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Micro-Multionationals—A Growth Engine for Greece

26 Sep 2013

WRITTEN BY Axarloglou Kostas
Dean
Professor Of International Business and Strategy

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Growth Engine.jpg
The deep and prolonged economic recession in Greece reflects the collapse of the inward-looking growth model of the country based on internal consumption (public and private).
 

This model fueled the development of introvert sectors such as retailing and construction. As the revival of internal demand will be non-existent for the next decade or so, the Greek economy urgently needs to develop a new growth model based on a new breed of businesses that target the world market from the very first day of their establishment: the Micro-multinational enterprise as Hal Varian, Google’s Chief Economist, defined it in 2011.1

The Micro-multinational: Outward Looking, Flexibility and Adaptability

The Micro-multinational achieves robust growth by capitalizing on the rapid developments of technology, the Internet, and the large communities of people associated with them.

Specifically, the Micro-multinational:

  • Through the Internet penetrates the global marketplace and becomes multinational from day one. It capitalizes on e-commerce platforms (such as Amazon, Apple App Store, ebay) and quickly extends its reach to large masses of potential customers.
  • Draws funding from the international community though cooperative funding platforms such as Techstars or Vencorps
  • Does not need to develop costly and inflexible structures to support its operation and thus maintains operational flexibility. For instance, it employees on-demand, low cost computing and telecommunication services through cloud computing and Skype.
  • Draws talent (on a project basis) from the international community of freelancers through platforms such as Elance and oDesk
  • Enhances its capabilities on innovation by participating in online platforms that promote organizational innovation, such as InnoCentive, Ninesigma or Yet2.com.

Focusing on the world marketplace and capitalizing on new technologies and the Internet, the Micro-multinational can achieve robust growth quickly by developing key competencies such as organizational flexibility, immediate recognition of market trends, innovation (organizational agility), and creativity.

Greece-based Micro-multinationals

Believe it or not, there are many examples of Micro-multinationals in Greece. Taxibeat (taxibeat.com), established in Athens in 2011, has developed an application for smart phones that helps users to directly select a taxi in a metropolitan area. The application, which capitalizes on the high penetration of smart phones and easy access to the Internet, offers an attractive service to smart phone users in a number of cities worldwide.

Total Eclipse (www.totaleclipsegames.com), another Micro-multinational, founded in Thessaloniki in 2004, develops electronic games for individuals or groups (“casual games”), that can be played online or on PCs, tablets or smart phones. Total Eclipse offers its products through international distribution channels (e.g. App Store), immediately approaching existing large clienteles composed of online users or devices.

Micro-multinationals and the Greek Economy

Naturally, skeptics might claim that it is utopian to expect to boost an ailing economy, such as Greece’s, through Micro-multinationals. However, the Micro-multinational employs a business model that is consistent and compatible with the only viable venue of economic growth for Greece: immediately reaching out to the world economy. The Micro-multinational is outward looking and flexible, can directly penetrate the world market without a large initial investment, can potentially achieve rapid growth by penetrating existing clienteles and it draws specialized human capital from around the world through large pools of talented freelancers. The Micro-multinational does not need to build everything from scratch. However, it must find a way to capitalize on existing technologies and the world economy through the Internet.

As a business model, the Micro-multinational is very promising for the Greek economy. Entrepreneurial spirit and managerial innovation is required and the country should move towards those directions fast!

 

 

 

 

1 Hal Varian: “Micromultinationals will Run the World,” Foreign Policy, Sept / Oct., 2011.