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Smart specialisation in a time of transition

31 October, 2019.

In the editorial of the last S3 Newsletter issue, Peter Berkowitz, Head of Unit for Smart and Sustainable Growth within the Directorate General for Regional and Urban Policy of the European Commission, shares his view of the role of Smart Specialisation in the post-2020 programming period.

Peter Berkowitz

Europe will face many challenges in the coming years linked to the introduction of new technologies, digitalization, an evolving trade environment, and the need to move a climate neutral economy, while ensuring quality jobs and well-being for its citizens. As highlighted in the political guidelines of our President-elect, Ursula Von der Leyen, Europe must lead the transition to a healthy planet and a new digital world. But it can only do so by bringing people together and upgrading our unique social market economy to fit today's new ambitions.

Cohesion policy has a long experience in supporting the sustainable transition of Europe's regions and cities. It is the main EU policy instrument to address structural changes linked to energy and industrial transition. Regional economies need to innovate, transform and adapt to an ever changing and more competitive environment. In this context, the EU has played a key role by supporting all regions and Member States to activate their potential for innovation, competitiveness and sustainable jobs and growth through smart specialisation strategies.

The promotion of innovation was already a central feature in the Cohesion Policy programmes for 2007-2013. This commitment has been further strengthened in proposals of the Commission for the post-2020 programming period, with a stronger earmarking of resources for innovation and environmental and energy transition. This will support the objectives of a Green New Deal, by strengthening capacities to develop innovative solutions to environmental and climate challenges, supporting the most affected workers and communities, and supporting investment in energy efficiency, renewables, the circular economy and pollution reducing technologies. Cohesion policy will support the digital transformation of our societies, of business and the public sector, in cities and in rural areas.

Smart specialisation strategies are at the centre of this approach. EU member states and regions have identified priorities to build on their strengths in business and research in order to move up value chains and improve the competitive advantage of their territories. This approach will be reinforced in the future by strengthening governance and ownership of the strategies, while focusing more explicitly on the quality of research and innovation systems, industrial transition, bottlenecks to innovation diffusion and international collaboration. This will require more tailor-made policies at regional level and new approaches to these issues.

For example, in order to meet the challenge of industrial transition, there is a need to unlock this potential to find new solutions at subnational level. As part of the preparation for the new period, the European Commission launched a Pilot Action on Regions in Industrial Transition at the end of 2017. The objective is to help ten regions and two Member States undergoing industrial transition, to test new approaches to bringing growth and employment, for the benefit of all. The participating pilot regions are working on questions such as the jobs of the future, improving innovation diffusion, strengthening entrepreneurship, managing the shift to the carbon-neutral, circular economy and promoting socially inclusive growth.

Another area where the Commission is working together with regions to develop new approaches is in relation to international collaboration between smart specialisation partnerships. In order to benefit from the globalised economy, regions and cities need to create new value chains that allow them to scale up their good ideas in the EU single market. This means bringing businesses, researchers, public authorities and people from across the EU who work on developing smart specialisation priority areas in their territories to match their competitive strengths and develop innovative projects. Building on the work of the thematic smart specialisation platforms, the Commission launched a call in 2017 and selected nine interregional partnerships to benefit from hands-on support from the Commission and external advisory services. The goal was to encourage regional partnerships to propose an interregional portfolio of innovation ideas. These should lead identify investment projects to be developed in areas such as the bio-economy, batteries, cybersecurity, circular economy, hi-tech farming, 3D printing, marine renewable energies, sustainability, or traceability. The lessons drawn from the pilot will feed into the new Interregional Innovation Investment framework proposed by the Commission for Cohesion Policy Post-2020. As highlighted by the Competiveness Council, in this way smart specialisation can become a place-based pillar of a European Industrial Policy Strategy.

In short, smart specialisation has come of age in the European policy environment. Its role will be to support key European objectives over the next ten years – the transition to a carbon-neutral economy, harnessing the possibilities of digitalisation, technological change and globalisation, and contributing to strengthen European value chains and industrial capacity. Most importantly, it will do this by building on the diversity of European regions and cities, through policies that take account of their specific strengths.

Peter Berkowitz.

Originally published on October 31, 2019 in the S3 Newsletter. With permission from S3 Platform.