Monday, April 2, 2012

Greece should bet on the Internet to spur economic growth, Boston Consulting Group says

The global management consulting firm Boston Consulting Group says the Grek government should look to South Korea as a model on how to move its economy forward, investing in online technology.

The consulting firm said that while the South Korean economy ranks first in online retail and high Internet usage, with 7.3 percent of its gross domestic product (GDP) tied to the Internet, Greece lags far behind with only 1.2 percent of its GDP tied to online business, or 2.7 billion euros in 2010.

The Boston Consulting Group study, "Internet Production: The Internet as a growth engine for the Greek Economy" was sponsored by Google and presented last week in Athens to political and business leaders.

"This holds a tremendous opportunity," said Stephen Loukakos, Google head of Greece, "the Internet can offer much to the growth and competitiveness and contribute to the recovery of the Greek economy - promoting exports and improving business productivity."

According to the report, the tremendous gap between imports and exports – Greece imports 1.8 billion euros worth of good, while only exporting 0.7 billion – can be traced to the lack availability of many goods through Greek retail channels online.

To improve this situation the study suggests that small and medium enterprises (SMEs) should move online, that the online infrastructure should be improved, that the government should promote online retail, that the government itself should move online, and there should be greater investment on education using digital media in order to "development of knowledge and confidence in the new media."

"The Internet will not solve all the problems in Greece. But it may serve as a powerful tool for promoting economic growth and create new jobs, particularly for young people. The Internet may indeed be a lever to accelerate recovery of the economy," the study concludes.