You would probably be skeptical if I told you that the Western Balkans – a region that has long suffered from social and ethnic fragmentation – now has a strong opportunity to boost shared prosperity by promoting research, innovation and entrepreneurship. Your view might not even change if I showed you that such an idea is validated by preliminary studies linking research and innovation to the performance of companies and countries in the region.
You might be surprised – but your initial assumption might remain unchanged – if I told you about the type of companies that are starting to build a different economic landscape in the region: companies like UXPassion, Pet Minuta, Strawberry Energy or Teleskin, all of which are technological startups created by young researchers turned entrepreneurs. Click on this link (http://www.worldbank.org/en/news/video/2013/10/22/western-balkans-research-and-development-for-innovation), or on the video embedded below, to meet them and other Western Balkan innovators.
Indeed, the transition to a market economy and the breakup of the former Yugoslavia from 1991 had serious consequences on the research and innovation sector in the Western Balkans. Research capacity has been significantly reduced and the links between R&D and the productive sector of the economy have disappeared. The new industrial structure naturally has a lower propensity to invest in research, while the current business environment promises low returns on business investments in innovation. Efforts to revamp the region’s research and innovation sector were mostly short-lived.
As a result, the performance of the research and innovation sector in the Western Balkans is bleak. The region’s current investments in R&D are roughly equivalent to those of the second largest university in the United States. (In 2012, for example, only 38 patents from the region were registered with the US Patent and Trade Office – compared to an average of 27 patents registered by each US university.) At the same time, very few of these investments are transformed efficiently. in wealth. For example, for each patented invention, the region spends on average three times more on R&D resources than the United States.
Building on a series of ongoing efforts to reform their national innovation systems, hoping to change their bleak outlook, Western Balkan countries committed in 2009 to developing a common regional research and development strategy. ‘innovation. This strategydeveloped between 2011 and 2013, has been formally approved last month by the ministers responsible for science and education of Albania, Bosnia and Herzegovina, Croatia, Kosovo, the Former Yugoslav Republic of Macedonia, Montenegro and Serbia. Preparing the strategy, which benefited from technical assistance from the World Bank and financial support from the European Commission, brought together representatives from the region’s leading universities, research institutes, private sector companies and government agencies. Discussions on the draft proposal continued in the seven countries as part of a broad awareness-raising exercise.
This is the first time that countries in the region have agreed on a common vision on how to address the challenges of the region’s research and innovation sector: in fact, they have now undertaken a reform of science and research and an investment program for the entire region. . The main objectives are to increase research excellence and productivity; strengthen links between science and industry; encourage investment in science from the private sector; and promote better governance of sectoral policies and programs.
The ultimate objective is to stimulate growth and the creation of employment opportunities thereby promoting shared prosperity. The vision is not only to spend more wisely, but also to devote more to science, research and innovation. Western Balkan countries have just committed to a theoretical regional target of 1.5% of GDP in total R&D spending by 2020.
This target may be too ambitious for countries with high budgetary priorities. However, they seemed convinced that it would be essential to invest more and better in research and innovation to modify a growth model driven by domestic consumption and face fierce competition from low-wage countries for global markets. This comprehensive approach to research and innovation will also bring the sector closer to the European Union, facilitating the accession process in which most countries are still involved.
The Western Balkan countries have also identified four programs that they will jointly implement:
- A research excellence fund (i) promote collaboration between scientists born in the Balkans who have emigrated abroad and those who remain in the region and (ii) support young researchers;
- a program to develop networks of excellence promote the rationalization of research infrastructures and encourage the concentration of resources in areas compatible with regional “smart specialization”;
- a program designed to help countries promote collaboration between science and industry and to foster technology transfer; And
- A startup program provide financing and mentoring services from the early stages of the innovation process.
Furthermore, efforts in the Western Balkans will create a platform to promote continuous policy dialogue, training and assistance in the design, monitoring and evaluation of different programs. Called the Western Balkans Innovation Strategy Exercise (WISE) installation, the center will be located in Split, on the Croatian coast. Through the WISE mechanism, countries hope to improve transparency, policy evaluation and learning.
By working together, the countries hope to benefit from the synergies that exist due to their shared history and heritage, remaining economic ties, and shared geographic factors. They also hope to create a sort of regional coalition to encourage the advancement of reforms at the national level – through “positive peer pressure”. Regional programs will also be less likely to be captured by politicians, providing a more stable source of funds allocated on the basis of merit.
Countries have committed to mobilizing €200 million over the next seven years to finance the implementation of these initiatives. Croatia will cover the administrative costs of WISE for the first 12 to 24 months. The Regional Cooperation Council, which also helped develop the strategy, agreed to cover part of the costs in the first months. Scandinavian governments present in the region have expressed interest in supporting this initiative. Continued support from the European Commission is also expected.
The WISE system will be launched in early 2014 and its first programs should be operational on a pilot basis by the fall.
Now is the time to act. Researchers, entrepreneurs and governments in the Western Balkans understand this and are working to forge a future of shared prosperity by deploying some of the region’s greatest assets: its capacity for research, innovation and entrepreneurship .