What does Greece have in common with a struggling startup? Not much cash, problems getting its message across and a loss of talent.
The brain drain is perhaps the most devastating effect of the economic crisis in Greece that has left the country fighting to stay in the eurozone. Highly skilled people are fleeing the country for a better future abroad.
This is depriving Greece of precious human resources and undermines its potential for growth. Can it all be reversed somehow? Can the vicious circle of recession and talent depletion be broken? I believe it can, if it behaves more like a successful startup and deploys three key “growth hacks.”
Facebook (Tech30) and Dropbox famously used “growth hacks” to exploit the power of social networks and Internet search engines to snowball their campaigns and quickly grow their user base. Dropbox went from zero users to millions, armed with a great product and a viral business model of offering free disk storage to users who brought others onboard. ,
How is all this relevant to Greece? Well, my belief is that the government should adopt a growth hacker mentality, focusing on measures that bring multiplier effects while incurring minimal costs. It should target startups and entrepreneurship, while ruthlessly aiming to win back lost talent. And Greece has its own very special social network to hack in; it’s called the diaspora. So here is what can be done:
1. Offer tax incentives to invest in startups
Venture capitalists and angel investors are not exactly queuing up to invest in Greek companies. However, several have managed to attract capital, and to foster this Greece should offer investors tax breaks. This would help create jobs, and spawn a virtuous circle of further investments. The cost of this hack is negligible, and it can bring immediate as well as long term benefits for the budget.
The diaspora can help promote this activity: I personally know several Greek expats in the investment community who are always looking for ways to help.
2. Fast-track payroll subsidies for skilled workers
Greece has received several billions of euros from European Union funds aimed at boosting employment and competitiveness. But this money should not be thrown into a black hole of bureaucracy, and should not be spread too thinly. It should be targeted at knowledge workers, to give rise to innovative, export-driven businesses.
Adding highly skilled people to the workforce creates lower wage jobs too; software engineers need meals, hotel rooms, groceries and haircuts.
3. Incentivize R&D spending
Greece should shamelessly copy the incentives other countries offer to businesses that lean heavily on research and development. Canada is a famous example, with a program that subsidizes as much as 80% of the R&D payroll. Other measures may include deductions on income from patents, tax exemption for R&D grants and a favorable tax regime for Intellectual Property licensing.
These would also encourage multinational companies to run more sales though their Greek subsidiaries, thus generating more revenue for the government.
Taken together, the cost of these “growth hacks” is not negligible. Highly skilled people are required to run and audit them, so that they don’t become vehicles for tax evasion or abuse of subsidies. But costs could be brought down by further “hacks,” such as contracting Greeks in the diaspora as program managers and auditors.
They could offer their services in exchange for tax breaks or even dividends from future tax collections, taking a direct stake in the success of Greek business and the country’s sorely needed growth.
Editor’s note: Sotiris Bantas is founder and CEO of Centaur Technologies, an industrial Internet-of-Things company based in Volos, Greece. He has a degree in Electrical Engineering and a PhD in Microelectronics. The opinions expressed in this article are solely his.