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The simple economics of smart specialisation Dominique Foray Ecole Polytechnique Fédérale de Lausanne Transition economics meets new structural economics.

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Presentation on theme: "The simple economics of smart specialisation Dominique Foray Ecole Polytechnique Fédérale de Lausanne Transition economics meets new structural economics."— Presentation transcript:

1 The simple economics of smart specialisation Dominique Foray Ecole Polytechnique Fédérale de Lausanne Transition economics meets new structural economics June 25, UCL SSEES, London

2 D.Foray, P.A.David, B.Hall and B.Van Ark : Smart Specialisation: the Concept Knowledge for Growth expert group for the EC

3 A policy concept to reconcile two logics – Vertical (not horizontal) prioritization – Dynamism, entry and competition, entrepreneurship Policy design matters

4 Policy design Entrepreneurial discovery & new activities – Entrepreneurial knowledge – Discovery – Spillovers – Neither sectors nor individual firms are prioritised Mid-grained granularity & new activities – Structural changes Inclusiveness

5 Sleeping giant Transport sector Excited goblings high tech cluster Hungry dwarfs low tech SMEs

6 Sleeping giant transport Excited goblings high tech cluster Hungry dwarfs low tech SMEs Sectoral level mapping Activity level priorities

7 Sleeping giant transport Excited goblings high tech cluster Hungry dwarfs low tech SMEs Sectoral level A narrow view of smart specialisation!

8 Sectoral level Activity level mapping prioritization Modernisation of the old transport sector : integrated logistic system Transition of the cluster: from ICT to med-tech Diversification of SMEs: from automotive to biomedical sector

9 Policy design Entrepreneurial discovery & new activities – Entrepreneurial.. –..discovery – Spillovers – Mid-grained granularity Inclusiveness Evolution Experimental nature of the policy

10 Goals’s relevance for different types of regions Smart specialisation goals – Facilitating emergence and early growth of new activities potentially rich in innovation and spillovers – Diversifying the regional system through the generation of new options – Generating critical mass, critical networks or clusters within a diversified system S3 provides strategies and goals for any region – For followers and leaders – Inclusiveness provides a rationale for any region

11 Animal genetics and breeding New ceramics Knowledge economy convergence SMEsToT Finance Limousin Allocating scarce capital to a few domains = distorsion

12 Animal genetics and breeding New ceramics Knowledge economy convergence SMEsToT Finance Limousin *Innovative projects are complementing existing productive assets to generate structural changes

13 We need S3, do we need a policy for S3? A counter-example in Switzerland – Some times markets do not fail in structuring entrepreneurial knowledge, generating entrepreneurial discovery and facilitating co-ordination at early-growth stage – Some times they fail! Entrepreneurial discoveries – Information externalities – Capabilities – Aligning incentives Early-growth – Coordination – Industry-specific public goods

14 Conclusion S3 as part of the new generation of technology policy (both non neutral and competition friendly)


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