Prospects of the ICT sector in Greece

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Study of the ICT sector in Greece: Current Situation and Future Trends Deliverable 14: Prospects of the ICT sector in Greece-policy implications upgrade in know-how in combination with lower wages may lead to a withdrawal of foreign investors from Greece 19. On the other hand, recent studies of human capital trends report an increase of the demand for executives in the ICT sector, converging, thus, with the estimation for an increase of total employment in the sector. However, the supply is also continuously growing and it can lead to an imbalance between demand and supply of relevant labour in the sector. University graduates of ICT sciences increase to a greater extent than the domestic labour demand. Hence, there is adequacy in terms of ICT executives, while other types of employment are also expanded (external advisors, part-time and non-permanent employment). On the other hand this should lead to a reinforcement of entrepreneurship in the sector. Such a trend is indeed evident, as there is an increase in the birth of start ups in the sector during the last years. Nevertheless, the degree and the quality characteristics of these new ventures are not adequate in order to absorb all graduates from the corresponding faculties. As entrepreneurship studies reveal, in Greece only 10% of the new ventures can be classified among the ICT sector, being mainly a retail firm 20. Bu summing up, the trends for total employment in the sector may be considered positive in the short term and are certainly better than the situation three years ago. However, these positive trends have a sector-based orientation and probably a specific skills orientation. Additionally, there is a degree of uncertainty regarding the success of the firms’ growth strategies, while external factors may place in danger some job positions in the domestic sector. Simultaneously, labour supply in the sector may not balance with the relevant demand. The human capital is one of the strengths of the sector, but Universities should be more aligned with the needs of the firms Field research on ICT firms showed that the human capital of the sector is considered as its strong advantage. However, there is still some space for improvements. The level of tertiary / technical education and training with regard to the ICTs is significant, the syllabuses are adequate and complete in terms of context, while the specialized personnel in the labour market is also sufficient. Firms are satisfied with the level of human capital in the domestic labour market, as there are good and well skilled engineers and executives, allowing a growth of the sector. However, a significant part of the business sector is not fully satisfied, as it 19 However for the time being, an increased foreign investors’ interest is recorded (especially in Trade and Telecommunications). This implies the existence of opportunities in the Greek market. 20 Data of Global Entrepreneurship Monitor (GEM), a research consortium to which Greece is represented by IOBE October 2006 Observatory for the Greek IS 28
Study of the ICT sector in Greece: Current Situation and Future Trends Deliverable 14: Prospects of the ICT sector in Greece-policy implications pinpoints the need for an even more targeted training, better quality and a more efficient fit with the market’s needs. Indeed, market needs are not well aligned with the Greek educational system a fact that creates difficulties in the improvement not only of the ICT sector, but several other sectors as well21. The need for strengthening cooperation between firms and universities and an improved preparation of graduates remains high. Firms ask for a greater familiarization of the graduates with market terms and functions. Furthermore, other types of cooperation such as fieldwork, seminars by executives, and a more intense collaboration in R&D could lead to a more effective linkage between education and “production process”. Intense competition in terms of pricing and not in terms of technology: Well targeted strategies, but difficulties in their implementation Prices are the main element of competition in the ICT sector (field research data), while competition in terms of marketing and advertising follow next. On the contrary, the business environment cannot be characterised as particularly competitive in terms of differentiated technological products/ services or in terms of quality and value –added products/ services, although demand and competitors’ moves are not easily predicted. Therefore, all firms seem to sell similar products, which differ only in price and the means for promotion. This leads on one hand to an intense competitive pressure that limits profit margins, but on the other hand also creates an opportunity for the innovators, those that try for differentiation and market specialization. Within this framework, ICT firms’ strategic objectives for the next couple of years is twofold: First, to achieve a better market share for their existing products in the market in which they are already active, a fact that affirms the room for competitive pressure by attracting customers from the weakest opponents. Second, to innovate by introducing new products/services, aiming not only to attract customers in the given market (ICTs users), but also to attract new customers (ICTs non-users). Their profile in terms of strategic actions they follow in order to achieve their objectives, is concentrated in four main areas: a) emphasis on the value-added products/ services offered, despite the fact that competition in the sector has mainly price and marketing characteristics, 21 There is also the view that capable executives of the sector have not yet completely exploited their skills in large scaled projects- this is also attributable to delays in the implementation of public funded projects- which results to underemployment or employment in other fields which do not capture the personnel’s skills. October 2006 Observatory for the Greek IS 29
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