Smart governance for smart specialisation Lessons from OECD case studies

1. Smart governance for smart specialisationLessons from OECD case studies Dr Patries Boekholt Managing Director Technopolis Group Gwangju, April 3-5 2013

2. This presentation • Focus on the 17 case studies in the OECD project • Specific focus on governance and entrepreneurial discovery • Policy lessons from case studies

3. 17 cases studies in OECD initiative Thematic (vertical) Generic (horizontal) Lower Austria (AT) Upper Austria (AT) Brandenburg (DE) Basque Country (ES) Estonia Eindhoven Brainport (NL) Lahti (FI) Malopolska (PO) South Moravia (CZ) Melbourne South East (AUS) • Photonics (Gwangju) • Nano-for-Health (Flanders) • Sustainable Chemistry (Flanders) • Aerospace Andalusia (ES) • Automotive Marmara (TR) • Automotive (UK) • Grain Industry (AUS)

4. What did we learn from the case studies? • Impressive set of examples on innovation strategy processes in the OECD-TIP case studies • De facto many regions/nations already have some form of S3 • Every case shows strong path dependency in terms of competences, sectors, institutions, assets etc… • Changing direction in favour of structural economic changes not easy nor fast • The prioritisation process is still controversial in many regions & nations • Prioritisation = making choices • Limited resources => not support every initiative • Who makes those choices and on which criteria? • Only limited examples of ‘exit strategies’ from old specialisations

5. Governance in the case studies • The time of developing top-down innovation strategies ‘from a policy makers desk’ seems over • Many examples of stakeholder dialogues (triple-helix networks, web-based consultations, stakeholder events, advisory boards, facilitation of road mapping by stakeholders, etc…) • Balancing top-down and bottom-up prioritisation a delicate exercise • Often parallel prioritisation processes from competing actors • Difficulty to go beyond status quo and well organised groups • Needs sufficient room for experimentation and fledgling clusters • Inclusiveness and societal challenges need a voice as well • The challenge for policy makers is to develop sound criteria for selection of priorities based on evidence

6. Entrepreneurial discovery process (1) • Today innovations are rarely the outcome of one ‘entrepreneurial genius’ coming up with an invention • Today our understanding of innovation relates to social processes • Relies on making combinations between technologies (e.g. mechatronics and biomedicine) and cross-fertilisation • Relies on combining technologies, with new customer services, design and new business models • Relies on the power to organise, network and taking leadership in this process • Thus: the entrepreneurial discovery process that has the scale and impact to affect the region is likely to come from a combination of entrepreneurial individuals and organisations rather than from individual entrepreneurs

7. Entrepreneurial discovery process (2) • Various actors can be the originator and driver of the discovery process • Entrepreneurial individuals • Innovative companies • A network of companies -> Green building cluster Lower Austria • An institution that has a mobilizing role in knowledge creation and dissemination -> IMEC in the NfH case • Visionary policy makers -> UK gov. Ultra Low Carbon Vehicles • Needs a considerable level of ‘self-organisation’ of these actors • But also support to maintain the momentum

8. Policy instruments for S3 • The key policy instruments for smart specialisation are already in place in the today’s portfolio of innovation policies. • The challenge is to find the appropriate policy mix suitable for the dynamic clusters • Policy instruments need to be adjusted to specific specialisations (eg regulation, public procurement, financial support, research centres) • New tools to encourage the entrepreneurial discovery process • Tools and mechanisms to support agenda setting, market and technology searches, networking by the stakeholders -> government as facilitator of processes • New diagnostic tools for policy makers to use evidence

9. Multi-level governance • The alignment of regional and national strategies needs further improvement in most case studies • Examples of ‘splendid isolation’ • Examples of going in similar directions • Few examples of reinforcing national and regional strategies • Cross-border collaboration, an essential element of the smart specialisation philosophy, is high on the policy agenda but still faces various practical bottlenecks • In Europe mostly cross-border funding an issue • Horizontal alignment between policy domains (eg innovation policy and regulation in environment) • Evaluation and monitoring of smart specialisation still ‘work in progress’

10. Challenge is to bring governance levels together Regional Innovation Strategies and Social Agenda’s National policy priorities Smart Specialisation Strategies International policy priorities Research and education strategies Business strategies and cluster roadmaps The region’s general framework conditions and assets 10

11. Conclusions • The S3 debate has reached a strong political momentum mostly due to the incorporation in Cohesion Policy in Europe • Work still needs to be done to translate the discourses into practical strategies and tools for policy makers • Needs a reality check in terms of the expectations of a purely rational and evidence based approach -> too much path dependency and social interests involved • In view of the economic and financial crisis and a set of grand societal challenges: there is an urgent need to align and coordinate governance level more closely to make step changes

12. Thank you Further information; patries.boekholt@technopolis-group.com technopolis |group| has offices in Amsterdam, Ankara, Brighton, Brussels, Frankfurt/Main, Paris, Stockholm, Tallinn and Vienna