1. Smart specialisation and the role
of clusters in EU cohesion policy

2. 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?

3. 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

4. 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

5. 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

6. 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 http://ec.europa.eu/regional_policy/so
and evaluation systems. urces/docgener/informat/2014/smart_s
pecialisation_en.pdf

7. 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)

8. 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

9. 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.

10. Future CP – key components
1) Alignment of CP with Europe 2020
2) Reinforced strategic programming
3) Thematic concentration Smart
4) Reinforcing performance specialisation
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

11. Thematic objectives to deliver Europe 2020
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

12. Link between EU2020 targets and thematic objectives
R&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 economy
Climate
change/energy 5. Climate change adaptation & risk prevention and
target management
6. Environmental protection & resource efficiency
7. Sustainable transport & removing bottlenecks in key
network infrastructures
Employment
target  8. Employment & supporting labour mobility
Poverty target  9. Social inclusion & combating poverty
Education
target
 10. Education, skills & lifelong learning
11. Institutional capacity building & efficient public
12
administrations

13. 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)

14. 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;

15. Thematic ex-ante conditionalities (1)
Thematic objectives Ex ante conditionality Criteria for fulfilment
1. 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).

16. Smart Specialisation: What's new?
Sectoral
approach/
clusters +
assets
PPP in
strategy Regional
implementa approach
tion Structural transformation
Productivity/
Innovation capacity
PPP in strategy Developing
development strengths

17. 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')

18. Clusters and smart specialisation
Old 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 clusters
High error rate in competitive markets Better success rate
Development of long-term competitive
advantage

19. 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

20. 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?

21. Steps to research and innovation strategies for smart
specialisation (RIS3)
Step 1: Analysis of regional potential for
innovation-driven differentiation (1) Analysis
Step 2: RIS 3 design and governance –
ensuring participation & ownership (6) Monitoring (2) Process
Step 3: Elaboration of an overall vision for
the future of the region
RIS 3 Strategy
Step 4: Selection of priorities for RIS3 +
definition of objectives
(5) Policy mix (3) Vision
Step 5: Definition of coherent policy mix,
roadmaps and action plan
(4) Priorities
Step 6: Integration of monitoring and
evaluation mechanisms

22. 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

23.  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)

24. 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
Patents Scientific Publications Employment
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25. http://ipts.jrc.ec.europa.eu/activities/research-and-innovation/s3platform.cfm

26. 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