Business Partners | September-October 2014

bponline.amcham.gr

SEPTEMBER-OCTOBER 2014 Vol. XIII | No. 74

Thought Leaders

Healthcare in a Changing World BUSINESS MATTERS

& MERCEDES-BENZ ▼

MARKETPLACE

ORACLE: IT TRENDS ▼

ABBVIE—

PASSION & EXPERTISE ▼

THE HUMAN AGE

MANPOWER INSIGHTS ▼

PLUS TRENDS & TRADE MAKERS VIEWPOINT TRAVEL USA

AMERICAN-HELLENIC CHAMBER OF COMMERCE www.amcham.gr

Health Care & Strategic Choices Erik Nordkamp

President & Managing Director, Pfizer Greece

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COMMERC E OF

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American-Hellenic Chamber of Commerce

AMCHAM

VOLUME XIII | NUMBER 74

CHAMBER.PRESS ISSN 1109-4990 CODE: 6526

CHAMBER.PRESS

CONTENTS

AMERICAN-HELLENIC CHAMBER OF COMMERCE BPONLINE.AMCHAM.GR

AMERICAN-HELLENIC CHAMBER OF COMMERCE

4 THE BOARD 6 CHAMBER NEWS 8 ALBA BUSINESS REVIEW

Towards a Stable Financial System: Basel III, Dodd-Frank, SSM, SRM…

24

BY PANAGIOTIS AVRAMIDIS

1 0 ECONOMICS—OUT OF THE BOX

What do we Really Prefer? A Slice of Chocolate Cake or a Piece of Fruit?

Erik Nordkamp, President & Managing Director at Pfizer Greece, on creating an effective healthcare system

BY CHRISTOS ALEXAKIS

1 2 PROJECT FINANCE

Post-Crisis Project Finance

BY THANOS NIFOROS

1 4 NAMES & FACES IN THE NEWS 1 6 HERITAGE ECONOMICS The European Heritage Label

38

1 7 EDUTECH

Harry Daskalakis, CEO of Athens Tech

1 8 HEALTHCARE

Nikos Prezas, Sales & Marketing Director Mercedes-Benz Cars at Mercedes-Benz Hellas, discusses today’s rapidly evolving automobile market

AbbVie—A New Biopharmaceutical Company

2 0 TRAVEL USA

Discover America—Nebraska

2 2 THE HUMAN AGE

Let’s Get Real About New Jobs

BY DR VENETIA KOUSSIA

2 4 THE INTERVIEW

Erik Nordkamp, President & Managing Director, Pfizer Greece

2 6 THOUGHT LEADERS

36

Healthcare in a Changing World

3 4 HEALTHCARE PERSPECTIVES

Antonis Monokrousos, Country Leader Oracle Hellas, Cluster Leader GCMM Cluster, on IT challenges and opportunities

Assistive Technologies for Elder Care

BY LUNDY LEWIS

3 6 TECHNOLOGIA

Antonis Monokrousos of Oracle on IT Trends and Currents

BUSI N ES S PART N ERS I S THE B IMON THLY MAGA ZIN E O F T HE A M ER I CA N - H EL L EN IC CHA MB ER OF COMMERCE DIRECTOR Elias Spirtounias e.spirtounias@amcham.gr

PUBLISHER & EDITOR Raymond Matera raymond@materamiller.com PLEASE RECYCLE

ADVERTISING Alexandra Loli alexandra@materamiller.com

OWNER American-Hellenic Chamber of Commerce Politia Business Center 109-111 Messoghion Avenue 115 26 Athens Tel: +30 210 699.3559 Fax: +30 210 698.5686-7 E-mail: info@amcham.gr

BRANCH OFFICE 47 Vassileos Irakleiou Street DESIGN 546 23 Thessaloniki snack• Tel: +30 2310 286.453, 239.337 Fax: +30 2310 225.162 PRINTING & BINDING Northern Greece Publishing S.A. E-mail: n.tsavdaroglou@amcham.gr

3 8 BUSINESS MATTERS

Nikos Prezas on Mercedes-Benz— Respect, Passion, Integrity, Discipline

4 0 MOVING GREECE FORWARD Michael Bletsas of the MIT Media Lab in a Fulbright Interview

4 2 FUTURETECH

Can a Robot Be Your Boss?

4 4 BUSINESS2BUSINESS A B2B Toolbox

4 6 TRENDS & TREND MAKERS 4 8 VIEWPOINT Insured Repurchase Agreements

BY CHRISTOS PAPOUTSY

SEPTEMBER-OCTOBER 2014 | BUSINESS PARTNERS | 1

DIRECTOR’S DESK

Recent political and economic developments in Europe mark serious, and anticipated, changes in economic policy that will also affect Greece. The European Central Bank’s decisions exhibit a start by Europe to distance itself—though not directly—from the austerity doctrine that has led to prolonged economic stagnation and record unemployment rates.

The ECB, after three years, realized what the USA understood from the start of this crisis. Economic growth depends on the active demand and continuous circulation of money. So, while the ECB does not exhibit the same level of autonomy as the Federal Reserve, it decided, contrary to the political status quo of Europe, to take those measures that are expected to help revive the economy: make money more expensive to be held in banks than to be invested and to directly finance promising and worthy business projects.

These measures are not the only ones available but, if adopted and implemented immediately, may be the first important impetus that Europe needs. And they will assist Greece to emerge from recession, fight high unemployment, and increase liquidity. But this help will not be enough without the continuation of reforms necessary to help the real economy, including those which, due to false misconceptions and to the conservation of obsolete corporatist privileges, we prefer either not to adopt or not to apply.

Let’s not fool ourselves. Even if Europe throws tons of money into the real economy this does not guarantee that Greece will realize better borrowing rates, better competitiveness, or large investments—and certainly not long-term sustainable development. To achieve these goals we must remove longstanding barriers, such as an unstable and high—direct and indirect—tax environment, an ineffective and slow responding judicial system, and all forms of protectionism, to name a few. But what we need above all is sound, transparent and accountable management of our State. To accomplish this we immediately need to adopt international accounting standards and rules, at every level of State government, to ensure transparency and accountability in every public act.

The economic crisis in Greece has highlighted the lack of comparable and credible government financial statements. International accounting standards are absent throughout the public sector, and comparable and credible data are not provided with accuracy. But in today’s world trust, credibility and performance are key in gaining the confidence of citizens and investors. International accounting standards can build that trust and confidence and allow Greece to fully benefit from all those changes taking place in Europe, and globally.

Our Chamber, along with other business organizations, is in favor of this fundamental reform that will tremendously help our country on its course to success.

ELIAS SPIRTOUNIAS Executive Director

The American-Hellenic Chamber of Commerce A DYNAMIC, PROACTIVE CHAMBER The American-Hellenic Chamber of Commerce was established in 1932 and is one of the largest, most active, and dynamic American Chambers in Europe. Virtually all American companies that do business in Greece and Greek companies that engage in trade with the United States are members of the Chamber.

The Chamber's membership is comprised of more than 1,000 proactive companies that seek to expand business horizons, create new business partnerships, and take advantage of trade and investment opportunities in today's global economy.

The American-Hellenic Chamber of Commerce is an active mem-

2 | BUSINESS PARTNERS | SEPTEMBER-OCTOBER 2014

ber of the U.S. Chamber of Commerce in Washington D.C. and the European Council of American Chambers of Commerce (ECACC).

MISSION STATEMENT

The American-Hellenic Chamber of Commerce strives for continuous improvement of American-Hellenic commercial and financial relations, through increased membership and through the organization of top-quality events, exhibitions, fora, seminars, and congresses on both sides of the Atlantic.

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American-Hellenic Chamber of Commerce EXECUTIVE COMMITTEE

COMMITTEES

Anastasopoulos Simos President | N. PETSIAVAS S.A.

AGROTECHNOLOGY COMMITTEE Members: Argiriou Notis, Bezergiannis Stella, Chriss Dimitrios, Efthymiadis Thymis, Karagiorgos Nikolaos, Katsaros Georgios, Kouides Antonis, Kouimtzis Athanasios, Koukakis Athanasios, Michailides Ekaterini, Nakas Ioannis, Vergos Evangelos | Coordinator: Nikos Tsavdaroglou

Bakatselos Nikolaos Vice President | PYRAMIS METALLOURGIA A.E. Karayannis Angelos Vice President | KARAYANNIS K. GROUP OF COMPANIES Panayotopoulos Litsa Secretary General | BOSTON HAMILTON LTD. Papadopoulos Thanos Treasurer | CHEVELLAS S.A. Canellopoulos Paul Counselor | AIG GREECE Kyriacou Marios Counselor | KPMG CERTIFIED AUDITORS Mamidaki Eleftheria Counselor | MAMIDOIL-JETOIL S.A.

AUDITORS COMMITTEE Members: Felonis Athanassios, Kerameas George, Sabatakakis Kyriacos | Coordinator: Andriana Chadjianagnostou

CORPORATE GOVERNANCE COMMITTEE Chair: Papacostopoulos Constantine | Members: Apsouris John, Charalambous Yiangos, Dimou Ioannis, Hadjisotiriou Paula, Iliadaki Sassa, Petalas Apostolos, Shiamishis Andreas, Theodoulidou Maria | Coordinator: Daphne Constantinidou

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE Members: Alexiou Maria, Constantelis George, Iliopoulou Sissy, Katsouli Katerina, Konti Kiara, Lolas Vassilis, Macheras Alexia, Menidiati Manina, Vrachatis Ioannis, Zevgoli Nafsika | Coordinator: Angela Boyatzis

Saracakis John Counselor | SARACAKIS BROTHERS S.A.

ENERGY COMMITTEE Chair: Karayannis Angelos | Members: Alexopoulos George,

Spirtounias Elias Executive Director

GREEK ECONOMY CONFERENCE COMMITTEE Chair: Αnastasopoulos Simos | Members:

Desypris John, Ekaterinari Rania, Peristeris George, Rigas Mathios, Stassis George | Coordinator: Angeliki Dikeoulia

Antoniades Vassilis, Bacacos George, Mamidakis Eleftheria | Coordinator: Angeliki Dikeoulia

INFORMATION TECHNOLOGY & COMMUNICATIONS COMMITTEE Chair: Poulidas

BOARD OF DIRECTORS Alexopoulos George | HELLENIC PETROLEUM S.A. Antonakou Peggy | MICROSOFT HELLAS S.A. Antoniades Vassilis | THE BOSTON CONSULTING GROUP Apostolides Pascal | ABBVIE PHARMACEUTICALS S.A. Bacacos George | P. BACACOS, CHEMICAL & PHARMACEUTICAL PRODUCTS CO. S.A. Costopoulos Alexandros | FORESIGHT STRATEGY & COMMUNICATIONS Coustas John | DANAOS SHIPPING CO. LTD Kafatos Vassilis | DELOITTE BUSINESS SOLUTIONS S.A. Kartsanis Georgia | CEO CLUBS GREECE Kokorotsikos Paris | EUROCONSULTANTS S.A Kosmatos Makis | JOHNSON & JOHNSON CONSUMER S.A. Kostas Stavros | Economist Kouidis Marilena | KOUIDES A.P.L. S.A. Koussia Venetia | MANPOWERGROUP S.A. Koutsoureli Eftychia | QUEST HOLDINGS S.A. Kyriakides John | KYRIAKIDES GEORGOPOULOS LAW FIRM Lazaridis Socrates | ATHENS EXCHANGE Lekkakos Stavros | PIRAEUS BANK S.A. Manos Alexandros | PIRAEUS BANK S.A. Mytilineou-Daskalaki Sophie | MYTILINEOS HOLDINGS S.A. Nordkamp Erik | PFIZER HELLAS A.E. Papadimitriou Pythagoras | HEWLETT-PACKARD HELLAS E.P.E. Papalexopoulos Dimitri | TITAN CEMENT COMPANY S.A. Papazoglou Panagiotis | ERNST & YOUNG (HELLAS) S.A. Passaris Despina | PROCTER & GAMBLE HELLAS M.E.P.E. Stylianopoulos Andreas | NAVIGATOR TRAVEL & TOURIST SERVICES LTD. Thomas Athanasios | DOW HELLAS A.E. Tsamaz Michael | HELLENIC TELECOMMUNICATIONS ORGANIZATION S.A. (OTE) Tsiboukis Antonis | CISCO HELLAS S.A. Xenokostas Panagiotis | ONEX S.A. Zanias George | NATIONAL BANK OF GREECE S.A.

4 | BUSINESS PARTNERS | SEPTEMBER-OCTOBER 2014

Spyros | Members: Antonakou Peggy, Galani Agathi, Kolokotsas Dionisis, Monokrousos Antonis, Moraitis Andreas, Papadimitriou Pythagoras, Peppas Nikolaos, Sabatakakis Kyriakos, Tsiboukis Antonis | Coordinator: Georgia Mamali

INNOVATION, EDUCATION & ENTREPRENEURSHIP COMMITTEE Chair: Panayotopoulos Litsa | Members: Darda Dimitra, Lelakis George, Makios Vassilios, Papadakis Georgios, Pateraki Evangelia, Persidis Andreas, Pilitsis Loukas, Printzos Michael, Raptopoulos Manos, Rizopoulos Yannis, Tsiboukis Antonis, Tsigos Dimitris, Tsoukalis Alexandros | Coordinator: Katerina Tzagaroulaki

INSTITUTE ON ECONOMIC POLICY AND PUBLIC GOVERNANCE President: Yanos Gramatidis | Steering Committee: Kotsalos George, Koussia Venetia, Mina Zooullis, Nordkamp Erik, Van Pappelendam Robert | Executive Officer: Angeliki Dikeoulia INSURANCE, SOCIAL SECURITY & LABOUR MATTERS COMMITTEE Chair: Kremalis

Konstantinos | Members: Abatzoglou Theodore, Andriopoulos Stavros, Apostolopoulos George, Berti Alberto, Canellopoulos Paul, Christidou Agni, Ioannou Christos, Kikilias Elias, Kollas John, Konstantinidis Theodore, Kouskouna Froly, Koussia Venetia (Dr.), Lisseos Panayotis, Lyssimachou Triantafyllos, Michos Stathis, Oikonomopoulou Antouaneta, Pelidis Manos, Perpinia Antigone, Poulias Alkiviadis, Prountzos Michael, Sarantopoulos Dimitris, Spyrakos Fotios, Spyropoulos Rovertos, Tompras Theodossis, Tzotzos Apostolos, Vafeiadis Ioannis, Vlassopoulos George | Coordinator: Voula Tseritzoglou

IPR COMMITTEE Members: Ailianou Andromahi, Economou Alexandra, Galanopoulou Katerina, Kargarotos Iakovos, Kyriakides John, Makris Antonis, Michos George, Paparrigopoulos Xenophon, Zachou Dora | Coordinator: Daphne Constantinidou

LEADERSHIP COMMITTEE Chair: Miropoulos Artemis | Members: Kalligeros John,

Katsivelis Pavlos, Kerastaris Antonis, Kofinas Kyriakos, Mamidakis Eleftheria, Mavropoulos Michael, Olympios Spyros, Panteliadis Aristotelis, Rabbat Vassilis, Raptopoulos Emmanuel, Roussos Michalis, Saracakis Alexandros, Vlachos George | Coordinator: Ritana Xidou

LEGISLATIVE REFORM COMMITTEE Chair: Kyriakides John | Members: Alexandris

Panos, Alexandris Spyros, Margaritis Evangelos, Scorinis George, Tsibanoulis Dimitris | Coordinator: Daphne Constantinidou

MEDICAL DEVICES & DIAGNOSTICS COMMITTEE Chair: Liakopoulos Theodore |

Members: Anagnostopoulos Stefanos, Anastassiou Yannis, Baracos Christos, Boulougouris George, Christopoulou Martha, Deligiannis Konstantinos, Derkos Kalogridis, HoffmanLuecke Manuela, Krinos Gregory, Maroutsis George, Nikas Dimitris, Politis George, Strouzos Anastasios | Coordinator: Voula Tseritzoglou

NORTHERN GREECE COMMITTEE Chair: Bakatselos Nikolas | Members: Alexopoulos

Charis A., Gigilinis Alexandros, Kafatos Vassilis, Kanelakis Ioannis, Katsaros Georgios, Kokorotsikos Paris, Kouides Antonis, Kouimtzis Athanasios, Koukountzos Konstantinos, Mitsiolidou Olga, Vlachos Panos | Coordinator: Nikos Tsavdaroglou

PHARMACEUTICAL COMMITTEE Chair: Pascal Apostolides | Vice Chairman: Filiotis

Dionysios | Members: Ahmad Haseeb, Capone Carlo, Charalampidis Savas, Commissaris Jeroen, Dakas Christos, Filiotis Spyros, Frouzis Konstantinos, Gerassopoulos Marcos, Greco Roberto, Kefalas Nikos, Lakatos Matyas, Lorge Emmanuel, Nordkamp Hendrikus Hermannus (Erik), Pateraki Evangelia, Tarou Iphigenia | Coordinator: Voula Tseritzoglou

PUBLIC AFFAIRS COMMITTEE Members: Canellopoulos Paul, Kyriacou Marios, Papadopoulos Thanos, Saracakis John | Coordinator: Xidou Ritana

TAXATION COMMITTEE Chair: Stavros Costas | Members: Achilas Ioannis, Altiparmakis

Christos, Ampeliotis Evangelos, Anastasiadis Harris, Desipris Antonis, Doucas Spyros, Filippopoulos Dimitris, Gigantes Stavros, Govaris Vassilis, Kanellatou Athena, Kerameus George, Kyriakides Stelios, Laskaratos Panagiotis, Leventis Thomas, Lianopoulos Themis, Mitsios Stephanos, Nasiopoulou Maria, Panagiotidis George, Papadatos Eugene, Papandreou Cristina, Pothos Panagiotis, Samothrakis George, Savvaidou Katerina, Savvas Evangelos, Sfakakis Konstantinos, Spyriouni Litsa, Stavrides Vassilis, Stavropoulos Ioannis, Tapinos Grigoris, Trakadi Maria, Tsakonas Yannis, Yiannacou Sofoklis | Coordinator: Katerina Tzagaroulaki

TOURISM COMMITTEE Chair: Stylianopoulos Andreas | Members: Ananiadis Tim, Argiri Byron, Fokas Makis, Marriott Carol, Mavropoulos Michael, Panayotopoulos Panos, Van de Winkel Bart, Vrachatis Ioannis | Coordinator: Angeliki Dikeoulia

WOMEN IN BUSINESS (WIB) COMMITTEE Chair: Kartsanis Georgia | Members: Adamopoulou Efi, Anagnostopoulou Popi, Athanassoulas Elena, Dimou Maria, Katsou Nelly, Kazakopoulou Betty, Labrou Marica, Milona Martha, Panagopoulou Varvara, Tzimea Deppie, Velliotou Peggy | Coordinator: Angela Boyatzis

CHAMBER NEWS

Meet the Chamber The Chamber relies on its personnel to carry out all dayto-day functions, from responding to member enquiries to gathering business intelligence, and from event planning to bookkeeping. To assist our members, we list below the contact information and areas of responsibility of Chamber personnel.

Elias Spirtounias | Executive Director e.spirtounias@amcham.gr Angela Boyatzis | Executive Officer, International Relations & Events. Domains of activities: WIB, CSR, Delegations. a.boyatzis@amcham.gr Dafni Constantinidou | Executive Officer, Fairs & Events. Domains of activities: IPR, Corporate Governance, ΙΤ d.constantinidou@amcham.gr

Memberto-Member Program A program designed to encourage more business among Chamber members, and to allow members to introduce their goods and services to the market, the Chamber’s M2M (member to member) program invites all Chamber members to submit special offers to the Chamber, which will send out via monthly e-mail alerts to the entire Chamber membership.

For more information, you may send a message to: Μ2Μ@amcham.gr with the subject “Chamber M2M” or call Mrs. Ritana Xidou at 210 699 3559 Ext: 18

Angeliki Dikeoulia | Executive Officer, Policy Institute Coordinator. Domains of activities: Governmental Affairs, Economy, Environment-Energy, Tourism a.dikeoulia@amcham.gr Andriana Hatzianagnostou | Chief Accounting Officer a.hatzianagnostou@amcham.gr Margarita Lardikou | Senior Accounting Officer, Memberships. Domains of activities: Membership dues & members archive m.lardikou@amcham.gr Georgia Mamali | Executive Board Secretary, Press/Archive Office & Events g.mamali@amcham.gr John Moisoglou, AHEI Executive Officer, Domain of activities: Export Facilitation j.moisoglou@amcham.gr Voula Tseritzoglou | Executive Officer, MIS, Fairs & Events Domains of activities: Health, Defense, Labor and Insurance v.tseritzoglou@amcham.gr Katerina Tzagaroulaki | Executive Officer, New Memberships & Events, Domains of activities: Taxation, Innovation, Education, New Member Development k.tzagaroulaki@amcham.gr Andreas Tzinieris | Premises & Security Officer a.tzinieris@amcham.gr Ritana Xidou | Executive Officer, WEB/Database & Events, Domains of activities: Leadership, Public Affairs events, Members archive r.xidou@amcham.gr

BRANCH OFFICE - THESSALONIKI Nikos Tsavdaroglou | Northern Greece Executive Coordinator n.tsavdaroglou@amcham.gr Meni Charalambous | Northern Greece branch office Secretary – Memberships m.charalambous@amcham.gr

6 | BUSINESS PARTNERS | SEPTEMBER-OCTOBER 2014

CHAMBER MEMBER Chamber members are welcome to use the logo of the American-Hellenic Chamber of Commerce to post on their websites, e-mail signatures, stationary, or marketing material.

The logo, with the words, “Member, 2014,” will be available in a variety of formats and sizes, and will be sent to any Chamber member, in good standing, upon request.

For more information send a message to: members@amcham.gr with the subject “Chamber Logo” or call Mrs. Katerina Tzagaroulaki at 210 699 3559 Ext 22 or Mrs. Margarita Lardikou at 210 -699 3559 Ext 13.

The Greek Economy Conference—25 Years The Chamber’s 2014 Greek Economy Conference, to be held December 1-2 at the Athenaeum Intercontinental, marks its 25th year of success. The conference, which has evolved into a national “institution,” centers around the political and economic life of the country and acts as an annual summit for senior government and business representatives from Greece and abroad. In its 25 years, the conference has attracted—and continues to attract—the elite of the political, diplomatic, academic, business and media communities in Greece. An impressive array of high caliber speakers—Prime Ministers, Presidents of major political parties, Ambassadors, Presidents of local and international organizations and financial institutions, prominent leaders of the local and international business community, distinguished academics and representatives of think

tanks lend their unique perspectives to promote a sustainable environment for entrepreneurship and economic growth and vitality. Be sure to attend this year’s event, certain to focus on key issues and feature the leading voices of Greece.

Chamber President Simos Anastasopoulos: “The Chamber’s Greek Economy Conference is our flagship event and is representative of the key position our Chamber holds in Greece. This year’s conference is especially important as Greece begins to emerge from years of recession. All participants will be part of the conversation that will define the new Greece, the Greece of tomorrow, the Greece that can be productive, competitive, and innovative. Be sure to attend this year’s event and join one of the most important summits in Greece.”

Greek Pavilion at AUSA The Chamber is organizing the Official Greek Pavilion at the AUSA (Association of the United States Army) Annual Meeting and Exposition on October 13-15, 2014 at the Walter E. Washington Convention Center in Washington DC. AUSA is a leading meeting of the defense industry, with 30,000 visitors, including senior leaders from the Armed Forces, U.S. Department of Defense, U.S. Congress, and foreign dignitaries as well as more than 500 exhibitors.

The Greek Pavilion is held under the auspices of the Hellenic Ministry of National Defense. Alternate Minster of Defense Fofi Gennimata (photo), along with a team of high-level officials of the Ministry, will be in Washington during the exhibition. Greece’s presence at AUSA is a dynamic joint effort to promote Greek defense products abroad.

The Chamber strongly believes that participation at this key event will strengthen Greek defense industry and will be the starting point to create new strategic alliances and explore opportunities for industrial cooperation, co-production, joint ventures, as well as high technology transfer and investment programs.

Chamber Executive Director Elias Spirtounias underlined the importance of this event, a first for the Greek Defense Industry: “As Greece develops globally competitive products and services it is vital that our companies are present at this key event. To achieve an outward looking economy we must engage in proactive outreach, be present at trade shows that decision makers attend, and promote Greece’s vast potential to enter new markets.”

Chamber Calendar September 23-24 Athens, 13th HealthWorld Conference September Athens, 4th Roundtable Forum “Business Opportunities of the Future and Development of Entrepreneurial Spirit” September Athens, 2nd MIW Competition Awards Ceremony October 13-15 Walter E. Washington Convention Center, Washington DC, AUSA 2014 Annual Meeting & Exposition, Greek Pavilion of Defense Industries in Greece October Athens, 6th Thessaloniki Tax Forum November 11-12 Athens, 4th Labor & Insurance Conference November 20 Athens, Athens Ledra Hotel 12th CSR Conference November Thessaloniki, Data Protection

SEPTEMBER-OCTOBER 2014 | BUSINESS PARTNERS | 7

ALBA BUSINESS REVIEW

BY PANAGIOTIS AVRAMIDIS ADJ. ASSISTANT PROFESSOR OF FINANCE, ACADEMIC DIRECTOR OF THE MSC IN RISK MANAGEMENT, ALBA

Towards a Stable Financial System BASEL III, DODD-FRANK, SSM, SRM…

T

his led many to wonder if the invisible hand of Adam Smith has slapped us in the face1. The reform of Wall Street (DoddFrank Act) is expected to result in roughly 250 new rules. Across the Atlantic, the Single Supervisory Mechanism and the Single Resolution Mechanism were established to ease the concerns on the continent’s banking system viability. Add to the above the Basel III Accord, multiply by the number of local regulators and you get a rough idea of the supervisory burden faced by global financial institutions.

These developments yield the following questions: “Is this intervention necessary or should we let the private sector discipline banks?” and “What is the impact of the intervention in the financial system’s structure and operation?”

MARKET DISCIPLINE

Investors and markets do not discipline banks because they do not need to. The existence of guarantees, that constitute the so-called financial safety net, is the reason behind their inertia. Explicit guarantees such as deposit insurance are the main conduit through which banks extract rents from taxpayers. Recent studies show that junior debt holders also enjoy implicit subsidies especially among the “Too Big to Fail” banks.

8 | BUSINESS PARTNERS | SEPTEMBER-OCTOBER 2014

In addition, market discipline is impaired by lack of transparency. Markets and particularly institutional investors, despite their resources and intellectual capital, struggle to evaluate banks’ assets because most of them are paper contracts promising uncertain future cash flows.

Beyond investors, management is also responsible for inadequate market discipline.

Despite the progress in corporate governance to resolve the “principal-agent” conflict, the recent crisis emphatically brought to the surface the lingering imbalance between managers’ short-term standpoint and the long-term perspective of creditors and regulators.

REGULATION IMPACT

Banks are in the process of deleveraging in order to meet the higher capital and liquidity requirements. Going forward, the banking sector will be more concentrated due to the higher cost of capital. In addition, large corporations already seek funds from markets and private capital, allowing banks to fund the small businesses, leading to greater specialization.

The single resolution and supervision of cross-border activities provisions separate capital and liquidity for banks’ operations abroad. Foreign branches will convert to stand-alone entities, leading to a fragmentation of the banking system. Banks

The enormous intervention by the state authorities during the recent financial crisis would seem more appropriate to a centralized economy. will no longer be entitled to the benefits of geographical diversification, a sub-optimal development from a risk management perspective.

Finally, banks will have to meet the increasing demand for reporting and disclosures.

They also need to respond to concerns regarding the failure of their IT infrastructure to cope with the complexities of risk management. Hence, banks should increase their investments on new technologies with emphasis on data management and risk monitoring.

STABILITY STILL AT RISK

Regulatory interventions, like many remedies, often have some unpleasant side effects. The quest for regulatory arbitrage will increase the “unregulated” banking system and effectively impair authorities’ efforts for stability. To sustain prolonged periods of distress without the hazard of collapse, we need to ring fence the most vulnerable parts of the financial system, e.g., retail banking. But all that must be achieved without hurting financial development.

This requires a careful balancing act.

Most importantly, resolving the principal-agent conflict should be at the top of any regulatory agenda. The emergence of “risk-oriented” governance framework focused on personal accountability and longterm development is pivotal. Adoption of risk-adjusted performance indicators and remuneration structures will bring management’s and stakeholders’ perspectives back to equilibrium. The initiatives in this area, so far, hardly justify any optimism.

1

Gorton (2009) Federal Reserve Bank of Atlanta

ECONOMICS OUT-OF-THE-BOX

BY CHRISTOS ALEXAKIS ASSISTANT PROFESSOR, UNIVERSITY OF PIRAEUS

What do we Really Prefer?

A SLICE OF CHOCOLATE CAKE OR A PIECE OF FRUIT?

T

he Greek debt crisis that started in 2009 brought dramatic changes to the Greek economy and society. Per capita income has been reduced (GDP growth rate: 2010 (II) -2.8, 2011(II) -7.9, 2012 (II) -6.4, 2013 (II) -3.8, 2014 (II) -0.2), source: EL.STAT), unemployment has increased (2010 (IV) 14.2, 2011 (IV) 20.7, 2012 (IV) 26.0, 2013 (IV) 27.5, source: EL.STAT), a host of austerity measures have been approved by the Greek Parliament, demonstrations occur almost daily; and complaints about the quality of life are common in almost every public or private conversation. Nevertheless, during 2014 there were some signs of improvement. For instance, Greece returned to the financial markets by issuing 3 billion Euro of bonds and Fitch upgraded Greece’s credit rating. Nevertheless, Greeks are still complaining, since the return to economic growth appears to be a distant event. Greek people are so tired by austerity measures that some would be willing to choose the uncertainty of a GrExit now than the certain and calculable shrink of their disposable income for some years ahead with the possible, not certain though, reward of economic future growth. But is this behavior rational when our economic existence is at stake?

Behavioral economists may argue that Greeks suffer from temporal myopia. As Bellows (2006) puts it, “like visual myopia,

temporal myopia causes clarity to decrease with distance, but it applies to our perception of the future rather than our sense of sight. Our brains’ typical function is to reduce the importance of the future in our decision-making, an effect known as hyperbolic discounting. In essence, hyperbolic discounting is the human tendency to prefer smaller payoffs now over larger payoffs later, which leads one to largely disregard the future when it requires sacrifices in the present.” The same defective reasoning causes people to underestimate the future consequences of drug use, unhealthy diets or unprotected sex. In this respect, if someone is given a choice between a piece of fruit and a slice of chocolate cake now, the majority would choose the chocolate cake.

I believe that this temporal myopia is one of the reasons why Greek people may choose fiscal loosening now compared to tight fiscal policy and reforms now, with the future reward of economic growth. Of course, the

THE DECISION TO BE MADE BY GREEKS NOW IS A DECISION THAT CONCERNS THEIR CHILDREN

10 | BUSINESS PARTNERS | SEPTEMBER-OCTOBER 2014

Economics—Out of the Box is a Business Partners series by members of the Chamber’s Institute on Economic Policy and Public Governance. possibility of fiscal loosening with economic growth at the same time would be the best possible prospect but, alas, it is far from realistic e.g. like a fat-burning chocolate cake.

Fortunately, Bellows also notes, comprehending the psychology of hyperbolic discounting can help avoid its detrimental effects. It is suggested that when one is confronted with such a choice, one should imagine that the decision belongs to someone else, i.e., a close friend who asks for advice. Seeking a truly objective view from a trusted individual often provides the most practical input. In this respect, the decision to be made by Greeks now is a decision that concerns their children who ask for advice. What choice do they make for them? Drastic reforms and fiscal restructuring now but with possible reward that of future prosperity or spending borrowed money with loose fiscal policy now with possible economic downgrading and isolation in the future. I think the answer is obvious: we choose the fruit.

References Bellows A. (2006), “Damn Interesting: Hyperbolic Discounting” http://www.damninteresting.com Laibson, David (1997). “Golden Eggs and Hyperbolic Discounting”. Quarterly Journal of Economics.

Madden et al (2007). “Toward an animal model of gambling: Delay discounting and the allure of unpredictable outcomes”. Journal of Gambling Studies O’Donoghue, T.; Rabin, M. (1999). “Doing it now or later”. The American Economic Review Rubinstein, Ariel (2003). “”Economics and Psychology”? The Case of Hyperbolic Discounting.”.

International Economic Review Thaler, R. H. (1981). “Some Empirical Evidence on Dynamic Inconsistency”. Economic Letters

PROJECT FINANCE

BY THANOS NIFOROS

Post-Crisis Project Finance

N

otably, continuing pressure on bank liquidity has resulted in a smaller universe of banks with the appetite and balance sheet capacity to fund large infrastructure projects. The knock-on effect has been the de-facto suspension of the project finance primary syndication market, with banks less willing to take large underwriting positions.

Furthermore, for those banks that remain in the market, tightened regulatory requirements for the management of bank capital have been specified under the Basel III accords. Banks now have to assign a higher percentage of their liquidity to back long tenor commercial debt financing and this has placed upward pressure on project finance ‘pure commercial’ debt financing. However, a far lower risk weighting (and hence, capital requirement) is apportioned to ECA (Export Credit Agency) backed finance.

These trends have created a significantly increased requirement for both ECA covered and ECA direct financing in the infrastructure market. ECAs have been under increased pressure to support their exporters and developers in their overseas businesses. Large international companies have been aggressively hunting for returns overseas, particularly to hedge against sluggish domestic markets with suppressed growth.

Infrastructure investment has proven an attractive safe haven. The emerging market economies have shown the strongest growth

in the wake of the crisis and continue to require significant infrastructure development, particularly for basic ‘cold infrastructure’ such as utilities and transportation.

Due to the funding pressures facing the commercial banks, ECA direct financing has therefore become an important feature of emerging markets Greenfield infrastructure finance, particularly for large PPP projects, where contractors are recognizing the competitive advantage of strong ECA support.

A number of interesting trends and developments have occurred in the project financing market in the wake of the global financial crisis.

This may prove to be an attractive new class of asset for investors craving both yield and portfolio diversification.

The confluence of these factors has created greater impetus for private and public sector parties to leverage the benefits afforded by project finance. Governments globally have recognized the importance of infrastructure development as both a prerequisite for the provision of basic services and a catalyst for growth. Lenders looking for di-

THE CONSIDERABLE INCREASE IN DEBT PRICING WITNESSED DURING THE GLOBAL FINANCIAL CRISIS WILL CREATE A NUMBER OF REFINANCING OPPORTUNITIES FOR ASSETS FUNDED DURING THIS PERIOD, AS NORMALITY AND STABILITY RETURN TO THE MARKETS

The considerable increase in debt pricing witnessed during the global financial crisis will create a number of refinancing opportunities for assets funded during this period, as normality and stability return to the markets. Nevertheless, sponsors and procurers alike are motivated not to deflect constrained commercial bank liquidity away from Greenfield project financing (where commercial banks are most suited) and instead to tap additional pools of liquidity for refinancing, such as project bonds.

12 | BUSINESS PARTNERS | SEPTEMBER-OCTOBER 2014

versified earnings, particularly in the emerging markets, recognize this as a significant opportunity. Moreover, infrastructure projects provide an attractive investment opportunity for corporates looking for overseas returns, particularly when financed on a limited recourse basis.

Thanos Niforos, Enterprise Development Network, Loan & PRI Originator, A Program of the Overseas Private Investment Corporation (OPIC), The U.S. Government’s Development Finance Institution

“Education is the most powerful weapon which you can use to change the world” Nelson Mandela

Do you want to be tomorrow’s Leader with Ethos?

You need to have “Morfosis”

www.acs.gr/global-morfosis

NAMES & FACES

...in the news ▼ NEW DEPUTY CHIEF OF MISSION Suzanne Lawrence assumed her duties as Deputy Chief of Mission at the U.S. Embassy in Athens, Greece, on August 13, 2014. Prior to arriving in Athens, Ms. Lawrence was a Senior Advisor for the Assistant Secretary in the U.S. Department of State’s Bureau of Consular Affairs.

Ms. Lawrence is a career member of the U.S. Senior Foreign Service.

Previously, she has served as the Director of Senior Level Division in the Office of Career Development and Assignments in the Bureau of Human Resources, and as Director of the Office of Policy Coordination and Public Affairs for the Bureau of Consular Affairs. Suzanne holds a Bachelor of Science in Foreign Service from Georgetown University, e a Master’s degree from the American Graduate School of International Management (“Thunderbird”) and a Master’s degree from the National War College at the National Defense University. ▼ MONSANTO TO WITHDRAW EU APPROVAL REQUESTS

FOR NEW GMO CROPS

Monsanto is withdrawing all pending approval requests to grow new types of genetically modified crops in the European Union, due to the lack of commercial prospects for cultivation there. “We will be withdrawing the approvals in the coming months,” Monsanto’s President and Managing Director for Europe, Jose Manuel Madero, said. Madero said the decision would allow the company to focus on growing its conventional seeds business in Europe, as well as securing EU approvals to import its genetically modified crop varieties widely grown in the United States and South America. ▼ GOOGLE HELPING PROMOTE GREECE AS YEAR-ROUND

DESTINATION

According to Google Greece, the “Grow Greek Tourism Online” initiative will provide online tools and training to help promote tourism, with the Ministry of Tourim, the National Greek Tourism Organisation (EOT) and the Association of Greek Tourism Enterprises (SETE).

Google said about 70% of all tourist arrivals to Greece take place between June and September, and cited an Oxford Economics report that said an increase in Greek sector activity online could raise the country΄s GDP by 3% and create as many as 100,000 new jobs. Services provided will include Google My Business and Google AdWords to improve online presence, search results and maps and help promote off-season offers.

SPEAKER’S CORNER 14 | BUSINESS PARTNERS | SEPTEMBER-OCTOBER 2014

NEW DG AT SFEE Michael Himonas was appointed Director General of SFEE (Hellenic Association of Pharmaceutical Companies), assuming his duties on September 1, 2014. Mr. Himonas has served in a number of senior management positions, the most recent as Managing Director, OPAP Cyprus (from 2011). From MICHAEL HIMONAS 2000 to 2010 he worked at Numil Greece (Nutricia - Milupa) as Managing Director Greece. He also served as General Manager at Walt Disney Greece, Balkans and Cyprus; Marketing Director at Pepsico International and Group Product Manager at Colgate Palmolive.

Mr. Himonas holds an MBA from the University of Baltimore, U.S., and a Bachelor in Marketing from the University of Maryland. He is married and has one daughter.

The Hellenic Association of Pharmaceutical Companies (SFEE) represents one of the most dynamic sectors in Greece which contributes in many ways to the national economy. Pharmaceutical companies employ over 13,500 employees, the majority of which are highly educated scientists.

P&G—NEW VICE PRESIDENT Hans Dewaele took over from Robert van Pappelendam Procter & Gamble’s Greece leadership in the context of his new appointment as Vice President South Eastern Europe.

Born in Gent, Belgium in 1962, Hans joined Procter & Gamble in 1988 as Brand AssisHANS DEWAELE tant in Saudi Arabia; he has Economics and Business Administration degrees from State University of Gent. After numerous international Marketing assignments in Europe, Africa and Asia in 2004 he moved to Pakistan as General Manager. From 2006 to 2013 he pioneered in developing new markets and establishing P&G in Central Asia as Vice President Caucasus, Central Asia Republics and Mongolia.

Hans is married with four children.

LEARNED WORDS

FAMILY VALUES

—Benjamin Franklin

—Martin Luther King, Jr.

Tell me and I forget. Teach me and I remember. Involve me and I learn.

We must learn to live together as brothers or perish together as fools.

▼ NEW CEO AT HELLENIC REPUBLIC ASSET

DEVELOPMENT FUND

EVA ADOSOGLOU FULBRIGHT SCHOLAR, BOSTON UNIVERSITY

A Fulbright Story What is the role of e-learning in organizations today?

There is a constant need to train and retrain people in concepts, processes, new products and new technologies within organizations and e-learning is the best solution since it reduces the training time and engages the learner’s attention. It integrates into work and is readily available to employees, since they can learn even via a mobile device. However, there is room for improvement in tailoring e-learning to each employee and making it more attractive to them by using gamification and videos.

How can Greece leverage this?

Greece can benefit from e-learning because of the low cost of delivery and because it can be used not only to teach technical and soft skills but also for cultural change within organizations—and Greece is in great need of this.

How is your Fulbright award furthering your goals?

The Fulbright award opened a new world to me by giving me the opportunity to participate in discussions, projects, new ideas and experiences. The Fulbright Foundation trusted me and gave me the award and to a great extent it’s because of this award that people in the U.S. trust me too, by allowing me to create products for the university.

Paschalis Bouchoris (photo) was named CEO of HRADF (TAIPED). He studied Electrical Engineering at the National Technical University of Athens and holds a Master of Business Administration (MBA) from Rotterdam School of Management.

Prior to his current position, he worked for National Bank of Greece in several senior management positions overseeing the activities of large corporate special assets (NPLs), international corporate banking, and private equity (mid-market buyouts and development finance). His past experience also includes executive and advisory positions in the U.S. and Greece specializing in restructurings, M&A and corporate investments. ▼ HINES OPENING AN OFFICE IN GREECE Hines, the international real estate firm based in Houston, is opening an office in Greece.

Hines said Paul Gomopoulos (photo) has been promoted to Managing Director and will be relocating to Athens to begin Hines operations in Greece. “We believe that the time is right for Hines to bring its world class real estate development and investment capabilities to Greece. The country is transforming and the entrance of Hines and other institutional quality players will further promote this transformation,” said Mr. Gomopoulos.

Currently, Hines manages 391 properties totaling 161 million square feet, which includes 89.1 million square feet for third parties. With offices in 115 cities in 18 countries, and controlled assets valued at approximately $28.2 billion, Hines is one of the largest real estate organizations in the world. ▼ ONEX DELIVERS AVIAN SYSTEM The ONEX technical team successfully completed the training of the personnel of the Hellenic Coast Guard in the innovative AVIAN Heartbeat Detector System. This detection system, delivered by ONEX to the HCG, is a powerful “weapon” available to the Port Authorities for the effective confrontation and suppression of smuggling or illegal immigration and illegal boarding of human beings or animals, which are hidden in trucks or containers. In addition, ONEX, for second consecutive year, was named National Champion in the category of “The Entrepreneur of the Year” for the period 2014/15, among 24,000 companies from 33 European countries, in the European Business Awards (EBAs), Europe’s larges awards institution.

FLY ME AWAY

HEAR! HEAR!

SURVIVORS

—Friedrich Nietzsche

—Ernest Hemingway

—Charles Darwin

He who would learn to fly one day must first learn to stand and walk and run and climb and dance; one cannot fly into flying.

I like to listen. I have learned a great deal from listening carefully.

Most people never listen.

In the long history of humankind (and animal kind, too) those who learned to collaborate and improvise most effectively have prevailed.

SEPTEMBER-OCTOBER 2014 | BUSINESS PARTNERS | 15

HERITAGE ECONOMICS

The European Heritage Label

T

he European Heritage Label is an initiative designed to highlight heritage sites that celebrate and symbolize European history, ideals, and integration. It aims to strengthen the support of European citizens for a shared European identity promoting cultural property, monuments, natural or urban sites, contemporary and traditional heritage that have played a key role in building and uniting Europe. In this way, the European Heritage Label is also designed to encourage people to understand, respect and support their heritage.

The European Heritage Label has a different function to UNESCO’s World Heritage list. The first aims to promote the protection of monuments and sites based on their universal value, while the latter is based on European cultural history and identity.

The European Heritage Label: • Designates sites of historical importance to Europe and the EU • Chooses sites on the basis of their symbolic value • Helps people learn about shared European history, cultural heritage, and values • Encourages networking between the sites and heritage professionals • Increases cultural tourism

HOW DOES IT WORK?

The label is awarded in two stages, a pre-selection stage and a selection. During each selection process can be awarded only one label per country. During the pre-selection stage, EU countries may choose up to two sites biennially, following which, at selection stage, a panel of 13 independent experts will be set up to select and monitor the sites. The panel of experts examines the

A new initiative could impact Greece’s potential to promote its vast heritage.

applications and recommends which sites should be awarded the label on the basis of an established set of criteria.

WHAT ARE THE SELECTION CRITERIA?

Candidate sites are assessed on the basis of projects which: • Raise awareness of the European significance of the sites • Organise educational activities • Promote multilingualism and ease access by using several languages • Take part in the activities of networks of sites awarded the label • Raise the profile and attractiveness of the site Candidate sites must also submit a work plan which includes: • Provisions for the sound management of the site, including objectives and indicators • Measures to preserve and, if necessary, transform the site • The provision of high quality reception facilities • Steps to ensure access for the widest possible public • Measures to include and engage young people • Promotional activities to increase tourism • A communication strategy highlighting the European significance • Provisions to manage the site in an environmentally friendly manner

WHO CAN APPLY?

Potential candidate sites must be located in an EU country participating in the scheme.

Potential candidates should demonstrate the cross-border or pan-European nature of their site, as well as demonstrating their place and role in European history or in-

16 | BUSINESS PARTNERS | SEPTEMBER-OCTOBER 2014

tegration and the promotion of common European values. Candidates can be national, comprised of several sites from a single country, or transnational, comprised of thematic sites from at least two countries. In both cases they should consist of a reasonable number of participating sites with a clear thematic link, a common name, a single coordinator, and a single point of contact.

THE NATIONAL FOCUS POINT

The Focus Point, settled in every country, spreads the knowledge of the European Heritage Label in the country, through the organization of information days, the publication of information materials, management and updating of the website and assists site managers interested in applying for Action in the application process through help-desk phone and by e-mail, and by means of appointments in place. Care also relations with the European institutions responsible for Community Action.

EDU TECH

Harry Daskalakis, CEO of Athens Tech College, a new education institution in Athens, discusses how this new collaborative initiative can create a new model for Greece.

HARRY DASKALAKIS CEO ATHENS TECH COLLEGE

ď ľ www.athtech.gr T: 2108088008, E: info@athtech.gr

From BCA, an educational institution which has traditionally offered business studies in Greece, comes a new college which focuses on the world of technology and innovation.

How did you come up with this idea?

In the present global economy, collaborations among organizations sharing common values and visions are not only fostered but also imposed as an indispensable business strategy.

BCA College, the oldest and largest college in Greece offering business studies, and INTRACOM, one of the biggest organizations in Europe in the sectors of high technology and innovations, will bring together their expertise and know how to offer valid programs of study.

We strongly believe that this will be one of the most significant collaborations in the field of education that has ever taken place in Greece.

What kind of college is Athens Tech? What courses can a student study? Will you be offering postgraduate studies?

ATHENS TECH College is a new college specializing in the fields of technology, innovation and computer science, which will offer university degrees from the university of Sheffield, one of the most esteemed British universities.

More specifically, it offers a bachelors degree

in computer science and a masters degree in the Management of Business, Innovation and Technology, the latter being a very successful and appealing program among executives running for the past 10 years at AIT. That means that you are offering disciplines that are for the first time available to Greek students, without having to study abroad?

Our collaboration with the University of Sheffield, whose programs of study in technology and computer science are ranked 6th in the rankings of British Universities, ensures that Athens Tech College’s students will receive the best education possible, at a lower cost, without having to study abroad.

Why should someone choose Athens Tech College among others?

ATH/TECH College is the result of a joint venture between two of the biggest and acknowledged educational institutions in Greece. It is supported by one of the largest information and telecommunications conglomerates in Europe and offers university degrees from the University of Sheffield. At ATH/TECH College, we offer small classes to ensure that our students will receive the best education possible.

SEPTEMBER-OCTOBER 2014 | BUSINESS PARTNERS | 17

HEALTHCARE

A NEW BIOPHARMACEUTICAL COMPANY WITH A RICH HERITAGE

S

ince January 1st 2013, AbbVie is a new, independent, global biopharmaceutical company that focuses on the development of advanced treatments for some of the most complex and serious diseases, such as Rheumatoid Arthritis, Psoriasis, Crohn’s disease, Ulcerative Colitis, Hepatitis C, Parkinson’s Disease, HIV infection, Respiratory Syncytial Virus (RSV) infections, Chronic Kidney disease, Ankylosing Spondylitis etc.

The name AbbVie derives from two components. The first component “Abb”, represents the strong legacy that carries with it from Abbott, while the second, “Vie”, comes from the Latin root of the word “life” and underlines the commitment of AbbVie to improve the lives of patients.

AbbVie combines the passion of an innovative biotechnology company with the expertise and 125 years of experience of a renowned leader in the field of medicine, developing and ensuring access to innovative and effective treatments to patients around the world.

THERAPEUTIC AREAS

AbbVie focuses on the development of advanced treatments in

Immunology

Anaesthesiology

PEOPLE. PASSION. POSSIBILITIES.

Globally, AbbVie employs 25,000 people and operates in more than 170 countries.

In Greece, it has about 100 highly qualified employees in various disciplines. More specifically, 95% of AbbVie Greece employees are tertiary-level graduates, 4 out of 10 hold postgraduate degrees, while 50% of them speak at least two foreign languages. All of them share a common goal: to make a remarkable impact on patients’ lives.

PATIENTS AT THE CENTER OF EVERYTHING WE DO

Constantly seeking to gain a deep understanding of patients’ needs, AbbVie offers a broad range of innovative biologics. At the

18 | BUSINESS PARTNERS | SEPTEMBER-OCTOBER 2014

Kidney Disease

Virology

Neuroscience

ABBVIE: AMONG THE MOST REMARKABLE COMPANIES IN THE WORLD ACCORDING TO FORTUNE AND SCIENCE

same time it conducts clinical trials on medicinal products, everyday and around the world, obtaining new patents.

Specifically, AbbVie’s broad mid-to latestage pipeline includes more than 20 clinical trials, 11 of which are in Phase III development, with a target of receiving 13 approvals of new compounds or indications by 2018.

Indeed, AbbVie looks forward to introducing in the Greek market a truly innovative medicine against Hepatitis C in 2015.

In Greece in particular, since the beginning of 2013, AbbVie has invested more than 4.5 million euro in clinical trials, while in this period 31 clinical trials have been conducted in the areas of immunology, oncology, virology, neuroscience and others in more than 70 clinics of Greek hospitals.

Finally, AbbVie Greece has set as a target to have 10% of the total investment in clinical trials by the parent company directed to Greece.

100

highly qualified employees IN GREECE

AMONG THE MOST REMARKABLE COMPANIES IN THE WORLD ACCORDING TO FORTUNE AND SCIENCE

Research and innovation are the cornerstones of AbbVie’s business and this is also indicated by its recent nomination, by the world-renowned Science journal, as one of the Top Employers in the biotechnology and pharmaceutical industry.

According to the official results of a survey of more than 3,000 participants, the biopharmaceutical company AbbVie ranked fourth on the annual list. This is a particularly significant distinction, considering the company’s relatively recent establishment. Among others, AbbVie was distinguished for its important, quality research, its clear vision and its social responsibility.

Furthermore, AbbVie ranked eighth in the annual listing of the renowned magazine Fortune for the World’s Most Admired Companies in the pharmaceuticals industry. The biopharmaceutical company AbbVie was one of the 15 pharmaceutical companies that were evaluated for this prestigious ranking for the pharmaceuticals industry. A company’s score must rank in the top half of its industry survey in order to be on the Fortune’s list.

Moreover, AbbVie ranked 5th in its industry in quality of products and services, social responsibility and the use of corporate assets categories.

TOWARDS HEALTHCARE SUSTAINABILITY

AbbVie seeks to collaborate with all competent stakeholders, aiming to contribute in a common effort to address the challenges faced by the Greek healthcare sector.

The UNIPART project, which was implemented in collaboration with other companies, exemplifies this pursuit. The project involved the optimization and cost reduction of the University Hospital in Rio (Patra) and resulted in reducing internal bureaucracy and operating costs by 20% in two parts of

Operation in

170

the hospital (Hemodynamic and Interventional Radiology) and also in improving the personnel’s time management.

At the same time, as part of AbbVie’s effort to address the challenge of providing sustainable healthcare to present and future generations, AbbVie in partnership with the European Public Health Alliance and Philips, recently brought together more than 200 national and European key healthcare stakeholders at a conference held in Brussels, to encourage and facilitate a broader debate that will lead to finding solutions.

The objective is to compile national whitepapers on addressing the challenges every healthcare system faces at a local level, so

16 % 18

Countries

that, in 2014, the most innovative ideas can be presented in a pan-European whitepaper.

SUPPORTING THE COMMUNITY

In the context of the company’s commitment to care for the underserved, AbbVie Running Team’s more than 40 members, led by the company’s General Manager, Mr. Pascal Apostolidis, participate in running events, for a good cause. A case in point is the recent support recently provided by the company to the Crohn and Colitis Association in Attiki and the Children’s Anti-Rheumatic Race in Northern Greece, yet another of AbbVie’s efforts to have a remarkable impact on people’s lives.

OF ABBVIE’S REVENUE is invested in R&D

MANUFACTURING and R&D Sites Worldwide

SEPTEMBER-OCTOBER 2014 | BUSINESS PARTNERS | 19

TRAVEL USA

On the occasion of Greece’s entry into the Visa Waiver Program, the U.S. Commercial Service of the American Embassy in Athens is showcasing all 50 states and five territories in Business Partners.

Discover America—Nebraska ★

N

ebraska is a land that still harbors the undiscovered. The vast state, which takes nearly eight hours to cross by car, includes a plethora of landscapes: yawning prairie, enormous sculpted rocks, wicked badlands, scenic rivers and of course, it has hundreds of miles of renowned, undulating grasslands.

The sunsets are some of the best in the world; the sky seems never ending and the rich hues of pink, red and purple are breathtaking. The spirit of the American West lives here still: cowboys still work cattle, and ranches cover thousands of acres in the central part of the state; guest ranches give tourists the opportunity to experience it all first hand. The people here are as memorable as the scenery - get off the beaten path and take in a warm piece of pie and some Midwestern hospitality at a small town cafe. Enjoy a glass of wine at one of Nebraska’s wineries, or go to a local festival for a taste of ethnic flavors. But the best part of Nebraska? It’s quiet. Turn off your mobile phone. Unplug the laptop. Put away the files. Relax, breathe in the fresh air and rejuvenate your soul. Nebraska will take you places you’ve never been before.

COURTHOUSE & JAILHOUSE ROCK

THE CORNHUSKER STATE LAND AREA 77,358 sq. mls POPULATION 1,783,432 STATE CAPITAL Lincoln LARGEST CITY Omaha LOCAL TIME CST and MT, 8 hrs and 9 hrs behind Athens CLIMATE Four season climate. Temperatures range from minus 20°F (-29°C) in the winter to more than 80°F (27°C) in the summer NATIONAL PARKS Eighty six

 For more information: Nebraska Tourism Commission Tel: 001 402 471-3796 Website: http://www.visitnebraska.com

20 | BUSINESS PARTNERS | SEPTEMBER-OCTOBER 2014

THE HUMAN AGE

LET’S GET REAL ABOUT NEW JOBS

BY DR VENETIA KOUSSIA PRESIDENT & MANAGING DIRECTOR, MANPOWERGROUP

DURING RECENT YEARS WE HAVE SEEN AN ENORMOUS RISE OF DISCUSSIONS, CONFERENCES AND DEBATES AMONG THE BRIGHTEST AND THE NOT SO BRIGHTEST OF EXPERTS, WITH REGARDS TO THE COLOSSAL ISSUE OF EMPLOYMENT.

W

e—in the developed, Western world—realized the hard way that one of the most important repercussions of the global economic crisis, which transcended geographical, societal and economic barriers, was that of unemployment and especially the one that affected our youth.

However, it seems that, unfortunately, we failed to realize that it is an issue that demands immediate, practical and substantial solutions, rather than political experimentations, balances of special interests and an effort to preserve a mindset that simply does not reflect tomorrow’s reality.

While the crisis in its economic realm will eventually pass, the global numbers of unem-

ployment, and especially the excruciatingly large percentage of youth unemployment in Greece, reflect a society of ripped opportunities, dreams, ambitions and wasted potential.

In this context, we have a profound responsibility to move beyond discussions, hip trends and inspiring quotes. We should all

realize that unless we all come together and forge practical, broadly shared solutions, our future, our business, our life as we know them will eventually change dramatically.

The first step in such a direction has to be the recognition of the real obstacles that we have repeatedly failed to knock down and

Unless we all come together and forge practical - broadly shared solutions; our future, our business, our life as we know them will eventually change dramatically

22 | BUSINESS PARTNERS | SEPTEMBER-OCTOBER 2014

that are keeping us from addressing the immense challenges that lie ahead of us, in a constructive and sustainable manner.

The first one is to be able to “connect” with young people. Some are eager to move forward, beyond all that has failed, and led us to where we are today: committed to capitalize on their advanced studies, their creative ideas and their ambition to conquer a better tomorrow. Others are so “damaged” by obsolete perceptions and are waiting for a solution to be found under a rock, while they have the potential to be so much more.

All of them feel distant from the elites, feel disappointed, frustrated and they have every right to feel like that. Just by playing with buzz words, new trends and well-marketed concepts, we will gain nothing. We need to be honest with them, to listen to them and to support them in appraising and accepting solutions that feel like unchartered waters.

A second critical obstacle is that of education. Once again, realizing the problem is of utmost importance. Our education system, whether we like admitting it or not, does not equip our kids to face today’s—and especially tomorrow’s—reality. It is an arena for the best and unfortunately most of our “coaches” don’t even know the rules of this new game. The academic mismatch is a reality just like the “mindset mismatch.”

A recent study revealed that more than 80% of young people of age 18-34, feel that they are not adequately prepared to enter the labor market, while ManpowerGroup’s recent Talent Shortage Survey indicates that 42% of the employers are having trouble locating the right talents for their business … obviously we are doing something wrong.

We need to be able to go back to the fundamentals of our education system and educate our kids how to be critical doers, how to solve issues before they appear, how to unite their ideas and forces and how to build their life through their talents and dreams. We need to rediscover and cultivate the importance of “paideia” not in its confined term of education but in its broader ancient Greek meaning that included all the aspects of participating and advancing within society.

Another important obstacle is related with our own inability to be really helpful. Con-

42%

HAVING TROUBLE LOCATING TALENTS

642K 80%

YOUTH UNEMPLOYED

OF YOUTH FEELS NOT ADEQUATELY PREPARED fined by impractical and, in many cases, unreasonable policies, practices, legal frameworks and anachronistic tools, it seems almost impossible to change anything the way we are doing things. In a period when we should have scrapped all manuals and blueprints with regards to employment, entrepreneurship and job creation and should unite—government, organizations, corporations, NGOs, universities and schools—all

our expertise and resources to build a better Labor Market that can empower high impact entrepreneurship and the creation of real, fair and sustainable jobs, we still try to explore what collaboration means and to maneuver around yesterday’s way of thinking.

Finally, we have to knock down the obstacle of “wishful thinking” that prevails and unfortunately creates false expectations. The issue of youth unemployment and the creation of new jobs is not going to be solved by magic, overnight, with an one-size-fitsall approach or simply through investing in young, women or anything other kind of entrepreneurship. Entrepreneurship, like technology, are essential tools in moving forward but they are not enough. We need real solutions that will move far beyond politics, interests and what we-wish-we-had.

The young people—whether they choose to become entrepreneurs, executives, skilled workers, teachers, artists or even politicians—overflowing with meteoric dynamism, ideas and potential, can lead us to growth, jobs and social prosperity. They can succeed where we failed and they can build their own future and not the one we are handing over to them.

The least we can do is nurture and empower them constructively, remove all overwhelming obstacles … including ourselves if we fail to act as needed.

LACK OF TALENT IN GREECE AND GLOBALLY 2008-2014 50

47%

45

42%

41%

38%

37%

40 35

29%

30

24%

25 20 15

31%

30%

31%

2008

2009

2010

34%

34%

2011

2012

35%

36%

2013

2014

10 5 0

Worldwide

Greece

SEPTEMBER-OCTOBER 2014 | BUSINESS PARTNERS | 23

THE INTERVIEW

HEALTH CARE &

STRATEGIC CHOICES ERIK NORDKAMP, PRESIDENT & MANAGING DIRECTOR, PFIZER GREECE

The pressure for cost reductions has kept up, whilst the structural reforms are only at the very beginning. This means that profit margins for every supplier of health and health care products and services have been reduced and—as a consequence—quality has also degraded. Furthermore, the Greek market has lost some of its investment appeal, a fact that doesn’t bode well for the future. It is better to make strategic choices rather than keep everyone happy, because this will probably backfire in the end.

Please provide a framework in which to evaluate the current state of healthcare vis a vis recent reforms.

Before the crisis, the Greek healthcare system had provided patients easy access to the most innovative products and procedures. The number of healthcare professionals and services per capita had been the highest in Europe and, as a result, the health indicators looked good.

Since the crisis, the Troika reforms have mostly focused on curbing costs through pricing and rebates. The introduction of a primary-care led healthcare system, which in other countries has kept the lid on costs, has not yet functioned properly, and therefore fails to reduce unnecessary procedures and prescriptions.

How viable is the Greek healthcare system—and what does the near future look like?

As I mentioned, the pressure from Troika has led the healthcare system in a direction where its costs will be manageable and consistently tracked, which was an essential first step. What the Greek health care system now desperately needs is a health care strategy that balances cost management with health care quality.

This means making choices that fit with Greece’s culture/ financial means and then sticking with them through structural reform. Unfortunately this seems not feasible in the short term, with possible elections looming. There are many examples to choose from. In the UK national health system, where everyone has access, costs are centrally managed and specialist services are available only after a GP referral. The Dutch system makes it obligatory for everyone to buy a basic insurance package and then offers options to buy in more health coverage.

Rare and serious diseases are covered through the state and the tax system.

This is also important as, in today’s global environment, providers of products and services need to operate in predictable and consistent systems, which allow their investments to flourish. This is the best way to ensure Greece will also have access to innovative products and services in the future.

If Greece doesn’t make these strategic choices and implement them properly, I am afraid it will slide in the OECD rankings on health indicators and the health industry will deprioritize Greece in its global investment allocation.

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How key is investment in the sector, especially in relation to economic growth?

The government has adopted foreign investment and increase of employment as key priorities. In this effort, the pharmaceutical sector can have a crucial role. It is the number two export industry for Greece and, at the same time, one of the largest sectors providing employment for highly skilled employees. We should keep in mind that Greece is number five in the world for the number of highly skilled workers per capita. If there are not enough employment opportunities, a significant part of this human capital will have to leave the country, exacerbating the so-called “brain drain” problem.

Greece has thrived in the past with a perfect mix of global multinationals and local Greek companies. It will need both to be successful in bringing back economic growth on a sustainable basis.

In order to attract investment from multinational companies, Greece competes with other countries. To compete it needs to provide predictable, sustainable and attractive conditions for its key investment areas and its marketed products.

Unfortunately we have seen foreign investment plummet, as key conditions to be competitive for research facilities, clinical trial development, and manufacturing are not met and the cost of doing business in Greece is increasing.

We have offered to help the government set up a strategic plan with the support of our experts, large local players, and in collaboration with key Ministries of Health, Finance and Development, as well as the Prime Minister’s office. The cabinet reshuffle halted these efforts. It is crucial that this work is picked up and delivered alongside the continued and necessary cost containment efforts.

In what way will patients best have access to novel and forward-looking treatments?

I will come back to some points I made earlier and stress that a key prerequisite for novel and forward-looking treatments is a predictable and sustainable pharmaceutical market, allowing fair returns on investments made. International markets are interconnected in several ways and this can also create risks for companies. If the return we can earn on our investments isn’t fair and the (international) risks outweigh the benefits, companies may choose in future not to launch products in certain markets. This has already happened in certain markets.

I also have to say that, as an industry, we have a lot of work to do to show the value of our innovative treatments, both to the public and the governments.

We have collectively stepped up our efforts to look for unmet need and new mechanisms of action. 70% of our pipelines are new modes of action and 30% are targeted/personalized medicines. Not every product will be a breakthrough medicine, but every product should provide significant progress over currently available treatments.

Governments should also create enough financial headroom for these new innovations by bringing down prices for off-patent products, stimulating use of appropriate medicines through treatment protocols and guidelines and right incentives.

How can private-public partnerships advance healthcare for citizens, the industry for companies, and growth and greater employment for the economy?

As I mentioned, these types of collective partnerships are key in making sure governments understand how multinational companies make their investment decisions, how healthcare systems globally are evolving, and how the local healthcare system and economy can best benefit from these advances and new competitive forces.

What the Greek health care system now desperately needs is a health care strategy that balances cost management with health care quality The government will stay in the driving seat off course as they will make the choices, but involvement of important global and local players in a trusted collaborative and durable partnership will benefit both the public and private sector.

There are examples of countries that have started on this journey and are already reaping the benefits with higher rates of investment and access to better products and services. There is no reason why Greece shouldn’t be amongst them.

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THOUGHT LEADERS

THE WORLD IS CHANGING. FAST. ECONOMICS AND TECHNOLOGY ARE CREATING NEW MODELS FOR DEVELOPMENT. THOUGHT LEADERS IN HEALTHCARE EXAMINE THE CHANGING WORLD OF HEALTHCARE IN GREECE—CHALLENGES, OPPORTUNITIES, EMERGING CONSIDERATIONS, POTENTIAL SOLUTIONS. —Raymond Matera

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HEALTHCARE IN A CHANGING WORLD

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THOUGHT LEADERS

Towards a Sustainable Health Care System

T

PASCAL APOSTOLIDES GENERAL MANAGER ABBVIE GREECE, PRESIDENT OF THE PHARMA COMMITTEE OF THE HELLENICAMERICAN CHAMBER OF COMMERCE, VICE PRESIDENT OF THE BOD OF SFEE

he establishment of a sustainable health care system in Greece is both a challenge and a key priority for the whole pharmaceutical sector. This is the reason, indeed, why our industry is making a decisive contribution to government efforts currently being made in this area; a contribution that is quite disproportionate to our share in overall health spending, which accounts for just 20% of total spending.

Until now, of all the sectors which collaborate with the state, the outward-looking pharmaceutical industry, with its significant contribution to the national economy and to employment, has sustained the greatest cuts, having accumulated outstanding state claims of many hundreds of millions of Euros. The fact that over the last four years spending on pharmaceutical products has been slashed by 55%, while the reduction in spending on other health providers has been significantly lower, is certainly worth noting.

Meanwhile, the pharmaceutical market has seen a decline in values in the order of 11% (June 2014 compared with June 2013), while the average per capita pharmaceutical spending in Greece has contracted to levels dangerous to public health, with the EU average in 2013 50% higher than the figure for Greece.

Therefore, it is imperative to frame a solid policy, geared to development and growth, prioritizing the organization of a patient-centered Primary Health Care system and the drawing up of a National Action Plan for Prevention.

Whereas, the investment in

The first step . . . should be a realistic revision of public spending on outpatient pharmaceutical spending for 2014 to 2.3 billion Euros 28 | BUSINESS PARTNERS | SEPTEMBER-OCTOBER 2014

innovation will promote greater efficiency and more prudent spending across the whole of the health system.

The first step in this direction should be a realistic revision of public spending on outpatient pharmaceutical spending for 2014 to 2.3 billion Euros. At the same time, clawback will need to function as a safety net in the event of a modest deviation from the realistically set target, not as an instrument for policy making and funding of health care.

Having made this change, steps must be taken to ensure adequate funding for EOPYY, with a provision for fair allocation of spending to all its providers. It goes without saying that the organization’s outstanding debts need to be settled, in order to ensure that no new generation of debts is created.

For the pharmaceutical sector in particular, the implementation of the system of therapeutic protocols and a greater penetration of generic and off-patent medicines at competitive prices according to European standards, are essential.

Within this context, cost savings can be used to secure access for Greek patients to innovative drugs, creating at the same time an incentive for corporate research and development.

Additionally, predictability in the health system and in pharmaceutical spending will play a decisive role in encouraging new investment by the pharmaceutical industry in Greece, whether through further development of clinical studies, or through expansion of production and export activity.

All this time, the pharmaceutical industry has demonstrated that is a trustworthy social partner and that is willing to make a creative contribution to the shaping of a new health policy in order to achieve reform of the health sector. It is an effort in which we must all join forces, focusing, as always, on the patients’ needs.

The Health of Our Economy is Based on the Level of Health in the Country

I

n advanced countries, the future of the health sector is closely interrelated with both scientific progress and fiscal consolidation developments. There’s no doubt that global population growth and the steady increase of the number of people after their 60’s, particularly in the western world, brings forward, at first glance, a whole new era of challenges for the health sector. The scientific advances that are taking place at an accelerating pace could theoretically provide a vast number of people with therapies unseen before and new holistic solutions for patients. And indeed, big tectonic shifts are already happening in the global pharmaceutical industry caused by new discoveries and search for the optimal business model that could potentially transform the way that are treated lethal conditions like cancer or Alzheimer’s disease.

However, the whole outlook of the future of health care is heavily dependant on the policies

ereign debt gets accumulated beyond a certain level. If governments across the globe continue to procrastinate in getting the daring decisions necessary to realign the global economic powers and reprogram the international financial system, all sectors will be affected in a way that it would be difficult to fulfill their true potential.

Of course, the same can be applied to Greece, the first western country where the severe sovereign debt complication first appeared in the post-War era. The progress that has been achieved since 2009, through the implementation of a far-reaching stabilization program, cannot be underestimated. We have achieved the quickest return to fiscal health on record ever. However, state investment in health care has been greatly reduced while the 5-year recession has led to a similar drop in private investment. Now that we might have reached the end of the crisis, the imminent goal for the economy is to continue to operate in

KONSTANTINOS FROUZIS PRESIDENT, SFEE (HELLENIC ASSOCIATION OF PHARMACEUTICAL COMPANIES)

All in all, the health sector holds unimaginable promise related to the global problem of sovereign debt.

All western economies including Europe, the US and Japan are heavily indebted as never before and doubt is growing over whether they can sustain the present level of investment in the health sector. Although emerging economies, like China or India, are expected to steadily increase their meager present level of investment in social nets and health care—and even if these two countries represent almost 40% of the world population—it is highly unlikely that we could see any impressive shift given that no emerging economy can continue growing indefinitely if the West stagnates. Therefore, it is more than evident that even the health sector could not be exempt of the general rule that basically dictates that there’s no growth when sov-

an environment of relative certainty where small steady steps of progress must be made. But the ushering in of a new era remains a far-reaching target. The Eurozone has not come anywhere close to a new framework of governance that is badly needed if Europe is to achieve again, as a whole, the levels of competitiveness necessary to sustain high growth and provide the aging populations in particular with all fruits of scientific progress. This deficiency certainly affects Greece alongside the rest of Europe. All in all, the health sector holds unimaginable promise, thanks to the efforts of a number of bright and talented scientists in Greece and across the globe—but this promise requires radical action in the fiscal and economic front in Greece and Europe and we are optimistic and committed to make it happen.

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THOUGHT LEADERS

The Future of the Healthcare Sector

A NIKOLAOS VIGKOS MERCK: CHIEF FINANCIAL OFFICER – GREECE AND CYPRUS, MEMBER OF SFEE, MEMBER OF EEDE AND SEODI

t the dawn of the second half of the current decade, many issues in the Health Care sector correlate more and more, with economics and finance. The weakness of Social Security Funds to compensate the expenditure of a country’s citizens is the key driver for change, not only in Greece but in the most developed countries, in Europe and worldwide.

To that end, the Greek State tried to squeeze public healthcare expenditure by using unprecedented measures for taming the increasing rate of pay outs. Claw backs, rebates, price erosion, patent cliff, and prescription quotas were considered the most efficient market measures for that purpose. At the same time Greek citizens were subject to a significant increase in the outof-pocket contribution when they submit their prescription of pharmaceutical treatment. When those measures were implemented, the Greek State saved billions of Euros.

These kind of measures, set forth to market caused pharmaceutical expenditure to decline by

Therefore, the only way of Greece to achieve a sustainable growth plan and realize organic development is to be transformed to an exporting economy up to € 2 bn, which represents about 1% of Gross Domestic Product (€ 185 bn approximately) taking into reckoning the cost of uninsured citizens.

Considering the impact as a percentage in GDP we did not, however, measure the impact on the purchasing power of residents. The standard of

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living of the country’s residents significantly deteriorated while the unemployment rate remains high, money circulation slowed down to almost zero and wealth was concentrated to intermediaries of market stakeholders.

Having realized that austerity measures create various issues, not only to market participants but also to citizens, an additional plan was agreed between the Greek State and the “troika” for strengthening the expenditure of generics compared with patented drugs. Moreover, provided that the State leaves Generics prices to be determined in consistency with market requirements, innovation and cost effectiveness will be enhanced. Additionally, companies with out-ofpatent drugs take in the advantage to implement new investments, fostering the increased demand and therefore be entitled to increase their market share. At the same time the agreed plan stabilizes imports from foreign countries as the patent cliff protects the new drugs for a long time—more than a decade. As a summary, expectations for increasing domestic output will be raised and the public sector will be burdened by both the domestic output and imports costs.

Taking these factors into account, low cost drugs demanded from both sides of the market i.e. buyers and sellers, might be the next step in the industry. Key drivers should be development projects, either by domestic or multinational companies, which are targeting exports. Therefore, the only way of Greece to achieve a sustainable growth plan and realize organic development is to be transformed to an exporting economy. In most cases, Greece can achieve comparative advantage as the financial crisis is surpassed. Furthermore, Market experts evaluated Greece among Emerging Markets as a potential growing country protected as a member of Eurozone and, last but not least, because we have a great history in medicine and pharmaceutical science, with great scientists and healthcare professionals.

THE MEDICAL DEVICE AND DIAGNOSTICS SECTOR

Value, Trends & Innovation THE VALUE OF MEDICAL TECHNOLOGY

Good health is a prerequisite for well-being and economic prosperity. Medical technology therapies and services help people live healthier, more productive, socially active, independent lives and reinforce employability. In doing so, medical technology contributes to ensuring economic growth through better health of the workforce.

Medical technology is used to ensure health in individuals suffering from a wide range of conditions and is involved in an entire pathway, from diagnosis to cure. It extends life and brings healthy life years, reduces symptoms and prevents disease progression, thus playing an essential role in healthcare.

TRENDS

MD&D is one of the most dynamic sectors in the world. The latest worldwide reviews and forecasts on the Medtech market show an expected annual growth of 4.5% between 2011 and 2018, reaching global sales of $440 billion in 2018. A number of factors are contributing to the rise in healthcare spending including changing demographics, aging populations and the growth of chronic illness.

The medical device and diagnostics sector has strong clinical and economic value propositions when it comes to convincing payers where to allocate budgets.

After the economic crisis in Greece, policy makers have based decisions primarily on the cost element, thus losing the longer-term benefits that technology has to offer. As a result the Medical Technology sector has been running at a declining rate for the past several years.

In Greece, overall health spending in real terms was 25% lower in 2012 than in 2009, primarily driven by cuts in public spending as part of government-wide efforts to reduce the large budgetary deficit.

According the local 2013 Medical Device Study

by ICAP, the Medical Device Industry market size dropped by 23% in 2010, 27% in 2011, 18% in 2012, with an estimated 4.3% drop in 2013.

The Medical Technology sector as a whole will continue investing with the aim to increase health care standards.

MEDICAL TECHNOLOGY INNOVATION

Medical technology is characterized by a constant flow of innovations, which are the result of a high level of research and development within the industry, and close cooperation with the users.

In 2012, more than 10,000 patent applications were filed with the European Patent Office (EPO) in the field of medical technology – equivalent to 7 % of the total number of applications – more than any other technical field.

THEODOROS LIAKOPOULOS JOHNSON & JOHNSON HELLAS S.A.C.I. – GENERAL MANAGER

COST EFFECTIVENESS

We need to be very cost conscious when we introduce more efficient medical devices, equipment, diagnostic machines, and advanced procedures, considering that there is great potential to save money. There are many examples of technologies whose cost is offset by the savings obtained by prevention, reducing length of hospital stay, operating time, intensive care unit time, patient complications, infection rates, and faster return to work.

Early diagnosis, hip and knee replacements, advanced cardiology interventions, advanced laparoscopic surgical procedures, fighting infection, managing diabetes and obesity are some examples of where the value of technology and cost savings are evident.

According to the recent new Milken Institute Report, an important assessment was made on how improved patient access to innovative medical technology can provide value to the U.S. economy, both now and in the future. The report demonstrates that, with the proper incentives, the U.S. can continue to reap economic benefits from medical technology for decades to come.

Over the next 25 years, policies favoring medical innovation are projected to result in U.S. economic gains of $1.4 trillion from future generations of technologies for the four diseases studied—diabetes, heart disease, musculoskeletal disease and colorectal cancer.

The medical device and diagnostics sector has strong clinical and economic value propositions

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THOUGHT LEADERS

It’s Time for Innovative and Good Decision Making, Sustaining Patients at the Center

O DR. MATYAS LAKATOS GENERAL MANAGER, AMGEN GREECE & CYPRUS

ver recent years, the health sector in Greece suffered from major expenditure cuts implemented abruptly to streamline the NHS. A question arises on how we go ahead building a sustainable patient-centric approach for access to quality healthcare. The scope of the past budget cuts are counterproductive for the NHS and devastating for society, given the accumulated effects of downturns in public health. It also shapes the fate of one of Greece’s key industries.

Ultimately, it’s the patient who loses out. Strategic thinking in health policy is imperative, capitalizing on the potential of pharmaceutical innovation for the NHS benefit and long-term viability.

Building on innovation under a holistic rationale of how the health system could best evolve requires abandoning outdated views and hurdles.

Only the focus on medium and long-term outcomes will guarantee the NHS’s sustainability. In this light, biotechnology being at the heart of pharmaceutical innovation is key to contribute to the longevity of the system for the benefit of patient.

Biotechnology, a process by which natural components of the body are produced in sufficient quantities to use therapeutically, will further push in the coming decades the boundaries of medicine, shaping its future. Half of all drugs in development are coming from biotechnology,

Building on innovation under a holistic rationale of how the health system could best evolve requires abandoning outdated views and hurdles

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and the majority of the truly novel therapies coming from this industry. Amgen is the largest independent biotech company worldwide, unlocking the potential of biology for patients by seeking to understand the fundamental mechanisms of life and the complexities of serious diseases. We achieve this by applying world-class innovation and ethical standards in discovery, research and manufacturing and make our medicines available to patients by offering strong clinical and economic value.

At Amgen Hellas we value the need of a holistic approach by actively seeking meaningful collaborations with all stakeholders, aiming to produce valuable research and local data, supporting effective policy reforms in Greece. We believe that access to innovative treatments, underpinned by cost-effectiveness data in combination with a sustainable, holistic policy-making is one key aspect of rationalizing NHS expenditure wisely.

An example of such a positive approach in our country was recently reflected by the ministerial decision on biomarker testing reimbursement.

These tests give an accurate diagnosis to determine if a patient is likely to benefit from a treatment, delivering better outcomes for patients and healthcare providers.

The clinical and economic added-value of cutting-edge science contributes to the right allocation of NHS resources. Amgen Hellas will continue to stay true to its commitment to substantially invest in projects with Greece’s health care providers. We are convinced that by bringing innovative therapies to Greek patients, this supports the holistic approach of policy making, brings added-value to patients and facilitates creating a sustainable national health care system.

Medical 3D Printing

M

edical technology is often over looked when discussing the hitech industry but medicine today relies immensely on technology.

The evolution of healthcare in recent decades, and the number previously life threatening ailments that have become manageable or even curable, is staggering. Taking into account how fast technology evolves it is clear that in the future medicine will continue to change dramatically. 3D printing is a relatively young technology with applications in many fields. In medicine it offers potential that we could not imagine a few years ago.

In its simplest form 3D printing uses a digital model to “print” or make solid objects from specific materials. The possible applications of 3D printing in medicine have already begun to appear: orthopedic surgery, bone reconstruction, skin reconstruction and organ transplantation are areas that are already being explored.

Orthopedic reconstruction is an area that has been attempted with good results. A 12-year old boy suffering from a rare bone cancer in China was recently given a spinal implant of a 3D printed vertebra. Using detailed CT scans surgeons created a model of the vertebra and printed it in titanium. When implanted it exactly matched the

tissue from a mixture of living cells, a possible application is in burn healing. Today, in burn cases, healthy skin is removed from a part of the body to replace the burned area. This procedure is very painful, may leave scars and also requires long recovery times. There are also cases of severe burns where there is not enough healthy skin left to be transplanted, which leaves physician with very few options.

Printing new skin from the patient’s cells would be the only solution. At Wake Forest University’s Military Research Center physicians have created a process that scans and “prints” new skin directly onto burns using a modified inkjet printer. Animal trials have showed positive results with greatly improved recovery times. Another approach is being taken by the Dutch company SkinPrint, which is attempting to “print” universal skin grafts that can be applied to any burn.

Organ transplantation is the area where 3D printing can truly redefine medical practice.

Typically a patient in need of an organ transplant waits for weeks or months for a compatible organ to be found from a donor; if the surgery goes well and the body does not reject the organ the transplantation is considered successful. Some patients do not survive long enough for a donor to be found and many more reject donor organs

SPYROS FILIOTIS VICE PRESIDENT & GENERAL MANAGER, PHARMASERVE - LILLY S.A.C.I.

In medicine 3D printing offers potential that we could not imagine a few years ago damaged one removed. The patient will recover faster and with fewer long-term effects than with conventional surgical treatment.

Another example is that of an 83-year old woman, claimed to be the first case of 3D printed implant transplantation. The woman’s lower jaw was totally damaged due to serious bone infection and because she was too old to sustain reconstructive surgery, doctors constructed a 3D printed titanium transplant of her jaw and implanted it surgically.

An evolving area is 3D bio printing, a process that could support a wide range of surgical procedures, especially in the field of regenerative medicine. With its ability to build human

for various reasons. 3D printing could bring a revolution that will save countless lives. 3D bio printing could construct functional organs in the future. Organovo, a company that provides 3D bio printing technology, has constructed a 3D human liver system provided to pharmaceutical companies to conduct drug toxicity tests.

Constructing organs that will function naturally may take decades of research and trials but 3D printing, and especially bio printing technology, will expand the frontiers of medicine. 3D printing offers true personalized medical solutions created for an individual patient. Today we have begun to see the first signs of the future.

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HEALTHCARE PERSPECTIVES

ASSISTIVE TECHNOLOGIES

BY LUNDY LEWIS

FOR ELDER CARE

THE ELDERLY ENJOY REMINISCING AND COMMUNICATING. THEY ENJOY BEING REMINDED OF PAST EXPERIENCES AND HAVING CONVERSATIONS WITH OTHER INTERESTED PARTIES SUCH AS FAMILY AND FRIENDS ABOUT THEIR LIFE HISTORY OR PARTICULAR LIFE EVENTS.

H

owever, there are common reports of frustration that caregivers who are around on a daily basis do not know the elderly person in the way that families do and thus cannot engage in such meaningful conversation. Further, with staff turnover, it is difficult for a single staff member to get to know the patient well enough to provide meaningful conversations about the older person’s life history or to bond with the patient. Due to advances in healthcare, a better understanding of healthy living, and birthing trends, in the next few decades there is expected to be a larger number of elderly patients but fewer professional caregivers, thus reducing the amount of time

that caregivers can spend with individual patients beyond the provision of essential services. This prediction holds for all developed countries, most notably for Japan.

To make matters worse, young students in psychology, sociology, nursing, and related disciplines are less interested in elder care than in areas such as child development,

special education, and disability management. For these reasons, a current interest among researchers and entrepreneurs is to develop ways to allow the elderly patient to enjoy narrative, conversation, and reminiscing without requiring human accompaniment but yet without diminishing the quality of conversation, e.g. by using

Inevitably, the future will be populated with robots as social companions, assistants, and co-workers

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avatars or robots rather than human caregivers. The idea is worthy of pursuit, but it raises issues along several dimensions.

Consider the common way that a family interacts with the elderly, be it in the patient’s home or in a residential care facility. The family typically gathers around the elderly person and simply talks. The topic may be what’s currently going on with family members, neighborhood gossip, perhaps politics, and the like. Often a family member will bring along a traditional photo album with items such as pictures, newspaper clippings, memos, even dried flowers or other items that spark memories in the elderly patient. Home videos and music are popular as well but the elderly really enjoy the human interaction.

Let us consider several representative examples of commercially-available technologies that can be used for social interaction, in order of increasing technical challenge.

One technology is a simple “engagement platform” that integrates several existing applications, e.g. voice-to-text, video conferencing, cognitive games, movies and shows, electronic photo/video albums, and electronic courses (www.in2l.com). Another technology is an avatar that converses with the patient while showing an electronic photo album. Interestingly, a remote operator, unrelated to the patient, provides textual responses to the patient and a textto-voice application verbalizes the text in a tone suitable to the avatar (www.gerijoy. com). Another technology is a tele-presence robot with which a doctor or a family member can converse with the elderly patient, drive around a room, or go speak with a nurse down the hallway (www.doublerobotics.com). Another technology is an anamaloid robot that is responsive to sound and touch, much like a real therapy pet (www.parorobots.com). And finally, the most technically challenging example is a humanoid robot that can be programmed to converse, recognize emotions, and carry out assistive behaviors (www.aldebaran.com).

Inevitably, the future will be populated with robots as social companions, assistants, and co-workers. Many entrepreneurs and researchers are gearing up for this kind of

An overarching question is the ethical and social ramifications of an elderly patient bonding with a humanoid robot future. However, such a future has serious implications having to do with policy, labor, security, acceptance, ethics, personhood, human relationships, technology, cost, management, et al. It is arguable that advances in robotics will influence how we view the world and ourselves as humans, which might cause a philosophical shift in our conceptual and cultural frameworks.

An overarching question is the ethical and social ramifications of an elderly patient bonding with a humanoid robot as if the robot were a real human.

Consider the managerial implication of robots as social companions. The type of enterprise in which assistive robots would be used is a Continuing Care Retirement Community (CCRC). The CCRC offers housing, healthcare, and services such as education and entertainment to provide quality of life for elderly patients.

The organizational structure of a CCRC is typical of most enterprises having to do with housed assisted living. Although types of executives will vary, the traditional CCRC organization consists of an Executive Director reporting to a Board of Directors, a Chief Financial Officer, a Chief Operating Officer, a Chief Information Officer, a Nursing Home Administrator to manage the day-to-day operations of healthcare, and directors of departments such as nursing, medicine, facility management, dining services, marketing, human resources, resident activities, and legal counsel. The staff that work day-to-day with the elderly includes doctors, nurses,

physical therapists, and cognitive therapists.

Assuming that robot companions prove to be beneficial in experimental trials, a pre-deployment study needs to be made in which the introduction of them into a CCRC is considered from managerial, operational, and legal points of view. The operations of a facility would require careful scrutiny with respect to liabilities, risks, effects on existing healthcare processes, possible process re-engineering, and possible effects on staff members and the elder’s family. For example, the CIO needs to consider whether the facility’s network and computer resources can accommodate the new companions in much the same way that any new information system is considered. The marketing department needs to understand the moral attitudes of potential patients and their families. The Nursing Administrator needs to understand how existing healthcare processes are affected and also consider the attitudes of day-today operational staff. The CFO needs to understand the return-on-investment. Most CCRCs do not have Information Security Officers, nonetheless possible security risks need be considered. If a robot can be reached via a wireless network, then there is the possibility of breaching the network and exploiting elderly patients in much the same way that people try to exploit them with email and telephony.

More research is needed to understand the managerial implications of electronic social companions. The organization and its operations should be looked at as a dynamic system whose elements may affect one another in unforeseen ways when elements are modified, when elements are introduced or removed, and when new lines of communication are opened.

Lundy Lewis is the Papoutsy Distinguished Chair in Ethics and Social Responsibility at Southern New Hampshire University in the USA (www.snhu.edu/14012.asp). He can be reached at l.lewis@ snhu.edu. This article is based on a longer study “Avatars and Robots as Social Companions in Healthcare: Requirements, Engineering, Adoption and Ethics” in the International Journal of Enterprise Information Systems, IGI Global Press, April-June 2014, Vol. 10, No. 2.

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TECHNOLOGIA

ORACLE, IT, AND A STRONGER FUTURE FOR GREECE ANTONIS MONOKROUSOS, COUNTRY LEADER ORACLE HELLAS, CLUSTER LEADER GCMM CLUSTER, SPEAKS TO BUSINESS PARTNERS ON TODAY’S KEY IT TRENDS, ORACLE AS AN IT LEADER, AND HOW GREECE FITS INTO EMERGING DEVELOPMENTS. Oracle is one of the key players in international market in Enterprise Software & Hardware. It has been in Greece for 25 years. How has the company evolved in this era of technology innovation?

Oracle Hellas celebrates its 25th anniversary this year as it began operations in Greece in 1989, when the local IT market was quite small. We’ve grown considerably and established a strong local & regional presence. We are proud to have worked on many strategic projects, especially in telecoms, banking, and the public sector. In a word, we’ve become a very successful subsidiary of Oracle.

Tell us about your success stories in Greece.

We have a large number of significant success stories, in the Greek private and public sectors and this is why, the Greek office and its staff, have increasingly also become active in the greater region of Southeast and Eastern Europe, Middle East and Africa, with approximately 40% of our talents working in regional positions. We have leveraged our Greek talent and developed hundreds of top professionals in Greece by investing in their training and education— this is one of our most proud achievements.

So, not only do we work in the Greek market but we are active exporters.

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We are proud to be active in key sectors. In telecoms, where we are a leader, we are working on large, in size, complexity and innovation, projects with all the telecom companies. In the public and banking sectors, our technology powers the largest data centers and applications—the very heart of their operations. And we are proud of our Greek engineers who develop and support these customers.

IT is at the center of change in our world.

How can IT be used to improve public sector performance?

It is the case worldwide that IT can boost productivity and raise citizen service level.

In Greece, there is considerable room to grow in IT automation and interoperability among core and local government and businesses. A core function, of course, is to also improve transparency and there is strong buy-in for this by decision makers. Our challenge lies in the proper implementation of plans and wills, overcoming lack of training, cooperation, teamwork, and organization. However, just as anywhere in the world, we should not expect miracles overnight; we should celebrate wins in a step-bystep approach and hope for a backbone IT strategy to be maintained through the years.

How can implementation be improved?

One critical way is through better and continuous training, as IT is evolving faster than any other industry. Oracle is, of course, keen to help. In the public sector we support and educate, on a long-term basis, IT professionals, civil servants in data centers and the like. And we’ve made this investment for 25 years. We’re not interested in selling and walking away. We believe this a differentiation strategy for Oracle in the Greek market.

How is the Cloud playing out today?

The crisis in Greece has slowed the market so the Cloud is not yet being used as much as it could. Greece needs to speed up its adoption—since it creates efficiencies and saves money to be invested in growth. Private clouds and consolidated resources are also areas that offer significant potential for both growth and improved performance.

Oracle also focuses on SaaS, with significant investments and aiming at global leadership, and application mobility, an imperative in today’s business world.

Also related to cloud, we focus strongly on engineered systems, where Oracle is an innovation leader. Oracle’s significant R&D investment led to the combination of hardware and standard software that operate together at the best levels, creating more computing power. By adding an extra software layer between the two, customers gain exponential power increases, while the whole system is totally standard and open. This is especially important in data and big data management and for powering cloud architectures.

In Greece, if we do not modernize, innovate and change in a timely manner, we shall not enjoy the full benefits of IT—this is a challenge

sities and colleges. Teachers and students get familiar with Oracle’s leading technologies and learn programming with Java, by designing animation and games in a more fun and attractive way, as well as database design and programming. Education is important, so we focus a lot to provide capacity—this is key—but we also support a variety of community and environment related organizations and we do volunteer work.

Please discuss Greece’s IT gap and how IT will affect the labor market.

Automation is a central question that has many repercussions, mostly positive, including changes in the workplace. It is a global reality that, while specific job roles are affected by automation, new ones, more sophisticated and better paid, are created. In Greece, if we do not modernize, innovate and change in a timely manner, we shall not enjoy the full benefits of IT —this is a challenge. Today, in Europe, there is a growing skills gap of 700,000 to 800,000 IT jobs. To help increase digital skills, Oracle is a pledger of the EU initiative, Grand Coalition for Digital Jobs and the Greek Coalition for Digital Jobs with the Oracle Academy program. It provides free-of-charge teacher training and software products to univer-

How are IT—and the Cloud—making inroads in Greece’s private sector?

In the private sector, private clouds are at the forefront. We see the first signs of big data projects and modernizing of applications, following years of crisis and low levels of investment. Greece offers many opportunities—for young people looking at IT entrepreneurship and especially in enterprises that look beyond Greece’s borders.

Also, Greece and local companies are able to use IT as they look to attract foreign investment and to export. The Greek market is a known and fixed commodity and looking beyond our borders is the logical next step. The State can focus on supporting this movement. Greece has a strong human capital bank, a strong IT profile, and can “sell’ this capital to foreign investors. With a better and stronger overview of these assets, Greece has the potential to attract important IT investments, but we should focus more in better preparing and actively ”selling” instead of waiting for investors to come and “buy.”

SEPTEMBER-OCTOBER 2014 | BUSINESS PARTNERS | 37

BUSINESS MATTERS

MERCEDES-BENZ—

RESPECT, PASSION, INTEGRITY, DISCIPLINE NIKOS PREZAS, SALES & MARKETING DIRECTOR MERCEDES-BENZ CARS AT MERCEDES-BENZ HELLAS, DISCUSSES THE CHALLENGES AND OPPORTUNITIES IN TODAY’S RAPIDLY EVOLVING AUTOMOBILE MARKET. Automobiles nowadays are equipped with a wealth of technology. What is the role of technology in driving efficiency and pleasure?

Today we are experiencing a paradigm shift. The world is rapidly changing and alternating peoples’ values, habits and beliefs. Because of this shift, Mercedes-Benz never stops investing in Research and Development, to implement technology that could revolutionize not just the automotive industry but transportation as a whole.

With Intelligent Drive, for example, a driver can easily and securely arrive to his/her destination by being able to foresee and avoid traffic, by putting on the speed lim-

iter to avoid speeding tickets or by being sure that the car, on its own, will warn the driver, or even stop itself, should he/she come too close to a vehicle ahead. Moreover, environmental aspects are also taken under consideration. With the technology used in our brand’s newly developed engines, fuel consumption has significantly decreased, even in our supercars, despite their high horsepower.

Many people say that the technology used in vehicles is “taking away” the fun of driving. I couldn’t disagree more! With so many vehicles and so many different drivers and distractions around us, one can always use the helping hand provided by

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the vehicle itself without refraining from sporty driving and fun. Even when autonomous driving takes over, the driver is always in charge.

What do you think is the future of the automobile regarding engineering and innovation?

The automotive industry is a major force of innovation. Let’s not forget that vehicles must operate in the harshest climates, from 100% humidity and high temperatures in a desert to freezing cold, from rough, unpaved surfaces tourban avenues, at high speeds and up to as many as 200.000km in their life time, meeting at the same time numerous and very strict regulatory standards. In this context engineering evolution and innovation in the car industry never stops and there is no limit on what can be put into motion. I am not really sure of how the future car will be but judging from what is currently being tested and what is on the road today, the future will give us more safety, more connectivity and more autonomous driving. Mercedes-Benz is the perfect example of such a scenario: Our brand was the first to complete a 100-km route – the historic route of Bertha Benz from Mann-

heim to Pforzheim – 100% autonomously with an S-Class 500!

Moreover, it is the first brand to present autonomous driving for trucks, making a quantum leap in road freight transport in terms of safety, efficiency and connectivity.

The self-driving Mercedes-Benz truck will definitely shape future transportation.

Could it be that the role of the automobile as a means of transportation will change in big cities, such as Athens and Thessaloniki?

As in all metropolises, the traffic issue in Athens and Thessaloniki is immense. Nevertheless, until the “metro” (underground) manages to serve most areas and suburbs of Athens and Thessaloniki, I believe that the car will continue to play the leading role in transportation.

However, considering that urban mobility is changing rapidly, we might see the trend of occasional vehicle use—car-sharing—also implemented in our big cities.

This concept, combined with electric drive, can significantly alter the way that modern transportation is perceived in Greece. It can have significant environmental and social benefits and help reduce pollution and congestion in big cities. Of course it requires some basic infrastructure to function but, most important, it requires a change in the mindset of the people.

Recession made the car market in Greece contract significantly. What are its prospects now that Greece is emerging from the crisis?

Optimists always see the positive aspect of things. Having experienced the car market during the recession as an “insider,” and looking at it recovering slowly but steadily, I strongly believe that the difficult “era of the plague” is behind us. Sales are now heading towards 70,000 units but reaching the “psychological limit” of 100,000 units will still take a while. The reason is that the consumers need to feel secure before they proceed with the purchase of a car, whilst the banks must reactivate and facilitate its purchase by offering sufficient liquidity. Everything depends on the Greek economy’s course in the

investment to our country. This of course doesn’t mean that Greece couldn’t be used as a provider in terms of research, testing or design. The car industry is multifunctional and complex, with plenty of branches and needs, both in skilled personnel and premises. Therefore, instead of whining over the lost years, we should, as soon as possible, decide on an investment-friendly and flexible system, in order to attract industries, including the automobile industry, which will give Greece international prestige and will employ a large amount of experienced, skilled but unemployed people, preventing them from moving abroad.

Today we are experiencing a paradigm shift.

The world is rapidly changing and alternating peoples’ values, habits and beliefs

forthcoming years, the stability and duration of the automobile taxation system and consumer confidence.

Could the automobile industry play a significant role in the Greek economy? What potential could it have?

Unfortunately, the general taxation and investment environment of the recent past hasn’t allowed any optimism for attracting

How much impact does the Mercedes philosophy have on your colleagues and the local communities in general?

Mercedes-Benz Hellas’ vision is to set the trends of the Greek automotive future, based on the mother company’s stable, indisputable values: Respect, Passion, Integrity and Discipline.

The Mercedes-Benz brand stands for quality, trust, safety and duration and its motto is “the best”! Each and every one of us strongly believe in producing and offering the best, in making all encounters with our customers a positive experience. We inspire our people in order for them to seek top performance.

When one works for a brand with such history he/she feels connected to the other colleagues under the umbrella of Daimler, part of a huge global family and we all together do our best so as offer “the best.”

Moreover, at Mercedes-Benz Hellas we believe in customer satisfaction and we offer it through satisfied employees. The main characteristic of Mercedes-Benz Hellas is that the majority of its personnel have been working for the company for at least a decade!

Both Daimler and the Greek subsidiary understand sustainability as responsible corporate behavior that leads to long-term business success and is in harmony with the environment and society. Therefore, we achieve our objectives by anchoring the concept of sustainability as a fixed component of our business activities and do our best to help children and the environment through a number of voluntary initiatives.

SEPTEMBER-OCTOBER 2014 | BUSINESS PARTNERS | 39

MOVING GREECE FORWARD

A NEW MODEL FOR GREECE

MICHAEL BLETSAS OF THE MIT MEDIA LAB MICHAEL BLETSAS, A GREEK FROM CRETE, IS DIRECTOR OF COMPUTING AT THE MIT MEDIA LAB. EVA ADOSOGLOU, A FULBRIGHT SCHOLAR FROM GREECE PURSUING HER MASTERS AT BOSTON UNIVERSITY, SPOKE WITH MICHAEL ON HOW TO MOVE GREECE FORWARD.

40 | BUSINESS PARTNERS | SEPTEMBER-OCTOBER 2014

which is changing radically. We have new tools that are much more accessible. The whole Marxist political economy analysis about the means of production doesn’t really apply anymore.

“The other thing that has to change in Greece—and this is not a Greek problem but a European problem—is the attitude that we have toward failure. Failure is part of the learning process. Only dead people don’t make mistakes. It is not just the idea that matters but trying again and again. You need to have an open mind. As Thomas Edison said, “Genius is 1% inspiration, 99% perspiration.” The younger you are the easier it is

Failure

like to take risks. We are in great need of this in the traditional sectors of our economy. We need to dramatically increase the quantity of services in tourism and to promote our elite agricultural products in ways we haven’t in the past. In the past we were very happy selling them in bulk and pocketing the subsidies—as opposed to creating value added. If we want to be among the countries with the highest standard of living in the world we cannot rely on products or services that have a small added value. We must move to sectors that have high added value, like high tech or services in high tech manufacturing,

Entrepreneurship

“

W

e must realize that the hole that we have dug ourselves into is very deep and it will take combined efforts from all sectors of the economy to get us out. No one category of economic activity will move us forward but startups are particularly important, not because of their absolute GDP contribution potential but because they show the young generation a new, healthy model that is antithetical to the one that brought us where we are right now.

“The startup mentality is applicable everywhere. You don’t have to be in Silicon Valley. Entrepreneurs are those people who

The Israeli Model

MICHAEL BLETSAS

society that are fighting to keep specific subsidies or cross subsidies or various types of advantages that they have over the rest of the people. Technology can have a very large effect there. It can expose these phenomena. We need transparency. For example, publishing all the expenses of the public sector so that people can see where their money is going. Technology & Transparency This is very important because then it allows control and oversight to be crowd sourced. Also, we have a state that is begging for money from its citizens yet when you try to pay money to the state they make you jump through hoops because they cannot accept money electronically. They don’t accept credit cards; you have to go to specific banks to pay for specific services. If I need to make a payment and I have a computer or cellphone connected to me I really shouldn’t have to go anywhere to pay. Therefore, adopting more electronic transactions and virtual money, as opposed to physical cash, can help a lot since it reduces the black economy, makes the work of tax authorities much easier, and greatly enhances the tax base. We have examples all around us. Other countries are way ahead of us in that regard; all we have to do is copy these successful examples. The only excuse that we have is that we “are a special case and those things don’t wok in Greece.” But of course they will.

Technology & Transparency

always have to look where the next threat comes from. That’s a good skill to have.

Second, they know how to work together.

Unlike ours, their military service teaches them a lot. If your life depends on the other person you learn how to work together. We don’t know how to work together.

Third, they have a big Diaspora in the U.S. that has been very successful and helps them a lot.

“I used to believe that change was going to come from inside Greece. However, it’s not going to happen only from the inside. You need social capital from abroad to go back in. Our Diaspora now is in its 2nd and 3rd generation, so they are moving out of blue collar jobs. They are becoming professionals, so we must engage them more, but for them to be engaged they have to be able to invest in a country that doesn’t have severe cultural and other costs. No one is going to invest in Greece if a civil dispute takes 10 years to be resolved. We have to realize that before fixing anything else we must fix justice. If we really need to give a boost to the economy we have to fix the justice system.

No one is going to invest in Greece if they have no protection.

“It is important to leverage technology for social change and institutional change, within the Greek environment, considering the main peculiarity that Greece has, which is that we have a lot of entrenched interests that we call guilds—narrow groups within

Diaspora

Business Development

to go through that cycle. As you grow older you may have other advantages, such as experience. However, startup, by definition, means that you fail a few times and that’s something that requires a young mind. An old mind doesn’t have that much tolerance for failure. It’s normal. We tend to gravitate towards security as we grow up.

“To encourage young entrepreneurship in Greece some measures need to be taken: • Bureaucracy must be scaled down dramatically.

• A corporate structure should be put in place that doesn’t require a payment to start up.

• A significant break in insurance contributions should be granted to young entrepreneurs for the first few years.

• Subsidies should be used.

“Overall, there has to be some organization that can be shared. What Greek startups need is not another incubator, they need someone to jump-start their commercial activity in the U.S and other foreign markets. Someone, for instance, who is U.S.-based so that they know the market. Something between a VC and a business accelerator. At this point in Greece there are at least as many incubators, startup facilitators, advisory organizations as there are startups. What I think we lack is marketing and business development skills in the large markets abroad. So we have people that developed good products but have no idea of how to go about selling them.

“Greek people who are in high tech should follow the Israeli model. Find their technical partners and do their R&D in Greece and then come and incorporate in the U.S. R&D in the U.S. is much more expensive.

Israel went through a very similar process as us but they managed to develop skills that are very important and, even though their country has zero resources, they learned how to deal with that environment. However, Israel has some advantages: First, their paranoia, because they have been under threat constantly.

Paranoia is good in business since you

SEPTEMBER-OCTOBER 2014 | BUSINESS PARTNERS | 41

FUTURETECH

CAN A ROBOT BE YOUR BOSS? MEET THE NEW BOSS. SHE NEVER PLAYS FAVORITES AND DOESN’T PARTAKE IN OFFICE GOSSIP. SHE GIVES CLEAR DIRECTIONS.

A

t performance review time she offers valuable observations and backs them up with examples. She is perfect. Well, almost. If she does tend to repeat herself and wouldn’t give you time off to attend your son’s violin recital, you’ll have to forgive her: She’s a robot.

Totally automated management may seem far-fetched, and, indeed, few see the day when the authority figure in the corner office is an automaton. But in recent years, a surprising array of managerial functions has been turned over to artificial intelligence. Computers are sorting resumes of job seekers for relevant experience and to estimate how long a potential employee is likely to stay. They are mapping email exchanges, phone calls and even impromptu

hallway interactions to track workflow and recommend changes. Widely used software is analyzing customer data for algorithms, which in turn is changing when and where workers are deployed.

When it comes to being the boss, robots are no substitute for humans

42 | BUSINESS PARTNERS | SEPTEMBER-OCTOBER 2014

MANAGEMENT?

Connect the dots, and the image of an objective, all-knowing and fully automated manager may spring to mind. But Wharton management professor Peter Cappelli says that when it comes to being the boss, robots are no substitute for humans. “It is possible for software to provide accounting information –i.e. ‘Here is how you are doing’–but management is still a much more complicated task of making adjustments to the work being performed in order to meet changing demands, diagnosing problems and offering solutions,” notes Cappelli, director of Wharton’s Center for Human Resources. “While it might be true that robots would be better than some managers, robots cannot yet perform these tasks well,” he adds.

Wharton management professor Matthew Bidwell says he, too, “struggles a bit” with the idea of the automated boss. “At the end of the day …it’s less about having an automated boss and more about taking away some of the mundane functions of the boss and leaving them with more of the judgment calls.”

But the pace and dissemination of sophisticated automation innovations has picked up, and anything that can be coded and tied to the bottom line is an opportunity

for model building, says Shawndra Hill, a Wharton professor of operations and information management. “That said, the problems [in which] answers are more subjective and harder to evaluate are historically the problems that people thought computers would not be best at,” she points out. “[But] if there is data you can link to outcomes, you can still build models—and people are doing that. More and more, companies are dealing with these subjective problems in ways we haven’t thought of before. Every year I am surprised by something that [is automated], and think, ‘Why didn’t someone think of this 20 years ago?’

We’ve reached the point where computers will drive cars. And my guess is that they will be safer than humans.”

AUTOMATED SCHEDULING, RUINED RELATIONSHIPS

One highly visible foray into automated management has upset workers and caused one company to take a public-relations beating. Starbucks employs a widely-used software program that examines sales patterns and other data to determine scheduling of its baristas. The practice was thrown into harsh light in a lengthy New York Times feature that documented the consequences of an algorithm-dictated schedule on flesh-and-blood workers. Such computer programs do not take into account how unpredictable hours may or may not mesh with the needs of workers who must

account for child care and other domestic obligations. Starbucks said it gives baristas a week’s notice of their hours, but the Times found few instances of that happening.

Bidwell says, in effect, computers don’t hurt people—people with computers hurt people. “That’s the problem with algorithms and scientific management. The challenge with scientific management was that you had some terribly smart engineer sitting up in an office somewhere dreaming up clever ways to get things done without taking into account the way things were working on the shop floor,” he notes. “It’s kind of the same here. To take a cynical interpretation, you have employers … pushing flexible scheduling back onto employees, or, in a more charitable interpretation, a bunch of consultants in the head office trying to make systems more efficient, and they are detached from the context in which they are going to operate.”

Either way, there are other inefficiencies elsewhere that haven’t been factored in, Bidwell says. “While you may gain some efficiency, you lose some trust in the [employer-employee] relationship, and the result is the employee isn’t willing to go the extra mile, and isn’t going to stick around as well.”

According to Hill, although the technological ability to make automated decisions has grown, consideration of the implications of such practices is not keeping pace. “The Starbucks example is a perfect one,” says Hill. “I imagine the objective was the opti-

mal scheduling system, but they didn’t pay attention to constraints important for their employees, and it became newsworthy.

What’s critical is that there is still a human in the loop to make sure proper constraints are being considered that do not discriminate in ways that are not in line with the law or do not make employees miserable.”

THE PERSUASIVE ROBOT

And yet, automated functions and algorithm-driven decisions are becoming engrained in the workplace. In nearly all categories relating to HR from recruitment to performance management, companies participating in the CedarCrestone 2013-2014 HR Systems Survey said they were substantially increasing technology enablement of HR processes. Job loss is a concern: A 2013 Oxford University study examined 702 occupations and estimated that job automation threatens 47% of the U.S. workforce.

Loan officers, for one, may want to spruce up their resumes. The job category topped the list, with a 98% probability of being taken over by computers. Also vulnerable: information clerks and receptionists; paralegals and legal assistants; even fast-food cooks and bartenders.

Source: http://knowledge.wharton.upenn.edu/ To read the entire article, visit http://knowledge. wharton.upenn.edu/article/can-robot-boss/

SEPTEMBER-OCTOBER 2014 | BUSINESS PARTNERS | 43

accelerating progress of technology and changes in the mode of human life, which gives the appearance of approaching some essential singularity in the history of the race beyond which human affairs, as we know them, could not continue”. The term was popularized by science fiction writer Vernor Vinge, who argues that artificial intelligence, human biological enhancement, or brain-computer interfaces could be possible causes of the singularity. Fu-

AM

The technological singularity, or simply the singularity, is a hypothetical moment in time when artificial intelligence, human biological enhancement, or brain-computer interfaces will have progressed to the point of a greater-than-human intelligence, radically changing civilization, and perhaps human nature. Because the capabilities of such an intelligence may be difficult for a human to comprehend, the technological singularity is often seen as an occurrence (akin to agravitational singularity) beyond which the future course of human history is unpredictable or even unfathomable.

The first use of the term “singularity” in this context was by mathematician John von Neumann. In 1958, regarding a summary of a conversation with von Neumann, Stanislaw Ulam described “ever

CH AM

The Technological Singularity

@ FO IN

B2B

turist, and inventor of the portable reading machine for the blind, Ray Kurzweil cited von Neumann’s use of the term in a foreword to von Neumann’s classic The Computer and the Brain.

Proponents of the singularity typically postulate an “intelligence explosion”, where superintelligences design successive generations of increasingly powerful minds, that might occur very quickly and might not stop until the agent’s cognitive abilities greatly surpass that of any human.

Kurzweil predicts the singularity to occur around 2045 whereas Vinge predicts some time before 2030. At the 2012 Singularity Summit, Stuart Armstrong did a study of artificial general intelligence (AGI) predictions by experts and found a wide range of predicted dates, with a median value of 2040.

Dining: For Business and Pleasure

I Must Go Down to the Sea Again VAROULKO Lefteris Lazarou, chef and proprietor of Varoulko, one of Athens most noted restaurants that has garnered a Michelin star, has relocated to Microlimano in Piraeus, a natural locale considering Varoulko’s pointed emphasis on seafood.

Always known for using the freshest and finest ingredients (with prices that reflect such a resolve), Varoulko remains a destination for out-of-the ordinary dining.

Lunch tends to favor a more classical repertoire of Greek items; dinner is where the innovative gastronomic talents of the kitchen are brought to the fore. To wit: quinoa salad with grilled shrimp, marjoram, lime zest, scallions, tomato and fish chunks. A veloute soup of Prespes beans

is topped with Mesologgi botargo (avgotaracho).

Grilled cuttlefish with caramelized lentils and orange sauce and moussaka with minced crayfish are included among the starters. A pasta offering is squid cous cous with amaretto sauce. Mains focus on

44 | BUSINESS PARTNERS | SEPTEMBER-OCTOBER 2014

a variety of filets with the choice of accompaniments: cuttlefish ink sauce, zucchini cream and horseradish, celeriac sauce and rock fish broth, or plain—with greens.

Desserts and the wine list are created with care, reflecting the main actor—the seafood.

Presentation follows current practices of a photo-shoot aesthetic, designed to seduce the eye preparatory to the palate.

Hours are daily, lunch 12:00-17:00 and 19:00-01:00.

Varoulko Akti Koumoundourou 52 Mikrolimano, Piraeus Phone: (+30) 210 5228400 http://varoulko.gr/

The Business Bookshelf

Flash Boys

Jargonaut

A WALL STREET REVOLT

BY MICHAEL LEWIS, W.W. NORTON

BROADCAST STORM Another name for a network meltdown, it

Four years after his #1 bestseller The Big Short, Michael Lewis returns to Wall Street to report on a high-tech predator stalking the equity markets.

Flash Boys is about a small group of Wall Street guys who figure out that the U.S. stock market has been rigged for the benefit of insiders and that, post–financial crisis, the markets have become not more free but less, and more controlled by the big Wall Street banks. Working at different firms, they come to this realization separately; but after they discover one another, the flash boys band together and set out to reform the financial markets. This they do by creating an exchange in which high-frequency trading—source of the most intractable problems—will have no advantage whatsoever.

The characters in Flash Boys are fabulous, each completely different from what you think of when you think “Wall Street guy.” Several have walked away from jobs in the financial sector that paid them millions of dollars a year. From their new vantage point they investigate the big banks, the world’s stock exchanges, and high-frequency trading firms as they have never been investigated, and expose the many strange new ways that Wall Street generates profits.

The light that Lewis shines into the darkest corners of the financial world may not be good for your blood pressure, because if you have any contact with the market, even a retirement account, this story is happening to you. But in the end, Flash Boys is an uplifting read.

actually precedes a network meltdown.

NEPOTISM Literally, it means favoritism shown to relatives, but in the industry, it is the idea of tapping into people’s personal networks.

MX RECORD A technology that will redirect e-mail sent to any user’s machine to a designated mail host.

MEDIA FUSION The melding of technology and media.

SMART SOCK A baby jumpsuit that can monitor an infant’s heart rate, oxygen levels, temperature, and sleeping habits and sync its data with a mobile app.

BODY NAZIS

THE LIST

BY TRAVELOGUE

Hard-core exercise and weight-lifting fanatics who look down on anyone who doesn’t

MUSEUMS—SMALL GEMS

work out obsessively.

BY ANDREAS STYLIANOPOULOS PRESIDENT, NAVIGATOR TRAVEL & TOURIST SERVICES LTD

Don’t forget to visit museums often overshadowed by the national giants—a rewarding experience we often fail to remember.

Cycladic Art Museum, Athens, www.cycladic.gr NOESIS

Numismatic Museum, Athens, www.nma.gr

ply to “good quality content.”

WEBM The WebM Project is dedicated to developing a high-quality, open video format for the

National Historical Museum

Web that’s freely available to everyone.

Zoological Museum, http://old.biol.uoa.gr/zoolmuseum/ Jewish Museum, Thessaloniki, www.jmth.gr Thessaloniki Science Center and Technology Museum (NOESIS), www.noesis.edu.gr Museum of Photography, Thessaloniki,www.thmphoto.gr MUSEUM OF PHOTOGRAPHY

Refers to a content-heavy interface, or sim-

Benaki Museum, www.benaki.gr

Athens War Museum, Athens, www.warmuseum.gr CYCLADIC ART MUSEUM

RICH

ON VELVET Slang for “sitting pretty.” Things are going very well: “Erin told me she finally got a Web sponsor, she was on velvet.”  http://www.netlingo.com

Cinema Museum of Thessaloniki, www.cinemuseum.gr

SEPTEMBER-OCTOBER 2014 | BUSINESS PARTNERS | 45

TRENDS & TRADE MAKERS

Silicon Crete “Crete has enormous potential through its research and scientific institutions. The island can become a new Silicon Valley”, said Steve Vranakis, director of Google’s Creative Lab, who attended a meeting of the Academic and Research Institutions, organized by the World Council of Cretans and the Region of Crete at the Foundation for Research and Technology-Hellas (FORTH).

The main objective set by the Region of Crete and the island’s scientific-research institutes for the period 2014-2020 is the combination of research, innovation, real economy and entrepreneurship.

The governor of Crete referred to the funds of the new programming period of 20142020 in regards to research, technology and innovation. “We can find additional resources and competitive programs, and through the cooperation of all institutions we are expecting to see better results for young people. The region of Crete will invest in knowledge, innovation and technology.”

New Bureau Aims To Boost Congress Tourism in Thessaloniki Thessaloniki has all the requirements and infrastructure to successfully host international conferences, according to the Greek northern city’s recently established convention bureau.

“The Thessaloniki Convention Bureau (TCB) will provide the necessary dynamics and strategy designed in accordance with international conference market trends to establish the city as a convention destination,” the bureau’s president, Despina Amarantidou, said while presenting the new venture to the city’s entrepreneurs and tourism professionals.

The entrepreneurs that launched the bureau are based in Thessaloniki and directly involved in congress tourism. In most cases, the existence of a convention bureau is a prerequisite when a destination is to be selected to host a conference.

GREEN BOAT PROJECT

Tourism Gets Seriously Silent Greece acquired its first two solar boats that will be used for leisure trips in the protected areas of Small and Big Prespes lakes on Greece’s border with Albania. The purchase is in the framework of the Green Boat transnational project.

It is estimated that the solar boats can contribute to the development of tourism in the region as an alternative tourist destination.

The Green Boat project is part in the Greece-Albania 2007-2013 program, aimed at promoting the cultural and natural heritage of the Prespes Lakes through solar boats trips. The project was presented at the First European Territorial Cooperation Conference: Promoting Best Practices—Sharing Experiences held in May in Thessaloniki under the Greek Presidency of the EU Council.

The Prespes Lakes contain the highest degree of species biodiversity in a surface area of its size in Europe. It is a lake landscape of outstanding natural beauty that also includes a wealth of monuments from the Byzantine and post-Byzantine period.

MARITIME SURVEILLANCE:

Joining Forces with Member States for Safer Seas The European Commission took a further step toward more effective and cost-efficient surveillance of European Seas. By bringing together surveillance data from civil and military authorities such as coast guards, navies, traffic monitoring, environmental and pollution monitoring, fisheries and border control, duplication of work can be avoided and savings of up to €400 million per year can be made. Increased cooperation and sharing of data would help cope more efficiently with real time events at sea such as accidents, pollution incidents, crime or security threats. CISE, the Common Information Sharing Environment for the maritime domain, aims at making all the relevant actors come together and share data. CISE is one of the building blocks of the recently adopted European Maritime Security Strategy.

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.

W

W

W WEBSITES FOR YOUR HEALTH

Aetna Intelihealth http://www.intelihealth.com/ Aetna InteliHealth, partners with Harvard Medical School and Columbia University College of Dental Medicine to provide health information on this website.

Centers for Disease Control and Prevention http://www.cdc.gov The CDC, a part of the U.S. Department of Health and Human Services, deals with preventing and controlling disease, injury and disability.

5-STAR INCREASE According to a survey by the Research Institute for Tourism of the Hellenic Chamber of Hotels, the number of five-star hotel rooms in Greece has increased by 31.4% from 2009 to 2013.

The survey shows an overall increase in Greece’s luxury accommodation capacity.

Hotels and rooms are constantly being upgraded, with four-star hotel rooms increasing by 4.2%, and three-star hotel rooms increasing by 6.5%. The number of rooms in two and one-star hotel rooms has declined by 1.5% and 2.8%.

In 2013, there were 9,677 legally operating hotels in Greece with 401,332 hotel rooms and 773,445 beds. One in seven of these rooms (57,878 rooms in 361 units with 117,555 beds) were at five-star hotels. However, two-star hotels are still dominant with 4,203 units, 119,157 rooms and 223,932 beds.

Furthermore, according to the survey, the percentage of hotels that remain open throughout the year also show a slight increase reaching 46.4% in 2013, compared to 44% in 2009. Mostly three-star hotels operate all year-round, with a remarkable 55%, just four points ahead of four-star hotels on 51%.

The Cleveland Clinic Health Information Center http://my.clevelandclinic.org/health/default. aspx Produced by the Cleveland Clinic to benefit patients, the general public, and healthcare professionals, this site offers nearly 5,000 articles, videos, podcasts and tools for managing your health.

Familydoctor.org http://familydoctor.org/familydoctor/en.html The content on FamilyDoctor.org is intended for all individuals who are seeking reliable health information and is written at a 6th to 8th grade reading level.

Hardin M.D. http://hardinmd.lib.uiowa.edu/ This subject directory of health website links has a special focus on medical pictures. healthfinder http://www.healthfinder.gov/ Managed by the U.S. Department of Health and Human Services, healthfinder.gov provides information from 1,400 organizations.

THE EUROPEAN COMMISSION HAS ANNOUNCED .U. E DETAILS OF A NEW €100M FAST TRACK TO EC T DIR INNOVATION (FTI) PILOT ACTION AND FIVE INNOVATION PRIZES UNDER HORIZON 2020.

The FTI aims to support Europe’s economy by offering innovative businesses and organisations grants to give a final push to get great ideas to market and the prizes offer a reward for technological breakthroughs of high societal relevance. The Commission says the initiatives will underscore the drive to support innovation in Europe as part of the first, two-year Horizon 2020 work program.

The FTI scheme will be open to applications from January 2015 and will support small consortia of three to five organizations with strong business participation to give promising ideas the last push before entering the market. It is open to ideas in any area of technology or application and to any legal entity established in the EU or in a country associated to Horizon 2020.

Mayo Clinic http://www.mayoclinic.com/ MayoClinic.com offers a wealth of easy-to-understand health and medical information.

MedlinePlus http://www.medlineplus.gov The National Library of Medicine, a part of the National Institutes of Health, created and maintains MedlinePlus to assist consumers in locating authoritative health information.

SEPTEMBER-OCTOBER 2014 | BUSINESS PARTNERS | 47

VIEWPOINT

BY CHRISTOS PAPOUTSY PUBLISHER OF WWW.HELLENICCOMSERVE.COM, PHILANTHROPIST, WRITER, AND VENTURE CAPITALIST BASED IN THE UNITED STATES

INSURED REPURCHASE AGREEMENTS—

Most small and large partnerships establish buy-and-sell agreements funded with life insurance, called insured repurchase agreements.

Protecting Partnerships

T

hey are of particular importance in eliminating or minimizing disruption in the partnership’s business in the event of the death of one partner. Through the instrument of the agreement, businesses buy back shares of the business from the heirs of the deceased partner; the funds to accomplish this come from the insurance policy covering the life of the late partner.

Why are such re-purchase agreements needed? They provide for the security and stability of the business by outlining a buyback procedure in the event that any partner passes away. Insurance policies create instant liquidity with which to buy back company stock from heirs. It’s a win-win situation in most cases, with the business continuing solidly and the heirs receiving a fair benefit. The procedure is commonplace and provides for minimal business disruption.

What happens without a formal repurchase agreement? The company usually lacks liquidity to buy back stock from the heirs of a deceased partner. Without such an agree-

ment, the heirs of the deceased partner take over their ownership position. The heirs may not have the experience to assume leadership, creating significant potentials for conflict. Without this type of agreement, there is no pre-established mechanism for valuation and buy-out of an ownership position. The remaining partner or partners may be “stuck” with others in trying to move forward, to the detriment of the business.

How does the re-purchase agreement work?

Partners draw up legal agreements for stock repurchase in the event of a death, financed by life insurance policies, with the business as beneficiary of the policies. The resulting benefit furnishes the liquidity necessary to buy back shares from heirs. Part of the re-purchase agreement establishes a means for periodically valuing the business. Premiums for these policies are paid by the business. Rates are based on gender, age, health, and duration of policy period.

Typically the partnership would develop a close working relationship with a certified, local, well-respected life insurance profession-

al to set up the Insured Stock Re-purchase Agreement. The attorney of the business plays a key role in drawing up the agreement and works closely with the professional insurance representative and the partners to schedule at least one meeting annually to establish valuation of the company. Minutes or tapings of the meetings properly record the valuation of the company, with appropriate increases in the amounts of life insurance to cover the buy-back stock plan as the business valuation also rises. Valuation may depend on sales, increase or decrease of net worth, or new products, among other factors.

This sort of agreement is a necessity in today’s environment of complex relationships and agreements. Any partnership consists, in reality, of more than the legal partners: there are wives, husbands, children, grandchildren, grandparents, in-laws, and other relatives who often complicate partnerships with divorces, illnesses and deaths. This type of business agreement ensures smooth transitions and stability for businesses and the heirs of partnerships.

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