Smart specialisation and the roleof 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 regions3. a pre-condition („ex-ante conditionality‟) related to the effective use of EU funds, key principle of reformed Cohesion Policy
Smart specialisation - What?• 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
Definition/Fact SheetNational/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 countrys/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 http://ec.europa.eu/regional_policy/so and evaluation systems. urces/docgener/informat/2014/smart_s pecialisation_en.pdf
Smart specialisation - Why? 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 “The general consensus…is that the driving force behind Innovation is not just R&D. For most long-term economic growth is science, technology and companies and the majority of regions it innovation in its different forms is about building up innovation and facets” (OECD: Regions capacities first and Innovation Policy)
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 components1) Alignment of CP with Europe 20202) Reinforced strategic programming3) Thematic concentration Smart4) Reinforcing performance specialisation5) Stronger focus on results6) Simplified delivery system“To increase the effectiveness of cohesion spending, funding in future willbe targeted on a limited number of objectives…. New conditionalityprovisions will be introduced to ensure that EU funding is focussedon results and creates strong incentives for Member States to ensure theeffective delivery of Europe 2020 objectives and targets…“ „A Budget for Europe 2020’ , COM(2011) 500 final, June 2011
Thematic objectives to deliver Europe 2020ERDF 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
Link between EU2020 targets and thematic objectivesR&D target 1. Research & innovation 2. Information and communication technologies (ICT) 3. Competitiveness of Small and Medium-sized Enterprises (SMEs) 4. Shift towards a low-carbon economyClimatechange/energy 5. Climate change adaptation & risk prevention andtarget management 6. Environmental protection & resource efficiency 7. Sustainable transport & removing bottlenecks in key network infrastructuresEmploymenttarget 8. Employment & supporting labour mobility Poverty target 9. Social inclusion & combating povertyEducationtarget 10. Education, skills & lifelong learning 11. Institutional capacity building & efficient public 12 administrations
Thematic concentration/Earmarking11 investment priorities: MS/regions to concentrate EUand national resources on limited number of thematicobjectives linked to Europe 2020 to improve EU addedvalue and impact80% of SF investments for (1) research and innovation,(3) SME support and (4) energy efficiency andrenewables ( – for more developed regions, 50% for lessdeveloped 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 fulfilment1. Strengthening 1.1. Research and innovation: The – A national or regional research and research, existence of a national or regional innovation strategy for smart technological research and innovation strategy for specialisation is in place that: development and smart specialisation in line with the – is based on a SWOT analysis to innovation (R&D National Reform Program, to leverage concentrate resources on a limited set of target) private research and innovation research and innovation priorities; (referred to in expenditure, which complies with the – outlines measures to stimulate private Article 9(1) ) features of well-performing national RTD investment; or regional research and innovation – contains a monitoring and review system. systems. – 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: Whats new? Sectoral approach/ clusters + assets PPP in strategy Regional implementa approach tion Structural transformation Productivity/ Innovation capacity PPP in strategy Developing development strengths
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 specialisationOld approach: New approach:• Identifying growth or lead markets • Identifying existing strengths, incl. (Bio, nano, eco, etc.) cluster positions• Concentrating public support/aid on • Concentrating public support/aid on these sectors higher value added/more innovation within existing clusters and at the interface of related clustersHigh error rate in competitive markets Better success rate Development of long-term competitive advantage
Lessons from regional innovation strategies 1993-2000 “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
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?
Steps to research and innovation strategies for smart specialisation (RIS3)Step 1: Analysis of regional potential forinnovation-driven differentiation (1) AnalysisStep 2: RIS 3 design and governance –ensuring participation & ownership (6) Monitoring (2) ProcessStep 3: Elaboration of an overall vision forthe future of the region RIS 3 StrategyStep 4: Selection of priorities for RIS3 +definition of objectives (5) Policy mix (3) VisionStep 5: Definition of coherent policy mix,roadmaps and action plan (4) PrioritiesStep 6: Integration of monitoring andevaluation mechanisms
Where to get help + inspiration Guides: Incubators Connecting Universities Broadband … more to come: Social Innovation Clusters Green Growth Data base of experts SMEs Data material … Good practice examples Training for policy-makers Peer-reviews Participation in conferences 22
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 chainsOECD (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 identifyinggood practices in policy development, methodologies and selection criteria for designing andassessing smart specialisation strategies Patents Scientific Publications Employment A 1.6 Z B 1.4 1.2 1 R C 0.8 0.6 0.4 0.2 1998-2002 P 0 E 2003-2006 2007-2010 N G M H I
Thank you“We know what it takes to compete for the jobs andindustries of our time. We need to out-innovate, out-educate, and out-build the rest of the world. Thats how ourpeople will prosper. Thats how well win the future.”US President Obama, State of the Union Address 2011