The European Commission s science and knowledge service. Monika Matusiak Tbilisi, 1 October Joint Research Centre
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1 The European Commission s science and knowledge service Joint Research Centre Smart Specialisation Strategies Beyond EU Monika Matusiak Tbilisi, 1 October 2018
2 2 The concept of smart specialisation as a place-based innovation policy
3 Smart Specialisation Strategy (S3) Smart specialisation strategy = Research and Innovation Strategy for Smart Specialisation (RIS3) In the EU connected with Structural Funds Implemented mostly at regional level (NUTS2) Guidance and support: S3 Platform, Guidebooks, Thematic Partnerships 3
4 Smart specialisation in the EU REGULATION (EU) 1303/2013 Applies to the European Regional Development Fund (ERDF) Ex-ante conditionality A national or regional smart specialisation strategy is in place that: concentrate resources on a limited set of R&I priorities to maximise the positive impact on growth and jobs over 120 smart specialisation strategies for ERDF prepared more than EUR 67 billion allocated to: bring new products to the market create new jobs create start-ups by the end of the programming period ERDF Eligibility map based on GDP per capita in PPS,
5 Smart specialisation in Enlargement and Neighbourhood countries Based on expression of interest JRC support where possible Ownership and involvement needed 5
6 Smart specialisation worldwide Based on expression of interest JRC support where possible Ownership and involvement needed 6
7 Concept of smart specialisation (S3) Challenge Impossibility to finance all the needs by public sector Need for impact and results Lack of trust Complexity of innovation systems Low efectiveness of traditional silos policies S3 answer Prioritisation Investment in domains with critical mass, growth dynamics and highest chance of impact Open, transparent process, based on evidence and dialogue Combination of different sources of data: economic, innovation, scientific Cross-cutting approach: coordination with research and innovation, industrial, cluster, education and regional development policies 7
8 Innovation paradigm in less developed countries and regions The central process of innovation is not science but design. Thus, the notion that innovation is initiated by research is wrong most of the time. (Kline, J. and Rosenberg, N, 1986: p2880). In reality, there are no true non-r&d-intensive sectors > 17% of firms in high tech sectors do not do any R&D, 27% in the mediumtech sector and 58% in low tech sectors (Som, 2012) > over half of all innovative firms in Europe do not perform R&D (based on CIS)(Arundel, 2009) Share of enterprises engaged continuously in in-house R&D activities: EU-CEE 18%; EU South-20%, EU-North-34% Source: S. Radosevic, UCL 8
9 Different nature of innovation activities between the EU core and periphery Structure of innovation expenditures in EU28 100% 90% regions % 70% % Other expenditures 50% Expenditures on R&D 40% Expenditures in acquisition of machinery, equipment and software 30% 20% % % EASTERN EUROPE SOUTH NORTH EU28 Source: S. Radosevic, UCL
10 What is Smart Specialisation? National/Regional Research and Innovation Strategies for Smart Specialisation (RIS3 strategies) are integrated, place-based economic transformation agendas that: focus policy support and investments on key national/regional priorities, challenges and needs for knowledge-based development. build on each country/region s strengths, competitive advantages and potential for excellence. support technological as well as practice-based innovation and aim to stimulate private sector investment. get stakeholders fully involved and encourage innovation and experimentation. are evidence-based and include sound monitoring and evaluation systems. 10
11 Key notions of the smart specialisation concept Critical mass sufficient to start the transformation process Evidence supporting the policy choices Dialogue to really understand the needs Governance to make it happen 11
12 Concept of smart specialisation (S3) Opportunities to move up the value chains Economic potential Niches to compete on international markets Innovative potential Societal challenges Adding value to existing activities Scientific potential Create new solutions 12
13 Concept of smart specialisation (S3) Example: Economic potential: High level of production and employment in agriculture and food processing Innovative potential: Quickly growing bio-tech cluster S3 priority: Function foods for cardiac patients Scientific potential: Top level pharmaceutical and biotechnology research Societal challenge: Health obesity and cardiac disease 13
14 Concept of smart specialisation (S3) Smart specialisation is: A knowledge-based economic transformation A place-based innovation policy A bottom-up process based on evidence A process of public-private dialogue on the best allocation of public resources 14
15 2 key S3 processes Institutional discovery: Political mandate Right coalition of ministries, departments, agencies and other public institutions Learning and adaptation process Stability and consequence Learning to talk to external stakeholders and build trust Entrepreneurial discovery: Process of discovering real business needs and ways to address them based on knowledge and innovation Mobilising and enabling businesses to answer societal challenges Quadruple helix: business, academia, civic society and public authorities 15
16 16 How we work
17 Smart specialisation how to get there Ownership Who will initiate the process? Who will be responsible for the process? Who will take part in the process? Who will ensure implementation and monitoring? Knowledge What are our strenghts and weakensses? What challenges do we face? What does the hard data say? How should hard data be interpreted? Dialogue With whom do we need to discuss to understand the situation and the way forward? With whom do we need to discuss to secure implementation? Who is necessary to build consensus? Who is necessary to create leverage effect? 17
18 Framework for smart specialisation within E&I Action FINAL S3 STRATEGY INSTITUTIONAL CAPACITY FOR IMPLEMENTATION INSTITUTIONAL CAPACITY BUILDING ENTREPRENEURIAL DISCOVERY PROCESS start MAPPING EXERCISE 18
19 JRC Support Awareness events Training of national/regional S3 team for target countries/regions Methodological guidance Publications Expert support (depending on country agreements) Training of EDP coordinators and facilitators Help in identification of external financing sources 19
20 20 Institutional capacity
21 National/Regional Smart Specialisation Team Internal stakeholders Representatives of national administration responsible for: Economic development Research&Innovation Clusters&Industrial modernisation Representatives of regional/local government Regional/local development agencies External stakeholders Representatives of business: Associations Clusters Chambers of commerce Key companies Most innovative companies Representatives of science: Top universities/departments Research institutes Patent holders Representatives of civic society: NGOs Educational institutions 21
22 National/Regional Smart Specialisation Team Needs to be able to organize and oversee the process of drafting the strategy Needs to be able to secure the implementation and monitoring Should be formalized/appointed Should have direct link with decision-makers 22
23 National Policy Framework What will be the role of smart specialisation strategy? Who will adopt it? How will it be coordinated with other strategies/policies? How will it be implemented and financed? Who will hold responsibility for monitoring and updating? 23
24 Implementation measures PUBLIC: What financing measures are available at regional/national level? Which EU programmes can be used? Can financing from other international donors be helpful? PRIVATE: Will businesses be willing to co-invest? Can venture capitalists/business angels be interested? 24
25 25 Mapping exercise: evidence base for smart specialisation quantitative and qualitative analyses
26 Quantitative and qualitative analyses Quantitative analysis Economic potential Innovative potential Scientific potential Preliminary priority domains Qualitative analysis In-depth interviews Focus groups Case studies 26
27 27 Types of quantitative indicators
28 Economic potential 28 Top three sectors in the WB6 by revealed comparative advantage
29 29 Economic potential
30 30 Innovative potential
31 31 Scientific potential
32 32 Scientific potential
33 33 Scientific potential
34 34 Scientific potential
35 Qualitative inputs What is the innovation path in your target group? Where is the need for public intervention? How can you design appropriate instruments? What is the necessary policy mix to cover the ecosystem? 35
36 36 Entrepreneurial discovery process
37 Quadriple helix who should take part in defining S3 Business manufacturing and services, primary sectors, financial sector, creative industries, social sector, large firms, SMEs, young entrepreneurs, students with business ideas, cluster and business organisations, etc. Research public and private research bodies, universities, science and technology parks, NCPs, Technology transfer offices, Horizon2020 committee members, regional R&I roadmaps etc. Entrepreneurial in composition and spirit: (risk-taking, broader view beyond boundaries ) Different departments, if relevant at different government levels, agencies e.g. for regional development, business advice, public procurement offices, incubators, etc. Public administration NGOs and citizens initiatives related to societal challenges for which innovative solutions would be helpful, consumers associations, Talents! etc. Civil society / Users 37
38 Why is it important to take part Business Opportunity to express real needs Chance to get targeted support Beter understandin g of strategic challenges of the sector Better knowledge of value chains Chance to meet partners and start new initiatives Research Chance to present ideas to the right target group Commerciali sation of research Identification of real business and societal needs that need addressing Technology transfer Real life research Civic society Chance to express needs and challenges Give user experience to proposed new solutions Take part in creating transparent public policies Contribute to social innovation Public authorities Creating policies that address real needs Involve in meaningful dialogue with stakeholders Get feedback from target group Create policies that bring results and have impact 38
39 Entrepreneurial discovery process (EDP) EDP is the essence of smart specialisation It means discovering together with businesses, what needs and can be done to improve innovativeness and competitiveness It should be a continuous, transparent and evidencebased dialogue 39
40 EDP is a continuous process 40
41 Sustaining an inclusive and continuous EDP Role of stakeholders Trust and participation Commit to the strategic objectives identified in S3 strategies Engage in the different stages of the policymaking process Role of government Inclusive governance Enable platforms for targeted stakeholders interaction and policy coordination Build flexible structures and incentives to allow policies to evolve and adapt to a changing reality 41
42 42 Implementation
43 Implementation Implementation structure showing responsibility for delivering objectives and actions Governance scheme including internal and external stakeholders Continued interministerial/interdepartamental dialogue Policy mix synchronised instriuments/measures that will enable the achievement of objectives 43
44 44 Good governance of S3: Seven Principles
45 45 More reading:
46 Thank you 46
Finally, a good strategy must include a sound monitoring and evaluation system as well as a revision mechanism for updating the strategic choices.
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