By George Atsalakis,
Assistant Professor – Economist School of Polytechnics of Crete
Data Analysis Laboratory and Prediction
2,500 years ago, Heraclitus had said the famous phrase «everything flows». The only certain thing for centuries is that everything is changing. The turning point is the new technologies created by innovations. In every developed country, governments see innovation as a source of stable and sustainable growth and also the main factor of productivity and GDP growth. The more innovative an economy, the more it adapts to developments.
However, history shows that innovative developments often cause strong economic and political resistance. The political establishment of the Russian Empire in the 18th century struggled to stop the industrial revolution because it was perceived as a threat to its political power. In the Islamic lands, the religious leaders of the 15th century banned typography under the guise of blasphemy and that is why the Islamic world began to fall behind in economic development in relation to the West. Even today, there are countries where access to the Internet is limited, such as Venezuela, Cuba, Turkey because their governments want to ensure political stability and defend their authority.
As far as Greece is concerned, one of the causes that led us to the economic crisis is the inability to adapt to new technologies, mainly in the public and private sectors. That’s why this is the only way for our country to fight for the development and implementation of innovation in order not only to fill this gap but also to give a significant boost to the growth of the economy. The benefits of implementing innovative technological methods in public administration, in the economy and in other sectors are numerous.
Nevertheless, specific social or professional groups are not always willing to support and react to them.
The reasons why there is resistance to innovation will be discussed below.
Fear of job cuts
A workers’ major fear, who are mostly unskilled, is that technological change can break down their jobs. Therefore, labor unions oppose to any innovatory change as they consider that not only new jobs will not be created to register new members, but also that redundancies will follow so their members and thus their power, will be reduced. Employees know that it is very difficult to stop a technological breakthrough that has been planned for their sector, however, they can delay it.
Thus, in the Greek public sector, it has been observed the phenomenon of workers who invent bureaucratic obstacles to prevent the installation and use of computers, or deliberately not use computers or other applications so as to delay the implementation of any technological reform. A characteristic example is the reform of e-government in our country, where digital certificates, digital signatures, e-documents between public services and the like, is proceeding very slowly.
Negative effects
New technologies are being criticized by groups with different economic interests due to the negative effects they may have.
Nuclear energy, genetically modified foods, wind farms and even large department stores, as well as many other innovative practices, cause fear to society because of the negative effects they can cause.
This is where the state’s duty lies, so as to choose which practices to stop and which to allow to be implemented. For years, our country had to turn to the production of energy from renewable energy sources.
Many groups in the name of environmental degradation block the installation of wind turbines and photovoltaic systems, but they do not react at all to the operation of the PPC plants, which emit thousands of tons of polluting gases from the burning of coal and oil.
Uncertainty
Every innovation creates uncertainty and market reclassifications regarding who is going to gain more from its implementation. Uncertainty exists when the state does not legislate operating rules in time and the benefits of users are not explained. Especially when uncertainty grows for a large professional team, then it exerts the strongest political pressures to block the development of this innovation. Nowadays, a typical example is the application of the «sharing economy»; namely, the best-known being the application of the short-term lease of real estate by individuals and professionals of Airbnb, Homeaway, etc.
In the transport sector there is Uber, Beat, etc. Airbnb is already booming in our country since it is still a customer way to approach accommodation by facilitating access to the vast global market. In fact. it works as an on line broker between two clients so as to reach a mutual agreement by receiving a fee from both parts It threatens on line travel agencies such as booking.com, Expideia etc. In Greece, many accommodations are still illegally hired through various platforms (one of which is Airbnb) since the state has not set up the proper site provided by the law, where each accommodation will be registered and certified and each booking will be recorded. As a result, unfair competition is created due to concealment of incomes and a more favorable tax treatment than legally registered businesses that rent their accommodation and, thus, pay excessive taxes and insurance contributions is established.
Indeed, this unfair competition creates reactions from the affected professionals.
The state obstructs and does not implement the relevant legislation resulting in the lack of houses for long-term lease due to the uncontrollable rental, which therefore, causes further reaction.
Conclusions
After analyzing the reasons that cause the reaction to everything innovative, we conclude that behind each reaction there are small or large organized groups whose interests are affected. These groups are known as ‘interest groups’ and their aim is to promote the common interests of their members.
It is a broad term, which includes business groups, cartels, suppliers and public contractors, trade unions and professional associations. The action of these groups in our country, which are pushing «willing governments» to discourage new technologies against vote trade, is mainly responsible for the significant delay in the implementation of innovative tools, reforms and the lack of competitiveness, having a significant share of responsibility to the economic crisis we are experiencing to this day.
Source of publication 27th edition In-On