Can The Cradle Of Civilization Carry The FinTech Torch?

With a location right on the crossroads of North, South, East and West, Athens, Greece is known as the “cradle of civilization,” but the location also delivers on a growing mix of offerings as a global tech hub. In this week’s installment of PYMNTS’ Weekly Tech Center Roundup, we discover how one of the oldest cities in the world is cultivating a young and vibrant tech environment.

Before we jump into the post, here are a few quick facts about Athens and its tech scene:

Athens is the capital city of Greece and has an estimated population of 3.75 million people.

As one of the oldest cities in the world, Athens has continually been inhabited by people for at least 7,000 years.

The country’s current Foreign Direct Investment (FDI) is €411.5 million, but this amount is expected to drop to €150 million by 2020.

Athens ranks fifty-sixth on the list of the top 60 places on this year’s European Digital City Index.

FinTech is gaining momentum in the city, with a 40 percent rise in card transactions being recognized since capital controls were imposed back in July 2015.

As one of the oldest cities in the world, Athens offers residents a wide range of rich cultural and historical experiences, but the city is also working to establish a thriving tech environment as well.

But in recent years the country has faced its fair share of economic turmoil and political unrest, which has forced many to take their eyes off the tech innovation prize. The startup and tech community in Greece faces many challenges, including political uncertainty, tax increases and heavy regulations.

While the road to economic recovery is not an easy one, many believe the country has what it takes to grow and flourish as a global tech center despite its troubled economy.

“Though Athens is still suffering from symptoms of the debt crisis, it does have competitive advantages that appeal to tech entrepreneurs,” explained Demetri Argyropoulos, founder of Avant Global, a global advisory firm that also has an VC arm. “A well-educated, highly skilled and talented workforce combined with low personnel and operating costs give an advantage to those seeking opportunity there. Grecians who lost middle-class employment as a result of the crushed economy need new careers as a result of dwindling industry jobs — they’re forced to take bigger risks, and that’s been a big factor in driving innovation there.”

As a serial entrepreneur and native Grecian, Argyropoulos has first-hand experience of Greece’s challenging tech landscape but believes that with the right incentives and support for innovators, a change will come.

“There is opportunity, but much of it relies on locally rooted knowledge to capture valuable human capital, and to create businesses of tomorrow in a government and an economy of yesterday. That’s hard. It can — and will — happen, but takes time,” he added.

Despite a number of economic and political complexities, there have been signs of growth and maturity across the tech landscape in Greece.

Dimitris Athanasiadis, PhD, who has been involved in the Athens tech scene for the past 10 years as a member of the local startup community, noted that the startup quantity and quality has increased as more people have turned to entrepreneurship as a means of employment since the economic crisis limited other job opportunities.

“Needless to say, the stimulation of the market by a number of angel and accelerator investments has also helped significantly both in terms of concrete numbers but also as inspiration for young people to start a startup,” Athanasiadis said.

As a contributor to the organization of the first Opencoffee meetups for startups in Greece, he has observed a significant increase in the number of people participating in the events over the years. When the first Opencoffee meetups started, there were 10 to 15 people in a café, he said, but now there are monthly meetings with top-notch presentations that regularly connect 300 or so people.

The creation of the first seed accelerator in Greece, Openfund, also had a significant impact on the startup community and helped connect the dormant potential with a funding mechanism and advice.

“I think many of those who learned about the Openfund were exposed to a different mindset from what was the usual dilemma (work in the civil sector or the family business), and some actually took the bold step of starting up because of it and the associated message,” Athanasiadis pointed out.

While complexities in Greece have resulted in uncertainty in the markets and therefore less buying power and less cash flow overall for startups, there’s still reason to believe that these complexities have actually also had a positive impact.

“People understood that there must be other ways to work and flourish instead of the usual approaches prior to the crisis. One such way they discovered was to start up, and this caused a significant influx of talent in the ecosystem,” Athanasiadis added.

“There is lots and lots of infrastructure and know-how now (from co-working spaces to legal and business consulting help people can find) and a lot of talent. So we’re not Israel or London, but [we’re] definitely not an insignificant hub either.”