ICT Investments on Economic Sectors With International Comparative Advantage and the Diffusion of Prosperity

Background: Economic Crisis In Greece (2009-2017)

Before analyzing the main topic of this article, it is fundamental to briefly mention the background of Greece in terms of the economic crisis. Greece has been chosen as a unique example of a western world country that has been suffered an economic crisis of such magnitude. Economic crisis triggers negative social phenomena across all levels of economic function. Indicatively, the country under crisis suffers reduced GDP (Gross Domestic Product - the total amount of values produced in economy in a year) that is usually translated into potential personnel reductions (or in the best case there are no new hirings), decreased salaries and pensions and reduced budget of public investments (new roads, hospitals, schools, etc.), amongst others. Accordingly, in the private sector, firms face reduced demand for their products, difficulties in borrowing money from banks, increased tax payments and other negative facts that lead them to reduce personnel, reduce their program of investments and holding money because of the uncertainty prevailing in economy.

The figures that follow clearly depict the impact of the crisis on the fundamental economic figures of Greece. These figures indicate the economic tunnel that Greece has been through for almost a decade with major implications in society and in economy.

Figure 1 shows the Greek GDP over the last 40 years. The Greek economy, achieved a historical economic progress from 1974 onwards, which violently halted in 2009 signaling the collapse of the economic process. Greece, from 2009 until 2016, lost almost 25% of its income.

Figure 1.

The evolution of the Greek Greek GDP over the last 40. Source: World Bank, Gross Domestic Product for Greece [MKTGDPGRA646NWDB], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/MKTGDPGRA646NWDB, June 13, 2019.

Figure 2 shows the same negative situation in terms of income per capita, indicating the worsening of the life-conditions for the Greek citizens.

Figure 2.

Evolution of GDP per Capita for Greece. Source: World Bank, Gross Domestic Product Per Capita for Greece [PCAGDPGRA646NWDB], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/PCAGDPGRA646NWDB, June 13, 2019.