2016 | Jan
The Greek economy is characterised by long-term structural problems, whose main characteristics are a gradual loss of productivity and competitiveness in the primary and secondary sector, the lack of a clear production model and the lack of export orientation. Primary and secondary sector contribution to GDP were gradually replaced by retail economic activity and a mistaken sense of financial prosperity, based on favourable financial conditions, mainly in the early 2000s.
The impact of the recent financial crisis both in Greece and in many other European countries highlights the urgent need for improvements in the business environment and the institutional framework affecting business competitiveness. In addition, there is a need to address social challenges in health and the environment, to redouble the efforts to tackle unemployment -mostly youth unemployment- and the increasing drain of the population’s most dynamic groups (General Secretariat for Research and Technology, Ministry of Education, 2015).
From 2010 onward, in spite of a deep recession, the Greek economy has been in a process of correction of the various internal and external imbalances which accumulated as a result of chronic structural problems and many failures in the implementation of fiscal adjustment programmes. The international financial crisis highlighted the chronic problems of the Greek economy and financial indicators deteriorated. The negative development of key aggregate country indicators is also reflected in the development of Regional economies.
The country generally lags behind in innovation development. It holds the 19th position in the relevant charts among 27 Member States, deviating significantly from the EU average (Innovation Union Scoreboard, 2013). However, the Greek Research and Innovation System (R&I) also presents strong performance points, such as: good performance in co-financed EU Framework Programmes, significant Greek representation in international research networks and projects of the European Roadmap for Research Infrastructures, a strong Greek research community abroad, high-quality human capital and high performance of public research institutions and the private sector as well as Greek presence in the field of scientific publications (above the EU average). These advantages, however, have not been utilised to help overcome structural weaknesses of the economy and to integrate research activity in production processes by improving the country’s overall performance compared to that of other EU countries (Ministry of Development and Competitiveness, 2014)
Research and innovation as a priority for 2014-2020
Within this context , the restructuring and strengthening of Research and Innovation is expected to become a vehicle for addressing global and national challenges and a means of increasing productivity and economic growth, by improving the traditional ways of conducting business and financial activities (General Secretariat for Research and Technology, 2015).
The European Union is firmly oriented towards economic and social development based on knowledge, human resources, research and innovation. According to the “Europe 2020” strategy (European Commission, 2010), adopted in 2010 by the EU’s 27 member states, the vision for a social economy of the market in Europe during the next decade is based on three, interrelated goals:
- Smart growth, through a knowledge- and innovation-based economy,
- Sustainable growth, promoting a competitive economy that will utilise available resources effectively and will reduce the impact on the environment (carbon dioxide, etc.),
- Inclusive growth, which will promote a high-employment economy and lead to social and territorial cohesion.
Within the framework of the “Europe 2020” strategy, the European Commission adopted a flagship initiative to create an ‘Innovation Union’ (European Commission, 2011), to strengthen Europe’s capacity to achieve smart, sustainable and inclusive growth while bridging the gap between science and the market, so that research results may be converted into new products and services. This initiative led to the birth of the concept of Smart Specialisation in research and RIS3 innovation (European Commission, 2015), allowing countries and each Region to independently focus on supporting specific categories of investments that will provide competitive advantages to their economy.
This place-based approach takes into account the specificities of different geographical regions, based on their characteristics, their potential and the route to be followed for economic development. In the context of Smart Specialisation, the Strategy for Research and Innovation links research and innovation with economic development in new ways, such as “business discovery” »and prioritising, following close cooperation with country authorities. It aims to reorganise traditional sectors by switching to high added-value activities, new markets or value chains . Additionally, it aims to modernise existing businesses through the adoption and diffusion of new technologies, to diversify them through technology and to develop new economic activities through innovation, as well as to explore new forms of innovation, such as open and user-friendly innovation, social innovation and service innovation.
The “Smart Specialisation Strategy” was introduced in the EU Cohesion Policy (European Commission, 2011) as a basic requirement, meaning an “ex ante conditionality” (European Commission, 2014). If this requirement is met, Member States will obtain financial support for investment in research and innovation through the European Structural and Investment Funds (GRNET) under Regulation (EU) No. 1303/2013 and in particular the European Regional Development Fund (ERDF) under Regulation (EU) No. 1301/2013. In order to achieve a competitive advantage Countries and Regions are asked to set priorities and to formulate national and regional research and innovation strategies. . An important element in the choice of activities is the presence or creation of a critical mass (or dynamics) in businesses and knowledge-generating bodies.
Brief economic profile of the Region of Attica
Attica is the largest Region of Greece, concentrating more than a third of the population and accounting for over 40% of the country’s GDP. Attica is also the most important hub for Research, Technological Development and Innovation (RTDI) in Greece, accounting for over 60% of GERD (gross domestic expenditure on research and technology).
Up until 2008, the Region of Attica presented satisfactory growth per capita (p.c.), as did the country on average. As evidenced in Figure 1, when the first effects of the global economic crisis appeared in Greece in 2008, there was a decrease of per capita GDP (PPS) in the Region of Attica, at an average annual growth rate of -3.9%, less than the country’s rate (-4.7%). This is directly connected with the metropolitan character of the Region. During the same period, per capita GDP (PPS) increased at an EU level at an average annual rate of 0.3%.
The region is definitely a focal point for services. Significant sectors, other than commerce, are financial services, transport, information technologies, health and social services, as well as leisure and recreation. The manufacturing sector is dominated by low/medium technology intensity sectors such as the food industry, metal products, chemicals – pharmaceuticals, textiles and shipyards, where productivity growth is mainly based on the acquisition of new technology and the substitution of manual labour. At the same time, dynamic and growing industries such as ICT, microelectronics and relevant applications seem to be integrated in international value chains.
The sharp decline in private investment after 2008, due to the crisis, has reduced the already low levels of private research and innovation expenditure within the Region. Reduced liquidity in the private sector, combined with the limited funding provided by the banking sector to private investment, especially to new businesses, significantly reduced resources available to support innovative enterprises.
Figure 1: Development of per capita GDP (PPS)
In terms of regional governance, innovation and RTDI activities were not (at least until the programming period 2007-2013) a separate priority area. They were part of the overall strategy implemented by the General Secretariat for Research and Technology. In the programming period 2014-2020, and on the basis of the new architecture of the National Partnership Agreement 2014-2020, emphasis was placed on illustrating specific regional needs and advantages of the research system in Attica, on establishing a regional mechanism and on targeted financing actions and projects, mainly through the implementation of the Smart Specialisation Strategy.
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