ECONOMY

Public sector IT programs lag, affecting tech firms

The Information Society program, designed to automate public institutions and local authorities and provide speedy connections among them, will conclude at the end of this year, with decidedly mixed results. Despite the setup of a semi-independent body, Information Society SA, to handle the program, bureaucratic delays and the inability of several public bodies to either display sufficient interest or to manage the projects they themselves had conceived, have not allowed Greece to take full advantage of generous EU funding. Despite that, Economy and Finance Minister Giorgos Alogoskoufis claimed yesterday that the implementation of the program has accelerated during the last 19 months, that is, the tenure of the present government. He said that this was due to the fact that the program was refocused to give priority to online services for individuals and enterprises and toward developing broadband Internet infrastructure. At present, there are 65 projects under way that will provide an equal number of municipalities with optical fiber networks; another program will provide 400 hot spots for corporate wireless networks. Alogoskoufis also referred to the need for the better use of available EU funds from the Fourth Community Support Network (CSFIV), which has not been agreed upon yet, but is expected to cover the period 2007-2013. Information Society SA will have an enhanced role in managing the new program, which will also include extensive public-private partnerships for the provision of online services. An IT performer The delay in public information technology projects also affects the entire IT sector, since too many private companies are dependent on earning public contracts, or at least acting as subcontractors, as a precious few have the size needed to undertake large projects on their own. This situation is reflected in the dismal results of most listed IT companies. There are exceptions, however, some small companies that are innovative and outward-looking. One such company, Athena Semiconductors Inc, a specialist in integrated circuits for wireless broadband networks, was taken over by US group Broadcom for $21.6 million. One of the first companies worldwide in its specialty, Athena Semiconductors tried to get funding from Greek venture capital firms, which are mostly subsidiaries of the big banks. According to their management, they were rejected by all of them; finally, they got $20 million in financing from two US holding companies (Alliance Venture Management and Needham Capital Partners and Korean electronics group Samsung. At present, Athena Semiconductors has two product development centers, in Athens and Bangalore, India, where it employs 65 people. In its announcement of the takeover of Athena Semiconductors, Broadcom – a company with $2.4 billion in turnover in 2004 – says it took over the Greek company because it is interested in two innovative technologies it has developed: One allows portable devices to capture TV content and the other concerns microprocessors that facilitate wireless networking over wi-fi systems. Broadcom has grown its business through acquisitions of small innovators such as Athena; over the last year it has taken over 35 such companies. The US firm forecasts fast growth in both analog integrated circuits for wi-fi networking and in TV capture from handheld devices over the next five years (an annual growth of 121 and 205 percent, respectively).