The Need for an Entrepreneurial Ecosystem
I participated recently in an entrepreneurial educational field trip to Athens that is organized by CIIM’s Entrepreneurship and Innovation Center (ENTICE). This is part of a series of educational field trips that CIIM’s organizes every year (includes a second entrepreneurial field trip to Tel Aviv). The purpose of the trip was to visit various organizations (stakeholders) that makeup the entrepreneurial ecosystem in Greece as well as various successful start-up companies and entrepreneurs. Given the current state of the Greek economy and the problems that it has been facing for many years, my expectations were very low. To my surprise though, I discovered that Greece (yes, Greece!) has a well-functioning entrepreneurial ecosystem that promotes and supports innovation and the creation of new businesses that are so vital for the country.
Greece’s Entrepreneurial Ecosystem
The programme included visits to institutional organisations promoting the creation of the entrepreneurship and innovation ecosystem (TANEO, PRAXI, Corallia Clusters Initiative), accelerator and co-working spaces (Egg, IQbility), innovation and entrepreneurship funding bodies (Attica Ventures, PJ Tech Catalyst), successful start-up and spin off companies (Pollfish, Covve, i-sieve and Apivita) and a half day of lectures at ALBA Graduate Business School. TANEO (Ταμείο Αανάπτυξης Νέας Οικονομίας) is a Greek state-sponsored and privately funded, independently managed “fund of funds” that uses its funding to invest through venture capital funds in Greek start-up companies. PRAXI/HELP-FORWARD Network, on the other hand, is a national technology transfer organization that aims to transfer knowledge, promote innovation and entrepreneurship, and improve competitiveness of Greek companies by linking research institutions with the industry. Corallia Clusters Initiative is an organization that was established to develop and manage innovation clusters in specific sectors and regions of the country with the aim to establish a competitive advantage for the participating players. Egg (enter-grow-go) as well as IQbility are incubators/accelerators with the role to identify, incubate, and accelerate the development of high-potential start-ups in Greece. Attica Ventures and PJ Tech Catalyst are venture capital funds that draw their money either from private institutional investors (banks in this case) or from EU structural funds and their role is to identify, invest (finance) potentially successful start-ups by acquiring an equity stake in them with an exit plan usually in 5-7 years.
Lessons for Cyprus
We should draw lessons from the setup of the Greek entrepreneurial ecosystem (as well of course from the Israeli one). My humble opinion is that President Anastasiades should include it in his agenda (as another area of collaboration) during his current discussions with the Greek-Israeli Prime Ministers and ask for help and guidance. The statistics provided at the moment for Cyprus on innovation and entrepreneurship are not encouraging. According to a recent study by EY Cyprus (Innovation and Entrepreneurship Dynamics, September 2015), Cyprus was amongst two member states of the European Union that exhibited a declining innovation performance in 2014 (Innovation Union Scoreboard 2015), and has be reclassified downwards from “innovation follower” to “moderate innovator”. The level of our innovation index is now well below the EU average. Another interesting statistic in this report is the percentage of the country’s GDP that is used for Research and Development (R&D). For 2013, this is at 0.48% (or €86.1m in real terms), which is amongst the lowest rates in the EU. Reading the full report, I came to the conclusion that although there are some individual, scattered efforts from participating stakeholders (government, private organizations and networks, academic institutions, etc.) the effort must be coordinated and needs a greater support from the government and the business community. I should mention here that CIIM together with Bank of Cyprus has launched the IDEA programme (Innovate-Develop-Excel-Accomplish) last year to identify, support, incubate, and accelerate innovative start-ups with a global outlook. Many more of these efforts though are needed if we want our youth to enter this field and become entrepreneurs. Promoting innovation and entrepreneurship creates a more competitive environment, promotes growth, creates new jobs, and helps to increase the foreign direct investment in the country.
The writer is an Associate Professor of Finance at Cyprus International Institute of Management (CIIM) and the Director of the MSc in Financial Services.
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