G TSSS S S

1

Presentation of Existing Situation
Analysis Region of Central Macedonia
International Joint Meeting Kladno, 2-12-2005
Katerina Papadopoulou Center for Research and
Development Hellas (CERTH)

2
Introduction
Contents

• Specific characteristics of RCM (general
  regional indicators, SWOT analysis)
• General situation of SMEs
• Identification of problems
• SMEs policies available in RCM
• Financial solutions
• EU initiatives
• Raising awareness
• Conclusions

3
Introduction
References

• Studies (e.g. Urenio, Observatory for Regional
  Innovation and Entrepreneurship, Federation of
  Industries of Northern Greece)
• Internet based search (e.g. CORDIS, EUROSTAT,
  EUROPA, GSRT)
• Conferences proceedings (e.g. conference on
  strategy of RCM development 2007-2013,
  Exploitation of good practices for the assessment
  and development of entrepreneurship)

4
Investigation of the specific characteristics of
RCM
5
Investigation of the specific characteristics of
RCM
Basic Regional Indicators
6
Investigation of the specific characteristics of
RCM
Basic Regional Indicators contribution of
different sectors to RCMs GDP
7
Investigation of the specific characteristics of
RCM

• Primary sector
• Basic agricultural products
• Processed products
• Animal production
• Forestry
• Piscicultures and mollusk culture

• Manufacturing sector
• Food
• Textiles
• Beverages
• Chemicals
• Basic metallurgy

• Service sector
• Health
• Education
• Research and development
• Production services
• Tourism

8
Investigation of the specific characteristics of
RCM
Infrastructures

• Education and Research
• 2 Universities
• 2 Technological Educational institutes
• 1 Research Center

• Industry
• 3 Industrial areas
• 3 Small industry parks

• Innovation
• 1 Technology Park
• 3 Companies Incubators

• Energy networks
• Natural gas pipeline

• Transportation networks
• PATHE
• EGNATIA

• Telecommunication
• networks
• Telematics Broadband networks

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General Findings

• RCMs potential is above the countrys average
  concerning GDP, employment and exports.
• The abovementioned finding is rather occasional
  as traditional sectors, and unqualified
  employment characterize RCMs business
  environment.
• RCM shift its activities to the tertiary sector
  (services)
• Unemployment remains at high level (higher that
  the countrys average for this year)
• RD and educational infrastructures create
  favorable conditions for innovation and
  entrepreneurship development
• The completion / integration of all kind of
  networks (transportation, telecommunications,
  energy) will render RCM node of significant
  business initiatives

10
SWOT Analysis of RCM
Strengths

• Its strategic geographical position within the
  general economic area of South Eastern Europe
• Its participation in European energy and
  transportations networks
• The concentration of significant economic
  activities (especially of the manufacturing
  sector)
• The existence of specialized human resources
• The existence of significant research and
  educational infrastructures
• The existence of significant natural, soil and
  water resources

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SWOT Analysis of RCM
Weaknesses

• Lag in many administration levels
• Degradation of the environment
• Insufficient exploitation of energy resources
• Deficiencies in existing transport
  infrastructures
• Lack of entrepreneurial culture and willingness
  in undertaking any entrepreneurial risk in
  private sector entailing low levels of innovation
  integration into new businesses
• Dominance of traditional business sectors
  relying on low labor cost
• Lag of primary sector concerning new
  technologies and specialized personnel
  integration
• Depreciation of the role and significance of
  human resources training and constant adaptation
  to new challenges

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SWOT Analysis of RCM
Opportunities

• The development of competitive activities in the
  manufacturing sector and in high added value
  services. These could be achieved by exploiting
  the potential of the Region concerning the
  development of human capital and the provision of
  research services as well as the possibility of
  decreasing the cost of labor-intensive activities
  through investments in neighbor countries of
  South Eastern Europe
• The development of telecommunications
  infrastructures, of transportation networks and
  the complete accession into transeuropean
  networks, create the conditions for rendering RCM
  telecommunication and modern transportation
  center of South Eastern Europe.

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SWOT Analysis of RCM
Threats

• Strong dependences of the productive core of the
  region, resulting from the rapid increase of
  public investments in the frameworks of 2nd and
  3rd Community Suport Funds as long as these are
  not replaced by private investments
• Delays of work progress concerning transports
  infrastructure
• Constant degradation of the environment that
  could undermine the existing development model
• Weakness concerning technology watch and
  development and or introduction of innovation
  into SMEs.

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The SME sector in RCM

• Small and medium sized enterprises dominate
• Balanced SMEs sectorial allocation
• The majority of business activity and especially
  innovative one is concentrated round the area of
  Thessaloniki

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General Situation of innovative SMEs in RCM
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General Situation of innovative SMEs in RCM
Percentage of employed in knowledge intensive
services in RCM
17
General Situation of innovative SMEs in RCM
Regional distribution of SMEs expenditures on RD
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General Situation of innovative SMEs in RCM
Major findings (1/3)

• RCM is the 4th most innovative region of Greece,
  but at European level is placed among the last
  reaching only 35 of the European average
• The percentage of personnel employed in
  knowledge intensive services has increased (for
  the period 1998-2000) contrary to the whole of
  the country
• The research workforce shows increase. This
  concerns only the public sector
• The research workforce in the private sector
  remains at the same levels
• RD expenditures of the SME sector reach only
  the 0.1 of the GDP

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General Situation of innovative SMEs in RCM
Major findings (2/3)

• SMEs capacity to innovate almost reaches the
  European average (1997-2002)
• The percentage of SMEs undertaking innovative
  activities during 2000 reached 85 of the
  European average.
• Significant number of SMEs stop their efforts to
  innovate due to barriers (75 of the European
  average)
• Innovation related to broadening products or
  services range rather than to increasing quality,
  or widening the market share

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General Situation of innovative SMEs in RCM
Major findings (3/3)

• Development of in-house innovation. A smaller
  percentage develop innovation in collaborations
  with RD organizations and an even smallest
  totally outsource this kind of activity
• Strong trend towards usurpation of innovation
  results
• Innovation is introduced through the networks of
  suppliers and clients and not through
  collaboration with RD organizations
• The gap between investments on modernization and
  increase of the production capacity and these on
  innovations introduction, increases.

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Problems faced by Innovative SMEs
General critical issues (1/2)
Internal Environment

• Developing flexible and dynamic strategy
• Modernization of production processes
• Research and development of new and innovative
  products
• Access to information concerning new
  technologies, markets and competitors
• Access to funding mechanisms

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Problems faced by Innovative SMEs
General critical issues (2/2)
External Environment

• Complexity of the taxation system
• Inflexible and outdated labor legislation
• Centralism, complexity concerning transactions
  with public administration
• Bureaucracy, existence of too many laws
• Insufficient support of exports
• Incomplete transportation networks
• High energy and telecommunication costs

23
Problems faced by Innovative SMEs
SWOT analysis (1/3)
Strengths - Opportunities

• Sufficient number of scientists (2 universities
  and 3 technological institutes, with Aristotle
  University being the biggest university of the
  Balkans)
• Good research infrastructures
• Research institutes characterized as Centers of
  Excellence at European level in specific
  technological fields

24
Problems faced by Innovative SMEs
SWOT analysis (2/3)
Weaknesses - Threats

• Lack of funds
• Lack of entrepreneurial culture
• Lack of legal framework for the participation of
  public research organizations in spin-offs
• Lack of legal framework for participation of
  researchers in spin-offs

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Problems faced by Innovative SMEs
SWOT analysis (3/3)
Weaknesses - Threats

• Bureaucratic procedures of starting
  entrepreneurial activities
• Difficult procedures of stopping entrepreneurial
  activities if failure
• Small participation of private funds in research
  activities
• Lack of sufficient number of case studies that
  could serve as best practices

26
SMEs policies in RCM related to innovative SMEs
(national level)
Responsible bodies

• General Secretariat for Research and Technology
• General Secretariat for Industry

• Ministry of Development
• Ministry of Finance
• Ministry of Labor
• Ministry of education

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SMEs policies in RCM related to innovative SMEs
(national level)
Operational Program Competitiveness

• General strategic objective of the Operational
  Program Competitiveness (OP COM) is to
  support quality-orientated competitiveness.
• Stimulation of business initiative and
  simplification and rationalization of the
  business environment are the main contributors
  towards achieving that aim.

• OP COM is targeting the sectors / areas of
  processing and services, research and technology,
  tourism and energy - natural resources
• The OP COM comprises 9 priority axis and over
  30 measures

28
SMEs policies in RCM related to innovative SMEs
(national level)
Operational Program Competitiveness Priority
Axis

• Differentiation of the tourism product
  promotion of Greece as a tourist destination
• Securing the energy supply and promoting
  liberalisation of the energy market
• Energy and sustainable development
• Human resources
• Technical aid

• Improving the business environment
• Support and encouragement of business initiatives
  
• Promotion of excellence in business activity
• Technological innovation and research

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SMEs policies in RCM related to innovative SMEs
(national level)
Operational Program Competitiveness Actions
related to Innovation and Entrepreneurship

• PRAXE Programme for the Exploitation of Research
  Results
• ELEFTHO Programme for the creation of ST parks
  and incubators
• Programme for the Development of Industrial
  Research and Technology (PAVET)
• Programme for Demonstration Projects (PEPER)
• HERON Programme for the support of employment of
  research staff in enterprises
• TECHNOLOGY BROKERAGE Programme for the support
  of intermediary technology transfer
  organizations 
• AKMON Programme for the development of research
  centres with the participation of users

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SMEs policies in RCM related to innovative SMEs
(national level)
Operational Program Competitiveness Actions
related to Innovation and Entrepreneurship

• Liaison Offices in Research Centres and Higher
  Educational Institutes for the exploitation of
  research results and the matching of researchers
  with potential sponsors
• International Cooperation in Industrial Research
  
• Bilateral and International ST Collaboration
  Programme with bodies from technologically
  developed countries and International
  Organisations
• European Union Framework Programme and
  development of the European Research Area (ERA)
• Development of Excellence in the Research
  Centres supervised by the GSRT
• Concerted Programmes in selected economical,
  scientific, cultural and environmental fields

31
SMEs policies in RCM related to innovative SMEs
(national level)
Operational Program Competitiveness Actions
related to Innovation and Entrepreneurship

• Foresight Programme for the selection of research
  and technology policy directions in Greece
• PENED Programme for the Support of Researchers
  for training young researchers
• ENTER Programme for the Integration of Foreign
  Researchers (attracting notable researchers from
  abroad and integrating them in the national
  research system for a specific time period)
• TECHNO LEARNING Programme for the familiarisation
  of pupils and teachers with science and
  technology issues
• HERMES Programme for increasing public awareness
  in science and technology
• Programme for improving awareness on patents and
  their use

32
SMEs policies in RCM related to innovative SMEs
(regional level)
Regional Operational Program of Central Macedonia
The Central Macedonia Regional Operational
Programme (ROP / 2000-2006) aims at making the
Region more competitive and reducing
intra-regional disparities in order to create
conditions that will ensure sustainable
development and competitiveness in the Region.
The ROP comprises 6 priority axes. The first
focuses on Thessaloniki and on the proper
structures for making the city an international
centre for the promotion of innovation and
entrepreneurship. Three of the priority axes
aim at strengthening the provincial regions of
Central Macedonia, and the remaining axes
comprise horizontal actions.
33
SMEs policies in RCM related to innovative SMEs
(regional level)
Regional Operational Program of Central Macedonia
Types of Action

• Nurture a spirit of innovation (Development of
  Innovation and Entrepreneurship)
• Foster the integrated development of deprived
  urban areas
• Foster an integrated approach to the problems of
  disadvantaged, problematic rural areas

34
SMEs policies in RCM related to innovative SMEs
(regional level)
Regional Operational Program of Central Macedonia
Development of Innovation and Entrepreneurship

• Special measures that promote innovation,
  through the cooperation and networking of the
  most dynamic, outward-looking and modernising
  elements of the Regions business, research and
  education spheres, in both the private and the
  public sector
• Businesses are the focal point of this
  collaboration (with an important role for SMEs
  and including the services and tourism sectors)
• Objective is to promote specific sectors of
  specialization and excellence as part of the
  image of the Region in the wider and
  international economic environment. 

35
SMEs policies in RCM related to innovative SMEs
(regional level)
Regional Operational Program of Central Macedonia
Special Measures

• Thessaloniki as the centre of productive services
  
• Research and development infrastructure
• Support for innovation and entrepreneurship
• Combined development of innovation and
  entrepreneurship
• Aid provided for innovation investments in the
  processing sector under the Development Law

36
SMEs policies in RCM related to innovative SMEs
(National Legislation)

• Law 3992/2004 motives for private investments
  for the economic development and the congruity of
  the regions
• Law 2992/2002 measures for the support of the
  financial market and the development of
  entrepreneurship
• Law 2919/2001 Liaison of RD and Industry
• Decree 17/2001 on financial support of NTBFs

37
SMEs policies in RCM related to innovative SMEs
(Future)

• Activities of the Regional Innovation Pole
  concern analysis and planning of long-term
  policies on Innovation, as well as support and
  provision of consultancy services to
  organizations of the region in order to improve
  their competitiveness at international level. One
  task of the Innovation Pole addresses to
  start-ups and spin-offs, as it refers to seed
  capital funds.
• Development of an Innovation Zone in Eastern
  Thessaloniki. The zone will consist an area of
  constant development of activities related to
  education, training, research and technological
  development, and attraction of innovative
  initiatives. The effort will be based on the
  synergies of all important organizations related
  to knowledge and innovation that are located in
  the specific area. Main objective is rendering
  the area center of excellence in specific
  sectors.

38
Financial solutions and Tools in RCM
Direct support

• Numerous banks leasing companies operating at
  national level
• New Economy Development Fund (TANEO) operating
  at national level
• 2 companies incubators
• Several VC companies operating at national level
  and in traditional way as they originate from
  banks

39
Financial solutions and Tools in RCM
Indirect support

• Thessaloniki Technology Park / companies
  incubator
• Technopolis S.A.
• Organizations for entrepreneurship support
• Consulting companies
• Liaison offices
• Chambers
• Business Associations

40
EU programs / initiatives available in RCM

• Gate2Growth a network of innovation financing
  bodies, intermediary organizations in the field
  of innovation and technology transfer and public
  research organizations aiming at strengthening
  the liaisons between public and private sector.
• Gate2Growth addresses to well established
  innovative enterprises all over Europe that seek
  European venture capital for their further
  development. The Greek contact point for G2G is
  located in RCM (Thessaloniki Technology Park)

• The network of Innovation Relay Centers consist
  a starting point for innovative SMEs that need
  assistance in developing transnational
  collaborations with special regard to technology
  transfer.
• Two IRCs operate in Greece having as well
  antennas in the region of Central Macedonia
  providing a range of specialized business support
  services to technology oriented SMEs.

41
EU programs / initiatives available in RCM
Initiatives referring to the improvement of the
business and innovation environment through the
development of specific strategies and policies
(1/3)

• Innovative Actions give disadvantaged regions
  the opportunity to implement specific projects in
  order to respond to the challenges set by the new
  economy. Excellence in Central Macedonia was
  implemented under Innovative Actions
• Objective was to make the companies and
  technology intermediary organizations of the
  Region familiar with the latest, on a world
  scale, advances in business, technological,
  production, and manufacturing practices.

42
EU programs / initiatives available in RCM
Initiatives referring to the improvement of the
business and innovation environment through the
development of specific strategies and policies
(2/3)

• Innovating Regions in Europe (IRE) network, is
  the joint platform for collaboration and exchange
  of experience for regions that are developing or
  implementing regional innovation strategies and
  schemes
• Aim is to give member regions access to new
  tools, schemes and inter-regional learning
  opportunities on innovation promotion, in order
  to improve their ability to boost innovation and
  competitiveness among regional companies.  

43
EU programs / initiatives available in RCM
Initiatives referring to the improvement of the
business and innovation environment through the
development of specific strategies and policies
(3/3)

• INTERREG IIIC program helps Europes regions
  form partnerships to work together on common
  projects. By sharing knowledge and experience,
  these partnerships enable the regions involved to
  develop new solutions to economic, social and
  environmental challenges.
• Under INTERREG IIIC East, several projects are
  being implemented in the Region of Central
  Macedonia aiming at improving the effectiveness
  of policies and instruments for regional
  development and cohesion through large scale
  information and know-how exchange and sharing of
  experiences among European regions.

44
Awareness raising

• Raising awareness on the creation prospects of
  new innovative start-ups and spin-offs is still
  at low levels
•  
• CERTH will try to mobilize key players through
  the following activities
• The main conclusions of this report will be
  presented during experts group meetings, with the
  aim of identifying areas and ways of intervention
• Networking with other regional policy related
  projects (other INTERREG IIIC projects running in
  RCM, the forthcoming Innovation Pole initiative
  etc) will be a means of information diffusion to
  a larger audience of regional experts.

45
Conclusions

• RCMs research and innovation capital is
  remarkable BUT its capacity to transform it into
  innovative entrepreneurial activity remains at
  low levels.
• Limited existence of venture capital and the
  total inexistence of seed capital
• The effectiveness of all interventions (through
  regional / national initiatives) is not secured
  to the extend that their sustainability strongly
  depends on financing from the public sector.
•  
• The participation of the private sector in the
  effort to foster innovative entrepreneurship is
  very limited
• The public character of RD structures favored
  the development of culture and practices that far
  differ from these of the private sector
• Weak coordinated actions of both sectors for the
  exploitation of research results through the
  development of start-ups and spin-offs

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Questions / Topics for discussion

• What kind of motives does the research community
  need in order to develop entrepreneurial culture?
• What kind of motives does the private sector
  need in order to invest in the exploitation of
  research result?

• How to address the issue of legal framework
  between research organization and spin-off
  companies?

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THANK YOU FOR YOUR ATTENTION !
Center for Research and Technology
Hellas (CERTH) www.certh.gr
Katerina Papadopoulou Responsible for SEED-REG
implementation ?el 30 2310 498206 Fax 30
2310 498280 E-mail kpap_at_thestep.gr