Vision on how to overcome the current crisis

September 24, 2020
 Vision on how to overcome the current crisis

 

Expert Opinion

By Dr. Diana Leka (Angoni)

Head of Secretariat, Albania Investment Council*

 

The current status of the Entrepreneurship Ecosystem, the Triple Helix model of cooperation – and the global health crisis affected by COVID-19, entails a moment of reflection and calls for an exigency on the need for integrated and systematic cooperation between government-universities-business. A clear vision, fundamental commitment and conveying appropriate messages on the necessary systemic interventions – increase the economy’s resilience to better survive shocks such as COVID-19 or others. It remains an important factor for the timely improvement of the socio-economic system of the country.

 

The importance of the Triple Helix in the entrepreneurial ecosystem

In other words, the Triple Helix model involves three actors: (1) universities, (2) government, and (3) entrepreneurs, whereas the ecosystem relates to the interaction between politics, public institutions, and entrepreneurs, and in the current situation this interaction is of great importance. Studies have found that a clear vision, timely interaction within the ecosystem, and coherent and consistent messages increase the resilience to shocks such as COVID-19.

The Investment Council (IC) is a platform, whose model of functioning includes the interaction within the triangle Government-Business-Donor. The Investment Council follows a bottom-up approach and helps deliver key messages to decision-makers on prominent investment climate issues in the country. Explicitly, since 2017, while cooperating with BPO/IT businesses it concluded that universities should be partner in this platform as they are important actors in the labour market chain and innovation. Hence, following the suggestion of IC business members, the cooperation was instantly formalized by memoranda of cooperation, as the one with Epoka University. Cooperation like the above mentioned has consolidated further nowadays.

Second point: How to expand the country’s potential to attract investment and meet the entrepreneurial needs by stimulating systemic interaction of the stakeholders: business-government-university?

In 2017, we analysed how entrepreneurs (in the BPO sector) reflected on the investment potentials of the Albanian market and evidenced their suggestions on the incentives related to human capital in Albania—given that the BPO market was considered quite appealing.

We met in Tirana with companies such as BBC, Apple, Google, and other reputable companies working in the IT services sector. These companies drew attention to the potential that country offers and that of domestic human resources but noted at the same time the standing challenges. They underlined the fact that the companies were optimistic but needed help from the system to increase the potential, and the question was: How to maximize/optimize this potential in line with the needs of entrepreneurs? We understood from the analysis of local data and from the collaboration with the businesses that solving market issues should start from education, especially in the frame of supply chain perspective. Consequently, suggestions were offered related to universities, government entities, and entrepreneurship. Further on, we noticed that sectors in the country were competitive, but we could not attract our competitors, due to a gap in human capital (in terms of quantity or quality). For example, we found that the career offices were present in some faculties (economic and social sciences), but there was no systematic cooperation between businesses and universities.

Representatives from a business with whom we met, said that “The business assesses the quality of the labour market from the supply chain perspective but it cannot solve the problem by itself, as the issue is also conditioned by the cooperation university-government-business.” Thus, it is very important today to shape and lead the course of action – maintaining a systematic relationship between university-government and entrepreneurship.

Since 2015 we evidenced so many initiatives that converge with this idea. Today we suggest consolidating this interaction otherwise we cannot move forward, and cope with crises like the current one which will have huge costs.

I want to mention another example of the study we did on investment incentives. In 2004, the Albanian Parliament approved the TAP with the 140 votes, reflecting the political awareness and the importance of the project for the country.  But the approval of this unique project was not accompanied by other necessary interventions such as the timely preparation of the labour market as to respective specific sectors. In 2017, we learned from the businesses that in some specific sectors, including gas and electricity, labour force was being imported from Turkey to meet the needs in these specific sub-sectors as the local market could not offer a skilled workforce. I think this is a concrete example that shows the need for active liaison/interaction between business, government, and university. Thus, things can become efficient, they can converge and, in some way, help the ecosystem to really contribute in time to the investment climate of the country. Due recommendations were made at that time for the universities, business associations, and government[1] which we monitor and systematically report to the Council.

 

MOMENT

So let us consider this moment as a reflection and work carefully to consolidate the ecosystem as well as the need for systemic cooperation between universities, entrepreneurs, and government.

 

A unique moment. Why now?

COVID-19 has compelled us to look and debate on scientific data, moving afterward into scientific recommendations. I would say that now, like ever before, we are forced to comment on what the science says not only locally but also globally. Today, more than ever, it is important to follow rigorous and well-defined cooperation, proper communication for a quick response to science findings—concerning the social impact and the government budget. Let’s deem this moment as a reflection to consolidate the entrepreneurial ecosystem by stimulating systemic cooperation between universities, entrepreneurs, and government.

On 28 March (on 24 March the government proclaimed the state of emergency) until 6 May we undertook a survey with the purpose of influencing the debate with some local data, and when we say influence we are not just talking in theory, but also based on local figures. The main goal was to help the audience by asking the right questions. This debate aimed to also helped policy-making with some local evidence based on the profile of our businesses where 95 percent are small and medium businesses. We also considered important that the government response to COVID-19 should consider these small businesses as a priority. The survey was composed of four pillars: 1. Main business challenges faced during the COVID-19 pandemic; 2. Business perceptions on the measures taken by the government in coping with COVID-19; 3. Measures taken by the business itself to ensure continuity of work, inability to go to work, and the existence of a risk strategy; 4. Usage level of online services by companies during COVID-19 and beyond. The latter was in fact identified as an instrument that was widely used by businesses during the COVID-19 pandemic.

Second step, the Secretariat prepared promptly a brief summary of legal changes related to government decision-making during the health crisis, updating it periodically, for the purpose of supporting the business with timely information, especially the small businesses, based on our experience, it could not absorb all those frequent changes within such a short time. For example, some of the issues are how to apply and receive salaries for its employees or the existence of other liquidity opportunities through loan guarantee schemes. Therefore, we immediately began the survey with our business contacts of 5 years, as we also synthesized legal summaries to speed up awareness and timely information on what was being provided by the Government.

Eventually, based on the above:

  1. Trust in the actors that support the creation of the entrepreneurial ecosystem—is of unique importance today. But of course, the trust cannot be built in one day and it does not come immediately, but it is a matter of systemic model and cooperation, along with concrete results[2].
  2. Valuable debate in due time, based on evidence and analysis helps transparency, ecosystem contribution and improves the investment climate in the country.

I would finish with a question and an opinion on what we can do next, in the sense of stimulating the contribution of universities in the decision-making of the country. In this regard, we at the Investment Council have our experience of five years with our stakeholders, and we are here to help with the model and integration of actors for a clear vision to give concrete results.

 

  •  Article by Head of Investment Council Secretariat, Ms Diana Leka published on Monitor Magazine (August 2020)–adapted from a conversation with students of Epoka University.

 

Interaction

Trust in actors who rely on building a credible entrepreneurial ecosystem is of particular importance today. Trust cannot be built in one day and does not come immediately, but it is a matter of systemic cooperation throughout the chain of education – governance – business, by focusing on giving concrete results.

 

[1] www.investment.com.al

[2] For example, at the Investment Council, we have today about 40 percent of the recommendations approved by the government, about 15 percent in process and 35 percent totally agreed. The question is “time”: “Will we accelerate this time the adoption of recommendations and the cooperation of all parties in order not to wait, but to move ahead to achieve results in time?”

Investment Council is supported by the Ministry of Finance and Economy, the EBRD and the Swiss State Secretariat for Economic Affairs (SECO)

Albanian Investment Council