The first ready-to-use JOSEFIN Service Model is going “on air” in Lithuania. Our Lithuanian colleagues, Sander van der Molen (LIC) and Audrius Zapotka (INVEGA) revealed the obstacles, challenges and the implementation of the Coaching and Financial Instrument in an interview.

1. Can you outline the main drivers for internationalisation in Lithuania?
Lithuania is a small country, which means that not only large companies but also SMEs need to go abroad for finding customers, but also for finding partners to collaborate. Other drivers for internationalisation are the geographical location of Lithuania on the crossing between West and East Europe as well as North and South Europe. A third driver is the international characteristics of some of the strong sectors in Lithuania like transportation, biotechnology and ICT.

2. Which main obstacles have you identified and what do you suggest to overcome them?
Some of the obstacles for internationalisation that JOSEFIN Innovation Loan Guarantee will try to address are the lack of knowledge about what Lithuanian SMEs have to offer and the lack of knowledge and partners that SMEs in Lithuania have about doing business abroad. Furthermore, there is a lack of strategic long term thinking within Lithuanian business. The innovation coaching services that will be offered within JOSEFIN Innovation Loan Guarantee aims at overcoming this specific problem. SMEs will be challenged to look beyond their normal horizon to identify future needs and challenges of their companies and create and implement a long-term strategy.

Some of the main obstacles in Lithuania are beyond the scope of the JOSEFIN Innovation Loan Guarantee project; these include the lack of language skills in the working languages of the European Union and the lack of trust between people and businesses that is necessary in a market economy for collaboration.

3. How have you adapted the JOSEFIN Service Model for your region?
Again, it should be noted that Lithuania is a small country, in which a specific sector consists sometimes only of a couple of companies. This means that there are no sector specialised coaches for these companies, since there is no sizeable domestic market. Instead, the Lithuanian Innovation Centre will rely on the use of their generic innovation coaches who will coach companies at a more strategic level about project planning, implementation, business strategy, business models and with a specific focus on innovation and change management.

4.What is new within the JOSEFIN compared to other loans in Lithuania?
The main value added feature of the JOSEFIN Innovation Loan Guarantee compared to other loans in Lithuania is the possibility for the SME, ambitious to grow and ambitious to go international, to get an individual coaching before and after the application for financing. This possibility of additional coaching decreases project implementation risks as well as credit risks. Thus, the JOSEFIN Innovation loan guarantee compared to other loan guarantees in Lithuania, is more attractive for the SME, as well as for the credit institutions providing financing.

Coaching before the application to loan and guarantee helps the SME to prepare the company for the internationalisation project, to find the most appropriate and optimal source of funding (mean of financing) and increases success of application for financing. Coaching after the financing helps to implement the project financed by the JOSEFIN innovation loan (and guarantee), thus giving a greater chance for SME to fulfil all financial obligations on time.

5. How have you implemented the coaching model?
Yes we have started to coach the first JOSEFIN Innovation Loan Guarantee client. We take the JOSEFIN Innovation Loan Guarantee coaching model as a ‘rule of thumb’ guideline in the process, but for a coach it is important to keep the needs of the client (the SME) in view. We therefore not only rely on the JOSEFIN Innovation Loan Guarantee coaching model, but also make use of the competence, experience and skills of the innovation coaches working at the Lithuanian Innovation Centre.

6. When and how can the SMEs use the JOSEFIN Service Model in Lithuania?
There are several ways in which SMEs can come into contact with the JOSEFIN Innovation Loan Guarantee model. Firstly, they can apply for a (guaranteed) loan at a local bank or get into contact with the guarantee institution INVEGA. Secondly, they can approach the coaching partner LIC in Lithuania for questions about innovation, internationalisation or finance. In a third way, LIC can extend the JOSEFIN Innovation Loan Guarantee as an additional service to its portfolio of innovation related coaching services to existing and new clients. In this way, new services will be added to existing services creating new value for the customers (the SMEs).

We plan to select a small number of companies for the testing of the model from our existing clients (LIC and INVEGA clients). In a follow-up step, we will think about the broader branding and marketing of the innovation coaching among Lithuanian SMEs in a broader context, both among existing clients of LIC and INVEGA and in a broader context in Lithuania.

7. Considering your “first mover” experiences, have you any recommendations for the other project partners?

It is too early to have any experience in the implementation of the model at this point. From the perspective of the organisation of the JOSEFIN Innovation Loan Guarantee instrument, it is important to have good open and direct communication between the financial and the coaching organisation responsible for JOSEFIN Innovation Loan Guarantee. For Lithuania, it is important that both organisations INVEGA and LIC have a long history and are both considered important and reliable organisations. Also the division of tasks and responsibilities is clear. All of these elements facilitate good collaboration, with a focus of making Lithuanian SMEs more competitive through internationalisation and innovation.

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