The CEE9 countries – Austria, Bulgaria, Croatia, Czech Republic, Hungary, Poland, Romania, Slovakia and Slovenia – and especially the countries along the Danube Valley have the potential to propel itself to the front of European innovation leadership in the forthcoming years.
The GLOBSEC Tatra Summit Insight Report 2021, is a real wake-up call for the CEE9 countries. Most of the group is not performing well on GLOBSEC’s Strategic Transformation Index (STI). The ranking is as follow: Slovenia (57.0), Czech Republic (56.0), Poland (51.9), Hungary (51.2), Slovakia (47.8), Croatia (41.1), Romania (40.3) and Bulgaria coming last (35.6). Yet, it must be highlighted that “Austria defends its top performer standing, with an overall score of 63.9 points. The index value 63.9 is interpreted as being almost at a 2/3rd point between the worst and the best performer in the sample between 2010 and 2018 […]”. Although there is a slight progress year on year, it is not significant. With an updated version of the index coming out soon, comes an opportunity to initiate change.
Europe aims at being a trend-setter and leader in the domain of innovation. However, it lags behind its US (487) and Chinese (301) counterparts, with less than 100 unicorns (a start-up that is valued at one billion dollars or more) as shown by the latest data from Statista. The Director-General of the EU’s Research and Innovation Directorate, Jean-Eric Paquet, told Sifted in an interview, “The EIC should become Europe’s unicorn factory, we are creating possibly the biggest deep-tech equity fund in Europe.” The European Commission adopted the work programme of the European Innovation Council, on February 9, 2022, opening funding opportunities worth over €1.7 billion in 2022. The European Innovation Council was launched in March 2021 as part of the Horizon Europe programme and has an earmarked budget of over €10 billion for the 2021 and 2027 period.
As European countries emerge from restrictions and economic slowdown imposed by the COVID-19 pandemic, an opportunity for the CEE9 presents itself. Measures for a favourable growth environment for innovation and start-ups to thrive must be introduced on a regional level. Innovation is key to allowing the region to grow, catch up with its neighbouring countries to the West and help Europe to become a serious competitor on the international scene.
If we take a look at Slovakia’s Recovery and Resilience Plan, “43% of the plan supports climate objectives and 21% of the plan supports the digital transition”. Similar shares are observable in other CEE countries’ Recovery Plans, which is an EU-level requirement. With funding and policy measures available, working towards an innovative ecosystem will contribute to laying down the foundations for a new, more sustainable, and smarter future economic growth model. Thus, helping Europe to come forward as a leader in innovation.
Besides, the moment is more crucial than ever: With the raging war in Ukraine the consequent spotlight is shining on the region. A direct consequence of the Russian re-aggression of Ukraine is the brain drain, not only from Ukraine but also from Russia and Belarus. According to the New York Times, “By March 22 (2022) a Russian tech industry trade group estimated that between 50,000 and 70,000 tech workers had left the country and that an additional 70,000 to 100,000 would soon follow. They are part of a much larger exodus of workers from Russia, but their departure could have an even more lasting impact on the country’s economy.”
There is a need to monitor this displacement of workers and assert its potential effects on EU and non-EU countries. This is a potential for CEE, Slavic and neighbouring countries, companies, education facilities and think-tanks to welcome with open-arms highly educated workforce and relocating companies with high innovation potential, adding to the local pool.
The flow of refugees also includes political opponents, let alone refugees overall, who should not be omitted. According to a March 2022 article from The Economist, “Russian émigrés are behind some of the world’s most successful digital start-ups, such as Revolut, a mobile-banking app based in London co-founded by Nikolay Storonsky”.
In a nutshell, tapping on the innovative potential of the region could be an essential contribution to rebuilding post-war Ukraine. Besides, the safe return of dislocated populations to their homes in Ukraine, will be an asset for fostering further intra- and inter-regional innovative cooperation.
Nonetheless, the current cost-of-living crisis, due to surge in energy prices and high-inflation ―as direct consequences of the COVID-19 crisis, heightened by the war in Ukraine― are clearing innovation off the investment priorities of the member states. Funding is, naturally, a key element of any innovation agenda for the region. With such drags on the way, 2022 might not be the kick-starter of innovation.
It is high time to foster an innovation-friendly environment in the region, providing the local entrepreneurs with the keys to bringing their projects to life, and looking towards the future. All of it, in the current context, should be done in a fraternal spirit with citizens of neighbouring countries to the East either fleeing the destruction of their homes or an oppressive government.
Collaboration and cross-border cooperation are means to connect people, learn from each other, grow stronger regional bonds contributing to an increased competitiveness and hopefully rebuilding of a stronger Ukraine. In other words, working unitedly on putting the CEE countries on the map, for a more impactful motive than a brutal war.
