Greece has proven that it has potential, and now it is incumbent upon the country to use the momentum to attract investment in fields beyond tourism. This is the assessment of the President of The Hellenic Initiative, and former CEO of the Dow Chemical Company, Andrew Liveris, who is proud of the way Greece has managed the pandemic. What advice does he have for the state and how does he encourage CEOs?
What are your thoughts on the pandemic?
We are in the middle of 2020 and if someone had told us in 2019 that we would have a year like this, I don’t think anyone would have believed him. What we all are experiencing is like a world war of our generation.
There is the view that until a vaccine is found, there will be no economic recovery. What is your opinion?
This strong uncertainty is fueling many scenarios out there. Indeed, as I meet and deal with people, I am realizing that there will be no return to the pre-coronavirus levels before a vaccine. And if we assume that we will have a vaccine next year, then we are looking at 2022 or 2023, in terms of demand before the crisis. But there is an even worse scenario, according to which sectors such as tourism and travel will not return for several more years due to behavioral changes. On the one hand, we have positive results in online entrepreneurship – the digital market is the big winner. However, this has rather negative repercussions on other links in the supply chain. We cannot rule out that it could take until 2025 to see a return to pre-crisis levels. In this case, we will have deep unemployment in the intervening period.
Do you see opportunities in this crisis?
What we can see is the acceleration of digitization. We are already in a digital world that we had initially seen happening a few years from now. Digital penetration is currently at 27% from 11% before the pandemic, which is extremely positive. In this setting, one will find people who are quite happy with decentralized business environments and digital interconnection.
What are businesspeople faced with in a crisis like this, and what are their priorities?
The first priority is access to capital. Consumption is declining, regardless of the business model. All of a sudden, you are faced with a lot of costs without a lot of revenue. And so the company becomes more inflexible. So you need to focus on the customers and find those who will stick with you during this difficult time. Of course, the older you are, the harder it is. That’s why we see big companies announcing so many redundancies. For smaller companies, which employ one, two or three people, this is not the main cost. It is the cost of the market, the cost of delivery. Costs related to warehouses and supply chains. This is where you need to bring in the digital world and adapt your model as quickly as you can, to a digital connectivity model, like e-commerce or blockchain.
What should the state do for businesses at this stage?
All governments in the world have activated support packages. There are two approaches that are the most common. The first is a band-aid approach that will stop the bleeding, essentially temporary programs that will keep households afloat. But what will heal the wound is a substantial financial operation. That is, spending toward infrastructure. And to do that, you have to borrow. But that, in turn, will cause a credit crisis. Unless someone makes companies sustainable again. Which companies? The small and medium-sized ones, which governments will have to help on a longer-term basis, to enable them to resume trade at pre-pandemic levels. This means one-, two- or three-year programs.
What is the future of work from now on?
Skills, skills, skills. We need people to understand the interconnection of man and machine. A machine does a lot of the work that humans did. People need to translate what machines do – the data, the knowledge – to make anything more efficient. This skill base should be present in the factory, in the supply chain and in the market. And the employee of the future along with the system that trains him should accelerate. I can’t think of a country in the world that doesn’t focus on human capital and skills. Knowledge workers are here. We no longer need, so to speak, mechanical workers. We will certainly need professionals such as plumbers, electricians and craftsmen, but even they will have a clever interpretation of the problem they are called upon to solve. We can no longer have low-cost manual labor. We need to invest in people and upgrade their skills in a digital economy.
So how can a country attract investment in today’s economic environment?
Governments need to embrace the digital model, reduce bureaucracy and change the whole way approvals are granted. Not red tape but red carpet. How do I speed up project approvals and all the things that happen in the economy? How do I get a set of approvals as soon as possible to release funds for everything that needs to be done, like infrastructure. This overhaul of governance, its transformation from an obstacle to a conduit, suggests a change in mentality. Of course you can do other things as well. Tax incentives, access to land, public utilities, ports. All these are important. But what needs to change is the whole mechanism whereby approvals are granted.
Greece seems to be successfully managing the pandemic. What does this mean for its economy?
The work that the Mitsotakis government has done is excellent. Being a Greek, I am proud as I observe it from afar. I remember that 10 years ago Greece was not on the front pages for positive reasons. We showed the Greek spirit. As I said a few years ago, when we founded The Hellenic Initiative, Greece is not defined by five years but by 250 years. And that means we have a certain character, that we are a certain type of people. We are resilient. We have a perception of marriage, the arts, charity, hard work, of creating something out of something very small. It is the genius of the Greeks that was tested during the pandemic. And to be here now, emerging with a strong leadership, with a very strong performance, we should feel proud, but also see it as an incentive to do everything we can. We can do anything. This moment of national pride should not be wasted. It will now have to move to the next level of economic recovery and investment attraction.
There is obvious concern regarding the course of tourism. What is your opinion?
The need for the Greek economy to diversify has been around for a long time. Let’s use this particular set of circumstances to make it happen. With the strengthening of sectors such as IT, food, agricultural production, solar energy, renewables. Greece cannot ignore tourism. But it will have to move to other industries. And it should do it from top to bottom. With guidance from its leadership and the government. And there will be a response. Quick approvals, fast-tracking. Get bureaucracy out of the way. To encourage entrepreneurs, and for foreign capital to arrive, this is the time to diversify.
What is your advice to entrepreneurs in Greece today?
I myself am Greek and I am proud of it. My success has come from my value system, from the value system of Greek entrepreneurs. Greek businessmen, Greek CEOs, are powerful. Let’s not be divided anymore. Let’s get together, let’s unite, let’s grow. Let us systematically address our weaknesses together. Let’s find new business models. Let’s test the system. This is the time to do it and I encourage CEOs in Greece to do so.