Download Transition in SEE - Specific problems of Serbia and Montenegro

Science, Technology, and
Economic Development in
South Eastern Europe
Milica Uvalic, University of Perugia
UNESCO-ROSTE Workshop
Stockholm, Aug. 26, 2004
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Assessment of the state of
S&T in SEE
• Which SEE countries? Albania, B&H, Croatia,
FYR Macedonia, S&M (“western Balkans”, or
the SEE-5)
• State of S&T: determined by the general
economic/political situation in SEE Cs
• Current economic situation - poses major
constraints on national policies in S&T
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Specific circumstances
• Extreme political instability since 1991
(break up of SFRY, 5 military conflicts,
sanctions/isolation, NATO 1999 bombing) --delays in economic & political reforms,
inward-oriented economic strategies
• Positive turnaround since mid-1999-2000, but
events of the 1990s left very deep traces
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In EU: transition to a
knowledge-based economy
• S&T perceived as a key resource for
competitiveness and long-term growth
• Lisbon and Barcelona European Councils:
commitment to invest 3% of GDP in R&D by
2010; innovation and information
technologies; European Research/HE Areas
• Highly relevant for the SEE Cs aspiring to
become EU members (Croatia a candidate)
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Key issues
• Economic constraints for S&T in SEE
• Some main features (in SEE)
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National policies in S&T
Investment in R&D
Human resources in R&D
Impact of S&T on competitiveness and
employment
• International/regional/bilateral cooperation
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Economic constraints for S&T
in SEE
• Still today: rather unfavourable economic
situation (+ unresolved political issues)
• Macroeconomic stability achieved (low
inflation), but development and other
economic indicators reveal serious longerterm structural problems
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Economic features...
• GDP in S&M, B&H: in 2002 50% of 1989
level; only Albania surpassed it by 20%
• GDP/capita: 10-30% of EU average, wide
differences (Croatia over $6,000, 3x higher)
• Industrial production even sharper fall (in
B&H to 28%, in S&M to 38% of 1989 level) dramatic consequences
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Economic features...
• Economic structure: backward trend! Process
of de-industrialisation (return to agriculture)
• Very high unemployment, even 30-40% in
Mac, B&H, S&M
• Increasing public debt, public deficit still 4-8%
of GDP, further cuts necessary
• Very low national savings and investment
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Economic features...
• External deficits, low competitiveness on EU
markets, non-diversified exports, high
dependence on imported technology
• Dependence on foreign resources to cover
CA deficits (problem of “aid-addiction”)
• Very limited inflows of FDI into SEE-5 (19892002): $ 10.6 billion (6.1% of total FDI in 27
transition Cs), 60% in Croatia
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National policies in S&T
• Starting conditions different
• Former Yug more favourable (institutions,
human capital): e.g. Universities (Zagreb
1669, Belgrade 1889), education system,
openness (intern. cooperation, scientific
exchange, travel abroad)
• Albania: traditional model, most closed
economy, first University set up in 1957
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National policies in S&T...
• Reforms in course in all Cs (variable speed)
• New laws (HE, Science & Research, etc.),
government documents, national strategies,
new institutions (Agencies), BUT...
• Delays in implementing laws, only on paper
• S&T in the shadow of other priorities, lack of
understanding of importance of science,
absence of a clear longer-term strategy
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National policies in S&T...
• Higher Education reforms - different paths:
Croatia too centralised (state), B&H too
decentralised (no single Ministries)
• New laws on HE: declarative autonomy, all
Cs signatories of Bologna Declaration,
Croatia introduced 3+2, others to follow...
• New private universities, but lack of proper
accreditation and quality assurance
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National policies in S&T...
• Limited possibilities to modernise scientific
infrastructure (purchase new equipment,
modernise laboratories, libraries, information
systems), due to poor financial situation of
R&D institutions
• Inappropriate treatment of R&D: a serious
obstacle for more intensive research
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Investment in R&D
• R&D poorly funded (budgetary cuts), R&D
investment lower than the EU-15 average
• Govern. budget prevalent source of finance
• Private funding limited - delays in privatisation
(private sector 45% GDP in S&M, 50% in
B&H), no links with univer.
• Donors aid crucial, but often short-term, no
interest to invest in certain key areas (labs)
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Investment in R&D...
• In Croatia (1995-2000): Ministry for S&T got
only 1.1-1.3% of GDP, of which
– 31-26% for R&D, but a large part for staff salaries,
only 17-20% for research projects
– 57-65% for higher education
– 10% Croatian Academy of Arts and Sciences
• Still, Croatia’s investment in R&D higher than
of some EU acceding Cs (Hung, Eston)
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Investment in R&D...
• In Serbia, R&D spending much lower: 0.32%
of GDP in 2003, though rising - plans to
increase public spending to 1% of GDP by
2005 and further to 1.4% by 2010
• In Macedonia: only 0.025% of GDP in the
2001 budget for the 375 projects funded by
the Ministry of Education and Science
• B&H: no reliable statistics, only estimates
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Human resources
• Dramatic effects of SFRY break-up, wars,
economic crises, financial cuts:
– massive&continued brain drain (best experts)
– brain “waste” - leaving S&T professions for more
profitable jobs (private or informal sector)
• No. of researchers and scientists declining,
though trends differ - in Croatia R&D
personnel reduced slower than total employ
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Human resources...
• S&T professions unattractive: low pay, no
social status, no incentives
• Recent social changes (rising inequality,
social differentiation, “new rich” class) disruption of the system of values
• Education no longer a guarantee to get a job
• Limited employment prospects for S&T
professions - decreasing graduates
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Human resources...
• Brain drain - Tirana University lost 40% of its
academic staff over the last 10 years, of
which 90% are under 40 years old
• Dramatic proportions of brain-drain from all
other Cs (BiH, Mac, Serbia, estimates vary),
departure of best experts, deficit of
researchers of middle age generation
• Some recent improvements in Cs worse off
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Human Development Index (UN)
(GDP/cap, education, life-expect)
Trends in HDI in Serbia
H D I tre n d
0 .7 7 5
0 .7 8 0
0 .7 6 8
0 .7 7 0
0 .7 6 2
0 .7 6 0
0 .7 5 0
0 .7 4 0
0 .7 3 0
0 .7 2 5
0 .7 2 0
0 .7 1 0
0 .7 0 0
1996
2000
2001
2002
Data for 1996 refers to FRY
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R&D impact on
competitiveness and employment?
• Limited, but potential exists - highly underutilised human capital (unemployment!)
• More public support for R&D (particularly in
SMEs) and of knowledge industries
• More active labour market policies (better
matching of demand & supply of skills,
lifelong learning, retraining courses)
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Competitiveness and
employment
• FDI limited (key channel for transfer of
knowledge and modern technology)
• Unfavourable situation regarding trade in high
tech products - all SEE Cs highly dependent
on imports of high-tech products, export very
few high-tech products (pharmaceutics,
armaments)
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Competitiveness and
employment...
• European Charter for SMEs in WB (2004):
Surveys of firms attitudes - Findings?
• Education and training, and technological
capacity - not attributed high priority by
business community in SEE Cs, yet...
• Informal market of training/education,
networks of regional business centres
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Competitiveness and
employment...
• Many local initiatives to raise public
awareness about entrepreneurship
• Training courses for managers, courses on
entrepreneurship (in Mac from age of 7)
• TV programmes - notions of good practices
• Fairs, exhibitions, debates, even national
competitions to select the best entrepreneurs
(Croatia, Montenegro)
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Competitiveness and
employment...
• Fostering technology-sharing through interfirm clusters: experience gained in Serbia,
Macedonia, recent tender in Croatia
• Technology parks: Croatia and Macedonia
each have 4, Serbia has feasib. studies for 3
parks, Maced in Bitola, plans for B&H
• EU initiatives to support high-tech start ups
replicated in SEE? To be explored...
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International, regional, bilateral
cooperation in S&T
• SEE-5: Constant renewal of international links
in recent years, benefiting also S&T
• EU support of SEE: SA Process, Stability
Pact for SEE, CARDS programme, EIB loans,
EBRD…+ IFIs + other donors
• Promotion of regional cooperation in SEE:
many regional projects in course
• Bilateral agreements: numerous projects
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International cooperation...
• Results clearly positive also for S&T
• Regional networks in education (Graz
process, Ljubljana Network); Inter-Balkan
Forum on IST, Balkan Physical Union, etc.
• TEMPUS programme: university exchange
• Inclusion of SEE Cs into FP6, gradual
integration into European Research Area
• BUT -much more could be done
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International cooperation...
• Making SEE-5 eligible for other EU
programmes reserved for candidates, e.g.
EIB’s i2i (Innovation 2000 Initiative)
• Proposal: to set up a special EU regional
assistance programme for R&D (technology
incubators, start-ups, venture capital)
• Limited funds for longer-term research or
researchers mobility (conf participation)
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Concluding remarks
• Situation in the S&T sector in SEE Cs not
very satisfactory, complex tasks ahead
• Prevent an increase in the technological gap
EU-SEE through more appropriate policies
(domestic and international)
• Raise public awareness about the
knowledge-based economy (key role of
innovation and technological progress)
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Concluding...
• Right balance between restrictive economic
policies, and other types of policies with longterm effects - raise competitiveness and
employment (human capital!!!)
• Attract more FDI by improving business
environment and decreasing country risk
• Continued foreign assistance important in the
medium term
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