National Innovation System in Albania

1. National Innovation System in Albania enhanced Visho AJAZI Kujtime STEFANI IDF Becici, Montenegro 8-9 November 2010

2. Overview of NIS – Main Characteristics Science system includes public and non public institutions and entrepreneurship operating in the field of research, development and innovation : • higher education, • scientific research, • knowledge and technology (innovation) development GERD toward GDP: 0.02 % = 15 Mln. Euro in 2009 funded by public sector & foreign sources Reform of the NIS from 2008 • Reorganized of Academy of Science (AS) • Research Institutions (Ris) & AS integrated to the higher education system • RIs under the line ministries reorganized in Technology Transfer Centers (TTC) Structure & Stakeholders: • Council of Ministers - Council of Higher Education & Science - Line Ministries • National Institutions • ARTI, NAIS, Patent Office • Research bodies • Universities, Centers of Excellence, Academy of Science • Private institutions or NGOs • Private entrepreneurships in ICT , technology transfer & knowledge etc.

3. Policy making & priority setting Parliament Committee on science, innovation & technology assessment (to create ?) Government Council of Ministers National Council for Science and Innovation Chaired by Prime Minister Advisory bodies Academy of Science Policy design & Evaluation Ministry of Economy Ministry of Agriculture Ministry of Health Ministry of Defence Ministry of Education & Science Directorate of Scientific Research Programme Management & Monitoring Agency for Research, Technology & Innovation (ARTI) Research & Innovation performers University research institutes Ministerial research institutes Centres for innovation, technology development & transfer Private sector enterprises Advisory function Organisational relation & institutional funding Funding through competitive programmes

4. Education/Research System Science system includes: • 12 public higher schools & 17 private higher schools • 1 National Research Center – Center for Albanalogic Studies • 12 Public Agencies/TTC under Line Ministries of Food & Agriculture, METE, Environment, Tourism, Public Works & Transports • Centers/agencies/institutions & other private entrepreneurships dealing with research technology and knowledge development and transfer Existing Financing & future programmes: • Research-funding : a small scale competitiveness funding programme (132 projects, budged 5 m $, period 2-3 years run by MES • World Bank – equipment of teaching laboratories with a $4.9m investment • Through Brain Gain programme opened 550 vacancies in higher education and scientific research institutions. 82 assistants and lecturers with a MA or PhD degree have been qualified and appointed through open competitions in public and private universities. • The excellence fund for PhD studies -27 PhD students were supported by this fund during 2007–2009 Policy Intervention 5 programmes 2010-2015: Research Infrastructure Fund Albanian; Centers of Excellence in Science (ACES);Research Eagles Grants,; National Technology Programme ; Science Promotion and Education Programme

5. Enterprise & Industrial System The contribution of SME toward: • GDP is 80 % • Employment is 81.8% • Exports in 2008 is 69% • The share of SME is 99.9% of total number of companies • The number of Foreign & Joint enterprises are 2336making 2.2 % of active enterprises in the country Policy development for SME-best practices • NRC – One Stop Shop, Registration of business within a day and cost 1 Euro – • Functioning of National Licensing Centre – NLC- as new One Stop Shop model • Fiscal reforms –tax burden : CIT 10%, Personal Income Tax 10%, Social Security Contribution 15% • E- Government • Public procurement since the early of 2009 are submitted electronically • Tax payment ,on-line services • On line services at Customs AIDA (Albinvest) manages: • The government Competitiveness Fund – 200.000 Euro/year • Export Credit Guarantee Fund (ECGF) – 1,6 Mln Euro /6 years

6. Intermediaries & science-industry cooperation • In Albania business incubators are not developed, only two. None of these are operational today; • Clusters in Albania have firstly been developed with the support of donor organizations. Having been very important as a starting point in terms of collaborative approaches within the Albanian business community, these initial efforts did not succeed in establishing sustained cluster structures and activities. • UNDP is considering providing support to strengthen the capacities of the Ministry of Economy, Trade and Energy (METE) in relation to cluster development and assessment of clustering potential in Albania. • The Regional Competitiveness Initiative for the Western Balkans (2010-2012) 3-year project, Building Excellence & Innovation into South East Europe Clusters (BEISEEC) supported by the European Commission from 2010-2013, with the total budget of EUR 3.8 M • METE is currently in the process of formally adopting a National Business Innovation and Technology Strategy (BITS), which integrates the Albanian Cluster Programme (ACP) & Business Incubation Programme. The designed Business Incubation Programme for Albania will apply a step by step approach, by setting up a pilot business incubator and building on its experience, in parallel taking into consideration the experiences from other countries.

7. Government policy on innovation Cross cutting strategies in support on innovation: • The National Strategy for Development and Integration (NSDI) • The Business & Investment Development Strategy (BIDS) • The National Strategy on Science, Technology and Innovation (STI Strategy) 2009-2015 • Cross cutting strategy on Information Society • Draft Business Innovation and Technology Strategy (BITS) The legal framework is in place : • Law on Academy of Science, Law on Higher Education, Law on Electronic Signature, Law on Electronic Commerce , Electronic Document, E- Procurement, and soon Protection of Electronic Data and Cyber crime services Government institutions involved on innovation: • National Agency for Information Society (NAIS) established in 2007 • Agency for Research, technology and Innovation (ARTI) established in August 2009 • Ministry for Innovation and Information and Communication Technology (MITIK) established in April 2010 • Business Relay Innovation Centre (BRIC) – to be set up

8. BUSINESS INFRASTRUCTURE Big investment are made in banking system , approximately 200 mln. Euro – In Albania there are 16 private foreign banks. • Credit to economy, which is an important indicator, rose by approximately 32% during the last 5 years, and crediting power to the private sector accounts for 39% of GDP in 2009 • The number of commercial banks that offer online services are increasing using electronic access products provided by them –through payment cards, PCs or recently even telephones Telecommunication sector- access to ICT networks • E-Gov which has facilitated communication and interaction between public institutions and private sector and avoiding corruption • Internet penetration 31.2 % in 2009 • Mobile telephony 126/100 inhabitants in 2009 • Time to install a line fix telephone for businesses in Albania is approximately 7 days comparable to other countries in the region.

9. Albania PART OF regional & International Projects • International cooperation through EU programmes: Tempus, Erasmus supported by WB, CEB, EIB • Albania participate in FP 7 2007-2013 in 4 pillars: (Capacities, Cooperation, People and Ideas) as well as the Euratom and the Joint Research Centre (JRC) initiatives. • Albania is promoting participation in COST, EUREKA etc • Competitiveness and Innovation Framework Programme (CIP) • Entrepreneurship and Innovation Programme (EIP) • ICT policy support programme • The intelligent energy- Europe programme (IEE). • IPA 2007 for business development through 2 components: 1)project “Support SMEs to become more competitive in the EU market, through innovation and technology transfer” and II) TAM project which help companies in improving their management for the purpose of increasing their competitiveness.

10. Main Structural deficiencies of R&I system • Albania is performing poorly on innovation. It is ranked at 96 out of 133 in the world – (Global Competitiveness Report 2010) • Capacity and competence to manage both basic and applied research in Albania are limited & far from standards that would enable co-operation and participation in European or international programmes. • Scientific infrastructure is outdated and inadequate to support quality research. • Albania relies heavily on foreign funding, and in particular on the very competitive structure of the EU’s 7th Research Framework • Albania is highly dependent on foreign technology • Albanian firms’ “technological capacity” to upgrade by absorbing existing advanced technologies is weak • 'Albania lags behind all other countries in Eastern Europe in establishing proactive policies to support technology capacity building for enterprises, particularly for SMEs.' (WB) • There is no dedicated institutional structure within the Albanian Government to coordinate such activities (WB) • There is no specific strategic approach to business innovation and technological development

11. Government Challenges on innovation • Improvement of basic research infrastructure able to support sufficiently university training at three levels (BSc, MSc, PhD levels) • Creation of scientific excellence in key research areas for our country • Education and retaining/attracting qualified people in the Albanian research system • Increased public understanding of science and an improved awareness of the role of innovation and new technologies for society and economy. • Increase public spending on research to 0.6% of GDP by 2015. • Increase the share of gross expenditure on R&D from foreign sources notably from the EU (FP, etc.) and international donors • Improving the legal and institutional framework for research policy-making and research funding • Internationalization and integration into ERA and the building of national competences • Approving of the Business Innovation Technology Strategy (BITS) & Business Relay Innovation Center (BRIC)

12. Thank you! Visho AJAZI vajazi@km.gov.al Kujtime STEFANI kstefani@mete.gov.al