1. The role of universities in Smart Specialisation
John Edwards
JRC IPTS - S3 Platform
Berlin, 27 November 2013

2. Context of 2014-2020 funding cycle
Europe's challenges:
Lack of economic growth following economic and financial crisis
Increasing imbalances across the continent (and within many countries)
High social costs of austerity and declining public confidence
Increased competition from other parts of the world

3. Context of 2014-2020 funding cycle
Europe's responses:
Sound public finances
Structural reforms – restoring competitiveness (e.g. more flexible labour markets, completing of the single market)
Smart consolidation – protect pro-growth budgets
Innovation to compete globally and tackle social and environmental challenges (Europe 2020)

4. Investment in R&D is part of the solution to exit from the economic crises

5. Is there a link between innovation and regional growth
Is there a link between innovation and regional growth? “The general consensus…is that the driving force behind long-term economic growth is science, technology and innovation in its different forms and facets” (OECD 2011: Regions and Innovation Policy)
Este gráfico permite apreciar la posición que, con respecto a los indicadores compuestos de output económico e innovador presentan las diferentes CCAA españolas, en el conjunto de NUTS2 de la UE-27. En general, las CCAA españolas están mejor posicionadas en output económico (por ejemplo, en output económico el PV es la 71 de 262 NUTS2, mientras que en output innovador es la 146). Para corregir el hecho de que eso se pueda deber a la especialización sectorial y tecnológica del PV, he identificado dentro de las NUTS2 europeas aquellas cuya estructura sectorial y de patentes se encuentra más próxima de la del PV, y tales regiones las destaco con un rombo amarillo; pues bien, veo que el PV se sitúa muy bien en términos de output económico frente a tales regiones, mientras que en output innovador es superado por bastantes de ellas. En el PV (como en la mayoría de las CCAA españolas) parecería existir una cierta paradoja de la innovación: un desempeño económico que no se explica por su output innovador.
Source: Mikel Navarro et al, Basque Competitiveness Institute 2010.
"Until the 1980s, technology and innovation were under recognised influences in the explanation of differences in the rates of economic growth between regions in advanced industrial nations..." (Townroe) 5 5

6. Innovation Union for Europe
One of seven flagship initiatives of Europe 2020
Aim is to create the best conditions ('ecosystem') for researchers and entrepreneurs to innovate
A broad approach to innovation (not just high tech, also product, service, social, public sector, eco)
34 commitments – 24 & 25 concern structural funds and smart specialisation

7. What is Smart Specialisation ?
"Smart Specialisation is a strategic approach to economic development through targeted support to Research and Innovation"
What is Smart Specialisation ?
= evidence-based: all assets
= no top-down decision, but dynamic/entrepreneurial discovery process inv. key stakeholders
= global perspective on potential competitive advantage & potential for cooperation
= source-in knowledge and technologies etc. rather than re-inventing the wheel
= priority setting in times of scarce resources
= getting better / excel with something specific
= focus investments on regional comparative advantage
= accumulation of critical mass
= not necessarily focus on a single sector, but cross-fertilisations
Smart =
- evidence-based: SWOT analysis & foresight, taking all assets of a region into account, in particular industrial structures, science, technology and training capacities, skills, environment, market access, but also "difficult assets" (aging population, remote position, rough climate …),
- no top-down decision, but: self-discovery process (Hausmann and Rodrik 2004) with stakeholders to identify potential, actors, cross-fertilisation potential, etc. - possibly using creative problem solving / brainstorming tools (= "help them discover what they know themselves") and developing the smart specialisation concept
- look beyond borders: global perspective to be able to assess potential of competitive advantage compared to other specialised regions & potential for cooperation
- source in knowledge, technologies etc. rather than re-inventing the wheel.
Specialisation =
- priority setting (not "coffee for all")
- getting better (than others) with something concrete, rather than doing a little bit of everything, but without becoming a master in it
- accumulation of critical mass (be it internal to the region or via external insourcing & cooperation)
not necessarily focus on a single industrial / service sector (or individual company), but cross-sectoral
When looking at potential new activities analyse if they are technologically related to existing strengths, as evidence from evolutionary economic geography, especially the concept of 'related variety' shows that this creates the best for success (combination of embededness + relatedness)
Canary island example on how to go about this by specializing through the adaptation of a generic technology – ICT in the tourism sector: a recently internationally awarded ERDF island project in the Balearics which is a new on-line booking system called Avanthotel.
Avanthotel is an enterprising public-private partnership supported by the ERDF, within the framework of the Balearic Islands first innovation strategy promoted by the EU Commission, enabled local businesses, mainly small hotels, to align on customer demand, embrace ICTs and reconnect with a new generation of holidaymakers. In 2007 it involved over 450 companies with a total turnover of over 6m € and annual growth rates above 100%. 7

8. In a nutshell: Smart Specialisation is based on 4 Cs
Competitive advantage: match R&I with business and develop links (related variety); adoption of (generic/new) technologies for diversification/modernisation of sectors + explore emerging areas Policy Choices (tough ones): select few priorities on basis of specialisation & integration in international value chains Critical mass of resources & talent: cooperation between regions by avoiding duplication and fragmentation Collaborative Leadership: involve stakeholders from academia, businesses, public administrations and civil society ("quadruple helix") & synergies between funding instruments (EU, national, regional)

9. The evolution of Smart Specialisation
Expert workshop in Barcelona, June 2008, organised by JRC-IPTS
JRC Scientific and Technical Reports, 2009: « The question of R&D specialisation – Perspectives and policy implications »
“Knowledge for Growth expert group” launched the concept in the framework of ERA (2009)
The concept is incorporated in the Europe 2020 agenda as part of the Innovation Union flagship initiative (2010)
EC Communication « Regional policy contributing to smart growth in Europe 2020 » - smart specialisation as a key concept for the EU regional and cohesion policy
EC proposes S3 as a 'thematic ex-ante conditionality' for R&I spending under ERDF
S3 Platform is established at JRC-IPTS (2011)

10. How to develop a S3?

11. Why should universities care about smart specialisation?
Increasing concern about social and economic impact of publicly funded universities (e.g. ranking and funding; U-multi rank, UK REF, Austira Leistungsvereinbarungen, Spain – Aneca)
Large amount of European Structural and Investment Funds linked to smart specialisation
Opportunity to build partnerships with local and regional authorities for mutual benefit
Synergies between support for R&I through the structural funds and European / national competitive financing will determine the overall funding structure
Universities are increasingly being asked to justify their role:
Research Excellence Framework (UK): 20% Impact rating
Leistungsvereinbarungen (Austria): Includes RIS3!
Aneca (ES): Intend to integrate impact into evaluation
U-Multirank: Pilot EU ranking system (U-Multirank will rate universities according to their research reputation, teaching quality, international orientation, success in knowledge transfer and regional engagement. Each area will be assessed with scores on up to ten indicators, such as, for teaching, student graduation and employment rates, and, for knowledge transfer, the number of patents registered and companies started)
There is a common purpose in the Commission among the different DGs to not only have centres of innovation excellence within the EU, but in the spirit of the Treaty's territorial cohesion objective, to enable all regions to achieve a knowledge-based transformation of their economies building on their existing strengths and assets and shaping competitive advantage.
There are aspects of both the structural funds and Horizon 2020 that support each other and engagement in one area will smooth the process to be a beneficiary in another e.g. the ERA chairs pilot actions from in the 7th FP, the Twinning and Teaming actions, mobility schemes to create more connectivity. Likewise, projects in the structural funds will allow universities to create capacity for benefiting more from the competitive funds.

12. Cohesion Policy funding for R&I
Cohesion Policy innovation support over total aid:
4% in 89’-93’
7% in 94’-99’
11% in 00’-06’
25% in 07’-13’

13. Cohesion policy - planned investment by major investment fields - 2007-2013 (in € billions)
see:

14. ERDF 2014-20: Concentration on R&I, ICTs and SMEs to maximise impact
* At least two of four themes must be selected
Research and Innovation
Energy efficiency and renewable energy (compulsory)
SMEs competitiveness
Access and use of ICTs
Developed regions
Transition regions
Less developed regions
(plus island and outermost regions)
Cohesion Policy 14

15. TOTAL 325.1 Billion EUR Less developed regions 164.3
Transition regions
31.7
More developed regions
49.5
Cohesion Fund
66.4
European territorial cooperation
8.9
Of which
Cross border cooperation
6.6
Transnational cooperation
1.8
Interregional cooperation
0.5
Outermost regions and northern sparsely populated regions
1.4
Youth Employment initiative
3.0
TOTAL
325.1
New Youth employment initiative
EUR 6 billion
Available to all regions in EU-28 with levels of youth unemployment > 25 % (2012 data)
EUR 3 bn from targeted investments from the ESF
+ EUR 3 bn of match funding from a dedicated YEI budget line
Maximum EU co-financing rate
80-85 % in less developed and outermost regions;
60-80 % in new category of transition region;
50 % in more developed regions. Enhanced financial engineering provisions

16. Investment Priority 1 Council modifications
(1) strengthening research, technological development and innovation:
(a) enhancing research and innovation (R&I) infrastructure […] and capacities to develop R&I excellence and promoting centres of competence, in particular those of European interest;
(b) promoting business […] investment in innovation and research, and developing links and synergies between enterprises, R&D centres and higher education, in particular product and service development, technology transfer, social innovation and public service applications, demand stimulation, networking, clusters and open innovation through smart specialisation […] supporting technological and applied research, pilot lines, early product validation actions, advanced manufacturing capabilities and first production in Key Enabling Technologies and diffusion of general purpose technologies;*
*) ICT, photonics, nano-electonics, nano- and bio-technologies, advanced materials, etc..
Cohesion Policy

17. An Agenda for Modernisation of Europe’s Higher Education System (COM (2011) 567)
‘In assessing the role of HEIs in the region it is useful to identify the steps needed to create a ‘connected region’ in which the institutions are key players. Through this connection process institutions become key partners for regional authorities in formulating and implementing their smart specialisation strategies’
‘They can contribute to a region’s assessment of its knowledge assets, capabilities and competencies, including those embedded in the institution’s own departments as well as local businesses, with a view to identifying the most promising areas of specialisation for the region, but also the weaknesses that hamper innovation’

19. Contribution of universities to S3
Generative
Research related (but not limited) to regional priorities
Multi- and cross- disciplinary
Connectivity – knowledge nodes
Support regional analysis
Absorptive
Help build capacity to ensure local firms absorb knowledge
Provide demand through teaching and learning activities
Nurture social ties that drive RIS
Collaborative
Neutral regional brokers
Reach Out – need 'boundary spanners'
Reach In – Co-production of knowledge
Leadership
Support regional vision and partnership
Propose joint activities
Place marketing
GENERATIVE
Opportunities should be sought to align current or future industrial capabilities of a region with the research profile of local universities BUT knowledge may be better to be sourced from outside the region and should be careful to avoid regional lock-in.
Establishing how a diverse research base (that cannot be emulated by the private sector) can contribute to ‘slack’ in the regional innovation system in order to underpin innovation (e.g .knowledge spillovers , facilitating related variety amongst sectors, supporting the uptake of platform technologies)
Finding a place in the European and national innovation ecosystem where some universities and some regions focus on different stages in the innovation process (e.g late stage knowledge application as distinct from early stage generation of new knowledge)
Source: Based on Kempton et al (2013) Universities and Smart Specialisation, JRC S3 Policy Brief #3, European Commission

20. The ‘disconnected’ region
No boundary spanners
Focus on supply side, transactional interventions
Ineffective or non existent partnership
Lack of a shared understanding about the challenges
Entrepreneurs ‘locked out’ of regional planning
PUBLIC SECTOR
Lack of coherence between national and regional/local policies
Lack of political leadership
Lack of a shared voice and vision at
the regional/local level
PRIVATE SECTOR
No coordination or representative voice with which to engage
Motivated by narrow self interest and short term goals
Dominated by firms with low demand or absorptive capacity
for innovation
HIGHER EDUCATION SECTOR
Seen as ‘in’ the region but not ‘of’ the region
Policies and practices discourage engagement
Focus on rewards for academic research and teaching
Source: Goddard, J and Kempton, L (2011) Connecting Universities to Regional Growth, European Commission

21. The ‘connected’ region
Strong partnerships based on shared understanding of the barriers and how to overcome them
Generating intellectual and human capital assets for the region
HIGHER EDUCATION
SECTOR
Developing coherent policies that link territorial development to innovation and higher education
PUBLIC SECTOR
Investing in people and ideas that will create growth
PRIVATE SECTOR
Evidence based
policies that
support ‘smart’
innovation
and growth
Analysis of evidence and
intelligence
for planning
Building the
infrastructure
for growth
Skills development, commercialisation of research
Source: Goddard, J and Kempton, L (2011) Connecting Universities to Regional Growth, European Commission

22. How to start entrepreneurial discovery process Public administration
Kick-start with consultation in quadruple helix:
Detect potential boundary-spanners between different stakeholder / interest groups, new innovative entrepreneurs, hidden champions, or persons with a potential for this is one of the aims of this first step. …
See new annex III of RIS3 Guide
Business
manufacturing and services, primary sectors, financial sector, creative industries, social sector, large firms, SMEs,
young entrepreneurs, students with business ideas, cluster and business organisations,
Research & education
public and private research bodies, universities, education and training,
science and technology parks,
Technology transfer offices, etc.
if relevant at different government levels, agencies e.g. for regional development,
business advice,
public procurement offices, incubators, etc.
Public administration
NGOs and citizens’ initiatives related to societal challenges for which innovative solutions would be helpful, consumers associations,
Talents! etc.
Civil society / Users 22

23. Avoid equating research excellence with the ability of a regional economy to generate innovation

24. EU R&D and Innovation Policy – Synergies and Complementarities
Horizon 2020 and Cohesion Policy: Differences and complementary objectives
EU R&D and Innovation Policy –
future Horizon 2020
EU Cohesion Policy
Differences
Based largely on individual R&D and innovation projects of a
pre-competitive nature aiming at advancing knowledge and
fostering innovation for growth and jobs, including but not
exclusively frontier research (also co-funding national and
regional programmes)
Based on multiannual programmes aiming at increased to
reduce regional disparities, including through close to the
market competitive R&D and innovation efforts
Awarded directly to final beneficiaries (firms, public and private
R&D centres and Universities, including national and regional
governments in certain cases – Art. 185, ERA-NET etc.)
Awarded through shared management exclusively to national
and regional public intermediaries
Through transnational competitive calls addressed to
international groupings through peer review based on
excellence criteria
Non competitive attribution addressed to regional players
based on strategic planning negotiation (however calls possible
at national or regional level)
Synergies and Complementarities
Horizon 2020 will focus on tackling major societal challenges,
maximising the competitiveness impact of research and
innovation (Industrial leadership) and raising and spreading
levels of excellence in the research base
Cohesion policy will focus on galvanising smart specialisation
that will act as a capacity building instrument, based on learning
mechanisms and the creation of critical skills in regions and
Member States.
Cohesion Policy looks at the regional assets and potential. However, so far many of the priority areas identified by consultants appointed by DG Regio to assess RIS3 are very similar to the grand societal challenges, including Energy, Life Science, ICT, Environment, New materials

25. 134 EU regions
+ 11 EU countries
+ 2 non-EU regions

26. NEW! Transantional Cooperaion Benchmarking and targeted support
Methodological Guidance
Interactive tools, S3 Newsletter and Website
Country- and Macro-region events and targeted seminars at IPTS
Research and analysis
Peer Review workshops & trans-national learning
S3 Platform has expanded its activities over time and we will be continuing to support Member States and regions in the coming months and years as the strategies are finalised and we move into the implementation phase.
We have already been active in many areas, including methodological guidance, peer reviews and thematic workshops, specific activities related to ICTs and the digital agenda, as well as research projects that analyse the process of RIS3 formation.
Extra support for digital agenda and ICT sections of RIS3
Thematic workshops & working groups
RIS3 assessment
and support to REGIO desks

27. Universities and the S3 Platform
Working with the European University Association
Two day workshop in Seville, February 2013
Open Days workshop in October 2013 together with DG Education and Culture
More activities in 2014, including high level conference in Brussels (June tbc)
Find out more:

28. Thank you! http://s3platform.jrc.ec.europa.eu 28