Innovation, a vehicle for changing the production model

By Endeavor Greece Jan 11, 2024

The start-up ecosystem in Greece and developments in artificial intelligence were, among other things, at the center of the discussion held between Prime Minister Kyriakos Mitsotakis and Neil Reimer, co-founder of Europe's largest investment fund, Index Ventures, in the context of an annual Christmas event held organized a few days ago by Endeavor Greece.

Artificial intelligence , the performance and growth prospects of the Greek economy, innovation support policies, as well as the presence of an emerging startup ecosystem in Greece were, among other things, at the center of the discussion held between Prime Minister Kyriakos Mitsotakis and Neil Reimer, co-founder of Europe's largest investment fund, Index Ventures. The discussion entitled " Greece and the world in 2024 " took place in the context of an annual Christmas event organized a few days ago by Endeavor Greece and which was attended by personalities from the fields of entrepreneurship, investment, and the political scene.

The startups

“There is already an ecosystem. Therefore, most of the pieces are in place as far as the community of people active in the business ecosystem is concerned. We have changed the laws and regulatory framework to make it easier to return to Greece with specific tax breaks. I think the stock options system has made a big difference in aligning our tax regime with, essentially, common practices in the startup world. The regulatory framework has been largely simplified. It is easy to establish a company in Greece. The digital government helps a lot in terms of interaction between companies and government agencies. We have not yet reached the desired point, but it is much easier to establish a business in Greece today", points out Mr. Mitsotakis, talking about the ecosystem of start-ups that is developing in our country.

For his part, Neil Reimer positively assesses the stock options system that Greece has adopted, expressing the opinion that this should be further strengthened. “Importantly, you don't tax stock options at the time they are granted, which defeats the incentive of a stock options plan. Well, this is very important", he estimates, pointing out that "by the way, one thing that I think will be really interesting when you refer to scaleups, would be to work with some important EU states, so that you can transfer these systems in all countries. Because if someone sets up a business here and then wants to set up something in Germany or the UK, it would be unfair for those workers not to have the same tax treatment as in Greece or something similar. And obviously it could be mutual, right?” he wonders. "So employees will be able to move across these borders and not lose the benefits of a well-structured stock option program," he says.

Comparative advantage

Referring to the advantages of Greece, Mr. Mitsotakis also focused on the talent that the country has. "If you look, though, at what our comparative advantage is, I think it's largely the pool of talented people and the fact that, despite the difficulties, we have a good public university system that produces graduates who are active and much more informed about employment opportunities in the world of start-ups'. "What I find fascinating is that technology clusters are being developed not only in Athens or Thessaloniki, but also in cities like Ioannina, for example, Patras or Heraklion. That in itself is a very very interesting development. Of course, it is no coincidence that these ecosystems are usually associated with good quality universities. Another advantage that Greece has, of course, is its dispersion".

The opportunity

Neil Reimer spoke about Index Ventures, the venture capital founded in 1996 and which has grown into the largest in Europe, recalling the goals he had set when starting his venture. "It was a huge opportunity and it was very ambitious of us to think, in 1996, that we could make our mark in the venture capital world." "We set our goals to compete with the best companies in the world, which were then located in Silicon Valley. Because we decided that if we were just trying to be the best in Europe or the best in Switzerland, Germany and Austria it wouldn't matter, because at the end of the day the funds that we invest, the institutions that grant us funds are looking for results that compensate them for the enormous risk they are taking." Making an assessment of that time, he says that "in retrospect I find that I am happy that we started then because we learned a lot, and in that period we saw huge changes in Europe. Back then we started all our meetings with a slide explaining what venture capital is." Now this is not necessary. "Now people understand that they are part of the financial system. Venture capital plays an important role in many portfolios, but mainly promotes innovation, job creation and business creation in many economies. And we are very pleased to see this transition, this transformation taking place in Europe. But we still recognize that it's really only the beginning."

I find it fascinating that technological clusters are being developed not only in Athens or Thessaloniki, but also in Ioannina, Patras or Heraklion.

Asked about the development of European innovation ecosystems, he emphasizes that creating a resilient innovation ecosystem is a conscious choice for countries that strategically place technology, innovation and business creation at the core of their economy. It takes a lot of energy to activate, but once this momentum is started it becomes self-sustaining.

The Greek economy

"It was a very pleasant surprise that the Economist ranked us as the best performing economy, the best performing market among all OECD countries, looking at various indicators. I believe it is an important confirmation of the important work we have done in terms of transforming the Greek economy and placing it on a sustainable development path, while at the same time ensuring that we manage public finances in a responsible manner." This was pointed out by Mr. Mitsotakis when speaking about the prospects of the Greek economy and when asked by Panagiotis Karabini, managing director of Endeavor Greece, about the choice of the "Economist" magazine to rank Greece in first place in terms of performance for 2023. "Of course I believe that part of the success of the Greek economy is also related to the fact that we have achieved diversification beyond certain sectors, which of course are still very important for Greek development, such as tourism, and we have turned to new sectors. I believe that the startup ecosystem and the investments we have made in new technologies contribute significantly to changing the production model of the Greek economy."

Artificial Intelligence

"I do believe that artificial intelligence offers an opportunity," says Mr. Reimer, as the discussion turns to artificial intelligence and the opportunities or challenges it may bring. “However artificial intelligence is the kind of technology that appears every, I wouldn't say a decade, but many decades. It also levels the players in the market. We have a lot of companies in our portfolio that are doing very well, but now they're worried because this technology has come along that can eliminate the need for what they've built and sell. And of course they try to ask themselves how can we renew ourselves from the ground up? But it's hard to do that when you've already launched a product or service and have hundreds of millions of dollars in revenue, and your company already has thousands of employees," he says. "You're committed to the direction you've set, and someone can come out of nowhere with three people and a prototype and overtake you and everything you've built up to that point," he says of the arrival of artificial intelligence.

Speaking about the applications of artificial intelligence, Mr. Mitsotakis, in turn, says that "the opportunities are countless, from tackling tax evasion to applications related to civil protection and the early detection of fires. The point is: let's look at the policy areas that can really be fundamentally changed by artificial intelligence and try to implement pilot applications, apply this cutting-edge technology to achieve better results in public policy.”

This article was written by Kathimerini. You may find the original article here.