Building a Global Competitiveness Landscape: Greece and Beyond
On June 14, 2022, the GFCC hosted a member’s exclusive monthly call with guest speaker Symeon Tsomokos, the Founder & CEO of the Delphi Economic Forum. Tsomokos led a discussion on the current state of competitiveness in Greece and introduced key ideas to be explored in upcoming events that the Delphi Economic Forum is partnering with the GFCC, including the “Building Competitiveness: From Local to Global” Conversation Series and the Global Innovation Summit 2022.
The first Building Competitiveness session will be held virtually on June 30th at 10:00 am EST and will review how priorities in competitiveness strategies are shifting worldwide in response to changes in the global scenario. GFCC founder and president Deborah L. Wince-Smith will moderate the session with speakers including Chad Holliday, Chairman of the GFCC; Symeon Tsomokos, Founder & CEO of the Delphi Economic Forum; Simos Anastasopoulos, President of the Council on Competitiveness of Greece and Chairman & CEO of PETSIAVAS S.A.; and Athina Chatzipetrou, the Chairwoman & CEO of the Board of Directors of the Hellenic Development Bank SA. They will discuss how the Ukraine War, increasing inflation, climate change, disruptions in supply chains and other topics are reshaping competitiveness strategies. Some questions that will be driving the discussion are: How will the current events around the globe shape future competitiveness? How should countries and local economies prepare to address the global reality?
The series will survey topics in the competitiveness landscape leading-up to the Global Innovation Summit, on November 14 to 17 2022, in Athens, Greece.
State of Greece
Between 2008 and 2018, Greece experienced one of the most devastating economic crises but has since recovered due to European loans and adopting austerity measures. Greece now stands as an example of government reform and advancement, particularly in innovation and digitalization. The resources available from the European Recovery and Resilience Facility have enabled the creation of the National Recovery and Resilience Plan (Greece 2.0). Greece 2.0 emphasizes a green transition, a digital transformation, employment skills and social cohesion (health, education, social protection), private investment, and the transformation of the economy. Additional initiatives in the country include the new National Strategic Reference Framework; the Competitiveness, Entrepreneurship, and Innovation Operational Program; Elevate Greece; Innovation Greece; and the Hellenic Research Centers.
Although Greece has a long way to go, the trend is positive, with improvements in global competitiveness and innovation rankings. Greece expects its current trajectory to continue partially due to a promising young talented workforce that will drive the innovation economy. Tsomokos has highlighted in his presentation that Greek companies are beginning to adopt a more innovation-friendly mindset, investing in new technologies and ideas. Driven by an ambitious policy agenda and an eagerness to use EU funds, Greece is in the process of enhancing its innovation capacity and digitalizing the country’s public services.
The War injects complexity into the world scenario
As the Russo-Ukrainian War continues, societies feel the impacts. Europe has a growing refugee crisis, with five million people displaced and rising. Targeted labor market policies, such as temporary wage subsidies to incentivize hiring, can help the countries receiving refugees. Facilitating skill recognition, providing language training, and fulfilling childcare needs are other initiatives that could help displaced people. After the war, resettlement, rebuilding infrastructure, and reconstructing Ukrainian society from all the damage will be costly.
The economic uncertainty deriving from the Russo-Ukrainian War is expanding. It has shown the world’s dependency on oil and natural gas, with soaring prices worldwide t, and the perspectives of energy rationing on the horizon in countries like Germany. The has fundamentally highlighted the need to couple energy transition with energy security, a critical policy issue worldwide, in Europe and for Greece and its neighbors.
The Ukrainian GDP is projected to contract by 45%[1] and Russia’s output is expected to shrink by 11% in 2022.[2] Looking more broadly at Europe, France, Germany, Italy, and the United Kingdom are projected to barely expand or even contract for two straight quarters this year.[3]
High Inflation
The rise in inflation has been seen worldwide. Global growth is expected to drop from 5.7 percent in 2021 to 2.9 percent in 2022.[4] The countries seeing the most significant inflation increases are Israel, Italy, Switzerland, Greece, and Turkey.[5] These countries are seeing anywhere from a fivefold to twenty-five-fold increase in inflation between the first quarter of 2020 and the first quarter of 2022. Before the Covid-19 Pandemic, there were relatively low levels of inflation globally, followed by flat or falling rates for the rest of that year and into 2021 and rising rates starting in mid-to-late 2021. The S&P 500 has sunk more than 20% since the start of January, while the Nasdaq has shed nearly a third of its value.[6] The fear of a recession has caused central banks to aggressively tighten monetary policy to combat inflation in some countries like the U.S., England, Switzerland, Australia, and Canada.[MOU1]
Mounting challenges
The world is facing a time when trans-national challenges like climate change, technological innovation, a global pandemic, and ethnic, racial, and political tensions confront nations and call for collective action. Discrimination, exclusion, and economic, social, and cultural inequalities are exacting a devastating toll and creating an acute risk of violence and conflict.
Climate change is becoming a more substantial threat all the time. After 30 years of climate diplomacy, which produced three global treaties, the world is still experiencing rises in global emissions.[7] The climate crisis will continue to displace people, increase local devastation, and disproportionately impact lower-income people. Action is needed, including the expansion of investments in cleantech — the GFCC Frame the Future report released in December 2021 already called for tripling the R&D investment in cleantech — and a rethinking of the role of governance and diplomacy to revamping effective climate policy.
Digital transformation has generated various benefits like keeping people, businesses, and public services connected, as well as creating opportunities for people in low and middle-income countries for connecting to global markets and economies for leapfrogging. This critical progress doesn’t come without risks. On the one hand, societies need to speed and scale up reskilling, with a focus on digital skills and literacy; on the other, all organizations, activities, and citizens become more exposed to cyber threats. Remote work, the Internet of Things, bring-your-own-device trends, and cloud initiatives make it easier for hackers to cyber-attack individuals, companies, and governments. Artificial intelligence allows for amazing things but has also given hackers new and more sophisticated tools, and raised new concerns about the use of technology.
The Covid-19 Pandemic has had a profound impact on security across the globe, influencing geopolitics, challenging social cohesion, and fueling violent extremism, populism, and disinformation. In many ways, it underscored global imbalances and challenged the global system. Many countries in the global South have suffered devastating economic losses during the pandemic, and many still need vaccines. Social divides caused by the Covid-19 pandemic, such as those arising from the lack of access to education, is still to be fully seen. On a positive note, the pandemic has accelerated innovation, as we noted in the Frame the Future report — a key priority should be to make the speed of innovation observed during the pandemic the standard — .
Summing up….
In the case of Greece, it is promising to see that the National Recovery and Resilience Plan (Greece 2.0), which uses resources from the European Union and was launched as a response to the pandemic, prioritizes investments in cleantech (and decarbonization) and digitalization. It is also auspicious that Greek leaders have been able to work across the aisle, create critical mass in society, and advance the competitiveness agenda — as the establishment of the Council on Competitiveness of Greece displays. Coming out of the financial crisis, Greece provides an insightful case to follow and learn from.
The world has entered a stage in which extreme events and crises are becoming increasingly frequent — nations, cities, organizations, communities, and individuals are called to strengthen their resilience capabilities and be better prepared to face turbulence. In this context, making sense of the global scenario has become more important than ever, and advancing the Frame the Future agenda has gained importance. We hope you can join us for the Building Competitiveness sessions and, beyond that, in the journey to draw and share learnings to advance competitiveness and prosperity. You can register for the event here.
[1] https://thedocs.worldbank.org/en/doc/18ad707266f7740bced755498ae0307a-0350012022/related/Global-Economic-Prospects-June-2022-Regional-Highlights-ECA.pdf
[2] https://www.worldbank.org/en/news/press-release/2022/04/10/russian-invasion-to-shrink-ukraine-economy-by-45-percent-this-year
[3] https://blogs.imf.org/2022/04/22/war-in-ukraine-is-serious-setback-to-europes-economic-recovery/
[4] https://www.worldbank.org/en/news/press-release/2022/06/07/stagflation-risk-rises-amid-sharp-slowdown-in-growth-energy-markets
[5] https://www.pewresearch.org/fact-tank/2022/06/15/in-the-u-s-and-around-the-world-inflation-is-high-and-getting-higher/
[6] https://www.bbc.com/news/business-61830923
[7] https://www.csis.org/analysis/future-international-system
