High growth to be sustained through business innovation

Greek society must embrace innovation and entrepreneurship if the economy is to continue growing at such a fast pace, National Bank of Greece chairman Theodoros Karatzas told a public conference yesterday. Speaking on the second and last day of a conference on the Greek economy organized by the Hellenic American Chamber of Commerce, Karatzas also called for a strong link between education and production and reform of the civil administration. «We need a society that will accept innovative entrepreneurship; businesses open to constant organizational reform and technological innovation; banks dedicated to finding out and supporting entrepreneurs; universities attuned to production needs; and schools that will provide the young with critical, analytical, communication and technological skills. Each secondary school graduate should not only be able to use a computer, but also be able to communicate easily in the new lingua franca of the information society, English,» he said. The new sources of development will be achieved with the continuous upgrade of human resources and the production environment, Karatzas remarked, placing great emphasis on the role of state administration. The latter must change its mission and assume a guiding role, aiming at taking advantage of productive forces instead of that of the interfering state which stifles initiative. Lasting high growth will be achieved through improvements in competitiveness. This means the ability of an economy to produce better goods and services, and at lower prices, than its competitors. The time that we could rely on bilateral and other trade agreements and ignore quality and cost of products and services has passed, Karatzas said. Strengthening the numerous small and medium-sized enterprises (SMEs) will be crucial for the development not only of the Greek economy but of the other European economies as well. Strengthening them is not limited to boosting their capital, it also means helping the private sector to rid itself of any remaining protectionist elements such as subsidies. Karatzas also called for more flexibility in the labor market, saying that it would help boost employment and competitiveness. SMEs, which create about half the total number of new jobs, must invest in their employees, promoting regular retraining schemes, providing improved work conditions and benefits to their employees. Next year’s Olympic Games will be the catalyst that will familiarize hundreds of enterprises with innovative technology and services. The Games will also provide Athens with a vastly improved infrastructure and will increase Greece’s marketability abroad, with a positive effect on exports and tourism, Karatzas said. In this sense, the positive effect on production will last for many years after the Games. Karatzas appeared optimistic that the Fourth Community Support Framework will provide EU funds, ranging from 13 to 17 billion euros annually, or over 1 percent of the country’s gross domestic product. These inflows will fund investments which will expand production and boost the capacity of the economy as a whole.