Pilot exercise on result indicators Operational Programme

Pilot exercise on result indicators Operational Programme "Entrepreneurship and Innovation" DG REGIO Evaluation Network Meeting Brussels, 22 June 2012

OP «Entrepreneurship and Innovation» Priority: Promotion of Entrepreneurship • Total OP budget = 1, 1 billion EUR (ERDF contribution 736, 73 mln EUR) • Covers all Latvia`s territory as one NUTS 2 Convergence region • 3 priorities and 5 measures aimed at development of science, promotion of innovation and entrepreneurship, promotion of R&D technology transfer and applied research, strenghtening of R&D and science infrastructure, promotion of cooperation between scientists and entrepreneurs by supporting creation of new enterprises and facilitating access to finance • Absorption capacity = 1 534 projects approved exceeding 641, 8 mln EUR • Committed funds = 84 % of the total allocation • Payments to beneficiaries = 49 % of the total allocation 2

EU Funds allocation in OP «Entrepreneurship and Innovations» by priorities mln. EUR, % of total EU funding of OP * 77, 0; 11% 23, 0; 3% Priority „Science and Innovations” 184, 3; 25% Priority “Access to Finances” Priority “Promotion of 452, 5; 61% Entrepreneurship” Priority “Technical Assistance” * EU Funding according to decisions of Cabinet of Ministers by 31. 05. 2012 3

COM pilot exercise on future result indicators Example: Promotion of Entrepreneurship • Objective: Promotion of economic activity and strenghthening of competitiveness by setting up new enterprises and development of existing ones • In order to adress challenges of the macroeconimical situation (crisis) and to ensure targeted strenghthening of international competitiveness of industry sectors, new activity was introduced in 2010 : - Access to international trade markets – strengthening of competitiveness of industry sectors - Funding available for new activity =7, 1 mln EUR (ERDF contribution 4, 3 mln EUR) • Currently we have 3 output indicators and 2 result indicators which represent main activities. These indicators are defined in line with the priority objectives. 4

Applying new COM approach The main logics of the analisys was to apply new logics for outputs and results to demonstrate their direct contribution to priority objective 5

Applying new COM approach The main tasks done: 1)Discussion on the definition of objective: it was actually not one but two objectives 2)Spliting objectives of priority according to the expected results : do the results lead directly to whole objective? No. It was necessary to divide existing priority into 3 priorities according to the aims of existing activities 3)Definition of new results leading to objective: 3 new results 4)Distinguishing between outputs and results 5)Analisys of data needed! Recollection of data is problematic. Additional source – database of State revenue Service is neede to be used – since more specific data on performance of the companies is needed (e. g. information on turnover. Information has to be publically available, simple 6

Applying new COM approach Indicators What do you want to change? (result) Priority 1 Result Indicators to promote the formation Name: active enterprises of new enterprises Definition: Total number of active enterprises (in supported sectors) Source: Commercial register Baseline: available Target: Increase in total number of active enterprises by X % (to be defined based on research) comparing to prior year Policy Action Output Indicators Name: enterprises newly established in incubators Definition: Survival rate of graduated enterprises 1 year after leaving incubator Source: Commercial register Baseline: Available Target: To be defined X% Name: Total percentage of potential entrepreneurs consulted Definition: Number of potential entrepreneurs consulted that have established enterprise 1 year after consultation received Source: Business plans of potential entrepreneurs, Commercial register Baseline: Available Setting up and operating business incubators (2. 3. 2. 1. Business incubators) ERDF Allocation 29 m. EUR Consulting and 2, 9 m. EUR encouraging persons that are interested in establishing enterprises, assisting in carrying out a business plan (2. 3. 1. 2. Measure to encourage innovations and business start – up) 7

Applying new COM approach What do you want to change? (result) Result Indicators to enhance the Name: export performance competitiveness of Definition: Total amount of export from existing Latvia (supported companies) enterprises Source: Central Statistical Bureau of Latvia Baseline: Available Target: Increase in export amount in Latvia in supported sectors by X% comparing to prior year Name: foreign direct investments Definition: Total amount of foreign direct investments Baseline: Available Target: Increase in total amount of foreign direct investments by X% comparing to prior year (involved companies compared to not involved companies operating in the same sectors) Output Indicators Name: participating enterprises in international fairs Definition: Number of projects supported * Source: Number of agreements signed Baseline: Available Target: To be defined Name: potential investors consulted Definition: Percentage of investors consulted that have invested in Latvian companies Source: State Revenue Service, Commercial register Baseline: Available Target: To be defined X% Policy Action ERDF Allocation Support to participate in international fairs (2. 3. 1. 1. 1. Access to international trade markets – external marketing) Representation abroad for LV companies to do business (2. 3. 1. 1. 2. Access to international trade markets – strengthening of competitiveness of industry sector) 38, 8 m. EUR 7 m. EUR 8

Applying new COM approach What do you want to change? (result) Result Indicators to enhance the competitiveness of Name: Turnover of supported existing companies enterprises Output Indicators Name: Companies within the cluster Definition: Number of companies involved in Definition: Increase of turnover in cluster activity supported companies Source: Agreements Source: State revenue service signed (management Target: : Increase of turnover in information system) supported companies by 10% 1 Baseline: Available year after support received Target: 300 * Policy Action ERDF Allocation Support of 4, 8 m. EUR companies to implement activities within cluster programme (2. 3. Cluster programme) 9

Territory development index of novad and republic cities, 2010 10

Applying new COM approach What do you want to change? (result) Decreasing regional disparities Result Indicators Output Indicators Policy Action ERDF Allocation Name: Territory development Name: enterprises Investment aid to 45 m. EUR index supported in specially enterprises in assisted areas specially assisted Definition: Decrease in differences areas (2. 3. 2. 2. between of development indexes Definition: Number of Co – financing of supported and not supported enterprises in to the regions in Latvia specially assisted investments in areas that have Source: Central Statistical Bureau micro, small and received support for Baseline: Available medium – sized improving Target: enterprises competitiveness operating in the Source: Number of specially assisted projects completed areas) Baseline: Available * Target: 280 ** 11

Lessons learned and issues discussed • Exercise as a good start for changing approach in order to set appropriate result and output indicators in next planning period • Possibility to re – evaluate current systemic approach • The new approach suggests more focused priorities so that the specific result could be determined and measured 12

Lessons learned and issues discussed • Re – thinking the design of priority axis led to dividing the current priority axis into 3 seperate priorities • Relevant data sources and approach to obtaining data is of great importance which needs sufficient consideration • The planned change and availability of data shall be considered when re – defining result indicators • Sufficient consideration and analysis when determining targets 13

Thank you! Iruma Kravale Deputy Director, EU Funds Strategy Department Ministry of Finance, LATVIA iruma. kravale@fm. gov. lv 14