PROMOTING RESTRUCTURING OPPORTUNITIES FOR AN ACTIVE CHANGE PROACTIVE CHANGE
PROMOTING RESTRUCTURING OPPORTUNITIES FOR AN ACTIVE CHANGE PROACTIVE CHANGE
TUTTI I DIRITTI RISERVATI È vietata la traduzione, la memorizzazione elettronica, la riproduzione totale o parziale, con qualsiasi mezzo, compresa la fotocopia, anche ad uso interno o didattico. L’illecito sarà penalmente perseguibile a norma dell’art. 171 della Legge n. 633 del 22/04/1941 © 2014 by Umbria Export Via Palermo, 80/A , 06124 Perugia, Italy http://www.umbriaexport.it
COMMON APPROACHES COLLECTION INDEX FOREWORD EXECUTIVE SUMMARY CONTENTS CHAPTER 1. Brief global economic crisis overview • •
1.1 UE: economic effects overview 1.2 Macroeconomic Analysis: ITALY, SPAIN, BULGARIA, GERMANY, ROMANIA
CHAPTER 2. RESTRUCTURING BEST PRACTICES: • 2.1 FINANCIAL POLICY COUNTRY: ITALY Gepafin: Umbria’s Financial Agency COUNTRY: BULGARIA Sofia Mucipality Fund •
2.2 INDUSTRIAL POLICY COUNTRY: GERMANY Masterplan: Industrial Master Plan City Berlin 2010-2020 COUNTRY: ROMANIA Pirelli: the world’s major Tyre Companies
2.3 RESEARCH, DEVELOPMENT AND INNOVATION COUNTRY: ITALY I-START: Umbria programme for innovation COUNTRY: BULGARIA Sofia Tech Park COUNTRY: SPAIN Educational Innovation Network
COUNTRY: SPAIN Delta Business Centre COUNTRY: SPAIN CID – Cells of Innovation Development COUNTRY: SPAIN Viladecans SMART •
2.4 TRAINING COUNTRY: ITALY ITS: Higher Technical Institute, Umbria COUNTRY: BULGARIA Informal ecomomy COUNTRY: GERMANY Duales ausbildung System COUNTRY: GERMANY Duales Lernen
2.5 INTERNATIONALIZATION COUNTRY: ITALY Umbria Export: Change in legal framework: from consortium to non-profit limited liability consortium COUNTRY: GERMANY Land of Ideas
2.6 CLUSTERING COUNTRY: ITALY Business Network Contract COUNTRY: BULGARIA Social Enterprise Cluster for the sustainable development COUNTRY: BULGARIA Bulgarian Furniture Cluster Belin partner fur wirtschaft und technologie COUNTRY: ROMANIA Green Energy Innovation Biomass Cluster COUNTRY: ROMANIA Automotive South West Competitiveness Pole COUNTRY: ROMANIA
Cluj IT Innovation Cluster COUNTRY: ROMANIA Oltenia Tourism – Innovation and Tradition in Tourism COUNTRY: GERMANY COUNTRY: SPAIN Vi LIDERS – transforming from a reactive leadership model to a creative leaderhip CHAPTER 3. FINAL CONCLUSION CHAPTER 4. BILBIOGRAPHY, WEB SITE Annex 1: partners description
Companies and their workers must continually adapt in response to technological developments, shifting consumer preferences, or changing competitorsâ€™ strategies. The ability to smoothly and successfully adjust to change is fundamental to succeeding in the modern, complex and fast-moving business environment. Economic and sovereign debt crises as well as rising global competition have emphasised structural weaknesses in European economies and highlighted the need for reforms. EUâ€™s top priority must now be to return to a sustainable and job-rich economic growth. It is of key importance that policy makers at different levels in cooperation with social partners create framework conditions which help companies adjust to change smoothly, driving innovation and boosting productivity. On the other hand, adaptability of workers should be facilitated so that even when facing redundancy they can stay confident that they will have possibilities and skills to access opportunities available in other jobs and sectors. This report is the result of cooperation between five EU countries aimed at improving the effectiveness of actions in the field of change management. Within the framework of the project, the participants exchanged experiences e.g. on local development policies, labour market measures supporting effective change management, skills development, support for innovation and internationalization. The report provides an insight into diverse experiences of companiesâ€™ reorganization processes. It shows that, as also underlined in the EC Communication on the Quality Framework for the anticipation of change and restructuring, change processes are more likely to be successful when different actors involved prepare for change (e.g. through investing in human capital to be ready for future challenges) and actively manage it (e.g. through effective communication and efforts to assist displaced workers in finding new jobs). It can serve as an inspiration for workers, companies, social partners and public authorities in other parts of the EU.
Maxime Cerutti Social Affairs Director Business Europe
EXECUTIVE SUMMARY general context, aims, target groups, methodology This report describes the findings of the EU project ‘Promoting Restructuring Opportunities for an Active Change’ (PROACTIVE_CHANGE), financed by the European Commission’s Director General Employment, Social Affairs and Inclusion, under the umbrella of the Progress Programme 2007-20131. The project aims at promoting exchanges of information and experience and developing and disseminating the capabilities of the parties taking an active part in restructuring and promoting the development of good practices in Europe. The aim of this report is to encourage further development and dissemination of experiences as underlined in the European Commission’s Communication on Restructuring and Employment2 and the Green Paper on “Restructuring and anticipation of change: what lessons from recent experience?”3. The project has identified several sectors which are both vulnerable and of particular importance to the regions involved such as: automotive, industrial equipment & tools, agricultural machinery, avionics and mechatronic systems. Anticipating restructuring which is intended as the identification and support of the structural changes that occur in the production, is the result of different initiatives that, together, analyze the current and future developments in several key areas: • productive sectors • innovation • the labour market • the system of knowledge (education, training and research) • aggregation, clustering and internationalization While coordination and integration of these five areas are essential to harness positive outcomes, the success of the project lies in properly defining strategies for anticipating and managing restructuring in order to reduce unemployment and to create new job opportunities. The inclusion of specific interventions such as supporting investments in innovation, promoting training or retraining and properly defining strategies that can be adapted to different situations, are all important contributing factors for positive outcomes. 1 Decision No 1672/2006/EC of the European Parliament and of the Council of 24 October 2006 establishing a Community Programme for Employment and Social Solidarity — Progress, JO L 315 of 15.11.2006. 2 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2005:0120:FIN:EN:PDF 3 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2012:0007:FIN:EN:PDF
Through seminars, round tables and training workshops, the project shares lessons learnt from past experiences in the countries of participating partners with a territorial approach and implement best practices in order to revitalize the debate on future perspectives at EU/national/regional level on possible proactive approaches to restructuring promoted by social partner organizations and other stakeholders in restructuring processes and in the anticipation of needs and skills (public authorities, innovation centers, training centers, development agencies). The focus of the project is on sharing positive experiences, measures or actions to better anticipate restructuring among partners from five European countries (Bulgaria, Germany, Italy, Spain and Romania) in the target sectors. Chapter 1 presents an overview on European and national/local economy trends regarding: GDP flow, employment rates, export, financial crises. Chapter 2 provides a brief description of the meaning of restructuring and best practices identified during the projectâ€™s training sessions which have already been implemented in each country, region and territories. The 25 best-practice cases that have been chosen refer to different levels of government in different sectors: financial policy, industrial policy, research, development and innovation, training, internationalization and clustering. Chapter 3 concludes with suggestions for the future that emerged during the projectâ€™s implementation.
CONTENTS CHAPTER 1. Brief global economic crisis overview â€˘
1.1 UE: economic effects overview
After being hit by a long recession since 2008, Europe, even if slowly and at different rates, is starting to give first signs of recovery. Economic growth continues to be hampered by the difficulty of access to credit for businesses and the public debt of amministrations and it will take a time before the GDP returns to the levels of pre-crisis growth. It is estimated an increase in GDP in 2014 of 1.6% and 1.2% respectively in the EU and the euro area, with better prospects for 2015. Expansive monetary policies have encouraged the recovery of financial markets, the recovery of the stock markets and the drop in inflation. With regard to the labor market, employment levels have started to respond as early as 2013, showing a slight increase in the rates of labour force and a halt in the unemployment rate. Inflation in 2015 is expected around .2% in the euro area and 1.5% in the EU. Despite tentative positive signals, the absence of structural reforms, fiscal and institutional market uncertainty undermines the possibility of a future and sustainable recovery. Private investment and the internal market will play a key role even if the extremely high levels of unemployment will dampen the momentum. For vulnerable countries competitiveness will be supported by the gains arising from the foreign market, thanks to the low cost of raw materials, primarily labor costs, although the appreciation of the exchange rate does not favor European exports. Siim Kallas, Commission Vice-President to quote: â€œThe recovery has now taken hold. Deficits have declined, investment is rebounding and, importantly, the employment situation has started improving. Continued reform efforts by Member States and the EU itself are paying off. This ongoing structural change reminds me of the profound adjustment that the central and eastern European economies undertook in the 1990s and in subsequent years, linked to their joining the EU exactly 10 years ago. Their experience shows how important it is to embrace structural reforms early on and to stay the course, whatever challenges may be faced along the way. In this spirit, we must not lessen our efforts to create more jobs for Europeans and strengthen growth potential.â€? 1.2 National Macroeconomics Analysis ITALY, SPAIN, BULGARIA, GERMANY, ROMANIA: National and local context,
brief description about the current situation. Business climate indicators such as: GDP, inflation rate, unemployment rate, import/export rate, doing business, index of economic freedom. UMBRIA OVERVIEW - Italy The regional scenario is part of a national economic picture that has registered a setback due to the global crisis. 2013 was the fifth consecutive year of considerable uncertainty, although there has been some tentative signs of recovery in large companies in terms of production and sales. Conversely, Umbrian SMEs and on account for the majority of the regional economies do not show promising signs. Umbria recorded in the last ten years a deterioration in economic productivity superior to the national average both on economic activity and on employment performance, recording a GDP growth below that of the national average. The factors that have infl uenced this trend are of two types: economic and social. On one side, the strong foreign component with impact on service provision and consequently on public spending, population growth that has generated an equally obvious GDP growth income and consumption. On the other, the economic fabric of Umbria characterized largely by small and medium enterprises concentrated on labor-intensive types not oriented to product innovation and foreign markets and with a productivity that was structurally lower than the national average which caused a loss of competiveness. The production base during the crisis, however, has undergone a process of restructuring and internal reorganization that led to an increase of capital companies and reduced the number of individual firms and artisan workshops. The labor market has suffered a slump after the crisis despite the significant use of social security. 2013 saw an increase in the unemployment rate while remaining below that of the national average but breaking away from the northern regions of the center, especially in the manufacturing and construction industries. This position is due mainly to the positive performance in the years before the crisis. Phenomena such as the spread of temporary work, high youth unemployment, unemployment of the better educated, unemployment of people over 40 and unemployment of the less educated linked, in particular, to the foreign population are increasing in numbers more than anywhere else in Italy. Moreover, there was an increase of NEET with significant differences between the two provinces of Perugia and Terni. Regarding exports, with the exception of the steel market in which there has been a
decrease in 2013 the change was positive (+ 7.3%). In terms of credit to the productive sector this has decreased and the residual demand is increasingly oriented to debt restructuring and working capital and new investments in production. On the other hand, the tightening of credit affects firms with fewer than 20 employees striking further companies with more needs. The economic situation of Umbria is the “consequence” of some typical structural problems such as the increase in the composition of GDP tertiary non-market services, i.e. those not linked to production by the lower return on investment, position in the value chain and the fragmentation of the production base. The thinning of the return on capital produced negative effects on employment. As for the digital agenda, the region is characterized by the diff usion of ICT in the public sector and public financial support to the sector but the use of ICT remains inadequate in enterprises. In general the economic situation seems to have widened even more the distance between large and small enterprises. In 2014 the growth will be mild and selective, rewarding subjects able to innovate and be competitive. It will likely be a jobless recovery and on will not result in a total resorption of jobs lost with a new request for employment. A strategic reorganization, multilevel and multi-stakeholder. is required for region to be competitive.
Bulgaria Bulgaria has come a long way from its turbulent political and economic transition in the 1990s to becoming a member of the European Union in January 2007. In the decade leading up to EU accession, Bulgaria embraced difficult reforms to build macroeconomic stability and stimulate growth. Its economic situation improved during the last decade but there are still strong developmental differences among its regions: if one discounts the south-western Bulgaria economic region – which includes capital Sofia and accounts for half the country’s GDP– the other five economic regions have consistently ranked in the bottom six of the annual regional development rankings published by EU’s statistics office Eurostat. North-eastern Bulgaria, the area hit worst by unemployment and demographic changes over the past decade, contributes only 7.4 per cent of the country’s annual GDP and ranks as the least developed region in the EU, at 28 per cent of the bloc’s average. In order to better understand this economical and developmental discrepancy, it is
possible to focus on two Bulgarian districts, Sofia (Capital) and Montana. At the end of 2012, 1.3 million people lived in Sofia (the capital city), or nearly 18% of the population of the entire country. In economic terms, Sofia (capital city) is the best-developed Bulgarian district. GDP per capita in the capital never stopped growing even in the period after 2008, and continues to be more than double the size of the national average. The average level of income in the district (BGN 6,403 per household member in 2012) is significantly higher than in other districts, and the difference continues to increase. Employment of the population remains significantly higher than in most districts; in 2012, 55.7% of those over age 15 were in employment. In 2012, there were 281 schools in the capital city, providing education to about 120 thousand school students. The educational system in the capital also records some of the lowest levels of early school dropouts: 0.8% of children do not complete their education. The relative share of the population aged 25 to 64 with tertiary education in the capital city was 43%, at an average of 24% for the country. The healthcare system in the capital city is well developed, and a large number of healthcare facilities of national importance are located here. The capital is the absolute leader in infrastructure development. Most of the main roads in the capital city and sections of the ring road have been renovated in past several years. The density of the railway network in the district is four times higher than the national average. The largest international airport in the country is also in the district. The main problems of the capital city are associated with the high levels of local taxes and charges, an administration that is insufficiently effective, and the polluted environment. Montana District is the least developed region in the European Union. Economic activity remains weak, which determines the low standard of living in the district. The district reported BGN 4,849 GDP per capita in 2010, which represents the fourth lowest GDP per capita in the same year. Unemployment has continued to grow since 2009 and in 2012 reached almost 15%. Montana District continues to be unattractive to foreign investors. The accumulated foreign direct investments by the end of 2011 were only 25 million euro. Investment is limited and the implementation of infrastructure continues to be delayed. Only 22% of the road surface is of good quality, at nearly 40% nationwide. In 2012, Montana was one of the twelve districts in which the quality of roads has continued to deteriorate. In 2012, 37.5% of households in the district had access to the Internet, which is significantly below the national average (50.9%). The quality of healthcare and education in the district is rated as unsatisfactoryand the negative demographic processes are among the most intense in the country. Since 2003 there have been no significant changes in the structure of hospitals in the district. The quality of education in the district is inadequat, the proportion of dropouts from primary and secondary education (3.0%)
is higher than the national average (2.4%). In 2012, 18.1% of the local population aged 25 to 64 years had tertiary education, which is significantly lower than the national average (24%). However, the district received one of the highest marks in the country in taxes and administration category, which is primarily the result of the lower rates of local taxes and charges and of the extremely low perception of corruption in the district.
Germany Today Germany represents one of the strongest and most secure economies of Europe and indeed the world, representing the 5.86% of the world economy. Despite the economic crisis, and the consequent negative flexion occurred between 2008 and 2009, the German Domestic Product (GDP) has reached and overcome the pre-crisis level (3,634,822,579,319 $ in 2013).
World DataBank, World Development Indicators (GDP ($)) While many factors can be attributed to this success, it is interesting to consider the relation between a fast economic recovery and the level of public investments in education and research. In Germany, the latter remained constant during the entire crisis (3% of GDP1), while the former is even increased during the same period (as it is shown in the graph below).
World DataBank, World Development Indicators.
In fact, we can notice an exception to this trend only during the period 2011-2012, but nonetheless this amount still remain higher than the pre-crisis one. So the trend is clearly confirmed. It is clear, by the data exposed, a specific attention by the public authorities to the matters of research and education, considered as primary engines for the economic recovery. Strictly connected, and for certain aspects complementary, to the previous elements is the consideration of the relative low costs for the establishment of a start-up, kept between 5%-6% of GNI per capita for the entire crisis period.2 All these information clearly denote a specific vocation by the public authorities towards the creation of an overall economic environment able to compete and face the problems arise by the crisis and the economic globalization. The result obtained, as indicated by the first graph, is clearly positive. World DataBank, World Development Indicators (Education expenditure ($))
Federal Statistical Office (Unemployment Rate (%)) Nevertheless, even if important, the GDP indicator does not explain entirely the success of the German strategy on its economy. Another very important indicator is found in the unemployment rate. This is very significant in indicating the success (or fiasco) of an economy with a specific focus on the concrete life of the people. Moreover, the rising unemployment is one of the main problems affl icting many European Countries, especially Mediterranean ones. The trend shows a rise of unemployed people just before the beginning of the crisis, while since the 2006 it is notable a semi-constant decrease of this rate, demonstrating the correctness of the policies and the practices adopted. 2
World DataBank, World Development Indicators.
Romania Before the financial crisis of 2007, Romaniaâ€™s GDP registered an average annual increase of 7% since 2004. These high growth rates were due to investments in nonmarketable sectors (for example, construction) and to the consumption of imported durable goods. When the crisis broke out in 2007, Romaniaâ€™s economic growth relied on its domestic consumption. This generated two consequences: an increase in the current account deficit, which peaked at 13.6 % of GDP in 2007, and second, the rising indebtedness in the private sector to banking loans. Romania was directly affected by the crisis in the last quarter of 2008, when the evolution of economic indicators took a sudden turn for the worse. Industrial production and domestic consumption accelerated their declining tendency and budget revenues collapsed. The budget deficit and current account deficit aggregated financing needs amounted at the end of 2008 to over 20 % of GDP. Under the circumstances, considering the major financing difficulties affecting the capital markets at that time, the Romanian authorities were forced to seek some support from international financial institutions. While at the end of 2008, the net annual average salary in the country experienced an annual increase of 23 %, this dropped to 7.7 % in 2009 and to 1.8 % in 2010. The growing unemployment and contracting economy resulted in a decrease of budget revenues, with a direct impact on social security. The social security budget experienced a deficit of 2.3 % of GDP in 2011. Nevertheless, this situation only partially reflects the effects of the economic crisis, as the actual problem is the high dependency ratio. Romania was able to quickly escape from the depression because of a careful and forwardlooking macroeconomic and financial administration that helped the economy in relocate part of their enterprises in Romania, thanks to the recent increase in employment that has lowered the labor price. At the same time, the government engaged in a process of restructuring public sector employment. According to data provided by Eurofund, in 2010, the peak year of austerity, Romania was the EU champion in job re- structuring, with 78,700 jobs terminated, representing 21 % of the total jobs terminated in EU countries. Of the total jobs terminated, 60,610 were government positions, representing over half (54.64 %) of the total government positions eliminated in the entire EU. Another structural reform component included the de- regulation of certain administered prices, as well as the privatization of certain companies. In particular, the deregulation of natural gas prices, which had been delayed for years, is being gradually introduced since 2013 and will continue until 2018. The nationalized energy sector is seeking private investment, while the affl uent health care system is improving as well. Romania is also improving its public works investing in infrastructure and communications system will improve the productivity of industries and the well-being of the
economy. Many of the measures adopted by authorities at the beginning of the crisis were mainly aimed at protecting the labor market. Thus, they focused on encouraging investment by means of tax exemptions on reinvested profit. In fact, according to the data from the National Bank of Romania, Foreign Direct Investments, in the first quarter of 2014, had reached upon of 570 milion euro, with an increase of 30.1% compared to 2013. In the last 5 years FDI had registered decreasing values, and in 2011 the value had reached the lowest value in the last 10 years (-18,2%). But in the last two years its value restarted to rise (2012 +17, 8%; 2013 +26,8%). The political sphere played an important role in aggravating the effects of the crisis in Romania. The payroll costs in the public sector almost doubled in the fourth quarter of 2008. The general elections of November 2008 were the main reason for such increases, as the parties in power attempted to gain popularity by raising votersâ€™ salaries. The additional payroll costs and other additional costs of the government related to goods and services generated in the last quarter of 2008 alone a deficit of around GDP 3%, which put even more pressure on future levels of the public debt. From the end of 2008, the public debt increased by 150% of GDP, from 13.4% to 33.4% in 2011. The crisis had a heavy impact on the labour market. However, the initial adjustments were made mostly by the private sector. The layoffs in industry, construction and commerce totalled around 315,000 employees at the end of 2009, in other words, over 85% of the total redundancies in the economy. Overall, the number of redundancies contracted by 13%, from the peak of 4.8 million reached in May 2008 to 4.2 million in June 2011. As a consequence of this alarming situa- tion, many of the measures adopted by authorities at the beginning of the crisis were mainly aimed at protecting the labour market. Thus, they focused on encouraging investment by means of tax exemptions on reinvested profits exempting the companies that hired unemployed persons from the payment of social security contribu- tions for a period of up to six months, deferring the payment of taxes by companies for up to six months, introducing technical unemployment, by which compa- nies were exempted from the payment of social security contributions in case of temporary suspension of operations or granting support to SMEs. Purchasing power declined. While at the end of 2008 the net annual average salary in the economy experienced an annual increase of 23%, this dropped to 7.7% in 2009 and to 1.8% in 2010. The growing unemployment and contracting economy resulted in a decrease of
budget revenues, with a direct impact on social security. The social security budget experienced a deficit of 2.3% of GDP in 2011. Nevertheless, this situation only partially reflects the effects of the economic crisis, as the actual problem is the high dependency ratio. The significant adjustment of the budget and current account deficits drastically reduced financing needs by the end of 2011. However, the evolution of Romania’s economy continues to be largely dependent on the evo- lution of the EU economy.
VILADECANS CITY COUNCIL - Spain The productive fabric of Viladecans comprises 1,342 companies and 3,760 selfemployed workers, which represent a total of 10,114 workers. 77% of the companies and 76% of the self-employed people develop their activity within the services sector - where 74% of the salaried persons are employed. The companies’ average size is 7.54 workers, below the average of the municipalities of the Metropolitan Area of Barcelona (11.37). 98% of the companies have less than 50 workers and represent 58% of the salaried employees. The 5 largest companies in town employ 17% of workers. In recent years, the percentage of working population employed in large firms has increased by almost 10%. The number of Viladecans’ inhabitants registered in the Social Security system is 26,058, while the total number of registrations of all the companies located in Viladecans is 14,130, which represents a ratio of 1.84 registrations of Viladecans population per working centre. The estimated working population in Viladecans is 35.023 people, which represents 53,5% of the total local population. The number of unemployed people is 6.221, while the unemployment rate is 17,8%, (2 points above the average of the municipalities at the Metropolitan Area of Barcelona and Catalonia (15,8%)). Women are more affected by unemployment (19,9% women’s unemployment rate in comparison to 16% men’s unemployment rate). Youngsters below 25 years and people over 45 years are also another population sector suffering from higher unemployment rate (16,8% and 24,9% unemployment rate, respectively, in comparison to 14,1% unemployment date for people between 25 and 44 years). In comparison to year 2012, unemployment rate has been reduced by 4,4%, a
reduction rate higher than the average of the municipalities in the Metropolitan Area of Barcelona (-3,7%) and of Catalonia (-3,4%). As regards to 2007, the unemployment rate in Viladecans has increased by 10%, being the 2012 unemployment rate the higher registered (18,6%). 82% of the unemployed people confirm to have primary or secondary education, only 5,6% claim to have higher education and more than 64,2% come from the service sector.
Within this framework and taking into account the reality of the municipality environment (metropolitan localisation, connection with goods and person transport infrastructures, availability of land for different economic activities, connectivity with communication technologies…) Viladecans City Council lays down the objectives and sets the actions that allow fostering social and economic development. The main pillars of the action are based on sustainability, innovation and knowledge; the collaboration and the synergies among the different stakeholders on the territory; as well as equal opportunities, inclusion and social cohesion. Thus, the main objectives on which the actions and the municipal services are based are: • To attract inversions and new economic activities, to increase employment, by establishing a company-public administration relation based on values (VILADECANS&CO) • To ease and speed up the procedures for settling new activities (one single Business office) • To enhance the entrepreneur culture and to support the creation of companies as well as the business consolidation.
• • • •
To improve the business competitiveness (business management, innovation, Leadership, technology …) To improve the professional qualification of the employers taking into account the evolution of the activity sectors. To bring closer the employment demands of the employers and the employment offers of the companies. To implement projects addressed to labour inclusion of those groups at risk of exclusión.
CHAPTER 2. RESTRUCTURING The word ‘restructuring’ has several meanings and some definitions of restructuring might include events that do not have any impact on employment levels or that, through a reorganisation of work, may have an impact on the workforce in some other way. Similarly, the relationships between restructuring and employment are neither simple nor straightforward. The term ‘restructuring’ has come to be associated with the enactment of structural change below the macro or national level: there are reports of the restructuring of sectors, companies and establishments. Restructuring is also seen as more of an active process initiated by employers, in contrast to the more passive and deterministic long-term forces of structural change and economic development. 1 The ERM database on restructuring support instruments contains 421 measures (August 2013) implemented by public authorities or social partners at national or regional level in all Member States of the European Union and Norway to support companies, or their employees, affected by restructuring. We recognize two type of restructuring: •
Anticipation of restructuring refers to activities that help to prepare workers, companies or regions for change. It has a proactive character in terms of generating awareness of potential future changes and identifying as well as implementing means for adaptation before the actual change occurs (TRACE, 2006).
Management of restructuring comprises activities to handle operationally a current restructuring event, including solutions to minimise social costs.15 It deals with shaping a specific organisational change process, hence the individual steps involved in the realisation of the company restructuring (Bechert and Schytke, 2008).
Among the collected support instruments, about two thirds are related to anticipating change. In contrast, two thirds of the presented legal regulations deal with the management of change.
Restructuring in Europe, 2011. Pag. 20
Types of support instruments and legal regulation by phase of restructuring
The worldwide crisis caused an increase in the number of restructuring due to the higher incidence of bankruptcies and closures and these cause effects in the empplyment trend, with six million fewer people in employment now than at the outset of the crisis. Unemployment rates have risen from below 7% pre-crisis to 11% in mid-2013 (over 12% in the Eurozone countries). Current economic activity levels are above those before the crisis only in seven European countries (Belgium, Germany, Malta, Austria, Poland, Slovakia and Sweden). For the EU27 as a whole, output is still 3% lower now than before the crisis. Moreover, recent forecasts raise concerns on the
extent of the economic recovery and its effects on labour markets. The European Commission predicts another small contraction of economic activity in 2013 and a modest growth just above 1% in 2014. As a consequence, aggregate unemployment rates are forecast to deteriorate further; rising above 11% in 2013 and 2014 1. Employment and output change, EU28, 2003â€“2013
Five years after the global financial crisis, the European employment outlook remains uncertain. Large disparities between countries persist and relate primarily to contrasting trajectories before, during and after the crisis. The figure above shows the change in output (real GDP) and employment both before and after the crisis. All countries except Hungary experienced expansion in employment levels in the period of economic growth before the crisis, although to varying degrees. All countries also experienced even stronger output growth than employment growth corresponding to increased productivity per worker. However, once the crisis struck clear crosscountry divergences in labour market performance and output emerged. The overall dramatic impact of the crisis in labour markets is reflected by the fact 1 European Economic Forecast, Spring 2013, European Economy 2/2013. European Commission, DirectorateGeneral for Economic and Financial Affairs. http://ec.europa.eu/economy_finance/publications/european_ economy/2013/pdf/ee2_en.pdf
that there are only seven countries where employment levels in the first quarter of 2013 were above those registered in the same period of 2008: Germany, UK, Austria, Sweden, France, Luxembourg, Belgium and Malta. Many countries have already experienced a ‘lost decade’ in employment terms; in Hungary, Spain, Denmark, Greece, Croatia, Lithuania, Latvia, Romania and Portugal, current employment levels are at or below those recorded ten years ago, five years before the onset of the crisis. For two troika ‘programme’ countries, Greece and Portugal, the decline in employment has been unabated since the crisis and has come in conjunction with a ten-year contraction of output. Italy too has experienced a contraction of output, but employment consequences have been relatively muted to date. Between 2003 and 2013, the ERM recorded 14,776 cases of large-scale restructuring in Member States. The number of cases of announced job losses was almost double that of announced job creation (9,503 compared with 5,363 cases). Total announced job destruction associated with these cases was almost double that of total announced job creation (4.75 million as compared with around 2.72 million). Figure 14 below shows the evolution in the magnitudes of both announced job losses and gains2. Announced restructuring job loss and job gain
Before the economic crisis, between the first Quarter of 2003 and the second quarter of 2008, the sector that most contributed to announced job losses and gains was manufacturing (just over 40% for each category). Manufacturing job losses increased modestly in absolute terms from the pre-crisis to post-crisis period. 2
“Monitoring and managing restructuring in the 21sr century”, ERM Annual Report 2013, pag. 43
The (sub) sectors with the most job losses caused by restructuring were the same before and after the crisis â€“ auto/transport equipment manufacturing, transportation/storage, financial services and public administration. The European economy has been slowly recovering, but faces headwinds. Restructuring policy includes not only the labour dimensions but also the industrial and social impact reforms and regional policy. Stronger domestic and export demand are needed, but after the crisis the question is whether European industry is in a position to benefit from these. Looking at investment, we can only arrive at one conclusion â€” additional investments are needed across all sectors to ensure that, post crisis, European industry can continue to compete with other regions of the world. For this, both financial resources and healthy domestic and foreign demand are necessary. 3 The Commission believes that presenting the good practices in this field developed throughout the years to all the concerned stakeholders can contribute to increased awareness and more effective and generalized implementation of anticipative, proactive and socially responsible management of change and restructuring to the benefit of all of these stakeholders and to society as a whole. The European Commission calls on Member States to support and promote the implementation of the QFR through appropriate means and urges all stakeholders to cooperate on the basis of the principles and good practices outlined. The Commission will monitor the way in which the QFR is applied and consider the need to revise it by 2016. It will keep the European Parliament informed of the results.
Reindustrialising Europe, Member Statesâ€™ Competitiveness Report 2014, pag 6
BEST PRACTICES FINANCIAL POLICY The recent financial and economic crisis has already proven to be the worst of the last 100 years. It was generated by the financial markets and then spread to contaminate other more tangible markets. In its aftermath, European firms have suffered because of the credit crunch and the lack of credit has further damaged an overall investment capacity. Additional investments are necessary in order to mitigate the negative effects of the crisis, preserve industrial competiveness and guarantee post crisis recovery, investment, productivity, employment and expansion into international markets. Without investments, an industrial renaissance in Europe will prove extremely arduous to achieve. EU Member States confront this task in various manners. Access to alternative financing sources has improved in many Member States with an aim to strengthen loan guarantee systems and transfer financial information. Moreover, Member States have improved their access to alternative sources for their financing needs. Nevertheless, direct access to capital markets remains mainly accessible to large businesses to difficult for SMEs. In Europe, however, SMEs are the main source of economic growth and the creation of new jobs. These firms often face difficulties finding capital to finance research and development of new products and/or access new markets. In Europe, external sources of finance for companies remain largely bank based. Bank loans are the single most important source of external financing for SMEs. They are the second source for large corporations. However, bank credit has not proven sufficiently efficient. Alternative sources of finance are rarely used. Hence, low availability of capital hinders businessâ€™ development and hampers the growth of innovative companies. To face long term investment and sustainable growth, firms need access to long term financing. This depends on the capacity of the financial system to put to use government savings, household and corporate income. Significant long-term investment will be needed under the Europe 2020 strategy and the 2030 climate and energy package, in infrastructure, new technologies and innovation, R&D and human capital. Investment needs for transport, energy and telecom infrastructure networks of EU importance alone are estimated at â‚Ź 1 trillion for the period up to 2020 as identified by the Connecting Europe Facility.1
Commission roadmap to meet the long-term financing needs of the European economy.
To support long term strategy, in 2014 the Commission published “Communication on long term financing of the European economy” which focuses on mobilising private sources of long term financing, making better use of public funding, developing European capital markets, improving SMEs’ access to financing, attracting private finance to infrastructure to deliver on Europe 2020, enhancing the wider framework for sustainable finance. In order to overcome the lack of credit flow, in June and September 2014, the European Central Bank implemented a series of monetary policy measures such as interest rate cuts, and claimed to be ready to use unconventional instruments if necessary. The current growth forecasts for the European economy indicate that industry should have at its disposal around € 225 billion of additional private credit for 2014 to 2016. The banking system and industry have an opportunity to benefit from the policy measures adopted at European and national levels. If both demand for and supply of credit respond to policy, industry could recover from the investment downturn that it has seen since 2009. If innovation is a precondition to being competitive in foreign conuntries, given that innovation requires investments, it follows that without investments European firms are doomed to being uncompetitive at both a national and international level. Financing conditions for SMEs continue to differ significantly across the euro area.
GEPAFIN - Umbria’s Financial Agency ITALY Introduction Established in 1987, Gepafin is the central Italian region of Umbria’s financial agency. Gepafin manages guarantee and risk capital funds created under specific provisions and measures laid down by the regional government of Umbria. Such funds are cofinanced by private resources. 54% of Gepafin company capital is owned by the Region of Umbria (directly or through another in-house agency, Sviluppumbria). The remaining 46% is owned by 11 banks (national and local) which operate in Umbria. The agency also makes financial tools available to citizens in Umbria for housing projects and/or to support family income. Gepafin, in addition to the management of the funds assigned by the Region of Umbria through EU Structural Funds, also has access to other resources assigned to boost the competitiveness of regional SMEs. These latter funds derive from the European Investment Fund (EIF) and the Italian government. Gepafin offers two main types of financial services to regional SMEs: • Guarantees on bank loans; • Risk capital. During the first phase of the recent economic crisis, the regional banking system offerted substantial support to local enterprises in Umbria. However, following 2011, a phase of credit contraction began. The reasons for this were mainly: • the erosion of capital following an increase in economic distress. • the future equity requirements provisions laid out be Basilea 3 requisites. As a result of this latter part of the economic crisis, Umbria witnessed a strong discontinuity in goals pursued by guarantee funds. Before 2009, said funds were almost exclusively reserved to fostering projects which entailed enterprise growth and the creation of investment programs. Soon after 2009, however, the same funds began being used in response to the immediate financial requirements of enterprises, especially with regard to: • sharp drops in revenue; • increases in time lag for the payment of business credits. Hence, Gepafin began studying a new response to guarantees in order to help sustain local enterprises. It was necessary to identify new elements of enterprise assessment
in order to help companies access credit from banks at reduced interest rates with Gepafin as their (partial) guarantee agency. All the national and international means to facilitate access to credit and new resources to SMEs and to others had to be explored. On the other hand, however, Gepafin itself also needed to ensure not losing capital. Thus, three new tools were developed: • Access to the Central Guarantee Fund. In may 2013, Gepafin was allowed to issue credit evaluations; • Agreement with SGFA (an Italian capital fund reserved to the farming industry) in order to offer counter-guarantees and credit insurance in agriculture; • Development of Covered Tranches through an agreement with Unicredit (Italy’s largest international private bank) which will activate a warranty on financed working capital of SMEs. In all of above measures, Basilea 2 compliant warranties can be issued. Furthermore, Gepafin went on to identify a multiplier of resources for business capitalization. It has identified certain areas which in turn are fully compatible with the business growth requirements. Hence, Gepafin has segmented its possible market into: • size (Large, SME, micro) • phase of enterprise life cycle (start-up, internationalization, etc.) • industrial sector In order to apply these new measures, Gepafin bought 15% of capital of SICI (an investment agency from the neighbouring central Italian region of Tuscany). Direct participation in SICI capital will give Gepafin hands-on experience on management of investments with risk capital as well as assessement of other corporate projects connected to others parts of central Italy.
1. Territorial scope Gepafin is a public-private financial agency, largely participated by the central Italian region of Umbria. It main line of operational resources is assigned by the regional government of Umbria through EU structural funds. It also operates with national and local banks in order to financially support SMEs in Umbria. Its geographical scope is therefore limited to the region of Umbria. The agency and its operations could however be easily replicated in other areas.
2. Area of application The measures applied by Gepafin are all fiscal and hence this paper is aimed at
fiscal policy. However, there is an albeit limited greater attention towards industrial projects presented by SMEs in clusters. The reason for this is obvious as larger, more solid companies within a cluster will provide more guarantee to the project. Smaller companies will benefit from this as will the larger company where it could perhaps not have economically exposed itself to/developed said project on its own.
3. Type of BP Gepafin’s traditional area of intervention is that of economic counter-guarantees towards banks when the latter issue lines of credit. Hence, this BP is aimed at news means of fiscal policy.
4. Stakeholders involved Gepafin and its shareholders: • the central Italian region of Umbria, which holds, 48.85% of the company’s capital; • Sviluppumbria (the region of Umbria’s development agency), which holds 6.97% of company capital, • Casse di Risparmio dell’Umbria (a group of local banks owned by Intesa SanPaolo, Italy’s second largest international bank), which holds 13.43% of company capital; • Banca Popolare di Spoleto (a local bank), which holds 10.73 of company capital; • Unicredit (Italy’s largest international bank), which holds 6.8% of company capital; • Banca di Mantignana e di Perugia Credito Cooperativo Umbro, a local bank with 3.41% of company capital; • Banca di Credito Cooperativo di Spello e Bettona, a local bank with 3.41% of company capital; • Crediumbria Banca di Credito Cooperativo, a local bank with 3.41% of company capital; • Banca di Credito Cooperativo di Anghiari e Stia, a local bank with 1.92% of company capital; • Banca Nazionale del Lavoro (one of Italy’s largest banks which belongs to BNP Paribas), which owns 0.55% of company capital; • Cassa di Risparmio di Orvieto, a local bank with 0.34% of company capital; • Monte dei Paschi di Siena, a local bank with 0.09% of company capital; • Sinloc – Sistema Iniziative Locali, a local public-private development and infrastructure promotion agency with 0.09% of company capital, SMEs of the central Italian region of Umbria are of course also the main stakeholders of Gepafin’s measures and actions.
5. Results obtained The newly applied financial policies have been an important measure towards
regaining entrepreneurial confidence towards the future. They provide an immediate answer to SME credit needs with an aim to assist business investments and company capitalization. In particular, one financial tool (tranched covered) particularly optimized Gepafin’s role as a guarantee agency by putting an extra Euro 20 million on the local market (a significant sum for a local economy). This new fund was activated as a co-guarantee mechanism together with the local system of private industrial guarantee consortiums. Hence, credit risks were distributed amongst a wider number of interested parties. In particular: • 1/3 of credit guarantee is issued by Gepafin; • 1/3 of credit guarantee is issued by the local private industrial guarantee consortiums; • 1/3 of credit guarantee is issued by the financing bank. This new measure was implemented rather recently and is still being applied. Nevertheless, the high number of guarantees issued and the very high number of beneficiary SMEs suggests the measure’s validity in supporting local industry, its survival and growth.
6. SWOT analysis STRENGTHS •
regional financial agency with public- • private participation which allows for • institutional authority with corporate management; willingness to search for and applu new measures to support local industry strong connection with all local banks which have also entered into the company’s capital
depends heavily on EU structural funds tranches covered mechanism depends on local private industrial consortium, These do not have large capital to invest
with local banks in Gepafin’s capital, • first-hand information on each company applying for a guarantee can be • assessed in order to provide the best possible credit solution; new financial measures can be constantly looked for
EU derived funding from the central Italian region of Umbria could be reduced the economic crisis could worsen. If bank interest should begin to soar again, it would be very difficult to continue to apply these measures or indeed identify new ones.
Conclusion Due to the scarcity of economic resources and until recently extremely high interest rates in Italy, attracting both private and public capital has become a vital necessity. Gepafinâ€™s mission can thus be defined as a serious attempt to answer this requirement by attracting, stimulating, and coordinating resources on industrial projects which look to the future. This has for the moment been successfully carried out by applying new and innovative measures to bank issued counter-guarantees.
MGFSME - Municipal Guarantee Fund for Small and Medium Enterprises BULGARIA Introduction The Municipal Guarantee Fund for Small and Medium Enterprises (MGFSME) was established by Sofia Municipal Council (SMC) in 2002. The Municipal Guarantee Fund undertakes guarantees on loans extended to SMEs which have their seat or develop their activity in the territory of Sofia Municipality. The Fund guarantees up to 50% of the loan of small companies and for an amount up to 100 thousand BGN. The Fund’s objective is to support SMEs by guaranteeing a part of credit risk on loans, extended by financial institutions to small and medium enterprises, registered or developing their activity in the territory. Another objective is to facilitate the access of SMEs to credit institutions and EU funds as well as to provide SMEs with consulting services concerning the possibilities for applying to Operational Programs of EU. MGFSME keeps its works within the program for the activities of the Fund adopted by the Sofia Municipal Council. In the process of preparing its program MGFSME took into consideration the priorities of Sofia Municipality and the necessity to implement the policy aimed at supporting small business in the territory of Sofia Municipality. The objectives of MGFSME are achieved through entry of agreements with commercial banks and other financial institutions, which exercise special programs for borrowing to small and medium companies.
Municipal Guarantee Fund guarantees loans, extended to companies which have their seat in the territory of Sofia Municipality or their business project has to be implemented in Sofia Municipality. The interventions provided and the partnerships and collaborations used for the implementation of the activities are addressed only for those companies that operate in Sofia Municipality’s territory.
Area of application
The best practice presents different and important areas of application as entrepreneurship business development, local development and financial policy.
First there was an examination of local needs and then a range of strategies were considered as well as operational structures and actions in meeting these needs and in seeking to create effective local development approaches. The overall impact of the project has been profound.
Type of best practice
Companies which apply for guarantee support by the Fund should meet the following requirements: • The seat of the company shall be in the territory of Sofia Municipality; • The business project has to be implemented in Sofia Municipality; • The company fulfils the requirements and criteria for SMEs settled in the Law for Small and Medium enterprises; • The company shall dispose of collateral on the loan which covers minimum 60% of the loan principal.
Priorities for supporting SMEs
The Municipal Guarantee Fund, in compliance with all requirements, assign a priority to projects: • depending on the category of entrepreneurs: • women-entrepreneurs; • disabled persons; • young entrepreneurs; • depending on the type of projects for funding : SMEs beneficiaries to the European Union and other specialized programs for SME financing by international financial institutions; business development in the peripheral areas and districts of Sofia Municipality; small family business; transport and transport services for citizens; services provided by physicians, dentists, therapists and psychotherapists; leisure - sports, cultural and youth activities; exportoriented industries; production of environmentally friendly products, machinery and equipment, contributing to conservation and environmental improvement; transfer of know-how and training of staff.
MGFSME provides companies with consulting services in the following areas: • Services connected to development of projects for applying to opened schemes of Operational Programs of EU; • Accounting Services; • Legal Services; • Management services
Services, connected to obtaining international certificates ISO 9001, 14001, assigning primary credit rating etc.
Local development promoted and implemented by the MGFSME is a process through which a certain number of institutions and/or local people mobilize themselves in a given locality in order to create, reinforce and stabilize activities using as best as possible the resources of the territory. Several strategic and important factors characterize this best practice and can mainly identify in the development and implementation of local management of employment and training policies, sustainable development of entrepreneurship, self-employment and job creation, development of local strategies and partnerships to combat unemployment and social exclusion and strong implementation of partnerships and co-operation with the private sector, subnational organisations. In fact, MGFSME consults entrepreneurs about developing projects to apply for the operational programs financed by the European Union and other international financial institutions, accounting, law, management issues etc., identifying and assessing innovations in job creation, entrepreneurship and local development. The Fund identifies the strong potential of the local development approach to help to regenerate the economies and societies of less developed municipality areas and to bring greater local participation in decision making and actions that underpin restructuring. It is important to note that this implemented process by MGFSME facilitates the implementation of local development policies put into place by responding to emerging challenges and takes into account innovations and lessons from elsewhere. It can be seen as an bottom-up attempt by local actors to improve incomes, employment opportunities and quality of life in their localities in response to the negative effects of the crisis to provide what is required, particularly in underdeveloped areas and areas undergoing structural adjustment. The involvement of networks of local and national stakeholders is a key defining feature of local development approaches. This type of approach is associated with the notions of leadership, participation, co-operation and trust. The mobilisation of local actors through local development initiatives helps to generate additional proposals for action and resources and competencies to help achieve them. These local development policies enable local actors to act as catalysts for development and draw on the ideas, energy and commitment of local people.
MGFSME achieves its objectives by concluding agreements with commercial banks and other financial institutions that realize special programs for SME lending. Providing with guarantees of MGFSME on loans extended to SMEs is done in two ways: • After a preliminary examination of the financial status of the company MGFSME directs it to bank-partners with an approval letter in which the Fund notifies the banks that the company covers the formal conditions for providing a MGFSME guarantee on the bank’s loan; • Bank-partners address to the Fund a proposal for guarantee support together with the documents concerning the approved loan. To fully achieve its goals, the Fund developed and established strong and extensive partnerships and collaboration with different stakeholders. This was in order to offer several and various different services and facilities to potential beneficiaries. The main stakeholders involved are Banks, private consultants, service companies and non profit organizations, as : • Allianz Bank Bulgaria AD • Bulgarian American Credit Bank • DSK Bank • Piraeus Bank Bulgaria AD • InvestBank Bulgaria AD • Municipal Bank PLC • First Investment Bank AD • Cibank PLC • Tokuda Bank AD • D Commerce Bank AD • Central Cooperative Bank PLC • Eurobank EFG Bulgaria AD For the Consultants the main partners are : • BIP Euroconsulting Group LTD • ICAP Group • Bulgarian Association for Development of Management and Entrepreneurship • Global Advisers PLC • Prime Consulting • Other private and individuals experts consultants MGFSME is also a means of integrating different policies and programmes at a local level, thus releasing synergies and improving co-ordination, and as a means
of improving local governance through involving local people and networks in the formulation and delivery of policy. Indeed, the local development initiatives promoted by the Fund have their origins in a grass-roots movement of local people and organizations, responding to issues of immediate local concern. The Fund, for specific initiatives and actions, develops strong collaborations and partnerships with other kink of stakeholders, strategic important for the local development, as non profit organizations involved in the process of social inclusion, chambers of commerce and entrepreneurships associations.
Objectives of MGFSME are directed towards the implementation of the policy of Sofia Municipality to assist small and medium business in its territory by providing financial institutions with guarantees on loans extended to SMEs registered and/or developing their activities in the territory of Sofia Municipality. Heretofore MGFSME supported more than 400 companies and thus contributed for loans of about 60 mln BGN. In most cases financial institutions and not companies apply to MGFSME and thus the benefit is bilateral â€“ companies get profitable lending and banks increase their clientele. The activities carried out by the Fund could reach in these last years several important outputs and results with a clear effect on local employment and incomes, for example through new firm start-ups, people entering self-employment and increased sales and exports by local enterprises. â€˘ SWOT analysis A comprehensive analysis of the Strengths, Weaknesses, Opportunities, and Threats of the Sofia Municipality Guarantee Fund that directly affect strategy development, considers several important and local factors as existing assets, natural resources, current business climate, and demographics, such as educational attainment levels of workers in the municipality area. Sofia, like many cities in central and eastern Europe, is now in the process of developing a strategic plan that will guide its future development and will contribute to the achievement of economic prosperity, social equity and more efficient governance. Like other capital cities in the region, Sofia is in many ways one of the main engines of growth for the national economy.
Networking and Partnerships. Good development of networking and partnerships with different actors and stakeholders present on the municipality territory, that allow to involve a large range of organizations that operate in the municipality’s area and to share knowledge and initiatives between different typologies of organizations. Development of types of action appropriate to the local area’s needs of development and local conditions. Diversification of the guarantees instruments according to the different typologies of potential beneficiaries (SME, Social Enterprises, enterprises promoted by women, etc.) according to specific needs expressed by the local community and in order to better achieve social inclusion and social cohesion goals. Local involvement and participation of all related parties. The utilisation of inputs from a variety of actors is essential for successful implementation. These inputs include knowledge, expertise and enthusiasm to be associated with successful actions and mechanisms on the ground. Good Communication and Interactions. The Funds develops a large range of initiative to communicate its activities and to spread the knowledge about its programs and actively collaborate with other organizations and participate to many disseminations and communication activities and events.
Lack of Investing in human capital. It is necessary to hire and to improve investment in internal and external human resources in order to have better and more qualificated skills to better respond to the needs of business development expressed by the SME. Limited local autonomy. Existing intergovernmental relations have created additional challenges for efficient and effective governance. Networking and partnership. Is strategically and very important to enlarge and to improve collaboration, networking and partnerships with other private and public authorities, especially from other European countries, in order to offer to the local SME opportunity of internationalisation and acquisition of know how and knowledge useful to support their development’s plans. Lack of Improve competitiveness. by marketing the city internationally, removing barriers for investment and coordinating economic development initiatives. The guarantee instruments should better interact with other public and private funding opportunities, in order to offer a better and more complete range of financial instruments to the investments promoted by the SME. At present stage there is a lack of integration of the guarantee instruments with other financial tools especially with those ones provided by structural funds
One of the keys to successful local development interventions is the careful development at the outset of a strategy or plan that explores the opportunities and challenges for the area and identifies priorities, actors and methods of intervention.
Conclusion MGFSME operates through various sectors, involves multiple stakeholders and needs concerted actions by both public and private sectors. Building up market institutions should be accompanied by capacity building of appropriate institutional structures. The fund has a strong propensity to diversify its financial instruments that involve a clear willingness to adapt themselves to the changing needs of the municipalityâ€™s area and the new needs expressed by the local community. This holds in high regard the adoption of new measures to better cope with crisis situations that have a strong impact on the local economy and the development of processes for inclusion and social cohesion.
INDUSTRIAL POLICY “An industrial policy for the globalisation era” is a flagship initiative of the Europe 2020 strategy. Together with the other Europe 2020 initiatives, it aims at boosting growth and creating more jobs in Europe.1 “Industry is at the heart of Europe and indispensable for finding solutions to the challenges of our society, today and in the future. Europe needs industry and industry needs Europe. We must tap into the full potential of the Single Market, its 500 million consumers and its 20 million entrepreneurs.”12 Europe’s economy represents some 500 million people, 200 million jobs and 20 million companies. However, inefficiencies in European and national policy have made it difficult for industry, innovators, workers and consumers to fully exploit the potential that such an economy can boast. In a world of fierce international competition, this is a luxury Europe can no longer afford23. Nevertheless, European companies maintain international competitiveness through quality and innovation of their goods and services. Investment and innovation represent a crucial role in international markets and determine the capacity of European industry to recover and grow. The recovery of manufacturing in Europe will largely depend on how much companies are willing to invest. The European share of total world investment in manufacturing declined some 27% over recent years. This loss of share in world investment is mostly due to an increased capital accumulation in emerging economies. The crisis further underpins the importance of the industrial sector in the Europe 2020 strategy and objectives. Industry represents a fundamental basin for jobs. Approximately one in four private-sector jobs lie in industry. These are often highly skilled and each additional job in manufacturing in turn creates up to two jobs in other sectors. Member states can be divided into three groups based on the industry of manufacturing: • Member States that have experienced an increase in the relative weight of 1 2 3
Citizen’s summary – An industrial policy for the globalisation era, pag. 1. Speach of Vice President Antonio Tajani. Citizen’s summary – An industrial policy for the globalisation era, pag. 1.
manufacturing. This group includes Ireland, Romania, Lithuania, Latvia, Czech Republic, Greece, Hungary and Portugal. Member States that have experienced a reduction in the relative weight of manufacturing equal to or lower than the average (-0.7 %). This group includes Austria, Spain, Germany, Slovakia, Slovenia, Estonia, Poland and the Netherlands. Member States that have experienced a reduction of their share of manufacturing greater than the EU average (-0.7 %). Finland, Malta, Sweden, Luxembourg, Belgium, Cyprus, Italy, France, Slovakia, Denmark and the United Kingdom belong to this group.34
In order to preserve its role as the leading industrial exporter, the EU needs to continue making the transition to innovative, knowledge-intensive industries. It also needs to implement more efficient use of resources and reinforce mechanisms in support of SME internationalization.45
REINDUSTRIALISING EUROPE, MEMBER STATE’S COMPETITIVENESS REPORT, 2014, pag. 7. http://ec.europa.eu/enteprise/policies/industrial-competitiveness/monitoring-member-states/index_en.htm
Industrial Master Plan City Berlin 2010-2020 GERMANY Introduction In the 1990s, the economic focus of the region of Berlin was oriented towards the service sector. Starting from 2005, the economic strategy has been reoriented towards the industrial sector, since 200.000 jobs in the industrial sectors were lost between 1990 and 2005. As a result, in recent years the competitive capability of Berlin’s industrial sector has increased exponentially, turning the region into an internationally acknowledged location for business with major potential, in terms of business opportunities and job creation. It is estimated that it will be possible to create 100.000 new jobs thanks to targeted initiatives until the year 2020. Being the capital of Germany, Berlin has describes a leading role in the current international scenario, with the opportunity for establishing itself as the region to invest in for both national and foreign capitals. In fact, in 2012 133 billion Euro have been invested in start-ups in Berlin. In order to further reinforce and support these dynamics, the (former) Berlin Senate Department for Economics, Technology and Women’s Issues (today: Senate Department for Economics, Technology and Research) together with the Industrial Policy Network has developed the Industrial Master Plan 2010-2020. It is a policy plan to remove obstacles for Berlin’s growth and thereby to ensure sustainable development in revenue and employment in Berlin’s industrial sector, by creating a common and binding economic-political strategy through economy and politics. Consisting of a Mission Statement, Fields of Activity and Guidelines, the Industrial Master Plan creates the basis for an active industrial policy. The four Fields of Activity (General Conditions, Innovations, Labor Force, and Location Communication) contain eleven Project Fields (A through K). Under the supervision of the Senate Department for Economics, Technology and Research, the Industrial Policy Network has selected 12 key projects and 22 projects within these Project Fields.
It is also meaningful to observe that, due to the recent economic crisis, this general enforcement of Berlinâ€™s economy could lead to the improvement of certain work places as much as the subsequent improvement of employment offer, with the general result of a creation of new positions in an environment characterized by openness, innovation and cosmopolitan attitude. The Industrial Master Plan aims to combine research with industry in order to improve the operating environment for the growth of industry in the Berlin region.
1. Territorial Scope The territorial application of this best practice is a communal task and connected to the area of Berlin. As mentioned before, the recent history of the city and young economic development make Berlin a special location. In fact, this project could be developed in Berlin because this city is focusing on a sustainable, state-of-the-art and clean industrial sectors as an economic growth engine. Furthermore, as an industrial city, it presents itself today as a highly innovative, internationally competitive location. Berlin’s industrial diversity, particularly in advanced technologies, is represented by modern companies with a long tradition and a record of high performance, large enterprises and many young, medium-sized businesses equipped with a wealth of expertise and innovative power. Berlin’s excellent scientific infrastructure is an outstanding basis for its industrial success. The city’s highly-qualified labor force and its affordable costs of living, as well as reasonable prices for properties of all sizes throughout its districts are among some of the most impressive factors. Berlin’s status as the capital of Germany and a scientific and cultural center make it attractive nationally and internationally speaking. Its unique potential as a business base is supported by intensive cooperation with highlyspecialized service providers, benefiting the industrial sector and simultaneously creating the breeding ground for a dynamic services sector with high value creation.
2. Area of Application The Master Plan of Berlin focuses on
As far as the Industrial Policy is concerned, it could be asserted that sustainable growth of Berlin’s economy can only be achieved by a stronger industrial sector. Scientific studies indicate a significant potential for jobs in a city like Berlin. Businesses, trade unions and politics are focused on the further development of Berlin as an industrial city with the aim to achieve industrial growth above the national average. Side by side businesses, politics and trade unions use the Industrial Master Plan to prioritize activities and agree on specific steps for their implementation. All levels of politics and of the administration should be guided by an awareness of the specific business location requirements of industrial enterprises. In a joint effort, the participants will actively seek to convince the public at large of the capabilities and innovative power of Berlin’s industrial sector, and will work towards the establishment of a new image of Berlin as an industrial city in the public consciousness both within the city and beyond its borders. As far as research, development and innovation are concerned, Berlin has all of the key industries of the future because it has energy, life sciences, information and communication technologies. As a consequence of that, Berlin can be a fruitful background for further developments in the field of innovation, by increasing and fostering research. What is more, one of the key facts about the Master Plan is to attract innovation-oriented creative minds characterized by openness, so that this aspect of research can be further carried out and Berlin becomes an excellent landscape of and for development. One of the goals of the Master Plan in terms of fostering innovations, is to create initiatives serving to boost the transfer of technology and the development and implementation of new instruments. Openness to innovation and development is extremely significant to companies if they intend to remain competitive. For these reasons, cooperation between companies and universities is required. As far as education is concerned, the Master Plan aims at teaching pupils starting from the young age to ensure that they come in contact with the world of business. This happens through events and meetings with companies to give them the possibility to understand some basic mechanisms long before they begin working and long before they have to decide how to plan their future.
3. Type of Best Practice The “Industrial Master Plan City Berlin 2010-2020” is a policy made by the Senate of Berlin related on Berlin industrial policies foreseen for the upcoming decade. The Master Plan has involved various Berlin Senate Departments and is addressed to all local stakeholders in order to achieve the industrial development of the region.
4. Stakeholders Involved The Industrial Master Plan for Berlin is implemented under the supervision of the Senate Department for Economics, Technology and Research, together with the Industrial Policy Network, which sees constant cooperation between many partners working together with the same goal of promoting the city thus enhancing its visibility and potential. The Industrial Policy network is represented by the following partners: • Be Berlin: Berlin.de is the official portal of the state capital of Berlin and a regional online service with a wide, practical range of services for the Berlin citizens, tourists and the economy. • UVB: The voice of business in Berlin and Brandenburg: the social and economic association of business organizations in Berlin and Brandenburg eV (UVB). • IHK Berlin: The Berlin Chamber of Commerce (Commerce and Industry Chamber of Berlin) has the statutory mandate to represent as a self-governing body of the economy, the overall interest of all traders in the state of Berlin towards politics and the public. • Handwerkskammer Berlin: The Berlin Chamber of Trade is organized as a
• • • •
• • •
corporation under public law, self-governing. DGB: The German Trade Union Federation stands for a caring society. It is the voice of trade unions to political decision-makers, political parties and organizations. It coordinates the trade union activities. Nordostchemie: represents the economic and socio-political interests of the East German chemical industry as far as politics, government, union, science and media are concerned. VDMA: represents the interests of German mechanical and plant engineering and it is one of the most infl uential business associations in Germany. Zvei: Die Elektroindustrie: Integrated solutions for the electrical industry form the basis for a healthy and independent life. Verband Druck und Medien Berlin-Brandenburg e.V.: the association of the printing and media industry in the Northeast. VBP Nordost: Association of the paper, cardboard and plastics processing companies in Berlin, Brandenburg and Mecklenburg-Vorpommern eV, dealing with production, processing, wholesale Industriegewerkschaft Bergbau, Chemie, Energie IGM Investitionsbank Berlin: The Berlin Investment Bank is the central bank funding the Land Berlin and especially promotes innovative small and medium-sized companies in Berlin. TSB Technologiestiftung Berlin: The TSB Technology Foundation Berlin is the central contact for all questions about technology and innovation in Berlin and the capital region. Berlin Partner: Berlin Partner of Economics and Technology GmbH is the company for Business Development and Marketing of the Land Berlin.
One important goal of the Master Plan has been reached: the discussion concerning Berlin as a location for industry has been reinforced and has reached a new dynamic, which forms the basis for implementation of several further projects. The trends reported by the two reports of 2011 and 2012 have already underlined the presence of a general improvement of the economic situation thanks to the projects implemented so far. It is not yet possible to describe future trends until 2020, but it could be safely assumed that it is very likely that the other projects will also have positive outcomes. However, Berlin industry has grown significantly and it is not wrong to address this result to the Master Plan. Nowadays, in the industrial sector of Berlin there are 736 enterprises with more than 20 employees occupying 106.500 workers. Hereof 10% are employed with Research & Development. The most famous companies are BMW, Bayer Health Care, Berlin Chemie, Siemens, MAN and Daimler.
The real gross value of the Berlin’s industry grew by 6,6% in the year 2006, whereas it has grown by 10,9% in only five years. The economic and competitive capacity is the basis of the industrial productivity of work. An interesting growth has been registered in the last years: a profit of 23.3 billion Euro, hereof 55% generated abroad. The presence of Berlin’s products on the international market saw significant growth in the last years: the export rate of the industry in Berlin comes nowadays to around 50%, whereas in 1995 it reached just 15%. Another very interesting result consists of the new jobs available thanks to the industry’s development which took place in recent years. In 2011, the number of employees who were subject to statutory welfare contributions was 105.577, whereas in 2007 they were just 102.943. First of all, as a future perspective, an improvement of the projects is expected. Furthermore, new topics should be inserted. “Old meets new” is one example with the aim to offer good conditions for cooperation between start-ups and industrial companies. Other projects, such as “Industry 4.0” (fourth industrial revolution) or “Smart City”, but also a broader marketing of Berlin as an industrial city, are planned for the next years.
5. SWOT Analysis STRENGTHS • • • • • • • •
Multiplier effect, due to the connection • with previous policies; High rate of success for communication and marketing strategies; • Collateral positive effects on the entire value-chain and on other industries; Constant increase of incoming of highqualified workers, investments and capitals; Encouragement to the foundation of a facilitated service-oriented start-ups, as an efficient network of stakeholders; Plurality of Berlin’s main stakeholders implies the added-value of joint action; Attraction of new investors, due to the increase of high qualified workers and of high-tech technologies; Low cost of living, high quality of life and good infrastructure.
OPPORTUNITIES • •
Waste of time and high costs due to cooperation between companies and universities during the planning phase; Impoverishment of the cultural humanistic heritage of the region.
Unexpected and positive output due to • the enhancement of Berlin’s reputation; Berlin: seat of development, innovation and industrial greatness. • • • •
Delocalization of the investments towards countries and continents with lower business costs; Diff usion of new scientific discoveries may undermine Germany’s status; Discouragement for the pupils in pursuing further studies; Loss of a significant number of jobs in manual professions; Loss of the green and sustainable image that Berlin tries to convey.
Conclusion The Industrial Master Plan 2010-2020 of Berlin represents so far the wish to improve Berlin’s industrial possibilities as much as its reputation and model function, with a closer attention to an international environment. From the report of 2011 and 2012 it emerged that thanks to a powerful collaboration among important German partners, significant results have already been reached, a fact that can only suggest possible positive future trends.
In addition, numerous other benefits are the result of the implementation of the Master Plan’s projects, most of all from the choice of promoting the city as a place where to access opportunities: in times of crisis like today, young people move abroad in order to find a job. Thanks to the Master Plan, as one factor of several, many people have decided to move to Berlin, which has become one of the preferred places to go. The status of the city has even caused a raise of the rate of tourists. Not only young people would like to visit the city everybody is talking about. Tourism is a very good opportunity to improve the incomes of a region. For this reason, it can be considered as an alternative to reach the objective of economic growth. It is possible to conclude that the implementation of similar measures has proved successful in order to enhance the status of a region, in order to increase the number of companies and consequently the number of jobs available. For this reason, the Industrial Master Plan City Berlin 2010-2020 could be applied in many other contexts with the necessary adaptation to the different situations through tailored amendments to obtain similar results.
Pirelli Tyres Romania
Founded in 1872 in Milan, Pirelli is among the world’s leading manufacturers of tyres. Present in over 160 countries, Pirelli has 22 manufacturing sites and employs approximately 39.000 people around the world. Pirelli is a leading producer of premium tyres with a strong commitment to R&D. Successfully competing in motorsports since 1907, Pirelli is currently the exclusive supplier of the Formula 1 Championship, the superbike World Championship, and many other championships around the world. Pirelli is recognized as a socially aware corporation that applies sustainable practices in everything from “green performance” products to providing a healthy environment for its workers and their families. The company achieved a perfect score in the FTSE 4 Good Global and European STOXX sustainability index, and has maintained a global sustainability leadership position in the Dow Jones Sustainability World and Europe Indexes for seven consecutive years. Pirelli is the only tyre manufacturer to be included in the Global Compact 100 sustainability stock index. In June 2013, the Foreign Policy Association awarded Pirelli Chairman and CEO Marco
Tronchetti Provera the 2013 Social Responsibility Award for his ongoing endeavors in sustainability and social responsibility. As of 2005, the year when it began operating in Romania, until 2010, Pirelli has invested over EUR 300 million in the large Industrial Pole composed of the car tyre plant and a steelcord plant, both located in Slatina. By the end of 2014, Pirelli investments in Romania will amount to EUR 450 million. Moreover, the Company announced in 2012 an additional investment of 105 million euro in the following 5 years (2013-2017), intended to increase the premium production capacity for the Slatina Plant up to 13 million tyres by the end of 2017. A central element of Pirelliâ€™s presence in Romania is the tyre factory in Slatina, being one of the most modern in the world for tyre manufacturing: the Slatina pole is in a strategic position with respect to western and eastern European markets and represents for Pirelli Group a logistics and commercial hub for all of Eastern Europe. Nevertheless Pirelli, in line with its tradition of strong roots in countries where it is present, launched a series of initiatives in Romania, especially in Olt province, supporting training and wellness of workers, of their families and more in general of the local community. In February 2014 Pirelli & C. and Bekaert signed an agreement for the sale by Pirelli of 100% of its steelcord activities to Bekaert for a total consideration (enterprise value) of approx. 255 million euro. The transaction will enable Pirelli to exit a business where it lacks competitive scale and focus resources on its higher-margin premium tyre activities and in the meantime assure a future for its steelcord activities within a group which is a technology leader in steel wire transformation and coatings. As a part of the sale, the two groups will enter into a long-term supply agreement and a joint product development agreement, to enhance R & D activities, ensuring that the transition to the new arrangement meshes smoothly with their respective growth and development plans, making the most of existing assets, while also providing the basis for a gradual opening to the market.
1. Territorial scope Pirelliâ€™s investments are focused on Oltenia Region, which hosts several other small and medium enterprises, but also important national and international industrial
groups. The industrial complex is based in Slatina, the chief town of Olt County, with about 80,000 inhabitants. Slatinaâ€™s economy is based on industry, being able to count several important companies with factories within its area, such as ALRO, Vimetco, Prysmian and TMK.
2. Area of application Slatina is located in a strategic area regarding western and eastern European markets, being an important hub for entire eastern Europe, an area in which Original Equipment Manufacturers are increasing their productions. The export quota of tyres produced by Pirelli in Romania is more than 90% and the company believes that these markets would be strategic even for high performances products. In order to ensure a longer term future for the industrial economy, the automotive sector needs to remain competitive within the global automotive value chain. To achieve this ambition, there is the need to enhance the value proposition through local human resources, developing world class logistics infrastructure and strengthening the local supply chain. Primary needs regarding regional economic policy are: creation of new jobs, improvement of skills and increase of competitiveness of the region by attracting investments in high added value areas. In the context of a prolonged financial crisis, the collaboration between private enterprises and local government is the right formula for regional economic and social development, increasing cooperation among economic actors and involving educational institutions, research institutes and policy-makers.
3. Type of BP The strategic areas of Pirelli investments are: - internationalization of the company; - industrial policy; - innovation and development.
4. Stakeholders involved The overall Pirelli investment in Slatina was focused on several areas, of which the most important are: â€˘ Innovative technology: investing in the newest high-technology, developing a modern industrial pole for the automotive sector; â€˘ Workforce skills development: encouraging and supporting local universities to develop programs designed to meet the skills needs of the automotive sector;
Social development: setting up a range of projects for the local community in the Oltenia region.
The investment project has a particular importance within the overall industrial development strategy framework, ranking with other major national programs. Key stakeholders for this initiative are the local communities, the local and regional authorities of Olt County, national government/authorities.
Objectives for the Company: • •
Create an integrated industrial and technology pole of international relevance; Develop an industrial pole in a strategic position with respect to western and eastern European markets and a logistics and commercial hub for all of eastern Europe; Increase manufacturing capacity in the high-end performance segment according to market demand of the premium segment.
Expected benefits for the local community: • • •
Support the economic and urban development of Olt County and the south west region (regional development policy); Prevent the unemployment (occupational policy); Improve the industrial attractiveness of the area.
5. Results obtained Pirelli started its investments in Romania in 2005. During the period 2005-2014, Pirelli invested in Romania EUR 450 million, mainly in the Industrial Pole of Slatina with a tyre plant and a metal cord plant. The company invested in Romania approximately EUR 250 million in the first years, in order to create a greenfield large industrial pole consisting of a tyre plant, which, at the end of 2009, reached an annual production capacity of approximately 5 million tyres, and of a plant for the production of steel cord in Slatina. As of beginning of 2008, the entire industrial complex in Slatina, including steelcord, extends across an area of approximately 500,000 square meters employing about 1,200 people. In three years (from 2006 to 2008) the employees in Slatina attended each, on average, about 150 days of professional training, thus over EUR 500,000 being invested. In 2008, the company announced new investments completed in 2013, equivalent to around EUR 200 million, aimed at increasing the production capacity within the factory, substantively improving the Group’s European production. The expansion
project has received State aid worth EUR 28 million within the collaboration between Pirelli and the Romanian government, pursuant to GD 1165/2007. From 2009 until completion, more than 1,000 new jobs were created. Moreover, Pirelli announced in November 2012 a further investment plan in Romania for the following five years (2013-2017), amounting to EUR 105 million, of which EUR 35 million granted by the Romanian government. The investment is intended to increase the production capacity of automotive tyres, the premium segment within the Industrial Pole of Slatina. The new investment is intended to increase the area of the tyre plant up to approximately 200 thousand square meters in 2017, and to develop the production capacity within the tyre plant up to 13 million pieces per year. At the same time, the new investment plan will create, until 2017, more than 500 new jobs. The tyre plant in Slatina, is today one of the most modern car tyre production plants of Pirelli, equipped with the highest non-robotic production technology designed to manufacture high performance tyres of Premium range, where Pirelli is a leader: Winter, UHP Winter, High-Performance, Ultra-High-Performance, Runflat and SUV. Production is designed for the original equipment of the largest automotive companies. Nevertheless, Pirelli conducts numerous social and cultural projects in Romania, from the partnership with the Universities of Bucharest and Craiova, aiming to implement technological innovations, to the project to disseminate Italian culture in Slatina and the collaboration agreement between the Niguarda Milano Hospital and the Slatina Hospital, concluding with the Intercampus project conducted together with the FC Internazionale Milano football team, dedicated to the children of Slatina City. In particular, in collaboration with FC Internazionale and the Association ComunitĂ Nuova Onlus, Pirelli set up in Slatina a new â€œInter Campusâ€?, the program that uses the game of soccer as an instrument of social promotion in favor of more than nine thousand needy children between 8 and 14 in seventeen countries around the World. In Romania in particular, the initiative is directed at young people in the Slatina community, offering them a fun and effective instrument for growing and socializing. The Company has also promoted a collaboration project between the Niguarda Hospital in Milan and the Slatina Hospital for professional training of medical
personnel, nurses and technicians. The project includes a training contribution for personnel at Slatina Hospital, including professional exchanges and training periods both in Milan and in Slatina.
6. SWOT analysis The table below provides an analysis of the strengths, weaknesses, opportunities and threats faced by Pirelli’s investments in Romania.
STRENGTHS • • • • • • •
increasing competitiveness through joint participation in markets entrepreneurship and stabilized workforce in the region good relations between industry, academic environment, R&D institutes and public administration social responsability of Pirelli: projects for the local community ensure that product quality meets world standards research partnerships, improving university curricula programs and scientific publications professional skills of employees, emerging R+D capabilities at Universities in production support
OPPORTUNITIES • • • • • • • •
• • •
firm-level skills technical and management levels effects of the crisis on component manufacturing auto-sector one of the least transformed in terms of empowerment
develop a new business of particulate • filter according to the new European • legislation Euro 5, starting from 2011 increasing local demand in the entry level segment of the automotive market economic development of the territory increasing consolidation of the international position of the company prevention of unemployment increase possibility to conquer Central and East European markets implementation of project for social development urban development of the regional area
structure of production internationally – scale platforms the negative consequences of critical capabilities linked to the auto-sector being disestablished by the consequences of the current global crisis
OPPORTUNITIES • •
increase competitiveness both for the region and the company developing collaboration with local, regional and national authorities, in order to increase development in the automotive industry increase visibility at international level improve communication between consumers, manufacturers, educational institutions and public authorities
Conclusion Creating new jobs, improving skills and increasing competitiveness of the region by attracting investments in high added value sectors have become primary needs concerning regional economic policy. The implementation of partnerships between private companies and policy-makers represents a key factor in order to face the economic and financial crisis, increasing also collaboration with educational and research institutes, as a necessity and a structure of regional economic and social development. The launch of the collaboration between Pirelli and local authorities constitutes a significant milestone in placing the automotive sector in the province on a higher and more sustainable growth path. The aim is to increase competitiveness in this region by investing in innovative technologies and developing professional training of highly qualified skills needed through the development of participated research projects. By 2017, the impact of Pirelli’s investments should be felt in increased volumes, output, jobs and share of the global market. Having local presence and national resonance, the collaboration will enable quicker, more strategic and responsive engagement between public and private sector role players. This will enable the identification and resolution of structural constraints the sector is facing. The initiative will allow regional automotive to brand and market itself to enhance sector investment and deepen linkages in local supply chains. It will enable the implementation of programs across the sector, enhancing competitiveness as well as promoting greater levels of inter-firm learning and co-operation.
RESEARCH, DEVELOPMENT AND INNOVATION Research and technology development are an investment in the future and an essential element in the functioning of industrialized countries, in order to guarantee competitiveness, employability and support to other policies. Investment in research and innovation must be performed more efficiently and become more effective in producing concrete results, in order to achieve value for money in an environment that is currently riddled with scarce resources. European Research, and more specifically the creation of a European Research Area (ERA)17, is high on the policy agenda in Europe. Conducting European research policies and implementing European research programmes is in the first instance a legal and political obligation resulting from the Amsterdam Treaty. ERA compliance and effective use of funds can maximize the return on research investment. Europe must therefore increase cooperation between all stakeholders involved by co-ordinating national and/or European policies, networking teams and increasing the mobility of individuals and ideas. The above are a sine qua non requirement for the development of modern research in a global environment. Without determined actions at European level the present fragmentation of Europeâ€™s efforts cannot be overcome. The European Commission has encouraged Member States to enable synergies between European Structural and Investment Funds, Horizon 2020 and other research, innovation and competitiveness-related Union Programmes. Horizon 2020 has increased its dedicated budget to RTD to approximately â‚Ź 80 billion and has become the main financial instrument to implement the Innovation Union and Europe 2020 strategy aimed at securing Europeâ€™s global competitiveness. Initiatives must contribute to the three priorities of Europe 2020: smart, sustainable and inclusive growth. By coupling research and innovation, Horizon 2020 is helping to achieve this with its emphasis on excellent science, industrial leadership and tackling societal challenges. The goal is to ensure Europe produces world-class science, removes barriers to innovation and makes it easier for the public and private sectors to work together in delivering innovation. 7 ERA is a unified research area open to the world based on the Internal market, in which researchers, scientific knowledge and technology circulate freely. Through ERA, the Union and its Member States will strengthen their scientific and technological bases, their competitiveness and their capacity to collectively address grand challenges. http://ec.europa.eu/research/era/era_communication_en.htm
Innovation is an essential driver of the performance of European industry. To capture value, firms need strategies that combine product, service and process innovation. To support this, policy is now aimed at removing barriers to innovation, in particular for SMEs. Many Member States are increasing demand for innovative products and services through public procurement initiatives. Many also invest considerably in research and innovation, but have not been able fully to commercialize these investments. Other Member States have made little progress towards building a more knowledge-intensive economy. This is because their research and innovation systems remain weak due to low investment, and cooperation between the scientific community and businesses proves insufficient. In turn, this hampers opportunities for growth, job creation and increased competitiveness. Systems for fostering innovation should be improved in a balanced way that addresses all the necessary inputs for innovation8. 2
Reindustrialising Europe, Member Stateâ€™s Competitiveness Report, 2014, p.7.
I-START - Umbria programme for innovation ITALY
Introduction SME cluster innovation projects have been implemented in Umbria since 2005 and are still carried out today. Normally, each programme runs for one year. In 2013, the central Italian region of Umbria launched a programme to guide and assist SMEs in innovation processes. This programme is managed by the region’s in-house R&D Promotion Agency, “Umbria Innovazione”. The Programme is named “i-Start, innovazione supporto tecnologico alla ricerca tecnologica” (Innovation: Technical support to encourage research and technoloy). It was launched in order to lead and support SMEs in innovation processes. From techniques to develop innovative ideas to their evaluation and implementation, IPR and bringing innovative products and services to the market. The Programme’s activities have been carried out over a 14-month period and were divided into two actions. The first transversal action helps companies focus on the opportunities which companies can access by participating in innovation projects and hence in the programme itself. The second action makes it possible for small and/or micro-businesses to carry out innovation projects with public co-funding. SMEs can and indeed are moved to join clusters to accomplish improvement projects with shared costs, aimed at innovating processes and/or products and giving addedvalue to their research results. Already formed SME clusters may of course also submit project proposals. iStart is thus a programme of cooperative innovation projects which are designed, co financed and carried out by specific clusters made up by SMEs. The projects are wholly based on the clusters’ own requirements.
1. Territorial scope The territorial scope of this programme is regional. Co-funding is based on funds assigned to the regional government of Umbria and the programme is managed by a regional agency. However, the programme could easily be adapted in order for it to be extended and applied to larger geographical areas.
2. Area of application All industrial areas can be potentially involved. The programme is dedicated to the promotion of cooperative innovation projects. There is no limitation as to industrial sector, type of innovation, etc. Hence, all areas can submit projects for approval and potentially be awarded co-funding in order to carry out their innovation projects.
3. Type of BP This best practice is aimed at the promotion of innovation within SME clusters. It therefore not only stimulates innovation by co-funding projects deemed worthy but also fosters aggregation amongst SMEs as a prerequisite for access to the programme itself.
4. Stakeholders involved • • • • • •
Region of Umbria, which invests EU structural funds to support the programme Umbria Innovazione, the Region of Umbria’s agency for the promotion of R&D, which is responsible for running the programme, University of Perugia, which contributes to the scientific panel which assess project proposals; Local research centres, which contribute to the scientific panel which assess project proposals; other approved expert consultants, who provide business consultancy if/where necessary; SMEs which form stable clusters with a defined innovation project..
5. Results obtained In its first edition in 2013, the iStart Project saw a total of 145 companies participate. Of these: • 1 is a Large enterprise (participated as a sponsor in a cluster but was not beneficiary of co-funding); • 15 were medium enterprises; • 64 were small entertripses; • 65 were micro enterprises. The average value of approved projects was euro 25,000. In 2014, a second iStart call was launched. This call offers co-funding for up to 60% of approved projects. The call was answered by a total of 64 clusters (185 total enterprises) which submitted project proposals. Of these: • 16 proposals were admitted to co-funding; • 43 proposals were deemed worthy but could not be admitted to co-funding for lack of funds; • 5 proposals were rejected.
Based on this success and on a long-standing tradition and presence of arts and crafts enterprises in Umbria, yet another iStart programme has also just recently been launched. This last call is specifically aimed at promoting aggregation and innovation within artisan and hanicrafts enterprises.
6. SWOT analysis STRENGTHS •
The willingness to design a new • administrative tool and its application methodology which is based on real present-day requirements of SMEs. The best practice is based on a close, direct relationship between Umbria • Innovazione and SME clusters. Bureaucratic slow-downs are eliminated and the phases of project approval and performance are defined and all very • short in time. Participating companies do not have to make financial advances for their private co-financed innovation projects. All projects are designed by the SMEs (with assistance, where necessary, from Umbria Innovazione and/or outside experts) to meet their own requirements and goals (i.e. highly customisable). The rules and method for applying for and carrying out projects are transparently defined. Companies cooperate to reach common goals.
The methodology is successful only when the support agency (or the body managing the program) brings a genuine attitude of empathy and collaboration with SMEs. The best practice requires qualified human resources and economic resources (in this case, the Region of Umbria invested EU structural funds to activate this programme). The SMEs that participate in the project provide 40% of own private funds.
The objectives of the best practice are • to support research and innovation by SMEs, the creation of an environment that fosters innovation, and developing concepts of networking and clustering. •
Should the Region of Umbria continue to reduce its co-funding percentage (it is currently at 60%), it would be reasonable to expect a sharp drop in requests for cofunding. Companies are usually not to keen to share their innovation projects and render them public.
Conclusion Key success factors are the direct support relationship between Umbria Innovazione (the agency running the programme) and the SME clusters, through fast, streamlined and transparent project approval processes and extremely short waiting
times. Moreover, participating SMEs acquire experience and a predisposition to work in clusters and for innovation, as well as to achieve innovative solutions for their company needs. Another key factor to success has been the highly customised nature of the projects. Years of successful testing of methodology indicate that this should continue to be practiced in the future as well as be applied in other geographical areas.
SOFIA TECH PARK BULGARIA Introduction The main purpose of Tech Park is to promote and stimulate a competitive process between the different kinds of stakeholders, with particular reference to those innovative enterprises, in order to generate more areas of excellence in research and innovation, with the aim of speeding up the process at technology transfer and the development of innovative projects shared among multiple actors such as to overcome national boundaries. The final objectives are not only related to the development of new innovative business projects that can have a high response from the market but also support those that present several important and successful factors but without a large range of different supports, could be effected by the negative infl uences of the economical crisis and as consequence fail before start up. The activities of the center will, among different kind of initiatives, support the growth of competitiveness of local production systems, including the spread of new organizational structures that raise quality of human resources and boost the opportunities for enhancement of new innovative business activities. The main business sectors on which the Tech park directs the activities are those related to the new high-tech sectors such as information technology, electronics, industrial instrumentation, new materials, environmental technologies, that are an expression of internal strategy characterized by a wide range of interventions on multiple levels, however, having as its objective the creation and strengthening of the local innovation system. An evaluation of the operation will obviously only possible in a few years, especially in relation to the impact on the actual territorial economic system, both in terms of
partnerships with local businesses, and in terms of new business creation. However, a positive result is already visible: the isolation of the local area compared to the national innovation system is definitely broken; local businesses were encouraged to innovate and research. One of the main objectives of the BP is to provide increased investment opportunities and a favorable science and business environment in order to maximize direct foreign and domestic investments in high tech sectors and foster economic development as part of Bulgaria’s preparations for implementing EU’s cohesion policy upon accession. This will allow Bulgaria to improve research, technology and innovation infrastructure, and establish efficient conditions for attracting new high tech products, processes and services, thus increasing the economic development potential. This is the co-operative environment where participants can cultivate new business ideas and turn them into commercial realities. Companies would be ready to invest to acquire insight and understanding of research once their capacity to assimilate advances in research will be reinforced through entering into meaningful dialogue with research institutions.
1. Territorial Scope The Science and Technology park will be situated on the area known as “Fourth Kilometer” of Tsarigradsko Shousse Boulevard between Asen Yordanov Bldv. and Gen. Yordan Venedikov Street. This location is approximately 15 min away both from the city center and Sofia International Airport, with close proximity to Bulgarian Academy of Science Complex, some 10 min away from Sofia University and the Technical University Sofia. The territory of the park is 270 000 sq. m.
2. Area of aplication The science and technology park is a strategic project of the Bulgarian Government to support innovation, new technologies and applied science in the areas of information and communication technologies, life sciences and clean energy.
3. Type of BP The park is still in its construction phase. It is expected to be finished and start operating by the end of 2015. As part of the park, a complex of laboratories, incubator for start-up companies in the main focus areas of the park, innovation forum, experimentarium with visitors center and pedestrian bridge will be built.
The idea is to develop a centre for sustainable development of new innovative business activities, giving different kinds of assistance and support, in order to facilitate the process of implementation of new innovation, with particular reference to those business initiatives that in specific market sectors and have more and stronger opportunities of development on the market. The main purpose is to activate a new evaluation process, finalized to identify from one side those fields and business sectors more at risk from the negative impacts coming from the crises and to define, from the other side, those fields, infinitives and actions to be taken that can guarantee the success of the start up of high technology business activities. Innovation often arises in a point of intersection between different disciplines. Interaction of the various disciplines is important, also because in certain areas is not enough to refer in a single discipline to find the best solution. For this interdisciplinary becomes, in fact, more and more important and is the base for development of the BP expressed by the Tech Park.
4. Stakeholders involved “Sofia Tech Park” JSC is a state-owned company. The main goal of the company is to boost the development of research, innovation and technological capabilities of Bulgaria through implementing different projects. For this purpose, “Sofia Tech Park” will partner with private and public institutions in order to create and manage a unique environment for innovation, build and implement educational programs and provide support to the commercialization of new technologies, products and services. Project nr. BG161PO003-1.2.05-0001C0001 “Science and Technology Park”, with beneficiary Sofia Tech Park JSC is developed with the financial support of Operational Programme “Development of the Competitiveness of the Bulgarian Economy” 2007-2013, co-financed by the European Union through the European Regional Development Fund and through the national budget. In the development plan the Tech Park was given strong relevance and evidence to the networking activities, in order to actively involve many different kinds of stakeholders as universities, local public authorities, enterprises, business and entrepreneurship associations, other centers for research and municipalities, with the aim to cover a large range of actors that can play an important role on the implementation process of the park and create the basis to develop and continuously implement networking to support start ups of new projects.
5. Results obtained At the present moment there is ongoing construction of all buildings, infrastructure and parks from the first stage of the development of the park. In the meantime Sofia Tech Park is working on creating an ecosystem by building cooperation with the main scientific institutions in Bulgaria – Bulgarian Academy of Science, Sofia University “St. Kliment Ohridski”, Technical University – Sofia, Medical University – Sofia and others. In addition to this, a number of events are being organizedon topics from the focus areas of the park. It was important to start up a process of attracting different relevant stakeholders, such as universities, academies of science, enterprises and business associations, in order to achieve future development. Different organizations recognized that the Tech Park could obtain good results in a challenging environment. According to an external evaluation, the Organization reaches target groups, sustainable and innovative oriented SMEs. This is one of the main goals to maintain and accelerate existing innovative projects. Sofia Tech Park could support economic restructuring in regions with lower adaptability to the competitiveness of the Bulgarian economy, dynamic market conditions; provide positive social and demographic effects in long-term perspective by creating new attractive jobs, accessing a higher level of technology and reducing the disparities in the economic development of regions; enforce renovation of existing R&D infrastructure and/or creation of appropriate new ones; attract further research and high tech investments with a view to higher value added production and services.
6. SWOT analysis The SWOT (strengths, weaknesses, opportunities and threats) analysis is based on relevant factors- infrastructure, human resources, technology, universities and institutes, venture capital, markets, and administrative institutions.
• • • • • •
Bulgaria possesses substantial scientific potential (Bulgarian Academy of Sciences, leading universities, worldclass diaspora of Bulgarian scientists and researchers abroad, etc.). The scientific infrastructure is comparatively well developed, and funds under the Operation Programmes (eurofunding) is utilised, as well as limited public investments in scientific infrastructure. Availability of highly educated and professionally trained employees. High incomes and purchase power of the population. Diversified economic structure of Sofia City’s economy; Experience and traditions in the highly technological industries and activities. High level of the activities related to the scientific research and the higher education, art and culture STP’s location (easy access to an international airport, underground station and the leading universities and BAS institutes).
• • •
OPPORTUNITIES • • •
Currently, scientific research has little interaction with business needs; Businesses have little knowledge of the existing opportunities or almost no access to the said scientific infrastructure, which is located at academic institutions. Lack of adequate information pertaining to the development of business clusters. Insufficient number of infrastructure facilities, which results in overloading the transportation network. High degree of air pollution.
A strategic geographic location Intense amassment of innovative companies within the territory of Sofia City Expanding the foreign economic relations of the capital (67% of the exporting innovative companies are located in Sofia) “Commercialization” of the scientific products along the separate directions
• • • • • • •
Preservation of the negative trends in the innovative system Intensification of the migration and emigration processes A decrease in human resources’ quality Deepening of the internal regional distinctions with regard to the innovative potential A delay in the execution of key national and regional investment projects in the field of scientific infrastructure The R&D profession’s low degree of attractiveness among young people Lack of long-term science and technology forecasts
In order to promote markets for the science and technology sector, important measures have been implemented by Sofia Tech Park. That is, a system for science &
technology has been reengineered. Activities in science and technology will be justified on the basis of the effectiveness of their contributions to the development of economy and society. A significant attention to R&D activities has been started. Investors from private sectors are particularly encouraged to invest in business technology. In order to bridge the gap between research and business, a Science & Technology Market has been organized. In this type of market, researchers and business people can exchange opinions and interest in technology from different viewpoints. The market facilitates interaction between technology providers and buyers.
Conclusion Analyzing the Tech Parkâ€™s experience, there was a significant number of important networks between science parks, research facilities and technology transfers within the same area. The interesting component of these initiatives is to own the network they created, an organizational element useful to define the pattern of the Technological Pole. In fact, their inclusion in a network of technology providers favors the exploitation of economies of scale in the provision of adequate services in the area. The strategy adoped shows how the Lead Organization planned a different scale of very flexbile and adaptable interventions to different specific business initiatives and economic situations, in order to better respond to the needs expressed by the final users and to better face critical crises situations. The Tech Park aims to become a true citadel of science, innovation and start up of innovative business activities, a reference model for research capable of attracting foreign companies, a center of excellence located in a strategic area of the country. This BP shows how it is evolving according to new market trends and the next task is to enable major forms of collaboration between the park and academic institutions. Although university activity still represents the most significant scientific-technological component, the system of high-tech companies is a key element of the territorial system, which enjoys proximity to research centers and above all a skilled workforce from different universities. It is important to notice that the Sofia Tech Park has several important goals to ensure high tech and industrial development conformity. These are in line with existing government policies related to the region; engagements of the terrestrial regulation at national and regional level focusing also on the potential of smart specialization in some economic sectors.
EDUCATIONAL NETWORK SPAIN Introduction The Educational Innovation Network was set up at the end of 2013. The Network allows participation at the level of representation of the economic agents as well as the level of representation of entities or organisations by themselves. Functioning of the Network is based on methodologies that derived from concepts of collective intelligence, open innovation and social innovation.
This network uses methodologies which originate in the following concepts: â€˘
Collective Intelligence emerges when groups of individuals do intelligent things collectively (Malone, 2009, MIT). o Quantity of points of view (Linusâ€™s Law) o Variety of points of view
Openness to ideas Open Innovation
Open Innovation Open Innovation means combining internal knowledge with external knowledge in order to innovate, that is, to create and implement innovative products and/ or services (Henry Chesbrough, 2003, Berkeley).
Social Innovation This is a new concept comprising three basic elements: o Objective: to find solutions to problems and challenges faced by society today. o Methodology: the extensive and intensive use of new technological means such as social media, 2.0 tools, collaborative work… o Leadership: a phenomenon led by the community, by individuals or collectively.
The objective of the Educational Innovation Network is to make progress in the development of innovative initiatives, methodological changes and the integration of ICT in education, to make this possible, the network aims to promote new projects; gather together educational community initiatives; involve society and, in particular, the economic and business fabrics, aligning efforts in order to face the challenge of achieving educational success, promote initiatives in the smart strategy and achieve an urBan educational living lab. The work methodology is to stimulate, facilitate and carry out projects in the town’s educational establishments by promoting a culture of innovation in the schools and among teaching teams, encouraging and stimulating innovative teaching initiatives. The EDUCATIONAL INNOVATION NETWORK will undertake three main lines of work aimed at “Improving educational success and social cohesion”, all of which are in line with the education strategy and aims set out in the Europe 2020 strategy. LINE 1. To promote innovative teaching projects in the local area: those promoted directly by the City Council; those which emerge from initiatives coming from schools and the teaching community; those promoted by community organizations and companies.
LINE 2. To be a member of European networks which make it possible to take part in projects financed by the European Union within the context of programs set out in the Europe 2020 strategy and in which Viladecans may participate and undertake new initiatives.
Actions LINE 1 On the initiative of the city’s schools the following projects are being carried out in 2014: o ‘Bimodal Curriculum’ pilot test in a primary school. The Bimodal Curriculum is designed to: o Enable more agile and efficient working and to improve collaborative work; o Develop new skills and competences; o Update the teaching and learning process taking into account the new realities of the 21st Century, in particular the omnipresence of the internet; o Bring the world of the school closer to the world in which the pupils mix socially. The Educational Innovation Network aims to: o Monitor the implementation of the new project; o Monitor and evaluate; o Provide analysis and conclusions. Incorporate the use of educational platforms as a tool for both work and interrelation among all the members of a primary school and secondary school in the city: The aim of educational platforms is to enable: o More agile and efficient work. Improvement of collaborative work. o Improve communication between the school and families o Monitor and give greater support to the teaching and learning process. o Facilitate the appropriate use of social media in school. The Educational Innovation Network aims to: o Monitor the implementation of the tool in the schools’ operations. o Monitor and evaluate the impact on the educational community. o Develop a contingency plan o Provide analysis and conclusions o Run a viability study and make proposals for continuing use of platforms. The following projects are being promoted by the Education Department of Viladecans City Council. Use of Smart Desks in state and subsidised Viladecans infant schools (3-6 years old).
With these educational platforms Viladecans aim to: o Introduce a tool to increase motivation o Encourage more active and participative teaching approaches leading to 2.0 schooling o Sustainability o Versatility The Educational Innovation Network aims to: o Monitor the implementation of the tool in the schoolsâ€™ activities o Monitor and evaluate the impact on the educational community o Provide analysis and conclusions o Run a viability study and make proposals for continuing use of platforms. Incorporate the use of tablets in the classroom as a tool for change in the approach to teaching and learning in order to encourage an understanding of the Bring Your Own Device (BYOD) concept in schools. A pilot project is to be run in 2014. With the use of these educational platforms we aim to encourage: o A change in methodology o More active and participative teaching approaches leading to 2.0 schooling o Sustainability o Incorporation of mobile technologies: audio, video, reading, writing, presentationsâ€Ś o Improvements in usability and accessibility. The Educational Innovation Network aims to: o Monitor the implementation and incorporation of the tool in the schoolsâ€™ activities. o Monitor and evaluate the impact on the educational community o Provide analysis and conclusions o Run a viability study and make proposals for continuing use of platforms. Fostering of work experience and placements in Viladecans and the involvement of companies in the supervision of research by secondary school pupils. One of the challenges faced by the Educational Innovation Network is to encourage and promote cooperation between companies and schools in the city. To this end we have created a platform which enables students in training to find work placements in companies. In this way we aim to: o Promote cooperation between companies and schools. o Involve companies in community life. o Introduce young people to the job market. o Make it easier for young people to join the world of work. In addition, as part of the curriculum young people have to carry out research
projects. These are pieces of work in areas of interest to the pupil which enable them to develop something innovative. In this way the students who have to do these projects are connected with companies who may also wish to carry out research or introduce innovations. This may help to bring young people closer to the world of work. Parents’ Associations 2.0 One of the problems faced by the education community is the low level of involvement by families in the process of teaching and learning and also poor communication about and lack of involvement in school events. To meet this challenge the Educational Innovation Network is carrying out a project to invigorate the involvement of parents’ associations using appropriate information technology, principally social media. For this reason the so-called AMPA 2.0 project has been launched. It has the following objectives: • To inform families and the rest of the educational community about everything going on in the school through various technological means. • To involve and motivate families to help in the task of improving their children’s education. • To promote a positive, modern organizational image. In particular: • To promote communication and cooperation between the different management bodies in the school and other professionals. • To add value and create new ways of working. • To improve channels of communication in order to facilitate organization and planning of activities. • To facilitate information and cooperation between parents’ associations and other associated bodies. • To contribute to personal and professional development of those involved in running Parents’ associations.
Actions Line 2 European Project to develop Personal Learning Environments (PLE) In 2014, Viladecans started a project with the cities of Halmstad and Varberg (Sweden), and Konnovesi (Finland). Other partners are as follows: the Ministry of Economy in the German Land of Saxony-Anhalt (Germany), the Regional Development and Innovation Agency in the Észak-Alföld region (Hungary), the University of Oulu – Centre for Excellence in Internet (Finland), the Otto von Guericke University in Magdeburg (Germany), the INNOVA+ Consultant (Portugal) and lastly, the E.N.T.E.R (European Network for Transfer and Exploitation of EU Project Results) Association (Austria). The project, whose acronym is I-Maile, aims to set European standards in so-called
Personal Learning Environments (PLE), and to carry out innovations in public procurement using a process of joint pre-purchase. The project will last almost three and a half years. The intention is to continue in the long term and for this to be the first in a number of European projects of this nature. In conclusion, all these projects should enable the City of Viladecans to turn into the first EDUCATION LIVING LAB in Spain. To this end Viladecans wants to be recognized as a Living Lab by both Catalan and Spanish bodies as well as by the ENoLL (European Network of Living Labs).
CONTEXTUALISATION A high percentage of school failure has been detected in Viladecans. This has led to the development of a â€œCity Challengeâ€? : that is, the improvement of educational success. In general terms, the challenge of developing new educational strategies to tackle the new requirements of the 21st century society. From an instrumental point of view, the need for the introduction of ICT tools in education as elements of integration and opportunity for improving the teaching-learning process. From a methodological point of view, the need to update the methodology used in the teaching-learning process to the new requirements. Collaborative work and teamwork in a cooperative way. The network is one of the results of previous stages where it was achieved: digitalization of all the municipal classrooms by means of digital whiteboards; 1GB fi ber optic connection; collaborative work in the educational community; SME involvement at smart city strategies; collaboration with supralocal entities and administrations. The involvement and commitment of the civil society in the improvement of education as one of the tools that ensure the progress of society in a equal and cohesive way.
NEEDS IDENTIFIED The main need is to improve the educational activity in schools by adapting it to the new needs of a knowledge-based economy. This improvement must also facilitate the acquisition by youngsters of those skills that meet the new needs of the current labour market based on knowledge. In addition to this, the need to incorporate the use of technology as a tool to help improve educational success. And at the same time, to get new opportunities for the economic activity of enterprises.
RELATION WITH ECONOMIC ACTIVITY SECTORS AND/OR AREAS There are two main fields which are directly involved: information and communication technologies (ICTs) and education-training.
However, the network aims to involve multiple activity and fields as it aims to connect the educational world with the different economic activity sectors in order to generate interrelation opportunities which may occasionally lead to new joint Projects and initiatives.
RESOURCES The City Council promotes the Network. Fundació Viladecans coordinates and manages it. An online platform has been created so that the members of the Network can find information can interact.
TIMING The Network started in the last quarter of 2013. It has no end date. It is intended that the network evolves and more stakeholders are involved.
KEY SUCCESS FACTORS A key factor to ensure positive evolution of the Network is the leadership and the involvement of the stakeholders invited to take part in it. To ensure the society understands that education is a matter which concerns everyone, not just those directly involved (teachers and students).
1. Territorial scope The city. However, depending on the evolution of the network with the possibility to involve stakeholders from other territories.
2. Area of application Viladecans belongs to the Spanish network of Cities of Education (Red de Ciudades Educadoras Españolas) and is fully committed to education and its continuing development. Although the project’s area of application should be basically the world of education, the community approach enables the project to go beyond the walls of the schools themselves and have an impact on the whole town, including the community and businesses. This last aspect is very important as synergies and cooperation must be created which make it possible to develop opportunities for companies, for businesses to develop applications for education and/or schools. And it should enable businesses to find well-trained young employees in whose training they have played a role as they have had an impact in the training programs and courses.
3. Type of BP This BP could be described as a “collaboration network”.
4. Stakeholders involved Viladecans City Council, Fundación Viladecans, educational centres of the city, enterprises of the city, universities, other administrations, educational communities, parents’ associations. Individual memberships.
5. Results obtained This is a project which aims to make an impact in the educational world in order to improve teaching and learning and educational success. It is true that changes in the educational world can take a long time to produce results and be shown up in standard educational indicators. For this reason, a year after implementing the project there are still no indicative results as yet. It is, however, true that there is an increase in the interest of schools in adopting innovative strategies and in the number of schools which have incorporated the use of state-of-the-art tablets in their educational projects. This is causing a methodological change which entails a shift from a traditional system towards a methodology which is more focused on pupils and their individual needs. In quantitative terms we are talking of around 25% of schools in Viladecans in which the project is making an impact. It will take some time before the results in the pupils can be seen.
MONITORING AND/OR RESULTS INDICATORS o o o o o o
Number of members. Number of defined projects. Number of interventions online. Number of projects launched. Number of projects or services. Improvements of educational success ratios
6. SWOT analysis STRENGTHS • • • •
There are not previous similar actions. Diversity of the groups and persons that take part. Diversity of interests. Difficulty to define the proposal.
Pioneering project. • Use of ICT as an attracting and • interesting element.
Economic crisis. Lack of budget capacity of Viladecans City Council.
Project with a high impact. Work in a very sensitive field of the Society. High interest in the development of innovation actions within the educational field. Strong support from the local educational institutions
OPPORTUNITIES • •
Conclusion The Educational Innovation Network aims to promote renewal in the educational world of Viladecans by means of involving all stakeholders. To infl uence on educational activities is one of the best ways to change the future of society, a fact that in these times of change, is very important. To help prepare youngsters for their incorporation into the labour market based on activities of the knowledgebased economy by providing those skills that will be needed is a way to guarantee them a future. Thus, the aim of the Network is to promote joint work among all the agents of civil society and the socio-economic world by promoting innovative projects based on new methodologies and the incorporation of ICT tools in the classroom to foster those new strategies that will be key in their future professional development. The Network intends that concepts such as: learn how to learn Teamwork, Collaborative work, Lifelong learningâ€Ś are part of the strategies to be used in the classrooms. In order to make this possible, this Network was created to lead the process.
Delta Business Centre SPAIN Introduction Delta Business Center is a center for new business in Viladecans. The center provides self-employed workers and micro-enterprises with multipurpose working spaces as well as a wide range of services in order to foster the development of entrepreneursâ€™ business in an environment integrated in Viladecans Business Park. The Project aims to reduce costs, increase productivity as well as to improve the corporate image of the company. In short, it provides the new city activities with furnished and equipped offices as well as support services so that the enterprises can forget about the practical management activities of a traditional office. Among the support services, training and capacity building, networking fostering, reception and business management support activities can be highlighted. Origin of the Project Delta Business Center was set up in 2011 with the aim of: 1. Promoting employment by creating new jobs and attracting companies that can create new jobs. 2. Meeting the growing demand from new companies and start-ups in the city and the surroundings.
3. Cope with the difficulty of finding suitable spaces at competitive prices which help to improve competitiveness. 4. Satisfy the need to attract companies which provide added value to the city. 5. Satisfy the need to reduce costs in micro and small enterprises. With these ideas in mind, the public-private partnership composed of the Viladecans City Council, the municipal company Vimed and the developer Bali, owner of one of the buildings in the Viladecans Business Park, made a joint decision to launch this new project, whose aim is to offer a range of spaces and added value services for small and medium-sized enterprises wishing to locate their business in the city. Objectives of the Project for the small and medium-sized enterprises in town: 1. Offer a comprehensive support service to new companies that provide added value to the city. 2. Improve small and medium-sized enterprise competitiveness. 3. Boost creation of new enterprises. 4. Support consolidation of new companies. 5. Support networking between companies as well as with other local stakeholders. 6. Boost collaboration between companies at the Business Park as well with other companies in the city. Developed activities Supply of spaces A range of spaces adapted to the individual needs of the companies interested in taking part in the project has been created: individual multipurpose offices which can be adapted to each enterprise, registration services, business environment, and geographical connection with Barcelona, the airport, the port and the university. A 1.700 square metre space for offices and common areas on the first floor of one of the buildings at Viladecans Business Park which shares 7,000 square metres of gardens and parking spaces. It is anticipated to be extended to the second floor with bigger offices in 2015. This space boosts both the creation of new enterprises as well as the attraction of companies interested in establishing themselves in Barcelona. Organisation of training activities All year long. One of the main aspects of this project that should be highlighted is the capacity to complement the spaces with resources which contribute to improving the
activity of the enterprise. In this sense, several training workshops dealing specific company oriented themes are organised all year long. Some of those workshops are organised by the City Council and some others by the enterprises located at the Business Park. Organisation of networking events. All year long, and together with other departments of the City Council, several meetings are organized, aiming at fostering networking as well as relations with other companies in the city and in the Business Park. Due to the size of these kind of events, they are usually organised at big spaces in the city such as the exhibition centre (recinte firal Cubic), Viladecans Business Park, Centro de Promoción Económica y Servicios a las Empresas de Can Calderon. The intention of these events is that the city enterprises, regardless of their sector and size, can get in touch and explore new business opportunities. Support services to enterprise management “Support services to the enterprise management” are a series of business support services aimed at fostering business improvement and growth in the market. Included are: 1. Monitoring visits and interviews with enterprises in order to identify needs and opportunities. 2. Advice on enterprise management and definition of a working plan. 3. Specialised advice provided by experts on specific business areas such as marketing, finance, management. This is possible thanks to collaboration with several stakeholders in the area (Chamber of Commerce of Barcelona, SECOT, local companies) 4. Business cooperation. Support in the identification of synergies and possible collaborations between the enterprises located at Delta Business Center. In addition to these services, and in collaboration with enterprises located at the Center, Delta Business Center also offers accounting, financing and labour services to support activity development.
1. Territorial scope The territorial scope of the project is, by definition, both local and international. It is local as it responds to the needs in the territory for spaces facilitating micro and small enterprises. It is international, however, as it aims to attract foreign businesses who wish to enter, test, and expand their current markets in our country before moving definitively to Viladecans and Spain.
2 . Area of application Even though the desire is to offer this service to a full cross-section of sectors which bring value and innovation to the territory, there is nevertheless some specialization based on the characteristics of the spaces. There are two main types of activity. 1. Companies in which ICT plays a fundamental role (Computer companies, technological consultancies, e-business) 2. Companies involved in engineering for different sectors (Computing, Industry, Construction, Health).
3. Type of BP The project follows the lines of two types of strategies in the city: SME clusterization and grouping on the one hand and training and support on the other. This model is 100% replicable to any area regardless of the different characteristics that may exist.
4. Stakeholders involved This Project is addressed to micro and small enterprises in the area, StartUps interested in locating themselves in the city, new entrepreneurs as well as national and international enterprises willing to be located in a first level business environment in the Barcelona Metropolitan Area. The enterprises located at the Centre are mostly related to the service sector, most specifically, ICT and engineering. Viladecans City Council, the municipal Enterprise VIMED, the enterprise Goodman and the developper Bali collaborate directly in this project. As far as the support services are concerned, the collaboration of the Chamber of Commerce of Barcelona and SECOT, the Association of Spanish Seniors for Cooperation (entity composed by old managers which offers advice and support to enterprises) should be highlighted. Some of the enterprises located at the Center also collaborate by offering training and awareness raising workshops to other enterprises located at Viladecans Business Center. Sustainable functioning as far as economic resources are concerned. Only some of the support services receive some support from Diputaci贸n de Barcelona
in the framework of wider programmes focused on business creation and consolidation.
5. Results obtained At the moment, 100% of these spaces are occupied by 36 enterprises. In 2013, 75 new jobs were created. The space retention rate by enterprises is quite high, above 80% (i.e. enterprises do not tend to leave the space). It should be highlighted that the contract does not expire after 3 years of the activity. After 3 years the terms of the contract are revised. During 2013, 30 training workshops (with a total of 336 attendees) were organised. The valoration was 8,4 over 10. 10 of the 36 enterprises located at the Centre have taken part in some programme of business support and have revised their activity strategic model as well as summarized their marketing and commercialization actions in a work plan. A session to foster the connection among enterprises is organised once a year. In the 2014 edition, 125 participants took part, which represent 95 enterprises in the city. The main objective was to promote networking and connection among enterprises.
6. SWOT analysis STRENGTHS •
• • •
Location of municipality. Viladecans is 21km from the centre of Barcelona. It is situated in the immediate vicinity of one the most important metropolitan areas on the entire Mediterranean coast. Road communications include the major roads C-31, C-32 and C-245. The town is connected to the centre of Barcelona by bus, and rail on the Renfe C-2 line Barcelona airport is 5 km from the town. Land availability. Viladecans still has land for different types of use (residential, industrial and for other facilities). Proximity of the UPC (Universidad Politècnica de Catalunya). This local university offers qualifications in engineering related to telecommunications, industry and agronomy.
• • • • •
Specialized in traditional production Slow development of company digitalization and investment in technology. Business community dispersed and with little cohesion. Low level of cooperation and collaboration between companies. Lack of internal knowledge amongst companies in the town. Limited resources and dependent on external resources.
Business promotion services offered by the local administration which give support to new business initiatives as well as companies already settled in the area. Availability of space to increase the size of the Delta Business Center.
OPPORTUNITIES • • • • •
El Prat Barcelona airport expansion • New multinational companies located in the city. • Capacity and attraction of new business • activities in the city with added value for the territory Town commitment to new technologies and business promotion. Private and public-private partnerships which make it possible to design new programmes to develop business and entrepreneurship in the territory. Agreements with other organizations and bodies which make it possible to offer a portfolio of specialist, highquality business services
Cuts in public funding for sustainable initiatives to support business. Economic uncertainty Traditional business management models which do not function well in the new environment.
Conclusion The Delta Business Centre has become a magnet for business in the town in two respects. It enables: • Micro and small new companies to find opportunities for their business in the municipality by reducing set-up costs and by making the first few years of operation easier. • Multinational companies who have seen this space as a gateway to the country to set up business here. It should be pointed out that this attractiveness has been demonstrated by the opening of two new private business centres in the last couple of years, thus adding further to the creation of an environment which encourages business. The training, mentoring and cooperation activities offered to the businesses in the centre help the new business fabric to become consolidated, enabling start-ups to grow before moving on to facilities more suitable for their needs.
Although the Delta Business Center project was extended for the first time in 2012, Viladecans is now considering a further phase which would double the surface area currently available. On the one hand, the aim is to attract businesses larger than those currently here, and on the other hand, to offer opportunities for expansion to businesses already located in the Delta who need larger areas in which to grow. This is a resource which clearly fosters economic growth in the area and is a key element in attracting talent and developing employment in the city.
CID - Cells of Innovation Development SPAIN Introduction CID follows a methodology of open innovation where different agents linked to an innovation project are connected and interrelated. It consists of two phases. In the first phase, innovation cases are identified and companies, designers, experts and users involved in the joint experience are selected. Then, the ICT environment of communication and internal exchange of the cell as well as planning for development of the final product is configured and developed. In a second phase, the creation and evaluation of the network that connects the cells is produced. At this same phase the exchange activities are stimulated. This process comes together with an on-line tool that supports the entire process by identifying weaknesses of the process and proposing corrective measures. The added value lies mainly in the methodology and the on-line tool, which consists of a checklist of 92 questions divided into four sections: Innovation Environment, Analysis of the timing of the product (oportunidad de producto) or innovation process, Analysis of the Value of the innovative product or the innovation process and Analysis of the prototype. â€˘
Components and process
Once the model is discussed and agreed, participants start the process of responding to the questions for each driver. As soon as a participant answers a question, an instant representation of all participants aggregated results is exhibited next to the answer. This way, the participant may ponder the answer against the crowd through centrality (mean or median) and dispersion scores
(standard deviation or interquartil range) and decide whether or not to change opinion. As it is permitted to change answers to facilitate agreement, a degree of consensus should eventually be calculated, indicating which components of the model have gained a strong consensus and where weak agreement has been found. The model may be presented and displayed in a number of consecutive rounds, having each round a specific intention and an optional timing. Before participation of the main group in each part of the consensus, it is necessary to get answers from a minor group, so early participants may already compare with some previous respondents. Participants as well as drivers are classified in specific categories. Then, participants according to their category may be associated to a specific expertise and their votes for each driver weighted correspondingly depending on the category in which the driver has been also classified. In Table 1 are summarized the main components of the Innovation Consensus method. Table 1. Components of Innovation Consensus Innovation project Set of drivers Question Answer Scales
Rounds Feedback Participants Research team Weighting categories Results generation
The object to be assessed looking for consensus or agreement. The items presenting the different aspects that define the innovation project. The question that expresses the driver. Possible answers for the questions. Structured answers based on semantic differential scales (1 to 6) where edges define the meaning range (e.g. completely disagree to completely agree). Groups of drivers, distribution of time and management of participants. For each driver, participants are allowed to give insights, comments and opinions. All different professionals involved in all the rounds of consensus. Team that have designed and built the model that represents the innovation project. Classification of drivers and participants in categories in order to weight votes. Presentation of consensus results to the participants.
Cells of Innovation Development - Drivers of the process of innovation:
The CID system is a particular application of the Innovation Consensus Model and consists of a tool that provides a general checklist of the elements that may be considered from the detection of an opportunity to the assessment of a prototype of the resulting product and/or service. The CID tool is based on 96 independent drivers and 24 dependent drivers that are obtained as a combination of the previous 96. The process to select the independent drivers has been based on systematic review of the innovation processes in literature. The CID tool divides the innovation process in four main steps: • Environment: Any innovative project is carried out in a certain environment, which facilitates or hinders innovation. • Opportunity: In the process of a project that aims to create a successful new product or service, it is necessary objectively evaluate the potential of the opportunity. • Value: The expression of value of product or service may be divided in two steps, the concept and formal value proposition. • Prototype: If the proposal is feasible from all points of view, then a prototype can be created, which may be submited to potential customers and users. This cyclic process can be done any number of times, depending on the type of product or service to create. Table 2 lists the 96 independent drivers separated in the 4 steps (rounds) considered in the process of innovation:
Table 2. Independent variables of the CID checklist tool Environment Opportunity Value
12 drivers of Culture of innovation
12 drivers of Importance of opportunity
12 drivers of Concept 12 drivers of assessment Prototyping assessment
- Initiative promotion - Risk management - Proactive attitude - Autonomy of people -Experimentation - Error tolerance - Inspiration
- Relevance - Need - Desire - Deepening - Specification - Diversity - Cost - Technical barriers
- Objectives clarity - Customers participation - Company identification - Customer relationship
- Model of innovation - Support to innovation - Innovation community - Teamwork - Values
- Cultural barriers - Risk of yes - Risk of not - Alignment
- Customer communication - Prices policy - Balanced teamwork - Heterogeneous teamwork - Motivated teamwork - Commercial alliances - Technology alliances - Research alliances
12 drivers of Management of innovation
12 drivers of 12 drivers of Capacity to manage the Proposal assessment opportunity
- Idea generation - Idea selection - Application of ideas - Expertise - Company ecosystem - Time and money - Method of innovation - Strategy - Learning - Customer orientation - Selling agility - Benchmarking
- Sector - Trends - Model adequacy - Property compromise - Managers compromise - Staff compromise - Knowledge - Expertise - Technology adequacy - Segmentation - Specific customers - Competitors behaviour
12 drivers of Prototyping improvement potential
- Integration - Requirements users - Co-creation - Project management - Sustainability - Legal Framework - Trials - Inclusion - User environment - Forecasts - Sellers - Resources
Table 3 presents the 24 dependent drivers obtained as a combination of the previous 96 drivers. For each one of the 4 steps of the innovation process there are: â€˘ 2 drivers that are obtained as a linear aggregation of two groups of the 12 drivers already listed in Table 3 for each step. â€˘ 4 more drivers that are based on an algorithm using the 24 drivers of the round or step. Table 3. The dependent drivers for each step of the innovation project
Culture of innovation
Importance of opportunity
- Entrepreneurship - Creativity - Leadership - Collaboration
- Opportunity value - Identification - Viability - Risk
- Concept model - Business scenario - Team - Alliances
- Commercial - Product service - Design - Logistics
Management of innovation
Capacity to manage the opportunity
Room for improvement
- Ideation - Resources - Process - Marketing
- Vision - Commitment - Know-how - Market access
- Design - Development - Tests - Sales
- Commercial - Product service - Design - Logistics
Process of participation
In brief, the checklist of drivers presented above is used as a set of indicators to consensus the perception of performance level in the consecutive steps of an innovation project. The drivers, embedded in the online asynchronous opinion sharing system, allow the group of professionals to agree, validate or assess the innovation project, and as it has been explained, to do that, participants express their quantitative-qualitative opinions about the different attributes affecting the goodness of ideas, resources, limitations and/or results obtained. This is the way CID facilitates and carries out people involvement in the assessment of an innovation project. Following the checklist presented, participants begin with the evaluation of the environment and the opportunity of a product and/or service. First, a limited number of people share their opinions about the attributes affecting the goodness of ideas and concepts, but as the project advances, formalising the value and proposing some kind of prototype, the number of people involved in the project assessment is expected to increase. In Table 4, following the general Innovation Consensus presented in the previous sections, the main components of CID are summarized. Table 4. CID components Component
The construct, knowledge, decisions etc., which is object of consensus or agreement.
The innovation process, formed by four groups of indicators representing: • Environment of innovation • Opportunity for innovation • Value • Prototype
Set of drivers The items displaying the model.
96 Independent drivers: - Encouragement of Initiative, - Management of risk, etc. 24 Dependent drivers: - Entrepreneurship - Creativity, etc.
Driver related question.
One question per independent driver, referring to the level of the driver. For the driver “Encouragement of Initiative” the question is: “Organisation values imagination and encourages people to propose and lead new projects?”
Possible answers for the questions.
A scale from 1 to 6 with specific semantic differentials for each extreme of the question. For the driver “Encouragement of Initiative” the semantic scales are: - From time to time (minimal of 1) - Always (maximum of 6)
Groups of drivers, distri- Four rounds that are managed by an administrator bution of time and mana- according to the interest of each project. gement of participants.
Communication facilities. For each indicator (driver) participants are allowed to give insights, comments and written opinions.
All different professionals involved.
Groups of people invited to take part in the consensus process has not a limit except the logics of each particular innovation project.
People that has designed and build the model.
A core group of 3 researchers and a group of 12 professionals have completed the first trial and validated the model with the online consensus system.
Classification of drivers and participants in categories in order to review votes.
The indicators (drivers) and the participants are classified in three categories: Design, Management and Technology. The option selected the first weights 5, the second one weights 4 and the last one weights 3.
Results gene- Presentation of results to ration the participants.
The results of the participative process have two levels: - A final list with 24 indicators that aggregates the 96 independent drivers. - The stratification of answers for each group of users with the consensus for each one of the 96 independent drivers.
There are different ways and tools that are possible under the general model of Innovation Consensus, and during the design of the CID tool some decisions were taken to define it. Table 5 summarizes the criteria applied in the design of the CID solution and allows to imagine other possible applications based on the Innovation Consensus Model.
Table 5. Criteria and decisions taken during the design of CID Drivers
The number of drivers and how to order and present them is the most significant aspect of the tool design. The accuracy of the model increases with the number of drivers, but it does so the complexity and the intensity of the participative process. The aggregation and classification of the drivers is a critical aspect in order to help participants to understand the innovation model.
The question for each driver is different and adjusted to express with fidelity the meaning of the driver. Using the same questions for all the drivers would have made easier for the participants to answer, but changing the questions for each driver produces a much more precise opinion.
Participants The selection and stratification of participants is directly related with their gradual involvement in the innovation process. If the number of participants is very high the value of the consensus increases but participation becomes more depersonalized, and the impact of each participant vote is diluted. Rounds
o o o
The model of innovation is divided into 4 consecutive rounds, and the number of participants may be increased en each round. A major number of rounds would have allowed to define the process with more precision, but also would have made more complex the definition of the innovation product o service.
â€˘ OBJECTIVES To create a tool that supports SMEs in the innovation process and its implementation. To identify innovation and design projects capable of becoming an innovation cell. To implement tools that facilitate communication between the agents of each cell and are necessary to ensure the exchange of knowledge and test their functioning. Bring knowledge to business and innovative products to market. â€˘
The extreme nature of the economic crisis has caused youth employment to plummet since 2008, and this situation is particularly serious in the Baix Llobregat. 101
10 http://www20.gencat.cat/docs/observatoritreball/Generic/Documents/Treball/Estudis/Joves/2011/ Arxius/Butlleti%20%de%20%joves%20%i%20%mercat%20%de%20%treball%203r%20trim%2011.pdf
Baix Llobregat is an area known for its industry, logistics and services which also has potential to exploit agriculture, nature and culture. The possible creation of the Eurovegas (entertainment) complex has raised questions about the type of development to be pursued in the area. The economic downturn has left Baix Llobregat with a 16.5% unemployment rate (Catalonia 16%), and in certain towns even higher, with Sant VicenĂ§ dels Horts, 20%, CornellĂ de Llobregat, Martorell, and Sant Boi de Llobregat, 19% and Viladecans and Olesa de Montserrat 18%. The population in work is relatively well-spread Industry
Services for production
Transport and communication
Commerce, restaurants and hospitality
Public administration and education
Health and social services
There is an urgent need to promote economic initiatives in the region which will generate new jobs, above all in knowledge-based economic activities which may be required across the full range of the economic spectrum. There are clear short and long-term opportunities inherent in the fact that the region is a part of the Barcelona Metropolitan area, which produces 26% of the countryâ€™s exports and 37% of registered patents. In this respect the Llobregat delta is the largest logistics centre on the Mediterranean coast and in the south of Europe. The airport, with its 35 million passengers is set to grow both in numbers and in international connections,
and its objective is to become a European leader in short and medium distance fl ights. Equally, the port of Barcelona is set to double its traffic in the coming years. Baix Llobregat also has other features which due to their location could be exploited for tourism, business, conventions, sports and leisure. The commitment to infrastructures in the region represents a highly impressive asset which should pay off in terms of opportunities. This is the immense potential of the “hardware” which could go to waste if it doesn’t receive the “software” which will allow people from the surrounding towns to discover new business opportunities and generate jobs. These jobs must be based on knowledge if they are to be sustainable. There are 41 industrial estates in the Delta area which comprise nearly 19,000 businesses in a range of different industries: chemical, food, automotive, automotive services, and electric and electronic components. Baix Llobregat is, and will continue to be, an industrial region and sees itself as one of the engines of industrial growth in the region. It is well-known that there is enormous potential for growth and job creation in the logistics sector as a result of the port’s expansion, the new Terminal 1 in the airport, and the new rail and road connections to the area of logistics activity in the Zona Franca (ZAL-1) and the new logistics hub ZAL-Prat (ZAl-2). A whole range of different industrial activities and services in which innovation and design are central can be promoted around the central area of logistics. These include packaging, goods management, services linked to personal mobility and tourist services. In all these cases the design factor has an impact on innovation and this in turn has an impact on competitiveness. Some of the key factors which have an impact on the development of this methodology and the online tool where it is based are: o Low index of SME innovation. o Detachment between knowledge generators and the business fabric. o Need to find tools that reduce as much as possible the potential risk of innovation projects. o Need to provide SMEs with tools according to their structure in order to guide them through innovation processes by speeding them up.
The need to develop a tool that fosters innovation in SMEs which is low cost and easy to use with almost no learning curve. The economic crisis does not affect all companies in the same way and one of the factors which determines the success of a company, now more than ever, is its capacity to innovate. In recent years design, design thinking and design management
have all emerged as important elements of innovation. Roger Martin has said that all business people have to think as designers if they want to be competitive in the future, regardless of the economic sector in which they operate.11 Innovation, however, is not so much a question of opening a new department in the company as causing the company to adopt a whole new way of working which must be sensitive and agile in responding to market trends, and more creative in developing the company’s value proposition. Thus it is essential for all levels of a company to understand the vital need to innovate. This means that raising awareness and learning ways of using design thinking and management in companies are essential. This is both highly important and highly urgent. 2
RELATION WITH ECONOMIC ACTIVITY SECTORS AND/OR AREAS
Industrial activities with own product. In 2014 new activity sectors as well as the service sector will be opened.
• o o o
Online advice service supporting innovation. Creation of the Innovation and Design Canvas, Check List with 96 question aimed at validating the innovation projects of the enterprises and highlighting the key factors to ensure the success of the project.
Year 2013 - 2014
KEY SUCCESS FACTORS
The success of the tool available to small and medium enterprises CID is based on: o User-friendly management. o Easy and quick achievement of results of evaluation of the state of innovation of the enterprise as well as the feasibility of the innovation processes launched, highlighting their strengths and weaknesses. o Involvement of all the stakeholders taking part in the innovation process at the enterprise, in order to get them to agree on the issues raised by unifying the way of conceiving and approaching the process. o Involvement of public and / or private organisations fostering enterprise innovation so that they incorporate the on-line tool in their processes to promote innovation among enterprises. 11
Dean of the Rotman School of Management of Toronto
Involvement of business organizations so that they support the use of tools that promote innovation in small and medium enterprises
1. Territorial scope Regional. The project must allow for the inclusion of further geographical environments as one of the projectâ€™s central aims is to establish permanent links between agents of innovation in other geographic areas who are able to make important contributions. The specific focal points proposed are a town in the Barcelona Metropolitan area and the Catalan community. The project strategy is to focus on these two areas in order to generate value for professionals and businesses which can be turned into jobs. The basic professional relationship in the project is the exchange of knowledge between the cells located in the town and those located in the community. In order to make this relationship efficient it is necessary to consider the participation of other agents: The profile and contributions of experts will be identified by taking into account the specific needs of businesses. These experts can be encountered in the Spanish scientific community. With regard to users, it is hoped that one of the companies participating in the cells will contribute an innovative product or service for the export market. The participation of users from the European Community is considered for these cells.
2. Area of application There are two areas of application: Entrepreneurship and SMEs. 1. Entrepreneurship. Offering tools that allow the analysis of the entrepreneurship idea and proposal is very important support for an entrepreneur. 2. SMEs SMEs are always very busy with day to day issues and they need very easy and intuitive tools that provide added value to the innovation activity. This tool solves these needs.
3. Type of BP This best practice could be classified as â€œtool and / or resourcesâ€?.
4. Stakeholders involved • Consolidated Stakeholders: Enterprises and business associations in the city. Universidad Politécnica de Cataluña (UPC), Barcelona Centre de Disseny (BCD), SOC Generalitat de Catalunya (Catalan Enmployment Service) and Fundació Ciutat de Viladecans. •
Actions are being implemented to achieve more collaborators: Agencies promoting innovation at the territory Innobaix (county scope) and Acció (regional scope).
5. Results obtained To test and assess the validity and adequacy of the CID tool for the purpose defined, research has been done in two phases. The first was conducted without any kind of digital tool, working with the participating companies involved in the development of innovation projects that extend over a year. The second phase was based on the use of a digital tool that facilitated the CID application to users. The first phase allowed, thanks to different tests and experimentation done with the companies, the design of the tool that was used in the second phase. The test and assessment process described in this paper represents a first step in the research, and is devoted to see the usability of the tool and the self identification of participants with the outputs. The research method for the first phase of the test has been based on a focus group inspired method, with 15 participants, all of them CEOs and/or leading people from the companies. At the end of the debates with each one of the participants three main questions were asked regarding: • The level of identification with the drivers of the model according to products and/or services of the company. • The perception of utility of the innovation consensus model in order to facilitate the assessment of the innovation projects. • The usability and viability of the application based on the presentation of the first prototype of CID. In all cases, the final consensus about CID was more or less the same and may be summarized as follows: • In general terms everybody felt quite comfortable with the list of drivers, both, dependent and independent. As a result of the focus group a new functionality was added to the system allowing personalization of the list of drivers to a sector, particularly relevant for the health sector where the terminology used in hospitals is different from the more commercial ones used in companies.
Few people found difficulties in the use of the application, and if so it was due to the fact that they were not using updated computers or smart phones. Everybody agreed about the intuition of the utility of the profile of the innovation project although because of the novelty nobody knew exactly how and when to use those outcomes. There were no relevant differences between the opinions of different kinds of users.
The CID system, in the second step of the research, has been applied in 6 different cases and the results are synthesized in Table 6. Users were invited to go to the application http://cid.XXXXX.net and do the whole job by themselves without any kind of instruction or advice. The group of applications has allowed testing and assessing the validity and adequacy of the prototype of the tool. Not all the participants completed all the rounds before the presentation of this paper due to the differences in rhythm in the respective innovation projects. Table 6. Companies participating in the validation of the prototype
3, 14, 14, -
6, 7, -, -
2, 5, 15, -
2, 6, 12, 23
3, 7, 12, -
R&d Pharma Ind.
3, 5, 12, 16
The objective of the practice presented here is to share the advances in a research programme with the intention to provide tools and resources to help in the development of innovation projects. The main conclusions are: • Design professionals and experts respond positively to the proposed model of participation. • The participation process is efficient and obtains high levels of satisfaction. • Participants perceive they contribute with value as a result of their involvement in the participative process. From this point, with a consistent model, it will be possible to continue with the development of new functionalities oriented to make recommendations to the companies according with their results. Future research has two main directions. On the one hand, the research may contribute to the development of the wide area of collective intelligence and the
application of technological tools. Mobility, big data or social learning are some of the areas where research will be extended. The general goal of the research was to share the advances in a work where the explicit intention is to provide IT tools and resources to help in the development of a more participative innovation management. Some weaknesses have also been discovered in the action-research design and development, that provides very interesting elements to consider in the future versions of this prototype. There is a lack of culture in managing online asynchronous processes that decrease the rate of response. There are difficulties managing the richness of multi-disciplinary actions and limitations when mixing very different profiles. From this point, with a consistent model and prototype it will be possible to continue with the development of new functionalities oriented to make recommendations about the management of chronicity.
To monitor the project an adaptation of user centred design (UCD) methodology will be used. This has proved itself in previous research and is geared towards validating the usefulness of the experience. UCD methodology guarantees that the system provides users with useful information appropriate to their activities and tasks.
Reference model for network monitoring. Doctoral Thesis. Claudia MartĂnez, Multimedia Engineering. UPC 2012.
In order to guarantee the efficient selection and design of the functional components of the project and the activities to be carried out, there will be a development process involving occasional validations by agents involved in the experience.
Assessment of results One of the tools to be used will be user satisfaction surveys. Results for people taking part in the experience will be evaluated using an adapted Delphi method. The method makes it possible to obtain important information about the technological proposal in the projects. (Technology Acceptance Model). The TAM model indicates the factors which may have an influence on the way in which a user decides how and when to use a technology. These factors are: • Perceived ease of use (PEOU) • Perceived usefulness (PU) • Attitude towards use (ATU) • Intensity of use (IU) • Behavioural intention (BI) The questions in the monitoring questionnaires and the way they relate to each of the factors can be seen in the table below. This proposal is provisional with respect to identifying indicators which are of particular interest to groups participating in the project and to modelling questions so they are suited to specific project activities.
Perceived ease of use
The interaction with the network is clear and easy to understand
The network is easy to use
Learning to work with the network is easy
. It seems useful to implement a network in order to manage my activities
The use of the network system allows me to carry out tasks more efficiently
The use of the network system improves my performance in the group
In general, if I make use of the network system I will increase my chances of improving results in my activities
Attitude towards use
Intensity of use
Using the network is a good idea
The network makes managing my activities more interesting
Working with the environment is very beneficial
The network is an attractive work environment
In the last 5 days I have had access to the internet.
In the last 5 days I have had access to the community website.
In the last five days I have used the web.
As far as possible I will use the network to manage my activities and to improve my performance in the group
I intend to increase my use of the network in the future.
In addition to this methodology, it will be of particular value to analyse the following quantitative indicators:
â€˘ o o o o
MONITORING AND/OR RESULTS INDICATORS
Number of enterprises using the tool. Number of registered users. Activities of dissemination and training on the use of the tool. Number of participants in these sessions of dissemination and training. Results of the satisfaction surveys carried out by the tool users
6. SWOT analysis STRENGTHS • • • •
Very economical tool and user-friendly. • The tool provides graphic results which are easy to understand and assimilate. • The tool provides relevant and verifiable results in a very short time. The tool entails a soft and easy learning curve.
OPPORTUNITIES • •
Lack of a clear business model for the use of the tool. Difficulty to finance the project.
There are no such tools for small and medium-sized enterprises. Tool with a wide diversity of use. It is suitable both for the individual use of an enterprise as well as a supporting tool for the consultancy/advice work. Low-cost.
Lack of innovation initiative at small and medium-sized enterprises. Lack of innovation culture at small and medium-sized enterprises.
Conclusion The innovation cells are a good method of promoting policies and strategies of innovation in SMEs. The use of low cost ICT with efficient results from a small investment, both finance and time-wise, is an incentive for those companies that want to develop a culture of innovation and to start innovation processes in their companies. The need for innovation in the enterprise is nowadays undeniable. The need to involve small and medium-sized enterprises in the innovation processes is also key to ensure their survival. The difficulty of small and medium enterprises to access strategies of promotion of innovation is an obstacle which is intended to be solved by integrating this tool among the services that the organizations and agencies promoting innovation offer to companies. Since they are used to ask for help and advice to these organizations, this is considered to be the most appropriate way for proper dissemination.
Viladecans SMART SPAIN Introduction In driving forward the Smart City Viladecans strategy, the local authority for this medium-sized city in the Barcelona metropolitan area is providing leadership
in social and economic development. In our view, the smart city concept means a city which unites economy, people, mobility, environment and governance in an intelligent manner using technological means. Smart, then, is a unifying concept but it is also an agent of change, as it implies bearing in mind the needs and opportunities of changing realities. The strategy was formally adopted three years ago, but it originated a decade ago, when the authority committed itself to providing the town with the communication infrastructure which we felt would be one of the key elements in the years to come and which would promote economic activity and community welfare. Since we first defined the Smart City Viladecans strategy we have created integrated action plans which have enabled us to establish a range of different aspects: the discourse and the conceptualization of the Smart City; the priorities and the objectives; and the indicators and the means of evaluating the results. In the early years this meant providing the resources required, a monitoring committee, and specialist work groups. At the same time, we worked towards winning support for the strategy from different agents and citizens in the city. In this respect we should point out that an increasing number of businesses in the city, some large but most small and medium-sized, are actively involved in the challenge of the Smart City strategy, which, in essence, is designed to achieve innovative and intelligent ecosystems. These ecosystems, or environments, are key elements in promoting company consolidation and growth and in attracting new investment and businesses into the area. The Smart City Viladecans development strategy has four main areas: - Smart Living - Environment - Infrastructure - Mobility
Objectives The mission, the challenge, the main objective is to improve both environmental and economic sustainability in Viladecans, in order to generate more opportunities for business and to improve community welfare. Thus our vision is of a city, efficiently and effectively connected, which uses technological innovation as a instrument to enable this objective. The vision is also of a city in which â€œcompanies and citizens are increasingly innovative and intelligentâ€? (smart people), who are aware of and use technology in their lives.
- The General objectives of the strategic areas are as follows: 1. Infrastructure - Develop a network throughout the municipal area - Define a master plan in order to cover the needs of “connectivity and self-supply” - Create and develop a platform for smart management 2. Environment (e-environment) - Fight against climate change - Improve quality of town environment - Conserve natural heritage, promote biodiversity and improve landscape 3. Smart Living - Improve education and work towards educational success (e-education) - Provide accessible, participative and transparent administration (e-governance) - Eliminate or reduce the “digital gap” - Improve business competitiveness (e-economy) 4. Mobility (smart-mobility) Implement traffic management plan in real time Improve traffic management Improve parking management Improve fleet management and reduce pollution levels. Thus, in incorporating the Smart concept and strategy we are defining and promoting public policies which favour innovation and the development of new services. They should also generate new and innovative business opportunities and new types of public-private cooperation which enable economic growth to be combined with sustainable values.
Context Cities, in which the majority of the population live (it is estimated that by 2050 70% of the population will live in large cities), are dynamic environments which are characterized by competition, communication and human capital. They are centres which generate economic, social and cultural wealth; they are responsible for the
conservation of nature; and they create spaces for people to relate to one another. It is precisely these relationships which advance knowledge and develop talent. For this reason the involvement of different agents in the common challenges of sustainability and innovation must be priority objectives. Within this context the current city model is evolving, or must evolve, in order to mitigate the consequences of this growth. In terms of the generation of economic activity, various studies have highlighted that the global market of smart cities will exceed a trillion dollars in 2016. In addition, these studies also show that the annual growth rate in the smart market is almost 15%. The analyses refer to sectors linked to security, transport, health, industry, the automotive industry, energy and homes. The studies conclude that smart cities are growing at a faster than average rate. These indicators demonstrate the ability of smart cities to promote new business opportunities in different economic sectors. It is clear that we have to take into account the increasing number of leading companies in business related to intelligent cities. In this context there are many alternatives and opportunities to foment business competitiveness using various tools, resources and activities: networking and coworking amongst professionals (also from different sectors); decentralized modular offices; temporary partnerships; incubators; RDI projects; public-private initiatives; living cities, exhibition spaces and technology testing opportunities. In the coming years our cities will become much more complex ecosystems in which our daily urban and energy needs will be much greater than now. Our citizens will be much better trained and will demand cities which are healthier, more sustainable, more efficient and with a higher quality of life. Governments will have to face these challenges and will need to manage scarce resources, energy, urban mobility, traffic and urban sustainability more efficiently. The Viladecans Smart City strategy is a key element in our overall aim of putting our city in a position to improve the quality of community life and business competitiveness. We believe, therefore, that this â€œpracticeâ€?, the Smart City Viladecans strategy, is an appropriate response to the economic context in which it is implemented. Further, we would also like to point out some aspects and features of our locality which make it possible to understand the clear reasons for applying the Smart City strategy. As we have said, Viladecans is situated in the Barcelona Metropolitan Area, only 10 km from Barcelona itself. It is connected via the main road, rail and air infrastructures. Thus, one of our main priorities is to promote mobility of people
and of goods. But at the same time it is also a priority to reduce the environmental impact of this same reality. Another characteristic we would like to point out is that Viladecans is a town with a rate of unemployment above the average for Catalonia (though below the Spanish average) and in which therefore educational success and the improvement of citizens’ professional qualifications is a key element in the overall development of the town. For this reason, as we have said before, one of the main areas of the Smart strategy is education (e-education). Another objective is to maintain our economic activity and create new opportunities as the demand for jobs is greater than supply. This means that a high percentage of workers, citizens of Viladecans, have to look for work outside the municipality, and this also affects mobility. For this reason, by implementing smart projects, and encouraging new businesses to be set up we also aim to create new jobs. We also need our businesses to become stronger and increasingly competitive in the global economy. Smart projects must have a direct relationship with these changing realities as they promote business activity and generate new business enterprises.
1. Territorial Scope As a matter of priority our Smart Strategy is connected directly with local development. This strategy’s objectives and key areas of activity take into account the reality of the town. This is a changing, evolving reality which is clearly intimately connected to the characteristics of its surroundings and the trends in the different European countries and regions. Thus we need to incorporate the approaches and challenges contained within the EU Horizon 2020 document. Here we would point out that, although Smart City Viladecans refers primarily to our city, there are important relationships with the local metropolitan areas and beyond. For example, a company involved in the town’s Smart Project which, happens to be an international company (which tends to be the case in technological companies) would be able to spread its knowledge, products, services and experiences in other parts of the world. At the same time, in local terms, the town will also be able to benefit from what the company may “learn” from other activities it may have in other regions. That is to say that relationships and synergies in a global world have an impact on a local level, and vice-versa. And when we create smart strategies we have to take into account that there are an increasing number of cities incorporating these strategies. For this
reason, the definition and development of the model is dynamic and learns from results and similar experiences in other cities. Along these lines Viladecans belongs to the Spanish Network of Cities of Innovation (Innpulso) which in turn is connected to other similar European networks. Cities in this network are promoting innovation and the incorporation of Smart projects in business and in their localities. We have been able to present our Smart City model in various forums in Catalonia and Spain.
2. Area of application When establishing relationships between the Smart City Viladecans Strategy and the different sectors of economic activity, it is important to remind ourselves of the four main areas of activity we commented on earlier. In Viladecans the projects being carried out in the areas of smart mobility, smart living and smart environment apply innovative and cutting edge technologies in order to develop systems, products and services. One of the challenges is to ensure that they are directed at detected needs and specific users. There are new tools for controlling and managing traffic, for managing transport fleets, for parking, and for identifying safe cycle routes. There are also products and services, generally using ITC, being applied in the areas of health, education and tourism as well as in energy efficiency, in public spaces and the environment in general. Some of these, such as digital whiteboards, smart desks, online platforms for use by the educational community (teachers, parents, administration and pupils) and specific applications on tablets to be used in schools, are producing very positive results in terms of the objectives set. There are also ITC applications for tourism using augmented reality, and finally, there are open data platforms, electronic records, and virtual archivesâ€Ś. Thus one can see that there is a wide range of economic activities linked to smart projects: construction, energy, mobility, health, tourism, education and security.
3. Type of good practice We believe that Smart City Viladecans is an example of good practice and shows that in developing competitiveness in small and medium-sized businesses smart projects have contributed to the â€œResearch, Development and Innovationâ€? objectives contained in the PROGRESS programme. The smart city strategies clearly encourage
companies, regardless of their size, to incorporate technological innovation in their organization and management as well as in their products and services. One of the elements we would consider to be fundamental and closely connected to developing a more productive economy is the use of ITC technologies. The sectors which are contributing most to the growth in productivity are those which use ITC intensively.
4. stakeholders involved Although it is clear that the Smart City strategy must provide and use appropriate connectivity infrastructures and must take innovation and technology into account, above all it requires an active and cooperative “smart society” (companies, centres of knowledge, organizations, public authorities…and citizens). For this reason, it is a priority to define areas of participation which generate synergies and foster the involvement of different agents in the Smart strategy, who can analyse and comment, set up projects and set priorities for lines of action. The smart strategy has depended, depends, and will continue to depend on the involvement and cooperation of a range of other agents in the area. We have always been acutely conscious of this need when defining the projects and developing the different stages of the strategy. From the point of view of the public authorities we have brought technicians and experts into our work teams in various municipal departments. And although public areas, such as education, infrastructures and health, are largely the responsibility of regional and national government, we have aimed to involve them in order to agree on objectives and pool resources. To this end, we have sought to work closely with the Catalan government and with other authorities from beyond the town (such as the Diputación of the province of Barcelona). Furthermore, the smart strategy is also bearing fruit in a very interesting way in publicprivate partnerships. We see this as a key element in the success of the projects. To be specific, we can point to the following agents involved in the Viladecans Smart Strategy. 1. Administrations: regional (Generalitat de Catalunya), central (various Spanish government ministries) and provincial (Diputación de Barcelona). 2. Telecommunications companies (Orange, Xarxa Oberta, Adamo, amongst others) 3. Large companies (Agbar, Unilever, STP, Desigual, Roca) 4. More than 20 small and medium-sized businesses in the city involved
directly or indirectly, either in positioning the local smart strategy or taking part in some of the specific smart projects. 5. Other organizations and bodies which have joined in and share the strategy: UPC (Universidad PolitĂŠcnica de Catalunya) and other specialist centres of knowledge, business organizationsâ€Ś
5. Results obtained To date, more than 50 projects have been carried out as part of the Smart City Viladecans strategy. There have been important landmarks such as the provision of fi bre optic to more than 10% of the population, a system to monitor the consumption of energy, the Education Living Lab, a fi bre optic connection to all schools in Viladecans, and the provision, as we have already mentioned, of digital whiteboards in all classrooms. Companies from the town have collaborated and continue to collaborate in these projects. Below we provide details of some of the smart projects we have implemented. Not all of them are at the same level of development: some are in the initial phase and others are already providing specific results. We present a summary organized under the four main areas of activity mentioned above. Infrastructure - Concession of infrastructures for the use of fi bre optic cables. - Wireless networks in public areas - Connectivity for public lighting, mobility and other types of management services in community life. - Definition of smart management platform to change management service model in the town. Environment - Energy information system - Energy management in primary schools - Energy management in public lighting - Production of renewable energy (photovoltaic) - Self-consumption and micro smart-grids - Energy maps - Heat maps - Systems to control rain and run-off water - Systems to control sprinklers in parks and gardens - Systems for flood control - Control and development of ecological cycle
- Control of quality of atmospheric environment and electromagnetic radiation - Management of municipal waste collection - Control of sound and light pollution - Control and monitoring of biodiversity. Smart Living e-Education - Connectivity in schools - Installation of interactive whiteboards - Educational Innovation Network - Innovative tools: tablets, smart desks and educational platforms - Personal learning environments e-Governance - Citizen e-participation - Electronic website - Open Data - Geo portal - Augmented reality - Website for municipal transparency Reduction of digital gap - Training courses - ITC workshops - Awi-net e-Competitiveness - Promotion of economy and small and medium-sized businesses - Website for economic information: Viladecans business - e-tourism - Business one-stop shop. Mobility e-Mobility - Fixed radars and wave traffic lights - Video supervision of access to pedestrian areas - System to monitor traffic by images - Viladecans Guide mobile app: traffic information and information about public transport - Dynamic information panels in bus-stops. Each one of the projects listed has its own indicators which allow us to monitor and evaluate the project appropriately and make relevant changes. For example, the project â€œOpen Dataâ€? has the following indicators: 1. Number of data sets published
2. Publication formats 3. Access statistics (pages visited, numbers of hits, etc ) of the www.opendata. viladecans.cat website 4. Downloads of data sets Smart City Viladecans, the example of good practice we are presenting, has been an exceptionally positive experience up to now. This is due to the fact that the “SMART” policy has been geared to the needs of citizens and companies. Key aspects which have had an infl uence in the various phases of the implementation of the Smart strategy have been: • The importance of establishing the city’s vision and strategy, and therefore, the smart actions and projects to be developed. • The importance of close cooperation between all relevant agents. • The exchange of knowledge and experiences from other locations between businesses, administrations, research and knowledge centres, and, of course, citizens. • The importance of citizen participation, and for this reason, campaigns to publicize and encourage the Smart strategy so that it is recognized as a key to development, growth and community welfare. • The clear commitment of the local authority (City Council) to create connectivity infrastructures (city neighbourhoods, as well as zones of economic activity, in industrial, logistics and services areas).
6. SWOT analysis STRENGTHS • • • •
• Strong leadership by town council Cohesion and range of skills in the team • running the initiatives Project in line with Europe 2020 strat• egy objectives Experience in developing local development policies (City Strategic Plans) • •
Economic crisis which results in a lack of finance. The novel focus means that there are few models to follow or consult. The extensive and comprehensive nature of the Smart strategy, which ranges from Smart mobility through to Smart living, can mean that objectives are scattered. Difficulty in promoting public awareness of the Smart strategy. Greater difficulties in coordination as the number of agents involved grows.
OPPORTUNITIES • •
Prepare the city for the challenges of • the 21st century. Improve aptitudes and abilities of citizens in facing the new challenges of the job market and enable them to develop • • better professional careers Attract businesses to the city, principally businesses in the new technologies, with the associated increase in high quality job opportunities Improve the quality, and increase in the quantity of citizen participation. Exchange knowledge and experiences with other Smart models.
This is a different model which is not within the strategic lines of large specialist companies which are market leaders Adverse economic and social context Difficulty in coordination and cooperation with other agents
Conclusion Through this development strategy, Viladecans has established a “road map” which will enable it to continue to achieve the objectives it has set itself in becoming a sustainable city capable of meeting future needs. This local development strategy, based on knowledge and the application and appropriate use of technology, means a process of change in which there must be involvement by citizens, businesses, and indeed all agents who live and work in the locality, so that together we can continue building a “21st century city”. Economic and social challenges, based on sustainability and on generating opportunities, can only be achieved if our focus is on inclusiveness, transformation, innovation and collaboration, which, in our view is found in the local development strategy we have adopted. To date, Smart City Viladecans has produced good results and our “road map” will allow us to continue to build a town which believes that the main element to focus on is people, Smart Citizens, and which is making the necessary changes to improve social harmony and improve quality of life. The main objective of our smart projects will be to continue to grow as citizens seeking effectiveness and efficiency in our lives but always aware of environmental and economic sustainability.
TRAINING The success of EU businesses and industry on global markets depends on their having access to a highly skilled and adaptable workforce. With more than â‚Ź10 billion invested across the EU every year, the European Social Fund (ESF) is the main financial tool that is used to invest in improving the skills of the workforce and its capacity to adapt to change. It does so by supporting reforms of initial education systems, putting particular emphasis on better matching skills taught with those readily required on the labour market (e.g. equipping people with transferable competences such as digital skills, languages or entrepreneurship). It also aims at improving the transition from school to work (e.g. by supporting additional vocational training, apprenticeships or internships) or by enhancing the provision of lifelong learning both on-the-job and separate from it. All these interventions not only enhance the opportunities of individuals on the labour market but also help employers gain access to employees with the right skills and the capacity to adapt to changes. They provides an overall positive impact on competitiveness. In order to fully exploit the ESFâ€™s potential, it is essential that all relevant stakeholders, and in particular all social partners, are involved in the programming and if/where appropriate also the implementation of the various interventions. In many Member States, people with the right talents cannot be recruited despite competitive wages. These shortages can reflect factors other than skills, such as unattractive working conditions, poor recruitment policies and lack of labour mobility. Most governments give financial incentives for employer-provided training, particularly where skill shortages are common or for groups with high inactivity rates. Even in countries where the education and training systems are performing well, there are ways to improve the matching of skills with the everchanging requirements of the workplace. The EU has proposed a number of measures that facilitate cross-border mobility, match qualifications to the skills base, anticipate and manage industrial change at a regional level and improve the availability of inter-disciplinary skills. Further work is required in many Member States in order to make employers develop effective
recruitment strategies, create attractive working conditions and implement those learning opportunities which prove essential for successfully upgrading skills. In addition, there is space in many Member States for increasing the use of the dual system, which combines apprenticeship in a firm with education at a vocational school.
ITS: Higher Technical Institute, Umbria ITALY
Introduction Improving the standing of vocational and technical education and devising ways to link vocational education and training (VET) and higher education in Europe has been a major concern since 2000. Indeed, education, training and lifelong learning play a key role in the achievement of the priorities of the Lisbon Strategy and the “Europe 2020” follow-up. This is especially the case with regard to smart and inclusive growth for facing the challenges of globalisation, demographic change and the knowledge society. Given this European context and in the framework of recent reform of higher education, the Italian VET system is experiencing a process of challenges as the development of a competitive labour market depends on successful implementation of well-defined education policies able to answer the requirements of the new public and market mechanisms. The implementation of 58 higher technical institutes (Istituti Tecnici Superiori – ITS), as a specific post-secondary education and training path, represents one of the flagship initiatives of the Italian Ministry of Education, University and Research (MIUR). It involves a large joint-effort with local and regional authorities, education and training institutions and private enterprises, aimed at ensuring the adaptability of the education system so as to provide valuable knowledge and sound skills. The higher technical institutes are mixed public-private institutions. They are autonomous bodies established under private law and aim at providing a service of public utility, in a dynamic governance process among public and private sector. They can be set up by: • upper secondary schools belonging to the technical/vocational branch (as defined by Italian Law n. 40/2007); • training institutions accredited by an Italian Region for the purpose of higher level training; • enterprises belonging to the same productive branch as ITS courses; • university departments or any other body belonging to the technological/ scientific research system;
local government authorities on a local level (municipality, province, extended urban area, etc). The 58 new ITS, which are operational from school year 2011-12, are the result of a strong synergy amongst different actors: - 110 upper technical and vocational institutes - more than 60 provinces and municipalities - 16 regions - 200 enterprises - 67 universities and research centres - 87 training institutions, Public and private bodies have so far cooperated for their implementation on a multi-level basis with the aim of providing genuine opportunities for entering and succeeding in the labour market, enhancing the effectiveness of lifelong learning and career guidance and representing an effective and parallel path to the academic tertiary education. Moreover, according to the recent reform of the apprenticeship contract, with the introduction of a “High Apprenticeship”, participants to ITS courses will also have the opportunity to obtain a higher education qualification. ITS courses are meant for young students and adults holding an upper-secondary school diploma who, employed or unemployed, wish to specialise for a quick transition to or requalification in the labour market. The courses lead to a Diploma of High Level Technician – corresponding to the Level V of the EQF with reference to the technological areas considered as priorities by the national guidelines of economic planning: Energy Efficiency, New technologies of life, New technologies for Made in Italy, Innovative technologies for culture, Information and Communication technologies. In Umbria, “FONDAZIONE ITS NUOVE TECNOLOGIE PER IL MADE IN ITALY” became operational in 2011.
1. Territorial scope The territorial scope of ITS Umbria’s courses is on a national level. Students from all of Italy can apply and potentially attend the courses. It must be said, however, that given the partnership with local government, higher level schools and enterprises, student attendance has been mainly on a local regional level. Indeed, given the current economic crisis, students are more inclined to save money by looking for closer-to-home education centers. This is also true for enterprises
looking to employ personnel. The companies which cooperate with ITS are more inclined to look for local candidates as these are in turn less inclined to look for another job after a few years.
2. Area of application In 2011, “FONDAZIONE ITS NUOVE TECNOLOGIE PER IL MADE IN ITALY” became first operational. with the course “Tecnico superiore per l’automazione ed i sistemi meccatronici” (Higher technical course in automation and mechatronic systems) that lasts 2 years and with a new course beginning every year. In 2013, another 2 courses began: • “Tecnico superiore per l’innovazione e la qualità delle abitazioni” (Higher technical course in innovation and building construction quality) • “Tecnico superiore responsabile delle produzioni e delle trasformazioni agrarie” (HIgher technical course for Person in charge of productionand agricultural transformations). Both these courses last 2 years, with a new course will beginning every year. Thus, each course forsees 2 year attendance for 20 participants with: • 500 hours of in class theory • 500 hours of on-the-job activities • 800 hours of compulsory traineeship
3. Type of BP ITS is wholly training based. Courses are aimed at young students and adults holding an upper-secondary school diploma who, whether already employed or unemployed, wish to specialise for a quick transition to or requalification in the labour market. The courses lead to a Diploma of High Level Technician – corresponding to the Level V of the EQF - with reference to the technological areas considered as priorities by the national guidelines of economic planning: Energy Efficiency, New technologies of life, New technologies for Made in Italy, Innovative technologies for culture, Information and Communication technologies.
4. Stakeholders involved ITS Umbria is by Italian law a “Fondazione” (Foundation). This provision’s main implication, among others, is that all assets devolved by stakeholders to this particular entity must be used and aimed towards a specific goal (cfr. paragraph 4). ITS Umbria Foundation stakeholders are: • the Province of Perugia. A local government entity on a provincial level with responsibility, in Italy, for policies aimed at local secondary schools;
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SFCU – Sistemi Formativi Confindustria Umbria. A training agency founded in 2001 which adheres to Confindustria (Italy’s leading industrialists union), enjoys registered recognition by the Region of Umbria and by the Province of Perugia for providing EU funded training and already provides a very broad range of training courses for company staff of all levels; Scuola Umbra di Amministrazione Pubblica “Villa Umbra” (Public Administration School of Umbria “Villa Umbria”); CESF, Centro Edile Sicurezza e Formazione (Centre for Security and Training in Building Construction); Confindustria Umbria - the central Italian region of Umbria’s branch of Italy’s leading industrialists’ union, thus guaranteeing ITS a direct link with all main enterprises in the region; Confagricoltura Umbria - the central Italian region of Umbria’s branch of one of Italy’s leading agricultural entrepreneurs’ union, thus guaranteeing ITS a direct link with all main enterprises in the region in the agricultural mechanics field as well as with companies developing advanced agricultural tools and technology; ANCE Umbria - - the central Italian region of Umbria’s branch of Italy’s leading building contractors union. CNA, the central Italian region of Umbria’s branch of one of Italy’s leading arts and crafts small entrepreneurs’ union, thus guaranteeing ITS a direct link with small handicrafts companies looking to grow and or survive on today’s markets; Università degli Studi di Perugia – founded in 1307 it is one of the world’s oldest universities. Direct links with the University ensure quality professorship to ITS courses; Polo Innovazione Meccanica Avanzata e Meccatronica Umbro (Cluster for Innovation in Advanced Mechanics and Mechatronics in Umbria), which groups over 100 companies in Umbria; Istituto Tecnico Industriale Statale “A. Volta” Perugia – a technical secondary school in Perugia (the regional capital city of Umbria), where many future ITS students come from; Surveyor College of the Province of Perugia Umbria Export – a private enterprise specialised in maintaining and promoting international contacts and liasons; Angelantoni Industrie Ltd – a private enterprise in the aeronautics, automotive, biomedical, mechanics and renewable energy industries; Bimal Llc – a private enterprise in the mechanics industry; Brufani Mario & Co. - a private enterprise in the mechanics industry; CML Llc – a private enterprise in the mechanics industry;
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Co.Me.Ar. Llc – a private enterprise in the mechanics industry; FOM Tacconi Ltd - a private enterprise in the automotive industry; Gustinelli Ltd Partnership – a private enterprise in the mechanics industry; Mecanotecnica Umbra Ltd – a private enterprise in the mechanics industry; Metalmeccanica Tiberina Llc – a private enterprise in the automotive industry; Officine Meccaniche Aeronautiche Spa – a private enterprise in the aeronautics industry; Renzacci Ltd – a private enterprise in the mechanics industry; ITI “Da Vinci” Foligno, a technical secondary school in the city of Foligno; ITI “Franchetti Salviani” Città di Castello, a technical secondary school in the city of Città di Castello; ITIS “Maria Letizia Cassata” Gubbio, a technical secondary school in the city of Gubbio; IIS “Marco Polo” Assisi, a technical secondary school in the city of Assisi; ITET “Capitini”, “Vittorio Emanuele II” and “A. di Cambio”, three technical secondary schools in the city of Perugia; IIS “Ciuffelli Einaudi” Todi, a technical secondary school in the city of Todi; ISISS “R. Casimiri” Gualdo Tadoni, a technical secondary school in the city of Gualdo Tadino; Istituto Omnicomprensivo “Rosselli-Rasetti” Castiglione del Lago, a technical secondary school in the city of Castiglione del Lago; IISTP Spoleto, a technical secondary school in the city of Spoleto; IIS “L. Allievi” and “A. da San Gallo” Terni, two technical secondary schools in the city of Terni.
5. Results obtained The first two-year course had 25 enrolled students. Of these 22 of these successfully finished the course and obtained their Higher Level Technician Diploma (the other three left because they found other employment during the course). Of the above 22, 17 are currently working, 1 has enrolled in university, another four are being assisted by ITS staff in job scouting. On the basis of satisfaction on the part of local industries, another two courses (cfr. above) have been introduced. So, from 25 initial students, ITS Umbria currently caters training to: • 25 students in their second year Higher technical course in automation and mechatronic systems (2012-2014); • 20 students in first year Higher technical course in automation and mechatronic systems (2013-2015); • 20 students in first year Higher technical course in innovation and building construction quality (2013-2015);
20 students in first year Higher technical course for Person in charge of productionand agricultural transformations (2013-2015). For a total of 85 students. Given the above success, a fourth course is under development in biotechnology. Furthermore, the training received (as has been confirmed by local industries) guarantees not only students better chances of employment but also greater career progression opportunites.
6. SWOT analysis STRENGTHS • •
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Strong public-private partnership. • Courses are developed and tailor-made to profile requirements expressed by local companies. This allows for higher employment success rate once students finish the course. Direct links with all secondary technical schools in the region. • Extremely high success rate with regards to post course employment. The many hours dedicated to practical activities and to company stages allow students to always work with the latest technology, thus overcoming the heretofore common problem where students train on obsolete school • laboratory equipment.
The course lasts two years for a High Level Technician Diploma whereas three years at university level leads to a junior engineering degree. There are greater employment opportunities with a High Level Technician Diploma but it remains nonetheless less attractive; While ITS Umbria courses enjoy widespread participation, the entity and type of courses offered are still relatively new and therefore continue to require a great deal of promotion amongst students and their families, especially with regards to successful employment rate. Relies on public co-funding.
The close cooperation with companies where much of the course program is tailored to their profile requirements and expert company staff contribute to course teachings has enjoyed much success with local companies. This has given way to widespread interest amongst companies in the region with more and more companies looking to enter the partnership, host stages with a view to then employing their stageurs.
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The courses and their potential require greater promotion amongst schools and families alike. Technical schools are not always ready to understand/admit the need for further training following their own diploma. Students are not always prepared to undergo another lengthy two year training period as opposed to: enrolling in university; immediately looking for a job. The success of the courses is largely based on the high rate of successful employment of its graduates. Should this rate for any reason drop so would enrollment to the school
Conclusion Among the main features of ITS courses are their strong links with the labour market. These are created through the promotion of the didactic laboratory as a research and learning environment, a compulsory traineeship covering 30% of the total course hours (around 1 800-2 000 hours) which can also be carried out abroad, the recruitment of 50% of the teachers and trainers directly from the labour market itself. At the end of the courses promoted by the higher technical institutes, a final certification is obtained following a final assessment of the competences acquired carried out by examination boards made up of representatives of the training provider (e.g. school, university, vocational training) and experts coming from the labour market. With the aim of sharing the technical and scientific culture and to systematically support the economic development and competitiveness of the Italian production system, ITS courses are implemented with a strong focus on local needs, individualised training routes and the promotion of the participation of employed adults. At the same time, they respond to the European certification standards. Improving the equity and efficiency of EU education and training system is essential to increase employability, reduce inequalities and improve the adaptability of young people and adults through upgraded skills allowing them to match the requirements of the new jobs available on the labour market. In this sense, the implementation of higher technical institutes and their focus on technical and vocational education as an engine of development of the country, represents a strong tool for facing the challenges of globalisation and technological change.
Informal Economy BULGARIA Introduction The term “informal economy” refers to all economic activities by workers and economic units that are – in law or in practice – not covered or insufficiently covered by formal arrangements and are not included in the law, which means that they are operating outside the formal reach of the law.
Many diverse enterprises operate outside the formal economy and there is significant variation in the composition of the informal economy between countries and regions and within individual countries. Similarly, people work in the informal economy for a wide variety of reasons, either through choice or because they are forced to do so. Therefore, informality means different things to different people and in different development contexts. People and businesses may stay in the informal economy only transitionally, or for an extended time. Informal economy enterprises may be efficient or inefficient and entrepreneurs may be well-educated or poorly educated. Much depends on individual circumstances and government policies and their implementation at local levels. There are many aspects of the informal economy that policy makers and development agencies are keen to formalize or, to put it another way, to move into ‘the economic and social mainstream’. Main areas where formalization is promoted include: employment policies; basic education and vocational training; occupational safety and health; social protection; access to critical resources; dialogue and representation. In effect, efforts to formalize the informal economy often involve the coming together of multiple forms of ‘best practice’; best practice in microfinance, in formalizing informal training (including best practice in skills recognition), in reforming formal skills training for the informal economy, in formalizing informal trade and community associations, in formalizing informal social protection, in formalizing land rights and so on. The BP aims at limiting and preventing the informal economy in Bulgaria, as well as in the pilot sectors mechanical engineering, electrical engineering, information technology, infrastructure construction, light industry, perfumery and cosmetics, dairying, tourism, non-bank financial services shipbuilding and repair, furniture, agriculture, fisheries and aquaculture and services of general interest (postal services, healthcare and water and sewerage system) and also creating public intolerance towards all its forms and manifestations. The implementation of the BP was able to establish a new process that can develop a clear, consistent plan for promoting formalization in order to improve business outcomes, public health and safety, while minimizing corruption, preventing situations of social esclusion.
1. Territorial Scope The BP has a large territorial scope, operating at local, regional and national level, with particular reference to those areas of the country more undeveloped and where situations of informal economy are stronger respect other territories.
2. Area of aplication The area of application of the best practice is the training even if its activities and its outcomes involves other important and strategic area that can be identified in policy for the sustainable development of local economies, business development and improving of knowledge and skills of the workers, with particular attention to those ones that are more in risk situation or social exclusion. The BP intends to achieve its goals trough an implementation of a complex training programme that aims to improve and to raise knowledge and awareness about formal economy in many different kinds of stakeholders.
3. Type of BP Amongst its main goals is the development of a system for measuring the risk of informal economy practices, raise awareness and form key skills of wide range of stakeholders and to contribute towards provoking public intolerance to any form of informal economy. The main elements and factors that characterize the BP and define its innovative values, are: a. Establishment of National Centre for Restriction and Prevention of the Informal Economy Conducting systematic strategic actions for diagnosis and prevention of the informal economy with national coverage; Ensuring sustainability and consistency of the project results through the establishment of a permanent structure for restriction and prevention of informal economy. b. Collecting, processing and analysis of secondary information Collecting, processing and analysis of secondary information necessary to detect the manifestations of the informal economy in Bulgaria and in the European Union, including best practices models in the European Union and in the world c. Carrying out intra-company and branch audits Providing primary information through the use of qualitative research methods for detecting the effects of the informal economy manifestations over the activities of specific businesses and pilot branches and establishing benchmarks for key indicators that can be later incorporated in composite index d. Collecting, processing and analysis of primary information Collecting, processing and analysis of primary information necessary to detect the manifestations of the informal economy, as well as measuring the quantitative characteristics of the phenomenon and capturing the situation in the country, including within those designated as pilot branches
e. Preparation of analytical documents to guide the systematic strategic actions in combating informal economy On the basis of the collected, processed and analyzed primary and secondary information a series of analytical documents to be prepared which are intended to guide the systematic strategic actions in combating the informal economy f. Presentation of series of analytical documents to guide the systematic strategic actions in combating the informal economy Verification of the series analytical documents by wide public consultations in order to improve their efficiency and to achieve public consensus on the conclusions made and on the adequate actions necessary g. Development of a Strategic Plan for restriction and prevention of the informal economy The adoption of systematic, strategically linked measures for restriction and prevention of the informal economy to be ensured through the development and adoption of a strategic plan h. Development and implementation of information system The development and implementation of information system has four objectives i. Planning and implementation of training to reduce the informal economy Restriction and prevention of the informal economy by providing training to target groups j. Implementation of national and public awareness campaigns k. Promotion of public awareness and formation of public intolerance to all forms of manifestation of the informal economy through the implementation of 1 national and 4 regional public awareness campaigns l. Preparation, consultation and presentation of proposals for changes in regulations Restriction and prevention of the informal economy by creating regulatory barriers to all forms of its manifestation â€˘ Formulation and implementation of Strategy for development and operation of the National Centre Ensuring full compliance of the activities of the National Centre with the detected challenges, as well as achieving unity and synergy of all actions, performed in the implementation of the Strategic Plan for restriction and prevention of the informal economy
Studies for measuring the effect of the measures taken with the implementation of the project on the informal economy manifestations On the basis of measuring the impact of the informal economy manifestations on specific businesses and pilot branches to assess the effectiveness of actions taken to implement the Strategic Plan and propose future actions to increase efficiency and effectiveness Provision of visualization and publicity of the project Providing visualization and publicity of the project in accordance with national and European regulations Evaluation of the satisfaction of the trainees Displaying the guidelines for refinement of methods and training programs for the effective formation of key competencies for reduction and prevention of informal economy Preparation of a proposal for Negotiation system of income and wages of labor aiming the reduction and prevention of informal economy Development of the industrial relationships for a more flexible and effective labour market by studying the impact of the system of minimum insurance thresholds on the informal economy and on this basis – preparation of a proposal for a Negotiation system of incomes and wages of labor aiming at the reduction and prevention of informal economy.
4. Stakeholdres involved The BP, with development of a comprehensive strategy and actions based on the real needs expressed by each specific context, was able to involve many different kind of stakeholders, as well as strong social and political authorities. The identification and the involvement in the process of relevant stakeholders and an “optimal” level of inclusion that derives directly from the specific purpose and goals of the partnership. The stakeholders actively involved are mainly : • Enterprises; • Business and entrepreneurial Associations; • Chambers of Commerce; • Municipalities; • Local Public Agencies and authorities; • Training companies; • Different kind of non profit organizations (mostly involved on the process for implementing civil society)
• Workers and workers associations; The effective involvement and participation of all these stakeholders can guarantee the development of the process and the achievement of the goals settled up, with constant networking activities with the aim to improve and to enlarge other typologies of stakeholders.
5. Results obtained The BP presents many innovative and new different factors and elements to face and to combats different and problematic situations that are consequence of informal economy and that are more stressed from the recent economic crisis. In this last years the implementation of the BP could achieve very important results in many different geographical areas of the country, improving a new and positive process not only to solve difficult economic and social situation but even strongly preventing many different potential crisis situations, with particular reference to all those topics and fields related to the informal economy, that can and could appear in different feeble economic sectors or specific areas. The main results obtained by the implementation of the BP are: • Complex analytical report intended to guide the systematic strategic actions in combating the informal economy; • Elaboration of methodology for diagnosis, restriction and prevention of the informal economy; • Work out of a module for structured accumulation of regular incoming information for risk assessment of the existence of informal economy. • Definition of training needs, definition of preliminary scope and topics of training, definition of target groups; • Developed Communication Strategy of the national and the four regional public awareness campaigns; • Outlined proposal for changes in regulations and schedule for discussions to be conducted with stakeholders for the improvement of the proposal; • Re-design and improvement of the activities of the National Centre and development of a Concept for its operation; • Proposal for the composition of the composite index for assessing the risk of informal economy: description, motivation, calculation methodology, interpretation of the meaning, algorithm to deal with different values, discussed with experts of the project (1 brainstorming) as well as with social partners and representatives of public authorities (2 round tables); • Description of the information flows, including expert ToR, on the basis of which the tender documentation to be prepared;
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Tender specification and tender documentation for selection of contractor for the information system, selection of contractor, contracted performer, developed system; Database completed, intended to serve the index calculation for diagnosis of the informal economy; System, created for annual completion of the database and two completions implemented; Rhythmic and sustainable system for annual monitoring of progress in the prevention of the informal economy created. Methodological guidelines and training materials for conducting trainings for target groups were prepared and elaborated according the conclusions about the satisfaction of the trainees; 5500 persons trained; Evaluation of the satisfaction of the trainees and guidelines for specifyingthe methods and training programs; Updated Training guide.
6. SWOT analysis The swot analysis of the Restriction and Prevention of Informal economy BP, was based on a deep and detailed analysis of the implemented process, the results obtained and with an evaluation of several aspects and factors, including feedbacks, that come out during the period of its implementation. It was so possible to better and clear define the strengthens and the weakness of the BP.
During the implementation process, the Organization evaluate and exams the intermediate results and potential specific problematic, difficulties and barriers encountered during the implementation, in order to define, insert and improve the planning of services and activities to delivery, in order to better respond to specific needs expressed by a specific economic sector or geographical area; A periodical evaluation is carry out in order to evaluate and define the effectiveness of the interventions adopted and implemented; The constant integration and implementation of new services and activities to enlarge the offer of opportunities and inventions to face and to solve specific problematic situations;
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Lack of financial resources to support the implementation of the different initiatives and actions; Lack of financial resources to support the start up of new business activities; Missing of measures and financial interventions to support the enterprises to hire workers or to go out from informal economy activities; Lack of awareness and culture about the negative consequences of the informal economy; To constant improve and to enlarge the networks with many different kind of stakeholders; Necessity to constant improve the partnerships and cooperation with other public and private organizations to spread and to improve the actions against the informal economy;
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The involvement of a large categories • of different stakeholders (workers, enterprises, citizens, municipalities, business associations, chambers of commerce, local public authorities and many others) in the implementation of the process of the BP and in the delivery of the activities and services promoted; A large and various networking developed and constantly implemented that involve private and public actors to contribute the right and best implementation of the BP’s services and activities; Dissemination of knowledge and awareness trough different stakeholders (public and private) about the importance and relevance to make formal economy; Creation of the base and backgrounds for the development and implementation of sustainable and formal business activities; Ensuring of actions, interventions and system to guarantee safe and health employment for the workers; Encouraging formal economy and business and working behaviour closer to the principle settled up by the law; Promotion of the awareness of the target groups and key knowledge and skills creation with regard to the restriction and prevention of the informal economy Improvement of the socio - economic environment as a result of the restriction and prevention of the informal economy, including by improving working conditions and competitiveness as a result of the “lightening” of the economy. Providing of services and assistance to favorite the matching between workers and enterprises to improve the work and social inclusion; Specific technical support for those workers that want to start up their own business activities. Limiting and preventing the informal economy by improving the industrial relationships by preparing a proposal for a Negotiation system of incomes and wages of labor that aims at limiting and preventing the informal economy.
Lack of coordination with public authorities for the implementation of common strategy and actions against the informal economy.
Conclusion The informal economy has different consequences in different economic structures and on the civil society community. One of the most relevant consequences, that with the crises has a stronger impact on the community, is related to the employment of irregular workers that are not covered by any social security scheme. This results in an unhealthy working environment and distortion in the functioning of the labour market. As employees are not registered under a social security scheme and necessary occupational health measures cannot be taken at a workplace, risk of occupational accident or disease increase. Besides this results in an unhealthy society as individuals cannot access to necessary heath aid. This, in return, increases more spending in healthcare and requires the State to take care of those individuals, who are not registered under any social security scheme, or elderly and needy persons. The Restriction and Prevention of Informal economy BP presents many different and interesting aspects that show how this BP can anticipate the possibility of disaster and plan ahead to manage potentially catastrophic situations or avoid them. The training modules and the other services and activities provided by the BP can support the development of a comprehensive crisis management plan and develop good practices even under normal circumstances for promoting the overall development of the community. The BP is a concrete and good example not only for actions to prevent a crisis situation that negativimpacts the community, but also to raise awareness in society for damage to the informal economy with the objective of reducing the size of the informal economy. In this way, the BP, based on the trends and the challenges revealed with regard to the manifestations of the informal economy, can develop and give way to planning and implementation of systematic strategic actions that are to be taken for its restriction and prevention.
Duales Ausbilduns system Germany
Introduction The Dual Training System is a very diff use training scheme in Germany. It can be considered a specific feature of the German education system, since it represents the most diff used form of vocational training and trains more than the half of German students. This system receives international acclaim. In fact, it is practiced in numerous other countries. The concept â€œdualâ€? contained in the name Dual Training System (Duale Ausbildung) denotes the attempt of creating an interaction and a cooperation of two different aspects of the vocational training, which are praxis and theory. Nowadays it is not always possible to clearly separate these two elements. The roots of this stay in the technical development, that causes the impossibility to provide the theoretical knowledge about modern machineries only if not directly using them, that is in the firms. That is the reason why the vocational training takes place in training companies, whereas theory is learnt in a vocational training school. In this process, both the two fields complete each other: everything is learned in the school can be applied in companies and the reverse is also true. The dual training is everywhere considered a very efficient type of training, since it allows practical experience from the beginning which means direct contact with the world of work. It results first of all in a better awareness of what it is and, as a consequence, a better efficiency once students begin working. As already mentioned, as one part of the dual education course, students are trained in a company for four days a week on average, where they acquire practical knowledge and skills. Skills and theory taught are strictly regulated and defined by national standards and the company is responsible for ensuring that students get the standard quantity and quality of training set down in the training descriptions for each trade. Currently, the number of training occupation amounts to 349 and covers many different fields, such as industry, commerce, skilled trade, office and administration, health and agriculture with different degrees of specialization and types of skills required (methodical, social, etc). Training is centered on vocational competence and there are training occupations
for all sectors of the economy and administration, which are continuously updated, since new occupations are created as required in order to keep up with actual needs. This training may be complemented by more practical lessons at workshops run by the guilds and chamber of commerce, in order to compensate for the bias caused by training at only one company. These extra courses usually take three or four weeks a year. The time spent at a vocational school is approximately 60 days a year, in blocks of one or two weeks at a time spread out over the year. The other part of the dual education course involves lessons at a vocational school one day a week on average, that, differently from the vocational experience, are not uniform but different in every region, since it is regulated directly by the education authorities. The conference of L채nder Ministers of Education (KMK) decides on common approaches, inter alia regarding national recognition of types of school, standards and final qualifications. Lessons taught comprehend both general lessons and trade-specific theory. The aim is to provide pupils also with core competences, such as social competences, which can be very useful if exploited on the workplace. The main subjects taught can be divided in three groups: -
General lessons, such as sport, German, social and community studies; Practical teaching, such as laboratory courses; Professional theory, such as accounting and technical drawings.
The percentage of each group is decided by the government department of every federal region but in any case teaching follows an activity-based approach in fields of learning. A finale evidence of skills is provided by examinations. For the most trades, the first examination takes place about half-way through the vocational training and is only to test how well the student is going so far: the marks do not go towards the final exam. Both exams are organized by the small business trade group and the chambers of commerce and industry. Vocational schools can be distinguished in terms of disciplines taught: there are for instance technical, industrial, commercial, agricultural vocational schools or for domestic help, for social assistance, etc. and they are about 2000 in Germany. There are no minimum requirements for the conclusion of a training contract under the dual system as long as the requirement of full-time compulsory education is met.
The schooling background of trainees therefore varies. Most of them (43%) have acquired an intermediate school leaving certificate, about 4% of the trainees have no school leaving certificate whatsoever, while 21% have even acquired higher education entrance qualifications.
World DataBank, World Development Indicators (Secondary education, vocational pupils in Germany)
1. Territorial Scope The dual system is spreading quite rapidly in always more numerous countries, notably Hungary, Bosnia Herzegovina, Croatia, Serbia, Slovenia, Macedonia, Montenegro and Switzerland, as well as Denmark, the Netherlands and France, and for some years now in China and other countries in the Asian continent. Also in Europe many countries are trying to introduce it: on the 22nd December 2012 also Italy, Spain, Greece, Portugal, Slovakia and Latvia signed ten points for the promotion of practical training in their school systems. In many European Countries, the Vocational Education and Training System (VET) plays a marginal role and is largely school-based, with only 4% of those in vocational upper-secondary education in Spain combining school- and work-based training, in sharp contrast with the 74% share in Germany, where dual VET is most prominent. (http://ftp.iza.org/dp7110.pdf ) On 31 December, 2011, 1,460,658 persons nationwide were reported as trainees in dual vocational training courses pursuant to Vocational Training Act (BBiG) and/or Crafts and Trades Regulation Code (HwO). The vocational training is part of the education system and for this reason it is subject to the specific educational traditions with all the differences among the different systems. The Dual training system is normally applied just in countries where the economy is various and the labor market requires skilled and highly specialized workers. In fact, this specialization can be acquired by means of the Dual System, thanks to the useful combination of a practical and theoretical preparation. Contrary to vocational training in enterprise, which can be trace back to the medieval craft education coordinated by guilds, the emergence of schools has to be settled much later. In particular, the religious and commercial Sunday schools of the seventeenth and eighteenth centuries can be considered the roots of the training schools of the nineteenth century. Starting from the 20s of the last century, the apprenticeship began to be practiced not only for the handicraft, but also in the industry. However, the concept of dual system was explicitly shaped just in the year 1956 through the German Chambers of Industry and Commerce Act and in the 1964 with the appraisals about the vocational educational and school system („Gutachten über das berufl iche Ausbildungs-und Schulwesen“) by the German Committee for the Education and Training. Since the adoption of the Vocational Training Act in 1969 (updated in the year 2005),
it was the federal region that defined the legal basis for jurisdiction, sanctions and contents and these issues have been treated differently in the various sectors of the economy. Starting from that moment, vocational training in the different economic sectors (industry, crafts ...) is governed in a uniform way, although there are obviously differences in contents. Issues like responsibilities, access conditions and contract terms, responsibilities of enterprises and vocational schools and the examination guidelines are in this way uniformly regulated, whereas administration, as already mentioned, still have the possibility to decide about the part of education that takes place in schools.
2. Area of Application The “duale Ausbildung” focuses on one main area, which is training. In fact, Germany aims to provide innovative and competitive solutions for unemployment issues and therefore tries to offer solutions at an educational level as well. The combination of theory and practice is considered nowadays the better form of preparation for the professional life and this is demonstrated by the low unemployment rate in Germany. By means of the Dual Training System, it has been possible to combine education with professional experience and therefore to anticipate the insertion of pupils in the world of work and promote their access to employment with good results in the overall economic performances.
3. Type of Best Practice The goal of the “Duale Ausbildung” is the economic development in Germany, in this specific case in the form of the improvement in the education field. The system aims to combine theory with practice in order to improve the relationships between companies and future employees, therefore subsequently helping the economy. The “Duale Ausbildung” allows companies to assess the strengths of hypothetical future employees and plan their possible prospective integration. Conversely, the “Duale Ausbildung” aims to provide the students with interesting eventual career options.
4. Stakeholders Involved The organization of dual training requires a complex but clear division of responsibilities. The most important developments in dual training are discussed jointly by the stakeholders (such as Ministries, Employer’s associations, Trade Unions, Chambers). Responsibilities are shared between public and private sector: stakeholders jointly develop qualification profiles and training contents and schedules. Results on which a consensus can be achieved are put into practice by all stakeholders in their respective spheres of competence. Action by all stakeholders
is governed by statutory federal framework legislation, in particular the Vocational Training Act (BBiG). The scope of this best practice is to create a convergence of educational and working contexts. Consequently, the stakeholders involved do belong to both branches, including: The Federal Government is responsible for designing the content of training for the occupations it has recognized unless training is entirely school-based. The nationally binding recognition of the training occupations ensures that the basic principles agreed with the industry and the Länder are taken into account and that training for a recognized occupation is only provided in accordance with the training regulations adopted by the Federal Government. The Federal Government’s responsibilities are not limited to implementing what was jointly agreed: it also takes measures to promote dual training. These measures include special funding programs which aim, for example, at creating additional training places in less favoured regions. The Federal Government provides funding for special research projects to ensure the constant updating of vocational training. The objectives of vocational training research are in particular to establish a basis for vocational training, monitor national and international developments, identify training requirements in terms of goals, content, structures and methods, and test the developed models under practical conditions. The Länder are fully and solely responsible for school education. In dual training this means that – after coordination between the Länder and with the other stakeholders in dual training – each Land drafts the curricula for instruction at parttime vocational school for the training occupations in question. Furthermore, the Länder supervise the activities of the chambers. The proposal submitted by the Industry (employers and unions) for the development or revision or training regulations are taken up by the Federal Government if they have been agreed between employers and unions. Without the involvement of the Federal Government, the social partners agree on further details of vocational training, particularly the amount of the allowance paid to trainees, within the framework of free collective bargaining. Some collective agreements also include provisions concerning such points as continued employment of training graduates under a limited contract. As self-governing bodies of Industry (chambers), the chambers have been assigned public tasks in dual training (competent bodies). These include counseling and monitoring functions with regard to the individual training contracts. Training advisers of the chambers verify the aptitude of companies and instructors for providing
training and advise both companies and trainees. They receive the training contracts and check and register them. The chambers take care of the overall organization of examinations by fixing dates and setting contracts and check and register them. The chambers take care of the overall organization of examinations by fixing dates and setting up examination boards which administer the examinations. Furthermore, the chambers issue the certificates which are awarded to successful candidates. The examination boards are composed of representatives of employers, employees and vocational schools. The chamber sets up a vocational training board which must be consulted in important matters of vocational training. It is composed of equal numbers of representatives of companies, unions and â€“ in an advisory capacity â€“ part-time vocational schools. The cooperation among companies and schools occurs nowadays in different ways. For example, teachers of vocational schools complete different practical internships in companies and vocational schools offer seminars for trainers with the aim of adapting and aligning the leveling of knowledge and information transmitted and creating the ideal situation for an efficient collaboration.
As regards the financing of dual training, costs are boowed by companies and by the public sector. Net costs borne by the companies, the costs amount to € 5,6 billion, whereas the public sector bears costs for the amount of € 2,9 billion each year. In addition, federal funds and contributions from the Federal Employment Agency are provided to promote vocational training, for example, via funding of structural programs or individual training support (source: Data Report supplementing the Report on Vocational Education and Training for the Year 2010).
The best practice is regulated by the Vocational Training Act (BBiG), which is the Federal Government’s legal framework for all provisions governing initial and continuing vocational training. Training in the company is also governed by labour law provisions such as the German Civil Code (BGB), Protection of Young Workers Act (JASchG), Protection of Working Mothers Act (MSchG).
5. Results Obtained By means of the Dual System, the administration aims at giving pupils the right experience in order to face the entrance in the world of work being wellequipped. Thanks to the right background, they will have the chance to work better and produce more, constituting skilled workforce for the company. High quality vocational trainings and modern, tailored and practical apprenticeships represent a secure method for ensuring productivity, competitiveness and high employment rates, which are the main requirements for economic prosperity. The majority of general school leavers embark on training in the dual system.
They accounted for 68% in 2008. This corresponds to a total number of approximately 1,6 million trainees. About 600.000 training contracts are concluded each year in 349 different training occupations (source: Data Report supplementing the Report on Vocational Education and Training for the Year 2010) and the number of trainees who took part in the project demonstrates its successful outcome. Unemployment is a serious problem in Europe: unemployment average of 1524 year olds is esteemed around 23%, whereas in Germany it reaches only 8%. The reason for this has not to be found only in the lower rate of young and in the strong economy, but also and most of all in the educational system. In fact, long-term studies have demonstrated that people who did a practical vocational training are more successful on the labor market that students who studied and learned only in at school. The unemployment rate of training graduates in the year 2001 was 14%, whereas just one year later it dropped to half, reaching 7%. Successful graduates of dual training have good chances of finding gainful employment after passing their final examinations. Many trainees are offered an unlimited work contract by their own training company. Some trainees conclude a work contract with another company before taking their final examination or they embark on further training. Some collective agreements stipulate that a limited work contract or at least six monthsâ€™ duration must be concluded with regarding graduates. In the 2011 reporting year, 476,580 trainees in the dual system passed their final examinations. About 95% of them were successfully completing dual training for the first time. That meant a training graduation rate of 46.5% for the 2011 reporting year. Between 2000 and 2009, the conversion rate of apprenticeship contracts into regular employment varied between 50% and 60%. 138,000 people were registered as unemployed after completing in-company or extracompany training in 2011. In relation to the total number of graduates of a dual education and training programme (477,000 persons) this yields an unemployment rate of 28.9%. This is a significant decrease of 5 percentage points compared to the previous year (33.9%). People without initial vocational education and training represent 40.7% of low-wage earners. People with dual vocational education and training are slightly above the overall average at the medium skills level (16.9%) at 17.6%. The chance of earning a gross hourly wage above the low wage threshold is three times higher for persons with dual vocational education and training than for those without formal qualifications.
According to the results of the 2012 Adult Education Survey (AES) almost half of the 18 to 64 year old employed population in Germany (49%) had taken continuing education and training courses in the 12 months preceding the interview.
6. SWOT Analysis STRENGTHS • • • • • • • • •
Benefits for both pupils and companies in relation to a future possible employment; High motivation of the student and correlation between tasks and pupil’s abilities; Learning by co-workers’ knowledge about hard and soft skill; Personal development due to the confrontation with a first real-job experience; The student earns money from the beginning; Transfer of professional ability, knowledge and skills; Avoiding endangers thanks to vocational experience; Positive progress for the labor market, which acquires young specialized workers; Provision of a recognized certificate, practical orientation and the payment of an allowance.
• • • •
Huge amount of regulation; Expensive trainings; Impossibility to train apprentices in the most specialized areas; Lack of involvement of the service sector in the project.
OPPORTUNITIES • • • •
Implementation of a better vocational • training; Help fighting the shortage of skilled professionals and decrease the young’s unemployment rate; Possibility for the Dual Training System’s students to compete for attractive career paths; Standardization of the skills acquired by apprentices.
Decrease of the number of people who decide to pursue the following studies.
Conclusion Germany’s VET-System (=vocational education and training) is a success-story, because it combines the education system with the first labor market. This ensures or at least paves the way for the transition of young people from the education system into the first labor market. Every stakeholder receives benefit from the best practice: - companies have long-term personnel development and therefore are unaffected by fl uctuations on the labor market. They have low recruitment costs, since recruitment of external skilled labor would be more expensive and more time-consuming, and they minimize the risk of hiring the wrong person for the job, with the additional cost this would entail. Moreover, they have skilled workers supply assured and can have an infl uence on content and organization. Graduates of dual training are familiar with company processes and have worked together with company staff for several years. They are qualified for their specific job and usually show an above-average loyalty to their company. They are inserted very early into the employment market and get salaries from companies. For this reason, states have to afford lower costs for vocational training and moreover they reach a lower rate of unemployment. - young people also benefit from dual training. The certificate they are awarded attests the vocational qualifications which are recognized throughout Germany and give them a competitive advantage over graduates of non-company training programmes due to the practical orientation of dual training. Graduates therefore have good prospects on the German labour market if they want to transfer to another employer. Last but not least, the allowance trainees are paid with during dual training provides for a certain degree of independence. The best practice has been conceived to show that the “Duale Ausbildung” is an efficient model for professional qualification, in that it combines theory with practice
with the result of a better integration of the student in professional work and at the same time a more appropriate relationship between companies and future employees, with a general improvement of the economy. That is the reason why a majority of young people learn in the dual system. Being financed mainly by companies, the impact on States is very low and this is the reason why the dual system is attracting the attention of numerous European Countries, which are trying to find good solutions in order to face the current crisis. Convincing other countries of the benefits brought by this system would be useful to all of them, not only for the already mentioned benefits, strengths and opportunities for their own country, but also because it would result in an increase of skilled employees in the subsidiaries of each country abroad and, through exchange programs, maybe a useful resource for their headquarters.
Duales Lernen â€“ Germany Introduction Duales Lernen (Dual Learning) is an attempt of establishing a link between school and professional practice by combining learning with job-orientated practice and contents of the economic and working life. The main service provided by the dual learning consists of being an interface between economy and school. The principle aim of this project is helping youngsters in the transition from being high-school students to future employees. The objective is to guide them in the development of their possible interests, in order to facilitate and optimize the quality of the choice of their employment. In addition, it aims at motivating and offering better perspectives to pupils with learning difficulties or with particular interests. In order to reach this objective, it implements particular activities, such as productive learning or praxis-oriented learning groups. One possibility is to proceed with after-school activities from one to three days a week. This practical supplement in the form of workshops, professional schools, apprenticeships facilitates the students in planning a career choice. At the same time, it represents a real support for companies in finding skilled future
employees. This combination of learning and practice-oriented activities seeks to improve the economy in general by providing the students with the skills they need and it aims to solve the overall problem related to employment
Duales Lernen “Itinerary”
In the last four years, the “Duales Lernen” has introduced various job-related activities taking place in off-campus learning centers in the recently-established “Integrierte Sekundarschule” to pupils from 7 to 10 years. The “Integrierte Sekundarschule” in Berlin is a new kind of school, which introduces this integration of job-related disciplines: it prepares pupils to the world of work with practical experience offered by the Dual Learning. The “Berufswahlpass” (suitable career choice) supports this process from the beginning. During the realization of the project, each school can establish different sets of measures, plans and study guidance in the school program within a flexible timetable. They can decide which practical activities will be carried out. In this way, every school chooses autonomously the type of activities offered by the Dual Learning program and defines how to implement them. An obligatory element is the participation of pupils at least at one of the projects during every school year. Normally it is a package of measures, in which the single measures are sensibly coordinated. This is very important in order to give pupils a personal, tailored support according to their skills, commitment and learning background. A very flexible school timetable, corresponding to their own abilities, commitment and motivation, as well as their learning requirements, is a necessary condition for their individual development in the Integrierte Sekundarschule. Every pupil takes part to the dual learning system and can choose which type of activity to join. However, during their 9th and 10th school year, in case of critical situations and the risk to fail, the school itself can opt for the student’s obligatory participation in certain projects.
The core part of the project is the new subject called WAT, which means “Wirtschaft, Arbeit, Technik”, (“Economie, Work, Technology“) which is taught since 2010 in integrated schools and is oriented to the experience of the former subject “Arbeitslehre”, science of the professional work. During the lesson, vocational trainings are prepared, fairs are visited or company visits are evaluated. The offers of the dual learning include business studies, career guidance and optional subjects, which can be interdisciplinary courses as well as extracurricular activities, implemented during project or all-day operations. As already mentioned before, an important service is provided to pupils with learning difficulties: starting from the 9th grade, they can learn up to three days outside of the school in different vocational training structures. Otherwise, there would be the risk that they presumably would not succeed to obtain the degree.
1. Territorial Scope The Dual Learning is a particular project approved in Berlin, although similar forms of “Duales Studium” are practiced in the whole nation (the first forms of this principle were implemented in Baden-Württemberg). The territorial scope is a regional one. All the schools in the region are supposed to offer some of the numerous projects of the Dual Learning Program to pupils who will autonomously choose every school year at least one of those. The legal basis for the Dual Learning in the integrated schools is the Education Act and the secondary level I- Regulation made under the “Berlin Schulgesetzt, Sek I-VO Berlin - § 29 Unterrichtsgestaltung”. The new Education Act was decided by the Parliament at the beginning of the year 2010.
2. Area of Application The area of application is training: Berlin is focusing on providing innovative and competitive solutions for employment issues and therefore tries to offer solutions at an educational level as well. The general focus of the Berlin economy is best exemplified in the concern that there might not be enough job opportunities for every high-school graduate, united to the fear that at the same time the students might lack some necessary practical skills, with the result of a further problematic adaptation to the assigned workplace. Through the implementation of this best practice, it has been possible not only to teach useful practical skills that will help them in the process of integration on the workplace, but also to give a new boost to handicrafts and numerous types of works for which few potential employees show interest.
3. Type of Best Practice The Best Practice aims to show how this model could represent an efficient alternative to an only theory-based type of education. The involved parties aim at establishing a systematic integration and a strong base of working experience in the school system. They expect of Dual Learning that it will allow a notable improvement of the educational maturity of pupils who aspire to the dual system training. The same applies to the decision behavior of pupils who decide to attend a gymnasium and to undertake a university education. This integration operated by the Senatsverwaltung für Bildung, Jugend und Wissenschaft is beneficial, both for the students and for the companies. A better preparation of the students, as a result of the practical approach, means a time and resource saving for the companies at the same time. For that reason, the Dual Learning represents an efficient and time-saving alternative to the traditional theory-based type of learning, since it tries to speed up the acquisition of practical skills that positively influence the relationship between the candidate and the company, as much as the company’s productivity. The Dual Learning system represents therefore the interface between economy and school. It is a reference point for schools, Associations and companies, that wish to receive support, information and training offers for the implementation of the best practice. The main services offered are the consultancy and support provided by experts to schools and companies for the implementation of the projects proposed by the Dual Learning. Therefore relevant projects, events and workshops are offered to teachers and companies. The most important are the supervision and development of the internet portal and the drafting of editorial contributions or researches on the topic “Dual Learning”.
In Berlin, the innovative type of school â€œIntegrierte Sekundarschuleâ€? has been introduced as a place in preparation for the professional working environment. When the students are approximately thirteen years old, during the last years of school, they participate in job-related activities such as workshops, off-campus activities and apprenticeships in professional schools. The first integrated schools were instituted in the 2010/2011 school year, so that by 2013 (school year 20122013) every integrated school opened in 2010 had to have developed a plan for the particular organizational form of Duales Lernen. Starting from the year 2010, it is possible to find advice, information and contact persons in a specific website. This is an important aid to all the institutions that have to implement the projects. There are numerous other additional services aimed at supporting schools, such as student consultants. Furthermore, schools have the possibility to implicate education solutions offered by the Duales Lernen. For example, Produktiv Lernen is a particular organizational form of a project that consists a practical session spent three times per week during three months of the academic year. In order to take into account the training needs of each pupil, the places are chosen individually by pupils with the help of a pedagogue according to their personal interests and skills (e.g. joinery, fruit and vegetable shop, magazine, hospital, with Amnesty International or a television transmitter). The hosting organizations can be companies or social, cultural or political institutions. The main activities, which can be chosen by pupils, are: -
Company visits, in order to observe people at work and to have a realistic insight into the world of work; Workshop jobs; Service Learning; Working experience starting from the 7th grade, in order to learn important skills, like team work, ecological responsibility and reliability; Internships starting from the 8th grade; Collaborations with training companies, internal or external training institutions, vocational schools or universities; The possibility of creating student enterprises with the aim of boosting key competences, such as team-skills, self-responsibility and autonomy and the possibility of giving an insight into the functioning of the social market economy, a general idea about a possible interesting future job and an impulse to the entrepreneurial thinking; School laboratories, which are extracurricular educational institutions that offer pupils experience in natural science and technical fields. It is possible to collect lots of information about the world of work; Partnership models with apprentices and students.
Students have to choose every year, from the 7th to the 10th grade, which activities to join, according to their skills and motivation. It is required to choose at least one of them. However, it is the class conference or the committee of each year that decides about the participation to praxis-based offers and its duration. It is possible, at the end of the 8th year, that the class conference and the committee of each year decide, according to the skills and motivation demonstrated by the pupil, that he or she will have to attend some particular kinds of organizational forms of the dual learning (in most cases when considered to be necessary for the pupil to get the degree).
4. Stakeholders Involved The implementation of the Dual Learning creates a reliable cooperation of different social stakeholders, such as pupils, companies, young people and parents. In particular, in order to allow the realization of the project in many different places of practice, the systematic collaboration of schools with many different external partners is necessary. In fact, the integrated secondary school offers in particular the cooperation between companies and the institutions responsible for the vocational preparation of pupils and the training of work-based learning. Berlinâ€™s economy supports the dual learning by providing work experience placements in companies.
Currently, five significant partners support the “Duales Lernen” project to enable economic growth in Berlin: Berlin’s economy helps developing and realizing many locations for the practical sessions with the aim of providing the Integrierte Sekundarschule with at least one company as partner: 1. 2. 3. 4. 5.
Senatsverwaltung für Bildung, Wissenschaft und Forschung; Handwerkskammer Berlin; Industrie und Handelskammer zu Berlin; Verband freie Berufe in Berlin e.V. Vereinigung der Unternehmensverbände in Berlin und Brandenburg e.V.
5. Results Obtained The Dual Learning system has recently been developed to combat the lack of skilledworkers for the labor market. Students should be equipped already during school time with initial information and first familiarity with business issues. In the next years, the number of school leavers will be decreasing. Just in the year 2012, the number of school leavers duplicated compared to the year before. For this reason, the question is not if young people will obtain an apprenticeship training position, but rather whether the available apprenticeship training positions will have the possibility to get skilled and prepared personnel for it.
Abilities to be gained by the pupils
It has been proved that one of the most important consequences of such an experience is the conscious continuation of the studies afterwards. The reason may be seen in the gained awareness about their interests regarding their future job and the consequent motivation and commitment in order to reach this objective.
6. SWOT Analysis STRENGTHS • • • • • • • •
Easy way for the pupils to understand • which type of career they would like to choose; • Lack of knowledge of abroad people in comparison to their German competitors; Not many contextual preconditions necessary in order to implement the best practice; The central point is the best interest of the pupils and their future; Improvements of theoretical and practical knowledge; More opportunities on the labor market; Basic creation of a job-network; Possibility for the subjects learnt at school to be praxis oriented and useful for a practical use.
Important choices taken too early by pupils; Difficulties in organizing international exchanges.
OPPORTUNITIES • • • • •
Due to working experience, it is possible • that pupils with learning difficulties are motivated to pursue studies; Acquisition of important basic skills, such as punctuality, reliability and respect; Possibility to understand which are pupils’ strengths and weaknesses; Direct contact between people and companies useful for the future of both; Cooperation between companies and schools integrates teachers’ lessons.
Double burden for the pupils.
Conclusion The project has numerous strengths and it offers many opportunities when implemented. All these positive factors are independent of peculiar national and regional conditions. It is reasonable to think that the implementation of similar measures in other different countries would bring the same numerous benefits without the necessity of many adaptations. Our economy is becoming always more specialized. Consequently, companies expect the employees to learn much on the workplace, in addition to their theoretical preparation at school. However, theory should not be underestimated. In order to meet the necessary changes required by the constantly evolving actual economy, it is important to carry out modifications of the traditional school timetable and insert an important additional element, which is the practical experience and expertise. This transformation would not be positive just for the economic situation, but also for the pupils themselves. In fact, it is important to orientate their choices and give them the possibility to recognize and develop their attitudes. Their positive approach to work is an important point of departure for a brilliant performance in their role of employees. Consequently, their results are qualitatively superior, the work environment is more pleasant and in some cases, the relationships with other employees can be better. The most interesting result is the opportunity of job creation. In fact, company internships are guaranteed to schools to offer pupils vocational trainings. As already mentioned, it does not happen rarely that employers, if satisfied with the apprentices’ work, decide to keep in contact with them and to employ them with better contracts after their school certificate, with a consequent benefit not only for pupils, but also for the company and for the economy.
INTERNATIONALISATION Intra-European exchange represents some 2/3 of the total of EU countries’ total trade. The EU also remains the world’s largest player accounting for 16.4% of global imports in 2011 and for 15.4% of all exports (compared with 13.4% for China and the 10.5% for the United States). The globalization era, characterized by drastic reductions in trade barriers and transport costs, widespread communication and information, has opened a broad range of new opportunities. In the future, part of the new global demand will be generated from outside Europe, which makes the internationalisation of firms an indispensable element of policy strategies at both national and European levels. Albeit some EU SMEs remain heavily dependent on national markets as international markets represent a very difficult challenge. The most important barriers for SMEs are: • Internal barriers: the price of their own products or services and the high cost of internationalisation. • External barriers: lack of capital, lack of adequate information, lack of adequate public support and the costs of or difficulties with paperwork associated with transport.1 1
A strong interconnection lies between internationalisation, turnover, employment growth, innovation and competitiveness. Products with the highest export growth, namely motor vehicles, other transport equipment, and computer and technical equipment, are also those with the highest investment growth. Despite the crisis, European manufacturing has maintained its overall competitiveness, driven by the high quality and intensity of innovation in goods and services. After a decrease of 15.8% between 2008 and 2009, the value of exports at current prices has recovered and reached a new peak in 2013 at over € 5.800 billion, while extra-EU export of goods was 13% of EU GDP in 2012. 2 The EU strongly encourages internationalisation within SMEs through diplomatic missions and specific support measures. The overall objective of the EU’s internationalisation strategy is to achieve greater synergy between national and EU level support. 1 2
http://ec.europa.eu/enterprise/policies/sme/market-access/internationalisation/index_en.htm#study Report ms compet rep executive summary
The COSME programme aims at providing SMEs with support to facilitate business expansion in the EU Single Market as well as in markets outside the EU. International business cooperation will be fostered to reduce the differences in regulatory and business environments between the EU and its main trading partners. Accessibility of markets and integration in global value chains are the key factors of competitiveness in this context.
UMBRIA EXPORT Change in legal framework: from consortium to non-profit limited liability consortium
Introduction Umbria Export was originally founded in 1974 as a non-profit export consortium. It was promoted by Confindustria Perugia (the then provincial branch of the leading Italian association of entrepreneurs) in order to assist local companies export to and promote business on foreign markets. The export consortium was created under the provisions of Italian law which, as in most other countries where consortiums are legally recognized, only allowed the consortium to offer its services to its own members. This often constitutes the consortiums strength. It can, however, in time also become a restraint to growth and development of the consortiumâ€™s scope of activity. Nonetheless, the consortium operated with great success. In collaboration with the regional government of Umbria and with the Italian Trade Commission, missions abroad were organized across the world and prospective businessmen and women were regularly invited to visit Umbria. Promotion regarded all traditional industries of Umbria: from mechanics to food and wine, from interior decorating to tourism, from furniture to general contracting and building. In order to perform these services, Umbria Export relied on small membership quotas (the equivalent of approx. euro 1.000 per annum) from the 150 circa companies within the consortium and, moreover, public funding. Under a series of Italian legal provisions, public funding was granted to non-profit export consortiums under specific terms. Umbria Export not only benefitted from this line of public funding, it constituted its main budgetary reference. The workings of this framework was further established and consolidated un the provisions of Italian Law n. 83/1989 that allowed non-profit export consortiums to request public funding which covered expenses sustained for promotional activities. Needless to say, Italy suddenly witnessed the birth of a great number of export consortiums.
In 2012, the above Law was subject to in-depth transformation. More notably, public funding was drastically reduced and the terms of access rendered more stringent and subject to governmental approval of foreign market promotional projects submitted before rather than after implementation. Hence public funding could no longer constitute an export consortium’s main and continuous financial instrument. The above legislative change was long anticipated. Governmental spending reviews together with discussions on a need to bring the existing legal framework up todate were lengthy and widely anticipated what was to come. It should nonetheless be noted that following the introduction of the new Law, almost all pre-existing export consortiums could no longer financially operate and closed.
Umbria Export anticipated these events. Possible repercussions were closely analyzed and a strategic plan was enacted in order to: • render Umbria Export no longer dependent on public funding, which has now become an extra source of finance; • allow Umbria Export to gradually become more and more representative of its regional territory of origin; • widen the number and type of companies/institutions which compose Umbria Export; • allow Umbria Export to be potentially free to offer its services, based on some 40 years of experience in the field, not only internally within the consortium itself but to anyone in the world. Thus, following close consultation with a number of possible stakeholders, it was devised to transform the existing consortium into a non-profit limited liability consortium.
1. Territorial scope Originally, as a non-profit consortium, Umbria Export operated all over the world but could only offer its services to the companies who decided to enter the consortium. Today, Umbria Export can not only continue to operate anywhere in the world but can now also offer its services to anyone in the world. The transformation process from a classic non-profit consortium to a non-profit limited liability consortium allowed for entry of new associates such as regional industrialist and artisans unions, a regional professional training agency and three Italian banks. While the territorial scope remains very much local on a regional level (albeit much
more regionally comprehensive with regard to the original consortium), it must be said that particularly through associated banks’ networks, Umbria Export has worked on a number of occasions on a regional, national and international level. Hence, while the territorial scope of the transformation remained local to the central Italian region of Umbria, entry of new associates has pushed all of Umbria Export’s boundaries beyond both regional and national confines.
2. Area of application Umbria Export has acquired today some 40 years of experience in the field of promoting business on foreign networks. Hence, while the territorial scope of the transformation remained local to the central Italian region of Umbria, entry of new associates has pushed all of Umbria Export’s boundaries beyond both regional and national confines.
3. Type of BP Umbria Export’s main mission was and remains (even following transformation) to support companies from the central Italian region of Umbria in developing international business strategies. It has also assisted foreign entities in developing similar projects. Nonetheless, Umbria Export’s principal line of expertise is internationalization. Its services include: • International marketing consultancy; • International legal consultancy; • International operations financing consultancy; • Scouting for international commercial partners; • Financing consultancy for international projects; • Organizing Italian business missions abroad; • Organizing foreign business missions in Italy; • Organizing international business promotional activities abroad; • Organizing international business promotional activities in Italy; • Financing consultancy international cooperation projects; • Presentation and management of internationally funded projects; • Presentation and management of nationally funded projects.
4. Stakeholders involved The original Umbria Export consortium had over time reached membership of some 150 companies. Some were part of the consortium from the very beginning, others had joined out of interest of one specific project. This had caused a number of difficulties upon the consortium, as Italian law only permitted the consortium to
offer its services within its own membership. Hence, in order for a company to be involved in a specific project, it had to first join the consortium. Another necessary premise is the theme of internationalization itself, which in Italy carries great importance and has become fundamental to the survival of most micro and SMEs. Internationalization and increasing foreign market shares is a sine qua non requisite for the Italian industrial/artisan economy. Hence, the experience gained and international network created by Umbria Export in (today) 40 years of on-the-field activity was very positively valued by the stakeholders contacted during the consortium’s transformation process. The non-profit nature of the consortium – both before and after transformation – also contributed to greater attention by those contacted and subsequently involved in the new legal entity. Moreover, in its new legal form – non profit limited liability consortium (in Italian, società consortile a responabilità limitata, in short s.c.a.r.l. or scarl) – Umbria Export has company capital subdivided into shares. These were subscribed by: • 25 founding companies of the original consortium These companies represent both large and SMEs and cover almost all industrial sectors. These companies provide a perfect representation of the type of companies Umbria Export provided its services to and act as a link between past, present and future. • Confindustria Perugia Since transformation, Confindustria Perugia (a provincial entity) has merged with Confindustria Terni (another provincial entity) and has now become Confindustria Umbria (a regional entity). It is the central Italian regional branch of Umbria of Italy’s leading entrepreneurs association. Confindustria Perugia originally promoted the “old” Umbria Export. For Confindustria Umbria to be part of the “new” Umbria Export not only provides a sense of formal continuity and credibility but also – and more importantly so – provides an ever solid basis for Umbria Export’s line of work. Confindustria Umbria represents some 1,400 companies which can all be contacted by Umbria Export through Confindustria Umbria’s direct channels and lines of communication.
• Confartigianato Perugia This is one of Italy’s leading artisan’s associations. The provincial branch of Perugia asked to enter Umbria Export’s and become a shareholder after availing of its services on a number of occasions when participating at international trade fairs and on business missions abroad. Confartigianto Perugia represents some 4.000 artisans and confers an added bonus to Umbria Export as particular arts and crafts represent Umbria’s craftsmanship and can act as business promotion by itself but also for Umbria as a whole. Umbria Export can also now avail of Confartigianato Perugia’s direct lines of communication to contact its over 4.000 artisan members. • Sistemi Formativi Confindustria Umbria (SFCU) This is a specialized professional training with many years’ experience. It provides professional training in all vocational fields and has even designed and provided capacity building programs to governments of foreign developing countries with the aid of Umbria Export. Professional and on-going training are often requested by foreign partners in order to attain and subsequently mainntain modern standards of efficiency. SFCU’s experience is fundamental in being able to offer comprehensive services abroad as Umbria Export can now promote Umbria not only through its industry and tourism but also as a center where professional training can be offered. • Casse di Risparmio dell’Umbria This is Umbria’s main bank. The fact that this and two other, albeit smaller and more local, banks entered into Umbria Export’s capital is of great significance. It is a direct result of the aforementioned importance the theme of internationalization has in Italy but also bears testimony to the credibility of Umbria Export’s structure. Umbria Export represents a first and, until today, the only transformed export consortium in Italy which can boast not only one but three different banks within its shareholders. In particular, Casse di Risparmio dell’Umbria is part of Intesa SanPaolo which in turn is Italy’s second largest bank. Intesa SanPaolo is a world player with other banks and offices all over the world. Interaction with Intesa SanPaolo’s world network has greatly widened Umbria Export’s scope of activity and provided privileged information on foreign markets and potential foreign business clients for Umbrian companies participating in Umbria Export initiatives.
• Banca dell’Etruria e del Lazio This bank is present throughout central Italy and in particular in a number of emerging markets abroad. Historically, Banca dell’Etruria e del Lazio was founded in an area now famous for jewellery and gold. In particular, its specialization in gold has led this bank to develop offices and contacts in countries such as the EAU, Kazakhstan, various nations in Latin America and the USA. This network has proven particularly useful to Umbria Export in developing contacts and promoting projects within these geographical areas. • Banca Popolare di Spoleto This is a local bank within Umbria and the smallest of the three banks within Umbria Export. It has provided immense support to local economy and businesses over the years. Particular attention has always been paid to helping new businesses grow and reach new markets. Entry into the new and revised Umbria Export appeared then and has proven today a positive step for both parties concerned. The above list of stakeholders in the transformation of Umbria Export from a standard non-profit export consortium to a non-profit limited liability consortium has proved of great value. Not only to members pay an annual membership fee which permits Umbria Export basic operations, more importantly they have invested in Umbria Export by making its their partner and foreign affairs agency but by their combined presence have also greatly enhanced Umbria Export’s ability to approach foreign markets and prospective business promotion partners.
5. Results obtained Umbria Export has not only reached its 40 anniversary this year but prospects for the future have never been better. The organization’s new structure has allowed Umbria Export to reach a much wider audience, both in Italy and abroad and the number of yearly projects Umbria Export manages has grown exponentially. The transformation process has also seen Umbria Export providing consultancy services in capacity building procedures to both governmental and private entities both at home in Italy and abroad in countries such as Peru and Romania. Said process has also allowed Umbria Export to access, be part of and contribute to different types of projects where the experience it has gained over the years can prove useful. Umbria Export is now part of a number of internationally funded projects in a capacity of Lead Applicant and Partner.
Other organizations – both banks and Chambers of Commerce – now request Umbria Export’s expertise on projects which they wish to develop. Over the past three years, Umbria Export in its new and revised status, has organized: • 18 technical country presentations; • 3 business missions abroad; • 10 foreign business missions to Umbria; • 20 trade fair participations on behalf of companies from Umbria; • 6 international projects with a combined number of over 12 international Partners • systemic channels of communication with local companies which count over 6.000 queries and contacts; • initiatives in countries such as: - Albania - Argentina - Australia - Brazil - Bulgaria - Chile - China - Colombia - France - Germany - Ghana - Great Britain - India - Indonesia - Kazakhstan - Kirghizstan - Libya - Malaysia - Mexico - Pakistan - Peru - Poland - Romania - Russia - Saudi Arabia - South Africa - Spain
Tajikistan Tunisia Turkey UAE USA Vietnam
6. SWOT analysis STRENGTHS •
Umbria Export’s “new” structure • was developed in continuity with the previous one in order to take advantage of (today) some 40 years of experience in the field and the international network established and successfully maintained in said period of time. The “new” structure allows for easy, • immediate contact with some 5.500 companies and artisans in Umbria. This allows for rapid analysis and response on international requests and requirements. The presence of banks within Umbria Export’s capital and the use of their international network has proved of great value. Umbria Export now has immediate contact with banks wishing to support the local economy in its efforts to grow on foreign markets. Approaching foreign markets with the support of banks and even initially through their international offices and network is proving of immense value and return. Umbria Export often intercepts requests on capacity building and professional • training transfers from the countries it entertains international projects with. These can now be subsequently developed in partnership with Sistemi Formativi Confindustria Umbria (SFCU), its internal specialized training agency. This comprehensive response to international requests allows in turn to analyze and respond to other requests from abroad making Umbria Export a prime partner in international relations.
There was great uncertainty during the transformation process. Almost all stakeholders were interested but made their entry into Umbria Export subject to that of other stakeholders. The transformation process hence took a great amount of time, delicacy and tact. Shareholders pay an annual membership fee. This fee has recently been reduced and Umbria Export’s board has voted on further reduction. While this fee does not cover Umbria Export’s budget, it remains an important part of said budget. Reduction implies that Umbria Export must cover its running expenses (it remains, as already stated, a non-profit organization) with alternate methods of financing. This has been successfully done over the past years. However, while Umbria Export’s running costs remain low, the fact that it is a non-profit organization and that membership quotas will be gradually reduced, implies that future long term planning will become more and more difficult. Public funding, even for projectbased initiatives, is not only much less abundant than in previous years but is also becoming more and more difficult to access with ever more stringent terms of application. Access to such funds allows Umbria Export to reduce financing quotas on SMEs that participate in its initiatives. This will become continually more difficult to apply.
Integration between Umbria Export’s • existing international network and its banks’ international offices is a matter of great opportunity. It allows for Umbria Export, when approaching a particular foreign market, to take advantage of an on-the-field presence with “insider” information. This has already been partly put into effect but the opportunity it presents has room for greater implementation and could prove highly beneficial to all international projects in all stages: when approaching foreign markets, when physically there • and in follow-up operations. Following transformation, Umbria Export can now offer its services and expertise to anyone in the world. This has already happened with capacity building projects in countries such as Peru and Romania as well as participation in internationally funded projects by the EU, World Bank, IFC, etc.
The new legal structure has created a limited liability entity. Thus Umbria Export now has company shares and capital. As a non-profit consortium it does not work to make money nor does it distribute dividends to its shareholders. Should a shareholder, however, decide to leave Umbria Export, a new shareholder must immediately be found in order to allow substitution and continuity. If and where a new shareholder is not found, Umbria Export’s framework would incur difficulties in both operations and budget. Umbria Export, in perfect comparison to the region it represents, Umbria, remains structurally relatively small. Increasing competition on world markets and the effects this has on businesses and industries in Umbria has a direct effect on Umbria Export’s operations.
Conclusion Umbria Export’s delicate transformation process for an almost wholly publically funded non-profit traditional consortium to an almost wholly privately funded nonprofit limited liability consortium has proved, over the past five years, successful. International contacts and networks, projects and operations have all grown exponentially thanks to the new consortium’s legal framework which has allowed the consortium to offer its expertise and services not only to its internal members but to anyone in the world. Proof of Umbria Export’s new and greater credibility is provided daily by the presence and support of the leading industrialists and artisans’ union as well as three banks within its capital. These banks also rely on Umbria Export for their clients’ business development on foreign markets and have thus systematically put their international offices and insider information in collaboration with Umbria Export international projects. Umbria Export has also become a successful aspirant both as Lead Applicant and
Partner in internationally funded projects, where its expertise and/or that of its shareholders can be offered and put to good use in helping developing countries attain higher standards in professional training, learn how to perform international business promotion and trade and reach minimum international standards to access and compete on wider markets.
Land of Ideas - Germany Introduction “Germany – Land of Ideas” is the place-branding initiative encompassing both politics and business. It was founded by the federal government and the Federation of German Industries (BDI) in 2005, with the aim of making Germany visible and identifiable domestically and internationally as a powerful innovator and creative force. Since then, projects have been launched with various partners to demonstrate that Germany really is a land of ideas. Germany’s hosting of the 2006 Football World Cup provided the perfect opportunity to launch the “Germany – Land of Ideas” initiative. It was originally only designed to be temporary, but has now established itself as a permanent fixture, using numerous projects and nationwide competitions to consistently and sustainably consolidate the “land of ideas” concept both domestically and abroad. The diverse nature of the “Germany – Land of Ideas” initiative enables it to address a vast range of issues, so as to reach out to as many people as possible and allow them to network and share ideas. “Germany – Land of Ideas” acts as a neutral platform to link networks and create synergies, which in turn lead to more ideas, innovations and joint projects. The initiative is based on two strong pillars – the “Germany - Land of Ideas” association, and Land der Ideen Management GmbH. As responsible entity, the association owns and manages rights to the “Germany – Land of Ideas” combined word and design mark and the various sub-brands. It also preserves and further develops the “Germany – Land of Ideas” brand. Membership gives businesses, institutions, clubs, associations and individuals the opportunity to use the association’s logo as part of their own communications and marketing activities. This strong trademark perfectly emphasises the notion of commitment to Germany as a location.
All activities falling under the “Germany – Land of Ideas” brand are carried out by Land der Ideen Management GmbH, which was founded under the motto of actively fulfilling the initiative’s objectives. It is considered a platform which networks players from all areas of society and encourages them to engage in joint projects. Land der Ideen Management GmbH is thus responsible for brand management, brand communication and operational controlling of all projects.
1. Territorial Scope In conjunction with various partners in Germany, the “Germany – Land of Ideas” initiative has launched several projects which – each in its own way – pursue a common goal: to enhance international visibility of Germany as a hotbed of ideas and innovation, of quality and creativity, that is helping to shape the future in a positive way. Competitions play an important part in the Land of Ideas. They are based on the notion that contests are the best way to draw attention to the creative potential in German society. “Germany – Land of Ideas” is currently holding two German-wide competitions with partners from industry (such as Deutsche Bank), politics (such as the German Federal Ministry of Education and Research), and society (such as Vodafone Foundation).
2. Area of Application “Germany - Land of ideas” has been conceived to show how a prosperous visibility of Germany abroad can improve and have decisive repercussions on the economy of the country. In fact, one of the goals of the project is to strengthen Germany’s economic potential and future visibility, highlighting the innovations that take place in Germany and making them attractive abroad.
3. Type of Best Practice “Germany - Land of Ideas” has launched various projects in cooperation with different partners to encourage creative minds all over the world to present their ideas and innovations and more than 2,500 projects from all over Germany have received prizes since 2006 and the overall number of competition’s winners is 2911. The Newsletter includes 10.000 E-mail contacts and comes out every 6 weeks. Taking into consideration the social medias: the project is on Facebook ( 13.000 fans); on Twitter ( 1900 followers), and also have a Youtube channel (200 subscriptions).
4. Stakeholders Involved Project partners and association members work with the initiative to invest in the future and campaign strongly to create a positive image of Germany both domestically and abroad. Project partners and association members also form part of a unique network by networking major players from politics, economy and society, and providing opportunities for an interesting exchange. One reason why the projects are so successful is that “Germany – Land of Ideas” works closely with partners from politics, economy and media:
5. Results Obtained “Germany – Land of ideas” is still an on-going process, but there are some key factors which might foresee a positive future success. In fact, the “Germany -
Land of Ideas” was created at first to be only temporary when Germany hosted the 2006 Football World Cup. But having witnessed its accomplishments, it has subsequently been established as a permanent project. Germany holds a prominent position in science, research and development, not only in Europe, but across the world. German companies are pioneers in developing innovative products, and “Made in Germany” is recognized as a sign of quality everywhere in the world. In our globalized world, scientific and technological advances are no longer isolated achievements that take place within national borders – they can only be accomplished by cooperating and exchanging ideas with leading experts from across the world. Statistics show that by the end of 2006 19% more interviewees than in the beginning of the year considered Germany an important location for research and education. Germany is the third most popular host country after the USA and Great Britain. Around 265,000 international students enrolled at German universities for the 2011/2012 winter semester. The event series “Germany and China – Moving Ahead Together” under the patronage of German Federal President Horst Köhler and Chinese President Hu Jintao with around 1.8 million participants, was the largest presentation of Germany abroad so far. From 2007 to 2010, Germany demonstrated in several important Chinese metropolises that it is an innovative, creative, forward-looking partner.
6. SWOT Analysis STRENGTHS • •
Creation of new possible business • • relationships and connections; Stimulation of advances of different • sectors by bringing development in different fields.
OPPORTUNITIES • • • •
Excessive diversification of the projects; Lack of concrete statistical data, Difficulty to properly forecast the possible outputs of the different projects.
• Promotion of the “brand” Germany; Encourage the creative exchange between Germany and other • countries; Creation of an international network facing business, industry, scientific, social and political issues; Promotion of “Germany” as example for other countries.
Uncertainty to forecast the monetary recovery of the capital invested; Slow process of decision making due to the numerous stakeholders interests.
Conclusion Since 2006 the “Germany - Land of Ideas” places branding initiatives to reward ideas and projects that make a lasting contribution to Germany’s future development.
With great dedication, creativity and passion, people across Germany accomplish outstanding feats. They explore new approaches, successfully put ideas into practice, and create successful innovations for their country’s advancement. In doing so, they improve the future of Germany and serve as role models for others. As far as “Germany - Land of Ideas” is concerned, this project gives several opportunities to many different branches such as: science, education, economy, technology and development. On the whole, considering the success linked to this project, “Germany - Land of Ideas” is an example of a high performed Best Practice.
CLUSTERING Since 2005 and the Lisbon Partnership for Growth and Jobs, innovation has been the focus of numerous documents issued by the European Commission. More Research and Innovation in 2005, A broad-based innovation strategy in 2006, Reviewing Community Innovation Policy in a Changing World in 2009. All of these have vastly contributed to building an innovation policy framework that has already attained notable results which in turn provide incentives for innovation. In 2010, the Competitiveness Council claimed that â€œclusters play an important role for innovation, gathering researchers, creative people, enterprises and technology to create new products and services for the world market as well as improving regional attractiveness. The efforts need to be continued to remove barriers to trans-national cluster cooperation and to encourage the emergence and consolidation of world-class competitive clusters across Europeâ€?. Such statements corroborate the European Commissionâ€™s continuous efforts (as well as those made by Member States) towards attaining stronger clusters. Cluster policy is a multidimensional balancing act between analysis and policy actions allowing for bottom-up initiatives and top-down steering. The Europe 2020 Strategy clearly states that the answer to new growth and job creation, to growing societal challenges such as climate change, scarce energy and other resources is innovation. The role of the Commission in this process is mainly to facilitate all forms of cooperation that could lead to more competitive clusters in Europe, by providing neutral economic analysis on existing and emerging clusters, identifying good practices, providing intelligence on opportunities for cooperation and facilitating networking at practical and strategic levels. Ongoing European policies are complementary to regional and national efforts to build stronger clusters within Europe. Clusters are defined by the co-location of producers, services providers, educational and research institutions, financial institutions and other private and government institutions related through linkages of various types. There is huge diversity amongst clusters. They differ in terms of stage of development along the cluster life cycle. Some are networks composed of SMEs. Some are organized around key anchor firms while others may have developed through and around universities.
The concept of world-class clusters is gaining acceptance on all levels (European, national, regional) and requires consolidated activities. Cluster policies as elements of European innovation policy approach aim at supporting regions and business plans and are set up to guarantee the highest synergy level between European Member States and regions, between national ministries and directorate generals by increasing the coordination of the wide variety of existing policies and measures. 1 Two of these flagship initiatives will gain from efficient cluster policies: • “Resource efficient Europe”, to support the shift towards a low carbon economy, to increase the use of renewable energy sources, to modernise our transport sector and to promote energy efficiency and more notably for the immediate aim of this book: • “An industrial policy for the globalisation era”, to improve business environments, notably for SMEs, and to support the development of a strong and sustainable industrial base able to compete globally. Through their value networks and proven channels between businesses, research and academic institutes, clusters provide efficient catalysts for innovation policy interventions. They are able to transform policy interventions into value creation and multiply public spending by private investments. Clusters may embody the characteristics of the modern innovation process. They can be considered as “reduced scale innovation systems”. Successful clusters encapsulate all the activities required to deliver specific value to customers. They venture beyond traditional definitions of industries and manufacturing versus services. They can emerge even where companies’ locations are not determined by the location of markets or natural resources. Their specific nature, including their spatial coverage, differs according to technology, market conditions, and other factors that infl uence the geographic extent and relative strength of linkages. Successful clusters have also significantly increased their global reach – attracting people, technology and investments, serving global markets, and connecting with other regional clusters that provide complementary activities in global value chains.
 COM (2008) 652 - Towards world-class clusters in the European Union: Implementing the broad-based innovation strategy
Business Network Contract ITALY Introduction The business network contract is a private agreement between two or more enterprises to jointly perform one or more economic activities to increase their potentials for innovation and competitiveness. The Italian regulation provides only a framework scheme identifying the essential content of the contract, leaving it up to the parties the freedom to customize it, which makes this model suitable for any kind of business activity and sector. The network contract regulation is intended to offer companies a collaborative tool that allows them to seize concrete opportunities to expand their business. It is a much more effective contractual model compared to the traditional forms of aggregation in Italy, such as company fusions, consortiums, Temporary Business Associations (Associazione Temporanea dâ€™Impresa) and joint ventures. As the business network regulation framework doesnâ€™t entail the creation of a new legal corporation, the constitution of a legal entity instead of being a mandatory requirement is left to the mere discretion of the network participants. The network contract therefore enables companies to combine two key elements of business growth, which seldom coexist: enterprises can collaborate on large scale projects without losing their legal independence and their autonomy in the business activities not included in the contract. The ratio behind the Business Network contract represents a step forward also from a business culture perspective as the aggregation of companies is an actual outcome of a shared business plan, specifically designed to pursue the common goal of improving the potential of innovation and competitiveness. The Business Network contract is a private agreement so the contract management issues and delays caused by bureaucracy are reduced to a minimum. It is a contract model that matches perfectly the requirements of businesses as the network is flexible and very easy to manage; therefore its parties can address their business issues and avoid dealing with obstacles caused by strict regulatory procedures. The innovation brought by the Business Network contract provides companies with the opportunity to join a flexible structure, that has a transparent organization and
to choose the type of internal governance of the network. By setting up a Business Network companies can share their assets and best practices, work together towards a common goal while remaining completely independent in dealing with business activities not included in the network contract. Since the introduction of the Business Network contract in Italy, in 2010, the number of companies that joined a network has increased significantly every year. Many of the network contracts are multiregional and include companies located in sites that are sometimes quite far apart, like the North and South of Italy. This is a good indicator of the effectiveness of this collaborative model in enabling enterprises to overcome the excessive geographic fragmentation of the Italian territory. The Business Network contract elements of flexibility, the legal independence of its parties, its private and collaborative nature are the answer to today’s national and international markets requirements. The network contract enables diverse businesses to team-up, to plan long-term, to seize concrete business opportunities and contribute to the national economic growth. The prerequisite of a Business Network contract is the submission of a shared business plan (“network program”) that specifies the rights and duties of each participant and the activities to perform to achieve their common goal. Although parties have freedom to customize the contract, which virtually fits any type of business, in Italy the manufacturing sector seems to present the highest percentage of network contracts. Enterprises that join a network gain visibility and get the opportunity to present their projects. This is particularly relevant in a context of credit crunch, as the decision making processes of Public Authorities and Financial Institutions can rely upon detailed business plans put together by trustworthy companies. So being part of a business network and presenting the related shared business plan, allows the network’s parties to validate their growth potential and be granted the financial resources that match their actual requirements. Both the Public Administration and the Banking System value the importance of interfacing with the entrepreneurial system in a context of transparency. This is why Public Institutions set up numerous initiatives to favor the creation and management of Business Networks. Financial institutions are also creating ad-hoc tools to improve access to credit. The European Investment Bank (EIB) has set up a dedicated fund for Italian Banks to sustain business networks. From a regulatory perspective, the
Italian Authority for the Supervision of Public Contracts (AVCP) with the publication of the “Determinazione” Nr. 3 on 3 April 2013, has extended the participation of Business Networks in public procurements (the requirements are detailed in the articles 34 and 36 of Legislative Decree Nr. 163 on 12 April 2006). The Business Network enables its parties to “join forces” and collaborate to achieve common goals, to share business projects, to perform actions and activities that would be very difficult to accomplish individually. In such a difficult moment of stall of the Italian Domestic Consumption Demand, companies choose to set up business network contracts to become competitive on international markets and be able to seize new opportunities outside the national territory. Many business network contracts have included in their business objectives internationalization and export, mainly through common activities such as: • Marketing of high quality products abroad • Seizing new business opportunities • Offering post sales assistance abroad • Sharing information on different markets • Providing training to members of staff employed in the international areas of businesses • Enhancing negotiating power on purchase prices ( i.e. primary resources) • Joining events and initiatives that promote internationalization
1. Territorial scope The territorial scope of this particular tool is by definition national on an Italian level. It has however witnessed numerous different applications and types of promotion. There is no limit as to the number and origin of companies that can join a Business Contract. Business contracts are also allowed to apply for calls/grants reserved for Business Contracts from a specific geographical area/industry. In these instances, funds will be issued only to the pertinent companies within the Contract.
2. Area of application All areas can be the object of a Business Contract. Companies can decide to form a Business Contract in order to better tackle and overcome any common area of interest.
3. Type of BP The Business Contract main focus Is to overcome dimensional constraints through aggregation. It is therefore primarily focused on clusterization as a more simple and immediate means of augmenting one company’s business opportunities.
Once this is achieved, however, the Business Contract may have as its focus on any other area such as innovation, internationalization. It can also have the indirect effect of greatly improving industrial and fiscal policies towards those companies which are effectively part of a Business Contract.
4. Stakeholders involved Italian enterprises have an average of less than 10 employees. Hence, SMEs and micro enterprises are the first stakeholders involved in the Business Contracts. Indirectly, local governments, chambers of commerce, specialized agencies, banks, etc. have all been stakeholders as they have all devised specialized policies and procedures when it comes to assessing/addressing a Business Contract. Enterprise unions such as Confindustria (Italy’s leading association of entrepreneurs) has also become a stakeholder through widespread promotion of this tool as a means of overcoming Italy’s enterprise dimensional gap not only with the rest of Europe but with the entire world. Thus, attempting to ensure continued and greater competitiveness on global markets.
5. Results obtained Public Institutions are actively promoting and sustaining Business Networks that want to export and become internationalized. Since 2010 Regional and Local Authorities and Local Chambers of Commerce have set up numerous programs to support Business Networks, many of which are specifically designed to promote their international activity.
6. SWOT analysis STRENGTHS • • • •
incentive for companies to grow • cmpetitively; • knowledge and information sharing preservation of legal independence and business autonomy overcoming of geographic segmentation
OPPORTUNITIES • •
Usually a Business Contract requires a leading enterprise in order to function well. A business network is an investment to which great time and energy must be dedicated by those involved. This is not always fully perceived
the Business Network contract is • widely recognized as a solid and reliable collaborative model. Third parties such as Financial Institutions and the Public Administration acknowledge the effectiveness of the Business Network model as a substantial tool to evaluate the strength of a business venture.
Public incentives towards Business Networks are gradually decreasing. Some Business Contracts were formed on the sole basis of accessing incentives and funds. If the Business Contract does not grow past this initial necessity, it will immediately end once funds run out/are no longer accessible.
OPPORTUNITIES • • •
Enterprises that join a network gain • visibility and get the opportunity to present their projects. Enterprises that join a network can potentially transform that network into a new enterprise. Enterprises find valuable and trustworthy business partners. This usually leads to many new business partnerships.
Network partners untrustworthy.
Conclusion Numerous studies have shown that businesses that have joined a network have increased their exports significantly, at times within a year. The Confederation of Italian Industries (Confindustria) is also promoting the Business Network as a new tool for enterprises’ business expansion in international markets. RetImpresa (* Retimpresa’s studies were here made use wide of ), the Confederal Agency for Business Networks, is currently working, on behalf of Confindustria, on the implementation of the contractual model. The Business Network contract solution is in effect an indicator of the vitality of Italian companies, who are willing to react positively in such a difficult time for the national economy.
Social Enterprise Cluster for the sustainable development BULGARIA Introduction Across Europe, social enterprises have experienced considerable development over recent years despite striking differences in their form and the rules that govern them. This growth trend, together with the significant discrepancies that still remain between European countries, has given rise to various schools of thought surrounding the key driving factors behind their development. Before reviewing the good practice identified, it is necessary to understand the peculiarities of social enterprises. In order to make the most of the intrinsic qualities of social enterprises, specific support structures are needed, as regards to both their structure and the activities they carry out. Most of the business support needs of social enterprises, including the various aspects of business management, are the same as for conventional businesses. After all, every business needs to be soundly managed so as to comply with regulatory requirements, make a trading surplus, and stay accountable to its stakeholders. However, social enterprises have specific features that create complex needs demanding diversified solutions. Typical of social enterprises is the pursuit of objectives which go beyond the interests of their owners. The profits generated benefit a wider group, such as individuals, local communities and social groups, regardless of possible ownership rights (e.g. as members of the social enterprise). Social enterprises produce goods and services where the proximity and relation to the recipients are crucial to the nature and quality of the good itself. As a matter of fact, the beneficiaries of these goods are often socially excluded and live in insecure conditions. Official definitions of social enterprises are rare throughout Europe. There are only a few countries where the national legislation determines the characteristics of a social enterprise. Generally speaking, a social enterprise is a business with primarily social objectives whose surpluses are principally re-invested for that purpose in the business or in the community, rather than being driven by the need to maximize profit for shareholders and owners. Social enterprise can operate in any king of field or sector without any exclusion, having always as main aim: â€˘ â€˘
fulfils social goals has a trading income
• • • •
addresses a target population in need may operate under various legal forms deals with voluntary social work has a non-profit orientation or reinvests profits
Also from the organizational and managerial point of view, social enterprises are extremely heterogeneous. Like all enterprises, social enterprises must use standard methods of management and control of their operations, but their strategic goals are different compared to for-profit companies. No matter which legal form they adopt, social enterprises, above all, have a participatory approach and limited profit distribution (rather profit re-investment) in common. Their focus lies on the achievement of social goals and not on profit maximization and therefore their relations (to clients, community, public institutions and other social enterprises) are based on partnership rather than on market principles. It is not unusual that such social enterprises are founded by persons in need themselves or their relatives. Social enterprises have a multi-stakeholder structure and use regular employees as well as volunteers and co-operations with clients to achieve their results. To better understand the specific business and cultural context, is necessary to list the main general lacks that generally effect and limit the development of the social enterprises. These lacks can be identified in: a. Lack of planning of sustainable projects and initiatives b. Lack of managerial culture c. Lack of identification of the necessary human resources and skills to manage and to improve the own business d. Poor use of marketing techniques and methods of public relations e. Unsound financial structure f. Lack of how to communicate its own business to the potential customers and to the market g. Lack of creating and improve networking with different types of stakeholders Till now we gave a general definition of the context of the best practice, focusing mainly on the social enterprise area, giving general definition and mentioning the main lack that limits the development of the social enterprises. From the other
side, is very important to explain who the other main actor is in the best practice mentioned. Who plays an important and strategic role on the best practice are the traditional profit companies that, for the implementation of their corporate social responsibility principles, want to match and develop collaboration and partnership with the social enterprises. The facilitation of this matching process is the real innovation expressed by the best practice, where the profit enterprises can meet the social enterprises giving to them several important and strategic supports and opportunities, useful and essential to achieve those conditions that can guarantee the implementation and realization of the development not only of the social enterprises but the whole community.
1. Territorial Scope The application of the Best practice is for the whole country and involves all the regions. In future development of the activities of the Cluster, it could also operate at international level with collaborations and partnerships with other similar business associations.
2. Area of Application The Best Practice involve many different kinds of stakeholders, private and public organizations, profit companies, non profit organizations, social enterprises and local authorities. It’s application covers all the business sectors and has a strong impact on the local development, business development with particular reference to the small enterprises.
3. Type of BP Business Cluster
4. Stakeholders Involved The Cluster of Social Enterprises involves all strategic stakeholders that can guarantee a real and concrete sustainable development of the business promoted by the social enterprises and for all the different organizations that operate on the territory. There are 3 main category of stakeholders that are involved in the Cluster and are: • •
Social enterprises and Non profit organizations that works for social inclusion Medium and big profit enterprises that want to apply and to implement their CSR principle • Banks Foundations, Other Foundations and local authorities. The stakeholders involved in the Cluster with various purposes have come together
to collaborate on the basis of value sharing through common experiences. It appears to be a major factor of social innovation that stakeholders share a common experience, here taking part in establishing a concrete and effective partnership and collaboration for common purposes. The Cluster will enable social economy organisations to make a larger contribution to the realisation of their objectives, building, on the same time, strong and durable opportunities for development of the whole business community. The main aim of the Cluster is to develop and to spread a new form of networking that involves different kind of stakeholders, public and private, profit and non profit, that can play an important role on the local business development. The participation of all these different stakeholders in the network aims to bring the partners the following benefits: • • • • • • •
an understanding of the objectives, capacities and constraints of their institutional partners in their home territories experience of working in a cross-institutional partnership to improve business effectiveness a deep understanding of how the best initiatives for the support of social enterprises function in a good cross-section of European countries and regions an understanding of how these initiatives fit together to form a comprehensive support environment an understanding of needs and gaps in terms of support according to their own context and regulatory framework an opportunity to innovate and to contribute to the Social Business Initiative an opportunity to improve policy measures for social enterprises
5. Results Obtained The Cluster has been set up very recently and it is still on the phase of its start up. The main results obtained are the involvement of the follows organizations: -
n.8 non profit organizations n.11 social enterprises n.7 Medium and big profit Companies n.1 Bank Foundation n. 4 Foundations n.1 Local Authority
In these first months the Cluster could promote and facilitate the start up of n.2 new initiatives and facilitate the matching between n.4 social enterprises and profit companies.
Is important to notice that the Cluster started up a very important, innovative and strategic process in Bulgaria that provides the matching between the profit enterprises and the social enterprises. Indeed, many profit companies that want to concrete apply the CSR principle, express a strong interest to develop and to build collaborations and cooperation with social enterprises. But how is this cooperation possible? The profit companies can deliver outside of their organization small orders as, for example, the acquisition of administrative materials, realization of communication materials (brochures, leaflets, etc.) services (cleaning, maintenance of web sites, etc.) and outsourcing other kind sof activities or products, that generally the social enterprises can respond to this kind of demand and to be very competitive.
6. SWOT Analysis There several strong weakness that till now characterized the Bulgarian social enterprises and as consequence as an impact on the Cluster and on its potential activities. To encourage social entrepreneurship in Bulgaria it is necessary to ensure better awareness and promotion of the benefits and general impact of social enterprises to the economic and social development of the country and society at large. The promotion of social enterprise and social entrepreneurship should be based on the best modern communication and information technologies. What we see is important to foster: • Value of Social Enterprises – inclusion of disadvantaged groups and communities • More effective participation of civil society in decision making • Create enabling environment for social enterprises • Knowledge base for social enterprises • International networking and collaboration The key challenge is to get a social enterprise to “think” and “behave” like a business, not a charity. Only then can social-enterprise leaders focus their attention on improving their business operations and, consequently, the services they provide to marginalized groups rather than constantly searching for funding. The social enterprise has a stabilizing effect on the NGO, because by producing a revenue stream, it assures continuity of social-services delivery and job security for the staff. The key point is NGO managers need to change their attitudes and mentality so they think and behave like business people and operate their ventures in a businesslike manner.
At the moment in Bulgaria there are many different financing resources coming from different private Foundations, Bank Foundations and Structural Funds that give a large variety of financial opportunities for the development of the social enterprises. But, despite that, still in Bulgaria many social enterprises have problems and difficulties to get financial resources. This situation is mainly connected with several serbacks that characterize the Bulgarian social enterprises, that can be listed as: â€˘
Being competitive on the market. Lack of competitiveness is one of the most difficult obstacles for the social enterprises to overcome. The quality of social-enterprise products is not always up to standards, for two reasons. First, the people from the targeted social-services groups, who lack appropriate skills, often are involved in the production process. Second, product or service quality is not usually uppermost in the minds of the social-enterprise managers, who tend to focus on the social aspects of their organizations. However, sales success in the commercial market requires consistently high standards. Many social-enterprise managers believe the positive social impact resulting from the sale of their products or services provides sufficient incentive for people to purchase the goods from their organizations rather than from competitors. Lack of awareness and understanding of social enterprises and their role in the community. Due to the lack of tradition in developing the third sector during the communist era, social enterprises still are not wellunderstood and often are misperceived by society at-large. In Bulgaria, indications are that many NGOs and social-service NGOs already engage in income-generating activities because of financial necessity. In many cases, these activities are closely related to the missions of the NGOs. However, social enterprises must overcome a number of challenges in order to gain public support and understanding. Better information and marketing are needed to inform the public about their work. In addition, strong partnerships must be forged with other businesses, organizations and institutions, with a focus on developing better network relationships.
One of the most potential weaknesses of the Cluster is the implementation of the process of communication and networking between the social enterprises and the profit companies. Traditionally, these two different kinds of organizations have different business approaches and these reflect in the operative process how and when to develop a cooperation and business. To facilitate this communication and this cooperation is one of the most important and strong challenges of the Cluster and it is the main driver that can guarantee both sides a real sustainable development of business activities.
In order to overcome this gap it will be necessary to implement and to improve the skills of the management of the social enterprises in order to favor their communication tools and approach towards potential customers and generally profit companies. From the other side, it will be also necessary to support the profit enterprises to better express and implement their CSR principles in order to better match the needs and the real capacities of doing business by the social enterprises. To achieve this goal, the profit companies should acquire a different communication approach in order to better match the social enterprises and their business potential and step by step, to improve their capabilities to deal with the business and to improve their capacities to be sustainable on the market. The Strengths of the Cluster can be identified in many different categories that have a strong positive impact not only for the social enterprises but for the whole community and the business. The main Strengths of the Cluster are: •
• • •
Encourages networking among different organizations. Networking is cooperation among firms to take advantage of complementariness, exploit new markets, and integrate activities, or pool resources or knowledge. Networking organizations are more likely than non-networking firms to engage in collaborating and information sharing in marketing, new product development, and technological upgrading. Support innovative approaches to social enterprises development Support the large implementation of the CSR principle by the profit enterprises Favor a better using of the public and private financial resources trough a sharing of evaluation of new business activities by local authorities, Foundations, profit enterprises and social enterprises Improve access to business by social enterprises and other small companies that generally have limit to enter in the market. Start up of new social enterprises needs less investment of funding respect traditional profit company and pprovides a large opportunity for local people to gain employment Favor cohesion and inclusion processes among all the stakeholders that operate in the community and encourage participants to be closer to the European model of making sustainable development.
The innovation process of the Cluster involves all kinds of stakeholders, public and private, that operate in the territory, creating step by step, more networking between all the different organizations that participate and as natural consequence, will impact on the sustainable development of the whole community, mainly having
the follows benefits : • Create the right conditions to favor a real and large social inclusion of disadvantaged people • Create the basis and the job opportunities for those people at risk of loosing their job • Improving a more sustainable concept of how to do business much more close and correspondent to the European principle of doing business • Create the conditions and the opportunities to develop new sustainable business activities, with a concrete base of market access, for disadvantaged, normal, adult and young people (especially for all those categories that generally are more at risk) • Improving communication and cohesion between the public and the private sector, giving the opportunity to better use the financial and human resources available on the territory. Conclusion Social entrepreneurs have been emerging as new social innovators. They have tackled various social problems in the field of welfare, community development, environment, and cooperation with developing countries through business activities rather than volunteer activities. Social enterprises are expected to provide new innovative business models in social fields, able to respond to a variety of social needs in the local and global communities, to which conventional schemes are not able to respond. Aiming to change society and making business work well are not actions that are linked automatically. Social entrepreneurs who are able to connect both and to develop unique activities in the process are creating innovation. Social entrepreneurs are not necessarily required to create new technologies, materials or product innovation, but to develop new schemes and unique business models. This cluster is defined as an organisational accumulation that includes social enterprises, support organisations, Banks, Foundations, Local Public Authorities, public institutions, and other stakeholders. By building cooperative relationships in a cluster, new social businesses are born and they generate and provide innovative social solutions and social values. The Social Enterprises Cluster has similarities to the Industrial Cluster, but it also has its own unique characteristics; it is more open, flexible and community-rooted. The basic characteristics are cross-section, interaction with its community, and open access. Social enterprises affect stakeholders through their business activities, at the same time, they cannot exist without being accepted by those stakeholders. Stakeholders recognise and come to learn about social issues from their business activities. New social value can be realised through purchasing
and supporting of goods and services provided by social enterprises. Social entrepreneurship is increasingly challenging the traditional idea of doing business just for the sake of profit, and social enterprises are developing around the world, even if in statistical terms they are still a niche form of business. Social enterprises contribute to helping keep those people at risk of social exclusion attached to the labour market through the provision of training and work integration activities. They also address the social needs of groups which government agencies find hard to reach. In this period of crisis, social enterprises show how they can contribute to local business development, involving also other kinds of stakeholders and the implementation of a Cluster is a real innovative tool that can support transversal and sustainable development of the local community.
Bulgarian Furniture Cluster BULGARIA
Introduction The Bulgarian furniture cluster, with 31 members, has been in existence for 5 years and it is starting to achieve a remarkable Export results and has created a supply chain with the ability to produce high quality Contract Furniture for International Markets. The Furniture Industry has always been one of the leading industrial sectors in Bulgaria. Rich Timber resources and long traditions the sector has had a high social impact in the regions of Bulgaria. There exist geographical concentrations of nearly 3,000 furniture and wood processing Companies – in Sofia, Varna, Pazardzhik, Troyan-Levech, Rhodope Mountains and Rousse. It is estimated that approximately Some 30% of the Country’s area is still covered with Forest. In 2005, a Pilot Cluster in Troyan with 11 SMEs plus NGO, Technical School an Municipality was formed. After the Pilot the group fell apart because of this agreement over profit-sharing and equipment. A second Cluster initiative was formed in the Velingrad area of Rhodope Mountains in 2008. It was entirely projectbased, and collapsed even before the utilizations of the EU funds due to lack of leadership and administrative capacity. The lessons learned through those two tries led to the creation of the “Bulgarian Furniture Cluster” in 2008 comprised of furniture producers specializing in the contract furniture business. Member of the cluster are 22 SMEs furniture manufactures, 5 design studios, 2 NGOs and 2 educational institutes, potential with the purpose to increase their competitiveness
on foreign markets. The main characteristics of the Cluster are: • Specialization – for COMPETITIVE ADVANTAGE • Increased capacity and complementary work (joint orders) • Reduced costs + synergy: common purchase of materials, common supply, etc • Efficiency • Common marketing • Flexibility • Complexity • Innovation and R&D • Economy of scale • Increased competitiveness – EXPORT READINESS • Aggregate turnover of more than 5o mln. Euros • 4 SMEs above 50% from their turnover • Aggregate employment of 2.650 people • Economic growth of 12% (first 6 months of 2011) The Cluster achieves these goals and its development mainly through: • • • • • •
Strong leadership Co-ordinator (Ambitious + Energetic) Sharing information and resources Equal treatment of each members (neutrality) Mutual trust! A few key zone of activity: o International trade o Trading/skills development o Quick win projects o Fabrication laboratory for prototyping
1. Territorial Scope The Bulgarian furniture cluster operates at regional, national and international level, caring out several important and strategic activities that allow it to develop different and innovative business activities that supported the cluster to enlarge its geographical scope, reaching new important markets and countries. 2. Area of application The Bulgarian furniture cluster has different areas of application due to its large range of activities. The most relevant area expressed by the cluster can be identified in clustering, business development process for SME, internationalization, networking, sustainable development of local community and innovation on
management. In fact, the cluster, for the results obtained, for its good management process, its strategies and its networking, is one of the most successful experiences in this specific field in all Bulgaria. 3. Type of BP The Bulgarian furniture cluster have been characterised from the perspectives of the following set of key success factors: strategic interaction, policy infl uence, networks, linkages and interaction, private investment, technology and knowledge base, human capital and access to markets. The quality and variety of technology and knowledge capabilities that are embedded within the cluster’s actors, serve as a basis for innovation and technology development. The ability of companies to access customers, in established and emerging sectors, both within and external to the cluster, are important outputs of this best practice. The main factors that characterize the best practice expressed by the Bulgarian furniture cluster, can be identified as follows: • • • • •
Clustering Networking and internationalization Involvement of local community Public authorities involvement Strong partnerships with different stakeholders developed
4. Stakeholders involved The Bulgarian furniture cluster could develop a strong and large cooperation and partnership with many different stakeholders, at regional, national and international level, creating and organising networks of actors in cluster structures, facilitates communication and knowledge exchange, creates linkages between actors across different organizations and sectors and enables joint strategic initiatives that can attract investment and lead to capacity-building projects in the research and business communities. The Cluster, since its start up and during all its period of activity, involved many different stakeholders such as: • Furniture industrial and craft companies; • Local non profit organizations; • Training companies; • Local communities; • Public authorities at local, regional and national level; • Private business organizations and companies from other countries.
The involvement on the cluster’s activities of all stakeholders can be considered very high and mainly due to the constant and effective services and assistance offered by the cluster management, that with combinations of different activities, constantly support members and external partners and organizations to match their needs and their potentials in order to improve their business activities and to better exploit the different business opportunities. 5. Results obtained During these years of activity the Bulgarian furniture cluster could achieve several important goals mainly trough a constant and strong impulse fro the management, that could support the process of internationalization of the cluster and its members. The main results obtained specially are: • Early success in Market Development in 2006 • The neutral position of Ligna Group – leading on Client Management, meaning that Hotel Groups have confidence in quality and price • The Cluster has dispelled the myth that Companies in the same Sector or in the same City will not co-operate. In fact in a Recession they will co-operate more! • The Cluster is simple –it “makes people think in one direction” – export development • Strategic planning every year to set up objective targets • Regular meetings: 4 to 5 per year • Member visits (round tour): get to know each other better • Focus groups: marketing; design/trends; HR/education • Networking and sector representation at national and international level o Membership in ABC (Association of Business Clusters) o Partnership with Cluster Land, Holz Cluster, Italian Chair Cluster • Join Marketing Activities – Fair participations, like: o The Sleep Event London 2010/11/12 o Milan Design Week 2011 (via Tortona) o IMM Cologne 2011 o B2B Valencia 2013 o Baku, Azerbaijan 2013 • Trade missions – Holzcluster Austria; The Chair Triangle in Italy • Design workshops – Black See 2010 & 2011 • Joint master degree in Design (ISIA Florence + NBU Sofia); graduate placements • Projects with Serbia; on Re-Manufacturing; on Supply Chain
Development It is extremely important to underline that so far the Bulgarian Furniture Cluster has not applied for any of the available EU grant schemes and projects! It developed itself as a totally independent, self-contained organization, with a very strong business focus and clear marketing strategy. IMPACT – 1 Economic Data: 2012 • Aggregate turnover of about 55 mln. Euros (5.2 mln Euros directly from cluster orders) in a crisis period • 6 SMEs above 50% from their turnover • Aggregated employment of 2753 people • Economic growth of 14% pa in years of crisis (18% for 2013 projected) IMPACT – 2 OVERVIEW RESULTS: 2006-12
5,685 Hotel Rooms Preferred Supplier to 2 German Hotel Groups 2,600 Citroen Showrooms, France
2012-13 2013 2011-13
Expansion to UK/Scandinavia and Caspian Sea Move to new Cluster office and X-Border project Cluster Turnover: €1.5 mn, €3.5 mn, €5 mn.
6. SWOT analysis An important strength factor of the Cluster is that allows access not only to specialised inputs and employees, but to information and technology, as well. Being part of a cluster, a company, is able to gain access to a deep and specialized supplier base In addition, the close relationships developed among the members foster trust and facilitates the flow of information. Further, the members of a cluster are able to perceive gaps and limitations of their industry in products and services and react vigorously by the formation of new businesses. The service provider of the Cluster is a typical example as it was formed in the framework of the cluster. Developing clusters of competitive advantage is based on the simple concept that companies in similar or related industries can collectively achieve and gain much more by cooperating than if they act individually. The Cluster plays a vital role in a company’s ability to innovate as they increase its capacity by diff using technological knowledge and innovation more rapidly. Companies inside the cluster have a better perspective of the market than isolated competitors do and they are obliged to develop innovative strategies and built in the necessary capacities to implement them.
Actually, The Bulgarian Furniture Cluster does more than make opportunities for innovation more visible. It also provides the capacity and the flexibility to act rapidly, as a member of the cluster can source what it needs to implement innovations. In short, the strengths that stem from participating in the Bulgarian Furniture Cluster are summarised as follows : • • • • •
• • • • • • • •
Led by a Project Management Company providing target Markets Starting as an Export Consortia, now a Cluster with a serious Action Plan. Like NWAA and TFIA it is the industry leader No EU funding to distract Cluster Management Sharing and pooling resources Sharing business development and transactions costs • A greater presence in the market • More substantial marketing intelligence • Greater security of data exchange • Increased access to financial support • Guidance from experienced companies • Improved Customer Relationship Management • Increased Sales Efficiency • Strong capacity to develop business at international level and support the internationalization of its members Reduce cost of sale Reduce cost of supply chain transactions Economies of scale by aggregating their needs Rapid detection of new verified suppliers One point of access to all Suppliers and products Better perspective of the market Development of new capabilities Formation of new businesses
Enterprise clusters are increasingly attracting the attention of sub-national and national policy makers because they represent efficient structures for stimulating the competitiveness, productivity and innovation of small enterprises. In certain circumstances, however, cluster might become an obstacle to further development of their members. In a context of rapidly changing technology, cluster firms become more vulnerable if they are locked in old technologies and if they do not become flexible enough to adapt to those changes. On the other hand, considering the major challenges of clustering, culture is a strong contender. However, the Cluster
presents several weakness and lacks mainly related to : • Companies’ members need to improve and to increase their capacity to compete internationally • or to lead projects, strong international orientation; • Too strong national orientation | missing export orientation; • Lack of open mindset • Lack of international drivers One of the main challenge for the Cluster and for its members is continually to increase and to improve the capacity to compete in new specific markets and to acquire new and innovative tools to better support their internationalization process. Conclusion The Bulgarian Furniture Cluster is a very good example of a successful experience in business development not only for Bulgaria but for all Europe. Infect, the independence of the Cluster from state funding prove its own strong sustainability and its capacity to react and to adapt its business activities to a a large range of different situations even in period of crises, as a good example of how a small country in transition could effectively use cluster development as a tool for increasing productivity and economic growth. Clustering, when performed well can lead to significant improvements in innovation, technology transfer, skills transfer and knowledge transfer leading to individual company performance improvements and also to economic growth for wider society. One of key factor of success of the Cluster is related to addressing market failures in the market for knowledge creation and the need for supporting infrastructure to develop and disseminate new knowledge.
Berlin Partner für Wirtschaft und Technologie GERMANY
Introduction As a unique Public Private Partnership, Berlin Partner for Business and Technology (Berlin Partner für Wirtschaft und Technologie) is a project that consists of a cooperation between the Berlin Senate and the over 200 companies involved in the promotion of the city. The mission of Berlin Partner for Business
and Technology is to provide companies, investors and scientific institutions in Berlin with business and technological support. Numerous experts provide an outstanding range of programs for helping companies launching, innovating, expanding and securing their economic future in Berlin. Customized services and an excellent science and research allow a broad range of consultancy and information services. The aim of the project is not only the support of business, technology and innovation, but also the management of numerous activities to reach higher levels of growth, such as the help for the development and implementation of innovative solutions and the promotion of Berlinâ€™s strengths and opportunities of Berlin towards Germany and the world. Moreover, being part of a network means having the possibility to exploit efficient synergies. For this reason, Berlin Partner for Business and Technology GmbH (BP), together with visitBerlin, attend many international events together. Finally yet importantly, this type of structure ensures a major flexibility, allowing a better-tailored service to companies. Regarding this specific project the aim and responsibility of BP is to act as a neutral facilitator for the promotion of the exchange of ideas among government administration, business and institutions, and to develop and implement marketing strategies altogether. With specific services and excellent links to research, the experts of BP provide an outstanding range of offers to help companies launching, innovating, expanding and securing their economic future in Berlin. Offering companies the possibility to expand their business, means giving them the opportunity to flourish and increment through their contribution the overall economic development of the region. BP supports actively the development and enhancement of Berlin in order to transform it into an international leading economic, technological and innovative location. There are some products available to companies, such as Business Welcome, Business Financing, Business Locating and Business Recruiting packages. In addition, through the Business Location Center all the relevant information about Berlin as a commercial location is available for the companies.
Berlin is a demanded business location, not only for its service economy and for its industrial production, but also for its innovative clusters. With a targeted innovation policy within the Gemeinsame Innovationsstrategie der LĂ¤nder Berlin und Brandenburg (innoBB), on an international level clusters are actively promoted and further developed with the aim of positioning Berlin as one of the leading international economic and technological centers. The competitiveness of nations and regions is nowadays not determined by single companies, but more and more by the innovative activities of entire industries and sectors. Therefore, regional and national competitiveness has become the central topic for the economic policy worldwide. Thanks to clusters, defined in the innovation strategy â€œinnoBBâ€? for Berlin and Brandenburg, it is possible to reach all the aims previously mentioned, even more efficiently. A cluster can be considered as a group of companies, which have chosen to settle in the same economic region because of certain competitive advantages and synergies. The competition and cooperation within the cluster enhance the competitiveness towards third parties. The geographic area covered by clusters
can vary. Sometimes the clusters can have a regional, national and international dimension.
Benefits mainly depend on the composition and type of cluster members and their involvement. Companies of different dimensions, research and educational/training organizations as well as public institutions, complement one another resulting in a gain of competence and resources.
1. Territorial Scope The project has a regional scope. Therefore, it is applied in the whole region of Berlin and Brandenburg with a focus on Berlin, as the capital city, where a rapid development of industry and economy has taken place in recent years. After the fall of the Berlin Wall in 1989, the city experienced an incredibly quick development. It has become an internationally attractive city, being an interesting economic and technological centre. Berlin is now synonym of movement and change, of growth and new possibilities. Excellent infrastructure and entire urban districts have been generated. It still has a high potential for future growth. An increasing number of persons and companies comes to Berlin resulting in a central location for innovation. Important companies, such as Amazon, Fujitsu, Google, Mercedes-Benz and Microsoft have already discovered the prime-position of the city. The German capital region offers very good conditions for innovation and growth.
One of the most relevant strengths of the region is the conspicuous presence of excellent universities and research facilities. The innovative growth industries and the promising fields for the future, which are bundled in five clusters in the region, take most advantage of the extraordinary research scenery. At the interface between branches and in a tied networking between the actors participating to the same value chain, innovative products for the global market emerge.
2. Area of Application The two mains areas of application are research, development & innovation as well as cluster & aggregation. In fact, the aim of seeking economic growth through the creation of major job opportunities and decreasing unemployment rates is reached by two main strategies: first of all, through an impulse to the development of existing companies and support of new entrepreneurs for the creation of successful businesses. Innovation is the key word that characterizes this attempt, since innovative firms grow faster and are more likely to survive during a recession. The advantages of innovation create knowledge spillovers that allow other firms to benefit from the initial innovation in terms of increasing productivity. This can create the starting point for economic growth and prosperity. Secondly, it results from the creation of clusters and aggregation of SMEs. The interest in clusters and networks is based on the ever-increasing amount of statistical evidence that indicates a positive relationship between the presence of clusters and the prosperity of regional economies. Clusters more and more serve as a catalyst for supporting industrial transformation processes and for developing new regional competitive advantages. As a result, company growth and job creation lead to growth and prosperity. The cluster development plan is a complex task, which demands a long-term perspective with success at different levels and phases. There are some clusterspecific aspects, which are interrelated. They infl uence the clusterâ€™s prospect for development: long-term involvement and commitment of participants; financing; innovation dynamics and innovation management; focusing and expansion of sectors; regional development.
3. Type of Best Practice The core services provided by Berlin Partner can be subdivided into two groups: there is one package of services offered to investors and other services for Berlinâ€™s companies.
The Business Location Center (BLC) is a reference point of BP. All key economic information is available at Berlinâ€™s Business Location Center, such as industry data and property offers. It provides current key economic data for Berlin and Brandenburg in just one single source. This data is gathered in an integrated real-estate portal, the Central and Eastern European Business Portal, a telecommunication atlas and services provided to exporting companies. The Business Location Package offered by BP is an unique service, that allows companies to try out their new location at a low cost. It offers two alternatives: -
The Real Estate Portal provides up-to-the-minute information on the properties available from public-sector and private owners in Berlin and Brandenburg. The portal allows companies to explore an initial selection of properties. Based on their individual criteria, such as type of building or site, lease/purchase, cost, location, address and seller/broker, the portal will return detailed results for various comparable properties in Berlin and the region. Every property is linked to Berlin Economic Atlas (aerial photo, public transit connections, telecommunication, infrastructure and much more).
Based on the requirements of companies, they search for an appropriate property for rent or purchase presenting their suggestions in their showroom. They organize location tours and introduce you to the seller or property owner.
The Business Welcome Package provided by BP is a service that helps companies getting started at a low cost: a 3-months â€œBerlin Tester Packageâ€? is available for just 3.100,00 euros plus VAT. It includes an office (office furnishing, internet and printer); an apartment (furnished, fully equipped, ready for occupancy); consultancy services (2 hours of basic legal consultation, 2 hours of basic tax advice and management consultation and 2 hours of PR and communication advice for entering the Berlin market). The Business Welcome Package targets companies from outside Berlin that plan to invest in Berlin for the first time or that intend to re-invest in Berlin. The following sectors are of elevated interest: healthcare industries and life science; ICT, media and creative industries; transport, mobility and logistics; energy; technology and service industries. This allows companies to discover in advance the opportunities offered by the business location and decide consciously to invest there. Before making an investment, it is important for investors to be sure that there will be a good return on investment. Through the Business Financing Package, BP offers better incentives and economic development funding than many other major European cities. Companies can receive grants covering up to 35% of the funds intended to invest in Berlin. At the same time, comprehensive financing opportunities are available, including syndicated loans, public loans, state guarantees and public equity capital. Attractive programs administered by the Federal Government and the European Union promote research and development projects. The Enterprise Europe Network Berlin Brandenburg (EEN-BB) at BP is part of an EU Commission consulting network for small and medium-sized enterprises. EEN-BB assists companies with comprehensive service. For the companies in Berlin it offers information and consultancy about the European market, support with European funding programs, support through companies with European-wide and international networking in innovative processes and the transfer of technology and support for intensified participation of companies and research institutes in the 7th EU Research Framework Program. The Senate Department for Economics, Technology and Research, the Brandenburg Ministry for Economics and consortium partners co-finance the network. The Division Capital City Marketing organizes initiatives within and outside of the city, develops communication campaigns and initiates and organizes events for Berlin all over
Germany and abroad, while also representing the city in networks. New investors and businesses should be attracted through good communication strategies. The Business Marketing Package will help companies to establish themselves in Berlin’s business community quickly, drawing attention to the company’s needs and meeting the right people. The package aims at non-resident companies planning to invest in Berlin for the first time or re-invest in the city. The service provided consists of an information package, with comprehensive information on Berlin, marketing contacts with companies and contact-points in Berlin’s marketing environment and the participation in an event of the relevant industry clusters. The EU and International Services unit of BP help companies to develop global markets and search for international cooperation partners. With the Business International Package, they provide companies with personal consulting for their international projects. They receive the associated services of one single source – individually or in combination. Berlin has the highest density of research facilities in Europe and it is also one of Europe’s biggest scientific locations: roughly 200,000 people study and work at 14 public and 28 private institutions of higher education and around 70 non-university research facilities. Close to 20,000 of Berlin’s graduates arise at the labor market every year. With the Business Talent Package, it is possible to receive assistance for the strategies in competing for the best talents at the business location Berlin through the knowledge of experts of the specifics of Berlin’s labor market and their network with all actors in the field of human resources in Berlin. Partnerships are a very important for internationalized companies in order to face the always-increasing competition caused by global markets. They help to extend their own presence on markets abroad. Even joint projects at fairs, where companies can obtain global visibility without investing too much, have a similar effect. The result could be an overall improvement of the economy, since new businesses are symbols for new employment opportunities and consequently for an increase of consumes.
4. Stakeholders Involved Many different stakeholders participate in the projects contributing with different amounts of investments:
1. Investitionsbank Berlin (31,5%): Investitionsbank Berlin (IBB) is the primary provider of economic development funding and financing in the Land of Berlin. The main subsidy and incentive programs for business and real estate offered by the Land of Berlin are centrally organised by IBB. It promotes investments and other projects with reduced interest loans, non-repayable grants, equity capital and free consulting. Today, IBB offers programs promoting investment, technology and entrepreneurship. It also provides liquidity assistance. Its real estate programs promote home ownership and the construction of rental housing as well as the modernization and rehabilitation of Berlin’s existing housing stock. IBB’s customer center is the first stop for investors seeking advice in Berlin. Specialists focusing on economic and real estate subsidy programs advise investors on incentive programs and assistance measures adequate to their projects. 2. Technologiestiftung Berlin (30%): the Technologiestiftung Berlin (TSB) stands for innovation and technology development in the capital region. It fosters science and supports economy. The focus concentrates on strategy development, formation and scientific communication. The TSB Innovationsagentur Berlin GmbH (TSB Innovationsagentur Berlin LLC) merged with BP on 1 September 2013, becoming Berlin Partner für Wirtschaft und Technologie GmbH. 3. Partner für Berlin Holding Gesellschaft für Hauptstadt-Marketing mbH (28%): The commitment of all Berlin Partner companies is combined in Partner für Berlin Holding Capital City Marketing Ltd. 49 companies of the group of about 170 licensees (the ‘’Berlin Partners’’) also function as company members (Gesellschafter) of Partner für Berlin Holding. All licensing agreements, as well as a framework contract regarding capital city marketing with the State of Berlin, are concluded with Partner für Berlin Holding. Berlin Partner für Wirtschaft und Technologie GmbH is assigned via an agency contract with the fulfilment of the activities associated with the licensing agreements and the framework contract with the State of Berlin. 4. Handwerkskammer Berlin (3,5%): the Berlin Chamber of Crafts is a selfgoverning institution. About 30,000 members of craft enterprises join the Chamber. On the whole, the members offer a job to 180,000 workers and a professional perspective to more than 13,000 students. 5. Industrie- und Handelskammer zu Berlin (3,5%): the Chamber of Commerce and Industry of Berlin (CCI) is a mouthpiece for many companies, actively promoting Berlin as a place to do business. It acts in the best interests of
the business community as a whole and remains independent of individual interests and party politics. As a service provider, the CCI Berlin supports its approximately 268,000 members through its services and activities, without creating extra competition. As a business organisation, it takes the load off and supports the state by providing funding and organising public works itself, e.g. through vocational training and promotion of export. Some 3,500 voluntarily active businessmen and women in the plenary meeting, executive committee, boards and working parties as well as inspectors, assist the IHK‘s 200 employees. 6. Vereiningung der Unternehmensverbände Berlin und Brandenburg e.V. (UVB) (3,5%): the UVB is a social and economic organisation that acts in the whole region of Brandenburg. The main aim of the association is to grant a stable strengthening of the economic region of Berlin-Brandenburg, since an attractive and efficient location is an important precondition for the success of the members and of their companies. They coordinate and represent the interests of their members and are the contact persons for policy, administration, court, social insurance and media. As BDA - Landesvertretung der Bundesvereinigung der Deutschen Arbeitgeberverbände (Confederation of German Employers’ Association) and BDI - Landesvertretung des Bundesverbandes der Deutschen Industrie (Representation of the Federation of German Industries) they are committed to the interests of the regional economy at federal level.
5. Results Obtained This project began in 1994, when renowned companies joined together to found Partner für Berlin Gesellschaft für Hauptstadt-Martketing mbH in order to position Berlin as the new capital of reunified Germany in partnership with the State of Berlin. At the start, the number of founding partners were only 21. Currently, more than 200 partner companies participate in a public-private partnership to enable growth in Berlin, and this number is constantly growing. In addition, nearly 30 science institutions, key organisations and foundations also support this model, which leads the way for economic development in Germany. During the years, the results obtained thanks to the company have increased. They can be measured by different indicators. The most important is the number of jobs created and secured thanks to the project. Furthermore, the amount of investment and implemented financing has a central importance. In 2013, 258 projects have been implemented, whereas only one year before the number amounted to 162. Among them, 44 projects (17%) concerned the settlement of new companies, 80 (31%) expansion and 64 (25%) site support. The result is an amount of companies’ investments of 369 million euros, whereas 283 million euros were invested in the previous year. The majority was invested in cluster-supported projects. Due to those investments, 5,506 new jobs could be created, in 2012 they amounted to 5,513. About 60% of the new jobs were created by Berlin’s companies and it seems to demonstrate that the trend of the previous years will continue. This number includes 2,109 jobs created thanks to the settlement of new companies and 3,190 thanks to their expansion.
6. SWOT Analysis STRENGTHS •
• • • • • • •
Strategic geographical position of Berlin. Presence of strategic infrastructures (Berlin’s Central Station) and planning for creation of new ones (Berlin Brandenburg Airport (BER)); Proximity to federal ministries, embassies and other decision-making centers; Efficiency and positive complexity of the interdisciplinary approach; Creation of the preconditions for the construction of a smart city; Heterogeneous, international and cosmopolitan population of Berlin; Development of a network constituted by many different actors; Favorable factors for the implementation of projects in the sectors of energy, ICT and creative industry; Presence of a stable mix of crosscutting expertise about the entire value chain.
• • • • •
OPPORTUNITIES • •
Uncertainty in the forecast of the economic results of the project; Necessary preconditions very expensive to be implemented; Lack of decentralized solutions; There is still a lack of uniform standards for the industry; Still low level of collaboration and communication among partners.
Increasing opportunities for students, • universities and companies, due to the development of the entire economy; Opportunities also for other economic • sectors.
Costs for the implementation of projects are not necessarily covered by the good results obtained; Loss of opportunities due to positive results obtained by other realities that implement the project.
Conclusion Insufficient innovation is a major cause of Europe’s disappointing growth performance. Stimulating the European Member States’ innovation performance has become one of the main objectives of policy-makers. The aim is to achieve economic growth based on knowledge and innovation fostering high employment and delivering economic, social and territorial cohesion in Europe. Investing more into research, innovation and entrepreneurship has become a fundamental part of Europe’s strategy in order to find solutions against the economic crisis. Europe strives for strategic and integrated approaches to innovation to maximize the research and innovation potential on a regional, national and European level. Against this backdrop, the Commission adopted the “Innovation
Unionâ€? flagship initiative in October 2010 as an integral part of the Europe 2020 strategy. It sets out the innovation strategy for Europe to enhance Europeâ€™s capacity towards smart, sustainable and inclusive growth. The interest in clusters and networks bases upon the ever-increasing amount of statistical evidence that indicates a positive relationship between the presence of clusters and the prosperity of regional economies. Clusters take more and more the role of catalyst for supporting industrial transformation processes and for developing new regional competitive advantages. As a result, company growth and job creation lead to economic growth and prosperity. The results obtained with the implementation of the projects in the Brandenburg region demonstrate that the modernization of the industrial sector of the area, supporting the industries, creating synergies with different partners and realizing clusters, can cause very good outcomes for the economic growth and for the increase of employment. Hence, the creation of the right conditions for the implementation of similar projects can provoke an improvement of the general economic condition of a region.
GREEN ENERGY INNOVATION BIOMASS CLUSTER ROMANIA Introduction Biomass potential is enormous in Europe: in Austria, Germany or Sweden the use of biomass for clean energy significantly increased during recent years. Biomass is Romania’s most important renewable energy resource. Biomass is used in Romania mostly for thermal energy generation. According to a study conducted in 2012, more than 50% from the generated heat had as source forest biomass burning. On national level, biomass plays and will play an important role in the Romanian energetic sector. Green Energy Innovative Biomass Cluster acts as the framework for building regional, national and international economic relations particularly in the areas of biomass, use of wood waste and biomass based boilers. Green Energy Association is the association providing the management of the cluster. It was founded in May 2009, in Centru Region, in the town of Sfantu Gheorghe. Currently, it has 38 members representing biomass manufacturers and SMEs, local governments, research institutes and public institutions. The interest in using biomass for energy production has developed over the past years because of the multiple environmental and rural development benefits associated with their production and use. Sustainable development and preservation of environment has become one of the priorities of many of the companies and citizens of the world. Besides, generating electricity from oil shale, renewable energy sources – water, wind, wood, and biomass – are becoming significant alternatives to conventional fuels. Wood fuel is one of the most important sources of biomass energy. This is used in both large and small projects to produce electricity and heat. Greater efficiencies can be achieved when wood fuel is involved in small to medium scale projects on the local level. The use of wood fuel as a feedstock for biomass boilers for heating schools, social housing, hospitals, glasshouses and estates is currently the most sustainable market for wood fuel as this tends to use locally sourced wood which reduces the distance the fuel needs to be transported. The decoupling of economic growth and energy consumption has often been
defined as one of the main challenges European countries face today. A glance at Romanian development reveals the crux of this endeavour: while the energy intensity rose steadily, this did not lead to a decrease in energy usage, since the gross domestic product grew even faster. In other words: from 1995 to 2010, Romanian GDP grew by almost 64%, while the relative energy consumption plummeted close to 22% during that same period, resulting in an increase of 28% in gross domestic energy consumption.
1. Territorial scope Romania is committed to follow the European energy policy and trends to reduce dependency on primary resources imports, through increased use of renewables. The authorities seem to be more aware now that the development of biomass has been lagging in comparison to wind or solar technologies. Nevertheless, there is still lack of consistency and continuity in a long term energy strategy â€“ a National Biomass Action Plan is not recognized and is not implemented in practice, although several draft versions have been formulated. Effective studies and scenarios to evaluate the economic impact, environmental impact and the sustainability for biomass resources are still needed to back up a substantial biomass promotion policy, on short and long term as well. In the last five years, Romania has developed important strategic planning documents relevant for the renewable energy sector: a. the National Strategy for Sustainable Development, which promotes the production of electricity from renewable energy sources, indicating a requirement that the share of electricity produced from renewable energy sources in the gross electricity consumption nationwide is expected to reach 33% in 2020; b. the National Strategy for Energy Efficiency, with the main aim to reduce primary energy intensity by 40% until 2015 by reducing energy consumption, especially in the residential and industrial sector. The document concludes that the implementation of energy efficiency measures will increase the economic competitiveness of Romania; c. the National Development Plan for 2007-2013, in which the first priority line of action refers to stimulate a more competitive and knowledge-based economy and also to improve energy efficiency and using renewable energy to reduce climate change.
The cluster policy builds in this general framework, a new tool of regional development, which has created between 2010 and 2012 the first renewable energy clusters in Romania: Romanian Water (including geothermal) Cluster (North-West and Centre Development Regions), Romanian Cluster Towards Green Energy (South-Muntenia Development Region), ROSENC Romania (West Development Region), Green Energy – Innovative Biomass Cluster (Centre Development Region), and TREC – Transnational Renewable Energy Cluster in Cluj County (North-West Development Region). Clusters are promising and powerful instruments for the promotion of research and innovation and thus key for the creation of economic growth and job creation. Many studies around the world prove the positive effects of cluster activities on R&D investments, R&D collaboration and innovation. The fact that the return and profit on R&D investments are increasing with this economic policy instrument confirms that clusters offer a favourable and dynamic business environment which significantly increases competitiveness. In such favourable ecosystems innovative companies can develop by interacting with different innovation actors and across sectoral boundaries. The project of Green Energy Biomass Innovative Cluster covers the territory of Central region, within the cities of Brașov, Sibiu, Târgu Mureș, Alba Iulia, Sfântu Gheorghe and Miercurea Ciuc. Located in the middle of the country, Centru Region is also one of the most forested regions of Romania (forest vegetation covers 36.5% of the territory). With a volume of 4.4 million cubic meters of wood harvested in 2011, Centru Region is the second pool of forest harvesting in Romania and the first timber producing area. Covasna County, situated in the central part of Romania, is a small county with 3.705 km2; about half of it covered by forest. Preponderantly it has a rural character and a moderate continental climate. There are approximately 12.000 ha of unused land, part of which is situated near the Olt River. Due to these characteristics, there are favourable conditions for poplar and willow growing, sources of biomass. It would be possible to prepare about 500-600 ha of land in the county. This situation is also valid for the neighbouring counties as well (Harghita and Brasov). The possibilities are wide ranging: trees and woody plants, including limbs, tops,
needles, leaves, and other woody parts grown in a forest, creek bed cleaning, energy crop plantations could be developed on the fallow. Moreover, there is a significant amount of industrial and urban wood waste. In the Carpathian-curve testing is underway in the potential of power plant plantations. This provides a model for other business areas as well, but substantial logging is taking place, plenty of available wood waste and sawdust. Biomass production is not only a renewable resource, but also a significant opportunity for sustainable rural development. Biomass energy potential is about 7,594 thousand year, of which 15.5% is forestry residues and firewood, 6.4% sawdust and other wood waste, agricultural waste, 63.2%, 7.2% waste domestic and 7.7% biogas. Biomass is a source of material utilized throughout the year, and so the energy from it is always available. In addition to this, other benefits come in terms of environmental protection, ensuring sanitation territories, along with the production of significant amounts of clean energy. Besides, the use of biomass reduces global pollutant and greenhouse gas emissions. Moreover, consumers are protected against sudden and unpredictable changes in the price of fossil fuels and create new jobs locally for collection, preparation and delivery of material used. What is the biomass? Biomass is organic material made from plants and animals. Categories of biomass materials: • virgin wood, from forestry, arboriculture activities or from wood processing; • energy crops: high yield crops grown specifically for energy applications; • agricultural residues: residues from agriculture harvesting or processing; • food waste, from food and drink manufacture, preparation and processing, and post-consumer waste; • industrial waste and co-products from manufacturing and industrial processes. The main three areas in which waste wood arises are: Ø construction and demolition; Ø municipal solid waste; Ø commercial and industrial. Forest biomass on the other hand is any plant or tree material produced by forest growth. Much of the forest biomass is currently used as a raw material in
the manufacturing and refining of traditional types of wood products, such as lumber, plywood, paper, chemicals, and many other items. Specific types of biomass targeted for use in energy systems include: tops and branches of trees left after timber harvests, poor quality trees in managed forests and trees removed during land clearing operations. Wood fuel is one of the most important sources of biomass energy. This is used in both large and small projects to produce electricity and heat. For instance, in many coal fired power stations wood dust is mixed with coal and co-fired to produce electricity. Greater efficiencies can be achieved when wood fuel is involved in small to medium scale projects on the local level. Biomass combined heat and power (CHP) schemes can be as much as 85% efficient but there are currently only a few examples in the country. However, with major new housing developments planned this is unlikely to be the case for long. The use of wood fuel as a feedstock for biomass boilers for heating schools, social housing, hospitals, glasshouses and estates is currently the most sustainable market for woodfuel as this tends to use locally sourced wood which reduces the distance the fuel needs to be transported.
2. Area of application Biomass / Renewable energy / Wood waste as a source of biomass According to EU directive biomass shall mean the biodegradable fraction of products, waste and residues from agriculture (including vegetal and animal substances), forestry and related industries, as well as the biodegradable fraction of industrial and municipal waste (Directive 2011/77/EC). Types of biomass: • wood and wood waste; • energy crops from plantations; • agricultural products and by products: straw, hay, oilseed rape, dung; • bio-fractions of communal wastes and organic deposits from sewage treatment plants; • organic waste from paper industry. Thus biomass can be sourced from: • forestry; • wood processing industry;
• agriculture; • public utility companies; • paper industry. The specific objectives of the strategy for the use of renewable sources of energy regarding biomass are: • increasing available biomass for energy production; • feasibility studies for biomass energy different mountain area localities; • new technical solutions based on the combined use of coal and biomass, solutions adapted to local conditions, including rebuilding the existing energy production units; • promoting campaign for biomass energy; • stimulation of economic growth of less developed geographical areas; • promoting of new economic sectors, activities and employment. The challenges regarding the energetic use of biomass refer mainly to: • heating requirements which follow an ascendant trend; • increased pollution in the proximity of district plants which use fossil fuels; • increased proportion of unutilised sawdust; • increased proportion of small dimension wood processing residues; • chaotic storage of sawdust which generates environmental concerns; • plain zones having reduced forest resources and increased demands for firewood; • reduction of available fossil energy resources; • labour force deficit in thermal plants which generates the necessity to mechanise or to implement automatic feeding processes. Biomass is a local fuel. Its supply chain logistics, advanced harvest, storage and transportation systems bring economic activity and new jobs in rural or less developed territories. Renewable Energy Systems in Romania are generally well accepted by the public, while biomass for fuel concept is even better accepted and known by the Romanian farmers in rural communities. Nevertheless, the emissions, odour, traffic, visual impact may create a local resistance to some biomass projects. The involvement of local authorities, local businesses and local communities is required to build consensus on the most appropriate local solutions, including collection of fuels. According to the Directive 2009/28/EC of the European Parliament and of the European Council on the promotion of the use of sources from renewable energy (EP and EC, 2009), the Commission and the Member States should support
national and regional development measures in this area, encourage academic research and technology transfer of scientific research towards enterprises but also promote the use of structural funding in this area. The general direction of the new directive of the European Union on the use of energy from renewable sources is that each member state has to improve the energy utilization from renewable sources till 2020. This regulation foresees for Romania an increase of the utilization of renewable sources from 17.8% to 24%. In this context, important stakeholders have an increasing interest in projects dealing with renewable energy.
3. Type of Best Practice The strategic areas of the Green Energy Biomass Cluster are: - aggregation of SMEs; - industrial policy; - innovation and development. The global crisis was a catalyst for change, an opportunity to leap forward in a more entrepreneurial and innovative way. Clusters are a source of employment creation at regional/national level, being part of strategies to boost regional competitiveness and regional development. Indeed, clusters stimulate innovation, help companies to find resources, knowledge and technology and facilitate ideas to be turned into business opportunities.
4. Stakeholders involved Currently, the cluster has 38 members representing biomass manufacturers and SMEs (producers of energetic willow, entrepreneurs, biomass distributors, boiler and equipment manufacturers, distributors, biomass users), local governments, research institutes and public institutions. The aim is to promote renewable energy in the region: • representing members’ interests; • consulting, professional training; • implementing best practice; • organizing energy plant growing and selling; • cooperation with institutions and organizations; • strategy elaboration regarding renewable energy;
• • • •
attraction of financing sources; realizing information campaigns. create and develop a system of producing and using of renewable energy; organizational management.
5. Results obtained In the Central region there are boiler producers, and one million euro greenhouse is heated with biomass. In the city the sanitation company heats its site with collected wood waste. These are existing individual models, which may be promoted and an industry can be built on them. This train of thought led to the founding of the Association for Green Energy in May 2009, which can be better promoted as a group. The producers, manufacturers, users were already there, and they want to raise this activity to the next level. It was time to involve the research and development stakeholders, the public institutions, local actors, so they created in February 2011 the Green Energy Biomass Innovation Cluster. The purpose of the biomass cluster is to promote renewable energy resources in the region. The main activities are the following: • to represent its members; • to give counseling, professional training, exchange of experience • to organize the production and valorization of biomass (production, equipment’s, storing, distribution); • to attract financing sources; • to organize information campaigns, promotion. Green Energy Biomass Innovative Cluster in 2013 obtained bronze rating for management, from ESCA (European Secretariat for Analysis Clusters). Due to the important role in regional economic development and promoting opportunities in renewable energy, in 2014 the cluster joined the Transylvania Consortium of Clusters.
Green Energy Biomass Innovation Cluster manage the cultivation of energetic willow Fast-growing willow is a perennial crop farming cultivation for the production of wood used to heat.
Energy willow is one of the most effective strategies for replacing fossil fuels and to reduce emissions of greenhouse gases. It is a fast growing plant (ca. 3-3.5 cm / day), bringing in the first year 1-3 shoots and reaching 2-3 m tall. Due to its stability and quick growth, energy willow is the perfect ecologically natural solution for energy production in rural regions: • energetic characteristics of willow highly recommend its use for energy production as friendly alternative to fossil fuels; • the moisture content has a high influence on calorific value of energetic willow – after harvest the willow need to be dried; • the willow chips can be valorised in appropriate combustion installations (boilers): in Covasna district already exists a boiler manufacturing company (ERPEK Company) for biomass combustion; • positive results recorded after the first harvest of willow have led to the expansion of crop in an area of 70 hectares in Covasna County. The cluster identified the following priority areas requiring development of research: - extracting salicin from willow bark; - development of appropriate equipment for planting, harvesting energy willow; - development of new varieties of willow energy (getting three patents: 00348/2013; 00382/2014; 00347/2013); - testing willow cultivation in fallow surfaces; - development of energy willow shelterbelts around villages or in around households or around farm animals; - creation of energetic willow hedges near agricultural fields; - creation of willow plantations around landfills and wastewater treatment plants; - use of sludge from wastewater treatment plants as fertilizer on willow plantations. Another aim is to seek innovative solutions for the development of community heating with local renewable energy obtained from biomass.
Turnover of all operators account for approximately 450 million euros. Number of employees: 3200 people (2013) Examples of good practice, innovative solutions developed by Innovative Cluster
of Green Energy Biomass can be copied in other regions, therefore networking activities are very necessary and important. In fact, the cluster runs numerous promotional activities, participates in events, establishes partnerships and develops relationships with organizations with similar activities at national and international level, participating in national and international projects.
Research and innovation
In order to increase innovation, Green Energy Biomass Innovative Cluster is running two research projects: 1. Promotion of the technology for energetic willow (Salix Viminalis) cultivation in Romania as a green energy alternative source Partner: National Institute Of Research and Development for Machines And Installations Designed To Agriculture And Food Industry (INMA) 02.07.2012 – 30.04.2015 (34 months) Total value: 1772000 RON 1. Extensive valorization of lignin and salicyclic acid to bulk and fine chemicals (LIGSALCHEM) Partner: University of Bucharest; National Institute of Research and Development for Chemistry and Petrol chemistry; Organic Chemistry Centre “Costin D. Nenitescu” of Romanian Academy 2012 - 2015 (36 months) Total value: 700.000 EUR
Collaboration with other projects
In order to increase its visibility on a national and international level and in order to gain knowledge and know-how, Green Energy Biomass Innovative Cluster joins many events and projects of international scope: •
ID:WOOD - Clustering Knowledge, Innovation and Design in the See Wood sector, project funded by the European Commission under the Transnational Cooperation Programme for South East Europe;
PROMOBIO - Promotion of Regional Initiatives for Bioenergy, project funded by the European Commission under the Intelligent Energy Europe Programme;
Network ECREIN+ - European clusters and regions for eco-innovation and ecoinvestment network plus, initiated as a result of the Project and Network ECREIN (6 partners) by 12 European partners and coordinated by the Regional Council of Rhone-Alpes, France, funded by INTERREG IVC Programme;
Adriatic Danubian Clustering (ADC) – funded by the Transnational Cooperation Programme for South East Europe.
Cooperations and partnerships
Cooperations: - Bekes County Chamber of Commerce and Industry - Humboldt University from Germany - Energiesparverband Austria - Forstbaumschulen „Fürst Pückler” - Károly Róbert University from Gyöngyös, Hungary - Heves County Chamber of Commerce and Industry - Holland Alma Ltd, Hungarí - Kontrastwege Ltd. Miercurea Ciuc, Romania - Regional Development Agency Centre - P&P Baumschulen - Germany - Tisza Cooperative, Hungary - Zala County Business Development Foundation Partnerships: • RoEnergy South-East Europe • EnReg – Energia Regenerabila • GIZ – Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH • ArchEnerg – International Innovative Cluster for Renewable Energy and Building Trade
6. SWOT analysis The table on next page provides an analysis of the strengths, weaknesses, opportunities and threats faced by the use of biomass for energy in Romania.
STRENGTHS • • • • • • • • • •
intercommunal cooperation (not only) on matters of energy, waste & water management active private individuals engaging in governance processes on energy policies on the local level importance of tele heating good utilization rate and growth of manifold forms of biomass high popularity and installation rate of PV- and solar thermal-collectors not only, but especially among private persons existence of private financing models benefiting especially insulation and sanitation of private homes production and energetic utilisation at the same place good solution for energetic selfsufficiency weak grids, with reduced voltage under load, can be reinforced by the power injection; the produced power flow does not entail transmission costs, as this power is consumed within the distribution grid network; reduction of losses: generating the electricity close to the end-user reduces the electricity losses associated with the power transport biomass supply security
• • • •
• • • •
OPPORTUNITIES • • •
lacking cooperation between political authorities and enterprises strained budget situation in the communities low public acceptance of biomass energy no instruments to counter socioeconomic split in affordability of and European and economic measures fragmented production–large number of small farms variable supplies in consecutive years (differences in crop yield, growing other than cereal crops) special boilers or pre-furnaces are required technology suitable for relatively high heat demand
clear vision & goal definitions with • regards to renewable energy from higher administrative levels subsidies for residential buildings linked • to heating requirement of 36 kWh/a or • lower biomass, the mainstay of regional renewable energy generation, is a focal point of subsidy programs by the Romanian State new services of straw processing for a fuel (pellets) available combined with local distribution of such fuel improving technologies of combustion as well as bigger automation of feeding and combustion process
sometimes arbitrary and lengthy approval procedures for (small) biomass energy plant lack of coordination between regions global financial crisis potentially affecting power plant operators via credit requirements
Biomass supply security
The development opportunities of biomass for power technologies should be put in the context of the present biomass supply market, the power generation mix, the power market, the grid reliability and acceptance. The key obstacles to affect the supply security are: - the small size of many biomass producers in Romania, such as small private land owners and farmers; - fragmented land implicitly means fragmented raw material suppliers; - the uncertainty on farmerâ€™s business stability under unstable economic conditions; - the cost volatility of the biomass fuel. The financial arrangements of the cooperation mechanism should be flexible enough to be corrected if major changes appear on the biomass resources market. The production fl uctuation of agricultural and energy crops could be significant. Nevertheless, the forecast on biomass production, in comparison to other renewable energy systems variations forecast, gives much more time for corrective measures. Security of supply is one of the main barriers identified in case of large penetration of biomass projects. Even though the resource potential is proven, the lack of experience in managing the raw material chain is a serious drawback. The services for delivery and storage are not yet developed. Fragmented supply chain and insufficient infrastructure (rural roads) represent additional barriers. Not optimised supply chains could jeopardize the economy of bioenergy projects. Altogether, due to the small size of the biomass market and the fact that biomass waste streams are a relatively new commodity, the market is immature and unstable. In order to overcome these barriers improved harvesting, logistics and pre-treatment of biomass should be implemented. Furthermore, each project should develop a robust feedstock strategy, secure bankable feedstock contract providing long term certainty over volume, specification and price. The project developers may choose to own/control part of the biomass supply chain.
The operational costs with fuel account for a high share (up to 40/45%) in the total cost per unit of electricity. Once more biomass projects will be developed, cost
increases can be expected for biomass, as well as for the collection and transport. Such increases introduce uncertainty in exploiting unused biomass resources in terms of volatility of biomass prices. Therefore, in the economic calculations related to biomass projects in Romania it was considered that the biomass price will increase rapidly close to the European market average, within the first 3-4 years of biomass projects operation. This way, the biomass cost risk becomes related to the European biomass market and not specifically to Romanian market evolution. In any case, the financial arrangements of the cooperation mechanism should be flexible enough to be corrected if major changes appear on the biomass resources market, but the host country should still be able to guarantee profitability of the CM.
Deployment rate of technology
Many of the technological chains which produce power from biomass are mature, and it is up to investors to select competitive and viable technologies. Automation of biomass to power projects is high, required qualified personnel is minimal, most being involved in preparatory operations. So the implementation of power from biomass technologies in Romania may not be considered a problem. A rapid technology implementation rate was experienced e.g. for wind energy which reached in 3 years a capacity of 1200 MW, starting from a low base of 16 MW. As mentioned before, the deployment rate of the biomass supply industry is more concerning. Starting from the current low practice, the organization, machinery endowment, discipline of the whole supply chain may be a real barrier. Biomass projects ask for relatively high investments costs, up to 4,000 Euro/kW. Therefore a barrier may be also the deployment and attraction of capitals. As any other power technology, the installations making up a biomass power plant are complex and diverse. In order to accelerate the technology deployment, successful pilot projects should be promoted as best practices and become subject of replication. Biomass projects will be connected, due to their size, mainly to medium voltage grid (20 kV and 110 kV). Another specific is that the optimal location of the projects is close to the resources, therefore within rural or forestry areas. The direct costs are related to the cost of biomass electricity produced in Romania
and the electricity price on the Romanian market. The indirect costs relate to grid integration, environmental impact and cooperation scheme management. A quantification of indirect benefits is approached for the security of supply, power balancing on the market, job creation, and less carbon intensive power mix.
Conclusion Some of the renewable energy cluster initiatives are being led by regional development agencies. This is a positive example for other initiatives which have the aim of introducing the principles of sustainable growth into regional development documents. However, the failure in setting up these networks or in reaching their high expectations sends a clear signal that attempting to implement the principles of green growth will not provide a simple, economically advantageous means to addressing environmental issues through a regional development strategy. Unlike fl uctuating wind and solar power technologies, bioenergy offers dispatchable power generation, providing a significant competitive advantage for increasing its penetration into the generation mix. Moreover, as fl uctuating wind and solar continue to scale in Romania, causing utilities to focus on shoring up grid stability, bio powerâ€™s base load attributes are expected to become more attractive as a lowcarbon option.
Automotive South West Competitiveness Pole ROMANIA
Introduction On 13 January 2012, the Research - Development Cluster - Automotive Innovation South West Oltenia was established, through a partnership agreement between the South West Regional Development Agency Oltenia, the University of Craiova, Faculty of Mechanics, Ford and the Municipality of Craiova (founding members). On 1 August 2012, the Automotive South West Oltenia Competitiveness Pole was established, through subscription of 32 entities. This launch of the Automotive Cluster is the culmination of sector planning work and engagements that have taken place over the past years between public sector agencies, local government, suppliers, and other role-players in the province. Currently, the pole 36 members: manufacturers of automobiles and auto parts, design firms, educational institutions, research and development institutes, nongovernmental organizations, public authorities. The automotive sector is a highly strategic sector for the Romanian economy. The sector has important multiplier linkages to other sectors such as finance, retail, logistics, tooling and engineering, metals, chemicals, electronics, textiles and leather and capital goods. These multiple linkages need to be deepened and expanded for the benefit of the provincial economy.
1. Territorial scope The cluster covers the territory of South West Oltenia region, within the counties of Dolj, Olt, Valcea, Gorj and Mehedinti. The aim is to increase competitiveness in this region by developing an automotive pole with a wide spectrum of activities in the professional training of highly qualified skills necessary for Ford and its suppliers and by making new investments and technology transfer. Moreover, the cluster allows enhanced collaboration between the University of Craiova and automotive companies active in the development of joint applied research project especially in the field of electromobility in order to use the experience of regional R&D&I sector. Creating new jobs, improving skills and increasing competitiveness of the region by attracting investments in high added value
areas have become primary needs regarding regional economic policy. Local suppliers are facing unique challenges such as: - limited scale of production; - inability to deliver product of appropriate quality; - price and availability of raw materials; - access to finance for improving plant and machinery; - availability of skilled labour. The government and its development financial institutions have, on the other hand, to tailor-make financial products that take into account the needs of auto suppliers. Furthermore, the automotive sector globally is in transition. This transition is driven by a number of factors but is underpinned by uncertainty and risk. These risks and uncertainty are associated with: â€˘ the fragile global economic system - the 2008 global economic crisis and the crisis of finance as well as the sovereign debt crisis in the Euro zone; â€˘ environmental sustainability - global warming, carbon emissions, fossil fuel dependency and natural resources depletion - peak oil; â€˘ rise of Asia (China and India in particular) and the developing world in the global political economy as a significant player in production, consumption as well as increasingly R+D and design in the global auto sector. The development of clusters is the right formula in order to create opportunities for regional economic and social development. Clusters are known to be key factors for innovation and growth. They develop collaborative approaches and increase the number of interactions between companies active in different sectors. They represent an important instrument for creating more economical opportunities and making access easier to new group investment. The development of specific knowhow and the reduction of costs are also two results of the constitution of an efficient cluster. The constitution of a cluster is easier in this region because of the location of a huge number of industrial companies, despite the low level of innovation. Private companies, research institutes and policy makers are forced by the high level of economic competitiveness and the financial crisis to collaborate together. In line with the Europe 2020 agenda, the Regional Development Agency (RDA) South West Oltenia aims to develop a series of clusters in several key areas of regional interest, such as tourism, construction, automotive, agriculture and urban
services, uniform and sustained development of these sectors, thus offing a positive impact on the regional and national economy (ICT - Regional Competitiveness Pole Oltenia Cluster; Oltenia Tourism Competitiveness Pole; Asociatia Construct Cluster Oltenia). In the context of a competitive economy and a prolonged financial crisis, the development of clusters increases collaboration between private companies, educational institutions, research institutes and policy-makers, as a necessity and a structure of regional economic and social development. Automotive South West Competitiveness Pole is the regional cluster about cars and auto parts manufacturers. The purpose is to increase the number of skills in the mechanical, engineering, automotive sectors in the region. This will lead to sustainable support of the development of the urban growth pole by increasing the investment attractiveness of the area. This has positive effects across the region by: • increasing the number and skills of local suppliers in the automotive industry; • valorization and adaptation of the training potential of universities in mechanical engineering / automotive to business needs; • implementation of value-added services for enterprises in the sector; • facilitating access to resources: technology, information, customers, distribution channels, training; • increased rate of knowledge transfer; • reduce indirect costs of firms to increase market competitiveness through the support provided by the center through the offered services; • increased innovation in the field.
2. Area of application The manufacturing field of the pole is automotive, indeed manufacture of motor vehicles, trailers and half-trailers. A wide range of secondary companies depends on the main car manufacturer, Ford. These are the suppliers of: car parts, developers of automotive industry, other companies providing various services (web and solutions, commerce). The Auto Sector Cluster adopted a number of focus areas including the following: • strategic investments: offering competitive incentives for the international parent companies of the local government to increase their production for the domestic and international market; • logistics: reduction of costs through collaboration between parties to get competitive prices in shipping, road, rail and air; • supplier development: rationalization of local suppliers through joint
ventures, where possible, with global component suppliers; skills development: local universities encouraged and supported to develop programmes designed to meet the skills development needs of the auto sector.
3. Type of Best Practice The strategic areas of the pole of competitiveness Automotive South West Oltenia are: - aggregation of SMEs; - industrial policy; - innovation and development. Mission and overall objectives: • • • • • • • •
• • • • •
increasing competitiveness through joint participation in markets; ensure growth in overall volumes and jobs; representing the interests of the companies and of the higher education institutions of profile in the region; collaboration with national and international institutions, organizations, competitiveness poles, specializing in the automotive industry; collaboration with other national and international competitiveness poles, in order to create strategic partnerships; participation and/or initiation of research, development, innovation projects; joint participation in national and international projects, at national and international forums (conferences, fairs and exhibitions, economic events); identification and promotion, in collaboration with partners of similar structures from EU countries, in order to develop projects for the transfer of knowledge, best practices and for experience exchange; reporting opportunities on new sources of financing for projects of common interest; ensure that product quality meets world standards; identification of funding mechanisms for the proper functioning of the competitiveness pole; support for the accession of new members in the South West Oltenia Automotive Pole; collaboration with local, regional and central authorities, in order to ensure sustainable development of the automotive sector.
Strategic pointers: •
• • •
need to ensure sustainability of the cluster through a shared vision and strategy, a longer term resourcing strategy for the implementation of concrete programmes as well as the appropriate institutionalization of key initiatives; the need to ensure that longer term partnerships are built between the sector and higher education institutions in strategic focus areas in particular in skills development and R+D and innovation-related areas; the need to ensure that there are coherent and implementable plans for concrete interventions; the need to ensure the ongoing participation of strategic role players from the sector, government, state owned enterprises and organized labour; the need to ensure that there is appropriate back office support and systems, including information and knowledge co-ordination.
4. Stakeholders involved Economic practice has validated the model, known in the literature as “the triple helix”, which joins together, within a cluster, representatives of: • companies – representing the economic part of the cluster; • universities and research institutes; • local and regional public authorities, etc. However, in Romania, experience has proved that three natural partners of the “triple helix” model do not cooperate, do not know each other and do not discuss with one another. There is a need for adapting the model and for turning it into a “four clover” model, the fourth actor being the catalyst organizations – consulting companies, specialized in technological transfer and innovation, technological transfer centres. In the case of Automotive South West Competitiveness Pole: a. companies (representing the economic part of the cluster): Car manufacturers: - S.C. Ford Romania S.A. - Car manufacturer Manufacturers of car parts: - S.C. International Automotive Components Group LLC - manufacturer of car interiors; - S.C. Kichhoff Automotive Romania - manufacturer of parts for the automotive industry; - S.C. Altur Slatina S.A. - manufacturer of aluminum castings; - S.C. Novel Industry SRL - manufacturer of aluminum castings.
Manufacturers intending to develop the automotive industry: - S.C. Popeci Heavy Equipment S.A. - machinery manufacturer; - S.C. Indaeltrac S.R.L. - manufacturer of electronic and electrical traction systems; - S.C. Nextrom Industry S.R.L. - manufacturer of machinery and equipment for general use; - S.C. SPIACT Craiova S.A. - industrial production of centralization and remote control apparatus for railways; Other companies: - S.C. Craiova Industrial Park S.A. - industrial park; - RO Software House S.R.L. - software editing; - S.C. Avitech Co. S.R.L. - commerce of electronic and communications equipment; - S.C. Polystart Impex S.R.L. - construction of civil and industrial buildings; - S.C. RM Motors Company S.R.L. - repair shop; - S.C. Entrerriors Servicios Generales S.R.L. - metal constructions manufacturer; - S.C. Blue Neon S.R.L. - web services; - S.C. Aptus Software S.R.L. - web services and solutions; - S.C. Sondrio Impex S.R.L. - road construction works; - S.C. Tour Impex Mapamond MD S.R.L. - advertising activities, event organizing; - S.C. Cesi Automation S.R.L. - software editing; - S.C. Romsir Impex S.R.L. - plumbing and heating; b. universities and research institutes (representing the suppliers of innovative solutions, applicable to the real needs of the companies which are part of the cluster): - University of Craiova; - Dolj County Inspectorate; - Romanian Association for Technological Transfer and Innovation; - S.C. Caelynx Europe S.R.L. - design and computer aided engineering (CAE / CAD); - National Institute for Research, Development and Testing of Electrical Equipment; - S.C. IPA S.A. - R&D&I company in the automation field; - National Research and Development Institute for Textiles and Leather; - S.C. INAS S.A. - R&D institute for engineering and computer aided design; - S.C. Uranus S.R.L. - Research, development and production of industrial automation systems; c. local and regional public authorities: Craiova City Hall and Dolj County Council;
d. catalyst organizations: South West Regional Development Agency Oltenia, Olt Chamber of Commerce and Industry, Dolj Chamber of Commerce and Industry.
SMEs leadership is owned by Ford, core of the cluster. From the main car manufacturers depend the other secondary companies, which are the suppliers of: car components, developer of automotive industry, other companies providing various services (web and solutions, commerce). Furthermore, Ford is the representative company of the pole and the main partner in projects with other institutions. Clusters are geographic concentrations of interconnected institutions and companies from a certain domain. Clusters consist of a group of related industries and other important entities from a competitiveness point of view. These include, for example, specialized inputs (such as components, machines and services) suppliers or specialized infrastructure suppliers. Clusters often expand downstream towards various distribution channels and clients and sideways towards complementary product manufacturers and towards industries that are related to them by mutual qualifications, technologies or inputs. Finally, some clusters include governmental institutions and other types of institutions, such as universities, standardization agencies, think tanks, professional training suppliers and employersâ€™ associations, which ensure specialized training, education, information, research and technical support. The definition of a cluster can also be found in Romanian legislation (HG 918:2006 â€“ the Impact Program), according to which a cluster is a group of producers, users
and/or beneficiaries, aiming to implement best practices in the EU in order to increase the competitiveness of economic operators. The European Commission’s Communication COM (2008) 652/2008 “Towards world-class clusters in the European Union – Implementing the broad-based innovation strategy” defines a cluster as a group of firms, related economic actors and institutions that are located near each other and have reached a sufficient scale to develop specialized expertise, services, resources, suppliers and skills. The competitiveness pole is an association of companies, research-development and training organizations, which act in partnership in order to implement a joint development strategy. This strategy is built around innovative projects, its final goal consisting in approaching one or more markets. In order to ensure a longer term future for our automotive sector, the sector needs to remain competitive within the global automotive value chain. To do this, it is necessary to enhance value proposition through local human resources, develop world class logistics infrastructure and strengthen the local supply chain. International experience with clusters has shown that companies compete more effectively where they ottain collective efficiencies through being in close proximity to one another. These efficiencies occur naturally where local firms establish networks and co-operate organically. However, small component manufacturers are not always able to engage in these kinds of activities. Nor do they always realize the networking and collective outcomes resulting from such processes. It is here that a regional auto cluster initiative will provide a mechanism to enable these outcomes. Clusters enable stronger inter-firm relationships and more integrated supply chains. They also allow more effective and coordinated support from the array of public agencies. For clusters to be sustained, they must show visible and tangible results. The auto cluster is an apex programme, of particular importance within the overall industrial development strategy framework, ranking with other major national programmes. It lies at the core of public-private collaboration. In this regard, the government has committed to increase investment resources to ensure its success. In accordance with the Europe 2020 agenda, the Regional Development Agency (RDA) South West Oltenia aims to develop a series of clusters in several key areas of regional interest, because of their positive impact on the regional and national economy. In the context of a extended economic crisis the creation of clusters allows to increase integration among private companies, educational institutions, research institutes and policy-makers, in order to promote and support regional social development.
The Regional Development Agency South West Oltenia (RDA SW Oltenia) is a non-governmental, non-profit organisation, of public utility, established on 5 March 1999 according to Romanian Law No. 315/2004, regarding regional development in Romania. It is in charge of regional planning (Regional Development Plan 20072013 and 2014-2020), management of EU Structural Funds programmes in the region as an intermediate body for the Regional Operational Programme and the SME funding axis of the Competitiveness Sectorial Operational Programme and development of regional projects. As a regional planning organisation, it mobilises local and regional stakeholders in the elaboration of realistic and comprehensive socio-economic analysis and strategies for the region, encompassing all the relevant fields for territorial development: economy, infrastructure, innovation, human resources, education, environment. On 31 August 2012, the Agency submitted the strategies of Oltenia Tourism Pole and Automotive Oltenia Competitiveness Pole in order to obtain grants through the Sectorial Operational Programme increase of Economic Competitiveness - POS CEE, Axis 1. An innovative and eco-efficient production system, under Operation 1.3.1: Development of business support structures of national and international interest. After technical evaluation of development strategies, the two integrated packages have been approved for participation in Phase II of the process of submission, assessment and selection. The drawing up of the South West Oltenia Regional Development Plan involves various contributions from active regional stakeholders: local public administration, decentralized services, social partners, professional associations. The RDP approach is a participative one, consisting in a process based on partnership and public consultation. Counting and thematic working groups, tailored on priorities areas, have been established as follows: regional infrastructure; economic competitiveness, research, development and innovation; human resources, labor market and social services; sustainable development and tourism. The project proposes an integrated the field on approach, starting from an analysis of the potential and needs and continuing with formulation of models and scenarios. The last step is the identification of a strategic solution within an action plan to be implemented by including it into Regional Development Plan 2014-2020.
5. Results obtained The Automotive South West Competitiveness Pole proposes a development strategy focused on reducing the impact of the economic crisis and major changes in the automotive industry on local economic environment, promoting a clear message
to local and multinational companies and to those wishing to expand or locate facilities in Oltenia Region. The main objective of the strategy is to increase the competitiveness of the automotive sector by creating products, added value and innovation, the result being the growth of the summed turnover of the members of the competitiveness pole. The specific objectives of the competitiveness pole in the Oltenia region are: • facilitating generation of own products and implementing innovation in the existing ones by improving qualified human resources and fostering research and technology transfer, resulting in increased R&D; • improving the production processes by providing expertise and infrastructure needed to implement specific services for automotive manufacturers; • providing support for companies to access new customers and markets as well as for the marketing and internationalization activities in order to increase exports.
Turnover: 1.236 million lei / 280 million euros No. of employees of the pole’s members: approximately 12.000. Value of exports: about 50% of turnover. The emphasis of the cluster is to put in place interventions that deal with country and region specific constraints on competitiveness. While such interventions cannot deal with all country-specific dimensions, the cluster process will aim to put in place practical measures to deal with as many as possible. The supplier development service refers to increasing the skills of companies in the Oltenia region regarding supplies to companies in the automotive chain. The service consists of activities such as: • •
assistance in finding suppliers; consultancy for quality or cost-improving projects (job balancing, efficiency boost, delivery time reduction) consisting in: • reducing the defect rate; • reducing spare part costs; • reducing preparation costs at the processing centre; • increasing efficiency; • boosting customer satisfaction; • boosting employee satisfaction;
consultancy for the implementation of a continuous improvement system consisting in: • improvement techniques; • reducing the defect rate; • suggestions system; • consultancy in the implementation of a productivity system with the following elements: • visual management; • standardization; • equipment management.
In 2012, the development strategy of the competitiveness pole was elaborated, including actions, objectives and outcomes which are intended to be achieved over the next seven years. Regarding innovation, the specific actions within this strategy focus on the following aspects: • increasing innovation within the University of Craiova, especially in the Faculty of Electrical Engineering, Faculty of Mechanical Engineering and the Faculty of Automatics, Computers and Electronics, materialized by capitalization of their research in industry, by automotive manufacturers in SW Oltenia region; • concluding partnerships between the University of Craiova and Ford suppliers, for the joint development of innovative applications for the automotive industry; • increasing interaction between manufacturers, research and education centers, investors and consultants, NGOs and public authorities, so that research topics should have a closer connection with the specific requirements of the moment, on the one hand, and on the other hand, a shorter period of time for putting into practice products / technologies; • recognition of results of R & D & I obtained by the pole members within national and international scientific communities.
Impact of communication and media publications
At the present moment, there is a pole integrated package, which is composed of a total of seven projects. One of the projects aims at increasing the visibility and promotion of the competitiveness pole. Within this project a communication strategy was elaborated, which includes goals and concrete actions. Starting in 2011, until now, several publications have been made, with the purpose of informing the public
and stakeholders on setting the pole of competitiveness and its activity, as well as the major initiatives undertaken. These actions had the effect of strengthening both competitiveness pole by the admission of new members, and receiving cooperation proposals from several foreign entities on the achievement of certain services or presentation of partnership opportunities for future collaboration. After receiving this request, SW Oltenia Regional Development Agency, as the Management Entity of the competitiveness pole, disseminated this information to pole members. Some of these initiatives materialized by requiring direct meetings between them and the entities interested in future collaboration.
Partnerships and projects
South West Oltenia Automotive Competitivness Pole is part of the target group in the project CLUS3. The project is carried out within an international consortium, with partners from Spain, Italy and the Czech Republic. For this project implementation, funding was obtained from the European Commission, through the “Towards Word Class Cluster: Promoting Excellence Cluster”. The purpose of this project is the implementation of a strategic document regarding the excellence of some structures as clusters and competitiveness poles, which will be the base of development of the entities that are part of the target group of the project for their specific fields, and include a concrete action plan in this respect. Besides, starting on 1 April 2014, within the competitiveness pole there are implementing seven projects within the integrated package, submitted for funding under the Sectoral Operational Programme “Increase of Economic Competitiveness” Operation 1.3.1 “Development of business support structures of national and international interest”, Key Area of Intervention 1.3 - Sustainable Development Entrepreneurship, Priority Axis 1 - “An innovative and eco-efficient production system “ as follows: 1. Soft project: Coordinating and monitoring the implementation of the development strategy of the South West Oltenia Automotive Competitiveness Pole Applicant: South-West Oltenia Regional Development Agency Total value: 905.500 lei 2. Investment project: Construction of industrial plant and equipping with equipment necessary for production of vehicles driven by brushless electric motors powered with lithium-ion batteries for passenger transport Gentle Electric Applicant: SC Nextrom Industries S.r.l
Partners: SC Parc Industrial Craiova SA Total value: 21.464.506,56 lei 3. Research, development and innovation project: Industrial research and experimental development of vehicles driven by brushless electric motors powered by lithium - ion battery for Electric Gentle passenger transport Applicant: SC Nextrom Industries S.r.l Partners: SC Parc Industrial Craiova SA, University of Craiova Total value: 1.888.651,75 lei 4. Research, development and innovation project: Research for implementation of an advanced maintenance system for the automotive industry in order to increase competitiveness Applicant: SC Uranus S.r.l. Partners: University of Craiova, SC IPA SA, SC Indaeltrac SRL, The Dolj County School Inspectorate, Romanian Association for Technology and Transfer â€“ AROTT Total value: 5.729.771 lei 5. Research, development and innovation project: Project of virtual mechatronic and robotic applications specific to the automotive and transport industry Applicant: SC Avitech S.r.l Partners: University of Craiova, SC Aptus Software SRL Total value: 5.419.100 6. Soft project: Technical assistance and project consulting for the project package Gentle Electric Applicant: SC Nextrom Industries S.r.l Partners: SC Parc Industrial Craiova SA Total value: 1.080.000 lei 7. Soft project: Actions of visibility increse and promotion of activities of South West Oltenia Automotive Competitiveness Pole Applicant: SC Tour Impex Mapamond M. D. S.r.l. Partners: South- West Oltenia Regional Development Agency, SC Evobrand SRL Total value: 1.080.000 lei The added value of the integrated package consists in increasing competitiveness in South West Oltenia region, by developing a competitiveness pole in the automotive sector with a broad spectrum of activities both in professional training, formation
of skills necessary for high qualification required by Ford and its suppliers, and new investments, technology transfer and increased collaboration between the University of Craiova and companies active in automotive field for development of joint applied research projects, especially in the field of electromobility in order to use the experience of regional R & D & I sector.
South West Oltenia Regional Development Agency, as the Management Entity of the pole of competitiveness, maintains an ongoing collaboration with the members of the pole, constant collaboration includes transmission of information on existing innovation policies, potential collaboration opportunities, as well as information on accessing funding sources. The agency also organizes regular meetings with members of the pole, in order to gather information on the activities and needs of the automotive sector, support development of this sector. In addition, members are invited to attend various meetings and events relevant to the development of the automotive sector in the South West Oltenia region. A good example in this respect are the work meetings for substantiation of the “Study on the impact of implementation of SOP 20072013 in the South West Oltenia Region and preparing SOP implementation in the 2014-2020 programming period” held in October - December 2013. Among participants in these meetings were some of the members of the South West Oltenia Automotive Competitiveness Pole, having the opportunity to make several proposals that were subsequently submitted to the Ministry of Economy in order to be included in the funding priorities for 2014-2020.
Orientation towards innovation in SMEs
Innovation is an essential element for competitiveness of SMEs, and so has a direct impact on the development of the automotive sector in the South West Oltenia region. In this regard, SW Oltenia RDA constantly sends information to members and guests on pole attending events, meetings and similar forums of innovation. During these events business representatives come together with representatives of universities and research institutes, with the opportunity to lay the groundwork for future collaboration, designed to facilitate the implementation of R & D results into production, and linking the educational system to the requirements of enterprises in terms of manpower and personnel.
Integration in green economy
One of the priorities of the development strategy of the competitiveness pole is represented by a focus on projects with high growth potential, especially in environmental protection and sustainable development, in line with the objectives set at EU level, as electromobility. According to this priority, the investment project within the integrated package related to this strategy aims to build an industrial hall and provision of equipment necessary for the production of vehicles powered by brushless electric motors powered by lithium-ion batteries for passenger transportation.
Impact of the pole activity on the development of South-West Oltenia region
The creation of the South West Oltenia Automotive Competitiveness Pole developed a strategic partnership in the region between the South West Oltenia Regional Development Agency, Craiova Municipality, Ford Motor Company, SMEs, University of Craiova, Dolj County School Inspectorate, and other relevant public and private entities for the development of the automotive sector. This partnership aims to the close and permanent cooperation between the entities involved in the development component of CDI, CDI application results in production and correlation of the curricula with the demands of the labor market. To substantiate this collaboration, a strategy was elaborated, in August 2012, aimed at the development of the automotive sector for the next seven years, including a series of concrete actions and targets to be achieved in this regard. The integrated package of projects for the development strategy, which is under implementation since 1 April 2014, aims to achieve the following results: - 194 tangible / intangible assets acquired; - 25 R & D themes made at the competitiveness pole level; - 13 entities receiving advisory services; - 24 scientific publications; - 42 common actions held within the competitiveness pole; - 74 new jobs created in the pole assisted enterprises; - Increased turnover by 12%; - 22 events performed in order to increase the visibility of the pole; - 5 mentions of pole activity in the national media.
6. SWOT analysis The automotive sector is in transition, which presents both threats and opportunities for the province. The table below provides an analysis of the strengths, weaknesses, opportunities and threats that the sector is facing.
• • • • • • •
Romanian automotive sector - and the South West Oltenia Region in particular - is the springboard into Romanian manufacturing vehicles established automotive component manufacturing base entrepreneurship and stabilized workforce in the region good relations between industry, academic environment, R&D institutes and public administration competitiveness and innovation in the automotive sector research partnerships, improving university curricula programs and scientific publications professional skills of employees in the automotive sector emerging R+D capabilities at Universities in production support
• • • • • •
• • •
WEAKNESSES • • • • • •
increased demand in the entry level segment of the market reflected in the latest vehicle production results suggest that there may be more opportunities for meeting local demand economic development of the territory prevention of unemployment urban development of the regional area increase competitiveness developing collaboration with national and international organizations developing collaboration with local, regional and national authorities, in order to increase development in the automotive industry increase visibility at international level improve communication between consumers, manufacturers, educational institutions and public authorities increase regional cohesion between companies in the automotive industry
• logistics costs inefficiente intermodal transport system • (rail, road and air) energy cost firm-level skills technical and management levels effects of the crisis on component • manufacturing auto-sector one of the least transformed in terms of empowerment
structure of production internationally – scale platforms the negative consequences of critical capabilities linked to the autosector being disestablished by the consequences of the current global crisis increasing manufacturing capacity emerging in Asia, particularly China and India
Conclusion Creating new jobs, improving skills and increasing competitiveness of the region by attracting investments in high added value areas have become primary needs concerning regional economic policy. In the context of a competitive economy
and an extended financial crisis, the development of clusters represent a formula to increase collaboration between private companies, educational institutions, research institutes and policy-makers, as a necessity and a structure of regional economic and social development. The aim of the Automotive South West Oltenia Pole is to increase competitiveness in this region by developing a wide spectrum of activities in professional training of highly qualified skills. Another target is to enhance collaboration between the University of Craiova and automotive companies active in the development of participated applied research projects. The launch of the cluster constitutes a significant milestone in placing the auto sector in the province on a higher and more sustainable growth path. By 2020 the impact of the cluster should be felt in increased volumes, output, jobs and share of the global market. Having local presence and national resonance, the cluster will enable quicker, more strategic and responsive engagement between public and private sector role players. This will enable the identification and resolution of structural constraints facing the sector, as well as addressing bottlenecks if and when they arise. The initiative will allow the regional automotive cluster to brand and market itself to enhance sector investment and deepen linkages in local supply chains. It will enable the implementation of programmes across the sector, enhancing competitiveness as well as promoting greater levels of inter-firm learning and co-operation. The success of the cluster depends on the commitment of all sector role players, a results-oriented approach and a system of mutual liability.
CLUJ IT Innovation Cluster ROMANIA Introduction On 16 October 2012, the Cluj IT Innovation Cluster initiative was launched by establishing the Cluj IT Association, with the participation of 36 partner entities. Cluj IT is the largest cluster association active in the information technology field in Romania, comprising software developers and solution providers, academic institutions, public bodies and other catalyst organizations. The aim of the Cluster is to increase competitiveness and brand position IT Cluj and thus Romania as a leading software solutions provider in eastern Europe. The Cluj IT Association is a management entity, which coordinates the activities and projects undertaken within the Cluj IT Innovation Cluster. The headquarters of the Cluj IT Innovation Cluster is currently located in the TETAROM I Industrial Park (Str. Memorandumului, Nr. 28 Cluj-Napoca, Cluj 400221, Romania).
1. Territorial scope According to a recent research, Cluj-Napoca is among the most progressive cities in Europe. Some differences in the way various cities view foreigners have been revealed by a snapshot study into social attitudes. As stated by the audit of city life in the European Union, Cluj is the most tolerant place in Europe when it comes to welcoming foreigners to move to their city. 91 % of people in Cluj-Napoca believe foreigners are good for the city. The vast majority of people in Cluj know English very well. A large percentage of the population is trilingual, German and French being commonly spoken, apart from Romanian and Hungarian. 15% of the population of Cluj is Hungarian and 1% are Gypsies, which adds a multicultural spirit to the Transylvanian capital. Apart from them, as well as the Romanian majority, there are 500 Germans and 2,000 people of different nationalities currently living in Cluj. Furthermore, the city’s 11 universities offer a large variety of complete study programs in English, German and French. The establishment of the ICT cluster in the metropolitan area of Cluj-Napoca has been initiated in the framework of the regioNet sub-project called “Clusters and networks: development engines through increasing the economic competitiveness and innovation capacity of regions”. The role of the Cluj County Council in launching this cluster initiative was determined by the fact that the regioNet subproject is part of the SMART+ project funded by the INTERREG IVC, Interregional
Cooperation Programme of the European Territorial Cooperation, objective of the EU Cohesion policy. The total project budget was 299,700 euro, with an implementation period of two years (1 May 2011 â€“ 30 April 2013). The Agency for the promotion of innovation and technology transfer AGIL GmbH Leipzig from Germany is the project coordinator. The North-West Regional Development Agency and the Cluj Territorial Office of Small and Medium sized Enterprises and Cooperation are partners. The objectives of this project include: transfer of expertise in the management of networks and clusters; the promotion of cooperation between business, research and development institutions and public authorities from Saxony, Germany, Malopolska, Poland and Cluj County, applying best practices and establishing at the end of the project implementation period an ICT cluster in Cluj-Napoca. As a founding member, the Cluj County Council has the opportunity to participate in the establishment and development of the Cluj IT Innovation Cluster in order to foster cluster development through facilitating financing for projects that lead to the support of the establishment or development of enterprises and innovative activities that have a high potential for innovation. These actions support the overall economic development of the metropolitan area of Cluj-Napoca and of the North-West Development Region. Some enterprises from the cluster have branches outside of Cluj County and the location of the customers of these enterprises is not limited to this region. The main governmental objectives, through the Structural Funds 2007/2013 available for ITC, in order to increase competitiveness of Romanian companies, are: - increase the competitiveness of the Romanian economy, by encouraging the use of the latest information technology; - strengthening of the ITC industry; - increase of the institutional performance of the public administration by coherent and generalized implementation of integrated information systems. Among the founding members of the Cluj IT Innovation Cluster there are universities, which have recognized research structures. These are the BabeČ™-Bolyai University of Cluj-Napoca (BBU) and the Technical University Cluj-Napoca. Within BBU: the Economic Informatics Research Centre of the Faculty of Economics and Business Management; the Research Laboratory in Informatics of the Faculty of Mathematics and Informatics; the Department of Information Technology of the Institute of Technology; the Centre for Research in computer assisted Chemical Engineering
of the Faculty of Chemistry and Chemical Engineering; the Regional Centre for Topography, Cartography, Seismology and Geographic Information Systems of the Faculty of Geography; the Multimedia Laboratory for sports testing applied on computer of the Faculty of Physical Education and Sport. Two faculties within the Technical University Cluj-Napoca benefit from research units that are specific to ICT. In Faculty of Automation and Computers is a laboratory for PC Networks, an Image Processing Laboratory, and a laboratory for databases, a laboratory dedicated to distribution systems, a laboratory for logics and programming and the Reconfigurable Information Systems Laboratory. In the Faculty of Electronics, Telecommunications and Information Technology is a research centre dedicated to information technology in electronics, a centre for data processing and safety and a centre for Multimedia Technologies and Distance Learning.
2. Area of application The vision associated to creating a regional ICT cluster refers to promoting and sustaining regional ICT companies as players on the global market, generating their own products, under a strong regional brand. The main purpose of the Cluj IT Association is the planning and implementation of services and activities in order to promote and develop mechanisms for the support of companies and institutions from the ICT sector in order to increase their competitiveness nationally and internationally. The enterprises of the cluster have expertise in various economic domains and have developed products and services for areas such as financial services, automotive, retail, telecommunications, logistics, pharmaceuticals, manufacturing, mobile applications, the public sector, and social media.
3. Type of Best Practice The strategic areas of Cluj IT are: • cluster aggregation; • innovation; • research and development.
4. Stakeholders involved Cluj IT Innovation Cluster has a total of 36 members, including: a. public administration authorities: • Cluj County Council • Mayor of Cluj-Napoca
b. academic/research and development institutions based in Cluj-Napoca: • Technical University • UBB Babeş-Bolyai University • University of Agricultural Sciences and Veterinary Medicine • University of art and design c. catalyst organizations: • North-West Regional Development Agency • Cluj Territorial Office for Small and Medium Sized Enterprises and Cooperation • Transylvania branch of the Romanian Association for Electronic and Software Industry - ARIES • Transylvania Advanced Equipments and Technologies produced in Romania TETAROM SA • Steinbeis Europa Zentrum d. 25 founding enterprises from the ICT sector located in the metropolitan area of Cluj-Napoca. Turnover is approximately 68.3 million EUR. [Source: National Office of Trade Register] National and international organizations in partnership with the cluster: • Romanian Cluster Association (www.clustero.eu) • Association of European Capital of Culture 2021 Cluj Napoca • Association of European Youth Capital 2015 • German Outsourcing Verband • other 55 IT clusters in the world The Cluj IT Association operates on the entire Romanian territory and abroad. In order to achieve the expansion and representation objectives of the member entities branches in the country or abroad can be established with a minimum of three members, with their own management through a decision of the General Assembly of the Cluj IT Association.
5. Results obtained Objectives: • strengthen market position and stimulate exports by shifting the focus from software development and outsourcing towards building innovative products; • develop instruments that can support efficient processes for resources sharing
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among cluster members; build a chain of structures oriented towards a vertical market which allows the development of complex products; develop instruments that can support efficient processes for resource sharing amongst cluster members; facilitate financing of R&D projects, either through private investment or private & public partnerships; increase the number of highly skilled human resources by strengthening collaboration with educational institutions and achieve higher ROI for training activities; increase the involvement of Cluj IT member-companies in large international projects by expanding the network of partners; foster innovation in processes, products and services, aiming to increase competitiveness in international markets; create a collaborative culture based on trust and reliability; promote Romanian IT solutions and services abroad and become known as a center of excellence in IT rather than a “cheap offshore destination”; forge strong and long lasting partnerships for the mutual benefit of members and society in general; support the possibility for Cluj IT companies to work on large international projects.
Cluj IT Cluster was founded as an innovative organization and comprises: • • • • • • •
25 companies with 3700+ employees and 100+ mil EUR export revenue; 4 universities, 85000+ students 7 public institutions and catalyst organizations 4 continents covered by our direct deliveries 500+ IT graduates each year 15+ years of experience in delivering IT solutions 15% average yearly growth.
In virtue of the creed stated in the regulations of the Cluj IT Cluster association, the primary goal is to offer innovative IT solutions for the community, based on a collaborative input of know-how and advanced (even avant-garde) skills, gathered from all the knowledge and expertise provided by agents. The Cluster seeks to have a positive and important social impact. It will grow only to the extent that its members feel that all are being well served.
Concerning the existence of the partnerships to develop networks, the launch of the cluster initiative benefited from trans-national partnerships built in the regioNet project. This project has taken into consideration best practices on ICT cluster development, being considered examples from Silicon Valley, the Luxembourg ICT cluster or the Barcelona Digital ICT cluster. The associative organizational form of the Cluj IT Innovation Cluster has been inspired by the cluster organization of Barcelona Digital. The Barcelona innovation district and the Skolkovo Innovation Centre are references for the development of Cluj Innovation City. It is also noted the role of ARIES Transylvania in the development process of joint projects between the enterprises of the cluster. There are companies which have important shareholders from abroad (e.g. Arobs), there are companies which have opened offices in Silicon Valley (e.g. in 2012 IQuest opened an office in Palo Alto, in order to support its extension strategy to international markets) and companies that are subsidiaries of foreign companies (e.g. Endava, Recognos, ISDC). All these aspects favouring the building of international business partnerships. Although the enterprises of the cluster are SMEs, Cluj IT Innovation Cluster still enjoys the presence of the majority of the most important software development companies in this region. The majority of these companies have developed from the level of micro enterprises. There is a consolidated experience in providing IT outsourcing services and products to national as well as international customers. The enterprises of the cluster have capabilities to cover the value chain in their field of activity from business analysis, product or service realization, implementation, maintenance, project management and communication, research and development capacity.
The focus of Cluj IT Innovation Cluster is on finding resources for innovation so that companies become gradually less dependent on outsourcing. This is why it places a lot of emphasis on the collaboration with universities and any other milieu which can facilitate this kind of leap for the organization. Another important topic is related to the scarcity and quality of human resources needed for the industry. Cluj IT is working with the universities in the cluster (the main providers of qualified human resources) and with high schools and schools. The aim is to improve the programs the universities are offering and raising awareness among young people about the opportunities the industry offers. Another direction is internationalization of business, by trying to connect to mainstream in Europe by placing Cluj and the IT industry in general in Romania as a specialized hub in this geographical area.
Communication impact and social media
Official website: www.clujit.ro Official Facebook page: www.facebook.com/ClujITClster Official LinkedIn page: www.linkedin.com/company/cluj-it-cluster Official Twitter page: https://twitter.com/ClujITCluster On 14 November 2012, in Bucharest, the first meeting of the Strategic Council of the Cluj IT Innovation Cluster was held. This event allowed to launch at national level this ICT cluster, as an important step in the development of the metropolitan area of Cluj-Napoca as the IT pole of Romania. The event was attended by many actors from the economic and political domains. A major current concern is to
identify a field to provide space for long-term development of the cluster. On 20-21 March 2013, the forum “Cluj IT Innovation Days” was held in ClujNapoca, the first regional event in the field of ITC, only six months after the establishment of the cluster. It was organized in partnership with the City of Cluj-Napoca, Cluj County Council and the American Chamber of Commerce in Romania in order to strengthen the local IT community and facilitate links with partners in international business. More than 80% of IT companies in Cluj provide services to western countries, especially the United States, Britain, Germany, Canada, Scandinavia, China and Japan.The event took place also in 2014 with the same organization and purpose, hosted by the University of Agricultural Sciences and Veterinary Medicine in Cluj-Napoca. On that occasion, the European Commissioner for Agriculture and Rural Development, Dacian Cioloș, stated that the Cluj Innovation City project is perfectly suitable for the new European policy enabling the realization of connections between various fields.
Projects ruled by Cluj IT Innovation Cluster
Cluj IT is continuously taking new steps in its development as an innovative cluster. There are developing partnership projects between the universities and the enterprises of the cluster. The universities have an important role in the formation of this cluster initiative as they have expressed the demand that the business community articulate a single voice so that universities can adapt more easily to the requirements of the labour market. One of the joint projects of the companies from the Cluj IT Innovation Cluster and universities is aimed at the development of internships (so called joint trainings), for a period between two weeks and three months of practice. Another course of action is related to the preparation of the diversification of the curriculum of universities in order to adapt to the needs of the labour market. The universities from the cluster are already working on the development of alternative solutions, such as retraining programs for graduates in order to improve their skills. Other projects concern the improvement of IT skills of High School graduates, so preparing them for ICT labour market opportunities.
6. SWOT analysis The following SWOT analysis for Cluj IT Innovation Cluster points out strengths and weaknesses of the destination, as well as opportunities and threats.
STRENGTHS • • •
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highly skilled and motivated human resource low wage structure initiatives taken by the Government (setting up Hi-Tech parks and implementation of e-governance projects) following Quality Standards such as ISO 9000, SEI CMM etc. cost competitiveness increasing quality telecommunications infrastructure increasing usage of Hi-Tech solutions in the business community internationally recognized and award winning software products on IT services still competitive labor costs ideal geographic location to collaborate with EU countries and the CIS countries good education system generating more than 5.000 IT profile graduates per year in Cluj large pool of extremely efficient multilanguage speakers workforce mobility and flexibility
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OPPORTUNITIES • • • • •
absence of practical knowledge lack of suitable candidates contribution of IT sector to Romania ‘s GDP is still rather small employee salaries in IT sector are increasing tremendously low wages benefit will soon come to an end high cost for internet and phone infrastructure low productivity but steadily increasing per employee compared to regional competitors insufficient found absorption capability of the IT industry due to low demand and lack of entrepreneurship no marketing and brand building strategy limited incentives in stimulating local IT industry and R&D&I lack of specialized management capabilities in the IT industry: no relevant training in place insufficient match between education curricula and IT industry needs limited understanding of the importance of the certifications, process management, standards
high quality IT education market increasing number of working age people Cluj ‘s well-developed soft infrastructure upcoming International Players in the market growing domestic demand for complex IT solution- enabling the development of competences and internationally successful products growing demand in Middle East for IT services and software products cultural proximity and understanding is a great asset
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lack of data security systems countries like Romania with qualified workforce making efforts to overcome the English language barrier IT development concentrated in a few cities only (Cluj) growing labour cost on medium and long term lack of relevant market information and market analysis capabilities no consolidated/result oriented marketing and branding programmes for Cluj IT strengthening regional competition among traditional and emerging IT exporters
growing world market demand for BPO, IT enabled services and development outsourcing growing competition on fixed and mobile communications market will encourage quality and lower service costs growing number of IT clusters: Bucharest, Timisoara, Cluj-Napoca, Galati great potential for e-commerce market
Main objectives of Cluj IT Innovation Cluster for the period 2014-2020 are: a. extend into new service lines; b. tap new and under penetrated customer segments; c. move up to the value chain from maintaining and implementing outside orders to implementing and designing creative solutions, customer tailored and from piece parts to full projects; d. IT national brand.
Conclusion Innovation has become the driving force of global competitiveness. It is assumed that without innovation there is no success in history and vulnerability to globalization and crisis (resources, population etc.) increases. Therefore, innovation is the responsibility of all governments whose countries aspire to global competitiveness, implicitly of the EU and of Romania. Because Europe is at a time of global transformation that leads to a number of concerns for its own future, the focus is on the strategic role and joint effort of the regions to overcome the crisis and structural weaknesses in a convincing way, to contribute to turning the EU economy into a smart, sustainable and inclusive one, to build a structure based on knowledge, protected environment and cooperation between peoples. Among the key success factors analyzed are: a. partnerships to develop networks, b. innovative technology; c. human capital; d. physical infrastructure; e. presence of large enterprises, market and technology leaders; f. entrepreneurship; g. access to finance.
Analyzing the development process of the Cluj IT Innovation Cluster, we can remark the following conclusions and implications for the business management or policy: • the role of universities in the launch of the cluster initiative, which have expressed the need for structuring the demand from businesses; • the importance of public funds (structural and government funds) to launch and support the cluster initiative; • the importance of catalyst organizations for the launch of the cluster and for facilitating interaction between the three institutional spheres; • the importance of good practices in the development of cluster initiatives in the ICT sector (Silicon Valley, Skolkovo Innovation Centre, Information Technology Cluster of Skolkovo, the Luxembourg ICT Cluster, the Barcelona Digital ICT Cluster) for the development of the Cluj IT Innovation Cluster; • a combination in the development objectives of the Cluj IT Innovation Cluster of the objectives aimed for the development of cluster specific infrastructure and the objectives aimed for the development of cooperation projects.
In the current multi-annual budget framework of the European Union it is expected that the IT sector in Romania could attract a sum equal to or even larger than one billion euro, resources that stem from European funds co-financing, as well as the business environment and the state budget. These investments can be maximized through a government strategy in the 2014-2020 Digital Agenda, using the IT Cluster in Cluj as an example. Investments will continue, due to the fiscal and
legislative framework which is extremely attractive, but also due to faculties in the field preparing ITC specialists at a level that is considered high. In this framework, Cluj IT Innovation Cluster is to become the biggest innovation hub in eastern Europe, a focal point for both mature and new companies that are looking to develop new, value-added technologies in a variety of fields. Cluj IT will be more than just a business concentration. It will become the new standard for the development of new business, new institutional, cultural, and educational concepts, all of which centered on technology.
OLTENIA TOURISM - Innovation and Tradition in Tourism ROMANIA Introduction Oltenia Tourism - Innovation and Tradition in Tourism - TorOlt InoTT pole was created on 30 August 2012 and includes 66 members. The general objective of the Oltenia Tourism pole is to increase the tourism sector competitiveness in south-west Oltenia by creating a unique regional brand and tourism product innovation. The final aim is to improve Oltenia’s position as a tourist destination, both nationally and internationally, by 2020 and to increase tourism by 15% until reaching a share of 50.000 tourists per year. After several years of rapid and almost unhampered growth, the global economic landscape is changing. The international financial crisis and the related slowdown of the world’s leading economies led policymakers to face new economic management challenges. The impact of the global economic crisis has been felt throughout the European industry and tourism as well. Today’s economic volatility emphasizes the importance of supporting a competitive environment, as it would help national economies to weather these kinds of shocks, leading to solid economic performances in the future. Tourism – a cross-cutting sector linked to various economic activities, services and professions – impacts on sectors such as transport, construction, retail and those which produce holiday products or provide leisure and business travel-related services. Although some big international companies contribute to contemporary tourism, it is mainly dominated by SMEs. Key drivers of global change within the external environment can be classified as economic, political, environmental and technological. The changes that are taking place in the global tourism industry present both challenges and opportunities for public and private sector organizations all over the world, as they seek to achieve an innovative and sustainable tourism industry. Local and nonlocal networks have been considered of utmost importance with regard to innovation activities. Data, information and knowledge (vertical and horizontal) dissemination and dispersion, provide firms with the ability to offer additional production benefits. The network plays the role of providing an environment of trust and common understanding
1. Territorial scope Today, tourism has become one of the largest industries in the world. Romania is forecasted to increase its travel & tourism demand fourfold by 2018, thanks to
an annual growth rate averaging 7,1%. While the mass tourism market remains fundamental for the economic growth of many destinations, the new challenge for the tourism decision making is to choice to support conventional mass tourism activities or to create the conditions for the development of new local tourism supplies. The main factors which contribute to this phenomenon are: • the geographical proximity between these areas allowing low travelling costs and less time spent in transportation; • accessibility options regarding both means of transportation and distribution channels; • tourism product diversification allowing tourist to choose from a wide range of tourism services and goods within the same destination; • numerous tourism attractions – such as sights or events – accessible in Romania. A particular concern is that, in many destinations, there are SMEs, organizations which tend to be knowledge averse. Therefore, public sector intervention is essential in order to establish cooperative frameworks and networks at the destination level. Oltenia region, historical province located in south-western Romania, covers about 29.212 square km. Oltenia’s counties are Dolj, Olt, Valcea, Mehedinti and Gorj. Since 1990 all governments have included tourism development in their strategies, although at present, the contribution of tourism to Oltenia’s GDP is just 2-3%. According to data presented in the Regional Operational Program 2007-2013, more than one third of all European mineral water springs can be found in Romania, one of the founder countries of SPA tourism. Today it counts almost 160 SPA resorts. Moreover, south-western Oltenia covers 201.302 ha of protected areas (14% of Romania’s protected areas). The main objectives of the Romanian government for the tourism sector are: a. to increase tourism circulation in the Romanian territory; b. to diversify and improve tourism services quality. Some of the main actions, in order to capitalize national tourism potential as stated in the official policy, aim at the following: • definition and promotion of a national tourism brand that will attract both consumers and investors; • tourism and general infrastructure development; • cooperation between government and the private sector to promote cross border
investments, improve tourism training and protect the natural environment; improvement and financing tourism educational institutions (tourism high schools, specialized university programs, research centres); use of information technology to promote tourism.
Regional priorities for tourism development are the following: a. to modernize and develop tourism infrastructure; b. to support the enterprises in the tourism field; c. to raise the region’s visibility to develop the regional marketing; d. to develop the human resources in touristic sector. Social sustainability implies involvement of the local population. Therefore, being tourism an intensive sector in terms of services, there would be positive effects for the job market. The workforce in Oltenia region is under-qualified, but professional reconversion can be undertaken with particular regard to women’s inclusion in the workforce. Tourism provides not only part-time jobs, but also positions which require technical skills and managerial training.
2. Area of application The pole of competitiveness deals with the increase of the tourist potential through identification of the economic units, the needs, the priorities and the economic perspectives of the region. It aims to ensure a functional partnership between regional factors through the supply of adequate promotion and formation services, as well as to improve access to services for SMEs. It includes the attraction of finances for projects with innovating features, in order to support and uniform tourism development in Oltenia. Moreover, it aims to promote capacity of innovation, competitiveness, research, technology transfer as a sustainable regional development policy through the interconnection of knowledge, technologies and persons. Taking into account the European Agenda 21, sustainable tourism involves three stages: social sustainment, ecologic sustainment, economic sustainment.
3. Type of Best Practice The strategic areas of the Oltenia Tourism - Innovation and Tradition in Tourism Pole are: - regional development; - SMEs aggregation; - innovation and development.
4. Stakeholders involved The pole has a total of 66 members: a. Companies: • SC Beladi SRL • SC Alpha Quark SRL • SC Lattanzio e Associati SRL • SC Magnum SRL • SC Tils Romania SRL • SC Hardrom Mdf • SC B&V Com SRL • SC Anmicri – Agentia Kristiana Tour • SC Happy Holidays SRL • Manufactura Hurezeana • SC Simona SRL • Iliescu I. Sorin I.I. • SC Australis Prod SRL • SC Horezu Prim SRL • SC Forestale SRL • SC Bdm Soft Solutions SRL • SC Blue Neon SRL • SC Cristflor Construct SRL • SC Marbiconsult SRL • SC Tour Impex Mapamond Md SRL • Ceramica SCM Horezu • SC Calimanesti-Caciulata SA • SC Baciul Vaideean Societate Cooperativa • SC Business Maker SRL • SC Geumacs Consulting SRL • SC Nobil travel SRL b. Universities: • University of Craiova c. Public authorities: • Craiova City Hall • Dolj County Council • Novaci Town Hall • Targu Jiu City Hall • Eselnita Hall
Calimanesti Town Hall Horezu Town Hall
d. Education units: • Dolj County School Inspectorate e. Catalysts: • South West Regional Development Agency Oltenia • Dolj Chamber of Commerce and Industry • Olt Chamber of Commerce, Industry and Agriculture • DoljCounty Council • Craiova City Hall • Novaci Town Hall • Targu Jiu City Hall • Eselnita Hall • Calimanesti Town Hall • Horezu Town Hall f. Museums: • Craiova Museum of Oltenia • Gorj County Museum • Museum of the Portile de Fier Region g. Associations: • Association for Information Technology and Communications of Romania • Romanian Association of Ceramics Centers • “Cocosul de Hurez” Craftsmen Association • Regional Association for Rural Development • Association for Promoting the Genuine Heritage in Horezu • Horezu Basin Association • Dominou Association • A.N.T.R.E.C. Mehedinti • Tourism Promotion Association Mehedinti – Turinn Cluster • The Gorj County Center for Preserving and Promoting the Traditional Culture • The Constantin Brancusi International Center for Arts and Creation • R.N.P. Romsilva – Portile de Fier Natural Park Administration R.A
The main catalyst of the pole is the South-West Oltenia Regional Development Agency, which supports the creation of the pole of competitiveness in the region. The Regional Development Agency South West Oltenia (RDA SW Oltenia) is a nongovernmental, non-profit organisation of public utility, established on 5 March 1999 according to Romanian Law No. 315/2004 which regards regional development in Romania. The mission of South-West Regional Development Agency is to attract resources from outside the region, as well as to enhance the use of local resources in order to improve quality of life and social cohesion of local communities in Oltenia. As an intermediate body for the Ministry of Regional Development and Tourism, the Agency manages the funds allocated for the region in the fields of transport infrastructures, tourism, business support infrastructures and services, social services and urban development. As far as regional projects are concerned, the agency acts as leader or partner in large scale projects, contributing to socio-economic development of the region as a whole. On 31 August 2012 the Agency submitted the strategies of Oltenia Tourism Pole and Automotive Oltenia Competitiveness Pole in order to obtain grants through the Sectorial Operational Programme Increase of Economic Competitiveness - POS CEE, Axis 1: An innovative and eco-efficient production system, under Operation 1.3.1: Development of business support structures of national and international interest. After technical evaluation of development strategies, the two integrated packages were approved for participation in Phase II of the process of submission, assessment and selection.
The project proposes an integrated approach in the field, starting from an analysis of the potential and needs and continuing with the elaboration of models and scenarios. The last step is the identification of strategic solutions within an action plan to implement through its inclusion into the Regional Development Plan 20142020. Before the end of 2014 Romania will be the first country in the world to create a cluster for young people, as they represent one third of all global tourists. Moreover the World Tourism Organization (UNWTO) in Baku - Azerbaijan, proposed the development of a European model of clustering in the tourism industry, so as to render tourism promotion and supporting activities consistent.
5. Results obtained In order to increase the competitiveness of tourism in south west Oltenia, the overall objectives of the project are: Development, modernization and maintenance of relevant infrastructure; • defining the identity and the regional tourism brand and promoting the pole; • development of innovative marketing tools and creation of tourism products; • use of natural resources and sustainable tourism development; • development of training and qualification on topics relevant to the tourism sector, in terms of stabilizing and expanding the labour market in the tourism sector; • improvement of the organizational capacity and the capacity to access funds and implement projects by pole members; • establishment of effective structures for multi-stakeholder participation, both in setting the direction for tourism in the community and in working together to develop and manage it; • promotion of sustainable tourism within the context of a wider sustainable development strategy which reflects stakeholder’s views and allows tourism management to be integrated with other management functions in the destination. Reasons for establishing the cluster: 1. consolidating and promoting regional identity and defining a regional tourism brand, by highlighting local particularities; 2. improving the capacity to promote and inform on the offer of tourism products and services, including by developing new tourism marketing tools to attract more customers and to expand the market share of the operators in the region;
3. improving the business environment through infrastructure development and conservation of the built environment, including: - infrastructure for business support and management consulting services, such as: exhibition spaces; production facilities and equipment â€“ especially for small local craft producers and other light industries related to the tourism sector; meeting rooms and for organizing other events; - access infrastructure to tourism destinations; - museum structures, buildings and historical monuments; - traditional rural architecture. 4. innovation of products and tourism services: - development of integrated tourism packages; - dissemination of ICT in tourism; - upgrade of production processes in the traditional crafts sector; 5. improving and preserving the environment: - oppose the degradation of environmental factors; - rehabilitation of industrial sites; - preservation and utilization of natural resources for tourism purposes. 6. development, improvement and (re)training of staff skills and increasing employment opportunities in the tourism sector; 7. improving the operating capacity and the capacity to access public funds for implementing specific development, modernization and innovation projects by the organizations and structures.
1. Real impact Turnover (aggregate): 60 million lei (2011) No. of employees (aggregate): approximately 6000 (total number of employees of the poleâ€™s members) Value of exports (aggregate): 7-8% of the produced value The valorisation of tourist attractions existing in different areas of the region, mainly by encouraging the creation and development of local enterprises, contributes to economic growth in deprived urban areas and converting areas with low economic competitiveness into attractive areas for investors. Economic sustainment involves economic development of the region (infrastructure, foreign direct investments, creating new jobs), therefore it would have a positive impact on tourism for the region. Competitive enterprises which use the available manpower and local resources generate economic welfare and an increase in inhabitants income.
6. SWOT analysis The following SWOT Analysis for south-western Oltenia tourism points out strengths and weaknesses of the destination, as well as opportunities and threats.
STRENGTHS • • • •
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valuable natural potential, in both national and international context favourable geographical position cross border region diversified touristic resources: protected areas, natural parks, mountains, caves, unpolluted rural areas, minerals, watering places, fishing and hunting, cultural heritage, flower natural reservation presence of many touristic objectives: Defileul Jiulu, Defileul Oltului, Defileul Dunării, Cheile Oltului, Porțile de Fier, Cheile Sohodului, Topolnița Cave, Ocnele Mari second region in Romania in number of old monasteries of great significance 201.302 ha of protected areas (14% from the total protected areas in Romania) folklore and traditions, traditional cuisine, eco-products grown interest for agro-tourism cultural and historical vestiges in the region good access for transportation national and international routes (E70, Bucharest -Timișoara highway, the Danube river) the Danube River is a main resource for industry and tourism development
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OPPORTUNITIES • • •
the contribution of tourism sector to Oltenia’s GDP is very low, about 2-3% almost inexistent marketing strategy for the local tourism, or sustainable tourism: the Romanian brand is not well known at the international level lack of modernized access roads to the many tourist objectives and areas inadequate tourism offer in terms of comfort and services at local level lack of marketing materials for local tourism attractions deficiency and low standard level of tourism and recreation infrastructure few cultural and tourism events lack of capital investments oriented towards tourism targeting population with low incomes delays in private funding of tourism utilities insufficient advertising and tourism branding lack of basic infrastructure in rural mountain areas (running water, waste management) underdeveloped infrastructure for access to the sights lack of adequate depositing and recycling spaces in touristic areas
promotion of Romanian tourism at the • international level due to the integration in the European Union diversification of the supply of tourist services improvement and efficiency of the • planning and programming process of using the community funds in the South West Oltenia
tourist resources deterioration because of inadequate exploitation and development of other forms of competitive economic capitalization (industry, agriculture) building a negative image over the objectives in the cross-border region as a result of an unsatisfied tourism request
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know-how transfer and good practice exchange expanding, renewing, developing waste management, waste water, energy, considering the new sustainable solutions available and appropriate for the region attraction of private investment for at least 2-3 international hotel chains which would secure internationalization adapt the research, innovation and technology requirements to the real needs of the business environment in the field of tourism new forms of touristic packages can be created, being targeted new or complementary consumer segments, such as eco-tourism implementation of a national database with information of interest, establishing a national system integrated with online access, collection and distribution of travel information supporting agro-tourism facilities for investing and providing eco-food possibility of cruises along the Danube ecological reconstruction through tourism of habitats, affected by other forms of economic exploitation like agriculture increased interest in the research and innovation activities related to tourism good prospects for rural tourism development in isolated areas possibility of exploring natural parks and protected areas as touristic resources, protecting the environment in the same time (eco-tourism) possibility of reducing the seasonality of demand, through developing more creative offers start up the functional mechanisms through which the tourism actors, the SMS companies have more and more rapid access to the result of researches
• • • • • • • • •
low level of competitiveness for regional tourism offer in comparison with other regions in Romania or abroad insufficient and low technological education opportunities limited of external tourism because of economic crisis Internal competition from the other regions of Romania powerful and strong international competition from the neighbour countries, such as Bulgaria, Serbia insufficient training and education for the touristic operators the apparently ongoing change of the Romanian brand, which can lead to uncertainty need to conserve and protect nature through an organized tourism sector which respects sustainable development (eco-tourism)
Based on the SWOT analysis, a proposed strategy would include the following priorities and objectives: • basic infrastructure: providing capital investments for the development of general and transportation infrastructures, health services, waste management system and new sustainable solutions available and appropriate for the region; • tourism infrastructure: attracting private investment for at least 2-3 international hotel chains that would secure an international; • SPA tourism: developing communities with SPA potential considering the map of resources; • religious tourism: promoting roads with some of the oldest churches in Europe; • ecotourism: promoting an integrated sustainable tourism strategy for the region; • marketing and branding: creating a regional brand; creating a tourism information center; supporting NGO activities for conferences and events on special tourism aspects; • education and developing of human resources: creating a think-tank for tourism development in the region with members from NGOs, public authorities, universities; supporting educational programs, creating special educational programs in collaboration with hotels and commerce chambers; supporting vocational training for employees in the tourism sector in order to secure the competitiveness of the tourism services.
Conclusions In global competition, the chances of economic success for a country or a region depend on the offer specialisation and the focusing of the development efforts to the key-fields, where resources and competences are. In this context, the innovative cluster in tourism represents a successful solution as it offers a combination of entrepreneurial dynamism, intense connections between companies and institutions, which have top-level knowledge, respectively pro-active synergies between the main actors of innovation. At European Union level, innovative clusters are considered the engine of economic development and innovation, representing a good frame for businesses development and for new collaborations between companies, universities, research institutions, suppliers, clients and competitors located in the same geographical area (local, regional, national, trans-national).
Tourism is considered by Goeldner and Brent Richie (2006) a complex phenomenon â€” the composite of activities, policies, services, and industries involving many players that deliver the travel experience. Regarding tourism policies, they must be adapted in accordance to social and economic changes faced by society. All tourism destinations must face the growing competition from both established and emerging destinations and the pressure to maintain the ecological integrity of regions affected by tourism. Therefore, the need to build tourist destinations which are both competitive and sustainable. Social sustainability manifests through the infl uence of tourism on the traditional way of life and on the better future both spiritual and professional for the inhabitants of a certain area. The positive impact regards the development of new cultural and religious traditions, diversification of artisan forms, increase in maintaining and preserving touristic objectives. Other priorities are the maintenance of cultural heritage, sustainable use of natural resources with tourism potential, improvement of the quality of accommodation and leisure tourist infrastructure. Only through these measures, along with cooperation of different stakeholders, local attractiveness will be increased and, consequently, there will be a consistent development of regional economies and the creation of new jobs.
Vi LIDERS â€“ transforming from a reactive leadership model to creative leaderhip SPAIN Introduction VÂĄLIDERS is a training program designed for senior management, with the goal of encouraging business changes by transforming the values and beliefs that hinder the growth and development of companies and by extension the territory (employment, quality of life, wealth, solidarity...). The transformation towards sustainable business growth is the result of personal development, cooperation inside as well as outside the company and the improvement of leadership skills. VÂĄ LIDERS is a program that was created in 2012 as an innovative response to the economic and social crisis marked by: 1. A continued increase in unemployment and business failure. 2. The continued trend of reduction of resources devoted to the development of proactive policies, which led to the search for new ways to enable development and growth. 3. The existence of cultural values in local businesses structure, inherited from the previous era of rapid growth. Some dysfunctional values such as individualism, the culture of quick profits, easy access to credit, and ultimately a way of doing business that disincentivizes actions that seek sustainable growth. Three concepts were the basis for the design of the programme: 1. Studies and trends show that leadership style is the main factor in the outcome of companies. According to these studies, 90% of the top business leaders get up to 40% better results, both in economic terms of profitability and in corporate social responsibility. 2. The paradigm shift in leadership styles required by the new socio-economic situation: the change from traditional reactive leadership, aimed at providing answers to specific and urgent situations, to creative leadership focused on generating new solutions and opportunities through efficient and effective management of planning, innovation and growth. 3. The leadership style in a company is also the main indicator that allows us to know to what degree it is ready to take on new challenges in the future. It also tells us whether or not a company is able to leave its comfort zone by promoting creative and innovative processes, its willingness to cooperate and collaborate, and its appreciation of its commitment to society and its local environment.
For these reasons, it was considered necessary to design a programme that would complement a series of actions developed by the Centre for Economic Development and Business Services Can Calderon Business Area, the Innovation and Employment Department of the City Council of Viladecans and other institutions and organizations in the area, in order to pool resources. It is a programme focused on transforming today’s business leaders into exceptional business leaders of the future, so that they may be a driving force of change in the area. Although the challenge was highly motivating, it has not been easy. Change is a phenomenon that cannot be brought about merely through communication campaigns, awareness and dissemination. Real change only occurs when a person expresses their willingness to change. Moreover, if we are talking about a cultural change in a company, everyone in the company must be included. “Facilitation” is not a random definition; it involves a shift in focus. It means visualizing each person within the company at their maximum potential. It involves establishing a very high degree of mutual understanding and empathy and speculating on personal growth as the engine of personal and company development. Project objectives for SMEs within the city: 1) Acquire a level of awareness of one’s own leadership style and how it affects business results 2) Explore creative leadership and begin to apply it in the business 3) Initiate processes of change and transformation in organizations 4) Involve and recognize people who are part of the company as individuals and as potential agents of change 5) Develop authentic relationships with workers and the surroundings 6) Create a community both amongst companies and with other agents in the surroundings 7) Generate motivation for cooperation 8) Initiate collaborative processes and group projects 9) Create a culture of innovation that emanates from the philosophy of the company Three editions have been organized, with an average of 15 companies per edition. 9 more companies participated in the pilot edition and are considered in the second phase. The whole programme is based on a training programme with a 100% experiencebased methodology.
Phase 1: Training of technical staff in the role of facilitators of change 40 hours of internal training with the team from Can Calderon Service for the Promotion of Economic Activity Centre, which took place during the 6 months of the programme. This is the initial phase to make the programme economically sustainable for the interim term. It allows for the future exploration of avenues of public-private partnerships to keep the programme active at its conclusion. Phase 2: diagnosis of the leadership style of the participants Duration 3 weeks The objective of this phase is to make the head of the organization conscious of their leadership style. It is an approach based not only on self-analysis, but also on the perception that one has of oneself, the impact that one has on oneself, of how one is perceived by others, and the ideal profile for excellent leadership. The selection of evaluators is vital. The main challenge at this stage was to find an internationally recognized, empirically proven tool that would make the results credible and reliable information for the company. In our case we selected TLCP (Leadership Circle Profile). This 360Âş tool revolves around a philosophy and a way of understanding leadership fully aligned with the purpose of the project, and is the only tool capable of connecting behaviours and habits with thoughts and beliefs. In short, it is challenging enough so as to begin processes of transformation in a very visual way. Once the diagnosis of leadership style is given, a process of reflection and enrichment begins until the person accepts the results as an opportunity for growth. Phase 3: Tutoring and tracking The technical team continues the programme beyond the formal sessions established in these months of intensive work. This support aims to help the company fulfill a plan of development and transformation, setting goals and objectives, as well as scheduling. This is enriched by the other services that are offered by the City Council (expert advice, consultation, employment services, training...) Furthermore, its strong relationship with the company allows for unparalleled access in detecting the companyâ€™s needs. Phase 4: Group workshops on beliefs and values 6 sessions for a total of 38 hours These group sessions allow for the connecting of behaviours with the values and beliefs that underpin them, looking for those that limit potential. The participants discover their own strengths and weaknesses and help each other in this process. In this phase every business begins the transformation process.
Phase 5: Networking and cooperation 2 sessions 16 hours. This phase consists of participants sharing everything that they have learnt in the program as well as the impact it has had on each of them, as individuals and as companies. It is also an opportunity to give continuity to the program and to the relationships that have been made, and to extend it to other companies. In these sessions all participants from the different editions come together from the perspective of creative leadership to look for opportunities to collaborate and cocreate new high added value projects. During this time participants also define and summarize a shared vision, challenging enough to incentivize the continued work for the development of the companies and the area.
1. Territorial Scope The V!Liders project has been a local project to date and the Viladecans public administration has been the driving force behind it. Nevertheless the day to day management of companies taking part, and in particular, the activity of people involved, suggests that this project will spread to other companies in time. The local area in which Viladecans is situated is known as the Delta area and comprises the municipalities of Castelldefels, GavĂ , Sant Boi de Llobregat, Begues, Sant Climent de Llobregat, El Prat de Llobregat and Viladecans. In this region there are already a range of opportunities for exchanging ideas and collaborating, which are in harmony with the methodology and objectives of this project.
2. Area of application Companies involved in the programme are from the following sectors: Agriculture, industy, commerce, services and construction. This variety of activities and expertise provides an opportunity for synergies and complementarities between different activities and at the same time it offers new, richer, and more innovative opportunities than if the work had been carried out only in a more limited manner.
3. Type of good practice Training. While this project is a training process, there is also a high component of business collaboration and cooperation. This element of the project is an added value, allowing synergies and generating new business opportunities between the
participating companies. This project promotes economic development in the territory, through consolidation and business growth. The model of the project is 100% replicable in any territory, regardless of the different characteristics that may exist. Moreover, it is tailored to any sector of economic activity and can be transferred to government, public-private organizations and other organizations.
4. Stakeholders involved While all participants have the role of employers, we sought to maintain a balance by including companies in the area that were active in city associations like the Asociación Comercial de Viladecans, PIMEC, Gremi de Hosteleria y Restauración de Viladecans, etc. In order to bring out innovation and the creation of new projects, a wide cross section of businesses was sought, with major differences in size, from sole proprietorships to companies with more than 200 workers. Companies in the city, local administration: City Council of Viladecans and administration of the province of Barcelona: Barcelona Provincial Council.
5. Results obtained Two editions have been completed, including a first testing of the TLCP. Forty-six companies have completed the programme, and an additional nine have completed Phase 2 of the program in the pilot run of the TLCP test. Overall, the most relevant results were the creation of an open business community, with an attitude and willingness for innovation, co-creation and co-operation, with a shared vision so that, as a community, they may “make the best Viladecans for the world”. A determined attitude to continue the programme to allow new companies to be able to experience it. For this reason, they have pledged to look for ways to finance the project and to actively contribute, both inside and outside the city. As stated in the assessment and follow-up questionnaires the initial objectives of the program have been exceeded. 1. Recognition of having the foundation for change in order to release the full potential of the company and themselves. 2. Participants are aware that leadership style determines results and are trying to apply what they have learned. 3. There have been significant improvements in confl ict management and they are exploring new ways to motivate their teams.
4. They are aware of when their own beliefs are holding them back. 5. They are aware of the importance of asking WHY before HOW and WHAT 6. They have realised that if they want to bring change and transformation, they must start by changing themselves. 7. Willingness to share what they have learned with other companies. 8. Creation of very intense emotional bonds between the participants 9. Generating a unique climate of trust between participants. Specifically: 1. They have finalized the vision and mission of the company. 2. Improved relationships and communication with their teams, more reliable relationships. 3. Satisfaction by the workers themselves. 4. More motivated teams. 5. Improvement with suppliers and customers. 6. Adopted a more human perspective. 7. Becoming conscious of the environment. 8. Improved decision-making. 9. Vision for the future. 10. Capacity to delegate and time management. 11. Corporate self-esteem. 12. Breaking the isolation of the employer. Data from early 2013. A year after completing the 2012 programme (27 companies), the companies that have responded have the following perception of the programâ€™s impact on its results: - 14 have increased turnover in this period with an average of 9.3% - 16 have increased the number of customers by 11% - 16 have increased the number of sales by 11% - 22 have initiated improvement processes in the company. A total of 63 new processes have been introduced - 10 companies have generated 41 jobs - 14 cooperation initiatives have been started in the past two years with a minimum involvement of 3 companies. - 3 companies that were in danger of closing have overcome the situation and are still in business two years after their participation in the VÂĄ LIDERS programme. - 1 Company moved its headquarters to Viladecans,
- 6 Enterprises are developing a high impact idea in the area - 2 companies are looking for a location in Viladecans Actions that are currently being developed: Creation of 4 working groups: 1. Synergy Group. The group seeks to create business opportunities between the participating companies or other companies that have contact with participants. 2. Mentoring Group. This group will manage the support of new entrepreneurs, business projects that request it, and to students. Its function is to bring these groups into the business environment, to support them, to share their experiences and to make them part of their networks. 3. Investors Group. Organize a group of local businesses willing to support projects that contribute to improving the city to make the best Viladecans for the world. 4. Communication Group: Social network presence: LinkedIn, Twitter and a website (currently in development) as tools to spread the V¡LIDERS philosophy to the companies in the area. 5. Schedule monthly meetings for the entire year. Once a month the companies meet to share experiences, look for opportunities, outline the project and maintain the relationship between the parties. Collaboration with activities organized by the City Council. Workshops, training pupils in training centres in the city, collaboration on the new 2014 programme regarding the start up and development of new businesses: Project BusinessLab.
6. SWOT analysis STRENGTHS •
Team ready to take on new challenges • and keen to launch campaigns to bring about results which make an impact on the town and its citizens. • 15 years’ experience of the service and the team in serving and supporting companies in the town. A portfolio of services in the City • Council for companies and workers which the final results of the programme complement and enrich. Opportunities
Need to train technical team in providing personal support and in developing leadership qualities. Companies have stereotypes and preconceived ideas of the tasks and functions of the public administration (linked to collecting taxes). Intoxication of messages about different areas of interest which come from different administrations and organizations (innovation, internationalization, quality...)
The economic support of a subsidy • from the Diputación de Barcelona The participation of a group of companies confirms the degree of acceptance of the diagnosis tool used and the model implemented. A commitment by the companies involved to seek sources of finance for the programme and to spread it to other companies in the city. Businesses which need support in improving their activities from people who understand their situation. The need to implement new ways of doing things in companies in order to confront the difficult economic situation. Greater company readiness to do things differently. The existence of a range of business services available in the territory offered by other administrations (local, regional and state) and organizations (universities, chambers of commerce) covering more conventional needs allows us to focus on a field which has turned out to have a great impact.
OPPORTUNITIES • •
High risk of duplicating some services aimed at businesses by different public and private bodies focusing on company operations.
The economic support of a subsidy • from the Diputación de Barcelona The participation of a group of companies confirms the degree of acceptance of the diagnosis tool used • and the model implemented. A commitment by the companies involved to seek sources of finance for the programme and to spread it to other • companies in the city. Businesses which need support in improving their activities from people who understand their situation. The need to implement new ways of doing things in companies in order to confront the difficult economic situation.
The day to day challenges of the company, absorbed in responding to emergencies or in seeking the necessary demand in order to survive. The perception of many company directors who see the company as a closed entity not particularly open to the outside world. The reactionary attitude of management, a result of the period of the boom prior to the crisis, which can generate a short-term view of quick profits
Greater company readiness to do things differently. The existence of a range of business services available in the territory offered by other administrations (local, regional and state) and organizations (universities, chambers of commerce) covering more conventional needs allows us to focus on a field which has turned out to have a great impact.
Conclusion The V!Liders project has shown that it is possible to do things differently. Cultural change in our businesses has been and continues to be one of the great challenges in adapting to the new global socio-economic situation. V!Liders offers a secure environment in which the group can make connections, help one another to discover opportunities and share dreams. The programme has made it possible to see the current crisis as a source of opportunities and a time for making necessary changes to the business model. The idea that one creates one’s own future. V!Liders means an advance in the model to design new programmes and new activities aimed at achieving economic sustainability, based on both private and public-private collaboration. The commitment of the city council to drive forward this type of strategy is especially important but it is equally important to encourage all participants to seek to continue the programme and to find new sources of finance which free them from dependence on resources coming from the administration. We should also mention the continued growth in the number of companies participating in the programme. Companies ended up joining encouraged by others already involved who share the new vision of the programme, a vision not provided by the administration but created together. It is also important to highlight the inclusion of new values in the territory: solidarity with different groups, collaboration both between companies and with the public administration, innovation, commitment to the territory, and responsibility for one’s own reality. One last element to highlight is the programme’s development. V!Liders has a methodology which is based on a clear and specific model and this makes it possible to develop and adapt in order to respond to the needs and resources available.
CHAPTER 3. FINAL CONCLUSION This document is the result of a series of consultations between six Partners from five different countries. The end result is a series best practices (BPs) which have been implemented at various levels and in differing spheres of political, economic and industrial policy. The objective of all these actions is that of countering, with a proactive approach, the negative effects of the on-going economic crises, view the precise view of providing measures to avoid unemployment and social distress. The BPs here listed are therefore intended as examples of successful policy, from which other public and private stakeholders may transfer and replicate or adapt to their own territorial, cultural and social identity. The Partners involved in this Project represent different stakeholders involved in socio-economic reconstruction. This was a necessary requirement to achieving a better result and has proved particularly effective. Governance at different levels, public/private cooperation, national or local competencies, have all added extra value to the scope of this paper. Where stakeholders and territorial scope may vary, the BPs contained herein indicate that these differences do not hinder comparison between actions. On the contrary, they provide extra food for thought and reflection as to how actions can be, once again, adapted from one country to another or, what is more, from one territorial level to another within the same country. The above has already been clearly identified by the European Commission as not only possible but indeed desirable in order to achieve greater widespread knowledge of the various actions being put into place amongst European Union Member States. Herein lies the ambitious effort of this paper. A small but significant contribution towards wider mutual knowledge of those policies which have proved successful, with a view to raising overall awareness towards recognizing and anticipating the effects of the present or future economic crises and thus have a working toolbox with which to adopt a timely and proactive approach. What emerges from the contents of this paper are not only the positive effects the BPs have generated on the labour market (countering rising unemployment rates via vocational and professional training) but also the broader social and industrial impact that the same BPs have structurally generated within their territorial
boundaries. All of which was in turn also perfectly in line with European smart specialization strategy. One of the features which characterizes this paper is the presence of numerous BPs which necessitate the formation of clusters. This indicates a common cross-country tendency towards networking, across both industrial sectors and different territories, which in turn can provide stakeholders with a greater potential of achieving effective and continuous R&D and achieve wider international competitiveness. The main competitive edge which clusters appear to benefit from are common management and marketing. These facilitate cohesion within the cluster itself and confer an immediate sense of unity. Cluster sustainability may in time be hindered if and where public funding plays an important role in cluster formation. One challenge will be anticipating and overcoming this difficulty in countries where this has occurred. A common strong point to all BPs presented is the level of involvement of the stakeholders taking part in the various actions. This is fully coherent with the European Commissionâ€™s paper Communication from the Commission to the European Parliament, the Council the European Economic and Social Committee and the Committee of the Regions â€“ EU quality Framework for anticipating of change and restructuring. In the end, one fundamental requirement remains valid throughout any phase of anticipating a crisis and/or managing restructuring processes: effective multiple actorsâ€™ cooperation on various levels. This in turn is the key to guaranteeing efficient and long-term sustainability of the actions.
CHAPTER 4. BILBIOGRAPHY -
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Annex 1: partners description
CONFINDUSTRIA UMBRIA Confindustria is Italy’s leading entrepreneurial organization with a broad and consolidated international business network in all industries. Confindustria Umbria – the regional branch of Confindustria for the central Italian region of Umbria – represents some 1.400 large and SMEs. The main objectives of the Industrial Association are to help local companies to be more competitive, and have a global outlook, but also to grow by focusing on innovation, internationalization, training and finance. Confindustria Umbria acts as reliable representative of entrepreneurs and companies, regularly attends meetings with trade unions and enjoys solid relations with local public administrations. One of its main activities is also to promote the relationship between stakeholders by organizing meetings, conferences and workshops that promote the mutual exchange and growth of the entire production system. Confindustria Umbria offers businesses a professional team of people who provide expertise and experience in areas such as: taxation, finance, credit, foreign trade, labour and social security issues, the environment, technological innovation and quality, business law, urban planning and land management, training, technical standards and energy related issues.
UMBRIA EXPORT Umbria Export was originally founded in 1974 by Confindustria Perugia in order to assist local companies export to and promote business on foreign markets. In 2009, Umbria Export changed into a limited liability consortium, thus allowing it to offer its services to a wider range of companies and public institutions. It plays a leading role in representing and promoting a broad range of private interests by accompanying and assisting private companies on foreign markets. Umbria Export has acquired today some 40 years of experience in the field of promoting business on foreign networks. Umbria Export’s main mission was and remains (even following transformation) to support companies from the central Italian region of Umbria in developing international business strategies. Nonetheless, Umbria Export’s principal line of expertise is internationalization, its services include: international marketing consultancy; international legal consultancy; international operations financing consultancy; scouting for international commercial partners; financing consultancy for international projects;
organizing business missions; organizing international business promotional activities; project design and project management of national, european and international projects.
ICCB The Italian Chamber of commerce in Bulgaria (ICCB) is registered in Sofia tribunal register and recognized by the Italian government with a decree of Italian Ministry of Economic Development included in law n. 518/70. The Italian Chamber of Commerce is fully integrated into Assocamerestero network (Association of Italian Chambers of Commerce abroad, www. assocamerestero.it), that comprises 80 chambers with 140 offices in 52 countries and more than 24,000 businesses as members. As Bulgaria entered the European Union in 2007, the Observatory on Structural Funds and other European programmes was born to help businesses, institutions and other organizations in taking advantage of European initiatives and financing opportunities. The ICCB has established good relationships with some of more important Italian university like Bocconi University, Ca Foscari University and Padova University. The Chamber promotes and supports the different phases of the internationalization process of Bulgarian enterprises, also with the scope to develop initiatives in order to implement different kinds of projects that share experiences and best practices from Bulgarian enterprises and local and public organizations with Italian and European companies and authorities. Mainly in the field of sustainable development, corporate social responsibility, tourism and culture, traditional agrifood products, craft products and manufacturing activities. A very important issue for the Chamber is related to promote and export the best Bulgarian production and practices in different fields. The Chamber organizes, during the year several events such as workshops, seminars, round table and conferences, at international level, to foster internationalization, integration and exchange of innovation and good practices, in different fields and for the public and private sector.
ITKAM The Italian Chamber of Commerce for Germany (ITKAM) is a German registered non-profit bilateral association. ITKAMâ€™s main purpose is to promote economic relationships in Europe, especially between Italy and Germany. Recognized by the Italian government as an Italian Chamber of Commerce abroad, ITKAM belongs to a network of over 70 Chambers all over the world. The Offices in Germany
are in Frankfurt am Main – Headquarters; Berlin – Regional Office; Cologne – Regional Office; Leipzig– Regional Office. ITKAM counts approx. 600 member companies located in Italy and Germany. In the past year it gave assistance to approx. 2,000 Italian and German companies, creating for them 1,500 international business contacts. Great part of its activities is realized with the cooperation of Italian and German public institutions, in particular with the Italian Chambers of Commerce (CCIAA), the German and Italian regional governments and some Italian and German national ministries (i.e. German Ministry for Economics and Technology, Italian Ministry for Agriculture). ITKAM cooperates with the Italian Embassy in Berlin and the Italian Consulates in different towns in Germany. The main services are: assistance to Italian and German SMEs in creating distribution networks; investors assistance; market analysis; training, seminars and conferences; organisation and assistance to trade shows for SMEs (srganization of regional pavilions and assistance); communication services and press conferences; workshops and international matchmaking events; study tours.
CONFINDUSTRIA ROMANIA The Association of the Italian enterprises in Romania was first created in July 2003 as Unimpresa Romania and is now part of Sistema Confindustria, the main representative organization of the Italian companies active in the fields of manufacturing and services in Italy. The association gathers mainly the Romanian companies with Italian capital present in the country. Today, Confindustria Romania has almost 700 members which provide over 130,000 jobs all over the country. Confindustria Romania supports, promotes and represents the entrepreneurial and industrial activity of Italian companies in Romania. It contributes to the companies’ growth and to social economic progress by following and supporting suitable policies for the industrial production development on the territory. It also offers assistance to its members by providing qualified services in various fields of activity in which entrepreneurs take interest. The Association has organized since 2007 several training courses and information focus groups for businesses and for HR professionals, especially related in the field of management (for employers and managers), quality certification, social inclusion (based on FSE projects), orientation fairs in Italy and in Romania. The Association is also implementing a project on social inclusion of Romanians in the Municipality of Rome, in order to plan their job placement back in Romania.
SPAIN Viladecans City Council promotes economic and social development strategies aimed at boosting economic activity, employment and social cohesion. This objective of the municipal management is based on the criteria of smart, sustainable and inclusive growth. The development strategies foster knowledge and innovation; environment and energy efficiency; education, training and peopleâ€™s employability; support to SMEs and investment attraction; territorial and interregional cooperation; as well as collaborative relations among stakeholders of the quadruple helix (public administrations, business, knowledge centres and universities, and civil society). It is in this sense that the city council implements initiatives that consolidate the municipality as a dynamic ecosystem interconnected with our territorial environment. Viladecans has set up services and programs for promoting and supporting entrepreneurship culture; for establishing growth and enterprise consolidation strategies; for improving training and workers qualification; for inclusion and labour insertion. Viladecans has been engaged during the last years in investing in ICT towards a Smart Living city and is working to remove the digital divide by promoting projects and pilot actions.
Best Practices Collection _“Promoting Restructuring Opportunities for an active change_Proactive Change”
Published on Dec 30, 2014
Best Practices Collection _“Promoting Restructuring Opportunities for an active change_Proactive Change”