Greek small and medium-sized enterprises are introvert, with low productivity, obsolete operations and systems, and are hardly ever innovative, according to a National Bank of Greece study on what is often called the backbone of the national economy.
If the spine of the economy is so problematic, then the economy itself suffers, and the pandemic served to highlight the considerable drawbacks of local SMEs, broadening the distance between them and large enterprises, as well as their counterparts in other European countries.
The study, titled “Next Generation EU is the Big Opportunity for Greek SMEs,” showed that the country’s small and medium-sized enterprises lag their European Union peers by 73% in labor productivity: Added value per worker at a Greek SME comes to 10,000 euros, against €38,000 on average in the EU. Notably, this shortfall is also seen in larger companies in Greece, though the gap is significantly smaller: 54% for medium-to-large companies and 34% for large enterprises.
Likewise, capital investments in Greek SMEs are 33% smaller than in their EU peers.
The weakest points of domestic SMEs, especially those in manufacturing, in comparison with the large companies in this country, are their low likelihood of engaging in exports, innovation and digitalization – the latter being highlighted in a painful way during the lockdowns.
The NBG study found that exports only account for 14% of SMEs’ sales, against 38% for Greece’s large corporations. This is not just a problem of quantity but also of quality: Small Greek firms mainly export to Balkan and Eastern European countries, unlike the larger enterprises that have better access to Western Europe, where profit margins are greater.
Technology forms no part of the strategy of 40% of smaller companies (against 20% of the larger ones), which lag in the use of digital instruments, as they believe that they add no benefits to their enterprise. Just 31% of SMEs develop new products (compared with 50% of larger firms) and only 10% cooperate with academic or research centers (against 25-30% of bigger companies).