Study on the Current Situation of Bis in the Republic of Serbia January 2020 This Publication Is Produced with the Assistance of the European Union

REPUBLIC OF SERBIA This project is funded Ministry of Economy by the European Union Ministry of Finance and co-funded by Department for Contracting and Financing the Government of of EU Funded Programmes the Republic of Serbia

Study on the current situation of BIs in the Republic of Serbia January 2020 This publication is produced with the assistance of the European Union. The contents of this publication are the sole responsibility of the GFA Consulting Group GmbH and may in no way be taken to reflect the views of the European Union. REPUBLIC OF SERBIA This project is funded Ministry of Economy by the European Union Ministry of Finance and co-funded by Department for Contracting and Financing the Government of of EU Funded Programmes the Republic of Serbia

Business incubators enabled to provide high value services to SMEs

January 2020 Study on the current situation of BIs in the Republic of Serbia

ISBN-978-86-902360-1-5

Table of Contents

3 4 List of Figures 6 Overview of Serbian Business Approach Used to Assess List of Tables 7 Incubator Development 22 Serbian Business Incubators (BIs) 34 Acronyms 8 3.1 Brief overview of the development of the BIs in the 4.1 Definition of the BI Republic of Serbia 22 Terminology 9 assessment sample 34 3.1.1 Definition of Business Incubators 23 Introduction and Purpose 4.2 Choosing an appropriate 3.1.2 Distinguishing between incubation assessment method for the BIs 34 of the Study 10 as a process and business incubators as organisations 24 4.2.1 Peer review methodology 34 3.1.3 Is there a unified legal definition of 4.3 Criteria for inclusion in business incubators in the BI assessment and the BI Republic of Serbia? 27 assessment sampling base 35 1 3.2 Current Strategic Support to Business Incubators in Serbia 27 3.2.1 The potential role for Business The Business and Innovation Incubators in Self-Employment Promotion 28 Ecosystem in the Republic 5 3.3 Phases of Business Incubator 12 of Serbia Development in Serbia 29 Performance assessment 1.1 Recent analysis and issues in 3.3.1 Early phase of Business Incubator developing the Serbian start- Development, 2004-2007 29 ofthe BIs in Serbia 38 up ecosystem 12 3.3.2 2nd phase - National recognition and support, 2007-2011 30 5.1 How many operational Business Incubators are 3.3.3 3rd phase - New wave initiatives there in Serbia? 38 and increased private sector involvement, 2012-2019 30 5.2 Basic assessment of BI initiatives 42 2 3.3.4 Conclusions for the Next Phase of 5.3 Description of the applied Business Incubator Development 32 methodology 43

International Findings 5.4 Basic assessment and BI on Business Incubator selection results 43 Development of Relevance to 5.5 Summary findings and results the Republic of Serbia 18 – Supply side analysis of BIs 46 5.5.1 Overview of Findings Related to BIs supporting High-Tech Start-ups 46 5.5.2 Overview of Findings Related to BIs supporting Self-Employment 47

5.6 Detailed findings and results – Supply side analysis of BIs 47 5.6.1 Basic Characteristics of the Business Incubators 47 5.6.2 Goals and market orientAtion 52 5.6.3 Operations Management and Financing 56 5.6.4 Support Services and Networking 62

4 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

6 7 8 Assessing Tenants’ Needs BI Roadmaps and Identified Conclusions and for Business and Innovation Suggestions for Upgrading BIs 88 Recommendations for Further Support services 68 Improvement at the Level 7.1 Main Conclusions from the of the BIs Ecosystem in the 6.1 Description of the applied Roadmaps 88 methodology 68 7.1.1 Dynamic tendencies in the Serbian Republic of Serbia 98 BI sector 88 6.2 Findings and analysis – 8.1 Main Conclusions 98 Tenants in the BIs 69 7.1.2 BI sector as an element of the National Innovation System 89 8.2 Core Recommendations 99 6.2.1 Background data on companies 69 7.1.3 Role of the regional/ municipal 8.2.1 Recommendations for Policy Makers 99 6.2.2 Relation with the BIs 69 governments in the development of the BI sector 90 8.2.2 Recommendations for High-Tech 6.3 Gap Assessment between BI Business Incubators 99 Service Supply and Tenant Demand 79 7.1.4 BI management competencies 92 8.2.3 Recommendations for Self- 7.1.5 Technology- vs. services-based BIs 93 6.4 Benchmarking of BIs services Employment Business Incubators 99 and recommendations on service 7.1.6 Leveraging the asymmetries in portfolio* 81 financial risk taking 94 6.5 Proposals for the Service 7.1.7 Balancing the private and the public 94 Portfolio Development 86 7.1.8 BI networking and clustering 96 6.5.1 Proposals for the Service Portfolio 9 Development of High-Tech Business 7.2 Ideas for Improving Business Incubators 86 Incubator Effectiveness and Efficiency 96 6.5.2 Proposals for the Service Portfolio Development of Self Employment Toolkits and Roadmaps 100 Business Incubators 86 Toolkit One 100 Methodology for establishing and improving the process of selection of BIs tenants 100

Toolkit Two 101 Methodology for measuring effectiveness and efficiency of BIs in Serbia 101

Toolkit Three 101 Methodology for carrying out Peer Reviews of BIs 101

Roadmaps 101

5 List of Figures

Figure 1. Serbia OECD 2018 SEE Figure 13. Objectives of SE BIs 55 Figure 26. Importance of the BI Competitiveness Assessment of services for development of tenant Incubators and Accelerators 16 Figure 14. Type of clients in SE BIs company in SE BIs 72 by origin 55 Figure 2. Likelihood of Business Incubation Processes in Different Figure 27. Regularity of using a HT Figure 15. Activities of client companies 56 Business Support Organisations 24 BI services 73

Figure 16. Funding of operations of Figure 28. Regularity of using a SE Figure 3. Typical Model of the HT BI 57 Business Incubation Process 26 BI services 73

Figure 17. Entrance criteria in HT BIs 58 Figure 4. Current Standing of Figure 29. HT BIs services that Serbia in a Phased Development of Business Incubation 33 Figure 18. Exit criteria in SE BIs 59 tenants receive 74

Figure 5. Mapping of Business Figure 19. Funding of operations of Figure 30. HT BIs services that Incubators in Serbia in 2019 39 SE BIs 60 tenants would like to receive 75

Figure 6. Founding partners of HE BIs 48 Figure 20. Exit criteria in SE BIs 61 Figure 31. Main Gaps in service provision in HT BIs 76 Figure 7. Size of HT BIs premises 49 Figure 21. Services Provided by HT BIs 63 Figure 32. SE BIs services that Figure 22. Effectiveness of Figure 8. Founding partners of the tenants receive 77 SE BIs 50 Capacity Development Business Services Provided by HT BIs 63 Figure 33. SE BIs services that Figure 9. Size of SE BIs premises 51 Figure 23. Services provided by SE BIs 65 tenants would like to receive 78

Figure 10. Objectives of HT BIs 52 Figure 24. Effectiveness of Figure 34. Main Gaps in service Capacity Development Business provision in SE BIs 79 Figure 11. Type of clients in HT BIs Services Provided by SE BIs 66 by origin 53 Figure 35. Average Scores for BIs Figure 25. Importance of the BI Figure 12. Activities of HT BI client services for development of tenant Across Five Strategic Development companies 54 company in HT BIs 72 Criteria 95

6 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

List of Tables

Table 1. Key Features of Business Table 13. Ranking of BI initiatives 45 Table 23. Proposals for Top 10 Incubators and Accelerator Programmes 18 services to be included in service portfolio of SE BIs 87 Table 14. Tenant companies Table 2. Main Goals of European relation with HT BIs 70 Business Incubators 19 Table 15. Tenant companies Table 3. Different Forms of relation with SE BIs 71 Business Incubation Models in Europe 20 Table 16. Main Gaps in Service Table 4. Main Services Provided in Provision by HT BIs 80 European Business Incubators 20 Table 17. Main Gaps in Service Table 5. Active Employment Policy Provision by SE BIs 81 Supporting Self-Employment 28 Table 18. Comparison of BI service Table 6. Main Phases of BI evolution 33 supply – Serbian HT BIs and European incubators 82 Table 7. Selection criteria for BIs supporting high-tech start-ups 36 Table 19. Comparison of BI service supply – Serbian SE BIs and European incubators 83 Table 8. Selection criteria for BIs supporting self-employment 37 Table 20. Comparison of HT BI tenant needs – ranking of used/ Table 9. Overview of the BIs needed services by Serbian and developoment in Serbia 2006-2019 41 European tenants 84

Table 10. Visited BI initiatives Table 21. Comparison of SE BI during initial assessment phase 42 tenant needs – ranking of used/ needed services by Serbian and Table 11. Summary of rankings of European tenants 85 BI supporting high-tech start-ups 44 Table 22. Proposals for Top 10 Table 12. Summary of rankings of services to be included in service BI supporting self-employment 44 portfolio of HT BIs 86

7 Acronyms

ADA Austrian Development Agency ITU Digital Innovation profile for Serbia BI Business Incubator Initiative JRC Joint Research Centre BIC Business Incubator Center KPI Key performance indicators BICs Business and Innovation centres MoE Ministry of Economy of the Republic of BINS Novi Sad Business Incubator Serbia BITF Business Technology Incubator of MVP Minimum viable product Technical Faculties NARR National Agency for Regional CRM Customer Relationship Management Development CSES Center for Strategy & Evaluation Services NBIA National Business Incubation Association EBN European Business Innovation Network NES National Employment Service EBRD European Bank for Reconstruction and NGO Non-Governmental Organization Development NIP The National Investment Plan EC/OECD Policy Brief on Incubators and NIS National Innovation System Accelerators that Support Inclusive OSCE Organisation for Security and Co- Entrepreneurship operation in Europe EDA U.S. Department of Commerce Economic PPP Public Private Partnership Development Administration R&D Research and Development EEN Europe Enterprise Network RARIS Regional Development Agency for EFQM European Foundation for Quality Eastern Serbia Management’s RAS Development Agency of Serbia EM Evaluation and monitoring process RDI Research, Development and Innovation EU European Union SC Selection Committee HEIs Higher Education Institutions SE Self-Employment HT High-Tech SEE South East Europe ICT Information and Communications Technologies SIDA Swedish International Development Cooperation Agency IDEAS Innovation Development Early Assessment System SMEs Small Medium Enterprises InBIA International Business Innovation STPs Science and Technology Parks Association TAT Technical Assistance Team InfoDev World Bank Group Program to Promote ToR Terms of Reference Entrepreneurship & Innovation TRL Technology Readiness Level InTER Institute for Territorial Economic TTOs Technology transfer offices Development UK United Kingdom IPA Instrument for Pre-Accession Assistance USAID US Agency for International Development IPO Initial Public Offering VC Venture Capital IPR Intellectual Property Right WBC Western Balkans Countries

8 Terminology

Terminology

Business incubators are defined as shared infrastructure with office and/or laboratory facilities that seek to provide their incubatees with a strategic, value adding business development services. Thus, business incubators, science and technology parks, co-working spaces, hubs, start-up centres, corporate incubators and acceleration initiatives.

Peer Review is the evaluation of work by one or several persons (peers) with similar competences. It is a form of self-regulation by qualified members within the relevant field. Peer review methods are applied to maintain standards of quality improve performance and provide credibility.

Accelerators programmes for supporting businesses to grow rapidly, through accessing a package of financial and capacity building support and mentoring, usually in return for an equity share.

Pre-incubators support focused on the pre start-up phase of business development, typically offering coaching, business advice and basic facilities (e.g. a workspace, equipment) to support development of business ideas and preparation of business plans.

University incubators based in universities and research centres, providing support to business ideas from students or academic personnel, as well as spin-offs from university R&D activities.

General purpose provide a broad set of services covering pre- to post-incubation phases to incubators those who have a feasible business idea. Typically, not sector-specific, or focused specifically on innovation or technology.

Sector-specific provide a broad set of services, and specific equipment or infrastructure incubators covering pre- to post-incubation phases, to those who have a feasible business idea within a specific sector (e.g. environment, agro-food, chemicals).

Coworking Spaces mainly provision of a physical space, often a shared desk, and are commonly found in larger urban areas. They may also offer basic incubation services, and offer workshops or networking events.

Corporate incubators invest in new businesses and start-ups linked to corporate goals or corporate and social responsibility strategies, and often have a medium to long term objective of taking ownership of more successful ideas that are incubated, and integrating them into the corporate portfolio.

9 Introduction and Purpose of the Study

Introduction & Purpose of the Study

A key priority for Serbia is strengthen- focusing on the development of incu- should be the initiators and supporters ing competitiveness of the economy, bators that support high-tech start-ups of this model. with special emphasis on innovation, as well as incubators that are focused entrepreneurship and micro, small and on the self-employment of vulnerable The study report presents a brief medium sized enterprises (MSMEs). groups. historic overview of the development As a component within this, one of BIs and business infrastructure in central objective is to reduce unem- To guide the development of the ser- the Republic of Serbia, as the context ployment and increase the ability vices provided by BIs to users, as well for more in-depth information and of young people to transform their as introduce public-private partnership assessment regarding the number of own ideas into successful business as a model for the future development functional BIs and their current service ventures. This requires policy assisted of business incubators, a compre- portfolio. This will provide the basis support directed towards those who hensive study was commissioned as for design of upgraded delivery of are just entering the business world, part of the project. This is designed services to users by BIs, supported by as well as small businesses who are to provide a baseline assessment the project. struggling with the daily challenges of on the state of existing BIs in Serbia, the market. their functionality and services they The performance assessment within provide. the study evaluates BIs from both the With the main purpose of strengthen- supply-side perspective of the BIs, as ing such policy support, the Ministry The analysis reported in this study well as the demand side requirements of Economy launched the project of the current situation of BIs in the of BIs from SMEs and start-ups. European Union Support for Business Republic of Serbia derives conclusions The performance of individual BIs, Incubators Development - EUBID, and recommendations on how to considering their business strategies, with financial support through the EU improve the efficiency, effectiveness, management capacities, willingness Instrument for Pre-Accession (IPA). impact and sustainability of BIs in the to change, commitment of founders This will build capacity of business Republic of Serbia. The recommen- and financial sustainability is as- incubators (BIs) in order to provide dations will contribute towards the sessed as well. The current services high value services to beginners in further development by the project of: provided are also examined in detail. business, ensuring further growth and 1) a mentoring program for improving The assessment also looks in detail development and thereby increase the business incubator services, focused at the needs of enterprises and SMEs’ survival rate of entrepreneurs in the on the development of the incubators demand for support services that market in the first years of operation. that support high-tech start-ups and should be provided by BIs. Through The implementation of this project the incubators that are focused on this joint demand-supply approach, commenced in January 2019, and will the self-employment of vulnerable a gap assessment is concluded on be completed in January 2021. groups; and 2) the introduction of pub- areas for service improvement. lic-private partnership as a model for The most important project task is to the future development of business Based on the assessments within improve the range of services busi- incubators through strengthening individual BIs, conclusions and recom- ness incubators provide to their users, the capacity of local institutions that mendations for further improvements

10 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

at the level of the network of BIs in Business incubators enabled with the support of the Serbia are presented. Roadmaps have to provide high value services Ministry of Economy of the also been produced for improvement to SMEs - EUBID project Republic of Serbia. The of individual BIs that were assessed. These are not included within this should contribute to increasing EUBID project is worth 1.5 main report, but have been made the competitiveness and million Euros, financed by available to the Ministry of Economy innovation of beginners in the European Union and as well as each of the assessed BIs, business. The project is aimed implemented by a consortium as the basis for planning of follow-up at improving the sector of led by GFA Consulting Group. activities. SMEs and entrepreneurship, The Study findings have been used for the development of three BI Toolkits that are available as stand-alone components and are shortly described in the section 9. Toolkits.

These provide practical methodologies for BIs to use to enhance their performance and operations, and evaluate how successfully they are providing support to start-ups and SMEs. Relevant templates, examples, and checklists are included within the Toolkits to aid use by BIs.

11 1 The Business and Innovation Ecosystem in the Republic of Serbia

In the recent EU Joint Research Centre well as with emerging EU assisted b) business incubators supporting (JRC) report on developing start-up financial support through EDIF, H2020 self-employment. innovation ecosystems1 within South and COSME. East Europe, it is noted that success In this chapter of the Study, we exam- requires many stakeholders working Within the ecosystems, business incu- ine some of the existing evidence on together, within unique ecosystems bators can speed up the development the contribution of Serbian business defined through a mix of cultural and of start-ups, create new jobs, and incubators to the development of the institutional difference, geograph- enhance the exploitation of technol- ecosystems supporting start-up, inno- ical position, and political context. ogy through supported networking vation, entrepreneurship and self-em- Business incubators form just one effects of linking technology, finance ployment4. element, albeit an important one, and know-how. within the broader start-up, innovation and entrepreneurship ecosystems of 1.1 Recent analysis and A new EC/OECD Policy Brief on Incu- the Republic of Serbia. These can be issues in developing bators and Accelerators3 emphasises regional or national, and help “start- that in addition to the widespread the Serbian start-up ups, SMEs, large-sized enterprises, evidence on the benefits of business ecosystem universities, and public organisations incubators towards higher business interact on a technological, social, survival rates, greater job creation, Regarding the development of legal and commercial basis in order and wealth and revenue created, there specific elements emerging within to produce knowledge, develop new may be untapped potential in using the Serbian start-up and innovation technologies and new business oppor- them more intensively in processes ecosystem, there is a wide range of tunities”2. of social inclusion, to support en- useful, recent studies, with recom- trepreneurs from under-represented mendations, that have been pub- This ecosystem development aligns and disadvantaged groups including lished in the past few years in Serbia with policy priorities of the Serbian women, youth, ethnic groups, the (as well as covering South East Eu- Government, including ongoing work unemployed, people with disabilities, rope and the Western Balkans more on tax reform, education and training, and older people. generally). We have selected some grant and loan programmes to SMEs contributions that are most directly through various institutions like the relevant to business incubators, and Innovation Fund, Cabinet of the Min- For this reason, we define two main highlight some important, specific ister for Innovation and Technological categories of business incubators issues. It should be noted that there Development, Serbian Development that we examine within this study: a) are also other reports focused on Fund, Development Agency of Serbia business incubators primarily support- more specialized topics, especially (RAS), and Ministry of Economy, as ing high-tech entrepreneurship, and those of relevance to developing

3 EC/OECD (2019) Policy Brief on Incu- 1 Basso, A. et. al. (2018) Start-up Innovation bators and Accelerators that Support 4 This is a selective review to identify and pres- Ecosystems in Southern Europe, European Inclusive Entrepreneurship, Luxembourg: ent key issues, and is not intended to provide Commission, Brussels, 2018, JRC113872. Publications Office of the European Union, a comprehensive summary of the available 2 Ibid p.4. doi:10.2767/092345. literature and reports on these topics.

12 In Centar Coworking space in Belgrade

self-employment (e.g. broader anal- compared with 55th place from the Their analysis notes that although ysis of SME development barriers5; previous year.9 Serbia is in group of the ecosystem is still at an early youth entrepreneurship6; participa- upper-middle income countries and in development ‘activation stage’, it has tion of women in entrepreneurship line with expectations for the cur- grown significantly in the past two and self-employment7; and social en- rent development level. Considering years, with growth of investments trepreneurship8), and other forms of strength of institutions Serbia is in in local start-ups and the overall innovation-related business support the 47th place among 129 nations, number of start-ups. Featuring in the within the ecosystem (e.g. clusters, by human capital & research on 59, world’s top 10 ecosystems are the science and technology parks, tech- business sophistication 63, infrastruc- sub-sectors of gaming and block- nology transfer offices (TTOs) etc.). ture 54, market sophistication 103, chain, where Serbia is amongst the knowledge & technology outputs 48 most developed areas. Accessible To provide context for the analysis of and creative outputs 65.10 For regional high-quality engineering staff are Serbia’s performance in developing comparison, the Global Innovation identified as a key advantage. business infrastructure and business Index 2019 shows Slovenia in the 31st incubators in support of innovation, place, Croatia 44th, Montenegro 45th we note that the 2019 Global In- and Northern Macedonia 57th. novation Index (GII) puts Serbia in 57th place (out of 129 countries), Sectoral specialisation can support smart specialisation

The Start-up Genome Network11 asks 5 Culkin, N. and Simmons, R. (2018) assess- a simple question: In which ecosys- ment of barriers to MSME development, tems does an early-stage start-up British Council, British Embassy and Swedish have the best chance of building a Institute global success? Based on analysis 6 Bobić, D. (2017) Youth Entrepreneurship in of more than 150 cities and towns Serbia: Mapping barriers to youth entrepre- and 54 start-up ecosystems around neurship, Centre for Advanced Economic Studies, GIZ the world, the 2019 report for the first time identifies the regional ecosystem 7 Jovanović, O. and Lazić, M. (2018) Women comprising Belgrade-Novi Sad Serbia Entrepreneurship in Serbia – Potentials and Constraints, Journal of Women’s Entrepre- as amongst the most promising start- neurship and Education, No. 3-4, 60-72; Beker, up locations globally. K et. al. (2017) Situation of rural women in Serbia, Shadow Report to the Committee for the Elimination of All Forms of Discrimination against Women regarding the fourth report- 9 https://www.wipo.int/global_innovation_ ing cycle of Serbia index/en/2019/ 8 Rosandic, A. and Kusinikova, N. (2017) Social 10 same as 9 Economy in Eastern Neighbourhood and in the Western Balkans: Serbia Country Report, 11 https://startupgenome.com/ecosystems/ DG NEAR belgrade-and-novi-sad

13 1 | The Business and Innovation Ecosystem in the Republic of Serbia

Encouraging Networking, knowledge Missing features of the system start-ups through digitally and experience within the include opportunities for early expo- based innovation ecosystem sure to potential clients and custom- As we will see in our analysis of Analysis on Serbian Start-ups for the ers, and targeting of international current business incubator clients, German-Serbian Chamber of Com- markets by accessing expertise that ICT-related businesses form a signif- merce in 201913 also highlights the has real experience in these mar- icant component of the client base, important role of ICT-based start-ups kets. Professionalism in presenting and are a strategically important for Serbia, noting the perception that ideas and market readiness may be sector for Serbia. The 2018 ITU Digital the ecosystem is still early-stage and constraining investments. Incubators, Innovation profile for Serbia12 provides fragile. Various forms of infrastruc- investors and start-ups all identified a comprehensive assessment of the tural and technical support, including lack of knowledge in market strat- innovation ecosystem and a digital various hubs, incubators, cowork- egies for developing sustainable transformation roadmap to develop ing spaces and accelerators have revenue streams. ICT centric innovation policies and emerged in recent years, providing programmes. Whilst the assessment entrepreneurial support, seminars The overlapping and sometimes of core ecosystem elements indi- and events. competing nature of the start-up cates a satisfactory development of ecosystem may require future con- business incubation and acceleration, These provide a basis for shared solidation and increased coordination many features of an integrated system connections, learning and develop- to increase market positioning and still need to be further developed and ment. A common feature is the pro- alignment with mission of different linked to business incubation. vision of coworking space, covering hubs and incubators. Within the financial costs of providing facilities, emerging ecosystem, the process The following current priorities for and which encourages interaction of successful founders that exit and developing digitally-based innovation between entrepreneurs: “Designers become part of the ecosystem as highlight actions that would comple- and programmers sit side-by-side to future investors and mentors should ment business incubation in support architects or businessmen” (p.14). enhance the system-wide knowledge of digital innovation: aligning the Start-up programmes are typically and experience transfer that will education system with the needs of short-term (around 3 months), cover accelerate progress. the IT industry; modernizing curricula relevant areas such as finance, mar- and increasing enrolment in IT studies; keting and sales, legal issues, proof Focus on linkage between encouraging IT sector investments of concept and market entry strate- start-up and scale-up through tax incentives; supporting gies. Similarity of content amongst The most recent 2018 assessment of domestic exporters of software; programmes and providers, and a South East European Start-ups by the subsidizing IT sector start-ups; and generalised approach that lacks sec- ABC Accelerator Group14 concluded subsidizing equipment and software tor-specialised focus, leads to com- that although Serbia is quite success- for SMEs. petition among the incubators, and ful in creating start-ups, there are some start-ups may therefore partici- not many good scale-up companies pate in several programmes. Mentors, emerging. It notes that policymakers experts, speakers and audience may need to implement data-driven deci- come across each other in various sion making, and Serbia should focus settings, through a well-connected on growing existing early stage start- and growing community. Media and ups through to scale-ups and towards social media coverage of the local exit. It highlights availability of start-up start-up scene has been increasing. weekends and hackathons supported through organization technology parks and start-up incubators.

13 Berndt (2019) Start-ups in Serbia: A glance 12 TU (2018) Digital Innovation Profile: Serbia — at the start-up ecosystem in Serbia, a study 14 https://abc-accelerator.com/wp-content/ ICT centric innovation ecosystem snapshot, conducted for and on behalf of the Ger- uploads/2019/01/South-East-Europe-Eco- Geneva man-Serbian Chamber of Commerce. system-Report-2018.pdf.

14 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

The lack of systemic financing of service provision or innovation” (p.13). Science and Technology Parks and Building trust is viewed as an urgent In relation to strengthening the business incubators presents political task. innovation ecosystem, the Policy risks for continuity. The ABC Accelera- Mix Peer Review concludes tor Group 2017 assessment15 high- Despite this, however, it is noted that: lighted that: that public universities are playing a significant role in the national innova- “the Serbian experience follows tion system of Serbia, and are active the pattern of other transition “Most of the actors in the in technology transfer and incubation, countries: large number of ecosystem have a basic especially in ICT and biotech/food. Their organisations have been set up understanding who does roles as drivers of local and regional thanks to international financial what, but the deeper innovation through science parks, and support. But after completing connections and exchanges technology incubators are identified. the initial phases most of these are lacking. It is important to Modes of cooperation include part- newly set organisations face lack note that the situation has nership with local governments and of efficacy and resources. Most been improving since 2016, national government, and international of the existing organisations where more connections donors. Good examples cited include suffer from inappropriate have been established and universities in Belgrade, Novi Sad, Niš development of competencies the actors are in closer and Kragujevac. Although the technol- and lack of funding. The peer communication. A good ogy transfer system is assessed as review team shares the opinion example is the cooperation being at an early stage, with significant that high priority should be given between ICT HUB and Novi improvements required to increase to the quality of services provided Sad Business Incubator, commercialization and research deal and to the development of new these two organizations have flow, significant service developments in internal competencies in the been organizing some events technology and innovation infrastructure upcoming years” (p.14). and mentoring sessions were observed through activities of new together, even though they science and technology parks, university almost didn’t know each technology transfer offices, public and Contributions towards an other a year or two ago… private incubators and several private agenda for business incubator Aside from the connection innovation promotion initiatives, mostly development between STP (and BITF) with in main university cities. Whilst the ITU assessment mentioned the technical faculties, there above marks incubators and accelera- is not that many connections Despite new business-technical tors as well supported, the 2018 OECD between academia and the incubators, science technology parks Policy Outlook Report on Compet- start-up ecosystem. The best and technology transfer centres within itiveness in South East Europe17 is communication on this level the previous five years, infrastructural somewhat more critical, identifying is in Novi Sad.” (p.35) innovation support was still found to be various areas for further development. lacking somewhat, due to lack of human The score (out of 5) given to Serbia and financial capacities. The lack of for incubator and accelerator devel- long-term and sustainable financing opment is 2, indicating a “Framework of business-technological incubators Building trust through specifically addressing the policy area through donor initiatives was noted. enhanced capacities concerned is solidly in place, officially adopted by the government or parlia- The Danube-IncoNET Policy Mix Peer One identified weakness relevant to 16 ment…The framework includes policy Review Report on Serbia noted weak business incubators was an observation features which are necessary to make linkages between universities and of limited staff with specialized capaci- it effective.” (p.33) established industry, whereby “compa- ties for start-up support, and incubators nies do not consider higher education management, and support to transfer organisations as good partners for technology through patenting etc.

15 https://abc-accelerator.com/see-re- 17 OECD (2018), Competitiveness in South East port-2017/. Europe: A Policy Outlook 2018, Competi- 16 https://danube-inco.net/object/docu- tiveness and Private Sector Development, ment/18797/attach/D4_32__Policy_Mix_ OECD Publishing, Paris, https://doi. Peer_Review_Serbia_final.pdf. org/10.1787/9789264298576-en.

15 1 | The Business and Innovation Ecosystem in the Republic of Serbia

ALB BIH OS

I 2 1.5 1.5 F RDI 0.5 2.5 1 F RDI 0.55 0.5 1 I 2.5 2 1 I 2.5 2 1 P 0.5 0 0 A 1.42 1.42 0.92

D NE SRB

I 3 3 1.5 F RDI 3 1 4.5 F RDI 1.5 1 1 I 2 3 2 I 2 1.5 1.5 P 1 1 0 A 2.08 1.75 1.75

Figure 1. Serbia OECD 2018 SEE Competitiveness Assessment of Incubators and Accelerators Source: Figure 9.14 of Competitiveness in South East Europe: A Policy Outlook 2018, on Innovation in firms: Sub-dimension average scores and indicator scores

The analysis notes that a range of Key findings that suggest a partial zz Improved Technology and Knowl- core services is being developed agenda for further business incubator edge Transfer: Whilst Serbia has within incubators, that are currently development include: set up science and technology providing relevant services such as parks (STPs), they have yet to co-working space, training and spe- zz Better Policy Leadership: efficient fully develop activities to facilitate cialized events such as hackathons implementation of adopted strate- knowledge transfer and linkages and start-up weekends (p.368). The gies requires improving horizontal between business and academia core funding structure for business co-ordination between ministries (p.344) incubator development is identified as and agencies, both at the deci- support via municipalities and NGOs sion-making and implementation (p.368). levels (p.379)

16 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

BIC Kragujevac

zz Sector-Focused Technology Trans- zz Addressing Missing Policy zz Assessing Cost per Job of Policy fer: Smaller-scale competence Elements: Technology extension Measures: Innovation events are centres with a sectoral focus might services, procurement for innova- being used to help to raise aware- prove more likely to achieve the tion and fiscal incentives for RDI, ness on business innovation ben- goal of knowledge transfer (p.371) to complement incubator infra- efits, but largely focus on a small structure, are largely absent from subset of firms, namely high-tech zz Sustainable STPs and BIs: The government policies. Serbia could start-ups (p.370), where the cost of costs and benefits of large STP consider implementing policies to job creation is relatively high (e.g. projects should be estimated care- spread new technology to a broad- €22k per job in the Serbian Innova- fully, and feasibility should focus er range of SMEs through tech- tion Fund) (p.371) on creating relevant links between nology extension services (EBRD science and academia, rather than experiences suggests a cost per zz Increasing Western Balkans’ simply operating as incubators or job estimate of €5k) (p.364) Regional Cooperation: regional training centres (p.371) centres of excellence to promote zz Providing Integrated Information collaboration between science, zz Strengthening Academic Link- Services: Information promoting technology and industry may ages: Belgrade STP is observed innovation is dispersed across the engage Serbia well with European as currently operating more as an websites of ministries, agencies, smart growth approaches (p.371). incubator than a fully developed NGOs and innovation centres and Science Park, where links to aca- so on, and integrated innovation demia are not well established, and websites could spread information collaboration between companies to firms more efficiently (p.371) and academia is still rather an ad hoc (p.375)

17 2 International Findings on Business Incubator Development of Relevance to the Republic of Serbia

There is an extensive body of literature The Telefonica analysis of business in- describing the emergence of business cubators and accelerators19, produced Asking the question ‘Aside from incubators across the world, providing as a contribution to European Com- money, what is the single most an extensive range of models, tools, mission Start-up Europe initiative20, important necessity for a start- benchmarking, detailed study, and highlights that business incubation is up?’ it found that the three most development recommendations. It still a growing trend in business sup- important needs that business is beyond the scope of this study to port, and between 2007 and 2013 the incubators can support are: report in detail on these here18. To number of European accelerators and 1) mentoring support (25%); provide brief international context to incubators rose by nearly 400%. 2) marketing support (15%) the present study of Serbian business and 3) co-working space (13%). incubators we present some stylised These three core support key findings from some core interna- measures account for more than tional studies of business incubation. half of the total needs identified as the main priority by clients.

A distinction is made between business incubators and accelerators, with main characteristics of each as follows:

Batches/ Equity Idea Physical Investor Time Average Geographical Types Mentorship Funding Cohorts Taken Sourcing Space Meetings Limit Stay Footprint

Some- 1-2 Incubator No No External Yes Yes No No All over Europe times years

Minority Some- 3-12 Accelerator Yes External Yes Yes Yes Yes Main city hubs Stake times months

Table 1. Key Features of Business Incubators and Accelerator Programmes Source: Telefonica (2013) The Accelerator and Incubator Ecosystem in Europe

18 A more detailed, recent comprehensive literature review on business incubation is avail- 19 Telefonica (2013) The Accelerator and Incu- able through the Erasmus+ funded project bator Ecosystem in Europe. Start-up Promotion for Economic Resilience (http://www.super-project.eu/ 20 https://ec.europa.eu/digital-single-mar- gap_assess-ment.php). ket/en/start-up-europe.

18 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

UBI-Global carry out regular impact support product and service devel- the type of innovative, risk-taking and performance analysis business opment; and value communication entrepreneur-focused cultures that incubators and accelerators, covering through outlining clear, commercial entrepreneurs, potential entrepre- more than 50 countries, their latest value propositions; neurs and entrepreneurial students findings for 2019-20 are due to be are looking for from business published in December 2019. Based zz Supporting technology transfer support. on their 2017-18 assessment21, they – providing a practical, strategic identify three core areas for improve- approach to technology transfer The recent Erasmus+ project ‘SU- ment of business incubator service where the business incubator can PER’22 provides a useful means of portfolios: help act as an intermediary to comparing our Serbian study results bridge the gap between academia with European findings covering busi- zz Supporting access to markets – and commercial market; ness incubator development in the UK, developing core focus on process- Spain, Belgium, Italy, Slovakia and the es for successful market access: zz Hiring the right people – making Czech Republic, from their study in value identification to identify sure that there is cultural fit within 2017. Amongst the relevant findings, insight into consumer behaviour the business incubator staff and we note that developing the regional and market trends; value creation associates hired for program ecosystem is seen as the most impor- through collecting research data to delivery so that it aligns well with tant goal of business incubators.

Top 3 goals of business incubator

All University Non-University % of total Incubators Incubators Incubators

To develop a regional ecosystem supporting early ventures and/or to enable people 50% 52% 48% to start their business in the region.

To select and support scalable high-growth ventures. 45% 45% 45%

To help students realize their business ideas. 42% 55% 28%

To support regional development and job creation. 32% 27% 38%

To support social entrepreneurship. 18% 21% 14%

To support commercialization of knowledge and technologies developed at the university. 16% 24% 7%

To match start-ups to corporates who will have interest in their skills /resources/ 13% 6% 21% technologies.

To support the development of specific sectors. 11% 15% 7%

To provide students with practical experience which develops life and career skills. 11% 12% 10%

To help disadvantaged communities / individuals with projects. 6% 3% 10%

Other. 10% 6% 14%

Table 2. Main Goals of European Business Incubators Source: SUPER survey report, March 2017

21 UBI-Global (2017) Impact and Performance of University-linked Business Incubators and Accelerators – World Benchmark 17/18. 22 http://www.super-project.eu/project.php.

19 2 | International Findings on Business Incubator Development of Relevance to the Republic of Serbia

There are different combinations of accelerator programmes and traditional business incubator approaches, with some incubators combining these, others running them separately, and others still having a completely different approach.

Non-university All incubators University incubators incubators

Type of Incubator (n=62) (n=33) (n=29)

Incubator only 50% 45% 41%

Neither incubator nor accelerator 22% 15% 31%

Both incubator & accelerator 18% 24% 10%

Accelerator only 10% 3% 17%

Table 3. Different Forms of Business Incubation Models in Europe A core purpose underpinning this Source: SUPER survey report, March 2017 study of Serbian business incubators is to determine what value-added services can be added to upgrade In terms of service provision, the most commonly provided services are: performance. As we shall see in our reporting on findings, most Serbian business incubators are small, with a limited management, administration University Non-university All incubators and technical support staff. We want incubators incubators to know, therefore, what types of issues business incubator managers Service provided (n=62) (n=33) (n=29) should focus on most, given such limited resource. Providing evidence Office space 94% 88% 100% on core factors that business incubators should focus on developing, Networking 79% 85% 72% the top five success factors identified amongst business incubators in the Pre-start-up courses 61% 72% 48% ‘SUPER’ survey are:

zz Business development and training Mentoring 56% 58% 55% activities;

Links to external investors 44% 42% 45% zz Connections to the wider business community; Business competitions / 40% 51% 28% hackathons zz Quality of applicants to the business incubator; Funding 34% 27% 41% zz Clarity of mission and strategy; and Consultancy 34% 24% 45% zz Incubator brand and reputation. Other 16% 21% 10% To provide some evidence on likely future trends in business incubator development in Serbia, we note the Table 4. Main Services Provided in European Business Incubators findings from the recent comprehen- Source: SUPER survey report, March 2017 sive analysis of business incubators

20 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

BIC Bački Petrovac

and accelerators in the United King- the best start-up applicants in the past few years, and a key dom23. Whilst the situation in the UK has increased, however, new policy challenge will be to foster and Serbia are quite different, the long programmes are moving towards further growth, whilst managing history and extensive development of less crowded environments in risks of political and regulatory business incubator and science park other cities, accessing different capture by corporate interests. sectors and clusters. The relevance models in the UK make it relevant for to Serbia is in understanding zz Diversification of incubation identifying how the business incuba- the different business models models – the main emerging tor network could develop into the and growth drivers between trend is the expansion of future. The UK study identifies four key accelerators and more classical online programmes. Within this emerging trends in business incuba- business incubators: “the different expansion, growth of accelerator tion, relevant to Serbia: business model of incubators, programmes appears to be more which is based on charging rent significant than growth in virtual zz Very rapid growth in the number or fees to residents, rather than incubators. A new trend is the of programmes and facilities – competing for and taking equity emergence of simplified pre- whilst both business incubators in the best start-ups, creates accelerator programmes (these and accelerators are expanding, different dynamics between them” provide very early stage support the rate of growth of accelerator (p.43). Linking incubator and to entrepreneurs who may join programmes indicates that accelerator growth with the smart an accelerator programme in the there may be more of these than specialization strategy would future), and ‘start-up studios’ (these business incubators within a short provide a strategic approach to generate multiple, parallel ideas time. For Serbia this suggests managing this challenge. in-house before spinning them out). that opportunities for accelerator As has been seen in recent years development need to be addressed zz The rise of corporate accelerators in Serbia, international business alongside development of business – more than half of accelerator support ideas are quickly copied incubators. programmes in the UK are now and adapted in the local market. As run by corporates, with the main we also note, however, the start- zz Expansion of incubators and explanations being: attempts to up ecosystem in Serbia is already accelerators outside the capital create entrepreneurial mind sets beginning to create overlapping city – business incubators have among corporate employees; solutions. The risk, therefore, is always been more geographically enhancing innovative brands that introduction of new models spread than accelerators, which that are attractive to customers, and approaches too quickly could have tended to cluster around partners and future employees; create a very confusing landscape the capital. As competition for speeding up business problem of available support options to solving at lower risk, and accessing any aspiring entrepreneur. Careful new capacities and market planning and management of access channels to expand into business incubation support 23 Bone, J et. Al. (2017) Business Incubators future markets. Serbia is also development, and extensive and Accelerators: The National Picture, BEIS experiencing notable growth networking amongst key research paper number 7, Department for Business, Energy and Industrial Strategy, in corporate acceleration and stakeholders are key to minimizing London. business incubation by corporates this risk.

21 3 Overview of Serbian Business Incubator Development

In this section, we briefly 3.1 Brief overview of the In general, previous analysis of busi- outline the main background development of the ness incubators in Serbia shows that, features behind the BIs in the Republic of despite the significant investment in developing physical capacities and development of business Serbia accompanying infrastructure, they are incubators in Serbia, before typically insufficiently and ineffective- presenting a definition of Strengthening the elements of ly implemented, and there are also business incubators used business infrastructure is mentioned serious gaps in terms of management in many strategic and programme team development inside the incuba- in the analysis within this papers of the Government of the study. The importance of tors, as well as conspicuous lack of a Republic of Serbia, the provincial long-term and systematic approach to this definition is in providing government of the AP Vojvodina and funding these systems by the state. explanation as to why there can also in many local councils’ strategic be no definitive answer to the documents. Establishment of business incuba- question of exactly how many tors was often not followed by their Given the poor economic indicators intensive development. In many cases, business incubators there are of the Serbian economy and weak in Serbia. the services provided by the incuba- infrastructure after 2000, especially in tors are minimal, focused on admin- the field of innovation, the government istrative and accounting services. As To further make this point on the prioritised work on building business a result of these problems and the challenges of accurately determining infrastructure that would enable eco- surge of economic crisis and political, the current number of business incu- nomic development, with particular fo- oftentimes local challenges, the ex- bators, we make a distinction between cus on development of SME compet- pected full impact of the investments business incubators as legally consti- itiveness. Business infrastructure in into business incubators has not been tuted organizations, and processes Serbia typically implies business incu- achieved. A low number of “incuba- of business incubation that can be bators, clusters, industrial zones and tors” are able to organize trainings used to categorize any organization technology parks, active at various and workshops for tenants, and only as a form of business incubator. This territorial levels and located across a few of them provide service users provides context to assessment of the the country. Within these varied forms, with core innovation services, such as current status of legal and operational the business support infrastructure intellectual property protection. definitions of business incubators in provides both capacity building Serbia, explaining why this distinction services as well as physical space for This generalised conclusion should between the legal and operational 24 performing business activities . be interpreted with some caution, characterisations of business incuba- however. There are no comprehensive tors is important. analyses of business incubators in Serbia, and our assessment of histori- 24 For an earlier review see Dragiša Mijačić, cal development is therefore based on (2011.): „Analiza stanja poslovne infrastrure a variety of sources. The present study u Republici Srbiji“ (“The Analysis of the State probably provides the most complete of Play with Business Infrastructure in the Republic of Serbia”), NARR, p. 8. overview to date.

22 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

Amongst prior contributions, analy- Technology Parks in Western Balkan data to participate in the benchmark- ses, and evaluations, we can usefully Region” , which contains a detailed ing exercise. mention the following that provide benchmarking exercise of selected useful insights, conclusions and BIs operating in the Western Balkan These include incubators located in recommendations that are largely still Subotica, Novi Sad, Zrenjanin, Bel- Countries (WBC) Region. This provides valid: World Bank comparative assess- grade (Palilula), Kragujevac, Užice, a good picture of selected Serbian ment in 2014 of business incubator Kruševac, Prokuplje and Vranje. Based performance, including analysis of BIs’ performance within a regional on this analysis, nine key challenges the Business Technology Incubator of context, albeit now slightly dated. Nine for business incubator development Technical Faculties Belgrade (BITF)25; BIs in Serbia responded to WBC-Inno’s were identified that still largely hold comparative Western Balkan regional invitation and provided the relevant true today: analysis of various Serbian business incubator’s performance within an assessment by the Tempus WBC-Inno 1. Increasing understanding of 5. Improvement of visibility and project published in 201426; mapping roles and importance of busi- promotion of existing BIs; of Serbian business incubators by ness/technology incubators Inter in 201727; unpublished regional and science parks among state 6. University support through en- analysis of science parks and busi- and local decision-makers; trepreneurship courses aiding ness incubators by the EU4Tech start-ups and spin-offs; project28. 2. Preventing ‘brain drain’, by moti- vating young and well-educated 7. Development of mentoring pro- The 2017 Inter mapping of business people to start businesses; grammes for inventive students incubators noted ongoing fluctuation whose ideas can be incubated in the number of BIs in Serbia, with 3. Having the appropriate legal in BIs; four new incubators having been es- framework and subsidies for tablished in the period 2011-2017, and development of innovative com- 8. Establishment of the evaluation 10 having shut down or changed their panies with export potential; system for monitoring of BIs/ purpose. In total the study identified STPs performances; 20 business incubators operating 4. Improvement of networking at in Serbia with an average of four all levels; 9. Organization of joint competi- employees each, with Belgrade having tions and awards. the greatest incubator density. This ever-changing scene highlights the difficulties in developing any definitive mapping on the state of business 3.1.1 Definition of Business incubation. Incubators

Perhaps of greatest direct relevance In practice, business incubation structure that enables it to flourish, to the current study is the WBC-In- can take many forms, within many in support of start-up and early stage no’s “Strategic Development Plan for organisational settings - all incubation business development. Business Incubators and Science and projects have very specific features related to their purpose, sources of As a result of this, there is no single funding, management structures, definitive answer on exactly how many 25 Infodev (2014) Impact Assessment of Busi- target groups and services provided, business incubators currently exist in ness Incubation Models in Eastern Europe and types of incubation. Consequently, Serbia. The estimate of the number of & Central Asia, Finance and Private Sector strictly defining business incubators active business incubators depends Development Department. Washington, DC: can be difficult, and not necessar- World Bank. on the specific definitions used. ily helpful towards understanding Within this study, we clearly set out 26 WBCInno (2014) Strategic Development Plan the many different roles of various the basis on which we have estimat- for Business Incubators and Science and institutional structures that support Technology Parks in Western Balkan Region, ed the scope of business incubators Tempus. early-stage business development within the Republic of Serbia, and the within an entrepreneurship ecosys- estimates and findings reported in 27 http://www.lokalnirazvoj.org/sr/publica- tem. Business incubation as a process tions/details/53. this study are valid in relation to the can be defined separately from busi- specific assessment and evaluation 28 https://eu4tech.eu/category/compo- ness incubators as an organisational criteria used. nents/science-parks-incubators/.

23 3| Overview of Serbian Business Incubator Development

3.1.2 Distinguishing between incubation as a process and business For the purposes of EUBID incubators as organisations project the business incubator is defined as a shared Business incubation processes relate Business incubation processes can infrastructure with office and/or to a core function of enabling young therefore occur in various organisa- laboratory facilities that seeks companies to overcome the start-up tional settings, such as classical busi- to provide its incubatees with a stage as successfully as possible, ness incubators, virtual incubators, strategic, value adding business to promote entrepreneurship and innovation centres, science and tech- development services. Thus, provide their contribution to reduction nological parks, coworking spaces, business incubators, science of the share of companies that do not makerspaces, managed workspace. and technology parks, co- “survive” the initial stages of business An illustration of this is provided in working spaces, hubs, start-up operations29. The processes can be figure 2, where the shaded area shows centres, corporate incubators facilitated through the provision of where processes of business incuba- and acceleration initiatives an appropriate package of services tion are most likely to occur. are included in the initial and support facilities, in a number of assessment. different ways, depending on needs of different target audiences.

Technological Level

L H

I E C S I B P L

H I C C Level of Management Support B C PI S P S I PA C P

SS I P B B B I A I C BIC T I H

Figure 2. Likelihood of Business Incubation Processes in Different Business Support Organisations Source: Adapted from Figure 2 in the CSES (2002) Final Report on Benchmarking of Business Incubators for the European Commission

29 Ibid.

24 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

Even within these varied organisation- The incubators offer a specific type of al types there may be: mentoring and a set of programs that Business incubators provide depend on the very type of incubator a number of micro-, small and a) sectoral variation and focus, e.g. be- and the type of “tenants” supported medium-sized enterprises tween production, technological and in their development. They may be with the possibility to start mixed-type incubators; deemed, if exercising their function their business in a favourable fully, as an “intervention” in the busi- environment, by using all b) variation in social objectives target- ness life of a company. Incubators the benefits of sharing the ed, e.g. incubators for social entrepre- differ by types of companies they premises with legal entities of neurship, green industry and circular develop, by the range and level of ser- similar profile. economy development; vices provided to direct and indirect beneficiaries30. c) client orientation, e.g. university incubators targeted at research faculty Business incubators are considered to Along with the premises they use, and students, corporate incubators be a “friendly” or conducive environ- companies can most often use other linked with activities of private comment for the development of SME-sec- common areas on very favourable panies. tor companies. What most frequently terms, such as presentations halls, comes across as benefits for the meeting rooms and the necessary Within the WBC-Inno strategic users of business incubator services communication infrastructure (access planning exercise for development are: pricing of business premises, to the internet and telecommunication of business incubators in the West- with a time-limited lease that is lower devices). As such, they constitute a ern Balkans, business incubators priced than free-market options (most link between the public and private have been characterised as adapted often progressively growing tanta- and they are a specific form of subsi- premises intended for development mount to the free-market one over dy32. of business incubation programs, time); provision of business services aiming at the enhancement of the through the assistance of the incu- An illustrative model of the business success rate of developing micro-, bator management in the process of incubation process, relevant to both small and medium-sized enterprises in company registration, business plan incubators supporting high-tech and their early stages, establishment and development, elaborating on ideas and self-employment, is shown below in development of business operations. protection of intellectual property; as Figure 3. Business incubators provide the users well as core business administration of their premises with preferential services such as accountancy support terms of lease, as well as the services and administrative/secretarial servic- developed in accordance with their es. Also, some incubators are able to needs and demands of the market and offer their own contact network in the of the business environment. process of necessary fund raising for the company’s business operations or for marketing services. The prices of all services provided are typically lower than those in the free market, sometimes subsidized by institutions, and at times resulting from volunteer mentoring support31.

30 See for example, Mandic, V et al. (2014), “Strategic Development Plan for Business In- cubators and Science and Technology Parks in the Western Balkan Region”, WBCInno, Tempus, Kragujevac.

31 Ibid. 32 Ibid.

25 3| Overview of Serbian Business Incubator Development

PREINCUBATION P

AIN INCUBATION I

INCUBATOR U

A E I N

POSTINCUBATION O

Figure 3. Typical Model of the Business Incubation Process Source: EC/OECD (2019) Policy Brief on Incubators and Accelerators that Support Inclusive Entrepreneurship, p.5

26 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

3.1.3 Is there a unified legal Business and technology incubators and infrastructural potential for organ- definition of business are defined as companies established izing training sessions35. incubators in the Republic for the purpose of rendering infra- of Serbia? structural support and networking of Business incubators are typically research and development organi- eligible to participate in a number of A frequent basic shortcoming in zations, or innovation organizations Serbian and European programmes. establishing business incubators is and business entities. Under Article For these, operational definitions of the difficulty in achieving financial 21, pertinent solely to business and business incubators are required that self-sustainability. Thus, they are technology incubators, they are spec- are consistent with the legal basis. commonly set up with ongoing public ified as companies whereby “the core Currently the eligibility for partici- policy subsidy, at least partly, due activity of which is making available, pation in programmes by individual to economic justifications based on for remuneration, business premises, incubators is assessed through ad- either minimising market distortions administrative, technical and other ministrative compliance on a case by and failures, creating local economic services to newly established compa- case basis, with little reference to their development multiplier effects, or pro- nies, no longer than five years upon inclusion (or absence) in the Ministry moting innovation as a public good. their establishment”34. of Education, Science and Technologi- cal Development’s register of business The common need for subsidy, This provides the legal basis for infrastructure. This demonstrates an perhaps explains the result that the operational definitions that can be operational weakness in the current prevalent form of incubators in Serbia used within strategies, programmes usefulness of the register, suggesting have been linked to public sector and projects to either clarify eligibility a need either for revision, or of adapt- institutions, although an emerging for various financial and non-financial ing it on the basis of additional supple- trend now is in the development of support programmes, or evaluate mentary legislation that incorporates privately-owned incubators, and vari- results and performance. a wider form of organisational types ous emerging forms of public private into the legal definition of business partnership. The Ministry for Education, Science infrastructure supporting innovation, and Technological Development is as well as infrastructure supporting As organisational structures that may responsible for monitoring their work local economic development and require financial policy support, a clear and registering them with the corre- self-employment. legal basis for providing this support sponding Innovation Activity Register. needs to be defined. Presently, this The Minister approves of the Rulebook 3.2 Current Strategic is clearly set out within the Law on defining the requirements for regis- Innovation Activity33, which regu- Support to Business tration with the Innovation Activity Incubators in Serbia lates the fundamental principles and Register, which implies the rights to organized approach to the application funding, on certain terms, from the There are currently three main Serbian of scientific knowledge, invention and national or local level, or from funds. Government strategies guiding the de- innovation, aiming at launching the For registration with the Innovation velopment of business incubators in development of the Republic of Ser- Activity Register it is required to have Serbia, as part of the broader business bia. A set of four main organizational a minimum of three employees with a infrastructure36. types are defined for the provision of university degree, at least three tenant infrastructural support to innovation companies dealing with innovation The Strategy for supporting the devel- activity that can be registered with and production based on high-level opment of small and medium enter- the Ministry of Education, Science knowledge and new technologies, to prises, entrepreneurship and compet- and Technological Development: 1) have no less than 20 square metres itiveness for the period from 2015 to business and technology incubator; 2) of office space per tenant, adequate 2020 (SME Strategy) highlights the science and technology park; 3) organ- equipment and internet access, significance of business infrastructure ization for stimulation of innovation conditions for providing technical for development of SMEs, with empha- activities in priority fields of science and consulting services necessary and technology; and 4) centre for for company development at an early transfer of technologies. stage, as well as human resources

35 The Rulebook on Registration of Innovation Activity and on Deletion from the Register, “The Official Gazette of the RS“, no. 16/2011.

36 Previous strategy and Government actions 33 Law on Innovation Activity (Official Gazette are well described in the Danube-IncoNET RS, No 110/2005, 18/2010 and 55/2013). 34 Ibid 37. Policy Mix Peer Review Report on Serbia.

27 3| Overview of Serbian Business Incubator Development

sis on: business incubators, industrial neurship, youth entrepreneurship and on ‘support for IT entrepreneurship parks/zones and technological parks. social entrepreneurship. and start-up projects’ defines support In addition to technological incubators for development of the ecosystem and STPs, it also stresses the role of The Strategy of Scientific and Techno- through support programs for associ- other forms of business incubation, logical Development of the Republic ations (IT clusters, start-up hubs, tech- especially for local economic devel- of Serbia for the period from 2016 to nology incubators) (Activity 1.2.1). opment in small regions, such as: 2020 - research for innovation defines linking industrial zones with business six main objectives, of which the Related to the IT Industry Strategy, the incubation support; business incu- most relevant to business incubator Plan of Priority Objectives and Activi- bation facilities targeted at special development is the strengthening ties of All State Administration Bodies interest groups in an area (e.g. young of the connection between science, and Government Services for IT Sector people, women, Diaspora returnees economy and society to encourage Improvement in Serbia is supporting to hometowns, creative industries, IT innovation. A number of measures projects to construct and develop Sci- sector, etc). defined within the current Action ence and Technology Parks, including Plan37 directly address this, including: business incubation facilities, and Within the SME Strategy, Pillar 4, improving the transfer of knowledge strengthen capacities of scientific and Dimension 1, identified the follow- and technology and encouraging the research institutes to develop high- ing relevant measures for business establishment of companies based tech cooperation with the economy. incubators: further development of on scientific research (“spin-off”) and business services for SMEs; further the advancement of the innovation 3.2.1 The potential role for development of trainings for potential ecosystem (Measure 2.3); establish- Business Incubators and existing entrepreneurs. Pillar 4, ing Public Private Partnership (PPP) in Self-Employment Dimension 2 defines the main basis (Measure 2.4); establishment and Promotion for support to BIs, including: systemic development of science-technology regulation of business infrastruc- parks at university centres that will We can additionally mention other im- ture development; development of enable the creation of new jobs / portant strategies focused on specific business infrastructure for innovative companies and transfer of technology entrepreneurship and self-employment SMEEs; and development of busi- (Measure 2.5.1). topics. For instance, the National ness infrastructure for regional and Youth Strategy for 2015-2025 aims to local economic development. Pillar Within the Action Plan for 2018 of the encourage job creation, self-employ- 6 addresses issues of relevance to Strategy for the development of the ment and entrepreneurship among developing BIs for self-employment information technology industry for young people and proposes meas- support, targeted at development and the period 2017-2020 the objective ures to encourage the development

Included in the measure

Active Employment policy 2014 2015 2016 2017 measure

Total Women Total Women Total Women Total Women

Training for the development of 12,029 5,515 12,660 5,802 12,469 5,663 entrepreneurship

Self-employment grants 850 363 3,803 1,688 3,594 1,563 3,680 1,848

Table 5. Active Employment Policy Supporting Self-Employment Source: National Report on Social Inclusion and Poverty Reduction in The Republic of Serbia

promotion of entrepreneurial spirit of self-employment programs, youth and encouraging of women’s entrepre- entrepreneurship and youth co-opera- 37 Government conclusion 05 Broj: 660- tives, especially aimed at developing 6063/2018-2.

28 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

high-performance and technology training, can apply for a self-employ- 3.3 Phases of Business intensive industries (information tech- ment subsidy. Incubator Development nology sector, industrial and technolo- in Serbia gy parks, etc.). Self-employment subsidies are defined in the annual Action Plan of the The emergence of the network of Similarly, national reporting on social National Employment Service40, and business incubators in Serbia can inclusion and poverty reduction38 high- the support provided includes profes- be broadly divided into three major lights a need for further stimulation sional assistance and resources in the phases, namely: of youth entrepreneurship, as well as form of self-employment subsidies. reporting on many active labour mar- Application is on the basis of regular zz Early phase of BI development ket actions in support of varied groups public calls41, with separate calls for (2004-2007); in Serbia, such as women and Roma. different target groups (i.e. Roma, The Table 5 indicates the considerable disabled etc.). zz National recognition and support numbers of persons participating in (2007-2011); the programmes, and suggests a clear For the current year, the self-employ- opportunity for closer collaboration ment funds (2019) are granted to zz New wave initiatives and increased between business incubators and unemployed persons, in the form of a private sector involvement (2012 active employment policy in furthering subsidy. Priority in granting self-em- to date). the development of self-employment ployment subsidies is given towards focused business incubators. young people up to 30 years of age, redundant employees, Roma, people 3.3.1 Early phase of Business The main support to self-employ- with disabilities, women. Different Incubator Development, ment for social inclusion and poverty levels of subsidy apply to self-em- 2004-2007 reduction is delivered via the National ployment of redundant employees, Employment Service and consists of and self-employment of persons with As early as 2001, the Government of information and advisory services, disabilities. the Republic of Serbia established the entrepreneurship development train- National Agency for Development of ing, as well as support in the first year As we commented previously, recent Small and Medium-Sized Enterprises of business through mentoring and European Commission / OECD policy and Entrepreneurship, with the main specialist training at the NES, regional briefing42 suggests a greater role can goal of supporting the development development agencies, etc. At present, be played by business incubators in and interests of the SME sector. By business incubators are not fully inte- social inclusion, and it provides some the end of the same year, with donor grated into these delivery structures. guidance on how this could be best assistance, the first regional agencies achieved. As a first step, the greater and centres for support to SME sector The National Employment Service integration of the work of the National development got established. training to start your own business39 Employment Service on supporting is currently provided through business self-employment could be more strate- The first business incubation initia- centres, and delivers two-day covering gically aligned and integrated with the tives in Serbia emerged around 2004-5 the following topics: economic moti- existing business incubators’ service and were supported by donors, namely vation for entrepreneurship; defining portfolios. by the Norwegian Government, the a business idea; the first steps in Organisation for Security and Co-op- business; legal aspects of business; eration in Europe (OSCE), Austrian taxes and contributions for entrepre- Development Agency (ADA), German neurs; business plan development. Government and the US Agency for Unemployed persons who decide to International Development (USAID). start a business, after completing the Operations of these incubators were fully financed by the project and the 40 https://www.minrzs.gov.rs/sr/dokumenti/ major challenge was how to secure predlozi-i-nacrti/sektor-za-rad-i-zaposljavan- the continuation of the BIs opera- je. 38 Third National Report on Social Inclusion and tions after donor funded projects are Poverty Reduction in The Republic of Serbia: 41 http://www.nsz.gov.rs/live/info/konkursi/ finalised. The Status of Social Exclusion and Poverty konkurs-nsz. Trends in the Period 2014–2017 and Future 42 EC/OECD (2019) Policy Brief on Incu- Priorities. bators and Accelerators that Support 39 http://www.nsz.gov.rs/live/trazite-posao/ Inclusive Entrepreneurship, Luxembourg: edukacija/obuka_za_zapo_injanje_sopst- Publications Office of the European Union, venog_posla.cid257. doi:10.2767/092345.

29 3| Overview of Serbian Business Incubator Development

3.3.2 2nd phase - National 3.3.3 3rd phase - New the cost of incubators to be financed recognition and support, wave initiatives and from state / local organizations / 2007-2011 increased private sector programmes, EU funds and billing involvement, 2012-2019 services. Recognition and support of business incubators by the Government of From 2012 to 2016, there were limited A Roadmap for Business Incubators, Serbia emerged fully in the period direct mechanisms at the national lev- Science & Technology Parks in Serbia 2007-2011. The Programme for el for financing of business incubator was prepared in 201444, forming Development of Business Incuba- operations. An emerging policy agen- the basis for specific activities on tors and Clusters in the Republic of da was refining ideas on how support business incubation defined within Serbia 2007-2010 was adopted by the could be improved and upgraded. the current SME Strategy. It includes Government of the Republic of Serbia, six main priority areas: awareness which proposed the establishment of The 2012 roundtable on “the impor- raising as key prerequisite for dissem- at least 15 business incubators and tance of business incubators, clus- inating the concept of BIs; supporting the National Association of Business ters, industrial zones and domestic capacity building through training on 43 Incubators as an umbrella organisa- economic development parks” how to set up BIs; fostering collaboration. Business incubators’ programme organized by Belgrade Chamber of tion, networking and coordination to development was designed to enable Commerce, the National Agency for promote BIs; implementing selected the creation of new jobs, opening Regional Development (NARR), the BIs to serve as multipliers to future of new enterprises and increase the Institute for Territorial Economic BI initiatives; ensuring viable financial competition through development of Development (InTER) and the Associ- funding structures for BI initiatives; entrepreneurship, with the purpose ation First Women noted the signifi- and other activities in support of busi- of the equal regional improvement of cant role of incubators in developing ness incubation. employability in economically undevel- entrepreneurship and start-ups. It oped areas. The National Investment recommended training incubator staff As a follow-up to the roadmap, a Plan (NIP) was used for the construc- to provide a wide range of services, Manual45 for the establishment and tion, reconstruction and adaptation of as well as identifying and developing development of business incuba- the incubator buildings. good relationships with potential tors was developed jointly between stakeholders for future incubator ini- NARR and GIZ in 2015. This provides Analysis by the National Agency tiatives. A change of incubator focus practical guidance to the management for Regional Development in 2011 was suggested, moving away from teams, and associated stakeholders identified a primary goal of developing physical incubation services towards of both existing and planned business business infrastructure development a wider provision of business services. incubators. as: ”an overall economic development A need for extension of the network to at the local, regional and national cover locations where no incubators In the 2012-16 period, the incubators level, with a special emphasis on currently exist was identified. Along- that were supported through the Na- polycentric development”. The actions side this, it was recommended that tional Investment Plan, were operated of business infrastructure entities are incubators should focus on specific by local governments as their formal often geographically limited, mainly sectors and build on identified com- founders that were directly funding to territories of municipalities and parative and competitive advantage in them46. Local government units towns, but sometimes also to wider the environment in which they operate. mostly continued to support and fund geographic units such as districts and To achieve this, strong integrated link- the incubators. The biggest share of regions. ages between incubators, clusters and operating expenses was funded from local economic offices would need local government budgets. The funds to be developed. Recommendations allocated for incubators in the budgets were made on defining a national of local governments amount to RSD 3 standard for business incubators, to to 7 million annually. regulate activities and measure performance. A public private partnership formula for funding was proposed of 33% - 33% - 33%, ie.one third of 44 Supported by GIZ Access.

45 приручник за оснивање и развој пословних инкубатора, Belgrade 2015. 43 See http://www.lokalnirazvoj.org/upload/ News/Documents/2012_07/Preporuke. 46 This does not refer to business incubators pdf. operating at the territory of Vojvodina.

30 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

Separately from the broader National ed through projects, along with the During 2018 and 2019 the Cabinet of picture, through the Programme for furnishing of the incubator premises the Minister of Innovation and Techno- Economic Development of the Auton- for new tenants. It should be men- logical Development announced calls omous Province Vojvodina 2014-2020, tioned that other legal entities that for proposals for business incubators the Development Agency of Vojvodina are eligible to apply can also compete that can submit their projects for three is financing the work of business for the funds with the Development large programmes realised by this incubators on an annual basis. The Agency of Serbia and the approval of government body: success of this funding mechanism is project funds depends on the quality evident, since all business incubators of project proposal. zz Support Programme for Opening created through Vojvodina Govern- Regional Innovation Centres, ment programme are functional, have tenants and directly contribute to the RAS Program of Financial zz Promotion and Popularising of development of entrepreneurship and Support to Business Incubators Innovation and Innovative Entrepre- small and medium-sized enterprises. for 2016 included specific focus neurship Programme and on supporting new and existing Further impetus towards implement- incubators and development of zz Support for Development and ing support to business incubators new incubator support services. Promotion of Women Innovation came from changing strategic Results of this programme Entrepreneurship Programme. direction at national level. Government included 4 new business policy has been significantly updated incubation facilities being Business incubators can apply for and reformed in recent years, and is supported: Timok Youth Center funds in all three programmes, and the strongly supportive of entrepreneur- (Pomak); Business Innovation Cabinet of the Minister of Innovation ship, as demonstrated by the original Center Kragujevac; BI Kruševac; and Technological Development has Year of Entrepreneurship in 2016, and and Project START(ME) virtual allocated significant funds for these the introduction of the new Minister incubator, In addition, support programmes. without portfolio responsible for inno- services for MSMEs were vation and technological development. developed within 7 business In parallel to the Government pro- incubators through 9 projects: grammes, a number of private By establishing of the Development BIC Užice, BI Kragujevac, BI Novi initiatives of HUBs and co-working Agency of Serbia (RAS) in 2016, the Sad, BI Kruševac, Nova Iskra, emerged, mainly in bigger cities, possibility for direct financing of Bački Petrovac, BIC Yumco especially Belgrade, which were also business incubators operations from Vranje. Additional support was supported partially by donor funding. the central level was reintroduced. provided to IHIS Zemun and STP These established and commenced The Development Agency of Serbia Belgrade. operations in a relatively short time, announced the first call for proposals quickly achieving full occupancy and in 2016, and after that it renewed the waiting lists of potential tenants. For call by inviting incubators to submit RAS Program for Economic Develop- example, in 2014, USAID financially projects. This financial mechanism ment Improvement Support47 in 2017 supported the establishment of ICT has directly contributed to the devel- focused on improvement of services Hub in Belgrade with USD 300,00048. opment of entrepreneurship through provided to the end-users of business The goal of establishing the centre enabling the incubators (both those support organisations. It supported was to identify and promote the for self-employment and entrepre- seven business incubator projects, innovative IT companies and individu- neurship development as well as IT including an IT incubator in Vranje, als developing the ideas by providing incubators) to implement activities development of women’s entrepre- technical assistance for them. such as trainings, courses and other neurship in Kruševac, entrepreneur- forms of business advisory, and phys- ship promotion in Prokuplje and IT and In 2019, USAID continues to support ical facilities in support of business digital competencies in Nova Iskra. the second IT incubator in Belgrade development. - Impact Hub. Impact Hub is implementing the three-year programme Also, through economic development projects managed by the RAS the incubators have the possibility to prepare various surveys and analyses, and the infrastructure works on their new 48 https://www.usaid.gov/news-information/ or existing premises could be fund- 47 http://ras.gov.rs/uploads/2017/04/poziv. fact-sheets/ict-hub-–-global-develop- pdf. ment-alliance.

31 3| O verVIEW of Serbian Business Incubator Development

WE Founders49 (total value of USD 1 in Belgrade50; new incubation and long-term and sustainable financing56. million) in cooperation with the As- acceleration services being intro- To identify the challenges to be faced sociation for Female Affirmation and duced into Serbia, and the emergence in effectively using smart speciali- Association of Businesswomen in Ser- of strong associations and NGOs sation to drive business incubator bia. This initiative should contribute supporting business incubation51; development towards network hubs to higher participation of women in IT new forms of business acceleration, and areas of innovation, we need to business while the project partners such as the model being developed understand how business incubation will provide direct mentorship and in the Biosens Digital Innovation Hub has developed in Serbia historically. financial assistance for women who for agriculture Accelerator52; intro- The analysis presented shows some launch their IT start-ups. duction of corporate incubation and clear trends, together with gaps in acceleration programmes53; increased knowledge that this study seeks to It should be mentioned that other coworking space adapted to specific fill. It also highlights the importance international donors had occasion- sectoral needs (e.g. Nova Iskra for of not only considering business ally supported the work of business the creative industries, and STARTIT incubators in relation to innovation, incubators in Serbia. For example, Centres across Serbia in ICT); leading but also carefully considering their the German development agency GIZ international business accelerator contributions to local economic de- has supported the work of incubators, programmes, such as Techstars, 500 velopment, self-employment and job whilst through some EU funded pro- Start-ups and Seedcamp exploring op- creation more broadly. This justifies, at jects (RSEDP2, Exchange) some of the portunities in Serbia; and emergence least in part, our analytical separation activities of the business incubators of international strategic partnerships, between studying business incuba- were financed. In 2011 and 2012, the such as Startit’s Start-up Academy tors that support high-tech and those Dutch organisation SPARK assisted partnering with Google Launchpad supporting self-employment. the work of several business incuba- during 2018 to become the first tors, such as the ones in Vranje, Kragu- European accelerator within Google’s The development path of business jevac, Užice, Prokuplje and Belgrade programme54. incubators and science and technolo- by funding the specific projects in the gy parks in any country typically goes value of EUR 100,000 for each. 3.3.4 Conclusions for the through a number of stages. Within Next Phase of Business the science park and business incu- A further, recent trend that should be Incubator Development bation literature, a commonly agreed remarked on is the emergence of cor- model identifies three main stages: porate support to business incubation, Serbia’s will launch the new smart spe- i) development of core facilities and as private initiatives, such as Telekom cialisation strategy in the 4th quarter premises and basis services; ii) im- Srbija’s support of StartIT, and the of 201955. It recognizes business incu- proving services and interaction with establishment of Delta Holding’s ‘Delta bators as participants in the Strategy and between clients; and iii) enhanc- Business Incubator’. Such initiatives implementation processes and a next ing strategic linkages and partner- are developing rapidly, with new mod- phase of business incubator devel- ships the innovation ecosystem. els emerging such as the September opment should focus on provision of 2019 opening of the Nordeus Hub, as A commonly proposed fourth genera- a free co-working space in New Bel- tion model for development currently grade, created to support the gaming being actively pursued by members industry. 50 https://ntpark.rs/en/services/#stp-servic- of the international association of es. science parks and other business In conclusion, during this third phase 51 Such as the Digital Serbia Initiative, and Serbi- incubation organisations is that of we have observed the emergence an Entrepreneurs, SPEA, and SEE-ICT. ‘areas of innovation’57, linking ecosys- in recent years of a very vibrant and 52 https://biosens.rs/?page_ tems of cities and regions – especially dynamic start-up scene, especially in id=10936&lang=en. Belgrade and Novi Sad, but extending 53 https://www.ekapija.com/en/ to other regions, including: mature start-up/2197719/companies-mak- 56 https://s3platform.jrc.ec.europa.eu/ incubator facilities, providing a wide ing-increasingly-more-invest- documents/20182/223684/R%26I+Strate- range of facilities and business ments-in-startups-quick-technology-devel- gy_Serbia.pdf/52210381-13c9-450b-8001- opment-creating-synergy. incubation services, such as the Sci- c3a257b8549e. ence and Technology Park Zvezdara 54 http://en.startit.rs/google-to-grow-the-ser- 57 bian-startup-scene-in-partnership-with-star- See, for example, Parry, M (2018) The Future of Science Parks and Areas of Innovation: tit/. Science and Technology Parks Shaping 55 https://pametnaspecijalizacija.mpn.gov. 49 https://belgrade.impacthub.net/we-founders. the Future, World Technopolis Association, rs/. https://doi.org/10.7165/wtr18a0430.18.

32 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

Generation Suggested value Significant offering

1st Generation Economies of scale and job creation Office spaces and premises

2nd Generation Value adding services and training Coaching and training

3rd Generation Enhanced access to external resources Networking and linkages

Table 6. Main Phases of BI evolution through smart specialisation ap- business incubation within innovation proaches58. This movement towards ecosystems, is both timely and im- 4th generation business incubator and portant for successful exploitation of science park models, together with the sector-focused strategic approach use of smart specialisation tools and that smart specialisation will encour- Areas of innovation - linking 59 approaches to enhance the roles of age. cities and regions

Current level of business incubator development in Serbia?

3rd Generation - “Network Hubs” building partnerships and strategic linkages

2nd Generation - “Motors of Growth” adding services and client interaction

1st Generation - “Place” property-based and creating legitimacy

Initiation - concepts and first-stage initiatives

Figure 4. Current Standing of Serbia in a Phased Development of Business Incubation 58 Nauwelaers, C., Kleibrink, A. and Stancova, K. (2014). The Role of Science Parks in Smart Specialisation Strategies. S3 Policy Brief Series, No. 08/2013. European Commission, Joint Research Centre, Institute for prospec- tive Technological Studies, Spain.

59 See for example the knowledge repository of the S3 Platform https://s3platform.jrc. ec.europa.eu/knowledge-repository.

33 4 Approach Used to Assess Serbian Business Incubators (BIs)

Whilst previous chapters have set out that 40 initiatives are operational60. tenant companies. There are many the history of, and framework for busi- The number was continuously updat- challenges involved in evaluating BI ness incubator development, we turn ed after site visits. performance. now to the specific data and analysis of results from the study. In this chap- In order to provide an updated Assessment methodologies that are ter we outline the main methods used information regarding the number recognised internationally as good to collect and analyse the data, whilst of functional BIs and their service practice methods and that are used the subsequent two chapters provide portfolio all the business incubation by world renowned organizations and a) the main assessment findings for initiatives were planned to be visited associations have been analysed61 the supply side of the business incu- and quick scan questionnaires filled-in and Peer review approach as best bators’ providing services to clients, during the visits. In practice, 36 busi- addressing the purpose of the in-depth and b) the demand-side assessment ness incubators were actually visited, assessment of BIs with different back- of needs of client and tenant compa- and the data and information from 35 ground and experience was chosen. nies. were validated and provides the base evidence and information source. 4.2.1 Peer review methodology 4.1 Definition of the BI assessment sample 4.2 Choosing an appropriate Peer Review (PR) is the To obtain updated information regard- assessment method evaluation of work by one ing the number of functional BIs, the for the BIs or several persons (peers) TAT conducted desk-based research, with similar competences to on-site visits, as well as consultations At a global level, there are various the producers of the work. with the Project manager during the methods for assessing incubators, It constitutes a form of inception phase. The initial list was and estimating the incubation impact self-regulation by qualified comprised of business incubation for the community, incubators and members within the relevant initiatives that were identified during field. Peer review methods desk research of publicly available are deployed to maintain information, previous surveys and standards of quality, improve studies, contributions from MoE, RAS, 60 As of writing of the Study, there were performance and provide other sources, including donor activi- several initiatives in a process of establish- credibility. ties and international projects that are ment under a Support programme for the being implemented in the Republic of Establishment of Regional Innovation Startup Centres of the Cabinet of the Minister without Serbia. portfolio for Innovation and Technological Development. The following Regional Innova- The exercise helped to identify 56 initi- tion Startup Centres (RISC) were not visited atives in Serbia that could be regarded and are not taken into account in the Study: as business incubator initiatives. The RISC of Subotica and Faculty of Economics in Subotica, RISC Gorni Milanovac and ICT 61 We are aware of many other evaluation and follow-up direct phone calls confirmed Hub, Arilje Municipality and Secondary school benchmarking tools and methods, and report “Sveti Achilije”, RISC of City of Užice and Re- on four common ones after having reviewed gional Development Agency Zlatibor, RISC of other options. These are selected as ones Municipality Priboj and Industrial Park Priboj, that have been found to be highly relevant Municipality of Svilajnac and ICT Hub. and useful in practitioner circles.

34 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

The objectives of PR assessment of Core advantages of the PR approach folio upgrade and capacity building business incubators are to: include the following: with EUBID project support.

zz It is non-normative – capturing In order to address objectives of 1. Increase and improve the each organization in its context; the Business Incubators Enabled to management capacity; Provide High-value Services to SMEs zz It focuses on strengths, and “oppor- project, business incubation initiatives 2. Contribute to interconnected tunities for improvements”; were grouped in two categories: organisations with strength- zz It is an open, sharing, and empa- ened performance, leading thising approach. 1. Business incubators supporting to more optimal utilization of high-tech start-ups; resources; Most importantly, through engage- 2. Business incubators supporting 3. A more even and professional ment with business incubators, it self-employment; level of operation will enhance enables development of practical the ability to manage infra- guidelines and recommendations Business incubation initiatives provid- structure efficiently and to for the further development of each ing business and innovation support deliver results; business incubator participating in the services (co-working spaces, accelera- process. tors, HUBs, etc.) were also included in 4. Contribution to improvement further assessment. of governance structures and 4.3 Criteria for inclusion A distinct set of criteria was used for organisational set-up; in BI assessment and each category for further selection 5. Networking of BI initiatives. the BI assessment of BI initiatives. Each criterion has a sampling base value grid of 3, where 1 is weak, 2 – moderate, 3 – strong. Every incubator Whilst our initial analysis had con- was given values for each criterion The PR approach puts more emphasis firmed that 40 initiatives are operation- and the average rank indicates if the on the exchange of information and al, 20 BIs were selected for inclusion BI initiative is suitable for further in- the generation of insights during the in the in-depth assessment – Peer clusion in the in-depth assessment as meetings with BI management and Review assessment. well as capacity building and service stakeholders (municipalities, universi- portfolio upgrade. ties, tenant companies, alumni, etc.) After the on-site visits, information The average value below 1,5 indicates instead of acquiring the information from the business incubation ini- that the BI initiative is not suitable (red via online questionnaires only. tiatives was further analysed and mark) for further inclusion in project assessed in order to select them for activities, the average value equal or The selected PR methodology allows further inclusion in BI assessment ac- above 1,5 and below 2,5 indicates a flexible approach. The full descrip- tivities (Peer Reviews). This narrowing that the BI initiative is suitable (yellow tion of the method, including how it down of the overall sample towards mark) for further inclusion with ad- might be replicated in future assess- a group that were assessed in detail ditional conditions, average value of ments is included as Toolkit 3 in the was carried out to identify a core equal or above 2,5 – the BI initiative Appendices. group of business incubators that is recommended (green mark) to be could most benefit from service port- included into further project activities.

35 4 | Approach Used to Assess Serbian Business Incubators (BIs)

The methodology used for sampling and selecting the BIs are presented in the Tables below.

Value No. Criteria 1 2 3

Commitment of the BI management to participate in 1. no maybe yes project activities*

2. Links with universities/faculties Non-existing In process Strong

3. Links with corporates/industry Non-existing In process Strong

4. Number of clients actively using services of the BI >3 >10 ≤10

5. Share of clients with own product/service, % >10 >25 ≤25

Share of start-ups/university spin-offs in total of client 6. >10 >25 ≤25 portfolio, %

Number of staff providing business and innovation 7. >2 >4 ≤5 support services

Yes, no need to Yes, need to No, but needs to 8. Standardized business incubation process is in place upgrade / no, no upgrade have one need to have one

Project based, Internal, strong Innovation and technology development support 9. Not interested moderate need need among services among clients clients

<10 years, no >3 years, needs >10 years, willing 10. Maturity of BI initiative changes can be operational to change expected support

11. Networking of BI initiatives Not interested Moderate interest Strong interest

12. Membership in international networks Not interested Moderate interest Strong interest

13. Links to investor communities Weak Moderate Strong

Table 7. Selection criteria for BIs supporting high-tech start-ups

* - prerequisite for BI’s participation in project activities

36 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

Value No. Criteria 1 2 3

Commitment of the BI management to participate in project 1. no maybe yes activities*

2. Number of clients actively using services of the BI >3 >10 ≤10

3. Share of clients with own product/service, % >10 >25 ≤25

4. Number of staff providing business support services >2 >4 ≤5

Yes, no need to Yes, need to No, but needs to 5. Standardized business incubation process is in place upgrade / no, no upgrade have one need to have one

<10 years, no >3 years, needs >10 years, willing 6. Maturity of BI initiative changes can be operational to change expected support

7. Networking of BI initiatives Not interested Moderate interest Strong interest

Special focus / existence of the programme that supports No, but is in the 8. No Yes Youth, Women Entrepreneurship, and/ or minorities process

Initiative or already established cooperation with the No, but is in the 9. No Yes industry/corporate in the region process

Table 8. Selection criteria for BIs supporting self-employment

* - prerequisite for BI’s participation in project activities

37 5 Performance assessment of the BIs in Serbia

As we have already noted, attempting zz How can networking of BI initia- zz Detailed assessment of a group of to provide a definitive statement on tives be enhanced? 20 business incubators. the current status of business incubator development is a challenging zz How willing are business incuba- In the following chapter, we will task. For this reason, an innovative tors to work with the EUBID project supplement this with the findings on combination of methods has been to enhance their provision of high business incubator tenants, and identi- used within this study, as described in value-added services for clients? fy the service delivery gaps. the previous chapter. Data was collected using a combination of methods In addition to assessing the status and 5.1 How many operational including desk research of existing performance of business incubators, Business Incubators databases on web and paper reports, the study also considers demand-side are there in Serbia? short on-site visits, peer review ap- needs of tenant companies within proach and individual interviews. business incubators, as the basis for As stated in section 4.1, the research a gap assessment of mismatch be- confirmed that40 initiatives are op- The study results provide insight into tween current supply of services and erational. These are listed in the table the following core questions: client needs. below, and current status compared with three earlier points in time. zz How many business incubators are currently operational in Serbia? Based on the findings, individual When comparing the situation be- Roadmaps were prepared for tween 2006 and 2019, our desk-based zz What are the key characteristics of 20 business incubators, and assessment identifies the following a) business incubators supporting a set of overall conclusions pattern across Serbia regions of the high-tech, and b) business incuba- and recommendations has development of both BI planning tors supporting self-employment? been prepared (Chapter 7). To initiatives, and realised BIs, shown support the implementation of in Table 1262. We would particularly zz How can business incubators the recommendations, three remark that the latest 2019 assess- increase and improve their man- technical Toolkits have also been ment indicates many new BIs coming agement capacities? developed, on the basis of our into existence in the past few years findings. in all regions of Serbia, whilst several zz What is required to contribute to planned initiatives have never been interconnected organisations with developed. strengthened performance, leading There are three main components to to more optimal utilization of the findings that we report on within resources? this chapter: zz How can business incubator zz An overview of main findings on operations be improved to enhance the number of identified business the ability to manage infrastructure incubators; efficiently and to deliver results? zz Basic assessment of business in- zz What improvement of governance cubator activities, and selection of 62 It should be noted that the information from structures and organisational set- those included for further in-depth previous periods is sometimes only partial, up are required? study; and and did not therefore reflect a complete picture of the situation at that time. For this reason, interpretation of this table should be treated with caution and regarded as indicative of key trends.

38 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA Subotica Kanjiža

Mokrin Kikinda Senta

Sombor

Bački Petrovac Zrenjanin Selenča Novi Sad

Beočin

Stara Pazova Pančevo

Beograd

Kladovo

Smederevska Palanka Majdanpek Bor

Rača Until Valjevo 2006

Kragujevac Zaječar Čačak Užice 5 Boljevac incubators Kraljevo Knjaževac Kruševac GoS Programme -Plan (2006) 2007-2010 Niš

Prokuplje 23 5 23 Novi Pazar Pirot Leskovac incubators existence initiative Medveđa

NAD/Inter Assessment EUBID Assessment 2011 2019 Vranje 27 19 8 40 incubators existence initiative incubators

Figure 5. Mapping of Business Incubators in Serbia in 2019

Figure 5. Mapping of Business Incubators in Serbia in 2019 39 5 | Performance assessment ofthe BIs in Serbia

2007-2010 - GoS NARD/Inter EUBID Assessment Name City Until 2006 Programme - Plan (2006) Assessment (2011) (2019)

Vojvodina Sombor Sombor initiative

Kikinda Kikinda initiative

Beočin Beočin initiative

Kanjiža Kanjiža initiative existence

Pančevo Pančevo initiative initiative

BI Zrenjanin Zrenjanin existence existence existence existence

BI Novi Sad Novi Sad initiative existence existence

BI Subotica Subotica initiative existence existence

BIC Bački Petrovac Bački Petrovac initiative existence

BI Senta Senta existence existence

Inofstud Hub Subotica existence

Slovan Progres Selenča existence

Innovation Start-up centre SP Stara Pazova existence

Mokrin House Mokrin existence

Belgrade Belgrade-Lazarevac Belgrade initiative

STP Grocka Belgrade initiative

Belgrade Novi Beograd Belgrade initiative

Rača Rača existence

Korrak Belgrade existence existence existence

BI of Tech. Faculties Belgrade initiative existence existence

Belgrade STP Belgrade initiative existence

Nova Iskra Belgrade existence

ICT Hub Bg Belgrade existence

Impact Hub Belgrade Belgrade existence

Vinča Belgrade Belgrade existence

StartIT Belgrade existence

Starup center Belgrade existence

In Center Belgrade existence

There is a relatively even spread in – 9 BIs, in Kragujevac – 4 BIs, and Niš The geographic distribution of the number of BIs across the regions – 5 BIs), there are, however, many BIs 40 operational business incubators (Belgrade – 9; Vojvodina – 9; Southern in smaller places, and some are very identified by the study is shown in the & Eastern Serbia – 12; Šumadija & successful. It is also worth remarking map below, together with earlier 2011 Western Serbia – 10). It is interesting that most of the BIs in Belgrade are assessment when 27 incubator initi- to note that, whilst the highest number relatively young, and established only atives were identified (19 operational of BIs is in the bigger cities (Belgrade few years ago. and 8 at the initiative stage).

40 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

2007-2010 - GoS NARD/Inter EUBID Assessment Name City Until 2006 Programme - Plan (2006) Assessment (2011) (2019)

Southern & Eastern Serbia BIC Niš Niš existence existence existence

Knjaževac Knjaževac existence existence existence

BI Zaječar Zaječar initiative existence

Medveđa Medveđa initiative existence

BIC Bor Bor existence existence existence existence

BIC Yumco Vranje Vranje initiative existence existence

BIC Prokuplje Prokuplje initiative existence existence

BIC Kladovo Kladovo initiative existence

BI Majdanpek Majdanpek initiative existence

Boljevac Boljevac existence

Starup Center Niš Niš existence

Think Innovative Niš existence

Deli Niš Niš existence

Pomak Zaječar existence

NiCAT Niš existence

No Limit Hub Niš existence

ZIP Center Pirot Pirot initiative existence

Leskovac Leskovac initiative

Šumadija & Western Serbia Kraljevo Kraljevo initiative

Smed. Palanka Smed. Palanka initiative

BIC Kragujevac Kragujevac initiative existence existence

BI Kruševac Kruševac initiative existence existence

BIC Užice Užice initiative existence existence

BI Valjevo Valjevo initiative initiative existence

STP Čačak Čačak initiative existence

NIT Novi Pazar Novi Pazar initiative existence

BDC Kragujevac Kragujevac existence

MIND Kragujevac existence

KG Coworking Kragujevac existence

Coffice Užice Užice existence existence existence existence E - existence (Quick Scan Questionnaire and assessment relates to-35) E-6 E-6 E-20 E-40 I - initiative I-23 I-8

T - total T-6 T-29 T-28 T-40

Table 9. Overview of the BIs developoment in Serbia 2006-2019

41 5 | Performance assessment ofthe BIs in Serbia

5.2 Basic assessment of BI The list of visited BI initiatives and their attribution to specific group is provided in initiatives the table below:

Thirty six of the forty identified business incubation initiatives63 Incubators supporting high-tech No. Incubators supporting self-employment were visited, and data was collected start-ups through quick scan questionnaires filled-in during the visits. These 1. BI Novi Sad, Novi Sad BI Valjevo visits were designed to collect basic information about BIs, including their 2. ICT Hub, Belgrade BIC Prokuplje business models, service portfolio and insights into their expectations, needs, 3. Science and Technology Park Čačak Pomak, Zaječar gaps in operation, etc. The visits also 4. Start-up Centre, Belgrade BIC Bački Petrovac helped to verify correspondence of desk-research and follow-up calls with 5. In Centar, Belgrade BIC Bor on-the-ground assessment of the real situation. Science and Technology Park 6. BI Majdanpek Belgrade All visited BI initiatives were catego- rised and divided into two groups: 7. BI of Technical faculties, Belgrade BI Senta

1. Business incubators supporting 8. Nova Iskra, Belgrade BI Zrenjanin high-tech start-ups; 9. Infostud Hub, Subotica BIC Užice 2. Business incubators supporting self-employment. 10. Impact HUB, Belgrade BI Subotica, Subotica

11. Vinča, Belgrade BIC Yumko, Vranje

12. Startap Centre, Niš ZIP Centar Pirot

13. Think Innovative, Niš BIC Kladovo, Kladovo

14. NIT Novi Pazar, Novi Pazar Deli, Niš

Business Development Centre, 15. MIND, Kragujevac Kragujevac

16. BIC Kragujevac, Kragujevac StartIt*, Belgrade

17. BI Kruševac Coffice, Užice

Innovation Start-up Centre Stara 63 18. KG Coworking, Kragujevac 4 initiatives were excluded from further Pazova involvement into project activities die to different reasons: private and confidential, recent change of management, still in devel- Table 10. Visited BI initiatives during initial assessment phase opment or not meeting criteria as a business * - there are six branches of StartIt located across Serbia and mostly partnering with other business incubation incubator. initiatives in those locations. The locations are Novi Sad, Vršac, Šabac, Subotica, Zrenjanin and Inđija.

42 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

5.3 Description of the Serbia). This Study does not report on shows how important and timely the applied methodology the full assessment results on indi- process was. vidual BI initiatives, though these are Based on the rankings from the Whilst our reporting so far has available through quick scan survey selection criteria, 10 BIs support- focused on the quick scan question- data stored in excel spreadsheets, and ing high-tech start-ups and 10 BIs naires for core statistical survey data, as Roadmaps to the individual partici- supporting self-employment were which we have supplemented with pating business incubators. selected for in-depth analysis. The findings from other sources and the Tables below present an aggregated process of peer reviews, the most Accumulated results show that all picture of the evaluation according to detailed data has been collected from visited BI initiatives positively accept- the selection criteria, whilst respecting a smaller sample of 20 BI initiatives. ed the incentive to assess current the confidentiality of individual BIs. These all participated in a process of situation in the country and were keen The final column shows the average Peer Reviews, which led to develop- to contribute to and participate in the scoring across all of the BIs assessed. ment of individual Roadmaps for each upcoming evaluation process. To be The colouring within the tables links to participating BI. These are included specific, only 6 (2 BIs supporting high- the scoring criteria within section 4.3, as a separate electronic annex with a tech start-ups and 4 BIs supporting and illustrates individual scores per restricted audience64. serf-employment) BI initiatives did not commit to contribute to the Study. It criterion for individual BIs: The methodology for the Peer Reviews assessment of BIs is available as stand-alone compoent to the study.

5.4 Basic assessment and Value No. Criteria BI selection results 1 2 3

As it has been presented already the network of business incubators in the Republic of Serbia covers the whole What is noticeable is that no single BI clients actively using services of the country and operations of different scored perfectly. As we scan from left BI; Share of clients with own product/ groups of BI initiatives to some extent to right across each of the tables, we service, %; Links with corporates/ contribute to economic development can see a successively lower scor- industry; Links with universities/fac- in all regions. ing by individual BIs, illustrating the ulties; Membership in international usefulness of this ranking method. It networks. As provided, BI initiatives were is also important to observe the many evaluated using BI selection criteria differences between the BIs in the For SE BIs, five criteria were scored at described in section 4.3 and data were individual criteria in which they scored two or more (in order): Networking of used from quick scan questionnaires. highly (or less so). This provides an BI initiatives; Number of clients active- Evaluation grids were developed which initial basis for identifying key issues ly using services of the BI; Initiative or permit the assessment of incubators that were addressed further through already established cooperation with both individually and regionally (whole the Peer Reviews. the industry/corporate in the region; Maturity of BI initiative. We have ranked the areas where each type of BI scored most highly on ag- 64 The full set of Roadmaps has been made gregate. For the HT BIs, seven criteria available to the Ministry of Economy, whilst were scored at two or more (in order): individual Roadmaps have only been dissemi- nated to the BI that they refer to. Networking of BI initiatives; Number of

43 5 | Performance assessment ofthe BIs in Serbia

Commitment of the BI management 2,78 to participate in project activities*

Networking of BI initiatives 2,50

Number of clients actively using 2,39 services of the BI

Share of clients with own product/ 2,22 service, %

Links with corporates/industry 2,17

Links with universities/faculties 2,11

Membership in international networks 2,11

Maturity of BI initiative 1,94

Innovation and technology 1,89 development support services

Number of staff providing business 1,78 and innovation support services

Share of start-ups/university spin-offs 1,72 in total of client portfolio, %

Standardized business incubation 1,61 process is in place

Links to investor communities 1,50

Table 11. Summary of rankings of BI supporting high-tech start-ups

Commitment of the BI management to 2,65 participate in project activities*

Networking of BI initiatives 2,65

Number of clients actively using services 2,35 of the BI

Initiative or already established cooperation 2,12 with the industry/corporate in the region

Maturity of BI initiative 2,06

Share of clients with own product/service, 1,82 %

Standardized business incubation process 1,82 is in place Special focus / existence of the programme that supports Youth, Women Entrepreneurship, 1,76 and/ or minorities Number of staff providing business 1,65 support services

Table 12. Summary of rankings of BI supporting self-employment

44 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

Based on the rankings on the above- mentioned criteria 10 BIs supporting No. Name of the initiative* Score Type of BI initiative high-tech start-ups and 10 BIs self-employment were selected for in-depth 1 2,67 Supporting self-employment analysis through the Peer Assessment 2 2,54 Supporting high-tech start-ups method, to produce individual BI Roadmaps. 3 2,54 Supporting high-tech start-ups 4 2,54 Supporting high-tech start-ups

The initial aggregated 5 2,54 Supporting high-tech start-ups assessment of ranking is 6 2,46 Supporting high-tech start-ups presented next. This is in no way intended to provide an 7 2,46 Supporting high-tech start-ups overall performance ranking 8 2,44 Supporting self-employment of BIs, but merely provides the basis for the selection of the 9 2,44 Supporting self-employment BIs that undertook the more 10 2,23 Supporting high-tech start-ups detailed assessment, and that 11 2,23 Supporting high-tech start-ups were anticipated to be most likely to benefit from further 12 2,22 Supporting self-employment EUBID support. 13 2,22 Supporting self-employment

14 2,15 Supporting high-tech start-ups

15 2,15 Supporting high-tech start-ups

16 2,11 Supporting self-employment

17 2,11 Supporting self-employment

18 2,11 Supporting self-employment

19 2,11 Supporting self-employment

20 2,08 Supporting high-tech start-ups

21 2,00 Supporting high-tech start-ups

22 2,00 Supporting self-employment

23 2,00 Supporting high-tech start-ups

24 2,00 Supporting self-employment

25 1,92 Supporting high-tech start-ups

26 1.89 Supporting self-employment

27 1,89 Supporting self-employment

28 1,89 Supporting self-employment

29 1,78 Supporting self-employment

30 1,78 Supporting self-employment

31 1,62 Supporting high-tech start-ups

32 1,56 Supporting self-employment

33 1,54 Supporting high-tech start-ups

34 1,54 Supporting high-tech start-ups

Table 13. Ranking of BI initiatives 35 1,38 Supporting high-tech start-ups

* - names are hidden deliberately due to sensitive 36 1,00 Supporting high-tech start-ups data

45 5 | Performance assessment ofthe BIs in Serbia

5.5 Summary findings and perspective of services provided as for business incubators to play in results – Supply side well as mislead clients’ expectations Serbia and requires further improve- analysis of BIs regarding services they can get in BIs. ment in most of the cases, and better Private initiatives though depend on inclusion and integration into the main a business model and in most cases service portfolio. Based on the assessments of indi- the business model often changes vidual business incubators that were depending not only on trends in A surprisingly low number of HT BIs carried out, this section presents business support models, but on profit (just 6 out of 18) link their tenants with a summary overview, before more driven basis mostly. Private initiatives higher education institutions. Consid- detailed findings are presented. We therefore tend to be more flexible and ering that these incubators support present the results of the analysis agile than public. high-tech business, it is essential for separately for the set of business them to develop this service within incubators supporting high-tech, and the portfolio as a value-added service those supporting self-employment, 5.5.1 Overview of Findings particularly relevant to technological grouped by four main categories of Related to BIs supporting High-Tech Start-ups tenants. issues. As will be seen, however, there are many similarities between the two Most of the assessed High Tech BIs Very few BI initiatives supporting groups of incubators65. are attractive to potential clients, and high-tech start-ups provide services do not experience any problems with specifically attributed to technological Basic assessment of BI initiatives, deal flow, i.e. attracting tenant SMEs development. Share of start-up/univer- primarily using the short quick-scan to the incubator. A majority of HT BIs sity spin-offs in total number of client questionnaire66, was used to help col- said that more than 25% of their ten- portfolio, number of staff providing lect information needed to update the ant companies have their own prod- innovation support services, inno- existing service portfolio of functional ucts, and are not outsourced by larger vation and technology development BI initiatives. All data was entered into companies to deliver some services. services, links to investor communi- spreadsheets for archiving purpos- Bootstrapping was mentioned as a ties all show that either clients are not es, and to allow data analysis and key issue with IT sector start-ups as looking for these services and they are interpretation. Further interpretation their resources are mostly outsourced more of general business nature or the of the core data was made on the to develop someone else’s products services are not promoted enough, so basis of the peer review process, and not their own. clients are not looking for these ser- and roadmaps created for each of vices in-house within the incubators. twenty business incubators that were The majority of incubators do not run assessed in detail. any structured business incubation Highlighting our earlier point (section program. There are a lot of examples 3.1.2) on distinguishing between The research conducted on the basis when programmes are available as ad- business incubators and business of initial assessment and quick scan hoc activities implemented in frame- incubation, we would remark that a questionnaires suggests that incuba- works of different support and funding considerable number of the selected tor initiatives can be distinguished by programmes. HT BIs are actually set up as co-work- their ownership: local public institu- ing space (i.e. Infostud HUB, Nova tions, NGOs or private initiatives. The Links to corporates and large industri- Iskra, In Centar ) and they actually majority of them are project based al companies are provided to tenants do not plan (at the present time) and implement activities defined by by about half of the BI initiatives. to become fully fledged business their donor programmes which in Within internationally leading incuba- incubators providing the full range of turn limits consistency and long-term tion programs, a gatekeeper function incubation services. This provides a of linking start-ups with corporates partial explanation as to why they do is one of core features of successful not have (and do not plan) to establish 65 This may reflect any or all of: a) an artificial business incubators, Business incuba- closer cooperation with Universities. classification between the two types, and tors can facilitate fruitful collaboration some misclassification of individual BIs; between start-ups and corporations67. b) the overall current stage of BI development in Serbia; or c) similar activities and organi- This is an important feature and role sation, despite different overall market focus. This is something that should be examined further during the direct support phase of the project. 67 https://ubi-global.com/best-practices-suc- 66 This was filled-in together with the manage- cessful-incubator-corporate-partner- ment of BI initiatives. ships/08/.

46 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

5.5.2 Overview of Findings 5.6 Detailed findings and results Related to BIs supporting – Supply side analysis of BIs Self-Employment

Perhaps the weakest point amongst Issues addressed here in the more detailed assessment are broken down by the BIs supporting self-employment is the following main aspects: small number of staff working within them providing business support Basic Characteristics Goals and market services to tenant clients – 11 out 17 of the BI orientation of the BI visited BI initiatives have less than 2 team members providing such services. yy Age and history of BI; yy Objective of BI; yy Founding partners (shareholders); yy Types of clients by origin; Self-employment supporting BIs are y y typically quite small – only 41.1% of y Location of BI; y Tenants and alumni; incubators have more than 10 tenants. yy Type of BI premises; yy Activities of tenant companies This suggests limited capacities of yy Size of premises and occupation. these incubators in providing an entrepreneurial support role, with most of their focus being on the employment Operations Management and Support Services generation and support context. The Financing and Networking fact that most of the companies in these BIs do not develop their own products also suggests that nature of yy BI Staff and management functions; yy BI business support services; businesses in these BIs are oriented yy Pricing policies of BIs; yy Effective service delivery modes; more towards service delivery, rather yy BI funding and operating costs; than product/service development yy Cooperation with other SME and innovation support institutions; where the BIs would have to play a yy Internal performance criteria; yy Cooperation with corporates and more visible support and delivery role. yy Incubation processes; industrial sector; yy BI entrance and exit criteria; Networking of BI initiatives is the main yy Cooperation with universities/fac- aspect where BIs supporting self-em- yy Client management. ulties and other educational institu- ployment expressed a strong interest tions. in improving their performance and delivery of this activity. However, due 5.6.1 Basic Characteristics of the Business Incubators to lack of resources, both financial and human, they currently lack abilities to Summary of Basic Lack of structured business incu- get to know other incubators better, Characteristics of High Tech BIs bation programmes. and network effectively with them. Considering the basic characteristics of High Tech BIs, we can note the Age and history of the HT BIs following: Most of the HT BI were established Relatively young age of high-tech after 2010, except for the BI of business incubators; Technical Faculties, Belgrade was the Mixed pattern of ownership first BI from the HT list established in depending on core focus of the 2006, NIT Novi Pazar in 2009 (though incubator; then operational as a cluster), and BI Predominantly located in cities; Kruševac in 2010. As of 2013, the new “wave” of incubators emerged. For Most of the BI are in the size range example, Nova Iskra and STP Čačak 450-850 m2; were established in 2013 and, even 3 High tenant occupancy rates and new BI were established during 2014, waiting lists; namely, ICT Hub, In Centar and Impact Most common sectors of tenants Hub. These findings also correspond are ICT and sales, marketing and with the unpublished findings of the distribution; EU4TECH project - that most incuba-

47 5 | Performance assessment ofthe BIs in Serbia

tors in Serbia are relatively young com- Development Agency, private com- Belgrade respectively. We explain this pared to their counterparts in Western pany, Chamber of Commerce, NGOs relatively low university involvement Europe68. and other legal persons. For example, through the variety of different business this coalition of a number of different incubation models that have emerged All HT BIs reported that they are types of founders, namely the City in recent years supporting high-tech and non-profit, but established as compa- of Kragujevac, Regional Chamber innovation-based start-ups. nies limited by guarantee. During the of Commerce Kragujevac, Regional consultation process, it was reported Agency for Economic Development of The BIs that are functioning as a that this legal status supports BI Šumadija and Pomoravlje, Association co-working space mostly have a pri- operations and functions, at the same of Private Entrepreneurs “Šumadija” vate company as one of their founders time allowing them to apply for the and General Association of Entre- – Infostud Hub (Infostud company), public and project funding. An inter- preneurs “Sloga”, has supported the MIND (Mind group), Think Innovative esting case is NIT Novi Pazar, that is processes behind BIC Kragujevac’s (Tehnicom group). All these compa- established and officially registered as provision of valued services and ben- nies are larger in size, for example the cluster. Over time, it changed its focus efits to its tenant companies and SME Infostud company is one of the major following the needs in the market and sector in general. internet companies in Serbia, with society, and building on its’ own com- 170 employees, Tehnicom Group has petitive advantages, so the focus had Having in mind that these are consid- around 50 employees. These com- been changed, from supporting SMEs ered HT BI we had expected to observe panies have taken a proactive social and companies to supporting start- a higher percentage of Universities as responsibility role to support econom- ups and young entrepreneurs within at least one of the founders. Almost ic development of Subotica and Niš the University. 35% of BIs reported Universities as one region respectively. of the founders (STP Belgrade, BI of Founding partners of the HT BIs Technical Faculties, STP Čačak, Start-up Supporting processes of local eco- Center Niš, BI Novi Sad, NIT Novi Pazar nomic development, almost 30% of HT The general overview of the founding and Start-up Center Belgrade). NIT and BIs reported that one of the founders partners is presented in Figure 6. Start-up Center Belgrade provide unique is Municipality and/or NGO. For exam- Around 50% of BIs reported varied example of BIs with university links, in ple, In Centar is 100% established by types of entities as one of their that the BI Centres are an integrative NGOs. Business Incubator Kruševac is founders, including the Investment part of the International Faculty of 100% owned by the City of Kruševac Promotion Fund in Vojvodina, Regional Novi Pazar and Economics Faculty in and there is a high alignment between

0 5 0

0 20 10

0 ter niersit Municipait ationa egiona facut autorities autorities

Figure 6. Founding partners of HE BIs

68 Meeting with the EU4TECH project team representative (2019).

48 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

the BIs and the Municipality objectives close geographic proximity to the Hub indicated that all their space is “Whenever the investor comes to our University campus. Only 17% are allocated to tenants. Other facilities regions, it is important for us to say located on a campus, namely Start- such as event space, meeting rooms, that we have an incubator. It gives up Centre Niš, NIT Novi Pazar and skype rooms etc. are the second most creditability to the innovation ecosys- Start-up Centre, Belgrade. BI Kruševac common form of physical facilities, tem of our city and the whole region”. report themselves as being a green- provided by 44% of HT BIs. A perhaps field investment. Having in mind the surprisingly low number (17%) report- Almost 20% of BIs reported National objectives of the HT BI, current loca- ed that they have R&D lab facilities. authorities and regional authorities as tions of HT BIs raise questions about one of their founder. This is mainly the how effectively they will be able to link case for the BIs in Vojvodina where with Higher Education Institutions to Size of the HT BIs Autonomous Province of Vojvodina provide effective academic-business provides strategic support to the BIs linkages supporting innovation and The size of BIs varies significantly development since 2003, but is also commercialisation of R&D. Whilst this from the smallest 80 m2 (Start-up one of the shareholders in supported is beyond the scope of the study to Center Belgrade) to the largest 16,000 BIs and member of the tenants’ selec- answer, it is something that should be m2 (Science Technology Park Bel- tion committee. For example, Invest- directly addressed to HT BIs through grade). The average (mean 1,894 m2) ment Promotion Fund in Vojvodina the upgrading and development of size of HT BIs is distorted because of has 40% of the BI Novi Sad. their service portfolios. STP Belgrade’s reported size of 16,000 m2. Removing STP Belgrade from the sample, as an outlier, the average Location and premises Basic office space is the most com- size of Serbian BI is much smaller in of the BIs mon physical offering, with almost size – 808 m2. Most of the BI fall into Whilst almost 80% of BI reported that 70% of BIs reporting that they provide the size range of 450-850 m2. Figure their location is in the cities, fewer co-working space, and 33% providing 7 presents the overview of the size of than might have been expected have office space. For example, Impact the HT BIs premises.

Figure 7. Size of HT BIs premises

Startup entre Begrae 0

I oi aar

STP Čačak 29

Startup entre Stara aoa 0

In entar 0

I B 00

BI of ecnica acuties Begrae 00

Startup entre i 00 ie

BI ragueac

oa Isra 00

BI oi Sa 0

BI rueac 1900

in Innoatie 00

S Begrae 1000

0 000 10000 1000 20000

49 5 | Performance assessment ofthe BIs in Serbia

BI occupancy rates are very high Most of the BIs are small in size lished with the support of the Austrian (reported at 100%) with some BIs (though the figures are distorted government and Vojvodina Investment reporting long waiting list of tenants, my mixed use of incubator premis- Fund in the period 2006-2007, whilst e.g. Nova Iskra and ICT Hub. This is es and facilities); the BI in Bački Petrovac was support- driving some geographic expansion. ed by Slovak aid support. World Bank For example, Nova Iskra (Savski Small number of tenants and supported the establishment of BIs in Venac) opened two more offices in clients; Majdanpek, with USAID and SIDA sup- 2019 in Belgrade (Zemun and Dorcol). porting establishment of BI Pomak. Low turnover of business incubator However, in some cases high occu- The IPA programme supported the clients; pancy rates, especially by analysing establishment of BIC Kladovo and BIC tenants’ profile, also suggests that Like HT BIs, the most common sec- Užice in 2008 and 2009 respectively. incubators are satisfied with existing tors of tenants are ICT and sales, and verified tenants for longer period marketing and distribution; and Founding partners of the SE BIs of time rather than proactively search- ing for new deal flows. Lack of structured business incu- The Municipality is one of the found- bation programmes. ing partners in more than half of the SE BIs. In BIC Užice, BIC Kladovo and Summary of Basic Characteristics of Self- Age and history of the SE BIs ZIP Center Pirot the municipality is Employment BIs virtually the only founder with approxi- Most of the SE BIs are limited liability mately 100%, compared with BI Senta Considering the basic characteristics companies, established as not-for – 65%, BI Yumco – 49% and BIC Bački of Self-Employment BIs, we can note profit. The average length of operation Petrovac – 35%. NGOs are the second the following: is 9 years, suggesting that most of most common founding partner (in them should be fully developed and almost 50% of the BIs). For other Relatively mature age of self-em- mature. The youngest SE BI observed partners BI reported a mix of different ployment business incubators; was established 2 years ago (i.e. founders, for example: various other Pomak), with the oldest ones having Core focus of the Municipality with- physical persons – BI Valjevo; the been established 13 years ago (BI in the ownership structure, together local development agency - BI Suboti- Yumco and BI Zrenjanin). with initial donor-support; ca; and companies - BI Yumco. As an example of a mixed founder approach, Predominantly located in urban Most of the BIs reported that they the Business Incubator Center Užice locations; were established with donor-funded was established in 2008, with the support. BIs in Vojvodina were estab- aim of promoting newly established

0 Fuig rer

0 5

0 5 5

10 0 Municipait ter egiona niersit ationa autorities facut autorities Figure 8. Founding partners of the SE BIs

50 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

ei 120 ie

M 220

BIC Bački Petrovac 9

StartI 90

BI aeo 00

I entar irot 20

BI Bor 0

BI Maanpe 920

BI aoo 1000

BI Senta 1100

BI renanin 1200

BIC Užice 100

BI roupe 10

BI Subotica 2000

BI uo 200

0 00 1000 100 2000 200

Figure 9. Size of SE BIs premises

companies, through the initiative of Location and premises of the (Deli) up to 2,400 m2 (Yumco). Overall, the Municipality of Užice, as the main SE BIs the SE BI in Serbia are generally small the founder with a share of 95%, to- in size with the average size is 976 m2. Around two thirds of the SE BIs have gether with the Regional Development Within these calculations, we have an urban location (65%), whilst some Agency Zlatibor with a share of 5%, not taken the Business Development are located on outskirts of cities, for alongside the support of the European Centre Kragujevac into consideration, example BIC Bor, BI Majdanpek and Agency for Reconstruction. since it doesn’t offer premises to the BIC Kladovo. Only one, SE BI (Valjevo), tenants, whilst information on the size reported their location as being at the of Coffice premises is not available. commercial premises in city centre in It should also be noted that some of a vicinity of University Faculty. the biggest incubators are using larger part of the space of the incubator for Size of the SE BIs production halls i.e. BIC Prokuplje with 2 2 The size of BI premises varies con- 1,650 m and BIC Užice with 1,600 m . siderably, from the smallest at 120 m2

51 5 | Performance assessment ofthe BIs in Serbia

eie 0

0 20

0 ontribute to ep centres ep copanies ep isaantage ter copetitieness to coerciaie generate spinoff counities an ob creation noo actiities iniiuas

Figure 10. Objectives of HT BIs

5.6.2 Goals and market orientation

Summary of goals and market Objectives of HT BIs The aim of the Business Incubator orientation of the HT BIs Novi Sad is to help young compa- Almost 80% of the BIs reported that nies find their way to market. The Assessing core goals of High Tech their objective is to contribute to com- BI’s focus is on supporting projects BIs, we can note the following conclu- petitiveness and job creation (Figure based on knowledge and new tech- sions: 10). For example, STP Čačak has nologies that have growth potential been established to enable “collabo- Core objective of competitiveness in the market and have potential for ration between industry, science and and job creation; scalability. research through the development Relatively low prioritisation of R&D of new ideas in order to increase The objective of the Start-up Center commercialisation and spin-offs; the competitiveness of the regional Belgrade is to be a place “where economy”. Majority of clients are freelancers students, with the support of a pro- and SMEs; fessor at the Faculty of Economics The objective to help companies gen- and some experienced mentors Many BIs noted a difficulty in erate spin-off activities was reported from the businesses, can develop attracting start-ups; in only 22% of cases. More than 30% their entrepreneurial ideas and of HT BIs defined the objective of ICT and sales, marketing and make the first steps in business”. distribution are the most common helping R&D centres to commercialize sectors of tenants; know-how. BIs also reported other type of reported objectives such as Tenant profile in HT BIs There are relatively low levels of support to networking, promotion, More than 70% of the HT BI reported advanced / high-tech manufactur- support start-up and young entrepre- that their clients are freelancers and ing and R&D tenants. neur’s investment readiness (28%), for start-ups/SMEs (Figure 11). However, example: during the peer review workshops it was noted by many BI managers that

52 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

0 e ie rigi

reeancer 0 Startup SM Branc of eisting copan 0 Spinoff fro niersit or entre

0 2

Figure 11. Type of clients in HT BIs by origin

it is sometimes difficult to find start- BI managers reported high success Activities of Tenant Companies in ups, and that these type of clients al- rates of graduated companies of HT BIs ways have a priority for the placement. between 85-100%. This corresponds Reported activities of tenant com- Spin-offs from the University or R&D with similar findings of the EU4TECH panies, shows strong sectoral bias, centre as clients represent only 33% project who also report that only Star- with high clustering in the following of cases, which is generally low for a tIT and ICT Hub have survival rates sectors: ICT (83%), sales, marketing HT BI. However, this does correspond lower than 50%, while the other HT BIs and distribution (72%), business and with the finding that only 22% of BI reported higher success rate of their financial services (50%) as presented stated that one of their objective is to tenants69. in Figure 12. Advanced / high-tech support spin-off from the University. manufacturing and research and de- Of some concern in terms of meas- velopment are reported to be on a low uring long term business incubator Tenants and alumni level, around 30% and 10% only. These impact, is that most of the BIs report findings also correspond to EU4TECH There is widespread variation in that they do not follow the companies project findings that within the main the number of in-house supported after graduation. Most of them do not economic activities of the tenant businesses amongst the BIs. ICT Hub have an alumni database70. reports the highest number (110), with companies, ICT dominates, followed the lowest reported in Start-up Center by sales, marketing and distribution. Belgrade (4). The average number of These figures do reveal a lack of di- tenants is 28, with most of the BIs versity in the start-up community and reporting that they host between 24 a lack of alignment with emerging S3 and 36 tenants. The average number priorities. of supported businesses for HT BIs (since beginning operations) is 81 69 EU4TECH (2019). We would note that the tenant activities in the HT BIs demonstrate a very tenants. 70 EUBID,Peer review workshops (June-July similar pattern to activities of the ten- 2019).

53 5 | Performance assessment ofthe BIs in Serbia

100 iiie ie ie I Saes areting an istribution

Business an financia serices 0 ance igtec esearc eeopent ter Manufacturing ctiities ter Serice ctiities 0 cobination of soe a of tese actiities

Figure 12. Activities of HT BI client companies

ants from the SE BIs. This highlights though this is based on limited Tenant profile in SE BIs often limited differences between the data. More than 70% SE BIs reported Start- high tech and self-employment BIs. up/ SMEs as clients. Established Objectives of SE BIs branches of existing companies as Summary of goals and market clients are mentioned by 60% of SE orientation of the SE BIs Contributing towards competitiveness and job creation is the most common- BIs, and free lancers in 50% of cases. Assessing core goals of Self-Employ- ly reported objective of BIs (more than The main tenant profile is presented in ment BIs, we can note the following 80%, Figure 13). Other social inclusion Figure 14. conclusions: objectives, such as supporting disad- Core objective of most SE BIs is on vantaged communities/ individuals Tenants and alumni (e.g. BIC Bački Petrovac), and wom- competitiveness and job creation; Total number of supported business- en’s entrepreneurship development es by SE BIs is 228, though only six Some SE BIs have explicit objec- (e.g. BIC Bački Petrovac) are also out of 16 BI answered this question. tives relating to supporting disad- mentioned. Indeed, Bački Petrovac is The number differs widely from 10 to vantaged communities/ individuals notable through a strategic orientation 59, and in average each Serbian SE and women; to business and family development business incubator initiative in Serbia including support to female entrepre- Start-ups and SMEs are the most supported 38 tenants since they com- neurship. The BIC is recognized by common tenants; menced functioning. Therefore, we the local female community through could assume that 17 SE BIs, in total Similarly, with the HT BIs, ICT and having had a strong and lasting collab- supported 646 businesses. Number of sales, marketing and distribution oration with the Academy of Female currently in-house supported busi- are the most common sectors of Entrepreneurship, which was one of nesses also ranges from 2 hosted by tenants for SE BIs; the founders, alongside the Municipal- Bački Petrovac, 4 by BI Majdanpek, BI ity of Bački Petrovac, and the Develop- The reported success rate of Senta and BIC Kladovo (each) to 10 in ment Agency Vojvodina. supported businesses is very high, BIC Bor. In total, SE BIs support 153

54 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

100 eie

20 0 ontribute to ep isaantage ter ep centres ep copanies copetitieness counities to coerciaie generate spinoff an ob creation iniiuas noo actiities

Figure 13. Objectives of SE BIs

businesses and on average 13 tenants 0 are supported by SE BIs. 0 The success rate of supported businesses is reported to be very high: the 0 highest is in BIC Užice – 96%, followed by Zrenjanin – 75% and Bački Petro- 5 vac – 66%. Other incubators didn’t 0 respond to this question. Data on the number of created jobs is incomplete 0 as this indicator was clarified during face-to-face discussions or reporting 0 documents of BIs. Again, BIC Užice reports a high number, in total 137, 20 and BI in Senta and Zrenjanin reports 50 created jobs. 0 Activities of Tenant Companies in SE BIs e ie rigi The main reported activities of ten- Startup SM ant companies are in the following Branc of eisting copan sectors: ICT (70%), followed by sales, reeancer marketing and distribution (60%) as Spinoff fro niersit or entre presented in the Figure 15. Interesting- ly, these are the same findings as for the clients of HT BIs. Other reported Figure 14. Type of clients in SE BIs by origin activities are more varied, including manufacturing activities (50%) such as wood (processing) industry, locks, metal processing and other service activities (30%) such as legal services, accounting, legal and architects.

55 5 | Performance assessment ofthe BIs in Serbia

iiie ie ie 0 I Saes areting an istribution 0 ter Manufacturing ctiities ter Serice ctiities 0 5 Business an financia serices cobination of soe a of tese actiities 0 ance igtec esearc eeopent 0

Figure 15. Activities of client companies

Some SE BIs have clear sector or tar- 5.6.3 Operations Management in 70% of BIs, with some providing get group focus, for example, Pomak and Financing them free of charge; from Zaječar defines the following Less than one in five BIs perform target groups: IT professionals, free- Summary of Operations commercial activities to support lancers in need of co-working space Management and Financing for revenue streams; working in the domain of marketing HT BIs and communication. In BI Zrenjanin Most of the BIs receive cash op- Analysing operational management there is a noticeable of female tenants erating subsidies, and depend on issues and financing of High Tech BIs, which creates a positive working external subsidy for survival; leads us to conclude the following: atmosphere and good gender balance, The main internal performance considering that the technical sector, HT BIs typically have small number criteria used by HT BIs are BI toward which the BI Zrenjanin is of staff, constraining ability to occupancy rates and number of oriented, is predominantly male- rep- expand service delivery; jobs created by tenant/graduated resented. Most functions of BI management companies; teams are fairly basic routine BI managers report high success management and advice and assis- rate of the graduated compa- tance to tenants; nies 85-100%, but there is little More than half of BI management post-graduation tracking of previ- staff have previous experience of ous tenants; advising start up and small firms, Around 40% of potential applicants and come from the private sector; are approved as tenants. Premises rental costs for tenants are lower than typical market prices

56 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

0 Fuig eri

0 ent incoe roects ter oercia Municipait serices

Figure 16. Funding of operations of HT BI

A business plan together with a routine management of incubator for a facility of this type. Rent of the sound management team are the affairs and providing some advice and space and usage of the equipment is two most common entry criteria for assistance to tenant companies. provided free of charge in the BI that selecting tenants; supports student entrepreneurship in NIT BI in Novi Pazar and Start-up Exits are most commonly on the HT BI staff profile Center at the University of Belgrade. basis of fixed term access to the BI; A positive finding is that almost 70% of HT BI staff come from the private There is limited systematic perfor- Funding and costs of HT BIs mance monitoring with tenants and sector and have set up/managed clients. their own firms or worked in busi- Almost 40% of the HT BI managers ness themselves. Half of them have reported that primary funding of their previous experience of advising start BI operations comes from rental Number of HT BI personnel up and small firms. The qualifications incomes, projects and other related Most of the HT BIs have one manager, of HT BI Managers tend to be in the activities. Only 17% reported that they with an exception of Nova Iskra with following fields: personnel manage- perform commercial activities. The 3 Managers, and Impact Hub, BI of ment (60%), followed by Sales, trade, best-case examples of commercial Technical Faculties and Innovation marketing (30%), Accounting, banking, focus are ICT Hub and Nova Iskra, Start-up Centre Stara Pazova that have finance (28%), ICT, IPR (22%). who reported that the majority of two Managers. There is typically one their funding is secured through the secretarial person, with the exception The general impression after the Peer commercial activities. In contrast, BI of Impact Hub who reported two. review sessions (conducted for 10 Kruševac reported that 80% of their Most of the HT BIs reported a greater HT BIs) was that almost all BI Man- operations are financed by the Munici- number of “other” staff (on average agers have a good understanding of pality of Kruševac. 6.8 persons). This varies significantly, BI development and operations and from one person to 35 persons report- a clear vision what role the BI should Most of the HT BIs receive cash oper- ed in Think Innovative. take in the society. The energy and the ating subsidies and if this funding was creativity of the BI managers was in all stopped, the effect on its operations Main functions of HT BI cases inspiring. would be that the incubator activities management and staff would have to be reduced significantly, Pricing policy of HT BIs or that incubator activities would stop The functions of HT BI management altogether. BI operating costs mainly and staff are generally rather limit- More than 70% of the HT BIs respond- relates to the payroll and other related ed, and in most of the cases involve ed that rents are below market rates costs related to the services of compa-

57 5 | Performance assessment ofthe BIs in Serbia

nies. There are only a limited number BI receives per year is on average 72, Whilst there are a range of causes of other BIs who do not receive any ranging from 300 enquiries (ICT Hub) of exits from the HT BIs, a fixed term subsidies. This leads to the conclusion to 11 (STP Belgrade). period is not surprisingly the most that most of the HT BIs are dependent commonly used BI exit criteria. The on external subsidies and that they are Entrance and exit criteria other criteria are used less than half still far away from developing sustaina- of HT BIs as often as the fixed term access. ble models of operations. Entrance criteria in HT BIs show that Client management within Internal performance criteria for more than half of BIs are insisting on HT BIs HT BIs prepared business plans, in common with the SE BIs (see below for Almost 60% of the HT BIs reported For the internal performance criteria, the comparable SE BI analysis). The that they are monitoring performance HT BIs usually use BI occupancy rates second most used criterion is having of their clients. However, during the and number of jobs created by tenant/ a sound management team. Only consultation process the findings graduated companies. The same criteria 11% of BIs reported that a business showed that there is typically no are applied in most of the SE BIs, which must have an innovative project. As specific monitoring system developed again supports a key finding that in an initial screening for entry, how- by the BI management, but that this is terms of basic operations and tenants, ever, there is a lot of sense in a core usually done through the occasional there are currently few major differences approach that combines used of a satisfaction survey, or following 1-2 among these two types of BIs in Serbia. business plan to screen the venture indicators of their clients (such as idea, together with assessment of the number of employees). The excep- Incubation processes of HT BIs clear match with a management team tions are BIs in Vojvodina that are that can demonstrate ability to deliver using the methodology developed by Around 40% of initial enquiries are the project. the Austrian funded project Tech2B approved to become incubator from Linz in Austria for evaluation of clients. The number of enquiries the

0 ere rieri business pan ust ae been prepare 5 soun anageent tea 0 Business ust eonstrate ig grot potentia

inancing ust be in pace Business ust ae an innoatie proect 0 oring prototpe ter criteria

Figure 17. Entrance criteria in HT BIs

58 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

0 ei rieri ie perio of tie to receie serices cieeent of agree business obecties 0 o particuar eit criteria

cieeent of agree business obecties aiure to aciee business obecties 0 euire support is not proie b BI

Figure 18. Exit criteria in HT BIs tenants and screening board to evalu- some providing them initially free times some flexibility in how these ate and follow the work of tenants. of charge; are applied;

Summary of Operations zz External subsidy is seen by many zz Regular monitoring of tenants and Management and Financing for SE BIs as important for long term clients is reported by 65% of SE SE BIs survival; BIs. Analysing operational management zz BI occupancy rates and number of issues and financing of Self-Employ- Number of SE BI personnel jobs created by tenant/graduated ment BIs, leads us to conclude the companies are the main internal Most of the SEs BI reported that they following: performance criteria used by SE have just one Manager. BI Pomak has BIs (in common with HT BIs); 4 managers, and BI Yumco doesn’t zz Just like HT BIs there are typically have any manager at the moment. small numbers of staff within SE zz BI managers reported high Regarding administrative staff, most BIs, limiting what services can be success rate of the graduated of the SE BIs reported one person or provided, and staff carry out routine companies 85-100%, but there is none. Only StartIT reported more, with management functions alongside little post-graduation tracking of 2 administrative staff. provision of advice and assistance previous tenants; to tenants; Other personnel within the SE BIs zz A higher proportion (70%) of po- are usually associates and experts, zz Despite the founder profiles, only tential applicants are approved as engaged on projects or on an ad hoc 25% of SE BIs reported that their tenants in SE BIs, compared with basis. On average, SE BIs engage staff had previously worked for 40% in HT BIs; 1.5 external consultants, with most public authorities/ agencies or uni- reporting 1-2. StartIT reported the versities, and in common with HT zz There are more limited entry highest number, with 8 consultants. BIs, more than half of BI manage- requirements in SE BIs compared The average overall number of person- ment staff have previous experi- with HT BIs, with a business plan nel of the SE BIs (including manager, ence of advising start up and small being the single most common administrative and other personnel) is firms, and/or worked in business; entry criterion for selecting tenants; 3.5 persons. zz Premises rental costs for tenants zz Whilst fixed term exit/graduation are typically subsidised, often on policies are used, there is some- a sliding scale of subsidy, with

59 5 | Performance assessment ofthe BIs in Serbia

Main functions of SE BI Pricing policy BI Valjevo has 3-month contracts with management and staff the clients of co-working space includ- More than 70% of SE BIs stated that ing free use of a desk, IT equipment The main functions of the SE BI staff their rent is below market rates for a and the consulting services. include: BI management functions facility of this type. In almost 25% of (76%); providing advice and assis- cases, the rent is provided for free in tance to tenant companies (65%); and the first year, and is steadily increas- Funding and costs of SE BIs networking with other BIs and busi- ing in various scales. For example, More than 75% of SE BIs report that ness support organizations (47%). BIC Kladovo provides the following their operations are funded by pro- conditions: first year free of charge, jects. Rent from tenants is the second SE BI staff profile second year subsidises by 50%, in the most important funding source (65%), third year 75% of full cost is charged, followed by subsidies from the munici- In total 65% of SE BIs reported that and in the fourth year it is charged at palities. In Vojvodina, SE BIs are also their Staff have set up and/or man- full commercial price. Similarly, in BI partially supported by the funding of aged their own firms or worked in Subotica the rent is free in the first the regional government. All BI are business, and only 25 % had previ- year. Various pricing models exist with supported by at least two different ously worked for public authorities/ varying proportions of commercial sources, but most of them typically agencies or universities. rent payable each year. For example, have three or four different sources of making comparison with BIC Kladovo, funding. For example, DBC Kragujevac The main qualifications of SE BI Man- BI Senta does charge in the first year, is fully project funded, for 10 years agers include accounting, banking, at 30%, rising to 60% second year, and from establishment they had around finance, personnel management, edu- 90% in the third year. None of the BIs 30 projects supported by 26 donors: cation and training. For example, DBC reported that the Rent is at or above European Union, Embassy of the Kragujevac has 4 employees, including market rates for a facility of this type. Kingdom of Norway, Ministry of Youth 1 psychologist and 3 economists; BI No SE BIs offered an option of rent in and Sport of RS, Solidar Suisse, SIPRU, Valjevo has 2 employees, one from exchange for equity in the company. OSCE etc. the IT sector and one with a marketing background. There is no standardised approach, More than 80% of SE BIs reported that and different SE BIs make varied the main BI operating cost is payroll. offers to new tenants, sometimes for Other significant costs related to short contract lengths. For example, provision of services of companies,

Fuig eri 0

0 5

5 20

0 roects ent incoe Municipait oercia serices ter

Figure 19. Funding of operations of SE BIs

60 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

equipment and supplies, as well as is approximately 7 with 5 approved as business can become residents of the costs related to maintaining buildings tenants. incubator. and premises. Entrance and exit criteria Regarding the exit criteria, there is If cash operating subsidies were to be of SE BIs often a degree of flexibility despite stopped, 60% of SE BIs responded that policies on fixed term tenancy. Almost their activities would have to be re- More than 60% of the SE BIs report- 50% of BIs responded fixed period of duced significantly. Income of SE BIs ed that the major entrance criteria time to receive services as one of the is on average very low, at around EUR are that a business plan must be exit criteria (presented in Figure 20). 24,000 per year. There is wide varia- prepared. This was by far the most This period varies between 3 and 5 tion in income, however, amongst the common entrance criterion, with rel- years and the average length of time group of SE BIs. A few BIs reported atively few other methods used. Two for these tenants is 3 years and 9 annual incomes between EUR 13,600 BIs reported that financing must be in months. and 17,000. Whilst other SE BIs had place, which was the next most com- incomes reported between EU 65,000 mon selection method. Other criteria For some SE BIs there may be oppor- and 88,000 per year. appeared not to be relevant for the SE tunity to stay longer than the indicative BIs while evaluating potential tenants. fixed incubation period. In BIC Užice, It was surprising to find little attention for example, a period of incubation of Internal performance criteria paid to the quality of the team propos- for SE BIs 4 years is defined. However, the ten- ing a project, with most focus simply ants can stay longer if they agree to In common with HT BIs, SE BIs usually on the quality of the business plan. pay a near to commercial rental price. use BI occupancy rates and number This is important for tenants who have of jobs created by tenant/graduated As an example of approach, Business installed equipment in leased produc- companies for the internal perfor- Incubator Zrenjanin developed a tion halls and for whom moving to a mance criteria. system for tenant entrance. For many new business premises outside BIC years, the tenants have been accepted would disrupt a business process and Incubation process of SE BIs on the basis of a public competition. cause additional costs. This is based on clear criteria where More than 70% of initial enquiries entrepreneurs with a sustainable become tenants of the SE BIs. The vision and business model for their average annual number of enquiries ei rieri 0

ie perio opanies nee o particuar ter aiure to of tie to receie ore space eit criteria aciee business serices to epan obecties

Figure 20. Exit criteria in SE BIs

61 5 | Performance assessment ofthe BIs in Serbia

Client management There are some good examples of of mentors, board members and other industry / incubator cooperation, senior advisors. Given the importance In total, 65% of BIs reported that their but these can be usefully built on, of mentoring, we would particularly clients are monitored on a regular and lessons transferred for adapta- note the surprisingly low proportion of basis, whilst only two SE BIs report- tion by other BIs; HT BIs providing support with men- ed that they do not have a particular tors, board members and other senior client management arrangement. The extent of cooperation between advisors. universities and BIs was less 5.6.4 Support Services and than expected, and reasons for Help with ICT and e-business is report- Networking this should be explored further, to ed as a frequently provided service, Upgrading of the package of val- identify better modes of coopera- especially via external sources. This ue-added services offered by business tion between academia and BIs in does not correspond with our findings incubators is an important aim of support of innovation. in demand side analysis, however, the EUBID project, and identifying the where tenant companies identify this areas in which this needs to be devel- Services provided as the service they would most like to oped is an important component of by the HT BIs receive (but do not currently receive). this study. In this section, we identify The top five ranked services overall the provision of the service package There is a similar service provision that are provided by HT BIs are: 1) Net- from the perspective of the BIs, which gap identified for accessing mentors, working, e.g. with other entrepreneurs, we will compare in chapter 6.3 with board members and other senior customers; 2) Training to develop the views of BI tenants, to derive an advisors. We comment further on the business skills; 3) Accounting, legal assessment of the most important mismatches between services provid- and other related services; 4) Pre-in- gaps in service provision. ed and desired in the next chapter. cubation services; and 5) Business planning and forming a company. Summary of Support Services These are delivered through a mixture Effectiveness of Business and Networking for HT BIs Service Delivery Methods for of in-house and external provision as HT BIs There are some interesting findings shown in Figure 21. related to the packages of services Interestingly, for HT BIs e-learning and delivered through HT BIs, together Addition commonly provided in-house online learning is identified as single with the nature of cooperation with services amongst HT BIs include links the most highly effective capacity other ecosystem actors, leading us to to higher education institutions (HEIs), development method. Overall, when conclude the following: project management advice and assis- combining highly and very effective tance, and advice on recruitment of methods, the most important is net- Whilst the top five services deliv- staff and personnel management. working amongst experts, followed by ered by HT BIs cover core issues, workshops, then individual coaching there appears to be a significant Given the anticipated focus on servic- and mentoring. We were slightly sur- gap in provision of specialist inno- es related to innovation and export, prised that coaching and mentoring vation and export support; it is surprising to find that less than a was not viewed as the most effective third of HT BIs are providing important method alongside expert networking. Mentoring and coaching are seen market access services of market re- as the most effective forms of sup- search, and export support, as well as Case studies are also seen as im- port, yet there is notable under-pro- relatively low provision of assistance portant and effective, and are more vision currently. This is a significant with access to finance in-house. Some highly effective than workshops on weakness to address; support to both export and product their own. Blended training course and development is developed through formal courses are viewed as effective ICT and digital marketing services implemented projects, however. in around the same number of cases, are provided, but there is a note- however, blended programmes have worthy mismatch between supply The most commonly reported services marginally greater effectiveness. As- and demand; that are provided via external source sessments, tests, and quizzes are not are advice and assistance on new ranked so highly, perhaps reflecting Cooperation between business product development and help with that they measure capacity develop- incubators can be generally as- raising bank, finance, grants and ment more than developing it. sessed as fairly weak, and in need venture capital. Through projects, HT of significant strengthening to build BIs usually provides accounting and an effective ecosystem; legal services as well as secondments

62 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

etoring eg it oter entrepreneurs custoers 9 0

raining to eeop business sis 2 2 ccounting ega an oter reate serices 2

reincubation serices

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ins to iger ucation institutions 0 ep it eporting anor partner searc abroa 2 21

Maret researc saes an areting 2 21 roect Manageent aice an assistance 2 11

ep it raising ban finance 2 21 grants enture capita

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ice an assistance on 21 21 ne prouct eeopent ecnoog ransfer aice an assistance 21 11 Mentors boar ebers an oter senior aisers 2 ins to enture capita fun business ange netor 11 11 ecnoog coerciaiation aice an assistance 1 inouse ice an assistance in 1 ie eterna sources Manufacturingrouction Issues Inteectua propert anageent 11

0 10 20 0 0 0 0 0 0 Figure 21. Services Provided by HT BIs

etoring aong eperts 0

orsops 1

earning nine earning 9 19 1

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ase stuies 19

Bene training prograes 19 2

ora courses 19 1

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0 20 0 0 0 100

ig effectie er effectie ffectie

Figure 22. Effectiveness of Capacity Development Business Services Provided by HT BIs

63 5 | Performance assessment ofthe BIs in Serbia

Cooperation of HT BIs with A further model worth remarking on An interesting finding is an appar- other partners is the linkage between clusters and ent greater emphasis on export business incubators. For example, support than that found in the HT Cooperation with other SME and in Niš a positive example was ob- BIs; innovation support institutions relates served, whereby a tenant and strategic mostly to the sharing of resources and partners of Think Innovative is NICAT The package of core services deliv- exchange of experiences and good – the Niš cluster of advanced technol- ered seem appropriate to meeting practices. Interestingly, only a few HT ogies. core technical development needs BIs reported joint projects with their of a wide variety of SMEs; peers in support of tenant companies. This demonstrates an overall low level Cooperation of HT BIs with Individual coaching / mentoring is of cooperation amongst the BI organi- universities/faculties and other viewed as the most effective meth- sations, and an obvious area for future educational institutions od for developing client capacities; improvement. Cooperation with universities/faculties Joint projects in cooperation with and other educational institutions was regional development agencies, There are some notable exceptions surprisingly reported in only a few clusters or municipalities are rela- to this, however, with a good example cases. This is something that should tively common; being STP in Belgrade, which hosts be explored further, to identify better the BITF incubator, as well as other In- models and approaches for coopera- Modes of cooperation with industry novation related support e.g. the Inno- tion between HT BIs and academia. appear to be in areas that could vation Fund, and networks extensively be strengthened, as well as better both domestically and internationally. There are some very good examples cooperation with universities. of practice. One example we might usefully mention, is that of the good Connecting corporate/industry Services provided by the SE BIs challenges with respective relations between the University of tenant companies in HT BIs Novi Sad and BI Novi Sad. Similarly, There are eight different services Start-up Center Niš is well located provided by more than two thirds of There are some good examples close to the technical faculties of the SE BIs. This represents a greater of cooperation between industry, the University of Nis, providing direct variation than that found in HT BIs. In corporates and business incubators access to the pool of varied knowl- ranked order of provision, these are: within HT BIs. These are aside from edge (technological, legal, marketing, training to develop business skills; the obvious examples of the actual etc.) and some prototyping equipment pre-incubation services; help with ex- corporate incubators. These examples to test the product ideas is available porting and/or partner search abroad; can be used as the basis for sharing as well. The affiliation with and the networking, e.g. with other entrepre- of emerging good practices. proximity to the University is good neurs, customers; business planning for raising the awareness among the and forming a company; advice on One case is that of ICT Hub, which young audiences of the availability of recruitment of staff and personnel supports connections between large the start-up space and its services. management; project management industry and the start-up scene. advice and assistance; and market During the peer review session, it was research, sales and marketing. stated that the ICT Corporate coop- Summary of Support Services eration is a main growth factor of the and Networking for SE BIs This is a wide portfolio of services Hub. Another case worth mentioning There are some interesting findings to deliver effectively with the small is the Start up Center at the Faculty of related to the packages of services management teams that we have Economics, which has a database of delivered through SE BIs, together observed in SE BIs. One of the most some 500+ companies and contacts with the nature of cooperation with interesting findings from this list with industry. Many businesspeople other ecosystem actors, leading us to is the support to exporting and/or are involved in a mentoring network conclude the following: partner search abroad. A significantly already, but there may be opportuni- higher proportion of SE BIs appear to ties for the Center to further build its There is a wider variation in service be providing this than amongst HT competitive advantage based on these provision within the SE BIs than BIs. This might be explained by the contacts and clients. that found in HT BIs, perhaps reflecting their relative maturity; broader range of existing companies

64 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

with products found in SE BIs, but it is The five most commonly provided tors, board members and other senior something worth investigating further. in-house services amongst SE BIs are advisers; and advice and assistance in (ranked in order): project management manufacturing/production issues. As with HT BIs, access to board advice and assistance; pre-incubation members and other senior business services; networking, e.g. with other Accounting and legal services as well advisors is less common than would entrepreneurs, customers; business as secondments of mentors, board perhaps be desirable, given the effec- planning and forming a company; and members and other senior advisors tiveness of this as a service delivery advice on recruitment of staff and are examples where servicing of mode, and overall importance of men- personnel management. clients is delivered through projects toring to improve business manage- amongst some BIs. For example, ment practice. The five most common externally POMAK from Zaječar is involved in provided services are all covering very several well-developed networks sup- Perhaps less surprising is the limited practically focused issues that both portive of entrepreneurship promotion focus on aspects of technology com- start-ups and post-start-up SMEs typ- organization, notably the Serbian mercialisation, technology transfer, ically need: advice and assistance on Development Agency, the Serbian and access to equity finance, given the new product development; help with Chamber of Commerce, but also the primary focus and client base of many raising bank finance, grants, venture Regional Development Agency for SE BIs. capital; help with e-business and other Eastern Serbia (RARIS). aspects of ICT; and access to men-

raining to eeop business sis 9 2 etoring eg it oter 1 entrepreneurs custoers ep it eporting anor 9 partner searc abroa 1

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ins to iger ucation institutions 12 inouse ecnoog coerciaiation 0 ie eterna sources aice an assistance

0 20 0 0 0

Figure 23. Services provided by SE BIs

65 5 | Performance assessment ofthe BIs in Serbia

Iniiua coacing entoring etc 1 19 0

etoring aong eperts 0 0 0

orsops 0 0

earning nine earning 1 0

Bene training prograes 2 1

ora courses 19 0

ase stuies 19

Seftests sefassessent uies 0 0

0 20 0 0 0 100

ig effectie er effectie ffectie

Figure 24. Effectiveness of Capacity Development Business Services Provided by SE BIs

Effectiveness of Business Service Delivery Cooperation of SE BIs with other Methods for SE BIs partners

SE BI Managers indicated that the as presented in the Figure below. most effective way of learning and Workshops, online learning, blended Cooperation with other SME developing capacities is individual and formal training are also valued as and innovation support coaching / mentoring (80%), followed very or highly effective methods. institutions is mostly realised by networking amongst experts (75%) through joint projects. Commonly stated partners include regional development agencies, clusters or municipalities. Exchange of experience and sharing experiences is reported in only a few limited cases.

66 BI Valjevo

Connecting corporate/industry logistics for this investment. Today, As examples where some cooperation challenges with respective Leoni employ over 6000 workers in has taken place, we might mention BI tenant companies in SE BIs Serbia. Pomak, which reported that they have joint projects with the private Univer- With one exception amongst SE BIs, Cooperation of SE BIs with sity Megatrand, as well as BI Subotica universities/faculties and other direct connection between corporate/ who organise education-business educational institutions industry challenges and respective courses. The Faculty of Health, Legal tenant companies is the only reported and Business Studies has focused on mode of industrial cooperation. Only Cooperation between SE BIs the commonly referred to ‘third mis- StartIT reported other ways of coop- and universities/faculties and sion’ of universities, and development erating, namely: representatives of other educational institutions of the transversal enterprise compe- corporates/industry providing mentor- is in general at a very low level tency, recognizing the need to estab- ship/coaching to tenant companies, and reported in only a few lish BI Valjevo in 2015 with the goal corporates/ industry representatives cases. These few examples of enabling their students to develop helping evaluate business potential are where representatives an entrepreneurial spirit and business of tenant companies and organize of tenant companies have ideas through self-employment, es- hackathons. As an example of direct delivered lectures and /or run pecially as each study program in the connections working effectively, BIC business idea competitions. Even Faculty has a subject on entrepreneur- Prokuplje had fully implemented a assistance in finding internships ship. This location enables students brownfield investment of the German among tenant companies is to have the opportunity to articulate investor LEONI in 2008, where the BIC reported in only two cases. ideas that can be developed and sup- staff had provided complete business ported by the incubator.

67 6 Assessing Tenants’ Needs for Business and Innovation Support services

Understanding the various 6.1 Description of the aspect/added value of being a needs of tenant companies applied methodology tenant; for BI support and the degree z The interviews with the companies z Evaluation of the services provided to which they are presently by the BI that also includes, Impor- being met by the BIs, is key to were conducted during the Peer review process, when one of the tance of the BI services for to the developing strategic directions EUBID team members conducted the development of tenant business, and concrete actions to interviews with tenant companies. regularity of using a BI services and improve the general innovation All tenants in each selected BI were tenant suggestion for the improve- performance of a country or approached through their BI man- ment of BI services. agement. 1-3 tenants from each BI region. Undertaking regular The questionnaire included 8 ques- supply and demand side initiative was interviewed for 15-20 minutes. In addition, where the tenant tions in total, both structured (fixed) analysis is therefore standard company was participating at the peer multiple choice response questions, practice for most developed review workshop, this company was and non-structured (open) questions. countries. A BI tenant survey also interviewed. During some of the The Question on BI services (ques- enabled us to undertake a rapid Peer review sessions tenant compa- tion number 3) is closed type, which nies presented their businesses and means that the tenant companies gap analysis to identify where have to choose from the list which present needs are not being responded to the additional questions made by expert team and Peers. BI services they are using and which met, or are no longer required one they would like/need to use. This and to take action to make The questions in BI tenant question- is the same list of services as the suitable adjustments to their naire71 were organised around the one that the BI managers responded portfolio of offerings. following areas: during the assessment phase included in Quick scan questionnaire72. This en- zz Background data on companies abled the team to analyse whether the - providing basic information on BIs are providing the services that are companies and inputs that they needed by the tenant companies, and invested in their own business; prepare an overall gap assessment.

zz Initial contact, primary reason for Some questions are open type, since the collaboration, i.e. main motiva- the TAT wanted to learn more about tion to become a tenant of the BI i.e. the way how services can be im- and benefits, i.e. the most valuable proved or what are benefits of being a tenant of the BIs are.

71 EUBID Peer Review Approach, User Manual, Annex 6 BI initiative tenant questionnaire, 72 EUBID QUICK SCAN QUESTIONNAIRE, June 2019. March 2019.

68 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

Sample demand for the sector specific support Primary reason for the services. Second, the BI may not be collaboration In total 36 tenant companies filled in strategically located in the industry the Questionnaire, 15 from Self-em- centres or nearby large industry, where HT: In most of the cases, tenants ployment BIs and 21 from High tech they could mobilize a critical mass of indicated that their main motivation BIs. More than half of the companies start-ups involved in one sector. to become a tenant of the BI is a com- were additionally interviewed during munity network and visibility. This was the Peer review sessions. Although followed by a good working environ- this is in total a small number of 6.2.2 Relation with the BIs ment and to correct a lack of man- enterprises, statistically they should agement knowledge. The community represent well the tenant structure of The Table 14 and Table 15 present the network and visibility were indicated incubators in Serbia, since they were overview of the relations of the tenant by all interviewed companies. Only selected by and approached through companies with the BIs. More precise- one company from BI Kruševac stated the BI management. ly, they provide information on how the initial contacts were made, what the that low costs for working space is a primary reason for the collaboration primary reason for the collaboration. Data processing was, and finally what are the benefits The interviewed tenants of Start-up All data collected from the inter- of being a tenant of the BI. The first Center Niš pointed out that their views were entered into an excel file, table relates to the HT BIs and the motivation for incubation was the enabling further analysis, definition second to the SE BIs. proximity of laboratories and special- of common issues, best practice and ized equipment, given that the SC was located within the faculty building. particularities. Initial contact 6.2 Findings and analysis – HT: Most of the tenant companies SE: Almost all tenants of the SE BIs responded that the primary reason for Tenants in the BIs in HT BIs indicated that they found out about the BI through personal the collaboration is adequate working contacts (12 responses), internet i.e. space. Only very few also indicated Given many of the similarities between social media, web-site (4 respons- other reasons for collaboration like HT and SE BIs found in the supply side es), word of mouth (3 responses) acquiring new knowledge, support analysis of Chapter 5, findings from and other ways, i.e. promotion at the in establishing the company and the demand side analysis of the ten- training course, contact via survey networking. Tenants, whose activity ants in HT and SE BIs are presented in etc. Tenants from NIT Novi Pazar, includes manufacturing, cited the parallel. This enables easier compari- Think Innovative, STP Čačak, BI Novi existence of production halls within son among two groups of tenants and Sad mostly responded that the initial BI as an advantage. Apart from that, will lead also to the better understand- contact was made through personal grants received thanks to the help and ing of any similarities or differences contact, while tenants in Start-up support of BI, and connections with among these two groups. Center Niš made contact because of the business sector have been shown internet promotion. as an important benefit. 6.2.1 Background data on companies SE: Similar findings were found for the Benefits of being a tenant companies in SE BIs, where almost of the BI HT/SE: A high percentage of ICT com- all tenants responded that the initial panies in HT BIs is not surprising, but contact with the BI was made because HT:The most valuable aspect/added they are also widely represented in SE of personal contacts as well as recom- value of being a tenant is community, BIs. Marketing and sales are repre- mendations made by their contacts at networking and working environment, sented in both type of BIs. Additional- the faculties, municipalities or Cham- which confirms the primary reasons ly, in SE BIs there are manufacturing ber of Commerce. Only one company for the collaboration as stated above. based companies, for example, textile from BIC Prokuplje responded that the Also, several answers indicated that industry (Senta), furniture (Prokuplje), initial contact was made because of tenants are receiving other benefits metal processing (Užice) etc. internet promotion and one company like legal consulting and acquiring new from Pomak Zaječar responded that clients on the market. Tenants in Start- An overall conclusion is that BIs are the initial contact was made at the up centres in Belgrade and Niš are sat- not sector focused, corresponding with promotional event of the BI. isfied with the provision of services for conclusions made by the EU4TECH product testing and validation using project. The reasons, however, may be specialised equipment in collaboration different. First, there are not suffi- with faculties. cient start-ups and there is no critical

69 6 | Assessing Tenants’ Needs for Business and Innovation Support services

HT BIs Primary reason for Initial contact Benefits Service improvements (21 tenants) the collaboration

community network, working environment, pricing, BI Novi Sad (2) personal contact working space, equipment, acceleration, consulting great community funds,

dedicated server, community and visibility, networking, project management personal contact, close vicinity of labs, visibility, courses, Start-up Centre, from Faculty staff, personnel, unique software, Niš (3) testing products, internet (website) good working environment, legal and marketing computer equipment, lack of special equipment assistance more labs and technology

better facilities, mentoring, working space, NIT Novi Pazar personal contact, bigger team of BI, lack of management legal consulting (3) from Faculty staff knowledge better visibility, access to funds for financing

building network in personal contact, community network, Serbia and region, ICT HUB, internet, better facilities, events, networking, Belgrade (3) BI asked them for virtual office assistance visibility and community new clients on local survey market

BIC Kragujevac personal contact good working environment (1)

Think internet (social networking, Innovative, Niš media), good facilities, (3) word of mouth accessibility

good working environment, networking and creating IT ecosystem, STP Čačak (2) personal contact creating IT ecosystem business support attracting young people

working space, equipment, more trainings, BI Kruševac (2) personal contact low costs for working space, meeting rooms, seminars consulting working environment

help at beginning of Infostud HUB, personal contact business, nice working space legal consulting Subotica (1) good facilities

working space, Start-up Centre, at an entrepreneur- lack of management mentorship, access to funds for Belgrade (1) ship course knowledge lectures, financing product validation

Table 14. Tenant companies relation with HT BIs

70 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

SE BIs Primary reason for Initial contact Benefits Service improvements (15 tenants) the collaboration

legal services, adequate working space adequate facilities, personal contacts better equipment, (from Municipality and lease, security of equipment, BIC Užice (2) lab, and Chamber of production halls, lower costs, Commerce) product development services visibility services

lease of working space, better facilities, BI Zrenjanin (1) personal contact office space business development lower rental fee

networking, working environment, equipment, personal contact, acquiring of new more connection with BI Valjevo (2) nice working space, from Faculty staff knowledge, other people good cooperation with BI free space equipment

increase of office BIC Bački adequate working space connection with business space, personal contact Petrovac (1) and lease sector IT support, more advertisement

rental fees, adequate working space bigger facilities, BIC Bor (1) personal contact administrative services, and lease lower rental fee security of equipment

recommended by the BI Majdanpek (1) office space office space Municipality

adequate working space Networking, BI Senta (2) personal contact and lease, working space, meeting room halls

free office space, BI help them to establish accounting services, personal contact, company, obsolescence of BIC Prokuplje (2) working space, internet (website) adequate working space equipment and lease legal services, networking

connection with business Business connection with business sector, Dev. Centre personal contact sector, received grants, Kragujevac (2) exchange program connection with business sector

POMAK, Zaječar working space, promo event rental fees better equipment (1) productivity

Table 15. Tenant companies relation with SE BIs

71 6 | Assessing Tenants’ Needs for Business and Innovation Support services

Importance of the BI services re e erie 0 HT: Figure 25 indicates the perceived importance of support provided by the HT incubators for development of the 0 5 companies. More than 50% of tenant companies indicated that the support 0 provided by the incubator for development of their company has been important, with 33% saying it was critical 0 for development and that without this support the company would not have 20 been successful.

During the interviews, it was indicated 10 by respondents that the services provided are slightly more important than

0 infrastructure. An interesting finding ritica Iportant ot er iportant is that 14% reported that this support was not very important and that the company would have achieved the Figure 25. Importance of the BI services for development of tenant company in HT BIs same results in other circumstances.

SE: The importance of support provided by the SE incubators for development of the companies is presented re e erie in the Figure 26. In total, 60% perceive 0 BI services as important, whilst 20% equally reported that this importance was critical. The same proportion 0 (20%) stated that the support was not very important.

0 Regularity of using BI services

0 We also wanted to know how regularly tenant companies are using BI services (apart from facilities related 20 to premises). 10 HT: As presented in Figure 26, less than half (43%) of tenants reported that they are using services daily, reg- 0 ularly and occasionally. This leads to ritica Iportant ot er iportant assumption that the main purpose of tenants to be hosted by business incu- Figure 26. Importance of the BI services for development of tenant company in SE BIs bator is not necessarily the provision of the business incubation services, but rather low rent price, convenient or SE: For the tenants in the SE BIs, apart reason for collaboration was working attractive location, etc. from the working space, an impor- space, by being tenants they also tant benefit includes grants received received other benefits as well, like SE: The answers that are received thanks to the help and support of BI, needed services, access to networks from the tenants of SE BIs regarding and connections with the business etc. the regularity of using a BI service sector. This is a good indication since does not demonstrate a clear pattern. whilst for all of the tenants the primary As presented in Figure 27, almost an

72 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

providing better equipment, IT support, eguri uig erie and more space for renting under 0 more favourable conditions (prices). Tenants in BIC Užice, where most have 0 their own products and use production facilities, suggested setting up a BI testing laboratory, with appropriate 0 equipment for product development and validation. Advertising and mar- 20 keting services are also highlighted as important areas for improvements. 19 10 Business and innovation support services 0 In addition to providing space and ai eguar ccasiona administrative services for incubator tenants, business support services are Figure 27. Regularity of using a HT BI services essential. Additionally, for technology incubators and science and technology parks, R&D and Innovation services are also required. The status of the eguri uig erie current offer of these services has 0 been identified through the performance assessment of BIs in Serbia and the results of the survey are 0 presented in Chapter 5 of this study as supply side analysis. Within this demand side analysis, the survey results 20 from the tenants of BIs determine what services tenants are actually 10 used and which services tenants would like to use. The results of that analysis are presented below. 0 ai eguar ccasiona Figure 29, Figure 30 and Figure 31 present services that tenant compa- Figure 28. Regularity of using a SE BI services nies receive, would like to receive and the gap between demand and supply in BIs supporting high-tech startups. equal number of tenants reported that services. There were some individual they are using services daily, regularly proposals for the introduction of new The findings can be summarized as and occasionally. courses and seminars, for example a follows: project management course. Although Service improvements our data analysis determined that sup- zz Only 6 service out of 19 to ply and demand for accounting and be considered standard in BI HT: Tenants provided varying answers legal services are fairly well balanced, operations were exploited by regarding needed service improve- some residents have suggested needs more than a quarter of tenants: ments. During the interviews, most for improvements in these services, networking (e.g. with other entrepreneurs, customers); of the tenants emphasized the need in particular legal issues. The need to accounting, legal and other related for BI to assist in accessing funds purchase certain software and equip- services; business skills training; for financing their business. This ment for product development was advice on human resource (HR) was confirmed by BI managers at the also noted. issues; links to higher education Peer review workshops. Tenants in (HE) Institutions; and pre- Novi Sad recognize the importance of SE: Most of the service improvements incubation services; establishing acceleration support and should be related to legal services,

73 6 | Assessing Tenants’ Needs for Business and Innovation Support services

etoring eg it oter entrepreneurs custoers ccounting ega an oter reate serices

reincubation serices 29

raining to eeop business sis 29 ice on recruitent of staff 29 an personne anageent ins to iger ucation institutions 29

ins to enture capita fun 2 business ange netor Business panning an foring a copan 19 ep it raising ban finance 1 grants enture capita ice an assistance on 1 ne prouct eeopent Mentors boar ebers 1 an oter senior aisers Maret researc saes an areting 10

ep it eporting anor 10 partner searc abroa ice an assistance in 10 Manufacturingrouction Issues ecnoog coerciaiation 10 aice an assistance roect Manageent aice 10 an assistance Inteectua propert anageent

ecnoog ransfer aice an assistance

ep it ebusiness 0 an oter aspects of I

0 10 20 0 0

Figure 29. HT BIs services that tenants receive

zz Only half of these six are in balance zz The most used service is related to to develop business models and – where difference between networking of tenants with other entrepreneurial skills, provided by received services and services that entrepreneurs and customers incubators, start-up centres and tenants would like to receive is less which helps to build a business STPs in university cities (Novi than 10%. These are accounting, community and culture, though it Sad, Belgrade, Nis, Kragujevac, legal and other related services is sometimes a matter of balance Čačak and Novi Pazar). The same (gap of 5%); training to develop how actively should tenants be number of respondents reported business skills (gap of 4%), advice involved in all these activities. that they used the BI service to on HR issues (excess of 4%). To be Usually they naturally prefer to connect with Higher Education noted that these services are very focus on their current business institutions. Through collaboration basic and relevant to all business issues instead of participating in with faculties, as educational incubators around the world and community events. In other words, institutions, BIs assisted residents it should be emphasized at this most incubators in the world face (33%) in recruiting staff and point that the current balance the issue of engagement of tenants personnel management. However, supports initial conclusion that into their initiatives. these two services are not among current standing of BIs in Serbia in those that tenants would like to between 1st and 2nd generations zz One third of respondents used pre- receive further. Since these are (Figure 4). incubation service and trainings very important services in service for business skills development, portfolios of any HT BI, we presume

74 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

Mentors boar ebers an oter senior aisers Maret researc saes an areting ep it raising ban finance grants enture capita ccounting ega an oter reate serices ins to enture capita fun business ange netor raining to eeop business sis ice an assistance on ne prouct eeopent ecnoog coerciaiation aice an assistance ep it ebusiness an oter aspects of I etoring eg it oter 29 entrepreneurs custoers ice on recruitent of staff 2 an personne anageent ep it eporting anor 2 partner searc abroa roect Manageent aice 19 an assistance ins to iger ucation institutions 1

Business panning an foring a copan 1 ice an assistance in 1 Manufacturingrouction Issues Inteectua propert anageent 1

ecnoog ransfer aice an assistance 1

reincubation serices 10

0 10 20 0 0

Figure 30. HT BIs services that tenants would like to receive

that reasons for lack of demand scope of the service with more in-house and that could be made of the services are either bad specific and targeted approach available through strong links with experience in previously received when service is provided not only alumnis, industrial companies instances or lack of promotion of through open workshops, but also operating in the region or national benefits of services from BI side. through individual coaching and network of mentors operated by In both cases, capacity building in mentoring. RAS. the fields would be recommended solution. zz A similar situation is found with zz There was a need to support regards to needs for business tenants in raising bank finance, zz 48% of respondents would most services provided by mentors, grants, venture capital funds like to receive services for market board members and senior (43%), as only 14% received the research, sales and marketing, advisers These are required by service. This service is provided whereas only 10% received this 48% of surveyed tenants, with only by a quarter of incubators as service. However, only 33% of HT 14% receiving the service. No HT in- house service and by a fifth BIs offered these services. The lack BIs offer this in-house service, through external services. In order of supply of in-house services by and a quarter of the BIs offer it to address this issue, BIs need to BIs is provided through external only through external service and establish closer links with business services (21% BIs). This clearly projects. Likely, none of the BIs angels, venture capital funds and indicates the need to improve the is capable to maintain mentors individual investors to organize

75 6 | Assessing Tenants’ Needs for Business and Innovation Support services

Maret researc saes an areting ep it ebusiness an oter aspects of I Mentors boar ebers an oter senior aisers ep it raising ban finance 29 grants enture capita ecnoog coerciaiation 2 aice an assistance ice an assistance in 19 Manufacturingrouction Issues ep it eporting anor 1 partner searc abroa ins to enture capita fun 1 business ange netor ecnoog ransfer aice an assistance 10

Inteectua propert anageent 10 roect Manageent aice 10 an assistance ice an assistance on ne prouct eeopent raining to eeop business sis

ccounting ega an oter reate serices

Business panning an foring a copan ice on recruitent of staff an personne anageent ins to iger ucation institutions 1 etoring eg it oter 1 entrepreneurs custoers reincubation serices 19

20 10 0 10 20 0 0

Figure 31. Main Gaps in service provision in HT BIs

periodic pitch events when start- ICT. These are reported not to be commercialization, with only a few ups would have presented the used by any tenant, but with a third HT BI tenants receiving services opportunity to introduce their of all tenants stating that they (10% and 14%, respectively). business ideas to investors. It would like to receive this service. There is an evident problem in should be underlined here that HT BIs reported that this service providing this service, since only this incentive is responsibility is offered by a third of incubators 5% of incubators offer technology not only of BIs, but of investors as an in-house service, and by a commercialization services in- as well and these links improve third of incubators through external house, and 16% as external service. while the culture of exploitation of service provision, so indicatively Only 21% of incubators support investment funds develops. there is an incubator supply that in-house development of new can meet the stated need of products, with the same number of zz Other most accessed services tenants. The question is whether BIs relying on external services. have surplus in supply side the tenants are satisfied with the comparing to if tenants would quality of the service, or are not For SE BIs we present similar compar- like to receive those services. The aware of that which is on offer. ison between services received, those major discrepancies between that tenants would like to receive and z what is received and offered are z One-third of tenants need the gap between supply and demand for services related to help with incubator support in new product of the services in Figure 32, Figure 33 e-business and other aspects of development and technology and Figure 34.

76 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

etoring eg it oter entrepreneurs custoers

Maret researc saes an areting

ccounting ega an oter reate serices 0 ice on recruitent of staff an personne anageent 0

raining to eeop business sis ep it raising ban finance grants enture capita roect Manageent aice an assistance Mentors boar ebers an oter senior aisers ep it ebusiness an oter aspects of I 2

ins to iger ucation institutions 2

reincubation serices 20

Business panning an foring a copan 20 ep it eporting anor partner searc abroa 20 ecnoog coerciaiation aice an assistance 20

ecnoog ransfer aice an assistance 20 ins to enture capita fun business ange netor 1

Inteectua propert anageent 1 ice an assistance on ne prouct eeopent 1

ter serices 1 ice an assistance in Manufacturingrouction Issues

0 20 0 0 0

Figure 32. SE BIs services that tenants receive

There is a noticeable different pattern Project management advice and fail to demonstrate benefits of the in the services that SE BI clients assistance (balance); Advice and services to their tenant companies access, or would like to access. Nine assistance in manufacturing/pro- and tenants are not aware of possi- different services are used by more duction issues (balance); Advice bility to receive services in addition than a quarter of clients, a considera- and assistance on new product to space rent; secondly, profiles of bly wider range than found in HT BIs. development (balance); Intellectual tenants suggests that their main The findings can be summarized as property management (balance); interest to stay with business incu- follows: links to HE institutions (excess of bator is space. The latter assump- 7%) – are in balance, i.e. difference tion is well supported by the fact zz Results demonstrate that there are between received services and that networking service for tenants, no considerable gaps in service services that tenants would like which is main instrument to build received and service would like to receive is less than 10%. Whilst business community, exceeds the to receive. 8 services – help with all other services show significant demand by 53%. e-business and other aspects of excess. ICT (gap of 7%); help with export- zz 47% and 40% of tenants, respec- ing and/or partner search abroad Reasons for such a disparity are tively, used market research, sales (gap of 7%); business planning and twofold: firstly, SE BIs do not take and marketing, accounting, legal forming a company (gap of 7%); proactive position in provision and and other related services and

77 6 | Assessing Tenants’ Needs for Business and Innovation Support services

roect Manageent aice an assistance ep it ebusiness an oter aspects of I Maret researc saes an areting ep it eporting anor 2 partner searc abroa Business panning an foring a copan 2 Mentors boar ebers 20 an oter senior aisers ins to iger ucation institutions 20 etoring eg it oter 20 entrepreneurs custoers ccounting ega an oter reate serices 20

raining to eeop business sis 20 ice an assistance in 1 Manufacturingrouction Issues Inteectua propert anageent 1 ecnoog coerciaiation aice an assistance ice an assistance on ne prouct eeopent ice on recruitent of staff an personne anageent ter serices 0

ecnoog ransfer aice an assistance 0 ins to enture capita fun 0 business ange netor ep it raising ban finance 0 grants enture capita reincubation serices 0

0 10 20 0 0

Figure 33. SE BIs services that tenants would like to receive

advice on recruitment of person- toring. The services that the ten- zz There is a gap in supply and nel and personnel management. ants would like to receive are help demand for advice and assistance Similarly to summary of findings with e-business and other aspects on new product development for HT BIs, these services are very of ICT, project management advice wanted by 13% and only 6% of SE basic and relevant to all business and assistance. BIs offer the first service in-house incubators around the world and and almost half of them through it supports initial conclusion that zz A quarter of tenants said they had external services. Insights from current standing of BIs in Serbia in used links with Higher Education visits to SE BIs and peer reviews between 1st and 2nd generations Institutions as a service. 20% of suggests that most tenants of SE (Figure 4). tenants would have liked to use the BIs would appreciate and benefit service, but since the SE BIs did not from such a service as there are zz One-third of interviewed tenants report offering the service, the ten- numbers of individuals or micro/ completed business skills develop- ants apparently had to access the small companies producing their ment training and used incubator assistance from other institutions own products. Furthermore, availa- assistance with financial services, or HT BIs. bility and promotion of the service project management tips and men- would contribute in attraction of

78 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

ter serices 1

Mentors boar ebers 1 an oter senior aisers roect Manageent aice 0 an assistance ecnoog ransfer aice an assistance 20

ins to iger ucation institutions ecnoog coerciaiation 1 aice an assistance ice an assistance in 0 Manufacturingrouction Issues ice an assistance on 0 ne prouct eeopent Inteectua propert anageent 0 etoring eg it oter entrepreneurs custoers ice on recruitent of staff an personne anageent ins to enture capita fun business ange netor 1 ep it raising ban finance grants enture capita ep it ebusiness an oter aspects of I ep it eporting anor partner searc abroa

Maret researc saes an areting 1

ccounting ega an oter reate serices 20

raining to eeop business sis 1

Business panning an foring a copan

reincubation serices 20

0 0 0 0 20 10 0 10

Figure 34. Main Gaps in service provision in SE BIs

other small entrepreneurs to use BI 6.3 Gap Assessment For HT BIs, it is evident that there is a services including facilities. between BI Service gap in the delivery of services due to Supply and Tenant the lower supply of in-house services zz It is curious that 70% of the BIs than demand, even with the involve- offer pre-incubation services, but Demand ment of external service providers, for that only 20% of tenants found the following services: them beneficial, whilst others In order to identify overall gaps did not wish to use them. Again, between supply and demand, com- Mentors, board members and assumption is made that SE BIs parative survey results and responses other senior advisers (supply – 0%, fail to demonstrate benefits of the provided by BI managers (service sup- demand – 48%, gap – 48%); services to a community in order ply) were analysed in correlation with to reach out to new clients and tenants need (service demand). The Technology commercialization ad- community is not aware of possibil- findings are presented in Table 16 (for vice and assistance (supply – 5%, ity to receive services in addition to HT BIs) and Table 17 (for SE BIs). demand – 33%, gap – 28%); space rent.

79 6 | Assessing Tenants’ Needs for Business and Innovation Support services

Less supply by BI More supply than Service Gaps – HT BIs Well balanced than demand demand

Market research, sales and marketing √

Mentors, board members and other senior advisers √

Help with raising bank finance, grants, venture capital √

Links to venture capital fund, business angel network √

Advice and assistance on new product development √

Technology commercialization advice and assistance √

Intellectual property management √

Advice and assistance in Manufacturing/Production Issues √

Accounting, legal and other related services √

Training to develop business skills √

Help with e-business and other aspects of ICT √

Networking, e.g. with other entrepreneurs, customers √

Help with exporting and/or partner search abroad √

Advice on recruitment of staff and personnel management √

Project Management advice and assistance √

Business planning and forming a company √

Links to Higher Education institutions √

Technology Transfer advice and assistance √

Pre-incubation services √

Table 16. Main Gaps in Service Provision by HT BIs

Links to venture capital fund, busi- Intellectual property management Advice on recruitment of staff and ness angel network (supply – 11%, (supply – 5%, demand – 14%, gap personnel management (supply – demand – 38%, gap – 27%); – 9%); 65%, demand – 7%, excess – 58%);

Help with e-business and other Advice and assistance in manufac- Networking, e.g. with other entre- aspects of ICT (supply – 11%, turing/production issues (supply – preneurs, customers (supply – 71%, demand – 33%, gap – 22%); 5%, demand – 14%, gap – 9%). demand – 20, excess – 51%)

Help with raising bank finance, For SE BIs, again, the situation is Training to develop business skills grants, venture capital (supply – much different as there are no evident (supply – 59%, demand – 20%, 26%, demand – 43%, gap – 17%); gaps in delivery and demand of the excess – 39%); services. In a contrary, SE BI managers Market research, sales and market- indicates that their BIs have most of Accounting, legal and other related ing (supply – 32%, demand – 48%, the services in-house, however, ten- services (supply – 59%, demand – gap – 16%); ants are not using those to a desired 20%, excess – 39%); extent: Advice and assistance on new Business planning and forming a product development (supply – Pre-incubation (supply – 71%, de- company (supply – 65%, demand – 21%, demand – 33%, gap – 12%); mand – 0%, excess – 71%); 27%, excess – 38%);

80 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

Less supply by BI More supply than Services - SE BIs Well balanced than demand demand

Links to Higher Education institutions √

Mentors, board members and other senior advisers √

Intellectual property management √

Advice and assistance on new product development √

Advice and assistance in Manufacturing/Production Issues √

Technology commercialization advice and assistance √

Help with raising bank finance, grants, venture capital √

Market research, sales and marketing √

Help with e-business and other aspects of ICT √

Technology Transfer advice and assistance √

Project Management advice and assistance √

Business planning and forming a company √

Help with exporting and/or partner search abroad √

Training to develop business skills √

Accounting, legal and other related services √

Networking, e.g. with other entrepreneurs, customers √

Advice on recruitment of staff and personnel management √

Pre-incubation services √

Links to venture capital fund, business angel network √

Table 17. Main Gaps in Service Provision by SE BIs

Project management advice and 6.4 Benchmarking of against which Serbian performance assistance (supply – 71%, demand BIs services and can be compared. – 33%, excess – 38%); recommendations on The questionnaires contained a sim- Help with exporting and/or partner service portfolio* ilar list of 14 comparable pre-defined search abroad (supply – 59%, de- incubator services, offered in-house A survey73 conducted by the Center mand – 27%, excess – 32%). and through external services. In for Strategy & Evaluation Services the EUBID project, this list has been (CSES) for the European Commission- There are also services that are not expanded with services that support ing Enterprise DG, in 2002 evaluated available in the service portfolio of SE innovation and technology transfer. the business support services of BIs, but are demanded by at least 20% incubators in Europe, and their impact of tenant companies and are worth Table 18 and Table 19 compare the on business performance of their ten- considering of adding these services findings of the incubator analysis in ants. Whilst rather dated, it is still one into service portfolio. The services Serbia with the findings of the CSES of the most comprehensive surveys of include: links to higher education insti- research and the situation in the its’ kind, and gives indicative figures tutions; and, mentors, board members European incubators. Within these and other senior advisers. we present normalized BIs average responses, which sum to 100%, using 73 Benchmarking business incubators, European a similar principle as in the CSES Commission Enterprise Directorate-General, research. 2002.

81 6 | Assessing Tenants’ Needs for Business and Innovation Support services

Serbian BIs average responses EU BIs average responses up to 100% up to 100% Supply – HT BIs Via external Via external In-house In-house sources sources

Pre-incubation services 10.00% 1.75% 11.70% 3.30%

Business planning and forming a company 10.91% 0.07% 11.00% 5.50%

Training to develop business skills 5.45% 10.53% 6.40% 10.30%

Accounting, legal and other related services 6.36% 8.77% 2.80% 12.50%

Market research, sales and marketing 5.45% 7.02% 5.50% 11.40%

Help with exporting and/or partner search abroad 5.45% 7.02% 5.00% 9.20%

Help with e-business and other aspects of ICT 1.82% 15.79% 6.90% 7.70%

Help with raising bank finance, grants, venture capital 4.55% 7.02% 12.10% 6.10%

Links to venture capital fund, business angel network 1.82% 3.51% 5.50% 7.00%

Advice on recruitment of staff and personnel management 7.27% 1.75% 5.70% 7.70%

Networking, e.g. with other entrepreneurs, customers 13.64% 0.00% 11.40% 5.30%

Intellectual property management 0.91% 3.51% N.A. N.A.

Advice and assistance on new product development 3.64% 7.02% 7.70% 7.70%

Advice and assistance in Manufacturing/Production Issues 0.91% 5.26% N.A. N.A.

Technology commercialization advice and assistance 0.91% 5.26% N.A. N.A.

Links to Higher Education institutions 10.00% 0.00% N.A. N.A.

Technology Transfer advice and assistance 3.64% 3.51% N.A. N.A.

Project Management advice and assistance 7.27% 3.51% N.A. N.A.

Mentors, board members and other senior advisers 0.00% 8.77% 6.80% 5.90%

Other services 0.00% 0.00% 1.40% 0.70%

Total services offered by all HT BIs 100% 100%

Table 18. Comparison of BI service supply – Serbian HT BIs and European incubators

Eight services have similar supply BIs in-house services compared to and BA network, while in Serbia this trends, while different trends are external ones, while in EU incuba- service is underdeveloped); marked for other services. These tors it is equally represented); areas of difference are: zz Advice and assistance on new zz Help with raising bank finance, product development (smaller HT zz Accounting, legal and other related grants, venture capital (almost BIs offer of in-house service); services (EU incubators mainly out- three times more the supply of EU source this service to an external incubators for in-house service); zz Mentors, board members and other service provider); senior advisers (HT BIs do not offer zz Links to venture capital fund, busi- this in-house service at all, in com- zz Help with e-business and other ness angel network (EU incubators parison with EU incubators). aspects of ICT (small supply of HT provide tenants with venture capital

82 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

Serbian BIs average responses EU BIs average responses up to 100% up to 100% Supply – SE BIs Via external Via external In-house In-house sources sources

Pre-incubation services 10.61% 1.92% 11.70% 3.30%

Business planning and forming a company 9.72% 1.92% 11.00% 5.50%

Training to develop business skills 8.84% 7.67% 6.40% 10.30%

Accounting, legal and other related services 8.84% 0.07% 2.80% 12.50%

Market research, sales and marketing 7.07% 7.67% 5.50% 11.40%

Help with exporting and/or partner search abroad 8.84% 5.75% 5.00% 9.20%

Help with e-business and other aspects of ICT 5.30% 9.59% 6.90% 7.70%

Help with raising bank finance, grants, venture capital 3.54% 11.51% 12.10% 6.10%

Links to venture capital fund, business angel network 0.88% 5.75% 5.50% 7.00%

Advice on recruitment of staff and personnel management 9.72% 1.92% 5.70% 7.70%

Networking, e.g. with other entrepreneurs, customers 10.61% 1.92% 11.40% 5.30%

Intellectual property management 0.03% 5.75% N.A. N.A.

Advice and assistance on new product development 0.88% 15.34% 7.70% 7.70%

Advice and assistance in Manufacturing/Production Issues 0.03% 9.59% N.A. N.A.

Technology commercialization advice and assistance 0.03% 0.07% N.A. N.A.

Links to Higher Education institutions 0.03% 3.84% N.A. N.A.

Technology Transfer advice and assistance 3.54% 0.07% N.A. N.A.

Project Management advice and assistance 10.61% 0.07% N.A. N.A.

Mentors, board members and other senior advisers 0.88% 9.59% 6.80% 5.90%

Other services 0.00% 0.00% 1.40% 0.70%

Total services offered by all SE BIs 100.00% 100.00%

Table 19. Comparison of BI service supply – Serbian SE BIs and European incubators

When it comes to SE BIs then the dif- zz Links to venture capital fund, busi- zz Mentors, board members and other ferences are noticed in the following ness angel network (EU incubators senior advisers (very small supply services: provide tenants with venture capital of SE BIs in house services). and BA network, while in Serbia this zz Accounting, legal and other related service is underdeveloped); services (this service is not outsourced at all in Serbia, unlike EU zz Advice and assistance on new incubators); product development (In Serbia this is mostly outsourced while in Eu- zz Help with raising bank finance, rope it is equally offered in-house grants, venture capital (a small sup- and outsourced); ply from SE BIs in-house services);

83 6 | Assessing Tenants’ Needs for Business and Innovation Support services

Individual (multiple) responses Ranking of received services by tenants (up to 100%) Demands – HT tenants Would like to Receive receive (up to RS ranking EU ranking (up to 100%) 100%)

Pre-incubation services 8.57% 1.82% 3 3

Business planning and forming a company 5.71% 2.73% 8 2

Training to develop business skills 8.57% 6.36% 4 4

Accounting, legal and other related services 10.00% 7.27% 2

Market research, sales and marketing 2.86% 9.09%

Help with exporting and/or partner search abroad 2.86% 4.55%

Help with e-business and other aspects of ICT 0.00% 6.36%

Help with raising bank finance, grants, venture capital 4.29% 8.18% 5

Links to venture capital fund, business angel network 7.14% 7.27% 7 1

Advice on recruitment of staff and personnel management 8.57% 4.55% 5 8

Networking, e.g. with other entrepreneurs, customers 12.86% 5.45% 1

Intellectual property management 1.43% 2.73%

Advice and assistance on new product development 4.29% 6.36% 6

Advice and assistance in Manufacturing/Production Issues 2.86% 2.73%

Technology commercialization advice and assistance 2.86% 6.36%

Links to Higher Education institutions 8.57% 2.73% 6

Technology Transfer advice and assistance 1.43% 2.73%

Project Management advice and assistance 2.86% 3.64%

Mentors, board members and other senior advisers 4.29% 9.09%

Other 0.00% 0.00% 7

Total services – receive/would like to receive by tenants 100.00% 100.00%

Table 20. Comparison of HT BI tenant needs – ranking of used/needed services by Serbian and European tenants

Table 20 and Table 21 show the services received by EU BIs tenants. results of the service evaluation by For tenants in Serbia, the ranking of the tenants. As previously, values services was done according to how are normalized, totalling up to 100%, much they were used by incubator for HT BIs and SE BIs. The results of tenants. the CSES survey show the ranking of

84 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

Individual (multiple) responses by Ranking of received services tenants (up to 100%) Demands – SE tenants Would like to Receive receive (up to RS ranking EU ranking (up to 100%) 100%)

Pre-incubation services 3.66% 0.00% 3

Business planning and forming a company 3.66% 8.89% 2

Training to develop business skills 6.10% 6.67% 5 4

Accounting, legal and other related services 7.32% 6.67% 4

Market research, sales and marketing 8.54% 11.11% 2

Help with exporting and/or partner search abroad 3.66% 8.89%

Help with e-business and other aspects of ICT 4.88% 11.11%

Help with raising bank finance, grants, venture capital 6.10% 0.00% 6 5

Links to venture capital fund, business angel network 2.44% 0.00% 1

Advice on recruitment of staff and personnel management 7.32% 2.22% 3 8

Networking, e.g. with other entrepreneurs, customers 13.41% 6.67% 1

Intellectual property management 2.44% 4.44%

Advice and assistance on new product development 2.44% 4.44% 6

Advice and assistance in Manufacturing/Production Issues 1.22% 2.22%

Technology commercialization advice and assistance 3.66% 2.22%

Links to Higher Education institutions 4.88% 6.67%

Technology Transfer advice and assistance 3.66% 0.00%

Project Management advice and assistance 6.10% 11.11% 7

Mentors, board members and other senior advisers 6.10% 6.67% 8

Other services 2.44% 0.00% 7

TOTAL services received/would like to receive by tenants 100.00% 100.00%

Table 21. Comparison of SE BI tenant needs – ranking of used/needed services by Serbian and European tenants

85 6 | Assessing Tenants’ Needs for Business and Innovation Support services

6.5 Proposals for the 6.5.1 Proposals for the Service Therefore, we recommend keeping Service Portfolio Portfolio Development most of the services available and of High-Tech Business Development putting more efforts on promotion of Incubators business incubation services among existing and potential clients, build- Finally, by looking at the data from For HT BIs, the list combines services ing staff capacity in delivery of these both the business incubator managers with the largest supply and demand services as well as on selection of and the incubator clients, we were gap as well as those that are demand- tenants who are in need of soft servic- able to identify areas where there is ed the most by the tenants of BIs and es – consultations, instead of simply potential over supply of service, and a new service – links to corporates using the facilities. areas where services need to be intro- – which based on current trends in duced or enhanced. business incubation in Europe, adds Additionally, based on this assess- substantial value for BI clients. ment, peer review recommendations, Based on this, we present for each outcomes from tenants’ question- type of business incubator a ranked 6.5.2 Proposals for the Service naires and experts’ insights, we identi- list of ten key areas for further service Portfolio Development of fy the top ten services that could com- enhancement that could form the ba- Self Employment Business plement existing service portfolio of sis of a structured service portfolio. Incubators SE BIs. The list combines services that For SE BIs, the situation is rather com- are in balance in terms of supply and plicated as SE BIs do have most of the demand, services that are inseparable important services in their portfolio from any business incubation ecosys- to assist businesses in their growth. tem and those that could add substan- However, the utilization of these tial value to BI clients especially those services by BI tenants is inadequate. engaged in manufacturing:

1. Mentors, board members and other senior advisors

2. Technology commercialization advice and assistance

3. Help with e-business and other aspects of ICT Largest gaps 4. Links to venture capital fund, business angel network

5. Market research, sales and marketing

6. Advice and assistance on new product development

7. Pre-incubation

8. Networking, e.g. with other entrepreneurs, customers Underpromoted services

9. Links to higher education institutions

10. Links to corporates New services

Table 22. Proposals for Top 10 services to be included in service portfolio of HT BIs

86 ICT Hub

1. Help with e-business and other aspects of ICT

2. Help with exporting and/or partner search abroad Underpromoted services 3. Business planning and forming a company

4. Project management advice and assistance

5. Market research, sales and marketing

6. Mentors, board members and other senior advisors

7. Links to higher education institutions Inseparable and new services 8. Networking, e.g. with other entrepreneurs, customers

9. Pre-incubation

10. Links to corporates

Table 23. Proposals for Top 10 services to be included in service portfolio of SE BIs

87 7 BI Roadmaps and Identified Suggestions for Upgrading BIs

As reported earlier, through 7.1 Main Conclusions from and global business networks, this the Peer Review process, the Roadmaps doesn’t happen straightforwardly like Roadmaps were prepared for this in most real situations. In practice most incubators comprise a strategi- twenty business incubators. 7.1.1 Dynamic tendencies in the cally grounded mix of all 3 elements. Serbian BI sector These were developed through In Serbia, though, the impression is joint work between project Generally speaking, the positive im- that the majority of BIs at present are experts, and the management pression is that all of the visited and mostly middling somewhere between teams of the business assessed incubation-type business the first and the second stages of incubators, with additional support institutions are in different the BI development, with the best stages development. Simply put, they ones moving towards the third, and input from tenants of the are all in one way or the other looking with many renovated spaces are still business incubators. In this for new strategic development paths. unfilled with tenants, alongside wait- chapter we report on the main They all say they need a long-term ing lists of potential tenants that are conclusions from analysis of strategy and plan. nearly non-existent. all of the Roadmaps. We also provide a summary of some of This is a very positive feature as those, On the other hand, the managers of seemingly less advanced institutions, the BIs indicated that they do provide the innovative ideas proposed are trying to find strategies and ways basic business management servic- by the business incubators for to catch up, while others, seemingly es and consultancy to their tenants, improving business incubator more advanced in the local context, though the interviews with the tenants effectiveness and efficiency. are trying to find ways to transform have indicated that many tenants into more sophisticated providers of wish for access to some specialized the advanced-level and more complex services that the BIs are not compe- business support services. tent to provide at the moment. Many BI managers identify that in order to Despite the widely-recognized theory provide some specialized services of the stages in the development of they would need more well-trained BIs (see Figure 4. Current Standing of staff members. This is not necessarily Serbia in a Phased Development of the best possible solution, however, as Business Incubation) we described specialized services need state-of-the earlier in the report, which promotes art practical knowledge on specific that the first-generation incubators topics. In many instances this could as being concerned with the rent- be better provided by outsourced al of spaces for the tenants, the specialists from the private sector. second-stage incubators offering None of the visited BIs has a proper fine-tuned professional business business acceleration process, which support services, and the third-stage now is a standard approach in many incubators becoming the very well foreign BIs. This constrains their connected hubs in regional, national abilities to aimed at the acceleration

88 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

of the business development so that ment, and the regional government economy on the regional and national business ventures can grow rapidly bodies as well. levels. This also seems to be a perfect and scale internationally to be ready to timing for the development of national leave the BI in 3 to 5 years. policies and programmes for the Put simply, the new business utilization of the potential for econom- All the above indicate that this assess- venture undergoes changes ic development rooted in the BIs and ment process, and the subsequent in its development and its the capitalization on the nationally support that can be provided for the needs for support changes relevant BI support and advancement BIs is very timely. It is understandable depending on the business mechanisms, based on the emerging that most of the BI-type initiatives in development stage the new use of smart specialisation tools and Serbia had been designed and estab- start-up is in; thus, the new approaches that will be guided by the lished based on the prevalent financial company is supposed to new strategy. opportunities/ donor schemes at the move from one business given time. It is also a positive fact support institution on to 7.1.2 BI sector as an element that because of the opportunistic another as it grows. of the National Innovation behaviour of some regional govern- System ment bodies and/or BI managers, the BI satellite organizations have been It is clearly felt in the Serbian con- established as well. This is the main The fresh/ fledgling company would text that the BIs are elements of reason behind the variety of BI-type typically start with an open-space type an overall - national and even glob- business support initiatives that of arrangement and it would need al - entrepreneurship and business have emerged like start-up spaces, mentoring and coaching, once its busi- support eco-system. They are the open-spaces, business incubators, ness model is proven with minimum means, not the ends in themselves, technology parks, science parks, etc. viable product (MVP) being sold to which means that the efficiency of Very often in one specific vicinity one first customers, it should then move their operation and contribution to the can find start-up spaces, co-working into a business incubator where its economic prosperity of the country is spaces, business incubators, dedicat- growth needs to be accelerated with dependent upon the efficiency in the ed/ specialized business incubators, the business management accelera- functioning of the whole business and technology parks, etc. Even though tion programme and specialized con- entrepreneurship support eco-system. on the surface they all talk about sulting, then the company could move This is made up of multiple political, supporting business establishment, into the science/ technology park with legal, institutional and organizational business development, provision of specific infrastructure for production, elements “glued up” by visionary and business services, working-space/ logistics, etc., and if the company value-driven aspirations of the nation. office rental and the like, in essence grows on an international scale as those institutions should be designed is in need of production facilities, it The National Innovation (eco)System differently, and marketed with specific may move into an industrial park or a is a strategic concept encompass- focus, to provide different business district. ing the subsystems of knowledge support means at different stages of a creation, knowledge dissemination/ business development. transfer and knowledge application. One way or the other, the present The BIs and other forms of business All of these pre-incubation, incubation, BIs in Serbia will sooner or later support institutions belong in the and post-incubation institutions are move into the similar business subsystem of knowledge dissemi- needed for a sound business and support eco-system, which at nation and transfer. Thus, for them entrepreneurship support eco-system present is not functioning to its to be functional, the subsystems of to function on an institutional level, full potential. knowledge creation on the one hand, as each of them is meant to fulfil a and the need for the knowledge in very specific role in the business and the market on the other hand have to entrepreneurship development path. The whole sector of the BIs, thus, is be prevalent. The deficiencies of the Yet the specificity of how those insti- at a stage where with some timely knowledge creation subsystem and tutions are interlinked in the creation and relevant interventions into the the insufficiently expressed need to of a smooth business support value business support eco-system on the apply knowledge in the market are chain remains misunderstood in many macro- (national), mezzo- (municipal) clearly felt as large parts of a rationale cases and thus not being used to its and micro- (institutional) levels, the for the existence of the technology full potential by both, the BI manage- BIs could aspire to render more tan- based BIs. However, at present this gible inputs into the development of system is not working as effectively

89 7 | BI Roadmaps and Identified Suggestions for Upgrading BIs

as it might. Simply put, if there is little In this respect, if the BIs located in dif- 7.1.3 Role of the regional/ advancement of the science, scientific ferent regions of Serbia are struggling municipal governments in research and motivation to apply sci- with some common problems (that the development of the BI entific knowledge on the one side, and have been identified during the peer sector little need to solve business problems review sessions), the primary focus in the markets when applying scien- for investigation should be the under- One more important element of tific knowledge on the other side, the lying conditions of the NIS, or broadly the whole BI efficiency scene is the technology-based BIs find it difficult speaking, the national business and involvement of the regional and mu- to attract technology-minded tenants. entrepreneurship support eco-system, nicipal governments as key stakehold- That is mainly the reason behind local the macro-level conditions. The mac- ers and beneficiaries of the business technology-based BIs housing the ro-conditions are, namely, the legal incubation activities. The involvement tenant companies that can hardly be framework for the establishment and of key stakeholders, especially those called technology-driven. the running of the BIs, the frameworks representing regional and municipal of financial support for the BIs and the governance bodies, in the activities of The National Innovation System (NIS) companies located in the BIs, the laws the BIs as experienced during the peer is policy driven with an aim of achiev- on taxes and the laws on entrepre- review sessions was disappointing. ing advancements in national compet- neurship (or the law on companies) itiveness on a global scale. The main and bankruptcy which are indicative political tools used in the design of of the ease of establishing and run- One of the core problems the NIS are macroeconomic, legal-ad- ning businesses as well as the risks identified was the lack of ministrative, market demand enhance- involved in being an entrepreneur, the understanding of the role the BIs ment, ICT infrastructure development, efficiency of the functioning of the could play in the promotion of cultural/ value-oriented and related to innovation development, scientific business and entrepreneurship the whole educational/ science sys- research and technology sub-system, in the municipalities and the tem. The BIs can have multiple roles the national policies in the areas of un- regions. and inputs into the design and the employment and social inclusiveness, functioning of the NIS. For example, to name but a few. the BI can enhance both, the science Despite the fact that regional, or even spin-offs from the universities and the more often, the municipal govern- creation of the market demand for Thus, the acceleration of ments are the sole founders of the BIs higher-value-added business solu- the development of the (co-working spaces, technology parks, tions through, for example, financial BIs primarily rests with the etc.), their involvement in the running schemes that would be directed acceleration of the tenant of the BIs they co-founded and in sup- towards supporting the companies start-up companies, which porting their activities are at very dif- willing to operate on a relevant level of in turn is an outcome of the ferent levels. In rather few cases were technology. sound NIS policy. In order the the municipal bodies represented whole of the business and properly at the peer-review sessions. entrepreneurship support Their participation on the manage- Needless to say, this would system functions efficiently, ment boards and in the management be possible only with the the underlying national decision-making processes of the BIs involvement of the national and conditions, the regional were poorly documented, the regional/ local governments. The smooth government involvement, and town development strategies with the functioning of the NIS as a the managerial capabilities of roles for the BIs in them were outdat- whole has not been observed the top management at the ed, the financial support towards the in the cases studied within the BIs have to be fine-tuned and running of the incubators was sporad- framework of the current project. well-orchestrated. ic, and the key performance indicators (KPIs) for the activities of the incubators are rarely set and monitored.

90 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

BI Novi Sad

All of those elements are indicative of It has been a common complaint from entrepreneurship a “cool” activity. On the fact that the BIs are rarely seen by the BI managers during the peer-re- the other hand, the BIs need to be out- local governments as viable tools for view sessions that the entrepreneurial going, that is, more active in society regional (national) economic devel- spirit in Serbia is rather low and this by promoting business incubation opment. Whether technology-based is one of the key reasons why many services at schools, universities, com- or self-employment-based, the BIs incubators are struggling to attract munities, etc. Entrepreneurial risk-tak- should be instruments in achieving some startup tenants (the occupancy ing culture takes time to be developed relevant socio-economic goals in the rates at most incubators is very low). and the BIs can play an essential role regional contexts in which they are Generally, BIs are considered to be in this. embedded. essential in low entrepreneurial cultures as they can boost the wish of an individual to try out an entrepreneurial It would be beneficial for The lack, therefore, of route, though such incentivizing needs the municipal/ regional clearly stated visions and additional efforts and promotion from governments to rethink goals aimed at solving the the BI managers. the role the BIs could specific regional problems play in the design and and the lack of participatory On the one hand, the BIs need to be the implementation of involvement in the discussion active in business enhancement ac- the regional/ municipal of those problems at the peer tivities (like hackathons, boot-camps, development strategies. review sessions in some business success and failure events, instances is indicative of the public presentations of business insufficient understanding stories and cases, etc.) and thus make and interest in using the BIs as viable tools in regional business and entrepreneurship encouragement.

91 7 | BI Roadmaps and Identified Suggestions for Upgrading BIs

7.1.4 BI management Separate analysis would need to be zz The development of a sound, competencies undertaken to be able to indicate well-structured portfolio of services specific gaps in the competencies of for the promotion of tenant busi- As the major part of the underlying the BI managers, but based on the nesses; business and entrepreneurship sup- data collected during the peer-review port eco-system elements are equally sessions, the management of the zz The ability to provide dedicated applicable in all regions of the country, technology-based incubators should mentoring and coaching services and the specific regional regulatory give more attention to the develop- to the tenants (this is extremely sub-systems are not very different at ment of the competencies in: important for the self-employed large, the major difference in the suc- entrepreneurs); cess of the BIs visited rests with the zz The creation of a system of at- involvement of the key stake-holders tracting serious high-tech com- zz The skills in the design of the in the activities of the incubators and panies (includes the involvement programmes for social inclusion the differences in the BI management of Universities, scientific research of minorities and the underrepre- capabilities. As some of the visited BIs institutions and private company sented; have proved, the managers of the BIs labs); can do a lot despite the unfavourable zz The skills in entrepreneurial underlying conditions and uninvolved zz The design and the facilitation of community building (including stakeholders. provision of a well-structured busi- PR, networking and social events’ ness incubation system including promotion). Given the underlying innovation/ pre-incubation, incubation, and business preconditions of the whole post-incubation services; It was often observed during the national business and entrepreneur- peer-review visits that the managers ship eco-system, and besides the non/ zz The development of structured of the BIs expected the municipal or active involvement of the regional and programmes of business incuba- regional governments to show more municipal beneficiaries, as discussed tion and acceleration instead of support , whilst they themselves were above, the third factor of core impor- the provision of sporadic training less prone to take some pro-active tance in the efficient functioning of the seminars; measures in either enhancing the local BIs is the management capabilities in governments to contribute, or in the running the BI activities. Simply put, zz The recognition of the needs for, search of alternative financial and the managerial competencies of the and the attraction of suppliers of other types of support from alternative BI directors and/ or managers need to specialized services (IRP, IPO, CRM, sources than the local government. be stronger. R&D, Lean, Design Thinking, MVP development, etc.), which can only The management of the BI is a sep- be possible through co-operation The bottom–up rather than arate issue in itself. The peer review with the service providers from the the top-down approach process indicated two predominant private sector. in solving the urgent BI types of BI top managers: the political- management issues should ly engaged bureaucratic nominative or As far as employment-based BI man- also be enhanced among part-time multitasker. The first type of agers are regarded, the competencies the managers of the BIs. a manager lacks deeper knowledge of that could be improved are: The latter suggestion is incubation processes and incubation also closely linked to the (or business) management compe- zz The overall managerial skills to responsibilities and the tencies, whilst the latter lacks focus, improve management capacity, accountability of the BI devotion and involvement which is as most of the BI managers come managers and the KPIs necessary to make the BI progress from the public sector organiza- applied in the evaluation of along all activity lines with a bigger tions; the BIs success. pro-active power.

92 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

Even though most of the BI manag- solutions and the absorption of the to huge unemployment related to the ers expressed the need for the BI to markets). So far, most of the peer-re- close down of a regionally significant employ more people (for example, to viewed BIs intend to specialize in the industrial companies, thus making provide the needed services for the support to “IT-based business” without redundant huge numbers of special- tenants, to write project proposals for even having the relevant infrastruc- ized and/or skilled labour force, for national and international donor pro- ture (like the fast internet, dedicated example. grammes, to manage some activities server capacities, and the like). A more (mostly marketing-type) for the BI, advanced technology-based BI would The discussion of what is best, the etc.), the BIs should remain flexible need to be specialized as it would versatile, or the specialized incubator, in how they are staffed and how consider providing its tenants the should be supported with regionally they obtain the specialized services, needed infrastructure like specialized relevant data, as business support in- thus the development of networks of laboratories, testing devices, prototyp- stitutions like BIs are primarily meant specialized service providers might ing facilities and the like, depending to be embedded in regional contexts, frequently be a better solution to full- on the technologies the BI would that is, they are primarily supposed to time staffing of the BI. specialize in. take part in solving regional problems. On the other hand, specialized 7.1.5 Technology- vs. services- The technology-based BIs should incubators provide additional value to based BIs have close links with the university or the tenants by allowing the coopeti- universities which has been the case tion effect (co-operation and compe- The peer review process did not indi- in the peer-reviewed incubators, yet tition taking place simultaneously) to cate significant differences between the profile of the incubated business- take its full effect. Coopetition can the technology-based and the employ- es was not always indicative of the stimulate the development of higher ment-based BIs. Some technology-ori- specific scientific achievements of the value-added innovative businesses ented BIs are only starting to move university they were affiliated with. A and products. along the chosen path, but both the true relationship would signal of the understanding of the specificity of the specific know-how developed at the Ideally, if the technology-based BIs are technology-based BIs, as well the lack university and commercialized in the primarily intended for the commer- of the needed competencies in the BI as a spin-off. cialization of scientific know-how and provision of professional services, and development of solutions to market a lack of national financial support On the other hand, the self-employ- problems by applying advanced schemes are constraining a more ment BIs generally lack needed and technologies, the self-employment rapid development. dedicated support from local gov- or employment-based BIs should be ernments, the skills in mentoring and intended to solve the regional, and Also, the profile of the tenants at the coaching of the tenants, and most thus specific, employment challenges. technology based BIs shows that the importantly, the energy needed to in- For this to work, the regional/ munici- question of technological potential in voke the vibrant entrepreneurial spirit pal bodies should be actively involved local universities, science/ research and active networking in the commu- in the analysis of the specific regional laboratories and private R&D com- nities that are dealing with serious and economic, industrial, business and panies still needs to be examined. long-standing macro-economic and cultural preconditions and challenges As mentioned above, the technolo- cultural challenges. In some advanced and should develop strategies for the gy-based BIs cannot be analysed with- instances the employment based BIs interference. Through this the BIs can out the overall NIS context, as the BIs would also benefit from specialization, become the instruments and tools in are mostly the mediators between the as it is needed to provide physical dealing with the specific (un)employ- sub-systems of knowledge creation support like shops, labs, warehousing, ment challenges in the town or the (universities, research labs, scientific infrastructure, etc. The specialized region. Most peer-review sessions achievements in the country, etc.) and employment BIs would be mostly did not show currently existing close knowledge application (businesses in needed in the regions suffering from co-operation of the local governments the need of advanced-level problem systemic challenges like those, related and the BIs.

93 7 | BI Roadmaps and Identified Suggestions for Upgrading BIs

7.1.6 Leveraging the and entrepreneurship to flourish, there thus the basis of a sound business asymmetries in financial should be an understanding that some incubation process. risk taking public money for investment should be available. 7.1.7 Balancing the private and Most of the BI managers of the more the public advanced incubators point at the lack of financial support for the develop- The importance of the State in The peer-review sessions have ment of the tenant companies, and funding innovation and start- showed the mixed understanding and this issue indicates the important ups in general is indisputable. inconsistent attitude towards the use asymmetry in financial risk taking Transparent policy on what of private-public co-operation poten- between the State (with public money) are the national priorities in tial. The private initiatives and actors and the private entrepreneurs. start-up business support and in the BI sector are valuable additions how subsidies and government to the overall eco-system of the busi- Besides the factors like reluctance investments need be allocated ness and entrepreneurship support, to be an entrepreneur, legal hurdles is very important. Financial and they help filling in gaps in the in establishing and closing down schemes to support the growth system, yet their short-term goals and business, and the like, the next most of the problem-solving start-up quick financial exit schemes should important factor in business start-up business should be offered by not be relied on as efficient ways of, enhancement is the understanding the State. for example, financing the start-ups that business development needs to with some growth potential. be supported with investment. If all the financial risks associated with As mention above, the NIS is impor- On the other hand, the efficiency of business establishment, running and tant as an underlying system for the the private sector in the provision of growth rest with the entrepreneur/ the development of new businesses, services in the areas of specialized founder and the public (State-owned) especially in the technology areas, training, mentoring, coaching and money is not involved, we have an but it is not sufficient to have the business networking is important, asymmetry in financial risk taking. components of the NIS. What is more yet the contents, the outcomes of One of the key roles the BI could take important, is how those components such cooperation as well as the ways is to leverage this asymmetry with the interact between themselves (how of making it work need to be further use of the public money, thus making knowledge creation institutions “feed” addressed. business enterprising a less risky the knowledge dissemination/ transfer undertaking. institutions, and those in turn, supply the knowledge application-greedy The private money available in the business markets). It should be forms of venture capital, angel funds emphasized that the availability of and the like does not solve this public money (through different busi- asymmetry effectively as they provide ness support schemes) in all of the “quick money” aimed at quick and interactions within the NIS elements profitable payback. In order for inno- is always a very big motivator and vation, technology commercialization energizer of the knowledge flows and

94 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

igure 1 erge re r r Fie regi eee egrie

3,31 3,20 00 00 goaoriente3,31 eaersip 00 goaoriente eaersip 00 200 3,35 3,50 2,81 2,51 200 100 Strategic aignent Business 2,81eeopent 3,35 000 100 Strategic Business aignent eeopent 000 2,56 2,45

e rigt partners an resources 3,00 2,33 2,56 igperforing tea

e rigt partners 3,00 an resources igperforing tea

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Figure 35. Average Scores for BIs Across Five Strategic Development Criteria

Figure 35. Average Scores for BIs Across Five Strategic Development Criteria95 7 | BI Roadmaps and Identified Suggestions for Upgrading BIs

A better representation of private tion process can be seen as a valuable the so needed lobbying, but it would sector stakeholders on the BI boards contribution to meeting needs of the also facilitate learning and would and more tangible involvement of a professional BI managers. strengthen the potential of Serbian BIs wider stake-holder spectrum in the in international projects aimed at BI decision-making processes at the BIs Some of the peer-reviewed incubators sector development. would improve the BI management were co-operating with nearby or relat- and would align the BIs with the mar- ed BI initiatives, though this could be 7.2 Ideas for Improving ket/ regional needs undoubtedly. enhanced through regional business Business Incubator support clusters linked to the local Effectiveness and ecosystems, that would allow more Though such involvement efficient distribution of public money Efficiency is, primarily, related to the in the support of regional and inter-re- Whilst the Roadmaps that were de- legal regulation of BIs. The gional co-operation. veloped jointly are not included in this variety of legal forms of the aggregated report, to protect privacy BIs (from private, to public, None of the peer reviewed BIs was of information provided, we have to associations) is indicative housing a foreign capital start-up, and summarized some of the specific key of the need for the revision none was involved in an international recommendations for BI development of the legal framing of the exchange or development programmes that were developed and discussed BIs’ activities as in some with any of the foreign counterparts jointly with the 20 BIs taking part in cases besides management (the short-term visits to foreign BIs are the Peer Assessment process. inefficiencies this translates not considered an involvement in the into the inability of the BIs international networks). The further It should be noted that these are ag- to apply for funding of some internationalization, via inclusion in gregates across all BIs, and individual donor programmes. international networks of BIs and BI BIs will need to develop their own programmes, should therefore be seri- service portfolio based on the specific ously considered. recommendations of Roadmaps that were jointly developed with the 7.1.8 BI networking and project experts. The BI performance clustering Being a part of an international assessment method that the project network would not only facilitate has developed also permit any addi- Despite some weakness at the level the exchange of experience and tional new business incubators not of underlying national preconditions know-how in the BI management, yet included to also benchmark their in the overall business and entrepre- but would also boost the performance against the indicators neurship support eco-system, the motivation of local start-ups. we have presented, and use a simple managers of the present BIs can also questionnaire to identify key areas achieve a lot by using their energy and for further development. This also creativity. The peer review process The peer review process showed provides a basis for measuring perfor- identified some good potential in the the value in exchange of ideas and mance over time. advancement of the national BI sector experiences among peers and the among the BI managers, and the need need to co-operate and discuss urgent Through the Peer Reviews, and the to engage in the peer-review type of problems in the BI management field Roadmaps that were produced, activities on a regular basis was also among peers, thus the initiative should we can identify an average current expressed. The peer-review process be continued by some BI networking development profile of business also indicated the value of critical and lobby institution, like the National incubators in five key areas: goal-ori- engagement in the BI evaluation and Association of Science Parks and ented leadership; strategic alignment; proved that peers could provide valu- Business Incubators. An institution high performing teams; appropriate able insights, whilst learning from the like that could not only promote the BI resources and partners; and business process themselves. The peer-evalua- sector on a national level and provide development.

96 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

For HT BIs, the average score out of ing partnerships and resources; and These ideas can form the basis a maximum of 4 for each dimension upgrading business development for further detailed discussion and is shown below. This indicates a need support services. planning with individual business for further focus on all areas, with incubators, through the support that specific focus on strengthening part- Identifying what needs to be im- will be delivered by the EUBID project. nerships and resources, and upgrad- proved is important, but is only a Different business incubators will ing business development support starting point. To further encourage need to implement different solutions. services. discussion and planning of specific The important point is to recognise improvements that can be implement- what solutions will work best for The profile for SE BIs is slightly differ- ed through the support of the EUBID each business incubator. The ideas ent, with lower scores on four out of project, we summarise here most proposed can help to develop realistic five of the dimensions. The three main interesting and useful suggestions for ambitions for further development of areas for SE BIs to concentrate on BI improvements made by the busi- business incubators. are: strengthening the team; improv- ness incubators into 10 groups:

Develop clear vision, measura- Increase visibility on a Build mentor networks that ble goals and Key performance local and national levels and can improve the quality of Indicators (KPIs) together with promote BI achievements the services and allow for the 1 founders and other stakehold- and successes more widely, 8 provision of more state-of- ers. publicising services and ben- the-art training programs. efits offered to startups and 5 potential startups by upgrading websites, better use of Position BIs as catalysts of social media campaigns, use Make BI premises available entrepreneurial culture devel- of newsletters, and posting for longer than currently 2 opment in the region. videos and stories of success with a series of non-stop cases etc. events that promote visibility 9 through more/ new programs, Establish mechanisms for events, and encourage a better coordination and sup- „lively is attractive“ approach Improve processes of port with other BI initiatives in towards young, wouldbe 3 measuring levels of client Serbia. entrepreneurs. satisfaction as the basis for 6 market research to identify improvements and new ser- Develop business structured vice offerings. Become the most impor- incubation programmes tant hub for accessing all to help companies grow, possible business support and focus on improving the 10 initiatives in the region. conversion rate of start-ups Focus on developing deep 4 into incubated companies partnerships and closer and helping companies to 7 cooperation with a limited grow rather than on providing number of the best BIs in the premises. world.

97 8 Conclusions and Recommendations for Further Improvement at the Level of the BIs Ecosystem in the Republic of Serbia

The chapter summarizes 8.1 Main Conclusions the observations by project technical assistance team, national and international The number of operational busi- (from co-working and proper- experts from the Study results ness incubator initiatives has ty-based to adding high-value into overall main conclusions, increased in the past few years to services); recommendations for 40 in 2019, from only 5 in 2006; More intensive awareness raising policy makers and business The role of business incubators actions are required to address a incubators as well as as viable tools in the promotion of lack of understanding of the role proposals for service portfolio business, innovation and entre- the BIs could play in the promotion development. preneurship is not yet adequately of business and entrepreneur- recognized, visible and supported ship in the municipalities and the on national, regional and local level; regions;

There is insufficient cooperation Government support programmes between relevant local and national are required to increase interest stakeholders, and a need for both in using the BIs as viable tools in national and local governments regional business and entrepre- to work actively with business neurship encouragement; incubators; Effective performance manage- Business incubators need to ment and monitoring system on the improve and standardise services level of individual BIs and the level they provide to clients and tenants of BI ecosystem is needed in order and develop capacities of manage- to provide continuous improvement ment and staff in order to move to of BI operations. the next phase of BI development

98 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

8.2 Core Recommendations

8.2.1 Recommendations for Developing managerial skills to Development or upgrading of a Policy Makers improve management capacity and structured incubation programme improving staff competencies in or- with the portfolio of services pro- der to provide relevant BI services; posed in section 6.5.2 and which Municipal/regional govern- is based on what SE BIs provide as ments should rethink the Creating improved technology well as what clients and tenants role the BIs could play in the transfer systems for attracting have identified as needing further design and the implementa- 1 serious high-tech companies (in- improvement; tion of the regional/munici- cluding involvement of Universities, pal development strategies; scientific research institutions and Greater focus on improving man- private company labs); agerial skills to improve management capacity, since most of the BI National Government Delivering services covering all managers come from public sector should examine feasibility stages of business incubation organizations as well as improving of introducing a national process, including pre-incubation, staff competencies in order to 2 programme for business incubation, and post-incubation provide relevant BI services; incubator support services; Upgrading mentoring and coaching Developing networks of external services to the tenants (this is ex- suppliers of specialized services tremely important for the self-em- Positioning of BIs within the (IRP, IPO, CRM, R&D, Lean, Design ployed entrepreneurs); wider ecosystem should Thinking, MVP development, etc.) 3 take place within the context which can only be possible through Positioning of SE BIs focus within of the new smart specialisa- co-operation with the service pro- the context of support for social tion strategy. viders from the private sector; inclusion (women, youth, unemployed, minorities); Strengthening linkages with nation- 8.2.2 Recommendations for High-Tech Business al and international business incu- Upgrading skills in entrepreneurial Incubators bators and networks to facilitate promotion in local communities the exchange of experience and among women, youth, unemployed, Management of the technology-based know-how in BI management; minorities ; incubators should give more attention to the development of the competen- Putting in place proper perfor- Strengthening linkages with nation- cies in: mance management and monitor- al and international business incu- Designing and developing the ing system to effectively monitor bators and networks to facilitate structured incubation programme performance and identify areas for the exchange of experience and with the portfolio of services pro- improvement. know-how in BI management; posed in section 6.5.1. and which is based on what HT BIs provide Putting in place proper perfor- as well as what clients and tenants 8.2.3 Recommendations mance management and monitor- have identified as needing further for Self-Employment ing system to effectively monitor improvement; Business Incubators performance and identify areas for improvement. Upgrading of the service portfolio For self-employment BIs, improve- to pay much greater attention to ments in skills, competencies and the needs of startups headed to- ability to effectively deliver services wards growth, scale-up and exit; should be made through:

99 9 Toolkits and Roadmaps

In addition to the Study, four stand- The fourth component has a restricted Toolkit 1 alone components have been devel- audience, and is available in electronic oped in order to support daily oper- form only. This is the set of Roadmaps Methodology for ations of BIs. Three of these provide for the twenty business incubators establishing and toolkits for the business incubators, that participated in the peer review improving the process of covering the following areas: process. selection of BIs tenants

Toolkit 1: Methodology for estab- A brief summary of the components is This toolkit presents a strategic and lishing and improving the process provided below. well-structured approach to develop of selection of BIs tenants; and implement a Tenant Selection Process. Toolkit 2: Methodology for measuring effectiveness and efficiency of The Toolkit provides guidance on: BIs in Serbia; and Main factors that need to be as- Toolkit 3: Methodology for carrying sessed to ensure relevance and fit out Peer Reviews of BIs between the candidate to become a BI tenant, and the focus and services of the business incubator;

Guideline questions to assess: a) the business idea; b) the entrepreneur and/or management team proposing the idea; and c) motivation of the entrepreneur to benefit from the services of the business incubator;

Key stages in an effective selection process;

How to implement a systematic selection process; and

Key differences in selection between high-tech and self-employment business incubators.

100 STUDY ON THE CURRENT SITUATION OF BIS IN THE REPUBLIC OF SERBIA

Toolkit 2 Toolkit 3 Roadmaps

Methodology for Methodology for carrying The audience for these is restricted. measuring effectiveness out Peer Reviews of BIs The full set is distributed in confidence and efficiency of BIs in to the Ministry of Economy, whilst Serbia This toolkit provides a user guide the individual Roadmaps have been describing how to conduct Peer distributed to the business incubator This Toolkit provides Serbian business Review assessment process of BIs. that took part. incubator managers with the main Peer review methods are deployed to methods and tools needed to develop maintain standards of quality, improve an effective performance manage- performance and provide credibil- ment system. ity. The toolkit outlines objectives and main benefits of the process as This Toolkit should help the business well as who are the participants and incubator management team: what are their roles in the process. It explains how the Peer Review process Understand the purpose and added can be used to: value of using systems for effective monitoring and evaluation of the Increase and improve the manage- performance of the incubator; ment capacity;

Identify and define the most appro- Contribute to interconnected organ- priate set of relevant and measura- isations with strengthened perfor- ble performance indicators; mance, leading to more optimal utilization of resources; Develop practical methods for monitoring and evaluating business Develop a more even and profes- incubator performance; sional level of operation that will enhance the ability to manage Determine the best ways to collect infrastructure efficiently and to data needed to put in place an deliver results; effective system for performance monitoring; and Contribute to improvement of governance structures and organisa- Understand how to use the data tional set-up; and collected through monitoring and evaluation (M&E) activities, as part Improve networking of BI initia- of a management information sys- tives. tem for improving the operations of the business incubator.

101 IMPRESSUM

Publisher: GFA Consulting Group GmbH, Belgrade

Editor of the publication: Tamara Seferović

Authors: Karl-Heinz Jach Tomas Černevičius Stephen Batstone Prof. Vesna Mandić Mila Marinković Inga Uus Miloš Kovačević

Year of publishing: 2020

Graphic preparation, design and printing: MaxNova d.o.o. Belgrade

Circulation: 10

CIP - Каталогизација у публикацији Народна библиотека Србије, Београд 334.7.027(497.11)(0.034.2) 334.752(497.11)(0.034.2) 334.758(497.11)(0.034.2) STUDY on the current situation of BIs in the Republic of Serbia [Elektronski izvor] / [authors Karl-Heinz Jach ... [et al.]. - Belgrade : GFA Consulting Group GmbH, 2020 (Belgrade : Maxnova). - 1 elektronski optički disk (CD-ROM) : tekst, slika ; 12 cm Izv. stv. nasl.: Studija o trenutnom stanju poslovnih inkubatora u Republici Srbiji. - Tiraž 10. - Napomene i bibliografske reference uz tekst. ISBN 978-86-902360-1-5 1. Jach, Karl-Heinz, 1952- [аутор] а) Пословни инкубатори -- Србија COBISS.SR-ID 18646537

EUBID European Union Support for Business Incubators Development

ISBN-978-86-902360-1-5