SESSION 3 EU Enlargement Planning and programming IPA II how to make financial assistance more strategic and coherent?
SESSION 3 EU Enlargement Growth through Research and Innovation in the Western Balkans the moment for action
SESSION 3 EU Enlargement Paulo Correa Lead Economist World Bank
A Fact-Based Consensus Building Technical Assistance High Level Workshops with representatives from: governments*, research institutes, universities and private sector from all beneficiary countries; international experts Policy Review of key institutions, policies and programs Country Policy Profiles Technical Studies -- The State of Scientific Performance of the WBCs; Survey of the status of research Infrastructure and technology transfer activities; and Assessment of data availability on research and innovation. Inception Report -- Regional R&D Strategy for Innovation in the Western Balkan Countries: Key Issues and Implications for Technical Assistance, World Bank (2011). * Steering Committee Representatives of the governments, Regional Cooperation Council, DG ELAG and DG Research and Innovation and World Bank 4
Western Balkans need urgently to shift their growth patterns towards a more productivity based and trade-oriented model. To benefit from future accession, Western Balkans economies must be prepared to compete in the European market. Still a potential source of growth to be unleashed -- if appropriate reforms and investments are undertaken. 5
Empirical evidence of research and innovation contribution to growth and employment generation at international level is increasing available (Hall, 2011) Innovative firms grow faster: 15 percent faster (in sales) and 8 percent faster in labor productivity than noninnovative firms. Firm R&D expenditures significantly contribute to performance: raises sales (by 12 percent) and labor productivity growth (by 6 percent) on average in the Western Balkans (without Croatia). When firm R&D, training and infrastructure services sales are compared, R&D is shown to have the highest correlation to sales growth (excluding Croatia) Source: Seker, M. (2013) Background paper for the technical assistance on the Western Balkans R&D for Innovation Strategy 6
The legacy of unfinished reforms and the fragmentation of the R&I sector. Low level of R&D investments; deterioration of research infrastructure and brain drain. Inadequate incentive regime for research performance; commercialization and collaboration with the business sector. Poor governance structure: policy uncertainty and instability, excessive politicization and the lack of systematic monitoring and evaluation. 7
Two Levels of Action Four Strategic Goals Impact Advancing Sector Reforms Increasing Selective Investments Improve research base and conditions for research excellence Foster effective research commercialization and industry-science collaboration Increase business sector innovation and startup creation Better Governance GROWTH,COMPETITIVENESS AND GOOD JOBS 8
Intermediate Goals PROPOSED ACTIONS Measurement Build expertise and infrastructure for Intellectual Property Rights (IPR) management Promote higher levels of industry-science collaboration POLICY REFORMS Reform of IPRs legal Framework for publicly-funded research Employment and Higher Education Laws encourage commercialization and collaboration with industry INVESTMENT TECHNOLOGY TRANSFER OFFICES : provide assistance in the management and commercialization of research outcomes; training and expertise development for TTOs; link with TT intermediaries. FUNDING of Prototype Development and Proof-of-Concept; and Grants for industry-science collaboration increased share of research pool coverage by TTO services increased number of research results disclosed to TTOs increased number of patents and other IPRs Increased licensing activity Larger number of spinoff companies higher number and value of licensing agreements & spinoff companies increased volume of contract research 9
STABILITY of programs and policies (including predictability of funding); MERITOCRACY (as the rule of the game for the research community); GOVERNANCE and results- Orientation SCALE (avoiding duplication and reaching appropriate critical mass in key sectors) PEER TO PEER pressure Five Regional Programs 1. A research fund to increase regional and international collaboration with the scientific Diaspora and expand opportunities for young researchers. 2. The creation of regional networks of excellence in selected fields consistent with a strategy for smart specialization of the region. 3. A technology transfer facility. 4. An early stage innovation facility complementing the support to be provided by the Western Balkan Enterprise Development and Innovation Facility (EDIF). 5. A slim regional organization to supervise the implementation of these actions, promote policy reforms and systematic capacity building. 10
Current fiscal situation reduces the capacity to implement ( counter-cyclical ) innovation policies. Building on past experience: IPA funds were used in the R&I sector to support some initiatives in the past. Research and innovation is a priority for the EU, with Smart Specialization Strategies as an exante conditionality for access to Structural Funds. IPA-2 financing reforms and strategic investments. 11