PhD Ivan Rakonjac, Managing Director, Innovation Fund : Strengthening of the innovation potential in Serbia

Investing in science, education and innovation is investing in our future, and we are aware that without a strong connection between science and the economy, there is no social and economic progress

The goals of the Innovation Fund (IF) is to improve technological and research innovation capacities, both in the economy and in scientific research organizations. This type of investment in research and development in companies is a necessary prerequisite for the development of a knowledge-based economy. Similar programs exist in all European countries and are funded not only at the national level but also under European support programs for SMEs. Serbian Government is improving the institutional framework for supporting the innovation ecosystem.

PhD Ivan Rakonjac, Managing Director, Innovation Fund

How developed are the innovations in Serbia and how favorable is our social and economic environment for their development?

The path from idea to the realization of innovation is full of challenges and on that path, the state has a significant role. As innovation is also a risk, the state has a mandate to participate in the sharing of that risk, all for the sake of socio-economic growth. Thanks to the mechanisms created by the state, support programs for the development of innovations, incentives and grants for individuals, teams, young and already developed companies are available to the private and academic sector today.

One of the challenges facing our economy is how to attract investment in the knowledge industry and encourage Serbian companies to develop innovations. Since 2018, the state has offered a package of tax incentives intended for companies engaged in research and development, through an increase in the deduction for research and development costs (so-called R&D costs), exemption from taxation of income from intellectual property rights IP Box, as well as tax credits for investing in startups engaged in innovation.

Is the economy in Serbia open and ready for change and innovation?

The Serbian economy has shown that it has innovative potential and that there is the ability to translate innovative ideas into concrete products with added value and market potential. We have confirmed that Serbia creates innovations through the Innovation Fund programs. Interest in our programs is growing and the budget for the development of innovations has been also growing since 2017. So today, the IF has significant funds to support the development of innovation, for 2021, more than EUR 20 million have been allocated for innovations. The funds we invest help companies to reduce the risk due to the development of new products, services, technologies and to achieve tangible business results, as well as to hire new experts.

The pandemic has shown that every crisis is also a chance for all those who can quickly adapt to the new situation, which is an innovation in its own way…

To what extent has the corona virus pandemic contributed to accelerating the development and acceptance of digital innovations?

Digitalization is a basic priority not only of the Government but also of today’s society as a whole. The fact that “online life” has become a constant in everyday life speaks the most in favor of accepting innovations. However, the pandemic has not only contributed to the development of virtual solutions.

Immediately after the declaration of the state of emergency, at the initiative of the Prime Minister’s Office, the Fund invited companies to apply for funds in order to implement projects that could influence the effects of the pandemic in the short term. Our economy has shown a willingness to react quickly in critical situations. In a short period of time, 12 solutions were developed and available for use, such as a disinfection cabin intended for use in public places and locations of interest, a mobile counter for non-contact temperature measurement and manual disinfection, a range of products for disinfecting rooms and objects using ultraviolet radiation… Despite a short period of time, this invitation attracted close to 300 proposals for innovative projects.

How does the development of innovation contribute to the economic and social progress of the country?

Innovation is the key to the development of Serbia, the main driver of change and strengthening the competitiveness of the economy. Tax policy, financing programs, venture capital funds, digitalization, education, are just some of the tools for stimulating innovation potential in Serbia.

We are here to provide high quality professional service in line with the experience of similar institutions around the world. The Fund’s programs have been supported from the beginning with the funds of the EU and the expert support of the World Bank, after their pilot phase, thanks to the funds from the national budget, the support mechanism has become permanently available. We have developed necessary and efficient programs through which both economy and science benefit quickly and easily.

One of the preconditions for the development of the knowledge society is the excellence and relevance of scientific research results, but also the understanding of how to translate those results into a recognizable product, technology or service and offer them on the market. Systemic support from the Government, especially through the Ministry of Education, Science and Technological Development, is focused on the development of a knowledge-based economy and support for the commercialization of innovations in the market. Also, the Government is committed to monitoring the current trends in the development of innovations at the world level, as well as creating a stimulating environment for the development of innovative entrepreneurship in Serbia, which guarantees the achievement of a technologically developed world economy. The state expressed its strategic commitment to improve the innovation and research ecosystem, as well as to the development of the economy based on knowledge and innovation in the Smart Specialization Strategy, which was created in accordance with the best European planning practice, the Industrial Development Strategy and the Strategy for the Development of the AI, which has in certain areas already surpassed human capabilities, as well as the Strategy of Scientific and Technological Development.

Our funding programs will continue to contribute to increasing allocations for research and development in line with European standards

In which area are innovations most developed and present?

From the current practice of the IF, which has been awarding grants for 10 years according to strict international criteria, we can say that the largest number of new innovative products comes from the field of information and communication technologies (ICT), mechanics and mechanical engineering, and then natural sciences and agriculture and food industry. However, the Fund’s programs are available to all areas of science and the economy. Support is provided to those projects that have a capable team, innovative potential, sustainable competitive advantage and clear development plans, as well as sufficient quality to compete in the international market.

Through the programs of the Innovation Fund, 991 innovative projects have been supported with a little more than 37 million euros. Which programs and projects have you been particularly proud of?

These figures show the extent of support to date. The Fund’s support is aimed at increasing the competitiveness of Serbian companies on the world market. Sensor-based device for professional pianists, a software solution for optimization and control of energy consumption in buildings and plants, new technology for truffle production and processing, then mobile ECG device for detecting heart attack symptoms, ultrasonic sensor and software for detecting oil pipeline leaks, are just some of the supported projects currently being developed under our programs. Through the Fund’s programs, products with high added value are developed, products that are competitive in foreign markets, as well as the capacities of companies for dealing with the development and sale of developed products.

On the other hand, through the Fund’s programs, the cooperation of the economy with the scientific sector is encouraged, efforts are made to bring the economic and scientific sectors closer and to establish cooperation in the development of market-needed products. We are proud of the results achieved by companies and the programs themselves, which have enabled them to turn their ideas into products, services, or technologies, which find their application every day and conquer the market. For that reason, the IF will work even more intensively, with larger capacities and new programs, following the needs of its beneficiaries, because their success is also our success.

What are the further plans of the Innovation Fund? What is your focus in the coming period?

The IF adapts its program portfolio to the requirements of the economy and the needs of the academic community and in that sense continuously improves the existing and develops new mechanisms to support technological development and innovation. We are constantly working on creating new mechanisms to encourage and develop innovation, almost every year new mechanisms are available to the economy or science. For example, in 2017 these were Innovation Vouchers, in 2019 Proof of Concept. In 2021, the IF will launch the Enterprise Acceleration Program and the Smart Start Program. Through the Enterprise Acceleration Program IF offers an intensive three-month mentoring program and the award of grants in the form of public-private investments in innovation development. The Smart Start Program is a support for the development of an idea to the level of a prototype or a product of the lowest use value.

Innovation Fund programs are constantly being improved, adapting conditions to the needs of target groups for innovation development, for example, enabling teams to apply for the Mini Grants Program, as well as simplifying the project proposal submission process, for example, all application documents are submitted only electronically.

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