such as corporate governance, the information economy and the challenges of an ageing population. The Organisation provides a setting where governments can compare policy experiences,
AND POLICY ENVIRONMENT...23 Summary...30 DEVELOPMENT OF SPECIALISATION STRATEGIES: THE ROLE OF REGIONAL...PROFILNG AND INDICATORS...
grasping the opportunities for smart specialisation...58 Lessons learned and conclusions for policy...58 Notes...
grasping the opportunities for smart specialisation...63 Lessons learned and conclusions for policy from the Nfh case...
grasping the opportunities for smart specialisation...68 Lessons earned and conclusions for policy...69 Notes...
grasping the opportunities for smart specialisation...75 Lessons learned and conclusions for policy...77 Notes...
grasping the opportunities for smart specialisation...80 Lessons learned and conclusions for policy...81 ANDALUSIA, SPAIN:
grasping the opportunities for smart specialisation...84 Lessons learned and conclusions for policy...84 EAST MARMARA, TURKEY:
grasping the opportunities for smart specialisation...88 Lessons learned and conclusions for policy...89 Notes...
100 Future development grasping the opportunities for smart specialisation...102 Lessons learned and conclusions for policy...
106 Future development grasping the opportunities for smart specialisation...107 Lessons learned and conclusions for policy...
SEARCHING FOR A SMART SPECIALISATION, UNDER THE CONDITIONS OF A TRANSITIONAL ECONOMY...113 Regional, national and international policies that have been decisive for prioritisation of domains...
113 Key policy instruments and investments...114 Future development for smart specialisation...115 Lessons learned and conclusions for policy...
A KNOWLEDGE BASED ECONOMY...118 Regional, national and international policies that have been decisive for prioritisation of domains...
129 Future development grasping the opportunities for smart specialisation...130 Ambitions, strategic plans and tools and catalysts in the innovation ecosystem...
Stakeholders'involvement at different levels...132 Figure 3. 1. Activity Indices in 12 major fields...
34 Box 1. 8. Empowerment of stakeholders in the designing of the smart specialisation strategies...
the results of an expert advisory group to the EU. Tasked with finding an alternative to public policies that were seen to spread public investments in knowledge and innovation research, education, public support to business R&d,
regional governments should encourage investment in domains that would complement the country's other productive assets to create future domestic capability and interregional comparative advantage.
A number of countries, within OECD or not, are now taking interest in Smart Specialisation as one way to lead their economies out of the crisis by leveraging regional dynamism in innovation led/knowledge-intensive economic development.
Although initially relatively simple as a concept the concentration of public resources in knowledge investments on particular activities in order to strengthen comparative advantage in existing
i) the underlying role of scientific, technological and economic specialisation in the development of comparative advantage and more broadly in driving economic growth;
private stakeholders and entrepreneurs in the process of translating specialisation strategies into economic and social outcomes. In this sense, smart specialisation is a regional policy framework for innovation driven growth.
Incentives and instruments for disclosing passively or actively this information (e g. through stakeholder consultations public-private partnerships, IPRS) will be key.
the implicit idea of policy-induced specialisation in innovation have raised concerns amongst economists and others inside and outside the EU policy circles (Pontikakis, D. et al. 2009).
Competition effects: Another important concern is the prescription for a policy-induced division of labour between leading
A policy that targets public R&d towards an area of existing strength, such as agriculture, may deepen interregional disparities though the reduction of competition
Indeed, some duplication is a side-effect of competition and may be beneficial from a societal point of view.
Another concern that arises from the concentration of R&d investments is that of the diminishing returns to R&d.
and policy advocates point out that it is oriented a vertically policy framework for priority setting at the regional level that combines bottom-up and top down process in priority setting for public investments in knowledge.
They also point out that smart specialisation depends on good general framework policies (e g. competition, trade policy, labour market policy and education and skills) and horizontal innovation policies (e g.
Concentration of public investments in R&d and knowledge on particular activities is crucial for regions/countries that are not leaders in any of the major science or technology domains.
Past policies tended to spread knowledge investment (e g. high education and vocational training, public and private R&d) too thinly, not making much of an impact in any one area.
However, concentration in the smart specialisation context is about focusing knowledge investments on‘activities'those‘business functions'INNOVATION-DRIVEN GROWTH IN REGIONS:
) These‘activities'(e g. goods or services) may be undertaken by a single firm or divided among different (supplier) firms
Smart specialisation relies on an entrepreneurial process of discovery that can reveal domains of economic activity where a country
The specific properties of General Purpose Technologies (GPTS) underlie the logic of smart specialisation 2. Invention of a GPT extends the frontier of invention possibilities for the whole economy,
Structural change, not just the accumulation of capital, is a driver of economic growth. As such smart specialisation aims to accelerate structural change by encouraging the transformation of economic activities from a structural perspective.
It may in some cases mean modernising existing industries or enabling lagging sectors to improve their competitiveness through the adoption of ICTS,
and economic crisis, including the current euro debt crisis, the concept of smart specialisation has found an echo in the OECD discussions on New Industrial Policy, New Sources of Growth and New Approaches to Economic Challenges.
Indeed, the OECD has exhorted countries to go structural to make economies more competitive; to go social to address the increased inequality and lack of jobs;
Smart specialisation is one several frameworks that accommodates many of these goals by focusing on promoting structural change in the economy through investments in knowledge-based assets and better governance in STI policy making.
similar strategies are based on targeting of public investments and top-down and bottom up initiatives are visible in regions and states as varied as in Australia, Michigan or California in the United states as well as Korea and Singapore.
Strategies for concentrating investments in knowledge-based assets on particular activities through an entrepreneurial-led process have also found fertile ground at the OECD as the result of a confluence of different developments.
and low demand and high public deficits. And innovation is seen thus a key to restart growth and investment.
General purpose technologies (GPTS) in particular are seen as way to revitalise existing industries and to stimulate innovation downstream including innovation in services (e g.
ICT services for public health. On the other hand, globalisation and advances in ICT allow firms to fragment their production in the global value chain.
Countries tend to specialize in specific‘business functions'or‘activities'rather than specific industries (e g. assembly operations for China or business services for India.
and has forced also OECD governments to look more closely at where economic value is created along global value chains,
Place-based growth is seen as particularly important for innovation given the weight of agglomeration economies (OECD 2011.
The smart specialisation approach calls for an‘entrepreneurial selection'of market opportunities (e g. to minimise failures
In practice, this means the promotion of entrepreneurship across the board. While successful companies will constitute the new specialisation of the country/region INNOVATION-DRIVEN GROWTH IN REGIONS:
In addition to quantitative indicators, qualitative data such as SWOT analyses, surveys, workshops and interviews with regional stakeholders are also important in the priority setting and discovery process.
Three types of strategic capacities are needed to grasp future opportunities: the capacity to identify local strengths;
Additional governance challenges including building channels for two-way communication and having skilled personnel in agencies and ministry (e g. in Estonia,
concept and policy agenda for science, technology and innovation against the background of important changes in the structure of OECD economies.
systems but also of business R&d, the rise of services and of new global players in STI such as China and India) and shorter-term developments such as fiscal austerity in OECD countries
an EU expert group tasked with finding an alternative to public policies that spread public investments in knowledge and innovation research, education, public support to business R&d,
and others is that governments should focus their knowledge investments in activities not in sectors in per se that reflect areas where a region
of which EUR 65 billion are spent for innovation (the total investment for innovation in this period from Cohesion Policy being EUR 86 billion considering also the European Social Fund).
and innovation framework for regional economies that aims to illustrate how public policies, framework conditions,
but especially R&d and innovation investment policies can influence economic, scientific and technological specialisation of a region and consequently its productivity, competitiveness and economic growth path.
and thus a possible way to help advanced OECD economies as well as emerging economies-restart economic growth by leveraging innovation led/knowledge-based investments in regions.
and competition failures but also opportunities to shift the direction of innovation towards global challenges); and to help build the policy tools for smart specialisation
and are grounded in the classical economic theories of economic growth (e g. the theory of the division of labour by Adam smith) and notably trade specialisation.
Modern recent strands of economic thought from evolutionary economics to the economics of agglomeration are also visible in the smart specialisation concept, notably the issue of increasing returns to knowledge,
and neoclassical spatial economics (Krugman and Venables). Smart specialisation thus is very much an economic framework focussed on regions that aims to illustrate for the purpose of policy making how public policies, framework conditions,
but especially R&d and innovation investment policies can influence economic, scientific and technological specialisation within a regional policy framework and through this mechanism, productivity, competitiveness and economic growth.
But entrepreneurship in the knowledge economy recognises that value added is generated also outside sole ownership, in spillovers, in networks of complementarity and comparative advantage.
and national governments for allocating resources in an environment of structural change and uncertainty, risk, and information asymmetries.
Activities, not sectors per se are the level for setting priority setting for knowledge investments. While sectors still matter, the issue is not to target sectors but rather activities.
clear benchmarks and criteria for success and failure are needed. Smart specialisation policies need to have measurable goals,
outline measures to stimulate private RTD investment; build on a region's capabilities, competences, competitive advantages and potential for excellence in a global perspective;
foster stakeholder engagement and encourage governance innovation and experimentation; are based evidence and include sound monitoring and evaluation systems.
ICTS or nanotechnology) with the industrial resources and capacities in the region (e g. local knowledge) that can lead to new economic opportunities.
The advances in ICT, the increase in human capital in public administrations and closer public-private interactions between industry and government at various stages and levels of INNOVATION-DRIVEN GROWTH IN REGIONS:
Governments should create the necessary conditions, environment, dynamics and structures through which entrepreneurs and government learn about costs
and opportunities and engage in strategic coordination (Rodrik D.,2004). To illustrate, this could mean justifying public support for exploring the opportunities from applying GPT technologies to existing industries (e g. via demonstration projects, training.
Another characteristic of the smart specialisation approach is that it aims to deal with one of the weaknesses of government intervention in industrial and innovation policy,
that is the diffused agency problem since it focuses on entrepreneurs and co-ordination of policy over a broad range of stakeholders (regions,
proposing different business opportunities related to education, tourism, performance, guitar building, museum, recording, research or publishing.
which has brought to a collapse of the traditional business models, highly subsidised in the past: tourism, construction and industrial production.
where public investment is located only where a consolidated project is already in place, following strictly a low cost philosophy.
where different private and business stakeholders assume direct responsibility on specific sub-projects and a platform provides full information of the development of the different initiatives.
and the potential and actual market and job opportunities created, while the role of the public institutions is limited to provide support
and knowledge-based investments, networking activities and training, is an increase in knowledge spillovers among actors in clusters and thus the generation of a collective pool of knowledge that results in higher productivity, more innovation and an increase in the competitiveness of firms.
) Key to this goal is the emphasis of cluster development around key enabling technologies (e g. information and communication technologies ICTS, biotechnology, nanotechnology.
or accelerate the transformation and modernisation of economic activities in clusters. There are also important synergies and complementarities between smart specialisation and cluster policy (e g. promotion of cross-sectoral collaboration and entrepreneurial processes and place-based interactions4 between actors and institutions)
or the demand side of the innovation activities from idea generation to market uptake. However, the concept seems to rely on the existence of some preconditions
) Summary The idea or concept of smart specialisation is based on long standing economic theories and empirical evidence and mobilises well tested policy instruments.
As a regional and place-based growth policy framework it aims to improve the allocation of public investment in R&d and innovation related investments,
in order to stimulate competitiveness, productivity and economic growth through entrepreneurial activities. Smart specialisation strategies can be viewed as a mix of modern industrial policy with innovation policies that emphasise a bottom-up approach (the entrepreneurial discovery),
but also various stakeholders, including business. At the same time they reflect the urgency of making tough choices in times of difficult transitions under severe budgetary constraints.
THE ROLE OF SMART SPECIALISATION OECD 2013 23 SMART SPECIALISATION IN THE CURRENT ECONOMIC CONTEXT AND POLICY ENVIRONMENT Although in many ways, the European union is a laboratory for the elaboration of smart specialisation strategies,
OECD countries face difficult policy choices due to weak economic situation characterised by low economic demand
In most OECD countries, the response to the crisis and to the slowdown in productivity growth has focused on a combination of structural reform policies-labour reform, competition policy, tax policy,
etc. and efforts to preserve investments in knowledge based assets such as education and innovation especially in areas from where new drivers of growth may arise such as in green technologies and health.
Preserving the margin for public investment in knowledge-based capital so that it contributes to productivity growth will be increasingly important not only in the medium term but also in the longer term in light of challenges such as demographic change and competition from emerging economies.
The second trend which has created a fertile ground for smart specialisation, is the weakening of the national innovation systems as the unit of analysis for policy making in the face of regional innovation systems and the rise of global innovation networks.
The economics of R&d location (indivisibility, strong spatial clustering of innovation activities) makes regional responses to R&d globalisation naturally appropriate.
even if national policies such as attractiveness policies can influence the investment and innovation strategies of global firms.
Governments should ensure mechanisms through which they exchange information with The current economic crisis and more recently the euro debt crisis, has increased pressure on OECD governments to tackle longstanding structural problems in their economies.
Smart specialisation, both as an economic concept and a policy framework provides a novel avenue to pursue the dual objectives of fiscal constraint and investment in longer-term growth potential in a context of rapid
technological change and globalisation. General purpose technologies play an essential role in strengthening existing specialisations and revealing new economic opportunities in high-tech sectors
but also in traditional industries. INNOVATION-DRIVEN GROWTH IN REGIONS: THE ROLE OF SMART SPECIALISATION 24 OECD 2013 entrepreneurs in order to learn about costs
and opportunities and engage in strategic coordination (Foray, 2012; Hausmann and Rodrick 2003) and; 2) Co-ordination externalities:
private activity and‘discovery'opportunities may be restricted due to the high fixed costs and large-scale investments required by some projects,
and in particular by the spillovers that are specific to knowledge driven investments. Policy intervention is required to facilitate the coordination of investments and decisions of different entrepreneurs.
A second set of rationales for smart specialisation concern: 1) incentive problems that lead to underinvestment in the discovery process;
2) The discovery of pertinent specialisation domains may have a high social value (development of the region's economy),
but the entrepreneur who makes this initial discovery will only be able to capture a very limited part of this social value
However, the coordination of investment decisions of different entrepreneurs and the coordination among many economic agents throughout the value chain are daunting tasks for policy makers.
Public policies can assist further this process by providing key infrastructures (e g. information about emerging technological and commercial opportunities and constraints, product and process safety standards for domestic and export markets,
Internationalisation support services INNOVATION-DRIVEN GROWTH IN REGIONS: THE ROLE OF SMART SPECIALISATION OECD 2013 25 Coordination externalities Low‘self-discovery'activity due to the high fixed costs and large-scale investments required by some projects.
Prevention of emerging trends for regional economic growth. Coordination of investments and decisions of different entrepreneurs.
Coordination among many economic agents throughout the value chain suppliers, producers, users, specialised services, banks, basic research and training institutions.
Support to technologies which have scale or agglomeration economies. Cluster policies Technology banks Public-private partnerships Innovation-oriented procurement Sectoral platforms SME support organisations Demonstration projects, technology extension services Source:
OECD based on Rodrik Smart specialisation: Beyond framework conditions Framework conditions are essential for establishing a successful link between innovation and growth (Hansen and Birkinshaw, 2007;
Asheim, 2009; Navarro M. et al. 2012). ) Thus, horizontal and targeted policies to improve those drivers
but also opportunities and goals of a society (e g. meeting social and global challenges like ageing and climate change).
or systemic failure but they also intervene with specific goals especially in markets for goods that are public or semipublic such as national security, health and the environment.
it has an important role in own right by creating markets (low carbon) and as a procurer of government goods and services (e g. infrastructure, health services).(
carbon economy was the environmental challenge of reducing CO2 emissions amidst an economic downturn. The main objective of the smart specialisation strategy is to secure the environmental benefits while regenerating competitive advantage, mainly by:
and opportunities opening up within the Baltic sea Region and Nordic countries. Source: OECD-TIP Case studies on Smart Specialisation INNOVATION-DRIVEN GROWTH IN REGIONS:
it may offer a pro-active framework for governments to anticipate the possible redistributional effects of policy or inactions in an increasingly globalised economy.
Over the past two decades, globalisation has increased specialisation by creating opportunities for outsourcing and the development of global value chains.
Some OECD countries have reduced specialisation in sectors such as steel and shipbuilding and increased specialisation in fast growing and high value added areas such information technology services.
smart specialisation arguably offers an opportunity to foster a dynamic economic process that accelerates structural change
and comparative advantage Classical economic theory tells us that regions and countries will specialise in certain economic activities according to their factor endowments (land,
capital, human resources. Trade theory as elaborated by 19th century economist David Ricardo and expanded in the 20th century by Hekscher and Ohlin also tells us that countries tend to specialise in the production of goods where they have a comparative advantage.
Recent economic theories touching on specialisation and trade (e g new trade theory) tell us that other factors play a role in specialisation,
often connected with economies of scale and locational externalities. Indeed, the factors that lead to comparative advantage are dynamic
and change over time (e g. human capital)( e g. OECD, 2011; Redding, 2002. World prices of natural resources (e g. energy) and input factors as well as technology or the discovery of new factor endowments can change comparative advantages.
but in specific functions or activities in the value chain (e g. assembly operations for China or business services for India).
The quality of institutions such as government institutions (e g. rule of law, competition, security), social institutions (labour-employer relations) also affect factor endowments.
Broad policies such as investment in education and infrastructure, social policies and regulations in labour and product markets can play a role in shaping specialisation patterns by affecting comparative advantages,
that old the complementary assets necessary for specialise in activities characterised by increasing returns on knowledge investment (e g. automobile suppliers).
Demand factors. It has been suggested that an expansion of an economy'scientific and technological capacity will not endow it the needed productive dynamism
unless there is an adequate demand for innovation by the business sector (Rodrik D.,2004). Furthermore, demand factors such as the level of human capital
and income per capita of a country's trading partner create specific patterns of taste and,
therefore, affect demand of goods (Linder, 1961). INNOVATION-DRIVEN GROWTH IN REGIONS: THE ROLE OF SMART SPECIALISATION OECD 2013 27 Economies of scale and product life cycles.
Specialisation can also create or help to take advantage of economies of scale. Product life cycles also affect specialisation (i e. from novel to mature.
Imperfect competition, product market and labour market conditions can influence the degree of market integration. Industrial policies (e g. taxes and subsidies) can also play a role in shaping the production structure, for good or bad.
It is important to recall that in a global economy, changes in the factor endowments and in the specialisation patterns for trading partners will also have an impact on own-country specialisation.
Moreover, changes in policy settings in countries with more rapidly changing institutions (e g. emerging economies) may have disproportionally larger effects on relative factor demands
Thus, the key question for regions is how to focus their knowledge investments to take advantage of these technologies.
Catching up regions may want to focus on policy instruments that increase the absorptive capacity for these technologies such as providing consultancy services to SME to facilitate the adoption of specific technologies;
In the region of Malopolska, Poland the emergence of fast-growing companies and clusters in industries like information and communication technologies and telecommunications has been supported by the changes of the profiles of regional universities.
and gets access to technologies of large multinational enterprises. In many cases, the large enterprises are interested in buying
or licensing the technologies that are developed further by the SMES. INNOVATION-DRIVEN GROWTH IN REGIONS:
Regions are recognised increasingly as a relevant level of innovation policies given the weight of agglomeration economies (e g. the benefits that firms obtain
The survey results show that the prioritisation of public investments in R&d and innovation is more intense at regional than at national level.
In many EU countries, policies related to knowledge investments from education, research and innovation and industrial/sectoral policies are spread across many fields of intervention with a lack of critical mass;
Enterprise Territorial Maximise value and economic returns. Improve the social being (linking economic, social and environmental objectives) Differentiation of the product, resources and capacities within the enterprise.
Differentiation of the activities/assets/services offered by the region (e g. to attract firms or foreign investments) Different processes,
but strong commitment of all stakeholders. Multiply participation since none of the participants have authority to commit others.
The existing industrial commons (transition) The application of a GPT in an existing sector (modernisation) New synergies between existing economic activities with new or emerging activities (e g. new line of productive activity)( diversification
) An entirely new domain (radical formation) Source: OECD (2012) based on Foray (2009; Navarro M. et al, 2012 and OECD TIP case-studies on smart specialisation.
From this perspective, smart specialisation strategies offer an opportunity for economic transformation of regions based on strategies that link actions to objectives in order to:
and conditions offered by the region (e g. to attract firms and/or foreign investments). Link economic goals with societal and environmental challenges (e g. the transition of the automotive industry to low carbon in the United kingdom.
Ensure the commitment and involvement of all stakeholders regional, national or supranational in the designing of the strategy and consecution of its objectives.
THE ROLE OF SMART SPECIALISATION 30 OECD 2013 Summary The current economic crisis and more recently the euro debt crisis, has increased pressure on OECD governments to tackle longstanding structural problems in their economies.
But restarting growth has increased also attention in countries about the need to preserve the margin for public investment in knowledge-based capital,
Smart specialisation, both as an economic concept and a policy framework provides a novel avenue to pursue the dual objectives of fiscal constraint and investment in longer-term growth potential in a context of rapid
General purpose technologies play a particularly essential role in strengthening existing specialisations and revealing new economic opportunities in high tech sectors but also in traditional industries.
and well positioned to mobilise other stakeholders and resources and to set the strategic framework for further actions.
and the present, being not able to grasp emerging opportunities for the future. The use of foresights exercises and diagnostic tools can be particularly useful to identify these emerging‘activities'and new synergies and complementarities.
and their respectful strategies in a broader context but also enhance communication between relevant actors on the basis of a comprehensive language INNOVATION-DRIVEN GROWTH IN REGIONS:
and prove they can mobilise the relevant stakeholders that have the potential to provide value added.
These structures are necessary to ensure the‘open invitation'flows between all stakeholders and empowering as well as accelerating the learning process.
and other stakeholders contribute to identify existing capabilities (e g. research capabilities) but also barriers (e g. regulatory constrains
ICT companies have a very strong association of enterprises Estonian Association of Information technology and Telecommunications,
reliable services and integrated solutions to various industrial sectors and countries based on the complementary experiences existing in the Estonian ICT sector as a whole.
This includes the creation of several world class e-and m-services for both public and private sector (the ID-card applications, m-parking solutions, etc.
In Flanders (Belgium) in the case of FISCH (Sustainable Chemistry) the employers federation Essenscia Flanders developed a business plan for the FISCH initiative,
involved the stakeholders from the wide business community and built the‘light structure'that was needed to raise funding from the Flemish government.
as a potential market opportunity. Utilising their existing know-how and competences these metal-mechanic companies engaged in intensive dialogue with the regional government,
the national government gets engaged in intensive consultation with regional stakeholders, in order to detect emerging opportunities
but also bottlenecks and threats to push these opportunities further. Source: OECD-TIP case-studies on smart specialisation The universities dealing with economics, public policy and administration,
and specific policy areas (e g. industry, health, agriculture, environment and culture) can play a crucial role during the process of designing the innovation strategies9 (EC-IPTS (2011).
As companies are continuously redefining their strategies, regional governments and key stakeholders should be ready to adjust their responses rapidly to the changing conditions (e g. strengthening the collaboration between Universities
and Business in curricula design and curricula deliver may ensure that graduates have the right skills
and transversal competences required by the market (EC-IPTS (2011)).For example, in Estonia, the rapid growth of RDI requires a higher number of skilled human resources than currently available.
In the region of Malopolska, the emergence of fast-growing companies and clusters in industries like information and communication technologies, telecommunications and pharmaceuticals has been supported by the changes of the profiles of regional universities.
Intensive stakeholders'consultation: In Australia, future bottlenecks/threats of the Australian grains industry are detected by direct consultations among grain growers,
the Australian Government, research partners and other stakeholders. Based on this, the Grains Research and development Corporation (GRDC) identifies the most likely drivers of change in the GRDC's immediate and broader business environments over the next five years.
They include grain market characteristics, environmental issues, government policy and regulatory requirements, R&d and delivery, customer expectations and social issues.
and regional economies are interconnected increasingly. Governments may want to take the interregional and international dimension of the emerging activities into account in their strategies (e g. to increase regional competitiveness,
to detect business opportunities and to capitalise on synergies and complementarities with other regions). Here, international organisations could serve as platforms to facilitate interregional and international interactions across sectors (e g. the International Association of Science Parks and Innovation Areas.
mechatronic modules and components for various high-tech industries and precise measurement technologies) where increasing intensity of R&d collaboration across regional borders could bring new opportunities.
its peripheral position raises both opportunities and challenges for cross-border collaboration. Its close position to the Mediterranean area,
In Australia, the exposure of the grains industry to international competition ensures that innovation driven productivity growth is a constant priority.
Recognising that the Australian grains ecosystem is connected to global economies lead the Grains Research and development Corporation to design its priorities to be compatible with other regional
OECD TIP case-studies and enquiry in governance for smart specialisation The mobilisation and empowerment of key stakeholders and institutions to realise their potential as leading contributors are essential elements to transform a traditional regional innovation
v) the need to increase transparency on how stakeholders are selected, involved and, especially, what role (empowerment) they are provided during the process (See Box 1. 8). INNOVATION-DRIVEN GROWTH IN REGIONS:
THE ROLE OF SMART SPECIALISATION OECD 2013 35 Box 1. 8. Empowerment of stakeholders in the designing of the smart specialisation strategies In the context of the Brainport Eindhoven Region in The netherlands
on the contrary, relevant stakeholders of the automotive sector (Companies of the cluster of the automotive sector are acknowledged to enjoy a strong critical mass) are invited only with advisory capacity to the STI policy-making meetings with the Supreme Council for Science
‘as necessary',to allow stakeholders to identify specific problems and generate policy recommendations that feed back into the policy-making process.
After the meetings, the SCST‘assigns'tasks to stakeholders for the implementation of the adopted decrees.
Thematically focused working groups were established, counting more than 250 stakeholders. Agents from the business side, academics, and special interest groups
and the project results Profiling the region Together with strong leadership and stakeholder's involvement,
and the Revealed Comparative Advantage (RCA) for economic activities, are used to avoid biases and to compare countries
number of newly established enterprises, Gross domestic product, and export data per economic sector. For countries, sufficiently detailed, internationally comparable economic data is available from OECD (www. oecd-ilibrary. org/industry.
to feed in discussions among stakeholders and cannot be used directly for taking decisions, notably because they can hardly identify emerging activities.
which can point to interesting opportunities for technology development and to gaps in the regional or national scientific profile.
Some examples include expenditures on innovation and research and development in specific sectors, the availability of human capital for certain scientific, technological and economic areas, the presence of IT-infrastructure in specific sectors
STIE=Science, Technology, Innovation, Economy Source: ECOOM-Centre for Research & development Monitoring at Leuven University Additional limitations to data analyses arise
A number of indicators for innovation, research and development commitments, complementary investments in related industries, early stage market transactions as well as for interregional and international collaboration deserve more attention in the future.
Here, foresight exercises have been highlighted as a powerful tool to develop a shared vision of the future among all stakeholders.
iv) Interaction with the systematic involvement of stakeholders in an inclusive process with long-term perspective for the analysis of different perspectives and their social relations in the system;
It can help to stimulate communication among key players and permits a quick first assessment of their status and potential that is needed to prepare a SWOT analysis as described in the European commission's RIS3 GUIDE.
the enterprise sector, the science/knowledge & creative sector, the government sector and the regional innovation system as a whole covering interactions between all three sectors.
The development of the information and technology communications (ICTS) has facilitated strongly the connectivity and communication within regions (and inter-regions.
This database makes it possible to make versatile studies of the renewal of the Finnish economy and innovation environment.
and empower the relevant stakeholders that have the potential to provide value added. Data and indicators to measure specialisation in science
and set the necessary mechanisms to reduce imperfect information among all stakeholders. INNOVATION-DRIVEN GROWTH IN REGIONS:
information channels of communication, staff exchanges and interagency joint programming (OECD, 2012f). ) Some of these new challenges can be grouped as follows:
the emerging of cross-sectoral and cross-technological activities require multilevel communication and policy coordination across a higher number of different ministries and agencies (local, regional, national and supranational) and across a higher number
of policy areas (e g. industrial, innovation, education, energy, transport and entrepreneurship. Growing STI governance at regional level:
This demands interregional co-operation between different authorities. It also brings new challenges to national governments where regions enjoy different degree of autonomies (See box 1. 12.
and require development of adequate conditions to build trust, effective communication and commitments. Governance for smart specialisation requires strategic capacities to grasp future opportunities, mainly in order to:
identify local strengths; to align policy actions and to build critical mass; to develop a vision and implement the strategy for the regions;
a vertical link was formed between the National Innovation Strategy, the Ministry of Employment and Economy Corporate Strategy and Sectoral Strategies, the Finnish Funding Agency for Technology and Innovation Investment Strategy (Tekes
The Tekes 2008 strategic focus area paper People-Economy-Environment Choices for building the future represented the main linkage between regional and national strategies.
The paper outlines global drivers of change and current challenges of the Finnish economy and industries.
development and innovation activity to areas where Finland would have the best opportunities for growth and competitiveness globally.
THE ROLE OF SMART SPECIALISATION 42 OECD 2013 the aim to increase the competitiveness of the Finnish economy by:
ii) renewing the economy and creating new businesses; iii) increasing productivity in industries and the service sector;
the growing interconnectedness of economies reenforce the need for increased regional and international collaboration and for a coherent alignment of policy frameworks to adjust policies to business reality (e g. simplification of policies and removal of regulatory barriers).
State-of-the-art fusion industry (Media Communication fusion, IT fusion system, Robot application, New materials and nano-fusion, Biomedicine and medical devices, High value-added food industry;
High Value-added service industry (Global healthcare, Global education services, Green financing, Contents and software and Meetings, Incentives, Conventions and Events and tourism industry) Brainport Eindhoven Region
Smart Mobility, Solar and energy in built environment, Smart Materials, Lifetec&health (including Homecare), Design. Source:
in order to engage and improve the communication with stakeholders for further strategic co-ordination and fine tune priorities setting.
and to identify emerging opportunities at regional level. The results have a direct impact on national strategies.
and achieving their primary goal of transforming economies into more competitive, job-rich and sustainable ones.
That is, linking actions to objectives, connecting opportunities to assets, and policy instruments to priorities. The most common policy instruments used to support specialisation range from dedicated budgets, institutions, clusters initiatives, strategic investment, venture capital, education and training.
Nevertheless, in many countries and regions, there is no clear articulation of priorities (e g. stated in policy documents)
i) improve the absorptive capacity of the socioeconomic stakeholders (including public staff and SMES) and;
emerging‘activities'may lack evidence-based potential economic value, opportunities for new start-ups or technology exploitation for existing companies.
New tools are required to help policy makers to assess the potential of emerging activities for future economic growth,
strategic analyses are declared as one of the most important influence on the selection of priorities, both for regions and countries (Figure 1. 2). The influence of stakeholders,
Using demand-side instruments, such as, public procurement policies oriented towards the promotion of innovation and the development of new markets:
Developing mutual learning practices to provide policy makers opportunities to learn from good practice examples but also failures carried out by other governments.
Relying on expert support to improve the stakeholder's involvement during the priority-setting and policy-making process.
Online Delphis with regional and international experts and stakeholders to identify emerging issues and trends, Systemic Foresight Methodology).
Fostering a structural transition from policymaking to cycles of policy development and policy learning once smart specialisation becomes more and more adopted as an economic policy concept.
and effectiveness of their policies. 18 Clear benchmarks and criteria for success and failure are needed.
It contains trend analysis, benchmark with national average and, where possible other European Innovation Regions (Regional Innovation Scoreboard top 20.
Summary Governance for smart specialisation requires strategic capacities to grasp future opportunities. This includes: the capacity to identify local strengths;
Available at http://ec. europa. eu/enterprise/sectors/ict/files/kets/hlg report final en. pdf; See also page 21 of this report. 3 Some case studies in the OECD appear to interpret smart specialisation as necessarily involving prioritising‘sectoral cluster',‘sectoral strategic plans'or‘cluster strategy',for example, the Photonics Cluster (Gwanju, Korea;
4 Place-based policies can be defined as those policies that take into account the spatial dimension of economic activities.
ii) providing advice and services to SMES; iii) participating in schemes promoting the training and placement of high level graduates in innovative businesses;
iv) hosting incubators for spin-offs in science and technology parks and; v) providing input to innovative clusters and networks.
of Economics, Volume 106, Issue 1, 103-121 OECD 2013 53 Greenhalgh, C. and M. Rogers (2010),‘Innovation, Intellectual Property and Economic growth'Princeton university
Hausmann R. and D. Rodrik (2003),‘Economic Development as a Self-discovery'Journal of Development Economics, Volumen 72,2.
'CID Working Paper 128 Hecht K. 2007),‘Intelligent Policy Management in the IMS Frameworks'at Business models and Drivers for next generation IMS services.
Building Resilient Regions for Stronger Economies'.'Paris, OECD Publishing OECD (2011),‘Regions and Innovation Policy, OECD Reviews of Regional Innovation'.
Knowledge-based capital driving investment and productivity in the 21st centuary. DSTI/IND (2012) 5 OECD (2012d), Fostering New Sources of Growth Is there a role for Industrial Policy in the 21st Century OECD (2012f), OECD Science, Technology
'International Review of Applied Economics, 26:2, 223-239. OECD 2013 55 PART II CASE STUDIES ON SMART SPECIALISATION The case studies provide an in depth analysis of real-life experience in policies and governance mechanisms for building smart specialisation strategies.
This amount included AUD 244 million of industry investment and AUD 207 million in Government matching contributions.
The structure of the RDC model and the extensive collaboration between industry and researcher stakeholders involved
and can result in more effective communication and uptake of the outcomes of R&d. This contributes directly to innovation driven productivity growth in Australian agriculture.
The GRDC works closely with its two key stakeholders Australian grain growers and the Australian Government.
The Australian Bureau of Agriculture and Resource Economics and Sciences (ABARES) Farm Innovation Survey was conducted first in 2008.
the data allows the grain sector to develop its own benchmarks for innovation to ensure agriculture does not lag behind the national push to develop broader skills
products and services made possible through ongoing R&d and innovation. The GRDC investment in R&d represents approximately a quarter of the total investment in Australian R&d for grains21.
Australian agriculture contributes on average approximately 3. 2%of Gross domestic product (GDP)( as measured between 1999-00 and 2005-06). 22
the second lowest in the OECD after New zealand. 26 The exposure of the Australian grains industry to international competition ensures that innovation driven productivity growth is a consistent grower priority.
and iii) the Growers Report an overview of R&d investment in the pipeline. Growers participate in regional Annual General Meetings and elect panel representatives.
These themes guide investments and research topics over a five year period. Most investments are made over multiple years,
so only approximately one third of funds are available each year for new investments. The Australian Government's guidance in regard to RDCS'research focus comes via the national and rural research priorities.
These priorities are very broad and intentionally leave the RDCS with considerable INNOVATION-DRIVEN GROWTH IN REGIONS:
which provide an opportunity to clarify and reinforce the Government's priorities. The GRDC's mission also reflects the Australian Government's national innovation priorities which focus Australia's innovation efforts to strengthen the national innovation system.
Communication and feedback is facilitated via state conferences, newsletters and surveys. The GRDC has established dedicated regional forums to elicit stakeholder input.
All grain growers in Australia are required to contribute to GRDC operations via a 1%levy on the sale of grain.
grasping the opportunities for smart specialisation In order to identify future priorities, GRDC: i) approaches investment using programme logic;
ii) consults extensively with stakeholders, particularly growers; iii) maintains strong networks with researchers and these networks alert it to opportunities for world-leading research;
iv) monitors international developments in grains R&d and applies them locally when possible; vi) conducts periodic situational analyses of its stakeholder industries;
and v) commissions other agencies to study aspects of the grains industry when required. In its 2012-17 Strategic plan the GRDC has identified six strategic themes to focus investment
and will deliver practice change on farm. These themes are grower centric, consistent with GRDC's commitment to deliver value to growers:
i) meeting market requirements; ii) improving crop yield; iii) building skills and capacity; iv) protecting your crop;
GRDC determines future priorities on the basis of maintaining a balanced portfolio of investments. This balance not only relates to risk;
and global economies the GRDC designs its priorities to be compatible with other regional, national and international drivers such as:
iii) international competition; and iv) The Australian Government invests significant resources to increase food security in other countries as part of its aid budget.
Based on consultations with grain growers, the Australian Government, research partners and other stakeholders, the GRDC has identified the most likely drivers of change in the GRDC's immediate and broader business environments over the next five years.
They include: grain market characteristics; environmental issues; government policy and regulatory requirements; R&d and delivery;
Levies also ensure that end users take an active interest in the investments and the resultant research.
The use of an open innovation model in sourcing R&d services allows GRDC to flexibly engage in multiple specialised fields of research as required by its priorities.
) Agricultural Commodities. Available at: www. abs. gov. au/ausstats/abs@.nsf/mf/7121.0 21 GRDC (2011) National Grains RD&E Strategy.
Available at www. ruralrdc. com. au/WMS/Upload/Resources/Innovation%20review%20submission%20final%20300408. pdf. 23 Australian Bureau of Statistics (2012) Agricultural Commodities.
www. abs. gov. au/ausstats/abs@.nsf/mf/7121.0 24 Australian Bureau of Agricultural and Resource Economics and Sciences (2012) Agricultural Commodities.
'and thus an opportunity for the Flemish ICT and pharmaceutical industries to diversify. Innovation in the health domain is a societal challenge,
ii) to create economic value for the Flemish economy; and iii) to help Flanders to obtain a strong position in European networks in this domain.
While the initial strategy development (the entrepreneurial discovery process) started from one research centre, during the course of the OECD-TIP exercises, a wider set of stakeholders universities, academic hospitals, companies from the health
The current strengths in research have been a result of years of investment in the strategic research centres imec and VIB.
In the Flemish administration, the Department of Economy, Science and Innovation (EWI) has this responsibility.
the question whether Nfh has a potential economic value for the Flemish OECD 2013 63 economy is difficult to predict.
Whether there are opportunities for new start-ups or technology exploitation for existing Flemish companies is too early to say as the foreseen technological breakthroughs are still very far from commercialisation.
as well as all actors, is to estimate the likelihood of future economic growth of such an experimental domain.
whether the region is large enough to carry the burden of investment needed in future research and research infrastructure.
grasping the opportunities for smart specialisation The mapping exercise created enthusiasm shared by a wide set of stakeholders from research and industry.
and positioned to mobilise other stakeholders and to set a strategic framework for further actions.
supporting entrepreneurial bottom-up initiatives needs to rely on a level of self-organisation of a number of actors who have the position and commitment to mobilise other stakeholders.
THE ROLE OF SMART SPECIALISATION 64 OECD 2013 and innovation support, adaptation of regulation, demand side policies, etc.
'The leading actor in the development of FISCH was essencia Flanders, the multi-sector business federation of the life sciences and chemical companies in Flanders, in cooperation with VITO, the public research institute for environment
i) the business models need to be attached closer to the needs of society as providers of solutions;
The Flemish government has endorsed the development of this cluster by investments that should lead to increased strategic decision-making
as the publication outputs in this domain are below OECD 2013 67 the benchmark average. Moreover, the alignment of the knowledge base in Flanders is not too high
discovery and governance (see Figure 2. 1). Figure 2. 1. SWOT of FISCH Strengths Anchors Broad involvement of many stakeholders High private expenditures on R&d
& competence pole Governance Low public R&d exp. in chemical sector given the importance of the sector Opportunities Anchors Developing white biotechnology knowledge base,
Economy policy and Science, Technology and Innovation (STI) policy. The topic of FISCH, sustainable chemistry, does fit Flanders'prioritisation policies very well.
it is mentioned as a lead example in the Whitepaper on New Industrial Policy (economy policy)
and thus is a tangible intersection between the innovation policy and the economy policy. Figure 2. 2 shows the priorities of all relevant policy initiatives
grasping the opportunities for smart specialisation It is FISCH's ambition to further boost the transition towards sustainable chemistry by identifying and stimulating opportunities and by brokering and catalysing co-operation.
which are laid down in FISCH'innovation agenda, its feasibility study and business plan. The Flanders strategic Innovation Agenda for sustainable chemistry was based on a wide variety of strategic exercises including:
i) questionnaires and interviews of the most important stakeholders on the OECD 2013 69 importance of these technologies for Flanders and for themselves, ii) technological workshops on selected topics;
and v) Consultation-evaluation workshops with different stakeholder groups (large companies, small companies, societal stakeholders.
In addition to the shorter-term articulation of demands by members, FISCH develops roadmaps for the mid-term future.
and matching between knowledge supplies and opportunities in the market. Thirdly, within the context of this case study, a number of add-on exercises were developed that give further insight into the ecosystem that surrounds FISCH.
while Flanders'economy shows a clear specialisation in chemistry, the technological and scientific specialisation level is much lower:
the patenting and publication activity in Flanders is not much above the average level of all OECD benchmark countries.
THE ROLE OF SMART SPECIALISATION 70 OECD 2013 collective of actors (FISCH members) who jointly decided that entering new paths could form an opportunity for competitiveness and knowledge creation in the future.
Broad consultation and stakeholder involvement: have been crucial elements in the development of the strategy process.
The role of input from a wide set of stakeholders have enriched the strategies, and dedication of the FISCH members is simply necessary to fund the platform and projects.
the mismatch between the strengths in the economic system and strengths in the research system is a policy challenge.
In the multilevel governance the issue of linking the regional strengths with international opportunities and value chains may have an interregional character,
With a strong technology and design base, Brainport is one of three key pillars of the Dutch economy, together with Seaport (Port of Rotterdam) and Airport (Schiphol Amsterdam.
Brainport has a population of about 740,000 people, a Gross Regional Product of EUR 27 bn and a total R&d investment of EUR 2. 5 bn,
Decentralisation has increased also the powers of the provinces, most importantly in regional-economic policy, nature management and spatial planning.
Its management approach is to bring stakeholders together, acting as a catalyst and stimulator, in a project-based manner,
borne and backed by the stakeholders involved rather than by Brainport. Under the header of Brainport independent cooperatives have been established
Capital D (design) en Brainport Health Innovation are important examples. In 2010 Brainport developed, on request of the central government and parallel to the already existing airport and seaport visions, a cohesive and comprehensive future vision.
Brainport 2020, Top Economy and Smart Society is an ambitious regional vision, strategy and implementation programme for the oncoming years.
Brainport 2020 was produced by a triple-helix programme committee, in close bottom-up consultation with regional stakeholders.
Another main challenge is increasing public investment in the Brainport region. This especially applies to boosting public R&d expenditure.
Key policy instruments and investments The most important innovation policy instrument, both in funding size and in popularity, is the national WBSO scheme for corporate tax deduction of R&d expenditures.
The Brainport region stands out in terms of international connectedness, collaboration and entrepreneurship, but also in terms of R&d and innovation performance as measured by patents and business R&d expenditure.
grasping the opportunities for smart specialisation Challenges and opportunities Brainport 2020 identifies three‘top clusters'and a number of‘clusters in development':
'i) The top clusters are high tech systems, chemical engineering & chemistry, and lifetec (medical technology and cardiovascular);
in particular strengthening ties with the Aachen region, could also offer opportunities in further scaling up.
Although national funding for such projects in the past proved very difficult, European funding opportunities based on Smart Specialisation offer new scope for intensifying cross-border collaboration further.
venture capital) have replaced existing subsidy instruments. Moreover, in the runner-up to the new programming period 2014-2020 current available funding for regional projects is almost zero,
Cross-borders opportunities: new smart specialisation programming offers a number of advantages for Brainport Eindhoven,
of which the opportunities to extend and strengthen cross-border collaboration in the wider ELAT region are perhaps the most eminent.
not least since high-tech regions like Brainport are operating in highly dynamic and unpredictable markets subject to globalisation and strong international competition.
These various stakeholders establish the key assets in the ecosystem that drive entrepreneurial discovery inside and outside of the cluster.
The local networks provide business incubation, research and technology development, pilot production and equipment services, management and marketing services, human resource development and technology transfer.
Knowledge flows between researchers inside and outside the cluster ensure that research is kept at the forefront of technology innovation with competitive firms in LED and optical communication placed within the global supply chain.
The crisis drove local stakeholders to reach a consensus to establish a new local economic development plan and strategies.
agencies and technology centres promoting the photonics industry in Gwangju were established through the Ministry of Knowledge Economy programmes
The local policymakers also set priorities for the governance system to support photonics, specifically optical communications and LED technology.
The LED sector focused on domestic demand because various sectors such as automotive and handheld devices have great potential for market expansion
These were embodied in the Korea Photonics Technology Institute that provided a test system of photonics communication and leadership in optical communication and materials.
In the second phase, a full-fledged service system was designed to promote the two priority areas of optical communication and LED.
Their technological and human capacities can be utilized to provide technology development, extension services and testing and accreditation services locally.
grasping the opportunities for smart specialisation Just as the past development of the photonics cluster was dependent on government intervention,
prospects for future development are dependent on grasping opportunities for smart specialisation. The vision to make Gwangju a global top three cluster is laid out in Photonics 2020:
and iii) to strengthen supply chains to increase demand, localize production of intermediate goods and internationalize R&d cooperation and marketing.
and iii) intensify business services by capacity building and better coordination of service agencies. OECD 2013 81 When planning how to further develop,
and diversify beyond the current proficiencies in LED and optical communication technologies. At the national level greater streamlining
Factors that contribute to these difficulties are shrinking domestic demand and weak local linkages. Further, local industry finds itself constrained by its small-firm size and low levels of technology;
Multilevel coordination and mobilisation of stakeholders: Photonics was the first industry promoted by the central
It is also necessary to create a multilevel governing mechanism to coordinate stakeholders and a consensus development process.
THE ANDALUSIAN AEROSPACE CLUSTER Simon Vazquez, Innovation and Development Agency of Andalusia (IDEA Agency) and M Angeles Ruiz, General Secretary of Universities, Andalusian Ministry of Economy
including incubators, Engineering centre, Suppliers Village among other services. The knowledge base stems from the School of Aeronautic Engineers and the rest of applied studies from the Universities of Seville, Pablo de Olavide, Cádiz and Córdoba.
and identify potential project opportunities; iii) organising and holding the Committee for Entrepreneurial Action (CEA),
Knowledge generated is made available to enterprises through these Knowledge Agents that have to be approved by the Central Government,
in order to validate their research structure before the enterprises cooperate with them to carry out R&d projects financed by the Ministry of Innovation.
i) Enterprises, managed by the Development Agency IDEA, include several incentives lines: for creation, modernisation, co-operation and R&d projects with special consideration to strategic sector defined by the Industrial Andalusian Plan;
grasping the opportunities for smart specialisation The Strategic Plan's main goal is to turn the Andalusian Aerospace into a competitive sector of Knowledge & Innovation based economy and in one of the engines of development.
Entrepreneurship: Policy makers should take into account the entrepreneurial context of the sector when designing incentives. University and industry linkages:
THE AUTOMOTIVE CLUSTER Definition of the ecosystem and its boundaries The automotive sector has been the pioneering sector of the Turkish economy in terms of exports and R&di capabilities.
Small and Medium Size Enterprise Development Agency; Technology Development Foundation of Turkey etc.;lastly The Automotive technology Platform (OTEP.
demand structure Strong Position in International Trade Competitive subcontractors and suppliers High standards of quality in production Well-educated, young,
standards, production and global conjecture The high level of Know-how of the suppliers due to foreign partnerships Opportunities Increase in domestic demand Newly emerging opportunities within the global markets and neighbouring
and also the high level of taxes on fuel products The incompatibility of the legislation on motor vehicle taxes with the EU Legislation Inconsistency of demand due to sudden and high increases in taxes rates Noncompetitive
Increase in costs that are reflected not to retail prices Inadequacy of industrial design capabilities Threats Second hand vehicle imports from the EU Uncertainties in studies conducted in energy efficiency and environment legislation Enormous increases
in raw materials Negative Impacts of Revaluation of TL on Exports The rise of China, India and East-europe countries in terms of low costs Delay in capacity building and technological investment decisions Source:
32 while other relevant stakeholders are invited to the meetings with advisory status. SCST is an asset for STI governance based on its role in establishing expectations that steer the Turkish system forward
SCST further assigns tasks to stakeholders for the implementation of the adopted decrees. As necessary
ad hoc committees have allowed stakeholders to identify specific problems and generate policy recommendations that feed back into the policy-making process at the SCST level.
and technology platforms involving SCST permanent members and/or stakeholders. The 24th meeting of SCST, for example, was realized on 7 august 2012;
which allow adapted environment for a bottom-up and an entrepreneurial discovery of the technology needs of each sector.
grasping the opportunities for smart specialisation There is a strong political commitment to support the automotive cluster among policy makers from different ministries
Prepared under the coordination of the Ministry of Economy Turkey's Export Strategy for 2023 aims at reaching a flexible and R&d based export structure;
Environment, Energy and Resources; Safety; Design and Production Systems; Electrical Vehicles Special Research; Nano-technology in Automotive;
of Economy, Undersecretary of Treasury, Chairman of the Turkish Atomic energy Authority, President of TÜBITAK and a Vice president, General Director of the Turkish Radio and Television
The UK automotive industry The UK automotive sector is characterised by significant foreign direct investment and high exports, equivalent to 12 per cent of the UK's exports of goods. Overall
and contributes some GBP 10 billion value-added to the United kingdom economy. The United kingdom produces over one million cars annually,
A long established, independent design engineering sector offers the full spectrum of services from concept design through to limited-series vehicle production.
and the last five years have witnessed a succession of acquisitions, closures and re-emergences in response to the changing demands of its global market.
It noted that there is a great deal of investment globally in low carbon technologies yet the market for the next generation of low-carbon vehicles remains wide open.
The UK automotive industry has reached a consensus as to how this opportunity can be seized and the challenges answered.
and maximise the benefit to United kingdom operating firms and supply chains of this accelerated penetration and continue to attract inward investment for the development and production of LCVS.
as it goes some way towards OECD 2013 93 removing uncertainty about demand, and provides‘early adopter'market insights to those who participate.
but also the longer term challenges and the infrastructure and environment in which the industry sat.
The aim of the CRA was to map product technology demands to R&d needs. Research was categorised according to six technical areas and across three timeframes which,
weakness and potential for future development and identified the activities that should be a focus for R&d investment
and 3) note United kingdom strengths and opportunities. 110 companies participated through a survey and workshops.
A simple analysis was carried then out to give an initial indication of likely Return on Investment (Roi) levels across different technology areas.
This study was used then by the AC to inform their strategic decision-making around prioritisation of United kingdom automotive technology investment.
Broad stakeholder consultation: Through wide consultation it was possible for all relevant stakeholders to contribute
and commit to a consensus view around future innovation needs within the industry and the research needed to get there.
This consensus allowed government to direct public funds for R&d to areas where it would have the most beneficial impact on industry and the economy.
and state government level for planning, priority setting and infrastructure investment. The strategy is implemented through three‘Horizon Strategies'aimed at encouraging manufacturing to modernise
CSIRO is currently working with stakeholders around the design of this precinct. OECD 2013 97 Monash University has initiated also a cluster type initiative on its Clayton campus, the Monash Science Technology Research and Innovation Precinct (STRIP.
ii) increased investment and new‘leading businesses'attracted to the region; and iii) high level support professionals moving into designated innovation hubs.
problem solving and open innovation environment that encourage businesses and researchers to explore new frontiers in science, technology,
and researchers by providing businesses with services directly related to securing a competitive edge; and iii) Establishing world class regional facilities
and environments that attract and retain businesses and create attractive and exciting places for people to learn,
THE ROLE OF SMART SPECIALISATION 98 OECD 2013 Stakeholder dialogue is the primary tool used by SEMIP to build specialisation in the region.
and be driven by local specialisation and identified growth opportunities. Identified influencing factors across the innovation system that can impact on specialisation priorities include:
The establishment of networks (both informal and formal) are essential in driving stakeholder participation in the development and sustainability of a region.
A skilled workforce is a fundamental aspect of driving economic growth, especially in high tech manufacturing or research.
and creating an environment that allows workplace mobility, and hence the possibility of open innovation and idea cross fertilisation.
Key policy instruments and investments The main key policy instruments in the Lower Austrian policy mix can be divided into three groups:
Advices and services: Lower Austria implemented programmes (soft measures) providing services to support R&d&i activities of SMES.
Its innovation strategy focuses on the establishment and expansion of targeted industrial competencies. At the fore, there is the ongoing development of existing and formation of new value creation chains, especially in technological/market niches,
These are‘intrapreneurs'with a university background managing innovation projects tailored to the specific needs of the SME (Priedl 2011c.
but combined with soft measures described above, e g. a funding scheme for cooperation projects and OECD 2013 101 services of the Cluster managements, a funding scheme for technology projects and services of the Technopol managements,
or a funding scheme for R&d projects and services of the Technology and Innovation Partners.
The efforts of the Lower Austrian RTDI policy in the past decade are clearly visible in the dynamic and positive development of RTDI actors and R&d expenditures, partly due to the communication and consensus via RIS NÖ (Steering committee
Priedl 2011b) Future development grasping the opportunities for smart specialisation Current status of the specialisation
Participants of this process are customers, intermediaries and the Steering committee RIS NÖ, which supports the process.
Opportunities for cross-border and international ecosystem development Lower Austria is in the lucky position to surround Vienna
Stakeholder and policy dialogues to achieve the ambitions In Lower Austria already in 1997, at the beginning of the Regional Innovation Strategy Lower Austria,
Companies are involved directly through large scale questionnaires and strategy meetings (Enterprise Dialogue. In Lower Austria knowledge creation achieved by stakeholder
and policy dialogues is implemented bottom up as well as top down. Good examples for a top down process are meetings of the cluster advisory board,
Lower Austria's proximity to the knowledge-intensive Vienna region and the neighbouring Czech and Slovak Republics and Hungary in close vicinity present a specific set of challenges and opportunities.
and carried out interviews with stakeholders. It also completed a survey of the activities of other similar regions.
Further they support the structural transformation of the Lower Austrian economy and promote the creation of a knowledge-intensive economy (European commission 2011).
Lower Austria is one of the regions not specializing on explicit lead sectors, but on functional priorities (mainly Technopols and Clusters).
Investment policy and subsidies of the EU, Austria, and a regional government. Priedl, I. 2011c:
Key policy instruments and investments Several features of Upper Austria's innovation system and policy are of key importance from the perspective of smart specialisation analysis. Firstly,
politics and society involved in the strategy setting process, in respect of the overall system by means of communication with experts and STI implementers and via ex-post evaluations.
and Innovation Policy in Upper Austria is linked with the Ministries of the Upper Austrian Government as well as with the responsible regional government's departments and directorates for regional planning, the economy and rural development (department economic
and innovation and economy promotion agencies, owned by majority by Upper Austria, have been organized under the common roof of the newly founded Upper Austrian Innovation Holding Gmbh.
Future development grasping the opportunities for smart specialisation Current status of the specialisation and prioritisation in the region The regional economy of Upper Austria is characterized by its very strong industrial core.
The strong industrial sector is reflected also in the landscape of R&d topics of Upper Austria's research system.
The main focus areas in the strategic economic and research programs are determined via stakeholder consultations, studies and analysis of regional requirements.
Opportunities for cross-border and international ecosystem development Upper Austria is a province in the heart of Europe with open-minded inhabitants and a very export oriented economy.
Stakeholder and policy dialogues to achieve the ambitions In Upper Austria knowledge creation achieved by stakeholder
or opportunities for improvement could be taken sufficiently early. Lessons learned and conclusions for policy The lessons learned can be grouped as follows:
iii) Lacking critical mass on human capital in public) R&d and; iv) Growing gap of R&d HR resources, especially in the engineering sciences (Brain drain.
OECD 2013 111 REFERENCES Commission Communication Europe 2020: a strategy for smart, sustainable and inclusive growth. COM (2010) 2020,3 March 2010.
,(2009) Smart Specialisation The Concept Knowledge Economists Policy Brief No 9 june 2009 Foray, D.,P. David and B. Hall,(2012) Measuring Smart Specialisation:
Vienna University of Economics and Business, Institute for Regional Development and Environment INNOVATION-DRIVEN GROWTH IN REGIONS:
SEARCHING FOR A SMART SPECIALISATION, UNDER THE CONDITIONS OF A TRANSITION ECONOMY Pavel Csank, Petr Chládek and David Uhlír, South Moravian Innovation Centre, Brno and Jirí Bla ek
as well as other transitional economies in Central europe, is a FDI branch plant driven economy characterised by a relatively underdeveloped sector of knowledge-intensive business services.
Manufacturing thus represents the main driver of competitiveness, but it has a quite different structure compared to the innovation leading economies.
Key industries are dominated by multinationals'plants usually without strategic marketing, sales and R&d operations, which has serious impacts on the extent and quality of innovation demand across the business sector.
Local enterprises typically compete in market segments of standardized goods and services with high price elasticity and increasing competition from countries with even lower production costs (e g.
Romania Turkey, or China. Despite this trend, most entrepreneurs do not have the ambition to reorient towards markets where higher-rank innovations are the key to long-term success. Second, from the evolutionary perspective, the innovation policy of the Czech republic, as a whole,
The incentive system was adjusted subsequently to target FDI involved in higher value added operations (high-tech manufacturing, R&d, strategic services etc..
The economy of South Moravia is driven by firms concentrated in the regional capital (the city of Brno), a dynamic and innovative centre and the second largest city in the Czech republic (500 thousand inhabitants in the city agglomeration),
The main rationale for starting this process was to change from a non-sustainable exogenous development strategy aimed at creating jobs by attracting foreign direct investments (FDI) to a more endogenous approach.
and as a means for utilizing the opportunity to channel EU Structural funds into innovation support measures.
Both generations of RIS were focused primarily on supporting start-ups (incubators financial services, consulting and the establishment of a centre for technology transfer.
i) a significant broadening of a group of people across key stakeholders who trusted each other
such as the Steering committee (high-level political group), the Coordinating Committee (expert group) and four thematic working groups comprising 80 people from all three triple helix environments.
ii) services for companies; iii) human resources; and iv) internationalisation. Strategic goals and activities were proposed for each priority axis
and involves open discussions with stakeholders about the results. A comprehensive external ex-post evaluation is planned to be conducted in 2015.
Key policy instruments and investments The key instruments in the third generation of RIS in South Moravia include:
Services for companies: i) incubation programme-three business incubators with more than 7000 m2 office and laboratory space, micro-loan fund.
Each start-up has its own consultant, who OECD 2013 115 can connect the new entrepreneurs with growing network of mentors and coaches either nationally or from abroad;
and iii) cluster development services most important the building up (incl. soft facilitation of cooperation) of the Centre of competence in machine tools.
Future development for smart specialisation The first two generations of RIS were mainly about the development of incubators and services for innovative start-ups.
It can be viewed as a result of the prevailing position of the regional and national economy within intricate global value chains.
On the other hand, there is a growing demand among business people as well as economic development professionals for an elaborated national innovation strategy that covers the whole ecosystem, incl. the quality and relevance at all level of education, institutional setting etc.
The aim is to identify as many as possible narrow fields in which regional economy has significant position in the world market (e g. electron microscopes, cyber security SW.
which all stakeholders (may be also various foundations and even engaged public) could put funds devoted to the implementation of the strategy.
Lessons learned and conclusions for policy The key lessons learned might be helpful primarily for the regions from other transitional economies that have been on the uneasy way towards a standard system of liberal democracy with market economy,
and at the same time need to tackle with the global trend of shifting towards the networked knowledge economy.
only time and opportunities would have been lost. There have always been fundamental regional disparities in a variety of endogenous potential and development opportunities.
It is only local efforts what can initiate a process of change. Stakeholder's mobilisation:
Building the consensus space across regional triple helix sectors is both the first and the last objective of the day.
and facilitating consensus approach of regional stakeholders. Each region has its own way to find
THE ROLE OF SMART SPECIALISATION 118 OECD 2013 ESTONIAN RESEARCH AND INNOVATION STRATEGIES THE ROADMAP TOWARDS A KNOWLEDGE BASED ECONOMY Marge Seppo and Urmas Varblane, University of Tartu
Other important area-specific development plans are Estonian Higher education Strategy 2006 2015, Estonian Enterprise Policy 2007 2013, Development Plan for Estonian Adult education
and entrepreneurs and creating an attractive environment for research and development, and technological innovation; preference is given to R&d
To encourage active participation by Estonian researchers and enterprises in international RDI cooperation, Estonia has tried also to bring the key areas in line with the European union's RDI priorities.
Key policy instruments and investments For supporting and funding the priority areas the national programmes in the key areas were initiated.
and ensuring the distribution and implementation of key technologies in other sectors of economy (particularly in traditional industry, energy sector, transport, etc.)
and socioeconomic fields (health care, life environment, etc..There are six national R&d programmes launched, including sub-measures:
and innovation and entrepreneurship policy instruments (e g. R&d Financing Programme, SPINNO Programme, International Co-operation Networks, Technology Competence Centre Programme, Innovation vouchers, Cluster Programme etc..
Much of this task is coordinated through the Research and development Council and its implementation falls under the responsibilities of sector ministries, in particular the Ministry of Education and Research (MER) and Ministry of Economic Affairs and Communications (MEAC.
i) to implement state-of-the-art technologies that provide high added value and the growth of productivity in many fields of life (information and communication technologies, biotechnologies, material technologies;
and to achieve socioeconomic objectives in the areas that are important for every resident of Estonia, for instance in energy, national defence and security, health care and welfare services, INNOVATION-DRIVEN GROWTH IN REGIONS:
The growth areas will be distinguished based on combined evaluation of structure of Estonian economy. During this evaluation, the research structure and industry structure in Estonia, resources of Estonia,
In planning and designing the future strategies different stakeholders are included MER MEAC, Estonian Development Fund, University of Tartu (TIPS programme) are the initiators of the analysis,
For encouraging entrepreneurial discovery the cooperation and involvement of enterprises is thereat especially important. Opportunities for cross-border and international ecosystem development Countries of the size of Estonia cannot effectively address all societal challenges alone, mostly due to the lack of critical mass and economies of scale.
Many of the large societal challenges are universal, or at least European, and are suited therefore well to be addressed jointly between the partners of European Research Area and with the support of European policies and measures for example through the Joint Programming Initiatives.
and opportunities opening up within the Baltic sea Region and Nordic countries. Also the mobility programmes and measures (e g.
Stakeholder and policy dialogues to achieve the ambitions Estonian innovation policy is based based on broad collaboration led by the advisory Research and development Council involving representatives of industry, academia, Government as well as ministries of Education and Research
and Economic Affairs and Communications. In practice the main responsibility of strategy making implementation and evaluation lies on the two ministries (MER and MEAC),
The connection between sector ministries, societal stakeholders and the core RDI system should be much stronger in the future.
On the other hand, Estonia's innovation system is so far rather detached from a vast part of its economy.
This is the result of the innovation system being focused on areas other than those that dominate the Estonian economy today.
Scarcity of skilled human resources is currently and likely to remain a bottleneck for sustaining the rapid growth of RDI in Estonia.
and easily absorbed by the needs of a few larger enterprises. Industry representatives have highlighted the lack of educated
The connection between sector ministries, societal stakeholders and the core RDI system is insufficient. Also, the participation and activity of other stakeholders and societal partners (entrepreneurs, civil society organisations) in advisory bodies is low
and thereby limiting the capability of advisory bodies and stakeholders to define the social demand for RDI policy.
There is a need to focus on fewer and stronger clusters. Particular emphasis should be paid on increasing the SME participation.
More emphasis should be given to matchmaking activities between knowledge institutions and enterprises and not only on large R&d-collaboration projects with a limited number of enterprises.
Broad stakeholders'consultation: One of the most important factors of the future development of innovation system and using smart specialisation approach is active involvement of different stakeholders.
So far the involvement and coordination between different ministries and with industry has been an important problem.
Cooperation between all the stakeholders has to be increased definitely in the future. Social challenges: It is highly likely that some key topics are of international relevance,
THE ROLE OF SMART SPECIALISATION 122 OECD 2013 strengthening the cluster organisations'possibilities to finance and initiative projects with enterprises not having yet RDI activities.
This would mean including actions such as to support service innovation, technology transfer, IPR acquisition and protection, entrepreneurship,
and regional innovation strategies in year 2008 had the overall aim to increase the competitiveness of the Finnish economy.
renewing the economy and creating new businesses; increasing productivity in industries and the service sector;
Key policy instruments and investments In the synchronization process, national and regional innovation policy goals were harmonized,
A vertical link was formed between the National Innovation Strategy, the Ministry of Employment and Economy Corporate Strategy and Sectoral Strategies, the Tekes the Finnish Funding Agency for Technology and Innovation Investment Strategy,
The Tekes 2008 strategic focus area paper People-Economy-Environment Choices for building the future represented the main linkage between regional and national strategies.
The paper outlines global drivers of change and current challenges of the Finnish economy and industries.
development and innovation activity to areas where Finland will have the best opportunities for growth and competitiveness globally.
This database makes it possible to make versatile studies of the renewal of the Finnish economy and innovation environment.
for example the opportunity to create an entirely new way of implementing university policy through networklike operating models
namely environment, design and practice-based innovation. This model of thought enabled the collaboration of all the strategies, plans and bodies in the region.
THE ROLE OF SMART SPECIALISATION 126 OECD 2013 promoting services, equipment and nutrition; iv) Timber built environments and scarce resources in housing;
and iv) Design services. Figure 2. 8. National (Lead Market) Themes and Practices in 2008-2010 Source:
Tekes Ambitions, strategic plans and tools and catalysts in the innovation ecosystem Three thematic top expertise areas were selected by the bodies in Päijät-Häme region as regional platform of practices
The three chosen top areas of expertise are the environment, design and practice-based innovation.
Tekes Opportunities for cross-border and international ecosystem development The Lahti region has developed specific innovation activities,
which is the leader in Finland in innovation environment research. The team has participated also in the practical testing and developing of the model;
and get access to technologies of large multinational enterprises. In many cases, the large enterprises are interested in buying
or licensing the technologies that are developed further by the SMES. Core practices for promoting and facilitating innovation activities in the region have been established.
LUT Lahti Schoolof Innovation) Ecodesignsustainableinnovationuser-drivenr&dfinnovaatiosampocleantech/Environment (keyorganizationalplayer: Lahti Science and Business Park) INNOVATION-DRIVEN GROWTH IN REGIONS:
THE ROLE OF SMART SPECIALISATION 128 OECD 2013 Stakeholder and policy dialogues to achieve the ambitions Interactions between government and cluster organisations (regional, national,
In this sense, the strategy synchronization process between Tekes and regional stakeholders has involved: i) Regional government:
ii) National stakeholders: OSKE program on environment. Tekes as a national R&d funder; iii) EU's smart specialisation agenda;
and iv) Industry: individual companies, chamber of commerce. Bottlenecks and threats for the innovation ecosystem that hamper entrepreneurial discovery Low R&d levels in all sectors remain a key bottleneck for the region.
Finally, Lahti needs to link vocational education to the development of the innovation environment and increase international education and research cooperation.
the strategic combination of the new practice-based innovation philosophy with the top three areas of expertise led to a novel innovation environment, that could,
The state governments of Berlin and Brandenburg came in August 2006 to an understanding about a common model called Capital Region Berlin-Brandenburg.
The innovative core of the nascent cluster structures is underpinned with a growth-and competition-oriented basis by innovation policy instruments.
These spheres have then been discussed with the scientific community and the enterprises: during Handlungsfeldkonferenzen (separate conferences dedicated to each sphere of activity),
Key policy instruments and investments The innobb approach concentrates on industries that are characterized by having a critical mass of actors with joint interests in markets with big growth potential on an international scale.
In addition to that there are extensive services offered by the cluster management organisations, e g. support for scientists and new companies in networking, searching for partners, technology transfer, founding, financing, advanced training, business development and internationalisation as well as the initiation and realisation of joint R&d projects.
and business incubators, offering support for start-up companies through offices at favourable prices, know-how transfer, etc.
Moreover there are venture capital funds managed by subsidiaries of the developments banks of both Berlin and Brandenburg
Another initiative of both States is the common Business plan Competition. Thanks to know-how transfer, coaching, networking and competition,
the entrepreneurs to be are supported through the transformation of their idea into a commercial concept.
industry settlement, job creation, investment, patents, and new products, visibility on the national and international level.
Future development grasping the opportunities for smart specialisation Current status of the specialisation and prioritisation in the region The current status of the specialisation and prioritisation in the region can be grouped as follows:
which also includes health-related services. The expansion of the cluster is to create new jobs by way of the continuous further development of the innovative core,
but also in the production and application of environment-friendly energy and OECD 2013 131 cutting-edge energy efficiency technologies.
The improved opportunities for system offers serve to enhance the competitive position of the cluster partners.
Regional commonalities such as the locally available personnel and their qualifications or the science and transfer offers available create improved conditions for joint projects that will also hold their own position in an international competition.
THE ROLE OF SMART SPECIALISATION 132 OECD 2013 Opportunities for cross-border and international ecosystem development Supporting the private and science sector of the capital region in the enhancement of their international
Stakeholder and policy dialogues to achieve the ambitions Stakeholder's involvements during the policy-making can be exemplified with the following figure refereed to the cluster for energy technology:
Stakeholders'involvement at different levels Source: Brandenburg Bottlenecks and threats for the innovation ecosystem that hamper entrepreneurial discovery The capital region hosts many internationally renowned universities as well as research institutes (such as Fraunhofer and Max Planck institutes.
The availability of venture capital in the region is limited rather. In order to attract international VC investors Berlin-Brandenburg has to present itself as the open
where the close cooperation of academic institutions and enterprises gives the opportunity for sustainable growth. It seems to be useful for the development of the region to put special emphasizes on smaller but more numerous niche markets (e g. diagnostics or telemedicine) within the clusters.
energy, health, ICT, new materials, environment and agriculture, society in sustainable socioeconomic development, safety and defence.
The results of foresight projects have also been included in the Strategy for Innovation and Efficiency of the Economy.
economic growth, infrastructure, natural resources and new materials. The second regional foresight project (The Technology Perspective Kraków-Malopolska 202035) was carried out in 2010-2011.
Under the project 10 key technologies for future development of regional economy have been defined. The ten most promising technologies in terms of the regional potential have been grouped into three areas:
and priorities of the Development Strategy with regard to innovation and entrepreneurship (in line with RIS 3 Guide:
Guide to Research and Innovation Strategies for Smart Specialisation (RIS 3)).Key policy instruments and investments The key policy instruments implemented by the regional authority are:
The funding is directed to investments in education infrastructure, lifelong education infrastructure as well as investments in infrastructure and technology with a view to developing information society.
which aims to direct investment-related support for SMES and strengthening of their institutional environment and support for commercialisation of research.
In particular the founding is directed to investments in industrial research performed by research units for entrepreneurs;
investment projects in the form of tangible assets provided for the purpose of conducting R&d works in enterprises;
innovative solutions by providing financial assistance to pre-competitive research in enterprises. -The Priority Axis 5 of the Programme,
including the system of investment grants, aimed at supporting the development of the Malopolska innovation centre.
SEZ is designed for all businesses from industry and services, but there are some preferences to companies from industries, mainly automotive or services like ICT, R&d, financial and accounting services (BPO).
The strategy of SEZ as well as Technology Park Kraków is to focus the activity on ICT industry.
the development of ICT Technology Incubator (established in 2008) and the Malopolska IT Park (the project will be finished in 2012
and is financed from the Operational Programme Innovative Economy). Coordination activities to support smart specialisation Overall coordination activities have been carried out by the regional authorities of the Malopolska Region.
ii) Malopolska Economic Observatory which monitors the state of Malopolska economy; iii) Malopolska Social policy Observatory which monitors and collects the data from the area of social policy;
The system is based mainly on the indicators related to activities of regional stakeholders (if any phenomenon occurs interesting
Future development for smart specialisation Current status of the specialisation and prioritisation in the region The regional economy has undergone many structural changes over the last 20 years, especially from low-tech manufacturing industries to medium
-tech manufacturing industries and knowledge-based services. The examples of the structural changes taking place in the Malopolska Region are presented in Table 2. 1. OECD 2013 137 Table 2. 1. The examples of structural changes in the Malopolska
and then located in Malopolska the centre of common services). Radical foundation of new domains The emergence and growth of ICT industry.
life science, sustainable energy, information and communication technologies (including multimedia), chemistry; ii) emphasis on three flagship undertakings:
a) support for entrepreneurship of higher-education students and academics; b) common innovation bonds (new instrument encouraging to test ideas at early stage;
Opportunities for cross-border and international ecosystem development The main drivers of cross-border and international ecosystem development include:
which is an interregional network of collaboration created at the initiative of the Nowy Sacz Business school National Louis University and medium-sized enterprises predominantly from the regions of Malopolska, Silesia and Mazovia.
Stakeholder and policy dialogues to achieve the ambitions One of the main goals of the regional authorities of the Malopolska Region is to engage citizens, especially scientists,
The goal of this approach is to involve stakeholders from a very early stage of preparation of RIS 2013-2020.
Stakeholders indicate the need to put more efforts on concentration of research and innovation priorities, OECD 2013 139 mainly on the areas such as life science, ICT, energy.
The role of universities in supporting transformation of regional economy: The example shows that important role in transformation of regional economy has been played by regional universities, especially in the fields such as:
ICT, multimedia and life sciences. Regional universities are engaged also in many initiatives aimed at addressing the main challenges in traditional areas of regional specialisation i e. mining (clean coal technologies) or chemistry, foundry and steel industries (new materials, ICT.
and innovation priorities is a challenging task including many stakeholders and active role of the regional authority.
but these results should be discussed with stakeholders through public consultations. Another challenge is how to engage stakeholders in the process of implementation of RIS 2013-2020.
It seems that monitoring and evaluation system (i e. the Malopolska Regional Development Observatories, and constantly developed system of monitoring and evaluation of RIS 2008-2013) could be used actively in this field through promoting transparency and effects of public interventions.
For example, the development of sustainable energy in the Malopolska Region is one of the key areas for future development identified by regional foresight and regional stakeholders,
On the other hand-it is peculiar to the Basque political structure-the important role assigned to the Provincial Councils of Alava, Bizkaia and Gipuzkoa in fiscal policy with important roles in economic promotion and development.
Basque government and Provincial Councils have an essential role in the financing of technology centres, both in terms of its implementation, strategic investments,
and impacts The financial goal established by the Basque government aimed to reach 3. 00%GDP in R&d investment by 2015, starting from 2. 02%in 2011.
and iii) Indicators of investment in RDI. Country Indicators measure those aspects of the evolution of the Autonomous Community able to synthesize the level of its socioeconomic development.
and economic development was the creation of enterprises in sectors considered as key future areas in new technologies, energy, life sciences and nanosciences.
and iii) Risk that the continuity of the economic crisis may pose to the economic sustainability of the Basque Innovation System.
The Basque Country faces a fundamental challenge to substantially increase its investment in innovation and
particularly, its investment in focused basic research. It is imperative that every effort under public budgets is leveraged by structural reforms in the areas of education
The context of these cases differ considerably ranging from regions/nations with the challenge to mobilise entrepreneurial discovery processes in an economy that lacks high levels of innovative assets to regions/nations with the challenge to shift the focus of existing assets
what was once a national top-down strategy is now revealing structural bottlenecks as local stakeholders seek new technological opportunities.
The new strategy for a regional photonics cluster in the region of Gwangju is geared more to the smart specialisation concept coordinating a network of local stakeholders.
In regions with relatively strong innovation capabilities, a rich network of institutions and well-organised stakeholders,
as well as being flexible and open to new opportunities. In a considerable number of case studies public investments for R&d are still spread across a wide number of priority areas.
In less advanced regions the key challenge is to provide the right framework conditions to build capabilities that stimulate the entrepreneurial discovery process,
as well as mobilising stakeholders to interact with government and cooperate with each other. These are often more generic policies rather than domain specific policies.
Another issue highlighted by the cases is that policy priorities are often set in very broad terms (e g. green energy) needing further stakeholder involvement to define this more precisely in terms of promising niches or value chains.
challenges and opportunities. What is specific for smart specialisation is an emphasis on entrepreneurship policies,
on cluster support, including the facilitation of bottom-up strategy processes, within the broader policy mix.
Demand led policies for smart specialisation are used not widely in our set of case studies. In the case of the low carbon automotive sector in the United kingdom,
This raises discontent with groups of stakeholders who have expectations of receiving support from their government.
Alongside wide stakeholder consultations there are ample examples of policy makers that have embraced actively the triple helix process to stimulate bottom-up innovation and diversification.
The depth and effectiveness of this stakeholder involvement are more difficult to assess across all cases.
and future economic growth will likely be based. Whether a state or region focuses on modernisation of existing industries or on building up of an emerging growth market,
An asset that should not be underestimated is the social capital available in the regions. The self-organisation of clusters and other loose networks
and the ease of interaction between governments and stakeholders has shown to be very important in the dynamic cases.
the mobilisation of new stakeholders by disseminating the use of these tools, is as important to create broader support for a joint discovery process.
and in the private sector (e g. commercial market studies) more easily accessible for stakeholders developing their joint strategies.
spanning from the impact of single initiatives on specific players to those of integrated initiatives comprising wider sectors of the economy/RIS.
Stakeholder involvement and the combination of bottom-up and top down prioritisation processes appear to be a common pattern in studied regions.
and focusing on a limited number of knowledge investments is uncontested not and still proves difficult to implement in policy practice.
and requires a level of self-organisation and commitment from these stakeholders in order to scale this up from an individual good idea,
and entrepreneurial stakeholders and contribute to enhance evidence based policy making. There INNOVATION-DRIVEN GROWTH IN REGIONS:
A NIP is about stimulating innovation, competition and investment in know-how; it is not only about creating new economic sectors,
and restructuring of existing sectors/enterprises via stimulating their participation in new, global value chains.
wasteful duplication and dissipation of the potential agglomeration economies at system level as a multiplicity of imitative local government authorities compete to attract the small finite pool of mobile capital,
a process based on the existing capabilities and industry commons and animated by the development of R&d and innovation activities in some targeted domains that offer present or future strengths for the regional economy.
as well as potential matches and mismatches across scientific, technological, innovative and economic activities both within regions and within global value chains.
However, precise ex ante estimation of the future value of an R&d specialisation that would be required for a cost-benefit analysis is a nearly impossible task and one better left to investment markets.
whether or not these entrepreneurial processes have a real potential to create new economic activities or to transform existing industries.
and innovation resources and activities on the one hand and the sector structure of the economy on the other hand. Diagnosing apparent strengths, weaknesses, fits
Without metrics, indicators and regular data collections, smart specialisation strategic opportunities will not be discernible and policy makers will be unable to track progress,
complementary investments in related industries and early stage market transactions in addition to more traditional indicators such as patenting and publication levels.
if the economics of smart specialisation is not to remain purely abstract, but is able to link theory to practices.
& Environment and in Biology (see Table 3. 2). Unfortunately, the absolute publication numbers are too low to give any valid assessment on the level of subdomains.
The Mean Expected Citation Rate (MECR) gives a benchmark value for the MOCR on the basis of journal's impact factors.
In order to take into account differences with respect to size of the population and the economy, the size of its R&d and research community and the technological infrastructure,
the whole of patents in the USPTO system can serve as benchmark. However, one can also chose to limit the benchmark group to a subset of countries or regions.
However, international databases on sectoral economic activity often aggregate many NACE or SIC codes into broad overarching sectors,
indicators for economic activity, including international trade, R&d expenditures, birth and death rates, High-Growth enterprises rates, turnover, value-added, production, operating surplus,
employment, labour costs and investment. Benchmark data can be obtained by summing up sectoral data over all countries in these OECD database (or over a smaller group of benchmark countries if desired.
Also Eurostat publishes ample economic data on a sufficiently detailed sectoral level. The limitation of Eurostat data compared to OECD data is that the benchmarking group pertains to the whole (or a selection) of European countries, making worldwide comparisons impossible.
Unfortunately, on a regional level, it is difficult to find sufficiently detailed, internationally comparable economic data.
and Manufacture of Equipment for Radio, TV and Communication. We see that the relative employment in Air Transport
By comparing the RTA's of a country or region with its RCA's for a specific technology-economy node,
more advanced analyses of publication and patent data can point to opportunities in technology development.
which can point to interesting opportunities for technology development and to gaps in the regional or national scientific profile.
the availability of human capital for certain scientific, technological and economic areas, the presence of IT-infrastructure in specific sectors, etc.
For the mapping of human capital educational data, such as the number of students enrolled in different educational programs could be of relevance.
In order to assess whether these processes have a real potential to create new economic activities or to transform existing industries, diagnosing apparent strengths,
complementary investments in related industries and early stage market transactions in addition to more traditional indicators such as patenting and publication levels.
In addition, a number of indicators for innovation and research and development commitments, complementary investments in related industries and early stage market transactions,
And, crucially, how to make sure that the strategies are reaching their intended goal of transforming economies towards more competitive, job-rich and sustainable ones?
if the smart specialisation approach is to offer the expected transformative power on national and regional economies.
Similarly the degree of influence of various types of stakeholders in the selection process is highly context-dependent
while at the same time has concentrated a quite public investment process on a few selected fields, organized through the public funding of clusters and technopoles).
thus ending up in a full coverage of RDTI and economic activities in a country/region;
Production processes, industrial equipment Austria, United kingdom Flanders, South Moravia, Basque country Services Austria, Finland, South korea Maths and chemistry Austria Maths and engineering
, energy Nanotechnology, materials Agrifood Noord Brabant Smart Mobility, Solar&energy in built environment, Smart Materials, Homecare, Design Life science, biotech, biomedicine, pharma, health
industry Media Communication fusion IT fusion system Robot application New materials and nano-fusion Biomedicine and medical devices High value-added food industry High
Value-added service industry Global healthcare Global education services Green financing Contents and software Meetings, Incentives, Conventions and Events and tourism industry Life science, biotech, biomedicine
, pharma, health ICT Environmental technologies, energy Mobility, traffic, transport, logistics Nanotechnology, materials Agrifood Water Services INNOVATION-DRIVEN GROWTH IN REGIONS:
and orient its research, innovation and economic policy independently of the federal level. The alignment between national and regional priorities is fostered by a shared willingness from the authorities at those two levels in Europe,
and economic priorities is influenced both by evidence and by the action of stakeholders Overall, strategic analyses are declared as one of the most important influence on the selection of priorities, both for regions and countries (Figure 3. 9). The influence of stakeholders,
either individually through the action of interest groups, or collectively through the action of consultative bodies, is also a key vehicle through
Reorienting the economy towards a knowledge-driven economy, ensuring renewal of the productive fabric both through transformation of existing companies/sectors and through the creation of new ones developing all companies,
Protecting the advances that the economy has in certain fields, extending those areas where the country/region is already strong,
Overall the emphasis seems to be more on building on existing strengths to transform the economy rather than on creating completely new activities.
and across that field and the economy. The frequency of use and roles of advisory bodies, high-level expert groups, hearings and polls, interministerial bodies, etc. varies considerably across countries and regions,
Co-ordination and policy-making mechanisms and institutions Within the RDTI field Between RDTI and economy Advis. body Strategic council Round tables Interminist. body Advis. body Strateg. council
and European Social Fund) is used often as an opportunity to carry out SWOT assessments. Independent expert assessments are frequent too,
In the case of this region, public investments have been focused on the specific niches identified in the strategy:
solar&energy in built environment; smart materials; homecare; design. The targeted policy instruments used to support the identified domains span across a whole range of policy domains (R&d, education infrastructure, FDI attraction.
Strategic investment support; Dedicated venture capital; INNOVATION-DRIVEN GROWTH IN REGIONS: THE ROLE OF SMART SPECIALISATION OECD 2013 187 Dedicated education and training;
Regulations adapted to the goals; Specific research and innovation programmes; Innovation-driven public procurement policies;
and economy budgets are dedicated to the priority areas. In Lower and Upper Austria, the main instruments used to support prioritised domains are quite similar to the above case:
Dedicated venture capital (more important in Lower Austria; Dedicated education and training; Regulations adapted to the goals (e g. green building.
but little dedicated venture capital and education and training programmes. A number of programmes set the membership of regional cluster as a INNOVATION-DRIVEN GROWTH IN REGIONS:
dedicated education and training programme and also strategic investment support as a major tool from the economic policy domain.
The whole range of tools from both RDTI and economic policy domains are reported as being used intensively, without distinction, for the support of three prioritised areas in Andalucia:
whilst most economic policy instruments are used in a moderate way to support the priorities (with the exception of cluster policy, a major instrument).
Dedicated venture capital; Support to international platforms and collaboration; And it is estimated that more than 50%of public funds is channelled to the priority areas,
while it is not possible to calculate such a share for programmes under economic policy. At regional level, in Gwangju,
It contains trend analysis, benchmark with national average and, where possible other European Innovation Regions (Regional Innovation Scoreboard top 20.
Capitalising not only on the strength of existing assets but also on the future opportunities. This is probably the most difficult challenge,
and captured by existing data or stakeholder action. Actually, the responses to the enquiry suggest that the approach followed puts much more weight on reinforcing existing strengths than on directing efforts towards future opportunities through instilling more radical trajectory changes.
To define these niches, the Smart Specialisation concept proposes to establish an entrepreneurial discovery process.
foresight, SWOT analyses, benchmarks, etc..The enquiry showed that indeed both sources are used for the definition of the priorities.
In the same vein, supporting these niches demands a synergetic approach from different fields of policies (research, technology, innovation, industrial policy, environment policy, education and training, etc..
This will help to broaden the traditional, linear-oriented innovation policies with demand-side instruments,
THE ROLE OF SMART SPECIALISATION 192 OECD 2013 Mutual learning and expert support to improve the stakeholders involvement process and the interlinkages between quantitative and qualitative inputs into strategy formation process;
stakeholders involvement is difficult to organise with respect to future or emerging areas of activities, because by definition those domains are organised less well
and money of EU origin in the case of EU regions (in some cases Structural Funds are the main funding sources for innovation and economic policies in the regions).
and innovation strategy for smart specialisation a RIS3 starts with the adoption of a shared vision for the transformation of a regional economy towards a more competitive and more sustainable one in a long-term perspective.
and to mobilise the regional stakeholders for the process of strategy making. It helps regions to develop their RIS3 Strategies by stimulating communication
and permitting a quick first assessment of their status and potential that is needed to prepare a SWOT analysis as described in the European commission's RIS3 GUIDE.
the enterprise sector, the science/knowledge & creative sector, the government sector and the regional innovation system as a whole covering interactions between all three sectors.
identifying existing strengths and opportunities for future development efforts, spotting remaining gaps and bottlenecks in the regional innovation system, mobilising the relevant institutions and actors to be involved in the RIS3 development process,
and invite representatives from selected leading enterprises and lead institutions to go through the questions and report their results.
The entire triple helix of the a regional innovation system Regional leading enterprises and entrepreneurs:
Since smart specialisation addresses enterprises as drivers of innovation they should be invited to provide their insights
This should cover all relevant government departments (enterprise, research, education, finance, etc..Regional lead institutions: Representatives of the regional science, knowledge and creative sector (e g. universities, research and technology organisations or innovation and design centres concentrate expertise on a region's specific knowledge profile.
THE ROLE OF SMART SPECIALISATION OECD 2013 195 limited set of challenges and economic fields where investment could upgrade the whole region's profile in global value chains.
Guiding questions for self-assessment Assessment of the status and potential of the enterprise sector What are your regional key economic sectors and in
Which leading enterprises (i e. large multinational firms and/or hidden champions and/or key entrepreneurial innovators) are situated in your region?
and global market opportunities do you conceive as very promising for your regional economy in the upcoming decade?
What upcoming threats and challenges do you see for the regional key economic sectors (and the regional economy as a whole) in the next decade?
How internationalised is your regional economy (i e. how export-oriented are the keys sectors, what is the level of foreign direct investment)
which sectors are most open in that respect? To which destinations do most exports go? Which economic sectors in your region are strong in R&d investment and technology development?
Where do they get their new scientific and technological knowledge? From regional universities or from international R&d partners?
Do local universities supply regional enterprises with ample graduates or do need regional employers to look abroad for qualified personnel?
How do you assess the climate for entrepreneurship in your region? Is it easy in your region to pursue innovative business ideas?
or do they rather prefer jobs in established enterprises or public sector? If not, what are the main barriers?
Do regional research and innovation priorities and the type of support (grants, loans, guarantees, vouchers, business services, access to laboratories, qualified personnel,
which science fields are R&d investments, R&d personnel, publications, and patent applications concentrated)? Please name up to five.
Are regional investments from both public and private side in place to complement your own resources
Does current academic education fit to the needs of the regional economy do regional employers absorb graduates
or also facilitate the emergence of demand for innovations? Besides science or technology driven innovation,
& creative sector interact with the regional economy (i e. do you have industry-science co-operations in you region, privately endowed chairs at universities, joint research infrastructures,
What are the main opportunities/emerging sectors? How can the regional enterprise sector and the science/knowledge & creative sector be mobilised to respond jointly to these challenges and opportunities?
What are the main challenges your region is facing with respect to RTDI performance (i e . what are the major bottlenecks for a better overall innovation performance)?
How can these bottlenecks be overcome by formulating and implementing jointly a RIS3 strategy? Do scientific, technological,
Do perceptions of the enterprise sector and the science/knowledge & creative sector with regard to future promising technologies and products correspond?
and identify the relevant stakeholders in the enterprise sector and the science, knowledge & creative sector.
contact relevant stakeholders, distribute the guiding questions and organise necessary steps and milestones. Perform an assessment of each sector by stakeholders stemming from the respective sector.
Perform an assessment of each sector with a mutual outside view (e g. stakeholders from the enterprise sector assess the science and the government sector and vice versa.
Prepare a first SWOT analysis as starting point for the RIS3 process. Use identified strengths, weaknesses, opportunities,
and threats for the development of a shared vision. INNOVATION-DRIVEN GROWTH IN REGIONS: THE ROLE OF SMART SPECIALISATION 200 OECD 2013 NOTES 38 Eurostat (2011),‘Patent Statistics at Eurostat:
The Ministry of Economy does not want to prioritise sectors. Taking into account the new strategic document,
we could observe that Ministry of Economy prefers more horizontal approach and the selection of areas of specialisation is
Ministry of Economy prefers to talk about lead markets or key technologies i e. identified in the project Insight 2030,
and to encourage regions to reflect the future opportunities instead of their existing economic structure. Some regions like North Savonia use almost 95%of their EU Structural funds in line with those synchronized lead market themes. 45
or margins and/or retain more customers than its competition. There can be many types of competitive advantages including the firm‘s cost structure, product offerings, distribution network and customer support.
Programme for the Competitiveness of Enterprises and SMES 2014-2020 EAFRD: European Agricultural Fund for Rural Development ERDF:
Leading Enterprise: A regional enterprise that is characterised either by a size well beyond the regional average and is being successfully active on international markets
or by being highly influential for the region‘s innovative (creative) potential. R&d: Research and development RTDI:
A strategic planning method used for evaluating projects on the basis of their Strengths, Weaknesses, Opportunities and Threats.
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