Feasibility study establishing CbC innovation hub in...

Feasibility study

establishing CbC innovation hub in KorÇa

THE EUROPEAN UNION’S CROSS BORDER COOPERATION PROGRAMME

Contents

Introduction .................................................................................................................................................................. 4

Innovation hubs ...........................................................................................................4The stipulation of innovation .................................................................................................................................. 5Innovation “Property” ................................................................................................................................................ 5Innovation and LED – Local Economic Development .................................................................................... 6

Placing innovation ............................................................................................................................................... 8Where is the place of an innovation? ............................................................................................................ 8Implications for research ................................................................................................................................... 9

Policymaker’s role ........................................................................................................................................10Creative/Innovative hubs are unique, its ecosystem dynamic .................................................................10Open Innovation Project ........................................................................................................................................12

Region profile .............................................................................................................13SWOT analysis of the Region of Korça ...............................................................................................................15About the project of Innovation Hub as part of the University “Fan S. Noli”, Korçë ..........................17

Who can benefit from Innovation Hubs? ............................................................................................19Who can use the Innovation Hub centre and its services? ...........................................................19

Generating income from Innovation Hub Services ......................................................................................20Impact and added value of FP participation ............................................................................................20

Scientific impacts ......................................................................................................................................................21Long-term outcomes and impacts ....................................................................................................................25Impacts on innovation ............................................................................................................................................25

Long-term outcomes and impacts...............................................................................................................25Mechanisms for impacts .........................................................................................................................................27

Regional Cooperation ................................................................................................................................27Political Context and Governance .........................................................................................................28Human Resources ........................................................................................................................................28Funding resources .......................................................................................................................................29Research Facilities ........................................................................................................................................29

Drivers/factors behind impacts .....................................................................................................................29Sustainability ........................................................................................................................................................30

Conclusions & Recommendations ..........................................................................31

Annex A. Bibliography ..............................................................................................33Websites ..........................................................................................................................................................34

Project: Feasibility Study for Establishing CBC Innovation Hub in Korça

Layout and design: Ardi Kule (www.ardikule.com)Tirana, 2018

This project is funded by the European Union in the framework of the IPA II Cross-Border Pro-gramme of the Republic of Macedonia-Republic of Albania under the Instrument of Pre-accession Assistance, Allocations for 2014 & 2020.

The Member States of the European Union have decided to link together their know-how, resources and destinies. Together, they have built a zone of stability, democracy and sustain-able development whilst maintaining cultural diversity, tolerance and individual freedoms. The European Union is committed to sharing its achievements and its values with countries and peoples beyond its borders.

The European Commission is the Europeans Union’s executive body.

This Project is implemented by:EuroPartners DevelopmentNational Agency for Scientific Research and InnovationFund for Innovation and Technology DevelopmentNational Centre for Development of Innovation and Entrepreneurial

This publication was produced with the financial support of the European Union. Its contents are the sole responsibility of EuroPartners Develop-ment and do not necessarily reflect the views of the European Union.

abreviations

AIDA Albanian Investment Development Agency

GDP Gross domestic product

GERD Gross expenditure on research & development

GoA Government of Albania

EIB European Investment Bank

EU European Union

FP Framework Program

ICT Information communica-tion technologies

IPA Instrument of Pre-accession

KET Key enabling technologies

LED Local economic development

NASRI National Agency of Scientific Research and Innovation

NGO Non-governmental organization

NSSTI National strategy for science, technology and innovation

RD&I Research, development & innova-tion

R&D Research & development

R&I Research & innovation

RTDI Research, technology development and innovation

SME Small-medium enterprises

STEMCollege and university degree programs in science, technology, engineering and mathematics

S&T Science & technology

VET Vocational education & training

VAT Value added tax

WBC Western Balkan Countries

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Feasibility Study for Establishing CBC Innovation Hub in KorçaFeasibility Study for Establishing CBC Innovation Hub in Korça

This study is one of the component of the activities planned under the project ‘Innova-

tion eco-system in the CBC area (CBC INNOV8) funded by the European Union. The project is part of the Programe IPA Cross Border Coopera-tion Albania –FYROM 2014-2020.

This feasibility study has encompassed the finding form previous studies notably Meta analysis of present innovation status and research on potential innovations in Korca region, which are other project components published under the project website www.cbcinnov8.com.

The concept is broadly supported by developed economies and lately the new EU countries

like Poland, Check Republic, Slovakia, Croatia and Serbia are turning their attention towards Innovation Hubs as the instigator of technologi-cal innovations for small projects; nests for job creation for youngsters; connecting point for HEIs, Businesses and Governments; conveyers of change for professional groups and partners of local governance. Lately, even big corporates like Microsoft, Johnson & Johnson, are supporting the idea of Innovation Hubs as drivers of change and promoters of young professional engage-ment and employability.

Industry relies on Hubs to access excellent technological and entrepreneurial knowledge, as they very often cannot afford the investment and skills needed to operate them even if a public grant is provided. Competence offered in Hubs ensure support on industrial value chains by housing the complex large-scale research.

The establishment of an Innovation Hub var-ies from the development priorities and funding opportunities. They can be aligned to local gov-ernment when the local priorities are set toward specific development of certain industries; within technological or science parks and within HEIs.

Open Society Foundation has financially

Innovation is widely seen as the key to regional and local economic advantage (Barkham, 1992;

Chandra and MacPherson, 1994; MacPherson, 1992; Simmie, 1998; Suarez-Villa, 1991). Every region demonstrates a variable innovative capac-ity which shape in a way its economic destiny: those regions that have developed a competitive advantage (natural & human resources or tech-nology) or have attracted and supported innova-tive capacities will prosper; those that cannot will languish (Amin and Wilkinson, 1999; Helmsing, 2001; Keeble et al, 1999). Empirical studies docu-ment how innovative activities cluster in space and seek to explain why some places are more in-novative than others and how, in turn, economic growth is related to innovative milieu (Feldman, 2000). Probably the most inclusive definition of innovation is that it is ``the creation and exploi-tation of new ideas’’ (Kanter, 2000). These schol-arly definitions of innovation imply quite a broad terms (as they do not mention if the innovations engage technology or markets), economists in Western developed societies usually use the term `innovation’ to mean `technological innovation’ and in their empirical work are more concerned

Since innovation implies scientific knowledge, governments feel the obligation and responsi-

bility to disperse it as the knowledge has “public” properties. Following this logic, the government goes further and finance the innovations. But the transactions go beyond the Social Responsibil-ity of the government for the dissemination of knowledge and the usefulness of the innova-tion. Government – sponsored innovations has been instrumental to the creation of whole new industries and many innovations within exist-ing industries. The Internet and the WEB, both tenets of the information superhighway that gave birth to thousands different companies all over the world grew out of government sponsored research (Afuah, 2003). In financing innovation, governments accomplish education objectives for part of the workforce, spurs private ventures

with manufacturing activities [Nijkamp et al (1997) and a few others include the business services sector too].

In fact, the theoretical concept of innovation has been developed referring to a limited range of economic activity – mostly those associated with use of a certain level of technology) thus exclud-ing other sorts of economic activities, especially in labour intensive sectors or regions where the technology has limited sources to advance. A blunt conclusion will be that those economic sec-tors predominantly populated by men in terms of ownership and employment are the ones that fall comfortably within these dominant definitions of innovation. Current understandings of in-novation reflect, moreover, the concept’s origins in and linkages to a historical context, namely that of the 20th century industrial complex that characterizes OECD countries.

For at least the past decades, technological innovations in the telecommunication, automo-tive and manufacturing sector, have been the driving locomotive of economic development and wealth creation.

Introduction

Innovation hubs

The stipulation of innovation

Innovation “Property”

and technically supported forms of Innovations Hubs in South East Europe. In Albanian this Innovation Hub project is called Ofiçina and is hosted in one leading high school – Technical Institute “Harry Fultz”. This is a strategic initia-tive focused in supporting Albania’s transition to a knowledge-based economy. Its mission is to invest in, incubate, and help develop a new-technology industry in Albania by promoting entrepreneurship; helping early stage high tech start-ups thrive; bringing commercially viable technologies and business to local and global market and last but not least supporting employ-ment of youngsters in a growing ICT industry. Innovation Hubs are responding to the raising demand for digitalization and automatization of the industry (labor market demand) and to the specialization of youngsters graduating with STEM degrees (labor market supply).

Innovation Hubs are stirring the interest of Framework Programs (H2020). Science and Technological parks can rely on an Innovation Hub as a starting point and develop the entire concept around the services offered by the Hub. For small countries with limited capacities for benefiting from a Framework Program on Sci-ence & Technology Park, Innovation Hubs are the entry point to the program.

This feasibility study represent in the first part of it a SWOT analysis on the potentials of establishing a new innovation hub for Korca re-gion. It demonstrated the existing infrastructure, human capitals, academic subject and potentils for the new generation. Whereas the second part of it represent the impacts that tinnovation has for the region and the country at larger extend, the implication for the research, the mechanism to be used for the innovation (such as regional cooperation), drivers behind the impact and some conclusion and recommendations on the research and innovation sector.

to invest in related invention or commercializa-tion activities and last but not least innovation projects can enjoy the economies of scale that come with large innovative projects.

My own research (empirical) of entrepre-neurial ventures in Albania, specifically those emerging from women groups, have raised some questions in front of me to rethink innovation and its perception in geographic and gender con-text. Many of the entrepreneurs I have met in the course of my life, as a development professional, trainer or consultant, particularly but not exclu-sively women, saw their businesses as innovative in the sense that they brought economically vi-able, new ideas to a place and created significant positive change in that place – and above all they created the Margin to take the Risk for starting the venture. In other words, they were capable to

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identify and satisfy an unmet need.However, various scholars and policy mak-

ers (national government or intergovernmental agencies) in who shape local economic develop-ment (LED) policies would exclude these busi-nesses from the category ‘innovative’ because these businesses serve primarily to local markets, or they do not employ a well-defined workforce - in terms of skills/profiles and because they hardly use any new technology.

The broad definitions of innovation like those of Kanter and Feldman can introduce ambiguity such that it becomes difficult to know what is and what is not innovative. Referring to the even broader definition that innovation usually means Change both in the organizational and economic sense any model that seek to un-derstand the phenomenon (cause of Change) is multidisciplinary (Afuah, 2003). Additionally,

innovation entails dealing with new knowledge - collecting information and turning it into new products or services, which are undoubtedly the core activities of many small businesses taking place in rural areas or small towns.

Rethinking innovation in a way requires exploring further 2 variables place and the social identity of the innovator patterns - what can count as innovation and therefore what commands the attention of policymakers. The main aim of several developing professionals and agencies as well as my intention is to take into consideration and give credits to the contribu-tions and transformative roles of a greater range of businesses and business owners. By recogniz-ing these activities as innovations policy makers can go beyond simple acceptance to quick alterations in approaches to local and regional economic development.

The potential of context for revealing in-novation and innovative opportunity can be

related to geography and gender by real life cases. Examples from economic initiatives in Albania and SME studies illustrate how contextualizing innovation geographically and socially makes visible previously unrecognized opportunities for innovation.

Rethinking innovation seems particularly important now, in light of recent changes in gen-der and economic development models. Feldman (2000) and Afuah 2003 notes two dimensions of innovations - product vs. process innovations and incremental vs. radical. Product innovation is the creation of new products, which can be empiri-cally measured through patents or new product presented whereas process innovations concern the ways that businesses understand, organize, or motivate change that will lead, according to Pavitt (2003), “to competitive success”. Following this argument, by their very nature process innova-tions are very difficult to be measured. Incremen-tal innovations concern small improvements or changes, whereas radical innovations create en-tirely new products or categories of products and require new competencies. These competencies

Innovation and LED – Local Economic Development

are usually defined in terms of the labour inputs, and the literature points to the importance of information exchange in facilitating this aspect of innovation (for example, Lawson and Lorenz, 1999; Massey et al, 1992). Process innovations is similarly radical or incremental, but difficulties in identifying process innovations are enlarged when one is trying to determine degree of in-novation. Innovations out of technology driven sectors, although tangled in the definitions of innovation that they use, are not illustrated or discussed. Government and quasi-government agencies concerned with innovation-focused economic development as well focus on techno-logical innovations – neglecting other forms of innovative activity – in their efforts to increase local wealth.

Various scholars have placed particular emphasis on the ways that local knowledge and social networks can enable access to resources within a specific location for those who are perceived to be innovators (for example, Amin, 1999; Amin and Thrift, 1997; Harrison, 1994; MacLeod, 1998; Maillat and Lecoq, 1992; Pamuk, 2000). Places that are `institutionally thick’ sup-posingly have an abundance of resources, and a

distribution system characterized by coordinated and well-defined institutional structures. Thus, local legal framework as well as the co-operation among actors within a particular business com-munity, shape the distribution of capital and information to innovators and from innovators to the market.

In developing societies (but not only) there is no real attempt to understand how innovation happens in the first instance or how the demand for and supply of innovations is studied in its context. In many societies, innovative products and those who create them are without a theo-retical identity. Explaining the relation between commodities and geographic areas Molotch (2002) suggests a way forward by arguing that goods are mirrors of the location in which they are produced. He clarifies through the use of examples that products emerge in particular ways because of the norms, rules, expectations, and facilities that exist in the place. Molotch’s products, however, seem to be developed when and wherever there is an acknowledged demand (market). Molotch does not consider the role of the innovator and his/her position in affecting the occurrence of a particular innovations. Thus, the argument follows that innovations them-selves are not just products of place, but also of the people who are resources (human) identified in that region/place. Innovations occur from the interaction of place and the human factor (iden-tity and social positioning) of the innovation and the innovator. A clever businessman/woman may detect an existing need in the market place, he/she can even incite a need (smartphones versus cell phones) but who perceive a way to satisfy that need (who innovates) affects the abil-ity of that innovation to come into being and this process is place specific. Kanter (2000) compares innovations to flowers and argues that like seeds, innovations must be nurtured carefully in order to thrive. In Kanter’s metaphor, garden conditions are as important as the gardener for flowers to blossom. By extending the metaphor the garden and its design (and by implication the gardener) can assist in determining the value of individual plants. What is harmful to one gardener or in one garden may be considered a hint. Thus, innova-tions do not simply thrive or fail depending on

the resources available within particular contexts as Kanter suggests; it is the value that is attached to (nascent) innovations – value that depends on geographical context – that determines whether an economic activity will be seen as innovative and nurtured accordingly or neglected as useless. In this way, innovations are very much embed-ded in the geography. Lash and Urry (1994) and then Lee (2002) argue that commodities repre-sent as much significance from their symbolic content as from their material content and that this symbolic content is linked to the workings of everyday life and gives rise to what Lee (2002, page 336) refers to as the “materiality of econo-mies’’. Thus the meaning of innovations “make[s] sense in material terms only in the context of circuits of material reproduction’’ (page 336). The context of these circuits includes the spa-tially defined supply-and-demand relationship but also spatially defined social relationships (see also Molotch, 2002). My point is that the sym-bolic and material assumed values for a potential innovation depend on the interchange between place and ways of interactions amongst the inno-vator and the innovation and the location where it happens.

Embracing a notion of innovation that is related and inspired by the location and that does not necessarily highlight technology over all else requires an understanding of economic development and related initiatives that differs from those that currently seek to promote in-novation. Indeed, as a development professional I support LED that seeks to develop people and places more generally, rather than advancing a neoliberal, capitalist development agenda (Gibson-Graham, 1994). The majority of LED approaches have focused on innovation, tradi-tionally understood, as part of their remit to po-sition the local economy advantageously within a global, neoliberal project (for a related discussion see Sheppard, 2002).

Examples include Innovation Hubs and Science Parks designed to create the conditions that existed in Silicon Valley in USA or the Cambridge in UK. The success of these initiatives has been evaluated on their ability to create new fast-growing businesses to expand the competi-tive advantage of and generate a privileged status

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place. I started with a social business that provides Jufka (local form of noodles) in Diber one that produces Olive Paste in Vlore and a handicraft unit producing embroideries in Korce region. In each case the innovator used local knowledge (that is, that a certain product was absent and needed in `that particular place’) to exploit a spatial niche. The first example involves a group of 14 women aged from 30 to 60 years-old man whose expertise in producing Jufka comes from their own kitchen. Oxfam GB assisted them to perceive the market demand for traditional food and accompanied them step by step to concep-tualize their own enterprise. Oxfam assistance consisted in financial and technical support.

In the second example, a group of 10 women aged 27 to 55-years-old that are growing olive trees for oil production in Novosele identified a niche market demand for Olive Paste. The group was assisted from UNDP and a local NGO to develop the idea into an economic initiative. The last example is the group of embroiders and wa-vers of Erseke (Korce region) aiming a forming a social business (trading cooperative) that will reinvent their traditional patterns of embroider-ies and kilims.

Being the first to bring a product or service to a place seems, however, to fit the definitions of innovation mentioned at the outset: “the creation and exploitation of new ideas’’ (Kanter, 2000, page 168) and “the novel application of (not just) economically valuable knowledge’’ (Feldman, 2000, page 373). In each of three examples, the economically valuable knowledge was the entre-preneur’s familiarity with place, which enabled the accomplishment that there was a particular need to be filled ̀ in that place’. All three businesses contribute in important ways to the quality of life in their own locations. Other such innovations include a medicinal and wild teas collection unit in Burrel that sells in wholesaling and retailing markets, a nursery greenhouse for women farm-ers that grow vegetables in Kastriot (Diber) and a technical assistance unit for orchard farmers in Korce and Diber. These businesses all fill some place-specific local need where local may refer to the scale of a city, a neighbourhood and so on. Moreover, these examples are not merely in-novation diffusion, as their innovation involves recognizing the place-specific need in the first

for the regions in which they are located; but not in terms of improved potentials for redistribut-ing wealth or improved social well-being of this specific place. In fact, other approaches to LED have been suggested and implemented though not explicitly linked to innovation. LED ini-tiatives usually tend to meet local needs and the transformative power of these initiatives could be enhanced by the kind of reconsidering in-novation. Specifically, LED efforts would benefit from a perception of innovation process that is sensitive to where the innovation is taking place and who the innovator is. Alternative approaches to LED (those that focus on local well-being broadly construed) are consonant with recent thinking in the urban planning literature on what makes good cities. Although, as Fainstein (1999) notes, some authors emphasize outcomes (the substance of the good city) whereas others emphasize process (the planning and political processes that constitute the good city), all stress the importance of the inclusion of marginalized groups. I hope that the argument about innova-tion contributes to this literature by specifying how the positionality of certain citizens affects their ability to enhance local economic develop-ment and hence to contribute to creating ‘the good places.’ The broader definition of innova-tion supported in this article is embedded within a concept of LED that embraces the needs and contributions of all people.

Placing innovationI had the chance to implement some empirical study while implementing projects on mentoring and coaching some women business owners in Diber region, Vlore and Korce, with particular attention to how gender and geographical loca-tion area influencing a woman’s ability to ac-cess resources for their business. The research involved interviews with 30 women business owners initially supported by Aid developing funds like, Oxfam GB, UNDP, SNV, SDC, other stakeholders like governmental agencies and international donors. I brought the example to this discussion focusing on the intersection of gender and geography in entrepreneurship, with particular attention to how gender shapes the start-up process, location decisions, and the

instance and then developing a solution to that need. In the above examples the business owners are co-local to their customer base.

Many of the business owners contacted highlighted as innovative about their business – the responsiveness to the local market, not to some generic market. Often this comment was followed by certain remarks about the large, chain, ‘big box’ stores, which are seen as catering only to a generic market. These business owners recognize that business interactions are context dependent and in order to increase the value of their product or service and thereby offer something that is unique they must think geographically.

Implications for researchIn order to understand better how innovation contributes to the welfare of places, researchers need to broaden the scope of contexts, economic sectors, and actors that they consider as potential sites and creators of innovation. Research that aims to comprehend the full spectrum of innova-tion should include geographic contexts that are not necessarily characterized by an orientation toward technology. Through a few empirical examples, above, the issue that context locates opportunities for innovation are highlighted. By capitalizing on their geographical and social contexts, some entrepreneurs are able to con-tribute to their communities in various ways currently unacknowledged and unappreciated by the exporters or other stakeholders. These contributions include satisfying genuine needs in the community, offering improved working con-ditions for employees, creating new employment opportunities for marginal groups, developing skills, and generating social cohesion. Because these contributions are extremely important to the economic and social well-being of the regions, and in order to understand the relation-ship between innovation and context, research should seek explicitly to study all or more eco-nomic sectors. Recognizing that innovations can occur in any place and in any economic sector should mean recognizing that innovators come in various forms of personification. Because of gender-based, age-based, and race-based divisions in the labor market, there is a strong

relationship of the business to place. Aldrich and Waldinger (1990) provide a

definition of entrepreneurship as “the combin-ing of resources in novel ways so as to create something of value.’’ New firms and small firms are often considered more innovative than older and larger existing firms (Acs et al, 1999; Aoyama and Teitz, 1996; Barkham et al, 1996; Brown et al, 1990; Siegel, 1990) and the number of new firm start-ups in a place has been used as an indicator of innovative activity (for example, Audretsch and Vivarelli, 1994). Moreover, the use of numbers of start-ups to measure regional or local innovative activity is just one illustration of the frequently made correlations between in-novation and entrepreneurship. The connection between small/new businesses and innovation, is neither strong nor exclusive. Although not all small or new firms are necessarily innovative studies of non-franchised business owners of small and medium-sized firms disclose many of them who combine resources in ‘novel’ ways to meet needs that were unrecognized and the way they are attentive to innovative activity occurring in sectors not typically associated with technol-ogy. The examples of innovative activities imple-mented by women groups appeared primarily in answering to questions about the nature of the business and the contribution that the business owner felt that their business made, if any, to their community – “What do you see as innova-tive about your business?” Qualitative analysis sanctions the complexity of the relationships between context and gender in innovation, an advantage that seems relevant in exploring the re-conceptualized understanding of innovation that was outline above.

Where is the place of an innovation?The most common business advice to the would-be entrepreneur is to identify a need and fill it. The unarticulated part of this aphorism is that most needs are defined spatially (in a specific location); properly revised, the adage should be, `Find a need somewhere and fill it there.’ Innova-tions that provide services or products that are new to `that particular place’ meet particular needs that are defined by the circumstances of a

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Creative/Innovative hubs are unique, its ecosystem dynamic

The rise of co-working spaces is at once a so-cial and economic phenomenon, especially

in the new era of digital start-ups and internet economy. Among the younger generations, spending productive time in co-working spaces has become a new need - and norm. Some gov-ernments believe this development will ease the problem of youth unemployment worldwide.

Various models of such hubs and the hosting organization generates a landscape of creative hubs that is far from homogeneous. Some hubs are built on the principles of independence with a “Do-It-Yourself ” flair. These hubs emphasize the importance of community and collaboration. Meanwhile, at the opposite end of the spectrum we have hubs operating off the back of venture capital funds providing them with more re-sources to invest in buying or renting properties and setting up flashy work spaces.

Venture capital-backed spaces have more

relationship between social context and certain economic sectors of innovation. Women, for example, are more likely to start businesses -and therefore more likely to innovate - in retail and service industries than in other sectors. Research needs to explore the processes that link social identity, geographic context, and innovation in order to appreciate fully how innovation affects places.

Policymaker’s roleBecause research and policy are so closely linked, rethinking innovation has important implications for local and regional economic development policy. Current Local Economic Development practice gives substantial attention to attracting employers from elsewhere rather than to enhancing the innovative potential of resident entrepreneurs, especially those whose innovations would ostensibly serve only the local market (Raco, 2000). In view of recent shifts in economic regimes (for example, the decline in manufacturing and rise in services), the question

is whether this export-oriented focus is really the right way. Prioritizing growth-oriented profits through technology rather than valuing, for example, equity or community well-being means that Local Economic Development policies aimed at attracting and fostering innovation also reinforces divisions within the labour market. These divisions are reinforced through the ways that resources are allocated (Clarke and Newman, 1997; Edwards, 2002). The current perceived as-sociation between innovation and export sales leads to resources being channelled to a few firms in economic sectors where there are high rates of social division in the labour market. The major-ity of organizations that create jobs for workers in a place (for example, non-profit organizations, government, local businesses) are not participat-ing in the pursuit of export profits. Yet dominant Local Economic Development policy approaches overlook these employment-rich economic activities and end up channelling resources away from certain social groups, like women.

advanced business planning. This makes up for their lack of engagement with already established individuals and networks. The differences be-tween capital and community driven co-working spaces are at the source of a potentially growing divide as spaces may become just another silo of “isolated digital entrepreneurs” without real connection to other sectors of the economy. This is where the government can come into play by levelling the playing field.

The Innovation Hubs are strategic initiatives focused in supporting labour intensive sectors or economies towards the transformation into knowledge-based economies. These types of projects achieve the following objectives:

▶ They become laboratories of new ideas & in-ventions for youngsters and others that need to test their idea prior of the commercialisation

▶ They are hubs of information dispersion as the access is free to every member of community

▶ They can generate income through the ideas which can be tested in customised clients before full commercialisation.

The most significant contribution such projects offer for the hosting organisation (uni-versity, corporation or local government) is the entrepreneurship acceleration and job creation. The perceived risk of young entrepreneurs is confronting the market; therefore, the innova-tion hub serves as a mini-environment for test-ing the idea and helping it thrive and the new technologies and business ideas directly impact job creation for youngsters.

Partnerships are eminent for Innovation Hubs as they define the mission of such initia-tives.

Innovation Hubs are generally placed near Local governments or Universities.

The reason of such associations derives from several preconditions of local development. To execute successful large-scale transformations, local governments need to focus on three critical actions that have been shown to produce inclu-sive political policies. First, the local government needs to engage the entire city’s community to create consensus and buy-in around the vision of a modern, innovative city.

In addition to inclusive political policies, a large-scale transformation requires important institutions to generate and sustain innova-tion. Recognizing the emergence of successful technology capitals (e.g., Silicon Valley, Boston, Dresden, Taipei), Tirana Municipality for ex-ample assisted by UN office in Albania, in 2016 set out the campaign Smart City where private and state actors were expected to join forces for attracting and developing ideas and talents.

In other towns like Korce, Elbasan, Vlore the local government offered office space to host start-ups for a period. Additionally, various projects supported from institutional donors or framework programs has strengthened and revi-talized the capabilities of several business leaders. Regional development agencies, Chambers of Commerce, National Employment Service offices and Universities have offered skill development programs, provided new start-ups with expert mentors to help them create technical proposals, financial plans, or marketing strategies. These project hubs also served as accelerators. The local

governments have channelled modest budgets to select and fund innovative companies specifi-cally led by youngsters. These enterprises were offered training and consulting sessions, and the opportunity to present to investors. Along with entities that support enterprises, institutions that support early-stage entrepreneurs are critical for stimulating innovation. Through partnerships with banks and local micro-finance institu-tions, small loans with flexible payment plans to high-potential entrepreneurs were offered. Tirana municipality for example, scored one criteria of rewarding youngsters from vulnerable communities bringing business ideas with wider impact. If an entrepreneur lacks the skills needed to complete a viable business plan, municipality employees and participating NGOs provide sup-port.

While many municipalities, privatized their public utilities, there is a case of Medellin (Capi-tal of Colombia) that converted the Enterprise of Public Utilities into a multinational corporation. The company is wholly owned by the city and is closely linked to the mayor’s office. In fact, the mayor serves as the president of the company and appoints all the board members. This unique structure has allowed EPU to play a strong role in the city’s success and transformation, contrib-uting roughly 30% of its net revenue to the city budget. Yet, the company’s commercial position has not been compromised. In fact, EPU believes that community ownership has strengthened its operations because the city’s inhabitants have become proud of “their” company’s contribu-tions to the city’s economic development and culture and, as a result, are more inclined to buy into its projects. EPU has funded huge projects throughout the city, including the Planetarium, the Botanical Gardens, the Museum of Water, a children’s interactive museum, libraries, urban parks, and the 16,000-hectare Arví Park just out-side the city limits. The CEO, Federico Restrepo Posada, was recently quoted as saying, “We are a company that promotes innovation, develop-ment and entrepreneurship — elements which, combined, contribute to the consolidation of an ecosystem of an innovative city.” To illustrate this point, he stated that EPU allocates up to 0.6% of its annual income to be reinvested in innovation and development strategies.

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Enacting inclusive political policies, building institutions that foster innovation, and attracting the necessary financial capital to drive change are essential for urban transformation of every town/city. Medellin stands tall as an example of how to overhaul perceptions and realities in record time. The Urban Land Institute, a Washington, D.C.-based non-profit that researches land use and real-estate development around the world, summarizes Medellin’s success well, stating that “Few cities have transformed the way that Medel-lin has in the past 20 years…. [The] change in the institutional fabric of the city may be as im-portant as the tangible infrastructure projects…. Medellin’s challenges are still many…. However, through innovation and leadership, Medellin has sowed the seeds of transformation, leading to its recognition as a city with potential for long-lasting success.”

Innovation Hubs in Universities are up-stretched to another level aiming the support of

cross-faculty interdisciplinary strategy themes through internal and external collaboration. Study programs are becoming dynamic to catch up with the fast pace of digitalization of the economy but youngsters are attracted to practical science examples they can put hands on therefore innovation hubs are getting in another wider dimension. They are creating and accelerating innovation partnerships with private and public sector organizations; facilitating and building Technology and Innovation Zone in the heart of main cities with associated full-scale R&D centres; developing and nurturing innovation talent among academic staff, students, alumni, our partner organizations and the wider com-munity; supporting start-ups, spin outs and in-novative SMEs; forming and leveraging national and international networks to support expertise, knowledge and investment; applying the best in-novation practice and policy through Innovation Research Institute.

Open Innovation Project

The ICC (International Chamber of Com-merce) states - Open innovation is the use of

“purposeful inflows and outflows of knowledge to accelerate innovation internally while also expanding the markets for the external use of in-novation” (Chesbrough 2006). Open innovation is not limited to the sources to enhance innova-tion and thus deliver additional value for cus-tomers. Put differently, when relying on an open innovation model, a company does not strive to generate the best ideas entirely by itself. Rather, it seeks to utilize internal and external ideas in an optimal manner, to be more effective at manag-ing cost and risk and to accelerate technology development. Sources of knowledge typically include suppliers, research centres, universities, customers, competitors, and companies with complementary offerings (Von Hippel 1988).

Many developed as well as developing country governments have initiated projects to encourage an open innovation culture in their societies as per UN Sustainable Development Goals 2015 – 2030. More specifically Goal 9 aims

The district of Korca with 221,706 inhabitant lies in the Southeastern part of Albania, and

includes the towns of Korça, Bilisht and Maliqi and 27 communes covering and area of 3.530km². The town of Korca is located 181 kilometres from the capital, Tirana. The population of Korca counts 130,531 inhabitants. After the 1990s, the city had a significant population migration towards the capital, Tirana as well as outside Albania. Apart from the Albanian nationality, the population in the city and around is mixed with Vlachs, Slavs and Romanians. Korça is an important transport link connecting with Devoll, Kolonjë and Përmet districts through Pogradec. In Korça passes the national road linking South East Albania with Greece, Thessaloniki, Larisa, etc.

The environmental, ecological, esthetical and economical functions and values of the protected areas are various and of great importance to the overall development of the region. Most of these areas are located along the border with Greece and FYROM and classified as of cross-border significance, because of allowing for movement of species at regional/Balkan level and function-ing as bio-corridors and core habitats.

As most of the Albanian territory, this region has almost a Mediterranean climate. The impact of the Mediterranean climate is strongly present on the territory and hydrography network till the entrance of the fields of Korça and Maliq. The climate of the region has a strong continental influence (this is why Korça is one of the coldest cities in Albania) and because of the location be-ing surrounded by mountains, summer tempera-tures are also high in Korça (city and surround-ing field). This climatic combination makes it a great location for development of different types

for building resilient infrastructure, promoting inclusive and sustainable industrialization and foster innovation in all sectors. Governments aspire to make their businesses more innovation active by increasing investment in R&D; support adoption of Open Innovation methodologies in advanced economic sectors; draw upon compe-tencies and technologies in wider SME network to support in-bound open innovation; foster an open innovation climate in cooperation govern-ment & academia & business; disseminate best practice, understand “What Works”; foster youth employment.

Increased speed of innovation requires col-laboration – across the supply chain and with companies large and small, government, central and local and scientific community.

Why Open Innovation? ▶ Companies can no longer afford to rely on

their own research in a world market place due to cost, pace, risk mitigation, location

▶ Local companies are not being sufficiently innovative because of different starting point to

multinationals or those companies implement-ing the principles of Open Innovation since 2000

▶ With a low GERD Albanian Government has an eminent task to increase funds for invest-ing in R&D in order to improve the competitive-ness of the economy as a whole.

▶ Understanding open innovation practice is still in early stages for different economic actors. Starting from academia and other teaching insti-tutions would be a clever strategy as youngsters are ready to embrace innovation.

Region profile

of tourism during all seasons.The area is rich in terms of biodiversity and

the total protected area (classified based on the Albanian legislation7) constitutes around 15% of the region’s territory. The environmentally protected areas constitute an ecological and social-economic valuable asset for the region. For instance, the Gërmenj national park, located in the southern part of the Korça qark (Kolonjë), is very reach in fauna and has vast stun- ning for-ests; it is very suitable for eco-tourism and hiking trails. The national park of the Prespa lakes is famous for the diversity of terrestrial and aquatic ecosystems, including rare water bird species (for instance the Dalmatian pelican), but constitutes the largest environmentally protected area as well in the country, while hosting rural settlements. This mixture of habitats makes it a very unique tourist destination. The mountainous areas, such as Gramozi, Morava, Dardha, and Tomorri offer opportunities for all-year tourism, from hiking and alpinism to skiing and pilgrimage, though no significant touristic accommodations and facilities are built to match these opportunities and increase access to the area.

The region, has not suffered a development pressures and population has been in constant decline since 2001. This decline is widely attrib-uted to different factors: the rural areas, which constitute a very large portion of the territory, have experienced major decrease due to internal and external migration; external migration has been a key tendency for the population of Korça (both urban and rural), due to the proximity with Greece. It is noticeable that in this Region population movement has different patterns, and this is also reflected in the economic and welfare structure and performance, which is unevenly

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distributed across the regional territory. The ageing index varies from a very low one in the northern part of the region to a very high one in the south. Age dependency is the highest among the other 4 regions of Albania.

The region of Korca is eligible for IPA CBC with Greece and FYROM. Projects selected since 2007 have focused on themes such as: promotion of new and renewable energy sources, eco-tourism destinations, biomass exploitation for energy, health issues, education and technol-ogy, bio tourism for economic development, economic clusters, promotion of Prespa lakes cultural heritage, management of water resources in cross- border areas, cultural and musical tra-ditions in the CBC areas, vocational education, employment of vulnerable groups and ethnic minorities etc. Implementation partners (lead or not) from Albanian side, include not only the regional councils, or key municipalities, but also Government`s institutions (i.e. the Ministry of Economic Development, Tourism, Trade and Entrepreneurship, the Prefectures, etc.), local and regional universities (for instance the university of Korça Fan Noli and the University of Elbasan Alexander Xhuvani), the Orthodox Church of Albania, local/Albanian non-governmental organizations, etc.

The Region is usually ranked as medium for social and economic development (GDP/capita is 355,933 by 2014), with relatively good representation of the urban centres, but quite low in some rural areas. GDP/capita usually stands 30-20% points below the national average in 15 years. The regional GVA has been increasing from 2000 to 2007, and since then has been experiencing several fluctuations (up and down), ranked as 3rd out of the 4 regions for its share to the total GVA (gross value added) formation. The weight of sectors in internal regional GVA is dominated by agriculture with 37.5%, followed by trade, transport and communications. This is due to the high agrarian profile, with 38.7% for Korçë region.

Regarding the new enterprises, the birth rates are below the national average placing Region 3 at the lowest position among the other regions of Albania for 2014. Though the region has a dominance of the agriculture sector, 44% of the active enterprises are focused on trade,

around 39% in services (combined) and 11.3% in industry.

Education is a key aspect of the region in two dimensions: i) the potential for investing further into this sector as a basis for boosting economic growth from other production sectors; ii) in terms of the yet un- derdeveloped social capital, but with good strengthening potential. To date, each qark has a public university, namely the University of Korçë “Fan Noli” specialised in education, tourism and human/nature sciences and University of Elbasan “Alexandër Xhuvani” with 5 faculties, specialised in nature sciences, economics, foreign languages, education, social and human sciences and some medicine speciali-zations. Next to higher education institutions, there are also 6 high schools in Korçë with vari-ous specializations and among others also agri-business and food processing technologies. The profiles taught at the universities are important not only to the regional dynamics and needs, but to the national jobs’ market as well. VET schools, on the other hand, provide a unique opportunity for educating the local and regional workforce on the professions that are key to the overall de-velopment profile of the region, such as tourism, agriculture, food processing industry and related agribusiness.

In the years of Albanian statehood, Korça was distinguished from other towns in terms of economic, cultural and urban development. In the first decades of the twentieth century, Korca became one of the most distinguished cultural, educational and publicist cities and in October 1917, while the Gymnasium of Korca was founded, educating generations of students that contributed in the Albanian history and culture. Today, Korça continues to preserve its traditions by being ranked among the first cities in Albania for its cultural and traditional contribution.

strengths Weaknesses

TerritoryKorça represents a strategic cross border position with Greece and FYROM and good connectivity with capital city.

It has a high quality of natural environment – protected areas, biodiversity and landscapes and a great value of cultural heritage – history, architecture and folklore. Public infrastructure is in place and can support the development of commerce. There are also many actors within the region with well-developed networks and a number of partners, twin towns etc.

Although in the cross-road Infrastructure efforts are focused around the big cities. Like for the rest of the country there is low available funding to cover the building and maintenance of infrastructure There is a fragmented approach on management, supervi-sion, monitoring and promoting the integration of the territory. This is noticed on tourist destinations with poor profile inside and outside the region. Although resourceful the nature is vulnerable and tourists lack access to nature destinations.

Local governmentIt has ensured a high support of the central government and various international donors for the development of the Region which has contributed in successful or-ganization of some cultural and entertainment public activities.

Low engagement of communities in public private partnerships is visible due to lack of information on the proper instruments for the implementation of strategic plans and actions.

Economic contextThe area is in possess of good agricultural land which has a satisfactory rate of exploitation for cultivation and the agricultural products are of good quality The property land demonstrates low property prices com-pared to Tirana or west coast. The region has a good offer in nature, culture and historic tourist destinations included in touristic national and international offers.

There is quite a low level of ICT usage and lack of employment in technological sectors. Individuals, even youngsters have poor knowledge on ICTs compared with other neighbouring countries. This is worsened by poor local IT infrastructure devel-opment with negative results on regional, national and international access. The long distances and long travel times from the centre (Korça) to other towns and villages is elongated due to lack of con-necting roads between some cities of the region, all that contributing in a weak regional profile and underestimated value of culture, cultural heritage and natural realms. There is a visible lack of inte-grated management of tourism and local economic development due to missing regulations, standards, certification, statistics & monitoring of indicators. If dedicated facilities for innovations were in place the various actors would have ensured the involve-ment in LED.

Human capitalHuman recourses relatively young and the public uni-versity offer a good level of education, characterized by high attendance. There are also high schools and developed basic vocational study programmes. The education institutions have developed international contacts within the educational system.

SWOT analysis of the Region of Korça

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opportunities threats

TerritoryKorça is in a good geographic position and good cli-mate conditions and possible interplay between urban centers and the surrounding countryside

Specific information about the appropriate in-struments on energy savings and renewables can lead to sustainable use of energy resources in the region.

Korça region lacks financial and human resources to preserve and maintain natural, cultural and historical heritage. The region demonstrates an unbalanced development of the urban systems, with rapid growth of some urban regions, decline of others. There are distinctive environmental problems from the use of firewood, pollution of wa-ter systems. Energy, road and water infrastructure for some distant communities does not meet the standards and will be at a stagnant status for some time, therefore services expected from population of distant areas can cause the abandonment of the areas.

Local economic contextThe use of innovative techniques in the promotion of natural and cultural attractions and the develop-ment of distinctive tourism and cultural products enable job creation for youngsters and improves the competitiveness of the local economy. This combined with stimulation of creativity, entrepreneurship and innovation capabilities increases the attractiveness for foreign investors or donors.

The use of technology in manufacturing, food-processing, tourism, environment, energy and creative industries generate more incomes and improves hu-man capacities as well as local productivity

There is immense potential for cross-border in-teraction with neighbor countries towards sustainable interregional development.Central government effort and local development (schools and university will enable the capacity build-ing in public sector.

Success stories in some sectors with a direct impact on economic growth of the region such as agro-processing, tourism, manufacturing, cultural and creative industries trigger the interest of the entire population and create job posts.

Innovation can accelerate development potential of small local enterprises, stimulate production based on indigenous natural resources and at the same time fulfill the increasing demand for ecologic products from local population and tourists.

Improving the role of universities by encouraging their function as a motor for growth and innovation of economic sector and by engaging youngsters the knowledge is interchangeable and profitable in the social aspect as well.

There will always an unequal development of areas and economic sector due to the small and limited local market which will lead in low professional mobility and lack of interest in technology.

Local Government has modest strategies to adjust to the fast-changing environment – strate-gies are not proactive as they are supposed to be.

Unsustainable development is hard to be substituted by integrated, modern, cross-sector approach by all economic and political actors in the region due to extensive focus on short-term benefits.

Limited Market knowledge and reluctance towards venturing with technological investments leaves most of local business operating in stagnant local markets. Migration towards the capital and most importantly the Brain drain phenomena to other countries as well migration of skilled workers combined with depopulation of the rural areas and ageing of population will impact the social strata of the population therefore the economic and social context of the region.

On the 15th of June 1971, based on the deci-sion of the Council of Ministers was founded

the Higher Agricultural Institute of Korça which was transformed on January 7th , 1992 based on Council of Ministers No. 5 into the University “ Fan S. Noli”. This university counts around 7,000 students and offers these study programs in Bachelor cycle:

▶ Faculty of Natural and Human Sciences: Philosophy - Sociology; Mathematics - Physics; Mathematics - Informatics; Biology - Chemistry; Information Technology; General Nurse; Nurse - midwife; Administration and Social Politics

▶ Faculty of Education and Philology: Alba-nian Language-Literature; English Language; French Language & Literature; History & Geog-raphy; Primary Education (Grade I-VI); Teach-ers for Pre-School

▶ Faculty of Economics: Business Administra-tion in Marketing; Business Administration in Tourism; Finance – Accounting; Management

▶ Faculty of Agriculture: Agro-nutrition; Ag-ribusiness; Plant Medicine and Horticulture; Agronomy Engineers

Including an Innovation Hub in the Uni-versity will enable the students to thrive in their creativity for business and/or technology. The project will make the study programs more dynamic as will combine theoretical knowledge and information they get with practical science

About the project of Innovation Hub as part of the University “Fan S. Noli”, Korçë

examples. The project incites the recreational potential of students, introduce commercially stable technologies and business models, engage local and international partners; bring the sci-ence to the level of community (students and their mentors) and hopefully attract the attention of venture capital or any individual investor to commercialise any of the inventions or busi-nesses initiated in the Hub.

Based on the preliminary meetings with staff of the University “ Fan Noli in Korca”, it was evaluated as most suitable two classroom spaces at the University premises. The following are photos depicted from these locations.

Partnership is the key to success for such projects as the success is measured while the results of students work reach the market.

▶ One important partner is the local busi-nesses. The RDA–Regional Development Agen-cy of Korca is implementing an Interreg project SMEINNOBOOST for “Increasing the Innova-tive Capacities of SME in the region of Korca”. The project aims to boost transnational inno-vation capacity of SMEs and support them to make sustainable network formations, includ-ing innovation clusters with other SMEs from the Balkan region to share know how and de-velop innovations, through bringing together triple helix partners and equipping SMEs with relevant data, tools and systems. These types of

The university of Korça

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cross-border projects will decrease innovations gap between EU and non-EU member countries by supporting know-how transfer and breaking the asymmetry of data, tools and systems of high quality and relevance for boosting SME innova-tion capacity. Korca is ranked fifth in the national statistics of enterprises with 50+ employees1 and chances for these companies to focus on innova-tion are higher than family business or artisans that are more reluctant to invest for technology or innovative business models. The business en-vironment is improving in regard to starting it, taking permits getting loans but worsen in case of taxes and insolvency. Start-ups are having a special status and less import duties while buying components of high-tech or IT so the trend is go-ing in that direction.

▶ Local Government is the other key partner for the project. The Municipality of Korce is im-plementing a project – Creative Hub where pow-erful, ambitious and creative young people are invited to become part of bringing the citizen’s perspective. Through information technology and fieldwork, the Creative Unit will bring in-novative ideas that will be transformed into new services and will modernize the current services. The cooperation may and should result fruitful following the example of many European cities that have upstretched such projects to a higher

1 Active enterprises by municipality and size (INSTAT 2017)

level. Cooperation will ensure inclusive political policies, the built of institutions that foster in-novation, and more importantly for the actual circumstances, attract the necessary financial capital to drive change in the town of Korce. The change in the institutional context of the city may be as important as the tangible infrastructure projects that this cooperation may produce.

▶ Community organizations, NGOs support-ing heterogeneous societies in unfolding their values and outstanding leaders and innovators are also imperative partners as they foster an agile, open, and collaborative environment. This partnership is open and not so well structured as the other two partnerships, but it generates the most of ideas and interact with the society as a whole.

▶ Private Education Institutions with sustain-able academic activities and budgets and guar-antees can become partners and institutional do-nors for Innovation Hubs. As mentioned earlier in the research, and as the Law of higher educa-tion implies, the modern universities develop cross faculty study programs as a reaction to the labour market demands and modernised indus-try.

The mission of the Innovation Hub is always a strategic initiative that is focused in supporting economic transition of a region to a knowledge-based economy. Its mission is to invest in, incubate and help develop a new-technology sector and it tends to help young entrepreneurs thrive bringing commercially viable technologies and business in local and global market while contributing directly to job creation for young people.

Innovation Hub mission goes beyond the transformation of a region’s economy as it enhances networks with state of the art start-ups worldwide as well as organize an array of programs and events for new entrepreneurs. Network members can benefit from trainings and know-how from the most successful Innova-tion Hubs or start-ups.

Innovation Hubs set up objectives for: a) promoting entrepreneurship; b) Helping early stage start-ups thrive; c) bringing commercially viable technologies and businesses into local and global market; d) supporting employment of youngsters in a growing ICT industry.

The Albanian context of ICT seems to be a colourful puzzle as it comprises companies of 250+ employee as well as very small businesses which fall under the category of micro busi-nesses. ICT sector is relatively new and there are still difficulties in the diffusion of ICT products and services among Albanian companies, espe-cially among the smaller ones which demand is relatively low. For most of SMEs in Albania, ICT products available in the market are considered too complex and expensive.

During 2017 the number of active ICT com-panies was 2,927 out of which only 41 companies employ 50+ people. Concluding on the above, an Innovation Hub can contribute to enhance the features and improve the know-how of ICT companies. The Innovation Hub will disseminate knowledge and facilitate networking for the ICT companies, will orient them towards market-able projects like initiating start-ups in the CCI (Customer to Customer Interaction) Tourism; penetrating new markets (EU and Asian) with outsourcing and best practice models; introduc-ing new products and services for HighTech cutting-edge Tourism and so on. Innovation Hubs can serve as a focal point for those start-ups or existing businesses that have an interest in technological parks that can be financially supported more easily if innovation and knowl-edge dissemination is one of their long-term objectives. Collaborative approach with EEN or existing incubators/techparks and the local busi-ness sector with experience in technology shall be a great push towards the product finalization and entering the market. Project like iTurist are examples of which after overcoming techno-logical challenges requires a solid follow-up in building partnership with major companies in Electronic, ICT, Telecommunication, from the EU/US/Asia and so on, since it involves HW/SW development or reuse.

Who can benefit from innovation hubs?The first beneficiary group of Innovation Hub are ICT based Start-ups – they can be new companies; spin offs from an existing business focusing on ICT products; or teams (two people minimum) with a commercially valid innovative business idea; a product or service. By setting up advanced criteria the admission and start-ups will be highly competitive therefore elevating

the input and outputs of the system. The Innova-tion Hub program is for people with a business mindset who prefer team work, who aim to enter global market and who are looking for networking, professional business advices and an energetic working environment. Although such criteria require lots of investments and raise the entry level for start-ups, it will significantly improve the texture of the economy and increase some indicators of doing business like competi-tiveness of the economy, productivity, and so on.

Who can use the innovation hub centre and its services?ICT freelancer experts and young professionals; Project teams made up of university students and post graduates working on ICT projects; Gradu-ates and post graduates from ICT Business and marketing disciplines; Community that want to use common facilities of such centre.

ICT communities and professionals can use the Innovation Hub indoor and outdoor spaces and facilities for their events, meetings, training, interactive presentations, whereas Universities can team up with Innovation Hub for research, for student projects and Business can approach the Innovation Hubs when they are looking for new products, or when seeking to outsource services, when they are looking for placements of their apprentices or when they are interested to invest in start-ups.

Facilities within the university buildingFacilities within the university building

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Generating income from Innovation Hub Services Scientific impacts

Renting the working environment - The Innovation Hub creates a vibrant working

environment that includes co-working space with smart interior and modern office and meet-ings infrastructure, and also a series of indoor and outdoor facilities and recreational areas. The co-working space can offer office desks set up and ready to use, office working equipment like PC or laptops, broadband internet, printing, photocopying and teleconference facilities and dedicated areas for project teams with all the facilities; a fully equipped large conference and exhibition space as well as meeting and train-ing rooms, teleconference studio, and lounges. Broadband internet across the building and in the outdoor recreational areas are part of the working equipment.

Offering Business advisory and support ser-vices - Innovation Hub usually offer fiscal & legal advice, secretarial and/or receptionist services to start-ups upon request, trainings, networking and event organisations.

Business Coaching - Innovation Hubs invite experts to assist and train clients. Trend Hunter for example is an Innovation Hub in Canada that assists more than 500 well-known brands, and some of the most powerful innovators find better ideas faster and commercialise them. we help make change happen when change is hard. In ad-dition to our workshop programs, our Dedicated Advisors facilitate change with 24-hour rapid turnaround of custom idea-filled trend reports to help iconic brands scope new markets and out-innovate their competitors. ’ needs includ-ing provided through coaching, one-on-one assistance, training or through facilitation of meetings and group activities.

Products - Innovation Hub close to a Uni-versity can be a successful Game House where youngsters are eager and interested at creating games for Mobile Applications, especially offer-ing marketing service for different companies through mobile interactive gaming. A market niche that students of different majors can cooperate are i -Tourism project like 3D Tours. Albania is a rising star in the tourism market where the number of visitors and tourists has

recently increased, and such products will be of a great interest. Bicycles that produce clean energy are fun to be developed in an Innovation Hub. Students studying in engineering programs of professional high schools are capable to assemble drones that can be used for capturing videos or images in real time to a country or territory or specified person. Various Apps (bus time table, first aid App, Air pollution/cleanness App, etc., can be developed and sold to industry as well as to government institutions (local government) in order to create income for the centre.

Impact and added value of FP participationThe two main factors that present challenges for funding of innovation policy in Albania are the limited share of GDP dedicated to R&D and innovation in the country - only 0.6% the GDP and the constrained innovation creation and ab-sorption capacity, which results in part from the fact that the country has tended to purchase in-novations on the market rather than developing them domestically. However, it is positive that some steps to build up human capital have been taken, mainly through ‘increasing the resources of the Fund for Excellence and extending the Brain Gain programme in cooperation with the UNDP’.

Overall, the international progress reports find that further capacity-building and invest-ment in research are still required to ensure integration into the European Research Area and contributing to the Innovation Union. Moreover, ‘efforts should be made to improve the integra-tion of the R&D and innovation system through explicit programmes to increase official and citizen understanding of the linkages between re-search, development, and innovation across key stakeholders.1 Lastly, increased efforts leading to successful participation in the current Horizon 2020 will also be necessary.

1 World Bank Technical Assistance Project (P123211): Western Balkans Regional R&D Strategy For Innovation,’ World Bank Country Paper Series - Albania, October 2013, available at: http://www.worldbank.org/content/dam/World-bank/document/eca/Western-Balkans-R&D-Albania.pdf

Albanian FP6 and FP7 projects have en-hanced the knowledge economy through

the generation of new knowledge and scientific advancement. The impact was at a medium level especially in the academic papers and journals published. Despite the progress over the 2000s, the average normalised number of citations per document for countries in the Western Balkans (0.67) in 2003–10 was less than the world average (1) and about half the EU-27 average (1.27).

Albania has a relatively small volume of sci-entific publications; however its publications are of high-quality relative to the rest of the region. With 4.03 cites per document, it was the leader in the Western Balkans in the 2003–10 period. Ser-bia holds the highest normalized impact average for the period (0.74), followed by Albania (0.72).

The Level of science-in-society engagement is low as are SME innovations, and applications by private enterprises, either in FP6, FP7 or H2020, is low compared to universities and other research institutions.

The development and utilisation of new and innovative methodologies, equipment, techniques, technologies, and cross-disciplinary approaches has achieved moderate impact in the Albanian society and its economic perfor-

mance. This can be attributed to the long-term programme (several projects) that was initiated under FP6 on research studies on the garment industry in Albania. This has operated since 1995 and has prompted academic output in terms of papers, journals and books published, the introduction of a new degree in the Polytechnic University, increased levels of collaboration, ap-plications in the garment industry (the fashion industry has been standardised and has become Albania’s leading export sector) and increased levels of international collaboration involving jointly applying for Framework Programme funds.

Regarding developing expertise and knowl-edge in new or diminishing disciplines or multi-disciplinary areas, there are two projects where Albanian entities were involved RACWEB (Risk Assessment for Customs in Western Balkans) and ELLECTRA-WEB (European Electronic Public Procurement Application Framework in the Western Balkan Region). These demonstrated a high impact as they initiated new measures and policies for the Custom Management and Public Procurement Management. The level of science-in-society engagement was high as well, since all stakeholders had to improve their capacities

Figure 4.1. Scientific Output Paper produced per 10,000 population in Western Balkans, adjusted for Quality 2003-2010

Source: SCIMAGO Research Group 2012; World Development Indicators

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and create new competences for compiling with the new procedures and regulations. No data are available on the proportion of scientific articles published in cross-disciplinary journals.

There is visible progress with ICT knowledge and expertise, due to the expansion of the tel-ecommunications market and the development of e-government, which are considered to be ‘two main recurring features of the reform of this sector.1 As such, progress has been seen in recent years towards an e-government programme, together with the establishment of the National Agency for the Information Society (NSTI), and the development of its strategy, and the intro-duction of online communication systems in a variety of public institutions that has expanded the GovNet’s network to include over 65 public institutions in total. A series of electronic systems have been set up and are considered achieve-ments too.2

1 Progress Report of NSDI 2010 – 2012, Department of Strategies and Donor Coordination, Available at www.dsdc.gov.al2 (i) the electronic registration system of the judicial status of citizens of the Ministry of Justice (SEMD), (ii) the electronic publication of the Official Gazette and of the new legislation, (iii) the electronic service for the declaration of the judicial status, (iv) the electronic cabinet system (e_Cabinet); (v) the new platform for the e-management of the official acts (e_Akte) incorporating a system with more than 1500 users from all ministries; (vi) the modernisation of the Social Insurance System improving the record-keeping and the

Tempus and then Erasmus have had a high impact on delivering and training highly-skilled researchers. From 1992 to 2012, Tempus has played a vital role in bringing the academic community into the European network of higher education institutions, mainly by sup-porting retraining and upgrading of academic staff (70%-80% of academic staff have retrained abroad through Tempus). Tempus has also been instrumental in supporting the reform along the lines of the Bologna process and the develop-

operation of the system; (vii) the pensions system has been computerised; (viii) the historical contribution data from employed people and the automated calculation of the new benefits and payment of benefits has been digitalised (until end of 2012, over 184 thousand beneficiaries are included in the system); (ix) on rural development, the improvement of the system for transfer of technology and innovation through extension services as a contribution to a better organisation of the value chains from the farm to the consumer; (x) on immovable properties, there is progress on intensified digitalisation of graphic and numeric data (digitalisation was completed for 147,415 properties end of 2012); (xi) the Public Procurement Commission established in March 2010 handles complaints independently in the field of procurement, concessions and public auctions; (xii) gradual digitalization of state graduation exams (Matura) aims to reduce corruption in the education system; (xiii) an electronic system “Police Case Management and statistical analysis system by digital maps” is being developed since 2012, aiming to increase the number of violations which were previously unreported. This system will be extended to all State Police structures by 2015. Developments on the ICT field would affect transparency issues and increase public trust on public institutions.

Figure 4.2. Quality and Quantity of Scientific Output in the Western Balkan and Comparator Countries 2003-2010

Figure 3. Higher Education data (private) 2018

Missing

Source: SCIMAGO Research Group 2012; World Development Indicators

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ment of the capacity of universities to upgrade institutional management.

Study programmes covering the fields of agriculture, environmental sciences, geology, engineering, natural sciences, nursing, tourism and leisure and cultural heritage have been updated since 2000. Lifelong learning courses have been developed in the fields of civil society, environmental policy, transport policy, public administration reform, public health, justice and teacher training. Information management systems, institutional evaluation, continuing education and the development of university strategic plans have also been supported through Tempus.1

Regarding the societal impact of the FP, like the impact on improving social welfare, social cohesion and/or national security & contribution toward environmental sustainability and protec-tion it is considered high, since many projects are also supported under the IPA programme for the approximation of legislation, rules and regulations for governing various aspect of sci-ence and education to those of the EU, increased cross-border cooperation and cultural exchange, local initiative support for new employment op-portunities, research and policy development for labour force mobility in the region and border monitoring for increasing security, etc.

Undeniably the 7th Framework Programme, IPA 2007-2013 and IPA II 20014-2020 and more recently H2020 have had a high impact on increasing public awareness and understanding of economic and societal issues and have rein-forced each other. The evidence shows a greater engagement of civil society organisations, a diversification of thematic and social networks and increasing attention to the regional and international context. Out of 114 applications for the first round of H2020, 43 were under the Societal Challenges pillar.

There has been some advance (low impact) made in formalising Research Networks and R&I systems. The most significant are:

▶ The National Technology Programme, which aimed to bring together consortia of aca-demic research institutes with the private sector or other public-sector organisations in order to

1 Albania_tempus_country fiche_final

develop a medium-term programme of applied research with a social or economic impact:

▶ Albanian Centres of Excellence in Science (ACES), which are established by an initiative to develop four or five centres of excellence bring-ing together a minimum of 20 researchers from at least two separately affiliated research insti-tutes.2 NASRI in Cooperation with AIDA (the Albanian Investment Development Agency) have organised the Triple Helix competition and prize award for a University supporting business incubators.

2 ERAWATCH Country Reports 2013: Albania

The most pronounced outcome of FP partici-pation is the enhancement of networking –

strengthening cooperation between universities, research institutions within the country, in the region and internationally. University manage-ment bodies were supportive of their research staff by showing flexibility in allocating extended time to researchers. On the other hand, the researchers were very interested in being part of international networks as their academic credentials improved and their knowledge was consolidated in the respective fields.

gross enrolment ratio in % over the country population by level of

education

Country Tertiary - 5+6

Albania 67

Bulgaria 63

Belgium 71

Hungary 60

Montenegro ..

Greece 117

Israel 68

Austria 72

France 58

Germany 62

Italy 62

Netherlands 77

Sweden 70

Switzerland 56

Turkey 69Great Britain and Northern Ireland 62

United States of America 94

Source: INSTAT 2014

Long-term outcomes and impacts

Impacts on innovation

Another significant outcome of the latest participations in FPs has been the engagement of civil society organisations and local governments which are new entities with a short history in the Albanian context.

Marie Sklodowska-Curie Actions, Tempus, Copernicus and Erasmus have significantly contributed to the training of new scientists and researchers in Albania as the support from the fund of excellence (state budget) has been insignificant.

There has been an increased utilisation in Al-bania of new and innovative methodologies,

equipment, techniques, and technologies - for the garment industry, in particular. This can be attributed to the long-term programme (several projects), initiated during FP6, of research studies on the garment industry in Albania. This contin-ued with FP7, supported by several regional pro-jects with a special focus on SME development like COSME.1 It achieved a number of practical implementation in the garment industry (the fashion industry is now more standardised with world apparel industry and is Albania’s leading export sector).

Long-term outcomes and impactsThe establishment of networks was the main outcome of FP participation. The FPs led to strengthened cooperation between universities and research institutions within the country, in the region and internationally as it is demon-strated by being a partner in the winning consor-tiums under the FPs and Horizon2020. Innova-tion was initiated in universities or scientific/research agencies and implemented in industry

1 Competitiveness of Enterprises and Small and Medium-sized Enterprises (SMEs) that runs from 2014 to 2020 with a planned budget of €2.3bn. COSME will support: better access to finance for SMEs; access to markets for SMEs; entrepreneurship; more favourable conditions for business creation and growth

(notably the garment industry) or in the public administration. This included the e-government programme, expanding the GovNet’s, the elec-tronic registration system of the judicial status of citizens of the Ministry of Justice (SEMD), the electronic publication of the Official Gazette and of the new legislation, the electronic service for the declaration of judicial status, the electronic cabinet system (e_Cabinet), the new platform for the e-management of the official acts (e_Akte), the modernisation of the Social Insurance Sys-tem improving the record-keeping and the op-eration of the system, the computerised pensions system, digitised employment contribution data, digitisation of graphic and numeric data on im-movable properties, gradual digitisation of state graduation exams (Matura) and the electronic system “Police Case Management and statistical analysis system by digital maps.”

The following are the winning Horizon2020 projects from Albanian applicants.2

▶ Polythecnic University of Tirana - VRE for regional Interdisciplinary communities in South-east Europe and the Eastern Mediterranean

▶ Research Centre For Antropologhy and History - Closing the Gap between Formal and Informal Institutions in the Balkans

▶ Telecommunication and Computer Net-

2 NASRI - HORIZON 2020 report (in Albanian) for 2014-2015

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working - TNC Limited - Traffic Safety Cultures and the Safe Systems Approach – Towards a Cul-tural Change Research and Innovation Agenda for Road Safety

▶ Co-Plan Institute for Development and Habitat - Traffic Safety Cultures and the Safe Systems Approach – Towards a Cultural Change Research and Innovation Agenda for Road Safety

▶ Polis University - Traffic Safety Cultures and the Safe Systems Approach – Towards a Cultural Change Research and Innovation Agenda for Road Safety

▶ Institute of Nature Conservation in Alba-nia - INCA - Coordinating and integrating state-of-the-art Earth Observation Activities in the re-gions of North Africa, Middle East, and Balkans and Developing Links with GEO related initia-tives towards GEOSS

▶ Agency for Research of Technology and In-novation - Making European research careers more attractive by developing new services and enhancing the current services of the EURAXESS network – EURAXESS TOPIII

The project that aims to bring about a Cul-tural Change Research and Innovation Agenda for Road Safety, implemented by three partners has the most likelihood of bringing change - at a policy level (laws and regulations about traffic and transportation), in the cultural and behavio-ral patterns in the population and in innovation in the controlling and monitoring system.

Socioeconomic impacts - Most of the Alba-nian R&D performance is concentrated in the centres and institutes under the control of the Ministries, public research institutes/centres, and education institutions which together account for about 97% of R&D performance. In contrast, private sector R&D is marginal. The centralised approach that results brings most of the re-searchers (including younger people following their extended post-graduation studies) and those businesses that are technology based to the capital, Tirana, since the right infrastructure is offered there to support such developments. The government that took office on September 2013 closed some of the university branches opened recently in a few remote towns for the purpose of initiating some innovation in businesses outside of Tirana. The closures were made on the grounds

of Education Reform without considering the side effect on the business environment and the internal migration of young people interested in science or further education.

Additional to that, the research institutions and universities in Tirana, are being used by young researchers to advance in their scientific career by getting scholarships or financial sup-port to continue their studies abroad and not returning in country.

The interest and curiosity for science is shaped earlier in life – before reaching university. In Albania universities are becoming part of the strategies for scientific research and benefiting from research infrastructure programmes where-as secondary education institutes are sporadically benefiting from in-country donors or bilateral short-term projects that equip high schools with modest scientific laboratories (mainly in Tirana). Such interrupted development creates a gap for skilled labourers (operators) that would other-wise be the driving force for small businesses all over the country. In general, the spill-over effects of scientific research is missing in demographic and geographic terms.

Generally, the quality of the science system is considered higher than the level of the economy would suggest. One reason may be the sufficient supply of human capital, which exists despite the severe brain drain problems. Another reason is the dominant business format in the Albanian economy – small and labour-intensive firms with an undefined division of labour.

Innovation Hubs accommodated also in HEIs and colleges not only will disperse the knowledge and incite the interest of youngsters to get engaged in scientific projects and inven-tions that can be easily transferred to industry. Innovation Hubs can become the right conveyers of the idea to the right people to initiate the pro-cess of negotiating the sale of the idea/project/product/ start-up. Innovation Hubs offer train-ing to students but not only. These structures can generate incomes for HEIs by offering various services (training included) for new technolo-gies, improved productivity, cost saving, and new products and services provided to the public. On the other hand, SME do not have sufficient human capacities and premises to exercise inven-

tions therefore the cooperation with HEIs will be stipulated. More about the Innovation Hub will be provided on point 5.

▶ Economic impacts. The Framework Pro-grammes have not yet had a major impact in the sense of contributing towards wealth creation and economic prosperity in Albania. The pro-jects won were granted to public research insti-tutes and universities for building human capital and research infrastructure. The projects did not create any high-skilled employment opportuni-ties nor increase the wealth of any knowledge-intense sectors.

▶ The commercialisation and exploitation of scientific knowledge, leading to the creation of new spin-out out companies, processes, products and services has been limited, except in the gar-ment industry, as explained above. In this case there has been a positive effect on the balance of payments.

The other impact has been on the public services, where modern systems have been introduced. This is thought to be an essential pre-requisite for future development. The level of science-in-society engagement was high as well for all the stakeholders involved, since they had to improve their own capacities and create new competences to comply with the new procedures and regulations.

▶ Social impacts. Framework Programme 7 and H2020 have had a high impact public aware-ness and understanding of economic and societal issues. There has been a greater engagement of civil society organisations, a diversification of

thematic actions and social networks have been getting more attention in the regional and inter-national context. Out of 114 applications for the first round of H2020 43 were under the category of Societal Challenges.

▶ Environmental impacts. Albanian research institutions like the Polytechnic University, Uni-versity of Tirana, INCA – Institute of Natural Conservation In Albania and REC – the Re-gional Environmental Centre have implemented regional projects as network members that have increased their capacities and their research in-frastructure relating to renewable energy, envi-ronmental risk for radioactively contaminated industrial tailings, environmental guidelines, management and remediation of hazardous in-dustrial waste.

▶ Regional/community impacts. Albania does not have a well - defined regional policy and, given its size, the main differences in the country in terms of economic and social devel-opment are between the capital, Tirana, and the rest of the country.

As a non-EU Member State, of course, Alba-nia does not receive support under the European Structural and Investment Funds, although it does receive funding from the Instrument for Pre-accession Assistance (IPA), where there is some overlap with the innovation objectives of the FPs. These tend to assist with the process of capacity building that is an important feature of Albania’s current R&I approach, but the nature of the impacts arising have not been determined.

regional CooperationThe Western Balkans Regional R&D Strategy for Innovation aims to strengthen the region’s research capacity, enhance intraregional coop-eration, promote collaboration with business sectors, explore possibilities for financing R&D from EU funding schemes and other external sources, and help integrate the region into the ERA and Innovation Union.

The strategy has been developed through a coordinated effort launched by the Joint State-

Mechanisms for impacts

ment of Sarajevo, signed on April 24, 2009, by ministers from the Western Balkans responsible for science and research, the EU commissioner for Science and Research, and the Czech Repub-lic Presidency of the Council of the European Union, under the auspices of the Regional Coop-eration Council secretary general.

Current levels of international collaboration, which could help leverage the region’s research capacity, are comparatively low, as illustrated by the limited involvement of the Western Bal-

28 29


kans in the ERA. The participation of foreign scientists in local research organisations is also limited, demonstrating the difficulties that face the region in terms of research mobility and in attracting new foreign researchers. Obstacles to regional mobility and mobility from other countries include visas, work permits, taxation, and social benefits.

Political Context and governanceThe policy-making and advisory bodies in Al-bania like the Albanian Parliament, the Council of Ministers; the Council for Scientific Policy and Technological development; the Ministry of Education and Science; Ministry of Innovation and ICT; Council of Higher Education and Sci-ence; Academy of Science of Albania; Rectors’ Conference; Agency for Research, Technol-ogy and Innovation; and other ministries do not significantly impact on R&D policy. The policy formulation is mostly confined to the Ministry of Education and Science supported by NASRI , and advised by interested line agencies and universities, with overall strategic decisions ultimately validated at senior government levels

strategies

Albania

The Cross-cutting “Digital Agenda of Albania 2015-2020”. ongoing Council of Ministers

Draft National Strategy of Sci-ence, Technology and Innovation 2015 – 2020

ongoing Council of Ministers

Business and Investment Devel-opment Strategy 2014-2020 2014

Ministry of Economic Development, Trade and Entrepreneurship

National Strategy for Develop-ment and Integration 2013-2020 2013 Council of Ministers

Business Development and Investments Strategy 2013 – 2020 2013 Ministry of Economy, Trade

and Energy

Regional (Western Balkans)

Regional Strategy for Research & Development for Innovation for Western Balkans

2013(expected)

Inter-governmental, A Regional Cooperation Council Project

Albania Albania – UNDP 2012-2016 2012 UN and Council of Minis-ters*

* ERAWATCH Country Reports 2013: Albania

and overall funding levels apparently negotiated with national finance agencies as part of normal Ministry of Education and Science and agency budget processes. As previously stated, the main policy positions in recent years have been ac-cording to the table below.

human resourcesThe outward migration of large numbers of scientists, engineers, and technicians during the 1990s was one of the dramatic events affecting the research sector in the Western Balkan region. Systematic and comparable data on the scientific diaspora in the Western Balkans is scarce but the brain drain affected the region significantly and is likely to affect generations of young research-ers, compromising their research capacity in the years to come.1 On the positive side, enrolment rates in higher education have increased signifi-cantly in recent years. Tertiary enrolment in the region is above the regression line, suggesting that these countries are performing relatively

1 Available statistics, however, indicate that migrants from the Western Balkans are more educated than the world average emigrant.

well in relation to their level of income. Another positive indicator is that the share of graduates in the fields of engineering and, to some extent, sci-ence is similar to the EU-28 average. A number of top researchers focus on science, with publica-tions in the fields of genetics, nuclear and high energy physics, applied mathematics, chemistry, physics and astronomy, and medicine.

Funding resourcesGross expenditure on R&D in the Western Balkans has declined dramatically in the past two decades. In the same period, other emerging economies, such as China and Turkey, have sys-tematically increased investments in the sector. Current levels are insufficient to have a meaning-ful impact on the current growth model: the region is investing approximately €495 million in R&D per year, about the same as the second-largest U.S. research university in 2011.

The level of R&D investment in the Western Balkans as the actual value of R&D per capita falls below the predicted value, based on a re-gression of R&D per capita on GDP per capita. For example, regression analysis suggests that, based on its level of income, Albania should be spending $41 per person. Even though Croatia spends fifteen times more than Albania, it should be spending 60 % more than its current level of $135. The difference between Croatia and Alba-nia is an illustration of the significant variation of R&D intensity within the region.

research FacilitiesDeclining, unstable R&D funds have caused obsolescence and depreciation of research infra-structure in the Western Balkans over the past decade. Research infrastructure is, in most cases, poorly shared across institutions. Following the substantial EU experience over the past few decades, governments in the Western Balkans have been developing, or planning to develop, “centres of excellence” as a way to pool a critical mass of expertise and resources in selected fields. Albania’s 2010–15 strategy proposes the creation of four or five Centres of Excellence in Science. With the support of UNESCO Venice Office, other networks in South Eastern Europe have been created, including the Southeast European Astronomical Research Network, the Human Genetics and Biotechnology Network, and the

Network for Risk Assessment and Mitigation.

Drivers/factors behind impactsThe research system of 2000 in Albania was dominated by the cooperation between state universities and their European Counterparts established through Tempus project and INCO COPERNICUS. Albania had its science and technology national strategy drafted for the first time on 2009, and the strategic positions devel-oped since then (listed in the previous section) have guided the scientific approach of Universi-ties and other public institutions.Albania like other Western Balkan countries increased its engagement with the Framework Programmes (specifically FP6),1 though there was an urgent need for the Commission to develop policies and strategies for RTD co-operation with the Balkan countries. It can be concluded that regional and other international strategies were guiding the scientific agenda of research institutions in Albania with the public universities and some research agencies leading this process.

The role of NASRI, in disseminating in-formation and promoting networking among national and international scientific actors has been crucial for developing the diverse profile of the applicants in H2020 calls. The info/training days and the database of research institutions (particularly of Universities) have been an enabling factor for the joint applications and the joint interest in applying for Horizon 2020. A successful case is the winning project “Traffic Safety Cultures and the Safe Systems Approach – Towards a Cultural Change Research and In-novation Agenda for Road Safety” implemented by a consortium of Telecommunication and Computer Networking – TNC Ltd. & CO-PLAN Institute for Development and Habitat & Polis

1 Vienna Memorandum on the Western Balkan countries in future European RTD activities. Vienna Workshop “Future Perspectives of International Research and Technology Co-operation” was a high level expert workshop on the preparation of FP6, organised by BIT in co-operation with the Federal Ministry for Education, Science and Culture (AT), the Federal Ministry for Economic Affairs and Labour (AT), the European Commission, and SECI (South East European Co-operative Initiative) in Vienna, on 11 and 12 December 2000. Workshop Participants from Albania, Bosnia-Herzegovina, Croatia, Federal Republic of Yugoslavia, FYROM

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University.

SustainabilityAlbania has a short history of democratic gov-ernment and a market economy. Therefore, the focus of governments in the last 25 years has mainly been on emergency solutions rather than development and promoting social and eco-nomic prosperity. The country has only in recent years advanced in structuring its R&I division and making it a policy and funding priority.

The constant changes to the legal framework, although promoting some progress in scientific research, have not established a stable and coher-ent system of research. In 2007 it was rightly concluded that the supporting infrastructure for science was insufficient and that in many cases development policy in the research institu-tions did not correspond to the new economic situation of the country. The level of research in universities was low, the cooperation between different scientific research units was weak and consequently there was little scope for developing an international dimension for Albanian science projects.1 The leading agency for the scientific research, the Albanian Academy of Science has undergone several changes in its competences over research agencies and over the years its leading role has been reduced to a few sectors. This was also due to the advances in the public universities in relation to scientific research and their engagement in research networks and the FPs that they were able to do, without the endorsement of any other institutions.

In 2009 the National Innovation Strategy was drafted by the MoES Department of Strategy and Donor Coordination, which included input from the main stakeholders, such as academics, researchers, specialists, and government officials. The National Strategy for Science, Technology and Innovation (NSSTI) 2009-2015 introduced major changes to improve the effectiveness of the national innovation system aiming to achieve the level of research needed to support quality university education and to respond to the needs of the productive sector (i.e., systematic support in innovation activities and technology transfer).

1 Experts Commission’s report on the Science System Reform, Albania 2013

Priority sectors were chosen from a broader list of priorities identified in the national develop-ment strategy (energy, tourism, agriculture, agro-processing, IT, geosciences, etc.).

The public funds that were often matched by donors’ funds have been and will remain the foremost funding source of R&I in Albania. European funds shape the research to such an extent that donor-driven projects can hardly find any convergence with industry. Some improve-ment in this regard can be seen in the participa-tion in the Smart Specialisation Platform of the EU where the priorities have emerged from the Albanian reality:

▶ Agriculture, Food and Biotechnology – Ag-riculture, Forestry & Fishing;

▶ Health – Human health & social work activi-ties;

▶ ICT – Information & communication tech-nologies (ICT);

▶ Materials – Manufacturing & industry; ▶ Social Sciences & Albanology – Services;

Scientific research & development; ▶ Water & Energy – Energy production & dis-

tribution; Power generation/renewable sources.This has also been very much the case with

IPA Cross Border projects that reduce their thematic elements to the exchange of experience, promotion of cooperation and basic research that can easily be applied by the various stake-holders. The IPA Cross-border programme 2016 -2017 demonstrated some improvement by flag-ging the issues of environmental protection and business development through innovation. There is a promising trend now on partnering with universities and research institutions highlighted by the European Secretariats of Western Balkan countries.

NASRI has created a fund for projects sup-porting the development of SMEs and the re-newal of technological equipment used by SMEs that will be developed further in cooperation with funds for creative businesses2 and COSME projects.

2 Action plan for Business – MEDTTE 2014

Conclusions & Recommendations

1 The R&I Sector located either in education institutions or in dedicated agencies for

science and research has traditionally received limited attention by GoA. The actual efforts of GoA are focused on creating the legal and insti-tutional framework for encouraging innovation in key sectors (starting with ICT), importing, modifying, and diffusing new technologies in enterprises and increasing the capacity of busi-ness support organisations to assist innovation activities in enterprises.

» Improving physical capital and promoting innovation are important elements for enhanc-ing productivity and competitiveness. With some large foreign direct investment projects in the energy sector under way, including the construction of large hydropower plants, energy photovoltaic farms and the Albanian section of the Trans-Adriatic Pipeline, investments on S&T infrastructure and use of innovative technologies are likely to be implemented in the coming years.

2 The business and investment development strategy and action plan adopted in October

2014 are in line with the principles of the EU’s ‘Small Business Act’, the national plans for the South-East Europe 2020 strategy and the World Bank’s ‘Doing Business’ indicators. Legislation on the National Registration Centre and on li-censing, authorisations, permits was amended to reduce the administrative and regulatory burden on businesses.

No concrete measures have been pursued in relation to assisting SMEs or microenterprises to obtain external funding for innovation activities. There are sporadic efforts from project donors in cooperation with NASRI to support the creation and survival of new innovative initiatives in the form of incubators.

» Based on enterprise and industrial policy instruments, Albania ratified in June 2016 an agreement to participate in the EU’s COSME competitiveness programme and continued to support financing of SMEs through a credit line of €15 million concluded with the Italian govern-ment, the Western Balkans Enterprise Develop-ment and Innovation Facility, and the European

Fund for Southeast Europe. However, SME ac-cess to credit and the lack of skilled staff remain a business concern but above all it hampers the innovation of this vital sector for the Albanian Economy. Therefore credit lines combined with innovation prerequisites for SMEs can sig-nificantly impact the productivity of the sector which dominates the economy.

» The OECD has supported the Albanian government in creating an enabling environ-ment for innovative businesses and initiating a trilateral cooperation between business-aca-demia-government. This cooperation need to be enhanced further in order to ensure the match of skills offer with sector demand for human capacities. The national employment and skills strategy was adopted in 2014; Ministry of Edu-cation, Sports and Youth focus on Vocational Training Centres and Professional Schools is in-creased but their teaching staff and premises are yet to be improved and equipped with laborato-ries and workshops that offer practical training. Although the NAVETA Advisory board brings together industry representatives, few businesses have formal agreement with professional schools to host internship students. The formalisation of such agreements for all professional schools and the laboratories refurbishment with either state funds or framework funds is eminent in order to achieve the objective of trilateral cooperation be-tween business-academia-government.

3 Albanian legislation allows educational services activities to be exempt from VAT, as

from October 2010 and GoA announced that it will exempt all private universities from VAT yet this decision is not enforced to the tax offices. This is the first specific attempt by the govern-ment to ease financial conditions for the institu-tions of higher education, allowing them not to pay VAT on professors’ and researchers’ salaries, thus functioning as an indirect incentive for research careers. Much work is still to be done in promoting R&D, though this was also declared as a priority by the government.

» The main purpose is to stimulate scientific, sport and cultural activities and programmes

32 33


coordinated and implemented by public institu-tions (including research activities). Through this amendment, there are no legal barriers for public institutions, whose scientific activities generate revenues, to be exempted from VAT. This action will stimulate international access to R&I funds from public research organisations, higher edu-cation institutions and public research centres which are the main target of this initiative.

4NASRI has played an important role in dis-persing and assisting directly with technical

information. There is an improved dissemination of information (from NASRI or the Erasmus Na-tional Office) and in the best cases, the necessary networks for applying for Horizon 2020 funds or others that are ready to be created.

» Giving NASRI an independent status and setting up objectives of measuring the research and scientific performance of Academic insti-tutes and research and technology agencies will ensure a national level coordination of scientific work aiming at setting 4-5 priorities of scientific development. Framework programs of which NASRI is disseminating the information require multi actor engagement and especially impact in the industry or society. NASRI can play the role of coordinating all actors’ participation in frame-work programs which are the best and most fea-sible funds for research and infrastructure fund-ing.

5 Albania is continuing to suffer from a lack of modern research infrastructure and state-of-

the-art equipment, but efforts are under way to improve infrastructure, starting with support for the development of communication networks and IT systems. Major projects are co-financed by the EIB, along with other international finan-cial institutions, such as the World Bank, which has also funded the equipping of teaching labora-tories for some secondary and tertiary education institutions.

» A crucial financial commitment by the Al-bania Government has been made in the Instru-ment for Pre-accession Assistance (IPA) and the earmarked funding that will come under the IPA 2014-2020 for Multi-beneficiary and Cross-Border programmes will support cooperation with international financial institutions to mo-bilise funding, help develop civil society, sup-

port education schemes such as student mobil-ity programmes, and help beneficiaries meet the requirements for EU membership and align their standards with the EU.

» The participation of Albania in the EU’s Smart Specialisation Platform and the identifica-tion of priorities for areas of specialisation will help R&D agencies and other stakeholders to become part of advanced networks and benefit from dedicated funds. Albanian applicants under the Framework Programmes identify networking as the most significant outcome. Strengthening cooperation between universities and research institutions within the country, in the region and internationally resulted in successful consorti-ums, especially under of FP7 and Horizon2020.

» There is an evident need for the Albanian R&I system to engage and support more knowl-edge intensive activities and to focus on the de-velopment of high-tech & innovative products, which will increase the growth potential and sus-tainability of the national economy, eventually driving the country out of the economic crisis and stagnation of low competitiveness and low performance in doing business.

6 To boost technology uptake and enable industry to absorb and scale up the technolo-

gies matured into new products and services and bring them to the market with high societal impact, the next step might be the support for cross-border collaborative research in FP9. Building on H2020’s efforts, the future European policy on KETs based on the understanding of industrial value chains, RD&I ecosystems, and innovation hubs needs to be a strong element of FP9.

» Enabling national economies to absorb, adapt and reap the full benefits of KETs is crucial to increase productivity and boost growth and jobs creation.

» Design a strong cross-border collaborative programme in FP9, building on the concept of Innovation Hubs to promote a competitive RD&I ecosystem strengthening Industries’ capacities to further absorb and scale up the technologies, maximising FP9’s impact for society.

» Foster collaboration and co-creation in FP9 with clear visibility in the FP9 structure, to build

long-term and trusted networks of partners through value chains to accelerate technology transfer. Put more focus in FP9 on consortia’s capabilities to turn technologies into impact and fostering the development of Innovation Hubs aiming at technology uptake by the private sec-tor.

» Support public-private partnerships in FP9 (Like local governments, Academia and SMEs) as well as at national & regional levels, as key in-struments to build competitive RD&I ecosystems with a longterm vision, enabling trust between partners. Such partnerships play a crucial role

in leveraging private sector investments, linking those with national and regional efforts, as well as in helping SMEs and start-ups to engage in EU and international supply chains.

» Within Innovation Hubs, ensure the long-term sustainability of the Technology Infra-structures managed by competence centres with a strategic approach based on Industry’s needs. Universities are the excellence centres for accom-plishing this task that can prepare for the future with a strategic approach based on the industry needs.

▶ European Commission, 2008 Research Directorate-General, Directorate A - Inter institutional and legal matters – Framework programme Evaluation and monitoring of programmes, Man-agement Reporting and Data Quality, Brussels

▶ European Commission. 2009. Albania 2009 Progress Report. Accompanying the Communica-tion from the Commission to the European Parliament and the Council Enlargement Strategy and Main

▶ Challenges 2009-2010. ▶ European Commission. 2010. Europe 2020 Flagship Initiative ‘Innovation Union’. Brussels:

Council of the European Union. ▶ European Commission. 2011. Innovation Union Scoreboard 2010 The Innovation Union’s Per-

formance Scoreboard for Research and Innovation. Pro Inno Europe. ▶ European Commission. 2012. ERAWATCH COUNTRY REPORTS 2013: Albania. Annual

Country Report (2013). ▶ EU Progress Report Albania, 16 October 2013: http://ec.europa.eu/enlargement/pdf/key_docu-

ments/2013/package/al_rapport_2013.pdf ▶ OECD. 2010. The OECD Innovation Strategy: Getting a Head Start on Tomorrow, OECD Pub-

lishing. ▶ doi: 10.1787/9789264083479-en ▶ OECD. 2011a. Public Sector Research Funding, Innovation Policy Platform, OECD, Paris. ▶ OECD. 2011b. Chapter 3: Changing Patterns of Governance in Higher Education. Education

Policy ▶ Analysis. OECD, Paris. Available at: http://www.oecd.org/education/skills-beyond-

school/35747684.pdf ▶ OECD. 2012a. International Migration Outlook 2012, OECD Publishing. doi: 10.1787/migr_

outlook-2012 ▶ OECD. 2012b. OECD Science, Technology and Industry Outlook 2012, OECD Publishing. ▶ doi: 10.1787/sti_outlook-2012-en ▶ Pro Inno Europe/ Inno Policy Trendchart. 2011. Mini Country Report/Albania. ▶ Project IPA. 2007. Standard Summary Project Fiche – IPA centralised programmes; Project

4: Supporting SMEs to become more competitive in the EU Market by providing high quality services in modern management, innovation and technology transfer.

Annex A. Bibliography

34

Feasibility Study for Establishing CBC Innovation Hub in Korça

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▶ Action plan for Business, 2014, Ministry of Economic Development, Tourism, Trade and Entre-preneurship, Albania

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