Conclusions of the Hellenic Innovation Forum 1st Conference: ‘Shaping an Innovation Policy for Greece’

Abstract

Greece is in a prolonged economic downturn facing extreme austerity measures. Most enterprises

are still oriented towards low added-value activities and state support. Developing a knowledge-

based economy that will enhance competitiveness and create sustainable growth and jobs is an

option that needs to be seriously considered. The objective of the Hellenic Innovation Forum 1st

Conference was to envision such an ambitious, innovative future for Greece and identify the steps

needed in that direction.

Greece has a number of assets: (i) skilled work force, (ii) significant national research activity, (iii) a

number of excellent researchers and (iv) distinguished Diaspora. Also there are niches of successful

high-tech business initiatives from the private sector, as well as clear indications of a more general

shift towards innovative entrepreneurship.

Τhe current European policy framework creates extremely favourable conditions, as well as

opportunities to further improve scientific and innovation performance. The Greek authorities

maintain that they are well aware of these opportunities and are committed to exploit them. Still,

the main challenge for Greece is to develop an effective national strategy for innovation, building on

the country’s strengths and implementing the necessary structural reforms and changes based on

international best practices. Key steps in this direction are:

the creation of an appropriate structure that raises the institutional profile of Research and

Innovation, following the example of most developed countries, placing innovation at the

highest level of governance;

the reorganization of the currently fragmented research system, with the objective of

developing Innovation Ecosystems, where the three key components - industry, competence

and research centres and dynamic SMEs - work closely together to develop high tech

products addressing the world market;

the development of an independent, excellency and meritocracy driven national research

and education system, with adequate monitoring and evaluation mechanisms that rewards

exceptional performance.

Innovation and entrepreneurship should receive a prominent position at all levels of education, enhanced with technology literacy and vocational training. The Greek academic institutions should follow the successful examples of high-ranking Universities abroad, where professors and researchers are given incentives to found/join high-tech start-ups and students are actively involved in the development of new technologies and applications.

Following the example of leading innovation economies, the Greek government needs to pursue a long-term innovation strategy. This strategy will require sustained attention, regular evaluation and appropriate funding, subject to the present financial circumstances and opportunities from the European Commission. Efficient financial support in selected areas of national importance is a pre-condition for dynamic ecosystems to effectively become the drivers of the new innovation-driven growth model.

It is also crucial for Greece to pursue reforms to improve substantially the business environment,

which will increase the country’s attractiveness to foreign investment. A short term key priority

should be to drastically decrease the administrative burden and introduce measures that will

effectively encourage entrepreneurial innovation. Building an innovation-driven economy is a long

process, requiring significant and continuous effort by all stakeholders involved. The results will be

beyond expectations if the challenge of building a thriving high-tech ecosystem is widely understood

as the means to achieve growth and long-term prosperity.

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Table of Contents

Introduction ..................................................................................................................... 1

The current picture of the Greek Innovation System .......................................................... 1

Greek enterprises are mostly oriented towards low added-value business sectors ....................... 2

Public research has strong international presence but limited links with national economy ......... 2

Top Greek researchers and skilled personnel are more likely to exploit their skills abroad ........... 2

A new approach to innovative entrepreneurship is emerging ........................................................ 3

Conditions for innovation funding are improving ............................................................................ 4

Efforts to remove barriers to innovation-based entrepreneurship should continue ...................... 5

Creating innovative economies: ingredients and best practices ......................................... 5

Innovation ecosystems constitute the key driving force ................................................................. 5

Innovation strategy receives high priority and is based on national/regional priorities ................. 7

Attention has shifted from inputs to outputs of the innovation system ......................................... 7

Innovation goes hand in hand with entrepreneurship .................................................................... 8

Innovation is strongly linked to excellence and meritocracy ........................................................... 8

The broader policy context ............................................................................................... 9

The European innovation policy framework and objectives ........................................................... 9

The Greek strategic priorities for research and innovation ........................................................... 10

International cooperation perspectives ......................................................................................... 11

The vision and the way forward ...................................................................................... 11

Annex: Speakers and topics ............................................................................................ 14

1

Introduction

Designed to facilitate the productive exchange of views between government officials, experts and

innovation stakeholders from Greece and abroad, the Conference focused on Greece’s innovation

driven future. The event was organized in Athens by the Institute for the Study of Labour (IZA) of

Bonn and the Eugenides Foundation. It was supported by the Bodossakis Foundation, Eurobank, the

EU Task Force for Greece and the German Embassy in Athens.1,2

As Greece moves into the fifth year of austerity, it becomes ever more clear that unless reforms are

implemented the economy will not start to grow again. Just cutting costs is not enough. Developing a

knowledge-based economy, that will create sustainable growth and jobs through added-value

products and services, is an option that needs to be seriously considered as was emphasized by

Alexander Kritikos in his opening speech. This was the main theme around which the Conference

coordinators, Professor Alexander Kritikos of IZA and Professor Georges Siotis of the Task Force,

developed the programme. Further, as stressed in the opening speech of Leonidas Demetriades

Eugenides, Greece will emerge from the crisis only if due attention is paid to the basic ingredients of

an innovation-based entrepreneurship, namely: (a) creating conditions to attract and retain the best

scientists; (b) introducing a stable institutional framework; (c) organising public and private sector

research in a rational way; (d) promoting a competitive environment with clear financial rules; and

(e) increasing the quality and level of education and professional training.

The Conference aimed at identifying Greece’s hidden assets on its way to become a knowledge-

based economy and the obstacles that prevent the country from leveraging these assets. Other

major topics included drawing lessons from best practices in innovation policy from other countries,

as well as exploiting opportunities in the context of broader development strategies of the European

Union. Further it aimed at identifying potential areas to initiate or further enhance cooperation

among Greeks living in Greece or abroad and European or non-European innovation stakeholders.

The main objective was to envision an ambitious, innovative future for Greece, followed by

recommendations on the way forward.

This document brings together the main conclusions drawn from both presentations and discussions

in the course of the Conference and aims to present them in a structured way. It starts with an

account of the main elements that characterise the Greek innovation system today. Then it discuses

key characteristics of innovation-based growth, strategies and support schemes towards innovation,

associated best practices and recent developments in the European and national policy context. It

concludes with some realistic targets that could be set in the short to medium term, as well as the

key steps that may lead to their accomplishment.

The current picture of the Greek Innovation System

A comparison between Greece and other European partners reveals that the country lacks a

functioning Innovation System, as demonstrated for example by its ranking in the 19th place out of

the 27 Member States of the European Union in the “innovation performance index” of the

European Commission, far below any other Euro-zone country (Kritikos, 2). A closer examination of

the main components of the Greek Innovation system is needed in order to understand what really

1 The list of speakers and topics of presentations are given in the Annex. The numbering corresponds to the chronological

order in the Conference programme and is used in the text as a reference to key points made by the speakers. 2 The event was attended by around 500 participants.

2

happens and draw evidence-based conclusions. It is in this way that overall performance scoreboards

and benchmarking can lead into sound policy making.

Greek enterprises are mostly oriented towards low added-value business sectors

Starting with the Greek business sector, different speakers pointed out that the large majority of

Greek enterprises are oriented towards low added value activities, with very limited demand for new

knowledge. Minister of Administrative Reform Mitsotakis (3) pointed out that while Greeks have

always been quite entrepreneurial they don’t necessarily have been innovative at the same time. A

study conducted in 2008 showed that the five sectors with the highest numbers of new businesses

were: (a) construction; (b) clothes retail; (c) real estate; (d) accounting; and (e) restaurant & food

retail. Also, the size of enterprises is much smaller compared to other European economies, with

most of them being personally owned or family businesses (Gianousis, 25). Larger enterprises have

counted for many years on public sector procurements, quite often awarded through unclear

procedures and subsidisation. In their large majority, Greek companies have limited, if any, strategic

planning capacities, which, in most cases, can be coupled with an absence of long-term ambitions.

Public research has strong international presence but limited links with national economy

The national research system focuses on basic research and has earned scientific recognition at the

international level on different occasions (Kritikos, 2). Common themes in the presentations made by

the heads of the Greek research centres FORTH (Fotakis, 17), Demokritos (Kanellopoulos, 18) CERTH

(Konstandopoulos, 19) and MAICh (Baourakis, 20) are the following: (a) a very significant production

of peer-reviewed publications in prestigious scientific journals; (b) participation, often in leading

positions, in pan-European and international scientific networks; (c) success rates in obtaining

funding from the European Commission Framework Programmes for Research and Technological

Development that are well above average across Europe. At the same time, effort is placed on

exploiting the outcomes of basic research, with research centres having set up various forms of

technology transfer structures and incubators and signed many research contracts with industry,

including large international enterprises that are active in competitive high-tech fields.

A key observation is that despite the economic downturn, the Greek research centres manage to

survive essentially through competitive funding from the European Commission and private sources.

For some of them, state funding is a fraction of their turnover, as in the case of CERTH, which

receives only 10% of its annual income from the Greek government.

However, the heads of the research centres argued for more consistency and continuity in the

national research policy and more active support. This is because relying mostly on competitive

funding may have long-term negative impact on the ability to produce new knowledge. A

coordinated research approach would also strengthen cooperation among the research centres

around strategic areas. It would also enhance their admittedly low interaction with other regional

and national innovation stakeholders, increasing the beneficial impact that public research should

have on the Greek economy and society.

Top Greek researchers and skilled personnel are more likely to exploit their skills abroad

Evidence of the excellent performance of Greek researchers comes from the number of grants

awarded from the European Research Council (ERC).3 In absolute numbers, ERC grantees with Greek

3 ERC grants are highly competitive, as shown by the very low success rates – typically 10 to 11%, providing generous

funding for ambitious projects submitted by young or established researchers that are awarded on the basis of scientific excellence.

3

nationality show a fair performance compared to their European colleagues (Papazoglou, 35). When,

however, numbers of awards are averaged over populations, Greek ERC grantees do better than

nationals coming from countries such as Germany, France, Italy or Finland and are only slightly

surpassed by British researchers.4 Nevertheless, Greece is singled out as the country exporting more

excellent scientists than is able to keep at home, which, while showing the large potential role of the

Greek Diaspora in strengthening the country’s innovation capacity (Zimmermann, 33), it also leads

into the broader topic of human resources and the related brain drain.

Even though Greece has a very qualified human capital, it ranks first among the European countries

in terms of unemployment of tertiary education graduates (Labrianidis, 34). Moreover, contrary to

most European countries, the unemployment in Greece increases for graduates that have reached

higher levels of education compared to the European average.

These observations suggest a discrepancy between supply and demand for graduates in Greece. The

low demand for graduates is mainly coming from the private sector5, as a result of the limited

interest of Greek companies in knowledge and technology intensive products and services, as already

mentioned.

A further weakness is the low interest paid so far to technical education and vocational training. One

notable exception is the dual system of training for the Merchant Marine Officers, which could serve

as an example for other sectors. The Eugenides Foundation is actively engaged in this area (i) offers

scholarships to graduates of technical schools to pursue technical training in top industries and (ii)

has a very substantial activity in publishing practical training educational material. Also it has carried

out different studies on vocational training needs and the ways these could be better satisfied,

including proposals for new approaches and innovative training methods (Eugenides, 12).

Prospects are not better in the public sector, primarily because of the recent austerity measures

aiming to reduce its size in terms of employment. Over the course of many years there has been

limited support for skilled young talents, as well as lack of incentives for successful careers in the

public sector in general and research in particular. Greece also ranks 19th among the European

Member States in terms of remuneration to tertiary education graduates, with salary levels that are

well below the European average.

To summarise, exceptionally high unemployment rates, unclear career perspectives and low

remuneration are the major reasons why highly specialised human resources leave the country.

A new approach to innovative entrepreneurship is emerging

Developing an ecosystem where high-tech companies could grow is at the heart of the debate

regarding innovation. Greece has a limited tradition, but a huge potential in clustering and other

forms of innovation-inducing networks.

Different recent initiatives are observed in this domain, where the research actors from the private

and public sector have joined forces to develop new collaborative schemes. One example is the

Corallia cluster in the ICT sector, bringing together 120 members, of which 80 companies show a

remarkable exporting activity, very often having global players as shareholders and investors

(Sanchez, 36). Another initiative intends to organise the very active Greek society of biotechnology

and biosciences under the Bionian Cluster, which has set out high performance standards for

4 The per capita ERC data are provided in Herrmann and Kritikos (2013): Growing out of the crisis: Hidden assets to Greece’s

transition to an innovation economy, IZA Journal of European Labor Studies 2: 14. 5 Greece is 26

th among the 27 European Member States in terms of employment share in high tech sectors.

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participating organisations and will be further strengthened through international industrial and

academic collaborations (Chrousos, 39).

There are, also, examples of high-tech companies that grew out of academic laboratories and now

compete at an international level, thanks to very important investments in Research and

Development and skilled human resources. Notable examples are VIORYL, a chemical and

biotechnological company, and Fasmatech, a start-up focusing on Mass Spectrometry and Ion

Mobility Instrumentation, as well as on Research and Development services (Demetriades-Eugenides,

12).

On the topic of innovative venturing, it is important to mention the establishment of a large number

of co-working facilities, in which young engineers and researchers can use existing infrastructure to

jump-start their own businesses. Such infrastructure is provided by the national research centres6

mentioned above and by other public or private institutions. There are currently 55 organisations in

total that support innovation and entrepreneurship (Mitsotakis, 3), including EGG of Eurobank

(Vousvounis, 23) and TEDx Academy (Siropoulou, 21) that offer space, business advice and support

through networks of very experienced managers and consultants.

Also, a number of competitions have been launched to support entrepreneurship, such as “Greece

innovates”, where out of the 21 shortlisted proposals in 2011, 7 teams have already launched their

products in domestic and international markets and 8 teams have signed business deals (Vousvounis,

23). These are clear indications of a shift towards innovation-based entrepreneurship. It is mostly

driven by the very limited employment opportunities offered to skilled young graduates at present

and serves as the basis for spreading out a new culture, paving the way to a larger-scale adoption of

this new business paradigm.

Conditions for innovation funding are improving

Efforts have been made in recent years to improve access to financing for innovative firms. Banks

were not used to provide debt financing to innovative entrepreneurial companies without significant

collateral. This approach is now changing, as the Greek financial institutions have a better

understanding of the way high-tech companies operate and of their needs in their different stages of

development. The banks are now cooperating more closely with innovative entrepreneurs, by

developing customised services including business advice and support to open their networks and

markets (Koulis, 42).

New Venture Capital (VC) funds have been created for early stage innovative companies, making use

of mechanisms and funding under the JEREMIE7 instrument of the European Commission in

cooperation with the European Investment Bank. Main challenges are to (a) further increase the

available funding, which seems to be an option that Greek banks are willing to consider; (b) invest in

other high-tech sectors in addition to ICT where most of the activity has been concentrated so far;

but also to (c) apply the best international standards in innovation funding; and (d) create close

cooperation among the stakeholders, including banks, VCs, managers that will run the new

companies, as well as sector experts (Tzortzakis, 40 - Trachanis, 43 - Pilitsis, 44).

6 A plan to develop a low-cost Metropolitan Innovation Campus in the Athens region was presented by Demokritos

(Kanellopoulos, 18). 7 JEREMIE stands for Joint European Resources for Micro and Medium Enterprises.

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The new paradigm for the investor is not just to provide financing, but also access to markets. Taking

into account that innovation has no frontiers; the key challenge for Greek entrepreneurs and

investors is to find ways to promote innovative products and services at a global scale.

Efforts to remove barriers to innovation-based entrepreneurship should continue

However, the rate of change is still slow and the number of success stories will not be multiplied,

unless measures are taken to create a more innovation-friendly business environment. According to

the World Bank, Greece in 2012 was at the 80th place in the “ease of doing business”, where many

other Members of the Eurozone were ranked well above, among the first 40 world economies

(Reichenbach, 5).

A major obstacle in Greece comes from a very complicated, often conflicting, legislation that leads

into interminable bureaucracy. Despite continuous policy efforts, a new company in Greece still

needs more than a month to be incorporated, instead of spending only two hours online, as in the

case of some countries, which have adopted clear and fast procedures in this respect (Kritikos, 2).

Further obstacles come from the Greek bankruptcy law, which punishes business failure to the

extent that it will follow the entrepreneur for the rest of his/her life. Allowing for exceptions to this

law for innovative companies, introducing tax incentives and reducing the severe requirements for

financial reporting to the tax authorities during the first few years of operation will largely encourage

and support the development of innovative entrepreneurship in Greece (Tamvakakis, 21).

Creating innovative economies: ingredients and best practices

Innovation is a continuous and lengthy process. Although, as pointed out by different speakers, no

universal pattern exists, successful innovation models arise from the combination of certain key

factors that are shared across countries and regions. These are discussed below.

Innovation ecosystems constitute the key driving force

An overview of historical conditions and processes, which made innovation the engine of modern

economies around the world, was provided by Professor Sifakis (8). The model that prevailed

following World War II was based on a clear separation between academia that focused on basic

research and corporate R&D research that was meant to cover all the needs of big companies from

basic research to applied research and commercialisation. This model progressively collapsed with

the appearance of new dynamic actors (Gianellis, 15), with less integrated vertical structures that

introduced new approaches to innovation, enabling to shorten the time needed from a new idea to

its commercial exploitation. The fierce competition in the technology field created new forms of

cooperation, ways to share risk and innovation financing. The latter was largely facilitated with the

advent of venture capital.

Nowadays, the distance between basic research, applied research and application is diminishing. The

division of work that existed between academic research and corporate R&D disappeared during the

1980’s, leading to the emergence of Innovation Ecosystems. These Ecosystems are built around three

main components: (a) Centres of Excellence (CoE) that bring skills, knowledge and prototypes; (b)

large companies that bring investments, new challenges and knowhow; and, of course, (c) dynamic

start-ups that drive commercial exploitation. The convergence of these three players is characterised

by a creative culture and is supported by strong human capital resources, creating the so-called

virtuous innovation cycle that ensures sustainable development through the tight collaboration

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between basic and applied research. The outcome is competitive knowhow and high added value

products and services addressing domestic and global markets.

Most such ecosystems have been created with government support, which was very often

materialised through the provision of adequate tax policy, IP protection, initial investments and

public infrastructure. The quality of life was also considered as an important element, which had its

own importance in choosing the locations where such ecosystems were to be developed.

One illustrative example is the one developed in Grenoble, at a time when the team of Professor

Sifakis had produced cutting edge results in the field of software systems verification. At that period

Airbus was envisioning that the use of the “fly-by-wire” technology would change the aircraft control

system from manual to computerised. The challenge was to prove to the certification authorities that

this system had no flaws. This was a very successful operation between three partners, a start-up, a

university laboratory and Airbus, which gave the latter a competitive advantage of more than ten

years against its competitors.

Professor Baras (37) mentioned that in many countries, including the USA, France, Austria and

Sweden, the development of innovation ecosystems was based around different forms of Centres of

Excellence. Very often, whether called Centres of Excellence, or Competence Centres, these

structures were created around engineering schools and universities that focused on applied

research and created conditions to further strengthen links with industry, through organisational

changes and/or targeted policy support measures.

Swedish Universities, for instance, created a matrix structure, the columns of the matrix being the

university departments and the rows corresponding to cross-disciplinary units. A major structural

change, albeit of a rather cultural nature, was to allow university professors engage into

entrepreneurial activities in addition to their academic duties.

In Austria, Competence Centres have been created and were able to grow in terms of size and

resources, by attracting international investments and knowhow. An efficient policy measure in this

direction was the rule stipulating that participation in the Centres’ activities would have to be

combined with a physical presence of foreign enterprises next to the Centre’s premises.

But in most cases, success of such Centres was directly related to their ability to develop close links

with: (a) the regional authorities that can provide support through funding for infrastructure; and (b)

the main economic players in their region that are the primary recipients of the positive impact in

terms of increased technological competitiveness, growth and jobs arising from the Centres’

activities.

The innovation ecosystems grow through complex processes that drive collaboration patterns of the

three main constituents mentioned above at a regional, national and international level. At the

outset of such efforts lies the realization of large global players that they don’t know everything that

drives them to collaborate with public research laboratories and Small Medium Enterprises (SMEs) in

a framework of open innovation. The organizational models change in a way that follows

technological evolution and global market trends. New academic methods and tools based on the

theory of Social Networks are currently being developed in order to better understand these

processes and identify the factors that lead to optimal choices and cooperation strategies

(Assimakopoulos, 38).

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Innovation strategy receives high priority and is based on national/regional priorities

In order to face the challenges arising from the global competition in technology, advanced

economies pay particular attention to innovation, by developing strategies that will enable new ideas

to be quickly turned into new innovations and products in the global market. Such strategies are

articulated around priorities of high national significance and address specific economic and social

challenges associated with these priorities. As stressed by Charles Wessner (9), innovation should be

a key policy focus for governments, requiring sustained attention by national leadership, appropriate

funding and regular evaluation.

State Secretary Rachel (4) gave an account of the German approach, stressing that during the recent

years of economic difficulties, Germany decided in favour of an active innovation policy, launching in

2006 its high-tech strategy that formulated an all-round approach to innovation.

Adequate funding was foreseen for the implementation of the strategy, by increasing R&D

expenditure from 9 to 13 billion euro between 2005 and 2012. Special attention was also given to

enhance the national science and education systems with increased focus on strengthening

vocational training, and its links to subsequent employment of trainees. Studies have shown that

Germany’s innovation throughput has increased since the introduction of this high tech strategy.

As observed in other EU countries, similar strategies had also a clear focus, with the aim to

concentrate on regional strengths with an international appeal and potential to have a significant

economic impact. Important policy measures in this respect were the creation and support of

Centres of Excellence and Clusters, based on a critical analysis of the strengths and weaknesses of

each region. This regional focus has inspired the smart specialisation approach of the European

Commission, further discussed in the section describing the broader policy context below.

Attention has shifted from inputs to outputs of the innovation system

The development of a knowledge-based economy has marked a clear transition in the role of the

university, from an isolated environment servicing pure science to a central player in the model of

growth for developed economies. As Professor Audretsch (29) pointed out, a major reason for this

transition was that Governments and policy makers realised that investments in basic science – an

input to the innovation system – don’t automatically translate into innovative activities driving

growth in competitiveness and jobs – the expected output. The related debate gained momentum at

times of stagnant growth and high unemployment in large economies, including the USA and

European industrial countries in the 1970’s and 1980’s.

The term “Swedish paradox” was first used by Swedes to describe the situation where large

investments in science and research produced limited innovation benefits for Sweden in the 1980’s.

The term was picked up by Brussels and was rephrased as “European paradox” to refer to similar

conditions surfacing in Europe shortly after. But it was the USA that was the first to address the

“paradox” situation, by passing the Bayh-Dole act8 that changed institutional policies so that the

universities had much more of a mandate for having an impact on the economy.

Still, creating new departments of applied interdisciplinary fields, business schools, or policy schools,

was not enough for the universities to really have a concrete impact. Therefore the next step was to

develop mechanisms to facilitate knowledge spill-over into innovation, in the form of technology

transfer offices, incubators, science parks and other structures whose aim was to absorb the new

8 Voted by the US Congress in 1980, the Bayh–Dole Act or Patent and Trademark Law Amendments Act permits a university

or a small business to elect to pursue ownership of an invention in preference to the government.

8

ideas. The “entrepreneurial university” of today not only generates knowledge for its own sake but

also becomes a solution provider, as an active partner in addressing problems of technological,

economic and societal relevance (Audretsch, 29).

Another innovation output that has its own significance is the protection of Intellectual Property (IP)

through its different forms, including patents. A very recent study showed that 90% of European

exports outside the European Union are coming from IP intensive industries, which underlines the

importance of patents for expanding business in an international scale (Kouzelis, 31). Knowledge

protection for advanced technologies was also stressed as a precondition to attract venture capital

(Harding, 11).

In this framework, it is productivity that really matters, removing the accent (a) from numbers of

scientific publications to citation indices and patents; and (b) from amounts of research funds

absorbed to actual economic and social results and impacts achieved (Tsipouri, 28). These are criteria

that public authorities in charge of innovation policies and measures should use when measuring

efficiency and effectiveness of actions launched and be ready to make decisions to adapt, modify or

even stop related innovation programmes on the grounds of the results of the assessment.

Innovation goes hand in hand with entrepreneurship

Increasing innovation outputs also necessitates encouraging and supporting the development of an

entrepreneurial culture. Key characteristics of entrepreneurship are vision that enables one to

identify opportunities and nerve that is needed to take risks, face competition and cope with

uncertainties. A key issue for the innovation ecosystem is that the role of entrepreneurship is

recognised by the other actors and especially government and academia (Harding, 11).

For government, recognition may mean incentives for attracting investment and policies that do not

excessively punish failure. The university is the place where innovative entrepreneurs will seek to

recruit, but also find new partners among the research staff for new joint ventures. Giving the

opportunity to entrepreneurs to teach undergraduates and graduates, in addition to any other form

of practical training in business environments, is a way to strengthen the link of academia with

entrepreneurship.

These are distinctive features of the 21st Century University, which need to be understood and

incorporated in current academic structures, by giving incentives to research staff to collaborate with

industry and/or start their own businesses (Wessner, 9). At the same time, it is crucial to realise that

the inventor is not always the best person to drive the commercial exploitation of the new idea, so it

is necessary to form teams with the appropriate management skills and define clear roles and

responsibilities.

Innovation is strongly linked to excellence and meritocracy

Innovation has to do with top performance in science and technology, so the human factor is of

paramount importance (Sifakis, 8). Put it differently, there is no way to get cutting-edge science and

high-tech innovations without outstanding talent, which means that special attention should be

given to the world’s best. It is them, who are most likely to make breakthrough discoveries and

inventions that can trigger new scientific and technological areas that will lead the industrial

activities of tomorrow. Their outstanding performance will attract talented young researchers with

strong motivations: the higher the reputation of top scientists, the stronger and more competitive

the research teams around them will be.

9

One of the reasons that Europe loses its best brains is that in most European countries recruitment

practices for researchers are not flexible, while research career paths are not clear (Cartalos, 27).

American universities offer more competitive working conditions. This is also the practice in

Switzerland.9

As further explained by Professor Chen (14), at ETH, the Engineering School of Zurich, the main idea

is that good scientists and researchers will not easily agree to become assistants to someone whose

credentials or research output are not as good as their own. Moreover, if the objective is to recruit

the best, the maximum benefit will come if they are given the freedom to pursue their own interests.

The high recruitment standards of academic staff at ETH have a high impact on the quality of both

training and research. Nearly a third of the business leaders in Switzerland were educated by ETH -

the fact that they were trained as scientists and engineers and not as economists or lawyers has its

own significance.

Professor Carrasco (30) gave another example of the positive effect a performance and excellence

mind-set has on human resources management. The economic departments of Universidad Pompeu

Fabra in Barcelona and Universidad Carlos III in Madrid have reached distinguished positions in

Europe in the last 15 to 20 years. This achievement is mostly due to their merit-based hiring policy,

which included an evaluation of research produced by academic staff members every two years and

a clear career path to the position of senior faculty member, within a maximum period of six to seven

years. Both universities have also internal systems of incentives to reward scientific excellence.

As far as the impact of merit-based recruitment to innovation is concerned, ETH professors interact

freely with the private sector and are encouraged by the institution to do so. As leading research

performers they are able to trigger private R&D activities and venture capital around them. The

reason why many private companies make costly investments to launch R&D structures around ETH

is to get access to skilled human capital and advanced scientific results. This is the same model that

led to the creation of innovation ecosystems around other prestigious universities such as Stanford,

Harvard and MIT. A key message from these examples is that the raw material of technology transfer

is excellent research (Chen, 14).

The broader policy context

The European policy environment, as well as commitments and initiatives undertaken by the Greek

government that are presented below, set out a framework for designing the innovation future of

Greece.

The European innovation policy framework and objectives

From the very start, the competitiveness of the European Union was built on knowledge, as a means

to attain sustainable growth and employment. This is the reason why innovation was placed at the

heart of the European development strategy following the 2008 crisis. For the new programming

period 2014 - 2020, Brussels encourage Member States to concentrate on their strengths and

innovation capacities and develop, on this basis, “smart specialization” strategies. Therefore

structural funding will only support programmes that are in line with such strategies.

9 Switzerland occupies the 1

st place in the innovation performance index of the European Commission.

10

In parallel, Horizon 2020, the new programme for research and innovation, has been reshaped to

further strengthen European and national research potential. The best collaborative teams in Europe

will be supported to work together to tackle the major social challenges and/or to solve current

fundamental scientific questions. A new element is a dedicated instrument for research and

innovation actions by small and medium-sized enterprises. Moreover, increased coordination

between Horizon 2020 and the so-called Joint Programming Initiatives (JPIs) aims to create more

synergies between European industry and academia with a bottom-up approach that focuses on

strategic industrial topics and uses available resources more efficiently (Rachel, 4).

Another novelty of Horizon 2020 is the “teaming for excellence” initiative. This scheme will offer

substantial funding on a competitive basis for projects aiming to develop cutting-edge research

centres in less advanced European regions. The proposals are to be submitted by teams comprising

of: (a) an internationally recognised European research centre; and (b) the hosting region. In the

bidding process the teams will have to convince about their potential to create an innovation-

conducive environment with significant impact at a regional/national/European level.

Teaming for excellence is very well adapted to the needs of southern European countries like Greece

as it may boost significantly the various high-tech business activities (Reichenbach, 5). Moreover, it

can be seen as a means to attract top innovation performers by setting out ambitious objectives of

excellent research for the new centres, an approach that would maximise expected impacts,

following the example of countries such as Switzerland mentioned above (Cartalos, 27).10

The underlying objective of the current European policy guidelines to Member States is to ensure a

more effective use of public funds by concentrating resources and innovation efforts on selected few

key priorities rather than spreading investment thinly across many areas. The aim is to create

synergies from different sources of public funding, especially those from Structural funds and

Horizon 2020, while at the same time stimulating private investment.

The Greek strategic priorities for research and innovation

The General Secretary for Research Science and Technology Vassilakos (6, 22) stressed his

commitment to promote the role of research and innovation, as well as their impact on the Greek

society. The national strategic framework for research and innovation for the period 2014-2020,

currently under preparation, will introduce a novel long-term approach for the development of the

Greek innovation system, drawing lessons from Horizon 2020 and adapting its best practices to the

Greek environment.

A key objective is to increase research and development expenditure from 0.67% of the Gross

Domestic Product (GDP) in 2011 to 1.5% in 2020. Strong incentives will be provided and simplified

procedures will be used in order to increase involvement of the private sector, the target being to

raise business expenditure in research and development from 0.23% of the GDP in 2011 to 0.47% in

2020.

Basic ingredients of the research strategy include: (a) strengthening the public-private research

partnerships; (b) promoting the creation of spin-off companies; (c) developing competence centres;

(d) supporting existing and new clusters in line with regional priorities; and (e) introducing or

facilitating new innovation financial mechanisms based on good practices of risk-sharing financing.

10

Further information on participation rules was provided in November 2013, shortly after the Conference, according to which Greek regions were not included among the eligible hosting regions.

11

The General Secretariat for Research Science and Technology (GSRT) develops the smart

specialisation strategy in close cooperation with the Ministry of Development, the regions and the

private sector. Particular emphasis will be placed on creating synergies with Horizon 2020, especially

in areas of strategic relevance, where Greece shows excellent scientific performance. At this stage,

an initial set of national priority areas have been defined, comprising of: (a) the agro-bio food sector;

(b) activities related to the sea and the blue growth; (c) health care and pharmaceuticals; (d)

information and communication technologies; (e) energy; and (f) environment and sustainable

development. The next steps will be to further specialise these priority areas and link them to

development strategies at the national and regional level, in order to define a coherent policy and

associated action plans (Sofouli, 26). The process will be concluded in the first months of 2014.

International cooperation perspectives

As pointed out by Professor Haliasos (7), the current situation in Greece has stimulated the strong

interest of the international scientific community, as evident by the increased number of studies and

publications on the reasons that led to the current crisis and on the ways to move forward. Greece

can certainly count on the active support from distinguished members of its diaspora. Such support

may range from enhancing/strengthening cooperation in international scientific and innovation

networks to advice and hands-on assistance in implementing international best practices under the

specific country conditions.

In this context, it is, also, important to mention two initiatives in the framework of the bilateral

cooperation between Greece and Germany. One initiative is the Greek-German programme for

research and development in specific areas of high-tech industrial sectors which resulted in the

submission of 400 very competitive proposals by joint research teams of experts from both countries

The other initiative is in the area of vocational education and training and aims at: (a) policy advice

for creating dual training structures in the Greek education system; (b) the creation of regional

vocational education-and-training networks; and (c) the expansion of training mobility practices in

Greece (Rachel, 4). This second initiative is particularly relevant for Greece, where vocational training

has not received due attention so far, as already mentioned.

The vision and the way forward

The future of Greece will depend upon its ability to establish a new model of sustainable growth to

create new jobs and reduce unemployment. As a European country, partner to one of the world’s

strongest economies, Greece cannot expect much from low-cost productivity strategies. Instead,

Greece should focus on entrepreneurship and international competitiveness, driven by innovative

enterprises producing high added value products and services. The list of the world innovation

champions comprises a number of small countries, showing that the innovation option is realistic for

countries of the size of Greece.

Looking into the current situation, as many speakers pointed out, Greece has a number of assets, in

the form of a skilled work force, a very significant national research activity and many examples of

excellent researchers. One also observes niches of successful high-tech business initiatives from the

private sector, emerging patterns of public-private cooperation for the exploitation of research and

clear indications of a more general shift towards innovative entrepreneurship.

In parallel, the current European policy framework creates extremely favourable conditions for

building on national and regional strengths through the smart specialisation approach, as well as

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opportunities to further increase scientific and innovation performance through Horizon 2020. There

is a clear commitment for the new national research and innovation framework to support national

and regional smart specialisation strategies and to exploit opportunities from Horizon 2020

(Vassilakos, 6 - Gianousis, 25).

The challenge is to develop an efficient national strategy for innovation, building on the country’s

strengths and implementing the necessary structural reforms and changes. But an important first

step is to have an in-depth understanding of innovation in all its dimensions, drawing lessons from

the international experience. Only then Greece will be able to establish a clear roadmap with

priorities and milestones and a programme that specifies the roles of the key players and

orchestrates these roles to achieve a common objective (Sifakis 8).

Key steps in this direction are:

the creation of an appropriate structure that raises the institutional profile of Research and

Innovation. In most developed countries, innovation governance is the responsibility of an

independent Ministry. In Greece, innovation issues fall under the responsibility of 3 separate

Ministries and the General Secretariat for Research and Technology is under the Ministry of

Education. This situation should change, in order to convey the clear message that

innovation is a key policy focus;

the setup of an authority in the pattern of a National Science Foundation that will develop

and implement the instruments for evaluating and monitoring research and innovation;

the reorganisation of the currently fragmented research system, with the objective of

developing critical mass which is needed to create technology and sophisticated products in

the few strategic priorities coming out from the smart specialisation approach. Research

should focus more on application, making sure that it is fully aligned with the development

priorities of the country;

in this respect, special attention should be given to developing Centres of Excellence out of

existing or new research centres, with strong governance mandates and focus on building

Innovation Ecosystems and supporting spin-off companies and clusters;

the adoption of criteria of excellence in the national research system. The revised system

should include regular evaluation of research, taking also into account effectiveness of

technology transfer and should raise the profile of the research profession with adequate

remuneration, career paths and performance incentives;

last, but not least, innovation and entrepreneurship should receive a more prominent

position in the education system. An increased focus should be placed on complementing

the theoretical background of students and graduates with professional practice and raising

the profile of vocational training. The academic institutions should move to the new model

of the university of the 21st century, where professors are given incentives for high-tech

ventures and students are actively involved in the development of new technologies and

their application.

However, while Greece is in principle very attractive for investors as it offers qualified and

inexpensive workforce and quality of life, major obstacles for foreign or Greek financiers are the

limited guarantees of proper functioning of the administration and of the market. The Greek

government needs to pursue its reform effort to substantially improve the business environment.

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A short term key priority should be to drastically decrease the administrative burden for start-up

activities, by reducing the number of days needed to register a business, the number of bureaucratic

steps, as well as the number of regulations, fees and reporting duties. For example, innovative

entrepreneurship could be efficiently supported if severe requirements for financial reporting to the

tax authorities could be relaxed during the first few years of operation of new high-tech companies

and/or if such companies were allowed to employ managers, engineers and other skilled

professionals without having to pay their social security costs for a certain period of time.

Building an innovation-based economy is a long process requiring significant and continuous effort

by all stakeholders involved. But it should be realised that since the beginning of the crisis

considerable time has passed with very little progress so far in this direction.

The message should be spread across the public sector that, as a large buyer of services and goods, it

can create demand for innovation through new approaches to public procurement, especially in

strategic areas such as Health, Agro-industry and Defence (Sifakis, 8).11 Moreover, the national,

regional and local authorities would need to adopt the innovation option and play their role in

attracting foreign and Greek top innovation performers and entrepreneurs, with special attention to

the Diaspora.

But a crucial policy step is to create awareness, acceptance and support in the Greek society for the

targets to be achieved. The Greek human potential is capable to create high value jobs and compete

in equal terms with their counterparts globally. The results will be beyond expectations if the

challenge of building thriving high-tech ecosystems is widely understood as the means to achieve

growth and long-term prosperity. To achieve this goal there is a strong need for the actors in the

political arena to create a vision for the country given its strengths and weaknesses. Greece should

embrace the challenge of moving up on the innovation ladder towards the other core members of

the Euro.

The conclusions were prepared by the Eugenides Foundation with the cooperation of Dr.

Odysseas Cartalos, serving as its scientific advisor, based on the analysis of the detailed

conference minutes.

11

A best practice example of an innovation demand-side measure is the Small Business Innovation Research (SBIR) of the USA (Wessner, 9) that served as a model for the specific programme for the small and medium-sized enterprise under Horizon 2020.

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Annex: Speakers and topics

Welcome Address (Day 1 – 7 October 2013)

1. Leonidas Demetriades-Eugenides (Eugenides Foundation, Athens)

2. Alexander S. Kritikos (DIW Berlin, University of Potsdam and IZA)

Policy Perspectives for Innovation Systems

3. Kyriakos Mitsotakis (Minister of Administrative Reform, Greece) “Fostering Innovation in Greece:

Public and Private Sector Initiatives”

4. Thomas Rachel (State Secretary, Germany) “German-Greek Cooperation in Research and

Education”

5. Horst Reichenbach (European Commission, Task Force for Greece)

6. Christos Vassilakos (General Secretary of Research & Technology, Greece)

Session A: Innovation Policy: Conditions for a Well-functioning Innovation System in Greece

7. Chair: Michalis Haliassos (Goethe Un Frankfurt, Member of ESET)

8. Joseph Sifakis (EPFL, Lausanne) “Facing the Innovation Challenge in Greece”

9. Charles Wessner (National Academy of Sciences, Washington)

Session B: Innovating in Greece and elsewhere: The Business Perspective

10. Chair: Yannis Caloghirou (National Technical University of Athens)

11 Jack Harding (eSilicon) “Vision, Nerve and Other People’s Money: Succeeding as an Entrepreneur”

12. Leonidas Demetriades-Eugenides (Eugenides Foundation, Athens) “Paradigms: Past, present

and future…”

Session C: Innovation Hubs: What Can Be Learned from Abroad?

13. Chair: Aristos Doxiades (Openfund)

14. Peter Chen (ETH Zurich) “The Swiss Case”

15. Emmanuel Giannelis (Cornell University) “Innovation: From Inventions to Economic Growth”

Session D: Science and Innovation Parks for Greece: A Vision for 2020

16. Chair: Georges Siotis (European Commission, Task Force for Greece)

17. Costas Fotakis (Foundation for Research and Technology - FORTH)

18. Nikos Kanellopoulos (National Centre for Scientific Research Demokritos)

19. Athanasios Konstandopoulos (Centre for Research & Technology Hellas -CERTH)

20. George Baourakis (Mediterranean Agronomic Institute of Chania - MAICh)

Panel: The Business Perspective on Innovation: What Needs to Happen

21. Moderated by Anna Grimani, participants: Niki Siropoulou (Curator, Tedx Academy), Sotiris

Bantas (CTO, Helic), Apostolos Lerios (CTO, Metanautix), Phaidon Tamvakakis (Alpha Trust)

15

Concluding Round Table

22. Moderated by Joseph Sifakis (EPFL, Lausanne), with Christos Vassilakos (General Secretary of

Research & Technology, Greece) and Giorgos Stergiou (General Secretary for Industry, Greece)

Welcome Address (Day 2 – 8 October 2013)

23. Constantine Vousvounis (General Manager, Eurobank)

24. Klaus F. Zimmermann (Director, IZA and University of Bonn)

Session E: The Next Programming Period: Suggestions for an Integrated Greek Innovation Policy

25. Chair: Giorgos Giannousis (General Secretary for Investment (NSRF), Greece)

26. Evaggelia Sofouli (General Secretariat, Research & Technology)

27. Odysseas Cartalos (Logotech) “Teaming Competition for Excellence – Issues and opportunities for

a Greek project”

Session F: Knowledge Creation, Protection and Transfer: Perspectives for Greece

28. Chair: Lena Tsipouri (University of Athens)

29. David Audretsch (Indiana University) “The Entrepreneurial University as a Source of Knowledge

Creation and Conduit of Knowledge Spillovers”

30. Raquel Carrasco (Universidad Carlos III de Madrid) “The Skewness of the Science and the Design

of Research Institutions”

31. Dimitris Kouzelis (European Patent Office) "Intellectual Property and an Introduction to a Patent

Strategy for SMEs and Research Institutions"

Session G: Tapping the Diaspora's Potential

32. Chair: Konstantinos-Dionysios Bouzakis (Aristoteles University of Thessaloniki)

33. Klaus F. Zimmermann (Director, IZA and University of Bonn) "Diaspora Economics and the Greek

Perspective"

34. Lois Labrianidis (University of Macedonia) “How to Create a Knowledge Economy when the

“Brains” are Flying Away”

35. Theodore Papazoglou (European Research Council) “Retain-Recruit-Repatriate: Preliminary

Findings from the First 7 Years of the European Research Council’s Pan-European Competitive Calls”

Session H: Networks, Clusters and Supporting Services for Innovation

36. Chair: Jorge Sanchez (Corallia)

37. John Baras (University of Maryland)

38. Dimitris Assimakopoulos (Grenoble Ecole de Management)

39. George Chrousos (Bionian Cluster)

Session I: Financing Innovation

40. Chair: Pandelis Tzortzakis (QUEST)

41. Reinhilde Veugelers (K.U. Leuven)

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42. Nikos Koulis (Eurobank)

43. Spyros Trachanis (Odyssey Venture Partners)

44. Loukas Pilitsis (Piraeus Bank)