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

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

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

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

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

9. Policy design Entrepreneurial discovery & new activities Inclusiveness
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. Allocating scarce capital to a few domains = distorsion
Limousin
Knowledge economy convergence
New ceramics
Animal genetics and breeding
Allocating scarce capital to a few domains = distorsion
SMEs
ToT
Finance

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

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)