The World Bank Implementation Status & Results Report Serbia Accelerating Innovation and Growth Entrepreneurship (P170185) Serbia Accelerating Innovation and Growth Entrepreneurship (P170185) EUROPE AND CENTRAL ASIA | Serbia | Finance, Competitiveness and Innovation Global Practice | IBRD/IDA | Investment Project Financing | FY 2020 | Seq No: 5 | ARCHIVED on 28-Jul-2022 | ISR52329 | Implementing Agencies: Ministry of Education, Science and Technological Development, Republic of Serbia Key Dates Key Project Dates Bank Approval Date: 13-Dec-2019 Effectiveness Date: 18-May-2020 Planned Mid Term Review Date: 24-Oct-2022 Actual Mid-Term Review Date: Original Closing Date: 30-Sep-2024 Revised Closing Date: 30-Sep-2024 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The project’s development objective is to improve (i) the relevance and excellence of scientific research, and (ii) innovative entrepreneurship and access to finance for enterprise growth, as a way of contributing to Serbia’s growth and competitiveness. Relevance of research refers to the potential of research results to be commercialized on the market, thus contributing to the economy, while excellence refers to international recognition of the quality of the research. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Research Sector Reforms:(Cost $38.00 M) Enterprise Acceleration:(Cost $8.00 M) Project Implementation, Monitoring, Capacity Building:(Cost $2.00 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Overall Risk Rating Moderate Moderate Implementation Status and Key Decisions Project implementation is advancing well. To ensure continued timely progress toward the Project Development Objectives, the Bank team is discussing with the PIU adapting current disbursement arrangements to better suit implementation needs. The PIU continues to be effective in coordinating tasks across the responsible agencies and ministries, including those related to procurement, financial management, technical implementation, and overall project management. Over the past months, the PIU has grown in terms of experience and expertise, and has shown great competence and efficiency, dedicating extensive efforts in the RDI transformation component. Considering the scope and volume of work, and the number of RDIs participating in the transformation process, increasing overall capacity of the PIU, particularly building the capacity for Environment & Social (E&S) safeguards, as well as for managing the RDI sub-component, remains a priority. Moreover, all project stakeholders are 7/28/2022 Page 1 of 9 The World Bank Implementation Status & Results Report Serbia Accelerating Innovation and Growth Entrepreneurship (P170185) expected to further benefit from additional technical assistance, financed by the European Union’s Instrument for Pre-accession Assistance (EU IPA) contribution to SAIGE. Ongoing programs of the Science Fund are progressing well. After the initial delays in evaluation and selection, implementation of the IDEAS Program, the largest program of the SF, is now underway. The Special COVID-19 Program, first to be supported by SAIGE, is on track. A new IDENTITIES Program was launched in March 2022, while two new programs (GREEN and PRISMA) are expected to be launched in June. Administrative procedures have been adapted to enable timely review and evaluation of applications (estimated at around 1000). The SF has made progress in building its institutional capacity, including adding a full time, experienced Financial Manager. The Katapult Acceleration Program, launched in October 2021, is progressing well. Out of 148 submitted applications, 41 were pre-selected and invited to present their companies to the independent investment committee, before 19 companies were selected for participation in the first cohort. The onboarding week (March 2022) was followed by the in-person Katapult Residency week (April), where companies participated in intensive training and matched with over 30 mentors from Serbia and around the world. Following the intensive mentoring and capacity building concourse during the eight-week period, all 19 companies had the opportunity to present their fundraising pitches to over 40 early-stage investment funds and over 20 angel investors, at a brisk, in-person Demo Days session (May 2022). This resulted in over 60 post-demo meetings scheduled between investors and participating companies. Three companies are actively discussing terms of possible investment. The R&D Institutes transformation process is progressing well. The six RDIs selected in the first group signed MoUs in December 2021, and the Agreements with MoESTD, related to the transfer of funds in April 2022, to allow implementation of their transformation plans (TPs). International and local experts and consultants have been engaged to work closely with the RDIs in executing their action plans and meeting the set milestones. The second group of six RDIs completed the external assessment process and developed their respective TPs. Implementation is expected to start soon by four (4) of the six (6) RDIs in this group, following the signing of the agreements with the Ministry. The remaining two (2) RDIs are awaiting budget details from the Government before finalizing their Transformation Plans. The third group of eight RDIs started the external assessment process in May 2022. In addition, several other RDIs and faculties, namely those related to biotechnology and envisaged to participate in the BIO4 Campus, have expressed interest in undergoing the assessment and taking part in the transformation program. This component has surpassed expectations in terms of strong interest from the RDIs, as well as their willingness and readiness to transform and evolve in line with best practices. The Diaspora Facility, aiming to engage the diaspora in the development of research and innovation ecosystem in Serbia, has been limited in implementation and held on hold due to COVID-19 travel restrictions. Despite the challenges, academic diaspora members have been included in diverse roles under both SF and IF calls. The Bank team was also engaged in high-level discussions about the strategic direction for the Innovation Fund. After a decade of successfully implementing various programs, and expanding the offering of different instruments, there is a sense that this is a good time to take stock and optimize the IF portfolio, especially given that some of the programs overlap in terms of target audience and support provided. The Bank and the IF agreed to continue the dialogue on this, including in the context of the upcoming evaluation of various programs supported by the SAIGE project. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance Substantial Moderate Moderate Macroeconomic Moderate Moderate Moderate Sector Strategies and Policies Substantial Moderate Moderate Technical Design of Project or Program Substantial Moderate Moderate Institutional Capacity for Implementation and Substantial Moderate Moderate Sustainability Fiduciary Moderate Moderate Moderate Environment and Social Moderate Moderate Moderate Stakeholders Substantial Moderate Moderate Other -- -- -- Overall Substantial Moderate Moderate 7/28/2022 Page 2 of 9 The World Bank Implementation Status & Results Report Serbia Accelerating Innovation and Growth Entrepreneurship (P170185) Results PDO Indicators by Objectives / Outcomes Improving relevance and excellence of scientific research IN01167208 ►Number of scientific publications in top 10 percent of internationally recognized journals (annual, not cumulative) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 1,000.00 854.00 1,077.00 1,100.00 Date 31-Dec-2019 10-Nov-2021 07-Jul-2022 29-Dec-2023 This indicator measures both the quantity and quality of the scientific output of the Serbian research community. A time lag can be expected between project activities and their impact on publication numbers and quality. Comments: NOTE: Value of the indicator for end-2020 is 1,067. Value from the previous ISR (1,352) includes entire 2020 and the first quarter of 2021. IN01167210 ►Number of collaborative applied research projects (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 10.00 291.00 150.00 Date 31-Dec-2019 10-Nov-2021 07-Jul-2022 29-Dec-2023 This indicator measures the improvement of relevance of Serbian scientific research by looking at the number of projects which include collaborations with international researchers, diaspora, private sector Comments: and others. The indicator will include all such collaborations supported through component 1 of the project. Improve innovative entrepreneurship and access to finance for enterprise growth IN01167209 ►External investment generated by participating companies (USD million) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 4.00 Date 31-Dec-2019 10-Nov-2021 07-Jul-2022 29-Dec-2023 This indicator measures the impact of the accelerator program by looking at the ability of participating Comments: firms to generate external investments. IN01167211 ►Number of new or improved innovative products or services introduced to the market (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 19.00 50.00 7/28/2022 Page 3 of 9 The World Bank Implementation Status & Results Report Serbia Accelerating Innovation and Growth Entrepreneurship (P170185) Date 31-Dec-2019 10-Nov-2021 07-Jul-2022 29-Dec-2023 This indicator measures the impact of the accelerator program through looking at the final output of the participating companies in the form of new or improved innovative products and services introduced to the market. Products and services will be considered to be new or improved if they meet the criteria specified in the Oslo Manual for measuring innovation. Thus, in addition to products or services marketed for the Comments: first time, products and services will qualify if they achieve “improvements in technical specifications, components and materials, software used as part of the product or service, user friendliness, or other functional characteristics.” Further, multiple improvements will be counted only once per company, during the period of the project. Intermediate Results Indicators by Components Subcomponent 1.1 Serbia Science Fund IN01167213 ►Amount of grant awards by SF, cumulative (USD million) (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 1.30 3.11 25.00 Date 31-Dec-2019 10-Nov-2021 07-Jul-2022 29-Dec-2023 This indicator will look at the level of SF disbursement of grants from loan funding. It will also measure Comments: which percentage of this funding is allocated to projects with women as principal investigators. IN01167219 Percentage of which going to projects with women principal investigators (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 56.00 56.00 25.00 IN01167221 ►Amount of international funds attracted by SF supported projects (USD million) (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 5.00 Date 31-Dec-2019 10-Nov-2021 07-Jul-2022 29-Dec-2023 This indicator will measure how much research teams supported by the SF will be able to generate additional research funding from international sources (EU and others). A time-lag can be expected Comments: between the beginning of the their SF funding and obtaining additional grants. IN01167225 ►Number of publications supported by SF programs (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 2.00 23.00 80.00 Date 31-Dec-2019 10-Nov-2021 07-Jul-2022 29-Dec-2023 7/28/2022 Page 4 of 9 The World Bank Implementation Status & Results Report Serbia Accelerating Innovation and Growth Entrepreneurship (P170185) This indicator will measure the scientific output of SF programs by looking at the quantity of publications Comments: resulting from SF supported projects. A time-lag of two years can be expected. IN01167230 ►Number of SF staff trained (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 9.00 34.00 20.00 Date 31-Dec-2019 10-Nov-2021 07-Jul-2022 29-Dec-2023 This indicator is measuring the intermediate output of the capacity-building of the Science Fund supported Comments: through this project by looking at the total number of SF staff trained through the project. Subcomponent 1.2. RDI Reforms IN01167214 ►Establishment of Institutional Funding of SROs (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Partially implemented: new temporary Law on Science and institutional financing New financing model Value Partially implemented Research adopted model introduced, implemented being revisited by a working group Date 31-Dec-2019 10-Nov-2021 07-Jul-2022 29-Dec-2023 This indicator looks at the establishment of the proper legal framework that supports RDI reforms through Comments: establishing institutional funding for public SROs. IN01167216 ►Number of internal assessment of RDIs (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 61.00 61.00 20.00 Date 31-Dec-2019 10-Nov-2021 07-Jul-2022 29-Dec-2023 This indicator will measure the number of internal assessments of RDIs performed under the project as a basis for external assessments. Comments: NOTE: Value from the previous ISR should be 61, instead of 122 which was entered by omission. IN01167222 ►Number of external assessments of RDIs (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 6.00 6.00 6.00 Date 31-Dec-2019 10-Nov-2021 07-Jul-2022 29-Dec-2023 This indicator will measure the appetite for RDI reforms by looking at the number of RDIs volunteering to undergo external assessments. Comments: NOTE: Value from the previous ISR should be 6, instead of 12 which was due to a reporting error. IN01167226 7/28/2022 Page 5 of 9 The World Bank Implementation Status & Results Report Serbia Accelerating Innovation and Growth Entrepreneurship (P170185) ►Number of RDIs executing transformation plans (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 6.00 4.00 Date 31-Dec-2019 10-Nov-2021 07-Jul-2022 29-Dec-2023 Comments: This indicator will measure the number of RDIs which undergo reforms supported by the project. IN01167228 ►Number of collaborations between participating RDIs and private sector/international entities (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 271.00 75.00 Date 31-Dec-2019 10-Nov-2021 07-Jul-2022 29-Dec-2023 This indicator will look at the output of the RDI reforms by measuring the number of collaborations Comments: established by RDIs with private sector/international entities. Subcomponent 1.3. Sebian Diaspora Facility IN01167215 ►Number of diaspora members participating in the program (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 70.00 Date 31-Dec-2019 10-Nov-2021 07-Jul-2022 29-Dec-2023 Number of Diaspora members which have initiated collaborations with Serbian researchers through the Comments: Diaspora Program. IN01167217 ►Number of Serbian researchers participating in the program (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 150.00 Date 31-Dec-2019 10-Nov-2021 07-Jul-2022 29-Dec-2023 Number of Serbian researchers who have established collaborations with Diaspora and what percentage Comments: of these researchers are women. IN01167223 Percent of which are women (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 25.00 IN01167227 ►Number of joint publications by local and diaspora researchers (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target 7/28/2022 Page 6 of 9 The World Bank Implementation Status & Results Report Serbia Accelerating Innovation and Growth Entrepreneurship (P170185) Value 0.00 0.00 0.00 20.00 Date 31-Dec-2019 10-Nov-2021 07-Jul-2022 29-Dec-2023 This indicator measures the scientific output of the Diaspora Program through the number of joint scientific Comments: publications. A time-lag of two years can be expected. IN01167229 ►Number of international R&D institutions participating in the Program (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 20.00 Date 31-Dec-2019 10-Nov-2021 07-Jul-2022 29-Dec-2023 This indicator measures the interest generated in international R&D institutions for participating in the Comments: program. Component 2. Enterprise Acceleration IN01167212 ►Number of enterprises completing acceleration program (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 19.00 100.00 Date 31-Dec-2019 10-Nov-2021 07-Jul-2022 29-Dec-2023 This intermediate indicator measures the number of enterprises completing the acceleration program. It Comments: also measures which percent of these are founded by at least one woman. IN01167218 Percentage of which have at least one woman founder (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 21.00 20.00 IN01167220 ►Number of accelerated enterprises achieving at least 10% annual growth one year after the program (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 30.00 Date 31-Dec-2019 10-Nov-2021 07-Jul-2022 29-Dec-2023 This indicator measures the output of the acceleration program by looking at the number of enterprises Comments: which have, after completing the program, been able to generate at least 10% annual growth, one year after program completion. IN01167224 ►Percentage of SF and IF survey respondents who report in annual surveys that effective engagement processes have been established (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 56.00 56.00 65.00 7/28/2022 Page 7 of 9 The World Bank Implementation Status & Results Report Serbia Accelerating Innovation and Growth Entrepreneurship (P170185) Date 31-Dec-2019 10-Nov-2021 07-Jul-2022 29-Dec-2023 Each year the SF and IF will conduct one online survey each for all of their programs and this indicator will Comments: measure the satisfaction of grant applicants with the institutions' engagement processes. Overall Comments IR Most of the indicators that have been exceeded are for the RDI component, where interest in reforms by individual RDIs has been exceeded expectations. Please note that while the Diaspora Facility has been delayed due to the pandemic, there are 22 projects under Science Fund programs with participation of at least one diaspora researcher, funded within IDEAS and COVID-19 programs; there are also 271 ongoing collaborations involving RDIs undergoing transformation, with private sector and international entities. Performance-Based Conditions Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P170185 IBRD-90290 Effective USD 48.00 48.00 0.00 9.99 38.06 21% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P170185 IBRD-90290 Effective 13-Dec-2019 24-Dec-2019 18-May-2020 30-Sep-2024 30-Sep-2024 Cumulative Disbursements 7/28/2022 Page 8 of 9 The World Bank Implementation Status & Results Report Serbia Accelerating Innovation and Growth Entrepreneurship (P170185) Restructuring History There has been no restructuring to date. Related Project(s) P174542-Serbia Accelerating Innovation and Growth Entrepreneurship Additional Financing 7/28/2022 Page 9 of 9