Endeavor Greece Survey: Greek Business Exodus
Endeavor Greece, the global non-profit organization supporting high-impact entrepreneurship, conducted a survey in Greek companies to assess the degree to which they plan to transfer their headquarters or operations abroad. The survey was conducted on a sample of 300 companies of various sectors and sizes, between March 23rd and 31st 2016.
According to the survey findings, 39% of Greek companies consider transferring their headquarters and/or operations abroad. This figure has doubled compared to a similar Endeavor survey, conducted in July 2015, right after capital controls were enforced. This number suggests that more than 9,000 small, medium and large companies in Greece are currently considering relocation abroad. At the same time, 15% of the sample companies state that they have already transferred HQ abroad.
Companies in technology and healthcare are most willing to relocate whereas companies in agriculture and consumer goods appear to be more willing to stay in Greece (80%).
The main reasons companies continue to do business in Greece are legacy and local market knowledge (53%) as well as market opportunities, even during the crisis (51%). High quality human capital is also among the main drivers (39%), along with low cost human capital (20%). Raw material and quality of partners follow. It is worth mentioning that none of the respondents mentioned State support as a reason to keep doing business in Greece.
On the other hand, the main reasons to relocate are tax instability (60%), access to funding (55%), taxation level (51%) and bureaucracy (42%). Capital controls and Greece’s negative image abroad are considered less important.
As expected, the reasons to keep doing business in Greece differentiate per sector. In particular, in traditional sectors, such as consumer goods and manufacturing, legacy and market knowledge are the prominent factors. For companies in agriculture and tourism, in which Greece has a competitive advantage, “market opportunities” is defined as the most popular driver. In sectors driven by innovation or undergoing restructuring, such as technology, healthcare and financial services, high quality of human capital is perceived as the decisive factor.
Contrary to the dominant belief that Greek companies resort to countries like Bulgaria for their relocation, the most popular destination is actually Western Europe. Half of the respondents would choose that region due to stability and access to funding. 10% of the sample – especially tech companies – choose US for the same reasons. Cyprus is also among the popular destinations (16%) due to stability and low taxation. Low taxation is also the main motivation for a company to select Bulgaria, which however represents just 5% of the respondents.
Greek business leaders do not feel optimistic about the future, as 56% of the respondents believe that things will only get better after more than 5 years, while just 9% foresees improvement within the next two years. These figures are significantly different from the findings of Endeavor’s survey in May 2014, when 64% of the respondents had answered that they expect things to get better in the next two years and just 4% had answered that improvement will come in more than five years.
It is worth mentioning that most of the respondents (80%) state that if they started their business or career today, they would do it abroad rather than in Greece.