improved over the past 15 years, with serious investments both from EU and private sources. EU funds that have entered Greece in the form of subsidies have been invested to advance the productivity levels of farmers, to support infrastructure and to increase the quality of products.

Looking at an average farmer today, taking into account the investments made over the past decades, mainly from EU funding, the results are discouraging. Limited liquidity, poor financials and lack of serious professional skills in most of the cases are common. What has gone wrong after such serious investments? An old saying maybe gives the answer: they ask Tom, who is from the US, when farming will do well? “When subsidies stop” he replies.

Tom’s views are not the only solution, but in light of the Amazon Go era, digital fruit corners like Coop Italia, Farmer’s Market in the US and fifth generation diesel engines fitted on tractors, investments and EU funds must be care.

A New Model for Economic Growth

VASSILIS KAFATOS, MANAGING PARTNER, DELOITTE, CONSULTING

In a disruptive business environment, Northern Greece has the opportunity to fast-track by swiftly adopting a new model for economic growth.

Trends in developed countries revolve around interconnectivity, disruptive innovation, digital transformation, rising entrepreneurship and global competition for capital, which shifts from country to city level. The game of attracting investments and driving economic development is not any more about getting the fundamentals right, but about being innovative and achieving an edge over competing destinations.

Thessaloniki can capitalize on the region’s key strengths, such as the geostrategic location and port, the academic community, the mild climate and beautiful scenery, the cosmopolitan heritage and long history, and take advantage of the opportunities that emerge from the prevailing disruption and uncertainty.

The port can be developed into a smart European gateway, transforming the city into a regional intermodal transportation and logistics hub. An urban and interconnected innovation ecosystem can emerge, around leading-edge anchor institutions and companies, providing an attractive and exciting place to live and work and a breeding ground for new ideas and products. Thessaloniki can be positioned as a vibrant and appealing destination for visitors and inhabitants alike, by improving access, developing tourism and leisure infrastructure and fostering quality of life and social progress. Such pillars of economic development can solidify and reinforce each other, giving rise to other growth areas such as smart manufacturing.

A clear vision and strategy are imperative to align initiatives while swift and aggressive action is required to pursue the significant new opportunities for growth.

Economic Prospects in North Greece

JOHN KANELAKIS, TAX ACCOUNTANT – BUSINESS CONSULTANT

Northern Greece is an area with considerable potential for exploiting natural and tourism resources and infrastructure projects. In addition, it can be the engine of development of our country under certain conditions.

Our company, Project MEPE, with experience since 1993 in the area of business advisors-tax, and also of the economy generally, helps with all its forces to highlight all of the possibilities in the region but in restricting the pathogenesis of administration that have the effect of not investing in our region.

We firmly believe that our region can be, with appropriate conditions, a development model for transport, tourism and production.

In particular the authorities could promote specific tourist projects in Eastern Macedonia and Thrace with private marinas and the development of tourist facilities by simplifying licensing, all in cooperation with major operators and shipping companies overall.

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