The World Bank Serbia Research, Innovation and Technology Transfer Project (P145231) REPORT NO.: RES28986 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF SERBIA RESEARCH, INNOVATION AND TECHNOLOGY TRANSFER PROJECT APPROVED ON MAY 27, 2014 TO THE REPUBLIC OF SERBIA FINANCE, COMPETITIVENESS, AND INNOVATION EUROPE AND CENTRAL ASIA Regional Vice President: Cyril E Muller Country Director: Linda van Gelder Senior Global Practice Director: Ceyla Pazarbasioglu Practice Manager/Manager: Mario Guadamillas Task Team Leader: Maja Andjelkovic The World Bank Serbia Research, Innovation and Technology Transfer Project (P145231) BASIC DATA Product Information Project ID Financing Instrument P145231 Investment Project Financing Original EA Category Current EA Category Not Required (C) Not Required (C) Approval Date Current Closing Date 01-Apr-2014 31-Jan-2018 Organizations Borrower Responsible Agency Ministry of Education, Science and Technological Innovation Fund Development Project Development Objective (PDO) Original PDO The objective of the project is to facilitate reorientation of public research sector toward the needs of the private sector. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net TF Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed TF-19226 27-May-2015 27-May-2015 01-Jul-2015 31-Jan-2018 1.41 .69 .67 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank Serbia Research, Innovation and Technology Transfer Project (P145231) Note to Task Teams: End of system generated content, document is editable from here. I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING This restructuring is requested to extend the project closing date by 12 months, from January 31, 2018 to January 31, 2019, so to provide the additional time to complete all project activities, given the initial implementation delays. The results framework and the implementation schedule, and concretely the end dates for achieving the targets, are also hereby adjusted to reflect the revised closing date. Project Status: This project, approved on May 27, 2014, became effective with a delay of 13 months on July 1, 2015, and most activities have progressed well since. The project has been designed as a mix of RE and BE activities, financed through a US$1.35 M RE grant (“child” TF-19226) provided by the European Commission. However, there was a delay in launching Component 1 (Establishment of a Technology Transfer Facility), caused by longer than expected procedures for the necessary contracting. This has impacted the timing of planned activities and caused delays in achieving the Project Development Objective (PDO) level indicator (number of technologies transferred). All other activities and progress indicators are on track, and some targets have already been achieved or surpassed. As a result of the delay in Component 1, the PDO and overall project implementation are both rated “Moderately Satisfactory.” Financial management performance for the project is continuously satisfactory. There are no overdue audits on the project and previous years’ audits did not identify any issues. Following preliminary discussion, held on April 25 and May 10, 2017 during a World Bank implementation support mission, the Ministry of Education, Science and Technological Development has submitted a request (dated June 14, 2017) to the World Bank for extension of the Grant Agreement between the Republic of Serbia and the World Bank by 12 months until January 31, 2019. In support of this request, an extension of the Administrative Agreement with the EU Commission related to TF07233 (Trustee-level TF), dated 12/20/2017, has been approved by the Delegation of the EU Commission to Serbia, upon request of the World Bank. The reason for the request is mainly due to initial delays in launching the Technology Transfer Facility (TTF) under Component 1: it took more time to engage various stakeholders and demonstrate TTF’s utility, given that it is first time such initiative was launched in Serbia. Additionally, the TTF is streamlining its procedures focused on encouraging more researchers to undertake technology transfer activities and will need more time to fully realize the impact of such changes. Without the extension, it is unlikely that TTF can achieve its objectives fully in the original time allotted. Specifically, the key indicator of technology transfer transaction will require more time (up to 12 months) to realize beyond the current closing date of January 31, 2018. While the Borrower has requested an extension solely on the account of delays being experienced in the TTF, the Bank team believes that other components may benefit from a longer implementation period. Specifically, a) Assistance to the Innovation Fund can further strengthen its institutional capabilities. The Fund has successfully introduced several novel instruments to promote innovation in Serbia, solidifying its reputation as an effective national innovation agency in the marketplace. However, the Fund now needs to move to the next level and introduce a more modern governance structure, improve the team’s skills, and update its operating procedures and policies to reflect its transition into a full-fledged innovation institution. This includes staff training, design and implementation of a robust outreach strategy, streamlining of policies and The World Bank Serbia Research, Innovation and Technology Transfer Project (P145231) procedures, introduction of relevant international best practices in the selection and monitoring and evaluation of programs, introduction, modification, and/or expansion of support programs, etc. b) Engagement with and assistance to the Ministry can continue to help in their R&D sector reform agenda. This includes changes in the funding and evaluation mechanisms of call for research proposals, assessment and consolation of R&D Institutions (RDIs), funding mechanism of RDIs, reform of competitive collaborative R&D and high impact technology development projects, etc. The Ministry is committed to undertake reform of its R&D Institutions as a part of the new R&D and Innovation Strategy (also supported under the World Bank's Competitiveness & Jobs Project); however, this process is proving more technically intricate than the Ministry team could have foreseen or has the capabilities to undertake. The Ministry team has expressed that they would benefit from the World Bank’s continued advice and expertise to design and implement this important reform program. Project Status by Components: Component 1: Establishment of a Technology Transfer Facility (TTF) 1. The TTF has received 21 applications to date. Of these, seven (7) have been awarded and contracted, two (2) have been awarded but not yet contracted, and an additional three (3) are under evaluation. Another two (2) were not accepted due to being incomplete, three (3) were withdrawn, and four (4) were rejected after evaluation. Overall, this is seen as a good rate of success, given that this is the first program of its kind in the country. 2. The proposed extension will enable the Innovation Fund’s TTF to continue to support public Research & Development (R&D) organizations to finalize technology transfer deals in progress as well as to help strengthen capacity of relevant organizations to undertake such transactions in the future. Component 2: Technical Assistance by the World Bank to Innovation Fund, for the design of a Collaborative Research and Development Grant Scheme (CGS) with relevant monitoring indicators, and an independent annual evaluation of its implementation 1. Following successful design and launch of the CGS, 96 applications were received, significantly beating initial estimates. The World Bank carried out two evaluations of the scheme’s design and implementation process, with overwhelmingly positive results. 2. Fourteen (14) projects approved for financing in December 2017 are making good implementation progress, following the signing of the Financing Agreements between the IF and the Lead Applicant. Financial disbursement, as well as monitoring of spending and implementation progress, are conducted on a quarterly basis. The third quarterly review of awardee projects is being completed by the IF at the time of writing of this report. Component 3: Development of a Research for Innovation Strategy, an R&D Roadmap, and corresponding Action Plans 1. The Research for Innovation Strategy has been prepared and adopted. The associated Action Plan is nearly finalized and internal Government of Serbia consultations are ongoing before it can be tabled for adoption. The R&D Roadmap is drafted, including preparation of several background papers, interview data collected from technical and scientific analysts, and the R&D Working Group formed. The draft Roadmap is now being reviewed by the Working Group and the Ministry. II. DESCRIPTION OF PROPOSED CHANGES 3. The following changes are proposed: The World Bank Serbia Research, Innovation and Technology Transfer Project (P145231) a. Change in Results Framework: All targets remain the same. The end dates are proposed to be changed to December 3, 2018 for the following five indicators: PDO Indicator: i. Number of technologies transferred by TTOs Intermediate Indicators: ii. Number of technology transfer service lines deployed iii. Number of Service transactions initiated at TTOs iv. Number of technology transfer transactions conducted by TTOs v. Annual Independent Evaluation (of the Collaborative R&D Grant Scheme). b. Change in Closing Date: The project closing date will be extended by 12 months, from January 31, 2018 to January 31, 2019, to allow for more time for project completion given initial implementation delays (discussed above). c. Change in Implementation Schedule to reflect continuing activities under the Technology Transfer Facilities as discussed above. Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. III. SUMMARY OF CHANGES Changed Not Changed Change in Results Framework ✔ Change in Loan Closing Date(s) ✔ Change in Implementation Schedule ✔ Change in Implementing Agency ✔ Change in Project's Development Objectives ✔ Change in Components and Cost ✔ Cancellations Proposed ✔ Additional Financing Proposed ✔ Reallocation between Disbursement Categories ✔ Change in Disbursements Arrangements ✔ Change in Disbursement Estimates ✔ The World Bank Serbia Research, Innovation and Technology Transfer Project (P145231) Change in Overall Risk Rating ✔ Change in Safeguard Policies Triggered ✔ Change of EA category ✔ Change in Legal Covenants ✔ Change in Institutional Arrangements ✔ Change in Financial Management ✔ Change in Procurement ✔ Other Change(s) ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_RESULTS_TABLE RESULTS FRAMEWORK Project Development Objective Indicators PDO_IND_TABLE Number of technologies transferred by TTOs Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 1.00 3.00 No Change Date 22-Dec-2014 16-Jan-2018 31-Jan-2018 Collaborative R&D grant scheme designed Unit of Measure: Text Indicator Type: Custom Baseline Actual (Current) End Target Action Scheme designed and in Value No scheme designed process of scheme designed No Change implementation Date 22-Dec-2014 16-Jan-2018 31-Jan-2018 Inputs disseminated for an R&D&I Strategy and action plan Unit of Measure: Text Indicator Type: Custom Baseline Actual (Current) End Target Action The World Bank Serbia Research, Innovation and Technology Transfer Project (P145231) Strategy adopted, Action Inputs disseminated to Value No strategy exists No Change Plan awaiting adoption stakeholders Date 22-Dec-2014 16-Jan-2018 31-Jan-2018 Inputs disseminated for an R&D Infrastructure Roadmap and action plan Unit of Measure: Text Indicator Type: Custom Baseline Actual (Current) End Target Action Roadmap background documents prepared; Inputs disseminated to Value No roadmap exists No Change working group formed; stakeholders draft Roadmap prepared. Date 22-Dec-2014 16-Jan-2018 31-Jan-2018 Intermediate Indicators IO_IND_TABLE Component One: Number of technology transfer service lines deployed Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 9.00 5.00 No Change Date 22-Dec-2014 16-Jan-2018 31-Jan-2018 Number of Service transactions initiated at TTOs Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 21.00 25.00 No Change Date 22-Dec-2014 16-Jan-2018 31-Jan-2018 Number of technology transfer transactions conducted by TTOs Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 9.00 15.00 No Change Date 22-Dec-2014 16-Jan-2018 31-Jan-2018 Number of TTOs and innovation support organizations engaged in preparation of TT pipeline The World Bank Serbia Research, Innovation and Technology Transfer Project (P145231) Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 4.00 5.00 No Change Date 22-Dec-2014 16-Jan-2018 31-Jan-2018 Component two: Case studies compiled Unit of Measure: Text Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0 Case studies compiled Case studies compiled No Change Date 22-Dec-2014 16-Jan-2018 31-Jan-2018 Public consultations on design held Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 1.00 2.00 2.00 No Change Date 22-Dec-2014 16-Jan-2018 31-Jan-2018 Annual Independent Evaluation Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 2.00 3.00 No Change Date 31-Dec-2014 16-Jan-2018 30-Mar-2018 Component Three: Innovation and R&D data collected Unit of Measure: Text Indicator Type: Custom Baseline Actual (Current) End Target Action Data collected, Value 0 Data collected, analyzed analyzed and shared No Change with stakeholders Date 22-Dec-2014 16-Jan-2018 31-Jan-2018 Stakeholder consultations held The World Bank Serbia Research, Innovation and Technology Transfer Project (P145231) Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 2.00 3.00 No Change Date 22-Dec-2014 16-Jan-2018 31-Jan-2018 Dissemination of R&D and Innovation Strategy and Infrastructure Roadmap Unit of Measure: Text Indicator Type: Custom Baseline Actual (Current) End Target Action Strategy Disseminated, Disseminated to Value 0 Roadmap awaiting No Change stakeholders finalization Date 22-Dec-2014 16-Jan-2018 31-Jan-2018 OPS_DETAILEDCHANGES_LOANCLOSING_TABLE LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline TF Status Closing Closing(s) Closing for Withdrawal Applications TF-19226 Effective 31-Jan-2018 31-Jan-2019 31-May-2019 Note to Task Teams: End of system generated content, document is editable from here.