without a disseminated impact at the level of all companies in the economy. The development is slowed by the quality of education and the availability of work force,
have cathalist and multiplication effects towards the other branches of the regional economy, are highly competitive at global level,
ensure regional economy'sustainable effect. Target at t1 moment (2020: allocation of 2%from regional GDP for research and development activities.
The mission of the main organizations in the region for the implementation of the vision (by specific interventions in the period t1-t0) The innovative enterprises, business networks and regional clusters generate innovation
Key values that will animate regional stakeholders in delivering their missions: partnership creativity labour 3 responsibility Slogan Northeast Region smart specialization through people and local products Smart Secialization Strategy Structure Vertical priorities The Northeast
telecommunications and software, computer programming, mecatronics, security, e-health, ITC for transport, new media, irrespectively networks of the future, internet services, software and visualization, media network and 3d
the buildings or the innovation services will be used, as well as the problem of innovation competences, especially at the level of the future generations the ones that will benefit from the present investments in innovation
and will be reswponsible for their ma nagement in the future. Horizontal Priority 2 Support for the inovative companies from the Northeast Region It is not enough to prepare
development of curricula partnerships between educators and enterprises in the fields with regional smart specialization potential, in the view to actualize the education offer (specialties
and students in enterprises and coupling them with training coursed (for example how its made...or new technologies presentations;
and masterands that take part to practical stages/internships i innovative enterprises from priority sectors (through bourses or other facilities).
o Support of pupils, students and masterands to participate in competitions of ideasand innovative projects organized at national and international level (through financial stimulents.
where enterprises in the field are complaining of being difficult to find employable persons among other reasons this is also caused by the deficitar image of the sector.
Support for the inovtive enterprises in Northeast Region Measure 2. 1: Assisatnce servicesfor transfroming inovative ideas in business ideas To this purpose the following project ideas are considered of priority:
9 o Implementation of programs for simulated enterprises to facilitate translation into practice of inovative ideas of puils and students;
o Support for the development of services offered bu business support networks and custers to their members.
In this environment, excellence and an entrepreneurial spirit mobilize a critical mass of actors. 2 Vision's 3 pillars:
Companies become key actors of innovation The RDI sector is an arena of opportunity Regional leadership at the frontier of science through breakthroughs in strategic fields Regional level not a distinct level (Romania does not have either proper legal regions,
construction, Biomass, Ecological Services, Fossil Energy, Gas and Electricity, Maritime Oil Extraction Machinery and Equipment Intelligent Agriculture, Automation, Mechatronics Textiles Technical Textiles
Life science, Health Scientific domain Specialisation area IT&C Networks of the future, internet and services, software and visualization, networked media and 3d internet, flexible organic and large area
and other transport Energy and Environment Pollution, management and monitoring, environmental engineering, ecology and environmental science, network technologies
1) Stimulating business investment in research;(2) Bridging business and public research;(3) Low technology transfer rates and a weak culture of entrepreneurship Main opportunities for future regional development:(
1) Large-scale infrastructures (e g.,, ELI-NP) and associated hubs;(2) Danube Institute/Initiatives;(3) Competence poles (e g.,
, Cluj, Magurele) Main objectives of the strategy-To increase the competitiveness of the Romanian economy through innovation-To enhance the Romanian contribution to the progress of frontier knowledge-To enhance the role of science in society 4 Procedural principles:
the potential for adding value (in the economy, public services, public decision-making etc. to the results of research;
Online consultation with RDI experts and stakeholders proposals of promising R&i programs for each candidate field;
Large-scale online consultation of experts and stakeholders on the 90 R&i fiches quantitative evaluation, backed up by pro/con arguments;
Geophysics ICT Mathematics Materials (new) Veterinarian Environment Nanotech Naval Optics Patrimony Health Security Socioeconomic Space Textiles Agro-Food ICT Intelligent
sys. Health Energy Pharmaceuticals Environment Security Space Materials Biotechnologies Transport Socioeconomic 13 Panels 90 Micro-visions 29 domains+Exploratory Online
and reach 1%in 2020 Structural Funds National funds 5 billion Euro Rank Micro-vision Required investment for reaching critical mass 1 2 3
ENERGY AND ENVIRONMENT Increasing end-use energy efficiency Optimizing the use of conventional and nonconventional water resources Substitution of critical materials and functional covering The intelligent city A4.
2014 Feedback from relevant stakeholders and political decision version July(?2014 Smart specialization fields Bioeconomy ICT Energy & Environment Eco-technologies Public interest priorities Health Security & Space National heritage & identity, cohesion and cross-cultural
linkages Smart specialization fields Bioeconomy ICT, Security & Space Energy, Environment & Climate changes Eco-nano-technologies & Advanced Materials Public interest priorities Health National
heritage & identity Emerging technologies RIS3 Priorities 16 ICT, Security & Space Focus on changes related to Smart Specialization so far Micro-vision fiches after refining (see the Annex for the full process:
Environment; Health; Security; Intelligent Systems; Socioeconomics; Space medicine Science; Transport ICT Rationale: ICT prioritized for information security & space security because of new info regarding the sectoral strategies (not available at the time of the first version;
Energy & Environment Energy, Environment & Climate change Rationale: Environment focus on Climate Change; the Danubius Center will be operational by 2018.
Eco-technologies Eco-nano-technologies & Advanced Materials Rationale: specific request of Renault Romania Group, the Romanian Academy,
and of several elite National institutes given the opportunities in the automotive industry, textiles, and KET development (subject to further debate).
External knowledge should be used to improve level of R&i by supporting the participation of high level international researchers as project directors in host institutions in Romania (enterprises
the Romania-France framework for research collaboration (joint research in Physics, Environment, Chemistry, Mathematics. Also, ERA.
the latter focused primarily on enabling innovation-driven entrepreneurship (e g.,, through fiscal and financial mechanisms, support for firm-initiated RDI projects.
public procurement of innovative products and services; pre-commercial public procurement. Involvement of entrepreneurial actors:
informal discussions were held with teams in the Ministry of the Economy. The design of the strategy involved a number of collaborative procedures, from work in relatively large and diverse panels to participative online consultations.
as%of the total scientific publications in the country 3. 8 (2011) 5 7 International scientific co-publications for 1 mil. inhabitants 148 200 300 Venture capital
and services(%)13.7 (2011) 16 20 Revenue from licences and patents from abroad as%of GDP 0. 13 (2011) 0. 15 0. 17 Source:
Environment; Health; Security; Intelligent Systems; Socioeconomics; Space medicine Science; Transport)- Prioritization and version Dec. 2013. Public debate-National R&d institutes-Romanian Academy-Private companies-Changes as for version Apr. 2014.
1 ROMANIA AND SMART SPECIALISATION STRATEGY BACKGROUND DOCUMENT Economic context The Romanian economy, ranked right in the middle of the latest Global Competitiveness Report, is driven efficiency and displays low business sophistication.
and is separated from the average national economy in Europe by a considerable competitiveness gap. Most of its small-and medium-sized firms are driven not innovation
which, alongside a few large state-owned companies, play a dominant role in the economy. The structure of the labor force diverges substantially from the European trends.
not-for-profit institutions have few means to follow through on their initiatives. The RDI system In terms of the number of researchers, the Romanian RDI system is undersized by European standards, with the number of FTE researchers at a quarter of the EU average.
After a consistent, threefold increase in public R&d financing in the years immediately preceding the economic crisis,
(and targeted a similar figure from business investment). As a result of the strategy, public funding for R&d grew substantially and consistently for several years.
However, funds were slashed soon after the onset of the economic crisis. Around a third of the projected RDI budget was disbursed actually.
and stakeholders, including representatives of the business community. A commitment to the project was secured from a broad group of key actors decision-makers in relevant ministries and other public bodies, leaders of the important businessperson associations, members of the civil society, heads
-an investment model for the RDI ecosystem (including a Plan for the implementation of the Strategy and an Operational program for RDI;
In this environment, excellence and an entrepreneurial spirit mobilize a critical mass of actors; companies become key actors of innovation;
and defined gradually by groups of experts and stakeholders, on the basis of available evidence,
13 panels of 15-25 experts and stakeholders worked from this input as well as a large selection of data on the economic value added, on scientific collaborations and results, on societal needs,
proven scientific performance, the potential for adding value (in the economy, public services, public decision-making etc.
the sustainability of investments in RDI. 8 Data on all publicly-funded competitive Romanian RDI projects over the last 7-8 years (over 6, 000;
Knowledge-based economy, European union, R&d, SMES JEL CLASSIFICATION: L29, O11, O30, O52 1. INTRODUCTION As we are facing the transition to the knowledge-based economy,
the role of R&d and innovation is constantly increasing. Because the challenges we are facing have a systemic nature, the instability,
A working definition emphasizes that the knowledge-based economy is characterized by the transformation of knowledge in raw material, capital, products, essential production factor for the economy,
and protection of the knowledge become predominant and decisive for long term profit gaining and sustainability assurance (Nicolescu, 2011).
whether the public R&d subsidies crowd out private R&d investments. Regarding this second issue, although counterintuitive, there is empirical evidence that the funded firms are significantly more R&d active than non-funded firms (Aerts, 2008).
as compared with profit-based performance measure, is more conducive to firm innovation; and (3) CEO education level, professional background and political connection are associated positively with firm's innovation efforts.
which we can measure the volume of productive knowledge that is implied in the export structure the most competitive segment in an economy.
thus being critical to have needed the inputs, suppliers and customers, and therefore, a proper business ecosystem is a critical factor in terms of survival
and services in a competitive way has structural implications for an economy; therefore, the raising complexity and diversification are critical premises for development as they influence directly the growth potential.
and shows a consistent transformation of the Romanian economy. Actually, it pictures the transition from an artificially sustained portfolio of products
and services Romania produced in the state-owned companies, to a mainly private competitive structure of producing complex and diverse products.
The accumulation of societal know-how makes it easier for new ventures to arise and for new ideas to be put in place.
Entrepreneurship has favorable premises for development, as there is a growing diversity of human resources that are involved in constructing complex products.
and adequate public policies for supporting entrepreneurship and SMES, there is high probability that the Romanian business ecosystem will become one of the most competitive and dynamic in the EU. The accumulation
In this context, the managerial implications for SMES regarding R&d and innovation could be summarized in the following five categories that contain both opportunities and challenges:
1. There should be allocated more resources for building networks and clusters with other important stakeholders.
regardless of our ideological choices, there is an objective medium and long term opportunity of funding R&d and innovation with the support of public resources.
Integrating the new technologies within the business model of a small and medium enterprise is a difficult job
But if we look at the complexity of the economy there is clear evidence that since 1995,
with a large portfolio of products and services Romania produced in the state-owned companies, to a mainly private competitive structure of producing complex and diverse products that are oriented market.
The accumulation of societal know-how makes it easier for new ventures to arise and for new ideas to be put in place.
or by building networks and clusters with other important stakeholders. Therefore there are some major managerial implications for SMES that derive from the analysis of the Romania's R&d and innovation potential in the European context.
project number POSDRU/159/1. 5/S/142115 Performance and excellence in doctoral and postdoctoral research in Romanian economics science domain.
and the R&d investment in China. International Review of Economics and Finance, 19,180-188. Hausmann, R.,Hidalgo, C a.,Bustos, S.,Coscia, M.,Chung, S.,Jimenez, J. et al,(2011.
The Atlas of Economic Complexity: Mapping paths to prosperity. Academic Press. Kesavayuth, D.,Zikos, V. 2012.
Proceedings of the 7th International Management Conference"New Management for the New Economy",Bucharest, Romania.
Journal of Comparative Economics, 39,176-190. Martinez-Roman, J. A.,Gamero, J.,Tamayo, J. A. 2011.
Key strenghts and challenges of West region economy...16 III. 1. Main strengths...17 III. 2. Main challenges...
47 IV. 1. Key challenges and opportunities for target sectors...47 IV. 2. Horizontal policy areas that impact West Region economy...
50 IV. 3. Sector specific smart policy areas in West Region...58 IV. 3. 1. Automotive...
Thematic objectives and investment priorities...69 V. 3. Optimum policy mix and possible budget requirements...
91 Annex 2 Decription of regional investment pilot initiatives...93 Annex 3-Use of Integrated Territorial Investments for sustainable development of the West Region...
101 3 List of Figures Figure 1: Romania's GDP per capita as%of EU average (PPP, current international $)..16 Figure 2:
Productivity and investment growth (2000-2009)..19 Figure 4-Population Growth Index (2002-2011)..20 Figure 5-Population Trends in the West Region
Economic activity (Participation) and Unemployment by Level of Educational Attainment-West Region (2009)..23 Figure 9:
Specialization opportunities by cluster...48 Table 16-Overview of weaknesses, strengths and opportunities for the region...
62 Table 17-Priority axes and thematic objectives: an application for the West region...72 Table 18:
Overview of the investment strategy and main funding sources...80 Table 19-Examples of investment pilot initiatives...
83 Table 20-Actions to be supported under the investment priority...84 Table 21-Overall outline and time frame for the development of smart specialization strategy in the West region...
86 5 Executive Summary I. The aim of the Europe 2020 Strategy, launched in 2010,
is to tackle structural weaknesses in Europe's economy, while reducing regional disparities in income, wealth and opportunities.
To achieve the Europe 2020 objectives of smart, sustainable and inclusive growth, European union (EU) Member States are encouraged to define smart specialization strategies.
and on facilitating the development of new economic activities through entrepreneurship and experimentation. 1 II. Romania's West Region is developing a smart specialization strategy
and smart specialization assessment of services and goods producers and to identify policy measures, interventions and smart specialization niches that can help nurture their growth potential.
The World bank's advisory services encompass seven deliverables, which will be used by the West Region'Regional Development Agency (RDA West) as inputs in establishing its regional development priorities. 1. Trade Outcomes Assessment 2. Territorial Assessment:
and Opportunities 6. Smart Specialization Sector Case studies. 7. Final Report: Policy Recommendations III. Growth in the West Region has been driven strong
by a vibrant enterprise sector and marked export orientation. Since the late 1990s the region has experienced rapid economic growth,
which has delivered rising real wages and commensurate improvements in productivity. The annual growth rate of output per worker amounted to 15%in the 2000-09 period.
and the Region has one of the highest concentrations of enterprises and exporters in Romania.
Regional development has been unbalanced somewhat, with significant territorial disparities and a high concentration of economic activity and exports.
Second, economic activity is concentrated in a handful of sectors that represent about half the region's turnover and employment
A favorable geographic location, a largely pristine natural environment and unexploited cultural and archaeological assets offer additional possibilities for specialization in higher value added activities.
and information and communication technology (ICT) and a latent comparative advantage in agro-food and tourism.
to promote small and medium enterprises (SME) financing and marketing; and to support basic and applied research.
For the ICT cluster, it would be helpful to expand the range of services offered by incubators and business accelerators,
Enhancing the competitiveness of small and medium-sized enterprises TO11. Enhancing institutional capacity and an efficient public administration PA2:
Protect nature and cultural assets of the region TO 6. Protecting the environment and promoting resources efficiency PA3:
Investment priorities can be tailored to the particular needs of the region and can be promoted with regional initiatives.
which illustrate how investment can foster smart specialization in the region. These investment projects have not been appraised nor endorsed by the World bank.
This list should be considered as merely illustrative. XII. Overall, the policy instruments presented in this report constitute potential avenues for increasing the economic development of the region through enhancements in research, innovation and private sector competitiveness.
and local investments can support the West Region in developing an integrated smart specialization strategy
and entrepreneurs and may help unlock the competitive and innovative potential of the West Region's economy. 8 I. Introduction 1. In 2010,
Smart specialization policies should follow a knowledge-driven approach to economic growth that: builds on existing comparative advantages;
and promotes a larger contribution of the knowledge factor to economic growth. 2 3. Against this backdrop,
and smart specialization assessment of services and goods producers in the West Region and to identify policy measures,
Diagnostics, Challenges, and Opportunities; and vi) Smart Specialization Case studies Report 5. The first five reports drew on complementary methodological approaches and intended to perform a complete competitiveness mapping of goods and services producers in the West region.
The five reports: i) assessed the recent trade performance of the West Region; ii) evaluated the overall competitiveness of West Romania firms;
iii) evaluated the linkages between economic activity, trade and location in order to identify the challenges of further developing
By focusing on particular sectors that have a considerable weight in the regional economy (automotive, textiles, agro-food, ICT, construction,
as well as the opportunities arising at the level of business and research and technological development infrastructure (RTDI) co-operation,
as a way to detect the growth opportunities that lie 2 According to European commission, smart specialization means identifying the unique characteristics and assets of each country and region, highlighting each region's competitive advantages,
and rallying regional stakeholders and resources around an excellence-driven vision of their future. It also means strengthening regional innovation systems,
and spreading the benefits of innovation throughout the entire regional economy. http://ec. europa. eu/regional policy/sources/docgener/informat/2014/smart specialisation en. pdf)..9 ahead in these industries.
Second, it sets investment priorities that are tailored to the particular needs of the local industries
Third, it proposes a number of specific investment projects. While presenting directions for increasing the economic development of the region based on research, innovation and private sector competitiveness,
which illustrate how investment can foster smart specialization in the region. 8. The report is structured in five chapters following this introduction.
and aims to tackle both the structural weaknesses in Europe's economy exposed by the crisis,
The strategy should be built on analysis of all the assets in a region, innovation strengths and weaknesses and emerging opportunities and market developments,
in particular through peer reviews involving public officials, practitioners and regional stakeholders. The goal of this approach is to avoid unnecessary duplication and fragmentation of efforts,
and to exploit opportunities for joint programming, transnational cooperation and joint leverage of EU instruments. 13.
3 The data refers to 2011 indicators 4 Economic activity rate (2011); Source: Eurostat 5 Data for 2010;
human, physical and natural capital, knowledge, institutions and networks), the design of the policy mix must be built on regional diversity.
and regions to concentrate resources on the most promising areas of competitive advantage based on clusters, cross-sectoral activities, eco-innovation, innovative services, high value-added markets or specific research and innovation
In its Communication Regional Policy Contributing to Smart Growth in Europe8 the Commission provides suggestions related to the key concepts that need to be presented in a smart specialization strategy.
Clusters provide a favorable environment to foster competitiveness and drive innovation. Support for cluster development has to be concentrated on areas of comparative advantage. b) Innovation-friendly business environments for SMES, R&d intensive ones especially,
and the creation of new firms. There is a need to make more extensive use of loans, equity finance and other forms of financial engineering. c) Lifelong learning in research and innovation.
Focusing school, vocational and higher education curricula on transversal competences like creativity, entrepreneurship and initiative will help young people to develop their full potential for innovation. d) Attractive regional research infrastructure
and cultural industries can help to boost local economies stimulate new activities, create new and sustainable jobs,
while improving the quality of its services and productivity. 8 COM (2010) 553 13 h) Regional Policy addressing the grand challenges (such as climate change,
energy and resource efficiency, raw material scarcity and demographic ageing) through European Innovation Partnerships 16. In line with the long term Europe 2020 goals of smart, sustainable and inclusive growth, the EU has adopted a legislative package
This policy provides a framework for financing a wide range of projects and investments with the aim of encouraging economic growth in EU Member States and their regions. 17.
defined as European Structural Investment (ESI) funds for 2014-2020, which encompasses European Regional Development Fund (ERDF), the European Social Fund (ESF), the Cohesion Fund (CF), the European Agricultural Fund for Rural Development (EAFRD) and the European Maritime
and use and quality of, information and communication technologies; 3. enhancing the competitiveness of small and medium-sized enterprises, the agricultural sector (for the EAFRD) and the fisheries and aquaculture sector (for the EMFF;
4. supporting the shift towards a low-carbon economy in all sectors; 5. promoting climate change adaptation,
risk prevention and management; 6. protecting the environment and promoting resource efficiency; 7. promoting sustainable transport
and removing bottlenecks in key network infrastructures; 8. promoting employment and supporting labor mobility; 9 In order to promote the harmonious, balanced and sustainable development of the Union,
-and are to be translated into specific investment priorities12set out according to the ESI Funds specific rules. 21.
According to the latest version of the regulation for cohesion policy, strengthening research, technological development and innovation can to be achieved mainly through the following investment priorities under TO1:
i) promoting business investment in innovation and research; ii) developing links and synergies between enterprises, R&d centers and higher education, in particular product and service development, technology transfer, social innovation and public service applications, and demand stimulation;
and, iii) networking, clusters and open innovation through smart specialization. In practice, there is a strong link between the TO1 and increase of competitiveness of SMES (TO3.
Promoting investments under TO3 is crucial in order to enhance the results achieved under TO1. 22. Against the Cohesion Policy backdrop, the European commission has sent recently position papers to the Member State authorities with preliminary views and guidelines for the development of the Partnership Agreement and programs for the period 2014-2020.
The horizontal TO11 is essential for underpinning the investments promoted under the remaining TOS. 11 For Romania,
1. Improving human capital through higher employment, and better social inclusion and education policies, 2. Developing modern infrastructure for growth and jobs, 3. Promoting economic competitiveness and local development,
but they are more or less similar. 12 Investment priorities set out detailed objectives, which are not mutually exclusive, to
These investment priorities should form the basis for the definition of specific objectives within programs. 13according to the Annex V of the draft General Regulation (http://ec. europa. eu/regional policy/what/future/proposals 2014 2020 en
place-based economic transformation agendas that focus policy support and investments on key national or regional priorities,
and aim to stimulate private sector investment. These policies, which are evidencebased and include sound monitoring
and evaluation systems, aim to fully involve all relevant stakeholders and encourage innovation and experimentation. 24.
Key strenghts and challenges of West region economy 26. In the run up to the EU accession
the Romanian economy experienced healthy rates of growth in incomes. This process was driven by the increasing integration of the Romanian economy with the EU Single Market,
which, despite significant progress, is still below the average of other new Member States. Following the post-transition recession, in the 2000's the country's economic expansion was fuelled by unrestrained access to EU capital and product markets,
which allowed Romanian firms to expand domestically and abroad, and opened the door to FDI inflows.
As a result, the Romanian economy experienced growth averaging 6. 5%per annum and saw GDP per capita rise from 26%of the EU average to 49%between 2000 and 2011 (Figure 1). Figure 1:
The first five reports under this task have provided a complete competitiveness mapping of services and goods producers in the West Region.
and have pointed specific strengths and opportunities, as well as a number of challenges that need to be addressed as part of an effective development strategy for the region.
The region has experienced rapid economic growth which has delivered rising real wages, supported by commensurate improvements in productivity. 33.
which in turn has been driven by strong investment. Over the previous decade, the West experienced the highest growth in output per worker among the comparator regions
and thus continued high economic growth. 15 Source: Eurostat; calculated as the ratio of utilized agricultural area (UAA) to total area, 2009.16 Turnock, D. 2001.
Geographica Pannonica, 4, 5-13.17 It is worth noting at this stage that productivity growth is assumed not to be determined only by investments in machinery.
Productivity and investment growth (2000-2009) Source: Calculations based on data from Eurostat: Gross fixed capital formation by NUTS 2 regions nama r e2gfcf;
although it still trails far behind the capital on this measure, and well behind European averages.
Economic activity (Participation) and Unemployment by Level of Educational Attainment-West Region (2009) Source: Calculations based on data from INS:
The West Region is one of the most enterprise-and trade-dense regions in Romania.
Gazelles, firms with at least a 25%turnover growth for 3 or more years, are of particular interest both because of their contribution to employment and as an additional indicator of entrepreneurship.
suggesting that economic growth is likely to be balanced more, i e. evenly spread among different parts of the economy.
Figure 12: Sector Distribution of Gazelles in the West Region (2010) Source: World bank staff calculation based on SBS data 42.
Diagnostics, Challenges and Opportunities this exercise is based on the final sample of the SBS survey data as after excluding for outliers in
surviving firms are defined as those enterprises that are sampled in both years, while exiting firms are sampled those only in 2005.
Finally, the new start-up enterprises (NSU) are those whose date of incorporation is more recent than 2005
World bank staff calculation based on SBS data III. 2. Main challenges Fruits of economic growth were distributed not evenly across the region 45.
The fruits of economic growth and convergence with Europe were distributed not evenly across the region. Already substantial inequalities in economic and social outcomes were exacerbated sharply over the past decade.
Income disparities are linked to the concentration of population and economic activity in the main urban areas. While the cities of Arad (and its eastern and western fringes) and Timi oara concentrate the region's population,
and Vulcan account for relatively less economic activity than their population would suggest. Overall, value added per capita in the urban localities of the West Region stood in 2010 almost 2. 4 times greater than that in rural localities. 47.
Calculations based on customs data from Institute of National Statistics As a result of the spatial effect of the transition of the economy and conditioned in part by geography,
As part of a post socialist country, the West region economy was dominated by large state industries up until the early 1990s.
the lack of a tradition of entrepreneurship and SMES during the communist period has been a hindrance to bottom-up economic development.
These geographical endowments and development patterns still play a significant role in shaping the economies of the counties today
Institute of National Statistics Economic activity is concentrated increasingly by sector, firm size and firm ownership 56.
Economic activity in the West Region is concentrated in a handful of sectors that represent about half of the region's turnover and employment25.
Diagnostics, Challenges and Opportunities, the top ten sectors in the West Region listed on (Table 7) accounted for almost 54%of turnover
and 55%of employment in 2010 and the concentration of the West Region economic activity around them has increased between 2008 and 2010.26 25 Sectors are defined as 2-digit groups according to the NACE Rev 2 classification. 26 Drawing on the World bank
Diagnostics, Challenges and Opportunities these numbers are based on the final sample of the SBS survey data as after excluding for outliers.
listed in Table 7. Among the services sectors, wholesale and retail trade dominate the landscape in terms of turnover (9. 2%and 3. 8%respectively)
Diagnostics, Challenges and Opportunities. 37 regional borders, they start small in size. Table 10 and Table 11 present descriptive statistics about plants owned by firms headquartered in the region.
Diagnostics, Challenges and Opportunities this exercise is based on the final sample of the SBS survey data as after excluding for outliers. 38 Export performance is concentrated also very
This has contributed not only to significant investment and job creation, but has played an important role in integrating the West Region ever more tightly into the European economy. 66.
In fact, there is evidence showing that the region is connected to global value chains in agrofood, automotive,
the lack of export data for service sectors which includes ICT services prevents the use of the Taymaz et al (2011) methodology.
it does not identify the services segments of value chains, such as R&d, design, commercialization, distribution, marketing/branding, logistics,
and after-sales services, precisely the segments that allow for functional upgrading. Second, being reliant on export data,
it is less likely the business will be embedded fully in the local economy, particularly if it is owned foreign.
and apparel company established in Timisoara in 1995 through foreign investment from Italy. While they initially produced basic items like cotton t-shirts and bags
Increasing dominance of foreign direct investment (FDI) with weak links across firms and to local suppliers 69.
the West benefited significantly from the rush of foreign investment into the country. Component suppliers linked to Germany's automotive sector,
in particular, made heavy investments in the West during the early part of the 2000s. This was based primarily on a simple strategy of leveraging the wage advantages of Romania
the growth of the automotive sector in the West became almost exclusively a story of foreign investment.
however, that despite these trends, the West Region remains only the fourth largest recipient of foreign investment in the country, behind Bucharest, Centre,
Foreign ownership in the region's key sectors brings with it both opportunities and risks.
and Continental have expanded from their initial investment and now operate multiple facilities in the region.
along with Continental and other investors, have complemented labor intensive assembly operations with investments in R&d center.
and firms with both foreign and domestic capital (the Business Registry does not indicate ownership shares, only 100 percent foreign, 100 percent local, and mixed.
Partly Foreign indicates that the firm has both foreign and Romanian capital. 72. A second risk is owned that foreign firms‘crowd out'the local industry.
or by attracting the most skilled labor available in the market. There is no evidence to suggest 46 that the first two of these are relevant in the West Region:
However, there is reason to believe that the high demand for skilled labor from foreign firms and the opportunities they can offer may have negative implications for domestic firms.
In particular, in the technical and managerial jobs, foreign firms are able to offer young Romanians the credentials of a foreign firm, the experience of learning in leading edge environment,
and the potential to gain employment experience and opportunities abroad. 73. It is worth stressing
however that foreign owned firms can also bring significant benefits to the region, over and above the employment they create.
This comes from the spillover of knowledge and technology into the regional economy. As foreign firms are almost inevitably more productive
through human capital (i e. through workers), through supply relationships, and through competition and demonstration effects (via market competition and joint activities).
While the region benefits from the spillovers through human capital Romanians account for the vast majority of the workforce of foreign-owned firms,
including in management and technical positions supply chain linkages between the foreign and domestic sector are very weak.
including scale economies, the difficulty for small local suppliers to meet international quality standards, and the fact that many purchasing decisions at the foreign-owned firms are taken not in the West Region plant but at the corporate headquarters. 47 IV.
but because of their relevance and potential in the West Region's economy; they are: automotive, textiles, agro-food, ICT, construction,
and on facilitating the development of new economic activities through measures which support entrepreneurship and experimentation,
the current chapter proposes areas for policy action both on a horizontal level (common to all sectors),
IV. 1. Key challenges and opportunities for target sectors 75. The effectiveness of targeted innovation
If binding constraints relate to more structural bottlenecks on the business environment, the region needs to prioritize addressing these obstacles,
or to cope with growing international competition, or support potentially high growth companies to unleash latent comparative advantage through, for example, R&d and innovation policies, investments in skills formation,
or other business development services. 77. The World bank Smart Specialization Case studies Report has examined in detail the economic specialization of the West Region
and the clusters under analysis were classified in terms of comparative advantage. Available information suggests an apparent comparative advantage in automotive, textiles and ICT,
Specifically, the identification of specialization opportunities draws on the Structural Business Survey data (for the 2008-2010 period) and follows a three step approach.
Specialization opportunities by cluster Cluster Opportunities Automotive Manufacture of Other Electronic and Electric Wires and Cables,
It is worth emphasizing that the identification of specialization opportunities for each cluster is limited to the level of sector/activities.
which the identification of specialization opportunities has not drew on data (NACE 4 digit) sector analysis. 49 80.
since the role of a smart specialization strategy is to promote the role of the knowledge factor in economic growth,
but not to focus on specific economic activities. 81. Each cluster has its own constraints and specificities that will shape the future development of specialization niches.
and a system of local R&d and innovation to develop prototypes or to produce customized parts and components. 82.
enhancing the pool of skilled labor, which is in shortage in the region; creating a good environment for startups;
develop business accelerators and adapt incubators to the needs of the ICT sector; helping firms connect with global customers;
enhancing linkages and interactions with downstream (user) sectors; and improving the patenting policy. 85. For the construction cluster, the challenge is to better explore the local availability of construction materials
and to increase the use of energy efficient materials and technologies, which, although encouraged by the European union,
is not yet widespread in the region. The rates of activity for the construction sector have decreased steadily since 2008 as a result of the economic crisis.
As a result of the retrenchment in private sector investment, the government has become one of the most important clients for construction companies in the West Region.
Discussions with companies in the sector suggest that over the past few years government infrastructure contracts,
The lack of destination management organizations at regional, county and local levels reflects the absence of a common integrated strategy which has negative consequence including an unjustified competition between complementary destinations such as Timisoara
Other bottlenecks include reduced public administrative capacity for complex investment tourism-related projects, and the lack of regional integrated tourism products to be sold on local and foreign tourism markets. 87.
it will propose investment priorities that best fit the specific development needs of the West Region,
as well as concrete competitiveness and smart specialization regional projects to be supported under these investment priorities. IV. 2. Horizontal policy areas that impact West Region economy 88.
The identification of the main horizontal policy areas results from the combination of a consultative process with private sector representatives-drawing primarily on interviews with sample firms in the target sectors
As a consequence, this section highlights the perception of the private sector on the main bottlenecks for economic growth.
especially to the insertion of university graduates into the labor force, avoiding common problems of mismatch between educational supply and labor demand and overeducation.
This will require investments to improve the links between universities (as well as vocational training facilities) and employers.
It may also pay to make strategic investments in promoting disciplines and skills that are likely to be the cornerstones of the region's future economy. 91.
Lifelong learning is another important area for policy action. Lack of investment in lifelong learning makes the region's labor force unable to adapt to changing skills requirements resulting from shifts in industry structure and technology.
The result is high levels of structural unemployment (and low participation rates) and skills mismatches at all levels of the labor force.
and services (public and private) are there to support it, will be an important priority for the region.
This approach will ensure that new graduates acquire a skills set that meets the demands of the market
A concern highlighted in interviews with R&d stakeholders as well as with the private sector, was the lack of entrepreneurial and business management know-how.
as part of incubator services, or be provided to entrepreneurs through specialized programs at the local level.
Infrastructure connections to the capital (and the rest of the country) remain poor, and virtually every settlement in the West Region is closer to either Budapest
which are also distant from other European capitals. It may also be important to support the growth and diversification of the region's exports toward locations like Ukraine, Turkey,
Recent investments by some of the existing large automotive companies to establish second plants in Hunedoara
and other high skill activities in Timisoara-Arad and shift labor intensive production to other parts of the region) this obviously represents a huge opportunity to address both sides of the regional challenge.
In addition, enhancing regional mobility by connecting secondary and tertiary nodes to TENT-infrastructure is also important and a key issue for EU services.
In addition, other firms complained that reimbursements for investments pre-financed by the company may extend past the date specified in the contract. 103.
Either the company borrows the whole amount for the necessary investments or it takes advantage of the EU resources
eco-industry, microtechnologies, turbo-motors, electrical engineering, energy, environment protection, mechanics and materials, textile, leather, agro food and bio-food products, machine and technologies, tourism
while services are provided at county level. However, there is insufficient cooperation between regional and national authorities.
nor does it meet the demands of the private sector. 42 Authorities and policy makers should consider consolidating the existing RDI system
The Regional Development Agency emerges as the key institution with the capacity to connect national and local stakeholders
Development and Innovation. 41 The Government Decision 185/2013 does not mention how these structures can cooperate with the Ministry of Economy,
stakeholders in the region do not have much experience with licensing and not sufficiently aware of the potential gains from such activities.
This new administrative body would include all the key stakeholders in the region would hold quarterly meetings and design common projects, bringing on board the national R&d structures and policy makers.
update and modernize the curricula for theoretical education, vocational training and lifelong learning in order to answer to the demands of the business sector in the region.
The Enterprise Ireland provides a successful model of organization for this purpose (see Box 2). Box 2-Enterprise Ireland Enterprise Ireland is the government organization responsible for the development and growth of Irish enterprises.
It works in partnership with Irish enterprises to help them start, grow, innovate and conquer market share on global markets.
Enterprise Ireland is a body corporate established by the Industrial Development (Enterprise Ireland) Act 1998.
The members of the Board of Enterprise Ireland constitute the members of the agency. The agency operates in accordance with the provisions of the Industrial Development Acts 1986-2009 and under the aegis of the Minister for Jobs,
Enterprise and Innovation who is empowered to provide funds to the agency to enable it to discharge its obligations;
The Enterprise Ireland Board and its relevant committees have the authority to purchase shares (ordinary and preference) in client companies.
Under the terms of the Industrial Development (Enterprise Ireland) Act 1998, all functions and powers are reserved to the Board,
Enterprise Ireland fully complies with Government policy on the pay of Chief executives and State Body employees and with Government guidelines on the payment of fees to Board members.
Board members are appointed by the Minister for Jobs, Enterprise and Innovation, with the consent of the Minister for Public.
The Investment Portfolio Review Committee has responsibility for overseeing the management of Enterprise Ireland's investment portfolio
and for maintaining an oversight of the investment activity of funds supported by Enterprise Ireland under the various seed and venture capital programmes.
and controls the administration of Enterprise Ireland's budget, monitors progress against organizational targets, and considers matters of corporate policy,
Enterprise Ireland's approach to R&d and innovation is guided by the Government's Strategy for Science, Technology and Innovation, 2006-2013,
which is coordinated by the Department of Jobs, Enterprise and Innovation. The R&d Fund was launched in early 2008
Moreover, the goal of a smart specialization strategy is to expand the role of knowledge and innovation in economic growth,
The establishment of research institutes and labs will incentivize local firms to prepare prototypes, test their new designs,
The labs will also provide opportunities to conduct more frequent quality tests which will increase reliability of local producers. 118.
Closing the gap on financing for the acquisition of productive investments in new technology and machinery plays a key role for the textile sector.
or better financing terms on productive investments, especially on acquisitions of new technology and machinery.
The services offered by incubators and business accelerators should be expanded. While there is agreement regarding the usefulness of incubators and business accelerators,
it was highlighted during discussions that in order to be useful these infrastructures also need to provide other services, such as information about the sector and the clients,
assistance in drafting business plans, and advice regarding financing options. 123. Mentorship programs should be structured more efficiently,
and the incentives for mentors have to be clear. These incentives can take the form of shareholding,
or the right to subsequently participate in the ownership and management of intellectual property. Mentors also facilitate the firms'access to investors.
There are different successful models for this type of activity, some of them (such as Endeavor) which operate in different countries
The development of links with global customers and with downstream user sectors is also important.
and global customers would also be necessary. IV. 3. 5. Construction 126. Policies to support the regional construction
creating an enabling environment for efficient market selection emerges as an additional useful measure. This implies combining measures that promote firm entry
A tourism cluster can support cooperation between tourist stakeholders and between the tourism sector and different innovation actors.
and fits with the recent evolutions on the demand side (especially on the European travel market).
and will be listed in Chapter 5 (and presented in Annex 2) as part of a set of potential investment pilot initiatives. 62 Table 16-Overview of weaknesses,
strengths and opportunities for the region Weaknesses Strengths Potential Solutions General Fruits of economic growth not distributed evenly across the region (income,
such as technical and education Economic activity is concentrated increasingly by sector, firm size and firm ownership Export performance is concentrated very in EU markets
weak links across firms and to local suppliers Lack of cooperation between R&d institutions Limited information regarding the research sector, business and market opportunities, business support, national and local investment projects,
and there is continuing demand for the output produced in the region. Establish local research institutes
and labs to support firms in preparing prototypes, and testing new designs, products and processes. 63 domestic firms in the sector.
Human capital with skill sets that are suitable for the sector's needs has been expanding in the region.
subsidies and better financing terms on productive investments, especially on acquisition of new technology and 64 manufacturing.
Given that textiles industry is structured typically as a buyer driven commodity chain, the need to upgrading for West Romanian firms in the sector will not be fulfilled easily as it requires following very well established patterns. export in the region.
which can easily generate new business opportunities. The geographic location of the region gives it a clear advantage relative to the rest of Romania as well as to many other global competitors through its close proximity to the European market. machinery as a way to support the development of new design
agriculture, and veterinary sciences are areas of strength of the West Region universities Unexploited export opportunities with Serbia.
and has delayed the restructuring of farms in accordance with market demand and the need to enhance competitiveness advantage of opportunities for trade with Serbia, especially in
agricultural products, could be particularly important for parts of Cara-Severin. ICT The biggest challenge is to expand their activities (productive capacity) as a whole.
Expansion of services offered by incubators and business accelerators Support to mentorship programs Support the connection between angel investors and potential entrepreneurs (public action to research the market
and connect investors to new creative companies in need of funding). Support the development of links with global customers
and with downstream user sectors is also important ICT competitiveness pole (see chapter 5 and annex 2) Construction Insufficient use of the local raw materials (building materials, stone, waste materials, wood and wood waste, marble, water, etc) Insufficient use of energy efficient materials Limited awareness
and allowing firm exit Tourism Lack of appropriate infrastructure, services, and facilities Lack of local brand products Lack of integrated tourism service packages Low awareness at the political level regarding the potential
Meeting the two percent goal of regional GDP to be devoted to research and development would require substantial investments in the West region.
As a result, private sector investment in R&d in the region should be around 160 million Euro in 2020, a substantial increase from the modest 2010 level of 4. 14 Million euros. 46 137.
This chapter highlights a set of investment priorities tailored to the particular needs of the local industries
economy-wide areas of intervention that should be considered as part of the national strategies and national sectoral operational strategy. 138.
the RDAS fulfill the role a mobilization and mediation actor among different stakeholders in the region.
in order to help identify funding opportunities and to offer guidance to key initiatives in the region.
and promote (acting in partnership with other stakeholders) projects of regional and intraregional interest, and develop relationships with international bodies for promoting the regional interest. 48 For the programming period 2007-2013,
the chapter does not provide detailed measures for infrastructure enhancement due to the fact that infrastructure investment priorities are eligible for EU co-financing in the 2014-2020 period only if linked to a national transport master plan,
and the investment priorities that can be promoted at the regional level and proposes a number of specific investments.
V 1. Thematic objectives and investment priorities 140. Out of the eleven TOS defined by the EC,
five fit best the specific development needs of the West Region. Investments priorities to be identified in the next subsections can be financed from different ESI funds,
including the ERDF. Whereas, investments promoted at national level, through other programs, can also be implemented,
the current proposal focuses on investments that can be financed with regional initiatives. Thematic Objective 1:
Strengthening research, technological development and innovation 141. The need to strengthen research, technological development and innovation is motivated by the low level of R&d expenditure in the West Region-only 0. 22%of regional GDP in 2010,
but such investments are still at early stages. Further investments are needed to support business research and innovation,
to develop linkages and synergies between enterprises, and to improve R&d infrastructure in the region. 142.
The automotive, textiles, ICT, and agro-food sectors, as well as other activities, have significant potential for growth and innovation.
This would require complementary investments in spa and wellness tourism, ecotourism and active tourism, which can be financed under the TO6.
Improvements in the institutional framework are needed to maximize the efficiency of investments in research, development and innovation, through the creation and consolidation of specialized institutions,
Enhancing the competitiveness of small and medium-sized enterprises 145. The role of SMES is crucial to ensure economic development of the region,
and a wide range of smaller firms appears to be more conducive to competition and has the potential to maximize output and employment growth. 146.
Small and medium sized enterprises in the West Region need support to become competitive. Potential measures targeted at SMES could aim to improve labor productivity and energy efficiency.
Such solutions can include the creation of investments funds with joint support from EU funding.
Protecting the environment and promoting resource efficiency 148. The West Region has a significant touristic potential that needs to be exploited further and supported.
Expanding the availability of highly skilled labor force that can engage in innovative activities is a major challenge for the region.
including small and medium size enterprises. 152. Vocational training also needs to be expanded significantly and upgraded in order to supply a sufficient number of qualified technicians (specialized labor).
investments in educational infrastructure should be sustained through ERDF measures. These partnerships can be envisaged as self-sustained projects,
or as part of integrated projects for investments in research and innovation. Thematic Objective 11: Enhancing institutional capacity and an efficient public administration 153.
Specialized institutions are required to ensure the success of smart specialization investments. One or more administrative bodies are needed
which can coordinate investment implementation and can oversee a rigorous process of monitoring and evaluation.
Enhancing the competitiveness of small and medium-sized enterprises TO11. Enhancing institutional capacity and an efficient public administration PA2:
Protect the natural and cultural assets of the region TO 6. Protecting the environment and promoting resources efficiency PA3:
The proposed investment priorities envisage a mix of interventions aimed at (i) fostering the research and innovation potential of the sectors and actors with potential and interest in this regard,
and (ii) increasing the capacity of SMES to consolidate their position in the market, through innovative and sustainable investments. 156.
In this regard, investments priorities are designed to leverage the natural and cultural heritage of the region,
Productive and smart investments can only be complemented successful if with adequate interventions to ensure an appropriate skills match.
Besides soft measures, investments in educational infrastructure have to be continued in order to ensure equal access to education standards of a high standard. 158.
The specific objectives and selected investment priorities identified under these three priority axes are described in the following subsections.
The first investment priority under this axis is to enhance the regional research and innovation infrastructure and to promote centers of competence.
The specific objectives of this investment priority are to:(i) increase the research and innovation capacity of the region aiming to create new products and technologies;
Spain Policy makers can utilize public-private partnerships (PPP) to evaluate private sector's demand for research and development facilities,
CITES focus on providing technology services in specific economic sectors. These institutional arrangements have become an important part of Spain's innovation policy.
The services offered by CITES are tailored to the particular needs of the regions and include:
facilitating knowledge-transfer and the adoption of existing technologies by enterprises; overcoming potential gaps in sectoral value chains and helping firms meet quality standards;
identifying potential innovation opportunities in terms of products or processes in a variety of industries; facilitating the entry of new products on the market;
providing value added services to enterprises and acting as incubators for start-offs training Overall, these functions respond to the technological needs,
Major universities in the region have started to invest in technology transfer, but such investments and need to be exploited better
Under this investment priority projects that promote meetings and encourage connections between enterprises will be prioritized, particularly collaborative projects between two or more SMES. 74 163.
The second investment priority encompasses two goals: to promote business investment in innovation and research,
and to develop links and synergies between enterprises, research and innovation centers, and higher education for the development of products and services, technology transfer, and networking.
The specific objectives of this investment priority are to:(i) Promote the transfer of knowledge and innovation in regional economy;
and (ii) Improve access of enterprises to support services and foster enterprise development. 164. The technology parks already active in the region would benefit from investments in upgrading.
This would support the development of the existing research potential and promote technology transfer towards private businesses in the region.
The partnerships between universities, research institutes and private enterprises, especially the large ones, which have substantial growth potential based on the smart specialization of the region,
are to be promoted in order to develop investments in research and innovation that could generate products and services with high added value.
The most relevant sectors in the West Region economy are automotive ICT, textile, agro-food,
as well as existing clusters, which have the potential to be developed further. Innovative ICT products can be envisaged especially
if new business structures are to be developed. 165. During the next financing period measures can be implemented to help companies incorporate advanced services and technology into the production process,
thereby increasing the competitiveness of the private sector. Given the limited use of crosscutting technologies such as the ICT,
design, or eco-innovation, by regional SMES, companies in the tourism and agro-food sectors,
as well as automotive suppliers, and the construction and textile sectors will be the"beneficiaries"of ICT applications,
design and the eco-innovation programs and services. Priority will be given to projects that involve collaboration between businesses and industries.
Measures and projects supported under this investment priority can include: support for the incorporation of ICT in the tourism, textile and agrofood industries;
incorporation of enhanced design capabilities and eco-innovation by SMES (such as automotive suppliers, construction, textiles and agro-food firms)
The third investment priority under the current priority axis is to support SME growth and help companies increase innovation capacity.
The specific objectives of this investment priority are to:(i) contribute to the EU 2020 strategy by increasing the level of employment;(
Measures financed under this priority investment will aim to support SMES to develop their capacity for technology adoption and innovation.
An example of action that can be financed under this priority investment is the creation of an agro-food stock-exchange center.
The fourth investment priority is to enhance the growth potential of the rural areas by investing in the agro-food sector.
The specific objectives of this investment priority are to:(i) improve the competitiveness of the agricultural sector;
i) restructuring of farms, in particular through on-farm investments, financing for processing, marketing and development of agricultural products and investments in support infrastructure;
Measures under this investment priority should also promote food chain organization and risk management in agriculture by:(
new marketing and networking opportunities, the development of short supply chains, and the setting up of producer groups;
and (ii) assisting farmers with risk management and financing investments in preventive and restoration actions. 170.
The fifth investment priority aims to support the development of innovative finance capacity. The specific objectives of this investment priority are to:(
i) create new financial mechanisms to accelerate economic development; and (ii) create a regional development fund.
Box 5-Support for regional SMES in Georgia The Small Enterprise Assistance Fund (SEAF) launched in 2006 the Georgia Regional Development Fund, a financing mechanisms
which focuses on investments in SMES located outside the country's capital, Tbilisi, and those operating in the agro-food sector.
The Fund's 30 million USD portfolio comprises investments in fishing, fruit concentrate production, ecotourism hotels, and furniture.
As one of the main problems for investments at SMES level represents the lack of adequate financing opportunities, the introduction of a regional development fund,
This fund could act as a manager for investments in SMES located in the West Region,
and can administrate combined interventions of reimbursable funds and grants for productive and innovative investments, under the umbrella of the Regional Operational Programme.
This type of instrument can increase the availability of financing through a multiplying effect at the level of the regional economy. 172.
The sixth investment priority is to develop an institutional framework to support innovation in West Region.
The specific objective of this investment priority is to ensure the management of smart specialization investments. 173.
A proper implementation of smart specialization investments requires an administrative entity that can coordinate, monitor and evaluate investment progress,
in order to identify potential bottlenecks and find appropriate solutions. In this context, the goal of an institutional framework to support innovation in West Region is to ensure the effective and 50 This investment priority could be financed through ERDF and/or EARDF 76 efficient commissioning and implementation of smart specialization investments
and to maintain dialog and coordination with regional actors and with national authorities. 174. In this context, an innovation center for the West Region could act as an agency on behalf of regional authorities
Specifically, it could oversee the commissioning, continuity and expansion of smart specialization investments, as well as their coordination and synchronization with other instruments or policies.
The first selected investment priority under this priority axis is to protect, promote and develop the regional cultural and natural heritage.
The specific objectives of this investment priority are:(i) the restoration and sustainable use of the cultural heritage and the modernization or introduction of supporting infrastructure;
and modernization of the tourism infrastructure in order to increase the quality of tourism services and to support the sustainable use of natural resources..
and give them a real economic value by integrating them into attractive tourism circuits. The local administration can identify
The second investment priority is to protect and restore soil and biodiversity and to promote ecosystem services including NATURA 200051 and green infrastructure.
The specific objective of this investment priority is to protect and promote the bio diversity of the national parks of the West region.
This strategy can comprise two main actions:(i) including the protected natural areas for which management plans have not been developed on the list of future projects to be financed;
http://ec. europa. eu/environment/nature/natura2000/)77 measures specified by these existing plans. Management plans are essential in order allow land
The first investment priority under this priority axis is to improve the skills and competences of the labor force in order to best meet market needs.
The specific objectives of this investment priority are:(i) increasing the share of population with tertiary education;
The analysis of the regional level economy revealed a mismatch between the available skills and the needs of the labor market in the West Region.
Projects can be designed with the support of the regional authorities that can ensure coordination between the demand side and the training providers (schools,
and is one of the most important bottlenecks that have to be addressed through future investments.
and vocational training to the demands of the labor market, increasing the relevance of the educational and vocational training offer by anticipating private sector requirements,
and, ii) strengthening the capacity of vocational training providers to deliver attractive and high-quality education and training programs in correlation with labour market demands, especially for sectors with significant growth potential,
iii) developing and strengthening the partnerships between higher education institutions, business environment and research institutes. 181. The second investment priority under this priority axis is to invest in education, skills and lifelong learning by developing education and training infrastructure.
The specific objective of this investment priority is the rehabilitation, modernization, development and expansion of pre university, university education and continuous vocational training infrastructure. 182.
Soft Measures such as educational and vocational training programs have to be sustained properly by the educational infrastructure
Investments that have started under the current period should continue in order to build an appropriate educational infrastructure endowment at the level of the region. 183.
In addition to the investments priorities under the overall priority axes described above, local road and transport infrastructure has emerged as a key issue for the competitiveness of 78 the private sector in the region.
The chapter does not provide detailed measures for infrastructure enhancement due to the fact that infrastructure investment priorities are eligible for EU co-financing in the 2014-2020 period only if linked to a national transport master plan,
as well as the degree of dependence of the rural economy on increased connectivity to larger urban centers.
Thematic Objective 1 Strengthening research, technological development and innovation and Thematic Objective 2 Enhancing the competitiveness of small and medium-sized enterprises (as defined by EC.
At national level, investment priorities could concentrate on supporting (i) the national institutes for research and development, structures under the coordination of the Romanian Ministry of Education,
and (ii) the research, development and innovation, within the large enterprises. At regional level, the investment priorities could concentrate on regional competitiveness enhancement
and smart specialization and need to envisage a mix of interventions aimed at (i) fostering the research and innovation potential of the sectors and actors with potential and interest in this regard,
through innovative and sustainable investments. The projects to be financed under these two thematic objectives have to be in line with the national research and innovation strategy for smart specialization,
The Thematic Objective 6 Protecting the environment and promoting resources efficiency, which can be financed from ERDF and CF,
supports both national and regional investment priorities. At national level, the priorities could focus on supporting water
while at regional level, the investment priorities could concentrate on investments financed from ERDF, such as protecting, promoting
which can be financed from ERDF and ESF, supports both the national and regional investment priorities.
At national level, these investment priorities could concentrate on type of actions which can be supported by the ESF,
The detailed program overview, including specific objectives for each investment priority are presented below, along with the potential financing sources which can include national, local,
Overview of the investment strategy and main funding sources Priority axis Thematic objective Investment priorities Specific objectives corresponding to the investment priorities Financing resources/programme 1
and promoting centers of competence Contribute to EU 2020 strategy by increasing the investments in research and development Increase the research
technological development, innovation and business development National, local and EU financing West Regional Operational Programme 1. 2. Promoting business investment in innovation and research and developing links
and synergies between enterprises, R&i centers and higher education in particular products and service development, technology transfer and networking Contribute to EU 2020 strategy by increasing the investments in research and development Promote the transfer of knowledge
and innovation in regional economy Improving access to support services for SMES, to foster their development National, local and EU funds, West Regional OP TO3.
Enhancing the competitiveness of small and mediumsized enterprises 1. 3. Supporting the capacity of SMES to engage in growth
and innovation process Contribute to EU 2020 strategy by increasing the investments in research and development Contribute to EU 2020 strategy by increasing the level of employment Supporting access to international markets Promoting the diversification of activities with modern technologies National,
local and EU financing West Regional OP 1. 4. Enhancing growth potential of the rural areas through investing in agro-food sector Improve the competitiveness of agriculture sector Increase the wealth in rural areas National,
local 81 Priority axis Thematic objective Investment priorities Specific objectives corresponding to the investment priorities Financing resources/programme of
and an efficient public administration. 1. 6. Developing institutional framework supporting innovation in West Region Ensure the management of smart specialization investments National,
culture assets of the region TO 6. Protecting the environment and promoting resources efficiency 2. 1. Protecting,
modernization of the tourism infrastructure for sustainable valorization of natural resources and for increasing the quality of tourism services National,
and promoting ecosystem services including NATURA 2000 and green infrastructure Promote the bio-diversity of the National parks of West region National, local and EU funds,
West Regional Operational Programme 82 Priority axis Thematic objective Investment priorities Specific objectives corresponding to the investment priorities Financing resources/programme 3. Education
The operationalization of the measures highlighted above encompasses, in some extent, the implementation of investment projects.
and smart specialization investment pilot initiatives that could be developed and implemented starting with 2014. These investment projects have not been appraised nor endorsed by the World bank.
This list should be considered as merely illustrative. Additional details regarding these potential pilot initiatives are provided in Annex 2. Table 19-Examples of investment pilot initiatives 1. Innovation center for the West Region which could play a key role in the promotion
of the innovative potential of the region 2. A ICT competitiveness pole 3. A regional development fund focused on financing innovative projects in the West Region 4. Upgrade of the existing industrial parks
Table 20 below outlines the manner in which the overall proposed actions respond to each investment priority,
along with the best modalities to finance projects under each investment priority, and suggests types a set of general results indicators. 53 Established at the national level as part of the EU 2020 Strategy. 84 Table 20-Actions to be supported under the investment priority Investment priorities
Proposed pilot initiatives Guidelines for selection of operations/Financial instruments Results indicator 1. 1. Enhancing R&i regional infrastructure
2. Promoting business investment in innovation and research and developing links and synergies between enterprises, R&i centers and higher education in particular products and service development,
and competitiveness center for the auto industry List of preselected projects identified in the Regional Development Plan Number of enterprises that introduced new or significantly improved products,
sector Restructuring of farms, in particular through on-farm investments, investments related to the processing, marketing and development of agricultural products or investments in infrastructure for the development and adaptation of agriculture;
new marketing and networking opportunities, the development of short supply chains and the setting up of producer groups;
Call for projects Number of farms supported Number of SMES in rural areas created/developed 85 Investment priorities Proposed pilot initiatives Guidelines for selection of operations/Financial instruments Results indicator
and mechanism Call for projects Number of jobs created No of SMES assisted 1. 6. Developing institutional framework to support innovation in West Region Setting-up an institution responsible for managing smart specialization investments Number
and equipping of pre university, university education and vocational training infrastructure List of preselected projects identified in the Regional Development Plan Service capacity of supported education infrastructure 86 Investment
Table 21-Overall outline and time frame for the development of smart specialization strategy in the West region Key actions Investment priorities Time frame I. Improve the institutional framework supporting
First tranche of contracts concluded by June 2015 1. 2. Promoting business investment in innovation and research and developing links and synergies between enterprises, R&i centers and higher education in particular products and service development
First tranche of contracts concluded by June 2015 1. 5. Supporting the development of innovative finance capacity for regional development Design the investment fund project by mid of 2014
using TA funds from the current programme Setup the investment fundend of 2014.87 III. Priority Axis 2 2 1 Protecting, promoting
and promoting ecosystem services including NATURA 2000 and green infrastructure IV. Priority Axis 3 3. 1 Improving skills and competences required in labor market Correlate the investment priority with the Human resources Programme financed under European Social Fund
and with the list of public projects as defined at point 3. 2. 3. 2 Investing in education,
These objectives aim to tackle both the structural weaknesses in Europe's economy exposed by the crisis,
while reducing regional disparities in terms of income, wealth and opportunities. 191. In this context, although the Western part of Romania has a per capita GDP that is higher than the national average,
Due in part to these advantages, the region has experienced rapid economic growth which has delivered rising real wages,
Third, economic activity in the region is concentrated in a handful of sectors that represent about half of the region's turnover and employment
and promotes a larger contribution of the knowledge factor to economic growth. 194. The identification of the region's comparative advantage assumes a key role in the design of a strategy for smart specialization.
but because of their relevance and potential in the West Region's economy. This assessment has revealed, based on available information,
and labs to support firms in preparing prototypes, and testing new designs, products and processes;
provision of tax incentives, subsidies and better financing terms on productive investments, especially on acquisition of new technology and machinery as a way to support the development of new design or products;
expansion of services offered by incubators and business accelerators; support for mentorship programs; support for the connection between angel investors
and support for the development of links with global customers and with downstream user sectors.
3) Enhancing the competitiveness of small and medium-sized enterprises;(6) Protecting the environment and promoting resources efficiency (10) Investing in education, skills and lifetime learning;
and (11) Enhancing institutional capacity and an efficient public administration. 199. Second, after grouping the selected thematic objectives under priority axis,
specific investment priorities were identified. In order to help meet the goals of the EU 2020 strategy, these investment priorities aim to:
increase financing in research, development and innovation process in the West Region (priority Axis 1);
These investment projects have not been appraised nor endorsed by the World bank. This list should be considered as merely illustrative. 201.
The region has a dynamic economy, and stands out among the other regions of Romania as result of a high level of economic development, solid export growth rate, relatively skilled human resources, a large diversity of natural resources,
In the 2014-2020 period, the West Region has the opportunity period to use its specific human, natural,
NACE 2 sector list Sector NACE CODES Comments Tourism 55 all (country definition) 56 all (country definition) 79 all (services
regarding tour-operators&booking) 932 all (services regarding entertainment) Table A1. 9. Construction cluster: NACE 2 sector list Sector NACE CODES Comments Construction 41 all (country definition) 42 all (country definition) 43 all (country
definition) 93 Annex 2 Decription of regional investment pilot initiatives The table below lists 14 examples of competitiveness
and smart specialization investment pilot initiatives that could be developed and implemented starting with 2014. These investment projects have not been appraised nor endorsed by the World bank.
This list should be considered as merely illustrative. Pilot initiatives Brief overview 1. Innovation center for the West Region which could play a key role in the promotion of the innovative potential of the region.
monitor and evaluate investment progress in the region, in order to identify potential bottlenecks and find appropriate solutions.
In this context, the goal of an institutional framework to support innovation in West Region is to ensure the effective and efficient commissioning and implementation of smart specialization investments,
which could be used to identify investors, co-operation partners and innovative investments. Innovative software applications would greatly also enhance the competitiveness of the tourism sector.
and could promote key EU objectives such as entrepreneurship, growth, innovation, research and development, as well employment. This regional fund could support public-private infrastructure investments and guide the available funding towards innovative projects.
The establishment of a development fund for the West region either for specific finance provision for technology oriented firms
High-tech Gründerfonds is funded through a PPP between the German federal government (Federal Ministry of Economics and Technology), the Kfw and German industry (ALTANA, BASF, B. Braun, Robert Bosch, CEWE Color
Its main goal is to provide a high tech Seed Fund aiming to enable start-ups to take their R&d plans through to the preparation of a prototype,
in order to create technology parks that can provide support services for innovative activities. The key industrial areas of the West region can also be upgraded to industrial and technology parks, based on demand assessments.
The project could potentially be coordinated through the regional innovation center pilot initiative 5. Regional exhibition
Events constitute opportunities to discover the traditional heritage of the city presented in a different manner.
and service enterprises in the five northernmost counties of Sweden; Norrbotten, Västerbotten, Västernorrland, Jämtland and Gävleborg.
The Norrland Fund's share often amounts to 25 percent of the total capital, so it often works in partnership with other funding entities such as banks, venture capitalists, local government etc.
would incentivize local firms to prepare prototypes, test their new designs, products and processes will
The labs would also provide opportunities to conduct frequent quality tests thereby increasing the reliability of local producers. 7. Laboratory
and innovation center for the textile industry The services provided by the new structure can include:
computer-aided design, contract quilting, contract yarn spinning, custom printing, fabric welding, textile designers services, custom embroidery,
These services would offer comprehensive solutions that help improve traceability, reduce losses and improve competitiveness.
The center could support the design of new products and technologies by offering entrepreneurs a series of services
a regional supply demand market can be established to serve a large share of the small agro food firms
protection and appropriate use of the tourism opportunities of the region. 13. Geo therapy center This type of initiative would aim to build
The pilot center could also provide support for the regional network of spas resorts to improve the quality and standards of services 14.
Pilot initiative on development solutions for the mining areas Regional stakeholders and policy makers could launch a pilot initiative to support the economic development of the mining and industrial regions.
and facilitate collaboration on research projects. 101 Annex 3-Use of Integrated Territorial Investments for sustainable development of the West Region For the 2014-2020,
One of these instruments Is integrated the Territorial Investment (ITI), which is defined as being a territorial development tool that enables the implementation of a territorial strategy in an integrated manner
The detailed analysis performed at the level of the West Regions revealed some territorial characteristics either of concentration of economic activity, as it is Timisoara-Arad conurbation,
Integrated Territorial Investment for Timisoara Arad growth pole. Under the current EU financed program-Regional Operational Programme 2007-2013, Timisoara and Arad are considered under distinct definitions.
by identifying and setting up some actors essential for the facilitating the activity aiming a large number of stakeholders,
in order to facilitate commuting towards the areas with higher concentration of economic activities. Integrated Territorial Investment Jiu Valley.
Jiu Valley can become a flourishing area if appropriate measures are taken. By creating the ITI for Jiu Valley a strong partnership of the 6 small cities of Jiu Valley will be setup able to participate in a structure aiming to design
without other job opportunities and low level of attractiveness for investments bearing a permanent declining since 1990.
development of a sustainable economic environment through measures for using the coal tailings in a smart way;
In order to exploit their potential with a view of promoting economic growth in the region, the following priorities can be identified in a common development strategy at the level of the two counties:
and promoting investments under different operational programs, as part of the regional development plan for the West Region;
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