Second stakeholder meeting in Stara Zagora (Bulgaria) for the 2nd semester of the INNOGROW project.

On 22.03.2017 in SZREDA, Bulgaria was held a second stakeholders meeting. The meeting was attended by representatives of the Ministry of Economy in Bulgaria, the National agency for supporting SMEs, the Chamber of Commerce and Industry of Stara Zagora, the Agricultural Institute in Stara Zagora, the Agricultural Faculty of Trakia University, the local regional information centrer for EU funding and also representative from the organization “Club of the employer – Stara Zagora”.

Stakeholders presented the results of research in the implementation of new technologies by SMEs in rural areas, innovative business models in rural SMEs and barriers and incentives that affect the investments of SMEs in rural innovation. 3 specific issues were presented: 1) SMEs can’t obtain financing for their innovative ideas ; 2) SMEs in rural areas do not have the available capacity regarding human resources  3) SMEs in rural areas can not find enough information about relevant innovations.

SZREDA commented that they will present the KATANA accelerator as a step towards solving the problem of insufficient information on the financing of business ideas of SMEs in rural areas at an early stage. During the promotion of KATANA , business representatives in rural areas said they have obstacles such as language barrier and lack of expertise to apply and to various external (for Bulgaria) options for funding such as venture capital funds.

The idea which united the participants in the meeting is that an approach that combines on one hand small and medium businesses in rural areas and the other the state in the creation of associations that operate on the principle of those in the EU and have the power to represent and work on behalf and for the interests of their members - a group of SMEs in rural areas. The function of this types of associations is to be specifically targeted to help its members and include many activities: provision of information on financing and on good practices in innovation, preparation of project sheets and business plans, registration of trademarks and copyright protection. Associations can provide expertise and administrative capacity, which SMEs in rural areas need and are unable to provide themselves.    

The need to create such structures (associations) to help SMEs in rural areas was accepted by all participants. The participants discussed approaches for the forming of the assosiations, as currently SMEs have registered such structures voluntary. Participants shared their observations on the bad performance of current associations. It was proposed that membership in industry associations be compulsory for manufacturers. It was discussed whether the "mandatory" will be well received. It was argued that it is best to act by implementing the approaches: "bottom-up and top-down" to accept the establishment and functioning of the associations themselves by their members, on the other hand to ensure compliance with the relevant standards in the sector and the public interest in the utilization of public funds. As a good practice in Bulgaria may be found in the construction chamber (in particular) as well as examples of such associations in the countries of the project partners.    

One proposal is to implement inclusive approach of governance - "... including management, characterized by democratic process of decision-making based on equal or rotary participation of individual members of the association in its management activities. This managerial dimension distinguished associations of traditional businesses "- in this case the members of the associations to participate in their management.

The approach to the potential members must be very clear in terms of communication and marketing and the idea has to be explained in the best possible way - what are the benefits that are part of the state and are available only to this type associations.  Representatives of the banking sector, who attended the meeting also said that banks would be interested in providing financing options with favorable terms to members of such associations if they can be sure that membership in the association itself ensure capacity and quality.

It is necessary to discuss what can be the way of formation, and self-sustainability of these associations and their exact functions to be regulated; the creation of an interdepartmental working group between the Ministry of Economy and the Ministry of agriculture and food in Bulgaria.

All attendees of the event agreed that it is a very important aspect of the formation of such associations would be the monitoring of their activities. The results from the meeting will be formed as policy recommendation that can be implemented in the Annual programme for implementing the National strategy for stimulating rural SMEs in Bulgaria for 2017.