The extreme natural phenomena that hit our country have caused incalculable damage to businesses, production units, agricultural production, households and infrastructure. Both the large fires of the summer and the recent catastrophic floods, due to the bad weather Daniel, proved in the most dramatic way that climate change is here and can cause serious damage to the Greek economy and business by causing market dysrhythmias, sending prices soaring but also by emptying the shelves of basic food items.

Meanwhile, there are continuous checks by DIMEA auditors both in Thessaly and in the rest of the country in order to prevent the phenomena of profiteering while, especially for Thessaly, supermarkets and electrical goods and furniture chains have been asked to offer discounts of at least 20% to consumers on food, basic necessities, furniture and electrical goods. The levels of auditors also check compliance with the legislation regarding the maximum selling price for bottled water and the ceiling on the gross profit margin for both food and fuel and throughout the chain of the production process.

At the same time, food inflation has remained for several months consistently high and at a double-digit rate (10.7% in August), while new price increases are expected due to reduced production and the expected increase in imports.

“We are going through a prolonged period of instability, where the only constant is constant upheaval. Upheavals in the global economy, geopolitical balances and trade, supply chains, the labor model and more. In this environment, businesses are faced with a number of immediate challenges, such as the economic slowdown, high inflation and its effects on consumer spending, energy costs and high interest rates – challenges that, in themselves, constitute a extremely demanding agenda that requires immediate answers” points out the managing director of EY Greece, George Papadimitriou.

On the other side of the spectrum, according to him, are the increased demands of a broad group of stakeholders for decisive action to mitigate climate change and ensure sustainable development – something, most emphatically recalled, by the dramatic recent events with the floods in Thessaly and the fires all over Greece. Contrary to what many previously believed, responding to this social demand is also an opportunity for businesses, as it can contribute to their development, as confirmed by the recent EY Greece survey, Sustainable Value Study Greece 2023. At EY , this is called “value-led sustainability”, i.e. sustainable development resulting from policies designed with the aim of creating wider value, for the planet, society, workers and consumers.

Focusing on inflationary pressures, Mr. Papadimitriou notes that in Greece in recent months a gradual de-escalation of inflation has been observed. “As the Eurostat data showed for August, inflation in our country was almost two percentage points lower than in the Eurozone, but I do not believe that we will have a corresponding de-escalation of pressures in the short term, as the challenges are, first of all, multifactorial – just look at the effects of the ongoing crisis in Ukraine, for example. The increased dependence of our country on imports also makes it more vulnerable to these pressures and that is why we see the persistence of accuracy phenomena. We should, of course, also look at the effects of recent natural disasters,” he points out.

At the same time, he emphasizes that “in addition to soaring energy costs, we are facing shortages of basic raw materials and electronic components, increases in grain and other food, rising interest rates and a ‘tight’ labor market. Obviously, this is something that affects the competitiveness of businesses, increasing operating costs, squeezing profit margins and hitting their liquidity, which in turn feeds through to the market.” According to Mr. Papadimitriou, in such an environment, the companies that will maintain their competitiveness will be those that will “bet” on their holistic transformation – on the utilization, mainly, of new technologies, on their energy transition and the redesign of the chains their supply. “And of course, we must not forget that the honest attitude towards the consumer and the immediate response to his special needs and expectations is in itself an advantage over the competition” he emphasizes.

Great challenges for the economy and businesses

EY monitors the evolution of the attractiveness of the country as an investment destination, through the annual survey, Attractiveness Survey Greece, which records the opinions of the global investment community. The findings of this year’s survey, the fifth in a row, will be announced at the beginning of October and will, for one more year, be of particular interest. “What I can tell you today, as a general observation, is that the image of the country, but also its actual performance, has shown progress over the last five years, despite the unfavorable global environment. Greece has important comparative advantages, such as the quality of life, its human capital, its infrastructure, but also its geographical position as the south-eastern gateway of Europe, at a time when large companies are reviewing their supply chains” says Mr. Papadimitriou . However, he notes that “the battle to attract investment is fierce and there is no room for complacency. We still have areas that need further improvement and we need to step up our efforts, especially in the three areas that have a special weight in investment decisions: human resources skills, the pace of digitization of the economy, as well as policies for sustainable development and climate change”.

For their part, businesses must remain focused on the big trends that appear to have a long-term impact on society, the economy and the business landscape. “I am referring in particular to the stake of digital transformation, in all its ramifications, even touching on the reskilling/upskilling of human capital. Here, it is critical to focus and invest in digital technologies that fundamentally change the market, such as artificial intelligence. Evolving at breakneck speed, AI has emerged as a venture capital and catalyst for growth and competitiveness, leading to new business models, new products and even new ways of working. And we’re talking about a “revolution” that’s not strictly about business, but we’re seeing it even in our daily lives, with how accessible, for example, generative AI has become to each of us, at the push of a button ” emphasizes Mr. Papadimitriou.

At the same time, the transformation of Greek businesses becomes an imperative and a condition for them to be able to develop dynamically and fulfill their role as a driving force of the recovery of the Greek economy. “Many talk about transformation and think – mainly or even exclusively – about digital transformation. The use of digital technology and its integration into every aspect of the organization’s operation is, obviously, a condition of survival for businesses. At EY, however, we perceive transformation as something much broader and unified, which touches almost every aspect of the organization and operation of organizations and is based on three pillars: the first is people, who must be at the center of every transformation, the second , the rapid and effective utilization of technological solutions and, the third, the development of innovation at scale” underlines the managing director of EY Greece.

The vast majority of Greek businesses, according to him, are small and medium-sized, which creates special needs for transformation, thus a more strategic targeting of areas that can give them competitive advantages. “We believe that businesses must approach their transformation holistically, to bring real results. Fortunately, there are several European and domestic financing programs today, first of all the Recovery and Resilience Fund, that support this transformation, which Greek businesses should take advantage of. In order to be able to talk about “Greece 2.0”, it is necessary for the entire Greek business to upgrade to “Business 2.0”, he points out.

But what steps must be taken in order for businesses to win the difficult battle of extroversion, innovation and growth? According to Mr. Papadimitriou, the issue of extroversion is one of the biggest bets for Greek businesses and the economy. The low participation of exports in the GDP is one of the pathologies of the Greek economy and, combined with the fiscal deficits, one of the main factors that led to the economic crisis of the previous decade. Since then, strides have been made in the right direction, but much remains to be done.

As the managing director of EY Greece explains speaking to APE-MPE, the export battle requires investments in quality, innovation, human resources, product and service quality. One of the main reasons for the country’s low export performance is the small size of Greek businesses. Only if they acquire what we call a “critical mass”, will they be able to strengthen their competitiveness, invest in innovation and have our exports acquire higher technological content and greater added value.

“Business growth, extroversion and productivity growth can create a “virtuous circle” that will strengthen the country’s performance. Fortunately, we have many examples of Greek companies that have followed this path, with excellent results, and we have to use them as points of reference” affirms Mr. Papadimitriou and adds: “I believe that, as in all areas of our lives, we need examples of excellence that can serve as a source of inspiration – especially in such a demanding age. And in entrepreneurship, therefore, we must highlight and reward excellence. All of the things we discussed earlier – the transformation of the economy, the creation of long-term value, innovation, extroversion, competitiveness – require entrepreneurs with vision, a passion for creation, a willingness to take risks, an understanding of the great challenges and changes of our time, but also awareness of their social and environmental role. It is precisely these model entrepreneurs that the institution of the Greek “Entrepreneur of the Year” wishes to highlight, which again this year EY Greece has the pleasure of organizing in our country, and I would like, from this stage, to invite those who believe that they respond to this role, to submit their candidacy as soon as the process opens in the next few days.”