The Operational program digital convergence, a program of the Greek government, is funded to a large extent from E.U. Support Framework IV, which started in 2007 and will provide Euro 20.1 billion through 2013, to help finance Greece's modernization of its IT infrastructure and communication networks, among other projects. Digital Convergence will contribute to the digital convergence of Greece with the rest of the E.U. through the use of ICT. It is estimated that 1.47 billion has been allocated for this program through 2013 and focuses its implementation on customized ICT projects. The Digital Convergence strategic objective is threefold through its three Priority Axes: improvement of productivity by utilizing information and communication technologies; improvement of citizens' daily life through the use of ICT; and technical assistance and support of the application - with a specific emphasis on competitive Greek sectors such as tourism, shipping, culture and sports.
In 2010, the Digital Convergence Operational Programs were valued at 759 million Euros. Part of this budget was related to the announcement of forty-seven projects, budgeted at 100 million Euros and related to various commercial chambers, a company (the Information Society S.A. company), various cultural initiatives and research proposals. An additional 190 million Euros was provided by the government for the strengthening of the business environment. These funds were distributed as follows: 100 million Euros to the retail sector; 25 million for the production and distribution of digital content, 15 million Euros for a variety of IT functions, and 50 million Euros for the development of added value innovative services by ICT companies in Greece.
The Operational Program is expected to continue with the same intensity for 2011; indeed, there have already been two bids invitations in 2011. The first concerned the supply of advanced digital services related to development strategies for Labor and Social Security purposes, valued at 50 million Euros; the second invitation was for the supply of digital services to the Ministry of Health and Social Solidarity for the upgrade of the operational status of healthcare units regarding more efficient and transparent surveillance of expenditure and supply allocation of hospitals. The latter invitation was valued at 25 million Euros.
The Greek Ministry of Labor and Social Solidarity announced an upcoming tender regarding software for its e-Prescription Program. This is the second phase of the e-Prescription Program and will focus on the evaluation of data regarding medical prescriptions issued and public insurance expenditures. The value of the program is estimated at 12 to 15 million Euros annually and the tender is expected to be awarded in May.
The e-Prescription program is planned in three phases. The first phase involved the initiation of the pilot program and was completed in December 2010. The second phase is the aforementioned project regarding am e-prescription software provider. The third phase of the program is expected to begin in January 2012, with a 2017 completion date.
The intention of the Greek government regarding the e-prescription program is to increase transparency in medical prescriptions, the lack of which is extremely costly for the Greek government. The Greek government expects to reduce pharmaceutical spending through the use of this system by 1.4 billion Euros.
Greece may be one of the smallest European countries in population but it has been characterized by one of the highest growth rates in the Information and Communications Technology (ICT) sector, surpassing the European average. Today there are over 1,800 active companies within the Greek ICT sector, which employs over 100,000 people and contributes at 4.5 percent of the country’s GDP. More importantly, however, is that this sector is in a ‘developing’ state – point in case, Greece was among the top 10 rapidly developing countries in the world, for Broadband connectivity in the past year.
While the world financial crisis is taking its toll and may hamper expectations for the above growth trend, the prospects which are fueling the trend remain significant. Some of these opportunities lie in the current ‘digitization’ and ‘infrastructure modernization’ focus of the ICT sector, as well as Greece’s established market presence in Southeast Europe, the new E.U. Community Support Framework funds, and convergence of IT and Telecommunications(Telecoms).
Spending on the ICT sector in Greece is estimated at $19 billion this past year, specifically: $14.1 billion on Telecoms, $2.2 billion on computer software, $1.2 billion on software and $1.5 billion on services. In terms of segment split, the consumer segment accounts for 29 percent of expenditures and the remaining 71 percent represents business and public sectors combined. Furthermore, rigorous activity exists in microchip design and software, as well as upgrading of Telecoms infrastructure and e-services.
The ICT products leading the growth to-date are software products, Telecoms access and internet services. The three main customer categories for internal market demand are: businesses (70 percent), consumers (20 percent) and public sector (10 percent), with 98 percent of businesses having access to the internet and 75 percent of which hold a broadband connection.
Some of the main opportunities characterizing the Greek ICT sector are as follows:
Greece serves as a springboard into the emerging Balkan economies. The country has positioned itself as a regional hub for the Balkans, for financial and other sectors, to complement its traditional role as a tourism center.
Funding from E.U. Support Framework IV, which started in 2007, and is planned to provide EUR 20.1 billion through 2013, is helping to finance Greece’s modernization of its IT infrastructure and communication networks.
Also, with Digital Strategy as one of the Government of Greece’s(GoG) key objectives, Greece is targeting broadband convergence to the E.U. by 2010 and has already set in motion the new operational program “Digital Convergence”, which features a EUR two billion Fiber-to-the Home(FttH) project, scheduled for tendering in 2009.
GoG incentives assisting the focus and growth of the ICT sector include lower corporate tax rates (from 35 percent in 2004 to 25 percent, as of this year), generous investment incentives reaching up to 60 percent of project funds, ongoing focus on bureaucracy reduction, and substantial increase of EU funded projects.
Furthermore, Greece has signed an Information Technology Accord under the WTO to eliminate tariffs on the majority of IT products.
Activity in the private sector in terms of increased profits, productivity, and investment, as well as consolidation through mergers and acquisitions is creating extended IT needs. Moreover, the expansion of the E.U., and the subsequent progressive regionalization of many industries, is forcing many Greek companies to compete in infrastructure, processes and capabilities with their international competitors. Hence, companies are modernizing and implementing new systems to handle everything regarding international financial reporting standards, electronic data interchange and materials management operations guideline capabilities for supply chain processes.
Growing demand for professional IT solutions: The focus of the Greek IT market is gradually shifting towards value-added offerings designed to solve specific business problems. On the supply side, vendors are attempting to increase their margins by positioning themselves as IT solution providers. On the demand side, and as IT systems are becoming integral in running efficient and prosperous businesses, the requirement for IT-related services and business solutions is steadily increasing.
SME growth potential: With the enterprise segment practically saturated, the thousands of small/medium businesses in the country constitute a more viable target for vendors. As SME’s make considerable equipment and services investments, in order to remain competitive, vendors are adapting their products and targeting them with standard and moderately priced services and software. This environment is driving an increase in IT spending, the development of sector-specific solutions as well as alliances, and well-developed partner networks with service providers to facilitate solutions implementation.