Flexible World Bank-supported project helps Croatia fill R&D funding gaps
Croatia has partnered with the World Bank in a highly targeted €106 million project that aims to fill R&D funding gaps that are not easily met by EU programmes.
The Digital, Innovation, and Green Technology Project (Digit) was launched in 2023 and will run for six years, funding various activities identified as being weaknesses for the country. These include links between research and industry, participation in the EU’s R&D funding programme Horizon Europe, use of research infrastructures and private R&D investment.
The scale and comprehensive nature of the project is relatively novel for the World Bank, which mainly lends money to support smaller R&D activities.
“This is by far the largest and I would say the most exciting portfolio that we have in Europe and Central Asia on the topic of research, development and innovation,” said Todor Milchevski, senior private sector specialist at the World Bank, who was involved in the conception of Digit.
The World Bank has been working with Croatia on R&D topics for close to two decades, but the engagement between the Ministry of Science, Education and Youth stepped up around seven years ago, ahead of the EU’s current budgetary cycle.
As Croatia only joined the EU in 2013, it went into the 2014-20 EU funding cycle with little experience. In order to make the most out of the 2021-27 period, the World Bank was asked to do an in-depth analysis of the country’s R&D landscape.
This analysis came to an end just as the EU announced its post-Covid fund, the Recovery and Resilience Facility (RRF). With the World Bank holding a wealth of data and insights into Croatia’s R&D landscape, it became a natural partner to assist in shaping the use of these funds for R&D activities.
This also allowed the bank to see where the funding gaps were that would not easily be covered by the RRF, structural funds or Horizon Europe. The Digit project was conceived to fill these gaps, and to offer a more flexible form of funding in the form of a loan agreement.
“Sometimes with EU funds, it’s difficult to pilot new ideas. We are not the dominant partner in Croatia’s research and innovation landscape, so where we can come in is to try out some new ideas, and to try to target precise issues,” Milchevski said.
This flexibility is valuable from Croatia’s point of view. “As EU funding instruments operate within defined frameworks and priorities, the ministry is using this project as an opportunity to pilot new approaches, address funding needs that fall outside the scope of existing EU calls and contribute to strengthening the overall landscape,” said Ante Lončar, Digit project manager for the Ministry of Science, Education and Youth.
What the project funds
Around half of the budget is dedicated to building up research infrastructure in the country. So far, three projects have been chosen, with another to come. One is a €10 million contribution to modernising the Institute for Adriatic Crops and Karst Reclamation located in Split. Another is the construction of a new campus for the University of Zagreb’s Faculty of Organization and Informatics. And the third covers upgrades to the Faculty of Electrical Engineering, Computer Science and Information Technology in Osijek.
The remaining half of the project budget is dedicated to research activities.
One example is a programme to increase the use of Croatia’s existing research centres. It offers grants of €300,000 for centres to hire professional managers to help run the centres, increase collaboration with industry and to organise training and networking for potential users. “The idea is to use €300,000 to make better use of an infrastructure that may have cost €30 million,” Milchevski said.
Croatia is also using Digit to try to increase its participation in Horizon Europe through the Synergies programme.
This has two elements. The first funds projects awarded the Seal of Excellence label, given to proposals that achieve a high enough score to be funded, but miss out due to budget limitations. Typically, governments use EU regional funds to finance projects with this recognition. Croatia is doing it through Digit.
This has already delivered results. Twenty-five Croatian companies applied for grants for the latest European Innovation Council pre-accelerator call. Of these, one received funding, and 12 were given the Seal of Excellence label. So far, 11 of those with the seal have taken up the option of Synergies funding and have begun their projects.
“In a way, this was actually much faster than it would be receiving funding straight from Horizon Europe,” Lončar said.
The other element of the Synergies programme is a scheme to fund Horizon Europe applicants and consortia for up to a year to prepare their proposals.
Lončar said this has already proven to be successful. “What we hear from scientists is that they are more interested in applying for Horizon Europe because, for example, of the Synergies programme that increases their chances of winning funding.”
Elsewhere, Digit is funding various activities aimed at connecting research with industry, including support for the country’s technology transfer offices, and also supporting start-ups.
Relevance to the future of EU R&D funding
The relevance of the Digit project may grow over time with plans to increase the budget of competitive EU R&D funds in the next budgetary cycle, Milchevski said, adding that new programmes such as the European Competitiveness Fund will play a part in this.
“There will be a lot more centralised funding available, which countries from central and eastern Europe may struggle with. So, we need to do something to help these countries tap into that funding,” he said.
While EU institutions are still negotiating over the final budget for Horizon Europe’s successor, it is likely to be a significant increase on the current €93.5 billion programme.
Digit is specifically tailored for Croatia’s ecosystem, but Milchevski thinks that elements of it could be replicated in other countries. “So far, the feedback has been positive. It took a bit of time to get going, but in the past six months we’ve started to see positive effects,” he said.
Lončar is equally confident of its benefits for the country. “Now we have published the majority of the planned calls and the majority of infrastructure projects that we will finance have been identified, so implementation is now well underway,” he said. “I think the project is very well received within the scientific community in Croatia and publicly as well.”