reaching for THE FUTURE
Report to the Community of the Inner Goriška Region 2013
January, 2013
Kristjan Dekleva, Matjaž Dolenc, Katarina Jazbec, Niko Järnberg, Tjaša Markočič, Anja Perat, Uroš Sraj, Taja Špacapan Acknowledgements
We would like to thank all the members of the community who shared with us their opinions and aspirations about their communities. We would especially like to thank Simon Klaut, Head of the
Office of the Mayor of Nova Gorica, for assisting us in setting up our interviews. We would also like to thank Tanja Kožuh, Director of the Primorska Technology Park, for hosting our presentation on December 14. Finally, we would like to thank Marko Jaklič of the Faculty of Economics and Sheila Martin, Fulbright Scholar from Portland State University, for mentoring and guiding us. Table of Contents
2
IntroducTION Methodology and Data sources 3 Vision for Inner Goriška Region 6 Time frame 9 Strategy Goals 7 0
Regional aSSESSMENT 1 Overview 10 Strengths 17 Weaknesses 25 Opportunities 21
Challenges 28 Strategic Objectives and Programs 31 Creating Opportunity for Young Talent: Program descriptions 34 Support for High Potential Startups: Program Descriptions 44 Current business support facilities 45 Improving the region’s Visibility and Image: Program DescrIPTIONS 53 Increasing Tourism Income: Program DescrIPTIONS 56 Encouraging Regional CollaboraTION 61 Evaluation Plan: How will we know that the strategy worked? 62 Conclusions and Next Steps 65 BIBLIOGRAPHY 67 THE LIST OF INTERVIEWEES 69
1 Photo: Občina Šempeter-Vrtojba Photo: Leo Caharija Photo: www.rence.si Introduction
prosperousThe inner Goriška future. region is ripe with possibilities. With a beautiful natural environment, an educated population, a strategic location, and strong public infrastructure, the region has the potential for a
For the inner Goriška region we offer a vision of an inclusive and united six municipalities. This region includes proud local communities, connected to their local identities and promoting a high quality of life for their citizens. This is a vibrant, international region, blessed with many natural gifts: sunshine, good food, award winning wines and the talent that drives their technological progress. Entrepreneurs living here recognize the opportunities afforded by the abundance of these natural gifts. They are using them for creating new successful businesses and vibrant community spaces. We pursue these opportunities as a region while preserving the authenticity and diversity of our six communities. . The purpose of this report is to communicate a strategy for making this vision real. We developed this vision and strategy over the course of a 12-week review of the region’s core assets and opportunities The project group comprised eight students from Faculty of Economics in Ljubljana mentored by a professor from the Faculty of Economics and a visiting Professor from of Portland State University in the United States. This report is the final product of this effort. We hope that members of the community can use this information to further investigate and implement these ideas.
Photo: Smaragdna pot Photo: Občina Brda Photo: NSi 2 Methodology and Data sources
We used several sources of information in putting together this report:
• Demographic and economic statistics from the Statistical Office of the Republic of Slovenia; • Reports and plans that have been written for the region in the past; • opportunities.Interviews with key community leaders. We chose our 20 interviewees, listed in the appendix, based on their influence in the community and their knowledge of the community’s assets and
After gathering these data, we identified and discussed the region’s main opportunities, challenges, strengths and threats. This led us to a set of strategic objectives, programs to achieve each objective, and suggestions for implementing and evaluating each program. The five strategic objectives include:
• Create Opportunity for Young Talent, • Support high potential startups, • Increase thetourism Region’s Income, visibility, and • • Encourage regional collaboration. After developing our initial ideas, we presented them to all the interviewers and other guests. The Photo: Občina Nova Gorica presentation took place at Primorska Technology Park near Nova Gorica on December 14, 2012. There were 30 people present, who were also eager to discuss the future of the region and provided valuable input for this report.
We found that inner Goriška region has many significant advantages. It is an attractive area, with a stunning natural environment and indigenous and diverse cultures. But there is significant opportunity to develop this region, which consists Photo: Niko Järnberg of six municipalities, into a vibrant world region by promoting and building on inner Goriška’s creative, cultural and recreational experiences.
Because we had only 12 weeks to complete the study, we chose to focus on just a few strategies that we feel can have an immediate and longer term impact on the region. Surely, there are others we could have chosen, but we wanted to conduct a more thorough analysis of a few strategies. Photo: Občina Nova Gorica
3 Regional Definition
Throughout this profile, we refer the 6 municipalities as the Inner Goriška region. We have chosen to define the region as the previous Administrative Unit of Nova Gorica which included the six municipalities, highlighted in Figure 1, including:
• BKanal,rda • • Miren-Kostanjevica, • Nova Gorica, • Renče-Vogrsko, • Šempeter-Vrtojba. Figure 1: Map of the Inner Goriška region
4 Photo: Občina Brda
We chose this definition for following reasons: community. • The leaders and residents of the region perceive these six municipalities to be a cohesive regional
• Taken together, the communities represent a commute shed - a regional economy within which people travel to work, shop, and recreate. • municipalityThese economic within and it. social interactions provide the citizens of the region a shared interest in the future of the region as a whole and in the economic, environmental, and social health of each
Although we believe that this definition makes sense, it presented some practical problems for data gathering. Because the Statistical Office of the Republic of Slovenia defines the Statistical region as a larger region, many valuable statistics are only available for the larger area; we clearly identify tables and charts employing this definition of statistical region. In most cases, we have gathered data available for municipalities and made comparisons to the national and EU averages. For some important variables the data is simply unavailable. Also note that if the year of a given statistic is not specified it always refers to the year 2010.
5 Vision for Inner Goriška Region
VISION:
The Inner Goriška region is an international, vibrant, connected group of communities promoting a high quality of life for its citizens. Our future depends on the efforts of entrepreneurs who recognize the opportunities afforded by the abundance of our natural gifts: sunshine, good food, award winning wines and the talent that drives our technological progress. We pursue these opportunities as a region while preserving the authenticity and diversity of our six communities Photo: Google
Photo: Občina Brda
Below we are presenting goals which will help us to achieve the vision. These three goals are connected and mutually reinforcing as shown in Figure 2. Figure 2: Our Goals for the Inner Goriška Region.
6 Strategy Goals
Goal 1: Promote a high quality of life
Ask any ten people what a high quality of life is, and you’ll probably get ten different answers. But most people look for the same four attributes in their community: a clean, healthy and beautiful environment; opportunities to participate in cultural, civic, and recreational activities; opportunities to connect socially; and economic opportunity. Our first goal is to create a community that meets these aspirations for its residents.
talented people, they also attract companies that need Because communities with a high quality of life attract of life not only makes life easier and more pleasant for those people. This means that having a high quality
citizens, but it also can be a positive force for the business environment and can generate citizen’s commitment to the community’s future.
For Goriška region, community members identify several factors as important to their assessment of the quality of life. First, the region is blessed with a number of natural attractedassets that by make the warm it a pleasant and sunny place weather to live comparedand support to the food, wine, and tourism industries. Many people are deal of sports pleasure for those who are fans of water adrenalineothers parts sports. of Slovenia. On the other The Sočaside, Rmountainsiver offers and a goodhills Photo: Leo Caharija
someare welcoming romantic spot all theor historical hikers and remains. runners to discover secret paths and trails and with a little luck you can find
historicalCultural and sites. social Socialization assets are is important also very importantfor people to feel the regions citizens. The region is blessed with cultural and suchwelcome as youth and committedclubs, bars, to theaters their community. and cultural And centers, while there are a number of opportunities for social gathering many feel that this is one area where the region needs to improve, especially events and venues that attract youth communityfrom across commitment the entire region. from youth.This is especially important for the Inner Goriška region as it tries to cultivate
Photo: http://web.sc-celje.si
7 Any strategy for the region must keep in mind the importance of these quality of life assets and balance efforts to develop business against maintaining and improving these assets. The wine, food, and tourism industries depend on a clean environment to attract tourists and grow healthy food. Thus, the region must take special care of keeping the environment clean, healthy and safe, since nature and environment is important factor for people deciding where they will live, work, visit, or study. Goal 2: Create broadly shared economic opportunity
Creating broadly shared economic opportunities means that there are job opportunities for people with a variety of skills and the educational resources to gain the skills required. It also means that there are business opportunities for entrepreneurs with good ideas. We have identified three different factors that contribute to this goal:
• Improved educational opportunities to meet the need for technical and advanced skills; • Job opportunities with a broad range of educational requirements and wages; • A culture of entrepreneurship to encourage people to start businesses and to encourage investment in those businesses. Education is the key to economic prosperity. For most people, their ability to find a good job will depend on their level of skill obtained through education and experience. Skills are required at all levels: from farm workers to designers to computer programmers. We want our workforce to have the skills required to compete successfully for these jobs, improve productivity in business, and pay the Wewages want required to create to live an a rewardingeconomic life.place where all the people will be able to do some work. We need Photo: Občina Nova Gorica
employees in all economic segments, and we want to build an economy that provides an opportunity for everyone to achieve financial independence.
The third factor in creating broadly shared prosperity is a culture in which people are not afraid to start their own business, who are willing to make and learn from their mistakes, to go on the market, to make connections with other companies, and to compete on the global market. As the public sector in Slovenia shrinks, it becomes even more important to learn the skills and culture of business. The region of inner Goriška can excel at creating new businesses if the new culture and new set of skills is established, especially among young people.
8 Goal 3: Generate commitment to the future of the community
One of the most important factors determining a community’s prosperity is the commitment demonstrated by its members. Social capital, or the emotional bonds created among community bettermembers, future. is as important to a community’s prosperity and quality of life as its infrastructure and its businesses. People who are committed to their community will invest their time and talent in creating
This isn’t just conjecture; a recent study by the Knight Foundation found that communities with the greatest levels of community attachment were also those that had the greatest levels of economic growth (Knight Foundation, 2012). According to this study, the drivers for creating community attachment include community aesthetics, social offerings, and openness. Thus, there is a large intersection between community commitment and quality of life.
Members of the Inner Goriška community have demonstrated to us that they are committed to its future. We aim to strengthen that commitment to ensure that the social capital that already exists in this region grows along with its economic opportunities and its quality of life. Meeting this goal will bring benefits to all segments of the community and economy, including tourists, students, researchers, innovators, entrepreneurs and investors. As stated by Luka Manjolovič, if everyone gave back just a little, then the whole community would benefit and grow. (Manjolovič, 2013) Time frame
We formulated this strategy with a ten-year perspective. The Inner Goriška community needs to look beyond the current recession to examine longer term market trends and opportunities and position itself to take advantage of these. Some of the programs that implement the strategies can be accomplished in a shorter period of time. The pace of accomplishments depends on the community’s agreement, commitment, and investment. We expect the impacts to occur in both the short term and the longer term.
9 Regional Assessment
Despite many unifying factors, the region’s municipalities are in many ways distinctive. Many of these differences arise from the fact that there is a larger urban and industrial center surrounded by more rural areas. Most notable of these differences are related to economic activity. The following regional assessment attempts to determine the features of the region as a whole that form the basis of the strategy while also highlighting the distinctive features of each municipality. Overview
A basic set of data for the six municipalities is found in Table 1. In the municipalities Nova Gorica, Šempeter-Vrtojba, Renče-Vogrsko, Brda, Kanal and Miren-Kostanjevica there were 58,926 residents in the beginning of the year 2012. Figure 3 shows the distribution of population among the municipalities. About half of the population lives in Nova Gorica, making it the population center, while the other half is rather evenly divided between the remaining five.
Population trends for the region, shown in Table 1, are following the same overall trend as the rest of the country: decreasing birth rates and aging population. Still this effect is slightly stronger all around the region than in the whole country.
Photo: Občina Brda
10 Table 1: Basic demographic and economic statistics for the Inner Goriška region
Data for municipality for Miren- Nova Renče - Šempeter – Brda Kanal Region Slovenia year 2009 Kostanjevica Gorica Vogrsko Vrtojba
Area km2 72 147 63 280 30 15 607 20273 Population 5686 5823 4895 32039 4287 6367 59097 2042335 Men 2845 2903 2476 15850 2193 3209 29476 1011767 Women 2841 2920 2419 16189 2094 3158 29621 1030568 Natural increase -10 8 0 -24 -5 25 -6 3106
Total increase 52 -125 7 87 46 42 109 14614
Number of kindergartens 2 3 4 14 2 4 29 863
Number of children in 145 153 144 1083 83 280 1888 71124 kindergartens
Number of elementary 402 412 302 2368 252 572 4308 160252 school pupils
Number of secondary school pupils (by 227 226 174 1298 180 258 2363 8503 residence)
Number of students (by 331 326 307 1681 254 355 3254 114873 residence)
Number of persons in employment (by 2207 2315 2029 13750 1808 2735 24844 858171 residence)
Number of persons in 543 1058 1014 14716 1212 4514 23057 767373 paid employment
Number of self-employed 438 261 207 1466 181 290 2843 90798 persons Number of registered 127 184 175 1035 137 190 1848 86354 unemployed persons
Average monthly gross earnings per person in 1365 1534 1246 1547 1211 1415 1465 1438 paid employment (EUR)
Average monthly net earnings per person in 901 979 823 994 804 922 948 930 paid employment (EUR)
Number of enterprises 329 320 404 3326 330 732 5441 160931 Turnover of enterprises 50367 116099 94927 1189538 165756 343491 1960178 83060213 (1,000 EUR) Number of dwellings, 2503 2712 1958 13514 1565 2517 24769 838252 Dwelling Stock Number of passenger 3617 3324 3089 20578 1388 3934 35930 1058858 cars Municipal waste collected 2304 2443 2320 18358 1800 4597 31822 825747 (ton)
Source: SORS
11 Figure 3: Distribution of population among the 6 municipalities
Source: SORS Figure 4: Population trends for the Inner Goriška region
Source: SORS
The region also lags the nation in net in migration. Figure 5 shows that since the start of the economic crisis, migration has fallen steeply both in the region and in the country. However, the region is now experiencing negative net migration while the trend in the country is still positive. This paired with the natural demographic trends may have significant consequences for the region but this is discussed in more detail in the coming sections.
12 Figure 5: Net migration to the Inner Goriška region compared to Slovenia
Source: SORS The
region seems to have an equally clear center when it comes to economic activity. Most of the region’s jobs are located in Nova Gorica and Šempeter-Vrtojba, with high commuting levels between the municipalities, especially into the centers of economic activity. This is demonstrated by Figure 6. In this figure, negative numbers indicate commuting out while positive numbers indicate commuting in. Thus approximately 5000 people are commuting to work to either Nova Gorica or Šempeter-Vrtojba. Figure 6: Inward and outward commuting by municipality
Source: SORS
13 The region’s employment composition is shown in Figure 8. Municipalities have significant differences in industrial composition which is reflected in Figures 7, 9 and 10. The most prominent of these variations is Brda’s 40% share of people employed in agriculture. This results in Brda having a lower share of people working in industry. Interestingly, the share of people working in services is not very low especially when considering the rural nature of the municipality. This is readily explained by activity in tourism. Nova Gorica differs from the other municipalities in its high concentration on services, which is rather natural since it is the population and service center of thesethe region. two municipalities. The high share of industrial activity in Kanal and Miren – Kostanjevica, on the other hand, is due to the fact that some large employers in the region are based in
Figure 7: Employment by industrial sector for the Inner Goriška region
Source: SORS
14 Figure 8: Percent of people employed in services by municipality
Source: Calculated using approximation method from SORS data. Figure 9: Percent of people employed in agriculture by municipality
Source: SORS
15 Figure 10: Percent of people employed in industry by municipality
Source: SORS
Wages by activity vary across the municipalities, as shown in Table 2. One of the most interesting features is that Kanal, which has large share of population employed in industry, also has high monthly wage levels in manufacturing (950€) and construction, (1006€) compared both to the rest region and Slovenia (792€, 830€ respectively). On the negative side Kanal also has very low wages in food and accommodation services (509€). Another negative part is that Renče – Vogrsko has income levels below the Slovenian average in every single sector. Brda, however, has high income levels in accommodation & food (1076€), more than 300€ above the Slovenian average, which is not surprising given the presence of the wine and tourism industry in the municipality. Table 2: Monthly net wage by sector and municipality, 2011
Sector Kanal Municipality/ Miren - Nova Renče - Šempeter SLOVENIA Brda 950 Kostanjevica Gorica Vogrsko - Vrtojba Manufacturing 792 701 793 749 787 830
Construction 830 898 1006909 715 990849 644 841 Transportation & 954 865 509 778 921 865 storagefood Source: ASORSccommodation & 755 1076 885 866 611 736
Some sectors, most notably agriculture, are not covered in Table 2 because of incomplete data. Still it is worth mentioning that in 2011, Brda had an average income of 1073€ in agriculture, which is almost 200€ more than in rest of Slovenia.
16 Strengths
Natural assets and strategic location
Natural assets represent a key element in the attractiveness of a region. Factors such as topography, weather or the region’s location can greatly influence the development of basic infrastructure, attractiveness to human capital and the suitability for certain industries, like tourism.
The area is located on the western edge of Slovenia, along the border with Italy and close to the Austrian border and the Adriatic Sea. The region is geographically diverse, with most of the population residing in the central Vipava Valley, a wide and fertile area. The north of the region forms part of the narrower Soča Valley, while the northeastern and southern parts of the region are part of the Trnovski forest and Kras plateaus, respectively. The extreme west of the region is located in the Goriška Brda hills, an area especially suited for wine and fruit-growing. Photo: Občina Brda
The region is among the warmest in the country, with the average temperature in Bilje 2.9°C higher than in Ljubljana (1971-2000 average). The region also receives an above average amount of sun with 84 clear days per year, compared to 34 in Ljubljana and 40 in Maribor (2001-2010 average) and 2230 hours of sunshine per year (2001-2010 average).
The region’s location is also almost optimal to facilitate development, as demonstrated by Figure x. Short distances to major ports and airports enable efficient movement of goods and people. The effect is strengthened by the fact that region is well connected to the outside world by highways and rail. The Italy.vicinity of the border may bring also arbitrage and cooperation opportunities and has a very positive effect on the language competences of the people allowing them to find economic opportunities also in
Figure 11: Inner Goriška’s strategic location
Source: Google earth
17 Educational attainment
The region has a higher educational attainment rate than the nation as a whole, as demonstrated in Figure 12, 13, and 14. More than half of workforce (persons in employment and registered unemployed persons) in the six municipalities in 2011 had secondary school education (57,8%), 13,2% of workforce had finished only Elementary School and 29% of workforce had at least a university degree. Overall education levels are steadily rising as a larger share of population gains tertiary education and a lower share of the population has only elementary education. This is consistent with the general trend in education in Slovenia and indeed all over the world. Education levels in the region are well in line with the country as a whole albeit slightly higher. However, given the smaller share of young people in the region, who are Photo: Univerza v Ljubljani more likely to have finished higher education, the educational levels in the region stand out as being better than the national average. Figure 12: Educational attainment of workforce, 2005, Inner Goriška region.
Source: SORS Figure 13: Educational attainment of workforce, 2011, Inner Goriška region.
Source: SORS
18 Figure 14: Educational attainment of workforce 2011, Slovenia
Source: SORS High wages
The population-weighted average net monthly wage in the studied municipalities is higher than the average net wage in Slovenia (Table 3). This is largely due to a high wage level in Nova Gorica (1022,06€), since it is the region’s center of activity. The lowest wage on the other hand is in the relatively small municipality of Renče - Vogrsko. The difference between the highest and lowest average wages in the 6 municipalities is 149,64€. Another notable issue is that the region’s wage level is converging with the national average over a longer period of time. The reasons for this are complex but potential explanations are increased competition across the border from Italy, as well as the fact that the development level between Italy and Slovenia is narrowing and therefore leaving the border region in a less advantageous position than before. Table 3: Average monthly net wage
Year/ 2010 2011 2012 Area Slovenia
Six municipalities-average 966,63€ 987,34€ 988,18€
984,25€ 997,74€ 990,80€
Source: SORS
19 Robust labor market
The region’s labor market has historically been more robust than the nation’s, but the recession has brought the region an unemployment rate closer to the national average. Similarly to wage levels, the 6 municipalities have had an edge over the whole country when it comes to unemployment. In the year 2005, municipalities had an unemployment rate of 6.8% and compared to the 11% for the whole nation, leaving the difference over 3 percentage points. Since then unemployment has grown largely due to the recent recession. More importantly the municipalities’ unemployment rate is converging with the national average leaving the current difference at mere 0.6 percentage points. Figure 15: Unemployment rates in Inner Goriška region and Slovenia
Source: SORS 2009 Year/ Table 4: Enterprises per thousand people MunicipalityBrda 2008 592010 54 58 Source: SORS Kanal 55 53 57 High number of businesses Miren - Kostanjevica
80 83 84 the sheer number of enterprises per person, by about Nova Gorica The 6 municipalities are above of rest of the country in 102 104 104 Renče - Vogrsko It10. seems (Table that 4) Thisthe whole is attributable west side to of the the high country number is of enterprises in Nova Gorica and Šempeter –Vrtojba. 76 77 80 Šempeter - Vrtojba somewhat more entrepreneurial due to high number 107 115 116 of enterprises. Notable exceptions are Brda and Kanal, Regional Avg 90 which stick out from the rest of the wider region. 86 91 Slovenia
75 79 81 20 Opportunities
Tourism capacity still has opportunities to grow
Even though the area is somewhat known for its casino and wine tourism, the overnight capacity for the region, as shown in Table 5, is only 714 rooms and 1588 beds with over half of the total capacity in Nova Gorica. On a per capita basis (per 1000 inhabitants), the regional number, at about 39, is surprisingly lower than the Slovene average which is 58 (Figure 16). Table 5: Overnight capacity in the Inner Goriška region
Rooms Beds Nova Gorica 714 1588 Brda 158 420 Kanal 55 243 Miren - Kostanjevica 19 72 Renče - Vogrsko 47 95 Šempeter - Photo: Kamp Lijak Vrtojba 47 86 Region 1040 2504
Source: SORS Figure 16: Tourist beds per thousand inhabitants
Source: SORS 21 However, the total number of overnight stays for the region severely lags capacity and on a per capita basis it also lags the nation. Based on total overnight stays, we estimate the region is currently using only about 30 percent of its total capacity on an annual basis. Thus, the region could expand tourism a great deal without expanding capacity. tourismFurthermore, capacity. the global tourism market is growing and is projected to continue growing. Figure 17 shows the projected growth of this market. This is a big opportunity for the region particularly given its
Figure 17: International Tourist Arrivals
Source: UNWTO tourism highlights publication
Rising new university
The University of Nova Gorica is a young, internationally-oriented university based in the region. The amount of faculty employed at the university has more than doubled since 2006 and the amount of students has risen dramatically as well. Having an aspiring higher education institution represents a huge opportunity for the area. A number of the university’s research centers have potential for applications in local industry. The Wine Research Center, operating since November of 2008, offers an opportunity to transfer research and practical knowledge to the local wine industry.
22 education institution represents a huge opportunity for the area. A number of the university’s research centers have potential for applications in local industry. The Wine Research Center, operating since November of 2008, offers an opportunity to transfer research and practical knowledge to thelocal wine industry.
Figure R-16. Research and Education Units of the University of Nova Gorica Figure 18: Research and Education Units of the University of Nova Gorica
University of Nova Gorica
Education Research
School of School of Center for Laboratory for engineering and viticulture and atmospheric environmental management enology research research
Center for School of Laboratory of biomedical environmental School of arts organic matter sciences and sciences research engineering Center for Laboratory for School of sytems and Graduate school astroparticle humanities information physics technologies
Laboratory for School of applied Research center multiphase sciences for humanities processes
Materials Laboratory for research quantum optics laboratory
Wine Research Centre
Source: University of Nova Gorica
Global opportunities and regional potential overlap: A case study - HIGH TECH GRÜNDERFONDS
where we see the most potential for The case study is meant to shed light
businesses to grow in the future, and the areas on which the eventual regional VC fund and community encouragement should focus. 28 Photo: University of Nova Gorica
23 High-Tech Gründerfonds (http://www.high-tech-gruenderfonds.de/) is a German VC firm with HQ in Bonn, and its portfolio illustrates the potential areas that are believed to have a great future prospects.
The areas in which the fund invests in include:
• Automation and electronics • Cleantech • Enabling technologies • ICT • Life science • Nanotech • (High market-potential) consumer goods More specifically, they have lately invested in start-ups that deal with biotech, iPhone marketing applications, software development for robotized production, navigation system for productionrobotized surgery, of biomaterial online platformwith natural for designer furniture and home accessories,
andnanostructures, renewable etc. target online marketing, database development, pharmaceuticals
By looking at the list it is evident that there is a clear inclination towards any forms of biotech, mobile applications, general IT, cleantech, software solutions for high value-added production, e-commerce, healthcare improvements etc. VC firms seem reluctant to finance only manufacturing, unless it is highly value added product, with strong market potential.
Due to demographic change there is an increasing potential for healthcare improvements, biotech and high-tech solutions assisting healthcare.
Mobile app market, while already quite saturated, offers promising chances, as there is a clear trend of people shifting everyday activities from computers to smartphones.
Good general IT solutions are always a good idea, of course, if they are marketable. Niche solutions.software needs are especially a good thing to consider, since they do not involve a great deal of financing and, if sold correctly, can be very profitable. Same holds for specific e-commerce
Another trend manifesting itself is the rise of green energy solutions. Innovations in this field, especially if being marketable, are a great opportunity as fossil fuels are becoming scarce and energy independence policies are gaining ground. However, this field is connected with 24 substantial research cost, so we suggest that perhaps the University could offer the research equipment for a rental.
Videogames seem to be in an upward trend as well, with worldwide revenues rising quickly. It is forecasted that from 67 billion USD of revenues today the industry will grow to about 82 billion USD in 2017 (Guadiosi, 2012) corporationsAnother prospective seek to lower sector costs, is a third party administrator administration with software.economies Bofecause scale
(especially with appropriate https://tbe.taleo.net software with patent protection) can offer lower prices than the costs on corporate level would be. For instance, a good recent example is Taleo ( , Oracle Corporation) – service for outsourcing the search of potential employees, partially done by software. Companies can this way achieve major savings in traditional HR, due to the fact that Taleo, with economies of scale, operates efficiently. Weaknesses
Aging population
As shown in Figure 19 13,4% of the population in the region is 0-14 years old, 68% is 15-64 years old and 18,6% is 65 and more years old. Compared to Slovenia’s population, the region contains a higher percentage of citizens over 65 as well as a smaller percentage of people under 15. Furthermore this phenomenon is present in all municipalities. This is also reflected as a higher mean age in the municipalities. In general the more rural areas of Slovenia have an older population and attracting young people with economic and cultural opportunities is a challenge for all rural areas in Slovenia, not just the region in question.
25 Figure 19: Share of population over 65
Source: SORS
Investment levels are highly cyclical and lower than in the rest of the country
Investments in the region are highly cyclical with the economic crisis taking a large toll; the total amount of investment in the region has halved between 2007 and 2010, compared to a much smaller reduction in the entire country (Figure 20). This is on top of an already much smaller amount of investments per person in the region, almost reaching the national level in 2007, but since 2010 the level has fallen to almost half of the national level. Figures 21 and 22 show the cyclicality of the investments compared to the nation. They also show that, compared to Slovenia as a whole, the region has a lower share of investment in the allocated to new capacity. Since investment is an important driver of economic growth, the low current investment my lead to lower productivity in the future. Figure 20: Gross investment per person
Source: SORS 26 Figure 21: Investment by Purpose, Inner Goriška region
Source: SORS Figure 22: Investment by purpose, Slovenia
Source: SORS
27 Challenges
The region’s population is falling, in absolute terms and as a percentage of the nation’s population.
As highlighted in the overview, the region’s population has a slightly decreasing trend. On the other hand the population in Slovenia has been growing since the year 2004. In 2012 compared to 2004, the population grew by almost 3%. But in the six municipalities the population decreased by 0,7%. The population in the whole European Union is also growing, in 2012 compared to 2004, the population grew by 3,5%. The slow population growth is due to smaller net migration and lower birth rates compared to the nation. Brda is the only municipality to record more deaths than births. Region’s businesses remain small.
Despite having more enterprises per person than the rest of the country, the enterprise turnover per capita is not reflecting that. Table 6 and Figure 23 show that the 6 municipalities as a whole can hardly be distinguished from entire Slovenia. This data, coupled with the data on businesses per capita, indicates that companies in the region, although bigger in number, tend to stay smaller than their counterparts in the rest of the country when measured in the bases of turnover. Table 6: Enterprises per thousand people 2009
Year/ 2008 201059 Municipality Kanal 55 Brda 54 58 53 57 Miren - 80 83 84 Kostanjevica Nova Gorica 102 104 104 76 77 80 Renče - VogrskoVrtojba Šempeter - 107 115 116
Source: SORS
28 Figure 23: Enterprise turnover per capita (thousand Euro)
Source:SORS
Gap between company births and deaths is narrowing
Data for the statistical region in Figure 22 show that the difference between enterprise births and enterprise deaths is rapidly decreasing in the wider region, faster than in the entire country. As the number of net new firms falls, unemployment due to enterprise deaths is also increasing. In 2010, the number of jobs lost due to firm deaths was greater than the number of jobs gained due to new firm births and the rate of jobs lost due to deaths surpassed that of Slovenia. Reversing the trend in enterprise deaths, or increasing the size of existing firms is necessary for creating new job opportunities for the region’s residents. Figure 24: Enterprise birth and death rates
Source: SORS
29 Businesses are not finding the talent they need
During our interviews with local business leaders, some of them expressed a concern that the region lacks key talent. In light of the fact that the region is overall more educated than the rest of the country this seems somewhat surprising. This can be explained by the fact that education itself is a poor workforceindicator for competences true talent. Evenand the more needs importantly, of the this may be a sign of a poor fit between current Talent import on the other hand does not seem enterprises leading to a need to import talent.
to be happening since the region overall has a negative net migration. Fragmentation of support facilities Photo:twitter.com
As potential problem we see the fragmentation of support facilities in the area, specifically speaking about INPrime, and possibly also about the tech park in Gorizia. Although competition can be generally positive, we believe the fragmentation of support facilities can pose a problem, when competing for public tenders and private money, as well as with economies of scale when it comes to the business- and finance-related support services described below. At this point, the fragmentation of support facilities could have an adverse effect to encouraging efficiency as the lacking economies of scale prevail in the situation (many support facilities but all with mediocre services). We do not oppose INPrime institutionitself, we oppose that can only successfully the fragmentation support startups.and suggest the tech parks in the area merge under a common management, where it does not matter whose name it bears but rather the fact that there is only one
Although INPrime is privately owned, and, as we understand, to large extent intended to provide support and subsidies to 4 major companies´ research departments; should there be a serious attempt of establishing parallel support structures for start-ups in the region, PTP and its establishers should work closely with the management of INPrime and, if necessary, merge with it due to reasons described above.
30 Photo: Občina Brda Strategic Objectives and Programs
In the beginning of the paper we presented three broad goals that serve as the guiding direction for our strategy. But in order to actually achieve these end goals we needed to develop more actionable objectives that would, in the long run work towards the desired . end state. There evidently would be other possible instrumental goals that could be included in this strategy but in order to maintain sufficient focus we selected just few of them, as shown in Figure 25 Figure 25: Goals and strategic Objectives for the Inner Goriška Region
We selected these particular goals based on the broader regional assessment that is presented above and more importantly based on the interviews with local influencers and the feedback we received during our preliminary presentation. Each of these goals is further supported by program suggestions that are intended to work directly towards the goals and to provide loose implementation guidelines. The main themes of the programs and goals are supporting the entrepreneurship and talent creation along with tourism and regional promotion initiatives.
As shown in Figure 26, these strategic objectives support our broader goals; we have chosen specific programs for meeting each of these five objectives.
31 As shown in Figure y, these strategic objectives support our broader goals; we have chosen As shown in Figure y, these strategic objectives support our broader goals; we have chosen specific programs for meeting each of these five objectives. specific programs for meeting each of these five objectives.
Figure 26: Strategic Objectives and Programs Figure y: Strategic Objectives and Programs Figure y: Strategic Objectives and Programs 3. Improve the 1. Create Opportunity 2. Support High Potential 3. Improve the 4. Increase 1. Create Opportunity 2. Support High Potential Region's Visibility and 4. Increase for Young talent Startups Region's Visibility and for Young talent Startups Image Tourism Income Image Tourism Income Business Connect Industry Business Umbrella tourist Connect Industry Support Umbrella tourist Wine and Certificates Support Orgnanization Wine and Certificates Facilities Orgnanization tourism Facilities tourism Outsourcing Outsourcing Wine Tasting Internships of Business Common Tourism Website Wine Tasting Internships of Business Common Tourism Website Room Functions Room Functions
Startup Wine and Geek Nights Startup Wine and Geek Nights Funding Culinary tours Funding Culinary tours
RailsGirls Golf and Spa RailsGirls Golf and Spa Goriska Resort Goriska Resort
EntrepreneurEntrepreneur ImprovedImproved ship Dayship Day CycleCycle Paths Paths
DesignDesign ThinkingThinking
planningplanning for newfor new strategic strategic ini ini
5. Encourage5. Encourage Regional Regional Collaboration Collaboration Short Short term term efforts efforts for for young young talent talent Short Short and and longer longer term term efforts efforts for for tourism tourism promotion promotion Collaboration Collaboration in promotionin promotion of of startups startups Longer Longer term term planning planning for for new new strategic strategic initiatives initiatives
ObjectiveObjective1: Create1: Create opportunities opportunities for for younger younger talent talenttoto contribute to to the the region’s region’s success. success. ThereObjectiveThere are sevare 1: eralsev Ceral reatereasons reasons opportunities for for the the region region forto to focus focusyounger on on youngyoung talent talent. to contributeAnAn a agingging population population to the region’screates creates a needa need to keep to keep young young people people in inthe the region region and and there there isis no betterbetter wayway to to ensure ensure th isthisthanthanby by makingmakingsuccess. sure surtheye they are areengaged engaged in intheir their respective respective communities. communities. AnotherAnother key key issue issue ar isesarises from from the wordthe word talent. talent. It is It not is not enough enough to tocreatecreate and andretainretain educatededucated youngyoung people people, rather,, rather, we we must must developdevelop and and attract attract to tothe the region region the the talent talent that that can can drive innovationinnovation and andbecomebecomefuturefuture Thereleaders areleaders ofseveral successful of successfulreasonsbusinesses. forbusinesses. the regionTheThe tor egionfocusregion on also also young cannot cannot talent. flouri Anshsh aging without without population businesses. businesses. creates This This a need to callskeep calls foryoung stronger for peoplestronger entrepreneurial in entrepreneurial the region and spirit spirit there that that is has hasno to betterto be beadoptedadopted way to atensureat anan early early this a g athaneg.e. by making sure they are engaged in their respective communities. Another key issue arises from the word talent. It is not enough to create and retain educated young people, rather, we must develop and attract to the region the talent that can drive innovation and become future leaders of successful businesses. The40 40region also cannot flourish without businesses. This calls for stronger entrepreneurial spirit that has to be adopted at an early age.
32 Objective 2: Provide strong and comprehensive support for high potential startups.
Successful, globally competitive enterprises are vital for the development of the region. Unfortunately such enterprises often need extensive support in their infancy. Our goal is to ensure that high potential startups have access to a supportive environment, including sufficient capital and business support, allowing them to thrive and grow into engines of economic development. Objective 3: Improve the region’s visibility and image
The Inner Goriška region does not have a strong, recognizable image. We believe that this is due to the fragmentation of promotion for the region’s tourism, wine, and food culture. These efforts are currently disjointed into efforts by each separate municipality, diluting the brand and the effort and failing to create an attractive and efficient promotion. It is important to build a unified image of the region and to use that image to reach and communicate effectively to a wider audience. Furthermore, it is also important to ensure the high visibility of the region`s promotion in each of the municipalities, so visitors have easy access to all information about the region`s attractions. Objective 4: Increase tourism income
There are several strong elements in the region`s tourism products, such as casinos and wine. Yetthe region’s tourism income suffers because these strengths are not tied together or supported by other activities. We would like to increase tourism income by boosting the number of visitors and encouraging them to stay longer. This requires developing a broader set of activities and better connections among tourist entities offering those activities. Objective 5: Encourage regional collaboration
The Inner Goriška region is a relatively small community. With only 3 percent of the nation’s population, the region can’t afford to fragment its efforts to meet the overarching goals of a high quality of life, broadly shared economic opportunity, and community commitment. We have found each of the communities willing to collaborate and they already do work together on some issues. However, we believe that collaboration should be the region’s primary way of doing business. Rather than splitting the dwindling resources and fragmenting efforts, we believe that much more can be accomplished to support youth, business development, and wine and tourism promotion by working together for the promotion of the entire region.
33 Creating Opportunity for Young Talent: Program descriptions
In today’s fast paced world it is crucial that young people learn how to actively react to constant changes that surround them and how to take advantage of those changes. Therefore they should be given opportunities that would enable them to acquire applied knowledge, to master different skills and eventually to develop their talents and potential.
In the inner Goriška region there already exists some programs (for example Popri competition, Geek house, eHouse, elective courses in primary schools such as robotics, processing of wood and metal etc.) that embrace this idea. However, we have assessed that the region needs more of similar programs acting as links between education, business, technology and scientific units of the region. We suggest increasing the flow of talent through the region’s so-calledconnect talent education pipeline byand introducing talent to newthe worldsprograms of The Inner Goriška region does throughout young person’s life that more closely not have a strong, recognizable will enter upon completion of education. The image. business, service, or technology that he or she
result is a highly qualified and skilled labor force that is ready to join a productive business team or become successfully self-employed.
Below you will find programs that we strongly believe would be beneficial, if initiated in the inner Goriška region, leading to attractive environment to talented young people and successful companies. In the annex you can also find graphical presentations of the talent pipeline, which were already shown at our preliminary presentation that took place in December 2012 in the Primorska Technology Park.
Photo: Občina Nova Gorica
34 Program 1.1:- Develop and Deliver Industry certificates
Local vocational schools and vocational college schools could collaborate with industry to introduce an obligatory educational program that would require students to obtain at least one industry certificate per year. Students would be given relevant work experience before graduation, and they would become better employees and help to cut the industry’s training costs. The certificate would provide industry better assurance that the student has learned the required skills.
For example a student, who studies informatics at the Higher Vocational College , (in Slovenian “Višja strokovna šola”) that operates inside the Technical School Centre or (TŠC) would gain certificates like Cisco CCNA, Microsoft, Redhat, etc. A similar program already operates at the Faculty of Electrical Engineering in Ljubljana. They have a special department “ICT Academy” that provides different courses, which enable getting “information and communication technology” (ICT) industry certificates like Cisco CCNA.
Another suggestion is to introduce industry certificates of Slovenian Wine producers at the School for Viticulture and Enology at the University of Nova Gorica(UNG).
35 The local entrepreneurs that we interviewed and the people that attended our public discussion told us that they would like to see young people starting to work at their companies to be more competent and to possess more relevant skills. They also pointed out they currently need to spend too much time and money training young people. Therefore the introduction of industry certificates would be beneficial for both local companies and young people. After graduation young people will not only have a degree but also at least 3 industry certificates that will further verify their skills and abilities.
It is essential that local industry is involved in the design of these certificates to ensure that students are learning the skills that are in demand by local companies.
Implementation
Organizing and implementing such trainings requires first the formation of an industry committee to identify the necessary skills and competencies. This committee can also help to identify experts that are competent to provide lectures, training materials, and mentoring for students.
Funding will be required to pay these experts and to purchase professional equipment and materials. This is why these kinds of trainings tend to be expensive. However, local companies are likely to benefit from these programs because it will decrease their on-the-job training costs and improve their ability to identify potential employees with the right skills; thus, industry sponsorship makes sense. At the Faculty of Electrical Engineering at the University of Ljubljana, industry sponsors the cost for students by more than half of original price. For example for the individual module “CCNA Exploration 1” a student pays 108EUR+VAT whereas a non-student pays 270EUR+VAT. More information are available at the following website http://www.ict-academy.eu/en/cisco-networking-academy/pricelist.
36 The equipment necessary for training could perhaps be donated by the local companies or schools. RICTS (Development-Educational Center for Technical Studies, in Slovenian “Razvojno-izobraževalni center za tehnicne študije) and VIRS (Graduate and Research Center of Primorska, in Slovenian Visokošolsko in raziskovalno središče Primorske) are two regional institutes that represent a link between local companies and educational programs. Therefore they could support TŠC and UNG in introducing industry certificate program. Program 1.2: Develop and Deliver Internships
Internships at local companies could provide students real work experience while offering companies the fresh perspective and assistance of young people. It can also provide an additional linkage between universities and companies.
Local ICT companies, companies inside the Primorska Technology Park and In Prime Park could collaborate to publish a tender in which they would invite Slovenian and foreign students to work for them as interns. Also the staffs that run the PTP would invite interns to help them organizing and implementing projects. Promotion of the Internship tenders should be done via universities’ career centers and via social media. Implementation
The internship program will require a coordination of the effort among the companies and educational institutions that believe they can benefit from the effort. Thus, we suggest a coordinating committee, comprised of representatives of technology companies, the technology park, and the local higher education institutions, their career centers, and training institutes. This committee would be in charge theof the effort. decisions, coordination, and administrative tasks required for the internships. They would also be in charge of identifying the key resources such as sponsorships, grants, and volunteers required for
We suggest that regional educational units and enterprises take advantage of the European Students Mobility for Placements scheme. It enables students at higher education institutions to spend an internship period between 3 months and 12 months in an enterprise or organization in another participating country. Students may be awarded an Erasmus grant to help cover the travel and subsistence costs (including insurance and visa costs) incurred in connection with their placement period abroad. The home institution of the students applies for ERASMUS mobility grants to its national agency while the students apply to their home institution. Host organizations for student placements may be enterprises, training centers, research centers and other organizations.
A successful internship program will require greater visibility and recognition for the Inner Goriška region in order to attract the brightest students. The great benefit of the coordinating committee would seekbe the a integrationplacement ofin aenterprises number of oninternships their own. in Thisa single plan tender to coordinate that would multiple attract internshipsattention. Enterprises and work do not normally publish tenders through national agencies and home institutions, forcing students to
through the European Students Mobility for Placements scheme and sending enquiries and tenders can attract the attention of students because it would provide multiple opportunities. 37 Implementing internships also requires that workers inside companies and tech parks are willing to take charge of organizing internships and taking care of interns. It also requires help from Slovenian and foreign universities’ career centers. This can all be organized by the coordinating committee.
Erasmus interns are as mentioned above awarded a grant. However, there are also students or graduates that do not apply to internships through Erasmus mobility scheme. Their travel and living costs should be as well financed – either by host enterprises, a host municipality or the research centers of UNG. Interns could be as well accommodated in the university’s dorm. “In design thinking, We believe that implementation of internship scheme should students put their result in both paid and non-paid internships. For example the efforts into problems Primorska Technology Park or companies inside the park can harder afford to pay an intern a salary. However, a warm that matter…they environment, working with young people and startups, working are not just asked on projects, developing leadership skills, team working skills – to solve a problem; all these could be offered. Other local companies could motivate they also have to interns by offering them a the chance to compete for a job after finishing an internship period. Still it should be not forgotten define what the that money is the most effective motivational booster. problem is.” Program 1.3: Geek nights
It is essential that a constant cooperation between regional educational units and the Primorska Technology Park is established as soon as possible. One of possible solutions for this is to organize weekly co-working workshops for young students from the TŠC in the premises of the PTP Geek house. These events could be called geek nights and they could take place every Friday evening with varying projects/topics that students could work on. Besides the events organized continuously from September till June, geek and music festival could be held in the end of this period.
Photo: ithinkidesign.wordpress.com
38 Implementation
The most important resource required to implement this program is mentoring staff (for example interns or local volunteers) to organize and run such events. There could be a creative continuously present mentor who has good leadership skills, broad general knowledge and technical skills. That mentor could, however, invite at each Geek night an expert – in a field that would be connected to a main theme of an event.
Funding may be required to pay expenses for mentors, speakers, etc. We suggest that local sponsors be recruited. As a reward for sponsorship, the sponsor could work with the mentor to suggest a project that would further the sponsor’ mission. For example, if the tourist agency was a sponsor, they might suggest that attendees create a special web and mobile application where all citizens of inner Goriška region could upload photos of local nature, events etc. In the long term, this kind of concrete project could result in many photos being uploaded daily. This could in turn benefit tourism promotion of the region as well as being very rewarding to the participants who will also be able to use the application. This provides benefits to sponsors as well as attendees.
A venue is another essential requirement, but it could be provided by the PTP.
The PTP or any other organizer should be actively collaborating with TŠC to attract students to attend geek night events. Perhaps Club of students NG could also help in organizing such events. Program 1.4: Programming for girls: RailsGirlsGorica
Rails Girls is the non-profit organization from Finland, which operates worldwide with the help of local volunteers. They organize free two-day programming for girls workshops. These events have been so far organized all over the world. One was even held in Ljubljana, in December 2012, and it met a great response. Five hundred eighty women sent applications and 75 of them were eventually chosen to participate in the workshop. Organizers were very surprised that so many women were interested in women.programming. So they decided to continue with organizing free workshops of programming for girls. Therefore we suggest organizing international RailsGirlsGorica event, for both Slovenian and Italian
Implementation
Volunteering programmers and organizers are required for the event and they should be connected to organizations in Goriška region and Italian Gorizia. Organizers could also ask the PTP to take part in organizing RailsGirlsGorica. Of course volunteers should also associate with the RailsGirls organization for instructions and approval. PTP could again be appropriate venue for the event.
39 The cheapest and most successful way to change attitudes in the long term is to start at a young age. Entrepreneurial way of thinking develops slowly, but when it does, Inner Goriška Region has the ability to become a vibrant business cluster. The programs explained in the previous strategic objective will help to create an entrepreneurial culture among young people. Photo: Google
Program 1.5 The Entrepreneurship School Day or screening of the Startup Kids documentary
The Startup Kids is a documentary about young web entrepreneurs in the U.S. and Europe. It contains interviews with the founders of Vimeo, Soundcloud, Dropbox and many others who talk about how they started their company and their lives as an entrepreneur. The movie was made by two Icelandic entrepreneurs.entrepreneurs, Vala Halldorsdottir and Sesselja Vilhjalmsdottir, who founded their first company shortly after the economic collapse of Iceland and wanted to motivate other young people to become
The screening of such documentary could be organized within a bigger event such as The Entrepreneurship School Day. Teachers and pupils would spend an afternoon in the Primorska technology park. They would split into 2 groups. While one group would work on interesting and fun group task inside the Geek house, the other group of pupils would watch The Startup Kids movie. Implementation
Teachers of local schools and employees of the Primorska Technology Park would work together on this project. PTP could offer a place where screening of the movie would be held. One or two English shouldteachers be could held. provide Slovenian subtitles. Additionally collaboration is required among local primary schools, secondary vocational schools (TŠC) and a grammar school with the PTP where screening
The screening fee is reported to be 500 EUR. For non-profit organizations it might be for free. Organizers of this screening should fill out a screening request form at http://thestartupkids.com/request-a- screening/. The screening equipment could be provided by the PTP. Program 1.6 Design thinking
http://dschool. stanford.edu/Design thinking is a program originally developed by the Hasso Plattner Institute of Design at the Stanford University, now called the Stanford d.school. As explained on their web site, ( 40 ) design thinking is about teaching students how to think and work in a way that would lead them to innovations. In the d.school they welcome students with a methodology for innovation that combines creative and analytical approaches and requires collaboration across disciplines. This process draws on methods from engineering and design, and combines them with ideas from the arts, tools from the social sciences, and insights from the business world. At the d.school, they learn by doing. Students are not just asked to solve a problem; they also have to define what the problem is. Students start in the field, where they develop empathy for people they design for, uncovering real human needs they want to address. They then iterate to develop an unexpected range of possible solutions, and create rough prototypes to take back out into the field and test with real people. Their bias is toward action, followed by reflection on personal discoveries about process. Experience is measured by iteration: students run through as many cycles as they possibly can on any project. Each cycle brings stronger insights and more unexpected solutions.
Students put their efforts into problems that matter. Real-world problems, constraints and commitments accelerate learning more than hypothetical classroom exercises.
At any one moment, there are hundreds of projects underway at the d.school involving partners, stakeholders, users, and experts. Some of those projects are quick introductions that last just an hour or two, others are 10-week class projects, and some span years as student teams stick with a project after their class is over.
At d.school they partner with corporate, non-profit and government-sector organizations to develop these projects. It’s a learning loop: students get a better understanding of what it means to use design thinking outside the classroom, whereas partners deepen their own innovation methodology.
41 Implementation
At the Stanford d.school, all their teaching teams combine contrasting viewpoints and problem- solving approaches. All of their classes are team taught by a robust mix of faculty and industry leaders, combining disciplines like computer science with political science, and CEOs with elementary school policy-makers.
In the beginning the design thinking concept will be introduced inside the Primorska Technology Park. A teaching team could for example consist of 3 people - a teacher, a businessman and a scientist. In a long-term a design thinking school could be a part of the Technical School Center in Nova Gorica or University of Nova Gorica. It could also be a part of primary schools in the region. D.school at Stanford University has recently launched a project “taking design thinking to schools”. One of the greatest benefits of implementation such projects is that through design, children learn that they have power to change the world. Eventually the program could become an obligatory part of school curriculum.
Space could probably be provided by the PTP. Teaching staff would have to attend a design-thinking training program, which could be provided by the Faculty of Economics in Ljubljana since it was the first Slovenian faculty that established a d.school. A great deal of study material is also freely available at d.school website http://dschool.stanford.edu/use-our-methods/. The PTP should actively collaborate with UNG, TŠC and VIRS to attract students to actively participate in design thinking projects. The PTP should also consider collaboration with the COBIK and local companies.
Photo: futureatschool.wordpress.com
42 Suggestion - Design engineering study program in English
This year a relocated study program of the Faculty of Engineering in Ljubljana and the Academy of Fine Arts in Ljubljana will be introduced in Nova Gorica. The study program in question is design engineering. We suggest that the study language of this program could be English enabling it to attract foreign students and lecturers into the region. Suggestion – Encouraging ICT companies inside the PTP to move to Slovenian house in Silicon Valley
Startup ICT companies that operate inside the PTP could move and work for a short period of time (1-4 months) in Slovenian house in Silicon Valleyhttp://ssh.si/. That way they would gain the international experience, they would network, meet potential investors, gain new customer etc.
43 Support for High Potential Startups: Program Descriptions
Entrepreneurship in the market-orientated economy is a backbone of a region´s success. Along with innovation abilities and capital investments it is a significant factor of long term prospects. But entrepreneurship and risk-taking behavior don’t happen automatically, by themselves. A current state of mind is that risk-taking behavior is not well accepted in society. According to prof. Dr. Danilo Zavrtanik, rector of University of Nova Gorica, the majority of NG University graduates are looking for a job in public sector (Zavrtanik, 2012). This is in our opinion problematic. Private business activity creates added value to the region, creates jobs, stops emigration and attracts new people, and eventually raises the quality of life for the residents. Therefore nurturing the entrepreneurial culture and risk-taking behavior is an essential prerequisite for vibrant entrepreneurial community.
But the preconditions for successful businesses include more than just the desire and attitude to start a business. Young businesses usually require other forms of support to be successful. This part of our strategy focuses primarily on high value added technology sectors that compete globally. We believe these sectors, as narrowly defined below, have a long term potential for success in the global market which creates the greatest impact on the regional economy. Is there a surplus of business services in the Inner Goriška region?
Some have argued that there are already too many business services in the Inner Goriška region and not enough potential entrepreneurs to take advantage of those services. It is a classical demand and supply problem, yet the implications here are much more far-reaching. It was claimed, the supply of business-support facilities is appropriate (both concerning quality and quantity), possibly even too extensive for current users. However, it lags behind in absolute terms compared to other comparable Slovene clusters (notably Ljubljana). While the supply at present time might cover the needs existing entrepreneurs, new companies will not be inclined to locate in the region if the conditions are better elsewhere. If attraction and retention of best talent is a commonly accepted goal, the supply should be ahead of demand, which will eventually follow, with the suggestions above how to encourage entrepreneurial and risk-taking culture among students.
44 Let us paraphrase at this point the CEO of GEN-I, dr. Golob. When asked why he established the company in NG and not elsewhere, he said, simply because it is my hometown. At that time there was no noticeable support from the local community. If we expected anything from or relied on local community, we would be gone from the market. If I would be doing business rationally, I would establish the company in Ljubljana. The support facilities and critical mass simply outweigh the benefits of Nova Gorica (Golob, 2012). As best pointed out by this citation, in order to create a true interregional and international business cluster, the supply of business support facilities must be ahead of demand.
Which businesses provide the greatest potential benefit?
Economic base theory (Blakeley et al, 2009) suggests that a community´s economic growth is directly related to demand for its goods, services and products from outside of the region. The growth of industries that use local resources (including labor and materials) to produce goods and services to be exported elsewhere (or bring visitors in from elsewhere) will generate local wealth and jobs. As the exporting firms grow, their demand for local services and the wages they pay their workers grows as well, supporting local service providers and creating additional jobs. Thus, a successful export sector strategy also brings revenue and job growth to the local sector.
Why is this important? Resources to support the growth of companies are limited; thus we must focus our energy and resources on strategies that will have the greatest overall impact. We believe that a focus on existing and potential businesses whose market ambitions and potential are global, with high added value products/services is the most cost-effective strategy. Current business support facilities
Support facilities in the region are generally appropriately developed. There has been a strong focus from our side specifically on Primorska Technology Park, since it is the oldest and most established of such institutions. Still it has been pointed out during the interviews, that PTP offers rather modest support for start-ups during the period right after their establishment. Yet, things are changing with numerous programs and competitions recently started, aimed at young entrepreneurs, mostly in the IT sphere. And indeed the younger the participants are the better for long term entrepreneurial potential of the region and broader.
45 Program 2.1–Fund business support facilities at an effective level
As the recent actions taken by the PTP are encouraging, the lack of understanding from the state and the municipalities is troubling, specifically the reluctance to provide adequate funding from the establishers in the period of spending cuts from the state for such purposes.
According to Tanja Kožuh, PTP CEO (Kožuh Novak, 2012), the Primorska Technology Park is being funded roughly:
• 50-55% by establishing municipalities (MONG, Šempeter-Vrtojba) • 30 % by state via JAPTI (Razpis za sofinanciranje izvanjanja nalog subjektov inovativnega okolja; Public tender for co-financing the tasks of subjects of innovative environment) • 15-20% national and international (public) tenders. In accordance to recent budgetary spending cuts the state has not given out any public funds via JAPTI in 2012. In 2013 the future of these funds is still uncertain (as in Dec 2012). PTP obtained 65000–70000 € per year in this manner during the previous years for the purposes of any kind of supportive especiallyactivities forwith young many business, recently which introduced are now projects lacking. Thefor loss of such a significant percentage of funds is problematic,
encouraging entrepreneurship. Photo: Primorski tehnološki park
While various tenders are helpful as additional funds, they are of variable nature and cannot be used to fund projects that have a long-term focus. This is due to the fact that it is uncertain which tenders will be published, what they are going to finance and when, not to mention that such tenders are recently becoming scarcer.
Therefore we advise that in the time of spending cuts targeting these sectors, the establishing municipalities ought to step in and fill the gap in funding. This is only necessary to last until a fully functional state funding scheme for tech parks comes into effect and/or funding via JAPTI is restored to previous levels. The problem is presumably short-lived and should be treated as such. Yet, if this is not done the introduced programs and additional advisory and supervisory roles could be threatened, negatively impacting the business creation and retention. This could cause the most promising companies to move elsewhere, where the support structure is more beneficial with large enough critical mass of businesses and resources, as well as adequate support structure. Implementation
It is reasonable to consider maintaining current level of funding, as the municipalities step in where the state has cut the spending. With current numbers this means to compensate 70000€ per year currently obtained via JAPTI, so that PTP can keep working on entrepreneurship-encouraging programs. Because it is reasonable to assume at least the JAPTI funding problem will be short lived and considering relatively small amount of resources, the money necessary could be reallocated from the Javni sklad malega gospodarstva Goriške; Public Fund of Small Businesses of Goriška Region. 46 Program 2.2 - Outsourcing business-related tasks of the start-ups to support facilities.
We suggest that the support facilities, should it be PTP or something else, start offering more extensively the services that entrepreneurs with more or less technical knowledge and education are commonly lacking. For instance marketing, sales event participation, common participation on investors´ fairs, advisory on business plans, help with patenting procedures, financial management, valuation of investments in real assets etc. could be such activities.
The idea is that young entrepreneurs with little business knowledge could focus, in the early phase, solely on R&D, so that the companies could grow faster. It is to be noted, successful implementation of the program in its full extent brings added value to the park as seen from the perspective of companies currently in the park and those wishing to join and consequently attracts new businesses. Being able to use the services at a subsidized rate (but not compromising the quality) also increases the value of businesses as they have potential to grow faster. In the best case scenario, the availability of quality outsourcing services increases the demand of businesses to join the park (also from outside the region), so that some of these services can be offered efficiently on a large scale by the park itself, effectively pursuing economies of scale with large enough critical mass of startups that use the outsourcing to the park. Until then, it is to consider a cooperation with third-party providers (as it is currently the case with book keeping). If PTP decided to pursue this program, there should be a clear commitment to offering these services in full extent. If there is a problem with necessary funding, services could be offered at a price partially covering the costs, but without a compromise about the professional level of such services. Offering these services only partially and/or in an unprofessional manner, could have an adverse effect, as the companies would have little benefit from it (financial analysis is of little value if not done timely, considering all possible variables and correctly), yet fixed costs would still had to be covered. Implementation
As the young entrepreneurs often lack business and financial knowledge which is associated with running a company, these activities could be outsourced to a support facility or to a third-party service provider. It needs to be noted, however, that some of the above mentioned services can only facilitiesbe offered is ifunwanted there is a in sufficient this case. critical mass of start-ups/demand for such services (i.e. sales events participation, common participation on investors´fairsetc), which is why fragmentation of support
For a user of these services (effectively a start-up from PTP) it is not important whether the services are offered directly from the PTP or outsourced to consultancy firms in the area. If PTP intends to provide the services by itself, it should be noted that they currently lack personnel for providing these services effectively. We suggest employing several professional staff that would provide services described above. General advisors from similar enterprise sectors, who act also as investors or “coaches” are in detail described below. To certain extent PTP could also employ interns or recent graduates, as part of their training, but not all professional staff could be substituted this way.
47 As noted, such services must be offered professionally and in full extent. It is not particularly important whether these services are offered directly by PTP or are outsourced to consultancy firms in the area, which might be more efficient if the services aren’t needed on a regular basis. Should there be a problem with funds, a symbolic price is to be imposed, but in no way should the quality of services be cut. Program 2.3: Selective Funding of Start-ups
Debt-based funding
An adequate funding that allows a fast transition through the incubation phase of start-up and its ability to concentrate on R&D in its early years is crucial for a firm´s success. Since there is significant investment involved, the startups usually don’t produce profits in the first few years and they usually invest all the possible cash flow further. This is why a moratorium in first few years (not just the first year as it is currently the case with interest-free loans from Javni sklad malega gospodarstva Goriške) or equity investment is preferable.
Currently the funding of (high tech) start-ups is a quite severe problem. We do recognize that some measures have already been implemented. Most notable of them is Javni sklad malega gospodarstva Goriške; Public Fund of Small Businesses of Goriška Region, that gives out approximately 1 700 000€ a year (as in 2011) in zero-interest loans for businesses and agricultural investments in the 6 municipalities. Of those 1 700 000€, 200 000€ were distributed for agriculture and the rest for non- agricultural businesses. When looking at the fund´s annual report for 2011 it is evident that the portfolio is far from being specialized in high tech business. Large proportions of the portfolio are invested into reprocessing activities (notably wood reprocessing), commerce and hospitality industry which have a relatively low added value (Klemenc Assi, 2011).
We suggest that there should be more of a strategic approach in what to fund, like pointed out by tables 7, which shows what had been funded in 2011 with the money of Javni sklad malega gospodarstva Goriške and Table 8 that points out what should had been funded, if more strategic approach to funding is to be implemented. Focus should be more directed towards high added value industry and services, perhaps also diverting funds from agriculture, as the added value is relatively low, as well as job and consequently region´s wealth creation to high tech firms in accord with the Economic Base Theory described above (global market potential and high added value of products/services) Should there not be enough demand for these funds in a given year, a notion of giving money out to anyone who comes along should be restrained. Instead, any money that might be left, due to insufficient demand in a given year, should be allocated for financing support facilities in order to attract new promising companies and to ease the creation of new ones.
48 Table 7: Where the money is being invested . . .
Interest-free loans to non-agriculture businesses, 2011 Number of SupplementalActivity Loan volume (€) Loan volume (%) filed requests2
16 200 2 1,1 areasactivities on farms Maintenance of green 9 700 0,7 Reprocessing, of 37520 000 900 11 26,7 which: Food reprocessing 1 1,49,0 Wood reprcessing 127 600 4 29 000 materialsMetal production 69 000 1 4,9 Production of plastic 1 2,12,2
Recycling 31 000 1
Aeronautics 84 000 1 6,0 and electronics 2 productionCasino appliances 15 300 1,1 25 000 electricity Provision of 1 1,8
CHospitalityonstruction 113 300 7 8,1 233 000 7 16,5 Retail 207 500 7 14,8 Repair of motor 16 000 1 1,1 vehicles 90 000 Healthcare, Engraving, design 3 6,4 education Other 43 100 3 3,1 50 276 800 6 19,7 TOTAL 1 406 500 100,0 Source: Poslovno poročilo javnega sklada malega gospodarstva Goriške, 2011
We also stress the importance of extending the moratorium for high tech companies, with a significant investment in real assets (and consequently high fixed costs), to perhaps 3 years (as opposed to current maximum of 1 year as currently practiced with interest-free loans). Easing the burden of debt insurance for start-ups that have no track record should also be part of the program, since it was viewed to be problematic even in the Fund´s 2011 annual report, due to long procedures to gain such insurance. The current arrangement also creates a discouragement for young entrepreneurs since they often have to issue a bill on personal assets (lastna menica). 49 Table 8: . . . and where it should be invested
Birth and death rate of firms by sectors
Active, Births, Birth rate, Deaths, Death rate, Survival rate,
000s 000s per 1000 000s per 1000 per 1000 Production 157 11,00 7,3 16 10,10 -2,80 Construction 336 29,00 8,7 44 13,20 -4,50 Motor trades 76 6,00 7,9 7 9,20 -1,30 Wholesale 120 10,00 8,1 13 10,50 -2,40 Retail 221 21,00 9,6 26 11,60 -2,00 Transport & storage (inc. 82 7,00 8,5 11 13,20 -4,70 postal) Accommodation & 163 20,00 12 23 14,30 -2,30 food services Information & 171 19,00 11,1 23 13,30 -2,20 communication Finance & 35 3,00 9,5 4 12,60 -3,10 insurance Property 87 8,00 9,1 11 12,70 -3,60 Professional, scientific & 380 48,00 12,5 42 11,20 1,30 technical Business admin & 206 29,00 13,9 31 14,80 -0,90 support services Education 34 3,00 10,1 3 9,20 0,90
Health 87 7,00 7,9 6 7,20 0,70 Arts, entertainment, 187 15,00 8 19 10,20 -2,20 recreation & other services
Total 2,342 236,00 10,1 279 11,90 -1,80
http://www.startups.co.uk/business-startup-trends.html
Source: Office for National Statistics, UK, 2009 data, retrieved from
50 Equity-based funding
Considering the current state of Slovene Venture Capital market, we also positively judge the initiative to try to set up a (public) venture capital fund for the region. However, although the initiative is better than current (practically non-existent) VC market, there are some issues that need to be considered. We strongly advise the public share not to exceed 50 %, as many things can quickly go wrong. Mostly we thathave such in mind a fund that would possible underestimate conflict of interest the market could risk, be sincean issue there should is no itappropriate be not specifically benchmark, stated which and made very clear in what sectors the VC fund can invest and to what extent. There is also a possibility is why emphasis should be put on qualified fund management. Again, not every firm should be entitled It might be argued that if there were potential deals for VC, the VC would find and to theapproach fund´s money the companies.but only those While who thishave may the potentialbe a good to argument offer significant against returns a regional on investments. fund, it simply cannot hold the fact that no company from PTP was ever able to get private VC funding. This rather points to the assumption that Slovenian VC market is still in its starting phase, while there have been no serious attempts from the PTP and promising companies to try to approach foreign VC investors in such fairs or directly. This fact is rather problematic and should be worked intensively on in the future, besides other things.
We believe the majority of the money in the fund should come from private investors, possibly from successful regional entrepreneurs, who already praised the idea at our preliminary presentation in Dec 2012. Besides financial investment, regions entrepreneurs could also be in supervisory and advisory roles, which are known abroad as “coaching.” Such coaches would advise and help the start-up in any way they can. Ideally they would also privately invest in equity of the start-ups. Advisory fee is optional and a matter of agreement between the start-up and the coach.
A typical professionally managed VC fund volume starts at $25 million, however due to different nature of the regional fund, we suggest that an appropriate volume would be around 5 million €, which is close to the volume of the interest-free loan fund currently operating by the MONG (4 190 469 € on 31.12.2011). But again, proper emphasis should be put on fund specialization and adequately estimating the market risk and potential of investments.
The regional VC fund is prospective idea; however it should not be the only source of equity financing. To our understanding no start-up in PTP has obtained equity financing, which is no surprise given the VC market state in Slovenia. However, foreign capital markets are anything but off the limits. We recommend that the Park management and few promising companies´ representatives should intensively advertise on investors´ fairs and conferences. And if it is necessary, they should approach foreign VC firms directly. We believe it would be more effective if such company visits were done together with the Park management and other promising companies than if done individually, since this increases the chances of a single company getting the financing, as well as cuts costs of promotion.
51 Implementation
Both proposals could be either combined to full extent, partially, or executed separately. For interest- free loan fund, a strong emphasis should be put to concentrate it in strategic sectors. As already derived from the Economic base theory, any fund, should it be debt or equity based, should invest particularly in high added value firms with global market potential and ambitions. Of course, since high tech start-ups proposedtend to be business more risky plans than, could for minimizeinstance, hairthat risk.salons, most likely there will be a larger volume of loans that will default in 2 years’ time. But a careful risk management of investments and careful judgment of
Since the fund already currently operates on interest-free basis, the municipalities are effectively subsidizing the businesses. Our suggestion of extending the moratorium from 1 to 3 years has its logic based on the fact that investments in real assets cause lots of fixed costs causing such firms normally bear losses in first few years. Easing the insurance requirements for debt will have encouraging effect on entrepreneurial activity and most likely increase the demand for the loans. But again, this may consequently result in more bad loans, a risk that a careful risk management can minimize.
Theoretically, the payback rate would be 100%, and neglecting the opportunity costs of money, the costs of such a fund are only the manager´s pay check. However, with specializing in relatively high risk sector and easing the debt insurance requirements, the payback rate will almost certainly be lower but by how much is hard to predict, as such an estimate involves too many variables.
Due to risky nature of high tech start-ups, a more appropriate way of investing is equity-based investment (Venture Capital Fund). A common rule of thumb is that out of 10 high tech start-ups, 4 will fail completely, 4 will return the original investment and 2 will yield significant returns (Gage, 2013). capitalBecause business. of this tendency, an equity-based investment allows the investor to at least have a portfolio with a slightly positive return, however a 10 percent returns a year are not uncommon in venture
We believe investing on equity basis brings a set of positive consequences, firstly to the investors, who have a possibility to achieve capital gain instead of loss as a consequence of bad loans, as well as to entrepreneurs, who can allocate the cash flows into further investments in real assets instead of repaying the annuities, which allows them to grow faster. To cash-in the capital gains, the venture capital fund sells the shares of the companies to private equity funds directly on the capital market.
An appropriate volume of a regional venture fund of such nature is in our opinion 4-5 million €. Part of the capitalization such fund could be achieved by converting part of the interest-free loan fund to a venture fund. This way no major further investments are required, as the assets of the loan fund are already of appropriate volume (4,2 million € as in 2011 and rising annually). The running costs of venture fund could also be lower due to the possibility of significant capital gains at an exit from a company. However, also private participation has to be expected, which is desirable to be over 50 % and in no case lower than that. (See above) Coaches and their personal equity investment are to be arranged individually. A relatively successful case of public venture fund comes from Portugal (Portugal Venture).
52 Improving the region’s Visibility and Image: Program Descriptions
During our project we discovered that inner Goriška has an abundance of features that could attract tourists and even immigrants to the region. Unfortunately these features largely remain a hidden gem that takes too much effort for a usual tourist to find. And even in the case that somebody ends up visiting one of the municipalities they often remain in the dark about the opportunities offered in the neighboring municipality. To remedy such a situation, we propose the following two programs to advance the region’s promotion and image, which hopefully enables the region to fulfill its true potential in the tourism field. Program 1: Creating an umbrella tourist organization information centers would become members of a newly created The program’s aim is very simple; each of municipal tourist umbrella organization. This organization would take over all the promotional back office activities from the current tourist offices, while still leaving one physical information center in each of the municipalities. This arrangement allows for the economies of scale that are naturally present in knowledge goods, and thus making Photo: Leo Caharija the whole promotion more effective. As an example of economies of scale is the fact that design of a leaflet and a logo can be replicated for every municipality’s material without additional cost. Another advantage of such approach is the broader offering to a tourist. If the tourist information centers decide to join forces, they should also display offerings from every municipality and not just from their own. Arguably tourists will have a wider variety of activities in the region, which should encourage them to stay longer, come back, or even recommend the region to friends. The larger organization would also be able to distribute the materials wider, further strengthening the externalDolina image Soče.com/ of the region. There is even a very close example of a place where such an arrangement is successful, namely Kobarid and Tolmin. Here is a website as an illustration about their collaboration. ( )
53 Implementation
Implementation of such plan clearly needs intense collaboration. Therefore all sides have to be more than willing to participate. Governing of such organization also needs to be resolved and the preferred way to do this is to divide the voting power based on the monetary contribution. Still, this might leave too much power to the largest participant leading to a need of some sort of veto system as well.
Financing of such an organization should primarily originate from the existing budgets of the tourist information centers. Scale savings from operations should be enough for this, once the organization is running, but in the initial stage there might be need for additional financing. All the human resources should be covered from the existing offices. This might create an issue about commuting that could potentially hamper the program’s popularity among employees.
Photo: Občina Nova Gorica 54 Program 2: Common website for tourism promotion
alsoCreating be done a common without tourist such collaboration. promotion website Today couldpeople be use an integral part of the umbrella tourist organization, but it could online material as the first hand resource for information about any new thing. Therefore effective online presence is vital for the regions tourism success. At the moment the online presence of most of the municipalities is non-existent and for Brda and Nova Gorica it’s far from ideal. Photo: Google
A unified tourist website would bring many of the same benefits as the joint tourist organization which won`t be repeated here. One thing that needs to be highlighted is that the search engine discoverability of the Vitovlje – Chestnut festival shouldregion of would course likely be included get a large in the boost material, just but by poolingin addition all Ozeljan – Polenta festival the traffic to single website. Main attractions of the region Goriška Brda – Cherry festival Orehovlje – Asparagus festival to this, tourists should be able to get information about Višnjevik – Rebulafestival aswhere wine to cellars stay and and other hotels. things This topromotion do. Thus, could large alsosegment be a should be dedicated to promoting private businesses such moderate fee. revenue source for maintenance of the site if done with a
Implementation
Implementation also
withoutis largely the similar need to thefor common tourist organization
wouldcomplicated be most governance. likely The building of the website
tooutsourced. life would Aben to alternative combine itway with to some bring of the the website youth
createdesign a school solution. activities There andis a challenge the participants to
significant upfront cost to building such a website. But it should be manageable to finance it from the existing tourist budgets. Photo: Občina Brda
55 Increasing Tourism Income: Program Descriptions
We believe that aside from strengthening the region’s visibility and image, it is important to offer a more comprehensive list of tourist activities. This will attract tour operators, bring more tourists, and encourage tourists to stay longer. An important point of our set of programs is the importance of connecting the many different potential tourist activities. The inner Goriška region has a significant potential for growing fruits and vegetables because of its Mediterranean, warm and Photo: Občina Nova Gorica sunny climate. There are many world-wide known wine growers located in the region which have even had international presence on various tourism fairs (Munich, London, Vienna). The region is also hosting various food festivals that bring tourists in to the area (Vitovlje – chestnut festival, Ozeljan – Polenta festival, Goriška Brda – cherry festival, Orehovlje – asparagus festival, Višnjevik – Rebula festival ). We have also noticed some examples of encouraging consumption of local food and (forfood example tourism. KupujmoThe two Goriško, presence at Gusti di Frontiera - Gorizia). These examples demonstrate that much has already been done, but still there are many opportunities left to improve the wine programs described below attempt to make this connection between tourism and wine to improve the revenuesProgram of both 1: industries.Set up a tasting room
The region has many wine growing areas, for example Goriška Brda, Šempeter-Vrtojba, Renče-Vogrsko. But there is an absence of a place where tourists could come to taste and buy wine from producers from all over the inner Goriška region. The program is based on setting up a tasting room in an historic and interesting place that would attract tourists. If the municipality Nova Gorica becomes the owner of the Castle Rihemberk in Branik, the tasting room could be set up there, otherwise another place should be found. In the tasting room, all wine growers could present their wine; tourists could taste and buy it. Beside this the castle would offer a restaurant selling traditional dishes and serve as a place that could be reserved for special events.
onAs its a result, own, especially many wine for growers those who would are haveinterested the possibility in wine. The to sell their wine, and if located in the castle, the tasting room could become a great tourist attraction
region would become more known as a wine growing region and it will have more attractions to offer to tourists and tour operators that organize trips to the region. As an example we can take a look at the wine store in Goriška Brda. The wine store is a place where tourists come to taste and buy wine; beside this the store also offers some food. But they only sell wine from GoriškaBrda leaving out the wine from rest of the region. The wine shop is located in the Castle in Dobrovo (Goriška Brda), the Photo: Občina Kanal ob Soči place is historical, equipped as an old wine cellar, and leaves an impression on tourists. In the Castle there is also a restaurant and a place for special events. There is also a tourist information center nearby, thus many tourists coming 56to the TIC also end up visiting the wine shop. Implementation
Firstly an impeccable place is propertyneeded. Weof the recommend municipality. the InitiallyCastle of Rihemberk, if it becomes the then the municipality could rent itthe to castle entrepreneurs needs to be who renovated would andbe
Thereforeinterested inthe setting municipality up a tasting needs room to and opening a traditional restaurant. Photo: Občina Brda
find a contractor to renovate the castle and private investors who are interested in bringing the wine, from all over the region, into one place. The Regional development agency could also help the private investors to receive European funds. Program 2: Organizing wine and culinary tours
To become a well-known, attractive and visited tourist destination, the region requires an organizer of complete tours. We found out that in the Inner Goriška region there
are no packages for tourists that include accommodation, Photo: Google meals, transport and visits to tourist attractions that foreign tourists could buy in their tourist agency, over the internet or from any of the region’s tourist agencies, in case the visitor is already in the region.
The program is based on organized tours to wine cellars (to taste and buy wine), to farm houses (to eat traditional meals), to visit main attractions and places in the region. A tour operator would plan a variety tours to such destinations, spanning over the whole region. Tours would include accommodation, meals, transport and visits to tourist attractions. All the elements could be connected in 3-or 4-day promotetrips to the and whole sell the region. tour toThese their tours customers. could be offered to tourists already in the region and to foreign tourists agencies (for example in Italy, Germany, and Austria). The foreign tourist agencies would then
Our main goal for this program is that tourists would spend more time in the region and that a package offer would encourage many new people to visit that did not before perceive the region as a place where they could spend their vacation. Today many tourists come and spend just one day in the region because they are not aware off all the attractions that the region has to offer, but with the tour package they would discover and visit many places that previously remained unknown. In this way the inner Goriška region would become a more comprehensive tourist destination for people who would like to visit it and would possibly also attract those tourists, who were not familiar with the region, Photo: Občina Brda and did not previously intend to visit it. Beside this,57 producers, farm house owners, hotels etc. the newly established company would provide work places for residents and more business to wine
A good example of successful tourist destination could be Tuscany, in Italy, which is also a popular wine growing region. If we take a look at web pages of different Slovenian tourist agencies, we can see that many of them are offering a tour around Tuscany, visiting wine cellars, tourist attractions etc. Still we are aware of the fact that Tuscany is very popular and known tourist destination. It is important that a region has natural resources as a foundation for tourism and which the Inner Goriška region definitely does. The next step is to create a tour package offered to tourists. Implementation
The program is meant to be realized by the private investor with the help of all six municipalities (their tourist information centers) and Regional Development Agency (to obtain funds from European Union). A tour operator, who would be the organizer, has to find participants from the tourist sector that would wish to offer their products as a part of the tour. For example hotels, apartments, farm houses could be providing the accommodation, wine producers could offer a tour around their cellar and wine tasting and farm houses could offer traditional meals. A tour operator should evaluate all the costs involved in given tour package then evaluate whether the price is attractive for tourists. When the tour is completed it needs to be promoted in Slovenia and abroad. The tour could be offered to different foreign and domestic tourist agencies. TICs in the municipalities could also inform tourists about the packages and where they can buy them. Program 3: Building a golf course and a spa resort
Many tourists that come to the Inner Goriška region are attracted by the casinos. Many of them are people with deeper pockets that are willing to spend more money than an average tourist. At the same time however they expect excellent service and a comprehensive set of activities a destination has to offer. We identified two distinct insufficiencies that at the same time present opportunities for the region. One is a modern golf course and the other a spa center. Both will be a valuable addition to the current tourist offer. We propose a modern golf course (most likely with nine holes) to be built by a private investor with the strong support from the local communities. The locations are up for discussion but preferably they should be close to Nova Gorica. Some possible locations for a spa resort have already been discussed in the past and include Goriška Brda and Lokve.
Currently tourism mainly depends on the casinos bringing tourists in. The length of stay for these tourists ranges from one night to a few days and then they leave because there are not more things to do in the area. If a golf course would be built, this would change and tourists would prolong their stay. They would have things to do during the day e.g. golf and spa and they would entertain themselves in the casinos during the night. Those that prefer to relax in a spa would have Photo: www.notizie-digitali.it 58 the opportunity to do so. Since the destination would have more to offer also more tourists can be expected to arrive.
As for the golf courses, all the cities we examined, known as casino destinations, have at least one golf course in the proximity. Those include very well-known destinations in the world like Macau, Las Vegas, Atlantic City etc. that have multiple golf courses. The same thing holds for many European destinations like Paris, Tenerife, Monte Carlo, Venetia etc. What we can conclude from this is that visitors of casinos do value golf as an additional activity. Furthermore many casinos and hotels offer spas by themselves, which shows that this is also a complementary service that can be offered. Implementation
membersBoth projects of all local will communities require a working group that will consist of between each municipality, involved. The cooperation
forprivate the investorssuccess of and the any projects. other party involved will be crucial
The cost to the local government would not be negligible but still be minimal considering that the investment would be carried out beby ato private support investor. the project The rolein the of the local government would only Photo:www.hotel-drnca.si administrative way.
The first task of the working group will be to make an analysis of the possible locations for the spa resort theas well special as for plan the ofgolf the course municipality and decide which which details ones how are suitable.the facility Through will be this build. action Once the this municipality has been should secure the required land at a competitive price. Later the projects should be included into
completed, a possible course of action is to organize a public tender through which the investor will be chosen on the basis of a plan that will have to be submitted earlier. When the investor will be known, the involved municipality should grant a building permit and issue any other required papers that could present an administrative barrier. Program 4: Cycle paths that connect all 6 municipalities
Some cycle paths have already been constructed in the past and they represent a big advantage to those that want to commute by bike. Those efforts however have one important flaw with respect to cycle tourism. The network of cycle paths was not planned for the region as a whole but rather at a level of every municipality by itself. When further cycle paths will be built, the municipalities could come together and devise a comprehensive plan that would eventually produce a network connecting the whole region. 59 Right now the tourists that want to spend their active holidays cycling don’t have a choice but do so on regular roads, whenever they want to make longer trips. Thus they may decide not to come in the first place. A network would enable them do make such trips safely and pleasantly. They would also possibilitiesbe able to go to to do various so for sightsresidents in the as well.area using bikes and explore the region this way. Such a network would make the region more attractive to tourists that want to cycle and at the same time improve
Bicycle tourism is booming around the globe. Cities as well as rural areas are building larger and larger bike path networks to accommodate their residents and in many cases to attract tourists. Examples matter.include places in Europe like the Netherlands and Denmark that have traditionally been oriented this way as well as many places in the United States and Australia that do not have long traditions in the
Implementation
The project will require a great deal of collaboration between municipalities and their planning offices. Building of new bike paths is fairly expensive, but the collaboration itself does not bring substantial extra costs to the table. to include the decisions on where the bike paths would be constructed and how they would connect A comprehensive plan has to be developed in collaboration between all six municipalities. This plan has
the region, what would the obligations of every single municipality be and the financial partition of the whole project. The same work group then has to develop a marketing plan that would include the name, the signs that will be situated along the paths, promotional materials etc.
Photo: www.slovenia.info 60 Encouraging Regional Collaboration
Many of our proposals are critically dependent on the ability of the communities in the region to strengthen their ties to ensure that they are able to effectively work together and tackle the issues and opportunities the region is presented with. There are many hurdles which the entire region faces, regardless of municipal or settlement borders, and these can be overcome more effectively with a document.strong spirit of collaboration. We believe that this is essential for the successful implementation of the programmes presented in this strategy and consequently the achievement of the goals set out by this
Some of the benefits of wider regional cooperation include the following:
• pooling of necessary funds ensures more effective targeted public spending, • providing services or amenities to residents which would otherwise be out of reach, • better international recognition, • diminishing barriers for econonomic development, and • avoiding duplication of facilities or programs. There are many examples of good practices regarding inter-community cooperation throughout Europe. We have chosen to highlight the example of the municipalities of Sakyla and Koylio in Finland, which successfully pooled funds and cooperated in developing healthcare infrastructure for their communities. The municipalities were each faced with problems in their existing health clinics and instead of upgrading their own facilities decided to invest into a common health center for both municipalities.on their own. Thus With the the municipalities, joint investment faced they with were similar able to issues, take advantagecollaborated of economiestowards their of scalecommon and build a better equipped health clinic with specialists they would otherwise not have been able to afford togoals far awayand were medical able centers to not foronly more update specialized their health treatment. infrastructure, but also provide better service to their residents, offering them specialist treatment closer to their homes, saving locals from having to go
We have highlighted the need for cooperation andbetween prospects the of municipalitiesfurther international throughout cooperation this document, but we also believe the possibilities connected to the Italian side of the border, with could be addressed as well. The region is closely which it shares historical, geographical and cultural similarities. Although this goes beyond the scope of our project, we see great potential in developing further ties and common projects on an international scale in the long term.
Photo: Občina Nova Gorica 61 Evaluation Plan: How will we know that the strategy worked?
We suggest that the region be intentional about measuring the outcomes from each of these programs. startThe right and timereduces to think the burdenabout how of that to evaluate data collection. a program This is during section the describes program’s how design. the municipalities This provides the best opportunity to build a plan for collecting the data relevant for evaluation from the program’s
could evaluate whether the programs are meeting their goals.
For each program there are short-term and longer-term outcomes. The short-term outcomes are in many cases processes or outputs, and evaluating these can tell us whether the program is being implemented as envisioned. In the longer run, it is important to document whether the program is meeting its long-term goals. This is often the most difficult and data intensive task, but one that is important to ensuring that the region’s funds are well spent. Create Opportunity for Young Talent
The programs described in this section have the primary goal of encouraging young people to enter technical or design oriented careers with the skills required to be part of an entrepreneurial environment. The only way ofto knowthe students whether who these participated programs arein reallythese working is to track the long-term outcomes
programs from their perspective as well as from the perspective of employers who have participated in and benefitted from the programs. Thus, we suggest three types of data collection for these programs:
• aboutTrack sponsors, program and data short suchterm outcomes as the demographics of participants, information
be collected on attendance sheets and from Photo: magicunlimited.typepad.com of projects in a project database. Data can
short abstracts written by program mentors. This can be used to generate reports that describe the programs’ short-term outcomes. • Survey participants immediately after the program as well as in the longer term to track their longer term educational and employment outcomes, including major, employment status, and salary, and compare these with the general population of the same age. • Survey employers who hire interns to determine their satisfaction with the programs.
62 Support High Potential Status
The long-term objective of this set of programs is to increase the number of startups, their collective long-term revenue and their employment. In the short-term, we will need to track program data to ensure that the program is being executed as planned, and that the programs are sustainable. We suggest the following three types of data collection efforts:
• Track program data such as program investments and expenses at the PTP. Photo: Občina Kanal ob Soči • Track number of new startups, both in the PTP and in the region, comparing startup rate before and after programs begin. • sales revenue per year for all companies in the PTP before and after the stabilization of funding and development of outsourcing programs and compare this with the success of startup companies not using the services of the PTP. • For the Venture fund, track the capital gains of the fund itself as well as the long term growth in revenue and employment for startup companies using the fund. Increase the Region's Visibility
These two programs are designed to increase the region’s visibility. In the short run, we should measure organizational advances to ensure that the program is being executed as planned. In the longer run, we want to know how much exposure the region is getting to potential tourists across the globe. Thus, we suggest three kinds of data collection and evaluation:
• Track program data such as expenses and progress for the transition to a common agency and web site; • transitionTrack the numberto a common of people that physically enter tourist information centers across the region throughout the before and after the agency. Compare traffic
change.Track hits to the web site • with Google analytics. Compare post-transition web traffic to traffic generated by separate web sites collectively.
Photo: Leo Caharija
63 Increase Tourism Income
The primary objectives of this set of programs are to increase revenue for hotels, wineries, and other tourist destinations by bringing in more visitors, having them stay longer and spend more money while they are here. In the short run, we want to track the progress toward the implementation of programs, to ensure that they are being implemented as planned. Thus, we suggest four kinds of data collection and analysis:
• Track the number of tourist arrivals to the region and nights spent in the area. Compare these with seasonal adjustment before and after the changes in programs and offerings. • For the wine tasting room and wine tours, track the number of visitors, number of tours sold, sales of wine at the tasting room and through the tours. • Track overall change in sales of wineries participating in the tasting room and tours to assess whether the additional exposure increased long-term sales. • Track number of agencies offering new tour offerings, the countries in which they are offered, the number of tourists purchasing new tour program offerings. • Track revenue and profit generated for the new tour operating company. • theFor newthe longer-termfacilities. projects such as spa, golf resort, and bike paths, track the development and implementation of plans, the number of kilometers of new bike paths, and the number of visitors to
• Track tourist nationalities and their activities while in the area (did they use the bike paths, did they use Casino, did they visit tasting room, golf course, etc), through a tourist questionnaire implemented at hotels. This will help the agencies understand what combinations of activities are most attractive to tourists.
Photo: Leo Caharija 64 Conclusions and Next Steps
The Goriška region is an area open towards the outside world, with a unique position in Slovenia and an unrivalled connection with other cultures. It has an outstanding set of opportunities, like a rising new university and a large potential for growth in tourism. These must be taken advantage of in order to reach the goals set out by this strategy and to improve the lives of local residents. However, in order to succeed, certain challenges presented to the region must be addressed, and with the help of programs put forward in this strategy they can be overcome.
Through the many interviews with policy makers, business leaders and other members of the regional community, we decided to focus on two major sectors of the economy, technology and tourism. These, along with the established opportunities and challenges, led to the formation of five objectives, which have been pursued throughout this document:
• creating opportunities for younger talent to contribute to the region’s success • providing strong and comprehensive support for high potential startups • improving the region’s visibility and image • increasing tourism income • encouraging regional collaboration To tackle the issue of how to support, develop and encourage the creativity, entrepreneurial spirit and social responsibility of the regional youth, we have looked at ways to teach youth inhow order to be to proactive, succeed in how life to and contribute thus contribute to society to and how to help them get the skills they will need the success of the region.
Providing strong and comprehensive support for high potential startups is essential as entrepreneurship is the backbone of a market- oriented economy. This is not something that can be built overnight, but instead must be nurtured and supported and only gives out results over a period of time. To help build this we have put forward suggestions that will help young companies grow faster and achieve better results.
Improving the region’s visibility and image and promoting tourist infrastructure development in the area is vital to attracting more tourists. The region is full of hidden gems, waiting to be discovered by tourists, but take too much effort to find. We proposed activities, which would Photo: Leo Caharija greatly enhance the visibility and accessibility 65 of the local tourist infrastructure, allow the communities to achieve more with the same amount of funding and expand the scope of the region and promote its sights more effectively.
However, just as important as increasing the visibility of the region is improving income from tourism, as this is the statistic that matters most to the local economy. To improve it, a more comprehensive list of tourist activities and infrastructure is of paramount importance. We proposed a number of projects to achieve this.
Finally, these activities all depend on the ability of the local communities to work together, which is why our last objective is to encourage regional collaboration. While there already is cooperation going on, we believe there are many more areas where the communities can work together to the benefit of each municipality in the region and we encourage them to do so as the advantages of joining forces are vast. proposals put forward in this document. It is important that there is wide consensus on what needs Now it is up to the local community to continue where this strategy has left off and implement the
to be done, which projects to move forward on and to commit to carrying them out in practice. The successful implementation can be evaluated through the tools we have presented, assessed accordingly and modified if necessary. Many of our proposals require a long-term concerted effort, however if applied effectively and systematically, will be beneficial to the local economy. We encourage all the stakeholders to work together for the benefit of the community and for a better future for all.
It is imperative that the implementation of these proposals is not rushed but planned ahead and done systematically. We suggest forming workgroups with experts from different areas pertaining to each project and with representatives of the involved parties to work out how to carry out the proposed activities, with regard to funding, possible legal limitations or other issues. As deliberated at our thisDecember project. presentation and subsequent discussion, further cooperation with students of the Faculty of Economics is welcomed, some of which have already expressed their interest in continuing work on
The work of this group has ended with this document, but the region’s future is just beginning.
66 BIBLIOGRAPHY
Planning Local Economic Development: Theory and Practice, Fourth Edition. • Blakeley, E. J., & Green Leigh, N. (2009). Thousand Oaks, CA: Sage Publications.http://www.startups.co.uk • Crimson Publishing Ltd. (2013, January 14). . Retrieved January 14, 2013, from http://www.startups.co.uk/business-startup-trends.html • dr. Golob, R. (2012, December). Inner Goriška Region Report Interviews. • dr. Zavrtanik, D. (2012, Dec). InnerErasums Goriška Student Region Mobility Report ProgrammeInterviews. • European Commission. (2013). . Retrieved Jan 28, 2013, from http://ec.europa.eu/education/erasmus/placement_en.htmhttp://www.proinno-europe.eu • European Commission. (2013, January 14). . Retrieved January 14, 2013, from http://www.proinno-europe.eu/inno-grips-ii/newsroom/portugal-140-million-euro- public-venture-capital-fund-new-projectsWall Street Journal • Gage, D. (2013, January 14). . Retrieved January 14, 2013, from http://online.wsj. com/article/SB10000872396390443720204578004980476429190.htmlForbes.com • Guadiosi, J. (2012, Jul). . Retrieved Jan 2013, 14, from http://www.forbes.com/sites/ johngaudiosi/2012/07/18/new-reports-forecasts-global-video-game-industry-will-reach-82- billion-by-2017/ http://www.high-tech-gruenderfonds.de/ • High Tech Gründerfonds. (2013, January 14). . Retrieved January 2013, 2013, from http://www.high-tech-gruenderfonds.de/ • ICT Academy. (2013). Retrievedhttp://www.in-prime.net/ Jan 28, 2013, from http://www.ict-academy.eu/ • INPrime. (2013, January 14). . Retrieved January 14, 2013, from http:// www.in-prime.net/introdelo.si • Ivanc, S. (2012, Dec 7). . Retrieved Jan 28, 2013, from Slovenska startup hiša v San Franciscu: http://www.delo.si/druzba/delova-borza-dela/slovenska-startup-hisa-v-san-franciscu.htmlhttp://www.soulofthecommunity.org. • Knight Foundation. (2010). Retrieved Jan 28, 2013, from http://www.soulofthecommunity.org/sites/default/files/OVERALL.pdf • Kozuh Novak, T. (2012, December).Dolina Inner Soče Goriška Region Report Interviews. • LTO Sotočje. (2012, Apr 18). . Retrieved Jan 28, 2013, from http://www.dolina-soce. com/ Poslovno porocila Javnega sklada malega gospodarstva Goriske. • mag. Klemenc Assi, A. (2011). Nova Gorica: Javni sklad malega gospodarstva Goriske. • Manojlovič, L. (2012, Dec). Inner Goriška Region Report Interviews. (K. Jazbec, Interviewer) • Mestna občina Nova Gorica. (2013). Retrieved Jan 28, 2013, from http://www.nova-gorica.si/ • Občina Kanal ob Soči. (2013). Retrieved Janhttps://tbe.taleo.net 28, 2013, from http://www.obcina-kanal.si/ • Oracle Corporation. (2013, January 14). . Retrieved January 14, 2013, from https://tbe.taleo.net/login/? http://www.primorski-tp.si/ • Primorski tehnoloski park, d.o.o. (2013, January 14). . Retrieved January 67 14, 2013, from http://www.primorski-tp.si/ • RailGirls. (2010-2013). Retrievedwordpress.com Jan 28, 2013, from http://www.railsgirls.com/ • Russo, S. D. (2012, Oct 5). . Retrieved Jan 28, 2013, from http://ithinkidesign. wordpress.com/ Säkylan ja Köyliön Tervey Skeskus. • Säkylän je Köyliön Terveydenhuollon Kuntayhtymä. (2005). Retrieved Jan 28, 2013, from http://www.sakylanjakoylionterveyskeskus.fi/http://www.squidoo.com/ • Squido, LLC. (2013, January 14). . Retrieved January 14, 2013, from http://www.squidoo.com/growth-industries-2012 • Stanford University Institute of Design. (2013). Retrieved Jan 28, 2013, from http://dschool. stanford.edu/ http://www.stat.si/index.asp • Statistični Urad RS. (2013). . Retrieved Jan 28, 2013, from http://www. stat.si/index.asp • Turistično-informacijski centerhttp://www.ung.si Brda. (2013). Retrieved Jan 28, 2013, from http://www.brda.si/ • Univerza v Novi Gorici. (n.d.). . Retrieved Jan 28, 2013, from http://www.ung.si/ sl/ UNWTO Tourism Highlights, 2012 Edition. • UNWTO. (2012). Retrieved Jan 28, 2013, from http:// dtxtq4w60xqpw.cloudfront.net/sites/all/files/docpdf/unwtohighlights12enhr_1.pdfThe Startup Kids • Vala Halldorsdottir, S. V. (Director). (2012). [Motion Picture].
68 THE LIST OF INTERVIEWEES
• Director, Regional development agency of Northern Primorska Nova Gorica- Črtomir Špacapan • Head of Mayor’s Office, Municipality of Nova Gorica - Simon Klaut • Secretary,Chamber of Crafts Nova Gorica - Boža Loverčič - Špacapan • City Councilor, Municipality of Nova Gorica - Tomaž Zarifa • Mayor, Municipality of Kanal - Andrej Maffi • Mayor, Municipality of Miren - Kostanjevica - Zlatko Martin Marušič • Director, Zavod Masovna - Edvin Pozderević • Public relations, Cobik - Hermina Ogrič • Director, InstrumentationTechnologies, d.d. - Rok Uršič • Director, Health Care Center Nova Gorica - Marjan Pintar • Chief of Department for the Environment, Spatial Planning and Public Infrastructure, Municipality of Nova Gorica - Niko Jurca • Director, MA-NO, d.o.o - Luka Manojlovič • Director, Intra Lighting, d.o.o. - Marino Furlan • Director, Tourist Information Center Nova Gorica- Dejana Baša • Mayor, Municipality of Brda - Franc Mužič • Director, Wine Cellar Goriška Brda, z.o.o. - Silvan Peršolja • Hit, d.d. - Tomica Dumančić • Director, Museum of Goriška - Andrej Malnič • Rector, University of Nova Gorica - Danilo Zavrtanik • Mayor, Municipality of Šempeter - Vrtojba - Milan Turk • CEO, Gen-I, d.o.o. - Robert Golob • Director, Primorska Technology Park- Tanja Kožuh • Chair, Advisory Board for the Environment and Spatial Planning, Municipality of Nova Gorica – TomažVuga
69