Business environment 'less than positive' for businesses in seven Candidate States
The environment remains 'less than positive' for innovative businesses in seven candidate countries, according to the first findings of an interim report on 'Innovation policy in seven candidate countries: the challenges,' carried out for the European Commission's Enterprise DG. The report examines the innovation policy framework, measures to foster innovation in enterprises and business innovation interfaces, such as cooperation between large and small businesses and between academia and industry, in Bulgaria, Latvia, Lithuania, Malta, Slovakia, Romania and Turkey. The authors of the report say the findings do not compare favourably with the picture painted by an earlier study carried out for the European Commission on innovation in six candidate countries: Cyprus, the Czech Republic, Estonia, Hungary, Poland and Slovenia. The study says the legal and administrative environment is more hostile in the seven countries covered by the report than in the six countries examined earlier. Malta leads the way in adopting measures to reduce barriers to enterprise. The other countries have also taken action in this area, according to the report, 'but the climate conducive to business development in general, and innovative businesses in particular, remains less than positive.' It says over-regulation is a particular problem in Romania, Bulgaria, Lithuania and Turkey, while businesses are hampered by a weak financial system in all seven countries. The report recommends the establishment of a system to validate policy actions in favour of business in each country. In the majority of the seven countries (Bulgaria, Latvia, Lithuania and Slovakia) innovation policy is dealt with by a ministerial body. However, the report highlights that the responsible ministries in Bulgaria and Slovakia do not have any real capacity for innovation policy development. Furthermore, while innovation policy ostensibly falls into the remit of ministerial-level bodies in Romania, Malta and Turkey, only Turkey has an institutional structure with a long tradition of policy development in the field of innovation. In addition, there are no government agencies with a direct remit for innovation policy in any of the seven countries except Turkey. Although the countries have begun to embrace new innovation support structures such as technology parks (e.g. in the Baltic States and Turkey) and technology transfer structures (Innovation Relay Centres exist in five of the seven countries), the report points out that innovation funding mechanisms are still 'few and far between' in all of the countries. Venture capital funds continue to focus on investment in larger initiatives or development rather than seed or early stage funding. The findings of the interim report will be presented at the European Business Summit which takes place in Brussels from 6 to 8 June 2002. Copies of the report will be available at the CORDIS (Community research and development service) stand.