Digital technologies are transforming our societies by fundamentally altering the way we work, live, interact, produce, and consume. Although technology was always a force of change, it is the speed, scope, and combinatorial effect of the emerging digital technologies that enables this exponential digital transformation and sets Industry 4.0 apart, as a new, distinct era. The transition was accelerated even more by the COVID-19 pandemic and the fast-track digitalization process throughout economies and societies alike.

During this digital revolution, a new group of businesses, the Digital Multinational Enterprises (Digital MNEs) has emerged. Digital MNEs disrupt traditional patterns of production, job creation and asset structure, are primarily driven by innovation, and place digital technologies at the epicenter of their business and operating models. Digital MNEs also reshuffle international production patterns and have led to the emergence of a new type of foreign investments, the "Digital & Innovation FDI". Experience suggests that in addition to the manifested direct benefits from this type of investments in a host economy, there are also incipient ones, best described as "spillover benefits". FDI in digital and innovation is a powerful mechanism of cross-border technology and knowledge transfer that can enable host countries to boost their digital adoption, increase their productivity, boost local innovation, and integrate in global value chains.

In the digital era, a pressing question arises: Where should countries focus on for attracting investments in innovation and is there a "secret sauce" for creating a digital-friendly investment environment? Accenture research, and international sources, indicate that the location of this type of investments is driven by six interconnected sets of interventions in host economies. These six FDI "engines", are powered by three different "fuel tanks" as described below:

In recent years, Greece has made notable progress.. Major national structural and digital developments combined with a strong commitment by the Public Administration are beginning to show results.

The abovementioned "engines" and "fuel tanks" significantly influence Digital MNEs’ decisions when selecting target countries. Other influencing factors include the parent company’s internationalization and investment strategies, as well as the local subsidiaries’ potential and internal capabilities to quickly respond to opportunities and bidding processes. Decoding Greece’s recent investment resurgence is crucial to identify the relevant lessons learnt and further accelerate Digital MNEs’ investment interest for the country.

Due to the sensitivity of the required information, a "case study methodology" was applied through a set of interviews with the CEOs of nine Digital MNEs with a presence in Greece. The interviews confirmed the hypothesis that digital MNEs that have already successfully invested in Greece, did not follow a "one-size-fits-all" investment strategy. Each digital MNE leveraged its corporate strategy, market focus, competitive advantage, and unique selling points, to identify the "what", "where" and "when" of their investment decisions. However, evidence also indicates that a set of common factors act as the "keys to unlock" investments in digital and innovation in Greece.

"Keys to unlock" this type of investments in Greece and positively influence end-to-end investors’ location decisions include:

Greek leaders of Digital MNEs provide information, mentoring and guidance to the Greek subsidiaries during the internal bidding process.

Success in Digital MNEs’ bidding process for location selection was driven both by the upward influence of the Greek subsidiary’s leadership and by the local teams’ commitment to go the extra mile.

Greek subsidiaries have to act swiftly, achieve much and scale fast to overcome other internal contenders.

To counterbalance Greece's limited market size and scalability issues, Greek subsidiaries have to leverage the country's soft assets (i.e., Greece’s geographic location, significant cultural heritage, Greek talent ingenuity, quality of life and time zone to improve the country's attractiveness)

To facilitate foreign investments in digital and innovation, ensure continuity, and positively influence Digital MNEs' decision to invest in the country.

Setting the investment under the radar of the Greek government.

Designated senior representatives of the public administration, who helped investors navigate the Greek bureaucracy.

Foreign investments in innovation and digital help economic growth and are a powerful mechanism for increasing national competitiveness and international technology transfer. Greece has already performed significant efforts to overhaul its economy and transform it into an attractive FDI destination. This is demonstrated by several flagship investments in the country over recent years, all focused on digital and innovation.

Nevertheless, our analysis suggests that there is still significant room for improvement. Digital MNEs' invigorated investment appetite around the world, suggesting that Greece shall not decrease the speed of its reforms. Instead, fast, "surgical interventions" are required to improve the investors' overall experience. To achieve these, Greek stakeholders must act in tandem, under the guidance and coordination of policymakers, to implement a structured FDI action plan, executed against 22 distinct initiatives, which cover the following themes:

Targeted inward investment promotion initiatives, in addition to the horizontal ones, could further enhance the country’s international, investment visibility. The Diaspora Direct Investment Program can strengthen the Greek diaspora network and leverage its power to attract investments in innovation to Greece, while a specific Digital & Innovation FDI campaign and the enhanced participation in relevant international events and roadshows, will signal Greece’s intent as a Digital & Innovation FDI location.

Greek "deal playmakers" with direct access to the higher echelons of Government and Public Administration program managers that circumvent bureaucracy, act as catalysts for implementing investments in innovation. Enhancing investment-related capabilities across all levels of the Government to facilitate and improve the investors’ experience across their investment journey, is of paramount importance for the attraction of additional investments in digital and innovation. In this direction, the introduction of a Digital & Innovation FDI investment council, comprised of policy makers, business leaders, venture capitalists, and academics can tap expertise and attract additional Digital MNEs to invest in Greece. In addition, the Greek "deal playmakers" can be further empowered through the setup of a dedicated, cross-governmental FDI "SWAT" team. Finally, the establishment of an Investor Management Mechanism and the active engagement of Greek diplomats can further boost investments.

Building upon the already implemented reforms and tax incentives, targeted mechanisms to enhance the attractiveness of the Greek ICT sector, and the Greek innovation ecosystem, can also be introduced. These can include improving the existing strategic investment law with targeted incentive schemes for Digital MNEs, the introduction of full personal income tax breaks (or a decreased flat tax rate) for individuals working in the ICT industry, access to industrial/commercial real estate to Digital MNEs at preferential rates and the design of public procurement frame contracts for digital services across areas of major interest for the country.

Although Greece has a high number of higher education graduates, and decent participation in STEM education, there is a persistent low adoption of digital capabilities and skills. Action is needed to rectify this and unlock the human capital. Initiatives such as tailored apprenticeship programs for STEM graduates in Digital MNEs and the Greek ICT industry and targeted training programs (e.g., for the recently unemployed) in key digital technologies can be the first "Quick Wins" before the long-term, structural changes of Greece’s education system bear fruit.

Cooperation between Greek R&D and industry remains limited, and the onus is on building robust bridges between all innovation stakeholders, to instigate the emergence of digital ecosystems. Proposals include: the setup of “free zones” with special regulations that will act as "sandboxes" for testing emerging digital technologies and applications, the introduction of collaboration and matchmaking programs to encourage spillovers from foreign investments in digital and innovation (i.e., the "Adopt a startup" and the "Idea Agora" pitch programs), and initiatives like the mid-level Management Secondments from Digital MNEs to Greek businesses.

Targeted interventions are necessary, but it’s their combinatorial effect that will ensure the radical transformation of investors' journeys.

In addition to the various recommendations, a visionary afterthought is introduced. What can Greece do to leverage its innate characteristics and transform from a digital laggard to an innovation hub with a global reach?

Three "game-changing" areas have been identified:

Building on the cases of Astypalea, Tilos and Chalki that aim to "go green" via the hosting of emerging innovation ecosystems, different regions in Greece can become home to different ecosystems, each focused on "green" and “sustainable” solutions within different industrial sectors of strategic importance for Greece (i.e., agri-food, tourism, shipping, metals, energy, etc.).

Set up Greece’s first digital health campus to bring together Digital MNEs and health experts from the public and private sectors, and related industries. The campus will help reimagine healthcare, through high-level research and the design and development of new innovative healthcare products and services. The improved exploitation and interconnection of health data lies at the heart of the endeavor.

The Defense Intelligence & Cybersecurity Innovation Investment Fund will invest in businesses conducting research and/or developing innovative, digital defense and security services and products, through leveraging dual use technologies, i.e., Robotics, Artificial Intelligence, Additive Manufacturing, Gallium Nitride, Cybersecurity, etc. The State could become the fund’s core investor, instrumentalizing the strategic rebates from Greece’s arms programs.