MOLDOVA COMPETITIVENESS PROJECT

MOLDOVA COMPETITIVENESS PROJECT ANNUAL WORK PLAN YEAR FOUR

October 1, 2018 – September 30, 2019 PROJECT YEAR FOUR WORK PLAN | 1

MOLDOVA COMPETITIVENESS PROJECT

YEAR FOUR WORK PLAN OCTOBER 1, 2018 – SEPTEMBER 30, 2019

Prime Contractor: Partners: Chemonics International, Inc. J. E. Austin Associates, Inc. http://www.chemonics.com/ http://jeaustin.com Bhavana World Project http://bhavanaworldproject.com

August 30, 2018

Contract No. AID-117-C-15-00001

COVER PAGE PICTURE: Photo credit: Alex Vacarciuc Photo caption: 3D Printing Demo at Chisinau FabLab opening event, May 4, 2018 (from left to right: Signe Burgstaller, Ambassador of Sweden, Brock Bierman, Assistant Administrator for USAID’s Bureau for Europe and Eurasia, Karen Hilliard, Head of USAID Mission in Moldova, Viorel Bostan, Rector of the Technical University of Moldova)

DISCLAIMER

The report was prepared by the Moldova Competitiveness Project. The contents are the responsibility of creator and do not necessarily reflect the views of the USAID, the United States Government or the Government of Sweden.

PROJECT YEAR FOUR WORK PLAN | 3

CONTENTS

ACRONYMS AND ABBREVIATIONS SECTION I: PROJECT OVERVIEW AND GENERAL APPROACH ………………………………………8 Project Background …………………………………………………………………………………………………9 Project Goals and Objectives ………………………………………………………………………………………9 Project Implementing Principles ……………………………………………………………………………………11 Project Organization ………………………………………………………………………………………………11

SECTION II: TECHNICAL SUMMARY……………………………………………………………………………13 Winegrowing industry ………………………………………………………………………………………………14 Tourism ……………………………………………………………………………………………………………18 Light industry ………………………………………………………………………………………………………21 Information Technology, Engineering and Creative Services …………………………………………………………25

SECTION III: IMPLEMENTATION APPROACH BY FOCUS INDUSTRY………………………………31 Winegrowing industry ………………………………………………………………………………………………32 Tourism ………………………………………………………………………………………………………………53 Light industry ………………………………………………………………………………………………………76 Information Technology, Engineering and Creative Services ………………………………………………………99

SECTION IV: PROJECT LEVEL OUTCOMES AND RESULTS …………………………………………128 Sector Engagement, Enhancement, and Development (SEED) Fund ………………………………………………129 Local Capacity Building Program ………………………………………………………………………………131 Anti-Corruption …………………………………………………………………………………………………134 Public-Private Partnerships (PPPs) ……………………………………………………………………………………134 Access to Finance through Development Credit Authority ………………………………………………………136 Environmental Protection …………………………………………………………………………………………138 Inclusive Development ……………………………………………………………………………………………139 Monitoring and Evaluation …………………………………………………………………………………………141 Project Communications …………………………………………………………………………………………145 ACRONYMS AND ABBREVIATIONS

AmCham American Chamber of Commerce ANTRIM National Association for Inbound Tourism ANTREC National Association for Rural, Ecological and Cultural Tourism of Moldova APIUS Employers Association of Light Industry ASW Association of Small Wineries ATIC Moldova Association of ICT Companies B2B Business to Business B&B Bed & Breakfast B2C Business to Company BSP Business Service Provider C&M Cut-and-Make CEED I & II Competitiveness Enhancement and Enterprise Development I & II CIS Commonwealth of Independent States COP Chief of Party DCA Development Credit Authority DCFTA Deep and Comprehensive Free Trade Agreement DCOP Deputy Chief of Party DO Development Objective DMO Destination Management Organization EIB European Investment Bank EU European Union FCL Future Classroom Lab GDP Gross Domestic Product ICT Information Communication Technology IR Intermediate Result ICT Information and Communications Technology ICTCE ICT Center of Excellence (Tekwill) JAA J.E. Austin Associates LOP Life of Project MCCI Moldovan Chamber of Commerce Industries MCP Moldova Competitiveness Project M&E Monitoring and Evaluation

6 | PROJECT YEAR FOUR WORK PLAN ACRONYMS AND ABBREVIATIONS

MICE Meetings, Incentives, Conferences, and Events Tourism MIEPO Moldova Investment and Export Promotion Organization MOE Ministry of Economy MOU Memorandum of Understanding NTA National Tourism Agency ONVV National Office of Vine and Wine PDO Protected Designation of Origin PGI Protected Geographical Indication PIRS Performance Indicator Reference Sheet PMP Performance Monitoring Plan PMU Project Management Unit PPP Public Private Partnership PQUP Product Quality Upgrading Program PR Public Relations RFP Request for Proposal SEED Sector, Engagement, Enhancement, and Development Fund SME Small and Medium Enterprise STEAM Science, Technology, Engineering, Arts and Mathematics STTA Short-Term Technical Assistance TCB Tourism Country Brand TIC Tourism Information Center TOT Training of Trainers ToL Tree of Life TMF Tourism Marketing&Promotion Framework TUM Technical University of Moldova USAID United States Agency for International Development USD United States Dollar USG United States Government VET Vocational Education Training WoM Wine of Moldova WTAP Wine Tourism Accelerator Program

PROJECT YEAR FOUR WORK PLAN | 7 SECTION I: PROJECT OVERVIEW AND GENERAL APPROACH

8 | PROJECT YEAR FOUR WORK PLAN PROJECT BACKGROUND The Moldova Competitiveness Project (MCP) Moldovan government and the business community launched on September 30, 2015 implemented by will need to make costly investments to adjust to Chemonics International Inc., and funded by the the new reality. Meanwhile, many Moldovan citizens United States Agency for International Development are still leaving the country to pursue higher-wage (USAID). One year into implementation, the Swedish jobs elsewhere, which underscores the need for Government committed to co-finance MCP and the public and private sectors to come together to a cooperation agreement between USAID and prioritize the development of a more highly skilled Sweden was signed on December 2, 2016. This workforce. agreement solidified the $5 million contribution from Sweden to augment USAID’s investment To maximize the benefits of these agreements, and outlined synergies between the cooperating MCP focuses on improving the quality of Moldovan countries to maximize development objectives of products and services as the key to preparing the program. The donor collaboration between Moldova’s private sector to compete on the EU and USAID and the Embassy of Sweden positioned MCP other higher-value markets. To achieve this objective, assistance to the Moldovan economy for continued the project is: success. ■■ Investing in workforce development initiatives MCP seeks to improve the competitiveness of developing skills that Moldovan businesses need. key industries in Moldova in the contest of the ■■ Promoting the adoption of new technologies, June 2014 signature of the Association Agreement manufacturing processes, and other innovations and the Deep and Comprehensive Free Trade to increase the quality of Moldovan products and Agreement (DCFTA) with the European Union. services. Moldova stands to benefit from duty-free access ■■ Building demand for Moldovan products both to one of the world’s most prosperous markets. domestically and internationally by promoting Moldova’s alignment with the EU through DCFTA market linkages and supporting Moldovan brands. has the potential to promote increased foreign ■■ Facilitating collaboration between the public direct investment and modernization, create a more and private sectors to increase investment and transparent domestic business climate, and spur improve the business environment. innovations through heightened competition and exposure to new technologies. In Y4, the project will continue to promote a strong, diverse, and export-oriented economy by improving While these developments will benefit Moldova’s competitiveness and efficiency in key Moldovan economic future in the long-term, entering these industries, thereby creating jobs, reducing emigration, trade agreements with the EU brings risk to alienating poverty and improving the economic Moldova. To compete in higher value markets, the well-being of all Moldovans.

PROJECT GOAL AND OBJECTIVES The project’s overall objective is to increase sales and investment in targeted industries. MCP will grow and expand targeted competitive industries through increased productivity and quality, expanded market linkages and improved sector-enabling environment. The industries supported by MCP have key economic and social significance, are export oriented, and collectively account for 13 percent of GDP and 40 percent of exports, including:

■■ wine production clustered with tourism; ■■ light industry (clustered apparel with footwear manufacturing); ■■ information and communications technology (ICT), clustered with the creative services and engineering sectors. MCP supports these industries to reach a maturity level that promotes sustainable improvements in the sectors’ competitiveness and provides well-paying and desirable jobs, thereby increasing incomes, alleviating poverty, and reducing emigration.

PROJECT YEAR FOUR WORK PLAN | 9 In order to grow targeted industries, MCP works to achieve the following objectives:

■■ Objective 1: Increased productivity and quality (better workforce and adopted innovation); ■■ Objective 2: Expanded market linkages; ■■ Objective 3: Improved sector-enabling environment and increased capacity.

Objective 1 Objective 2 Objective 3 llustrative results: llustrative results: llustrative results:

■■ Improved use of new ■■ Increased participation of ■■ Increased number of MCP technologies and industry Moldovan enterprises in assisted private sector best practices in targeted trade shows organizations and PPPs enterprises ■■ Increased promotion ■■ Increased number ■■ Percentage change of national brands in of regulations and increased in specified targeted markets administrative procedures productivity measure ■■ Assisted enterprises eliminated, streamlined, or ■■ Increased number of expanding sales to new simplified workers, especially youth, and/or existing markets ■■ Improved capacity of local with enhanced job skills associations

MCP developed a monitoring and evaluation (M&E) plan, based on the results framework (exhibit X below), to measure impact, continuously improve the effectiveness of interventions, allow the project to test hypotheses, receive early warnings to adapt interventions, ensure timely decision-making on resource allocation and activity implementation, and support USAID’s internal reporting needs. MCP’s performance indicators are aligned with USAID/Moldova’s priorities and vision, including units of measure, disaggregation, data sources, collection methods, baseline and targets, and data collection frequency and schedules. Exhibit. Project Results Framework

UA O

IR I E IR I P S C S I

SIR I SIR I A SIR I SIR E T E E P M L

P O E T C I

O I P O E M L O I SE A I E I L C

I I M I I I IMPACT

■ ■ ■ ■ ■ ■ OCA ■ ■ OUTCOMES

■ ■ ■ ■ PPP ■ SP ■ A

OUTPUTS SAID 10 | PROJECT YEAR FOUR WORK PLAN PROJECT IMPLEMENTING PRINCIPLES MCP supports industry clusters to drive effective cooperation requires strong commitment competitiveness and growth in targeted industries. by participants to resolve identified constraints. The cluster approach focuses on the linkages and interdependence between entities in the network ■■ Implement commercially viable solutions. The of production and innovation and the development project facilitates access to commercially viable of supporting institutions that are responsive to the solutions to market inefficiencies. In addition, the specialized needs of existing and emerging clusters and use of multi-stakeholder partnerships is an effective member entities. The aim is to develop “collaborative way to develop local commitment and sustainability advantage” (i.e., a successful market - buyers and of the development solutions. suppliers working with each other and using proximity ■■ Integrate local context and priorities. All and economies of scale to improve innovation and developing countries are faced with a wide range access to markets). The role of the Government of of issues that must be considered as part of any Moldova in this approach is one of indirect inducement. private sector project, including environmental MCP supports constructive dialogue and knowledge degradation, effects of population health, and exchange for government action in creating and disadvantaged populations such as women and rural sustaining a business-friendly investment environment. isolated communities. Proper consideration of these issues within the context of a viable private sector Guiding principles for engaging private entities that are development strategy is critical to enhancing the critical for MCP success include the following: longer-term impacts of the project. ■■ Balance competition and cooperation. As ■■ Due diligence. The Project ascertains the industries begin to grow, promoting a balance reputation and legal legitimacy of all entities between competition and cooperation throughout prior to any significant beneficiary support. The the value chain enhances the performance, implementing contractor/grantee is required to resiliency, and competitiveness of the industry. have clearly documented procedures and qualifying Stimulating competition requires working with criteria, and to be entirely transparent in selecting multiple firms and encouraging a level playing benefiting businesses and industries. field. There is also clear evidence that firms that learn how to effectively collaborate to address ■■ Exit strategy. To ensure sustainability, all project joint constraints are more likely to remain actio ns shall include an up-front exit strategy that competitive and foster a more competitive industry. clarifies how the investment will end, leaving behind Cooperation should be fostered, but not forced, as sustainable impact.

PROJECT ORGANIZATION Chemonics has an exceptional team of Moldovan To support the program, Chemonics has partnered nationals known for their skills in leading workforce with J.E. Austin Associates Inc. (JAA) and Bhavana World development and value-chain competitiveness Project. JAA provides technical assistance in wine and programs. With a team composed of primarily tourism product development, marketing strategy local experts to the management is cost effective development and defining economic and industry and consistent with the goal of creating sustainable competitiveness frameworks. Bhavana World Project solutions and engaging local leaders who can continue leverages its network of global buyers including Eileen their work after MCP ends. MCP is managed by Chief Fisher Inc. and Anthropologie, to assist fashion industry of Party Doina Nistor and Deputy Chief of Party Diana producers in the development of their brands and Lazar. MCP’s long-term professionals were selected linking them to target markets. based on their technical experience, knowledge of MCPs sectors of focus, and commitment to innovation, capacity building, and MCP’s overarching vision.

PROJECT YEAR FOUR WORK PLAN | 11

SECTION II: TECHNICAL SUMMARY

PROJECT YEAR FOUR WORK PLAN | 13 WINEGROWING INDUSTRY

Photo credit: Maxim Ciumas Photo caption: Feteasca Neagra indigenous variety of grape

Winegrowing – a leading sector of Consequently, there is an increased need for Moldova’s agri-food industry, contributes quality upgrading programs. The ASW Mentorship to rural development, foreign direct and Product Quality Upgrading Program (PQUP) programs, as well as the Wine of Moldova (WoM) investment, and improved image of the Academy and work under the PGI Associations’ Republic of Moldova internationally extension services are focused on stimulating a transformational impact that support the industries The Moldovan vine and wine industry is in the shift from quality over quantity, expanding the WoM midst of a historic turning point. Product standards, national portfolio to enter into new quality markets. workforce quality, the international awareness and targeted marketing campaigns, and the business MCP assistance to Moldova’s wine industry is enabling environment are critical components of complex, transformational, and builds on sustained continued growth of the industry and penetration in assistance over the past 10 years. The Moldovan competitive international markets. Moldova’s wine wine sector has opened new markets and begun to sector is in a period of stabilization as the share re-orient exports to the European Union and other of the wine industry to GDP is fluctuating around high value international markets. approximately 2 percent, whereas wine exports account for approximately 5 percent of all exports Generating sustainable product quality providing income to approximately 50,000 grape improvements through strategic producers. programs resulting in increased sales, The Moldovan wine industries competitiveness is improved workforce productivity, and dependent on the transition from selling wines to presence of Moldovan wines in high-value less demanding consumers in the east to meeting markets the standards of selling west to the European Union. The majority of Moldova’s 120 wine producers To drive growth of quality wine exports, specifically are using outdated equipment and technology wines meeting the Wine of Moldova and PGI quality for wine production, which limits their products standards, MCP has designed and is implementing a competitiveness in international markets. The two-pillar program to support quality improvements industry’s workforce, including new graduates are in two very prevalent tiers of the Moldovan wine not acquainted with modern wine technology, sector: small and micro winemaking, and mid methodologies, and standards, which further to large enterprises graduating to added-value limits production quality and competitiveness. products (called ‘transitional wineries’). The Small

14 | PROJECT YEAR FOUR WORK PLAN Winemakers Mentorship Program supports farmers MCP’s ‘Product Quality Upgrading Program’ (called pursuing value-add to their vine plantations. The ‘PQUP’) aims to achieve a transformational impact number of small wine producers in Moldova has on ‘transition wineries’ to switch to the ‘quality quadrupled since 2014, underpinned by wine reform over quantity’ paradigm. This enables beneficiaries that removed licensing and other major barriers to convert their business models from cheap, bulk to entry, coupled with MCP’s assistance. From Y1 wine to production of bottled wines with higher to Y3, MCP assisted 30 small wine producers to added value. MCP, through PQUP, will continue emerge and grow, each operating an average of 5 supporting the 20 transition wineries participating in hectares of vineyards. Among small wine producers the program, putting greater emphasis on marketing these are some of the top performers in the local and sales promotion. The 20 wineries represent market, including Gogu Winery, Kara Gani, and approximately 40 percent of industry’s wine ATU winery. In Y4, MCP will continue assistance to production; therefore, quality improvements will the participating farmers in the program, further have a transformational impact for the entire sector. securing the investments of the US and Sweden Governments, and will work to identify new Creating a workforce with market-driven start-ups and promote the small volume business skills through the Wine of Moldova model. The project’s support is complex and (WoM) Academy comprises mentoring the viticulture and winemaking operations, assistance for sustainable winery The Moldovan wine sector lacks the qualified management, marketing, and sales. workforce needed to increase its competitiveness and respond to demands of these new high-value, Keys to competitiveness: Wine industry international markets. Recent college graduates do not have the market-driven skills that correspond to industry needs and the knowledge of the existing ■■ Enhanced product quality through workforce is obsolete and needs to be upgraded technological upgrade and better workforce in line with modern production practices. To ■■ Sustained emergency of small wine encourage workforce and skill development, MCP producers and change of ‘transitional will continue supporting ONVV to deploy activities wineries’ business paradigms within the ‘Wine of Moldova Academy’, an initiative ■■ Adoption of modern business practices, for the industry facilitating continuous education technological and digital solutions to and focused knowledge sharing within National streamline processes and increase Office for Wine and Vine. Additionally, MCP will transparency develop custom training and skills development programs touching on specific needs of diverse ■■ Build Wine of Moldova brand equity and groups of specialists of the Moldovan winegrowing raise international awareness as a wine sector: viticulturists, oenologists, wine tourism, and producing country and tourism destination hospitality specialists. ■■ Develop quality wines portfolio on current target export with ‘exporting champions’ The Wine of Moldova (WoM) Academy aims to and nurture export markets penetration address the continuous education needs in the by ‘new generation’ wineries and small wine industry. WoM Academy bases curriculum on winemakers the lessons learned from MCP’s Skills Gap Analysis ■■ Develop domestic wine market and enhance and the industry’s development goals. The Wine wine culture of Moldova Academy is a private sector service under the ONVV, and as a supporting program ■■ Strengthen the role of the ONVV and enforce public-private ownership model for the wine industry’s educational institutions providing trainings that cover the most important ■■ Continue wine regulatory reform and lessen knowledge gaps, held initially by international the business environment for wine industry experts, workshops by local experts, internships abroad, study visits, field days, and other knowledge building and sharing practices. Moreover, it is

PROJECT YEAR FOUR WORK PLAN | 15 envisioned to invite world renowned trainers, of the WoM umbrella brand; country- and firm- speakers and influencers, that could spread the level integrated marketing; opening pathways for quality improvements and the reforms results individual brands and companies to enter and/or internationally as part of the international PR plan. develop export markets; and raise sales of value- added wines from Moldova on non-CIS markets. The After robust launch of the WoM Academy industry’s marketing goals are to grow exports by 10 framework in Y2, over 30 seminars and seminars percent in 2019, reaching $145 million. These export were organized during only 2 years, providing growth goals will be achieved by continuing to updated knowledge for over 800 professionals on expand trade in key markets, while growing the sales vine growing, winemaking processes, hospitality price per bottle (currently at 1.56 USD ex works). and marketing. MCP will stimulate ONVV to strive Like in the previous years, MCP will strategically for a more holistic approach, establishing strategic align with the ONVV annual marketing activity partnerships with local and foreign universities program and the Wine of Moldova Marketing and and research centers, ensuring academic curricula Promotion Framework. In 2019, ONVV is expected improvements. In addition, MCP will concentrate and to leverage a budget of at least $1 million to be coordinate activities under Wine School initiative invested primarily in trade promotion, alongside and NGO ensuring greater coverage of topics MCP funds. In Y4, MCP will continue to assist major adding trainings and seminars on wine service, trade shows, such as Prowein (Germany), where hospitality, gastronomy etc. over 35 Moldovan wineries participate in a large country booth, signing key trade contracts with Increasing reach to international European customers. In addition, trade events on markets and improving adaptability to target export markets (Poland, China, Romania), environmental shocks by introducing and as well as tradeshows on secondary high-potential, implementing best practices in quality distant markets such as Vinexpo in USA and in standards Japan. Two other new markets will be explored in 2019 – South Korea and Scandinavia. This support In Y4, MCP will continue to pursue innovations and will contribute to repositioning and growing of precision viticulture technologies to face global the country’s wine trade in stable and high-margin climate change and ensure high quality raw material European and other markets, helping it to recover for winemaking. In partnership with ONVV, MCP from the Russian embargoes that led to an extensive will continue implementation of ‘Best Grapes’ recession and a three-fold shrinking of exports. and ‘FlaveDor’ projects increasing their scale to In Y4, MCP will continue to support press trips with national coverage piloting innovations in vineyard influential international journalists, mainly during management and grape quality improvement in the National Wine Day in October 2019. MCP will Moldova. This will help Moldovan wine growers continue to incentivize the wineries to participate in comply with EU standards and enhance the quality international wine competitions, building upon over of wines, protecting Moldova’s value as a select wine 700 Moldovan wine awards obtained during 2017- region. Moreover, these pilots are implemented by 2018. Preference will be given to ‘transition wineries’ the PGI regional producer associations, that will and small wine producers, as well as to PGI wines. help build specialized extensions services for grape Finally, a new Wine of Moldova website, that was and wine producers. MCP will also invest in climate initiated in Y3, will be finalized in Y4 and replace the change studies, to ensure that the industry is well existing landing page (www.wineofmoldova.com), adapted to global environment changes. focusing on the legends, values, and more complex Driving exports to high-value, new wine industry information. markets through strategic marketing, Enhancing the wine tourism service repositioning Moldova as a rising star in industry and product offerings to catalyze the international wine industry both the wine and tourism sectors, In Y4, MCP will continue to support Moldovan independently and jointly, in Moldova wine guided by the classic AIDA (attract, interest, MCPs efforts to support continued market growth desire, action) model. The assistance will be multi- will focus on enhancing wine culture, a critical factor layered and systemic, adapted for building awareness

16 | PROJECT YEAR FOUR WORK PLAN for tourism development. MCP will increase the Driving wine sector reforms through number of sommeliers, by certifying an additional 10 strengthened and sustainable PPPs HoReCa professionals with the European Sommelier Diploma or other internationally recognized In Y4, MCP will continue to support continued wine- certification. MCP will also continue to support sector reforms, focusing on supporting ONVV in Wine School initiative aimed to consolidate the implementation of improvements in product’s quality sommelier and connoisseur communities. The ‘Wine conformity and traceability, particularly pertaining to Friendly’ program will be relaunched and reshaped product certification, government controls, and wine to include the originally planned education, trade and vine producer declarations. MCP will also resume promotion and excellency in service pillars. MCP will the development of a national industry strategy – continue its support to several prominent wine and Wine of Moldova 2030 – an initiative long overdue wine tourism events that are an important attraction that will promote the new development visions and for tourists and gather a local and international goals for Moldova’s revitalizing wine sector. The ONVV audience of 150,000 people: Wine Vernissage, will continue to be strengthened as the industry’s Degust&Devin, National Wine Day, and a specially public-private partnership institution and secured dedicated event will be organized for boutique-wine from political influence, to maintain the position of the producers, members of ASW. main trustworthy and professional organization.

FY19 PLAN HIGHLIGHTS

WINEGROWING INDUSTRY

Growing exports and resilient trade $145 million wine export goal in 2019, up by 10% vs 2018 25% export growth of bottled wines meeting the Wine of Moldova quality standard 45 wine producers participate in trade events on target export markets, Poland, China, Romania, South Korea, USA, Japan 300 awards at top international wine competitions, increasing Wine of Moldova notability

Stronger industry institution and governance National Office for Wine and Vine continues to be strong as PPP, and ensures at least$1 million funding for trade promotion from public and private funding

Better grape and winemaking quality 30 vintners shift production from ‘grape to bottle’ under Small Winemakers Mentorship Program, with growing sales of their ‘author’ wines domestically and internationally 16 transition wineries convert business models from cheap, bulk to quality bottled wines under MCP’s Product Quality Upgrading Program 400,000$ winery investments in stainless-steel tanks, filters and other essential technological upgrades 23 experimental plots across Moldova’s wine regions provide vineyard intelligence data via drone-surveillance for endemic diseases (‘FlaveDor’) and smart weather stations (‘Best Grapes’), helping industry to face climate change and ensure quality grapes

Consolidated industry vision Wine of Moldova 2030 strategy sets new development vision and goals for Moldova’s revitalizing wine sector

PROJECT YEAR FOUR WORK PLAN | 17 TOURISM INDUSTRY

Photo credit: Viorel Istrati Photo caption: Descopera 2018

Moldova stands as an untapped tourist With proper support, guidance, and organization, the destination in Europe tourism industry can serve as an engine of GDP and job growth, SME development, and attract foreign Generating $8,272 billion USD annually, the travel direct investment (FDI). A healthy tourism industry and tourism sector is one of the largest and fastest could also fuel regional development as Moldova’s growing economies in the world1. 2017 was one of tourism assets are applicable for rural tourism. the strongest years of GDP growth in a decade with robust consumer spending worldwide. This global Expanding and strengthening tourism growth transferred into travel & tourism with the product offerings in Moldova through the sector’s direct growth of 4.6 percent outpacing the ‘Start-Up Tourism Moldova’ program global economy for the seventh successive year. Tourism is a crucial market for emerging economies, To boost and diversify the extremely weak tourism as it represents the first or second source of offerings in Moldova, in 2016, MCP kicked off a export earnings for 20 of the 48 less developed complex program, called ‘Start-Up Tourism Moldova,’ countries. Moldova, with an undeniable potential with the goal of fostering quality growth, innovation, as a tourism destination, stands today as a “start- diversification, and expansion of tourism services, up” in international tourism. Moldova is one of the especially within the two main wine regions Codru least visited destinations in Europe, according to and Stefan Voda. The program consists of capacity UNWTO figures2, and ranks 117 out of 136 in the building, mentorship, grass-route grants, rural Travel & Tourism Competitiveness Index3 for 2017, entrepreneurship, strategic planning, and road down 6 points since 2016. mapping of the market. Through its sub-programs – Wine-UP, Hospitality+, Inbound Startup, Go Regional USAID has been investing in tourism development – the ‘Start-Up Tourism Moldova’ program benefits in Moldova since 2012 to foster sustainable tourism wineries, rural pensions, B&Bs, artisans, hotels, soft for economic prosperity. Moldova has a distinctive adventure and activity providers, tourism agencies, culture, rich heritage, and keen sense of hospitality, and destination management organizations (DMO). which is the basis for a thriving tourism industry.

1. WTTC Travel&Tourism economic impact 2018. World. 2. With the exception of San Marino and Lichtenstein. UNWTO Barometer, Statistical Annex. March/April 2018 3. World Economic Forum, 2017

18 | PROJECT YEAR FOUR WORK PLAN Developing tourism hubs to create a Keys to competitiveness: Tourism multifaceted and streamlined tourism experience for travelers ■■ Diversify tourism products, upgrade tourism services, and improve visitors experience MCP approach in developing Moldova’s tourism industry is focused on a pivotal intervention in key ■■ Enhance destination image among domestic and international travelers tourism destinations by enhancing their tourism capacities. Moldova’s ‘tourism hubs’ include Chisinau ■ Increase demand through multi-faceted ■ surroundings (Hâncesti, Ialoveni, Straseni, Anenii marketing Noi, Orhei and Calarasi districts), Orheiul Vechi ■■ Reform tourism regulatory framework and reservation, and Stefan Voda wine region (Causeni, consolidate private sector voice and Stefan Voda districts). MCP’s `Go-Regional` Tourism development program in conceived to drive growth and investments into developing consistent MCP’s Startup Tourism Moldova program portfolio networks of tourism services and facilities, cultural will benefit an expected 65 wineries, B&Bs, crafts events and tourism trails, as well as local destination centres, hotels, as well as tourism agencies/ management capacities. In Y4, MCP will continue to operators. In Y4, MCP will leverage the considerable primarily concentrate on Orheiul Vechi reservation growth of the “Wine Tourism Accelerator Program” and Purcari region. Prospection development to further upgrade and expand tourism offerings activities will also be instrumented into Gagauzia and for the 15 partner wineries, with 7 new wineries Prutul de Jos regions. expected to initiate tourism services. Following two years of effort, ONVV and MCP will launch the Taking recommendations and putting Moldova Wine Trail, with over 100 tourism signage them into action from Moldova’s White instituted in major wine and rural tourism sites, such as Stefan Voda and Orhei region. As part of Paper for Tourism ‘Hospitality+Moldova’, MCP will continue to identify In Y3, under MCP leadership, the tourism industry and support the improvement of rural pensions, public and private sector stakeholders joined around improve customers’ hotel experiences, develop a common vision outlined in the White Paper for tourism itinerary hubs, and diversify tourism offer Tourism Industry Regulatory Reform (presented in order to demonstrate high quality service in in June 2018). Both the Moldovan Minister of the line with Western tourist demands and Moldova’s Economy and Infrastructure, Mr. Chiril Gaburici, positioning as a “soft-adventure travel” destination. responsible for the tourism industry policies and In Y4, MCP will support the upgrade of 7-10 new (or regulations, as well as the private sector business pre-existing) rural B&Bs, while strengthening the 12 associations endorsed the critical proposals B&Bs already in the program (that are currently in within the White Paper aimed to generate a various stages of renovation). In Y4, MCP will assist pro-entrepreneurship business environment and a total of 12 tourism agencies (5 new emerging reduce the current significant barriers to entry ones) to promote inbound tourism, estimated for SMEs in the industry. Other recommendations to service 4,000 tourists per year, or about 20% within the White Paper included creating fiscal percent of total organized tourist numbers (counting incentives like reducing VAT for tourism services 17,500 in 2017). As part of the ‘Tree of Life’ national from 20 percent to 8 percent which is in line with tourism calendar, MCP plans to support 20 local European best practices and establishing a fixed festivals, sports, food and other tourism events, local tax for accommodation services. In Y4, MCP which are expected to generate attendance of will provide assistance for the legislative drafting hundreds of thousands of people (100,000 est), of these enabling reforms, as well as for developing primary local, but also foreigners. Lastly, MCP will a new strategic policy for the tourism industry prioritize preservation and sustainability in tourism development. diversification efforts. The ‘Orheiul Vechi’ tourism management and zoning plans, developed in Y3 with MCP assistance, are expected to be approved by the Government and implementation initiated.

PROJECT YEAR FOUR WORK PLAN | 19 Facilitating sustainability for tourism ANTRIM to expand their collaborations with services through ANTRIM various local professional organizations (including the National Association of Guides, HoReCA In Y4 MCP will continue to support ANTRIM to Association, DMOs, ANTRE.). The ultimate goal is become a leading inbound tourism organization for ANTRIM to become a ‘Tourism service hub’ within the local market, as well as a representative that will represent the tourism sector as a whole. of Moldovan tourism abroad. The objective is to As a result, it is anticipated that ANTRIM will continue growing membership base, on one hand become a trend-setter for the tourism industry and (currently counting 40 members), and be the leading maintain close collaborations with the key players organization in destination marketing and tourism of the industry, therefore creating a united front in legal reform, on the other hand. MCP will support strengthening the public private dialogue.

FY19 PLAN HIGHLIGHTS

TOURISM INDUSTRY

More foreign tourists 200,000 foreign tourists (up 20% vs 2018) 10 tour operators develop new B2B partnerships, through participation at key travel exhibitions in Italy, Germany, Poland and Romania 12,000 foreign tourists served by beneficiary tour operators (so-called organized travel) (up 30% vs 2018)

Greater international awareness for Moldova as tourism destination 50 international travel media influencers, such as National Geographic Travel, feature Moldova as an emerging travel destination ‘BeOurGuest’ digital campaign positions Moldova as an authentic travel destination in the heart of Europe

Diversified and authentic tourism experience ■■ 65 (including 29 new) wineries, rural B&Bs, inbound tour operators and hotels assisted to upgrade service quality and tourism facilities in line with Western standards ■■ at least 20% annual growth across the tourism value chain (from international arrivals and overnight stays, to visitors at wineries and rural B&Bs) ■■ National Wine Trail launched with over 100 tourist signs instituted in Orhei Vechi, Stefan Voda and other major tourism sites ■■ 20 local festivals, sports, food and other tourism events, under ‘Tree of Life’ calendar, attended by est 100,000 local and foreign visitors ■■ 15,000 tourists serviced by the Chisinau Tourism Information Center to support information gap

Recrafted sector-enabling environment ■■ Legal regulatory reform enactments underway by Moldovan Government/Parliament to improve the tourism doing business framework ■■ Updated strategies and policies guide Moldova tourism industry development

20 | PROJECT YEAR FOUR WORK PLAN LIGHT INDUSTRY

Photo credit: Andrei Sochirca for MCP Photo caption: Production process at OldCom shoes company, MCP beneficiary

The light industry is the leading as low as $270 USD per month. These are some exporting industry and the largest examples of Moldova’s advantages in servicing employer of women Western customers (compared to Asian locations) for short term competitiveness. Moldova’s long- The light industry (manufacture of textiles, wearing term competitiveness is in higher value-added apparel, leather products, and footwear) is among manufacturing, which will respond to the growing the most important, largest, and best-performing service needs and value chain accountability and sectors of the Moldovan economy. It is the core transparency requirements of Western customers, of Moldova’s manufacturing industry (12 percent) promote local design talent, and most importantly, and the main exporter accounting for roughly 16,6 ensure fair wages at living standards for factory percent of exports (2017) and exporting to more workers. Moldova must move from stitching services than 10 European and other international markets, to full product, and develop high value-added primarily Germany, Italy, UK, and France. It remains services as raw material sourcing, design and pattern a large employer in Moldova, and a women-centric making skills. Since own product and label are the sector. The sector accounts for about 28,700 highest value-added production schemes Moldovan jobs as of 2017, or 23.3 percent of total industrial companies should continue to develop their own employees. Over 90 percent are held by women. collection and sale them both on the local and This makes light industry an important employment regional markets. generator, especially for unqualified women and few Since 2005 USAID, and more recently the employment options in rural areas. Government of Sweden, have been assisting the The main competitive advantages of Moldova’s Moldovan fashion industry, fostering a shift from light industry are labor cost and proximity to cut-and-make production to original designs/brands, Europe with relatively quick turnaround for smaller enabling transition up the value chain and hence volume orders. Moldova’s light industry is mostly preserving jobs and raising wages. Through steady represented by small and medium-size enterprises donor support, the share of low-value, cut-and-make (between 30 and 200 employees), which have stitching services of total industry output decreased quick response times via fast delivery, ensuring from 95 percent in 2005, to an estimated 80 percent high manufacturing quality and flexibility for small in 2018, marking a shift for Moldova’s fashion orders. Most of the industry remains based on manufacturing industry towards high value-added low-value schemes, providing only cutting and production. More than 80 Moldovan fashion brands stitching services, hence it struggles with wages emerged. These new brands engage the full cycle of product design, branding, and manufacturing, thus

PROJECT YEAR FOUR WORK PLAN | 21 marking a new stage of development for this sector. the number of unique beneficiaries with 20 percent With MCP assistance, these fashion companies are to 1,200 industry professionals, providing knowledge becoming more competitive and their sales continue and collaborative support to 120+ unique private to increase. companies (or over 1/3 of light industry SMEs), elevating the quality of the educational system through 55+ trained university and college teachers, Keys to competitiveness: Light industy while ensuring constant upgrade of its programs. In Y4, professional trainings will range from ■■ Raise seamstress skills and breed excellence technology topics, such as equipment maintenance, in design and pattern design factory productivity and layout, pattern making, to fashion design fields, such as sustainable fashion, ■■ Grew labor productivity and raise quality to photography, merchandising, online sales. To educate meet international standards global talent in Moldova, the ZIPhouse Fashion ■■ Increase resources efficiency Leadership Program will run in its third iteration ■■ Introduce factory innovations, such as new with long term courses in fashion design, marketing product lines, information management and business being attended by over 40 Moldovan systems, inventory control methods business owners and professionals, at Italy’s top ■■ Upgrade to more value adding universities, Polimoda and Instituto Europeo de manufacturing concepts in exports to EU Design. The ZIPhouse’s Fashion Acceleration and other markets Program, that supported 24 emerging design talents ■■ Develop Moldova’s emergent fashion brands during its 2017 and 2018 editions, will be further to expand into regional and global markets enhanced with ‘international market ice-breaker’ program and local popup shops to assist sales. Finally, ■ Increase the share of own brands in the ■ ZIPhouse will continue to charge small fees for its domestic market services to support operational costs and contribute ■■ Build APIUS’ capacity to educating the market and its sustainability.

Providing operational consulting and pursuing additional financing Fostering continued expansion, reach for ZIPhouse with an aim towards into the industry, and availability of sustainability market-driven skills development opportunities through ZIPhouse MCP aims to continuously focus on enhancing ZIPhouse institutional capacity and content Launched in late 2015, ZIPhouse was created to development keeping the sustainability in address challenges in industry education, promote mind. During Y3, MCP supported institutional fashion startups, as well as academia-industry strengthening by working closely with the ZIPhouse collaboration. MCP considers ZIPhouse a flagship executive team and participating in ZIPhouse Board institution in workforce development and fashion meetings. MCP contributed the consolidation of startup acceleration, as ZIPhouse supports industry ZIPhouse team, overcoming main operational transition to higher value added by developing and organizational challenges. In Y4 MCP will critical skills and abilities of the labor in fashion continue to work closely with the institution to industry. The center was started with USAID strengthen its institutional capacity and to ensure support (CEED II) and is managed by the Technical ZIPhouse reaches its goals as a flagship institution University of Moldova with participation of APIUS, in workforce development and fashion startup the fashion industry’s association. As a grantee of acceleration. MCP will continue to take active role MCP for light industry skills and entrepreneurship in ZIPhouse long-term strategic development. One development, ZIPhouse brings now advanced of the main goals is to ensure that ZIPhouse is technical education opportunities and acts as an managed by a proactive board, formed of private accelerator for startups and community. In Y4, the and academic sector representatives, which will overall objective for ZIPhouse is to strengthen its guide the executive team for long-term strategic position as Moldova’s fashion community platform, development. MCP will continue to provide support enlarging its 4,000+ followers to 5500+, increasing to ZIPhouse executive team in attracting other

22 | PROJECT YEAR FOUR WORK PLAN donors and partners, and gain stakeholders support. conventions and national labor law. MCP plans to Based on Year 3 MCP efforts, ZIPhouse partnered have at the end of the project at least 15 ISO and/ with International Trade Centre (ITC) for workforce or OHSAS certified companies, which will serve as development in fashion industry and has been an example for other companies, on the one hand, awarded a grant from British Embassy (about 56,000 and on the other will raise credibility of Moldovan Pounds) for enriched opportunities for women and Light Industry for foreign partners. In addition, MCP youth from the fashion sector. These two grants will continue its “flying designers” program, where will be accessed during Year 4 and aligned to MCP’s international designers and pattern makers help resources to support joint activities. MCP will align local designs with global color and style trends, consult ZIPhouse team in terms of key interventions and fabrics. Local design expertise will be identified and most impactful activities to be undertaken and matched with manufacturers to create in-house regarding the fashion industry development. design talent. Existing beneficiaries will be monitored for progress, and new companies will be added Streamlining operations and improving into the program, especially companies that design, product quality through SMART produce and sale under their own label children interventions to drive higher salaries, wear. facilitate increased foreign investment, Increasing exports by strategic and increase sales tradeshow participation, led by APIUS The Streamline Manufacturing, Accountability, In Y3, Moldovan fashion brands, through participation Resource efficiency, and Transparency (SMART) at international exhibitions, signed export contracts factory program has demonstrated that higher worth a total of $ 2,568,000 USD. MCP will production line productivity leads to high value continue to support participation in tradeshows in manufacturing and a better skilled workforce that the EU (including France and Germany for contract enjoy higher salaries by 10-25 percent and quality manufacturing), as well as in Italy, Kazakhstan, of living. It also triggered important investments in Ukraine, and Romania to facilitated continued factories worth an estimated $710,000 USD during interest and sales of Moldovan fashion branded Y1-3 for upgrading of equipment, implementing products. Two new markets, piloted in 2017 and technology innovations, such as computer added 2018, the UK and US, will be further explored in Y4. design and automated cutting. MCP’s approach MCP will align resources for tradeshow participation for Y4 is to deepen assistance with selected SME with the Investment Agency and participating firms. champions (approximately 35 firms), committed MCP will also continue to build the capacity of the to improve factory efficiency and product quality, Employers Association of the Light Industry (APIUS) by engaging productivity and efficiency, design and to serve as a trade development facilitator for the pattern making experts. Assistance will be provided industry by organizing tradeshow participation, through the implementation of Lean Management linking foreign buyers to Moldovan manufacturers, tools, which will facilitate operational and cost researching potential buyers, and hosting buyer efficiencies by eliminating time loss, the use of missions. MCP’s trade support for the light industry excessive raw material inputs, and the occurrence will be channeled through APIUS via a multi-year of preventable defects, thereby reducing lead and grant, contributing to strategic and coordinated cycle times, reducing inventory levels at every stage marketing, sustainability and institutional capacity of production, improving workforce productivity, building. The overall goal for tradeshow participation optimizing use of equipment and space. The is for 35-40 firms to participate at 18 international apparel industry producers benefiting from the tradeshows twice a year, which is expected to SMART program represent over 10 percent of increase exports by at least 8 percent. the total Moldovan apparel production, therefore it is important to continue strengthening the On the local market, MCP supports raising the manufacturing. Since accountability and transparency industry’s profile and boosting consumer pride in today are the basic requirements advanced by wearing clothing made in Moldova by enhancing the foreign clients, the project will pay a special attention power of the umbrella brand Din Inima: Branduri de to the implementation of integrated Quality Moldova (From the Heart — Brands of Moldova). Management System, which will ensure workplace MCP supports joint marketing campaigns to raise conditions in accordance with human rights, ILO industry profile and awareness and stimulates joint

PROJECT YEAR FOUR WORK PLAN | 23 retail initiatives. These are conducted twice per professional organization of the flagship Moldova year, for the spring-summer and fall-winter season. Fashion Days (fall and spring editions; with the goal While shifting the structure of the industry towards of expanding the participating brands, inviting foreign value-added, MCP will continue to assist companies designers and organizing satellite events to the main from fashion industry to build stronger own brands catwalk show), and re-formating the local B2C and on local and export markets, and to increase the B2B Moldova Fashion Expo (with the view to bring number of manufacturers producing under own more regional buyers from Kazahstan, Romania, brand and joining the Din Inima initiative. There are Spain, UK; and increase attractiveness of this currently about 60 Moldovan brands under the Din tradeshow through a new image, reconfigured space Inima initiative. In Y4, MCP will continuously support to separate mainstream fashion from designer labels, the DInInima multi-brand shops (with a new shop and better designed booths). being planned in Chisinau), assist in successful and

FY19 PLAN HIGHLIGHTS

LIGHT INDUSTRY

Repositioning Moldova as a Full Product Manufacturing Partner for EU 35-40 firmsparticipate at 18 international tradeshows twice a year, growing exports by at least 8 percent $3 million export contracts on EU (e.g. France and Germany) for higher value manufacturing services and Italy, Kazakhstan, Ukraine and Romania for own-branded products

Superior domestic and international recognition of Moldovan fashion brands DININIMA: Branduri de Moldova (From the Heart — Brands of Moldova) umbrella brand raises industry profile and awareness, contributing to sales growth on Moldovan and regional markets 40 designers showcase collections at industry’s key fashion event, Moldova Fashion Days and 15 other satellite catwalks, popup shops and fairs 8 fashion brands start e-commerce, on domestic (fromtheheart.com) and international sales channels 3,000 m2 of modern retail space in DININIMA multibrand shops support domestic sales; and new sales points in Chisinau are launched

Enhanced high-value added competitive advantages 33 apparel and footwear manufacturers raise productivity, international quality and social compliance, design and sourcing skills, under SMART Factory, resulting in higher wages (up 15%) and factory productivity (up 10%) 15 apparel firms ISO9001 and OHSAS certified by 2020, leading to higher quality, social responsibility and improved working conditions ZIPhouse strengthens its role as flagship institution in workforce development and startup acceleration:

■■ 5,500 social media followers ■■ 1,200 (up 20%) industry professionals develop production, pattern making, technology, merchandising and other forward-looking skills ■■ 100 light industry SMEs receive advanced technical training and knowledge ■■ 10 startups break the ice in sales

Stronger industry association 115 members of APIUS light industry association, serving as the driving force for industry development and trade facilitation

24 | PROJECT YEAR FOUR WORK PLAN INFORMATION TECHNOLOGY, ENGINEERING AND CREATIVE SERVICES

Photo credit: ATIC Photo caption: Youth performing at the FIRST LEGO League robotics competition, February 2018

Leveraging synergies in Information Information Technology stands as one of Technology, Engineering, and Creative the fastest growing industries in Moldova Services are strengthening in Moldova Keys to competitiveness: IT, Engineering Information Technology, engineering, and creative services form a cluster that can bring significant and Creative Services cluster positive economic impacts for Moldova. The interventions to support the industries’ continued ■■ Increase the share of high value tech, development, increase exports and competitiveness engineering and creative services originating in foreign markets, need to be designed to achieve from Moldova. non-linear growth, using the same quantity of ■■ Create a sustainable talent pool to match human and capital resources. To reach maximum evolving market requirements. potential in each industry, MCP supports them ■ Create a favorable investment climate as a cluster, creating development synergies. ■ to attract investments in IT, R&D and Information Technology will foster innovative technology startups. and creative practices in manufacturing, design, science, engineering, education, digital services, ■■ Promote and position Moldova as an and will enable new types of creative production. investment destination for R&D, Innovation The combination of Information Technology, and Disruptive Technologies. engineering and creative services will contribute ■■ Develop modern and affordable to the development of areas such as computer infrastructure for businesses such as graphics, 3D animation, 3D printing, computer- innovation centers and IT Parks. aided design, computer music, computer games, ■■ Link to regional funders and “angel” digital photography, digital video, digital / new media, investors virtual environments, interaction design, product ■■ Promote STEAM fields to students, and industrial design. These synergies will lead to including girls, during primary and secondary economic, social, political, and cultural benefits for education. Moldova that could not be achieved as standalone industries. ■■ Engage private sector in education, including global vendors.

PROJECT YEAR FOUR WORK PLAN | 25 The development of the ICT sector is a national are now applied to produce a variety of products priority for Moldova that has achieved significant related to electronic equipment, pumps, and other growth in recent years. In 2017, the IT sector’s share manufacturing inputs. With $58 million USD in of GDP was 5.7 percent and the total revenues sales and approximately 6,000 employees, precision reached $224.2 million USD. The annual growth rate engineering manufacturing businesses have a high of the IT sector in 2017 was 10.3 percent. The growth ratio of sales per employee. Additionally, a series of of the ICT sector contributed to the growth of the large investors produce electronic and electrical services sector of the economy by 9.6 percent which components for the automotive industry, like Drexel resulted in a 4.5 percent economic growth nationally4. Mayer and Sumitomo. While not formally defined, The industry turnover doubled over the past 5 years or measured by international or national statistics, from MDL 1.29 billion to MDL 2.6 billion. the engineering industry is a critical subsector of the larger manufacturing industry, along with design and Information Technology is the fastest growing segment testing activities. of the ICT sector and is the fastest growing industry in Moldova, recording a 20-fold growth in exports The creative services industry has potential for over the past 12 years5. Information Technology growth as western and eastern markets currently exports averaged an annual growth rate between outsource these functions to Moldovan companies 2012-2017 of 15.9 percent and reached to a $116.6 therefore reducing barriers to entry and there is million USD in exports (an impressive 46% growth vs considerable opportunity for expansion. Moldovans 2016). The target markets for Moldovan IT products have diverse linguistic skills and a bi-cultural and services are Western Europe (45 percent), USA understanding of people and cultures in European and Canada (21 percent), Central and Eastern Europe markets, as well as those from countries of the (18 percent). former Soviet Union, making Moldova uniquely capable of adapting creative products for both The ICT industry employs more than 25,000 regions. The creative services industry is growing and Moldovans, mainly youth, of which the IT sector is one that could retain talented young Moldovans, specifically represents 13,500 of these jobs and pays therefore reducing migration. While no aggregated some of the highest salaries – an average of $950 statistics exist, using Delphi process MCP estimates USD in 2017 (or 28% annual growth vs 2016). Wages approximately 5,000 people are performing jobs increased further to $1095 USD in 2018, or by 15% related to this sector. Architecture and engineering vs 2017. Per MCP’s skills gap assessment in 2016, the services, as part of creative services industries, ICT industry has the ability to employ hundreds and generate est. $25 million USD in service exports even thousands more Moldovans, if there are enough alone. The creative services industry is comprised skilled people. Due to both outbound migration of approximately 80 established companies, out of and the existing gap between the skills acquired by which 10 percent were launched by foreign investors. students and private sector needs, the demand for Moldova can capitalize on a growing EU demand for qualified personnel continues to be the most critical creative services through projects such as “Creative need in the IT sector. Europe” and move towards more service oriented, high value jobs. Engineering and creative services are nasv, but are sectors with considerable Forging Impactful Public-Private potential for growth Partnerships to Strengthen STEAM Education: Future Classroom Labs (FCL) Moldova has significant history and human capacity in engineering and design. After Moldova gained its and Educational Robotics independence, the industry downsized and exports Industry strength and competitiveness is dependent to the former Soviet Union countries / Russia on human capital. Moldova faces a considerable significantly decreased, but many of the capabilities shortage of skills, with thousands of coders and of the industry remained, including relevant engineers in demand, both today and in the future. engineering curricula within the universities, TUM MCP works to raise the profile of Science, Technology, as a notable example. Engineering and design skills Engineering, Arts and Math (STEAM) subjects and

4. This information was calculated based on the National Bureau of Statistics data (http://www.statistica.md/newsview.php?l=ro&idc=168&id=5562). 5. Analysis of the data provided by the National Bureau of Statistics (http://www.statistica.md/pageview.php?l=ro&idc=407, Databank

26 | PROJECT YEAR FOUR WORK PLAN introduce digital innovations in education to prepare digital innovations in education. The shared estimated youth for careers most in demand in the 21st century. investment in FCL (MCP, Orange, Government and MCP engages industry leaders, such as Orange LED) is $850,000 USD during 2017-2019. During FY3, Telecom and LEGO Education, in game-changing 110 teachers from the 11 pilot schools successfully educational partnerships, bringing market-driven taught new generation educational content - 382 technologies to schools, such as coding, robotics and innovative lessons using digital technologies (such 3D printing. These partnerships bridge the digital as digital media, robotics kits, portable science divide between rural and urban youth and promote lab kits /sensors for experiments, kits for building tech careers to students. MCP promotes STEAM microelectronic circuits, 3D printers and scanners, education through its flagship initiatives: Future virtual reality headsets, panoramic cameras, etc), Classroom Lab (FCL) and Educational Robotics, which benefiting 2,119 pupils. are both effective and scalable interventions, and have jointly benefited over 11,500 Moldovan youth during In Y3, MCP successfully negotiated with the 2014-2018. These programs anticipate reaching 8,000 Government to build a national FCL Center at the additional youth in the 2018-2019 academic year. State Pedagogical University and allocate 3.6 million The Future Classroom Lab and Educational Robotics lei ($215,000 USD) for its infrastructure renovation. programs promote increased human capacity to In Y4, MCP will focus on developing the national FCL tackle complex, market-driven problems creatively Center – to be called National Center for Innovation and effectively, using technology and design principles. in Education (NCIE) - including its institutional framework, renovated space, tech endowment, and During Y1-3, educational robotics expanded from a staff capacity building; with a tentative launch in pilot in 6 schools in 2014 to 112 schools or 9 percent the first quarter of 2019. The National Center is a of all Moldovan schools in 2018. The number of youth critical institution for systemic transformation and enrolled in robotics courses has grown immensely, long-term digital innovation in formal education, as it reaching 9,500, or 3 percent of Moldovan students, aims to (re)train over 1,000 teachers per year. MCP with 61 percent of total program beneficiaries pursues to bring on board Lichtenstein Development participating in the 2017-2018 academic year. In Y4, Foundation (LED) in Y4 and formalize this donor MCP will consolidate and continue to scale-up the partnership by end 2018. In Fall 2018, MCP with educational robotics initiative, supporting the program Orange Moldova will launch the renovated ‘Future to become sustainable within the Moldovan formal Classroom labs’ in the 11 pilot schools, that will educational system. MCP will minimize its investment showcase new approaches to physical educational in the technical endowment of the program and will space and integration of information, communication, instead strive for natural expansion encouraging local and technology (ICT) tools. An FCL national communities and schools to invest in robotics kits. design guide will be published by MECR, with MCP MCP, together with ATIC, will lead Training of Trainers assistance, to support spread of this initiative. sessions and robotics competitions for systemic motivation. MCP aims to have at least 10 new schools Driving innovation and continued running robotics programs, endowed from own workforce development through resources, and a minimum of 500 youth enrolled in collaborative, and cutting-edge new schools, raising up total program beneficiaries to innovation centers 15,000. Additionally, MCP will support the Ministry of Education to revise the national Educational Robotics In Y4, MCP will continue to strengthen and expand curriculum, led by champion teachers, with the goal to the workforce development ecosystem responding to adapt the curriculum to meet educational needs and the demands of the global economy and the domestic modern pedagogical approaches, and to ensure that labor market. Infrastructure development of innovation st 21 century skills are appropriately incorporated. centers and collaboration spaces facilitate fast and intense skills training in specific areas, while also The Future Classroom Lab (FCL) was pilot providing access to technologies to further encourage launched in 2017 in 11 schools, in partnership with new product development. The enhanced ecosystem Orange telecom and the Ministry of Education, with proper infrastructure for innovation will serve Culture and Research (MECR). Inspired by EU and as a platform for cross-industry collaboration and global best practices, FCL builds on successes of the cluster development involving businesses, academia, robotics program and expands the program into government and local communities. a more holistic concept of hi-tech classrooms and

PROJECT YEAR FOUR WORK PLAN | 27 MCP will continue to develop the partnerships co-working and micro-offices for startup creative between government institutions, academia, the private firms and professionals. Major construction of the sector and global corporations. Industry Centers of Creative Hub launched in Y3. In Y4, key milestones for Excellence, currently in various stages of development the Hub include finalizing infrastructure development and housed within local universities, will remain central with a plan to open doors in December 2018, and to MCP efforts to spur innovation, build a better operationalizing staff and activities in 2019. This will workforce, and accelerate growth. The focus for Y4 be a considerable effort, as MCP will assist in building will be to strengthen the capacity in conducting skills, the institutional framework of the Hub including entrepreneurship, and community building initiatives identifying the Board, executive team, defining of the Centers of Excellence that were developed internal regulations, partnership arrangements with and launched in Y3 namely FabLab Chisinau, CIRCLE the COR/Academy for cost-sharing operational IT and Engineering Laboratory Cluster and three costs, and assisting to design programs for skills and regional FabLabs in Drochia, Cahul and Ungheni. entrepreneurship. Two collaborative and educational spaces such as the ArtCor (Creative Industries Center) and Balti FabLab Chisinau is a technical prototyping platform Innovation Center will be launched in Y4 and Y5. Initial for engineering invention, providing stimulus for infrastructure investments in all these centers (FabLab, local entrepreneurship in Moldova, a space for CIRCLE, Creative Hub and Balti Center) are estimated learning, experimentation and innovation.. During to be approximately $3 million USD, where MCP’s $1 Y3, MCP launched the first FabLab in Moldova, million of catalyst funding leveraged $2 million of in- following a 24-month reconstruction and endowment kind contributions and donations from partners. phase. During Y4, MCP will focus on developing the institutional and business model for FabLab During Y4, MCP will develop the physical infrastructure, Chisinau, by coaching ATIC and TUM to take over institutional, and administrative capacity of the its management. MCP will provide targeted technical Centers of Excellence and local stakeholders that assistance to FabLab while filling a facilitation and will manage the centers such as the Association of mentorship role. Funding for content development for Creative Companies COR and Association of Industrial FabLab will be provided as an extension of the Tekwill Manufacturers. MCP will leverage both private partners project, from the Swedish government. The goal for including companies from relevant target sectors, and FabLab support is to develop services leveraging public partners including the Investment Agency and available equipment/machines/tools, attract private ODIMM, to support the Centers of Excellence. The partners for educational and/or business projects, linkages between the Centers of Excellence with peer and integrate the FabLab facility/activities into TUM organizations, universities, and business associations curricula through project-based learning, specifically in from other countries will be a priority for MCP in Y4. microelectronics, industrial design, mechanics, robotics and IT. MCP will support FabLab Chisinau to connect Prioritizing institutional strengthening internationally, specifically with the regional Bucharest and sustainable business models for the Nod Makers Space and the Odessa FabLab, which has ArtCor Creative Industries Center and already been engaged in design during 2017-2018. FabLab

Artcor is the premiere collaborative space in Moldova for the creative services industry. Located on the campus of the Academy of Music, Theater and Plastic Arts, and managed by COR Business Association, ArtCor provides a propitious development ecosystem for students, academia and entrepreneurs from the creative services industries, focusing on graphics, sound, animation, arts, motion picture, VR/AR reality, video production, advertising and other related subsectors with high export potential. The Hub will provide space for networking, advanced education labs (equiped with graphics design, sound recording and Photo credit: Chisinau FabLab processing software resources, etc), studio, Photo caption: Woodworking training at Chisinau FabLab

28 | PROJECT YEAR FOUR WORK PLAN Attracting residents to the new Digital assistance, through a public-private partnership between Park, the industry’s latest tool to draw ATIC and Moldovan Government. Moldova’s first virtual foreign investment IT Park welcomed 212 residents in its first 6 months of operation. Members of the virtual Moldova IT Park Moldova’s IT industry needs a new generation receive pro-business benefits such as a 7 percent infrastructure and modern tech facilities to attract single tax on sales revenue, replacing all other business foreign investors and support industry growth. The taxes (up to 10 different taxes and fees). In July 2018, Digital Park is Moldova’s first technology park, and new categories of businesses, other than IT, became is aiming to serve as a hub for IT companies and eligible for benefitting from the law on IT parks, such as technology entrepreneurs and startup companies. animation, design and video production. MCP expects Located in downtown Chisinau, on 0.9 hectares of green the applicability of the law to increase the formality space, the Park is envisioned to offer a ‘Silicon Valley’ like of the creative services sector, where currently most environment and create an ecosystem and community startups operate on a private entrepreneur license, for technology companies, which will host over 2,500 or within the shadow economy. A positive spillover people/workplaces. In Y4, MCP will continue to support effect on the more than 5,000 youth employed in the the development of the Digital Park,implemented by creative services industry is also an expected outcome one of the largest internet providers in Moldova, Starnet. of the law on IT parks. In Y4, MCP will increase The Digital Park project began in 2016 and is a Euro 15 the institutional capacity of the Moldova IT Park’s million greenfield investment project on a timeline to administration, including but not limited to tax and HR fully commission the infrastructure by March 2022. improvements, so they are able to better serve their over 200 residents. For the new subsector of the IT MCP supported Starnet and USAID Mission in obtaining parks, the creative services industry, MCP will provide a DCA loan guarantee in Y3, which will cover 30 legal and tax assistance directly to the Association of percent risk of a $8.9 million USD loan necessary for Creative Companies and the private companies in the financing phase 2 of the Digital Park. In Y4, MCP will industry to adopt and apply the new legislation. In Y4, provide technical assistance and strategic guidance for MCP will facilitate obtaining the Government’s approval utilizing the DCA guarantee to obtain the phase 2 funds, for the updated Moldova IT Industry Competitiveness including assistance negotiating the loan. MCP will also Strategy (2019-2023) that articulates the ‘value-added provide support to Starnet to promote Digital Park and approach’ (i.e. competing on more complex tech attract domestic and foreign IT companies to become services and products, rather than on cost and scale) as residents. Starnet must fill the first tower with residents the next development phase for Moldova’s fast-growing at 80 percent before it can pursue the second tranche tech industry. of funding from the bank. Assisting foreign market entry for Additionally, in Y4, MCP will facilitate increased domestic tech & creative firms and communications and marketing regionally and in western attracting tech-based investors to markets around the Digital Park, including its connection to regional and global tech-based foreign investors. MCP Moldova will support the Government to establish the necessary Moldova is perfectly placed to be a global exporter mechanism to continue implementing the IT Park and of IT services to markets in the east and west, due to Startup Visa legislation process, developed and approved its exceptional workforce, convenient time-zone, and with MCP assistance in Y2-Y3, and conduct outreach to favorable investment conditions. In Y4, MCP will focus share information on the requirements for obtaining the on initiatives to promote the Moldovan IT industry as residency and working permits according to the new a value added and reliable source of IT and creative and streamlined procedures. services. The timing is right, as Moldova will build Supporting IT and creative services firms upon the tax-cost-talent-infrastructure ‘proposition’, including 7% single tax and Law on IT Parks for tax to graduate into the formal economy and cost advantage, ‘startup visa’ for brain gain and through fiscal incentives and registration the Digital Park state-of-the-art office infrastructure. in Moldova’s first Virtual IT Park MCP will continue to work at an industry and firm- level, assisting the Investment Agency, ATIC, COR, and The Law on IT Parks was instated on January 1, private companies directly to improve their marketing 2018 when the Moldova IT Park launched, with MCP approaches and foreign markets access. Target market

PROJECT YEAR FOUR WORK PLAN | 29 focus will be placed on Northern and Western Europe, Week (June 2019). In Y4, MCP will develop a revised as well as U.S. and nearby Romania, with shortlisted tech and updated country report on Moldovan IT services and creative events for participation in 2019, ranging industry, by global market intelligence firm International from Nordic Game in Sweden to Design Weeks in Data Corporation (IDC), that will be released in winter Bucharest and Milan. Several domestic tech and creative 2019. The report will contain the latest developments events will amplify local and international promotion, and initiatives for improving the IT ecosystem and including Game Factory Conference (Nov 2018), ADOR investor climate in Moldova, and will be a critical Advertising Festival (May 2019), Moldovan Design communication vehicle internationally.

FY19 PLAN HIGHLIGHTS

IT, ENGINEERING AND CREATIVE SERVICES

Positioning Moldova as a regional destination for high-value services 10 international (Western Europe, Scandinavia, U.S. and Romania) and domestic trade events assist foreign market entry for Moldovan tech & creative firms DC, world’s leading provider of technology intelligence, completes Moldova IT Country Profile in January 2019, highlighting the country as a high-value added provider of technology, creative and engineering services

STEAM education to support future youth employability 8,000 youth enhance coding and digital skills through MCP’s flagship initiatives: Educational Robotics and Future Classroom Labs National Center for Digital Innovation in Education (NCIE) launched at Pedagogical University as the critical institution for systemic transformation of education through technology ■■ 200,000 USD co-invested by Ministry of Education in Center’s infrastructure 1,000 youth benefit of Coder Dojo, the Hour of Code, GirlsGoIT and other alternative tech education programs

Catalyzing academia-industry collaboration through excellence centers eurship ARTCOR Creative Hub, Moldova’s premiere creative space, opens doors ■■ 100,000 USD co-invested by Ministry of Education in infrastructure Balti Innovation Center infrastructure construction underway, with 650,000 USD in public funding contracted 1,400 students, tech enthusiasts and craftsmen engaging in engineering trainings, product design and prototyping within the Chisinau FabLab 1,000 students exposed to market-driven curricula, e.g. cybersecurity, control engineering and microelectronics, within CIRCLE labs at Moldova Technical University

Developing the ICT Ecosystem infrastructure Digital City, Moldova’s first IT park developed by Starnet, completes first building and opens doors in Dec 2018 ■■ 3.5M Euro investment completed and 300 jobs hosted in the Digital City ■■ Starnet commissions $9 million loan, in conjunction with DCA guarantee, for next infrastructure phase

Strengthening a regulatory environment conducive to technology-driven businesses 50 new residents register in the Moldova virtual IT Park, at least 5 of which from the creative services industry, benefiting of the 7% single tax on sales Government approves MCP-supported Moldova IT Industry Competitiveness Strategy (2019-2023), articulating the ‘value-added approach’ (i.e. competing on complex tech services and products, rather than low cost and scale) and an exponential industry growth path as forward- looking development vision 30 | PROJECT YEAR FOUR WORK PLAN SECTION III: IMPLEMENTATION APPROACH BY FOCUS INDUSTRY

PROJECT YEAR FOUR WORK PLAN | 31 Photo credit: Maria Wiktoria Gorecka Maria Photo credit: Photo caption: Grapes varieties in the Etcetera winery vineyards

WINEGROWING INDUSTRY

32 | PROJECT YEAR FOUR WORK PLAN OBJECTIVE 1: INCREASED PRODUCTIVITY AND QUALITY (BETTER WORKFORCE AND ADOPTED INNOVATION)

Photo credit: Vladimir Ceban Photo caption: Mold-Nord production facility in Falesti

PROGRAM 1. UPGRADING QUALITY AND DRIVING INNOVATION IN VITICULTURE AND WINEMAKING

Expected Outputs:

■■ 8 new, small winemakers launching their ■■ 3 new transition wineries in PQUP program, first wines in the domestic market with a total of 16 beneficiaries ■■ 30 small wine producers receiving technical ■■ Expanded portfolio of assisted wineries with assistance at least 10 high quality wine product lines ■■ Increased production of bottled wines (up ■■ Up to $400,000 USD of new funds attracted to 40% bottled vs bulk production) for in direct investments in technological assisted companies upgrades

Expected Outcomes:

■■ Strengthened ASW and small wine ■■ Increased share of bottled wine by value and producers in Moldova volume in exports ■■ Increased number of international wine ■■ Increased sales on domestic and export competition awards to assisted wineries markets of assisted wineries ■■ Increased awareness of the Association ■■ Improved workforce and new technologies of Small Winemakers (ASW) and ‘author’ implemented by transition-wineries wines among consumers and potential new ■■ Improved quality of Moldovan wine products small wine producers and enhanced image of Moldova as a quality wine producer

PROJECT YEAR FOUR WORK PLAN | 33 In the years 2016 and 2017, with MCP assistance, the Moldovan wine industry experienced favorable conditions for growth including successful product quality enhancements, implementation of new sector reforms, increased marketing and promotion opportunities, and negative environmental conditions for leading wine markets, therefore creating an opening for Moldovan wine to meet demands in the international market. As a result, the Moldovan wine industry has experienced 31 percent compounded annual growth since 2015. Aligning with the Moldova wine industry’s critical goal of increasing quality through lower quantity, premiumization is a growing trend on the international wine market. To facilitate continued growth, capitalize on the markets demand for unique and high-quality products, and expand on recent market opportunities, product quality improvement and product diversification to meet market demands will be critical areas of focus for the Moldovan wine industry.

Moldova’s long-term growth is tied to the presence and awareness of two main quality standards: Protected Geographic Indication (PGI) wines and Wine of Moldova country brand standards. PGI holds specific prominence since its stamp represents a higher value-added product (with an increase of 10-15 percent in price, on average), facilitates access to EU market by meeting regional quality standards, offers additional quality guarantee, and links wine to its region of origin, contributing to wine tourism. In 2017, 13 percent of the still and sparkling wines in Moldova were PGI certified, and another 20 to 25 percent is deemed compliant to the parallel Wine of Moldova standard. MCP is committed to maintain this positive dynamic by continuing to implement, in partnership with ASW, ONVV, academia and other partner organizations, flagship programs in Y4 that have a critical impact on wine quality.

To drive growth of quality wine exports, specifically wines meeting the Wine of Moldova and PGI quality standards, MCP has designed and is implementing a two- pillar program to support quality improvements in two very prevalent tiers of the Moldovan wine sector: small and micro winemaking, and mid to large enterprises graduating to added-value products (called ‘transitional wineries’).

TheSmall Winemakers Mentorship Program supports farmers pursuing value-add to their vine plantations. The number of small wine producers in Moldova has quadrupled since 2014, underpinned by wine reform that removed licensing and other major barriers to entry, coupled with MCP’s assistance. From Y1 to Y3, MCP assisted 30 small wine producers to emerge and grow, each operating an average of 5 hectares of vineyards. Among small wine producers these are some of the top performers in the local market, including Gogu Winery, Kara Gani, and ATU winery. In Y4, MCP will continue assistance to the participating farmers in the program, further securing the investments of the US and Sweden Governments, and will work to identify new start-ups and promote the small volume business model. The project’s support is complex and comprises mentoring the viticulture and winemaking operations, assistance for sustainable winery management, marketing, and sales.

MCP’s ‘Product Quality Upgrading Program’ (called ‘PQUP’) aims to achieve a transformational impact on ‘transition wineries’ to switch to the ‘quality over quantity’ paradigm. This enables beneficiaries to convert their business models from cheap, bulk wine to production of bottled wines with higher added value. MCP, through PQUP, will continue supporting the 16 transition wineries participating in the program, putting greater emphasis on marketing and sales promotion. The 16 wineries represent approximately 21 percent of industry’s wine production; therefore, quality improvements will have a transformational impact for the larger sector.

34 | PROJECT YEAR FOUR WORK PLAN The Moldovan wine sector lacks the qualified workforce needed to increase its competitiveness and respond to demands of these new high-value, international markets. Recent college graduates do not have the market-driven skills that correspond to industry needs and the knowledge of the existing workforce is obsolete and needs to be upgraded in line with modern production practices. To encourage workforce and skill development, MCP will continue supporting ONVV to deploy activities within the ‘Wine of Moldova Academy’, an institution for the industry facilitating continuous education and focused knowledge sharing within National Office for Wine and Vine. Additionally, MCP will develop custom training and skills development programs touching on specific needs of diverse groups of specialists of the Moldovan winegrowing sector: viticulturists, oenologists, wine tourism, and hospitality specialists.

Photo credit: Olesea Curalova Photo caption: Production facility Mimi Winery

Activity 1. ASW (Association of Small Winemakers) Mentorship Program - support in emergence and development of small wine producers The ASW program as has 3 key objectives: support the institutional development of the Association of Small Winemakers; grow their internal capacities; and foster trust on behalf of their members, thus creating a sustainable ecosystem for development of family owned wineries.

PROJECT YEAR FOUR WORK PLAN | 35 ██ Sub-activity 1: Strengthen ASW AW C management for sustainaility

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██ Sub-activity 2: Expand and scale the ASW Mentorship Program The ASW Mentorship Program is a peer to peer assistance activity where emerging small wine producers are mentored by experienced winemakers and have access to shared equipment, a unique marketing and promotion platform focused on quality and the concept of so-called ‘author wines’1. In Y4, MCP will support increased membership of small wineries via the ASW Program and will motivate new wine producers to enter the program. The project’s support is complex and comprises mentoring the viticulture and winemaking operations, assistance for sustainable winery management, marketing, and sales. MCP offers support for ‘established small winemakers by offering equipment endowments for improving quality and productivity, thus strengthening the ecosystem. Small winemakers draw the interest of travelers and connoisseur interested in wine tourism, as they offer a more personalized approach by providing direct contact with the wine author. Thus, in Y4 MCP will focus on development of the tourism and hospitality capacities for both small winery start-ups, as well as for the ‘established’ winemakers. The support will include both in-kind grants for hospitality facilities and technical assistance to develop the appropriate wine tourism product (blended with local food, rural and cultural experiences), as well as its subsequent marketing and promotion.

MCP ASSISTANCE PACKAGE FOR SMALL WINEMAKERS WINEGROWING ■■ Winemaking expertise in-season (20-30 days by local ‘flying winemakers’ monitoring harvest, crushing and pressing, fermentation, clarification, aging and bottling) ■■ Small grants for equipment that are critical for quality and productivity (stainless-steel tanks with controlled temperature, filters, barrels) ■■ Marketing and sales support (branding, label design, local and international tradeshows and other sales platforms) ■■ Legal support and training related to product controls and conformity assessment

TOURISM ■■ Zoning, architecture, and design expertise for the planning the tourism infrastructure ■■ Coaching in tourism product development (e.g. wine tasting and food packages) ■■ Small grants for tourism infrastructure (tasting rooms, and lodging) Photo credit: MCP Photo credit: Aghenie household winery Tudor at storage room Photo caption: Barel

1. Author wines are considered high-quality wines, produced in small quantities, with tasting profiles varying from vintage to vintage, bearing the signature of their winemaker 36 | PROJECT YEAR FOUR WORK PLAN Before the MCP’s ASW mentorship program launch, Moldova registered only 7 established small wine producers. Since the launch of the ASW Mentorship program in FY2016, the number of ASW members has quadrupled, reaching 30 members by the end of FY2018. Subsequently the program is leading to a transformational impact across the industry, as more ‘artisanal producers’ are becoming aware of the advantages of institutionalizing their craft to produce wine as a viable business venture, inspired by the successes and achievement of MCP beneficiaries and participants of the st1 , 2 nd and 3rd intake of the program. In the long term, both the development of ASW and success stories generated among start-up wineries from ASWs programs will lead to a higher number of small vintners. According to MCP estimations, approximately 445 thousand households in Moldova produce wine, and only 5 percent are producing wine for commercial purposes, leaving an immense growth opportunity for the small winey market.

To generate interest among vineyard owners, farmers, and others, MCP will develop a tailored business model for a small winemaking operation that will guide the start-ups to define their market niche, vineyard size, equipment endowments, and investment requirements. Special focus will be placed on businesses with the potential to foster wine tourism.

Activity 2. ‘PQUP’ Program (Product Quality Upgrading Program): expanding the Wine of Moldova portfolio The goal of the PQUP activity is to support ‘transition wineries’ to graduate to the ‘quality over quantity’ paradigm. This will enable beneficiaries to convert their business models from bulk wine to production of bottled wines with higher added value, thus expanding the quantity of industry wines that are compatible with Wine of Moldova and Protected Geographic Indication quality standards. This activity is implemented in cooperation with the ONVV, who will remain ownership of the activity when MCP ends.

PQUP Program flow

Viticulture E consultations

+ 1. Better product quality A Winemaking consultations

2. Technological Increased workforce audit + knowledge and capacities Equipment investment (own+SEED fund) 3. Enhanced + competitiveness

Marketing support TAILORED ASSISTANCE PACKAGE

During Y1-3, MCP assisted 12 transition wineries, which focused mainly on sales of bulk wines, to adopt the paradigm, demonstrating the benefits of production of bottled wine under their own brands, and the resulting increase in sales margins. The wine producers currently benefiting from the PQUP program represent over 21 percent of the total Moldovan wine production, therefore it is important to continue strengthening the quality of their products. For the Y4, MCP has already enrolled 4 additional wineries that will take part in the 3rd intake of the PQUP program and participate in the refined curriculum designed based on key learning of the previous two intakes.

PROJECT YEAR FOUR WORK PLAN | 37 Under PQUP, MCP offers a variety of assistance, including winemaking consultancies, strategic marketing planning, branding, and support for tourism service development. A 20/80 [USAID/firm] cost-sharing is required for grant funding, used mainly to encourage wineries to invest in their products quality. The project is matching match technical assistance and SEED grants with the wineries own investments and expects to leverage approximately $400,000 in private investment in winemaking equipment and technologies.

While implementing PQUP, MCP undertakes tailored analyses of the performances of each beneficiary, including their strengths and weaknesses, allocation of resources in projects, and equipment and production segments that could bring immediate impact on product quality and/or return on investment. Additionally, MCP ensures that a sustainable exit strategy is in place and ensures the PQUP beneficiaries continue using the new practices properly. Therefore, during the Y4, the transition wineries of the first and second intakes will be monitored by MCP consultants, and the wineries will execute all activities related to viticulture, wine production, or marketing and promotion.

PROGRAM 2. BUILDING KNOWLEDGE FOR FUTURE GROWTH

Expected Outputs:

■■ 12-14 knowledge-building activities ■■ 2 study trips in advanced winemaking implemented within the Wine of Moldova countries organized Academy

Expected Outcomes:

■■ New and modern viticulture and ■■ Instituting an industry-level educational and winemaking technologies, including workforce development component within sustainability practices, spread in the the National Office for Wine and Vine industry

The Moldovan wine sector experiences a shortage of qualified workforce needed to increase its competitiveness and respond to new demands of highly competitive markets, both in the EU and globally. Additionally, Wine of Moldova is in the process of defining its unique product points and is adopting new production philosophies within the sectorial strategy, which also demand new skills and knowledge from the wine sector specialists. Unfortunately, new graduates do not have the skills that correspond to industry needs and the knowledge of the existing workforce is obsolete and needs to be upgraded in line with modern production practices.

The Wine of Moldova (WoM) Academy aims to address the continuous education needs in the wine industry. WoM Academdy bases cirriculum on the lessons learned from MCP’s Skills Gap Analysis and the industry’s development goals. The Wine of Moldova Academy is a private sector service under the ONVV, and as a supporting program for the wine industry’s educational institutions providing trainings that cover the most important knowledge gaps, held initially by international experts, workshops by local experts, internships abroad, study

38 | PROJECT YEAR FOUR WORK PLAN visits, field days, and other knowledge building and sharing practices. Moreover, it is envisioned to invite world renowned trainers, speakers and influencers, that could spread the quality improvements and the reforms results internationally as part of the international PR plan.

After robust launch of the WoM Academy framework in Y2, over 30 seminars and seminars were organized during only 2 years, providing updated knowledge for over 800 professionals on vine growing, winemaking processes, hospitality and marketing. MCP will stimulate ONVV to strive for a more holistic approach, establishing strategic partnerships with local and foreign universities and research centers, ensuring academic curricula improvements. In addition, MCP will concentrate and coordinate activities under Wine School initiative and NGO ensuring greater coverage of topics adding trainings and seminars on wine service, hospitality, gastronomy etc.

The main components of the WoM Academy will include:

1. Trainings and continuous education programs to respond to the most critical needs and will include as short-term trainings (1-3 days) as well as longer programs that may be certified in collaboration with an international university or training center. 2. Internship program for young specialists designed to upgrade the skills of winemakers through short- term internships in modern foreign wineries. 3. Training for the professional school/college teachers –WoM Academy will have a training of trainers (TOT) component to upgrade the knowledge of teachers of professional schools and colleges. 4. Study trips and experience exchange program – under WoM academy MCP will facilitate organization of study trips for different groups of stakeholders depending on their interest and needs in upgraded knowledge such as: small winemakers, wineries with tourism facilities, large wineries. 5. Implementation of sustainable wine industry concept – WoM Academy shall become the main supporter, developer and implementer of the upcoming sustainable concept for the Moldovan wine industry. This will include developing technical specifications, regulations, code of conduct, as well as needed trainings and instructions.

Photo credit: Max Ciumas Photo caption: Sommelier Andreeas Larson , conducting assemblage of local grape varieties, December 2017

PROJECT YEAR FOUR WORK PLAN | 39 Photo credit: Anatol Tomsa, MCP Photo caption: USAID Assistant Administrator for Europe and Eurasia, Brock Bierman in the process of hand bottling the “Timeless Friendship Blend” at the Mihai Sava small winery, May 5, 2018

PROGRAM 3. INNOVATIONS AND PRECISION VITICULTURE TECHNOLOGIES TO FACE CLIMATE CHANGE AND ENSURE HIGH QUALITY GRAPES

Expected Outputs:

■■ “Best Grapes”, “FlaviDor” and ‘Teroir’ ■■ 35 hectares of vineyards drone-surveilled projects continued and expanded in 2018 vegetation period for diseases and ■■ 23 monitored experimental vineyard plots other viticulture data for humidity, wine and 34 other parameters ■■ Knowledge shared with wine sector through ■■ 7 weather stations (including 4 units to be 12 e-newsletters by ONVV and other tools installed in FY19) (workshops, seminars, and printed materials)

Expected Outcomes:

■■ Better prepared wine sector to fight ■■ Understanding the impact of climate change consequences of endemic diseases and coping for long-term ■■ Institute knowledge-based winegrowing

40 | PROJECT YEAR FOUR WORK PLAN Previously, Moldovan vine growers had detected the vine disease by traditional means: walking fields and conducting visual inspections plant by plant, taking samples form the suspect bushes, sending samples to laboratories to conduct complex tests. On the other hand, the industry lacked scientific knowledge on behavior of strains on different soils, altitude, plot exposition, pruning, bush load etc. to ensure best quality of harvest. With MCP support, ONVV has implemented during 2016-2018 two revolutionary projects that increased the readiness and understanding of endemic diseases control, optimized spaying and other vineyard care operations and created knowledge and best practices for higher grape quality.

In Y4, MCP will continue to pursue innovations and precision viticulture technologies to face global climate change and ensure high quality raw material for winemaking. In partnership with ONVV, MCP will continue implementation of ‘Best Grapes’ and ‘FlaveDor’ projects increasing their scale to national coverage piloting innovations in vineyard management and grape quality improvement in Moldova. This will help Moldovan wine growers comply with EU standards and enhance the quality of wines, protecting Moldova’s value as a select wine region. Moreover, these pilots are implemented by the PGI regional producer associations, that will help build specialized extensions services for grape and wine producers. MCP will also invest in climate change studies, to ensure that the industry is well adapted to global environment changes.

Activity 1. “Best Grapes” and “FlaveDor” - piloting innovations in vineyard management and grape quality improvement ██ Sub activity 1: FlaveDor – using drones to diagnose vine diseases The approach uses an Unmanned Aerial Vehicles (drones) equipped with multi-spectral cameras and sophisticated cloud-based imagery processing and analysis software that delivers accurate information at the plant level on the higher level the project verticals to PCR and DNA testing to investigate the forensics of the disease origin and area of contamination. This technology replaces existing manual methods of disease detection, which are labor intensive and inaccurate. The use of this technology reduces labor costs for wine growers, improves diagnostic accuracy to 85%, reduces the over-use of pesticides by enabling rapid spot-treatment and quarantine, and provides data to inform a national disease detection and management protocol. Rapid detection and appropriate treatment of this global disease will prevent harvest losses of 40-80 percent, and safeguard Moldova’s wine industry, which provides income for 200,000 people.

Goals for Y4 include: 30 to 40 hectares to be surveilled with greater precision and on a larger number of diseases in 2019 vegetation period; and spread the resulting knowledge to grape growers and wineries through regular workshops, newsletters, etc.

Photo credit: Agora Photo caption: Skysquirrel drone with multispectral camera surveilling the Salcuta vineyard to determine affection level with Flavescence Doree endemic disease

PROJECT YEAR FOUR WORK PLAN | 41 ██ Sub-activity 2: “Best Grapes” – intelligent grape growing

Under MCP supported “Best Grapes” project, ONVV seeks to create best practices in vine growing by implementing and observing different plantation schemes, rootstock, bush load as well as various vine caring practices on 4 experimental plots, this adds to implementation of cutting-edge technology: autonomous methodological stations and other pests sensors that allow farmers to predict meteorological and disease infection risk allowing farmers to optimize spaying and other vine caring operations in the circumstances of climate change.

Goals for Y4 include: expand the number of weather stations (by 4 more units in other areas of Moldova, with a total of 7), and spread the resulting knowledge through ONVV electronic newsletters and field days.

Best Grapes and FlaveDor – flagship initiatives for innovations and precision viticulture

BEST GRAPES FLAVEDOR

23 11.7 ha 13 grape 35 Based on Software monitored monitored in varieties hectares conclusions, and experimental North, Center planted 240 surveilled in 2017 PCR tests harware parcels and Southern variations vegetation period conducted that where finetuned Moldova (pruning style, determined the to ajust to load per plant, technology specifics of etc.) accuracy Moldova

7 meteo 34 monitored 3 30 to 40 stations parameters newsletters hectares to be (including 4 units (humidity, wind, with precision surveilled with to be installed in soil, etc.) viticulture data greater precision FY19) issued in FY18 and on larger number of diseases in 2019 vegetation period 12 newsletters to be issued in FY19

Photo credit: MCP Photo caption: Vineyard landscape of the Nicolae Tronciu small winery

42 | PROJECT YEAR FOUR WORK PLAN OBJECTIVE 2: EXPANDED MARKET LINKAGES

Photo credit: Ming Cho Photo caption: Wine of Moldova country “handcrafted” stand at one of the most renowned international specialized exhibition Prowein 2018, made possible with MCP support

PROGRAM 1. WINE OF MOLDOVA INTERNATIONAL PROMOTION PROGRAM SUPPORT

Expected Outputs:

■■ 2 wine press trips and 5 media events ■■ At least 300 medals and awards won at organized for foreign press international wine competitions ■■ Up to 50 press clippings in the international ■■ Updated WoM brand book, and wine press and general media www.wineofmoldova.com WoM portal ■■ One new global communication campaign ■■ Two trade promotion campaigns developed and deployed implemented on WoM target markets under ■■ Up to three ‘satellite’ communication and PR WoM umbrella campaigns related to WoM on target markets ■■ New national wine brand website launched ■■ Participation to at least 6 B2B and trade ■■ $1 million leveraged ONVV budget for trade events, including international exhibitions promotion

Expected Outcomes:

■■ Increased international brand awareness ■■ Increased number of exporting wineries on and enhanced WoM brand equity target markets ■■ Diversification of WoM portfolio on target ■■ Improved quality perception of Moldovan export markets Wines ■■ Increased sales and new wines introduced ■■ Strengthened role of the ONVV as the on the target markets leading sector organization

PROJECT YEAR FOUR WORK PLAN | 43 The national wine brand “Wine of Moldova. A legend alive” was launched in 2013 and, since its introduction, awareness of the brand has grown internationally, building a solid reputation for Moldovan wines. MCP has supported the brand through an international launch, ongoing communication campaigns, facilitating the participation of Wine of Moldova at various B2B events and trade shows, and deploying the “Crafted for you to enjoy” campaign on several target markets and during Prowein 2017 and 2018. The national wine brand needs continuous support in developing brand equity on the international wine market and to raise awareness of Moldova as a wine-producing country.

Wine of Moldova marketing goals for 2019

$145 million export goal 2019, KEY 2019 up by 10% WINE MARKETS Attract ATTRACT GROW AwarenessAwareness campaigns campaigns deployed internationally deployed and on target markets ■ Poland internationally and on target markets China Interest ■ INTEREST ■ Romania CommunicationCommunication campaigns arroud campaignstrade fairs andaround B2B events trade fairs and B2B events Desire EXPLORE DESIRE ■ USA Communicate reasons-to-believe (medals,indigenous varieties, legends, USP) to final consumer Communicate reasons-to-believe (medals, Japan indigenous varieties, legends, USP) to final ■ Action consumer ■ South Korea Scandinavia ACTION ■

In Y4, MCP will continue to support Moldovan wine guided by the classic AIDA (attract, interest, desire, action) model. The assistance will be multi-layered and systemic, adapted for building awareness of the WoM umbrella brand; country- and firm-level integrated marketing; opening pathways for individual brands and companies to enter and/or develop export markets; and raise sales of value-added wines from Moldova on non-CIS markets. The industry’s marketing goals are to grow exports by 10% in 2019, reaching $145 million. These export growth goals will be achieved by continuing to expand trade in key markets, while growing the sales price per bottle (currently at 1.56 USD ex works). Like in the previous years, MCP will strategically align with the ONVV annual marketing activity program and the Wine of Moldova Marketing and Promotion Framework. In FY19, ONVV is expected to leverage a budget of at least $1 million to be invested primarily in trade promotion, alongside MCP funds. In Y4, MCP will continue to assist major trade shows, such as Prowein (Germany), where over 35 Moldovan wineries participate in a large country booth, signing key trade contracts with European customers. In addition, trade events on target export markets (Poland, China, Romania), as well as tradeshows on secondary high-potential, distant markets such as Vinexpo in USA and in Japan. Two other new markets will be explored in 2019 – South Korea and Scandinavia. This support will contribute to repositioning and growing of the country’s wine trade in stable and high- margin European and other markets, helping it to recover from the Russian embargoes that led to an extensive recession and a three-fold shrinking of exports.

44 | PROJECT YEAR FOUR WORK PLAN In Y4, MCP will continue to support press trips with influential international journalists, mainly during the National Wine Day in October 2019. MCP will continue to incentivize the wineries to participate in international wine competitions, building upon over 700 Moldovan wine awards obtained during 2017-2018. Preference will be given to ‘transition wineries’ and small wine producers, as well as to PGI wines. Finally, a new Wine of Moldova website, that was initiated in Y3, will be finalized in Y4 and replace the existing landing page (www.wineofmoldova.com), focusing on the legends, values, and more complex wine industry information.

Activity 1. Build Wine of Moldova brand equity and foster business linkages ██ Sub-activity 1: International tradeshows and events in key markets In Y4, MCP will deploy communication campaigns around major trade shows, such as Prowein (Germany) and trade events in target export markets (Poland, China, Romania). However, the support in participation at trade events will be focused mainly to diversify export markets, where ONVV cannot allocate resources such as Vinexpo in USA, Japan and other trade shows in South Korea and Scandinavia. This support will contribute to repositioning and growth of the country’s wine trade in stable and high-margin European, US and Asia Pacific markets, helping Moldova to recover from the Russian embargoes that led to an extensive recession and a three-fold shrinking of exports.

██ Sub-activity 2: Wine of Moldova international communication campaign In Y4, MCP will dedicate resources and technical assistance to develop and launch an international communication campaign aimed to bring awareness to Moldova as a wine producing country and touristic destination through collaborations with internationally renowned media outlets such as CNN and Euronews. Additionally, MCP will strategically invest in promotion of WoM in markets that contribute to global image building such as: UK, USA, Japan. MCP will cost share and organize press trips with influential journalists from target markets and facilitate international media coverage to further build on the WoM country brand equity.

██ Sub-activity 3: International wine competitions for notability

To bring awareness to the improved quality of TOP International Wine Competitions Moldova wines, MCP will continue to incentivize to be supported in 2019 wineries to participate in international wine competitions, through cost-sharing sample ■■ Decanter World Wine Awards registration and transportation costs (encouraging at least 3 wine samples to be submitted to a selected ■■ International Wine Challenge competition), in partnership with the ONVV. ■■ International Wine and Spirit Competition Preference will be given to ‘transition wineries’ and ■■ The Berlin Wine Trophy small wine producers, as well as to PGI wines. This ■■ The International Wine Contest support program brought excellent results in 2017 Bucharest and 2018 with over 700 medals, including for startup ■ London Wine Competition wineries. In Y4, MCP aims to have at least 300 medals ■ and awards won at international wine competitions.

██ Sub-activity 4: Updated Wine of Moldova website In Y2-3, MCP contributed to relaunching and upgrading of the existing Wine of Moldova landing page. In year 4 MCP will offer technical support for conceptualization ad development of detailed terms-of -reference and other technical documentation enabling ONVV to develop a new Wine of Moldova website will replace the existing landing page (www.wineofmoldova.com), focusing on the legends, values, and more complex wine industry information. This sub-activity was initiated in Y3, however, was delayed and moved to Y4 given other priorities.

PROJECT YEAR FOUR WORK PLAN | 45 Activity 2. Export Support Program (ESP): increased wine sales on target markets through firm-level marketing support

Expected Outputs:

■■ At least +25 percent growth of export ■■ Up to 4 ‘New generation’ and ‘Export of wines compatible with WoM and PGI Champions’ wineries assisted to deploy quality standards at assisted companies on communication campaigns and trade target export markets promotion on target export markets ■■ Up to 3 small winemakers starting exports

Expected Outcomes:

■■ Increased international brand awareness ■■ Increased number of small winemakers of and enhanced WoM brand equity exporting wineries on target markets ■■ Diversification of WoM portfolio on target ■■ Improved quality perception of Moldovan export markets Wines ■■ Increased sales and new wines introduced ■■ Strengthened ASW and ONVV as the leading on the target markets sector organization

Complementing the Wine of Moldova marketing and promotion framework and in-line with national brand communication strategy, MCP since 2015 has implemented firm-level Export Support Program, with tangible results for winery sales. Over 18 wine producers benefited of this Program, targeting Romania, Poland, Germany and Austria. Participating wineries recorded impressive growth for their sales (averaging 135% y-o-y). This tailored support package is adapted to wineries size, export-readiness, and role in contribution to national brand equity on export markets as well as anticipated effects on other beneficiaries and groups of beneficiaries. The marketing opportunities and support available is tailored to suit the diverse needs of the sector, from large exporters to small wineries, and requires at least 50/50 cost-share, based on realistic and executable marketing plans of beneficiary wineries. Project marketing assistance under ESP Program benefits the WoM national brand image with spillover effects to other Moldovan winemakers.

As such, MCP structured beneficiary wineries into three groups (See Chart below): 1st tier - small wineries, ASW Members; 2nd tier – “New Generation Wineries” with moderate or sporadic exports having deemed quality products; 3rd tier – “Export Champions”, wineries with consistent export operations which commonly generate a significant share of gross bottled wine export. The Y4 plans are to assist at least 7 wineries, of which 3 small winemakers, with focus on Romania, China and Scandinavian markets, with the end goal to achieve a 35 percent growth in export sales on the given market.

Photo credit: Fabiene Laine 46Photo | caption: PROJECT Wine YEAR barrel FOUR at WORK Mimi winery PLAN Wine of Moldova Marketing Framework and MCP assistance

Association of Small inemakers group support Boutiue ineries

ew eneration roup support Individual marketing support ineries

ailored approac Aligned assistance on-top port Campions

eneric, country level support ine of oldova

PROGRAM 2. ENHANCE WINE CULTURE AND GROW A MATURE LOCAL MARKET

Expected Outputs:

■■ At least 10 Moldovan sommeliers to ■■ Relaunched and reshaped Wine Friendly be certified internationally recognized program with up to 20 wine tasting events certification for connoisseurs and wine professionals ■■ Wine serving trainings for 10-15 local ■■ Two editions of “Wine Vernissage” organized restaurants and about 100 persons trained with MCP support in sommelier services ■■ One Degust&Devin oenogastronomical ■■ One event dedicated to the ‘author wines’ festival organized producers of Moldova

Expected Outcomes:

■■ Enhanced wine culture on the local market ■■ Increased bottled wine sales on domestic ■■ Upgraded wine service in hotels and market restaurants ■■ Increased awareness of Wine of Moldova country brand locally

A stable and developed domestic wine market is of major importance for any wine producing country. Besides the domestic market being the most important market for small winemakers, it serves as a platform for launching and testing of new wine products and wine vintages by local wine producers, acting as relatively low-risk earnings cushion. A developed domestic market also serves as a launch pad for new market players and represents an important contributing element to the development of tourism since according to researches “one third of the traveler’s dollars goes to food” and food related experiences2.

2. http://www.globallocalgourmet.com/project/culinary-tourism-economic-development/ PROJECT YEAR FOUR WORK PLAN | 47 On the other hand, as the recent article in the Guardian suggest a growing “food (restaurant) culture is a sign of a society healing itself”3. For this reason, MCP is committed to develop excellency in wine service in on-trade outlets (HoReCa segment) and enhance knowledge in gastronomy, as being one of the key tourism products of Moldova.

During the recent five years, theMoldovan bottled wine market has experienced exponential growth in sales of high quality bottled wine, with approximately a 10 percent annual growth rate in volume, and still accounts for an estimated 20 percent of total wine sales. Therefore, efforts to enhance wine culture and connect emerging winemakers to consumers is key for a stronger domestic market. As such, MCP will continue to assist the wine industry in developing wine culture, the sommelier profession, and wine service quality on the local market.

MCP Approach to Develop Domestic Wine Culture, Gastronomy and Tourism

Domestic market activities planned for 2019 Sommelier

Wine Wine ■■ Wine Vernissage (Winter 2018 and Spring Vernissage Friendly Enhance 2019) culture and ■■ Degust&Devin food and wine festival sales growth ■■ National Wine Day (Fall 2019) National Rediscover Wine Day Wine Road ■■ Wine Friendly campaign in HoReCa with Wine 20 tasting events Tourism & Events ■■ European Sommelier Professional Training

MCPs efforts to support continued market growth will focus on enhancing wine culture, a critical factor for tourism development. MCP will increase the number of sommeliers, by certifying an additional 10 HoReCa professionals with the European Sommelier Diploma or other internationally recognized certification. MCP will also continue to support Wine School initiative aimed to consolidate the sommelier and connoisseur communities. The ‘Wine Friendly’ program will be relaunched and reshaped to include the originally planned education, trade promotion and excellency in service pillars. MCP will continue its support to several prominent wine and wine tourism events that are an important attraction for tourists and gather a local and international audience of 150,000 people: Wine Vernissage, Degust&Devin, National Wine Day, and a specially dedicated event will be organized for boutique-wine producers, members of ASW.

Additionally, ONVV will be supported to organize professional events such as seminars, conferences and forums inviting best international experts and generating a constant outflow of information on Wine of Moldova within the professional networks.

To increase awareness on Wine of Moldova, wine culture and boost sales on local market, MCP, in partnership with ONVV, plans to conceptualize and deploy a trade campaign in major local retail chains focusing on high quality wines compatible with WoM and PGI quality standards. The promotional program will include sales support and communication, POSM materials, off trade events and activations. The campaign will be backed and supported by PR campaigns and communication in social media.

3. https://www.theguardian.com/lifeandstyle/2018/may/10/postwar-countries-food-culture-society-healing-jay-rayner-happy-eater?CMP=share_btn_link

48 | PROJECT YEAR FOUR WORK PLAN OBJECTIVE 3: IMPROVED SECTOR-ENABLING ENVIRONMENT AND INCREASED CAPACITY

Photo credit: ONVV Photo caption: Representatives of ONVV and SkySquirrel at the launching of the MCP supported project - Flave Dor, a technology driven solution to detect vine diseases

PROGRAM 1. POLICY UPGRADES AND LEGAL REGULATORY REFORMS IN THE WINE INDUSTRY

Expected Outputs:

■■ Wine Industry Strategy developed and ■■ Secured functioning of ONVV and approved at the governmental level safeguarding continued implementation of ■■ Wine traceability system efficiently reforms managed by the ONVV

Expected Outcomes:

■■ Clear long-term vision throughout ■■ Sustainable public-private dialogue and the Moldova’s wine sector on future secured public-private partnership within the development ONVV ■■ Consequent action plans, foreign aid ■■ Enhanced awareness about PGI wines and support and governmental programs aligned the origin-based products locally to strategy goals ■■ Better trained workforce with skills ■■ Improved business environment in the wine responding to current private sector industry demands

PROJECT YEAR FOUR WORK PLAN | 49 With MCPs support, Moldova was able to rethink its wine industry, ease regulatory challenges, and establish a new public-private industry management model through ONVV. Since the adoption of new wine legislation in 2012, MCP helped to continue the momentum and deepen the regulatory reforms through implementation of regulations to enact the law. MCP supported ONVV in disseminating legal reforms among industry players and in building the often-uneasy public-private dialogue for sustained reform implementation.

In Y3, the Moldovan winegrowing sector witnessed an unprecedented setback, threatening to abolish ONVV and with it, put a question mark on future industry development, demonstrating the fragility of the institution in front of policy makers. ONVV managed to resist and overcome, however there is a need of further backing and strengthening the public-private industry governance model. MCP will be continuously involved in developing institutional capacities and intervenes to ensure efficient functioning of ONVV and its institutional health.

Over the last five years, the wine industry has extensively implemented the USAID-supported 2010 white paper “Rethink Wine Industry,” and a sector-wide opinion has been formed regarding the future of the industry. To secure and streamline the industry’s sustainable development, the wine sector needs to create a comprehensive wine industry development strategy for the next 20 years, and in Y3, MCP initiated the procedure and deployed wine consultations on sectorial strategy, as well as a study trip to Nappa Valley (California) to learn the wine sustainability trends and principles. In year 4 MCP will continue development of the industry strategy, with the aim to have the first draft validated by the industry and ONVV.

In Y4, MCP will continue to support continued wine-sector reforms, focusing on supporting ONVV in implementation of improvements in product’s quality conformity and traceability, particularly pertaining to product certification, government controls, and wine and vine producer declarations. MCP will also resume the development of a national industry strategy – Wine of Moldova 2030 – an initiative long overdue that will promote the new development visions and goals for Moldova’s revitalizing wine sector. The ONVV will continue to be strengthened as the industry’s public-private partnership institution and secured from political influence, to maintain the position of the main trustworthy and professional organization.

Activity 1. Support ONVV to continue policy, legal and regulatory reforms Over last years, the business enabling environment for the wine sector showcased major improvements. Unparalleled reforms have been implemented, and ONVV and National Wine and Vine Fund valued at $3 million USD have been established to represent the wine industry, operating as a public-private partnership.

██ Sub-activity 1: Safeguard the ONVV as an institution and PPP Since its launch, MCP has provided support to ONVV in executing its statutory attributions, including: promoting the national wine brand, implementing regulatory reforms, implementation of the PGI/PDO system, and the development of the Vine and Wine Register, meant to ensure a credible wine traceability. However, the existence and the continuation of the deployed reforms were put under question with a threat to dissolve ONVV institution via a legal amendment of the Law on Wine and Vine adopted by the Moldovan Parliament in two readings in July 2018. MCP, USAID, the Government of Sweden, and private sector partners collectively opposed the draft, and as a result the Parliament did not vet the draft law in the final reading, referring to insufficient (or lack of) consultations with the development and private partners.

50 | PROJECT YEAR FOUR WORK PLAN While this situation was overcome, it may repeat in the future and points out to the political fragility of the ONVV, and Moldova overall. For this reason, ONVV and MCP are safeguarding the current state of the industry by acquiring political support in Moldova and among Moldova’s developing partners. MCP will look into instituting additional legal safeguards for ONVV PPP, as well as supporting to define matters for political diplomacy by USAID and Sweden, such as securing annual Government funding for ONVV, enlarging the ONVV Board with observers from development partners and/or Ministry of Finance.

██ Sub-activity 2: Strengthen institutional management of ONVV and develop member services

ONVV is facing institutional management challenges, amplified by staff turnover, bringing fragility to this new public-private partnership. MCP will be a bearer of institutional memory ensuring consistency in spite of staff changes and will allocate needed resources to implement modern management best international practices to institutionalize proper processes aimed to increase transparency accountability and grow sector trust.

Additionally, ONVV needs to enact rendering services to the sector. In addition to ongoing quality assurance efforts (PQUP, WoM/PGI certifications) and continuous education (“WoM Academy”), other services such as business and marketing intelligence, advisory, lobby and advocacy services must be formalized, deployed, and institutionalized into processes delivering to the sector.

██ Sub-activity 3: Continue industry regulatory reforms Implementation of wine industry legal and regulatory reforms initiated in 2013 need to continue as this is a long-term process to fully reorganize the model of industry regulation, management, and control. MCP has supported ONVV and MARDE to initiate changes in technical regulations, quality conformity assessment, and traceability system subordinated normative acts. In Y4, MCP will continue to support implementation of these changes, particularly pertaining to product certification, government controls, and wine and vine producer declarations. In addition, MCP will continue to assist the national phase of the Wine Registry Program (funded by USAID via a grant to ACSA). To this extent, MCP is providing strategic coaching to secure co-funding by ONVV of the Wine Registry Program (an MOU for joint funding between USAID and ONVV is being prepared and expected to be signed in fall 2018, pending Ministry of Agriculture and ONVV Board approval), as well as supporting program implementation.

Activity 2. Finalize the Wine of Moldova 2030 strategy to guide long-term industry competitiveness, and promote in the Government In Y3, MCP, following MARDE and ONVVs request, engaged in development of a national wine industry strategy, and to support development of the strategy, in Y3 MCP organized several consultations and scoping visit to Napa Valley in California. The development process needs to be hastened, to prepare the Moldovan wine sector to face international wine competition, ensure sustainable development of the winegrowing industry in the context of global climate change. This process will be organized based on international best practices, drawing on international and local expertise, so the strategy is fully embraced by the private sector and supported by the Moldovan government.

The “Wine of Moldova 2030” strategy will be developed around 5 key pillars, with a scope of implementing an innovative concept of sustainability of the wine industry. MCP will provide local and foreign consultancy, as well as ensure access to best international practices and coordinate the participatory process of the strategy development and approval.

The final document will be launched during an important international wine industry event and will be supported by an international PR campaign.

PROJECT YEAR FOUR WORK PLAN | 51 Activity 3. Develop and strengthen the PGI wine associations

Photo credit: Vladimir Ceban Photo caption: Mold-Nord production facity in Iargara

According to European best practices, a PGI wine is traditionally sold with a 15-20 percent higher price than the same wine with a generic label. The four PGI associations – Valul lui Traian, Stefan Voda, Codru, and Divin - have a leading role in promoting high-quality wines and the regional wine traditions. However, limited experience and low capacity, the Moldova PGI wine associations need support to organize their internal control procedures, clarifying and adjusting their PGI technical specifications aimed to promote the specific features of each wine region.

To enforce the PGI wine production system, PGI associations need to be fully operational and must execute their legal and statutory role. Currently, PGI Associations are being co-funded by ONVV. MCP will continue to support development services to associations’ members and incentivize development of the first Protected Denomination of Origin (PDO) wines in Moldova.

The pilot projects launched in Y2 and Y3: ‘Best Grapes’, ‘FlaveDor’ and ‘Terroir’ - are key activities of the PGI associations. (See also Activity 3 under Section 1), implemented and co-funded by MCP (via grant to PGI associations) and ONVV. These pilots progressed very well, and generated high-precision data and recommendations for improving viticulture practices that were distributed to the industry via ONVV electronic newsletters, field days and large industry conferences. The most important finding was the status of FlaveDor disease in surveyed vineyards, with the conclusion that the disease situation is not as severe as anticipated. In Y4, MCP will contribute to raise the scale of these projects to national scope by providing technical assistance and equipment endowments where needed (including additional weather stations). This will enable the associations to develop wine industry special extension services that assist grape and wine producers in applying best practices and researching for the most adapted viticulture and winemaking techniques that respond to the characteristics of each wine regions.

52 | PROJECT YEAR FOUR WORK PLAN Photo credit: KLUMEA Photo credit: Photo caption: Ia Mania Festival

TOURISM

PROJECT YEAR FOUR WORK PLAN | 53 OBJECTIVE 1: INCREASED PRODUCTIVITY AND QUALITY (BETTER WORKFORCE AND ADOPTED INNOVATION)

Photo credit: Stefano Zuliani Photo caption: Carpet weawing preparations at Rustic Art craft center in Clisova Noua village

Expansion of Moldova’s tourism market is dependent on the country’s ability to offer products and services that meet the international tourism market demands, specifically in accessibility of in-demand tourism products, availability of acceptable accommodations, and readily available tour operators able to serve the market. MCPs assistance to the tourism industry is tied to market realities and has strategically identified key areas for growth including in wine tourism, regional travel integration, rural and soft-adventure tourism. The best marketing the Moldovan tourism market could have in a period of start-up and growth is visitors returning home and speaking positively about their experience visiting Moldova, including the countries deep culture, hospitality, and beauty, therefore encouraging others to visit, and this marketing starts with a improved product quality.

PROGRAM 1. START-UP TOURISM MOLDOVA: PRODUCT DEVELOPMENT, SERVICES’ QUALITY UPGRADING AND TOURISM OFFER DIVERSIFICATION

Expected Outputs:

■■ Moldova National Wine Trail renewed and ■■ 7 hotels with improved services promoted ■■ 4 soft-adventure routes implemented in the ■■ Tourism information signage developed and target tourism hubs, Stefan Voda (ongoing), installed in key wine regions Orhei (ongoing) and Codru (new) ■■ 5 wineries initiating tourism services ■■ 20 tourism events strengthened as tourism ■■ 7 rural B&Bs and tourism service providers attractions, supported and promoted under identified and/or upgraded the Tree of Life country brand ■■ 10 tour operators/agencies coached to ■■ ‘Orheiul Vechi’ tourism management and develop inbound tourism packages zoning plans approved by the Government and implementation initiated

54 | PROJECT YEAR FOUR WORK PLAN Expected Outcomes:

■■ Enhanced wine tourism products and ■■ Upgraded quality of cultural, gastronomical, increased sales of tourism services within and wine experience products wineries ■■ Diversified and strengthened tourism ■■ Increased diversity and innovation of rural products experiences in wine regions ■■ Enhanced tourism products for local and foreign visitors

To boost and diversify the extremely weak tourism offerings in Moldova, in 2016 MCP kicked off a complex program, called ‘Start-Up Tourism Moldova,’ with the goal of fostering quality growth, innovation, Picture: Startup Tourism Moldova Program logo diversification, and expansion of tourism services, especially within the two main wine regions Codru and Stefan Voda. The program consists of capacity building, mentorship, grass-route grants, rural entrepreneurship, strategic planning, and road mapping of the market. Through its sub-programs – Wine- UP, Hospitality+, Inbound Startup, Go Regional – the ‘Start-Up Tourism Moldova’ program benefits wineries, rural pensions, B&Bs, artisans, hotels, soft adventure and activity providers, tourism agencies, and destination management organizations (DMO).

MCP-assistance across the Moldova Tourism Value Chain

T T S O S T

Direct T O S S I R M T S O S I I TOURISM VALUE CHAIN T

T S

PROJECT YEAR FOUR WORK PLAN | 55 MCP’s Startup Tourism Moldova program portfolio will benefit an expected 65 wineries, B&Bs, crafts centres, hotels, as well as tourism agencies/operators. In Y4, MCP will leverage the considerable growth of the “Wine Tourism Accelerator Program” to further upgrade and expand tourism offerings for the 15 partner wineries, with 5 new wineries expected to initiate tourism services. Following two-years of effort, ONVV and MCP will launch the Moldova Wine Trail, with over 100 tourism signage instituted in major wine and rural tourism sites, such as Stefan Voda and Orhei region. As part of ‘Hospitality+Moldova’, MCP will continue to identify and support the improvement of rural pensions, improve customers’ hotel experiences, develop tourism itinerary hubs, and diversify tourism offer in order to demonstrate high quality service in line with Western tourist demands and Moldova’s positioning as a “soft-adventure travel” destination In Y4, MCP will support the upgrade of 7-10 new (or pre-existing) rural B&Bs, while strengthening the 12 B&Bs already in the program (that are currently in various stages of renovation). In Y4, MCP will assist a total of 12 tourism agencies (5 new emerging ones) to promote inbound tourism, estimated to service 4,000 tourists per year, or about 20% of total organized tourist numbers (counting 17,500 in 2017). As part of the ‘Tree of Life’ national tourism calendar, MCP plans to support 20 local festivals, sports, food and other tourism events, which are expected to generate attendance of hundreds of thousands of people (100,000 est), primary local, but also foreigners. Lastly, MCP will prioritize preservation and sustainability in tourism diversification efforts. The ‘Orheiul Vechi’ tourism management and zoning plans, developed in Y3 with MCP assistance, are expected to be approved by the Government and implementation initiated.

Start-up Tourism Moldova in figures, 4Y goals 65 (inlcuding 29 new) start-up inbound tour operators, hotels, rural B&B’s and wineries, employing over 450 people, will be assited in upgrading their service quality, developing new tourism facilities and div

Start-up Tourism Moldova Program impact:

■■ More tourists in rural B&Bs and wineries, up 20-40% ■■ More rural overnight stays, up 20% ■■ At least 2$ invested in tourism infrastructure by beneficiaries for 1$ by MCP ■■ Triple the number of wineries with tourism services in Moldova ■■ More tourism agencies engage in inbound tourism, with 50% sales increase ≡≡ Higher quality and diversity of tourism product in rural areas ≡≡ Better tourism infrastructure outside Chisinau ≡≡ Growing tourist numbers and dollars to rural areas

56 | PROJECT YEAR FOUR WORK PLAN Activity 1. Wine-Up: Wine Tourism Accelerator Program The remarkable growth of worldwide tourism in recent decades has created opportunities for rural communities to diversify and stimulate further development in the tourism industry, and for travellers to enjoy activities that bring together educational and cultural experiences. To capitalize on this emerging market opportunity, wine tourism was identified as the key tourism product with the greatest potential for growth in Moldova. However, the country lacks well-designed products, particularly for wine and gastronomy tours and interactive experiences.

The goal for wine tourism development is for every winery in Moldova to be able to receive tourists, thus upgrading Moldova from a wine producer to a destination for wine tourism experiences. MCP will continue to offer tailored assistance at the individual winery level to upgrade and develop new tourism facilities and services. These will range from developing the basic ability to host wine tastings to showcasing production facilities and vineyards, to wine festivals, shows, and gastronomic experiences. MCP will encourage the wineries to engage in local partnerships with community members with the goal of fostering regional sustainable development therefore benefiting rural pensions, the hospitality industry, and the emergence of local tourism attractions.

To date, through the “Wine Tourism Accelerator Program”, MCP has tripled the number of assisted wineries, from 5 to 15, to develop the wine tourism market. MCP will continue supporting the tourism service offering of Moldovan wineries through the “Wine Tourism Accelerator Program”, throughout a more complex cross-industry partnership between ANTRIM, the ONVV, and the Agency for Investments. Additional local and foreign expertise will be allocated to wine tourism development based on the specific needs of each beneficiary. Additionally, MCP will leverage the SEED grants fund to incentivize further development of tourism services within wineries.

The “Wine Tourism Accelerator Program” will continue to deploy activities through three key areas of interventions:

■■ Develop wine tourism policy documents and development framework (policy/strategic level). Develop a policy-manual for accessing agricultural subsidies for wine-tourism facilities; improvement of legal regulatory norms; and marketing strategies to position Moldova as a top wine tourism destination will be developed with the ONVV, ANTRIM and the Agency for Investments. ■■ Implement the Moldova Wine Trail program (industry level). MCP will continue to integrate WoM routes into the national tourism offering, develop extensive tourism signage, and enhance tourism information tools via the ANTRIM Tourism Information Centers, the PGI Associations, and moldova. travel web-portal. In Y4, MCP will continue to implement the long-awaited tourism signage program to facilitate self-guided travel for tourists. It is planned to institute approximately 100 road signs in major wine tourism hubs, through partnership and co-funding between MCP, ONVV, MoEI, and the Ministry of Interior. ■■ Tailored assistance programs to upgrade existing and/or develop new tourism services and facilities (firm level). MCP will provide individual support for product development via grants and technical assistance aimed to increase the number of the wine tourism destinations in Moldova and enhance the visitors’ experience. In Y4, MCP will disburse approximately $70,000 USD in wine tourism grants, with average grant size $15-20,000 USD, with the goal of encouraging wineries to launch/develop their tourism service offering. Given that tourism earnings are limited in the current market, grants are serving as a credible incentive for wineries to invest in tourism service today, and thus, help Moldova to create a critical mass of wine tourism product that can be marketed internationally. MCP portfolio of wine tourism assistance includes 15 wineries, of different scale and at various stages of development, concentrated in three major wine tourism hubs, Stefan Voda region (South-East of Moldova), Gagauzia region, and the Central region. MCP will continue to assist flagship wineries that can service hundreds or even thousands of visitors annually, such as Asconi, Mimi and Etcetera, with particular focus to diversify and improve the tourism service offering, and thus strengthening Moldova’s national wine tourism market. Special attention will be paid to family-owned, small wine production businesses that

PROJECT YEAR FOUR WORK PLAN | 57 fall into the category of niche small scale community-based tourism, which is highly sought after by Western travellers. During Y1-3, MCP focused on identifying wineries ready and appropriate for the tourism market, and initiated investment into tourism infrastructure, and in Y4 and Y5, the focus will be on infrastructure implementation and development. Wineries are cost-sharing at least 50 percent of the investment, typically in cash, therefore, it requires time to secure the needed funds. To note that tourism infrastructure is a multi-year investment for any winery, as it includes building or renovating tasting rooms, lodges for overnight stay, and restaurant/catering facilities, for example.

Photo credit: MCP Photo caption: Opening of the Hanul lui Hanganu, rural guesthouse, refurbished with MCP SEED grants

Activity 2. Hospitality+ Moldova program: improving tourism hospitality infrastructure The Hospitality+ Moldova activity was developed to enhance tourism hospitality infrastructure and create more opportunities for business growth in the tourism industry. The program responds to global trends in sustainable tourism consumption, on one hand, and the Moldovan tourism business needs in different product niches and stages of development, on the other hand. The end goal is to create a series of vibrant, high-quality tourism sites promoting authentic tourism experiences.

Moldova’s inbound tourism is positioned as a niche tourism product focusing on wine, gastronomy, rural, and “soft adventure” tourism4, which responds to the expectations of foreign tourists for new and innovative travel experiences. Adventure tourism is growing exponentially worldwide, as travellers prefer to visit previously undiscovered destinations. Adventure tourism involves exploration or travel to remote, exotic areas and includes unique and challenging experiences during the vacation, in which travellers interact with local populations and connect with their cultural. The soft adventure tourism segment generated the highest revenue to the global tourism market in 2017 and is expected to grow at a CAGR of 17.8%5.

According to the Adventure Travel Trade Association (ATTA), top trending activities in soft adventure tourism in Europe are eco-tourism (#1), cultural tourism (#2), environmentally sustainable tourism (#3), hiking (#4), and culinary tourism (#5). Therefore, Moldova could benefit from these rising trends and grow regional capacities that will enhance country’s tourism offering. MCP will continue to encourage tour operators and tourism service providers to establish soft adventure products, such as biking and hiking trails around wineries and handicraft workshops to meet the growing market demand.

4. To date there is no official definition of the `soft adventure` tourism. However, the Adventure Travel Trade Association defines it as a trip that includes at least two of the following three elements: physical activity, natural environment and cultural immersion.

5. Allied Market Research, “Adventure Tourism Market by Type, Activity, Type of Traveler, Age Group, and Sales Channel: Global Opportunity Analysis and Industry Forecast, 2017-2023”

58 | PROJECT YEAR FOUR WORK PLAN Table. ATTA Top Trends Activities per Region in 2017

HEADQUARTERS #1 #2 #3 #4 #5

Safari Environmentally Eco-tourism Cultural Hiking Africa Sustainable Hiking Eco-tourism Cultural Cycling Environmentally Asia Sustainable Hiking Cultural Environmentally Eco-tourism Cycling Europe Sustainable Eco-tourism Environmentally Cultural Hiking Culinary North America Sustainable Environmentally Cultural Eco-tourism Hiking Culinary South America Sustainable Eco-tourism Cultural Environmentally Hiking Culinary All regions Sustainable

MCP ASSISTANCE PACKAGE FOR RURAL B&BS, GUESTHOUSES AND OTHER TOURISM SITES INFRASTRUCTURE ■■ Zoning, architecture and design expertise for planning the tourism infrastructure, preserving authenticity and traditional architecture ■■ Small grants supporting investments in tourism infrastructure (with focus on high-quality lodging, all-season restaurants)

TOURISM SERVICE ■■ Coaching in tourism product development ■■ Strengthening on-line presence and booking services via website, Booking, Tripadvisor ■■ Professional image through visual branding and marketing collateral ■■ Liaising with the Moldova-based tour operators and agencies to be included in the international tourism packages [info-trips for tourism agencies] ■■ Awareness on the domestic market through local media ■■ Representation of interests and networking with peers through ANTRIM business association ■■ Integration in larger regional tourism products, such as Moldova Wine Trail, cycling routes, etc Photo credit: MCP Photo caption: Pottery workshop by Vasile Gonciari ■■ Getting noticed through road signage

As of 2017, there are 252 accommodation establishments are officially registered in Moldova; of these 96 hotels and motels and 26 pensions and B&Bs. In 2017, the average occupancy rate in the accommodation units was of 35%: in hotels the occupancy was just 23,1%, and 13,5% in rural pensions6. The quality of the hospitality services is one of the key issues for these low rates. In addition, only 10 out of 26 rural pensions officially registered in Moldova are offering tourist accommodations on a permanent basis. Thus, MCP aims to assist accommodation units in upgrading their standards to satisfy tourists’ expectations.

6. National Bureau of Statistics of Moldova website PROJECT YEAR FOUR WORK PLAN | 59 As part of ‘Hospitality+Moldova’, MCP will prioritize improving product quality and expanding the rural B&B market, increasing the soft-tourism product offerings in Moldova to meet the international market demand, building capacity of tour guides, and providing quality upgrades to the medium-size hotel market.

██ Sub-activity 1: Prototype best practices in opening and managing rural B&Bs, guesthouses and other tourism sites

In Y4, MCP will continue to identify and support the improvement of rural pensions, including upgrading facilities and services to serve as prototypes of best practices for emerging market actors. This strategic upgrade will create a new vision of rural tourism business in Moldova, developing new tourism products that are in line with current global trends in sustainable tourism.

Currently, 12 rural pensions are assisted within MCP’s “Hospitality+ Moldova Program”. In Y4, MCP will identify and welcome an additional 7 to 10 (new or pre-existing) rural B&Bs to the program that are strategically situated in close proximity to key wine regions. Grants through MCP’s SEED fund will be provided to improve accommodation and services’ quality, with an average grant size of $15,000 USD per beneficiary, cost-shared at a ratio of approximate 1:3. MCP will ensure preservation of the authenticity elements throughout design and architecture services provided to beneficiaries. Small infrastructure investments via SEED fund grants will incentivize facilities upgrading. Specific assistance will be provided to enhance online presence and marketing. MCP support will also include trainings in workforce development including coaching and community empowerment to improve destination management practices.

MCP-assisted Casa Sub Stanca and Casa Verde B&Bs, Orhei Vechi tourism site: Before and After

Before After

Before After

Before After

Photo credit: MCP Photo caption: Casa de Sub Stanca B&B, before and after renovation of a guest room

60 | PROJECT YEAR FOUR WORK PLAN ██ Sub-activity 2: Developing hiking, biking, cooking, and other soft-adventure products as the core for experiential tourism

As part of the “Hospitality+ Moldova Program”, MCP will continue to incentivize local tourism agencies to develop inbound tourism specifically related to soft adventure tourism includingbiking and hiking trails, gastronomic and cultural tours, handicraft tours, birdwatching trails, and eco-tourism trails around wineries and tourism hubs. These trails will attract more tourists to the area and provide soft adventure activities to ideally extend their stay.

MCP will continue to foster partnerships among relevant stakeholders, such as local NGOs working in sports and environmental activities (namely Eco Visio, Miscarea Ecologista din Moldova, Velo Point, Eco Run, Mountain Bike), local and central public authorities, wineries and rural pensions, and other donor organizations, such as the Polish Aid Foundation, US Forest Service and the Global Environment Facility (GEF) to further develop the soft-tourism market.

In Y4, MCP aims to develop and strengthen at least four soft-adventure tourism trails in the Orheiul Vechi reservation (ongoing), in Stefan Voda (ongoing) and Codru area (new); to conceptualize and strengthen local public-private partnership to ensure the sustainability of these investments, and boost interest of local and foreign tourists to explore the new tourism experiences.

MCP-supported hiking trail in Orhei Vechi*

*Launched in summer 2018, the hiking trail includes 4, 7 and 15 km trails around key archaeological sites in Trebujeni, Butuceni and Morovaia villages. Maps are available at the local B&Bs.

PROJECT YEAR FOUR WORK PLAN | 61 ██ Sub-activity 3. ‘Tree of Life’ tourism events national agenda, as catalyst for tourism The “Tree of Life” tourism events have become promotion platforms for local traditions, culture, crafts, traditional products, and tourism attractions. Moldova’s tourism industry will diversify its tourism offering through an attractive local cultural tourism events’ agenda. As per OECD, ‘the close links between major events and tourism are clearly recognized by many cities, regions and countries that have identified tourism as a specific priority within long-term tourism strategies’7. In Y4, MCP will continue to support the local events through the “Tree of Life” brand that have the potential of becoming booming tourist attractions, such as Open-Air Opera Festival DescOPERA in Orhei Vechi, Ia Mania, Pottery Fest, and National Wine Day. Over 20 music, wine and culture festivals, with high tourism potential, with an estimated of 100,000 - 200,000 visitors, will be supported for marketing and promotion to local and regional tourists, mainly in Romania and Ukraine. Over 12 of these 20 events are located in rural tourism sites, which further supports economic benefits from tourism to local communities. MCP encourages event organizers to set event dates months in advance, and tourism agencies to include these events in their tourism packages. For instance, DescOpera and National Wine Day are set by the Government stakeholders to take place every year during the third weekend of June and second weekend of October, respectively, and this steadily grows the number of attending international tourists. MCP will include all events on a common events’ agenda, under the “Tree of Life” country brand, to be published on the modova.travel web-site and promoted in source markets via digital marketing and at tourism tradeshows.

‘Tree of Life’ Calendar 2019

██ Sub-activity 4. Hospitality services’ quality upgrades- supporting hotels and tour guides Building on the Year 3 activities, including hotels’ quality standards assessment via a mystery shopping exercise and a tourists’ exit-survey, MCP will develop and implement a tailored assistance program for hotels and tour guides professions.

7. Major Events as Catalysts for Tourism, OECD, 2017, file:///C:/Users/Doina/Downloads/OECD%20Tourism%20Paper%202017%20(2),%20%20Major%20 Events%20as%20Catalysts%20for%20Tourism.pdf

62 | PROJECT YEAR FOUR WORK PLAN ■■ Upgraded services and visibility for Moldova’s hotels. Based on MCP’s assessments of quality standards for hotels, it was concluded that the mid-sized hotels are a strategic market that need assistance to enhance guest experience including booking, Meetings, Incentives, Conferences & Events (MICE) ordering, and verbal introductions in the hotel and would considerably benefit from a guest reviews and feedback management program and professional personnel trainings: all of which MCP will support in Y4. Additionally, MCP will assist hotels to increase visibility on international travel platforms such as Expedia, TripAdvisor, Booking, and AirBnB. MCP will implement a comprehensive online campaign for promoting the upgraded tourism facilities and services on international platforms with a personalized approach for each rural B&B and hotel involved in this program. This activity will be implemented in collaboration with ANTRIM and will seek to create new content and boost the rating of the tourism facilities by creating organic interest and enhanced reach. MCP estimates that approximately 7 hotels, primarily based in Chisinau, will benefit from this assistance. ■■ Tour guides professional development. Approximately 65 tourism guides are listed in the Moldovan professional guides associations’ membership lists. Nevertheless, a majority of the tour operators and tourism agencies note the shortage of guiding services and insufficient services quality8 as barriers to growth. Moldovan tour guide practices are not consistently in line with the international trends and standards, therefore the visitors’ experience in Moldova could be undermined. The existing tour guide courses are considered outdated and the active guides in the growing market require more practical trainings and workshops. MCP, in partnership with the tourism guides associations and ANTRIM, will develop a program for tour guide professional development, including trainings, workshops, capacity building for the professional associations, training of trainers, and will assist the integration of the international tourism guides federation.

██ Sub-activity 5. Inbound tour operators’ start-up program As part of the Start-Up Tourism Moldova program, MCP will continue to incentivize local tourism agencies and tour operators to develop inbound tourism products. Currently, only 3% of 440 tourism agencies active in Moldova have developed local tourism products, i.e. selling Moldova as a tourism destination on international markets. An open call to sign up for the Program has been launched by MCP, to which 8 tourism agencies have expressed their intention to start-up incoming tourism activity. With these new entrants, MCP will have assisted a total of 12 tourism agencies estimated to service 4,000 tourists per year, or over 20% of total organized tourist numbers (counting 17,500 in 2017).

As part of its assistance methodology, MCP will assess the specific needs of each individual operator and assign a tailored support program. This will include international expertise for product development, marketing activities and workforce development. One of the focus areas of the Program will be the development of clear brand identities for the participating companies to differentiate their tourism products and improve the content of the promotional materials. Moreover, the project will encourage the tour operators to develop soft adventure products, such as biking and hiking trails around wineries, gastronomic and cultural tours, and handicraft tours.

Activity 4. Go-Regional Tourism Development Program”: emerging sustainable tourism destinations in Moldova’s key regions

MCP approach in developing Moldova’s tourism industry is focused on a pivotal intervention in key tourism destinations by enhancing their tourism capacities. Moldova’s ‘tourism hubs’ include Chisinau surroundings (Hâncești, Ialoveni, Strășeni, Anenii Noi, Orhei and Călărași districts), Orheiul Vechi reservation, and Ștefan Vodă wine region (Căușeni, and Ștefan Vodă districts). MCP’s `Go-Regional` Tourism development program in conceived to drive growth and investments into developing consistent networks

8. White Book on the Legal Regulatory Reform of the Tourism Industry, 2018, p.24-25 PROJECT YEAR FOUR WORK PLAN | 63 of tourism services and facilities, cultural events and tourism trails, as well as local destination management capacities. In Y4, MCP will continue to primarily concentrate on Orheiul Vechi reservation and Purcari region. Prospection development activities will also be instrumented into Gagauzia and Prutul de Jos regions.

██ Sub-activity 1. Orheiul Vechi reservation: sustainably managing Moldova’s most popular rural destination

As the most visited tourism destination in Moldova, with over 100,000 visitors annually, the ‘Orhei Vechi’ site has the opportunity to become the flagship of rural and cultural tourism in the country.

MCP will continue its multi-faceted support to ‘Orhei Vechi’ site that was initiated in Y1, to support its sustainable development and management in the following ways:

■■ Destination planning. The Orhei Vechi tourism management and zoning plans, developed with MCP assistance in Y3, are pending Government approval. The goal is to have these plans approved by the end of 2018, so they can serve as the foundational policy and strategic planning tools for this site, including but to limited to tourism flow management, tourism infrastructure development, allocation of public funding for roads and other infrastructure. These strategic planning documents have ‘sustainability’ at their core, with the goal to preserve the zone’s authenticity, rustic/rural feel, and architecture. Following Government approval, MCP will assist the MoEC to implement the plan including institutional capacity building of Orhei Vechi reservation and mobilization of public/private/donor funding for essential infrastructure development.

Photo credit: Valeriu Istrati Photo caption: View from above the Descopera Festival over the Nabucco Opera stage in Butuceni village, June 2018

64 | PROJECT YEAR FOUR WORK PLAN ■■ Tourism signage. MCP will assist tourism signage in villages of Trebujeni, Butuceni and Morovaia, as part of its National Wine Trail effort. Improved signage will support cross-sale, divert tourist flows from the scale monastery in Butuceni to lesser known locations, such as B&Bs in Trebujeni, and Branesti winery. ■■ Local festivals & lifestyle events. In addition to the flagship ‘DescOpera’ festival, other smaller satellite events will be supported, such as running, cycling, and hiking marathons (e.g. Orhei Vechi EcoRun, Mountain Bike Marathon). MCP’s grantees and partners who are hosting and organizing events include Butuceni Eco Villa, EcoRun, Mountain Bike MTB, Miscarea Ecologista din Moldova (for birdwatching). In Y4, MCP will work with industry partners to develop, host and attract at least 10 events with 10,000 visitors in the Orhei Vechi region. ■■ Rural lodges and other tourism products. Under the “Hospitality+ Program”, MCP will continue to assist the ‘cluster’ of 8 B&Bs in Butuceni and Trebujeni in reconstruction and development... MCP aims to have all 8 B&Bs operating in the 2019 season, creating a critical mass of quality lodging (50 rooms) and traditional food spots in the area. The result of this assistance will be the largest ‘overnight stay’ site in rural Moldova. To manage all these activities efficiently, MCP plans to contract a local consultant in Y4 for project coordination and to provide support for site development in cooperation with public authorities, other donors, the local community, and the reservation’s administration.

██ Sub-activity 2. Purcari region: growing a flagship wine tourism destination in Moldova’s oldest wine regions

In Y4, MCP will continue development of the Stefan Voda site in partnership with the private sector (wineries and rural B&Bs) and Polish Aid. Purcari village as the center of Stefan Voda region could become a tourism hub in the south-east of Moldova, building its appeal around winemaking culture in the famous region of Purcari and the iconic 17th century Assumption of Our Lady Church in Causeni town. Since two of most visited wineries in Moldova are located in Stefan Voda (Purcari Estate and Etcetera), hosting over 3,000 visitors per year, MCP will provide assistance to emerging tourism sites in this region including to wine producers, craftsmen, rural pensions, and restaurants, which will develop new tourism services enhancing the regional tourism offer diversity MCP will also continue to support the development of soft-adventure products throughout the region such as, biking, hiking, birdwatching, fishing, kayaking, wine runs, cultural events, and wine and culinary routes, to become the new tourism products in addition to the oeno-touristic offerings.

In Y4, MCP plans to achieve the following milestones in Purcari tourism region:

■■ Launch ‘Casa Veche’ B&B in Palanca village, as satellite lodging to Etcetera winery ■■ Launch the biking and hiking trails connecting Stefan Voda wineries and tourism sites (Purcari, Etcetera), and Stefan Voda with Chisinau for long distance biking ■■ Install tourism road signage as part of Moldova Wine Trail effort ■■ Launch tourism service at Mezalimpe and N. Iurco wineries in Rascaeti village ■■ Identify and support development of new rural tourism sites. Potential beneficiaries were identified in Crocmaz, Ciobruciu (fishing lodge) villages. The end goal is to have the Stefan Voda regions 7 wineries and satellite B&Bs, connected via the Moldova Wine Trail, and biking/hiking routes by 2020.

PROJECT YEAR FOUR WORK PLAN | 65 OBJECTIVE 2: EXPANDED MARKET LINKAGES

Photo credit: ANTRIM Photo caption: Moldova’s stand at tourism exhibition ITB Berlin 2018 in Germany

Moldova made it to “top 10 tourism destinations to be discovered in 2018”, as a result of monumental marketing efforts by MCP, in partnership with ANTRIM, ONVV and other tourism industry counterparts. Given the extremely ‘skim’ national marketing budgets, that range to $100-200 thousand per year (including MCP co-funding), Moldova’s growing international visibility speaks of a highly effective and innovative approach to marketing, engaged by MCP and industry stakeholders. In the next years, the goal is to capitalize on this international interest for Moldova as an emerging destination, and convert it into more tourist numbers to Moldova, of at least 20% annual growth across the tourism value chain (from international arrivals and overnight stays, to visitors at wineries and rural B&Bs). As a newcomer to the international tourism market, Moldova needs to strategically market itself to highlight the natural beauty of Moldova, rich cultural heritage, and unique and authentic tourism product offering to further expand the countries’ tourism industry.

MCP will continue to smartly rely on digital marketing, as one of the most effective promotion channels. In FY18 MCP launched a new digital campaign “BeOurGuest” promoting Moldova as a tourism destination which went viral on social media reaching over three million views. During Year 4, MCP plans to continue building on the success of the campaign in order to build brand equity and position Moldova as a unique travel destination in the heart of Europe.

66 | PROJECT YEAR FOUR WORK PLAN In Y4, the marketing of Moldova as a travel destination will continue to be targeted on three key source markets, namely Romania, Poland, and Italy, while pursuing second-tier markets, namely Japan, China and Scandinavia. MCP will continue to engage a variety of marketing activities, including international PR campaigns, media trips, digital marketing tools and enhanced online presence, marketing intelligence mechanisms, travel expos and matchmaking events. The ultimate goal is to position Moldova on the world tourism map, enhancing brand equity and monetizing the awareness into new tourists and clients for local businesses. In particular, MCP will aim to increase the number of foreign tourists served by Moldovan tour-operators (so-called organized travel) by 30% in 2019. In Y4, MCP will assist over 10 tour operators in B2B partnerships, through participation at key travel exhibitions as part of a Moldova national booth, namely ITB Berlin, TT Warsaw, Rimini Incontri, BIT Milano, Poznan Tour Salon, and Romania TTR, and familiarization tours for business partners. To ensure availability of adequate marketing intelligence, in fall 2018, MCP will launch the second national visitor survey, interviewing tourists at the airport and main Romania-Ukraine border crossings. This analysis will allow the Agency for Investments, ANTRIM and MCP to update the current Marketing & Promotion Framework (2016 edition).

Familiarization tours will be leveraged to welcome tourism industry influencers from target markets such as Poland, Italy, and China to the diverse and emerging product offerings from Moldova. The foreign top-travel journals, such as National Geographic, Lonely Planet, Forbes, usually request individual approach, qualitative press content and media tools that could express the country’s uniqueness and attract readers’ interest. For this purpose, MCP has secured international technical assistance to building these capacities during Y4 in the local institutions and set the ground for future campaigns. InY4, MCP plans to host four international media trips during the spring and fall seasons, aiming to bring over 50 travel and media influencers. Familiarization tours have proven to be one of the most effective promotion channels, as it secures $4 worth of media for every $1 invested. MCP will continue upgrading the existing www.moldova.travel website and ‘Moldova Holiday’ smart phone application, which are the most important online promotional platforms for Moldova’s tourism industry. The revamped national travel portal www.Moldova.travel will be live in February 2019. To support tourist information gap, the MCP-assisted Chisinau Tourism Information Center aims to service at least 15,000 visitors (double vs 2018), and a smaller infopoint is planned to be launched at the Chisinau airport.

PROJECT YEAR FOUR WORK PLAN | 67 PROGRAM 2. “TREE OF LIFE” MARKETING PROGRAM: UNVEILING THE HIDDEN GEMS OF MOLDOVA TO THE WORLD

Expected Outputs:

■■ One integrated international marketing ■■ One tourist exit survey completed and communication campaign developed ■■ 5 international tourism exhibitions with and implemented in local and target at least 10 travel operators/agencies international markets participating ■■ At least 2 international press trips to ■■ 10 foreign partners participating in Moldova familiarization trips to Moldova ■■ At least 5 articles published in foreign travel ■■ 15,000 tourists serviced by the Chisinau media outlets Tourism Information Center ■■ Upgraded national tourism portal www.moldova.travel

Expected Outcomes:

■■ Enhanced international awareness about ■■ Increased sales for the inbound tourism sector Moldova as a tourism destination ■■ Strengthened leadership of ANTRIM in the ■■ Increased number of tourists in Moldova local tourism market ■■ Consolidated brand equity for the tourism ■■ Increased awareness in the local market on country brand “Tree of Life” tourism attractions

Activity 1. Placing Moldova on the map of world tourism: Building brand equity and international awareness of Moldova as a tourism destination Excerpt of the Marketing & Promotion Since the development of the tourism country logo, Framework of the Tourism Industry (2016-2018) the “Tree of Life,” in 2014, important steps have been taken to brand, position, and market Moldova Marketing goal for 2017/2018: as a growing tourism destination. During 2017- increase by 50% the number of leisure tourists 2018, as a direct result of MCP’s marketing efforts, received Moldova was featured by dozens of travel magazines in source markets such as Poland, Romania, Italy, and Germany. In 2013, Lonely Planet classified Moldova as the no. 1 ‘off the beaten path’ tourism destination of Europe and simultaneously the no. 2 least visited destinations in the world. International attention on Moldova stengthened in 2017, when Moldova 2018 2016 2017 was listed as one of the most recommended travel (1st quater ) destinations to discover, released by Trips.Com, 121,340 145,165 27,128 Forbes, and Lonely Planet magazines. In 2018, MCP tourists tourists tourists launched the `#BeOurGuest` campaign, which +28% +19% +15%

68 | PROJECT YEAR FOUR WORK PLAN has boosted Moldova’s image in the target markets, such as Poland, Italy and Romania, and provided the opportunity for Moldova to become the global capital for wine tourism hosting the UNWTO 3rd edition of the Global Wine Tourism Conference (September 2018).

MCP will continue to assist Moldova increase its visibility and perception as an authentic tourism destination for both leisure and business purposes in Y4. Currently, the country is far from having widespread awareness as a tourism destination, but this may be considered as a strength, as travelers are searching for unknown and off-the-beatten track destinations.

██ Sub-activity 1: International communications campaigns and media trips MCP will continue supporting the tourism industry in expanding awareness about Moldova as a tourism destination internationally, and specifically on source markets including Poland, Italy, and Romania. In Year 3, MCP worked with Mr. Alex Crevar, a National Geographic Travel contributor, who will assist in Y4 to develop comprehensive international PR & communication activities using various channels, including social media, traditional travel media (such as magazines), and blogs. MCP’s strategic approach for tourism promotion focuses on developing new qualitative content to highlight Moldova’s strengths as a travel destination in internationally recognized travel magazines and online media resources. Promotional activities will also include international press events and familiarization tours for specialized press and bloggers. In Y3, MCP hosted over 50 travel media and influencers from Poland, Italy, Romania, US, UK and other target source markets in Moldova. Familiarization tours have proven to be one of the most effective promotion channels, as it secures $4 worth of media for every $1 invested. This ratio can be further increased, for example, MCP- facilitated a free-of-cost feature of Moldova in National Geographic Travel with only $2,000 USD invested in travel cost for journalists, whereas the commercial equivalent of the resulting publication exceeds $40,000 USD. As such, in Y4, MCP plans to host four media trips during the Spring and Fall seasons, and smaller satellite encounters (e.g. hosting individual journalists). MCP will extend the array and profile of Moldova as a travel destination, targeting internationally recognized media outlets such as the New York Times, National Geographic, in addition to specialized travel media outlets in target markets.

Photo credit: Maxim Ciumash Photo caption: Masterclass of bread and colaci baking at Casa Karaman

PROJECT YEAR FOUR WORK PLAN | 69 ██ Sub-activity 2: Enhance Moldova’s digital marketing tools and online presence to promote inbound tourism

The Internet is used by 83 percent of leisure travellers to plan travel9. While used by so many, digital, social, and mobile media are constantly evolving as new channels, tools, functionality and consumer behaviour patterns emerge. Social media has a strong influence on how people make travel decisions. Up to 52 percent of users have changed their original travel plans based on social media10. Therefore, MCP intends to consolidate Moldova’s presence for on-line resources and create a sustainable partnership for the management of the country’s digital marketing activities.

MCP will continue upgrading the existing www.moldova.travel website and ‘Moldova Holiday’ smart phone application, which are the most important online promotional platforms for Moldova’s tourism industry. In Y3, the project developed a new structure for the website and improved the web-based content. In Y4 MCP will integrate these improvements into a newly developed platform with a user-friendly design, mobile responsiveness, improved search engine optimization, and available 360o virtual tours of the most attractive tourist destinations. The revamped national travel portal www.Moldova.travel will be live in February 2019.

To ensure a sustainable utilization of these online resources, the project will assist ANTRIM and the new Agency for Investments to co-manage the portal’s administration within an operational PPP., The goal is for Moldovan tourism products to have an increased rating on international travel platforms such as Expedia, TripAdvisor, Booking, and AirBnB, therefore in Y4, MCP’s efforts will also include activities to develop qualitative web-based content and readapt the content of the traditional promotional materials to highlight Moldova’s strengths.

██ Sub-activity 3: Ensure the availability of adequate marketing intelligence to sustain viable destination marketing

The newly established Agency for Investment and private sector stakeholders need to rely on marketing intelligence while planning and executing marketing programs. Visitor surveys are one of the most important tools for understanding visitors profile, preferences, and required improvements to further strengthen the tourism market. In Fall 2018 (in coordination with the National Wine Days-the largest international tourist event in Moldova), MCP will launch the second national visitor survey, interviewing tourists at the airport and main Romania-Ukraine border crossings. This analysis will allow the Agency for Investments, ANTRIM and MCP to update the current Marketing & Promotion Framework (2016 edition), as well as to measure the efficiency of its promotion activities. Data will be disseminated to tourism industry stakeholders to support business decisions.

██ Sub-activity 4: Support tourism information centers: consolidating and expanding Tourist information centres are important tools for the tourism industry, therefore MCP will support ANTRIM to create Moldova’s first tourism information points in partnership with local authorities and the private sector.

MCP will continue to support the Chisinau Information Centre that was launched in Y3 and is currently managed by ANTRIM. The goal of further support to the Center is to make its services sustainable and relevant in the long term. In Y4, the Center aims to generate additional income through activities like selling souvenirs, producing and selling tourist maps, organizing events, and brokering city tours. The Center hosted over 7,000 tourists in its first 10 months of operation (November 2017 – August 2018), and aims to double this number in 2019, reaching 15,000 tourists.

9. Digital&Mobile marketing toolkit, Destination Marketing Association International, 2013 10. Idem

70 | PROJECT YEAR FOUR WORK PLAN Photo credit: UNDP Photo caption: Entrance to the Tourism Info Center in Chisinau, Moldova

Finally, MCP will assist in the development of signage and information boards in Chisinau to improve the access to tourism information, in collaboration with Chisinau Mayoralty, leveraging EU grant resources for signage production. In Y4, MCP and the Chisinau Mayoralty aims to label over 100 tourism sites in Chisinau, including historical buildings, monuments, churches and other points of interest.

MCP negotiated with the Chisinau Airport to allocate space for an information point in the ‘Arrivals’ area that will offer free materials including maps, brochures, and postcards for Moldova. With the design for the information kiosk complete, in Y4, MCP will assist ANTRIM and the Airport in implementation, with the goal to institute this info point in spring 2019 before the high-tourism season.

Activity 2. Foster business linkages and expand target markets ██ Sub-activity 1: Enhanced country presentation at international tourism trade events Moldova’s tourism industry will benefit from improved and dynamic representation at international tourism tradeshows. In Y4, MCP will continue to support participation of Moldovan tourism operators and tourism service providers (including hotels and wineries) with a national country booth at key trade fairs.

Photo credit: ANTRIM Photo caption: Presentations for tour operators at the Moldova’s stand at Arvinis 2018 exhibition

PROJECT YEAR FOUR WORK PLAN | 71 The selection of the tradeshows is based on the Tourism Marketing and Promotion Framework and includes: ITB Berlin, TT Warsaw, Rimini Incontri, BIT Milano, Poznan Tour Salon, and the Romania TTR 2019 Tourism Trade Shows exhibition. While MCP has consistently supported to be attended by Moldovan tourism agencies these tradeshows since 2016, the goal for Y4 is to encourage new tourism agencies (up to 10 graduates ■■ ITB Berlin (Germany) of MCP’s Startup Tourism Program) to participate ■■ TT Warsaw (Poland) and develop business partnerships in source markets. ■ Rimini Incontri (Italy) MCP will incentivize the Agency for Investments ■ to plan efficient promotion budgets, increasing ■■ BIT Milano (Italy) impact on the key target markets. Additionally, ■■ Poznan Tour Salon (Poland) fair participation will be enhanced by additional ■■ Bucharest TTR (Romania) marketing activities including press conferences, B2B presentations, road shows, informational tours for potential partners, and customized B2C events. ANTRIM will continue as the main organizer of these activities with support from MCPs expert consultants enhanced with a new collaboration is with the Agency for Investments.

██ Sub-activity 2: Integrate Moldova’s tourism offering into regional packages Moldova’s tourism industry would benefit from integration into the regional tourism offerings with Romania and Ukraine, specifically for niche countries like USA, China, and Japan. The newly signed Memorandum of Collaboration between the Romanian Tourism Ministry and the former National Tourism Agency from Moldova will create a wine route that links Romania to Moldova along the route of Prince Stephen the Great and Saint, which will include locations from both countries. In this context, MCP seeks to build on this partnership and aims to incentivize foreign tourism agencies to sell Moldova as a tourism destination. A special focus will be addressed to Israel, China and Japan, since these are within the Romanian and Ukrainian marketing target markets.

MCP supported marketing activities

Bloggers Social Media & Road tours Media Advertorials Shows

Press Moldova – an emerging B2B trips travel destination webinnar B2B Activities B2B

PR & Match- Marketing Fam Trade Commu- making intelligence Tours Fairs

IMAGE AND BRAND EQUITY IMAGE nication events

██ Sub-activity 3: Foster new business partnerships for assisted tour-operators and tourism agencies (B2B)

To incentivize foreign tourism agencies to sell Moldova as a tourism destination, in Y4, MCP will continue to organize familiarization tours to Moldova for foreign business partners, especially from key target markets, as well as from Romania and Ukraine. Familiarization tours are an effective way to demonstrate new tourism products and partnerships formed as a result of the tours frequently result in increased sales of tourism packages. The MCP-assistance package covers 50% (max $600 USD) of the international travel of a foreign business partner. Additionally, MCP will assist Moldovan organizations to participate in international tourism business forums, as well as country presentations at tailored business events in target markets.

72 | PROJECT YEAR FOUR WORK PLAN OBJECTIVE 3: IMPROVED SECTOR-ENABLING ENVIRONMENT AND INCREASED CAPACITY

Photo credit: Serjiio Lobourenko Photo caption: Culinary masterclass in preparing the traditional Bride’s pie at Et Cetera Winery

PROGRAM 3: RE-THINK TOURISM MOLDOVA. BUILDING SUSTAINABLE PUBLIC-PRIVATE PARTNERSHIP

Expected Outputs:

■■ Legal and regulatory proposals initiated ■■ A strategic partnership established with the to reform the tourism industries legal Agency for Investments of Moldova framework ■■ Tourism Gala and ANTRIM Incoming Forum ■■ A new strategic roadmap for Moldova’s conducted tourism industry development

Expected Outcomes:

■■ Improved business environment in the ■■ Reformed tourism industry for sustainable tourism industry development ■■ Enhanced public-private dialogue in the tourism industry

PROJECT YEAR FOUR WORK PLAN | 73 Activity 1. Re-think tourism industry: reformed policies and regulation to ensure sustainable development

In Y3, under MCP leadership, the tourism industry public and private sector stakeholders within the tourism industry joined around a common vision outlined in the White Paper for Tourism Industry Regulatory Reform (presented in June 2018). Both the Moldovan Minister of the Economy and Infrastructure, Mr. Chiril Gaburici, responsible for the tourism industry policies and regulations, as well as the private sector business associations endorsed the critical proposals within the White Paper aimed to generate a pro-entrepreneurship business environment and reduce the current significant barriers to entry for SMEs in the industry. Other recommendations within the White Paper included creating fiscal incentives like reducing VAT for tourism services from 20 percent to 8 percent which is in line with European best practices and establishing a fixed local tax for accommodation services. In Y4, MCP will provide assistance for the legislative drafting of these enabling reforms, as well as for developing a new strategic policy for the tourism industry development.

██ Sub-activity 1: Legal regulatory reform enactments in tourism legal framework In Y4, MCP will support the implementation of the White Paper recommendations to eliminate the regulatory inconsistencies and barriers to entry for new market participants. The White Paper findings will be addressed in a draft law initiative to amend the current tourism legal framework, including the Law 352/2006 on tourism industry activities, the Fiscal Code as well as other normative acts (Government decisions and Ministry orders). MCP will closely collaborate with the MoEI and the Agency for Investments to develop the necessary policy documents, launch business enabling initiatives, and ensure a strategic approach to regulatory reform. For this purpose, MCP will use local and international expertise to define the legal amendments including AmCham and EBA for subsequent promotion and adoption.

██ Sub-activity 2: A new strategic vision for Moldova’s tourism industry As a result of the White papers development, the MoEI requested MCPs assistance to develop a new strategic policy for the tourism industries development, to replace the obsolete `Tourism-2020 Strategy`, approved in 2014. MCP will engage local and international expertise to assist the public authorities and private sector associations to develop a strategic vision for sustainable and robust growth of the tourism industry. Pre-identified experts to engage include: Ms. Maia Sidamonidze, former director of the Georgian National Tourism Agency, who lead tourism reform back in 2012; Alex Crevar (for country promotion); Augusto Huescar (for marketing and trade); and Jack Delf (for product development). The updated strategy is expected to be adopted in 2019, barring any delays as a result of the upcoming parliamentary elections.

Activity 2. Strengthen private sector voice to balance public-private dialogue

In Y4 MCP will continue to support ANTRIM to become a leading inbound tourism organization within the local market, as well as a representative of Moldovan tourism abroad. The objective is to continue growing membership base, on one hand (currently counting 40 members), and be the leading organization in destination marketing and tourism legal reform, on the other hand. MCP will support ANTRIM to expand their collaborations with various local professional organizations (including the National Association of Guides, HoReCA Association, DMOs, ANTREC.). The ultimate goal is

74 | PROJECT YEAR FOUR WORK PLAN for ANTRIM to become a ‘Tourism service hub’ that will represent the tourism sector as a whole. As a result, it is anticipated that ANTRIM will become a trend-setter for the tourism industry and maintain close collaborations with the key players of the industry, therefore creating a united front in strengthening the public-private dialogue.

MCP approach in strengthening ANTRIM role in tourism industry

40 members, up from 6 in 2014 Moldova’s only business association supporting inbound and domestic travel R R R

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MCP TRIM T I

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MCP will assist ANTRIM to raise awareness about its institutional activities among members and industry players and position the organization internationally. MCP will also continue to support ANTRIM to organize industry-wide activities with the aim to attract new members and increase visibility among professionals including:

≡≡ Incoming Travel Forum (third edition) - a platform for discussion and collaboration amongst tourism industry stakeholders and an opportunity for professional development aimed at amplifying tourism industry development. Two successful editions were organized in 2017 and 2018, with great interest and attendance from the Moldovan tourism stakeholders.

≡≡ ANTRIM Volunteers Program - MCP’s skills gap analysis concluded that tourism program graduates have limited knowledge about local tourism attractions and critical tourism selling points. Therefore, MCP will assist ANTRIM to continue establishing collaborations with local universities to offer their students access to practical knowledge and the opportunity to discover local tourism attractions. ANTRIM will organize capacity building trainings for young professionals that will sign up to do their internship in ANTRIM or the Tourist Information Centre.

MCP will provide support to the 4th edition of the Tourism Gala (organized in 2018 by Moldova National Tourism Federation in partnership with MCP and ANTRIM), only if the stringent improvements to the organizational regulations are implemented, and leadership of the event is through the Agency for Investments in partnership with all relevant tourism industry business associations.

PROJECT YEAR FOUR WORK PLAN | 75 Photo APIUS credit: Alina Bradu DININIMA brand Photo caption: Details of blouse by

LIGHT INDUSTRY

76 | PROJECT YEAR FOUR WORK PLAN OBJECTIVE 1: INCREASED PRODUCTIVITY AND QUALITY (BETTER WORKFORCE AND ADOPTED INNOVATION)

Photo credit: Andrei Sochirca, MCP Photo caption: Production process in the OldCom shoes factory in Chisinau

PROGRAM 1. STRENGTHENING ZIPHOUSE AS THE FLAGSHIP INSTITUTION IN WORKFORCE DEVELOPMENT AND FASHION STARTUP ACCELERATION

Launched in late 2015, ZIPhouse was created to address challenges in industry education, promote fashion startups, as well as academia-industry collaboration. MCP considers ZIPhouse a flagship institution in workforce development and fashion startup acceleration, as ZIPhouse supports industry transition to higher value added by developing critical skills and abilities of the labor in fashion industry. The center was started with USAID support (CEED II) and is managed by the Technical University of Moldova with participation of APIUS, the fashion industry’s association.

As a grantee of MCP for light industry skills and entrepreneurship development, ZIPhouse brings now advanced technical education opportunities and acts as an accelerator for startups and community. In Y4, the overall objective for ZIPhouse is to strengthen its position as Moldova’s fashion community platform, enlarging its 4,000+ followers to 5500+, increasing the number of unique beneficiaries with 20% to 1,200 industry professionals, providing knowledge and collaborative support to 120+ unique private companies (or over 1/3 of light industry SMEs), elevating the quality of the educational system through 55+ trained university and college teachers, while ensuring constant upgrade of its programs. In Y4, professional trainings will range from technology topics, such as equipment maintenance, factory productivity and layout, pattern making, to fashion design fields, such as sustainable fashion, photography, merchandising, online sales. To educate global talent in Moldova, the Ziphouse Fashion Leadership Program

PROJECT YEAR FOUR WORK PLAN | 77 will run in its third iteration with long term courses in fashion design, marketing and business being attended by over 40 Moldovan business owners and professionals, at Italy’s top universities, Polimoda and Instituto Europeo de Design. The ZIPhouse’s Fashion Acceleration Program, that supported 24 emerging design talents during its 2017 and 2018 editions, will be further enhanced with ‘international market ice-breaker’ program and local popup shops to assist sales. Finally, Ziphouse will continue to charge small fees for its services to support operational costs, and contribute to educating the market and its sustainability.

Activity 1. Enhance ZIPhouse institutional capacity

Expected Outputs:

■■ ZIPhouse Activity Plan for 2018/2019 ■■ 10 students’ annual works done based developed and largely implemented on PBL collaboration between Technical ■■ Professional executive team formed of core University and private sector 4 members; applying competitive salaries ■■ ZIPhouse adhere to the European Creative with a performance-based system Hubs Network ■■ ZIPhouse Board of Mentors from the ■■ ZIPhouse new out-door space for private sector formed events set up

Expected Outcomes:

■■ Stronger connection between university ■■ ZIPhouse will strengthen its position as teaching staff and light industry companies a platform for empowering the fashion will lead to improved workforce community, creativity, collaboration, ■■ ZIPhouse will respond to the local fashion transformation, and startup industry needs

MCP aims to continuously focus on enhancing ZIPhouse institutional capacity and content development keeping the sustainability in mind. During Y3, MCP supported institutional strengthening by working closely with the ZIPhouse executive team and participating in ZIPhouse Board meetings. MCP contributed the consolidation of ZIPhouse team, overcoming main operational and organizational challenges. In Y4 MCP will continue to work closely with the institution to strengthen its institutional capacity and to ensure ZIPhouse reaches its goals as a flagship institution in workforce development and fashion startup acceleration.

MCP will continue to take active role in ZIPhouse long-term strategic development. One of the main goals is to ensure that ZIPhouse is managed by a proactive board, formed of private and academic sector representatives, which will guide the executive team for

78 | PROJECT YEAR FOUR WORK PLAN long-term strategic development. MCP will continue to provide support to ZIPhouse executive team in attracting other donors and partners, and gain stakeholders support. Based on Year 3 MCP efforts, ZIPhouse partnered with International Trade Centre (ITC) for workforce development in fashion industry and has been awarded a grant from British Embassy (56,000 Pounds) for enriched opportunities for women and youth from the fashion sector. These two grants will be accessed during Year 4 and aligned to MCP’s resources to support joint activities. MCP will consult ZIPhouse team in terms of key interventions and most impactful activities to be undertaken regarding the fashion industry development.

MCP main objectives for Y4 will be insuring:

■■ ZIPhouse continues to mature its 4 Programmatic Pillars and develops the fifth new pillar – Market Icebreaker, which will position ZIPhouse as a platform for identification of new names and talents, supporting their emergence on local and international market.

■■ ZIPhouse sets up the Activity Plan for 2018/2019, aligned to fashion industry needs ■■ ZIPhouse strengthens the partnership with APIUS, the private sector to come with tangible input in terms of education and workforce development needs, as well as to contribute to knowledge sharing and giving back to the industry, for instance, by engaging professionals as mentors for ZIPhouse residents and accelerated startups, implementation of Project Based Learning approach.

■■ ZIPhouse undertakes the role of a platform for discovering startups and new names, providing support for market penetration, both on local and international level.

■■ ZIPhouse connects to the global fashion network of experts, profile organization and similar accelerators or excellence centers, to become a leader in deployment of global development trends, such as sustainable fashion, smart textiles, and factory automation, which are critical for long-term industry competitiveness. Consolidating ZIPhouse infrastructure. MCP will contribute to the re-think of the ZIPhouse outdoor area, to make the hub more attractive and user friendly to its beneficiaries, and to respond to the creativity sector demand in terms of design and architecture. The new outdoor space for events will be set up engaging young architects, designers and students from Technical University of Moldova (TUM) within the ZIPUrban joint initiative between ZIPhouse and Chisinau FabLab, MCP supported makers space. In terms of content and inspiration resources, MCP will support ZIPhouse in supplying its literature library with additional professional books and latest publications from editorial leaders in fashion; and continuing subscription to WGSN, the world-leading trend authority, offering a comprehensive online forecasting and analysis resource with insight on consumer, fashion, and design trends.

MCP approaches ZIPhouse with sustainability in mind. Therefore, MCP requires ZIPhouse to (i) fully fund its core operational costs (from TUM budget and extra revenues); (ii) grow a professional executive team applying competitive salaries with an incentives mechanism; (iii) diversify revenue sources; and, (iv) attract partners, sponsors, funders.

PROJECT YEAR FOUR WORK PLAN | 79 Activity 2. Boost fashion creativity, startup and community building

Expected Outputs:

■■ 5500+ ZIPhouse community followers ■■ 10 startups helped to break the ice in sales, ■■ Reaching 1200+ unique beneficiaries (20% through at least 3 popup shops annual increase) ■■ 5 startups or young designers to participate ■■ 20% increase in the number of at international fashion events memberships sold during the year ■■ 40+ speakers/mentors involved, both local ■■ 10 startups accelerated and international, 25% of which with pro- bono contribution

Expected Outcomes:

■■ ZIPhouse will become the nodal point for ■■ ZIPhouse will connect local fashion industry fashion creativity, startups, and community with international fashion ■■ ZIPhouse will become the liaison between ■■ ZIPhouse will take the role of platform for fashion industry stakeholders, sub-clusters, identification of new names and talents, and other industries such as creative, ICT, supporting their emergence on local and and engineering international market

In Y4 MCP will continue to support ZIPhouse build the emerging fashion community and to promote fashion entrepreneurship. Additionally, MCP will support ZIPhouse to extend the area of intervention and to become the meeting point between different creative disciplines, contexts and experts. The overall objective for ZIPhouse is to strengthen its position as Moldova’s fashion community platform, enlarging its 4,000+ followers to 5500+, increasing the number of unique beneficiaries with 20%, providing knowledge and collaborative support to 120+ unique private companies, elevating the quality of the educational system through 55+ trained teachers, while ensuring constant upgrade of its programs.

MCP will promote an intensive approach more than an extensive one, meaning ZIPhouse will aim to ensure dynamism and engagement for the community that has been created around the center. The following principles will guide ZIPhouse’s programmatic pillar for Community, Creativity, Startup, and Market penetration:

■■ strengthen collaboration between various community groups, such as young designers, students, emerging brands, academia, private sector, APIUS, ZIPhouse, and other creative industries players ■■ connect with international organizations and experts bringing global trends, innovation and advanced knowledge ■■ grow local expertise and promote giving back to community ■■ stimulate creativity and idea generation through competition ■■ facilitate debut of fashion startups and young designers on the regional and international arena ■■ empower collaboration between the creative sectors of the fashion cluster, such as photography, merchandising, design, illustration, art ■■ connect fashion to other industries such as ICT and engineering, to stimulate innovation, digitalization and fashion-tech collaboration

80 | PROJECT YEAR FOUR WORK PLAN Photo credit: ZIPhouse Photo credit: ZIPhouse Photo caption: USAID Mission Director Karen Hilliard Photo caption: The winning collection of Ekaterina and Rector of the Academy of Music, Theatre and Fine Verbitcaia on the open-air catwalk on the main street of Arts, Victoria Melnic award the first prize at the Young Chisinau, May 30, 2018 Designers Competition, May 30, 2018

The following events are being planned for Year 4, majority of which were conceptualized and tested out during previous years:

■■ Acceleration Program for at least 10 startups. During the 6-month program, startups will receive tailored consultancy and support in business model improvements, brand building, local market access, design and product improvement, and basic financial, legal and business knowledge. The accelerator will be extended to fashion, fashion tech, lifestyle and other cross sector areas. All knowledge events will be opened to accelerated startups, residents and other interested fashion startups, micro and small companies. ■■ Young Designers popup shops are cost effective solutions for startups and young designers to test the product, understand the client and break the ice for sales without heavy investments in retail. ■■ Headline contest for young fashion designers to be organized annually by ZIPhouse to enlist talented, creative young designers ■■ Emerging young designers on international market. MCP will provide individual support to startups and young designers to participate at international fashion events such as competitions, popups, fashion weeks, trunck shows etc. ■■ 4 Challenge based contests and cross-activities with creative industries on topics such as Fashion Design, Visual Merchandising, Fashion Photography, Fashion Tech etc. ■■ Moldova in Fashion Conference (3rd edition) to become annual key event for Moldova’s fashion industry. The conference presents global fashion industry trends and challenges, development and effective integration of technology, and fashion business development topics. It seeks to break the barriers, drive innovation and visionary changes, and to foster industry development at all levels. ■■ 20+ Community-building events, e.g. fashion-related public talks, meet-ups, trendsetter events, experience exchange talks, and webinar viewing.

PROJECT YEAR FOUR WORK PLAN | 81 Activity 3. Develop industry skills through quality advanced technical education and training

Expected Outputs:

■■ 20+ technical trainings for professionals, of ■■ Reaching 35+ academic staff receiving which 30% with MCP financial support training (16% annual increase) ■■ 400+ participants ■■ 30 professionals benefiting of Fashion ■■ Reaching 100+ unique private companies Leadership Program receiving advanced technical training (25% ■■ 10 trainers forming the pool of local annual increase) expertise at ZIPhouse

Expected Outcomes:

■■ ZIPhouse will become a training resource ■■ Enhanced skills and abilities of local for the industry, building knowledge in specialists product quality, efficiency, and fashion ■■ ZIPhouse will facilitate emergence of new management, which are critical for shift to generation of skilled professionals and value added business models students

Better education and training is required to support the industry’s transition to higher value added. ZIPhouse addresses skills gaps in qualified labor, such as designers, pattern makers, supervisors, management, marketing, and sales. Fashion Leadership Program and ZIPhouse Fashion Academy are ZIPhouse branded educational pillars developed with MCP support. These Programs directly influence the quality of the workforce and bring added value to the production process. In Y4 MCP will continue to help ZIPhouse supply quality practical technical education for industry professionals. MCP will ensure that ZIPhouse develops a training calendar through a refreshed needs-assessment of private companies.

Photo credit: Ion Ples Alexandru Photo caption: Public exhibition of the window’s designs at the ZIPhouse Windows Display Contest 2018

82 | PROJECT YEAR FOUR WORK PLAN Photo credit: Ana Maria Moroz, MCP Photo caption: Production unit at the Sekana apparel factory in Ciorescu village

PROGRAM 2. SMART (STREAMLINE MANUFACTURING, ACCOUNTABILITY, RESOURCE EFFICIENCY, AND TRANSPARENCY) FACTORY PROGRAM

The competitive advantages of light industry are found by concentrating attention on quality and design, innovation and technology, productivity and efficiency and products with high added value. One of the main objectives of MCP for Y4 is to continue to introduce SMART Program elements in the Moldovan apparel industry and continue to support factories on broad areas which are intrinsically linked – design, productivity, resource efficiency, social standards, and transparency to become more competitive. So, the project will focus and concentrate on identifying the real issues, taking corrective actions suited to the specific industrial center of the unit, empowering the technical and managerial staff by enhancing their knowledge and ability, analyzing orders efficiently and deciding whether actions are viable for the company.

The SMART factory program demonstrated that higher production line productivity leads to high value manufacturing and a better skilled workforce that enjoy higher salaries by 10-25% and quality of living. It also triggered important investments in factories worth an estimated $710,000 USD during Y1-3 for upgrading of equipment, implementing technology innovations, such as computer added design and automated cutting.

MCP’s approach for Y4 is to deepen assistance with selected SME champions (about 35 firms), committed to improve factory efficiency and product quality, by engaging productivity and efficiency, design and pattern making experts. Assistance will be provided in implementation of Lean Management tools, which will allow to operational and cost efficiency through eliminating time loss, excessive raw material inputs and preventable defects, reducing lead and cycle times, reducing inventory levels at every stage of production, improving workforce productivity, optimizing use of equipment and space.

PROJECT YEAR FOUR WORK PLAN | 83 The apparel industry producers benefiting from the SMART program represent over 10% of the total Moldovan apparel production, therefore it is important to continue strengthening the manufacturing. Since accountability and transparency today are the basic requirements advanced by foreign clients, the project will pay a special attention to the implementation of integrated Quality Management System, which will ensure workplace conditions in accordance with human rights, ILO conventions and national labor law. MCP plans to have at the end of the project at least 15 ISO and/or OHSAS certified companies, which will serve as an example for other companies, on the one hand, and on the other will raise credibility of Moldovan Light Industry for foreign partners.

In addition, MCP will continue its “flying designers” program, where international designers and pattern makers help align local designs with global color and style trends, and fabrics. Local design expertise will be identified and matched with manufacturers to create in-house design talent. Existing beneficiaries will be monitored for progress, and new companies will be added into the program, especially companies that design, produce and sale under their own label children wear.

SMART Factory Program in figures, Y4 goals 33 apparel and footwear manufacturers, employing over 2,500 women, will be assisted to raise productivity, international quality and social compliance, design and sourcing

Assistance areas

S 35 10

31 12

S ISO 5 4

43 6

■■ Higher wages, up 15% ■■ More exports, up 10% ■■ Increased factory productivity, up 10% ≡≡ Better work conditions and wages for employees ≡≡ Secured orders and jobs ≡≡ Higher end product quality Growing factory investments as a result of higher productivity SMART SMART IMPACT: ≡≡

84 | PROJECT YEAR FOUR WORK PLAN SMRT TOR RORM

I M

S M R

M

M R SI

TR

Activity 1. Implement complex innovative methods to Streamline Manufacturing and productivity growth

Expected Outputs:

■■ 33 assisted companies with an estimated ■■ Average productivity growth by 10-15 2500 employees (six in productivity percent in assisted companies enhancement program, four in social audit ■■ Increased sales/exports by more than 10% and implementation of Integrated Quality ■■ Increased investment in fixed assets by 5% Management System, 10 in flying design program, 2 in pattern design, 10 in sourcing) ■■ Increased wages by more than 15%

Expected Outcomes:

■■ Increased factory efficiency and productivity ■■ Reduction of Lead and output time ■■ Upgraded practices to higher value-added ■■ Reduction of Working in Progress manufacturing ■■ Substantial improvement in product quality

PROJECT YEAR FOUR WORK PLAN | 85 ██ Sub-activity 1. Streamline Manufacturing and productivity growth In Years 1-3 MCP supported in-house consultancy on productivity enhancement for 43 apparel companies by engaging international productivity experts. Manufacturing improvements resulting from MCP’s SMART program investment led to an average 15 -20 percent increase in productivity, new jobs, and higher salaries.

To deepen assistance and create a core of progressive SMEs, an additional pool of 6 companies will be assisted. The companies will be selected by APIUS through a public call and based on commitment to make changes.

MCP will continue the win-win partnership with Senior Expert Service, a German Government program, bringing pro-bono expertise, thus leveraging resources. As such, MCP will continue to engage the two SES experts who successfully worked with us during 2018: Eva Hillers with over 40 years of pattern-making experience and Irmagard Guse. SES experts will be paired with MCP’s local consultant, productivity expert Demian Usanli. “Before” and ‘after’ data will be used to capture firm-level impact. The main areas of assistance will include:

■■ implementation of different tools of Lean Management and industrial engineering in light industry production, ■■ review of techniques for internal correction and openness for a knowledge/technology approach that will be built into the mind of the companies, which will upgrade as system run, rather than people run.

██ Sub-activity 2. Implement innovative technological solutions (October 2017 – July 2018) Taking into consideration that innovation by including new technology, organizational methods and their practical implementation is the key of competition in the future economy and the durable and sustainable profit level of a company, in Y2 and Y3 MCP supported 16 light industry companies to implement new technologies, leading to investment which improved product quality, manufacturing efficiency, and creating new jobs. These complements and strengthens the technical assistance in knowledge and know-how, contributing to factory growth and better paid jobs.

In Y4, MCP will focus supporting these SMEs to introduce the innovative technologies branching out to better quality, new products or certain software in manufacturing and computerized pattern design and machines that will allow automation of operations and increased productivity. In addition, additional technological endowments will be considered for other SMEs, through the small grants facility and technical assistance. To drive industry knowledge, MCP jointly with APIUS will assist Moldovan factories to visit TExprocess, the leading international trade fair for the latest machines, plants, processes and services for garment manufacturers, taking place in Frankfurt, May 14-17, 2019. Finally, two study trips to Romania are planned in Y4 to visit progressive manufacturers in apparel and footwear for knowledge and best practice sharing.

Photo credit: APIUS Photo caption: Details of skirt by Alina Bradu DININIMA brand

86 | PROJECT YEAR FOUR WORK PLAN ██ Sub-activity 3. Support factories to implement international social compliance and production standards (October 2018 – September 2019)

In the apparel industry, conforming to recognized standards of production is one of the most important steps to produce high-quality products while achieving production goals and maximizing profits.

15 Apparel Firms ISO9001 & OHSAS certified by 2020, with MCP assistance, raising quality and social responsibility

In Years 2 and 3, MCP assisted 5 large factories to implement international social compliance and production standards, ensuring improved safety, working conditions, and efficiency. Factories implemented Integrated Quality Management Systems (ISO), focusing on Occupational Health and Safety Management System (OHSAS 18001:2007) and quality assurance. For those companies this change translated into secured orders from their foreign clients, such as Ionel factory that secured over 2,5 million USD or 45% of its turnover by French client due to social compliance certification. In addition, this also means better working conditions for the 1375 women employed in these 5 factories.

Since accountability and transparency are the basic requirements advanced by foreign clients, MCP will continue to pay a special attention to the implementation of integrated Quality Management System according to the requirements of international standards:

■■ ISO 9001: 2015 (quality management); ■■ ISO 45001: 2018 (Occupational health and safety management systems), which replaced OHSAS 18001 and which will help organizations to provide a safe and healthy work environment for workers and ensure workplace conditions in accordance with human rights, ILO conventions and national labor law.

In Y4, MCP plans to expand assistance to additional 5 factories, targeting those that employ 100 people or more, and are export oriented. The end goal is to have about 15 certified factories by 2020, so as to create critical mass in the industry and transpose this quality image to export markets.

MCP will engage local consultants for in-factory consultancy to implement the required quality standards and prepare for the third-party certification (See Stages 1-3 from Chart below). Where possible, co- funding with the EBRD-BAS, World Bank Competitiveness Program, and other donors working on quality systems will be encouraged. MCP will also require cost-share by the beneficiary firm, of at least 50% of the certification costs, averaging 2,000-3,000 USD. The average timeframe to assess, prepare and certify a firm is about 6-8 months.

PROJECT YEAR FOUR WORK PLAN | 87 Certification Lifecycle – ISO and OHSAS

S S S S

I I 2 weeks 2-4 weeks 4-6 weeks 8 -10 weeks

Activity 2. Create brands and products aligned with fashion trends

Expected Outputs:

■■ 10 assisted companies which produce own ■■ Increased knowledge and abilities of 10 local fashion brands designers and pattern makers ■■ Increased sales by at least 10 percent ■■ Increased exports by approximately 7 percent

Expected Outcomes:

■■ Improved product quality due to enhanced ■■ Upgraded practices to higher value-added business knowledge and abilities to manufacturing create seasonal collections in line with international fashion and design trends, as well as access to better-quality textiles and accessories

██ Sub-activity 1. Implement ‘Flying designers’ program to streamline fashion products through strengthening design skills within own-brand fashion companies (November 2018 – August 2019)

To support Moldovan manufacturers that create original designs, produce and sell under their own label, MCP developed a tailored ‘Flying Designers’ Program, through which international designers provide multiple, intermittent consultancies with Moldovan factories with the goal of improving designers’ skills and helping firms develop better collections. Today, more Moldovan manufacturers are deciding to create original designs, though many lack the sophistication and finishing that distinguish a professional and high- quality design. Due to long reliance of Moldovan footwear companies on providing C&M services, they lack experience in design. During Y1-3, MCP assisted 29 firms, including 5 start-ups to improve product design, resulting in their collections showcased in domestic shops and in premiere overseas (Romanian, UK, US, France and Kazakhstan), supporting sales growth.

In Y4 MCP will continue the “flying designers” program with a pool of 10 firms (both ongoing and new candidates), focusing on handbags and footwear, children wear, as well as startup and early-stage manufacturers. This will complement the apparel focus in earlier years, ensuring the full range of fashion products. MCP’s ‘Flying Designers’ includes Luisa Fasio, an Italian leather accessories designer with over 15 years of experience; Kelly de Noiyer, designer for clothes with more than 10 years’ experience on international markets and Juana Hustinx, a freelancer designer, focusing on children wear design, owner of kids’ brand Meet Mama in Netherland.

88 | PROJECT YEAR FOUR WORK PLAN The following design aspects will be tackled during the assistance:

■■ analyzing the sales of previous collections; ■■ advising, where appropriate, to shift business model from Fast fashion to Slow fashion; ■■ advising to increase the value of the collection (Improvements to construction, patterns and adding finishing details); ■■ Elevating Finishes: Clean baby hems, French seams, matching linings and same color tone thread especially in Embroidery designs; ■■ Creating the Collection Structure and Line Sheets: create unified collections; ■■ Prototypes evaluation before launching the production. Credit: Luisa Fasio Design of the Arilu Backpack

Photo credit: Andrei Sochirca, MCP Photo caption: Marketing and design section of the OldCom shoes factory in Chisinau

██ Sub-activity 2. Improve pattern design techniques and grading for light industry companies (May – July 2019)

Taking into consideration that patternmaking is one of the most important processes in the apparel value chain, because it ensures proper inclusion of designer ideas in the product and a proper fit, in Y3 the pattern maker specialist from Senior Expert Service (SES) Germany helped 5 apparel companies and 5 start-ups in pattern making. The international specialist enhanced knowledge of local Moldovan construction engineers through training on the job, with focus on best practices in pattern making and grading for women’s and children’s wear.

To achieve sustainability in Y4, MCP will continue technical assistance in pattern making and grading in partnership with SES Germany. SES pattern making specialist, Eva Hillers, will return to Moldova for an on-site consultancy with more mature 2 apparel companies that engage original design and brand manufacturing, as well as will assist a local pattern design firm that services 48 Moldovan manufacturers. The consultant will teach these how to correctly prepare/adjust the commercial patterns, which include fashions

PROJECT YEAR FOUR WORK PLAN | 89 in current trend designed to fit certain sizes and will explain the contents of patterns (margins, cutting line, stitching line, fold line, construction details, graceful curves and shapes, pattern size and particularities, such as front, back, sleeve, collar, and cuff). New companies for assistance will be selected by APIUS through a public call.

██ Sub-activity 3. Strengthen factory sourcing skills for building higher value added Thanks to the support provided by MCP today, several enterprises from the light industry supply high quality raw materials and accessories from Italy, France and Dubai. In Y4, MCP will continue its assistance to strengthen sourcing skills with the goal of having industry stakeholders embrace this as a permanent practice by organizing visits to the following sourcing events:

■■ International Premier Vision and Texworld fabric and accessories trade fairs, France: focus on emerging and small apparel manufacturers ■■ Textile stock warehouses in Italy and Dubai ■■ LINEAPELLE (International Exhibition of Leathers, Accessories, Components, Synthetic Products and Models for Footwear, Leather Goods, Leatherwear and Furnishing) in Italy: focus on footwear and handbags producers ■■ AYSAF (Istanbul International Exhibition for Footwear Materials, Components, Leather and Technologies) in Turkey: focus on footwear and handbag producers MCP will expand this program to emerging and new designers, while requiring cost-share from the more established beneficiaries.

Photo credit: MCP Photo caption: Kelly Denoir consulting Elena Zbirnea, designer of Sophie brand under the Flying Designers Program

90 | PROJECT YEAR FOUR WORK PLAN OBJECTIVE 2: EXPANDED MARKET LINKAGES

Photo credit: Sirghi Vadim, Vistline Photo caption: Vistline brand exhibiting at Next Season, Bucharest, Romania 2018

PROGRAM 3. EXPANDING MARKET OPPORTUNITIES

This program aims to offer marketing opportunities for Moldovan producers, to increase sales, and develop exports. MCP seeks to diversify and expand presence and sales of local manufacturers on both local and international markets. Thus, the program has two components:

≡≡ On the international level its objectives are to raise the profile of the Moldovan light industry on the global market as a full product manufacturing partner and to build recognition of Moldovan fashion brands on regional markets; ≡≡ On the domestic level the program aims to cultivate the pride to wear local which will stimulate local brand consumption versus imported products.

Through this program, MCP supports the participation of Moldovan fashion SMEs at leading international exhibitions, B2B events, fashion shows and other relevant trade events. MCP also looks at other opportunities to find new key customers and generate business, such as connecting the Moldovan light industry to global networks and database, searching for international agents and distributors, as well as providing support to penetrate new markets through company-level efforts.

In Y3 Moldovan Fashion brands through participation at international exhibitions achieved good results. They signed export contracts worth a total of $ 2,568,000. This encourage MCP to remain focused on supporting exports of higher value-added contract manufacturing and Moldovan-branded fashion products. As such, the project will assist continuous focus participation in tradeshows in EU (France and Germany for contract manufacturing), as well as in Italy, Kazakhstan, Ukraine, and Romania for sale of Moldovan fashion branded products. Two new markets, tested out in 2017-18, namely UK and US, will be further explored. Overall MCP will align resources with Investment Agency (MIEPO successor) and participating firms. MCP will also continue to build the

PROJECT YEAR FOUR WORK PLAN | 91 capacity of the Employers Association of the Light Industry (APIUS) to serve as a trade development facilitator for the industry by organizing tradeshow participation, linking foreign buyers to Moldovan manufacturers, researching potential buyers, and hosting buyer missions. All MCP trade support for the light industry is channeled through APIUS via a multi-year grant, contributing to strategic and coordinated marketing, sustainability and institutional capacity building. The overall goal is to have about 35-40 firms to participate at 18 international tradeshows twice a year, growing exports by at least 8 percent.

On the local market, MCP supports raising the industry’s profile and boosting consumer pride in wearing clothing made in Moldova by enhancing the power of the umbrella brand Din Inima: Branduri de Moldova (From the Heart — Brands of Moldova). MCP supports joint marketing campaigns to raise industry profile and awareness and stimulates joint retail initiatives. These are conducted twice per year, for the spring-summer and fall-winter season. While shifting the structure of the industry towards value-added, MCP will continue to assist companies from fashion industry to build stronger own brands on local and export markets, and to increase the number of manufacturers producing under own brand and joining the Din Inima initiative. There are currently about 60 Moldovan brands under the Din Inima initiative. In Y4, MCP will continuously support the DInINima multi-brand shops (with a new shop being planned in Chisinau), assist in successful and professional organization of the flagship Moldova Fashion Days (fall and spring editions; with the goal of expanding the participating brands, inviting foreign designers and organizing satellite events to the main catwalk show), and re-formating the local B2C and B2B Moldova Fashion Expo (with the view to bring more regional buyers from Kazahstan, Romania, Spain, UK; and increase attractiveness of this tradeshow through a new image, reconfigured space to separate mainstream fashion from designer labels, and better designed booths).

Activity 1. Reposition Moldova as a Full Product Manufacturing Partner and Support Internationalization of Moldovan Fashion Brands in Regional Markets

Expected Outputs:

■■ 35 assisted companies to participate at 18 ■■ 20 new clients international tradeshows twice a year ■■ Increased sales by approximately 10 percent ■■ 3,000 new contacts ■■ Increased exports by more than 8 percent

Expected Outcomes:

■■ Moldovan suppliers positioned as ■■ Diversified networks to export markets manufacturers of high value services for ■■ International recognition of Moldovan European customers fashion brands on regional markets

92 | PROJECT YEAR FOUR WORK PLAN ██ Sub-activity 1. Grow exports through showcasing at major tradeshows Due to exciting multi-channel and internet-based communication, the need for personal interaction has never been more important. Therefore, it is of significant value to meet with clients and future customers in person, building relationships and trust with clients. Being involved in a trade show or exhibition provides with opportunities to branch out to business-to-business trading and create a customer database from the visitors at the booth. During Y3, MCP has built on these successes, supporting the most important tradeshows for both manufacturing sourcing and “ready to show” original designs and labels. Some tradeshows were jointly funded with MIEPO and manufacturers. Priority has given to group attendance by multiple companies under the common booth, although in the case of niche products, such as specialty shoes, lingerie or accessories, individual participation was assisted.

In Y 4 MCP will continue its trade assistance, using the same principles and marketing plans jointly updated with industry stakeholders. During Aug-Sept, major markets and trade events will be validated with industry stakeholders via APIUS. To ensure wide firm inclusion and encourage cost-share, MCP and APIUS agreed on a ceiling of 2,500 USD per trade show per firm, with a cumulated annual assistance of 7,500 USD per firm. This would constitute about 50 percent of the average participation cost for a trade show, the rest being cost shared by the participating firm.

Strategic markets and trade events for International Trade Promotion Plan for 2018-2019 Light Industry, 2019 ■■ Regional markets. Moldovan original brands will showcase at trade shows in regional markets, MAIN REGIONAL MARKETS, FOR namely Kazakhstan (where many companies MOLDOVAN BRANDED FASHION started exporting), Ukraine (remaining a top PRODUCTS market for Moldovan and Transnistria footwear, despite the crisis), as well as in Romania (new 1. NEXT SEASON, Bucharest, Romania market being tested by a couple of apparel and (apparel and accessories) footwear brands). These markets were defined as 2. GHID MARIAJ, Iasi, Romania (bridal and a priority because they are open to new brands, evening wear) Moldovan designers understand consumer preferences and styles and the Moldovan product 3. GHIDUL MIRESEI, Bucharest, Romania is price and quality competitive. (bridal and evening wear) 4. FASHION KIEV, Kiev, Ukraine (women ■■ Manufacturing services sourcing tradeshows. wear) For Moldovan manufacturers which provide 5. Baby Fashion Kiev, Ukraine (kids wear) services for foreign clients the focus will be on 6. LEATHER&SHOES, Kiev, Ukraine (footwear) EU customers that are the main manufacturing trade partners for Moldova, particularly France, 7. LIVIV FOOTVEAR, Lviv, Ukraine (footwear) Italy, UK, and Germany. MCP will focus on value 8. CENTRAL ASIA FASHION, Almaty, added manufacturing and work with participating Kazakhstan (women, lingerie and Moldovan manufacturers through its productivity accessories) and efficiency coaching programs to develop their 9. KIDS FASHION, Almaty, Kazakhstan (kids capacity for additional services, such as trimming, wear) sourcing fabrics, logistics, etc. SOURCING TRADESHOWS IN EU FOR ■■ Niche markets and products. MCP will APPAREL MANUFACTURING SERVICES continue working with niche producers, namely fashion accessory companies, specializing 10. Premier Vision Manufacturing, Paris, France in handmade textiles and beads. Continued (apparel manufacturing) assistance will be provided for exhibiting in 11. Pure London (private label and branded Bijorca in France which generated many leads apparel)

PROJECT YEAR FOUR WORK PLAN | 93 and trial orders during 2015-2018, and Homi in Italy, a new tradeshow for Moldovan brands. MCP NICHE MARKETS AND PRODUCTS will provide tailored support for bridal segment, by assisting local brands to showcase in Romania. 12. Scoop, London, UK (apparel brands) MCP will seek to enlarge the bridal segment. 13. Strasburg Printemps (designer wear) 14. Who’s Next, London, UK (apparel brands) ■■ International fashion weeks for designer wear. For young and emerging fashion designers, MCP 15. Bijorca, Paris (accessories) will support participation in international fashion 16. Homi, Italy (accessories) weeks, such as Paris, Milan, Bucharest, Kiev and other. This activity was done in Y3 and will be INTERNATIONAL FASHION WEEKS FOR expanded. Participation in fashion weeks can DESIGNER WEAR generate immediate sales, as well as helps build 17. USA Show rooms, L.A. area (women wear brand recognition and trust in the participating and handbags) designers, and the Moldovan fashion industry as a whole. 18. International Fashion Weeks in Strasbourg, Paris, Bucharest, Kiev

██ Sub-activity 2. Support companies to penetrate new markets through company-level efforts

MCP will work individually with companies in their export marketing efforts. In Y4, assistance is envisioned for at least three companies for penetrating regional markets (Romania), as well as US. Given the cultural affinities, customer preferences, and developed economic and political relationships, Romania presents good potential for market expansion. MCP will consider supporting mature companies in developing a franchise model, opening new retail, and undertaking marketing campaigns.

Photo credit: Georgeta Mir Photo caption: Georgette brand exposing at Scoop International Fashion Show in at the Saatchi Gallery, London

94 | PROJECT YEAR FOUR WORK PLAN Activity 2. Consolidate the Din Inima Umbrella Brand and Expand Domestic Market

Expected Outputs:

■■ 65+ brands acting jointly under Din Inima ■■ More than 40 brands to showcase collections common brand at Moldova Fashion Days biannual event, and its ■■ 40 + local brands participating at joint other satellite events campaigns ■■ Emergence of online sales channel with at least ■■ Increased sales on the local market by 8 Moldovan local brands approximately 10 percent

Expected Outcomes:

■■ Improved image of the local brands and ■■ Online retail as an innovative solution to enhanced consumer perception increase sales used by local brands ■■ Cooperation valued over competition ■■ New promotional instruments absorbed by among local companies the local companies ■■ Deeper understanding of the efficiency of ■■ Enlarged and improved concept for multi-brand store Moldovan Fashion Days with stronger organizational capacity

Raising industry profile and awareness on the local market. MCP will support raising the industry’s profile and boosting consumer pride in wearing clothing made in Moldova by enhancing the power of the umbrella brand Din Inima: Branduri de Moldova (From the Heart — Brands of Moldova). The Din Inima initiative has contributed to valuable gains for the industry, sales growth, and retail market expansion, serving as a credible, singular identity for the domestic fashion brands.

In Y4 MCP will continue to support APIUS in promoting the local brand consumption by implementing Din Inima communication and advertising campaigns to raise industry profile and awareness. MCP will support Din Inima ownership by APIUS and its members, acting as a facilitator and coach. MCP will help APIUS to develop a structured “Din Inima” brand communication, to cover various types of products (apparel, footwear, accessories, bridal etc.) and diversity of customer profile segments. A Promotion Action Plan for 2018/2019 will be developed by APIUS with MCP support, including indoor and outdoor media promotion, PR and social media, fashion events. The goal is to connect more than 40 local brands through joint promotional campaigns.

With APIUS leading and companies making financial contributions, the role of MCP is to encourage collaboration and introduction of innovative promotional activities, such as the Din Inima stand at local fairs, pop-up shops (a new global trend in fashion retail), charity fares. MCP will promote also the integration of local fashion in public events which promote consumption of local goods and services, such as touristic, wine friendly, gastronomic and cultural festivals etc.

Growing on domestic market through common multi-brand stores under the Din Inima umbrella identity. MCP will continue its assistance with a focus on joint retail under the Din Inima identity. Fashion manufacturers must learn to achieve success in the local market by promoting their original designs and labeled products. MCP promotes new knowledge and skills on visual merchandising and better understanding of retail sales model. MCP will continue to support APIUS to raise awareness of the flagship common stores of the fashion industry through advertising campaigns and fashion events, hosted by the joint stores.

PROJECT YEAR FOUR WORK PLAN | 95 Previously, MCP supported the launch a common store in downtown Chisinau that became a flagship Din Inima shop given its contemporary design, professional merchandising, decorated windows, and high-quality collections. Later, encouraged and supported by MCP, the largest common retail space under the Din Inima identity, was opened at UNIC commercial center, accounting 2,000 square meters, and gathering around 40 producers. Din Inima Store in the Zorile shopping mall, on 1,100 square meters, presents 29 local brands under the Din Inima logo. The market research on Din Inima showed that the common brand brings confidence to customers regarding the quality of the product and acts as a reliable mark. Din Inima gives a singular identity for the shops, helping its recognition among consumers.

Developing Moldova Fashion Days as the key fashion event. Building on the Fashion Walks, which have elevated Moldovan fashion industry in the eyes of consumers, MCP helped APIUS launch the concept of Moldovan Fashion Days (MDF) in Y1, as a bi-annual keynote fashion event of Moldova. MCP goal is to enlarge the concept of MFD to a platform for exposure of Moldovan designers to domestic buyers and media and give an opportunity to promising designers to mark their arrival in the fashion industry. Expanding Moldovan Fashion Days will include additional satellite events, such as community fashion shows with non-professional models (Fashion Soiree), popup shops, and other events for fashion followers. MCP stimulates the collaboration between ZIPhouse and APIUS, MFD becoming a platform for new designers’ entry on the local market. MCP will facilitate conceptual improvements in the FashionExpo organized by the state organization MoldExpo annually and will support MFD to organize a professional catwalk during the show. In premier MCP will support international buyers’ visits to the MFD catwalks, to promote local brands and to facilitate sales. To ensure sustainability, MCP encourages MFD as a PPP primarily funded through participation fees, tickets, and a central part of APIUS’ fund-raising efforts. The Fashion Days key events will be organized in March and September of 2019, aiming to showcase 30+ brands in each edition.

Exploring online fashion retailing as new domestic and export trade channel. The online fashion segment is the most dynamic worldwide with the highest rate of online sales versus sales in brick-and-mortar stores. E-commerce requires certain knowledge and high implementation costs, making it affordable only to large firms. Few Moldovan brands currently sell online domestically or abroad. This is due to lack of online operators and aggregator websites. In Y3, to provide equal opportunities to all Moldovan brands, MCP awarded a grant to a local business provider that committed to develop a common online shop for local products, co-branded Din Inima. The company will have to undertake full management of the online shop, including content building, quality of display, logistics, online payments, marketing, and communication. MCP will continue to assist the grantee and will insure launch of the online shop in October 2018, with minimum 8 local brands exposed on the platform.

Photo credit: MCP Photo caption Ambassador of Sweden Signe Burgstaller visiting Vitalie Burlacu factory, MCP beneficiary

96 | PROJECT YEAR FOUR WORK PLAN OBJECTIVE 3: IMPROVED SECTOR-ENABLING ENVIRONMENT AND INCREASED CAPACITY

Photo credit: Andrei Sochirca, MCP Photo caption: Working process an the production section of the OldCom shoes factory

Activity 1. Assist APIUS to Become a Strong Professional and Industry Association

Expected Outputs:

■■ 90% of membership dues paid ■■ 115 members

Expected Outcomes:

■■ Increased APIUS role and value to its ■■ Stronger industry-level coordination and members collaboration

MCP gets involved and contributes significantly to strengthening APIUS capacity as an organization since it is viewed as the key counterpart and exit strategy for MCP’s work in the fashion industry. In Year 4 MCP will continue to build the capacity of the Employers Association of the Light Industry (APIUS) to be the driving force of the industry and to serve as a trade development facilitator for the industry. by organizing tradeshow participation.

PROJECT YEAR FOUR WORK PLAN | 97 Table. APIUS institutional goals and MCP support in Year IV

Firming APIUS’s strategic ■■ development of a 2 years Strategic Plan and 2019 Activity vison on light industry Plan and presentation to the industry and stakeholders development and ■■ annual increase of members by 5 medium or large strengthening APIUS role as a companies, including companies with foreign investments driving force of the industry ■■ defining and implementing lobbying and advocacy agenda, with focus on 2 most stringent regulatory constraints ■■ signing Memorandums and setting collaborations with important stakeholders such as Agency for Investments, EBRD

APIUS being the nodal point ■■ APIUS to be the leader for the light industry export for export initiatives strategy, insuring all stakeholders share a common vision ■■ APIUS to funnel the resources from donors and supportive organizations to address target markets ■■ focusing on target markets such as Romania, Ukraine, Kazahstan, Europe and testing new markets such as US, East Asia ■■ APIUS to manage a total budget of $180,000 in export promotion, available within the Grant awarded by MCP to APIUS; 30 + editions of international exhibitions and fairs, with 35+ unique companies to attend ■■ linking foreign buyers to Moldovan manufacturers, researching potential buyers, and hosting buyer missions

APIUS taking leadership ■■ implementation of the DININIMA communication strategy in market penetration & ■■ execution of the PR&Communication Action plan for promotion activities under DININIMA the domestic market, in total value of $50,000 DININIMA umbrella brand (biannual advertising campaigns; 10+ fashion events; integration in 6+ local fairs; ongoing DININIMA notoriety PR campaigns) ■■ organization of 2 editions of Moldova Fashion Days, with satellite events ■■ management of the existing DININIMA common stores ■■ opening of one new common space under DININIMA umbrella

Strengthening APIUS ■■ growing the involvement and decision-making capacity of institutional capacity the APIUS Board, which includes Councils for sub-activities ■■ insuring 90% collection of membership fees ■■ development of a plan of activities to generate revenues ■■ implementing a motivational payroll system ■■ insuring the compulsory set of procedures, manuals and guides, including procurements, human resources

98 | PROJECT YEAR FOUR WORK PLAN Photo credit: Ion Savin by ATIC Ion Savin by Photo credit: August 2018 Summer Camp for teachers, Photo caption: Robotics

INFORMATION TECHNOLOGY, ENGINEERING AND CREATIVE SERVICES

PROJECT YEAR FOUR WORK PLAN | 99 OBJECTIVE 1: INCREASED PRODUCTIVITY AND QUALITY (BETTER WORKFORCE AND ADOPTED INNOVATION)

Photo credit: Ion Savin by ATIC Photo caption: Robotics Summer Camp for teachers, August 2018

PROGRAM 1: PROMOTING STEAM11 EDUCATION AND CAREERS

Industry strength and competitiveness is dependent on human capital. Moldova faces a considerable shortage of skills, with thousands of coders and engineers in demand, both today and in the future. MCP works to raise the profile of Science, Technology, Engineering, Arts and Math (STEAM) subjects and introduce digital innovations in education to prepare youth for careers most in demand in the 21st century. MCP engages industry leaders, such as Orange Telecom and Lego, in game-changing educational partnerships, bringing market-driven technologies to schools, such as coding, robotics and 3D printing. These partnerships bridge the digital divide between rural and urban youth, and promote tech careers to students.

MCP promotes STEAM education through the flagship initiatives: Future Classroom Labs (FCL) and Educational Robotics, which are both effective and scalable interventions, and have jointly benefited over 11,500 Moldovan youth during 2014-2018 and anticipate reaching 8,000 additional youth in the 2018-2019 academic year. The Future Classroom Labs and Educational Robotics programs promote increased human capacity to tackle complex, market-driven problems creatively and effectively, using technology and design principles.

Educational robotics – sustainable and systemic. During Y1-3, educational robotics expanded from a pilot in 6 schools in 2014 to 112 schools or 9% of all Moldovan schools in 2018. The number of youth enrolled in robotics courses has grown immensely, reaching 9,50012, or 3% of Moldovan students, with 61% of total program beneficiaries participating in the 2017-2018 academic year. Robotics remains at the core of MCP’s

11. STEAM: Science & technology, interpreted through engineering & the arts, are all based in mathematical elements

100 | PROJECT YEAR FOUR WORK PLAN STEAM initiatives, as it has proven to be an impactful and influential program. Per the recent impact survey (1,400 people surveyed), youth enrolled in robotics classes resulted in students becoming better team players (67%), more creative (52%) and better problem solvers (37%). Improved academic scores and communication skills were also noted as positive outcomes of the program.

In Y4, MCP will consolidate and continue to scale-up the educational robotics initiative, supporting the program to become systemic and sustainable within the Moldovan educational system. MCP will minimize its investment in the technical endowment of the program and will instead expend resources encouraging local communities and schools to invest in robotics kits. MCP, together with ATIC, will lead Training of Trainers sessions and robotics competitions for systemic motivation. MCP aims to have 10 new schools running robotics programs, endowed from own resources, and a minimum of 500 youth enrolled in each school, raising up total program beneficiaries to 15,000. Additionally, MCP will support the Ministry of Education to revise the national Educational Robotics curriculum, led by champion teachers, with the goal to adapt the curriculum to meet educational needs and modern pedagogical approaches, and also to ensure that 21st century skills are appropriately incorporated.

The Future Classroom Labs (FCL) pilot launched in 2017 in 11 schools, in partnership with Orange telecom and the Ministry of Education, Culture and Research (MECR). Based on EU and global best practices, FCL builds on successes of the robotics program and expands the program into a more holistic concept of hi-tech classrooms and digital innovations in education. The shared estimated investment in FCL (MCP, Orange, Government and LED) is $850,000 USD during 2017-2019. During FY3, the 11 pilot schools successfully taught new generation educational content including 110 teachers conducting 382 innovative lessons using digital technologies (such as digital media, robotics kits, portable science lab kits / sensors for experiments, kits for building microelectronic circuits, 3D printers and scanners, virtual reality headsets, panoramic cameras, etc), benefiting 2,119 pupils. In Y3, MCP successfully negotiated with the Government to build a national FCL Center at the State Pedagogical University and allocate 3.6 million lei ($215,000 USD) for its infrastructure renovation. In Y4, MCP will focus on developing the national FCL Center – to be called National Center for Innovation in Education (NCIE)- including its institutional framework, renovated space, tech endowment, and staff capacity building; with a tentative launch in the first quarter of 2019. The National Center is a critical institution for systemic transformation and long-term digital innovation in tech education, as it aims to (re)train over 1,000 teachers per year. MCP aims to bring on board Lichtenstein Development Foundation (LED) in Y4, and formalize this donor partnership by end 2018. In Fall 2018, MCP will launch the renovated ‘future classroom labs’ in the 11 pilot schools, that will showcase new approaches to physical educational space and integration of information, communication, and technology (ICT) tools. An FCL national design guide will be published by the Ministry for Education, with MCP assistance, to support spread of this initiative.

12. in 112 educational institutions and 18 libraries

PROJECT YEAR FOUR WORK PLAN | 101 Activity 1. Pilot the Future Classroom Lab (FCL) concept in Moldovan schools (ongoing)

Expected Outputs:

■■ 11 schools continuing to implement ■■ Over 3000 school students involved in FCL innovative educational activities in FCL, activities using digital equipment ■■ National Center for Innovation in Education ■■ Formalize collaboration with Lichtenstein (NCIE) launched at State Pedagogical University Development Foundation (LED) (UPSIC) ■■ 400 teachers trained in digital technologies ■■ Leverage program funding, 875,000 USD via through the FCL for integrated learning shared investment of Orange Foundation, ■■ STEAM teachers conference organized to Ministry of Education, schools, MCP and other build capacity on digital transformation in partners education

Expected Outcomes:

■■ Pilot schools showcase good practices for ■■ Youths are endowed with 21st century skills integrating technology in education and and are more competitive in their future trigger digital change in the educational careers system ■■ Schools become more attractive, offering ■■ Project based learning for STEAM is tested inspirational learning environments and and integrated with national curriculum activities ■■ STEAM fields become more attractive and ■■ Teachers motivation for self-improvement STEAM careers are further promoted and innovation is increased

FCL fosters an inspirational learning environment where smart technology and interdisciplinary approaches are used to improve the learning outcomes. The FCL concept was proposed by MCP in Y3 and was piloted in 11 schools across the country: 3 in Chisinau, 2 in Balti, 1 in Orhei, 1 in Leova and 4 in rural communities. FCL is implemented in several EU and non-EU countries, in different formats, adapted to each country context. Designed based on the recommendations of the European Schoolnet, FCL is implemented in Moldova in close collaboration with MECR, Orange Moldova Foundation and other local partners to foster sustainability.

Learning Zones

102 | PROJECT YEAR FOUR WORK PLAN 2-4 July 2014: FCL partners’ meeting & LSL-iTEC workshop for school leaders FCL Milestones for Y4:

■■ Advance FCL in the 11 pilot schools, providing continuous support and capacity building for teachers, and advancing 3 selected pilot schools to serve as regional FCL Hubs and take on a role as an inspirational resource for other schools; ■■ Development of the National Center for Innovation in Education at State Pedagogical University (UPSIC), as a main resource for expansion of the FCL concept at the national level; ■■ Design FCL national guidelines, to include a set of recommendations for creation of a model FCL in Moldovan schools; ■■ Launch communications campaign on the importance of STEAM education approach, pedagogical innovation and digital skills development.

Table. FCL Development Gantt chart

Component q1 q2 q3 q4

Pilot FCL in schoolsw

■■ Launch FCL spaces in each 11 pilot schools

■■ Launch of regional FCL Hubs (Central, North, South)

■■ Training of Trainers for teachers

■■ Host National Teacher Training Conference

■■ Select new schools for expansion

Setup National Center for Innovation

■■ Undertake reconstruction and endowment

■■ Center to open doors

■■ Define and implement institutional model

■■ Develop 3-year strategic plan

■■ Kick-off phase [mobilize team and start activities]

■■ Sign MOU with LED

Policy level and systemic improvements

■■ Design FCL national guidelines

■■ Foster continuous dialogue with the MECR and stakeholders to undertake improvements to policy and national curricula

■■ National awareness campaign

PROJECT YEAR FOUR WORK PLAN | 103 Future Classroom Lab (FCL) funding partners

875,000 USD joint investment est 2017-2019 for $1 by MCP, partners contribute $5.5

MCP Orange Foundation Ministry of Education LED (tentative)

██ Sub-activity 1: Support to schools engaged in the FCL pilot (ongoing) Following the accomplishments of Y3, MCP will support pilot schools to further leverage their FCL spaces and digital technologies more effectively, including how to design innovative pedagogical scenarios using the digital technologies such as robotics kits, portable science lab kits/sensors for experiments, kits for building microelectronic circuits, 3D printers and scanners, microcomputers, virtual reality headsets, and panoramic cameras etc. Pilot institutions will continue to implement new practices, such as project based learning, inquiry based learning, and storytelling highlighting STEAM methodologies, and integrating these approaches into existing curriculum.

Credit: Dumitru Carbuni Photo caption: Design concept for the FCL in Stefanesti village, Floresti raion

██ Sub-activity 2: Launch of the National Center for Innovation in Education – NCIE (beginning 2019)

After necessary financial resources were approved by the MECR, MCP started assisting UPSIC to draft the necessary plans for renovation. Upon finalization of the refurbishment, MCP will endow the center with digital equipment and will assist launching learning activities. Negotiations are in process with a new donor – Liechtenstein Development Agency (LED) to provide additional support NCIE for up to three years. The support of LED is critical for sustainability. Once LED involvement is confirmed, MCP will assist LED to develop the actvity plan for NCIE. UPSIC will collaborate with other universities and technology vendors, to ensure the best trainers, technologies and content are available within NCIE. This specialized training center is essential for spreading the digital innovation throughout the education sector and for increasing the prestige within teaching profession.

104 | PROJECT YEAR FOUR WORK PLAN Image: Design concept for the NCIE at UPSIC

██ Sub-activity 3: Communication of project activities and results (ongoing) For further expansion of digital innovation within schools and to foster the exchange of best practices among participating institutions and their peers, it is critical to ensure a continuous and extensive communication between the public and stakeholders. FCL institutions will be trained on how to better communicate about their projects and associated successes with colleagues, parents, and community. Also, a specialized STEAM Education conference will be organized, to serve as a platform for knowledge and experience exchange within the community.

██ Sub-activity 4: Expansion of the pilot and inclusion of new institutions Following the experience with the first 11 schools and with the newly developed FCL Design guidelines, MCP together with partners (Orange and Ministry of Education) will finalize terms of the pilots’ expansion, selecting approximately 10 new institutions for the program and will provide them initial support, capacity building, and endowment.

Activity 2. Expand Educational Robotics Program (ongoing)

Expected Outputs:

■■ 10 new institutions added to the ■■ More than 5000 students from schools and educational robotics program, endowed VET institutions trained using robotics and 3D from their own resources printing equipment during the 2018-2019 school ■■ 50 robotics teachers’ skills upgraded at year specialized trainings ■■ 60 teams participate in the 2017-2018 FIRST ■■ 800 students participate in the local LEGO League competition robotics competitions and events ■■ National robotics team participate in at least ■■ Official robotics curricula updated one international competition

Expected Outcomes:

■■ Robotics equipment is integrated in ■■ More youth are inspired for tech and curriculum for Informatics, Mathematics, engineering careers Physics ■■ More funding is attracted from local ■■ Learning outcomes and interest of youths in communities and diaspora STEAM fields are improved ■■ School becomes more attractive to youth

PROJECT YEAR FOUR WORK PLAN | 105 MCP expanded the Educational Robotics program nationally, under the strategic partnership with the MECR, during FY16-17, with the program now includes 112 educational institutions from 63 localities across Moldova, including 38 villages. Additionally, 3213 robotics clubs launched in community libraries in partnership with USAID- funded Novateca program or other local partners. This expansion contributes to the decrease of the digital divide between rural and urban areas, as majority participating schools are from outside Chisinau. More than 9,500 youth have benefited from regular robotics classes since 2014, 60% were from 2017 alone. Through annual activity surveys, robotics program participants noted considerable improvements in their creativity, problem solving, interest toward STEAM subjects, and school in general.

Robotics Impact Survey, 1400 respondents, 2017

OVERALL REPORTED IMPACT (SELF-OBSERVED)

R

R I

R

R

During the Y4, MCP will work with the expanding educational robotics network to further develop robotics competitions, increase program participation, and build teacher’s capacity on the program. Additionally, MCP will work with a select group of teachers to update the robotics curriculum that was developed in 2015 at the beginning of the programs implementation.

Educational Robotics Program in Moldovan Schools Goals for 18-19 By 2019 Robotics will benefit 17,000 youths, academic year or 5% of Moldovan children in schools ■■ 122 schools, forecast up 10% ■■ 5,500 youths, up 10%

■■ 50 new teachers trained

■■ New Robotics curriculum

■■ 5 national Robotics competitions with 800 participants across Moldova

13. 7 robotics clubs in libraries equipped by Novateca, 11 equipped from own resources and 14 by MCP through GirlsGoIT program

106 | PROJECT YEAR FOUR WORK PLAN ██ Sub-activity 1: Organize robotics competitions (year-round) Critical components of the educational robotics program, increasing students’ motivation and celebrating their achievements, are fostered through the robotics competitions. Specifically, competitions implemented by the U.S. FIRST foundation in collaboration with LEGO, which are recognized as the most important international youth competition in the field of technology and robotics, are drivers for the success of the Robotics Program in Moldova. MCP together with ATIC will organize:

■■ The 5th edition of FIRST LEGO League Moldova, aiming to increase participation to 60-70 teams (from 50 in the year 2018); ■■ Participation of Moldova Robotics Champion team at FIRST LEGO League Open International; ■■ 2 editions of the FIRST LEGO League junior, attracting more than 500 students from the primary school level; ■■ The SumoBot Challenge Moldova with at least 64 participating teams.

Additionally, MCP will co-finance the Moldovan national robotics team to participate in theFIRST Global Olympiad, providing the opportunity for more advanced students to represent the country among other 180 teams, and act as ambassadors of STEAM fields in Moldova.

Activity stakeholders consistently express interest in competitions, proving that implementation of competition-based learning resonates with participants and is an effective career guidance tool. Participation in robotics competitions help students apply science, technology, engineering, and math concepts, as well as use their imagination and effectively problem solve. Additionally, the program facilitates students to further develop critical thinking, team-building and presentation skills.

██ Sub-activity 2: Increase teachers’ capacity in robotics and other technologies (winter 2019 and summer 2019)

MCP will continue to develop teachers’ skills by providing assistance to improve pedagogical practices, therefore providing a more effective learning experience for their students. Capacity building activities will be organized in close cooperation with the Moldovan Association of ICT Companies (ATIC), through Training-of-Trainers, advanced robotics teaching workshops, and other knowledge-building activities.

██ Sub-activity 3: Monitoring of Robotics Program results and impact (April-May 2019) At the end of the academic year, MCP, together with ATIC, will conduct monitoring and evaluation efforts for the Robotics Program including gathering feedback from teachers and carrying out an impact survey with students engaged in the program.

Activity 3: Support private initiatives for improving STEAM education and promoting STEAM careers (ongoing)

Expected Outputs:

■■ Over 1,000 youth involved in alternative ■■ STEAM career promotion campaigns reaching education activities one million viewers ■■ Over 600 young women involved in GirlsGoIT activities in 17 regions

PROJECT YEAR FOUR WORK PLAN | 107 Expected Outcomes:

■■ Interest in STEAM education and careers fields increased increased ■■ More youth is inspired for tech, creative ■■ STEAM related skills of Moldovan youth services and engineering careers improved ■■ Number of private STEAM related clubs ■■ Public awareness of importance of STEAM increased organically

MCP will continue to support expansion of Coder Dojo coding clubs, and MCP anticipates that over 400 youth to be involved in this program during the new academic year. Additional extra-curricular learning and entrepreneurship capacity building initiatives, including after school clubs and camps will be encouraged by MCP. MegaDojo, a large-scale event offering one-day of coding and workshops for youngsters, will be organized to promote coding skills building.

MCP will support the organization of a special event, The Hour of Code, in collaboration with Tekwill. The Hour of Code a global movement, a worldwide effort to celebrate computer science, reaching tens of millions of students in 180+ countries. The Hour of Code takes place each year during Computer Science Education Week, in December. MCP will work with its network of educational institutions to promote further penetration of the movement in Moldova.

Photo credit: Olesea Galusca, MCP Photo caption: 150 kids and their mentors at the STEM Discovery event in Chisinau, April 28, 2018

108 | PROJECT YEAR FOUR WORK PLAN To promote STEM fields and incentivize children’s interest in STEM subjects, MCP will support, for the second time, a series of events in collaboration with STEM Discovery week - a joint international initiative that invites projects, organizations and schools across Europe and around the world, to celebrate careers and studies in the fields of STEM.

To continue promotion of gender reach in STEAM initiatives, MCP will continue to support GirlsGoIT program, focused on teaching critical STEAM skills to young Moldovan women and increasing the number of young women pursuing academic studies and careers in the STEAM field. MCP will continue to provide support to the program (co-funding the summer camp), increasing the emphasis on practical skills and creativity in the program, as well as to encourage GirlsGoIT regional ambassadors to involve younger females in their activities. Regional GirlsGoIT clubs were added to the robotics program in summer 2018 and will begin offering robotics classes in the new 2018-2019 academic year.

MCP will work with the Youth for Innovation Foundation, created by Starnet, for further development of AcademyPlus Moldova. AcademyPlus Moldova serves as a skilled labor force supply unit of the IT Park Digital City, another flagship initiative assisted by MCP to consolidate the tech business infrastructure. AcademyPlus Moldova is an alternative technology education and “quick win” disruptive solution to produce coders that industry needs. During 2016-2017, this initiative increased the IT skills of approximately 1,300 youth. MCP will support AcademyPlus Moldova’s plans to organize additional educational and entrepreneurship activities (such as coding camps, robotics classes, Junior Achievement program), aiming to engage more youth and develop the skills of their community members.

PROGRAM 2: BUILD THE ECOSYSTEM FOR WORKFORCE AND ENTREPRENEURSHIP DEVELOPMENT

In Y4, MCP will continue to strengthen and expand the workforce development ecosystem responding to the demands of the global economy and the domestic labor market. Infrastructure development of innovation centers and collaboration spaces facilitate fast and intense skills training in specific areas of technology and creative services, while also providing access to new technologies to further encourage new product development. The enhanced ecosystem with new infrastructure for collaboration and innovation will serve as a platform for cross-industry collaboration and cluster development involving businesses, academia, government and local communities.

MCP will continue to develop the partnerships between government institutions, academia, the private sector and global corporations. Industry Centers of Excellence, currently in various stages of development and housed within local universities, will remain central to MCP efforts to spur innovation, build a better workforce, and accelerate growth. The focus for Y4 will be to strengthen the capacity in conducting skills, entrepreneurship, and community building initiatives of the Centers of Excellence that were developed and launched in Y3 namely FabLab Chisinau, CIRCLE IT and Engineering Laboratory Cluster and three regional FabLabs in Drochia, Cahul and Ungheni. Two collaborative and educational spaces such as the Creative Hub and Balti Innovation Center will be launched in Y4 and Y5. Initial infrastructure investments in all these centers (FabLab, CIRCLE, Creative Hub and Balti Center) are estimated to be approximately $3 million USD, where MCP’s $1 million of catalyst funding leveraged $2 million of in-kind contributions and donations from partners.

PROJECT YEAR FOUR WORK PLAN | 109 During Y4, MCP will develop the physical infrastructure, institutional, and administrative capacity of the Centers of Excellence and local stakeholders that will manage the centers such as the Association of Creative Companies COR and Association of Industrial Manufacturers. MCP will leverage both private partners including companies from relevant target sectors, and public partners including the Investment Agency and ODIMM, to support the Centers of Excellence. The linkages between the Centers of Excellence with peer organizations, universities, and business associations from other countries will be a priority for MCP in Y4.

Catalyzing cross-industries collaboration through innovation centers

CIRCLE IT and Ingineering S Laboratory Cluster M T U

CREATIVE HUB S OR

S Regional Innovation Center S U

FABLAB T U S TI TITUM

Regional FabLabs S U

To further endow the Creative Hub, additional funding of MDL 460,000 will be provided by the MECR, and MDL 1 million from the budget of the Academy of Music, Theatre and Arts. MCP will also support the implementation of trainings, events, and other soft content through the grant agreement awarded to the Association of Creative Companies, who manages the Creative Hub.

In Y4, MCP will launch reconstruction of the new regional Innovation and Technology Center in Balti, using the initial funding of MDL11,7 million contributed by the Ministry of Agriculture and Regional Development (MARDE). MCP will contribute approximately $350,000 USD of additional funding to the Center. These investments will complete the first development phase of the Center, including finishing the façade, installing of the engineering networks and finishing two floors (out of 5), by the end 2019, thus enabling the center to launch activities in Y5. The remaining funds to complete infrastructure development remain to be identified. Possible parallel funding may be allocated via the Tekwill project extension. On a smaller scale, MCP will continue to support the regional FabLabs in Y4 that were implemented in cooperation with USAID’s Novateca ‘Global Libraries’ Project in Cahul, Ungheni and Drochia.

110 | PROJECT YEAR FOUR WORK PLAN Activity 1. Develop Regional Innovation Centers (Balti, Regional FabLabs)* *This activity will be co-funded via the Tekwill Project, implemented by ATIC, and funded by USAID and Sweden*

Expected Outputs:

Construction of the Balti Innovation Center initiated, with considerable progress of infrastructure development including:

■■ MDL 11,7 million (approx. 650,000 USD) ■■ Construction and endowment of the Balti investment from the Ministry of Regional Innovation Center initiated Development for the Balti Center disbursed ■■ Institutional framework of the Balti Innovation for construction Center developed ■■ At least 3 business partners identified ■■ 3 regional FabLabs implement activities in partnership with FabLab Chisinau (at TUM)

Expected Outcomes:

■■ Introduce new areas of technology-driven ■■ Develop new skills for youth and development and innovation to serve local professionals to grow employability economies and communities ■■ Create new opportunities for tech-driven and innovation startups

Innovation centers provide top of the line infrastructure, machinery, business support services, and entrepreneurial development programs such as business incubation and acceleration, to industry innovators. The regional innovation centers require a hybrid model and focus on specific industry needs and anomalies for regional influences. The centers also need ensure appropriate reach to industry actors that provides support to innovators of all ages. To achieve this objective, MCP will continue the cooperation with the MARDE and the Regional Development Agency ‘North’ for developing a Regional Innovation Center in Balti that will be located on the campus of the Balti State University.

Also, for a smaller scale innovation centers in the regions, MCP will continue to provide support and strategic guidance to regional FabLabs that were launched in Y3 in cooperation with USAID’s Novateca Project in Ungheni, Drochia, Cahul.

██ Sub-activity 1: Regional and Community Innovation Centers Infrastructure Development

Reconstruction and endowment of the Regional Innovation Center in Balti. Based on the Memorandum of Understanding singed in Y3 between the Ministry of Economy, Ministry of Agriculture and Regional Development, Ministry of Education, Regional Development Agency “North”, MCP, ATIC, Association of Industrial Manufacturers, and Balti Municipality and State University “Alecu Russo”, the Innovation Center will be developed on the campus of Balti State University in a new specifically designed high-tech building of 6,000 sq. meters. The Center will bring new areas of technology-driven development and innovation to serve local economies, create new possibilities for startups, and develop new skills for youth and professionals. This game-changing Center will present a mix of laboratories, training rooms, events spaces, co-working areas and business offices for startups and other business residents, serving as a hybrid

PROJECT YEAR FOUR WORK PLAN | 111 of training, accelerator, collaborative space and business park. The Center will focus on various economic verticals that are present in the region, like automotive, fashion manufacturing, and new/untapped industries, such as engineering, applied R&D for automotive and IT services. It will also aim to bring technology to traditional sectors, like agriculture. It is intended that the Center will spur 20 innovative startups per year, as well as train and engage about 3,000 people annually, including businesses, professionals, students and even kids.

Balti Regional Innovation Center – current state of the building and future architectural concept

Photo credit: Arhitecture design Maxim Kalujak

In Y4, for development of the Balti Innovation Center, MCP will focus its efforts in the following 4 areas:

■■ Providing design and construction supervision support to the Regional Development Agency “North” and Balti State University during the construction process. ■■ Endowing the Center with equipment and furniture to correspond to the Center’s functional requirements. ■■ Providing support for increasing the institutional and managerial capacity of the Association of Industrial Manufacturers who will manage the Center. ■■ Attracting additional financing and private partners for the Center’s forthcoming initiatives.

The Innovation Center’s overall infrastructure readiness budget is estimated at MDL 36 million (approximately $2 million USD), of which approximately $1 million USD will be contributed by Ministry of Regional Development and MCP for the first phase of development. Chisinau-based organization Tekwill, implemented under ATIC, will be the main provider for tech content, enabling synergies and efficiencies, as well as deployment of internationally recognized courses for Microsoft, IBM, Oracle that are utilized by Tekwill partners.

During Y4, MCP will coordinate stakeholder engagement for the Center’s development and will provide project management support for the project. MCP will also endow the Innovation Center with the necessary equipment, furniture, and interior design elements to correspond to its functional requirements.

Capacity building and program implementation support for regional FabLabs. During Y3, MCP in cooperation with the USAID Novateca Project launched three regional FabLabs in Cahul, Ungheni and Drochia. The FabLabs are endowed with laser printers, a laser cutter, vinyl cutter, digital embroidery machine, oscillograph, and Arduino and Lego robotics sets. In Y4, MCP will continue to provide strategic and activity program implementation support for the FabLabs with an aim towards sustainability. Since the regional FabLabs are designed as an integral part of the country’s innovation and technology ecosystem, MCP will facilitate their cooperation with Tekwill, FabLab Chisinau, and other cross-cutting initiatives

112 | PROJECT YEAR FOUR WORK PLAN supported by MCP such as the Girls Go IT program, ZipHouse and Dreamups. More specifically, MCP will provide support to regional FabLabs in the following areas:

1. Providing mentoring and strategic oversight in planning and implementing skills and entrepreneurship activities.

2. Facilitating the cooperation with Tekwill, FabLab Chisinau, Dreamups, the Youth for Innovation Foundation, ZipHouse, and GirlsGoIT.

3. Establishing partnerships between FabLabs and private sector companies.

Activity 2. Creative Hub – the grand opening

Expected Outputs:

■■ Creative Hub infrastructure finalized and ■■ Creative Hub team mobilized launched o/a Dec 2018 ■■ 200 beneficiaries reached for Creative Hub ■■ Operational and activity plan of the programs Creative HUB developed ■■ 4-5 startups added to the acceleration program ■■ 1.5 million MDL public funding disbursed ■■ 10 educational courses/tracks for creative skills for endowment developed

Expected Outcomes:

■■ Strengthened technical and entrepreneurial ■■ New linkages between creative competences of the current and future entrepreneurs that spur innovation workforce for creative industries

The Creative Hub is the premiere collaborative space in Moldova for the creative services industry. Located on the campus of the Academy of Music, Theater and Plastic Arts, and managed by COR Business Association, the Creative Hub provides a propitious development ecosystem for students, academia and entrepreneurs from the creative industries, focusing on graphics, sound, animation, arts, motion picture, VR/AR reality, video production, advertising and other related subsectors with high export potential. The Hub will provide space for networking, advanced education labs (e.g. licensed Adobe and other graphics software resources, sound recording studio), co-working and micro-offices for startup creative firms and professionals.

PROJECT YEAR FOUR WORK PLAN | 113 Major construction of the Creative Hub launched in Y3. In Y4, key milestones for the Hub include finalizing infrastructure development with a plan to open doors in December 2018, and operationalizing staff and activities in 2019. This will be a considerable effort, as MCP will assist in building the institutional framework of the Hub including identifying the Board, executive team, defining internal regulations, partnership arrangements with the COR/Academy for cost-sharing operational costs, and assisting to design programs for skills and entrepreneurship.

Creative Hub – ongoing construction and architectural concept

Photo credit: Arhitecture design Maxim Kalujak

██ Sub-activity 1: Finalize infrastructure and launch the Creative Hub The Creative Hub consists of half of one floor and one semi-basement of an existing building within the fine Arts Faculty, and a new greenfield building situated in the courtyard of the Academy. The construction process of both components of the Creative Hub will be finalized in by December 2018. In parallel, MCP will provide support to the Academy and the MOCER in absorbing the MDL1.46 million from the state budget allocated for the Creative Hub. This budget will be used for endowing the Creative Hub with equipment and furniture needed for operationalizing the Hubs services. Students will assist in providing artwork and décor for the space. MCP will attract private companies in endowing select spaces within the Hub such as the sound recording studio and media laboratory. As part of the Creative Hub infrastructure development, MCP will support the Academy in identifying a private operator of the Academy canteen in order to improve the quality of service for the students and residents of the Creative Hub.

██ Sub-activity 2: Launch content and capacity building In Q4 of Y3, MCP awarded a grant to the COR to start the implementation of the programs in the Hub for a period of 12 months. The grant includes the development of 10 courses (including animation, graphics design, storytelling, and copywriting) that will serve as a basis for skills development program in the Hub. Besides the skills development activities, MCP will support COR to implement awareness building activities, raising interest and collaboration, fostering entrepreneurship development and efforts to integrate the Hub in the international context and existing creative networks for collaboration.

114 | PROJECT YEAR FOUR WORK PLAN Table. Creative Hub Development Gantt chart

Component q1 q2 q3 q4

Infrastructure

■■ Finalize construction, including outdoors

■■ First round of endowment (basic furniture, lighting, décor, basic equipment, etc.)

■■ Identify investor and reconstruct the ‘canteen’

■■ Second round of endowment (additional equipment and furniture, according to developed activities, like sound studio)

■■ Absorb the public funding allocated by Ministry

Institutional framework

■■ Create joint management board COR/Academy

■■ Hire and train executive team

■■ Budgeting and sharing of operational costs

■■ Develop 3-year strategic plan

■■ Study trip for capacity building (Creative Hub team)

Content kick off

■■ Naming and branding

■■ Engage private partners (MOUs)

■■ Education: Develop 10 initial courses, identify trainers, hold first training sessions

■■ Community: regular meetups and networking

■■ Launch entrepreneurship programs and attract first residents

■■ Join international creative hubs networks

PROJECT YEAR FOUR WORK PLAN | 115 Activity 3: Fab Lab Chisinau – coaching the ATIC/TUM partnership *This activity will be co-funded via the Tekwill Project, implemented by ATIC, and funded by USAID and Sweden*

Expected Outputs:

■■ At least 100 professionals benefiting from ■■ Up to 300 tech enthusiasts and craftsmen advanced training in microelectronics, engaging in product design and prototyping computer-aided-design and other within the Makers Space engineering subjects ■■ At least 1000 students from TUM benefiting from the Makers Space

Expected Outcomes:

■■ Recognition and awareness for Technology ■■ Competitive workforce skills and knowledge and Engineering careers developed at TUM ■■ Improved learning process at TUM in ■■ Private-public partnerships establishment at engineering TUM

FabLab Chisinau is a technical prototyping platform for engineering and invention, providing stimulus for local entrepreneurship in Moldova. FabLab is a space for learning and innovation: somewhere to play, to create, to learn, to mentor, and to invent.

During Y3, MCP launched the first FabLab in Moldova to spur engineering and innovation, following a 24-month reconstruction and endowment phase. The FabLab was registered in the international Fab Lab network (https://www.fablabs.io/), that resulted in a connection with the global community of technologists, makers and innovators, and in a partnership with Solidworks, a renowned 3D modeling firm. Fab Lab Chisinau enables rapid fabrication and digital prototyping, endowed with all necessary electronics, robotics, wood, and metal Photo credit: Novateca processing equipment for innovators. For long-term Photo caption: Laser cutter in the regional FabLab in Ungheni sustainability, the FabLab will be managed by Tekwill, a partnership between ATIC and TUM.

During Y4, MCP will focus on developing the institutional and business model for the FabLab, by coaching ATIC and TUM to take over its management. MCP will provide targeted technical assistance to the Lab while filling a facilitation and mentorship role.

Funding for content development for the Lab will be provided as an extension of the Tekwill project, from the Swedish government. The goal for FabLab support is to develop services leveraging FabLab equipment/ machines/tools (including security and safety protocols), attract private partners for educational and/ or business projects, and integrate the FabLab facility/activities into TUM curricula through project-based learning, specifically in electronics, industrial design, mechanics and IT.

116 | PROJECT YEAR FOUR WORK PLAN MCP will support FabLab Chisinau to connect internationally, specifically with the regional Bucharest Nod Makers Space and the Odessa FabLab, who has already been engaged in design during 2017-2018.

Activity 4: Support and develop the IT and engineering laboratory cluster within the TUM

Expected Outputs:

■■ 3 private partners contributing to additional ■■ Approximately 1000 students benefiting from lab endowment and courses the lab facilities

Expected Outcomes:

■■ Improved educational curricula ■■ Strengthening private sector and academia collaboration for practical and market-driven education

Photo credit: Anatol Tomsa, MCP Photo caption: USAID EE Assistant Administrator Margot Ellis shaking hand with Eva the robot at the opening of CIRCLE cluster of laboratories at the Technical University from Moldova, March 2018

While Tekwill and the Makers Space offer advanced skills development opportunities and infrastructure to leverage for IT, it is important that the mainstream curricula is updated as well. After multiple consultations with a private industrial sector, TUM is adjusting the curricula for several IT and engineering specialties to respond to private sector needs, particularly in the field of industrial fabrication and automation of industrial processes and information systems, both in Moldova and abroad.

In Y3, MCP developed and launched CIRCLE, a cluster of advanced laboratories for technology and engineering, within the TUM. The cluster covers technological areas such as: measurements, transducers, actuators, and control engineering. The cluster serves as a platform for problem-based learning subjects and applied research and development tasks. Approximately 1,000 students from 25 specialties of TUM are benefitting from the new laboratory cluster.

PROJECT YEAR FOUR WORK PLAN | 117 To further support the endowment of the CIRCLE labs, in Y4, MCP will identify additional private partners. Potential areas of privately funded interventions would be: common short-term programs development, further curriculum adjustments, research and development projects, endowments to expand the cluster to include interactive systems, control engineering, integrated circuits, integrated systems control, microelectronics, product design, and renewable energy. Initial discussions are in process with firms such as, Mitsubishi Electric, Arobs Translibania, Asti Automation (România) and Tehno Volt (România).

Activity 5: Improve the entrepreneurial ecosystem for innovation and creative services

Expected Outputs:

■■ Capacity building support provided to at ■■ 20 startup events organized with local or least 2 hubs international speakers, with over 1,000 actual or aspiring entrepreneurs and tech professionals attending

Expected Outcomes:

■■ Startup community expanded ■■ New actors, captured through collaborative ■■ Entrepreneurship activity increased and entrepreneurship spaces, added to the ecosystem

MCP has worked closely with the newly emerged hubs and co-working spaces including the Generator Hub, iHub, 404 Moldova and Dreamups Innovation Campus, offering support by expanding reach, improving value of services, and increasing impact into the community. These spaces contribute to skills development and promotion of entrepreneurship through events, mentorship sessions, and pre-acceleration programs, engaging a community of more than 2,000 people.

In Y4, MCP will continue supporting these ecosystem organizations and new players, as they emerge. MCP will act as a catalyst of the ecosystem development and a liaison between the small private and/or non- profit hubs and Tekwill, who has a unique position in terms of resources and infrastructure in the industry. MCP will promote cooperative competition and will help other hubs to define their unique positioning within the market and deliver value to their own communities. In Y4, MCP expects that the assisted hubs will hold more than 60 startup events, with over 2,500 actual or aspiring entrepreneurs and tech professionals in attendance.

118 | PROJECT YEAR FOUR WORK PLAN OBJECTIVE 2: EXPANDED MARKET LINKAGES

Photo credit: Locals.md for COR and MCP Photo caption: Alexandru Kurilov, speaker of the COLLIDER conference

Moldova is perfectly placed to be a key global exporter of IT services to markets in the east and west, due to its exceptional workforce, convenient time-zone, and favorable investment conditions. These include immigration incentives for foreign IT professionals, tax incentives for IT sector employees, a flat tax for ICT businesses and the creation of a world-class IT park, all of which are the result of sustained MCP support for the liberalization of the business environment.

In Y2 and Y3 MCP provided support to the industry, Government and initiatives in developing a propitious ecosystem for local and foreign investments in the Moldovan IT sectors. As a result, the attractiveness of the IT ecosystem increased though the following initiatives:

■■ Adoption of the Law on IT Parks and single 7% flat tax rate; ■■ Adoption of Startup Visa Legislation to facilitate the obtaining of Visas and work permits for foreign tech employees, managers and investors; ■■ Development of the physical class A infrastructure for IT companies in the Starnet Digital Park; ■■ Improving the quality of IT skills through creating CIRCLE laboratory Cluster, supporting Academy+ Program, implementation of the robotics program in the schools and VET institution; ■■ Subsequent extension of the eligibility of the Law on IT Parks so that companies form creative industries and engineering, such as animation, design, video and R&D, benefit from the single 7% flat tax rate; ■■ Development of the Country-level Marketing Campaign for promoting Moldova IT industry.

In Y4, MCP will focus on initiatives to promote the Moldovan IT industry as a value added and reliable source of IT and creative services. The timing is right, as Moldova will build upon the tax-cost-talent- infrastructure ‘proposition’, including 7% single tax and Law on IT Parks for tax and cost advantage, ‘startup visa’ for brain gain and the Digital City IT state-of-the-art technology park infrastructure.

PROJECT YEAR FOUR WORK PLAN | 119 Activity 1: Assist foreign market entry for domestic tech & creative firms and attract tech-based investors to Moldova

Expected Outputs:

■■ 5 international trade events attended ■■ Over 2,000 people participating at the ■■ Moldova tech industry and country review local events organized by Business Support by the International Data Corporation Organizations (IDC) completed and published ■■ 10 companies establish new foreign ■■ At least 4 local industry events organized partnerships

Expected Outcomes:

■■ Moldova’s awareness as a tech-based ■■ Moldova’s unique sales proposition for tech- service location increased, overall and in based investors, startups, and foreign clients two target markets refined

MCP will work at an industry and firm-level, assisting the Investment Agency, ATIC, Association of Creative Companies, and private companies directly to increase their marketing approaches and foreign markets access. Initiatives for expanding market linkages will be in line with the MCP-supported Country-Level Marketing Plan and will be coordinated with main stakeholders such as ATIC and the Investment Agency to eliminate effort redundancy and create maximum synergies.

██ Sub-activity 1: Support the organization Shortlisted tech and creative of B2B mission and participation of events, 2019: domestic companies to visit foreign industry specific events and exhibitions INTERNATIONAL (for ICT, creative services & engineering) ■■ Web Summit 2018, world’s largest tech In Y2 and Y3, MCP launched open calls for event, November 5-8, Lisbon, Portugal companies to participate at specialized industry ■ Nordic Game 2019, 22-24 May, events, such as conferences, festivals and intense ■ Malmo, Sweden courses for skills enhancement. These industry professionals not only brought new knowledge to ■■ Berlinale International Film Festival, their firms, but also business contacts and clients. Feb 7-17, 2019, Berlin, Germany In Y4, MCP will continue providing support to ■■ Gamescom, August 21, 2019, companies to visit international industry specific Cologne Germany events, via open calls, to gather information ■■ Design weeks in Helsinki, on trends and technologies, establish business Milan and/or Eindhoven connections with foreign clients and partners, and build awareness about their products and services. DOMESTIC MCP will support the participation at the events within the defined target markets for each industry ■■ Moldova ICT Summit, Spring 2019 sub-sector and will require a cost-share from ■■ Game Factory Conference, November 2018 participating companies to secure demonstrated ■■ Innovation and Creativity Festival, Spring 2019 commitment. Target market focus will be placed on ■■ ADOR Advertising Festival, May 2019 Northern and Western Europe, as well as U.S. and nearby Romania. ■■ Moldovan Design Week, June 2019

120 | PROJECT YEAR FOUR WORK PLAN ██ Sub-activity 2: Support the BSOs to organize local events to promote industries and attract talent

In Y4, MCP will continue to support local events, upon consideration of their relevance, target audience, and objectives including the Moldova ICT Summit, Game Factory Conference, Innovation and Creativity Festival, ADOR Advertising Festival, Moldovan Design Week. MCP will assist ATIC and COR industry associations as the two main organizing partners for these events thereby contributing to fostering sustainability and local capacity building. Additionally, MCP will support the organization of specialized conferences, such as MoldCamp, Open Source Conference, Chisinau Startup Week, and the Game Developers Conference.

██ Sub-activity 3: Export coaching program for creative industry firms to pursue U.S. and Western markets

Building on Y3 interventions, MCP will continue the collaboration with US-based consultancy firm – Revthink (Revolution Thinking) to run an accelerator program for Moldovan creative companies and facilitate networking with US companies. MCP expects approximately 10-15 Moldovan creative industry firms to take advantage of this accelerator program, in Y4, that will directly expand their customer base abroad. The RevThink 90-day remote coaching program in Y3 proved effective, and resulted in 4 Moldovan firms collaborating with US firms, delivering animation, graphic design and other creative services to new western clients. For example, Asti Studio was contracted to develop animated graphics for the L.A. performance of LypSynch Battle, a renown American musical reality competition television series as a result of the remote coaching program.

██ Sub-activity 4: Develop the Moldovan IT industry country profile by IDC for increased foreign investment

The existing report on the Moldovan IT industry was developed by International Data Corporation (IDC) with the assistance of predecessor CEED II project in 2015 and is titled “Moldova Moving into the Premier League of IT nearshoring,” The report was used by foreign investors as well as by the Moldovan Export Promotion Organization, ATIC and Moldovan embassies abroad to attract foreign investors and promote IT industry. IDC is an international market intelligence firm, and thus its conclusions are credible for investors. In Y4, MCP will develop a revised and updated report that will be released in 2019. The report will contain the latest developments and initiatives for improving the IT ecosystem and investor climate in Moldova. The report will be a critical communication vehicle for the current state and the development opportunities of the Moldovan IT market and will cover the following areas:

Research Areas for Report

IDC will research the following areas for the Report. Available information will IT Service Drivers & Inhibitors be documented Market ● in the Findings ● M ● I report. IDC will ● M ● ● ● provide IDC- Market structure owned quantitative ● ● ● ● ● SOT statements which ● S ● will support the ● findings.

PROJECT YEAR FOUR WORK PLAN | 121 Activity 2: Support private-driven initiatives to develop IT Parks

Expected Outputs:

■■ Phase 2 of the Starnet Digital City initiated ■■ 300 jobs created in the Starnet Digital City with the first residents on board IT Park ■■ Phase 2 financing obtained using the portable DCA guarantee by the end 2019

Expected Outcomes:

■■ Improvement of the business tech tech-driven investors infrastructure ■■ Ensuring domestic private sector investment ■■ Raising Moldova’s attractiveness for into the IT sector

Moldova’s IT industry needs a new generation of infrastructure and modern tech facilities attract foreign investors and support industry growth of 20% per year. The Digital City IT Park, is Moldova’s first technology park, and will serve as a hub for IT companies and technology entrepreneurs and startup companies. Located in downtown Chisinau, on 0.9 hectares of green space, the Park is envisioned to offer a ‘Silicon Valley’ like environment and create an ecosystem and community for technology companies, which will host over 2,500 people/workplaces

Caption: 3D layout Architecture concept for Digital City

122 | PROJECT YEAR FOUR WORK PLAN In Y4, MCP will continue to support the development of the Digital City IT Park that is implemented by one of the largest internet providers in Moldova, Starnet. The Digital Park project began in 2016 and is a Euro 15 million greenfield investment project on a timeline to fully commission the infrastructure by March 2022. The Digital Park an infrastructure project of national significance that will propel Moldova’s image as a tech destination.

MCP’s will continue its critical role as investor, coach, and facilitator for the Digital Park in Y4. MCP supported Starnet and USAID Mission in obtaining a DCA loan guarantee in Y3, which will cover 30 percent risk of a $8.9 million USD loan necessary for financing phase 2 of the Digital Park. In Y4, MCP will provide technical assistance and strategic guidance for utilizing the DCA guarantee to obtain the phase 2 funds, including assistance negotiating the loan. MCP will also provide support to Starnet to promote the Digital Park and attract domestic and foreign IT companies to become residents. Starnet must fill 80% the first tower with residents before it can pursue the second tranche of funding from the bank.

Picture: Architecture concept for Towers AB of Starnet IT Park building that are being finalized from the ongoing loan from Agroindbank

Picture: Interior design concept for the Digital City Starnet IT Park

PROJECT YEAR FOUR WORK PLAN | 123 OBJECTIVE 3: IMPROVED SECTOR-ENABLING ENVIRONMENT AND INCREASED CAPACITY

Activity 1: Implementation of the Law on IT Parks

Expected Outputs:

■■ The Moldova IT Park administration ■■ 50 new residents of the Digital IT Park expanded and strengthened registered, at least 5 of which are from the ■■ Digital IT Park promoted abroad at creative services industry minimum of 2 international events

Expected Outcomes:

■■ Improved business environment for local ■■ Business incentives implemented for tech-driven firms and investors Moldova’s tech industry private sector players through the new IT Parks law

The Law on IT Parks was instated on January 1, 2018 when the Moldova IT Park launched, with MCP assistance through a public-private partnership between ATIC and Moldovan Government. Moldova’s first virtual IT Park welcomed 212 residents in its first 6 months of operation, demonstrating that fiscal incentives (7% single tax on sales revenue) can push local tech firms out of the grey economy.

Members of the virtual Moldova IT Park receive pro-business benefits such as a 7% single tax on sales revenue, replacing all other business taxes (up to 10 different taxes and fees). In July 2018, new categories of businesses, other than IT, became eligible for benefitting from the law on IT parks such as animation, design and video production. MCP expects the applicability of the law to increase the formality of the creative services sector, where currently a majority of startups operate on a private entrepreneur license, or within the shadow economy. A positive spillover effect on the more than 5,000 youth employed in the creative services industry is also an expected outcome of the law on IT parks.

124 | PROJECT YEAR FOUR WORK PLAN In Y4, MCP will increase the institutional capacity of the Moldova IT Park’s administration, including but not limited to tax and HR improvements, so they are able to better serve their over 200 residents. For the new subsector of the IT parks, the creative services industry, MCP will provide legal and tax assistance directly to the Association of Creative Companies and the private companies in the industry to adopt and apply the new legislation.

Additionally, in Y4, MCP will facilitate increased communications and marketing regionally and in western markets around the Digital IT Park including its connection to regional and global tech-based foreign investors.

MCP will support the Government to establish the necessary mechanism to implement the IT Park and Startup Visa legislation process, developed and approved with MCP assistance in Y2, and conduct outreach to share information on the requirements for obtaining the residency and working permits according to the new and streamlined procedures.

Activity 2: Strengthen and update industry strategies

Expected Outputs:

■■ Creative Services industry profile ■■ IT Competitiveness Strategy approved by developed the Government

Expected Outcomes:

■■ Updated strategic vision for furthering ■■ Strengthened understanding and awareness competitiveness of Moldova’s ICT and on the economic potential of creative creative services sectors services sector

MCP supports industry level strategies and policies as a key tool for economic development, including for Moldova’s emerging ICT and creative services sectors. In Y4, MCP will facilitate obtaining the Government’s approval for the updated Moldova IT Industry Competitiveness Strategy (2019-2023) that articulates the ‘value-added approach’ (i.e. competing on more complex tech services and products, rather than on cost and scale) as the next development phase for Moldova’s fast-growing tech industry. Additionally, MCP will assist the newly established COR business association to profile the creative services sector, filling the information gap for trade and investment in this emerging industry.

IT Business enabling ecosystem components, recommended in the draft Moldova IT Industry Competitiveness Strategy 2019-2023

Capacity Development Infrastructure Development I I IT IT

Business Eco System Investment Promotion I

PROJECT YEAR FOUR WORK PLAN | 125 ██ Sub-activity 1: Support the Ministry of Economy and Infrastructure to obtain Government approval of the IT Industry Competitiveness Strategy (2019-2023)

In Y3, the MoEI, with MCP’s assistance and expertise, developed the IT Industry Competitiveness Strategy for the period of 2019 – 2023. The Strategy passed the review of key ministries but has not approved by the Government as the strategy continues to be modified and new activities and budgets added. In Y4, MCP will continue to provide assistance to the MoEI so that the Strategy is approved by 2019.

██ Sub-activity 2: Develop the Creative Services Industry Profile In Y4, MCP, in partnership with COR business association and Investment Agency, will develop the Moldova Creative Services Profile that will contain the main micro and macroeconomic indicators and statistics about the industry, as well as verticals, key players and initiatives. This data will be provided to relevant government organizations, donors, and business support organizations to raise awareness and facilitate communication around the creative services industry and its perspectives, in addition to highlighting potential investment promotion opportunities. MCP will identify what the policy interventions and necessary incentives are that will provide a positive impulse for the creative services growth.

Activity 3: Capacity Building for for ATIC and COR business associations

Expected Outputs:

■■ At least 5 new members added to the COR Association

Expected Outcomes:

■■ Increased capacity of ATIC and COR ■■ Institutional capacity of the Association of Association in organizing sector Creative Companies increased promotion events

Industry association are the key counterparts that MCP is working with to implement industry development initiatives. The industry associations have the objective to raise awareness of the industries, develop market linkages, and engage in advocacy initiatives affecting their members. Therefore, building the capacity thereof is critical for a sustainable development of the industries. Particular emphasis will be placed on the newly created Association of Creative Companies that will require significant coaching and mentoring during its first year of activity.

██ Sub-activity 1: Mentoring ATIC for sustainable institutional development In Y4, MCP will continue to mentor ATIC to sustainably develop and fulfill its growing portfolio of projects, while maintaining its role as industry advocate and policy dialogue with the government. ATIC is currently implementing over $5 million USD in technical assistance contracts (with possible additional funding for Tekwill expansion into the regions), and is mandated to represent the business interests of its members. Additionally, MCP and ATIC are co-implementing projects including Tekwill, FabLab, Educational Robotics, and the Balti Innovation Center. MCP and ATIC will strengthen coordination and collaboration for achieving maximum efficiency and effectiveness by working together in these flagship projects. Further information on co-implemented flagship projects and MCP’s role is outlined below:

126 | PROJECT YEAR FOUR WORK PLAN ■■ Tekwill Chisinau (implemented by ATIC via a direct grant from MCP and the Embassy of Sweden). MCP is a facilitator for institutional, legal, and general programmatic directional support. ■■ Fab Lab Chisinau (launched by MCP and will be transitioned to ATIC via direct grant from MCP and the Embassy of Sweden). MCP will support ATIC and TUM on the management model, legal requirements and procedures for joint management of FabLab Chisinau, as part of the umbrella Tekwill. ■■ Balti Regional Innovation Center, Tekwill expansion to regions (implemented by MCP, with additional funding to come through directly via the ATIC Tekwill project extension). MCP will assist ATIC’s engagement in development of the Balti Regional Innovation Center and implementation of its programs regionally. ■■ Educational Robotics (implemented by MCP and ATIC via a partial grant to support specific components of the program). In Y4, MCP will expand and strengthen the Educational Robotics program in schools and provide overarching management support of the program. MCP will also continue the grant with ATIC as the local institution supporting the programs implementation.

██ Sub-activity 2: Mentorship, capacity building, and representation for COR With the support of MCP, the Creative Industries Association was formed in Y2 to represent each subsector of the industry and act as a unified voice in its further development. In Y4, MCP will support the COR through providing expert coaching to build and strengthen its institutional capacity. The COR has the goal to growth the membership base (by at least 5-7 new members) in Y4, and jumpstart the Creative Hub as the flagship project with MCP’s support. Additionally, MCP will continue promoting the COR and coach the institution to become the industry advocate to the Government, specifically the Ministry of Education and Culture, and act as a one-stop shop for international investors in the creative fields.

Photo credit: ATIC Photo caption: Youth interacting with TUM Nano robot

PROJECT YEAR FOUR WORK PLAN | 127 SECTION IV: PROJECT LEVEL OUTCOMES AND RESULTS

128 | PROJECT YEAR FOUR WORK PLAN SECTOR ENGAGEMENT, ENHANCEMENT, AND DEVELOPMENT (SEED) FUND MCP’s $5-million SEED Fund aims to invest in targeted activities to enhance local capacity and spur innovation, quality, and productivity in MCP supported industries: wine, tourism, ICT clustered with creative and precision engineering, and light industry.

In Y1-Y3, the SEED Fund has been a catalyst to identify creative, innovative, production and quality streamlining projects that leverage new technologies and processes. The Fund also plays a role in securing grantee and third-party contributions and private-public investment, when possible, to promote innovative ideas, collaborate on marketing and promotion, assist with international quality standard certifications, and conduct workshops, training events, and public awareness initiatives. Grants for business associations and excellence centers are used as a capacity building mechanism in as the areas of advocacy, establishing procedures and standardizing trainings, and fostering collaborations among various industry players, for example APIUS and ZIPhouse in the light industry where who developed common training programs.

The core principles of the SEED Fund include transparency, competition, and investment sustainability through grantee contributions. These principles will continue to be applied in Y4. Leveraging grantee contributions ensures long-term buy-in and commitment.

To date, for every $1 invested in grants, MCP has leveraged $1.2 in grantee contributions, which underscores the sustainability of MCP’s interventions. The results are even more impressive for small and medium size enterprise (SME) grants, where MCP was able to leverage $3 in grantee contributions for every $1 invested to date.

Total contributions to date presented by grant recipients amount to $3.84 million USD at the exchange rate of 1 USD = 16.75 MDL.

Through July 2018, MCP awarded 100 grants totaling $4,510,366 USD or 90 percent of the $5 million USD SEED Fund. MCP has disbursed a total of $2,950,422 USD or 59 percent of the Fund with $489,634 USD or 9.8 percent of the Fund remaining to be awarded, Y4 will mark the conclusion of the new grant award period.

Figure. SEED Fund Figure. Grant Allocation by Industry Performance through July 2018 through July 2018 (by value)

Total disbursed Wine thru July 2018 Tourism Total awarded, not yet disbursed* ICT Cluster

Remaining Budget Light industry

Crosscutting

*at the ER of July 2018 of 1 USD = 16.75 MDL 100 grants have been awarded through July 2018

PROJECT YEAR FOUR WORK PLAN | 129 In Y4, MCP will continue using grants as a mechanism to promote innovative ideas, new technologies, advancement of quality and productivity as well as empower business associations to become advocacy voices for their industries. The SEED Fund will make strides in disbursing the already contracted $1.6 million USD and will award the remaining funds of $489,634 USD by issuing requests for application (RFA) across wine, tourism, and light industry sectors. ICT clustered with precision engineering and creative services sectors will implement the already awarded grant funds and will consider the expansion of the highly successful robotics program.

Below please find an illustrative list of planned SEED Fund interventions for Y4.

Wine: MCP will continue to support the wine industry via a complex quality improvement program aimed at repositioning the sector in high-value markets. Under the SEED Fund, the winegrowing quality improvement program currently spans over 39 wineries, three PGI Associations and one Small Winemakers Association. SEED Fund’s approach will be multi-faceted, from using drones in disease diagnosis to fermentation at controlled temperatures and wine tourism destination upgrades as well as enhancing the quality of wine through the provision of highly performing equipment in key protected geographic indications (PGI) Codru, Valul lui Train, and Stefan Voda. As part of the ASW mentorship program, the Fund will continue its support for new wineries. Under the PQUP program, the Fund will support existing grant beneficiaries that are transition wineries to boost quality, innovation, and export potential in the wine industry. In addition, the Project will continue its support for ASW to ensure its continued growth as a member-based association capable of providing quality services and of mentoring current and future small winemakers of Moldova.

Tourism: MCP will continue the collaboration with ANTRIM enhancing their capacity to provide quality services to members, advance the “Tree of Life” events agenda, and position Moldova as a desirable tourism and Meetings, Incentives, Conferences, and Events Tourism (MICE) destination through participation in international forums and exhibitions, identification of local and international partners and donors to leverage the financial support of the Project, and serving as a robust platform for inbound tourism through creative online/digital PR campaigns. Considering the B&Bs supported by the Project experienced a significant increase in visitors representing 26 percent increase compared to 2016, MCP will provide assistance through the SEED Fund for new or existing rural bed and breakfasts (B&Bs) in target areas to improve tourism services, provide hospitality training, develop ICT solutions including websites and marketing solutions, and improve interior and architectural aspects of the B&Bs.

Light industry: Thanks for the multi-faceted support of MCP combining SMART program (Streamline Manufacturing, Accountability, Resource Efficiency and Transparency) and trade promotion, 23 companies benefitted from the SEED grants program that led to technological innovations and IT solutions for production automatization, quality enhancement, productivity, product diversity, and processing managerial information (MIS). SEED Fund support is conditional upon grantee contributions via investments in additional equipment or factory workflow improvements that may lead to long-term gains in productivity and can also improve worker morale and reduction of employee turnover. MCP will build upon its fruitful collaboration with APIUS and will continue its support to increase their organizational and advocacy capacity, positioning APIUS as the unifying force behind the industry around common trade & marketing goals. The Fund will also help build APIUS’ ability to provide meaningful services to its members such as coordination of networking events, participation in international trade shows, and active engagement in advocacy on behalf of the industry. MCP will continue its support for ZIPhouse to ensure it becomes the key center of excellence in fashion and design in Moldova and a source for innovation and creativity in the sector via its Acceleration Program, which will support 12 new entrepreneurs across 3 extended tracks: fashion, fashion tech and lifestyle.

ICT clustered with Precision Engineering and Creative Services: The SEED Fund will continue the collaboration with ATIC to enhance their organizational, governance, and advocacy capacity and to expand the LEGO Education robotics program to 5-10 additional educational institutions. The grant agreement with the Technical University of Moldova (TUM) for the endowment of three laborites including internet of things (IoT) and robotics and FabLab Chisinau, the largest digital prototype and small-scale production

130 | PROJECT YEAR FOUR WORK PLAN workshop in Eastern Europe, will conclude in Y4 with the final stage of equipment endowment being delivered and tested. The SEED Fund will start disbursement under the approved endowment grant for the new Balti Innovation Center. The Fund will be used to organize makers’ fairs, support creative start-up companies, coordinate investor coaching programs, and startup pre-acceleration programs, among others.

LOCAL CAPACITY BUILDING PROGRAM MCP prioritizes working with sector-based business associations, with their critical role as think tanks, partners in implementation, and legacy in their respective industries. A growing number of industry associations in Moldova play an important role in advancing regulatory reforms, as well as improving the competitiveness of industries. Ultimately, business associations are the sustainable partners and drivers of continued development for MCP.

In the first three years of project implementation,MCP worked with 11 business associations with a total 2,316 members to stimulate inter-industry cooperation, consolidate private sector vision and voice, and increase their role in quality, skills and/or trade support, all of which would further enhance the overall competitiveness in targeted industries. By working with associations and member-based organizations, MCP can build their capacity to advocate for legal and regulatory changes, serve as clearinghouses for information, coordinate initiatives within targeted industries, and provide services such as organizing trade and investment missions, trainings, and/or conferences for their members. These activities build and strengthen networks within the industries, which can lead to new alliances and partnerships domestically and internationally. In summary, MCP will continue supporting associations to become focal points for industry cluster development. This assistance will continue in Year 4, as outlined in the table below. In Y3, a majority of these associations, as well as Centers of Excellence, and startup ecosystem players, received or implemented grants through the SEED fund to support their core activities. In Y4, MCP will maintain its dominant focus on these grantees in industries’ consolidation and will support them to implement technical projects to grow their institutional capacity and increase their relevance to members.

Table. MCP assisted associations and their core programs

Assisted Name of Number of Area of support by Core programs with MCP industry association members MCP

Wine ONVV 1867 member A. Quality ■■ Implementing “Wine of National companies improvement Moldova” annual marketing and Office for B. Skills development promotion plan Vine and *ONVV also C. Trade related ■■ Initiatives on enhancing product Wine includes support quality (PQUP program, WoM individual D. Strengthened quality standards farmers advocacy ■■ Improving workforce skills & 18,386 knowledge ■■ Export support programs ■■ Developing domestic market ■■ Implementation of legal reforms. Advocacy ■■ Capacity building for ONVV ■■ Strengthening and capacity building for PGI Associations

PROJECT YEAR FOUR WORK PLAN | 131 Wine PGI 44 wineries, A. Quality ■■ Implementation of vineyard Association 36 new improvement quality improvement program “Codru” wineries B. Skills development “FlaveDor” C. Trade related ■■ Capacity building support ■■ Promotion of the concept of D. Strengthened PGI wines advocacy ■■ Implementation of legal reforms. Advocacy Wine PGI 13 wineries A. Quality improvement ■■ Implementation of vineyard Association B. Training skills quality improvement program “Stefan Voda” development “Terroir” C. Trade related support ■■ Capacity building D. Strengthened ■■ Promotion of the concept of advocacy PGI wines ■■ Implementation of legal reforms. Advocacy Wine PGI 58 wineries, A. Quality ■■ Implementation of vineyard Association 12 new improvement quality improvement program “Valul lui wineries B. Skills development “Terroir” Traian” C. Trade related ■■ Capacity building support ■■ Promotion of the concept of D. Strengthened PGI wines advocacy ■■ Implementation of legal reforms. Advocacy Wine Association 24 wineries, 2 A. Quality ■■ Support for emergence of new of Small new wineries improvement and development of existing Winemakers B. Skills development small winemakers “ASW (ASW) C. Trade related Mentorship Program” support ■■ Capacity building D. Strengthened ■■ Promotion of the concept ASW advocacy and ‘author wines’ concept ■■ Advocacy Wine Association 10 people, 2 B. Skills development ■■ Implementing service quality of more people C. Trade related upgrading programs in Sommieliers support HOReCa, and ASE trainings and from certifications Moldova ■■ Capacity building Wine National 125 people, B. Training skills ■■ Implementing service quality Sommeliers 119 more development upgrading programs and ASE Club people trainings and certifications ■■ Capacity building

132 | PROJECT YEAR FOUR WORK PLAN Tourism National 33 members A. Quality ■■ ANTRIM institutional Association (companies), 7 improvement development support to for Inbound new members C. Trade related become a leading inbound Tourism in FY18 support tourism organization in (ANTRIM) D. Strengthened Moldova advocacy ■■ Supporting ANTRIM in becoming the main organizer of B2B activities, including international exhibitions ■■ Providing assistance in developing new services to ANTRIM’s members, such as business and marketing intelligence services and lobbying and advocacy Light Employers 113 members A. Quality ■■ APIUS institutional Industry Association (companies) improvement development support of Light 16 new B. Skills development ■■ Strengthening collaboration Industry members in C. Trade related with ZIPhouse as a flagship (APIUS) FY18 support institution for workforce D. Strengthened development advocacy ■■ Strengthening APIUS capacity to expand the domestic market through consolidation of such projects as the DININIMA umbrella brand and Moldova Fashion Days ICT Moldova 43 members B. Skills development ■■ Capacity building for lobbying Association (companies) C. Trade related and advocacy of ICT support ■■ Consolidating STEM through Companies D. Strengthened educational robotics (ATIC) advocacy ■■ Supporting trade and exports Creative Association 28 members, B. Skills development ■■ Capacity building as a newly Services of Creative 20 new C. Trade related setup organization Industries members support ■■ Supporting COR to develop of Moldova the Creative Hub under the (COR) Academy of Fine Arts ■■ Supporting trade and exports

The Organizational Capacity Assessment tool (OCA), updated and used by MCP, allows supported sector associations – APIUS, ATIC, ANTRIM, and ASW – to reflect upon their successes and identify areas for improvement by assessing themselves annually against a list of criteria that includes governance, management, strategic vision, member services and satisfaction, etc. The self-evaluation scores across three project years (see Figure below) show significant improvements in the overall capacities of participating associations to serve their members, advocate for regulatory and legislative changes, secure new sources of revenue to ensure MCP investment sustainability, and make streamlined management decisions. OCA allows MCP to compare scores and determine the required level and areas of targeted interventions. In Q2 of Y4, MCP conduct OCA self-evaluations to measure the improvements and/or determine areas of improvement in Associations’ capacities and work with them to determine the manner of intervention.

PROJECT YEAR FOUR WORK PLAN | 133 Average OCA scores per self-evaluations presented by supported business associations

Averages of OCA self-evaluation tool % increase in Supported capacities 2016 Associations 2016 2017 2018 vs. 2018 ANTRIM 1.73 2.05 2.9 68%

APIUS 1.6 2.28 2.33 46%

ASW 1.68 2.22 2.6 55%

ATIC 2.93 3.18 3.68 26% Average 1.99 2.43 2.88

ANTI-CORRUPTION USAID’s Democracy and Governance (DG) Assessment notes that connections to government are too often central to business success. Favorable treatment by government regulators for import/export licenses and maintenance of cartels or monopolies are some of the main ways select businesses remain profitable and dominate sectors. During Y4, MCP will continue to support increased transparency of operations in the selected industries, by advocating for appropriate and transparent policies that reduce government rent seeking. MCP will similarly advocate for a level playing field among firms, large and small, to better ensure that firm growth and profits are based on enterprise productivity and innovation, not connections.

Furthermore, Chemonics and its employees and partners shall maintain high standards of ethical conduct in the selection, award, implementation, and oversight of Project activities, and will adhere to U.S. Federal laws and regulations, international agreements on anti-corruption, USAID regulations, Chemonics’ corporate policies and procedures, and Chemonics’ standards of business conduct, which are available online at: http://www.chemonics.com/OurStory/OurMissionAndValues/Standards-of-Business-Conduct/Pages/default.aspx.

PUBLIC-PRIVATE PARTNERSHIPS (PPPS)

Photo credit: Anatol Tomsa, MCP Photo caption: Partners from USAID, Sweden, Ministry of Edication, Culture and Research and Academy of Theatre, Music and Fine Arts at the announcement of the Creative Hub

134 | PROJECT YEAR FOUR WORK PLAN MCP facilitated critical partnerships that collectively leverage multi-million resources for shared objectives in reform, trade promotion, workforce development and economic growth. Through the end of Y3, with the support of MCP, 37 PPPs were conceptualized, supported, and launched with a reported value of more than $15 million USD, which will be further increased in 2019 by an estimated 3 million USD. MCP integrated several different kinds of PPPs into the program, including STEM education partnerships, centers of excellence, industry branding and marketing alliances, which involve various partners, including public sector organizations (i.e. Ministry of Economy, ONVV, Ministry of ICT), educational institutions (schools and universities), private sector companies (e.g. Microsoft, CISCO). In Y4, MCP will continue to develop these PPPs. Key highlights for 2019 include – launching of several infrastructure-related PPPs and ensuring the funding from the private partners, namely the Creative Hub and Digital City IT Park, safeguarding and consolidating the ONVV PPP, and scaling up the STEM partnerships in robotics and Future Classroom Lab.

PPPs in Winegrowing PPPs in IT, Engineering and industry: Creative cluster: ■■ National Office for Wine and Vine (ONVV) ■■ Educational Robotics ■■ Best Grapes ■■ Future Classroom Lab ■■ FlaveDor ■■ Academy Plus ■■ Terroir ■■ IT Career promotion ■■ WoM Marketing Platform ■■ Regional Innovation Center in Balti ■■ WoM Academy ■■ Creative Hub ■■ WoM Advocacy platform ■■ CIRCLE Lab at TUM ■■ National Strategy in Wine and Vine Sector ■■ FabLab in Chisinau consultation platform ■■ FabLab in Ungheni ■■ WoM viti-vini platform ■■ FabLab in Cahul ■■ FabLab in Drochia ■■ Startnet IT Park (Digital City) ■■ IT Strategy ■■ Law on IT Parks ■■ Moldova virtual IT Park

PPPs in PPPs in Tourism industry: Light industry: ■■ Orhei Vechi - Heritage Tourism Hub ■■ ZIPhouse Design and Technology ■■ Descopera Tree of Life festivals calendar Excellence Center ■■ ‘Tree of Life’ festivals [national tourism ■■ Din Inima promotional campaigns events agenda] ■■ Din Inima common stores ■■ Chisinau Tourism Info Center ■■ Moldova Fashion Days ■■ Purcari Tourism Site Development Region ■■ Din Inima International market ■■ Tourism Development Platform ■■ Transnistria Tourism Info Center ■■ National Wine Road/ Indicators

PROJECT YEAR FOUR WORK PLAN | 135 ACCESS TO FINANCE THROUGH DEVELOPMENT CREDIT AUTHORITY

Photo credit: Anatol Tomsa, MCP Photo caption: Margot Ellis, Senior Deputy Assistant Administrator, visits the construction premises of Digital Park, the first IT park in Moldova,

MCP assists the implementation of the Development Credit Authority (DCA) loan guarantee program, which is an USAID special mechanism to increase access to finance. DCA loans cost-shares the risks for providing long-term loans to growing businesses, allowing local companies or individuals to have access to financial resources that are otherwise difficult to access. In Moldova, DCA has enabled borrowers to have sufficient lending resources in order to grow and develop their businesses. DCA has supported financial transactions and created additionality as financial institutions initiated lending into new sectors and to new borrowers, such as start-ups, women and youth. By encouraging local channels of financing, DCA empowers individuals to improve their lives and Moldovan entrepreneurs to grow their businesses and increase sector competitiveness - a pillar for economic growth.

MCP provides ongoing support to financial institutions with DCA agreements Currently, there are four DCA agreements under implementation in Moldova. Three DCAs are with financial institutions, while a new DCA launched in FY18 is with a local company. In Y4, MCP continued to assist the following financial institutions with DCA agreements in implementation:

■■ DCA with Prime Capital for energy efficiency – the placing of new loans under this guarantee is valid through 2027; ■■ DCA with Comertbank, Rural Finance Corporation and Prima Capital – these DCAs are only being under monitoring for the outstanding loans.

The DCA in energy efficiency is progressing positively. Through June 2018, Prime Capital has placed 57 loans under guarantee valued at $736,600 USD, of which $722,466 USD (98 percent) have been disbursed. As such, as of June 2018 Prime Capital absorbed 21 percent of the $3,527,337 USD DCA pipeline in a 5-year implementation period, which is a good usage rate, given that it has 10 more years to go until 2028. To present the DCA in Energy Efficiency achievements, in Y3, MCP developed the first web-based map. The map “DCA in Energy Efficiency” presents the results of improved access to finance for entrepreneurs & individuals engaged in energy efficiency and renewable energy sectors, thereby stimulating economic growth.

136 | PROJECT YEAR FOUR WORK PLAN Through the DCA in Energy Efficiency, SMEs and individuals from 15 out of 32 Moldova’s regions were able to access loans. In addition to the borrowers’ location, the geo-map indicates the range of value of the accessed loans. In this respect, 72 percent of accessed loans do not exceed $10,000 USD (32 percent of which are up to $5,000 USD and 37 percent - from $5,000 USD to $10,000 USD). The other 25 percent of borrowers accessed loans within the range $10,000-$50,000 USD, $50,000 USD being the maximum cumulative principal amount of a qualifying loan. At the same time, 2 loans (representing 4 percent of borrowers) are included in the range from $50,001 to $100,000 USD – taken with written USAID approval.

The map is presented below and can be accessed on the link: http://geocenterusaid.org/mapviewer/?45bdlview.

Figure. DCA in Energy Efficiency Performance throught June 2018

Figure: The web- based map on DCA in Energy Efficiency presenting borrowers by locations and range of accessed loans

Total Awarded Total Disbursed Remaining DCA amounts

MCP will also continue to provide ongoing support to financial institutions with USAID DCA agreements (Comertbank, Rural Finance Corporation and Prime Capital) aiming to promote industry growth. While these institutions do not place additional loans under the guarantee, they provide reports and monitor outstanding loans. To date, there are no defaulted borrowers and USAID received zero claim requests.

██ Sub-activity 1: Support DCA in energy efficiency implementation and monitoring DCA agreements (ongoing)

In Y4, MCP will provide support to implement and monitor the DCA agreements. This will include regular communication and support on contract implementation, applicants’ eligibility, reporting, and assistance in linking partners with USAID. Another MCP focus in Y4 will be to enhance utilization of DCA in Energy Efficiency. In this respect, MCP together with Prima Capital will analyze the option of placing only the energy-saving component(s) of a larger loan under DCA, currently being placed under guarantee only the loans that are taken in totality for energy efficiency goals. In addition, MCP will monitor all DCA agreements.

██ Sub-activity 2: Update the map on DCA in energy efficiency (May 2019) In Y3, MCP developed the first web-based map presenting the DCA in Energy Efficiency. The project intends to update the map with the new achievements in this DCA over the year, elaborating un updated map in Y4.

PROJECT YEAR FOUR WORK PLAN | 137 MCP provides support for ICT Park, for which USAID facilitated a Development Credit Authority (DCA) guarantee (for activity details refer to Section III, Information Technology, Engineering and Creative Services). In November 2017, USAID facilitated a Development Credit Authority (DCA) loan guarantee worth $8.9 million USD to create a state-of-the-art ICT business park. Known as Digital Park, the facility is being developed by Moldovan internet company StarNet using finance leveraged by the USAID DCA loan guarantee and is made possible due to the innovative Law on IT Parks created with support from MCP in 2016. The agreement with StarNet will result in Moldova’s first IT park, setting in motion the USAID-backed Law on IT Parks, which forges an enabling environment for Moldova’s growing ICT sector. Digital Park will host over 2,500 jobs and 50 technology firms, creating a Silicon Valley-type working environment to support Moldova’s competitiveness and attract investment and new entrants from the region. Total investment in the Digital City park is $15 million USD and will feature two buildings. The first residents will be moving in the first building by Fall 2018. StarNet will use the portable loan guarantee for an additional bank loan for the construction of the second building of the IT Park. Highlighting U.S. Government support for the project, USAID Assistant Administrator for Europe and Eurasia, Brock Bierman, visited StarNet and the Digital Park construction site on May 4, 2018.

██ Sub-activity 1: Support Starnet to capitalize the portable DCA guarantee (October- December 2018)

MCP will support Starnet to capitalize on the DCA portable guarantee, by contracting a loan from a bank that would offer the best lending terms and use the loan to complete the second phase of development of the Digital City IT Park. MCP will assist with the follow-on bank due diligence by DCA team, as needed. Most likely the first in line would be Agroindbank, that is Starnet’s current lender, and that expressed interest to continue funding this investment project. The goal is to contract the loan by end 2018, when the DCA portable guarantee expires.

ENVIRONMENTAL PROTECTION In line with 22CFR 216 and the approved Initial Environmental Evaluation (IEE) DCN-2016-MOL-006 and, MCP monitors environmental compliance in accordance with the environmental threshold determinations included in the IEE. Per the approved IEE, none of the MCP interventions are expected to have significant effects on the environment (as defined in 216.2 (d)(1)) and only two environmental threshold determinations apply to MCP: 1. Categorical Exclusion, which do not require any further environmental mitigation and monitoring measures and 2. Negative Determination with conditions, which require the development of Environmental Mitigation and Monitoring Plans (EMMP).

The environmental due diligence approach applied in the first three project years will be applied in Y4. MCP uses the environmental review checklist (ERC) to screen all proposed SEED fund interventions and other proposed interventions/activities to identify potential environmental impacts of project activities and processes with a view to ensure that they lead to no adverse environmental impact. If, following the ERC screening, the proposed activities do not result in potential impact and fall in the categorical exclusion threshold determination, no further action is required on the part of the Project. If, however per the ERC screening, there is potential for adverse impact, mitigation measures are incorporated in the design and specific mitigations measures are recommended in an activity-specific EMMP. Across the years, the SEED Fund has developed and received COR, Mission Environmental Officer (MEO) and Environmental Bureau Officer (BEO) approval for 63 grant activities for which EMMPs were developed.

138 | PROJECT YEAR FOUR WORK PLAN INCLUSIVE DEVELOPMENT

Expected Outcomes:

■■ Gender and Youth analysis applied to all ■■ Minimum of 30 percent of assistance MCP activities directed to women-owned companies ■■ Minimum of 30 percent female participation ■■ Companies from Gagauzia and Transnistria in workshops or trainings benefiting from MCP support

MCP recognizes and affirms USAID and Sweden’s commitments to inclusive development and provides all project beneficiaries with equal opportunities Inclusive Development Highlights to participate in its activities and to benefit FY16-FY18 up to date from project-funded assistance. Using a non- discriminatory approach, MCP registered following ■■ 175 or 30 percent of the total 584 important positive results up to date. firms assisted arewomen-owned ■■ Light industry, every second MCP Empowering Women and creating assisted apparel company is women- MCP activities are opportunities for Youth. owned designed to interest and attract women and youth and motivate them to develop themselves and their ■■ 53 percent of the total 20,529 careers in-country. Empowerment initiatives through participants in capacity building MCP include: programs are women ■■ 76 percent of total 20,529 activity ■■ Economic empowerment of women. MCP participants are youth targets assistance to women-owned enterprises ■■ 16 companies from Gagauzia and in target industries to foster economic women’s Transnistria involved in MCP empowerment. Through 2018, MCP assisted 175 supported activities women-owned companies, which represents 30 percent of the total 584 assisted firms. adding 51 new assisted women-owned companies in Y3 alone. MCP assistance to increase competitiveness in light industry -the women-centric industry with 90 percent women employed- has direct and indirect effect on women economic empowerment. MCP assistance to grow effectiveness, productivity, and trade in this sector helps preserve and improve the jobs of thousands of women.

Photo credit: GirlsGoIT Photo caption: Networking and interaction at the 4th edition of the GirlsGoIT summer camp, July 2018

PROJECT YEAR FOUR WORK PLAN | 139 ■■ Building skills and knowledge for women and youth. Overall, 53 percent of the 20,529 participants in various MCP-supported capacity building programs were women and 76 percent were youth. In Y4, MCP will continue to maintain high rate of women and youth involvement on project activities. For this, a priority is the development of industry excellence centers housed at local Universities, such as ZIPhouse fashion Accelerator Center, four Fablabs (Chisinau, Drochia, Ungheni, and Cahul), Creative Hub and Balti Innovation and Technology Center, as sustainable and systemic solutions for improving skills. These are positioned to embolden fashion, tech, engineering and creative sectors, which primarily attracts youth, and will benefit over 10,000 students. In winegrowing industry, MCP will support the Wine of Moldova Academy, where up to date, were trained over 1,700 industry professionals, 29 percent of which were youth and 40 percent of which were women. Other MCP dedicated interventions - Girls Go IT, Lego Robotics, IT Career Promotion were in IT industry where women are traditionally underrepresented. In result, this sector registered the highest number on women participating in industries activities – 5,338 up to date. All These activities will be continued in Year 4, with expansion of Lego Robotics and new Future Classroom Lab, that are expected to benefit over 5,000 youth in schools. In addition, the newly opened Tourism Information Center in Chisinau engages young volunteers from tourism related specialties, a partnership being established in this respect by ANTRIM with three universities offering young professionals the opportunity to an internship at the Tourism Information Center.

Participants in MCP supported capacity building programs, by industries

Youth 15,651 11,260 participants 181 505 3705 Women 10,877 5,338 participants 293 686 4560 Total 20,529 13,148 participants 435 1748 5198 0 5000 10000 15000 20000

TOTAL IT cluster Tourism Wine Light industry

Support economic development of Transnistria and Gagauzia. MCP provided technical assistance to 16 Gagauzia and Transnistria-based firms from the assisted industries and two schools. The firms benefit of assistance in production management and productivity enhancement, as well as participation in leading international tradeshows, the assistance being provided in the form of support from industry organizations, namely ONVV, and industry associations ANTRIM and APIUS.

■■ In the winegrowing industry Gagauzian and Transnistrian owned companies are treated as equal and supported to adhere and benefit from the programs jointly implemented with by MCP and ONVV. Such prominent wineries like Kvint, Vinuri de Comrat, Tomai Vinex are active members of the PGI Associations Codru and Valul lui Traian, which guarantees them access to industry public-private governance model. As such representative of two Gagauzia based companies DK Intergrade and Vinuri de Comrat have representatives in ONVV management board (Coordination Counsel).

140 | PROJECT YEAR FOUR WORK PLAN Due to historical reasons most of the operating Transnistria and Gagauzia-based companies oenologists in Moldovan wineries are women, to benefit of MCP assistance in FY19 as such seminars and activities under Wine of Moldova Academy initiative mainly target women. Moreover under “enhance wine culture WINEGROWING INDUSTRY and grow a mature local market” program, all ■ Tomai Vinex activities are mainly targeting youth willing to ■ ■ Tartcomvin enhance skills in hospitality and wine service. ■ ■■ Vinia Traian ■ DK Intertrade ■■ MCP assistance to improve Moldova’ light ■ industry competitiveness is inclusive of 7 ■■ Vinuri de Comrat apparel and footwear firms from Transnistria and ■■ CGL Prim/Kara Gani Gagauzia that are also large employers in this ■■ Kvint region, collectively employing over 3,000 people. ■■ Buket Moldavii These firms benefit of assistance in production ■■ Combinatul de Vinuri Taraclia management and productivity enhancement, as well as participation in leading international tradeshows, such as: Kabo international exhibition LIGHT INDUSTRY in Brno, Czech Republic, Leather&Shoes ■■ Odema exhibition, Kiev, Ukraine, Galychyna International ■■ IntercenterLux shoes exhibition in Lviv, Ukraine, Kiev Fashion ■■ Floare international exhibition, Baby Fashion exhibition ■■ Tighina in Kyiv, Ukraine. Technical assistance ranges from ■■ Tellus quality improvement, in particular improvement of ■■ Tellus-A factory productivity and product design, and trade ■■ Ridiager growth, especially to diversify away from Russia market, with good progress for regional trade.

■■ In the tourism industry, MCP continues to support the integration of Transnistria into key tourism routes – organizing international and local press tours, and information trips for tourism agencies to visit Transnistria to promote tourism in this region. Since Transnistria has genuinely distinctive characteristics as a unique reminder of past Soviet times, MCP supports the integration of Transnistria in tourism routes with the product name ‘Back to USSR’. In this respect, MCP included Akvatir Sturgeon Farm, Kvint Winery, Casa Karaman, Kumanek restaurant and Tiraspol city in the visit program for international journalists during the press trips organized in Y3. For the first time, in June 2018, MCP supported the organization of a B2B info-tour to Moldova for about 20 travel operators from China.

■■ In IT cluster, Educational Robotics program is implemented in two schools from Gagauzia (Avdarma village school and Theoretical Lyceum “G. Gaidarji” from Comrat).

In Y4, MCP will further support Transnistria and Gagauzia-based companies to participate in leading international tradeshows, as well as are benefiting of industry trainings and other important technical areas spurring compnanies’ competitiveness.

MONITORING AND EVALUATION MCP implements its Performance Monitoring Plan (PMP) that integrates the project’s technical approach, organization, and M&E system under a unified strategy, demonstrating rigor, feasibility, and consistency. The M&E system monitors progress against project targets, facilitates reporting of achieved results and provides data for reporting to USAID. Additionally, MCP utilizes an M&E database that has a strong query functionality offering the option to disaggregate data by gender, target industry, women-owned enterprises, and other key categories.

PROJECT YEAR FOUR WORK PLAN | 141 Implementing ongoing M&E Activities. The strength of project M&E lies in its ability to provide timely performance information enabling MCP to manage for results, improve project performance, and demonstrate impact. In Y4 MCP will continue collecting, tracking and counting data on its direct and indirect beneficiaries. Primary data will be collected on a monthly or quarterly basis from the assisted enterprises and entered into the database. An integrated, team approach to collecting and analyzing data helps the COP manage the team’s activity planning and provide accurate reporting to the client and beneficiaries. Analysis and communications are important elements of performance management. MCP collects performance and impact data and transforms data into information by performing appropriate analysis and providing context for data interpretation. The data analysis, as well as the achieved results are incorporated into the quarterly and annual reports.

Achieving Y4 targets. MCP performed excellently during its first two years of activity, meeting or exceeding annual cumulative targets, and progressed well during the third year of activities. To date, MCP has registered remarkable results in the progress towards quantitative indicators targets. This was possible due to the Project’s approach of working with industry associations, delivering sustainability and long-term impact, and enabling the Project to reach a wider number of SMEs.

►►Increasing productivity:

MCP Assisted Enterprises

■■ MCP now assists 584 SMEs, exceeding by 30% the 5-year target of 450 enterprises to receive assistance for improving knowledge, processes, technologies and practices ■■ 175 or 30% of total firms are women-owned ■■ 277 firms are applying the improved knowledge,

processes and technologies, exceeding Y3

target (210 companies) by 32% ■■ 110 firms are following TOT I TOURISM IT IT SI the recognized product or process standards, exceeding Y3 target (50 ■ T ■ companies) by 220%

►►Developping job skills through capacity building programs:

Over 20,500 professionals and youth benefited from MCP supported workforce development initiatives. To this important result contributed the innovative initiatives in STEAM, upgrading technology education and preparing youth for 21st century careers. These initiatives are: Educational Robotics implemented in 112 schools across Moldova, Academy Plus free coding school, GirlsGo IT and Coder Dojo community-based six programming clubs). In light industry, ZIPhouse Design and Technology Excellence Center provided professional trainings and community-building events, being a flagship institution in workforce development, supporting industry transition to higher value added by developing critical skills in fashion technology, design, marketing, and business.

142 | PROJECT YEAR FOUR WORK PLAN ►►Improving market linkages: Illustrative sales facilitation activities in Y4 Y1-Y3 RESULTS: INTERNATIONAL TRADE SHOWS ■■ 287 unique firms with sales facilitated up to ATTENDED date ■■ Over 9,100 market linkages ■■ Winegrowing: Vinexpo New York, China Food and Drinks Fair 2018, Prowein ■■ Over 2,300 companies’ participations at sales facilitation activities 2018, GoodWine Bucharest, Interwine Guangzhou ■■ Tourism: BITMilano, ITB Berlin, TT Warsaw, TTG Incontri in Rimini SALES FACILITATION ■■ Light Industry: Capsule Fashion Show in ACTIVITIES IN FY18 Los Angeles Panorama Berlin, Germany, ■■ 36 tradeshows Premier Manufacturing in Paris, France, ■■ 10 marketing campaigns Kabo international exhibition in Brno, Czech Republic Leather&Shoes exhibition, ■■ 16 B2B and B2C events Kyiv, Ukraine ■■ 177 firms with sales facilitated ■■ Over 800 companies’ participations at sales facilitation activities LOCAL EVENTS ■■ Over 5,300 market linkages established ■■ National Wine Day, Wine Vernissage, City Day, festivals (Devin&Degus, Mai Dulce, etc), fairs and pop-ups

►►Strengthening business enabling environment With MCP support, several important results were achieved towards strengthening the Moldovan business enabling environment in 4. A series of illustrative results are:

■■ With MCP support, the tourism private sector managed to prevent parliament’s ■■ 32 project-assisted public-private sector adoption of a new draft tourism law which dialogue platforms conducted up to date was detrimental for tourism development. ■■ 30 procedures eliminated, streamlined or ■■ Academia and the private sector joined simplified with MCP support to support Ministry of Economy and ■■ 31 Public-Private Partnerships established Infrastructure in the development of a White with 15,8M$ reported contribution Book for Reforming the Tourism Regulatory Framework. ■■ Moldovan parliament examined legal initiatives to amend the land code, creating preliminary step to facilitate owners of agricultural land to develop tourism facilities. ■■ An application to create Moldova’s first virtual IT park was submitted to the Government in November 2017, and approved on December 20, 2017. ■■ Moldovan PGIs became internationally acknowledged: In May 2018, ONVV became a member of the International Organization of Protected Geographical Indications (OriGIn), enabling it to access international knowledge and best practice in managing and promoting PGIs, and strengthen traceability and quality control. ■■ ANTRIM Director became member of the Prime Minister’s Council. This important milestone in strengthening the voice of the private sector to balance public-private dialogue was achieved with MCP support.

PROJECT YEAR FOUR WORK PLAN | 143 In Y4, MCP will focus on achieving or exceeding the following established performance indicators and continuing progress on Y4 targets that have already been accomplished.

Table. MCP Targets for Y4 (FY19)

Year 3 Years 1-4 Non- # Name of Indicator Cumulative Cumulative Targets Target

1 Value of domestic and export sales in targeted sectors $ 30M $ 580M

2 Increased value of sales facilitated on behalf of assisted $ 30M $ 110M enterprises 3 Value of new private sector investment in assisted enterprises $ 12M $ 46M

4 Number of enterprises receiving assistance to improve 50 400 knowledge, processes, technologies and practices 5 Assisted enterprises applying improved knowledge, processes, 70 280 and technologies 6 Assisted enterprises following recognized product or process 60 130 standards 7 Individuals receiving job skills aligned with industry needs 4,000 15,000

8 Percentage change in specified productivity measure (sales per +6% over +6% employees) previous year

9 Number of enterprises with sales facilitated through USG 80 290 assistance 10 Number of assisted enterprises in targeted industries with 50 160 increased financing 11 Financing accessed by assisted enterprises $3M $ 5M

12 Number of assisted enterprises in targeted industries with 50 160 increased investment 13 Number of regulations and administrative procedures eliminated, 6 24 streamlined or simplified with USG support 14 Number of Public-Private Partnerships established 10 35

15 Value of Public-Private Partnerships established $ 1 M $ 4 M

16 Improved capacity of local institutions +40% over +40% over baseline baseline

17 Project-assisted public-private sector dialogue platforms 4 16 conducted 18* Increased number of market linkages established with USG 50 200 assistance 19* Number of innovations supported through USG assistance* 10 100

20* Number of innovations supported through USG assistance with 10 90 demonstrated uptake by the private or public sector*

144 | PROJECT YEAR FOUR WORK PLAN *Additional indicators monitored by MCP outside the prime contract Mapping project activities. MCP CREATED MAPS MCP recognizes the importance of ■■ Building Enterprise and Workforce Competitiveness - presenting geo-referencing data MCP project level impact in targeted industries (assisted SMEs and and presenting data educational institutions) within geographic ■■ DCA in Energy Efficiency - presenting the results of improved access context. Consequently, to finance for entrepreneurs & individuals engaged in energy efficiency the project maintains and renewable energy sectors, thereby stimulating economic growth geographic information in connection with M&E, ■■ Cultivating Skills for Youth through National Robotics Program - presenting of innovating and scaling STEAM education for youth relevant technical and (through implemented Robotics activity) management data. Up to date, MCP created ■■ Bringing Tourism Dollars to Regions - providing details on MCP four maps presenting support for the development of sustainable tourism for economic its impact. In Y4, MCP prosperity, highlighting the tourism sites and events for foreign tourists will update the created that were launched or implemented with MCP support; the annual web-based maps and number of visitors to Moldova and to the events supported by MCP; will analyze its activities and assisted B&Bs and wineries that host tourists and the wineries to develop new maps. assisted to open doors in 2018 to the tourist

██ Sub-activity 1: Update MCP maps (January – February 2019) MCP will work on updating the created maps by including new beneficiaries- that are companies receiving MCP support for enhancing their competitiveness and people involved in MCP workforce activities.

██ Sub-activity 2: Create new maps underlining MCP support and achieved impact (November 2018)

MCP will focus to develop a map in light industry highlighting the total assisted companies, the companies that are one-woman and the rate of women employment in assisted companies.

PROJECT COMMUNICATIONS

Expected Outcomes:

■■ Regular bi-weeklies and newsletter sent to ■■ 4 industries animated infographics MCP stakeholders ■■ 10 info slideshows featuring selected MCP ■■ Updated Industries fact sheets (one pagers, activities, developed and posted on social two-pagers) media ■■ 1 event per month to engage donors, public ■■ 8 success stories developed for the quarterly authorities, academia, local and regional and annual reports - to also be submitted to media outlets USAID and Embassy of Sweden to publish ■■ 5 beneficiary visits that engage high and on their communications platforms mid-level donor representatives to reduce ■■ 1-3 posts per week on social media (on the distance between the donor and the Facebook pages of USAID Moldova and beneficiary Embassy of Sweden)

MCP will shift traditional communication methods to more targeted, streamlined and visible communications mediums aimed to highlight transformative successes that profoundly positively affect the industries driven by MCP. This means more analytics highlighting the positive transformations in focus industries.

PROJECT YEAR FOUR WORK PLAN | 145 Photo credit: USAID Photo caption: USAID Mission Director Karen R. Hilliard offering an in-depth interview on tourism for the Agora news portal

Communications Objectives O1. To promote MCP quantitative and quantitative results O2. To promote MCP knowledge in industry competitiveness processes and the know-how held by MCP O3. To explain the transformation process or increase awareness that key achievements in an industry competitiveness result was supported by MCP O4. To attract supporters for specific transformation/encourage positive approach/reactions to the changes O5. To inform about the opportunities and advantages for businesses and industries supported by MCP

Stakeholder mapping and target audience identification

Target Audience of the Moldova Competitiveness Project, financed by USAID and Sweden

I. DONORS II. GOVERNMENT III. ACADEMIA 1. Primary donors – USAID 1. Prime Minister/State (RECTOR, and Embassy of Sweden Chancellery, Ministry of PROFESSORS AND Economy, Ministry of Education, 2. US Embassy, USAID STUDENTS) Culture and Research, Ministry Washington and other US 1. Technical University from of Agriculture AN D Swedish Officials Moldova visiting Moldova 2. Government organizations - 2. Academy of Theatre, Music MIEPO, Tourism Agency, Agency and Fine Arts Implementer of Investments 3. Pedagogical University “Ion 3. Home office (Chemonics) Creanga” 4. University from Balti 5. Academy of Economic Studies in Moldova

146 | PROJECT YEAR FOUR WORK PLAN Target Audience of the Moldova Competitiveness Project, financed by USAID and Sweden

IV. OTHER DONORS V. PRIVATE SECTOR VI. GENERAL AND PARTNERS 1. Business associations – APIUS, PUBLIC SDC, EU Delegation, EU ATIC, ANTRIM, ONVV People from Moldova who Projects, IREX/Novateca, World 2. Businesses members of the consume locally made products, Bank, USAID projects sectorial association and are are aware about industries opinion leaders, technical development experts of their sectors 3. Businesses operating in target industries VII. MEDIA 4. Grantees/beneficiaries 5. Other business associations (AmCham, EBA, FIA, AFAM)

The project’s primary stakeholders were listed, then Influence over the project’s success was ranked on assigned scores on their importance to and interest the following scale: in project communications. Interest in the project’s activities was ranked on the following scale: 1 = Little to No Influence 2 = Some Influence 1 = Strong Opposition 3 = Unknown 2 = Moderate Opposition 4 = Moderate Influence 3 = Undecided/Unknown 5 = Significant Influence 4 = Moderate Support 5 = Strong Support In the chart below, the stakeholders are grouped into four categories as the basis of our communications strategy. “Low interest” means the stakeholder is not interested in MCP or its work, and “low importance” means they are not important to MCP or have little influence over the success of its work. Based on this categorization, a basic communications strategy emerges:

2) HIGH INTEREST/LOW 3) HIGH INTEREST/HIGH INFLUENCE INFLUENCE ■■ Business operating in supported industries ■■ USAID Sweden ■■ MCP Beneficiaries/ Grantees ■■ Government (Ministries and agencies) ■■ MCP employees ■■ Economic experts in MCP supported fields ■■ Academia ■ Small sectorial associations (ANTREC, ■ ■■ Sectorial associations (ATIC, ANTRIM, FPTM, ASW) APIUS, ONVV) ■■ Media ■■ Chemonics (Home office)

1) LOW INTEREST/ 4) LOW INTEREST/HIGH LOW INFLUENCE INFLUENCE (-) INTEREST IN PROGRAM (+) (-) INTEREST IN PROGRAM ■■ General public ■■ Opinion leaders/economic experts ■■ Other business associations (AmCham, ■■ Other donors EBA, AFAM, FIA) ■■ Bloggers ■■ Other USAID/Chemonics projects PROJECT YEAR FOUR WORK PLAN | 147 (-) INFLUENCE/IMPORTANCE TO PROGRAM (+) Group 1: Low interest, low importance: Keep in the loop. Group 2: High interest, low importance: Keep informed. Group 3: High interest, high importance: Constantly engage. Group 4: Low interest, high importance: Stimulate interest and strategically engage.

Although this stakeholder analysis is a relatively simple analytical tool, it allows the project to identify where its communications resources can potentially have the greatest impact (normally by engaging those in Groups 3 and 4).

STRATEGY AND APPROACH FOR EACH TARGET AUDIENCE CORELATED WITH THE COMMUNICATIONS OBJECTIVE

Target Objectives Approach Activities audience USAID/Sweden O1 Active direct ■■ Meetings, emails O2 communications O3 Feed with ■■ Bi-weeklies/ MCP newsletter O4 results-driven ■■ Reports (Quarterly/Annually) communications ■■ Success stories, ■■ Infographics ■■ Videographics/ video/ slideshows Reduce the distance ■■ Field visits/Press trips between the donor ■■ Industry breakfasts and the beneficiary ■■ Events Offer opportunities ■■ Calendar of events for visibility (events, ■■ Scene setters/speeches media) ■■ Media interviews – ensure video exposure in in- depth interviews for HL at least two per year Ensure corporate ■■ Install branding plaques at all beneficiary’s visibility premises ■■ Ensure correct placement of donor’s logos on all web/printed materials Government O1 Active direct ■■ Meetings, emails O2 communications / O3 Engage in PPPs O4 Inform about the ■■ Distribute MCP newsletter, success stories, O6 results infographics, videos created Opportunities for ■■ Events (speeches opportunities) PR ■■ Involve in communications campaigns ■■ Insert identities on all visibility materials (plaques on the wall, logos on the web materials) Other donors O1 Inform and ■■ Disseminate MCP newsletter, success stories/ O2 strategically engage Annual report/Infographics O3 ■■ Events (speeches opportunities) O4 ■■ Involve in communications campaigns ■■ Insert identities on all visibility materials (plaques on the wall, logos on the web materials)

148 | PROJECT YEAR FOUR WORK PLAN Target Objectives Approach Activities audience MCP Employee O2 Help/motivate to ■■ Regular staff meetings and recognition of the O6 communicate about role in the project success the project. Offer ■■ Involve as key speakers in in-depth press opportunities for interviews/editorials PR ■■ Develop professional photo bank ■■ Provide training in communications/public speaking Sectorial O1 Engage in public ■■ Active direct communications business O2 communications ■■ Distribute MCP newsletter, Annual Reports, associations O4 campaigns success stories, infographics (ATIC, ANTRIM, O5 ■■ Events (speeches opportunities) APIUS, ONVV) O6 ■■ Develop targeted, joint communications campaigns Academia O1 Active engage in ■■ Active direct communications O2 communications and ■■ Disseminate MCP newsletter, success stories/ O4 PR opportunities Annual report/Infographics for the ongoing ■■ Events (speeches opportunities) PPPs ■■ Engage in communications campaigns ■■ Insert identities on all visibility materials (plaques on the wall, logos on the web materials) Media O1 Provide ready to ■■ MCP newsletter O2 use information ■■ Engage in co-production campaigns (AgroTV, O3 and engage in agrobiznes, diez, agora, unimedia, ea.md, tv8) co-production ■■ Provide success stories campaigns ■■ Build personal relationship and increase the loyalty for the project

COMMUNICATIONS RESOURCES Such an ambitious roster of activities will require careful allocation of resources and the strategic use of outside communications resources. In Y4, MCP will dedicate the following resources to strengthen project communications:

■■ Internal communications specialist – works full time to ensure internal communications and communications with donors (USAID and Embassy of Sweden), manage PR and Communications subcontractor, coordinate the development of communications products to report on the MCP results (posts for social media, video reportages, animation, public presentations, interviews, organize field visits). ■■ PR and Communications company – to facilitate media relations and outreach of project activities to the general public and maintain a close, friendly relationship with journalists, editors and influencers in media sector. ■■ External communications specialist, native English speaker – to ensure the fine tuning for the communications with donors and US related communications (USAID bi-weekly newsletter, success stories, fact sheets and reports). ■■ Media partners – special projects with media company to create content (video, photo, success stories, info-graphics) and ensure placement to reach specific target audiences.

PROJECT YEAR FOUR WORK PLAN | 149 Moldova Competitiveness Project 14, Nicolae Iorga str., Chisinau, Moldova, MD-2012 Tel.: (+373) 22 908 280; Fax: (+373) 22 908 290 [email protected]