12 Findings on the Albanian Startup Ecosystem

TIRANA, March 12

Entrepreneurial and Innovation Ecosystem in Albania is a research study conducted in Albania in January 2019 and updated in September 2019.

Invest in Albania’s founding agency, Manoolia, was among the 50 ecosystem actors, 17 start-ups, more than ten universities, and policymakers that were were interviewed to gain a comprehensive understanding of the regional entrepreneurial ecosystem in Albania.

1. The start-up ecosystem is still nascent with most support organizations located in Tirana, focusing at the pre-ideation and ideation phase and offering too broad services. 2. There is little support for start-ups post ideation guiding them in a continuous incubation process and almost no support for aspiring entrepreneurs in the regions. However, the service offering for start-ups has steadily increased since the beginning of 2019. 3. There is a potential for Albania (especially for regional cities) to develop as an ICT start-up hub, due to a young, multilingual population that is looking for self-employment and low capital requirements to set-up ICT businesses.
4. There is little budget for and focus on entrepreneurship and innovation promotion by the government and little trust in the government capacities to support the ecosystem.
5. There is no evidence-based and coordinated strategy of donor organizations and the government in the area of entrepreneurship promotion, however, recent efforts by the government are directed towards developing a “Start-up Law” in a joint collaborative approach.
6. A few municipalities and regional governments have started to shift their focus from infrastructure development to innovation and knowledge-based economic development, however, these initiatives mostly lack strategies, funds and sector diversification, in proportionally focusing on the tourism sector.
7. There is little cooperation among actors of the triple helix and capacities of the actors of the triple helix are weak. Especially in the regions, universities, businesses, and the government operate in silos.
8. Most of the start-ups feel that access to early-stage finance (e.g. equity, convertible debt, crowdfunding, etc.) is one of the biggest challenges.
9. There is little entrepreneurship activity happening in the regions, with most efforts focusing on livelihood creation and small-scale traditional entrepreneurship in sectors such as tourism, agriculture, handicraft, etc. Furthermore, most businesses in the regions operating under the “start-up label” cannot be classified as start-ups, given their limited growth perspectives.
10. Start-up promotion is mainly focused on Tirana, with small-scale initiatives in the regions to support local entrepreneurs, mostly conducted by NGOs.
11. Regions are faced with high brain-drain to Tirana and abroad due to unawareness about the potentials in the regions, contributing to a decreasing entrepreneurship activity in these localities.
12. Entrepreneurship promotion is gaining traction in universities in Tirana, however, it remains an alien concept to most universities located in regional cities due to lacking funds and knowledge and if at all, is only pursued as part of European funded projects.

The study was carried out in the framework of the ‘EU for Innovation’ project, funded by the European Union and implemented by GIZ and Swedish Embassy, which seeks to improve the innovation ecosystem and boost start-up creation in Albania.

Source/Photo credit: euforinnovation.al