Economic Profile: Municipality of Heraklion Economic Profile: Municipality of Heraklion May 2024 Funded by the European Union a Economic Profile: Municipality of Heraklion Disclaimer This document was produced under the project “Greece Sustainable Cities and Regions through Integrated Territorial Investments Technical Facility” over the period 2022-2024. This project is carried out with funding by the European Commission’s Directorate- General for Regional and Urban Policy (DG REGIO). The views expressed in this document cannot in any event be considered to reflect the official opinion of the European Union. This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the govern- ments they represent. The World Bank does not guarantee the accuracy of the data included in this work. 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Since the World Bank encourages the dissemination of its knowledge, this document may be reproduced, in whole or in part, for non-commercial purposes, as long as full reference is made to that document. b Economic Profile: Municipality of Heraklion Table of Contents List of Figures, Tables and Boxes...................................................................ii Quick Facts on Region and Municipal Area................................................1 Demographics..................................................................................................3 Human capital/Labor market........................................................................ 3 Educational attainment of workforce.............................................. 4 Labor force and employment............................................................. 5 Unemployment....................................................................................... 5 Structural Composition of the Economy.....................................................8 MSMEs ................................................................................................................... 8 Sectoral analysis ................................................................................................ 9 Economic performance......................................................................12 Private sector investments................................................................15 Research and Innovation ........................................................................... 16 Key research institutions and start-up companies..............................16 Research commercialization.............................................................17 Business and Economic Support Infrastructure....................................... 19 Land & iInfrastructure.....................................................................................20 Construction activity.......................................................................................22 Industrial land, office space, real estate development.......................23 Investment incentives and opportunities...............................................25 Municipal investment priorities..................................................................25 Development Opportunities...................................................................... 27 Tourism ...............................................................................................................27 ICT..........................................................................................................................28 Biotechnology...................................................................................................29 Key Take-aways............................................................................................. 30 Contact Information.................................................................................... 31 i Economic Profile: Municipality of Heraklion List of Figures, Tables and Boxes List of Figures Figure 1: Total population by age and sex (2011)............................................................................................................................................... 3 Figure 2: Potential labor catchment area of Heraklion (~60km radius)...................................................................................................... 4 Figure 3: Education level of active labor force (2011)....................................................................................................................................... 5 Figure 4: Labor force participation rate by sex and age group (%).............................................................................................................. 6 Figure 5: Employment by age and sex................................................................................................................................................................... 6 Figure 6: Registered unemployment by sex (Dec. 2022)................................................................................................................................. 7 Figure 7: Number of salaried employees (by skill level)................................................................................................................................... 7 Figure 8: Employment by sector (2015 and 2020)...........................................................................................................................................10 Figure 9: Top paid sectors by median monthly salary in euros (2014-2022 average).........................................................................11 Figure 10: Gross Value Added (GVA) of the total economy (regional level, in millions USD, 2000-2019).....................................12 Figure 11: Total firm turnover by sector (in millions EUR, 2015-2020)33 ..................................................................................................13 Figure 12: Average turnover per firm (2020) .....................................................................................................................................................14 Figure 13: Top export industries (region of Crete, 2021)................................................................................................................................15 Figure 14: Top export destinations (region of Crete, 2021)...........................................................................................................................15 Figure 15: Number of licenses granted for legal construction activity (2015-2022)............................................................................22 Figure 16: Licenses granted for new shops and shop improvements by category use (2015-2022)............................................23 Figure 17: New shop and shop improvements by use category (volume, m³, 2015-2022)...............................................................23 List of Tables Table 1: Population change by municipality, Heraklion regional unit........................................................................................................ 3 Table 2: Potential labor catchment area of Heraklion....................................................................................................................................... 4 Table 3: Sectoral distribution of registered companies (2015-2020)........................................................................................................... 9 Table 4: Enterprise count and total employment by firm size.....................................................................................................................10 Table 5: Significant companies in Heraklion......................................................................................................................................................12 Table 6: External trade (Region of Crete, 2017-2021)......................................................................................................................................14 Table 7: Major development areas co-funded by the EU over the 2014-2020 programming period...........................................25 List of Boxes Box 1: Spin-off feature - BIOPIX DNA TECHNOLOGY P.C.................................................................................................................................17 Box 2: Spin-off feature - Code BGP.........................................................................................................................................................................18 Box 3: “Crete Valley” renewable energy project.................................................................................................................................................21 Box 4: Start up feature - JADBio..............................................................................................................................................................................29 ii Economic Profile: Municipality of Heraklion Heraklion Quick Facts on Region and Municipal Area The municipality of Heraklion is lo- world-famous Archaeological Site of ting-edge research projects through- cated seaside along the Aegean Sea, Knossos, which attracted over 920,000 out Europe in a number of fields. Two on the north coast of the island of visitors in 2023, is 18 kilometers away important university campuses (the Crete. Heraklion is the fourth largest from the city.1 Besides its archaeologi- University of Crete and the Hellenic city in Greece, and the administrative cal past, the city also offers a number of Mediterranean University) and the most capital of Crete and the Heraklion re- cultural attractions and a rich traditional important research center of the coun- gional unit. The city’s historic center gastronomy.2 try, the Foundation of Research and is encircled by Venetian walls, making Technology – Hellas (FORTH) are based the entirety of the old town a protected Heraklion has a significant human in Heraklion. The city particularly bene- monument. Defining landmarks of the capital base, owing to the presence of fits from the well-established business city also include the Venetian port and prominent university campuses and units of the respective institutes, which the 16th-century Koules fortress. The research institutions which lead cut- transfer research results into operation- 1 Pappas, Iorgos, 2023. “Record Year For Knossos Palace: 15MM Euro Revenue.” https://www.argophilia.com/news/knossos-palace-record- 15mm/232510/ 2 Archaeological Museum of Heraklion, the Historical Museum of Heraklion, Kotsanas Museum of Ancient Greek Technology, Kazantzakis Museum, Thirathen Museum of Traditional Instruments, and the Byzantine Collection of St. Catherine of Sinai, among others. 1 Economic Profile: Municipality of Heraklion al use and commercial enterprises. In and potential waterfront development cal economy. The agricultural sector recent years, Heraklion has been a pole near Pankritio Stadium. To meet the fu- comprises a large number of very small of attraction for foreign technology ture demands of tourism and address enterprises, accounting for 54% of reg- companies, which build and develop ongoing climate change pressures, a istered firms, and is the second-highest their R&D departments or tech/devel- range of sustainability projects are be- sector of employment in the munici- opment hubs in the city and acquire ing undertaken in Heraklion and Crete pality, generating 16% of employment. spin-offs. The region of Crete is the sec- more broadly which include sustainable While its contribution in terms of turn- ond most-innovative region in Greece urban tourism, food waste, water desali- over is more limited, contributing just after the region of Athens on the EU’s nation, and renewable energy. 1.7% of total turnovers over 2015-2020, Regional Innovation Scoreboard.3 food products comprise nearly 50% of Over 2015 to 2020, the economic per- the total exports from the region. Heraklion benefits from high season- formance of the municipality increased al tourism, as well as active sectors in significantly in terms of the number of Key sectors of focus and potential commerce, manufacturing, fishing, enterprises registered, persons em- growth for the city include tourism, agro-food, and other industry and ployed, and total firm turnovers (both ICT and biotechnology. Tourism has services. The city also serves as an in- overall and at firm level).8 The total been on an upward trajectory and is ex- frastructure and logistics hub for the turnover of firms in the Municipality of pected to grow in the next years, backed island of Crete and is home to several Heraklion grew significantly over 2015- by the realization of strategic infrastruc- strategic transport companies. Tourism 2019, from €2.38 billion to €4.1 billion. ture projects (airport, port, marina) contributes to 33% of the GDP of the Wholesale and retail trade represented which are expected to expand tourism region of Crete.4 Tourism to the region the highest sectoral share of total turn- offerings across target segments and of Heraklion reaches around 1 to 2 mil- over (45%) and employment (18.4%) improve the value added of the tourism lion people per year, and the island of and accounted for the second highest sector. Significant infrastructures and Crete attracts around 5 million visitors number of registered enterprises (12%) stakeholders are in place to facilitate in- yearly.5 6 The hospitality sector has been in the municipality. Wholesale and retail creased tourism, with two major airlines increasingly attracting domestic and trade generates the highest average and a cruise-style ferry line headquar- foreign investors in recent years, with turnover on a per-firm basis in the lo- tered in the city. Meanwhile, Heraklion significant hotel acquisitions and tour- cal economy and has seen the largest also shows remarkable potential in re- istic real estate development through- growth in employment over the years search and innovation, demonstrated out the island since 2020.7 In recent 2015 to 2020. Manufacturing also com- by its top-tier research centers which years, the municipality has increasingly prises a sizable sector, being the second lead projects across Europe, and its in- focused on strengthening its position largest sector in terms of turnover over creasing business and economic sup- as a sustainable, cultural, tourism desti- 2015-2020 (16%) and the fourth largest port infrastructure leading to successful nation. Tourism has been on an upward as a share of employment in the munic- research commercialization particularly trajectory and is expected to grow in the ipality (6.4%) as of 2020. in the fields of ICT and biotechnology. next years, backed by key projects, from improving the city’s connection with Agriculture, Forestry and Fisheries is the archaeological site of Knossos, de- a small (in terms of contribution to velopment of a new airport and its port, turnover), but vibrant part of the lo- 3 European Commission Directorate-General for Research and Innovation, 2023. Regional Innovation Scoreboard 2023: Regional profiles Greece. https://ec.europa.eu/assets/rtd/ris/2023/ec_rtd_ris-regional-profiles-greece.pdf 4 Insete, 2022. Tourism’s Contribution to the Greek Economy 2020-2021. https://insete.gr/wp-content/uploads/2022/09/2020-2021_EN.pdf 5 Global Sustainable Tourism Council (GSTC). Heraklion Tourism Overview. https://www.gstcouncil.org/destination-assessment-of-heraklion/ 6 International Airport Review, 2023. New year, new challenges. https://www.internationalairportreview.com/article/184100/2023-new-year-new-challenges-airport-heraklion-crete/ 7 For example, U.S. investment fund Hines acquired five hotels on the island in 2020. In 2021, U.S. investment fund Blackstone acquired the Elounda Blu hotel (1 hour away from Heraklion, Lasithi regional unit), and Russian developer Mirum announced it was beginning work on its Elounda Hills resort project. 8 Data from the Statistical Register of Businesses. 2 Economic Profile: Municipality of Heraklion Demographics The permanent population of the re- gional unit of Heraklion is 301,017, out Table 1: Population change by municipality, Heraklion regional unit of which the municipality has a popu- Municipality 2011 2021 % change lation of 179,302 (Table 1).9 Over 2011 Irakleio 173,993 179,302 3.1% to 2021, the regional population size Archanes - Asterousia 16,692 16,072 -3.7% has declined by 0.2%, while the popula- tion of the municipality of Heraklion has Viannos 5,563 4,436 -20.3% grown by 3.1%. Population size across Gortyna 15,632 14,167 -9.4% most municipalities in the regional unit Malevizi 24,864 25,734 3.5% decreased,10 yet decrease in population Minoas Pediadas 17,563 14,165 -19.3% size was observed in municipalities hav- Faistos 24,466 23,921 -2.2% ing populations below 20,000, while population declined less or even grew Chersonisos 26,717 27,220 1.9% in municipalities above 20,000. This Regional total 305,490 305,017 -0.2% likely reflects the role of the municipal- Source: Population data from Census results of Population and Housing ELSTAT 2011 and 2021. ity as a large regional urban center, as is observed in other demographically Figure 1: Total population by age and sex (2011) declining areas in Europe: the accelerat- ed rate of shrinkage in rural areas com- 80+ pared to urban areas leads to a greater 70-79 rate of urbanization in regional units 60-69 even if the overall population is declin- 50-59 ing. Figure 1 presents the composition 40-49 of the Municipality’s population by age category and sex. 30-39 20-29 Human capital/Labor 10-19 market 0-9 Heraklion is a medium-sized functional -11 -9 -7 -5 -3 -1 1 3 5 7 9 urban area and the third largest func- Male (%) Female (%) tional urban area in Greece), with 7 municipalities within a driving distance Source: Population data from Census results of Population and Housing ELSTAT 2011. 9 Census results of Population and Housing ELSTAT 2021, available at https://elstat-outsourcers.statistics.gr/census_results_2022_en.pdf 10 Population size in decreased across all municipalities of the Heraklion regional unit except for Malevizi, Chersonisos, and Heraklion. 3 Economic Profile: Municipality of Heraklion Figure 2: Potential labor catchment area of Heraklion (~60km radius) of approximately one hour or less.11 Educational attainment of uate studies (including PhD level). Considering the economically active workforce Vocational education (high school and population within each of these munic- Heraklion has a moderately educat- educational degrees) represents the ipalities, the number of economically ac- ed workforce, with 21.3% of the ac- highest level of education attainment tive individuals within its potential labor tive population holding university among 8.4% of Heraklion’s labor force, catchment area of Heraklion reaches ap- or equivalent degrees, and 3.8% of while another 20% have completed proximately 133,666 (Table 2).12 which have also completed post-grad- higher professional school and post-sec- ondary education degrees. However, census data also reveals disparities in Table 2: Potential labor catchment area of Heraklion educational attainment rates: among Distance Active the active population, 50% of the work- from Commute Total population force have completed secondary school Municipality Heraklion time population (2021 census) or less, while 15.6% of the workforce Heraklion 179,302 79,369 have completed primary school or less. Chersonisos 24 km 25 min 27,220 12,470 Figure 3 presents the educational at- tainment of Heraklion’s workforce by Malevizi 25 km 35 min 25,734 11,548 gender as of 2011. Archanes – Asterousia 43 km 45 min 16,072 6,247 Minoas Pediadas 34 km 40 min 14,165 6,422 Educational opportunities in Heraklion. Faistos 49 km 55 min 23,921 10,296 Heraklion is a strong university center, Gortyna 53 km 1 hr 14,167 5,321 being home to several higher education Viannos 56 km 1 hr 4,436 1,993 institutions and affiliate organizations, such as the University of Crete, Hellenic Total 305,017 133,666 Mediterranean University (HMU, for- Source: Distances / commuting time estimates based on Google Maps; population data merly the Technological Educational from Census results of Population and Housing ELSTAT 2011 and 2021. 11 OECD, 2022. Functional Urban Areas: Greece. https://www.oecd.org/cfe/regionaldevelopment/Greece-fua.pdf 12 2011 data. 4 Economic Profile: Municipality of Heraklion Figure 3: Education level of active labor force (2011) Postgraduate degree (including PhD) University degree, technical universities and equivalent Higher professional school and post-secondary education Vocational education training Upper secondary school (6 years) Lower secondary school (3 years) Primary school or less 0 2,000 4,000 6,000 8,000 10,000 12,000 Male Female Source: Authors’ elaboration. Data received from Census results of Population and Housing ELSTAT 2011. Note: Vocational training includes both high school certificates and vocational education degrees. University degree or equivalent includes technical universities and equivalent schools. Institute of Crete - TEI), and the private al level, the labor force participation rate of the employed workforce is between MBS College of Crete.13 14 15 Numerous of Heraklion reaches 73.2%, close to the the ages of 35-44. As of 2021, the region technical schools and vocational educa- municipal rate.16 of Crete had an employment rate of tional training institutes also activate in 82.7%.18 the municipality. Employment rate of active labor force. As of 2011, the Municipality had an ap- Unemployment Labor force and employment proximate employment of 81% among As of December 2022, the total num- Labor force participation. The Munici- its total active labor force. On average, ber of unemployed persons in the pality of Heraklion has a labor force par- females tend to be employed at low- Municipality of Heraklion was 28,519 ticipation rate of 73.3% among adults be- er rates than males until the age of 45; persons.19 Across all age categories, tween the ages of 25 and 64. Labor force thereafter, female labor force participa- women tend to be unemployed in participation rates differ significantly be- tion begins to drop significantly (Figure much larger numbers than men across tween males and females, with a rate of 5b).17 Thus, while the percentage of all categories, despite their lower rate of 82.6% among males compared to 64.4% employment among the active popu- labor force participation (Figure 6). As of among females. Labor force participation lation of females above the age of 45 is 2022, the region of Crete had an unem- is considerably lower among individuals relatively high, they comprise less than ployment rate of 12.1%, below the na- prior to the age 24 (Figure 4). At region- 3% of the employed labor force. Most tional average of 12.5%.20 13 The University of Crete has two of its schools based in the city of Heraklion: the School of Medicine and the School of Sciences & Engineering (Department of Mathematics & Applied Mathematics, Department of Physics Department of Biology, Department of Chemistry, Department of Computer Science, Department of Materials Science And Technology). Other schools of the university are located in Rethymno. 14 The following schools and departments of the Hellenic Mediterranean University are located in Heraklion. School of Engineering - Department of Electrical and Computer Engineering and Department of Mechanical Engineering; School of Health Sciences - Department of Nursing, Department of Social Work; and the Department of Business Administration & Tourism and Department of Accounting and Finance (the School of Management and Economics Sciences is based in Agios Nikolaos). 15 MBS College offers undergraduate courses in business, psychology, and tourism and hospitality management. It offers graduate studies in business administration, with emphases in marketing and human resources. 16 Figures for female labor force participation given as aggregate for women above the age of 64, thus, there is no precise estimation of the actual labor force participation rate among women until the age of 64. 17 ELSTAT. 18 ELSTAT- Greece in Figures January - March 2021. 19 DYPA (mdaae.gr). 20 ELSTAT- Greece in Figures January - March 2021. 5 Economic Profile: Municipality of Heraklion As of 2022, 84% of the workforce in did the number of persons employed in skilled positions). The total number of Heraklion is occupied in medium and low-skilled positions. Hiring increased new jobs per year increased over 2015- high-skilled jobs (66% and 19% of sal- across all skill levels over 2015-2022, 2021 and declined in 2022, particularly aried employees, respectively), while with a pronounced concentration in among low and medium-skilled jobs, approximately 15% of job positions medium and high skilled jobs, which while increasing among high skilled are low-skilled. The number of per- represented 80% of all hirings over positions. Figure 7 presents the number sons employed in high skilled labor in- the period (58.6% of hiring in medi- of salaried employees by skill level in creased on average over the period, as um skilled positions and 21.6% in high Heraklion as of December 2022. Figure 4: Labor force participation rate by sex and age group (%) 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 0 10 20 30 40 50 60 70 80 90 100 Male (%) Female (%) Source: Authors’ elaboration. Data received from Census results of ELSTAT 2011. Note: The labor force participation rate is calculated as the economically active population divided by the total working-age population. Figure 5: Employment by age and sex Employment among active population Composition of employed population by age 60-64 65 and over 55-59 50-54 55-64 45-49 45-54 40-44 35-39 35-49 30-34 25-29 25-34 20-24 15-24 15-19 0 20 40 60 80 100 0 2 2 4 8 Male (%) Female (%) Male (%) Female (%) Source: Authors’ elaboration. Data received from Census results of Population and Housing ELSTAT 2011. 6 Economic Profile: Municipality of Heraklion Figure 6: Registered unemployment by sex (Dec. 2022) 5,000 4,688 4,697 4,000 3,763 2,987 3,000 2,539 2,407 2,424 2,000 1,851 1,0871,164 1,000 362 553 0 15-24 25-34 35-44 45-54 55-64 65+ Male Female Source: Authors’ elaboration. Data from DYPA (mdaae.gr). Figure 7: Number of salaried employees (by skill level) 2022 2021 2020 2019 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 Low Medium High Source: Data from DYPA (mdaae.gr), as of December 2022. Note: Figure includes both full time and part time employment. Low/medium/high skill levels are categorized in accordance with the official classification given by the ILO’s International Standard Classification of Occupations (ISCO-08). 7 Economic Profile: Municipality of Heraklion Structural Composition of the Economy Number of registered companies. (3%); and transportation and storage storage; accommodation and food ser- As of 2020, there were 36,792 regis- (3%). All other sectors each represented vices; administrative and support ac- tered enterprises in the Municipality less than 2% of registered enterprises, tivities; among others. Table 3 presents of Heraklion. The number of registered respectively. the number of registered enterprises by enterprises has consistently increased sector over 2015 to 2020. over 2015 to 2020, with an overall in- The number of registered enterprises crease of 27% from 29,054 registered increased across nearly all sectors over MSMEs enterprises in 2015. 2015 to 2020. Increases in the number of registered enterprises were observed Taken together, micro and small- Business density. With approximate- in agriculture, forestry and fisheries; to-medium sized enterprises (MSMEs) ly 205 registered enterprises per 1,000 real estate management; human health accounted for at least 87% of total inhabitants, the business density per and social care; manufacturing; admin- registered enterprises in Heraklion population of Heraklion is several times istrative support and service activities; Municipality as of 2020 (Table 4).22 larger than the European average of education; arts, entertainment, and Between 6 to 17 large enterprises were 53.3 companies per 1,000 inhabitants. recreation; and utilities (energy and recorded over 2015 to 2020. On aver- This high figure is largely due to the water sectors). Meanwhile, the number age, SMEs represented 85% of total significant number of micro-sized busi- of registered enterprises decreased in turnovers over the period. Micro-sized ness present, particularly in the primary wholesale and retail trade; professional, enterprises alone comprised 85% of all sector. scientific and technical activities; con- registered enterprises, 58% of employ- struction; accommodation and food ment and 37% of total firm turnovers Sectoral distribution of registered service activities; and information and in Heraklion Municipality over 2015 companies. As of 2020, the sectors with communications; and transportation to 2020. Meanwhile, small to medi- the significant shares of registered en- and storage.21 The number of registered um-sized enterprises comprised 2.3% of terprises in the municipality were ag- enterprises across these sectors had al- registered enterprises, 29% of employ- riculture, forestry and fisheries (54%); ready been in decline prior to 2020 (e.g. ment, and 48% of total firm turnovers. wholesale trade (12%); professional, sci- wholesale and retail trade; professional, Large enterprises represented less than entific and technical activities (8%); con- scientific and technical activities; infor- 1% of registered firms, 5% of employ- struction (4%); human health and social mation and communication). In 2020, ment, and 15% of recorded firm turn- care (4%); accommodation and food decrease was observed in wholesale overs over the period. In 2018, 17 large service activities (3%); manufacturing and retail trade; transportation and enterprises represented approximately 21 The number of registered enterprises declined in wholesale and retail trade (total decrease of 434 enterprises, from 3695 to 3261), construction (1053 to 880 enterprises), professional, scientific and technical activities (2838 to 2691 enterprises), education (412 to 352 enterprises), accommodation and food service (552 to 492 enterprises), transportation and storage (1113 to 1107 enterprises), information and communication (391 to 361 enterprises). 22 Between 6 to 17 large enterprises were recorded over 2015 to 2020. Meanwhile, 14% of enterprises were categorized as being of indeterminate size over the period. 8 Economic Profile: Municipality of Heraklion Table 3: Sectoral distribution of registered companies (2015-2020) Share of Share of registered registered 2015- enterprises enterprises 2020 Sector 2015 2016 2017 2018 2019 2020 (2015) (2020) change Agriculture, forestry and fisheries 11,718 17,660 18,229 19,291 19,224 19,916 40% 54% 70% Wholesale and retail trade 4,527 4,320 4,421 4,259 4,336 4,245 16% 12% -6% Professional, scientific and 3,414 3,096 3,089 2,993 3,080 3,127 12% 8% -8% technical activities   Construction   1,504 1,362 1,471 1,379 1,472 1,470 5% 4% -2% Human health and social care   1,256 1,242 1,260 1,263 1,275 1,289 4% 4% 3% Accommodation and food service 1,317 1,237 1,318 1,219 1,273 1,236 5% 3% -6% Manufacturing 1,155 1,120 1,157 1,125 1,175 1,176 4% 3% 2% Transportation and storage   1,113 1,091 1,127 1,083 1,146 1,107 4% 3% -1% Other service activities   763 694 733 748 786 784 3% 2% 3% Administrative and support 445 420 451 447 481 467 2% 1% 5% activities   Education   436 409 422 432 453 451 2% 1% 3% Information and communication   391 362 346 341 354 361 1% 1% -8% Arts, entertainment and recreation   316 329 326 340 358 347 1% 1% 10% Financial and insurance activities   334 336 341 340 349 339 1% 1% 1% Supply of electricity, natural gas, 177 162 197 192 202 200 1% 1% 13% steam and air conditioning   Real estate management   123 121 139 134 164 177 0% 0% 44% Unknown activity 23 40 374 315 183 66 0% 0% Water supply; wastewater treatment, waste management and 23 26 27 28 29 31 0% 0% 35% remediation Mining and quarrying 4 4 3 3 3 3 0% 0% -25% Public administration 15 0 13 13 14 0 0% 0% Total 29,054 34,031 35,444 35,945 36,357 36,792 27% Source: Authors’ elaboration. Data received from the Statistical Register of Businesses. 20% of all recorded firm turnovers in the well as total turnovers. Meanwhile, mi- wholesale and retail trade (18%), ag- municipality. cro-sized enterprises have decreased as riculture, forestry, and fisheries (16%), a share of employment and total turn- education (13%), accommodation and Firm size dynamics. Over 2015 to 2020, overs since 2015. Table 4 presents the food service activities (12%).23 Other sig- the number of registered enterprises enterprise count and total employment nificant sectors of employment include generally increased across all class sizes. by firm size for the enterprises for which manufacturing (6%), public administra- The employment share of large enter- data was reported over 2015 to 2020. tion (6%), professional, scientific, and prises has increased, while turnovers technical activities (6%), construction among large enterprises fluctuated Sectoral analysis (5%), and human health and social care over the period and sustained signif- (4%). All other categories comprise less icant decline particularly in 2016 and Employment by sector. As of 2020, than 3% each of employment share. 2020. Medium-sized enterprises have employment in the Municipality of Figure 8 presents the number of persons increased as a share of employment as Heraklion is largely concentrated in employed by sector in 2015 and 2020. 23 Statistical Register of Businesses. 9 Economic Profile: Municipality of Heraklion Most other fields increased in terms Table 4: Enterprise count and total employment by firm size of persons employed but decreased Firm size 2015 2016 2017 2018 2019 2020 in their share of employment rela- Enterprise Count tive to other sectors. The number of persons employed in agriculture, for- Large 6 6 9 17 15 6 estry and fisheries increased modestly Small to medium 467 748 761 889 1,016 865 over the period (1,112 persons, 12% Micro 25,309 32,705 26,819 27,222 27,446 31,191 increase) though it declined from 19% Uncategorized 1,475 329 7,572 7,513 7,750 4,549 to 16% as a share of total employment. Number of persons employed Employment in professional, scientif- Large 1,675 2,426 2,189 5,721 6,024 2,636 ic and technical activities increased by 10% in terms of number of persons Small to medium 11,936 19,023 18,355 22,306 25,916 20,283 employed but dropped as a share Micro 36,990 46,332 38,826 36,907 37,186 39,037 of employment from 7.6% to 6.2%. Uncategorized 3,766 203 8,071 4,095 6,891 11,576 Employment in construction declined Source: Authors’ elaboration. Data received from the Statistical Register of Businesses. in 2017, but otherwise grew steadily until 2020 (total increase of 676 per- Employment dynamics. Employment from 14% to 18% (increase of 5,745 sons, 22%), while its share of employ- grew in nearly all sectors over the pe- persons), education grew from 8% to ment declined slightly over the entire riod. Wholesale and retail trade; educa- 13% (increase of 5,129 persons), and period, from 5.7% to 5.1%. Meanwhile, tion; and activities related to public ad- employment in public administration employment in human health and so- ministration experienced the greatest related activities increased from 1.6% cial care activities grew by 32% in terms growth in employment. Employment to 6.3% as a share of employment (in- of persons employed over the period, in wholesale and retail trade increased crease of 3,738 persons). (increase of 785 persons) and remained Figure 8: Employment by sector (2015 and 2020) Wholesale and retail trade Agriculture, forestry and sheries Education Accommodation and food services activities Manufacturing Public administration Professional, scienti c and technical activities Construction Human health and social care Other service activities Transportation and storage Unknown activity Arts, entertainment and recreation Administrative and support activities Information and communication Financial and insurance activities Real estate management Electricity, natural gas, steam and air conditioning Water, wastewater, waste management Mines and quarries 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 2015 2020 Source: Authors’ elaboration. Data received from the Statistical Register of Businesses. 10 Economic Profile: Municipality of Heraklion relatively steady as a share of total em- portation and storage experienced a mation service activities, among others ployment (4.5%), though the number of similar trend, rising from 1,693 persons (Figure 9). persons employed varied widely over in 2015 to 4,465 persons in 2019, be- the years, as in most other sectors. fore dropping to 1,795 in 2020. The net Over 2020-2022, salary levels increased change in employment in transport and by 6% across nearly all sectors, with Some sectors showed increasing storage was positive over 2015 to 2020 gains being largest in forestry and log- trends of employment until 2019 (6%), though its share of employment ging, employment-related activities, and declined sharply in 2020 due to relative to other sectors declined from manufacture of transport equipment, the COVID-19 pandemic. As of 2019, 3.1% to 2.4% (despite peaking at 5.9% sewerage, and supply of utilities and employment in accommodation and as a share of employment in 2019). related utilities.24 Meanwhile, salaries food services numbered approximately decreased in water transport; tele- 10,457 employed persons before drop- Top paid sectors. The top paid sectors communications, travel agencies and ping to 8,622 in 2020 (18% decline). by median monthly wage over 2014- related services, creative, arts and en- Despite the drop in employment in 2022 included manufacturing (pe- tertainment activities, and social work 2020 due to COVID-19, employment troleum, metal, pharmaceutical, and activities. increased by 16% over the entire peri- chemical products), transport (water od (by 1,171 persons). Employment in and air), financial service activities, util- Key companies. Many of Heraklion’s manufacturing also increased over 2015 ities (water collection, treatment and top companies are in activities relat- to 2019, from 4,829 persons to 5,692 supply, electricity, gas, steam and air ed to tourism and services (facilities persons, before dropping to 4,738 per- conditioning supply) public administra- and hospitality management, wellness sons in 2020 and registering an overall tion, computer programming, scientific center, travel agencies). Heraklion is net decline of 2%. Employment in trans- research and development, and infor- also home to Sky Express and Blue Bird Figure 9: Top paid sectors by median monthly salary in euros (2014-2022 average) Manufacture of coke and re ned petroleum 2,586 Manufacture of fabricated metal products 2,412 Water transport 2,396 Air transport 2,312 Financial service activities, except insurance and pension funding 2,189 Water collection, treatment and supply 1,887 Public administration and defense; compulsory social security 1,823 Electricity, gas, steam and air conditioning supply 1,777 Computer programming, consultancy and related activities 1,737 Scienti c research and development 1,713 Information service activities 1,633 Manufacture of basic pharmaceutical products and pharmaceutical... 1,574 Other mining and quarrying 1,549 Travel agency, tour operator, reservation service and related activities 1,466 Manufacture of chemicals and chemical products 1,460 €0 € 1,000 € 2,000 € 3,000 Source: MDAAE ERGANI. Note: Manufacture of fabricated metal products excludes machinery and equipment. 24 MDAAE ERGANI. 11 Economic Profile: Municipality of Heraklion Table 5: Significant companies in Heraklion Airways,25the 2nd and 3rd largest airlines in Greece.26 27 Minoan Lines, headquar- Area of Activity Companies tered in Heraklion, is one of the largest Accommodation and Coffee Tree, Anakrom Facility management, passenger ferry companies in Europe, food services Aegean Spa Consulting and Wellness Centre and one of the dominant passenger fer- Management Company, Karatzis S.A. ry companies in Greece. Manufacturing Plastika Kritis S.A., Karatzis S.A. (netting)25 Financial services, Deloitte, Grant Thornton, Pancretan Bank LLC, Economic performance professional, technical VMACO (business development consulting) GDP. The GDP per capita of Heraklion and scientific activities has been on an upward trend since 2015, Energy Volton Hellenic Energy S.A. notwithstanding a decline in 2020. As of Transport SKY express, Blue Bird Airways, Minoan Lines 2021, the Heraklion regional unit had a Tourism services TUI travel agency, K. Badouvas S.A. (Cretan GDP per capita of €16,300, slightly below Holidays travel agency) the national average of €20,700.28 29 The Employment activities Panko (employment agency) real GDP of Crete rose by 7.6% in 2021- Wholesale and retail trade Halkiadakis S.A. (supermarket chain) 2022 and reached a GDP per capita of €20,000 as of 2022, while the EU average Source: MDAEE ERGANI. was €35,400.30 Figure 10: Gross Value Added (GVA) of the total economy (regional level, Gross value added. The gross value in millions USD, 2000-2019) added of the total economy of the re- gion of Crete ranks 4th among regions in 18,000 Greece, at $13.4 billion in 2020, of which 16,000 the Heraklion regional unit comprised 14,000 $6.3 billion.31 Like the rest of Greece, the 12,000 gross value of both the regional unit of 10,000 Heraklion and the region of Crete peak- ed in 2008 and declined sharply thereaf- 8,000 ter, having yet to reach pre-2008 levels 6,000 (Figure 10). While data for gross value 4,000 added is unavailable at municipal level, 2,000 several data sets provide insight into the 0 size and structure of economic output. 2000 2003 2006 2009 2012 2015 2018 Region of Crete Heraklion Regional Unit Total reported firm turnover. The total turnover of firms in the Municipality of Source: OECD Cities and Regions. https://regions-cities-atlas.oecd.org/TL3/x/x/REGION_ Heraklion grew significantly over 2015- ECONOM-GVA_IND_TOTAL-REAL_PPP/2019 2019, from €2.38 billion to €4.1 billion. Note: Total economy Million USD (Expressed in Million USD constant prices constant PPPs, Total firm turnover typically grew year- 2015 reference year). 25 Karatzi also operates the Nana Beach Hotel in Chersonisos, an all-inclusive luxury resort. 26 In 2022, Sky express operated 5,260 flights and carried 595,000 passengers. In 2023, SKY express was expected to carry more than 720,000 passengers to Heraklion. https://www.skyexpress.gr/en/news/heraklion-is-the-starting-point-of-our-dynamic-development 27 While Olymic Air has a larger fleet size and serves more destinations than Bluebird Airways, its financial figures have been consolidated within Aegean Air since the completion of its aquisition in 2013. 28 Eurostat (indicator: nama_10r_3gdp). GDP PPS per inhabitant. 29 No official data could be found on GDP and GDP per capita for the Municipality of Heraklion. 30 Eurostat (indicator: nama_10r_2gdp). GDP PPS per inhabitant. 31 OECD Cities and Regions. https://regions-cities-atlas.oecd.org/TL3/x/x/REGION_ECONOM-GVA_IND_TOTAL-REAL_PPP/2019 12 Economic Profile: Municipality of Heraklion over-year until 2020, when it dropped (increase of €21 million). Figure 11 pres- Firm-level turnovers grew in wholesale from €4.1 billion to €2.81 million. ents the sectoral composition of firm and retail trade, construction, human turnovers over 2015 to 2020. health and social services, financial Total turnover by sector. Over 2015- service activities, information and 2020, wholesale and retail trade32 com- Firm-level turnover by sector. On a per- communications, though most experi- prised 45% of total reported turnovers, firm basis, wholesale and retail trade enced significant decline in 2020. Until followed by manufacturing (15.9%), contributed the greatest amount of 2019, average turnover per firm has ris- administrative and support activities turnover per enterprise in 2020, followed en considerably in wholesale and retail (10.9%), construction (7.0%); accom- most closely by manufacturing. Real es- trade, construction, human health and modation and food service activities tate management, construction, and en- social services, financial service activi- (6.5%), technical, professional and sci- ergy utilities represented above-average ties, information and communications. entific activities (2.9%), agriculture, for- firm-level turnovers. Accommodation Average turnover per firm in manufac- estry and fisheries (1.7%), and health and food services generally generated turing increased steadily over 2015 to and social care (1.2%). Over 2015-2020, above-average firm-level turnovers rela- 2019, from €184,337 to €230,760 in turn- significant growth in total reported tive to other sectors with the exception over per firm, though it declined signifi- turnover occurred in wholesale and re- of 2020 (its firm-level turnovers peaked cantly to €132,500 in 2020. Firm-level tail trade (increase of €1 billion), educa- at €86,991 in 2018). Agriculture had the turnovers in transportation and storage tion, construction (increase of €92 mil- lowest average turnover on a per firm ba- experienced a similar trend, growing lion), health and social care (increase of sis. Figure 12 presents the average turn- significantly over 2015 to 2019 (from €24.7 million), real estate management overs of firms by sector in 2020.33 €23,600 to €140,000 in average firm Figure 11: Total firm turnover by sector (in millions EUR, 2015-2020)33 € 4,500 € 4,000 € 3,500 € 3,000 € 2,500 € 2,000 € 1,500 € 1,000 € 500 €0 2015 2016 2017 2018 2019 2020 Wholesale and retail trade Manufacturing Construction Accommodation and food service activities Professional, scienti c and technical activities Human health and social care Agriculture, forestry and sheries Transportation and storage Other Source: Authors’ elaboration. Data received from the Statistical Register of Businesses. Note: All other sectors account for approximately 5.0% of total firm turnovers as of 2020: administrative and support activities, electricity, natural gas, steam and air conditioning, information and communication; arts, entertainment and recreation, education, financial and insurance activities, real estate management; water; wastewater, waste management, Public administration; compulsory social security, unknown activities, mining and quarrying. 32 Wholesale and retail trade includes the repair of vehicles and motorcycles. 33 Data unavailable for the following: Public administration; compulsory social security (2016); Electricity, natural gas, steam and air conditioning (2017), mining and quarrying (2015, 2016 and 2020). 13 Economic Profile: Municipality of Heraklion Figure 12: Average turnover per firm (EUR, 2020) Wholesale and retail trade 153,111 Manufacturing 132,506 Real estate management 91,732 Construction 88,904 Electricity, natural gas, steam and air conditioning 74,165 Public administration, social security 40,038 Accommodation and food services 39,061 Water, wastewater, waste management 30,727 Information and communication 27,534 Administrative and support activities 26,876 Health and social care 19,698 Arts, entertainment and recreation 18,683 Transportation ans storage 18,611 Financial and insurance activities 17,096 Other service activities 13,,61 Professional, scienti c and technical activities 12,727 Education 11,812 Agriculture, forestry and sheries 1,772 Unknown activity 625 €0 € 40,000 € 80,000 € 120,000 € 160,000 Source: Authors’ elaboration. Data received from the Statistical Register of Businesses. level turnover) and falling to €18,610 million, 43% decrease); wholesale and million, 22% increase), electricity, natu- per firm in 2020. Decreases in firm-level retail trade (€197.5 million, 11% de- ral gas, steam and air conditioning (€2.4 turnover were observed in administra- crease); and accommodation and food million, 13% increase), and unknown tive and support activities; agriculture; service activities (€123.5 million, 51% activities (€15.8 million, 44% increase). and energy and utilities-related activi- decrease). Few sectors experienced ties. These decreases could be partially turnover growth from 2019 to 2020: Export volumes. The region of Crete attributed to the growth in the number turnovers grew in human health and so- contributes 1.8% of national exports.34 of firms outpacing growth in turnovers. cial care (€28.6 million increase, growth Crete’s contribution of exports to its Firm-level turnovers in human health of 78% relative to 2019); agriculture, GDP is below the national average and social care decreased slightly over forestry and fisheries (€6.9 million, 13% (7.9% vs. 21.7%). The region has main- 2015 to 2019 and grew by 53% in 2020. increase); real estate management (€5.5 tained a strong and increasing trade COVID-19 impact. COVID-19 had a no- ticeable impact on firm performance, as Table 6: External trade (Region of Crete, 2017-2021) total firm turnover decreased by approx- (amounts in imately €1.3 billion (32%) from 2019 to € millions) 2021 2020 2019 2018 2017 2020. The sectors with strongest decline Exports 700.4 632.5 619.0 679.8 611.5 in firm turnover in 2020 were adminis- Imports 467.6 451.5 449.0 510.3 455.8 trative and support activities (€269.5 Trade Balance 232.8 181.0 170.0 169.5 155.7 million, 92% decrease from 2019); trans- portation and storage (€357.6 million, Exports/Imports 149.8% 140.1% 137.9% 33.2% 134.2% 87% decrease); manufacturing (€266.7 Source: SEBE-Greek International Business Association, IEES, and Export Credit Greece. 34 Export Credit Greece. Map of Greece | Regions – Export Credit Greece S.A. (ecg.gr) 14 Economic Profile: Municipality of Heraklion Figure 13: Top export industries Figure 14: Top export destinations (region of Crete, 2021) (region of Crete, 2021) Italy 22.0 3.1% 3.6% Germany 15.6 France 5.5 8.6% Netherlands 4.4 12.0% United Kingdom 3.8 49.4% Poland 3.8 23.3% United States 3.5 Cyprus 3.0 Austria 2.7 Food Textiles and clothing Spain 2.4 Chemicals and plastics Machines and devices 0% 5% 10% 15% 20% 25% Petroleum products Others Source: SEBE-Greek International Business Source: SEBE-Greek International Business Association -IES- Institute of Export Research Association -IES- Institute of Export and Studies, and Export Credit Greece. https://ecg.gr/en/greece-map/ Research and Studies, and Export Credit Greece. https://ecg.gr/en/greece-map/ in Greece.35 While limited consolidat- a new data center to host intercontinen- balance over the years, as the region’s ed data exists on investments in and tal, regional, and national subsea cable volume of exports increased by 15% around Heraklion, anecdotal evidence systems landing on the island and en- over 2015-2021, while the value of im- suggests ongoing private sector invest- able interconnection between them.37 ports increased by 3%. ment in ICT and real estate. The new data center, to be located in Heraklion, will be the island’s first car- Export performance by sector and des- Significant private sector investments rier-neutral facility, and is expected to tination. Food exports comprised near- are underway to develop the island’s offer up to 6.5 megawatts of capacity. ly half (49.4%) of all regional exports in capacity as telecommunications hub 2021. Olive oil, wine, and other Cretan between Europe, Africa, and Asia. In Heraklion’s technology startups have specialties constitute a significant por- 2022 and 2023, Lamda Hellix and Grid also drawn attention from foreign tion of the region’s food exports. Other Telecom launched complementary in- technology companies, with a notable significant export industries include vestments to develop and establish the acquisition in 2023. In August 2023, (20.5%), chemicals and plastics (23.3%), island of Crete as a strategic intercon- Cisco acquired Code BGP, a cyber-secu- petroleum products (12%), and tex- nection node in the Mediterranean.36 rity spinoff of the Institute of Computer tiles and clothing (8.6%). Figure 13 and Grid Telecom has made significant in- Science - Foundation for Research and Figure 14 present the top industries and vestments in adding capacity to existing Technology - Hellas. Code BGP is to be destinations of the region’s exports as of subsea cable systems routed through absorbed into Cisco ThousandEyes, the 2021. Crete and will be building a new cable company’s network intelligence arm landing station in the southeast of the and will expand ThousandEyes’ moni- Private sector investments island. In October 2023, Lamda Hellix, toring capabilities on the global view of In 2023, the Region of Crete account- Digital Realty’s Greek subsidiary, an- Internet health.38 ed for approximately 4% of inward FDI nounced plans for the development of 35 EY, 2023. EY Attractiveness Survey Greece. https://assets.ey.com/content/dam/ey-sites/ey-com/en_gr/topics/attractiveness/2023/ey- attractiveness-survey-2023-eng-version-final.pdf 36 Grid Telecom, 2022. Grid Telecom an IPTO company, and Lamda Hellix a Digital Realty company, align investments in Crete. https://www.grid-telecom.com/en/nea/anakoinoseis/grid-telecom-ipto-company-and-lamda-hellix-digital-realty-company-align 37 Lamda Hellix, 2022. LAMDA HELLIX’S HERAKLION-1 TO TURN CRETE INTO AN INTERNATIONAL DATA HUB. https://lamdahellix.com/post/499/to-heraklion-1-ths-lamda-hellix-tha-metatrepsei-thn-krhth-se-diethnh-kombo-dedomenwn 38 Thousandeyes, 2023. SUMMARY: Cisco announces acquisition of Code BGP to deepen ThousandEyes’ BGP capabilities. https://www.thousandeyes.com/blog/cisco-announces-acquisition-of-codebgp 15 Economic Profile: Municipality of Heraklion Research and Innovation The region of Crete is ranked the sec- over 2015-2020. Overall turnovers in ment hubs in the city and have a strong ond most-innovative region in Greece professional, scientific and technical ac- impact on the local ecosystem.42 after the region of Attica. Crete is tivities have also grown over the period, ranked as a moderate innovator ac- with an increase of 18% over 2015 to The Foundation for Research & Tech- cording to the EU’s Regional Innovation 2019, before dropping slightly in 2020. nology – Hellas (FORTH) comprises 8 Scoreboard, with an innovation score Average turnover per firm in the sector research institutes (5 of which are in of 82.4 as of 2021, representing an in- also increased significantly over 2015 to Heraklion), as well as the Crete Uni- crease of 13.7% since 2016.39 The re- 2018, peaking at €116,956 in 2018. versity Press (CUP). Research institutes gion scores well above the EU average in Heraklion are Institute of Electronic in public R&D expenditure and non- Key research institutions Structure and Laser; the Institute of Mo- R&D expenditure, though below the and start-up companies lecular Biology and Biotechnology; the EU average for R&D expenditure by the Biomedical Research Division in Ioanni- private sector.40 It significantly outper- Heraklion is home to numerous insti- na, the Institute of Computer Science; forms the EU average in its internation- tutions which endow it with a formi- the Institute of Applied and Computa- al scientific co-publications as well as dable presence in research, innova- tional Mathematics; and the Institute of in citations of scientific publications.41 tion, and entrepreneurship at both Astrophysics.43 FORTH has also founded The region also scores above the EU national and EU level. Heraklion has a the PRAXI Network, a technology trans- in its performance in product innova- significant human capital base, owing fer Unit, and the Science and Technolo- tors, sales of innovative products, pub- to the presence of two important uni- gy Park of Crete (STEP-C), which present lic-private co-publications, and collab- versity campuses – the University of significant infrastructures for research oration between SMEs. Meanwhile, it Crete and the Hellenic Mediterranean dissemination and commercialization. lags in employment in knowledge-in- University – and the most import- tensive activities, tertiary education at- ant research center of the country, Within the Institute of Applied and tainment, and design applications and the Foundation of Research and Computational Mathematics of FORTH, patent applications. Technology-Hellas (FORTH). In recent the Remote Sensing Lab is a key innova- years, Heraklion has also been a pole of tor in issues of climate change and ur- At municipal level, employment in attraction for foreign technology com- banization. RS Lab has coordinated and education and professional, scientif- panies which build and develop their been involved in numerous internation- ic and technical activities has grown R&D departments or tech/develop- al research and development projects 39 European Commission Directorate-General for Research and Innovation, 2023. Regional Innovation Scoreboard 2023: Regional profiles Greece. https://ec.europa.eu/assets/rtd/ris/2023/ec_rtd_ris-regional-profiles-greece.pdf 40 European Commission, 2019. 41 European Commission Directorate-General for Research and Innovation, 2023. Regional Innovation Scoreboard 2023: Regional profiles Greece. 42 Bizrupt Innovation Catalyst, 2024. Heraklion: an emerging ecosystem of entrepreneurship and innovation. https://bizrupt.gr/en/heraklion-emerging-ecosystem-entrepreneurship-innovation/ 43 FORTH, 2024. FORTH at a glance. https://www.forth.gr/index_main.php 16 Economic Profile: Municipality of Heraklion funded by the European Research Coun- Heraklion is also home to the from academia and industry helps drive cil (ERC), the European Framework Pro- Department of Viticulture, Floriculture & public-private co-publications, and grammes Horizon 2020, FP7 and ERA.Net, Plant Protection of the Institute of Olive collaboration between SMEs. Research as well as by the European Space Agen- tree, Subtropical crops & Viticulture commercialization also takes the form cy (ESA) and National funding sources.44 (headquartered in nearby Chania) of in-house production facilities, such Beyond research activities, the Lab also which collaborates actively in interna- as MINOTECH biotechnology, which exploits the research results towards tional projects and supports the mod- served as the in-house biotechnology generating innovation and developing ernization of the agricultural sector.46 production facility of the Institute of earth observation-based services for the Molecular Biology and Biotechnology Hellenic Ministry of Environment, the Research commercialization of FORTH (IMBB-FORTH).49 Region of Crete, the Municipality of Her- Several companies have emerged as aklion, the French Bureau de Recherches the result of technological develop- Startup culture. As of March 2024, Géologiques et Minières and the Hellenic ment of research results (spin-offs). Heraklion had 33 startups listed in Start- Electricity Distribution Network Oper- To date, FORTH’s Technology Transfer up Greece, with a reported total funding ator S.A.45 Such collaboration between Office has realized 17 spinoff compa- of €12 million. Startup specialties span academia and public and private sector nies, 105 patents and 567 active re- agritech/foodtech, advertising and mar- propels Heraklion’s potential to activate search projects.47 48 The presence and keting, data analytics (big data), defense, at the frontier of climate-based policy- active orientation of these spinoffs to- EduTech, enterprise software, life scienc- making at the city-level. wards research programs with partners es (MedTech, HealthTech, BioTech), and Box 1: Spin-off feature - BIOPIX DNA TECHNOLOGY P.C. BIOPIX DNA TECHNOLOGY P.C. (BIOPIX-T) was founded in 2019 through collaborators of the Biosensors Lab of the Institute of Molecular Biology and Biotechnology (IMBB) at FORTH. It was established with the aim of becoming a Medical Device Designer and Manufacturer of portable molecular diagnostic devices for Point-of-Care and Home testing. Its proposal to the EU’s COVID-19 response call was one of the 23 out of 454 proposals which received funding alongside its collaborating partners.49 In 2021, it launched PEBBLE, a small- size and lightweight point of care diagnostic system that allows the molecular rapid detection of infectious diseases (such as COVID-19 and Influenza A) at the point of care or need. From the market entry of the PEBBLE and the compatible test kit for COVID-19, in October 2021, until October 2022, more than 150 devices have been sold and more than 40,000 tests have been successfully performed. In 2022, BIOPIX-T was named a star venture by the EBRD. The firm has attracted €1.97 million in funding, €520,000 of which from EU funds, and the rest from venture capital firms and private investors. It has since re- ceived significant media and commercial attention and draws international distributors, and has signed agree- ments with a South African Medical Company for the manufacturing and distribution of its products throughout the Sub-Saharan region. Source: Elevate Greece, 2024. Registry. https://registry.elevategreece.gov.gr/company/biopix-dna-technology-ike/ 44 Remote Sensing Lab, 2024. Home page. https://rslab.gr/ 45 Ibid. 46 The Department spans 7 laboratories: Viticulture, Genetic - Genomic Resources and Plant Biotechnology, Entomology and Agricultural Zoology, Virology, Vegetable Crops, Mycology and Nematology, with one researcher per laboratory and the essential infrastructure. 47 FORTH Technology Transfer Office. https://ttoforth.gr/?lang=en 48 Some examples include OramaVR and JustAddBio. Other companies, such as BioMimetic, BioPix-T and EnzyQuest secured significant funding in the midst of a pandemic (with the last two emerging to fight the pandemic). 49 Partners to this proposal and responsible for the clinical validation of the test kits for COVID-19 and INFLUENZA A were the University College London Hospitals NHS Foundation Trust UK, Institut National de la Sante et de la Recherche Medicale France, and Universite Libre de Bruxelles in Belgium. 17 Economic Profile: Municipality of Heraklion manufacturing, among others.50 Several web hosting solutions, was acquired startup companies such as Deeplab, by was acquired by Belgian-based Oxygen Pelatologio, OpenIchnos, Hotel team.blue, a leading digital enabler for ToolBox and StinPorta.gr have been de- businesses and entrepreneurs across veloping significantly in recent years, Europe.53 In 2023, Cisco acquired Code while recently new startups have ap- BGP, spinoff of the Institute of Computer peared (Tourmie, Oqullar etc.) which Science - FORTH’s technology incubator have received distinctions in national (Box 2).54 Recently, Sunlight.io, a British- innovation competitions.51 The large based company with its engineering number of companies activating in the department in Heraklion, announced technology sector also enables the city’s its local expansion, backed by €6 million digital transformation, playing a critical in venture capital funding.55 The expan- part in the ecosystem.52 sion comes after a steady collaboration between Sunlight and STEP-C technol- In recent years, some significant ac- ogy Park, which have participated in a quisitions and investments by foreign series of joint R&D projects in addition technology companies have taken to Sunlight renting office facilities in the place particularly in the technology Tech Park itself. Meanwhile, the Swedish sector. In 2021, Enartia, a Heraklion- fintech startup Fairlo has also started based digital startup whose brands are building its own tech hub in Heraklion, among the top performers in the do- which is developing rapidly.56 main name industry and also provides Box 2: Spin-off feature - Code BGP Code BGP was launched in 2019 as a spin-off within FORTH’s tech- nology incubator, within the STEP-C Technology Park. Its technology helps automate the processes that network administrators perform to increase control over their networks and achieve lower operating costs and greater security. Its solutions provide security for own network use and, by extension, for the Internet itself. The company raised $1.5 mil- lion in a seed funding round in June 2021 and was later acquired by Cisco. According to the issued announcement, CodeBGP’s technology will be integrated into Cisco’s ThousandEyes web analytics software in order to expand its services and create a better and safer Internet. Source: Science & Technology Park of Crete (STEP C), 2023. Cisco acquires Code BGP, FORTH’s technology incubator. https://www.stepc.gr/en/cisco- acquires-code-bgp/ 50 Elevate Greece, 2023. Registered Startup database. https://elevategreece.gov.gr/startup-database-dashboard/ 51 Bizrupt, 2023. Heraklion: an emerging ecosystem of entrepreneurship and innovation. https://bizrupt.gr/en/heraklion-emerging- ecosystem-entrepreneurship-innovation/ 52 Intelligent Cities Challenge. Heraklion: Intelligent City Transformation Overview. https://www.intelligentcitieschallenge.eu/sites/default/ files/2023-04/ICC_Final%20deliverable_Heraklion_0.pdf 53 Team.blue, 2021. team.blue acquires Enartia in Greece, https://press.team.blue/197797-team-blue-acquires-enartia-in-greece 54 Science & Technology Park of Crete (STEP C), 2023. Cisco acquires Code BGP, FORTH’s technology incubator. https://www.stepc.gr/en/ cisco-acquires-code-bgp/ 55 Bizrupt, 2023. Heraklion: an emerging ecosystem of entrepreneurship and innovation. 56 Papaki is the top domain registrar in Greece for .GR and .EU sites, making the company a leader in domain name services. 18 Economic Profile: Municipality of Heraklion Business and Economic Support Infrastructure The business support infrastructure Chamber of Heraklion of Crete signed a Training delivery in a variety of topics, of Heraklion is well-developed. Aside Memorandum of Cooperation between and business development in key sec- from research institutions, Heraklion the Athens University of Economics and tors such as tourism.59 The TIHC works benefits from the presence of dynamic Business (OPA).58 The Memorandum in close collaboration with Heraklion business chambers and startup incuba- sets the path for the development of Chamber and in cooperation with the tors. Heraklion also has several co-work- joint initiatives for commercialization Technological Educational Institute of ing spaces, some of which also serve and dissemination of research results Crete, the University of Crete, and The as event hubs (Pom, Comeet, Office12, produced by the University and will Science and Technology Park of Crete. CoLab and others). The city’s technolo- support and promote innovative entre- TIHC employs 18 highly educated per- gy and entrepreneurship communities preneurship at the University. Activities sonnel with 500 teaching staff. The TIHC have also grown in recent years, with include cooperation in specialized train- delivers around 60,000 trainee-hours meetups among developers, startups ing actions, workshops, conferences per year on 120 different educational and innovative businesses, constituting and educational programs focused on programs. It has offered courses on a among the largest communities of the start-up entrepreneurship, modern range of topics, such as cyber security city and the island, providing mediums technologies and innovation; network- (in partnership with the European Union for the exchange of ideas and knowl- ing actions and provision of services Agency for Cyber Security – ENISA). edge around new technologies and with the aim of exchanging knowledge entrepreneurship.57 according to the needs of the HUB and The Science and Technology Park of the Technology and Innovation Transfer Crete (STEP-C) and STEP-C incubator. The Heraklion Chamber of Commerce Unit (ACEin) of the OPA. The Science and Technology Park of Crete and Industry comprises over 20,000 (STEP-C) was founded in 1993 by the business members from all sectors Technical Institute of Heraklion Cham- Foundation for Research and Technology of the local economy. In supporting ber (TIHC). Since 1950, the Heraklion – Hellas (FORTH), one of the largest re- the extroversion actions of its mem- Chamber of Commerce has established search organizations in the country. The ber businesses, the Chamber organiz- the Technical Institute of Heraklion Park has a total of 2000 sq.m floor space es and participates in exhibitions and Chamber (TIHC), the daughter company with more than 100 offices and labs, ac- B2B business meetings. Over the years, of the Chamber which serves a variety commodating small technological and the Chamber has organized events of purposes, from serving as a partner service companies in two buildings, at a across a spectrum of areas, such as the in activities in EU projects, to provid- privileged physical location.60 The STEP-C HORECA sector. In November 2023, the ing certified Vocational Education and and PRAXI Network are the main units of 57 Bizrupt, 2023. Heraklion: an emerging ecosystem of entrepreneurship and innovation. 58 HUB 2, 2023. MEMORANDUM OF COOPERATION between the Athens University of Economics and Chamber of Heraklion of Crete. https://www.h2bhub.com/el/nea/mnhmonio-synergasias-metaxu-oikonomikou-panepistimiou-athinon-kai-epimelitiriou-hrakleiou-kritis/ 59 In 2001 TIHC was certified as a peripheral Vocational Training Centre for the Region of Crete in the following sectors: Informatics, Tourism & Services sector, Economy & Business Administration and Transportation & Technical Professions. 60 FORTH, 2024. Science and Technology Park of Crete. https://www.forth.gr/index_main.php?c=5 19 Economic Profile: Municipality of Heraklion FORTH for the promotion of research, in- ers expertise and leadership on local entrepreneurship programs, Foundit novation and entrepreneurship.61 Since and regional development actions and VentureGarden Heraklion, and par- 1995, over 60 start-up companies have to both private and public sector, by ticipates in ReCCI-Digent, an Erasmus+ been supported to grow and develop means of programmes and projects project to develop business and digital their own business ideas in the Incuba- financed by European and national skills for professionals in the Cultural tor.62 Currently, it has an occupancy of 37 funds. It convenes the municipalities and Creative Industries. tenants which are given the opportunity of Heraklion, Archanon Asteroysios, to participate in a wide range of business Viannos, Malevizios, Minoa Pediadas, ABC Hub. The ABC Hub is an incuba- and R&D networks in order to conduct Chersonisos, Gortynas, Faistos. HDA is a tor which activates with private sec- new research projects, get access into significant instrument and a point of ref- tor support from Google and Amazon new knowledge bases and develop joint erence when it comes to interventions and offers participants mentorship, a business endeavors. In addition, STEP-C for rural, social, and entrepreneurial working space, and tailored support.66 implements several RTDI projects, fi- development. Following a 3-month period of support nanced by the EU, national or regional for new startups, the Hub assists in the funds, in the areas of Management and The H2B HUB provides entrepreneurial formation of strategic partnerships and Exploitation of Intellectual Property, Re- education and training for the startup fundraising. gional Innovation, Academic Entrepre- ecosystem of Heraklion. It aims to help neurship, Tourism, Renewable Energies drive the development of disruptive Land & infrastructure etc.63 technology, research and innovation, and provide advising and support in the start- Port infrastructure and waterfront de- Exporters’ Association of Crete. The up journey. The hub provides training velopment. Heraklion’s port infrastruc- Exporter’s Association was founded in (virtually and in person), workshops, and ture constitutes critical geopolitical im- Heraklion in December 1994 by private networking opportunities. H2B Hub is portance, adjacent to important energy sector actors with the collaboration supported by the University of Crete, the facilities and resources, as well as trans- and support of the Region of Crete, the Foundation for Research & Technology port routes. Heraklion also has the big- Hellenic Foreign Trade Board (HEPO), Hellas, the Technological Educational gest port on the island in regard to cruise the Exporters’ Association of Northern Institute of Crete and the Heraklion passenger numbers, with 307,043 arriv- Greece (S.E.V.E.) and the Chambers of Chamber of Commerce and Industry. als in 2019.67 More than 1.7 million pas- Crete.64 It counts over 160 Cretan export- sengers arrived by ferry in the same year, ing businesses, which activate in the sec- Bizrupt. Founded in 2017, Bizrupt is either for tourism or other purposes. The tors of foods & beverages, manufacturing a non-profit organization which aims port has an annual passenger capacity of of industrial products and construction to create a strong ecosystem of inno- up to 0.5 million for cruise tourism, host- materials, agricultural products, natural vation and entrepreneurship across ing up to 5 cruise ships at once. As part cosmetics, and more. Greece.65 Its team designs and imple- of the ongoing privatization of Greece’s ments actions in areas far from the ports, a 67 percent stake in the port has Heraklion Development Agency country’s largest urban centers, which been acquired by a consortium led by S.A. Launched in 1989, the Heraklion have limited access to programs, train- the Italian shipping company Grimaldi Development Agency is a business ings and support for new ideas. Bizrupt Group in December 2023, for a total support organization which deliv- currently implements two integrated of about $80 million.68 69 Through the 61 Science and Technology Park of Crete, 2023. About Us. https://www.stepc.gr/en/stepc/about-us/ 62 FORTH, 2024. Science and Technology Park of Crete. 63 Ibid. 64 Exporters’ Association of Crete. Goals. https://www.crete-exporters.com/en/targets/ 65 Bizrupt, 2023. Home page. https://bizrupt.gr/en/home/ 66 ABC HUB, 2024. Startup incubator based in Crete, Greece | ABC Hub. https://abchub.io/ 67 Global Sustainable Tourism Council, 2022. Destination Assessment of Heraklion. https://www.gstcouncil.org/destination-assessment-of-heraklion/ 68 The Grimaldi Group is the parent company of Minoan Lines. 69 The Maritime Executive, 2023. “Grimaldi Buys Majority Stake in Port of Heraklion.“ https://maritime-executive.com/article/grimaldi-buys-majority-stake-in-port-of-heraklion 20 Economic Profile: Municipality of Heraklion Hellenic Republic Asset Development parking spaces with building blocks PVs) and only 0.01% from small hydro.72 Fund (HRADF), the Greek state retains a with a total area of 29,000 sq.m., which Crete possess a wide range of renew- 33% stake in the port authority’s opera- include recreational and cultural areas, able energy sources and technologies: tion and development. The vision of the administrative buildings, a hotel unit and 25 wind farms (200,2 MW), 480,000m2 port’s development includes strength- shops.71 The green spaces reach 13,500 of solar thermal Systems, photovolta- ening passenger, cruise and freight busi- sq.m., the theme parks approach 13,500 ics (105 MW), solar (shallow) geother- nesses, and transforming Heraklion’s har- sq.m. while the free spaces, including the mal systems, biomass (thermal energy bor into a green port.70 transport infrastructures, reach 145,000 from the olive kernel), 3 biogas installa- sq.m. For the road connection of the tions, and possess significant capacity In the coming years, the city also aims port, a new pedestrian bridge of 180m for further renewable energy growth.73 to develop the waterfront around length is planned. Moreover, significant progress is expect- Pankritio Stadium into a modern ma- ed over 2023-28 through the project rina with several accompanying proj- Energy. Currently, most of the electricity Crete Valley” renewable energy project, ects and supporting structures, which in Crete is produced from fossil fuels that which will support the island of Crete in would change the western coastal front are transported from the mainland, while its ambition of becoming entirely energy and potentially boost development dy- renewable energy sources represent sustainable by 2028 (Box 3).74 75 76 namics in the area. The project covers 80 21.6% of the overall energy production: acres and foresees 1000 berths and 1500 17% wind turbines, 4.6% solar (mainly Box 3: “Crete Valley” renewable energy project The EU-funded CRETE VALLEY project is dedicated to establishing a renewable energy valley (REV-Valley) on Crete. The project aims to showcase an innovative energy landscape tailored to meet the local community’s energy needs, leveraging various renewable energy sources and storage technologies. As part of this initiative, a living lab (REV-Lab) consisting of four community-centred renewable energy labs will be established; this in- novation hub will emphasise a commitment to sustainable and community-oriented energy transformation. The total cost of the project is €25.25 million, of which €19.96 million is funded by the Horizon Europe programme (Horizon 2.5) over 2023-2028. Leveraging the island’s considerable renewable energy potential, the project supports the Crete in its am- bition of becoming entirely energy sustainable by 2028.74 By then, Crete will host the first Renewable Energy Valley ‘Living Lab’ (REV-Lab) in Europe, bringing together four different innovation hubs which will enable the is- land to meet its energy needs through a combination of renewable energy sources.75 Beyond core energy produc- tion and conservation projects, the Cretan Renewable Energy Valley will seamlessly integrate innovative IT and Communication Technology systems, open digital solutions, social innovation processes and strong business models. To date, over 70 EU projects have been completed towards achieving energy saving in public and private buildings and industry, energy innovation and technology transfer, and energy planning for local authorities.76 Source: https://cordis.europa.eu/project/id/101136139 70 The Maritime Executive, 2023. 71 CNA News, 2018. A marina with a capacity of 1,000 boats and a hotel is planned in Heraklion. https://www.cna.gr/crete/marina-me-choritikotita-1-000-skafon-ke-me-xenodochio-schediazete-sto-iraklio/ 72 European Turbine Network, 2024. “ROBINSON“. https://www.robinson-h2020.eu/the-islands/crete/ 73 Conference of Peripheral Maritime Regions, 2024. CRETE VALLEY: A new project to pioneer the first Renewable Energy Valley in Europe. https://cpmr.org/energy-climate/crete-valley-a-new-project-to-pioneer-the-first-renewable-energy-valley-in- europe/36923/#:~:text=Currently%2C%20Crete%20disposes%20nearly%20all,Affairs%20in%20the%20Crete%20Region 74 EU-funded project CRETE VALLEY. 75 Conference of Peripheral Maritime Regions, 2024. CRETE VALLEY: A new project to pioneer the first Renewable Energy Valley in Europe. 76 Fedarene, 2024. “Crete’s Clean Energy Transition Roadmap.“ https://fedarene.org/best-practice/cretes-clean-energy-transition-roadmap/ 21 Economic Profile: Municipality of Heraklion Road infrastructure. Heraklion is situat- is being built 35 kilometers away from Construction activity ed along the Greek National Road, which the current airport of the city, with total is the longest National Highway on the investment costs of €500 million.78 The Private construction constituted 99% island of Crete and runs along the north terminal building will have the capacity of all licenses granted for construction coast of the island.77 It connects the lo- to accommodate between 57,500 and activity over 2015-2022. Following a calities of Kissamos, Chania, Rethymno, 65,000 passengers a day initially.79 The drop from 2015 to 2016, the yearly num- Heraklion, Agios Nikolaos and Siteia in new airport, which expected to enter ber of construction permits grew con- the east. Motorway 90 connects to ma- into commercial operation in 2027, will sistently thereafter until 2022, when it rine ports Kavonisi, Kissamos, Chania, initially be able to handle 11 million pas- dropped slightly once more compared Rethymno, Heraklion, Agios Nikolaos sengers per year, with a maximum han- to 2021. In terms of built space, private and Sitia, as well as the airports of dling capacity of 18 million passengers constructions represented 98% of total Chania, Heraklion and Sitia and will also per year. permitted constructions over the pe- connect to the new Heraklion airport at riod in terms of square meters built.81 Kasteli. Heraklion also possesses significant Permits granted within the municipality sports facilities. The city was one of the of Heraklion represent slightly over 10% Air transport. Heraklion’s International host cities of the 2004 Olympic Games of the total of Crete, which had 2,026 Airport “Nikos Kazantzakis” is the pri- and host of the Mediterranean Beach permits granted in 2022.82 mary airport on the island of Crete. Games in 2023.80 Heraklion also hosted Despite having a single runway, the the FIBA Men’s U19 World Basketball Over 2015-2022, most new licenses for airport serves 6 million passengers Championship twice, in 2015 and in new shops and shop improvements per year. While traffic is highly season- 2019. Significant infrastructures include were in the commercial category of al, it offers year-round daily flights to Pankritio Stadium (capacity of 26,240 use (accounting for 33% of permits Athens, Thessaloniki and several other seats), Theodoros Vardinogiannis granted over the period), followed by international destinations. A new inter- Stadium (capacity of 9,008 seats), and industrial (21%), and others (16%). national airport of Heraklion (Kastelli) several smaller stadiums and arenas. Office spaces represented half of licens- Figure 15: Number of licenses granted for legal construction activity (2015-2022) 400 332 334 307 310 303 307 300 269 272 203 205 200 165 166 147 151 131 132 100 0 2015 2016 2017 2018 2019 2020 2021 2022 Private Total Source: ELSTAT, 2023. 77 Northern Crete Highway: Greek: Βόρειος Οδικός Άξονας Κρήτης, VΟΑΚ. 78 The construction of the airport will be financed through €180 million in funds from the state government, as well as financing of €220 million from the European Investment Bank (EIB). 79 New International Airport Heraklion Crete SA, 2024. The New Airport. https://www.heraklion-airport.gr/en/the-new-airport/ 80 Heraklion 2023 Mediterranean Games. Venues & Map. https://heraklion23.gr/venues-map/ 81 Data received from ELSTAT. 82 ELSTAT, 2023. Greece in figures - October - December 2023. https://www.statistics.gr/documents/20181/18074233/ GreeceinFigures_2023Q4_EN.pdf/1e72c05a-0802-1b9d-aca0-dbcb5be5d355 22 Economic Profile: Municipality of Heraklion Figure 16: Licenses granted for new shops and shop improvements by category use (2015-2022) 100 80 60 40 20 0 2015 2016 2017 2018 2019 2020 2021 2022 O ce Industrial Commercial Educational Healthcare Hotels Other Agricultural Destination unknown Source: ELSTAT, 2023. Figure 17: New shop and shop improvements by use category (volume, m³, 2015-2022) 250,000 200,000 150,000 100,000 50,000 0 2015 2016 2017 2018 2019 2020 2021 2022 O ce Industrial Commercial Educational Healthcare Hotels Other Agricultural Destination unknown Source: ELSTAT, 2023. es granted for new shops and shop im- Industrial land, office combined with increased supply chain provements in 2015, dropping to nearly space, real estate needs, plots within the industrial areas zero over 2015-2020, and rising to 14% development of Heraklion are nearly sold out and the of permits in 2021 and 13% in 2022. last plots are sold at very high prices.83 Heraklion has a limited supply of in- The regional unit of Heraklion registers In terms of built area, industrial spaces dustrial space. Heraklion has two main an average annual percentage demand represented the most common use cat- industrial areas, the Industrial Zone for industrial land of 4.49% and faces egory of construction permits for new (ΒΙΠΕ) of Heraklion and the Industrial 20.26 years until the depletion of its shop and shop improvements (30%), Park, ΒΙΟΠΑ ANOPOLIS. As demand for available industrial land. Though prior followed by commercial spaces (20%) new industrial spaces in the island is studies had underestimated the need and hotels (19%). rising as the economy is progressing, for the exhaustion of available land in 83 Ministry of Development & Investment (Directorate for Industrial Policy), 2021. Technical Report: Business Parks. Page 131. Available at: https://www.ggb.gr/sites/default/files/basic-page-files/%CE%A4%CE%95%CE%A7%CE%9D%CE%99%CE%9A%CE%97%20%CE%95%CE%9A %CE%98%CE%95%CE%A3%CE%97_%CE%95%CE%A0_2020.pdf 23 Economic Profile: Municipality of Heraklion the Heraklion Biopark and the high de- central units to €47.30 per sq.m.88 Given entertainment, recreational, restaurant mand documented by the Heraklion the supply constraints, the Cretan office facilities and parking areas. Biopark Management Body, conclusions market is focusing on the use of average from the studies of the Directorate for quality spaces, which will be used in Active and ongoing domestic invest- Industrial Policy (Ministry Development their current conditions or will be reno- ment in the hospitality and tourism & Investments) on the current geospa- vated by the user/investor.89 sector is underway in and around tial distribution of industry indicated Heraklion, with a focus on 4-star and that Heraklion may need a new Type A Significant commercial developments 5-star hotel units. In 2022, Cretan Business Park of 1,060 acres.84 are being planned in and around Investment Group Hellas acquired the Heraklion. In the Aorakia area of the Village Resort & Waterpark in Heraklion Commercial and office space. As of Municipality of Alikarnassos near the regional unit for €42.37 million. Located 2023, retail market vacancy rates in existing “Nikos Kazantzakis” airport, in Spilios of Hersonissos, about 25 kilo- Crete are beneath 5% for prime loca- private developers (Fourlis Group and meters east of Heraklion, the hotel has tions and around 17% for secondary Ten Brinke) are planning to develop 275 rooms, a theater, a waterpark, 3 locations.85 The most commercial areas a 40-acre plot into a new retail park swimming pools and a football field.93 in Heraklion include Daidalou street, comprising 14,000 square meters of Meanwhile, the Metaxa Hospitality 1866 street and Liontaria Square, where built space, with total leasable surface Group based in Heraklion submitted monthly rental values can vary from amounting to 10,600 square meters.90 a project for the development of the 50-70€ per sqm.86 According to avail- The existing airport is also expected to luxury hotel Cape Tholos in Kavousi of able data, Heraklion, like the rest of be reconverted into an alternative use. Ierapetra (in the southeast of Crete), Crete, lacks Grade A office spaces, which Another significant commercial invest- which has been included in the Strategic leading to uptake of Grade B offices in ment to Heraklion is the Cultural and Investments of Enterprise Greece under prime and secondary locations.87 Spatial Commercial Recreational Park, with Fast Track Law 3894/2010.94 95 concentration of office space dispersed a budget of over €450 million.91 The across the city, while several larger of- investment, undertaken by Vita Proti The hospitality sector has also been fice buildings have been built outside S.A.,92 foresees the construction of an increasingly attracting foreign inves- the city. Monthly rental prices for of- innovative Cultural and Commercial tors.96 97 In 2021, U.S. investment fund fice spaces throughout the city tend Recreational Park, including a museum, Hines acquired the Out of the Blue to range from €4.16 per sq.m. for less a complex of Cretan products shops, Capsis Elite Resort in Crete’s Agia Pelagia 84 Ministry of Development & Investment (Directorate for Industrial Policy), 2021. Technical Report: Business Parks. Page 131. 85 Danos-Melakis, 2023. S2 2023 MARKET INSIGHT REPORT: CREETE MARKET REPORT. 86 Danos-Melakis, 2023. S1 2023 MARKET INSIGHT REPORT: CREETE MARKET REPORT. https://www.danos.com.cy/wp-content/uploads/2023/ Crete%20S1%202023%20Market%20Report/mib_crete_s1_2023.pdf?_t=1691234700 87 Grade A office spaces are modern premises that offer top-notch amenities and facilities, along with advanced infrastructure and a central location. 88 Review of real estate listings as of February 2024. 89 Danos-Melakis, 2023. S1 2023 MARKET INSIGHT REPORT: CREETE MARKET REPORT. 90 Bizness.gr, 2024. Green light for the new retail park in Heraklion, Crete - Which companies are investing. https://bizness.gr/prasino-fos-gia-to-neo-retail-park-sto-irakleio-kritis-poies-etaireies-ependyoyn/ 91 Enterprise Greece, 2019. The investment and trade landscape in Greece. https://www.unescwa.org/sites/default/files/event/materials/greece_inspire_piraeus_port_eg.pdf 92 Beta Proti Ktimatiki Eteriou Northern Greece S.A. 93 Aura Real Estate Experts, 2022. Cretan Investment Group Hellas acquires the Village Resort & Waterpark in Heraklion. https://www.auraree.com/greece/real-estate-news/cretan-investment-group-hellas-acquires-the-village-resort-waterpark-in-heraklion/ 94 https://www.metaxahospitality.gr/development/ 95 Enterprise Greece, n.d. INVESTMENT PLAN SUBMITTED FOR SI. https://www.enterprisegreece.gov.gr/en/invest-in-greece/strategic- investments/investment-projects/submitted-projects/vita-proti-s-a-construction-and-operation-of-an-innovative-cultural-and-commercial- recreational-park-in-prefecture-of-heraklion-crete 96 Enterprise Greece, 2021. Foreign investors focus on Crete hospitality, tourism sector. https://www.enterprisegreece.gov.gr/newsletters/newsletter-articles/foreign-investors-focus-on-crete-hospitality-tourism-sector/ 97 Ibid. 24 Economic Profile: Municipality of Heraklion (30 minutes from Heraklion) for €125.2 lion, to include a luxury hotel, a housing in selected business activities.104 The aid million, after acquiring five hotels on the complex, a shopping mall, and a casi- schemes of the Investment Incentives island in 2020.98 In the same year, U.S. no.102 Previously, developers bought Law include: i) tax exemptions; ii) cash investment fund Blackstone acquired the former USAF installation outside grants; iii) Leasing subsidies; iv) wage the Elounda Blu hotel (located approx- Heraklion to transform the property costs subsidy; v) stable corporate tax imately one hour from Heraklion) and into ventures like the Cretaquarium, rate for 12 years; vi) financing of busi- Russian developer Mirum announced it which first opened in 2005.103 ness risk through loans or equity; vii) was beginning work on its Elounda Hills fast track licensing.105 resort project.99 Investment incentives and opportunities Municipal investment In 2023, the former U.S. military base priorities of Gournes, a seaside plot with a sur- At the regional level, under the face area of 345,567 sq.m, located Investment Incentives Law 4399/2016, 2014-2020 Investment Priorities. Over 13 km from the Nikos Kazantzakis Crete enjoys attractive investment in- the 2014-2020 programming peri- Airport and 16km away from Heraklion, centives varying from 25% to 45% of od, EU co-funded projects within the was acquired by the Greek/Romanian the total investment cost, according to Municipality of Heraklion were primarily developers Real Estate Development the area and the size of the company. dedicated to strengthening its compet- and Services (REDS S.A). for €42.2 mil- The Law focuses on supporting sustain- itiveness and research and innovation lion.100 101 REDS is expected to implement able investment, projects with efficient and addressing environmental infra- investments worth more than €210 mil- tax breaks, favorable loans and state aids structure (Table 7). Significant projects Table 7: Major development areas co-funded by the EU over the 2014-2020 programming period Thematic Objective Budget Contracts Payments Environment € 57,183,817 € 29,725,970 € 13,503,925 Research and Innovation € 47,594,371 € 42,789,669 € 15,434,715 Competitiveness € 46,780,923 € 44,955,288 € 23,682,030 Social Inclusion € 19,856,673 € 19,527,687 € 16,678,258 Employment € 14,159,150 € 14,159,150 € 7,399,153 Information and Communication € 8,196,049 € 8,175,287 € 4,004,665 Eco - Economy € 5,761,886 € 2,440,779 € 2,097,961 Climate Change € 5,661,710 € 3,090,380 € 1,464,998 React EU ** € 5,445,026 € 5,445,026 € 3,791,050 Education € 4,864,093 € 2,671,143 € 2,540,814 Without Thematic Objective (Technical Assistance) € 95,976 € 94,756 € 88,639 Source: https://anaptyxi.gov.gr/en-us/ (last visited: September 4, 2023) 98 Ibid. 99 NavInvest Greece, 2021. Hotel Investment Partners announces acquisition of Elounda Blu Hotel. https://www.navinvestgreece.com/post/hotel-investment-partners-announces-acquisition-of-elounda-blu-hotel 100 HRADF, 2023. Former U.S. Base in Heraklion. https://hradf.com/en/former-u-s-base-in-heraklion/ 101 Enterprise Greece, 2021. Foreign investors focus on Crete hospitality, tourism sector. https://www.enterprisegreece.gov.gr/newsletters/newsletter-articles/foreign-investors-focus-on-crete-hospitality-tourism-sector/ 102 Ekathimerini, 2023. “TAIPED and REDS sign deal on Gournes.“ https://www.ekathimerini.com/economy/1204804/taiped-and-reds-sign-deal-on-gournes/ 103 Argophilia Travel News, 2021. “REDS Wins Bid for Former U.S. Military Base on Crete.“ https://www.argophilia.com/news/reds-wins-bid-for-former-u-s-military-base-on-crete/230411/ 104 Enterprise Greece, 2020. “Crete Investment Profile.” https://www.enterprisegreece.gov.gr/images/public/pdf-files/region-profiles/Crete.pdf 105 Ibid. 25 Economic Profile: Municipality of Heraklion include the rehabilitation of its water For the 2021-2027 programming pe- stage) is that of the waterfront near the supply, restoration of various segments riod, the city is aiming to strengthen Pankritio Stadium into an internation- of its Venetian walls, energy efficiency its position as a sustainable, cultural, ally competitive tourist port with pio- projects and upgrading to renewable tourism destination. The city is actively neering nautical facilities and modern energy sources. Heraklion’s Smart City participating in the Global Sustainable leisure tourism infrastructure. Strategy helped the city land significant Tourism Council project which identifies investments in digital infrastructures key risks to the municipality and sets and circular waste projects.106 Funding the foundation for a road map for sus- for local economic development includ- tainable tourism development. In the ed an open mall and projects to support future, another potential development the local fishing industry. (which currently remains at an early 106 EU funds were also solicited to support circular waste processing projects (green composting and exploitation of liquid waste to support microalgae cultivation and biodiesel and aquafeed production. 26 Economic Profile: Municipality of Heraklion Development Opportunities Key sectors of focus and potential Tourism form the city from a “place to transfer” growth for the city include tourism, to “a place to stay.”107 In this regard, the ICT and biotechnology. Tourism has In recent years, the city aims to develop new services, pro- been on an upward trajectory and is municipality has been cesses, and business approaches for expected to grow in the next years, increasingly focused SMEs in the tourism sector, enhance backed by the realization of strategic on strengthening its sustainable tour- touristic experience through digital infrastructure projects (airport, port) ism profile. Strategic efforts in this re- services and applications, and support which are expected to expand tourism gard include connecting the city to the the tourist sector through Open Data & offerings across target segments and Archaeological site of Knossos, devel- smart apps.108 improve the value added of the tourism opment of the new airport which will sector. Significant infrastructures and significantly expand passenger capaci- Heraklion has also been increasingly stakeholders are in place to facilitate in- ty, port development, and the potential developing its gastronomic tourism creased tourism, with two major airlines future development of the marina near profile.109 With the Cretan diet being and a cruise-style ferry line headquar- Pankritio Stadium, among others. To renowned nationally and interna- tered in the city. Meanwhile, Heraklion further improve its touristic offering, the tionally, Heraklion has been working also shows remarkable potential in re- city has restored and developed various to refine and leverage its profile as a search and innovation, demonstrated segments of its Venetian walls as a tour- gastronomic hotspot and its recent- by its top-tier research centers which ist attraction. By improving the touristic ly earned designation as a UNESCO lead projects across Europe, as well as offerings of the city, the Municipality World City of Gastronomy, awarded in its increasing business and economic aims to route tourism to the island, and 2023.110 For the past 5 years, it has held support infrastructure, which helps lead particularly overnight tourism, towards “Heraklion-Gastronomy Days” at the to successful research commercializa- the city of Heraklion. The region also historic Venetian Harbor, co-organized tion particularly in the fields of ICT and aims to increase the value added of by the Municipality of Heraklion, the biotechnology. Recent developments tourism to the area and attract higher Heraklion Development Organization, in these sectors are described further spending per tourist by developing in- and the Heraklion Port Authority. The below. frastructures to accommodate luxury festival aims to highlight Heraklion as travel. In coming years, the city is also a distinctive gastronomy destination prioritizing smart tourism solutions to and honor the rich culinary heritage of enhance visitor experience, promote Crete. In 2019, the festival drew over the city’s tourist identity, and to trans- 13,000 registered visitors, 24 participat- 107 Intelligent Cities Challenge, 2023. Heraklion: Intelligent City Transformation Overview. 108 Ibid. 109 There are three more main wine‐producing areas in Crete: Arhanes and Dafnes in Heraklion Prefecture and Sitia in Lasithi Prefecture. Smaller quantities of wine are also produced in the Prefectures of Chania and Rethymno. 110 Greek City Times, 2023. Heraklion is now a UNESCO World City of Gastronomy! https://greekcitytimes.com/2023/11/03/heraklion-unesco- city-gastronomy/ 27 Economic Profile: Municipality of Heraklion ing companies, and 3,000 taste tests, December 2020, Heraklion underwent of-the-art technologies to identify and with the participation of 65 chefs, cooks a Destination Assessment by the Global solve city challenges with demonstra- and teams and 20 co-organizers. Recent Sustainable Tourism Council (GSTC) to ble results, leading to the reduction of efforts have also been underway within identify key risks and set the foundation biowaste by 4,258 tons in 2022 and an the municipality to further strengthen for an action plan for sustainable tour- increase of 2,000 tons in composted the linkages between tourism and ag- ism in the area.116 food waste.119 riculture as part of funded projects.111 Moreover, a number of agro-resorts, In recognition of the contribution ICT farms, and lodges and working farms tourism to food waste, Heraklion has are in operation or under development undertaken a series of innovative Heraklion’s tech and near Heraklion.112 measures towards sustainable urban biotech sectors are tourism, circular economy, and food supported by a strong Heraklion is also attracting increasing waste management.117 Funded by the innovation ecosystem which fosters attention as a wine destination. The Urban Innovative Actions initiative, the technology transfer and entrepre- city and surrounding area have strong A2UFood project includes food waste neurship. It benefits from the presence potential in the sector: approximately reduction (via awareness-raising, dig- of international firms, higher education- 20% of Greek wine production comes ital applications for the public and the al institutions, accelerators, incubators, from Crete, and the Heraklion regional hospitality sector to promote respon- and a high concentration of startups. unit is home to more than two-thirds sible shopping and consumption) The city has invested heavily in ICT in- of Crete’s vineyards and accounts for and food waste reuse (via composting frastructure over the years, and the almost 80% of the island’s wine pro- and development of bioplastics).118 specialization of the economy and the duction.113 There are four Protected The project, supported by €3.13 mil- workforce, and strong cooperation with Designation of Origin areas in Heraklion lion in funding, involves the collab- educational institutions and FORTH has and 7 vineyards within a 45-minute oration of a number of stakeholders led to positive results in the sector. In driving distance from the airport.114 which include the laboratories of the recent years, Heraklion has seen inward Department of Materials Science and investments via the expansion of inter- The city also plans to improve its tour- Technology of the University of Crete national technology companies as well ism sustainability and address its det- (UoC), the United Association for Solid as acquisitions in the technology sector, rimental effects on local infrastructure. Waste Management in Crete (ESDAK), which fuel growth expectations into As of 2020, Heraklion is a participant in Harokopion University of Athens the future. Research in the tech sector the Sustainable Tourism network of the (HUA), and the Hellenic Mediterranean is actively continuing; the Institute of Urban Agenda for the EU Partnership, University (HMU), among others. The Computer Science has over 80 ongoing which contributes to the formula- project presents a strong example of projects with a heavy concentration in tion of EU policies and actions.115 In Heraklion’s implementation of state- leveraging artificial intelligence within 111 One example is the Urban Innovative Actions program “A2UFood project” on food waste. 112 https://www.argophilia.com/news/cretes-potential-as-an-agrotourism-destination-is-unmatched/226409/ 113 Discover Greece, 2024. A tour of the wines and vineyards of Heraklion. https://www.discovergreece.com/experiences/sample-wine- routes-heraklion 114 The wine areas can be split into two wine routes: Archanes (reds) and Peza (whites and reds) on the road south-east beyond Knossos; Dafnes (reds) on the road southwest towards Phaistos; and Malvasia Handakas – Candia (whites) found along both routes. 115 Urban Agenda for the EU, 2020. Thematic partnership on Sustainable Tourism: List of partners approved by the Director Generals on Urban Matters (DGUM) on 26.10.2020 https://www.urbanagenda.urban-initiative.eu/sites/default/files/2022-10/Sustainable%20Tourism%20 Partnership%20Composition_UAEU.pdf 116 Global Sustainable Tourism Council, 2022. Destination Assessment of Heraklion. https://www.gstcouncil.org/destination-assessment-of-heraklion/ 117 European Urban Initiative, 2022. Bioplastics from Food Waste - ZOOM IN. https://portico.urban-initiative.eu/urban-stories/uia/bioplastics-food-waste-zoom 118 European Urban Initiative, 2022. Heraklion: a holistic urban food waste solution with tourism at its heart. https://www.urban-initiative.eu/news/three-eu-cities-taking-innovative-action-sustainable-tourism 119 European Urban Initiative, 2022. Bioplastics from Food Waste - ZOOM IN. 28 Economic Profile: Municipality of Heraklion disciplines (such as computational bio- medicine) as well as well propelling its Box 4: Start up feature - JADBio impact across the European industrial Founded in 2019, JADBio presents an automated Machine Learning ecosystem (INDUX-R project).120 121 Platform which provides leading-edge AI tools and automation ca- pabilities enabling life-science professionals to build and deploy Heraklion’s mature ICT infrastructure accurate and explainable predictive models with little or no data and active ICT SME community also po- science expertise. Its technology can significantly accelerate the drug sitions it well for the implementation discovery process and can also be leveraged for precision health & of smart city solutions to improve cit- medicine. The platform can be applied to address a range of condi- izen’s quality of life and development tions (cancer-oncology, immune, endocrine, metabolic system, chronic opportunities.122 Key priority areas for diseases and aging, infectious diseases, and more).124 In 2021, JADBio Heraklion in this regard, as transmitted won the 1st Prize as “Spin-off of the Year”, 2021 at the 1st National under the Intelligent Cities Challenge Startup Awards by Elevate Greece.125 JADBio was one of 20 European (ICC), include tourism, economy, mobili- EIC-funded SMEs, the only one from Greece, to participate in the ty and environment. A key initiative cov- EIC Tradefair delegation in America’s leading medical exhibition, BIO ered under the ICC, is the development International Convention 2022.126 of an internet of things (IoT) platform for the Municipality in collaboration with FORTH’s Institute of Computer Science. in the healthcare sector. A number of installed and operated in more than 60 The initiative foresees the creation of dynamic biotechnology companies ac- health units in Greece, and CeHA has an online platform for the collection, tivate in the city (such as JADBio, pre- received a large number of awards in storage, promotion and sharing of ur- sented in Box 4), and Heraklion holds a national and international innovation ban data (environmental, traffic, noise, leading position in the sector, being the competitions in recent years. In collab- crowd measurement, etc.) from various birthplace of the Hellenic Digital Health oration with the PRAXI Network, CeHA sources in the external environment of Cluster in 2021, which brings together created the Hellenic Digital Health the city and the development of data the 30 innovative and dynamic compa- Cluster in 2021, which brings together utilization application.123 124 125 126 nies in the digital health ecosystem in the 30 innovative and dynamic compa- Greece. nies in the digital health ecosystem in Biotechnology Greece.128 Heraklion is also the birthplace of Heraklion’s biotechnolo- the Hellenic Digital Health Cluster, gy sector has also shown launched by the Center for eHealth proof of developing Applications and Services (CeHA) of digital health IT applications to inven- FORTH, a business unit of the Institute tive concepts and sustainable biotech of Computer Science (FORTH-ICS).127 solutions that deliver a positive impact Software developed by CeHA have been 120 The INDUX-R project, funded under Horizon Europe seeks to achieve scientific breakthroughs in the transformation of the European industrial ecosystem integrated in technological enablers, namely through extended reality enhanced with human-centric AI and secure, 5G-enabled IoT. 121 ICS-FORTH, 2024. Projects. https://www.ics.forth.gr/ics-projects 122 Intelligent Cities Challenge, 2023. Heraklion: Intelligent City Transformation Overview. https://www.intelligentcitieschallenge.eu/sites/default/files/2023-04/ICC_Final%20deliverable_Heraklion_0.pdf 123 Intelligent Cities Challenge. Heraklion: Intelligent City Transformation Overview. 124 JADBio, 2024. Home page. https://jadbio.com/ 125 Newswires, 2021 JADBio AutoML Awarded 1st Prize for Spin-off of the Year, 2021. https://www.einnews.com/pr_news/551353917/jadbio- automl-awarded-1st-prize-for-spin-off-of-the-year-2021 126 JADBio heading to BIO2022 in San Diego. https://jadbio.com/jadbio-heading-to-bio2022-in-san-diego/ 127 ICS-FORTH, 2024. About CeHA (Center for eHealth Applications and Services). https://www.ics.forth.gr/ceha/ 128 Hellenic Digital Health Cluster. https://hdhc.gr/ 29 Economic Profile: Municipality of Heraklion Key Take-aways Heraklion presents a significant human capital base the second-highest sector of employment in the mu- and numerous institutions which endow it with a for- nicipality, generating 16% of employment. While it midable presence in research, innovation, and entre- comprised just 1.7% of total turnovers in the munici- preneurship at both national and EU level. Education pality over 2015-2020, food comprises nearly 50% of and public employment saw strong growth in employ- the region’s total exports. ment numbers, and the city hosts several excellent and well-recognized education institutions such as In 2020, the wholesale retail and trade sector gener- the University of Crete and the Hellenic Mediterranean ated the largest amount of turnover (on a per-firm University. Moreover, several companies have emerged basis) in the local economy, followed by manufac- as the result of technological development of research turing and real estate management. Wholesale, retail results (spin-offs), and its strong business support infra- and trade has also seen the largest growth in employ- structure contributes significantly to the city’s start-up ment over the years 2015 – 2020. Manufacturing rep- culture. resents contributed 16% of total turnover over 2015- 2020 and is the fourth largest sector of employment in Tourism has been on an upward trajectory and is the municipality (6.4%) as of 2020. Average turnover expected to grow in the next years, backed by key per firm in manufacturing increased steadily over 2015 projects.129 Accommodation and food service activi- to 2019, from €184,337 to €230,760, and manufac- ties accounts for the fourth largest sector in terms of turing represented among the highest salaries in the employment and turnover. The hospitality sector has municipality over 2014-2020. As the municipality faces also been increasingly attracting domestic and foreign the constraint of limited industrial space, the need for a investors in recent years, with significant hotel acquisi- new business park for the municipality has been iden- tions and touristic real estate development throughout tified at national level.130 The real estate management the island since 2020. To meet the future demands of sector has expanded significantly between 2015 and tourism and address ongoing climate change pres- 2020, in terms of number of registered enterprises, em- sures, a range of sustainability projects are being un- ployment as well as total turnovers, with the latter ex- dertaken in Heraklion and Crete more broadly which periencing growth of 224% over the period, from €9.5 include sustainable urban tourism, food waste, water million to €30.7 million. desalination, and renewable energy. The city also serves as an infrastructure and logistics Agriculture, forestry and fisheries is a small sector hub for the island of Crete and is home to several stra- in terms of its contribution to total turnovers, but a tegic transport companies. Significant infrastructures vibrant part of the local economy. It functions with and stakeholders are in place to facilitate increased a large number of very small enterprises (in terms of tourism, with two major airlines and a cruise-style ferry turnover), accounting for 54% of registered firms. It is line headquartered in the city. 129 These include improving the city’s connection with the archaeological site of Knossos, development of a new airport and its port, and potential waterfront development near Pankritio Stadium. 130 Ministry of Development & Investment (Directorate for Industrial Policy), 2021. Technical Report: Business Parks. Page 131. Available at: https://www.ggb.gr/sites/default/files/basic-page- files/%CE%A4%CE%95%CE%A7%CE%9D%CE%99%CE%9A%CE%97%20%CE%95%CE%9A%CE%98%CE%95%CE%A3%CE%97_ %CE%95%CE%A0_2020.pdf 30 Economic Profile: Municipality of Heraklion Heraklion Contact Information Municipality of Heraklion Directorate of Programming, Planning & ICT Email: drosou@heraklion.gr 31 Economic Profile: Municipality of Heraklion Funded by the European Union 32