Innovation Performance in the Western Balkans EIS 2021

Three out of four Western Balkans countries have seen steady developments in their innovation performance since 2014, according to the European Innovation Scoreboard 2021 (EIS).

Overall, Europe’s innovation performance has increased by 12.5% in this period. The lower-performing countries are growing faster and closing the innovation gap with the higher-performing EU Member States.

However, things have not changed on top.

Innovation Leaders are Belgium, Denmark, Finland and Sweden with innovation performance significantly above the EU average.

Strong Innovators with performance above the EU average are Austria, Estonia, France, Germany, Ireland, Luxembourg and the Netherlands.

Countries below the EU average are Moderate Innovators such as Cyprus, Czechia, Greece, Italy, Lithuania, Malta, Portugal, Slovenia, and Spain.

Emerging Innovators’ innovation performance is well below the EU average: Bulgaria, Croatia, Hungary, Latvia, Poland, Romania and Slovakia. 

How is Western Balkans’ Innovation Performance Picking Up?

Innovation Performance in the Western Balkans mapUntil now, only three countries from the Western Balkans were featured in the EIS: Montenegro, North Macedonia, and Serbia.

After years of waiting, in 2021 Bosnia and Herzegovina finally got included in the EIS analysis.

All Western Balkans countries presented in the EIS are Emerging Innovators.

The innovation performance increased in Serbia by 16.7% relative to the EU in 2014, in North Macedonia by 14.4% and in Montenegro by 7.8%.

Bosnia and Herzegovina’s innovation performance in the same period dropped -1.2%.

As the chart comparing the EU neighbouring states’ innovation performance shows, Serbia closely follows Croatia’s performance, slightly behind Hungary, while Italy and Greece are ahead as moderate innovators.

To bring things into perspective, Bulgaria fares worse than Serbia and Montenegro, while Romania as the EU Member States is below the four Western Balkan countries.

Despite recent advances, the Western Balkans as a region needs an innovation sprint to bandwagon more developed EU member states.

Analysis of the Western Balkans Innovation Ecosystem

There are several reasons why the region’s innovation performance is lagging behind developed EU Member states.

To understand better the region’s innovation ecosystem, let us quickly examine it through SWOT analysis. SWOT stands for ‘strengths’, ‘weaknesses’, ‘opportunities’ and ‘threats’.

Strengths
Weaknesses
Relatively well-developed higher education sector;

Growing innovation capacities;

Innovation policy for SMEs in place;

Regional professional expertise;

A decent potential for innovation and commercialisation of research outputs (mainly public research organisations and a growing number of private research institutes too);

A growing number of innovation hubs capable of incubating entrepreneurs and startups from ideation to commercialisation

Innovation ecosystem within individual countries is in its infancy;

A regional innovation ecosystem does not exist;

A limited number of innovation-focused initiatives covering the entire region;

A ‘generalist’ higher education and research community;

Modest innovation and research outputs;

Poorly developed innovation infrastructure (limited number of policy instruments, poorly developed tech transfer offices and digital innovation hubs, accelerators, incubators, etc.)

Low investments in innovation & research;

Monitoring & evaluation of policy implementation mainly insufficient;

Businesses marginally interested to invest in risky innovative ventures.

Opportunities Threats
A regional innovation ecosystem can be designed from scratch;

Covid crisis revealed the structural  vulnerabilities and created space for wider support of the innovation in targeted fields;

Broken supply chains offer unexpected business opportunities to be seized (ex. near-shoring);

Expanding tailor-made support to startups development with the focus on niche markets

Legal unpredictability;

Political instability;

Hollow political and business commitments;

Damaging brain drain;

The EC’s practical support is limited and inadequate;

Other players’ outside of Europe start offering juicier ‘carrots’.

 

The EIS report offers a comparative assessment of the EU and European countries’ research and innovation performance.

This statistical tool was created to assist policy-makers to conduct continuous SWOT analyses of their research and innovation systems and design policy measures capable of supporting their priority fields.

The EIS 2021 methodology is based on distinguishing between four main types of activities (Framework conditions, Investments, Innovation activities, and Impacts) and 12 innovation dimensions, capturing in total 32 indicators.

 

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