RCI Case Studies

CASE STUDY:
Centers of Excellence and Innovation (CEIs) in South Eastern
Europe
THE CHALLENGE:
The transition economies of South Eastern Europe (SEE) have experienced weak or
non-existent economic growth. The countries have suffered from increasing
unemployment and poverty rates. In these conditions, external investments motivated
by the relatively low production expenses have significantly decreased, and could not
be considered a driving force for increasing competitiveness in the region. Even though
labor and other production costs in SEE are significantly lower than in the EU, in many
cases the local enterprises have lower productivity, poor management, and old
fashioned technologies.

In order to improve their international competitiveness, the countries in SEE need to
boost their economic growth with high value added production and services. Stimulating
innovations, excellence, and quality is one of the prerequisites for increased
competitiveness and sustainable economic growth.

THE INITIATIVE:
In the last 6 years, the USAID-funded Regional Competiveness Initiative (RCI) program
recognized ICT in SEE as one of the sectors that can compete on local, regional, and
European markets, and can also significantly increase the effectiveness and efficiency
of other economic sectors through improved management processes, optimized
production operations and modernized technologies.

In the beginning of the RCI program, the team was focused on increasing the
competiveness of the ICT sector through process improvement and the assessment of
ICT companies according to international quality models.

Once a fair number of ICT companies in SEE successfully implemented international
standards, RCI focused on creating regional networks and promoting domestic
suppliers of local and/or customized ICT solutions (Enterprise Resource Planning,
Customer Relationship Management, Facility Management, etc.) to other sectors.

Case Study: Tourism Development in the Western Balkans 1

At the last stage of the program, when sustainability of the results was with the highest
priority, RCI decided to provide small grants1 for creation and development of Centers
of Excellence and Innovation (CEI) in the region. The grants were provided to five
centers that demonstrated capacity for sustainable development. These centers were
located in Belgrade, Kragujevac, Nis, Pristine, and Skopje. They were integrated into a
wide-scale network of centers in the region that RCI supported through access to highly
professional trainings, capacity building expertise, and linkages to EU and US research
centers and programs.

THE RESULTS:
As a result, the overall network of CEI includes centers in Bitola, Banja Luka, Sarajevo,
Tirana, Varajdin and other organizations, most of which are represented in the RCI
regional platforms for excellence and innovation – Quality2IT.org and IT2Businness.org.
Now most of the countries in the SEE region are connected in a network of CEIs
specializing in stimulating innovations and providing services across a wide range of
priority sectors such as Agriculture, Automotive, eGovernment, Electronics, Food-
processing, Telecommunications, Tourism, and others. In order to achieve their
mission, the centers are using cutting edge methodologies and technologies from world
leaders in ICT such as Apple, Software Engineering Institute- Carnegie Mellon
University, Microsoft, IBM, and HP, amongst others.

The importance of a cross-sector approach is illustrated by the CEI in Skopje. The
center is designing and developing a hybrid cloud solution that will provide affordable
local IT services for Macedonian tourism and agriculture. The portfolio of modern cloud-
based services that will be used by the small agro and tourism enterprises includes
ERP, CRM, and web and document management systems. It is expected that the
center will intensify the use of ICT in other sectors, and will enhance their
competitiveness while simultaneously benefitting the ICT industry in Macedonia due to
the increased local demand of IT solutions.

Another example of CEI success is the CEI in Kragujevac which promotes the use of
CAD/CAM systems for automotive industry in a region heavily dependent on the growth
of automotive and related industries.

With small grants for Centers of Excellence and Innovation (CEIs), RCI supported the establishment of
five new centers in South Eastern Europe. In addition, RCI worked for the further integration between
existing CEIs created by other USAID initiatives, international donors, and businesses. The initiative has
not only supported the ICT sector, but has also contributed to higher competitiveness within other sectors.

This document is produced by USAID’s Regional Competitiveness Initiative RCI; Implemented by SEGURA Partners
LLC www.RCIProject.com

1
In the range of 20 -80k USD

Case Study: Centers of Excellence and Innovation in South Eastern Europe 2

CASE STUDY:
REGIONAL “POSTHARVEST MANAGEMENT” TRAINING IN
SARAJEVO, 24-28 OCTOBER 2011
THE CHALLENGE:
Around the developing world, an average of 40 percent of harvested agricultural product
is lost before it can be consumed. Reducing this postharvest loss is usually the most
effective way to increase the incomes of producers and other businesses in the supply
chain.

THE INITIATIVE:
In support of the objective of reducing
postharvest loss, the United States
Agency for International Development
(USAID) Regional Competitiveness
Initiative and 10 USAID projects in ten
countries cooperated to hold a
regional Postharvest Management
Training in Sarajevo for 89 agricultural
professionals from Bosnia and
Herzegovina, Kosovo, Albania,
Montenegro, Georgia, Moldova,
Macedonia, Azerbaijan, Ukraine and
Serbia. In addition to the USAID
Training participants during visit to local agricultural producer
support, SIDA, the Swedish

Development Agency, and CzDA, the Czech Development Agency provided funding.

The course was taught by professors from the University of California at Davis. The UC
Davis Post Harvest Institute is widely recognized as having among the world’s best
experts in this subject. They provided instruction, text books, and computerized training
materials for the students to use in the future. By facilitating and co-funding this
activity, RCI reduced the cost of attending by up to 10 times per participant.

THE RESULTS:
This event represented a remarkable partnership among many donors and countries. It
not only provided training for professionals, but served to promote future regional
collaboration. This graduate school level coursework has allowed the participants to

Case Study: Postharvest Management Training
1

receive training that would have been prohibitively expensive had they been required to
travel to the UC Davis campus in California to receive it.

The participants received instruction on how to properly manage fruits and vegetables
following harvest, including temperature management, handling, packaging, transport,
the use of modified atmospheres, symptoms and treatments for diseases, and
numerous other topics. They were given practical exercises in grading and product
selection, and had the opportunity to visit commercial packing operations. The
graduates are expected to return to their respective countries and train others in the
technologies and practices they learned during this valuable course.

Case Study: Postharvest Management Training 2

CASE STUDY:
INTRODUCING THE RCI ICT COMPETITIVENESS PYRAMID:
Process, Benefits and Results

THE CHALLENGE:
The ICT sectors in East Europe have gone through significant transformations for the last two
decades. A shift from capital-intensive hardware production to knowledge-intensive software
production has taken place simultaneously with the creation and development of private ICT sectors.
The relatively well-educated human resources and the long-lasting traditions in ICT, in combination
with the competitive labor costs have been the main success factors that contributed to the rapid
growth of the ICT sectors in the region. However, the firms in the region, most of which are SMEs,
face global competition with larger outsourcing destinations such as India, China, and Russia.
Addressing Regional Challenges:
Based on their experience in the region, the team at the European Software Institute (ESI) has
identified a number of challenges facing the newly established ICT firms and immature markets in the
region. The ESI Center of Eastern Europe developed a program to effectively address those
challenges in the region. The key challenges are summarized in the table below:
Table 1: Regional Challenges, Solutions and Expected Results of Reform

Challenge Solution Expected Results
Low level of Process Implementation of cluster type of Creation of sustainable
Improvement (PI) projects performed by multiple communities of practices.
benefits awareness at stakeholders as public-private
firm, national and partnership initiatives.
regional levels
Most companies in the Providing measurable roadmap for Strong commitment from
SEE region are micro- customized (simplified) multiple-model all relevant stakeholders
or small-sized and process improvement implementation for an affordable,
could not easily through IT Mark (ESI) service. IT Mark measurable and
allocate expert includes improvement and certification achievable process
resources for complex guidelines for software processes improvement program.
process improvement. based on CMMI, information security
processes based on ISO 27001 and
business management processes
based on 10sq.

Case Study: RCI ICT Pyramid 1

Small and Medium Co-funding from business support Providing multiple sources
Enterprises (SMEs) are programs for increased competitiveness for funding of the initiative,
not able to allocate of SMEs, step-by-step approach to including at least 30
financial resources to ensure intermediate business benefits percent of the direct costs
initiate comprehensive and stronger commitment from the for SPI provided by the
SPI programs. sponsors. firms themselves.

Fragmented market By implementing the “ICT Creation of regional ICT
with limited experience Competitiveness Pyramid” in SEE, even brand recognized on the
in PI implementation, the smallest countries in the region international and local
lower visibility of receive the opportunity to benefit from markets.
ICT/SW industry brand the regional brand.
and capacity.

THE INITIATIVE:
In the framework of the RCI project, the ESI Center of Eastern Europe planned and launched the
execution of a comprehensive software process improvement program named “ICT Competitiveness
Pyramid”.
The goals of the program were:
• To build organizational capacity for planning and execution of a process-improvement
program in the ICT Sector.
• To build expert capacity for process improvement using the latest management and
engineering models and standards.
• To help a large number of SMEs to increase their competitiveness, and promote cooperation
through implementation of process improvement initiatives.
• To support industry leaders in certifying their processes according the world recognized
models and standards.
• To expand the regional ICT market through promotion of ICT as a tool for increased
competitiveness in other economic sectors.

In order to achieve the Program goals, several groups of activities were planned and executed. A
short description of each phase has been provided in the Table below. The overall program is
illustrated in Figure 1.

Table 2: Project Activity List
Activity Group Short Description
Group 1 Analysis of the ICT sector on national and regional level. Identification
Development of a of public-private partnership models, stakeholders, donors and most
base for increased appropriate interventions.
ICT competitiveness Building the fundamentals of the program and obtaining strong
through quality commitment from stakeholders from the Government, Business and
international development programs.
Group 2 Capacity building through awareness, training, and certification of
Building awareness experts and stakeholders.
and delivering Creation of management leadership and commitment. These together
trainings in software, with the delivery of trainings in process-improvement concepts are the
corporate excellence , key drivers for a successful and sustainable process-improvement
IT security and CMMI program.
Group 3 Provision of technical and management support to the organizations
Process improvement during the implementation of their improvement plans in order to
program ensure that the improvement actions are being executed effectively
implementation on and efficiently.


Activity Group Short Description
cluster and SME level Perform periodic quantitative and qualitative evaluations of the
implementation progress, and take corrective actions when the actual
performance deviates significantly from the plan in order to ensure
that the organization is prepared to undergo a formal evaluation.

Group 4-7 Review the processes in each organization to determine the degree of
Appraisal of the implementation and institutionalization of the selected process areas
processes’ maturity with the objective to identify the potential gaps that must be addressed
by the organization to satisfy the goals of the improvement initiative.
Certification against the international standards and models.
Parallel capacity-
building services:
Strengthening the Positioning local ICT products and services on the regional market
regional market for and developing cross-border/cross-sector cooperation in the region.
ICT solutions www.IT2Business.org

Strengthening the Development of training and certification centers and training and
regional capacity for certification community of practices. www.Quality2IT.org
IT quality models
implementation
Sustainability of the Establishment of a large regional network of CEIs with access to
results achieved, highly professional trainings, capacity building expertise, and/or
Centers of Excellence connections to EU and US research centers and programs.
and Innovation (CEIs)
Strategy development Support the countries in the region with the formulation and
implementation of ICT related strategies.

Figure 1. Program Architecture – ICT Competitiveness Pyramid


Program Program
Activities in du stry le ad er s cer tifie d o n th e la test E
X
Results
m od els a nd stan da rd s C
E
L ICT
L
E O
N R LEADERSHI P
6 ap pr aisa lp lan s 7 C G
E A
A N
Readiness check for N I
D Z
A I ndicat ors of achievement:
process mat urity p ro cess ma tur ity Process maturit y S T
U I
O •10-20% of the organizat ions* completely implement
appraisals certif ication S
T N and are cert ified f or t he leading industry models and
A A
I
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A
B •30-40% of the organizations*part ially implement
I
L
I
T t he leading indust ry models and standards and have
Y
obtained intermediat e validat ion
4 5
Quick assessment of the
pr ior it ized g oa ls Process Improvement O
processes maturit y in a pr oce ss im pr ove me nt R IN CREASED
clust er of SME s Program implement ation on G
A
pla ns cluster and on SME level N COM PETI TI VENESS
I
Z
A
T
I
O I ndicat ors of achievement:
clu ste r of or gan iza tion s N
A •70% of the organizat ions*increase their
co mm itt ed to the L
3 C competit iveness based on more effect ive and
p ro gr am A
o pe rat ion al plan
P
A eff icient processes
id ent ified C •50% of the organizat ions*gain strategic
n eed for Process Improvement I
T
Y competit ive advantages based on continuous
a war en ess Program Initiation in SMEs B
U improvement of t he eff iciency and ef fect iveness of
a nd t ra ining I
L t heir processes
le ade rs hip a nd T
d ecisio n- ma ker s’ imp lem en tat io n
co mm itm en t cap acit y O PR OCESS IMPRO VEMENT
R CAPACI TY I N PLACE
G
2 .1 2.2 A
C N
T I
Z
U A I ndicat ors of achievement:
B uilding awareness and le ad ers hip a nd Creat ion of implementati on R T
I
E O •90% of the persons who are t rained implement
init ial training d ecisio n- ma ker s’ capacit y – professional I
N N
co m mitm en t training and certif ication P A
L
good practices in their work
L I •80% of the organizations*use t he good pract ices t o
A N
pr og ra m C F
R i mprove thei r processes
E A
infr ast ru ctur e S •65% of the organizations*launch init iative f or
in p la ce T
1 R cont inuous process improvement
U
-
Development of the base
for increased I CT *Percentage are indicat ed against the initial number of organizations
competitiveness t hrough
OR GA N I A T I - A L I N F A S T R U

Results orient ed t owards building of organizat ional capaci ty
C T U R E I N P L A E

qualit y
Z ON
C

Results oriented t owards increased com itiveness of the ICT sector
pet
R

R E MR E E T
P OCS I P OV MN

CAAI I NL CE
P CT P A
Y

Sustainable Financial Model

One of the major objectives of RCI is to ensure sustainability of the ICT activities, and to obtain
commitment for the latter from other stakeholders in the region as well. To achieve that end, the
various project activities receive different levels of funding:
• The initiation activities such as awareness, elaboration of analyses and studies, project
planning and management are almost completely funded by RCI (80-100 percent).
• Human resources strengthening activities such as training and qualification are funded in
cooperation with other business support programs and the firms that benefit from the
respective trainings. The RCI contribution in these activities is in the range of 30-50 percent.
• Certification and consultancy activities provided to the firms in the region are supported up to
one third by RCI.
• As soon as the programs are successfully piloted in a certain country, external - in many
cases non-USAID - funds are used in order to ensure continuation of the programs initiated by
RCI.

Utilizing the Global Software Development Models for Increased ICT Competitiveness
in Eastern Europe
The launch of the program afforded an important opportunity for small firms and new entrepreneurs:
the opportunity to build effective cooperation based on quality, using the latest models for
organization and management of software engineering processes such as Capability Maturity Model
Integration (CMMI). The CMMI model is well recognized by the ICT leaders as the de facto standard


for advanced software development and delivery of complex ICT services. The complexity of the
products and the influence of internal and external requirements and pressures indicate that, in the
future, organizational prosperity will be highly influenced by the willingness of the organizations in the
region to address process improvement across the entire product development life cycle – from
conception through delivery and maintenance. Getting the people-process-technology triad working at
“its best“ is a must for those organizations in the region that want to compete on the global market.
Through CMMI process improvement, organizations could gain five primary types of benefits:

• Cost: reduction in the cost to find and fix a defect; improved average costs for software
development;
• Schedule: increased percentage of milestones met and predictability of meeting schedules;
• Quality: improvement in quality, related to reducing defects over time or across product life cycle;
• Customer Satisfaction: recognition on the global market, improved customer satisfaction and
increased client base;
• Return on Investment: positive return on investment from CMMI-based process improvement.

In many cases, CMMI is considered a strong advantage for subcontracting in the value chain of
multinational corporations such as Boeing, Siemens, Motorola, Toyota, General Motors, JPMorgan,
and government agencies such as the Department of Defense and the Department of Energy.
Therefore, CMMI implementation is an important step towards increased competitiveness on the
global market for high-quality software solutions.

Another important aspect of effective cooperation based on quality is the ability to effectively lead and
coach development teams. Therefore, in the course of the program, the team of ESI Eastern Europe
started introducing companies from the region to the concept of how to manage projects quantitatively
in order to complete projects on schedule, within budget, and with all requirements met. Through the
use of the Team Software Process (TSP), leaders are given an example of both a strategy and a set
of operational procedures that use disciplined software process methods at the individual and team
levels.

THE RESULTS:
The boom in the development of the ICT has changed South East Europe’s image from a destination
with resellers and testers to a destination offering products and/or services, and brought benefits at
the firm and regional levels.
Firm level benefits
Four main types of business models are used by the firms supported by RCI. The software
improvement program was aligned with the specific objectives of the business model used by a given
company.

• Cost-efficient software outsourcing
The outsourcing model is used by companies focused primarily on software development
based on well-defined client requirements. The main competitive advantage is the cost
efficiency of the production. Companies are able to produce high quality software at a lower
cost compared to the development prices in other locations. There are companies following
this model in their architecture design and management activities, but the majority uses it for
the development of product parts/modules according to the requirements defined by the client.
The RCI SPI program has enabled companies to provide efficient and effective outsourcing
services using this model.


• Value-added software development and partnership
This business model includes activities targeting the complete life-cycle development process
for the clients such as business analysis requirements development, software development,
testing, and deployment. The companies using this business model are focused on bringing
value or improving the business productivity of the solution and not just in the software
development. The SPI program has supported those firms to be able to optimize the
production and design process for small projects (around 8 – 30 developers), integrate their
teams into large-scale projects, and complete separate activities in correspondence with the
overall project implementation process.

• Own products
In addition to outsourcing and value-added services, some of the companies that were
supported by the RCI activities developed and marketed their own products such as ERP
systems for small businesses in specific economic sectors, banking systems, CRM systems,
document management, web design and others that targeted local or regional market niches.
Many of the companies had leading positions in their market niche in the region. The RCI ICT
program supported those firms in optimizing the development process and improving the
positions of their products.

• System integrators and consultants
A few of the participants in the SPI activities were system integrators building relatively
complex IT systems. RCI activities were aimed towards improvement of the processes related
to value added services such as deployment and support of ICT systems.

The ESI Center of Eastern Europe conducted a special survey among the companies that
participated in the SPI program (2006-2009). Twenty-two companies from Armenia, Bulgaria, Bosnia
and Herzegovina, Croatia, Macedonia, Romania, and Moldova participated in the survey. All of the
firms were small- average number of employees per company was 57, and 9 of the companies had
less than 25 employees

The survey included CMMI and ITMark certified companies, companies that were in the process of
CMMI and ITMark certification, and companies that didn’t manage to fulfill all the requirements for
ITMark certification at the time of the interview. The questionnaires were filled out by senior managers
or owners of the companies.

The conclusions of the survey are summarized below:
• 82 percent of the companies increased their competitiveness by more than 20 percent
• 85 percent of the firms reported increased client satisfaction and 58 percent of the companies
reported decreased “time to market”
• 37 percent of companies reported sales increase of 20-50 percent due to the CMMI/ITMark
implementation program

Each company that participated in the survey highlighted specific benefits related to their own
business. Examples of such benefits were:

• Company 1 (Macedonia) – development and implementation of ERP solutions
o “ The most visible result we have seen is having real-time reporting on what is really
happening within our company. Our managers have online access to all of their projects
and can instantly see which tasks are on time, which are lagging behind schedule so they
can push the team or add more resources to the team to get the task done on time.”
o “Processes are planned, documented, performed, monitored and controlled at the project
management level.”
o “The pressure created by insufficiently well defined requirements was decreased and we
reduced the time needed for their implementation.”


o “Before the ITMark implementation “the deadlines were set only as a wish”, because they
could not be objectively estimated”.
o Subsequently the company continued its SPI initiative and achieved advanced ITMark
certification.

• Company 2 (Moldova) – development and implementation of banking systems
“When implementing ITMark and as recommended by CMMI we introduced a new practice in
our work with Banks: When we receive requirements we create a prototype of our vision of the
product and then discuss it again with the client. In 80 percent of the cases our vision
appeared to differ a lot from the client’s vision. Previously this created a lot of rework. Now we
can assure a correct vision of the requirements and final product that are understood correctly
by us and the clients.”

• Company 3 (Bulgaria) – a small Bulgarian IT company, offering a broad range of
hardware and software solutions
o The company has received a number of awards over the years, in particular from their
main client – a big multinational company.
o The company has been working with the ESI Center of Eastern Europe with the objective
of reaching CMMI Maturity Level 2.
o To keep the company’s clear and strategic business objectives at the forefront of all
activities during the complete SPI initiative, the ESI Center of Eastern Europe suggested
carrying out an intermediate evaluation based on ITMark. The evaluation helped the
company to sustain and further develop its business with its main client- a division of
Siemens.
o The Company passed all the three areas of the ITMark evaluation and was CMMI certified.

Regional level benefits

One of the most important results from the “ICT Competitiveness Pyramid” approach on the regional
level was that the companies and associations from different countries in the region covered by RCI
created a regional community of practice and launched several joint initiatives in order to increase the
ICT competitiveness of the whole region. With the support of RCI, the associations which had initially
recognized and committed to the pyramid model such as the Bulgarian Association of Software
Companies (BASSCOM), and the Macedonian Association of ICT Companies became regional
leaders in the promotion of ICT competitiveness. They were able to launch regional projects in which
to transfer their experience to other associations in the region.

ICT Indicators 2005-2013
In 2009, RCI started new regional activities aimed at enlarging the regional market for IT solutions,
developing training and certification networks, and building the foundation of the “ICT
Competitiveness Pyramid” in new countries such as Georgia and Ukraine.


Table 3: ICT Pyramid Results
GENERAL CORRESPONDING ESI CEE Cumulative total
ELEMENT/INDICATOR INDICATORS 2005- 2013 February
ESI Eastern Europe and related organizations
No of SMEs that participated in
Number of firms receiving CMMI/ITMark, PM and other 520
USG assistance to professional trainings;
improve their management Organizations attending events
practices where ESI presented RCI 2304
activities
No of SMEs that participated in
CMMI/ITMark trainings and
practical workshops; No of SMEs
Number of firms receiving
in the IT Business Solutions
USG assistance to invest 586
Network www.IT2Busines.org;
in improved technologies
No of SMEs in the IT Training
and Certification Network
www.Quality2IT.org.
IT awareness events participants
4920
- individuals
IT awareness events participants
2304
- organizations
IT events - awareness, training,
assessments, workshops, 224
practical in-house, etc.

This document is produced by USAID’s Regional Competitiveness Initiative RCI; Implemented by SEGURA
Partners LLC www.RCIProject.com


CASE STUDY:
Tourism Development in the Western Balkans
THE CHALLENGE:
Western Balkans is a region rich in globally significant cultural and natural assets. The
competitiveness of this region as a travel destination lies in its rich historical heritage,
authentic culture and well-preserved nature. The image of an undiscovered part of
Europe sprinkled with historical sites, stunning landscapes, and authentic communities
attracts travelers interested in exploration and off-the-beaten-path experiences. While
each individual country has a lot to offer, the joint marketing of the Western Balkans as
one destination enhances the competitiveness of the entire region. For many travelers,
especially those from distance starting destinations, the ability to combine two or more
countries into one itinerary based on specific interests or convenience is a large factor
in the ultimate purchase decision.
Unfortunately, uneven economic development, socio-political dynamics associated with
the break-up of former Yugoslavia, and severe military conflicts in some of the countries
has made cooperation in the region difficult. To function as one integrated travel
destination (as frequently desired from the demand perspective) countries in the region
had to establish effective cooperation to develop joint tourism products (cross-border
routes, common themes, joint attractions, etc.), deliver authentic regional experiences
and market themselves as one destination.
Tourism and the Local Context:
According to the recently updated long-term outlook and assessment of future tourism
trends produced by the UN World Tourism Organization (UNWTO), the number of
international tourist arrivals worldwide is expected to increase by an average of 3.3
percent per year from 2010 to 2030. This represents some 43 million more international
tourist arrivals every year, reaching a total of 1.8 billion arrivals by 2030. Europe has
consistently been the biggest generator of international arrivals and is expected to
account for more than 45 percent of arrivals in 2020, maintaining an average growth
rate of 6.5 percent. While Northern and Western Europe have seen much slower growth
in recent years (Northern Europe: 5 percent in 2011; Western Europe: 3 percent in
2011), Central/Eastern Europe and Mediterranean Europe have been the main
generators of growth on the continent (percent in 2011).
The power of tourism lies in its significant economic impacts. According to the World
Travel & Tourism Council (WTTC) and Oxford Economics, in 2011, tourism generated 9
percent of the global GDP. One in every twelve jobs (255 Million in total) around the
globe is supported by tourism. This is 6 times more than the global automotive industry,
4 times more than the global mining industry and a 1/3 more than the global financial
industry. In Europe tourism is the biggest employer, exceeding the auto industry by a
factor of 3.


Based on The World Bank publication “Transformation through Tourism Harnessing Tourism for Growth and
Improved Livelihoods”

Source: The World Bank, Transformation through Tourism (2012)

The deep political and economic reforms in the last two decades have created a lot of
challenges for WB economies. In many countries, historically important industries have
declined due to lost markets or economic restructuring. This has led to vast
unemployment, increased poverty, and economic decline of entire regions (Table 1).
Agriculture remains an important source of living but it is mostly fragmented, inefficient
and uncompetitive.
Table 1: Unemployment and poverty figures for WB countries
Country Unemployment Population below
(2011)* poverty line

Albania 13.3% 12.5% (2008)

Bosnia & Herzegovina 43.3% 18.6% (2007)

Kosovo 45.3% 30% (2011)

Macedonia 31.4% 30.9% (2011)

Montenegro 11.5% 6.6% (2011)

Serbia 23.4% 9.2% (2010)
Note: *Some of the figures might be exaggerated due to hidden unemployment.
Source: CIA Factbook


To counterbalance their serious socio-economic challenges, Western Balkan countries
possess a wealth of natural and cultural assets. They are home to ten UNESCO World
Heritage Sites, vast areas of protected lands with habitats of rare or indigenous animal
and plant species, ancient and colorful traditions, arts, rituals and other intangible
cultural heritage (some of which is also included in UNESCO ICT List). Despite the
globally recognized value of these assets, some of them have been subject to poor
management due to limited funds and lack of capacity. The problem is exacerbated by
low public awareness and poverty-driven illegal activities such as poaching, felling,
treasure hunting, etc. Amidst this complex combination of challenges, many valuable
assets with potential of becoming vibrant tourism attractions remain underutilized and
hidden for the world traveler. The lack of development of these is also associated with
missed opportunities for revenue generation and other benefits for local stakeholders.
In summary, the major challenge for Western Balkans countries was to overcome
differences and find a way to collaborate to benefit from the opportunity that the wealth
of natural and cultural assets offers. The tourism industries in the countries needed to
expand their thinking and connect with partners in neighboring countries to begin joining
their offerings in a regional sustainable tourism portfolio. In addition, they needed to
begin positioning themselves as one singular destination that invites travelers for
exploration and adventure.

THE INITIATIVE:
Numerous past initiatives to cooperate in tourism have failed in the past. It was hard to
bring two countries around the table, let alone all six Western Balkans countries. The
support of the United States Agency for International Development (USAID) Regional
Competitiveness Initiative (RCI) Project facilitated the establishment of a regional
network of tourism stakeholders who began to realize the value of exchanging best
practices and working together. This was a very important first step. Members of the
regional network began to realize the importance of cooperation and to see the value of
promoting the region together. Multiple meetings and discussions were held and
facilitated to achieve that end, but reaching an agreement on how to make it happen
was difficult. Another difficulty was that
regional initiatives attracted many
representatives of donor programs
supporting tourism, but rarely motivated
active engagement and commitment from
the private sector.
What was needed was an initiative so
appealing and motivating for all
stakeholders in the region that they were
ready to put all differences aside and
unite efforts. It needed to be an
Regional Tourism Steering Committee Meeting
opportunity that was of interest to the Podgorica, December 2011
private sector to ensure real involvement
of the industry.


In the course of facilitating the search for such a uniting initiative, the RCI team came
across the opportunity to develop a promotional insert for the National Geographic
Traveler magazine. The National Geographic brand is globally recognized and
associated with values that all tourism stakeholders in the region related to. At the same
time, the audience of the National Geographic Traveler magazine corresponded to the
profile of the travelers that all countries in the region were trying to target. This became
the opportunity that brought all interests together. Stakeholders from the region began
working together to facilitate the development and publishing of the insert. The activity
was partially funded by RCI/ USAID, but required
additional investment and active involvement from each
of the participating countries. The process was not
without difficulties and challenges, but ultimately, the
supplement was produced. It was officially presented at
different events, but most importantly it was included as
a promotional insert of the magazine, reaching over
225,000 subscribers from the UK, Germany, and the
Netherlands.
Because the National Geographic brand was what
efficiently brought Western Balkans countries together,
the RCI program saw value in continuing the
cooperation with the organization. The next opportunity
to cooperate with National Geographic for the benefit of
the joint promotion of the region was to support the First Page of the promotional
development of an online MapGuide for the Western insert for the National
Balkans (www.balkansgeotourism.travel). The idea of Geographic Traveler Magazine
the MapGuide was to serve as an integrated platform
that promotes the region as a single destination, and enables travelers to plan trips that
reveal the authentic spirit of Western Balkans countries. If implemented well, it would
become an effective market-
access tool for authentic and
distinct travel experiences within
the region. As all activities
involving National Geographic,
this program had to be based on
the values and mission of the
organization. This meant that the
MapGuide program naturally
facilitated stronger commitment to
the principles of sustainability at
the regional and country levels.
Another important aspect was
that the MapGuide featured
authentic tourism attractions and
small, local tourism service Screenshot from the Home page of the Western Balkans
providers who are the true Geotourism MapGuide Portal
carriers of the local spirit. This


meant that the platform was empowering smaller tourism service providers generally
have very limited market access.
Given all of these benefits, regional stakeholders were ready to commit to the initiative.
Again, the main financial support was coming from RCI/ USAID, but each of the
countries was expected to contribute additional funding and to actively participate. The
process of planning and developing the MapGuide was facilitated by National
Geographic’s team, and took regional stakeholders through a planning phase
(generating ideas and designing a plan of action), a nomination phase (generating
nominations for attractions and service providers to be featured on the MapGuide, and
ensuring that they adhere to the sustainability principles of National Geographic), and a
launch phase (official launch of the MapGuide and raising awareness among the
broader public). Throughout the program, local stakeholders were also exposed to
trainings to raise awareness of the geotourism principles at the core of National
Geographic’s value system. National Geographic defines geotourism as:
“…tourism that sustains or enhances the geographical character of a place – its
environment, culture, aesthetics, heritage, and the well-being of its residents.”
National Geographic encourages the adoption of geotourism strategies around the world
as part of its mission to “inspire people to care about the planet.” By working with
stakeholders in the Western Balkans, the organization facilitated increased recognition of
the value of the region’s natural and cultural assets. Adherence to geotourism principles
was the main criteria for nominations in the MapGuide. This stipulation efficiently
operationalized the importance of sustainable management of cultural and natural
resources.

THE RESULTS:
The Western Balkans National Geographic MapGuide portal was launched in June
2012. Working with National Geographic made regional stakeholders focus on the
opportunity of promoting their region under the National Geographic brand and forget
about many of the differences they have had in the past. There are several important
results that this activity produced:
Facilitate productive regional cooperation
As described earlier, the value of working together was something that many
stakeholders in the region understood. The regional network and different joint activities
supported by RCI/USAID helped make some progress, but something really powerful
was needed to reach a “tipping point.” The National Geographic brand proved to have
that power. By inviting National Geographic into the process, and supporting the
development of the insert and the MapGuide, RCI/ USAID secured the unification of
regional stakeholders. The shared desire to be globally promoted by the National
Geographic brand was more important to WB countries than the differences they had.
The regional tourism network has existed as a mechanism for cooperation for some
time before the aforementioned activities. The MapGuide program facilitated the
creation of a second mechanism for regional cooperation – the WB Geotourism


Stewardship Council. Project activities were entirely based on joint efforts through these
mechanisms, so now the tourism industry in the region has two operational and active
mechanisms that continue to be effective means for cooperation towards the better
positioning of the region as a competitive travel destination. The established cross-
country group that worked together on the MapGuide continues to function as an entity
that plans and undertakes cooperative initiatives to promote the region on international
markets.
Involve private sector
One of the main challenges in facilitating regional cooperation was motivating the
private sector to join in on cooperative efforts. In many cases, regional cooperation
initiatives attracted private sector representatives, but never to the extent of taking the
lead and investing time and resources. The value of being part of an initiative supported
by National Geographic generated interest in the private sector. In addition, the fact that
the MapGuide became a platform that enabled market access for local businesses that
were committed to the authentic spirit of the region energized many tourism
entrepreneurs and business owners. During the implementation of the MapGuide
program, private sector representatives were engaged, and eventually started taking
lead in the planning and coordination activities.
Facilitate Recognition and Prominence for Local Assets
An important challenge addressed during the implementation process was the limited
recognition of the many valuable cultural and natural assets of the region. By putting the
spotlight on the authentic and the local, the MapGuide program generated more
focused attention on the value and hidden potential of underutilized cultural and natural
attractions. One of the
continuing roles of the
Council during the project and
now continues to be the
identifying, recognizing, and
classifying of such sites.
Generate buzz and
promotion
The launch of the online
portal was marked with a
series of promotional events
in Washington DC, planned Photo from the Western Balkans Exhibition at Farragut Park Square,
and implemented by RCI June 2012, Washington DC
(USAID), National
Geographic, and tourism stakeholders from the Western Balkans region. Promotional
events included an evening reception at the headquarters of National Geographic, open
air exhibitions in downtown Washington, DC and exhibitions at the USAID
headquarters. At least 2000 people were exposed to the regional promotion. The
promotional events generated word of mouth and active media coverage (at least 3
country- and regional-level televisions, and more than 10 newspapers and online-media
sources).


Generate momentum for next steps
One of the most important results of the partnership with National Geographic was the
generated momentum in regional cooperation in to promote the Western Balkans. The
excitement that accompanied the launch of the MapGuide, and the enthusiasm of the
people who attended some of the promotional activities (exhibitions, receptions, etc.) in
Washington, DC inspired regional partners to begin looking for new and interesting
ways to work together and promote the region. Council members continue to be in
regular communication, and are beginning to utilize contemporary means (such as
social media) for promoting the MapGuide and regional travel.

This document is produced by USAID’s Regional Competitiveness Initiative RCI; Implemented by
SEGURA Partners LLC www.RCIProject.com


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