Athens, Greece – When Krystallia Sarantopoulou graduated from Thessaloniki’s Aristotelian University seven years ago with a degree in electrical and computer engineering, she landed in the worst job market in Europe.
Greek unemployment in July 2013 stood at 28 percent. The country was then still halfway through an eight-year recession that would claim a quarter of its economic growth. It still ranks as the worst contraction of any post-war developed economy.
“It’s already difficult to start a job as a new graduate, but during the financial crisis it was impossible,” she says.
Forced to seek her fortunes abroad, Sarantopoulou accepted an entry-level job in The Netherlands. The pay was basic but she felt at home. Walking into the Dutch company cafeteria, she recognised many fellow graduates from the Aristotelian University mess hall.
Still, she wanted to return to Greece and diligently kept an eye peeled for opportunities. This year, during the coronavirus pandemic, one finally surfaced.
A colleague of mine called and said Pfizer is going to invest in a software hub in Thessaloniki
“Last Easter, a colleague of mine called and said Pfizer is going to invest in a software hub in Thessaloniki. I said, ‘Really? It’s too good to be true’.”
Sarantopoulou is among the first wave of new hires at Pfizer’s Greek hub. A project manager, or scrum master in the industry’s rugby lingo, she coordinates a research team scattered around the world.
Some 200 employees will be at the site by December and Pfizer now plans to build it out to 600 employees, many of them repatriated Greeks.
“We have people coming from the US, the Netherlands, Germany – all Greeks who went away and are coming back,” Nico Gariboldi, the site manager in Thessaloniki told Al Jazeera.
Gariboldi says Pfizer chose Greece for a number of reasons: Political stability under the conservative New Democracy government, the biggest concentration of universities in southeast Europe and the city’s incubators and startups.
Those pull factors are no accident but part of the government’s strategic blueprint to competitively place Greece for the “Fourth Industrial Revolution” merging the digital, biological and physical worlds. And that strategy for transformation has continued apace this year despite the myriad challenges from COVID-19.
All Greeks who went away and are coming back
Determined to catch the next train
Greece, traditionally a pastoral society, largely missed out on previous industrial revolutions. Its industrial parks still bear the smokestacks and jagged factory roofs of experiments in manufacturing going back to the 1930s. After the fall of the Iron Curtain, much of its manufacturing fled to the cheap labour markets of Eastern Europe.
Though it was late for the last train, Greece is determined to catch the next.
It passed legislation last year slashing its corporate tax from 28 percent to 24 percent and has introduced a slew of tax incentives to attract investors, digital nomads (like Krystallia Sarantopoulou) and teleworkers – people who can work from anywhere to deliver a service.
The government also plans to invest a quarter of the income from next year’s 5G auctions in startups offering 5G services.
“Countries that want jobs with added value need to partake of the fourth industrial revolution, which is digital and data-based,” Alexis Patelis, the prime minister’s economic adviser told Al Jazeera. “[Digitisation] increases the productivity of the economy as a whole.”
Last January, Prime Minister Kyriakos Mitsotakis met Microsoft CEO Brad Smith at the Davos Economic Forum in Switzerland. Smith wanted Mitsotakis’s help in creating an “enhanced” reality app through which a traveller would see ancient Olympia as it was 27 centuries ago. Mitsotakis then put another item on the agenda.
“They discussed Olympia and then we suggested the data centre, which was then very prescient,” Patelis tells Al Jazeera. “A month later Brad Smith visited Greece and said, ‘you are in the running for a data centre’.”
In October, Greece and Microsoft signed an MoU to build three data centres in the greater Athens area – enormous server parks that form the backbone of the internet and cloud computing services. Currently, the region is served by data centres in Amsterdam or Dublin.
The presence of data centres is expected to make small companies that cannot afford servers and software more competitive and attract larger investors.
Countries that want jobs with added value need to partake of the fourth industrial revolution
Two waves of COVID-19 are expected to contract Greece’s economy by more than 10 percent this year.
“We have an investment deficit. As it is, we cannot achieve the growth we want,” says Patelis – a reference to the government’s promise to achieve 4 percent growth this year.
Hoping to make good on its promise in 2021, the government plans to disburse 5.5 billion euros ($6.69bn) of its allotment from the EU Recovery and Resilience Facility.
It is also actively seeking and wooing corporate giants who want to incubate ideas in the real world.
Greece’s tax incentives:
• If you move to Greece your income tax will be reduced by 50% for 7 years – any work, any income, any nationality. This starts in 2021 for a year, extendable to 2022.
• Flat tax rate for tech stock options at 15%. For tech startups that flat tax is at 5%.
• Government has reduced social security contributions by 4 percentage points this year – extendable to 2022.
• In 2021 there will be no solidarity tax (a surcharge of 2-5% of income) – extendable to 2022.
• Tax credit / super depreciation is being introduced for digital capex or R&D capex. Essentially, it means companies don’t pay corporate income tax (24%) on this expenditure.
• Non-domicile tax residents who move to Greece pay a flat tax of 100,000 euros’ income tax.
• Pensioners who move to Greece pay a 7% flat tax.
“I am not of the view that we have to sit in our offices saying Greece has political stability and a good climate and expect that the phone will ring and it will be the chairman of a company that wants to build a factory here,” said Kostas Fragogiannis, deputy foreign minister for economic diplomacy.
Fragogiannis’s job it is to spearhead the search for high-tech investors.
“I believe in a proactive policy,” he told Al Jazeera.
That initiative bore fruit last month when Volkswagen chose the island of Astypalaia for a ground-breaking experiment with electric vehicles.
The German automaker will replace the island’s public internal combustion vehicles with electric ones for free. It will also sell electric vehicles to the island’s 1,300 inhabitants at cost, build a network of charging stations and test a mobility-on-demand app, through which people can rideshare without having to own a car. Eventually, it plans to test its driverless technology there.
Fragogiannis is also looking for an investor to build a solar-and-wind power station, making the island energy self-sufficient.
“I think this project will teach lessons applicable for the whole world,” he says. “It shows the world how public and private transport will work in the future.”
“Astypalaia serves as a future blueprint for the social consensus that we need across Europe to achieve a zero-emissions future,” said VW CEO Herbert Diess on November 4.
As with Microsoft, the deal with Volkswagen was the result of both sides coming forward with ideas. “This government targeted certain markets and countries and companies,” says Fragogiannis, saying more major projects are in the works.
“Astypalaia can and will be a model of sustainable development, not just on a national level but on a European and global level,” said Prime Minister Mitsotakis at the announcement of the deal. “At Astypalaia we shall have a picture of the future.”
It was, in a nutshell, what Mitsotakis is driving towards for the Greek economy as a whole.