ECONOMY

Greece lags behind EU partners in technology despite robust PC sales

Growth in Greece’s Information Technology (IT) sector is expected to halve this year largely due to delays in the implementation of European Union (EU) funded projects despite some relief coming from strong sales in the personal computer market, a recent survey said. Consultants Strategic International – Kataras SA said in a recent report that preliminary data showed growth in Greece’s IT sector in 2004 will drop to 2.5 percent from 6 percent last year, with a further slide to 1.2 percent expected in 2005. The consultant group blamed the weaker performance on low absorption rates of the EU’s Third Community Support Framework (CSFIII), which is estimated to total about 50 billion euros for the six-year period between 2000 and 2006. «The worst is not yet over, the forecast for 2004 is growth of 2.5 percent and then finally ‘convergence’ with the European average,» the report said. The EU’s IT market shrank in 2003 by 1.2 percent. This figure is expected to reverse into growth of 2.4 percent this year as industry experts await a recovery in the IT and telecom sectors. «The (Greek) market’s essential upgrade, with a turn to smarter software and added-value services, never happened. Steady performances in the sales of personal computers was the only reason that the total market did not fall to its lowest level in 20 years,» the report added. The 6 percent growth figure in 2003 came in well below expectations, with double-digit growth originally anticipated. Greece’s current pre-election period is seen as one of the reasons behind delays in the implementation of EU-backed IT programs. Two of the most important projects, including the Police On Line program, have a total budget of 90 million euros and are still in the air, not having been awarded yet to any company. The total size of IT spending coming from the European purse looks also to have been overestimated. Funds earmarked from CSFIII for Greece’s «Information Society» program were originally estimated by market experts at 3 billion euros. The actual amount looks to be smaller given that a large part of the funds have been channeled into other areas such as education. The amount remaining for IT projects is seen to be closer to 800 million euros. Budgets which are by no means small have yet to register on the balance sheets of an IT company. Greece trails in spending Greece is currently holding up a ladder of countries ranked on how much money they spend on technology and telecom-related research. According to EITO, an organization consisting of some of the world’s leading IT companies, Greece’s per capita spending on technology and telecoms last year came in at 701 euros, the least of all Western European peers. By contrast, Switzerland, which heads the list, spent 2,675 euros and the US, 2,328 euros. In second-to-last place is Portugal which put aside 845 euros per capita for the same purpose. Market experts propose a number of ideas which may help Greece close the gap with its EU partners, such as ensuring a higher penetration rate of DSL lines and faster Internet usage through wireless connections. More complete networks via the Internet would also help advance development in the sector. This could come in the form of increased electronic trading or a larger presence by the government on the Net. So far Greece’s efforts to offer government services on the Internet have been restricted to the National Economy Ministry and the TAXIS network, a service which gives taxpayers the ability to deal with the tax office electronically. Greece’s stagnancy in this field has also been noted by the European Commission in a recent report, while fellow EU members make faster progress. Other recommended improvements included the convergence of digital technologies with consumer electronic goods. EITO data shows that consumer goods expected to show the highest demand in 2004 are flat-screen televisions, sound systems which support MP3 audio files and home cinema systems. While experts warn Greece may miss the technological train if it doesn’t move quickly, the European Union is also seen as trailing its largest trading partner, the US, and Asia. Greece’s challenge is to track Europe and its initiatives aimed at boosting competitiveness.