PLAN FOR FUTURE DEVELOPMENT OF THE BLACK SEA NETWORK FOR REGIONAL
DEVELOPMENT (BLASNET)
Summary
INTRODUCTION
This plan was entrusted by the Regional Agency for Entrepreneurship and Innovation - Varna (RAPIV)
and is performed under the project "Black Sea Regional Development Network" (BlasNET),
implemented within Joint Operational Programme "Black Sea basin 2007-2013", contract № 1.1
.3.65714.96-MIS-ETC 234-64832/30.08.2011g. with the Ministry of Regional Development and
Tourism, Romania.
The Consortium of the BlasNET Project is consisted of 5 partners, from 5 different regions, from the
following countries: Bulgaria, Greece, Moldova, Romania, and Ukraine. The BlasNET project is
funded under Priority 1 of the Programme: “Supporting cross-border partnerships for economic and
social development based on combined resources”. The main objective of the Project is the
establishment of Black Sea Network for Regional Development which will involve organizations that
support SMEs (business development agencies, organizations representing SMEs, business incubators,
branch chambers, as well as practitioners from universities and business, experienced in providing
business support). The realization of this Network will contribute for raising the competitiveness of
the SMEs from the Black Sea partner regions and their performance on the international markets,
through increasing the potential and international relations of the regional stakeholders. The
Network will create conditions for sustainable business information environment for SMEs from the
Black Sea Basin region.
The aim of the project "Black Sea Network for Regional Development" is to achieve sustainable
economic growth of the regions-partners under the project, to improve the competitiveness of their
SMEs and their performance on the international markets, through increasing the potential and
international relations of the regional stakeholders, by establishing a network among them. This
network will directly reflect to the competitiveness and potential of the SMEs from the region.
The Plan for future development of the Network includes the following points:
-
Review of the current situation of the main European Networks which support SMEs;
-
Review of the SMEs needs for support per priority sectors in the partners-regions;
-
Organizational structure of the Network;
-
Vision for development of the Network, including short-term vision for development (up to 2
years after the BlasNET project closure) and long-term forecast (up to 5 years after the
BlasNET project closure);
-
Exploration of different source of financing of the Network and plans for short-term
financing and long-term one.
I.
ORGANIZATIONAL STRUCTURE OF THE NETWORK.
The process the evolution of BlasNET is separated into three phases. The network has already
passed successfully Phase 1: Preconditions for BlasNET and now it is at the end of Phase 2: Forming
the BlasNET. Focal organisations are the project partners – RAPIV, URENIO, PIMM, ODIMM and AEDS.
The challenging next phase is BlasNET management. Managing BlasNET should be grounded on a
long-term strategy and a detailed plan for at least the next three years. Drivers for efficient and
successful BlasNET management should be the BlasNET Core unit and Management board. Research
1
results and theoretical sources suggest that bottom-up approach for network management could be
efficient in such cases.
The organizational structure up to 2 years after the completion of the BlasNet project is shown on
the Figure 1 below.
Fig.1. The organizational structure up to 2 years after the completion of the BlasNet project
Working in groups will be an efficient way for preparing suggestions to resolve and make decisions
about. The working groups could be specialized on marketing and PR, export promotion, innovation
projects, etc.
But for sustainabe development of a network (especially if it relies mainly on financing on project
by project basis) the main factor is continuous monitoring and control of network progess. Impact
oriented monitoring, focused focuses on those factors which the project can directly influence,
could be quite helpful in this respect.
II.
OBJECTIVES AND PRIORITIES FOR BlasNET DEVELOPMENT.
A. Short-term Objectives and Priorities for development.
The short-term priorities for and objectives for development of BlasNET are defined for up to 2
years after completion of the project. They depend on the current conditions from one side and the
recommendations for business cooperation among partners-regions identified in the Report under
GA1 Investigation and analyses on the other side.
The recommendations for future cooperation between BlasNet partners given in the Report with
concrete measures are based on the observations made during the Regional Analysis of the 5
countries and 3 sectors, the Survey on SME needs and the Regional Synthesis. All recommendations
are based on the following guiding principles:
-
Excellence and extroversion: the pursuit of excellence and targeting exports of
products and services should be the cornerstones of any initiative and investment.
2
-
Exploitation of comparative advantages of each region and sector: based on the
concept of Smart Specialization, it is argued that we need to move from horizontal
initiatives and investments towards initiatives and investments that support dully
justified and selected developmental options.
-
Exploitation of commonalities and complementarities of the five countries.
-
Building upon the capabilities of human resources available in the five regions
examined
The recommendations are directed towards 5 types of recipients: the policy makers either at the
local or the national level, the wider Business sector; the European Union services and other
international organisations that are implicated in forming entrepreneurship and development
policies, as well as providing financial means; the academia and research institutes as “knowledge
creators”, intermediaries and incubators as “knowledge providers”; and finally BlasNET consortium
members. They will be the base for the formulation of the objectives and activities of the Black Sea
Cooperation Network
The BlasNET members and stakeholders are engaged with economic activities and for more than 30%
of them innovation is a priority. Since the aim of the network is innovation and upgrading its type
should be CREATIVE REGION.
The BlasNET consortium should capitalize on the project’s activities by extending cooperation
beyond the timeline of the project as a core facilitator of local development and an intermediary
organisation that advocates innovation and entrepreneurial development by bringing together
SMEs, policy makers and knowledge providers. The priorities of such cooperation should be:
-
To explore synergies between the five participants,
-
To build up a knowledge base, that can be used to support policy options for the
development of the Black Sea region.
-
To expand the consortium by including more Black Sea countries and regions
-
To explore the feasibility to enhance partners’ cooperation by participation and
networking with EU wide networks ,
-
To promote twinning and staff exchange activities between consortium members
and the relevant stakeholders.
-
To provide ad hoc capacity building assistance between the members of the
consortium.
The main short – term goals are arising from these priorities. They could be united in 2 groups as
follows:

Short-term product-market goals:
-
Strengthening positions of BlasNET members in their countries.
-
Developing a code of conduct, internal rules, business model of the network.
-
Developing a specialized online platform for communication between network
members as well as between BlasNET and its stakeholders.

-
Developing services portfolio for national members.
-
Registering a trade mark.
Short-term strategic goals of BlasNET , defined in accordance with the product-market
goals, as follows:
-
Increasing the administrative and management network capacity.
3
-
Network promotion and attracting new members in order to increase network
capacity for offering combined products/services.
-
Offering services to network participants (both partners and members)
-
Developing and offering complex business solutions to SMEs.
Information work and PR are fundamental for the success of networks. BlasNET is open and diverse
network, and needs a rich and clear information basis to be internally integrative and externally
attractive.
The decisive questions when developing PR plan are as follows:

Communication plan as the basis.

Network needs professional information work.

It must be target group specific and aim for clear information goals.

Media mix important.

Written and personal information.

Information quality helps network brand formation.
The BlasNet PR strategy management and should focus on raising awareness about the benefits for
different participants in such cooperation, which will be:
o
for Chambers of Commerce and Business organisations – success of member SMEs on
international supply markets;
o
for Regional Development Agencies - international services for SMEs in their region, export
growth for their regions;
o
for public authorities – international competitiveness of their region‘s business base;
o
for knowledge institutions – applied research and innovation transfer.
B. Services offered by the consortium and activities in the future.
BlasNET should provide services covering the whole spectrum of economic activity in general.
Secondary data and results from analyses suggest that SMEs in Black Sea region face a variety of
problems. The importance of network services have been evaluated by the BlasNET members and
presented in previous report as follows: International partner network (4.75), Marketing & PR
(website, online directory) and Access to capital (Venture Capital) (4.50), Lobbying (tax and
customs concessions, trade fair promotion) - 4.42, Quality management and certification - 4.33
(Scale range from 5 = Extremely important to 1 = Not important at all)
According to the proposed organizational structure, the following network services could be offered
by the responsible WGs in a short term plan:


Export promotion
-
Providing information about new market possibilities
-
Supporting international marketing strategies
-
Stimulating joint marketing activities
-
Lobbying (tax and customs concessions, trade fair promotion)
Business events
-
Information events on specific topics (Organisation of international workshops,
conferences and summer schools on issues that are of high priority for the
participating regions, in cooperation with the academic organisations of the regions)
-
Forums and discussions
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

Training and education
-
Training and Continuing Professional Education (CPE)
-
In-company training
-
Supporting competence development
Lobbying and communication
-
Developing communication plan for attracting new members
-
Developing communication plan for maintaining relationships between partners and
members
-
Developing communication plan for external audiences and stakeholders
In view of preparing the regions of the 3 EU MS (Bulgaria, Greece, Romania) for the new structural
funds programming period (2014-2020) the programming authorities at a national and local level
should emphasise improvement of the framework conditions for SME development. The consortium
should be in a constant dialogue with all the relevant stakeholders (industry, academia, society) and
local authorities and should advocate for the prioritization of policies related to SMEs development.
The consortium should introduce to national and regional authorities the recommendations arisen
during the work within the project about the improvement the framework conditions for SME
development.

Capacity building
-
Intra-network commerce
-
Intra-network exchange of know-how
-
Joint R&D
-
Promoting innovation
-
Quality management and certification
Networking with relevant academic/research organisations will assist SMEs in tackling specific
technology problems.
SMEs from all the participating countries will present their “technology request” and the consortium
will facilitate linking them with the appropriate “knowledge provider”. Knowledge providers would
be asked to “bid” for tackling of the particular problem/request and the most appropriate would be
selected based on pre-set criteria.
Other innovation services for SMEs could be: Information on technologies and up-to-date research
developments, Technical assistance for innovation management
This range of services should be enlarged having in mind current conditions of the SMEs sector in the
Black Sea region, identified by the analyses of SMEs needs and the concrete measures proposed by
the external experts to improve the environment in the sector. During the 2-years after completion
of the BlasNet period the focus should be mainly on such services as:

Project management, which will be the main source of funding in the beginning.
-
Research for new project partners and project opportunities
-
Proposing new project initiatives
-
Initial project organization
As a whole the Network should support and facilitate creation of local clusters in view of
overcoming the small size of the individual companies, create economies of scale (i.e. in
procurement), create a common brand, coordinate export efforts, collectively exploit knowledge
and increase negotiation capabilities of the individual companies. Participation of local knowledge
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providers (i.e. higher education and research institutes) in the clusters would greatly enhance the
innovative potential of the cluster.

Cluster services
-
Marketing & PR through BlasNET online platform
-
Market studies, information, databases
-
Applied R&D
-
Policy action & lobbying
-
Providing and using services to businesses
In Tourism sector the Network should establish cooperation between Associations of Tourism
enterprises in the five countries with the aim to jointly promote the Black Sea as tourism
destination and develop tourism concepts based on common and complementary features, promote
Black Sea Cruising tourism, etc.
Also the establishment of a transnational cluster/network for development of “Black Sea
Tourism Quality Trademark” with the active participation of the local government as well as the
local tourism business associations will support the common “Code of Practice” for tourism at the
Black Sea, based the requirements of major international tour operators and market research in key
markets for the Black Sea Region and common standardization and certification procedures of the
tourism product.
For ICT Sector - the Network should assist SMEs to cooperate with Universities and secondary
education in order to implement a campaign to promote ICT careers to students, teachers and
parents.
The establishment and development of a transnational Black Sea ICT cluster/network that will
aim to concentrate the strengths and capacities of the ICT industry in the five countries (with the
potential to expand in other ICT and Black Sea countries) and provide ICT industries with services.
For Maritime industry the Network should cooperate with regional business stakeholders in order
to promote the establishment of clusters that will provide products and services in the shipping
industry and the ship manufacturing industry that is developed around the main ports of the
regions of the partnership.

Participation in other European Networks.

Creation a Data Bank of information that can be used by SMEs.
This Data bank can be created if the network unites joint efforts or cooperation between business
representing organisations and business support organisations in the participating countries by
exchanging information on markets, products, technologies, barriers and opportunities
C.
Long-term Objectives and Priorities for development.
The main long term goal for the BlasNET (up to 5 years after the completion of the project) is to
create Brand Identity for BlasNET. As it is noted in the previous report developing branding
strategy for a diversified network as BlasNET (type “Creative region”) requires support from local
authorities. That is why, it is necessary to integrate the key aspects of BlasNET branding strategy to
Municipality plans and strategies. Thus it will possible to apply for public funding.
Also in the long – term the BlasNET could advocate for the development of Science/Technology
Parks in and around the ports. The concept of a Technology Park dedicated to maritime
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transportation, shipping, ship building, fishing and other related and complementary activities will
have to mature bottom – up from a cluster of interested parties and then brought up to local/
national authorities to ask for regulatory and financial support.
As it was identified by the project Joint analyses the variety of problems faced by the SMEs in Black
Sea region face could find a solution by a kind of a one-stop business service provider. BlasNET
could be such a one-stop hub for SMEs business support and its long-term goals should be
consistent with a sustainable solution to meet the needs of SMEs:

Long-term product-market goals:
-
Positioning BlasNET as a one-stop business hub for SMEs.
-
Successful launch of at least two BlasNET products/services on international
markets.

Strengthening international position of BlasNET.
The long-term strategic goals of the BlasNET are defined in accordance with the productmarket goals as follows:
-
Network recognition as a business hub.
-
International network development.
-
International market entry with one or two innovative products/services.
It was discussed above that the success and sustainability of the Network are function of the
continuous impact oriented monitoring. It could be implemented on areas decisive for achieving
results: the quality of implementation of activities, organizational procedures and processes,
changes in the behavior of partners and target groups. It is dialogue-oriented, and the results of
monitoring can be simply displayed graphically. This makes it very suitable for participative
procedures, e.g. in the form of workshops with the implementation partners.
III.
SOURCE OF FUNDING OF THE NETWORK.
Access to finance often remains one of the key factors in setting up and developing an organization.
All forms of finance do not have the same aims. Similarly, the motivations and criteria of different
funding parties will vary according both to the type of product presented and the level of risk linked
to it. Therefore, business plan quality and content, as well as its presentation to potential investors
need to be adjusted to their respective specific requirements.
In order to be ensured sustainability of the services provided by the Network is explored the
following funding streams:
A.Program/ Project Grants.
The study of the future programs includes further cross border cooperation in the Black Sea region
but also relevant parts of HORIZON 2020, the COSME programme (Programme for the
Competitiveness of Enterprises and SMEs 2014-2020) as well as local ERDF and ENPI funds. For
example:

Since 2014 the ENPI will be replaced by the European Neighborhood Instrument (ENI), which
will provide increased support to 16 partner countries and territories to the East and South
of the EU’s borders. The proposed ENI budget for the period 2014-2020 is €18.2 billion, 40 %
up on the amount available under the ENPI from 2007-2013. The ENI will continue to provide
7
the bulk of funding to the European Neighbourhood countries, essentially through bilateral,
regional and cross border co-operation programmes.

Horizon 2020 is the financial instrument implementing the Innovation Union, a Europe 2020
flagship initiative aimed at securing Europe's global competitiveness. Running from 2014 to
2020 with an €80 billion budget, the EU’s new programme for research and innovation is an
integral part of the drive to create new growth and jobs in Europe. Support will be given in
'Inclusive, innovative and secure societies' to policy learning and advice with the aim to
reform research and innovation policies. This will also involve networking and twinning
schemes enhancing the connections between researchers and innovators in all Member
States and regions.

The Commission has proposed a "Programme for the Competitiveness of Enterprises and
SMEs" (COSME) with a total allocation of € 2.5 billion for the period 2014-2020.
The Network could receive funding for some actions under the specific objectives: To improve
access to markets inside the Union and globally as far as the midterm target of the programme till
2017 is to be signed 3000 partnership agreements per year with the European Enterprise Network.
B. Membership Fees.
The membership fees are an additional source of funding for the network.
The amount of the annual membership fee depends on the category of membership, e.g. honorary
members, full members, associate members, exchange members, SMEs, academia, physical entities,
etc.
Any amendment to the amount payable in annual subscriptions fees by a member is decided by the
General Meeting.
C. Incomes from Organisation of Events, Publication of Reports and Statistics and Other
Services.
The Network could also be financed by private or public contributions and payments for services
rendered within the context of the Association’s objects, which must be approved by the General
Meeting. The type of the sources depends on the variety of the services – organization of the events
as seminars, workshops, conferences, B2B meetings, etc; publication of reports, statistical data,
newsletters, etc.; consulting services for SMEs, etc.
D. Donations and Sponsorships.
Donations and sponsorships will be accepted if only they are provided to support the network in its
scope of interest.
And in-kind donations could be one of the main supporting tools of the Network during the first
years of its existence.
An innovative way of donations could be used as so called “internet donations” or “crowd funding”.
Crowdfunding is the use of online communities to raise money from individuals to fund a project or
an initiative1. The investors/donors are typically not professional financiers. Crowdfunding
1
All money. What for whom? EURADA
8
platforms are infrastructures for people wishing to see that their money goes into well-defined
entrepreneurial projects.
Using the emotion and empathy of a target group of citizens to finance ideas, projects or initiatives
is not new. The novelty is the use of the power of internet social media to reach donor and investor
communities without geographical constraints.
According to data published on line by Forbes on 11.5.2012, the world crowdfunding market in 2011
broke down as follows:
• donations 49 %
• loans 22 %
• equity 18 %
• rewards 11 %
The volume of funds raised worldwide by the crowdfunding industry in 2011 is estimated at USD1.5
billion (Source: massolution), of which only 10% in Europe. In the USA, this volume is estimated at
USD920 million in 2011 (Source: MIT). In France, between 2008 an 2011, 25 platforms have financed
15,000 projects for an amount of EUR 6 millions thanks to 35,000 investors2.
E. Short-term Plan for Financing.
It is foreseen that during the first two years after the closure of the BlasNET project the main
source of funding of the network to be grants from joint projects. It is also expected that in-kind
donations will be made by the members of the network.
The received incomes will be used for covering the expenditures for the staff and external experts
involved in everyday work of the network.
Several regional events should be organized per year, such as trainings of the staff, Annual
conference with B2B meetings, press-conferences, etc.
Organizing of an appropriate advertising campaign is crucial for the network expansion and drawing
new members. Different communication tools will be used to raise the level of information about
the network mission, objectives, activities and results, addressed to the target groups, media and
the large community. The network web-portal will be an important support to its expansion.
Information on each activity field and specific actions will be the included in the website. In
relation with creation of the Data Bank the networking area of the web-portal is foreseen to be
upgraded.
In the range of the other direct costs are planned costs for participating in European networks,
travel costs for the staff of the network, etc.
The distribution of the budget for the 1st two years after the closure of the project is presented in
Table 1.
Table 1. Short-term Budget of the Network
Incomes (in thousand euro)
2
-
Project funds
-
Membership fees
1st year
2nd year
total
200
250
450
150
200
350
La Tribune, 27.3.2012, Meeting of 26.3.12 at the Palais Brongniart
9
-
Services, events, publications, etc.
-
Donations and sponsorships
Costs (in thousand euro)
50
50
100
200
250
450
-
Staff costs
130
160
290
-
Organization events
26
32
58
-
Advertising
15
18
32
-
Publications
10
15
25
-
Other direct costs
10
10
20
-
Administrative costs
9
15
24
0
0
0
Result
F. Long-term Plan for Financing.
In a long-term plan (up to 5 years after the project closure), it is foreseen that additional sources of
funding to appear, such as membership fees and incomes from provided services, publications and
organized events, sponsorships, donations. It will be kept the tendency for grant funding for this
period, so the total amount from project funds is expected to be equal to 550 K €. After the 2nd year
of the project closure, the members of the network will start to pay a membership fee which annual
amount will depend on the type of the membership. The incomes from the services, fees for
participation in the events, publications are expected to be realized during this three year period.
The total amount of the incomes of the network for this period is 1,050 k €.
The structure of the costs will be kept the same as the one defined for the short-term planning. As
far as it is expected that the scope of the activity of the network will be enlarged, the amount of
the costs will follow the same tendency. The budget for this period is presented in a Table 2.
Table 2. Long-term Budget of the Network
Incomes (in thousand euro)
3rd year
4th year
5th year
total
300
350
400
1050
200
200
150
550
-
Project funds
-
Membership fees
10
20
40
70
-
Services, events, publications, etc.
40
80
170
290
-
Donations and sponsorships
50
50
40
140
260
320
355
935
170
170
180
520
32
50
50
132
Costs (in thousand euro)
-
Staff costs
-
Organization events
-
Advertising
8
15
20
43
-
Publications
15
30
30
75
-
Other direct costs
20
30
50
100
-
Administrative costs
15
25
25
65
40
30
45
115
Result
10
400
350
300
250
Incomes
Costs
200
Result for the year
150
Accumulated result
100
50
0
1st year
2nd year
3rd year
4th year
5th year
Figure 2. Forecast for the period up to 5 years after the closure of the project
Table 3. Financial Results of the Activity of the Network per Years
1st year
2nd year
3rd year
4th year
5th year
total
Incomes
200
250
300
350
400
1500
Costs
200
250
260
320
355
1385
for
0
0
40
30
45
115
Accumulated
0
0
40
70
115
Result
the year
result
The data in the Table 3 shows that in long-term period (up to 5 years after the closure of the
project) is expected sustainability of the network and after the 2 nd year of the forecast period it
runs completely self-supporting and formed a positive financial result which could be reinvested
in future development of the network.
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CONCLUSIONS
Despite the big differences between the three sectors (ICT, Maritime industry and Tourism) as well
as the big differences between the five partners-countries, SMEs are facing the same problems and
challenges, which are:

Coping with the effects of the current global economic crisis.

The lack of access to financial institutions.

The low level of internal R&D and innovation coupled with weak or non-existing links
between businesses and academic research.

The unavailability (or the low level of functionality) of supporting mechanisms and
intermediaries who help SMEs overcome some of these problems and link them with peers,
academics and experts.

All SMEs are dissatisfied with state policy in their regions and require more support of state
policy for SMEs in a large number of areas (simplification of procedures, reduction of
bureaucracy, facilitation of access to finance etc).

ICT companies seem to be more extrovert and (obviously) make better use of technological
innovations while the other sectors need more assistance in that respect. Ability to innovate
in cooperation with academic institution (at a local and international level) will be crucial
for the future development of the sector.

In Tourism the key challenges for all counties are to overcome seasonality and the
dependence on low-cost, single model tourism plus to invest strategically in higher added
value forms of tourism.

Both tourism and maritime industries are sectors that some of the countries examined are
competing at a global level, something that is not true for ICT

Maritime transportation future development may prove to be the catalyst for the
development of all maritime related industries. Key elements will be the formulation of
public – private partnerships at a strategic level that will facilitate much needed
modernization investments and inclusion in major transportation networks (at the EU and
global levels).
Because of these, the Plan suggests that successful transnational network development requires
greater emphasis on the role of local government in stimulating regional clusters, SMEs and
territorial brands by developing and implementing territorial branding strategy on a regional level.
Following the proposed organizational structure for the Network, short-terms and long-terms goals,
it is expected that in long-term period (up to 5 years after the closure of the project) is expected
sustainability of the network and after the 2nd year of the forecast period it runs completely selfsupporting and formed a positive financial result which could be reinvested in future development
of the network.
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