Local/Regional Economic Development in South ... - Value Chains

108
5.8 Yesterday Electrification, Today Information Technology –
University Business Incubator Timisoara (UBIT) in Romania
Daniel Cosnita
Approach
In 1884, Timisoara was the first European city with electric
street lamps; today, this city of 360,000 people in western
Romania wants to make a name for itself as a leading
European region in the area of information technology
(IT).
The most important local and regional actors (city and
district administrations, regional development agency, district
development agency, the Polytechnical University)
have joined together and developed a coherent development
strategy. The first results are clearly visible: Timisoara
is the region of Romania with the most foreign direct
investment. Alcatel, Continental, Siemens, Solectron, and
ABB – to name just the most well known – have set up
operations in Timisoara.
Economic development based only on contributions from
outside is not sustainable, given that the key comparative
advantage of Timisoara – highly educated human capital
– is gradually becoming a bottleneck factor. Today, wages
in Timisoara are already above the national average and
the caravan of foreign investors is moving further east.
It is obvious that there must be more reliance, already
today, on existing (endogenous) potential for continued
success of the transformation process and for economic
development.
The idea of creating a business incubator in Timisoara
arose against this backdrop. The first suggestions were
formulated already during the Open Forum for Technology
Transfer in April 2002, which was supported by GTZ
through the EDEP Program. Two objectives were at the
center of the discussion at that time: the prevention or at
least reduction of brain drain, and the attempt to transfer
at least part of the informal economy to the formal
sector. According to a study of the local administration,
there were previously around 200 so-called apartment
firms working, more or less legally, in software development
for the large companies in Timisoara. The idea was
that a business incubator could move business potential
from the underground economy into the official economy.
At the same time, a “protected” area could be created to
give university graduates the opportunity to implement
their own business concepts. In the medium term, independent
business activity will also help to mitigate migration
trends.
Implementation
The idea of a business incubator was positively evaluated
by the EDEP Program (“IBD”), which is implemented on
behalf of the German Federal Ministry for Economic Cooperation
and Development (BMZ); it was then incorporated
into the portfolio of activities, making it possible for
the Program to accompany and support the entire process
of planning, realization, and implementation.
GTZ helped the partners prepare and implement the incubator
concept, the heart of which was a participatory
approach based on incorporation of municipal and regional
actors. Local partners and GTZ participate equally
in conceptualization, financing, and the ongoing implementation.
In the preparatory and planning phase, the German contribution
consisted, on the one hand, of providing an
expert on setting up and operating business incubators.
Examination of various models for start-up centers, recommendation
of a small “incubator,” and presentation of
a draft concept were among the key inputs. On the other
hand, there was moderation of the cooperation between
the three partners in Timisoara (the Polytechnical University,
city and district administrations), an input that
should not be underestimated. Different interests seriously
threatened the progress of the project on more than
one occasion. Direct assistance was supplemented by participation
of the actors in the Open Technology Forum in
Bucharest and by a study trip to Germany, where different
technology and start-up centers were visited.
Then, in May 2004, the University Business Incubator
Timisoara (UBIT) was officially inaugurated and began
operations. A renovated floor in a university building provides
about 360 square meters of space for up to 16 firms.
Today, nine young start-up teams have already moved in.
By the end of 2005, 12 companies plan to locate in the
center. The business ideas of the start-up firms range from
internet-based technical services to smaller production
units. The center offers young entrepreneurs inexpensive
rent, high-speed internet access, receptionist and secretarial
services, and educational and training measures.
In the near future, there are plans to expand the center’s
capacity. The UBIT is also to be accredited as a national
technology transfer center on the basis of the national
law.
Impact
Today – a good 15 months after the inauguration of the
center – it is still too early to see all the results. In any case,
the center is successful, and results can be demonstrated at
the micro, meso, and, in part, the macro levels. However,