Mapping and Rebuilding the Local Innovation System of the Regions: The Case of the South-Central Region (SCR) in Bulgaria by Ruslan Stefanov ARC Fund KEF III, Budapest, March 24-26th, 2004

Outline Introduction Case Study Description institutions process results  Knowledge Gained (Lessons Learnt)

Introduction – Why This Case Comes from KE Practice - Addresses a Core KE Pillar - Innovation System – From Different View Points Reveals Insights on Country Region and Company Level Highlights the Importance of Processes and Institutions Underscores the Role of Trust and Public-Private Partnerships Follows Local Demand and Conditions but Uses EC and International Knowledge and Instruments

The Case -Background Knowledge Economy Finland (1) The Bulgarian Score vis-à-vis Finland Econ. Incent & Inst. Reg Information Infrastructure Education & Training Innovation Systems Source: World Bank and author’s calculations

The Case - Geography

Case Features Focus: Managing and Shaping Regional Innovation System Change Through PPP - the Strategy as a Tool, not an End Features Private Sector Lead, Bottom-Up Approach Learning and Knowledge Sharing Core Results: Knowledge on Different Management Levels

Institutional Setup Advisory Committee [43] Steering Committee [18] Management Unit [14] 6 Local Coordinators Expert Council [19] Industry Groups Ad Hoc Working Groups International Advisory Council

Process (1) Study the Region Involve Key Players Know Supply & Demand InstitutionalizeImplement Projects Outline Possible Actions Find Success Stories/ Leaders Pilots

Process (2) Involved in Carrying Out the Project : more than 40 organizations and 120 persons Indirectly Project Activities: more than 500 organizations and 1,200 persons Number of Public Meetings: 110 Duration: 2,5 years

Results Internationally comparable knowledge and data bank on SCR’s innovation system Direct knowledge transfer on innovation to some 400 companies in the region 10 technology audits and 6 international company matches Experience and knowledge transfer to the other 5 planning regions in Bulgaria which now prepare tofor conducting RIS projects Trans-border knowledge transfer (e.g. Romanian organization successfully consulted on adapting the RIS initiative)

Knowledge Gained – Management Level Create flexible and effective internal knowledge management system – the organization evolves with the process Balance knowledge and management capabilities – outsource when necessary Focus on local demand and conditions but know international benchmarks – discrepancies are usually overwhelming Do not expect knowledge and interest from the other stakeholders – inform and engage proactively; keep doors open International partners are good steering anchors but copying practices should be avoided

Example – Level of Cooperation Source: Regional Innovation Strategy for South-Central Region of Bulgaria

Knowledge Gained – Macro Level Setting a predictable but flexible innovation policy framework is fundamental for streamlining common efforts Governments are stuck with rigid remnants of the old innovation system – reform them, introduce competition and complementarity Rule of thumb – governments should put an euro in projects that attract at least another euro in private or external funds

Example – R&D Expenditure Source: European Innovation Scoreboard, 2002

Knowledge Gained – Meso Level Regional governments tend to be outsiders to both central and local developments But might be more flexible and cooperative Local authorities are more interested and eager to participate but might often lack specific knowledge and skills Active private sector associations are a key bridge to involving the business at national and regional level

Knowledge Gained – Company Level Most companies are well behind theoretic and best practice models – transfer knowledge, gather as much data as possible Only a few, usually foreign owned play, at global markets – motivate to share knowledge, highlight best practice Truly innovative companies are exceptionally rare – FDIs and technology transfers precede genuine innovations Private companies are the most interested and long-term ally in shaping the regional innovation system

Example - Companies Source: Regional Innovation Strategy for South-Central Region of Bulgaria

THANK YOU ARC Fund 5, Alexander Zhendov Str Sofia

Bulgaria KE Useful Links ew?docid= ew?docid= scripts/programs/kam2002/kamscript.exe/show_page scripts/programs/kam2002/kamscript.exe/show_page

Bulgaria KE Useful Documents “Towards a Knowledge-Based Economy, Bulgaria”, UNECE, 2002 “A Preliminary Strategy to Develop a Knowledge Economy in EU Accession Countries”, World Bank, 2002 “Bulgaria, 2003 Special 301 Report”, International Intellectual Property Alliance “Bulgaria, Country Report”, European Trend Chart, 2002 “Bulgaria E-Readiness Assessment 2003”, ARC Fund, upcoming and 2002 Bulgarian E-Government, ICT and Innovation Strategy “Inventory of Bulgaria’s Innovation System”, PHARE Project, Upcoming