Local business landscape too fragmentary

Very small enterprises, which do not have any employees except the owners and are active in low-productivity industries, constitute the backbone of Greek business.

Merchants, entrepreneurs in food service as well as freelancers occupy a large part of the domestic business map, while representing a type of entrepreneurship that usually has a limited degree of extroversion and is quite vulnerable to crises.

Provisional data from the Hellenic Statistical Authority (ELSTAT) on the demography of businesses in Greece showed on Thursday that in 2020, when the coronavirus pandemic started, the number of active businesses exceeded 1 million and rose to 1,012,019 from 984,001 in 2019. Of these, almost six out of 10 enterprises – i.e. 595,378 – did not employ any staff – i.e. they were run by the owners themselves.

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

These data highlight once again some of the problems of Greek entrepreneurship that are not a consequence of the crises but are timeless. For many years now, a large number of very small businesses have been operating in Greece that are low in productivity, are of a fairly limited degree of extroversion and which are behind the times – compared to other European countries – in terms of technology and innovation. Usually companies of this size aren’t able to implement large productive investments, especially in times of crisis, while they operate in low added value industries where they can’t get a foot on the competitiveness ladder.

Notably, while the number of subsidiaries of foreign companies operating in Greece is significantly small – considering all the companies operating in the country – their contribution to the Greek economy seems to be decisive. According to ELSTAT data, in 2020 these companies represented just 0.5% of all businesses, but their turnover in the same year reached 46.1 billion euros, representing 19.4% of total turnover. In 2020, a total of 3,691 such businesses were active, which in the same year employed almost 8% of their total number of employees in their Greek activities.