1. ”Central Baltic programme’s opportunities to strengthen region’s competitiveness” Project Manager Ülari Alamets

2. Content Where to intervene to achieve change?  Our niches => Specific objectives How we achieved selected specific objecvtives and set target values? ”Intervention logic’s” of two chosen specific objectives (of Competitive economy) How we work to find projects needed for achieving programme’s results?

3. Central Baltic region  Regions of Finland, Sweden, Latvia, Estonia, Åland  Total population: 10.5 M inhabitants (2% EU)  Population density Average: 53 inhab./km2 ( EU 28: – 116 inhab./km2)  CB Regions combined GDP – ca 300 bn EUR  Baltic sea as common sea  Home of great global companies in traditional sectors and  Excellent education systems  Significant differences in wealth (west/north – east/south ... => What can be changed with ca 29 MEUR

4. Based on what objectives were chosen? Central Baltic economies strengths and complementarities What others are not doing? Where co-operation interest existed (project ideas) EC-s new/old approach on ”taking results seriously”

5. Global Competitiveness Global Competitiveness Report 2013-2014 (World Economic Forum) SWEDEN: Rank – 6 (+2)  Innovation led  Quality of public institutions  High degree of trust and transparancy  Efficient financial markets FINLAND: Rank – 3 (+-0)  The 2nd innovative in Europe  Transparant public institutions (1st in ranking)  The top position in health, primary, higher education and training ESTONIA: Rank – 31 (-3)  The best in Eastern Europe  Excellent education  Efficient goods and financial markets  Advancing technology readiness LATVIA: Rank – 52 (-3)  High level higher education and training  Commitment to technological readiness  Improved macroeconomic environment  Infrastructure, Innovation as problematic areas Source: Global Competitiveness Report (2014) 5

6. Potential for Central Baltic region to be Technology start-ups hub Presence of well recognized networks, events, co-working initiatives, mentorship programmes, business idea competitions in all CB countries Success stories of new technology start- ups in all CB countries Common CB region / environment for business development to market globally Innovativeness, Competitiveness, Business Development 6

7. Summary: challenges and opportunities 7 Challenges and opportunities related to economic development: Further integration of the Central Baltic economies and markets; Identifying common interests (on the basis of clusters of different economic sectors) and further develop and market those clusters to access the new markets; New technology start-up activities to strengthen Central Baltic region’s position as globally competitive hub for technology start- ups; Exploitation of potential target sectors for new business development such as ICT, “low-carbon” solutions, “silver” economy, as well as supporting the “green” and “blue” economy; Developing entrepreneurial attitude in the society already from the early school years.

8. How we achieved selected specific objectives? Strategy process ”Convincing decision makers” Regional Analysis Project Ideas Thematic workshops

9. Programming logic for the CB Programme 2014-2020 INVESTMENT PRIORITY 3.1. STRATEGIC PROJECTS PROJECT IDEAS, CO-OPERATION INTERESTS PROJECTS SMALL PROJECTS TO 2 TO 3 TO 1 TO 4 INVESTMENT PRIORITY 3.2 INVESTMENT PRIORITY 6.1 INVESTMENT PRIORITY 6.2 INVESTMENT PRIORITY 6.3 Specific Objective 1.1 Specific Objective 1.2 Specific Objective 6.1.1 Specific Objective 6.2.1 Specific Objective 6.3.1  National, regional strategies  Europe 2020  EUSBSR Strategy, Action Plan  Menu of 11 TO-s Result 1 Result 2 ONGOING: ANALYSIS, CONSULTATION Result 3 Result 4 Result 5 Result 6 Result 7 ANALYSIS, CONSUL- TATION EXPERIENCE OF THE CURRENT PROGR. IDENTI- FICATION OF THE MAIN CHALLEGE S OF THE CENTRAL BALTIC REGION INVESTMENT PRIORITY 7.1 INVESTMENT PRIORITY 7.2 INVESTMENT PRIORITY 10.1 Specific Objective 7.1.1 Specific Objective 7.2.1 Specific Objective 10.1.1 Result 8 Result.. 9

10. Available IPs (a) Promoting entrepreneurship, in particular by facilitating the economic exploitation of new ideas and fostering the creation of new firms (b) Developing and implementing new business models for SMEs, in particular for internationalization (c) Supporting the creation and the extension of advanced capacities for product and service development (d) Supporting the capacity of SMEs to engage in growth and innovation processes Emphasis on innovative SMEs Low carbon ICT (1) To exclude: (b) Developing and implementing new business models for SMEs, in particular for internationalization (c) Supporting the creation and the extension of advanced capacities for product and service development (2) To choose: (a) Promoting entrepreneurship, in particular by facilitating the economic exploitation of new ideas and fostering the creation of new firms (d) Supporting the capacity of SMEs to engage in growth and innovation processes: emphasize on innovative SMEs by developing links and synergies between enterprises, R&D centres, higher education institutions by interpreting internationalization as precondition for growth by addressing the capacity of services and product development 3) To address specific needs of business development in isolated remote areas via AI sub- programme TO 1 (b) Supporting the capacity of SMEs to engage in growth and innovation processes All 4 TOs are broadly defined, all of them should have focus on innovative SMEs IP (a) is clearly addressing new businesses, IP (b), (c), (d) - established SMEs IP (a), focusing on new businesses, supports the potential for CB region as technology-start ups hub IP (d) addresses SMEs capacity and growth, innovation, also covering internationalization Explanations/ interpretations: Delegations’ comments (via written procedure) Estonia: Supports to exclude (b) and (c) Emphasizes specific needs of business development on scope of AI programme (maybe also SFE programme) Finland: No comments regarding IPs Latvia: Emphasizes a need to have more focused scope of results via enhanced competitiveness through innovation driven investments Reminds of moving TO1 (b) to TO3 Supports choice of (a) and (b) Asks for justification of (c), before excluding it Sweden: IP (d) should include capacity building and internationalization Åland Supports selection of (a), (b), (d) Additional considerations Horizontal Themes 3/Enhancing the competitiveness of SMEs 10

11. New knowledge intensive companies More entrepreneurial youth More exports by the Central Baltic companies to new markets Natural and cultural resources developed into sustainable tourist attractions Sustainably planned and managed marine and coastal areas Better urban planning in the Central Baltic region Reduced nutrients, hazardous substances and toxic inflows to the Baltic Sea Improved transport flows of people and goods Improved services of CB small ports for mobility and tourism More people benefiting from stronger CB communities More aligned vocational education and training programmes Competitive economy of the region (29 meur) Sustainable use of common resources (37 meur) Well-connected region (37 meur) Skilled and socially inclusive region (12 meur) Access to and use and quality of ICT The shift towards a low-carbon economy

12. Specific Objectives Specific objective definition + result indicator’s definition + baseline value + target value SO 1.1 New joint and co-operating Central Baltic knowledge intensive companies SO 1.2 Joint CB student companies – leading to more entrepreneurial youth SO 1.3 More exports by the Central Baltic companies to new markets via clusters’ co-operation

13. What results should we achieve via the financed projects by 2023? 100 new joint Central Baltic companies + co-operating new Central Baltic companies 50 joint Central Baltic student companies 10 Central Baltic cluster based co-operations achieve sales to new markets

14. New joint and co-operating Central Baltic businesses ”Intervention Logic” Potential (BUSINESS AREA): This specific objective aims to exploit the opportunities of “green”, “silver”, and “blue” economy. The potential of ICT and low-carbon solutions, climate change mitigation and adaptation (as resource efficiency, renewable energy etc.) have been defined as a basis for new business creation. The Central Baltic region has a good potential to strengthen its position as a globally competitive technology start-ups region. This specific objective aims also to target challenges related to the sustainability of the businesses operating in sparsely populated, rural, peripheral, isolated island and archipelago communities. The seasonality of some traditional activities (e.g. tourism, fishing, agriculture) adds complexity to the challenge. Specific attention is paid to the need of developing diverse sets of skills to be successful and sustainable in isolated and sparsely populated areas.

15. New joint and co-operating Central Baltic businesses Definitions: Knowledge intensive enterprises are the ones with a potential to grow and internationalize, aiming to achieve higher value added than the regional average level of the industry they belong in. New enterprises are defined as 2 years from the registration or the start of operations. ! In the case of islands and archipelagos “new business models of existing SMEs” are equaled to “new businesses”. “Joint” is defined as joint teams (key people), joint management or joint ownership by people from at least 2 Member States/Åland. “Co-operating” is defined as new Central Baltic companies that have established co-operation in relevant areas of their business development (e.g. product development, marketing). Results: The aim is to achieve the creation of new joint Central Baltic enterprises and co-operation between new enterprises in the Central Baltic region, although it is accepted that a certain share of targeted teams and businesses will not become joint or co-operating. How? The main approach is to implement development projects via intermediate bodies in the field of business development. The Central Baltic Programme will not use grants and financial instruments to new start-up companies.

17. Exports to new markets via clusters’ co-operation Potential (BUSINESS AREA): This specific objective aims to support the clustered Central Baltic SMEs to enter into new markets with focus on innovation, product development and internationalization, which are relevant preconditions for sustainable growth. Definitions New markets are defined as markets outside the European Union / European Free Trade Area (EFTA). Cluster is defined as an established co-operation between similar or complementary businesses and research and development (R&D) institutions. Meta-cluster is a co-operation between established clusters within the Central Baltic region, undertaking joint activities with the aim to enter new markets. How? Here a cluster-based approach for co-operation within the Central Baltic region is used promoting co-operation between already established clusters forming “meta-clusters”. This should enable the SMEs to enter into the new markets with new or adapted products and services. Project partners are encouraged to set symbolic participating fees for target group companies who benefit from project activities. This is seen as a way to increase their commitment. ! No costs related to permanent costs of distribution networks, trade offices are eligible.

19. Towards results Concrete Results=> Implement MeasurableChangeGood Plan QuantifiableBaselinevalueStrong team ChangeTargetvalue Follow the same logic while pre-consulting, assessing, monitoring

20. How we work to find strong projects? Continuos work with project ideas: informing, consulting, project development seminars, consultation days, written feedback, face to face meetings,... Two step application process: first step ”to understand is project right for CB programme”, second step ”to elaborate on demonstrate that good plan and resources are in place”

21. First call project applications – Priority 1 46 project applications: 41 regular, 5 small SO 1.1 – 22 (20+2), 11 consulted SO 1.2 – 8 (6+2), 4 consulted SO 1.3 – 16 (15+1), 13 consulted 28 consulted

22. The big picture: P1 With projects through first step: Contribution to result targets: SO 1.1 110/100 (110%) SO 1.3 5/10 (50%) Required ERDF: 18 583 697,72/28 754 691 (65%)

23. What we do in the middle of first call? After first step: Explain, demand, support, explain,...that results are relevant and have to be achieved For second call: Inform, seek, consult, direct, support,...

24. Thank You! www.centralbaltic.eu CentralBaltic Central Baltic Programme