ICT Institute Mihailo Pupin An R&D Institution’s Point of View on Serbia’s Government-Supported Innovation Initiative March, 2004

Institute Mihailo Pupin 250 researchers 7 University Professors, 14 PhDs, 30 MScs Leading Serbian & Montenegrin R&D institution in information and communication technologies Application-orientated research on behalf of key utility, public and industry sectors Broad spectrum of research fields: electronics, automation, computer science, telecommunications, information systems and software engineering

Serbia’s Innovation Initiative Goals: –Achieving Serbia’s industries’ international competitiveness through innovations –Development of knowledge-based export-orientated industries and services –Transfer of knowledge and technologies –Creation of simulating environment for development of innovations –Eligibility for funding regardless of ownership –Boosting R&D within industry

Government Support Measures Improvements in the regulatory environment relating innovation, tertiary education, and entrepreneurship Innovation Program: co-funding of R&D projects (50-80%) Government offers loans and loan guaranties for innovation-intensive companies Investment in modernization of R&D infrastructure Investments in ICT infrastructure Promotion of export-orientated products through SIEPA (Serbian Investment and Export Promotion Agency)

Innovation Program Co-funding of application orientated research that results in development and marketing of export- orientated, internationally competitive products Development of new technologies aimed at improving competitiveness of Serbia’s traditional industries Strengthening of industry-university co-operation Emphasis on needs of traditional industries that can relatively quickly become internationally competitive, such as food, furniture, textile, garment, shoe, and machine industry

How It Works

Funding Criteria Compliance with National Innovation Strategy Innovativeness and competitiveness of proposed solutions Level of cost-share participation by industry partner Product’s economic efficiency Time-to-market Risk analysis Full-time engagement of young researchers (not older than 35) in the project

IMP’s Participation in Innovation Program Currently participating in 17 projects € funding received from both government and industry participants in past two years Benefiters: key utilities, metallurgy, machinery, oil, petrochemical, and process industries, SMEs Overall projects output: –9 new products –39 new prototypes or methods –4 technology or product upgrades –2 internationally published books –89 international publications –75 national publications

IMP-Conducted Projects Improvement of traditional industries’ competitiveness Visual Quality Inspection Hunting bullets production line in Zastava, Kragujevac Serbian Glass Factory, Paracin Improvement of Power System’s efficiency Boosting SMEs emergence Stimulation of export-orientated products

Program’s Impact on R&D Community Better R&D environment (investments in R&D and IT infrastructure) Narrowed R&D community - industry gap Stimulation of innovation-intensive entrepreneurship (spin-off startups) Better employment opportunities Researchers’ earnings growth Reduced ‘brain drain’ Higher mobility of researchers

Challenges Ahead Encourage public-private mix (private sector to team-up with public R&D organizations) Include representatives of public sector in the selection process Reach 3% of GDP target by 2010 Investments in R&D in Serbia