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ASSESSMENT OF REGIONAL POLICIES AND SUPPORT SYSTEMS


 

The second study focused on the assessment of the regional policies supporting Food Industry SMEs in growth. All project partners shared a detailed analysis of their policies and the current situation of their regional development.

Policy framework

Without well designed financial instruments not much could be done to improve the situation of partner regions quickly, and most importantly, effectively. The three most important policies derived from European Funds supporting food and drink SMEs in Partners’ Regions are:
 

  • ERDF Operational Programmes 2014 – 2020

  • Rural Development Programme funded by EAFRD (RDP) 2014 – 2020

  • Community Led Local Development – CLLD/LEADER (ERDF/EAFRD)
     

All of them present high or, in the worst case, medium utilisation in FRIDGE project partner regions. Other European Programmes used by partner regions are Horizon 2020 and Interreg Programmes. Most partners also reported various local and national level funding programmes which aim at empowering local communities and food sector companies. 

Key actors

To properly assess how efficient and effective regional policies are, it is crucial to identify key actors and how they interact with the support system, how relevant is the subject of the support project in the region and if it answers specific regional needs. Key actors’ role is to help SMEs increase their competitiveness by offering help in areas such as commercialisation, branding, consulting, networking or information gathering both for the needs of national and international market expansion. 

 Ten key actors were identified during our study:

  • Managing Authorities 

  • Ministries 

  • Regional and County Councils 

  • Chambers of Industry and Commerce 

  • RDI and education organisations 

  • Local Action Groups 

  • Networks and partnerships

  • Business support and non-profit organisations

  • Professional associations, such as Food and Drink Federations etc.

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Self-assessment on five variables

 

In the final step, five variables were established to effectively measure how regional policies are dealing with supporting SMEs. 
 

  1. Structure - All actors, networks and institutions that make up a support system

  2. Functions - All activities of actors, networks and institutions within the support system that assist food and drink businesses including their internationalization

  3. Dynamic Tailoring - The ability to customise support activities to the changing needs of specific groups and contexts. 

  4. Navigation - The relative accessibility to the support system and the availability of clear guidance to manoeuvre the system. 

  5. Assessment and monitoring of effectiveness - Assessment of the support system to identify good practices, learning opportunities and measure impacts for continuous improvements.
     

Based on the self-assessments from all partner regions, it was possible to recognize in which areas partners have developed well, and where advice and guidance from international partners would help to catch up with higher standards.
 

Territorial needs

 

From reading the reports submitted by all the regions, territorial needs could be divided into four distinctive categories:

 

  1. ​Socio-economic and environmental factors.

  2. Finance: Factors related to financial instruments that are intended for food and drink SMEs.

  3. Entrepreneurial issues: Factors such as productivity, competition, price pressure, cost volatility, workforce, cooperation and networks, export, general business skills etc.

  4. RTDI: Research, Technology, Development, Innovation in food and drink SMEs
     

Socio-economic factors that are mentioned the most often across all regions are the ageing population and brain drain. As partners from Bavaria mention, in their region sometimes there is nobody to overtake a company when the original owner retires. Other problems in many of the regions are complicated procedures and overgrown bureaucracy for start-ups and a non-stable tax system, that does not allow for long-term strategic planning. One of the success stories, developed across all regions is the regional branding that has become an important indicator of product quality and helps to promote regional products both at the national and international level. 

In the case of Financing, across all regions EU-funds are available, however not without drawbacks. Project partners from Hungary pointed out some of them, like unfavourable financial institution conditions or calls for tenders that address the entire processing industry, leaving the food industry in the background resulting in small and medium-sized enterprises being short of capital. 
 

Entrepreneurial issues vary between regions, but some concepts repeat in at least a few partner regions. Here are a few of them listed:

  1. Lack of skilled workforce caused often by brain drain

  2. Lack of ambition and business skills, especially a low entrepreneurial mindset and motivation 

  3. Missing cooperation culture, unwillingness to network and involve external partners in the company’s processes. 

  4. Difficulties in export trading
     

Frequently occurring problems on a business level such as high competition, price pressure, low productivity, high production costs, cost volatility and other related bottlenecks, are reported by almost all the partners as obstacles preventing food and drink SMEs to develop and grow.
 
The RTDI factors are definitely finding their foundation in all obstacles mentioned above. Almost every partner reports a lack of innovation, low level of R&D investments and a significant deficit of knowledge and training in the area of new technologies, leading to missing out on things like automatization, digitalisation and others. 

Further info

 

We highly recommend you to read the results of the assessments in the Comparative Analysis we have created. Both the regional reports and the comparative analysis can be found on our project websites.