Mapping Greek entrepreneurship during the Crisis


“Within the bleak and disheartening environment that prevailed in the Greek economy during the
last decade, in a part of the business world, an ‘unexpected miracle’ is taking place:
the emergence of a new entrepreneurial paradigm which focuses on innovation and exhibits
a strong export orientation. If this paradigm keeps growing it may have the potential
to upgrade the country’s production model and redirect it towards high-added value goods
and services. Under that perspective, the crisis has in a way been a blessing in disguise through
unleashing creativity”, argues Ioanna Sapfo Pepelasis*, Professor Emeritus in the Department of
Economics at the Athens University of Economics and Business, mentor at ACEin and creator of
TAKEOFFGREECE (2014–2018), an initiative for the enhancement of 40+ entrepreneurship


by Harry Savvidis

She has been a pioneer in identifying, studying and understanding that new entrepreneurial paradigm, and mapping the startup ecosystem during the Crisis. Since the early 2000s she heads a research project at AUEB on the long du- rational study of Greek entrepreneurship and institutions and interconnections with economic growth. We met with her to discover some features of her recent re-search on the new entrepreneurial para-digm and the startup cohort born during the Crisis.


Here you can read an executive summary of the research mentioned in the interview. Research is ongoing and the original data base has been widened to 300 initiatives




You are an economic-business historian, so how come you turned to the study of the present?

My historical apprenticeship in the study of the long duration and new firm formation in particular taught me, among other things, to detect the timing and substance of shifts in entrepreneurial behavior and the significance of metrics. As we economic historians well know, crises act as catalysts for change. When the crisis hit Greece in 2010, in part by intuition, my immediate response was to begin to carefully observe developments in the contemporary world of enterprise and search out for the novel. I soon became passionate with the emerging new enterprise culture and startup ecosystem. Αn emblem of hope within the dark environment of a shrinking GDP, a quickening in de-industrialization and a massive brain drain. I came to believe through my re-search that these two new forces have the potential to act as drivers elevating Greece to a new path of economic growth! I am fortunate in that in this journey which started in 2015 I have had wonderful collaborators and coauthors equally dedicated and at the moment this ongoing exploration is expanding and including more academics.


What was the starting point of this new research journey?

It was a research article written with Dr. Aimilia Protogerou (NTUA) “A Break With the Past?” (Managerial and Decision Economics, 2018), in which we studied 21 business success stories during the Crisis and argued that a new entrepreneurial culture was in the making, challenging pre-2009 established ideas and practices a.k.a. the “traditional model” of entrepreneurship. According to this article: “The continuities as understood from our personal research and that of others in the existing literature are a mixture of the prevalence of: micro-business, family capitalism, introversion, unproductive entrepreneurship, low-level entrepreneurship, shallow entrepreneurship and rent-seeking entrepreneurship”. Of course it is acknowledged that there have been positive exceptions, like intercontinental shipping and industrial pioneers who, on the basis of innovation and extrovert entrepreneurial strategies, created Greek-based multinationals.


During the last decade an increasing number of young Greeks appeared in international lists of entrepreneurial and innovation excellence. Has some- thing changed in the attitude towards entrepreneurship?

For the first time ever “innovative entrepreneurship” is becoming a buzz word and the social status of the entrepreneur has considerably improved. According to a large-scale recent survey in more than 30 institutions of higher education across the country [EY, AUEB, Endeavor Greece & Hellenic-American Chamber of Commerce (2015). The Entrepreneurship through the Eyes of Young People: Something is Changing. Survey Report, Athens (in Greek)], Greek students have a positive perception of entrepreneurship. This is probably related to consistently high unemployment rates to persistently high unemployment and economic stagnation. Moreover, they appear to be challenging the established introvert development model. The profile of their potential business ventures is focused on the use of technology, innovation, and extroversion with an emphasis on the country’s competitive advantages.


Which are the main differences to you between the traditional dominant en-trepreneurial paradigm and the one arising after the crisis?

The traditional model has three distinctive but interconnected elements: inward looking, largely rent-seeking and of limited innovative capacity. On the other hand, as it is noted in the article, “the new paradigm appears to be opportunity driven, outward looking with significant export orientation in niche markets including even born global ventures from day one, knowledge-intensive by encompassing specialized technology, market and design expertise and largely innovative.”

Was the appearance of that new entre-preneurial paradigm a result of crisis-induced changes?

The pre-crisis Economic and Monetary Union years, 2001–2008, were times of affluence characterized by easy access to cheap credit for the first time in Modern Greek history, which peculiarly led to bloated imports and crowding out in-novation in local production. There were ample opportunities for quick profiteering through rent-seeking, that is, motivation for unproductive entrepreneurship. The public sector was the employer of first resort as it could guarantee a stable income, crowding out risk-taking and creative entrepreneurship. Then everything changed: The loss of incomes, GDP decrease, and the rise in taxation led to a marked drop of local demand. As the state sector shrank in size, it could no longer act as a patron for local clientelistic business, and rent-seeking practices. Excruciatingly high levels of unemployment resulted in brain drain and, for the “brain-remain” population, a shift towards productive entrepreneurship by ex-professionals or young university graduates.


So that new outward-looking entre­preneurial paradigm is a “child” of the crisis?

The emergence of the new paradigm is also related to the maturation of long-term trends, unrelated to the crisis. Again I will quote from the article: “The building up of the internet revolution in Greece (enhancing internationalization and the initiation of e-commerce) and the huge rise in university graduates following the post-junta era (the OECD has recently placed Greece among the 10 ‘smartest’ countries in the world in fields such as mathematics, physics, technology and engineering). This new pool of human capital is more inclined to turn to entrepreneurship in order to express their creativity than past generations, and this fact has led to an upgrading of how Greek society perceives entrepreneur­ship today. Thus, when the crisis broke out, Greek society was at a point whereby the shift from inward-looking enterprise had the preconditions to turn to extro­vert enterprising and give birth to a new ‘business elite’, which is primarily based on new knowledge and innovation and is oriented (sometimes right from the start) to niche markets in the global economy.”


What was your next step forward in your research on the new entrepre­neurial ecosystem?

The next phase was to fill an impor­tant gap in the academic literature: to chart and analyze the emerging startup ecosystem in Greece. I set up with my team a new research project at AUEB, focusing exclusively on metrics regard­ing incubated startups. By this point, my accumulated expertise on using metrics of firm creation to gauge the supply of entrepreneurship in the long duration, gave me the required perspective and tools to embark in this new direction. In a nutshell I extended the study of the past into the “now” and specifically the critical Crisis years, having in mind that such re­search could be usefully employed in the formation of policy recommendations. Thus, with Ioannis Besis (AUEB and Ath­ens Stock Exchange) and assistance from AUEB students, we created the largest and most detailed data base up to today on the startup ecosystem in Greece dur­ing the Crisis. We analyzed more than 250 young enterprises (and their 443 found­ers), that were “born” in 7 prominent incubators in Athens, during the crucial years of 2010-16. We examined 16 socio-economic indicators, about the founders (e.g. age, gender, education, experience abroad) and the firms (e.g. geographi­cal location, sector, technology, type of good offered, customer base).



Which are the characteristics of the typical startupper?

He (mostly, as females appear sporadi­cally in family-based firms, in which the main figure is a male relative) is Greek in origin, young (usually in his 30s), well edu­cated (a degree in engineering) and internationalized in outlook. He surrounds himself with highly qualified manage­rial personnel and has an important back­ground in terms of financial and human capital. Sometimes he is a scion of some business family – actually this is the only characteristic that the new innovative and extrovert paradigm shares with the main­stream traditional way of enterprising: the presence of family in business, though through a different context (mainly a backup force).


What about the new firms – which are the characteristics of the startup eco­system?

Most of the firms of our sample had their headquarters in Athens (80%), but it was also the case that a little over one in ten was based abroad. The top sec­tors of startups in order of importance were: hardware-software; the creative industries; agriculture and leisure. One in five startups was high tech in terms of products and one in four was high tech in terms of process of production. The great majority of startups offered services and nearly one third had customers abroad. The largest category of customer type was B2C but B2B was quite large also.


Did you come across any important lessons for policy makers?

Certain findings are rather informative for policy makers. We identified stronger links with academia in the subcohort of the firms that eventually survived – we also found out that there was a larger presence of female founders in this group. Also, policy making should be informed by the fact that agricultural startups had a low survival rate and this is something the country cannot afford given the huge trade deficit in food. However our main finding was that this ecosystem is highly flexible and able to detect and unlock new opportunities.


As for your work on the historical long duration what is the most important les­son do we learn?

The lessons from the study of the history of entrepreneurship in the long duration is that the Greek case, due to historical, geographical, institutional factors, can­not be easily explained by theoretical models drawn from the experience of more advanced capitalist economies. The explanation is a long and complex story and this has been a central element in my academic work as an economic and business historian whose central commit­ment is to understanding the root causes of the economic “failures“ and “success­es“ of Greece in the past at both a micro and macro level.

* Ioanna Sapfo Pepelasis (Born in the USA), a graduate of Harvard and the LSE is a Professor Emeritus in the Department of Economics at the Athens University of Economics and Business (AUEB) and a visiting Professor at the University of Athens. She introduced the use of new institutional economics in Greek business history in the 1990s. She has co-edited Entrepreneurship in Theory and History (Palgrave, Macmillan 2005) and Country Studies in Entrepreneurship – A Historical Perspective (Palgrave Macmillan, 2006) and Diaspora Entrepreneurial Networks: Four Centuries of History, (Berg, 2005) and published articles in several international edited volumes and prestigious international refereed journals. She is also the initiator, Co-founder of TAKEOFFGREECE, an initiative for the support of 40+/60+ start-uppers in Greece. Currently she heads a research project at AUEB on the study of Greek entrepreneurship/new firm creation/ startups in the past and during the ten year economic crisis. She is also involved in coauthoring econometric based research on past and present entrepreneurship.