Newsletter 2/2010 - Our South East Europe

Building human capital instrumental to achieving market competitiveness

Recognising building human capital as the main pillar for increasing long-term competitiveness of the region, the Regional Cooperation Council (RCC) Secretariat places significant efforts to developing the knowledge triangle – research, innovation and education – including realisation of related reforms and improving infrastructure.

“The region needs to make better use of the existing human, institutional and financial resources, complying with the high-prioritization of human capital development in defined national priorities”, says Mladen Dragasevic, Head of the RCC Secretariat’s Building Human Capital Unit.

“More effective regional response is necessary in order to increase investment in the knowledge complex, in accordance with the priority areas of the Lisbon Strategy. Building a knowledge-based society through developing human potential and competence is a challenge and a priority for the region, especially for the Western Balkans on their path towards EU accession.”

Although human capital development is a national priority throughout South East Europe, Dragasevic underlines that in the majority of countries there is a lack of investment in the knowledge triangle.

“Share of national income devoted to education and science in some countries is cause for serious concern. In addition, the global economic slowdown is aggravating this trend.”

The latest Investment Reform Index (IRI) 2010 report by the Organisation for Economic Co-operation and Development (OECD), devoted to human capital dimension, clearly links it to economic success.

“The quality of human resources heavily affects foreign direct investment (FDI). Even more specifically, an additional year of educational attainment in the population raises the stock of FDI by 1.9%.,” says the IRI report. 

The report adds that more skilled enterprise founders tend to operate firms that have higher survival probabilities and grow faster.

It particularly emphasizes the importance of human capital in high-tech sectors noting that attracting high-technology business is considered a strategic priority by many SEE governments. Finally, the IRI report brings out relationship between education and productivity by concluding that better educated employees tend to be more productive.

There is an obvious need to modernize education systems in the region. On top of that, a couple of areas need additional, coherent boost in the region: life-long learning, evidence-based policy making, societal debate on education policy, stakeholder participation in decision-making and autonomy of educational institutions.

Professor Ladislav Novak of the Novi Sad University is of the opinion that higher education in SEE region is one of the sectors capable to successfully compete on the European scene.

“This is a good opportunity for SEE countries to participate from the very beginning in the restructuring and harmonisation of the higher education system in a global scale and to contribute to making the European Higher Education Area (EHEA) a reality through European, regional, national and local policy and action”, says Professor Novak, an active participant in the process of reform of higher education system in South East Europe under the auspices of the Regional Cooperation Council.

The RCC strongly supports initiatives devoted to institutional reform and cooperation in higher education, bringing together a range of institutions from the Western Balkans and EU, including universities, higher education authorities, regional and European organisations and independent experts.

The Education Reform Initiative of South Eastern Europe (ERI SEE) represents a regional platform for cooperation in the field of education and training. It aims to support national reforms in education and training through regional capacity building, transfer of know-how and linking these efforts to European frameworks for education development.

“Underdeveloped countries and countries which do not belong to the forefront of contemporary technological development now have unique chance to catch up the train and make a fresh start together with the technologically advanced ones”, adds Novak.

He is of the opinion that such an approach requires substantial change in the national strategic plans, including advancement of structural reforms of higher education.

Recognising the need for a continued, entrepreneurial learning, South East European countries agreed to establish SEE Centre for Entrepreneurial Learning (SEECEL) in Zagreb in July 2009, as an independent institution financially supported by the European Commission and Croatia with the operational and content-managerial support from the SEE country partners.

“In compliance with its mission as well as the Strategic Plan 2009-2012, SEECEL primarily functions as a policy broker and facilitator of systemic co-operation and “peer-learning” aimed at moving beyond classical approaches and, subsequently, developing wider understanding of the key issues involved in implementing lifelong entrepreneurial learning in the SEE”, says Efka Heder , Director of SEECEL.

From the perspective of a businessman, Vasko Kronevski, director of a software company Nextsense from the Former Yugoslav Republic of Macedonia, considers investment in human resources key prerequisite for a successful business.

“Having in mind that technology grows rapidly, the investment in knowledge is very important for our company, especially investment in human resources”, says Kronevski.

“It is of great importance for resources to be highly skilled, competitive and recognized as brands among others from the same field of interest.” 

When discussing cost effectiveness of education and training of his employees, Kronevski underlines that since people learn as long as they live, investing in them makes them “grow stronger in their character and in building good business skills”.  

“Our employees are becoming recognizable brand on the labour market as a result of the knowledge they possess. The employees’ personal development and life-long learning programs are part of Nextsense organizational culture.”

The South East European countries need regional cooperation in adopting a common concept of entrepreneurial learning. According to Heder, the working practice SEECEL requires is collaboration based on the European Union’s “Open Method of Coordination” and the strategic framework for European cooperation in education and training (ET 2020), including an increasing role of regional cooperation bodies such as the RCC.

Novak believes that the RCC has an important role to play in this process by offering assistance in pre-accession activities, regional university cooperation and monitoring of various regional activities, exerting strategic leadership in regional cooperation.

Development of human capital is basically pursued at the national level, but the rapid internationalization of knowledge and development of communications introduce a strong international component to the process.

The Regional Cooperation Council has taken over the role to facilitate and accelerate cooperation in this area to boost development of South East Europe and equip its people with necessary skills to compete on equal footing at the global scene.


The graphic illustrates participation in any form of learning, broken down by age and sex. (Photo

The graphic illustrates participation in any form of learning, broken down by age and sex. (Photo