Report on Greek SME Productivity and Alignment with Sustainable Development Goals

Executive Summary: Economic Landscape and SDG Imperatives

An analysis of Greece’s Small and Medium-sized Enterprises (SMEs) reveals a significant structural challenge impacting the nation’s progress towards key Sustainable Development Goals (SDGs). While Greece has one of the highest concentrations of SMEs per capita in the European Union, these enterprises exhibit the lowest productivity levels. This report outlines the primary issues, strategic recommendations, and the critical role of investment in aligning the SME sector with SDG 8 (Decent Work and Economic Growth) and SDG 9 (Industry, Innovation, and Infrastructure).

Current State of Greek SMEs: A Statistical Overview

• Dominance in the Economy: SMEs constitute 99.9% of all enterprises within the non-financial business sector.
• Employment Contribution: The sector is responsible for 84.7% of total employment.
• Value Generation: SMEs generate 62.8% of the real gross added value.
• High Density: There are 79 SMEs per 1,000 inhabitants in Greece, significantly higher than the EU average of 58.

Challenges to Sustainable Economic Growth (SDG 8)

The primary obstacle to achieving Target 8.2, which calls for higher levels of economic productivity, is the structural composition of the Greek SME sector. The prevailing low productivity is a direct consequence of:

• Micro-Scale Operations: The very small average size of enterprises limits economies of scale, efficiency, and investment capacity.
• Sectoral Concentration: A majority of SMEs operate in sectors characterized by low knowledge and technological intensity, hindering innovation-led growth.

The Innovation and Infrastructure Gap (SDG 9)

Greece’s progress towards SDG 9, particularly targets related to technological upgrading and innovation, is severely hampered by a significant digital divide. This challenge is highlighted by the following:

• Low Digital Intensity: In 2023, only 52.4% of Greek SMEs achieved a basic level of digital intensity.
• EU Comparison: This figure places Greece last among EU member states, where the average is 72.9%.

Strategic Pathways for SDG Alignment

To address these deficiencies and foster sustainable development, a multi-faceted strategy is required. The following actions are critical for enhancing productivity and innovation in line with SDGs 8 and 9:

1. Promote Enterprise Scaling: Implement policies and incentives to encourage the growth of SMEs, enabling them to increase their operational capacity and competitiveness.
2. Drive Technological and Digital Transformation: Accelerate investment in capital equipment and digital infrastructure, leveraging the momentum gained since the pandemic to close the digital intensity gap.
3. Encourage Sectoral Diversification: Support the transition of SMEs into new, high-value sectors that are knowledge-based and technologically advanced.

Leveraging Partnerships for the Goals (SDG 17)

The mobilization of financial resources through strategic partnerships is crucial for implementing the necessary upgrades. This aligns with SDG 17, which emphasizes collaboration to achieve sustainable development.

• Utilization of Development Tools: The Recovery and Resilience Fund and the National Strategic Reference Framework (NSRF) are identified as essential instruments for financing this transformation.
• Financial Flows to SMEs: Evidence of this partnership in action includes:
  • 265 loans contracted for SMEs via the Recovery Fund, with a total budget of €2.79 billion.
  • €1.4 billion already disbursed to SMEs from the fund’s subsidy component.

Conclusion and Outlook

Despite successive crises, the Greek SME sector has demonstrated resilience, strengthening in both absolute numbers and economic output. Projections indicate this upward trend will continue into 2025. By strategically utilizing investment tools and focusing on policies that enhance enterprise size, technological adoption, and innovation, Greece can transform its SME productivity challenge into an opportunity for robust and sustainable economic growth, making significant strides towards achieving SDGs 8, 9, and 17.

1. Which SDGs are addressed or connected to the issues highlighted in the article?

The article discusses issues related to economic productivity, employment, technological upgrades, and financial access for Small and Medium-sized Enterprises (SMEs) in Greece. Based on this, the following Sustainable Development Goals (SDGs) are addressed:

• SDG 8: Decent Work and Economic Growth – The article’s central theme is the low productivity of Greek SMEs and the need to boost it to foster economic growth. It also highlights the significant role of SMEs in providing employment.
• SDG 9: Industry, Innovation and Infrastructure – The text explicitly points to the need for investments in technology, digital upgrades, and capital equipment to improve SME productivity. It discusses the low digital intensity of Greek SMEs and the importance of financial tools to support innovation.
• SDG 17: Partnerships for the Goals – The article mentions the utilization of financial mechanisms like the EU’s Recovery Fund and the National Strategic Reference Framework (NSRF) to support SMEs. This highlights the importance of partnerships between national governments, international bodies (EU), and financial institutions (Alpha Bank) to achieve development objectives.

2. What specific targets under those SDGs can be identified based on the article’s content?

Several specific targets can be identified from the article’s content:

SDG 8: Decent Work and Economic Growth

• Target 8.2: Achieve higher levels of economic productivity through diversification, technological upgrading and innovation. The article directly addresses this by stating that the “challenge is to increase their size, shift to new sectors, and make investments in the technology sector” to combat “low productivity.”
• Target 8.3: Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation, and encourage the formalization and growth of micro-, small- and medium-sized enterprises. The entire article focuses on the status and challenges of SMEs in Greece, which represent “99.9% of the number of enterprises” and “84.7% of employment.”

SDG 9: Industry, Innovation and Infrastructure

• Target 9.2: Promote inclusive and sustainable industrialization and, by 2030, significantly raise industry’s share of employment and gross domestic product. The article provides data on the contribution of SMEs to employment (84.7%) and “real gross added value” (62.8%), which are key metrics for this target.
• Target 9.3: Increase the access of small-scale industrial and other enterprises… to financial services, including affordable credit. The article highlights the importance of improving “the access of Greek SMEs to capital and financing” and mentions that “265 SME loans have already been contracted for a total budget of 2.79 billion euros” through the Recovery Fund.
• Target 9.c: Significantly increase access to information and communications technology. The article points to a major gap in this area, noting that “only 52.4% of Greek SMEs had at least a basic level of digital intensity” and that a “technological and digital upgrade” is needed.

SDG 17: Partnerships for the Goals

• Target 17.3: Mobilize additional financial resources for developing countries from multiple sources. The article provides a clear example of this by mentioning the “Recovery Fund and the NSRF” as crucial “development tools” providing loans and subsidies to Greek SMEs.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

Yes, the article provides several specific quantitative indicators that can be used to measure progress:

• Productivity Level: The article states that the productivity of Greek SMEs is the “lowest in the EU,” which serves as a baseline indicator for Target 8.2.
• Proportion of SMEs in the economy: The figure that “SMEs in Greece represent 99.9% of the number of enterprises” is an indicator for Target 8.3.
• Share of SMEs in employment: The statistic that SMEs account for “84.7% of employment” is a direct indicator for Targets 8.3 and 9.2.
• Share of SMEs in gross value added: The data point that SMEs contribute “62.8% of real gross added value” is an indicator for Target 9.2.
• SME density: The metric of “79 SMEs in Greece, compared to an average of 58 in the EU” per 1,000 inhabitants is an indicator related to Target 8.3.
• Access to finance: The article provides specific numbers like “265 SME loans,” a “total budget of 2.79 billion euros,” and “€1.4 billion from the subsidy component” as indicators for Target 9.3.
• Digital Intensity: The percentage of SMEs with “at least a basic level of digital intensity” (52.4% in Greece vs. 72.9% in the EU) is a clear indicator for Target 9.c.

4. Create a table with three columns titled ‘SDGs, Targets and Indicators” to present the findings from analyzing the article. In this table, list the Sustainable Development Goals (SDGs), their corresponding targets, and the specific indicators identified in the article.

Source: ekathimerini.com