1. www.arcfund.net Experience and Lessons of Utilizing National and EU Funds for Innovation in Bulgaria Enhancing Bulgaria’s Competitiveness through Innovation TA Ruslan Stefanov Coordinator Innovation.bg Group

2. www.arcfund.net Outline  Strategic underpinning  Available instruments  Performance assessment: strengths vs. weaknesses  National Science Fund (NSF)  National Innovation Fund (NIF)  OP Competitiveness (OPC)  Conclusions and recommendations

3. www.arcfund.net Strategic framework  European dimension: Europe 2020 => draft national goal R&D expenditures = 1.4 ~ 2% of GDP  Draft National R&D Strategy and National Innovation Strategy => targets not met + update needed for 2020  Legal framework: Law on Encouragement of Scientific Research […] => outdated and patchy  Financial underpinning => annual national planning vs. 7 year EU / roughly EU – BG sources parity

4. www.arcfund.net Position of the National Science Fund and National Innovation Fund Along the Science to Market Axis

5. www.arcfund.net Annual Financial Weight of National Instruments in Million € NIF (9) OPC (37) NSF (50)

6. www.arcfund.net StrengthsWeaknesses Established institution with a solid history and strong support base. One time international evaluation of activities. No mid and long-term budget planning. Multiple priorities. No regular evaluation of programatic impact. Active leverage of European Framework Programs for Research - introduction of specialized mechanisms to support scientists in their preparation and implementation of such projects Reviewers prepare stereotyped and unspecific project reviews, which do not provide clear argumentation and assessment of the qualities of the project and do not help the avoidance of weaknesses. Support for strengthening universities as research centers, as ‘binding’ organizations of the main elements of the “knowledge triangle” – education, research and innovation The criteria for objectivity and avoidance of conflict of interests are not properly observed (members of the commissions to the NSF are involved in the implementation of some projects) NSF: Top Three Strengths and Weaknesses

7. www.arcfund.net NIF: Top Three Strengths and Weaknesses StrengthsWeaknesses 381 projects from different sectors of the economy, both high-tech and traditional, have been financed for the first time through a national public instrument. The fund is not institutionalized but represents a funding scheme, which creates unceratinty. Lack of procedure for determining the priorities of the Fund as well as one for reporting these priorities during project evaluation. The Fund developed the capacity of the Bulgarian enterprises to write and implement projects. The management of NIF’s financial resources is on annual basis, while some contracts have 3- year duration. The legal framework for the management and operation of the Fund has been created and NIF has been certified by the relevant national and European bodies. After 2008, NIF has been operating only in respect to the contracts which have been signed in previous years.

8. www.arcfund.net Innovation not a priority in 2007 - 2013 % of total amount allocated for both Convergence and Competitiveness objectives, compared to the total Community allocations in all themes Source: Strategic Report of Republic of Bulgaria for 2009, Annex 3 Financial Progress by Priority Themes

9. www.arcfund.net Low Absorption: Identified Problems and Implemented Measures

10. www.arcfund.net Capacity of absorption of EU funds  State administration and managing authorities: Complicated and prolonged the rules and procedures Gradually build up their capacity and information systems Currently trying to improve the procedures  Beneficiaries: Capacity of beneficiaries varies. Lesser experience of Bulgarian firms; not eligible under the pre- accession instruments.  Consultants: Developed consultancy market (Bulgarian and foreign firms) Different levels of professional expertise. Some problems with quality. Capacity to absorb EU funds

11. www.arcfund.net Conclusions & Recommendations  Most serious issue: lack of strategic coordination and policy underpinning  Problems with absorption similar to all national instruments, incl. operational programs  No stable national R&D financial framework  Performance can be improved by leveraging national instruments and EU framework programs