Country must focus on added-value sectors

Unless Greece trebles its growth efforts in the economic sectors where the country currently enjoys added value, it will take at least a quarter of a century before the local jobs market recovers to a level last seen before the crisis, according to a report by global nonprofit organization Endeavor Greece to be presented at a conference starting on Thursday in Athens.

“At the current rate and mix of business creation (almost 40,000 every year, with just 10 percent focusing on an added-value sector and only 1 percent showing significant growth), Greece will require 25 years in order to create the jobs it needs. In order to achieve that in less than a decade, it will have to treble its efforts focused on added-value sectors and double their success rate,” the report funded by the Stavros Niarchos Foundation states.

“Above all, the right business environment must be created in order to cultivate, support and connect quality business endeavors,” adds the report. It will be presented at the foundation’s 3rd International Conference on Philanthropy concluding on Friday.

Greece, the report notes, has lost a total of 1 million jobs over the course of the last five years. More than half were in three sectors (construction, retail and wholesale commerce, and manufacturing), while entire domains such as real estate have all but vanished. Even according to the optimistic growth scenario, the same sectors will not be able to recover two-thirds of the jobs lost in that time.

Only three domains have managed to survive intact or even expand their work force, these being the agricultural sector, food manufacturing and technology.

The study highlights that young people in Greece have been disproportionately affected by the rise in unemployment, with over half a million jobs lost. Still, just half of the jobless rate is due to the financial slowdown and the recession. The rest is from the traditional drawback of young people remaining outside the labor market, which intensified during the crisis. Several sectors have abolished jobs for young workers or even increased jobs for older people. These include agriculture and food as well as professions such as doctors, lawyers, bank clerks and accountants, blowing the traditional family dream of many Greeks out of the water.

In this context over 200,000 Greeks have left for foreign shores, most of whom are skilled young people who have found employment in other countries. In the main, Greek talent has stayed within Europe, mostly in the United Kingdom and Germany. Under certain conditions, however, this phenomenon, the notorious brain drain, could turn into a kind of “brain circulation,” offering those Greeks the opportunities, the outward-looking mentality and the experience that the domestic market is unable to give them.

Despite the major reforms and infrastructure upgrades, this great shift of economic activity requires time and new skills and entails the physical movement of hundreds of thousands of people. Over 640,000 are expected to change sectors, while more than half a million will be forced to move outside of Athens and Thessaloniki to seek employment in other parts of the country, on top of the ongoing flight of Greeks abroad.

Most existing enterprises are structurally unable to considerably increase jobs. After all, major enterprises had been reducing employee numbers even during the years before the outbreak of the economic crisis, the Endeavor Greece report concludes. It will therefore take some 10,000 new high-growth enterprises with the right outward and innovative mentality to cover the estimated 800,000 jobs lost.