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The start-up sector in Albania is relatively young, but it has great potential for innovation, especially in the ICT sector. Interview with Arjan Ymer, director of the Oficina business incubator

What is Office do? What kind of services does it offer? does it provide?

Oficina is a business incubator created in 2016 thanks to a small grant from an American investor. At that time, we wanted to create a hub where young people could go and generate good ideas that could potentially become start-ups. For about two and a half years, we focused on ideation and cultural creation. Then, in 2018, we became a fully operational business incubator. Today we work with start-ups that are in different phases of development: from ideation and pre-registration to the growth phase. We are also a digital innovation hub where companies or start-ups develop their first prototypes.

Our services focus on five areas. One of them is technological development. So we provide support or expertise in a specific sector – for example blockchain technology – for four or five months, depending on the program design. Other services involve go-to-market strategies and business modeling. In recent years, we have also added the intellectual property rights component. Finally, for companies in the growth phase, we focus on financing and fundraising.

For now, all our services are free. We have in-house expertise and capabilities, but we also work with external experts, whether individuals or companies, local or foreign.

What type of start-ups do you work with?

We are sector agnostic, so start-ups can come from any sector. The number of start-ups here is not very large, so we can’t be too picky otherwise we won’t have enough start-ups to run our business. However, we have one condition, which is that they have a strong technological component. For example, we work with start-ups in agritech, tourism tech, education tech, blockchain and fintech.

Is there a sector more innovative than others?

The focus is on fintech, and this is likely due to the deregulation of the sector that has occurred in recent years. There are promising start-ups in the fintech space, such as highly specialized e-commerce platforms. Blockchain is another booming sector; there are start-ups that use blockchain technology in real estate management or to provide services to state institutions, for example.

What are the strengths and weaknesses of the start-up ecosystem?

The start-up sector in Albania only started to develop from 2015-2016, so it is relatively young. In terms of legislation, there are standards that regulate the startup system and provide initial funding to develop prototypes.

When it comes to the general business environment, there are opportunities to be seized. Regarding the workforce, if we look at the ICT sector for example, a large number of people enter the job market every year, such as data scientists or experts in blockchain technology. I think we should have a long-term strategy for the development of the ICT ecosystem, perhaps focusing on specific sub-sectors, such as blockchain, cybertechnology or educational technology. I would suggest identifying one or two areas and developing our niche in these sectors, as a narrow focus would ensure more valuable returns in five or ten years, rather than a horizontal focus across the entire ICT sector. The energy sector is also very interesting, we have around 300 days of sunshine per year, so this would be an opportunity to develop green technologies etc.

The main problem is that we lack financial resources. If you want to finance your business, your only option is to go to a bank or financial institution. But none of them are a good solution because they only provide small amounts and charge very high interest rates. We therefore need more financing instruments. We should offer companies more incentives to invest in start-ups or incubators and also create a more attractive environment for international organizations, venture capitalists and business angels. There are different financing methods that these players could offer to start-ups, and of course, the more financing instruments we have, the more quality start-ups there will be in the future. Without this, most start-ups will leave the market, as they will not be able to grow on their own.

Speaking of brain drain, do you think this problem is affecting the start-up sector?

Our country is undoubtedly affected by the brain drain. Richer countries continue to attract young people and career-oriented people because they can offer better opportunities. Of course, people don’t just leave to get a higher salary, but they may want to explore new cultures and work environments.

Hopefully we will see the return of this great mass of people who left over the last ten years. However, I don’t think our country has a clear strategy to deal with the brain drain. In my opinion, it is necessary to create an environment where people have the right tools to start their business and run it from there. In other countries, the context is much more favorable, there are fiscal stimulus measures and taxes on start-ups are lower. Here we should focus more on designing a suitable framework for young entrepreneurs.

Are you familiar with the EU-sponsored smart specialization strategy? What do you think of that?

Yes, as a digital innovation hub, we participated in some roundtables and made our contribution to the smart specialization process. I think it is a good instrument for regional development, because it focuses on sectors that can be better developed in a specific region.

Energy, educational technology, tourism and agriculture are some of the sectors that have been identified in the S3 for our country, and these are also the sectors in which some of the start-ups we are accelerating operate.

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