ECONOMY

Thurow says: Play it big

The secret of accelerating economic growth in Greece lies in attracting foreign investment capital, which translates into a transfusion of money and know-how, says Lester Thurow, the Nobel Prize-winning professor of the Massachussets Institute of Technology and author of the best seller, «The Coming Battle Among Japan, Europe and America.» Thurow spoke to Kathimerini on the sidelines of the 13th conference of the Senior Business Executives Association (EASE) on the subject of «Transforming Opportunity into Advantage,» which took place in Athens recently. The discussion touched on the edge the United States had over Europe, the latter’s attempt to bolster its role in the global economy and on Greece’s drive to become more competitive. «The only way for Greece to catch up with developments is a strong, conscious effort to attract foreign capital; the search for and promotion of the competitive advantage which differentiates it from other countries and, at the same time, functions as a lure for foreign investors.» Europe lagging Thurow attributes Europe’s lagging behind the United States to its permanently conservative policy vis-a-vis everything new and its fear of experimentation. «The conflict between the USA and Europe over the issue of genetically modified organisms (GMOs) is typical. Europe refuses to embrace something which will prove successful in the immediate future, and, besides being cut off from a new profitable market, it deprives itself of the potential of being in advance of America when it is ultimately proved that GMOs are not hazardous,» he says. According to Thurow, Europe is also partly responsible for the economic recession of recent months, as it could have forecast the coming slowdown in the American economy – the result of the overvaluation of the telecoms sector. «While Europe’s economy is based on telecoms to a much greater degree than America’s, the governments of the 15 member states did absolutely nothing to protect their economies from the coming slowdown,» he said, to make the point that Europe follows rather than leads in formulating the dominant trends. «And so, Europe expects recovery once again from America.» North Africa, Egypt For Thurow, North Africa, and particularly Egypt, is an ideal field for promoting investment activity, on account of the benefits from wage differentials and the quality of human resources. «Tapping into North Africa, particularly Egypt, can bring Europe the benefits which America enjoys from its relationship with Mexico,» said Thurow. However, Europe’s different mentality, which betrays fear and suspicion toward any new discovery, and its inflexible policy on competition issues, which is ultimately hostile to multinational companies, are the elements which keep it behind. «If Europe wishes to take over the reins at some point from the USA, it must support the giants, the big enterprises; this is the rule which capitalism dictates.» The professor was an ardent supporter of the entrepreneurial opportunities offered by the Internet three years ago and, despite what many call the bursting of the bubble since, he continues to believe it is the business medium of the future. «The failure of dot.coms is due to the fact that they proliferated in a short space of time, and some of them did not have the required infrastructure. As a result, only the strongest survived.» Biotechnology Beyond new technologies and the Internet, Thurow believes we can expect significant profits from biotechnology. «It is a real revolution, akin to that of electricity. The potential is limitless and unbelievably interesting. I am certain biotechnology will constitute an important sector of the economy in coming years.» He sees the emergence of the post of chief knowledge officer as key to company growth, in combination with three particular elements: their ability to manage new technologies, invest in the right human resources and utilize these factors to attract and keep clients. Those that excelled in the old economy must now learn to function under the terms of the new economy, Thurow said.