ECONOMY

Business startups seen as solution

A growing number of Greeks are planning to set up their own business in response to deteriorating labor market conditions despite agreeing that the economic outlook is getting worse, according to survey results published yesterday. The Foundation for Economic and Industrial Research (IOBE) said that about 17 percent of the population aged between 18 and 64 – some 1.2 million people – plan to launch their own enterprise in the next three years. The figure is a five-year high, up from 16.6 percent in 2008 and 13.7 percent in 2007. «This could be attributed to the negative developments in the domestic labor market. These people are being pushed toward entrepreneurship under the pressure of having lost their job or under the perception that they will be jobless,» IOBE said in a 2009-10 report. Greece’s growing army of jobless workers hit a record high in August, with government data showing 12.2 percent of the work force is looking for work, up from 12 percent in July. With the economy not expected to return to a growth trajectory until the second half of 2011, at the earliest, the jobless rate is seen jumping to 15 percent next year, according to the European Commission. For the time being, however, the number of active entrepreneurs is on a downward course due to falling business expectations, the report added. The percentage of the population which is currently in the initial startup phase of their business operations is at 8.8 percent, down from 9.9 percent last year, said IOBE. Business sentiment in Greece has been falling sharply, with austerity measures weighing heavily on household budgets and consumption. IOBE’s economic climate index – based on business expectations sub-indices covering industry, construction, retail trade, services and consumer confidence – dipped to 67.0 from 67.3 points in October, with sub-indices for service businesses such as restaurants, hotels and software providers at six-month lows. [email protected]