Transition of Moldova's Economy to Knowledge-Based Economy: Strategies for Innovation Development

1. “Conditions of transition of Moldova’s economy to knowledge-based economy” International Conference “Scientific and Technological Innovation: National Experience and International Cooperation” 20TH May 2010, Baku Valentina FETINIUC Moldova

2. General country overview • Area: 33,800 km2 • Population: 3.58 million • Capital: Chisinau - 717,000 citizens • National Legislature: Unicameral assembly • National currency: Moldovan Leu (MDL) Valentina FETINIUC Moldova

3. The major condition for RM to pass to the new economy, based on knowledge is innovations model economic development: transforming innovations and innovation activity into the major social-economic development factor of Republic of Moldova It assumes as practical realization of the complex approach to creation of innovative structures, and mechanisms of interaction of science, formation, small innovative business, the large industrial corporations, and corresponding financial institutions. Valentina FETINIUC Moldova

4. European integration is the main concern for the development of the countries, as for the scientific and innovation policy convoluted for RM is considered the situation of EU member states innovation policy, stated in "Lisbon strategy", approved by the European Council in March 2000 and reconsidered in 2005 year under the name of "Lisbon Strategy of Economic Growth and Employment" This document established the strategic purposes of development of economy of EU for the term of 10 years, providing creation of the dynamical and steady economy which are based on knowledge, necessary for improvement of working conditions, accelerations of a social unification and defines innovative activity as a factor that directly defines competitiveness maintenance at all levels: the enterprise, sector, region or the country. Valentina FETINIUC Moldova

5. Middle of 21st century Creation of new technologies Transition to scientific-technical revolution KNOWLEDGE SOCIETY Valentina FETINIUC Moldova

6. The state innovative policy in Republic of Moldova is directed on maintenance of steady socially economic development and high national competitiveness Economic aim of innovation policy is to fulfill internal market with high technological products for the international level with very new elements for the products global standards Valentina FETINIUC Moldova

7. Final purpose of innovation activity development on RM territory creation of a entire national innovation system (mechanism) for innovation directing – correlated combinations of the innovation creation field, its trade distributions, duplications within the production sphere that will be based on: • The establishment of an adequate economic and law environment; • The construction of entire innovation infrastructure; • The performance of state mechanisms for the scientific ideas and co-acting for its trading Valentina FETINIUC Moldova

8. Change of economy of Moldova into an innovative way of development is accepted at the state level as a strategic direction of development of the country and it is reflected in following documents: • The Code of Republic Moldova on sciences and innovations No. 259-XV, July, 15th, 2004; • The program of social-economic development of RM for a medium-term period (2008–2011 years); • The National Strategy of Innovative Development of Moldova for the period 2008-2011 years Valentina FETINIUC Moldova

9. After the adoption of the Republic of Moldova Code of Science and Innovations, in 2004, Academy of Sciences of Moldova (ASM) misplaced its old role and became the real manager of all science pound, as well as those of competence, under the Agreement on partnership with government, handed over to the Academy of Sciences. • Some foreign experts compare the ASM with the Ministry of Science, or even the National Science Foundation. • ASM organizes and coordinates the research work using the experience, that is, those research schools, which have been established for decades. • By direction of the scientific schools are done studies and the results are transmitted for implementing through the Agency for the implementation of innovation and technology transfer (AITT). Valentina FETINIUC Moldova

10. Under the "Code of the Republic of Moldova on science and innovation”., Academy of Sciences of Moldova became "the only public institution of national importance in the field of science and innovation, plenipotentiary coordinator of scientific and innovation activities, the highest scientific forum of the country and scientific consultant for the public authorities of the Republic of Moldova.“ • It made possible to concentrate efforts and financial flows for research and innovation area. In such a relatively small country like Moldova, this seems to be reasonable and timely. Valentina FETINIUC Moldova

11. But the move led to a need and a number of other actions. And the first of them - is the reform of ownership of the Academy of Sciences of Moldova. • In this case it was necessary to resolve the fundamental contradiction between the Academy of Sciences (which includes in its current form, all academic and scientific research institutions, the accreditation of the past and received a license to engage in this activity) as part of civil society, governed by democratic means through the scientific community, and like a public institution, financed by the state. Valentina FETINIUC Moldova

12. Resolving this contradiction made the conclusion of a special instrument - the Partnership Agreement between the Government of the Republic of Moldova and the Academy of Sciences for a term of 4 years • The bases of this agreement are: • The relevant requirements of the "Code", • The recognition of science as a strategic national priority, • The definition of science as a driving force for sustainable development, • The need for financial support of scientific research, promotion of innovation and technology transfer as defining the conditions for solving the urgent problems of the country. Valentina FETINIUC Moldova

13. The General Assembly of the ASM discussed the strategy, priorities and objectives of science and innovation for yy. 2011-2014 and accordingly, it worked out a program for the scientific community containing 6 strategic directions, 11 priorities and more than 70 objectives. Valentina FETINIUC Moldova

14. The strategic directions for the next 4 years : energy efficiency and assurance of energy security, including the use of renewable sources of energy; nanotechnologies, industrial engineering, new materials; biotechnologies in agriculture, sol fertility and assurance of food security; biomedicinepharmaceutics, health and health strengthening; mastering of human, naturalandinformationresourcesfor sustainable development. Valentina FETINIUC Moldova

15. 11 priorities in science and innovation for the next 4 years: • energy security, • nanotechnologies, multifunctional materials, new substances, • new industrial technologiesand engineering products, • assurance of food security, • health strengthening, • environmental security, • continuous education, • knowledge economy, • seismic safety; • information systemsand technologies; • mastering cultural heritage, development of constitutional state. Valentina FETINIUC Moldova

16. Related to the mentioned above, the following main tasks of the ASM was to create technologies that will raise living standards of the Republic of Moldova and its security, export production, sustainable environment, including ecologically sustainable development of its territories. • Solution of this problem is complex. Achieving the conditions under which the Moldavian science will effectively influence the economy, and, consequently, affect the living standards of each of its citizens was one of the main tasks of the Academy. Valentina FETINIUC Moldova

17. The level of development of any country is defined currently like the share of science-intensive technologies from the GDP. This is extremely important for Moldova that has no such natural resources, which could allow its economic existence. And for this it is necessary: • To create a network of scientific and technological innovation of firms providing legal, economic, consulting and other necessary conditions for the innovation process; • To define "growth points", that is the choice of optimal solutions scientific- technological tasks that could be the subject of a competitive knowledge-intensive goods; • Material interest of both science and business to participate in the innovation process, which calls for tax breaks for all parties involved in it. Valentina FETINIUC Moldova

18. The science financing Valentina FETINIUC Moldova

19. The science financing Valentina FETINIUC Moldova

20. Dynamics of State Budget expenditures on science, mln lei Valentina FETINIUC Moldova

21. Dynamics of financing growth of science and innovations of sphere according to the Agreement between the Government andASM(% fromGDP) Valentina FETINIUC Moldova

22. The basic programs and actions in the field of innovative potential and technological progress maintenance of Moldova include following directions: • Creation and promotion of effective attraction mechanisms of high technologies; • Optimization of science and innovations sphere by creating scientific clusters, platforms, and also attraction of intellectual and techno-practical potential for the decision of corresponding problems of national economy and researches in sphere of small and average business; • Improvement of scientific institutes techno-material resources; • Improvement of national system scientific researches by stimulating participation in the main European and international programs research activity of the organizations from the field of science and innovations (FP7, EUREKA, COST, GEANT, CRDF, STCU); • Science and innovations promotion by creation of scientifically-technological parks and innovative incubators, and also applications national and foreign researches in economic activities results; Valentina FETINIUC Moldova

23. The basic programs and actions in the field of innovative potential and technological progress maintenance of Moldova include following directions: • The effective organization of science centre and laboratories; • Introduction in national statistics system of innovative incubators; • Promotion of financial resources access within the limits of intensive technological development, especially with the use of alternative financial tools („angels investors”, „capital seminal”, micro-credite etc.); • Reforming and development of scientifically-innovative system in all areas; investments attraction into development of universities which are more successful in research activity than ASM of RM; • Cooperation of universities and business; • Improvement of statistics by inclusion of real and concrete parameters of business sphere; • Creation of regional ideas incubators, with attraction of youth there; • Creation of uniform information system with databases about innovative projects, subjects of innovative activity, condition of supply and demand in the markets of innovative production; • Development of system ventures financing, creation and functioning. Valentina FETINIUC Moldova

24. Thank you for your attention!Спасибо за внимание!Vă mulţumim pentru atenţie!The Institute of Economy, Finance and StatisticsRepublic of MoldovaI. Creanga 45 str.Tel. +373 22 748736Fax +373 22 743794iefs@iefs.mdwww.iefs.md Valentina FETINIUC Moldova