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Feasibility Study for Establishing a ICT Innovation Hub and Excellence Centre in Cahul (October 2019 – January 2020)

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Feasibility Study for establishing a ICT Innovation hub and Excellence Centre in Cahul (October 2019 – January 2020) Agenda Feasibility Study project: scope & activities The region of Cahul and the South-West of Moldova: the economy , demographics and IT sector ICT education in Cahul and on the South-West of Moldova: strengths and weaknesses Opportunities for the development of regional ICT Excellence Centre in Cahul Suggested physical location of ICT Excellence Centre in Cahul Feasibility Study project: the scope regional economy and demographics on the South-West IT industry in Moldova and on the South-West of the country general secondary and ICT education in Cahul and in Moldova regional demand for Tekwill services, opportunities in the region physical infrastructure for ICT Excellence Centres in Cahul stakeholders and partners for ICT Excellence Centres in Cahul Feasibility Study project: the activities The ICT industry 9 research interviews with C-level executives of IT companies in Chisinau 2 research interviews with C-level executives of IT companies in Cahul analysis of statistics and media publications The Education 2 research interviews with the university / college managers in Cahul 2 polls and 4 focus groups with the students and professors in Cahul analysis of statistics and media publications The Region 2 research interviews with the executives at local authorities in Cahul analysis of economic and demographic statistics and media publications 2 interviews with the managers of Business Incubator in Cahul and CCI Tekwill / ATIC 4 research interviews with project managers analysis of reports and policy papers Physical site inspection of 8 sites for construction of ICT Excellence Centre in Cahul assessment of engineering infrastructure at the most promising sites analysis of data available at Cadaster The regional economy, demographics and the development of IT sector on the South-West The demographical situation on the South-West of Moldova Estimated actual population of administrative districts and the main towns in the South-West region of Moldova (‘000), 2019 Nominal population in the region is 342,000 94.2 people Estimated actual population is 257,000 46.7 45.1 39.8 Depopulation remains one of the key threats to 32.9 30.0 the economic development in the region 14.9 12.0 7.4 3.5 Cahul Cantemir Cimislia Leova Taraclia Cahul Taraclia Cimislia Leova Cantemir (district) (district) (district) (district) (district) (town) (town) (town) (town) (town) Total number of active groups of people in the districts of the South-West region of Moldova, 2019 Kids and children Students at College University Employed at secondary professional students students people schools schools Moldova 333,144 14,673 28,891 56,840 739,400 Districts on the South-West 28,561 1,310 1,507 2,400 44,125 (including Cahul) Cahul (district) 11,105 733 1,507 2,200 19,923 Cantemir (district) 5,362 - - - 6,412 Cimislia (district) 4,247 144 - - 6,677 Leova (district) 4,438 286 - - 5,158 Taraclia (district) 3,509 147 - 200 5,955 Source: National Bureau of Statistics of the Republic of Moldova, 2019 The economic development of the South-West of Moldova Agriculture and food processing remains the backbone of the economy on the South-West There are three textile factories and electrical cable factory build by Draxlmaier in Cahul Average per capita monthly income of households in Chisinau was MDL 3,207 (€165) vs. MDL 2,022 €104) on South-West The share of the main sources of households' income in Chisinau and on the South-West of Moldova, 2018 Promising projects: 64.4% rehabilitation of railway line Chisinau- Giurgiulesti by 2022 33.3% 26.5% 21.5% 19.2% planned €32 investments of Free Port 13.2% 11.0% Giurgiulesti residents in 2020-2022 4.9% 5.5% 0.3% industrial investments attracted by free Salaries Incomes from Incomes from Social payments Other incomes economic zone Balti (subsidiary in Cahul) agricultural entrepreneurship including transfers production from abroad 5-year EU Focal Regions programme - Chisinau South-West of Moldova €22.5m investments in Cahul and Ungheni Source: National Bureau of Statistics of the Republic of Moldova, 2019 IT industry on the South-West and in the regions of Moldova IT companies in the regions of Moldova, December 2019 Indicator Moldova Balti Cahul Comrat & North & South-West (UTA Gagauzia) Number of registered IT companies Approx. 26 6 8 650 including active IT companies Approx. 15 2 2 600 including virtual IT park residents 531 4 1 4 Estimated total sales revenues in 2019 MDL 3,760 / $ 215 MDL 31.1 / $1.78 MDL 3.0 / $0.18 MDL 2.2 / $0.13 (MDL m / $ m) Estimated number of IT employees in 9,140 188 16 12 December 2019 Source: ACETI, InfoDebit, FIDD, 2019 ICT education in Cahul and in Moldova General secondary and ICT education on the South-West: key numbers The number of secondary school graduates and enrolees in university and college ICT programmes on the South-West and in Moldova, 2019 30,087 3,787 2,285 1,128 191 854 59 14 279 14 Gymnasium last year Lyceum real profile College IT orogramme University IT programme University IT programme students graduates enrolees enrolees (bachelor) enrolees (master) Moldova South-West region Source: Ministry of Education, Culture and Research, National Bureau of Statistics of the Republic of Moldova, FIDD, 2019 We believe Moldova as a country and South-West region are able to have more IT engineers and professionals IT university students in Cahul and Comrat Number of IT study programme enrolees and graduates from the universities in Cahul and Comrat in Moldova, 2015-2019 Enrolees Graduates 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 USCH (Cahul) Bachelor 15 14 13 10 14 19 20 12 6 13 Master 12 18 12 12 14 - 9 10 12 11 Total number 27 32 25 22 28 19 29 22 18 24 CSU (Comrat) Bachelor 9 11 8 - 11 - 8 8 9 11 Master 10 8 - 19 10 10 10 10 8 - Total number 19 19 8 19 21 10 18 18 17 11 Source: FIDD, 2019 Number of ICT enrolees in Moldova, 2017-2019 1,128 985 931 Regional universities form secondary school teachers of mathematics and informatics 242 273 279 2017 2018 2019 Bachelor Masters Source: National Bureau of Statistics of the Republic of Moldova, 2019 IT college students at Iulia Hasdeu College in Cahul Number of enrolees and graduates from IT programmes at Iulia Hasdeu College in Cahul, 2015-2019 60 60 60 60 57 56 50 50 43 40 2015 2016 2017 2018 2019 Enrolees Graduates Source: Ministry of Education, Culture and Research of the Republic of Moldova, FIDD, 2019 The managers of IT companies in Moldova consider college graduates to be generally professionally unprepared to work on the real world projects General secondary education on the South-West and in Moldova The results of BAC exams of the lyceum graduates on South-West, 2019 Total number Number of Grade Grades Grades Grades Grades of Grades of candidates candidates 10 of of of 6.0-6.99 of passed BAC 9.0-9.99 8.0-8.99 7.0-7.99 5.0-5.99 exam Lyceum graduates Cahul 406 374 - 9 45 108 123 89 Cantemir 102 90 - 1 14 30 26 19 Cimislia 115 109 - 6 15 32 32 24 Leova 95 93 - 2 3 26 33 29 Taraclia 124 117 - 1 9 44 44 19 College graduates Iulia Hasdeu college 183 99 - - 5 15 34 45 Source: National Agency for Curriculum and Evaluation, 2019 PISA test results in Moldova, 2018 487 489 489 454 446 455 424 421 428 390 391 399 Urban Rural Average Moldova Average OECD Reading Mathematics Science Source: National Agency for Curriculum and Evaluation, 2019 Robotic classes for children on the South-West and in Moldova Total number of schools and libraries providing robotics classes in Moldova, 2019 47 7 7 8 8 5 6 6 6 5 4 4 3 3 3 4 4 3 4 4 2 2 2 1 1 2 1 1 1 Source: ATIC, 2019 Regional demand for Tekwill services, opportunities in the region Opportunities for the development of ICT Excellence Centre project in Cahul Current capacity of regional companies to absorb IT graduates in Cahul Sufficient The options: growth Cahul - To develop the skills in Cahul for Chisinau-based universities and IT companies - To combine the development of ICT Excellence Modest Centre with the efforts to attract the investments to the region growth Limited capacity High capacity Large Moldovan IT companies were generally sceptical about the opportunities to expand to the region. The managers need to have 40-150 people in the regional office to justify the expansion. Product portfolio and commercial sustainability of ICT Excellence Centre project in Cahul Demand and commercial sustainability of ICT Excellence Centre projects in Cahul Sufficient demand Tekwill Tekwill Academy Academy Kids Rent of conference facilities Co-working Limited space rent demand Office rent Low purchasing power High purchasing power Commercial demand for the services to be offered by ICT Excellence Centre in Cahul is not significant and the project will depend on donor investments at least in the next 5 years ATIC is expected to facilitate the development of other programmes including those in business development, education and maybe even high-tech agriculture to expand Centre’s service portfolio Opportunities for physical location of ICT Excellence Centre in Cahul Recommended location: site of State University in Cahul Recommended size of the premises: 1,400 m2 Estimated investments: € 500-750 / m2 Estimated operational costs: € 6,000 – 8,000 / month Thank you! Please, ask the questions Fondul de Inovatii si Dezvoltare Durabila Address: 86, Gogolia str MD-7401, Taraclia, Moldova Director: Natalia Suditu Tel.: +373 6 0100495 Project leader: Serghei Tcacenco Tel.: +373 6 9212081 .
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