Smart Specialization Strategy as a Framework for Creative Industries Development

The Government of the Republic of Serbia selected on June 29, 2017, recognized the importance of the creative industries for Serbia’s economy, and founded the Creative Industries Council in 2018 as a form of support to this sector. In 2019, the Sector for Development, International Cooperation and the Promotion of Digital, Innovative and Creative Activities was established as part of the Office for Information Technology and eGovernment, as well as the new national platform “Serbia Creates.” The strategic framework for the development of creative industries was established by drafting and approving the Smart Specialization Strategy for the Republic of Serbia for 2020-2027 (Official Gazette of the RS, issue 21/2020) which recognizes creative industries as a priority domain based on indicators of growth and positive trends. In 2017, a detail quantitative analysis was carried out in cooperation with relevant state institutions (Statistical Office, Intellectual Property Office, Public Policy Secretariat, Ministry of Education, Science and Technological Development, Ministry of Economy, Serbian Chamber of Commerce, University of Belgrade) and the Fraunhofer Institute from Germany, which mapped out the economic, innovational and research potential of the Republic of Serbia. Based on fields identified in the quantitative analysis from December 2017, an ICT innovation camp (software engineering) was organized. In 2018, after a series of interviews with relevant stakeholders, a qualitative analysis was carried out, which defined potential priorities—fields with competitive advantages. In the process of drafting the Smart Specialization Strategy (4S—Smart Specialization Strategy Serbia), the Ministry of Education, Science and Technological Development cooperated with other institutions from the public and private sector, as well as nongovernmental organizations, and was helped by experts from the World Bank project “Competitiveness and Jobs” as well as experts provided by the European Commission’s Joint Research Centre (JRC). The creation of the document relied on a comprehensive entrepreneurial discovery process based on previously prepared analyses and implied a guided dialogue involving important representatives from the economic, academic, government, and civil sectors. The entrepreneurial discovery process started in March 2019 and lasted until June 2019. There were 17 workshops held during this time. The Ministry of Economy began the formal work on the preparation of the Industry Strategy. To align the contents of the Smart Specialization Strategy and the Industrial Policy Strategy of the Republic of Serbia for 2021-2030, simultaneously prepared by the Ministry of Economy (approved in March 2020, Official Gazette of the RS, issue 35/2020), and to follow the European Commission’s recommendation from the annual report on progress from 2018, which suggested using the findings of the Smart Specialization Strategy to draft the Industrial Strategy, the Government founded a working group for aligning the strategies in May 2019. For carrying out the EDP process, a new structure was established, made up of the Coordinating Body and the EDP unit. The Republic of Serbia's Smart Specialization Strategy, adopted on February 27, 2020, identified the following priority fields: (1) food for the future, (2) information and communication technology, (3) machines and production processes of the future, and (4) creative industries. The general vision of the Republic of Serbia’s Smart Specialization Strategy’s (4S) states: Serbia creates innovations—a smart and creative Republic of Serbia that is highly competitive globally and recognized for its knowledge-based innovations, partnerships in the national ecosystem, and individual creativity in the following fields: − Sustainable high-tech food production with high added value for the future − Sophisticated software solutions for the global market and − Industrial innovations founded on cross-departmental collaborations. According to the general vision, by 2027 Serbian economy will be heavily based on knowledge and innovation. The five specific goals are defined as follows: 1. Scientific activities directed toward 4S priorities 2. Supported economic development through research and development and cooperation between participants of the quadruple helix 3. Education oriented toward innovation and entrepreneurship 4. Improved business conditions through optimization and digitalization of processes in 4S areas 5. Internationalization of economy through inclusion into regional and global value chains in 4S areas. The Strategy mentions the finding of creative industries (CI) analyses, which show that the Republic of Serbia exhibits great growth and development potential in this area. According to the quantitative analysis, creative industries are one of the important potential priorities in the Belgrade area, the Republic of Serbia’s most important economic center. It claims that the creative industries’ potential should not be viewed solely in terms of its impact on economic development, and that creative achievements have an impact on the creation of a city’s or region’s identity and image. It concludes that investing in the creative industries is investing in an improved quality of life and stronger local and national identity. An analysis of the cluster structure showed that smaller clusters with up to 25 members dominate the Republic of Serbia’s creative industries. They belong to the entrepreneurial cluster type, meaning that they were established to facilitate cooperation between micro businesses and entrepreneurs, and provide access to information and aid the establishment of cooperation. Many micro and macro-level business (23.8%) as well as entrepreneurs (67.5%) make up the Republic of Serbia’s creative industry. Micro-level business with up to 3 employees are particularly dominant. Out of the total number of start-up companies in the Republic of Serbia, creative industries account for 14.1%. The annual growth of new enterprises in this field is 3.25%, which is significantly higher than the overall economy’s average (2.1%). When it comes to the departmental distribution of new entrepreneurs, the leading areas are design and creative service, such as graphic design, film, video production, as well as software development and engineering. The number of companies in this industry shows increasing tendencies for the period 2014-2018 in comparison to the rest of the Serbian economy. The annual growth rate of economic subjects from the broadly defined sector of CI for the period 2014-2018 was 6.2%, with the growth rate increasing every year. Most of the companies and entrepreneurs are registered in the Belgrade area, while the number of companies has increased in 2018 in comparison to 2014 by 33.4%. In the Vojvodina region, the number of companies increased by 29% during the same period. In the period 2014-2018, the GVA of the private sector’s creative industries grew 64.9% for the narrow definition, and 24.1% for the broad definition. The average annual GVA private sector creative industries growth rate was 18.1% and 7.5%. The private sector creative industries GVA contribution to GDP is slightly higher than that of construction, but slightly lower than that of agriculture. In 2014-2017, export accounted for 8-11% of overall business income for companies, whereas in 2018 and 2019, export accounted for 10-14% of total company income. The cumulative export growth was about 100% for the narrow definition and around 50% for the broad definition. Qualitative research on the creative industries revealed the high potentials of specific segments, particularly in terms of high-quality staff, but also revealed infrastructure limitations. The main priorities in the creative industries supported by the Republic of Serbia’s Smart Specialization Strategy are: – Creative audiovisual production – Video-games and interactive media – Smart packaging. The sector's final vision was characterized as follows: Creative industries promote individual auteur work and add value to other sectors of the Serbian economy, thereby contributing to positioning the Republic of Serbia as a high-tech, globally competitive economy. According to the report, marketing and communication are the areas with the highest level of entanglement of single priority creative industries sub-fields with other priority areas, as they are used by other sectors for video content production and communication, and increasingly design. The Strategy entails a Package of Measures, and given that the five specific goals are universal for all four priority areas with certain specificities, the majority of the measures refer to all priority fields, with several special measures that refer to one or more fields created in response to observed challenges in the EDP process. Specific Goal 1—Directing scientific activities to 4S priorities—includes Measure 1.4: Program for supporting experimental and innovative projects that connect art, science, and advanced technologies—dedicated to developing innovative forms of creative industries through supporting interdisciplinary research and cooperation with the ICT sector, through the new program of financing experimental and innovative project that include connecting art and science. A pilot initiative in the form of a call for several separate projects with a total value of 3,000,000 RSD is planned for 2020. The Ministry of Education, Science, and Technological Development will be implementing this measure, which will be carried through the Center for the Promotion of Science in partnership with the national platform “Serbia Creates.” Specific Goal 2—Strengthening the economy through research and development and cooperation between members of the quadruple helix—includes Measure 2.11: Creative Hub—Boiler Room—The reconstruction of the spaces of Serbian Railway’s “Boiler Room” into a creative hub as part of the infrastructural support to the creative industry, with accompanying program activities and infrastructure needed for performance and art programs as well as encouraging interdisciplinary cooperation between the various areas of CI. The goal of establishing a creative center in the former railway boiler room is to aid the incubation of new art projects as well as to provide a business infrastructure for development, networking, and forming collaborations among creative industry actors. The Ministry of Culture and Information is responsible for monitoring and regulating the implementation of this measure, which has a total value of 840 million RSD. Specific Goal 2 also includes Measure 2.12: The Creative Embassy in London—Reconstruction and Adaptation of the Serbian House in London as a new hub for promoting creativity and technological innovation from the RS, and strengthening the brand of Serbia as a destination with a strong creative industry and a source of innovative products, services, and companies. The purpose of this multifunctional space is to provide an exhibition and business infrastructure that will serve as a business incubator for individuals and start-ups looking to break into the British market, as well as to provide strategic support for interactions with international organizations and individuals in the creative industries, sciences, and arts. The overall cost of executing this policy is 120 million RSD, and the Ministry of Foreign Affairs is in charge of monitoring and supervising its execution. The Specific Goal 3—Education Oriented Towards Innovation and Entrepreneurship—includes Measure 6: Master’s program for connecting arts and information technology—this measure entails the establishment of master's study programs, as well as accompanying short program studies in the areas of information technology, software development, data analysis, organization, and art. The focus of the call is to select and fund a three-term multidisciplinary master's study program in software engineering, data analysis, software development, organization, and art, with at least one short study program from the stated disciplines. The introduction of this study program, in accordance with the needs of the creative industries, would introduce new disciplines into higher education in the RS while also allowing for the education of a globally competitive personnel. This approach aims to create comparative advantages through linking research and academic forces to the needs of the economy. The institution in charge of monitoring and supervising the implementation is the Ministry of Education, Science and Technological Development.