The analysis of Central Macedonia's regional innovation system showed that the main problem in the region is that of the latent integration of industry and technology that characterises both technology supply and demand.

By latent technology supply we characterise the informal operation of the system for the technology supply and transfer, in which the in-flows of technology and innovation in the industrial sector are not recognized as distinct units. This is associated with three events:

·       The main route by which businesses acquire new technology is through the purchase of mechanical equipment. In-house R&D departments are rare, although in some cases R&D is carried out by production and quality control departments.

·       Inter-firm collaboration, which is a major source of technology know-how, is primarily in the form of subcontracting. The subcontractor works according to the plans, production methods and product specifications provided by the principal: this dependence seriously restricts motivation and the incentives for innovation.

·       Technology dissemination and collaboration between industry and research are both limited.  Research activity is primarily concentrated in university laboratories, and it is fragmented among numerous small units without any specific clear industrial goal or connection.  This is a structure that does not allow for the development of complementarity, interdisciplinary activity or the constitution of large-scale poles of competences.

All three routes for technology supply in industry and in SMEs in particular (technology dissemination, technology exchange, technology purchase and licensing) are covered by broader activities and relationships: the purchase of technology by the purchase of equipment and machinery, the exchange of technology through subcontractual relationships between firms, and the technology dissemination via the loose relationships between industry and the universities.  Academic activity, sub-contracting relations, and machinery purchase are buffers to actions aiming to introduce innovations and restructuring into the technology transfer and supply system.

By latent technology demand we characterise the lack of active technology demand and the low awareness in industry about the capabilities of new technologies to deal with production, competition and marketing problems. Lack of awareness and low information inputs bound the capacity of firms to understand their real needs and to develop adequate solutions to fulfil these needs. This concerns both the spheres of marketing and production.

·       Market fluidity and globalisation of competition made information on market requirements extremely complex. Barriers for relevant and in time market information are sharper in firms that usually operate into regional and national markets. It is well documented that during the current industrial configuration, technology and innovation are market driven, as markets set productivity and product quality standards. However, there is a serious gap between markets and changing needs for product quality and specifications, as well as for flexible solutions to adapt the production processes. Peripheral firms have an additional difficulty to follow and fill this gap.

·       On the other hand, a constant trend appears in firms of Central Macedonia to seek competitiveness through defence strategies of deskilling, low use of human resources, and exceed investment in equipment and automation. Innovation needs are concealed both in the production process, where automation problems prevail, and in product development where prevailing problems are those of quality than new product design and development.

Latent technology demand, with respect to market globalisation and defence production strategies of deskilling, undermine innovation initiatives developed on an entrepreneurial basis. It is documented by in depth technology audits that many private  firms, offering R&D, technology and innovation services, have underestimate the effort needed to open the market and the difficulty to develop the SME's appetite for these services.

These are the real problems that the Regional Technology Plan is facing in Central Macedonia. In the supply side, the neglect of local research resources prevents regional firms from technology inputs based on local scientific skills and expertise. Low interfirm technology co-operation weakens technology inputs from an important technology transfer route, as well as local technological consolidation between producers and suppliers. Rationalisation of technology supply is poor as far as competition between technology suppliers remains low. Regional firms lack both in-house technology capacity and external input from their immediate environment. In the demand side, low active demand for technology and innovation services do not sustain a regional technology market to prosper, neither the clustering of innovative firms and the positive multiplication effects of a vivid regional technology pole. The private sector remains out of the R&D and innovation activity, and the innovation support system and services are placed exclusively under the public initiative.

At the centre of these weaknesses lies the region's industrial firm and its difficulties in following advanced business strategies. For the average European industrial firm, innovation is not an abstract concept, but is bound up with the firm. s ability to apply new methods and technologies to production (automated machinery, flexible workshops, horizontal shop-floor structures), to the product (new products, small batches, short production runs, quality circles, total quality control), to inter-firm relationships (Just-in-Time delivery systems, production networking, externalisation of services, steady producer/supplier relationships) and to the work force (flexibility, up-grading of skills, multifunctional work culture).  The gap between firms in Central Macedonia and their counterparts in Europe's more advanced regions reflects in miniature the true technology gap, which covers the fields of commercial strategy, technology in-flow and individual ingenuity in adapting to an ever-changing international environment.

The strategy of the RTP will therefore focus on Central Macedonia's industrial firms, and especially on their latent research and technology integration.  These constitute the Plan. s basic orientations for action. From this point of view the priorities finally established for the Central Macedonia RTP are grouped into 6 different areas, each with a distinct thematic objective and goal. Of these, five pertain to Central Macedonia's businesses and the factors affecting their ability to innovate, while the sixth covers monitoring, evaluation and adjustment of the actions of the RTP. 

Priorities set by the Central Macedonia RTP

Increase funding available to businesses fortechnology and innovation 


Support technologicalcooperation amongbusinesses


Increase of human resource technology skills












Support technology transfer and business accessto external sources of technology






Support the endogenous technology supply and demand



Monitoring and evaluation of RTP actions 




·       Increase funding for research, technological development and innovation both promotes the modernisation of existing businesses as well as encouraging the creation of new hi-tech firms. In numerous dynamic areas in Europe and the United States, forms of risk capital have greatly contributed to the development of high-tech industries. However, the actions recommended by the RTP have nothing to do with the creation of new institutions, like the venture capital measures included in the Operational Programme for Industry, but are rather addressed to direct utilisation of existing funding mechanisms. More specifically, actions were designed to utilise funds available under the 2nd Community Support Framework and the 4th R&D Framework Programme of the European Union. 

·       Support for technological co-operation among businesses constitutes a central priority for the expansion of innovative production methods and products.  It is claimed that «businesses learn better from other businesses», and on this basis inter-firm relationships, supplier-producer relations and networks are all crucial factors in innovation. In this area, RTP actions focus on the one hand on the development of technological collaboration networks within specific industrial branches, and on the other to attracting technology-intensive foreign investments which would then act as initial poles for new industrial sectors. The actions included in this area are designed to complement the actions for business networks included in the programme of the Ministry of Industry «The future of Greek industry». 

·       Increase of human resource technology skills is designed to promote new business strategies that depend on the active participation and technology capability of the firm's executives and employees. The RTP emphasises in-house personnel training, and stresses the link between training and finding (or keeping) a job. Particular weight is given to training for entrepreneurs and senior executives on matters relating to innovation management, export promotion  and risk management associated with investment in South-Eastern European countries. 

·       Support technology transfer and businesses access to external sources of technology deals with the external technology and innovation environment of firms. The complexity and rapidity of technological change have shown that external sources and technology transfer are important factors in the technological structure of any business, be it large or small.  Especially in Central Macedonia, the limited development of in-house R&D departments makes turning to external sources of technology even more important. RTP actions in this area focus on two principal orientations: on the one hand, they aim at the development of horizontal technology transfer mechanisms, in which all those involved in research, technology and business would co-operate in order to cover broad technological  sectors and, on the other, they seek to develop sectorial mechanisms for technology transfer, thus ensuring coverage of the technology requirements of the region's principal industrial branches. 

·       Supplementing these orientations is the support of endogenous technology supply and demand, which is concerned with the development of local applications within specific technology sectors (information technology, quality, environmental technologies, agro-technologies). A major problem to deal with is the latent technology demand. The RTP actions are designed to broaden the local market for a number of important technologies. However, these are actions that cannot be undertaken by the businesses themselves, since they require significant effort with no guarantee that they will pay off in the long run.  Their effects are diffuse, making them collective actions from which all the businesses in the area will benefit, either as users or as providers of these technologies.  

The five areas of priorities just mentioned focus on Central Macedonia's businesses.  They promote innovations in the basic area of business strategies: in production methods, in products, in inter-firm relationships and in personnel and executive training.  At  the same time, they facilitate access to various levels of technology: horizontal technologies, sectorial technologies, and specific technologies as well. 

·       The last priority area is different: it is associated with the application and effectiveness of the regional technology strategy promoted by the RTP. This includes monitoring the actions, developing criteria and evaluation coefficients and fine-tuning the Plan while it is being implemented. In this case, the sole action is the expansion of the RTP Observatory, as a mechanism for the monitoring, evaluation and adjustment of all actions pertaining to the up-grading of the innovation system in Central Macedonia.