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South East European Business Start-‐up Network – From Idea to Business Project, 2007-‐2010, Final Narrative Report 1

May 31st, 2011

South East European Business Start-‐up Network – From Idea to Business

Final Donor Narrative Report

Ilija Mutadjvic, owner of "Little Plant." BSC Kragujevac (Serbia) 2008 Business Plan Competition

award winner. BSC Project Offices: Business Start-‐up Centers (BSC) – Zenica (Bosnia-‐

Herzegovina), Bar (Montenegro), Bitola (Macedonia); Kragujevac (Serbia); BSC Birzeit (Ramallah, OPT); BSC Monrovia (Liberia); Job’s Creation tender projects in South East Europe

Donor Organisation: SPARK Agreed Project Duration: 01 October 2006 – 31 December 2010 Period Covered by Report: 01 January 2007 – 31 December 2010


Content

Section 1: Executive project summary and background…………………................................................................4 Section 2: Activities planned & and carried out; Discrepancies between expected & actual results; Problems & proposed solutions (end of each section).......................................................................................................7

A -‐ DIRECT POVERTY REDUCTION -‐ Generating Jobs: Establishing Business Support Centres………..................................7 Results 1/2: BSC Offices and BSC Committees established...........................................................................................7

BSC Birzeit (Ramallah, OPT) Pilot Project...............................................................................................................7 BSC Monrovia (Liberia) Pilot Project………………………………………………………………………………………………………….………8

Result 3: Course Modules Developed and Implemented (Business skills training)......................................................10 Result 4: Curriculum Coordination Meetings (Curriculum Development)....................................................................12 Results 5/6: Credit Facilities, Business Plan Competitions (BPCs) and Business Start-‐up Support established......... 15

Number of SMEs Created or Existing Businesses Assisted................................................................................ 15 Average increase in the income of the companies and employees.................................................................. 16

Result 7: Establishment of Business Incubators.......................................................................................................... 18 Jobs Creation Tender............................................................................................................................................19 INVENTIVNOST ICT Business Incubator, Podgorica, Montenegro........................................................................20

Result 8: Introducing ISO standards in SEE SME Sector................................................................................................20

B -‐ CAPACITY BUILDING -‐ Capacity Building of Local Partners………………...…………………………......................................23 Result 1: Building (IT )Capacities in Local Partner Institutions....................................................................................23 Result 2: Training for Partner Institutions....................................................................................................................23

Local Partner clientele satisfaction and efficiency rates recorded through the Project......................................28 Sustainability of the Business Start-‐up Centres and Incubators..........................................................................28

C -‐ POLICY MAKING -‐ Policy Making for Economic Development…………………………………………...................................33 Results 1/2: Annual local and regional “Status Reports on Local SME sector”...........................................................34

Regional SME Studies and Conferences financed by the Project..........................................................................36 Result 3: Policy Making in the Netherlands..................................................................................................................37 Result 4: Annual Regional Conference on SME & Private Sector Development and SME Fair....................................38 Result 5: Meetings with relevant EU institutions.........................................................................................................38

Annual % increase in satisfaction rate with Partner policies among SMEs.........................................................40 Number of adjusted national SME policies and % of identified obstacles removed...........................................42

Section 3: Project and Management Performance................................................................................47 Annex 1: List of SEBSN BSC/BI Local Project Partners…………….……………………………………………………………..………48


Acronyms BSC Business Start-‐up Center BI Business Incubator NLMFA Netherlands Ministry of Foreign Affairs SEE South East Europe SEBSN South East European Business Start-‐up Network LNGO Local non-‐governmental associations RDA Regional Development Agencies ToT Training of Trainers] BST Business Skills Trainings TDT Teacher Development Trajectory EUA European Universities Association MFI Micro-‐finance Institutions REDASP Regional Economic Development Agency Sumadija and Pomeravlje UNZE University of Zenica EEN Enterprise Europe Network FBiH Federation of Bosnia-‐Herzegovina Ze-‐Do Zenica-‐Doboj (Canton) SMEDA Small and Medium Enterprise Development Agency (Montenegro) ZEDA Zenica Economic Development Agency EBRD European Bank for Reconstruction and Development CBI Centre for the Promotion of Imports from Developing Countries M&E Monitoring and evaluation BP Business plans QMS Quality Management Systems


Section 1: Executive Project Summary Background, Approach and Objectives October 2006, the Netherlands Ministry of Foreign Affairs (NLMFA) awarded SPARK (then Academic

Training Association) a foreign development assistance grant of 9,858,408 euro for implementation

period January 1st, 2007 – December 31st, 2010 to set up four Business Start-‐up Centers (BSC) and

Business Incubators (BI) in South East Europe (SEE). The South East European Business Start-‐up

Network (SEBSN) – From Idea to Business Project was proposed to (primarily) initiate business start-‐

ups for 18-‐35 year olds and expand business knowledge and capacity in younger, existing businesses.

Secondly, to build the capacities of local partners through emplacement of new ICT technologies and

enhance/instil, non-‐technical skills of local partner staff through training, seminars and study tours.

Local partners comprised public/private/educational institutions: national ministries, municipalities,

chambers of commerce, regional development agencies (RDA), business associations, universities and

local national governmental associations (LNGO). Thirdly, policy making through the reduction of

business barriers and obstacles, through the commissioning of policy studies on local/regional

business barriers and obstacles, presentation at conferences and business fairs and lobbying of

institutions which can affect these changes. The SEBSN Project thereby was a three-‐stroke effort: 1)

Poverty Reduction, 2) Capacity Building (of local partners) and 3) Policy Making (reduction of business

barriers and obstacles).

The SEBSN Project geographically focused on 4 SEE locations in early 2007 breaking ground for

Business Start-‐up Centers and Business Incubators: Bar (Montenegro); Kragujevac (Serbia); Bitola

(Macedonia) and Zenica (Bosnia-‐Herzegovina). The 4 BSCs were implemented in cooperation with

local Partners and cash/in-‐kind contributions pledged to ensure buy-‐in and ownership of the BSCs.

In the Project interim, SEBSN piloted two BSCs in Ramallah, OPT (BSC Birzeit) and BSC Monrovia

(Liberia), both in year three of the project (2009).

November 2009, SEBSN project kicked-‐off the “Jobs Creation” tender sub-‐project for a total of

470,791 euro and 8 entrepreneurial minded institutions (start-‐up, business incubator and value chain

projects) in Bosnia-‐Herzegovina, Serbia, Macedonia and Kosovo.


Intended Beneficiaries

Intended beneficiaries of the 4 BSC/BIs, 2 pilots and Jobs Creation tender were aspiring

entrepreneurs, existing SMEs, university /college students and local Partner institutions among others

all of whom would benefit from a range of business support advice and assistance including business

plan preparation, training courses in business skills development and capacity building of Partners

identified by the project. The end result would be an overall increase in the number of business start-‐

ups, increased employment opportunities for graduates or unemployed people, higher levels of

income for those in employment or running their own businesses and a greater acceptance in the

wider community of entrepreneurship and private sector development in general.

Summary Outcome and Impact of the Project

In real terms, has the project affected change in the communities it was awarded to? External

evaluators Maclean-‐Skinner report: “In overall terms, from the evidence available during the mission

gathered from documented sources, interviews with Project staff, trainers, Partners, entrepreneurs

and SMEs and focus group sessions with current and graduated students, it is possible to conclude

that in terms of their operational obligations the Project has made significant steps forward in

implementing planned objectives and reaching targets to date. From modest beginnings and with a

clear lack of previous experience in these matters Project teams together with their selected Partners

have managed to enter unchartered waters and effect real change not only with respect to

beneficiaries in improving their skills and expertise in their relevant areas but in changing the

mindsets of previously sceptical parties among the population at large.”1 Have the findings of the

evaluators been realized several months after the end of the SEBSN Project upon aggregating final

numbers gathered from the field? In the final tally, 10,868 participants attended business

development trainings, 516 SMEs were created or supported (298 start-‐ups and 218 existing

companies), 1,927 jobs2 created, 12 ICT projects increased the client satisfaction capacities of the

local partners by 66.64%3 and 1,518 attendees participated on conferences devoted to reduction of

business barriers and obstacles raising awareness of issues with policy makers in these forums. The

Project has met its aim in Poverty Reduction and Capacity Building. Policy Making efforts on behalf of

the Project have shown modest results on a municipal, not national or international level. In its

defense, studies have shown that it is difficult to measure absolute reduction of business barriers and

obstacles, in many instances the elimination of barriers and obstacles are coincidental. Albeit, the

1 Maclean-Skinner “Combined External Evaluation of three SPARK held Projects for Year 2009, Final Report”, July and December 2010, page 5 2 Number of start-up and existing companies and jobs created vary from final external evaluation report due to final reporting of outputs/impacts from SEE BSCs, Jobs Creation Tender and pilot project BSCs Monrovia and Birzeit in the first quarter of 2011. 3 Impact Study – Capacity Building, Sarah Ringler, December 2010, page 11


project strove to present business barriers and obstacles in each of their countries through a number

of forums and to follow national leads in particular areas identified as barriers/obstacles (i.e., access

to financing, ISO/HACCP certification, business start-‐ups for youth, introduction of entrepreneurship

in university curricula, business trainings, etc.). Has the donor, the NLMFA, invested its funds in a

project which has wisely divided the financing pie in an efficient manner? Quite concertedly, yes -‐

86% of all financing, and thusn a vast majority of resources, were delegated to Poverty Reduction

activities, 5% Capacity Building and 9% Policy Making. It should, however, be emphasized that only

14% of the total budget was allocated for these second two components (combined) and it is to be

expected that much less effort was placed in them; this was always the intention as the focus of

SEBSN Project was durable SME development and job creation.

Has the SEBSN Project developed according to its proposal submitted in June 2006? In the course of

implementation it can be argued that the Project developed along its own lines. Local Partner

expectations in some BSCs held differing viewpoints on implementation and allocation of funding,

especially regarding contracting of consulting funds and execution of the Business Incubator

component and how they should be managed. Local Partner viewpoints diverged in the first 1-‐2

years of the Project, by year 3 and 4, acceptance of the Project and its objectives converged. BSC/BI

staff lack of experience was quite apparent in the earlier years of the Project. By end 2010, the

BSC/BIs had positioned themselves with training and experienced skill sets to chart a course for

financial viability and sustainability4. All 4 SEE SEBSN BSC/BIs in years 2009 and 2010 engaged in

numerous training courses and seminars aimed at capacity building to provide business trainings,

advise businesses, manage BIs, write proposals and secure new projects. As of this writing, 3

BSCs/BIs have continued operations on a commercial and donor based level. BSC Zenica has reduced

staff to the Director, although BSC Zenica has integrated itself into the University of Zenica and is re-‐

gearing its mission with university based projects and activities.

Considering the breadth of the Project and lofty targets set by SPARK in 2006, it can be comfortably

agreed that the Project has started up/created hundreds of SMEs and opened nearly 2,000 thousand

jobs, advanced the capacities of local Partners and contributed to the better enabling business

environment of the communities they serve. And possibly, quite importantly, as a side result of the

Project, 12,000 people participated in business training modules in four years which has advanced the

entrepreneurial spirit and planted the seed for business development in former socialistic countries

of South East Europe.

4 Mid-‐term External Evaluation Report, Alberto Gomez, December 2008, page 22


Section 2: Activities planned & and carried out; Discrepancies between expected & actual results; Problems & proposed solutions.

A -‐ DIRECT POVERTY REDUCTION -‐ Generating Jobs: Establishing Business Support Centres (Results 1-‐8)

Results 1,2. BSC Offices and BSC Committees established BSCs Established SEBSN BSCs were established in each of their communities, followed by independence from SPARK on the following dates5: Bar, Montenegro April 2007 (established), December 2009 (independent) Kragujevac, Serbia April 2007 (established), December 2009 (independent) Zenica, BiH March 2007 (established), January 2010 (independent) Bitola, Macedonia March 2007 (established), August 2010 (independent) Each BSC was allocated 1.68 million euro at the onset of the Project, budgets were shifted accordingly

in the course of the Project as absorption rates and opportunities appeared in other BSCs or locations

in the world. MoUs were signed by local Partners in the establishment months, which regulated local

Partner contributions to the Project over the following four years.

BSC Pilot Projects In the course of 2009, two pilot BSC projects were started in Monrovia, Liberia, and Ramallah, OPT as

SME development opportunities appeared in these countries. As a consequence, Liberia and OPT are

now MFS II countries and these pilots have become mainstream MFS II Project holders. Noted below

is a summary of activities for both locations6.

1) BSC Birzeit (Ramallah, OPT) Pilot Project In August 2009, SPARK established a pilot project Business Start-‐up Center in cooperation with Birzeit

University Ramallah, West Bank, OPT. The Business Pre-‐incubation Centre (BSC) at Birzeit University

was established in cooperation with SPARK, in order to create new business models from the ground

up, through highly motivated young Palestinians, who were given the opportunity to grow and

receive professional advice regarding their business model and growth plans and strategies. BSC

5 The dates presented are non-‐official opening dates; officially the BSCs were ceremonially opened by Dutch Ambassadors within each country on a later date. 6 Where possible, pilot project outputs for BSCs’ Monrovia and Birzeit have been included with the aggregated SEBSN BSC/BI targets and

impact.


Birzeit’s Coordination Committee consisted of the representatives of the following local Partners: OPT

Ministry of National Economy, OPT Education Initiative, OPT Information and Communications

Technology Incubator, and the OPT Information and Technology Association.

The project established a university-‐based technology business pre-‐incubator that will help solve the

challenges facing OPT policy makers of how to encourage and educate more graduates and

individuals to consider self-‐employment as a career option, and as an alternative to the more

traditional career paths of paid employment in the ICT sector.

Outcomes of this pilot project are as follows:

• 100 applications for the positions of Expert Local Trainers, and Business Consultants were

received. Upon selection procedure, BSC Birzeit started a database of 10 trainers and

consultants.

• 13 trainings were delivered in which 325 participants (around 50/50 -‐ female/male ratio) have

participated in the training courses, 2 business plan competitions have been conducted, out

of 30 applications a Jury selected 8 business plans to be awarded with additional consulting

and financial support for starting the business. 8 companies and 8 jobs were created.

2) BSC Monrovia (Liberia) Pilot Project

In August 2009, SPARK kicked off a second pilot project, BSC Monrovia, supporting young women and

men at universities and vocational schools as well as existing businesses run by young people to start

and develop businesses through a combination of business skills training, coaching & mentoring and

financing through a Business Plan Competition. This project combined business development training

with a Business Plan Competition including business skills training, coaching, mentoring and soft

loans. In addition, the pilot project offered an employability program focusing on job searching skills

as well as general business or work skills. The employability program involved businesses, NGOs, and

(semi) governmental institutions in the development of the employability training courses and in job

fairs. The program was established as a business start-‐up/development centre in Monrovia, with

extension desks in Cuttington and Buchanan. BSC Monrovia is a pilot project of the Association of

Liberian Universities (ALU) and an initiative of the ALU, SPARK and the Ministries of Education, Youth

and Sports, Labor and Commerce.


Outcomes of this pilot project are as follows:

• BSC Monrovia established at the University of Liberia

• 8 trainers trained, 12 modules organized, 101 youth trained, 60 business plans received7

• Awardees are now in different stages from the point of winning the Business Plan

Competition to receiving the loan. 4 have been fully approved by the bank partner. Two of

them were registered and will receive their loan shortly, two of them are in registration. The

remainder are being coached towards approval of their loans.

7 Only one Business Plan Competition (BPC) was organized through BSC Monrovia when two were envisioned. Due to delay in finalizing the BPC late in 2010, loans are in the process of disbursement and job creation cannot be attributed to yet.


SEBSN BSC Coordination Committee Meetings Four years of SEBSN Project implementation produced 63 Coordination Committee meetings and 404

Partners attending, for an average of 6.41 Partners present per coordination meeting and nearly 4

annual meetings per BSC (target 64 meetings/320 local Partners present over 4 years):

Business Start-‐up Center Coordination Meetings Held Local Partners Attending Bar 13 108 Kragujevac 24 138 Bitola 11 77 Zenica 15 81

Total8 63 404

Overwhelming interest in project implementation was recorded by BSC Kragujevac local Partners,

trailing with Zenica, Bar and Bitola. In many instances, BSC Directors held additional informal

meetings with local Partners not recorded in this table. Numerically, BSC Kragujevac held a greater

amount of meetings over the life of the Project in an attempt to position the BSC as a sustainable

institution supported by the local Partners after project close in 2010 and local Partner concerns that

the SEBSN Project conforms to other business development initiatives already being implemented in

the Kragujevac region. To a much lesser degree, greater acceptance and project buy-‐in of the

objectives of the SEBSN Project in BSCs’ Bar and Bitola required reduced number of formal meetings

with Partners. Parallel business development institutions in these communities working with start-‐

ups and business incubation were not present nor posed an obstacle to existing programs. As a

result, BSC’s Bar and Bitola have been well accepted by the communities as forming niche business

programming lacking to date.

Result 3. Course Modules Developed and Implemented (Business Skills Training)

A vast majority of resources and BSC staff commitment in time was leveraged to provide trainings for

11,040 targeted participants under the Project. To meet this target, the Project was prolific in training

Trainers for business modules held for participants. SPARK’s methodology of Training the Trainers

(ToT) encompassed 3-‐4 days to develop a 20 hour business module. At the onset of each training

cycle a ToT session would be held and existing modules would be examined for improvement or

entirely new modules developed. A total of 205 trainers were trained through the Project (target

240 trainers trained). The total amount of trainers trained were adequate to meet the needs of the

Project.

8 Total does not include Jobs Creation tender, BSC Birzeit and BSC Monrovia sub-‐projects.


Business Start-‐up Center/Sub-‐Project

Participants in trainings, 2007-‐2010

Bar 2363 Kragujevac 3399 Bitola 1732 Zenica 1799 Monrovia 108

Birzeit 325

Jobs Creation tender 1142

Total 10,868

A total of 10,868 participants have participated in BST and BPC trainings (target – 11,040 trained

participants). Under the monitoring and evaluation (M&E) indicator “Does the content of the

business skills training match the needs/demands and of the participants?” 4.54 average score was

achieved through 4 years of trainings (target – 3.50). A total of 122,954 euro (number quantified in

annual report SPARK; partners reported euro 165,833) has been donated by local Partners in the

form of classroom space to accommodate training modules up to 30 participants maximum. In most

cases, Partner Universities provided classroom space for these trainings in an effort to link students

with practical, informal business trainings that the BSCs provide. The trainings also provided

feedback to the Universities on direction to adjust existing curricula to incorporate entrepreneurship

and an opportunity for University professors to potentially participate and lead these modules as

trainers.

Raising of entrepreneurial spirit among the younger generation. A secondary effect of the Project

which cannot be directly measured has been the awakening and instilling of entrepreneurship in 18-‐

35 year olds. Due to the massive interest and participation of Business Skills Trainings (BST) and the

Business Plan Competitions (BPC) themselves (10,868 total trained), it is safe to assume that a good

portion of the population in each of the BSC communities has widened the entrepreneurial spirit

amongst its younger generations and offered opportunities to start-‐up their own business. Even if

not starting a business or expanding the skill’s base of existing business owners, these participants

have either strengthened their position to find a job, hardened their knowledge to perform their

present jobs or has even planted the seeds of entrepreneurship that will later serve them to open a

business or leverage for use in the business world later in life. The remark by local Partners in annual

partnership reviews also notes that the Project has affected a wider appreciation for

entrepreneurship on a scale not seen before9.

9 Local Partner annual partnership evaluations and SPARK.


Training by example. Integrated into the BST trainings was the presentation of successful, local

business people discussing with participants in a classroom forum. A total of 170 business people

from various walks of life presented their businesses (or trainings visited entrepreneur’s businesses)

and fielded questions from the training participants, thereby bringing to life theory with practical

examples.

Result 4. Curriculum Development in Partner Universities

A multitude of studies and World Bank “Doing Business Reports” uniformly through the years and

across SEE countries continuously note that University curricula is not entrepreneurial friendly nor

entrepreneurial minded. Furthermore, Universities are graduating students that do not meet the

needs of the local labour market. Businesses are complaining that University educated employees do

not come to them with the education nor skills they need. A root cause of this problem lies in a

University system that has been slow to react to the millennium, which reaches back to a socialist

system that repressed private business and, finally, older professors which are more concerned about

tenure than learning new skills. SPARK engaged Netherland’s based Science Alliance in October 2007

to assess University offerings in BSC Partner University’s Bar, Kragujevac and Bitola, to develop a

roadmap for curricula change. For years 2008-‐2010, 28 total curriculum development

workshops/seminars/conferences were organized to influence the adoption and greater awareness

of entrepreneurship in university curricula (see individual efforts under each BSC towards curricula

development listed below). A total of 16 workshops on curriculum development were targeted

through the Project, a majority of workshops, seminars and study tours alone occurred through the

BSC Bitola project (total 9).

With this in mind, the Project approached curriculum development in various manners in the SEBSN

Project due to needs and opportunities seized in each SEBSN BSC location (elaborated per BSC

narratively):

BSC Bar

In 2008: Organized one curriculum development workshop at (Partner) Atlas University’s Tourism

Faculty "Curriculum Development and Entrepreneurship" organized by Fontys University from

Holland for a group of 10 Assistant Professors of several Montenegro Universities. In 2009: Organized

one study trip to the Netherlands for Deans and Assistant Professors of 2 Montenegro faculties to

visit Tourism Faculties and Hotel Schools. Action plan resulting from this visit included changes in

curriculum based on new methodologies, which were adopted in study tour Universities. BSC Bar

also led the compilation of the study Analysis of the Labour Market of Bar, Budva and Ulcinj to reveal

the needs of the labour market and adjust the curricula of the universities to the needs of labour


market in the coastal region. In 2010, it finalized activities by organizing two workshops on how to

write business plans with Atlas Tourism Faculty Professors. Result of activities implemented above

were two courses accredited with new methodology at Faculty for Tourism’s (Altas University)

Management of SMEs and Entrepreneurship in Tourism (2 new topics included visits to the BSC Bar

Incubator -‐ 50 participants, Case Studies of the incubator tenants -‐ for students on the final year and

for Master students – was implemented for students enrolled in Master program in 2010) and one

request for interest for cooperation with NHTV Breda University which has Academic program in

tourism.

BSC Bitola

At the initiative of the University “Sv. Kliment Ohridski”, BSC Bitola and the University implemented a

multi-‐year research project for establishing entrepreneurial education/skills at the University level

(Entrepreneurial Aspirations of Students at the University of Bitola), Don Ropes, research leader, IN

Holland University. Results from this project were presented on the Conference “Entrepreneurial

Education – Fostering Entrepreneurial Mindsets”, hosted by the University “St. Kliment Ohridski”-‐

(Ohrid, Macedonia – May 2008), confirming the findings from the research and concluding that

besides introducing entrepreneurial elements in the faculty curriculum and promotion of the

cooperation between the University and the business sector. A demand based follow-‐up to the

previous activities was the collaboration of the University “St. Kliment Ohridski” Bitola and IN Holland

University through Professor Donald Ropes. BSC Bitola supported Teacher Development Trajectory

(TDT), a project comprised of 7 workshops for the 13 professors and assistant professors that

participated in the TDT to learn how to ease, organize and teach entrepreneurship in their

appropriate fields using new or improved methodologies. The final event of the TDT project was a

study visit to visit IN Holland University in Diemen, BioPartner Center in Leiden, Pedagogical

department of IN Holland University, Hoofddorp.

As a result of the curricula development project, there are 7 new subjects for entrepreneurship at the

various faculties of the University of St. Kliment Ohridski in Bitola: Entrepreneurship, Business

Leadership, Business Ethics, Business and Professional Communication, Marketing, Management of

Changes, Management of Small Business.

BSC Kragujevac

A number of significant activities were fulfilled with the local Partner, University of Kragujevac,

contributing to curriculum development, as well as to the development of a new way of thinking and

approach at the University faculties, namely:


2007 -‐ Science Alliance meeting in Kragujevac -‐ needs assessment for curriculum development,

October 2007

2008 – Curriculum development conference in May 2008, assembling 50 local/regional University

staff to discuss entrepreneurship awareness raising in curricula

2009 – Study visit of Kragujevac University professors to Netherlands faculties (January); workshop

organized during SME Conference ``Entrepreneurship Skills Development -‐ Cooperation between

Universities and Business`` May 2009; second study visit of Kragujevac professors to Netherlands

faculties and workshops with Donald Ropes (IN Holland University)

2010 -‐ Reversal visit of Dutch professors to Kragujevac University and workshops in Kragujevac –

Dutch professor Karla Millar (Twente University) to hold workshops on best practices of approaching

entrepreneurship in curriculum. Study visit of University of Kragujevac professors to Birzeit University

(Ramallah, OPT) holding workshops to spotlight success stories and challenges in creating the models

for support and stimulation of entrepreneurship and innovation among youth at Universities,

November 2010.

SEBSN Project financed a student’s “Career Center Development” (University of Kragujevac, Rectory

led) and “Center for Students Entrepreneurship” (Faculty of Mechanical Engineering, University of

Kragujevac). Students’ Career Center Development project aimed at promotion of career planning

and entrepreneurship. Career Development Center over the proceeding 4 years of project became an

important BSC Partner, permanently promoting BSC activities and disseminating information on BSC

entrepreneurship activities at the University, among the student population. Faculty of Mechanical

Engineering in Kragujevac, started in 2009 delivery of a new course ``Entrepreneurship``, to

commercialize student engineers business ideas. BSC Kragujevac provided inputs to the course and

organized guest speakers from business and SME sector.

BSC Zenica

Developing curricula at the University of Zenica (UNZE) was oriented towards modifying and/or

introducing new, more entrepreneurship-‐oriented curricula for the University. In that regard, BSC

Zenica started first activities in 2007, visiting University of Twente (Netherlands) aimed at

establishment of direct collaboration on developing two master curricula: Entrepreneurship and

Innovation and International Management. Curricula was developed based on numerous meetings

with local entrepreneurs, Vitez association of entrepreneurs and Arcelor Mittal in Zenica. Though, it

never entered into force due to lack of participation with Twente University professors and English

language knowledge of future participants.


In 2008 and 2009 BSC Zenica initiated new curricula development process, curriculum development

for Faculty of Polytechnics. New curricula was developed and approved by University senate in June

2009. The program laid the ground for merging Faculty of Economics and Faculty of Mechanical

Engineering’s specific knowledge aiming at developing new engineers with solid entrepreneurial

background. Faculty of Polytechnics establishment was approved by Zenica-‐Doboj (Bosnia-‐

Herzegovina) Cantonal Government (University founder) in September 2010, the first generation of

students will start their studies in October 2011.

June 2010, BSC Zenica initiated first contacts between the University of Zenica and European

Universities Association (EUA), aiming in delivering first certification audit of existing study programs.

Throughout the project, BSC Zenica Project co-‐financed 50% of total cost (17,000 euro) for the visit of

EUA to Zenica. Audit was conducted and list of recommendations issued towards university.

Results 5/6. Credit Facilities, Business Plan Competitions (BPCs) and Business Start-‐up Support

established

April 2007, Dutch financial and banking expert, Karlo de Waal, visited SEBSN countries and conducted

a tender to contract credit facility providers to manage micro-‐financing activities for the BSCs.

Contracts with credit facility providers were signed over the course of 2007 and 2008. The process of

contracting potential banks and micro-‐finance institutions (MFI) was prolonged owing to negotiations

with final contracted bank/MFIs for a start-‐up business development oriented loan package (i.e.,

extended grace period, lower interest rate, longer pay back period, collateral, etc.) which took into

account start-‐up businesses lack of resources and business acumen. Standings of the 4 SEBSN credit

facilities (including BSC Monrovia):

Business Start-‐up Center/Pilot

Project Bank/MFI Loan Conditions Number of Loans Amount (euro)10

Bar NLB Montenegro 6%, 6 months grace period, 48 months

maturity 41 270,000

Kragujevac ProCredit Bank 8.6%, 6 months grace period, 48 months maturity

62 394,000

Bitola Eurostandard Bank, Stopanska Bank

8%, 6 months grace period, 48 months

maturity 33 250,000

Zenica LIDER Micro-‐finance

Institution (Sarajevo)

7%, 6 months grace period, 48 months

maturity

31 150,000

Monrovia Liberian Enterprise

Development Finance Company

15%, 6 months grace period, 48 months maturity

411 150,000

Total 171 1,214,000 euro

10 Reflects the outstanding account situation on January 1st, 2011. 11 Loans have just started disbursement through BSC Monrovia to date, 4 start-‐ups receiving thus far.


Under the MFS I program, a total of almost euro 1.25 million has been invested in loans to

entrepreneurs. These funds are spread over 5 MFS I countries: Bosnia Herzegovina, Serbia,

Montenegro, Macedonia and Liberia. Currently an amount of € 1.071.120 has been disbursed to

entrepreneurs. Of this amount, € 226.120 has been paid back at the end of 2010 (these amounts

differ from the amounts mentioned in the SPARK annual report, because the annual report also

contains funds that were financed under another NLMFA program).

SPARK’s intention is to continue to use the funds for the same purpose, and in the near future mainly

in the countries mentioned above since the majority of the loans are still outstanding. Our main

partners under MFS I, the Business Start Up Centres, are still operating and can still make very good

use of the funds. Based on their perceived sustainability in the next two years, we will consider

transferring the ownership of (part of) these funds towards them for new disbursements, or retract

the funds from these countries and invest them in other countries, with the same purpose (loans for

entrepreneurs).

Number of SMEs Created or Existing Businesses Assisted

516 businesses were affected through the Project’s (298 start-‐ups & 218 existing companies) 4 SEBSN

BSCs, Jobs Creation Tender, and pilots BSC Birzeit and BSC Monrovia (table below):

Business Start-‐up Center/Sub-‐project

A) Start-‐up Businesses Created

B) Existing Businesses Assisted

Total Jobs Created

Bar 55 37 365 Kragujevac 36 46 238 Bitola 54 66 308 Zenica 71 69 710 Birzeit 8 -‐ 8 Monrovia -‐ -‐ -‐12 Jobs Creation Tender Sub-‐project

74 -‐ 298

Sub-‐total 298 218 Grand total A) 298 + B) 218 = 516 companies

1,927

A total of 480 start-‐up and existing companies and 940 jobs created were originally targeted. Overall,

start-‐up businesses (298) received a greater balance of assistance from the project. 218 existing

companies also received loans or consulting through the Project. These existing businesses were

typically younger in nature (below 2 years) with predominantly 30-‐45 year old owners. The higher

number of existing businesses assisted through the Project can mainly be attributed to a souring

economy in SEBSN countries. Participants were reluctant to start a business in the present economy,

but younger established businesses needed the extra nudge to keep them operating with the current

market downturns. It should be noted that 95.63% of all businesses are still operating (target -‐ 75%

12 BSC Monrovia is in the process of disbursing loans to the 2010 BPC awarded businesses. The start-‐up companies will initiate activities in


survivability rate)13. This high rate can be attributed to fairly recent business establishment (many

within the last 2 years) and testament to the filtering ability of the BPC process (ISO 9000 certified in

2007). At the end of 2011 another survey should be conducted to measure survivability of these

businesses.

“On demand” consulting was offered to BPC awarded businesses after start-‐up, of which 300,000

euro was budgeted for each center. At the end of the SEBSN Project, 27,401 hours of consulting was

delivered, equating to 676,025 euro. 1.2 million euro for the 4 centers was collectively allocated at

the beginning of the Project in 2007, decreased amount of consulting was delivered due to the

business start-‐ups not aware of deficiencies in their operations on a management level, financial or

technical nature. Mid-‐2009, the BSC staff started working more closely with BPC awarded businesses

to assess their operational short-‐comings and match up a relevant consultant.

Comparatively, 918 business plans (BP) were received through aggregated BPCs over 2007-‐2010 (828

BPs SEBSN BSCs, 60 BPs BSC Monrovia and 30 BPs BSC Birzeit), falling somewhat short of the 960

business plan projected number. This has not shown to be an impediment but points to a quality

filtering mechanism of the Business Plan Competition suggested by the high survivability rate.

An appreciable number of jobs were created in the BSC Zenica office (710), twice the other BSCs

(target for the entire Project, 940 jobs). BSC Zenica partnered with the Local Unemployment Bureau’s

programs for registering non-‐registered businesses, which partly reflects part start-‐up and micro-‐

businesses moving their small unregistered businesses into the legal zone. These “head start”

businesses had consolidated operations before legalizing and provided excellent basis for job growth.

Many good lessons can and have been learned by Zenica’s technique in generating jobs through this

method, combined with business start-‐up trainings.

Average increase in the income of the companies and employees that participated in the Business

Skills Trainings and Business Plan Competitions over the 4 years: 0-‐5% = 26% (increased their

incomes); 5-‐10% = 39%; 10-‐15% = 18%; greater than 15% = 17%. A majority of businesses and

participants fall into the 5-‐10% category, which is acceptable considering these are younger

established businesses or start-‐ups and taking into account the economic conditions of SEE over

previous 3 years.

mid-‐2011. 13 As of late December 2010. This number might have changed in the interim months.


BPC participant post-‐competition follow-‐up shows a 3.66 BPC participant survey average was

recorded over the 4 years of the Project (3.50 target).

Result 7. Establishment of Business Incubators

The establishment of business incubators for years 2007-‐2009 was originally confined to the SEBSN

BSC locations (Bar, Bitola, Kragujevac and Zenica), including the assistance to the Montenegrin

Government and European Bank for Reconstruction and Development (EBRD) to start an ICT

incubator in Podgorica, Montenegro (INVENTIVNOST ICT Incubator). SPARK established and

managed incubators were started up in the 4 SEBSN locations:

Business Start-‐up Center Square Meters Present Physical

Tenants Tenants Graduated

Bar 1100 m2 34 6 Kragujevac 2500 m2 14 4 Bitola 550 m2 8 6 Zenica 80 m2 1 3 INVENTIVNOST (Podgorica) 80 m2 8 0

Total 4,310 m2 66 18

A total of 84 tenants (graduated + present tenants), have been impacted in the Project (project target

– 60 total tenants). SEBSN Business incubators initiated activities with the first incubator open in

Bitola, November 2008; Kragujevac, December 2008; Zenica, June 2009; and Bar, February 201014.

At this time, the BSCs are integrated into the management structures of these incubators, with the

exception of BSC Kragujevac, which has moved permanent residence into the Kragujevac Chamber of

Commerce premises.15

Physical infrastructure and facilities for these incubators have been contributed in-‐kind by the local

Partners, whom in all cases, are the primary shareholder in ownership structure and management

board. Total in-‐kind contribution declared by partners (cash, purchase of incubation space, rent, etc.)

towards the SEBSN Project collectively has reached nearly 1.5 million euro, but only a minor part was

well enough documented and could be quantified in the SPARK annual report16. The lion’s share of

this amount lies with the Municipality of Kragujevac and their 1.17 million euro Business Innovation

Center (BIC) building purchase and reconstruction. Soft components such as trainings, consultancy to

the tenants have been covered by the Project and offered by the BSC staff or on-‐call consultants. The

typical price of incubator space in these incubators range from 4 euro for start-‐up companies to 8

14 Bar had second expansion of its incubation space in January 2011 with another 400 m2, after completion of reconstruction in December 2010.

15 The Business Innovation Center (BIC Kragujevac) is still operating, although did not receive full financial support through the SEBSN Project. A situation report can be submitted to NLMFA upon request.

16 Only euro 71.573 could be quantified in the SPARK annual report due to lacking documentation.


euro for existing companies (referred to as anchor tenants). Phone, internet and utilities are bundled

into the monthly rent cost to all tenants. All incubators have conference rooms, smaller training

room/computer rooms, cafeteria/kitchens and security entrances which can be used by the tenant

companies or the BI may rent to outside parties for day work or conferences/meetings/seminars.

Additionally, the BIs offer simultaneous translation equipment, conference equipment (public

address systems), and even “clouding” servers for companies to back-‐up data outside their premises.

All of these additional services provide income generation intended to cover operational overhead

costs.

Virtual incubation programs outside the BIs. BSC/BIs Bitola and Zenica provided virtual incubation

services in the form of clustering (ICT), business to business services, consulting, website

development/promotion and hot desk activities. Bitola managed a pool of 67 virtual tenant

companies, Zenica, 51 companies and 3 companies in Bar. Virtual incubation was through monthly

membership or one-‐time entry fees.

Jobs Creation Tender

October 2009, SPARK tendered 470,971 euro worth of sub-‐projects under the “Jobs Creation” tender.

Eight projects were selected through a competitive process of nearly 60 proposals. The tender

targeted business incubators, BSCs (non-‐SPARK), RDAs, CoCs, business associations and other

qualifying organizations dealing with SME development. BIs were either started or expanded through

this sub-‐project, business start-‐up trainings and new businesses created, agricultural and wood

manufacturing value chains developed, or high-‐value IT worker jobs created with SUN Systems/Oracle

trainings (intended work spaces were in BIT Center tenant companies searching for qualified

employees). The eight sub-‐projects’ timeline ran from November 2009 – December 2010. All outputs

and impacts from these eight sub-‐projects have been included with the total SEBSN BSC/BI indicators

where possible.

Jobs Creation Tender Project Holder Location Awarded Amount (euro)

Business Technology Incubator of Technical Faculties Belgrade (BITF)

Belgrade, Serbia 76,200

Business Incubator Center Prokuplje Prokuplje, Serbia 64,785 Youth Entrepreneurial Service (YES) Foundation

Skopje, Macedonia 49,934

Enterprise Support Foundation Tetovo, Macedonia 41,610 Regional Development Agency -‐ South, Prizren

Prizren, Kosovo 51,645

RIINVEST Institute, Pristina Pristina, Kosovo 49,700 Independent Office for Development (NBR) from Modrica

Modrica, BiH 87,017

Innovation and Technology Foundation Tuzla (BIT Center) Tuzla

Tuzla, BiH 49,900

Total 470,971


INVENTIVNOST ICT Business Incubator, Podgorica, Montenegro

April 2009, the Government of Montenegro’s Small and Medium Enterprise Development Agency

(SMEDA) and the Municipality of Podgorica opened the first business incubator in Montenegro, the

INVENTIVNOST ICT Business Incubator. 38,791 euro was allocated to this incubator for years 2009

and 2010. The incubator now houses 8 companies and employs 25 workers. Support to the

INVENTIVNOST Incubator is instrumental to the BSC Bar Incubator, the two incubators are the sole BIs

in the country of Montenegro and therefore are supported by SMEDA’s national enterprise

development programs and are promoted as leading economic tools in the country today.

Result 8. Introducing ISO standards in SEE SME Sector

SEBSN Project has been supporting small and medium enterprises interested in integrating quality

management systems (QMS) into their business operations, aiming to improve their

management/production capacities and to increase competitiveness and export. The introduction of

QMS was considered as essential for existing companies to refine their products/services and expand

their industries. New regulations by national governments, especially in Macedonia, now mandate

introduction of HACCP certification to process or handle food products. Moreover, all companies

shipping into the EU must also be HACCP certified. Beyond HACCP, many companies took advantage

of ISO certification which continuously reviews and improves on their processes. All in all, 90

companies achieved certification in the SEBSN ISO/HACCP result, several of these companies were CE

mark certified in order to meet specific regulations for marketing in the EU. Up to 10,000 euro or

50% of the total cost to engage a consultant and certify the company was paid for through the

Project, the remaining half by the company.

A total of 134 companies signed contracts enrolling in the ISO/HACCP certification project, projecting

a 67% certification completion rate. Although SPARK considers this an acceptable rate, 2 times+

more companies finished the ISO/HACCP certification process than originally targeted (40) – the

interest was tremendous. It has been learned through conversations with non-‐certifying companies

that with the down-‐turn of the economy, achieving certification was considered a luxury they could

not afford and dropped out mid-‐process due to reduction of external markets and excess cash.


Summary Results 1-‐8 1. Was it in time, according to planning (check work plan/ timeline above)?

• Poverty Reduction activities developed slowly in year one, increasing rapidly in later 2008 with

many trainings and results in this component hitting peak implementation in late 2009.

• Business Incubators were slow in opening, first incubator not till November 2008.

Commitments by municipalities to provide space and reconstruct for tenants did not mirror the

commitments in the Memorandums of Understanding (MoU). Significant negotiation with

municipalities lasted through 2007, 2008 and 2009 to honor contractual promises. In the case

of Kragujevac, the SEBSN Project provided for equipping and daily operation of the incubator,

but the BSC had to move to another local Partner to find office space. In Zenica, the Zenica

Economic Development Agency (ZEDA) was required by MoU to provide approximately 200 m2

incubation space. The space offered was water damaged and electrical installation was

delayed due to an outstanding electrical bill (40,000 euro). The agreement with ZEDA was

cancelled and a small business incubator on UNZE campus premises, 80 m2, was allocated.

Nevertheless, 5 BIs were opened in the SEBSN BSC locations.

• Independence of the BSCs earlier in the Project. Independence of the BSCs did not occur till

late 2009 or earlier 2010. This can be attributed to lack of staff experience, but also reluctance

of the BSCs to manage their own independent operations, looking to SPARK for management

and guidance. This is not considered to be exceptionally late on the Project time-‐line, for a

start-‐up institution it is regarded as 2 years into the project before independence usually

occurs.

2. Was it carried out completely or partly?

• For the most part, the Poverty Reduction component was carried out completely. Sole

divergence relates to BSC Kragujevac not integrating into the BIC Kragujevac as envisioned.

3. Which were the main problems and which solutions were proposed / would you propose?

• Engagement of more experienced, commercially minded BSC/BI staff. The trade-‐off for this is

higher salaried staff which would need to be budgeted for. Income generation skills would be

acquired and independence of the BSC/BIs would occur earlier in the project implementation

period.

• BSC locations Kragujevac and Zenica each had 1-‐3 business development/assistance institutions

as local Partners which planned complete absorption of the BSC into the local Partner

structures by Project end. Effect of this situation, BSCs remain stand-‐alone institutions in these

locations leading to a somewhat challenging relationship with local Partners. The

circumstances resulted in smaller scale BSCs at Project end. BSCs Bar and Bitola did not have


similar parallel institutions and, as such, have been widely accepted by the community and

championed as centers of business development, provided great support by their local Partners

(especially Municipalities).

• SEBSN implementation observed peak output in year 3 (2009) of the Project with a strong finish

end of 2010. Engaging project or commercially experienced staff proved to be difficult at the

beginning of the Project with budgeted salary levels, lesser skilled staffing were contracted as

an alternative. Only BSC Kragujevac was manned with experienced staff which transitioned

over from the USAID “Community Revitalization through Democratic Action – CRDA” business

development program. This showed results over the life the Kragujevac project through sheer

financial expenditures (2.3 million euro), outstripping the other BSCs by twice, keeping in mind

difficulties with the local Partners.

• The BSCs and BIs were originally imagined by SPARK to be combined institutions, each bringing

developed strengths into a sustainable institution. In Kragujevac, this was not the case.

January 2009 BSC Kragujevac physically moved into the municipality supported BI (Business

Innovation Center – BIC). After 9 months, the BIC and municipality signaled that they were not

interested in combining the two institutions, the BSC moved into the Kragujevac Chamber of

Commerce premises and registered under their non-‐profit license17. This has not been quite

the extent of problem compared to the other BSC locations.

4. Recommendations:

• Reduce the number of participants in trainings. 11,040 had been targeted in the Project over 4

years. In order to reach this number, the BSC staff had to inordinately invest significant amount

of time planning, promoting, holding, evaluating and following up these trainings and Business

Plan Competitions. A direct result has been a distraction to complete other Project results, and

consequently, developing the sustainability of the BSCs at an earlier stage. For future project

recommendation, it is advised to reduce the number of training participants by enacting much

stronger filtering and selection mechanisms.

Hire more commercially minded BSC/BI staff and start training their capacities earlier in the Project

timeline. BSC/BI staff were more concerned with executing Project activities than bringing in new

work and generating income. In their defense, sheer workload of the Project did not allow for

extensive income generating activities till 2010. Consider reducing activities of future projects or

engage larger staff to accommodate this problem.

17 Extended letter of elaboration compiled explaining the BSC Kragujevac and BIC separation can be requested.


B -‐ CAPACITY BUILDING -‐ Capacity Building of Local Partners Result 1-‐2:

A reduced portion of the SEBSN budget (5%) was directed towards developing and/or enhancing the

in-‐house skill’s capacities of the BSCs’ local Partners in order for their institutions to increase quality,

scope and client satisfaction in their communities. The basic goal of capacity building activities

directed at the partners was to improve the quality of their business operations, primarily in the field

of IT and communication equipment, which contributes to the successful project implementation and

further development of the local community (see list of local Project Partners is listed in Annex 1.)

Under Capacity Building, 2 results were functionally envisioned to strengthen Partner services:

Result 1: Building ICT Capacities in Local Partner Institutions: Partner institutions were requested to

submit ICT capacity improvement plans for their institution. Every two years, 1-‐2 projects were

implemented, equalling eight ICT capacity building programs for the region. A portion includes fees

for local software companies to implement installations and staff training. A total of 12 ICT contracts

were signed and 12 ICT projects were put into function with Partner institutions (please see listing of

ICT projects per BSC starting on page 21.) A total of 8 ICT project were targeted in the Project.

Result 2: Training for Partner Institutions: In addition to capacity building of target groups and

beneficiaries (see below), capacity building was organized for the relevant finance and management

staff of Partner institutions; training focused on employees up to 35 years of age and was open to all

staff, regardless of their involvement in the program. A total of 225 local Partner staff capacities

were expanded through trainings, seminars and one-‐on-‐one consulting through the Project (please

see listing of Capacity Building trainings per BSC starting on page 21.) A total of 128 local Partners

were targeted in the Project.

In the first half of the SEBSN Project, External Evaluator, Alberto Gomez observed “The partners’

involvement in project activities and ownership of the objectives is low. Many of the Partners are not

actively involved in supporting project activities, with a few exceptions. Most do not have a positive

attitude and do not know all of the project activities and results. Some do not know their role in the

project and have little sense of ownership in the results; others are only beginning to understand the

very concept of entrepreneurship; finally, others view the project (and incubators) as a competitor to

their influence and status quo.”18



This was the case in the first year and half of the Project, Partners were more concerned of

discovering “what’s in it for me” instead of “what can we do for the BSC Project”. It was not till the

second half of the Project that those Partners which were more concerned with financial gain

dropped an active role in the Project and other Partners stepped forward in a primary role of support.

These supporting local Partners in the end openly backed their BSCs/BIs and went as far as becoming

founders and Management Board members after independence from SPARK. This is also readily

evident in the amount of time donated by local Partners to the BSCs (below). Participation of local

Partners in the Project by way of directly working on activities, attending trainings, events,

conferences, seminars, participation or holding trainings for business participants is readily evident in

the amount of verified in-‐kind hours donated to the Project:

Business Start-‐up Center

In-‐kind hours19 (measured in days)

Bar 583 quantified in AR (719 reported by BSC)

Kragujevac 280 quantified in AR (633 reported by BSC)

Bitola 689 quantified in AR (1115 reported by BSC)

Zenica 431 quantified in AR (609 reported by BSC)

Total 1,983 quantified in AR (3,076 reported)

3,076 days in total were donated by way of the local Partners which openly supported the Project by

end of 2010, signalling exceptional dedication to the Project and integration into these agencies

entrepreneurship activities (project target – 432 days). Bitola with 1,115 donated days by far exceeds

the other centers. Attribution to this number is accredited by the 16 professor working group

obligating nearly 2 years of extensive work to integrate new ways of thinking and inclusion of

entrepreneurship into St. Klement Ohridski University’s various faculties. Bar, Kragujevac and Zenica

are relatively similar in Partner personal donation in time to the Project.

19 The difference between the quantified number (in SPARK’s annual report) and BSC reported number is either caused by the fact that

SPARK is not allowed to quantify those donations received once the BSC’s became independent, or some contributions lacked enough

proper documentation.


Capacity Building of local Partners broken down by each BSC by 1) ICT projects and 2) Capacity

Building trainings:

Bar

1) ICT related capacity building projects:

• Computerizing the Secretariat for Finance in the Municipality of Bar, with SNV (2008)

• Two projects for Montenegro Business Alliance (MBA): Project Management Software and

Training and purchase/instruction of SPSS software (2008)

• In 2009 2 ICT projects with Municipality of Bar: (one for Secretariat for Finance, one for

establishment of Office for International Cooperation)

• Distant Learning Software project with the Tourism Faculty (Atlas University)(2009)

• Accounting software project with the Bar Cultural Center (2009)

2) Capacity Building Trainings

52 local Partners attended Capacity Building trainings. Trainings count as: ECDL Training, study tour to

Poland (training in organizing and running BIs), EU funds management training in project cycle

management (PCM) in Zenica, training of partner institutions on How to Manage International EU

Funding, Training in Macedonia organized by SPARK for attracting Financial Investors and Business

Angels. Remaining trainings for Bar local Partners BSC scheduled: Public and Media Relations

Training, Strategic Marketing Training, Training on Preparing Studies and Analysis.

Bitola

1) ICT • BSC Bitola together with Municipality Bitola signed a contract in 2009 combining payment of

utility bills (water, trash, etc.) into one bill. Project is finished and the software was officially

presented in September 2010. The software was given to the municipality to implement in

the public enterprises.

• Document Management System (DMS) software has been developed for BSC Bitola. DMS

include: identification, storage (storage in electronic form), monitoring, reference, version

control of documents and efficient archiving in electronic form.


• 35 partner institution staff members were trained on trainings organized by SPARK or BSC

Bitola. Example of some conferences and trainings:

Excel – Advance knowledge and skills for using Microsoft Excel techniques in every day work

Marketing Communications – how to integrate marketing communications in overall

marketing strategies


SME Access of Financing, Mavrovo, Macedonia

Leading auditor for quality systems management: ISO standardisation

How to reach EU funds, Zenica, BiH

Incubator conference, Seville, Spain

Business Incubator Study tour -‐ Poland, 2008

Training of trainers, Bitola, 2009 + continuous CEFE practice for the BSC Bitola staff

Auditor/Leading auditor for quality systems management by ISO 9001:2008, Bitola, 2010

Management for project managers, Bitola, 2010

Zenica

1) ICT

• Business Service Center (BSC) -‐ Ze-‐Do (Zenica-‐Doboj) canton interactive webpage. September

2008 – Project financed development of interactive webpage including database for

approximately 400 companies, BSC Ze-‐Do canton clients

• UNZE University integrated software – from registering students to issuance of diploma

supplement (Bologna process, ECTS, etc.) May 2010 – SPARK financed 50% of total cost for

development of software


• ZEDA participation on ZEPS Fair, September 2007

• University Techno-‐Educa conference, September 2007

• April 2008 – BSC Zenica organized training for partners from all BSCs on “EU funding

opportunities”

• EUA certification audit to University. June 2009 – Project financed EUA visit and assessment

in University of Zenica. In total all assessment passed university management, counting 16

persons

• Incubator assistant BSC Zenica and 2 ZEDA staff were on study tour to Poland organized by

Ms. June Lavelle

• Study visit to Sevile,Spain, Incubator assistant BSC Zenica and 1 ZEDA staff were on the

conference in incubation and technology parks in Seville, Spain

Kragujevac

1) ICT


• IT networking equipment for the Municipality of Kragujevac -‐ which helped increase the level

of efficiency of the city administration (inter-‐department) and speed up the process of service

provision to the citizens and businesses

• REDASP was supported by the Project through achieving ISO 9001 QMS into their business

operations

• ’’Web Portal’’ project -‐ submitted by Regional Chamber of Commerce Kragujevac which

supports and promotes business operations of SMEs in central Serbia

• In partnership with the Associations of Entrepreneurs “Sloga” and “Šumadija“, published

Entrepreneurial Bulletin for several years, which, in addition to providing information to the

business community in the city, promoted ideas and culture of entrepreneurship in central

Serbia

2) Capacity Building Training

74 representatives of the Partner organizations have completed various trainings, seminars, courses.

Trainings count as:

• EU Funds Management – held in Zenica and Kragujevac

• Access to SME Financing – Challenges and Opportunities – Mavrovo, Macedonia

• Project Cycle Management – held in Kragujevac

• GIS – geographical information system training – held in Kragujevac

• Project proposal writing according to EU standards – held in Kragujevac

• BSC staff capacity trainings -‐ financial management and financial analysis and reporting, life

cycle of SMEs, human resource management, innovation management, while the dominant

were topics related to: project development, EU funded project proposal writing, IPA funds,

EU fundraising, financial management of EU funded projects, project cycle management


Local Partner clientele satisfaction and efficiency rates recorded through the Project

Derived from the “Impact Report – Capacity Building”, Sarah Ringler (2010) extrapolated through

surveys and interviews the following “An executive summary of the combined impact of all the

capacity building measures provided by the four BSCs shows that the SPARK programme and the

work of the BSCs was very successful: All trainings/study visits were rated to be effective or very

effective. Only very few trainings failed to completely satisfy the local Partner. BSC Kragujevac

increased their clients’ satisfaction by 47.55% on average and further raised the Municipality of

Kragujevac’s efficiency by 10%. BSC Bitola reached an average raise of clients’ satisfaction by 55.2%.

Unfortunately, it was not possible to determine an impact in terms of efficiency yet as the only ICT

project was not fully implemented at the time of research. The combined impact of all capacity

building measures by BSC Zenica was the raising of efficiency by 11.63% at the University of Zenica

and the Regional Business Centre while the average clientele satisfaction was 78.32%. The aggregated

impact by BSC Bar in the area of capacity building was at least 39.71% for efficiency at the

Municipality of Bar and the Cultural Centre Bar and an average impact of 77.5% on the satisfaction of

all local partner clients. This corresponds to an accumulated average rise in clientele satisfaction of

66.64% and an average rise in efficiency of 20.45% at the affected institutions.”20

Over the 4 years of the Project, a very ambitious 40% (10% annually) raise in client satisfaction was

projected which is exceeded quite handily. Although the SEBSN Project cannot take this as a total

direct result of Capacity Building efforts, it does reinforce SPARK’s approach in the manner and type

of ICT and trainings that were delivered to the local Partners.

Sustainability of the Business Start-‐up Centers and Incubators

End result of the SEBSN Project was the sustainability of the BSCs/BIs as financially stable institutions.

As noted in Result 1 (Poverty Reduction), the BSC/BIs became independent late 2009 and in 2010

from SPARK, managing Project activities themselves with only monitoring and technical assistance by

SPARK.

Projects and commercial income earned to date in 2009 and 2010 has served the BSCs/BIs to extend

operations into 2011 & 2012 after the NLMFA assistance has ceased. Income streams are noted

below:

20 Impact Study – Capacity Building, Sarah Ringler, December 2010, page 11


Business Start-‐up Center

Amount Description of financing

Bitola, Macedonia $1.3 million USAID donor – extension of BSC activities to rural areas, years 2011-‐2013

205,000 euro EU-‐RSEDP II Project – extension of BSC activities in central Serbia, years 2011-‐2012. Project awarded on December 31st, 2010

250,000 euro DEKRA Project (EU donor) – vocational employment agency engaging BSC Kragujevac as business skills training agency in central Serbia for years 2011-‐2012.

Kragujevac, Serbia

60,0000 euro BSC income earned to date in commercial trainings in savings for use in 2011

34,000 euro Euro Info and Innovation Center (EIIC), years 2011-‐2012 30,000 euro Incubation space – 1,100 m2 comprising 34 units for

tenants, to be earned on annual basis

Bar, Montenegro

50,000 euro BSC income earned to date in training for use in 2011 Zenica, Bosnia 22,000 euro BSC income earned to date in trainings/events and

commercial activities for use in 2011

Noted in the chart above, BSCs/BIs in Bitola, Kragujevac and Bar have sufficient income flows to

sustain themselves for years 2011 and 2012. BSC Zenica has reduced operations to one person

(Director) until new funds are attained. BSC Zenica additionally is housed in UNZE premises, the

Rector of UNZE has noted that the BSC is still part of University plans to continue entrepreneurship to

students. BSC Zenica Director, Dr. Nino Serdarevic, also is working with volunteers to obligate

entrepreneurship activities in the University, moreover, BSC Zenica is directly working with UNZE’s

“Center for Entrepreneurship”. Although reduced in activities and staff, BSC Zenica is still functional

in the Zenica community.

In the mid-‐term external evaluation report Gomez notes “The project needs to develop a

Sustainability Plan (or Business Plan) for each BSC. Although each may be different it should include a

form of public-‐private partnership business model involving the partners. Financial sustainability

obviously depends on local institutions and their willingness to allocate budgets for activities. The BSC

should develop a portfolio of products and services that it can use to generate income from

businesses and/or donors. Inclusion of the business incubator in any sustainability plan seems

natural. Partisan political interference is a threat to BSC sustainability.”21 In February-‐March 2009,

June Lavelle, Business Incubator and organizational consultant, was stationed in-‐house to all the

BSC/BI locations in SEE based on the suggestion of Alberto Gomez. Ms. Lavelle developed extensive

sustainability strategies examining potential income streams and reviewing capacities of the BSC/BI

staff. From this report, the BSC/BI developed their own sustainability strategies, presented at a BSC

Directors meeting in May 2009 (Kragujevac, Serbia). SPARK approved these sustainability strategies

which outlined equipment and BSC/BI staff capacity building tools required to achieve sustainability

21 Mid-term External Evaluation Report, Alberto Gomez, December 2008, page 21


after 2010. Technical inputs for the BSCs/BIs to support themselves after 2010: commercial printing

equipment, simultaneous translation equipment, computers (to hold CISCO trainings), “clouding”

servers to back-‐up hard-‐drives of businesses on a commercial basis and similar. Non-‐technical

(trainings): ISO/HACCP certification, PCM trainings, trainings to deliver various business modules, EU

project development trainings, financial management trainings, business consulting tools and basics

and a multitude of numerous trainings to work commercially and on a project cycle basis. The results

of technical/non-‐technical capacity building needs continuing BSCs/BIs after 2010 is a testament to

properly developed strategies and realization.


Summary Results 1-‐2 1. Was it in time, according to planning (check work plan/ timeline above)?

• All activities regarding Partner Capacity Building were delivered during the project timeframe.


• All Capacity Building activities were carried out completely, exceeding targeted numbers and

impact levels.

• The local Partner turnover/overhead rate of 3% annually was not originally determined,

therefore a baseline was not established. The consequence was a secondary method

measuring efficiency/satisfaction rates employed.22 It can comfortably be noted that, on

average, 3% turnover/overhead rates of local Partners were exceeded during the life of the

Project taking into account this is a very low annual increase established by SPARK in the MFS

proposal submitted in 2006.


• The process of selecting trainings for the local Partners was demand driven. Twice, in two-‐

year intervals, questionnaires were completed by the Partners and trainings/one-‐on-‐one

consulting arranged by the BSC or SPARK. This was a satisfactory approach to this component,

but became apparent in the last year of the Project that an outside consultant should have

also visited the Partners in-‐house for 2-‐3 days to evaluate their management procedures,

processes and level of capacity. A complete diagnostic report would have then been

compiled for all 4 BSCs and group/individual trainings initiated.

• Greater attention needs to be considered when awarding similar projects in the future and

the selection of local Partners. In some instances, parallel structures to the BSCs and BIs

already exist or are similar in function. RDAs especially see the BSCs/BIs as a direct threat to

their existence and in some instances became obstructive to the activities of the BSCs. This is

a true problem when the RDA is being supported (primarily) by the local municipality and

support the RDA’s interest first.

4. Recommendations:

• Engage qualified diagnostic consultants to visit Partners at their place of business to ascertain

level of capacity and detail trainings to overcome their short-‐comings.

• Greater awareness of local Partner selection when awarding similar projects to avoid

competition and interference (RDA reference).

• Due to the level of Project start-‐up and implementation, the BSCs/SPARK staff were

encumbered with in years 2007 and 2008, it was not possible to adequately develop the staff

22 Impact Study – Capacity Building, Sarah Ringler, December 2010


capacities nor sustainability strategies of the BSCs/BIs in the first two years of the Project.

This unfortunately led to later developed staff capacity training and instruments needed for

income generation. Although not a large impediment to the sustainability of the BSCs/BIs,

the sustainability strategies and training should have started in earnest one-‐year after the

BSCs were established (i.e., summer 2008). Recommendation: commercialization activities

should take place early in the Project timeline. In order to achieve this, either greater

number of staff are engaged to enable the workload to allow for development of commercial

skills or the Project activities/targets are reduced. Additionally, staff with commercial skills

should be hired versus junior staff (inexperienced staff). To engage commercially

experienced staff, proper incentives would have to be offered, although greater sustainability

assured.


C -‐ POLICY MAKING -‐ Policy Making for Economic Development Result 1-‐5:

Policy Making component of the SEBSN Project essentially dealt with events and studies which were

designed and presented to influence the wider audience, most ultimately, key decision makers in the

particular BSC country. Policy Making efforts have included commissioning and publication of studies

on business barriers and obstacle’s subjects most affecting the BSC country and which falls into the

relative working area of the BSC staff to bring to a wider audience for awareness and discussion. The

BSCs and SPARK have held a number of conferences, seminars and workshops on researched business

barriers and obstacles subjects and/or to directly lobby governments on behalf of institutions or in

direct cooperation with Partner member institutions. Towards this end, the BSCs were responsible to

publish annual reports on the SME sector with particular emphasis on the removal of obstacles to

registering, starting up or those everyday problems affecting existing businesses, whether regulatory

or administrative.

To that end, the “Impact Report – Policy Making” (Sarah Ringler, December 2010) discovered that

policies on business barriers and obstacles were not greatly changed by any of the BSCs and that they

were not functionally equipped nor located in decision making centers that required them to lobby

policy makers on a frequent basis. It also was found that local Partners were more concerned with

local SME issues and did not bond with the BSCs to lobby policy makers to an extent that is needed to

reduce or eliminate barriers/obstacles. In the SEBSN mid-‐term external evaluation report, Gomez

notes in December 2008 “The objectives (Policy Making) are relevant but too ambitious, very difficult

to achieve in the project timeframe, and almost impossible to measure and attribute results to the

project. BSC staff has little concern for Component 3, indicating that it could be a project in and of

itself. More realizable objectives should be considered.”23 Once again in the external evaluation

report (Maclean-‐Skinner, December 2010) “As for Policy Making, this activity should be either

reduced to a minimum level or eliminated. Policy Making is a project in itself that requires specific

action and great amounts of attention and energy to effectively reduce business barriers and

obstacles.”24

In the final External Evaluation Report (Maclean-‐Skinner) and Policy Making Impact Study (Ringler),

lesser success with obstacles removal was achieved in Kragujevac, Bitola while Zenica and Bar did



reportedly achieve several municipal level obstacles removal and change in policy. The other BSCs

did report reduction in barriers/obstacles and impact in policy making, but this has been left to

conjecture. Hard obstacle removal and policy making in all 4 BSCs has been primarily been relegated

to following governmental policies of identified barriers and obstacles (e.g., access to finance, quality

management certification, business start-‐up trainings for youth, introduction of entrepreneurship

into university curricula, etc.) It can reasonably be advanced that modest progress has been made in

this area due to shifting of priorities to reach Poverty Reduction (creation of SMEs and jobs), which

encumbered 86%, Capacity Building 5% and Policy Making 9% of all Project activities. Secondly, the

BCSs did not have the experience nor reputation till late in the Project to tackle/lobby reduction of

business barriers and obstacles in a successful manner. Local Partner structures were located in

provincial cities without effective lobbying reputations in policy making centers. In retrospect, Policy

Making should have been approached with a reduced emphasis in the Project. This issue will be

addressed in the Summary Results section of this component.

To that end, possible discernable Policy Making results by BSC Zenica resulted in 2 reductions of

business barriers and obstacles, one more by BSC Bar. Only one Policy Making action was recorded

by BSC Zenica to affect a policy on construction permitting in FBiH. For more clarification on these

actions, please go to page 38.

Results 1/2. Annual local and regional “Status Reports on Local SME sector” The BSCs published a number of reports in the four years of the Project that were leveraged to raise

awareness on a more general SME situation or on particular business barriers and obstacles. In total,

approximately 10,600 studies were collectively produced (Project target -‐ 12,000 studies). Lesser

quantities of studies were produced due to Project start-‐up activities in 2007 and heavy

concentration on Poverty Reduction activities. First studies were not produced by the BSCs until

2008, thereby losing one-‐year on the Project implementation time-‐line. Secondly, significant

numbers of studies have been downloaded from BSCs’ websites, which may close the gap between

realized and target.

Studies produced by the BSCs (broken down by individual location):

Bar

Studies on Policy Making:

• Local SME Scan on Business Barriers was published with a distribution of 600 copies (2008)

24 External Evaluation Report, Maclean-‐Skinner, December 2010, page 73


• Study report ‘Successful Experiences in Removing Obstacles for SMEs in the Western Balkans’

distribution of 600 copies (2009)

• Study report ’Analysis of the Labour Market in Bar, Budva and Ulcinj’ (2010) with a

distribution of 800 copies

In total 1,600 copies have been distributed which would not meet the targeted 2,600 for the duration

of the Project. However, this is not a contentious issue as the population of Bar would probably not

justify the printing and distribution of so many.

Bitola

BSC Bitola published 3 reports in these four years of the project.

• In 2008, BSC Bitola published “Status and Obstacles faced by the Local SME Sector”, published

in 500 copies

• In 2010 (for 2009 year) the “Local Labour Market Study” was published in 1500 copies

• and “Innovativeness Study”, published in 500 copies, 2010

In total, 2,500 copies of reports were distributed in the period 2008-‐2010. This number would not

reflect sum copies downloaded from the BSC Bitola website.

Zenica

BSC Zenica developed background, tendering and managed conduction of three reports in total:

• Local SME Scan report 2007, conducted by partner REZ (Regional Economic development

agency Zenica) delivered in 2008, that involved research among 200 SMEs and evaluating

obstacles (400 copies)

• SME status report 2008 (delivered in late 2009), conducted by four separately engaged

consultants in four areas on specific obstacles, defining stakeholders and activities towards

removing obstacles (500 copies)

• SME status report 2009 (delivered late 2010), conducted by partner REZ, presenting best

practices in the region and success stories in removing obstacles (600 copies)

In total 1,700 hardcopies and 1,000 electronic versions (CDs), 2,700 total copies were prepared and

disseminated.

Kragujevac

4 SME reports were produced and distributed during the course of the project, as following:

• ‘SME Sector Status Report – Status of and Obstacles Faced by Local SME Sector in Kragujevac

and Sumadija District’, 2008 (600 copies printed)


• ‘Development of the SME Automotive Supplier Network in Central Serbia’. Published by

Regional Chamber of Commerce in Kragujevac, November 2009. (600 copies printed)

• Report on SME Conference ‘EU Accession possibilities for SME sector Development in SEE’

May 2009 (600 copies printed)

• ‘Local Labour Market in Kragujevac: Current Situation and Potentials’. Published by BSC

Kragujevac, 2010 (600 copies printed)

A total of 2,400 copies were printed and distributed, this does not count electronic downloads from

the BSC Kragujevac website.

Regional SME Studies and Conferences financed by the Project

Investment Readiness Report and Global Entrepreneurship Conference (November 2009)

1,000 copies of the study titled “Bridging the Gap” access to risk financing for early stage SMEs in

Southeast Europe. This study was also presented at the regional conference Global Entrepreneurship

Week sponsored by the YES Incubator in Skopje, Macedonia (November 2009). The conference was

also partially financed through the SEBSN Project.

“Reports on the Best Practices in Removing SME Obstacles in the SEE Region and Trade Barriers

with the EU” 600 copies, compiled by Alberto Gomez. This study was written and delivered at the

Regional Conference “Successful experiences in surmounting the barriers in the work of small and

medium size enterprises in the region of Western Balkans”, Bar, Montenegro (December 2008).

Result 3. Policy Making in The Netherlands

Additional to the policy making events that were organised by the BSCs, SPARK also organised (or co-‐

organised) and (primarily/partially) financed 4 policy making events during the last 4 years (target 3 in

The Netherlands for years 2008, 2009 & 2010). These list as:

1. IT Outsourcing to the Balkans (2008)

On 20 November 2008, SPARK organised an informational evening for 25 Dutch ICT companies

interested in outsourcing to the Balkans. The objective of this event was to provide the attending

company representatives with insight into the opportunities and pitfalls when outsourcing to the

Balkans, thereby stimulating entrepreneurs to make use of capacities and potentials residing in South

East Europe.


2. eD2009 Conference (2009) On 29 and 30 October 2009, Spark organised the international

Conference titled “Do entrepreneurs need support? The Myths and Merits of Entrepreneurship

Education and Business Creation” together with Tridos Facet and IN Holland University of Applied

Sciences. During the two-‐day conference entrepreneurship development programmes in different

parts of the world were discussed among 160 participants from 33 countries from across Europe,

Africa and the Middle East, and further, the merits for promoting sustainable development and

methods for reducing business barriers and obstacles analysed. Although concrete political

adjustments did not follow from this conference, heightened awareness of the needed changes on an

international and national level can be attributed.

3. Growing SMEs Forum 2010

Together with the BiD Network SPARK enabled the Conference “Growing SMEs: It's Time to Invest,”

which took place on 02 June 2010 and was funded 50% by Spark. A total of 65 entrepreneurs from 18

developing countries were given the opportunity to promote their businesses in front of

approximately 500 visitors in The Hague, among who were at least 100 interested potential investors.

Although concrete political adjustments did not follow from this conference, heightened awareness

of the needed changes on an international and national level can be attributed.

4. IT Links around the World (2010)

On 12 October 2010 Spark co-‐sponsored and organised an event for the informal information sharing

among IT companies. This was in cooperation the Centre for the Promotion of Imports from

Developing Countries (CBI). Approximately 80 representatives of Dutch IT companies came to the

meeting that was held at the Restaurant Dauphine in Amsterdam to give, receive and exchange

experiences and information concerning the practice of outsourcing to developing countries and

existing business barriers and obstacles and strategies for reducing these. Thus, the event

contributed toward the satisfaction of partner SMEs by increasing participants understanding of the

range of possibilities when considering outsourcing.

Result 4. Annual Regional Conference on SME & Private Sector Development and SME Fair

Over the life of the Project, numerous conferences and SME fairs were either sponsored by the

BSCs/SPARK, co-‐sponsored or attended with entrance/participation fees paid by the Project for the

presenting SMEs (in the case of SME fairs). A total of 1,518 participants attended SME conferences,

373 Project supported businesses exhibited at SME Fairs locally/nationally/regionally (target 620

participants at SME conferences, 240 SMEs exhibiting in fairs). These conferences and SME fairs

count as:


• Conference/job fair held for SMEs in Zenica. This event was co-‐organized with project partner

UNZE (2007)

• Forum “Dialogue between the public and the private sector, how to acquire IPA and CIP

funds”, Bitola (2008)

• “Entrepreneurial Education – Fostering Entrepreneurial Mindsets”, hosted by the University

“St. Kliment Ohridski”-‐ Ohrid, Macedonia – (May 2008)

• Forum “Dialogue between the public and the private sector”, Bitola (2008)

• Regional Conference “Successful experiences in the surmounting of barriers in the work of

small and medium size enterprises in the region of Western Balkans”, Bar, Montenegro

(2008)

• Business Baza Fair, Belgrade, Serbia (2008)

• Business Development Conference 2008, plenary session and 3 workshops on removing

obstacles (registration process, issuance of construction permits and network of incubators),

Zenica, BiH (2008)

• Business Baza Fair, Belgrade, Serbia (2009)

• ZEP’s SME Fair, Zenica, BiH (2009)

• BSC Kragujevac organized international conference `` EU Accession – opportunities for SME

sector development in Southeast Europe``, (May 2009)

• SME Fair, Kragujevac, Serbia, (May 2009)

• Business Development Conference 2009, research promotion in entrepreneurship area,

Zenica, BiH (2009)

• ZEP’s 2009 Fair, Zenica, BiH (2009)

• SME Adriatic Fair, Budva, Montenegro (2009)

• Business Development Conference 2010, fully taken over by Faculty of Economics and

partially supported by BSC Zenica staff, Zenica, BiH (2010)

• Business Baza, Belgrade, Serbia (2010)

• Regional conference "Business Incubators-‐EU lessons" in Bar, Montenegro (2010)

• Job Fair/event was organized in Monrovia, Liberia (December 2010)

Result 5. Meetings with relevant EU institutions

Problems and issues with business barriers and obstacles are not only confined to SEE, many

problems relate to the EU, i.e., trade barriers, administrative inconsistencies, certification issues,

entry quotas, freedom of movement of goods and service and a host of other issues that plague SEE

countries. In many instances, EU institutions are unaware or do not understand the plight of

entrepreneurs attempting to do business with EU countries. It is to this end that the BSCs in


delegation with local Partners traveled to the EU and met with policy makers in Brussels or other

policy influencing centers. This has also manifested itself by BSCs/Partners meeting with and

lobbying EU institutions in their own countries. Policy making meetings with EU institutions was

nearly non-‐existent till late year four owing to a build-‐up of BSC reputations and body of material to

enter EU institutions with confidence. A total of 17 meetings were recorded by the BSCs/SPARK for

years 2007-‐2010 (target 4 policy making meetings). Listed are efforts by BSCs and local Partners to

heighten awareness of business barriers and obstacles in SEE:

Bar

BSC Bar is recognized as an important center for the south of Montenegro, satellite office for the

Enterprise Europe Network (EEN), the most influential network of institutions for the support to SMEs

in the EU. Sponsored through that program Bar has participated in various EU events: Policy meeting

in Montenegrin Chamber of Commerce regarding the barriers to SMEs and industrial parks (2009),

Montenegrin-‐wide conference on obstacles in ISO/HACCP policies in Montenegro (2009), conference

event in Budva on Business Success through Sustainability (2010); Policy meeting with institutions in

Brussels and SMEs from EU organized during Entrepreneurship Week in Brussels (2009 and 2010).

Bitola

In 2010, 4 policy meetings were organized in Brussels October 2010 with: EUROCHAMBERS,

Representatives from the Macedonian Embassy, lobbying organization -‐ Business Europe and The

HUB Brussels. The conclusions of these meetings were that as one entity it is very difficult to remove

some barriers. There has to be a unified approach to lobby for removal of problematic barriers. The

process for lobbying and removing barriers is long and it not measurable in a short period.

Zenica

BSC Zenica nor its local Partners lobbied EU institutions, except informal meetings with EU

institutions in Sarajevo. BSC Zenica did have 3 meetings with USAID’s SPIRA Project in 2008 and one

meeting later in 2010 relating to participation of BSC Zenica to lobby the Municipality of Zenica and

Ze-‐Do Canton officials to change FBiH’s Craft’s law registration scheme and on conducting and

implementing an action plan on enforcing construction permits issuance (policy making).

Kragujevac

Following meetings were organized September 2010 by BSC Kragujevac together with the Kragujevac

Chamber of Commerce representatives, visiting Brussels and Paris:


• UEAPME -‐ European Association of Crafts, Small and Medium-‐Sized Enterprises, Brussels -‐ Mr.

Luc Hendrickx, Director Enterprise Policy and External Relations

• EESC -‐ European Economic and Social Committee, Brussels -‐ Mr. Henri Malosse, President of

the Group of the Employers EESC and Ms. Madi Sharma, member of the Committee

• Eurochambers, Brussels -‐ meeting with Mr. Dirk Vantyghem, Director of International Affairs

• Meeting with Ms. Borka Tomic, City of Kragujevac official lobbyist in Brussels

• FIEV – The French Automotive Equipment Industries Association -‐ meeting with Mr. Bernard

Descamps, International Market Development Director

• Meeting with Ms. Ivana Stankovic, Economic Attaché in the Embassy of Serbia in France

• Reception at the residence of Serbian Ambassador in France, Mr. Dusan Batakovic

• OECD – Investment Compact for South East Europe – Mr. Alan Paic, Project Manager and Mr.

Andrea Beltramello, Policy Analyst

• OECD – Division of SMEs & Entrepreneurship – Centre for Entrepreneurship, SMEs and Local

Development -‐ meeting with Ms. Marie-‐Florence Estime, Deputy Director, Ms. Lucia

Cusmano, Senior Economist and Ms. Lucy Clark, Coordinator of Partners Network

• Meeting with Mr. Testud, Mayor of Suresnes, France, and Ms. Valerie Gaude da Silva, Head of

Department for Local Economic Development

• Visit to the Incubator in Suresnes -‐ Meeting with Ms. Martine Ranouil, Executive Director, Mr.

Joel-‐Louis Colon, Vice President and Ms. Sylvie Gobert, Director for Economic Development

The meetings held by BSC Kragujevac and Regional Chamber of Commerce Kragujevac focused on the

eliminating administrative and regulatory barriers between Serbia and the EU regarding the

automotive industry. Zastava (former producer of the Yugo) is now owned by Fiat and is the largest

employer in Kragujevac and Central Serbia. The economy of Kragujevac essentially revolves around

the Fiat automotive company and ancillary parts supplier companies, reduction of barriers and

obstacles relating to the Serbian automotive industry with the EU will allow for a greater shipment of

assembled cars to the EU and provide stimulus for the beleaguered Kragujevac economy that has

worked at a fraction of its capacity since 1991.

Annual % increase in satisfaction rate with Partner policies among SMEs

Bundled into the Impact Study – Policy Making, Sarah Ringler (December 2010), the Policy Making

impact evaluator was not able to extrapolate a annual 5% (quantitative) annual increase in

satisfaction rates with Partner policies among SMEs in the four SEBSN BSC locations due to a non-‐

established baseline at the beginning of the Project. Therefore, her assessment is based on

evaluating SMEs satisfaction through micro-‐credits disbursed through the BSCs and ISO/HACCP


certification with the Project and a qualitative assessment. Overall, there has been great satisfaction

with Partner policies among SMEs, which extrapolates (qualitatively) that there has been a 15%

increase with Partner policies over 2008, 2009 & 2010. Brief comments from Ringler study per BSC:

Kragujevac

The analysis of the telephone surveys showed that virtually all (100%) SMEs that profited from a loan

were satisfied or very satisfied with the Project. Those that did not participate (four people, i.e. 17%)

did so for personal reasons, because the bank did not grant them the money requested or because

their business dissolved in the meantime. For evaluating the satisfaction of partner SMEs (15

ISO/HACCP certified companies were sampled of SMEs for each year) were randomly contacted. The

analysis of the telephone survey showed that also here virtually all (100%) SMEs that profited from

ISO certification were satisfied or very satisfied with the project. 33% of SMEs experienced an

increase in production and exports, whereas one company reported production to have gone up by

200% and another that exports rose by 50%. One company, i.e. 6%, notes only slight increase in

production, while another one reported to have experienced a decrease in production with the

remark that the economic crisis was the reason for bad business. 20% of SMEs experienced no

change in production after ISO certification.

Bitola

The satisfaction of partner SMEs is very high as they do not have to – and in many cases simply could

not – rely on regular loans from banks, which demand the paying of a very high interest rate. On

average, 2.4 new people have been employed and sales have increased by 5.6 %. Although the

satisfaction of partner SMEs is extremely high in Bitola, the ISO certification has not led to an impact

in terms of greater efficiency or increase in production or exports. One company owner attributed

this to the lacking priority of national customers for quality packaging and food safety, but also to the

economic crisis, which reportedly would have hit the company harder if ISO had not been

implemented. Nonetheless, the SME is very grateful for having had the chance to implement ISO as it

is for the time being regarded as a gift to their faithful customers and expected to yield higher profits

in the near future.

Zenica

Virtually all local partners stressed that the (BSC Zenica) SME Reports and following conferences had

been a great success for the city of Zenica as the reports had been of excellent quality and the

conferences were very well structured, relevant to local and international SMEs and further brought

many potential business partners to Zenica. Thus, many SMEs and business persons were given the


chance to network among each other, exchange contact information and learn about business

practices and opportunities on the national and international level. University management reported

to find the SME Reports very useful, especially because they were in English. Most importantly, until

the BSC’s action no such other reports (highlighting business barriers and obstacles) existed to date.

It is the first of its kind that gives a detailed overview of existing business barriers and obstacles and

what guidelines SMEs have to follow to circumvent these. In conclusion it should be stressed that the

SME Reports and the Business Development Conferences were able to strongly raise the satisfaction

of partner SMEs.

Bar

The satisfaction of Partner SMEs can potentially be very high. However, it is too early in time to say

anything about this with certainty as the Project has not been fully implemented yet (realization of

conferences/seminars/workshops on business barriers and obstacles and manner of addressing SME

issues in general). However, persons who have participated in the roundtable discussions (on

reduction of business barriers and obstacles) have been very optimistic and enthusiastic about the

Project. Due to the Port of Bar (largest employer in Bar) not playing the role anymore it used to in

previous times, many people are unemployed and space at the port is rendered unused.

Number of adjusted national SME policies and % of identified obstacles removed

SPARK under the number of adjusted national policies and % of identified obstacles removed results

has approached in the second-‐half of the Project rather as a means for support to implementing

particular national and international policies on business barriers and obstacles, rather than

provoking such polices. To that end, SPARK and the BSCs have compiled policy

papers/studies/brochures on business barriers and obstacles, held annual conferences

(nationally/regionally/internationally), participated in workshops, seminars, focus groups, study tours

discussing issues that are affecting SMEs. Due to intangibility, and near impossibility, of measuring

adjusted national SME policies and % of identified obstacles removed, SPARK and the BSCs are

reluctant to take credit for any affect on this level that may have coincidentally occurred. In post-‐

evaluation debriefings with external evaluators (Gomez, mid-‐term external evaluation mission, 2008,

and Maclean-‐Skinner, final external evaluation mission, 2010), both noted that it is nearly impossible

to measure adjusted business barriers and obstacles – “This small budget for this component does

not match the magnitude of the objectives. Some activities, such as the SME obstacles reports, are

being implemented; others, such as the policy making and lobbying conferences, are not. Granted,

these activities should take place after the knowledge is acquired, so perhaps this excuses the lack of

activity. A bigger issue is that perhaps the objectives of this component should be changed; in this


case, leadership from SPARK management is necessary” (Gomez 2008)25. Later in 2010, “As for Policy

Making, this activity should be either reduced to a minimum level or eliminated. Policy Making is a

project in itself that requires specific action and great amounts of attention and energy to effectively

reduce business barriers and obstacles.” (Maclean-‐Skinner 2010)26 Therefore, policy making projects

should be rather understood as means of support for implementing certain national and international

policies in place, rather than provoking a change of such policies. This is for example is the case with

ISO and HACCP, where the BSCs supported SMEs financially for being able to go through the costly

process of certification27. The BSCs were also limited in their potential to provoke policies not being

situated in capitals of their respective country, but in provincial cities and towns and with local

Partners that did not have the reputation to influence to reach the ears of legislators or ministries.

Recognising this during the Project, SPARK itself has shifted its focus away from policy making toward

poverty reduction (SME creation/support and job creation) and appropriately allocated budgets.

Within the entire SEBSN Project budget, 9% is allocated to policy making activities attributed to

reduction of business barriers and obstacles. A total of 3 national policies for years 2008, 2009 &

2010 were to be affected – one national policy affectation can be reasonably accredited to the SEBSN

Project. Regarding the % of identified obstacles removed, according to the monitoring and

evaluation targets set by SPARK “End of 2008: 20% of national-‐level obstacles/10% of international

obstacles; end of 2009: 35% (of national obstacles)/20% (of international obstacles); end of 2010:

50% (of national obstacles)/25% (of international obstacles) -‐ removed.” In this instance, BSC Zenica

once again enacted the Craft’s registration law in FBiH on a national level. SPARK did not achieve

removal of barriers on an international level but sought to highlight barriers and obstacles through

conferences/seminars/workshops in SEE and in The Netherlands (listed on page 32). The SEBSN

Project in the course of implementation followed national government identified barriers and

obstacles that were targeted for removal or that are problems for SMEs to operate.

That aside, there were 3 efforts by BSCs/SPARK on reducing business barriers and obstacles, first a

new instrument in access to finance had been introduced by BSC Zenica’s lobbying the Municipality

of Laktasi (BiH) municipality. This involved the Municipality of Laktasi allocating micro-‐credits for

start-‐up businesses as a tool of economic development. Second, in 2009 BSC (Zenica) assisted on a

USAID policy making project involved in removing one obstacle and assisting definition of one new

policy. Through USAID’s “Streamlining Permits and Inspection Regimes Activity (SPIRA)” project,

reportedly helped reduce the obstacle influencing changes in BiH entity law on craft’s shops in

25 Mid-‐term External Evaluation Report, Alberto Gomez, December 2008, page 14 26 Maclean-‐Skinner “Combined External Evaluation of three SPARK held Projects for Year 2009, Final Report”, July and December 2010, page 73 27 Impact Study – Policy Making, Sarah Ringler, December 2010, page 4


Federation of Bosnia-‐Herzegovina (FBIH), removing minimum technical requirements out of

registration process and speeding up the process by approximately 20 days. Third, BSC Bar assisted

International Finance Corporation (IFC) to conduct a study on review of communal taxes in

Montenegro. This resulted in list of differentiated taxes versus communal expenses. It was realized

that some communal taxes were not based on any laws and were done away with.

In terms of Policy Making, only one policy was affected, BSC Zenica was part of a municipal working

group in connection with USAID’s SPIRA project and Business Service Centre Zenica-‐Doboj (Ze-‐Do)

Canton, on conducting and implementing an action plan on enforcing construction permits issuance.


Summary Results 1-‐5

1. Was it in time, according to planning (check work plan/ timeline)?

• The activities occured and budget spent for these activities. Over the course of 2009 and

2010, Policy Making component budget amounts were shifted to Poverty Reduction activities

in order to create new companies and open new work spaces.


• Partly, reduction of business barriers and obstacles. 1 policy was affected on a national level

and no recorded affectation on an international level. The desired target and impact of policy

making only served to highlight issues of business barriers and obstacles in SEE.

• Partly SME studies were compiled by the BSCs/SPARK. This was owing to the later

establishment of the BSCs, consequently, the first studies were not delivered till 2008. As a

result, only a 3 study average per BSC was delivered. Additionally, budget lines were

adequate for only 3 studies.

• Establishment of Partner baselines at the beginning of the Project. Due to overwhelming

level of BSC office set-‐up and establishment, implementation and emphasis on Poverty

Reduction and Capacity Building components, certain baselines were not established.


• Due to the excessive amount of activities under the SEBSN Project, a great amount of time

was given to the Poverty Reduction component (86% of the budget). In turn, this led to a

triage effect whereby most pressing activities were completed, Policy Making took number

three in the component implementation hierarchy. In order to achieve results on Policy

Making, greater number of staff must be allocated to Policy Making and approached as a

project in itself.

• BSC/BIs in the Project were start-‐up institutions. It took several years of reputation building

and achieving targets in the wider community before the BSCs/BIs were taken as serious

players with policy makers. Unfortunately, this was nearing the end of the Project.

4. Recommendations:

• Approach Policy Making in future projects as a ‘stand alone’ activity and dedicated staff.

• Greater selection and inclusion of local Partners that are actually interested in Policy Making

and that actually can achieve results hand in hand with the BSC/BIs.

• Establish baselines at the onset of the Project as a priority, cautiously move forward until all

baselines have been measured and recorded.

• Start early in the Project with policy making activities and select 3-‐5 business barriers and

obstacles per country that are potentially achievable to attain for reduction or policy change


and that which fits the missions of the BSCs and local Partners. Policy making on a municipal

level might make more sense considering these are local/regional projects not working

country-‐wide.


Section 3: Project and management performance

SPARK Management

Yannick du Pont (Director, SPARK) January 2007 – December 2010; Michel Richter (Co-‐Director,

SPARK) January 2007 – December 2010, both led and monitored the Project for the 4 years and set up

pilot BSCs in Monrovia and OPT. The Project sustained several staff changes during its Project

implementation from 2007-‐2010. Erik Plaisier (Senior Project Manager) January 2007 – September

2008; Philip Hostert (Senior Project Manager) April 2007 – December 2010; Richard van Hoolwerff

(Project Manager Liberia) April 2010 – December 2010; Gaston Schmitz (Project Officer) January 2007

– April 2008; Marieke Pluk (Project Officer) January 2007 – September 2010; Tobias Borkert (Project

Officer) January 2007 – October 2008.

Verica Koracevic (local Project Officer, Belgrade, Serbia) worked part-‐time from November 2008 –

December 2010; and Aleksandra Milenkovic-‐Bukumirovic (Project Officer, Belgrade, Serbia) worked

from time to time at the beginning of the Project and on an as needed basis January 2007 – August

2009. Numerous Project volunteers were engaged in the Amsterdam office (primarily) and several

posted to the BSCs.

BSC Management

BSC Zenica Director – Dr. Nino Serdarevic, plus 2 local Project Officers, 1 Incubator Manager and

Assistant.

BSC Bar Director – Ivana Tomasevic, plus 2 local Project Officers, 1 Incubator Manager and Assistant.

BSC Bitola Director – Rozita Taleska Hristovska, plus 2 local Project Officers, 1 Incubator Manager and

Assistant.

BSC Kragujevac Director (later advanced to Project Manager, April 2009) – Nebojsa Simic, plus 1 BSC

Coordinator (Marija Stojadinovic) and 2 local Project Officers. The Business Incubator staff salary was

paid for the Director of the Kragujevac “Business Innovation Center”.

BSC Monrovia Director – Mr. Gayah Kezele (August 2009 – April 2010) – vacant since April 2010 but

temporarily replaced by Marcus Zarway, plus 2 part time project officers.

All noted BSC Directors, exception for BSC Monrovia, were engaged during the months of March-‐May

2007 and remain BSC Directors to this day, except for Nebojsa Simic who transferred to Rwanda

Country Manager, SPARK MFS II Project. Marija Stojadinovic has assumed BSC Director duties.


Annex I: List of SEBSN BSC/BI Local Project Partners BSC Bar (Montenegro):

• Municipality of Bar

• Faculty of Tourism Hotels and Trade, Atlas University

• Secondary Economic School -‐ Bar

• Montenegro Business Alliance (MBA)

• Bureau for Employment -‐ Bar

• Society of Olive Producers – Bar

• Cultural Centre -‐ Bar

• Society of Entrepreneurs -‐ Bar

• Micro-‐credit provider: NLB Montenegro Bank

BSC Bitola (Macedonia):

• Municipality of Bitola

• University St. Kliment-‐Ohridski

• Faculty of Technical Sciences, University of St Kliment-‐Ohridski

• Regional Chamber of Commerce -‐ Bitola

• Regional Enterprise Support Centre (RESC)

• Micro-‐credit provider: Stopanska Bank and Eurostandard Bank

BSC Kragujevac (Serbia):

• Municipality of Kragujevac

• Regional Economic Development Agency for Sumadija and Pomoravlje (REDASP)

• University of Kragujevac

• Business Association Sumadija

• Business Association SLOGA

• Chamber of Commerce and Industry Kragujevac

• Micro-‐credit provider: ProCredit Bank

BSC Zenica (Bosnia & Herzegovina):

• Municipality of Zenica

• Zenica Economic Development Agency (ZEDA)

• University of Zenica (UNZE)

• Faculty of Mechanical Engineering (UNZE)

• Faculty of Metallurgy & Material Sciences (UNZE)

• Faculty of Economics (UNZE)

• Regional Chamber of Commerce

• Regional Economic Development Agency -‐ Zenica (REZ)

• Business Service Centre Zenica-‐Doboj Canton

• Ministry of Economy, Zenica-‐Doboj Canton

• Micro-‐Credit Provider: LIDER

Documents

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