Small Greek businesses finding it hard to adjust to conditions

Some 676,700 very small, small and medium-sized enterprises account for almost 87 percent of employment in Greece, according to the Hellenic Federation of Enterprises (SEV).

These firms create added value worth the equivalent of 19.3 percent of gross domestic product and produce 44.2 percent of Greece’s exported goods. However, the fact that they continue to lag behind their European counterparts is hindering their growth, with their productivity standing at just 50 percent of the European average.

The high degree of decimation and their very small size also hamper the growth of such businesses. Therefore the flexibility that in theory comes with the small size (the average number of people per very small company is 1.9) does not transform into performance, with very small companies (96.9 percent of all enterprises) producing 9.3 percent of GDP, while small and medium-sized businesses (3 percent of the total) produce about 10 percent of GDP.

According to a joint study by SEV and Ernst & Young, relatively sizeable companies display stamina and adaptability (35 percent increase in the profit margin of medium-sized enterprises, against a 50 percent decline in small and very small firms), finding a solution in exports (40 percent increase among medium-sized companies).

Firms focusing on manufacturing show quadruple the added value that their non-manufacturing counterparts create (regardless of size), while innovation is another factor that shows improvement (29.6 points on the European Innovation Scoreboard, against an average of 30.6 points in the European Union), along with participation in productive networks with bigger enterprises (12.4 percent against an EU average of 10.3 percent).

Medium-sized enterprises that are technology- and knowledge-intensive have also benefited from the increase in demand much more than smaller companies, the study found.