A digital reboot for the Greek economy
Leveraging on the emergence of a digitalized global economy and its human capital advantage (albeit largely unexploited), Greece could be transformed into a highly digitized economy and a regional ICT hub.
Based on our estimates, a convergence to the institutional standards of the most digitally advanced Balkan country (i.e. Slovenia) would boost the ICT sector size and increase the share of ICT specialists to 2.3 per cent of total employment (from 1.8 per cent in 2018) – thus, generating extra value added of €1.1bn.. Moreover, under a scenario of both institutional and infrastructure upgrade (i.e. converging to Slovenia's standards), the positive effect to the economy would almost double. In particular, the following steps could be considered:
- Foster a speedy network upgrade (5G and fiber)
- Establish a coherent national strategy for public sector digitalization
- Upgrade the legal framework for entrepreneurship and the judicial procedures that safeguard it
- Introduce policies and incentives for digital training
Apart from the direct effect of turning Greece into a digitized economy, such reforms could transform the Greek growth model by providing a "digital reboot", and according to our estimates from the NBG Digital Growth Model, boost annual GDP growth during a course of 5 years by 2.6 percentage points under the institutional-reform scenario, and by 6.4 percentage points under the parallel infrastructure-upgrade scenario. Also note that these estimates underestimate the total benefit, as this transformation would probably also attract physical investment – thus boosting growth further.