Athens Microsoft President Brad Smith personally came to Athens to announce his plans and Prime Minister Kyriakos Mitsotakis greeted him in front of the most beautiful backdrop the country has to offer – the Acropolis. After all, it is about a significant investment: Microsoft is building three data centers in Athens for around one billion dollars. This will make Greece the eighth regional location for the global cloud computing platform Azure from Microsoft in the EU.
The company will also provide digital skills to 100,000 public and private sector employees and learners over the next five years. “Greece is the first country in Southeast Europe in which Microsoft is building data centers,” says Alex Patelis, chief economic advisor to Prime Minister Mitsotakis. This was “a vote of confidence in the government’s reform agenda,” Patelis told Handelsblatt.
The former crisis country now needs nothing more urgently than investments. In the years 2008 to 2016, Greece lost a cumulative 26 percent of its gross domestic product (GDP). Income fell by a third and private wealth shrank by 40 percent. The Greek industrial association SEV puts the investment gap from the crisis years at 100 billion euros. In 2019, investments reached just eleven percent of GDP. Before the crisis it was 26 percent, in the 1970s it was even between 30 and 40 percent. The average in the EU is just over 20 percent.
Microsoft President Smith says Greece “emerged from the crisis with new strength”. That is one of the reasons for his company to invest here: “We don’t do that in every country, and we did not make the decision easy for ourselves.” The government’s successful corona crisis management “has not escaped us,” said Smith . The new data centers will create “a new ecosystem for software developers” in Greece.
The global group from Redmond is not the only IT company that is drawn to Greece. German software service providers are also discovering Hellas. One of the most sought-after destinations is the northern Greek university city of Ioannina.
After Wiesbaden-based P&I AG and Prodyna SE from Eschborn, at the beginning of the year Teamviewer from Göttingen, a leading global provider of remote connectivity solutions, opened a development site in Ioannina. Thanks to numerous well-trained graduates from the field of software development, the city is an attractive environment, says Mike Eissele, CTO of the company.
More high-tech investments
“Ioannina is a magnet for young IT talents and has great potential as a Greek tech hub,” says Eissele. Ioannina’s Mayor Moses Elisaf already sees his city as “Greek Silicon Valley”.
Mitsotakis advisor Patelis expects further high-tech investments. The upcoming auction of the 5G licenses at the end of the year should provide a boost. Amazon Web Services is about to open a branch in Athens. “We are currently working with other potential partners,” says Patelis, but will only reveal the names “when everything has been finalized”.
Even if the volume of foreign direct investment in Greece is still low, the quality is right: In the past three years, 15 percent has been in the IT sector. Greece is not far below the European average of 19 percent.
The consulting firm Ernst & Young Greece (EY) also attests that the country has improved investment conditions in its “Attractiveness Study 2020”. Two thirds of the entrepreneurs surveyed by EY cite the country’s political stability after the election of the conservative government in July 2019 as a particular advantage.
56 percent emphasize the sustainability of Greek climate policy, especially in the area of renewable energies. Seven out of ten entrepreneurs surveyed expect that investment conditions in Greece will continue to improve over the next three years.
The study names the human capital, the good telecommunications infrastructure and the quality of life as Greece’s strengths, which 81 percent of the interviewed entrepreneurs named as plus points. Prime advisor Alex Patelis also sees his country as well positioned.
With an attractive climate, low taxes and a state-of-the-art IT infrastructure, Greece can not only attract tech companies, but also “digital migrants”, says Patelis. He sums up the strategy in a play on words: “We have the sun, now we also get the cloud.”
More: Corona is again driving Greece into deep debt.