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The impact of the Covid-19 on the European entrepreneurial ecosystems

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Innovative Green and Blue answers from the Smart policymaking workshop at the European Week of Regions and Cities 2020

1. European Week of Regions and Cities 2020: How to improve policy for enhancing a conducive environment for Start-ups creation and for delivering efficient Start-ups promotion instruments?
In a European context in which from several countries news of imminent lockdowns and restrictions due to Covid-19 persistence are still coming, one of the most urgent challenges concerns the choice of which policies and regional plans to adopt for stimulate competitiveness in entrepreneurial ecosystems.
One of the most serious consequences of the pandemic scenarios could be unprecedented economic crisis from which it will be possible to emerge thanks to the dynamism of the greenest and most innovative productive sectors. These are the sectors identified as strategic targets of the smart policies discussed in the “Smart policymaking to boost start-up activity and competitiveness in Europe” workshop. Policies aimed not only at the granting of loans and supports, but above all, at the realization of effective public services designed in collaboration with their end users. Services that could be implemented through the support of an European networks of “one-stop shops” (OSS) for entrepreneurship. OSS based on the "once-only-principle" (OOP), in which throughout the service delivery process, citizens, institutions and businesses should provide certain standard information to Authorities and Public Bodies only once and in a harmonisated system.

Moreover, if in these design processes of public services were used the opportunities offered by the greater degree of maturity achieved by technologies such as Big Data and Artificial Intelligence these could have the potential to transform their structures and procedures to achieve new goals in the interoperability between Public Authorities and economic operators. In the public support of entrepreneurship, these technologies could lead to reflections on the mechanisms that artificially produce mutual reliability and trust. These could create, maintain and constantly nourish the bond that unites people and groups in a self-regulated flow of mutual expectations, through the engineering of practices aimed at providing "disinterested advice", born in the “world of the web” to give strength to the communicative, community and horizontal link that binds people together.
Overcoming this expected crisis will require a vision that can draw on both the good practices of the past and the most promising ideas for the future. Look at the past, by reference to the examples of “Research and Innovation Strategies for Smart Specialisation” (RIS3)”, which have represented over the years following the economic crisis of 2008-9, one of the most innovative aspects of the cohesion policy programming and one of the most effective ways to reduce regional disparities of development in the several member States. And look to the future, focusing on the realization and strengthening of services to support the sectors of entrepreneurship with higher rates of innovation, internationalization and sustainability: the Start-ups for a green, digital and resilient Europe.

The workshop was organised during the 18th European Week of Regions and Cities, the most important continental event for the regional and urban policies. During its sessions the workshop tried to define as replicable paths as possible to facilitate disruptive business ideas aimed at exploiting regional key assets and potentials. Enabling and inclusive paths designed for the main stakeholders, the different levels of government, enterprises and all the institutions of knowledge creation. A bottom-up approach, according to which companies, research centres and universities, competence centres, are led to work side by side to identify the most promising areas of smart specialisation as well as the weaknesses that hinder innovation.

The workshop was organised thanks the collaboration of two Interreg Europe projects – START EASY and GRESS and it hosted 4 different round tables in which they were discussed policies and smart tools on financing, regulation and proactive public and support services for the Start-ups. The round tables were divided by subtopics and economic sectors: (1) green economy- drivers and challenges; (2) digital and tech; (3) health, well-being and life sciences industries; (4) innovative business solutions for a new green and circular Europe.

The representatives of the leaders partner in the START EASY and GRESS projects (the Government of Catalonia from Spain and the Kristiansand Municipality from Norway) were the keynote speakers of the event and the members of two projects partners consortia were the moderators of the round tables involving entrepreneurs (such as the HumanITcare and the Clean Tech), public officers, decision makers, researchers, scholars and citizens from all over Europe. At the end of their sessions moderators presented effective wrap-up summaries, useful both for the future implementation of the European public partners’ activities planned in their consortia and for the entire international scientific and entrepreneurial community.

2. The role of the Metropolitan City of Bologna in START EASY and GRESS projects
The webinar was an inspiring initiative that covered a wide range of arguments. For this reason, the heterogeneous themes covered could require for their effective exposure the use of two common comparison terms: 1. Start-ups, the targets that projects share, as they represent the most concrete solution for the economic development of a region (only through investments in the promising fields of innovation and the green economy will we be able to face the new and unexpected scenarios of the future); 2. Intermediate bodies in the framework of European multilevel governance, such as Bologna.

The Metropolitan City of Bologna participates in all the projects that drove the webinar, and is a wide area public body with competence that is unique in Italy. The Emilia-Romagna Region has decided to grant this public body responsibility for the economic development of a territory comprising more than one million people and with 55 different municipalities within it. Furthermore, within the Covenant of Mayors for the fight against climate change, Bologna monitoring the local agendas for sustainable development of all the major Italian cities. The institutional laboratory that has been created over the years in Bologna is therefore able to represent all the partners involved in the two projects thanks to these aspects: the Entrepreneurial Discovery Process (bottom-up innovation processes), the support to the association between research and innovation through the identification of technological domains such as general purpose technology (GDP) and key enabling technology (KET) rather than mere productive sectors; the processes of structural evolution of territorial contexts; the smart specialisation in the setting of productive specialized diversification to enable policy makers to make decisions and to set priorities; in carrying out an "evidence-based" monitoring and evaluation to assess the success or possible failure of the strategies. A tangible example of this approach are the green companies identified at regional level (about 6000 of which 1100 in the Metropolitan City of Bologna), of which 4000 belong to the industry and services sector (800 in Bologna). The Metropolitan City of Bologna has supported this economic sector for many years because in a European and regional context increasingly aware about the themes of climate neutrality and the circular economy, the green theme can play a key role in redefining models of economic development of the production chains of the territory. At present, its ambition is to use the exchange of knowledge possible through GRESS and START EASY European projects to re-launch its territorial development plans.

3. Common challenges identified and proposals for a shared definition of “entrepreneurial ecosystem”
During the workshop, the following common challenges were identified:
- the difficult and costly processes behind regulations governing business creation which tend to discourage entrepreneurial activity;
- the limited responsiveness of the European public bodies to the needs of these new Start-ups, that thereby making necessary to catch up the digitalization of public services (OOP for business data registration and spread of its models in physical and digital OSS);
- the uncertainties caused by Covid-19 that does not encourage investment;
- the lack of liquidity and market outlets that risk being a devastating combination for many of the economic activities launched in the last years and will have a major impact on the start-up mortality rate in the coming months;
- the key role of policies and institution in trying to contain these negative trends and devise post-crisis recovery tools;
- the increase of risk capitals and public sector financing for Start-ups and SMEs in the green and circular economy;
- promoting the use of eco-certification among Start-ups and SMEs as tools for their social accountability and responsiveness.

For improve policies for SMEs competitiveness by strengthening capacities to trigger and support formation of sustainable and competitive start-ups and spin-offs within the green and blue economy (green swift), two different studies carried out within the Interreg GRESS project for the definition of the “state-of-the-art” of green growth in some European regions were also presented:
- “Green economy policies. Where we are. Baseline in the GRESS project partner regions”, an European report on green economy;
- “Drivers and challenges for green enterprises. Results of the survey analysis in the GRESS project region”, the results of an European survey of Start-ups and SMEs.

The report showed that the demand for green products and services is not sufficiently high. That’s why more incentives might be provided through the adoption of green public procurement. Despite this all countries consider the green economy as a driving sector for a more resilient and sustainable territorial development and are positively influenced by the European policy framework and actions. Moreover some countries define as positive asset the presence of the eco-innovation system, having a proactive role in fostering the green and sustainable sector.

The survey revealed that private and public funding is widely considered insufficient to support the development of new green Start-ups and SMEs. Significant obstacles are encountered by green enterprises in all regions in affording green investment and adaptation costs, due to insufficient market demand and the lack of process simplification by the institutions providing support to green business (including EU). The conclusion of the survey is that the public sector must play a more important role in improving green public procurement, increase awareness of the consumers and the whole value-chain, as well as in applying legislative, regulatory changes.

One of the results achieved during the workshops was the proposal for a shared definition of key operational concepts for the continuation of both projects such as “Entrepreneurial ecosystem”. The round table “Digital and tech” defined it as a system that has as necessity and sufficiency terms for describe its implicational relationships, “framework” and “systemic” conditions. “Framework conditions” could be defined as: formal institutions; culture; physical infrastructure; demand. While “System conditions” could be defined as: networks, leadership, finance, talent, knowledge, support services and intermediaries. The basic elements of this “Entrepreneurial ecosystem” value chain influence and are influenced both by the outputs of entrepreneurial activity and by aggregate value creation which, compared to this first element, is at a hierarchically higher level, representing the outcomes of the entire ecosystem.

 

Author
Marino Cavallo
Research, Innovation and European Project Management Service - Head of Office (Metropolitan City of Bologna)

The impact of the Covid-19 on the European entrepreneurial ecosystems

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