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Eco-innovation as a solution for the Mediterranean countries  


The European Union's Mediterranean countries are generally perceived to be lagging behind northern Europe in economic and innovation terms. The MEDOSSIC project (Mediterranean organisation structure and strengthening of innovation capacities for sustainable development) looked at the Med region's eco-innovation infrastructure to see if improvements could be made.

Its goal was to improve the implementation of regional policies in innovation and increase the capacity for sustainable development by encouraging eco-innovation. The project partnership focused on identifying ways to support the development of eco-innovation by strengthening strategic cooperation between regional development agencies and other regional public and private stakeholders.

Georgia Piligotsi, an environmental economist and an external expert for the MEDOSSIC project partner OANAK working in the Greek consultancy ETAM SA, summarises some of the main lessons learned during the project.

Can you explain the thinking behind MEDOSSIC? Why was such a project to establish networks needed, and why is it relevant for the Med region?

Georgia Piligotsi: The Med region faces big challenges with regards to sustainable development. Generally speaking, eco-innovation in the Med region relies on the use of innovative technologies, products or services, which are quite often imported from northern countries such as Germany or the United States. Med countries thus send abroad investment capital which could be otherwise used to create essential added value in the regional economy, increase regional employment and avoid the brain drain of highly-qualified scientists and engineers.

The main sectors of economic activity in the Med region with significant eco-innovation potential involve sustainable tourism and energy production from renewable resources, construction of infrastructure for sustainable waste and natural resources management. However, most of the Mediterranean countries are lagging in developing sustainable and innovative solutions, when they are compared to northern countries (especially in construction and manufacturing). The MEDOSSIC partnership identified this deficiency and tried to assist the Med region in overcoming barriers.

How do you assess the state of eco-innovation in the area covered by the project? What common (or diverging) challenges does the Med region face?

Georgia Piligotsi: The lack of appropriate cooperative structures stimulating the development of eco-innovation seems to be one of the main problems in the Med region, as is the fact that research is not always addressed to market needs. Most eco-innovation support organisations in the region have direct relationships with academic researchers, but there is hardly ever a direct relationship with regional and/or local enterprises. One of the strongest factors that influences eco-innovation is the source of research funds. In most cases, regional organisations use European funding instruments (for example the research and development framework programmes) while the funds that SMEs have to invest in R&D is limited, especially in small regions. Even though Innovation Relay Centres exist in most of the regions, the lack of adequate and highly qualified personnel with expertise in these sectors does not really facilitate the successful marketing of eco-innovations. A bottom up approach may be more appropriate here: Relay Centres could identify the needs of SMEs and facilitate information transfer from the market to researchers and research Institutes.

What existing good practices and policies did MEDOSSIC identify?

Georgia Piligotsi: We have identified good practices in many different fields and sectors of regional economies. Concrete examples include Muskita Aluminium Industries in Cyprus, which invested in integrating a steam boiler into the production process in order to reduce its annual fossil fuel consumption by 63%; Bioaroma, an SME on Crete which produces organic cosmetics and has developed educational programmes on Cretan Herbs; Humolea (Greece), which produces an organic fertilizer from olive mill waste; and Mitol in Slovenia, which produces eco-friendly paints.

Project partners also drew up a list of eco-innovation support-scheme good practices. One of the most important regional structures supporting eco-innovation in the Med region is the Andalusian Technology Network (RETA).

Based on an Existing Situation Analysis, MEDOSSIC partners elaborated a Strategic Operational Plan that suggested specific regional policy measures that could be adopted to facilitate ongoing support for the regional eco-innovation system. Each partner identified and implemented one, two or three pilot projects. For example, the Greek partner, OANAK, identified three pilot projects on the promotion of eco-innovation in the region of Crete, including  the establishment of an eco-innovation committee within the Regional Innovation Council of Crete to identify good practices, local needs and priorities for eco-innovation in Crete.

What needs to be done to ensure continued emphasis on eco-innovation in the Med region? Can the European Union help to continue to promote eco-innovation?

Georgia Piligotsi: What is very interesting is that despite the financial crisis, the number of innovators and especially eco-innovators is increasing faster than before. This can be attributed to the reaction of local SMEs to the sustained recession mainly in southern European countries, and in particular in the Med region. After the first shock and the shrinkage of local consumption, SMEs realised that they need to foster innovation in order to become competitive enough to grow in foreign markets - and the financial crisis led, in part, both to an increase in exports and consequently in eco-innovation. However, a more detailed analysis is needed of this.

Nevertheless, we believe that the Med region has great development potential for eco-innovation, even under difficult conditions. Hopefully, regional governments will develop their eco-innovation strategies and will invest significant effort in promoting cooperative structures for sustainable regional development. Unfortunately, what seems to be inevitable at the moment is the increased brain drain caused by the financial crisis in these counties. This is perhaps the most devastating side effect of the financial crisis in the Mediterranean region. It threatens sustainability and regional social development. The role of highly qualified employees in supporting eco-innovation within companies is very relevant because of their technical skills, their comprehension of standard technical language and their capacity to transfer technical know-how into the business environment. However, insecure jobs and diminishing salaries force young and talented people to seek more promising job opportunities elsewhere in Europe.

The European Union should thus identify appropriate measures to support regional policies for sustainable development specifically addressed to the diverging needs of different macro-regions. When considering the Med Region in particular, one should consider that major investment in environmental technologies would remain latent as long as the region lacks scientific and technical expertise.

Ideally, regions should also try to stimulate the participation and collaboration of key actors, because this is expected to empower the local population and attract investors who wish to operate in a positive and promising business environment. Investors should come either from the local population, or be entrepreneurs who perhaps wish to cooperate in a network of innovation, creating some new eco-clusters. Local entrepreneurs and entrepreneurs active in neighbouring countries, or even emigrants, should be interested in investing back into their regions. Investments in environmental technologies are expected to attract talented human resources with significant expertise and academic background in the field. Investment will help to keep talented environmental graduates in the Med region, and will provide them with a suitable working environment to foster creativity, leading to higher quality in regional productivity.

MEDOSSIC project

Duration: April 2009-March 2011

Partners: The Regional Development Agency of Inner-karst Region (Slovenia), the Regional Development Centre of Koper (Slovenia), the Development Centre of Novo mesto (Slovenia), Larnaca District Development Agency (Cyprus), TecnoMarche (Italy), the Provincial Government of Malaga (Spain), Eastern Crete Development Organisation (OANAK, Greece), the Regional Development Agency of Porin Rijeka (Croatia), and the Directorate for Small and Medium Enterprises of Montenegro

Funding: €1,139,405 including €905,579 from the European Regional Development Fund

Website: http://www.medossic.eu