UNECE presented its innovation policy insights during the Small Business Act for Europe (SBA) stakeholder meeting at the Organisation for Economic Cooperation and Development (OECD) on 19 June 2023 in Paris. This meeting was a platform for experts on small and medium enterprises (SME) policy, government representatives from the region, and international stakeholders to discuss the outstanding challenges to SMEs in Armenia, Azerbaijan, Georgia, the Republic of Moldova, and Ukraine. It also served as a platform to discuss the preliminary results of the ongoing SME Index evaluation and present the prelusive scores to the participating countries. Moreover, it provides a forum to debate information gaps and explore initial suggestions for policy reform.
The SME Policy Index, developed by the OECD in partnership with the European Commission, the European Bank for Reconstruction and Development (EBRD), and the European Training Foundation (ETF), is an influential policy instrument designed to support SMEs in transition economies and promote SME-friendly policies. The instrument is based on the ten tenets of the Small Business Act for Europe, offering an extensive selection of measures that direct the formulation and implementation of policies for small and medium enterprises. Policymakers from the region rely on the index as for evidence-based insights that enhance the competitiveness and growth of SMEs.
Invited as experts UNECE focused particularly on the innovation policy for SMEs segment of the SBA index during its intervention. The findings, drawn from UNECE’s deep expertise in innovation governance within the region, supplemented the OECD's observations and added a fresh perspective to the ongoing discourse. Throughout the discussion, UNECE underscored the importance of digital and green transformations for sustainable development. Both transformations are areas where UNECE and OECD's work significantly complement each other, with both organizations committed to fostering an environment that encourages and supports SMEs' innovation.
UNECE covered the following key points:
Innovation Policy Framework: The OECD noted several challenges in building policy frameworks for innovation in SMEs. The difficulties of defining clear mandates of innovation agencies and making policy more systematic, noted by OECD, correspond to UNECE’s findings. Building on the recommendations from the recently published Innovation for Sustainable Development Review of Armenia, UNECE proposed improving innovation policy coordination across ministries through regular working group meetings, engagement of local authorities, and establishment of national innovation councils or equivalent bodies with diverse membership, clear mandates, adequate funding, and robust strategies. The Roadmap on Innovation and Technology Transfer for Moldova offers more guidance on how to set up an effective national innovation council.
Government Support Services: The SME Policy Index noted that the number of innovation infrastructure provisions in the region is expanding. Commenting on this finding, UNECE pointed out that while such progress is optimistic, it is also important to assess the quality of such support mechanisms. According to UNECE’s latest findings, innovation infrastructures often lack coordination and do not adequately cater to all SME needs, suggesting a broader strategy, geographical expansion, and regular evaluation and monitoring of support mechanisms.
Science-Business Linkages (SBLs): Despite progress in bridging research institutions and industry, the UNECE secretariat pointed out the underutilization of all facets of SBLs and emphasized the need for technology transfer, training, problem-solving, and knowledge-intensive services. This point reinforced OECD’s finding that research-business linkages across the region remain underexploited. UNECE dives deeper into the topic of SBLs in its flagship publication – the Interim Innovation Policy Outlook (IIPO).
Financial Support for Innovative SMEs: In resonance with the OECD’s findings, the UNECE secretariat identified an overly strong policy focus on the ICT sector, suggesting that other sectors might be overlooked. This intervention highlighted the need to view innovation in SMEs as a broader improvement in products, processes, and services in all sectors beyond ICT. In addition, the intervention highlighted that Innovation Enhancing Procurement (IEP), covered in UNECE’s recent handbook, could be an effective mechanism to create demand for innovation. UNECE also acknowledged the potential role of the diaspora in driving investment and innovation. Both points contributed to the discussion of policy mechanisms to support financing for innovation in SMEs.
Outcome-Oriented Indicators: UNECE addressed the issue of collecting and accessing innovation statistics, which was highlighted by OECD, and suggested the need for further capacity building on the collection and use of data in policymaking.
UNECE commended the substantial progress made by each country in strengthening the business environment and digitalizing public services and reaffirmed its commitment to support sustainable economic growth in the Eastern Europe and South Caucasus region.
This fruitful interaction at the SBA stakeholder meeting demonstrates the importance of international organizations' partnerships in pursuing sustainable development and marks another milestone in the cooperation between UNECE and OECD. The two organizations share a rich history of collaboration, strengthening the quality and impact of their work through cooperation in the Eastern Europe and South Caucasus region. Earlier this year, the deputies of the two organizations discussed synergies and potential for collaboration, especially in their work on sustainable development of the five member States from Eastern Europe and the South Caucasus – Armenia, Azerbaijan, Georgia, the Republic of Moldova, and Ukraine.
UNECE's focus on innovation governance, examining science and research systems, human capital, and labour market issues that impact innovative development, resonates with the work of OECD, particularly its SME Policy Index. In this constructive collaboration, UNECE relies on the SME Policy Index for their analysis, highlighting a genuine example of reciprocal exchanges of information. These efforts highlight the importance of strategic collaborations between international organizations to advance sustainable development goals.