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Innovation clusters that involve relevant stakeholders, from public authorities to the private sector and academia are key to reducing brain drain and promoting local development. We talked about it with Jolta Kacani, professor at the University of Tirana
How do you deal with innovation in your academic work?
One of the subjects I teach is research methods. I focus on fin-tech to study how new financial systems and mechanisms help enterprises to better cope and manage their daily operations. One of the main areas of my work is digitalisation: I help enterprises to operate online, without having to issue every document on paper, by providing the know-how together with accounting and financial management skills.
How would you describe the innovation ecosystem in Albania?
Albania has big innovation potential, although each sector has a different development pace. The ICT, the fin-tech, or the service sectors, for example, are more innovative than manufacturing – where we are still in the phase of no-value-added production – probably because the Albanian economy is mostly based on the tertiary sector.
Who are the key actors in innovation?
I believe that youngsters are the most innovative actors, they try to bring new ideas, develop new technology, and have a more avant-garde approach. Other drivers of innovation are incubators and innovation hubs, or all those that support the development of start-ups.
Ten years ago, the idea did not even exist here, but in the last few years, several start-ups were created, especially in the ICT sector. However, many of them struggle to get sufficient funding, and this has obviously an impact on their development: the difficult part is to remain on the market and survive in the first 3 to 5 years. Those that manage to do it, then try to move on to a new scale. There are also start-ups that work completely online and operate not only in the country but also in the region. Most of the start-ups are run by young people; as I said, they are very keen to innovate and always try to bring new ideas and solutions in areas that were not even considered before.
Of course, academia is also part of the ecosystem. for example, at the Faculty of Economics of the University of Tirana, we organise competitions and give prizes to incentivise students to develop their ideas. There is also an Innovation Centre for Entrepreneurship dedicated to the tourism industry that promotes joint programmes with a group of enterprises that help students with their projects and finance the most innovative proposals. We also invest a lot in providing our students with new and innovative research skills.
However, the amount of the state budget that is allocated to research and development (R&D) is very limited – only 1% of the GDP – and this is a problem. This is why we try to identify alternative ways of cooperation with large enterprises.
What is the profile of these young entrepreneurs?
On the one hand, there are people with solid technical skills who maybe lack the entrepreneur’s spirit, the leadership capabilities, and the managerial skills needed to run an enterprise. On the other hand, there are those with very good entrepreneurship and management skills, but who don’t have strong technical competencies. Of course, the best option is to have a group of people with different strengths and skills: that’s how you can be successful.
How does brain drain affect Albania?
Brain drain is a problem that affects many countries in Europe to different degrees. Of course, some countries such as Albania have been more severely affected by it, especially after the crises of recent years. I believe that the long pre-accession phase of European integration has also played a role. However, one interesting trend that I noticed is that as Albanians are leaving, other people are coming: there are Italians, Indians, and Germans that have moved here and tried to work in the country. So as Albanians are leaving, young foreigners are coming.
What would be in your opinion a good strategy to attract qualified personnel?
For us, attracting qualified personnel in academia is very difficult, mostly because we have limited funding. There are a lot of young people that have studied abroad and would like to come back and work in academia, but they are reluctant because of the low salaries: many qualified people try to be a part-time employee rather than full-time, so that they can have other engagements, maybe in enterprises or big firms. I think it also has to do with age. Youngsters at the beginning of their careers may be ready to work many hours a day to progress and have a better salary, but once they have reached a certain position in their professional lives and maybe start thinking about having a family and so on, they may be more prone to settle down and work in this sector.
I think the pandemic has had a positive effect when it comes to brain drain because even people who work for international enterprises find it more convenient to live here. I know people who are employed by American or European companies that live here because it’s cheaper and closer to family, they have their own home and do not need to pay rent and so on.
Talking about the financial aspect, is there public or private funding to support innovation?
Finances are always limited. There are some public sector funding lines that were introduced by the law; they are early-stage funds for different categories of start-ups.
When it comes to the private sector, most enterprises or start-ups rely on foreign grants from international donors or development aid agencies, for example. However, as the amount of grants is getting lower every year, people try to find more alternatives: they look more for joint partnerships, angel investors or venture capitalists, although these options are more limited.
Working with financial institutions or the banking sector is more difficult because they usually have high standards – more than one year of activity, a detailed business plan etc. – and do not offer special rates for these categories of enterprises.
Albania has recently opened the accession negotiation with the EU. What role does the EU play in innovation development? What do you think about the EU-sponsored Smart Specialisation Strategy (S3)?
I learned about the S3 of the EU for the first time in 2018. I was involved as a representative of the Western Balkans region in a group of experts of the DG REGIO tasked with the analysis of smart specialisation processes, especially with regard to the EU cohesion policy. Our aim was to introduce the concept of smart specialisation into the countries’ development strategies. My contribution was mostly to the digital agenda for the Western Balkans and the integration of regional markets in global value chains (GVCs).
My impression is that people here still don’t understand what smart specialisation is, you cannot have a smart specialisation in everything. The most important thing for the strategy is to prioritise key sectors for the country and then try to favour a domino effect in other areas.
Why do you think that people know so little about the strategy?
The problem is that there is no communication nor information sharing on the concept of smart specialisation, so I would be surprised if entrepreneurs knew how it works. Now that the negotiation process has started, I believe that we will talk more about smart specialisation and maybe it will be easier to digest and incorporate this concept into our development strategy.
This material is published in the context of the project "Human capital mobility of and from the Balkans: when innovation succeeds against brain drain" co-financed by the Ministry of Foreign Affairs and International Cooperation (MAECI). MAECI is in no way responsible for the information or points of view expressed within the framework of the project. Responsibility for the contents lies solely with OBC Transeuropa. Go to the project page
