BAA-OAA-LLDI-2019

Addendum # 03, USAID/Serbia

Innovation Driven Development in Serbia

Issuance Date: June 17, 2019

Questions due: July 06, 2019 17:00, Serbia local time
Open Period: June 17, 2019 to August 16, 2019 17:00, Serbia local time

** Innovation Driven Development in Serbia **

Addendum to
BAA-OAA-LLDI-2019

The United States Agency for International Development (USAID)

USAID Mission in Serbia
Office of Democracy and Economic Growth

Broad Agency Announcement for Locally Led Development Innovation

Overview

This Addendum # 03 to Broad Agency Announcement (BAA) BAA-OAA-LLDI-2019 seeks

Expressions of Interest on game changing solutions to advance innovation-driven/knowledge-
based development and improve the overall environment for innovation driven development in
Serbia.

Objective

The objective of this effort is to improve the overall ecosystem for startups and innovative
business initiatives and stimulate a culture that embraces new opportunities generated by
technological change in order to further sustainable economic growth in Serbia.

Background/Challenge

Serbia is at the development stage where it should look into different opportunities to define,
embrace and apply the potential of the knowledge-based economy and innovation-driven
development. For the purpose of this effort we define innovation driven development as the
approach in which the dominant source of competitive advantage is a result of an ability to
produce innovative products and services using advanced methods and knowledge (of design,
production, management, trade, etc.). It corresponds with the concept of a “knowledge-based
economy”, a level of economic development in which success depends on knowledge,
information and high skill levels, and the increasing need for ready access to all of these by
the business and public sectors. The key component of a knowledge-based economy is a
greater reliance on intellectual capabilities than on physical inputs or natural resources.
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For several years, USAID/Serbia has been supporting private sector-led initiatives within its
economic growth assistance provided to Serbia, and some aspects of these efforts supported
and still support startups and promote the design and application of innovative solutions. The
Government of Serbia (GoS) has also initiated several initiatives aiming to improve the
infrastructure and overall environment for innovative start-ups. This provides a foundation
for the further development of an innovation-driven environment. However, interventions in
this area to date have been undertaken in isolation from each other without a unified vision of
how these efforts work together. New ideas and interventions, which may include but are not
limited to addressing the ecosystem specifically for start-ups, are sought to address the below
challenges.

USAID/Serbia has identified (thus far) two major challenges to the comprehensive expansion
of innovation driven development in Serbia:

1) Inadequate domestic institutional support capacity and regulatory framework to

support innovative initiatives and companies. Serbian entrepreneurs wishing to
innovate, design and create find inadequate support from the existing ecosystem, from
both the government and the private sector sides. USAID defines this ecosystem to
include investors and venture capital funds, support organizations (co-working spaces,
hubs, incubators, IT parks, etc.), universities, corporations / industry, and media. Each
of these stakeholders has a role to play depending on the stage of the innovation activity
in question. To develop a true innovation-driven economy, entrepreneurs require a
supportive environment to help them through the various stages of their development -
from establishment through the stage where they can attract regional and international
investors. Currently, the activities and efforts of all existing stakeholders in the
ecosystem, as well as the related regulatory framework, are not integrated and
synchronized well enough to establish a truly affirmative environment that would
encourage and support the creative potential of the whole society.

2) Limited access to adequate financing. Serbia’s limited access to finance environment

is particularly challenging for companies that could operate in the knowledge-based,
innovation-driven economy. Serbia’s financial system and available spectrum of
financing for innovative endeavors at their early stage is ranked very low when
compared to other countries and economies. Serbia’s landscape of financing products
available is the poorest in the region. For example, its banking sector represents more
than 90 percent of all financial sector assets with almost no offering of a wide array of
other financing product, including microfinance, factoring, trade finance, equipment
leasing, as well as different equity financing options.

These challenges are seen as integral elements of the overall ecosystem, and USAID is aware
that there may be other, equally important challenges in this area that must be considered and
addressed with the same level of attention. Also, while well-documented issues of brain drain
and emigration from Serbia cannot be exclusively and directly linked to an inadequate
ecosystem for innovations, some reports indicate that the absence of opportunities for start-
ups to grow and for innovative business ideas to be implemented is a significant contributing
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factor to the departure of highly skilled workers and talent. This may have long term
consequences for Serbia’s sustainable economic development and should be considered as an
important aspect when proposing solutions and improvements.

Solutions Sought and Guidance for Concepts

The ability and willingness to innovate and apply innovative solutions are seen as key drivers
of a country’s competitiveness. Serbia’s current capacity to innovate is ranked at 56 of 135 on
the 2018 Global Competitiveness Index, which indicates that Serbia requires additional
efforts to improve its innovative potential to contribute to its competitiveness. Thus, effective
and meaningful economic strategies and plans aimed at improving the competitiveness of the
economy should include the creation of and/or improvements to systems for supporting the
development of innovation-related activities and products. USAID is interested in supporting
initiatives that identify and engage stakeholders in enabling more effective coordination and
cooperation to strengthen Serbia’s innovation ecosystem as a whole. Also, USAID seeks
ideas that reflect the views and interests of a range of stakeholders including those from the
private sector/business, development organizations, NGOs, media/journalism, law and policy,
technology, advertising, education, think tanks, academia, and civil society.

The challenges elaborated above relate to improvements in the innovation ecosystem in

Serbia and are offered to be discussed with potential partners during the BAA process, with
the goal to co-design specific activities and solutions to address them. Solutions may impact a
broader range of economic sectors, as will be determined to be the most effective approach
during the co-creation process. USAID seeks to craft innovative approaches and designs to
implement an intervention or combination of interventions that can be most impactful in the
face of the constraints and challenges addressed above.

We invite organizations to engage in a collaborative exercise to define and propose the most
effective solution or solutions. This may result in one comprehensive award or a series of
awards based on the merit of the proposed solution(s). The intent is to co-create, co-design,
and collaborate on interventions that demonstrate the highest potential to dramatically
improve the application and economic growth impact of innovation driven development
solutions and approaches. This co-creation process will enable USAID and its partners to:

a. Assess and further evaluate the existing environment for innovation driven
development;
b. Consider best practices that will inform assistance strategies and priorities; and/or
c. Develop and scale innovative, adaptive and measurable efforts to increase
expansion of knowledge-based economic development efforts.

Submission Instructions

Please submit your Expression of Interest indicating the research, new approaches, or
development idea which will address the challenges and Solutions Sought sections above.
Describe your idea/approach to improve the environment and overall eco-system for
innovation driven development and highlight the value your effort would bring.
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Organizations are encouraged to consider collaborating with peer organizations that bring
differing perspectives and/or comparative advantages.

In addition to the description of the solution, applicants should describe any cost-share,
matching, or leveraging if and as they see fit. Applicants are encouraged to reference the Criteria
for reviewing each Expression of Interest.

Each Expression of Interest should clearly address one of the two challenge areas listed
above. Any applicant may submit more than one Expression of Interest, as along each
Expression of Interest addresses only one challenge.

Expression of Interest Information Formatting

Expression of Interest Information must:

1. Be in English
2. Not exceed four (4) pages and no smaller than 12-point font;
3. Be submitted electronically to arexhepi@usaid.gov and bbulatovic@usaid.gov;
4. Contain a header with the following information (included in the page count):
a. Applicant Name (or Group/Consortium, including lead applicant);
b. Contact Information;
c. Response Title;
d. BAA Addendum Name/Number;
e. Addendum Area of Focus
5. Be in unlocked pdf or docx format;
6. Include a footer with page numbers;
7. Describe your organization’s idea/approach to addressing the challenges;

USAID may invite submitters of Expression of Interest(s) to participate in one or more co-
creation workshops with other successful applicants to jointly develop basic research, applied
research, and/or research and development/pilot activities for potential funding. All applicants
are encouraged to read the full announcement closely for guidance on the stages of co-
creation. USAID will not pay for any Expression of Interest preparation costs. If a
respondent does not follow the instructions set forth herein, the respondent’s Expression of
Interest may be eliminated from further consideration. USAID will not pay for Expression
of Interest preparation costs.

Review of Submissions and Selection Criteria

Stage 1: USAID will review and select Expressions of Interest submitted in accordance with
the guidelines and criteria set forth in this Addendum and the General Criteria for
Consideration described in Section V of the BAA for Locally Led Development Innovation.
USAID reserves the right not to review any Expressions of Interest that do not meet the
guidelines above.

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Stage 2: Selected applicants will be invited to join one or more potential co-creation
workshops where USAID, partners, and selected applicants may gather to collaboratively
develop activities designed to achieve the objectives articulated in this Addendum.
Organizations may develop short concept papers following these co-creation workshops. The
concept paper (generally five to ten pages) will further detail and explain the project as
initially provided in the Expression of Interest.

The co-creation workshop(s) are expected to take place in the fall - winter of 2019. The
specific date(s), time(s), and location(s) of the co-creation workshop(s) will be determined
after the deadline for receipt of Expressions of Interest. Travel costs for participants in
these events will not be reimbursed by USAID.

Stage 3: Final concept papers produced after co-creation workshops will be submitted to
USAID’s Peer and Scientific Review Board. Approved concept papers for activities will be
further refined and potentially implemented based on a decision at that time whether to
proceed to implementation - and based on the availability of funds. A successful Concept
Paper will advance to the next stage for a “Request for Proposals or Request for
Applications.” Using its technical expertise, the Peer and Scientific Review Board will also
suggest revisions/additions to the project, and recommend potential implementing partners
and resources.

Criteria

The following criteria will be applied to all Expressions of Interest:

1. Idea/Approach: Soundness of your idea/approach, including appropriate evidence,

to fostering systems that address challenges and harness opportunities. USAID will
focus on how the applicant contributes fresh, informed, and realistic thinking, and
how the applicant uses supporting evidence and analysis to clearly demonstrate how
the proposed idea will address the challenge. Equally important are the unique
qualities that the applicant would bring to the discussion.

2. Partnership expectations and value: Strengths of the applicant as a partner,

including your ability to make a unique contribution to the critical development
challenge. USAID seeks the ability to connect relevant stakeholders as well as
connecting with experts in nontraditional and diverse sectors.

3. Diversity of perspectives and capabilities: USAID seeks to bring together a diverse

set of co-creators to enable broader thinking and innovation, which may include
organizations and entities with which USAID does not typically partner. Additionally,
USAID values experience implementing adaptive and/or iterative activities, managing
successful peer-to-peer networks, and catalyzing new ideas effectively. The selection
of individual applicants will be made with the goal of achieving this diversity.

4. Impact and goals of the activities: Describe the intended outcomes and goals of the

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concept and how they relate to USAID’s policies and objectives.

USAID is not obligated to issue financial instruments or awards as a result of this Addendum.
USAID may at its discretion decide not to proceed with any Expression of Interest.

Response Dates

Questions: Any questions regarding this BAA Addendum should be submitted only via
email to arexhepi@usaid.gov and bbulatovic@usaid.gov with “Questions” in the subject line
along with the BAA/Addendum Reference Number. Questions are due on the date and time
indicated on Page 1. Responses to questions received prior to the deadline along with any
applicable amendments to this BAA will be posted on fbo.gov and grants.gov. Late
questions may not be accepted after the deadline.

Expressions of Interest: Please submit your Expression of Interest in English only via
email to arexhepi@usaid.gov and bbulatovic@usaid.gov no later than the date and time
indicated on Page 1. Late submissions may not be considered.

Reference

Applicants may access BAA-OAA-LLDI-2019 under:

FBO.gov
https://www.fbo.gov/index?s=opportunity&mode=form&id=5e0382c23f367e3cbaa0eed778e0641
a&tab=core&_cview=0

or (identical file);

Grants.gov
https://www.grants.gov/web/grants/search-grants.html?keywords=BAA-OAA-LLDI-2019

Regards,

Carter Saunders

/s/

Regional Contracting and Agreement Officer

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