EUROPEAN COMMISSION

Brussels, 18.7.2017

SWD(2017) 264 final

COMMISSION STAFF WORKING DOCUMENT

Accompanying the document

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS

Strengthening Innovation in Europe's Regions: Towards resilient, inclusive and sustainable growth at territorial level

{COM(2017) 376 final}

Commission staff working document

Table of Contents

1    Introduction    

2    Smart Specialisation – regional partnerships for innovation, growth and jobs    

2.1    The need for smart specialisation    

2.1.1    Boosting investment in research and innovation    

2.1.2    The diversity of performance of regional innovation systems across Europe    

2.1.3    The position of the European institutions    

2.1.4    Public consultation on smart specialisation     

2.2    The RIS3 approach    

2.2.1    The history of smart specialisation    

2.2.2    A place-based policy approach    

2.2.3    Addressing weaknesses in the delivery of regional innovation policy    

2.3    Putting in place the right conditions for effective investments    

2.3.1    RIS3 as an ex-ante conditionality    

2.3.2    Incentives for reform through ex-ante conditionalities    

2.3.3    RIS3 conditionality has helped address institutional weaknesses in innovation systems.    

2.3.4    Changes induced by the RIS3 ex-ante conditionality    

2.4    Early implementation and expected results    

2.4.1    Expected results    

2.4.2    Investment share in Research and Innovation (R&I)    

2.4.3    Thematic priorities of regions – Eye@RIS3    

2.4.4    Selection of operations and expenditure declared in ESI Funds    

2.4.5    Evidence on implementation through analysis of calls for projects    

2.4.6    The establishment of the S3Platform    

2.4.7    Influence on national and regional systems    

2.4.8    Overall assessment of achievements    

3    Key challenges and next steps: boosting innovation-led growth    

3.1    Further reform of research and innovation systems    

3.1.1    The contribution of research and innovation to EU economy and productivity growth    

3.1.2    The need for reform    

3.1.3    Higher education and VET in smart specialisation    

3.2    Increasing cooperation in innovation investment across regions    

3.2.1    Rationale for transnational, interregional, cross-border cooperation    

3.2.2    Addressing fragmentation and creating innovation investments in value chains    

3.2.3    RIS3 in European Territorial Cooperation    

3.2.4    Macro-regional strategies    

3.2.5    European-level support for smart specialisation investment across borders    

3.2.6    Thematic Smart Specialisation Platforms    

3.2.7    RIS3 and the link to Digital Innovation Hubs and other innovation infrastructures    

3.2.8    Maturity of mechanisms to support investment in innovation across borders:    

3.3    Leveraging research and innovation in less developed and industrial transition regions    

3.3.1    Tailoring through RIS3 leads to address specific bottlenecks in less developed regions    

3.3.2    Mutual learning on design and implementation    

3.4    Harnessing synergies and complementarities between EU policies and instruments    

3.4.1    Mechanisms for synergies    

3.4.2    Progress on synergies    

3.4.3    Initiatives to promote synergies    

1Introduction

Europe is experiencing a momentous period of change. Globalisation, automation, decarbonisation, emerging and digital technologies: all have an impact on jobs, industrial sectors, business models, the economy and the society as a whole. It is indispensable to help Europeans adapt to these profound changes and to help the EU economy to become more resilient. In its Reflection Paper on Harnessing Globalisation 1 , the Commission highlighted the opportunities and challenges that Europe's citizens and regions are facing. This means anticipating and managing the modernisation of existing economic and societal structures bearing in mind that today, more than ever local issues have gone global and global issues have become local. To this end, Europe needs a long-term strategy, involving action at all levels, which triggers a fundamental shift in technology, economics and finance.

The future challenge for EU regions is to be able to compete at the global level with other most advanced and emerging economic powers as they are more than ever part of a globalised world. Therefore, they need to find ways to become more resilient and competitive by taking concrete actions at EU, national and local levels while ensuring that the benefits of globalisation are shared.

Many European regions are well positioned to take advantage of the opportunities offered by globalisation. However, the Commission's reflection paper on globalisation 2 stressed that the competitiveness and innovation divide between some advanced EU regions and less strong regions is widening. Vulnerable regions can still be found across Europe in Southern or Central and Eastern Europe. Identify the potential of these regions and focusing on reinforcing their local strengths, narrowing development gaps, and boosting competitiveness can help strengthen resilience to globalisation. Special attention should also be paid to the resilience of rural areas, which are at risk of being left behind by globalisation and demographic change.

Innovation clusters that link up companies, universities, start-ups, investors and local governments must be further developed and linked up across Europe. The EU and their regions should invest more in the emerging industries and workers of the future, focusing on new and advanced manufacturing technologies and related industrial services to drive innovation. EU regions should position themselves in global value chains and help their businesses move up along the value-chain and further exploit their comparative advantages.

In order to do so, regions should further strengthen links between stakeholders and infrastructures across different European countries to exploit synergies. Interregional cooperation can play an essential role in this direction. Sharing costs between companies within value chains and sectors in an open innovation community would allow the development of new processes and provide the means to succeed in a comprehensive way. This would permit many industries, and in particular their SMEs, to develop processes that they would not be able to develop on their own because of a lack of resources.

In order to boost Europe’s competitiveness, it will also be necessary to find additional private investment across all sectors, provide better access to finance (especially for SMEs and start-ups that develop most of the innovations) and increase access to foreign markets towards boosting EU exports. Openness to foreign investment is also key for the EU and a major source of growth – as is to provide investment-friendly regulatory and business framework conditions as well as develop critical infrastructure (including for digitalisation, energy and transport).

Globalisation is a shared task between the EU and its Member States and regions. The table below – from the European Commission’s reflection paper on harnessing globalisation 3 – shows how each level can contribute to make this process successful.

Graph 1: Contribution of each level of governance to harnessing globalisation

In conclusion, it is difficult to predict what globalisation will look like in ten years' time as technologies and their uses are changing rapidly. However, by strengthening cooperation between different levels of government, Europe can help its regions to move up global value chains, stimulate the private sector and target investment on key priorities and challenges, while preventing brain drain and rural flight.

This requires a concerted effort at EU, national and regional level to broaden the base for innovation, better target private and public resources and increase synergies. This entails not only better links within the Single Market and the European Research Area but also new opportunities for businesses to build on regional strengths to develop and grow within global value chains and markets and in this way to seize the opportunities created by globalisation.

In 2010 the Commission called on national and regional governments to develop smart specialisation strategies (RIS3) for research and innovation (R&I) 4 to encourage all European regions to discover their competitive advantage 5 . This new "smart specialisation" approach became the basis for research and innovation investment under the European Regional Development Fund (ERDF) for the programming period 2014-2020. The Council of the EU and the European Parliament have highlighted the need to further build on this approach 6 .

The purpose of this staff working document is to provide a first overview of the evidence and draw lessons on R&I strategies for Smart Specialisation (RIS3) and their contribution to more efficient and effective national and R&I systems that support competitiveness and cohesion as well as broader research and industrial policy objectives, in the context of globalisation.

The document presents the smart specialisation approach and how it evolved from a theoretical concept to tool for the implementation of national and regional innovation policy in all European Union regions 7 irrespective of their economic development level, innovation performance, governance structure, research capabilities or business environment. It also examines how the prerequisites (ex-ante conditionalities) necessary for smart specialisation have been applied.

The staff working document assesses the current state of play as regards the design and implementation of smart specialisation strategies in the EU. It also shows how the smart specialisation approach is being applied in other parts of the world such as Australia and Latin America.

Finally, it examines the contribution of smart specialisation to the reform of European R&I systems and how, by adopting a tailored approach it has helped to build capacity in Europe's regions and facilitate investment across regions. It provides a state of play on the complementarities and synergies between EU instruments.

2Smart Specialisation – regional partnerships for innovation, growth and jobs

2.1The need for smart specialisation

Innovation is recognised as one of the main economic drivers for boosting jobs, growth and investment in the White Paper on the Future of Europe 8 and is essential for achieving the political priorities of the Juncker Commission 9 . Innovation is a precondition for "sustainable and job-creating growth" 10 . It leads to higher productivity and competitiveness while offering social and environmental benefits. 11  

2.1.1Boosting investment in research and innovation

Despite the fact that the target for Member States to invest 3% of their GDP on R&I is one of the priorities of Europe 2020 strategy 12 , the aggregate share of R&I investments within the EU is still lower than in countries such the USA, Japan and South Korea. Within the EU, gross domestic expenditure on R&D as a percentage of GDP varies considerably from country to country with Sweden, Austria and Denmark spending a high percentage of their GDP on R&D and Eastern and Southern European countries lagging behind with lower expenditure.

Graph 2: Gross domestic expenditure on R&D as % of GDP

Source: Eurostat 2017

South Korea and Japan have an increasing performance lead over the EU. In particular their relative strength is in business R&D expenditures, innovation collaboration and procurement. The top R&D spending enterprises invest twice as much on R&D as top EU enterprises. Australia, Canada and the United States have a decreasing performance lead over the EU. However, Brazil, China, India, Russia and South Africa are catching up. In particular China increased its R&D expenditure and the number of Trademark and Design applications.

Graph 3: Global performance (bars show countries' performance in 2016 relative to that of the EU in 2010)

While the EU hosts a high number of high level PhDs, their research is weakly connected to the market. Their employment is almost equally shared between the public and private sector, whereas in competitor-countries the percentage of researchers employed within the private sector is higher.

Graph 4: Researchers share in the business and public sectors in third countries compared to the EU.

Source: Science, Research and Innovation Performance of the EU 2016

2.1.2The diversity of performance of regional innovation systems across Europe

Well performing innovation systems are found in Member States and regions which are better developed and are more competitive. There is a close correlation between R&D performance ("Regional Innovation Scoreboard") and economic performance ("EU Regional Competitiveness Index"). Without research and regional policies working closely together to encourage knowledge absorption, lagging regions and countries may never be able to converge to the technology frontier 13 .

Graph 5: EU regions performance in terms of innovation and competitiveness 

Source: EU Regional Competitiveness Index, 2016 and Regional Innovation Scoreboard Report, 2017

More than half of the total potential for productivity growth in developed countries comes from "catching up" innovation. Given the different level of economic development in which EU innovation actors operate, European policies need to take account of the differing situations in Member States and regions and, in particular, should target the needs of both developed and less developed economies. 14 Cohesion Policy therefore takes account of the specific needs of less developed 15 Member States and the need to support broad based innovation. This is in line with the recommendations of the 2017 Annual Growth Survey, which highlights the need to improve the interaction between research and business and to encourage reforms of weak research and innovation systems in Member States. 16

As conditions differ from region to region, innovation needs to be embedded in local business knowledge that is often concentrated in clusters of related industries, but linked to high quality research across Europe to enable the swift diffusion and application of the knowledge created. By bringing together a broad range of businesses, researchers and public actors as part of a prioritisation and experimentation process and connecting them with new research ideas, smart specialisation can build on Europe's diversity of regional and local strengths.

The process of designing and implementing smart specialisation strategies ensures that public resources are targeted at areas which are likely to bring the best returns in terms of raising the level of innovation in all parts of Europe. This is achieved by addressing weaknesses in innovation systems and reinforcing the institutional capacity to bring research to market and trigger an uptake of innovation, notably in less-developed Member States.

2.1.3The position of the European institutions

The European Parliament expressed its support for smart specialisation in its resolution of 8 September 2016 17 , and proposed to the European Commission and to Member States to implement further actions in order to make smart specialisation become more effective. It also noted in its Resolution of 6 July 2016 that synergies for innovation between Structural Funds and Horizon 2020 and other policies and instruments must be further enhanced in order to maximise the impact of investments. It further called for continued efforts to boost inter-regional collaboration and recalled the importance of innovation systems, institutions and the linkages to local and regional clusters in its report of 27 April 2016 on Cohesion Policy and smart specialisation strategies. 18  

The Council, in its conclusions of 24 June 2016, called for "a more R&I friendly, smart and simple Cohesion Policy and the European Structural and Investment Funds more generally", and recognised that "smart specialisation strategies could be powerful instruments for contributing to tackling societal challenges, and boosting innovation, investment and competitiveness, based on socio-economic and territorial specificities". It called on the European Commission "to give continued support to Member States and regions when developing and implementing smart specialisation strategies". The Council Conclusions of 4 December 2014 on the industrial competitiveness agenda 19 had also already recommended smart specialisation as an approach to prioritising investments and reiterated the importance of clusters and partnerships and the Presidency report of 16 November 2015 on mainstreaming competitiveness also acknowledged the contribution of clustering and smart specialisation strategies. 20

In addition, the European Commission has launched many initiatives at EU level which identify smart specialisation as relevant for structural reforms 21 and for various policies such as energy 22 , digital 23 , industrial 24 policies and for the circular economy 25 .

2.1.4Results of the public consultation on smart specialisation  26

The importance of smart specialisation strategies is also highlighted by the replies of 237 respondents to the public consultation launched by the Commission in December 2016. 73 % of the respondents think it is ‘most and very important to implement European strategic priorities in focus areas in regions’, 70 % think it is ‘most and very important to have a bottom-up agenda for European growth & jobs’, 68 % think it is ‘most and very important that all types of regions can participate (advanced, research intensive regions and lagging regions)’ as well as alignment between complementary efforts in different countries and regions (64%).

The three most important objectives of RIS3 according to the respondents are:

·creating jobs and growth through place-based R&I investments (84%),

·enabling businesses and researchers to develop investment projects together (72%)

·the economic transformation of the region (e.g. towards new sectors) (68%).

The vast majority (94 %) of respondents to the public consultation think that it is important ‘to a great extent’ (74 %) or ‘to some extent’ (20 %) to put in place RIS3 strategies with priorities about which businesses, academia and public stakeholders have been consulted before funding is allocated.

Supporters and implementers of innovation alike observed a significant increase in the participation of clusters or business associations (75% and 66% respectively) and higher education institutions (68% and 76%) in the innovation ecosystem

In terms of the first early impact of smart specialisation strategies on the research and innovation infrastructure or support services, the greatest improvements in the support offered was observed for networking and cooperation (62% for finding partners within the country and 54% for partners abroad), for industrial research activities (55%) and experimental development/prototyping (49%) and for better access to researchers (53%) and R&I infrastructures and R& I service providers (55%). Important improvements have also been observed for technology transfer (47%) and digitization of enterprises and processes (42%) whereas no overall improvements were observed for the regulatory framework.

2.2The RIS3 approach

2.2.1The history of smart specialisation 

Smart specialisation (RIS3) is an innovation policy approach that aims to boost national and regional innovation, contributing to growth and prosperity by helping and enabling Member States and regions to focus on their strengths. RIS3 brings together the research community, business, higher education, public authorities and civil society. These partners identify strengths in their region, and prioritise support based on where local potential and market opportunities lie (the "Entrepreneurial Discovery Process" - EDP). To help with this process, RIS3 seeks to improve governance at regional and national level, concentrate resources, build critical mass, and accelerate the uptake of new ideas.

The smart specialisation strategy concept was developed by the European Commission's high-level expert group "Knowledge for Growth" in 2005-2009 27 , closely related to the concept of clusters 28 , and was originally designed to tackle two main issues:

·The fragmentation of public research systems unable to compete independently on a global scale;

·The duplication of research work which leads to a scattering of resources across the European Research Area.

During the reform of cohesion policy for the period 2014-2020, the concept was extended in order to encourage regional economic transformation. It was also incorporated into EU regional policy as a key principle of investment in R&I.

In its 2010 Communication "Regional Policy Contributing to Smart Growth in Europe 2020" 29 , the Commission called on national and regional governments to develop smart specialisation strategies (RIS3). Following its inclusion in the regulatory framework for Cohesion Policy 2014-2020 through the introduction of specific ex-ante conditionality, this new approach became the basis for research and innovation investment under the European Regional Development Fund.

2.2.2A place-based policy approach

Innovation still depends very much on location. 31 Smart specialisation has been implemented in high-performing 32 , middle income 33 , 34 and less-developed Member States or regions. 35 , 36  Conceived within the reformed EU Cohesion Policy, smart specialisation is a place-based policy promoting investment in innovative activities in selected areas to achieve a smart, inclusive and sustainable growth in line with the EU's Europe 2020 growth strategy. Using local knowledge and learning reflects the overall justification for using a local and regional place-based development policy approach to cohesion policy, rather than employing a space-neutral or purely sectorial approach. 37  

The smart specialisation approach therefore identifies strategic areas for intervention, based both on the analysis of the strengths and potential of the regional economies and on a process of entrepreneurial discovery 38 with wide stakeholder involvement. It embraces a broad view of innovation that goes beyond research-oriented and technology-based activities, and requires a sound intervention strategy supported by effective monitoring mechanisms.

Each region, no matter the type or level of its socio-economic endowment, can in this way find its own way to sustainable and inclusive growth 40 taking into consideration EU strategic goals. For example, a carbon intensive region could focus on transforming experience and technology in traditional activities into greener economic activities that require similar competences and which are set to grow in the future in the context of EU policy priorities.

2.2.3Addressing weaknesses in the delivery of regional innovation policy

If properly designed through an interactive bottom-up process involving most of the innovation actors on a territory, smart specialisation can help address weaknesses in the delivery of innovation policy in Europe. These include the following:

By addressing these issues in the delivery of support for innovation under the European Structural and Investment Funds (ESIF), smart specialisation can contribute to boosting overall growth and jobs, and help respond to globalisation. At a more specific regional level, smart specialisation can – by improving the prospects of specific regions and Member States for growth and economic transformation – also reduce disparities between the levels of development in the various regions and help the less-developed or lagging regions to progress.

It will also contribute to building specialisation in the Single Market as a whole, broadening innovation and contributing to industrial competitiveness goals. This applies to both well-established sectors such as agri-food, tourism, textile and those at the global technology frontiers in energy, environment, nano-tech, and health. Public administrations can use their purchasing power to play an important complementary role by encouraging transformative technological change and the uptake of innovation through their purchasing power.

Such activities offer regions the opportunity to diversify and develop new industrial activities by capitalising on emerging and key enabling technologies (KETs) 49 , digital transformation 50 , service innovation, resource-efficient solutions and other breakthrough innovations that cover all and new forms such as open and user-led, public sector, frugal and social innovation. In addition, the bio-economy and the transition to a circular economy offer great potential for growth.

2.3Putting in place the right conditions for effective investments

2.3.1RIS3 as an ex-ante conditionality

A key element of the RIS3 approach in during the 2014-2020 programming period was the requirement to define a national or regional RIS3 strategy for R&I before being allocated ERDF funding. This ex-ante conditionality was added to the regulatory framework to ensure that the effectiveness of EU investments within the regions was not undermined by the absence of evidence-based innovation priorities and the lack of appropriate institutional framework for R&I.

Two thematic ex-ante conditionalities (ExAC) were introduced in the area of research and innovation 51 :

The RIS3 ex-ante conditionality applied to most national or regional operational programmes (169 out of 205) and in all 28 Partnership Agreements. It was the most frequently applied ex-ante conditionality at regional level. At the time the programmes were adopted, only 20% of the programmes were considered as fulfilling ex-ante conditionality. 20 member states were required to develop action plans to fulfil this conditionality.

The following causes have been identified by the European Commission as responsible for a difficult fulfilment of ex-ante conditionality in the area of RIS3:

·A lack of political commitment to long-term strategies, and difficulties devising a bottom-up process of smart specialisation as a way to prioritise investments;

·The split of responsibilities between different vertical (national, regional, municipal) and horizontal (between ministers and departments) levels, resulting in the fragmentation of powers and failed coordination;

·A lack of effective, competent and adequately skilled staff in administration exacerbated by frequent legislative and institutional changes;

·Weak collaboration between the public and private sector and thus little commercialisation of public research;

·An absence of continuity in the entrepreneurial discovery process and a lack of key milestones, roadmaps, monitoring mechanism;

·Tenuous links between financed projects and RIS3 priority areas.

It is likely that all programmes will have fulfilled their ex-ante conditionalities by the reporting deadline of June 2017. The introduction of the RIS3 ex-ante conditionality 52 has therefore demonstrated the significant potential for the improvement of the governance of national and regional innovation systems in many Member States.

2.3.2Incentives for reform through ex-ante conditionalities

Ex-ante conditionalities (ExAC) have been important in terms of triggering reforms. They accounted for about 85% of the reform-triggering ExAC in in Member States that have joined the EU since 2004.

Graph 6- Overview of reform triggering Thematic Ex-ante conditionalities

Source: Study "Support of ESI Funds to the implementation of the Country Specific Recommendations and to structural reforms in Member States"

ExAC 1.1 (research and innovation) was characterised by a strong reform impact and high coherence with the European Semester (CSR/structural challenges). Evidence shows that the RIS3 ex-ante conditionality triggered reforms in all 13 Member States which joined the EU in 2004 or later and two belonging to the EU15 – IT and GR. 53 All these Member States had Member State specific recommendations in the European Semester process in the Member State Reports in the field of research and innovation in 2012-2015. In the majority of the Member States, the recommendations on research and innovation persisted for the whole period.

The occurrence of reform-triggering ExACs was substantially higher in the major (per capita) beneficiary Member States of the ESI Funds, which are also countries whose level of economic development is below 75% of the EU average.

In many cases, this conditionality helped to break down silos in multi-agent and multi-level governance and led to new dynamics in setting priorities and targets and creating the relevant policy instruments to achieve them. This mechanism, where public administrations listen directly to actors as part of a structured dialogue gives direct and unbiased feedback on existing or potential bottlenecks in national/regional R&I systems and skills and education needs.

2.3.3RIS3 conditionality has helped address institutional weaknesses in innovation systems.

The effectiveness of the EU investments under cohesion policy depends on the institutional capacities in the Member States through which these investments are channelled to the final beneficiaries. The organisation of the public sector and the institutional relationship and cultural norms governing the relationship between innovation actors is essential for economic performance. Characteristics such as trust, information sharing, common goal setting and mechanisms such as partnerships, clusters, stakeholder involvement and transparency and anti-corruption initiatives provide the basis for sustained economic cooperation.  54  

In this respect, the RIS3 ex-ante conditionality has helped in many regions to set an agenda for modern research and innovation institutions that can prioritise investments in research and innovation, in particular through its impact of the ex-ante conditionality is on the governance and on the behaviour of the stakeholders in the innovation systems while setting-up the RIS3.

The 6th Cohesion Report (European Commission 2014a) 55 summarises several channels through which poor governance limits the impact of cohesion policy on economic growth. In the first place, it can reduce expenditure if programmes fail to invest all the funding available. Secondly, it can lead to a less coherent or appropriate strategy for a country or region. Thirdly, it may lead to lower quality projects being selected for funding or to the best projects not applying for support at all. Fourthly, it may result in a lower leverage effect because the private sector is less willing to co-finance investment.

In 2013 Rodriguez Pose and Garcilazo (2013) used econometric tools to examine the impact of both the quality of government (measured by the European Quality of Government index) and EU Cohesion Policy expenditures on regional growth in the European Union in the period between 1996 and 2007 56 . They found that above a certain level of Cohesion Policy transfers, the quality of local government becomes a vital factor in determining the extent to which EU funds affect economic growth: the higher the quality of government, the greater the impact. In the regions with poor quality of government, greater level of cohesion expenditure can only lead to a marginal improvement of economic growth, unless the quality of government is significantly improved.

There is evidence that the capacity of a regional government in promoting public policies and minimising corruption is relevant for the effectiveness of strategies aimed at improving innovation. Regions with poor institutions can achieve significant gains in terms of innovative performance as a result of relatively small improvements in the quality of their governance systems. Good institutions, therefore, seem to be a significant pre-condition for the development of the innovative potential of regions and for making innovation strategies such as RIS3 work, especially in the periphery of Europe. 57

2.3.4 Changes induced by the RIS3 ex-ante conditionality

The ex-ante conditionality aims at improving performance of the innovation systems concerned through a partnership process requires behavioural changes of all partners and stakeholders involved. According to early evidence based on survey data, 58 the ex-ante conditionality on smart specialisation triggered the introduction of significant adaptations in the stakeholder involvement process (more than 60% of respondents).

Changes in the behaviour of administrations were achieved without imposing a unique model to be followed by all regions and Member States with substantial scope left for adaptation to local specificities. This resulted in clear differences in the way smart specialisation elements are articulated and implemented on the ground, revealing differences in the starting point of regions and Member States facing a new approach to innovation.

The majority of regions acknowledge that RIS3 has had a positive impact on their innovation policy governance, with better planning and impact orientation and more inter-departmental cooperation (e.g. among the research, education and industry ministries). 59

As a result of the action plans a number of Member States needed to make changes to fulfil the preconditions (for example, the need to involve national and regional bodies). There was a clear difference between Member States with an already established structured strategy and Member States with a weaker strategic framework. Many Member States or regions with a strong tradition in innovation adapted existing strategies. In contrast, EU13 Member States developed their regional (e.g. Poland) and national strategies according to the guidelines of the European Commission. This suggests that the introduction of the RIS3 ex-ante conditionality has significant potential for the improvement of the governance of national and regional innovation systems in many Member States.

2.4Early implementation and expected results

2.4.1Expected results

During the negotiations on their programmes, EU Member States and regions have developed over 120 RIS3 strategies establishing priorities for research and innovation investments in the programming period 2014-20. Throughout this period an amount of more than EUR 40 billion (and more than EUR 65 billion including national co-financing) will be allocated to regions through the European Regional Development Fund (ERDF). Overall, support to research, innovation and entrepreneurship is expected to help 15 000 enterprises to introduce new products to market, to support 140 000 start-ups and to create 350 000 new jobs by the end of the programme period 60 . In addition, around EUR 2.5 billion is focussed on clusters and business networks and EUR 1.8 billion have been programmed under the European Social Fund (ESF) for strengthening human capital in research, technological development and innovation.

The long-term impact of implementation of smart specialisation strategies in terms of increased innovation, job creation and improved productivity will require a number of years and will be examined as part of the ongoing and ex-post evaluation of Cohesion Policy programmes.

2.4.2Investment share in Research and Innovation (R&I) 61

The largest investments in research and innovation (R&I) in absolute terms are planned in Eastern and Southern Europe (ERDF, ESF), notably under the thematic objective (TO1) research and innovation. On average, 10.6% of ESIF are committed to R&I. As a share of total investments, planned investments in R&I are higher in Northern Europe.

Under TO1 the five largest planned investment categories are research and innovation processes in SMEs (including voucher schemes, process, design, service and social innovation) EUR 6.7 billion; Research and innovation infrastructure (public) EUR 6 billion; Technology transfer and university-enterprise cooperation primarily benefiting SMEs EUR 4.4 billion; Research and innovation activities in public research centres and centres of competence including networking EUR 4.2 billion and Research and innovation processes in large enterprises EUR 2.5 billion.

The Member States with the largest planned investments in absolute terms are Poland EUR 7.5 billion, followed by Spain 4.7 billion, Germany 3.8 billion, Italy 3.5 billion, Czech Republic 2.4 billion and Portugal 2.3 billion. The Member States with highest share of investment planned for TO1 are the Netherlands, with 32.1%, followed by Denmark (23.2%), Luxembourg (20.8%), Germany (20.6%) and Austria (19.8%).

Graph 7: Planned investments under TO1

Source: ESIF-viewer, visualising data for ERDF, ESF, CF and YEI, http://RIS3platform.jrc.ec.europa.eu/esif-viewer

2.4.3Thematic priorities of regions – Eye@RIS3

In RIS3 strategy documents, most regions and Member States have identified different combinations of broadly defined priorities. The RIS3 definition process identified a range of thematic priority areas for investments – e.g. health, climate, energy and industrial modernisation driven by key enabling technologies 62 , transport, mobility, creative economy, bio-economy 63  and much more. The identified areas have been found at the intersection of economic sectors, expected to develop faster, thanks to their novelty, diversity and innovation, as well as new marketing and organizational solutions. This could nonetheless also involve revamping traditional sectors by mixing them with new economic areas or focusing on their particular elements from a new viewpoint based on a specific advantage.

Graph 8: Ten most common categories of priorities

Source: Eye@RIS3 database, http://RIS3platform.jrc.ec.europa.eu/map

The Eye@RIS3 tool of the Smart Specialisation Platform provides detailed maps of regions according to thematic priorities, as illustrated below for energy.

Graph 9: Example Eye@RIS3 map of regions with energy related priority areas

Source: Eye@RIS3 database, http://RIS3platform.jrc.ec.europa.eu/map

2.4.4Selection of operations and expenditure declared in ESI Funds 

The European Regional Development Fund is the most important source of support for smart specialisation strategies in most regions.

By January 2017, the progress of implementation on the ground was picking up speed. The end-January indicator of project selection has reached 26% on average for all the European Regional Development Fund (ERDF) projects. When examining the thematic objectives (TO) that correspond to the eligible costs of projects selected, supports for smart specialisation (TO1 – EUR 16 billion) and for SMEs (TO3 – almost EUR 20 billion) are the most advanced fields approaching 40% of ERDF allocation.

Under TO1 – strengthening research and innovation: about one fifth of the EUR 16 billion eligible costs fall under the category of research and innovation processes in SMEs (cat.064). Together with technology transfer (cat. 062), activities in public research centres (cat.060), public infrastructure (cat.058), and processes in large enterprises (cat.002) about 75% of the overall eligible costs are covered. The eligible costs in selected projects are relatively evenly distributed across these four categories (in a range of EUR 1.9 billion to EUR 2.6 billion).

Under TO3 – enhancing support for SMEs: generic productive investment in SMEs (cat. 001) makes up almost half of the EUR 20 billion eligible cost in selected projects. Adding SME business development support (cat.064) and advanced support services to SMEs (cat.066) results in coverage of 80% of the expenditure of selected projects.

2.4.5Evidence on implementation through analysis of calls for projects 65

An ongoing study by European Commission (JRC) analysing the calls for projects launched under the ERDF Thematic Objective 1 “Strengthening research, technological development and innovation” in 2014-2016 in five Member States (Poland, Italy, Portugal, Hungary, Lithuania and Slovenia) reveals that the smart specialisation (RIS3) approach is being translated into practice and is playing a pivotal role in the implementation of ERDF innovation-linked measures within national and regional Operational Programmes. 66 In most of the examined calls, RIS3 alignment is a binding eligibility condition for R&I funding.

ERDF Operational Programs – Thematic Objective 1 (Research and Innovation): Number of RIS3-related calls (31 December 2016)

Source: Adaptation from Gianelle, C., F. Guzzo, and K. Mieszkowski (2017), Smart Specialisation at work: Analysis of the calls launched under ERDF Operational Programmes, JRC Technical Report, forthcoming.

Nearly all ERDF resources made available through the calls support project proposals falling exclusively within RIS3 priority areas.

ERDF - Thematic Objective 1 (Research and Innovation): Funding allocated through RIS3-related calls (31 December 2016)

Source: Gianelle, C., F. Guzzo, and K. Mieszkowski (2017), Smart Specialisation at work: Analysis of the calls launched under ERDF Operational Programmes, JRC Technical Report, forthcoming.

The study also shows the existence of "spill-overs" of smart specialisation into other policy areas, in particular SMEs competitiveness, access and use of ICT, shift towards a low-carbon economy, and education and training. There exist calls embracing different policy instruments which support integrated project proposals falling within RIS3 priorities areas. The study shows that the most common category of beneficiaries is consortia of enterprises and research organisations. Together with three other categories - single (large, small and medium sized) enterprises - consortia of enterprises, and consortia of SMEs, they are generally the beneficiaries of calls aiming to support R&I projects.

2.4.6The establishment of the S3Platform

One of the main achievements of the smart specialisation approach has been the establishment of a community of practice for design and implementation of smart specialisation strategies. To assist Member States and regions in the process of developing, implementing and reviewing their smart specialisation strategies, the Commission set up the Smart Specialisation Platform (S3 Platform) in 2011. Its objective has been to provide information, methodologies, expertise and advice to national and regional authorities as well as to promote mutual learning and trans-national cooperation. It has around 200 members in total including 18 EU Member States and two non-EU countries, as well 170 EU and nine non-EU regions.

The S3 platform 67 has developed a number of tools 68 to encourage and support stakeholder interaction in RIS3, such as online matchmaking tools, peer review exchanges and learning workshops, giving interested parties a solid basis on which to interact with each other. It is clear, however, that an insufficient level of development of innovation environment is hampering the participation of some Member States and regions, especially from the EU-13 69 , and limiting cooperation with more developed regions from the “old” Member States.

Smart specialisation cooperation actively involves a wide variety of stakeholders — national and regional authorities, universities, research institutions, business and civil society — and therefore brings significant opportunities to exploit synergies, facilitate the transfer of knowledge and capabilities and develop new ideas. A transnational perspective enables Member States and regions to evaluate their competitive position with regard to others, obtain the necessary research capacity or overcome a lack of critical mass.

Graph 10: Registered Member States and regions in the RIS3 Platform    

Source: RIS3 Platform, available at http://RIS3platform.jrc.ec.europa.eu/RIS3-platform-registered-regions

2.4.7Influence on national and regional systems

There is a range of evidence which shows how smart specialisation strategies have influenced national and regional innovation systems.

2.4.7.1Governance and institutional changes

New practices in public administrations have emerged at national, regional and local level with regard to innovation policy-making. The RIS3 approach has brought about significant structural and institutional changes in regional governance, triggering or strengthening inter alia, interdepartmental cooperation, participative and inclusive governance, more transparent and efficient monitoring mechanism.

In the public consultation 92% of respondents replied that they think they should be more involved in the design and/or implementation of S3 challenging existing innovation governance structures. The respondents have been asked also which other organisation should be in their opinion more/better involved in the design or implementation of R&I support in their country / region. Most respondents see a need to involve enterprises (55% for medium-sized enterprises, 46%, for large and 43% for small and micro-enterprises) more in the implementation or research and innovation support. More involvement of SME intermediaries such as cluster organisations and Higher Education Institutions (43% each) is also seen as important.

A recent survey shows that the EU’s new cohesion policy has led many regions and Member States to change their behaviour with regard to collaboration on R&I policy 71 . The main barriers to collaboration seem to be inter-related and include lack of resources, insufficient political commitment, insufficient engagement of regional stakeholders and unclear objectives. One interpretation is that it is challenging to communicate clearly to stakeholders and politicians the outcomes of interventions, with the result that stakeholders are unwilling commit or mobilise resources. Innovation policy interventions quite often support activities that provide indirect and dynamic benefits that are not easily measured, divisible or attributable to individual actors or activities.

2.4.7.2The Entrepreneurial Discovery Process

The Entrepreneurial Discovery Process (EDP) is an inclusive and interactive bottom-up process in which stakeholders from different environments — governance, firms, higher education institutions and civil society — gather on a regular basis to explore and select the domains of R&I in which regions are likely to excel, given their existing capabilities and productive assets. The EDP pursues the integration of entrepreneurial knowledge, fragmented and distributed over many sites and organisations, through the building of connections and partnerships.

Stakeholder interaction has proved conducive to opening up new market and technological opportunities, as well as informing governments’ policy and decision-making processes. The EDP approach facilitates the setting-up of public-private partnership and larger-scale projects. Thus, the smart specialisation concept has become an influential instrument for place-based innovation-driven growth.

Almost all regional policymakers who recently took part in a survey judged the entrepreneurial discovery process to have been effective in identifying investment priorities for regional development. There is a high level of satisfaction with the EDP and its ability to engage stakeholders, increase trust among stakeholders and towards the public sector and to inform policymaking. The way in which the outcomes of the EDP have been embedded in the policy process varies between regions, with some considering it as mandatory and some seeing it as optional.

2.4.7.3Monitoring 

Through smart specialisation, European regions and Member States have designed a set of result-oriented policy actions, whose capacity to meet the strategic objectives need to be monitored closely. A substantial effort has been made to extend monitoring activities in order to integrate a range of strategic functions with the goal of better informing the decision-making process and keeping stakeholders engaged 72 .

2.4.7.4Economic transformation, new technological and market opportunities

The RIS3 logic has facilitated a reflection on the economic transformation of a wide range of regions. It promotes locally driven knowledge-based growth while breaking down silos between research and economic development. 73 In addition, a continuous entrepreneurial discovery process fosters cross-sectoral working practices and the emergence of clusters as a practical instrument for encouraging stakeholder commitment and collaboration. A shift towards a demand-oriented R&I policy approach is taking place, thus furthering private co-financing leverage.

2.4.7.5Behavioural changes in universities and research centres

Smart specialisation gives a leading role to universities 74 as actors in their local innovation ecosystems, connecting global and local knowledge domains, and arguably gives them far more prominence than it has been the case under previous structural funding programmes. Universities have started to play an increasingly important role in the design and implementation of regional RIS3, and a much broader role than merely generators of technological research and other ‘upstream’ activities. There remains though scope to better translate the presence of excellent universities and research centres into benefits for local businesses and the local economy.

The public consultation responses confirm that over the past 3 years thanks to the S3 the interactions between the different stakeholders in the innovation eco-systems (including universities and research centers) has improved significantly.

In more detail, the implementers of innovation noted a significant increase in cooperation with Higher Education Institutions (HEI) (76%), followed by more cooperation with clusters or business associations (66%) and consultancy firms (64%).

2.4.7.6Cooperation

Outward-looking specialisation (RIS3) emphasises the identification of niches, clusters of related industries, cross-sectoral innovation, value chain linkages and the solving of societal challenges to find a region’s potential advantages in international markets, and to identify partners to help deliver new solutions and solve common challenges. This is the case not only for industry and academia, but also for regional policymakers who need to engage in interregional collaboration processes. 76

According to the public consultation results, 59 % of respondents have been directly involved or observed concrete, strategic interregional cooperation between their region and other regions that have similar or related S3 priorities. Moreover, a large majority (86 %) of the respondents confirmed that developing interregional cooperation in the framework of smart specialisation is important.

2.4.7.7International recognition of Smart Specialisation

Smart specialisation is also now attracting the attention of countries outside Europe. Smart specialisation has therefore been recognised by international organisations such as OECD, 78 the World Bank 79 and the United Nations Economic Committee. 80  At the European level, the Proposal for a New European Consensus on Development (Our World, our Dignity, our Future) 81 and the External Investment Plan (EIP) 82 , the Digital for Development (D4D) initiative, together with the support of further public sector's investments in R&I capacity in developing countries to unlock private sector investments will help to drive economic and social development internationally.

The regulation outlining pre-accession funding identifies smart specialisation as a thematic priority for helping enlargement Member States. In a recent Joint Staff working document for the Eastern Partnership 83 , the European Commission and the representatives of the six partner member states agreed to having at least one partner government commit to starting a full-fledged RIS3 process in 2017 and formally adopting a new innovation strategy by 2020.

In the Western Balkans, Asia and Latin America, many countries have expressed their interest in learning from and exchanging knowledge with European counterparts that are successfully implementing smart specialisation strategies. 84 , 85  

Exchanges with Latin America are an example of the positive results generated by the sharing of EU regional innovation programmes, mostly in the thematic areas of agri-food and energy. Argentina, Brazil, Chile, Colombia, Mexico, and Peru have established bilateral agreements with the EU to elaborate, implement, and manage urban and regional policies for innovation, which are mostly under implementation phases at the moment. This experience will be capitalised on under the European Union’s new International Urban Cooperation programme, 2016-2019, which, in the Latin American sphere, will mobilise policymakers and other regional actors to promote innovation, working closely with EU regional counterparts in a multi-stakeholder context where the business sector is expected to play a major part, thus generating new opportunities on both sides. 86

2.4.8Overall assessment of achievements

Smart specialisation has contributed to the quality of investment in innovation and entrepreneurship under cohesion policy. In terms of key Commission priorities such as creating jobs, growth and investments, smart specialisation has been central in:

·Mobilising investments of EUR 65,8 billion, where EUR 43,7 billion is from the EU budget and the rest are national contributions;

·Supporting investments where the needs have been developed through a bottom-up process of priority selection;

·Creating an investment friendly environment through an intensive dialogue of innovation stakeholders in the local context;

·Addressing priorities of the Digital Single Market, Energy Union, the Circular Economy and the single market through technological and non-technological investments in innovation.

One of the main achievements of RIS3 approach has been the establishment of a community of practice 88 for the design and implementation of smart specialisation strategies. This has been made possible on the basis of the RIS3 'ex ante conditionality'.

The public survey results 89 indicate that for 59% of the respondents the S3 process had an important impact on the quality and range of R&I support to their work over the last three years. The respondents from North-Western EU countries perceived a bigger impact (65%) than those from Mediterranean countries (56%). The majority of respondents from Central and Eastern European countries noted an impact of S3 in the past three years (but it needs to be noted that 21 of the 25 respondents come from Poland, i.e. this trend might not be generalised yet).

The effort to concentrate resources on limited number of priorities has changed the perception and the mind-set of key innovation actors, including businesses and researchers, encouraging them to focus on their capacities and develop a tailored policy mix that is relevant for specific priorities rather than repeating support for generic capabilities and research infrastructure. It has involved more decentralisation in R&I policymaking and greater use of the public-private partnership approach.

Regional innovation actors have become better connected since national and regional authorities were required to involve businesses, researchers and civil society to identify the unique competitive advantages of a region – as also shown by the results of the public consultation (see Section 2.1.4). Innovation actors from different fields were often not connected at cross-sections of technological, sectoral, or geographical strengths. 90

In addition, regions have become more outward-looking in their approach to research, innovation and enterprise. They are now more able to cooperate with others since their complementary strengths are now clear. This cooperation is making it easier to build critical mass and to make their RIS3 investments more cost-effective. This has encouraged a wider EU-level perspective to be considered. 91

Regarding impact, there are now also more robust performance frameworks in place, with methodologies developed to capture the results and impacts of innovation-led development. New approaches to improve the implementation of RIS3 concepts include constant feedback loops of diagnostic monitoring (problem solving) and systematic learning-by-doing at project and policy level.

2.4.8.1Weaknesses and areas for improvement

More efforts are still needed as regards the choice of priorities and keeping a structured interaction between researchers, businesses and civil society going. The choice and design of policy tools for implementation of the RIS3 - and the monitoring systems - still need attention in many regions to make them fit for delivering on the RIS3 priorities and objectives. There are also challenges in less-developed regions to build institutional and legal environment conducive to innovation and join international networks and value chains. The need to reinforce trans-border cooperation is one of the clearest challenges of all RIS3 work. Effective engagement of regions in interregional collaboration remains limited.

In addition, global challenges and new political priorities such as COP21, SDGs, the circular economy or bioeconomy create opportunities for new research, but also social and business model innovation and new value chains. These can build on local natural capital, such as unexploited biomass resources, using side-streams or wastes in the agri-food sector for bio-based products or producing textiles from wood cellulose. These opportunities have been identified and recognised by many EU regions. 92

It is important to further broaden the scope of actors and topics involved in the interactions at the local level. These are still too focused on purely research and technology oriented debates and led by universities and research organisations rather than local business firms. Civil society organisations are underrepresented. If intermediaries such as clusters are absent, discussions should be encouraged directly between research actors and firms. There is a risk that, when the process is anchored at the political level or covers a large territory, it will tend towards political negotiation rather than towards open-ended processes of joint discovery. 93

The process which led to fulfil the conditionality made it evident that some preconditions are necessary to put smart specialisation in place: 94  

·Leadership is necessary to embed design and implementation of smart specialisation in the overall policy making of the region. This requires a strong commitment to mobilise innovation actors around common vision of regional economic development. The vision making and facilitation of interactions should not finish once the strategy has been adopted. Interactions with a large variety of actors should be a process that continues throughout implementation and leads to concrete action i.e. investments or an adjusted policy mix.

·An enabling public administration at all government levels is crucial in order to harvest the knowledge and information generated through the process of interactions between innovation actors. The public sector needs to have the soft skills of collaboration, leadership, team working as well as the ability to translate received feedback into an effective policy mix that takes into account the local institutional, legal and political context.

·Real and continuous interactive process (so called Entrepreneurial Discovery) between businesses, universities, research centres, wider groups representing civil society that allows market forces and the private sector to discover and produce information about new activities.

·Modern role of government changing towards providing the right conditions to empower key actors to contribute to the strategic development of the region. Policy and investment decisions should therefore evolve through interactions with and between entrepreneurs (e.g. business people, researchers and social activists) and local citizens. In particular, the government needs to be much more engaged in helping design and develop the collaborative (investment) projects that represent the realisation of the entrepreneurial discovery process.

·Openness to the external world is essential in the global economy. Innovation networks call for a regional and innovation policy that goes beyond regional and national borders and which is not reluctant to be benchmarked and cooperate with others.

·Transparent monitoring mechanisms - besides the legal obligations - should be understood as a management tool for the strategy. Good monitoring system helps public authorities to properly implement and react promptly to inappropriate deviations.

However, in order to maximise the role of smart specialisation to contribute to Europe's innovation potential in the context of globalisation, it is necessary to examine the broader policy framework in which it operates. This issue is addressed in the next section.

3Key challenges and next steps: boosting innovation-led growth

In order to promote growth at regional level, target new sources of investment in innovative sectors and increase the competitiveness of European regions at a global level, the following four challenges need to be addressed:

·Further reform of the regional and innovation systems;

·Increase cooperation in innovation investment across regions;

·Leveraging research and innovation in less developed and industrial transition regions;

·Harnessing synergies and complementarities between EU policies and instruments.

3.1Further reform of research and innovation systems

3.1.1The contribution of research and innovation to EU economy and productivity growth

The importance of productivity as a key driver of sustained economic growth and consolidation of the recovery in Europe has been identified by several studies, such as 'The Future of Productivity’by the OECD. 95 Labour productivity in the EU is around 15 percent lower than in the United States and this gap has increased in recent years.

Graph 11: The real labour productivity gap (GDP per hour worked) between EU Member States and the United States, 2014

This labour productivity gap stems in particular from under-performing labour-intensive services 96 which highlights the important of both advanced technologies and service innovation. 97 While many factors drive multifactor productivity, for most advanced economies innovation and innovation-related investments in R&D, ICT and skills development are crucial. These processes are affected by different factors that can range from the functioning of the institutional set-up, the abundance and quality of the infrastructure network or the functioning of the markets that allow for an efficient allocation of resources to more productive activities.

3.1.2The need for reform

Structural reforms and better regulatory and institutional frameworks are essential to improve competitiveness and the sustainability of growth through increased productivity in all Member States. While it is always difficult to properly measure complex phenomena such as innovation, the relationship between private R&D investment, as a crude proxy of innovation capacity, and multifactor productivity growth shows a positive relationship. 98

Graph 12: Business R&D intensity, 1995 versus average annual growth in multifactor productivity, 1995-2007

RIS3 aims at a better and smarter targeting of public investment in R&I through a focus on regional strengths and opportunities. An innovation strategy should focus on the barriers to innovation (regulation) and the needed support systems (investment in R&D, support for technology transfer and STEM education) that can spur more innovation in all three major sectors of an economy (for profit, non-profit and government). 99 Efficient implementation of these strategies, however, requires well-functioning regional and national R&I systems. In this respect, the European Semester process clearly shows that further progress needs to be made. While the situation differs from one Member State to another, three cross-cutting issues require particular attention: the quality of public research, public private cooperation and the business environment for R&I. RIS3 is an integral element of the Commission's analysis of R&I policies in the context of the European Semester and as a consequence is reflected in the European Semester Member State Reports and in some of the Country Specific Recommendations.

The overwhelming majority of public research in Europe is financed and governed through 27 national systems (and regional ones below) which vary considerably in scale and overall quality. According to the ERA Expert Group 100 there are systemic characteristics and consequences arising from the multi-centred and multi-level governance of research and innovation, such as:

·Barriers to researcher mobility inhibiting career opportunities;

·Difficulty in establishing cross-border academic-industrial partnerships;

·Duplication of funding between national/regional programmes dispersing resources,

·Lack of European perspective and transnational coherence in reforms undertaken at national level;

·Diminished attractiveness as a location for business R&D investment.

This leads to inadequate selection mechanisms and incentives to improve efficiency, effectiveness and learning capability. Such system-failures are at the level of governance of research, implying a lack of coordination and/or cooperation among innovation support institutions. 101

The Horizon 2020 Policy Support Facility (PSF) further supports Member States in the design, implementation and evaluation of structural R&I policy reforms. Issues linked to the implementation of RIS3 have been explicitly addressed in the context of several PSF projects such as the Peer Reviews of Hungary and Bulgaria and they will be further examined by the PSF Mutual Learning Exercise (MLE) on "National practices in Widening Participation and Strengthening Synergies" which will be launched in autumn 2017. The MLE will include exchanges of national practice at the operational level in relation to how to best support national participation in EU Framework programmes and use ESIF and exploit synergies at the national level to build up a knowledge economy.

The Regional Innovation Monitor project 102 , launched in 2010, monitors Research & Innovation policy in EU regions with special focus on industrial aspects. An online repository was regularly updated to provide an easy access and comparative overview of relevant regional support measures and strategies, policy documents and organisations. Standardised baseline regional profiles give user a quick overview of the socio-economic situation, research and innovation performance, innovation governance, policy trends and advanced manufacturing-related activities.

The tools of the European Observatory 103 for Clusters and Industrial Change – which is continuing the work of the previous European Cluster Observatory – can further help regions and Member States in setting evidence-based priorities. For instance, the Observatory provides an overview of regional strength for specialisation areas by providing a sectoral and cross-sectoral cluster mapping through its cluster mapping tool 104 and European Cluster Panorama, which reveal concentrations of economic activities for 51 traditional sectoral cluster categories and for 10 emerging industries that represent cross-sectoral cluster categories.

3.1.3Higher education and VET in smart specialisation

Support to reforms can be increased through more emphasis on skills and education in RIS3 processes. This is the second most important element among respondents highlighted by stakeholders in the consultation. Education is a high priority, in particular for less developed regions.

However, a recent Fraunhofer survey 106 underlines that universities are perceived as focusing on their traditional remit of knowledge and talent providers as well as research organisers. Their role as entrepreneurial drivers of collaboration or platforms connecting the region to external knowledge sources is rather limited or, at least, rare except in the Nordic Member States and to a lesser extent, parts of the UK and Eastern Europe. Furthermore, the survey shows that universities' role as entrepreneurial drivers of collaborations is stronger where institutional settings are inclusive. The more the processes of consultation are anchored in the political hierarchy, the larger the average size of the territory they cover, the more dominant role they hold. It appears that the potential role of universities to build innovation capabilities in Southern, Central and South-Eastern Member States is weaker.

Graph 13: Perceived role of universities in EDP:

Source: Fraunhofer Survey, DG REGIO.

Traditionally innovation has been seen as a result of R&D activities carried out by highly qualified staff and thus a domain of higher education rather than vocational education and training (VET). However, there are at least three reasons why high quality VET is relevant to supporting innovation:

·Technological and process innovations can be absorbed by businesses provided that employees at all levels of the production chain have the required skills;

·Given that the majority of European companies (including small enterprises) are involved in global value chains, constant innovation and efficiency are a must to ensure competitiveness in a global context. That has implications for skills and work organisation practices; and

·Innovation cannot be limited to high tech industries – it also takes place in low-tech industries which account for a large share of employment in Europe.

Investment in training is also an investment in innovation, since many technical changes results from incremental innovations made by skilled workers and engineers on the factory floor. 107 However, the potential of VET to support or even drive competitiveness, innovation and growth policies has largely been neglected in education and training policies in many countries, in particular when compared with the role attributed to the higher education sector. Countries like Austria, Denmark, Germany and the Netherlands exemplify the importance of combined strategies where VET and higher education are seen as complementary and where one cannot be developed without the support of the other. Policy makers need to integrate the VET offer into comprehensive skills and knowledge-based economic development strategies, particularly at regional and local level.  108 This is related mainly to strategies to attract investments, to clusters, innovation, smart specialisation strategies and sustainable growth strategies. 109

Transversal competences like creativity, sense of initiative and entrepreneurship are vital for innovation to reach the market. Entrepreneurship skills and attitudes should therefore be fostered in students and researchers to develop their proactivity, flexibility, autonomy, the capacity to manage projects and achieve results. Furthermore, entrepreneurship programmes provide an excellent opportunity to connect the education systems to the local economy and gives incentives for students to remain in a region. Structural Funds (in particular the ESF and the ERDF) have an important role to play in supporting concrete projects aiming to enhance the entrepreneurial mind-sets, skills and attitudes. 111

European initiatives such as the "Blueprint for Sectoral Cooperation on Skills" 112 and the Digital Skills and Jobs Coalition included in the New Skills Agenda for Europe 113 , help in responding to the lack of synergies between quadruple helix actors and in developing concrete actions to satisfy short and medium-term skills needs to support innovation strategy within Member States.

Furthermore, smart specialisation cannot be isolated from social innovation. Promoting social innovation within European societies and, more specifically, in social policies, entails, the combination of skills, business cultures and public services to offer innovative responses (instead of focussing only on business products). 114

3.2Increasing cooperation in innovation investment across regions

3.2.1Rationale for transnational, interregional, cross-border cooperation

Regions play an important role in creating the conditions to attract private sector investment in innovation and for businesses to seize opportunities in new, often global value chains. Interregional and macro-regional cooperation can help to exploit complementarities to build EU-wide value-chains and encourage the alignment of investment between the private and public sector.

There is a large untapped potential for more joint interregional actions with the corresponding national and regional policies as also illustrated by the Vanguard Initiative 115   and the strong support expressed in the recent public consultation. For instance, the BLUEMED initiative intends to promote joint actions of relevant research and innovation priorities within the maritime sector in order to maximise the leverage effects of the research investments from both private and public sectors.

Internationalisation can also help to solve mismatches between the functional system for innovation and regional/national innovation systems, when the former cross borders. 117 Promotion and facilitation of innovation across borders, connecting smart specialisation growth investments therefore has significant potential. Smart Specialisation based on transnational cooperation begins within a region/country by exploiting place-based expertise and industrial skills within the regional innovation eco-system. Regional innovation eco-systems could be further strengthened through transnational learning and training and collaboration. 118

3.2.2Addressing fragmentation and creating innovation investments in value chains

Potential spill-overs and complementarities are underexploited because of the fragmented nature of national and regional innovation systems across the EU. At present, it is considered that there is no evidence of knowledge spill-overs beyond 200 kilometres from the agglomeration of origin 119 . The active engagement of Member States and regions is therefore essential in order to overcome this fragmentation.

Fragmentation burdens the knowledge flows and the strategic alignment in the European research and innovation space. Smart specialisation can help reduce fragmentation through the organisation of open innovation process – the entrepreneurial discovery process - across borders, to promote cooperation to exploit knowledge spillovers and capitalise on complementarities. Smart specialisation provides a basis to develop co-investments in value chains in complementary assets and increasing technology spill-overs. 124

Smart Specialisation encourages a bottom-up coordination of innovation investments by developing new mechanisms for strategic alignment and connecting investment decisions, and is mobilising resources for innovation all over Europe for common challenges and the creation of common futures. 129   Strengthening interregional linkages between regional ecosystems along smart specialisation priority areas is particularly important for less developed regions and Member States in Central and Eastern Europe, which have been highly dependent on foreign direct investment to drive productivity growth. Moreover, there is a need to increase the exposure of regional actors to international innovation networks to encourage knowledge diffusion.

Regional innovation systems can create innovation potential but lack often the critical scale to impact the emergence of new value chains. New European value chains can emerge from better connecting investments across specialised clusters that belong to these regional and national innovation systems.

3.2.3RIS3 in European Territorial Cooperation 

Smart specialisation can help regions to develop links and cooperation beyond regional and national borders to tackle common challenges. Such cooperation across borders is currently facilitated via the European Territorial Cooperation (ETC) programmes and through the four existing macro-regional strategies, which created partnerships between innovation actors around various themes: "Smart specialisation strategies have been used to drive a more effective innovation policy and push interregional cooperation in new value chains across borders." 132

Territorial cooperation in cohesion policy is shaped mostly through three strands of programmes for cooperation: cross-border (Interreg A), transnational (in 15 programme zones: Interreg B) and interregional (Interreg Europe). The impact of Interreg projects on the innovation system can be significant because these are often explorative, beyond the traditional areas in the main programmes. A good example of the strategic impact of Interreg is "Bio-based Europe" which has developed now as an important technology centre for industrial biotech in Flanders and beyond. It was started with an Interreg A cooperation project between Flanders and Netherlands, alongside the Strategic Research Centre for Biotech in Flanders that is focussed on life sciences.

3.2.4Macro-regional strategies

A ‘macro-regional strategy’ is an integrated framework endorsed by the European Council to address common challenges faced by several Member States and third Member States located in the same geographical area, which thereby can benefit from strengthened cooperation contributing to the achievement of economic, social and territorial cohesion. So far the EU adopted four macro-regional strategies across Europe: the EU Strategy for the Baltic Sea Region, the EU Strategy for the Danube Region, the EU Strategy for the Adriatic and Ionian Region , the EU Strategy for the Alpine Region. These strategies rely on a coordinated approach and synergy effects through: optimal use of existing financial sources, better implementation of existing legislation, and better use of existing institutions. No extra money is involved.

Another example is the Danube Innovation Partnership gathering stakeholders in the innovation value chain of the Danube region into a partnership that will design and implement actions to accelerate innovation and technology transfer. 135

The feedback from potential applicants and other stakeholders shows that financing by the transnational cooperation programmes is in their view the most efficient way of ensuring that the implementation of smart specialisation strategies achieves the critical mass in the specific topics like e.g. blue growth or clean energy. It fosters going beyond the regional and national context of the strategies. Other financing means are not particularly designed to support this type of cooperation and pose many obstacles for working towards common goals. 

Other important territorial strategies are the Sea-Basin strategies 136 . Smart specialisation helps to align the efforts for cooperation between sea-basin regions in Blue Growth areas. For example, the macro-regional marine  research initiatives in the Atlantic (Atlantic Ocean Research Alliance 137 ), Mediterranean (BLUEMED 138 ) and Baltic (BONUS 139 ) will contribute to foster the sustainability of blue growth and the development of best strategies and smart specialisation by delivering a new knowledge base for appraising the socio-economic value of different marine ecosystem services, provide innovative tools for comprehensive planning and management of maritime activities and mitigate the trade-offs among different uses and blue economy sectors.

The Urban Agenda for the EU 140 , the Habitat III New Urban Agenda 141 and Sustainable Development Goal 11 142 also offers an important opportunity to reinforce European networks between cities sharing common challenges through using their specific agglomeration dynamics. Cities are actors of innovation and real life demonstrators of specific solutions they are best at to develop. This is in particular the case for the Horizon 2020 Smart and Sustainable Cities demonstration projects. Smart and Sustainable Cities therefore are important actors in smart specialisation strategies.

3.2.5European-level support for smart specialisation investment across borders

The Horizon 2020 regulation foresees the possibility to develop close interactions with the European Structural and Investment Funds, which specifically help to strengthen local, regional and national research and innovation capabilities, particularly in the context of smart specialisation strategies. 145

In addition, a number of European mechanisms for interregional cooperation exist that are supportive for the alignment of smart specialisation investment across borders:

3.2.6Thematic Smart Specialisation Platforms

The Commission has responded to the increasing interest of regions to work together by establishing three thematic smart specialisation platforms (TSSP) on energy, agri-food and industrial modernisation which have been created under the S3 Platform to facilitate cooperation and joint actions in the implementation of RIS3 areas across EU. The TSSPs emerged in the period 2015-16. The TSSP Industrial Modernisation and the TSSP Agri-Food were launched at the Smart Regions Conference of 1-2 June 2016 - the TSSP Energy was officially announced a year earlier. The initiation of the TSSPs by the European Commission was coupled with a call for expression of interest to organise partnerships of regions, cooperating in specific sub-domains. In less than a year, number of partnerships is approaching to 20 with around 100 regions joined one of the three Platforms. 158  

The focus on smart specialisation investment differentiates these partnerships from other forms of European interregional cooperation. They are not just another research network or another policy learning network but have a strong business investment orientation to achieve economic impact. The objective is thus not only to support policy learning across borders but to support EU regions that are committed to develop industrial investment projects on shared smart specialisation areas through strategic interregional cooperation.

Graph 14: Regions involved in Thematic Smart Specialisation Platforms (May 2017)

Regions that participate in 5 or more partnerships are indicated in full black colour, those that participate in 2-4 partnerships are indicated with a square patterns, while regions that participate in 1 partnership are indicated by horizontal wave lines.

Source: European Commission, JRC

The Smart Specialisation Platform for Industrial Modernisation (S3P-Industry Modernisation) 159  follows a dual approach to facilitate strategic interregional collaboration and industry involvement.It aims to generate interregional RIS3 partnerships of committed regional authorities as well as corresponding partnerships of cluster organisations (as specialised SME intermediaries) and technology centres. Moreover, a call for the expression of interest for European Strategic Cluster Partnerships for smart specialisation investments (ESCP-S3) 160 to facilitate the partnering has been launched. A call for proposals with a budget of 2.8 million EUR will be published under the COSME programme in the second half of 2017 dedicated to industrial modernisation. 161

Graph 15: The dual approach of the Smart Specialisation Platform for Industrial Modernisation

3.2.7RIS3 and the link to Digital Innovation Hubs and other innovation infrastructures

The European Commission launched on 19 April 2016 the first industry-related initiative of the Digital Single Market package: Digitising European Industry. 162 One of the main actions is to promote a pan-European network of regional digital innovation hubs. Digital innovation hubs are defined as ecosystems that consist of SMEs, large industries, start-ups, researchers, accelerators, and investors. One of the core elements of a digital innovation hub are competence centres that offer infrastructure and services for testing and demonstrating new digital solutions. 163 Digital Innovation Hubs should be differentiated towards the needs of local economies and positions in European value chains. A pan-European network of digital innovation hubs can also offer opportunities to give SMEs access to more specialised services across borders.

In order to maximize the impact on innovation and businesses, digital innovation hubs should foster synergies with other advanced technologies such as key enabling technologies (e.g. sustainable manufacturing technologies, advanced materials, industrial biotech, nanotech). Businesses should be guided to the right competence centre with the relevant expertise in digital, other advanced technologies or their combination corresponding to the innovation development needs of businesses.

The European Commission is conducting inventories of innovation infrastructures (digital innovation hubs, technology centres with expertise in key enabling technologies 164 , pilot lines etc.), which will be connected with the Smart Specialisation Platform for Industrial Modernisation. As a result of these combined efforts the European Commission will be able to offer for the first time a comprehensive overview of a considerable part of innovation infrastructure that is available as shared infrastructure throughout the EU.

Further efforts are needed to open-up innovation infrastructures at pan-European level. R&I infrastructures relying on national/regional public support often work with own national/regional actors. Since these infrastructures are unevenly spread across Europe, the majority of European SMEs are not likely to find the knowledge and services they need for their specific innovation needs. On the other hand, some regions have state-of-the art testing facilities but these are underexploited due to the lack of demand from own regional actors. A comprehensive multi-level (EU, national, regional) approach is needed to ensure pan-European access for actors to R&I infrastructures. Finally, synergies with the Connecting Europe Facility (CEF) programme aiming at providing infrastructure deployment in transport, energy and digital sector should also be found.

3.2.8Maturity of mechanisms to support investment in innovation across borders:

Innovation policy has become more outward looking to co-develop solutions that go beyond the capacity of regional and national innovation systems. 165 Industrial leadership in Key Enabling Technologies (KETs) needs to develop full complementarities between lead-regions in KETs and lead-regions in specific application domains. 166 This includes identification of best practices and successful test-beds for regional upscaling to innovation and replicability of the model to other regions.

The challenge is to cope with a growing complexity of interdependent actors and decisions operating at different levels and in different places. This is reflected in a multiplicity of financing sources, often based on different rules such as state aid, taxation, eligibility, different objectives (ESIF, Horizon 2020, national, private etc.) and different time-lines. The integration of EU support with private sector investment decisions is hampered by the fragmentation of programmes and calls.

In conclusion, early results in implementation indicate a strong demand from regions. A vast majority (86%) of the respondents to the public consultation identified the need for the EU to “develop interregional cooperation regarding smart specialisation”. Furthermore, close to one fifth (18%) of the respondents highlighted that they face “difficulties to identify other regions with similar or related strategies”. However, there remains a need to simplify national and ESI fund procedures for programmes to better support interregional projects 169  and to facilitate collaboration with the existing broad range of platforms and initiatives at EU level.

3.3Leveraging research and innovation in less developed and industrial transition regions

Both the development process for smart specialization strategies and their content is determined by the level of development of the socio-economic structures, the innovation systems, 170 the business and entrepreneurial composition as well as of the institutional and administrative arrangements in the Member States and regions. These conditions vary substantially across the regions. The process towards the formation of smart specialisation strategies in regions and Member States with a weak innovation or entrepreneurial legacy was substantially different to the one in regions which have a history of excellence at European level on innovation and business competitiveness; the strategy development has followed different paths and methodology across regions, and it can be concluded there is no “one-size-fits-all” model. 171  

3.3.1Tailoring through RIS3 leads to address specific bottlenecks in less developed regions 

Promoting innovation and competitiveness through RIS3 strategies is a significant challenge for low-income or low-growth regions with weak institutional structures. They require specific attention with regards to human capital, skills development and the role of higher education institutions and VET providers, as well as to natural capital. Both universities and providers of vocational training have a strategic role to play in these innovation ecosystems. More generally, innovation actors in less developed regions are often not very well connected to a wider research and innovation community and global value chains. This results in duplication of research efforts and barriers to cooperation.

Targeted support to overcome these bottlenecks can facilitate the implementation of RIS3. The policy action dashboard of the Regional Ecosystem Scoreboard of the European Cluster Observatory offers a tool that identifies bottlenecks that may be particularly promising to address by policy actions.  172

Outcomes to date of the ongoing project "Targeted RIS3 support to lagging regions" and of the finalised project on "Targeted RIS3 support to Eastern Macedonia and Thrace" indicate an increased understanding of RIS3 and the concept of entrepreneurial discovery, the importance of building continuously trust and a culture of collaboration through a focus on concrete results, the need for a good coordination between national and regional stakeholders, as well as for a focus on concrete results in the short term. Both projects also show that lagging regions can take a leading role in aspects related to RIS3, as shown by the leading role of Eastern Macedonia for Greece in implementing RIS3 for the whole of Greece, and by the RIS3 Monitoring Working Group, in which lagging regions jointly develop a hands-on approach to RIS3 monitoring, which will serve as a basis for other regions.

A majority of the lagging regions participating in the pilot programme have limited capacity to implement RIS3 activities that go beyond the use of ERDF funds. Under the EP preparatory action for targeted RIS3 support in Eastern Macedonia and Thrace, a RDI funding guide 174 , as well as a number of case studies for combined funding or projects have been elaborated to facilitate the use of different funds. An important condition for leveraging ERDF funds with other funds for RIS3 appears to be the existence of RIS3 teams at regional level dedicated to RIS3 implementation (and not only to ERDF implementation).

Benchmarking 175 can facilitate policy learning by helping regional policy makers to identify other similar regions as reference peers facing similar structural opportunities and constraints. More specifically, benchmarking with structurally similar regions facilitates the understanding of what policy practices could and should be transferred and replicated or rather avoided. It is also the first (necessary) step towards explaining varying growth paths of similar territories.

Policy practice can be substantially enhanced across regions by improving the flow of information and transfer of knowledge concerning actual objectives, strategies, plans, interventions and specific measures designed and implemented in different territories by different policy authorities. This is especially true in a context of scarcity of resources, like the one faced currently by most local and regional administrations in the European Union. Such constraints do not give much room for autonomously experimenting with different policy measures. This is why it is of utmost importance to draw the right lessons from other regions and share past experience.

3.3.2Mutual learning on design and implementation

Europe's diversity means that productivity gains from innovation can be reaped in many specialisation areas. Identifying and deploying this potential can be challenging, even in more developed regions. Support mechanisms and platforms for mutual learning were therefore instrumental in the design and implementation of RIS3 strategies through the TAIEX REGIO Peer-2-Peer 176 and S3 Platform 177 . TAIEX is designed to share expertise between ERDF's and 's Managing Authorities . It helps public officials involved in the management of these funds to exchange knowledge, good practice and practical solutions to concrete problems thus improving their administrative capacity and ensuring better results for the EU investments.

The S3 Platform has provided an additional European added value to the process of strategy development by mapping the R&I diversity in EU regions, addressing European challenges and promoting policy learning. This has allowed regions to adopt best practice, benchmark their mechanisms against world-class standards and address their weaknesses.

The need to spread excellence and widen participation has been supported at EU level through Teaming, Twinning, and ERA chairs. The Lagging Regions project 178 aims to provide targeted support to low-growth and low-income regions. Cohesion policy provides a broad range of levers to implement RIS3 in low growth and low income regions through support to capacity building, administrative reform, ex-ante conditionalities and strengthened monitoring and evaluation. 179 Finally, to support policy reforms at national level, the Horizon 2020 Policy Support Facility (PSF) 180 has also proved to be useful providing policy advice and facilitating exchanges of good practices and learning among participating countries.

3.4Harnessing synergies and complementarities between EU policies and instruments

The need for synergies and complementarities between EU funds for research and innovation has been increasingly highlighted at political level, including through Council Conclusions 181 and by the European Parliament 182 . To achieve smart, sustainable and inclusive growth, the "Common Strategic Framework" 183 stresses the importance of synergies and complementarities between EU funds. Excellence based policies that do not have a regional dimension need to be combined with national and regional innovation policies to strengthen the capacity of regional actors to participate in the European Research Area (ERA) and reinforce place-specific processes of market led innovation built on existing clusters and governance systems.

The "Common Strategic Framework" stresses the importance of synergies and complementarities between EU funds and RIS3 strategies provide a robust framework to develop synergies as they should include "up-stream actions" to prepare regional R&I players to participate in Horizon 2020 and "down-stream actions" to exploit and diffuse R&I results, stemming from Horizon 2020 and preceding programmes, into the market. Many of the identified smart specialisation priorities also allow matching with H2020 themes and thus offer opportunities for developing synergies, for example, in coordinated parallel actions that complement each other. Synergies can be envisaged also for other instruments funded under ESIF e.g. the Connecting Europe Facility that manages cross-national cooperation activities, where "down-stream" actions could maximise innovation absorption. Synergies can help in closing the innovation gap throughout the EU regions as reflected in the participation success rates in the Framework Programmes Horizon 2020.

Complementarities are central for the emergence of novel technologies and the ‘functioning’ of existing ones. Automobiles, for example, require a network of gas or charging stations, a road infrastructure, traffic and safety regulations, repair shops, specialized suppliers and insurance services. Smart phones require a network of base- and switching stations, interconnectors to landlines and the internet, interoperability standards, different kinds of software, service providers etc. Complementarity at the sector or system level occurs, and if – combined – these components better contribute to fulfilling the societal function of the sector than each component on its own. Sector level complementarities can be viewed through the eyes of consumers or through the eyes of policy makers or regulatory authorities. 187

Most projects with the potential to give rise to a new activity require simultaneous large-scale investments to be made in order to become profitable. All the necessary services and complementary activities have fixed costs and are unlikely to start unless the potential provider have enough positive expectations regarding the future of the smart specialisation strategy. Profitable new activities can fail to develop unless upstream and downstream investments are made simultaneously 188 .

Present cooperation models often reflect a linear innovation model and emphasise cooperation in research among peers within a specific technology domain. This constrains the innovation activities often to pre-commercial research cooperation among competitors and to technology-push strategies. The demand-pull model is gaining now more consideration, with a mission oriented research (pulled by societal challenges). 191 The creation of entrepreneurial opportunities as part of such approach will be crucial to achieve impact.

3.4.1Mechanisms for synergies

The new regulatory frameworks for Horizon 2020 and Cohesion Policy provide a number of instruments to reinforce synergies 192 , including the possibility for the managing authorities of the ESIF programmes to allocate amounts from the operational programme to actions located outside the programme area but within the Union and for the benefit of the programme area (Article 70, Regulation (EU) No 1303/2013).

On the side of cohesion policy the mechanism for innovation related synergies is anchored in the RIS3 requirement. At the level of Partnership Agreements and operational programmes, Member States are required to demonstrate how various funding streams will be coordinated. Regulatory possibilities have been provided to combine Horizon 2020 and ESI funds in the same project, to perform successive and parallel projects 193 and the use of the simplified cost options and flat rates have been eased. 194  In addition, there are greater possibilities to spend ESI funds outside programme areas. 195 Finally, RIS3 strategies were required to build synergies and complementarities also with other ESI Funds (e.g; Interreg Europe), Horizon 2020 and other EU innovation funding programmes, such as COSME.

On the side of research and innovation policy, the purpose of fostering synergies between different EU funding programmes and policies to attain the Europe 2020 objectives of smart, sustainable and inclusive growth led to a stronger acknowledgement of the importance of Cohesion Policy investments in R&I, and a higher recognition of regional governments as innovation policy actors. It was also recognised that there is a need for involving all regions in the innovation cycle and each focusing on its own strengths. This shall contribute to the closing of the research and innovation divide within the European Union.

Articles 32 and 33 in the Regulation (EU) 1291/2013 establishing Horizon 2020 were included that provide for complementarity of Horizon 2020 with other Union funding programmes and policies and synergies with ESI funds. A special part for "Spreading excellence and widening participation" (with about EUR 0.8 billion) has been introduced to Horizon 2020 aiming to fully exploit the potential of Europe's talent pool and to ensure that the benefits of an innovation-led economy are both maximised and widely distributed across the Union. A practical guide 196  for decision-makers at regional level is available on how to effectively combine European structural funds with Horizon 2020 and the Bio-based Industries Joint Undertaking to deploy the European Bioeconomy.

Additional technical assistance is provided by the European Investment Advisory Hub 197 to further encourage the combination of the European Structural Investment Fund and the European Fund for Strategic Investments to maximise the mobilisation of private sector capital.

3.4.2Progress on synergies

Evidence from the programme negotiations and early implementation suggest that some progress on synergies has been made in particular at a strategic level, with a significant improvement in the information provided on coordination in the Partnership agreements and operational programmes. The situation at project level is more mixed. In spite of the changes to the regulatory framework, beneficiaries remain concerned that combination remains complex in practice.

In the context of Horizon 2020 calls for proposals which encourage synergies, further progress could be made to take synergies into account – but without undermining the excellence criterion of Horizon 2020 – where they are a valid aspect of the business plan and make the project more ambitious or increase its impact.

In the context of the Omnibus 198 regulation, the Commission has proposed a further simplification to facilitate joint funding.

Actions such as those under the Spreading excellence and widening participation part of Horizon 2020 (Teaming in particular) have an important role of mobilising ESIF investments complementing in a synergetic way the establishment of Horizon 2020 validated centres of excellence in low R&I performing countries. These actions were introduced to respond to the persisting divide in terms of research and innovation performance of some Member States 199 with the aim to encourage structural changes through institution building and networking as well as bringing excellence to institutions.

While there are a number of good examples for the upstream and downstream synergies 200 , many beneficiaries point to differences in the rules governing Horizon 2020 and Cohesion Policy expenditure, notably in relation to eligibility rules, procurement and state aid. Regarding governance of the two policy frameworks there is a need for better clarity of roles and responsibilities of the actors involved as well as coordination at all levels. More concrete support for implementation of synergies in practice is also needed. 

Synergies and complementarities between various EU support programmes and funding are an important issue in the other current EU programmes. The results of the public consultation show that there is significant improvement as regards complementarities and synergies, as out of the 44% of respondents that have received funding or other support from more than one EU fund or programme in the past 3 years, 60% of benefited from synergies or a combination of different funds. 37% acknowledge that the different EU support or funding was mutually supportive and improved or expanded the impact of the activity. EU support or funding was not linked but complementary for 17% of respondents. Furthermore, 6% received funding from more than one fund or programme for the same activity. Yet, support or funding was not linked and not complementary, as very different actions were funded for 36% of respondents.

3.4.3Initiatives to promote synergies

The Stairway to Excellence (S2E) 201 pilot project aims to help closing the innovation gap between the EU regions through developing and exploiting the synergies between European Structural and Investment Funds (ESIF), Horizon 2020 and other EU funding programmes. The S2E national events held in the last two years provided an opportunity for establishing informed communication between stakeholders in participating Member States. This was recognised as a novelty in itself in many of the EU13 Member States where prior consultation of stakeholders consistently signalled the need of proper interaction between policy makers, research and business actors. The identified fields that need further improvement relate to quality of R&I governance, capacity building and the commercialisation of the research results. 202 Much more efforts should be put to better coordination of the current information channels, offices and platforms and exchange of information between Managing Authorities of the ESIF programmes, Horizon 2020 National Contact Points and other stakeholders. The project clearly recognized that the planning safety and exploiting opportunities provided by the continuous Entrepreneurial Discovery Process (EDP) must be guaranteed through a long-term vision and political commitment. Long-term strategic planning is crucial for reinforcing a shared vision of R&I policies, building up a consensus on the prioritisation while aligning activities and creating a more open, transparent and flexible working culture to maximise socio-economic impacts of these investments. This can facilitate strategic business involvement into the wider innovation ecosystems since a stable economic and political environment help business actors to plan investment decisions and long-term initiatives.

The Seal of Excellence 203 (SoE) initiative is a quality label awarded to proposals submitted for funding under the calls of the Horizon 2020 that succeeded a rigorous evaluation, but could not be funded under the available call budgets. Holders of the certificate can find alternative funding under the European Structural and Investment Funds or other sources for their outstanding project ideas. The Seal of Excellence offers an opportunity for regions and Member States (and any other interested actor) to benefit from the high-quality Horizon 2020 evaluation process. During its pilot phase in years 2015-2016, the Seal of Excellence was awarded to positively evaluated proposals under the SME Instrument Calls of Horizon 2020. The initiative has now been extended to cover Teaming actions under the Widening part of Horizon 2020 as well as Marie Skłodowska Curie actions. Preparatory work for extending the Seal to the Proof of Concept proposals of the European Research Council is in progress. The distribution of the SoE certificates reflects the participation in Horizon 2020 by the different Member States. National and regional authorities in Member States and regions with sufficient critical mass of awarded projects started designing appropriate funding schemes, those where the number of seals is not very high, have decided to use existing funding schemes and integrate there the 'seal' proposals (through a system of bonuses, etc.). An increasing number of such support schemes exist already or are about to be launched, both for 'Seal' SME Instrument Phase 1 and Phase 2 Seal proposals, at both national and /or regional level (for instance in CZ, CY, EL, ES, FR, HU, IT, NO, PL, SE, SI).

Graph 17: Number of Seal of Excellence certificates awarded in Horizon 2020 SME Instrument (phase 1)  

Source: European Commission

Graph 18: Number of Seal of Excellence certificates awarded in Horizon 2020 SME Instrument (phase 1I)  

Source: European Commission

The European Commission since the beginning facilitates this work through the Seal of Excellence Community of Practice which has been established as a forum of discussion and exchange of information amongst funding bodies (more than 200 funding bodies currently members) interested in implementing the initiative which has been rapidly grown up with almost all Member States represented. To facilitate them in the handling of emerging questions when designing alternative funding schemes, the European Commission issued an 'Explanatory note of the Commission services on the application of State Aid Rules to national and regional funding schemes that offer alternative support to SME Instrument project proposals with a Horizon 2020 'Seal of Excellence'' 204 . In order to tap into the full potential of the Seal of Excellence further steps need to be made towards simplification of procedures and alignment of rules between the two policy frameworks, Horizon 2020 and ESIF.

While the Commission is committing to make the synergies as operational and straightforward as possible, the national and regional authorities however have a central role to play in this transition towards greater synergies. Their active participation, for example, in the Seal of Excellence initiative is essential for success and their role in maximising the take-up of projects with Seals is crucial for significant impact.

The design process and the implementation of RIS3 and the above-mentioned initiatives have significantly increased awareness of the need for synergies and encouraged the development of concrete coordination mechanisms and stronger linkages at the strategic planning and implementing project level. However, challenges remain in order to streamline and simplify implementation as well as to create incentives for using the different funds in a combined manner. They include issues related to the strategic framework and programming, communication and bringing the relevant actors together, sharing of best practice and regularly monitoring and evaluation of synergies. 207 Nevertheless, the positive examples presented underline that efforts are beginning to demonstrate positive results in the regions.

(1)  European Commission's Reflection Paper on Harnessing Globalisation - COM(2017) 240 final.

(2)  Ibid.

(3)  Op cit.

(4)  COM(2010) 553 final "Regional Policy contributing to smart growth in Europe 2020.

(5)  Knowledge Economists Policy Brief n° 9 June 2009, Knowledge for Growth Expert Group, Smart Specialisation – The Concept Dominique Foray, Paul A. David and Bronwyn Hall.

(6)  Council Conclusions 2016 on A more R&I friendly, smart and simple Cohesion Policy and the European Structural and Investment Funds more generally, European Parliament resolution of 14 January 2014 on smart specialisation: networking excellence for a sound Cohesion Policy (2013/2094(INI)), European Parliament resolution of 13 September 2016 on Cohesion Policy and Research and Innovation Strategies for Smart Specialisation (RIS3) (2015/2278(INI))

(7)  "Regional Innovation Patterns and the EU Regional Policy Reform: Toward Smart Innovation Policies" - R Camagni, R Capello - Growth and change, 2013 http://onlinelibrary.wiley.com/doi/10.1111/grow.12012/full

(8)  COM 2017(2025) final

(9) https://ec.europa.eu/commission/priorities/jobs-growth-and-investment_en

(10)  https://ec.europa.eu/commission/publications/president-junckers-political-guidelines_it

(11)  Oslo Manual, The Measurement of Scientific and Technological Activities https://rio.jrc.ec.europa.eu/en/library/oslo-manual-third-edition  

(12)   http://ec.europa.eu/europe2020/europe-2020-in-a-nutshell/priorities/smart-growth/index_en.htm

(13)  Aghion, P. and Jaravel, X. 2015 The Economic Journal, "Knowledge Spillovers, Innovation and Growth" 125, p. 536

(14)  Aghion, "From Growth Theory To Growth Policy Design" (2012)

(15)  According to the EU Cohesion Policy, regions are classified under 3 groups according to their GDP : less developed regions (where GDP per inhabitant was less than 75 % of the EU-27 average); transition regions (where GDP per inhabitant was between 75 % and 90 % of the EU-27 average); and more developed regions (where GDP per inhabitant was more than 90 % of the EU-27 average).

(16)  COM (2016) 725 p.8

(17) http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+MOTION+P8-RC-2016-0851+0+DOC+XML+V0//EN

(18)   http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//NONSGML+REPORT+A8-2016-0159+0+DOC+PDF+V0//EN

(19)   http://www.consilium.europa.eu/en/workarea/downloadAsset.aspx?id=40802190565

(20)   http://data.consilium.europa.eu/doc/document/ST-13989-2015-INIT/en/pdf

(21)  COM(2013) 882 or COM(2012) 392

(22)  COM(2015) 572, COM(2016) 51

(23)  COM(2016) 180, COM(2016) 410

(24) COM(2014) 14, COM(2012) 341, COM(2012) 537, COM(2013) 542

(25)  COM(2015) 614

(26)   http://ec.europa.eu/regional_policy/en/newsroom/consultations/smart-specialisation

(27)  "Knowledge Economists Policy Brief No 9" June 2009 http://ec.europa.eu/invest-in-research/pdf/download_en/kfg_policy_brief_no9.pdf

(28) http://ec.europa.eu/DocsRoom/documents/16903/attachments/1/translations/en/renditions/pdf https://ec.europa.eu/research/evaluations/pdf/archive/other_reports_studies_and_documents/clusters_smart_spec2013.pdf  See, for instance, the Smart Guide to Cluster Policy (2016) available at , the expert group report on "The role of clusters in smart specialisation strategies" (2013) available at and the 2008 Communication and Staff Working Document on clusters, COM(2008) 652 final/2 and SEC(2008) 2637.

(29)  COM(2010) 553 final.

(30)  Regulation (EU) No 1303/2013 of the European Parliament and of the Council of 17 December 2013

(31)  "Opportunity now: Europe's mission to innovate" European Commission" European Political Strategy Centre, 2016
https://ec.europa.eu/epsc/publications/strategic-notes/opportunity-now-europe%E2%80%99s-mission-innovate_en  

(32)  "Smart Specialization as an innovation-driven strategy for economic diversification: Examples from Scandinavian regions" - Asheim, Bjørn, Grillitsch, Markus and Trippl, Michaela – Paper in Innovation studies (2016) -
http://wp.circle.lu.se/upload/CIRCLE/workingpapers/201623_asheim_et_al.pdf  

(33)  "How to Improve Innovation Strategies for Smart Specialization in Poland" – World Bank (2014) https://openknowledge.worldbank.org/bitstream/handle/10986/17839/865270WP0MIR0R00Box385176B00PUBLIC0.pdf  

(34)  "Smart specialization in Croatia" - World Bank (2015) - https://openknowledge.worldbank.org/bitstream/handle/10986/22024/9781464804588.pdf;sequence=1

(35)  "Smart Specialisation in less advanced regions: What are the key challenges" - Igo Rotaru, EURINT (2015) - http://cse.uaic.ro/eurint/proceedings/index_htm_files/EURINT2015_ROT.pdf  

(36)  "Smart Specialisation: Creating Growth through Trans-national cooperation and Value Chains" - Mariussen Åge, Rakhmatullin Ruslan, Stanionyte Lina – JRC Policy Report (2016).

(37)  Philip McCann & Raquel Ortega-Argilés (2015) Smart Specialization, Regional Growth and Applications to European Union Cohesion Policy, Regional Studies  https://danube-inco.net/object/document/1517/attach/s3_mccann_ortega.pdf  

(38)  "Governing Smart Specialisation" - Dimitrios Kyriakou, Manuel Palazuelos Martínez, Inmaculada Periáñez-Forte, Alessandro Rainoldi – Regional Studies Association

(39)  "Mapping Innovation Priorities and Specialisation Patterns in Europe" - Jens Sörvik and Alexander Kleibrink – DG JRC Working Paper 2015. http://s3platform.jrc.ec.europa.eu/-/mapping-innovation-priorities-and-specialisation-patterns-in-europe  

(40)  "Smart Specialisation. Opportunities and Challenges for Regional Innovation Policy", Dominique Foray, 2015

(41)  "Smart Specialisation: Opportunities and Challenges for Regional Innovation Policy" - Foray, D. (2015) – Regional Studies Association

(42)  "The goals of Smart Specialisation"- Dominique Foray and Xabier Goenaga – JRC Policy Brief (2013) - http://s3platform.jrc.ec.europa.eu/-/the-goals-of-smart-specialisation  

(43)  "From smart specialisation to smart experimentation: Towards a new theoretical framework for EU regional policy "- Maximilian Benner - Zeitschrift für Wirtschaftsgeographie (2014) - https://mpra.ub.uni-muenchen.de/51843/1/MPRA_paper_51843.pdf

(44)  "Implementing Smart Specialisation Strategies: A Handbook" - Ed. Carlo Gianelle, Dimitris Kiriakou, Caroline Cohen, Marek Przeor Publication – European Commission (2016) - http://s3platform.jrc.ec.europa.eu/s3-implementation-handbook  

(45)  "Smart Specialisation and Innovation in Rural Areas" - Artur da Rosa Pires, Martina Pertoldi, John Edwards and Fatime Barbara Hegyi – JRC Policy Brief (2014) - http://s3platform.jrc.ec.europa.eu/-/smart-specialisation-and-innovation-in-rural-areas  

(46)  "Smart Specialisation: Creating Growth through Trans-national cooperation and Value Chains" Mariussen Åge; Rakhmatullin Ruslan; Stanionyte Lina – European Commission JRC Policy Report (2016).

(47)  "Regional Competitiveness and Smart Specialization in Europe: Place-based development in international economic networks " - M Thissen, F van Oort, D Diodato, A Ruijs (2013)

(48)  "The Regional and Urban Policy of the European Union: Cohesion, Results Orientation and Smart Specialisation", McCann (2015)

(49)  Jens Sörvik & Ruslan Rakhmatullin & Manuel Palazuelos-Martinez, 2013. "Preliminary report on KETs priorities declared by regions in the context of their work on Research and Innovation Strategies for Smart Specialisation (RIS3)," JRC Working Papers JRC84659, Joint Research Centre (Seville site). https://ideas.repec.org/p/ipt/iptwpa/jrc84659.html  

(50)  Jens Sörvik & Alexander Kleibrink, 2014. " the Digital Agenda Toolbox ," JRC Working Papers JRC88896, Joint Research Centre (Seville site). https://ideas.repec.org/p/ipt/iptwpa/jrc88896.html  

(51)   European Commission, Guidance on Ex ante Conditionalities for the European Structural and Investment Funds, PART II, February 2014 , pg. 4-13

(52)  Ex-ante conditionality 1.1 Research and innovation

(53)  Study "Support of ESI Funds to the implementation of the Country Specific Recommendations and to structural reforms in Member States"

(54)  See the Commission Staff Working Document SEC (2016) 318 final and the ex-post evaluation of Cohesion Policy Programmes 20017-2013 Financed by the ERDF and the CF, Work package 2 “Support to SMEs, Increasing research and innovation in SMEs and SME development”, Contract Nr. 2014CE16BAT002, Final report,  http://ec.europa.eu/regional_policy/sources/docgener/evaluation/pdf/expost2013/wp2_final_en.pdf  

(55)  http://ec.europa.eu/regional_policy/sources/docoffic/official/reports/cohesion6/6cr_en.pdf

(56)  http://ec.europa.eu/regional_policy/sources/docgener/work/2015_02_econ_assess.pdf

(57)  Andrés Rodríguez-Pose, Marco di Cataldo, Alessandro Rainoldi, The Role of Government Institutions for Smart Specialisation and Regional Development S3 Policy Brief Series No. 04/2014

(58)  Fraunhofer ISI, (2013), Smart specialisation approaches: A new policy paradigm on its way from concept to practice, Karlsruhe.

(59)  See summary of the public consultation on Smart Specialisation.

(60)  As planned in the national or regional operational programmes for 2014-20: https://cohesiondata.ec.europa.eu/themes .

(61)  Based on data from the ESIF viewer: http://s3platform.jrc.ec.europa.eu/esif-viewer  

(62)  Study (launched by DG RTD. D1) Analysis of smart specialisation strategies in nanotechnologies, advanced manufacturing and process technologies, http://bookshop.europa.eu/en/analysis-of-smart-specialisation-strategies-in-nanotechnologies-advanced-manufacturing-and-process-technologies-pbKI0115021/  

(63)  The European Bioeconomy Strategy, together with its Action Plan, is currently under review, with a view to being will be updated together with its Action Plan in the light of the Commission's announcement in the Circular Economy Package

(64)  A capacitor is a device used to store an electric charge, consisting of one or more pairs of conductors separated by an insulator.

(65)  Gianelle, C., F. Guzzo, and K. Mieszkowski (2017), Smart Specialisation at work: Analysis of the calls launched under ERDF Operational Programmes, DG JRC Technical Report, forthcoming.

(66)  Ibid

(67)   http://s3platform.jrc.ec.europa.eu/

(68)   http://s3platform.jrc.ec.europa.eu/s3-tools

(69)  "External dimensions of smart specialisation: Opportunities and challenges for trans-regional and transnational collaboration in the EU-13" - Slavo Radosevic and Katerina Ciampi Stancova – DG JRC Working Paper (2015) -
http://s3platform.jrc.ec.europa.eu/documents/20182/114874/JRC96030_External_Dimensions_of_S3.pdf/  

(70)  Gdfgdf Boden et al. (2016)

(71)  (Sörvik et al., 2016).

(72)  Kleibrink, Gianelle and Doussineau (2016), “Monitoring Innovation and Territorial Development in Europe: Emergent Strategic Management”, European Planning Studies 24 (8): 1438–58.

(73)  ‘Targeted innovation policy and practice intelligence (TIP2E): concepts and implications for theory, policy and practice’ - Elias G. Carayannis, Dirk MeissnerAnastasia Edelkina - The Journal of Technology Transfer (2015) - http://link.springer.com/article/10.1007/s10961-015-9433-8 .

(74)  "Universities and Smart Specialisation" - Louise Kempton, John Goddard, John Edwards, Fatime Barbara Hegyi and Susana Elena-Pérez – JRC Policy Brief (2013)
http://s3platform.jrc.ec.europa.eu/-/universities-and-smart-specialisation  

(75)  Marinelli et al. (2016)

(76)  Jens Sörvik & Inger Midtkandal & Chiara Marzocchi & Elvira Uyarra, 2016. "How Outward Looking is Smart Specialisation? Results from a survey on inter-regional collaboration in Smart Specialisation Strategies (RIS3)," DG JRC Working Papers.Elvira Uyarra & Jens Sörvik & Inger Midtkandal, 2014. "Inter-regional Collaboration in Research and Innovation Strategies for Smart Specialisation (RIS3). DG JRC, S3 Working Paper Series no 6/2014," JRC Working Papers JRC91963, Joint Research Centre -
http://s3platform.jrc.ec.europa.eu/documents/20182/114903/JRC91963_Interreg_Collaboration_RIS3_final.pdf/89b7b310-8378-4e03-bcd9-2680061d037e .

(77)   http://documentos.galiciainnovacion.es/RIS3T/RIS3T_en.pdf  

(78)   http://www.oecd.org/sti/inno/smart-specialisation.pdf

(79)   https://www.innovationpolicyplatform.org/content/smart-specialization

(80)   http://www.unece.org/ceci/search.html?q=smart+specialisation&op=Search

(81)  COM(2016) 740 final, 22.11.2016.

(82)   https://eeas.europa.eu/headquarters/headquarters-homepage_en/9886/EU%20External%20investment%20plan

(83)  Kleibrink, Alexander, Philippe Larédo, and Stefan Philipp. 2017. Promoting Innovation in Transition Countries: A Trajectory for Smart Specialisation. JRC Science for Policy Report. Seville: European Commission, Joint Research Centre.

(84)  "Smart Specialisation in Hunter Region" - Regional Development, Australia (2016) - http://rdahunter.org.au/initiatives/smart-specialisation

(85)  "Innovation and Regional Specialisation in Latin America " - Belén Barroeta, Javier Gómez Prieto, Jonatan Paton, Manuel Palazuelos, Marcelino Cabrera Giráldez – JRC Policy Brief (2017)

(86)   http://ec.europa.eu/dgs/fpi/announcements/tenders/20160114_4_en.htm .

(87)   http://www.consilium.europa.eu/en/meetings/international-summit/2015/06/10-11/

(88)   http://s3platform.jrc.ec.europa.eu/

(89)  Summary of the public consultation on smart specialisation

(90)  External dimensions of smart specialisations: Opportunities and challenges for trans-regional and transnational cooperation in EU13 - Slavo Radosevic and Katerina Ciampi Stancova – DG JRC Working paper (2015)
http://s3platform.jrc.ec.europa.eu/-/external-dimesions-of-smart-specialisations-opportunities-and-challenges-for-trans-regional-and-transnational-cooperation-in-eu13

(91)  Smart Specialisation in Europe: Looking Beyond Regional Borders - Nicola Bellini - SYMPHONYA Emerging Issues in Management (2015) -
http://symphonya.unimib.it/article/viewFile/2015.1.03bellini/10686

(92)  Committee of the Regions draft opinion: "Local and Regional dimension of Bioeconomy and the role of regions and cities" 
http://cor.europa.eu/en/activities/opinions/pages/opinion-factsheet.aspx?OpinionNumber=CDR%2044/2017

(93)  H.Kroll, "Policy Brief on Smart Specialisation", Fraunhofer Institute for Systems and Innovation Research (2016)

(94)  AMI-list expert reports during negotiation of operational programmes 2014-20

(95)   http://www.oecd.org/economy/the-future-of-productivity.htm

(96)  McKinsey Global Institute (2010) Beyond austerity: A path to economic growth and renewal in Europe

(97)  See also The Smart Guide to Service Innovation (2012), available at http://ec.europa.eu/DocsRoom/documents/3955/attachments/1/translations/en/renditions/pdf

(98)  "Science, Research and Innovation performance of the EU" (2016) https://bookshop.europa.eu/en/science-research-and-innovation-performance-of-the-eu-pbKI0415512/  

(99)  James Manyika et al., “How to Compete and Grow: A Sector Guide to Policy” (McKinsey & Company, March 2010), http://www.mckinsey.com/insights/economic_studies/how_to_compete_and_grow.

(100)  ERA Expert Group, Challenging Europe’s Research: Rationales for the European Research Area (ERA) http://www.eirma.org/sites/www.eirma.org/files/doc/documents/EU/ERA-consult/eg7-rationales.pdf

(101)  ERA Expert Group, ibidem:

(102)   https://ec.europa.eu/growth/tools-databases/regional-innovation-monitor/

(103)  The European Cluster Observatory will be renamed the European Observatory for Clusters and Industrial Change in the second half of 2017. http://ec.europa.eu/growth/smes/cluster/observatory/

(104)   http://ec.europa.eu/growth/smes/cluster/observatory/cluster-mapping-services/mapping-tool_en

(105)   http://ec.europa.eu/growth/smes/cluster/observatory/regional-ecosystem-scoreboard_en

(106)  "Policy Brief on Smart Specialisation"- Henning Kroll (2016) Fraunhofer

(107)  Van Ark, B.; O’Mahony, M. and Timmer, M. (2008). The Productivity Gap between Europe and the United States: Trends and Causes. Journal of Economic Perspectives—Volume 22, Number 1—Winter 2008—Pages 25–44. Retrieved at:  http://www.indexmeasures.ca/dc2008/papers/vanark_productivity.pdf

(108)  CEDEFOP (2012a), Sectoral perspectives on the benefits of vocational education and training. Retrieved at: http://www.cedefop.europa.eu/EN/publications/19891.aspx  

(109)  SWD(2012) 375 final: Commission staff working document "Vocational education and training for better skills, growth and jobs"

(110)  Guidance on Ex ante Conditionalities for the European Structural and Investment Funds http://ec.europa.eu/regional_policy/sources/docgener/informat/2014/eac_guidance_esif_part2_en.pdf  

(111)  European Commission/Directorate-General for Enterprise and Industry. (2012). Building Entrepreneurial Mindsets and Skills in the EU. GuideBook Seris. OPEU, Luxembourg

(112)   Blueprint for sectoral cooperation on skills (on Europa website) and brochure (January 2017) Digital Skills and Jobs Coalition (on Europa website)

(113)   Communication (2016) 381 "New Skills Agenda for Europe - Working together to strengthen human capital, employability and competitiveness and Staff Working Document (2016) 195 "Analytical underpinning for a New Skills Agenda for Europe"

(114)  European Commission/DG REGIO (2013) Guide to Social Innovation. OPEU, Luxembourg.

(115)   http://www.s3vanguardinitiative.eu/sites/default/files/docs/general/milan_declaration.pdf

(116)  D. Foray, Smart specialisation and the New Industrial Policy agenda, Policy Brief N° 8, Innovation for Growth, 2011 - https://ec.europa.eu/research/innovation-union/pdf/expert-groups/i4g-reports/i4g_policy_brief_8_-_smart_specialisation.pdf

(117)  OECD, Cross-border science, technology and innovation governance arrangements, in Science, Technology and Innovation Outlook 2016

(118)  Mariussen Å; Rakhmatullin R; Stanionyte L. Smart Specialisation: Creating Growth through Trans-national cooperation and Value Chains. Thematic Work on the Understanding of Transnational cooperation and Value Chains in the context of Smart Specialisation. EUR 28049 EN. Luxembourg (Luxembourg): POEU; doi:10.2791/658931

(119)  "Why Regional Development matters for Europe's Economic Future", LSE, European Commission 2017.

(120)  There are currently six EIT Knowledge and Innovation Communities (KICs) in the following thematic areas: climate change adaptation and mitigation (EIT Climate-KIC), sustainable energy (EIT InnoEnergy), digitalisation (EIT Digital), healthy living and active ageing (EIT Health), raw materials (EIT RawMaterials) and food for future (EIT Food). Moreover, the EIT plans to launchtwo more innovation communities in 2018 in the thematic areas of added value manufacturing (EIT Manufacturing) and urban mobility (EIT UrbanMobility) https://eit.europa.eu/collaborate/2018-call-for-kics

(121)   www.clustercollaboration.eu/eu-cluster-partnerships

(122)   https://ec.europa.eu/research/participants/portal/desktop/en/opportunities/h2020/topics/innosup-01-2016-2017.html and www.clustercollaboration.eu/eu-initiatives/emerging-industries-and-interregional-cooperation

(123)   www.clustercollaboration.eu/eu-initiative/cluster-excellence-calls

(124)  "Research and Development, Spillovers, Innovation Systems, and the Genesis of Regional Growth in Europe" - A Rodríguez-Pose, R Crescenzi (2010) -  http://rsa.tandfonline.com/doi/abs/10.1080/00343400701654186

(125)  The BBI JU is leading the way in bio-waste, exploring new processing techniques that produce chemicals for bio-plastics or recover high value nutrients from urban bio-waste - http://www.bbi-europe.eu/

(126)  Signed at the European Bioeconomy Congress in Lodz, Poland (6 October 2016)

(127)   http://biconsortium.eu/sites/biconsortium.eu/files/publications/Lodz_Press_Release_20161006.pdf

(128)   https://ec.europa.eu/energy/sites/ener/files/documents/set-plan_progress_2016.pdf  

(129)   http://s3platform.jrc.ec.europa.eu/transnational-cooperation

(130)   https://ec.europa.eu/research/participants/portal/desktop/en/opportunities/h2020/topics/innosup-01-2016-2017.html and www.clustercollaboration.eu/eu-initiatives/emerging-industries-and-interregional-cooperation

(131)  The focus areas of the first six INNOSUP-1-2015 and two INNOSUP-1-2016 cluster projects cover ICT, health, agri-food, bio, aerospace, advanced/process technologies, blue growth, mobility/automotive and creative industries.

(132)  Report from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on the implementation of EU macro-regional strategies , Brussels, 16.12.2016 http://ec.europa.eu/regional_policy/sources/cooperate/macro_region_strategy/pdf/report_implem_macro_region_strategy_en.pdf

(133)  BSR Stars project webpage: http://projects.interreg-baltic.eu/projects/bsr-stars-s3-33.html

(134)  Interreg Baltic Sea Region project webpage: https://www.interreg-baltic.eu/about-projects.html

(135)   https://ec.europa.eu/jrc/en/research/crosscutting-activities/danube-strategy/innovation-partnership  

(136)   https://ec.europa.eu/maritimeaffairs/policy/sea_basins_en

(137)   http://www.atlanticresource.org/aora/

(138)   http://www.bluemed-project.eu/

(139)   https://www.bonusportal.org/

(140)   http://ec.europa.eu/regional_policy/en/policy/themes/urban-development/agenda/  

(141)   https://habitat3.org/the-new-urban-agenda  

(142)   http://www.un.org/sustainabledevelopment/cities/

(143)  Circular Amsterdam: a vision and action agenda for the city & metropolitan area", Circle Economy, Fabric TNO, Gemeente Amsterdam, 2016

(144)  European Commission, DG RTD.F.2 estimations (1/2017)

(145)  Regulation (EU) No 1291/2013 of the European Parliament and of the Council of 11 December 2013 establishing Horizon 2020

(146)   http://eu-great-project.eu/

(147)   http://www.onlines3.eu/

(148)   http://cordis.europa.eu/project/rcn/205933_en.html

(149)   https://clusternanoroad.wordpress.com/

(150)  Nanotechnologies, advanced Materials, Biotechnology and advanced manufacturing and Processing

(151)   http://ec.europa.eu/research/innovation-union/index_en.cfm?pg=eip

(152) There are currently six KICs : EIT Climate-KIC, EIT InnoEnergy, EIT Digital, EIT RawMaterials, EITHealth and EIT Food.

(153)   http://www.clustercollaboration.eu/eu-initiative/cluster-excellence-calls

(154)   http://www.clustercollaboration.eu/eu-cluster-partnerships

(155) http://www.clustercollaboration.eu/

(156) http://startupeuropeclub.eu/sern/

(157) https://eacea.ec.europa.eu/erasmus-plus/actions/key-action-2-cooperation-for-innovation-and-exchange-good-practices/sector-skills-alliances_en

(158) http://s3platform.jrc.ec.europa.eu/s3-thematic-platforms

(159)   http://s3platform.jrc.ec.europa.eu/industrial-modernisation

(160)  These new partnerships (ESCP-S3) follow the example of the set up of partnerships for going international (ESCP-4i). For more information, see the call for the expression of interest for the partnering at https://www.clustercollaboration.eu/open-calls/towards-european-strategic-cluster-partnerships-smart-specialisation

(161)  http://ec.europa.eu/research/participants/portal/desktop/en/opportunities/cosme/index.html

(162)   https://ec.europa.eu/digital-single-market/en/digitising-european-industry  

(163)  Such as Cyber-Physical-Systems (CPS), Internet of Things (IoT), digital design, simulation and analytics, advanced laser-based technologies, industrial robotics, 3D printing, etc

(164)   https://ec.europa.eu/growth/tools-databases/kets-tools/kets-tc/map

(165) European Commission (2016), Open science, open innovation, open to the world: a vision for Europe

(166)  D. Foray, Smart Specialisation and new industrial policy

(167)   http://www.platform-project.eu/

(168)  Synergic Circular Economy across European Regions (SCREEN) project coordinated by the Lazio Region and financed under the H2020-EU.3.5.4. call (Enabling the transition towards a green economy and society through eco-innovation).

(169)  Regulation (EU) No. 1303/2013, Article 70(2)(b) of the Common Provisions Regulation (CPR) allows to implement ESI funds outside the programme area, but still within the European Union, provided that the total amount allocated to operations located outside the programme area does not exceed 15 % of the support from the ERDF. Nevertheless, this option has rarely been used by Managing Authorities.

(170)  "Templates of smart specialisation: Experiences of place-based regional development strategies in Germany and Austria" - Baier, Elisabeth; Kroll, Henning; Zenker, Andrea (2013) - https://www.econstor.eu/bitstream/10419/74482/1/745637779.pdf  

(171)  "The Challenge of Smart Specialisation in less favoured Regions" - Henning Kroll – Fraunhofer Institute (2017) - http://www.isi.fraunhofer.de/isiwAssets/docs/p/de/arbpap_unternehmen_region/2017/ap_r1_2017.pdf

(172)   http://ec.europa.eu/growth/smes/cluster/observatory/regional-ecosystem-scoreboard_en

(173)  Mark Boden, Patrice dos Santos, Karel Haegeman, Elisabetta Marinelli and Susana Valero (2015) European Parliament Preparatory Action: "Actual and desired state of the economic potential in regions outside the Greek capital Athens" Final Report, EUR 27570,  http://s3platform.jrc.ec.europa.eu/documents/20182/143661/European+Parliament+Preparatory+Action+RIS3+in+REMTh+Final+Report/ecc81ce1-3542-4cd6-bb93-c2679e218b43

(174)  RDI funding guide and case studies: http://s3platform.jrc.ec.europa.eu/rdi-guide  

(175)  Navarro, Mikel, Juan José Gibaja, Susana Franco, Asier Murciego, Carlo Gianelle, Alexander Kleibrink, and Fatime Barbara Hegyi. 2014. “Regional Benchmarking in the Smart Specialisation Process: Identification of Reference Regions Based on Structural Similarity.” S3 Working Paper 03/2014. European Commission, Joint Research Centre.  https://ideas.repec.org/p/ipt/iptwpa/jrc89819.html  

(176)   http://ec.europa.eu/regional_policy/en/policy/how/improving-investment/taiex-regio-peer-2-peer/

(177)   http://s3platform.jrc.ec.europa.eu/

(178)   http://s3platform.jrc.ec.europa.eu/ris3-in-lagging-regions

(179)  COM(2015) 639 final - Investing in jobs and growth - maximising the contribution of European Structural and Investment Funds

(180)  See point 3.1.2.

(181)  Council Conclusions of 27 May 2016 on 'Research and innovation friendly regulation' and Conclusions adopted at GAC on 24 June on 'A more R&I friendly, smart and simple Cohesion Policy and the European Structural and Investment Funds more generally'

(182)  European Parliament resolution on Synergies between structural funds and Horizon 2020, adopted by the Commission on 4 July 2016

(183)  Regulation (EU) No 1303/2013, Common Strategic Framework, Annex I

(184)   http://www.eli-laser.eu

(185)   https://europeanspallationsource.se

(186) https://ec.europa.eu/transport/themes/infrastructure/ten-t-guidelines/corridors_en  

(187)

      Jochen Markard and   Volker H. Hoffmann , Analysis of complementarities: Framework and examples from the energy transition, in Technological Forecasting and Social Change , Volume 111 , October 2016, Pages 63–75

(188)  Foray, ibid

(189)   http://cordis.europa.eu/project/rcn/204326_en.html

(190)  The project has received funding from the Bio Based Industries Joint Undertaking under the European Union’s Horizon 2020 research and innovation programme, http://www.first2run.eu/

(191)  See RTD: on 'Market Creating Innovation'

(192)  Regulation (EU) No 1303/2013: Articles 65(11), 70(2), 96(3)d and Common Strategic Framework, Annex 1; Regulation (EU) No 1290/2013, Article 37.

(193)  Enabling Synergies between European Structural Investment Funds, Horizon 2020 and other research, competitiveness-related Union programmes. Guidance for policy-makers and implementing bodies. http://ec.europa.eu/regional_policy/sources/docgener/guides/synergy/synergies_en.pdf

(194)  Regulation (EU) No 1303/2013, Articles 67 and 68

(195)  Regulation (EU) No 1303/2013, Article 70

(196)   http://biconsortium.eu/sites/biconsortium.eu/files/downloads/Guidelines_BBI-ESIF-Final.pdf  

(197)   www.eib.org/eiah

(198)  To come into force on 1 January 2018

(199)  The Horizon 2020 Widening actions target the following countries: Member States - Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Luxembourg, Malta, Poland, Portugal, Romania, Slovakia and Slovenia, and Countries Associated to Horizon 2020 - Albania, Armenia, Bosnia and Herzegovina, Faroe Islands, Former Yugoslav Republic of Macedonia, Georgia, Moldova, Montenegro, Serbia, Tunisia, Turkey and Ukraine

(200) http://bookshop.europa.eu/en/eu-funds-working-together-for-jobs-growth-pbKI0116339/  

(201)   http://s3platform.jrc.ec.europa.eu/stairway-to-excellence

(202)  Stairway to Excellence – Briefs series – Issue #1 – December 2016

(203)   https://ec.europa.eu/research/soe/index.cfm

(204) SWD(2017) 11 final -   https://ec.europa.eu/research/soe/pdf/swd2017-11_application_of_state_aid_rules_to_funding_schemes.pdf

(205)   http://startupregions.eu/

(206)   http://eit.europa.eu/activities/outreac/eit-regional-innovation-scheme-ris

(207) Final report (2017): 'Synergies between Framework Programmes for Research and Innovation and the European Structural and Investment Funds'