Foundation for Economic and Industrial Research presents its annual report on entrepreneurship

Fewer entrepreneurs started a new business this year, apparently due to uncertainty in the Greek market and to heavy taxation of the self-employed, said the Foundation for Economic and Industrial Research (IOBE) in its annual report on entrepreneurship presented on Monday.

In addition, the report found that the quality of new startups is lower, with innovation sliding and need-based entrepreneurship dominating new companies.

On the other hand, findings also included a greater use of new technologies and greater extroversion, although this latter seems to be connected to startups in the tourism services sector which is by nature more extroverted.

This year’s report includes an analysis of new startups by older individuals (senior entrepreneurship) and the quantitative expansion of factors affecting the extroversion of startups.

Some of the reports conclusions include the following data:

– The number of people aged 18-64 who were at the early stages of starting a company in 2016 dropped to 5.7 pct (380,000 people), from 6.7 pct (450,000) in 2015. It is one of the lowest ranges historically (2003-2016: 6.9 pct).

– The percentage of the population that interrupted or suspended its business activity in 2016 comprises 3.8 pct of the general population (around 260,000), higher that of 2015 (3.0 pct). Seven in ten said they did so because of lack of profits.

– The number of women entrepreneurs at the early stages of a startup dropped to 4.8 pct (around 168,000) compared to 6 pct in 2015, while of men it dropped to 6.6 pct from 7.5 pct in 2015.

– Almost one in three businesspeople (35 pct) have at least one college degree, with 7.8 pct holding a graduate degree or specialization as well. But 42.7 pct are high school graduates, a higher percentage than recorded in 2015.

– Three in five businesspeople declared that no possible customer would consider the offered products or services new or innovative, while 15.6 pct believe that everyone will see their products as being innovative. According to the report, this statistic may be attributed to the fact that new startups generally tend to belong to consumer services.

– One in three businesspeople said they are focused entirely on the Greek market, while one in three said that over a quarter of their revenues came from customers abroad (a slightly lower percentage than the average of innovative countries’ 35 pct). It seems however that it is the first time there is a strong export tendency, as it is the first time that the percentage of those who export over 25 pct of their turnover climbed to over 70 pct.

– Despite the fact that 64 pct of all Greeks state that being an entrepreneur is a good choice for a professional career and 66 pct believe that successful businesspeople are treated with respect and recognition, the percentage of the population that could see business opportunities six months ahead is the lowest globally, at 13 pct. In addition, the report said, even if 71 pct of new entrepreneurs express confidence in their knowledge and abilities to run a business, Greece retains one of the globally highest percentages in terms of fear of failure, at nearly 70 pct.

As for obstacles to entrepreneurship, they are the continuing discouraging business environment compared to most European countries of innovation. Some of it can be attributed to the economic crisis, but a significant part relates to structural and foundational weaknesses of the country (bureaucracy, changing tax regulation, lack of efficient promotional mechanism, among others).

State inefficiency and lack of effectiveness of politicians in changing the environment was also cited, as were difficulties in financing, entering the market and surviving in the wider political and social circumstances.

Alternate Minister of Research and Innovation Kostas Fotakis delivered the event’s keynote address, followed by a round-table discussion with a member each from a private company, an investment firm, a university and a bank. The discussion was moderated by IOBE general director Nikos Vettas, professor at the Economic University of Athens.

The 2016-2017 report is linked to the global research program Global Entrepreneurship Monitor (GEM).