The Greek economy's struggle with productivity is a multifaceted issue, and one of the key factors lies in the structure of its business landscape. The dominance of small- and medium-sized enterprises (SMEs) in employment, particularly in low-labor-intensive sectors, is a significant contributor to the country's productivity gap with the EU.
In my opinion, this is a fascinating yet complex issue. On the one hand, SMEs are the backbone of many economies, fostering innovation and providing flexibility. However, in Greece, their impact on productivity is notably negative. According to Alpha Bank's insights, an SME employee in Greece produces a mere 25.5% of the value generated by an employee in a large enterprise, a stark contrast to the EU average of 60.9%.
What makes this particularly interesting is the disparity in employment and value added. Almost half of Greek employees (47.5%) work in very small enterprises with fewer than 10 staff, which struggle to invest in new technologies and reduce costs. These enterprises, despite employing a larger share of workers, contribute only 23.5% of gross value added (GVA), compared to the EU's 20.4%. In contrast, large enterprises with at least 250 employees, which are more productive, account for a smaller share of employment (15.4%) but produce a substantial 41.7% of GVA.
This raises a deeper question: Why are SMEs in Greece less productive? One possible answer lies in the nature of the sectors they dominate. The Greek economy heavily relies on service sectors like food service, accommodation, trade, and transport, which are inherently low-labor-intensive and less productive. These sectors employ about 37% of workers and contribute around 25% of total GVA, indicating a significant productivity gap.
In contrast, the industry sector, which relies more on machinery and technology, employs only 9.5% of workers but generates 15.2% of GVA, showcasing a positive trend. This shift towards a more technology-driven industry could be a crucial step towards improving overall productivity.
Another critical factor is the drop in productive investments during the crisis. While investments as a percentage of GDP have recovered, reaching 16.9% in 2025, this is still below the EU average and the level recorded in 2010. This recovery, though positive, is not enough to bridge the productivity gap.
In my perspective, addressing this issue requires a multi-faceted approach. Firstly, encouraging SMEs to invest in technology and training can significantly enhance their productivity. Secondly, diversifying the economy by promoting high-productivity sectors like industry and technology can have a substantial impact. Lastly, the government should focus on creating an environment that fosters productive investments, ensuring that the recovery is sustainable and inclusive.
In conclusion, the Greek economy's productivity challenge is deeply intertwined with its business structure and sectoral composition. By addressing these factors and implementing strategic interventions, Greece can work towards narrowing the productivity gap and achieving economic growth that is both sustainable and inclusive.
