Analysis of Economic, Policy, and Business Support Framework in Partner Regions

F.A.T.E.
From Army To Entrepreneurship
Context Analysis
TABLE OF CONTENT
INTRODUCTION .................................................................................................................................................................. 5
ITALY - Friuli Venezia Giulia Region ................................................................................................................................... 8
1. ANALYSIS OF THE ECONOMIC CONTEXT ................................................................................................................ 8
1.1 Regional economy ................................................................................................................................................. 8
1.2 Sectoral focus ...................................................................................................................................................... 20
2. ANALYSIS OF THE POLICY FRAMEWORK ............................................................................................................. 33
2.1 Institutional framework ...................................................................................................................................... 33
2.2 Regulation and Support measures for SME ........................................................................................................ 36
With reference to innovation, the strategy adopted by the Region of Friuli-Venezia Giulia is to develop
synergies between the research system and the enterprises, in order to improve competitiveness through
technology transfer. .............................................................................................................................................. 45
2.3 EU assistance for supporting SMEs ..................................................................................................................... 49
3. ANALYSIS OF THE BUSINESS SUPPORT ORGANISATIONS CONTEXT ................................................................... 57
3.1 Mapping of the existing institutions/associations/various structures ................................................................ 57
4. CONCLUSION ........................................................................................................................................................ 72
1. ANALYSIS OF THE ECONOMIC CONTEXT .............................................................................................................. 76
1.1 Overview of the economic-entrepreneurial context (at regional level) .............................................................. 76
1.2 Main sectors........................................................................................................................................................ 80
1.3 Analysis of emerging potentials (sectors) at regional level ................................................................................ 85
2. ANALYSIS OF THE POLICY FRAMEWORK ............................................................................................................. 87
2.1 Institutional framework ...................................................................................................................................... 87
2.2 Regulation and Support measures for SME ........................................................................................................ 88
2.3 EU assistance for supporting SMEs ..................................................................................................................... 90
2.4 EU assistance for brownfield restructuring ......................................................................................................... 92
3. ANALYSIS OF THE BUSINESS SUPPORT ORGANISATIONS CONTEXT ................................................................... 93
3.1 Mapping of the existing institutions/associations/various structures ................................................................ 93
4. CONCLUSION ...................................................................................................................................................... 104
SLOVENIA: Mura - Murska Sobota ................................................................................................................................ 107
1. ANALYSIS OF THE ECONOMIC CONTEXT ............................................................................................................ 107
1.1 Overview of the economic-entrepreneurial context (at regional level) ............................................................ 107
1.2 Main sectors...................................................................................................................................................... 110
1.3 Analysis of emerging potentials (sectors) at regional level .............................................................................. 112
2. ANALYSIS OF THE POLICY FRAMEWORK ........................................................................................................... 113
2.1 Institutional framework .................................................................................................................................... 113
2.2 Regulation and Support measures for SME ...................................................................................................... 113
2.3 EU assistance for supporting SMEs ................................................................................................................... 117
2.4 EU assistance for brownfield restructuring ....................................................................................................... 121
3. ANALYSIS OF THE BUSINESS SUPPORT ORGANISATIONS CONTEXT ................................................................. 122
3.1 Mapping of the existing institutions/associations/various structures .............................................................. 122
4. CONCLUSION ...................................................................................................................................................... 125
GREECE: Drama Kavala ................................................................................................................................................ 127
1.2 Main sectors...................................................................................................................................................... 133
3.
ANALYSIS OF THE BUSINESS SUPPORT ORGANISATIONS CONTEXT ................................................................. 153

4. CONCLUSION ...................................................................................................................................................... 158
HUNGARY: West - Transdanubian Region ..................................................................................................................... 161
1.2 Main sectors...................................................................................................................................................... 167
4. CONCLUSION ...................................................................................................................................................... 199
ROMANIA ....................................................................................................................................................................... 200
4. CONCLUSION ...................................................................................................................................................... 223
SERBIA -Vojvodina.......................................................................................................................................................... 225
1.2 Main sectors...................................................................................................................................................... 228
4. CONCLUSION ...................................................................................................................................................... 236
CROATIA - Osijek-Baranja County.................................................................................................................................. 238
1.2 Main sectors...................................................................................................................................................... 243
4. CONCLUSION ...................................................................................................................................................... 311
BOSNIA AND HERZEGOVINA SARAJEVO CANTON ..................................................................................................... 314
1. ANALYSIS OF THE ECONOMIC CONTEXT ............................................................................................................. 314
1.2 Main sectors...................................................................................................................................................... 318

2. ANALYSIS OF THE POLICY FRAMEWORK ............................................................................................................ 324
3. ANALYSIS OF THE BUSINESS SUPPORT ORGANISATIONS CONTEXT ..................................................................... 332
GENERAL CONCLUSIONS OF THE CONTEXT ANALYSIS .................................................................................................. 337
INTRODUCTION
Every partner has been asked to provide a context analysis following these instructions:
1.
ANALYSIS OF THE ECONOMIC CONTEXT
1.1
Overview of the economic-entrepreneurial context (at regional level)
The Project Partner is asked to provide a comprehensive picture of the regional economy by filling Table 1 and
by explaining in a short text (10.000 characters approx.) the main features of the economic context in terms of
sectorial specialization, natural resources, transport infrastructure. In this respect the PP will have to specifically
address every thematic group of indicators(ex: foreign trade, labour, industry) delivering a brief report of main
features, of recent trends and of gaps/problems. The PP is asked not to perform a simple comment to the data but to
provide supplementary in deep information and analysis, also taking into account the results of the interviews carried
out.
Information Sources: Regional Plannings/programmes, Regional reports, economic overviews, web, interviews
1.2 Main sectors

The PP will have to deliver a specific focus for each (4.000 characters approx.) of the 3-4 leading local/regional
sectors. For each sector the PP is asked to provide a set of data: n of active enterprises, SME quota, enterprises birth
rate and mortality rate, trends of production levels, trade data (import, export, main trade partner), productivity,
employment, FDI etc. (see Table 2) .
The PP will have to deliver a brief analysis of each sector focusing in particular on aspects as the degree and
the needs of innovations in the sector, the use of locally (or foreign) developed patents and technology, the level of
connection/cooperation with research centres/institutions, the territorial concentration, the presence of FDI in the
sector, the dependence of the sector on FDI (are FDI the driving force of the sector?), the presence of a production
district. The PP will have to assess the limits and opportunities as well as the main needs and requirements of the
sector to foster further development both in terms of volumes (if needed) and (particularly) in terms of competitiveness
(research, innovation).
Information Sources: Regional reports, economic overviews, web, interviews, statistical databases
1.3 Analysis of emerging potentials (sectors) at regional level

The PP will have to assess the presence on the territory of emerging sectors which still cannot be considered as
main sectors, with a specific attention to HI-Tech/high value added sectors. The PP will have to focus on the
development dynamics of these sectors. In this respect the PP is asked to provide some evidence about the driving
forces of the emerging sectors: presence of a research centre or university, presence of a company or group of
companies, FDI inflow favoured by attraction policies implemented by national or local authorities, presence of specific
development plans, presence of incubators, BSOs, etc..
The PP will have to list existing industrial/entrepreneurial zones for brownfield/greenfield investment and
assess their saturation level in order to evaluate the need for new zones.
Information Sources: Regional reports, economic overviews, web, interviews of key actors
2.
ANALYSIS OF THE POLICY FRAMEWORK
2.1 Institutional framework

The PP will have to provide a description of the administrative institutional framework in terms of
decentralization of competences and resources with a particular reference to economic development management in
order to provide a detailed picture of competencies and responsibilities in the relevant field.
Information Sources: web, interviews
2.2 Regulation and Support measures for SME

The PP will have to provide detailed information about SMEs support policies (laws and programs at national
and regional level, incentives and funds), start up and spin off regulations (laws and programs at national and regional
level, incentives and funds), FDI attraction schemes at national and regional/local level, support measures or
programmes (incentives and funds) for Hi-Tech/high value added companies and innovation projects, programmes and
laws instituting or supporting the development of incubators or BSOs. The PP is asked to point out existing gaps in
these fields (incubators, BSOs, entrepreneurial environment, FDI attraction, advanced sector growth fostering) and to
assess intervention priorities.
Information Sources: web, interviews, databases of laws/regulations/policies
2.3 EU assistance for supporting SMEs

The PP will have to provide detailed information about specific activities supporting SMEs, start-ups, spin offs,
incubators and BSOs, developed within EU assistance schemes and EU cohesion policies. In this respect, the PP should
analyse national and regional Operative Plans, verify the presence of the relevant themes within specific priorities and
measures of the plans, assess the funds allocated to the relevant actions/measures and evaluate to what extent the
plans have been realised so far. The PP is asked to provide some basic information about fund allocation procedures
and about the implementing bodies.
Information Sources: national and regional operational plans, web, interviews
2.4 EU assistance for brownfield restructuring
The PP will have to provide detailed information about priorities and measures relative to brownfield
restructuring within existing national and regional Operative Plans in terms of allocated funds, planned and already
realized operations.
3.
ANALYSIS OF THE BUSINESS SUPPORT ORGANISATIONS CONTEXT
3.1 Mapping of the existing institutions/associations/various structures (trade-associations,

research centres, chambers of commerce, incubators, innovation and technology centres/parks, centres of
excellence.)
The PP will have to provide a description of the regional BSOs framework in order to give a detailed picture of
competencies for each BSO, types of services and consulting addressed to SMEs and start ups (who does what, how)
and highlight strengths/weaknesses of the BSOs regional system, lack of specific support services and existing
networks.
In addition, for each BSO, PP will have to fill in the table 3.
4.
CONCLUSION
PP has to provide an overall summary of the previous chapters and to highlight the main features
(opportunities, limits, needs, points of strength, potentials...) of the analysed context. (2 pages)
ITALY - Friuli Venezia Giulia Region
1.

1.1 Regional economy
Table 1:
2004
2005
2006
2007
2008
31.415,9
0,5
32.532,7
2,1
33.962,3
2,2
35.380,6
1,9
n.a.
O,2
n.a.
25.300
26.200
27.500
n.a.
2,2
27,7
70,0
2,0
2,2
27,5
70,2
0,9
2,2
27,9
69,8
4,4
2,3
27,6
69,9
5,4
n.a.
n.a.
n.a.
-4,6
102.378
102.456
102.397
101.097
100.423
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
99,8
98,7
n.a.
99,8
98,8
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
500
504
519
522
522
n.a.
n.a.
n.a.
n.a.
n.a.
Services
64,2 %
Industry
32,8 %
Agriculture
3,0 %
Services
62,5 %
Industry
34,7 %
Agriculture
2,7 %
Services
63,4 %
Industry
33,8 %
Agriculture
2,8 %
Services
63,4 %
Industry
34,1 %
Agriculture
2,5 %
Services
63,6 %
Industry
33,7 %
Agriculture
2,5 %
n.d.
85.459
86.556
85.997
STRUCTURE
GDP (mln Eur)
GDP ( y/y)
GDP per capita
PPP (Eur)
Structure GDP
(%):
Agriculture
Industry
Services
Industrial output
(y/y)
N active
companies
Total turnover
(mln Eur)
% of SME
turn./Total Turn
SME per sectors
(%):
Agriculture
Industry
Services
EMPLOYMENT
Total
employment
(.000)
% SME emp. on
tot. emp.
Employm. per
main sector:
Sector A (%)
Sector B (%)
Sector C (%)
Value added per
employed (Eur)
(industry without
constr.)
Average gross
wage (Eur)
Unit labour cost
(Eur)
Labour
productivity (y/y)
(nominal)
Unemployment
(%)
Unemp. per
educat. Level:
Primary
Secondary (vocat.
or else)
Tertiary
(university)
FOREIGN TRADE
Import of goods
(mln Eur)
1. good category
(SITC 2digit)
2. good category
n.d.
1,653
n.a.
1,721
n.a.
1,796
n.a.
n.d.
-0,6%
3,5
3,4
4,3
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
5.002
5.235
5.626
6.670
7.464
67. Iron e steel

574 mln
78. Road Vehicle
67. Iron e steel

672 mln
28. metallif. ores
metal scrap
67. Iron e steel

771 mln
68. nonferrous
metals
67. Iron e steel

1.557 mln
28. metallif. ores
metal scrap
305
281
67. Iron e steel

1.101 mln
74. general
industrial
machinery and
equipment,
n.e.s., and
machine parts,
n.e.s.
418
68. nonferrous
metals
28. metallif. ores

metal scrap
68. nonferrous
metals
28. metallif. ores

metal scrap
305
263
2. good category
n.d.
1,3%
4,1
284
Export of goods
(mln Eur)
1. good
category(SITC
2digit)
n.a.
2,0%
3,9
378
3. good category
n.a.
405
9.886
9.643
11.074
12.413
82. furniture and

parts thereof;
bedding,
mattresses,
mattress supp.,
cushions and
similar stuffed
furnishings
1.624 mln
82. furniture and

parts thereof;
bedding,
mattresses,
mattress
supports,
cushions and
similar stuffed
furnishings
1.562 mln
74. general
industrial
82. furniture and

parts thereof;
bedding,
mattresses,
mattress supports,
cushions and
similar stuffed
furnishings
1.565 mln
82. furniture and

parts thereof;
bedding,
mattresses,
mattress
supports,
cushions and
similar stuffed
furnishings
1.612 mln
67. Iron e steel
79. other
transport
74. general
industrial
587
74. general
industrial
machinery and
equipment,
n.e.s., and
machine parts,
n.e.s.
440
13.150
67. Iron e steel
1.658 mln
82. furniture and

parts thereof;
equipment,
n.e.s.
machinery and
equipment,
n.e.s., and
machine parts,
n.e.s.
machinery and
equipment, n.e.s.,
and machine parts,
n.e.s.
5.448
74. general
industrial
machinery and
equipment,
n.e.s., and
machine parts,
n.e.s.
1.279
5.742
bedding,
mattresses,
mattress
supports,
cushions and
similar stuffed
furnishings
1.500
74. general
industrial
machinery and
equipment,
n.e.s., and
machine parts,
n.e.s.
1.339
5.686
907
1.098
74. general
industrial
machinery and
equipment,
n.e.s., and
machine parts,
n.e.s.
869
4.883
67. Iron e steel
73. metalworking
machinery
804
1.060
4.407
Germany
2.126
France
1.499
United Kingdom
1.360
n.a.
Germany
2.305
France
1.201
Austria
866
n.a.
Germany
2.418
France
1.287
Austria
962
n.a.
Germany
2.671
France
1.628
Austria
1.110
n.a.
Germany
2.768
France
1.344
Austria
1.211
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
1.304
1.280
3. good category
Trade balance
(mln Eur)
Main trade
partners:
1. partner
(county+mln Eur)
2. partner
3. partner
FDI inflow (mln
Eur)
Main FDI sectors
Sector A
(Cumulate data)
Sector B
Sector C
The Autonomous Region Friuli Venezia Giulia is located in north-eastern part of Italy and is
bordering with Slovenia and Austria. With a land area extension of 7.858 sq/km and a population of
1.222.061 (2007 data) has a population density of 155,5 people per sq/km (197 is the average density of
the 21 NUTS 2 Italian regions). The morphological conformation of the territory is varied as is composed by
the Alp system in the northern part, a hill system along the Alps and along the border with Slovenia and a
plain in the middle that extends to the Adriatic coastline (South) and towards Veneto Region (West). The
territory is administratively divided in 4 (NUTS 3) Provinces (Trieste, Udine, Gorizia, Pordenone) and 219
municipalities (comuni).
Infrastructure
Friuli Venezia Giulia is small in size, but its geographical location has taken on a new strategic value
with the enlargement of the European Union. In terms of transport infrastructure Friuli Venezia Giulia has a
considerable gap in terms of capacity in european terms. This deficit is qualitative rather than
quantitative. In particular the road and rail networks are still waiting investments. The realization of the
high speed rail network are just part of future plans in FVG, while the widening of the motorway
backbone Venice-Trieste, that with its two lanes is considered a bottleneck along the east-west roadroutes, is slowly entering the executive phase.
The motorways network is more than 200 km long and mainly consist of the West-East stretch
Venezia Trieste - Slovenia1 of the Pan-European Transport Corridor V (Barcelona Kiev), of the branch to
Udine, Tarvisio and the border with Austria and two shorter branches to Gorizia and to Pordenone. There
are two truck ports in Gorizia and Fernetti, both on the border with Slovenia and directly linked with the
Italian and Slovenian motorway network.
The railways network consists of around 500 kilometres of track, with the two twin-line
backbones Venice/Mestre Trieste and Trieste Udine Tarvisio which was recently modernised
between Udine and Tarvisio, with a capacity of 220 trains per day and the possibility of transiting at 200
kilometres per hour.
The ports of Trieste, Monfalcone and Porto Nogaro are the three most northerly ports of the
Mediterranean and can handle every kind of cargo. Trieste port is the Italian port with the greatest capacity
of covered storage: 500 thousand square metres of warehouses and a surface area of over 2.3 million
square metres (of which 1.6 million in the free port area), 12 kilometres of wharves and a rail network of
seventy kilometres of track. With an 18-metre-deep sea floor is one of the very few Adriatic ports that can
dock huge intercontinental cargo-liners. The three ports are linked with the rail and motorway networks.
The regional airport Ronchi dei Legionari (situated 30 km from Trieste and 40 km from Udine) is
directly connected to the motorway network: a dozen airlines operate out of the airport, offering regular
national and international flights which include destinations in Eastern Europe.
The intermodality is guaranteed by the Cervignano Terminal (with a central location in the region),
which has been in operation since 1988 and is capable of handling 350 thousand tonnes of goods per year.
1
This part of the motorway network will be upgraded soon to increase its capacity. The widening from two to a three lane
motorway is in the planning phase.
Economic structure
The structure of the economy is typically post-industrial, with a neat prevalence of the services
sector, which participates with a quota of over 69% to the formation of the regional value added. The
primary sectors contribution to the Value added formation is 2,3% while industry (construction included)
contributes with a 27,6% quota. In 2006 the per capita GDP at PPS was 27.500 Eur, 116,5% of the EU
average. In the last years the regional economy proved to be more dynamic than the national economy as
GDP growth has been well above national levels.
The agriculture forestry and fishing sectors contribution to the regionals value added has been
stable in the last decade with a quota next to 3%. In the last years this quota has been slightly eroded as the
sectors growth rates remained stable while the growth of the tertiary accelerated.
The most
representative product of the Friuli plain are cereals, in particular corn, while the prevalent culture of the
east hill system and the southern part of the plain are vineyards. Cattle breeding has an important role in
the agricultural sector as well as meat and milk production.
The services sector contributes to the formation of the regional value added with a 70% quota,
which has been stable over the last period. Financial intermediation and insurance are well developed and
Trieste is well known for being home of some important national and international groups (ex. Generali).
Financial intermediation, real estate intermediation and business services together contributes by 26% to
the V.A. of FVG (2000 data). Trade, tourism, transport and communication services contributes by 23,9% to
the formation of the V.A. of FVG (2000 data). The Tourism sector has developed well in last decades. In
2008 tourist arrivals totaled 1.954.605 with 8.880.902 registered overnight stays. The quota of foreign
tourists overnights was 42% in 2008. Sea resort of Lignano and Grado account for almost 75% of all tourist
overnights while mountain resorts account for nearly 17% of the total. Public administration, health,
education and social services account for 19,9% of the regional V.A. (2000 data).
In line with the tertiaryzation trends, the contribution by the manufacturing sector to the
formation of the regional value contracted from 20,5% in 2000 to 18,2% in 2008. The contribution by single
sub-sectors to the manufacturing value added in 2006, clearly indicates the regional industrial
specialization: machinery & equipment included means of transport (30,5% of the total regional
manufacturing value added), metals and metal products (23,5%), wood and rubber products (22,8%), food
and beverage (6,9%). The first sector, machinery & equipment included means of transport, is mainly
composed by the production of home appliances, machines for industries and the important shipbuilding
industry. The home appliances and the shipbuilding sectors are dominated by two big players, the
Electrolux and Fincantieri, one of the world leaders in merchant and naval vessel construction. In 2008 the
industrial sector was hit by the international crisis and after a long time industrial production recorded a
negative growth (-4,5% compared with 2007). An open economy with an export based industrial sector is
very exposed to the dynamics of the foreign demand that during 2008 started to shrink. Data about new
employment in industry per sectors show which sectors has been hit harder by the crisis. In fact while in
the biennium 2006-2007 nearly all manufacturing sub-sectors registered a growth in yearly new
employment in 2008 most of the subsectors decreased new employment: wood and furniture -31,8%,
metals -33,8%, mechanics -7,5%, rubber and plastic -13,1%. In total, the manufacturing sector recruited
26.910 workers in 2008 with a decrease of -15,5% compared with 2007 levels.
One of the main characteristics of the FVG economy is a entrepreneurial system mainly based on
small and very small enterprises. In fact, the average number of employees per enterprise in the services
and industry sectors was 4,3 in 2006: in the services sector the average number of employees was 3,1 while
in the industrial sector the average number was 7,3. A considerable part of the small enterprises in the
services and industrial sector are craft enterprises. Statistical data for the year 2008 indicates that the
quota of craft enterprises were: 76,3% in industry (67,4% in the manufacturing, 83,4% in the construction
sector), 17,5% in the services sector and 2,9% in agriculture.
Thus, the SMEs represent the 99% of the 100.423 active enterprises at the end of 2008. As far as
the enterprises birth rate is concerned, in 2008 the FVG Region is among the five Italian regions that
registered a decrease in the total number of active enterprises (-0,7% compared to 2007). The 2008 data is
not an isolated data as this negative trend has been steady in the last ten years with a contraction of about
4,8% in the enterprise population (in 1997 there were 105.500 active enterprises). In the last decade the
changes were not just quantitative. In fact the enterprises population has undergone structural changes in
terms of single sectors quotas, rendering the regional productive structure more similar to the overall
national. In particular, the main changes were registered by the agriculture forestry and fishing sector that
experienced a noticeable decrease of the number of active enterprises from 30.067 in 1997 to 19.139 in
2008. Thus, the quota of enterprises operating in this sector decreased from 28,5% in 1997 to 19,1% while
in the same period at national level the quota decreased from 23,5% to 17,2%. The other sectors remained
more or less stable in terms of quotas, with variations that compensated the contraction in the primary
sector. Statistical data reveal a slight growth trend in the construction and services sectors and a slight
contraction trend in trade and manufacturing sector. In 2008 the regional trade sector accounted for 23,5%
of the active enterprises and this quota has remained stable in the last ten years and few point below the
national average. In 2008
more than 15.000 enterprises were active in the construction sector
representing a quota of 15,4% of the entire regional enterprise population (13,5% at national level), while
the manufacturing sector weights 12,3% in terms of enterprises population and has been stable over the
last decade and slightly above the national average.
All the above mentioned data clearly indicates some important peculiarities of the FVGs economy:
the average dimension of enterprises in terms of employed are small or very small (both in industry and
the service sector), the average dimension of FVG enterprises is smaller than the Italian average, compared
to the Italian average the form and the capital structure of the companies is more traditional (family
business). These elements, that for a long time has been regarded as a strength of the Italian widespread
enterpreneurship model, in the last decade has turned into a weakness. In fact, in a time of growing
international competition, small and very small companies usually are suffering from: undercapitalization,
difficult generational turnover, lack of managerial skills, high dependence on single buyers etc.. Companies
coping with such problems usually find it more difficult to internationalize, to finance investments, to
analyze their competitive position on the markets etc.. In short, the operational flexibility that is one of the
advantages given by the dimensional factor is not supported by an adequate strategic flexibility that means
the capacity to modify some strategic aspects of the companies as products, markets, organizational
processes and structures, ownership, management.
Despite the above mentioned problems that are being talked with some success, the FVG economy
is dynamic and is part of the so called Italian North-East (Trentino Alto Adige, Veneto and Friuli Venezia
Giulia regions) that is one of the driving areas of the national economy. The productive base is mainly
export oriented and the foreign trade data in table 1 are self evident: the export (13,1 billion in 2008)
nearly doubles the imports(7,5 billion in 2008) with a trade surplus that in 2008 reached 5,7 billion .
Thus, nothwistanding existing dimensional problems, the regional productive system has so far been able
to consolidate a remarkable presence on international markets. The foreign trade results are due to the
presence of some succesfull big enterprises as well as to a vast number of SMEs concentrated in specific
areas with particular productive specializations. This system of widespread entrepreneurship in specific
areas brought to the development of productive districts. Nowadays FVG has ten different productive
districts: coffe, chair production, piasentina stone, digital tech, food, thermo-mechanics, cutlery,
mechanics, furniture, shipbuilding.
The innovation potential and capacity of the regional productive system is good if compared to
other Italian regions but insufficient if compared to some other EU regions. Table 2 data taken from the
2006 European Regional Innovation Scoreboard (2006 RIS), the last regional innovation scoreboard,
indicates the position of FVG among EU 25 NUTS 2 regions and among Italian regions in terms of innovation
capacity. The RRSII - Revealed Regional Summary Innovation Index is calculated on the basis of seven
indicators and is calculated as the weighted average of the re-scaled values of the other two indexes (RNSII
and REUSII)2. The RRSII index locates local leaders in terms of innovation capacity and performance by
taking into account the regions relative performance within the EU and the regions relative performance
within the country.
Indicators
Italy
Knowledge workers and graduates in Science & Engineering (S&E)

Life long learning participants
Public spending in R&D
Private spending in R&D
Employment in medium and high-Tech Manufacturing
Employment in high tech services
Patents applications at the European Patent Office (EPO)
56
64
82
45
109
95
57
RNSII (Regional National Summary Innovation index)

0,49
REUSII (Regional European Summary Innovation index)
0,42
RRSII (Revealed Regional Summary Innovation index)
Source: European Regional Innovation Scorebord (2006 RIS) November 2006
Friuli
Giulia
55
79
90
47
127
80
87
Venezia
0,50
0,42
0,44
The European Regional Innovation Scorebord (2006 RIS) reveals that in terms of RRSII, Friuli Venezia
Giulia ranked 95th among 208 EU 25 NUTS 2 regions with a 0,44 score. The EU RRSII mean was 0,54. Three
Italian regions ranked better (Lazio 44th wits a 0,57 score; Lombardia 71st with a 0,49 score; Emilia Romagna
81st with a 0,47 score) and one (Liguria 94th and a 0,44 score) shared the same result.
As for the Innovation capacity and potential is concerned, different analysis convene that at
national level the FVG is one of the leading regions in terms of base research, in terms of human resources3
and R&D public spending. Nevertheless, as Italy is ranked low on EU level in terms of innovation capacity,
the national average cannot be considered a valid indicator in broader international terms. Anyway, two
RNSII (Regional National Summary Innovation index) s defined as the relative average of the regional innovation indicators
compared to the average overall country's indicators while REUSII (Regional European Summary Innovation index) is defined as the
relative average of the regional innovation indicators compared to the average of the European Union.
3
Particularly researchers in research centers, on the other side the scolarization level (secondary and tertiary) of the active
population, although higher than the national average, is lower than in bordering countries. A positive trend regards the increasing
incidence of graduates in science and engeneering that in the last years grew to some extent above the EU average levels.
universities, some important international research centers (ex. SISSA International School for Advanced
Studies; ICTP - International Centre for Theoretical Physics; Synchrotron Light Laboratory ELETTRA;
Unido/ICS - International Centre for Science and High Technology) and technologic parks of national and
international importance (ex. Area Science Park of Trieste and Scientific Park Danieli in Udine), form a
relevant regional research potential. On the other side there are some critical elements that penalize the
regions innovative potential as in particular a low level of private spending in R&S, scarce patents
applications and a deficit in the regional technology balance of payments4. These critical factors indicates
that the technology transfer process is still too weak. Most of the hi-tech SMEs are concentrated next to,
or better are working within existing technological parks and thus have very strong links with public
research institutions. In this respect the role of tech-parks is of primary importance but their spin-off and
spillover effects are still spatially too concentrated/limited. There are few big enterprises with strong R&S.
The reasons for this weak transfer can be found both in the research centers whose activities are
sometimes too distant from real SMEs needs but also in some structural deficiencies of the enterprises
sector itself . In particular, enterprises demand for innovation and research is low, mainly due to the fact
that the regional productive base is still dominated by traditional sectors that for some decades managed
to foster their competitiveness just through an increasing territorial specialization, a sort of innovation
without research model. Nowadays this model is not suitable to cope with global competition.
Furthermore, the dimensional factor play again a role as most of the small and very small enterprises do
not have the internal competencies to take advantage of existing know-how and technologies. Currently
the AREA Science Park is involved in creating a network of centres throughout the region which operate as
driving belts between the demand for innovation originating from businesses and the supply provided by
the technological and scientific system. The first of these centres was established at San Giovanni del
Natisone, in the chair producing industrial district. Furthermore, with the backing of and with the aim of
fostering and supporting the process of management and technological innovation, the regional
administration backed the establishment (1989) of Agemont, an agency for the economic development of
mountain regions. The mountain area still suffers from marginality and its negative demographic trends
human resources has been.
In 2005 the technology balance of payments of the region FVG was -35 millions Euro and in the last decade was mainly negative. A
negative balance indicates that the territory is a net buyer of technology: ex. patents, inventions, rights, trade marks etc..
Labor
In terms of human resources, FVG region has a mixed score. In fact, on the one side the regional
economy can rely upon a significant number of highly qualified resources, but this asset cannot be fully
exploited as the high tech enterprise sector in FVG is developed less than it is on average at national level.
The economic growth registered in the last five years has favored positive trends in the labor
sector. Unemployment reached record physiological low levels (3,4% in 2007) in the last period while
activity rates grew (68,5% in 2007) thanks to an increase in female occupation. These trends has
deteriorated in 2008 as the international financial and economic crisis hit the regional economy. As far as
the sectoral occupation is concerned, in the last five years data show a slight yet steady decline of the
occupation in industry and agriculture while positive trends in the services sector seem to compensate the
trends in the primary and secondary sectors. The ongoing crisis seem to further strengthen these trends.
In 2007 foreigners constituted the 12,8% of the total stock of employed in the region: 46% in the
services sector (mainly domestic services and restaurants), 29% in industry (in particular metals, mechanics
and wood), 14,3% in construction and 10,4% in agriculture and fishing. Immigrant workers have been
crucial for the development of the regional economy as the demand for immigrant workers grew steadily in
the last decade but in 2008 the immigrant component, in particular the non EU component that is the
biggest immigrant component, was the most hit by the crisis.
Foreign trade
As mentioned above, the regional productive system has so far been able to consolidate a
remarkable presence on international markets. FVG region is a net exporter, with exports that nearly
doubled imports in recent years. In fact exports represent 172% of imports in 2008. Table 1. data show
that both import and export flows grew rapidly in the considered period. In 2008 exports growed by to
5,9% in nominal terms, slowing down from the 12,1% growth rate reached in 2007. Notwithstanding the
slowdown caused by a general contraction of the foreign demand caused by the international crisis, the
FVG export performance in 2008 has been superior to that of nearby Italian regions (-0,5% north-east) and
Italy as a whole (0,3%). Imports registered a slowdown too, growing by 11,9% in 2008 after a 18,6% in
2007. Trade balance was stable at 5,7 billion euro in 2008.
As far as the product categories in foreign trade flows is concerned, FVG exports mainly furniture,
base metals as iron and steel, special and general machinery and other transport equipment (ships). The
category other transport equipment is subject to big yearly oscillations as production cycles of big ships are
long. On the import side, FVG imports raw materials as metalliferous ores, iron and steel, road vehicles, non
ferrous metals and general machinery.
In 2008 exports of iron and steel industry grew considerably, while furniture returned to a
downward trend confirming some structural problems. The machinery and electric equipment and optical
products sectors stagnated while export of food and beverage contracted markedly. The EU markets are
the main destination of FVG exports, accounting for 56% of total exports of the region in 2008. Exports to
EU markets decreased by 3,5% compared to 2007, in line with the overall national trend (-3,7% the
contraction of Italian exports towards EU). Exports to Euro area countries -2,4% decreased less than exports
to non Euro EU countries (-6,8%). In terms of single trade partners, Germany is by far the most important
both in export and import, followed by France, Austria, Russia, Slovenia and the United Kingdom and China.
Among FVG main trade partners, France and China register the most uneven results as the first is a strong
export and weak import partner, while China is strong just as import partner. Trade flows with United
Kingdom are subject to fluctuations as times of ship deliveries varies significantly. The other main trade
partners have more equilibrated flows. Nevertheless, FVG have a trade surplus with all the main trade
partners, China excluded.
With the beginning of the EU enlargement process and the enlargement itself, the relevance of new
member states increased in terms of FVG foreign trade flows. In the 2000-2008 period FVG exports and
imports with new EU member countries from eastern Europe more than doubled. In terms of market
quotas, the quota on total FVG exports of exports to the ten new EU members from eastern Europe grew
from 7,9% to 12,8% between 2000 and 2008 while imports quota grew from 13,1% to 16,7%. In the same
period, the quota on total FVG exports of exports to western Balkan countries grew from 3,4% to 5,0%
while the imports quota diminished from 3,6% to 3,2%. Exports to the above mentioned east European
markets are concentrated in the FVG traditional productive sectors: furniture and semi finished parts of
furniture, general and special machinery, electric equipment, iron and steel and metal parts. On the import
side, FVG imports from new EU member states mineral ores, wood and furniture parts, iron and steel and
special and general machinery while from and western Balkan countries mineral ores, wood and furniture
parts.
The International crisis is having a considerable impact on FVG foreign trade flows. In the first half
of 2009 total exports decreased by 23,3% compared to the same period of the previous year (from 6,8 to
5,3 billion Euro), while imports decreased by 32,9% (from 3,7 to 2,5 billion Euro). In terms of geographic
distribution of trade, contractions were homogeneous between the different areas: exports towards EU 27
contracted by 23,3% in the first six months compared with the same period of the previous year while
imports from EU 27 decreased by 35,1%; export toward New member states decreased by 26,7%, while
imports contracted by 35,1%, exports toward western Balkan countries contracted by 23,4% while imports
contracted by 36,8%. None of the traditional export or import markets collapsed more than others. As far
as the product composition of trade flows is concerned, none of the sectors has collapsed and the product
composition resembles largely the pre crisis composition. If we consider quarterly trade data, in the second
quarter there was a remarkable upturn in terms of flows compared with the first quarter.
1.2 Sectoral focus
Mechanics
Table 2: to fill in for each of the leading sectors

N active enterprises
SME quota (% on total)
Total turnover (mln Eur)
Output volume (y/y)
Employment (n)
Av. gross wage (Eur)
Unit labour cost (Eur)
Productivity (y/y)
Value added per employee (Eur)
Import (mln Eur)
Main import partners:
1.
2.
3.
Export (mln Eur)
Main trade partners:
1.
2.
3.
Trade balance (mln Eur)
FDI in the sector (cumulate mln Eur)
2006
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
827
2007
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
1.220
2008
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
1.237
Germany
204
France
71
China
53
3.867
Germany
310
Hungary
88
China
84
4.674
Germany
286
China
113
France
90
4.725
Germany
346
Spain
269
France
265
3.040
n.a.
France
462
Germany
444
Russia
262
3.454
n.a.
Germany
422
Russia
303
France
300
3.488
n.a.
Mechanics is one of the more representative sectors of Friuli Venezia Giulias manufacturing. As it
appears from foreign trade data, the sectors export accounts for 36% of total FVG export. Geographically
the sector is concentrated in Udine and Pordenone Provinces, although in Trieste Province there are few
big players (ex. Wartsila production plant world leader in marine motors). The sector is no exception to
the general characteristic of a productive base mostly made up of SMEs, though a difference that emerges
is the presence of several important big players (ex. Zanussi-Electrolux, Luvata, Rhoss), most of them
foreign owned. A significant quota of operating SMEs grew as spin-offs of these big enterprises and are
working in close cooperation with them as outsourcers. The most representative subsectors are: metal
working (light carpentry), special machinery, general machinery (household electrical appliances, cooling
and heating systems, generators, automotive, metal products or parts, industrial general and special
machinery). The growing cooperation between the different subsectors rendered possible not only to
optimise competencies and quality vertically along single subsectors productive chains, but also
horizontally within specific phases of production of different subsectors. The territorial concentration in the
Pordenone Province and in the nearby area of Udine Province leaded to the development of two districts
(mechanics in Pordenone and Thermoelettromechanics in the so called Medio Friuli - western part of the
Udine Province) that in 2009 merged to constitute a single organized district (COMET-distretto della
componentistica e termoelettromeccanica).
Although the sector generally reached very high quality standards, the growing global competition
together with a deteriorating international economic climate put in evidence several weakness factors.
Weaknesses are largely related to the average small dimension of the enterprises. In fact, small
enterprises are highly dependent on the big players operating within the territory both in terms of turnover
and in terms of technological capacity. Working on order as outsourcers for big enterprises generally
renders small enterprises poor innovators as technology is being supplied by big players that usually are
also the main buyers if not the sole buyers. Therefore small firms do not need to develop an in house
innovation capacity nor they have the resources to do so. Although their production is based on a high tech
platform, usually such firms find it very difficult to escape this job on order-trap and to develop an
autonomous growth path both in technology and market terms. Small firms typically have low export
levels as they do not need nor they have the resources generally to be operative on foreign markets.
Strong exports figures shown by statistical data are realized mostly by big enterprises and less by the
medium sized enterprises.
In the last decade, the increasing global competition, the stiffening of market conditions and at last
the recent International financial and economic crises had a negative impact on the big enterprises. Small
companies that are mainly highly dependent on bigs health resulted severely affected, in particular
during the last year.
As interviews showed, small entrepreneurs wish to become more independent both in terms of
market/buyers and in product/technology development, but as they refer, their efforts to reach both goals
has been generally unsuccessful because they are short of resources (that must be employed in
production), and because they have an insufficient knowledge of foreign markets. As they point out, their
main advantages and strengths lie in the high flexibility given by small dimensions and in the hi-tech
production technology. As far as foreign trade is concerned, SMEs generally indicates that the formation of
consortia should be the instrument to bridge the dimensional gap. However, as executives of sectoral
districts pointed out, competition among the vast population of SMEs operating in the same sector on the
same territory is so high that turning cooperation ideas into reality is usually a very hard task.
As far as institutional support is concerned, small firms point out that eligibility criteria of
available instruments sometimes turn to be too high for small firms, especially in terms of capital and
financial adequacy5.
The ongoing financial and economic crisis has generally brought SMEs to adopt a mere fight for
survival agenda, while at the same time is contributing to form a new strong awareness of the need for
strategic changes in their business model. A part from a desperate call to the banks to restore the normal
credit activity, which is generally considered the main problem in the short run, SMEs point out two specific
needs: a support for the development of their innovation capacity; a direct support in accessing foreign
markets. As observed, usually SMEs are as good in producing as they are weak in terms of commercial
capacity. Some of them pointed out that they have problems in communicating their quality
At the moment the District organization can answer only partially to these needs. In fact it develops
innovation projects not customized on single companys needs but projects whose results must be directed
to the majority of the district members: for example, energy saving in the refrigeration machines sector or
the promotion of the lean production model (Toyota model) to increase efficiency. The District is working
within the Polo Tecnologico di Pordenone and is involving in its projects several existing laboratories. The
organization does not manage any credit line and the only funds it manages are those relative to single
projects budgets usually financed by the regional administration. As far as the potentials and perspectives
of the sector is concerned, from the District point of view the ongoing crisis is accelerating the natural
selection process among the enterprises population. The hi-tech production platform and the skill
developed are the main assets on which SMEs should count. The skills matured in working with advanced
materials and precision techniques so far, could be an opportunity to promote a sectoral re-orientation6.
As an example, the general condition to obtain resources available through a regional law to promote the internationalization
process was the yearly doubling of the turnover.
6
The biomedical sector is regarded to be one of the main opportunities.
Wood-Furniture

Output volume (y/y)
Employment (n)
Productivity (y/y)
Value added per employee
(Eur)
Import (mln Eur)
1.
2.
3.
Export (mln Eur)
1.
2.
3.
FDI in the sector (cumulate
mln Eur)
2006
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
2007
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
2008
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
444
468
381
Austria
94
Croatia
54
Slovenia
42
1.689
Austria
92
Croatia
53
Slovenia
52
1.757
Austria
75
Croatia
48
Slovenia
35
1.637
Germany
282
United Kingdom
267
France
219
1.245
n.a.
United Kingdom
309
Germany
257
France
224
1.288
n.a.
United Kingdom
259
Germany
219
France
211
1.255
n.a.
Furniture production is one of the traditional specializations/sectors of the national and regional
manufacturing. The sector is made of two subsectors, wood and furniture, which are quite different in
terms of trends and markets. Furniture in particular is one of the four pillars of the so called Made in Italy
together with textile/fashion, food and industrial machinery. Although the trade balance of the sector is
extremely positive, during the last years the sector faced a decreasing internal demand and most recently,
a sharp decrease in the international demand caused by the ongoing financial and economic crisis and a
prolonged weakness of some key markets (Russia in particular).
Unfortunately statistical data are just partially available. The sector is territorially concentrated in
the province of Udine and the province of Pordenone. A part from few big actors, most of the enterprise
population in this sector is composed by small and medium enterprises. There is poor evidence of FDI
presence.
Small enterprises usually have developed a very specialized production. This extreme
fragmentation of the production process is at the same time the strength and the weakness of the sector.
In fact, on the one side this extreme specialization rendered possible to reach a top end quality in terms of
processing and workmanship while keeping costs and prices at a competitive levels. On the other side this
parcellization/smallness bring about several weaknesses. First of all small dimensions render difficult for
the enterprises to develop a sufficient R&D. Although the technological level is generally very high if
compared to other international competitors as well as compared to other national furniture districts, the
competitive margins are subject to a gradual erosion if not continuously nurtured. Usually there are few
bigger players that can afford a better R&D while smaller or micro players tend to copy the bigger ones. An
effective cooperation with research centres is thus wished. Secondly, the Italian and the European system
of protection of the intellectual property is deemed disastrous. Small enterprises cannot afford financially
and timely very expensive trials to legally pursue third parties. SMEs thus seem not to have any protection
in this field. Thirdly, small and micro enterprises find it very difficult to internationalise especially in terms
of new market search. The Italian network of institutions that should be assisting the SME in foreign
markets is largely ineffective compared to other Eu countries (ex Germany). Fourth, although the financial
network and the instruments rendered available at home are considered sufficient, export finance and
insurance is not effective. Thus SME cannot afford to participate to large international contract
procurements (alone or as a group) because they simply cannot afford to take all the risks.
To overcome the dimensional problem, in the last decades some enterprises have aggregated in
groups in order to benefit from a better coordination of the production cycles and as well as to develop a
common access strategy to foreign markets. Notwithstanding the efforts of the BSOs to promote
aggregations, this path was chosen by a minority of enterprises as competition within the sector is still
strong.
In terms of governance, the family businesses have poor diagnostic capacity to understand their
competitive positioning on the markets or to optimise the administration of the business. Furthermore,
small SMEs that usually base their quality and cost competitiveness on a simple work very hard model,
have no idea of marketing techniques and often do not exploit support instruments offered by institutions
simply because they have no time as production takes it all. Is the middle sized enterprise, with a
developed organizational structure and more resources that can employ resources to exploit institutional
support programmes.
This weakness elements together with difficult international market conditions that characterized
the last decade brought a long-lasting negative trend in export. Along with the strong negative impact of
the international crisis and its direct effects on the international demand, in 2009 the regional furniture
sector is facing serious problems on the important Russian market, that in 2008 was the fourth most
important export market totalling 180 million euro. In April 2009 the Russian administration has
augmented by 50% the import duties on imported furniture and wood products.
Sector experts believe that the sector has good chances to maintain their roots on the regional
territory and continue to develop, as the quality level reached cannot be easily reached by other
international competitors, in particular Asian competitors. However, to maintain this competitive
advantage a permanent innovation and research process must support production. A recent survey on the
wood and furniture Metadistrict in the Triveneto region (Veneto Region, Trentino Region and Friuli Venezia
Giulia Region)7 carried out by Fondazione Nord Est, points out how the ongoing crisis is having a direct
impact on all considered parameters (production, turnover, orders, sales on foreign markets, occupation,
capacity utilization, stocks, raw material prices) which all register negative trends. At the moment
enterprises tend to respond to the great uncertainty by reducing its capacity utilization and just to a lesser
extent by reducing occupation. The survey reveals a high degree of consciousness among entrepreneurs,
that the crisis is having long-lasting structural effects both on the enterprises and on the consumers. In this
respect the entrepreneurs stress that the enterprises that will survive will have to start a new
development path based on an internal reorganization and on a new approach to the markets necessary to
meet the expected changes on the demand side as for example a reduction in consumer spending and a
growing demand for environmental friendly products (energy saving and biocompatible products). As far as
the perceived weaknesses is concerned, the survey confirms that the main critical factors stems from the
dimensional problem as our analysis pointed out. This factor limits the capability of operating on foreign
market activity and thus new relationships between enterprises are seen as a necessity. Gaps are perceived
also in terms of brand image. Traditional competitive factors as quality-functionality, price, delivery must
be upgraded with new factors as product innovation, quality-safety, design, brand-image new tech and
The Wood and furniture production of the three Triveneto regions represent one half of the entire national furniture
production.
biocompatibility. Grouping and cooperation, especially for small enterprises, seem crucial in order to access
foreign markets and to access the growing contract market.
Shipbuilding

SME quota (% on
total)
Total turnover (mln
Eur)
Output volume (y/y)
Employment (n)
Productivity (y/y)
Value
added
per
employee (Eur)
Import (mln Eur)
1.
2.
3.
Export (mln Eur)
1.
2.
3.
Trade balance (mln
Eur)
FDI in the sector
(cumulate mln Eur)
2006
n.a.
n.a.
2007
n.a.
n.a.
2008
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
49
50
301
Germany
13
Slovenia
19
Croatia
5
442
Slovenia
14
Germany
11
Croatia
7
448
Germany
42
Slovenia
8
Croatia
5
985
Bermuda
364
Sweden
40
Kazakhstan
13
383
Bermuda
365
Bahamas
68
Croatia
9
397
Bermuda
813
Cyprus
113
Croatia
49
684
n.a.
n.a.
n.a.
Shipbuilding and yachtbuilding represent two important elements of what in Italy is called sea
economy which comprises also maritime transport, ports and logistics, fishing and institutional activities
(navy, coast guard etc.). Both sectors have a strong tradition and are important multipliers as they have
strong links with other sectors: furniture, mechanics, electronics, tourism, etc.).
In Friuli Venezia Giulia shipbuilding has a strong, more than a century long tradition that grew
parallel with the development of port and maritime transport activities traditionally concentrated in
Trieste. Nowadays, after the collapse of public shipbuilding in the second part of the 20th century, there is
one single big player in the Region FVG, Fincantieri, a world leader in the shipbuilding industry. Its docks in
FVG based in Monfalcone are mostly dedicated to the cruise ship sector in which Fincantieri is a global
player and leader. Since 1990 the Monfalcone shipyard has delivered 25 cruise ships for a total value of 10
billion USD. As figures suggest, the companys position in social and economic terms is relevant: 1.800
employees just in the Monfalcone shipyard, 550 suppliers, mostly SMEs with some 200 million Eur of orders
per year.
The yacht building industry in FVG is composite as it comprises building yards as well as design and
engineering firms, refitting companies and support services companies. Many craft enterprises whose
activity by definition statistically does not fit into the sector, turn to work just for the sector.
Notwithstanding the difficulty to conduct a census of such a composite sector, some estimates indicates at
400 the number of companies involved with a total of 2.300 employees and a yearly income of almost 300
million Eur. The sector registered considerable growth rates in last decades and recently attracted
investments from abroad thanks to some stimulating measures implemented by the regional government.
Although we defined it as yacht building industry, the sector in FVG region can count on just approximately
30 yacht/boat-builders, while most of the other companies that are not directly involved in the
construction process, mostly deliver services.
As far as infrastructure is concerned, along its 130 km coastline, FVG region feature a total of
15.000 berths, of which 8.000 equipped in 23 marinas. These data place FVG just behind the two Italian
regions, Sardinia and Liguria, with the highest yachting vocation in terms of production and tourism.
Considering foreign trade flows, the shipbuilding/yacht building sector is of primary importance for
the regional economy as, mainly thanks to the presence of Fincantieri, it represent between 5% to 10% of
regional exports whereas at national level this quota is 1% . Yearly fluctuations in export dynamics are
considerable as delivery time for large ships is usually long and variable.
As mentioned before, Italy is a market leader in both the considered sectors but competitive
pressures are increasing. The strong growth scored in the last decade rendered the sectors attractive for
newcomers (especially in yacht-building) while existing producers tended to expand and develop their
productions. The current crisis pushes operators to move from more traditional segments to more
sophisticated ones, trying to foster their competitive advantages through research and innovation. In the
last period the regional administration together with key actors of research, maritime and shipbuilding
sectors promoted several projects in order to foster investments in Research, Technology and Development
and develop industrial innovation in the sea economy. The final goal is to develop tools for the
development of the so called regional maritime cluster.
The projects implemented so far are:

STARNETregio project (2008-2010) has been conceived to increase the overall capacity of regional
players in the regions Friuli Venezia Giulia (Italy), Slovenia and the County of Rijeka (Croatia) to invest in
RTD and carry out research activities concerning the marine industry (more specifically in shipbuilding and
port equipment), intended to strengthen the marine-sector scientific and technological basis, innovation
and business basis, sharing suitable innovation practices and policies aimed to manage and raise a network
of Marine Research driven Cluster. This endeavour will be achieved by encouraging and supporting, within
involved regions, the performance of "regional research-driven clusters", associating universities and
research centers (RTD), enterprises (industry cluster) and public regional authorities (PA), and enhance
coordination and cooperation among these regions.
RINAVE, the Consorzio per lalta ricerca navale (herein after referred as RINAVE), is a non-profit
consortium, established in May 2006 as the first step towards the creation of DITENAVE, the Technological
Marine Cluster of the region Friuli Venezia Giulia. The main objectives of the Consortium are to stimulate
and to organize cooperation among the shipbuilding industry, research centers and universities, exploiting
existing knowledge, competencies and technical equipment and to promote, carry out and manage
common research projects in the fields of architecture and engineering relevant for the marine cluster.
DITENAVE is the Technological naval and nautical district, set up by the FVG administration in 2009
together with Universities, SMEs, large industries (Fincantieri), Science Parks, Financial Institutions and
some SMEs present on the territory, with the general aim to develop a network of managed relations in
order to support technical and economic competitiveness of companies operating in the naval and yacht
building (nautic) sectors with particular reference to innovation, research and education.
Even though the DITENAVE projects general plan has been appreciated in principle by a great
majority of sectoral actors that identify it as the potential starting step of an organized production chain,
several has expressed some skepticism about the projects capability of generating positive effects on the
SMEs population. In fact, they fear that the project could turn to be too focused on the needs of large
actors, in particular Fincantieri, and that the majority of small firms operating in the sector would scarcely
benefit from the project. However, since the DITENAVE district has been launched recently and is
entering nowadays the operational phase, it seem too early to have any evidence of its effects or internal
dynamics. Some operators pointed out that the FVG
nautic sector is so fragmented in terms of
production/services and in terms of average dimensions of companies, that it would need some form of
coordination also on local level, ex. local districts. This local district should have the double role of fostering
cooperation and coordination among sectoral actors at local level and being the counterpart of the
Regional District. A limited number of local coordination bodies (districts) in areas with high specific
vocations should thus act also as a sort of transmission belt of regional projects. In fact it seems quite
difficult that very small firms could find resources to participate in complex innovation and research
projects. There is evidence that small entrepreneurs generally tend to satisfy their innovation and research
needs by turning to their relations networks, searching for solutions among other SMEs rather than turning
to existing research centers. Developing research projects within research centers with the support of
public funds could be very costly in terms of time in particular for SMEs, jeopardizing the time to market of
innovation processes. Furthermore, interviews revealed a general skepticism towards the capability of
public entities and their different support actions to effectively support the sector, in particular small and
very small firms.
A general weakness of the SMEs that apply also to the nautic sector is the poor marketing capacity.
Marketing support together with better credit access and conditions are the two main hopes expressed by
entrepreneurs and not seem to be just related to the ongoing crisis.
To foster new SMEs creation and to bridge the problem of a too conservative banking sector,
entrepreneurs wish the development of an institutional merchant banking. As far as incubators is
concerned, there seem to be some awareness of the possible positive effects for the sector, especially if
incubators would guarantee not just logistics and infrastructure but also support services and if these
entities would be managed by the same companies involved. However, although in principle the incubation
of new companies is perceived positively, there are fears about new competitive pressures this could bring.
LATISANA municipality
Half of the 8.000 equipped berths available along the regional coastline are concentrated in the
small territory of the municipalities of Latisana and the nearby municipality of Lignano. The 7 operating
tourist ports have the peculiarity that are inland ports, as they are located in the lagoon and thus are
considered very safe. The marinas infrastructures were developed just behind a stretch of the regional sea
coastline with a strong touristic vocation and tradition. The territory of the Municipality can be well
considered one of the landmarks in leisure boating not just at regional but also at national and European
level. In fact, in the last twenty-thirty years this small territory has been chosen by many renewed national
and international boatyards as their commercial and assistance centre for the Adriatic sea basin. Today,
many central and north European boat owners choose the commercial and service facilities offered in this
territory as their stepping stone for their leisure activities in the Adriatic. In the Municipality of Latisana
operate approximately 30 brokers.
Parallel with the growth of the commercial side, a strong nautical services sector grew vigorously in
order to meet the growing demand. This sector is multifaced, made up of small or micro craft enterprises,
mostly family businesses. The set of offered services is complete: refit and repair boatyards, carpentry and
mechanic services, electric and electronic services, sail and rigs services, upholstery, etc.. Local source data
indicates that just in the territory of Latisana more than 500 people work in the sector. In the last years the
national and international leisure boating sector grew rapidly and produced important spillover effects on
the territory. Although the ongoing financial crisis hit the sales of new boats, the assistance and refitting
sector seem less exposed.
One of the peculiarity of the local maritime sector is the absence of boatyards producing new
boats. This is considered a weakness by local operators as the knowhow on the territory should be better
exploited through the development of boat production. In other words, the value added potential still
waits to be capitalized. Furthermore, a potential production would take full advantage of the existing
marketing skills and structures.
As far as the maintenance and refitting sector is concerned, the two representative organizations of
the craft businesses operating in the sector, CNA Confederaziona Nazionale Artigianato
and
Confartigianato, pointed out some characteristics and existing problems that the local sector is facing.
The nautical sector in the Latisana Municipality shares with other sectors of the regional economy
the dimensional problem of the companies as most of them are micro enterprises. Small family craft
businesses are very flexible in terms of response to demand but are too small to set an autonomous
development path for their services/production supply. Furthermore, training and updating of the limited
human resources employed turn to be difficult and costly as bring to the halt of their activity. Technical
and technological skills and competencies are usually high but innovation capacity is low as small and micro
firms cannot afford investments in structures-infrastructures, as project departments, that would lead to
innovation. Nowadays, boats and yachts are getting very complex and technologically advanced products
so that the lack of project development capacity by small firms is increasingly perceived as a limiting factor.
Three seems to be the emerging needs to foster further development and to bridge existing limiting
factors:
Render the existing fragmented services supply system more organized and organic
Further stimulate the commercial activities of the territory fostering its landmark role in
the Adriatic
Development of boat/yacht construction
Particular relevance should be given to point n1 as it seem pivotal also for the development of the
remaining points. To bridge the response on demand business model8 that its characterized by a poor
control over demand dynamics and by a high degree of fragmentation, an organized services supply chain
should be developed. This organized chain should progressively become the trademark of the specific
specialization of the territory acting as a demand attraction factor. An organization that would favor SMEs
networking and aggregation should provide structures, infrastructure and services (ex. project
development capabilities, technical offices, training, etc.) that could serve small and micro enterprises that
otherwise could not develop such capacities in house.
A district should be the form of territorial organization for the nautical sector in the Latisana
territory. Although recently a Technological Naval and Nautical District - DITENAVE has been set up at
regional level and sector operators in the Latisana territory hope to benefit from the new organization in
terms of technological transfer promotion, there is a high level of consciousness that the high
fragmentation of the sector in micro units need not just regional forms of coordination but also local forms,
especially in territories with a high sectoral specialization. Furthermore, a local district should take fairly
As we have seen in previous sectoral analysis, the response to demand offer model of business is one of the most
common weakness factor in many economic sectors with high SME incidence and bring to similar problems either in
manufacturing either in the services sector.
better advantage of regional instruments and programs rather than single micro and small enterprises
would do.
The pilot action of the project should thus focus on these needs and provide a first organizational
support in the setting up phase.
Point 2 and 3 seem to take full advantage of the better organization of the service sector that could
be given by a district or some other form of organization/coordination at local level and thus further
confirm the positive potential impact on the territory of a new organizational form fostering the
development of the nautical sector.
2. ANALYSIS OF THE POLICY FRAMEWORK
Friuli Venezia Giulia Region is one of 21 Italian NUTS 2 regions. Its territory is divided in 4 NUTS 3
provinces (Gorizia, Udine, Trieste and Pordenone) and 219 municipalities (comuni). Friuli Venezia Giulia is
one of the four Italian regions (the others are Sicily, Trentino Alto Adige and Valle dAosta) that for different
economic, political and cultural reasons have a special status of autonomy. In particular, Friuli Venezia
Giulia has been given this special autonomy for historical-political- economic reasons mainly due to the fact
that after World War II FVG was bordering to the iron curtain, and for cultural reasons relative to the
ethnic pluralism on its territory.
The Special Statute of Autonomy confers legislative powers in important areas for the government
of the Region. While abiding by the Italian constitution and national law as a whole, Friuli Venezia Giulia can
promulgate its own laws in sectors such as the environment, health, industry, scientific research, culture
and housing. The Regional Council is the supreme representative body, being elected by universal suffrage
every five years. The Council is responsible for the formulation of laws and providing political orientation
for and checks on the work of the regional Executive. The president of the executive is directly elected by
universal suffrage every five years.
As formulated in article 4 and 5 of the Statute of the Autonomous Region Friuli Venezia Giulia, the
Region, ex art 4: in harmony with the national Constitution, with the general principles of the juridical
system of the Republic, with fundamental standards of socio-economic reform and the international
obligations of the State, as well as respecting the interests of the nation and its other Regions, shall have
legislative authority in the following areas: 1) the regulation of Regional offices and agencies and of the
financial and legal status of their personnel; 1-bis) the regulation of local agencies and their respective
districts; 2) agriculture and forests, land reclamation, regulation of minimum cultivation units and land
division, irrigation, farm and land improvement, zootechnics, the fishing industry, the mountain-area
economy, the forestry corps; 3) hunting and fishing; 4) pasturage and wood-cutting on public land; 5)
establishment and maintenance of land records; 6) trade and industry; 7) craft industry; 8) markets and
trade fairs; 9) roads, aqueducts and public works under local and regional management; 10) the tourist
and hotel trade; 11) transport on cablecar and bus, tram and trolley-bus lines under regional management;
12) town planning; 13) mineral waters and hot springs; 14) cultural, recreational and sports institutions;
museums and libraries under local and regional management.
Ex Art. 5 :In observance of the general limits indicated in Article 4 and in harmony with the
fundamental principles established in the laws of the State in specific areas, the Region shall have legislative
powers in the following areas: 1) supervision of referendums as laid down in Articles 7 and 33; 2) the
levying of regional taxes, as laid down in Article 51; 3) authority to review, as laid down in Article 60; 4)
public institutions of charity and aid; 5) supervision of public services under regional management and
performance of those services; 6) establishment of savings banks, rural loan funds and local or regional
agencies for financing economic activity in the Region; 7) establishment of local or regional agencies to
study programmes of economic development; 8) mines, quarries and peat bogs; 9) acquisition of property
for public use, excluding works of national government responsibility; 10) coaster trade shipping lines
between regional ports; 11) local, city and rural police; 12) use of public waters, excluding large-scale
sources; hydraulic works of categories 4 and 5; 13) post-compulsory school vocational and trade training;
school aid; 14) health and hygiene, health and hospital care, treatment for the physically and mentally
disabled; 15) cooperatives, including their supervision; 16) public housing; 17) place-naming; 18) fire
services; 19) food supply; 20) natural disaster prevention and relief.
The Region have the right to adapt the provisions of the laws of the Republic to its own specific
needs, issuing integrating measures in the following areas: 1) nursery schools, primary schools and middle
schools; 2) employment, social security and social work; 3) antiquities and the fine arts; conservation of the
countryside, flora and fauna; the other areas in which the laws of the State confer this right upon the
Region.
In 1997 a new national law, reformed the Italian administrative system introducing the so called
sussidiarity principle which establish that the administrative structure nearer to the citizen (Municipality)
must manage public life, while higher administrative levels (Provinces, Regions, State) are competent over
matters that cannot be carried out at local level. This reform, together with the implementation of a first
phase fiscal federalism, has in fact reduced the differences between special autonomous regions and
ordinary regions. In order to preserve/upgrade and adapt its special status to the new conditions brought
about by Eu enlargement and the new challenges of a changing international economic environment, The
regional administration has drawn a new Statute that has been sent to the national Parliament to be
discussed.
The regional Administration sets its development objectives through a strategic planning. The
strategic plans are set up with the participation of all the components of the regional administration. The
six year strategic plans set the objectives, while three year operative plans turn strategic long term
objectives into medium term operative objectives and set yearly expected results. Parallel to the Strategic
plan, the administration sets a Legislative plan functional to the accomplishment of the strategic objectives.
From 2007 onwards, a new financial planning scheme has been introduced: the so called new Economic
and financial regional program is made up of a regional policy program, a financial law and of a multiannual
budget and annual budgets.
The programming process of the regional administration is based upon the principle of negotiated
programming in order to coordinate the activities of the regional authority with other stakeholders at
European, national, regional and local level. The operative instruments of the negotiated programming are:
Institutional Program Understanding (the national administration and the regional administration
agree on a set of priorities of common interests to be pursued in a specific period);
the Framework Program Agreement (its the instrument to render operative the Institutional
Program Understanding; the framework program agreement involves the local stakeholders involved in the
different objective/plans);
The framework Agreements with the Provinces (agreements with each of the 4 provinces and the
regional Administration in order to coordinate actions within the regional development plan)
Framework agreements (the regional administration and other public or private entities agree and
coordinate actions of public interest).
Other instruments are the Territorial Pacts and the Area Agreements.
As for the supporting measures for SMEs, at national and regional level, there are specific
incentives and measures to support start ups and to foster industrial research, innovation, competitiveness
and internationalisation measures. In addition, special anti-crisis measures have been established to
encourage restructuring and innovation in the enterprises.
This chapter will divide and file the measures according to the area of competence (national-regional) and
the topic of intervention.
2.2.1 National level
2.2.1.1 Start ups and new entrepreneurship
With regard to incentives for start up and excluding measures addressed to innovative and high
technology start ups (see chapter related to innovation), there are 2 specific laws supporting female and
young entrepreneurship.
Female Entrepreneurship
The Law for female Entrepreneruship (L. 215/92), aims to promote equality and equal opportunities
between men and women in economic enterprises activities, in particular to promote the female
entrepreneurship, to train and qualify the professionalism of women entrepreneurs, to facilitate credit
access to businesses owned or mostly owned by women, in particular in innovative sectors.
The law 215/92 (art. 3) established the Fund for the development of female entrepreneurship, funded by
the Ministry of Industry, Trade and Crafts.
The assistance granted by Law 215 depends on various factors, like the type of investment and the region
which produces the program.
The financial support provides capital grants up to 50% of the cost of purchased equipment during the start
up, or up to 30% of costs of purchased services to increase productivity and organizational innovation.
The Fund is financed jointly by Ministry and singles regions.
Regions may enter into appropriate agreements with public and private entities that are reliable,
experienced and present in the territory of the region.
Generally speaking, the access to and the management of the fund is carried on by the territorial
competent Chamber of Commerce.
The Chamber of Commerce in addition to the duties of managing the fund, have also to promote it, through
a Committee for female entrepreneurs.
Beneficiaries are individual and cooperative enterprises with the following requirements:
1) small business
2) Management must be predominantly female, in the case of a partnerships or a cooperative the women
participation must not be less than 60% of the structure, while for the others companies at least 2/3 of
shares must be owned by women, and also the administrative body must be formed by at least 2/3 of
women.
The activities funded must address one of the following areas:
1) start up of new enterprises;
2) buying out or renting existing enterprises for at least 5 years;
3) innovative business projects, related to the technological and organizational innovation of products;
4) services intended to increase productivity, innovation, to seek new markets, development of quality
systems, techniques of production.
Investment amounts from 60.000 Euro till 400.000 Euro.
Young Entrepreneurship
Law 95/1995 promotes extraordinary measures for the promotion and development of young
entrepreneurship.
Beneficiaries are young people who form a new enterprise, with a legal form; the head, administrative and
operational offices of the company must be in the areas of law enforcement.
Companies must consists of persons aged between 18 and 29 years, and must be already established but
not have commenced operations at the time of the submission of the application.
The law for young entrepreneurship sets a limit of investment of 2.582.284,50 and the facilitation is done
through free grants contributions or soft loans.
The law recognizes facilitations for young entrepreneurship up to 90% of total investments, a percentage
that changes according to the territory.
2.2.1.2 Innovation
In Italy, there are two main funds whose resources are addressed to encourage research and
innovation in SMEs: the fund for technological innovation (F.I.T) and the fund for research incentives (FAR).
Funds are managed at ministry level and they financed several types of initiative (projects, cofinancing
ERDF programmes...).
Beside the funds, a network to promote innovation and technology transfer (RIDITT) has been activated by
the Ministry of Economic Development.
Fund for Technological Innovation - FIT
FIT, created by the Law 46/82 and managed by the Italian Ministry of Productive Activities, aims to
fund pre-competitive development activities (activities aiming to develop practical applications of
technology by starting from the results obtained in a previous phase of research). The fund can also finance
initiatives including activities not primarily of industrial research.
Beneficiaries of the fund are:
enterprise carrying out an industrial activity for the production of goods or services, or an activity of
transport by land, water or air;
agro-industrial companies that mainly carry out industrial activities;
Handicraft enterprises;
Research Centers.
Other enterprises identified by the Ministry of Economic Development through notices consortia able to
present also project in conjunction with Research Centres, like universities and research institutes.
The facilitations may be granted in soft loan or direct contribution on the eligible costs and they are
granted after the publication of calls according to the identified priorities.
In 2009, FTI supports start-up projects in high and medium high technology sectors, such as product and /
or process innovations in biotechnology, ICT, innovative materials, robotic systems and green technologies
for energy production. Resources available for the call are 35 million of euro.
Fund for research incentives FAR
FAR created by the art.5 of the DL 297/99 and redefined by the DL 593/2000, managed and fed by
the Italian Ministry of Education, University and Research (MURST), supports industrial research (the
planned research or critical investigation aimed at acquiring new knowledge, useful for the development or
the improvement of new products, processes or services) and non-dominant pre-competitive development
activities (these are eligible only if necessary for the results of industrial research).
The fund also finances projects within the National Operational Program (NOP), co-funded by the
European Regional Development Fund, the European Social Fund and the Fund for the implementation of
Community Policies.
Beneficiaries of FAR are:
enterprise that carry out an industrial activity for the production of goods or services, or an activity
of transport by land, water or air;
agro-industrial companies that mainly carry out industrial activities;
Handicraft enterprises;
Research Centers;
Other enterprises identified by the Ministry of Economic Development through notices
consortia able to present also project in conjunction with Research Centres, like universities and
research institutes.
Incentives may be granted in soft loan or direct contribution on the eligible costs of the projects
Procedures for allocating funds are different and depending on the type and goal of the eligible activities.
Activities financed following an evaluation procedure consist in projects autonomously presented with the
aim to realize research activities at national level; realize research activities within programs or
intergovernmental agreement for cooperation; realize training activities for researchers and research
technicians of the industry sectors and industrial research centres; realize research activities proposed by
start ups.
Activities financed by the negotiation processes are research and training projects presented for realizing
specific goals and specific programming initiatives.
Activities financed by automatic process are: recruitment of qualified personnel for research, for specific
external orders and contracts of research, for scholarships and for PhD; temporary secondment of public
research staff; bonus for research projects already funded by the European Framework Programs for
Research and Development.
Law 598/94 SMEs Innovation
The Law 598/1994 promotes Italian SMEs investments for technological innovation and
environmental protection, in particular for the purchase of new machinery and equipment. Incentive
consists of a reduction in the interest rate of bank financing and is made operational through the
establishment of regional calls. The maximum incentive amount can reach 70% of the investment plan.
Companies engaged in the following sectors are excluded: steel industry, fisheries, shipbuilding,
transportation, manufacture of sugar, tobacco industry.
Italian Network for the dissemination of innovation and technology transfer to enterprises (RIDITT)
The Ministry of Economic Development has promoted since 2003, the initiative RIDITT, managed
by the Institute for Industrial Promotion (IPI), in order to improve the competitiveness of the productive
system through the enhancement and integration of the innovation services supply.
The Italian Network for the dissemination of innovation and technology transfer to enterprises (RIDITT)
provides information and training services and develops pilot projects aimed at promoting innovation and
technology transfer in the production system, with particular attention to the needs of small and medium
enterprises.
The objectives of the network are:
Adjust methodologies and tools for technology transfer to national and international excellence;
Deepen knowledge of drivers and innovation barriers in small and medium companies of different
sectors;
Promote the specialization of national innovation systems around clusters divided in different
technological area;
Stimulate the dawn and growth of new companies able to exploit the results of the research;
Strengthening the infrastructure for the stakeholders of the National Innovation Systems for
sharing at national level, technologies, practices and policies developed in the territory.
For instance, among the active proposals managed and promoted by RIDITT there is EUROTRANS-BIO, 5th
call, running out on 15February 2010, for which 5 million of euro are allocated, in order to promote and cofinance transnational projects of industrial innovation in all application fields of biotechnology.
2.2.2 Regional level
Interventions in the Autonomous Region of Friulia-Venezia Giulia (FVG) are based on three key
concepts: competitiveness, innovation and internationalization.
The purpose of interventions is to increase business competitiveness, in order to support the international
markets.
2.2.2.1 Competitiveness
In order to increase competitiveness, the Region FVG introduced new industrial policy instruments,
in order to support and encourage the economic development of SMEs, Industrial Districts and Industrial
Development Consortium in the regional territory, promoting the network system, an essential element of
the competitive advantage.
Support and competitive development of SMEs in the Region Friuli-Venezia Giulia (Regional Law 4 / 2005)
In order to tackle the main weakness factors of the regional SMEs [the dimensional problem both in terms
of capitalization and occupation/turnover, family (closed) governance models, low managerial skills, lack of
internationalization processes, scarce knowledge of the target markets], the regional Administration issued
the law 4/2005. Law 4/2005 has introduced in the Regional industrial policy a new long term structural
approach, that turned from a random financing model to an intelligence acquiring financing model,
based on strategic consultancy in order to gain competitiveness.
The competitive development projects that are eligible to the law 4/2005 financing must focus on:
Dimensional growth (mergers, cooperation agreements, aggregations);
Internationalization processes in terms of setting of foreign marketing networks, organized and

structured foreign relations;
Reorganization of governance models;
Creation of new enterprises (spin offs, start-ups), diversification processes of existing enterprises with a
special regard to the cooperation with Universities, research centers, Tech parks etc.;
Financial support for the creation of prototypes and test productions;
Aid in the phase of the generational turnover in the enterprises in order to guarantee the development
process continuance;
To fill temporary gaps in managerial skills;
Management of recapitalization processes or propriety reorganization processes also by opening to

new partners;
Internal reorganization processes needed in order to develop new entrepreneurial ideas focused on
renewable energy production or lowering the environmental impacts;
Enhance the social responsibility of the enterprise;
Support to female entrepreneurship.
Implementation of environment quality standards safety-environmental standards.
The instruments that have been set up by the law in order to realize the above mentioned projects are:
strategic consultancy services and enhancement of existing managerial skills,
pro-tempore managers to implement strategic development plans
specific research projects to be developed with universities and private or public research centers
technology transfer mechanisms set up with universities, private or public research centers, Science
and tech parks, Industrial development consortia.
Beneficiaries are: small and medium enterprises also associated, established or withat least an operating
unit, in the Autonomous Region Friuli-venezia Giulia.
Financial resources are distributed by the Regional Financial Agency Friulia s.p.a.. The law set up the SMEs
competitive development Fund and the amount that can be assigned to single enterprises varies between
a minimum of 50.000 Eur (20.000 in case of micro enterprises) and a maximum of 500.000 Eur. The
assignment of financial resources is based upon an assessment of the proposed project/action by Friulia
s.p.a..
Promotion of Consortia of Industrial Development (Regional Law 3/1999)
The Region FVG with the law 3/1999 regulates the activities of consortia of industrial development,
and provides them an annual contributions for a period maximum of fifteen years, in order to cover
expenditures and loan rates incurred to take out mortgages with banks with the aim to implement,
complete or develop industrial infrastructure or services in the Consortia area.
In the Region FVG there are nine public economic entities in various geographic areas.
Consortia of Industrial Development in FVG

Consortium for the industrial development of Monfalcone Municipality
Consortium for the industrial development of Aussa-Corno area
Consortium for industrialization of Pordenone's Province
Consortium for the industrial and social development of Spilimbergo area
Consortium for the industrial and hand-crafted development of Gorizia municipality
Consortium for the industrial development of Ponte Rosso
Consortium for the industrial development of Central Friuli
Consortium for the industrial development of Tolmezzo (CO.S.IN.T.)
Consortium for the industrial and economical development of high Friuli (C.I.P.A.F.)
The purpose of the consortia is to promote the conditions necessary for the creation and development of
productive activities in the industry sector, building and managing infrastructure for industrial activities and
promoting or managing business services.
To achieve these objectives, consortia can operate directly or collaborating with other public and / or
private entities.
Industrial Districts and Agencies for the Development of Industrial Districts (ASDI) (regional law 27/1999)
Industrial Districts have been established with the regional law 27/1999, this are areas for the
economic and occupational development and for the promotion and coordination of local initiatives of
industrial policy.
The Industrial Districts recognized in the Region are:
District of Knife
District of Chair
District of Furniture
District of Agro-Food
District of Components and Termoelettromechanic
District of Coffee
District of Digital Technology -Ditedi-
The Agencies for the Development of Industrial Districts, are created in order to support the competitive
development of the enterprises of the different districts.
The ASDI are consortiums of companies with public and private capital, able to providing services to the
companies of the territory.
ASDIs are compose by enterprises located in the district, municipalities, counties, chambers of commerce,
consortia for industrial development, business associations, trade unions, professional associations, the
objective is to ensure a real representation of the actors of the district.
2.2.2.2 Innovation
With reference to innovation, the strategy adopted by the Region of Friuli-Venezia Giulia is to develop
synergies between the research system and the enterprises, in order to improve competitiveness through
technology transfer.
Support to the production and exploitation of knowledge (regional law 26/2005)
The regional law 26/2005 aims to promote training, and employment of human resources of
welfare and public administration sectors.
The actions foreseen by the law are:
a) financing specific training projects in innovation, scientific and applied research, technology transfer
or pre-competitive development activity;
b) supporting the regional university system;
c) granting subsidies to enterprises for contracts with high qualified persons or with persons who
already precariously work in research activities at universities or at public research institutions.
d) supporting programs that aims to encourage the mobility or the temporary posting of staff of
universities and research institutions in enterprises and/or public administrations involved in technology
transfer.
f) promoting activities for female researcher
Measures to support regional industry and to create commercial infrastructure (regional law 47/1978)
The Regional Law 47/1978 aims to promote research and innovation in the industrial structure of
the region.
Beneficiaries for the realization of projects of research and development are:

a) industrial enterprises;
b) associations or consortiums of enterprises, including cooperatives, made up of industrial enterprises;
c) temporary associations of enterprises (ATI);
d) industrial research and technology transfer centers;
e) consortia between industrial and other public or private enterprises, with a financial participation of than
50 %.
Activities:
1. research and development projects, aimed at developing new products, new processes or new
services, in order to improve products. Research and development projects may provide the installation or
extension of laboratories and research centers.
2. projects of innovation of the organizations
3. subcontracts of industrial research and development contracts by SMEs, to highly qualified
entities.
Initiatives should be conducted in the territory of the region, at the head office or at the operating unit of
the enterprises.
2.2.2.3 Internationalization
In this fields the Region Friuli-Venezia Giulia aims to develop and implement a strategy of relations
with foreign countries to consolidate the businesses activities of the territory. The objective is gather new
growth - economic, social, cultural - opportunities offered by the global scenario, by creating and
strengthening the entrepreneurship culture, highlighting the features of the local production system and
placing it in the socio-economic dialogue between the different countries.
To promote the local production system and make it attractive for foreign markets, several actions are
implemented (Programs for knowledge exchange , Information and communication campaigns, Exhibitions
events, Conferences, seminars and workshops, Missions, hosting of foreign delegations, meetings between
new businesses and potential investors). Beside these actions, there are specific measures addressed to
entreprises.
Incentives for SMEs for the promotion of multi-annual programs abroad
The regional administration provide the Chambers of Commerce, Industry, Crafts and Agriculture of
the Friuli Venezia Giulia with financial resources for multi-annual programs to promote SMEs abroad, with
initiatives aimed to integrate or consolidate the SMEs presence in foreign markets.
Beneficiaries are the SME performing service or mining, processing or production of goods and construction
activities.
Eligible activities are:

- advice for market research in the countries in which the promotional program will be implemented
- Advice for the launch of products in foreign markets
Financing of specific initiatives to commercial promotion abroad and to facilitate the process of
internationalization of enterprises
The Region FVG gives annually to the Chambers of Commerce, Industry, Crafts and Agriculture of
the Friuli Venezia Giulia contributions for the implementation of specific initiatives, aiming at supporting
trade promotion activities abroad and encouraging the process of enterprises internationalization.
Financing actions in the annual framework with the National Institute for Foreign Trade (ICE)
The Autonomous Region of Friuli-Venezia Giulia subscribes annual agreements with ICE, in order to
implement promotional initiatives to support economic development, in terms of internationalization and
promotion of exports, of the regional enterprises.
The Region of Friuli-Venezia Giulia makes use of the local Chambers of commerce, industry, handicrafts and
agriculture, for implementing the measures under its jurisdiction.
2.2.2.4 Anti-Crisis Measures
The Region Friuli-Venezia Giulia has implemented a set of extraordinary measures aimed at
overcoming the problems induced by global financial crisis.
The measures amount at 400 million euros available for enterprises, resources that will be guaranteed, in
the medium/long term period.
The measures are:
- Rotation Funds
- Guarantee Fund
- Bonds
- New EU laws on state aid
Anti-crisis measures introduced by the regional law 11/2009
The regional law n.11 of 2009 introduced some modifications to the law n. 4 of 2005, about the
support and the competitive development of SMEs in the Region Friuli Venezia Giulia, especially for the
incentives for the implementation of development projects for SMEs:
In case of there are variation of projects during the implementation, the contributions are confirmed, when
the variation depends on the situation of economic crisis.
In case the objectives achieved are lower than those expected, the contributions are confirmed
In case of processing or succession in the enterprises, the contributions will be confirmed if the activities of
the enterprises continue without interruption or transformation.
Contributes are granted in advance
New limits introduced for a maximum of 500,000.00 for aids related to the Regulation (EC) 800/2008 and
300,000.00 for aids related to the scheme of de minimis.
2.2.2.5 Regional Finance investment Companies
FRIULIA, Finance investment company
Friulia is the finance investment company of the Autonomous Region of Friuli-Venezia Giulia, and
since 2005 a holding of regional ownership.
Friulia is on the forefront at national level and it is an active partner for the enterprises and the entire
economy of Region FVG.
The share capital of Friulia is 278 million, with a total amounted to over 800 million.
Friulia plays therefore a triple role:
1) Finance investment company:
In order to support new ideas, Friulia takes minority shares in the venture capital of regional enterprises,
and provides assistance and advice to shareholding.
The investment activity of Friulia applies throughout the life cycleof the project, from start-up to
consolidation, to the of Management Buy In (MBI) / Management buy Out (MBO) and internationalization
operations.
In the portfolio of Friulia there are regional enterprises of different sectors, including the sector of the new
technology.
2) Development Agency
As development agency, Friulia is the executive arm of the Region Friuli-Venezia Giulia for the growth of the
regional enterprises system .
Friulia supports the organizations and local governments for territorial development projects and for
project financing, and manages funds and realise EU and regional projects.
3) Group leader of the holding formed by regional company

The shares of Friulia belong for the 80,10% to the Region Friuli-Venezia Giulia, and for the 19,90% to local
and national banks and insurance.
The European Union provides support to European small and medium-sized enterprises (SMEs).
Support is available either directly or through programmes managed at national or regional level, such as
programmes related to the European Unions Structural Funds. SMEs can also benefit from a series of nonfinancial assistance measures in the form of programmes and business support services.
The assistance schemes have been divided into two categories: thematic funding opportunities, designed
and implemented by the European Union, and the Structural funds, managed at national and regional level.
In addition there are other indirect financial instruments, made available via national financial
intermediaries.
2.3.1. Structural Funds
The Structural Funds (European Regional Development Fund [ERDF] and European Social Fund
[ESF]) are Community funding instruments to improve territorial competitiveness. Structural Funds are
designed to help reduce disparities in the development of regions, and to promote economic and social
cohesion within the European Union. The European Commission therefore co-finances regional projects in
the Member States. Some measures foresee that SMEs can be direct or indirect beneficiaries. Nevertheless,
it is important to stress the fact that direct aid to SMEs to co-finance their investments is only possible in
the economically less developed regions (the co-called convergence regions). In other regions, priority
has been given to actions having a high leverage effect (e.g. entrepreneurship training, support services,
business incubators, technology transfer mechanisms, networking, etc.), as opposed to direct aid to
individual SMEs.
Beneficiary SMEs of structural funds receive a direct contribution to finance their projects. Programmes
addressed to SMEs are managed and the projects selected at national and/or regional level.
European Regional Development Fund
For the period 2007-2013 the strategy and resources of cohesion policy (European Regional
Development Fund [ERDF], European Social Fund [ESF] and European Cohesion Fund) are grouped into
three priority objectives, with a total allocation of 308 billion:
ERDF aim is to reduce disparities in the development of regions and to support social and economic
cohesion within the European Union. In order to strengthen the creation and competitiveness of SMEs, the
ERDF co-finances activities in a broad range of areas: entrepreneurship, innovation and competitiveness of
SME (for example entrepreneurial mentoring, innovative technologies and management systems in SMEs,
eco-innovation, better use of ICT); improving the regional and local environment for SMEs in the start-up
and growth phase, business infrastructure an support services for SMEs, regional and local RTD and
innovation capacities, business co-operation and innovation capacities; interregional and cross-border cooperation of SMEs.
ERDF programmes are not directly managed by the Commission but by national and regional authorities.
These are also contact points for funding applications and project selection.
The instrument used in the Region Friuli-Venezia Giulia is the Regional Competitiveness Operational
Programme (POR).
Regional Competitiveness Operational Programme 2007-2013 (POR FVG)
The Regional Competitiveness Operational Programme (POR) is the programming instrument

prepared by the Region Friuli-Venezia Giulia for the period 2007-2013 and approved by the European
Commission; it defines the fields of the regional territorial development, wich will be financed by European
Structural Funds, and by the State and the Region in the period 2007 - 2013.
Priorities were detected in 6 axis, for a total budget of 303.001.323 euro:
Axis 1 - Innovation, research, technology transfer and entrepreneurship: 138.000.000 euro, 46% of the total
budget, aims to strengthen the enterprises competitiveness.
Axis 2 - Environmental sustainability: 34.850.000 euro, 11,5%of the total budget.

Axis 3 - Accessibility: 40.000.000 euro, 13% of the total budget, aims to develop transports and computer
services;
Axis 4 - Territorial Development: 40.000.000 euro, 13% of the total budget, aims to promote the internal
cohesion and a balanced territorial growth.
Axis 5 - Energy: 38.031.269 euro, 12,5% of the total budget, aims to promote long-term eco-sustainability
of the economic growth and the use of renewable energy sources;
Axis 6 - Technical support: 12.120.054 euro, 4% of the total budget.
With regard to axis 1, the specific operational objectives are:
1) to Support the scientific and technological development of enterprises, in particular:
Encouraging the Industrial Research and the development and innovation of SMEs (Supporting
industrial research and experimental development activities; Supporting projects for innovate
process and organization; Supporting the acquisition of patents and know-how; Providing
consulting services in the innovation fields; Providing general support services; Supporting
patenting and production of other industrial property rights, in relation to the results of the
research and development activities; Supporting feasibility studies and research projects, in order
to obtain facilities by the State and EU)
Supporting industrial research projects with the aim of strength the research and innovation
networks and the clusters of innovation
2) to Support processes of transformation and/or strengthening of the productive structure:
Supporting the competitive development of SMEs (Implementation of research and

development projects; Supporting SMEs to use better the tools of industrial policy;
Improving the technology transfer from Universities, Research Centers and Science and
Technology Parks, and Industrial Development Consortia; Supporting start-up; Providing
incubator and innovative services for enterprises located in the Incubator)
Supporting and financing regional clusters (strengthen enterprises competitiveness

supporting and developing innovation clusters (industrial districts, incubators, etc.))
Supporting SMEs to adopt, use and enhance information and communication technology,
promoting the access to electronic commerce, enabling new sites and upgrading existing
ones. In particular the activities aimed to facilitating the access to electronic commerce.
Within the Axis 1, innovation, research, technology transfer and entrepreneurship, the currently active calls
are:
Call for projects of industrial research in the sector of home automation
Call for projects of industrial research in the sector of molecular biomedicine
Call for projects of industrial research in the sector of shipbuilding and yachting
Joint European Resources for Micro and Medium Enterprises (JEREMIE)
JEREMIE is a joint initiative of the European Commission and the European Investment Fund with
the European Investment Bank.
It aims at improving access to finance for micro to mediumsized enterprises and in particular the supply of
micro-credit, venture capital finance or guarantees and other forms of innovative financing. Special
emphasis is given to support start-ups, technology transfer, technology and innovation funds and microcredit. JEREMIE is managed as an integral part of European Regional Development Fund programmes, and
projects will be selected at the relevant national and regional level.
The initiative aims to:
ensure better conditions for the financing of new entrepreneurial activities, through loans
(including micro-credits), venture capital, shareholding and guarantees, with its technical and
organizational support;
contribute to the improvement of national and regional coordination in this area, as well as a more
effective management of public resources and a more appropriate transfer of good practices;
promote a better absorbency of the funds allocated through European programmes.
Generally, the Structural Funds offer financial assistance in the form of free grants contribution.
JEREMIE transforms grants into financial products: SMEs after the use of JEREMIE financial products must
repay the result. The funds can then be used again, this could provide a funds leverage.
The funds made available through the JEREMIE instrument should be used for financing SMEs in fixed and
human capital in the medium and long term, through new projects or modernization/expansion of existing
ones in the following sectors: manufacturing, food and agricultural, environment, services, ITC, etc.
Are not eligible enterprises engaged in the following sectors: property market, banking, insurance or
financial intermediation, arms production, supply or trade, or even other sectors excluded by the EIB or the
EIF. Eligible SMEs must be private or will have entered in the final phase of the privatization process.
2.3.2 Thematic funding opportunities
These funding opportunities are mostly thematic with specific objectives (environment, research,
education) designed and implemented by various Departments of the European Commission. SMEs or
other organisations can usually apply directly for the programmes, generally on condition that they present
sustainable, value-added and trans-national projects.
Co-funding is the general rule: the support of the European Union usually consists of subsidies which only
cover part of the costs of a project.
With regard to funding opportunities in research and innovation the available programs are:
The Seventh Framework Programme for Research and Technological Development (2007-2013)
The 7th Framework Programme for Research and Technological Development has a total budget of
over 50 billion. This money will be spent on grants to research actors all over Europe and beyond, in order
to co-finance research, technological development and demonstration projects. Grants are determined on
the basis of calls for proposals and a peer review process, which are highly competitive.
In order to complement national research programmes, activities funded from FP7 must have a European
added value. One key aspect of the European added value is the transnationality of many actions: research
projects are carried out by consortia which include participants from different European (and other)
countries; fellowships in FP7 require mobility over national borders. Indeed, many research challenges (e.g.
fusion research, etc), are so complex that they can only be addressed at European level.
The Framework Programmes for Research have two main strategic objectives:
to strengthen the scientific and technological base of European industry;
to encourage its international competitiveness, while promoting research that supports EU

policies.
It pays also particular attention to SMEs through the four lines of the program:
"Cooperation": SMEs are actively encouraged to participate in all research initiatives,

specially in Joint Technology Initiatives (JTI).
"Ideas": the research team of SMEs can compete on merit basis.
"People": Encourage greater participation of SMEs in the "Paths and alliances between
industry and universities."
Capacities: "Research for SMEs" aims at strengthening the innovative capacity of

European SMEs and their contribution to the development of new products and
technology-based markets.
The indicative budget for the specific actions of SME is about 1,3 billion euro.
Competitiveness and Innovation Framework Programme (CIP)
The Competitiveness and Innovation Framework Programme (CIP) is a coherent and integrated
response to the objectives of the renewed Lisbon strategy for growth and jobs. Running from 2007 to 2013,
it has a budget of approximately 3.6 billion.
As regards innovation and information technologies, the CIP comprises two main strands:
a) the Entrepreneurship and Innovation Programme (EIP) aims to improve the conditions for
innovation, such as exchanges of best practices between Member States and actions to improve,
encourage and promote innovation in enterprises. It supports actions fostering sector specific innovation,
clusters, public-private innovation partnerships and the application of innovation management.
b) the ICT Policy Support Programme to which approximately 728 million has been allocated.
The ICT programme aims to stimulate the new converging markets for electronic networks and services,
media content and digital technologies.
2.3.3. Indirect Financial instruments
Most of the financial instruments are only available indirectly, via national financial intermediaries.
Many of them are managed by the European Investment Fund. The financial instruments aim to increase
the available credit to SMEs and to encourage intermediaries to develop credit access for SMEs.
Under the Competitiveness and Innovation Framework Programme (CIP), 1130 million has been allocated
for financial instruments for the period 2007-2013. These are organised under 2 main schemes (high
growth and Innovative SME Facility; SME guarantee facility) which are managed on behalf of the European
Commission by the European Investment Fund (EIF).
High Growth and Innovative SME Facility (GIF)
High Growth and Innovative SME Facility (GIF) aims to increase the supply of equity for innovative
SMEs both in the early stages (GIF1) and in the expansion phase (GIF2).
Objectives of GIF are a) to contribute to the establishment and financing of SMEs by reducing the deficit of
the net capital and the venture capital, which help SMEs in exploiting their growth potential; b) to support
innovative SMEs with a high growth potential, especially SMEs engaged in research, development or
innovation.
GIF shares risk and reward with private equity investors, providing important leverage for the supply of
equity to innovative companies by invests in specialized investment funds (start up funds, regional funds,
funds for specific sectors and technologies, funds linked with incubators, funds and investment vehicles
promoted by business angels, risk capital funds)
The proposals for GIF investments will be examined regularly by the FEI, within the limits of available
budget. SMEs wishing to apply for an equity investment need to contact the funds that have signed an
agreement with the EIF.
The financial contribution provided for GIF is half of the total budget, 1.100 million for the period 20072013.
SME guarantee facility (SMEG)
This tool provides loan guarantees to encourage banks to make more debt finance available to
SMEs, by reducing the banks' exposure to risk. SMEG provides co-, counter- and direct guarantees to
financial intermediaries providing SMEs with loans, mezzanine finance and equity. Four "windows" give
access to funding for:
loan guarantees - guarantees for loans to SMEs with growth potential
microcredit - guarantees for loans of up to 25 000 to micro-enterprises with up to nine

employees, particularly entrepreneurs starting a business
equity and quasi-equity guarantees - guarantees to existing equity guarantee schemes and
providers of mezzanine finance to support investments in businesses with up to 249 employees
securitisation - guarantees to support securitisation structures to assist financial intermediaries

in mobilising debt finance for SMEs.
SMEs wishing to apply for guaranteed financing should contact one of the financial intermediaries that
have signed an agreement with the European Investment Fund
3. ANALYSIS OF THE BUSINESS SUPPORT ORGANISATIONS CONTEXT

3.1 Mapping of the existing institutions/associations/various structures
Chamber of Commerce, Industry, Agriculture and Crafts
of Trieste, Udine, Pordenone and Gorizia
Address
Piazza della Borsa, 14 - 34121 Trieste
Via Morpurgo, 4 - 33100 Udine
Corso Vittorio Emanuele II, 47 - 33170 Pordenone
Via Francesco Crispi, 10 - 34170 Gorizia
E-mail
Trieste:cciaa@ts.legalmail.camcom.it
Udine: urp@ud.camcom.it
Pordenone: urp@pn.camcom.it
Gorizia:cciaa@go.legalmail.camcom.it
Legal Status
Public agency
Years of activity
Fields of activity
Competencies / skills
Promote and support the general interests of companies and

productive sectors;
Support the institutional, economic and social realities;
Develop the international role of the city;
Implement actions that lead, even indirectly, the development of the
economy.
Institutional assets:
Managing enterprises and professionasls registers
Issuing certifications, licenses and authorizations for various
activities in Italy and abroad and publication of protest lists
Promotional assets:
Supporting the business activities with various services (New
Business, Info Point for Internationalization, etc..)
Supporting studies and sectorial research, the initiatives
designed to stimulate and sustain the economic and social
development in the province
Providing economic information and training services
Connecting different Institutions, Organizations and
Associations, promoting the collaboration and coordination in order
to encourage the economic development of the territory.
Direct Beneficiaries of BSOs

activities
Main activities addressed to
SMEs
Enterprises, citizens
Supporting SMEs in the research of benefits, grants and funding,
especially
providing information on various facilities laws at european, national
and regional level.

Internationalisation:
Aim to support companies that want to achieve the foreign market,
especially with compensation for expenses incurred for participation
in international initiatives (economic missions, participation in
exhibition).
Main activities addressed to start
ups
Sources of funding
Free advice for the initiation, the development and the consolidation
of a new company, in particular general guidelines for supporting start
up:
Risk assessment
Legal forms
Business planning
Bureaucratic procedures to start a new business:
Set of rules
Acts of authorization required
Agencies authorized to issue documents or for receipt the complaint
Associated enterprises that are listed in the Public Register of
Enterprises overseen by the Chamber; other EU funds for specific
projects and areas of intervention
AREA Science Park

Address
E-mail
Legal Status
Years of activity
Fields of activity

activities
SMEs

ups
AREA Science Park Padriciano

Padriciano, 99 - 34149 Trieste - Italy
AREA Science Park Basovizza
Basovizza SS 14, km 163,5 - 34149 Trieste - Italy
info@area.trieste.it
National Research Body
Since 1978
Linkage between the academic world and the industrial sector and
between innovation and business;
Enhancement of research, regional development, technology transfer,
HR training, attracting investment, disseminating scientific knowledge.
Project management, technology transfer management, HR
development, investment attraction, scientific communication and
dissemination management
Enterprises, researchers
Highly skilled support to help local entrepreneurs and to help
businesses become more competitive by developing innovation
projects, such as:
Technology Auditing
Short-term actions to assess the need for innovation within the
business.
Identification of potential solutions.
Information on patents, document retrival and business intelligence
Patent information retrieval and retrieval of documents on topics of
scientific, technical and industrial interest. Personalized reports on
technological scenarios. Technology monitoring service.
Assistance in implementing innovation projects
Assistance during the various phases of study, planning and
development of innovative solutions, technical and economic
feasibility studies, assessment of the impact of innovation on company
structure.
Support in developing research projects
Supporting businesses in developing and refining projects in
collaboration with research institutes.
Validation of business ideas
Identification and checking of technical, normative, organizational and
business parameters for new business initiatives.
Sector and multisector studies
In-depth analysis of state-of-the-art technology and technological
trends of widespread industrial relevance.
Benchmarking
Analysis of company efficiency
Business incubator services with specially equipped units, help in
assessing the enterprise concept from technological, commercial, legal
and economic standpoints, plus financial support with the possibility

of funding in the form of seed capital.
Carries out individual consultations providing information, orientation
and a skills audit aimed at setting up business;
Assists in the development phase of the business plan and its
implementation, by providing advice and support;
Creates an integrated system of seminaries providing information and
training on the principal topics relating to spin-offs.
Sources of funding
Ministry of Education, University and Research, Autonomous Region

Friuli Venezia Giulia, other EU projects
Friuli-Innovation and Science and Tecnology Park L. Danieli

Address
Operative Office: via J. Linussio, 51 - 33100 UDINE Italy
Legal Office: via Marco Volpe, 8 - 33100 UDINE Italy
E-mail
info@friulinnovazione.it
Legal Status
Years of activity
Fields of activity
Science and technology park

Since 1999
To develop essential tools for our territory: excellence-focused science
and technology laboratories, joint university-industry laboratories and
technology-rich spin-off companies.
A structure created to guide industrial-era enterprises into the new
age of knowledge.
Information and Communication Technology (ICT): in order to
enhancing the competitiveness of local enterprises; the consolidation
of experience has been achieved through a wide range of projects,
research initiatives and technology transfers (Techno Seed incubator,
ICT Training Centre and Techno Growth accelerator).
Biotechnology: a cutting-edge sector that utilises multidisciplinary
methodologies and skills; an internationally oriented research centre
(IGA), specialises in the structural and functional genomics of living
organisms, is active in this sector.
Metallurgy: a sector with a large number of territory-based
enterprises;
In this sector the Laboratory of Metallurgy, Surface Technologies and
Advanced Materialsin created, it carries out applied research and it is
a new anchor point for metallurgy-industry enterprises and
researchers, as well as a centre of education for technicians and
researchers.
Energy and environment: a sector that offer high-level services to
enterprises through a skill pool formed by the teaching staff and
researchers, in order to improve the environmental management.
Wood: support and promotion to initiatives for new research and
technological innovation of ths sector in the region and in Europe.
Researchers, professors and students of regional universities,
employers, employees and inventors
Supporting and assist resident enterprises:
infrastructure modification according to space and equipment
needs
networking with professional associations, research bodies,
potential partners and financiers
outsourcing administration and accounts
outsourcing technical and logistical functions

activities
SMEs
Supporting the growth and development of small and micro hightechnology enterprises:
company check-ups
strength, weakness, opportunity and threat (SWOT) analyses

planning interventions and business plan management
fostering internationalisation
Promoting the collaboration between enterprises and the scientific
and technological research network:
identifying innovation needs
searching for and identifying the most appropriate technical
and scientific skills
identifying innovation options
profiling and searching for potentially interested partners
activating collaboration and management support for
development projects
ups
Sources of funding
Supporting and assist the creation of high-technology enterprises:

guidance and training
business plan development
technological feasibility studies
assistance on enterprise creation procedures
assistance in fund raising and access to innovative forms of
finance
networking, searching for partners and alliances
mentoring
Agemont S.p.A.
-Agency for the Economic Development of the Mountain Regionhttp://www.agemont.it/Portale/Homepage.aspx
Address
Via J. Linussio 1,
33020 Amaro (UD) - Italy
E-mail
agemont@agemont.it
Legal Status
Development agency
Years of activity
since 1989
Fields of activity
Creation of new economic initiatives and development of the human

and material resources of the mountain region.
Promotion of the creation of new economic initiatives and
encouragement of the development of the human and material
resources of the mountain region through:
research and planning activities for the development of new
economic activities;
promotion of local entrepreneurs and the attraction of
entrepreneurs from outside;
technical and consultancy services regarding organisation and
management on behalf of businesses relocating to the mountain
region;
the organisation and implementation of training activities and
professional refresher corse;
financial engineering operations;
national and regional community projects with links or effects
concerning the mountain region.

activities
SME and start-up of the mountain region and from abroad in the
sectors of: crafts, industry, tourism and retail trade.
The interested area concerns local districts within the provinces of
Udine and Pordenone, divided into three uniform areas, each of which
constitutes a Mountain Community:
Mountain Community of Carnia;
Mountain Community of Gemonese Canal del Ferro-Valcanale;
Mountain Community of Western Friuli.

SMEs
Technological and Science Park, planned and realised with the aim of
supplying advanced services to small and medium-sized businesses
and becoming strategic elements for a new model for growth in this
mountain region.
The Services Centre that plan and manage economic projects, but
offers also different services to companies:

information provided through information booths;
technical assistance to companies through the introduction
into a company of innovative administration tools provided via the
administrative engineering laboratories;
the spread of innovation and technologies present in the CIT
with regard to the market;
search for new companies with a high technological content;
search for new opportunities for innovation and development;
project management for research projects;
operation of the Multimedia Centre and use of the same for
training purposes.

ups
Business accelerator with which Agemont provides the businesses

based in the Centre with a series of benefits able to reduce company
risk during the start-up phase and create concrete opportunities for
young entrepreneurs.
The guidelines followed are:
the development or broadening of new areas of research;
the development of the instruments required to spread
information throughout the region
the reinforcement of the role of incubator, to encourage the
birth and development of new companies.
Instruments of financial engineering able to support the start-up and
strengthening of entrepreneurial activities in the mountainous area of
the FVG Region. In order to realise this financial activity, Agemont has
two main means of intervention:
guarantees of medium-term loans: these guarantees are
issued principally in the case of loans destined for the realisation of
investment programmes;
temporary participation in company capital as a minority
shareholder in joint-stock companies and as subsidising partner in cooperative companies.
Sources of funding
European Union through the FESR fund

Treasury and Friuli-Venezia Giulia Region within the framework of the
DOCUP Objective 2 2000-2006, Action 2.3.3, Project S.PR.IN.T.
CBM S.c.r.l.
Cluster in BiomedicineAddress
E-mail
Legal Status
Years of activity
Fields of activity

activities
SMEs
ups
Strada Statale 14 - km 163,5 AREA Science Park

34149 Basovizza, Trieste ITALY
info@cbm.fvg.it
Private
Since 2004
Acting as a bridge between Research and Industry in the biomedical
sector
The Institutional & International Affairs:
the office is in charge of supporting CBM's management to represent
and to promote the Consortium at international, national and regional
levels;
Business development:
CBM prepare studies, market analysis, reports on the commercial
expoitation of new products and services;
Economic observatory:
CBM monitors the evolution of biomedical sector and supports
technology transfer activities;
Grants office:
The office facilitates access to national/international financing for
research and innovative enterprises.
Researchers, students, employers, employees and inventors
The Business Development Department is responsible for identifying

and defining the business attributes and funding needs of new
ventures as they mature from concepts to growth companies. The
team facilitates access to innovative financial instruments to support
the organizational and qualitative development of businesses.
The IP service (in cooperation with Area Science Park) is dedicated to
protecting intellectual property and accompanying a research idea
through the various stages of business development.
CBM encourages state and local government bodies, foundations,
companies, philanthropists, individual investors and other sources of
capital to expand their involvement as providers of seed and early
stage risk capital through both grant-making commitments and
investment asset allocation
Sources of funding
Ministry of Education, University and Research (MiUR)

Friuli Venezia Giulia Region
AREA Science Park
Fondazione CRTrieste
Assicurazioni Generali S.p.A.

Rotary Trieste Nord
Polo Tecnologico di Pordenone

Address
E-mail
Legal Status
Years of activity
Fields of activity

activities
SMEs
viale de La Comina, 25 - 33170 Pordenone, Italy

direzione@polo.pn.it
Consortium
Promotion of scientific research and innovation technology, linking of
the Companies to the Regional system of scientific research.
Improve business competitiveness identifying the appropriate
innovation path;
Provide information about patent documentation and
innovative tools for business;
Facilitate initiatives of skills aggregation
Assist enterprises in finding new materials
Enhance the research and development for competitiveness;
Assist the funding search activity and the participation in
European research projects
Offer to the established enterprises, training grants and
preferential paths for the development of innovation.
Researchers, professors and students of regional universities,
employers, employees and inventors
Supporting in the protection of industrial property, patents and
deposit conditions:
rules, laws and regulations, at international and national level;
type of protection of industrial property and patents;
assistance in preparing the application.
Monitoring action of different productive sectors with high possibility
of development, in particular in the new technologies area;
Legal and business consultants;
Assistance, information and training focused on the types of funding
for regional research activities and technological innovation;

ups
Feasibility Study
Compilation of Business Plan
Consulting on the most appropriate legal form for the enterprise
Tax advice
Assistance in the start-up phase, especially providing an office in
Open space in the Pole.
Sources of funding
Ministry of Education, University and Research, Autonomous Region

Friuli Venezia Giulia, other EU projects
Friulia -investment company of FVG RegionAddress

Via locchi, 19 - 34123 Trieste, Italy
E-mail
mail@friulia.it
Legal Status
A public company, (79,2% of FVG Region)
Years of activity
Since 1967
Fields of activity
FRIULIA invests in companies with a shares capital, in order to
encourage the development of economic initiatives in the Region FVG.
engine for development and innovation
strength the financial resources of the enterprises and finance

the growth plans
consulente dellazienda per elevarne il prestigio ed il merito

creditizio e sostenerla nelle scelte strategiche e di investimento
analista per valutare i piani industriali ed il suo modello di

sviluppo
SMEs, start up /spin off, at least with an operating unit, in the Region
activities
FVG.
Information and documentation necessary to apply for

SMEs
assistance
Buy into a minority participation and at the end of the

intervention period sells its equity
Provides technical advice and assistance
Develop synergies between the enterprises and other

institutional and private investors and large industrial groups
Provides a continuous checkup on business plans
ups
Provides technical advice and assistance
Develop synergies between the enterprises and other

institutional and private investors and large industrial groups
Sources of funding
FVG Region, insurances, investments companies and banks
Associazione Piccole e Medie Industrie di Udine

Address
Viale Ungheria, 28 - 33100 Udine Italy
E-mail
info@apiudine.it
Legal Status
Association
Years of activity
Fields of activity
Protect the interests of SMEs in the Region Friuli-Venezia
Giulia
Work actively to ensure that SMEs acquire a prime position in
the socio-economic development.
Offer to members a concrete support to business.
Create opportunities for exchange of ideas between
entrepreneurs.
Associated SMEs
activities
- Rapresentation of the members
SMEs
- Support in management issues
Main activities addressed to start - Support in the identification of the most appropriate structure
ups
- Support in the identification of exploitable economic instruments
- Identification of the most appropriate legal form (SMEs or craftwork
enterprise)
Sources of funding
Industrial Association of Trieste, Udine, Pordenone, Gorizia

Address
Piazza Casali, 1 - 34134 Trieste
Largo Carlo Melzi, 2 - 33100 Udine
Piazzetta del Portello, 2 - 33170 Pordenone
Via degli Arcadi, 7 - 34170 Gorizia
E-mail
Trieste: m.rados@assindustria.trieste.it
Udine: info@confindustria.ud.it
Pordenone: info@unindustria.pn.it
Gorizia: info@assind.go.it
Legal Status
Years of activity
Fields of activity
Various business services
Environment and Safety at Work
Quality and technical standards
Ports and Transport
Conjunctural analysis
Development association
Relations with the unions in advising on employment relations and
training and professional updating.

activities
SMEs

ups
Sources of funding
Follow the development of economic and financial issues

Provides consulting, support and information services to their
associates,
Organizes seminars and training courses
Provides advice on employment relations and training and
professional updating.
Enterpises, Citizens, Unions
Incentives for Enterprises:
Monitoring of the facilitation instruments at regional, national and EU
level
Taxes and Customs:
Support in resolving operational problems of enterprises
Confartigianato - Regional Federation of Craftsmen of Friuli-Venezia GiuliaAddress

via Coroneo, 6 - 34133 Trieste
E-mail
regionale@confartigianatofvg.it
Legal Status
Years of activity
Fields of activity
Reunite the regional craft enterprises in order to improve their
competitivness
assist the creation of new enterprises;
assist and support involved enterprises in the formalities
relating to business management;
provide opportunities for growth and development of
involved enterprises
collect, process and disseminate information about regulatory,
industrial, technical and economic activities;
implement meetings and conferences on topics of the craft
sector and SMEs;
interact with Universities and Research Centres;
promote innovation.
activities
SMEs
Enterprises, SMEs, specially craft enterprises

ups
Promote all economic and social initiatives aimed at stimulating the

increasing of the businesses manage by women;
provide fiscal, legal, administrative assistance

organize focused meetings, offering the opportunity to
develop relationships, facilitate collaboration, exchange news and
knowledge, establishing cooperation projects
elaborate and disseminate information relevant to the access
to specific markets (eg government procurement) and to specific
facilities (EU, national, regional, etc.).
organizza convegni, iniziative di formazione manageriale e
seminari tecnici di approfondimento
organize conferences, management training and technical
seminars
Promote all economic and social initiatives aimed at stimulating the

increasing of the businesses manage by young enterpreneurs;
Sources of funding
4.
CONCLUSION
Based on a large number of small and very small enterprises, the FVGs entrepreneurial system has
been regarded as a positive model of widespread entrepreneurship, typical for the so called Italian North
East. This widespread entrepreneurship model brought to the development of strong territorial
specializations that led to the development of a number of productive districts with hi tech productive
bases and high quality standards: coffee, chair production, piasentina stone, digital technologies, food,
thermo-mechanics, cutlery, mechanics, furniture, shipbuilding, electronics, molecular biotechnologies.
Moreover, some sectors display a growing cooperation within its subsectors (ex. mechanics) that have
brought optimization of competencies and quality both along single subsectors of the productive chains
(vertical optimization) and within specific production phases of different subsectors (horizontal
optimization). Mechanics and wood-furniture as the two leading sectors in the regional economy reached
quality and innovation standards that give them competitive advantages at national and international level.
The regional economy is strongly export oriented as exports nearly double imports.
Notwithstanding the listed positive features, the regional economy is undergoing a difficult
transition that can be just partially related to the recent international financial and economic crisis. In fact,
difficulties stems from structural problems that can be mostly related to the main characteristic of the
enterpreneurial system: the average small dimension of enterprises. What for a long time has been
regarded as a strength, global economic dynamics in the last decade turned to a weakness.
In particular, small dimensions of most enterprises hamper their internationalization processes,
render difficult to finance their investments and to analyze their competitive position on the markets. The
low internationalization levels coupled with an insufficient knowledge of foreign markets render small
companies poor exporters. The largely positive trade balance registered by the regional economy is thus
mainly the result of the strong export flows of large and medium companies. The high operational
flexibility granted by the small dimensions that traditionally was a cornerstone of their competitiveness is
not supported by a strategic flexibility: the capability to modify products, to enter new markets, to change
internal organizational models, ownership or management. Small companies are highly dependent on big
players in terms of turnover (single buyers) and in terms of technological platform as usually small
companies work as outsource for big players and technology is simply supplied them by the latter.
Although working on a hi-tech base, Small enterprises seldom develop an autonomous growth path in
technology and market terms (JOB ON ORDER TRAP). These dynamics result in a low demand for innovation
and research (noted especially in the mechanics sector) by SMEs.
Although important national and international research centers based on the regional territory
form a relevant regional research potential, low level of private spending in R&S,
scarce patents
applications and a constant deficit in the regional technology balance of payments clearly indicate that the
technology transfer process is still too weak and still need to be fostered. As reported by different national
and international surveys (RIS - Regional Innovation Scoreboard) the innovation potential and capacity of
the regional productive system is good if compared to other Italian regions but insufficient if compared to
some other EU regions. The spin-off and spillover effects of existing tech-parks are still spatially too
concentrated/limited. The weak tech-transfer is to be related to deficiencies of both sides: a) the activities
of research centers sometimes appear too distant from real SMEs needs; b) enterprises demand for
innovation and research is low, mainly due to the fact that the regional productive base is still dominated
by traditional sectors that managed to foster their competitiveness mainly through an increasing territorial
specialization. The innovation process was thus to some extent developed just through the extreme
product specialization and was to a lesser extent research based.
Nowadays this model is not suitable to cope with global competition and renders the SMEs
particularly vulnerable. Furthermore, the dimensional factor play again a significant role as most of the
small and very small enterprises do not have the internal competencies and resources to take advantage of
existing know-how and technologies based in tech parks. The support measures displayed are mostly suited
for medium and large enterprises that have the internal human and capital resources to access programs
and projects.
Althouhg the BSO network is well developed, and the policies set up by the regional administration
to address the different problems/weaknesses of the economic system are well designed and related to key
aspects (internationalization, competitiveness, innovation, R&D, human resources), the results reached so
far has been just partially satisfactory. In fact, the BSOs system presents weak coordination and integration
among the different actors that usually embody different interests while measures to tackle weaknesses
are generally considered well designed although sometimes inadequate for very small companies
especially in terms of capital and financial adequacy criteria.
The regional research potential is undoubtedly high but spin off and spillover effects of tech parks
are still spatially too limited. Local offices set up by tech parks on the regional territory as driving belts
between demand for innovation (enterprises) and supply (science and tech. system) need to strengthen
their activities and effectiveness. In general the knowledge transfer is too weak as BSOs werent able to
encourage knowledge and technology transfer from the research and knowledge centers to the
entrepreneurial
environment.
As
reported
by
interviewed
companies,
timeframes
of
development/innovation projects financed by public funds intended to support enterprises usually do not
meet the time to market standards and again are more suited for medium and large enterprises. Lack of
resources (financial and human resources) limits the scope for the SMEs to take full advantage of existing
supporting and technology institutions.
The capacity by the regional administration to develop a foreign policy/economic strategy should
be upgraded. Support to SMEs Internationalization, particularly in terms of new market search and
promotion, is weak compared to other competitors. Export finance and insurance are considered
inneffective if compared with some EU competitors (ex. Germany) and in some particular sectors SMEs find
it difficult to participate to large international contract procurements. Last but not list, the credit system is
too conservative and poorly development bound and creates chronic difficulties in credit access by small
enterprises, penalizing growth potential.
The development of new relationship/aggregations between enterprises seem a top priority to

bridge the dimensional problem. At present the regional productive base is characterized by a low degree
of aggregation. Policies to promote aggregation between SMEs proved to be largely ineffective so far as
turning cooperation ideas in reality is very difficult in the SMEs highly competitive environment.
Aggregation and cooperation among small enterprises thus require first of all a new cultural approach by
entrepreneurs that traditionally perceive themselves as self-sufficient. This seems particularly relevant
nowadays, as the ongoing crisis is hitting hard and is producing structural effects on the demand side. Small
enterprises cannot afford to neglect the development of markets (national or foreign) and just produce for
single buyers. Furthermore, new cooperation and aggregation models seem crucial also to preserve the
competitive advantage developed so far and foster the innovation capacity of SMEs. In this respect,
aggregation would enable enterprises to develop a better interaction capacity with the regional
knowledge system and better access to support schemes set up by the regional administration, BSOs,
etc..
On the institutional side, the measures, policies, schemes set up to tackle various needs of the
enterprise system are considered appropriate in principle, thought sometimes not really suited for small
enterprise, but the implementation model seem non adequate as is based on a passive approach. The set
the measures and wait model proved ineffective to reach troubled enterprises, particularly small
enterprises, that in tough periods find it difficult to mobilize internal resources to interact with institutional
actors.
The foreseen pilot action to be developed in the nautic sector in Latisana seem to meet some of the
needs and factors just pointed out: its a joint initiative of several entrepreneurs that have envisaged that
individually they would not be able to cope with the evolution of their market, that they need a common
technical market support facility to support their activity, and that this new facility would serve also as an
interface tool to interact with research entities and their support programs.
ITALY: Umbria Region
1. ANALYSIS OF THE ECONOMIC CONTEXT
1.1 Overview of the economic-entrepreneurial context (at regional level)
Table 1
STRUCTURE
GDP (m )
GDP ( y/y) - 2000
GDP per capita PPP ()
Structure GDP (%):
Agriculture
Industry
Services
Industrial output (y/y)
No. active companies
Total turnover (m )
% of SME turn./Total Turn
SME per sectors (%):
Agriculture
Industry
Services
EMPLOYMENT
Total employment (m)
% SME emp. on tot. emp.
Employment per sector:
Sector A (%)
Sector B (%)
Sector C (%)
V.A. per employed ()
Average gross wage ()
Unit labour cost ()
Labour productivity (y/y)
Unemployment (%)
Unemployment per education
level:
Primary (%)
Junior High school (%)
Secondary - 2-3 years (%)
Secondary - 4-5 years (%)
Tertiary (%)
FOREIGN TRADE
Import of goods (m )
1. good category (SITC 2digit)
2. good category
2004
2005
2006
2007
2008
19.274,6
2,3%
22.583,00
19.641,8
-0,1%
22.749,30
20.519,6
2,5%
23.574,90
21.484,0
2,3%
24.449,70
3,2
27,4
69,5
2,2
27,9
69,8
2,2
28,0
69,8
2,3
28,2
69,5
81.073
0,7
82.211
0,6
82.381
-
82.764
-
83.315
-
340
346
355
367
376
3,8
31,2
65,0
45.119,47
5.495,0
30.775
0,1
5,7
4,3
32,1
63,6
44.363,91
5.769,4
32.236
0,4
6,1
3,7
32,1
64,2
44.267,00
6.158,6
33.005
0,5
5,1
3,0
32,2
65,1
43.872,38
-0,2
4,6
3,7
32,2
64,1
- 4,8
6,3
6,5
3,9
5,2
6,3
2,8
7,2
5,2
5,7
7,1
4,1
6,5
2,4
5,1
4,6
3,1
5,6
3,2
4,6
3,8
5,5
5,3
5,6
4,3
5,0
2.134,15
2.336,20
2.797,19
2.882,39
2.543,41
3. good category
Export of goods (m )
1. good category(SITC 2digit)
2. good category
3. good category
Trade balance (m )
1. partner (county + m )
2. partner
3. partner
FDI inflow (m )
Main FDI sectors
Sector A (Cumulate data)
Sector B
Sector C
2.646,38
2.826,56
3.245,99
3.627,76
3.398,59
Umbria is a region with a population of 850.000 units, with a constant, although modest, growth
since 1981. This is caused by two different factors: one is a negative birth/mortality ratio, compensated by
a positive immigration rate. Therefore Umbria can be considered as a highly attractive area, able to offer
favourable social and economic conditions to people coming from other territories. However, a high
concentration of population is registered in the over 65 bracket (around 24% of the total population), well
above the national average of 20%, generating a higher demand for welfare structures and services.
The territory of the region is entirely covered by hills (71%) and mountains (29%), without any plains. Over
31% of the regional territory is occupied by forestry, while over 7% of the territory is occupied by protected
natural areas and parks.
The region is characterised by the presence of small municipalities: 50% of these has less than 3.000
inhabitants. 37% of the population of Umbria lives in the 3 biggest municipalities (all with more than 50.000
inhabitants), while a little over 15% of population live in the 62 smaller municipalities.
Infrastructures in Umbria are below the national average, especially as far as motorways are concerned
(the lower rate in Italy). The transport network and infrastructures of Umbria are one of the weaknesses of
the regional and a priority in the programming activities of the present regional Government.
The economy of Umbria can be divided, as with all other regions in Italy, in the 3 traditional sectors:
agriculture, industry and crafts, tourism and services.
The number of workers is 233,955, with an average of 3.5 employees per company. Companies with only
one employee account for 55.7 percent of the total, and employ 16.2% of all workers. 39.0% of companies
have from 2 to 9 employees, and employ 37.3% of all workers. Companies with 50 or more employees
represent 0.5% of the total (22.9% of workers). Unemployment rate is below the national rate at 5,2%.
There are 83.315 active companies in the region. An analysis of the dynamics in companies numbers show
that the number of registered companies has grown in 2008 by 0,4%, well above the national average that
registered a decrease of 0,4%. New companies have increased by + 7,2%, while there has been a mortality
rate of 6,8%.
The majority of companies are concentrated in the services sector (69,5%), operating mostly in commerce
(29.1%) and in other business services (20.3%). Tourism represent a very solid sector with further
possibilities of development that are actively pursued by the Region Umbria. 2 million tourists come to
Umbria each year, of these about 500.000 come from abroad. The tourist offer of the Region includes
attractive in culture and arts, religion and spiritual, environment and nature (including hiking, biking, horseriding), wellbeing, food and wine. Compared to a general decrease of arrivals in many Italian destinations
(up to -20% in some cases) Umbria has shown only a decrease of 2,2%. However, the balance of payment is
in tourism sector +41 million Euro, which shows the permanence in the region of high-quality and highspending visitors.
Industry, which represent 28,2% of the total (over half of which in the building sector), have a
greater weight in the province of Perugia, with 28.8% compared to 24.8% in the province of Terni. Here,
since the 19th century, there has been the development of steel, metalworking and chemical industries.
Historically and socially the city of Terni is closely linked to heavy industry: the Acciai Speciali Terni has
been for decades the propelling motor of the province of Terni and even of the region as a whole; since the
80% the steel-working sector has started to lose its importance, until the company was acquired by Thyssen
Krupp, Central Umbria is home of the majority of mechanical, aerospace, motor component and engine
producing industries; while the northern part of the region houses the sector of machineries for agriculture,
furniture production and graphic industries. The area around Perugia, capital of Umbria, has a long standing
tradition in textiles, fashion and food production. The latter is one of the strongest feature in the regional
economic structure as a whole, and Umbria is home to several international companies and multinational
operating in this sector, such as Nestl (formerly Perugina-Buitoni). Moreover, Umbria produces 10% of the
mineral water that are sold in Italy.
Crafts have a deep rooted tradition in Umbria, and is part of its cultural, artistic and economic
heritage. Crafts-working companies represent the main share of the industrial sector of the region.
Production of crafts is of the highest quality and includes ceramics, woodcrafts and furniture-making,
embroidery and some textile working.
Agriculture employs only 2,7% of active population but has a relevant position in the regional
economy and society. Main cultivation are vines, olives, wheat and tobacco, but, among main sources of
turnover, there is black truffle, whose quality is renowned in Italy and internationally.
The macroeconomic performances of Umbria are currently closely connected with the global crisis
and are suffering from the effects of the financial turmoil that has shaken the economies of the Western
world. However, the good results that have been realised in GDP in 2007 have protected the region from
the negative effects of the crisis in 2008 and the first quarter of 2009. In the period 2000-2007 the Umbrian
economy has grown annually by 1,2%, a little above the national average of 1,1%: this makes Umbria one of
the most dynamic region in Italy, along with Lombardia, Veneto and Tuscany. Good performances have
been registered in 2007 in particular in family expenses and earned incomes, along with export, labour
market and tourism.
Umbria exports 17% of its GDP, and the performance has been positive every year in the 2000-2007 period.
In 2007, export has grown by 11,8%, while national average has registered a + 9,9%, putting Umbria as 10th
in the rank of all Italian regions. Based on the latest available data, in 2008 Umbria has registered a
decrease of 6,3%, in line with the rest of central Italy. This negative data is heavily influenced by the metal
and metal-product sector. Without this one, the export performance is actually a +1,9%, thanks to food,
wines and tobacco (-16,8%), textile and clothing (+4,9%) and machinery (+4,7%). These are traditionally the
best performing sectors in export for the region.
As for labour market, despite some negative signs over the different three-months periods, 2008 has closed
with a positive sign for employment.
Total employment has risen by 9.000 units to 376.000, an increase of + 2,4%, one of the highest rise
registered in Italy. Employment rate is therefore 65,4%. Both male and female employment has risen: the
first by 1,2% (+3.000 units), the second more markedly by 6.000 units, a +1,3% over 2007.
Employment has risen in the building sector (+3.000), agriculture (+3.000) and especially services, excluding
commerce (+5.000), while employment in industry is stable.
However, given the increase of the resident population in Umbria, unemployment rate has risen slightly in
2008 to 4,8%, involving almost entirely male employment (from 6.000 to 7.000 unemployed), while female
unemployment remains unchanged at 12.000.
1.2 Main sectors
Table 2
Average aggregate values in Umbria
UMBRIA
Resident population (in thousands, yearly average)
Employed (thousands)
Salaried workers (thousands)
2005
863,4
371,4
250,2
2006
870,4
378,2
260,1
2007
878,7
388,4
273,8
Per capita value

Market price GDP per inhabitant (euro )
Market price GDP per worker (euro correnti)
Domestic final consumption per inhabitant (euro)
22.749,3
52.885,7
19.239,4
23.574,9
54.256,0
19.748,2
24.449,7
55.314,0
....
Salaried workers income per unit (euro)
31.459,2
32.235,7
32.963,0
Table 3
Added value at base prices and GDP Current price value (in million Euros)
ACTIVITIES
2005
2006
2007
AGRICULTURE, FISHERY, FORESTRY

Agriculture, fishery, forestry
Fishery and connected services
INDUSTRY
Strictu sensu industry
Mining
Manufacturing industry
Food, beverage and tobacco
Textile and clothing
Leather and leather working
Paper, graphic, printing
Cokerie, refineries, chemistry, pharmaceutical
Non-metal mineral working
Mechanics
Wood, plastic, rubber
Production and distribution of electricity, gas, steam and water
Building
SERVICES
Trade, hotels and restaurant, transport, communication
Banking and financial intermediation, real estate
Other services
387,3
383,9
3,4
4.902,3
3.582,2
52,0
3.073,5
444,1
338,4
23,9
168,8
95,6
402,8
1.228,1
371,8
456,7
1.320,1
12.254,1
3.956,4
4.361,5
3.936,1
407,7
403,0
4,7
5.081,0
3.762,6
48,1
3.230,9
423,5
333,0
20,9
169,3
99,9
411,7
1.388,4
384,1
483,6
1.318,4
12.683,5
4.021,1
4.566,8
4.095,6
433,9
....
....
5.383,2
....
....
....
....
....
....
....
....
....
Base prices added value

VAT, net indirect taxes on products and taxes on import
MARKET PRICES GDP
17.543,7
2.098,1
19.641,8
18.172,1
2.347,5
20.519,6
19.082,7
2.401,3
21.484,0
....
....
....
13.265,5
....
....
....
Table 4
Total jobs (annual average in thousands)
ECONOMIC ACTIVITES
2005
2006
2007

INDUSTRY
Mining
20,3
20,3
0,0
107,2
75,4
0,7
72,7
9,2
11,8
19,3
19,2
0,1
108,7
76,8
0,7
74,0
9,5
11,3
17,4
....
....
113,1
....
....
....
....
....
0,6
4,3
1,5
6,9
28,4
10,0
2,0
31,8
243,9
99,7
44,9
99.3
371,4
0,6
4,3
1,5
6,8
30,0
10,0
2,1
31,9
250,2
102,8
47,1
100.3
378,2
....
....
....
....
2005
14,8
14,7
0,1
109,9
78,0
0,7
75,3
9,6
12,9
0,7
4,4
1,5
7,0
29,0
10,2
2006
14,0
14,0
0,0
111,6
79,6
0,8
76,7
9,9
12,3
0,7
4,5
1,5
7,0
30,6
10,2
2007
12,3
....
....
115,8
....
....
....
....
....
....
....
....
....
2,0
31,9
248,1
89,1
2,1
32,0
255,9
93,0
....
....
264,9
....

Mechanics
Building
SERVICES
Other services
Total
....
....
....
257,9
....
....
....
388,4
Table 5
Total employed (annual average in thousands)
ECONOMIC ACTIVITES
INDUSTRY
Mining
Mechanics
Building
SERVICES
....

Other services
Total
45,1
113,9
372,8
47,3
115,6
381,5
....
....
393,0
a) Mechanics
Mechanics in its various forms by now represents almost one third of the overall regional
manufacturing industry, with the province of Terni surpassing that of Perugia thanks to both metallurgy and
electric and precision machinery whereas it has a smaller share in machine tools and transport equipment.
The differences already noted regarding the profile the weight of mechanics in Italy remain, both in terms
of the number of active local units and the number of employees.
Actually, the large iron and steel plants in Terni lessen, at the least in terms of employees, the distance
from the average national values.
Again for 2007, there are ISTAT data available on territorial economic accounting, which bring to light, for
Umbria, some aspects that seem especially significant.
Among these, as regards the amount of added value generated:
the low incidence (17.6%) of the whole of the manufacturing and processing industries;
this incidence is basically in line with the national average for the metals industry.
As regards the industrial employment levels, the gaps are smaller and the aspects to be highlighted are
those regarding internal differences.
The presence of some segments and some enterprises in the process of restructuring, the theory that some
companies suffer while passing from one generation to the next and the ample presence, in this area as
well, of subcontracting enterprises are all concomitant causes of an outcome that gives an early warning.
The main concentration of mechanical industries is in Terni and the Terni Province, where steel work,
metalworking and chemical industries are located; however, poles of mechanics are also in Central Umbria,
around Foligno (aerospace, engines, components) and North Umbria, around Citt di Castello (machinery
for agriculture).
Recent trends in mechanics can be summarised as follows:
Growth in employment
Strengthening of export and increase in average value
Strengthening of the medium-sized enterprises core
Best practices of internationalization processes
Cooperative network of SMEs for research and innovation
Collaboration with research and training centres.
Within the mechanical sector, automation represents an important sub-sector in regional policies.
In fact, Umbria has seen the investment and realisation of poles of excellence such as the
Mechatronic Pole in Citt di Castello (North Umbria), the Automotive research Centre at Pischiello, in
Passignao and the Aerospace and aero-industry pole of Foligno, as mentioned in other parts of this
document. These poles represent the will to enhance and strengthen the capacities and know-how of the
mechanical sector in an innovative application, exploiting the full potential of this segment of industrial
production. However, although some automation enterprise of high level are present in Umbria, in general
electronic and electric industries are not at the same standard as the mechanical sector. Therefore, Umbria
can count on a deep-rooted traditional know-how in the design and production of high-level mechanical
system, while lacking the expertise to realise the electrical devices necessary to control the mechanical
movements. Potentiality to create a finished product entirely in the Region is therefore still to be improved.
Another weakness is represented by the difficulties in finding skilled workforce able to design
electrical systems to be used in robotics, automotive systems, aerospace and bio-engineering. The need to
invest in the innovation of the mechanical sector has also brought to light the need of specific know-how
and skills. This is a gap the Region is striving to fill with specific policies, both in industrial programming and
in training. As far as training is concerned, resources and attention are devoted especially to the creation of
a workforce skilled in automation and mechatronics, both for high-school specialisation and post-graduate
targets.
b) Agrifood and agroindustry.
The Region of Umbria is highly characterized by the presence of numerous structures operating in
the agrifood and agroindustry sectors. In particular, as of todays date, there are approximately 300
companies in the sector, mainly small and medium-sized enterprises. Standing out among these are
nationally and internationally known brands, such as Colussi, Monini, Rocchetta, Mignini, Coricelli,
Farchioni, Spigadoro and many others, with productions ranging from biscuits/cookies to olive oil, pasta,
salami and other cured meats, wine, and tobacco.
The overall sales in this sector exceed 1,300 million Euros, employing a total of over 5,400 persons, while
the value of Umbrian agricultural production comes to about 753 million Euros, accounting for 1.8% of the
national total.
Along with the classic agrifood production chains, there are others now in the study and development
stage, such as that of biofuel and biomasses; many national and regional companies are involved in the
various stages of the latter (cultivation of rapid growth crops, harvesting, processing and utilization for
producing energy/heat).
Thanks to a number of well-chosen marketing policies and the success on the market of Sagrantino, a grape
variety with remarkable potential, Umbrian wines have gained a considerable share of the market. There
are four DOC wine zones: in Montefalco the king is Sagrantino, and then there are Orvieto, Torgiano, and
the Trasimeno area. Each has its own wine and its own expert winemakers.
The Region of Umbria is unrivalled for its olive oil. The olive, a slow-growing, extremely long-lived tree,
could very well represent this regions ability to maintain centuries-old traditions, and the extra virgin olive
oil of Umbria represents one of the most appreciated products on the markets. In Umbria, the position of
the olive groves (90% in hill areas and the remaining 10% in mountain zones), combined with the soil
conditions and the climate, result in approximately 90% of the entire production, an average of 8,000,000
litres per year, going to extra virgin olive oil. There are four protected designation of origin (PDO) zones.
Agri-food industry is particularly important in Umbria, both in quantity and for its role form the
social, environmental and cultural point of view. Sectors involving the production of olive oil, wine, meat,
pasta and tobacco have a significant role for the income produced and the enhancement of the territory
and its traditions. However, agri-food companies in Umbria have traditionally a medium-small dimension,
and this proves to be a weakness as it reduces the possibilities to invest in R&D, and makes the relationship
with distribution more difficult. In general, agri-food sector has a 6,5% share on production value, and a
3,4% share on added value to total production Agri-food sector has more importance in Umbria compared
to the rest of Italy and represents the third most important regional economic sector.
c) Textiles/clothing/fashion
In 2007, the textile/clothing/fashion industry has registered a total turnover of more than 54 billion
euro. Export has been of 28 billion euro, and its share on turnover has increased from 48,4% in 2002 to
51,8% in 2007.
The textile/clothing sector is still the second most important one in Umbria, counting 1.823 companies in
the first trimester of 2009, - 276 compared to the same period in 2004 (2.099 companies).
As with most other sectors in Umbria, individual companies are 54% of the total, while limited companies
are only 18,7%.
As for the territorial position, the sector is mainly concentrated in the Province of Perugia, where 147
companies are located. Based on the data provided by the trade associations, about 90% of enterprises are
sub-contractors and work for 1 partner: these are mainly the most prestigious representatives of Italian
luxury brands. The sector can therefore be described as fragmented into small and micro enterprises, that
have high-level skills aimed at niche and high-quality productions. These enterprises use bank credits
mainly for medium terms management of current expenses. A particular relevance in the sector is
cashmere production, with world-famous best practices.
Mechanics in Umbria is a sector that, although not generally considered high-tech, is able to
express innovation capacities. In fact, in Umbria, the most innovative sub-sectors of mechanics, such as
mechatronics, advanced mechanics, along with metal special materials and micro and nano tech, are the
priority sectors included in the Technological District DTU project.
Innovative aspects of mechanics in Umbria are the surfacing of new initiatives and the efforts to integrate
sub-sectors and specialised know-how, especially through the setting and or the strengthening of
relationships and networks among enterprises. This can often become veritable technological poles, where
SMEs with different but coherent know-how, experiences and competences mange together research
projects and development of new technologies. Some examples that are worth mentioning are: the
European Centre for advanced research and projects for the automotive sector, that is located in the Villa
Pischiello in Passignao, Perugia, where regional SMEs and Universities, supported by Region Umbria,
cooperate in the development of innovative products and technologies, also collaborating with
internationally renowned companies; the Mechatronic Pole in Citt di Castello, Perugia, that brings
together Umbrian SMEs in the mechatronic and mechanic automation processes sector, multinationals as
technological partners, universities into developing projects for research and training; the High Technology
Centre in Foligno, Perugia, where 11 SMEs with different but coherent specialist know-how have developed
an integrated project aimed at enhancing their technological level and strengthen their productive
capacities and market positioning.
The aerospace pole of Umbria

The Aerospace Pole of Umbria has been promoted and set up by the Umbrian branch of
Confidustria in 2008 through the involvement, initially, of 6 companies of this sectors (Era Electronics,
Fucine Umbre, Garofoli, Ncm, Oma, Umbra Cuscinetti). Ordinary members of the Pole are companies that
work in research, design, project and production of components and systems in the aerospace industry;
supporting members are institutions and public bodies that cooperate in this sector. At the moment there
are 28 companies as members of the Aerospace Pole, with a total turnover of 450 million euro and a total
of 2.500 workers
Archimede Solar Energy is the company belonging to the Gruppo Angelantoni that works in the renewable
energies sector and that, along with Techint, Ronda High Tech and Duplomatic Oleodinamica has set up a
consortium, Consorzio Solare XXI, aimed at developing new technologies in concentrated solar power. The
Consortium is the first of its kind in Italy, and the most important Italian player on the international market.
Umbria is one of the 21 Italian Regions that, as laid down by Art. 117 of the Italian Constitution,
have the authority to pass laws within the provisions of National Framework Acts and in specific sectors.
Following the subsidiarity principle of National Act n. 59/1997, also known as the Bassanini Act, that has
reformed the Italian administrative system, it is the structure nearer to citizens, the Municipality, that is in
charge of the management of the public life, while other institutions, such as the Province, Region and
State, are competent over matters that cannot be carried out at local level.
Subjects over which the Regions have legislative authority are: environment, protection of soils, public
works, housing policies, testing of alternative energies, disaster management, coordination of integrated
programming aimed at job security, agriculture, hunting and fishing, coordination of integrated actions and
programmes for food quality and safety, mobility and infrastructures, urban policies, new technologies,
productive activities and trade, energy planning, health.
Regions have duties of regulations, programming and monitoring, while all other local public bodies have
functions of administrative management.
Region Umbria covers a territory of two Provinces, Perugia and Terni, and 92 Municipalities; Perugia is the
capital of the Region.
Organs of the Region are the President of the Regional Government: is in charge of the political programme
of the Government and coordination, has direct authority on matters of programming and instruments
supporting local development. The President coordinates all institutional communication activities and
represents the Region in the relations with the National Government and EU institutions; the Regional
Government, the executive organ that is responsible for the political-administrative programme of the
Region and all matters not expressly reserved to other organs; the Regional Council, that coordinates and
monitors the political programme of the Region, is the legislative and regulating organ of the Region and
controls the administrative activity.
The regional programming activity
The Regional Government, in order to define specific local development projects, implements a
negotiating process with local institutions, economic and social bodies, trade unions. Through this process,
and based on a throughout context analysis, the following are agreed upon:
- territories and areas involved
- objectives
- strategic options as basis of objectives for each project
- the maximum financial amount for each project.
This process aims at creating strong partnership able to project, manage, implement and monitor all
decisions concerning local development through an integrated approach, whose main reference is the Pact
for Local Development of Umbria, a veritable contract among all main Regional and local public and private
bodies to carry out the economic programmed activities within the Umbrian territory.
The Pact for Local Development of Umbria was signed in 2002 and all participating actors committed to the
realisation of two types of integrate projects, the territorial type, focused on a specific portion of the
regional territory, and the thematic type, devoted to a single sector of activities. Priorities and timings are
defined through the DAP, Annual Programming Document, the act that defines together the annual
objectives referred to economic development and the relevant financial and budget programmes (as per
art. 14 of Regional Law 13/2000). The present DAP for the period 2009-2011 is the document that contains
all the relevant information and know-how regarding the social and economic perspectives of the Region
Umbria, along with the medium-term objectives, the initiatives and the activities under way.
Integrated project designing is therefore the instrument and the method adopted by the Region for the
implementation of regional policies on economic development.
Umbria regional policies, as they are focused on the growth of regional competitiveness and
innovation of the productive system, support strategic sectors through actions that are aimed at enhancing
investment programs by enterprises, particularly those in start up.
Instruments that are made available are regional and national laws and specific measures that give
financing, grants and incentive to selected projects form enterprises.
The main National law devoted to the support of enterprise creation in n. 185/2000, Chapter I and Chapter
II.
Self-employment (Chapter II)
This is aimed at supporting the realisation and start of small enterprise activities (also in associated
form) form unemployed and people looking for employment for the first time through the following:
Self employment (as an individual company) for investments not over 25.823
Micro-enterprise (as a private partnership ) for investments not over 129.114
Franchising both as a company and as private partnership.
Financial help is provided for:
investments (grants and loans)
management (grants)
technical and management assistance services.
Self enterprises (Chapter I)
This promotes the creation of new enterprises and the expansion of existing ones, providing that
the majority shareholders are young people, aged 18-35 and resident in the areas where incentives are
provided.
Support can be for:
investments (grants and loans)
management expenses (grants)
training (grants)
Law 215/1992, "Positive actions to support women entrepreneurship", provides support for new and
existing enterprises set up by women. Financing is provided for investments.
Regional Law n. 12/95, Support for new enterprises set up by young people, provides financing
for enterprises set up by people aged 18-32, both as individual or as companies (majority shareholders
must be aged 18-32), that are located and registered in Umbria.
All sectors can be financed, through the following:
1) support towards building costs, up to a maximum amount of 1.291,14;

2) total reimbursement of expenses for consulting and technical assistance for the first 3 years of
activity, up to a maximum of 3.098,74 each year;
3) grants for up to 50% of costs incurred in the first year of activity, up to a maximum of 5.164,57;
4) advance financing up to a maximum of 80% and up to 123.949,66 for investments.
The law provides additional support in the form of promotion of entrepreneurship, the monitoring
of the entrepreneurial ideas expressed by the territory, assistance to enterprise set ups, the offer of specific
training courses, and support to fill in the necessary forms to access financing.
Regional law n. 18/2006, Qualification and enlargement of tourism enterprises, is devoted to the
improvement of the tourist offer of the region through financing of tourism enterprises.
Financing is provided for restructuring and enlarging existing enterprises and starting new ones.
In addition, support to SMEs is also available through the intervention of the regional financing agency
Gepafin, that provides guarantees, loans and minority shareholdings.
The guiding principle of all activities in regional policies of cohesion by Region Umbria is the financial,
programming, sector and territorial integration.
This economic development strategy is carried out through the fullest integration among the activities
included in the different financial instruments (such as ERDF and ESF ROPs, RDP and the FAS- Fund for
disadvantaged areas-programme), among different Axis within the same Programme, and, finally, among
different measures within the same Axis (inter-Axis integration).
Among the most significant interventions devised during the present programming period are the
Integrated, multi-measures calls for proposals, aimed at fostering the innovations and development of the
regional productive context, with particular reference to agricolture, manufacturing industry, private
tertiary and the development of the integrated Tourism-Environment-Culture sector. This sector-focused
approach fosters the promotion of integration among enterprises with the aim of supporting the growth
and competitiveness of the regional economic system.
The DAP 2009-2011 has individuated 4 packages of thematic priorities. One of the them is
competitiveness and it includes a series of actions aimed at strengthening links between enterprises in
order to carry out strongly innovative projects in three macro-sectors: Rural Development, Industry and
Tourism-Environment-Culture.
Specific aims are:
1. growth of competitiveness level of single enterprises thug the creation of new products, new
organisation forms and a better access to financial resources;
2. growth of added value to production through integration between different actors within the same
sector;
3. foster the method of working within a network and the creation of stable relations among
enterprises and between enterprises and research centres.
These objectives have been further confirmed and focused towards a better competitiveness of Umbria
as a whole in occasion f the present programming period for the ERDS and ESF ROPs 2007-2013..
As far as intervention aimed at supporting SMEs through EU financial instruments, the ERDS ROP 20072013 has devoted an Axis specifically to the strengthening and enhancement of the Umbrian economic and
productive system. Means to reach this objective are actions aimed at promoting an innovative
entrepreneurial approach. In addition, within the programming objectives, there are provisions for the
realisation and financing of interventions that, based on EU regulations, can be defined as state aid. These
are aimed at raising the quality level of the Umbrian know how and system in the field of enterprise
innovation.
The general objective is to boost private expenditure in Technological Research and Development and
the demand for innovation by enterprises in Umbria, with particular reference to SMEs.
Measures are aimed at encouraging:
Technology transfer processes
Support to public-private partnerships and to network of enterprises
Support for investments
Development of information society
Help towards the creation of innovative enterprises
Supply of financial services aimed at supporting highly innovative projects and technology transfer
efforts by enterprises..
The main financial means of intervention are devoted to support innovation throughout all leading
regional sectors (agri-food, manufacturing, mechanics, biotech, energy efficiency).
Attention is also devoted to know-how and training.

The ESF ROPs 2007 -2013, that represents the main programming document for the 2 Provinces
(Perugia and Terni) for employment, labour, training and education policies, includes several measures and
opportunities that enhance human resources within single or network of innovative enterprises, supplies
several types of incentives for employment inclusion and provides personal training vouchers to support
lifelong training. The Programme also foresees financing to research and innovation projects by single
enterprises, alone or in cooperation with Universities and research Centres.
Additional provisions for regional SMESs are foreseen within the Rural Development Programme 20072013, where 760 million euro are provided for investments in favour of agricultural, environmental and
forestry interventions, along with support to the diversification of rural economy.
The Umbria Region considers the redevelopment of brownfield sites as a significant measure to
stimulate and promote local development. Over the past 15 years, through several pilot projects, the
Umbria Region has provided local communities with technical and financial assistance to facilitate the
development of new business re-using abandoned industrial sites.
The Region plays the role of coordinator of all public stakeholder to manage the development process:
many SWOT analysis have been realised in order to develop the identified sites within the territory, along
with the definition of the range and intensity of economic uses associated with the development. On the
basis of these studies, financed by local and European resources, a complete map of restructured Umbrian
industrial areas that are ready for new investments has been defined. The services offered by the local
authorities are t technical assistance for the localization and for the creation of new enterprises, availability
of financing to support the business idea, streamlining of bureaucratic procedures. The public stakeholders
involved in this field developed , also, common strategies to preserve and exploit their environmental and
real estate heritage.
Specific tools have been defined in order to assess and enhance the economic aspects of architectural
heritage, taking into account each peculiarity (specific problems, users, regulations, etc). Best practices of
the experience in Umbria as example of brownfield restructuring are the Rocca Albornoziana, an anciene
fortress in Spoleto, converted into cultural site, the Bosco plant in Terni, reconverted for industrial use, the
creation and management of public consortia for the development of specific industrial areas where
privileged conditions are offered to selected enterprises responding to quality criteria.
Umbria offers enterprises a range of services by public and private institutions that provide all the
necessary support in all phases of the process of constitution, localisation and start of investments.
In general, services can be summarised as follows:

Information services
Training services
Research services
Tecnical assistance
Internationalisation services
Financial services
As far as public services are concerned, these can be accessed by all enterprises, regardless of their
dimension and sector of activity.
Services offered by Public Administrations are committed pay attention to new activities and products,
keeping up with market demands and innovation, and to provide qualified services, as these are crucial to
assure competitiveness of enterprises and to the economic context..
In particular, innovations introduced in Public Administrations include bureaucratic simplification, efforts
towards integration between different services and a better cooperation between public and private
bodies, electronic data processing and e-government. Weakness that have to be improve are the lack of
monitoring of changes of demands emerging from the market, especially as far as two important sectors of
activities: R&D and advanced services for enterprises.
Despite some improvement, moreover, many services concerning training, information, innovation,
organisation, promotion are still the responsibility of a great number of different bodies, so that excess of
information, overlapping and competition among different institutions contribute to the dispersion of
allocated resources.
Particularly relevant BSOs are: Sviluppumbria, Gepafin, Consortia for Industrial Areas (Terni and Orvieto)
and BIC-Invitalia.
List of regional BSO.
Chamber of Commerce, Industry, Agriculture and Crafts of the Provinces of Perugia and Terni.
Chambers of Commerce are public bodies that act in the general interest for local enterprises; are
autonomous bodies, as they have their own Statute and are independent, both from the financial and
management point of view.
The present multiannual programme foresees several priority objectives, including internationalisation of
SMEs, diffusion of innovation and of technology transfer, promotion and certification of typical local
products; the improvement of local infrastructures. Chambers of Commerce oversees a series of activities
concerning administration of the enterprise system (register of all enterprises, lists, etc.); moreover, they
have a role in promotion of local SMEs and economic development and in financing of projects and/or
programmes that are presented through public calls for proposals.
The 2 Umbrian Chambers act in close collaboration with other public institutions, and in particular
with the 2 Provinces, Perugia and Terni, for the best possible integration os strategies and activities for the
promotion and the enhancement of the identity of Umbria, both in Italy and abroad. The Chambers belong
to a national and international network that allows to access data, information and services worldwide.
Moreover, the Chambers of Commerce organise specific and tailor-made training activities to meet the
needs of the local business community and promote meetings, seminars and events.
Camera di Commercio di Perugia/

Address
E-mail
Legal Status
Years of activity
Fields of activity
N. of employees
activities
SMEs
ups
Sources of funding
Chamber of Commerce - Perugia

Via cacciatori delle Alpi, 42 06100 Perugia Italy
urp@pg.camcom.it
Public body
170
SME services
50
Training, information on public incentives and Technical assistance to
present business projects under public calls.
Information and technical assistance
Enterprises overseen by the Chamber.
Camera di Commercio di Terni / Chamber of Commerce - Terni

Address
Largo Don Minzoni 6 05100 Terni
E-mail
cciaa.terni@tr.camcom.it
Legal Status
Public body
Years of activity
170
Fields of activity
SME services
N. of employees
40
activities
Training, information on public incentives and Technical assistance to
SMEs
present business project under public call.
Main activities addressed to start Information and technical assistance
ups
Sources of funding
Enterprises overseen by the Chamber
Sviluppumbria, Regional agency for economic development of Umbria
SVILUPPUMBRIA
Address
E-mail
Legal Status
Years of activity
Fields of activity
N. of employees
activities
SMEs
ups
Sources of funding
Via Don Bosco, 11 06121 Perugia

Svilpg@sviluppumbria.it
plc
36
Economic development
42
Local development, territorial marketing, enterprise creation ,
international cooperation.
Public bodies and enterprises
Research,
Technical assistance
Public shareholders
Sviluppumbria, which was instituted by regional law in 1973, is Region Umbrias economic
development and promotion agency. The Region Umbria is the majority shareholder, along with other
public bodies. .
Sviluppumbria has steadfastly played a key role as a consultant for the Region, local institutions,
organizations and bodies in a wide range of areas. It offers services for the creation of new entrepreneurial
initiatives and for the support of existing businesses and company groupings to attract investments,
economic activities and partnerships. Its core business is regional marketing and FDI attraction, through
several instruments and tailor-made packages of opportunities identified on the territory. Sviluppumbria
also acts as promoter and coordinator of development projects, both at regional, national, EU and
international level.
Confederazione Italiana Agricoltori ( CIA) Umbria Italian Confederation of Agriculture
CIA Umbria
Address
E-mail
Legal Status
Years of activity
Fields of activity
N. of employees
activities
SMEs
ups
Sources of funding
M. Angeloni 1 , 06125 Perugia

umbria@cia.it
Confederation
32
Services to agriculture enterprises
2657 at national level
Farmers and enterprises in agriculture.
Information, training and technical assistance
Annual fees paid by associated enterprises.
The Italian Confederation of Agriculture (CIA) is a non-confessional organisation operating in Italy,

Europe and at International level for the progress of agriculture.
CIA is articulated into different associations, institutions and companies that act for food safety,
environmental protection, pension schemes, social, health and fiscal assistance, technical consulting,
training and organic farming
CIA has a National office and regional, provincial and local branches, and is present throughout Italy.
In Umbria, CIA has 18 local offices e 5 branches, carrying out activities referring to technical and
management assistance legal and fiscal assistance, project management and development, support
services for SMEs competitiveness.
National Confederation of Crafts and SMEs ( CNA).

CNA
Address
E-mail
Legal Status
Years of activity
Fields of activity
N. of employees
activities
SMEs
ups
Sources of funding
Via Morettini, 7 06128 Perugia

info@cna.perugia.it
association
60
SME services
40
SMEs
Training, information, technical assistance
Technical assistance in developping of business enterprise project
The aim of CNA is the promotion a veritable culture of enterprise, the qualification and updating
of know-how of entrepreneurs and workers and the support to the realisation o fan environment that is
favourable to innovation in small craftworking enterprises. CNA organises seminars, meetings and
researches on economic and social matters and supports initiatives that put actions in favour of enterprises
on the map of public policies. Additionally, CNA, thanks to its professional know-how and expertise, can
provide SMEs with consulting services, assistance and information in fiscal, administrative, legal and
insurance matters and on problems concerning environmental protection and workplace safety. CNA
strives towards meeting the demands of enterprises with innovative and coherent responses and services,
in order to enahnce compettiveness and quality of production in all sectors..
Confapi Umbria
CONFAPI
Address
E-mail
Legal Status
Years of activity
Fields of activity
N. of employees
Piazza della Repubblica 7 06123, Perugia

info@piccolamediaimpresa.com
Association
40
SME services
20
SMEs
activities
SMEs
ups
Sources of funding
Training, information, technical assistance

Technical assistance in developping of business enterprise project
Confapi Umbria is an association whose aim is the protection, development, promotion and
representation of moral and economic interests of enterprises and their need concerning production.
Confapi promotes and supports industrial and business culture and progress. To this aim, Confapi provides
information to all members and organises meetings, seminars, stiduies and researches, press actions and
public debates. Confapi represents memeber enterprises in the relationship with Institutions, Public
Administrations and all other trade associations, economic and political bodies, at local, National and
International level.
Confcommercio Umbria:
Occupations and Self-employment
Confcommercio Umbria
Address
E-mail
Legal Status
Years of activity
Fields of activity
N. of employees
activities
SMEs
ups
Sources of funding
Italian General Confederation of Enterprises, Professional
Via Settevalli, 320 06129 Perugia

info@confcommercio.pg.it
Association
64
Sme
10
Trade, tourism and service sectors
Advising, training and technical assistance in the definition of business
project to be presented under public call
Front office and information on public call
The Italian General Confederation of Enterprises, Professional Occupations and Self-employment is

the largest enterprise-representative in Italy, with more than 820,000 members from the trade, tourist,
service and transportation sectors.
Confcommercio, an independent political subject, promotes the development of the business sector where
firms of the tertiary sector operate, in a broad context and with the aim of expanding the entire economic
system. As declared in its Statute, the Confederation has the following objectives:
a)
the guardianship and representation of the economic sectors which identify themselves in
the Confederation, in the regards of public and private institutions, as well as political, social, economic
organizations and trade-unions, including the international ones;
b)
the increase in value of the economic and social interests of entrepreneurs and the
acknowledgment of their social function.

Transportation and innovative sectors, such as computing, telecommunications, radio and television
services, communication and advertising, are present, along with other, more traditional areas, such as
education, real estate agencies, private health services, etc.
Confindustria Umbria
Confindustria Umbria
Address
E-mail
Legal Status
Years of activity
Fields of activity
N. of employees
activities
SMEs
ups
Sources of funding
Via palermo 80, A 06129 Perugia

info@confindustria.perugia.com
Confederation
100
Services to SMEs and representation of memebers interests and
projects.
10
Enterprises.
Relationship with public institutions and other trade associations,
training, project development, organisation of meetings, events,
studies and researches.
Information
Founded in 1910, Confindustria is the main organisation representing Italian manufacturing and
services companies.
A total of 135.320 companies of all sizes - employing a total of 4.954.000 workers - are voluntary
members of the organisation.
The fundamental value underlying Confindustrias activities is the belief that free enterprise and
free economic activity, within the framework of a market economy, are key factors for the growth and
development of society as a whole.
In its by-laws, Confindustria pledges to contribute to Italys economic and social growth by
cooperating with both Italian and international political institutions and economic, social and cultural
organisations.
To this end, Confindustria represents the interests of Italian companies to leading political and
administrative institutions, including parliament, the government, trade unions and other social partners.
Confindustria is the leading organisation representing the interests of Italian companies that
produce goods and services in the political sphere and in relations with trade unions.
Companies can become members of the Confederation through local associations or trade
associations and sector federations that are Confindustria members.
Direct Confindustria members are 103 local associations: consisting of companies established in
the same provincial area, from different production sectors;
97 trade associations: consisting of
companies from all over Italy that operate in similar and related production activities;
21 sector
federations: consisting of trade associations, directly or indirectly affiliated with Confindustria, and
special aim federations: formed by trade associations to achieve a common goal or roll out a project in
special areas.
As concerning the Umbria federation the main services addressed to the local SME are training and
information and communication and technical assistance on enterprise start up.
Gepafin spa
Gepafin spa
Address
E-mail
Legal Status
Years of activity
Fields of activity
N. of employees
activities
SMEs
ups
Sources of funding
Via Campo di Marte 9, 06100 Perugia

info@gepafin.it
plc
15
Guarantees, shareholdings, and financing
20
Enterprises.
Public
Gepafin Spa is the regional financing company promoted by the European Union, the Region of
Umbria and by 11 credit institutions at both the regional and national level to sustain and develop the
activities of small and medium enterprises in Umbria. Sviluppumbria is the pivot shareholder of the
company.
Gepafin manages European Community funds to facilitate the access of small and medium
enterprises in the industrial, agricultural, artisan and service sectors to financial and risk capital markets,
which provide funds for refinancing and company restructuring.
Guarantee assistance
Gepafin offers:
1) guarantees to cover business insolvency risks even for agricultural and new companies;
2) guarantees to cover exchange and interest rate variations;
3) interest subsidy for PAIP area investments; interest subsidy for loans given to small and medium
enterprises in the Province of Terni and the Municipality of Spoleto.
4) guarantee fund for areas hit by the earthquake of 1997.
Share capital interventions:
1) guarantees to shareholder for underwriting of share capital; advances to shareholders for
increases in share capital;
2) guarantees to institutional investors for investment risk; advances to institutional investors for
investment risk;
3) direct investments; risk capital companies.
Consorzio aree industriali Terni , Narni, Spoleto
Consorzio aree industriali

Address
E-mail
Legal Status
Years of activity
Fields of activity
N. of employees
activities
SMEs
Via Armellini 1 05100 Terni

info@tnsconsorzio.it
Consortium
12
Sme services
3
SMEs
Information, Communication, promotion, advanced services ( TIC/
Infrastructures, etc)
Technical assistance for the localization in Consortium areas
ups
Sources of funding
Public
The Consorzio per lo sviluppo delle aree industriali di Terni Narni e Spoleto (Consortium for the
Development of the Industrial Areas of Terni, Narni and Spoleto) is constituted by five bodies: the
Municipality of Terni, the Province of Terni, the Municipality of Narni, the Municipality of Spoleto and
Sviluppumbria Spa.
Regional bodies, public-sector financial institutes, entrepreneurial associations, and banks that
promote the economic and industrial development of their regions can all take part in the consortium.
Within the district, The Consorzio per lo sviluppo delle aree industriali di Terni, Narni e Spoleto
promotes the necessary conditions for the creation and development of industrial areas. To this end, it
constructs and manages infrastructures and buildings for entrepreneurial activities and promotes support
services and every other type of service connected with manufacturing activities.
INVITALIA BIC UMBRIA

INVITALIA BIC UMBRIA
Address
E-mail
Legal Status
Years of activity
Fields of activity
N. of employees
activities
SMEs
ups
Sources of funding
Strada delle Campore n. 13 05100 Terni

info@invitalia.it
Association
10
Sme services
8
SMEs
Information, Communication, promotion and technical assitance
Public
Invitalia's Inward Investment arm promotes inviting business opportunities and strives for the
success of each investment project. It embodies a single and reliable national reference point for foreign
investors eager to expand or to set up a new business in Italy by providing a full spectrum of services in all
stages of the investment process.
Mission Statement: Entrusted by the Italian government, Invitalia is a partner of choice for
integrated and flexible investment solutions based on value added services. Strongly committed to
promote globally Italy's competitive advantage, to boost innovation & local industrial development and to
upgrade local competitiveness.
Invitalia is composed by 17 regional companies, for Umbria the company is BIC- Umbria. Its service
kit spans from updated information on the business environment, to investment opportunities in specific
sectors and business advisory services throughout the implementation process. It offers also phisical places
as
location
to
the
enterprises.
4. CONCLUSION
In general, the main features of the regional context can be summarised as follows.
Strenghts of Region Umbria are
the high capacity to attract people and qualified workforce,
low unemployment rate compared to the national average,
a high public spending for R&D,
highly qualified human resources,
a higher than average use of alternative energies,
a wide presence of protected natural portions of territory,
a high concentration of natural, cultural and urban resources
the high level of schooling of the workforce.
On the other hand, weaknesses are
the high incidence of population over 65 years of age,
a low level of added value for worker unit,
low infrastructure network,
low patent capacity,
low turnover share coming from new products,
low propensity towards science-based innovation,
concentration of Umbrian enterprises in mature sectors,
low transport accessibility,
increase in long term unemployment.
Such a context presents therefore a general situation of structural fragility and weakness and
difficulty to transform innovative potential into productive aims. At the same time, the high level and skills
of the workforce and the extremely high participation of all social and economic stakeholders to the
regional policies processes, are the main features of an attractive territory, where favourable conditions
have increased the flows of people, capital, resources and investments.
In the course of the last years the region has faced a difficult economic situation, partly caused by the
difficulties at global level, but also due to the federal reform in Italy and the progressive limitation of the
traditional financial sources. This, rather than being merely a weakness, has also increased the regional
government programming and administrative capacity.
In order to face this challenge and preserve a growth based on a network system of cities and
territories, on social cohesion, on environmental wellbeing and on the qualification and enhancement of all
territorial resources and potential, Region Umbria has chosen an integrated approach.
The main
instrument, as noted before, is the Pact for Economic and Social Development, that brings together all
regional stakeholders into sharing all choices concerning regional programmes. In general, the region has
adopted a participative method of programming all activities and all its actions are carried out through and
integrated approach, by putting together public and private concerns and projects.
The macro-objectives that have been set by the Region Umbria in its action to support local
development are:
1.
providing support to strategic themes of research, innovation, strengthening of network of
enterprises in order to enhance competitiveness;

2.
support to innovation processes, promotion of innovative investments, strengthening of
small-dimension enterprises through development projects and introduction and enhancement of the use
of information and communication technologies;
3.
promotion and support to the diffusion and transfer of innovation in the companies
processes including organisation, management and internationalisation;

4.
strengthening of financial structure of enterprises;
5.
meeting transversal objectives of energy saving and environmental protection
6.
improvement of the infrastructures.
In order to meet these objectives the main financial sources that have been allocated come from
EU sources, from the Regional Fund for productive activities, from specific national funds. The total amount
coming from these resources of 143.340.000 Euro. The more general outlook of the commitment of Region
Umbria to the improvement, strengthening and support to the territory and its growth includes resources
coming from EFS ROP, RDP and Ob. 3 ROP. The latter is particularly relevant for the Region as it is coherent
with its policies regarding partnerships with other European and international regions. In particular, close
relationships have been established with the North-East Region of Romania, with the Province of Prahova
(both Romania) and with the Province of Vojvodina (Serbia), in order to develop common projects in
themes of local development, environmental protection and enhancement of cultural heritage.
Lastly, it is worth mentioning that a recent study by the Italian newspaper Il Sole 24 Ore has applied
the 2009 findings of the Stieglitz Commission (set up by President Sarkozy in order to produce a report on
the Measurement of Economic and Social Progress) to the Italian Provinces. By measuring the indicators
concerning quality of life, health, schooling, personal cultural activities, participation to political life,
security, environment and social relationships, the two Umbrian Provinces come at the top of the rank in
Italy: Perugia 12th (56th by traditional GDP measurement) and Terni 21st (62th GDP).
These parameters contribute to generate the attractiveness of Umbria and testify of the social and political
efforts put into place to make the region an better place to live, invest and create wealth, both material
and immaterial.
SLOVENIA: Mura - Murska Sobota
STRUCTURE
GDP (m )
GDP ( y/y)
GDP per capita PPP ()
Structure GDP (%):
Agriculture
Industry
Services
No. active companies
Total turnover
Agriculture
Industry
Services
EMPLOYMENT
Total employment
Employment per sectors:
Sector A (%)
Sector B (%)
Sector C (%)
V.A. per employed ()
Average gross wage ()
Unit labour cost ()
Unemployment (%)
Unemployment per education
level:
Primary
Secondary (vocational or else)
Tertiary (university)
FOREIGN TRADE
Import of goods (m )
2. good category
3. good category
2004
2005
2006
2007
2008
1.132
1.176
1.249
9.072
9.399
10.223
8,1
35,9
55,4
8,3
34,5
57,3
6,9
36,2
56,9
1.125
293.523
(m SIT)
75,1%
1.149
319.480
(m SIT)
74,5%
1.176
380.136
(m SIT)
84,55
1.268
1.812.260.000
()
84,8%
1.376
2.050.086
()
86,9%
14,0%
44,8%
41,2%
12,8%
41,0%
45,7%
13,4%
40,4%
46,2%
13,0 %
40,1%
45,9%
35.341
35.178
35.140
35.637
930
18.906
1.000
20.369
1.009
23.876
1.063
16,8
17,1
15,7
13,4
39,2
49,1
11,7
39,1
49,3
11,6
37,5
49,4
13,1
36,6
49,4
14,0
491.861.597
35.393
649.688.464
2710
8471
8433
Export of goods (m )
2. good category
3. good category
Trade balance (m )
1. partner (county + m )
2. partner
3. partner
FDI inflow (m )
Main FDI sectors
Sector B
Sector C
447.523.814
550.992.575
12.407
8471
3909
As Slovenia has no official independent regions, with their own governmental authorities, Pomurje
is only one of the 12 statistical regions of the country. However, there is a lack of statistical information
about the region and especially of data concerning the economic activities of regional companies.
Pomurje is the least developed region in Slovenia with reference to all economic indicators. The
traditional activities, like textiles and agriculture, have been hit by the modern economic environment, thus
resulting in the worse economic situation ever. In 2009, two major losses affected the regional economy:
the closing of the biggest meat processing company and the closing of the once biggest clothing company in
Europe. The meat processing company has very little chances to be renewed, whereas the clothes
producing company of Mura is in the process of restructuring and basically restarting on new grounds. This
means, that the importance of the economic sectors in the region is changing and has shifted to other
sectors.
Pomurje has more than 8.000 unemployed (end of September 2009), 75% of which with less than
middle school education level. This makes the possibility to attract or develop high tech industries difficult.
At the end of 2008 in Pomurje there were 1.376 companies and 3.127 entrepreneurs. These numbers have
had a positive trend year by year, but the problem is in the structure of companies. As for the
entrepreneurial activities, the entrepreneurial spirit is developing, although more because of the necessity
entrepreneurship and not because there is really need of high tech or very profitable activities. The
average number of employees in the companies in Pomurje was 14,2 persons. 409 registered companies
have not had any employees.
On the other side the amount of industrial production in 2008 has fallen for the first time in 5 years
by 1,5%. Exports of regional economic entities in the region amounted to 19.777.040 Euro, whereas
imports amounted to 22.944.376 Euro. Exports rose by 2 %, imports by 7 %.
As all companies together had a positive balance, 12,5 m Euro, entrepreneurs in Pomurje generated all
together a profit of 21,93 m Euro. The comparison with previous years shows that the economic power of
the region has worsened in 2008. 62% of companies in the region had a decrease in profit in 2008
compared to 2007. In fact, 438 companies that had profit in 2007 have turned into red digits. The highest
losses have been registered in restaurants, catering activities and agriculture. The highest profits were
registered in processing industry and construction. Indicators for Pomurje are lower than in Slovenia:
Income/employee: 34 % less
Added value/employee: 30,2 % less
Gross salary/employee: 20,2 % less.
Because of the above description of the economic situation in the region, the Slovene government
adopted a special law for the Pomurje region aiming at stimulating the regional economy and attracting
investments to catch up with the rest of the country. The Law contains the following measures:
-
Improvement of Pomurjes competitiveness:
Priorities: geothermal water and renewable sources of energy, agrofood and tourism
Target: 1.000 new employees
Co-financing of investments to create new employment
Incentives for investments (70 % of the value of investments into technology can be
deducted from the corporate tax base)

-
Incentives for employment creation (70 % of the wages of new employees can be deducted
from the corporate tax base for 1 year, while in case of employment of the target groups the company
gets reimbursed for the social contributions for 2 years)
-
Priority handling of projects from Pomurje:
Establishment of an intercompany training centre: further training of employees
Establishment of a regional economic centre: infrastructure for economic development
Improvement of competitiveness in the agrofood sector and diversification of agriculture
Improvement of the water supply system in Pomurje
Establishment of a governmental office in Pomurje to coordinate activities among the
ministries and vertically between the region and the government. The office will be also responsible for the
promotion of the region and the preparation of quality projects for sourcing funds.
Pomurje is unfortunately far from the Slovene average with reference to all indicators. Although it
had very positive trends in the development of entrepreneurship and also some significant foreign direct
investments, the region still has not overcome the structural problems of the past. Pomurje has 4 industrial
zones, among which the most important one is Murska Sobota, with 12 ha of land available out of 50 ha in
total. The Lendava business park is almost full, the Ljutomer business zone is developing and will have a
total of 39 ha of available land for investors. Gornja Radgona interestingly has sold the land to a private
investor in order to develop infrastructures and sell industrial land to other investors. A great potential is
also represented by the fact that almost every municipality has a few ha of land available for investors.
Therefore, it could be said that Pomurje has a sufficient amount of land available for investments.
In case of brownfields it is a different situation. There are just a few brownfield sites available,
while the biggest opportunity at the moment is in the production facilities of Mura, the bankrupted
clothing factory. However, it is difficult to find appropriate investors for this site, because the premises are
huge and it is difficult to break them up into smaller units.
As for military brownfields, there is actually only one: the military campus of Murska Sobota. The
municipality of Murska Sobota has developed renewal plans for this site, but the Ministry of defence is not
yet ready with the new site for the military camp and in this moment it cannot be said when and how the
Municipality can get the old campus into its ownership and develop its plans.
1.2 Main sectors
Considering the lack of available information, it is very difficult to draw a detailed analysis of the main
sectors of the region.
1.
Companies
The most important sectors by number of companies are:

-
Sales (wholesale and resale): 402 companies
Processing industry: 222 companies
Expert services (accounting, legal and business advisory, etc.): 194 companies.
The most important sectors for number of employees are the following:
-
Processing industry: 10.795 employees (including about 3.000 from Mura, which is max
1.000 in 2009)
-
Construction: 2.114 employees
Restaurants and catering: 1.173 employees.
The highest income from sales is generated in the following sectors:

-
Processing industry: 818 m Euro
Sales: 625,2 m Euro
Construction: 264,7 m Euro.
In terms of assets, the most important sectors are: processing industry, sales and construction.
The most important economic activity in the region is the processing industry, which generate 39,9
% of the total income from sales, whose assets represent 40,7 % of all companies and employ 55,4 % of
employees in the region.
2.
Entrepreneurs
Among entrepreneurs, the most important sectors by number of entrepreneurs are:

-
Sales (wholesale and resale): 534
Construction: 491
Restaurants and catering: 438
The most important sectors for number of employees are:

-
Construction: 1.199 employees
Processing industry: 857 employees
Restaurants and catering: 690 employees
The highest income from sales is generated in the following sectors:

-
Construction: 73,1 m Euro
Sales: 64,8 m Euro
Processing industry: 56,1 m Euro
In terms of assets the most important sectors are processing industry, logistics and sales and construction.
From the sectorial data we can see that the processing industry and construction could generate
innovativeness and also benefit from cooperation with centres of knowledge. Innovation is spurred by the
two main BSOs in the region: the Regional Development Agency Mura and the Pomurje technology park.
RDA Mura has a special focus on the use of new materials (polymers) and employs 3 young researchers.
The aim is to connect these centres of knowledge with the regional economy. In reality this is a difficult task
because companies in the region are not so R&D oriented. They are more followers on the market or even
subcontractors of other companies. The Pomurje technology park focuses on newly established companies
and enables them the access to laboratories and know-how of the Universities in Slovenia, mainly in
Maribor.
FDI are concentrated almost 100 % in the processing industry sector. Pomurje has the advantage of
being in the EU and thus gives investors security and flexibility. The average wage of under 1.000 EUR is still
offers to investors a cheap labour force. The biggest problem of the region is the education level of the
8.000 unemployed persons. The low educational level namely doesnt allow to attract high tech production
or production with very high added value. In this moment the aim is to attract FDI which require simple
production techniques but have the potential for further development into higher added value activities in
the future.
The hope is that the new law for Pomurje is going to change the situation also in the field of
innovation and R&D, as well as to attract investors with high potential.
This paragraph concentrates on the sectors/activities that the law for Pomurje defines as the
sectors with high potential:
1.
Geothermal water and renewable sources of energy: Natural resources are very important
but it is not the case to be very enthusiastic. Geothermal water namely is not very clearly regulated in the
moment and to have serious potentials on this field, regulatory changes are needed. The potential of
geothermal water is in heating of greenhouses, buildings and for production of electric energy. Other
renewable sources of energy have great potential as well, but the number of newly created jobs in this field
is low.
2.
Agrofood and rural development: This sector is a potential sector in terms of further
development of the traditional advantages of the Pomurje region. Food industry should be accompanied
with regional trade marks whereas rural development should be connected to new types of agricultural
production (herbs, fruits and vegetables which would be packaged on farms, etc.) in order to achieve higher
added value.
3.
Tourism: Tourism is already a propulsive sector in the region. 10 % of all overnight stays in
Slovenia is generated in Pomurje. The main reason for this is the geothermal water and big tourism resorts
based on this. The law instead of these resorts is concentrated on complementary activities up to the spa
resorts.
As for the processing industry sectors, the most interesting production is on the fields of
electronics, lighting and other activities, which can deliver higher added value for the region. These
activities can in the short term employ the available workforce in the region and develop more important
activities in the future.
In Slovenia all the measures and actions of SMEs and investment policies are centralised. On the
regional level the only available tool is the Guarantee scheme for Pomurje. All other subsidies and
incentives are given by the Ministry of the Economy of the Republic of Slovenia, the Entrepreneurship fund
and the Public agency for entrepreneurship and foreign investments. This means that the BSOs from the
region have to cooperate closely with the named institutions in order to get support for companies in the
region. Moreover, some companies go directly to these institutions, not using the support of BSOs in the
region.
The Ministry of the Economy of the Republic of Slovenia has prepared the Programme of measures
for promoting entrepreneurship and competitiveness 2007-2013 which is the basic document for the
support to SMEs. It defines following measures:
Regional guarantee schemes are active in the environment as individual projects within
entrepreneurial centres, which to a smaller extent cover smaller investments of SMEs in individual regions.
Certain regional guarantee schemes are also linked with the Slovene Enterprise Fund. At the local level,
municipalities provided favourable finance for companies primarily in the form of microloans and
subsidised interest. At the national level, the implementer of measures of financial support was the Slovene
Enterprise Fund (hereinafter: the Fund). Financial instruments offered by the Fund were direct loans,
indirect loans through banks, guarantees and subsidised interest. Between 1996 and 2005, the Fund
supported approximately 1510 investment projects of small and medium-sized enterprises and approved
roughly 126 m Euro of various favourable finance (indirect loans, direct loans, grants and bank loans
guarantees). Measures of the Fund in the area of investment projects in tangible and intangible assets of
SMEs, approved by the Fund only by using purpose-allocated assets and the bulk being in the form of riskfree instruments, enabled the creation of a large number of new jobs and improved their competitive
ability, because of quality investments in technological and other upgrades in all industries and, in the last
two years, in those not prohibited by the State Aid Control Act. The Fund used the existing capital in the
1996-2005 period to support on average of around 151 projects amounting to 12 m Euro thereby enabling
the creation or preservation of an average of 640 jobs annually in the SMEs segment.
An increase in favourable financial sources for supporting development investments of SMEs has
been noted in recent years. The reason lies in increased funds from the national budget for promoting
SMEs in Slovenia, notably the programmes utilising funds from the European structural funds intended for
direct incentives to investments of SMEs. The development investments are also supported by consulting
services as SMEs can use favourable entrepreneurial consulting supported by the voucher consulting
programme to prepare investment studies.
In Slovenia the Slovene Association of Venture Capital Funds is in function, which currently includes
five companies linking their activities also with the function of venture capital funds.
On the regional level, the RDA Mura is managing the Guarantee scheme for Pomurje. From 1997
the RDA Mura has granted almost 5,5 m Euro of guarantees for bank loans for investments and 1,2 m Euro
guarantees for micro credits (which can be used when a company employs an unemployed person).
FDI ATTRACTION
The RDA Mura is working operatively on FDI attraction from 2004 onwards. The role of RDA Mura is
firstly to persuade the investor (also investors from other parts of Slovenia) that Pomurje is the right choice
and when achieving this, RDA Mura is supporting the investor in the preparation of projects for obtaining
incentives from the national level. The aftercare services are implemented also after the investor has
started the investment.
FDI attraction for Slovenia as a country is done by the Public agency of the Republic of Slovenia for
entrepreneurship and foreign investments (JAPTI), which also manages the public tender for incentives for
foreign investors. The public tender offers incentives for 3 categories of investments:
Manufacturing
Internationally tradable services
R&D activities
Investors have to prepare a tender which is evaluated with the max numbers of 100 points. There
are categories of points (for example 75-79 points) which define the amount of money that is given for
every newly created employment. The offer of JAPTI (incentive) can however not exceed the max value of
state aid, which is 30% for large, 40% for medium and 50% for small companies. The incentive is given as
directly transferred money at the beginning of the project implementation and is secured with a bank
guarantee. After the investor proved that the investment was implemented and employment created as
stated in the project presented, the bank guarantee is released and the obligations of the investor fulfilled.
The investor has to keep the number of employees (as defined in the project) for at least 5 years after the
proposed number of jobs is achieved.
OTHER SUPPORT PROGRAMMES FOR SMEs

Incentives for SMEs are given by the Ministry of the Economy over the Entrepreneurial fund, which
is also part of the Ministry. The list of tenders for 2009 is in the appendix to this document.
The priorities of the National development programme of the Republic of Slovenia are:
1.
Competitive economy and faster growth will contribute to the fulfilment of the economic
goals set by the Lisbon Strategy. The priority is to promote entrepreneurship and investment in human
resources in companies, with the aim of increasing the competitive capacities and innovativeness of
companies. At the same time, it aims towards promoting investment both from foreign companies in
Slovenia and investment by Slovenian companies abroad. The priority is also aimed at establishing efficient
transport, information and communication infrastructure.
The aim of the first capital development priority is to promote entrepreneurship, increase
innovation, the scope of domestic and foreign investment in the economy and the transport, information
and communication infrastructure, including the development of human resources in companies and the
promotion of internationalisation of Slovenian companies to increase competitiveness.
2.
Effective creation, two-way flow and application of knowledge for economic
development and quality jobs, will contribute to greater link the economy with higher education and
research institutions and to promote the development of tertiary knowledge for greater economic
competitiveness, especially through an increased degree of innovation and thereby and increased
proportion of innovative products and services, through the creation of new, demanding jobs with higher
value added and increased employee productivity. Infrastructure for knowledge is also ranked in this
priority.
The aim of the second capital development priority is to increase support for tertiary education and
research and development activities for the needs of the economy and the labour market for the global
competitiveness of companies, products, services and persons.
3.
An efficient and less costly state, including an more efficient and successful public
administration, will improve the quality of state services, as the establishment of public-private
partnerships, reform of labour market institutions, the promotion of the development of nongovernmental organisations and civil dialogue, the development of local development initiatives within the
framework of regional development institutions. This priority also ensures the better functioning of the
judicial system.
The aim of the third capital development priority is to raise the quality and efficiency of state
services and to reduce public spending by excluding from budgets those services that can be provided in the
market.
4.
Modern social state and higher employment, including the development of the education
system, the improvement of the employability of individuals, the prevention of social exclusion and
strengthening active labour market policies, will increase the employment prospects of vulnerable social
groups (the elderly, women, young persons, disabled persons and others). This priority also relates to
overcoming the structural gaps in employment through vocational and geographic mobility, the
development of social entrepreneurship, the improvement of the populations state of health, reducing
housing problems and reducing the exclusion of vulnerable groups in society.
The aim of the fourth capital development priority is to achieve a society of full employment and to
prevent poverty and the consequent social exclusion through education, improvement of labour market
flexibility and by ensuring job security.
5.
Integrating measures to achieve sustainable development, aim at promoting harmonised
regional development, the development of the countryside and fisheries, the strengthening of food security
and the improvement of the quality of life in urban and rural areas. Programmes to promote renewable
energy sources and efficient energy use are also prioritised. The priority includes the improvement of
spatial and real estate management and ensures the conditions for improved operation of the real estate
market. It includes better environmental management and establishing an efficient environmental
infrastructure. Promoting the development of the national identity, culture and cultural heritage as well as
sports programmes and sports infrastructure is also prioritised. Priority areas also include programmes to
protect health that are integrated into sectorial policies, reducing regional differences in health and
promoting healthy behaviour patterns.
The aims of the fifth capital development priority are to ensure a high quality of life, based on the
development of culture and national identity, more harmonious development of the regions, security,
spatial management and sustainable mobility, as well as an improved quality of the environment and
adequate municipal service infrastructure.
In principle, EU funds can be obtained to finance all five capital development priorities of the NDP,
which all satisfy the eligibility criteria to access at least one of the EU funds. It is common practice in the EU
to determine joint substantive priorities (European value added). This is the basis for coordination between
a Member State and the European Commission. Programme documents are prepared so as to guarantee
synergy among the envisaged activities and a limited number of priority fields. Administrative costs arising
from fund management are also considered in choosing activities to cofinance with EU funds. This often
requires a critical mass (project size) and a concentration of activities down to a limited number of contents
and instruments, since this increases the absorption capacity. The availability of other financial sources,
such as the European Investment Bank, is also considered in the determination of priority activities.
As part of the implementation of the EU Cohesion Policy, in drawing up the National Strategic
Reference Framework 2007-2013 Slovenia and the European Commission agreed that the common
development goals would be reached by implementing the following operational programmes:
1.
operational programme to strengthen regional development potentials,
2.
operational programme for human resources development,
3.
operational programme for environmental and transport infrastructures,
4.
programmes of goal 3 - territorial co-operation:
cross-border programmes (cross-border cooperation with Austria, Italy, Hungary, cross-
border cooperation of the IPA with Croatia and the IPA in the Adriatic initiative),
transnational operational programmes (Alps region, South Eastern Europe, Central Europe
and the Mediterranean),
interregional operational programmes (interregional cooperation programme INTERREG
IVC, interregional programme Interact, interregional programme ESPON and the interregional programme
URBACT).
Regarding the implementation of the EU Common Agricultural Policy, Slovenia and the European
Commission first coordinated the National strategic plan for rural and fisheries development. On this basis,
a programme for rural development and a programme for fisheries development were adopted.
The distribution of EU funding among operational programmes is presented in Table 2. By scope of
funds, the most important programmes are the Operational programme to strengthen regional
development potentials (a third of all funds), the Operational programme to develop environmental and
transport infrastructures (31.9%) and the Rural Development Programme (17.6%). Individual development
priorities and priority orientations will be implemented within the operational programmes, and these will
be financed by five EU funds (European Regional Development Fund, European Social Fund, Cohesion Fund,
European Agricultural Fund for Rural Development and the European Fisheries Fund).
A third of all Cohesion Policy funds (1,412 m Euro) is allocated to Cohesion Fund programmes, and
the rest for programmes under the European Regional Development Fund (ERDF) and the European Social
Fund (ESF). Finances from the Cohesion Fund (CF) will be evenly distributed between the environment
(including energy) and transport. A total of 756 m Euro will be allocated for the ESF, whereby Slovenia is
ranked among comparable countries which invest relatively the largest share of available assets in human
resources development. A total of 60 m Euro from the ERDF will be invested in European territorial
cooperation. The available funds will finance a considerable number of programmes, since Slovenia is
taking part in five cross-border, four transnational and four interregional programmes.
Table 2
EU operational programmes by NDP priorities (EU funds only)
Total value
of the OP
within 2007-2013
OPERATIONAL
PROGRAMME
Operational
programme to
strengthen
regional
development
potentials
Operational
programme
for human
resource
development
Operational
programme to
develop
environmental
and transport
infrastructure
rd
3 Objective
operational
programmes,
Territorial
cooperation
Rural
development
programme
Fisheries
development
programme
Totals of all
operational
programmes
structures in
%
PRIORITIES OF THE NDP

1.
A competitive
economy
and faster
economic
growth
2.
Effective generation,
two-way flow and
application of
knowledge for
economic development
and quality jobs
3.
An efficient
and
less costly
state
4.
A modern
social state
and higher
employment
5.
Integration
of measures
to achieve
sustainable
development
million
euros
in %
1,710
33.6
755
327
28
15
585
756
14.9
38
382
91
244
1,636
32.2
1,075
30
531
60
1.2
60
900
17.7
900
22
0.4
22
5,083
100.0
1,867
709
149
260
2,098
36.7
13.9
2.9
5.1
41.3
100.0
The major portion of EU funds (41.3%) will be directed to fulfil the fifth priority of the NDP
(measures to achieve sustainable development). This is followed by the first NDP priority (competitiveness
of the economy) with 36.7% and the second NDP priority (knowledge for economic development and
quality jobs) with 13.9% (Table 11).
SMEs can find opportunities in almost every priority of the NDP. Funds are allocated thru public
tenders of different ministries.
In Slovenia brownfield investments are not separately categorised. The cost of procurement of
buildings is normally an eligible cost in tenders.
In Pomurje the following BSOs are presently operative:

-
Regional development agency Mura
Technology park Pomurje
Chamber of commerce of Pomurje
4 areal chambers of crafts
Regional employment office (regional unit of the Slovene Employment office)
4 local development agencies, each covering a certain area of the region
Regional Development Agency Mura (www.rra-mura.si) is the leading development institution in

the region of Pomurje (on both sides of the river Mura). RDA Mura plays a key role in the economic
restructuring of the region, in the promotion of a better co-operation between private and public sectors in
the multicultural area through the promotion, guidance and linking of a sustainable business and
technological development, and in contributing to the achievement of a higher standard of living, through
the integration of Pomurje region (Euregio). All this is possible only with the good co-operation with
municipalities, local development agencies, institutions, organisations and companies as the driving force
of economical development.
Its main activities are: promotion of regional development in the Pomurje region through
preparation and implementation of the Regional development program, offering financial incentives for
SMEs, activities in the field of technological development (innovation centre), also through its research unit
and variety of activities in the field of human resource development, especially through the Pomurje
Training centre Rakian, the Pomurje Labour Fund and the Foundation Knowledge for development for
talented students.
The offer of the Pomurje Technology Park (http://www.p-tech.si/eng/default.aspx) is presented in
the following chart:
The Chamber of commerce and chambers of crafts are classic chambers, which offer information
support and represent the interests of their members. They does not offer any incentives, does not prepare
any projects and therefore cannot be counted as actual BSOs, although at least with the information giving
they can provide actual benefits.
The regional employment office is the long arm of the national employment office and takes care
of the implementation of the so called Active employment policy. This policy gives (not just to SME) the
possibility to receive funding by employing unemployed persons or funded training for companies.
The 4 local development agencies are more oriented towards municipalities and usually play the
role of informing SME about where they can get support.
Table 3
Regional development agency Mura Ltd.
Address
Lendavska 5a, 9000 Murska Sobota
E-mail
info@rra-mura.si
Legal Status
Ltd. Non-profit
Years of activity
12
Fields of activity
Business consulting
N. of employees
17
Direct Beneficiaries of BSOs activities

Main activities addressed to SMEs
Main activities addressed to start ups
Sources of funding
Pomurje technology park Ltd.
Address
E-mail
Legal Status
Years of activity
Fields of activity
N. of employees
Direct Beneficiaries of BSOs activities
Main activities addressed to start ups
Sources of funding
Preparation and implementation of projects, coordination of the regional

development programme, guarantee scheme for Pomurje, one stop shop,
attraction of investments
Municipalities, companies, population in general
Guarantee scheme, consulting, support in the preparation of projects for
public tenders
Establishment of companies and to that related consulting (free of charge)
National, local and mainly own income from projects
Plese 9a, 9000 Murska Sobota

info@p-tech.si
Ltd. Non-profit
6
Business consulting
5
Preparation and implementation of projects, renting of premises and
equipment, business consulting
Start-ups and spin-offs
Preparation of projects for public tenders
Consulting and renting of premises under favourable conditions
Mainly own income from rent and projects
4. CONCLUSION
The first and biggest problem by preparing the Context analysis is the fact that Pomurje is a
statistical region, but most of the very specific questions in the analysis cannot be answered or supported
with accurate statistic data. On the other hand, Slovenia has no regions with decision powers and budget to
promote priorities for its development. The region is preparing a Regional development programme, but
mostly it comes down to support of regionally interesting (in line with RDP priorities) projects in the
application for national tenders. Another important fact is that namely Pomurje generates in average less
projects than other regions and consequently receives in average less money from national tenders than
other regions.
Pomurje has a very weak economy. The reason for this is in the traditional structure of its economy
where the two most important sectors (agriculture and textiles) are facing huge difficulties. Two of the
most important once parade horse companies Pomurka and Mura have bankrupted this year, leaving
around 2500 people unemployed. Regional development agency Mura and the Pomurje technology park
have been very active on the promotion of entrepreneurship in the past 6 years. There has been some
success but not enough to compensate negative economic developments in this period.
Development of entrepreneurship is always connected to some specific know-how of the
entrepreneur. The regional education level (out of 9.851 unemployed 75% have up to the IV. Educational
level) is very concerning and does not allow a booming entrepreneurial development. From another point
of view, it does not allow the development of high-tech activities on a larger scale.
The development of new types of business support services is crucial for the Pomurje region.
Economic development can be achieved by supporting 3 different areas of development:
-
Development of the existing companies: enabling them to develop applicative R&D
activities and access the know-how from centres of know-how. This can be achieved by developing
competence centres for most important economic sectors;
-
Development of entrepreneurship: offering risk capital funds, promoting entrepreneurship
and offering very active support in the development phase;

-
Attraction of investments in form of Greenfield and Brownfield investments, which will use
the pool of workforce available in the moment (not highly educated) but have the potential to upgrade
activities to ones with higher added value and technology.
The government of the Republic of Slovenia has adopted a law for Pomurje, which should
contribute to solving the present critical situation of the region. The law identifies the following competitive
advantages of the region:
-
Geothermal energy and renewable energies;
Agrofood and rural development;
Tourism.
All together the Law secures 272 m Euro for the following 5 years, from which 90 m is for the
development of water supply, the rest is in form of subsidies, tax incentives, development of projects and
training programmes of employees.
As a general summary, it could be said that Pomurje in this moment faces huge difficulties which
are the results of the past economic structure. However, due to the Law for Pomurje, the next 5 years
surely represent a great challenge to restructure the economy and set the basics for a successful
development in the future.
GREECE: Drama Kavala
Table 1:
STRUCTURE
GDP (mln Eur)
GDP ( y/y)
GDP per capita PPP (Eur)
Structure GDP (%):
Agriculture
Industry
Services
N active companies
Agriculture
Industry
Services
EMPLOYMENT
Total employment (.000)
Employm. per main sector:
Sector A (%)
Sector B (%)
Sector C (%)
Value added per employed
(Eur)
Average gross wage (Eur)
Unemployment (%)
Unemp. per educat. Level:
Primary
Secondary (vocat. or else)
FOREIGN TRADE
Import of goods (mln Eur)
2. good category
3. good category
2004
2005
2006
2007
2008
2.8
12000
3.1
+1.10
12400
3.2
+1
12800
3.3
+1
13200
3.2
-1
12800
10.5
36.5
53
10.5
36.4
53.1
10.7
36.7
52.6
10.7
38.2
51.1
10.5
39.1
50.4
16145
943285
1.71
16320
1235964
1.32
16120
1356892
1.18
15950
1368951
1.16
15968
1269311
1.25
8.9
45.2
54.1
8.9
46.3
44.8
8.9
43.2
47.9
8.3
41.8
49.9
8.3
41.9
49.8
98763
63.2
101325
68.4
110421
69.4
103654
65.2
106987
69.1
6617
30122
62023
6974
29563
64788
6320
31345
75456
5980
32578
65096
5873
35462
65652
950
1050
1150
1180
1250
16
94
14.3
93
15.8
98
13.2
101
14.8
4.5
12.3
18.9
4.3
13.5
17.6
4.8
10.9
18.4
4.9
11.2
18.6
4.2
12.1
17.8
1689
1720
1780
1810
1890
Export of goods (mln Eur)
1580
1678
1720
1790
1810

-109
-42
-60
-30
-80
1. partner (county+mln Eur) Germany
+10
+3
+23
+2
+31
+12
+28
+8
+15
+6
3. partner
Bulgaria
+2
+1
+1
+1
+1
FDI inflow (mln Eur)

Main FDI sectors
Sector B
Sector C
12
2
1
3
1
6
1
0
3
0
1
2
9
1
2
5

2. good category
3. good category
2.
partner UK
The FATE partners in the Region of East Macedonia and Thrace are the 2 out of the 5 prefectures of
the Region, those of Drama, where the Drama Chamber of Commerce and Industry is the partner, and that
of Kavala Prefecture where the Kavala Municipality is the partner. The 2 prefectures are situated at the
north-most part of Greece; They border Bulgaria on the North with the region of Gotze Celchev which is
also a FATE partner. On the south they border with the Aegean Sea. On the west in 1.1/2 hours drive is the
major urban conglomerate of Thessaloniki, while on the East the Turkish border is only 2 hours away. The
total population of 250 000 (2001 census) has a tendency to increase. The 2 major urban economic centers
are those of the city of Drama with a population of 55.000 and that of the city of Kavala with 75000 (2001
census).
The average per capita GDP of the combined area in 2008 was 12.800 with small variations of the
ears. With such a combined GDP per capita the region ranks 27th among the 52 prefectures in the country.
The unemployment rate is rather high and above the national average. In 2008 reached 14,8 %. The Drama
region has much higher unemployment than the Kavala region. Growth rates are positive but on average
lower than the rest of the country.
The primary sector is considerably developed, compared to the national average and is linked to
the secondary sector. The primary sector is represented by agriculture and forestry: cultivation of intensive
crops, such as vegetables, vineyards, tobacco, potatoes, cotton, fruits, as well as cereals. The application of
the Common Agricultural Policy (CAP) shall lead to new, more competitive and cost effective cultivations. In
general terms, efforts are made to change the traditional cultivation of cereals and turn to other crops,
organic ones included. The area has developed crops of olives, cereal, grapes, fruit and vegetables. Most of
these products are used as rrw material in the secondary sector where the food processing industry is a
major employment and income baring sector in the overall industrial production. Animal farming is
important in terms of employment and income in the mountainous area of Drama while on the other hand,
fisheries and fish farming is equally important in the costal are of Kavala.
Considerable efforts have been made for strengthening the secondary sector which has faced a
decline the last decade with the consequence of the opening of the border with neighboring Bulgaria
where many industries moved production for lower labor costs. Main industrial sub-sectors, clothing and
textile industry faces heavy drop, experienced during the industrial development of the region in the 90s,
resulted in the considerable decline of the sector and the implementation of unfavorable structural
changes. Another economic issue of great importance is the moving of enterprises. In the past few years,
many enterprises of the textile sector moved from Drama to Bulgaria in order to decrease the production
cost by taking advantage of the low wages of the Bulgarian workforce. The restructuring process supported
the creation of new industries which had very low GDP in the region but in the last 10 years are developing
as major industries with remarkable rates of growth and excellent exports of their products. There are the
industries that have developed in the food processing industry either with the use of agricultural farming
products, or fisheries and dairy products as well. One other industry that is flourishing with very good
results is that of the wine and beverage (ouzo) production with good exports and good brand names of
products.
In the secondary sector one must add the extracting and marble processing industry. The combined
area has bout 70% of marble production in Greece and constitutes about 30% of total Greek marble
exports. The industry is well developed, uses new technologies with innovative techniques of marble
quarrying and processing that are exported in other countries as well. The product is of significant quality
and is selling well in the international markets. The production of energy from alternative sources is a new
activity that is developing in the region.
The basis of the secondary sector depends on small or very small industries with most of the times
lag in the adoption of new technologies and the rationalization of their production capacity. Major
infrastructure to support SMEs does not exist in the combined region and calls for the creation of Business
Centers, Incubator Centers and technology parks did not materialize at all.
The service sector is very active. The enterprises operating in the tertiary sector are mainly located
in the cities of Drama and Kavala. The majority of these active enterprises are in the financial sector /
banking services, telecommunications, trade and logistics. The last few years other forms of service
activities are developing in the region that have to do with new technology and energy.
The service sector presents a dynamic potential for development. The cross border area has a
significant competitive advantage, namely, its outstanding combination of natural resources. The mountain
relief, the rivers and forests, the natural reserves suggest an attractive pole for tourism during all seasons.
The area has the potential to welcome visitors with diversified interests and offer them alternative
solutions for leisure and tourism. The tourism industry is constantly developing and perspectives for
additional progress are high. The combined are offers a variety of tourist attractions that range from
mountainous alternative tourist activities in Drama to summer resort sea activities in Kavala. It should be
noted, however, that the initiatives taken so far lacked strategic coordination. Indeed, some tourist
infrastructure exists, but without particular interconnection between services and professionals of the
tourism sector.
On the other hand, during the past ten years, thanks to the ROP and to Community Initiative
LEADER, a burst of agrotouristic infrastructure, like small cottages, traditional restaurants and business
with local products and gastronomy has been recorded. This trend is quite dynamic in both sides of the
eligible area and seems to be capable of transforming entire regions into poles of agrotouristic interest.
Additionally, the multiple unique resources can easily attract visitors and offer them a multitude of choices.
The trade sector is well developed in the region. The balance of trade is negative for the region
because although we good exports on wine, marble, farming products and food processed products we
have to import raw material for the other sectors of the industry and also to import technology, energy,
etc. The main export destination is Germany where farming products are welcomed in the local markets.
The UK is an important market where ready to wear, processed food, wine and fishing products are
exported. Neighboring Bulgaria is a good product destination market while the last few years trade with
Turkey is developing fast. The region imports come from Italy, Bulgaria, Turkey, Germany, etc.
The main problems that SMEs report to face in Drama and Kavala regions are an unsupportive
environment distance from power centers, poor urban & regional planning: unclear where activities can
be located at; several conflicts, high transportation costs and waste management problems (treatment &
disposal).
One of the major problems is the lack of space planning allocation, creating a number of important
problems:
1. the disorderly urbanization and un-clear definition and classification of sites where you can develop
various business activities.
2. the negative position towards the secondary sector and manufacturing, as traders cannot know
precisely who can install the enterprise without creating problems.
3. the landscapes loss of natural beauty and identity.
The absence of proper urban of sub-urban space to develop business activities has led some of the
economic sectors to look into available space in the abundance of abandoned military camps that exist in
the area and are unused.
Other problems associated with the development of entrepreneurship in the region are:
o
Temporary licenses issued to businesses operating in predetermined areas lead to the

expansion of the problem not to its solutions
Companies are suspended after the expiry of the licence or publics complaints
The absence of scientifically-documented pollution limits and the corresponding staffing

control mechanisms.
The lack of specialized staff to implement and monitor relevant studies.
The absence of an active advisory role the Ministry and the Region.
Agricultural activities result to threats to the natural environment, although at present there
are not very serious:
Inadequate management of forest resources, forest fires, overgrazing or undergrazing lead to

degradation of the natural environment.
The illegal logging that is found in areas outside forest management in some cases leads to
illegal construction
Quarries are a cause of disturbance of the landscape and are a major environmental problem.
The region has major shortcomings in waste collection and treatment infrastructure.
In the region exist the infrastructure to connect the energy sources of natural gas to the industrial
areas yet this is something that has note developed yet. .
Degraded is also the infrastructure of the rail network in Drama yet the harbour facilities in the
Kavala harbour are very efficient and are used well by the industries for the export-import of products.
Same effective is the air facilities in the local airport while the major international airport of Thessaloniki is
not that far away.
Following discussions with the local FATE partners the most important legal and institutional problems
reported in the interview and the meetings are the following:
o
When a company changes its legal form, it is required to report the change to all collaborating
banks and institutions.
The procedure for obtaining a loan for a business is a bit slow because all the assets of the company
must be checked.
When a company is listed in the list of unfavourable elements TEIRESIAS, automatically are added
to this list the names of the partners of the company and the procedure to withdraw from the list is
very long and difficult.
Besides the above problems, we could even export some of which appear across the legal,
regulatory framework and infrastructure. These are:
overregulation
bureaucracy
capacity
low productivity
unpredictable changes rules
high operating costs
delays
repeated postponements
corruption
Finally, it would be wise to present a number of other serious problems that constitute an obstacle
to the development of the enterprises. These problems are of more general nature concerning
entrepreneurial development in Greece. Some of these problems are:
Bureaucracy and inefficiency.
Important economy and enormous contribution evasion
High tax rates
Corruption and transparency and the unreliability
Unclear and uncertain regulatory framework
Difficulty starting, operation and closure
Lack of competition
Delay in broadband infrastructure for the Information Society and Knowledge
Education system in isolation the needs of business and labor market
Lack of innovation in products and services
Lack of entrepreneurial opportunities and high difficulty finding funds for new businesses
1.2 Main sectors

Agriculture and food producing industry
The sector of agricultural production is one of the most important in the area in terms of
production and employment rates. Over forty agricultural production companies are operating,
representing the 16,4 % of the total of this sectors activity in Greece, employing over 2600 employees.
The majority of them have started as and part of them is still operating in the form of small family business.
Nevertheless, this does not prevent them from introducing new technologies and the current integrated
systems of quality assurance (ISO, HACCP etc). Together with their effort to augment productivity rates
determine their clear orientation to penetrating new markets.
o Meat and meat products (Cooked meats, standardized, packaged meat cuts etc.)
o Fish products
o Fruit and vegetables (tomatoes, potatoes, spinach, leeks, zucchini, nuts and dried fruit etc.)
o Dairy products (milk, butter, cream, yogurt, ice cream, cheese produce)
o Flour mill products, starch and starch products
o Prepared animal feeds (bran etc.)
o Sugar-based products and processing - package standardization of nuts and dried fruit
o Vegetable oils and fats
o Other kinds of food (halvas, confectionery etc.)
The region has more than 140 food-processing businesses, representing 37.4% of all processing
activity in the region and employing some 600 individuals. Most of them are small, traditional concerns,
which have become involved over the last few years in a series of initiatives to improve quality through the
introduction of international quality assurance systems (ISO 9000, HACCP etc.) and the introduction of
new technology, while at the same time taking care to improve productivity and seek out new markets
both here and abroad.
Food processing sector

SME quota (%on total)
Output volume (y/y)
Employment (n)
Productivity (y/y)
(Eur)
Import (mln Eur)
1.
2.
3.
Export (mln Eur)
1.
2.
3.
FDI in the sector
(cumulate mln Eur)
2006
138
98
253
2007
138
98
654
2008
140
98
783
654
1653
682
1865
600
1878
5421
6584
5862
12
49
93
Italy; 6
France; 3
Turkey; 1
135
France; 9
Italy; 6
Egypt; 2
189
Italy; 8
France; 8
Cyprus; 2
213
Cyprus; 82
Germany; 47
Bulgaria; 3
+123
Germany; 73
France; 6
Cyprus; 3
+140
Italy; 198
France; 12
Turkey; 2
+120
Marble mining and processing
The Prefecture of Drama, together with the adjacent Prefecture of Kavala, is one of the most
important marble mining, cutting and processing centre in Greece and in Europe.
There is a variety of types of marble produced, cut and processed in Drama exploited by the biggest
companies of the marble industry.
The total annual marble production amounts to over thirty-five thousand cm3. Over the last few years,
productive investing in marble has considerably developed. It is estimated that in the years to come there
will be a large number of private investments in the prefecture.
Marble production can be classified into three sectors of activity:
Primary production referring to mining,
Secondary production referring to cutting and processing units and
Handicraft, artisan and industrial processing units for final products and trading companies of
intermediate and final products (slabs, tiles, stair treads, flooring, cladding and other forms).
Businesses related to marble

Sector of activity
No of Companies
Marble mines
135
Industry handicraft units
240
Wholesale trade
87
Marble sculpture
18
TOTAL
480
Marble sector
Output volume (y/y)
Employment (n)
Productivity (y/y)
(Eur)
Import (mln Eur)
1.
2.
3.
2006
523
92
1.3
2007
492
91
1.32
2008
480
91
1.56
965
1895
1013
1953
1266
2321
12865
11236
13564
12
11
Turkey; 5
Bulgaria; 3
FYROM; 2
Turkey; 6
Bulgaria; 1
Serbia; 1
Turkey; 6
Bulgaria; 2
Serbia; 1
Export (mln Eur)

1.
654
782
Golf countries ; Golf countries;

358
534
2.
Italy; 34
Italy; 32
3.
USA; 16
USA; 5
+642
+771
FDI
in
the
sector 0.9
1.2
(cumulate mln Eur)
698
Golf countries;
327
Italy; 17
Germany; 8
689
3.1
Textiles and clothing
There are 35 major clothing companies occupying approximately four hundred workers. In their
majority those companies are small, private companies or partnerships characterized by specialization in
the clothing business and personal commitment. Over the past few years, the local clothing industry shows
a strong preference for brand clothing of high quality. The companies develop their strategy prioritizing, as
far as manufacturing is concerned, on quality, specialized human resources and new technologies.
Regarding the distribution sector, expansion through penetration in new markets is one of the top
priorities.
Textile and Cothing sectors
Output volume (y/y)
Employment (n)
Productivity (y/y)
(Eur)
Import (mln Eur)
1.
2.
3.
2006
42
85
1.2
2007
42
83
1.3
2008
35
83
0.8
1350
1230
1210
1320
946
1400
6543
6892
7561
156
182
235
Italy; 48
Bulgaria; 17
France; 2
Italy; 57
Bulgaria; 23
France; 5
Italy; 81
Bulgaria; 15
France; 3
Export (mln Eur)

1.
2.
3.
FDI in the sector
(cumulate mln Eur)
162
123
189
France; 23
Germany; 12
Bulgaria; 3
France; 89
Germany; 8
Bulgaria; 1
France; 67
Germany; 12
Serbia; 1
Wines and spirits
Since the ancient times, wine has enjoyed enormous esteem throughout the Greek world, and this is
why the vine was cultivated almost everywhere the climate would permit, often alongside other crops, and
in some areas was the main source of income.
The long wine tradition, combined with the geography and climate of the region provides the ideal
conditions for the cultivation of the vine and the production of high-quality wines. The combination of
the altitude, the mild climate, the many days of sunshine each year and the high quality of the soil give a
distinctive character and personality.
Wines and Spirits sectors

Output volume (y/y)
Employment (n)
Productivity (y/y)
(Eur)
Import (mln Eur)
1.
2.
3.
Export (mln Eur)
1.
2006
28
56
95
2007
32
56
110
2008
35
58
210
638
1050
645
1100
583
1150
5896
5632
5428
21
35
62
UK; 12
France; 4
Italy; 2
28
UK; 16
France; 5
Italy; 2
37
UK; 25
France; 4
Italy; 2
102
Germany;
(mln Eur)
12 Germany; 13
Germany; 15
2.
3.
FDI
in
the
sector
(cumulate mln Eur)
UK; value 2
USA; 1
+7
.8
UK; 2
France; 1
+2
1.2
UK; 1
Russia; 1
+40
1.3
Wood manufacturing and trading

Wood manufacturing in the region holds a share of 20% of the national production of the sector.
The wood industries are in their grand majority small but flexible companies exploiting mainly pine and
beech wood and producing wooden pine posts and wooden railway sleepers, sawn timber particularly for
use in construction and furniture. Strategically orientated to exporting to countries of the EU, lately the
wood industries of Drama are penetrating the vast market of the South-East Balkan countries, thus
reinforcing their competitiveness in the sector.
Wood manufacturing and trading sectors

Output volume (y/y)
Employment (n)
Productivity (y/y)
(Eur)
Import (mln Eur)
1.
2.
3.
Export (mln Eur)
1.
2006
7
95
125
2007
10
98
128
2008
10
97
129
950
1350
934
1380
983
1390
3560
100
3650
100
3890
20
15
11
Bulgaria; 5
BiH; 4
Ukrain; 3
105
Bulgaria; 5
Ukraine; 3
Serbia; 2
113
Ukraine; 5
Bulgaria; 4
Ukraine; 4
118
Russia; 26
Russia; 19
Turkey; 16
Libya; 13
+98
.6
Turkey; 18
Libya; 15
107
.4
Turkey
15(mln
Eur)
2.
Russia; 13 value
3.
Spain; 9
+85
FDI
in
the
sector .5
(cumulate mln Eur)
The emerging potentials for the region is to take advantage of mild and sustainable activities of
development.
The regions entrepreneurs wish to develop activities in the new opportunities in the fields of energy,
energy production through alternative sources,
One other sector that has a dynamic future in the area is the development of logistics services since the
region is at the crossroads of many different markets and regions. Equally important is the biological
farming of quality products in farm and animal production
Finally, many think that tourism should continue to develop with strategic priorities and well developed
plans.
The participants in the meetings and in the seminars that were organized due to the events of the FATE
project catalogues the following emerging potentials for the development of the region:
Logistics Development Geo-economic position in relation to the Balkan and Black Sea countries
The geographical position of the region it in a cross-road of increasing importance. The accession of
Bulgaria in the EU, combined with the opening of a border crossing to Bulgaria, places Drama in a privileged
position as a gate of Greece to visitors and traders from Bulgaria. Likewise, the Black Sea co-operation does
not leave Drama unaffected as it is placed in the broader Black Sea basin area.
Strong agricultural profile in the biological production
The region has a strong agricultural profile, which is a factor of economic stability with many potential to
develop in strong pace with bio-products of quality
Important investments in energy and communications
The region, thanks to a couple of major investments, has become a node in Greeces energy system;
especially given the fact that the power plant is one of renewable energies, unaffected by fluctuations in
international fuel prices. This area of activity has further potentials of development.
Diversification of the economy in rural regions / development of ecologic production
The people of the region, based on the long tradition of respect and love for natural beauty, have oriented
part of their economy towards the valorisation of nature. This has been expressed with steps towards the
cultivation of organic products.
Development of networks of cooperation

The local actors of Drama have been very active in networking for co-operation at various levels and have
gained in terms of knowledge, ideas and business ties with other regions and countries.
The strong potentials of tourist development
The area is an area rich in natural resources: marble, farmland, woods Offers a rich and diverse landscape,
appropriate fro the development of year-long tourism. The ecosystems of the region offer a rich
biodiversity, which makes them places attractive for ecological tourism. Finally, The ski centre in Falakron is
a major tourist attraction, capable of attracting significant number of tourists. Additionally, the summer
vacation is a strong potential of development in the region of Kavala.
Today in an era characterized by globalization and growing competition, the Greek Very Small,
Small and Medium Enterprise (SME and VSE) is called to give his own struggle to modernize to survive and
be divided into an internationally competitive environment.
But the fact that Small and Medium Enterprises in all countries of the world is an integral part of the
structure of national economies and societies, are critical to economic development, production,
employment and also on decentralization and social cohesion.
It also act as incubators of new enterprises and innovative types of applications, flexible business
formation, local service needs, spatial distribution of jobs and income. For instance, the Small and Very
Small Enterprises (0-49) employing 79% of the workforce of our country.
Overview of measures to support SMEs

The biggest problems for SME development in our country is:
o bureaucratic procedures.
o lack of information by the competent institutions to SMEs
o inadequate institutional framework both European and National.
o lack of fixed-and-simple tax system.
o absence of creditors to ensure the media (resulting in financial difficulty for facilities)
o lack of business education.
o inactivation of companies and individuals in bankruptcy cases
The modernization of the Greek SMEs is a prerequisite for survival. The Greek national policy on small
business takes into account individual circumstances and develops a framework for concerted actions
specified in the following lines of support:
Creation of a conducive administrative environment for SMEs

Facilitation to finance for SMEs by creating Guarantee Agency
SME support for technological and organizational modernization
Promotion of networking of SMEs (clustering)
Promotion of entrepreneurship
Support for SMEs to enter the New Economy
General support measures for SMEs
The financial opportunities that are provided directly to SMEs via the following actions and
programmes have been announced and publicized. Some of these are ongoing and others are expected to
be launched in the near future:
ROP/NSRF
Financing of SMEs
Modern Business
Certification of enterprises to meet the requirements of European quality standards.
Support
Meet immediate, small but strategic needs.
Be Original
Fostering innovation as a key parameter for improving the competitiveness and diversification and
regeneration of traditional industries.
Relocate
Relocation from Athens and Thessaloniki in the region and generally opening up new business in
the Greek region, residents of large cities
Get Accredited
Strengthening institutions & laboratories for testing for initial accreditation or extension of
accreditation
Youth and Women Entrepreneurship
Establishment of new businesses
Green Business
Integration of environment in the operation of (mainly) manufacturing enterprises
Green Infrastructure
Strengthening firms active in environmental protection
Relocate 2009
Relocation to industrial/business parks & technopoles

Evolve
Modernization of medium-sized manufacturing enterprises to enhance integrated business plans
DIGI - LODGE
Digital assistance of Hotel and Tourist Accommodation for creating web sites and promotional
electronic booking
Rural Development
Strengthening marketing and processing agricultural products through development and adoption
of innovations and technological equipment, to improve the quality, hygiene, product safety
Strengthening of Digital Tourist Enterprises
Improving the visibility of tourism businesses on the Internet and to improve services, using digital
and computer technologies and communications.
Support by the General Secretariat for Research and Technology
Of particular importance are the following actions administered by the General Secretariat for
Research and Technology:
SPIN-OFF & SPIN OUT
Strengthening the creation and evolution of business technology innovation, innovative investment
projects, the use of knowledge by researchers in Greece and abroad, to produce new products,
processes and procedures for high value-added and knowledge intensive
Research and Technological Development
The support needs of SMEs and new businesses and stimulating the implementation of research
and technological development by the companies themselves, or by other qualified organizations
for and support of business
Cooperation
Improving competitiveness and extroversion of businesses, increase employment and quality of life
through the implementation of research and technological development in specific areas and
activities.
Due to their importance, in the following subsections we make a more detailed presentation of these
support actions.
Support of SMEs groups for research and technological development activities
The main objective of the Programme is to support the needs of SMEs and of new companies, as
well as to stimulate the implementation of research and technological development projects by the
companies themselves, or by other qualified organizations that act on behalf of the companies to their
benefit.
Small and Medium Enterprises (SMEs) with common problems, needs and goals have the right to submit a
proposal. The proposal is submitted by three or more SMEs with the participation of at least one R&TD
body, with the optional participation of associations or SMEs unions.
Projects eligible for funding may cover the following research themes:
Information and Communication Technologies
Agriculture, Fisheries, Production of Livestock, Food and Biotechnology
High value added products and technologies focusing on traditional sectors (textiles, clothing,
construction, furniture, chemicals, leather)
Advanced materials, Nanotechnology Nanosciences - and Microelectronics
Energy
Transport
Environment
Health
Space and Security Technologies
Cultural Heritage
Social and economic dimensions of development
The average budget of a project is estimated at 300.000 . The maximum budget per project is 500.000
and the maximum contribution at 75% of total costs. The total public cost of the programme is 23.730.000
.
Closing date for the first evaluation is 26/10/09. There will be a second evaluation with a deadline on
31/5/10.
Creation / Support of new innovative companies, mainly knowledge-intensive (Spin-off, spin-out)
The Action "Creation / Support of new innovative companies, mainly knowledge-intensive (Spin-off,
spin-out)" is launched.
The programme addresses to innovative small companies created maximum six years before the beginning
of the grant. These companies may have the following forms:
Small companies, existing and start-ups - offs (Spin-off / Spin-out)
Small innovative companies, existing and start-ups
In order to participate, companies should meet the following criteria:
Company Form: SA or LTD
The majority of its owners must be private investors (including researchers) or Private Legal
Entities. (e.g. venture capitals)
Distribution of at least 15% of their operating expenses in R & D for at least one of the last three
years before the investment grant.
Submission of integrated investment plans that lead to the production and utilization of innovative
products, processes or procedures.
Existing companies exploiting research results must meet the characteristics of the beneficiary, as
stated in the Guide.
Non-receipt of payment from other public (EU or national) sources for the same purpose.
Compliance with Advertising Regulations.
Establishment and activity in the region where they belong, and residence for at least 5 years after
the project completion.
The expected average budget of a project is estimated to be around 1.100.000 . The maximum
benefit for each company will not exceed 1.000.000 . The maximum rate of aid on the budget will not
exceed 70%. Own contribution can not be less than 25% of the total eligible costs, while the remainder can
be covered by borrowing from banks or other recognized European financial institutions. For start-up
companies own contribution means paid-up capital in cash and, while for the existing companies, the
amount of the increase in share capital resulting from new cash contributions from shareholders. The
maximum project duration is 36 months.
Expenses that belong to the following categories are eligible:
Costs of creation or expansion of existing infrastructure

General Operating Expenses
Research and Development (compulsory) costs
Other Costs
The deadline for the first round of proposals is on 30/9/09. The call for proposals will be permanently open
until its closure date on 30/6/2010. Every 3 months from the date of the action, groups will be formed so as
to evaluate proposals. The recipients of funding will be nominated with the completion of the procedure.
The total programme budget is 25.000.000 .
Funding of collaborative research activities - Action "COLLABORATION"
The main objective of the Programme is to improve the competitiveness and extroversion of
companies, the increase of employment and quality of life through the implementation of R & D projects in
specific sectors and activities.
The particular call of the action covers the following acts:
Act I: Collaborative Projects of small and medium scale (total project budget from 300,000 to
1.000.000 , duration 24-36 months, minimum number of participants 3, including at least 1
company.
Act II: Collaborative Projects large-scale (total project budget from 1,000,000 to 3.000.000 ,
duration 36-60 months, minimum number of participants 5, including at least 2 companies)
The action addresses at the collaboration of companies of all sizes, research centers, institutes and
universities, technological and other entities. Note however, that the main beneficiaries are
companies and research institutions (Universities, Colleges, Research Centres and Institutes).
Projects to be funded may belong to the following priority areas:
Health
Biotechnology
Energy - Environment - Climate
Nanotechnology
Transport
Social & Human Sciences - Culture
Information and Communication Technologies
Textiles - Processing
The funding rates depend on the research category and the size of the beneficiary. The maximum payment
is estimated up to 80% of the project budget. The total public cost of the action is 76.1 million .
The deadline for proposals is on 16/10/09.
LEARNING
ction programme in the field of Lifelong Learning Decision no. 1720/2006/EC

The general objective of the Lifelong Learning Programme is to contribute through lifelong learning to the
development of the Community as an advanced knowledge-based society, with sustainable economic
development, more and better jobs and greater social cohesion, while ensuring good protection of the
environment for future generations
ction programme in the field of Lifelong Learning Jean Monnet programme - Decision no.
1720/2006/EC
The Jean Monnet programme shall support institutions and activities in the field of European integration. It
shall comprise the following three key activities:
* the Jean Monnet Action;
* operating grants to support specified institutions dealing with issues relating to European integration;
* operating grants to support other European institutions and associations in the fields of education and
training.
e-Services
The programme provides financial support to private companies for improving the provision of services to
their customers by the use of ICT and the internet.
INNOVATION & GROWTH
Investment Incentives Law 3299/2004
Investment plans for the production of electricity from mild energy forms and investment plans for the cogeneration of electricity and heat.
Provision of investment incentives in the form of cash grant, leasing subsidy, tax exemption, and cash grant
for the expenses of wages relating to the employment created by the investment
Cohesion Fund (2007-2013)

The Cohesion fund is one of the financial instruments for the Cohesion Policy of the European Union for the
period 2007-2013, which is structured into three objectives:
* Convergence,
* Regional competitiveness and employment and
* European territorial cooperation
EIF EC resources: Capacity Building Scheme (2007-2013)

The Capacity Building Scheme will support the capacity of financial intermediaries to focus on additional
investment and technology aspects and action will also be undertaken to facilitate SME financing in
countries where banking intermediation is significantly lower than the EU average.
Joint European Resources for Micro to Medium Enterprises (JEREMIE, 2007-2013)

The Joint European Resources for Micro to Medium Enterprises (JEREMIE) its a joint initiative between the
Commission (ERDF) and the EIB Group (EIB and EIF) that will enable European Member States and Regions
to use part of their structural funds to obtain a set of financial instruments that are specifically designed to
support micro and small and medium enterprises in European regions for the next programming period
(2007-2013).
Eurostars
The Eurostars Programme is a European innovation programme. Its purpose is to provide funding for
market-oriented research and development with the active participation of specifically R&D-performing
small and medium enterprises (SMEs)
Seventh Framework Programme for Research and Technological Development - (FP7)

Improving the health of European citizens and increasing the competitiveness and boosting the innovative
capacity of European industries and businesses, while addressing global issues. Emphasis will be put on
translational research (translation of basic discoveries in applications including scientific validation of

experimental results), the development and validation of new methods
EIF EC resources for guarantees: SME Guarantee Facility

The SME Guarantee Facility will continue to provide counter or co-guarantees to guarantee schemes
operating in eligible countries and direct guarantees to financial intermediaries. The SMEG Facility shall be
operated by the EIF on behalf of the Commission
Innovation
EIF - EC resources for venture capital (2007-2013): High Growth and Innovative SME Facility
The High Growth and Innovative SME Facility it is a financial instrument created to implement actions
under the Entrepreneurship and Innovation programme, which its included in turn in the Competitiveness
and Innovation Programme, covering the period from 1 January 2007 until 31 December 2013
Services in support of business and innovation (CIP)- DECISION No 1639/2006/EC

The Competitiveness and Innovation Framework Programme (CIP) is established to contribute to the
competitiveness and innovative capacity of the Community with particular attention to the needs of Small
and Medium-sized Enterprises (SMEs). It brings together several existing EU activities that support business
and innovation.
Risk Sharing Finance Facility (RSFF)- European Commission and European Investment Bank (EIB)
RSFF is an innovative scheme to improve access to debt financing for private companies or public
institutions promoting activities in the field of:
* Research, Technological Development Demonstration, and
* Innovation investments.
Competitiveness and Innovation Programme (2007-2013): Entrepreneurship and innovation subprogramme
Entrepreneurship and Innovation programme aims to help enterprises innovate by providing access to
finance: sharing risks and reward with private equity investors and providing counter or co-guarantees to
national guarantee schemes.
Competitiveness and Innovation Programme (2007-2013): ICT Policy Support sub-programme

The ICT Policy Support Programme shall provide for the following actions:
* development of the Single European information space and strengthening of the internal market for
information products and services;
* stimulation of innovation through a wider adoption of and investment in ICTs;
* development of an inclusive information society and more efficient and effective services in areas of
public interest, and improvement of the quality of life
Competitiveness and Innovation Programme (2007-2013): The Intelligent Energy-Europe subprogramme

The Intelligent Energy-Europe Programme will encourage the wider uptake of new and renewable energies
and improve energy efficiency, and shall foster compliance with our energy regulatory framework.
In the last years a large number of military brown-fields have been dismantled because of changes
in the security/defence policies. Part of these sites is in easily accessible city-centre locations and usually
has good infrastructures in its surrounding area.
Rehabilitation of these former military areas in the proximity of densely populated areas is an
important issue in the agenda of local authorities of regions involved and private investors: by recovering
military brown-fields, green-fields are preserved, sustainable urban, economic and social development is
supported and public owners can profit from the reuse. In addition, regions and Municipalities involved
present as priority the improvement of entrepreneurial environment competitiveness by means of
supporting structures as Business Incubators (BI) or Business Support Centres (BSCs) and the development
of adequate measures to encourage economic and SMEs growth.
Restructuring military brown-fields shows difficult processes of property transfer, high number of
claims, interests and uncertainties, physical ties resulting in a complex planning/implementation process.
Regions involved (and of SEE area) have several military brownfields whose stages of recovery are various:
some sites belong to the state governments while others to municipalities. Local authorities need to
rehabilitate the sites and convert them into BSCs/BIs to develop innovative productive activities. Thus,
different problems have to be faced: from negotiating the property transfer from central to local level to
the implementation of entrepreneurial supporting measures and the most adequate BSC/BI. Regional
programming to manage rehabilitations, spatial planning, operational plans for future investments,
measures to support BSCs/BIs is needed by administrations involved.
In accordance to its main objective, the project aims at developing, implementing and
disseminating concrete strategies and operational plans to strengthen and diversify urban and regional
economies, by converting military brown-fields into productive estates.
In particular, by starting from the results of previous experiences, the project intends:
a) to promote sustainable urban restructuring and renewal by providing regional and local administrations
with
1. tools to manage the entire rehabilitation process from the negotiation with the central
government to the involvement of private investors and
2. specific programming on recovery and development plans for forthcoming investments;
b) to foster entrepreneurial environment and support territorial economy and competitiveness by running
the conversion process of former military assets into the most suitable type of BSC/BI and by ameliorating
regional strategies/measures to sustain SMEs base and start ups
c) to apply tools come out of the project to 8 specific cases of rehabilitation of military brown-fields in the
regions involved, as preliminary/first step for more important investments.
All project actions envisage consensus building/awareness raising activities by means of the active
involvement of target groups/stakeholders through interviews, surveys, their participation in working/focus
groups, working tables and project events. Project dissemination and management are cross activities and
are carried out along the entire duration of the project, to assure the proper effectiveness/efficiency.
Main project results can be summarised as follows:

Adoption of recommendations on military brownfields restructuring by regional administrations as
programming tool for the spatial planning; tool will remain valid after the project end;
Adoption of a common strategy to promote entrepreneurship and attract FDI as guideline for
development policies in the medium-long term and resulting in improved regional policies on
entrepreneurship;
Urban/territorial planning for and starting up of the creation of BI/BSCs with high technological and
management standards, as first step of further larger investments;
Recommendations to manage military brownfields property transfer process from central to local
level
Durable partnerships, translational network of BI/BSCs and translational cooperation among

productive clusters
Search, commitment and involvement of possible investors and stakeholders, search of

programmes/opportunities funding infrastructural investments during the project will assure the financial
sustainability for the recon structuring processes. Each administration involved as partner or observer is
committed in giving sustainability to the results by leading the rehabilitation and making effective the
measures/strategies came out from project. Engagement by all institutional partners in transferring results
at political level and involvement of policy makers in the project will assure the political sustainability of the
project results. SC's and Working groups members will stay in touch after the project end to monitor the
further development of the action and to continue with the cooperation.
Results like recommendations, strategies, measures and the integrated and methodological
approach can be easily transferred to and adopted by the other several SEE regions and administrations
having the same problem, allowing a major territorial development and competitiveness.
DRAMA PREFECTURE : Department of Local Development

Address
Diikitirio, 1st Iouliou - P.C. 66100 Drama
E-mail
typou@drama.gr
Legal Status
GPV
Years of activity
5
Fields of activity
The Prefecture is in charge of issuing all the permits for construction, change
of use of land, etc. Valuable contribution to the project
N. of employees
5
Economic support
Support to entrepreneurship
Tourist development
Direct Beneficiaries of BSOs SMEs
activities
Entrepreneurs
investors
Issue permits
Main activities addressed to start Allocate land
ups
Issue permits
Sources of funding
Gov (Drama Prefecture)
Regional Development Agency of Drama
Address
2 Konstantinoupoleos Street
661 00 Drama
E-mail
aned@otenet.gr
Legal Status
Gov non-profit development agency
Years of activity
18
Fields of activity
Regional development
Rural development
Tourist development
N. of employees
23
The Regional Development Agencies are organization of support to regional
development efforts. The Drama Development Company, SA was founded in
1996, in the framework of the Community Initiative LEADER II, and evolved into
an innovative, pioneering and reliable instrument approach to local
development, with an ever widening range of activities
Direct Beneficiaries of BSOs New investors in rural development
activities
Investors in agrobusiness
Investors in agro-tourism
Main activities addressed to SMEs Support SMEs and investors to take advantage of LEADER type of projects or
other programmes funded through national and EU budgets to support rural
development
Main activities addressed to start Provide direct support for the creation of business plans
ups
Support for designs and construction
Support for marketing activities
Sources of funding
Funded from prefecture, municipalities and the chamber of Drama
Regional Development Agency of Kavala

Address
10 Ydras Street, 65110 Kavala
E-mail
info@ankavala.gr
Legal Status
Gov non-profit development agency
Years of activity
18
Fields of activity
Regional development
Rural development
Tourist development
N. of employees
23
Similarly, the Kavala Development Company, created in 1992, manages the
LEADER programme and other programmes of support mainly to agro-tourims
and tourism industries
Direct Beneficiaries of BSOs Rural development seeking investors
activities
Main activities addressed to SMEs Support to locate, manage and implement programmes addressed to rural
development, agro-tourism an agro-business
Main activities addressed to start Initiate new investment projects in the rural development area
ups
Sources of funding
Funded from prefecture, municipalities and the chamber of Drama
DRAMA CHAMBER OF COMMERCE AND INDUSTRY
Address
40 Lambrianids Street, 661 00 Drama
E-mail
info@dramanet.gr
Legal Status
Public status
Years of activity
59
Fields of activity
General support to SMEs
Support for economic growth and development in the area
N. of employees
15
Economics
Growth policies
Support to entrepreneurship
Manage and implementation of EU funded programmes
activities
Individual entrepreneurs
Organizations of economic development
The protection and development of trade,
SMEs
industry, crafts and professions in the region, within the framework of the
interests of national economy
The provision of advisory recommendations on
matters relating to the financial attractiveness of the area of Drama, and the
growth of the Prefecture and its businesses
The information to Members on economic issues
and the development of entrepreneurship
Main activities addressed to Support new investment by providing advice on legal issues
start ups
Sources of funding
Member Enterprise dues
KAVALA CHAMBER OF COMMERCE AND INDUSTRY

Address
50 Omonias Street 65302 Kavala
E-mail
info@chamberofkavala.gr
Legal Status
Public status organization
Years of activity
80
Fields of activity
Support to SMEs
Regional growth programmes
N. of employees
15
Economics
Investment
Entrepreneurial support
activities
General support for all legalistic issues
Promotion
Faire participation
Business trips
Main activities addressed to start Guide the investor with legal advice
ups
Direct the investor in the funding sources
Sources of funding
Member enterprises
KETA of Eastern Macedonia and Thrace

Centres for Business and Technology Development (KETA)
Address
E-mail
Legal Status
40 Lambrianidis Street, 661 00 Drama

keta@dramanet.gr
Ministry of Development in the implementation of Action 1.4.1 of the
Operational Programme "Competitiveness
12
Support to SMEs
Support competitiveness
Introductions of new technologies
3
Thrace acts at regional level with central coordination and the use of existing
structures and mechanisms (e.g. Chambers, collective business bodies,
representing entrepreneurship special groups, development agencies,
research centres, universities and technical institutions, etc.), in order to
provide reliable information services and advisory guidance to businesses
(e.g. information on potential financial support to provide basic information
and orientation to specialized topics: legal, financial, promotional, finding
qualified consultants or suppliers, etc.).
Years of activity
Fields of activity
N. of employees
Direct Beneficiaries
activities
of
BSOs
SMEs
Entrepreneurs
New investors
The activities of KETA cover the following areas:
Update - Information - Cultivation of
entrepreneurship.
Information for young people, unemployed, etc. for entrepreneurship

ups
Sources of funding
initiatives; KETA has the necessary connections with the market and the
capacity to provide necessary information to stakeholders.
Monitoring the competitiveness of SMEs.
This is done following the model of well-organized businesses; records
business performance and compares against certain standards.
Personalized support / core business
consultants
The businessman after careful diagnosis of the needs is directed to the best
investment / business decision.
Organization providing business services
Organization, grouping of business consultants for expert help to
entrepreneurs.
Mediation and use of financial instruments
Information for modern financial instruments.
Actions to support the globalization & exportorientation
Broadening the scope of business support abroad through the participation in
international competitions, joint ventures expansion of productive activities.
Direct investors to funding sources
Assist with logistics in the area of investment
Organized under the operational programme "Competitiveness" its operation
is financed by European Union funds and the Greek State budget.
SME Support Agency DESM-OS E.M.-Th.

Address
40 Lambrianids Street, 661 00 Drama
E-mail
desmos@dramanet.gr
Legal Status
a civil non-profit company and was named Interim Management Agency for
Community Programmes
Years of activity
14
Fields of activity
Two of the most important pillars of activity DESM-OS E.M.-Th. are enhancing
business competitiveness and reducing regional inequality while lifting the
isolation of the islands.
N. of employees
14
The purpose of establishing the company is undertaking the management as
intermediary, of community programmes and initiatives for the development
and modernization of SMEs in the Region of Eastern Macedonia and Thrace
activities
Main activities addressed to The purpose of establishing the company is undertaking the management as
SMEs
intermediary, of community programmes and initiatives for the development
and modernization of SMEs in the Region of Eastern Macedonia and Thrace.
Main activities addressed to start Provide legal guidance
ups
Secure funding sources
Direct investors to the proper investment activities
Sources of funding
Funded by the partners:
the Extended Prefectural Authority of Rodopi - Evros, the National Development
Agency of Northern Greece SA (Member of ETEBA Group), Commercial and
Industrial Chamber of Rodopi, Professional and Small-Industry Chamber of
Rodopi, Chamber of Evros, Chamber of Xanthi, Chamber of Drama, Chamber of
Kavala, Prefectural Authority of Drama, Prefectural Authority of Evros,
Prefectural Authority of Kavala, Prefectural Authority of Xanthi, Prefectural
Authority of Rodopi of the Property Management Company of the Democritus
University of Thrace.
Investors Reception Centre
Address
E-mail
Legal Status
Years of activity
Fields of activity
N. of employees

activities
Main activities addressed

SMEs
to

ups
Sources of funding
Prefecture of Drama
st
1 of July Street No1, 66100 DRama
info@drama.gr
Public
The development and operation of K.Y.E. based on the existing institutional
framework (Law 2516/1997) and (Law 3325/2005) exploiting the opportunities
offered.
15
Support to SMEs to initiate new investment
Attract and support FDI n the region
12
Economics,
Development
Growth initiatives
New investment
Attract FDIs
Simplification, promotion and consolidation of the
existing legal framework.
Information for investors on the financing
programmes offered in each case.
Information and support to use the necessary and
required documents and issues of land use.
Cooperation with competent agencies and
services involved in the licensing process to reduce the delays and simplify the
procedures, to standardize and reduce the necessary documents.
Information on licensing to the establishment or
modernization of an enterprise and supporting documents.
Possible inclusion in an investment programme.
Clarification of points of legislation or programme
guides - valid investor guidance.
Direction to investors involved with the subject
agencies or departments - an advisory and guiding role.
Information about open invitations to interested
parties and sending information material to investors and operators.
Continuous contact with the public services
(Development Department, Urban Planning, Health, Environment etc.).
Working with Chambers and other bodiees
Statistical data processing and licensing updates.
Monthly and semi-annual progress reports of the project.
Support to investors with solving beaurocratic problems
Permits
Land availability
Ministry of Economy
Prefecture of Drama
Prefecture of Kavala
Business Park of Kavala

Address
E-mail
Legal Status
Years of activity
Fields of activity
N. of employees
activities
SMEs

ups
Sources of funding
50 Omonias, Street, 65403

director@chamberofkavala.gr
Public non-profit
5
Operate the business park of Kavala
5
Provide land to new investors
Manage the park
SMEs
New enterprises
Initially an area allocated by Central Government at the fridge of the city of
Kavala to host pottential re-allocation of the Kavalas companies. This area was
designed in order to provide space to the local companies and become an
industrial park
Provide land
Investment support
Direct investors to proper legislation
Direct investor to funding sources
- Prefecture of Kavala
- Municipality of Kavala
- Chamber of Kavala
4. CONCLUSION
The FATE project provided a good opportunity in the regions of Kavala and Drama to open and put
forward the discussion concerning the stage of economic development, the nature and needs of
entrepreneurship, the use of new investment and the exploitation of the available land in the brown fields
that can be used for entrepreneurial purposes. This dialogue was carried out for the first time ever the
FATE project was the catalyst for such an achievement. We put together in the table a variety of involved
agencies, politicians, organizations, SMEs, entrepreneurs, investors and the general public.
After the long discussion it was conclude that the final decisions on the use of the old brown fields will have
to be evaluated based on their:
Importance for the local society and economy, and
The feasibility or applicability of the solution proposed.
In times of economic upheaval and demand for increased fiscal restraint, it is natural to ask for shorter
periods for the Return on Investment. Engaging into long-term investment without any partial short-term
gains may not be attractive to local or national politicians or even the public opinion. If implemented, early
difficulties may discredit the effort and may lead to the eventual abandonment of the project.
Main project results can be summarised as follows:
Adoption of recommendations on military brownfields restructuring by regional administrations as
programming tool for the spatial planning; tool will remain valid after the project end;
Adoption of a common strategy to promote entrepreneurship and attract FDI as guideline for
development policies in the medium-long term and resulting in improved regional policies on
entrepreneurship;
Urban/territorial planning for and starting up of the creation of BI/BSCs with high technological and
management standards, as first step of further larger investments;
Recommendations to manage military brownfields property transfer process from central to local
level
Durable partnerships, transnational network of BI/BSCs and transnational cooperation among
productive clusters
Strategic directions for reaching a final decision
Location
Location
Choice
Choice
Near
Near Drama
Drama to
to achieve
achieve
attractiveness
attractiveness for
for businesses
businesses and
and
faster
spill-over
impact
faster spill-over impact
Near
Near aa less
less developed
developed or
or
underprivileged
neighborhood
underprivileged neighborhood of
of
Drama
Drama to
to boost
boost local
local economy
economy and
and
upgrade
upgrade the
the area
area
Decision
Decision variables
variables
Activities
Activities
Direct
Direct business
business opportunities:
opportunities:
recreation,
recreation, tourism,
tourism, entertainment
entertainment for
for
fast
ROI
fast ROI
Grouped
Grouped commercial
commercial activities
activities of
of prime
prime
business
sectors
of
Drama
so
as
to
business sectors of Drama so as to
achieve
achieve economies
economies of
of scale
scale
Support
Support to
to innovation
innovation and
and
entrepreneurship
for
promising
entrepreneurship for promising
business
business sectors
sectors
From the context analysis we can therefore articulate a compact set of criteria for the exploitation
of former military camps with respect to two main decision variables: location and activities housed
As per the choice of location:
They should be located near the city of Kavala and near the city of Drama so as to achieve a faster
economic impact and affect positively a large part of the population. This is done in order to satisfy
the feasibility criteria. Although in the long-term, the exploitation of space far from the urban
centres would have a positive effect for rural development, such a venture at the current
circumstances cannot be attractive to either private or public funds.
It should be preferably located near an underprivileged, neglected or degraded neighbourhood of
the urban web, so as to have a social impact through the upgrading of the local economy.
As per the choice of activities housed it is recommended to house a blend of activities as follows:
In order to achieve fast return on investment we recommend some direct business opportunities in
the fields of recreation, tourism, entertainment etc. Such activities may include restaurants, clubs
or even reception halls that will take advantage of both local demand as well as increased visits
from Bulgaria.
Next, it should host grouped commercial activities of prime business sectors of Drama so as to
achieve economies of scale; such activities can include permanent exhibitions of local products, of
local artisans that promote and sell artefacts from wood or marble, other construction material
companies etc.
Finally facilities in support to innovation and entrepreneurship for promising business sectors,
primarily new technologies related to
Information and Communication Technologies (ICTs),
organic agriculture,
environmental protection,
renewable energy sources, and
energy efficiency
The facilities will provide several services to housed companies that will range from meeting rooms
and small conference halls to consultancy and special telecommunication services.
HUNGARY: West - Transdanubian Region
The region made up of Gyr-Moson-Sopron, Vas and Zala counties (NUTS III) constitutes 12.2 % of
Hungarys area (its territory occupies 11 329 sq. km). Around 10 % of the countrys population live in the
West Pannon Region (nearly 1 million people).
A unique position in Europe: 1 region in the meeting point of 5 countries.
The settlement network of the region has special features which are to be taken into consideration
when fulfilling public duties adequately on an acceptable level, and with regard to the regional policy as a
whole. Namely, the settlement network of the region is characterised by an exceptionally high proportion
of small and tiny villages in addition to the poly-centric urban network conditions. The settlement network
is formed by 626 municipalities and 29 towns.
The exceptional high proportion of the small and tiny villages within the municipalities is a
particular feature of the area. More than half of the municipalities in the West Pannon Region are small
villages with a population of less than 500 people, and within this rate, 122 settlements are considered
tiny villages with a population of less than 200 people, where the proportion of the elderly people is
exceptionally high (on average 30% ).
Pannon urban network: the poly-centric network of 29 towns is an organic part of the European
urban network. The settlements around the five towns with county rights are in different states of the
agglomeration. The population concentration of the three county seats is typical. Eight towns with a
population between 10-30 000 have regional central functions determinant in the poly-centric urban
network of the region, and 16 towns (with a population les than 10 000 people) have important microregional functions.
The viability of small villages is the key issue of the region. Half of our settlements has a population
of less than 500 people, which require innovative and nature-friendly regional development means, and
renewal from us.
The economy of the region faces a significant challenge. In addition to the activities of multinational
companies mostly based on semi-skilled labour, it is imperative to stimulate the innovation-oriented
activities of the SME-s, and new productive activities requiring qualified manpower should be attracted to
the region. All these should be done while currently the R+D potential is the lowest in the region, and its
distribution is unequal.
The basis and the core of the economy of the region is formed by the processing industry, including
the automobile- and electronics industry dominated by multinational companies. Agriculture is less and less
important, while services are gaining significance, which actually corresponds to both international and
national tendencies. General economic and financial services dominate the service sector. The significance
of tourism-related industries has not increased although they should play a fundamental role in the
development of several disadvantaged small areas in the region.
There are certain challenges and shortcomings which can also be presented on horizontal, national,
or even Central-European level, such as the lack of national medium-size enterprises, the low level of the
integration of the multinational companies, or the problems of transport infrastructure.
Regions innovative paradox is to be resolved the critical factor of maintaining the dynamism of
economic is that research, development, and innovation in the region amounts to just 50 % of the national
average. The pioneers of the network and regional economy are the Pannon Automotive Cluster and the
Pannon Wood and Furniture Cluster.
General indicators and figures
In economic terms, Western Transdanubia is one of the most developed parts of the country thanks
to its complex economic structure. Industry, the service sector and agriculture are developing at more or
less the same rate. The standard of living is also above the national average and the same applies to the
proportion of inward investments made up by industrial investments and the export orientation of
industry. Furthermore, this region has the highest proportion of businesses founded with foreign capital
behind Central Hungary. Geographical and cultural proximity with Austria has also benefited business
relationships in many areas.
Western Transdanubia
Area*, km2
Population*
thousands
998
14.1
15-64 years
69.7
65 years and over
16.2
EUR millions
9,521
Of which: 0-14 years
General indicators and figures
11,209
GDP**
Of which: Agriculture
4.8
Industry and construction
44.4
Services
50.8
EUR thousands
9.5
GDP per capita**

*2008, **2006
The region has a unique natural environmental resources as far as spa potential is concerned, since
it disposes of considerable assets both in quality and quantity, and is also boasts of the Lake Hvz, the only
lake in Europe suitable for bathing throughout the year. In addition to the spa tourist facilities, there are
further possibilities to be explored in the region concerning the development of cultural and heritage
tourism. The tourist exploitation of the natural and land resources focused explicitly on the variety the ecotourism elements, of which provide a sound basis to develop this area.
Health tourism boosts the internal economy! Half of the spa tourist nights in Hungary are
generated by the thermal network in the West Pannon area, which is the basis of the largest wellness region
in Europe, and the driving force of the revival of the regional services.
The special features of the terrain and settlement structure of the region cause serious problems in
sewage treatment and waste management. There is no complex waste management, and waste is
frequently dumped illegally. At the same time, significant development has taken place in the region, well
above the national average. There is a high ratio of organised waste collection, and there many of waste
dumps provided with technical protection which are in compliance with the EU and the Hungarian
requirements. There has also been a remarkable improvement in the purification of waste water, but the
authorisation and implementation of the nature-friendly sewage treatment, which providing an ideal
solution for regions with small settlements and structured terrain with, is still hindered by problems of
regulation and technical approach.
Hungary still lags behind the EU countries in the field of using renewable energy resources. This is
particularly true of systems of local significance. At the same time, the settlement structure in the West
Pannon Region makes it necessary to make comfortable energy supply available for heating systems in
small villages.
The transport infrastructure in the West Pannon Region is basically determined by its location
among four countries. The significant transit traffic of the borders has a considerable impact on the
conditions of both the roads and the environment. The public road infrastructure of the region is extremely
unfavourable. Although one sixth of the national road network is located in the region, and the road
density is the highest here among the regions (because of the settlement structure of the small villages), its
composition is unfavourable: only 6.5% of the roads are motorways or main roads. Accessibility also poses
a serious problem in the peripheral areas with numerous small villages which mostly lie at the border, and
which are only accessible by one road and from one direction. The increasing congestion in the large towns
of the region, the worsening environmental load caused by vehicle transport, and the inadequate public
transport in the small settlements explain the necessity of improving and supporting the local and intersettlement public transport and the standards of the services.
60 % of the commercial freight traffic of Hungary take place across the borders of the West Pannon Region.
Education also faces special challenges in the region. Primary schools in small settlements cannot or
can hardly keep up with larger institutions in a better situation in employing qualified teachers, in
educational facilities, and in the accessibility to up-to-date educational infrastructure. The West Pannon
Region does not play a leading role in the higher education and training system of Hungary, it is devoid of a
real university centre, or a university network based on the facilities of the region including all the relevant
elements of a universitas.
In terms of economic performance, the industrial centres that were the most capable of attracting
foreign working capital have acted as the drivers for development: Gyr, Szombathely, Sopron, Srvr,
Mosonmagyarvr, as well as Szentgotthrd and its vicinity. Dynamic economic restructuring has not taken
place evenly across the region and there has been a further increase in existing regional differences
(between more developed Gyr- Moson-Sopron and less developed Zala).
In order to decrease the vulnerability stemming from the high mobility of foreign capital - i.e., if the
region wants to prevent multinational companies from relocating away from West Transdanubia - and in
order to sustain the regions competitiveness, it is essential that the existing economic development model
be transformed. The current model relies on the attraction of foreign capital involved in low - complexity
production using lowcost labour. The new innovation - driven economic development model should be
based on competitively priced, skilled labour that is involved in the development and production of
complex products, on continuous innovation, and on further attracting as well as internally developing R&D
and innovation-oriented companies.
Table 1:
STRUCTURE
GDP (mln Eur)
GDP ( y/y)
Structure GDP (%):
Agriculture
2004
2005
2006
2007
104,9
103,5
104,0
9 196
101,0
9 211
5,8
5,3
4,7
5,1
2008
Industry
Services
N active companies
Agriculture
Industry
Services
EMPLOYMENT
Sector A (%)
Sector B (%)
Sector C (%)
(Eur)
Unemployment (%)
Primary
FOREIGN TRADE
42,2
52,0
106,1
42,4
52,3
98,0
44,4
50,9
106,9
43,5
51,3
106,6
8,4
9,2
51,0
11,0
53,6
11,4
53,5
99,9
99,4
100,0
99,9
99,4
100,0
99,9
99,4
100,0
99,9
99,4
100,0
99,8
158 452
11,2
43,5
425
Industry
Trade
Education
33,8
13,2
7,2
722
4,6
5,9
5,7
5,0
4,9
7,6
11,5
1,4
7,4
17,3
2,1
7,5
17,4
1,2
6,1
14,1
2,6
7,4
12,9
1,7
6 768,1
6 875,7
8 016,5
9 386,5
9 220,1
8 737,0
9 075,8
10 566,1
11 842,8
11 761,6

1 968,9
2 200,1
2 549,6
2 456,3
2 541,5
1. partner (county+mln Eur)
Germany
Austria
Spain
Germany
Austria
Czech Republic
Germany
Austria
Slovakia
Germany
Austria
Czech
Republic
Germany
Austria
Czech Republic

2. good category
3. good category

2. good category
3. good category
2. partner
3. partner

Main FDI sectors
Sector B
Sector C
1.2 Main sectors
Western Transdanubia is the most industrialised area of the country in terms of the proportion of
the population employed in industry. The region is also a very attractive tourist destination, mainly because
of its spa and medicinal waters, its protected natural treasures, its wine and gastronomy, its listed buildings
and its folk traditions.
Some industries that were considered formerly conventional - as food, light or textile industry have been depreciated and continue to loose their role, while machine industry - also with a hundred
years tradition - checked after the collapsing eastern markets, then it was gradually renewed - firstly with
the appearance of multinational investors (Audi, Opel, Flextronics, General Electric, etc.).
Within the machine industry, unambiguously dominant branches are: car industry, as well as manufacture
of electrical machines, instruments and communication engineering. Dynamically growing sector is
industrial gas production branch of the chemical industry, which is built on natural resources. (Natural
occurrence of carbon dioxide with the biggest extension in Central Europe can be found at Rpcelak.)
Corresponding with the most important sectors of the region, cluster initiatives have been launched
continuously since 2000.
These initiatives are aimed at promoting cooperation and interaction between companies and
providing special services as well as infrastructure for the key sectors that play a dominant role in the
economy of the region
automotive industry,
electronics,
mechatronics,
wood and furniture industry,
environmental technologies,
alternative resources,
health tourism,
medical tourism,
logistics
Industry, construction
Industry, construction
Industrial production, volume index*
% 103.0
Industrial sales*
% 99.5
Of which:
Domestic sales, volume index
% 76.8
Export sales, volume index
% 106.3
Construction output, volume index**
% 90.3
*2008 Q1-3, **2008 Q1
Several multinational automotive and electronic companies have established operations here, and
this has provided an opportunity for local SMEs to become suppliers to the industry. In some sectors, this
encourages the formation of product clusters, and the resulting synergies also have a beneficial effect on
the development of the region.
Most of the largest companies are active in the key sectors. The automotive industry includes: Audi,
Nemak, Rba, BOS , BPW, General Motors, Sapu, Autoliv, LuK.
Automotive industry
Main features of the region:

-
4-5 million cars produced in CEE
Appr. 900.000 cars within 120 km of Gyr
3.5 million engines produced within 300 km of Gyr
App. 2.5 million engines within 160 km of Gyr
In the electronics industry, the region has Provertha, Lite-On, Robust Plastic, Kromberg-Schubert,
Delphi (Packard), Epcos, Jabil, and Villszv.
Besides automotives and electronics, there are other machine industry firms: Cellcomp,
Ipartechnika, Khne, Mofm, Wahl, and DKG.
Wood and Furniture industry
The wood and furniture industry is also very important with Velux, Lapcom, Ada, Kanizsa Trend,
Swedwood, Interfa, Falco, Savaria Nett-Pack, Mbtor, and Zala Btorgyr.
Traditionally, the textile industry has been strong in West Transdanubia. However, in the last
decade its importance has declined owing to processes of globalisation, and most of the large companies
have now closed.
The food industry is also a traditional industry of the region with Ceres, Gyri Keksz, Pannon
Baromfi, , Sga Foods, Heineken, Pannontej.
In addition to these sectors, the largest companies are in the construction and construction
materials industry, in electricity, gas, water, other public utilities, transportation and logistics. The majority
of these companies have their own R&D units and -activities in the region, especially in the automotive and
wood and furniture industries.

Output volume (y/y)
Employment (n)
Productivity (y/y)
(Eur)
Import (mln Eur)
1.
2.
3.
Export (mln Eur)
1.
2.
3.
mln Eur)
2006
2007
2008
4 980,2
5 501,0
5 289,4
Germany
Austria
Romania
6 762,3
Germany
Austria
Czech Republic
7 009,2
Germany
Austria
Czech Republic
6 784,7
Germany
Czech Republic
Spain
1 782,1
Germany
Czech Republic
Slovakia
1 508,2
Germany
Czech Republic
China
1 495,3
Existing industrial/entrepreneurial zones for brownfield/greenfield investment
Innovation and Technology Centre project Zalaegerszeg
This is a new initiation by the city government.

Former barracks in city centers, near economical campus.
Owner: Zalaegerszeg city
Size: 17 ha
Infrastructure: full
Project ideas:
-
Campus development EU & City resources
Services EU, City resources and venture capital
Lands for houses venture capital
Innovation and Technology Centre project in Nagykanizsa
This is a new initiation by the city government.

Former Gbor ron and Kossuth Lajos barracks
Owner: Nagykanizsa city
Size: 55 ha
Infrastructure: full
Utilization:
-
part of an industrial park (logistic center)
continuous reconstruction
offices, assembly shops, depots
Keszthely 50 ha
Srmellk- Fly Balaton Airport 200 ha
Lenti 36 ha
Regions and administrative units in Hungary
Hungary has a population of around 10 million and territory of 93 thousands km2. Since 1999 the
country is divided in 7 statistical regions (NUTS 2 level of the NUTS system of the European Union). Each of
the seven regions has a centre, a Regional Development Council and a Regional Development Agency. Each
region, with the exception of Central Hungary (the region including Budapest, that has only one) is
composed by 3 counties (19 all together at NUTS 3 level). Each county has a County Development Council
and a County Development Agency. Below the County level, micro regions (174 all together at NUTS 4 level,
composed by groups of settlements bordering each other), and local authorities (about 3,175
municipalities) constitute the smaller administrative and governance units in Hungary.
While counties and municipalities form the traditional intermediate and lower administrative and
governmental territorial unit in Hungary, regions and micro regions, although from EU accession are
increasingly gaining competences, are mainly considered as functional units.
Regional planning system
The 1996 Act XXI on Regional Development and Physical Planning was the first act which defined
the framework and institutions for Hungarian regional development. The Act states that regional
development should be based on the national and territorial (regional planning), concepts, programmes
and physical plans. It is significant that it was designed according to the principles of European Regional and
Spatial Planning Charter and the EU regional policy. The Act, which established a new institutional system
of territorial development in Hungary, was followed by a series of decrees on the use and distribution of
the regional development allocation for territorial equalisation among counties.
The drafting of the National Regional Development Concept (NRDC) within the framework of
Parliamentary Resolution 35/1998 (III.20), furthered the process by defining targets and guidelines with a
special view to ensuring compatibility with EU structural funds policy during accession. Notwithstanding,
the wide-ranging nature of the concept and the multiplicity of tasks have left many issues unaddressed,
particularly the role assigned to regional competitiveness policy and how to surmount efficiency/equity
conflicts. NRDC was the first development policy document that defined the long term regional
development objectives, setting out principles necessary to design territorial plans and guidelines for
sectoral and regional planning and for the actors of regional development.
The Concept included long-term objectives concerning major demographic, settlement and
environment changes and the development of major infrastructure networks, as well as medium-term
objectives that specify the regional allocation of the development programmes of individual ministries. The
financing of regional development specified in the Concept was based on the following key principles:
decentralisation of resource distribution;
focusing of resources on the most important issues;
the mobilisation of outside resources;
the balance of the normativity and discretionality and the promotion of complex
development in larger regions.
The 1996 Act XXI on Regional Development and Physical Planning disposed of revising the Concept
every six years, which became timely in 2004. Prior to revising the NRDC, Hungary faced an extremely
important task. For the first time in its history it had to prepare a development document for the period of
2004-2006 in order to take part in the EU's cohesion policy and to become a beneficiary of the EU's
Structural and Cohesion Funds. Based on the EU's regulation, Hungary prepared its National Development
Plan and its operational programmes. The National Development Plan intended to achieve specific goals
through four development priorities:
1. improving the competitiveness of productive sector,

2. increasing employment and the development of human resources,
3. providing better infrastructure and cleaner environment,
4. strengthening regional and local potential.
Along with sectoral Operational Programmes it was created a single national Regional Operational
Programme that concentrated its financial assistance in the regions (NUTS 2) which faced the most
difficulties (North Great Plain, North Hungary, South Great Plain and South Transdanubia). The aim was to
contribute to the development of the regions most lagging behind by supporting favourably projects from
the so called beneficiary areas. The National Development Concept was adopted by the Parliament in
December 2005 together with the renewed National Regional Development Concept.
The new NRDC defines the overall development objectives for every sectoral policy until 2020, the
development objectives of the National Development Plan 2007-2013 and the guidelines for the National
Agricultural and Rural Development Plan. As the 1996 Act XXI on Regional Development and Physical
Planning disposed of revising the NRDC every six years, in 2004 the Report on the Territorial Processes and
the Results of the Territorial Development Policy was prepared and accepted by the Parliament. At the
end, as a result of the revision, the new Concept was adopted together with the above mentioned National
Development Concept by the Hungarian Parliament in December 2005.
The new NRDC builds on the last years experiences and defines the regional development as a
horizontal policy, which gives advice to all the sectoral policies, and aims to co-ordinate them from a
territorial/regional development point of view. The NRDC defines the territorial aspects of all kind of
developments in Hungary. For the sectors and regions this is a guidance document, which also defines the
long-, mid- and short term objectives of the country. The new regional development policy is integrated at
the different levels and actors and is integrated into other policies.
The New Hungary Development Plan (NHDP) contains the country strategy for the period 20072013 and the financial resources including the EU's Structural and Cohesion Funds needed for the
implementation. The NHDP is in line with the National Development Concept and the NRDC, as well as the
EU's regulations on cohesion policy. It facilitates the efficient use of the EU funds and makes the
implementation of independent regional programmes possible. In the planning process of the NHDP,
planning and programming were coordinated at the regional and national levels.
West-Transdanubian Operational Programme
Priority
2007-2013
Budget (EUR)
2009-2010 Action Plan (EUR)
83,9 M (15,4 %)
53,8 M
128,9 M (23,6 %)
57,7 M
3. Urban development
108,9 M (19,0 %)
69,23 M
4. Environmental protection and

transport infrastructure
109,5 M (20 %)
42,3 M
5. Infrastructure development
for local and regional public
services
99,8 M (18,3 %)
42,3 M
Total:
530 M
265,33 M
1.
Regional
development
economic
2. Tourism development
renewal of Pannon Heritage
Regional Strategies for innovation and development
Regional Innovation Strategy (RIS) - 2001:

-
improvement of the innovation environment,
development of the basis and infrastructure of knowledge
promotion of diffusion of knowledge (knowledge transfer)
financial system of innovation
Technology Foresight Program of WT - 2004:

-
machinery (automotives, electronics),
tourism (spa, health, wellness),
environment industry (renewable energy, wood and furniture)
knowledge transfer
Autopolis: Program for Regional Growth Pole - 2006:

-
innovation-knowledge industry
economic development-new technologies and services
Almost 99% of the enterprises of the West Transdanubia Region are small or micro-businesses
employing 50 people or fewer. Overall, they employ considerably more than half of the employed
workforce. However, they account for much less than 50% of the GD P, and their portion of exports is even
smaller (60% of all exports of the region originate from the industrial parks). It is obvious, therefore, that
developing this sector may yield considerable economic growth.
Enterprises
Number of registered enterprises*
118,535
Of which:
Enterprises
in manufacturing
7,483
in construction
9,711
in trade
18,174
providing real estate/business services
39,927
others (%)
43,240
Number of enterprises per 1,000 inhabitants*
147
Number of foreign-owned enterprises**
2,511
Number of 100% foreign-owned companies**
1,736
*2007
The economic development of the last 15 years was mainly based on factors such as low wages (but
relatively skilled workforce), well developed infrastructure, tax allowances and incentives, and geographical
location, closeness to the Austrian border and the Western markets. One could characterise it as a form of
extensive development that is based on labour intensive inputs with a low technological base, although
there are some foreign multinational companies with the highest technology and some very competitive
Hungarian SMEs with state-of-the-art technologies and products (ROP 2007). Nevertheless, there is a need
to transform this extensive development process into an intensive one which is based on knowledge,
innovation, and R&D activities.
The most important problems are follows:
- A low level of R&D spending, only about 0.3% of GDP;

- A low level of cooperation between the business sphere and the academic sphere;
- A lack of academic and university research institutions (no traditional university);
- Highly centralised systems, no regional autonomy in innovation or R&D policy.
To cope with these problems, West Transdanubia has elaborated its own Regional Innovation
Strategy (RIS) in 2001 (one among the first in Hungary) so as to accord to the regional development
programme (RIS 2001). The mission of the RIS is the development of West Transdanubias innovation
system. The main objectives here are:
- Creating the missing institutions in the regional innovation systems, reaffirming the existing
institutions and organising them into a suitable network;
- Improving the innovation performance of enterprises with the help of specialised programmes
and adequate application systems;
- Providing prominent support for those knowledge-based
- activities which produce high value.
Altogether, the RIS had eleven measures, and these were grouped into four priorities. However, all
the regional actors knew that due to the highly centralised innovation and R&D policy system of Hungary,
the region would not have the financial resources for its implementation. Any new initiative or project
complying with RIS priorities in West Transdanubia had to be connected to the national policy schemes and
programmes to receive financial support.
The technology and knowledge-based development programme thus began. The first steps of this
new development were the establishment of the regional cluster initiatives in five sectors and of some
regional innovation centres in the most advanced industrialised centres such as Gyr, Sopron, Szombathely,
or Zalaegerszeg.
In 2004, a technological foresight programme was prepared for West Transdanubiaagain the first
in Hungarywith the aims of establishing the continuous renewal of the industrial and economic structure
of the region, creating the basis for greater value added in the economy and increasing the regions
competitiveness (TEP 2004). Four determining key branches were identified in the region:
- Mechanical engineering (esp. automotive, electronics and mechatronics),

- Tourism (esp. health tourism and rural tourism),
- Environmental industries (environment use, environmentally friendly resources and technologies,
and renewable energies),
- Knowledge industry (from vocational training to higher education and research activities).
For these four key branches, special sectoral background materials were prepared which provide
insight into the most important intervention points and the direction required at both regional and national
level.
In the domain of cluster policy, West Transdanubia has also been a pioneer in Hungary. From 2000
to 2007, eight so-called cluster organisations (in most cases rather networks) were established in the region
to support specific sectors. Two regional university knowledge centres and two cooperation research
centres operating in the two university centres of the region, were established with national funding (Grosz
2006, Grosz 2007, Pannon Business Network 2006).
However, regions have just finalised their Regional Operative Programmes (ROP) for the period of
2007-2013, which is part of the second National Development Plan (its new name: New Hungary Plan).
They are co-financed by EU and national sources. However, these ROPs do not contain any measure in the
fields of innovation or R&D policy. These strategic fields will be dealt with in the next period in the
Economic Development Operative Programme, which cover the whole country (ROP 2007, EDOP 2007).
KTIA (Research and Technology Innovation Fund)
The objective of KTI Fund is promoting the establishment of an innovation-driven, knowledge

economy and society. The programmes are inspiring the birth of products, technologies or services from
knowledge and innovative ideas which can be sold on world market.
This is expressed by the From Idea to Market action plan with the following major objectives:
- Improving knowledge bases, building knowledge bases complying with international standards;
- Supporting R&D programs linked to National Strategic objectives;
- Increasing the utilization efficiency of R&D results, intensifying the foundation of innovative
enterprises, Introduction of technological and business incubation;
- Development of regional innovation;
- Intensifying international R&D cooperation, fostering Hungarian participation in EU R&D
programs.
On the regional level, there are only two basic sources of funding for RTDI projects:
- contributions from the central government
- budget and 25% of the Research and Technological Innovation
Fund to be spent on promoting RTD I activities at regional level.
The two main support for SMEs in innovation field:
INNOREG
Aim of the subsidy:

-
Improve the innovation environment, spread knowledge and technology
Product and service innovation
Foster co-operation within the region and interregional co-operation,
network of innovation centres and research centres
Improve innovation infrastructure; support purchasing of R&D tools
Total budget:
-
2 mln EUR -4 mln EUR /year/region
Decision-making in the Regions
INNOCHECK
Aim of the subsidy:
supporting innovational initiatives of micro and small enterprises and encouraging the
innovation service supply and demand.

Subsidy: max. 0,1 / project. Self-contribution isnt necessary.
Total budget for 3 years and to the 7 Regions: 19 million EUR
Decision-making in the Regions.
Since 2005, 25% of the new Research and Technology Innovation Fund is allocated to the regional
level, and regions may decide on spending priorities. However, the supporting contract is signed by the
National Office for Research and Technology. This is the sole notable financial source for innovation at
regional level (ca. 4 million per year). The priorities of this Regional Innovation Development Programme
package are established together with the Regional Innovation Agencies according to the RIS priorities and
are formulated and approved jointly with the Regional Innovation Council.
The Governments mid-term (2007-2013) science, technology and innovation policy (STI) strategy
The formation of a knowledge-based society and economy demands a high level of knowledge,
which appears in new, marketable products and services. Science and innovation are essential factors in
competitiveness and sustainable growth. At the same time, knowledge has become an important factor in
quality of life.
Innovative Hungarian economy
The Hungarian economy and society must step into new fields of development based on knowledge
and innovation in order that Hungary can with knowledge intensive and innovative activities, giving to its
products the greatest added value, become connected with the world economy. Sustainable development
of the Hungarian economy can only be realized in an environment that stimulates innovation.
Strategic goals
The general goal of the strategy is that in the mid-term Hungary shall become a country where
knowledge and innovation are the driving engines of the economy and companies appear on the global
market with competitive products and services.
The mid-term goals:

Expansion of companies research and development activities
Establishment of internationally recognized research & development-, innovation centres and
research universities
Enhancing of the regions research & development & innovation (R&D&I) capacity
Establishing a knowledge market which works on the principles of performance recognition and
competition through the globalization of knowledge production and dissemination,
Investment in large scientific facilities, primarily in the regional centres and the development poles,
reducing regional differences (regional cohesion).
The dynamic increase in yearly R&D expenditure, above all as a result of growth in corporate
expenditure
Strategic principles
Principles of realizing the strategic goals:

Focusing of intellectual and financial resources, optimization of utilization.
Increased economic and societal implementation of R&D results.
Strengthening of regional innovation.
Strategic priorities
The strategy designates tasks in the following priority areas:

A culture of acceptance and utilization of scientific research results.
Quality-, performance-, and utilization-driven efficient national innovation system.
Well-honoured creative and innovative workforce suitable for the demands of knowledge-based
economy and society.
Economic and legal environment with incentives for creation and utilization of knowledge.
Domestic companies, products and services that are competitive on the global market.
Connection with other strategic documents
The current strategy was prepared in harmony with the objectives of the National Developmentpolicy Concept (NDC), National Action Program (NAP) and the New Hungary Development Plan (NHDP). The
situation-analysis can be found in the Appendix. The details of implementation (operative goals, tasks and
schedules) are described in the STI action plan.
Hungary's Operational Programmes for the period 2007-2013
Priorities
1. Development of the economy
- Economic Development OP
2. The development of transport
- Transport OP
3. Renewal of the society
- Social Renewal OP - Social Infrastructure OP
4. Environment and Energy
- Environment and Energy OP
5. Regional Development
- 7 regions
(- European Territorial Cooperation OP (objective 3) 7 cross
border, 2 transnational, 4
interregional programmes )
6. State Reform
- Electronic Public Administration OP - State Reform OP
7.Coordination and Communication of The New Hungarys Programme Development Plan

- Implementation OP
The relevant national programs
GOP (Economic Development Operational Program Priority I)
These programmes encourage industrial research and experimental development programmes

exploitable for the economy and to be implemented in close cooperation between enterprises, universities
and research institutes and also provide assistance to building modern research infrastructure, to
applications for patents and in certain areas of primary importance to the permanent renewal of utilizable
knowledge and to their expedience in market environment. Furthermore these programmes are targeted
at establishing innovation and technology parks, hosting research and innovative enterprises and improving
the existing institutional system.
The focal points of these programmes are as follows:
- intensifying the presently low activity of domestic corporate R&D innovation;
- a more efficient utilization the existing capacities and results;
- and increasing the cooperation between the stakeholder actors.
Regional Development Operational Program (RDOP)
The Priority Axis 1 of the Operational Program of KDR (Regional Development Agency of CentralTransdanubia) for the programming period 2007-2013 concentrates on the development of regional
economy. In this aspect it encourages setting up an internationally attractive regional economic
environment, the promotion of competitive, innovative economic cooperation systems and networks,
stimulating the building of an innovation-oriented network of regional economy and improving the skills
and abilities of the domestic owners of small and medium-size enterprises.
TIOP (Social Infrastructure Operational Program)
The objectives of the scheme are as follows:

- improving the infrastructure necessary for the qualitative improvement of the R&D+I and training
activities of higher educational institutes,
- creating the necessary infrastructural and technological background for increasing the number of
students educated at faculties of technology and natural science by modernizing and improving the supply
of research equipment and instruments in the fields of mathematics, natural sciences, technology, IT and
life sciences.
TMOP (Social Renewal Operational Program)
These schemes assist to the promotion of the technology transfer of higher education institutes,
the supporting of the selected basic research projects of innovative research teams, the publication of the
scientific results of higher education institutes, the planning of a tutorial-researcher lifelong career and the
promotion of talented Hungarian students. They also contribute to the qualitative improvement of
education and research, to increasing the ratio of eminent students and tutor-researchers and urges for
achieving excellent results. A further objective of the schemes is involving foreign researchers or Hungarian
professionals working at foreign research institutes into Hungarian research projects easing in such way the
integration of home-coming Hungarian or foreign researcher-tutors into the domestic world of science.
Military Brownfield Restructuring
The West-Transdanubian Regional Operational Programme provides financial support to further

develop military brownfields to foster entrepreneurial environment. The concept of military brownfields
from the aspects of supporting measures:
Military brownfields are joint building site or sites, 50% of which has not been in use at the time of
application, its territory exceeds 2500 sqm and comes under one of the following categories according to
the settlement plan. Furthermore, function change can be expected due to development, i.e. the disused or
under developed building / complex of buildings / area is in bad physical condition, mostly environmentally
polluted, causing problems in township structures; and the development contributes to find the answers to
these issues.
The area has operated as an economic area for at least 10 years prior to the submission of the
application according to the settlement plan (commercial, service or industrial area in accordance with
OTEK) and industrial activities had been carried out or are being carried out in the area, or it functioned as
an agricultural area or
A particular area, within this context solely:
Areas of Education Centres
Provided the local building regulation has applied the categories defined by OTEK for 10 years
Areas of Health Care, or

Exploitation of raw material (mining), areas for pre-processing of raw materials, or
Areas of national defence, military and national security buildings, or

Areas of refuse operators, refuse tips (solid and fluid, other dangerous and radioactive
refuse etc.) or
Agricultural areas
Transport and public utility areas, within this context solely:
Transport buildings
Administration buildings
West-Transdanubian Operation Programme 1.3.1. Development of Business Infrastructure and

Investment Environment
B section objective:
Development of industrial areas and military brownfields
Objectives of the project:

Expanding services provided by the industrial areas in the region, quality development, and
supporting infrastructural investment allowing these developments.
Applicants:
Local municipalities, autonomous associations, as well as associations established by these
institutions, economic associations, co-ops, foundations.
Subsidy: 10 200 million HUF
Subsidy extent:
Micro enterprise 50%, SME 40%, other 30%
Independently attainable activities:

-
Establishment and development of infrastructure within the borders of the building site
Dissociation, building, conversion, expansion of the buildings
The most important governmental organisations at regional level in Hungary are the regional
development councils, which are not elected but delegated bodies. Their executive bodies are regional
development agencies. However, budgetary and administrative decisions are still prepared on a county
level; only on certain necessary developmental and administrative issues does the regional level have
decisional power.
Regional Development Council
The law about regional development and town and country planning adopted in 1996 created the
basis of the institutions of regional development in Hungary, thus also the establishment of the
independent regions. In 1997, the West Pannon Regional Development Council was established with the
participation of the counties Gyr-Moson-Sopron, Vas and Zala. The Council was re-formed in 1999 then in
2004 because of the obligation of the rule of law.
In the Council, the presidents of the councils of territorial development of the counties, the mayors
of the five towns of county rank of the region, the representatives of the small regions, the chairperson of
the Regional Tourist Council, as well as the 11 representatives of the government delegated by the
ministers have right of voting, thus the number of members is 23.
Regional Development Agency
The West Pannon Regional Development Agency (RDA ) was founded as a 100% subsidiary of the
West Pannon Regional Development Council (RDC).
The RDA s main tasks are to support the work of the RDC and to implement the specific objectives
set in the West Pannon Regional Development Programme. The Agency participates in establishing a future
vision for West Pannonia, and is responsible for implementing the regional development programme:
It carries out tasks associated with the working body of the Regional Development Council, helps
and promotes the flow of regional development information in the region, supports local and small regional
initiatives, and organises as well as coordinates conferences, meetings, and training programmes.
The Agency does not operate as an agency in the literal sense of the word. The Agency takes part in
the comprehensive, all-inclusive management of the respective projects. This includes all aspects from the
establishment of the planning programme, to the monitoring of activities. Based upon the knowledge of
the given situation and its own resources, the Agency decides whether to pursue direct involvement, to
take up a coordinating role, or to apply a mixed approach. In the course of its activity, the Agency has
established a wide level of cooperation with regional, national, and international organisations.
West Transdanubia took the lead in utilising the innovative methods of developing the economy.
Three regional organisations (the West Pannon Regional Development Council, the Regional Tourism
Committee, and the West Pannon Regional Development Co.) created the Pannon Business Initiative in
October 2001.
It aims to support the economic development of the region by encouraging investments,
developing the small, and medium-size enterprises, organising events and regional forums, introducing
innovative methods and other active operations. It operates within the framework of the Regional
Development Agency. The Initiative was meant to serve as an example for a well-organised, harmonised,
regionally integrated economic development model, and thus facilitate the general increase in the
competitiveness of the entire region in the long run. The cooperative network of the Initiative can in fact be
considered a loose voluntary cluster of the numerous organisations engaged in economic development
(Pannon Business Initiative 2006).
Regional Innovation Agency
The National Office for Technology and Research (NOTR ) supports the innovation-based
improvement of the economy, the competitiveness of the Hungarian regions, the formation and
strengthening of regional innovation networks, and the decentralisation of the regional innovation
incentive schemes. It has thus supported the establishment of regional innovation agencies. The Pannon
Novum West Pannon Regional Innovation Agency was established by the regions innovation actors with
the support of NOTR in 2005. The main task of the Agency is to implement the regional innovation strategy
that was prepared in 2001 for West Transdanubia, namely to harmonize innovation processes, to
encourage the spreading of knowledge, to provide and integrate innovation services, and to establish and
strengthen the requisite technological innovation networks. By enhancing innovation activity, it contributes
to the competitiveness of micro-, small and medium enterprises. The Agency helps to develop a more
innovative environment, encourages networks, and develops new innovation services by implementing
strategic objectives and activities.
The Agency now operates as a consortium of different regional and national organisations
representing the regional target groups.
The three years funding period of the project ended in 2007, but both the national and regional
policy makers are interested in continuing the operation in the future. 2008 starts another three years
funding period of NOTR.
In 2005, a new body focussing on innovation policy was established: the West Pannon Regional
Innovation Council. The members of the Council represent different organisations, thus a great number of
regional actors are connected to the work of the Council. Task is to facilitate innovation processes, to
provide professional proposals, to provide decision support for the Regional Development Council, and to
control and coordinate the work of the Regional Innovation Agency.
County Foundations for Enterprise Promotion (3)
GYR-MOSON-SOPRON COUNTY
Kisalfld Local Enterprise Agency
H-9022 Gyr, Czuczor Gergely u. 30.
Phone: +36 96 316 188
Fax: +36 96 511 121
Web: http://www.kva.hu/
E-mail: info@kva.hu
The foundation is serving the small and medium-sized enterprises since almost ten years. It is
building the infrastructure accurately to help the operation of an enterprise and gives them all the
information they need in economic, law and other fields; promoting them to get in touch with and create
business cooperation with partners in the European Union.
The following basic activity:
Consulting: in establishing a business, law, accounting, tax, loan, commerce, agriculture and
marketing
Training: Management/enterprise knowledge, computing, language courses.
Coordination of sources: Micro-credit, Start-up Credit, preparing an application, credit guarantee.
Research and studies, organizing events, supporting of exhibitions and fairs, distribution of
publications.
VAS COUNTY
Vas County Local Enterprise Agency
H- 9700 Szombathely, Petfi S. u. 1/b.
Phone / Fax: +36 94 326 049, 326 050
E-mail: vas-lea@savaria.hu
ZALA COUNTY
Zala County Local Enterprise Agency
H-8900 Zalaegerszeg, Kztrsasg u. 17.
Phone: +36 92 316 033
Fax: +36 92 316 062, 310 800
Web: http://www.zmva.hu
E-mail: info_zmva@zalaszam.hu
Zala County Foundation for Enterprise Promotion (ZMVA) has been established by the Zala County
Self-government, as the only founder in 1992. ZMVA operates as a member of a national network, but it is a
non-profit organization that is independent organizationally and financially, and an important element of
the Hungarian institution system promoting the improvement of the national and international economic
relations.
Objectives: Promoting the economic development of Zala County, supporting the establishment,
survival and first of all the growth of SMEs by operating a central promotion office and a county-level suboffice network.
Chamber of Commerce (5)
Gyr-Moson-Sopron County Chamber of Commerce and Industry

Vas County Chamber of Commerce and Industry
Zala County Chamber of Commerce and Industry
Sopron City Chamber of Commerce and Industry
Nagykanizsa City Chamber of Commerce and Industry
Innovation and Technology Centres (3)
INNONET Innovation and Technology Centre, Gyr
The most important one of them is the INNONET Innovation and Technology Centre, which is
located in the Business Park Gyr and is equipped with a modern communication equivalent to that found
in similar European centers targeting start-up companies. INNONET provides a wide range of
administrative, management, and training services at reduced rates for such companies.
The center work is based on the firm belief that long term socio-economic benefits of innovation processes
significantly exceed the earnings of individual companies participating in them. Committed to this
observation, INNONET was established as a non-profit organization to aid innovative small and medium
enterprises and thus foster the development of the West-Transdanubian Region.
The Centre also tries to create important synergies between the international firms settled in the Gyr
Business Park and the local innovative small -and medium-size ventures. It has very good relationships with
similar Austrian institutions (e.g., Eisenstadt, Wiener Neustadt, Seibersdorf) and runs several joint projects
with these partners.
Innovation and Technology Centre Sopron
The Innovation and Technology Centre located in the Industrial and Innovation Park of Sopron. The
centre is driving ventures which are producing high technology level products, and helping the
development of the town and the region with their services. Their work do not need large space, but use
high-tech instruments, and employ the high qualified local human power.
So the Park helps ventures which cause minimal environmental damage, use high-tech and
telecommunication instruments, deal with environment and nature protection or medication.
All the public works can be used by the tenants.
Claudius Technology Incubator and Innovation Centre Szombathely
The Technical Incubator House and Innovation Centre located in Claudius Industrial and Innovation
Park, 1500 m2 has been built with the mission of supporting mainly SME businesses.
The Technical Incubator House and Innovation Centre offers various services in outstanding circumstances
characterized by high level of infrastructure.
In Zalaegerszeg and Nagykanizsa two new innovation and technology centre is under preparation
which will focus on wood and furniture industries and mechatronics.
Competence centers (3), University Knowledge Centers (2)
National Office for Research and Technology announced a call for proposals in October 2004 for the
first time to establish and support the operation of Regional Knowledge Centres.
The main goal of the Pter Pzmny Programme is to establish Regional Knowledge Centres (RKC) to exploit
research and development results in close cooperation with the industrial sector.
The aim of the programme is to establish professional and regional centres of excellence in
cooperation with companies and other research organizations to manage innovative projects, focused on
research and development at an international level. These research centres effectively cooperate with the
industrial sector, stimulate the technological and economical development of the regions.
The task of the supported Knowledge Centres is to transfer R&D results to marketable new products and
technologies.
In our region there were two Regional Knowledge Centres established under the support of
National Office for Research and Technology:
Hungary
Regional Knowledge Center of Forest and Wood Utilization, Sopron, University of Western-
University-based Regional University Knowledge Center for Vehicle Industry, Gyr,
Szchenyi Istvn University
ERFARET Regional Knowledge Centre of Forest and Wood Utilization
The aim of the Forest- and Wood Utilization Regional University Knowledge Centre (RET) is to raise
the level (that was extraordinary so far) of the sylviculture and wood products industrial activity of the
West-Hungarian region, throughout technological and economic support and development of the region
and improving the competitiveness of the region and the country.
The centre task was to create a scientific and technological innovative centre (based on network
principle), carrying out innovation and research-development(R+D) activities that are extra ordinary in the
region. The centre will effectively and intensively cooperate with the economic sphere, as a professional
and regional centre. Among the strategic aims, the knowledge centre, the level of the innovation ability,
the modern technology, supportive cooperation between the intensive wood processing industry and the
forest management, the development of small and medium ventures (KKV) in the region, has to be
mentioned. All these correspond to the aims of the Economic Competitiveness Operative Programme
(GVOP) of the National Development Strategy (NFT).
The wood, the timber is one of the largest and most valuable natural resources of the Pannon
region, which traditionally determines the character of the landscape. The forest rate in the region is
significant, the necessary basic materials can be found in large quantity and good quality, the determinant
companies of the wood products industry (with great traditions) are concentrated in the whole spectrum of
the wood utilization. The analyses, carried out for the development plans, determined the utilization
possibilities of the region in the integration of economical networks, which are based on product clusters.
Regional University Knowledge Centre for the Vehicle Industry in Istvn Szchenyi University
The Regional University Knowledge Centre for the Vehicle Industry (JRET) project operated with the
support of the National Office for Research and Technology in the framework of the Pter Pzmny
Program in the period from 2006 to 2008, and since then it operates as an independent organizational unit
implementing new projects. The main activity of the Knowledge Centre is focused on the vehicle industry,
within this priority is given to research into vehicle manufacturing technologies and assembly
constructions. The Knowledge Centre acts as a centre for scientific and technological innovation, which in
co-operation with the business sector operates an outstanding research-and-development network in the
region.
The grant of HUF 1.1 billion, awarded for an application, raised an additional HUF 713 million from
company resources. Within the field of vehicle manufacturing technologies the three major research-anddevelopment programs of the project were complex research into the manufacturing technologies and
tools of high-quality vehicle parts, development of modern vehicle main units and research into their
diagnostic procedures, as well as technology and knowledge transfer. The Centre established world-class
research potential on the knowledge base of Istvn Szchenyi University with 8 full-time researchers, the
lecturers and PhD students of the University, as well as modern research tools. This enabled the consortium
partners and the companies associated with the Knowledge Centre to develop and manufacture products
that are competitive on the world market and have a high added value.
The mission of the Knowledge Centre is to act as a centre for scientific and technological innovation
for the vehicle industry in co-operation with the business sector, to operate an outstanding research-anddevelopment network in the region, improving thereby the competitiveness of the country and supporting
the economic development of the region.
The research infrastructure and human resources offered by the Knowledge Centre are available to
every enterprise for the development, introduction of new technologies, and the creation of competitive
vehicle products.
In the long term the organization intends to operate as a centre of excellence, playing a dominant
role in vehicle development in the Austrian-Slovakian-Hungarian border region.
Industrial and Business Parks (22)
By now the 24 Business Park formed in the region almost completely cover the area of the region
and it can be observed that - beside the foreign enterprises - these Parks play a prominent role in the
growth of the local economic players, especially SMEs.
Occupancy rate of Business Parks in the region
Number of
Total area, Net area, Occupied
Business
acres
acres
area, acres
Parks
Occupancy Occupancy
for the total for the net
area, %
area, %
Gyr-MosonSopron
Vas
Zala
West
Transdanubia
521.7
430.3
289,3
55.4%
67.2%
583.7
429.3
298.5
51.1%
69.5%
395.8
371.4
246.3
62.2%
66.3%
22
1501.3
1231.1
834.1
55.6%
67.8%
By 2006 total area of Business Parks in West Transdanubia exceeded the 1500 acre value, from
which the net floor space to be built-in exceeds the 1200 acres value. Number of resident enterprises is
increasing from year to year, it now approaches 350 companies. There are Parks that are nearly full and the
occupancy rate in regional level approaches 68% resulting in the need to involve new areas into the
developments.
Main features of Business Parks in the region
Area (acre) No. of enterprises
No. of
persons
1349
37 889
343
employees, Investment,
HUF
Million
423 032
Enterprises in Business Parks employ nearly 40 thousand people which means that on average one
Park employs 1800 persons, in other words, 12.5% of the employees in the region find up-to-date working
environments at enterprises working in one of the Business Parks.
Of course there are significant differences among the parks, as in parks operating since nearly 15
years in the major industrial centres number of the resident enterprises still exceeds 30 (in Gyr this
number is over 80), while number of companies in a park of a minor township is much lower, is under 12 on
average, and obviously their role in employment is also minor.
Regional clusters
The first similar initiative in Hungary was established in West Pannonia. Its principle is the networkbased organisation.
Strictly speaking of the clustering processes and clusters as ecosystems, we cannot talk about well
working clusters in the West Transdanubia region. There are a number of fields and sectors (car industry,
wood and furniture industry, tourism, etc.), at the same time, where a continuous progress of the
clustering process can be observed and this can be a basis for these potential and politically directed preclusters to become by an active policy developing and well working clusters, even on middle term.
Pannon Automotive Cluster (2000)
Pannon Wood and Furniture Cluster (2001)
Pannon Thermal Cluster (2001)
Pannon Mechatronics Cluster (2005)
Pannon Logistics Cluster (2005)
Pannon Textile Cluster (2005)
Pannon Local Product Cluster (2005)
Pannon Renewable Energy Cluster (2006)
Pannon Cluster for winery (2007)
West-Pannon Eco Cluster (2007)
Pannon IT Cluster (2008)
Sopron Region ICT Cluster (2008)
Pannon Pellet Cluster (2008)
Though the region does not have an own solid and complex cluster policy, this deficiency is partly
counterbalanced by the effect of the institutional, organizational and higher educational efforts to satisfy
the special needs and demands of the pre-clusters established since 2000 (car industry, wood and furniture
industry, thermal, mechatronics, logistics, textile industry, local products, renewable energy) or those of
priority sectors as well as the effect of the innovation policy of the region.
4. CONCLUSION
The whole surface of the 24 business parks that were to be found in the region of West Pannonia
exceeded 1300 hectares in 2005. The number of enterprises that settled in the region increases dynamically
and more than 350 companies located here at the moment. Certain business parks (for ex. Gyr, Srvr)
are quite completely full therefore other areas have to get involved into the development for example the
military brownfield areas.
Earlier traditional sectors of the region - food industry, light industry, textile industry - have
devaluated and lost their role while engineering industry that has also age-old traditions stopped short
after the collapse of the eastern markets, then it renewed step by step owning to the appearance of
multinational investors (Audi, Opel, Flextronics, General Electric and so on). Within engineering industry,
motor industry as well as the production of machinery, instruments and telecommunication equipments
dominate.
The dynamic growth of the industry is based on the powerful export orientation that is
characteristic not only for the foreign enterprises settled in the region but also for the Hungarian
companies. Unfortunately, it is characteristic for one part of the foreign investments (for ex. electronics)
that they established an assembling activity with lower added value, as well as they were not able to
integrate into the economy of the region by developing Hungarian supplier chains. The major part of the
existing export oriented sectors needs many imports, and at the same time it is a low-tech assembly as well
as job processing with low added value which is based on less qualified labour force. At the beginning of
the years 2000, disinvestments could be experienced in textile industry and in electronics concerning the
activities with low added value which could cause serious employment problems in certain small regions.
On the base of the most important sectors of the region, such cluster initiatives were launched
from 2000, the aim of which is to promote the cooperation and interaction of enterprises, to provide
special services and infrastructure for the most important sectors of the economy and for their connecting
background industry in the region. Many projects were realised that are useful for the close connections of
the economic sphere and municipalities involved the brownfield reconstructing and investment
possibilities.
ROMANIA
Type of economy
Since early 1990, Romania has had a free market economy despite continuing government
presence in the industrial sector. Successive governments have taken steps to liberalise and privatise the
economy.
Romania sits on the crossroads of many historic trade routes that allow access to another 200
million consumers within a 1,000-km radius of Bucharest. The main channels of these routes are the
Danube River and the port of Constanta, one of the largest ports on the Black Sea, which is linked to the
North Sea by a new navigation route through the Rhine-Main-Danube Canal. Romania has a large skilled
workforce experienced in areas such as engineering and manufacturing and cheaper labour costs compared
to many other East European countries.
Many of the countrys big cities boast of a large industrial infrastructure, which along with
Romanias considerable natural resources offer substantial potential for exploitation and development.
Main macroeconomic trends
Like many countries in Eastern Europe and the former Soviet Union, Romania had been struggling
to turn its command economy into a market economy. Successive governments have found it difficult to
turn the economy around because of a lack of hard currency and the inability to secure external funds due
to the countrys high budget deficits, much of it accrued from financing loss-making state industries. Old
economic and financial structures have been slow to change just like the bureaucratic culture inherent in
many old institutions. In the last years, the overall business climate has improved and the economic
indicators look healthier.
Table 1: Growth and associated factors

GDP growth
Final consumption
Gross Fixed Capital Formation
FOREIGN TRADE AND INVESTMENT
Exports FOB
Imports FOB
Trade balance
Merchandise trade balance as % of GDP
Exports
Imports
UM
%
%
%
2005
4,2
8,9
15,3
2006
7,9
9,4
19,9
2007
6,2
9,6
29,0
2008
7,1
8,0
19,3
Mil. Euro
Mil. Euro
Mil. Euro
22255
30061
-7806
25850
37609
-11759
29549
47371
-17822
33614
51813
-18199
%
%
%
-9.8
27.9
-37.7
-12.0
26.4
-38.4
-14.4
23.9
-38.3
-13.4
24.6
-38.0
-10156
8723
-16677
7047
-16877
9237
6,56
4,84
7,85
4667
460
5,2
4885
367
4,3
4737
403
4,0
3.5245
2.8090
3.3373
2.4383
3.6827
2.5189
Current account deficit

Mil. Euro
-6888
Direct Investments
Mil. Euro
5237
INFLATION
CPI (average)
%
9,0
EMPLOYMENT
No. of employees in economy
Thou. pers.
4559
Unemployment
Thou. pers
523
Unemployment rate
%
5,9
EXCHANGE RATE
RON/EURO (average)
3.6234
RON/USD (average)
2.9137
Source: INS; BNR; The National Agency for Employment.
Table 1 shows the major macroeconomic development during 2005-2008
Over the period of reference Romanias economy grew steadily. In year 2005 GDP grew by 4.2% as
against 2004 and in 2008 GDP growth was 7.1% as against the previous year. Imports and exports grew at
different rates leading to the lopsided balance of payment and to the deficit of the current account.
Leading sectors of the Romanian economy
Manufacturing and engineering are Romanias backbone industries. The country also possesses
substantial energy resources and agricultural land. Most sectors of the economy remain under-exploited
and offer great potential, particularly manufacturing, agriculture and tourism. The technology sector
continues to play an increasingly important role in the economy due to the high level of skill among its
workers and rather low wage costs. The real estate sector also offers significant growth opportunities.
Government-owned industries and privatization
Romanias government has reaffirmed its commitment to privatize the remaining state-owned companies,
particularly those in energy, heavy industry, pharmaceuticals and utilities. The relevant privatization
strategies are formulated, approved and executed every year by the concerned ministries in collaboration
with the state privatization authority, the Authority for the Disposal of State Assets (AVAS). Most of the
companies up for privatization are listed on the two major capital markets Bucharest Stock Exchange and
RASDAQ.
Privatization is often carried out on these markets through electronic auction, public equity offer
and/or firm commitment underwriting. Moreover, in the case of big state-run companies undergoing
privatization, direct negotiations are a common practice.
Last year, foreign investors showed a special appetite for the automotives sector, electronics and
household appliances, construction, pharmaceuticals and bio-diesel production. Automotives was
appealing to investors because of its long tradition in Romania. Production of consumer electronics and
household appliances benefits from the wide availability of skilled workforce. The construction sector
flourished due to the continuing boom in the real estate market and bio-diesel production benefited from
large areas put to fuel-yielding crops.
The Information Technology and Communications (IT&C) sector has also attracted foreign
investment due to the availability of highly qualified IT specialists.
Foreign direct investments
Sectors that attracted foreign investments in recent years include oil and natural gas, automotives,
metallurgy, banking and finance, food processing, heavy engineering, telecommunications, construction
and consumer goods manufacturing. Investors have expressed interest in newly-privatized industries as
well as in greenfield projects. The FDI within greenfield projects exceeded 42%.
Table 2. Foreign direct investments attracted by Romania during 2004-2008

Eur million
2004
TOTAL FDI inflow
Industry
2005
2006
2007
2008e
9258
21885
34512
47139
36641
6223
10689
15155
19621
24087
Services
3035
11196
19357
27518
12554
...
6.6
8.9
5.7
6.8
100
100
100
100
100
Industry
67.2
48.8
43.9
41.6
65.7
Services
32.8
51.2
56.1
58.4
34.3
Foreign direct investment balance, as % of GDP
Structure of the total FDI, %

TOTAL FDI inflow
Source: <http://arisinvest.ro/en/why-romania/fdi-statistics/>
FDI per capita in 2008 (Euro) was slightly above 2,000 Euros
Foreign direct investments (FDI) play a key role in the globalization process and is an important
element affecting international relations .
Table 3. The structure of the Foreign direct investments attracted by Romania during 2004-2008
Per cents
2004
TOTAL
Industry
Services
2005
2006
2007
2008
100.0
100.0
100.0
100.0
100.0
67.2
32.8
48.8
51.2
43.9
56.1
41.6
58.4
65.7
34.3
The foreign trade activities

In 2008 the total exports were over 33.6 billions Euro and the imports were over 51.8 billions Euro.
During 2004-2008 the foreign trade activities increased continuously, but the evolution of the imports
exceeded the exports one (see the table no.1). In this context the trade balance was negative; the trade
deficit increased from 7.8 billions Euro to 18.2 billions Euro.
Table 4. The External trade in goods, 2007
Extra EU-27
EU-27
Euro area
Romania
Intra EU-27
2665.80
2010.99
22.98
5218.03
3908.78
57.39
Source: Eurostat (ext_lt_intratrd)
Most of Romanias trade is orientated to the EU (71.4% of the total volume in 2007, by 5.2% higher
than the average external trade of the EU-27).
The number of employees
The number of employees in the Romanian economy increased by 3.9% (from 4559 thousands
persons in 2004 to 4737 thousands persons in 2008).
The number of unemployed was 403 thousands persons in 2008. The rate of unemployment
decreased from 5.9% in 2004 to 4.4% in 2008.
* * *
In the last IMF Report for Romania the decline of economic activity was deeply influenced by the
world financial economic crisis. The real GDP contracted by 7.6% during the first half of the year 2009,
compared to the estimated 2%, because of the high decrease of the domestic supply, especially of the
consumption.
SOUTH REGION - MUNTENIA (NUTS II)
The municipality of Alexandria is situated in the South Development Region, located as its name
indicates in the South part of Romania, with a surface of 34,453 sqkm (14.45% from the country surface),
composed by 7 counties (Arges, Calarasi, Dambovita, Giurgiu, Ialomita, Prahova and Teleorman). In the
South, the region borders with Bulgaria. The landscape is characterized by the predominance of the low
altitude relief: plains and watermeadows-70.7%, hills-19.8% and about 9.5% mountains.
In 2005, the total population of the seven counties was of 3,329,762 inhabitants, which
represented 15.3% of the total Romanian population. The population density is 96.6 inhab/sqkm, a higher
value compared to the national average (90.7 inhab/sqkm). The urbanization level is 41.7%, below the
national average, because, except Prahova County, the majority of the population lives in rural areas.
The South Region had, in 2005, a settlement network composed of 48 cities (out of which 16
municipalities), 517 communes and 2018 villages. Most of the cities (32) have less than 20,000 inhabitants,
most of them with a poor urban infrastructure, similar to the rural areas. There are only 2 cities over
100,000 inhabitants (Ploiesti and Pitesti). The territorial distribution shows a large concentration of the
cities in Prahova county (14) and more reduced in Giurgiu (3).
Regional economy
In 2004, the regional GDP registered 2,447 euro/inhabitants (2,932.8 euro/inhab the national
value). At county level, the highest values are registered in Arges (3,071 euro/inhab) and Prahova (2,696.9
euro/inhab), while the most reduced is registered in Calarasi (1,748.2 euro/inhab). The essential
characteristic of the region is represented by the partition in two subareas with different socio-economic
and geographic individualities.
The high level of industrialization characterizes the northern part of the region (Arges, Dimbovita
and Prahova counties), Prahova ranking first in the country, as it regards the industrial production. The
main problems that characterize this area are linked to the industrial units decline, which generates a high
unemployment rate. The closing down of certain economic units in mono-industrial areas determined the
development of serious social problems, especially in some mono-industrial urban localities: Mizil, Moreni,
Plopeni, Urlai, Costeti and Cmpulung Muscel.
The southern part of the region (Clrai, Giurgiu, Ialomia and Teleorman) is traditionally
underdeveloped, representing the second poverty area in Romania (the first being in North East Region).
This area is characterized by the predominance of the population occupied in agriculture. Also, the
component counties are characterized, as relief, by the predominance of plain. In the 70s, the whole area
supported an artificial industrial development. Currently, the area is affected by the severe impact of the
transition process towards the market economy, through the closure down of the majority of the
representative industrial units. This situation characterizes all the county capitals and the neighbouring
areas of the next cities: Turnu Mgurele, Zimnicea, Alexandria, Videle, Giurgiu, Oltenia, Clrai, Slobozia
and Feteti.
Table 5: Population of the South Region (NUTS II) at the end of the year
Number
Evolution, %
2004
2005
2006
2007
2008
3342042
100
3329762
99.6
3312342
99.1
3300801
98.8
3284525
98.3
Source: National Institute of Statistics
Areas in difficulty
The industrial restructuring of the last 15 years generated the closing down of some industrial units
in mono-industrial areas, leading to severe social problems in the adjacent areas of the localities: Mizil,
Plopeni, Urlai, Valea Clugreasc, otnga, Costeti, Stoieneti i Cmpulung Muscel - in northern
counties, but also in some localities in southern counties: Turnu Mgurele, Zimnicea, Alexandria, Videle,
Giurgiu, Oltenia, Clrai, Slobozia i Feteti.
The economic-social problems appeared also within rural localities focused on mining industry,
located in the Subcarpathians area, some (Filipeti and Ceptura) being declared in the past as problematic
areas in order to encourage the investments by offering fiscals advantages. Unfortunately these measures
had a reduced socio-economic impact on the localities, still needing wide actions for socio-economic
growth.
The fifth industrial restructuring area was identified within South Region. Located in North West
region, the areas include also the towns of Arges (Costeti, Colibai, Cmpulung Muscel, Curtea de Arge,
Piteti and Topoloveni) and Dambovita (Fieni, Geti, Moreni, Pucioasa, Trgovite and Titu) counties.
Development potential
South Region has an important economic development potential, differentiated between the
northern and the southern parts of the region. Thus, in the northern part there are underground resources
represented by oil and natural gas, coal, salt, which, through processing and trading could increase the
added value in the region. On the other hand, in the southern part of the region there are large agricultural
areas that can contribute to the specialized agricultural development, according to the local pedological
conditions.
The industry contribution to the regional GDP is over 30%, especially if is taken into consideration
the share of the chemical and petrochemical industry (Prahova and Arges), machines, transport
equipments, construction materials (Prahova, Arges and Dimbovita), textiles, confections and food
industry. Ploiesti, Pitesti and Targoviste cities act both as growth development poles and as polarizing
centers for new industrial activities, besides the existing traditional activities, including the foreign
investments.
The industry represents the most important economic sector of the region, if it is considered that
the industrial enterprises realized 45.9% from the total regional turnover (2003). At county level, the
highest industrial turnover is realized in Prahova (38%) and Arges (33.3%), the last county being Calarasi
(4%).
There are 11 industrial, scientific and technologic, tourist and leisure parks (which represent 30% of
the total number of parks), 5 of them being located in Prahova County.
The agricultural potential of the region in general and of the southern part especially is very
important (71.1% from total area is represented by agrarian land, out of which 80.2% arable land).
There are also important foreign investments in the Region: Renault Pitesti, Holcim Campulung Muscel,
Samsung COS Targoviste.
GDP of the South Region in 2008 was of 17,517.1 mln euro, lower than in the previous years.
Gross GDP per capita (PPP) was of 5,333 euro by 12.5% lower than in 2004.
Table 6: Economic context of the South Region Muntenia (NUTS II)
Regional GDP (mil RON)

Total Regional_GDP (mln Eur)
Regional GDP per capita PPP (RON)
Regional GDP per capita PPP (Eur)
Regional gross domestic product - PPS
per inhabitant in % of the EU-27 average
2004
2005
2006
2007e
2008e
59472.2
20368.7
36322.1
21801.5
44301.4
25139.1
56505.29
16466.9
63192.36
17517.1
17795
6095
10908
6547
13375
7590
17119
4989
19239
5333
28.1
29.1
32.1
33.8
35.9
Compared to the regional GDP of EU27, GDP in the South Region accounts for 35.9%. Between
2004-2008 there was a certain trend of increase of the share of regional GDP in the European average (by
7.8 percentage points).
Table 7: Structure of regional GDP of South Region Muntenia. Total=100
2004
2005
2006
Agriculture
9.7
11.2
9.9
Industry
15.0
30.4
32.5
Services
75.3
58.4
57.6
Source: National Institute of Statistics; National Bank of Romania; Eurostat.
2007e
9.8
26.7
63.5
2008e
9.7
26.7
63.6
The structure of South Region in 2008 was: services 63.6%, industry 26.7%, agriculture 9.7%.
The turnover of entreprises in the South Region, in 2008, was over 28 billion euros, an increase of
94.3% as against 2004.
The structure of the turnover in 2008 was as follows: 48.6% in industry, 51.4% in services. Over the
period mentioned, the share of industry in turnover declined in favour of services.
Table 8: Total turnover of South Region Muntenia

2004
Total turnover (mln RON)
Of which:
Agriculture
Industry
Services
2005
51077
14411
52.0
2006
2007
2008
64090
17688
52.6
77103
21876
53.3
90116
27003
56.1
103129
28004
57.3
100
0
22.4
77.6
100
0
23.5
76.5
The share of the turnover of SMEs in the total turnover was 52.0% in 2004 and 57.3% in 2008. Most
of their turnover 76% - was registered in services.
Table 9: Structure of total regional turnover
2004
Total
Industry
Services
2005
100
52.8
47.2
2006
100
55.1
44.9
2007
100
53.5
46.5
2008
100
49.8
50.2
100
48.6
51.4
In average, the structure of the SMEs turnover in 2007 was: 23.5% in industrial activities, 76.5% in
services.
Table 10: Total turnover of SMEs from South Region Muntenia by number of employees, between 2006-2007
Activities
(by sections of NACE Rev.
1)
2006
Total
Industry
Of wich:
By range, by number of employees
Total
0-9
100
22.4
10-49
100
7.7
50-249
100
18.9
100
39.3
Services
2007
Total
Industry
Services
77.6
92.3
81.1
60.7
100
23.5
76.5
100
7.3
92.7
100
21.4
78.6
100
39.9
60.1
The analysis of the turnover of SMEs by number of employees shows the following: SMEs with up
to 9 employees are mainly orientated towards services (with 92.3% of the total turnover ibn 2007); the size
of the turnover diminishes as the SME growths.
In 2008 the total number of employees in the South Region was 596 thou persons, with an increase
of 4.3% as against 2004. By main sectors it breaks down to: 5.2% in agriculture, 42.0% in industry, 52.8% in
services. Over the analyzed period the share of persons employed in agriculture increased by 0.4
percentage points and in industrial activities by 1.4 percentage points, while in services it decreased by 1.8
percentage points.
Table 11: Number of employees in South Region Muntenia

2004
2005
2006
2007
2008

Employment per main sector:
Sector A agriculture (%)
Sector B - industry (%)
Sector C services (%)
570.5
571.1
566.5
597.0
595.8
5.3
43.9
50.8
5.4
41.8
52.8
5.0
40.3
54.7
4.4
38.5
57.1
5.7
45.4
49.0
Value added per employed (Eur)
49727
56383
68984
72145
80783
Average gross wage (RON)

770
217
952
263
1111
315
1295
388
1305
354
Average net wage (RON)

Average net wage (Eur)
579
163
716
198
835
237
974
292
981
266
Unemployment
Unemployment rate (%)
94685
7.4
93142
7.3
81209
6.3
65517
5.1
58779
4.55
Note: about 75-80% are paid unemployed, about 10-15% are paid unemployed
In 2008 in the South Region was 80.8 mln euro. As compared to year 2004, the added value per
employed person increased 1.6 times.
The average gross wage in the South Region was of 217 euro per month in 2004 and of 354 euro
per month in 2008. Directly linked to the gross wage, the average net wage was of 183 euro in 2004 and of
266 in 2008.
The number of registered unemployed was of 58.8 thou persons in 2008, decreasing by 37.9% as
against 2004.
Unemployment rate was 4.55% in 2008, diminishing by 2.85 percentage points as compared to
2004.
Traditional economic sectors in the South Region Muntenia:
Petro-chemistry equipment
Petro-chemical products
DACIA and ARO car production
Vegetal agricultural products
Meat production
Mountain tourism
Comparative advantages of the Region
Good coverage by telecommunication networks
The international airport Henry Coanda
The complex road network: sectors of the Eurocorridors IV and IX, of the motor ways A1 and A2, a
number of roads of national and European rank.
Skilled cheap labour force
Agricultural land available for eco-agriculture.
C. SHORT PRESENTATION OF TELEORMAN COUNTY (NUTS III) PART OF THE SOUTH REGION
ECONOMIC CONTEXT
The average population of Teleorman County over the last years was of 417.5 thou inhabitants, i.e.
12.6% of the regions population. The overall trend is of decrease: between 2004 and 2008 the total
population decreased by 4.8%.
Table 12: Evolution of the population in Teleorman County (NUTS III)
Population, end of the year, number

% in the South Region Muntenia
Evolution, %
2004
2005
2006
2007
2008
427745
12.8
100
422314
12.7
98.7
417183
12.6
97.5
413064
12.5
96.6
407377
12.4
95.2
GDP of Teleorman County was in 2008 of 1310.1 mln euro, on an increasing trend, by over 3
percentage points between 2004 and 2008. In 2008 GDP of Teleorman County accounted for 7.5% of the
regional GDP.
GDP per capita in Teleorman County (ppp) was of 3216 Euro in 2008, by 51.8% smaller than in
2004.
Table 13: Economic context of Teleorman County (NUTS III)
GDP (mil RON pret curent)

GDP (mln Eur)
% of regional GDP
2004
2005
2006
3212.1
906.3
4.45
3402.1
938.9
4.31
3847.0
1091.5
4.34
4369.1
1309.2
7.95
4824.6
1310.1
7.48
2119
34.8
2223
34.0
2616
34.5
3169
63.5
3216
60.3

% of county GDP in regional GDP
2007e
2008e
Source: National Institute of Statistics; National Bank of Romania
Foreign trade was positive over the whole analyzed period, imports accounting for an average 50%
of exports. However, we can notice a steady increase of imports (accounting for 43.1% of exports in 2004
and reaching 60.2% in 2008); in 2008 imports and exports decreased by 10.2% and 35.6% respectively and
as a result the trade balance diminished by almost 55% (from 121 mln euro in 2004 to 55 mln euro in 2008).
Table 14: Foreign Trade in Teleorman County (NUTS III) Mln Euro
2004
Import of goods
Export of goods
Trade balance
Evolution, %
91.87
213.01
121.14
2005
89.52
194.02
104.50
2006
87.18
175.04
87.87
2007
84.83
156.06
71.23
2008
82.49
137.08
54.59
2004
Import of goods
Export of goods
Trade balance
2005
100
100
100
2006
97.4
91.1
86.3
2007
94.9
82.2
72.5
2008
92.3
73.3
58.8
89.8
64.4
45.1
Source: National Institute of Statistics; National Bank of Romania;
GDP per capita in Teleorman County accounts for 60.3% of the regional GDP.
In 2008 there were 5,319 active companies, an increase of 23.1% as against 2004. The total number
of SMEs in 2008 was 5,061, representing 95.2% of the total number of active companies. The dynamics of
the SME sector was higher than the total active companies one.
Table 15: Number of companies inTeleorman County, 2004-2008
2004
No. of active companies
Out of which no.of active
SMEs
% SMEs in total active
companies
Evolution of the no. of active
companies, %
Out of which evolution of
no.of active SMEs
2005
2006
2007
2008
4319
4552
4796
5080
5319
3779
4023
4297
4582
5061
87.5
88.4
89.6
90.2
95.2
100
105.4
111.0
117.6
123.1
100
106.5
113.7
121.2
133.9
Source: Territorial statistics
The structure of the active companies in Teleorman County is as follows: in agriculture 7.78%, in
industry 9.53%, in services 82.7%. Manufacturing industry accounts for the greatest share of industrial
units, and retail and gross trade, car and motorcycle maintenance and repair account for the greatest share
of services (58.01).
Table 16: Structure of the active units in Teleorman County by size and type of activity in 2008
Activities
Total
Total
Agriculture
Industry
Mining Industry
Manufacturing Industry
Electric and thermal energy, natural gas,
water
Services
100.00
7.78
9.53
0.16
9.13
0.24
82.70
of which categories of size by no of

employees
250 and
0-9
10-49
50-249
over
100.00
100.00
100.00
100.00
7.28
13.30
8.42
5.26
7.46
20.69
48.42
73.68
0.04
0.49
2.11
10.53
7.35
19.95
37.89
63.16
0.07
85.26
0.25
66.01
8.42
43.16
0.00
21.05
Activities
Total
Construction
Retail, car and motorcycle, house appliances
repair and maintenance
Hotels and restaurants
Transport, storage and
communications
Real estate, leasing and industrial services
Education 1)
Health and social assistance 1)
Other collective,
social and personal services
1)
5.02
of which categories of size by no of

employees
250 and
0-9
10-49
50-249
over
4.65
6.90
14.74
5.26
58.01
3.70
60.35
3.86
44.58
2.96
14.74
0.00
0.00
0.00
4.86
7.46
0.35
1.75
4.89
7.74
0.39
1.84
4.43
4.43
0.00
1.23
3.16
8.42
0.00
0.00
15.79
0.00
0.00
0.00
1.54
1.54
1.48
2.11
0.00
Includes only local units organized as commercial companies
The structure of SMEs by size

Tabel 17: Structure of SMEs active in Teleorman county by size, in 2008
of which: by categories of size according to
the no of employees
Activities
Total
0-9
10-49
50-249
Total
100,00
100,00
100,00
100,00
Agriculture
7,79
7,28
13,30
8,42
Industry
9,29
7,46
20,69
48,42
Mining Industry
0,12
0,04
0,49
2,11
Manufacturing Industry
8,93
7,35
19,95
37,89
Electric and thermal energy, natural gas,
water
0,24
0,07
0,25
8,42
Services
82,93
85,26
66,01
43,16
Construction
5,02
4,65
6,90
14,74
Retail, car and motorcycle, house appliances
repair and maintenance
58,23
60,35
44,58
14,74
Hotels and restaurants
3,71
3,86
2,96
0,00
Transport, storage and
communications
4,82
4,89
4,43
3,16
Real estate, leasing and industrial services
7,49
7,74
4,43
8,42
Education 1)
0,36
0,39
0,00
0,00
Health and social assistance 1)
1,76
1,84
1,23
0,00
Other collective,
social and personal services
1,54
1,54
1,48
2,11
1)
Includes only local units organized as commercial companies
The turnover registered in 2008 by the companies of Teleorman County was over 1101.3 M euro,
up by 4.6% from 2004.
The structure of the turnover in 2008 was as follows: 36.2% in industry, 63.8% in services. Over the
analyzed period there was a slight decrease of the share of industry in favour of services.
Table 18: Total turnover of Teleorman County
2004
Total turnover (mln RON)
2005
3730.8
1052.6
3812.6
1052.2
2006
2007
3894.3
1104.9
2008
3975.0
1191.1
4055.7
1101.3
100
53.1
46.9
100
36.2
63.8
Structure of the Total turnover, %

Total
Industry
Services
100
39.6
60.4
100
42.4
57.6
100
41.0
59.0
In 2008 employed population was 52.6 thou persons, down by 5.6% as compared to 2004. By main
sectors of activity: 9.5% in agriculture, 36.9% in industry, 53.6% in services. To be noted that population
employed in agriculture declined by 1.14 percentage points and in services by 0.31 percentage points, while
it increased by 1.45 percentage points in industry.
Table 19: Employment in Teleorman County
2004
2005
2006
2007
2008

Employment per main sector:
Sector A agriculture (%)
Sector B - industry (%)
Sector C services (%)
55.737
56.126
54.562
56.900
52.619
10.3
38.5
51.1
10.1
38.1
51.7
9.4
35.0
55.6
8.4
32.9
58.7
9.2
40.0
50.8
143612
158325
203201
226830
198267
Average gross wage (RON)

745
210
890
246
1011
287
1119
335
1254
340
Average net wage (RON)

Average net wage (Eur)
560
158
669
185
760
216
841
252
943
256
Unemployment
13860
15504
14269
Unemployment rate (%)
8.0
8.9
8.2
Note: about 75-80% are paid unemployed; about 10-15% are unpaid unemployed.
12552
7.3
15011
9.1
In 2008 added value per employed person in Teleorman County was 1989.3 mln euro (an increase
of 38.1% as compared to 2004).
Gross average wage was 210 euro per month in 2004 and 340 euro per month in 2008. Directly
related are net wages: 158 euro/month in 2004 and 256 euro/month in 2008.
Unemployment in 2008 was of 15,000 persons, an increase by 8.3% from 2004. The breaking down
this total shows the highest share detained by persons with primary education (84.6%) followed by those
with secondary education (13.1%); these are the categories that keep increasing over the period 20042008.
Table 20: Unemployment by level of education in Teleorman County
Primary
2004
2005
2006
2007
2008
83.6
12.5
3.9
84.7
12.8
2.5
84.9
13.2
1.9
85.0
13.4
1.6
84.7
13.5
1.8

Unemployment rate was 9.1% in 2008, the double of the regional rate.

Over the period 2000-2007 Romanias economy grew steadily (see above at context analysis). From
2007 the private sector and its sub-sector of SMEs benefited from propitious conditions so that the
contribution of the private sector to GDP grew from 65.6% in 2000 to 71.2% in 2007.
The 2007 Report on the activity of SMEs showed that up to 2007 the SME sector has developed
both as number of active SMEs and structure by size categories and economic sectors.
Table 1: Number of active SMEs between 2000-2007 by size

Category 2000
2001
2002
2003
2004
2005
2006
2007
Micro
375,804 374,255 377,499 417,366 358,787 386,561 410,763 431,029
Small
29,121 30,340 30,231 33,856 36,392 39,128 43,419 47,022
Medium 7,504
7,737
7,761
8,147
9,121
9,158
9,322
9,577
Total
412,429 412,332 415,491 459,369 404,300 434,847 463,504 487,628
Source: National Institute of Statistics, Ministry of Economics and Finance, Ministry of SMEs
Table 1 shows an increase of 18.2% of the number of SME between 2000 and 2007
Table 2: Number of active SMEs by sectors of activity

Sector
2000
Agriculture & forestry 9,925
2001
10,720
2002
10,523
2003
13,704
2004
11,746
2005
11,958
2006
12,859
2007
14,036
Industry, energy
47,693
52,923
59,555
54,993
55,718
56,873
59,492
45,719
Construction
11,808 13,402 18,842 24,542 25,197 29,265 34,757 45,896
Services
344,977 340,517 333,203 361,568 312,364 337,906 359,015 368,204
Total
412,429 412,332 415,491 459,369 404,300 434,847 463,504 487,628
Source: National Institute of Statistics, Ministry of Economics and Finance, Ministry of SMEs
It is to be mentioned that the most active sector was that of construction, where the number of active
SMEs increased 4 times between 2000-2007.
The main conclusions of Tables 1 and 2 are:
Most of the medium size SMEs are in the industrial sector; the average size of an industrial SMe
being bigger than in other sectors; in this sector SMEs need higher capital investment and a larger
number of skilled employees;
78.6% of micro SMEs are in the services sector;
In services, especially in retail, there are mostly micro-entreprises (92%); many of the microentreprises function as market-intermediaries, as partners or sub-contractors; their large number is
due to the development of a new category of services provided to companies, based on contracts
of service provision;
The evolution of active SMEs in the service sector is significant for the whole economy of the
country. From a statistical point of view, the service sector is divided in four sub-sectors, i.e. commerce,
tourism, transport, communications and other services of specific evolution. On the whole, the number of
SMEs in retail keeps decreasing continuously and significantly, its share declining from 73.6% in 2000 to
52.5% in 2007. Tourism is less dynamic although its share increased from 4.1% in 2000 to 6.1% in 2007. On
the other hand, the share of the sub-sector of other services jumped from 17.8% in 2000 to 31.7% in 2007.
The overall picture shows the switch to fields of higher added value, such as transport and communications
(e.g. from 4.8% to 9.7% between 2000 and 2007). The decline of the retail sector and the development of
other services is an indication of the existing development potential for SMEs with a higher added value.
Legal framework
The main legal acts regulating the activity of SMEs are:
Emergency Ordinance no 139/2007 amending Law no 346/2004 on the development of small and
medium enterprises, adopted with a view to be in line with the programmes dedicated to SMEs
funding.
Government Decision no 387/2007 on the organization and functioning of the Ministry for SMEs,
Commerce, Tourism and Liberal Professions (SMECTLP)
Order of the Minister of SMECTLP on the approval of the Regulations
Emergency Ordinance no 94/2007 on amendments to Law on Public Procurement (reducing the

ceiling for tendering).
Institutional framework
At central level the activity of SMEs is coordinated by the Ministry for SMEs, commerce and
business environment (SMECBE), The SMECBE is in charge to develop and consolidate relevant legislation
in accordance with EU regulations, The development of the institutional framework for SMEs is reflected in:
The development of Territorial Offices for SMEs (TOSME)
Enlargingn the network of National Guarantee Fund for SMEs
Developing the post-privatisation process
One of the major tasks of the Ministry is to ensure the annual management of funds supporting
SMEs national, PHARE, structural etc,, in collaboration with other institutions and bodies,
The Ministry prepared and adopted the Regulations for the development and functioning of
Territorial Offices for SMEs (TOSME) located in 12 county-capitals, The TOSMEs are subordinated to the
Ministry for SMEs, have judicial personalities and have the following competencies:
developing and managing data bases concerning the respective SMEs and their activity profile;
collaborating with the local authorities and the local business communities for the implementation
of the Government Strategy in support of the SMEs
counseling SMEs how to access the ministrys and European programmes
facilitating SMEs access to IT services e-governance and e-business
providing information campaigns to develop business environment (in partnership with the
Regional Development Agencies, Euro Info centres, the Chambers of Commerce etc,)
facilitating access of SMEs to public procurement
organizing seminars for professional training with the Ministry of Finance,
One of the major concerns of TOSME is to advise SMEs to become competitive at European level,
A special attention is given to SMEs in regions where the industrial and social infrastructure is
weakened and unemployment rate is high.
At national level:
The Strategic National Reference Framework (SNRF) 2007-2013 establishes priorities of intervention at
national level and connections to the Structural Funds and the Strategic Guidelines for Cohesion 2007-2013
(as adopted by the Commission in 2007).
The Operational Programmes
Government Decision no 759/11.07.2007 on eligibility regulations and financing within the operational
programmes.
As of 1st January 2007 Romania is eligible for EU support and financial and technical assistance from
the following European funds:
European Regional Development Fund
Cohesion Funds
European Social Funds
European Funds for Agriculture and Rural Development
European Fund for Agricultural; Guaranties
European Fund for Fishery
The above funds can be accessed through the Operational programmes that establish country
objectives and priorities, fields of intervention and actual operations as reflected in financial support
schemes, Based on the National Strategic Reference Framework (NSRF) approved by the European
Commission in July 2007 Romania obtained financing for nine Operational Programmes within which SMEs
are supported by various management authorities (Table 1), The financial support given to SMEs takes into
account their role in the economy, both by size and by type of activities, A major consideration was also
the need to make a better use of the economic potential represented by SMEs,
Table 3: Major intervention areas for SMEs in Operational Programmes
Programme
Priority axis PA
PA1 - Innovative
OP Increasing and eco-efficient
economic
production system
competitiveness
PA2
RDI
for
competitiveness
Regional
PA3 IT&C for

public and private
sectors
PA4 Developing
Main intervention area IA
Implementation
structure
IA1
Productive Ministry of SMEs,

investments
commerce
and
IA2 Access to financing
business environment
IA3 Developing a
sustainable
entrepreneurship
IA1 Research and National Authority for
partnership
with Research
and
universities,
research Innovation
institutions and companies
IA@ - Access to ITC,
especially for SMEs
IA! Support for IT use
Ministry
of
IA2 Developing e- Communication and IT
economy
IA1
Sustainable MInistry for Regional
Operational
Programme
regional and local development of BSOs at

business
regional and local levels
environment
IA2 Support for microentreprises
OP
PA3 - Increasing IA1 Promoting enterprise
Development of adaptability
of culture
Human
employees
and IA2
Training
for
Resources
entreprises
adaptability
National
PA1
Imporving 1 Supporting the creation
Programme for quality of life and of micro-entreprises
Rural
diversifying rural 2 Encouraging tourism
Development
economy
Development
Housing
and
Ministry for Work,

Social Solidarity and
Family
Ministry of Agriculture
and
Rural
DEvelopment
In dimensioning funding for SMEs their role in the economy and their development potential are
being taken into account.

The main BSOs are:
1. The National Fund for Credit Guarentee for SMEs (NFCGSME) issuing guarantees for the financing
instruments used by SMEs. The NFCGSME has a partnership with Intesa Sanpaolo Romania and working
agreements with 24 banks.
Eligibility conditions include: a maximum of 250 employees and a turnover of maximum 50 Meuro. Natural
persons and authorized family associations may also benefit of NFCGSME guarantees.
Types of guarantees:
to banks and other financing institutions
short / medium / long term credits
guarantee letters for banks
export pre/financing
lines of credit
Applicant SMEs have to address directly the banks or other partner financial institutions; if the respective
institutions consider the project as viable but lacking enough material guarantees, the NFCGSME is
requested to issue a letter of guarantee. The NFCGSME would guarantee for 80% of the total value of the
credit with a single commission of 1.75%/year. So far a number of 2,500 SMEs were issued letters of
guarantee.
The NFCGSME may conclude directly a guarantee agreement with an applicant SME. Based on the
guarantee agreement the bank would sign the credit contract with the applicant.
2. The Chamber of Commerce and Industry of Romania (CCIR) has its HQ in Bucharest and branches
in all 41 counties of Romania and in Bucharest. CCIR is the largest organisation of the business community
in Romania.
CCIR is actively supporting the business community through the services provided that include: economic
missions, professional training programmes, organizing seminars and debates, data bases with information
and business opportunities.
After Romanias accession to the EU, CCIR disseminated relevant information for companies concerning
community standards and competitiveness criteria.
The activity of the Teleorman County Chamber of Commerce and Industry and Agriculture (established as
by Law 335/2007)
Main objectives:
Promoting local economic interests in Romania and abroad.
Representing economic interests of individual and groups by: organizing commercial, cultural
events, exhibitions, preparing studies and reports, promoting and supporting local initiatives and
programmes
Organizing professional training for specific skills
Professional certification in business as by law
Providing economic and commercial information for business opportunities
Creating own data bases and information from other relevant data bases
Issuing various certificates for business development and documents for import-export activities
Counseling on SME creation, business plans, market studies etc.
CCIA Teleorman has a permanent skilled staff. Membership consists of over 2,000 companies.
From 1991 organizes the Annual National Fair for Agriculture and food Industry AGRALIMEX, several
editions of Consumer-goods Fair ALBCO, Construction and Interior Design Fair CONSALEX and the
Automobile Salon SAALEX.
CCIA Teleorman is partner of several consortia and foundations, such asTeleorman Training Center
for Foreign Trade, Development Center for SMEs - Teleorman Branch, Business School - Teleorman
Branch, etc.
CCIA Teleorman has also international partners in Kavala-Greece, in Bulgaria, Alexandria-Egipt etc.
A number of internationally financed projects had been prepared or are in progress: addressing
laid-off personnel (the World Bank), management of human resources CIGRU (Phare through the Progress
Program), EUROFEM managerial training for women, CT-ICE managerial training for foreign trade, training
of SME managers PIM-IMM (Phare).
CCIA Teleorman is publishing an official bulletin Commercial Information a highly appreciated

periodical, distributed free of charge to companies and institutions and other Chambers of Commerce.
4. CONCLUSION
The financial crisis has demonstrated how dangerous it is for cities to depend on activities which
are strongly affected by short term speculative trends or for them to get locked into traditional low
productivity sectors which are unable to withstand global competition. In fact, the EUs economic recovery
package explicitly recognizes that the future creation of long term and sustainable jobs will increasingly
depend upon the ability to mobilize the innovative and creative capacity of all its citizens. In this way, the
economic turmoil has given even more urgency to the fact that 2009 has been declared European Year of
Innovation and Creativity.
This identifies a series of functions that urban practitioners in institutions/ organizations concerned
with urban issues together with local universities can fulfill to encourage four main processes for SMEs:
creating new industries forefront science and engineering research;
aggressive
technologies licensing policies; promote/assist entrepreneurial business (incubation services, etc.); cultivate
ties between academic researchers and local entrepreneurs; creating an industry identity (participate in
standard settings, etc.);
industry transplantation (education/manpower development; responsive curricula;
technical assistance for different contractors, suppliers);
diversification of old industry into related new sectors (set-up bridges between
disconnected SMM actors; filling structural holes; creating an industrial identity) and
the upgrading of mature industry (problem solving for industry through contract research,
consulting, etc.; education/manpower development; global best practices scanning; convening foresight
exercises; convening user supplier forums).
The present project will provide a fund of experience for cities where there are supplementary
resources for SMM activities which can be put in practice by local public institutions because them sustain
long term option for the future of cities. It is necessary, at least, to follow two broad aims:
Firstly to highlight the distinctive features which are particularly relevant for policy makers,
SMM and urban practitioners in institutions/organizations concerned with urban issues;
Secondly, to identify the common elements this might become the focus for further joint
work for similar context.
For example, to attract institutions/organizations concerned with urban issues in sustaining SMEs it is
necessary:
to analyze the main problems or challenges posed each SMM and try to show how can
realize their entry point and their problems;
to provide a brief summary the main conceptual tools or models used by the public
institutions involved in urban issues which could be useful for other cities facing similar challenges;
pointing out differences, similarities and the potential for collaboration;
to show how the institutions involved in urban issues have divided their issue into different
operational sub-themes as these could become the subjects of joint articles, reports and activities;
to organize events like open days with relevance for SME- and to others institutions
involved in urban issues (possible themes: Innovating through EU cohesion policy; Knowledge Transfer:
university and industry at work in Europes regions; Financing innovation with EU funding; Innovation and
territorial cooperation; Innovation and Information Society, etc.).
SERBIA -Vojvodina
Table 1:
2004
2005
2006
2007
2008
STRUCTURE
GDP (mln Eur)*ND
3.695.815.533
GDP ( y/y)
3.510.705.654
N/A
N/A
-6.00%
N/A
N/A
1.799
1.598
N/A
N/A
N/A
Agriculture
23.04%
22.41%
N/A
N/A
N/A
Processing Industry
32.27%
27.09%
N/A
N/A
N/A
Services
30.20%
32.58%
N/A
N/A
N/A
107.2
102.6
102.8
102.8
101.9
N active companies
N/A
N/A
41602
45561
46188
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Agriculture
N/A
N/A
N/A
N/A
N/A
Industry
N/A
N/A
N/A
N/A
N/A
Services
N/A
N/A
N/A
N/A
N/A
Structure GDP (%):
EMPLOYMENT
Total employment
537.147
544.765
528.096
529.391
533343
24.14%
26.44%
27.87%
29.40%
N/A
Agricultural A (%)
7.71%
7.04%
6.61%
6.02%
N/A
Processing ind B (%)
24.97%
23.31%
22.01%
20.94%
N/A
Services C (%)
17.83%
17.82%
17.70%
17.62%
N/A
N/A
N/A
N/A
N/A
479.21
271.69
307.85
385.35
487.28
560.67

(Eur)
N/A
111.9
110.7
110.2
111.3
N/A
Unemployment (%)
18.84
19.85
17.98
19.08
14.19
Primary
N/A
N/A
N/A
41.08
28.5
N/A
N/A
N/A
55.63
61.5
N/A
N/A
N/A
3.10
10.0
FOREIGN TRADE
2,146.70
2,422.10
2,947.90
3,616.80
4,410.70
Crude oil 33
Crude oil 33
Crude oil 33
Crude oil 33
Crude oil 33
2. good category
Nature gas 34
Petroleum 33
Nature gas 34
Nature gas 34
Nature gas 34
3. good category
Petroleum 33
Nature gas 34
Olis 33
Oils 33
Machinery
parts 71
2,424.00

879.90
1,158.10
1,584.20
2,073.20
Sugar 06
Sugar 06
Sugar 06
Sugar 06
2. good category
Floor and wall

covering 63
Floor and wall

covering 63
Maize 04
3. good category
Polyethylen 57
Polyethylen 57
Floor and wall

covering 63
-1,363.70
Floor and
wall covering
63
Polyethylen
57
-1,543.60
-1,266.80
-1,264.00
Machinery
parts 71
Sugar 06
Floor and wall

covering 63
-1,986.70

1. partner (county+mln Eur)
Russia 776
Russia 1.023
Russia 1.306
Russia 1.357
Russia 1.862
2. partner
Germany 393
Germany 352
Germany 449
Germany 647
Germany 712
3. partner
Italy 334
Italy 299
Italy 368
Italy 462
Italy 464

Main FDI sectors
Manufacturing; Wholesale and retail trade, repair; Agriculture, hunting and forestry
Sector B
N/A
23,079,396
31,392,881
44,971,245
50,386,543
Sector C
N/A
7,051,638
19,332,185
19,730,755
19,789,781
N/A
4,977,127
10,657,858
9,353,277
18,839,136
Due to different structure of statistics data, as well as lack of required data on the regional level,
this picture is lacking basic data needed for the analysis. Some additional data as required by this form,
exist only at National level, while on the level of Vojvodina we have presented those of them that exist,
mainly describing general employment and unemployment, while generation of income and sectoral
presentation were not possible due to unavailable official data. NUTS categorization will be implemented in
statistics in Serbia from 2010, so only after the period required to be analyzed we will have official
statistical data on indicators that have been presented in this form.
What was obvious, is the positive trend in Vojvodina related to income generation, employment
and increase of gross wages, while unemployment was permanently decreasing throughout 2004-2008.
Foreign trade, both import and export were substantially increasing, where foreign trade balance was
throughout the period negative and increasing. Namely, import of goods was twice as high as the exports,
so there is a strong imbalance of foreign trade in Vojvodina. In the structure of imports dominated import
of materials to be processes or transformed in the country. This import was at the level of of total
imports. On the other hand imports of assets and consumers goods were approximately at the same level
(between 11 and 13 % of total imports), where the distribution of data throughout the period was volatile.
In exports materials for processing or transformation were at the level of 2/3 of the export, where
consumers goods participated at the level of and assets participated in total export on the level between
5 and 7 %. If we analyze concrete products, then we can see that in imports dominate oil, natural gas and
parts for machines 8501 and 8502, while in exports dominate sugar, material for floor covering and
polyethylene with density more than 0.94. As far as countries of main foreign trade activities of Vojvodina
are concerned these are Russian Federation, Germany and Italy on import side, and Bosnia Herzegovina,
Italy and Germany on export side.
Main sources of data related to these indicators we have found in National Statistics, National
Institute for Development and Regional Chamber of Commerce and Industry of Vojvodina.
The problem is that regional planning program for Vojvodina is at the moment obsolete, while new one is
not prepared yet.
Basic Data
Surface: 21,506 km.
RESIDENT POPULATION AND DENSITY

AREAS
VOJVODINA
R. OF SERBIA
ROADS on the Territory of
nr
1 Vojvodina
2 Serbia
1991
2013889
7822795
2002
2031992
7498001
Population per km
94
85
Magistral roads im km Regional

Roads in km
Local roads in km
total contemporary total
contemporary
total contemporary
1563
1533
1797
1760 2697
1928
4756
4603
10401
8818 22824
10288
1.2 Main sectors

Agriculture
2006
2007
2008
459
434
440
N/A
N/A
N/A
N/A
N/A
N/A
Output volume (y/y)
N/A
N/A
N/A
Employment (n)
157.000
134.000
163.922
N/A
N/A
N/A
N/A
N/A
N/A
Productivity (y/y)
N/A
N/A
N/A
N/A
N/A
N/A
Import (mln Eur)
66.652.619
80.508.405
106.586.872
1.
Country; value
Country; value
Country; value
2.
Country; value
Country; value
Country; value
3.
Country; value
Country; value
Country; value
107.471.439
120.343.359
103.978.480
1.
Country; value (mln Eur)
Country; value
Country; value
2.
Country; value
Country; value
Country; value
3.
Country; value
Country; value
Country; value
N/A
N/A
N/A
N/A
N/A
N/A
Export (mln Eur)

Processing industry
2006
2007
2008
N/A
4563
N/A
N/A
N/A
N/A
N/A
8.065.483.006
N/A
Output volume (y/y)
N/A
N/A
Employment (n)
N/A
122.946
N/A
N/A
N/A
N/A
N/A
N/A
Productivity (y/y)
N/A
N/A
N/A
N/A
N/A
N/A
Import (mln Eur)
N/A
N/A
N/A
1.
Country; value
Country; value
Country; value
2.
Country; value
Country; value
Country; value
3.
Country; value
Country; value
Country; value
1.
Country; value
Country; value
2.
Country; value
Country; value
Country; value
3.
Country; value
Country; value
Country; value
N/A
N/A
N/A
N/A
N/A
N/A
Export (mln Eur)

Services
2006
2007
2008
N/A
13.369
N/A
N/A
N/A
N/A
N/A
7.658.047.649
N/A
Output volume (y/y)
N/A
N/A
N/A
Employment (n)
94.843
N/A
N/A
N/A
N/A
N/A
N/A
Productivity (y/y)
N/A
N/A
N/A
N/A
N/A
N/A
Import (mln Eur)
N/A
N/A
N/A
1.
Country; value
Country; value
Country; value
2.
Country; value
Country; value
Country; value
3.
Country; value
Country; value
Country; value
N/A
N/A
N/A
1.
Country; value
Country; value
2.
Country; value
Country; value
Country; value
3.
Country; value
Country; value
Country; value
N/A
N/A
N/A
N/A
N/A
N/A
Export (mln Eur)

As for the main sectors we could identify on the regional level agriculture, industry and services
sector. However, certain data which could be collected on regional level of Vojvodina do not allow to form
any comprehensive comments.
Agriculture is based in the first line on grain production, while animal husbandry, vegetable and
fruit production, as well as industrial plants production are in the smaller scale. The trend of production in
grain production is volatile, strongly depending on weather conditions, as irrigation is not introduced to this
sector adequately. There is small number of companies being active in this field, while farms are rather
small and active with more that one activity. There are very few large producers. Animal husbandry is
during the late period in crisis and the livestock is also volatile. Vegetable and fruit production are lately
supported through various programs to be developed in more intensive way, where they still have not
reached the potentials they have in the region, having in minds soils and climate conditions.
Based on expert assessments, it can be said that related to the processing industry the most
developed sub-sectors are food processing industry, chemical industry, as well as metal processing
industries. In Vojvodina food processing industry is the most developed part of industry. In Vojvodina all of
its industry basically has been developed on income generation from agriculture. Initial industry was
oriented to food production. As having in its surrounding developed agriculture, this industry has been
developed across the diversity of sub-sectors of agriculture: bakery and pastry based on grain production,
diary based on cattle breeding, meat processing industry based on poultry and cattle breeding, leather and
clothing industry based on cattle breeding, juices based on fruit production, wines based on grapes
production, etc. Chemical Industry initially has been developed as for the needs in agriculture (fertilizers,
ingredients for protection of plants), where later by more intensive exploitation of oil and natural gas are
developed oil refineries and processing of the by-products. On the other hand, metal processing has
developed based on earlier handicrafts and needs for products. Here we include equipment (for agriculture
and other), tool and machines produced of metal. These industries were developed in Vojvodina based on
primary processed metals in other parts of Serbia and needs of developed industrial enterprises and
agriculture in Vojvodina.
In sector of services, beside the trade which is the most developed part of this sector, lively are subsectors of financial services, tourism and logistics (transportation, stocking and forwarding). This sector is
the one having relatively stable growth in Vojvodina, where logistics trend is dependant on the trends of
development of industry and agriculture.
Related to the emerging sectors in Vojvodina, it can be mentioned sectors of IT (development of

software), project development and implementation services (related to future EU programs), engineering
(for the assembly, monitoring or follow up of construction and other investment works that will occur in
future in the region) and certain segments of fruit and vegetable production in particular in green houses.
In addition, the sector related to renewable energies (based on biomass and biogas) can also be expected
to be substantially more developed in the coming period. In the sector of services, in addition can be
expected substantial strengthening of the tourism sector, in particular part that relates to health tourism,
eco-tourism and congress tourism.
Driving factors of this development are University of Novi Sad, in particularly Faculty of Technical
Sciences and Faculty of Technology. In addition, it is a presence of few foreign investors that are interested
for the development of renewable energies (power generators for windmills production, or production of
biogas for example). Incubators that have been formed in Novi Sad, Subotica and Zrenjanin are also
supporting such developments, as well as developmental agencies currently existing in Novi Sad, Zrenjanin,
Subotica and Sombor.
Currently formed industrial, technological, or free zones: Novi Sad, Subotica, Zrenjanin, Indjija, Apatin,

Government of the Autonomous Province of Vojvodina, organized in its 17 Secretariats disposes

with the main infrastructure for regional development of Vojvodina. Beside, it is a founder of various
developmental institutions, such as Fund for Development of AP Vojvodina, Vojvodina Investment
Promotion (VIP), Guarantee Fund of Vojvodina and Vojvodina CESS (Strategic Economic Centre). There are
also Development agencies on a NUTS III level, as well as SME development agencies in Novi Sad, Zrenjanin,
Subotica and Sombor, covering the territory of Vojvodina through common projects. On the level of
Vojvodina there is also KEP, Office for European Integration.

On national level are brought all the laws that regulate regional development.
On national level in the period analysed was active National Agency for SMEE Development, having
various programs of support and promotion of SMEE. These programs consisted of organization of technical
assistance to SMEE (training, advising, mentoring), their promotion, organization of fairs. On the other hand
it supported start up, organizing a number of trainings and helping preparation and submission of
applications for start up loans, which have been rendered by the national Fund for Development. In
addition, SIEPA, National agency for Investments and Export Promotion has also organized various
developmental activities. Various Ministries, including Ministry for Economy and Regional Development, as
well as Ministry of Agriculture, have implemented a set of programs supporting clustering of SME,
Entrepreneurs and Farmers, rendering of loans under favourable conditions and supporting organization of
regional and local offices for technical support to SME development.
On the level of Vojvodina, Fund for Development of Vojvodina has each year organized a number of
calls for selection of developmental projects proposed by SME that are to get loans under beneficial
conditions. Similarly, Provincial Secretariat for Labour, Employment and Equality of Sexes has supported
various programs of technical support to start ups, particularly related to youth, female or marginalized
groups. On the other hand Guarantee Fund of Vojvodina had numerous programs related to support to
start ups, as well s such SME that have good business idea, but not sufficient collateral to get a loan under
commercial conditions, to have access to loans for start up or further development of their business.
Provincial Secretariat for Economy has implemented a number of project supporting SME
development, in support to their technical restructuring, clustering and associating SME and entrepreneurs
by sector or value chain criteria, development of quality control systems, etc.
Vojvodina CESS Strategic Economic Centre has helped numerous municipalities to develop
Strategic plan for their Socio Economic development, that included a list of measures to be undertaken in
order to promote the development of SME, attract investments from abroad, resolve infrastructural
problems that will help overall economic development and SME development on their territories.
Vojvodina Investment Promotion Agency has elaborated promotion programs of Vojvodina and its
Economy, database of interest for investors as well as has undertaken numerous promotions and support
to internationalization of SME from Vojvodina (export promotion, organized visit to foreign fairs, etc).
Regional Development Agencies and SME Development Agencies have undertaken numerous
trainings of SME and for start ups, mentoring and/or advising for SME and entrepreneurs/farmers in order
to enhance their capacities and increase their competitiveness on the market, implemented various EU or
domestically funded projects in support to SME development (enhancement of surrounding infrastructure,
development of Business Incubators, Industrial Parks, Free Zones etc).
A number of Business Incubators has been founded, each of them implementing particular program
of support to their tenants.
As far as gaps and weaknesses of the system, they are related to the fragmentation of initiatives
and lack of integration of activities of various bodies implementing particular programs and projects.
Networking of institutions is insufficient. Also there is not sufficiently stressed the needed for support to
rural development initiatives, where in rural parts of the region the situation is the most difficult.
EU assistance to the region of Vojvodina has occurred through support to various national
programs of development. Through support to National SMEE Development agency it has implemented a
number of programs that directly had supported SME (like EDEP program, TAM, BAS, etc), or through
support to regional development strategies and institutions (RSEDP, RSEDP2), or through support on local,
municipality level (Exchange program, LED, etc).
Related to allocation of assets, the funds were on the national level, where National Ministry of
Finance is coordinating body. The assets are from there transferred to users.
Vojvodina itself has programs which are mostly oriented towards cooperation with particular
regions within EU. Among them Vojvodina has for example agreement with Italian region Friuli, Venezia,
Giulia or Austrian region of Styria.
Vojvodina had developed IRDP plan in 2002 and implemented throughout the period. The
Integrated Regional Development Plan of Vojvodina (IRDP) is a joint project of the AP of Vojvodina
Executive Council and the German Agencies GTZ und CIM. The IRDP is a multi-sectoral action plan with the
main aim of supporting the socio-economic development process of the AP of Vojvodina by stimulation of
for this process significant segments through different integrated measures. Its particular programs were
supported by various EU and EU member state programs (Support to New Technologies Transfer Scheme,
to activities of CESS, VIP, Business Standardization and Certification, Labour Costs Subvention Scheme, and
other). Programs of Friuli Venezia Giulia Region organized best practices transfer events, matching
Vojvodina entrepreneurs with Italian, like matching with Confindustria, or Vojvodina associations with
Italian clusters, etc).
The main topics of the economic development in Vojvodina relate to introduction of new forms of
organization of business, of new technologies, skills and programs how to approach new parkets, how to
develop regional and local development strategies and plans, how to set up cooperation with EU regions
and transfer/receive best practices related to the matter.
There are no particular plans of EU assistance for brown-field restructuring in Vojvodina.

Table 3
BSO Name Business Incubator Subotica
Address
Magnetna polja 6, Subotica
E-mail
office@bis-su.rs
Legal Status
LIMITED LIABILITY COMPANY
Years of activity
2006
Fields of activity
Support of SMEE. Providing technical, business and educational services to

their tenants offers a favorable business environment for their growth and
development.
N. of employees
Advising, training, accounting, PR
Direct
Beneficiaries
of
BSOs
Start up SME in the region of Subotica
activities
- provision of office space under stimulatory conditions

- Undertaking activities aimed at securing resources / production equipment
for tenants for the purpose of performing its activities
- Organizing the system of planning, monitoring and development of tenants,
as well as performance measurement and reporting system for tenants BIS
- Providing assistance in the preparation of technical and other
documentation necessary for obtaining a certificate
- Administrative and technical services (receiving and sending mail, copying
services, etc.).
- Providing advisory services in finance, law and tax policy
- Subsidize the cost of services accounting
- Organizing trade shows in the country and abroad
- Organization of training and education (business planning, marketing,
market research, etc.).

- Services use audio visual equipment, conference rooms, transportation
services
- Representation of tenants on the web portal BIS
-provision of office space under stimulatory conditions
ups
- Undertaking activities aimed at securing resources / production equipment

for tenants for the purpose of performing its activities
- Organizing the system of planning, monitoring and development of tenants,
as well as performance measurement and reporting system for tenants BIS
- Providing assistance in the preparation of technical and other
documentation necessary for obtaining a certificate
- Administrative and technical services (receiving and sending mail, copying
services, etc.).
- Providing advisory services in finance, law and tax policy
- Subsidize the cost of services accounting
- Organizing trade shows in the country and abroad
- Organization of training and education (business planning, marketing,
market research, etc.).
- Services use audio visual equipment, conference rooms, transportation
services
- Representation of tenants on the web portal BIS
Sources of funding
Province of Vojvodina, City of Subotica
4. CONCLUSION
This analysis shows that data in Serbia are not recorded and systematized in a way that it is possible
to fill the above Form. What was possible to conclude is the following:
Environment for economic-entrepreneurial context in Vojvodina shows for the period 2004-2008
slight increase of economic activities, stagnation of employment, and decrease of unemployment.
Industrial production shows growth, while import and export of goods were steadily growing, though
showing strong imbalance in favour of imports. Percentage of employment in SME sector was growing
throughout the period, while SME employment in agriculture and industry was decreasing, and in services
sector slightly increasing. Main trade partners in imports are Russia, Germany and Italy, while for exports
Bosnia Herzegovina, Germany and Italy. Both in imports and exports are dominating materials for
processing, while equipment and consumers goods are varying, from 25 % (export of consumers goods) to
between 11 and 13 % (import of consumers goods and equipment/assets) and 5-7 % (import of
equipment/assets).
It is not possible to draw reliable conclusions from so limited data, however it can be seen very slow
recovery of economic activities in Vojvodina throughout the period, which was in addition characterized by
transition and privatization process.
We do not dispose with data for 2009, but it can be expected strong drawback of economic
activities to be registered for that year.
Any sectoral conclusions would be difficult to draw. From experience it can just be mentioned that
during the analysed period agriculture production is volatile, industry in slow recovery, while services
sector shows more positive dynamics.
As far as the existence of regional institutions for the support to economic development is
concerned, it can be stated that they have been developed, throughout the needed aspects of economic
development. However, there were not at disposition parameters to evaluate economic impact or results
of their activities.
There are regional development plans, particular programs and projects implemented that
contribute to regional economic development and measures are introduced that should foster the
development of key sectors and programs, that have been identified with the plan.
Both EU institutions and programs supporting pre-accession efforts in Vojvodina are visible, as well
as efforts of the Government of Vojvodina, its developmental institutions and agencies, as well as National
developmental institutions being active within Vojvodina region. Still remains questionable how these
efforts were mutually accorded and exerted synergy effects.
CROATIA - Osijek-Baranja County

General overview about:

Table 1.1.1:
2004
2005
2006
2007
2008
STRUCTURE
GDP (mil Euro)
1.884
1.999
2.193
N/P
N/P
10,17%
6,10%
9,70%
N/P
N/P
5.750
6.127
6.757
N/P
N/P
Agriculture
16,5
14,9
14,5
N/P
N/P
Industry
17,5
16,0
14,1
N/P
N/P
Services
66,0
69,1
71,4
N/P
N/P
8,10%
5,00%
4,00%
9,30%
-0,90%
N active companies
3.126
3.225
3.315
3.535
3.326
2.568
3.071
3.233
3.576
3.852
46
41
58
59
58
Agriculture
13,26
12,71
10,21
9,00
N/P
Industry
28,83
30,85
34,38
33,55
N/P
Services
57,91
56,43
55,40
57,46
N/P
GDP ( y/y)
Structure GDP (%):

EMPLOYMENT
86.584
88.514
91.115
96.246
97.782
N/P
N/P
N/P
N/P
N/P
Sector A (%)
6,2%
6,3%
5,9%
5,7%
N/P
Sector B (%)
25,1%
25,3%
24,5%
25,1%
N/P
Sector C (%)
68,7%
68,4%
69,6%
69,2%
N/P
12.600
14.067
14.500
15.000
15.767
681
727
768
827
N/P
N/P
N/P
N/P
N/P
N/P
N/P
N/P
N/P
N/P
N/P
27,50%
26,10%
26,60%
21,90%
21,00%
Unemployment (%)

Primary
29,60%
30,20%
31,70%
32,70%
33,60%
66,10%
65,40%
63,60%
62,50%
61,30%
4,30%
4,40%
4,70%
4,80%
5,10%
388
408
440
FOREIGN TRADE
2. good category
3. good category
270
349
71 Power-
71 Power-
71 Power-
71 Power-
71 Power-
generating
generating
generating
generating
generating
machinery and
machinery and
machinery and
machinery and
machinery and
equipment
equipment
equipment
equipment
equipment
77 Electrical
77 Electrical
06 sugar
78 Road vehicles
78 Road vehicles
machinery and
machinery and
apparatus
apparatus
78 Road
58 plastics in non
77 Electrical
58 plastics in non
77 Electrical
vehicles
primary forms
machinery and
primary forms
machinery and
apparatus

2. good category
360
84 clothes
430
84 clothes
64 paper,
71 Power-
paperboard
generating
apparatus
459
84 clothes
06 sugar
417
388
71 Power-
71 Power-
generating
generating
machinery and
machinery and
equipment
equipment
64 paper,
64 paper,
paperboard
paperboard
06 sugar
06 sugar
machinery and
equipment
3. good category
71 Power-
64 paper,
71 Power-
generating
paperboard
generating
machinery and
machinery and
equipment
equipment
91
81
72
-52

1. partner (county + mil Euro)
Italy 220
Italy 219
Italy193
Germany 145
Germany 169
2. partner
Germany 86
Germany 103
Germany 117
Italy 120
Italy 83
3. partner
B i H 48
B i H 63
B i H 61
B i H 82
B i H 77
FDI inflow (mil Euro)
39
52
35
124
N/P
N/P
N/P
N/P
N/P
N/P
Sector B
N/P
N/P
N/P
N/P
N/P
Sector C
N/P
N/P
N/P
N/P
N/P
Main FDI sectors
B i H = Bosnia and Herzegovina
Osijek-Baranja County as a unit of local self administration is a part of governing territorial structure
Republic of Croatia established in 1993. It is located in north-east part of Republic of Croatia in Pannonian
Basin with the total area of 4.155 km. This makes for 7,3% of the total area of the Republic of Croatia. Its
geography is predominantly suitable for development of agriculture and related industries.
County is located on a crossroads of major routes of European continent. Traffic and geo strategic
location of Osijek-Baranja County is established by Drava and Danube corridor, and while Danube corridor
barely touches the county border, it still remains significant part of its traffic flow. Development of Danube
and Drava corridors and eastern urban areas is recognized as particularly significant for even development
of Croatia by the Strategy of the territorial constitution of Croatia.
Development of infrastructure is much needed assumption for achieving the sustainable economic
development and for concurrent welfare of the county. There is about 1.700 km of roads and 269 km of
railways in the county. Rivers Danube and Drava (navigable to Donji Miholjac), with its status of
international waterway to Osijek (Osijek and Klisa) have great potential for further development. County is
also connected with a network of Croatian and European airports. Osijek is a part of European traffic
corridor V/c which connects north of Europe (Baltic) with its south (Adriatic Sea). The plans for building the
trans-European highway (in terms of TEM project) Budapest-Osijek-Sarajevo-Ploe are under way. This level
of infrastructural network facilitates the opportunities for sustainable economic development of OsijekBaranja County.
The 2001 census data shows that the county has 7,4% of the total Croatians population (330.506
residents), and is third among Croatian counties by the number of households (113.583). However, its
share in total GDP of Croatia is disproportionate with its geographic size and population, and with its
development potential based on the available natural resources. Osijek-Baranja County is ranked only 13th
among all counties by the GDP per capita (data from 2006) with 77% of the national GDP per capita
average. Osijek-Baranja County has generated the GDP of 2.193 million EUR which equals 6.757 EUR per
capita.
Economic activity of the County is presented by 9.375 business subjects (as of 31/12/2007), which
makes for 3,7% of registered business entities in Croatia. Biggest number of companies in County is
registered for other social and personal services (3.308) and trade (2.381), followed by businesses in real
estate (782), processing industry (714), construction (578), and agriculture, hunting and forestry (367).
However, only 37,7% of these businesses are living businesses, i.e. those who are conducting any kind of
business activity. The Financial Agency received 3.535 statistical reports from business entities about their
business activity in 2007. Share of living businesses of the County in the total of living businesses in
Croatia in 2007 was 4,2%.
Legal entities in Osijek-Baranja County generated the total revenue between 3 and 4 billion EUR
over the 2004-2008 period. In the observed period the total revenue grew by an average annual rate of
10,7% meaning that the revenue for 2008 is over 50% higher than in 2004.
Total revenues of 2.568 million euro in 2004 in Osijek-Baranja County were generated by the total
of 86.584 employees, while the 3.852 million euro in 2008 was achieved by 97.782 employees.
The revenues generated by small and medium-sized enterprises increased their share in the total revenues
from 45,9% in 2004 to 58,5% in 2008.
Small and medium sized businesses dominate the County business structure. The share of small and
medium-sized businesses in the total number of living businesses was around 99% on average over the
last 10 years. Such economic structure matches Croatian business structure with regard to size and
structure of businesses and is especially suitable for dynamic economic growth. Namely, experiences in
developed countries show that small and medium businesses play the most important role in new jobs and
added value creation. However, the majority of these businesses are yet to achieve this desirable role in
Osijek-Baranja County.
The tertiary sector industries have created 71% of the total gross value added (GVA) in the county
in 2006. The primary and secondary sectors have an approximately equal share in the county GVA, around
14%.
The rate of growth in industrial manufacturing in 2004-2008 period in Osijek-Baranja County was
slightly higher than the average growth rate in Republic of Croatia, however it started on a much lower
level after the war due to the damages all industries suffered. Current growth is still not sufficient for the
industrial manufacturing to reach the pre-war levels. Osijek-Baranja County industrial manufacturing in
2008 was at 80% of the 1990 figures, while the average industrial manufacturing of the Republic of Croatia
as a whole in 2008 reached 90% of its pre-war figures. In 2008 Osijek-Baranja County, after growing steadily
between 5 and 10%, recorded a sudden drop of 1% as a result of the incoming global economic crisis.
Watching the County international goods exchange in the last ten years (1999-2008) it is apparent
continues growth of import, while the exports grew until the year 2006, when it started to stagnate in the
past two years and fell behind the import. If the year 1999 is taken as the base year the exports in 2008
were3,9 times larger, with imports at 3,8 times larger than in base year. In the 2000-2003 period, the
county exports grew faster than imports. During the 2002-2007 period, the County recorded positive
foreign trade balance before going negative in 2008. The county share of the total goods exchange in the
Republic of Croatia in 2008 was at 2,7%, a drop from 3,0% share in 2007. EU countries in participated in the
County total goods exchange in 2008 with 68,3% (in 2007 the share was 71,4%), with CEFTA countries
(Albania, Bosnia and Herzegovina, Moldavia, Montenegro, Serbia and Macedonia) participating with 18,8%
(18,4% in 2007). The remaining 12,9% refer to EFTA member countries and other developed and developing
countries.
Osijek-Baranja County at the beginning of new millennium is faced with several significant
macroeconomic challenges which make its economic performance especially adverse, with high
unemployment rate and low purchasing power of residents standing out ad the most obvious ones. The
unemployment rate has decreased slowly over the last five years, however it is still over 20%. In 2008 the
unemployment rate in the County was an 20,7% - significantly higher that the Croatian average of 12,8%.
The low purchasing power of residents is insufficient to absorb the increase in production. Average net
monthly salary per employee is also lower than Croatian average, and this indicator is getting worse over
time. In 2000, the average net monthly salary in the County was 10% lower than the country average, and
the discrepancy was even higher in 2007, with County net salary being 15% lower than the national
average.
Foreign direct investments in Osijek-Baranja County were around 296 million EUR in the 1993-2007
period, making for only 1,68% of the total FDI in the Republic of Croatia. Observed by sectors, foreign
capital has shown most interest in financial intermediaries except insurance corporations and pension funds
(subsector S.123 by the EU classification of financial institutions by subsectors) which covers 70% of FDI in
observed period. Trade comes in the second place with the 10% share of the total. These two sectors
combined for 80% of foreign direct investments in Croatia.
War damages from the Homeland war still represent a big challenge for the County development. This in
particular applies to the problem of suspected hazardous areas (SHA) which hold back economic activity,
especially in agriculture.
The total size of suspected hazardous areas in the Republic of Croatia (as of 31/12/2008) is 954,5
km, which is 1,69% of the total area of the country.
The counties of Lika-Senj, Osijek-Baranja, Sisak-Moslavina, Karlovac, Vukovar-Syrmium, Zadar and
Poega-Slavonia suffer from significant landmine pollution. The largest part of SHA in Croatia are forests
with 557,8 km (58,4% of total SHA), followed by agricultural areas with 269,2km (28,2% of the total SHA).
SHAs cover 2,4% of the fields in counties with MSA, or 1,3% of the total field surface in Croatia.
The biggest number of mines is registered in Osijek-Baranja County (30.008 mines).
Possibilities for economic development and improvement of life quality in the Osijek-Baranja
County are based on the natural resources, clean environment, relatively unpolluted soil, the abundance of
waterways, moderate climate which enables rich plant and animal life, good geographic location, good
infrastructure and, always important, good human resources. The County economic development is based
on agriculture, food industry, trades, crafts, transportation, tourism and other industries.
1.2 Main sectors

a) Agriculture
Table 1.2.1: Agriculture
2006
2007
2008
223
245
178
SME share (% of total)
N/P
N/P
N/P
Total turnover (mln EUR)
312
330
470
105,8%
142,5%
4.310
4.181
3.749
Av. gross wage (EUR)
691
811
890
Unit labour cost (EUR)
Productivity (y/y)
N/P
N/P
N/P
Value added per employee (EUR)
N/P
N/P
N/P
Imports (mln EUR)
21
23
26
1.
N/P
N/P
N/P
2.
N/P
N/P
N/P
3.
N/P
N/P
N/P
1.
N/P (mil Euro)
N/P
N/P
2.
N/P
N/P
N/P
3.
N/P
N/P
N/P
Trade balance (mln EUR)
-18
-21
-22
Output volume (y/y)

Employment (n)
Exports (mln EUR)

FDI in the sector (cumulative in mln
EUR)
According to the opinions of respondents, agriculture is a sector expected to develop the most in
Osijek-Baranja County. Although this sector is currently decreasing its share in the GDP of the county, this
sector has the largest share in the total Croatian agriculture, making it the most significant county sector on
the national level. While the overall Osijek-Baranja County economy has a 5%-6% share in the total gross
added value in Croatia, agriculture, hunting, forestry and fishing have a 13% share in their respective
sector.
Republic of Croatias agriculture is in a process of agrarian reform to the common agricultural policy
model of the European Union, which is reflected in the implementation of the various individual sectors
such as agriculture and food industry.
Osijek-Baranja County geography provides rich and quality natural resources- fertile fields, good
climate and an abundance of water resources. Value of the agriculture comes not only from the traditional
role of providing food resources for the people, but also from its role in the preservation of rural areas,
maintaining ecological balance and keeping the traditional values, material and spiritual culture of Croatian
villages.
The fields of chernozemic soil with very high natural fertility spread across the most of the eastern
parts of Slavonia and Baranja; in central and western parts, between Sava and Drava rivers, the pseudo-clay
soil is predominant; while the washed up soil and alluvial soil deposits of the Sava, Drava and Danube can
be found mostly in the hilly and the mountain parts of the region.
Moderate continental climate is typical for Slavonia region, and its impact increases from west to
east. The summer temperature average increases and the average rainfall decreases in the same direction.
Annual rainfall (650 to 950mm) is lower than in the other regions. Flat and alluvial plains are mostly found
in the eastern lowlands, while hills with slopes dotted with river and stream valleys rise in the western part
of Slavonia.
There is a large number of small agricultural estates located near the cities of Osijek, Beli Manastir,
Naice, Belide etc. This suburban agriculture is orientated to farming operations, capital-intensive cultures,
and livestock farming. On the other hand, a relatively small number of estates managed to enlarge their
family farms in the privatization process so the average size of their farms (with over 20 ha) is 42 ha.
Otherwise, the average size of all the farms is 2,3 hectares which is slightly higher than the average for the
Republic of Croatia - 1,9 ha.
Arable land and gardens make for 95,1% of the total county agricultural area (201.705 hectares),
followed by orchards with 1,7% (3.564 ha), meadows with 1,2% (2.641 ha), vineyards with 1% (2.083 ha)
and pastures with 0,8% (1.763 ha).
Out of 212.013 ha of total agricultural area in the county, 141.440 ha are privately owned.
Vegetable production in the county area represents one of the most intensive areas of agricultural
production in the Republic of Croatia. The county accounts for 17,4% of the total agricultural area and
23,3% of the total arable lands and gardens area in the Republic of Croatia. According to December 2008
data from the County in Figures publication, the county has 201.705 ha of arable lands and gardens out of
which 199.358 ha was sown in 2007.
The sowing structure shows the predominance of grains which are sown on 67% of the total area,
with oil plants sown on 14% of the area, forage crops on 10%, sugar beets on 7%, tobacco on 0,1%,
vegetables on 1%, and flowers and aromatic herbs on 0,9%.
The main challenges for efficient livestock production lie in the insufficient usage of existing
livestock capacity, slow reconstruction of the livestock fund, the damages caused during the Homeland
War, fragmentation of family farms and uncontrolled food imports. Further reduction of livestock fund,
combined with all these factors, caused extreme market deficiencies that in turn caused the cattle food
prices to soar.
b) Food and beverages

Table 1.2.2.: Food and beverages
2006
2007
2008
75
93
79
N/P
N/P
N/P
353
354
361
100,3%
102,0%
4.755
5.136
4.210
812
852
865
Productivity (y/y)
N/P
N/P
N/P
N/P
N/P
N/P
67
41
46
1.
N/P
N/P
N/P
2.
N/P
N/P
N/P
3.
N/P
N/P
N/P
118
90
62
1.
N/P (mil Euro)
N/P
N/P
2.
N/P
N/P
N/P
3.
N/P
N/P
N/P
51
49
16
Output volume (y/y)

Employment (n)
Import (mln EUR)

Export (mln EUR)


EUR)
Food and beverage production is an important industry for every country. In the Republic of Croatia
most profitable industries in this sector are: tobacco production and processing, beer production,
processing milk, processing tea, coffee and production of soft drinks.
The County agriculture is an important source of raw materials for food industry because of its
natural potentials. The significant shares of total Croatian production of many cultures are grown on its
212.013 hectares of agricultural areas 36,5% of wheat, 38,9% of sugar beet, 54,8% sunflower, 31,5% of
soybean and 18,1% of the total corn production of the Republic of Croatia comes from Osijek-Baranja
County.
This natural potential is not matched by the adequately developed processing industry. Due to late
reparation of war damages and finalization of privatization, a significant market share was lost which in
turn caused the drop in the manufacturing capacities, and the lack of sufficient funding opportunities
meant that little investments were made and the manufacturing and processing technology was/is
outdated.
There were 79 companies operating in the food and beverage production in the County, employing
the total of 4.210 persons.
Among many agricultural businesses in the county territory, there are three large agro-industrial
complexes that clearly stand out - IPK Osijek, Belje and PPK Valpovo (joint stock companies), all with
traditionally widely recognized products in food industry. In addition to some other well-known companies
in the region, such as Pivovara Osijek, IPK Kandit, Sugar factory Osijek, Oil factory epin, MIA Osijek, some
very successful smaller agricultural companies emerged in recent times, some of those being PZ Osatina,
Novi Berak Ltd, Osilovac Ltd. and Palok Ltd Osijek.
Small private manufacturing businesses in bread and pasta production are emerging, taking
advantage of their better productivity, wide product range and importing pasta products from well-known
Italian manufacturers.
Kandit Premijer d.o.o. Osijek is the biggest sugar factory in Republic of Croatia with the production
capacity of 65.000 tons of sugar, 27.500 tons of molasses and 27.500 tons of dry beet noodles.
epin edible oil factory is the most significant edible oil production factory in the Republic of Croatia, with
significant investments being made in the modernization of its facilities. Its processing capacity is
500tons/24hours (press) with the annual processing capacity of 150.000 tons of oil plants (sunflower,
soybean)
There are nine industrial fodder production plants and fodder mixing plants with total annual
production capacity of 270.000 tons operating in the county. Looking back on the last few years, the
decrease in the total fodder production was caused by low purchasing power of buyers and volatile
livestock market due to imports of cheaper meet and cheaper livestock which in turn caused the decrease
in the total domestically grown livestock numbers.
County area has a diverse manufacturing industry with a number of businesses operating in meat
processing, dairy production, production of wine and beer, fruit and vegetable processing, confectionery
industry and more.
In addition to agricultural manufacture there has been an increase in organic food production. The
project of branding the high quality and healthy homemade products of Osijek-Baranja County aims to
promote the existing and new agricultural products in this, traditionally agricultural county.
Food and beverage production has a positive balance in foreign trade. The liberalization of markets
and low level of control of imports of highly subsidized products of neighbouring countries make the sales
efforts and the launch of new products in the domestic markets more challenging for local businesses.
In addressing the agricultural products sales challenges, it is necessary to strengthen and connect
agricultural businesses with businesses in tourism industry, with the goal of enriching the tourist products
offered and create new market opportunities for businesses in both industries.
b) Trade
Table 1.2.3: Trade
2006
2007
2008
1.235
1.288
1.152
1.222
1.346
1.309
110,1%
97,3%
9.223
9.609
8.206
663
702
775
Productivity (y/y)
N/P
N/P
N/P
N/P
N/P
N/P
Import (mln EUR)
121
146
156
1.
N/P
N/P
N/P
2.
N/P
N/P
N/P
3.
N/P
N/P
N/P
28
57
50
1.
N/P (mil Euro)
N/P
N/P
2.
N/P
N/P
N/P
3.
N/P
N/P
N/P
-92
-90
-106

Output volume (y/y)
Employment (n)
Export (mln EUR)


EUR)
Croatian retail is a very fragmented market, which is reflected in the predominance of small retail
shops, with less than 100m2. Even so, large retail stores are rapidly increasing their market share due to
their focus on meeting the needs of the people who are experiencing changes in lifestyle. Latest
development trend is leaning to construction of modern shopping malls which provide a variety of
shopping benefits and fun activities under the same roof so they are increasingly becoming the places of
choice for socializing. According to estimates of Sector for trade of Croatian Chamber of Economy, in the
last fifteen years in Croatia over 2.000.000km2 of retail space was built in Croatia. The building of this retail
capacity in Croatia is a process that has until now been mostly concentrated around large format stores in
major cities (Zagreb, Split, Rijeka, Zadar and Osijek).
The main characteristics of Croatian retail market are concentration, internalization and
consolidation. The total share of top ten retailers six years ago was around 16,6%, and in 2008 only 15 top
retailers held 71,4% of the market. However, it should be noted that the concentration trends are not
specific to Croatia, since the same trends are taking place in most European countries were top ten retailers
hold up 60 to 80, and even 90% of the market.
FINA information on results of business activity for 2007 show that in 36,43% of the Osijek-Baranja
County businesses are in retail. At the same time, the share of County retailers in the total number of
Croatian retail businesses is 4,8%.
The most popular national retail chains in the County are: Konzum, CBA (owner of the local retail
chain Biljemerkant), Getro, Billa, Kaufland, Fliba Ltd Emmezeta, Hipermarket COOP Ipercoop Osijek,
Mercator, Lidl, Metro, Interspar and Plodine. In addition to these retail store chains, there are also
recognizable do-it-yourself type centres, such as Baumax and Brodomerkur. Furthermore, in the over
1000m2 of store area segment, there are Euroshop, Gorenje, Doma namjetaj, Clinber, Lesnina, Mijokmagazin, Rekord, Slavonijatekstil, Konikom, Podravina and others.
The following data shows clearly just how well the trade industry is developed and represented in
the County economy it participates with 37,7% of the total County revenues, 27,2% of profits, 27% of the
corporate income tax and 12,6% of losses. This sector employs 19,5% of all persons employed in OsijekBaranja County.

Expert from the Institute of Economics Zagreb, eljko Lovrinevid, says that European Union
announced it will be introducing a completely new methodology of economic activities measurement,
which will add several more indicators to the standard GDP, and they will include quality of life,
environment etc. These hard indicators we know today will in five-six years take a new form, and this will
effect the tables to change. Croatia will probably rise up on all charts that measure the quality of life and
the environment.
According to ROP the vision of Osijek-Baranja County is to achieve extremely high rate of growth so
it would achieve the balance with its wider geopolitical environment. Economic growth would be fully
based on reviving and modernization of environmentally acceptable agricultural and industrial sector as
well as the services sector with emphasis on developing intellectual services. Such growth is a precondition
for balanced social and economic development, which creates a guarantee for traditional, historical and
cultural content integration.
Small businesses are one of the most important drivers of overall economic development as they
encourage private ownership and entrepreneurial skills, generate employment and contribute significantly
to increase in production and exports.
Following these reflections, the industries in the Osijek-Baranja County with the greatest potential
for development and growth are: organic food and beverages production and processing. A large
development potential lies in the agricultural industry and processing of its products (achieving a higher
level of product finalization). The same can be applied to the development of product storage facilities
(both standard and cold storage). In the manufacturing sector there is the potential for joining
manufacturers in industry clusters by connecting them with large production, service and retail businesses.
Direct placement for the products of these industries can be ensured through the development of the
matching new continental tourism offer.
The annual growth rate of eco-agricultural sector in Europe is between 30% and 35%.
The number of registered rural and farm tourism businesses in Republic of Croatia has increased by
1100% in the 1998-2007 period (from 32 in 1998 to 352 in 2007). Osijek-Baranja County holds the third
place by registered rural and farm tourism businesses in Croatia, behind the counties of Dubrovnik-Neretva
and Istria.
Potentials for continental tourism development in Osijek-Baranja County are mostly unpolluted
environment, existing undervalued capacities: castles, hunting houses, folk tales and legends, opportunities
for year-round tourist season, possibility for selling the products in own backyard, possibility of earning
extra money from additional services (riding, souvenirs, accommodation, food and crop collection,
camping, food and drinks services, vine making, collecting mushrooms), proverbially hospitable people in
rural households, rich multiethnic and multi-confessional heritage and existence of natural sites (Kopaki
rit, mouth of Drava, thermal springs in Bizovac).
The national level of political framework starts with Government. The main priorities of the
Croatian Government and its economic policy are strengthening entrepreneurship, reducing taxes,
increasing employment, strengthening social security system, reducing the cost of the state and making
greater emphasis on the role of science and new technologies in the economy.
Numerous laws and regulations govern the operation and organization of business entities as well
as the overall business activity in every industry. The legal basis exists in the Companies Act, Crafts Act,
Water Act, The Water Management Financing Act, the Public Roads Act and the Act on the Amendments to
the Public Utilities Management Act.
In 2003 the Government of the Republic of Croatia passed the System of State Administration Act
with the following provisions:
Article 1
The activities of the state administration include the immediate implementation of acts, issuing
regulations for their implementation, carrying out administrative oversight and other administrative
and professional activities
Article 2
The activities of the state administration shall be carried out by state administration
bodies. The activities of the state administration defined by a special act may be transferred to bodies
of local and regional self-government units or other legal persons vested with public authority based
on law (hereinafter referred to as: legal persons vested with public authority).
Article 3
State administration bodies are ministries, state administration organizations and state
administration offices. Ministries and state administration organizations are central state
administration bodies, while state administration offices are established as state administration offices
of the first instance in regional self-government units.
Article 4
For the purpose of carrying out specific state administration activities within the competence of central
state administration bodies, regional units may be established in counties, cities and municipalities.
Article 5
For the purpose of carrying out specific state administration activities within the competence of state
administration offices in regional self-government units, branch offices may be established in cities and
municipalities.
Government of the Republic of Croatia is the main authority in economic policy. In line with
program commitments, Government of the Republic of Croatia plans, implements and monitors programs
and development of incentive measures aimed at balanced development in all areas of Croatia. However,
the relevant actors of institutional framework are subjects of private, public and civil society both at the
state level, and at the level of the regions. In Croatia there are many business centers, business networks,
clusters and other forms of business cooperation.
Under the Program to encourage international competitiveness and internationalization of the
economy for 2009-2010, Croatia has been implementing projects with the goal of supporting Croatian
companies in their efforts to strengthen partnerships, promote tehir products and ease the process of
entering the foreign markets. The project is being implemented in collaboration of the Ministry of
Economy, Labor and Entrepreneurship, and partner institutions - Ministry of Foreign Affairs and European
Integration, the Croatian Chamber of Economy, Croatian Chamber of Crafts, the Croatian Employers
Association, the Agency for Export and Investment Promotion, the Croatian Exporters.
National Competitiveness Council acts as an advisory body which brings together representatives
of the economy, government, trade unions, science and education. It was founded in February 2002 on the
initiative of the private business sector and the Croatian Association of Employers. The Council encourages
dialogue between public and private sectors, raises awareness and knowledge about the importance of
competitiveness, develops consensus on major economic challenges Croatia is facing, recognizes strengths
and weaknesses of the Croatian economy, and recommends and monitors policies and measures that will
contribute to long-term sustainable improvements in the productivity of the national economy.
CEPOR - Center for Policy Development of SMEs and Entrepreneurship, established as the first
''think-tank'' in Croatia, deals with the problems of small and medium-sized businesses. CEPOR is a
nonprofit organization founded in 2001. on the basis of the Agreement between the Republic of Croatia
and the Open Society Institute-Croatia. CEPOR actions are directed to conducting independent research
related to policy development of entrepreneurship and SMEs in order to identify problems and propose
solutions. In addition to this, CEPOR advises governmental institutions to build institutional capacity and
legislative authority to develop and implement an effective and non-discriminatory policy of the
development of small and medium enterprises. CEPOR organizes activities that should enable SMEs to
share their problems and discuss them in public, and to present recommendations to the Government in
order to achieve concrete solutions.
Strategic development as a transformation of society implies that development strategies of all
sectors:
private, public, civil, local communities, regional, etc. should not only be linked and
complementary, but consistent with the global environment that is constantly changing.
Unfortunately, it is concluded that in Croatia there is no consistency, and very often there are only
individual projects that encourage development. At the present stage of transition of the Croatian economy
the main focus should be on achieving consistency in selection of objectives and instruments of economic
policy.
The burden of taxes and contributions to GDP in more than 50% has a negative effect on the
competitiveness of enterprises and discourages the inflow of foreign investment. One of the most specific
causes of the negative impact on the competitiveness of the companies in Croatia is the inefficiency of the
judicial system.
The Global Competitiveness Report is the world's leading research on competitiveness, which this
year included 133 countries. The methodology of the World Economic Forum is based on the research
competitiveness of the 12 factors that include institutions, infrastructure, macroeconomic stability, health
and basic education, higher education, labor market efficiency, the efficiency of commodity markets,
technological readiness, business sophistication, innovation, market size and financial markets. In the
Croatian case, evaluation of the competitiveness has dropped from 4,22 to 4,03. Out of the 12 pillars of
competitiveness, the largest decrease was recorded in the efficiency of the labor market (down by 24
places) and the efficiency of the goods market (down by 18 places). Level of quality in financial markets,
business sophistication and quality of institutions was also rated poor. On the other hand, good results
from the past two years have been noted in macroeconomic stability and satisfactory position of health and
primary education, technological readiness and infrastructure.
Based on these reports, National Competitiveness Council has made recommendations for
increasing the competitiveness of Croatia, i.e. measures and policies that Croatia needs to implement to be
transformed into an internationally competitive economy. The Council has established the following seven
key areas: education(1), rule of law(2), cost and price competitiveness(3), innovation and technology(4),
development of small and medium-sized businesses(5), regional development and the development of
clusters(6), and development of positive attitudes and leadership(7).
Osijek-Baranja County is one of 21 Croatian NUTS 3 regions. At the NUTS 2 level it is a part of
Central and Eastern (Pannonian) Croatia. It is located in eastern part of the country and borders with
Hungary and Serbia. With population of 330.000 it is the 3rd largest county in Croatia. It was established in
1993 by the act that has formed new territorial organization in the Republic of Croatia. According to its
legal status, it is a regional self-government unit. The self-governmental affairs are administered by the
County Assembly, County Corporation Council, Perfect and administrative bodies of the Country. In the
exclusion of its authority, the County enacts regulations. The County encompasses 263 residential areas in
42 local self-governmental units, whereof 7 have the status of the city (Beli Manastir, Donji Miholjac,
akovo, Valpovo, Belide, Naice and Osijek) and 35 have the status of municipality.
Main Economic sectors of Osijek-Baranja County are Trade with 37,7%, Manufacturing with 28,6%,
Construction with 13,6% and Agriculture with 9,2%. County share in total income of Republic of Croatia is
4,00%. Such low income can be explained with war and transition which resulted in the County economy
significantly lagging behind other counties.
The regional administration sets its development objectives through a strategic planning. Strategic
plans are set up with the participation of all the components of the regional administration and are in line
with national strategy which is determined by Government. It consists of numerous strategic documents:
Development Strategy of Osijek-Baranja County

Spatial plan of Osijek-Baranja County
Irrigation Plan of Osijek-Baranja County
Environmental Protection Program for the Osijek-Baranja County
Plan for Remediation of Soil Contaminated with Waste and Landfills in the Osijek-Baranja County
Program Activities and Measures for Improvement of Premises and Environmental Sites Inhabited
by Roma population for the Osijek-Baranja County
Regional Operational Program
Measures for regulation

Small businesses are the most dynamic segment of Croatian economy. The small businesses
account for 99.5% of the total number of companies in Croatia and for some 66.3% of the total number of
employed persons in Croatia.
Small businesses are one of the most important drivers of overall economic development as they
encourage private ownership and the development of entrepreneurial skills, generate employment and
contribute significantly to the increase of production and exports.
The official definition of the small business industry according to the size of the small business
entities in Croatia is provided by the Small Business Development Promotion Act (Official Gazette; NN
29/02, 63/07). This law distinguishes between micro, small and medium-sized business entities.
MICRO-SCALE businesses are legal entities and natural persons with an average annual employment
of less than 10 employees, who have a total annual turnover of up to HRK 14 million, or have a balance
sheet total (applies to those subject to corporate income tax) or long-term assets total (applies to those
subject to personal income tax) of up to HRK 7 million.
SMALL businesses are legal entities and natural persons with an average annual employment of less
than 50 employees, have a total annual turnover of up to HRK 54 million, or have a balance sheet total
(applies to those subject to corporate income tax) or long-term assets (applies to those subject to personal
income tax) of up to HRK 27 million.
MEDIUM-SIZED businesses are legal entities and natural persons with an average annual
employment of less than 250 employees, which act independently and have a total annual turnover of up
to HRK 216 million, or have a balance sheet total (applies to those subject to corporate income tax) or longterm assets (applies to those subject to personal income tax) of up to HRK 108 million.
Croatian business legislation is compliant with the guidelines of the European Charter for Small
Enterprises.
1. Small Business Development Promotion Act (Official Gazette: NN 29/02; 63/07)
2. Trade Act (Official Gazette: NN 49/03)
3. Accounting Act (Official Gazette; NN 109/07);
4. State Aid Act (Official Gazette; NN 140/05).
The most important documents regulating the promotion of small businesses in Croatia:
Promotion program for small and medium-sized entrepreneurship
Operative promotion plan for small and medium-sized entrepreneurship
Incentives for SMEs

By accepting the program to encourage small and medium enterprises, Government clearly defined
the providers of incentives. Ministry of Economy, Labor and Entrepreneurship has the most important role,
preparing and implementing annual operational incentive plans.
There are specific incentives and measures to support start-ups and to foster industrial research,
innovation, competitiveness and internationalisation projects, both on national and regional levels.
The Government of the Republic of Croatia, the Ministry of Economy, Labor and Entrepreneurship
adopted the 2008-2012 SME Incentives Program. This document contains an overview of guidelines for the
implementation of incentives for the development of small businesses in the 2008 to 2012 period and
outlines the goals, measures and tasks, including implementation mechanisms and monitoring activities for
project implementation. The most of these incentives are small in value and are not reimbursable.
The emphasis is made on young entrepreneurs, women, start-ups, crafts and a great importance is
also given to business networking, joint business activities and businesses with export potential.
Incentives on national level

Based on the programme for encouraging Croatia's international competitiveness and for the
internationalisation of the Croatian economy for 2009-2010, Croatia has been implementing projects with
the goal of supporting Croatian companies in their efforts to strengthen partnerships, promote tehir
products and ease the process of entering the foreign markets.
Ministry of Economy, Labour and Entrepreneurship incentives

The total sum of incentives provided by the Ministry of Economy, Labour and Entrepreneurship in 2009
was 174.464.956,00 HRK or 23.932.092,73 EUR. Out of this, 8.966.440,00 HRK (1.229.964,33 EUR) was
awarded to projects in Osijek-Baranja County. Most of the money was intended to projects "Construction
of enterprise zones" and "Strengthening the competitiveness of small business".
a)
Project "Womens Entrepreneurship"
GOAL:
The project aims to facilitate faster and easier economic empowerment of women, by fostering the
business start-ups by women and creating new jobs for existing small businesses owned by women.
USERS:
Businesses, companies and cooperatives (except those who perform the primary production of
agricultural products and fisheries), defined by the Act on the Promotion of Small Businesses (NN 29/2002)
and the Act on the Amendments to the Act on the Promotion of Small Businesses (NN 63/2007), in the
private ownership (51% or more) of women with Croatian citizenship.
b) Project "Youth entrepreneurship, start-up entrepreneurs and persons with disabilities"
GOAL:
The project aims to provide greater funding and development support to young entrepreneurs,
start-ups and persons with disabilities engaging in entrepreneurial activities.
USERS:
Small businesses, corporations and cooperatives conducting predominantly production activities
(except those who perform the primary production of agricultural products and fisheries) and the small
businesses that provide services related to production - companies, businesses and cooperatives, defined
by the Small Business Development Promotion Act (NN 29/2002) and Law Amendments to the Small
Business Development Promotion Act (NN 63/2007), young entrepreneurs (under 30 years of age), start-up
entrepreneurs (up to 3 years in operation) and persons with disabilities.
c) Project "Entrepreneurship in cooperatives"
GOAL:
The goal of this project is to facilitate the establishment of associations of individuals and business
entities in manufacturing and service sectors, the balanced development of cooperatives in the Republic of
Croatia and the creation of cooperation framework for cooperatives to foster the development of joint
products.
USERS:
Production and services cooperatives (except for cooperatives which mainly perform primary
agricultural production and fisheries).
d) Project "Clusters-association to success"
GOAL:
The project aims to encourage the cooperation activities of businesses within same industries with
the goal of achieving higher levels of finalization of joint products and improving overall industry
competitiveness.
USER:
Economic interest associations, Ltd. or JSC, or the legal representative of the association / cluster
manager. These organizations must operate positively, and have at least 1 scientific research institutions in
the cluster.
e) Project "Education for entrepreneurship"
GOAL:
The project objective is to foster the entrepreneurship education programs and the adoption of
specific knowledge and skills by new and existing entrepreneurs, and to promote the importance of lifelong
learning in entrepreneurship.
USERS:
Business support institutions, educational and partner institutions.
f) Project "Business support institutions"
GOAL:
The project objective is the strengthening and development of the regional business support
infrastructure with the goal of fostering entrepreneurship and entrepreneurial climate in the respective
regions via business support institutions - development agencies, centre for entrepreneurship, business
incubators and technology parks, in accordance with the objectives of balanced regional development.
The project makes an emphasis on supporting the collaboration networks of institutions and
businesses at the local, regional and national level, in particular those that evolve around establishing
cooperation among small and medium-sized businesses, universities and research institutions on
innovation and high-technology development projects.
USERS:
Beneficiaries of the project are development agencies, centres for entrepreneurship, business
incubators and technology parks.
g) Project "Construction of business zones"
GOAL:
Construction of business (entrepreneurial) zones for creating preconditions for the development of
small and medium businesses and new jobs creation.
USERS:
Local and regional government bodies (counties, cities and municipalities)

h) Project "Entrepreneurship in culture"
GOAL:
The project aims to encourage entrepreneurship in the culture, promote cultural industries and
entrepreneurial projects in culture.
USERS:
Beneficiaries of state support for this project are the small business entities - businesses, companies
and cooperatives, defined by the Small Business Development Promotion Act (NN 29/2002). And the Law
on Amendments to the Small Business Development Promotion Act (NN 63/2007), and independent artists,
institutions other than public institutions defined by the Institutions Act (NN 76/93, 29/97, 47/99 and
35/08), art organizations and cultural institutions that carry out cultural entrepreneurial projects based on
the Law on Financing Public Needs in Culture (NN 47/90, 27/93 and 38/09).
i)
Project "Strengthening the competitiveness of small businesses"
GOAL:
The project aims to encourage the productivity and competitiveness of small businesses by
introducing new technologies and technological processes, improving existing technologies, technological
processes and development of new products and products with higher added value.
The term "new technology" includes the improvement of technological processes with the aim of
increasing quality, labour productivity, safety and promotion of energy and environmental efficiency,
achieved by installing new equipment and applying new knowledge in the production processes.
USERS:
Small businesses conducting predominantly production activities (except those who perform the
primary production of agricultural products and fisheries) and the small businesses that provide services
related to production - companies, businesses and cooperatives, defined by the Small Business
Development Promotion Act (NN 29/2002) and Law Amendments to the Small Business Development
Promotion Act (NN 63/2007).
Potential users are also local and regional government bodies and business associations.
j)
Project New Exporter - EXPORT FIT CHECK
GOAL:
The project "New Exporter - EXPORT FIT CHECK" is an integral part of the program "I want to
export", whose purpose is to fulfill one of the objectives of the Croatian Export Offensive - to increase the
overall number of new exporters.
The aim of the project "New Exporter - EXPORT FIT CHECK" is giving priority to companies,
exporters and start-ups with export potential, when considering their applications for incentive programs
designed to improve competitiveness of small businesses implemented by the Ministry of Economy, Labor
and Entrepreneurship and other state institutions.
USERS:
Small businesses, corporations and cooperatives.
k) Project "Innovation for competitiveness"
GOAL:
The project objective is the application of Croatian innovation in creating new products to market,
and the encouragement of innovation-based research and development activities that would also foster
competitiveness of domestic products in domestic and international markets.
USERS:
Small and medium-sized businesses and cooperatives, inventors, associations of innovators, organizers
of innovation exhibitions / trade fairs.
l)
Pilot project "Gazelles"
GOAL:
The aim of this Pilot Project is to strengthen the competitiveness of small and medium-sized
businesses who operate successfully, rapidly increase employment and achieve great market
competitiveness - gazelles.
USERS:
Small businesses conducting predominantly production activities (except those who perform the
primary production of agricultural products and fisheries) and the small businesses that provide services
related to production - companies, businesses and cooperatives, defined by the Small Business
Development Promotion Act.
m) Project "Skills and retraining in crafts"
GOAL:
The project aims to foster self-employment and improve the qualification structure of the working
population to align it with the actual market needs of small businesses in the Republic of Croatia.
USERS:
Individuals and legal entities.
n) Project "Education in crafts"
GOAL:
The project aims to improve vocational education, acquisition and improvement of IT competence
of craftsmen, to encourage high school students to work in trades and crafts and to encourage the
development of more internship programs with existing craftsmen available to students.
USERS:
Small business entities defined by the Small Business Development Promotion Act (NN 29/02 and
63/07), vocational schools, institutions for adult education, Croatian Chamber of Crafts, Trades and regional
chambers and associations of craftsmen.
o) Project "Development of the crafts"
GOAL:
The project objective is the preservation of craft traditions, encouraging the traditional art and craft
activities.
USERS:
Project beneficiaries are businesses and legal persons engaged in trades and crafts activities, whose
products are made in traditional way, proscribed by the specific regulations on the traditional arts and
crafts (NN 112/07).
Ministry of Tourism Incentives

a) Project "The new products in tourism"
GOAL: To create and promote new tourist products using the existing catering and tourist facilities and
tourist attractions of the subject areas.
b) Program "Education and training of personnel in tourism"
c) Program Professional associations and other nonprofit organizations
GOAL: Co-financing of program activities which aim to improve the competitiveness of Croatian tourism
offer
d) Project "Heritage in tourism"
GOAL: Assistance to the businesses in the rural, hilly and mountainous areas, areas of special state concern
and the islands, which have tourism potential in the cultural and natural heritage
e) Project "Theme routes"
GOAL: Creation of new tourist products and improvement of the tourism offer quality by development of
special theme-based routes in the Republic of Croatia
f) Project "Original souvenir"
GOAL: To encourage the promotion of development and promote the affirmation of the original souvenirs
with the aim of reviving the traditional art and crafts and local manufacture.
g) Project "Promotion of multi-sector cluster organization in tourism industry"
h) Project "Tourism without obstacles"
GOAL: Further development of tourism for people with disabilities.
i)
Project "Tourism across regions"
j)
Project "The green wake"
k) Project "The blue wake"

l)
Project "Promotional events and activities for the development of Croatian tourism industry"
m) Project "Improving the quality of the catering industry"
Ministry of Agriculture, Fishery and Rural Development incentives
The Ministry of Agriculture, Fishery and Rural Development invested 1.993.500.000,00 HRK
(273.456.790,00 EUR) in various incentive programs in 2008. Half of this sum was invested in programs in
agriculture (142.798.354,00 EUR). It is estimated that the total incentives for 2009 will be around 3,5 bln
HRK (480.000.000,00 EUR). In addition to direct incentives to entrepreneurs, there are also some projects
implemented annually that are funded by the Ministry of Agriculture.
a) Project "Support for organizers of events within the jurisdiction of the Ministry"
b) Project "Program Planning and equipping of facilities for processing own agricultural products on
Family Farms"
c) Project "Improving infrastructure in rural areas"
d) Project "Furnishing retail outlets intended for the direct sale of own agricultural products on Family
Farms"
e) Project "Pilot program of development of production and sales of traditional and innovative
agricultural and food products"
f) Project "Calcification of agricultural land"
Project "Co-financing the natural disaster insurance premiums". The Ministry provides the funding
of the 25% of the total insurance premium.
Regional support to SMEs Osijek-Baranja County
Osijek-Baranja County has developed a system of subsidies and incentives for different types of SME
with the main focus on agriculture and tourism industries, which are recognized as the sectors with the
greatest development potential.
a) Subsidies for capital investments in production, storage and processing of agricultural products
USERS: Family farms, crafts and cooperatives
b) Subsidies for capital investment in irrigation projects
c) Support for crop insurance against possible damages to agricultural producers
USERS: Family farms, crafts, cooperatives and companies
d) Subsidies for planting new orchards
e) Subsidies for planting new vineyards
f) Subsidies for development of commercial vegetable growing
g) Subsidies for the construction of buildings for production, processing and storing products in plant
and livestock production
h) Subsidies for the promotion and preservation of the milk quality
i)
Subsidies for the costs of registration and equipping facilities for processing and storage of animal
products and the protection of indigenous agricultural products on farms

j)
Subsidies for the costs of improving health and hygiene practices in cattle production

k) Subsidies for equipping cold storage for meat products
l)
Subsidies for the purchase of equipment for detecting wildlife
m) Subsidies for the purchase of land for the cultivation of wildlife

n) Support for the promotion of hunting tourism
In addition to the subsidies listed above, Osijek-Baranja County has established a system of
subventions for loans called Micro crediting project, implemented i cooperation with business banks,
Ministry of Economy, Labor and Entrepreneurship and regional government bodies. Program beneficiaries
are small and medium-sized businesses. The loan amount range from 35.000 HRK to 200.000 HRK. The
payment period is 5 years, and interest rate is subsidized with one percent from both the Ministry and the
County, so the final users interest rate is lowered to 5% annually. Program is implemented annually, and
the total loan amount available for every year of the program is contracted annually for each County. Due
to lower interest rates, these loans are especially popular among entrepreneurs. The downsides are the
relatively small amount of loan funds that can be used for this program and, in some cases, inadequate
transparency
of
the
methods
for
selection
of
the
projects
who
receive
the
loans.
PRE-ACCESSION PROGRAMMES
The EU pre-accession programmes are mainly intended for public sector, in charge of aligning the
national legislation with acquis communautaire, and nongovernmental organizations. Financial assistance is
focused on the most demanding compliance fields: acquis communautaire, agriculture, environment and
transport policy.
In that respect, Croatia is benefiting from the pre-accession programmes PHARE, ISPA, SAPARD and
IPA.
PHARE
PHARE programme has been established in 1989 as the EU's pre-accession instrument intended to
assist candidate countries of Central and Eastern Europe in their preparations for joining the EU. Today,
Phare programme applies to the acceding and candidate countries, and principally involves Institution
Building (mainly through twinning projects and service) measures and promotes Economic and Social
Cohesion (mainly through supply component).
Phare provides funds for institution building support through twinning and technical assistance and
for investment support to help applicant countries in their efforts:
to strengthen their public administrations and institutions to function effectively inside the EU,
to promote convergence with the European Community's extensive legislation and reduce the need
for transition periods,
to promote economic and social cohesion.
Phare programme has been available to Republic of Croatia from budgetary year 2005. Since than
167 million EUR has been allocated within Phare 2005 and Phare 2006 programmes. The Republic of
Croatia has been very successful in contracting Phare 2005 programme, with 88,34% of the available funds
contracted, totalling 55.548.297,63 EUR. Implementation of the Phare projects is foreseen until
30/11/2010.
The Phare programme entails national, multi-beneficiary and cross-border projects.
As a part of the PHARE 2006, one call for proposals was open esspecialy for SMEs in Croatia: SME
Pilot Grant Scheme Support for Increasing the Competitiveness and Exports of Croatians SMEs. Through
this grant scheme, Central Finance and Contracting Agency (contracting body in Croatia) was seeking for
proposals for the projects that would contribute to increasing of competitiveness and exports of SMEs in
the following fields: food, beverages and tobacco production; manufacture of rubber and plastic products,
metal products, transport equipment, manufacturing n.e.c. and software development. This grant scheme
provided financing for 24 SMEs in Croatia in the total amount of app. 2.000.000 EUR.
Several Calls for Proposals within the PHARE programme were targeting development of SME
support institutions. Business Incubator BIOS can serve as an example of the project related to SME
infrastructure financed through the PHARE programme in Osijek-Baranja County. The co-financed project
was the construction of the new building (total of 2000 square meters for more than 20 entrepreneurs),
equipment and staff training to manage the incubator's technology section. Overall budget of the project
was 1.434.774,42 EUR (925.286,02 EUR of Comission/EDF contribution and 475.197,29 EUR of City of Osijek
contribution).
ISPA
ISPA is the European Commission's preaccession financial instrument intended as a support to
candidate countries in their preparation for accession, namely for the infratructural projects in the field of
transport and environmental protection.
ISPA main priorities in preparing the applicant countries for accession are:
To familiarize the candidate countries with the policies and procedures of the EU,
To help the candidate countries to comply with EU environmental standards,
To expand and link with the trans-European transport networks.
In the period 2005-2006 under the ISPA programme, 60 million EUR was allocated to the Republic
of Croatia (25 million EUR for 2005 and 35 million EUR for 2006).
SAPARD
SAPARD program was established in June 1999 by chamber`s resolution (EC) as a program which
gives support in domain of agriculture and rural development and prepares the accession candidate
countries for using agricultural and fishing funds after reaching the status of the EU member country.
Republic of Croatia has on disposal the funds for two measures of SAPARD program: measure 1
Investment in agricultural holdings and measure 2 improving the processing and marketing of
agricultural and fisheries products whose users are agricultural businesses, crafts and other legal entities
registered for activities for which they submit the request.
From July 2006 when the first bidding was announced for SAPARD funds, until February of 2008 and
the third bidding round, Ministry of Agriculture, Fisheries and Rural Development received the total of 120
requests. After administrative check and field control, 36 projects with the total value of 259 mln HRK were
granted the financial support the total support from SAPARD funds at 111 mln HRK. From the total
available amount for co-financing of projects for measures 1 and 2, around 130 mln HRK remained for the
fourth and last bidding round, which was open from 21/02 to 21/04/2009. Final round`s results have still
not been announced.
IPARD is a new EU pre-accession program for period 2007 2013. It is a part of IPA (Instrument for
Pre-accession Assistance) and its fifth component - Rural development.
Both SAPARD and IPARD programmes were developed directly for entrepreneurs, while other preaccession programmes are mainly intended to public sector and nongovernmental organizations.
IPA
The Instrument for Pre-accession Assistance (IPA) provides assistance within the framework of the
European Partnership of the potential candidate countries and the Accession Partnership of the candidate
countries.
IPA is created as a flexible instrument made up of 5 components, with it's main objective to support
institution-building and the rule of law, human rights, including the fundamental freedoms, minority rights,
gender equality and non-discrimination, both administrative and economic reforms, economic and social
development, reconciliation and reconstruction, and regional and cross-border cooperation.
The IPA programme consists of the following five components:
Assistance in transition and institution building; promotes direct continuation of Phare programme
activity, with the exception of Economic and Social Cohesion component
Cross border cooperation; finances common cross-border activities between beneficiary countries
as well as member states (e.g. cross border projects between Croatia and Slovenia or Croatia and Italy)
Regional development; promotes integral part continuation of ISPA programme and Economic and
Social Cohesion component of Phare programme and finances infrastructural projects of larger extent on
the field of environmental protection and transport. Additionally, promotes national competition and
equable regional development. This integral part of the IPA programme promotes preparation for
European Regional Development Fund, available after entering the EU.
Human resources development; European Social Fund forerunner, promotes social cohesion
projects aiming at European Employment Strategy.
Rural development; directly continues on SAPARD programme and allocates financial means for
projects implementing agriculture acquis communitaire, as well as promoting rural development.
Priorities, measures and implementing procedures for each component of IPA programme are
defined in the Operational Programme of the respective components. Structure, hierarchy and
responsibility distribution among implementing bodies are shown in the two following examples:
Operational Programme for Regional Development and Operational Programme for Human Resource
Development.
Table 2.3.5.1. Operational Programme for Regional Development

III. Project level
Contracting body
Central Finance and Contracting Agency

Agency Director
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Table 2.3.5.2. Operational Programme Human Resource Development
Responsibility level
I. Operative program
level
II. Priority / Measure
level
III. Project level
Institution name
Institution
responsible for
Operating program
Institution
responsible for
Priority / Measure
Contracting body
Individual bodies within Operating structure

Ministry of Economy, Labour and Entrepreneurship
Department of EU Aid Schemes and Projects Management
State Secretary for Entrepreneurship
Priority 1
Priority 2, Measure 2.1 Priority 2, Measure
2.2
Ministry of Health and
Ministry of Economy,
Social Welfare
Ministry of Science,
Labour and
Education and Sport
Entrepreneurship
Social Welfare
Directorate
Directorate
Secondary Education
Labour and Labour
Department of
Market Directorate
humanitarian aid and
State Secretary for
cooperation with civil
Secondary Education
Department of EU Aid sector organizations
Schemes and Projects
Management
State Secretary for
Social Welfare
State Secretary for
Labour
Croatian Employment Service
Department for financing and contracting
Director
Priority 3
Priority 4
Ministry of Science,
Education and Sport
Ministry of
Economy, Labour
and
Entrepreneurship
Directorate for
Secondary Education
State Secretary for
Secondary Education
Agency for Vocational Education and Training
Labour and Labour

Market Directorate
Department of EU
Aid Schemes and
Projects
Management
State Secretary for
Labour
Croatian
Employment
Service
Department for
financing and
contracting
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No assistance

Significant institutions providing support to SMEs in Osijek-Baranja County:
Osijek-Baranja County
Economic and Agribusiness Affairs Administrative Department
Development Agency of Osijek-Baranja County
Regional Development Agency of Slavonia and Baranja Ltd.
State Administration of Osijek-Baranja County
City of Osijek
Croatian Chamber of Economy- County Chamber Osijek
Croatian Chamber of Trades and Crafts- Chamber of Trades and Crafts of Osijek- Baranja County
Croatian Employers Association- Regional Office in Osijek
Technology-Development Centre Osijek Ltd
Business incubator BIOS Ltd Osijek
Center for entrepreneurship Osijek
Entrepreneurship center Belide
Cooperative Entrepreneurship network
Center for entrepreneurship Donji Miholjac Ltd
Center for entrepreneurship Valpovo Ltd
Center for entrepreneurship Beli Manastir Ltd
Business incubator OSVIT
Entrepreneurship Development Center of Erdut Municipality Ltd
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In addition to these local institutions, in observing the framework in which the entrepreneurial
support institutions operate, it is necessary to mention the Government of the Republic of Croatia, i.e. the
Ministry of Economy, Labor and Entrepreneurship which performs the tasks related to the SME promotion
and incentive programs.
The Ministry conducts work concerning: promotion and systematic enhancement of crafts,
cooperatives (except agricultural), small and medium entrepreneurship; effects of economic system
instruments and economic policies and measures on the development of crafts, cooperatives, small and
medium entrepreneurship and business activities of craftsmen and entrepreneurs; realisation of
international cooperation, implementation of special programs of the Government of the Republic of
Croatia in the area of crafts, cooperatives, small and medium entrepreneurship.
The SME Promotion Operation Plan for 2009 contains the projects, beneficiaries, resources and
incentive measures for 2009 in line with the implementation of the 2008-2012 SME Incentives Program
adopted by the Government of the Republic of Croatia on 18/4/2008.
The Ministry combines three major segments:

economy,
labor,
entrepreneurship
The entrepreneurship segment is operated by two directorates:

1. Small and Medium Companies and Cooperatives Directorate
2. Crafts Directorate
Small and Medium Companies and Cooperatives Directorate is organized in four departments:
Entrepreneurship Development and Financing Department
Technology Development, Innovations and Clusters Department
EU Programs and Projects Department
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Entrepreneurial Infrastructure Department
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Osijek-Baranja County is by its legal status a unit or regional self-government. The
administration work is performed by County assembly, Council, and the other county governing bodies.
Osijek-Baranja County brings strategic development documents which determine the goals and
development path for the County. The Homeland war and transition process (war to peace, changes in
political and economic systems, privatization) have resulted in the substantial lagging behind the rest of the
Croatia and have contributed to the uneven regional development of the country. This is particularly visible
in the unemployment rate significantly above national average. These were more than enough reasons for
creating the vision of the County development. Osijek-Baranja County development strategy allows for all
interested and responsible participants in the process of achieving the vision to shape the specific actions in
creative, innovative and entrepreneurial way.
Osijek-Baranja County has developed the Regional Operating Program (ROP) as a strategic
framework to enable better preparation of projects and utilization of available EU funds. Purpose of ROP is
to prepare the County to successfully use the resources available from the EU structural funds the moment
Croatia becomes the EU member country. ROP is a fundamental document about goals and measures of
economic and social development of Osijek-Baranja County. It determines strategic development goals of
the County and measures for achieving them. According to ROP, there will be shaped project ideas which
will be used on taking advantage of local and national resources through private and public investments,
local resources and resources from available EU funds.
Osijek-Baranja County secures the funds for the promotion of entrepreneurship on annual basis
and sets the implementation program for each year. In addition to the promotion of entrepreneurship, the
County has implemented an incentive program for small businesses and tourism in rural areas. The
incentive funds are allocated after the project evaluation. In order to support entrepreneurship, OsijekBaranja County has taken significant actions in the creation of business zones. Business zones represent a
new form of infrastructure facilities, which in the past 20 years have been rapidly developing within the
European Union. Small and medium-sized businesses, who make for the most vital part of the global
economy, make the majority of business zone facilities users.
Administrative Department provides information on funding opportunities in agricultural
production (credit lines, incentives), support in agriculture, business loan opportunities, information on
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programs and projects implemented by Ministry of Economy, Labor and Entrepreneurship, and information
about other measures to encourage and develop entrepreneurship.
Economic and Agribusiness Affairs Administrative Department

The Agribusiness and Forestry Affairs Administrative Department is a professional service
performing expert and technical activities connected to economic, agricultural and forestry activities under
County jurisdiction. The scope of the Agribusiness and Forestry Affairs Administrative Department activities
includes tracking and analyzing agricultural, veterinary, forestry, hunting, tourism, transportation,
energetic, water and waste management as well as other business industry issues, preparing analytical
reports and expert opinions on issues relating to its scope of activities, drawing up draft proposals and
providing expert opinions on draft documents, act proposals and other materials prepared for the County
government bodies by expert services and other legal entities conducting related businesses; implementing
rules and regulations, individual acts and County uniform acts within the Departments scope of activities;
drawing up drafts of uniform acts relating to its scope of activities; implementing county and State
agribusiness and SME incentive measures; other expert activities under the County jurisdiction within the
Departments scope.

The Development Agency is a professional department performing expert and technical activities
connected to the preparation and realization of the County development programs. The scope of the
Development Agency activities includes drawing up proposals for County development programs and
projects, tracking their implementation and following up on them as well as recommending measures for
promoting these programs, conducting situation analysis and case studies, preparing proposals for largesize economic and municipal infrastructure development programs of great significance to the local selfgovernment units in the County, organizing and coordinating County capital investment projects
preparation and implementation and accelerating the construction of public facilities of great importance;
preparing and implementing activities for promoting County development potentials and its projects aimed
at potential project investors as well as establishing and maintaining contacts and developing partnerships
with institutions and individuals interested in County development programs; providing potential investors
with informational, legal, and administrative-technical expertise and utilizing this expertise on other
projects County involved in; creating and promoting SME-oriented entrepreneurial incentive programs as
276
well as recommending the measures for implementation and follow up of these programs; drawing up,
tracking and evaluating international business cooperation programs and project proposals as well as the
projects applying for international grants; establishing and maintaining contracts with national
organizations and institutions in the process of planning and implementing development programs;
establishing and maintaining information database system necessary for conducting its activities;
conducting other affairs important to county development according to programs ratified by County
administrative bodies.
Regional Development Agency of Slavonia and Baranja Ltd.

The Regional Development Agency of Slavonia and Baranja was founded by Osijek-Baranja County
and the City of Osijek with the objective of creating an operating entity which will actively serve as an
instrument of facilitating economic development of the region with the emphasis on European integrations
and attraction of foreign investments. Agencys vision is the achievement of high standard of living in
Slavonia and Baranja. Mission of the Regional Development Agency of Slavonia and Baranja is to act as the
link between the public, private and civil sector at national and international level, in building strategic
partnerships through application and implementation of projects that contribute to raising the standard of
living on the territory of Slavonia and Baranja. Agency also manages the Representation office of Slavonia
and Baranja in Brussels. This office provides the presence of the City of Osijek and Osijek-Baranja County in
the very heart of the European Union. The main activities of the Agency are: technical and advising support
in programs of international and regional cooperation; exchange of information aimed at regional
development and creation of local, cross-border and international networks; support to development
programs including public-private partnerships, direct investments and joint ventures; mediation in
cooperation with national and international financial institutions; attraction of foreign direct investments;
building up institutional capacities; technical assistance to local authorities in preparing project proposals
for applying to EU pre-accession funds.
State Administration Office of Osijek-Baranja County

State administration office in the Osijek-Baranja County is governments body of administration
that performs tasks of state administration in the county, which are not under the jurisdiction of the
Central government bodies (ministries and state administrative organizations).
For conducting the tasks within the jurisdiction of the office, several internal organizational units
based in Osijek were formed:
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- common affairs department

- economy department
- property-legal affairs department
- social services department
- general administration department
The economy department conducts administrative and other expert tasks related to the overall
county economy (industry, shipbuilding, energy, mining, trade, crafts, transport and communications,
tourism). Namely, the economy department is responsible for the registration of a trades and crafts
business, establishment of minimum technical requirements for the trades and crafts activity, catering and
tourism, legal and physical activities, issuing licenses in the internal road transport, giving authorizations to
conduct transportation of goods and passengers on the domestic inland public roads, conduction the
registration in the Register of grape and wine producers, and conducting the registration of Christmas trees
producers, performs management actions to achieve support in agriculture, determines the compensation
for the conversion of agricultural to building land, and keeps track of statistics. To carry out the activities of
the Office outside the central office in Osijek, local branches in Beli Manastir, Donji Miholjac, akovo,
Naice and Valpovo were established.
City of Osijek
Osijek, the 4th largest city in Croatia, is also the largest city of Slavonia and Baranja and the OsijekBaranja County seat. The city economy used to have personal traditional structure with several industrial
branches export oriented. As far as activities are concerned, the most represented ones are trade,
processing and construction industry following total income criteria, employment rate and export
orientation. The most significant economic asset of the City of Osijek is the knowledge of the educated
people. This is why the guideline of the future activities is defined by Economic Development Strategy of
the City of Osijek from industrial to intelligent city, attracting young people and creating opportunities for
development and use of own knowledge. The aim is to allow them creation of new ideas in the field of
economy, stimulate their realization through the help of business support institutions, business locations,
fiscal advantages, etc. This implies to make the city a better living place. City of Osijek changes its outlines.
Through private investments in trades centers, Osijek has been recognized as city of great economic
possibilities. Introducing low costs flights at the Osijek Airport, city has been additionally opened towards
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Europe and world and new enthusiasm in continental and transit tourism has been raised. Entering into
new projects with the City of Osijek, domestic and foreign inventors get a unique opportunity to participate
actively in creating new city contours with the final aim of life quality upgrading. To encourage the city
economic development and to create better business conditions for entrepreneurs, one of the most
important challenges is to ensure business facilities, for start-ups as well as for existing entrepreneurs. This
is why the city undertook the project of establishing a number of business zones. Specifically, the spatial
arrangement of business facilities located in the business zone establishes a balance between urban spatial
and economic development of the city. The main objective of these zones is to solve the problem of the
lack of business space, creating at the same time the spirit of community and networking among
entrepreneurs using the zone facilities, with the primary goal of new jobs creation and business
development. Department of Economy of the City Osijek provides information about available lots in the
business zones of the city of Osijek, information on the incentive programs for investors, information about
grants awarded by the city of Osijek (traditional crafts, innovators; technical harmonization of processes
and products, co-financing insurance of crops in agriculture, procurement of fruit seedling, greenhouses
construction and capital investments in irrigation projects), information on the support programs to
organizations implementing projects in non-profit enterprise and employment, programs of co-financing
joint visits to trade fairs and networking opportunities, information on the disposal of agricultural land
owned by the state, on the working hours of retail stores, etc.
Croatian Chamber of Economy County Chamber Osijek
Croatian Chamber of Commerce, including the County Chamber Osijek was established as a
business and professional organization that represents and promotes the interests of its members and the
overall national economy. Organizing associations and their work, and direct contact with individual
members, Chamber of Commerce seeks to help in solving business challenges by proposing measures for
their elimination. It analyzes the economic development and monitors development activities in the
country and abroad, and encourages the adoption and harmonization of legal regulations and requirements
for managing the business or the respective industry as a whole. Associations provide professional support
and participate in solving the problems of business operations. They propose effective measures to
safeguard policies in the economy, prepare and implement promotional activities, interpret new
international and domestic standards and regulations, and propose and implement a system of education
in the chamber.
279
It also highlights the needs and undertakes activities to improve the quality of domestic products.
A long-term strategic project of marking the visual signs of Croatian products "Croatian quality" and
"Originally Croatian with the primary aim to encourage awareness of the need for creating and
maintaining "quality culture" in the Croatian market was created and is implemented by the Chamber.
Another important role of the Chamber as an economic development institution is the continuous
promotion of the Croatian economy abroad through cooperation with foreign companies, chambers and
other organizations. The Osijek County Chamber of Commerce has good business relationship with the
Chamber of Pecs in Hungary, Vicenza in Italy, Nitra in Slovakia, Phorzheim in Germany, Cluj-Napoka in
Romania, with chambers in Bosnia and Herzegovina, Slovenia and others. During the visits of foreign
delegations, the Chamber organizes promotional meetings and business talks to connect local businesses
with foreign partners, and organizes collective presentations of domestic companies on trade fairs and
exhibitions abroad and throughout Croatia.
The activities of the Croatian Chamber of Commerce are representing the interests of the economy
to economic policy makers via the City council and professional groups, promoting the economy of the
country abroad, organizing business delegations and the introduction of county economies abroad and
accepting economic delegations from abroad, the organization performs on foreign and domestic trade
fairs, improvement of business and operations through quality improvement and business information,
public authority (certificate of origin of goods, ATA carnets, confirming other documentation accompanying
the goods on export and import, accreditation to perform international road freight transport,
harmonization of transport lines to the county line of road passenger transport), business education
through professional education activities, travel, seminars, training, visits and other specialized exhibitions,
projects to promote indigenous products and dissemination of information, assisting and advising
companies when doing business with business partners in EU countries.
Croatian Chamber of Trades and Crafts - Chamber of Trades and Crafts of Osijek-Baranja County
Croatian Chamber of Trades and Crafts is the basic institution for assistance to craftsmen. Regional
chambers of crafts operate on the county level with associations of craftsmen working in cities and
municipalities. Crafts association of Osijek-Baranja County, together with other associations of craftsmen
carries out activities to promote trades and crafts, provides technical assistance in establishing the trades
and crafts business and conducts examinations of professional qualification. The main objectives and
activities are representing the interests of members of the Chamber before local and regional selfgovernment institutions, and organizing and co-financing promotional activities at fairs, establishing
280
business contacts, helping with management concerns about education and training of potential
employees in crafts, conducting professional examinations of the professional qualification and master
exams (the precondition for registering some trades and crafts businesses), and providing expert assistance
in the establishment and operations of the association of craftsmen and crafts.
Croatian Employers Association (CEA) Regional Office in Osijek
CEA was founded in 1993 as a voluntary, non-profit and independent employers association which
protects and promotes rights and interests of it members.
The association is one of the social partners in tripartite Croatian scene. Since the Labour Law came
into force in 1996, as a completely new way of regulating labor relations in the Republic of Croatia, the CEA
as a voluntary and independent representative of the employers got a legitimate right for lobbying
activities and concluding collective agreements. CEA, in addition to the activities in the field of social-work
legislation and industrial relations, protects private property, promotes the development and regulation of
market conditions, strengthening of competitiveness and a favorable entrepreneurial climate. CEA
represents a strong and independent voice of employers and entrepreneurs with more than 5.000
members who employ over 400.000 workers in total. With establishment of regional offices not only in
Osijek, but also in Rijeka and Split, CEA has created a powerful business network covering entire Croatia.
Branch association activities (there are 25 branch offices) is providing protection and promotion of
specific interest of different economic sectors, and in relation to other European employers associations.
Continuous activities of the CEA are participating in creating the system of legislation, taking active
measures in creating a favorable entrepreneurial and investment climate by influencing the state
administration bodies and local self-government and other policy makers, participation in social dialogue
and partnerships, promotion of social responsibility, actively communicating with key public figures and
lobbying with the state and local authorities, and the bodies of the European Union, participation in
integration processes and expansion of international cooperation, promoting the interests of region
members and responses to economic problems in the region through the work of the regional offices in
Rijeka, Osijek and Split.
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Technology Development Center Osijek Ltd.

Technology-development center was registered in 2002 as result of cooperation between the Josip
Juraj Strossmayer University, City of Osijek and Osijek-Baranja County. Mission of Technology development
center is:
Development of knowledge based economy by using significantly developed existing technology
(products, services, processes and procedures with newly added values),
Commercialization of publicly financed research of Josip Juraj Strossmayer University,
Organization and coordination of scientific research and development projects of needs of industry
with cooperation of University members and other relevant institutions,
Supporting regional development and keeping entrepreneurial and qualified work force in region,
Business support to companies which have entered the incubator of Technology development
center in Osijek Ltd. and beyond.
Activities of the Technology development center in Osijek are: promotion of new technology,
innovation and entrepreneurship aimed at connecting science and economy and providing the
infrastructure, financial and advisory support to innovative and technology based projects. Besides this,
TERA performs the commercialization of publicly funded research of J.J. Strossmayer University, protects
and manages intellectual property and technology assessment or definition of a planned effort, and helps
in procurement of the needed equipment. The primary task is the development of a knowledge-based
economy using new and/or significantly improved technology solutions. With the help of the Josip Juraj
Strossmayer University, Ministry of Science, Education and Sports, and local governments, the Technology
development center creates the conditions for rapid and successful transformation of research results and
innovation to competitive products, encourages the international transfer and development of small and
medium-sized companies. Areas of particular interest are biotechnology, environmental protection,
information technology, and projects that provide entrepreneurs in the region with the opportunity for
development.
TERA achieves its goals by incubating technology based businesses and providing
development and consulting services for the economy in the region.
Ministry of Defense of Republic of Croatia, Ministry of Science, Education and Sports, Ministry of
Interior and Osijek-Baranja County had signed the Agreement on the Transfer of rights for usage and
conversion of the barracks to the University of J.J. Strossmayer of Osijek. The purpose of the Agreement is
the conversion of the barracks in Osijek and giving them to the use of University.
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Specifically, the agreement is concluded on the basis of the following facts:

- that the development of the University of Josip Juraj Strossmayer is of great importance for longterm academic and economic development of Croatia, and especially its eastern part, and it is necessary to
create space and other material conditions that allow long-term program transformation of the University
into scientific-research and educational institution equipped to deal with scientific challenges of the
modern world.
- That the war devastation of Osijek and its environment significantly damaged and destroyed
facilities of the University which has reduced the possibility of its development and regular activities
- that the further development of the defense system as well as peacetime deployment of Croatian
Armed Forces and special units of the Ministry of the Interior predicted their deployment outside of towns
and villages.
Business Incubator BIOS Ltd Osijek

BIOS mission is to support development of small and medium entrepreneurship through ensuring
business space and providing business and other service in the most critical stages of business development
and in this way contribute to the economic development of the region and to lowering its unemployment
rate.
Activities that BIOS conducts are:
Providing advisory and organizational help (publishing brochures First step into Entrepreneurship)
Leasing business space to small and medium-sized start-up businesses, and other businesses in ICT,
multimedia, digital graphics, bio-informatics, biotechnology, electrical engineering, electronic business; i.e.
all businesses with innovation potential
Organization of expert seminars for clients
Technology education (Microsoft BizSpark- new global program designed to increase the success of
start-up businesses. BizSpark gives fast and easy approach to latest Microsoft development platform, which
includes the biggest version of Microsoft development tools and license for server products. In addition to
software, this program provides young entrepreneurs with professional Microsoft technical support, and
the possibility for connecting with business experts via the global network of BizSpark partners)
Transfer of knowledge and technology
Providing administrative services
Providing help to tenants with preparing and implementing their business plans
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Presentation of incubator tenants on seminars

Promotion of entrepreneurship and networking opportunities for entrepreneurs (organizing the
international conferences about entrepreneurship, establishment and operation of clusters cluster of ICT
companies in Slavonia and Baranja, Printing and publishing cluster, surveys on cluster development in
Croatia)
Providing additional services to clients (web design, printing and publishing, applying to EU
projects)
The largest successfully completed project by BIOS is the construction of the technology part of the
incubator (with the area of 2000m2) with the purpose of increasing incubator capacity for admission of
new tenants and creating the space for support of high-tech companies with the ultimate long-term goal
to contribute to the development of entrepreneurship activities in the region and lower the
unemployment rate. This project was mostly funded (almost one million EUR) by the EU pre-accession
funds.
Center for Entrepreneurship Osijek

Center for Entrepreneurship Osijek was founded in March 1997 with the goal of facilitating and
promoting entrepreneurial business behavior. It is a non-profit organization founded by entrepreneurs
from Osijek area, professors from Josip Juraj Strossmayer University in Osijek, and representatives of local
administration.
The main activities of Center for entrepreneurship Osijek are:
Education and training activities for start-up entrepreneurs and entrepreneurs in the growth and
development phase (organization of education programs: Generate your business idea, Start your Business,
Strategic and operative planning, Business plan writing, Financial management for trades and crafts
businesses, Selling skills, Presentation and communication skills, How to employ and keep the best people,
and other seminars and workshops based on the existing demand)
Providing advisory and consulting help for entrepreneurs (assistance with business registration,
establishing or joining in various forms of business cooperation cooperatives, clusters etc., organization of
networking opportunities for entrepreneurs and others)
Dissemination of information (publishing Investment guide of Osijek-Baranja County, organization
of entrepreneurs forum whit specific themes, presentation of available incentive programs,
implementation of SMS entrepreneur project sending free and timely information about topics of interest
284
for entrepreneurs grants, incentives, education programs and other; publishing materials for promotion
of entrepreneurship in local community)
Preparing business and investment plans, and development projects (help with realization of loans
and grants, cooperation with local administration and Osijek-Baranja County in the preparation and
implementation of entrepreneurship development projects, assistance in gathering documentation and
preparation of projects for EU pre-accession funds.
In addition to these activities, the Center for Entrepreneurship Osijek is focused toward
encouraging and creating entrepreneurial culture and fostering entrepreneurial thinking and behavior in
everyday life and in the workplace through various projects, business forums, etc. In the last decade of
successful work and actions, Center for entrepreneurship Osijek experts held over 200 different seminars
with over 3,000 entrepreneurs participating (in Osijek-Baranja County, and other Croatian counties). Since
1997, around 7850 entrepreneurs have requested information and/or consulting services from Center for
Entrepreneurship Osijek.
Entrepreneurship Center Belide
Entrepreneurship center Belide is a non-profit organization founded on 6/10/2003. Organization
was formed as result of inter-sectored cooperation of City Belide, non-governmental organizations and
businesses from the local area. Activities of Entrepreneurship center Belide are:
providing advisory and consulting service to entrepreneurs on economic and legal aspects of
business,
dissemination of information about incentive programs of ministries, Osijek-Baranja County, banks
and other institutions for development and promotion of entrepreneurship,
providing information to entrepreneurs and media promotion of programs for promotion of
entrepreneurship,
organization of education of seminars, workshops and promotional stands for existing and start-up
entrepreneurs,
preparing business plans and investment studies
Cooperative Entrepreneurship Network

Cooperative Entrepreneurship Network has the vision to provide full support to entrepreneurs
through active involvement in the implementation of the enterprise development projects by the County,
the relevant ministries, local administration and self-government and other institutions for the promotion
and development of entrepreneurship in Croatia. Cooperative activities are:
285
- providing advisory and consultancy help to entrepreneurs,

- preparing business plans and investment studies,
- accounting and bookkeeping services to entrepreneurs,
- organization of informative business stands with actual themes,
- promotion of entrepreneurship
Cooperative Entrepreneurship Network has worked on the Osijek-Baranja County publication
Cooperative for XXI. Century, and the specialized portal for cooperatives in the County
www.zadruga.obz.hr.
Center for Entrepreneurship Donji Miholjac Ltd

Center for Entrepreneurship Donji Miholjac is focused on:
- providing expert and advisory help to entrepreneurs,

- providing expert help for local and regional self-government in shaping the policies and
programs around the concept of promoting technology development and innovative
entrepreneurship,
- encouraging establishment and development of small businesses,

- entrepreneurship promotion,
- preparing business plans,
- other professional tasks related to encouraging the development of the small businesses
established by incentives programs on local, regional and national level.
Center for Entrepreneurship Valpovo Ltd

Center for Entrepreneurship Valpovo was established by the city Valpovo as a limited liability
company. Centers task is to encourage business activity and promote the economic development of small
and medium-sized businesses on the local level.
Center provides the following services to existing and potential entrepreneurs in the area:
- free advisory and consulting services in entrepreneurship,

- free information about projects and programs in entrepreneurship,
- market research and promotion of entrepreneurship,
- business mediation for entrepreneurs needs,
- preparing business and investment plans,
286
- organization of education seminars for entrepreneurs,

- organization of workshops on entrepreneurship,
- access to internet and networking opportunities for entrepreneurs,
- making catalogs, studies and programs for local environment,
- organization of entrepreneurship fairs and participation on fairs,
- coordination of business activities in the local environment.
Center for Entrepreneurship Beli Manastir Ltd
Center for Entrepreneurship Beli Manastir was founded by the City of Beli Manastir, and the
municipalities of Kneevi Vinogradi and eminac as a local institution for development and promotion of
entrepreneurship. As most of entrepreneurship centers they conduct the following activities:
- provide information about entrepreneurship incentive programs and support institutions,

- provide information about sources of funding,
- advisory help in support programs,
- preparing business plans,
- organization of seminars for entrepreneurs,
- connecting entrepreneurs networking activities
Business incubator OSVIT
OSVIT was founded as an entrepreneurship cooperative in 2003 by the City of Donji Miholjac.
Business incubator conducts the following activities:
- providing business support by leasing business space,

- organization of the administrative and bookkeeping services,
- providing a common commercial service and processing market,
- providing constant advisory help,
- focusing on encouraging innovation and technology development,
- providing other services according to the needs of incubator tenants
Entrepreneurship Development Center of Erdut Municipality Ltd
Center for entrepreneurship Erdut is focused on:
- providing information about entrepreneurship incentive programs,
287
- providing information about sources of funding,

- advisory help with emphasis on start-ups,
- preparing business plans (especially in the field of tourism and production of vine),
- entrepreneurship promotion
Conclusion can be made that Osijek-Baranja County, through this network of business support
institutions, provides adequate support to entrepreneurs in form of consultancy, dissemination of
important information and business education programs for start-up entrepreneurs and entrepreneurs in
the growth and development phase.
In 2008, market research agency AUDEO Ltd. conducted a research in the City of Osijek about the
disadvantaged position of the youth in the labor market and their insufficient interest in entrepreneurship.
The aim of the research was to determine attitudes, opinions and dilemmas of the youth regarding their
future in the labor market and possibilities of starting their own businesses.
Picture 1. Recognizability of business support institutions

high school seniors
Technology Development
Center TERA
university graduates
20,40%
11,30%
33,10%
Business Incubator BIOS
16,00%
48,00%
Development Agency of
33,20%
55,40%
Center for
Entrepreneurship
0,00%
37,00%
10,00%
20,00%
30,00%
40,00%
50,00%
60,00%
288
One of the questions was related to the recognizability of entrepreneurial institutions, that is,
institutions that support entrepreneurship at the local level in Osijek and Slavonia and Baranja. Graph 10
shows that both populations are familiar the most with the Center for Entrepreneurship Osijek. It is clear
that all the institutions are significantly more recognizable among the population of university graduates
than among that of high school seniors, which was expected, since university students are usually better
informed and probably have more opportunities to get in touch with these institutions through some of
their projects.
Among university graduates, students of the Faculty of Economics knew much more about these
institutions than their colleagues, except in the case of Technology-development centre (TERA) with which
graduates of the Faculty of Economics and the Faculty of Electrical Engineering are about equally familiar
(both around 25%). With regard to the differences in recognizability of these institutions among high school
seniors, results show an interesting occurrence, which can again be explained by the type of school.
Namely, except in the case of BIOS, gymnasium students knew less about these institutions than the
vocational high school students, and that difference is statistically significant in case of the two most
recognizable institutions.
289
The list of the information provided by BSO from Osijek-Baranja County

Table 3.2.1.
BSO Name
Address
E-mail
Legal Status
Years of activity
Fields of activity
No. of employees

activities

STJEPANA RADIDA 4 , 31000 OSIJEK
razvoj@obz.hr
Administrative department of the regional body of government
Since1993.
Section for Entrepreneurship and Development Projects, Section for
Capital Investments, Section for European Integrations and Regional
Development
15
The Development Agency is an expert service administering analyticalplanning, organizational-coordination, legal and other affairs
connected with the preparation and realization of the County-based
development program.
Realization of the County-based development program

ups
Helping entrepreneurs in obtaining credit funds, informing on subsidy

programs for entrepreneurship, counselling, permanent education
programs, development of start-up and young companies,
initiating the founding of entrepreneurial zones, stimulating
employment, co-financing of introducing quality management
systems, co-financing of presentations on fairs, cooperation on
innovation and introducing new products, stimulating cooperation,
stimulating craftsmanship, new investments and stimulating of export,
cooperation with institutions dealing with entrepreneurial support
Projects intended for entrepreneurs starting their business ventures
(start-up) and young companies are conducted on the territory of
the County. The purpose is to create a stimulated environment for
increasing the number of business subjects, and creating
preconditions for their success and presence on the market.
Seminars for entrepreneurs beginners, Entrepreneurial Notebook
with all the relevant information and the address-book of institutions,
possibility for using of premises of entrepreneurial incubators, Best
Entrepreneurial Idea Award, SMS Entrepreneur and various
counselling are all activities conducted with a goal of facilitating the
new business and new jobs creation.
Sources of funding
Osijek-Baranja county budget
290
Table 3.2.2.
BSO Name
Address
E-mail
Legal Status
Years of activity
Fields of activity
No. of employees
activities

ups
Sources of funding
Center for Entrepreneurship Osijek

J. J. Strossmayera 341, 31000 Osijek
info@poduzetnistvo.org; cfe@os.t-com.hr
Association, non-profit
13
development and promotion of entrepreneurial business behavior
7
Expertise, long experience, large number of external associates
SMEs, start-ups, family farms, cooperatives, non-profit organizations,
unemployed persons, students
Education and training
Advisory and consulting help
Info center
Preparing business and investment plans, and development projects
Education and training
Advisory and consulting help
Info center
Preparing business and investment plans, and development projects
Revenues from own activities, Ministry of Economy, Labour and
Entrepreneurship, City of Osijek, Osijek-Baranja County, EU funds
291
Table 3.2.3.
BSO Name
Address
E-mail
Legal Status
Years of activity
Fields of activity
REGIONAL DEVELOPMENT AGENCY OF SLAVONIA AND BARANJA ltd

S. Radica 4, 31000 Osijek, Croatia
regija@obz.hr
Ltd, non-profit
3
Regional development, EU integrations, regional and transnational
cooperation, education, consulting
No. of employees
9
Technical and advising support in programmes of international and regional
cooperation; exchange of information aiming at regional development and
creation of local, cross-border and international networks; promotion of
the territory; support to development programmes including public-private
partnerships, direct investments and joint ventures; mediation in
cooperation with national and international financial institutions; attraction
of direct foreign investments (FDI); building up institutional capacities;
technical assistance to local authorities in application of project proposals
meant for financing by pre-accession funds of the EU, regional and local
development programming, etc.
Local and regional public authorities, NGOs, SMEs, operators of the
activities
agricultural sector, academic community,
Business consulting on funding opportunities for SME sector and agriculture
sector (technical assistance, information providing, preparation of business
plans, etc.)
Information providing on funding opportunities, HAMAG partner institution
ups
Sources of funding
Local and regional government, EU and other national and international
projects, providing specific services (own revenue),
292
Table 3.2.4.
BSO Name
Address
E-mail
Legal Status
Years of activity
Fields of activity
No. of employees
Center for Entrepreneurship BeIi Manastir Ltd

31300 BELI MANASTIR, KRALJA TOMISLAVA 53.
info@pcbm.hr; laura@pcbm.hr
Ltd
6
Business support organization
1
Expertise, long experience in working with target groups, established
cooperation with the regional and local authorities and other institutions
which directly and indirectly affect target groups
Family farms, crafts, ltd, start ups, high school students, unemployed persons
activities
Free consulting services, information about sources of financing, assistance in
business plan and investment plans writing, economic programme,
organization of educational activities and workshops, connecting
entrepreneurs
ups
Free consulting services, information about sources of financing, assistance in

business plan writing, education and workshops organization
Sources of funding
Local and regional authorities, different ministries , own revenues
Table 3.2.5.
CROATIAN EMPLOYERS ASSOCIATION REGIONAL OFFICE OSIJEK
Address
Trg Ljudevita Gaja 6, 31000 Osijek
E-mail
hup-osijek@hup.hr
Legal Status
Years of activity
1996.
Fields of activity
Labour law
No. of employees
3
Legal services (labour and social legislation), lobbying
To protect the rights and interests of our members and represent them
activities
in relations with government bodies, regional and local authorities and
trade unions
Legal protection, improving local and national business environment
Legal protection, improving local and national business environment
ups
Sources of funding
Membership fee
293
Table 3.2.6.
BSO Name
Center for Entrepreneurship Valpovo Ltd
Address
Kralja P. Kreimira IV 2 31550 Valpovo
E-mail
vpckontakt@gmail.com
Legal Status
Ltd
Years of activity
7
Fields of activity
Business support organization for SMEs
No. of employees
3
2 lawyers and 1 economist
Start ups, SMEs
activities
Preparation of project documentation for tenders for the
implementation of grants, business and investment plan preparation,
organization of fairs
ups
Education, consulting, business and investment plan preparation,

organization of fairs
Sources of funding
City of Valpovo, Ministries, Osijek-Baranja County, own revenues
Table 3.2.7.
BSO Name
ENTREPRENEURSHIP DEVELOPMENT CENTER OF ERDUT MUNICIPALITY Ltd.
Address
E-mail
Legal Status
Years of activity
Fields of activity
No. of employees
activities

ups
Sources of funding
BANA JOSIPA JELAIDA 4, 31 226 DALJ

porc@opcina-erdut.hr
Ltd
2
Providing expert and advisory help to entrepreneurs
Entrepreneurship promoting
Advising local government units
1
Director (graduated economist ) of centre
Small and medium-sized enterprises and local government
Providing support to development of entrepreneurship
Providing support to growing businesses
Help with utilizing available government and EU support funds
Start up package: seminars, round tables, dissemination of relevant info
Providing assistance with applying for different projects
Erdut municipality, Ministry of economy , others ( in small amount).
294
Table 3.2.8.
BSO Name
Address
E-mail
Legal Status
Years of activity
Fields of activity
No. of employees
activities

ups
Sources of funding
City of Osijek
Kuhaeva 9, Osijek
Gradonacelnik@osijek.hr; damir.rogulja@osijek.hr
Local government unit
17
Arrangement of settlements and housing
Spatial and urban planning
Economic Development
Utilities
Traffic and transport infrastructure
Childcare
Education
Social welfare
Education and basic education
Culture, physical culture and sports
Consumer protection
The protection and promotion of natural Environmental Protection
Fire and civil protection
The issuance of building and location permits
Maintenance of public roads and other
271 + 3
Qualified employees and quality equipment to work
City for the life of youth and family life
Creating the preconditions for economic development-construction of
economic zones and the allocation of land to entrepreneurs with a "de
minimis" support, the allocation of grants, interest subsidies for loans,
connect entrepreneurs and the provision of space for presentation at
fairs, etc.
The establishment and subsidy of Business Incubator BIOS, reductions for
beginner entrepreneurs who enter into economic zones, promotion of
employment, etc.
- Taxes, surtaxes, municipal contributions, municipal fees, grants, etc.
295
Table 3.2.9.
BSO Name
Address
E-mail
Legal Status
Years of activity
Fields of activity
No. of employees
activities

ups
Sources of funding
Entrepreneurship Center Belide

Vij. S. H. Gutmanna 1, Belide
poduzetnicki.centar.belisce@os.t-com.hr
s.stanic@belisce.net
k.mandic@belisce.net
6
Providing technical support to the development of SMEs at the local level
through counseling, information and educational services to launch economic
activities, creating conditions for self-employment and entrepreneurship.
2
Sanja Majstorovid Stanid, lawyer
Kristina Mandid, economist
- entrepreneurs from Belide area
- City of Belide
- associations
- Economic and legal advice,
- Monitoring and informing entrepreneurs about the programs of individual
ministries of the Government of the Republic of Croatia, Osijek-Baranja
County, HBOR , HAMAG, HZZ, EU and other national and international
institutions
- Organization of educational content (seminars, workshops, panels),
- Business plan writing
- Economic and legal advice
- Organization of educational content (seminars, workshops, panels)
Donor funds
296
Table 3.2.10.
BSO Name
Address
E-mail
Legal Status
Years of activity
Fields of activity
No. of employees
Center for Entrepreneurship Donji Miholjac Ltd

Trg Ante Starevida 1/I, 31540 Donji Miholjac
mpc.miholjac@gmail.com
Ltd
7
Business consulting
4
Development of investment programs, management of investment
projects, production and project management of EU pre-accession funds,
consulting business start-ups and entrepreneurs in the phase of growth
and development
Entrepreneurs, entrepreneurs in the phase of growth and development,
activities
agricultural economy, local self-government
Education, business consulting, business plans and investment programs,
information on open calls designated for development of small and
medium enterprises, filling requests for the same composition and the
required documentation
Seminars, information and business consulting related to the start up
ups
operations and realization of potential aid, assistance in drafting a
business plan
Sources of funding
Own revenues
Table 3.2.11.
BSO Name
Address
E-mail
Legal Status
Years of activity
Fields of activity
No. of employees
activities
ups
Sources of funding
Croatian Chamber of Economy, County Chamber Osijek

Europske av. 13, 31000 Osijek
hgkos@hgk.hr
Public Law Body
since 1853
Business support services and institutions
24
All legal entities engaging in business
Promoting, representing and protecting members common interests
before governmental authorities home and abroad
Membership fees, contributions, income from the public authority

services, income from own activities
297
Table 3.2.12.
BSO Name
Address
E-mail
Legal Status
Years of activity
Fields of activity
No. of employees

activities
ups
Sources of funding
BUSINESS INCUBATOR BIOS Ltd

J. J. Strossmayer 341, 31000 Osijek, Croatia
tseric@gmail.com
Ltd
8 years
Business consulting, technical assistance and educational services in
addition to preferential prices of business facilities rental aimed to
manufacturing and innovative start-ups
5
Business Incubator BIOS is active in many entrepreneurship supporting
projects. It has established Slavonia and Baranja ICT Cluster IKS with eight
IT companies and BIOS Printing and Publishing Cluster which gathers 10
companies from Osijek-Baranja County. BIOS organizes annual
international conference about entrepreneurship. It has published two
handbooks and special DVD set containing basic information on starting
your own business, where all the entrepreneurship support organizations
are listed. BIOS has conducted surveys about entrepreneurs, incubators
and clusters in Croatia and made them public on its web site. It is also
involved in INTERREG projects Slovenia - Hungary - Croatia. BIOS is also
the Microsoft BizSpark and WebsiteSpark Network Partner.
BIOS tenants (manufacturing and innovative start-ups) and other SMEs
Business support activities, education, technology transfer, consultation,
SMEs promotion
Rental, education (seminars and trainings)and trade fairs subsidy, startups promotion, technology transfer support activities aimed to
innovative start-ups
Projects, rental income, donations
298
Table 3.2.13.
BSO Name
Address
E-mail
Legal Status
Years of activity
Fields of activity
No. of employees
Technology Development Centre Osijek Ltd

Trg Ljudevita Gaja 6, 31000 Osijek, Croatia
ured@tera.hr
Ltd
7
Development of the knowledge based economy implementing
significantly improved technologies (product, services, processes and
procedures with new added value
Commercialization of publicly funded research by J.J. Strossmayer
University of Osijek
5

activities

ups
Sources of funding
Business incubator,
registered at the Croatian State Intellectual Property Office for
services in IPR,
member of European Enterprise Network EEN (support structure
for the commercialization of innovations in Europe),
organizer of International exhibition of innovations, prototypes
and business plans
Support to enterprises in the business incubator and outside companies
Incubation for knowledge-based companies, protection of intellectual
property, rapid prototyping, information on the supply and demand for
goods or services on the national and European markets, links to a
network of consultants and researchers from different scientific
branches, identification of partners interested in technology transfer,
legal and advisory support for negotiation activities
Incubation for knowledge-based companies, protection of intellectual
property, rapid prototyping, information on the supply and demand for
goods or services on the national and European markets, links to a
network of consultants and researchers from different scientific
branches, identification of partners interested in technology transfer,
legal and advisory support for negotiation activities
Croatian and EU funds, own revenue
299
Table 3.2.14.
BSO Name Osijek-Baranja County, Economic and Agribusiness Affairs Administrative Department
Address
OSIJEK, TRG A. STAREVIDA 1/II
E-mail
poljoprivreda-gospodarstvo@obz.hr
Legal Status
Osijek-Baranja County Governing Body
Years of activity
8
Fields of activity
Agribusiness and economy
No. of employees
14
Administrative, Analytical Planning, organizational and co-ordination,
normative-legal and other professional services related to the economic
activity or activities in the field of agriculture and forestry of the jurisdiction
of County
Family farms, SMEs
activities
Activities related with encouraging the development of agricultural
production and entrepreneurship in small and medium enterprises
Subsidizing of investments and interest rates on business loans
ups
Sources of funding
Osijek-Baranja County budget
Table 3.2.15.
BSO Name
Address
E-mail
Legal Status
Years of activity
Fields of activity
No. of employees
activities
ups
Sources of funding
Business Incubator OSVIT

Vukovarska 142, 31540 Donji Miholjac
Poduzetnicka.zadruga.osvit@os.t-com.hr
Cooperation
7
Providing professional, bookkeeping services and rental space
3 in administration; 100 employees in tenant companies
Administration economists
Tenants different competencies and skills
Tenants
Education, bookkeeping services, providing information from the city,
county, banks, ministries
Start-up seminars, information and business consulting related to the start-up
operations and realization of potential aid, assistance in drafting a business
plan, marketing presentation
Rental income, Osijek-Baranja County, Ministry of Economy, Labour and
Entrepreneurship
300
Table 3.2.16.
BSO Name
Croatian Chamber of Trades and Crafts - Croatian Chamber of Trades and Crafts of Osijek-Baranja
County
Address
Osijek, Svilajska 35
E-mail
Ok.osijek@hok.hr
Legal Status
Established under the Law on Crafts
Years of activity
15
Fields of activity
-promoting the trades and crafts businesses
- represent the interests of craftsmen before the local and regional self
government
- organizing trade fairs, exhibitions, business contacts, seminars, lectures
- conducts master examinations and examinations of the professional
qualification
-trade licensing procedure
-education for trades and professions
No. of employees
6
Advisory, educational, organizational
Craftsmen, potential trade/craft business owners
activities
-Consulting
-Education
-organization of joint trade fairs presentations
- education for the trades
-enforcement proceedings before the Court of Honour Croatian Chamber of
Crafts
- Conciliation proceedings
-Consulting
ups
-Education
-organization of joint trade fairs presentations
- education for the trades
-enforcement proceedings before the Court of Honour Croatian Chamber of
Crafts
- Conciliation proceedings
Sources of funding
Chamber contributions
Osijek-Baranja County SME Promotion Program

Strategic Development Framework 2006-2013 is a document that provides comprehensive vision
and an overview of priorities of economic development of the Republic of Croatia in the 2006-2013 period.
This text defines the general strategic objective, the priority fields of activity, as well as the instruments and
activities required for their fulfillment. The general strategic objective of the document is growth and
employment in competitive market economy acting within a European welfare state of the 21st century.
The priority objectives that represent the drivers of development in a short period according to the
stated document are:
-
strengthening the entrepreneurial climate:
301
affirmation of the new role of the state, and
privatization and restructuring.
Foundations of development that have to be continuously strengthened are: human resources and
infrastructure. Therefore, measures have to be implemented in the following areas:
-
education and labor market efficiency;
science, technology and ICT;
development of transport and energy infrastructure

fostering social cohesion and justice.
Finally, the synergy of prosperity can be achieved only if priorities marked as cohesive elements are
achieved:
-
macroeconomic stability and liberalization of the flow of capital;
efficient and integrated financial services system:
sustainable development (space, nature and regional development).
The Strategic Framework for Development is based on the existing sector strategies, and it has been
created through a process of consultations with representatives of public administration, business and
academic community, civil society and general public, and was adopted by the Government of the Republic
of Croatia in 2006. Successful implementation of policies defined in this document will result in acceleration
of the rate of national growth and in faster convergence of average income per capita in Croatia and the
European Union. Economic openness, competitiveness, and the need to change the traditional role of the
state and to include all layers of society in the results of economic growth and development are the
essential starting points for the achievement of the main strategic goal in this seven year period: growth
and employment in competitive market economy acting within a European welfare state of the 21st
century. This strategic goal may be achieved only by simultaneous and harmonized action in the following
ten strategic areas: people, knowledge and education; transport and energy infrastructure; science and IT
technology; social cohesion and justice; macroeconomic stability and openness; integrated financial
services; environmental protection and balanced regional development; entrepreneurial climate;
privatization and restructuring and new role of the state..
302
The Republic of Croatia is currently at just above 50% of the European GDP per capita average, and
the Strategic Framework for Development 2006-2013 provides projections that Croatia, with the
implementation of the established measures and actions, could reach 75% of that percentage.
Osijek-Baranja County SME promotion program is submitted to the Osijek-Baranja County Assembly
by the Development Agency of Osijek-Baranja County.
The County implements the SME promotion program in collaboration with units of local selfgovernment, entrepreneurship centers and incubators, and all the other institutions that provide support
to small and medium-sized businesses.
Striving to actively contribute to creation of assumptions and environment that will facilitate the
development of entrepreneurship, the County has been undertaking the following activities during 2009:
1. PROVIDING LOANS TO ENTREPRENEURS;
2. DISSEMINATION OF INFORMATION ON AVAILABLE SME INCENTIVE PROGRAMS;
3. PROVIDING CONSULTING SERVICES TO ENTREPRENEURS;
4. PERMANENT EDUCATION;
5. DEVELOPMENT OF START-UP AND YOUNG COMPANIES;
6. STIMULATING ESTABLISHMENT OF ENTREPRENEURIAL ZONES;
7. STIMULATING EMPLOYMENT;
8. CO-FINANCING INTRODUCTION OF QUALITY SYSTEMS;
9. CO-FINANCING PRESENTATIONS ON TRADE FAIRS;
10. COLLABORATION ON PROJECTS IN INNOVATION AND INTRODUCTION OF NEW PRODUCTS;
11. INCENTIVES FOR COOPERATIVES;
12. INCENTIVES FOR TRADES AND CRAFTS BUSINESSES;
13. NEW INVESTMENTS AND EXPORT PROMOTION;
14. COOPERATION WITH ENTREPRENEURIAL SUPPORT INSTITUTIONS.
These activities are aimed at achieving the following:
- increasing employment and increasing the average number of employees per business;
- increasing the number of small and medium-sized businesses;
- building new entrepreneurial zones;
- simpler, faster and cheaper access to business loans;
- increasing competitiveness and the level of presentation on foreign markets;
- increasing domestic and foreign direct investments;
- introducing new technologies;
- changing the structure of business activities in favor of production;
- strengthening export orientation and substitution of imports
303
The conclusion can be drawn that the stated objectives are identical both at the regional and the
national level, i.e., that Osijek-Baranja County's Strategy and Regional Operational Program are clearly
compatible with the Strategic Framework for Development 2006-2013.
Strategic Development Framework 2006-2013 is a document that provides comprehensive vision

and an overview of priorities of economic development of the Republic of Croatia in the 2006-2013 period.
This text defines the general strategic objective, the priority fields of activity, as well as the instruments and
activities required for their fulfillment. The general strategic objective of the document is growth and
employment in competitive market economy acting within a European welfare state of the 21st century.
The priority objectives that represent the drivers of development in a short period according to the
stated document are:
-
strengthening the entrepreneurial climate:
affirmation of the new role of the state, and
privatization and restructuring.
Foundations of development that have to be continuously strengthened are: human resources and
infrastructure. Therefore, measures have to be implemented in the following areas:
-
education and labor market efficiency;
science, technology and ICT;
development of transport and energy infrastructure

fostering social cohesion and justice.
Finally, the synergy of prosperity can be achieved only if priorities marked as cohesive elements are
achieved:
-
macroeconomic stability and liberalization of the flow of capital;
efficient and integrated financial services system:
sustainable development (space, nature and regional development).
The Strategic Framework for Development is based on the existing sector strategies, and it has been
created through a process of consultations with representatives of public administration, business and
academic community, civil society and general public, and was adopted by the Government of the Republic
304
of Croatia in 2006. Successful implementation of policies defined in this document will result in acceleration
of the rate of national growth and in faster convergence of average income per capita in Croatia and the
European Union. Economic openness, competitiveness, and the need to change the traditional role of the
state and to include all layers of society in the results of economic growth and development are the
essential starting points for the achievement of the main strategic goal in this seven year period: growth
and employment in competitive market economy acting within a European welfare state of the 21st
century. This strategic goal may be achieved only by simultaneous and harmonized action in the following
ten strategic areas: people, knowledge and education; transport and energy infrastructure; science and IT
technology; social cohesion and justice; macroeconomic stability and openness; integrated financial
services; environmental protection and balanced regional development; entrepreneurial climate;
privatization and restructuring and new role of the state..
The Republic of Croatia is currently at just above 50% of the European GDP per capita average, and
the Strategic Framework for Development 2006-2013 provides projections that Croatia, with the
implementation of the established measures and actions, could reach 75% of that percentage.
Osijek-Baranja County SME promotion program is submitted to the Osijek-Baranja County Assembly
by the Development Agency of Osijek-Baranja County.
The County implements the SME promotion program in collaboration with units of local selfgovernment, entrepreneurship centers and incubators, and all the other institutions that provide support
to small and medium-sized businesses.
Striving to actively contribute to creation of assumptions and environment that will facilitate the
development of entrepreneurship, the County has been undertaking the following activities during 2009:
1. PROVIDING LOANS TO ENTREPRENEURS;
2. DISSEMINATION OF INFORMATION ON AVAILABLE SME INCENTIVE PROGRAMS;
3. PROVIDING CONSULTING SERVICES TO ENTREPRENEURS;
4. PERMANENT EDUCATION;
5. DEVELOPMENT OF START-UP AND YOUNG COMPANIES;
6. STIMULATING ESTABLISHMENT OF ENTREPRENEURIAL ZONES;
7. STIMULATING EMPLOYMENT;
8. CO-FINANCING INTRODUCTION OF QUALITY SYSTEMS;
9. CO-FINANCING PRESENTATIONS ON TRADE FAIRS;
10. COLLABORATION ON PROJECTS IN INNOVATION AND INTRODUCTION OF NEW PRODUCTS;
11. INCENTIVES FOR COOPERATIVES;
12. INCENTIVES FOR TRADES AND CRAFTS BUSINESSES;
13. NEW INVESTMENTS AND EXPORT PROMOTION;
14. COOPERATION WITH ENTREPRENEURIAL SUPPORT INSTITUTIONS.
These activities are aimed at achieving the following:
305
- increasing employment and increasing the average number of employees per business;
- increasing the number of small and medium-sized businesses;
- building new entrepreneurial zones;
- simpler, faster and cheaper access to business loans;
- increasing competitiveness and the level of presentation on foreign markets;
- increasing domestic and foreign direct investments;
- introducing new technologies;
- changing the structure of business activities in favor of production;
- strengthening export orientation and substitution of imports
The conclusion can be drawn that the stated objectives are identical both at the regional and the
national level, i.e., that Osijek-Baranja County's Strategy and Regional Operational Program are clearly
compatible with the Strategic Framework for Development 2006-2013.
Number and amount of requested subsidies by county in 2009
Table 6.
County
Bjelovar-Bilogora
Brod-Posavina
Dubrovnik-Neretva
City of Zagreb
Istria
Karlovac
Koprivnica-Krievci
Krapina-Zagorje
Lika-Senj
Meimurje
Osijek-Baranja
Poega-Slavonia
Primorje-Gorski Kotar
Sisak-Moslavina
Split-Dalmatia
ibenik-Knin
Varadin
Virovitica-Podravina
Vukovar-Syrmia
Zadar
Zagreb
TOTAL:
Number of requested subsidies

398
379
126
2.947
450
395
378
350
97
501
672
219
593
397
647
137
573
178
269
259
824
10.789
Amount of requested subsidies

42.651.734
55.396.870
12.360.929
207.454.255
40.172.800
28.210.027
38.653.589
44.831.277
21.686.371
53.605.835
77.707.004
19.951.934
41.799.479
29.349.280
63.219.743
18.179.198
82.963.230
29.789.223
21.768.780
42.291.783
67.747.072
1.039.790.413
306
Dubrovnik-Neretva
ibenik-Knin
Poega-Slavonia
Lika-Senj
Vukovar-Syrmia
Karlovac
Sisak-Moslavina
Koprivnica-Krievci
Istria
Zadar
Bjelovar-Bilogora
Krapina-Zagorje
Meimurje
Brod-Posavina
Split-Dalmatia
Zagreb
Osijak-Baranja
Varadin
City of Zagreb
Lika-Senj
Dubrovnik-Neretva
ibenik-Knin
Poega-Slavonia
Zadar
Vukovar-Syrmia
Krapina-Zagorje
Koprivnica-Krievci
Brod-Posavina
Karlovac
Sisak-Moslavina
Bjelovar-Bilogora
Istria
Meimurje
Varadin
Split-Dalmatia
Osijek-Baranja
Zagreb
City of Zagreb
Picture 2. Number of requested subsides by county

Total number of requested subsidies
3.500
3.000
2.500
2.000
1.500
1.000
500
Picture 3. Amount of requested subsidies by county
Total amount of requested subsidies
250.000
200.000
150.000
100.000
50.000
307
Subsidies granted by county

Table 7.
County
Bjelovar-Bilogora
Brod-Posavina
Dubrovnik-Neretva
City of Zagreb
Istria
Karlovac
Koprivnica-Krievci
Krapina-Zagorje
Lika-Senj
Meimurje
Osijek-Baranja
Poega-Slavonia
Sisak-Moslavina
Split-Dalmatia
ibenik-Knin
Varadin
Vukovar-Syrmia
Zadar
Zagreb
TOTAL:
Number of subsidies
125
135
34
825
95
101
114
102
24
153
158
56
158
100
155
33
154
51
68
60
225
2.926
Amount of granted subsidies

13.257.920
8.767.080
1.513.500
31.744.110
4.654.320
3.064.824
9.415.439
5.469.829
1.435.060
11.118.384
8.966.440
3.333.600
8.349.250
3.117.418
13.371.113
1.965.800
12.842.681
4.484.718
4.614.372
10.786.298
12.192.800
174.464.956
308
Lika-Senj
ibenik-Knin
Dubrovnik-Neretva
Poega-Slavonia
Zadar
Vukovar-Syrmia
Istria
Sisak-Moslavina
Karlovac
Krapina-Zagorje
Koprivnica-Krievci
Bjelovar-Bilogora
Brod-Posavina
Meimurje
Varadin
Split-Dalmatia
Osijek-Baranja
Zagreb
City of Zagreb
Picture 4. Number of granted subsidies by county

Total number of granted subsidies
900
800
700
600
500
400
300
200
100
Picture 5. Amount of granted subsidies by county
309
Lika-Senj
Dubrovnik-Neretva
ibenik-Knin
Karlovac
Sisak-Moslavina
Poega-Slavonia
Vukovar-Syrmia
Istria
Krapina-Zagorje
Brod-Posavina
Osijek-Baranja
Koprivnica-Krievci
Zadar
Meimurje
Zagreb
Varadin
Bjelovar-Bilogora
Split-Dalmatia
City of Zagreb
Total amount of granted subsidies
35,000,000
30,000,000
25,000,000
20,000,000
15,000,000
10,000,000
5,000,000
310
4. CONCLUSION
Differences in entrepreneurial activity in a country are normally associated with differences in
development of specific areas and Croatia is not an exemption. Therefore, the indicators of TEA (Total
Entrepreneurial Activity) indices for regions of Croatia complement the hard-fact indicators of the general
economic development of these areas, measured by GDP per capita and the rate of unemployment.
TEA index by regions

Table 8.
Region
Zagreb and surroundings
Slavonia and Baranja
Lika and Banovina
Istria, Primorje and Gorski Kotar
Dalmatia
TOTAL
2002.
4,89
2,11
2,71
4,47
3,95
3,62
2003.
4,30
1,00
1,78
3,05
2,43
2,56
2004.
4,42
4,44
3,99
5,29
1,68
3,74
2005.
8,43
4,91
5,11
5,74
6,34
6,11
2006.
7,77
8,94
8,69
7,10
9,85
8,58
2007.
7,27
7,18
8,81
9,60
8,92
8,92
Osijek-Baranja County was in the last place by the share of new businesses in the total among all
counties (2006 data). The share of new entrepreneurs was only 12,8%.
By competitiveness of its economy, Osijek-Baranja County ranks 14th among all the counties and
the city of Zagreb. By the quality of business sector it ranks 13th and only 15th by the business
environment.
These results reflect a clear and present need for urgent cooperative efforts on local level in
strengthening of competitiveness, and be an open call to key people in national politics for regional
development, to make additional efforts in balancing regional development and implement programs for
improving business environment factors.
It is apparent that the region hasnt used its economic potentials (natural and human resources) to
its advantage. The measures which are supposed to enable better utilization of those potentials are not in
the right sense strategically and operationally designed.
For solving this problem it is necessary to create local strategies and operational programs which
would be composed of all kinds of supports in function of quicker and more quality development of those
potentials.
311
Despite the fact that institutions on national and regional level offer all kinds of different
development projects and incentive programs, and the fact there is a significant number of both public and
private business support institutions operating in the County, this sector still did not yield the expected
results.
All the business support institutions covered in this context analysis (public institutions, local and
regional government bodies, business incubators, technology development centres, centres for
entrepreneurship) offer various types of support to entrepreneurs. However, not all of them are recognized
in their business environment or even effective enough in achieving their main goals.
The entrepreneurs themselves say that the most important day-to-day challenges they face are: the
system and habits of payment (not paying), dumping prices and lack of market standards, lack of education
and adequate personnel, funding sources (especially for micro-scale businesses), lack of regional
development plan, which would enable the business activities and products to be formed in a more suitable
way, frivolous economic policy (which discourages investments), and the short-term threat to the entire
economy due to ongoing recession.
Generally everybody agrees that the region needs new business support institutions that would
help entrepreneurs with new products creation, development of marketing plans and projecting possible
models of favourable funding opportunities for start-up investments.
The type of assistance entrepreneurs would expect from the ideal new business support institution:
- Connecting businesses for applying to EU pre-accession funds

- Market research for entrepreneurs
- Sales assistance
- Export assistance
- Collection of debt assistance
In the development of a competitive economic environment it is essential to align all the
development strategies, supporting operating programs, action plans and identify organizations
responsible for carrying out these activities which will raise the overall economic activity based on using all
312
productive resources and comparative advantages in relation to other participants at the local, national and
international markets.
313
BOSNIA AND HERZEGOVINA SARAJEVO CANTON

1.
Table 1:
2004
2005
2006
2007
2008
STRUCTURE
GDP (mln Eur)
1621
1880
2181
2542
2790
GDP ( y/y)
109,24
1,16
1,16
1,17
1,10
3869
4488
5206
5804
6624
Agriculture
**
**
**
**
**
Industry
**
**
**
**
**
Services
**
**
**
**
**
102,3
99,4
108,5
121,8
123,8
N active companies*
5148
5148
9444
10203
11124
4532
5356
**
**
**
**
**
**
**
**
Agriculture
**
**
**
**
**
Industry
**
**
**
**
**
Services
**
**
**
**
**
Structure GDP (%):
EMPLOYMENT
90
80
95
109
118
**
**
**
**
**
Manufacturing (%)
13,3
15,22
13,17
12,52
12,07
Wholesale and retail trade (%)
12,24
13,06
13,90
17,80
18,92
Public administration and
12,32
12,10
11,70
11,07
10,92
defence (%)
**
4547734
4955325
5620705
6597417
314
(Eur)
558
521
652
714
803
**
**
**
**
**
**
**
**
**
**
Unemployment (%)
41,5
39,65
41,8
37,3
34,5
Primary
44213
45618
46063
43736
41113
16300
18062
18456
17509
16977
3198
3857
4037
4099
4385
FOREIGN TRADE
832
1530
1411
1703
2187
1. (78 Road Vehicles)
N/a
N/a
N/a
154
220
2.(71 Power generating machinery and
N/a
N/a
N/a
89
76
N/a
N/a
N/a
36
346
137
269
321
371
383
1. (35 Electric current)
N/a
N/a
N/a
57
96
2. (71 Power generating machinery and
N/a
N/a
N/a
88
60
N/a
N/a
N/a
31
31
-695
-1261
-1090
-1332
-1804
1. Germany
**
**
**
252
295
2. Croatia
**
**
**
102
437
3. Slovenia
**
**
**
N/a
156
**
**
370
598
584
**
**
**
**
**
Sector B
**
**
**
**
**
Sector C
**
**
**
**
**
equipment)
3. (33 Petroleum and petroleum
products)
equipment)
3. (82 Furniture and parts thereof)

Main FDI sectors
** - this information is not available in local statistics for cantons in FBIH
Total gross value of goods and services produced by producers in Canton Sarajevo in 2007 was
4.588 million . 67% of total gross value has been produced by transportation, warehousing and
315
communication sector, processing industry, public administration and defense, obligatory social insurance,
wholesale and retail and electricity, gas and water supplies.
Gross Domestic Product (GDP) is amounted to 2,542 billion . The biggest share in GDP has
transportation, warehousing and communication sector with 18, 6%, then goes public administration with
17, 6%. Trade participates with 11, 4%, and industry with 10, 6%.
The biggest share in number of employees has trade sector, then industry, public administration,
transportation, warehousing and education.
According to statistical register for 2007, Sarajevo Canton has 26.932 businesses that represent
over 28% of all businesses registered in Federation of Bosnia and Herzegovina that has 108.742 registered
businesses. Out of total, 10.203 are legal persons, 4.887 are business units and 11.842 are crafts.
Over one third is registered for trade, 33, 4%, and 44% of legal persons/businesses comes from four
main sectors where industry sector covers 10, 8%.
Total value of realized investments in new fix assets in 2007 is 462 million . Analysis of investment
structure shows that around 65% of investments are placed in following sectors: wholesale and retail sector
(24, 9%), processing industry (21, 8%) and public administration and defense; obligatory social insurance
(18, 2%). Total income/revenue in 2007 was around 6, 5 billion that is more then 67, 8% higher than in
2003. Income average growth rate has been 13, 8%.
In the period of 2003 2007, the biggest income has been achieved by trade sector, 43, 5% in 2003
and 47, 6% in 2007. Right after the trade by volume of revenues generated in 2003 and 2007 come industry
with 14.1% or 17.1% share in total income. Revenue generated in the industry is doubled and its 1,3 billion.
It grew at a rate of 19.4% per year.
Total expenditure was over 6, 2 billion , and higher about 1.6 times then actual expenditure of
2003rd.
In the period 2003-2007 year, the biggest expense was realized in trade, 42.5% in 2003 and 48.1%
in 2007 followed by the industry with actual expenditure of 14.7% in 2003, or 17.1% in 2007.
316
Profit realized in the Sarajevo Canton area in 2007 was around 293 million that is 1.8 times more
than in 2003.
Of the total profit in the period 2003-2007, the largest share has traffic, warehouse and
communication, 49.4% in 2003 and 32% in 2007. Profit in industry sector is increased for 77, 2% and grow
15,4% yearly.
The actual loss in 2007 was over 133, 5 million , which is 1.8 times less than in 2003. In creating a
loss of 2003 the largest share had a sector of electricity, gas and water supply, 37.7%, and in 2007 the
largest share had the industry with 23%. In this period the loss in industry was reduced by over 50%.
Since 2003 until 2007, population of Sarajevo Canton has been growing at a rate of 1.1% annually
and reached number of approximately 419 030.
In comparison to 2003 there was a change in age structure by reducing the number of younger
population and an increase in the elderly population above 65 years. Thus, in 2007 the population under 15
years of age accounts for 16.7%, working population 67%, and the population above 65 years of age, 16.3%
of the total population.
Gross domestic product per person (GDP / pc) is doubled, reached $ 8,299, and grew at a rate of
18.5% annually. Export is also doubled and amounted to 371 million , and imports are 4.5 times larger
than exports, and amount to 1703 million . The scope of foreign trade was 2.074 million and grew with
an average of 24% per year. Exports record a lower growth of 19.7%, while imports grew 25.1% annually.
Number of employees is increased over 34% and amounts to 115.569. The rate of employment growth in
this period is 7.6% per year. Level of population employment ratio increased from 21.5 in 2003 to 27.6 in
2007.
Analysis of employment by industry / area displays the dominance of industry and commerce
throughout the entire period, but with a tendency to reduce the participation of industry in total
employment by 17.1% (14.704 employed) in 2003 to 12.1% (13.990 employed) in 2007, and with a
tendency to increase in trade with 13% (11.197 employed) in 2003 to 19.7% (22.751 employed) in 2007.
In 2007, there were 65.344 unemployed persons. The number of unemployed has increased by
about 9% and grew by 2.2% annually. The unemployment rate decreased from 41% to 36.1%.
317
In the period from 2003 until 2006, in the area of Canton Sarajevo around 1.94 million
investments were paid, and the realization was 1.43 million or 74.2%.
During this period the amount paid for the investment grew at an average annual rate of 10.2% and
realized investments grew at a rate of 9.2%.
Income of legal persons/businesses, that keeping accounting records according to the valid
accounting regulations, is increased from 3.88 billion in 2003 to 6.54 billion in 2007, or 68%. It grew in
average of a 13.8% annually.
In the same time, the expenditures grew from 3.93 billion to almost over 6.34 billion , or around
60%.
Profit has been increased for almost 80% and reach amount of 293 million . Profit grew at average
annual rate of 15.8%.
Loss is decreased by 50% and reach amount of 133.5 million . It has been decreased at average
annual rate of 13.4%.
Value to business assets is increased from 8.94 billion in 2003 to 10.4 billion in 2007, and capital
is decreased from 6.69 billion to 6.08 billion .
Net salaries are increased for about 75%, from 208 to 364.5 .
1.2 Main sectors

2006
2007
2008
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
Output volume (y/y)
n.a.
n.a.
n.a.
Employment (n)
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
318
Productivity (y/y)
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
Import (mln Eur)
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
1.
Country; value
Country; value
Country; value
2.
Country; value
Country; value
Country; value
3.
Country; value
Country; value
Country; value
Export (mln Eur)
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
Country; value
Country; value
(Eur)
1.
Country;
value
(mln Eur)
2.
Country; value
Country; value
Country; value
3.
Country; value
Country; value
Country; value
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
mln Eur)

IT sector of Bosnia and Herzegovina can be considered as an emerging sector. It size for 2009 was
162 million USD. Divided in a several segments like IT services, Packaged Software, Hardware systems,
Storage, Hardcopy peripherals and networking equipment, presents potential for future development.
Bosnia and Herzegovina is a small market that to the certain extent limits development potential of the IT
sector that is drove by domestic demand concentrated in three sectors Finance, Government and
Telecommunication. So in order to overcome development limitation of domestic market focus should be
given to the companies that offer its IT services and products on international market. Of course those
certain segments like 0utsourcing and Application Consulting and Customization already providing service
to foreign costumers and markets. It has modest market share but big development potential. Segment
needs enough number of young professionals capable to answer to all service requests as well as good
business connections abroad. Quality and Prices of IT experts in Bosnia and Herzegovina still give enough
space for success in the international markets. Potential IT Outsourcing Centre that should support
connections between domestic IT companies and foreign markets could be an IT development project.
319
Centre would also provide service to young IT experts who wants to start it own company or to join to the
existing ones.
In 2006, Ministry of Defense of Bosnia and Herzegovina has sent information to the Presidency of
Bosnia and Herzegovina about non perspective facilities/locations for Army Forces of Bosnia and
Herzegovina. After this information BiH Presidency has brought decision in July 2006 about size, structure
and locations of BiH Army Forces, and in January 2008 Decision about changes and amendments of a first
decision that defines perspective military locations for Army Forces of Bosnia and Herzegovina. Total
number of military locations is 69, 21 in the Republic of Srpska and 48 in the Federation of Bosnia and
Herzegovina. Number of non perspective military locations is 54, 11 in Republic of Srpska and 43 in
Federation of Bosnia and Herzegovina. Till now, 21 military locations can be handover to the entities, which
will define final purpose of these locations.
In a Sarajevo Canton there are 10 perspective and 29 non perspective military locations. Out of 29
non perspective locations, 4 are temporary needed to Army Forces. These 4 locations will be handover to
civil authorities in certain period of time. 3 locations are ready for handover to civil authorities. 16 locations
are already handover to certain levels of civil authorities and some of them are used by BiH Court.
Municipalities show an interest in these location and some of them already create project for future
economic development use of these sites (Municipality Hadidi).
Tables below give a list of perspective and non perspective military locations in Canton Sarajevo.
Table of perspective military locations
LOCATION NAME
TYPE
PERSPECTIVES
CITY/MUNICIPALITY
SURFACE
AREA
(M2)
Butile
Barrack
Perspective
Sarajevo/Novi Grad
1.099.183
Rajlovac
Barrack
Perspective
Sarajevo/Novi Grad
1.136.608
Zaim Imamovid
Barrack
Perspective
Hadidi
96.240
9.414
23
Warehouse
Perspective
Hadidi
399.750
6.422
32
Administration
Perspective
Sarajevo/Stari Grad
21.818
Krupa
FMO
H.Kreevljakovida
98
MO BiH Bistrik
no. 5
Perspective
Sarajevo/Stari Grad
2.685
5.204
avnici Poligon
Administration
Training
ground
Perspective
Hadidi
NO
SIZE OF
BUILDINGS
(M2)
NUMBER
OF
BUILDINGS
40.526
56
16
1.592.881
320
NOTE
8
9
10
Location Butmir
Trebevika 72
"BOSUT"
Barrack
Perspective
Ilida
60.000
RR Hub
Perspective
Sarajevo/Stari Grad
15.990
Dom OS BiH
House of Army
Perspective
Sarajevo/Stari Grad
2.213
3.703
Table of non perspective military locations

NO
1
2
LOCATION NAME
TYPE
PERSPECTIVES
CITY/
MUNICIPALITY
Blauj
Enver ehoviSemizovac
Barrack
Nonperspective
Ilida
Barrack
Nonperspective
Vogoda
SBS unovnica
Barrack
Nonperspective
emso Baruija
Barrack
Nonperspective
Barrack
Nonperspective
Barrack
Barrack
RR Hub
Nonperspective
Nonperspective
Nonperspective
Administati
on
Nonperspective
Sarajevo/Stari
Grad
Airport
Warehouse
Barrack
Nonperspective
Nonperspective
Nonperspective
Ilida
Ilija
Hadidi
Barrack
Nonperspective
Sarajevo/Stari
Grad
14
Safet Zajko
Safet HadidJajce
Delijai
RR Bjelanica
FMO
H.Kreevljakovi
da 96
Aerodrom
Butmir
Misoa
Tarin
Mustafa
HajrulahovidTalijan Zmajevac
Kasarna
komande 1.
Korpusa
Hadidi
Sarajevo/Novo
Sarajevo
Sarajevo/Novi
Grad
Sarajevo/Stari
Grad
Trnovo
Trnovo
Barrack
Nonperspective
15
16
17
Vojna Bolnica
Uivak
Zamo Duid
Hospital
Barrack
Barrack
Nonperspective
Nonperspective
Nonperspective
18
Barrack
Administati
on
Nonperspective
19
Bijela Tabija
Damija na
Igmanu
20
Betanija
land
Nonperspective
6
7
8
9
10
11
12
13
Nonperspective
Sarajevo/Novi
Grad
Sarajevo/Cent
ar
Hadidi
Ilija
Sarajevo/Stari
Grad
Ilida
Sarajevo/Cent
ar
SURFACE
AREA (M2)
SIZE OF
BUILDINGS
(M2)
NUMBER
OF
BUILDINGS
NOTE
94.614
6.581
23
Temporary needed
149.005
12.558
54
Temporary needed
Temporary needed Municipality Hadid
have created project
for this site already
1.725.188
6.925
10
52.103
1.155
109.618
16.923
53
For handover
8.800
7.370
2.100
6
4
For handover
30.130
1.500
Temporary needed
Handover in 2009
Handover in 2008
1.200
2.799
650
21
1
68.700
2.370
Handover
8.200
3.300
Handover
Handover
4.794
1.563
7
21
4
60.000
404.403
22.000
95.129
1.120.000
Handover
12.541
Handover in 2006
Handover
Handover in 2005
Handover in 2005
Handover in 2006
120
88.464
Handover in 2006
Handover
Handover
321
21
22
23
24
25
26
27
28
29
Kasarna Maral
Tito
Kasarna Ramiz
Salin
Strelite
"Paino Brdo"
Daljani Poligon
Zemljite
Brezovaa
Rajlovac
Trubaeva kosa
Strelite
"Grbavica
Grdonj
Barrack
Nonperspective
Barrack
Nonperspective
land
Nonperspective
Training
ground
land
land
land
land
land
Nonperspective
Nonperspective
Nonperspective
Nonperspective
Nonperspective
Nonperspective
Sarajevo/Cent
ar
Sarajevo/Novi
Grad
Sarajevo/Stari
Grad
Hadidi
Hadidi
Sarajevo/Novi
Grad
Sarajevo/Novo
Sarajevo
Sarajevo/Novo
Sarajevo
Sarajevo/Cent
ar
309.000
28.000
45
Handover in 1996 and

one part is sold to
American Embassy
BiH Court
411.380
For handover
756.215
Facility is in Army
register but never
occupied and used by
Army Forces
8.040
Facility is in Army
register but never
Army Forces
486
land is usurp (Facility

is in Army register but
never occupied and
used by Army Forces)
22.703
unlicensed
construction (Facility
never occupied and
63.694
unlicensed
construction (Facility
never occupied and
22.300
Facility is in Army
register but never
Army Forces
Municipalities of Canton Sarajevo are reported 14 industrial entrepreneurial zones, 6 Greenfields, 7

Brownfields and 1 Tourist zone. Table below gives a rank of industrial-business zones in Canton Sarajevo
according to the Study of Industrial zones in Sarajevo Macroeconomic Region.
322
Total score
Brownfield
Name
RANK
Municipality
Canton
Rank of Ind.
zones
Rank of
Municipalities
Total
1,22
1,55
1,35
1,42
1,52
1,46
Slobodna zona
Vogoda
Energoinvest Stup Ilida
Canton
Sarajevo
Canton
Sarajevo
Vlakovo Blauj
Ilida
Canton
Sarajevo
1,54
1,52
1,53
Ilida
Canton
Sarajevo
1,76
1,52
1,67
1,84
1,85
1,84
1,96
2,32
2,10
1,70
3,67
2,49
3
4
Vogoda
Famos Holding
Canton
Sarajevo
5
6
7
Boce Binjeevo
Hadidi
Novi Grad
Sarajevo
Rajlovac
eljezara Ilija
Ilija
Canton
Sarajevo
Canton
Sarajevo
Total score
Greenfield
RANK
Name
Municipality
Canton
Rank of
Ind. zones
Rank of
Municipalities
Total
1,52
1,85
1,72
1,84
1,85
1,84
2,20
2,32
2,27
Merdanovida
polje
Hadidi
Canton
Sarajevo
Boce
Binjeevo
Hadidi
Baidi
Novi Grad
Sarajevo
Canton
Sarajevo
Canton
Sarajevo
Vogoda
Canton
Sarajevo
3,36
1,55
2,27
Novi Grad
Sarajevo
Canton
Sarajevo
3,42
2,32
2,76
Canton
Sarajevo
2,96
3,67
3,39
Ugorsko
Donje
Telalovo Polje
Luko Polje
Ilija
323
Most of industrial business zones in Canton Sarajevo still offer sites for interested investors.
Brownfields are mostly privatized by local companies and private investors, but they in the most cases do
not use these for business activities. These owners usually sell a land and industrial halls to the interested
companies. Problem lies in a fact that most industrial business zones does not have management
infrastructure that should provide information about available business facilities, so interested investor
needs to investigate what is available, who is the owner and other.
Greenfields can be divided on those already prepared for investors and those who are in the
preparation phase. Greenfields that is ready for investors are Merdanovida polje, Boce Binjeevo and
Ugorsko. Municipalities have managed to build basic infrastructure and to sell a land to investors through
public procurement procedure. Greenfield Ugorsko in a municipality Vogoda is fully equipped with all
infrastructures and 19 parcels are sold to the potential investors three years ago. Unfortunately only three
investors have realized investments till now.
Greenfields in municipality Hadidi can be seen as a good successful case of Greenfield
development since their Greenfield zones are populated with Greenfield investments that have created
many jobs in previous period.
Others are still in the development phase, preparing planning documents and projects for
construction of needed infrastructure. Basic problem of these sites is ownership of a land that is in a private
possession and requires big investment in a land acquisition by municipalities. Second problem is a
substantial investment in necessary infrastructure.
New fully equipped industrial business zones (ready to investment) in Canton Sarajevo are needed
together with organization that will manage and promote those new zones.
2.
ANALYSIS OF THE POLICY FRAMEWORK

Institutional administration framework related to the economic development management is
divided on several levels of authority. The first and highest level is entity level, where entities governments
throughout the ministries for economy and development implements various programs aimed at
324
development of the SME sector and business infrastructure.
Second level is cantonal level in the
Federation of BiH entity, while in Republic of Srpska second and basic level are municipalities. The third and
lowest level in Federation of BiH is municipality level.
All above mentioned levels cooperates in the implementation of economic development programs
and projects, and all have their own projects and budgets for economic development support as well.
Entities, cantons and municipalities have their own economic development policies and strategic
economic development plans. Joint characteristic of these policies and plans are support to the SME
development and entrepreneurship, as well as development of the business supporting infrastructure e.g.
industrial, entrepreneurial, business zones, technology parks and business incubators.
In the Federation of BiH, Ministry of Development, Entrepreneurship and Crafts is responsible for
administrative, expert and other duties from Federation jurisdiction related to support to development,
entrepreneurship and crafts, provision of support for application of the innovations and introduction of
modern technologies in area of entrepreneurship and crafts, enlargement of the entrepreneurship and
crafts share in overall economy, organization of the entrepreneurial institutions and creation of the
entrepreneurial infrastructure, training of entrepreneurs and crafters through regular and additional
education and other duties specified by law (Official gazette 19/03 and 38/05 Law on Federal Ministries and
other bodies of Federal Authority).
Law on Incentives for Development of SME Sector (Official gazette of Federation of BiH No. 19/06)
of the Federation of BiH regulates:
planning, provision of resources/funds and implementation of measures for development
of the SME sector in the Federation of BiH;
Activities and measures of the Federal Government related to support to the SME sector
development;
Monitoring of the Law implementation;
Penalties and other issues related to support to the SME sector.
In 2010, Federal Ministry of Development, Entrepreneurship and Crafts has funded projects in 196
crafts, 158 old traditional crafts, 80 SMEs and 41 municipalities through a Program for Development of the
325
SME sector. Total assets (2005 - 2010) allocated for the development of entrepreneurial infrastructure in
the Federation of BiH are amounted to 9.170.000 KM, from which 3.000.000 KM goes for development of
industrial, business zones in municipalities.
Federal Ministry of Energy, Mining and Industry have certain support for companies, as well.
Ministry of Economy of Canton Sarajevo hadnt have funds to support development of the SME
sector in 2009 and 2010. Financial support in 2010 has been available to 154 old traditional craft in the
amount of 590 KM per craft. In the period from 2005 to 2008, Ministry of Economy of the Canton Sarajevo
has had a credit fund for SMEs under the very supportive conditions. Funds have been available through
the contracted bank under very favorable conditions (one year grace period, 5 years return period, 2%
interest rate, credits from 100.000 KM to 1.000.000 KM). In 2008, 12 SMEs has been used this credits in the
total amount of 2.850.000 KM. In 2007 a 43 SMEs has been used this credits in total amount of 5.500.000
KM and in the period 2006, 2005, 60 SMEs has been used this credits in total amount of 10.000.000 KM.
Support for a start ups are available through business incubators and business centers. In the
Canton Sarajevo there is a one Service Business Incubator that is founded and managed by the regional
development agency SERDA. It provides office space under favorable prices for startups. Municipality
Center Sarajevo and Novi Grad Sarajevo has Business Center that provides training and education services
to craft, entrepreneurs and unemployed persons.
According to the Strategy for Development of the Business Incubators in BiH for 2010/2011,
business incubators manage 27.000 m2 of business space. Since 2001, more than 230 companies have been
used services of business incubators (or still using) with around 1.100 employees. There are 12 registered
business incubators in BiH. Investment in their development is amounted to 7.727.611 KM + cca 3.000.000
for BIT Center in Tuzla.
Incentives for foreign investors:
ESTABLISHED FOREIGN INVESTORS SUPPORT FOUND. In order to encourage foreign investors and
contribute to the predictable business environment the Council of Ministers established the Foreign
Investors Supports Fund in 2007 as a financial incentive for investors.
The Law on the Policy of Foreign Direct Investments of Bosnia and Herzegovina (Official Gazette of
BiH, 17/98, 13/03) ensures national treatment of foreign investors, i.e, foreign investors have the same
rights and obligations as residents of BiH.
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Foreign investors are entitled to open accounts in any commercial bank in domestic and/or any
freely convertible currency on the territory of BiH.
Foreign investors are entitled to freely employ foreign nationals, subject to the labour and
immigration laws in BiH.
Foreign investors are protected against nationalisation, expropriation, requisition or measures
having similar effects; such measures may take place only in the public interest in accordance with the
applicable laws and regulations and against the payment of an appropriate compensation, i.e.
compensation that is adequate, effective and prompt.
Investment capital is exempt from paying import customs and customs duties (with the exception
of passenger cars, slot and gambling machines).
In order to enjoy this benefit, the foreign investor should submit a written request for exemption
from paying import duties to the competent customs authority (according to the place of seat of the
company) along with the following documents:
- contract or other relevant document about the investment on the basis of which the equipment is
being imported,
proof of registration of the investment at the competent authority,
- equipment of specification with tariff number, tariff mark (with quantity indication), single and total
value, certified by the investor,
- statement of the investor that the equipment is not older than 10 year age limit,
- certificate of the competent institution confirming that the imported equipment complies with the
environmental and employment protection standards.
The Customs Office issues a decision within 15 days upon submission of the request.
The rights and benefits of foreign investors granted and obligations imposed by the Law on the
Policy of Foreign Direct Investment (mentioned above) cannot be terminated or overruled by subsequent
laws and regulations. Should a subsequent law or regulation be more favourable to foreign investors, the
investor will have the right to choose the regime by which the investment will be regulated.
Foreign investors may own real estate in BiH. Foreign investors enjoy the same property rights in
respect to real estate as BiH citizens and legal entities.
Foreign investors are entitled to transfer abroad, freely and without delay, in convertible currency,
proceeds resulting from their investment in BiH.
327
Free trade zones in BiH are part of the customs territory of BiH and have status of legal entity.
According to the Law on Free Trade Zones, free trade zone founders may be one or more domestic and
foreign legal entities registered in BiH. The users of free zone do not pay VAT and import customs for
manufacturing equipment. Investment in the free zone, transfer of profit and transfer of investment are
free of charge. The free zone establishment is considered economically justified if the submitted feasibility
study and other evidence can prove that the value of goods exported from a free zone will exceed at least
50% of the total value of manufactured goods leaving the free zone within the period of 12 months.
Tax exemptions. The Federation Law on the Corporate Income Tax enables the taxpayer, who in the
year for which the corporate income tax is being determined, has achieved 30% of their total revenue by
export to be exempted from the tax payment for that year.
Taxpayer who in the period of five consequent years invests into production in the value of
minimum 20 million KM, on the territory of the Federation of Bosnia and Herzegovina, is being exempted
from the payment of corporate income tax for the period of five years beginning from the first investment
year, in which minimum four million KM must be invested.
If taxpayer from the above paragraph, in the time period of five years, does not achieve the
prescribed census for investment, they lose the right of tax exemption, and the unpaid corporate income
tax is being determined in accordance with the provisions of the Law on the Corporate Income Tax
augmented for penalty interest payable for untimely paid public revenues.
In the Federation of BiH, taxpayer who employs more than 50% of disabled persons and persons
with special needs longer than one year is being exempted from the payment of corporate income tax for
the year in which more than 50% disabled persons and persons with special needs were employed.
FDI insurance instruments in Bosnia and Herzegovina
Foreign investors concerned about risks of transfer restrictions, expropriation, war and civil
disturbances and denial of justice, can be insured against these risks with the European Union Investment
Guarantee Trust Fund for Bosnia and Herzegovina, administered by the Multilateral Investment Guarantee
Agency (MIGA, member of the World Bank Group).
BiH is eligible for assistance from the US Overseas Private Investment Corporation (OPIC), which
also provides political risk insurance for investors.
328
Bosnia and Herzegovina have signed free trade agreements with Albania, Macedonia, Kosovo,
Serbia, Moldova, Montenegro and Croatia.
Bosnia and Herzegovina have Preferential Export Regimes with EU and several other countries.
According to the preferential export regime with the European Union, all goods of BiH origin that fulfill EU
technical-technological standards and conditions, can be imported to all 27 EU countries until the end of
2010 without any quantitative restriction and without paying customs and other similar duties.
BiH also has preferential regimes with USA, Australia, New Zealand, Switzerland, Norway, Russia,
Japan, Canada and Iran.
At the end, we can say that the amount of funds allocated for economic development needs at all
levels are fare from sufficient to satisfy economic development needs. For example, for industrial,
entrepreneurial, business zones development in the Federation of BiH only 3.000.000 KM is awarded for
these projects in 41 municipalities that cover only a small fraction of overall costs of industrial,
entrepreneurial zones development.
Certain support comes from Cantonal funds that co-fund these
projects in their municipalities.
Business incubators are in the most cases struggling to cover its running costs, unable to offer
additional support services to startups and entrepreneurs. Most of them have certain financial support
from their host municipality, but it is in the most cases very limited. They are usually supported by
multilateral or bilateral donors through its economic development assistance.
FDI are mostly supported by Foreign Investments Promotion Agency FIPA, that offers information
about conditions for investments in BiH and manage some instruments for investments attraction on the
national level. Unfortunately, FIPA cannot do this important task alone. It needs to be used by lower levels,
especially municipalities that in the most cases do not have enough understanding about importance of
local economic development, and possibilities that could arise from a proactive approach to investors.
Sufficient government funding will enable growth and development of BSOs and enable them to
support entrepreneurship and SME sector more effectively.
329

EU assistance for supporting SMEs has been realizing through economic development projects.
During the CARDS program, several projects have been realized. Projects that have been realized in the
CARDS framework are EU Quick Impact Facilities Project I and II (EU QIF) implemented by the CARE
International, EU Regional Economic Development I and II (EU RED) implemented by Eurecna consortium,
EU Training and Consultancy Project (EU TAC). All of them have had one of the goals to support
development of SMEs in Bosnia and Herzegovina. All are implemented by the foreign consulting companies
and provided training and consulting services to the SMEs as well as limited funding for its development
activities. Projects have also supported establishment of several business support organizations like
Association of Business Consultants in Bosnia and Herzegovina-LESPnet, Association for Capacity Building
and Development EU TAC, Business Incubators in Mostar and Sarajevo as well as 5 regional development
agencies (SERDA; NERDA; REZ; REDAH and ARDA). Estimated total value of these projects is 15 to 20 million
.
From 2007, Instrument of Pre-Accession IPA, has replaced former pre-accession instruments:
PHARE, CARDS, ISPA and SAPARD. 11 projects for support of micro, small and medium enterprises
(MSMEs) and development of tourism in Bosnia and Herzegovina is financed in 2010 by the EU through
Instrument of pre-accession assistance (IPA) in the amount of 3,8 million Euros thus helping the economic
growth as well as harmonization of standards in countries that are programme users with European
standard. Selected projects will also focus on creation and strengthening of tourism products in protected
eco zones, actions of networking among entrepreneurs, associations and local authorities in tourism sector.
IPA Component II Cross Border Cooperation is also available for BiH. Under IPA Component II,
BiH is participating in six Programmes: IPA Adriatic CBC Programme, three bilateral CBC programmes with
neighbouring countries: Croatia, Serbia and Montenegro and two trans-national programmes, the SouthEast European Space (SEES) and the Mediterranean trans-national programme (MED).
The European Investment Bank (EIB), the European Union's long-term financing institution, is
lending EUR 30 million to Raiffeisen Bank Bosnia Herzegovina and to Raiffeisen Leasing. The funds will be
used to provide long-term financing for small and medium-sized enterprises (SMEs) and infrastructure
investments in Bosnia and Herzegovina.
330
The EIB global loan (line of credit) to the two subsidiaries of the Raiffeisen Zentral Bank Austria aims
at tackling the scarcity of funds for investment needed to sustain development and economic growth in the
country. With the funds stemming from the EIB, up to 50% of the eligible project cost may be financed. The
term for infrastructure projects is 15 years; loans for SMEs may go up to 12 years.
Raiffeisen Bank Bosnia Herzegovina will be able to respond to the long-term needs of small and
medium scale businesses that represent an important source of job creation, and of local authorities,
particularly of municipalities, which contribute to raising the living standards of the populations concerned
through investments in urban infrastructure. Raiffeisen Leasing will be in the position to support, in
particular, industrial SMEs contributing as well to develop leasing operations in the local financial market. .
Both financial institutions will be passing on to their clients the long-term benefits offered by the EIB.
Up to April 2005 the EIB has signed loan contracts totalling EUR 185 million for projects located in
Bosnia and Herzegovina. Four projects have been supported: roads, railways, electricity and a cement
factory. Towards the future the EIB aims at underpinning transport infrastructure, SMEs, urban
infrastructure and health.
Industrial/Business zones have been treated by several domestic institutions and BSOs. Regional
development agencies of Sarajevo Macro Region (SERDA) and Central BiH Region (REZ) have studies about
possibilities for development of the industrial business zones in their municipalities. Those studies have
clearly indentified all Brownfields and Greenfields and collect informations about size, available
infrastructure, land prices and ownership status of the land and suggest steps for its development.
Federal Ministry of Development, Entrepreneurship and Crafts since 2005 has a line that financially
supports industrial business zone development. Initially those funds has been very limited and divided on
certain number of municipalities for creation of necessary planed documents and construction of needed
infrastructure. This fund growing every year and overall available funding for industrial zones development
in 2010 in the Federation of BiH was 3.000.000 KM.
331
Some cantons have funds for development of the industrial business zones and other business
support infrastructure like business incubators. From 2003 up to 2006 Canton Sarajevo have supported
development of industrial zones in municipalities Ilida, Hadidi and Vogoa with more than 2.000.000 KM.
EU didnt support development of the industrial business zones in BiH so far. Several Business
incubators have been supported.
Under IPA 2009, EU announced plans to support development of the industrial zones through a
project called Support to Establishment and Strengthening of Business Infrastructure to Improve SME
Competitiveness. The project will provide technical assistance to generate economic growth and
employment by supporting the development of business zones. The assistance will establish and
strengthen business infrastructure to improve SME competiveness. The purpose and goal of establishing
business zones in this project is to encourage a more rapid development of entrepreneurship through
suitable and easier access to a physical space where entrepreneurs can conduct their businesses. Forecast
tender is already announced at the Delegation to European Union to BiH web site. It will be implemented
as a service contract with indicative budget of 1.5 million . Publication of official procurement notice is
scheduled for June 2010. Unfortunately, funding for construction of industrial business zones infrastructure
(e.g. power supply installations, water supply and sewage, est.) isnt planed. Expected date of the project
start is second half of 2011.
Business support organizations in Canton Sarajevo are consists of Chamber of Economy of Canton
Sarajevo, Sarajevo Economic Region Development Agency-SERDA, Business Support Centers of
municipalities Center and Novi Grad Sarajevo, Association of Business Consultants in BiH-LESPnet,
Association for Capacity Building and Development EU TAC and Foreign Trade Chamber of BiH.
Chamber of Economy of Canton Sarajevo during 2003 has been face with changes based on a Law
on modification and supplement of the Law on Chambers of Economy in the F B&H (Official Gazette 34/03)
that terminated obligatory membership in the Chambers of Commerces in FBiH. This change leaves
Chamber of Economy of Canton Sarajevo without many members and revenues, and forces them to
restructure entire business philosophy toward market oriented approach that should ensure sustainability.
As a result of these changes Chamber of Economy of Canton Sarajevo has developed set of commercial
332
services that has been offering to the its clients, private and public companies and organizations. Chamber
also offers education seminars in different areas like ISO, CE marking, finances, management, marketing
and whole range of business related issues. Beside education/capacity building program, Chamber is active
in field of connecting local businesses with counterparts from abroad. This activity is usually done in
cooperation with Foreign Chambers of Commerce through organization of B2B events in Sarajevo and
abroad. Chamber maintains relationship with Cantonal and local authorities and always attempt to support
and participate in planning and implementation of a Cantonal and local economic development activities.
Sarajevo Region Development Agency SERDA is established in 2001. Various types of international
donors and development agencies has been supporting concept of regional development in Bosnia and
Herzegovina, and SERDA is one of five RDAs in Bosnia and Herzegovina that is heavily involved in all
regional economic development projects. SERDA offers several support services to SMEs and start ups. The
most important ones are Business Service Incubator and Credit Warranty Scheme. They are also very active
in the development of business infrastructures in 32 municipalities of Sarajevo Macroeconomic Region.
They have realized several studies related to development of industrial business zones, development of
rural areas, ecology and other. SERDA have been implemented project that have supported establishing of
Business Centers in municipalities of Sarajevo Macroeconomic Region.
SERDA is also heavily involved in capacity building of private and public sector. They have been
organizing education seminars and trainings for Cantonal and Municipality officers in area of PCM and
other related fields. They are organizing vocational seminars for unemployed persons as well as trainings
for startups and entrepreneurs.
Business Centers of municipalities Center Sarajevo and Novi Grad Sarajevo are funded through
municipal budget and implements municipal local economic development projects and provide services to
companies, crafts and entrepreneurs. Capacity building, vocational trainings and other different types of
education are provided by these Centers. They also assist startups and craftsmen through development of
business plans.
Association of Business Consultants in Bosnia and Herzegovina LESPnet is established in 2001.
Association provides different types of services to its members, domestic management and business
consultants. Association is a good source of information about available consulting services offered by
333
members. Association has one employee and funding its activities through implementation of various
economic development project aimed at development of SME sector and business infrastructure.
General aims of The Association for Capacity Building and Development EU TAC activities are:
To support to the initiatives leading towards economic and social development of communities,
business entities and institutions.
Promotion of cooperation between local authorities and organizations of civil society with objective to
provide support to social and economical revitalization of communities in B&H, with special attention to
development of SMEs in general, tourism and rural development,
To strengthen the role of civil society organization and business entities in the provision of support to
B&H and whole region in stabilization and EU accession processes.
Association is spinoff of the EU TAC project funded by European Delegation to Bosnia and
Herzegovina. EU TAC project train the trainers and establish association of trainers.
Foreign Trade Chamber of B&H is setup by Law about Foreign Trade Chamber. Membership is
obligatory for Bosnian private companies. The Chamber is a reliable source of information for domestic and
international partners, and provides a number of services (business and market information, information
on regulations and laws, advisory services, promotional activities, databases, etc). Foreign Trade Chamber
of BiH is a member of numerous international associations (Euro chambers, International Chamber of
Commerce-ICC, ABC, FIATA, IRU, SECI, GS1), which enables her to successfully participate in various projects
aimed at strengthening and improving regional and international business cooperation.
Table 3
Chamber of Economy of Sarajevo Canton

Address
La Benovalencija 8, 71000 Sarajevo, Bosnia and Herzegovina
E-mail
kemalg@pksa.com.ba
Legal Status
Chamber of Commerce / Association
Years of activity
Founded in 1909, pass through different organization settings over the life
period. From 1999 in this organization form.
Fields of activity
1.
Representation of its members' interests in the authorized state bodies,

especially in preparing economic legislation, in passing measures and
mechanisms of economic system and economic policy and in determining
macro development policy;
334
2.
3.
4.
5.
N. of employees
Provision of various services to its members (business information, expert

advices presentations in the country and abroad, organized participation's in
exhibitions, fairs etc.).
Organization of functional and permanent education in order to innovate
knowledge of managing and expert persons in economy;
Mediation in solving disputes among its members, ensued due to the
disregard of the business morale and good ethical standards;
Carrying out public jobs, including preparation for concluding collective
agreements on salaries and other job conditions.
30
Direct
Beneficiaries
of
Companies, MSME, Startups
BSOs
activities
1.
2.
1.
ups
2.
Sources of funding

Membership fees and income from provided services
SARAJEVO ECONOMIC REGION DEVELOPMENT AGENCY SERDA d.o.o. Sarajevo

Address
Hamdije Cemerlica 2/11, 71000 Sarajevo, Bosnia and Herzegovina
E-mail
Web: www.serda.ba; E-mail: serda@serda.
Legal Status
Years of activity
Fields of activity
N. of employees
Direct
Beneficiaries
of
BSOs
activities
ups
Sources of funding
Association of Business Consultants in Bosnia and Herzegovina LESPnet
335
Address
Dajanli Ibrahimbega 16, 71000 Sarajevo, BiH
E-mail
lespnet@bih.net.ba
Legal Status
Association
Years of activity
Fields of activity
Services, consulting services to companies
N. of employees
Management consulting services
Direct
Beneficiaries
of
BSOs
Consulting companies from BiH as well as private companies and public
activities
sector organizations.
Consulting services
N/a
ups
Sources of funding
Revenue from consulting services and implemented projects
336
GENERAL CONCLUSIONS OF THE CONTEXT ANALYSIS
The context analysis carried out by the project partners have high-lightened the profound
differences between the involved territories in terms of economic structure, economic development level,
institutional framework governing development policies, legal framework, BSOs framework. Thus, it turns
quite difficult to draw some general conclusions that would apply to all the partner territories. One feature
that seem common is the need for some structural change that has been further deepened by the ongoing
international economic crisis and increased business uncertainty. On one side there are territories that
have already reached a high level of development but need some structural adjustment to cope with the
growing competitive pressures on the international markets. In particular, SMEs needs to further build up
their innovation capacity, develop cooperation models between companies in order to approach global
markets, while institutions and BSOs need to coordinate policies and strengthen tech transfer. On the other
side there are territories that are mostly rural and need to foster entrepreneurship as well as territories
that after the transition process still have a poor score in SMEs development with a productive base still
highly reliant on low value added productions or dependant on few FDIs. Usually these territories also have
to bridge gaps in terms of institutional and BSOs support capacity.
As far as the single territories is concerned, the Italian Regione Friuli Venezia Giulia has a
productive base formed by a large number of small and very small enterprises, that has been regarded as a
positive model of widespread entrepreneurship, typical for the so called Italian North East. This
widespread entrepreneurship model brought to the development of strong territorial specializations that
led to the development of a number of productive districts with hi tech productive bases and high quality
standards. The regional economy is strongly export oriented as exports nearly double imports.
Notwithstanding the listed positive features, the regional economy is undergoing a difficult
transition that can be just partially related to the recent international financial and economic crisis. In fact,
difficulties stems from structural problems that are mostly related to the main characteristic of the
enterpreneurial system: the average small dimension of enterprises. In particular, small dimensions hamper
companies internationalization processes, render difficult to finance their investments and to analyze their
competitive position on the markets. Small companies poor exporters. The largely positive trade balance
337
registered by the regional economy is thus mainly the result of the strong export flows of large and
medium companies. The high operational flexibility granted by the small dimensions that traditionally was a
cornerstone of their competitiveness is not supported by a strategic flexibility. Small companies are highly
dependent on big players in terms of turnover (single buyers) and in terms of technological platform as
usually small companies work as outsource for big players and technology is simply supplied them by the
latter. These dynamics result in a low demand for innovation and research by SMEs.
Although important national and international research centers based on the regional territory
form a relevant regional research potential, low level of private spending in R&S,
scarce patents
applications and a constant deficit in the regional technology balance of payments clearly indicate that the
technology transfer process is still too weak. The weak tech-transfer is to be related to deficiencies of both
sides: a) the activities of research centers sometimes appear too distant from real SMEs needs; b)
enterprises demand for innovation and research is low as companies managed to foster their
competitiveness mainly through extreme product specialization and was to a lesser extent research based.
Nowadays this model is not suitable to cope with global competition and renders the SMEs particularly
vulnerable. Furthermore, the support measures displayed are mostly suited for medium and large
enterprises that have the internal human and capital resources to access programs and projects.
Althouhg the BSO network is well developed, and the policies set up by the regional administration
to address the different problems/weaknesses of the economic system are well designed and related to key
aspects, the results reached so far has been just partially satisfactory. In fact, the BSOs system presents
weak coordination and integration among the different actors that usually embody different interests.
The foreseen pilot action to be developed in the nautic sector in Latisana seem to meet some of the
needs and factors just pointed out: its a joint initiative of several entrepreneurs that have envisaged that
individually they would not be able to cope with the evolution of their market, that they need a common
technical market support facility to support their activity, and that this new facility would serve also as an
interface tool to interact with research entities and their support programs.
In the Italian Regione Umbria the main s strengths pointed out by the context analysis are as
follow: high capacity to attract people and qualified workforce, low unemployment rate compared to the
national average, high public spending for R&D, highly qualified human resources, higher than average use
of alternative energies, wide presence of protected natural portions of territory, high concentration of
natural, cultural and urban resources, high level of schooling of the workforce. On the weaknesses side the
analysis pointed out: the high incidence of population over 65 years of age, the low level of added value for
338
worker unit, the low infrastructure network, the low patent capacity, the low turnover coming from new
products, the low propensity towards science-based innovation, the concentration of Umbrian enterprises
in mature sectors, the low transport accessibility, the increase in long term unemployment.
Such a context presents therefore a general situation of structural fragility and difficulty to
transform innovative potential into productive aims. At the same time, the high level and skills of the
workforce and the extremely high participation of all social and economic stakeholders to the regional
policies processes, are the main features of an attractive territory, where favourable conditions have
increased the flows of people, capital, resources and investments.
In the course of the last years the region has faced a difficult economic situation, partly caused by
the difficulties at global level, but also due to the federal reform in Italy and the progressive limitation of
the traditional financial sources. In order to face this challenge and preserve a growth based on a network
system of cities and territories, on social cohesion, on environmental wellbeing and on the qualification and
enhancement of all territorial resources and potential, Region Umbria has chosen an integrated approach
that brings together all regional stakeholders into sharing all choices concerning regional programmes.
The macro-objectives that have been set by the Region Umbria in its action to support local
development are: providing support to strategic themes of research, innovation, strengthening of network
of enterprises in order to enhance competitiveness; support innovation processes, promotion of innovative
investments, strengthening of small-dimension enterprises through development projects and introduction
and enhancement of the use of information and communication technologies; promotion and support the
technological transfer towards companies and innovation processes related to organisation, management
and internationalisation; strengthening of financial structure of enterprises; meeting transversal objectives
of energy saving and environmental protection; improvement of the infrastructures.
In the Greek regions of Kavala and Drama the FATE project provided a good opportunity to open
and put forward the discussion concerning the stage of economic development, the nature and needs of
entrepreneurship, the use of new investment and the exploitation of the available land in the brown fields
that can be used for entrepreneurial purposes. This dialogue was carried out for the first time ever and the
FATE project was the catalyst for such an achievement. It was concluded that the final decisions on the use
of the old brown fields will have to be evaluated based on their: importance for the local society and
economy, and the feasibility or applicability of the solution proposed. In times of economic upheaval and
demand for increased fiscal restraint, it is natural to ask for shorter periods for the Return on Investment.
339
Engaging into long-term investment without any partial short-term gains may not be attractive to local or
national politicians or even the public opinion.
The main project results can be summarized as follows: adoption of recommendations on military
brownfields restructuring by regional administrations as programming tool for the spatial planning;
adoption of a common strategy to promote entrepreneurship and attract FDI; Urban/territorial planning for
and starting up of the creation of BI/BSCs with high technological and management standards;
recommendations to manage military brownfields property transfer process from central to local level;
durable partnerships, transnational network of BI/BSCs and transnational cooperation among productive
clusters
From the context analysis Drama and Kavala partners articulated a compact set of criteria for the
exploitation of former military camps with respect to two main decision variables: location and activities
housed.
As per the choice of location: they should be located near the city of Kavala and near the city of
Drama so as to achieve a faster economic impact and affect positively a large part of the population, it
should be preferably located near an underprivileged, neglected or degraded neighbourhood of the urban
web, so as to have a social impact through the upgrading of the local economy.
As per the choice of activities housed it is recommended to house a blend of activities as follows:
direct business opportunities in the fields of recreation, tourism, entertainment etc.; host grouped
commercial activities of prime business sectors of Drama so as to achieve economies of scale; facilities in
support to innovation and entrepreneurship for promising business sectors, primarily new technologies
related to Information and Communication Technologies (ICTs), organic agriculture, environmental
protection, renewable energy sources, and energy efficiency.
In the Hungarian West Transdanubian Region the context pointed out that earlier traditional
sectors of the region - food industry, light industry, textile industry - have devaluated and lost their role
while engineering industry that has also age-old traditions stopped short after the collapse of the eastern
markets, then it renewed step by step owning to the inflow of multinational investments (Audi, Opel,
Flextronics, General Electric and so on).
The dynamic growth of the industry is based on the powerful export orientation that is
characteristic not only for the foreign enterprises settled in the region but also for the Hungarian
340
companies. Unfortunately, it is characteristic for one part of the foreign investments (for ex. electronics)
that they established an assembling activity with lower added value, as well as they were not able to
integrate into the economy of the region by developing Hungarian supplier chains. In fact, most of the
existing export oriented sectors rely on strong imports, and their production mainly consist in a low-tech
assembly based on less qualified labour force. At the beginning of the years 2000, disinvestments were
experienced in textile industry and in electronics concerning the activities with low added value that
produced a strong impact on the employment levels in certain small regions.
From the year 2000 some cluster initiatives were launched in the most important sectors of the
region, with the aim of promoting the cooperation and interaction of enterprises, to provide special
services and infrastructure for the most important sectors of the economy. Many projects were realised
developing the connection between the economic sphere and municipalities involved the brownfield
reconstructing. The whole surface of the 24 business parks in the region of West Pannonia exceeded 1300
hectares in 2005. The number of enterprises that settled in the region increases dynamically and more than
350 companies located here at the moment. Certain business parks are nearly completely full and therefore
other areas, for example the military brownfield areas, have to get involved into the development projects.
As far as the Slovenian partner is concerned, the context analysis of the Pomurje region confirms
that this is one of the less developed areas in Slovenia. In fact, the traditional structure of its economy is
based on agriculture and textiles, sectors that are facing huge difficulties. Regional development agency
Mura and the Pomurje technology park have been very active on the promotion of entrepreneurship in the
past 6 years. There has been some success but not enough to compensate negative economic
developments in this period. As the development of entrepreneurship is always connected to some specific
know-how of the entrepreneur, the regional education level is very concerning and does not allow a
booming entrepreneurial development. From another point of view, it does not allow the development of
high-tech activities on a larger scale.
The development of new types of business support services is for the Pomurje region crucial.
Economic development can be achieved by supporting 3 different areas of development: development of
existing companies through developing competence centers for most important economic sectors;
development of entrepreneurship offering risk capital funds, promoting entrepreneurship and offering very
341
active support in the development phase; attraction of investments in form of Greenfield and Brownfield
investments.
Another problem that has been stressed is that Slovenia has no regions that would have decision
power and budget to promote priorities for its development. The region is preparing a Regional
development programme, but mostly it comes down to the support of projects applying on national
tenders. The government of the Republic of Slovenia has adopted a law for Pomurje, which should
contribute to solving the present critical situation of the region. The law identified the following
competitive advantages of the region: Geothermal energy and renewable energies, Agrofood and rural
development and Tourism.
In the Osijecko baranjska Countys context analysis the project partner pointed out the urgent
need for cooperative efforts on local level in strengthening competitiveness of the business sector and that
people in national politics in charge for regional development should make additional efforts in balancing
regional development and implement programs for improving business environment factors. In fact it
seems that the region hasnt used its economic potentials (natural and human resources) to its advantage
so far. The measures which are supposed to enable better utilization of those potentials are not in the right
sense strategically and operationally designed.
To solve this problem it is necessary to create local strategies and operational programs which
would be composed of all kinds of supports in function of quicker and better development of those
potentials. Also, this New strategies and programs needs to focus more on the key sectors of the
Countys Economy in order to create more working places for young educated people. Therefore it is
necessary to invest in education on all levels, but this is only the beginning. Those educated people would
need a place to work and grow their potentials. In order to achieve that it is necessary to focus and
specialise in key sectors of economy such as Agriculture, Food and Beverage Production, Wood Industry
and Rural Tourism.
In Agriculture, one of the recommendations is investment in Organic Production which has a great
export potential but it is still in the early phase of development. Joining in cooperatives or clusters will
strengthen agricultural producers influence on the market in both ways, negotiation power with suppliers
and with distributors.
342
Many sectors export row material or semi-finished products instead of final products. Several row
materials that are exported come back as imports of final products. Therefore, it is essential to raise the
level of finalization through investments in machinery and production. This can be ensured through direct
investments, credits, loans, finding business partners, EU founds, grants.
Regarding to the emerging new sector of Rural Tourism which is developing rapidly, this sector still
did not yield the expected results despite the fact that institutions on national and regional level offer all
kinds of different development projects and incentive programs.
Not all the business support institutions covered in the context analysis (public institutions, local
and regional government bodies, business incubators, technology development centres, centres for
entrepreneurship) are recognized in their business environment or even effective enough in achieving their
main goals. In the development of a competitive economic environment it is essential to align all the
development strategies, supporting operating programs, action plans and identify organizations
responsible for carrying out these activities which will raise the overall economic activity based on using all
productive resources and comparative advantages in relation to other participants at the local, national and
international markets.
The Romanian partner CDCAS Caras Severin has developed their context analysis at national level
with a special focus on urbanism issues. As the EUs economic recovery package explicitly recognizes that
the future creation of long term and sustainable jobs will increasingly depend upon the ability to mobilize
the innovative and creative capacity of all its citizens, there are a series of functions that urban
practitioners in institutions/ organisations concerned with urban issues together with local universities can
fulfill to encourage four main processes for SMEs: 1)creating new industries forefront science and
engineering research; aggressive technologies licensing policies; promote/assist entrepreneurial business;
cultivate ties between academic researchers and local entrepreneurs; creating an industry identity; 2)
industry transplantation; 3)diversification of old industry into related new sectors (set-up bridges between
disconnected SME actors; filling structural holes); 4) the upgrading of mature industry (problem solving for
industry through contract research, consulting, etc.; education/manpower development; global best
practices scanning; convening foresight exercises; convening user supplier forums).
The FATE project will provide a fund of experience for cities where there are supplementary
resources for SME activities which can be put in practice by local public institutions because them sustain
long term option for the future of cities. It is necessary, at least, to follow two broad aims: to highlight the
343
distinctive features which are particularly relevant for policy makers, SME and urban practitioners in
institutions/organisations concerned with urban issues; secondly, to identify the common elements this
might become the focus for further joint work for similar context.
The context analysis by SMER on the AP of Vojvodina finds that it is quite difficult to draw a
comprehensive picture of the regional economy due to the lack of some statistical data. However,
disposable data show that in the period 2004-2008 the recovery of economic activities in Vojvodina
throughout the period is very slow. The regional economy registered a slight increase of economic
activities, stagnation of employment, and a decrease of unemployment. Industrial production showed
some progress, while import and export of goods were steadily growing, though showing strong imbalances
in favour of imports. The percentage of employment in SME sector was growing throughout the period,
while SME employment in agriculture and industry was decreasing, and slightly increasing in services
sector. Main trade partners in imports are Russia, Germany and Italy, while for exports Bosnia Herzegovina,
Germany and Italy. Both in imports and exports are dominating materials for processing.
The transition and privatization processes are still incomplete. Any sectoral conclusion would be
difficult to draw. As far as the existence of regional institutions for the support to economic development is
concerned, it can be stated that they have been developed, throughout the needed aspects of economic
development. However, there were not at disposition parameters to evaluate economic impact or results
of their activities. There are regional development plans, particular programs and projects implemented
that contribute to regional economic development. However it is not easy to assess how these efforts
fostered by EU programs supporting pre-accession, Government of Vojvodina specific policies, as well as
National developmental institutions and policies were mutually accorded and benefited from synergies
effects.
The context analysis developed by SERDA for the Sarajevo Canton highlight that the economy is
still struggling to recover and suffer from structural deficiencies.
In a Sarajevo Canton there are 10 perspective and 29 non perspective military locations. Out of 29
non perspective locations, 4 are temporary needed to Army Forces. These 4 locations will be handover to
civil authorities in certain period of time. 3 locations are ready for handover to civil authorities. 16 locations
are already handover to certain levels of civil authorities and some of them are used by BiH Court.
344
Municipalities show an interest in these location and some of them already create project for future
economic development use of these sites.
Most of the existing industrial business zones in Canton Sarajevo still offer sites for interested
investors. Brownfields are mostly privatized by local companies and private investors, but they in the most
cases do not use these for business activities. Most industrial business zones does not have management
infrastructure that should provide information about available business facilities, so interested investor
needs to investigate what is available, who is the owner and other.
New fully equipped industrial business zones (ready to investment) in Canton Sarajevo are needed
together with organization that will manage and promote those new zones.
Support for a start ups are available through business incubators and business centers. According to
the Strategy for Development of the Business Incubators in BiH for 2010/2011, business incubators manage
27.000 m2 of business space. Since 2001, more than 230 companies have been used services of business
incubators (or still using) with around 1.100 employees. There are 12 registered business incubators in BiH.
The amount of funds allocated for economic development needs at all levels are fare from
sufficient to satisfy economic development needs. Business incubators are in the most cases struggling to
cover its running costs, unable to offer additional support services to startups and entrepreneurs. Most of
them have certain financial support from their host municipality, but it is in the most cases very limited.
They are usually supported by multilateral or bilateral donors through its economic development
assistance.
345

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F.A.T.E.

From Army To Entrepreneurship

ANALYSIS OF THE BUSINESS SUPPORT ORGANISATIONS CONTEXT ................................................................. 153

1.2 Main sectors...................................................................................................................................................... 318

ANALYSIS OF THE ECONOMIC CONTEXT

Overview of the economic-entrepreneurial context (at regional level)

1.2 Main sectors

1.3 Analysis of emerging potentials (sectors) at regional level

ANALYSIS OF THE POLICY FRAMEWORK

2.1 Institutional framework

2.2 Regulation and Support measures for SME

2.3 EU assistance for supporting SMEs

2.4 EU assistance for brownfield restructuring

ANALYSIS OF THE BUSINESS SUPPORT ORGANISATIONS CONTEXT

3.1 Mapping of the existing institutions/associations/various structures (trade-associations,

ITALY - Friuli Venezia Giulia Region

ANALYSIS OF THE ECONOMIC CONTEXT

67. Iron e steel

67. Iron e steel

67. Iron e steel

67. Iron e steel

67. Iron e steel

28. metallif. ores

28. metallif. ores

82. furniture and

82. furniture and

82. furniture and

82. furniture and

82. furniture and

67. Iron e steel

national average. In 2008

more than 15.000 enterprises were active in the construction sector

Knowledge workers and graduates in Science & Engineering (S&E)

RNSII (Regional National Summary Innovation index)

1.2 Sectoral focus

Table 2: to fill in for each of the leading sectors

The biomedical sector is regarded to be one of the main opportunities.

Table 2: to fill in for each of the leading sectors

Table 2: to fill in for each of the leading sectors

The projects implemented so far are:

nautic sector is so fragmented in terms of

Development of boat/yacht construction

2. ANALYSIS OF THE POLICY FRAMEWORK

2.1 Institutional framework

2.2 Regulation and Support measures for SME

2.2.1 National level

2.2.1.1 Start ups and new entrepreneurship

Fund for Technological Innovation - FIT

Fund for research incentives FAR

agro-industrial companies that mainly carry out industrial activities;

Other enterprises identified by the Ministry of Economic Development through notices

Law 598/94 SMEs Innovation

2.2.2 Regional level

Dimensional growth (mergers, cooperation agreements, aggregations);

Internationalization processes in terms of setting of foreign marketing networks, organized and

Reorganization of governance models;

Financial support for the creation of prototypes and test productions;

To fill temporary gaps in managerial skills;

Management of recapitalization processes or propriety reorganization processes also by opening to

Enhance the social responsibility of the enterprise;

Support to female entrepreneurship.

Implementation of environment quality standards safety-environmental standards.

strategic consultancy services and enhancement of existing managerial skills,