ECONOMY

Entrepreneurs out of necessity

entrepreneurs-out-of-necessity

Greeks see entrepreneurship as a way out of their financial difficulties, according to a survey on the domain in Greece for 2014-15 conducted and presented on Thursday by the Foundation for Economic and Industrial Research (IOBE).

The poll, which surveyed people aged 18 to 64, showed that 7.8 percent were in the early stages of entrepreneurship in 2014, up from 5.2 percent in 2013, while the early results for 2015 indicated a drop to 6.9 percent.

The swing to entrepreneurship was deemed by 43.6 percent to be out of necessity rather than a bid to take advantage of business opportunities. According to the IOBE survey, Greece is a laggard in terms of entrepreneurship and innovation, while the country leads its peers in terms of necessity entrepreneurship.

The survey also found that “established entrepreneurship” – i.e. the number of businessmen operating their enterprise for over three-and-a-half years – was particularly high compared to pre-crisis levels, at 12.8 percent of all businessmen in 2014, although their revenues were below 40,000 per annum in most cases. This is indicative of the stamina that small entrepreneurship showed in the first five years of the financial crisis. It is also true, though, that a third of established entrepreneurs say they have stayed in the business domain since 2009 as they are unable to make a living in any other occupation.

The IOBE survey also had some positive findings, such as the drop in the business activity termination rate and the strengthening of the export-oriented character of companies.

The share of entrepreneurs who said they had ceased or suspended their business activity in 2014 came to 2.8 percent, well below the 4.3 percent recorded in 2013 and close to the average of the countries where innovation thrives. IOBE commented that this showed the business sector started to take steps to shield itself from the financial crisis in 2014.

The financial conditions and mainly the lack of profits were the main reasons given for ceasing or suspending a business activity, at a rate of 68 percent. The share of companies with an exclusively domestic clientele fell from 43.1 percent in 2013 to 41.8 percent in 2014.