Smart specialisation and the role

of clusters in EU cohesion policy

What is smart specialiation?

Why do we need it?

Which role for smart specialisation strategies in

cohesion policy?

What is the role of clusters in smart specialisation?

What are the challenges ahead?

Origins of concept • Knowledge for Growth group (2006): research on

transatlantic productivity gap

• Not only ICT at root of discrepancy but Europe to invest in

upgrading local supply chains, redesigning local labour-

training systems, promoting of university-industry linkages,

adopting, disseminating and adapting GPTS/KETS.

• Smart specialisation is largely about the policy process to

select and prioritize fields or areas where a cluster of

activities should be developed (= Building strategic capacity

to make informed choices)

• An approach to policy that considers whether those activities

already strong or showing promise for a region can benefit

from R&D and innovation

• In the original smart specialisation logic it is the

entrepreneurs who should take the lead and discover the

right domains of future specialisations

Smart specialisation - What?

1. one of the conditions for well-performing national and

regional research and innovation systems („Innovation

Union’ communication/self assessment tool)

2. a key element of the reformed cohesion policy 2014-

2020 for more effective and jobs- and growth-

enhancing ERDF investments in the regions

3. a pre-condition („ex-ante conditionality‟) related to the

effective use of EU funds, key principle of reformed

Cohesion Policy

• Defines regional development strategies on basis of existing

strength and capabilities

• Portofolio of economic activities (cluster)

• Main competitive advantages + main opportunities

• Quality of the business environment •

Systematic development of activities with high value added +

innovation-led diversification

• Within existing clusters

• In adjacent clusters

Mobilisation and entrepreneurial discovery

• EU, national, regional, private – synergies policies/programmes

• Strong process element: 'Entrepreneurial discovery' + stakeholder

consultation

Smart specialisation - What?

Definition/Fact Sheet National/regional research and innovation strategies

for smart specialisation are integrated, place-based economic transformation agendas that:

1) Focus policy support and investments on key national/regional priorities, challenges and needs for knowledge-based development;

2) Build on each country's/region’s strengths, competitive advantages and potential for excellence;

3) Support technological as well as practice-based innovation and aim to stimulate private sector investment;

4) Get stakeholders fully involved and encourage innovation and experimentation;

5) Are evidence-based and include sound monitoring and evaluation systems.

http://ec.europa.eu/regional_policy/sources/docgener/informat/2014/smart_specialisation_en.pdf

“The general consensus…is

that the driving force behind

long-term economic growth is

science, technology and

innovation in its different forms

and facets” (OECD: Regions

and Innovation Policy)

Less than 10 regions in the EU

(total: 271) account for nearly 30%

of EU expenditure on R&D

One fifth of economic growth emerges

from these dominant knowledge hub

regions

Improving innovation capacity outside

global hubs, beyond technological R&D

support is therefore vital

Innovation is not just R&D. For most

companies and the majority of regions it

is about building up innovation

capacities first

Smart specialisation - Why?

Smart specialisation - Why?

Search for more efficient + effective regional development policies, avoiding overlap and imitation

Setting innovation as priority for all regions (Europe 2020) and improving innovation (strategy) process

Better use of scarce public resources, aiming for synergies between EU, national/regional and private funds (PPP)

Driving economic transformation, diversification and differentiation, focusing on value chains and better profiling regions

New academic insights and concepts in the fields of growth, competitiveness and clusters

CP as catalyst – SF reform Present CP has much added value but impact is threatened by

dispersion of funds, priorities where regions lack relative strength,

inward looking strategies, little funding to transnational pooling of

resources/expertise, etc. (cf. Barca report, CP evaluations,

Innovation Union Communication, EU Budget Review, 5th Cohesion

Report)

Cohesion policy is set to be one of the key delivery mechanisms of

Europe 2020. Accordingly its focus needs to be on knowledge-based

investments and efficient national/regional innovation systems.

Crisis: more efficient spending necessary, more concentration on

competitiveness factors and building competitive advantage in global

value chains, growth-enhancing investments not only budget cuts.

Future CP – key components

1) Alignment of CP with Europe 2020

2) Reinforced strategic programming

3) Thematic concentration

4) Reinforcing performance

5) Stronger focus on results

6) Simplified delivery system

“To increase the effectiveness of cohesion spending, funding in future will be targeted on a limited number of objectives…. New conditionality provisions will be introduced to ensure that EU funding is focussed on results and creates strong incentives for Member States to ensure the effective delivery of Europe 2020 objectives and targets…“ „A Budget for Europe 2020’ , COM(2011) 500 final, June 2011

Smart

specialisation

ERDF ESF CF Thematic objective

1. Strengthening research, technological development and innovation

2. Enhancing access to, and use and quality of, information and

communication technologies

3. Enhancing the competitiveness of small and medium-sized enterprises,

the agricultural sector (for the EAFRD) and the fisheries and

aquaculture sector (for the EMFF)

4. Supporting the shift towards a low-carbon economy in all sectors

5. Promoting climate change adaptation, risk prevention and

management

6. Protecting the environment and promoting resource efficiency

7. Promoting sustainable transport and removing bottlenecks in key

network infrastructures

8. Promoting employment and supporting labour mobility

9. Promoting social inclusion and combating poverty

10. Investing in education, skills and lifelong learning

11. Enhancing institutional capacity and an efficient public

administration

Thematic objectives to deliver Europe 2020

Link between EU2020 targets and thematic objectives

1. Research & innovation

2. Information and communication technologies (ICT) 3. Competitiveness of Small and Medium-sized

Enterprises (SMEs) 4. Shift towards a low-carbon economy 5. Climate change adaptation & risk prevention and

management 6. Environmental protection & resource efficiency 7. Sustainable transport & removing bottlenecks in key

network infrastructures

8. Employment & supporting labour mobility

9. Social inclusion & combating poverty

10. Education, skills & lifelong learning

11. Institutional capacity building & efficient public administrations

R&D target

Climate change/energy target

Employment target

Education target

Poverty target

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Thematic concentration/Earmarking

11 investment priorities: MS/regions to concentrate EU

and national resources on limited number of thematic

objectives linked to Europe 2020 to improve EU added

value and impact

80% of SF investments for (1) research and innovation,

(3) SME support and (4) energy efficiency and

renewables ( – for more developed regions, 50% for less

developed regions)

ERDF Investment priorities 2014-20 (Art. 5)

1). Strengthening research, technological development and innovation:

enhancing research and innovation infrastructure (R&I) and capacities to develop R&I excellence and promoting centres of competence, in particular those of European interest;

promoting business R&I investment, product and service development, technology transfer, social innovation and public service applications, demand stimulation, networking, clusters and open innovation in SMEs through smart specialisation;

supporting technological and applied research, pilot lines, early product validation actions, and advanced manufacturing capabilities and first production in Key Enabling Technologies and diffusion of general purpose technologies;

Thematic ex-ante conditionalities (1)

Thematic objectives Ex ante conditionality Criteria for fulfilment

1. Strengthening

research,

technological

development and

innovation (R&D

target)

(referred to in

Article 9(1) )

1.1. Research and innovation: The

existence of a national or regional

research and innovation strategy for

smart specialisation in line with the

National Reform Program, to leverage

private research and innovation

expenditure, which complies with the

features of well-performing national

or regional research and innovation

systems.

– A national or regional research and

innovation strategy for smart

specialisation is in place that:

– is based on a SWOT analysis to

concentrate resources on a limited set of

research and innovation priorities;

– outlines measures to stimulate private

RTD investment;

– contains a monitoring and review system.

– A Member State has adopted a framework

outlining available budgetary resources

for research and innovation;

– A Member State has adopted a multi-

annual plan for budgeting and

prioritization of investments linked to EU

priorities (European Strategy Forum on

Research Infrastructures -ESFRI).

Smart Specialisation: What's new? Sectoral

approach/ clusters +

assets

Regional approach

Developing strengths

PPP in strategy development

PPP in strategy

implementation Structural transformation

Productivity/

Innovation capacity

Cluster and smart specialisation

• Clusters are very much at the heart of smart specialisation.

• Smart specialisation = comprehensive innovation and

competitiveness strategy

• Clusters = important process instrument for RIS3

• Clusters help focus strategy on successful sectors and

emerging opportunities, business environment + cooperation

• Clusters facilitate structural transformation and upgrading

• Clusters are a good platform for mobilising entrepreneurs and

innovation actors for strategy development and implementation

('entrepreneurial discovery')

Clusters and smart specialisation

New approach:

• Identifying existing strengths, incl.

cluster positions

• Concentrating public support/aid on

higher value added/more innovation

within existing clusters and at the

interface of related clusters

Better success rate

Development of long-term competitive

advantage

Old approach:

• Identifying growth or lead markets

(Bio, nano, eco, etc.)

• Concentrating public support/aid on

these sectors

High error rate in competitive markets

“Inward looking” (parochial) without taking into account the global economy and ERA

Driven by external consultants: ownership by regional stakeholders?

Excessive focus on "technological" supply and R&D emphasis

A lack of understanding of the regional innovation system as an interaction of interdependent players, policies and institutions

"Study-oriented" approach vs. "applied-oriented" approach: credibility for businessmen?

National/Regional governments might feel threatened by:

a transparent and inclusive bottom-up process

analysis showing regional R&TD+i supply does not correspond to business demand;

new ideas, which cut across traditional power boundaries between Ministries;

project ideas which are not already in the "drawer" of a given Ministry

Lessons from regional innovation strategies 1993-2000

Challenges ahead

• Tough choices: how to eliminate topics and sectors from focus,

even if there are vested interests?

• How to be honest with oneself, i.e. eliminate wishful thinking

and acknowledge that a region does not have critical

mass/potential in a specific field?

• How to build alliances across regional boundaries to pool

forces while ensuring fair return?

• How to build a shared view and cooperation across political

and departmental boundaries?

• How to balance the need for an innovation and business

friendly environment for all with a thematic focus?

Step 1: Analysis of regional potential for

innovation-driven differentiation

Step 2: RIS 3 design and governance –

ensuring participation & ownership

Step 3: Elaboration of an overall vision for

the future of the region

Step 4: Selection of priorities for RIS3 +

definition of objectives

Step 5: Definition of coherent policy mix,

roadmaps and action plan

Step 6: Integration of monitoring and

evaluation mechanisms

Steps to research and innovation strategies for smart

specialisation (RIS3)

(6) Monitoring

(5) Policy mix

(4) Priorities

(3) Vision

(2) Process

(1) Analysis

RIS 3 Strategy

Where to get help + inspiration

Guides:

Incubators

Connecting Universities

Broadband

… more to come:

Social Innovation

Clusters

Green Growth

SMEs

…

Data base of experts

Data material

Good practice examples

Training for policy-makers

Peer-reviews

Participation in conferences

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Designed to assist regions and Member States in developing S3 strategies

Managed by a team established at JRC-IPTS in Seville

Monitored by a Steering Team incl. DG REGIO, RTD, ENTR, EAC, INFSO and SANCO

Input from a Mirror Group of European high-level experts and network representatives

First product will be a methodological and practical guide on “Innovation Strategies for Smart Specialisation” (end 2011)

EU /OECD project: Designing smart specialisation

strategies for cluster development in global value chains

OECD (TIP group) and (Australia, AT – Lower and Upper Austria, BE -Flanders, FI -Lahti, DE -

Brandenburg, NL - Brainport, PL -Makopolska, ES – Andalucia, Basque Country and Murcia, UK –

West Midlands, Turkey, South Korea, CZ, EE, SW - Västra and South Africa): aims at identifying

good practices in policy development, methodologies and selection criteria for designing and

assessing smart specialisation strategies

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1998-2002

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Patents Scientific Publications Employment

http://ipts.jrc.ec.europa.eu/activities/research-and-innovation/s3platform.cfm

Thank you

“We know what it takes to compete for the jobs and

industries of our time. We need to out-innovate, out-

educate, and out-build the rest of the world. That's how our

people will prosper. That's how we'll win the future.”

US President Obama, State of the Union Address 2011