The “paradox” of Greek businesses - High number of small and medium-sized enterprises, but low productivity
Greece ranks among the EU countries with the highest number of small and medium-sized businesses in relation to population, but at the same time their productivity is the lowest in the EU. This problematic feature of the Greek economy, highlighted time and again by various studies, is also cited in Alpha Bank's Economic Developments Bulletin, with data from the European Commission's annual report on SMEs.
As analysts point out, low productivity is a result of the very small size of Greek enterprises, as well as the fact that they operate in sectors with low knowledge and technological intensity. Therefore, the challenge is to increase their size, move into new sectors and expand investments in technology.
"Productivity growth can come through investments in capital equipment, combined with technological and digital upgrading that accelerated after the outbreak of the pandemic. To this end, it is essential to use development tools, such as the Recovery Fund, and to improve Greek SMEs' access to capital and financing," the analysis says.
The bank also showed that SMEs are present in the financing of the Recovery Fund: 265 loans for these businesses have already been contracted for a total budget of 2.79 billion euros, while they have received 1.4 billion euros in subsidies. Last year, only 52.4% of Greek SMEs had at least a basic level of digital intensity, compared to an average of 72.9% in the EU, figures that place Greece in last place.
Small and medium-sized enterprises in Greece represent 99.9% of the total non-financial sector, 84.7% of employment and 62.8% of real gross value added. According to 2024 data, for every 1,000 inhabitants, there are 79 SMEs in Greece, compared to an average of 58 in the EU.
"Despite the successive crises of recent years, these businesses have strengthened both in absolute numbers and in terms of employment and production, and it is estimated that the upward trend will continue in 2025," the report states.
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