1. National innovation system-Montenegro Innovation dialogue, Becici 2010
Prof. dr Mira Vukcevic

2. The main characteristics of the research and innovation system
Size of the research system in relation to the economy
Fig.1: Personnel (public/private RTD)
Calendar
year 1)
Number of researchers working full time
Number of researcher s working part-time2)
External associates – researcher s
PhD holders
MA holders
Specialization
Higher education
TOTAL:
2000
332
211 30 69
642
150 91
2001
327
214 33 52
626 63
133
2002
330
197 16 62
605
161
177
2003
316
186 7 93
602
175
201
2004
324
199 67
597 98
354
2005
345
216 10
633
162
314
2006
356
185 20 41
136
267
2007
382
215 17 57
671
151
302
2008
415
255 76
766
117
480
Source: MONSTAT (Statistics Office of Montenego) . The research of the MONSTAT includes mostly higher education institutions. The participation of research and developmment units is inconsequential.
Fig.2: Number of graduates by sectors which correspond to the number of researchers by sectors
Year
Graduates
Mathematics and Natural Sciences
Technical and Technological Sciences
Humanities and Social Sciences
Medical sciences
TOTAL:
2000
151
173
529 26
879
2001
169
196
641 19
1 025
2002
331
189
733 21
1 274
2003
250
171
817 33
1 271
2004
199
279
951 27
1 456
2005
246
254
1 070 86
1 656
2006
412
302
1 080 73
1 867
2007
221
202
1 868 98
2 389
Source: MONSTAT (Statistics Office of Montenegro); these data include information on graduate students from high schools and academies.

3. The main characteristics of the research and innovation system
Fig. 3 Gross domestic expenditure on RTD – ratio to gross domestic product (GDP)
 YEAR
2002
2003
2004
2005
2006
2007
200 8
Gross domestic expenditure on RTD
1.80
1.24
2.98
2.94
0.87
3.77
n/a
GDP
GDP %
0.13%
0.08%
0.18%
0.16%
0.04%
The data are expressed in EUR million.
Source: MONSTAT (Statistical Office of Montenegro – Yearbook).
Note: These data do not comprise the expenditures of companies (business sector).
Fig. 4 Gross government expenditure on RTD – ratio to GDP
year
2002
2003
2004
2005
2006
2007
200 8
Gross Government Expenditure on RTD
0,59
0,57
0,56
1,19
1,11
1,48
2,38
GDP % % % % % % %
n/a
The data are expressed in EUR million.
Source: Ministry of Education and Science, University of Montenegro, Montenegrin Academy of Sciences and Arts, Office for International Scientific, Educational, Cultural and Technical Cooperation.

4. The main characteristics of the research and innovation system
Fig. 5 Overview of the allocation of funds of the Ministry of Education and Science for the period
Year
Total €
Science and Research (SR) projects (equipment included)
SR training/human development
International cooperation
2005
0.72
47.00%
46.40%
6.60%
2006
0.6
57.16%
27.67%
15.17%
2007
0.88
57.78%
22.00%
20.22%
2008
1.67
69.14%
17.25%
13.61%
The data are expressed in EUR million.
Source: Ministry of Education and Science of Montenegro.
Fig. 6
Fig. 7
Year
Gross business enterprise expenditure
n/a
Year
Gross foreign investments in RTD
n/a
Graph: Proposal of increase of investment in SRA (Scientific and Research Activities) by 2013
0.03
0.01
0.3
0.1
0.6
0.2
0.8
0.9
0.4 1
1.2
1.4
2006
2009
2010
2011
2012
2013
GDP %
State’s investment
Investment of industry

5. The main structure and governance of the national innovation system
Government
Ministry of economy
MOES
SMEDA
UoM
RSC
Technological parks
Spin-offs
Incubators
Sstart-ups
TTO

6. Education-research system-overview
(Education)-Research performers:
3 universities: UoM (19 faculties and 3 research institutes); University Mediterranean (6 faculties) and University `Donja Gorica` (5 faculties)
Independent private faculties (6-7)
4 non-university laboratories, involved in scientific projects; still not licensed; mainly monitoring activities
Private foundations and research centres of public industry: NONE
Former industrial development centres
Research funders:
MoES: project financing: applied research (up to 70%), fundamental/basic (up to 100%)

7. Enterprise and industrial system
State-of-the-art:
Big companies: Aluminium plant, Steel factory, Electrical supply, T-com, communications
SMEs: share and role negligible
Key governmental players in innovation policy:
Ministry of Economic Development
Ministry of Education and Science
SMEDA (Directorate for Development of SMEs)
Policies, legislation and strategies:
Laws (business organisations, insolvencies, fiduciary transfer of PR, VAT, accounting, foreign trade, customs, free zone, competition protection)
Strategy for development of SMEs
Introduction of statistical Business register
Specific programmes and instruments:
Development funds (state support to enterpreneurship)
Diaspora fund
Credit lines for enterpreneurship in rural areas
Credit lines for energy efficiency
International donors: EU (IPA and EBRD), USAID…

8. Intermediaries and science-industry cooperation
No TT agencies
At the level of academia: R&D Service centres, core of future TTOs
Meat processing: only sector where activities in the direction of development of a cluster programme have been carried out
No technology/innovation centres operating in the country
No technology and science parks
First business incubator (2007), under the Development fund (Business Start-Up Centre in Bar; Business Incubator in Podgorica)
No international activities
4 regional business centres
7 local sub-centres
1 European Information and Innovation Centre (EIICM) – SMEDA, Chamber of Economy, Faculty of Mechanical Engineering and Business Start-Up Center
Other related organisations:
MIPA: Montenegrin Investment Promotion Agency
CEED: Center for Enterpreneurship and Economic Development
MBA: Montenegro Business Alliance
Montenegrin Employers` Fund

9. Government policy making and coordination of innovation
No national action plan on investment in research
Strategy for scientific research activities (SRA) ( ) - the Action plan within, sets up the aim of increasing the investment in scientific and research activities up to 1,4% of GDP in 2013.
Calls for proposals (Law on Scientific-Research Activities) – industry can apply
Compulsory co-financing of applied research
No measures to facilitate venture capital
Financial incentives for RTD investment by the state: remissions of VAT and import duties on research equipment. Tax and customs duties are laid down in laws on: scientific-research activity, Value Added Tax, customs and Instruction of the Ministry of finance on the manner of carrying out the rights on remission of VAT

10. Infrastructure related to enterpreneurship and innovation
There are around active companies in Montenegro. The official records of sales of internet business packages is around this implies that more than 50% of them use internet. Here, it should also be added that many of them use `regular` home packages.

11. Involvement of the country in regional research, innovation and business development initiatives
FP6 and 7 SEE-ERA.NET, SEE-ERA.NET+, WBC-INCO.NET and ENHANCED; EVOLUNIMONT – evaluation of research capacities; IDEALIST2011; SEERA-EI ; WINS ICT
NATO SPS
CIP – EIP
TEMPUS programme with the complementary subject “Education-research-innovation, triangle” (RTD Service Center at the UoM established within one initiative)
COST – initiatives to join the ongoing actions have emerged
IPA (participation in the EVAL INNO - Fostering Evaluation Competencies in Research, Technology and Innovation in the SEE Region; proposal still under evaluation)

12. Main structural deficiencies of research and innovation system
Lack of interdisciplinarity in research
Lack of infrastructure
Lack of incentives
Lack of information on possible funding initiatives
Concerning public support, there are several needs that can be considered as deficiencies:
Governance structures in terms of national committees or councils that coordinate innovation policies, involvement of public agencies and policy makers in innovative policy design, key strategy documents or relevant laws,
Monitoring system in terms of institutions that monitor innovation activities, indicators used to monitor innovation,
Business to business and University to business linkages, in terms of mechanisms to support networking, mechanism to support cooperation between the interdisciplinary research groups and business
Infrastructure and support services favoring the emergence of new clusters, in terms of business and technology incubators, science parks,
Government source for financial support in terms of publicly funded schemes to support technological innovation like credits, vouchers, organizational design or marketing
Access to finance, in terms of policies or agencies aimed at fostering seed financing, start-up financing
Incentive frameworks for innovation in terms of policies for providing the right incentives, policies aimed at lowering the risks for entrepreneurial ventures

13. Main challenges for governance of innovation
Government of Montenegro should:
…accelerate transition of researchers from academic sphere to enterprises through a greater emphasis on the mobility aspects of the best young researchers.
…also introduce tax incentives for projects which involve knowledge transfer from universities to enterprises in order to encourage innovation in SMEs.
…encourage establishment of the Science and Technology Parks with activities to promote networking between their tenants.
Industry:
Industrial clusters should be encouraged to move to internationalization so that they develop an outward exporting orientation and link up with international systems of innovation.
Universities should:
…boost their incubation centers to provide more support to researchers to commercialize their application oriented research results though the creation of new spin-off enterprises.
…establish Technology Transfer Centers to handle property rights issues and the licensing of inventions and innovations created in university laboratories and to encourage patenting and licensing of technologies to enterprises.
…focus on applied research activities. A record of collaboration with enterprises and participation in joint research projects should be included in academic staff promotion criteria.

14. Main challenges for governance of innovation
To improve innovative capacity in Montenegro in particular, more resources for science and R&D will not be enough. The focus needs to shift to:
The microeconomic capacity of WB region;
Quality and specialization of factor conditions;
Sophistication of demand;
Quality of enterprise strategies and entrepreneurship;
Presence and depth of clusters.
These are the qualities of the business environment that enable the transformation of scientific knowledge into new products, services and competitive firms.
Universities in Montenegro should be important elements of their local systems of innovation:
Driver of regional technology-based development and the source of a major proportion of local innovations and local companies;
A good contributor to local knowledge and to the development of local technology clusters;
A major source of knowledge in emerging and established clusters.

15. Open questions, recommendations