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Regional Innovation Monitor Plus Version 14 January 2014 Regional Innovation Monitor Plus Regional Innovation Report North East Region (Severoiztochen) To the European Commission Enterprise and Industry Directorate-General Directorate B – Sustainable Growth and EU 2020 www.technopolis-group.com Regional Innovation Monitor Plus Regional Innovation Report North East Region (Severoiztochen) technopolis |group| in cooperation with Plamen Shalafov, Ruslan Stefanov ARC Consulting EOOD / Applied Research and Communications Fund Table of Contents 1. Main Trends and Challenges in the Regional Innovation System 5 1.1 Recent trends in economic performance 5 1.2 Recent trends in regional innovation performance 8 1.3 Identified challenges 15 2. Innovation Policy Governance 16 3. Innovation Policy Instruments and Orientations 25 3.1 The Regional Innovation Policy Mix 25 3.2 Appraisal of Regional Innovation Policies 28 3.3 Good practice case 31 3.4 Towards Smart Specialisation Policies 31 3.5 Possible Future Orientations and Opportunities 33 Appendix A Bibliography 35 Appendix B Stakeholders consulted 37 Appendix C Statistical Data 38 Table of Figures Figure 1 GDP (nominal annual change) 5 Figure 2 GDP million PPS 6 Figure 3 Economic performance indicators 7 Figure 4 Share of R&D expenditure per sector of performance 8 Figure 5 Innovation Performance Indicators 10 Figure 6 GERD and GDP trends 11 Figure 7 Technological and non-technological innovators 11 Figure 8 R&D expenditure per sector of performance 12 Figure 9 GERD versus employment in 2000 and 2010 14 Tables Table 1 Innovation Policy Governance 19 Table 2 Innovation Policy Institutional Set-Up and Available Human Resources 21 Table 3 Existing regional innovation support measures 28 Regional Innovation Monitor Plus i PREFACE Launched in 2010, the Regional Innovation Monitor1 continues to be one of the flagship initiatives of DG Enterprise and Industry of the European Commission. From the outset, it aimed at supporting sharing of intelligence on innovation policies in some 200 regions across EU20 Member States. RIM Plus aims to help regions to improve their innovation policies based on better and harmonised policy intelligence. The new contract aims to contribute to the development of more effective regional innovation policies and promote policy learning. Building upon the experience gained and results obtained during the implementation of the RIM in the period 2010-2012, the RIM Plus service evolves towards providing practical guidance to regions on how to use the collected information, establishing a network of regional experts with thematic specialisation, and organising specialised workshops taking into account the relevance and potential interest among the regional innovation policy makers. RIM Plus covers EU-20 Member States: Austria, Belgium, Bulgaria, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, the Netherlands, Poland, Portugal, Romania, Slovakia, Spain, Sweden and the United Kingdom. This means that RIM will not concentrate on Member States where the Nomenclature of territorial units for statistics NUTS 1 and 2 levels are identical with the entire country (Estonia, Latvia, and Lithuania), Malta which only has NUTS 3 regions, Slovenia which has a national innovation policy or Cyprus and Luxembourg which are countries without NUTS regions. The main aim of 30 regional reports is to provide a description and analysis of contemporary developments of regional innovation policy, taking into account the specific context of the region as well as general trends. All regional innovation reports are produced in a standardised way using a common methodological and conceptual framework, in order to allow for horizontal analysis, with a view to preparing the Annual EU Regional Innovation Monitor Plus report. European Commission official responsible for the project is Alberto Licciardello ([email protected]). The present report was prepared by Plamen Shalafov ([email protected]) and reviewed by Ruslan Stefanov ([email protected]). The contents and views expressed in this report do not necessarily reflect the opinions or policies of the Regions, Member States or the European Commission. The Regional Innovation Access Point and Knowledge Hub presenting further details of the regional innovation measures, policy documents and regional organisations in Severoiztochen is accessible through the RIM Plus online inventory of policy measures here: http://ec.europa.eu/enterprise/policies/innovation/policy/regional- innovation/monitor/region/select Copyright of the document belongs to the European Commission. Neither the European Commission, nor any person acting on its behalf, may be held responsible for the use to which information contained in this document may be put, or for any errors which, despite careful preparation and checking, may appear. 1 http://ec.europa.eu/enterprise/policies/innovation/policy/regional-innovation/monitor/ Regional Innovation Monitor Plus 1 Executive Summary 1. Main Trends and Challenges in the Regional Innovation System Severoiztochen (the North East Planning Region, NUTS code BG 33) generates the second largest GDP in Bulgaria after Yugozapaden, where the capital city of Sofia is located. Although GDP and labour productivity over the period 2000-2010 grew considerably faster than the EU27 average, with €3,900 GDP per capita in 2010 (latest available data) Severoiztochen still ranks among the poorest regions in the EU. In 2012, unemployment was 18.1%, the highest level among Bulgarian NUTS 2 regions. Socio-demographic analyses of the region have revealed strong outward migration, especially among younger people, and rigid labour market incapable of attracting highly qualified personnel. Major economic sectors with long traditions in the region include chemicals, transport manufacturing, food processing, clothing, tourism and construction. Most economic activities are concentrated in the Varna agglomeration area, which has traditionally functioned as the single most important growth pole in Severoiztochen, largely due to its appeal as a tourist and logistical centre on the Bulgarian Black Sea coast. Most R&D institutions and 5 out of the 6 universities of the region are located in the city of Varna and account for the bulk of R&D expenditures in the region. In terms of digital development, Varna district (NUTS 3) has kept abreast with national trends and has featured 40.1% of households with broadband connection in 2011. The other three NUTS 3 districts all trailed behind. The region registers Gross Expenditure on R&D per GDP equal to 0.18%, which is five times less than the best performing Bulgarian region Yugozapaden and 9 times less compared to EU27 average. In view of the sharp drop in R&D expenditures in the region in 2010, it is very unlikely that Severoiztochen will be able to meet the goal it has set itself for 2020 of 2% of GDP R&D expenditures, which is a half percentage point above the national goal. Central government subsidies to universities and R&D institutions are responsible for almost all investments in research and innovation in the region. The lack of private enterprise R&D investment explains the sharp drop in overall R&D expenditure in 2010. The current analysis has revealed that the following are the three major challenges to the innovation development of Severoiztochen: Challenge 1: Expand the innovation potential of the region Existing assessments of the regional economy, as well as its underperformance against almost all research and business indicators compared to EU averages suggest that the innovation potential of the region is very limited. An immediate challenge in changing this performance is the creation of genuine regional innovation governance and management capacity in the public administration, which can help the regional research organisations and businesses increase and better leverage their R&D expenditures. Challenge 2: Strengthen cooperation between Triple Helix actors The small share of innovative SMEs collaborating with other companies and the lack of interaction between the public and the private R&D sectors indicates severed links between Triple Helix actors. One possible approach for the region to handle this deficiency is to create a functioning coordination mechanism for political, business, science and civil society stakeholders and focus on levering EU funds, in order to create more innovation intermediary structures. Challenge 3: Improve human capital 2 Regional Innovation Monitor Plus The capacity of universities and research institutions for training R&D specialists can be better utilised in order to supply the region with the necessary human resources to diversify the economy into high technology sectors. Existing pockets of technology entrepreneurship, especially in the Varna agglomeration area, can be used to spark innovations in some of the best-positioned sectors identified in the Regional Innovation Strategy from 2008, such as ICT, logistics, and maritime industry. 2. Innovation Policy Governance Innovation policy in Bulgaria is designed, coordinated and financed at the national level by multiple ministries and governmental agencies. The institutional framework is organised in a hierarchical, control-oriented way, thus allowing for no regional component in implementing innovation policies. Even though Regional Development Councils (RDC) formally exist as governance structures at NUTS 2 level, by law the six Bulgarian regions do not constitute administrative-territorial
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