Towards A Sustainable Economic Growth and Development in the Western Balkans

Since the end of the 1980s the Western Balkan countries and Croatia have faced numerous difficulties in economic development, from the breakup of SFR Yugoslavia, military conflicts, to a delay of reforms. Although the period 2001-2008 saw an improvement in their macroeconomic performance, the global financial and economic crisis hit these countries severely.  Macroeconomic indicators have recently somewhat improved, but the structural weaknesses have not subsided. A model of development balancing economic, social and ecological aspects is demanded, with a particular focus on agriculture, energy, R&D (human capital) and public administration reform.

Online S3

In line with the ex-ante conditionality of Europe’s Structural and Investment Funds (ESIF), regions of member states must design and implement a research and innovation strategy for smart specialisation (RIS3) in accordance with the new EU 2020 strategy on smart, sustainable and inclusive growth.

In accordance with this conditionality, Online S3 proposes to close the gap that currently exists between the expectations of these research and innovation strategies and outcomes of smart specialisation, by offering services, tools and applications, which cover the design and implementation of RIS3.

An empirical test of the regional innovation paradox: can smart specialisation overcome the paradox in Central and Eastern Europe?

The regional innovation paradox is the greater need of lagging regions to invest in innovation and their relatively lower capacity to absorb funding compared to more advanced regions. Using data on regional public spending, industry composition and economic performance, we test empirically whether there is a differential impact of European funding on regional economic growth between Eastern and Western European regions. We conclude that the paradox is proven and consider the extent to which smart specialisation strategies may help to improve the quality of governance of regional innovation systems.

Smart specialisation strategies in south Europe during crisis

Over the last decade, southern European countries faced their gradual decline of competitiveness on international market by artificially sustaining demand through borrowing. Government budgets and the banking system offered liquidity, loans beyond the refund capacity of recipients, and supported growth by expanding domestic demand for consumer products. This erroneous reading of the origins of the crisis resulted in the adoption of economic policy recipes that led to spiralling public debt, the collapse of the banking system, and the near bankruptcy of Greece, Slovenia, and Cyprus.