Horizon 2020 Policy Support Facility

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1 Horizo 2020 Policy Support Facility The Romaia etrepreeurial ecosystem iitial fidigs from Backgroud Report Alfred Radauer Laura Roma Techopolis Group 28 July 2016

2 The structure of the backgroud will follow prove structure for similar PSF aalyses 1. SMEs ad iovatio i Romaia 2. Busiess ad start-up eviromet a. Geeral busiess eviromet b. Access to fiace c. Start-ups ad start-up ecosystem 3. Key policy documets o start-ups ad spi-offs 4. Support mechaisms for the start-ups ad spi-offs a. Support from atioal sources b. Support from the ERDF c. Fudig from H2020 vs. ERDF fuds d. VC schemes Horizo2020 Policy Support Facility Page 2

3 SMEs ad Iovatio performace Page 3

4 Busiess demographics Overall positive treds sice 2010, there is a growig tred for eterprises with 1-4 employees, which made up 70% of all busiesses i ,000 Populatio of active eterprises (umbers by year) 700, , , , , , , Zero 1-4 employees 5-9 employees 10 employees or more Total Horizo2020 Policy Support Facility Page 4

5 New busiesses dyamics New eterprise formatio has picked up i 2013, well-above pre-crisis levels for eterprises with 1-4 employees; The survival rates of ew eterprises have bee very volatile Birth rate of ew eterprises, % Survival rates, % Zero From 1 to 4 employees From 5 to 9 employees From 10 employees or more Survival rate 1 Survival rate 2 Survival rate 3 Source: Eurostat Horizo2020 Policy Support Facility Page 5

6 Small Busiess Act Fact Sheet Romaia's o-fiacial busiess ecoomy has ot yet fully recovered from the crisis. I 2014, SME value added ad SME employmet were still aroud 12 % ad lower, respectively, tha before the crisis. I the umber of SMEs is expected to icrease by 6.2 %, aroud ew SME jobs are predicted ad SME value added is projected to grow aually by 8.5 %. Implemetig the SBA Romaia's SBA performace is below the EU average. However, it excels i etrepreeurship, where it is the EU leader. The mai challege lies i poor ad still decliig results i skills ad iovatio. Source: SBA Fact Sheet Romaia, Horizo2020 Policy Support Facility Page 6

7 Iovatio performace of eterprises Romaia a modest iovator iovatio performace decreased overtime relative to EU average Romaia Latvia Bulgaria Croatia EU Horizo2020 Policy Support Facility Page 7

8 Iovatio performace scores Weakest relative performace: Likages ad etrepreeurship Ecoomic effects Iovators Itellectual assets The firm ivestmets ad fiace ad support dimesios are further weak poits. Likages & etrepreeurship Firm ivestmets Fiace ad support Research systems Huma resources Summary Iovatio Idex EU Romaia Horizo2020 Policy Support Facility Page 8

9 Busiess ad Start-up Eviromet Page 9

10 Romaia s global competitiveess (WEF, 2016) Romaia is raked 53 globally, amog 140 ecoomies. Weak framework coditios: Ifrastructure ad istitutios Busiess sophisticatio ad iovatio: low Busiess sophisticatio Market size Iovatio Istitutios Ifrastructure 5.4 Macroecoomic eviromet 5.5 Health ad primary educatio Higher educatio ad Techological readiess 4 traiig Fiacial market Goods market efficiecy developmet Labor market efficiecy Horizo2020 Policy Support Facility Page 10

11 Doig Busiess i Romaia Romaia Raked 37 out of 189 coutries i WB Doig Busiess Report 2016 Topics DB 2016 Rak DB 2015 Rak Startig a busiess Dealig with costructio permits Gettig electricity Registerig property Gettig credit 7 6 Protectig miority ivestors Payig taxes Tradig across borders 1 1 Eforcig cotracts Resolvig isolvecy Source: WB Doig Busiess 2016; = recet Doig Busiess reform, makig it easier to do busiess Horizo2020 Policy Support Facility Page 11

12 Digital Etrepreeurship Scoreboard performace Romaia raks oly 28th amog EU coutries. It is part of the group of coutries that are catchig up. Source: DESI 2016 Horizo2020 Policy Support Facility Page 12

Itegratio of Digital Techology: Busiess digitizatio Busiesses i Romaia are adoptig differet digital techologies to ehace productivity, such as sharig iteral iformatio electroically

13 Itegratio of Digital Techology: Busiess digitizatio Busiesses i Romaia are adoptig differet digital techologies to ehace productivity, such as sharig iteral iformatio electroically or usig RFID, eivoicig, Social Media ad Cloud. Source: DESI 2016 based o Eurostat - Commuity survey o ICT usage ad ecommerce i Eterprises Horizo2020 Policy Support Facility Page 13

14 Romaia i the start-up maifesto (I) Start-Up Maifesto created by ie etrepreeurs as To-Do list (14-page roadmap, 22 actio poits) of actios...to make it easier for Europea start-ups to thrive right here i Europe. Moitorig data for Romaia reveals.. Ecoomic hardship as driver for etrepreeurial culture, resiliece ad self-sufficiecy Cosiderable techical skills / resources Strog culture of programmig, iovatio ad icubatio emergig Hotspots: Uiversities i Bucharest, Timisoara, Cluj-Napoca, Iasi ad Costata Numerous icubators, co-workig spaces ad evets Modest, but growig start-up fugues Barriers: lack of start-up fudig, bak ledig ad equity ivestmet, as well as a relatively small domestic cosumer market Source: Start-Up Maifesto, Horizo2020 Policy Support Facility Page 14

15 Romaia i the start-up maifesto (II) The overall results are hece favourable Attributed to reforms i 2014 (particularly with respect to SME policy) Source: Start-Up Maifesto, Horizo2020 Policy Support Facility Page 15

16 Romaia i the start-up maifesto (III) Dashboard results Most actios completed i fields (0.) to (3.) I istitutioal/regulatory framework (0.) Educatio ad skills (exceptio: make teachers digitally cofidet ad competet ) (1.) Access to talet (however, o data for all coutries o aspect to make it easy for compaies to hire outside of their home) (2.) Access to capital (except aspect tax share optios as capital gais, ot icome, to attract talet to start-ups (3.) Weaker performace for field data policy, protectio & privacy (4.) Oly some actios for aspects revise ad ormalise data protectio laws ad make govermets thig digitally No actio for aspect remove the requiremet for data providers to store iformatio i ay give coutry Similar i the field thought leadership (5.) Oly some actio to appoit a Chief Digital Officer No actio with respect to creatig a best practices repository. Source: Start-Up Maifesto, Horizo2020 Policy Support Facility Page 16

17 Romaia Start-Ups A sapshot (I) Accordig to romaiastartups.com there may be as may as 325 idetified (registered) start-ups 10 icubators 49 evets 15 co-workig spaces 623 fouders Some results of the start-up moitor provided by Erst & Youg ad Impact Hub Survey of 301 start-ups (age <3 yrs.) For 69% of respodets most importat sources of fiace ow fuds, icludig salary paid by other orgaisatios ad private loas Major barriers: bureaucracy (uclear laws, lack of iformatio, blow-up laws); 15% would like to access Europea fuds, ad 13% Romaia state-fuds for start-ups withi the ext 12 moths Horizo2020 Policy Support Facility Page 17

18 Romaia Start-Ups A sapshot of successful exits (II) Source: romaiastartups.com Horizo2020 Policy Support Facility Page 18

19 Veture Capital Ivestmets i Romaia Ivestmets [ millio] Nr. of compaies [] Source: EVCA (2015): Cetral ad Easter Europea Statistics 2014 Horizo2020 Policy Support Facility Page 19

20 Bucharest as start-up hub EDCi (I) Bucharest raks 30/35 i Europe for start-ups beig... hadicapped by low scores for capital, culture, market ad other themes. Perhaps surprisigly, however, it raks top of the digital ifrastructure theme: most areas have good broadbad, as much of the coutry skipped copper ad wet straight to fibre. Horizo2020 Policy Support Facility Page 20

21 Bucharest as start-up hub EDCi (II) Key features accordig to the EDCi Startup Hub Europe s research reveals that Bucharest has over 170 startups. These compaies have secured 13.1m worth of fudig i the past decade. Icreasig umber of accelerators. Good broadbad (icludig fibre) is quite widespread. Low cost of livig. Agel, seed ad veture capital fudig are all relatively scarce. Bureaucracy that ecumbers the startup process. Bucharest is home to three Uiversities, producig a reasoable degree of tech talet. Source: EDCi, Horizo2020 Policy Support Facility Page 21

22 Selected fidigs of the exploratory study o the Romaia etrepreeurial ecosystem (I) Area Stregths Weakesses Huma capital Sciece, Techology, Egieerig ad Mathematics (STEM) graduates High school ad college graduates rates. Busiess commuity dissatisfactio with the quality of educatio. Low capacity to attract ad retai talet Low quality of maagemet ad etrepreeurial educatio Fiace A large variety of istitutios ad orgaizatios offerig access to fiacial capital: like baks, microcredit istitutios, VC fuds, busiess agels, private equity, crowdfudig, Europea fuds. Barriers to access fiace capital like high costs of debt fiacig ad collateral guaratees. Small amout of moey ivested by PE ad VC. Uequal distributio of fuds across coutry regios with the highest desity i Bucharest. Source: UEFISCDI (2015): Romaia Etrepreeurial Ecosystem, Horizo2020 Policy Support Facility Page 22

23 Selected fidigs of the exploratory study o the Romaia etrepreeurial ecosystem (II) Area Stregths Weakesses Support High speed coectivity 4G Mobile etworks. Low satisfactio towards utility services ad trasport services Low diversity i expertise outside the private sector, like NGO. Culture High social status associated with etrepreeurs. Large percetage of adults itedig to start a busiess (etrepreeurial itetios) Media attetio give to etrepreeurship. Tedecy towards employmet rather tha self- employmet (etrepreeurship) due to lack of opportuities to fiace a busiess. Low proclivity for risk. Small umber of opportuity-drive etrepreeurs. Source: UEFISCDI (2015): Romaia Etrepreeurial Ecosystem, Horizo2020 Policy Support Facility Page 23

24 Selected fidigs of the exploratory study o the Romaia etrepreeurial ecosystem (III) Area Stregths Weakesses Policy New istrumets to support SMEs, accordig to the priciples icluded i the Europea Small Busiess Act. Low level of trust i public istitutios. Markets Proportio of total sales that are exported directly or idirectly. Foreig ad domestic market size. Data missig for diaspora etworks ad early customers. Source: UEFISCDI (2015): Romaia Etrepreeurial Ecosystem, Horizo2020 Policy Support Facility Page 24

25 Key policy documets o start-ups ad spi-offs Page 25

26 Key policy documets iclude The Romaia Natioal Strategy for Research, Developmet ad Iovatio Busiess Agels Law SMEs Law Govermet Strategy for SMEs developmet ad improvig Romaia busiess eviromet Horizo 2020 Busiess Icubators Law Horizo2020 Policy Support Facility Page 26

27 Support mechaisms Page 27

28 Romaia Natioal RDI Strategy Visio focused o three pillars Busiess firms as promoters of iovatio RDI as opportuity for taleted people Sigificat progress i priority areas Smart specialisatio directios ad priorities Bio-ecoomy ICT, Security ad Space Eergy, Eviromet ad Climate Chage Eco-Techologies ad Advaced Materials Huge stakeholder cosultatio process to develop the programme (as i the precedig oe) Strog efforts to coect to iteratioal fudig (e.g., H2020) Source: Ispas, I. (2016): Romaia profile i P2Ps; Horizo2020 Policy Support Facility Page 28

29 ERDF Fuds Competitiveess Operatioal Programme (COP) likig up with H Aim to address the challeges stemmig from the low support for research, developmet ad iovatio (RDI) ad the uder-developed iformatio ad commuicatio techologies (ICT) services ad ifrastructure by ivestig i these areas. Two mai priorities A1. Research, developmet ad iovatio supportig ecoomic competitiveess ad the developmet of busiesses (total budget millio) A2. Iformatio ad commuicatio techologies for a competitive digital ecoomy (total budget millio) Developmet areas for ICT e-govermet, iteroperability, cyber-security, cloud computig ad social etworks, use of ICT i educatio, health, social iclusio ad culture e-commerce, clusters ad developig iovatio through ICT further deploymet of the broadbad ifrastructure for the whole coutry Source: COP, EC(2016): EU fuds workig together for jobs ad growth, p. 11 Horizo2020 Policy Support Facility Page 29

30 The REE (Romaia Etrepreeurial Ecosystem) page by UEFISCDI provides orietatio for fudig sources... Veture Capital 3TS Capital Parters TechAgels Romaia Earlybird Veture Capital Crowd fudig 7 Romaia crowdfudig platforms Other atioal fudig sources Programme to stimulate the creatio of micro-eterprises by ew etrepreeurs Natioal multiaual programme to develop etrepreeurship culture amog maager wome from SMEs UNCTAD/EMPRETEC Romaia to support SME creatio Natioal multiaual programme to create ad develop techological ad busiess idicators Natioal multiaual programme to support crafts Source: UEFISCDI (2015): Romaia Etrepreeurial Ecosystem, Horizo2020 Policy Support Facility Page 30

31 The first impressios... No lack of istitutios ad tools Numerous publicatios ad data (however, for start-ups maybe ot as complete as for geeral RTDI) Shows a strog (iterest i) debate o relevat issues Cosiderable efforts placed o plaig, e.g. of strategies However, is it also doe the right way? Ad are the right thigs doe? Ambitious ad developig start-up scee à Are there particular issues, the experts/stakeholders wat to be covered i the backgroud report? Horizo2020 Policy Support Facility Page 31

32 Aexes Page 32

33 Some results from the mid-term evaluatio of the Romaia RTDI strategy (I) Romaia has a fully-fledged research policy system Ay kid of improvemet does ot require implemetig ew systems ad processes The foresight process was too ambitious too much focused o opportuities ad the cotet of research ad related thematic priorities rather tha o challeges, shortcomigs, ad bottleecks i the Romaia RDI system Broad re-productio of FP7 priorities has created issues: strog belief i thematic priorities (ICT, eergy, eviromet, life scieces, etc.) rather tha i structural approaches aimig at the stregtheig of istitutios Natioal Pla icludes the widest rage of topics, i total 148. I doig so, there was de facto o priority settig, rather a reproductio of existig thematic profiles. Fallacy of adoptig best available policies by adoptig Europea programmes Source: Ohler, F. et al (2012): Mid-Term Evaluatio of the Natioal Strategy ad of the Natioal RD&I Pla Horizo2020 Policy Support Facility Page 33

34 Some results from the mid-term evaluatio of the Romaia RTDI strategy (II) By focusig o Europea programmes, FP7 has received the highest attetio as a role model for RDI By cotrast, RDI related programmes from the Structural Fuds were hardly cosidered a opportuity to exted atioal budgets ad rage of actio The Natioal Strategy , the Natioal Pla ad umerous related systems ad actios suffer from overstretch of expectatios. Issue of trust reliability of fudig Extesive data collectio ad reportig, but moderate policy itelligece. Developig agecy fuctios with determiatio, but oly half way Source: Ohler, F. et al (2012): Mid-Term Evaluatio of the Natioal Strategy ad of the Natioal RD&I Pla Horizo2020 Policy Support Facility Page 34

olie,whereas overall i the EU 32% of iteret users have doe so.

35 Digital Public Services: egovermet users 8% of Romaia iteret users have exchaged filled forms with the public admiistratio olie,whereas overall i the EU 32% of iteret users have doe so. Source: DESI 2016 Horizo2020 Policy Support Facility Page 35

36 This material has bee developed i the scope of the Horizo2020 Policy Support Facility. It reflects the views oly of the authors, ad the Europea Commissio caot be held resposible for ay use which may be made of the iformatio cotaied therei. Horizo2020 Policy Support Facility Page 36

entrepreneurship & innovation THE INNOVATION MATCHMAKER Venture Forum The Collaborative Innovation Service Benefit from start-up innovations

entrepreneurship & innovation THE INNOVATION MATCHMAKER Venture Forum The Collaborative Innovation Service Benefit from start-up innovations etrepreeurship & iovatio Veture Forum The Collaborative Iovatio Service Beefit from start-up iovatios Veture Forum The Collaborative Iovatio Service Coects your eterprise with the best ad most ambitious