Local business landscape too fragmentary

Local business landscape too fragmentary

A woman shops for groceries at a store in Athens, Greece. [AP]

Very small companies, employing no staff other than the owners and operating in low-productivity industries, form the backbone of the Greek economy.

Retailers, catering entrepreneurs and freelancers occupy a large part of the domestic business map while representing a form of entrepreneurship that usually has a limited degree of extroversion and is quite vulnerable to crises.

Preliminary data from the Hellenic Statistics Institute (ELSTAT) on business demographics in Greece showed on Thursday that in 2020, when the coronavirus pandemic began, the number of active businesses surpassed 1 million, rising to 1,012,019 from 984,001 in 2019. Almost six out of ten companies – namely 595,378 – had no employees – i.e. were run by the owners themselves.

Approximately 321,156 companies employed between one and four workers, while 49,340 employed five to nine workers. The figures above show that 95% or 965,874 of all active businesses employ 0-9 people – ie very small businesses.

These data once again highlight some of the problems facing Greek entrepreneurship that are not a result of the crisis but are timeless. Greece has for many years had a large number of very small companies that are not very productive, have a rather limited degree of extroversion and are lagging behind in terms of technology and innovation compared to other European countries. Typically, companies of this size are unable to make large productive investments, especially in times of crisis, while operating in low value-added industries where they cannot get a foot on the ladder of competitiveness.

Although the number of subsidiaries of foreign companies operating in Greece is significantly small – considering all companies operating in the country – their contribution to the Greek economy seems to be crucial. According to ELSTAT data, these companies accounted for only 0.5% of all companies in 2020, but their turnover reached 46.1 billion euros in the same year, which is 19.4% of the total turnover. In 2020, a total of 3,691 such companies were active, employing almost 8% of their total workforce in their Greek operations in the same year.



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