ECONOMY

A year full of challenges for managers and entrepreneurs

For member states with lagging productivity such as Greece, participation in Euroland implies a massive effort to improve it. This effort, which has already begun, is taking place in the middle of a general upheaval and global recession. The common currency of the 12 countries will no doubt lead to more intense competition and a compression of prices. However, the degree of influence this trend will have on an economy with a geographical position such as Greece’s is not clear. At the same time, labor unions have already given notice of their intentions to press for a convergence of incomes with those elsewhere in the eurozone within a few years’ time, making the need for an increase in national productivity even more pressing. In addition, given the relative unwillingness of a number of Greek firms to contest market shares in the mature markets of our EU partners, thus foregoing the theoretical advantage of an economy’s membership of the EU, the magnitude of the challenge to the Greek economy in the coming years becomes clearer. No doubt the resources of the EU-subsidized third Community Support Framework investment plan for the 2001-2006 period are boosting the growth of Greek GDP to levels considerably higher than most EU partners and other members of the OECD. A question hangs over the «day (or year) after» 2004, the Olympic year. A second question is what rate of GDP growth will be needed in order to implement a radical restructuring of the economy in the context of existing goals and conditions. Entrepreneurship and management look like taking center stage in the economy in 2002. The basic factors shaping the framework within which the Greek economy is being called upon to perform are the following: 1. A strong currency but, at the same time, the absence of traditional instruments of economic policy (e.g. competitive devaluation). 2. Participation in a single market with almost a single currency (15 minus 3), but in a peripheral geographical position. 3. Neighboring Eastern Europe. These markets may not be mature, and while they present opportunities, they also pose significant risks. And these opportunities do not fully meet Greece’s export potential. 4. Due to the current conditions in the Athens bourse and falling interest rates, there has been an upsurge of interest in the real estate market. But this is subject to limits. 5. Many companies are looking for growth opportunities. 6. Significant investment opportunities also exist in non-listed companies of all types and sizes but there are no broad bridges for investors to access them. Additionally, there are many tax and other practical disincentives. 7. The market is displaying eagerness for new entrepreneurial ideas capable of leading to promising projects (even though they may contain a high degree of risk). 8. The adaptation to the new conditions is leading to a significant restructuring and greater insecurity in the labor market, which is not used to competitive conditions. 9. Bureaucracy still bears down on business heavily, absorbing crucial energies at the expense of the more productive business functions which are becoming even more important today. But a reduction in red tape probably requires time. Under such conditions, entrepreneurship, that is, the ability to conceive and implement new projects within existing or new schemes, is a crucial factor for 2002. Two key elements are business strategy and management at all levels. The former combines the opportunities of the general environment with company skills in planning attractive business activities. The latter brings the company skills to bear to achieve success in these activities. Due to the complex nature of trends in the general environment and internal company adjustments, these two elements will be in strong demand in 2002. – Nikos D. Panagiotopoulos is an analyst and company strategy consultant (www. ndpnet.com/analysis).