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EIO Country Brief 2010: Romania

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EIO Country Brief 2010: Romania Eco-innovation in Romania EIO Country profiles 2010 April 2011 1 Eco-Innovation Observatory The Eco-Innovation Observatory functions as a platform for the structured collection and analysis of an extensive range of eco-innovation information, gathered from across the European Union and key economic regions around the globe, providing a much-needed integrated information source on eco-innovation for companies and innovation service providers, as well as providing a solid decision-making basis for policy development . The Observatory approaches eco-innovation as a persuasive phenomenon present in all economic sectors and therefore relevant for all types of innovation, defining eco-innovation as: ―Eco-innovation is any innovation that reduces the use of natural resources and decreases the release of harmful substances across the whole life-cycle‖. To find out more, visit www.eco-innovation.eu Any views or opinions expressed in this report are solely those of the authors and do not necessarily reflect the position of the European Commission. 2 Eco-Innovation Observatory EIO country brief 2010: Romania Author: Magda Burlacu Coordinator of the work package: Technopolis Group Belgium 3 Part 1. Introduction: Innovation and environment in Romania With a total area of 238,391 km2, Romania is the thirteenth largest country in Europe. According to the most recent census, which took place in 2002, the population is 21.7 million1. Romania is located at the meeting point of the Carpathian-Danube and Danube-Black Sea ecosystems and brings to the European Union a wealth of natural assets. The exploitation of these natural resources, in the form of both renewable and non-renewable raw materials, and their transformation into goods, determines the social and economic development of the country, its environmental status and the living conditions of its population. A few facts and figures related to Romania’s environment are provided in the box below. (SOP ENV 2007-2013) Natural and semi-natural ecosystems represent 47% of the country’s territory; the surface of natural protected areas covers up to 8%. 97.8% of the Romania’s hydrographical network belongs to the Danube River Basin; With an average of only 2,660 m3 water/inhabitant/year, comparatively with European average of 4,000 m3 water/inhabitant/year, Romania is one of the relatively poor countries in water sources; Only 52% of Romania’s population is connected both to water and sewage services; 79% of the wastewater are untreated or insufficiently treated and flows directly into natural receivers; Approximately 90% of waste is produced by mining industry, 4% by energy industry, 4% by other industries and only 2% is the municipal wastewater; only 2% of the recyclable waste materials is recovered; 234 out of 252 municipal landfills do not comply with environmental standards; additionally there are approx. 2,686 small dumping sites in rural areas The share of innovative enterprises in Romania is smaller in comparison to the EU 27 average. However in 2004-2006 there was an increase of innovation activities in enterprises (from 17% in 2000 – 2002 to 20% in 2002 – 2004 and to 21.1% in 2004 - 2006) [INS, 2006, 2008]. Furthermore, one of the main objectives of the National RDI Strategy for 2007 – 2013 is to double the share of innovative enterprises by 2013. The level of research and development expenditures is very low, representing about 25% from average level of EU27 (INS, 2008). In Romania, research and development (R&D) covers over 50 specific scientific and technological areas and continues to be predominant in the public sector (over 60 percent)2. In accordance with the Lisbon Strategy, Romania made a commitment to increase public expenditure on research to a level of 3 percent of GDP by 2010. Romania is one of the growth leaders among those countries catching up with the more developed EU member states, with an innovation performance well below the EU27 average but a rate of improvement that is one of the highest of all countries. Relative strengths, compared to the country’s average performance, are in the fields Innovators and Economic Effects; and relative weaknesses are in Finance and Support and Throughputs. The efforts undertaken by Romania in the process of accession to the EU have led to positive economic changes in the last few years. In order to achieve the objectives of the Lisbon Strategy and to speed up the transition to an innovative economy, the Romanian Government drew up its National Reform Programme, which highlights 14 key priority areas emphasising the role of innovation and environmental technology in economic development and improved competitiveness. According to the National Reform Programme, the efficient use of renewable and non-renewable resources, as well as the protection of biodiversity, are high priorities for Romania. One of the objectives in the reform 1 The next census is due to be carried out in 2011 (http://www.insse.ro/cms/files/RPL2002INS/index_rpl2002.htm) 2 http://ec.europa.eu/enterprise/policies/innovation 4 programme was to achieve a significant reduction in the rate of biodiversity loss by 2010 by using clean and eco-friendly production methods and new eco-efficient materials. Part 2. Eco-innovation performance The analysis in this section is largely based on the EU 27 Eco-innovation scoreboard (Eco-IS). Eco- IS via its composite Eco-innovation index demonstrates the eco-innovation performance of EU27 countries compared with the EU average and with the EU top performers. Eco-IS is based on 13 indicators which are aggregated into five components: eco-innovation inputs, eco-innovation activities and eco-innovation outputs as well as environmental outcomes and socio-economic outcomes Figure 2.1: EU27 Eco-innovation scoreboard, composite index According to the eco-innovation index, the overall eco-innovation performance of Romania is significantly below the EU average, placing it within a group of countries with a very low eco- innovation performance. Eco-innovation inputs The eco-innovation input index based on the indicators of R&D personnel, governmental allocation in energy and environmental research and the cleantech investment. The total R&D personnel and researchers in percentage of total labor force and total employment was at 0.43% in Romania in 2007, while the community average was higher, at 1.43%. This is clear sign of a shortage of technological and innovative capabilities of the country, which is a necessary prerequisite for promotion of formal R&D for eco-innovative solutions, as well as in generic areas. 5 The governments environmental and energy R&D appropriations and outlays are around 0.05% of GDP in 2008, the highest amount since 2004. This is slightly above the EU27 average performance in this indicator, which gives a positive impression. However, it is necessary to note that in January 2009 as a consequence of the economic crisis, gross expenditure on research and development (GERD) was cut to 0.18% of the GDP instead of the foreseen 0.89%. Following strong protests from the scientific community, it was supplemented one month later with approximately EUR 148 million, reaching 0.27% of the GDP (approximately EUR 430 million, 1 EUR = 4.2 RON), but still remained significantly lower than the 2008 GERD level. While the exact data specific to environmental and energy R&D expenditure is not available, one can expect a big cuts in these fields too. There was not cleantech venture capital investments project registered in Romania in 2007-2009, which is an indication of poor entrepreneurship capacity and lack of eco-innovative projects that have viable market potential. Figure 2.2: Eco-innovation composite index components, Sweden Eco-innovation activities As regards eco-innovation activities Romania is lagging far behind the EU27 average (35%). In terms of innovations targeting reduction of material and energy use Romanian companies perform 30% below the EU27 average. Based on Community Innovation Survey (CIS) results for the period 2002–2004, less than 15% of innovative enterprises in Romania indicated that their innovation contributed significantly to the reduction of material use per unit. The latest CIS-2008 shows that the situation in Romania has improved with 31% of companies using innovation to reduce material use, 32.8% reducing energy consumption, and around 22% reduced CO2 emissions through innovative activities. 6 The number of EMAS registered organization in Romania is low which keeps the country almost at the bottom of the EU27 ranking list. Currently three organizations in Romania have EMAS certificate (those are Oradea Metropolitan Zone, Sibiu Evangelical Parish (with two certificates for two different locations, and SC Schaeffler România SRL Braşov- from the industrial sector). In this regard, it is worth mentioning the fact that Romania has two approved EMAS environmental verifiers. Eco-innovation outputs Eco-innovation outputs are measured in the national patenting outputs in pollution abatement and energy efficiency field. The OECD statistics shows that in 2008 in Romania there was hardly any patent filing in the field of environment and energy. According to the Eco-IS (2008) country scores 1 while the EU27 average is 100. It is necessary to note that the intellectual property rights (IPR) system is still gaining its importance and the patenting institute is not well developed in Romania. According to the statistical research results in 2004 – 2006 periods, only 15.3% of innovative enterprises and 2.5% of the non- innovative enterprises have applied for mark registration. In the same period, 6.4% of innovative enterprises and only 1% of no innovative enterprises applied for invention patents. Most enterprises that go for protection of IPR are large ones. Environmental outcomes Regarding environmental outcomes Romania is positioned as the second last country. Material productivity (GDP/DMC) was below the EU average (1.51 EUR/kg) with 0.52 EUR/kg in 2007, representing 34% of the EU average.
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