EaP countries: key developments of R&I policies

The research and innovation sectors of the EaP countries have all experienced a significant downsizing in terms of personnel and financially since the countries became independent at the beginning of the 1990s. For example, in the case of Moldova the R&D personnel declined to a fifth of the potential available at the time of the independence of the country. In figures that meant a downsizing from 25,000 R&D personnel (in head count) in the early 1990s to around 5,000 today (2016)( Spiesberger and Cuciureanu, 2016).

The governance of R&I and research performance is still marked by a strong role of the Academies of Sciences, which were the cornerstone of research in the Soviet Union. In the current situation we

26 See the statement of EU High Representative Mogherini following her meeting with Ukrainian Prime Minister Groysman in July 2016: https://eeas.europa.eu/headquarters/headquarters-homepage/7277_en

27 See:http://ec.europa.eu/dgs/home-affairs/what-we-do/policies/international-affairs/eastern-partnership/visa-liberalisation-moldova-ukraine-and-georgia/index_en.htm

28 See the list of associated countries to Horizon 2020 at (August 2016):

http://ec.europa.eu/research/participants/data/ref/h2020/grants_manual/hi/3cpart/h2020-hi-list-ac_en.pdf

have on the extremes Moldova, where the Academy fulfils the role of a Ministry of Science, and Georgia, where most of the Academy research institutes were dissolved or merged into universities.

For R&I funding we can observe a trend to establishing specific bodies and agencies for managing it.

For example, in Georgia the Georgian Innovation and Technology Agency (GITA) was established in 2014 for supporting innovation, and the Shota Rustaveli National Science Foundation got the task of allocating public research funding in 2010. In Moldova a similar development for externalising research funding from the Academy has been under way in 2016.

Financially all EaP countries invest in R&D far below the EU 28 average. The EU reached a Gross Expenditure on R&D (GERD) of 2.03% of GDP in 2014 (Eurostat, 2016). Among the EaP countries Ukraine and Belarus have traditionally the relatively highest investment, and have reached 0.67%

and 0.66% GERD as a share of GDP in 2014. Overall we see declining and stagnating investment trends in the region. For Moldova this indicator has been declining to 0.37%, and for Armenia and Azerbaijan it is stagnating slightly above 0.2%. The exception may be Georgia, where GERD is increasing from a very low base of below 0.1%; other sources indicate a significantly higher level meanwhile for Georgia of 0.3% GERD of GDP planned for the current year 2016 (IncoNet EaP, 2016) Economic development potential, competitiveness and the R&I ecosystem are depending importantly on framework conditions for business. An indicator for measuring the state of framework conditions is provided by the World Bank and its Ease of doing business index. Georgia is leading here among the EaP countries being in 24^th place of world countries with a business friendly environment. Belarus is surprisingly well placed at position 44 in 2016, in spite of its strong state interference in the economy. The indicator should be interpreted cautiously therefore. Ukraine shows here the weakest performance, ranking only 83^th among world countries.

Figure 2: GERD as a percentage of GDP for EaP countries

Source: Unesco Institute of Statistics (UNESCO-UIS), 2016

Figure 3: World Bank Ease of doing business index

Source: World Bank (2016): Ease of Doing Business

The ability of a country to invest in R&I is determined by the available resources and GDP of a country. As an indicator we take here the GDP per capita. The highest GDP per capita has Belarus with about US$ 5,700, while Moldova has the lowest with about US$ 1,800. All EaP countries have a GDP per capita below the EU countries. Among EU countries Bulgaria has the lowest GDP per capita with US$ 6,820; Lithuania has already a 2.5 times higher GDP than neighbouring Belarus.

Figure 4: GDP per capita in current US$ for the year 2015

Source: World bank data, 2016

Figure 5: GERD by sector of performance in % for the year 2014

Source: UNESCO UIS, 2016

Figure 5 shows the GERD by sector of performance: Business-Enterprise Sector (BES), Higher Education Institutions (HEI), and Government sector (GOV). The data indicate that the government sector has in Armenia, Azerbaijan and Moldova the overwhelming role in research performance. In Belarus and Ukraine it is the business enterprise sector which performs most research. Data for Georgia indicate that research is performed only in the Higher Education sector, as opposed to all other EaP countries. All these data need to be interpreted cautiously, as they are incomplete. Even if in Georgia most research institutes were merged into universities, not all research is performed in the Higher Education sector. Statistics reflect here a lack of data collection for BES and GOV categories. The higher shares of BES in Belarus and Ukraine may be explained by a stronger role of state owned businesses in R&D or by the legal form of research institutes, which are organised in some cases as businesses.

Data for the share of financing of GERD by the business-enterprise sector are available only for Azerbaijan, Belarus, and Ukraine. It amounts to about 30-40% for these countries.

Several of the EaP countries are actively trying to internationalise their R&D systems. Moldova has been the frontrunner in this process. The local Academy of Sciences has established several bilateral cooperation programmes with main partner countries (e.g. Romania, Russia, Germany, Belarus), and negotiated the Association of the country to the FP7. Armenia, Georgia and Ukraine have followed the path and associated to Horizon 2020. However, the internationalisation process of countries has been hampered by various reasons, such as lack of resources, lack of interest in the matter (Azerbaijan), or because of political reasons (e.g. Belarus).

To summarise the main features of the R&I systems of the EaP countries, we can highlight the following:

 EaP countries are marked by weak R&D systems with stagnant investments in R&D

 PROs are main players in R&D, while R&D in the HEI sector is only slowly developing (except Georgia, where HEIs are main research performers)

 R&D in the business-enterprise sector is funded largely by government

 Efforts to internationalise R&D systems have been undertaken

In the following, the R&I systems in the five EaP countries Armenia, Belarus, Georgia, Moldova, and Ukraine will be addressed individually with regard to RIS3 steps, and the RIS3 Assessment Wheel methodology will be applied to the country cases (Annex V). It needs to be noted, that these assessments are tentative and based only on desk research and in-country experience of the author.

Also, we have to underline that R&I strategies and policies were in EaP countries not conceived according to a smart specialisation approach. We can assess here therefore only how current R&I strategies and policies would meet the RIS3 approach, and consequently scores are rather low.