– A View from German Development Cooperation – Policy Framework for Innovation and Entrepreneurship Support in the MENA-region – A View from German Development Cooperation – Ulrich Höcker (GTZ) Casablanca/Morocco 02. February 2006

Needs in terms of new job creation for the coming decades in the MENA Region Source: Worldbank (2004); EU Innovation Policy Trends (2005)

Changing nature of Competitiveness Competitiveness traditionally based on Capital and labour costs Costs of inputs and infrastructure services General business environment and ease of doing business (including macro stability, taxes, x rate, etc) Superiority in technology or management But it is increasingly being based on Access to information e.g. market information and requirements Greater value added in production now comes from knowledge Speed and quality are new essentials Innovation is a strategy of constant change

MENA specific challenges “Weak or missing middle” problem: few SME have potential for growth & innovation Entrepreneurship-gap: educational & economic environment provide little incentives Inter-institutional linkage bottleneck: low degree of communication & interaction between private sector & knowledge-institutions Innovation knowledge gap: little theoretical & practical experience with management of innovation processes

Scope of activities of German Development Cooperation Policy Level Improving Business and Investment Climate Formulation of SME-related policies Market development for business services, dissemination of innovation-related instruments and tools Innovation Services Strengthening R&D/T collaboration between public research & higher educational institutions and the business sector Technology Transfer Entrepreneurship Promotion Supporting the creation and growth of innovative firms Strengthening entrepreneurial skills

Lessons learnt There is a need to develop social aspects of innovation - entrepreneurship and creative thinking Systemic approach: simultaneous intervention at macro, meso & micro level Governance matters: Innovation needs joint efforts of all relevant public and private stakeholders (science & education, innovation & technology, industrial development)

Lessons learnt (cont.) Support of public-private dialogue forums to identify solutions to concrete enterprise problems and to improve the business environment Fostering competitiveness by benchmarking and measuring innovation processes R&D culture must be demand driven: Permanent needs analysis at industry level, subsequent development of relevant trainings/services Transnational learning through intraregional dialogue and technology transfer

For further information: Thank you! For further information: www.bmz.de www.gtz.de Ulrich.Hoecker@gtz.de