R&D in Greece and the debt crisis

Posted by Blogactiv Team on 28/11/12

By Stavros Papagianneas

Greece is in a deep and protracted economic recession. Austerity measures are hitting researchers in the country hard in their pockets. The economy shrank 18.4% in the past four years and the IMF forecasts it will contract another 4% in 2013 as Athens struggles to reduce debt in exchange for billions of loans.

Athens got a €110 billion bailout in 2010 from eurozone members and the IMF to rescue its embattled economy.  A new €130 billion bailout was approved this year. In return for the loans, Greece is making major austerity cuts which have consequences also for R&D in the country. Wages in the public sector, where a lot of scientists are employed, were reduced by 20%. More than hundred thousand of public sector jobs should be cut. Public funding for universities and research institutes was cut up to 50%.

The country has requested international research organisations like ESA to temporarily reduce its annual contribution from €14 million to €8 million for 2012, and it is under negotiations with CERN for a similar reduction.

But while Greece received billions of help from the Troika (EC, ECB, IMF) overseeing its bailout, a little money is going to the Greek government to pay for important public services. Instead, most of it is flowing directly back in the lenders pockets. The bailout that was supposed to help Greece is mainly servicing the interest on the country’s debt. Meanwhile, the Greek economy continues to decline, and together with it country’s R&D.

The high unemployment which reached a rate of 25,1% this year, is leading to a further challenge. The country loses increasing numbers of their best and brightest to top universities and careers outside the country. Thousands of highly educated workers are fleeing Greece as the crisis batters their homeland.

Successful academics and scientists are leaving for better pay and work conditions. Some have even gone without a job offer, usually to places such as US, Australia, Canada or Germany. The most destructive brain drain is of the young. Since 2008, ever more young people have gone, often to foreign universities.

Nevertheless, the research infrastructure could be sustained by the EU Structural Funds (for Greece there is € 1 billion earmarked for R&D) and the EU’s Seventh Framework Programme for Research (FP7).

According to the Innovation Union Competitiveness Report 2011 of the European Commission, R&D in Greece remained stagnant at 0.58 % of GDP in the last decade. The stagnation is due to the fact that the already limited private investments in R&D further decreased. The EU average expenditure is 2.01%.

Another issue for the low R&D performance is the inflexible research and university system. Conditions within the country are not compatible with researchers’ aspirations for a fulfilling scientific career. There is luck of mechanisms to reward research and multiply its impact. There is not enough competition and evaluation of performance.

However, Greek research is of a good degree of quality and shows a considerable achievement. The country is well placed regarding scientific production, reaching close to the average EU figures: 438 co-publications per million inhabitants against 491 for the EU average.

Several internationally competitive research institutes have managed to flourish despite low government investment. Greek scientists have also been very successful in winning funding from the European Commission’s Seventh Framework Programme (FP7) of research.

As of March 2011, a total of 8.157 eligible proposals were submitted in response to 248 FP7 calls for proposals, involving 12.177 applicants from Greece (4,57% of EU-27) and requesting € 3.798,98 million of EC contribution (4,30% of EU-27)

Greece participates in 1.205 signed grant agreements, involving 14.476 participants of which 1.769 (12,22%) are from Greece benefiting from a total of € 3.950,69 million of EC financial contribution of which € 481,91 million (12,20%) is dedicated to participants from Greece.

In addition there are some encouraging initiatives like the cooperation with China. The General Secretariat for Research and Technology (www.gsrt.gr) has launched in February 2012 the first call with a budget of € 6 million for a bilateral R&D programme supporting collaborative research between Greek and Chinese companies.

Corallia (www.corallia.org) is a public-private partnership project meant to boost competitiveness, entrepreneurship and innovation through cluster-development support activities.

ETEAN SA, the Hellenic Fund of Entrepreneurship & Development (www.etean.com.gr) was established with an initial share capital of € 1,7 billion , of which € 1,5 billion are Greek government bonds and the rest cash. It serves as an additional tool to the financial market for SMEs support.

BIC of Attika, the Business and Innovation Center of Attika (www.bicofattika.gr), is a non-profit and non-governmental organisation, offering consulting services to private companies and local authorities in order to enhance their competitiveness and efficiency.

The next few years will undoubtedly be extremely tough for Athens. Actions to foster the research and innovation capacity will depend significantly on: the financing from EU Structural Funds; finding better ways of absorbing EU funds; the successful reform of the inefficient research and university system; the capacity to reinforce local innovation; a more dynamic relationship between public and private sector; simplifying bureaucracy and cutting red tape in order to improve access to finance for SMEs. Such actions will lead to an important job creation and a win-win situation for both public and private sector.

Stavros Papagianneas is a former Communication Officer for the Directorate General for Research and Innovation at the European Commission and Spokesperson for the Cyprus Permanent Representation in Brussels. He is currently an independent Senior Strategic Communications Consultant.

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