New SEV Chairman, Dimitri Papalexopoulos speech at SEV Annual General Meeting

Prime Minister,
Dear members of the Board of Directors,
Dear Friends,

I welcome you, in turn, to the open event that is traditionally held following the SEV General Meeting. I’m sorry that conditions are keeping us apart, and this opportunity for us to meet adds to the endless list of online events in recent months.

I would like to start by thanking the members of SEV for putting their trust in me and in the new Chair of the Executive Committee, Efthymios Vidalis. We will do everything in our power to prove worthy of this honor.
And also worthy of succeeding Thodoros Fessas, who worked tirelessly for the Federation and leaves behind a strong and dynamic organization that is looking to the future.

As the Chairman of our Federation, he managed situations under adverse conditions, while at the same time strengthening the organization and its voice in the public debate.

With ethos, hard work and common sense, he succeeded in collaborating with everyone. He did important work, defending pragmatism and participating actively and constructively in the social debate, honoring his role as the leader of an institutional social partner.

During his chairmanship, SEV grew. It gained 340 new members, flourished throughout the Regions of Greece, and put great emphasis on the openness of Greek enterprises. Today, the employees at companies that are direct members of SEV number some 200,000 [and many more if we include affiliates of SEV members].
Thodoros, on behalf of everyone, I thank you for all of this and much more. It would be a great thing if Greece had more leaders who understood their role in public life as you do.
***

My address today will focus on five key topics:
First, on how we perceive SEV’s role.
Second, on the need for enterprises to get closer to society.
Third, on the importance of industry’s increased significance in the economy as a whole.
Fourth, on the three primary horizontal priorities we need to embrace: the digital revolution, enhancing skills in the labor market, and green growth.
And last but not least, on managing the crisis caused by the pandemic.

1: SEV’s twofold role
I’ll start with how we perceive SEV’s role.
The Hellenic Federation of Enterprises (SEV) has its roots in industry. It strives to effectively represent manufacturing and the importance of manufacturing for the Greek economy.
What’s more, the strengthening of manufacturing in Greece is an extremely critical and pressing issue, which I will come back to shortly.

In this effort, SEV incorporates the whole multidimensional ecosystem of enterprises that comprise industry: producers and providers of knowledge, enterprises large and small, in the center but also in the periphery.
At the same time, in recent years we have made a conscious effort to evolve into a voice for all diligent competitive entrepreneurship in Greece.

Not just because many of the issues we deal with, such as taxation, labor issues, justice, training, pension policy, the regulatory environment or funding, are horizontal and concern all the sectors of the economy.
But mainly so that we can gain a common and strong voice for all of us who believe that diligent entrepreneurship that goes hand in hand with the needs of society is perhaps the most important component of long-term growth.
This is why, today, many of the most successful enterprises in all the sectors of the economy have responded to our call and become active members.

With their assistance, we are working to upgrade the whole economy.
We have not earned our right to be heard, to contribute creatively to shaping public policies and to develop new enterprises on the basis of our name or our formal title of Social Partner.
We have earned it by creating solid proposals on every issue, as well as through our efforts to transcend the short-sighted thinking of union representation.

We have earned it by striking a balance between the concerns and interests of our members, on the one hand, and the need for changes. Changes that – even if they seem difficult or unpopular today – we defend when we believe they contribute to the progress of enterprises and society as a whole.

To the degree that we pursue a broader role – that of first among equal representatives of organized entrepreneurship in our country – we have to earn it every day through our actions.
In the end, this twofold nature of SEV – representation of industry and of entrepreneurship in general – is not a dilemma.

We embrace both roles.
And we work to serve them at the same time. Of course, we can do better, but we are on the right path. The significant increase in our members – from all sectors, including industry – confirms this.

2: Enterprises and society
The second topic I would like to address is the relationship between enterprises and society.
Moving forward, we believe that building a new relationship of trust between enterprises and society is one of the key goals that we must pursue.

It is a fact that society often does not embrace us – does not trust entrepreneurship. It sees entrepreneurship as something distant. And we have to admit that this suspicion is, to some extent, understandable; it isn’t just the result of populism.

The economy we are striving in is small, with a tradition of introversion and over-regulation. It is an economy in which honesty is rarely rewarded and failure to meet one’s obligations is rarely punished. As a result, there have been distortions of competition, as well as cynical practices that cause many people to understandably question enterprises’ contribution to the common good.

Today, the way enterprises have responded to social needs, in combination with the maturity and awareness of our society, has created the conditions for throwing off the burden of the past.
At SEV, we believe it is our responsibility to reverse this perception. Strengthening of the relationship between enterprises and society depends first and foremost on us, the enterprises. Starting with a willingness to take a hard look at ourselves and make improvements.

The more we evolve for the better, the stronger our relationship with society will become. The more we invest in meritocracy, training and development of our employees, in open competition, in innovation, in sustainable development, in good governance and corporate social responsibility, the more we can reduce this distance. And the more entrepreneurship can legitimately ask for the state’s assistance in pursuing growth.

A critical mass of enterprises has embraced this need. And SEV will strengthen this trend through solid proposals for reforms, provision of knowledge, promotion of good practices that exist in our country and are gradually becoming more widespread.
The state, in turn, can contribute to the liberation of the economy’s productive forces. Creating a clear and serious regulatory framework that supports us. Avoiding the role of entrepreneur, in which it has repeatedly failed. Promoting the much-discussed but necessary reforms in licensing, spatial planning, the speed with which the courts issue rulings, reduction of red tape, tax legislation. Reducing, as a priority, the tax burden of labor (ideally in a way that encourages young people who have gone abroad to return home). Supporting innovation and effective linking of education with the needs of the modern market. Helping to make entrepreneurship fashionable among young people; putting it in our schools; marrying it with our educational system.

Prime Minister,
Enterprises see in you someone who sincerely believes that entrepreneurship is part of the solution for the future of our country. We all agree that in countries where society, enterprises and the state come closer together, there are significant benefits for everyone. SEV will be the first to contribute in this direction, and it hopes for a positive response.

3: Shift towards manufacturing
The third topic I would like to discuss today is the emphasis we plan to put on the development of industry.
Since the mid-1980s, industry’s added value for the economy has fallen. In part, this was the result of unavoidable international trends. But it was also the result of incorrect choices. Think back to the unbridled consumerism and erosion of production at the beginning of the century.
Industry’s current direct participation in GDP is estimated at about 10%. But this percentage undervalues its contribution.

According to IOBE data (2018), nearly 1/3 of GDP and employment derives from the direct, indirect or induced impact of manufacturing.
Manufacturing’s total multiplier in GDP is 2.8, and 3.5 in employment, benefiting services and commerce and creating a vital ecosystem of SMEs.

Manufacturing accounts for 44% of total exports, pays salaries that are on average significantly higher than in the rest of the economy, and contributes more than its share to state revenues.
So, manufacturing’s contribution to GDP has multiplying benefits.
It is thus no coincidence that the EU’s goal is to increase manufacturing’s participation to 20% on the European level.

SEV’s primary goal is to increase industry’s contribution to GDP from 10% to 15% over ten years.
If we achieve this goal, we estimate that, gradually, we will see the creation of 550,000 new, well-paid and stable jobs in our country.
To understand of the magnitude of the shortfall, as well as the magnitude of the opportunity, we need only look at what is happening in other European countries that are quite similar to Greece, such as Portugal.
Portugal exports €53 billion in industrial products, compared to about €30 billion in our country.
Due to this industrial openness, 17% of employees work for industrial enterprises, compared to 9% in Greece. SMEs benefit similarly, contributing 57% of exports, compared to 45% in Greece.

This may seem like an ambitious goal, but the circumstances are better than they have been in many years.
It helps that the EU is moving in the same direction. That the geopolitical changes are creating opportunities for Europe’s supply chains to move closer to home. That access to technology is easier than ever before. That Europe is providing funding that can impart momentum. That the long years of the crisis (in combination with the difficult circumstances for our tourism sector) have created broad agreement on the issue.

There are sectors in which, as a country, we have a comparative advantage, and we can develop these sectors. Metals, food, pharmaceutical industry, green energy, mineral wealth, shipping and some high-tech sectors are just a few.
We can certainly do better. What do we need in order to achieve this?

This is a broader debate that has to be carried out immediately. However, we would include the following as key ingredients for success:

– Continuation and acceleration of the much-discussed reforms (which I mentioned earlier), which concern mainly removing obstacles that (all) enterprises have to deal with.
– Drawing up of a clearly defined industrial policy, in line with that of the EU.
– Securing competitive energy prices.
– Systematic bolstering of our ability to innovate.
– Earmarking of adequate funding for investment in necessary infrastructure – especially digital, energy, circular economy and logistics infrastructure.
– And finally, our alignment behind certain critical imperatives of our time: the digital revolution, the necessary skills for our labor force, and green growth.

Prime Minister,
Global economic and geopolitical developments have shown the importance of domestic industry and a modern industrial policy. On the EU level, the issue is already being approached pragmatically and with a sense of urgency. The corresponding debate in Greece has been late in coming. SEV is prepared to participate in and give all its support to the collective effort required to achieve the goal.

4: Three horizontal priorities
I would like to make a separate and brief reference to the horizontal priorities I just mentioned: the digital revolution, the necessary skills for our labor force, and green growth.
each of the three holds risks and opportunities for Greece. SEV has developed multifaceted action on each of the three. We will commit ourselves further to each of the three.
We support and strengthen the upgrading of Greek enterprises’ digital capabilities, so that they can close the digital gap between Greece and most European countries.
The coronavirus crisis gave us an unexpected push in this direction. A major step forward was taken with digitization reforms in the public sector, and the government and all those who contributed to this deserve our congratulations. Now we have an opportunity to pick up the pace, all together.We believe in the need for substantial upgrading of the skills of our current and future human resources – of young people.
We intend to take additional initiatives to support the linking of education with the labor market, in the hope that the time is finally ripe and there is consensus on a major step forward on this critical issue.
We are investing in strengthening our collective capability to innovate, as a key condition for growth with well-paid jobs. Greece has excellent scientists, at home and abroad. If we succeed in bringing them closer to our enterprises, to the market’s applied innovation, we all stand to gain. And at the same time we will support start-up enterprises that have enormous potential.
We actively support European and national initiatives for green growth, circular economy and energy transformation. At the same time, of course, ensuring that the competitiveness of industry is protected from potential unfair competition from outside the EU. As a country, we have comparative advantages on which we can build.
These challenges have become a focal point throughout the world, as well as in Greece. The changes entailed are momentous and the pace of the changes is very rapid. We need to see everything we do in the light of responding to these challenges.
Prime Minister,
You have promoted these priorities as a government. However, we need to go farther faster. We will be your allies in promoting these priorities with determination.

5: Coronavirus and management of the crisis
If we had held our General Meeting a few months ago, my speech would end about here. These, I would say, are the challenges we have before us. I would speak with cautious optimism.
The coronavirus crisis changed everything. 2020, at the very least, will be a very difficult year.
Many enterprises are once again concerned about survival. The 30-year-olds who have experienced two successive crises are worried about their careers. Expectations were shattered at the most critical moment: just when we believed we had left the economic crisis behind and the time had come for us to surge ahead.
The government – whose successful management of the health crisis so far has been acknowledged by everyone – has some difficult decisions to make about how to mitigate the impact of the economic crisis: with what priorities and what resources. Our proposals are along the following lines:

Responding to the pandemic and protecting human life are still the first priority. We continue to comply with the measures for protecting the health of our employees, our customers, our suppliers. At the same time, we support the national effort, beyond our business footprint, through donations of equipment and logistical support [our members have already donated tens of millions].

Second, we believe that the economic measures, beyond the protection of vulnerable groups, must support jobs and production (of products and services), to safeguard as much as possible the fragile health of our country’s productive fabric. The initiatives the government has already taken are in the right direction.

Third, responding to the crisis must not distract us from our strategic goals or serve as an alibi for avoiding the necessary reforms, which have to move forward more quickly.

Fourth, the coming European funds give us a new opportunity to break free of the history of missed opportunities and wastefulness of the past. Strengthening investments in critical infrastructure, as well as private productive investments, help in the long term and strategically.
I’d like to emphasise something at this point. Private productive investments weathered the crisis. Indicatively, from 2007 to 2017, investments in industry fell by 5%, while GDP shrunk by 25%.

However, this is not enough. The implementation of domestic investments, along with attracting foreign investment, remains at significantly lower levels that what is required for long-term sustainable growth. Increasing these investment remains a major challenge, and we hope to contribute substantially to meeting this challenge. There is cause for optimism: In recent years, the taboos of the past were broken. It is especially positive that, in spite of any individual disagreements, there is consensus among the major political parties that investments and risk are necessary if the country is to move ahead.

And something else. The health crisis has brought an opportunity. Our common goal pushed us to work collectively and effectively. The Opposition rose to the occasion. It seems that a more hopeful model of debate and dialogue is emerging, both in politics and in society.

We have to capitalize on this window of opportunity before it closes. This is our chance to resolve issues that for years have kept our country from making the transition to a new productive model.

***
Ladies and Gentlemen,
We talked about the need for trust between enterprises and society, and how we can build this trust, taking the first step ourselves, as enterprises.
About the need to transform our traditionally closed economy into an open, innovative and competitive economy.
About the Greece that produces and the importance of manufacturing.
About how we can accelerate the younger generation’s mastery of skills needed in the future, in a changing world, creating the conditions for more opportunities and better salaries.
We talked about what’s at stake in the digital revolution and green growth.
Finally, we talked about the major issue of working together; whenever we succeed in doing so, we show our best selves.
We are well aware that all of this cannot change by magic, automatically, overnight. It takes time, commitment, collaboration.
In the pandemic crisis, we, as a people, showed the whole world – and, even more so, ourselves – that we can do better.
And this helps us to strengthen our collective self-confidence, which we had lost for a time.
At SEV, we believe in the Greece that perseveres and succeeds, through collective effort. In all of the sectors and on all of the priorities, we will endeavor to deliver tangible and measurable results for enterprises, for the economy, for the progress of our society.
***
Thank you.