Daniela Chonkova, Head of the Innovation and Business Support Programme of the Applied Research and Communications Fund, National Coordinator of Enterprise Europe Network – Bulgaria, and Prof. Theodora Georgieva, senior expert at the programme, presented their point of view on the announced termination of the procedures “Stimulation of innovation implementation by existing enterprises” and “Establishment and development of Regional Innovation Centres (RIC)” under OP “Innovation and Competitiveness”. They warn that the withdrawal of public resources specifically for innovation, through which companies rely on becoming more sustainable and more competitive, could lead to further business closures. The ‘time’ factor is very important when it comes to the practical application of an innovation idea. In addition to the time factor, the highly dynamic environment of the crisis poses a serious threat to business,” the experts stress.
Hello, how would you comment on the termination of the procedures “Stimulation of innovation by existing enterprises” and “Establishment and development of Regional Innovation Centres (RICs)” under OPIC?
Teodora Georgieva: These are only some of the terminated procedures under operational programmes. Other instruments that directly or indirectly support the development, transfer and application of innovative products and the dissemination of good practices in this respect are also affected. At a time when there is a need to react quickly and mobilise financial resources, the first procedures to be terminated are those to promote innovation. This is yet another example supporting the claim that innovation, technological renewal of enterprises and cooperation between science and business are not among the priority topics for the government, as we have shown over the years in the annual Innovation.bg report.
We have seen the same reaction during the financial and economic crisis after 2008, when the Ministry of Finance left a number of projects in the field of science, technology and innovation without funding with the caveat that “the crisis is not the right time to invest in innovation”.
A quick review of the measures taken during this period by governments in a number of developed countries shows that they reacted quite differently. Instead of cutting investment in innovation, they are doubling it. Behind such a reaction is the understanding that it is innovation that can support the national economy in the long term, that it is innovative companies that will pull the economy forward once the crisis is over.
Unfortunately, we have not learned our lesson. Once again, the aim of the measures is short-term survival at any cost, based on the allocation of financial resources without clear mechanisms and criteria. Again, there is no strategic vision and no understanding that it is innovation that has a positive multiplier effect on the economy, quality of life and national competitive advantages.
What are the direct and indirect consequences of this step?
Teodora Georgieva: The direct consequences are, of course, related to the fact that specific enterprises that have relied on public funding for the implementation of their innovation projects, and for the preparation of which they have most likely already invested their own funds, remain cheated. This is a problem because the ‘time’ factor is very important when it comes to the practical application of an innovative idea.
Indirect consequences will have an effect in the future, but they are often associated with the perception of the business environment in Bulgaria as unpredictable and unfavourable for innovative businesses. And this is a key factor in nurturing and sustaining an entrepreneurial and innovative culture.
Daniela Chonkova: Apart from the “time” factor, the highly dynamic environment in the conditions of crisis is a serious threat to business. This hinders medium-term, even short-term planning in companies.
Their situation is further aggravated by the fact that the free mobility of people and goods is severely hampered or hindered by restrictive border measures, which directly affects the functioning of the pan-European market. This makes Bulgarian business even more vulnerable, and innovation can be crucial to its survival and overcoming the crisis. The withdrawal of public resources specifically for innovation, through which companies rely on becoming more sustainable and more competitive, could lead to further business closures.
What are your expectations for the development of innovation in SMEs that are not directly linked to the fight against COVID-19? What should companies do practically?
Teodora Georgieva: Companies must continue to innovate despite the situation. Of course, it is easy to say and much more difficult to go down this road. But the fact is that using external public funding does not make an enterprise innovative. Truly innovative enterprises have an internally conscious need to innovate and to offer innovative products. Let us not forget, however, that external public funding can greatly support these enterprises. And the fact that this funding has now been stopped means that the state is abdicating its function in supporting innovative businesses.
What are your recommendations for institutions to support sustainable and start-up innovators in the current crisis and beyond?
Teodora Georgieva: It is important to understand that trust is the hardest thing to gain. If the state wants to win the trust of business and build an image of a loyal partner, it must defend its priorities regardless of the circumstances. This is linked to our value system as a society and is true in the area of corporate governance as well as in the management of the national economy.
Daniela Chonkova: The consequences of the crisis will make the problems in the country’s economy even more tangible. It is necessary to make a systematic, holistic analysis not of the individual systems in the country – health, education, economic, etc., but of all of them together and of the links of interaction between them and their mutual conditioning. In these conditions, a common national vision is needed to tackle the crisis, not “working in pieces”.
Policies, priorities, measures should be reviewed on the basis of a holistic view. There will be a growing need to strengthen the education-science-business nexus, without which there can be no innovation, and for public resources for this purpose.
What good practices would you recommend to support sustainable innovation in the current crisis and beyond?
Daniela Chonkova: The European Innovation Council (EIC) has post facto increased its budget for the March 2020 Call for Proposals. Innovation projects have been submitted in a wide range of economic sectors, and at the last minute, due to the unleashed wave of emergency measures in many countries, the EC issued a call for projects concerning COVID-19. The increase in the budget of the competitive session aims precisely to avoid an exclusive reallocation of financial resources to these projects only, but on the contrary to give the green light to innovation in general. The total budget of project proposals submitted for the March 2020 session alone exceeds the entire EIC budget foreseen for the period 2021-27, which is an indication of the acute need of business for public funds to support innovation right now.
Teodora Georgieva: We do not have to look long for best practices in this respect. The British government has announced a new package of measures to support innovative businesses on the island, which I recommend you take a look at.