Economic development based on knowledge and innovation will get a boost in Serbia through a $48 million-dollar loan, approved today by the World Bank’s Board of Executive Directors.
The financing will support improving the relevance and excellence of scientific research, with potential to be commercialized on the market and provide access to finance for enterprise growth. In addition, the project will support the newly created Science Fund and introduce a special program promoting collaboration between local researchers and entrepreneurs with those in the Serbian diaspora.
Today, Serbia’s innovation and entrepreneurship potential, although growing, is hindered by low levels of public and private research and development (R&D) expenditures, an inefficient, largely non-competitive science financing model, and little public-private collaboration.
While the Serbian entrepreneurship ecosystem has improved and holds more promise, a lack of skills, training, mentoring, and financing for innovative enterprises is impeding its growth.
“There is a lot of latent innovative talent in Serbia, which is not fully utilized,” says Stephen Ndegwa, World Bank Country Manager for Serbia. “Only around 0.9 percent of GDP is invested in R&D, well below the EU average of 2.03 percent, with most of the funding coming from the Government. This indicates that the private sector is severely underinvesting in R&D and innovation, suggesting market failures and a need for public financing and other structural incentives to accelerate bringing innovation to markets.”
Apart from supporting the institutional development and governance of the Science Fund, the project will finance selected competitive programs, such as basic science grants, applied research grants with incentives for promoting public-private linkages in the R&D community, and incentives for enhancing collaboration with EU partners. It will also help the Fund design a program focused on the skills of researchers to access international financing and collaboration opportunities, as well as the transformation of selected research and development institutions.
Continuing longstanding support from the World Bank and the European Union to Serbia’s Innovation Fund, this new loan will support the acceleration of enterprise through co-investment grants. The acceleration program is designed to improve mentoring, access to investors, and entry to new markets for innovative firms. This program will be organized in two streams: one for the early (idea) stage; and the other for growth (scale-up) stage companies. Each stream will serve up to 20 companies. Knowledge sharing with local and international innovation hubs, incubators, and early-stage funds is also a cornerstone of this program.