WP4: Employment intensive Actions
Action 4.3: Mobility Know-How Transfer
Del. 4.3.1 Feasibility Study for the creation of an
Interregional Entrepreurship Zone
In the frame of project:
«Plan of Smart Regional Specialization for the
promotion of competitiveness,
research and innovation»
with the acronym:
“Smart Specialization”
Thessaloniki, September 2015
“Feasibility Study for the creation of an Interregional Entrepreneurship Zone”
DELIVERABLE D4.3.1
Table of Contents
0
Introduction ...................................................................................................................4
0.1
0.2
Overview of the “Smart Specialization” Project .................................................................... 4
Introduction to the Feasibility Study .................................................................................... 5
1
Executive Summary ........................................................................................................9
2
Current Situation Analysis ............................................................................................. 12
2.1
2.2
2.3
2.4
3
International Best Practices .......................................................................................... 87
3.1
3.2
4
Basic Assumptions ........................................................................................................... 173
Estimation of the Capital expenditure needed .................................................................. 175
Estimation of the Operational Expenses ........................................................................... 177
Analysis of the possible Revenue streams and Funding Sources ......................................... 180
Cash flow Projections ...................................................................................................... 184
Sensitivity Analysis of key Cost and Revenue Drivers ........................................................ 184
Main conclusions and recommendations on financial viability........................................... 186
Presentation of Potential EU Funding Sources .................................................................. 186
Action Plan ................................................................................................................. 202
7.1
7.2
7.3
7.4
8
Proposed Activities and Services of the IEZ ....................................................................... 146
Proposed Value chain and Organizational Model .............................................................. 155
Proposed Business model – Business model canvas .......................................................... 166
Proposed Staffing and Personnel Profiles ......................................................................... 168
Financial Analysis ....................................................................................................... 173
6.1
6.2
6.3
6.4
6.5
6.6
6.7
6.8
7
SWOT Analysis ................................................................................................................ 118
Benchmarking Analysis .................................................................................................... 129
Strategic Framework for the Creation of the Interregional Entrepreneurship Zone ............. 141
Proposed Operational Model for the IEZ ..................................................................... 146
5.1
5.2
5.3
5.4
6
European Best Practices within RIS3 implementation.......................................................... 87
International Best Practices of Business Clustering and Cooperation structures ................... 97
Comparative Analysis of Current Situation .................................................................. 118
4.1
4.2
4.3
5
Baseline Regional Profiles .................................................................................................. 12
Entrepreneurship, Competitiveness and Innovation in Bulgaria ........................................... 31
Entrepreneurship, Competitiveness and Innovation in RCM & REMTH ................................. 46
Existing structures for business cooperation and clustering ................................................. 68
Action categories ............................................................................................................ 202
IEZ Development Action plan ........................................................................................... 203
IEZ Development Time Schedule ...................................................................................... 209
Critical Success Factors .................................................................................................... 211
Bibliographic Resources .............................................................................................. 213
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Acronyms and Abbreviations
BERD
CBC
CVT
EPO
ERA
ERDF
ES28
ESF
ETCP
FDI
FLAG
GDP
GERD
GSI
GVA
HEI
HRST
HRSTC
IEZ
IMA
JTIs
NSI
NSRF
NUTS
RCM
REMTH
RIS3
ROP
RTDI
RU
SBA
SME
SWOT
Ttor
Business Enterprise Research and Development
Cross Border Cooperation
Continuous Vocational Training
European Patent Office
European Research Area
European Regional Development Fund
28 States of the European Union
European Social Fund
European Territorial Cooperation Program
Foreign Direct Investment
Fund for Local Authorities and Governments in Bulgaria
Gross Domestic Product
Gross Expenditure on Research and Development
General Secretariat for Industry in Greece
Gross Value Added
Higher Education Institution
Human Resources in Science and Technology
Human Resources in Science and Technology
Interregional Entrepreneurship Zone
Intermediate Managing Authority in Greece
Joint Technology Initiatives
National Statistical Institute in Bulgaria
National Strategic Reference Framework
Nomenclature des Units Territoriales Statistiques
Region of Central Macedonia
Region of East Macedonia and Thrace
Regional Innovation Strategy in Smart Specialization
Regional Operational Program
Research, Technology, Development & Innovation
Research Unit
Small Business Administration
Small Medium Enterprise
Strengths, Weeknesses, Opportunities, Threats
Tertiary Sector
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DELIVERABLE D4.3.1
INTRODUCTION
0.1 Overview of the “Smart Specialization” Project
The present Deliverable refers to the “Elaboration of a Feasibility Study for the creation of an
Interregional Entrepreneurship Zone”, within the framework of the Project “Plan of Smart
Regional Specialization for the promotion of competitiveness, research and innovation”, known
by the acronym “Smart Specialization”.
“Smart Specialization” is funded by the ETCP “Greece – Bulgaria 2007 -2013”, which constitutes
an exploitation plan for the Regional Innovation Strategies for Smart Specialization (RIS3), for the
entire border area of intervention of the aforementioned Programme, which is composed of the
Region of Central Macedonia (Regional Units of Thessaloniki and Serres), the Region of East
Macedonia & Thrace and the Regions of South West and South Central in Bulgaria (locations
Blagoevgrad, Smolyan, Kardjali and Haskovo).
The aim of the project is to develop specific actions and to record targeted investment priorities,
in order to support the approaches and policy instruments that will be detected by the Smart
Specialization Strategies. In the specific project the following bodies are participating as partners:
1. Region of Central Macedonia (lead partner), 2. Ministry of Macedonia and Thrace, 3.
Thessaloniki Chamber of Commerce and Industry (TCCI), 4. Aristotle University of Thessaloniki Research Unit URENIO, 5. Municipality of Kordelio – Evosmos, 6. Chamber of Drama, 7. Regional
Union of Municipalities “Maritza” of Bulgaria, 8. Business Incubator - Gotse Delche, 9. Chamber
of Commerce and Industry of Blagoevgrad, 10. Center of Information and Entrepreneurship
Support Sandanski. The project “Smart Specialization” consists of five Work Packages, which
include a series of interrelated and complementary actions, as summarized below:
−
Work Package 1 – Management and Coordination of the Project
−
Work Packages 2 - Dissemination Activities
−
Work Packages 3 – Supportive Actions for RIS3 Pilot Activities
The development and implementation of RIS3 strategies to the border area of intervention, are
supported under the Work Package 3, which objective is their proper implementation, taking into
account the institutional framework, common issues, practices and policies, which are included
in the fields of research, innovation and entrepreneurship, highlighting the growth prospects of
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the sectors which are related to the RIS3 strategies of the concerning Regions. Finally, the Work
Package supports the policy formulation of RIS3 and of a joint cross-border action plan, based on
the ETCPs “Greece – Bulgaria 2014 – 2020” and “Black Sea 2014 -2020”, of the Horizon 2020 and
the individual findings of their studies.
Work Package 5 - Smart Specialization Governance Tools
In the context of the fifth Work Package, an open platform for RIS3 collaboration will be developed
with the aim to disseminate, support and monitor the Smart Specialization strategies and the RIS3
policies, in the cross-border region. Meanwhile, a Memorandum of Cooperation will be
formulated and signed, committing all stakeholders, which will take its final form after a debate.
The project is co-financed at 85% by the European Regional Development Fund and 15% by
national funds, under the framework of the European Territorial Cooperation Programme
“Greece – Bulgaria 2007 -2013”, Priority Axis 3 of the Programme entitled “Competitiveness and
Human Resources”, Objective 3.2 “Supporting entrepreneurship and actions to restructure the
Economy”.
Work Package 4 - Employment Intensive Actions
The fourth Work Package of the Project includes specific actions for the application of the Smart
Specialization rationale, in the context of the research, entrepreneurship and innovation. As
important element is considered training, with a view to increase productivity, competitiveness
and extroversion, as well as the consulting services that businesses will receive, which are either
operating or are about to operate in cross border trade, or the cross border services provision.
The latter will be selected based on specific criteria, after their attraction and evaluation. In
addition, employee mobility across borders actions will be developed, with visits to other
enterprises, with objective the transfer of know-how and the promotion of the cross border
cooperation. In the context of those actions, the elaboration of a feasibility study on a crossborder business district will be implemented. Finally, a cross-border entrepreneurship prize
institution will be established, aiming at promoting businesses that create competitive products
and services to cross-border trade, while defending employment.
0.2
Introduction to the Feasibility Study
Within Action 4.3: Mobility Know-How Transfer, this Study presents:
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Analysis of the Current Situation
As part of this activity, the Contractor has implemented a series of actions in order to collect and
analyze strategically all data affecting entrepreneurship, research and employment at regional
and cross border level in the priority sectors (based on Regional RIS3) in order to reach conclusions
related to the current situation. Specifically, this section of the Study comprises of:
•
The collection and analysis of employment data in regional cross border level.
•
The collection and analysis of business data in regional cross border level.
•
The collection and analysis of research data in regional cross border level.
•
The recording of existing policies and actions for the promotion of interregional
cooperation in regional and cross border level.
•
The recording and assessment of existing structures supporting entrepreneurship,
research and employment in regional and cross border level.
•
The recording and assessment of existing business networking structures at regional and
cross border level.
•
The recording and assessment of experience of all members of the partnership in regional
and cross border cooperation.
Utilization of Best Practices
This activity builds on international experience and case studies of the application of RIS3 in other
European regions. Moreover innovative policies, practices and structures that have been
implemented in regions of similar quality in the context of interregional cooperation, networking
and support to businesses, workers and researchers, are recorded.
Benchmarking
This activity utilizes recognized methodologies such as SWOT and Benchmarking assessing the
current strategic situation in order to formulate the main strategic guidelines for the creation of
the Interregional Entrepreneurship Zone. The overall aim of the activity is to assess and exploit
the strengths, weaknesses, opportunities and threats as well as the main best practices
internationally which could be a source of development of innovative actions and cooperation
structures, networking and support business, workers and researchers across borders.
Operational Model of the Interregional Entrepreneurship Zone (IEZ)
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The basic Operational Model of the Interregional Entrepreneurship Zone (IEZ) is being developed,
finalizing its objectives and formulating the framework of innovative services towards business,
workers and researchers to be offered.
Based on the above, the general definition of the Operational Model of the Interregional
Entrepreneurship Zone (IEZ) is composed by:
•
A statement of the objectives set and a description of their content and the desired results
directly related to Smart Specialization.
•
A description of the main structures / services to be developed in order to achieve the
objectives, which are specified towards:
•
o
business,
o
employees
o
researchers
Relevant metrics or indicators to identify with in a concrete - as possible - quantified
manner the intended results.
For the finalization of the above, the needs of businesses, workers and researchers and the
benefits expected to result from the operation of the Zone are taken into account, with an
emphasis on supporting business issues such as:
Skills development.
Development and integration of innovation.
Networking development and clustering.
Access to research and technological development.
Extroversion.
Formulating the Operational Model requires the development and description of a Plan, which
identifies:
The objectives to be achieved and the indicators to measure them.
The operational and organizational model of the IEZ.
The basic structures and services to be included and their implementation methodology.
The profile of human resources required to staff IEZ’s services.
Feasibility Analysis
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Based on the Operational Model, sustainability is analyzed and specialized in the following
individual steps:
Analysis and assessment of operating costs taking into account the main areas of its
activation.
Analysis of possible revenue sources and financing of IEZ’s operation.
Sensitivity analysis of key assumptions that affect revenues and operating expenses.
Preparation of estimated financial results.
Analysis of possible ways of funding and financing IEZ’s development and operation.
Supporting the creation of the Integrated Action Plan of the Interregional Entrepreneurship
Zone
Building on the results of the above activities, a comprehensive Action Plan for the creation of
interregional Entrepreneurship Zone is formulated. The objective of the Plan is twofold since it,
on the one hand, defines clearly all steps to be taken and the responsibilities of each party
involved and on the other hand it is used as the implementation monitoring tool.
The Study was commissioned by the Regional Development Fund of Central Macedonia in the
framework of the Smart “Specialization” Project of the European Territorial Co-operation
Programme Greece-Bulgaria 2007-2013.
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DELIVERABLE D4.3.1
EXECUTIVE SUMMARY
The interregional and cross border cooperation in the fields of entrepreneurship, research and
innovation should be considered as an additional resource for the implementation for the regional
innovation strategies in all the regions of the cross border area. Furthermore, an enhanced cross
border cooperation could lead to advanced opportunities for new entrepreneurship and business
discovery, application of research results into business operations, new products and services,
extrovert operations, new direct investments and creation of new and sustainable jobs based on
knowledge and advanced skills. The scope of the creation of an Interregional Entrepreneurship
Zone in the four regions of the cross border area is to play the role of the facilitator and supporting
platform for the enhancement of cross border cooperation and mobility.
The scope of the present study is to formulate a comprehensive framework for the creation of
the Interregional Entrepreneurship Zone (IEZ) and evaluate the critical parameter for its
feasibility. For the proper fulfillment of this scope the study presents the existing situation in the
four regions of the cross border area in terms of entrepreneurship, research and innovation,
identifies the European and international best practices in clusters and overall cooperation
structures development, analyzes the strengths – weaknesses, threats – opportunities
combinations and presents the benchmarking of the four regions as it is introduced by the S3
PLATFORM.
Following the current situation analysis and the comparative analysis of the four regions, the
strategic framework for the creation of the IEZ is introduced along with the basic principles,
requirements and strategic objectives. This strategic framework sets the dimensions for the
development of the proposed operational and organizational model as well as for the service
portfolio of the IEZ. The basic choice in the development of the operational and organizational
model is to follow a lean organization approach in order to restrict costs, give flexibility and boost
sustainability. This approach was also followed for the selection of the appropriate legal form and
the overall concept of the IEZ. More specifically the legal from of the IEZ is proposed to be a
nonprofit legal entity with partners/shareholders the partners of the Strategic Project and to
operate as a virtual cooperation platform with representation offices in all the four regions of the
cross border area. Another activity of the IEZ with important role will be the organisation and
hosting of the Interregional Sectoral Working Groups which will operate under the “technology
Platform” model and will define sectoral action plans for the implementation of relevant policies.
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Having the proposed operational and organizational model in place, the study proceeds with the
evaluation of the financial viability of the IEZ. All the assumptions and calculations are presented
in the study in an analytical way. The calculations are based in a separate financial model which
was developed for the financial evaluation of the “project” IEZ. From the results of the model that
are presented in the study it is understood that the “project’s” viability is directly related to its
ability to secure the required amount of funding through grants every year of its operation.
However, if the partners of the structure contribute to the coverage of operating expenses by
providing (mainly) personnel and/or facilities free of charge, IEZ will be marginally viable solely
through its operations and will not need to attract grants and/or other funds. The main finding
that someone needs to take into account is that the IEZ will be able to remain sustainable with
minor funding needs and at the same time obtain a very high socioeconomic impact to the cross
border area.
Following the conclusions on the financial viability, there is a presentation of the possible funding
sources that will be available in the cross border area during 2014 – 2020. These funding
opportunities were identified based on the scope of the IEZ and in the analysis there specific
characteristics of each opportunity that are related to this scope. The possible funding sources
can be summarized as following:
a. European programs that involving all the four regions of the eligible cross border area
from both countries:
o
o
o
INTERREG V-A GREECE - BULGARIA 2014-2020
INTERREG EUROPE COOPERATION PROGRAMME 2014-2020
TRANSNATIONAL COOPERATION PROGRAMME INTERREG BALKAN-MEDITERRANEAN
2014-2020
b. European programs involving just the two regions of the cross border area from the Greek
side:
o
Operational Program Central Macedonia 2014-2020
Operational Program Eastern Macedonia – Thrace 2014 - 2020
Operational Program Competitiveness, Entrepreneurship and Innovation 2014-2020
Operational Program Transport, Infrastructure, Environment and Sustainable
Development
Operational Program Human Resources Development, Education and Lifelong Learning
o
Operational Programs Rural Development - Fisheries and Marine
o
o
o
o
c. European programs involving just the two regions of the cross border area from the
Bulgarian side:
o
Operational Programme “Innovation And Competitiveness” 2014-2020
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Following the evaluation of the financial viability there is a comprehensive and realistic action
plan for the development of the IEZ which is analyzed into four categories of actions:
Categories
IEZ governance and
leadership development
IEZ Organisation
structure development
and Staffing
Development of IEZ
Activities and Service
Portfolio
Development of IEZ
high visibility and
awareness in the
interregional area
Scope
This group of actions aims to the creation of a governance
structure that reflects best practices and provides clear leadership
to the IEZ organisation.
This group of actions aims to build a capable management team,
through staff development and/or new appointments that has the
appropriate experience and skills to drive the development of IEZ.
This group of actions aims to the development of the full IEZ
activity map and service portfolio in a sustainable way and
through the maximization of interregional cooperation.
This group of actions aims to establish a solid and sustainable
visibility and awareness building mechanism that will disseminate
IEZ’s capabilities in all recipient groups in the interregional area.
Code
01
02
03
04
Each category is further analysed into sub actions with their description, the responsible Partner,
their expected duration and their expected output. The overall time plan for the implementation
of the action plan is estimated in twelve months from the initiation of the process which is
proposed to be held in a two days conference.
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DELIVERABLE D4.3.1
CURRENT SITUATION ANALYSIS
2.1
2.1.1
Baseline Regional Profiles
Region of East Macedonia and Thrace (REMTH)1
The Region of East Macedonia and Thrace is situated along the crossroads of Europe and Asia and
is predominantly an agricultural area. However, European integration, infrastructure
development, the gradual exploitation of its tourism and geopolitical potential and the relative
strong manufacturing base can become pivotal for its economic growth.
Socio-economic profile:
The Region of East Macedonia and Thrace is the home of 5.7% of the country's population (2013)
and is mainly an agricultural area. The low levels of FDI in combination with relative low
productivity, the slow restructuring of the production base towards higher value added segments
and the increased competition from low cost neighboring countries are expected to further
increase the pressure on the production base of the region and potentially affect negatively
employment.
Already, more than four years of declining GDP due to the economic crisis led the unemployment
rate from 8.7% during 2008 to 26.4% during 2013. The sectors affected most are those of trade
and services, with a large number of shops and firms ceasing their operations, while also
manufacturing and construction are severely affected. Indicatively, in 2011, 179 commercial firms
were located in the region, a decrease of 3.2% compared to 2010.
The services sec one was 6.6%. Ttor dominates the regional economy and in 2011 accounted for
75.6 % of the regional GVA, while the secondary sector share was 17.8% and that of the primary
services sector however, apart from the retail trade and tourism, is directed mainly at catering for
regional needs, is not internationally competitive and presents limited potential at expanding to
neighbouring countries based on innovation and high value added knowledge intensive segments.
The manufacturing sector is dominated by medium to low technology sectors, such as the food
industry, textiles and clothing, mining and quarrying, manufacture of pulp, paper and paperboard
and manufacture of tobacco products. In addition, in the region are located some larger more
1https://ec.europa.eu/growth/tools-databases/regional-innovation-monitor/base-profile/region-anatoliki-makedoniathraki
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technology intensive industries particularly in the sectors of chemicals and the manufacture of
machinery and equipment.
Over 2000-2008, the growth of GDP was 5.1% while the region accounted for approximately 3.5%
of the country's GDP. In 2011, the region accounted for 3.9% of the national GDP, while in terms
of GDP per capita, was positioned 11thamong the 13 Greek regions, considerable below the EU27
average (52%).
Employment in high tech industries and knowledge-intensive services over 2000-2008 accounted
for 1.2% of total employment in the region, exhibiting strong growth of 4.9%. However, the
current economic situation has reversed this positive trend.
RTDI profile:
The Region is characterised by a gradual building up of capacities in the fields of RTDI by increasing
the presence of academic institutions, i.e. Democritus University of Thraki and TEI of Anatoliki
Makedonia, Thraki. However, their relative share in terms of R&D expenditure in the country are
still marginal.
While in 2005, the region accounted for 2.3% of the national GERD and the regional GERD
accounted for 0.33% of the regional GDP, in 2011 the corresponding rates were 3.3% and 0.56%,
approaching the country's average but remaining still far below the EU27 average.
This is mainly the result of the minimal contribution of the private sector, since BERD as a
percentage of regional GDP is only 0.16% (2011). The research efforts in the region are
concentrated mainly in the academic sector. However, the limited absorptive capacity and
demand by firms for RTDI services and the absence of infrastructures for enhancing technology
transfer limit the potential for spillover effects and the creation of long term linkages between
regional firms and the HEI sector in the region. Over 2000-2010, less than 6 patents were filled to
EPO by organisations or persons from the region, reflecting the very low level of technological
specialisation of the region. During 2006-2010, the researchers of the region participated in 2,237
publications with a normalised citation score of 0.76.
Moreover, 3.8% of the HRST in Greece is located in the Region (2012), with HRSTC accounting for
11.5% of the regions workforce, a share below the EU27 (18.9%) and the national (16.2%) average.
Analogous is the concentration of researchers, accounting for 4.8% of the total researchers in the
country and 2.2% of the private sector researchers (2011).
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The steep decline in private investment after 2008, due to the crisis has also reduced the already
low levels of private R&D investments within the Region. The reduced liquidity of the private
sector, in combination with the limited funding provided by the banking sector for private
investments, especially for new firms, are hindering the mobilisation of resources for innovative
ventures. Additionally, in some cases, even successful proposals in RTDI programmes receive
funding sometimes with considerable delays.
Over 2007-2013, the region participated in 73 research and innovation projects of total public
funding €8.9m.
Latest Regional Innovation Scoreboard results:
According to the Regional Innovation Scoreboard 2014, the region of Region of East Macedonia
and Thrace is ranked as a moderate innovator with an innovation performance below EU average.
Although innovation performance has been improved between 2004 and 2010, the region still
lacks the resources, networks and measures needed for its upgrowth.
In particular, main weaknesses relate to population with tertiary education, EPO patent
applications, employment in medium-high/high-tech manufacturing and knowledge-intensive
services and SMEs introducing product or process innovations. Relative strengths are non-R&D
innovation expenditures, SMEs innovating in-house, innovative SMEs collaborating with others,
SMEs introducing marketing or organisational innovations and sales new to firm innovations.
Governance profile:
Until 2011 regions had limited autonomy in terms of policy formulation and design and no
legislative autonomy. With "Kalikratis reform", regions gained significant autonomy in designing
and implementing their regional policy, within the context of the national legislation.
The head of the region is the Governor and the Regional Council, both elected.
Regarding RTDI policy there is no specific governance system in place. All issues related to the
Structural Funds and Innovation are responsibility of the Directorate General for Development
Planning, Environment and Infrastructure that is responsible, among other duties, for the overall
development planning, monitoring and evaluation of regional policies.
In the closing programming period all RTDI budget of the regional Operational Programme, which
is the only source for the region, has been ceded to the General Secretariat for Research and
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Τechnology (GSRT)2 under the precondition that an equal amount of money will be directed to
the Region of East Macedonia and Thrace for funding RTDI actions through GSRT’s programmes.
The design of the new programming period 2014-2020 including the Regional Innovation Smart
Specialisation Strategy (RIS3) is currently responsibility of the Intermediate Managing Authority
(IMA) of East Macedonia and Thrace.
Funding and financial control including measures related to RTDI, is the responsibility of the
Regional Development Fund of East Macedonia and Thrace.
Policy trends profile:
RTDI policy in the Regions is designed and implemented only through the Regional Operational
Programmes (ROPs).
However, within the "Regional Operational Programme (ROP) of Makedonia - Thraki 2007-2013"
and particularly under the Priority Axis 6 – “Digital Convergence and Entreprenuity in the region
of East Macedonia and Thrace”, there were no funds allocated explicitly to RTDI measures in the
region. Therefore, RTDI policy in the region was implemented mainly through horizontal measures
launched by the General Secretariat for Research and Technology (GSRT).
Currently, the Region is designing its policy on RTDI for the new programming period 2014-2020
following the methodology of Innovation Smart Specialization Strategy (RIS3). The Region is
directed towards an integrated approach concerning the development of Northern Greece as a
unified area and aims to invest in knowledge society and innovation and to promote sustainable
development and modern governance forms. In particular, the specific areas of innovation on
which the RTDI policy will focus are:
•
Agricultural sector;
•
Manufacturing sector (food-beverages, non metallic minerals, plastic-rubber products,
chemicals-medicines, electronic/electrical equipment); and
•
2
Tourism.
http://www.gsrt.gr/
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Region of Central Macedonia (RCM)3
Central Macedonia is the second most important Region of the country in terms of population
and economic activity. Thessaloniki, the capital of the Region, is an important commercial and
transport hub of south-eastern Europe. In parallel, the Region is also an innovation hub with
considerable public research infrastructures and the largest University of Greece, Aristotle
University of Thessaloniki.
Socio-economic profile:
Central Macedonia is the second largest Region in Greece where 17.2% of the country's
population is concentrated (2013). In 2011, the Region accounted for 13.5% of the national GDP,
while in terms of GDP per capita was positioned 9thamong the 13 Greek regions and below the
EU27 average (57%). Moreover, in 2011 the tertiary sector accounted for 77.4% of the regional
GVA, the secondary sector for 17.4% and the primary sector for 5.2%.
The current economic crisis led the unemployment rate during 2013 to increase to 30%, nearly
four times higher compared to 2008. This was mainly the outcome of steep reductions in
consumption and secondarily due to negative trends in the tourism, services and manufacturing
sectors.
The above negative trends were reinforced by significant delays observed in basic infrastructure
projects, such as roads, airports, metro system, etc over the previous decade and low investments
of the private sector oriented mainly towards low value added sectors with limited innovative
activities. Also, the inability of the region to exploit its geopolitical metropolitan role as a gate and
services hub for Eastern European countries is another reason for its moderate growth.
The most important services sectors in the region are financial services, transport and
communications, recreational tourism and transport services. The manufacturing sector is
dominated by medium to low technology intensive sectors, such as the food industry, textiles &
clothing, non-metallic mineral products and furniture where the majority of firms are SMEs.
Larger companies are found in industries such as metal production, chemicals and plastics. The
main exporting sectors are those of textiles, food and drink, chemicals and plastics.
3
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Employment in high tech industries and knowledge-intensive services over 2000-2008 accounted
for 1.7% of total employment, and although exhibiting negative trends managed to maintain its
share during 2012. The slow pace of restructuring in combination with de-industrialization,
migration of industries to neighboring low labor cost countries, low levels of FDI and the steep
reduction (-65.4% for the 2008-2013 period) of the employment in the construction sector kept
unemployment rates high, even before the crisis. Further on, the above create important
obstacles in the attempt of the region to recover from its current economic woes.
RTDI profile:
Central Macedonia's performance was systematically considerably below the EU average in
research and innovation (R&I). In 2005, the region accounted for 13.9% of the national GERD while
regional GERD accounted for 0.6% of the regional GDP, a share equal to the national average
(0.6%). However, the corresponding rates in 2011 were 13.7% and 0.68%.
These stagnant shares can be attributed mainly to the business sector. BERD as a percentage of
GDP and of GERD within the Region are 0.16% and 23.3% respectively. Patenting activities are
also marginal, with only 13.3 patents per year over the 2008-2010 period, mainly in low tech
fields.
This is the result of limited demand for RTDI services by firms that are structured around sectors
with low innovative dynamics, and the limited formal linkages between the public research and
business sector.
In order to reverse the above negative trends in the past a number of initiatives had taken place
such as the creation of incubators and the establishment of Thessaloniki Innovation Zone, with
the overall objective to create a cluster of companies based on new technologies and innovation.
The only sector where the R&D expenditure as a share of GDP are above the national average is
that of the Higher Education with HERD accounting for 0.37% of regional GDP (2011), compared
to the national average of 0.27%. These dynamics can be attributed mainly to the presence of the
Aristotle University of Thessaloniki (AUTh). Besides AUTh, the region hosts the University of
Makedonia, the International Hellenic University, the Alexander TEI of Thessaloniki and the TEI of
Kentriki Makedonia.
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The Thessaloniki Technology Park and the Centre for Research and Technology Hellas (CERTH), a
centre of excellence not only nationally but also within the European Research Area (ERA), are
other important nuclei for the regional development.
As a result, 17.6% of the HRST in Greece is located in the region, with HRSTC accounting for 17%
of the region’s active population, a share below the EU27 (18.9%) but above the national (16.2%)
average. During 2006-2010, the researchers of the region participated in 10,495 publications with
a normalised citation score of 0.95.
During 2007-2013, the region participated in 361 R&I projects of total public funding €57.8m.
Latest Regional Innovation Scoreboard results
According to the Regional Innovation Scoreboard 2014, the Region of Central Macedonia is ranked
as a moderate innovator with an innovation performance below EU average.
Although innovation performance has been improved between 2004 and 2010, the region still
lacks the resources, networks and measures needed for its upgrowth.
In particular, main weaknesses relate to EPO patent applications and employment in mediumhigh/high-tech manufacturing and knowledge-intensive services. Relative strengths are non-R&D
innovation expenditures and SMEs' performance, including SMEs innovating in-house, innovative
SMEs collaborating with others, SMEs introducing product or process innovations, SMEs
introducing marketing or organisational innovations and sales of new to market and new to firm
innovations.
Governance profile:
Until 2011 regions had limited autonomy in terms of policy formulation and design and no
legislative autonomy. With "Kallikratis reform", regions gained significant autonomy in designing
and implementing their regional policy, within the context of the national legislation.
The head of the region is the Governor and the Regional Council, both elected.
Regarding RTDI policy, there is no specific governance system in place. All issues related to the
Structural Funds and Innovation are responsibility of the Deputy Governor of Development
Programming and Planning. The most relevant administration unit is the Directorate General for
Development Planning, Environment and Infrastructure that is responsible, among other duties,
for the overall development planning, monitoring and evaluation of regional policies.
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In the closing programming period all RTDI budget of the regional Operational Programme, which
is the only source for the region, has been ceded to the General Secretariat for Research and
Τechnology (GSRT) under the precondition that an equal amount of money will be directed to the
Region of Central Macedonia for funding RTDI actions through GSRT’s programmes.
The design of the new programming period 2014-2020 including the Regional Innovation Smart
Specialisation Strategy (RIS3) is currently responsibility of the Intermediate Managing Authority
(IMA) of Central Macedonia.
Funding and financial control including measures related to RTDI, is the responsibility of the
Regional Development Fund of Central Macedonia.
Policy trends profile:
RTDI policy in the regions is designed and implemented only through the Regional Operational
Programmes.
In the past, the focus of RTDI policy in the region was mainly on strengthening the network of
public research infrastructures and the establishment of new organisations in order to attract and
support new high technology firms.
Over the programming period 2007-2013 the focus of RTDI policy shifted towards supporting
directly RTDI initiatives of companies and less towards public infrastructures.
More specifically, the major policy directions of the "ROP of Makedonia - Thraki 2007-2013" for
the Region of Central Macedonia were:
•
Strengthening regional infrastructures;
•
Bridging of the public research system with the private sector;
•
Transformation of knowledge into innovative products and services;
•
Support of technology transfer towards firms and particularly SMEs;
•
Promotion of the extroversion of the public research centres and of the higher education
institutes through international cooperations; and
•
Development of the human capital both in terms of quantity and quality.
The public funding planned to be directed towards RTDI measures amounted to €184.2m which
corresponded approximately to 8.7% of the total public funds of the ROP for the Region.
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Most of the above funds have been directed to the beneficiaries in the region through GSRT
programmes. GSRT has already designed and launched the following measurers for Central
Macedonia, with funds ceded to it by the IMA of Central Macedonia:
•
Innovation vouchers for SMEs (€1.7 m);
•
Development and support of new highly knowledge intensive innovative enterprises (Spin
–offs and Spin outs) (€3m);
•
Collaboration 2009 (€17.7m);
•
Collaboration 2011 (€25.5m);
•
Support newly established firms in their research and development activities (€3m);
•
Support groups of SMEs in their research and development activities (€5.3m); and
•
Programme for the development of industrial research and technology 2013 (€3.2m).
•
Moreover, during that period the public funding of infrastructures concerning research and
technological develoment was €2m.
•
Currently, the region is designing its policy on RTDI for the new programming period 20142020 following the methodology of Innovation Smart Specialisation Strategy (RIS3) and the
areas of innovation on which the RTDI policy will focus are:
•
Areas of regional specialization:
•
Agrifood sector;
•
(Building) materials sector;
•
Textile and clothing sector; and
•
Tourism sector.
•
Areas of horizontal support:
•
ICT;
•
Energy;
•
Environment; and
•
Transport & logistics technologies. .
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South Central Region (Yuzhen Tsentralen)4
The South Central region of Bulgaria comprises almost a quarter of the whole country. The Region
is second after the Southwest Region in terms of gross domestic product (GDP), number of
students, research and development (R&D) spending and the number of applications submitted
to the National Innovation Fund (NIF), the National Science Fund (NSF), and the Sixth and Seventh
Framework programmes.
Socio-economic profile:
The territory of the South Central Region encompasses five districts – Pazardzhik, Plovdiv,
Smolyan, Haskovo, and Kyrdzhali. The Region’s area is 22,365 square kilometers, which represents
almost a quarter of the country’s territory. The population of 1,453,619 persons has been
gradually decreasing and currently comprises 20% of the total population of Bulgaria (NSI 2013).
The Region contributes 14% of Bulgaria’s gross domestic product (€5.3b) and gross value added
(GVA) of €4,6b (NSI 2011), ranking second after the Southwest region. The industrial sector has
kept its share of GVA (38%), while the agrarian sector has been losing its position (9%) and the
services sector has increased up to 53% in 2011 according to NSI. The disparities in the
development trends of municipalities are substantial. The engineering and machine building
sector is the most important in the region, followed by electronics and the perfume and cosmetics
industry. Tourism is one of the fastest growing sectors in the region. The educational structure of
the employed includes a relatively high level of secondary and lower educational level graduates.
GDP per capita in the region amounts to €3,617, compared to an average of €5,222 for the country
(NSI 2011).
The share of the aging population has been increasing, as well as the age dependency ratio - 48.8%
in 2012, according to NSI data. The negative natural increase in the region (-4.7% in 2012) is a
problem for the whole country. Due to restructuring of the economy after 1991, employment in
the region declined, most seriously in the border regions of Smolyan and Kurdzhali. Employment
increased after 2001 and in 2008 it reached 668,300 persons or 19.8% of the total employed in
the country (Eurostat data). Decline followed due to the global economic crisis. In 2012, the
regional employment rate of 44.9% (567,5 thousand people) was slightly below average national
values of 46.6% (NSI 2012). Most of the population is employed in the services sector, followed
4
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by industry and agriculture. For the period 2000-2008 the average annual unemployment in the
region was 11.5%, however in 2008 it declined to 5.1%. In 2013 the unemployment coefficient in
the region was 21% (NSI 2013).
RTDI profile:
Starting from 1989, many sectoral institutes ceased to exist and many enterprises closed down
their R&D units after the transition from a planned to a market economy. Still, innovations are
being generated in the region, especially in the agricultural sector and the food industry. Regional
research organizations and universities have the potential to become centers of excellence at a
national level. According to NSI data, R&D spending has increased in the South Central region
from €4.4m in 2003 to €13.9m in 2012, or 5.5% of the total R&D spending in Bulgaria. This places
the region second after the Southwest Region (in which 84% of Bulgaria's R&D spending is
concentrated). The Region invested 0.21% of its GDP in R&D in 2011 (Eurostat data). The public
sector provides over half of R&D expenditure in the region. In 2012 the region had 16% of all
pupils and students in all levels of education in the country, thus taking second place after the
Southwest planning region (Eurostat data). The university in the Region with most citations and
articles over the period 2005-2011, according to the Scopus, was Plovdiv University "Paisii
Hilendarski" (Scopus data5). The human resources in science and technology (HRST) in the region
are 25.4% of the active population, which is lower than the 33.8% average value for Bulgaria for
2012 (Eurostat 2012). The region falls behind the Southwest region, in which the HRST were
39.1%. The region accommodates 9.2% of the total R&D personnel and researchers in the country
(NSI 2012). In 2010 Patent applications to the EPO are 1.309 per million of inhabitants (Eurostat
provisional data).
Employment in high-tech industries and knowledge-intensive services is 6.6% of the total
employment for the period 2003-2011, which is higher than the country average of 3.4%. The
region lags considerably behind on this indicator compared to the Southwest region, which has
6.15% of the total employment engaged in high-tech industries and knowledge-intensive services.
With 53% of the population with broadband access it ranks second after the South West region
(Eurostat 2013). According to 2012 NSI data, 9.1% of the total R&D personnel is situated in the
South Central region.
5
http://www.scopus.com/
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Latest Regional Innovation Scoreboard results
According to the Regional Innovation Scoreboard 2014, the South Central region is ranked as a
modest innovator with an innovation performance below EU average.
Main weaknesses relate to very few SMEs introducing marketing or organisational innovations
(0.065) and low number of SMEs innovating in house (0.088). Moreover, there is a small number
of EPO patent applications in the region (0.078).
The main regional strengths are the population with tertiary education (0.408) probably due to
the number and the quality of universities in the region. Another strong feature is the
employment in knowledge-intensive activities (0.402). However, on both indicators the
performance of the South Central region is below the EU average.
Governance Profile:
The governance of each district (28 in Bulgaria) is implemented by a governor appointed by the
Council of Ministers. There are no governors on Nomenclature of Territorial Units for Statistics
(NUTS) 2 level. The district governor coordinates and monitors the activity of the district units of
ministries and other administrative structures, implementing the industrial, research, higher
education policies, etc. He or she also chairs the District Development Council, which is an
advisory body.
The local authorities are strongly dependent on the national budget for the financing of
innovations and have little of their own resources to invest in this area. This is one of the factors
that hinder the implementation of the Regional Innovation Strategies (RIS). The alternative source
of financing is through the European Union (EU) funds, which in some cases have larger
importance than the national support of innovations. The main sources of EU financing are the
Horizon
2020
Programme,
the
Interreg
programme,
and
Operational
Programme
“Competitiveness”. Since 15 January 2009 the Bulgarian municipalities could also apply for credit
from the Fund for Local Authorities and Governments (FLAG). The fund was created by the Council
of Ministers to tackle the problem with the provision of financial resources for municipalities for
developing project proposals. It also aids in the funding of approved projects under the EU
operational programmes.
The RIS for the South Central Region was elaborated in 2004 by the Applied Research and
Communications (ARC) Fund, the district administrations in the region and the Ministry of
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Regional Development and Public Works. One year later, in 2005, the Ministry of Regional
Development and Public Works elaborated the Regional Plan for the Development of the South
Central Planning Region for the Period 2007-2013. The first priority for development is to increase
the competitiveness of the regional knowledge-based economy. Almost 80% of the measures
proposed in the RIS were incorporated in the Regional Development Plan thanks to the
elaboration of these documents only one year apart. Since the operational programmes are
centrally managed, the measures focused on promoting and enhancing innovation in the region
have not been followed and the RIS has remained a non-binding document.
Policy Profile:
From an historical point of view, Bulgaria has been a highly centralized economy and it has not
developed a regional dimension to its research and innovation policy yet. Currently, there are no
innovation policy measures implemented at the regional level.
The innovative companies of the South Central region are the second best applicants of the two
main Bulgarian innovation and research funding mechanisms – the National Innovation Fund and
the National Science Fund as well as the Sixth and Seventh Framework programmes, after the
Southwest region. With €193,347,633 contracted funds, 411 contracts and 325 beneficiaries by
September 2013, the region is the second-best performer under OP Competitiveness – the only
operational programme that supports innovations (Information System for Management and
Monitoring of the Structural Instruments of the EU in Bulgaria).
EU Structural and Cohesion Funds will be employed as the major policy lever to pursue Europe
2020 strategic goals on regional level. However, financial support is coordinated centrally and
allocated on a competitive basis.
Activities linked with Advanced Manufacturing
The South Central Bulgarian Region has the second biggest industry nationwide and it contributes
to 18.2% of the gross added value of the national manufacturing activities. Most of those are
concentrated in the urban areas, with Plovdiv being responsible for 56,4 %, of all industry. The
region is the second biggest Bulgarian producer of chemical products, pharmaceuticals, electronic
and optic output and it employs nearly a third of all workers in those sectors. Overall, the
manufacturing processes in the region are diverse and successfully compete in all areas of
industry with the rest of the country. Due to the large population, the South Central region
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employs a great number of industrial workers, such as the sector for production of natural rubber
and plastic, which engages 8,216 people in production. An important strength of the area is the
dynamic business sector and the high number of companies, involved with industrial production,
which demonstrates the depth and competitiveness of the market and its ability for sustainable
growth and resilience to shocks. An example of this is the production of machines with a
specialized purpose, which occupy nearly 8000 people and 22.8% of all national production and
engages 183 firms. This demonstrates that the industrial sector is not hostile to small and medium
business and does not have high entry requirements, which facilitates the current and future
growth of manufacturing.
The Plan for Regional Development seeks to strengthen the economic advantage of the South
Central region, through support for innovation, creation of stronger business clusters and growth
in technical education in order to ensure its long-term competitiveness on the market. In line with
the general national plan for regional enhancement, the region is to aim at strengthening the
internal urban connections as well as close cooperation with neighbouring regions.
According to this strategy, the breaching of the gap between urban centers and smaller
municipalities would improve the common economic climate and encourage further commercial
investments in advanced manufacturing. Special attention is paid to the role of the small and
medium business as engines for the establishment of a competitive and diverse market, which is
resilient to external shocks and can contend on a European level and set out an example for other
less industrial Bulgarian regions.
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South West Region (Yugozapaden)6
The Southwest (Yugozapaden) Region of Bulgaria is the second largest and the most developed
Region where the capital city of Sofia is located. The region has the largest share of the population,
the highest employment and lowest unemployment rates, and the highest concentration of
national research infrastructure in the country. Yugozapaden contributes 48.6% of Bulgaria’s GDP
and features the highest GDP per capita of €8,783 compared to the country’s average of €5,242
(2011 NSI). Although the region is the most advanced Bulgarian region, it lags considerably behind
the average innovation development level of other European regions and has considerable intraregional disparities.
Socio-economic profile:
The Southwest Planning Region of Bulgaria is situated in the western part of Bulgaria, and shares
a border with three countries - Greece, Serbia and the FY Republic of Macedonia. It has 20,306
square kilometres of area and is second in size of all the planning regions in Bulgaria. Of all the
regions, the Southwest region contains the largest share of the population - 29.2% or 2,128,783
people (2012 NSI data). Additionally, it has the highest employment rate of 52.9% (977.5 thousand
people) and lowest unemployment in the country of 8.8% (NSI 2012). The major administrative
districts are Sofia-city, Sofia region, Pernik, Kiustendil and Blagoevgrad. This is the most developed
region, contributing 48.6% of Bulgaria’s gross domestic product (GDP) of €18,72 b and gross value
added (GVA) of €16,20b (2011 NSI). It also has the highest GDP per capita of €8,783 compared to
the country’s average €5,242 (2011 NSI).
Although the Region is the most advanced Bulgarian region, it lags considerably behind the
average innovation development level of other European regions and has considerable intraregional disparities. In contrast to high levels of economic activity in the capital and its vicinity,
peripheral parts are lagging behind in economic development. The region has the lowest age
dependency ratio of 44.3%, 2012 National Statistical Institute (NSI) data. The ageing population
and negative natural increase however, remain a problem for the whole country.
The region has an abundance of natural resources, which are a prerequisite for the development
of fundamental economic activities. These include energy production, agriculture and tourism.
However, it experiences problems with the high level of environmental pollution.
6
https://ec.europa.eu/growth/tools-databases/regional-innovation-monitor/base-profile/yugozapaden
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The industrial sector was replaced in importance by the services sector, which currently provides
75% of the gross value added (GVA) in the region due to the abundance of skilled labour and
market availability. Industry contributes 24% to the GVA with the main industrial sectors being
metallurgy, machine building, energy production, chemical and food industries. The presence of
agriculture is most limited, compared to the rest of the planning regions in Bulgaria – 1% (NSI
2011).
RTDI profile:
The Southwest Region features a high concentration of national research infrastructure and is the
leading region in research and development (R&D) activities. It hosts some prominent
universities: Sofia University, the Technical University, the University for National and World
Economy, the New Bulgarian University, the Sofia Medical University, the Southwest University
"Neofit Rilski", the American University in Bulgaria, etc. Sofia University had the largest number
of citations and articles in the country over the period 2005-2011 (Scopus data). The Region also
ranks first in the number of students - 414,236 or 31.7% of all students in the country are studying
in the region (2011 Eurostat data).
It hosts many industrial associations, technology transfer offices and innovation centers such as
the Centre for Innovations at the Bulgarian Academy of Sciences, the GIS Transfer Centre, the
Business Information and Consulting Centre - Sandanski and the business incubator Gotse
Dalchev. The region generates 84% of all R&D expenditures amounting to € 212,969m (2012 NSI
data). Gross domestic expenditure on research and development (GERD) is 0.98% of the region's
GDP, a considerably high rate compared to the average 0.6% for the country but lower than the
1.03% in 2010 (2011 Eurostat data). Most R&D expenditures in the region come from the business
sector, with R&D expenditure (BERD) being 30.1% of the total GERD (2011 Eurostat).
The human resources in science and technology (HRST) in the region are 39.1% of the active
population, which is significantly higher than the 33.8% average value for Bulgaria for 2012
(Eurostat). Over half of the R&D personnel (63%) are concentrated in the South West region, due
to the presence of the capital city in the region and some of the prominent universities (2012 NSI).
Employment in high-tech industries and knowledge-intensive services is 6.15% of the total
employment of the region, again exceeding the 3.4% average for Bulgaria for the period 20032011 (2011 Eurostat). The region ranks first in the share of the population with broadband access
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- 54% (NSI 2011). It also has the most patent applications to the European Patent Office (EPO) by
priority year – 5.43 (2010 Eurostat data).
Latest Regional Innovation Scoreboard results
According to the Regional Innovation Scoreboard 2014, the South West region is ranked as a
modest innovator with an innovation performance below EU average but with the best
performance amongst the other Bulgarian regions.
Main weaknesses relate to very few SMEs introducing marketing or organisational innovations
(0.065) and low number of SMEs innovating in house (0.088). Moreover, there is a small number
of EPO patent applications in the region (0.078).
The main regional strengths are the population with tertiary education (0.408) probably due to
the number and the quality of universities in the region. Another strong feature is the
employment in knowledge-intensive activities (0.402). However, on both indicators the
performance of the South West region is below the EU average.
Governance Profile:
The governance of each district is implemented by a governor appointed by the Council of
Ministers. There are no governors on the Nomenclature of Territorial Units for Statistics (NUTS) 2
level. The district governor coordinates the activity of the district units of ministries, implementing
the industrial, research, higher education policies, etc. He or she also chairs the District
Development Council, which is an advisory body. The local authorities (municipalities) are strongly
dependent on the national budget for the financing of innovations and have little resources to
invest in this area. This is one of the factors that hinder the implementation of the Regional
Innovation Strategies (RIS). The alternative source of financing of innovation is through the
European Union (EU) funds, which in some cases have more importance than the national
mechanisms for the support of innovations. Different Bulgarian municipalities have various levels
of activity in applying for EU funds. The main sources of EU financing are the Horizon 2020
Programme, the Interreg programme, and Operational Programme “Competitiveness”.
Since 15 January 2009, the Bulgarian municipalities could also apply for credit to the Fund for
Local Authorities and Governments (FLAG). The fund was created by the Council of Ministers to
tackle the problem with the provision of financial resources for municipalities for developing
project proposals.
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The elaboration of the Regional Innovation Strategy (RIS) for the South West Planning Region
(2008) followed the example of the South Central Region's RIS (2004). It stresses the importance
of developing a regional knowledge economy, strengthening the high-technology orientation,
increasing collaboration between the units of the regional innovation system and the
development of human capital for innovations. The Regional Plan for the Development of South
West Planning Region was elaborated earlier and it has been updated in 2013 for the period
2014-2020. The plan’s first priority is to promote innovations as a key element of
competitiveness, by focusing on high-value added industries and high-tech products. Although
the RIS developed for the region was approved by the Regional Development Council, it was not
incorporated in the Regional Development Plan and thus remains a non-binding document.
Policy Profile:
From an historical point of view, Bulgaria has been a highly centralized economy and it has not
developed a regional dimension to its research and innovation policy yet. The country has only
recently begun to establish a regional element in its innovation policy through the elaboration of
Regional Innovation Strategies (RIS). The pilot RIS for the South Central Planning region of Bulgaria
was published in 2004. The other five Bulgarian regions have also developed RIS, in which were
published in 2008. Although the six regions demonstrated bottom-up activity in developing their
regional innovation strategies, these strategies did not receive support from the government to
launch their implementation. Hence, there are currently no innovation policy measures
implemented at the regional level. All innovation-related measures and support programmes are
coordinated centrally, at the national level.
The innovative companies of the South West region are the best performers under the two main
Bulgarian innovation and research funding mechanisms – the National Innovation Fund and the
National Science Fund as well as the Sixth and Seventh Framework programmes. By September
2013, the region has managed to attract €317,162,046 in contracted funds under OP
Competitiveness (1,037 contracts), the only Bulgarian OP supporting innovations (Information
System for Management and Monitoring of the Structural Instruments of the EU in Bulgaria).
EU Structural and Cohesion Funds will be employed as the major policy lever to pursue Europe
2020 strategic goals on regional level. However, the financial support is coordinated nationally
and allocated on a competitive basis.
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Source: Regional Development Plan 2014-2020
Activities linked with Advanced Manufacturing
The South West Region is the most economically advanced and industrially diverse region in
Bulgaria, largely due to the contribution of the capital, Sofia, which is the biggest business and
service center in the country. The region is a national leader in a number of advanced
manufacturing sectors, such as electronics and communication technologies, in which it is
responsible for 64.4% of all activity in Bulgaria as well as the engagement of nearly 10000 people
and 386 firms. The South West Region is also the main pharmaceutical producer, occupying 56.9%
of the national market, with the lead of the company Sopharma. Moreover, one third of the
Bulgarian automobile production is situated there, as well as a third of the processing of natural
rubber and plastic. Overall, the Sofia region has focused its industrial output towards advanced
and specialized machinery and chemical products.
The South West Region has a sever advantage in the area of technological innovation, and absorbs
83% of all resources, invested in that sector. This can be attributed to the high concentration of
scientific and educational institutions, mostly in Sofia, as well as the thriving business sector and
the highly spread infrastructure and communication links.
The Plan for Regional Development of the South West Region aims to strengthen its leading
economic position and serve as an engine for the general advancement of the Bulgarian industrial
practices. The economic shock of 2008 caused a decrease in foreign investment, which the plans
points out as a crucial step to innovation and technological improvement. It is also crucial to utilise
those investments in the most cost beneficial way, as at the moment the marginal utility of
financial assets is not high enough. Moreover, despite the relative stability of the South West
region in comparison to the rest of the country, the industrial sector was the most vulnerable one,
as the financial crisis showed, which gave services an even bigger advantage in the market. This
demonstrates that despite the developed industry of the South West, compared to the rest of
Bulgaria, the sector would need to constantly upgrade its technological base in order to possibly
serve as a gate for innovations in the country. The capital, which naturally attracts foreign
investment and is the initiator of economically progressive strategies, could use this advantage to
serve as a leader in the development and enhancement of the state of Bulgarian manufacturing.
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2.2.1
DELIVERABLE D4.3.1
Entrepreneurship, Competitiveness and Innovation in Bulgaria
General macroeconomic overview
Based on the data provided by a study titled “Innovation Strategy for Smart Specialization the
Republic of Bulgaria 2014 – 2020” and issued on the 12th of December 2014, the Republic of
Bulgaria (becoming a Member State of the European Union in 2007) is ranked 12th in area, 16th
in population and 22nd place in GDP in 2012 and 2013. The country is under a currency board
regime (binding national currency to the euro) and is characterized by industrialized, free market
economy, medium developed private sector and a relatively small domestic market.
In the latest edition of the Global Competitiveness Report of the World Economic Forum7,
Bulgaria is ranked 57th, 5 places up compared to the previous report. The country’s improved
competitiveness is the result of the combined effect of activities in the areas that are used to
assess the Global Competitiveness Index. In terms of technology readiness Bulgaria has moved
eight places up and occupies 44th position. The country has a remarkable result in access to highspeed internet, broadband internet access and the number of Internet users. However, Bulgaria
has dropped down in the higher education and training index (69th position, 6 places down) and
labour market (61st position, 12 places down). Performance is poor in the innovations index (2.97)
and institutions index (3.38) (rating Scale with a maximum 7). In order to improve its
competitiveness, Bulgaria needs to focus its efforts on improving the quality of the labour force
(increasing investment in education, with the introduction of mechanisms to accommodate the
needs of industry) and on stimulating the vigour in the demand and introduction of new
technologies, promoting the absorption of innovations by the market, building capacity to absorb
and adapt foreign technologies and knowledge
After the financial and economic crisis, Bulgarian economy is on a path of slow recovery due to
relatively low demand. In 2010-2011 the engine of growth was the external demand, while in
2012-2013 the focus was on the domestic demand. GDP growth in Bulgaria in 2012 and 2013
amounted to 0.8% and 0.9%. The state of economic activity in the EU has a direct impact on the
country's exports, and indirectly on consumption and FDI, therefore it can have a mixed impact
on future GDP growth. In comparative terms, GDP per capita in 2012 was 47% of the average for
ES28, which is the lowest level among the Member States. In turn, this position is directly related
7
http://www.weforum.org/reports/global-competitiveness-report-2013-2014
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to the level of productivity of the Bulgarian economy. Reaching the average level of income in the
EU requires catching up in productivity, which in the medium term is not possible without
technological modernization and changes to the business model of corporate governance.
Bulgaria needs an active integration policy for FDI and innovation policy at the sectoral level, to
build capacity in the labour force for the absorption and adaptation of modern technologies and
knowledge.
The slow recovery of the Bulgarian economy has an impact on the unemployment rate, which,
albeit slowly, has gradually increased from 9.47 % in 2010; reaching 11.3% in 2013. Youth
unemployment is a major problem for the existence of a competitive economy and active social
inclusion. Businesses still do not give priority to the quality of the workforce, which can be seen
in the limited investment in continued vocational training. Linking education with the needs of
the labour market, especially private business and high-tech industries, is a "bottleneck" in the
sustainable economic development of Bulgaria. It is necessary to link admission in Bulgarian
universities to the needs of professionals in these areas and increase the share of engineering
graduates and science and education initiatives in the utilization of new knowledge. The current
education structure is not conducive to transition to innovation-based growth.
Bad demographics (higher proportion of people over working age than those of working age) will
intensify workforce problems. Therefore Bulgaria should focus its efforts on reducing the dropout
from the education system by encouraging work habits formation and educating staff (secondary
and tertiary) in accordance with the needs of industry.
The Currency Board allows the maintenance of price stability by ensuring the stability of the
national currency.
It is expected over the period to 2016 for the budget deficit to gradually decrease - from - 1.5%
of GDP in 2014 to - 0.7% of GDP in 2016.
There is progress in the provision of electronic services by the tax and customs administrations
and the introduction of other facilities for citizens and businesses, and this has had a positive
impact on tax collection - a key aspect of macroeconomic development.
Grey economy remains a major obstacle to the achievement of sustainable economic growth.
Along with moonlighting work, it negatively affects the achievement of macroeconomic
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objectives, quality and productivity at work and social cohesion, reducing tax revenues and
directly affecting the underfunding of social systems.
2.2.2
Business support policy
Government policy in support of enterprises is based on two complementary approaches:
• Creating a favourable overall environment for business and
• Improving access to finance, both for start-ups and emerging businesses.
The main objective of the first approach is the implementation of a policy to reduce the
administrative and legal burden, reduce obstacles for trade, privatization and de-monopolization
and improving taxation, establishing e-government, as well as creating a positive public attitude
and entrepreneurial culture.
The second approach is realized through the implementation of diverse programs to support
entrepreneurs in dealing with specific problems - preparation for starting a business, financing
and investment, company growth, quality management, export activity, staff training and
development etc., all implemented by national and European programs and funds.
Bulgaria is the Member State with the lowest income tax on individuals (10%) and with the lowest
corporate income tax (10%) and is among the top countries with the lowest rates of VAT (20%).
Such a business environment is oriented to actively attract FDI and entrepreneurial development.
However, low corporate tax and low cost of labour are not sufficient to stimulate economic
development. They are not sufficient conditions for an export-oriented enterprise, seeking FDIbased technology. The strength of the Bulgarian entrepreneurship is the result of relatively
favourable business environment in terms of access to credit, investors’ protection and starting a
business. However, Bulgaria has serious weaknesses related to the performance of contracts,
addressing issues in bankruptcy, cross-border trade, obtaining building and production permits,
obtaining access to electricity8, which hinders the effective development of entrepreneurship.
The role of the state is to create and develop a sustainable environment and favourable conditions
for business. An independent and expeditious legal system must be in place. The business sector
needs the administrative burden to be reduced and the development of e-government, which will
8
http://www.doingbusiness.org/data/exploreeconomies/bulgaria
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not only accelerate the absorption of EU funds, but will also lead to better coordination and
monitoring of national and local policies.Simplifying and facilitating licensing and permits regimes is a priority for the Bulgarian
government. Work on the implementation of the already adopted packages to reduce the
regulatory burden on Bulgarian companies will continue and new packages will be included.
Measures will be taken to reduce to a maximum of 3 months the time required to obtain licenses
and permits to undertake and carry out a specific activity by an enterprise. By the end of 2015 the
Bulgarian government (in the Strategy for administration development) will continue employing
the rule that the introduction of a new license or registration will be balanced by the removal of
another such regime. Acceleration of bankruptcy procedures will be introduced providing a
second chance for honest entrepreneurs.
Bulgaria's place in relation to the global technological frontier and leading economies points to
the adoption of new technologies as a major area of innovation policy. This requires knowledge,
skills and the workforce capacity to absorb new technologies and accelerated especially in the
areas of their specialization. Bulgaria has the potential to develop the education of the younger
population, but at the same time much is to be desired as the transition to a higher stage of
technological development requires skills to adapt and develop in many new technology areas.
Given the low levels of performance and technology, the national policy needs to address not only
the expansion of education, but even more to focus on improving its quality; targeting the areas
of current and future demand, i.e. coordination of policies in innovation, education, training and
the labour market is needed.
Another important factor which will support the development of the innovative and high-tech
potential of Bulgarian business is ensuring its access to additional markets and sources of projects,
grants and commercial financing through the national membership of Bulgaria in the European
organizations and initiatives with activities in high technology. For example, by strategy and
membership of Bulgaria in CERN (European Organization for Nuclear Research), ESA (European
Space Agency), in European public-private partnerships for research and innovation.
European public-private partnerships aim at developing new technologies, products and services
that provide the European industry with a leading role on world markets. They are financed by
public funds from "Horizon 2020" research and innovation and private investment by leading
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industry companies for implementation and commercialization. SMEs can also participate. Joint
enterprises/Joint undertakings are entities that are created for Joint Technology Initiatives (JTIs.).
Bulgaria also participates in the competition for European awards for promoting
entrepreneurship. There is a preliminary selection of candidates at national level under the
leadership of the Ministry of Economy and Energy and the selected candidates take part in the
European competition. The aim is to identify and grant recognition to those who most successfully
promote entrepreneurship in Bulgaria and serve as an example in the implementation of policies
and practices in this area, by drawing attention to the importance of entrepreneurship,
encouraging and inspiring future entrepreneurs.
2.2.3
Sectoral specialization in manufacturing and services.
The analysis of the GDP structure after Bulgaria becoming an EU member shows relative stability
and emphasizes the importance of the industry and services sector in the economic development
of the country:
•
Agricultural Sector - 5%;
•
Industry - 25% (mining and quarrying, manufacturing, production and distribution of
electricity, heat and gas, water supply, sewerage, waste management and remediation
activities)
•
Construction - 6%;
•
Service sector - 64%.
In terms of the dynamics of the added value generated in the period 2007-2013, it is most
increased in the services sector (38.0%), followed by the industrial sector (33.0%), agricultural
sector (18.0%) with construction experiencing a negative change (9.0%).
Manufacturing is a leading sector, providing almost 80% of the production output. The share of
added value in production is highest in high technology activities:
•
High-tech activities - 35%
•
On average, high-tech activities - 23%
•
On average, low-tech activities - 11%
•
Low-tech activities - 24%
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Leading among medium and high-tech economic activities are medicinal products, computer and
communication equipment, machinery and metal products, where the share of value added in
manufactured products is between 30-35%.
Services sector creates 64% of total value added in the country, accounting for nearly 40% of the
value of services provided. Share of value added in the provision of services is greatest in hightech knowledge-intensive services:
•
Knowledge-intensive market services - 34%
•
Knowledge-intensive high-tech services - 51%
•
Less knowledge-intensive services - 32%
•
Other less knowledge-intensive market services - 40%
Within the high-tech services those that stand out are information technology (58%),
telecommunications (52%), information services (51%). The share of value added in providing
knowledge-intensive market services is greatest in legal and accounting services (61%) and in less
knowledge-intensive market services, particularly in trade, the share fluctuating between 43-49%.
Employment in industry is estimated at 617,000, with 525,000 in manufacturing only. Services
employ about 1 million, i.e. twice as many employees as in the manufacturing industry.
In terms of technological intensity of economic activities, employment is concentrated in
medium-low and low-tech activities (82%), as well as providing less knowledge-intensive services
(81%), i.e. in high-technology sectors of production and services provision 18-19% of employees
are employed in the manufacturing and services sectors.
To establish the comparative competitive advantages and production and export specialization
of Bulgarian products, the Balassa methodology96 was used. Comparative competitive advantages
(production and export specialization) were found for 85 product groups covering 79.5% of
Bulgarian exports in 2012 and 76% in 2011.
6 Estimates made cover 258 product groups (third level of aggregation according to SITC rev.4),
distributed according to the global technology intensity of each economic activity (KID2008). All
member states of the ES28 are taken into account, as well as Balkan non-member states.
9
http://www.mi.government.bg/files/useruploads/files/innovations/compadvantagesbg2014part1.pdf
http://www.mi.government.bg/files/useruploads/files/innovations/compadvantagesbg2014part2.pdf
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The share of high-tech exports was 5.6% (2012). This is owed equally to the production of
computer, electronic and optical products and manufacture of medicinal substances and
products.
The exports of medium and low-tech products (71%) are predominant, with 65.3% the result of
production and export specialization, which provides competitive advantages of Bulgarian
products in international markets. It is owed most to products as monofilament plastic fibres,
metal salts, energy producing facilities, fertilizers, electrical cables and conductors, machinery for
agriculture and forestry, household appliances, bearings (ball or roller), printed circuit boards,
resistors, apparatus for the management and distribution of electricity, bicycles, perfumery,
cosmetics and essential oils, forklift trucks, electric transformers and pumps in the group of
medium-high technology activities; ores of precious metals, lead, copper, zinc, packaging,
household glass, sanitary articles, vegetable fats and oils, ceramics, minerals and steel products
from the group of medium-low technological activities, and wheat, barley, corn , tobacco,
clothing, oil seeds and oleaginous fruits, preserves and more from the group of low-tech activities.
In seven product groups Bulgaria is a leader among EU member states and the Balkans in
comparative competitive advantages (Monofilament plastic fibres, metal salts, ores of precious
metals, lead, copper, oil seeds and extraction of "soft" oils, women's clothing).
In terms of technological intensity sectors (economic activities), the following conclusions could
be made:
•
Most businesses and most employees are concentrated in low-tech activities and they
generate the majority of added value;
•
In high-tech activities, labour productivity is above the national average;
•
82% of the employees are engaged in low-tech activities and they create 75% of value
added in technological activities;
•
Medicinal substances and products are characterized by a minimum number of employed
and maximum labour productivity;
•
Production of clothing is characterized by maximum number of employed, high export
orientation and minimum labour productivity.
In terms of sustainable economic development, the solution is increased productivity and added
value rather than the supply of goods and services at low prices.
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Two emerging areas stand out, which were identified during the stakeholders consultation. They
cannot be captured through the international standard classifications.
2.2.4
Geographical specialization
Bulgaria is traditionally a highly centralized country. During the past programming period all
regions in Bulgaria have developed Regional Innovation Strategies (RIS) under the auspices of the
European Commission initiative "Innovative Regions in Europe." A limited part of the measures
provided for in these strategies have been implemented due to the high centralization of decisionmaking and management. All measures related to innovation and support programs are
coordinated centrally.
The number of employed in Bulgaria is just less than 3 million. Around one third of them are
engaged in various economic activities in the territory of the South West Region, where the capital
is located. Another third of all employed are concentrated in two other southern regions of the
country - the south-central and southeast and the rest in the three northern regions. Therefore,
one third of all employed are in the three northern regions and the other two thirds are in the
territory of Southern Bulgaria.
From the analysis of economic activities that generate maximum employment in the areas of
planning it can be concluded that with the exception of the North West and North Central regions
in all other areas the potential for specialization is a fact. With the exception of architectural,
engineering, and activities in the field of information technologies that are among the leading
innovative activities, specialization in low-innovation activities prevails: food industry and related
activities, as well as the production of clothing and furniture.
The analysis of the leading innovative economic activities shows that specialization is
concentrated in the Southwest region, but there is potential for specialization in other regions too
- production of medicines, production of medicinal products and information services. Regional
potential for innovation specialization is observed in the production of pesticides, production of
measuring equipment, aircraft and spacecraft, chemicals, cosmetics and toiletries, electronic
components and printed circuits, production of general purpose machinery and others.
Employment in activities in the field of information technology and architectural and engineering
activities stands out. Scientific research in technical sciences combined with production of
software, production of computers and equipment for measurement, electronics, optical
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equipment, telecommunications, consultancy in the field of management and others are the basis
of the development of information and communication technologies and mechatronics. Despite
the concentration of these activities in the South West Region (mainly in Sofia), there is a potential
for future regional specialization. Another innovative area that concentrates employment is the
manufacturing of medicinal products. Along with research in medicinal science it forms the
existing and future potential for regional specialization in the field of pharmacy. Last but not least
we can reference engineering and in particular the potential for specialization in electric car
production.
From geographical point of view, the existing potential for regional specialization in leading
innovation is located diagonally from Southwest Bulgaria through central Bulgaria to Northeast
Bulgaria
2.2.5
Innovation capacity of the firms
The entrepreneurship in Bulgaria looks quite dynamic from view point of the number of new firms,
mostly before the crisis from 2008. Irrespective of that, the entrepreneurship is limited with
regard to the innovation activities in the new firms. The small and medium enterprises (SMEs) are
not often among the innovators: only 16% of the Bulgarian SMEs have had innovation activities
for the period 2004-2008, which represents the lowest percentage within EU. It seems that the
innovation activity is limited most of all to the big companies, while the small and medium
enterprises are to a high extent the traditional firms on fully developed markets in a standstill.
The innovative SMEs are most frequently "lonely riders" – i.e. they develop innovations for
themselves, but do not collaborate with external partners. Their innovations focus on labour cost
reduction and not on technology improvements.
Additionally, big Bulgarian firms have poor organizational capacity and no competitive advantage
on the export markets. They need improvements of the production potential and are cut off from
the regional and global value chains.
In Bulgaria, as well as in the other EU member countries, SMEs are of structural importance for
the economy and main driver for economic growth. In 2011, there were 365 484 SMEs in total in
Bulgaria, which was by 0.2% less than in 2010. For the period 2008-2011, the number of the
enterprises has increased by slightly more than 27 000 (10%). The entrepreneurial sector in
Bulgaria is dominated by micro enterprises with less than 10 employees. These enterprises
represent 91% of all companies and provide employment to 29% of the work force during the
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period 2008-2010. 75.5% employees in the country are working in SMEs (defined by EU as
companies with less than 250 employees). A study, carried out under the Seventh Framework
Programme has established that SMEs contribute for 37.8% of the total value added in the
economy and 31% of GDP. Moreover, micro enterprises incur the smallest R&D costs and
generate the lowest levels of the value added. Although the high levels of new firms registration
during the period 2004 -2009 may be an indicator for dynamic entrepreneurship (7.09 new firms
per 1000 people in active age created compared with an average value of 4.86 for EU), company
behavioural indicators show that the Bulgarian SMEs are much less dealing with innovation
activity than the companies in the remaining part of Europe. The sectoral distribution of SMEs
shows a clearly expressed concentration of enterprises mostly in the retail trade. In the R&D field,
where the labour productivity is nearest to the average labour productivity levels in EU, the
number of SMEs is three times higher than the one in countries like Slovakia, Hungary, Austria
and Denmark, in which the size of the labour force is comparable with the one in Bulgaria.
The small and medium enterprises (SMEs) in Bulgaria have a serious contribution to the
development of the economy – i.e. they generate more than 60% of the value added, 67% of the
turnover, and 75% of the employment among all of the enterprises. The Bulgarian SMEs are not
frequently among the innovators. During the recent years (2006-2010), the innovative enterprises
with a number of employees 10-49 is about 20%. Only 14% of them have technological
innovations, around 5% of them have sold new or improved products on the market, whose
turnover is only 1.5% of the total, and 18% of them have accomplished innovative collaboration.
Slightly better look the things in the group of the enterprises with a number of employees 50-249.
On the average the innovative enterprises are 33%, out of which 29% with technological
innovations, 10% of them have sold new or improved products on the market, whose turnover is
only 3.2% of the total, and 20% of them have accomplished innovative collaboration10.15
In one way or another, these data are among the lowest in the European Union. To a high extent
the Bulgarian SMEs introduce innovations related to cost reduction and to a much smaller degree
innovations related to new products and processes. 2/3 of the medium enterprises and about 1/3
of the micro and small enterprises have performed similar activities. The least frequently met
innovation activities are the ones related to the implementation of joint educational projects
10
Source: Innovation Union Scoreboard 2014
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involving the business and the academic communities – only about 9% of SMEs have participated
in such projects11.
SMEs are facing a series of impediments to become innovative. These impediments have a
negative effect on their growth potential and in many cases on their survival. Therefore, main aim
of the policy is the overcoming of these obstacles in order to provide an opportunity to the small
companies with a limited impact on the economy to become innovators with a high impact,
actively involved in the development of new products and processes.
Although the innovation capacity of the Bulgarian companies has been improved after the
accession of Bulgaria to the European Union and the start of OP “Competitiveness”, the whole
picture in this field nowadays shows achievements, which are significantly below the capacity.
The Bulgarian companies are spending 0.39 % of GDP for R&D, compared with 1.31% in EU – i.e.
the percentage is about 3 times lower. The ratio is analogical for the public expenditures. The
Bulgarian companies occupy 105 and 106 place in the world with regard to innovation and
business complexity12
The studies show that the aptitude for innovations of the Bulgarian companies is positive and
considerably correlates to their R&D costs and the connected with that investments in
technological infrastructure, as well as that their production is increasing together with their
innovation efforts, no matter whether the company is new on the market or not13.
As has been mentioned, Bulgaria is one of the countries, which are modest innovators. It occupies
the last place in the ranking of the member states. In one and the same spheres Bulgaria is
simultaneously showing strengths and weaknesses – a fact, which defines the innovation system
of the country as imbalanced. The practice of the innovation leaders shows that the balanced
innovation system is a precondition for success.
With view of RIS3 logics, the strategy focuses on the identification of the strengths and the
thematic fields with growth potential. The approach is complex and the Strategy also addresses
the main reasons for the unused potential of the country in the innovation field – i.e. low volume
of public and private investments in research, “brain drain”, insufficient mutual interrelation
between the scientific achievements and the needs of the industry, restructuring of the research
11
Analysis of the situation and Factors for Development of SMEs in Bulgaria: 2011-1012 – BSMEPA and NOEMA
Тhe Global Competitiveness Report 2013-2014
13
World Bank Report, Input to Bulgaria’s Research and Innovation Strategy for Smart Specialization
12
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financing from institutional into project and programme financing, need for clear vision and
priorities.
ICT plays the leading role regarding the determination of the innovativeness level; on the second
place is the implementation of business and marketing strategies in the management; on the third
place is the human resource development. Wider implementation of good practices results in
higher innovativeness. The second important factor, determining the innovativeness level, is the
access to financing. On the third place, regarding the determination of the innovativeness level,
are the internationalization and activity related to the intellectual property.
According to the conducted SME surveys in the beginning of 2013, 30% of the entrepreneurs in
the industry have declared availability of sufficient financial resources for intellectual property
registration. The share of the industrial SMEs with own registered trademark in Bulgaria or abroad
is 42%. The share of the micro enterprises with such registration is 27%, of the small — 47%, and
of the medium — 61%. The enterprises which own national patents are 20%. Registered patent
have 12% of the micro enterprises, this share for the small companies being 21% and for the
medium ones — 32%. The share of the micro enterprises, which have declared that they have
financial resources to register intellectual property, is 20%. This share of the small companies is
31%, and of the medium — 43%.
Every three of four industrial SMEs have a company web page. 78% of the enterprises have
electronic signature of the managers. 45% of the companies have possibilities for on-line orders
and sales and 40% provide possibility for on-line payments. 18% of SMEs have Customer
Relationships Management (CRM) system. The same is the share of these, which have introduced
Supplier Relationship Management (SRM) System and approximately this (17%) is the share of the
companies, which have used integrated management system for almost all processes.
The prevailing part of the managers of industrial enterprises thinks that their employees are
sufficiently well qualified (80%), and familiarized with the good practices in the sector (81%). More
than the half of the SMEs have ensured trainings of their employees and/or managers during the
last year — 53%. External specialized sale management trainings have been attended by 17% of
the companies – trainings related to the company professional field - 22% and trainings related
to ICT applications — 10%.
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More than half of the enterprises in the industry use developed short-term business plans with 12 year horizon - 57%. A significantly lower share — 17% have mid-term plans, while only 8% of
the SMEs1419 develop long-term plans.
Irrespective of the outlined strengths, the deviation from the best world achievements remains
significant, especially in the field of investments, basic infrastructure, knowledge creation,
dissemination and acquisition, creative goods and services, scientific research and ICT.
2.2.6
Human capital in research and innovations
Human capital is in the foundation of the competitiveness of the economies and the innovation
potential. Education is one of the most important factors, which directly influences the human
capital. The actual competitive advantage of a nation consists in its capacity for continuous
provision of highly qualified human resources. This process requires a long-term vision and careful
planning, since well-trained cadres needed by the economy (especially in the industries with high
value added), cannot be provided easily and quickly.
In the Global Competitiveness Report 2013-2014, Bulgaria is ranked in 90th place regarding the
quality of the educational system among a total of 148 countries, in 44th place regarding the
quality of primary education, in 74th place regarding secondary education enrolment and in 44th
place regarding tertiary education enrolment.
According to a study of the Programme for International Student Assessment (PISA)15 on the
degree of using scientific knowledge by the 15-year old students, Bulgaria occupies 28th place
among 29 studied European countries. The number of the students graduating secondary
education in the country is decreasing because of the low intake and the early dropout from
school – 12.5 %. In parallel with that, Bulgaria owns one of the most challenging demographic
profiles in the EU and the world. The population in the country is expected to decrease by 27
percent within the period 2010 and 2060, which will exercise a direct impact on the tertiary
education sector. Nowadays, the interest of the young people towards the natural and
engineering sciences is low – according to NSI data only 24% of the students choose to study
natural sciences, mathematics, technical sciences and architecture.
14
15
A Study of Entrepreneurship and Prospects for Innovations Development in SMEs (2012—2013)
http://www.oecd.org/pisa/
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Following the accession of Bulgaria to the EU in 2007, the tertiary education system helped the
country to strengthen its social and economic cohesion with the remaining part of Europe. But
irrespective of the achievements from the last two decades, the tertiary education continues to
face the challenges, related to quality, efficiency and reliability of the results.
The completion of educational-qualification degree bachelor, master or educational and scientific
doctoral degree (PhD) does not result in a higher remuneration on the labour market. Moreover,
the persons, who have acquired PhD, earn less compared with their colleagues in all European
countries with the exception of Romania. This difference in the remunerations and the limited
possibilities for a scientific carrier forces the young talents go to other European countries or USA.
The loss of a viable talent is one of the most sensitive problems in the Bulgarian scientific
environment, since it leads to a dramatic ageing of the scientific community.
The building of highly qualified and trained cadres is of key importance for improving the economy
competitiveness, increasing the potential for realization of innovations and making the country
more attractive for investments.
survey of the personnel, occupied with scientific research, with regard to the educational degree
reveals increase in the number of PhD holders, which may be explained with the ever bigger
number of young research cadres in the tertiary education and their strive for carrier promotion,
as well as with the relevant legislative requirements. The trend is explicitly ascending after 2000.
Compared with the previous 2012/2013, the number of the PhD students is increasing by 684
persons, or by 12.7%.
The distribution by age shows that the relative share of the PhD students aged 25 - 29 (35.7%), is
the biggest, followed by these aged 40+ (24.5%) and by these aged 30 - 34, who represent 21.8%
of all PhD students.
NSI data show that the research cadres in the natural sciences continue to prevail followed by the
research cadres in the technical and agricultural sciences.
The private sector plays an important role for the quality education. The state should encourage
the collaboration between the business and the educational institutions. It is necessary to ensure
conditions for adequate preparation of the students for work in a real working environment. The
introduction of a dual training system will guarantee the smooth transition from training to work.
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It is necessary to increase the entrepreneurial orientation among the young people. The
entrepreneurship training should become an inseparable part of the school curricula. The art
schools (23 schools in total in 15 settlements in the country) do not provide entrepreneurship
training and the students in these schools are the future of the creative industries in the country.
The conducting of ICT training in the higher educational institutions cannot fully meet the
requirements of the industry related to the human capital. One of the reasons is the lack of ICT
focus in the secondary education. The sector is lacking experts, and despite the big number of
graduates from the ICT specialties in the higher schools (about 3 thousand per year), the quality
of ICT education is not improving in the majority of the higher schools.
The small and medium enterprises continue to be leading with regard to the employed research
staff. This conclusion synchronizes with conclusions made in analyses of the European
Commission (EC) - small and medium enterprises are often more innovative, especially in the ICT
sector, since they are small and flexible, prone to risk and experiment. In other sectors though
(e.g. pharmaceutics and the foodstuff industry) serious investments are needed, which the small
enterprises can hardly afford.
Small number of the entrepreneurs is paying special attention to the quality of the work force,
which is noticeable from the limited investments of the enterprises in continuous vocational
training (CVT). Only 22% of the employees are involved with CVT, which links to 1.1% of the total
labour costs. This places Bulgaria in the lower end of the scale in Europe and speaks about
potential problems referring to the possibilities for acquiring new knowledge and technologies.
Percentage of the employees (all enterprises) participating in CVT courses and costs for CVT
courses as a percentage of the total labour costs (all enterprises).
Leading enterprises from the high-tech sectors have started own initiatives for cadre training. An
interesting revolution in the ICT sector represents the wide-scale initiative of the Telerik
Company. Through its Academy for Software Engineers the company provides quality, free and
affordable training for all young people, which ensures successful carrier start in the dynamically
developing software industry. Only during 2012-2013 academic year, more than 12 000 persons
have participated (attending or as distant learners) in the trainings of the Academy. The company
was elected the best employer in Bulgaria during 2007, 2010 and 2012. It is regularly awarded as
one of the best employers in Central and Eastern Europe.
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2.3
DELIVERABLE D4.3.1
Entrepreneurship, Competitiveness and Innovation in RCM & REMTH
The information included in this chapter is based on data collection and analysis provided by a
“Smart Specialization” internal Deliverable titled “Del. 3.4.1 Evaluation of the NSRF 2007-2013
Policy Mix in Support of Entrepreneurship, Competitiveness and Innovation” and issued in
August 2015.
In 2005, Greece’s innovation performance was in 23rd position of the 25 EU Member States. The
trends for two key indicators of future innovation, ICT investment and public RTD expenditures,
were negative and business RTD was static at a very low level. In addition, the business sector
found it difficult to innovate. However, there were strengths in the education level and the
percentage of university R&D funded by business. In the 2000-2006 period, 7.1% of ESIF resources
were allocated to innovation.
Among the interrelated thematic priorities of the NSRF strategy for the programming period 20072013, entrepreneurship, knowledge society, innovation and employment had a prominent place.
Investment in innovation would be mainly promoted in ERDF through the regional Operational
Programmes and the two horizontal Operational Programmes on ‘Entrepreneurship and
competitiveness’ and ‘Digital Convergence’ and through the ‘Education and Lifelong learning’
Operational Programme of the ESF.
The main types of measures in support for innovation foreseen for the programming period 20072013 were16:
Research and Technological Development (RTD): research and technological
infrastructures, increase of public spending on research, research networks, increase of
the private research;
Enterprises: support for entrepreneurship, innovation poles and incubators, innovation
support services, technology transfer, development of new product and processes,
international co-operation;
Access to finance: use and promotion of financial instruments;
Information Society: promotion of ICT for business and public services, strengthening egovernment services and extending e-health services;
16
DG Regio. Innovation in the National Strategic Reference Frameworks, Working Document of the DG Regional Policy,
31 October 2006.
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Human capital: promotion of a research and innovation culture at all levels of education,
improve careers of researchers including mobility and international collaboration.
All of the above are still relevant for the programming period 2014-2020, since they are directly
linked to the smart growth element of the Europe 2020 strategy.
Table 1 below presents the programmes/calls that were launched to implement the policy
measures discussed above, broken down per policy theme.
Table 1 Breakdown of the 2007-2013 Policy Mix
Policy
Theme
RTD
Policy Subtheme
Relevant Measures
Research and
technological
infrastructures
Increase of
public research
spending
Support to Greek partners in ESFRI projects (various)
Innovation Clusters (Infrastructure)
Green Island Pilot
Development Proposals of Research Organisations – KRIPIS
Bilateral Research Co-operation Projects (various)
European R&D co-operation (various)
Co-operation Action I: Small and medium scale collaborative
research projects
Co-operation Action II: Large scale collaborative research projects
CO-OPERATION 2011-Partnerships of Production and Research
Institutions in Focused Research and Technology Sectors
Support to Groups of SMEs for R&D Activities
Support to newly-established SMEs for R&D Activities
Industrial Research & Technology Development Programme
(PABET2013)
Extroversion – Competitiveness of enterprises (I & II)
ICT 4 Growth – Support of companies for the Implementation of
Business Plans relating to the development of high Added Value
Innovative Services.
Development – Support of new innovative enterprises, mainly
knowledge-intensive (spin-off and spin-out)
New Innovative Entrepreneurship
Manufacturing-New Conditions
Apparel and Footware-New Perspectives
Womens’ Entrepreneurship
Youth Entrepreneurship
Support to Self-employment
Support to SMEs through ROP (I & II)
Structural adaptation of enterprises during the financial crisis
Support of special population groups for entrepreneurship
Integrated interventions plan for supporting entrepreneurship
Development of Innovative Clusters-One Greek Product, One
Market: The Planet-Pilot Phase
Support for Cluster Formation in Microelectronics
Innovation Vouchers
Technology Transfer Offices in HEIs/PROs
Loan Guarantees (ETEAN)
Research
networks
Increase of
private research
spending
Enterprises
Support for
innovative
entrepreneurship
Support of
entrepreneurship
Innovation
support services
Technology
transfer
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Access to
finance
ICT
Promotion of ICT
for business
Supply-side of
ICT
Human
Capital
Promotion of a
research and
innovation
culture at all
levels of
education
Improve careers
of researchers
DELIVERABLE D4.3.1
Entrepreneurship Fund (ETEAN)
Enalio Fund (ETEAN)
Digi Lodge – Support of touristic accommodation establishments
for the development of internet sites for promotion and
applications for e-reservation
Digi Retail – Support of retail SMEs for the implementation of
digital investments
Digi Content – Support of SMEs for investing in digital broadband
content
e-Security – Support of SMEs for investing in digital security
ICT 4 Growth – Support of companies for the Implementation of
Business Plans relating to the development of high Added Value
Innovative Services.
Supporting Post-Doctoral Researchers
Excellence I & II
THALES (I, II, III), HERACLITUS, ARCHIMEDES (I, II, III)
Supporting Enterprises in Employing Highly-Qualified Personnel
Supporting Enterprises in Employing Researchers
As is it evident from Table 1 (text in bold)), there exist specific interventions that are directly linked
to the promotion of innovation. References of complementary analyses of interventions in
support of entrepreneurship in general, including the primary sector, need to be attributed to a
report commissioned by the Thessaloniki Chamber of Commerce and Industry in the framework
of the “Smart Specialization” project.
2.3.1
Grants for Public Research & Public Research Infrastructure
R&D has the characteristics of a public good as it generates positive external effects. Although
attempts to assess and quantify the economic and social benefits from publicly funded research
are beset by conceptual and methodological problems, a growing body of empirical work
demonstrates that those benefits are substantial and increasingly important17 18. In principle,
public research provides a knowledge base that, if properly harnessed, can underpin innovation
and provide several types of externalities (translate the research output into forms that can be
taken up by local actors, increase the availability of trained graduates, provide access to global
knowledge and improve problem-solving capabilities).
Table 2 presents the regional performance in approved projects in this category of interventions.
17
Martin, B.R. and Tang, P. The benefits from publicly funded research, SPRU Electronic Working Paper Series, Paper
161, June 2007.
18 Salter, A.J. and Martin B.R. “The economic benefits of publicly funded basic research: a critical review,” Research
Policy, 30, 509-532, 2001.
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Table 2 Regional Performance in Grants for Public Research & Research
Infrastructure
Call(s)
Bilateral R&T Cooperation
European R&T Cooperation
ERC Grant Schemes
Clusters-Phase II
KRIPIS
Totals
2.3.2
RCM
REMTH
RCM
REMTH
RCM
REMTH
RCM
REMTH
RCM
REMTH
RCM
REMTH
Public Funds
(€mil)
4.04
1.09
2.42
0.11
1.42
Private Funds
(€mil)
0.63
0.06
0.00
0.00
0.00
Total
(€mil)
4.67
1.15
2.42
0.11
1.42
2.09
0.67
2.76
4.72
0.00
4.72
14.68
1.20
1.31
0.06
15.99
1.26
R&D Subsidies for increasing private research spending
The economic rationale for R&D subsidies to the private sector is that the level of privately
financed R&D in the economy is lower than what is socially desirable. This is because R&D has the
characteristics of a public good as it generates positive external effects, which cannot be
internalized by the innovating companies. In the absence of public subsidies, projects that would
generate positive benefits for society but do not cover the private costs would hence not be
carried out. This type of market failure is the main reason for governments to subsidize private
R&D projects. Public funding reduces the price for private investors so that the otherwise too
expensive innovation projects are carried out. The policymakers’ objective is twofold regarding
R&D subsidies. On the one hand, the aim is to maintain national innovation capabilities, the
national R&D and employment level, especially in recession periods, where typically subsidies to
the private sector are preferred over public procurement because of the potential of additionality
effects. On the other hand, the government’s interest is to generate more innovation outcome.
Public subsidies can help the economy recovering from a crisis by fostering the creation of new
innovations leading to economic growth.
The positive effect of R&D subsidies on firms’ R&D activities, however, cannot be taken for
granted. In practice, firms always have an incentive to apply for public R&D support due to
relatively low application costs, even if the expected net return of the project is positive and
although the R&D projects could be conducted with own financial means. Once the application
was successful, firms can use the public grant to replace private with public investment. This is
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DELIVERABLE D4.3.1
called a “crowding out” effect19. If the majority of firms acted this way, public R&D subsidies would
lead the economy to a lower growth path in the long-term. The likelihood of crowding out may
be particularly high during recession periods as firms face declining sales and financial markets
that hamper the financing of R&D, a possibility that has been recently verified in the context of
German SMEs20. Firms may use the additional risk-free money to service short-term debt or to
maintain their production capacities.
A vast empirical literature has investigated the question whether R&D subsidy programs lead to
a crowding out effect or stimulate R&D activities in the private sector. The majority of the studies
find that R&D subsidies lead to an additionality effect, but, the impact assessment of public R&D
subsidies has been constrained by a lack of information and analysis on the following main
issues21:
1) the firm’s history of past and current subsidies (i.e., the frequency with which a firm
receives subsidies);
2) the time lag structure (i.e., how the potential effect of subsidies is distributed over time);
3) the firm’s internal liquidity and potential financial constraints;
4) the composition of firm R&D;
5) the amount of subsidy granted to the firm; and
6) the different sources of public subsidies.
Table 3 Financial Details for Subsidies in Support of Private-Sector R&D Activity
Budget
Call ID
(as listed in
text)
1
2
3
(Public Expenditure,
€mil)
Greece
93.62
127.68
23.73
LDR
28.4
40.74
7.4
Approved &
Contracted
Eligible Expenses
(Public Expenditure,
€mil)
Greece
LDR
(Public Expenditure, €mil, up to
31.12.2014)
Greece
LDR
92.11
27.9
49.6
14.95
98.39%
98.24%
52.98%
52.64%
107.9
33.42
42
14.71
84.51%
82.03%
32.89%
36.11%
14.44
4.65
4.04
0.76
19 David, P.A., Hall, B.H., Toole, A.A. “Is public R&D a complement or substitute for private R&D? A review of the
econometric evidence”. Res. Policy 29 (4–5), 497–529, 2000.
20 M. Hud and K. Hussinger, “The Impact of R&D subsidies during the crisis,” Research Policy, 44, 1844-1855, 2015.
21 Zúniga-Vicente, J., Alonso-Borrego, C., Forcadell, F., Galan, J. “Assessing the effect of public subsidies on firm R&D
investment: a survey”. J. Econ. Surv. 28(1), 36–67, 2014.
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60.85%
62.84%
17.02%
10.27%
7.93
2.24
2.22
0.614
70.30%
67.67%
19.68%
18.55%
16.92
3.94
2.93
0.654
85.45%
85.65%
14.80%
14.22%
11.85
0.46
1.212
0
89.37%
45.54%
9.14%
0.00%
239.3
72.15
100.79
31.688
86.67%
85.44%
Legend:
LDR: Less developed regions (funded by OP Competitiveness)
Source: OP Competitiveness Annual Report 2014.
36.50%
37.52%
4
5
6
Totals
11.28
19.8
13.26
276.11
3.31
4.6
1.01
84.45
A cross-examination of the call documents leads to the summary shown in Table 4, which
indicates that the core intervention logic of this group of interventions is rather fixed in terms of
eligible activities (industrial research and experimental development), eligible expenditure (as
specified by Regulation 800/2008 that was in force), financial intensity per participating SME
(mostly up to €100k) and project selection criteria.
Apparently, project duration was set on the basis of available time for committing eligible
expenditure (i.e., most projects should end by mid-2015). On the contrary, the thematic
concentration of the research seems to have followed the evolution of the national research
priorities.
The rather inclusive expression of applicant eligibility criteria should also be noted with respect
to the project selection criteria that regulate access to funding: path dependence is rewarded in
all calls, thus suggesting the Managing Authority’s intention to guarantee the interventions’
success.
Table 4 Summary of Delivery Instruments in Support of Private R&D Expenditure
Eligible
activities
Eligible
expenditure
Basic Research
Industrial Research
Experimental Development
Technical feasibility studies
Personnel; Instrumentation and Equipment; IPR licensing or
know-how acquisition costs; Contract Research by individuals
or by research organisations; Travel and dissemination;
Consumables and similar;
Protection of IPR costs
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1, 2
1, 2, 3, 4, 5
1, 2, 3, 4, 5
1, 2
1, 2, 3, 4, 5
1, 2, 3, 5
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Financial
intensity per
SME
Thematic
concentration
Eligibility of
applicants
Selection
method
Project
Selection
Criteria
Call specific
project outputs:
2.3.3
DELIVERABLE D4.3.1
Technical feasibility studies
€10k-€100k
€101k-€1mil
1, 2
1, 2, 3, 4 5
Specific sectors / Indicative research themes and budget
ceilings per sector
Specific sectors and research themes, no budget allocations
Open to all entities, must include enterprises and research
organisations
Three very small, small or medium enterprises and a R&D
performer
New enterprises, irrespective of their size and legal status
Any type of enterprise that had not received national or
European funding for R&D activities
One or more enterprises that had already completed a
financial year, operating in the thematic areas specified by the
call
Call for Proposals, single fixed deadline
Call for Proposals, two cut-off dates
Quality and reliability of the partnership; Scientific and
technological quality of the proposal;
Experience and prior research performance of the R&D
performers
Contribution to the national economy and the productivity of
the country and impacts on the operation or evolution of the
participants
Exploitation potential, impact for the participants, wider
impact
Exploitation and dissemination strategy
1, 2, 5
Project impact pre-assessment
3, 4
Each project should lead to a new product/service or a new
productive process that is readily exploitable by the
participants
3, 4, 5
3, 4
1, 2
3
4
4
5
1, 2, 5
3, 4
1, 2, 3, 4, 5
3
1, 2, 3, 4
3, 4, 5
3, 4
Subsidies for Knowledge Transfer Between Academia & Industry
Peripheral innovation systems have greater difficulty in transforming R&D and higher education
endeavours into economic benefits. Even though this problem is not uncommon in many
innovation systems, less developed regions and countries fall behind both in terms of business
innovation and absorptive capacity22 0.
22
Cooke, P., Piccaluga, A. (Eds.). Regional Economies as Knowledge Laboratories. Edward Elgar, Cheltenham, 2004.
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Their industrial structure is often concentrated in low or medium technology sectors and services.
Low and medium-technology industries play a relevant role in innovation, particularly in terms of
employment and production230. Consisting mainly of small firms and with few large technology
users in the local markets, R&D investment in these systems is dominated by the public sector.
The research personnel and scientific facilities are also concentrated in the public sector,
especially in universities. Although it is more acute in peripheral systems, this difficulty in
translating scientific results into the market in the form of innovation is well recognised in the
European context. As a result, governments are rethinking how to maximize benefits from higher
education and public research organisations for skills and development24.
In the innovation systems that are lagging behind, it is particularly important to understand how
universities can contribute more effectively to the innovation process in firms. It is also important
to establish evidence to support appropriate knowledge transfer policies. A body of literature has
emerged on the factors and motivations that lead firms to draw on knowledge from external
sources. Several studies have addressed the propensity of firms to establish links with universities
and how such links are related to innovation252627. Although it is important to note that universities
are ranked low as a source of innovation in comparison with other actors, such as suppliers and
business partners28, it has been found that knowledge transfers from regional universities may
enhance the capacity to innovate29. Some studies have explored the influence of structural and
behavioural factors on the probability of firms seeking out and applying knowledge from
23
Hirsch-Kreinsen, H. “Low-technology: a forgotten sector in innovation policy.” J. Technol. Manag. Innov. 3 (3), 11–20,
2008.
24 OECD. Higher Education and Regions: Globally Competitive, Locally Engaged. OECD, Paris, 2007.
25 Belderbos, R., Carree, M. and Lokshin, B., “Cooperative R&D and firm performance.” Res. Policy 33 (10), 1477–1492,
2004.
26 Laursen, K. and Salter, A. “The paradox of openness: appropriability, external search and collaboration.” Res. Policy
43, 867–878, 2014.
27 Mora-Valentín, E.M., Montoro-Sanchez, A. and Guerras-Martin, L.A. “Determining factors in the success of R&D
cooperative agreements between firms and research organizations”. Res. Policy 33, 17–40, 2014.
28 Perkmann, M., Tartari, V., Mckelvey, M., Autio, E., Broström, A., D'Este, P., Fini, R., Geuna, A., Grimaldi, R., Hughes,
A., Kitson, M., Krabel, S., Llerena, P., Lissoni, F., Salter, A., Sobrero, M. “Academic engagement and commercialisation:
a review of the literature on university–industry relations.” Res. Policy 42 (2), 423–442, 2013.
29 Larsen, M.T. “The implications of academic enterprise for public science: overview of the empirical evidence.” Res.
Policy 40 (1), 6–19, 2011.
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universities3031, although, in general, they fail to differentiate between types of knowledge flows
and consider university–industry interactions as a homogeneous whole3233.
The importance of knowledge transfer channels with universities varies according to the
predominant knowledge base in a given industrial sector. Some sectors that have an analytical
knowledge base (i.e., biomedicine, pharmacy, microelectronics) frequently engage in scientific
knowledge production with university researchers, resulting in codified R&D results such as
patents. Other sectors with a synthetic knowledge base (agro-food, the automotive industry,
metal industry, low and medium technology manufacturing) mainly require modes of transfer
based on the synthesis and recombination of various forms of knowledge. University and industry
links may also be relevant, but occur mostly through technical services, training, and staff flows,
and less in basic research. Examples include consulting, applied research, some types of analysis,
and access to special instruments. Moreover many manufacturing and services firms with a
symbolic knowledge base work in certain sectors (advertising, fashion, tourism, audiovisual
content and other cultural products) in which design, image and understanding of the
environment's cultural signifiers are important. They require specific channels of knowledge
transfer that may be found in universities, such as cultural consultancy work and expertise, to
gauge a product's social impact.
The above distinction is particularly important for interpreting the combination of exploitation
and exploration dynamics. Links between firms developing both strategies and public research
organisations are pivotal and occur more frequently than in other industries. Firms in scienceintensive sectors employ learning processes both in order to seek out future exploitation and to
understand the functioning of the complex issues behind a particular area of technological
expertise34. This is an additional explanation for why some high-tech firms also develop
exploration activities through university–industry links, aiming to facilitate the transmission of
30
Cohen, W.M., Nelson, R.R. and Walsh, J. “Links and impacts: the influence of public research on industrial R&D”.
Manag. Sci. 48, 1–23, 2002.
31 Uyarra, E. “Conceptualizing the regional roles of universities, implications and contradictions.” Eur. Plan. Stud. 18 (8),
1227–1246, 2010.
32 Jaffe, A.B. “Real effects of academic research.” Am. Econ. Rev. 79 (5), 957–970, 1989.
33 Laursen, K. and Salter, A. “Searching high and low: what types of firms use universities as a source of innovation?”
Res. Policy 33, 1201–1215, 2004.
34 Gulbrandsen, M., Mowery, D. and Feldman, M. “Introduction to the special issue: heterogeneity and university–
industry interactions.” Res. Policy 40 (1), 1–5, 2011.
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knowledge through collaborative projects, exchanges of personnel, participation in collaborative
centres and a variety of informal contacts.
Access to universities is extremely varied and responds to very different rationales, depending on
a firm's possibilities and strategies. It should be noted that R&D-related activities, especially if IPRbased, do not play a major role in most firms, even the more innovative ones. R&D-intensive
activities, particularly IPR exploitation, are possibly just the tip of the iceberg that emerges only
when firms have sufficient capacity and have engaged in a wide range of previous interactions
with universities. Given this, the situational context should be considered from a broader
perspective, which includes the different actors and institutions in the regional innovation system,
rather than focusing only on the role of universities. Governments should not concentrate public
incentives on specific interactions aimed at exploiting the codified knowledge available in
universities, but should aim to use incentives to adapt interactions to the specific composition of
the industrial fabric.
Table presents the financial details for this call while Table presents the regional performance
for RCM and REMTH.
Table 5 Financial Details for Subsidies in Support of Technology Transfer.
Budget
(Public Expenditure,
€mil)
Call ID
Approved &
Contracted
(Public Expenditure,
€mil)
Eligible Expenses
(Public Expenditure, €mil, up to
31.12.2014)
(as listed in text)
Greece
LDR
Greece
LDR
Greece
LDR
Innovation
Vouchers
8.40
2.20
2.90
1.19
1.70
0.68
8.40
2.20
34.52%
2.90
53.96%
1.19
20.28%
1.70
31.04%
0.68
34.52%
53.96%
20.28%
31.04%
Totals
Legend:
LDR: Less developed regions (funded by OP Competitiveness)
Source: OP Competitiveness Annual Report 2014.
Table 6 Regional Performance in Subsidies in Support of Technology Transfer.
Call ID
Region
Public Expenditure
Public Expenditure
(€mil)
(%Greece)
Private
Contribution
Total
(€mil)
(€mil)
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“Feasibility Study for the creation of an Interregional Entrepreneurship Zone”
Innovation
Vouchers
Totals
RCM
REMTH
RCM
REMTH
2.3.4
0.539
18.6%
0.000
0.539
0.084
2.9%
0.000
0.084
0.539
18.6%
0.000
0.539
0.084
2.9%
0.000
0.084
Support schemes for entrepreneurship and competitiveness
It is globally acknowledged that successful entrepreneurial activity is strongly associated with
economic growth. Governments should focus their effort on creating a culture that validates
and promotes entrepreneurship throughout society and develops a capacity within the
population to recognize and pursue opportunity35.
The competitiveness of an enterprise relies on its ability to offer a product, service, process or
solution at an attractive price, of a higher quality or with secure related services (packaging,
distribution, maintenance, customization, etc.). To do this the enterprise needs to enhance its
business efficiency, access external funding sources, invest in human capital, use market
intelligence, review its strategy, develop capacity to quickly adapt to customers' needs or to
market opportunities, build partnership and take advantage of social capital. Therefore, public
authorities can intervene and offer support services that can have the following forms:
access to proximity infrastructures (incubators, laboratories, testing and measuring
equipment;
counselling (business plan, innovation management, detection of barriers to innovation);
funding (grants, guarantees, loans, venture capital);
reinforcing human capital;
intelligence (technological and market watch);
networking;
innovation demand (public procurement).
Regions and businesses alike derive the bulk of their competitive advantages from factors
including:
reputation (image, brand name, etc.);
connection to global networks and infrastructure;
relations with partners (clients, suppliers, stakeholders, etc.);
35 Reynolds, P. R., Michael, H., & Camp, S.M. “Global Entrepreneurship Monitor: 1999 Executive Report”, Babson College,
Kauffman Foundation and London Business School. 1999.
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knowledge (internal, external, scientific, technical, intelligence-related, etc.);
processes of excellence;
relations to regulators (e.g. standardisation bodies, lead market initiatives and public
contracting authorities).
Moreover, the support services mix has to be adapted to the different phases of the enterprise
lifecycle that include: awareness raising on entrepreneurship; development of the initial business
concept; start-up creation; growth stage; expansion; improving business survival; and
globalization.
All of the above forms a matrix of very different factors that have to be considered while planning
suitable support schemes for enterprises. Especially with the negative effects of the economic
crisis in Greece the problem became even more difficult to be resolved.
2.3.5
Support schemes for the adoption of ICT from businesses
Although the positive contribution of information and communications technology (ICT) to
productivity and economic growth is beyond dispute, the academic and policy-related literature
is marked by widely varying findings and approaches to measuring the contribution of ICT. Most
approaches are based on a production function, in which inputs (production factors) are
transformed into outputs (goods produced). ICT is included as an additional production factor.
Growth accounting compares the documented investment in ICT with the goods produced. These
studies are mostly at the sectoral level. Econometric estimates are designed to quantify the
additional output generated by increased investment in ICT. This methodology is especially
applied at the firm level.
Growth accounting studies distinguish between the ICT contribution in a narrow sense (i.e.,
attributable to ICT investment alone) and the contribution of the knowledge economy (which also
includes the indirect effects of ICT on other sectors and production processes). Up to 80% of the
growth in productivity over the last few decades is attributed to the knowledge economy. The
vast majority of econometric estimates finds that ICT has a positive effect on growth. On average,
the studies consulted show that a 10% increase in ICT investment results in a growth in output of
0.5–0.6%36. In the last few years, this growth effect has actually been higher. This rising growth
effect is consistent with the increased ability of organizations to make optimum use of
36
T. Kretschmer, M. Cardona and T. Strobel. “ICT and productivity: a roadmap for empirical research”.
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information and communications technology. It is therefore particularly interesting to know
which complementary investments and capabilities contribute to the optimum use of ICT.
2.3.6
Support for Human Capital Development
For a region to grow in employment and per capita income, it must save and invest in human
resources to accumulate human capital. Human capital is an accumulated stock of skills and
talents, and it manifests itself in the educated and skilled workforce in the region. It could be
measured as person-years of education. The stock of human capital can be increased through
formal and informal education and/or on-the-job training of labor. Human capital, although itself
produced by human capital and labor, is a significant input in the production of knowledge or
ideas.
The rationale for mobility grants and attraction-retention schemes is that mobility of people is
one of the important mechanisms of knowledge transfer for innovation and growth. These
“spillover agents” transfer valuable knowledge from one region to another, and contribute to the
upgrading of regional knowledge pools by means of their mobility, placing regions or national
economies on a higher growth path. A knowledge-based society relies on highly qualified people
in all sectors of the economy and society, not only for high-technology sectors and research.
Intersectoral mobility programmes aim to increase employability, particularly in the case of young
graduates and researchers, by giving them hands on experience and to lever other types of
knowledge transfer. These effects are more profound if there is good alignment between the
research and teaching specialisation of the HEIs and the sectoral specialisation of regional
businesses.
Table presents the regional performance in approved projects in this category of interventions.
Table 7: Regional Performance in GSRT-Managed Grants for Human Capital
Development
Call(s)
ARISTEIA I&II
Supporting Postdoctoral Researchers
Supporting Enterprises in Employing Researchers
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RCM
REMTH
RCM
REMTH
RCM
REMTH
RCM
Public
Funds
(€mil)
10.90
1.63
3.33
0.91
0.95
0.09
0.49
Private
Funds
(€mil)
0.00
0.00
0.00
0.00
0.24
0.02
0.21
Total
(€mil)
10.90
1.63
3.33
0.91
1.19
0.11
0.70
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Supporting Enterprises in Employing Highly-Qualified
Personnel
Totals
2.3.7
REMTH
RCM
REMTH
0.07
15.69
2.70
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0.03
0.45
0.05
0.10
16.11
2.75
Synthesis and Conclusions
So far, we have discussed the policy mix in support of Smart Growth that was put forward during
the programming period 2007-2013 at the national level; region-specific data were provided only
in terms of the stakeholders’ ability to secure funding from various types of relevant
interventions. An assessment of the regional context in the two Regions is needed to complete
the picture. We do this by comparing a set of key Smart Growth-related indicators for the two
regions that are shown in Table .
Table 8 Key Smart Growth-Related Context Variables for RCM & REMTH (Source:
EUROSTAT, Last Updated Aug-2015).
Index, Dimension - Year
Employment in technology and knowledgeintensive sectors
Percentage of total employment – 2013
Agriculture
High-Tech Sectors
High-Tech Manufacturing
Low-Tech Manufacturing
Manufacturing
Knowledge Intensive High-Tech Srvs.
Total Services
Human Resources in Science and Technology
Percentage of Total Population – 2012
Total R&D personnel by sectors of performance
Researchers (FTEs) – 2011.
All Sectors
Business
Government
Higher Education
Private, non profit
Total R&D personnel by sectors of performance
Researchers (Headcount) – 2011.
All Sectors
Business
Government
Higher Education
Private, non profit
Patent applications to the EPO by priority year
Number per million inhabitants – 2009
Total intramural R&D expenditure (GERD)
Euro per inhabitant – 2011
Percentage of regional GDP – 2011
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RCM
REMTH
RCM:REMTH
15.1
1.60
0.50
7.3
11.0
1.40
68.6
28.8
1.20
n)a
5.0
8.1
1.00
55.7
1:1.90
1.33:1
NaN
1.46:1
1.36:1
1.40:1
1.23:1
23.9
17.0
1.40:1
4 565
794
432
3 305
34
940
63
35
842
0
4.85:1
12.60:1
12.34:1
3.92:1
NaN
8 564
1 077
668
6 770
49
2 170
128
48
1 994
0
3.95:1
8.41:1
13.91:1
3.40:1
NaN
5.92
1.65
3.59:1
97.3
0.67
75.8
0.57
1.28:1
1.18:1
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Index, Dimension - Year
Business Sector
Government Sector
Higher Education
Population - 2011
Regional GDP, €mil in current prices - 2012
RCM
0.16
0.10
0.36
1 882 000
26 109
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REMTH
0.17
0.04
0.35
608 182
7 653
RCM:REMTH
0.94:1
2.50:1
1.03:1
3.11:1
3.41:1
In terms of population, RCM is something more than three times bigger than REMTH (3.11x) and
slightly more productive in terms of GDP/capita (3.41x). However, RCM has managed to build over
time a considerably bigger research endowment in terms of headcount of researchers (3.95x),
which seems to be more productive in terms of actual research activity than that of REMTH (4.85x
in researchers’ full time equivalents). Although the total intramural R&D expenditure as a
percentage of GDP seems to be similar in both regions (1.18:1), the size of RCM has helped her to
establish a critical mass of researchers, especially in business enterprise and government
(aggregate headcount ratio 10:1) that seems to make the difference for the region. A considerably
higher percentage of graduates (HRST) in the population (1.40x) also helps. This is consistent with
the ESPON KIT project finding suggesting, “Returns to R&D (in terms of innovation performance)
are likely to accrue in those regions where a critical mass of R&D efforts and investments is already
concentrated.”
These initial remarks can help explain the relative performance of RCM and REMTH in getting
funding from the centrally designed and delivered policy mix for smart growth during 2007-2013.
Grants for public research and Public Research Infrastructure: As indicated in Table 2, the overall
performance of RCM in attracting public funding is 12.7 times higher than that of REMTH, a direct
consequence of path dependence in R&D investments that has resulted in some poles of excellent
research and the much stronger presence of public research centres (i.e., CERTH) in RCM. In
ARISTEIA projects (see Table 15), RCM over performed REMTH by 6.68 times. On the contrary, in
terms of the support for postdoctoral researchers (see Table 15), the relative performance of RCM
(3.65x) is consistent with the number of researchers in Higher Education (3.45x).
Grants for increasing private research spending: As indicated by the totals in Σφάλμα! Το αρχείο
προέλευσης της αναφοράς δεν βρέθηκε., RCM over performed REMTH by attracting 5.72 times
more public funding. Given that the project selection criteria for all interventions in this category
strongly favor path dependence in R&D, RCM’s share of the funding is attributed to the
considerably higher number of researchers in businesses.
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Support schemes for entrepreneurship and competitiveness: In this group, interventions cannot
be aggregated due to their variable scopes. In terms of the “New Innovative Entrepreneurship”,
RCM’s over performance is similar (5.10x) to that of the previous group of interventions, probably
due to the same reasons. RCM’s relative performance in attracting public expenditure for spinoffs/spin-outs (1.82x) is directly linked to its relative advantage in employment in knowledgeintensive high-tech services. For the two Extroversion calls, RCM outperformed REMTH by 11.35x;
this suggests that the entrepreneurial activity in the two regions has very different structural
characteristics. Finally, the 35x performance premium of RCM in ICT4Growth is consistent with
the baseline analysis of ICT supply side in the regional RIS3s: RCM is relatively strong while in
REMTH the sector is rather non-existent.
Support schemes for the adoption of ICT from businesses: The overall performance of RCM in
this group of interventions (3.72x) is slightly stronger than its relative advantage in regional
GDP/capita, thus proving the horizontal nature of the policy mix in stimulating demand in ICT.
RCM appears stronger in digi-lodge (6.37x) and digi-retail (4x), both figures being consistent with
the business structural statistics. REMTH’s performance in digi-content and e-security was higher
than expected.
Support for human capital development: We have already discussed the interventions in support
of human capital in HEIs/PROs earlier. In terms of supporting intersectoral mobility, i.e.,
enterprises hiring and employing researchers, RCM outperformed REMTH by 9 times, a finding
that is consistent with the former’s relative advantage in headcount of researchers in enterprises
(8.41x).
The discussion above has profound implications for the Regions’ propensity in attracting funding
from the sectoral programmes in the new programming period. This time, both RCM and REMTH
are classified as less developed and therefore will compete with Epirus, Thessaly and Western
Greece for maximising their share of funding from the same pot. RCM is better positioned than
all other regions in terms of R&D endowment, both private and public and therefore, with
everything else equal in terms of delivery, is expected to reap relatively greater benefits. The
remaining regions, including REMTH, will have to use their ROP funds wisely to initiate and
execute front-loaded capacity-building programmes that will permit them to maintain their
relative share of the public expenditure earmarked for the less developed regions.
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We have discussed the logic of intervention of individual calls (see appendix) and have found them
consistent with the overall objectives of the operational programmes that have launched them.
However, this does not guarantee completeness. Some very obvious omissions in the policy mix
of the programming period 2007-2013 are the following:
Grants for public research and Public Research Infrastructure: According to [EKT,2015], the
contribution of ESIF to the national R&D expenditure in 2013 was €296.5mil (20%). This amount
funded approximately 40% of the research expenditure in HEIs/PROs, therefore being a critical
source of funding for their sustainable operation. As discussed in sections 3.1.1 and 3.1.5, the
managing authorities used this funding to promote excellence in research and thus creating
opportunities for research groups to attract additional EU funding. However, an instrument for
supporting research to address regional issues is clearly missing. Such an instrument would
promote the relevance of research carried out by regional HEIs/PROs to the needs of the regional
economies and thus create a stock of knowledge that could be readily exploited by regional
stakeholders for innovation purposes.
Grants for increasing private research spending: This group of interventions seems to follow a
general theme (i.e., the PAVET programme) with some variations, as shown in Table 4. Given the
high level of demand that was recorded, the main theme seems to be appropriate for covering
the beneficiaries’ needs. However, R&D path dependence in project selection criteria seems to
constrain the degree of deployment of such instruments. Therefore, extending the eligible
population of beneficiaries is needed to leverage more private research spending. A first step in
this direction would be to reach out to enterprises with closer-to-market products or services that
require smaller research inputs (and budgets). Another possible step would be to rethink the
innovation vouchers, especially in terms of delivery (see our comments in sec. 3.3.3) and
introduce a small private contribution in acquiring them.
Technology Transfer (and Open Innovation): Although several technology transfer modalities
have been introduced in the instruments aiming to stimulate private research spending (i.e.,
contract research, licensing, dissemination), the systematic creation of linkages between
enterprises and HEIs/PROs has not been properly addressed both at the tactical (i.e., projects)
and the strategic (i.e., developing internal capabilities to commercialize or exploit knowledge)
level. A very diverse set of instruments is available for creating such linkages, which requires
intervention in both sides (i.e., enterprises and HEIs/PROs).
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Support schemes for entrepreneurship and competitiveness: The participation and project
completion performance in new venture creation support schemes indicates that initial planning
of the relevant interventions did not take into account the business lifecycle stages. There are
completely different set of support instruments for the pre-development, development and
growth stage of a knowledge intensive firm:
Stage #1 - Awareness Raising on Entrepreneurship. Entrepreneurial culture levels and business
development rates are extremely variable across regions. In some regions, business development
is strong due to market constraints (the “businessman by obligation” syndrome) while it is weak
in others due to a negative perception of business or an aversion for risk. Therefore, action may
be needed to stimulate awareness of entrepreneurship among the general population. Indicative
tools include business development – business plan competitions, entrepreneurship training and
relevant fairs.
Stage #2 – From business concept to development. According to a number of studies, there are
more potential than actual business developers. This is proven by the results of the two relevant
Actions (new innovative entrepreneurship and support of spin-offs/spin-outs) in the NSRF 200713. Appraisal systems (such as “proof-of-concept”) should be taken into considerations for giving
potential entrepreneurs, especially for innovation driven partnerships, support in order to identify
precisely the stakes of their projects. The same can be said of “investment readiness”, a concept
that aims to improve business project packaging for submission to investors.
Stage #3 – Development. When potential business developers are identified, an “acting out”
phase starts during which business development services have to carefully look for both the
qualities required in entrepreneurs and the credibility of their business proposition. Incubators
might play an active role for this task as well as other innovation support structures, since
developers need guidance to:
•
protect or secure intellectual property – including brands;
•
industrial designs or even trade secrets; leverage intellectual property;
•
globalise their market approach, market their products and services and survey
markets;
•
financing needs;
•
outsourcing of certain roles or services;
•
possible growth scenarios (internal, external, franchising, etc.);
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•
management and staff training needs;
•
tutoring, coaching, mentoring;
•
prototyping and preproduction.
DELIVERABLE D4.3.1
Stage #4 – Start-up. At start-up, support service needs may take a variety of forms including
incubation in the form of accommodation in a tech-oriented business incubator or nursery;
corporate real estate; direct advice or even tutoring; assistance in outsourcing certain non-critical
positions and selecting consultants; staff recruitment. The aim of this type of services is to enable
new businesses to survive the “death valley” – a life-threatening period occurring three to five
years into every company’s existence. Not all of the above support tools need grants to be
implemented, but other forms of financing like tax exemptions, venture capital or guarantees.
Stage #5 – Growth and/or expansion. Support services must try to reckon with the fact that
business growth can take one or more forms including product/service innovation through
quality, design, marketing and branding, distribution channels, geographical diversification, etc.;
innovation in the production process; innovation in the business model; innovation in the RTD
and innovation process; acquisition of other companies. Special notion is made for the
internalization path since it requires a different set of support tools for allowing the search for
international opportunities and growth of exports. Such support tools include: information and
promotion services; training services; custom-tailored services (for example bilateral contacts
between enterprises); specialist collective services for grouping the internationalisation
assistance services within a specific association, a cluster or an exporters' club; export Finance
Tools.
Support for human capital mobility: The policy mix for 2007-2013 essentially supported
unidirectional mobility of human resources, from HEIs/PROs to enterprises. There are also some
interesting opportunities in the reverse direction, i.e., from enterprises to HEIs/PROs, that have
not been considered.
Capacity building for managing Science, Technology and Innovation policy: The lack of such
interventions, especially at the regional level, has undermined the efforts to design effective,
place-based STI strategies.
The interventions that can be considered as successful in terms of beneficiaries demand are the
following:
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Grants for increasing private research spending. Two of the instruments in this group of
interventions were oversubscribed in terms of beneficiary demand: the Industrial Research &
Technology Development Programme (PABET2013) and Partnerships of Production and Research
Institutions in Focused Research and Technology Sectors (Co-Operation2011).
Support schemes for entrepreneurship and competitiveness: In terms of beneficiary demand, it
seems that the “New Innovative Entrepreneurship” was the most successful since the proposals
submitted were double than the projects approved (1147 to 474). According to the OP’s annual
report for 2014, many of the proposals could not pass the evaluation threshold for the “innovation
group of criteria”. However due to the high rate of dropout projects (almost 48% of the approved),
it seems that the participants faced serious problems during the implementation stage. Liquidity
problem is reported to be the highest obstacle combined with administrative issues by the
Programme’s procedures. For the forthcoming similar interventions the comments regarding
business lifecycle stage should be taking into account. The “Extroversion – Competitiveness of
enterprises (I & II)” programmes can also be considered good practice since it was appealing to
the group of companies that wanted to start or increase export trade activities. Due to the
increased interest on behalf of SMEs during the first phase of RFP, it was decided to run for a
second round. In this case also, a high rate of recalled projects has been reported.
Support schemes for the adoption of ICT by businesses: The specific Actions that were picked are
directly and solely contribute to the demand side of the ICT related sectors by supporting
enterprises of certain sectors to increase their productivity, extroversion and growth in general
with the adoption of ICT. All four interventions had relatively simple eligibility criteria, clearlydefined expense categories with obvious focus on acquisition of hardware, system s/w,
application s/w and related services. They also had a budget range that was suitable to enterprise
size with reasonable lower and upper limits. If we had to choose among these interventions in
terms of impact we would choose digi-lodge (1860 projects with € 28.93mil public spending) and
in terms of focus at an interesting niche we would choose digi-content. Both interventions got
positive feedback by the participants - with the monotonous exception of the administrative
delays - and reported positive impact on business operations.
Our analysis has highlighted several issues that can improve the delivery mechanisms, both at the
national and the regional levels and take into account the dynamics of what RIS3 calls
entrepreneurial discovery.
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Matching SMEs needs with the framework of a specific Action is the most crucial issue for the
high degree of acceptance on behalf of the potential beneficiaries. This was very well illustrated
by the OP Digital Convergence thematic Calls (digi-lodge, digi-retail, etc.) that resulted to the
higher participation rates and the broader acceptance of the terms of the Calls by the participant
firms. Calls with sectoral approach, or with a more integrated set of interventions to value chains
proved to be more manageable and easy to adopt by the beneficiaries.
From all field researches conducted during the implementation period of NSRF 2007-2013 the
issue of the high administrative burden imposed by the bureaucratic framework of almost every
Call is considered of great importance by the participants. Administrative procedures in every
stage of implementation from proposal submission to final payment seemed very demanding in
terms of effort and cost, produced big lead times, caused troubles to the liquidity of the firms and
created room for dispute and misunderstandings of the terms and obligations for the participants.
The negative effects of the administrative obstacles were more evident in the smaller size SMEs
or the start-ups that did not have the necessary capabilities to address them.
Another important aspect relevant to administrative framework was the evaluation criteria for
the project selection; in most of the cases, especially those concerning innovation support, criteria
were rather ambiguous and/or imposed conditionalities on projected business figures (increase
of employment, turnover, profits etc.) that contributed to the final evaluation score. Moreover
the conditionalities were associated to the final payments to beneficiaries. Overestimation of the
specific projected figures might have led to the approval of the proposal but presented difficulties
to cope with the goals set by the entrepreneurs.
A key element in many of the interventions discussed before is that they were single-deadline
calls that were launched during 2009-2010 and after a long period of project assessment, their
budget was irreversibly committed to the successful projects. Although exit strategies and
intermediary milestones involving go/no-go decisions were explicitly included in contracts, they
were hardly enforced by managing authorities. Although this approach is Managing Authorityfriendly, it hinders the dynamic nature of the entrepreneurial discovery process – a central theme
in RIS3, and reduces the motivation of project participants to over perform or at least, deliver on
time. Introducing some dynamic characteristics in delivery instruments might improve the project
outcomes and help reduce the lead-time between application and project approval.
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Another interesting feature of many different calls/programmes is that they actually deviate in
some details from a main theme. This would suggest considering the reduction of programmes to
the minimum (i.e., a single programme in support of entrepreneurship, a single programme for
private-sector research, a single programme for HEI/PRO research, etc) and adopting the open
call and periodic cut-off dates per year approach to accept and evaluate proposals. This, together
with the dynamic characteristics discussed above (annual project budgets, go/no go decisions
based on predetermined criteria) would help address the deficiencies in the existing delivery
methods.
Finally, regarding monitoring, a critical issue that came out during this study is the absence of
valuable data on outcome and impact. Official data from the Management Authorities or the
various Intermediate Management Authorities cover only basic financial output indicators and
are published with a significant lead time. Regional Intelligence Systems should be organized by
existing or new administrative structures responsible for gathering systematically business
oriented data (on the basis of the system of objectives that has been set and adopted) and
producing relevant reports for the on-going evaluation of the Actions. This could be implemented
either by field research being conducted during the implementation of the projects or by setting
a contractual obligation to all participants to feed with non-competitive strategic information the
intelligence system. The whole system would lead to:
•
measures to support companies;
•
names and location of innovation early adopters and fast growing enterprises;
•
transparent instruments to follow up applications for support to businesses, clusters
and research centres;
•
contribution of the various policies to innovation and entrepreneurship within the
Region;
•
benchmarking of regional innovation and entrepreneurship performance to other
regions.
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2.4
DELIVERABLE D4.3.1
Existing structures for business cooperation and clustering
The data and information explicated in this chapter are attributed to a report towards the
European Commission, Directorate General for Regional Policy, Unit I3 - Greece & Cyprus under
the title “RIS3 National Assessment: Greece” which was issued in December 2012.
2.4.1
Assessment of Cluster Policies applied in Greece
Greek cluster policies developed from the second half of the 1990s, predominantly through
research and academic initiatives and by an attempt of the State to replicate industrial policies of
other more advanced countries rather than in response to the needs of businesses, sectors or
regions.
The General Secretariat for Industry37 (GSI) launched the first policy initiative based on a largescale study 'The Future of Greek Industry"38 that was conducted from 1994-97. The study
concluded that there was a potential for establishing 19 clusters in various Greek industrial
sectors, an estimate that proved over-optimistic in practice. Neither the first call launched in 1997
under the Community Initiative for SMEs nor a second call via the OP for Industry resulted in a
cluster worth mentioning.
Despite this first failed attempt, the GSI pursued the effort under the OP Competitiveness39, in
2003, through the call ‘Promoting Industrial SMEs networking (clustering)’. Even though the call
was well-intentioned, it adopted cumbersome and bureaucratic pre-conditions and restrictions
both on the definition of a cluster and the eligibility of costs that made it unattractive. The
response was very poor: only three proposals were approved and only one took off. The GSI also
announced in 2003 the call "Strengthening Environmental Networks" for the promotion of
entrepreneurship in environment-related sectors. Two proposals were co-funded (the call
procedures were similarly bureaucratic) but only one project was completed without managing
to create even a rudimentary cluster or network.
An attempt was also made in a leading Greek sector, tourism and hospitality, with the aim to build
clusters on the already successful businesses of the sector. The call "Promotion of Networking in
Tourism SMEs (clustering)" was opened in 2005 and received proposals from only four small
37
http://www.ggb.gr
http://www.cibam.jbs.cam.ac.uk/research/projects/futuregreekindustry
39
http://en.3kps.antagonistikotita.gr
38
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clusters. By the end of the co-funding period none of them developed to be considered a good
practice and the intervention was unable to either build on success or to exploit the strengths of
the sector.
In short, up to 2005, the results of Greek cluster policy can be considered far from satisfactory:
none of the funded clusters developed a high-visibility nor provided a national model to follow.
Some of the factors that led the policies to fail were:
•
the design followed an authoritarian top-down approach;
•
the calls did not differ significantly from traditional business state aid measures, and
stringent requirements and restrictions placed constraints on the operation and
development of a cluster;
•
most Greek companies were not ready for strategic collaboration with ‘co-opetitors’ and
the calls were not preceded by sufficient ‘ground-work’ (seminars, workshops, special
meetings to present good practices to candidates, etc);
•
limited emphasis was placed on innovation and the connection with academic and
research institutes and policy-makers generally failed to grasp the necessity of the triplehelix;
•
the role of the cluster facilitator was underestimated and the calls requested the
facilitator to become a legal entity for purely administrative reasons;
•
the calls did not require evidence of prior cooperation between, at least some, cluster
members or the pre-existence of at least an embryonic network;
•
the calls prohibited the participation of large enterprises that in many cases are crucial
factors for the formation of clusters;
•
the calls did not consider that clusters have various integration levels which correspond
to different stages of maturity and therefore require a step by step approach, with
intermediate control gates and labelling levels;
•
and finally the monitoring framework adopted was similar to traditional state aid calls,
with no metrics related to clustering effects and results.
Overall, the policy was based on an assumption that a single call could develop flourishing
networks and clusters instead of establishing a holistic framework for the deployment of cluster
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policies with a long term strategy. In the meantime, already since late 2003 and in view of the
2004 revision of the OP Competitiveness, policies for innovation started to somehow alter. It
became evident that:
•
the knowledge economy requires constant interaction of innovation actors;
•
policies need to support specializations and concentrations;
•
calls need fermentation, exchange of views, technical sessions, workshops, presentations
and other preparations for the initiation and maturation of collaboration of candidate
participants on joint initiatives.
The first action to assist the formation and emergence of clusters, in this respect, was the Regional
Innovation Poles40, initiated by the General Secretariat of Research and Technology41 (GSRT). The
call preparation started in mid-2003 with series of meetings and discussions with technology
parks, research institutes and business representatives. The discussions were complemented with
the study “Regional Innovation Poles” that was delivered in 2004, recording the research,
technological and productive tissue of the Greek regions and proposing an implementation plan
and call bearing in mind the structural funds framework. Five regional innovation pole projects
were selected in 2007, after a competitive tender aiming primarily to underpin partnerships
between research institutions and businesses of the same region, to focus on one or two themes
per region, to launch technological platforms where diverse stakeholders would agree on a
common vision for the development of technologies that concern them and to create a critical
mass that would later evolve into clusters.
At the same time a second action towards a similar scope was the Thessaloniki Innovation Zone42
also instigated by GSRT. The aim was to develop innovation and high-tech activities in an area of
Thessaloniki, where there is high concentration of universities, research laboratories, technology
parks, incubators and businesses. The strategy of the Thessaloniki Innovation Zone soon focused
on selected themes that would eventually lead to the creation of a critical mass of companies and
clusters.
40
http://www.3kps.antagonistikotita.gr/epan/site/Beneficiaries/calls/t_docpage?doc=/docs/MainDocuments/Calls/Axo
nas_4/461_2005
41 http://www.gsrt.gr
42
http://www.thessinnozone.gr
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Both these actions started with high expectations but delivered mediocre results and failed to
develop into a recognized cluster. The development of the poles and the zone:
•
stagnated due to the failure of the stakeholders, including public administration, to
embrace the projects, mobilize the necessary resources and create the necessary
regulatory environment for the concepts to become functional;
•
had
an
overly
top-down-driven
approach
and
constraints
that
hindered
entrepreneurship;
•
had few planning/maturing activities and did not set out clear long-term measurable
objectives and roadmap;
•
were also hit hard by lack of long-term commitments, cash flow issues, central and
regional public services bureaucracy and poor management.
In 2004, as policy makers became concerned about the potential for Greek cluster policies, a new
approach was backed by the Research and Innovation Centre Athena43 and the most promising
Greek-based high-tech industries. The original vision of the founders was to establish R&D centres
of excellence that would attract investments in industrial sectors where a competitive advantage
exists. The aim was to reverse the accelerating brain-drain, to reinforce entrepreneurship and to
underpin the design and fabrication of products based on “Innovation Made in Greece” for the
world markets, in a similar fashion to what Taiwan, Korea and Israel have achieved.
Early in 2005, after a broad consultation with a significant number of stakeholders, the vision
found support from both the public and private sector. The failures/lessons learnt from previous
attempts were recognised after a study of worldwide best practices, a SWOT analysis and the
elucidation of the specificities of the Greek research and industrial fabric that was delivered early
in 2006 (phase-0). The vision, strategy and implementation track took form in the Hellenic
Technology Clusters Initiative (HTCI) that was established in 2006, and renamed soon after to
Corallia44, as an independent unit of the Research and Innovation Centre Athena.
The Ministry of Development mandated Corallia in 200645 to design and manage a programme
that would create a favourable environment for underpinning entrepreneurship and innovation
43
https://www.athena-innovation.gr
http://www.corallia.org
45
Law 3460, Article 15. Gazette 105, 03/30/2006
44
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and fostering emerging technologies in exports-oriented and high-technology market segments
where Greece had the capacity to build a sustainable innovation ecosystem and could attain a
worldwide competitive advantage and yield world-class results.
Due to the previous failures, the policy makers decided to implement initially a small-scale pilot
programme in one of the most promising sectors. In the period 2006-2008, the pilot cluster
programme (phase-1) implemented within the OP Competitiveness, yielded very positive results
through the establishment and expansion of the nano/microelectronics based systems and
applications cluster (mi-Cluster) and the milestones achieved by its cluster members such as
double-digit growth rates in turnover (+59%), exports (+109%), employment (+92%) and patent
applications (+137%). In the course of the pilot programme, Corallia inaugurated in 2007 the
Athens InnoCenter46 (Marousi, Attica), a thematic building that concentrated the mi-Cluster
members, creating a reference point for the microelectronics industry and optimizing the
geographic focus of the cluster.
In 2008, Corallia started the implementation of one of the most important interventions for the
development of clusters in Greece, the “Phase-2 Microelectronics” programme, within the OP
Competitiveness and Entrepreneurship47, including a dedicated measure48 covering activities
from the call for proposals to the monitoring of granted projects. The results were noteworthy: in
the period 2009-2011 the cluster companies exhibited an estimated growth rate of turnover
+145%, employment +70%, exports +108% and investments by private investors +369%; patent
applications grew by 76% (a total of more than 60 applications); while joint industry-academia
diploma and doctoral thesis grew by 160% (80 in total). Within this intervention, in 2011, Corallia
established one more Innovation Centre, the Patras InnoHub49 (Kastritsi, Western Greece) to
concentrate the mi-Cluster members in Western Greece.
The main features of the new approach can be summarized as follows:
•
based on international good practices;
•
deployed a clear bottom-up, customized, phased and holistic approach;
•
put strong emphasis on innovation and exports’ orientation;
46
http://www.corallia.org/el/Athens-innocenter
http://www.antagonistikotita.gr/english
48 http://www.corallia.org/en/research-a-development-projects/stateaid.html
49
http://www.corallia.org/el/patras-innohub
47
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•
focused on talent & people and niche market orientation;
•
insisted in a strong and sustainable cluster facilitator;
•
set a long-term strategy that outperform short-term gains;
•
determined long-term goals and integrated control gates with metrics;
•
deployed a plan-do-check-act management method for the control and continuous
improvement;
•
accepted no more than zero-tolerance to nepotism, corruption, discrimination;
•
designed the program with eligibility of actions based on needs of sectors instead of
limitations of funding frameworks;
•
invested in good publicity reaching out worldwide.
By 2008, Corallia had been widely recognized in Greece for its impact and had started its
globalization journey, with early recognition at European and global level. This rapid and
significant success rejuvenated the interest of policy makers and created a favourable climate for
cluster policies.
The heads of the Ministry of Development and the Managing Authority of the OP Competitiveness
and Entrepreneurship, the GSRT and the GSI looked again into the implementation of cluster
policies following the new paradigm, organized fermentation events, meetings with stakeholders,
participated in international events for clusters and special missions abroad to visit successful
clusters. This led to:
•
a two-step call by GSI in May 201150: The call, entitled “Clusters”, even though improved
in design from previous GSI calls, still had some stringent requirements and restrictions.
Most importantly, however, was the fact that even though the first step call gathered
considerable interest and was evaluated swiftly, GSI never announced the second step of
the call. Indeed, the GSI never informed the proposers of the reasons for discontinuing
the process, damaging the trust that had begun to be built around the government
strategy on cluster policies;
50
http://www.ggb.gr/%CE%94%CF%81%CE%B1%CF%83%CF%84%CE%B7%CF%81%CE%B9%CF%8C%CF%84%CE%B7%CF
%84%CE%B5%CF%82/%CE%A0%CF%81%CE%BF%CE%BA%CE%B7%CF%81%CF%8D%CE%BE%CE%B5%CE%B9%CF%82/
tabid/88/vw/1/ItemID/116/language/el-GR/Default.aspx
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a June 2011 update of the Incentives Investment Law (3908/2011)51 incorporated a
special chapter for clusters, is another rather imperfect example of cluster policies.
Mature clusters did not apply and the call received only one proposal (no official
announcement has been made);
•
a two-step call by GSRT in September 201152: the call, entitled "Establishing Innovative
Clusters - A Greek Product, One Market: The Planet", had a good design, received 21
proposals in the first round announced in September 2011, of which the nine highest
ranked proposals were asked to submit a final proposal to in September 2012. While some
improvements could be made to the design of this call, the most important deficiency has
been the extremely long time lag for evaluating proposals (more than 18 months) which
creates a concern about the capacity to follow up with the implementation of the
programme.
It is noteworthy that all the aforementioned actions have been designed and implemented at
national level. At regional level, apart from the preparatory actions and experience gained by the
Greek Regions through the RIS, RIS+ and RPIA projects and the Regional Innovation Poles no
cluster policies have been launched by 2012.
2.4.1.1 Assessment of Plans for National and Regional Cluster Policies in Greece
For the period 2014-20, clusters and cluster policies are being considered in the design of the
national and regional strategies53 as follows:
• National level: the General Secretariat for Research and Technology in the workshop organized
on 28 August 2012, a meeting held on 05 October 2012, in their presentations at regional
meetings in September through November and in their preliminary strategy for 2014-20, stated
that: a) smart specialization is in the core of their strategy, constituting one of its three main axes,
b) the following sectors that resulted from various studies will be considered for regional smart
51
http://www.ependyseis.gr/sub/nomos3908/n3908.htm
52
http://www.gsrt.gr/central.aspx?sId=110I458I1163I646I453967&olID=750&neID=589&neTa=1_618&ncID=0&neHC=0
&tbid=0&lrID=2&oldUIID=aI750I0I119I428I1089I0I1&actionID=load&JScript=1
53 The observations are based on the experts team’s meetings and on the proposals of the GSRT and the response of the
13 regions to the call of the Ministry of Development, Competitiveness, Infrastructure, Transport and Networks for the
design and preparation of the development plan for 2014-20; thus they are not based on any consolidated national RIS3
nor the RIS3-related strategies of other secretariats like the General Secretariat for Industry or the RIS3 of the 13 Greek
Regions. Wherever the text refers to a preliminary strategy for 2014-20, it means the above proposals.
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specialization: Food and Agro-Bio Food, Energy Technologies and Materials, Environmental
Technologies and Waste Management, Health and Pharmaceuticals, Information Communication
Technologies, c) clusters are considered as one of the tools for strategy implementation and
specifically for the “promotion of networking between businesses and research institutions”.
• Region of Attica: In both the 1 October 2012 meeting, and in the Attica preliminary 2014-20
strategy, the region stated that it targets “the creation of trans-sectoral, trans-institutional and
trans-business networks (clusters), with the aim to improve exports orientation and the
integration, production and promotion of innovation”, in all steps of the Attica 2014-20 strategy,
as well as “to attract new industrial and business infrastructure (business parks), with an emphasis
on collaborative activities (clustering) and innovation”.
• Region of Central Macedonia: Αt the meeting on 12 September 2012, the IMA of Central
Macedonia stated their intention to implement cluster policies; seven clusters are proposed
based on various mappings completed recently. The Central Macedonia preliminary 2014-20
strategy also provides one reference to clusters in the SWOT analyses; it considers “a technology
cluster” as an opportunity.
A noteworthy initiative undertaken by the Region of Central Macedonia is that of the
implementation of a cluster policy related Project funded by the South East Europe Programme
(2007 – 2013). ClusterPoliSEE54, funded under the 3rd strategic call for proposals and involving 24
partners of SEE Europe area, strives towards answering to the identified needs through the
improvement of capacity of regional policy makers to confront, prevent and anticipate change,
developing smart specialization strategies for cluster improvement, thus accelerating
differentiation and structural change towards a knowledge-based economy in which there is a
place for all SEE regions to position themselves.
• Region of West Greece: During the 29 August 2012 meeting, the IMA of West Greece stated
their intention to implement cluster policy measures for sectors with a competitive advantage,
including food and beverages, fisheries, agricultural products, tourism in the axis KatakoloAncient Olympia and high-tech sectors like microelectronics, energy/photovoltaic, chemical
industry, pharmaceuticals, transport and logistics. The West Greece preliminary 2014-20 strategy
54
http://www.clusterpolisee.eu/
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also provides hints to the implementation of cluster policies “on existing sectors with competitive
advantage after consultation with cluster members”.
• Region of Crete: At the meeting held on 17 October 2012, the Regional Authorities of Crete
stated their willingness to implement cluster policies for the sectors in which a competitive
advantage exists. Indeed, in the forthcoming period, the preliminary 2014-20 regional strategy
places an emphasis (priorities 1 & 3) on economic activities connected with the agricultural-food
complex (production, packaging, food processing, Mediterranean diet), the cultural-tourist
complex (hospitality, travel agencies, cultural capital, cultural activities), and the technological
educational complex (research centers, universities, technology park) and its connection to the
other two. The interventions proposed are related to the lack of regional competitiveness, the
limited propensity for innovation and entrepreneurship, the restricted commercialization of
research into marketable products and services, the lack of venture capital funds, the small scale
of firms and the low number of knowledge intensive firms. Clusters are not mentioned, per se,
but referred to in more generic terms, like, value chains, sectoral and spatial specializations and
integrated production complexes.
• Region of Central Greece: The region does not have previous experience of implementing
cluster policies, nor does the preliminary 2014-20 strategy make any reference to clusters as a
tool for regional development. The 2014-20 strategy document does refer, however, to the need
for specialization and actions it will take towards the development of specific sectors and, in
particular: the “existence of large processing units in the Region”, “the remarkable natural and
cultural reserve for the development of all forms of tourism”, “the large plains with of high
productivity”, “the strategic location of marine areas”, “the significant number of young farmers
that are familiar with the technology and new farming methods”, “the modern and competitive
facilities in aquaculture and fishery“, “the existence products with designation of origin”, “the
further development of mining as an opportunity”, “the existence of large companies with
specialized R&D departments”, etc.
• Region of East Macedonia and Thrace: At the meeting held on 4 October 2012, the Region of
East Macedonia-Thrace stated their willingness to implement cluster policies for the sectors in
which a competitive advantage exists. The preliminary 2014-20 regional strategy provides only
one reference to clusters in the SWOT analyses; it considers “a technology cluster” as an
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opportunity and as a threat the lack of a “modern perception and attitude about business
clusters”.
• Region of West Macedonia: In both 3 October 2012 meeting, and in the preliminary 2014-20
regional strategy, the region stated their willingness to deploy the Energopolis plan to implement
integrated interventions in selected clusters and geographical areas.
• Region of Peloponnese: The Peloponnese Region has no previous experience of cluster policies,
nor has it identified in its preliminary 2014-20 regional strategy clusters as a tool for regional
development. However, the regional strategy does refer to specialization and actions it will take
towards the development of key sectors.
• Region of Epirus: The preliminary 2014-20 regional strategy places a greater emphasis on
specific sectors. The development of clusters was identified as opportunities in the SWOT analysis
and at the meeting on 16 October 2012, the IMA of Epirus indicated they would seek to implement
a cluster policy for sectors with an identifiable competitive advantage.
• Region of Thessaly: The preliminary 2014-20 regional strategy identifies clusters as an
opportunity in the SWOT analysis for 2014-20 without giving further statements.
• Region of South Aegean: At the meeting held on 26 November 2012 and as mentioned in the
SWOT analysis of the preliminary 2014-20 regional strategy, the Region of South Aegean has no
previous experience on cluster policies, no cluster “culture” and no mature clusters operating in
the region.
• Region of North Aegean: At the meeting organized on 6 September 2012, the Intermediate
Managing Authority of North Aegean indicated they were willing to implement cluster policies
and programmes for the sectors where a competitive advantage exists, but that this would require
further study.
• Region of Ionian Islands: The Ionian Islands region has no previous experience in cluster policies.
However in the preliminary 2014-20 regional strategy adopted on 30th September 2012 by the
Regional Council, the region makes a clear statement on the specialization of the region and the
specific actions it will take towards the development of these sectors. In particular,
competitiveness priorities will be centered around qualitative improvement of tourist business
potential, linked to strengthening agriculture and manufacturing with an emphasis on local and
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organic products and regional "baskets" and promoting innovative business which link tourism
with culture.
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Assessment of Cluster Policies applied in Bulgaria
The data and information explicated in this chapter are attributed to a Deliverable of the project
“INNOSEE” which has been funded with support from the European Commission (Life Long
Learning Programme). The Deliverable was issued in December 2011 and reports the state of the
art in terms of Research Driven Clusters in Bulgaria.
According to this report, and following a rather late and hesitant start, cluster development in
Bulgaria gathered speed markedly in the last 5 years. Bulgarian companies are lagging behind
European SME in participation in clusters and clusters networks. In recent years, groupings of
enterprises have been established in some of the most dynamic sectors of the Bulgarian economy
(IT, wood processing, tourism, apparel & textiles, wine) Cooperation within these groupings
develops and transforms them into clusters. First cluster organization - Bulgarian Cluster for
Information and Communication Technologies Foundation (ICT Cluster) – was registered at the
end of 2004. Almost 30 clusters in different Bulgarian industries were established since then.
Six of these clusters can be identified as research-driven clusters (RDC). They rely predominantly
on research and development as a source of innovation and competitiveness. These clusters have
a strong science and research base. Higher education institutions and research centers play a key
role in them. The sector profile of these clusters is diverse and includes industries such as aerospace technologies, marine industry, microelectronics, and industrial digital systems. A traditional
sector in the Bulgarian Economy - furniture industry is also striving to build its RDC.
Over the last two years Bulgarian organizations are starting to participate in transnational RDC in
the sectors of biotechnologies development, food processing, waste management, etc. The state
recognized clusters as an instrument for promoting quick economic development and started
stimulating the development of such clusters. A National policy for cluster development was
formulated and it started providing financial and methodological support for existing and
potential clusters. In line with the acceleration in cluster creation, in 2009 the Bulgarian
Association of Business Clusters (ABC)55 was established with the aim of promoting cluster
development in accordance with the best European practices. ABC represents 20 clusters,
including over 250 Bulgarian companies, research and educational institutions, and NGOs.
55
http://abclusters.org/en/
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2.4.2.1 National and regional policies for RDC support
During the past seven years, there have been several projects targeted at increasing Bulgarian
competitiveness projects, funded by international bodies. These projects led to the stimulation of
recovering sectors of the economy (e.g. food processing, engineering, wine) and support for
growth sub-sectors with increasingly sophisticated markets (e.g. cosmetics, software, fruits, and
tourism). The PHARE funded project 9908:02 “Institutional Capacity building for the Accelerated
Growth of the SME Sector in Bulgaria” and a major USAID/MSI competitiveness project analyzed
and selected industrial sectors, and certain sub-sectors, as high-potential for RDC
implementation. In addition, the German Aid Agency GTZ has analyzed the engineering sub-sector
in particular.
The GTZ analysis of outlined 3 layers of activity: 1. Macro (or national) 2. Mezo (group or regional)
3. Micro (SME/local).
Macro Level:
•
The role of the government: creation of suitable framework conditions (infrastructure,
legislation
for
competition
protection,
transparency,
supply
of
strategic
information/technological studies, cluster studies, websites, etc.) for cluster formation.
•
Avoiding free-market and competition distortions.
•
Facilitation of network development within sectors and encouragement of emerging
clusters.
•
Promotion of innovation systems.
•
Removing system inefficiency and obstacles in from of emerging clusters.
•
Internalization of positive external factors in the field of science and research.
•
The government as catalyst and “broker” in cluster formation.
•
Designing cluster strategies.
•
Financial encouragement of clusters (co-financing, incentives).
•
Creation and encouragement of clusters must be induced by the market, i.e. to be a
bottom-up process.
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Both bottom-up processes (USA, Netherlands) and top-down processes (Scandinavia) can
be successful; however, by rule, the clusters emerge by themselves.
•
The encouragement should not concentrate one existing clusters only. It should include
high potential emerging clusters, the so-called “emerging clusters”.
•
Design and implementation of cluster development programmes.
•
Encouragement of cluster creation through public procurement policy.
•
The development of critical technological competences and know-how plays an
important role (e.g. Finland).
•
Reliable legal framework (legal security); socio-cultural grounds for trust.
•
The cluster policy should be viewed as a long and continuous learning process.
•
Success formula: “From direct intervention to indirect inducement”.
Mezo Level:
•
In a number of western countries the formation of clusters is initiated by organizing
forums, discussion of problems, and regular meetings of the enterprises.
•
Use of agencies in creating networks and encouraging (e.g. Danish Network Programme,
Dutch Innovation Centers).
•
Launching discussion forums and focus groups.
•
Launching Joint Industry Research Centers of Excellence (e.g. in Germany, Switzerland,
Sweden).
•
The high level of organization and existence of effectively operating unions facilitate the
cluster formation • Creation of regional incubators (e.g. Wales, Germany).
Micro Level:
•
Raise awareness about the competitive advantages of networks and clusters.
•
Organize forums, discussion platforms and regular meetings with enterprises.
•
In order to encourage clusters it is necessary to have existing cluster structures that are
worth encouraging; initiatives from point zero are deemed to be unsuccessful in many
cases.
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•
Encouragement of specialization and division of labour.
•
Cluster studies are an important tool for drafting strategies, and cluster encouragement
policies.
With respect to cluster development, the policy area in Bulgaria is rather heterogeneous, with
many policies facilitating and promoting cluster-related activities without being formally labeled
as cluster specific actions. In this context, the country does not make an exception from the global
pattern as government economic policies are typically aimed at creating favorable
macroeconomic conditions and improving the business environment. Clusters can play an
important role in positively influencing the efforts to boost competitiveness and innovation. Apart
from these general framework policies, a wide range of national strategies aiming at regional and
business development include specific measures in support of clusters. Making cluster support
policies part of broader research and innovation, regional, and SMEs policies, often makes them
more effective than those explicitly labeled cluster policies.
In the case of Bulgaria, several of the country’s strategic documents form the backbone of the
overall cluster policy mix that has outlined the support activities of public authorities from mid2000s onwards. One of the measures for implementation of the National Innovation Strategy of
the Republic of Bulgaria (2004) called for the development of clusters in the country and the
introduction of the best EU practices in that field. The action plan for this policy measure included
the creation of adequate framework conditions for cluster development, the set-up of advisory
and consulting centers to support cluster start-ups, the dissemination of relevant information and
the organization of training courses, the enhanced development of the R&D institutions network,
as well as the launch of cluster pilot projects.
The objectives and policy actions of the Innovation Strategy were updated and complemented by
the Operational Programme Development of the Competitiveness of the Bulgarian Economy,
2007-2013 (OP Competitiveness). The first priority axis of the programme was the development
of a knowledge based economy and promoting innovation activities. The axis is focusing on the
government involvement in assisting the development of R&D activities of the enterprises,
strengthening their innovation potential and establishing a favorable pro-innovative business
infrastructure.
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Similarly to other EU countries, Bulgaria has recently strengthened its efforts to elaborate and
implement cluster-related policies as part of the overall national policy in response to the Lisbon
objectives. The regularly updated National Reform Programmes (NRP) is among the strategic
documents that pay special attention to the support of cluster development through a
combination of measures falling under different policies. For example, under Priority 4 Support
for enterprises, entrepreneurship and innovations, the draft NRP of Bulgaria, 2010 – 2013 stated
that “considerable efforts will be made for the promotion of clusters and regional business
incubators development with a view of increasing the efficiency of enterprises’ production and
market performance”.
2.4.2.2 Operating, emerging and potential RDCs
Enjoying a strategic location, Bulgaria has the potential to play an important part in the
development of major energy, trade and transport networks that will further its integration in the
EU and global economy. During the past decade, the country has implemented a number of
reform measures aimed at aligning the legal framework with EU transport policies and improving
its transport infrastructure in order to build an efficient and balanced transport system. The task
of adapting rapidly to the changing context of international transport has prompted public
authorities to develop a number of strategic documents and policy actions. These efforts have
focused on addressing the challenges of the transport system efficiency and introducing
innovative solutions to critical problems. One particular goal has been promoting sustainable
growth of intermodal operations.
Our research shows that clusters in service sectors, such as transportation and logistics, tend to
be supported less by cluster policies in comparison with technology-intensive industries. While
this is a rather general issue, it clearly points to the necessity of certain fine-tuning in the
formulation of cluster policies and close coordination in their implementation on national and
regional level.
Another important issue in the development of a successful and sustainable cluster is the
provision of financial incentives by the government which, in the case of Bulgaria, appears to be
somewhat patchy over the past several years according to many clusters’ representatives. Yet,
the main challenge facing almost any cluster initiative remains the requirement for mutual trust
and active involvement on the part of each participant in the network.
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2.4.2.3 Main practices per RDC (i.e. cluster development and extension, new product
development, access to global markets, funding of new ventures):
Research driven clusters (RDCs) are a special brand of clusters centered on the need to use
scientifically-based management practices to advance firm competitiveness. To this end, they
must use advanced methods for monitoring the potential new entrants, expanding product
variety, gaining access to global markets, and funding their strategic plans.
The RDC use its advantage of having a research unit (RU) on site to monitor the market of local
incumbent firms and of potential new entrants. Having an indoor pool of scientifically-oriented
associates gives a powerful advantage over other clusters that monitor the market only
sporadically. The need to have a constant monitoring of the market structure around the cluster
is obvious. For example, a major player with a cost advantage might be entering the market and
becoming a new competitor. It is better for the RDC to have it within close reach and monitor it
carefully. In addition, the RDC may itself find appropriate to expand in an unexplored area and
develop a more comprehensive product variety.
Efforts to coordinate the cluster members so that they monitor successfully the market
environment do exist in almost every RDC in Bulgaria. This coordination is ensured by the so called
neutral moderator. The biggest challenge for the moderator is how to gain the trust of all cluster
participants facilitate a smooth coordination process. So far, no unified opinion on the neutral
moderators exists across the RDCs in Bulgaria.
Apart from attaining trust to efficiently expand the cluster into new markets, there is another
significant challenge - identifying the potential for a new cluster and founding it. As previously
mentioned, one success story in this domain in Bulgaria is the Intermodal transport and logistics
industry with several major players being identified as potential participants of an RDC cluster.
The major strength of Bulgaria in this industry is its geographical position on a crossroad of EU
transport corridors. This position is rendering the transport and logistics industry as one of the
natural candidates for an RDC expansion.
The identification of expansion niches and coordination of the process is the first step to the RDC
success. The second one is the development the technology necessary for the new product variety
to emerge as a new product. The research unit (RU) is the crucial player in this second step. It
either finds the appropriate technology worldwide and helps the cluster identify potential
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partners to outsource the technology development, or develops the in-house technology,
especially if the RU enjoys a strong engineering background. Bulgarian RDC clusters lag behind in
their cooperation with RUs around them. A major success story or a good practice on EU level in
the cooperation between the cluster participants and the RU is yet to be developed in Bulgaria.
Once the new product variety is engineered, the RDC needs to market it both locally and
worldwide. There is no doubt that the RDC has a strong marketing potential. However, the RU
plays an invaluable role here as well. Every RU has the potential to use statistical methods and
techniques to find the profit margins in a niche. It can then direct the cluster into the niche so that
the cluster benefits from a successful new product entry on the international market. Naturally,
the management of the cluster needs to take it from there, place the product and promote it
appropriately.
The international expansion of RDCs is hampered by major management challenges, mostly
related to a widespread unwillingness to cooperate internationally with other clusters within the
same industry. To ensure a successful international expansion, Bulgarian RDCs may benefit from
placing themselves not directly in the same niche as their international partners but close up or
down the value chain. For example, the Creation of Competitive Cross-border Clusters project
plans for development of three clusters between Romania and Bulgaria. Those clusters may
benefit from being within different industries but on the same value chain to avoid trust and
confidence issues: e.g. agriculture and food production on one side of the border, and logistics,
transport and international marketing – on the other side.
The RDC expansion and success would be difficult without the necessary support from the local
government and the supranational funding bodies. Within each state of the EU, there is a
powerful mechanism to fund innovation in the form of national innovation funds supplied by the
government. For example, there are a number of programs in Bulgaria directed either explicitly
or implicitly at cluster development. The Action Plan under the Bulgarian National Innovation
Strategy supported the set-up of advisory and consulting centers to support cluster start-ups, the
dissemination of relevant information and the organization of training courses, the enhanced
development of the R&D institutions network, as well as the launch of cluster pilot projects.
Further support measures were formulated and gradually implemented with the Operational
Programme Development of the Competitiveness of the Bulgarian Economy, 2007-2013 (OP
Competitiveness) and with the National Reform Program. Those are detailed further below,
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including some of the challenges which potential RDC members face when applying for financing.
To mitigate those challenges, the cluster body needs to work with the funding bodies and monitor
their own priorities. This would ensure the RDC has a higher chance of getting subsidized for at
least some part of the vast costs related to a new product development, to marketing it
worldwide, and to building new partnerships abroad, and successfully launching the RDC on a
growth trajectory. The RDC also needs to monitor the innovation priorities set out by the EU
Framework Programs, which are perhaps the single most important factor of research and
innovation-driven success in the Union.
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INTERNATIONAL BEST PRACTICES
European Best Practices within RIS3 implementation
To gather an impression of the state of play with regard to the spread of S3 related activities and
the involved administrations' current assessment of the RIS3 agenda, a Europe-wide online
survey56 was run by Fraunhofer Institute for Systems and Innovation Research - ISI57 during a
three month period from early July 2013 to late September 2013.
To broaden the scope of the analysis and to add analytical rigour to the interpretation of the 'pure
facts' collected through the online survey, qualitative interviews were conducted to develop a
better understanding of aspects that the online survey could not directly cover but which are key
to the interpretation of the obtained data. In detail, those concerned:
The regional framework conditions, regarding:
• Overall level of political support,
• Availability of sufficient human resources,
• Availability of sufficient professional capacity and experience in drafting strategies.
The current level of achievements with regard to the S3 process, regarding:
• The fact whether a strategy will be delivered within the agreed time,
• The quality and nature of the stakeholder consultation process ('EDP'),
• The overall quality of the strategy, if any,
• The question if new support measures or monitoring instruments have been launched,
• The level to which external assistance was needed to comply with the process.
To that end, case studies were selected following three main objectives:
• cover the breadth of main groups of European Member States (Central, South, East),
• cover differences within these groups with regard to governance systems,
• cover differences within those countries in which local governance systems differ.
56 From Smart Concept to Challenging Practice – How European Regions Deal with the Commission’s Request for Novel
Innovation Strategies
57
http://www.isi.fraunhofer.de/isi-de/index.php
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In detail, the following case studies were selected on the following grounds:
From Central Europe:
• Austria: as an often quoted best-practice example for RIS3-related processes,
• Germany: as a federal state with a strong tradition in regional R&D policy,
• France: as a recently decentralised state with notable capacity in R&D policy.
From Southern Europe:
• Spain: as a state with autonomous regions with capacities in R&D policy,
• Greece: as a state with weak regions and limited capacities in R&D policy.
From Eastern Europe:
• Poland: as a state with strong regions but limited capacities in R&D policy,
• Bulgaria: as a centralized state with limited capacities in RTDI policy.
Hereby we present procuratorial cases studies of the two of the three main groups identified in
terms of their dealing with the RIS3 agenda.
Firstly, countries with a strong tradition in regional innovation policy that may be sceptical about
the exact nature of the new regulations but also command sufficient resources and have an
intrinsic interest in implementing some sort of process. As a result, most have successfully done
so, drawing on either internal resources or subordinate think tanks. In our overview, this group is
represented by France, Austria and Germany.
Secondly, countries which have a comparatively strong regional echelon with respect to staffing
and political authority but face a lack of competence with regard to strategy building as well as an
at times challenging set-up of multi-level governance between central and regional governments.
In these countries, regional administrations often seek assistance from consultants. In our
overview, this group is represented by Spain and, to an extent, Poland.
The third group, in which the regional level is weak even in terms of staffing and politically relevant
public consultation in innovation policy without precedence is represented by Greece and
Bulgaria. In these countries, the strategy process is next to exclusively be performed by
consultants, while efforts at the regional level (if any) concentrate on capacity building and
implementation.
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In all three groups of countries, political ownership of and interest in the process differs from
region to region. Nonetheless, there is a general tendency that it will be lower in those contexts
where S3-type processes are alien to the local tradition of government. Moreover, the political
priority of such processes tends to depend on the overall challenges that a country is facing. In
countries facing severe impacts of the economic crisis, attention will often be focused on an
immediate response rather than long-term strategies.
3.1.1
Austria (Lower Austria)
3.1.1.1 Regional Framework Conditions
Lower Austria is regarded as a best practice example for establishing and implementing a smart
specialization strategy both by the European Union and other parties. As early as 1995, Lower
Austria took part in an EU-project which led to establishing its first innovation strategy in 1997.
Thus, Lower Austria was the first Austrian federal state with a regional innovation strategy built
on the consultation of different regional players. It became clear that some of the same issues
were handled by different agencies. The strategy helped to initiate a process of strengthening
core competencies. Currently, the Economic Strategy 2015 is in place.
The experience since 1995 has shown how important it is to talk to each other, especially to match
offers with the expectations of the target group. Since then dialogue processes are an important
element for strategy formulation. A main element is the steering committee which acts as a
platform for communication. The steering committee is comprised of representatives from the
government of Lower Austria, higher education institutions, research institutes, federal
government, the Vienna region, social partners, chambers of commerce, and other organizations.
Other important elements to achieving a constant exchange between policy making and the
economy are surveys among companies as well as enterprise dialogues on a regular basis with
small groups of firms. The surveys are carried out approximately every 5 years. Important aspects
are the innovation activities of firms and their needs regarding innovation support as well as their
satisfaction with the existing offering. More in-depth information and assessments are gathered
at the meetings with firms. In particular, these meetings aim at identifying new topics and issues.
While in the first years external consultants were involved in establishing the strategy, their
involvement has become more and more selective since 2005, e.g. to gather insights from other
regions or for running surveys among companies. First thematic foci were introduced in 2004,
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when Lower Austria implemented the Technopol Programm. Technopols are centers of
technology and business which are established close to recognized educational and research
institutes. They aim at bundling top-level education, research and business. Currently, four
technopols remain operative in the region. Furthermore, Lower Austria promotes clusters.
Currently, cluster promotion focuses on six clusters which were initiated between 2003 and 2010.
Apart from the thematically focused initiatives, Lower Austria was among the first regions to pilot
what was to become broadly known as the Innovation Assistant Program between 2002 and 2004.
Innovation assistants are graduates aiming at raising the innovativeness of their employer
companies by providing and transferring skills in the field of innovation management. The
program encompasses not only subsidies for labour costs, but also a mandatory training for the
innovation assistant. In 2010, evaluation results confirmed the positive effect of the technopols.
The quantitative analysis showed the contribution of technopols in terms of economic and
scientific terms. In addition, to direct effects, indirect and induced effects on value added,
employment, tax revenues and social security contributions could be identified.
Thus, the technopols have contributed to structural change. The publication of these results fell
into the time when the concept of smart specialisation was first discussed, explaining the broad
recognition of the best practice status of the Lower Austrian approach. What is more, Lower
Austria implemented further good practice examples.
In 2008, Lower Austria implemented a balanced score card (BSC) for monitoring and evaluation
purposes. The overall BSC for Lower Austria is established from a set of very detailed BSCs for
specific fields like cluster and networks or technopols. While the introduction of the BSC was
initially seen critically, the results generated the provision of direct feedback on the work of the
people in charge, so that now a positive assessment of the BSC prevails.
However, it is important that the specific aims are reviewed on constant bases and adjusted if
necessary. Further elements of the regional innovation strategy approach in Lower Austria are
insights from benchmarking with other Austrian regions and neighbouring countries as well as
analyses on economic and innovation trends (for example based on CIS data).
3.1.1.2 Current Level of Achievements
As Lower Austria is already regarded as a best practice example for establishing and implementing
a smart specialisation strategy by the European Commission, no major changes to the regional
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strategy will be required. Smart specialisation in Lower Austria can be regarded as a pyramid with
thematically focused and research oriented technopols at the top, cluster promotion with the
broader focus in the middle, and programs like the promotion innovation assistant forming the
bases for promoting innovation potentials economy-wide. The current Economic Strategy 2015
will be replaced by a subsequent strategy with a time horizon until 2020. Its development will
start in 2014 based on the experiences Lower Austria has gathered since 1995. However,
experimenting with policy tools will remain an important element. Thus, the current situation
must not be seen as an end of a development path, but as a process in which Lower Austria will
continuously aim to learn in order to promote regional innovation and development.
3.1.2
France
3.1.2.1 Regional Framework Conditions
From an overall perspective France has a long tradition of centralised state governance and
regional autonomy (the so-called "décentralisation") is a process which has been emerging
progressively over the three past decades. At the same time, in terms of innovation policy, the
French situation can be seen as very specific. Up to the 1980s and 1990s, the French innovation
system was clearly marked by strong state involvement, corresponding to what could be
described as an interventionist philosophy ('technological Colbertism', cf. Larédo, Mustar, 2001).
In an attempt to broadly characterize French innovation policy today, it can be stated that the
French innovation system is undergoing a profound transformation towards decentralisation,
reflected in the establishment of new actors, regulations and frameworks as well as new ways of
implementing strategic political priorities. Since France is at the crossroads between
centralization and decentralization, its governance system has become very complicated and
variable, involving several levels of regional and local actors as well as national and European
institutions. Different from the situation in federal states, no clear legal distribution of roles and
responsibilities has yet been fixed between French régions, départments and the central
government, resulting in complex multi-level/multi-actor processes in the design and
implementation of policies (cf. Muller et al., 2009).
The principle of regional equity, if not equality, has also shaped a distinctive French response to
the needs of a competitive, international knowledge-based economy. Networks and clusters of
scientific excellence, rather than the concentration of resources per se, have become preferred
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policy tools, demonstrating equality of opportunity to compete for scientific resources, if not
equality of outcome. This reflects a more gradual evolution in French policy towards equity rather
than equality as a precondition for competitiveness: "equity represents a means of striving for
equality within the reasonable limits of efficiency" (Baudelles, Peyrony, 2005: 109). Baudelles and
Peyrony note a changing regional development paradigm in which competition between
territories is no longer seen as a zero-sum game, a position supported by the rejection of the
notion of 'compensatory solidarity' by the most modern and progressive localities. The recent
development of S3 strategies at the regional level in France must be analysed and understood in
the light of this specific context. Considering the heterogeneity and diversity of regional contexts
in France, it was decided to conduct interviews in different French regions in order to better grasp
the diversity of changes and challenges in the field of RIS3-related strategy processes.
As in the case of Germany, we selected different régions (Alsace, Basse-Normandie and MidiPyrénées) that can be regarded as somewhat representative of the broad spectrum of French
régions both with regard to their socio-economic starting conditions as well as their governancerelated profiles. Alsace is the smallest region in continental France in terms of geographical size.
It is a diversified industrial region with a long tradition in chemical and textile sectors dating back
to the 18th century. The mechanical industry developed on the base of these sectors in the 19th
century. Alsace has today a very strong profile in science and fundamental research (three Nobel
Prize laureates are working for the Université de Strasbourg for instance), nevertheless the
production of technological knowledge and the rate of breakthrough innovations are rather
modest, and the business sector's R&D expenses remain below 1 % of the regional GDP. In BasseNormandie, the region's economy is still heavily agricultural (for instance, the region is the leader
in France in the sectors of butter, soft cheeses, cider apples, cider, etc.), the only other major
industry being tourism. Science, technology and innovation related activities are lower than the
national average in Basse-Normandie.
Midi-Pyrénées is the largest region in France in terms of geographical size (exceeding that of
Denmark or the Netherlands). The demographic and economic growth of the region over the last
few decades cannot be seen in isolation from the historical path, followed by technological
capacity in Midi-Pyrénées and from the changes affecting local research and innovation activities:
Since the beginning of the 2000s, Midi Pyrénées has been the top French region in terms of
investment in research and development relative to the region's GDP.
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3.1.2.2 Current Level of Achievements
In all three regions, the S3 guidelines did not prompt radical changes in policy actions at the
regional level in terms of strategy and implementation. This can be explained that all French
regions had to develop (at the instigation of Brussels) so-called strate-gies régionales d'innovation
(SRI) between 2006 and 2009. This process had to follow guidelines (designed as "méthode
Prager" in the jargon of French regional authorities, following the name of the principal
instigator58) which revealed to be a form of pre-stage for RIS3 processes.
Even in the course of these former strategy processes undertaken in the frame of the SRI, some
real advances have been realised that can be considered much in line with the RIS3-agenda’s
requirements:
−
changes in the stakeholders involved, i.e. more companies (in all three regions) and
universities (in the case of Basse-Normandie, the academic world being already
strongly associated previously in Alsace and Midi-Pyrénées);
−
a much more precise and specific definition of what can been seen as strategic areas
which gives us reason to think that the imperative of "specialisation" has been taken
seriously;
−
an inversion of the philosophy in terms of governance, the RISS3-related processes
appearing as much more bottom-up than the SRI ones.
Concerning the room for manoeuvre regional policy-makers had in terms of their options for
strategic choice, the two only limiting factors were:
−
the (quite logical) necessity to define areas of specialisation coherent with the fields
previously defined as strategic for the future according to the results of their SRI;
−
the exigency of thinking in terms of emerging markets for companies and not only in
broader categories (i.e. sectors of activity and/or techno-scientific fields).
This led to choices such as medical imaging (rather than life sciences and the health sector) in
Alsace, cyber-security (rather than ICT) in Basse-Normandie or embedded flight or nautical
electronics (rather than plain aeronautics) in Midi-Pyrénées.
58
Cf. http://www.datar.gouv.fr/sites/default/files/datar/guide-innovation-region-2008.pdf
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The most decisive point for the future in terms of application will probably be the development –
if any – of new policy tools and supporting measures. In this respect the respective regional
situations seem to be very different: Basse-Normandie is expected to produce important efforts
for developing new measures whereas Midi-Pyrénées so far considers its "tool box" as perfectly
adapted to its new strategy.
Alsace may be situated in an intermediate situation in this respect since new strategic
developments may require some adjustments in the near future. These differences can be easily
explained through the "starting situation", Midi-Pyrénées being for instance far more advanced
than Basse-Normandie in terms of innovation-related policy reflections and institutional settings.
More generally, turning to challenges and opportunities, the context of the economic and
financial crisis constitutes for all regions which were investigated at the same time an obstacle
and an accelerating factor. Interlocutors consider this as being true for their own region as well
as for the whole country. As such, the RIS3 agenda is seen as the determining framework shaping
the 2014-2020 support period for all investigated regions, indicating that this may probably apply
to other French regions as well. Likewise, some differences can be found between the three
regions with respect to perceived obstacles – that may again be easily explained through regional
differences in terms of "starting situation".
When talking about the key challenges in the current policy process, however, most regional
actors tended to focus on national, rather than regional challenges and opportunities. For the
moment, it seems, finding an adequate response to the challenging situation that France faces as
a nation tends to be perceived as more relevant and more urgent than addressing regionallyspecific issues. In conclusion, it can be stated that apparently policies of Smart Specialisation
emerged at the "right moment" in the case of French regions, keeping in mind that the emerging
dynamics of a multi-level science and innovation system pose challenges to a traditionally
centralized French state, with its commitment to balanced growth and regional symmetry (cf.
Muller et al., 2009).
3.1.3
Poland (Wielkopolska)
3.1.3.1 Regional Framework Conditions
In Poland, responsibilities for regional development policy have been decentralised since the
2007-2013 Programming Period, and the voivodeships (regional level authorities) are now the
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relevant decision-making and implementation level in these matters. Regional policies are
embedded in national strategies and follow the goal to efficiently use regional development
potentials for contributing to the national long-term growth, employment and cohesion
objectives. Roles and responsibilities of national, regional and locals levels are specified in
territorial contracts.
Generally, the majority of national development policies, including innovation policy, are
implemented as part of EU policies; innovation policy planning, funds and implementation are
directly linked to EU funds via the Operational Programmes. Like some other Polish regions,
Wielkopolska has a long experience with innovation strategy building that predates the 20072013 support period. The first "Regional Innovation Strategy" was conceived in the early 2000s
and, in 2011, the current, more in-depth, "Regional Innovation Strategy for Wielkopolska 20102020" was adopted by the regional parliament. In that context, the first broad-based consultation
process involving large companies, clusters, and research institutes started in 2010.
Furthermore, the region is active in various external networks (the Interreg project KNOW-HUB,
national-regional coordination platforms, etc.) and its regular exchange with external experts
promotes coordination and strategy-building processes. While strategy building and an outwardlooking perspective are thus not entirely new to the region, they were never directly connected
to sectoral policies in the past and not all coordination processes needed for RIS3 were previously
well established.
3.1.3.2 Current Level of Achievements
In the Polish region of Wielkopolska, three departments of the Marshal Office are engaged in the
RIS3 process and the drafting of the operational programme: the Department of Economy (main
responsibility for smart specialization strategy), the Department of Regional Development, and
the Department of Implementation of Regional Operational Programmes. In order to discuss and
prepare the new strategies and Operational Programmes, an interdepartmental team within the
Marshal Office was established. This process of initiating coordination processes was promoted
through engaging external experts. These inputs as well as a newly-established interdepartmental
office for strategy questions had positive effects on strategy building. Besides strategy
coordination on the regional level, exchange processes between regional and national levels are
important for aligning strategies on both levels.
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Two procedures which focus on coherence between national and regional strategies have been
set in place: (i) the World Bank was engaged to assess S3 processes in Poland, and (ii) a working
group comprising representatives of Poland's regions as well as of the key national ministries, the
World Bank, the European Commission and further advisors was set up. Despite having started
quite recently, this initiative proves to be very useful for boosting exchanges between the
different governance levels. With a view to content, the existing innovation strategy serves as a
basis for the new RIS3 strategy; regional stakeholders are currently working on the new document
and particularly on identifying fields for specialization.
The approach includes a comprehensive empirical analysis, consisting of a data-based statistical
analysis on economic specialization, a questionnaire-based analysis on innovation needs of
regional enterprises, and a specialization analysis for the science sector. Information of an
Interreg IVc project, the RIS3 guide and inspirations from other regions were taken into account.
Based on these elements, an expert team analyzed regional challenges and potentials in “new
economic sectors” and is currently matching the different fields. On this base, propositions on
specialization fields are formulated and presented to regional stakeholders, and will be followed
up and further developed by working groups for each specialization field.
Since the current process of defining areas for specialization constitutes a new challenge for
regional stakeholders, Wielkopolska initiated an advisory body on this issue, consisting of CEOs of
important regional enterprises, 10 mayors of the largest cities in the region and 10 chancellors or
regional universities. Both the evidence-based approach and discursive processes on
specialization are new elements of regional strategy building.
In the coming months, enhancing the management of the regional innovation system and thus
further learning "how to do innovation policy" is perceived as both a chance and a challenge.
Further aspects are to use internal competencies for efficient cooperation within the region, as
well as the integration of civil society. Additional crucial points for the near future are to generate
and enhance awareness and motivation for innovation, and, finally, to overcome foreign
enterprises' focus on production and to motivate them to engage in R&D and innovation activities
in the region.
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International Best Practices of Business Clustering and Cooperation structures
Data collection and analysis in the present chapter are attributed to a report developed for the
European Cluster Observatory59 in 2012 and a study prepared for the Ministry of Economy, Labour
and Entrepreneurship (MELE) and the Central Finance and Contracting Agency (CFCA),
Government of the Republic of Croatia in January 2012.
3.2.1
Cluster Policy in Europe
When the new literature on clusters in the early 1990s established their relevance in the modern
economy, most of the writing was focused on documenting and analyzing the presence of
clusters. But the compelling evidence that cluster presence was related to higher economic
performance almost immediately caught the attention of policy makers. In regions like the Basque
Country in Spain, where the traditional economy was in crisis and the government in need of a
new economic policy approach, these new ideas were quickly taken on board (Aranguren, Larrea,
& Navarro, 200660). At the time, however, the conceptual understanding of how cluster-oriented
economic policy should be organized was still in its infancy. There was also no experience or data
that could guide policy action.
The European Cluster Observatory has over the last couple of years made an important
contribution to a fact-driven policy debate about the role of clusters in the European economy.
At the level of the European Commission, it has informed a succession of reports written by high
level policy groups as well as Commission communications on clusters and cluster policy (see box
below). At the level of member countries, its data has been frequently used in policy discussion.
At the level of cluster initiatives, it has been a source of data as well as a platform for
communication and interaction.
3.2.1.1
Key European Cluster Policy Groups
The High Level Advisory Group on clusters was established in December 2006 under the Europe
INNOVA Initiative61 and was part of the activities of the Europe INNOVA project to identify and
analyze regional clusters in Europe. The High Level Advisory Group was chaired by Senator Pierre
59
http://www.clusterobservatory.eu/index.html
Aranguren, M. J., Larrea, M., Navarro, I, (2006). The policy process clusters versus spatial networks in the Basque
context. In C. Pitelis, R. Sudgen, & J. Wilson (Eds.), Clusters and globalisation (pp. 258–280). Cheltenham, England:
Edward Elgar.
61
http://cordis.europa.eu/innovation/en/policy/europe-innova.htm
60
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Lafitte, founder of Fondation Sophia-Antipolis and was composed of high level experts in the area
of cluster policy development, the business community and academia, representatives from the
cluster-related projects funded under the PRO INNO Europe initiative, and the Europe INNOVA
initiative, as well as representatives from industrial and regional associations. The Group’s work
resulted in the European Cluster Memorandum62 a document signed by many of the leading
regional development agencies in Europe outlining their commitment to the use of cluster
programs as well as their suggestions to the European Commission as to what the Commission
could do to strengthen the quality of cluster efforts across Europe.
In October 2008 the European Commission took the initiative to establish a European Cluster
Policy Group (ECPG) with a mandate to advise the Commission and Member States on how to
better support the development of more world-class clusters in the EU. Through an open call for
applications, 20 high-level members with a diverse background and outstanding expertise were
selected in March 2009 for a term of 18 months. The Group was chaired by Tea Petrin, former
Minister of Economy in Slovenia and professor at the University of Ljubljana. The ECPG presented
its recommendations for future cluster efforts in Europe at the first European Cluster Conference
held in Brussels, September 30th. The ECPG Final Recommendations – A Call for Policy Action
highlighted three principles and eight action proposals for EU institutions and Members States to
take on board. A complementary report (Consolidated Set of Policy Recommendations on Four
Themes) provided a summary of the suggested actions related to the four themes addressed
during the Group's mandate63.
Since early 2012, the European Forum of Clusters in Emerging Industries focuses on the role of
clusters as accelerators and drivers of emerging industries in Europe. The Forum is composed of
15 experts in the area of cluster policy, cluster management and cluster business.
3.2.2
Case Studies of Business Clustering and Cooperation structures
Having reviewed the general policy frameworks which exist within EU at an aggregate level we
will now go on to review the cluster policy situation in a number of specific countries. The
countries chosen, and the rationale for choosing them are set out in the table below:
62 http://www.proinno-europe.eu/newsroom/european-cluster-memorandum-sent-stakeholders- commitment-cluster-
agenda-0
http://www.proinno-europe.eu/ecpg/newsroom/ecpg-final-recommendations
63
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Country
Rationale of choice
Long standing and well developed cluster support systems.
Austria
Czech Republic
France
Germany
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Joined the EU in 2004 and underwent a rapid process of economic
transition.
Has developed a significant number of competitiveness clusters
(called ‘Poles de Competitivité’) with strong and long-standing
government support, which is focused on achieving innovations.
There may be lessons for Greece and Bulgaria in terms of effective
targeted government support.
Germany has a strong industrial base, high technological innovation
and transfer rates and clusters. It can be seen as an exemplar of
successful cluster development.
Cluster Policy in Austria
The main national policy documents, which govern overall cluster policy in Austria are as follows:
•
“Strategy 2020” developed by the Austrian Council for Research and Technology
Development.
•
“National Action Plan: Innovation” as part of the Austrian Reform Programme for Growth
and Employment - Ministry of Economy, Family and Youth. It should also be noted that
there is fairly strong devolution of executive power in Austria and therefore cluster policy
also has a strong regional dimension.
There are several layers of cluster policy implementation within Austria. At the Federal level, there
are several Ministries which collectively have responsibility for different aspects of cluster policy.
These include:
•
The Federal Ministry of Economy, Family and Youth;
•
The Federal Ministry of Transport, Innovation and Technology (BWVIT); and
•
The Federal Ministry of Finance (BMF).
There are a number of implementation agencies which have the responsibility for delivery of
various aspects of cluster policy.
These include:
•
The Austrian Research Promotion Agency (ÖFFG);
•
The Austrian Science Board;
•
The Austrian Federal Economic Chamber (WKO);
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The Austrian Institute for SME Research;
•
The Austria Economic Service;
•
The Austrian Business Agency;
•
The Austrian Science Fund;
•
Invest in Austria;
•
Austrian Council for Research and Technology.
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Given the diversity of Ministries and implementation agencies involved with cluster policy
formulation and implementation there is potential for problems in coordination to arise.
3.2.2.1.1
Regional Cluster Development Policies in Austria
Within Austria there are nine provinces and regions which have their own governments and own
economic development policies. Each region also has various economic development strategies
and specifically innovation strategies. For example, in Upper Austria region, the government of
Upper Austria is currently implementing “Innovative Upper Austria 2010 plus”64 which is their
strategy for the development of a highly innovative region which works through the following
clusters:
•
Automotive;
•
Plastics;
•
Eco-energy;
•
Furniture & timber construction;
•
Food;
•
Health technology;
•
Mechatronics;
•
Environmental technology.
Furthermore, through the Clusterland initiative, a number of networking activities are undertaken
for all of the clusters, including:
64
•
Human resources;
•
Design & media;
•
Logistics; and
See http://www.ooe2010plus.at/ for further information.
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•
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Energy efficiency.
The primary thrust of cluster development policy in Upper Austria is therefore to support the eight
clusters mentioned above. The specific focus of the policy is to encourage SMEs to become
involved with those clusters and to work collaboratively with each other and with local
universities and research institutions to develop new innovations and technology.
Another region of Austria which has a long-standing tradition of cluster development as part of
its economic development strategy is that of Styria (or Steiermark in German). Between 1980 and
1994, Styria could be characterised as a region in economic decline, dominated by heavy industry.
From 1994 onwards, Styria began to develop clusters and in particular, it started with the
development of an automotive cluster (“ACstyria”)65.
The Government of Styria has subsequently gone on to support the development of the following
clusters: • wood and timber; • human technology; • eco-technology; and • materials.
More recently, the Government of Styria has begun to support the development of food
technology and creative industries clusters.
The Styrian Government uses the Styrian Business Promotion Agency (SFG) to develop clusters
using the following process: • analysing fields of strength in the Styrian economy; • identifying
and engaging with leading companies; • describing the whole sector; • inviting the involvement
of the main research institutes; • informal workshops with selected companies; • defining key
fields of action; • invitations to participate and set up the cluster; • building the operative
structure of the cluster; • start of the actual cluster activities.
To a certain extent, this can be seen as a “top-down” approach to cluster development.
3.2.2.1.2
Conclusions
In general, the regional cluster and wider economic development strategies in Austria are aligned
with the Federal strategy of developing a knowledge-based economy, which is a leader in
innovation. Clusters are an important part of achieving this and regional governments are
generally highly interventionist in developing Agencies that bring together key stakeholders (the
65
See W. Schabereiter, et al. (2010) “Report on Clusters in Styria” available from
http://www.ebncbc.net/assets/clusters%20in%20styria%20sfg.pdf for detailed information on the clusters and
http://www.sfg.at/getattachment.php?source=downloads&node=3724&mod=&file=5807_WiSt_Steiermark_2020_W
achstum_durch_Innovati on.pdf for information on the current economic strategy being pursued in Styria.
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“triple helix”) to achieve this. The approach taken by regional governments can, to some extent
be described as primarily “top-down”. In overall cluster development policy terms, in fact the
regional governments are the main drivers of cluster development within Austria with the Federal
Government playing a more facilitative role in terms of creating a macroeconomic environment
and stimulating a wider innovation culture (through investments in innovation infrastructure) in
which clusters can thrive. A key lesson here for Greece and Bulgaria may be that creating a wider
innovation culture should also accompany intervention to create clusters.
3.2.2.2
3.2.2.2.1
Cluster Policy in the Czech Republic
The Cluster Policy Institutional Framework in the Czech Republic
Unlike in Austria, where responsibility for cluster policy is diffused amongst several Ministries, the
Ministry of Industry and Trade is the primary Ministry responsible for cluster policy in the Czech
Republic.
The primary policy document setting out the policy of the Czech Republic is the Operational
Programme Enterprise and Innovation 2007-201366 and specifically Priority Axis 5 “Environment
for Enterprise and Innovation” which builds upon the previous “National Cluster Strategy 20052008”. This programme is the primary mechanism used to identify the priorities for expenditure
of Structural Funds from the European Union and the Czech government.
The implementation of cluster policy is less diffuse than the situation in Austria, with the principal
implementation agency being CzechInvest.
3.2.2.2.2
Regional Clusters in the Czech Republic
45 potential clusters representing a wide range of sectors have received financial support of which
25 have been formally established with support from the Czech Government.
The population of the Czech Republic is currently estimated to be 10.2 million.
The Czech government links the development of clusters to regional development objectives.
According to a presentation by Hrebickova (2010)67, clusters can have the following benefits:
• They can improve the financial results of member companies;
66
Available from http://www.czechinvest.org/data/files/oppi-msc-en-29-11-schvalen-ek-674.pdf
67
Hrebickova, L. (2010) “Cluster Initiatives in Investment Promotion”, presentation in Jakarta, Indonesia, 18thNovember 2010.
Available from http://www.oecd.org/dataoecd/2/0/46485477.pdf
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• They help regional development (by generating new jobs);
• They increase the number of innovations, spin-offs, start-ups and support the development of
the regional research base;
• They increase exports and, as a ready-made supply chain, can attract inward investment.
An example of a successful regional cluster in the Czech Republic is the Moravian-Silesian
Automotive Cluster which was established in 2006 and is a Civic Association. The cluster has 43
members including 16 larger companies such as Siemens, Cromodora Wheels and Visteon
Autopal. The Technical University of Ostrava is also a very active member of the cluster. Members
of the cluster are part of the following sectors: • Motor vehicle manufacturing; • Production of
automotive component parts; • Automotive related supporting services.
Since establishment, the cluster has received funding of €0.86m from the government. Part of this
subsidy has been used to establish cluster laboratories. The laboratories have tested heating
installations and cooling equipment and the noisiness of components. They have been able to
cross-sell their services to other sectors (e.g. washing machine manufacturers) to test the
noisiness of their components.
3.2.2.2.3
Conclusions
The Czech government has shifted its policy towards cluster development away from a top-down
to a bottom-up approach. There is a very clear link between cluster formation, development and
innovation. The importance of universities and R & D institutes being members of clusters shows
that Czech policy is centered on ensuring that the “triple helix” operates. This is a critical
ingredient for financial support.
Furthermore, Czech policy has focused financial support. Although there are a considerable level
of financial resources available to support clusters this has been strongly targeted at key sectors,
including:
• Machinery;
• Biotechnology;
• Wood and furniture;
• New materials;
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• ICT; and
• Renewable energy.
Once again, the Czech Republic has a dedicated agency working with clusters in the form of
CzechInvest, although that agency also has responsibility for SME development and inward
investment as well. A similar agency to CzechInvest in Greece or Bulgaria may be one option to
consider furthering the support and establishment of clusters.
3.2.2.3
3.2.2.3.1
Cluster Policy in France
The Cluster Policy Institutional Framework in France
The main current national policy document, which governs overall cluster policy in France is the
French National Reform Programme 2011-2014.
More detailed discussion of cluster policy in France can be found in the publication
“Competitiveness Clusters in France”68.
It should also be noted that there is some devolution of executive power in France to the regions.
Regional government therefore also play a significant in supporting the development of clusters.
At the national level, there are two Ministries, which both have responsibility for different aspects
of cluster policy. These include:
• The Ministry for Economy and Finance; and
• The Ministry of the Interior.
There are a number of implementation agencies which have the responsibility for delivery of
various aspects of cluster policy. These include:
• OSEO;
• Agencie nationale de la recherché (ANR) - The French National Research Agency; and
• Caisse des Dépôts et Consignations - (CDC).
68
Available from
http://competitivite.gouv.fr/documents/commun/Documentation_poles/brochures_poles/anglais/brochure-anginternet.pdf
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OSEO and CDC are financing institutions owned by the French State. OSEO primarily funds SME
development. CDC is responsible for innovation funding through clusters. ANR is responsible for
funding both public and private sector research teams and does this through short-term
contracts.
At the regional level there are local agencies known as Direction Régionale des Entreprises, de la
Concurrence, de la Consommation, du Travail et de l'Emploi (DIRECCTE)69. Each region of France
has one and therefore there are 22 in total. The role of the DIRECCTE agencies are to support the
development of businesses and foster their competitiveness amongst other responsibilities
related to employment, skills development and consumer protection. They partly achieve this aim
through local support of clusters.
3.2.2.3.2
Regional Clusters in France
Unsurprisingly, the largest numbers of Pôles are to be found in the traditional industrial areas of
France, namely Paris, Marseille and Toulon, Toulouse, Lyon and Lille. It can be seen that there are
four regions in France (Poitou-Charentes, Corsica and the overseas departments of Guyane and
Guadeloupe) that do not have their own Pôles. 18 of the Pôles are considered to be “World Class
track” and the remainder national class.
The sectoral distribution of the Pôles is as follows:
Sector
Number
Aerospace
2
Agriculture/Agribusiness
9
Bioresources
3
Biotechnology and Healthcare
4
Chemicals
3
Consumable Goods
4
Ecotechnology and Environmental
5
69 The translation of this term into English is “Regional Department of Enterprise, Competition, Consumer Affairs, Labour
and Employment”.
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Energy
9
Engineering and Related Services
5
ICT
3
Materials
10
Microtechnology / Micromechanics
5
Optics
3
Transport/Automotive
3
The financial support to the Pôles is considerable and specifically in terms of public sector support
for innovation projects. According to the March 2011 of the information brochure
“Competitiveness Clusters in France”70, 889 R & D projects had received €1.7 billion of funding
from public sector support. 15,000 researchers had been involved in these projects and the total
R & D expenditure was €4.4 billion. Approximately 60% of R & D expenditure came from the
private sector. In 2007, 5000 companies were members of clusters and, of these, 80% were SMEs.
An evaluation of the Pôles was conducted in 2008 by the Boston Consulting Group (Boston
Consulting Group, 2008).
The key findings were:
• 39 of the Pôles had attained their objectives;
• 19 of the Pôles had attained most of their objectives but there were certain aspects of their
operation that they needed to review;
• 13 of the Pôles were underperforming and needed to reconfigure or otherwise risk losing their
title of Pôle.
Six of the 13 Pôles were stripped of their title in May 2011 and replaced by six new Pôles which
are focused on eco-technologies. France is a relatively centralised state even though there are 27
regions. The primary way in which regional councils can affect the development of clusters is
70
Available from
http://competitivite.gouv.fr/documents/commun/Documentation_poles/brochures_poles/anglais/brochure
internet.pdf
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through expenditure on infrastructure, which includes support to local universities and research
institutes.
Examples of world class Pôles include Aerospace Valley, which is centered primarily on Toulouse
(although its membership straddles both the Aquitaine and Midi-Pyrenees regions). The cluster
accounts for approximately 1,600 businesses employing around 120,000 people in the
aeronautics and space sectors. Approximately 8,500 researchers are working within the cluster
and membership includes two of the three most prestigious aeronautics and space engineering
schools in France. The cluster accounts for one third of all employment in aeronautics in France
and over half of all employment in space.
The cluster has more than 550 members (more than 250 are SMEs) and has a full-time staff
providing support to members. Services provided by the cluster include an annual members’
event, the possibility to attend strategic business sector seminars, access to sectorial studies,
networking and experience exchange and reduced cost access to international trade fairs.
Membership also provides opportunities for participating businesses to find partners for
innovation projects, obtain financial support from both French government and EU grants and/or
venture capital, participate in cooperation with overseas clusters and have access to skills
planning forums and access to an internet forum to advertise job positions.
Another leading world-class French Pôle de Competitivité is Eurobiomed which is one of eight
biotechnology-pharma clusters in France. The Eurobiomed Pôle developed as a result of a merger
of three separate clusters, Orpheme, Bioméditerranée and Holobiosud in 2009. The Eurobiomed
Pôle covers the Mediterranean coast of France.
The cluster covers 400 life science companies which range from small biotechnology companies
through to large pharmaceutical companies. There are approximately 3000 industrial researchers
working in member companies and a further 6,000 academic researchers working in these fields.
According to the cluster website71 there were approximately 200 members. Between 2009 and
2011 the Pôle attracted €69 million of public funding which was matched by €174 million of
private sector funds.
The services provided by the Pôle include: project development support including identification
of project partners and where to obtain funding, regular information and networking events,
71
http://www.eurobiomed.org/en
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international business development support (e.g. trade fairs, marketing support and international
conferences, etc.), facilitated access to expertise, technical resources and partner organisations
and working groups and forums on various issues related to life science development. The Pôle is
also active in trans-border European Union funded projects (e.g. EuroMeDiag) and at present
collaborates with similar clusters in Germany, Hungary and Spain.
3.2.2.3.3 Conclusions
French cluster development policy was initially “bottom up” in approach in that it supported
existing initiatives on the ground (the SPL were primarily based upon already existing networks of
producers). The Pôles de Competitivité approach brought in an element of “top down” planning
into the development of clusters but the Pôles are primarily private sector driven and the majority
of members are SMEs.
A key feature of French policy is the selective process, which has led to greater targeting of
financial support. This process was conducted through an open tendering process using open
selection criteria and a formal evaluation. In effect, there was an element of accreditation
although this was undertaken through bidding documents and therefore not in the same formal
sense as that conducted in Hungary through the Polus programme.
France has targeted considerable financial resources to the Pôles de Competitivité and latterly,
has not been afraid to withdraw funding and accreditation where targets have not been achieved
on the basis of an evaluation72. This evaluation of the original Pôles policy led to greater attention
(the so-called “Pôles 2.0” policy) being put on setting performance targets for cluster
management and effective networking amongst members, funding an innovation platform and
developing a stronger ecosystem for innovation and growth. This policy operated from 2009 to
2012.
The 2012 evaluation of the Pôles de Competitivité has made a strong recommendation that the
Pôles are continued for the period 2013-2020 with contracts organised for 2013-2016 and 20172020. It has also been suggested to increase the differentiation between the “world class” Pôles
and the “national” Pôles in terms of financial and policy support. How the third phase of the Pôles
72 See BCG & CMI (2008) L’évaluation des pôles de compétitivité 2005-2008, La documentation française, Paris. Only
available in French.
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de Competitivité policy programme (“Pôles 3.0”) will look is currently under review by the French
government.
The Pôles have been relatively successful in achieving their objectives of boosting employment
and innovation. They are therefore a possible model of cluster development for Greece and
Bulgaria to consider as it looks to develop clusters and cluster policy in the future. The model has
also been applied in a similar way in the Wallonia Province of Belgium. The Walloon regional
government has, since 2005, designated five clusters as Pôles de Competitivité. A further and
important point is that it has led to strong targeting of financial support to clusters and has
allowed substantial development of clusters, particularly in the area of innovation. This suggests
that Greece and Bulgaria also need to consider carefully how it distributes its financial resources.
The example of France suggests that targeting may be a more effective approach but it must be
backed up with strong evaluation and willingness to remove funding (and accreditation) where
clusters are not performing.
3.2.2.4
Cluster Policy in Germany
The German case is more complex due to the size of the country (the population is approximately
81.2 million making it the most populous country in the EU today) and the federal nature of the
political system.
3.2.2.4.1
The Cluster Policy Institutional Framework in Germany
The main Ministries responsible for cluster development policy are diffuse in comparison to the
other countries we have considered in this report thus far. The leading ministry is the Federal
Ministry for Economics and Technology. Additional Federal Ministries which also play a critical
role in cluster development in Germany include: the Federal Ministry of Education and
Research,and the Federal Ministry for Transport, Building and Urban Affairs which has had
responsibility for the economic regeneration of the new Lander formed during reunification of
Germany. There are several Agencies which operate under the aegis of the various Federal
Ministries and which have responsibility for supporting various aspects of cluster development.
One such institution, under the aegis of the Federal Ministry of Economy and Technology is
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Kompetenznetze Deutschland73 (Competence Germany) which promotes innovation and training
amongst networks (e.g. clusters) and promotes the 9 leading cluster areas in Germany, namely:
• Biotechnology;
• Health and Medical Science;
• New materials and chemistry;
• Production and engineering;
• Energy and environment;
• Information and communication;
• Transportation and mobility;
• Aviation and space;
• Micro, nano- and opto-technologies.
Due to the Federal nature of the German constitution, the 16 Länder have also been involved in
the development of cluster development strategies on their territories.
There are also 38 Federal-funded Research Institutes in Germany including: the Federal Institute
of Hydrology, Paul Ehrlich Institute, Germany Institute of Medical Documentation and
Information, etc. as well as autonomous research institutes such as the Leibnitz Association, Max
Plank Society, etc. €856m was spent by German Federal Research Institutes in 2010.
The only relevant strategy to cluster development that is current within the Federal Republic of
Germany at the Federal level is the Federal Ministry of Education and Research’s “High
Technology Strategy 2020”. This is a successor to the first “High Tech Strategy 2010” which was
launched in 2006 and involved some support for cluster development in the form of strengthening
the “triple helix” further74. This strategy will be discussed in further detail in the next section of
this report.
73
See http://www.kompetenznetze.de/service/bestellservice/medien/flyer-kompetenznetze-deutschland-englisch2010 for more information.
74 “Ideas. Innovation. Prosperity: High-Tech Strategy 2020 for Germany”, Federal Ministry of Education and Research,
Bonn, Germany available from http://www.bmbf.de/pub/hts_2020_en.pdf
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Regional Cluster Policy in Germany
The primary drivers of cluster development in Germany are the Länder governments rather than
the Federal Government. In Germany, regional government is both strong and effective, and local
politicians and policy makers have a strong incentive and ability to support regional economic
development. A similar situation exists in Austria.
A strong example of cluster policy in action is the current Bavarian Government’s “Cluster
Initiative” Policy75 which is part of their modernisation strategy. It is designed to enhance Bavaria's
role as a top location for business and research. The policy has been developed and implemented
by the Bavarian Ministry of Economic Affairs, Infrastructure, Transport and Technology.
Bavarian cluster policy concentrates on nineteen branches and technologies with high importance
for the future of Bavaria. Through the promotion of cooperation between companies and
research institutions the Bavarian state government aims to create a dynamic and self - organising
process of growth and development within five fields. The fields with their underpinning clusters
are as follows:
The Bavarian Cluster Initiative – Sectors of Focus
Mobility
Materials
Human beings and
Information
Services and the
engineering
the environment
technologies and
media
electronics
Automotive
Advanced materials
Biotechnologies
Information and
Financial services
communication
technologies
Rail Technologies
Chemistry
Medical
Sensor technologies
technologies
and high
Media
performance
electronics
Logistics
Nanotechnologies
Energy technologies
Mechatronics and
automation
Aerospace
Environmental
technologies
75
The policy brochure is available from http://www.cluster-bayern.de/_Downloads/Cluster_Initiative_Bavaria.pdf
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Forestry and wood
navigation
Nutrition
Source: Bavarian Ministry of Economic Affairs, Infrastructure, Transport and Technology
The above sectors represent a combination of some traditional sectors of strength in the regional
economy such as automotive, rail technologies and forestry and wood and emerging technologies
such as nanotechnology, sensor technology and high performance electronics.
Funding has been provided long-term to cluster organisations in these particular fields to ensure
that they are sustainable. Funding is however contingent upon cluster managers and
management teams facilitating effective networking between cluster members, higher education
institutions and research institutes. Cluster managers have met on a bi-monthly basis to exchange
best practice and also to learn about new funding opportunities. Targeted support was also
provided on cluster strategy development through external consultants working for two days with
cluster managers.
Originally, €50 million was invested between 2006 and 2011 and clusters received €2m each over
the five years. The policy has been renewed but at the time of writing it has not been possible to
identify the current budget for the policy. It appears that the Bavarian government is aiming for
the clusters to self-finance at the rate of 50% by the year 201576 and to be controlled and financed
through fee income from between 80 and 200 members. The Initiative has also organised
specialised workshops for cluster managers in technical areas as well as internationalisation of
the cluster.
Another important part of the policy has been a monitoring and evaluation system. Evaluation is
based upon the following variables:
• Quality of the strategy;
• Quantity and quality of cooperation projects;
• Quality and coherence of cluster activities;
• Self-financing rate;
76
See
the
presentation
at
http://files.conferencemanager.dk/medialibrary/f13db635-416d-4cbc-a46578f2ff8796c6/images/presentationbavaria.pdf for further information.
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• Satisfaction grades amongst members (using online questionnaires);
• Usefulness grades amongst members (using online questionnaires).
The following metrics have been monitored: number of events and levels of participation,
numbers of cluster members and the proportion of SMEs, number of initiated projects and levels
of funding from Federal and EU sources, number of bilateral member meetings and number of
website visits.
Similar approaches and policies towards cluster development have been adopted in other
German Länder, including Baden-Württemberg which has also placed considerable emphasis on
maintaining its premier status as one of Europe’s most innovative regions. The New Länder of
Eastern Germany (e.g. Saxony-Anhalt) have also placed considerable importance on the
development of clusters as well.
3.2.2.4.3 Conclusions
Cluster development can be seen at the highest levels in Germany where the “triple helix” concept
of close networking between enterprises, higher education and R & D institutions and
government can be seen working very effectively. Germany has developed nearly 230 operating
cluster organisations, which is by far the largest of any EU member state.
The Federal Government in Germany has placed a high level of importance on both clustering and
also specifically technological innovation in both traditional and high technology sectors.
Clustering has also been used successfully to regenerate the new Länders of Eastern Germany
such as Saxony-Anhalt through a combination of both existing strengths in chemicals and the
automotive sector and newer technological sectors such as plant biotechnology and new
materials.
A key feature of clustering policy in Germany has been the strong role of the Länder governments
who have, in most cases, actively intervened to support cluster initiatives and cluster
organisations with long term funding whilst ensuring that an effective monitoring and evaluation
system is in place to ensure performance. This has been the key lesson from both Bavaria and
Baden-Württemberg. These monitoring and evaluation systems have ensured that cluster
managers have had to deliver services to their members and ensure relatively frequent meeting
and communication.
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There are clear lessons here for Greece and Bulgaria in that long term funding, combined with
clearly targeted objectives and effective monitoring and evaluation systems are important for
effective cluster policy. It is also important though that the objective is to gradually increase the
independence of clusters from state funding as this ensures that cluster managers focus on
delivering services of value to their members. The other critical lesson is that clusters will only
become truly effective in Greece and Bulgaria once the system of collaboration and cooperation
between R & D institutions and higher education is properly addressed. At present it would appear
that the university/R&D community is not sufficiently integrated into GR and BG clusters whereas
within Germany they are very much central players in driving technological innovation and cluster
development.
3.2.3
The Future of Cluster Policy
Although the understanding of cluster programs is growing, there is still too little systematic data
on their impact. The European Cluster Observatory provides systematic, comparable data on the
presence of clusters. The data on cluster policies and efforts remains more case-based, but has
also grown in size to allow for broader analyses of cluster efforts and economic outcomes.
Surveys of cluster initiative-managers indicate that a large share of such efforts is active in clusters
with a strong base of existing economic activity in the region. While ‘wishful thinking’- clusters do
exist, they do not seem to dominate the reality of cluster efforts (Sölvell et al., 200377; Ketels et
al., 200678). Cluster initiatives empirically are more focused on raising the competitiveness of
existing clusters rather than on creating new ones. The survey-based findings on the drivers of
cluster initiative success are consistent with this view: A strong existing cluster with firms that
have met the market test makes it much more likely that a cluster initiative will report its efforts
to be successful.
A second import success driver is the presence of a strong regional government. Cluster initiatives
are highly heterogeneous in performance and structure, which suggests that how cluster
initiatives are organized and what type of activities they get engaged in has an important impact
on the outcomes they achieve. The surveys indicate that the qualities of the cluster initiative
manager and an appropriately funded secretariat are key success drivers. There is no indication
77
Sölvell, Ö., Lindqvist, G., and Ketels, C. (2003), The Cluster Initiative Greenbook, Stockholm: Ivory Tower Publishers.
Christian, Göran Lindqvist, and Örjan Sölvell (2006), Cluster Initiatives in Developing and Transition Economies,
Center for Strategy and Competitiveness: Stockholm.
78Ketels,
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of any ‘killer application that cluster initiatives have to pursue. Instead, the data suggests that the
mix of activities needs to be aligned with the specific needs of the cluster.
As reported earlier the data on the impact of cluster initiatives on economic outcomes is still
fragmentary. The available evidence points to moderately positive effects (e.g., for Germany:
Dohse & Stähler, 200879; Falck et al., 200880). The reviews of individual programs tend to find
positive returns for the participants and an expanded capacity for joint action (e.g., for the
Swedish Vinnväxt program: Cooke et al., 200781). Studies in Denmark and Sweden have made peer
group comparisons of companies active in cluster projects and those that are not (Kuhn, 201082).
They find companies active in cluster projects to register better performance in subsequent years.
Some studies in other countries have shown no such impact; instead, there is evidence that their
funding decisions have been strongly influenced by the traditional industrial policy reflex to
support failing activities (e.g., Martin et al. 2011 on a program in France83). These firm level studies
provide more robust evidence than what has been available before. But given their design they
can only provide information about the effectiveness of individual cluster programs, not about
the impact or advisability of cluster programs in general.
The existing evidence suggests that cluster programs can play an important role in the context of
a broader strategy for upgrading competitiveness. To enhance their impact, a three-step
approach seems critical: The first step is to ensure more consistent quality in the design and
implementation of cluster efforts. The high level of heterogeneity in the outcomes of programs
that claim to be based on the cluster approach signals the need for stronger standards. The
European Commission can play a role in this process in two important ways: For cluster initiatives,
the Commission can establish benchmarks and standards and promote their application. This is
currently under way in the European Excellence Initiative. One focus is on benchmarking cluster
79
Dohse, D., & T. Staehler (2008). BioRegio, BioProfile and the rise of the German biotech industry, Kiel Institute Working
Paper No. 1456. Kiel Institute for the World Economy, Germany.
80
Falck, O., S. Heblich, and S. Kipar (2008), The extension of clusters: Differences-in-difference evidence from the
Bavarian state-wide cluster policy, Jena Economic Research Paper No. 2008-073, Jena, Germany: Friedrich Schiller
University, Max Planck Institute of Economics.
81
Cooke, Philip, A. Eikelpäsch, Ifor Ffowcs-Williams, and Jan Ragner (2007). Evaluation report by the Vinnväxt
International Review Team, Vinnova Report No. 2007:11, Stockholm: Swedish Governmental Agency for Innovation
Systems (VINNOVA).
82
Kuhn, Johan (2010), An Analysis of Firm Growth Effects of the Danish Innovation Consortium Scheme, Danish Research
and Innovation Council: Copenhagen.
83
Martin, Philippe, Thierry Mayer, and Florian Mayneris (2011), Public Support to Clusters: A firm level study of French
‘Local Productive Systems’, Regional Science and Urban Economics, Vol. 41, pp. 108–123.
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initiatives, culminating in the labeling of cluster initiatives84. The other is on the training of cluster
initiative managers, which is currently under preparation through the Foundation “Clusters and
Competitiveness”85. For member countries, the Commission could establish standards of good
cluster programs. Countries or regions that follow these standards could then be eligible for cofinancing from the European Commission (European Cluster Policy Group, 2010). A group of
leading countries and regions has in parallel developed their own proposals on “the perfect cluster
program” (Danish Ministry of Science, Innovation, and Higher Education/VDI/VDE, 2012).
The second step is to scale up the impact of cluster programs. Simple arithmetic suggests that
working with one regional cluster, even a sizeable one, is unlikely to generate economic outcomes
that are meaningful for the overall regional economy. The average regional cluster accounts for
about 1% of total employment in a region (European Cluster Observatory, 2008); larger clusters,
maybe up to 5%. Upgrading one cluster will tend to have only a moderate impact on the regional
economy overall. There is a range of ideas for how cluster policy can be designed to affect the
regional economy (High Level Advisory Group on Clusters, 2008). Regional officials should take a
portfolio perspective on their cluster efforts, addressing the different needs of clusters at
different stages of development and leveraging the linkages across clusters. They should leverage
the experience of the cluster efforts for economy-wide improvements. And they should integrate
their cluster efforts into a broad economic strategy that identifies the specific value the location
has relative to others of similar standing.
The third step is to spur the development of new clusters. The evidence discussed indicates that
cluster programs work best for strong, established clusters. But the limitations of a cluster policy
confined to “strengthening the existing strengths” is obvious for less advanced economies and
regions in need of structural change (Ketels & Memedovic, 200886; Landabaso, 200187). Some
researchers suggest that diversification efforts can be based on a cluster approach when
development paths are designed to leverage existing clusters for a push into related fields
84
http://www.cluster-excellence.eu/quality.html
http://www.clustercompetitiveness.org/
86
Ketels, C., & Memedovic, O. (2008). From clusters to cluster-based economic development. International Journal of
Technological Learning, Innovation, and Development, 1, 375–392.
87
Landabaso, M. (2001). Clusters in less prosperous places: Policy options in planning and implementation (Discussion
paper). Brussels: European Commission.
85
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(Delgado et al., 2010a88; Hausmann & Klinger, 200789). These ideas have informed a discussion
about “smart specialisation” which has now been adopted as a central concept guiding regional
policy in Europe (Foray, David, & Hall, 200990).
Cluster based strategies – as part of industry, innovation, regional and science policy – should
account for both a rejuvenation of established industries in Europe, as well as paving the ground
for new emerging industries. The chances of success are clearly improved if such policy initiatives
are fact-based, and here we hope that the European Cluster Observatory will play an increasingly
important role.
88
Delgado, Mercedes, Michael E. Porter, and Scott Stern (2010), Clusters and Entrepreneurship, Journal of Economic
Geography, Vol. 10, pp. 495 – 518.
89
Hausmann, R., & Klinger, B. (2007). The structure of the product space and the evolution of comparative advantage
(CID Working Paper No. 146). Cambridge, MA: Kennedy School of Government.
90
Foray, D., David, P. A., & Hall, B. (2009, June). Smart specialisation—The concept. Knowledge economists policy briefs,
Nos. 5–9: Knowledge for growth—Prospects for the knowledge-based economy (pp. 25–29 [No. 9]).
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COMPARATIVE ANALYSIS OF CURRENT SITUATION
4.1
SWOT Analysis
There are several studies documenting and assessing the current strategic situation of the four
Regions in terms of their strengths, weaknesses, opportunities and threats.
A mingling of the data available per region in Greece and at a national level in Bulgaria is presented
in this specific chapter.
4.1.1
Region of Central Macedonia
Generally the region has a potential to renew and reinvigorate the structure of its economy by
focusing development around a number of existing strengths or potential emerging clusters.
Avranas & Nioras (2011)91 point to three challenges / opportunities: to increase SMEs technology
investments in agrobiotechnology and strong linkages vertically up the value chain and with public
research organizations; 2) development of a globally competitive ICT sector 3) development of a
dynamic and innovative health sector. Georgiou et al (2012) note broadly concurs and identifies
seven areas for knowledge intensive growth: agriculture/nutrition; re-industrialization by
boosting remaining manufacturing based on more knowledge-intensive industrial activity; both
summer and winter tourism, ICT cluster; transport and logistics; education and health sectors.
STRENGTHS
−
S1
Presence
of
certain sub-sectors industries
with increased international
competitiveness.
−
S2 Significant mass of regionally based public and higher education research and
technology organizations.
−
S3 Relatively unique, in Greece, private sector initiatives to develop ‘innovation
infrastructure’ (incubators, clusters).
−
S4 Pilot region at EU level with long-run history of planning and organizing innovation
policies, since 1994 Regional Technology Plan.
−
S5 Good degree of networking of regional institutions.
WEAKNESSES
91
Avranas A. Nioras A. (2011) Regional Innovation Report Kentriki Makedonia. Regional Innovation Monitor project for
DG Enterprise of the European Commission.
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W1 Research activity is concentrated in university laboratories, and it is fragmented
among numerous small units without any specific clear industrial goal or connection.
−
W2 Innovation potential is highly concentrated spatially with a metropolitan, peri-urban
and rural divide.
−
W3 Limited self-financing capacity of regional SMEs for innovation activities.
−
W4 Fragmentation of innovation support activities and lack of co-ordination at regional
and local levels.
OPPORTUNITIES
−
O1 Growing pressure to export may help to drive business innovation and an increased
openness of the production system.
−
O2 Potential to promote Thessaloniki as an ‘Open city’: Metropolitan character,
connections with the Greek and Balkan hinterland and the Black Sea region.
−
O3 Good potential for health and health service related innovation.
−
O4 Opportunities to develop a more vibrant creative industries sector building on base of
specialized services, cultural, etc. resources.
−
O5 Potential to diversify tourism offer towards higher-value added and 365 days a year
attractions
THREATS
−
T1 Further erosion of employment in sectors based on low-wage competition.
−
T2 Bureaucratic nature public initiatives to support innovation and entrepreneurship.
−
T3 Unclear and changing institutional framework (taxation, management of research
results, etc.).
−
T4 Significant reduction of financial capacity because of the economic crisis.
−
T5 Brain drain.
4.1.2
Region of East Macedonia & Thrace
The results from the procedure so far for the analysis of the regional environment and the capacity
of the Region of East Macedonia-Thrace for innovation, lead to the identification of the areas in
which the Region of East Macedonia-Thrace is distinguished on the basis of its performance to
date in the areas of entrepreneurship, science, knowledge and creativity, digital
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infrastructure/services. This leads to the mapping of regional Strengths. The second component
of the SWOT analysis is also a result of this specific procedure, namely the deficiencies and
weaknesses in the regional fabric (always on the basis of research of past data).
In a similar manner, but with recourse to more bibliographical data and recent references/reports
of international bodies, the factors of the wider external environment of the Region of Eastern
Macedonia-Thrace (External/Remote Environment), not only of the European Union, but also of
the more general globalized environment, were examined.
These factors create Opportunities and Threats having positive and/or negative effects, without
the Region being able to influence them. On the other hand, it can attempt to deal with the
changes which occur over time.
STRENGTHS
−
S1 Concentration in sectors with comparative advantages due to uniqueness and/or
excellent quality of raw materials.
−
S2 Existence of individual enterprises with excellent performance in emerging sectors
which can be an example for the creation of business ‘clones’.
−
S3 Large extent of coverage of processing in raw materials intra-regionally with positive
effects on the regional added value.
−
S4 Remarkable availability of lowland areas, pastures, forest and fishery resources.
−
S5 Extensive geothermal fields
−
S6 Existence of a soil map.
−
S7 Existence of a significant number of high-value products in the primary sector (e.g.
PDO).
−
S8 Emergence of new alternative crops
−
S9 Important range of intangible knowledge in the livestock sector.
−
S10 Full academic composition of the academic sector.
−
S11 Particularly positive trends in openness, academic productivity (publications) and
financing flows to the research sector.
−
S12 Strong scientific specialization in the sector of ICT.
WEAKNESSES
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W1 Relatively small size, family enterprises with an organisational structure that does not
ensure robustness in the strategic tackling of challenges. This specific weakness is
exacerbated by the lack of formation of business clusters.
−
W2 Little effort for product innovation. Rather, the tactic of creative copying is followed
as regards products and the manner of their production and disposal.
−
W3 Deficiency in designing single tourist ‘destinations’ with characteristics that satisfy
corresponding tourist groups.
−
W4 Low performance in most categories of competitiveness of the tourist sector of the
Region as compared to the more developed areas of Greece.
−
W5 No financing structures for high-risk investments of enterprises
−
W6 Small and fragmented size of holdings that weighs disproportionately on production
cost and renders them uncompetitive.
−
W7 Specialization in crops the demand for which does not show dynamics (cotton, sugar
beet, tobacco).
−
W8 Low level of standardization and yield of agricultural production - reduction of
processing industries over time.
−
W9 Weak collective mechanisms for the promotion and trade of agricultural products
−
W10 Low degree of utilization of natural resources (geothermal fields, pastures, forests,
fishery resources).
−
W11 Ageing of rural population.
−
W12 Abandonment of crops due to disconnection-loss of know-how
−
W13 Small supply of ICT services by enterprises in the Region of Eastern MacedoniaThrace, without indications of specialization and technological maturity.
−
W14 Lag of all ICT indicators as regards national and European performance.
−
W15 Particularly low R&D expenditure as compared to other European regions. However,
the positive development of indicators of R&D expenditures in the business sector for the
period 2005-2011 is a positive point.
−
W16 Particularly low percentage of tertiary education graduates out of the total
population as compared to both the national and the European average.
−
W17 Significant, almost exclusive, dependence of the research sector on direct or indirect
public financing.
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−
W18 Particularly limited indications of research excellence.
−
W19 Poor results and lack of systemicity in the transfer of technology from public
research or academic organizations to enterprises.
−
W20 Poor performance in European competitive research and technological
development projects.
−
W21 Absence of intermediate bodies of support to innovation and exchange of
knowledge (e.g. Technological
−
Parks, Incubators, BICs, accelerators, etc.).
−
W22 Low competitiveness of the academic sector as regards attracting talented students.
−
W23 Limited capacity for strategic and business planning as regards Regional Government
structures, Local Authorities and the local collective bodies of entrepreneurship.
OPPORTUNITIES
−
O1 Recovery of economic climate in the Eurozone
−
O2 Increasing demand from markets abroad in sectors in which the Region shows an
adequate critical mass and a large variety of raw materials of excellent quality.
−
O3 Positive trends as regards the increase of the tourist flow to the Greek market on the
basis of the changes observed during the period of three years 2011-2013.
−
O4 Constant development of the demand for tourism models of special forms of tourism.
−
O5 Maximization of the impact of the routing of the TAP pipeline through the Region.
−
O6 Incentives under the new CAP for the restructuring of crops on business criteria
instead of subsidies.
−
O7 Low level of self-sufficiency as regards products of animal origin at a national level.
−
O8 The dynamics of the sector of aquaculture in the international market.
−
O9 Incentives under the new CAP for rural development, improvement of infrastructure,
etc.
−
O10 Utilization of the approach RIS3 for the planning of a truly regional RTDI policy.
−
O11 Utilization of the HORIZON 2020 programme for aid to excellent research groups.
−
O12 Utilization of researcher mobility programmes for the purpose of strengthening the
knowledge base of the Region.
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O13 The transformation of the character of the Region of Eastern Macedonia-Thrace from
a ‘border area’ into a ‘gateway to Greece and the EU', owing to the EU’s enlargement
policy.
THREATS
−
T1 Weak demand and private consumption without predictions of direct recovery.
−
T2 Fears of political instability due to accumulated social tension.
−
T3 An overpriced Euro slowing the increase of exports outside the Eurozone.
−
T4 A negative environment for entrepreneurship in Greece (legislation, bureaucracy,
taxation, access to financing).
−
T5 Exposure to competition from other areas that are characterized by increased
productivity or lower cost.
−
T6 The existence of more than 100 European regions with the same structural
characteristics as the Region of Eastern Macedonia-Thrace limits the opportunities for
differentiation.
−
T7 Global increase of the prices of foodstuff, agricultural supplies and fuel.
−
T8 Further reduction of subsidies (and therefore revenues) due to the new CAP.
−
T9 Gradual transition to the financing of research on the basis of excellence at a European
level.
−
T10 Trend for reduction of public expenditure for research (staff, facilities, equipment).
−
T11 Brain drain to more attractive Greek or European regions.
−
T12 The experience from the current programming period as regards the management of
the thematic objectives of smart growth at a central level.
4.1.3
Bulgaria at national level
Conclusions for further necessary action are based on summarized SWOT analysis.
Macro-economic and structural policies are needed to exploit opportunities and prepare to face
threats or at least mitigate their damage, if they occur. In that sense policies need to:
•
Exploit strengths by focusing on ICT and cultural heritage, as well as give opportunities to
the well-educated to remain in the country
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Address weaknesses through focusing on clean energy and again improve the
opportunities to the labour force
•
Exploit opportunities by supporting competitiveness (through innovation as low labour
cost is not ensuring quality of life) to exploit global market opportunities and attract FDI
•
Prepare for potentially higher global competition by support competitiveness in areas
where the Bulgarian economy is strong.
Policies need to:
•
Build on strengths hence invest in mechatronics and bio-tech related sectors and nurture
fundamental research that can harness entrepreneurial discovery;
•
Eliminate weaknesses by improving the quality to the educated labour force rather than
limit success in high shares of educated labour force;
•
Exploit opportunities by addressing competitive funding of the EU through support to
excellence, take advantage of the existence of the Bulgarian Diaspora by helping
researchers to repatriate provisionally or permanently and share their knowledge, give
the young generation better opportunities to enterprise, focus on few clusters with
potential to attract investors;
•
Mitigate the effect of threats by training and hiring new researchers to make up for the
aging qualified personnel and compete with other countries attracting them, as well as
exploit flexibility and SS to adapt to changing global competitive pressures.
As a result of the analyses the following priority areas of activity are highlighted to achieve smart,
sustainable and inclusive digital growth in 2014-2020. They are selected in a way to secure
balanced support for demand and supply of ICT and to achieve sustainable economic and social
benefits from their broad implementation.
•
Securement of high speed and ultra-high speed broadband access all over the country by
development and modernizing of the broadband infrastructure;
•
Accelerated development of e-governance and public e-services, including trans-border
e-services of high economic and society interest;
•
Development of balanced innovative eco system in the area of ICT through support of
research and innovations and growth of ICT sector;
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Promotion of broad use of ICT by the enterprises, particularly SME’s, citizens and public
sector to cope with main economic and social challenges.
STRENGTHS
−
S1 Macroeconomic stability and low taxes;
−
S2 Well-developed distribution network and good relations with neighbouring countries;
−
S3 Well-developed telecommunications services such in IT, research and development;
−
S4 High share of population with secondary and higher education;
−
S5 Rich cultural and historical cultural and historical heritage;
−
S6 Increasing exports and FDI;
−
S7 Availability of a few enterprises with high growth;
−
S8 accumulated experience and investments in mechatronics-related industries;
−
S9 High share of the university graduates;
−
S10 Tradition in the fundamental research including biotechnology;
−
S11 Highly qualified researchers in the field of physics, chemistry, computer technologies
and biotechnologies;
−
S12 High growth in the cultural and creative industries;
−
S13 High level of broadband coverage and high-speed broadband;
−
S14 High penetration of broadband access of at least 30 Mbps;
−
S15 High level of Internet access for the households on a national scale;
−
S16 High level of broadband Internet access of enterprises;
−
S17 Accelerated pace of development of e-governance;
−
S18 100% connectivity of all schools in Bulgaria to the Internet;
−
S19 High level of usage of public e-services by businesses;
−
S20 Steady growth in the ICT sector (including. exports);
−
S21 Higher wages in the ICT sector much above other sectors;
−
S22 High potential for research and innovation in the ICT sector;
−
S23 Active presence of leading multinational companies, with research centers and BPO
centers in the country;
−
S24 Positioning the country as location for the detection of near-shore centers;
−
S25 Traditionally good educational system in the field;
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−
S26 Availability of local investment funds with a focus on ICT;
−
S27 Interaction with the big international companies;
−
S28 Availability of ICT clusters in the regions will lead to higher smart growth at regional
level.
WEAKNESSES
−
W1 Aging population;
−
W2 Small and not sophisticated national market;
−
W3 Specialization in low-tech sectors
−
W4 Low labour productivity;
−
W5 Relatively low economic activity of the population of working age;
−
W6 High share of youth unemployment and long-term unemployment;
−
W7 High dependence of the economy on imported resources and energy;
−
W8 Low energy efficiency;
−
W9 High share of informal sector;
−
W10 Bureaucracy for investments (licenses and permits);
−
W11 Limited innovation dynamics as demonstrated by global patenting and high-tech
exports ;
−
W12 Inefficient educational system and shortage of qualified work force (despite the high
share of graduates);
−
W13 Low share of GERD/GDP;
−
W14 Low share of BERD/GDP;
−
W15 Low propensity of SMEs to network for innovation activities;
−
W16 Limited business-academia cooperation;
−
W17 “Brain drain”;
−
W18 Low entrepreneurial and innovation culture;
−
W19 Uneven broadband coverage (regional imbalances) with low penetration of
broadband access in remote, sparsely populated and rural areas;
−
W20 The Single Electronic Communications Network of the State Administration does not
provide fibre optic connectivity to all public administrative structures;
−
W21 Small number of public e-services that are offered only online;
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W22 Lack of cross border interoperability of the information infrastructure for services
with major economic and social importance;
−
W23 Falling behind in the implementation of e-procurement;
−
W24 Falling behind in the modernization of the ICT infrastructure for education and
research and declining quality of education in ICT;
−
W25 Low level of digital literacy of the population compared to the average for EU;
−
W26 Low level of usage of the Internet and Internet-based services by the population,
41% of the population have never used the Internet;
−
W27 Low level of usage of the Internet by disadvantaged people;
−
W28 Low level of implementation and use of ICT by SMEs in other industrial sectors;
−
W29 Low level of digital literacy of the population;
−
W30 Low level of investments in ICT by enterprises;
−
W31 Low level of development of e-commerce compared to the average for EU;
−
W32 Falling behind in the modernization of the ICT infrastructure in education and
science;
−
W33 Shortage of ICT specialists "Brain drain" in the ICT sector increases;
−
W34 Strong concentration of the ICT business in Sofia;
−
W35 Small local market, limiting the opportunities for demand growth.
OPPORTUNITIES
−
O1 Act as gateway to the EU for global FDI flows;
−
O2 Access to EU markets;
−
O3 Access to non-EU markets such as Russia, CIS and the Middle East;
−
O4 New electronic administrative services;
−
O5 Potential of cluster externalities;
−
O6 Emerging strengths can attract investments in leading high-tech sectors;
−
O7 Availability of EU competitive funds and performance reserve towards improving the
innovation;
−
O8 Innovation and entrepreneurial culture of the young generation;
−
O9 Bulgarian Diaspora scientists and potential of brain circulation;
−
O10 Increasing global research collaboration trends;
−
O11 Next-Generation Access networks(NGA)
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−
O12 Potential of e-governance and mainstreaming ICT in enterprises
−
O13 Increased demand of software products and services in the world
−
O14 Penetration of the markets in the region
−
O15 Development of the industry in the towns outside Sofia.
−
O16 Increasing multinational investments in ICT sector.
THREATS
−
T1 Slow-down of economic growth of trading partners;
−
T2 Rapidly increasing competitiveness of current competitors;
−
T3 Increasing negative demographic trend;
−
T4 Ineffective absorption of EU structural and national funds and other financial
instruments;
−
T5 Increasing competition from third world countries in the Balkans and Asia;
−
T6 Economic sanctions on Russia;
−
T7 Aging of highly qualified professors and researchers;
−
T8 Opportunities for qualified researchers to work abroad with better conditions;
−
T9 Rapidly changing environment.
−
T10 Digital "exclusion" of remote, sparsely populated and rural areas and disadvantaged
people;
−
T11 Stagnation in the development of ICT infrastructure and e-governance;
−
T12 The dysfunctional ecosystem for innovations (science-education-innovations);
−
T13 Without large scale implementation and usage of ICT in the industrial sectors and
especially by SMEs, their growth and export potential shall be limited;
−
T14 Inability of the education and training system to cover the needs of the ICT.
−
T15 Impossibility for retaining of highly qualified experts;
−
T16 Failure to stimulate demand in the public sector.
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4.2
DELIVERABLE D4.3.1
Benchmarking Analysis92
One of the most basic conditions required for drawing conclusions from regional benchmarking is
to compare homogeneous regions and learn from equivalents. This condition is not met when
regions for comparison are chosen based on their high performance, overlooking their regional
context or structural conditions. A new methodology (along with an Interactive Tool) for the
identification of homogeneous regions for regional benchmarking has been introduced by the S3
Platform in collaboration with Orkestra - Basque Institute of Competitiveness; identifying groups
of homogeneous regions using variables that are similar in nature; focusing solely on structural
conditions, thereby overcoming the flaws produced by mixing variables of a different nature
(comparing structural indicators with performance and / or behavioural indicators). Thus, regional
benchmarking can be of great help in making strategic decisions within the process of the design
and implementation of regional Research and Innovation Strategies for Smart Specialization
(RIS3), taking into account the relative position of the region to other regions in Europe. Following
the RIS3 approach of looking beyond the regional administrative boundaries, benchmarking based
on structural similarity enables the region to identify its competitive advantages through
systematic comparisons with other regions or to map the national and international context in
search of examples to learn from, or to mark a difference with.
With the aim of reaching the objectives of the Europe2020 Strategy, the European Commission
has conditioned the disbursement of European Regional Development Funds under the thematic
objectives most directly related to research and innovation, on the existence of RIS3. These are
defined as integrated, place-based economic transformation agendas that focus policy support
and investments on key challenges and needs for knowledge-based development, building on
national/regional strengths, competitive advantages and potential for excellence (European
Commission, 2012).
4.2.1
Variables for the identification of regions with similar structural conditions
By reviewing different strands of the literature that has tried to somehow specify what kind of
context factors make territories more comparable among each other, we identified seven
dimensions: geo-demography, human resources, technology specialization, economy and
industry specialization, firm structure, openness, and institutions and values. The next step was
92
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to identify variables that reflect the multifaceted nature of those dimensions more appropriately.
The selection of these variables is strongly conditioned by data availability, usually quite scarce
with regards to some crucial regional issues (such as governance, social capital, openness etc.)
(Iurcovich et al., 200693; Dunnewijk et al., 200894). Fortunately, quite recently, new databases have
been developed in some of these fields that have allowed us to enrich the scope of the dimensions
taken into consideration in our previous preliminary attempts to develop a methodology for the
identification of reference regions (see Navarro et al., 201195, 201296).
The list of elements that might be used to identify regions with similar structural conditions and
the sources for the indicators that have been used are explained in more detail below.
4.2.1.1
Geo-demographic indicators
Within the geo-demographic dimension we have included five elements.
The population of a region, mentioned by many of the studies we have cited, might be used as a
proxy for the size of the region, with the advantage that population data are available in Eurostat.
Among demographic factors, there are two frequently used in innovation economics:
urbanization and ageing. For the first one, the traditional ‘population density’ has been
substituted by a variable provided by the European Commission's Directorate-General for
Regional Policy that gauges the percentage of the population living in cities and commuting zones,
because this offers a better proxy for agglomeration economies.
As for ageing, we consider it more accurate to simultaneously take into account the percentage
of the population aged 65 years or over and those aged 15 years or under, both taken from
Eurostat.
Regarding geographic factors, accessibility indices allow us to simultaneously take into account
local infrastructure and proximity to markets. Due to their complexity, these indices are not
93
Iurcovich, L., Komninos, N., Reid, A., Heydebreck, P. & Pierrakis, Y. (2006). Blueprint for Regional Innovation
Benchmarking. Mutual Learning Platform. Regional Benchmarking Report
94
Dunnewijk, T., Hollanders, H. & Wintjes, R. (2008). Benchmarking regions in the enlarged Europe: diversity in
knowledge potential and policy options. In Nauwelaers, C. & Wintjes, R. (eds.) Innovation Policy in Europe: Measurement
and Strategy. Cheltenham: Edward Elgar Publishing.
95 Navarro, M., Gibaja, J.J., Franco, S. & Murciego, A. (2011). El análisis de benchmarking y la identificación de regiones
de referencia: aplicación al País Vasco. In Navarro, M. (dir.) Indicadores de innovación y benchmarking. Reflexión y
propuesta para el País Vasco. Zamudio: Innobasque.
96 Navarro, M., Franco, S., Murciego, A. & Gibaja, J.J. (2012). Metodología de benchmarking territorial: la necesidad de
identificación de las regiones de referencia. Información Comercial Española 869: 115-132.
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updated very often. Hence, we use the multimodal accessibility index computed by ESPON
Programme in 2006 as a measure of accessibility.
4.2.1.2
Educational level of human resources
This dimension refers to the educational level of human resources. We will not assess the situation
of younger generations of school/university age, because this is an input rather than a structural
variable that can be affected by public policies so as to improve the performance of the regions
and their potential. Instead, we compute the percentage of the population aged 25-64 that has
reached an upper secondary or tertiary educational level because this is a more appropriate way
to measure the structural difference.
4.2.1.3
Technological specialization
The technological areas of specialization in a region are defined according to two sub-blocks:
technological distribution and technological concentration.
For the former, we estimate the percentage distribution of patents based on the Patent
Cooperation Treaty (PCT) among the five large technology fields. The five sectors are: Electrical
engineering (I), instruments (II), chemistry (III), mechanical engineering (IV) and other fields (V).
These have been obtained from IPC codes by making use of WIPO97’s (World Intellectual Property
Organization) IPC (International Patent Classification) technology concordance table. This data
has been computed on the basis of the OECD’s January 2013 regional patent database. Given the
small number of PCT patents in several regions, we have opted to add the patents applied for over
the period 2005-2010.
For the latter, the Gini coefficient is calculated on the basis of patent distribution at two-digit
technology fields, adding the patents for the period 2005-2010.
4.2.1.4
Sectoral structure
In order to characterize the regional sectoral structure, we focus on employment from three
different points of view: distribution of total economic employment, its concentration, and
distribution of industrial employment.
97
http://www.wipo.int/portal/en/index.html
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Regarding the distribution of total economic employment we consider ten major sectors of
Eurostat’s regional economic accounts (based on the new NACE rev2: Agriculture, forestry and
fishing (section A), Industry (except construction) (B, C, D & E), Construction (F), Trade,
transportation, accommodation and food service activities (G, H & I), Information and
communication (J), Financial and insurance activities (K), Real estate activities (L), Professional,
scientific, technical, administration and support service activities (M & N), Public administration,
defence, education, human health and social work activities (O, P & Q), Arts, entertainment,
recreation and other services (R, S, T & U). These data are for the year 2011.
In addition to the percentage distribution of total economic employment, it is interesting to use
a summary indicator of concentration. In order to do so, we compute the share of employment
in the top five subsectors (measured at 2 digits of NACE rev2) in each region.
Even if the above allows a first approximation to the economy’s sectoral structure, it is obvious
that the disaggregation of industry (excluding construction) is not satisfactory. Industrial sectors
are more oriented towards exporting and less limited by the local market, which allows them to
develop and specialize more. Inspired by the OECD STAN database classification, we divide
industrial employment in eleven large sectors. The data was provided by Eurostat, on special
request in order to extract this information from the Labour Force Survey for the year 2011.
4.2.1.5
Firm structure
Among the structural statistics, Eurostat publishes data on the average size of local units for most
European NUTS. In principle, this indicator might be used as a proxy for business size, which
Nauwelaers et al. (2003)98 mention. However, a detailed examination of such data uncovers
strange patterns (particularly for German regions that only report employment for units that have
at least 10 employees, thus overestimating business size). Therefore, we have adjusted the
Eurostat regional figures on the basis of a firm's average size at national level, because the latter
does not have this bias.
98
Nauwelaers, C., Veugelers, R. & Van Looy, B. (2003). Benchmarking National R&D policies in Europe: Lessons from
Belgium. Final report for the Federal Public Service for Scientific Affairs
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DELIVERABLE D4.3.1
Openness
As stated by Nauwelaers et al. (2003), the degree of openness of the economy is another aspect
that fundamentally distinguishes regions. We have included one indicator to assess this element:
total exports over GDP in 2009.
4.2.1.7
Institutions and values
There are many relevant institutional aspects that characterize regions. We have divided those
that we have been able to find data for into three elements: multilevel government, social and
institutional capital and entrepreneurial and innovative attitudes.
The level of decentralization or devolution to sub-national levels of government that characterizes
multilevel government is difficult to measure. To do so, we have included the composite index
developed by BAK Basel Economics for the Assembly of Regions (2009).
In order to assess social and institutional capital, we have incorporated three indicators. The first
one is a recent index on the quality of the institutions computed at regional level by Charron et
al. (2012). This index appraises low levels of corruption, high protection of the rule of law,
governmental efficiency and accountability and is based on survey data. The general situation
regarding social stability in a region is operationalized through the subjective perception collected
in the European Social Survey for 2008 (responses to the question 'Feeling of safety of walking
alone in local area after dark'). Social capital has also been operationalized through a second
variable from that survey (‘Most people can be trusted or you can't be too careful’).
The element ‘entrepreneurial/innovative attitudes’ is also measured with two proxies from the
European Social Survey: “It is important to think new ideas and being creative” and “It is important
to try new and different things in life”.
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DIMENSIONS
ELEMENTS
VARIABLES
SOURCES
Regional size
Total Population
Eurostat
2011
people
Population >= 65
Eurostat
2011
%
dem.pop.ge65.avg.sh
Population <15
Eurostat
2011
%
dem.pop.le15.avg.sh
Urbanisation
Pop. in urban and comm. areas
DG Regio
2006
%
dem.pop.urban.sh
Accessibility
Multimodal accessibility
ESPON
2006
0-100 index
HHRR educational level
Pop. with upper secondary and tertiary ed.
Eurostat
2012
%
educ.isced3_6.sh
Electrical engineering
OECD REGPAT
2006-2010
%
pat.pct.sh.tech.01
Instruments
OECD REGPAT
2006-2010
%
pat.pct.sh.tech.02
Chemistry
OECD REGPAT
2006-2010
%
pat.pct.sh.tech.03
Mechanical engineering
OECD REGPAT
2006-2010
%
pat.pct.sh.tech.04
Other fields
OECD REGPAT
2006-2010
%
pat.pct.sh.tech.05
GINI index of 35 subfields
OECD REGPAT
2006-2010
0-100 index
Agriculture, forestry and fishing (A)
Eurostat LFS(1)
2012
%
emp.sh.a
Industry (except const.) (B-E)
Eurostat LFS(1)
2012
%
emp.sh.b_e
Construction (F)
Eurostat
LFS(1)
2012
%
emp.sh.f
Wholesale and retail trade, transport etc. (B-I)
Eurostat LFS(1)
2012
%
emp.sh.b_i
Information and communication (J)
Eurostat LFS(1)
2012
%
emp.sh.j
Financial and insurance activities (K)
Eurostat LFS(1)
2012
%
emp.sh.k
2012
%
emp.sh.l
Ageing
1. Geo-demography
2. HHRR educ. Level
3. Technological
specialization
Technological distribution
(patents)
Technological concentration
(patents)
Economy's sectoral distribution
Sectoral concentration
Industrial sectoral structure
UNIT
VARIABLE CODE
dem.pop.avg
acc.mm.06
pat.pct.field.gini.35
Eurostat
LFS(1)
Professional, scientific and technical activities (MN)
Eurostat
LFS(1)
2012
%
emp.sh.m_n
Public administration (O-Q)
Eurostat LFS(1)
2012
%
emp.sh.o_q
Arts, entertainment and recreation (R-U)
Eurostat LFS(1)
2012
%
emp.sh.r_u
Top of 5 subsectors (2 digits) (% total
employment)
Eurostat SBS
2011 or closest
%
emp.top5.sh
Mining and quarrying (05-09)
Eurostat LFS
2011
%
emp.ma.sh.01
Food, drinks and tobacco (10-12)
Eurostat LFS
2011
%
emp.ma.sh.02
Real estate activities (L)
4. Sectoral structure
YEAR
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Firm size
5. Firm size
6. Openness
Textiles, apparel and leather (13-15)
Eurostat LFS
2011
%
emp.ma.sh.03
Wood, paper and printing (16-18)
Eurostat LFS
2011
%
emp.ma.sh.04
Chem., pharm., rubber, plastic and refined
petroleum (19-22)
Eurostat LFS
2011
%
emp.ma.sh.05
Non-metallic mineral products (23)
Eurostat LFS
2011
%
emp.ma.sh.06
Basic metals and metal products (24-25)
Eurostat LFS
2011
%
emp.ma.sh.07
Electric, electronic, computer and optical
equipment (26-27)
Eurostat LFS
2011
%
emp.ma.sh.08
Machinery (28)
Eurostat LFS
2011
%
emp.ma.sh.09
Transport equipment (29-30)
Eurostat LFS
2011
%
emp.ma.sh.10
Other manufacturing (31-33)
Eurostat LFS
2011
%
emp.ma.sh.11
Average firm size
Eurostat SBS
2009 or closest
# employees
2009 or closest
%
2009
0-100 index
2012
standarized values
2010 or closest
1-4 index
aesfdrk
Trade openness
Total exports (% GDP)
Multilevel government
Decentralisation
Quality of institutions
Social and institutional capital
7. Institutions / Values
Entrepreneurial / innovative
attitudes
DELIVERABLE D4.3.1
Feeling of safety of walking alone in local area
after dark
Most people can be trusted or you can't be too
careful
Fraunhofer ISI and
Orkestra
BAK Basel
Economics
Charron et al.
ESS
ESS
firms.size.avg
open.exports.gdp
inst.decentralization
inst.quality
2010 or closest
0-10 index
ppltrst
Important to think new ideas and being creative
ESS
2010 or closest
1-6 index
ipcrtiv
Important to try new and different things in life
ESS
2010 or closest
1-6 index
impdiff
Notes:
(1)
NUTS1 values have been calculated from original ESPON Database NUTS2 data
(2)
Data compiled through a request to Eurostat.
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4.2.2
DELIVERABLE D4.3.1
Results of the Web Tool for regional benchmarking
Smart specialization is a process at the end of which regional/national strategies should identify
activities where an investment of resources is most likely to stimulate knowledge-driven growth.
Benchmarking should feed into the whole process of designing and implementing the RIS3
strategy. In order to help regional policy makers performing benchmarking based on structural
similarity in the view of initiating a policy learning process, a web-based interactive tool has been
developed which is easily accessible and user-friendly. The tool is accessible via the Smart
Specialization Platform webpage.
The tables below present the results of benchmarking analyses of the four regions of the Cross –
border area.
The 20 nearest regions to Anatoliki Makedonia, Thraki (el11)
Distance index
Alentejo – Portugal (pt18)
0.0233
Thessalia – Greece (el14)
0.0272
Dytiki Ellada – Greece (el23)
0.0302
Kentriki Makedonia – Greece (el12)
0.0319
Dytiki Makedonia – Greece (el13)
0.0332
Kriti – Greece (el43)
0.0368
Calabria – Italy (itf6)
0.0470
Molise – Italy (itf2)
0.0475
Peloponnisos – Greece (el25)
0.0489
Ionia Nisia – Greece (el22)
0.0494
Ipeiros – Greece (el21)
0.0511
Extremadura – Spain (es43)
0.0514
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The 20 nearest regions to Anatoliki Makedonia, Thraki (el11)
Distance index
Basilicata – Italy (itf5)
0.0518
Severen tsentralen – Bulgaria (bg32)
0.0531
Yuzhen tsentralen – Bulgaria (bg42)
0.0539
Castilla-La Mancha – Spain (es42)
0.0551
Sterea Ellada – Greece (el24)
0.0552
Del-Alfold – Hungary (hu33)
0.0559
Sicilia – Italy (itg1)
0.0579
Vzhodna Slovenija – Slovenia (si01)
0.0585
The 20 nearest regions to Kentriki Makedonia (el12)
Distance index
Kriti – Greece (el43)
0.0211
Attiki – Greece (el30)
0.0245
Thessalia – Greece (el14)
0.0251
Calabria – Italy (itf6)
0.0304
Sicilia – Italy (itg1)
0.0308
Anatoliki Makedonia, Thraki – Greece (el11)
0.0319
Languedoc-Roussillon – France (fr81)
0.0339
Dytiki Ellada – Greece (el23)
0.0347
Sardegna – Italy (itg2)
0.0369
Puglia – Italy (itf4)
0.0387
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The 20 nearest regions to Kentriki Makedonia (el12)
Distance index
Región de Murcia – Spain (es62)
0.0390
Alentejo – Portugal (pt18)
0.0400
Canarias – Spain (es70)
0.0401
Norte – Portugal (pt11)
0.0423
Campania – Italy (itf3)
0.0423
Andalucía – Spain (es61)
0.0426
Lisboa – Portugal (pt17)
0.0429
Latvija – Latvia (lv00)
0.0431
Lazio – Italy (iti4)
0.0434
Bourgogne – France (fr26)
0.0435
The 20 nearest regions to Yuzhen tsentralen (bg42)
Distance index
Severoiztochen – Bulgaria (bg33)
0.0132
Severen tsentralen – Bulgaria (bg32)
0.0142
Centru – Romania (ro12)
0.0269
Sud-Est – Romania (ro22)
0.0277
Yugoiztochen – Bulgaria (bg34)
0.0281
Vzhodna Slovenija – Slovenia (si01)
0.0306
Lietuva – Lithuania (lt00)
0.0329
Severozapaden – Bulgaria (bg31)
0.0335
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The 20 nearest regions to Yuzhen tsentralen (bg42)
Distance index
Swietokrzyskie – Poland (pl33)
0.0341
Podkarpackie – Poland (pl32)
0.0343
Vest – Romania (ro42)
0.0345
Del-Alfold – Hungary (hu33)
0.0356
Lodzkie – Poland (pl11)
0.0360
Nord-Est – Romania (ro21)
0.0365
Podlaskie – Poland (pl34)
0.0368
Nyugat-Dunantul – Hungary (hu22)
0.0374
Del-Dunantul – Hungary (hu23)
0.0377
Eszak-Alfold – Hungary (hu32)
0.0382
Latvija – Latvia (lv00)
0.0382
Zachodniopomorskie – Poland (pl42)
0.0396
The 20 nearest regions to Yugozapaden (bg41)
Distance index
Lietuva – Lithuania (lt00)
0.0303
Bucuresti - Ilfov – Romania (ro32)
0.0304
Lodzkie – Poland (pl11)
0.0350
Severoiztochen – Bulgaria (bg33)
0.0360
Eesti – Estonia (ee00)
0.0368
Kozep-Magyarorszag – Hungary (hu10)
0.0380
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The 20 nearest regions to Yugozapaden (bg41)
Distance index
Mazowieckie – Poland (pl12)
0.0381
Latvija – Latvia (lv00)
0.0386
Attiki – Greece (el30)
0.0388
Malopolskie – Poland (pl21)
0.0420
Yuzhen tsentralen – Bulgaria (bg42)
0.0432
Pomorskie – Poland (pl63)
0.0442
Del-Alfold – Hungary (hu33)
0.0448
Zahodna Slovenija – Slovenia (si02)
0.0451
Dolnoslaskie – Poland (pl51)
0.0452
Midi-Pyrénées – France (fr62)
0.0455
Yugoiztochen – Bulgaria (bg34)
0.0478
Provence-Alpes-Côte d'Azur – France (fr82)
0.0478
Limousin – France (fr63)
0.0509
Bourgogne – France (fr26)
0.0510
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DELIVERABLE D4.3.1
Strategic Framework for the Creation of the Interregional Entrepreneurship Zone
The strategic framework for the creation of the Interregional Entrepreneurship Zone (IEZ) is
elaborated through the analysis of the existing situation of the cross border area in the fields of
entrepreneurship, research and innovation and employment. The scope of the IEZ is to become a
sustainable instrument which will foster interregional development and employment through
the cross border cooperation in the fields of entrepreneurship, research and innovation,
Information and Communication Technologies (ICT) and at the same time support the
implementation of RIS3 in the cross border area. The application of the results of research and
innovation activities in entrepreneurship, supported by new ICT, will eventually create new and
sustainable jobs in the cross border area and opportunities for direct investments. This circle has
to be boosted by a unique platform which will play the role of facilitator and supporter of all the
necessary actions in the fields of knowledge sharing, resource sharing, ease of doing business and
start up acceleration.
In all the regions of the cross border areas we can identify common characteristics as well as major
diversifications in entrepreneurship, research & innovation and ICT application. The strategic goal
of the IEZ should be the promotion of cooperation in order to exploit strengths through
opportunities in an interregional level and at the same time tackle the weaknesses and threats
coming from the external environment. In any case the creation of IEZ should take into account
the existing economic, social, political and technological constraints in order to be sustainable and
flexible enough to incorporate regional diversifications.
The proposed Vision, Mission and the Strategic objectives of the IEZ are presented in the following
paragraphs as well as the basic principles and requirements for its creation.
4.3.1
Vision, Mission and Strategic objectives of the IEZ
Vision
The vision of the Interregional Entrepreneurship Zone is to become the most efficient instrument
that will play a significant role in the development and support of entrepreneurship in the priority
sectors of the four Regions’ of the cross border area, promoting innovation, research, new
technologies, employment and true cooperation.
Mission
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The creation of a "collaboration space" in the context of networking and business collaboration,
for researchers and employers in the Regions’ priority sectors of the Smart Specialization Strategy,
in order to strengthen employment and reform the economic profile of the region.
Strategic objectives
The strategic objectives of the Interregional Zone Entrepreneurship which will consist the
framework for the development of its operational and organizational model should be the
following:
•
Foster entrepreneurship in the cross border area.
•
Link innovation efforts with the international market networks.
•
Transform of the regional economic model on the basis of innovation, knowledge and
technology.
•
Link entrepreneurship with research activity.
•
Attract European and international investments.
•
Support the competitiveness, extroversion, and internationalization of business
•
Leverage existing knowledge and expertise to create direct value, economic result and
new jobs.
•
Attract foreign direct investments in priority sectors with strategic advantages.
•
Support networking between business and researchers in the regions.
•
Establish business friendly environment.
•
Develop cooperation networks between the public and private sector.
•
Create of new and sustainable job opportunities while tackling unemployment
•
Promote knowledge transfer while improving mobility between entrepreneursresearchers.
4.3.2
Basic principles and requirements for the creation of the IEZ
The development of the Interregional Entrepreneurship Zone (IEZ) will be based on the
“Quadruple helix” networking model. The networking of the members of the “Quadruple Helix”
model, entrepreneurs, researchers, employees and regional government authorities – will lead to
entrepreneurship strengthening in sectors of high regional interest according to the Smart
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Specialization Strategies of the four Regions99 of the cross border are, with a view to reach out
beyond local and regional economies and improve living standards and quality of life of the
residents in the cross border area. It is noted that, strengthening entrepreneurship is based and
depended on the utilization of Research, Innovation and Information & Communication
Technologies (ICT).
The fact that RIS3 is based on a wide view of innovation automatically implies that stakeholders
of different types and levels should participate extensively in its design. The perhaps most
common, tripartite governance model based on the involvement of industry, education and
research institutions, and government (the so-called Triple helix model), is no longer enough in
the context of Smart Specialisation. In particular, in order to guarantee a livelier and truly placebased entrepreneurial process of discovery that generates intensive experimentation and
discoveries, it is imperative that new demand-side perspectives, embodied in innovation-user or
interest groups of consumers, are represented along with intermediaries who offer a knowledgebased but market-facing perspective. This means that the traditional, joint-action management
model of the Quadruple helix, based on the interaction among the academic world, public
authorities, and the business community, should be extended to include a fourth group of
actors representing a range of innovation users, obtaining what is called a quadruple helix100 This
99 Greece: East Macedonia and Thrace Region (Prefectures of Evros, Kavala, Xanthi, Rodopi and Drama), Central
Macedonia Region (Prefectures of Thessaloniki and Serres). Bulgaria: South West and South Central Programming
Regions (Provinces of Blagoevgrad, Smolyan, Kardjali and Haskovo). The Prefecture of Kavala is eligible as adjacent area.
100
Arnkil R. et al. (2010), 'Exploring Quadruple Helix. Outlining user-oriented innovation models', University of Tampere,
Work Research Center, Working Paper No. 85 (Final Report on Quadruple Helix Research for the CLIQ project, INTERREG
IVC Programme).
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is the necessary organisational counterpart of an open and user-centred innovation policy,
because it allows for a greater focus on understanding latent consumer needs, and more direct
involvement of users in various stages of the innovation process. RIS3 processes can develop
environments which both support and utilize user-centred innovation activities also with the aim
of securing better conditions to commercialize R&D efforts.
The quadruple helix allows for a variety of innovations other than the ones strongly based on
technology or science, in the spirit of the wide concept of innovation at the basis of RIS3, but it
requires significant flexibility, adaptation of processes, acquisition of new skills, and potential redistribution of power among organizations. This in turn calls for collective leadership and
moderation of the process as necessary practices for achieving successful governance.
Indicative members of each one of the components of the Quadruple Helix model is presented in
the figure below:
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The creation of the Interregional Entrepreneurship Zone depends on the following basic
principles:
•
Ensuring sustainability of the project over time.
•
Contribution to the development goals of the Regions.
•
Promotion of activities in priority sectors highlighted in Smart Specialization Strategy.
•
Comprehensive understanding of the socio-economic profile in the cross border area.
•
Improving governance and closer involvement of all stakeholders in the socio-economic
life in the intervention area.
•
Improving internal and external connections of the area.
•
Fostering private investments.
•
Capacity building and expertise in the intervention area.
•
Offering networking solution packages for technology-production-market-funding.
•
Adoption of innovative solutions / methods in business operation.
Basic parameters taken into account for the development of IEZ are:
•
The utilization of all existing structures promoting entrepreneurship and innovation for
beneficiaries benefit (companies, workers, researchers) in the intervention area.
•
Avoiding duplication of IEZ activities with those of other similar active structures in the
intervention area.
•
Maintaining development and operation costs of IEZ at the lowest possible level.
•
Ensuring the sustainability of IEZ, operation and services.
•
The strategic orientation of the IEZ should be to cover the needs of the beneficiaries
delivering true value and assisting in the most significant aspects of their operation.
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PROPOSED OPERATIONAL MODEL FOR THE IEZ
The proposed operational model of IEZ consists of:
−
the activity map and services portfolio which answer to the questions what will the IEZ
offer (services) and how these services will be offered.
−
the value chain model and the organizational model which answer the question how will
the IEZ be organized in order to implement its activities
Considering the existing economic situation in all the four regions of the cross border area, the
proposed models follow a lean organization approach in order to keep costs low and boost
sustainability.
5.1
5.1.1
Proposed Activities and Services of the IEZ
IEZ Proposed Activity Map
The proposed activity map of the IEZ is presented in the following graph. The activity map includes
all the activities that will be implemented by the IEZ both on the strategic and the operational
level. After the graph there is a more detailed description of each activity.
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Hosting of Interregional Sectoral Working Groups
This activity relates to the hosting of Interregional Sectoral Working Groups which would deal
with the issues of the specific priority sectors - such as those identified as priority sectors in the
Smart Specialization strategy of the Regions of the cross border area - the policies and future
actions to be undertaken in order to drive development and innovation.
The objective of these groups is to monitor progress and development in the fields of RIS3,
concerning evolution in issues and trends in the context of human resources, entrepreneurship,
business environment, innovation and research activities. By tracking changes and trends, the
Groups will seek, identify and focus on growth prospects in the center of economic activity, which
bring together a significant competitive advantage in terms of technology, innovation, quality,
synergies, extroversion, planning the strategy and determining the Action Plan for each sector.
This outcome will be the most significant result of the Groups because it will incorporate the
knowledge and the experience of all the stakeholders of each sector and transform them into
specific action that will lead to new development waves.
Indicative activities to be carried out by these groups:
•
Mapping the progress made in priority areas of Smart Specialization in strategic sectors
of the economy, through studies /surveys.
•
Elaboration of needs and weaknesses in specific areas of the business environment
(innovation development, extroversion, synergies and business partnerships, etc.)
•
Comparative assessment of the situation of the sectors of RIS3 in relation to changes and
trends at European level and highlight best practices to be adopted.
•
Elaboration of Business cooperation promotion initiatives
The purpose of this activity is to promote cooperation between businesses across borders and
improve the sectoral value chain gaining specific competitive advantages. For this reason, in the
context of the Open Smart Specialisation Platform a specific website will be created to facilitate
cooperation and resource sharing within the cross border region. A digital business catalogue will
be created and updated regularly and will include cooperation offers and demands. This catalogue
will include brief information and the Representation Office of IEZ will provide more information
and to bring in contact the interested parties.
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Facilitation of ideas, expertise and experience exchange
It consists of activities which facilitate the know-how and experience transfer process among firms
in the cross border area and the operation of the interregional business ecosystem. These actions
may include
•
organisation of specific workshops for technology transfer, with the participation of
businessmen from different business and innovative fields presenting their company and
their work,
•
Organisation of small networking events during which stakeholders can obtain an overall
picture of the activities of the business ecosystem of the cross border area and draw
conclusions from the presentation of best practices developed.
Facilitation of business between communication and R&D actors
It consists of measures which facilitate business communication between research organizations,
innovation and Information Technologies community. These activities include the creation and
/or strengthening communication channels between these parties in order to promote joint
actions of commercialization and to strengthen links between business research and research /
innovation, attracting investments, facilitating businesses' access to knowledge, skills and practice
their interconnection with institutions of knowledge and technology.
Development of collaboration networks
It involves the implementation of measures to promote networking and cooperation among
stakeholders and beneficiaries. Indicatively, these measures could refer to organisation of
“Entrepreneurship Days” events which can be thematic and related to the presentation of best
practices or raising awareness for the participants. Furthermore, actions which can contribute
significantly towards networking is to promote cross-border dimension of the project such as
memoranda of cooperation with national and European bodies, investor relations,
interconnection with existing Programs etc.
Encourage of spin off and spin out business creation and growth
This activity refers to the creation and enhancement of entrepreneurship through promotion of
new products, creation of high value-added and knowledge-intensive processes that will
contribute to the development of cross-border region.
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The activity will focus on exploiting new technologies, the use of innovative methods of
production and promotion of products and services, the adoption of research results and
generally the promotion of modern business aiming at creating new sustainable, dynamic,
evolving and competitive enterprises in the cross border area. The activity may also include the
provision of support services for the preparation of integrated investment projects that lead to
the production and exploitation of innovative products, processes or procedures and promotion
of their effects on the market, and fostering cross border business startups.
Creating a model of offering specialized services to businesses will help to promote and
implement innovative ideas in the field of entrepreneurship and in addition, it serves as a hub for
training on issues related to innovation and entrepreneurship.
It is noted that this action is linked with the action of the Strategic Project "Smart Specialization"
(RIS 3) relating to the award of cross-border entrepreneurship for young entrepreneurs that
leverage the competitive advantages of both countries to create products and added value
services and to develop new and sustainable jobs.
Promotion of entrepreneurship in the priority sectors of RIS3
The purpose of this activity is to promote the creation, operation and development of business in
priority sectors of RIS3 within the cross-border area through a mechanism that supports
cooperation networks and local agreements. This mechanism relates to the development and
maintenance of a cooperation network with local and regional government bodies, public
organizations, and private companies with whom IEZ will cooperate in order to implement the
actions that can contribute to its objective (eg dissemination events, counseling, business
development services, networking, etc.).
Update of Open Smart Specialisation Platform S3
This activity refers to the hosting of the Open Smart Specialization Platform S3 which will be
created under the Strategic Project "Smart Specialization" to inform and provide services to the
IEZ beneficiaries (enterprises, research, innovation and technology organizations and employees)
of the cross border area. More specifically, the platform will be used as a “tool” to enable
companies and research, innovation and technology organizations of the cross border area and
to establish cooperation networks, benchmarking systems and knowledge management, to
highlight their activities and to develop a single point of information. Also, it will serve as a
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“vehicle” for the activities and entrance to the international markets. The platform will include a
comprehensive framework of services such as:
•
Provision of Information in:
o
calls for funding opportunities,
o
significant trends and prospects of priority sectors,
o
progress in areas of interest,
o
studies and market research data on various topics related to entrepreneurship
and innovation
•
Business counselling material
•
Promotion of companies and their activities.
•
Services for the development of cooperation.
•
Employment opportunities – cross border job marketplace
•
Space for thematic discussions, information exchange and cooperation (forum) for their
areas of interest.
•
5.1.2
Technical support function (Helpdesk) of the platform.
IEZ Service portfolio
In order to support the achievement of its goals, IEZ will create a solid service portfolio that will
support all the stakeholders of the “Quadruple Helix” model in an affordable and flexible way.
The services will be provided mainly through the Representative Offices and in several cases there
will be also support from external experts on a reciprocating basis.
The panorama of this service portfolio is presented below:
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Business services
1. Business consulting services and localization services
Refers to the support of potential entrepreneurs in their effort to establish their business
providing specialized information, basic directions and personalized consulting services related
to:
•
Business planning (instructions on business planning, models and tools for training)
•
Access to market data (useful sectoral data from databases and studies)
•
Access to funding (information on programs and financing tools)
•
Partnerships development (information on business and/or research cooperation
opportunities)
These services will be provided to stakeholders by the Representation Offices as well as through
the Open Smart Specialization Platform S3.
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2. Funding services (EU etc.)
The objective of these services is to inform the stakeholders on existing sources of financing
entrepreneurial activities for the modernization of existing businesses and creating new ones, the
strengthening of their competitive position, promoting businesses’ extroversion, etc.
The Representation Offices of IEZ will systematically monitor the wider, programmatic
interventions of European and international financial institutions and national public investments
related to the cross border area to inform stakeholders regarding funding opportunities. This
information can be provided:
•
through the Open Smart Specialization Platform S3, via submission of a question, or
information materials that will be posted on it,
•
through brochures and publications that will be available in the Representation Offices,
•
through phone or on the spot in Representation Offices via counseling, answers to
questions and guidance provision in order to support information seeking entrepreneurs
/ stakeholders to address the Funding bodies or European specialized information
networks and have direct, solid and clear answers to their questions.
3. Services for the promotion of business cooperation
These services will help the enterprises to identify companies with which they could establish
cooperation or partnership through developing and strengthening mechanisms of networking
between companies to develop business cooperation and extroversion (export support services).
These services will be provided through the Open Platform for Smart Specialization S3 or
physically by visiting the Representation Offices, which will play a pivot role providing basic
information and establishing communication between companies.
4. Entrepreneurs training services
The IEZ will provide training on specialized issues through the implementation of training
programs in order to improve the entrepreneurship, internationalization and competitiveness of
enterprises and for young entrepreneurs intending to set up a business in one of the priority
sectors of Smart Specialisation strategy within the cross border area.
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The thematic areas are not fixed, but will be determined each time according to the needs. The
aim, however, is to develop development specific skills of entrepreneurs in fields related to the
creation and development of their business.
5. Information services on priority sectors issues
These information services will refer to various issues of the each priority sector. The services will
be available via the Open Smart Specialization Platform S3, which will be regularly updated with
information, or physically in the Representation Offices by making available relevant material. The
information may relate to the current situation of each sector, supply-demand conditions in the
industry, the structure of the market (domestic, European, international), institutional-taxation
issues, the organization of conferences and exhibitions etc.
Services to research and innovation organizations
1.
Technology transfer and innovation services to business operation
These services relate to support researchers, research institutions and development agencies
promoting innovation and new technologies in collaboration with business partners and public
institutions. The goal is to leverage research results for the creation of new business
opportunities, new products and services, cost cutting techniques and sustainable jobs.
In this context, the Officers of IEZ will inform and bring in contact researchers and businesses,
which can exploit the results of their research, and will provide general business advice to any
researcher interested to establish business scope which will be based on specific research results.
Additionally, support will be provided for the promotion of the produced research work,
dissemination of research results through workshops, conferences, publications etc.
2.
Services for the development of cooperation between research and business entities
These services relate to the implementation of support measures for Collaborative projects
cooperation building, development of continuous links, relationships and communication
channels between research institutions and businesses, identification of companies to create
partnerships and initiatives provision for the promotion of workshops and research results. The
scope of the cooperation schemes will be the co-development of research projects in the cross
border area and/or the cooperative commercialization of research results. IEZ will welcome offers
and sustain a database with specific cooperation opportunities. These opportunities will be
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publicized on a specific web site space in order to be available for all interest parties and maximize
the possibilities of demand matching.
Services to employees
1.
Employment opportunities services
The objective of these services is to support the unemployed people in finding jobs available to in
the interregional business ecosystem. Through the Open Platform for Smart Specialization S3,
citizens will be able to submit their CV and search for available jobs based on a system of "small
ads" where companies will be able to publish the job offers and the relevant requirements of the
prospective employees. On the other side, the companies and research organization will be able
to search online at the data base in order to find the right candidates.
2.
Employees training services
These services refer to the provision of training to develop skills of the current employees of the
cross border area in order to create a significant human resource reserve, expertise and technical
capacity related to each priority sector of the Smart Specialization strategy. The aim is to assist
both businesses and employees to develop providing training in an affordable way. The thematic
areas of the training programs are not fixed in this stage, but will be determined at any time in
relation with the current business needs.
Other services
1.
Services for the promotion of cooperation between the public and private sector
These services aim at encouraging private public partnerships to implement projects in priority
sectors of RIS3, through actions that will bring together the relevant actors each time. These
actions will contribute to the implementation of operations / projects, which face funding and
sustainability obstacles for both public and private sector. These services include the development
of contacts between the two parties, and provision of assistance in various issues related to the
preparation for launching tender procedures for projects.
2.
Services to the Authorities responsible for the implementation and monitoring of Smart
Specialization strategy
These services refer to the support of the mechanisms that have been or will be established to
monitor and review Smart Specialization strategy for the regions of the cross border area.
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The IEZ, through its competent bodies, will provide important information on the status and
progress of priority sectors and can contribute significantly to the evaluation process of actions in
each sector, the elaboration of proposals for improvement measures and implementation of the
Smart Specialization strategy in all the regions of the cross border area. In general, IEZ can
contribute to all actions taken under the monitoring and evaluation system of RIS3, such as
documentation and studies, field surveys, consultation procedures with business and research
community, valuation studies of actions etc.
5.2
Proposed Value chain and Organizational Model
5.2.1
IEZ Value Chain
The value chain model includes two categories of operations:
•
horizontal operations relating to the Evaluation, Policy Development and action planning
within each sector of the Smart Specialization Strategies of the cross border area
•
vertical operations related to the development and delivery of services provided to
beneficiaries
Horizontal Operations
1.
Interregional Sectoral and Cross Sectoral Evaluation
This operation includes the continuous monitoring and evaluation of the progress of all priority
sectors, as they are identified in the Smart Specialisation strategy of the Regions of the cross
border area. The monitoring of each sector provides an assessment of the current situation, which
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will result in a dynamic SWOT analysis and identification of major problems. The Interregional
Sectoral Working Groups will run this activity on a constant basis and will publicize their
assessment of the sectors situation at the end of each year. Furthermore the scope of this
operation includes also the cross sectoral evaluation in the context of cross sectoral value chains
that have to be analyzed and upgraded. In many cases sectors are interconnected with other
sectors as they are parts of a greater value chain stretching from the production of raw materials
to the end recipient of the product or the service.
2.
Interregional Sectoral and Cross Sectoral Policy Development
This operation refers to the planning and development of sectors’ specific policies as well as cross
sectoral policies for in the context of greater sectoral value chains. The Sectoral Policy Plan is
based on the current situation assessment of the sectors, and will include the strategic objectives
and framework which will lead to the development of the Action Plan both for specific sectors
and cross sectoral value chains. The Sectoral Policy Plan will be undertaken annually by the
Interregional Sectoral Working Groups.
3.
Interregional Sectoral and Cross Sectoral Action Plan Development
The result of both horizontal functions is the establishment of an action plan for each sector of
the cross border area as well as for cross sectoral value chains that were analyzed in the above
mentioned operations. The action plan will include the actions that have to be implemented annually - in a coherent time plan, with details of each action which indicatively may concern:
subject, objectives, budget, location of action, responsible party, expected results, time plan.
The preparation of the action plan will be carried out annually by the Interregional Sectoral
Working Groups and will be reviewed every three months.
Vertical Operations
1.
Delivery of Business Consulting Services
The objective of this operation is the development; implementation and delivery of specialized
and personalized consulting support to start ups or already operating companies in order for to
mature, develop and/or transform their business model.
The service portfolio includes (not exhausting) the following:
•
Support for the elaboration of the business plan
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•
Support provision to access market data
•
Supporting the process of developing partnerships between enterprises and between
enterprises and research institutions
•
Support in funding sources identification
•
Support services for young entrepreneurs in order to solve new business establishment
issues
•
2.
Business and employee training services
Interregional Cooperation Promotion - Business, R&D and Innovation
This operation relates to the promotion of cooperation in the fields of entrepreneurship, research,
innovation and new technologies across sectors and regions. It will be implemented through
appropriate actions aiming at establishing an environment that will facilitate and simultaneously
strengthen entrepreneurship and research, contributing in this way to the transformation of the
economy of the cross border area. These actions will improve the local business ecosystem in the
field of cross-integration of innovative and research results in the production process and in
promoting the use of new technologies in everyday business operation with multiple positive
effects on the local economy and employment.
Indicative actions that will be implemented in the context of this operation are:
•
Study and assessment for interregional cooperation
•
Proposals for the interregional cooperation
•
Guidance for research and business cooperation
•
Promotion of networking between enterprises and between enterprises and research
institutions
•
Organization and / or participation in workshops and events for sharing of expertise and
best practices
3.
•
Collaboration facilitation through the Open Smart Specialization Platform S3
•
Operation and access to business databases and research bodies
Knowledge management
This operation refers to the management of knowledge developed within the IEZ that could
benefit the overall business ecosystem and the beneficiaries (enterprises, researchers,
employees). The operation includes the collection, development, dissemination and effective use
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of knowledge. Knowledge sharing plays a particularly important role for the whole operation and
sustainability of IEZ and contributes significantly to achieving the objectives set. The increasing
competition, the need for higher productivity, innovation, product / services diversification,
upgrading skills, networking are the main reasons for the adoption of knowledge management
systems.
In this context, an integrated set of actions is provided in order to acquire, store, distribute and
implement the necessary data and information. This function will be performed by the
Representation Offices under the supervision of the Interregional Sector Working Groups and
using as key tool the Open Smart Specialization Platform S3, where information material resulting
from all activities of IEZ will be uploaded. Namely the information material consists of:
4.
•
Sectoral Studies
•
Market Research Studies
•
Funding tools
•
Training Material
•
Data bases, Business catalogues (eg entrepreneurs, research bodies etc)
•
Minutes of events and meetings
•
Methodologies (eg for the development of a business plan, etc.)
•
Best practices
•
Special issues in the priority sectors of RIS3 of the Regions of the cross
On line and off line dissemination and visibility
This function relates to the overall promotion of the activity and results of IEZ. More specifically,
it includes the implementation of publicity actions and promotion of the work of IEZ, in order to
ensure the sustainability of IEZ. Indicative activities are:
•
Development and implementation of IEZ’s communication strategy
•
Development and implementation of marketing plan for the visibility of IEZ
•
Planning and implementation of interregional seminars for the business, academic and
research community
•
Organization and / or participation in events for the presentation of IEZ
•
Publications and Brochures
•
Continuous updating of the Open Smart Specialization Platform S3
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5.2.2
DELIVERABLE D4.3.1
Hosting the Interregional Sector Working Groups
Legal Form and Proposed Organizational Structure
The legal form of IEZ it is proposed to be a non-profit entity and its main shareholders / members
will be the partners of the Strategic Project «Smart Specialization» (RIS3):
•
Central Macedonia Region (Leader)
•
Ministry of Macedonia and Thrace
•
AUTH - Special Account for Research Grants - URENIO
•
Commercial and Industrial Chamber of Thessaloniki (TCCI)
•
Municipality Kordelio - Evosmos
•
Chamber of Commerce of Drama
•
Regional Municipalities Association "Maritza" (Bulgaria)
•
Business Incubator - Gotse Delchev (Bulgaria)
•
Chamber of Commerce of Blagoevgrad (Bulgaria)
•
Centre for Information and Support of Entrepreneurship - Sandanski (Bulgaria)
5.2.2.1 Proposed Legal Form - EGTC
The legal entity of the IEZ could have the form of a European Grouping of Territorial Cooperation
(EGTC) which is the first European cooperation structure with a legal personality defined by
European Law designed to facilitate and promote territorial cooperation (cross-border,
transnational and interregional cooperation), in view of strengthening the economic and social
cohesion of the European territory. EGTC allows public entities of different Member States to get
together under a new entity with full legal personality and was established on the 5th of July 2006
by Regulation (EC) 1082/2006 of the European Parliament and of the Council which came into
force on 1 August 2006.
An EGTC may carry out actions of territorial cooperation, with or without a financial contribution
from the EU (Art. 7 of the EGTC Regulation). It is primarily a tool to be used for the management
of EU Structural Funds, but different functions can be envisaged for an EGTC:
•
In charge of the implementation of a Territorial Cooperation programme (upon
delegation by the Member State to the EGTC);
•
Lead partner or partner in an ETC project;
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Other cooperation actions with EU-funding;
•
Other cooperation actions without EU-funding
DELIVERABLE D4.3.1
The EGTC has a legal personality and capacity recognized by EU law: it can acquire property, hire
personnel, be party to legal proceedings (Art.1). Legal personality is acquired on the day of the
registration and/or publication (whatever is first) of its convention and the statutes (Art.5). The
EGTC is governed by the Regulations (EC) 1082/2006 and 1302/2013 of the European Parliament
and of the Council. These Regulations are complemented by national provisions adopted by each
Member State of the EU.
When an EGTC is created, it is governed by the following law:
•
The EGTC Regulations (EC) 1082/2006 101and The Revised EGTC Regulation 1302/2013
102
of the European Parliament and of the Council together with relevant delegated acts
•
The provisions of the Convention and the Statutes adopted by the EGTC's members
•
The Law of the Member State where the EGTC has its registered office.
The EGTC's members conclude unanimously a convention and adopt statutes on the basis of this
convention. The convention specifies:
−
−
−
The name of the EGTC and its registered office (located in a Member State)
The territory of the EGTC
The objective and tasks of the EGTC
The statutes contain:
−
−
−
−
−
The operating provision of the EGTC's organs and their competencies
The decision-making procedure of the EGTC
The working language(s)
The arrangements for its functioning (personnel management, recruitment procedures,
etc.)
The members' financial contributions
Possible members of an EGTC are:
101
102
•
Member States or authorities at national level
•
Regional authorities
http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32006R1082&rid=1
https://ec.europa.eu/digital-agenda/en/news/regulation-eu-no-13022013-european-parliament-and-council
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DELIVERABLE D4.3.1
•
Local authorities
•
Public undertakings within the meaning of point (b) of Art. 2(1) of Directive 2004/17/EC
•
Bodies governed by public law following Art. 1(9), 2nd sub§ of Directive 2004/18/EC
•
Undertakings entrusted with operations of services of general economic interest (SGEI) in
compliance with applicable Union and national law
•
National, regional or local authorities, or bodies or public undertakings equivalent to the
defined above coming from the neighboring third countries as the defined in the revised
Art 3a EGTC Regulation.
As a general rule, an EGTC must be composed of at least two members coming from at least two
EU Member States.
The added value of the creation of an EGTC can be summarized as follows
−
Territorial cohesion: It helps to achieve the objectives of the EU as stated in the Treaty of
Lisbon.
−
Europe 2020: It can be a tool to implement the Europe 2020 Strategy, boosting
competitiveness and sustainability in Europe's regions.
−
Multilevel governance: The EGTC offers "the possibility of involving different institutional
levels in a single cooperative structure", and thus "opens up the prospect of new forms of
multilevel governance, enabling European regional and local authorities to become driving
forces in drawing up and implementing EU policy, helping to make European governance
more open, participatory, democratic, accountable and transparent.
5.2.2.2 Proposed Organisational Structure
The proposed organizational structure of IEZ shown schematically in the following chart and the
responsibilities of each institution are described in detail below. For the design of this
organizational structure the legislative framework governing the set up and the operation of
EGCT’s was taken into account.
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DELIVERABLE D4.3.1
The IEZ leading body is the Board of Directors. The IEZ shareholders composition will include
partners of Strategic Project «Smart Specialization» (RIS3) in relative proportion as shareholders
/ members IEZ, who will retain voting rights. The Board of Directors may also involve other local
and/or interregional business players, research bodies or other organizations, after the
agreement of the shareholders / members of IEZ but without voting rights.
The basic mission of the Board of Directors is to define the strategy and the operational objectives
of IEZ and supervise its operations. It is the supreme body of IEZ, who operates, manages, adopts
the envisaged regulations, manages IEZ’s assets and shapes the development strategy. It also
coordinates the strategic functions of IEZ, defines its requirements and signs off all the critical
decision that have to be made.
The main responsibilities of the Board of Directors are the following:
•
Setting strategic goals and approving IEZ business plan
•
Identification of services to be provided by IEZ
•
attracting new members to IEZ based on the predefined conditions of participation (as
defined in the partnership agreement of IEZ)
•
identifying sources of financing for IEZ
•
approval of the financial plan of IEZ
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•
strategic decisions on the operation of IEZ,
•
supervision of the management team.
DELIVERABLE D4.3.1
Decisions within the Board of Directors shall be adopted by majority in accordance with the
percentages of participation of each shareholders/members, although it is consistent and good
practice to achieve broader consensus for decisions to be taken. It is proposed that the thematic
areas to be covered under decisions of the Board of Directors will fall into the following set:
enlargement / change of IEZ services, action planning, funding sources, pricing of subscriptions of
members, etc. The Board of Directors will meet every two months or at more frequent intervals
for urgent matters.
The overall coordination of IEZ will be under the responsibility of the Management Team
appointed by the Boards of Directors. In this team all the regions of the cross border area will be
represented with one (1) representative. The Management Team is responsible for the
implementation of the Boards of Directors of IEZ decisions, coordination of the Interregional
Sectoral Working Groups and assurance of the smooth daily operation of IEZ.
The main responsibilities of the Management Team are the following:
•
IEZ business plan drafting and proposition,
•
representation of IEZ in other countries,
•
support in IEZ strategy planning,
•
coordination of IEZ daily activities
•
monitoring and controlling the progress of work of the Interregional Sector Working
Groups
•
ensure the provision of high quality services
•
create friendly environment for cooperation and trust between the IEZ partners
•
inform the Board of Directors on operational matters of IEZ,
•
facilitation of Board of Directors meetings
5.2.2.3 Operational Level
The IEZ will operate in two levels, the Strategic and Business Level.
Strategic level of IEZ operation
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DELIVERABLE D4.3.1
At the strategic level the Interregional Sectoral Working Groups, will be organized and operate.
The number of these groups will match the number of sectors defined as priority sectors in the
Smart Specialization strategy of all the four regions of the cross border area. These Groups could
be the following:
•
Interregional Agri-food Sector Working Group
•
Interregional Manufacturing Sector Working Group
•
Interregional Tourism Sector Working Group
•
Interregional Sector Working Group Materials
•
Interregional Sector Working Group Textiles and Clothing
The exact number and type of Groups will be defined and analyzed after the definition of the
exact priority sectors for all the regions of the cross border area.
These groups will consist of representatives of the main stakeholders of each sector, such as large
and small businesses, research centers and universities, auditing bodies, civil services bodies,
consumer associations, etc. They will operate under the model of the “Technology Platform”
aiming at innovation promotion in priority sectors, facilitation of research activities in
entrepreneurship, formulation of an interregional sectoral strategy, mobilization of a critical mass
of stakeholders at national and interregional level to promote cooperation, communication,
education and technology transfer. The main responsibilities of the Interregional Sector Working
Groups for each priority sector are:
•
determination of sector priorities,
•
planning the strategy of the sector,
•
promoting sector’s targets,
•
publish the conclusions of cooperation promotion between enterprises and enterprises
with research institutions, innovation, ICT,
•
design of training programs,
•
studies relating to the the industry,
•
mapping funding opportunities,
•
search for new tools for promoting entrepreneurship and technology transfer to business
operation,
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•
DELIVERABLE D4.3.1
activation of existing mechanisms for disseminating the results of research / innovation
in business and integration of these, as well as new technologies in production / services,
•
supporting of the monitoring and revision of Smart Specialization Strategy in all cross
border regions
•
Update Management Team on any matter relating to the operation of IEZ
•
promoting and maintaining dialogue with all competent authorities / bodies related with
the industry and other Regional, National and European Technology Platforms.
Business level operation
At the Business level, IEZ Representation Offices will be set up in each of the four regions primarily
utilizing the existing facilities and infrastructure of the partners of IEZ in order to adopt a lean
approach of development.
Human resources for staffing of each Office will be appointed by each of the four regions of the
cross border. It is strongly recommended that this staff should be sourced by the staff that already
exist in the partners of IEZ and meet the standards as described below. There is no need to recruit
new staff and raise the operational cost if there are sufficient number and type of staff to fulfil
IEZ’s needs.
One person will be employed in each of the Representation Offices except of the Office in the
Region of Central Macedonia, where a second employee will be appointed as a coordinator / head
of all the Representation Offices. These Offices are "pioneers" of the IEZ strategy and
"performers" of the actions outlined in the IEZ action plan. In particular, these offices will
implement IEZ actions in accordance with the guidelines and the timetable set each time by the
Interregional Sectoral Working Groups, while in parallel will provide the IEZ services to the
beneficiaries of IEZ, as described above. Furthermore, they will be the single contact point of all
local entrepreneurs and researchers and inform the competent Interregional Sectoral Working
Group on all questions and matters arising.
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5.3 Proposed Business model – Business model canvas
The IEZ Business Model, described in this chapter will help in mapping classification of different functions and components of IEZ that interact and
influence the course of operations, evaluate and improve the business model with new innovative ideas and solutions.
Key Partners
•
•
•
•
•
•
•
•
•
•
•
•
Businesses
Research
institutions
(research
institutes,
academic bodies, etc.)
Bodies responsible of
Entrepreneurship
Promotion
(Observatories,
Development Companies,
Research and Innovation
Centers, etc.)
Bodies of innovation and
development of new
technologies
Educational Institutions
Business / Technology
Parks
Chambers
Business Incubators
Clusters
Cooperation
Networks
(clusters)
Professional Associations
and networks
Business employees
Key Activities
•
•
•
•
•
•
•
•
Hosting of Interregional Sectoral
Working Groups
Businesses’
cooperation
promotion
Facilitation of ideas’, expertise
and experience exchange
Facilitation of business between
communication and R&D actors
Development of cooperation
networks
Encourage of spin off and spin
out business creation and
growth
Promotion of entrepreneurship
in the priority sectors of RIS3
Update
of
Open
Smart
Specialisation Platform S3
Key Resources
•
•
•
•
•
Human Resources
Office Facilities
Expertise from collaborators in
specific sectors
Public relations
Funding
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Value Proposition
Services provided to beneficiaries:
Services to entrepreneurs
• Business consulting services and
localization services
• Funding services (EU etc.)
• Services for the promotion of
businesses’ cooperation
• Entrepreneurs training services
• Information services on priority
sectors issues
Services to research & innovation
bodies
• Technology
transfer
and
innovation services to business
operation
• Services for the development of
cooperation between research
and business entities
Services to employees
• Employment
opportunities
services
• Employees training services
• Services for the promotion of
cooperation between the public
and private sector
• Services
to
structures
responsible
for
the
implementation and monitoring
of Smart Specialization strategy
Beneficiaries’ Relationships
•
•
•
•
•
•
Provision of IEZ services the
most direct way possible
Continuous updating IEZ
activities to the beneficiaries
Invitations to participate in
IEZ events
Direct
response
to
stakeholder demands
Utilization of technological
media to better and faster
service concerned
Continuous
database
updating to the recipients
Beneficiaries
•
•
•
Entrepreneurs
Researchers
Employees
Channels
•
•
•
•
Representative Offices
Organizations and networks
of contacts
Events organized by the IEZ
or events involving IEZ
representatives
Contacts / Members of IEZ
shareholders
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Value provided to beneficiaries:
• Identify and information on
investment
and
research
opportunities
• Facilitate the knowledge transfer
• Facilitate the creation of new
businesses
• Promoting
partnerships
between
businesses
and
between
businesses
and
research bodies
• Develop networking between
public and private entities
• Linking innovation efforts with
international markets networks
• Attracting investors
• Empowerment of workers' skills
• Creation
of
Employment
Opportunities
Cost Structure
•
•
Initial Investment costs
•
Infrastructure costs
•
Technology costs and
•
Other costs
Operational costs
•
Personnel costs
•
Expert fees and
•
Other operational costs
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Revenue Streams
•
•
•
Subscriptions from members (companies and other authorities)
Advertising
Grants
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5.4
5.4.1
DELIVERABLE D4.3.1
Proposed Staffing and Personnel Profiles
Management
Board of Directors
All Partners of the Strategic Project «Smart Specialization» (RIS3) are participating in Board of
Directors, as shareholders / IEZ members and business, research or other organizations, following
shareholders / IEZ partnership agreement.
Management Team
The Management Team consists of members from all the cross border area regions. Each region
shall define the person that meet the standards and will be in the position to represent the region
in the Management Team.
Interregional Sectoral Working Groups
Interregional Sectoral Working Groups are composed of representatives of the main "partners"
of each sector, such as large and small businesses, research centers and universities, audit bodies,
civil design factors, consumer associations, etc.
5.4.2
Officers
Coordinator of Local Representative Office
Title of the position
Coordinator of Local Representative Office
Representation Offices of 4 Regions of the cross border area
Purpose of the position coordination, support and guidance of the staff throughout the
implementation period of their work.
Coordination of the work of the Representation Offices of the 4
Characteristics of the
Regions that includes task scheduling, monitoring and supervision of
position
work for well-functioning of these offices and ensuring the quality of
the result.
Duties and
•
responsibilities of the
Representation of the Representation Offices in other IEZ
institutions.
position
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•
DELIVERABLE D4.3.1
Reporting to the Interregional Sectoral Working Groups for
all matters within their competence for progress of
Representative Offices activities.
•
Participation in meetings of the bodies of IEZ upon relevant
invitation.
•
Work planning, prioritization, diagnosis and treatment of
any problems and report its activities.
•
Scheduling activities, delegating responsibility to officials
from the Representation Offices resource planning.
•
Monitoring and evaluation of the implementation of the
programming
work
and
activation
of
corrective
interventions.
•
Coaching of executives Representation Offices to implement
individual tasks.
•
Convening meetings of executives of the Representation
Offices when necessary.
•
Fostering relationships and strengthening networking of IEZ
with actors of the business and research communities and
civil society.
Skills, abilities and
knowledge
•
Excellent planning & organizational skills/Multitasking
•
Management and leadership skills
•
Professional attitude and approach to setting priorities
•
Focus on results and achieve objectives
•
Good communication and organizational skills
•
Dynamic personality organization-coordination group skills
•
High level communication skills and cooperationExcellent
project management skills
•
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Education and/or work
experience
DELIVERABLE D4.3.1
•
Higher education Diploma
•
At least 10 years professional experience in the design,
implementation, monitoring and management of projects /
requirements
programs
Other requirements
•
Excellent knowledge of MS Office
•
Excellent use of English language
Officers– Local Representatives
Title of the position
Consultant – Local Representative
Purpose of the
The implementation of the strategy and the IEZ action plan.
position
The implementation of the daily work of the Representation Office,
Characteristics of
the position
which includes the provision of services and the implementation of
planned actions.
•
Ongoing support to the Coordinator of Local Representative
Premises.
•
Report to the Coordinator of Local Representative
•
Report to the Coordinator of Local Representative Premises for
all questions and matters arising.
Duties and
responsibilities of
the position
•
Follow actions time plan schedule.
•
Premises for the progress of work and any problems.
•
Contribution to the Coordinator of Local Representative
Premises of required corrective actions.
•
Cooperation with competent officers of other Representation
Offices.
•
Cooperation with the Interregional Sectoral Working Groups.
•
Participation in working meetings, meetings, etc.
•
Provision of IEZ services such as:
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Specialized
consulting
DELIVERABLE D4.3.1
services
to
potential
entrepreneurs to develop new business.
o
Monitoring of public investment programs and
European and international financial institutions.
o
Update relevant to business financing matters.
o
Support the entrepreneurs concerned and in the
process of concluding partnerships with other
companies.Συμμετοχή στην οργάνωση και υλοποίηση
προγραμμάτων εκπαίδευσης.
o
Participation in the organization and implementation of
information events, workshops, seminars, etc.
o
Update stakeholders on matters relating to the
strategic priority sectors RIS3 of the Regions of the
cross border area.
o
Support research institutions, innovation and new
technologies in research and collaboration.
o
Providing advice to researchers wishing to start a
business using the results of their research.
o
Support to the marketing of research results.
o
Supporting creation of networking and communication
channels between research and production entities to
collaborate.
o
Support on the monitoring and evaluation process of
RIS3 of the Regions of the cross border area.
o
Keep contact with local entrepreneurs and research
bodies and development cooperation networks.
o
Update of the Open Smart Specialisation Platform S3 on
all matters relating to the beneficiaries.
Skills, abilities and
knowledge
•
Excellent speaker and creative writer
•
Ability to work under pressure
•
Efficiency under pressure and tight deadlines
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Education and/or
•
Consistency-responsibility
•
Ability to communicate and cooperation
•
Team Spirit
•
Strong communication skills
•
Understanding of business and technology solutions
•
Higher Education Diploma
•
At least 5 years of professional experience in:
work experience
o
Design,
implementation
and
monitoring
of
development projects and programs,
requirements
o
Other requirements
DELIVERABLE D4.3.1
entrepreneurship Issues, research, innovation
•
Excellent knowledge of MS Office
•
Excellent use of English language
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6
FINANCIAL ANALYSIS
The main components of the project’s financial analysis as well as the key findings regarding
mainly its sustainability will be presented in the following sections. The chapter’s structure has
been developed in order to present:
•
the basic assumptions of the analysis
•
the project’s investment costs broken down per category
•
the project’s operational expenses
•
the analysis of possible revenue streams and funding sources
•
the project’s cash flow projections and subsequently project’s sustainability analysis
•
a sensitivity analysis of key cost and revenue drivers
•
the main conclusions and recommendations on project’s financial viability
6.1
Basic Assumptions
The carried out financial analysis basic assumptions are the typical assumptions that accompany
a start-up legal entity’s financial plan.
•
Time horizon of the analysis will be 5 years
•
Inflation will be steady at the level of 1% for every year of the analysis for both prices and
leases
•
Yearly wages increase will be steady at 1% for every year of the analysis
•
Multiyear expenses lifespan will be 20 years (annual amortization factor at the level to
5%)
•
Operating expenses will increase by 1% annually
•
Equipment lifespan will be 5 years (annual amortization factor at the level of 20%)
•
No income taxation will be applied to the legal entity
•
Regular Reserves will be at the level of 5% when applicable, while no dividends will be
distributed to the shareholders in order to assure the working capital sufficiency for IEZ.
Basic Assumptions
Inflation (price index)
Inflation (leases)
Yearly wages increase
Buildings and multiyear expenses
amortization Factor
Operating expenses increase ratio
Equipment amortization factor
Income tax
1
1%
1%
1%
2
1%
1%
1%
3
1%
1%
1%
4
1%
1%
1%
5
1%
1%
1%
5%
5%
5%
5%
5%
1%
20%
0%
1%
20%
0%
1%
20%
0%
1%
20%
0%
1%
20%
0%
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Results Allocation Assumptions
Regular Reserves
Dividends payable
Retained Earnings/ Losses
Working Capital
1
0%
0%
100%
0%
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2
5%
0%
95%
0%
3
5%
0%
95%
0%
4
5%
0%
95%
0%
5
5%
0%
95%
0%
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6.2
DELIVERABLE D4.3.1
Estimation of the Capital expenditure needed
In the following subchapters the budget for the main project’s components will be presented. As
we can conclude from the above chapters, the setup of IEZ will feature:
•
Infrastructure costs
•
Technology costs and
•
Other costs
6.2.1
Infrastructure costs
IEZ infrastructure costs will consist mainly of the equipment that will be installed in the four
Representative Offices acquisition cost. It is proposed that the facilities where IEZ will be
accommodated will belong to legal entities shareholders and will be rented by the IEZ to an
appropriate privileged rent.
Thus infrastructure costs will actually be the cost of furniture and other relevant electric
equipment that will be acquired by the 4 Offices and is described in the following table:
Local Representative Premise of Central Macedonia Region (Headquarters)
Local Representative Premise of South-Western Bulgaria Region
Local Representative Premise of Eastern Macedonia-Thrace Region
Local Representative Premise of South-Central Bulgaria Region
TOTAL
Furniture and other
relevant equipment
cost per Office
4.000,00 €
3.000,00 €
3.000,00 €
3.000,00 €
13.000,00 €
Total IEZ infrastructure costs will stand at 13.000,00 €.
6.2.2
Technology Costs
IEZ structures will be highly dependent on technology as the whole project’s philosophy promotes
networking, communication and knowledge sharing. Technology investments will be made in
both hardware and software.
Hardware investments will consist of the work stations for each employee, in addition to a server
(where IEZ services will be installed) and the necessary technological equipment for the seamless
operation of the Offices.
In addition, software investments will take place consisting mainly of the development of IEZ’s
website, which will be the main contact point for the delivery of its services and its communication
with all the stakeholders.
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Technology investment costs are described in the following table:
Hardware
Number of PCs
Cost per PC
Number of Servers
Cost per Server
Number of printers
Cost per printer
Total Hardware Cost
Software
Website Development
Total Software Cost
TOTAL
5
600,00 €
1
2.000,00 €
4
450,00 €
6.800,00 €
5.000,00 €
5.000,00 €
11.800,00 €
Total IEZ technology costs will stand at 11.800,00 €.
6.2.3
Other Costs
IEZ’s setup will demand and some other costs which are not taken into account in the above
chapters. These consist of the costs for the legal entity setup (legal costs, consulting costs,
recruitment costs, business development costs, etc.), the costs for the creation of IEZ’s brand
identity and the incidentals cost.
The above costs are presented in the following table:
Component cost
3.000,00 €
6.000,00 €
3.380,00 €
12.380,00 €
Setup expenses
Branding Expenses
Incidentals (10% of all investment costs)
TOTAL
Total IEZ other costs will stand at 12.380,00 €.
Total IEZ investments costs will stand as a total of the above components at 37.180,00 €
It is anticipated that all investment will take place during the first year if the project and
subsequently all of its costs will occur during that period as presented to the following table:
1
Land purchase
Basic facilities
Branding
Set up costs
Construction period interest
Equipment
Website
Incidentals
Total
- €
- €
3.000,00 €
6.000,00 €
- €
19.800,00 €
5.000,00 €
3.380,00 €
37.180,00 €
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2
3
4
5
-
€
€
€
€
-
€
€
€
€
-
€
€
€
€
-
€
€
€
€
-
€
€
€
€
-
€
€
€
€
-
€
€
€
€
-
€
€
€
€
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6.3
DELIVERABLE D4.3.1
Estimation of the Operational Expenses
In the following subchapters the expected operational expenses of the project will be presented.
As we can conclude from the previous chapters, the main IEZ’s operational costs can be broken
down into:
•
Personnel costs
•
Expert fees and
•
Other operational costs
6.3.1
Personnel Costs
As it was mentioned at subchapter 5.5, IEZ will be staffed by one (1) Coordinator of Local
Representative Premises who will be based at IEZ Headquarters at Central Macedonia and four
(4) Local Representatives, one at each office of the structure. Both the headcount and the
allocation of personnel is estimated based on relevant cooperation/cluster structures that are
already operating in Europe and northern Greece.
The cost for the above personnel is presented in the following table (in Year 1 prices):
Local Representative Premise of Central Macedonia Region (Headquarters)
Number or coordinators
1
Coordinator Monthly wage per capita
1.500,00 €
Coordinators Yearly wage per capita + Employer's costs
28.350,00 €
Number of representatives
1
Representative Monthly wage per capita
1.000,00 €
Representatives Yearly wage per capita + Employer's costs
18.900,00 €
Total
47.250,00 €
Local Representative Premise of South-Western Bulgaria Region
Number of representatives
1
Representative Monthly wage per capita
900,00 €
Representatives Yearly wage per capita + Employer's costs
17.010,00 €
Total
17.010,00 €
Local Representative Premise of Eastern Macedonia-Thrace Region
Number of representatives
1
Representative Monthly wage per capita
900,00 €
Representatives Yearly wage per capita + Employer's costs
17.010,00 €
Total
17.010,00 €
Local Representative Premise of South-Central Bulgaria Region
Number of representatives
1
Representative Monthly wage per capita
900,00 €
Representatives Yearly wage per capita + Employer's costs
17.010,00 €
Total
17.010,00 €
Grand Total
98.280,00 €
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DELIVERABLE D4.3.1
The total IEZ personnel costs stand at 98.280,00 € per year (Year 1 prices).
6.3.2
Expert Fees
In order to meet its activities requirements, IEZ will need to recruit a number of experts who will
play the role of consultants, mentors, trainers and facilitators. Those experts will have
interregional orientation, and should be people with exceptional background and career
achievements in the academic and/ or business/corporate sectors. It is estimated that the
structure will need a number of six (6) experts, who will be occupied for about 30% of their time
(app. 4 months/year each). The projected expert fees are presented in the following table (in Year
1 prices):
Experts
Number of experts
Average number of man months of service provision
Man-month cost
Total
6
4
3.500,00 €
84.000,00 €
The total IEZ expert fees stand at 84.000,00 € per year (Year 1 prices).
6.3.3
Other operational Costs
IEZ operational costs that could not be included in the above categories will mainly consist of
overheads (rent, electricity, water, and telecommunications), marketing costs and business trip
expenses.
It has been mentioned in previous chapters that IEZ’s premises will be rented from the partners
of the legal entity in order to achieve privileged rents. In the table below a conservative estimation
of the rent costs has taken place (in Year 1 prices):
Rent
Representative office Region of Central Macedonia (Headquarters)
Area (sq. meters)
Price per sq. meter
Total
Representative office Southwest Region of Bulgaria
Area
Price per sq. meter
Total
Representative office East Macedonia-Thrace
Area
Price per sq. meter
Total
Representative office Southcentral Region of Bulgaria
Area
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80
5,00 €
4.800,00 €
50
2,50 €
1.500,00 €
50
4,00 €
2.400,00 €
50
178
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Price per sq. meter
Total
Grand Total
DELIVERABLE D4.3.1
2,00 €
1.200,00 €
9.900,00 €
In addition, in the table below, an estimation of the other overhead costs has taken place (in Year
1 prices):
Electricity
Monthly electricity cost per Office
Total Electricity Cost
150,00 €
7.200,00 €
Telecommuniacations
Monthly telecoms cost per Office
Total Telecoms Cost
120,00 €
5.760,00 €
Water
Monthly water cost per Office
Total Water Cost
50,00 €
2.400,00 €
An estimation of the cost of each year’s marketing campaign has been made in the following table
(in Year 1 prices):
Marketing
Organization of the campaign (year 1)
Brochures and material distribution (years 2-5) per year
Audiovisual material production and communication
through press, radio and TV
Total Marketing Cost
5.000,00 €
10.000,00 €
15.000,00 €
25.000,00 €
Finally it is estimated that about 20 trips will take place every year from IEZ’s consultants, or
affiliated experts, for meeting, coordination, training or other purposes. The trips cost is
estimated in the following table (in Year 1 prices):
Trips
Average number of trips per year
average cost per trip
Total
20
600,00 €
12.000,00 €
Total Other Operational Costs stand at 37.260,00 € (Year 1 prices).
Total IEZ operating costs will stand as a total of the above components at 244.540,00 € (Year 1
prices).
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6.4
DELIVERABLE D4.3.1
Analysis of the possible Revenue streams and Funding Sources
IEZ will be a structure with nonprofit orientation and main mission the promotion of networking
and business collaboration, for researchers and workers in the Regions’ priority sectors of the
Smart Specialization Strategy, in order to strengthen employment and reform the economic
profile of the region of Northern Greece and Southern Bulgaria. However, the entity intends to
find ways to cover its investment and operating costs with minimum profit pursuit. In the
following subchapters the main revenue streams as well as IEZ investment funding sources will
be presented.
6.4.1
Revenue stream estimation
It is expected that IEZ can seek revenues from the following three (3) basic streams:
•
Enterprises’ subscriptions
•
Consulting fees
•
Advertisements
•
Grants
Regarding enterprises subscriptions, they refer to a minimum yearly fee that the companies that
participate in the network are willing to pay in order to receive the provided services plus a formal
certification that they are partners of IEZ. In the following table we have tried to demonstrate the
expected revenues from the specific stream (in Year 1 prices):
Number of Companies from Greece
Yearly subscription for Greece
Number of Companies from Bulgaria
Yearly subscription for Bulgaria
Total
60
300,00 €
60
300,00 €
36.000,00 €
The consulting fees refer to reciprocating services that will be offered to the stakeholders through
external consultants and trainers. IEZ will apply a flat administrative cost on the relevant
consulting services cost in order to cover its direct costs of organizing the service delivery, hiring
experts and communicating with the stakeholders.
Non profit offering of consulting services
Administrative cost
Total
84.000,00 €
20%
88.200,00 €
In addition IEZ will take advantage of its website in order to sell advertising space not only to the
participating companies but also to public institutions or other initiatives that may intend to
promote to a highly business and research intelligent audience a campaign or an activity. In the
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DELIVERABLE D4.3.1
following table, an attempt to quantify the revenues from advertisements, taking into account
different spaces and pricelists that will be made available to IEZ’s website (in Year 1 prices):
Advertisements
Number of large banners
Number of medium banners
Number of small banners
Yearly revenue per large banner
Yearly revenue per medium banner
Yearly revenue per small banner
Total
1
2
2
5.000,00 €
2.500,00 €
250,00 €
10.500,00 €
As it is understood the above revenues are not sufficient to cover the yearly operating costs of
IEZ. This is the reason that the structure is obliged to seek funding for the remaining amounts.
This funding can be derived from the following sources individually or collectively:
•
New programming period for 2014-2020
•
Interreg Programmes
•
Horizon 2020 European Programme
•
Government aids
•
IEZ partners contribution (which in our case is not much different from government aids,
as IEZ partners are already funded from local governments)
These grants are estimated from year 2 onwards at the level of 100.000 € per year (in Year 1
prices). Especially for Year 1 when IEZ will not be able to claim any revenues, its whole operating
costs should be covered by grants.
Total IEZ operating revenues will stand as a total of the above components at 254.700,00 € (Year
1 prices).
It is anticipated that IEZ will operate in full scale from Year 2, while it will operate at a 50% capacity
during its first year (while it will suffer the respective operating costs but will not be able to claim
revenues other than grants). Keeping in mind inflation and yearly increases in the cost and
revenue components, the yearly operating revenue and cost breakdown is presented in the
following table:
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Operating costs and Revenues
Analysis
1
OPERATING REVENUES
Company Subscriptions
Consulting Fees
Advertisements
Grants
Total
OPERATING COSTS
Rent
Electricity
Telecommunications
Water
Marketing
Personnel
Experts
Trips
Total
6.4.2
2
3
4
5
- €
50.400,00 €
- €
90.000,00 €
140.400,00 €
36.000,00 €
100.800,00 €
10.500,00 €
100.000,00 €
247.300,00 €
36.360,00 €
101.808,00 €
10.605,00 €
101.000,00 €
249.773,00 €
36.723,60 €
102.826,08 €
10.711,05 €
102.010,00 €
252.270,73 €
37.090,84 €
103.854,34 €
10.818,16 €
103.030,10 €
254.793,44 €
4.950,00 €
3.600,00 €
2.880,00 €
1.200,00 €
12.500,00 €
49.140,00 €
42.000,00 €
6.000,00 €
122.270,00 €
9.900,00 €
7.200,00 €
5.760,00 €
2.400,00 €
25.000,00 €
98.280,00 €
84.000,00 €
12.000,00 €
244.540,00 €
10.498,95 €
7.344,72 €
5.818,61 €
2.448,24 €
25.502,50 €
100.255,43 €
85.688,40 €
12.241,20 €
249.798,05 €
11.134,14 €
7.492,35 €
5.877,81 €
2.497,45 €
26.015,10 €
102.270,56 €
87.410,74 €
12.487,25 €
255.185,39 €
11.807,75 €
7.642,95 €
5.937,59 €
2.547,65 €
26.538,00 €
104.326,20 €
89.167,69 €
12.738,24 €
260.706,08 €
Funding Sources (EU and other)
IEZ investment costs will be covered from the project integration to the new programming period
for Cohesion Policy 2014-2020 with a minimum contribution the participating partners as
described in the following table:
Shareholders’ Equity (10 shares of €3.000 value each)
EU Grant
Total
30.000,00 €
0
30.000
Funding assumptions and timetable are presented in the following tables:
Funding Assumptions
Funding Sources
Source
Shareholders' Equity
Loans
Grants
Other (eg Working Capital
Total Investment Cost
Capital
30.000,00 €
- €
- €
- €
30.000,00 €
%
interest rate
100,0%
0,0%
0%
0%
100%
Duration
Grace period
0,0%
5
1
0%
4
0
Funding Timetable
Source
Shareholders' Equity
Loans
Grants
Other (eg Working Capital
Total Funding
1
30.000,00 €
- €
- €
- €
30.000,00 €
2
3
-
€
€
€
€
€
4
-
€
€
€
€
€
5
-
€
€
€
€
€
-
€
€
€
€
€
From all the above methodology, the IEZ Financial Statements of our 5 year reference period can
be produced, and they are presented below:
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Balance Sheet
1
Buildings and multiannual amortization
expenses
Less: Amortizations
Construction period interest
Less: Amortization of Construction Period
Interest
Equipment
Less: Equipment amortizations
Accounts Receivable
Stock
Cash
Total Assets
2
3
4
5
17.380,00 €
869,00 €
- €
16.511,00 €
869,00 €
- €
15.642,00 €
869,00 €
- €
14.773,00 €
869,00 €
- €
13.904,00 €
869,00 €
- €
- €
19.800,00 €
3.960,00 €
- €
- €
10.950,00 €
43.301,00 €
- €
15.840,00 €
3.960,00 €
- €
- €
13.710,00 €
41.232,00 €
- €
11.880,00 €
3.960,00 €
- €
- €
13.684,95 €
36.377,95 €
- €
7.920,00 €
3.960,00 €
- €
- €
10.770,29 €
28.634,29 €
- €
3.960,00 €
3.960,00 €
- €
- €
4.857,65 €
17.892,65 €
-
Loan 1
Working Capital
Tax Liabilities
Account payable
Total Liabilities
€
€
€
€
€
-
€
€
€
€
€
-
€
€
€
€
€
-
€
€
€
€
€
€
€
€
€
€
Shareholders' Equity
Grants
Less: Grants amortization
Reserves
Retained Earnings/ Losses
Equity
30.000,00 €
- €
- €
665,05 €
12.635,95 €
43.301,00 €
30.000,00 €
- €
- €
561,60 €
10.670,40 €
41.232,00 €
30.000,00 €
- €
- €
561,60 €
5.816,35 €
36.377,95 €
Total Liabilities and Equity
43.301,00 €
41.232,00 €
36.377,95 €
28.634,29 €
17.892,65 €
Turnover
Cost of Goods Sold
1
140.400,00 €
- €
2
247.300,00 €
- €
3
249.773,00 €
- €
4
252.270,73 €
- €
5
254.793,44 €
- €
GM
140.400,00 €
247.300,00 €
249.773,00 €
252.270,73 €
254.793,44 €
Operating Expenses
Other Expenses
EBITDA
Loan Interest
Grant amortization
Amortizations (not included in operating
expenses)
61.770,00 €
60.500,00 €
18.130,00 €
- €
- €
123.540,00 €
121.000,00 €
2.760,00 €
- €
- €
EBT
Taxes
Other Taxes
13.301,00 €
- €
- €
-
2.069,00 €
- €
- €
-
4.854,05 €
- €
- €
-
7.743,66 €
- €
- €
-
10.741,64 €
- €
- €
Net Profit
Regular Reserves
Dividends
Retained Earnings/ Losses
13.301,00 €
665,05 €
- €
-
2.069,00 €
103,45 €
- €
-
4.854,05 €
- €
- €
-
7.743,66 €
- €
- €
-
10.741,64 €
- €
- €
5.816,35 €
-
1.927,31 €
-
12.668,95 €
-
30.000,00 €
- €
- €
561,60 €
1.927,31 €
28.634,29 €
-
-
30.000,00 €
- €
- €
561,60 €
12.668,95 €
17.892,65 €
P&L
4.829,00 €
12.635,95 €
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-
4.829,00 €
10.670,40 €
126.365,95 €
123.432,10 €
25,05 €
- €
- €
-
4.829,00 €
129.272,30 €
125.913,09 €
2.914,66 €
- €
- €
-
4.829,00 €
132.262,14 €
128.443,94 €
5.912,64 €
- €
- €
4.829,00 €
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6.5
Cash flow Projections
As it was stated above IEZ medium term goal is to be sustainable, with a minimum profitability in
order to be viable. This goal seems to be achievable in the basic scenario which was presented
above. As we can observe at the following table cash flows from operations are marginally
positive, at the area of 0-10.000 €, amount which is sufficient for covering IEZ’s taxes and leave a
minor compensation for the partners/ shareholders as a minimum compensation fee for the
resources that they spent for managing the structure.
Cash Flows
1
3
4
5
140.400,00 €
122.270,00 €
18.130,00 €
Cash Flows fom Investments
Land purchase
Basic facilities
Branding
Set up costs
Equipment
Website
Incidentals
Total
- €
- €
3.000,00 €
6.000,00 €
19.800,00 €
5.000,00 €
3.380,00 €
37.180,00 €
-
€
€
€
€
€
€
€
€
-
€
€
€
€
€
€
€
€
-
€
€
€
€
€
€
€
€
-
€
€
€
€
€
€
€
€
Cash Flows from Financing
Loan 1
Loan 2
Shares Issuing
Grants
Total
- €
30.000,00 €
- €
30.000,00 €
-
€
€
€
€
€
-
€
€
€
€
€
-
€
€
€
€
€
-
€
€
€
€
€
Less: Taxes
Less: Cash outflows for working Capital
Free Cash flows for loan redemption
- €
- €
10.950,00 €
- €
- €
2.760,00 €
Debt redemption
Interest
Principal payment
Total
- €
- €
- €
- €
- €
- €
10.950,00 €
- €
- €
2.760,00 €
- €
- €
-
25,05 €
- €
- €
-
2.914,66 €
- €
- €
-
5.912,64 €
- €
- €
10.950,00 €
10.950,00 €
2.760,00 €
13.710,00 €
-
25,05 €
13.684,95 €
-
2.914,66 €
10.770,29 €
-
5.912,64 €
4.857,65 €
Free Cash Flows for Distribution
Less: Dividends
Plus: cash flows for funding working capital
…
Change in cash
Cummulative Cashflow
6.6
2
Cash Flows from Operations
Sales Cash Inflows
Operating Expenses Cash Outflows
Total
247.300,00 €
244.540,00 €
2.760,00 €
-
-
249.773,00 €
249.798,05 €
25,05 €
- €
- €
25,05 €
-
-
- €
- €
- €
252.270,73 €
255.185,39 €
2.914,66 €
- €
- €
2.914,66 €
-
-
254.793,44 €
260.706,08 €
5.912,64 €
- €
- €
5.912,64 €
- €
- €
- €
- €
- €
- €
Sensitivity Analysis of key Cost and Revenue Drivers
Despite the fact that the whole revenue generation model is in straight conjunction with the
operating costs of IEZ in the following tables, a sensitivity analysis of IEZ sustainability has taken
place regarding grants, subscriptions from enterprises, personnel cost, experts’ fees and
investment costs. In all cases the independent factor has been altered by 10% to the negative for
the project viability direction (e.g. grants have been decreased by 10% while personnel costs have
been increased by 10%):
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Experts' fees +10%
Cash available
Enterprise Subscription -10%
Cash available
DELIVERABLE D4.3.1
1
2
3
4
5
11.790,00 €
16.230,00 €
17.816,91 €
16.443,79 €
11.999,81 €
4
5
1
2
10.950,00 €
10.110,00 €
1
2
3
6.448,95 € -
3
138,07 € - 9.759,79 €
4
5
Personnel costs +10%
Cash available
6.036,00 € - 1.032,00 € - 11.082,59 € - 24.224,31 € - 40.569,57 €
Investment costs +10%
Cash available
9.520,00 €
Grant -10%
Cash available
1
1
10.950,00 €
2
3
12.280,00 €
12.254,95 €
2
3
4
9.340,29 €
4
5
3.427,65 €
5
3.710,00 € - 6.415,05 € - 19.530,71 € - 35.746,36 €
As it was expected, IEZ viability seems to be highly dependent on operating costs and revenues,
while investment costs increases do not seem to affect cash flows (as they will be totally
integrated in a co-funding program).
More specifically:
•
A 10% decrease in each year’s grant will render the project unsustainable from Year 3
with a total funding deficit of c. 36.000 € for the whole 5 years of operation.
•
A 10% decrease in each year’s enterprise subscriptions will render the project
unsustainable from Year 4.
•
A 10% increase in each year’s personnel costs will render the project unsustainable from
Year 2 with a total funding deficit of c. 40.000 € for the whole 5 years of operation.
•
A 10% increase in each year’s experts’ fees will not create any needs for extra cash from
the IEZ.
•
A 10% increase in project’s investment costs will not create any needs for extra cash from
the IEZ.
It is concluded that with a 10% worsening in the most significant IEZ P&L components there will
be liquidity needs for the entity in order to operate seamlessly. These needs will not exceed c.
40.000 €. However it is obvious as the project seems to be highly sensitive in alterations of
operating revenues and costs, something that needs to be taken into account during the period
of set up and initial business planning.
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6.7
Main conclusions and recommendations on financial viability
The IEZ project due to its scope cannot be assessed and measured with all the traditional project
finance metrics, which only for completeness have been calculated in the following tables (the
ones that are applicable to our case).
Basic Ratios
1
Financial Ratios
Shareholders Cash Flows
ROI
Payback Period
Total cash flows (undiscounted
Shareholders' Equity to Total Investment
Cost
- 30.000,00 €
16,0%
0,00
3.427,65 €
2
3
- €
4
- €
5
- €
- €
100%
The project demonstrates a negative IRR (-9%), but this is something that can be attributed to our
relative short reference period of analysis as the Return on investment appears to be relatively
high at 16 %. Metrics concerning Shareholders profitability such as Equity IRR cannot be calculated
as they no dividends will be distributed. Shareholders’ Equity to Total Investment Cost is
estimated at 100% since all the investment needs are covered through equity. However our
analysis has not taken into account the resources that have to do with the structure management
and that the Shareholders/ partners will spend.
It is understood that the project’s viability is directly related to its ability to secure the required
amount of funding through grants every year of its operation. However, if the shareholders that
will operate the structure contribute to the coverage of operating expenses by providing (mainly)
personnel and/or facilities free of charge, IEZ will be marginally viable solely through its
operations.
As a conclusion, the main finding that someone needs to take into account is that the IEZ will be
able to remain sustainable with minor funding needs and at the same time obtain a very high
socioeconomic impact to the cross border area.
6.8
Presentation of Potential EU Funding Sources
The possible funding sources for the development of the IEZ in the four regions of the cross border
area that will be available in the period 2014 – 2020 can be summarized as following:
d. European programs that involving all the four regions of the eligible cross border area
from both countries:
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o
INTERREG V-A GREECE - BULGARIA 2014-2020
o
INTERREG EUROPE COOPERATION PROGRAMME 2014-2020
o
TRANSNATIONAL
COOPERATION
PROGRAMME
INTERREG
BALKAN-
MEDITERRANEAN 2014-2020
e. European programs involving just the two regions of the cross border area from the
Greek side:
o
Operational Program Central Macedonia 2014-2020
o
Operational Program Eastern Macedonia – Thrace 2014 - 2020
o
Operational Program Competitiveness, Entrepreneurship and Innovation 20142020
f.
European programs involving just the two regions of the cross border area from the
Bulgarian side:
o
Operational Programme “Innovation And Competitiveness” 2014-2020
The most important funding opportunities are further analyzed in the following paragraphs:
6.8.1
European programs that involving all the four regions of the eligible cross border area
from both countries
INTERREG V-A GREECE – BULGARIA 2014-2020103
The cross border program «INTERREG V-A GREECE – BULGARIA 2014-2020» is expected to be
signed off by the EC soon. The following data have been extracted from the draft version 1.1 which
was officially submitted to the EC in June 2015. The total available funds of the program will be
almost €130 mil. and the EU support will be in excess of €110 mil.
Existence of “smart
specialization” strategies in both participating countries and regions, which exhibit many
complementarities between the production systems and regarding the priorities established in
each country for this programming period. The CB area - despite its scientific and socio-economic
potential - has had very poor results in innovative entrepreneurship. Links between the research
community and businesses are very weak.
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In the draft program there are several IEZ related indicative actions (see p. 40) which could be
used, like:
•
“Creation of clusters or other types of “networks” (e.g. “value-chains”) for the
achievement of cost-savings, common research and product development, etc.,
•
Transfer and development of concepts for clustering and creating networks of SMEs to
meet a larger scale, more diverse and/or more complex demand (eg. marketing, export
promotion)
•
Collaboration schemes between businesses and non-businesses (e.g. private museums)
for the tourism/culture area,
•
Joint or common (horizontal) export support services for CB businesses (e.g. participation
to exhibitions and business-promotion events).”
The abovementioned actions fall into the:
•
Priority axis 1: «A Competitive and Innovative Cross-Border Area»,
•
Thematic objective 3: «Enhancing the competitiveness of small and medium-sized
enterprises, the agricultural sector (for the EAFRD) and the fisheries and aquaculture
sector (for the EMFF)»,
•
Investment priority 3d: «Supporting the capacity of SMEs to grow in regional, national
and international markets, and to engage in innovation processes»,
•
Specific objective 2: «To improve SME capacity to expand beyond local markets».
In the framework of the Priority Axis 01 «A Competitive and Innovative Cross-Border Area», there
is a specific output indicator: «Number of clusters and other collaborative schemes composed of
stakeholders/enterprises from both sides of border» with expected target value: 4 collaborative
schemes and a specific Intervention field: «Cluster support and business networks primarily
benefiting SMEs (code 063)» budgeted at € 2.500.000 (ERDF support).
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The cross border program «INTERREG EUROPE COOPERATION PROGRAMME 2014-2020» was
signed off by the EC on 03/03/2015 with total available funds of €426 mil. (EU support €
359.326.320, ERDF 85%).
The Strategy of the INTERREG EUROPE programme is that the program aims to reinforce the
effectiveness of cohesion policy by encouraging exchange of experience between regions on
thematic objectives. In particular, the program should contribute to the transfer of good practices
principally into the operational programs of the Investment for growth and jobs goal and, where
relevant, into those of the European Territorial Cooperation (ETC) goal. The program should also
integrate and build on results generated through previous EU initiatives related to innovation and
cluster support, for instance the Regions of Knowledge initiative. The programme will contribute
to smart, sustainable and inclusive growth in Europe by supporting (and facilitating) knowledge
sharing and good practice transfer among actors of regional relevance to improve
regional/Cohesion policy. The INTERREG EUROPE programme can further support European
regions by integrating the experiences from a number of related European initiatives. These
include in particular the Regions of Knowledge initiative that promoted Europe-wide cooperation
between public and private research centers, enterprises and authorities and supported regional
research-driven clusters.
In the program it is stated that the types of action that are eligible (p. 31) should be «In line with
the operational objectives, the programme supports two actions to allow partners from the
different Partner States to work together on a shared regional policy issue related to supporting
the delivery of innovation in the regional innovation chain: Interregional Cooperation Projects
and Policy Learning Platforms».
Example of possible project: Regional innovation agencies exchanging practices on cluster
development and management in life-science related clusters, resulting in Action Plans for
establishing new regional and cross border clusters through projects under their respective
regional Growth and Jobs and cross-border ETC programs.
The abovementioned actions fall into the:
•
Priority axis 1: «Research, Technological Development and Innovation»,
•
Thematic objective 1: «Strengthening research, technological development and
innovation»,
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Investment priority 1b: «Promoting business investment in R&I, developing links and
synergies between enterprises, research and development centers and the higher
education sector, in particular promoting investment in product and service development,
technology transfer, social innovation, eco-innovation, public service applications,
demand stimulation, networking, clusters and open innovation through smart
specialization, and supporting technological and applied research, pilot lines, early
product validation actions, advanced manufacturing capabilities and first production, in
particular in key enabling technologies and diffusion of general purpose technologies»,
•
Specific objective 1.2: «Improve the implementation of regional development policies and
programmes, in particular programmes for Investment for Growth and Jobs and, where
relevant, ETC programmes, that support the delivery of innovation by actors in regional
innovation chains in areas of “smart specialization” and innovation opportunity».
Further to this, in the program it is stated that the types of action that are also eligible (p. 39)
should be: «In line with the operational objectives, the programme supports two actions to allow
partners from the different Partner States to work together on a shared regional policy issue
related to supporting SME growth and entrepreneurship: Interregional Cooperation Projects and
Policy Learning Platforms».
Examples of possible Projects:
•
Cooperation among regional authorities and business support agencies to exchange
practices on the set-up and management of seed-capital facilities to support SMEs, to
prepare the creation of such financial support schemes through the partners’ programs
for Investment for Growth and Jobs or other regional business support programs.
•
Exchange of practices about SME internationalization and export support facilities among
regional development agencies, resulting in Action Plans for establishing new and
improving existing SME internationalization support facilities in each region through a
project under the regional Growth and Jobs programme or other regional programs.
•
Cooperation among regional authorities, business support players and education and
vocational training players to exchange experience and best practices on the
development of ICT skills for SMEs
The abovementioned actions fall into the:
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•
Priority axis 2: «Competitiveness of Small and Medium-Sized Enterprises»,
•
Thematic objective 3: «Enhancing the competitiveness of SMEs»,
•
Investment priority 3d: «Supporting the capacity of SMEs to grow in regional, national
and international markets, and to engage in innovation processes»,
•
Specific objective 2.1: «Improve the implementation of regional development policies and
programs, in particular programs for Investment for Growth and Jobs and, where relevant,
ETC programs, supporting SMEs in all stages of their life cycle to develop and achieve
growth and engage in innovation».
TRANSNATIONAL COOPERATION PROGRAMME INTERREG BALKAN - MEDITERRANEAN 20142020
The “Balkan-Mediterranean 2014-2020” is a new transnational cooperation programme, deriving
from both, the split of the “South East 2007 – 2013” and the strong will of the “BalkanMediterranean” participating countries to promote cooperation in the area.
The program is not yet signed off by the EC. The data that are presented below are extracted from
the draft version 1.0 (22/6/2015). The “Balkan – Mediterranean 2014-2020” Program is cofinanced by the European Regional Development Fund (ERDF) with €28.330.108. The total support
from the Instrument for Pre- Accession Assistance (IPA) fund accounts for €5.126.138. The overall
budget of the «Balkan – Mediterranean» CP is €39.727.654, including national contribution. For
the overall cooperation area, a co-financing rate of 85% is applied.
The TNCP “Balkan-Mediterranean 2014-2020” from the list of eligible regions and areas for the
transnational strands of the European Territorial Cooperation (ETC) objective covers the following
areas (the entire country) : the EU Member States (Bulgaria, Cyprus, Greece), the IPA Partner
States (Albania, the former Yugoslav Republic of Macedonia).
In the «Programme Manual» and specifically in page 14, there are several actions, related to the
IEZ development, such as:
•
Clusters and clusters’ networks’ promotion clearly oriented to jobs and new firms
creation,
•
Cooperation between clusters and business networks, sharing, transfer and testing
activities and pilot implementation projects, such as development of methodologies, peer
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mentoring, workshops and seminars to exchange best practices on entrepreneurship
including online based,
•
Joint entrepreneurial activities’ development and expansion of cluster activities, including
clusters’ networks’ cooperation targeting competitiveness, efficiency and adjustment to
more diverse and/or more complex market demands,
•
Joint framework development for joint business clusters both, in traditional and new
products/services coupled with joint applications and tests’ development.
The abovementioned actions fall into the:
•
Priority axis 1: «Entrepreneurship & Innovation»,
•
Thematic objective 3: «Enhancing the competitiveness of SMEs, the agricultural sector
(for the EAFRD) & the fisheries & aquaculture sector (for the EMFF)»,
•
Investment priority 3a: « Promoting entrepreneurship, in particular by facilitating the
economic exploitation of new ideas and fostering the creation of new firms, including
through business incubators»,
•
Specific objective 2: «Competitive territories: stimulating business performance and
extroversion through transnational linkages, clusters and networks».
6.8.2
European programs involving just the two regions of the cross border area from the
Greek side:
REGIONAL OPERATIONAL PROGRAM OF CENTRAL MACEDONIA 2014-2020105
The Regional Operational Program "Central Macedonia, 2014-2020" which is one of the thirteen
(13) Regional Operational Programs of the Partnership Agreement of the NSRF for 2014-2020, has
been approved on 12.18.2014 by the European Commission. The total funding for the program
amounts to € 964.864.185 (Community contribution € 771.891.345).
In the Regional Operational Program "Central Macedonia 2014-2020", indicative type of actions
are the «Creation of clusters in selected sectors of the economy value chains for production and
distribution of innovative products / services» (page 122 of the Program) to cover the verified
weakness, that all business sectors of the Region are characterized by the large number of the
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small and family-owned companies with an organizational structure that does not provide
strength to tackle strategic challenges and low level technology.
This weakness is aggravated by the lack of business clusters that could greatly outweigh the
economic scale problems, to enable them to compete on better terms the large enterprises.
Under Priority Axis 3 "Improving the competitiveness of SMEs', the intervention field has been
introduced (code.063) « Supporting clusters and business networks par excellence for the benefit
of SMEs» and a budget of € 12.800.000 (ERDF support).
The abovementioned actions fall into the:
•
Priority Axis 3: «Improving the competitiveness of SMEs»
•
Thematic Objective 3: «Improving the competitiveness of SMEs and the agricultural
sector (for the EAFRD) and the fisheries and aquaculture sector (for the EMFF)»
•
Investment Priority 3d: «Supporting the capacity of SMEs to grow at regional, national
and international markets and participate in innovation processes»
•
Specific Objective 3d1: «Increasing productivity and outward orientation of SMEs.»
It also envisages measures «Strengthening permanent collaborative mechanisms to design a
framework for stakeholders, led by industry, to determine priorities in the field of RTDI,
timeframes and action plans in areas of strategic importance (RIS3) where the objectives for
future growth, competitiveness and sustainability of RCM depends on research and technological
developments in the medium or long term. It envisages strengthening of such a mechanism for
each priority RIS3 involving items of technological innovation "(page 69 of the Program) »
The abovementioned actions fall into the:
•
Priority Axis 1: «Strengthening research, technological development and
innovation»
•
Thematic Objective 1: «Strengthening research, technological development and
innovation»
•
Investment Priority 1b: «Promoting business investment in research and
innovation, development of links and synergies between businesses, research and
development centers and higher education, particularly by promoting investment
in product and service development, technology transfer, social innovation in
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ecological innovation, public service applications, to encourage demand,
networking in clusters and open innovation through smart specialization and
supporting technological and applied research, pilot projects, rapid ratification
actions products, advanced production skills and first production, especially in key
technologies, and dissemination of enabling technologies»,
•
Specific Objective 1b2: «Creating permanent collaborative mechanisms between
research units and enterprises and between enterprises for the promotion of
applied research (areas RIS3) and for transfer of knowledge and technology."
Also, actions are foreseen for «Aid for investment RTDI partnerships or collaborations between
businesses, academic, research centers and / or international partners for applied research to
solve problems of common interest or to jointly develop new products. Such action may include
pilot projects» (page 67 of the program).
The abovementioned actions fall into the:
•
Priority Axis 1: «Strengthening research, technological development and innovation».
•
Thematic Objective 1: «Strengthening research, technological development and
innovation».
•
Investment Priority 1b: «Promoting business investment in research and innovation,
development of links and synergies between businesses, research and development
centers and higher education, particularly by promoting investment in product and service
development, technology transfer, social innovation in ecological innovation, public
service applications, to encourage demand, networking in clusters and open innovation
through smart specialization and supporting technological and applied research, pilot
projects, rapid ratification actions products, advanced production skills and first
production, especially in key technologies, and dissemination of enabling technologies.»
•
Specific Objective 1b1: «Promoting investment in developing products and services in
priority areas of the Strategy Smart Specialization (RIS3)».
REGIONAL OPERATIONAL PROGRAM OF EASTERN MACEDONIA - THRACE 2014-2020 106
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The Regional Operational Program "Eastern Macedonia - Thrace 2014-2020" which is one of the
thirteen (13) Regional Operational Programs of the Partnership Agreement of the NSRF for 20142020 approved on 12.18.2014 by the European Commission. The total funding for the program
amounts to € 507.739.340 (EU contribution €406.191.468).
The development vision of the Region of Eastern Macedonia - Thrace for 2020, taking into account
the results of the strategy of smart specialization as regards the sectors with comparative
advantage, is formulated as the «reconstruction of the productive model of the Region to be
transformed into a tourist destination of excellence and important industrial pole, exploiting its
comparative advantage in the agrifood complex, the rich endogenous potential, its geographical
location and promoting social cohesion by mobilizing existing and new social collectives.»
After the evaluation within the formation process of the Strategy Smart Specialization (RIS3), one
of the main needs of the sector «innovation» is «to strengthen the networking between business
and the academic sector for technology transfer.» The process RIS3 highlighted significant
weaknesses in the capabilities of the players of the Quadruple helix to contribute to shaping a
coherent and documented strategy for innovation. Therefore, a high-priority need for upgrading
the institutional capacity of stakeholders in the regional innovation system (academic / research
and business sector, local and regional government) and strengthening of networking among
themselves in order to effectively operate the system of government introduced by RIS3.
Through the Thematic Objectives 1, 2 and 3, to improve the competitiveness of the local economy
(P.Α. 1), by investing in areas highlighted by the Regional Strategy «Smart Specialization» the
amount of 56.3 million Euros is directed to this direction. Whereas it is recognized as an urgent
need to strengthen integrated production complexes an important part of available resources is
directed to support clusters and business networks.
In the regional operational program 'Eastern Macedonia - Thrace 2014-2020 «indicative type of
actions, is the «Creation of business incubators» (Page 62 of the Program).
The abovementioned actions fall into the:
•
Priority Axis 1: «Improving the competitiveness of the local economy»
•
Thematic Objective 3: «Improving the competitiveness of SMEs and the agricultural sector
(for the EAFRD) and the fisheries and aquaculture sector (for the EMFF)»
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Investment Priority 3a: «Promoting entrepreneurship, in particular by facilitating the
economic exploitation of new ideas, support for the creation of new firms, including
through business incubators»
•
Specific Objective 4: «Increasing tension Youth Business Research and Technology (NEET)
in priority areas of the Regional Strategy Smart Specialization (RIS3)».
In addition, as one of the indicative types of action are the «Individual business investments in
applied research aimed at product innovations. These actions may be relate to investment plans
of individual companies with sufficient capacity R & K or business collaborations with academic
or research institutions» (page 46 of the program).
The abovementioned actions fall into the:
•
Priority Axis 1: «Improving the competitiveness of the local economy»
•
Thematic Objective 1: «Strengthening research, technological development and
innovation»
•
Investment Priority 1b: «Promoting business investment in research and innovation,
development of links and synergies between businesses, research and development
centers and higher education, particularly by promoting investment in product and service
development, technology transfer, social innovation, the ecological innovation, public
service applications, to encourage demand, networking in clusters and open innovation
through smart specialization and supporting technological and applied research, pilot
projects, rapid ratification actions products, advanced production skills and first
production, especially in key technologies, and dissemination of enabling technologies»,
•
Specific Objective 1: «Increasing business investment in research and innovation to
develop new products and services in priority areas of Regional Strategy Smart
Specialisation (RIS3)».
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The Operational Program «Competitiveness, Entrepreneurship and Innovation» which is one of
the five sectoral operational programs of the Partnership Agreement of the NSRF for 2014-2020,
was adopted on 12.18.2014 by the European Commission. The Program, utilizing € 3.65 billion
Community Contribution (€ 4.67 billion Public Expenditure) from the budget of the new
programming period, aims to create a new development model that highlights a central role in
productive, competitive and extrovert sectors of the economy and implements the Smart
Specialization strategy aimed at linking research and innovation with entrepreneurship and
enhancing existing strengths of Greece and its regions as necessary conditions for long-term
development and prosperity of its citizens.
The operational Program «Competitiveness, Entrepreneurship and Innovation 2014-2020», pilot
actions that will receive funding are: «Actions to promote business investment in Research and
Innovation» which aims inter alia to «Support for the creation and development of clusters or
business partnerships , research and educational institutions, as a tool for the development of
new knowledge-intensive business activities and to combat the fragmentation of the country's
business and research strengths and weakness linking research to production» (page 61 of the
Program).
The abovementioned actions fall into the:
•
Priority Axis 1: Entrepreneurship Development with sectoral priorities,
•
Thematic Objective 1: Strengthening research, technological development and
innovation,
•
Investment Priority 1b: Promoting business investment in research and innovation,
development of links and synergies between businesses, research and development
centers and higher education, particularly by promoting investment in product and service
development, technology transfer, social innovation, the ecological innovation, public
service applications, to encourage demand, networking in clusters and open innovation
through smart specialization and supporting technological and applied research, pilot
projects, rapid ratification actions products, advanced production skills and first
production, especially in key technologies, and dissemination of enabling technologies ,
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Specific Objective 1.1: Increase business initiatives and partnerships for the development
of innovative entrepreneurship under national research and innovation strategy for smart
specialization (strategy RIS3).
Also one of the types of actions which are going to receive financial support from the program
above, has to do with «hatching Infrastructures new knowledge-intensive business activities
and incubators», aiming at «Strengthening of existing or creation of new infrastructure for the
incubation of new business knowledge-intensive activities and warmers (incubators) to
promote innovative and commercial ideas to enhance startups entrepreneurship» (page 92 of
the Program).
The abovementioned actions fall into the:
•
Priority 1: Entrepreneurship Development with sectoral priorities,
•
Thematic Objective 3: Improving the competitiveness of SMEs and the agricultural sector
(for the EAFRD) and the fisheries and aquaculture sector (for the EMFF)
•
Investment Priority 3a: Promotion of entrepreneurship, in particular by facilitating the
economic exploitation of new ideas, support for the creation of new firms, including
through business incubators,
•
Specific Objective 1.3: Developing entrepreneurship through new innovative ideas a
priority in the strategic areas of the country.
6.8.3
European programs involving just the two regions of the cross border area from the
Bulgarian side:
OPERATIONAL PROGRAMME «INNOVATION AND COMPETITIVENESS» 2014-2020108
The Bulgarian Operational Program «Innovations and Competitiveness 2014-2020» was signed off
by the EC on 16/03/2015 with a total available funds of €1.390.135.903 (Union support
€1.181.615.516, ERDF 85%). The Program is mainly focused on SMEs. Under a specific part of the
measures supported by Operational Programme «Innovations and Competitiveness» (OPIC), big
enterprises shall be eligible as beneficiaries too. Support is also envisaged for clusters, technology
transfer offices and technology centers, Sofia-Tech Park, various agencies and government
structures that provide services to the business. The expected results from the implementation
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of OPIC include support of over 9000 enterprises by means of grant aid or financial instruments,
mobilization of over € 1 billion of private investments, increase of the share of innovative
enterprises, enhancement of SME’s efficiency and contribution to the reduction of the economy’s
energy consumption.
Based in the program documentation there are Indicative actions that will receive funding and
are related to IEZ:
•
Development of cooperation for innovation between enterprises, between business and
academia incl. internationalization of the innovation process.
•
Support for innovation in enterprises, incl. development and introduction of new
products, processes and business models in enterprises,
•
Support for development of environment and research and innovation infrastructure for
business needs.
The development of cooperation for innovation between enterprises and, between business and
academia, incl. internationalization of the innovation process will be encouraged through
implementation of cooperation projects, including clustering and participation in pro-innovative
EU networks and platforms. Opportunities will be created for companies and leading national
and/or European academic and research groups to collaborate, which will lead to the
creation/development of innovative capacity and sharing resources for the development and
implementation of innovative processes and products, protection and transfer of copyright and
license royalties, commercialization of the results. On the other hand, mostly for high technology,
cluster approach could be applied for identification and structuring of partnerships with the aim
of technology transfer needed for introducing innovations in individual companies within the
cluster. Furthermore, mutual cooperation could be supported also through the development of
technology transfer offices and technology centers. Support will focus on science-business
relationship management, intellectual property rights, commercialization through licenses and
start-ups, researchers’ awareness about intellectual property rights and commercialization.
In the framework of the Priority Axis 1 «Technological development and Innovation» there is a
specific Intervention field (code 063) «Cluster support and business networks primarily
benefiting SMEs» budgeted at €13.005.000 (ERDF support).
The abovementioned actions fall into:
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•
Priority axis 1: «Technological development and Innovation»,
•
Thematic objective 1: «Strengthening research and development, technological
development and innovation»,
•
Investment priority 1.1: «Technological development and innovation»,
•
Specific objective 1.1: «Increased innovation activity of enterprises».
Further to the above, in page 76 of the program it is also mentioned that indicative action that
will receive funding include:
•
general productive investments for enhancing the production capacity for growth
through effective and efficient use of the factors of production and through creation of
opportunities for adoption and adaptation of European and international knowledge and
technology,
•
support for specialized services to SMEs to develop and strengthen the management
capacity,
•
support for the growth of businesses by improving the quality and by promoting the use
of ICT and services,
•
support for the implementation of activities and services for direct benefit of the business
development and opportunities for SMEs export.
Support for the implementation of activities and services for direct benefit to business
development and opportunities for SMEs export – investment will be made for improvement of
entrepreneurial culture on unification of SMEs in clusters; promoting international activities of
Bulgarian SMEs by providing information and advices about European and third country markets,
organizing trainings for internationalization and export management of SMEs, organization of
showrooms and information events in Bulgaria, of business forums in the country and abroad,
supporting the participation of enterprises in trade missions abroad, as well as in national and
international exhibitions to promote Bulgarian production; information, business statistics,
databases and etc.; investment and export-oriented activities, including support to exportfocused associations, organizing visits to potential investors and partners of SMEs in the country;
program to attract foreign investments in targeted sectors and countries through proactive
investment marketing.
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In the framework of Priority Axis 2 «Entrepreneurship and Capacity for growth of SMEs» there is
the specific intervention field (code 063) «Cluster support and business networks primarily
benefiting SMEs» budgeted at €32.512.000€ (ERDF support).
The abovementioned indicative actions fall into:
•
Priority axis 2: «Entrepreneurship and Capacity for growth of SMEs»,
•
Thematic objective 3: «Enhancing the competitiveness of small and medium-sized
enterprises»,
•
Investment priority 2.2: «Capacity for SMEs to grow»,
•
Specific objective 2.2: «Strengthening productivity and export potential of Bulgarian
SMEs».
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ACTION PLAN
The most significant actions for the creation of IEZ are identified, prioritized and analyzed in a
concise yet comprehensive action plan. Actions are separated into 4 categories depending on
their subject. For each action there is a description, specific activities, priority rank, specific
responsibilities, time plan, cost or other resources needed and some measures in order to monitor
the implementation of the plan. This set of characteristics give a very clear and overall view of
what has to be done, which way and how. The action plan is presented in the form of a unique
table in order to be more useful and practical in guiding towards the development of IEZ.
7.1
Action categories
The Action Categories are used in order to group actions under specific subjects. The Categories
are described in the following table:
Categories
Scope
Code
IEZ governance and
leadership
development
This group of actions aims to the creation of a governance
structure that reflects best practices and provides clear
leadership to the IEZ organisation.
01
IEZ Organisation
structure
development and
Staffing
This group of actions aims to build a capable management
team, through staff development and/or new appointments
that has the appropriate experience and skills to drive the
development of IEZ.
02
Development of IEZ
Activities and Service
Portfolio
This group of actions aims to the development of the full IEZ
activity map and service portfolio in a sustainable way and
through the maximization of interregional cooperation.
03
Development of IEZ
high visibility and
awareness in the
interregional area
This group of actions aims to establish a solid and
sustainable visibility and awareness building mechanism
that will disseminate IEZ’s capabilities in all recipient groups
in the interregional area.
04
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7.2
DELIVERABLE D4.3.1
IEZ Development Action plan
Category
Code
Action
Sub code
Actions
01
01.01
Action Plan Initiation
01
01.02
Elaboration of a clear
governance scheme for the
IEZ
01
01.03
Consultation of the First
Draft of the Governance
Scheme
Description
This action will initiate the process of the
development of the IEZ. The results of the present
study will be presented to all the participants of the
project in a two days conference that will conclude
with the formulation of an Initial MOU for the
creation of the IEZ.
The LP will elaborate a first draft of the governance
scheme that is proposed to be adopted for the
management of the IEZ.
The draft can be based on the basic principles that
are presented in the feasibility study and it will be
subject of consultation with all the partners that will
be part of the IEZ. The Governance scheme will have
to define at least:
− the organisational chart of the IEZ
− the decision making process and
mechanism
− the power of each body within the
organisational chart
− the number and type of the Working groups
− the number and type of representative
offers
− the representation of each participant in
the decision making bodies
The First Draft of the Governance Scheme will be
presented to all participants. The participants will
comment have the opportunity to submit their
comments in order to foster the Governance
Scheme. The LP will be responsible to collect
comments and consolidate them after the
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Responsible
Partner
Duration
Output
LP
2 days
Initial MOU for the
Development of the
IEZ
LP
2 weeks
First Draft of
Governance Scheme
LP and All
partners
2 weeks
Final Governance
Scheme
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01
01.04
Adoption of the Governance
Scheme and official initiation
of the IEZ
02
02.01
Appointment of
Management Team (MT)
02
02.02
Creation of Interregional
Sectoral Working Groups
02
02.03
Creation of Representative
offices
DELIVERABLE D4.3.1
consultation and present the outcome to all the
participants.
After the consultation and the finalization of the
Final Governance Scheme, all the participants will
declare officially their participation in IEZ and they
will pledge their duties in supporting its operation.
An official partnership agreement will be signed by
all members and the Board of Directors will be
appointed based on the representation of each
partner, in a two days conference.
After the official partnership agreement the Board of
Directors will have to run all the necessary processes
for the establishment of the EGTC that will
incorporate the IEZ activity.
The Board of directors will gather and evaluate
proposals for the member – partners regarding the
appointment of the management team. The
evaluation shall meet the criteria described in the
relative chapter of the present study.
The first action to be implemented by the MT is the
definition and the creation of the exact Interregional
– Sectoral Working Groups (ISWGs). The ISWG will
operate under the model of the “Technology
Platform” and promote interregional cooperation in
all three aspects of the Quadruple helix. Based on the
concept described in the relevant chapter of the
present study. The final configuration of the ISWG’s
will be signed off by the BoD.
Representation Offices will be the operational arms
of the IEZ, responsible for the service delivery,
dissemination action, marketing actions and
promotion of interregional cooperation in
entrepreneurship, research and employment. The
MT will define the exact needs based on the
proposed configuration of the present study and will
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All partners
3 months
− IEZ Partnership
Agreement
− Established EGTC
Board of
Directors
(BoD)
1 month
Appointed
Management Team
(MT)
Management
Team & Board
of Directors
1 month
Interregional –
Sectoral Working
Groups
Management
Team
2 months
Operational
Representative
Offices
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02
02
03
02.04
Appointment of
Representative officers
02.05
Infrastructure development
(both HW ad SW)
03.01
Development of the IEZ’s
Operational Model
DELIVERABLE D4.3.1
obtain the necessary office spaces (utilizing current
spaces belonging to the partners of IEZ), furnish
them appropriately and make them full operational.
Alongside with the creation of the representation
offices the MT will select, evaluate and appoint
Representative Officers. The first choice shall be
people that are already employed by the partners at
the area of the relative office and they meet the
selection criteria as they are described in the relative
chapter of this study. These officers would rather
work at a full time basis for the IEZ if this is possible.
The most significant value of the officers shall be
their motive to promote interregional cooperation
between
entrepreneurs,
researchers
and
employees. The final appointment of the officers will
be signed off by the MT.
After the appointment of the Representation
officers, the MT and the Officers team will estimate
the exact needs in infrastructures (based on the
estimation that is already given in this study). Great
emphasis should be given to the utilization of the
results of the Project especially referring to the
platform and the content that is already produced.
The offices shall start operating on these resources
and gradually develop their infrastructure using
available funding sources.
The operational model of IEZ has to be simple,
efficient and promote interregional cooperation. It
has to support the implementation of all the
activities that are described in the present study in a
cost efficient and sustainable way. In this framework
the MT and the Representative Officers should work
closely together in order to utilize the core
competencies of each partner and find ways to tackle
weaknesses. The proposed operational model and
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Management
Team & Board
of Directors
2 months
Appointed
Representation
officers
Management
Team &
Representativ
e Officers
1 month
Office infrastructure
developed
2 months
Full description of
the operational
model, processes,
roles and
responsibilities
Management
Team &
Representativ
e Officers &
Board of
Directors
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03
03.02
Development of the IEZ’s
Service Portfolio
DELIVERABLE D4.3.1
activity map is based on a lean – organisation
approach and should be used as the basis for the
final rollout. The Representative officers should
record the competencies of each partner, assign the
implementation of specific activities to the most
appropriate partner/Representation Office and
establish close cooperation processes in order to
utilize all the available strengths for a common
benefit. These win – win situation will gradually lead
to a compact yet efficient scheme that delivers true
value to the beneficiaries. The final operational
model should be agreed with the MT and signed off
by the Board of Directors. The final output should
include specific activities, roles and responsibilities
for each activity of the IEZ. It is not necessary to
incorporate all the described activities from the
beginning. In this case there has to be an agreed
timeframe in which the entire operational model will
be deployed.
The proposed service portfolio includes services to
all the stakeholders of the “Quadruple helix” model:
entrepreneurships, researchers and employees. The
goal of this action is to develop this service portfolio
maximizing the value for end users/beneficiaries.
The fundamental principle for the achievement of
this goal is to understand as clearly as possible the
needs of each beneficiary group and develop the
relative services in a way that cover these needs. In
this framework and utilizing the knowledge that is
produced through the Strategic project, the MT and
the Representative Officers should work closely in
order to:
• define the exact needs of each beneficiary
group
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Management
Team &
Representativ
e Officers
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4 months
Detailed Description
of Service Portfolio
and Delivery Process
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•
•
•
•
•
04
04.01
Formulation of a unique
Marketing Plan
04.02
IEZ Awareness meetings with
local “Quadruple helix”
stakeholders
DELIVERABLE D4.3.1
design the service delivery process in an
efficient way utilizing the existing
knowledge
utilize competencies of the partners in
delivering several services
leverage and utilize external resources in a
way that could be affordable for the
beneficiaries (eg organize group training
sessions which differently would not be
affordable for single enterprises)
utilize existing infrastructure and software
constantly review and upgrade service
portfolio to meet emerging needs
The MT will cooperate with the Representative
Officers in order to develop a unique Marketing plan
aiming at leveraging general and targeted awareness
of the IEZ among “Quadruple helix” stakeholders.
The marketing plan should be taking into account the
needs and conditions of the interregional area and
exploit all the modern communication media like
social media, blogging etc. The marketing plan will
have a 5 years implementation period and shall be
based on the unique value proposition that IEZ offers
to its beneficiaries (see IEZ Business Model Canvas).
This is actually a set of meetings that should be
implemented at the same time in all the regions of
the cross border area. These meetings should be
targeted to the major actors of the “Quadruple helix”
stakeholders and thus include meetings with
regional authorities, research centers and hubs,
entrepreneurship community and boards, chambers,
employees unions etc. The goal of the meetings
should be the rise of the awareness regarding the IEZ
presence, role, activities and supporting services.
These meetings will have multiple effects on the
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Management
Team
2 months
Unique IEZ
Marketing Plan
Management
Team &
Representativ
e Officers
Constantly
List of meetings,
Minutes of Meetings
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04.03
04.04
Implementation of general
awareness building actions
Development of Marketing
material and digital presence
DELIVERABLE D4.3.1
overall awareness of the IEZ thus the selection of the
counterparts should be very intelligent.
Alongside with the implementation of the targeted
meetings, the Representative Officers should
organize some general small scale events /
workshops in order to upgrade the overall awareness
of the IEZ. These workshops could even be parallel
events of larger events like business conferences,
research conferences, university open days, career
days etc. These actions should be of high visibility
and low budget in order to maximize their outcome.
All the above mentioned marketing actions should
be supported by the appropriate marketing material
and accompanied by a strong digital presence. The
material should include brief brochures,
presentations and other dissemination material
which will be developed under a unique identity by
the representative Officers of the IEZ and signed off
by the MT. The website of IEZ should not be used
only as a digital presentation tool but also it should
be utilized a resource sharing platform, news and
knowledge dissemination and single point of
information regarding actions and services provided
by the Zone. The website should be at least in Greek,
Bulgarian and English in order to boost the
cooperation climate among cross border regions.
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Management
Team &
Representativ
e Officers
Constantly
List of events,
Memos on results
Management
Team &
Representativ
e Officers
2 months
for
developme
nt,
constant
maintenan
ce
Marketing and
Dissemination
material, operational
website.
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7.3
DELIVERABLE D4.3.1
IEZ Development Time Schedule
The total time schedule for the development of the IEZ is presented below. It is estimated that
the implementation of the action that will lead to a full operational scheme, will last
approximately 12 months from the initiation of the development process. The actions that are
depicted in blue color are milestones (two days conferences) and the ones in yellow color refer to
standard actions. The standard time unit of the time table is one month which is appropriate for
the current level of analysis.
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Category
Code
Action
Sub
code
Actions
Duration
1
01.01
Action Plan Initiation
2 days
1
01.02
Elaboration of a clear governance scheme for the IEZ
2 weeks
1
01.03
2 weeks
1
01.04
Consultation of the First Draft of the Governance Scheme
Adoption of the Governance Scheme and official initiation of
the IEZ
2
02.01
Appointment of Management Team (MT)
1 month
2
02.02
Creation of Interregional Sectoral Working Groups
1 month
2
02.03
Creation of Representative offices
2 months
2
02.04
Appointment of Representative officers
2 months
2
02.05
Infrastructure development (both HW ad SW)
1 month
3
03.01
Development of the IEZ’s Operational Model
2 months
3
03.02
Development of the IEZ’s Service Portfolio
4 months
4
04.01
2 months
4
04.02
4
04.03
Formulation of a unique Marketing Plan
IEZ Awareness meetings with local “Quadruple helix”
stakeholders
Implementation of general awareness building actions
4
04.04
Development of Marketing material and digital presence
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m1
m2
m3
m4
m5
m6
3 months
Constantly
Constantly
2 months &
constant
maintenance
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m7
m8
m9
m10
m11
m12
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DELIVERABLE D4.3.1
7.4 Critical Success Factors
There are several factors that are critical for the successful development and operation of the IEZ.
These factors come from both the internal and the external environment and should be
adequately faced in order to assure IEZ’s development. In the following table we present the more
significant factors as well as their relevant importance, their internal or external orientation and
the ways that could be faced.
Factor
Partners
willingness to
pledge their
duties in
developing IEZ
and supporting its
operation
Financial
Sustainability
Stakeholders
resistance to
participate
Conflict with
other entities
Orientation
Internal
Internal
External
External
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Importance
Actions
High
• Establish a common understanding from
the beginning taking into account the
diversifications among regions and
different opinions
• Address the true needs of stakeholders
in all regions and allow sufficient
operational flexibility to overcome
regional differences
• Establish substantial relations between
partners
High
• The partners should support the financial
viability of IEZ either by offering facilities,
infrastructure and HR or by offering
financial resources
• IEZ should be extremely active in
attracting European and National
funding
High
• IEZ should implement a solid marketing
and communication plan in order to
present the scope and the expected
results for all the stakeholders of the
“Quadruple helix” model.
• IEZ should emphasize in the results
derived from Quadruple helix
cooperation and in interregional
cooperation and how stakeholders will
have sustainable financial benefits from
these cooperation
Medium
• One of the fundamental principles of IEZ
development is to cooperate and utilize
all the existing entities which promote
entrepreneurship, innovation, research,
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DELIVERABLE D4.3.1
employment, interregional cooperation
etc. In this context IEZ should make clear
from the beginning that its intentions are
to cooperate and assist other entities in
achieving their goals
• A series of face to face meetings have to
take place with other entities in order to
establish good relations and
communication
Management
Team
effectiveness
Internal
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High
• The members of the management team
should come from the existing staff of
the partners in order to be fully aligned
with the strategy, the policies and the
current situation of the economy of each
region
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8
DELIVERABLE D4.3.1
BIBLIOGRAPHIC RESOURCES
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BULGARIA
2014-
2020
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REGARDING
POLICY
RELATED
AND
LEADING
213
TO
“Feasibility Study for the creation of an Interregional Entrepreneurship Zone”
DELIVERABLE D4.3.1
ENTREPRENEURSHIP, COMPETITIVENESS, INNOVATION AND SMART SPECIALIZATION
BULGARIA - Project title “Smart Specialization”
18. Strengthening Clusters and Competitiveness in Europe - The Role of Cluster Organisations
19. Evaluation of the NSRF 2007-2013 Policy Mix in Support of Entrepreneurship,
Competitiveness and Innovation - Project title “Smart Specialization”
20. Methodology and Findings Report for Correlation Analysis between Cluster Strength and
Competitiveness Indicators - European Cluster Observatory Report
21. Study on the effects of on-going policies to improve competitiveness in the Regions of
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