THE ‘IT’ FACTOR: Spotlight on the Danube Region’s Path to Innovative Excellence

The Danube Tech Valley covers the 14 countries located in the Danube Region as defined by the macro-regional strategy adopted by the European Council in 2010. The Danube Region thus includes nine EU Member States, three Accession Countries and two Neighbouring Countries. Over the past 20 years, the investment trend in the region has been volatile, with a sudden surge in 2004-2005 which could be associated with the entry of several Central and Eastern European countries into the EU.

This first culmination was followed by another peak between 2007 and 2009, particularly in the health sector, encouraged by the 2007 European Commission Health Strategy, and security sectors, which is possibly linked to cyberattacks by Russia and a growing interest in the cybersecurity sector. Yet, the investments in startups in the region plummeted in 2008, which is a clear consequence of The Great Recession.

The 2022 European Innovation Scoreboard reveals that the innovation performance of most countries in the Danube Valley is below average. Germany and Austria demonstrate strong innovation performance, while Czechia and Slovenia exhibit moderate performance. Bulgaria, Croatia, Hungary, Poland, Romania, and Slovakia rank as emerging innovators. These countries’ innovation activities and R&D expenditure suffer from territorial disparities that pose a significant threat to the Danube Region’s transition to a greener and smarter economy. The GLOBSEC benchmarking tool, the CEE Strategic Transformation Index also support these findings, indicating a significant innovation gap between the Danube Region and its Western and Northern European counterparts. Multiple comprehensive metrics, including education outcomes, human capital quality, number of researchers, innovation performance, and access to financial capital, consistently demonstrate below-average innovation performance in the region.

Yet, the Danube Region shows a strong potential for innovation and attractivity, thanks to its 13 thousand startups and scale-ups. The Danube Innovation Tracker maps the region’s innovation ecosystem and identifies key players, including start-ups, VC firms, and accelerators. The platform is powered by the Danube Tech Valley Initiative and serves to map the region and measure progress. Despite the existing rankings, this report will aim at identifying the ‘IT’ factor, or in other words, the success factor of the region’s startups, while providing an overview of the key trends and hidden potential of the region.

Read more in the report below.