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Regional development policy as an engine for local industrial development
Early in March 2007 we presented the second annual report produced by
the Documentation and Studies section of the Federation of Industries of
Northern Greece (FING) on the “Financial Profile and Performance of the
Industrial Sector in the Northern Greek Arc”. Since the report is
presented extensively in this bulletin, in the pages immediately
following this article, I shall confine myself here to a review of its
principal findings. It should be noted that the balance sheet data used
refer to the period 2002-2005, a span of four years, which is long
enough to support reliable conclusions about the condition of the local
industrial sector.
The overall picture that emerges is extremely worrying for the future of
industry in the four regions that compose the Northern Greek Arc. For
reasons of space I will touch only on profit margins, which in my view
constitute the single clearest indicator of the crisis affecting the
local production system. Subtracting inflation from profit margins for
the four years studied yields the “real net profit margin”, and it is
less than 1%. Internationally, investor risk is also subtracted from
profit margins to find real net profit margins. Assuming an investor
risk factor of around 2%, which would be considered conservative in
international practice, the final real net profit margin in this region
is clearly negative. And that is before deducting the income tax our
companies pay.
What does this grim picture tell us? That the regional industrial sector
has been hard hit by a variety of factors in the domestic and
international business environment and that if the proper measures are
not taken the crisis will worsen and the consequences on both the social
and the business level in Northern Greece will be extremely painful.
As everyone knows, FING is demanding stringent and stable regional
development measures to help the local production system work its way
out of the crisis.
Let us not forget that we are now operating in conditions of total
economic freedom. This being the case, the Greek provinces, and
particularly the four regions that form the Northern Greek Arc, which
share land borders with the neighbouring Balkan states, are called upon
to take action in conditions characterised by:
• relocation of production from areas where production costs are
considered high to areas where it is possible to produce the same
products more cheaply,
• intense competition with other countries and regions for direct
foreign investment,
• redistribution of production forces worldwide, and therefore on the
regional level as well,
• adoption of innovations and incorporation of new production
technologies,
• globalisation of economic activities and increasing reliance on
outsourcing, and,
• an investment duality, dictated by the dilemma of choosing between
productive investment and investment in securities.
What is urgently required, therefore, is the development of integrated
regional interventions, and not fragmentary measures to reinforce
certain “situations”, which lead only to passing improvements in the
regional economy.
As we at FING see the situation, strengthening regional competitiveness
requires:
1. ensuring that the regional development actions planned will have
long-term, and not ephemeral, benefits for the region,
2. pouring as much as possible in the way of resources into the local
production system,
3. avoiding any delay either in planning the actions or, and even more
importantly, in the absorption of resources for the implementation of
the specific actions, and finally,
4. it must be remembered that regional development is not possible
without social cohesion, which must be sought and established as a
factor of global development.
Only with the realisation of the above interventions will it be possible
for local businesses to survive the crisis, restructure themselves,
develop an international dimension and, finally, contribute positively
to regional development and regional cohesion.
Previous President's Messages
Zero profits for processing industries in Northern Greece in 2010, with one in three businesses reporting losses
Only daring decisions will take the country out of this impasse
The Federation’s Proposals for development
The need to take measures to immediately bolster the economy and improve business competitiveness
A new year – new expectations for growth and development
Developmental measures to offset unemployment benefits with job subsidies
Enhancing "Greek Value" by resolving problems that drag on
Greece’s rise in the IMD World Competitiveness Yearbook ranking is encouraging news amidst the crisis
The Federation of Industries of Northern Greece making a decisive contribution to manufacturing strategy up to 2020
The government's immediate priorities in 2010 to develop the infrastructure in Thessaloniki and boost the competitiveness of manufacturing enterprises
Expectations from the new government: the manufacturing sector should be the new government’s focus
Industry should be among the Government’s policy priorities
Industry centre stage again
Proposals for avoiding the financial crisis
Bold decision-making for avoiding the financial crisis
Prospects for growth in Northern Greece in an environment of international crisis
Investment Law and Northern Greece
The market of izmir: the next goal for outward-looking enterprises of
northern greece
The
new government’s aspirations for thessaloniki and northern greece:
fing’s proposals for development
Thessaloniki and Northern Greece in International Markets
Regional
development policy as an engine for local industrial development
Global
orientation, productivity and realistic management of the National
Strategic Development Plan (NSDP). The challenges for 2007
Investment Law and Northern Greece
The new
legislative framework for research and technology in Greece: a
government nod of approval for the proposals made by the Federation of
Industries of Northern Greece (FING)
Thessaloniki has the potential to become the second pole of development
for Greece and the headquarters for development organizations nationwide
Changing
attitudes to combat unemployment – Proposals for creating closer links
between education and production
Support
for the Regions: From now on, policy actions and not just policy
announcements
The
business community – a force for social cohesion in Northern Greece
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