1. Mapping and Rebuilding the Local Innovation System of the Regions: The Case of the South-Central Region (SCR) in Bulgariaby Ruslan StefanovARC FundKEF III, Budapest, March 24-26th, 2004

2. Outline • Introduction • Case Study Description • institutions • process • results • Knowledge Gained (Lessons Learnt)

3. 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

4. Knowledge Economy Finland (1) 0.69 0.53 0.51 0.48 The Bulgarian Score vis-à-vis Finland The Case -Background Source: World Bank and author’s calculations • Econ. Incent & Inst. Reg • Information Infrastructure • Education & Training • Innovation Systems

5. The Case - Geography

6. 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

7. Institutional Setup

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

9. 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

10. 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 to conducting RIS projects • Trans-border knowledge transfer (e.g. Romanian organization successfully consulted on adapting the RIS initiative)

11. 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

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

13. 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 complementarities • Rule of thumb – governments should put an euro in projects that attract at least another euro in private or external funds

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

15. 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

16. 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

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

18. THANK YOU ARC Fund 5, Alexander Zhendov Str. 1113 Sofia http://www.arc.online.bg E-mail: ruslan.stefanov@online.bg

19. Bulgaria KE Useful Links • http://www.bgrazvitie.net/bg/ke/ • http://www.developmentgateway.org/node/130667/sdm/docview?docid=364943 • http://www.arc.online.bg • http://www.bulgaria-gateway.org/ • http://www.vitosha-research.com/ • http://europa.eu.int/comm/lisbon_strategy/index_en.html • http://www.helsinkikef.org • http://www1.worldbank.org/gdln-scripts/programs/kam2002/kamscript.exe/show_page • http://trendchart.cordis.lu/Scoreboard2002/index.html • http://www.developmentgateway.org/node/130667/

20. 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