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

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5.9 Technology-Oriented Business Incubator in Novi Sad/Vojvodina, Serbia –
Budgeted and Implemented in the Framework of the Regional Development Plan
Wolfgang Limbert, Zarko Maletin, Regina Kallmayer
Introduction
The integrated regional development plan of the Province
of Vojvodina places the highest priority on (further) development
of SMEs, in addition to tourism development
and support of agriculture/food production. Of the 14
development measures foreseen in the plan, one is especially
dedicated to the creation of incubators in the cities
of Novi Sad, Zrenjanin, and Subotica. Thus, 4.3 % (or
EUR 1.3 million) of the entire budget is earmarked for this
purpose. Given that Novi Sad is a university town, it has
the potential to make use of the knowledge of the professors,
graduates, and students for a technology-oriented
business incubator as a special advantage in competition
among locations.
Short description of the approach
Incubators offer new businesses with innovative ideas ideal
start-up conditions with respect to their financial and spatial
needs and possibilities as well as with respect to their
demand for technical advice and lobbying for improved
framework conditions. Attracting business start-ups in
similar sectors to an incubator promotes competition
among the start-ups and supports the exchange of knowledge.
This leads to the affiliation of corresponding service
firms, and the infrastructure improves. In this protected
environment, young firms can build up their businesses
over a set period (depending on the statutes, usually up to
five years) or until they have reached a certain size.
Project implementation
Originally, the incubator was to be founded as a spin-off
of the University of Novi Sad. An initial 24 business startups
in the information technology (IT)/software sector
were to be supported, some located in the incubator, some
“virtually” connected to it. If the corresponding knowhow
is found at the location, the software sector offers the
advantage that relatively little capital is required to start
a business. The outsourcing of work from German/European
firms is a chance for many software firms and experts
in South-Eastern Europe – like contract production in the
clothing sector – to enter and expand in the business.
The provincial government of Vojvodina, the city administration,
and the University of Novi Sad were willing
to work together. A new building and financing for
the incubator in the amount of EUR 100,000 a year were
planned by the city. However, then the new government
that emerged in Novi Sad after municipal elections in September
2004 withdrew its support. Alternative financing
and sponsorship had to be sought.
At the same time the Economic Development and Employment
Promotion Program (EDEP), implemented by
GTZ on behalf of BMZ, advised the provincial government’s
efforts to build up the Vojvodina Investment Promotion
Fund (VIP Fund). This Investment Promotion
Fund, financed by the province and supported by the Program,
was commissioned by the provincial government, in
line with the integrated regional development plan, to create
incubators in Novi Sad and Zrenjanin. The first step was
the signing of a letter of intent with the University of Novi
Sad and the Free Trade Zone Novi Sad/the city administration
of Zrenjanin.
The cost of the incubators will probably run between EUR
230,000 and 280,000. In order to guarantee financing,
the provincial government has promised to provide EUR
25,000 a year for each of the incubators for a period of
four years. As in all development measures in the integrated
regional development plan, the remaining 75 % must
be financed by the international donor community.
The VIP Fund will apply for support from the European
Agency for Reconstruction (EAR), as well as other sources.
A project proposal for Novi Sad was already drawn up,
together with the University of Novi Sad, the business
development company VVK (Keckemet, Hungary), and
the regional development agency (DARFT) in Szeged,
Hungary, and forwarded to the INTERREG IIIA Office.
The following distribution of costs is foreseen: 43 % EU
CARDS (Serbia), 43 % EU ERDF (Hungary), 11 % provincial
government of Vojvodina, and 3 % VVK. The project
proposal in Zrenjanin was drawn up together with the
city administration of Zrenjanin and the Mihajlo Pupin
Science and Technology Policy Research Center and will
probably also be submitted to the EU.
Objective and impact
The objective of the project is: Firms will be assisted in
starting up small and medium-sized enterprises in the area
of software development.
Through the technical, legal, organizational, and financial
support provided by the project, the framework conditions
for creation of incubators are improved. VIP Fund
and its partners use these inputs to provide office space,
corresponding services, and a legally protected area for
software development (protection against pirated editions,
illegal supply to other firms, etc.) These cost-effective
measures stimulate the founding of new, innovative
SMEs in the IT area. This, in turn, creates an incentive for
the establishment of corresponding service firms. The en-