Montenegrin research and innovation landscape

– by Ljiljana Belada –

LandscapeResearch and innovation are key to tackling the economic and social challenges of Europe. They contribute to the use of new growth opportunities generated by knowledge, technological advancements, innovation processes and product innovation, and new business models that support economic development and help address social challenges.

Science, technology and innovation are important drivers for the Europe 2020 Growth Strategy.

In 20151, the Member States of the European Union spent all together almost €300 billion on Research & Development. The R&D intensity, i.e. R&D expenditure as a percentage of GDP, stood at 2.03% in 2015, compared with 2.04% in 2014. Europe 2020 Strategy sets out a vision of Europe’s social market economy for the 21st century and notably retained the 3% R&D intensity goal as one of the five headline targets to be achieved by the EU by 2020.
The business enterprise sector continues to be the main sector in which R&D expenditure was spent, accounting for 64% of total R&D conducted in 2015, followed by the higher education sector (23%), the government sector (12%) and the private non-profit sector (1%).

In 2015, the highest R&D intensities were recorded in Sweden (3.26%), Austria (3.07%) and Denmark (3.03%), all with R&D expenditure above 3% of GDP, closely followed by Finland (2.90%) and Germany (2.87%). Belgium (2.45%), France (2.23%), Slovenia (2.21%) and the Netherlands (2.01%) registered R&D expenditure between 2.0% and 2.5% of GDP. At the opposite end of the scale, seven Member States recorded a R&D intensity below 1%: Cyprus (0.46%), Romania (0.49%), Latvia (0.63%), Malta (0.77%), Croatia (0.85%), Bulgaria and Greece (both 0.96%).

Montenegro is a young country which became independent in 2006. Montenegro is situated in Southeast Europe covering the area of 13,812 km2 with total population of 620,0292 inhabitants that accounts for 0.1% of the EU population.
Since independence in 2006, Montenegro has undertaken a number of reforms aimed at creating a more suitable environment for research and innovation.
According to the latest data collected by MONSTAT (National Statistical Office), the total expenditures on research and development (GERD)3 in 2015 was at the level of 0.38% of GDP (€13,67M), which is significantly below the EU average of 2.03% of GDP, and far from Montenegro’s own target of 1.40% set up by 20164. The main source for funding of research and development (R&D) activities in Montenegro is the government budget, almost 50% as a share of GERD.

Montenegro, as small economy, despite different subsidies and incentives for private sector research, is still far behind the developed countries in terms of the technological capacity of its business sector.
Government of Montenegro, and in particular Ministry of Science, is conscious of serious efforts that are required to increase the level of investment in research, particularly from the private sector. Intense incentive measures for public sector investments are already offered, through enhancing public-private partnership for establishing the first Centre of Excellence in BIO- ICT, and Science and Technology Park “Technopolis”.
Over the past years, good progress has been achieved with the measures related to this area. A new Strategy on Innovative Activity (2016-2020) was adopted in July 2016, and the Law on Innovation Activities was adopted in June 2016. This law governs the organisation, conditions and manner of financing innovation activities.

Several other areas are under preparation including a Strategy of Scientific Research Activity 2017-2021 as well as a Smart Specialization Strategy 2018-2022. In this regard Montenegro has requested accession to the Joint Research Centre Smart Specialization platform. Montenegro also has a Research Infrastructure Roadmap (2014-2020) which defines and presents priorities in the field of research infrastructure. In this regard preparations are underway to establish a Science and Technology Park within the University of Montenegro, aimed at strengthening links between the academic and economic sectors and encouraging innovation. This would be seen as the central point, feeding BIO-ICT and “Tehnopolis”.

Despite many initiatives, new legislation, and adoption of strategies, it is evident that there has been still little tangible progress in the area of R&D capacity, technology transfer, and innovation in Montenegro. Undoubtedly, limited funding is a serious factor.
The Ministry of Science is the dominant funding mechanism in Montenegro. The financing of R&D is executed via annual national calls for research proposals published by the Ministry.
Apart from supporting the employment of young researchers, improving of university research laboratories and infrastructure of research institutions, expanding opportunities for mobility of researchers, programmes cover other instruments for enhancing science research activities, such as participation to COST and EUREKA programs, promotion of science and research in education and wider society, cooperation with science diaspora, master and PhD studies, supporting patent authors and innovation ideas, etc.

July 1st 2014. Montenegro became the first country from the region to join the EU Framework Programme for Research and Innovation – Horizon 2020. The national coordination body is the Ministry of Science.
Even though there were numerous info days, trainings and workshops organized by different institutions on Horizon 2020, its content, programmes, opportunities for beneficiaries, Montenegro is not satisfied with the results.

It is clear that the EU’s decision to open and temporarily close on the same day the Chapter 25 – Science and Research, approves the level of harmonisation of science-related policies and legislation on Science and Research with the Treaty on European Union and EU’s goals, guidelines and priorities in this area. It is also clear that this chapter contains very few community regulations, because science largely remains in the domain of the national governments.
Nevertheless, it doesn’t mean that Montenegro is in any way up to European standards in Science and Research. Rather, it should be understood as encouragement, and a positive signal for further negotiations.
The decision is conditional on Montenegro meeting three aims: raising the level of investments into science, stepping up bilateral and multilateral cooperation, and creating conditions for science to become the driving force of innovations in the country5.

1 Source: Eurostat Newsrelease, 30. November 2016
2 Source: MOSTAT, Census 2011
3 Source: MONSTAT, results of the Survey “Research and Development in 2014”
4 Set in the Strategy for Science-Research Activities of Montenegro 2008-2016, and its Updated version 2012-2016
5 EC Progress Report, Montenegro 2016

image001Ljiljana Belada currently works in the Directorate for Development of SME, Montenegro, within the Ministry of economy. She is the Head of Enterprise Europe Network Montenegro – EEN, the biggest entrepreneurship network in the world. She has been coordinating Montenegrin Consortium from 2010.

She has been working in the DDSME from 2001, engaged in coordinating institutional support mechanisms, promotion and development of regional and international cooperation.

Ljiljana Belada is the member/representative for:

  • COSME Programme Committee (EC Framework Program for Competitiveness of Enterprises and SME)
  • NCP for SME for Horizon 2020 (EC Framework Program for Research and Innovation)
  • President of the Board of directors of the first IT business incubator in Montenegro
  • Member of the WG on Innovation Law in Montenegro
  • Member of the WG on Innovation Strategy of Montenegro
  • Member of the WG on Smart Specialization Strategy Montenegro

She is involved in numerous national and international projects for SME development, research and innovation projects and initiatives.

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Polish (EU13) SMEs in the Framework Programme – Horizon 2020

– by Katarzyna Walczyk-Matuszyk –

Horizon 2020 gives an opportunity for innovative SMEs for market up-take of their solutions. Yet the successful participation is not an easy job in particular for EU13.

As currently the largest Framework Programme with a budget of approx. 80 billion Euros offered by the European Union, Horizon 2020 focusing on research and innovation gives its priority to Small and Medium Sized Enterprises. SMEs provide the most jobs in the EU, ensuring the economic growth and innovation, what was as well recently proved by the economic crises.

The priorities are not only purely a declaration but are set as quantitative goals. 15% of the two main Horizon 2020 pillars i.e. Industrial Leadership and Societal Challenges should reach SMEs directly. A portfolio for the entities is as well open under Access for Risk Finance programme offering financial and debt instruments. Additionally, the first criterion for differentiation during the evaluation of the project proposals relates to the seize of the budget dedicated to SMEs in the project. But without a doubt the SME Instrument should be called a star of the Framework Programme.

For the first time, the instrument gives a possibility for highly innovative single SMEs to apply for grants up to 2.5 million Euros jointly with world-class business coaching and business acceleration services. The budget of the intervention designed at 3 billion Euros for 7,500 companies up to 2020, allowed within initial three years the support of 2,500 SMEs (out of 31,000 applicants) from 36 countries. The top success rate states for Iceland (20%), Austria (13%), Denmark (13%), Ireland (13%) and Sweden (12%), whereas the most applicants come from Spain, Italy, United Kingdom and Germany1.

Statistics for countries from EU13 ranked within the latest (2017) European Innovation Scoreboard as modest and moderate innovators reflect potential, however the region is still lagging behind the top 10 beneficiaries. Both in terms of success rate (the highest for Estonia at 9%) and number of beneficiaries (64 for Poland)2.

Barriers for Polish (and EU13) SMEs in Horizon 2020
The results of SME Instrument and Horizon 2020 (only 5% of the granted Horizon 2020 budget went to EU13 beneficiaries) prove the discrepancies between innovators towards EU. Main barriers for the region, Poland in particular, may be related to the innovation level of SMEs itself but as well to many other issues, such as significant funding available under EFSI dedicated to support of entrepreneurship and competitiveness being in selected cases a competition for FPs. Other barriers such as IP, weak visibility and internationalisation should be also mentioned. Structural challenges related to legal provisions cannot be forgotten. On the other hand, financial rules (without new regulation related to remuneration) are perceived as rather adopted to advanced partners. But a phenomenon of so called “closed clubs” presenting cumulative advantages and participation in Horizon 2020 of large, well-reputed advanced institution seems to have the greatest effect of the FP’s results3.

Newcomers, higher education entities from EU13 and SMEs in particular in regard to collaboration projects based on international consortia, with weak or lacking well-developed network do not stand the competition with advanced partners, and are more likely to fail. Additionally, successful participation is a matter of a learning process to which well-established partners with a history in Framework Programmes were exposed to for a significant period of time. Yet, the familiarity with administrative aspects, collaboration rules or lack of skilled resources shall be considered as a barrier in the application process.

Using synergies with EFSI
As the SME Instrument fully meets the market demand, which is proved by low success rates, the European Commission decided to grant above threshold proposals with the Seal of Excellence (SoE) certificate. Its holders should have an opportunity to apply either for national/ regional funding in a fast track procedure or go for private investments. As a reply to the EC initiative, Poland decided to implement the possibilities for financing polish companies with SoE from EFSI schemes. By September 2017, 26 companies (out of 59 Seal of Excellence certificate holders) received the funding for their innovative projects. Applicants with the results above threshold from Phase 1 were more willing to apply for the funding, whereas the most Phase 3 SoE holders decide to continue their efforts under Horizon 2020. This is related to EFSI financial regime with limited possibilities to support commercialisation activities, and above all EFSI undergoes simply the regime of state aid rules.

Whereas the implementation of the Seal of Excellence scheme might at a glance weaken a countries’ position in Horizon 2020 (re-submitted proposals are more likely for success), its real impact relies in strengthening the regional innovative eco-systems ensuring the market up-take of break-through innovation. Here however, the most crucial role is to be played by regions and regional operational programmes which are in a position of giving priorities to project implementing FPs results. Additionally, the portfolio of instruments should support the capacity building and international networking process.

European Union continues its efforts in supporting SMEs, the new part of Horizon 2020 i.e. European Innovation Council with a focus on innovation, highlights the significant role of SMEs in strengthening the EU competitiveness advantage. Furthermore, the discussion on the EU13 (Widening) participation in the Framework Programme is accelerating trying to define main obstacles and design the most appropriate measures to avoid negative effects. The way of the EU13 applicants towards Horizon 2020 still remains a bumpy ride, nevertheless due to reasonable and tailored activities implemented at various levels (EU, country/ region and entity itself) it will not be for sure a dead end.

1Horizon 2020 SME Instrument impact report 2017 edition

Katarzyna Walczyk-Matuszyk – Deputy Director in the National Contact Point for Research Programmes of the EU. Katarzyna is a member of the Programme Committee for SMEs and Access 2 Risk Finance and Strategic Committee at the European Commission. On a daily basis Katarzyna supports innovative SMEs, start-ups and large companies, Centres of Excellence and research institutions in obtaining funds for the development of innovation projects. Her fields of specialization are innovation, cooperation industry-academia, synergies between EU financial sources and international cooperation. She has a long-lasting experience in management and implementation of the European projects financed under Framework Programmes (7th Framework Programme, Horizon 2020), Structural Funds and Norway Funds. She holds a post of the Coordinator of the NCP_WIDE.NET project (financed under Horizon 2020).

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What Is the Role of the Founder in an Entrepreneurial Business?

– by Chuck Russell –


Who wants to be an entrepreneur? Who can be an entrepreneur? There are more than 582 million people in this world in the process of starting or running their own business according to the latest Global Entrepreneurship Monitor that surveyed 65 different economies worldwide. The number of people who dream about being an entrepreneur is many times higher.

There are many people who want to be their own boss or to pursue their dream of what a business could be. They may have an idea and want to make it into reality. Technology and the Internet has made it possible for anyone to start a business. But, entrepreneurship is much more than that. The reality is that starting an entrepreneurial business is much easier than dealing with the challenges in making the business sustainable.

Businesses of every size require the same things:

  • Customers must be persuaded to buy goods or services.
  • Potential customers must learn about what the business has to offer through marketing and communication.
  • The goods or services must be delivered in a satisfactory way to the customers.
  • Any problems or customer dissatisfaction must be handled promptly and effectively.
  • Financial records must be maintained, and customers must be billed for the goods and services which they purchased.
  • Goods or services that are required to produce those being sold by the business must be purchased economically so as to enable the business to make a profit.
  • The performance of employees must be managed and problems dealt with promptly and in a positive manner.
  • New employees must be recruited and trained as the business grows.
  • Effective processes and procedures must be developed so that the business functions consistently and efficiently.
  • New ideas must evolve as the market changes or when new opportunities present themselves.

Whether the entrepreneur sells the latest technology or mangoes in a street market, some version of these things must happen. No one person can effectively perform all of these things well.

  • Maybe they can sell anything, but keeping track of financial details is hard.
  • Maybe they are brilliant in the application of new technologies, creating amazing products, but they cannot really manage other people.
  • Maybe they have a well-organized business with great products, but they are uncomfortable meeting new people.

In each of these cases, key parts of a successful entrepreneur are there, but something else is missing. The challenge is that entrepreneurs are usually so busy working to make their business survive that it is hard to see what the real problem is. These kind of shortcomings are explained away as “not having enough time” or “other things are more important right now”. Larger companies bring in consultants to help them with such problems, but that is usually too expensive for small entrepreneurs. Advice from their friends and family is not always helpful. There are online tools that enable entrepreneurs to inventory their own hard-wired personality strengths and abilities to see what is the best role for them and what else is needed for the business to prosper. At the least, the entrepreneur can list the key functions that are critical for the business to succeed. They can then rate those functions on a ten-point scale, with “1” meaning that the entrepreneur has little or no knowledge or experience with that function. A “10” indicates that the entrepreneur has strong knowledge or experience with that function. Recognizing the weak areas enables the entrepreneur to put a plan in place for strengthening that area with an additional employee, outsourcing that function or with additional training for themselves.

I welcome your feedback, questions or observations of your own at

Chuck RussellMr. Chuck Russell is Chairman & CEO at BestWork DATA, United States of America. He is a thought leader in the business applications of predictive DATA that measure how people think, learn and behave. His first book, Right Person-Right Job, Guess or Know, showed how the information provided by the latest generation of assessment technology shattered the traditional paradigms of management, hiring, and training. Over the last ten years, he has developed a series of disruptive innovations within the assessment industry, combining state-of-the-art psychometrics with an easy-to-use system that eliminates the need for experts or special training. Using this DATA, each individual can be seen in terms of the job behaviors needed in any position or within any team through bias-free metrics, thus strengthening non-discriminatory hiring practices. Chuck has a degree in Economics from Spring Hill College, and is a member of Mensa.

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Financing Small Businesses: the Jamaican experience

– by Omar Chedda –

scala mobileSmall businesses tend to face higher risks globally, particularly in developing countries like Jamaica, due to their limited economies of scale, networks and capital base. Hence, many small businesses find it difficult to access appropriate financing at an affordable cost.

Studies have found that credit access in markets dominated by a few large banks tends to be lower for small businesses than in markets with a relatively larger share of small banks. It has also been found that, all else being equal, regions with a robust network of small local banks are home to significantly more small firms. Community banks tend to do much more small business lending than their big competitors. One reason for this is that big banks rely on formal models and procedures to determine whether to make a loan. Because the local market conditions and the circumstances surrounding each borrower and his or her enterprise are so incredibly varied, this standardized approach does not work very well when it comes to understanding the nuances of risk associated with a particular small business. Consequently, as large banks have consolidated the market, small businesses have had a harder time obtaining loans from these traditional sources. By drawing on qualitative information – getting to know the borrower, learning about the business, and understanding the market – small banks can better assess risk and successfully make loans to a wider group of small businesses.

The lack of adequate risk assessment methods has been found to be one of the main challenges to serving small businesses. Many traditional financial institutions do not have separate methodologies for micro and small enterprise risk assessment. Most of these institutions use their existing risk assessment tools for small business clients despite the fact that a different level of client analysis, including life cycle analysis, might be required.

Micro Finance Institutions

Many financial service providers have experienced stagnating loan portfolios with existing clientele and have recognized the growth potential of small business lending, which can yield higher returns over the short term. Consequently, financial service providers have established Micro Finance Institutions (MFI) as branches of their operations to better serve the needs of small enterprises. Additionally, new market entrants have established exclusively as MFIs. These MFIs usually focus on enterprises that are smaller than usual banking clients and which are often informal.

Unfortunately, most MFIs in Jamaica continue to offer standard loan arrangements for clientele, and have not given much consideration to alternative financing arrangements for small businesses, such as factoring. The main reason given for the lack of innovation in financing is the undeveloped secondary market for tradable instruments and assets, and the regulatory deficit.

The Jamaican Experience

Jamaica recognizes the economic significance of the Micro, Small and Medium Size Enterprises (MSMEs) as a major creator of employment and wealth. The Government has placed entrepreneurship and MSME development at the forefront of the country’s Growth Agenda. The goal is to provide the best business climate and support services for MSMEs in order to help them to achieve success, while positioning them to contribute in a big way to the growth of the Jamaican economy and strengthen Jamaica’s participation in global trade.

Jamaica’s labour force data indicate that the “Own Account” category (representing sole traders) accounted for 36.3 per cent of the average employed labour force in 2015. In addition, MSMEs make an important contribution to gender equity in the local economy, with women representing approximately 52 per cent of the labour force in Micro and Small Enterprises (MSEs). There is also a strong linkage between MSEs and the informal sector, as many MSEs operate informally. According to a study, if the contribution of the informal sector were taken into account, it would have increased the size of Jamaica’s registered GDP by a range of 40 to 44 per cent.

Almost half of all MSEs and informal enterprises are engaged in the wholesale and retail trade, with education, social work and other personal services accounting for 22 per cent. This has important implications for the local debate about targeting financing for small businesses engaged in “productive” activities in order to increase exports rather than distribution. With half of MSE’s involved in wholesale and retail, this is a sector that requires access to financing.

Some of the initiatives to improve financing for MSMEs include: addressing regulatory deficits so as to encourage innovation in financing; expansion of capacity development programmes; increased role of Credit Bureaus to provide risk ratings; improving competition in the financial services industry; and improving the tax framework for the financial services sector.

In order to encourage innovative businesses, the Government is putting in place the framework to encourage private sector investment in venture capital funds. A Venture Capital Programme was established with a mandate to develop the ecosystem for venture capital and private equity in Jamaica. This Programme seeks to increase the access of dynamic small and medium enterprises (SMEs), with high-growth potential, to early-stage and growth equity financing.


Micro, Small and Medium Enterprises comprise three different categories of businesses that require different staff capacities at lending institutions, management systems, and risk assessment tools. They also require different types of financing at different stages of their life cycle. Lenders need to understand the financing requirements of these three categories of businesses and the sectors in which they operate, in order to tailor lending instruments accordingly. Likewise, governments need to tailor the regulatory framework because one size does not fit all.


Omar Chedda2

Omar Chedda is Director of the Investment Branch at the Jamaican Ministry of Economic Growth and Job Creation. He provides support and advice to the government in the formulation of policies, creation of implementation strategies, and programmes that maximize the benefits of existing investments and that foster the expansion of investment opportunities in Jamaica. One of the officials in Jamaica leading discussions on investment climate reforms.


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IP Considerations for App Developers in South-East Asia

– by the South-East Asia IPR SME Helpdesk Team –

In a world of increasingly affordable smartphone technology and rapidly expanding connectivity, the digital marketplace makes room for new players on the scene: the app developers. Third party’s apps have become the core part of the smartphone package, providing users with almost limitless potential for productivity, utility, education and leisure, and apps are serving as a huge part of smartphone marketing strategy and user attraction.

With the number of smartphones overtaking non-smartphones back in 2013 and total worldwide app related revenues set to top $45 billion this year (2016), app development is an increasingly attractive industry for software producers.

South-East Asia is one of the world’s fastest growing App market and is hailed by many as the ‘next frontier’ for app sales growth. With a population of 622 million across 10 countries, South-East Asia has seen an increase in downloads of 40% between December 2013 and December 2014 and revenue growth of 75% 1.

The fastest growing South-East Asian countries for both app downloads and revenue include Indonesia, Malaysia, Philippines, Thailand and Vietnam, each experiencing considerable growth in recent years, making these countries fantastic potential markets for app developers. Before taking products to these markets however, it is crucial for developers to both protect their ideas and designs as well as ensure that the appropriate permissions and licenses are sought for any protected material included in their own apps.

Brand Protection

Names of apps shall be catchy and distinctive. One of the first priorities of any business looking to enter a new market should be brand registration, and as IP protection is a territorial right, brand protection is recommended in that jurisdiction. Brand is best and worldwide protected through registration of trade marks.

Trade mark registration is generally a simple process everywhere in South-East Asia, but as most South-East Asian countries function under the ‘first to file’ system this should be undertaken as early as possible, so as to avoid the risk of ‘bad faith’ registrations, and trade mark hijacking by domestic companies either seeking to take advantage of the target brand’s reputation or make a profit selling the mark back to the EU registered owner for a profit.

Additionally, SMEs should consider how their trade mark would translate into local languages. The registration of a trade mark in original Roman characters does not automatically protect the trade mark against the use or registration of the same or similar trade mark written in local scripts. If a local equivalent is not chosen, consumers will almost certainly choose their own, which might affect the reputation of the company. If this local name is not registered, companies also run the risk of another company freely copying, or registering the local trade mark themselves. In particular, in South-East Asian countries SMEs are highly advised to register their trade marks in local script version such as Vietnamese, Tamil, Thai, Lao, Burmese or Khmer.

Some South-East Asian jurisdictions, such as Singapore, protect unregistered trade marks based on regulations regarding ‘passing off’, i.e. the misrepresenting of goods or services as being affiliated with another brand. However, this type of protection is only applied where the brand has already built up reputation and goodwill amongst local consumers.

Copyright: Software and Content Protection

For rapidly developing software applications, copyright law offers an inexpensive, quick and easy method of procuring IPR protection at key stages of development, as well as for any images or written material associated with the app such as marketing materials and product descriptions on e-commerce platforms etc.

Most types of creative works protectable by copyright in Europe are also protectable in South-East Asia and, as in Europe, are theoretically protected as soon as they are created. Software is also expressly protected by copyright in South-East Asia, including source code, object code, as well as any written documentation or imagery used. The copyright does not protect the ideas behind the program but will provide protection against any unauthorized running, copying, modifying or distribution of the software.

Due to the difficulties in proving ownership when it comes to infringement actions, it is often advisable to voluntarily register copyright in the countries where this service is available. This will be available in most of the South-East Asian countries with the exception of Singapore, Brunei and Myanmar.

Software Patents

Patent law for software in South-East Asia varies significantly, with different requirements and guidelines issued by each jurisdiction. The requirements for patentability in most areas are similar to the EU. However, as a developing area of law in this region, many patent offices rely on examination by external, more experienced, Patent Offices such as those in the United States, Japan, South Korea and from the European Patent Office. This helps to streamline any patenting procedures for EU app developers as any established apps will already be registered with one or more countries in the EU. Without these foreign patent grants the application process can be delayed for at least five years in many South-East Asian countries.

Even with corresponding EU patents in hand, and being apps developed at very fast pace, patent applications often take a lot longer to be granted than the useful lifetime of many smartphone apps, and software patenting is of limited usefulness to the average developer. Furthermore, in some jurisdictions patents for software are entirely unavailable. In Indonesia, for example, the patent law specifically excludes rules and methods of doing business, as well as rules and methods concerning computer programs, from the definition of ‘invention’.

Design Patents

In a few South-East Asian Countries (currently only in Singapore, Thailand and the Philippines), app developers can also apply for design patents for their graphic user interfaces (GUI). This means that their function keys and functional components will be protected by design patents. In Singapore, one of the requirements to qualify for registration of design is industrial applicability. In order to satisfy this requirement, GUIs must be applied to an article by any industrial process. This means that when applying for a design patent for the GUI in Singapore, the applicant also needs to indicate the article that the GUI is applied to (e.g. the smartphone). As to the designs for products with GUIs, the applicant should submit drawings or photographs that clearly depict the design for which patent protection is sought. Therefore, the drawings or photographs submitted should contain the view(s) of the overall product indicating the location of the GUI.

However, it must be noted that registering GUI as a design patent is a relatively new option in Singapore, Thailand and in the Philippines and therefore app developers may still experience some difficulties when enforcing their GUI design patent rights as the courts are not yet very familiar with how to decide whether there has been an infringement of the patent.


App Store Dispute Resolution: First Line of Defense

The first line of defense when dealing with infringing material or apps is to directly contact the app store on which the infringing products are listed. Online content dispute resolution services are offered by both Apple and Google for their app stores. Through the online forms, developers can identify infringing material, provide evidence of their IPR ownership and request infringing apps be taken down.

Other stores run similar services, however where app stores servicing the Android platform in the area do not publish in English, it is often best to engage local legal representation when requesting removal of infringing content.

Prior to the dispute resolution process it is often wise for developers to gather evidence of any infringements to their IP. This can consist of screenshots of the infringing apps’ page on the relevant app store, any relevant download numbers and if possible, screenshots of the infringing items in the app itself (most modern smartphones have a screenshot function which makes this process easier). Notarizing this evidence will also be useful if it becomes necessary to take the case further or claim compensation.

Other Remedies

As for any other industry, civil, criminal and administrative procedures for IPR actions in case of trade mark, patent or copyright infringement, will be generally available in South-East Asia. However, the judicial experience and effectiveness of enforcement may vary across the different jurisdictions. This means that app developers should keep in mind that different enforcement strategies apply for different countries and shall therefore consult with local experts to determine the best strategy for their case. Administrative enforcement is generally the fastest, cheapest and most effective way of enforcing IP rights in many South-East Asian countries. At the same time, in certain South-East Asian countries like Malaysia and Thailand, criminal actions are more effective in ending infringement because civil actions are lengthy and entail only negligible fines. Professional advice is crucial when trying to create the most cost-effective IP enforcement strategy.

Take Away Messages

  • App developers should not forget to protect their brand. Reputation and names play a big part in consumer choices and infringement of company’s trade marks can mean permanent damages for the company.
  • Copyright registration of software offers a certain way to prove IP ownership in case there are any problems of IP infringement. If an EU SME does not register its software through the relevant copyright registration system, it may be very difficult to prove ownership when enforcing the IP.
  • Patents provide longer terms of protection (20 years in most South-East Asian countries), but are expensive to procure and the short life cycle of apps often makes acquiring patents unproductive.
  • App developers should also not leave themselves open to litigation and make sure to check in advance that their materials are not already registered domestically.
  • Infringement issues can often be dealt with quickly by directly contacting app stores.
  • IPRs are territorial and protection in other jurisdictions has no effect in South-East Asia. SMEs need to register early and make sure to protect all of their core IP or someone else will.


1 iOS and Google Play combined figures

South-East Asia IPR SME Helpdesk

The South-East Asia IPR SME Helpdesk supports small and medium sized enterprises (SMEs) from European Union (EU) member states to protect and enforce their Intellectual Property Rights (IPR) in or relating to South-East Asian countries, through the provision of free information and services. The Helpdesk provides jargon-free, first-line, confidential advice on intellectual property and related issues, along with training events, materials and online resources. Individual SMEs and SME intermediaries can submit their IPR queries via email ( and gain access to a panel of experts, in order to receive free and confidential first-line advice within 3 working days.
The South-East Asia IPR SME Helpdesk is co-funded by the European Union.
To learn more about the South-East Asia IPR SME Helpdesk and any aspect of intellectual property rights in South-East Asia, please visit our online portal at


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COMPETITIVE ROMANIA – Key Macroeconomic Indicators 2007-2016

– by Florin-Ioan Rosu –

At 5.1%, Romania had the highest growth in the European Union (EU) in 2016, driven primarily by the domestic demand. Over the last 27 years, the country has made considerable progress in developing the institutions for a market economy. Joining the European Union (EU) in 2007 was a driving force for reform and modernization.

Once considered a breadbasket for Europe, agriculture plays an important role in Romania. However the sector requires further development. Romania has the highest proportion of rural population in the EU (45%), the highest incidence of rural poverty (over 70%), and one of the largest gaps in living and social standards between rural and urban areas.

Under the Europe 2020 strategy, Romania has committed to reduce the population at risk of poverty by 580,000 persons and to achieve an employment rate of 70% by 2020. By 2013, only a third of the poverty target had been achieved. One on five Romanians is income poor, and a large share of income poverty is persistent, in that three-quarters of the poor have been poor for at least three years. One-third of the population is severely deprived materially in the sense of not being able to afford items considered to be desirable or even necessary to lead an adequate life. Decreases in the poverty rate pre-2010 reversed in 2010-13, resulting in a marginal decline in poverty of less than 1% between 2008 and 2013.

Romania is ranked 53rd in most competitive nation in the world according to 2015-2016 edition of the Global Competitiveness Report published by the World Economic Forum. Competitiveness Rank in Romania averaged 68.90 from 2007 until 2016, reaching an all time peak of 78 in 2013 and a record low of 53 in 2016. Competitiveness Rank in Romania is reported by the World Economic Forum.

Romania scored 4.32 points out of 7 on the 2015-2016 Global Competitiveness Report published by the World Economic Forum. Competitiveness Index in Romania averaged 4.12 points from 2007 until 2016, reaching an all time high of 4.32 points in 2016 and a record low of 3.97 points in 2008.

The Global Competitiveness Report 2014-2015 edition which assesses 144 economies is made up of over 110 variables, of which two thirds come from the Executive Opinion Survey representing the sample of business leaders, and one third comes from publicly available sources such as the United Nations. The variables are organized into twelve pillars with the most important including: institutions, infrastructure, macroeconomic framework, health and primary education and higher education and training. The GCI score varies between 1 and 7 scale, higher average score means higher degree of competitiveness. This page provides the latest reported value for – Romania Competitiveness Index – plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news. Romania Competitiveness Index – actual data, historical chart and calendar of releases – was last updated on August of 2016.

Romania is a country of considerable economic potential: over 10 million hectares of agricultural land, diverse energy sources (coal, oil, natural gas, hydro, nuclear and wind), a substantial, if aging, manufacturing base and opportunities for expanded development in tourism on the Black Sea coast and in the mountains. The main industries in Romania are: electric machinery and equipment, textiles and footwear, light machinery and auto assembly, software, mining, timber, construction materials, metallurgy, chemicals, food processing and petroleum refining.

Romania is one of the fastest-growing information technology (IT) markets in Central and Eastern Europe. The country has made significant progress in all of the information and communications technology (ICT) subsectors, including basic telephony, mobile telephony, the Internet and IT. Romania is the leader in Europe, and sixth in the world, in terms of the number of certified IT specialists, with density rates per 1,000 inhabitants greater than in the US or Russia.

Microsoft acquired Romanian Antivirus Technology in 2003. According to Microsoft, Romania has a clear potential in information technology, an area in which Romanian students, researchers and entrepreneurs excel. Its western-oriented culture and the high educational degree of its youth bring Romania forward as a huge potential market (the second largest software producer in Eastern Europe). In terms of IT outsourcing services Romania is ranked in the third place worldwide successfully challenging India.

Romania is ranked 5th in the world in terms of internet connection speed, according to a top made by Akamai. In this ranking Singapore comes out on top (98.5Mbits/s), followed by Hong Kong (92.6Mbits/s), South Korea (79Mbits/s), Kuwait (76.5Mbits/s) and Romania (71.6Mbits/s). The UK comes 27th (51.6Mbits/s) and the US 22nd (53.3Mbits/s).

GDP growth reached 8.3% in 2006 according to the statistical office of the Romania (the year-to-year growth amounted to unexpected 9.8% in the 3rd quarter of 2006 and stayed high at 9.5% year-to-year change in the 4th quarter of 2006), and 8.0% in 2007. Table showing selected purchasing power parity GDPs and growth – 2007 to 2018 estimations:

Since Romania joined EU, its GDP have risen with 26%, from 126 billion euro to 160 billion euro. The exports have risen from 29 billion euro to 54 billion euro, taking advantage of one of the four EU’s liberties, free movement of goods. This growth of exports was generated mostly by auto parts and electronics equipment industries. In parallel, exports of services rose with 71% in 2015 compared to 2007, being 16.3 billion euro.

Foreign investments rose from 3.4 billion euro at the end of 2006 to 60 billion euro in 2014, as a result of the free movement of capital.

The medium net salary is 2.051 lei per month (475 euro) in march this year, being twice as it was in 2007, 1.042 lei (312 euro). The growth in lei of this salary was 97%, while in euro this was 46%. In 2007, Romania had 222 km of motorway and in present, there are around 700 km. However, Romania is one of the poorest countries in EU in what concerns the amount of km of motorway, although the budgets for transport were above 20 billion euro in the last 8 years.

In Romania, the public debt rose from 2007 from 76 billion lei (13% of GDP) to 315 billion lei at the end of 2015 (40% of GDP), compared to an increase from 58% to 87% of GDP in EU. In 2016, the debt entered under 40% of GDP, but the situation is very fluid.

Economic growth in Romania is among the highest in the EU and is forecast to remain above potential in 2016 and 2017. The pace of growth is forecast to accelerate to 4.2% in 2016 in response to the significant fiscal stimulus including tax cuts and increases of the minimum wage and public wages. Economic growth is estimated to moderate somewhat to 3.7% in 2017, but still to remain above potential.

Inflation has been falling in recent years. Annual average inflation has been on a downward trend since 2013 as a consequence of abundant harvests (in 2013 and 2014), falling global oil prices and consecutive reductions in VAT rates for different categories of products and services. In 2015, inflation turned negative after the cut of the VAT rate for all food items and non-alcoholic beverages from 24% to 9% from 1 June (Graph 1.3). In August 2015 inflation recorded a historical low of -1.7% (year-on-year), ending 2015 at an annual average of -0.4%.

Inflation is expected to re-enter the central bank’s target band (2.5%±1 percentage point) by 2017. Inflationary pressures are likely to grow stronger in 2016 with the surge in domestic demand and the increase of the minimum wage from May. The reduction of the standard VAT rate by 4 pps. from January 2016 still works in the opposite direction and annual average inflation is expected to remain negative (-0.2%). However, the output gap is projected to close in the second half of 2016 and the impact of the VAT cuts is set to wear out by the end of the year. Therefore, despite the additional 1 pp. VAT cut envisaged for January 2017, the annual average inflation rate is forecast to reach 2.5% in 2017.

Investment recovered from its drop in 2013 and is expected to sustain high growth rates until 2017. Investment is estimated to have increased by 6.5% in 2015. Private investment is projected to continue growing in 2016 and 2017, albeit at a slower pace than in 2015. Public investment peaked in 2015, but its growth rate is set to slow down in 2016 and 2017.
The main driver is the private sector, whereas public investment still faces serious challenges. The main areas of investment include construction, machinery and transport equipment, while technology and innovation-related investment remains limited. Investment in equipment averaged 11% of GDP in 2000-2014.

The labour market is stable and forecast to improve gradually. Unemployment remained broadly stable at 6.7% in 2015, but is expected to decrease to 6.5% in 2017. Despite employment growth, especially in high value-added sectors, structural problems persist on the labour market. At 17% of the population, the share of young people not in employment, education or training is well above the EU average of 12%.

Romania confronts itself with the migration of a big number of skilled labour in devoped countries of EU, because of a better salary and life conditions. Workers choose to go in another countries to benefit from monetary advantages and employers take Romanian people because they can save costs by paying them less, although this wage is a lot bigger than in Romania. Challenges remain in raising the average skills level of the workforce, addressing the high rate of early school leaving and strengthening the capacity of labour market institutions. Labour market and social challenges are closely related and there are big disparities between rural and urban areas. Romania faces very high risks of poverty, social exclusion, and income inequalities. All these factors weigh on the growth potential of the economy.

Recent developments point to a further decline in the share of foreign currency loans in the portfolios of banks. The share of foreign currency loans in total loans to the private sector went down from roughly 58% in June 2014 to 52.4% in June 2015.

In what concerns the future, the Romanian Government has already focused on developing the welfare of citizens and, as a result, of the country. “Competitive Romania” is a national economic project whose main aim is to converge the GDP level per capita to the one of the European developed countries. This was launched at the beginning of July 2016 and involves measures which would stimulate the economic growth from 3% to 5% as a result of a better management of factors like capital, labour, productivity.

The vision is concretized in 16 domains, such as education, health, agriculture, energy, investments, technology and creative industries, diaspora, European funds. Together with the birth rate, capital market, transport infrastructure, cadastre, research and development, debureaucratisation, public acquisition, accessibility and interconnection, these domains cover 41 priorities and 90 measures with a deadline in 2020.

The human capital is, maybe, the most important pylon for a competitive economy and, because of this, “Competitive Romania” aims to offer quality essential services for the citizens. In what concerns the education, this project aims to decrease the rate of early leaving of schools and increase the rate of youths’ integration in the labour market. The health system wants to reduce the death rate of infants and of people suffering from circulatory system diseases. There are also measures taken to encourage families to have babies by offering some advantages. Financial benefits are also provided to Romanian citizens in order to convince them to come back in Romania.

There is also a willingness to improve the transport infrastructure and to attract more and more investors. In what concerns the infrastructure, the main problems indentified are the lack of a long-term strategy, a poor preparation of projects and the lack of administrative capacity in the Ministry of Transport. In order to improve the actual situation, the Government established some priorities and measures, which include: the selection of the key projects like the nord bypass road of Bucharest, Sibiu-Pitesti route and Tg. Mures-Iasi route, as well as changes in institutions.
After some meetings with more than 100 firms with foreign capital in Romania, the main difficulties discovered in the investment sector are: hard procedures in what concerns state aids, environment authorisations and visa, limited contact with foreign investors at the end of process, weak bonds between local and foreign companies. As a result, the priorities and measures decided include simplification of procedures in different domains (easy ways to get environment authorisations, visa for non-EU citizens, to facilitate labour mobility for expatriates and needed international specialists), state aid acceleration and improvement of its criteria and a better collaboration between public authorities and investors.

This project involves 16 consultations for each domain, in order to consolidate the 90 measures, which can lead to a sustainable economic growth until 2020. The participants of these meetings are specialists in each domain, partners, organisations and other authorised institutions who can form a clear opinion of what should be implemented or not.

To compete successfully, growing the enterprises competitiveness, to innovate, to come up to the requirements of the EU Internal Market are “sine-qua-non” prerequisites which Romania has to meet if it wants to take advantage of its fully-fledged membership in an enlarged Europe.


Head of Unit, Ministry for Business Environment, Trade and Entrepreneurship, ROMANIA

Founding member of INSME Association and full member of INSME Board (2004-2015).
25 years of Professional experience in business environment and private sector of SMEs development, foreign investments promoting, industrial policy and restructuring, innovation, cooperation and international relations, European economic culture and entrepreneurial education development in Romania.
Member of many professional associations: founding member, in 1990, of the Romanian Management Society, lecturer during 1990s at The Bucharest University of Economic Studies, member of the International Management Foundation, member of The ”Carl Duisberg Romania” Association of Management Specialists. From 1997, vice-president and founder of The Agency for Sustainable Strategies. During 2000-2001, President of the Training Commission ROMPRO. During 2005-2006, personal counsellor of the Deputy Prime Minister for Coordination of Business Environment and SME fields. Starting with 2008, Permanent Representative of Romania to OCDE, ONUDI, UNCTAD, UNECE, ILO, WIPO, UEAPME, WASME. From 2010, Permanent Representative of Romania to the European Commission – DG Enterprise & Industry on “Research for relevant policies for SMEs and Entrepreneurship”.

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SMES AND THE NEW GEOGRAPHY OF BUSINESS: NO SME IS AN ISLAND. The era of Global Opportunity, Global Competition, Global Talent?

– by Juha Saukkonen –

intertwinedTo the members of INSME and readers of its publications the fact more and more known and acknowledged by public and political spheres has been clear for long: net job creation in all developed economies – and increasingly also in the emerging countries – is based on SME cohort of companies. The key word in this statement is NET. Yes, multinationals and large domestic organisations still hire – but parallel to hiring they fire, outsource, offshore even more.

Let’s look at the country where I come from: Finland with its 5,5 million population. Between years 2002 and 2013 microsized and small firms created 102.000 net jobs in them. In the same timeframe the large corporations were job destructors, the balance for them shows -16.000 jobs. As said earlier, the knowledge of this SME role in employment dynamics is spreading, and even more and more students honing their professional skills for the career in business are increasingly aware and attracted in SMEs as their future workplace. And since the youth of today is much more international and diverse than any generation up to this date, their offering to SMEs has much more of global flavor than we have seen earlier.

SMEs have been, are and will be also key players in internationalization of economies and societies they operate in. At this front, however, there is still road ahead. Or in other words – much of underused potential. How much of the total amount of exports do the SMEs account for: Eurostat (2014) points out Estonia and Denmark with their appr. 30 % share as leaders in this measurement, followed by a bunch of countries with 25 % contribution of SMEs (employing less than 50 people), Sweden, Italy, Netherlands, Austria. My home country Finland has the same figure in 10 %! Even in the countries leading the league table there are constantly projects and initiatives aimed at ranking up in the SMEs and export competition.

What could we do? I state that we have a sleeping beauty or a race horse kept in the stable in the hands-on, pragmatic cooperation between SMEs and institutions of higher education. I do not say that because it sounds good in the eyes of my own supervisors, but because I´ve “been there, done that” – In my 10 years in academia after a career in industry I count having 300+ projects of this kind on my belt, and hope more to come. Sometimes failing, sometimes succeeding – and continuously aiming at developing that action further.

Due to the nature of a blog-writing, I do not add any references and research citations in here, but I would like to summarize briefly the drivers that seem to point towards more and better interaction between SMEs and educational institutions – meaning both students and faculty members in them:


  • Need to adapt to technologically more and more demanding – and enabling – environment. Both in what comes to their own products and services as well as in their processes making those products and services;
  • To master those technologies and obtain them at the right time, place and cost they need to network with others. Increasingly the most relevant partners are not the ones nearest to you – it is a global ballgame;
  • The better you become, more opportunities there are on the global market, and your international customer might be just a few mouse-clicks away;
  • If and when you have a global opportunity, so does the competition, if you are not prepared to knock the away-from-home doors, someone from out there will knock the doors of your “home customers”.


  • Do not even think the way we older generations do. They are cultural and digital savvies, for them the question of home market – or just home – is irrelevant, they tend to think globally in all aspects of life, business included;
  • Want to make meaningful things – do things were the impact can be seen – SMEs are more likely to offer that then a role as a small part in a big corporate machine;
  • Want to meet and learn from and for true entrepreneurship – that can not be done by reading about the subject – live experience is what counts.


  • Are required to show their worth and impact: how are you improving life and society around you?
  • Are willing to keep up-to-date with latest advancements – and agile SMEs are always in the front-line showing where the world is going to.

These points are more just examples of our hopefully joint motivation to collaborate rather than the whole story. It would be equally easy to make a list of challenges and showstoppers to the interaction promoted. But just like more generally in life, it is always easy to slip to be running that problem-track. As somebody wisely said “A problem can only be a true problem if there is a solution. If not, then it is a law of nature and you should not spend time on it”. The point is: there always is a solution-track running next to the problem-track. We should run that track!

Members of INSME as well as Universities and SMEs have a lot of good practices to present and share, as well as ideas to develop these issues further. I challenge all readers to share a) everything that we already know that works in making our SMEs more international and prosperous via involvement of academia and global talent in them b) to give ideas for a blueprint of a collaboration that you have not yet seen but feel is needed.

The poet John Donne said close to 400 (!) years ago that “No man is an island”. Today we can extend that statement to companies. Even if there were islands, we would be a part of an archipelago of international business. And the other islands always have something we do not have. And vice versa. Let´s embrace this new order head up – and hands on!

juha-saukkonenJuha Saukkonen | Senior Lecturer of JAMK University of Applied Sciences, International Business

As a faculty-member in his School of Business, Juha is involved yearly in 50+ Education-Enterprise projects and 2-3 larger R&D projects, where SMEs and organization supporting SMEs are involved. He is a member of the Finnish Network Academy in Futures Studies and publishes regularly on the topics of Entrepreneurship, Project-based learning and Foresight. On top of research and teaching duties, he is a certified coach for tech- and knowledge-based start-ups for Supercoach Entrepreneurial Training ® (SET) methodology.

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Innovation as the key component of the winning strategy for SME growing

– by Rubén Darío Cruz –

SMEs have been recognized as critical in the economic and social development of most countries. They are especially important for their role in job creation with low investment, regional development, as suppliers to large companies, entrepreneurship development, and, in case of new technology-based firms, innovation of new products and processes. SMEs have also become major players in the international technology market. Many SMEs are now the home of innovation and have become the new builders on the job market. SMEs all over the world, in developed and developing economies alike, are confronted with the same forces leading to the overwhelming need for change. These forces have led to the failure of some and have left others struggling to survive.

The leaders of SMEs must cope with the impact of globalization and its consequences of open economies, highly competitive market place, and the transnational flows of expertise, technologies and services. The realization that change is essential and that it must happen immediately, is not sufficient. SMEs must know what to change and how to change. There are so many factors involved in the successful management of an SMEs that it becomes difficult to know which aspects need to be changed, and which aspects need to be left as they are. While the challenges vary from one SME to another, following the analysis of the Business Development Bank of Canada1, you can summarize the winning strategy for SME growing (revenue, profits, jobs) in next points:

1. Clients. SMEs must be client-focused, client-centric businesses; the activities they conduct must be addressing client’s need. An SME must serve its clients well and, if required, it must revamp product and service offerings according to clients’ needs and expectations. This allows SMEs to increase their sales to existing clients and attract new ones. This strategy is unanimously supported, regardless of the business’ degree of growth (strong or sustained), location or size. Every identifiable functional aspect of the SMEs’ management system must be structured in such a way that it enhances the capability of the SME to meet the needs of its clients.
2. People. Leaders of growing SMEs also pay special attention to managing their human resources, that is, building a talent pool.
3. Investment. In many cases, growth is contingent on the resources invested in the business: investment is the expense that pays dividends.
4. Innovation. Innovation is the top strategy for fostering the growth of SMEs. Innovation is the ability of the SME to design and develop products (goods or services) and processes to maintain a competitive edge and move toward even higher value-added activities. In fact, innovating is hand in hand with the ability to understand clients’ needs and adapt offerings accordingly. Just like understanding and satisfying clients’ needs, innovation is one of the most important strategies, regardless of the SME level of growth, size or location.

An innovative SME is the one able to focus its actions considering its strategy, able to learn from mistakes, from competitors, from suppliers and specially from clients; an organization focused on systematically doing (than talking) and, because of that, it obtains results reliably and repeatedly over time. These results are competitive advantages and greater added value from products (goods/services) and processes, leveraging knowledge and technology to obtain those results. Quoting Larry Keeley from Doblin, “The most innovative organizations rely on systems of individual and teams working across functions in their organizations. Innovation isn’t the work of only scientists, engineers or marketers; it’s the work of an entire business and its leadership”. Innovation must not depend on luck or the talent of any single employee, instead, it must rely on an orchestrated set of systemic organizational capabilities (strategy, R&D, technology readiness, marketing, resources management) maintained and improved through an Innovation Management System (processes, organization, resources & competencies, metrics and incentives).

There are some tips to innovate:

  • Get ideas and feedback from suppliers, clients and other stakeholders. Innovation is a team sport. In fact, an organization that depends on itself is destined to fail. As stated in the book “Ten Types of Innovation: The Discipline of Building Breakthroughs”2, in today’s hyper-connected world, no company can or should do everything alone. Collaboration provides a way for firms to take advantage of other companies’ processes, technologies, offerings, channels, and brands, pretty much any and every component of a business. Collaboration allows a firm to capitalize on its own strengths while harnessing the capabilities and assets of others, signifying external relationships, partnerships, consortia and affiliations. Collaboration also helps executives to share risk in developing new offers and ventures. These collaborations can be brief or enduring, and they can be formed between close allies or even staunch competitors.
  • Organize innovation as any other business process involving the whole SME staff. They have intimate knowledge of the business and industry, and are often the best source of ideas. Paraphrasing again Larry Keeley, when a firm organize innovation, as any other business process, its people start to act and think differently over time, and when they see different and better results emerge from these behavioral shifts, culture, innovative thinking and creativity take care of their selves. The problem with trying to change the culture, to stimulate innovative thinking and to unleash the creative potential of the people of an organization is that it is a bit like trying to hug a cloud, you can see and feel it, but it is hard to get a grip on it. To shift the behaviors of an organization, it is required to define and drive the change from multiple angles. It is not enough just to festoon walls with pretty posters, run corporate innovation fairs to enhance creativity, perform brainstorming sessions, proudly display the company ping pong tables with toys, sticky notes, color markers, Nerf balls and guns, besides sport a gleaming new innovation center. It is very rare indeed for actual innovations to make it to market following all of that hoopla. Is is alto not enough just to hire more innovative, risk-taker or creative individuals because without a clear approach to guide and coordinate their efforts, the right place in the organization to house them, and the appropriate metrics and incentives to guide them, they will fail.
  • With the help of the SME staff, develop an innovation strategy to improve products and services, processes, marketing strategy, business model, and supply chain. Remember to keep it up to date.
  • Don’t look for a magic formula. Instead, try to make gradual improvements. They may be as simple as changing one process, adapting a product for a new market or exploring new ways to reach clients.
  • If applicable, consider patenting the innovations and protecting the intellectual property.

The planning and deployment of a winning strategy considering the four points above requires special care of the next two issues: Information and Change Management.

Information. Specially in developing countries, a vast majority of SMEs have no systematic method for collecting, storing and utilizing basic data that measure performance, e.g. revenue, costs, production, etc., that is, they do not have a Financial Management Information System (FMIS). A FMIS can be broadly defined as a set of automation solutions that enables an SME to plan, execute, and monitor the budget by assisting the prioritization, execution, and reporting of expenditures, as well as the custodianship and reporting of revenues (World Bank, 2011). A FMIS allows to identify problem areas more quickly and to correct them before they became serious. A reliable FMIS is a prerequisite for the deployment of a winning strategy for SME growing.

Change Management. Change is always a painful but necessary tool for management improvement in an SME seeking to improve its performance: a project can be designed to diagnose an SME’s need for new practices and implementation plan for transformation. The SME transformation process is a continuous and iterative process, although, for purposes of explanation can be divided into three phases, namely, diagnosis, planning, and implementation. In most cases the process is facilitated and directed by an external consultant but some SMEs try to manage the process with internal teams. It must, however, be remembered that whether internal or external consultants are used, the ultimate success or any transformation process will depend on the commitment from the organization’s leadership at all levels of staff.

1. BDC Study, “SMEs and growth: challenges and winning strategies”, October 2015.
2. Keeley, L., Walters, H., Pikkel, R., Quinn, B., “TenTypes of Innovation: The Discipline of Building Breakthroughs”, John Wiley&Sons, Abril 2013, p. 276

Rubén Darío Cruz

Ruben D. Cruz obtained the BSc. degree in Electrical Engineering and the MSc. degree in Electrical Power from the Industrial University of Santander – UIS (Bucaramanga, Colombia), and the Ph. D. degree in Electrical Engineering at the Bolivarian Pontifical University – UPB (Medellín, Colombia) sponsored by Electrical Interconnection – ISA. During a semester of his doctoral studies he was a Visiting Fellow at the Department of Electrical and Computer Engineering of the University of Texas at Austin (USA).
In addition to his participation in the Development and Network Optimization Team of the major transmission company of Colombia (ISA), his career includes the Colombian Petroleum Company (Ecopetrol) and eight year as full professor at the Industrial University of Santander (UIS) where he also was the director of the School of Electrical Engineering (E3T) during six years. Since 2012 he is with the Center for Research and Technological Development of the Power Industry (CIDET) as Chief Innovation Officer (CINO).
During his 20 years of professional, research and teaching experience he has focused his interests on planning, management, operation, monitoring and regulation of energy markets, the implementation of best practices management models and developing models for technological scouting and innovation management for the power industry. He has authored and co–authored several technical papers in all those areas.

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Where Does Innovation Belong?

– by Richard Dealtry –

dandelionI am very interested in questions about innovation.

Where does it belong in any company? Who is the head of innovation? Are they at Director-level or does responsibility reside with someone in Accounts, or Production, or HR, or Logistics, or Marketing? Have you ever come across a Head of Innovation?

You may say that innovation does not have a champion but is a shared responsibility. So my next question is

What is being shared in this group of people?

There are literally hundreds of possible innovations in every company. And they are so diverse as not to suit the responsibilities of any one person or group of people.

So possibly we can conclude that innovation is something that does not belong in any particular place; it is a variable subject or issue and belongs to no-one! It also varies in size and importance. Someone or some people have to decide how to prioritise the large number of innovations, identifying which comes first, second, third and so on. Also they have to decide when and where it is, or they, are resourced and implemented.

This sounds like quite a major undertaking. The key is knowing who to give the responsibility to and how to make it work for everyone.

Every company is different, but it is clear that there needs to be a group, that does not decide what innovations are needed, but that can collect, process, authorise and fund good innovative ideas in the company; everything from the simplest of changes in working practices to the most tricky technological or scientific developments. If this decision making is wrong, you either have a disaster or nothing at all.

So what do we mean by innovation?  

In practice, innovation has several different meanings depending upon where you are coming from and where you are trying to get to. But what does the dictionary say? To innovate means to introduce new methods, ideas or products.

This definition itself provides a wide range of change processes, depending upon your starting point. There is simple innovation, moving through a range of changes to very complex and diverse innovation. Each stage has a degree of change and may involve just one or two people through to literally hundreds of people with different skills.

One of the unusual features of innovation is that you do not always know that you are being innovative, maybe not even until sometime after the event. And then, the person at the centre of the change may be called the innovator. It may not be the person who initiated the change process, but someone outside and disconnected with that change process.

So what term is used to describe the achievements of more able innovatory people? What sort of psychometric profile do these people have?

If we look at these psychometric profiles we can detect which people fit this innovative role. In simple terms we have reflectors, theorists, pragmatists and activists, the four main personality lead types. We know that the creative role or activist has the highest level of the innovator attributes. And those creative activists are generally a rare breed. When these aspects of personality are highly present, they are often not supported by the people who are strong in opposing or related skills; pragmatists, reflectors or theorists. This is an illustration that people within the process may or may not be best suited to participate in an innovation process.

People’s learning styles have a tremendous influence upon the innovative process and we need to understand them to manage the process effectively and efficiently.

So, the first challenge is there for you to see in your team members. It is useful to know the strengths and weaknesses of your team profiles when forming your new learning innovative management groups. You cannot always pick and choose the right combination of learning styles to be successful; you have to work with what you have. However, you can identify the immediate obstacles to success in managing innovation and focus on engendering process behaviours as well as outcomes.

It is true to say that there are good and bad innovations, so be careful and maximise the good development opportunities that provide the incentive for everyone to work hard at establishing the best way forward. Achieving a good innovation transformation is a classic self and group development that involves many disciplines. Project management, security of information, data sharing and confidentiality all combine together with that vital ingredient of innovatory thinking. Peer-to-peer learning can strengthen a multi-generational workforce in the search for new process solutions. Age of participants is just a number.

For innovation projects, it is important to strengthen collaboration in the context of “are you ready for this way of working”, as this is a real time research and development process where nothing is clear at the outset. Too many companies start this process with no formal policy on the type of reward for achievements that are above and beyond the scope of existing job specifications.

If you want good innovations and you have a good idea of what you are looking for, you must have a strategic imperative to drive, plan and process the route map for achieving it. And then get people with the right capabilities involved; those who want to be involved!

Richard Dealtry

richarddealtry-2Executive Chairman, G-ACUA – the Global Association of Corporate Universities and Academies

Richard has extensive international executive experience in significant organisational development initiatives and renewal. His pioneering works include real-time learning and actionable processes that significantly leverage performance standards and organisation capability. He is dedicated to helping organisations design and manage competitive strategic management platforms for change and development through inspirational and dynamic new learning management solutions.

Richard founded G-ACUA in 2007 and continues to lead the G-ACUA network and its strategic development. G-ACUA works in many countries, offering an extensive portfolio of programmes, resources and services to its members. There is an increasing demand for knowledge about best practices in this competitive and challenging global business environment and G-ACUA carries-out continuing intelligence research into developments in the field of time sensitive development and best practice in response to the urgent needs of its membership.


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Entrepreneurial culture and start-ups: a new culture encouraging entrepreneurship could trigger more innovative start-ups

– by Klaus-Heiner Röhl –

lily-pads-691919_1280Start-ups and innovative entrepreneurs are drivers of economic growth in regions and nations. But European regions show a rather low number of successful high growth start-ups compared to the United States. Innovative start-ups in Europe are scarce, even though there are encouraging start-up clusters in a few leading cities such as London or Berlin. But really innovative start-ups with disruptive technologies that become global companies like Google or Amazon are not being founded on the continent. And beyond a few prospering clusters, many regions in Europe are experiencing unsatisfactory growth rates and high unemployment. Founding companies with new creative ideas could reduce this problem, but in most regions little has happened in this way. Even in Germany, which has a strong base of growing SMEs, the number of companies being founded has been falling lately and innovative start-ups are rare.

Start-ups have a cultural dimension
There are strong indicators that Europe’s weakness in entrepreneurship may have a cultural dimension, too. International studies show that regions which contain many innovative start-ups also have a specific entrepreneurial spirit. Leading start-up regions like the Silicon Valley or Tel Aviv seem to profit from a particular entrepreneurial culture. This culture comprises aspects like the personality structure of successful entrepreneurs as well as regional phenomena, e.g. an innovative milieu with functioning networks promoting innovation and entrepreneurship while also binding individuals to the region. With respect to the personality structure of entrepreneurs, a desire for autonomy, risk tolerance and trust seem to be important factors. Positive feedback and successful role models strengthen regional entrepreneurial activity after an initial trigger like a university-related technology park has led to a first cluster of high-tech start-ups.

European deficits in entrepreneurial culture
In Europe, traditions and informal norms as well as institutional arrangements tend to favour dependent employment over self-employment and start-ups, which reduces flexibility and innovation in a time of crisis. Furthermore, a “can do” attitude is lacking. Individual risk aversion is high and the failure of start-ups is seen as a confirmation to this mind-set. In contrast, start-up hotspots in the United States or in Israel possess a “culture of second chances”, where once-failed entrepreneurs can quite easily attract financing for a new business idea. In Europe, however, not much attention is paid to the experience the entrepreneur has gained in founding their first company; instead, a stigmatisation effect closes the door to financing a new start-up.

Recommendations for strengthening entrepreneurship
In order to foster entrepreneurship in the high-tech sector and the digital economy in general, we need to encourage a culture of failure and support a greater openness to new ideas. Specific recommendations to this aim are:

Strengthen entrepreneurial culture in schools
Cultural change should begin at an early point in life – that is, already at school. Strengthening the entrepreneurial spirit as early as possible in the education system could generate significant multiplier effects through role models and peer-group influences. International initiatives such as the JUNIOR student company programme should be expanded in order to familiarise students with the idea of self-employment and entrepreneurship early on.

Encourage unemployed persons to found companies
The provision of start-up grants is a successful measure against long-term unemployment. However, in Germany, support for unemployed people looking to found a company has been cut back in recent years, as unemployment receded. But with high immigration, there seems to be a growing potential for entrepreneurship among people seeking employment again. In Europe, particularly countries with high unemployment could benefit from unemployed persons founding companies.

Use massive open online courses (MOOC) to teach entrepreneurship
Online entrepreneurship courses are a very effective way to teach entrepreneurship particularly to those who have already entered the labour market or are at a later stage of the education system. This applies especially to the mostly young refugees that have entered Europe during the last years, and who oftentimes come from a culture that is characterised by high numbers of self-employed people. With the German Federal Employment Agency’s online programme “Ready for Study” and the recently founded Kiron University, a platform that allows refugees to start online courses at renowned universities, a start has been made.

Encourage connections between the emerging start-up scene and existing SMEs
Innovative companies in the digital sector and small or medium-sized companies in manufacturing industry should be encouraged to co-operate in order to realize bilateral advantages. Networking and bundling of activities would be beneficial to both parties. Ideas generated by innovative start-ups could be transferred into internet-of-things applications engineered by SMEs. The different mind-sets and organizational structures of start-ups and SMEs could trigger valuable synergy effects.

This contribution is based on the IW Policy Paper “Entrepreneurial culture and start-ups – Could a cultural shift in favour of entrepreneurship lead to more innovative start-ups?”


Dr. Klaus-Heiner Röhl is Senior Economist at Institut der deutschen Wirtschaft Köln – Cologne Institute for Economic Research, Germany.

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