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BRIEF

Western Balkan Regional R&D Strategy for Innovation

October 10, 2013

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Background
  • In 2011, the World Bank and the European Commission signed an agreement to support the development of a joint strategy on research and innovation in the region.
  • €1.5 million in technical assistance is being provided through a Multi-Beneficiary Instrument of Pre-Accession Assistance (IPA).
  • Beneficiary countries are Albania, Bosnia Herzegovina, Croatia, Kosovo, FYR Macedonia, Montenegro, and Serbia.

Growth Through Research & Innovation

The Moment for Action

With job creation stagnant and economic growth stalled, the Western Balkans region faces an intensifying need to create knowledge-based economies that can generate higher-value-added jobs and stronger growth.

Hoping to foster synergies among their similar interventions and build on a growing collaboration, governments from the seven economies in the Western Balkans are developing — with the assistance of the European Commission, the Regional Cooperation Council and the World Bank — a regional strategy for research and innovation.

In line with the countries' European integration processes and the goals of the European Union's growth strategy “Europe 2020,” the overarching objective is to increase the impact of research and innovation on economic growth and employment opportunities.

The Strategy will identify priorities, recommend policy and institutional reforms and be accompanied by an action plan detailing initiatives to be implemented at the supra-national level. This Strategy is being presented during a regional event in Zagreb, Croatia on October 24-25 2013 and will serve as a framework for a collective effort to promote the Western Balkans' most urgent priority: increasing innovation, growth and prosperity.

The Western Balkan region faces complex structural and macroeconomic challenges. On the structural front, a legacy of unfinished reforms still prevents most economies from reaping the benefits of investments in research and innovation — despite the progress they have achieved in recent years.

At the macroeconomic level, adverse circumstances required governments to adopt tighter fiscal policies and cautious financial markets reduced public and private resources available for research and innovation. The countries share a common set of problems, such as brain drain, low business expenditures on R&D and outdated research infrastructure.

Yet, to restore the competitiveness of their economies and accelerate growth, more and better investments in research and innovation are critically important for the Western Balkans.

During the development of the Strategy, policy notes and studies have been commissioned, country profiles for each beneficiary country were developed, study tours to two regional “networks of excellence” were organized, and four  onsensus-building exercises — in the format of interactive round tables — have taken place. Throughout the process, close collaboration with similar regional initiatives has been promoted.

On the basis of this work a Strategy outline has been developed. The second half of the project involved further discussions with stakeholders regarding the Strategy and Action Plan. The results of the consultation process were incorporated into the draft of the Strategy. The Strategy currently has the support of the leading universities, research institutes, private sector executives, and ministries of the science and education in the region.


Strategy

The strategy envisions a “two-pronged” approach with a focus on results. It combines the advocacy of policy reforms at national level and joint investments in selected regional initiatives. Continued policy reforms are needed to strengthen the impact of research and innovation on economic growth and job creation.

To reach this broader objective, reforms should emphasize measures directly contributing to the three main intermediate outcomes: fostering research excellence and productivity; promoting research commercialization and industry-science collaboration; and enabling research and innovation in the business sector. Governments will also need to improve the governance of their national innovation systems (e.g. management of public research organizations).

Regional cooperation at the policy level will create positive peer pressure and serve as credible commitment for implementing reforms at the national level. Reform progress, however, will follow the institutional dynamics of each country. The impact of policy advocacy and international commitments, therefore, are expected to occur in the medium to the long run.

In the meantime, joint investments will finance regional programs and institutions, pooling regional resources to create a critical mass for promoting smart specialization in the Western Balkans.

By avoiding the fragmentation and providing a predictable source of funding on a merit basis, the region will be able to start harvesting the economic dividends of investments in research and innovation within four years.

After a first assessment of existing regional initiatives, the joint investments currently under consideration are:

  • a research excellence fund program to promote collaboration with the scientific Diaspora and support young researchers increasing the attractiveness of the region
  • a program for the development of regional networks of excellence
  • a regional technology transfer program, that will support and provide technical assistance to technology transfer offices at the national level
  • an early-stage start-up program, complementing the support to be provided by the Western Balkan Enterprise Development and Innovation Facility (EDIF)
  • a not-for-profit organization to manage the four programs and continue the advocacy of reforms in the region — the Western Balkans Innovation Strategy Exercise — (WISE)

Conceived as a small and agile not-for-profit organization with an emphasis on results-orientation and rigorous evaluation, WISE will support systematic learning and policy improvement in the region. WISE will also provide a platform for the coordination, monitoring and evaluation of donors’ support to research and innovation in the region.

By coordinating different donors’ activities and helping prioritize key existing bottlenecks, WISE will contribute to improve the impact of public investments in research and innovation in the Western Balkans.


Approach

A smart specialization approach would take into account the region’s scientific potential (e.g. in the areas of biological sciences and chemistry) and its latent comparative advantages (as in the cases of renewable energy and marine biology).

Also, the application of general purpose technologies — for example ICT, nanotechnology and biotechnology — to specific fields of economic activity, such as agriculture, health and tourism industries is being studied.

Expected results

  • Larger number of scientific publications in high impact journals
  • Enhanced collaboration between scientific Diaspora and local researchers
  • Improved success rate of regional applicants in EU-funded programs
  • Increased number and value of patents licensed to the business sector
  • Stronger industry-science linkages
  • More research-based start-up companies
  • Higher growth
  • Better job opportunities