Local Economic and Employment Development (LEED Programme)
Action Space for Strengthening entrepreneurship - Technology-Based SME Policies
Identify technology niches in Croatian universities
If the federal government is to effectively support the growth of technology-based entrepreneurship, it should determine where such policies and programs will have the greatest chances for success and focus existing resources on them. Currently it appears that the federal government’s technology policies and programs have focused on developing broadly scattered technology or entrepreneurship zones and programmes that are not focused on particular geographical locations or existing strengths of universities and technologies.
If this were done, the government could then target scarce mentoring and financial resources on those areas of technology and entrepreneurship that are strongest in both university labs and within private industry, e.g., pharmaceuticals, ship building technologies, IT and CIT, alternative energy systems, and advanced materials to name a few. Federal programs could then be concentrated in those areas of the country where there are major research universities with strength in some of these technologies as well as applied engineering curricula, multi-disciplinary research programs and a trained technology workforce. In technology-based economic development it is many times more important to concentrate on a few well selected options.
Regional technology programme and unique central agency/ministry
Most current federal technology and entrepreneurship programs currently suffer from lack of resources and apparent diffusion across a number of ministries, each with layers of time- consuming bureaucracies. As a result, many people feel that these programs and policies need to be simplified and integrated into a single business support system – one managed by a single government agency. In addition, these programs need to be made readily accessible to entrepreneurs and other clients at a regional level and need to be implemented by experienced entrepreneurs and businesspeople.
By placing all federal technology and entrepreneurship management under one agency, clients could be more easily tracked and helped through an integrated business development support system that could include “proof of concept,” strategic business planning, mentoring and financing. In addition, the success or failure of such an integrated strategy could be more easily measured and modified to account for changes in business development strategies and resource needs. and availability.
National science and technology growth strategy
Scientific discoveries need an adequate protection. Without some means of granting ownership of technology innovations to entrepreneurs and university researchers who develop new technology-based products, there will be little interest in pursuing technology commercialisation. It is suggested that the protection would be created at the highest levels of government and would be a crucial part of a national science and technology policy.
That strategy should also include a clear statement from the central government that encourages the commercialisation of technologies by state-sponsored universities, in addition to their other two missions of research and teaching. Universities, for instance, are rapidly becoming a major economic development force in the United States as state governments look to them as a source of “new economy” businesses.
The potential for some SMEs to modernise and internationalise through providing an outsourcing service to international companies should be highlighte. Outsourcing provides an opportunity to work very closely with an overseas customer, improving the quality of local products and services, gaining an entry point into export markets and developing local management and technical skills, while benefiting from a steady revenue stream. There are potential disadvantages of course, in terms of dependence on one or two large customers and over-specialisation on those customers’ technical requirements. But on balance, the approach offers a “fast track” to product innovation and exporting.
It is recommend that the potential of an outsourcing initiative be examined in more detail through a feasibility assessment. The market opportunity should be measured, specific potential customers identified, technical requirements determined and local capacity measured. Any barriers to market entry would be identified, and support provided to address these. The feasibility work could be undertaken under the auspices of the agnecy for SME in collaboration with relevant local enterprise agencies in areas where the sectoral potential is highest. There may also be a role for the Chamber of Commerce in supporting the initiative through export promotion and trade exhibitions.
Banking reform, financing laws and seed capital creation
The current business financing policies of the federal government are difficult to implement because current legislation does not allow banks or investors to quickly recapture their investment if a company fails. Appropriate legislation will be required to encourage equity investments in start-up technology companies.
Seed capital is the life-blood of entrepreneurs and technology-based company growth. The federal government should consider enacting tax credits or some other form of incentive to encourage the formation of early-stage seed capital funds. Both the central government as well as regional development agencies should look to the EU for help in developing such funds. Seed and venture capital programmes are being studied in other Eastern and Central European countries that have recently joined the European Union. Though the temptation is great to recommend that the federal government create a national seed and venture capital fund, it has been the experience in the United States that incentivising the private sector to create such funds is a much preferred option.
International Learning Models