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Policy mix


A policy mix describes a combination of different but complementary public policy interventions in the regional economy to achieve a particular objective.

Written by Christian Saublens

Reviewed by David Walburn

 

The concept

How to implement it?

Step in the RIS process

What can be expected?

A quote

References

Experts' comments

 

The concept


The idea behind this concept is that market failures in the regional economy are rarely caused by single factors, but by several. Effective solutions are therefore likely to be dependent on a mix of policies to address the problems simultaneously.

Each strand of policy may require a number of different instruments, resulting in a complex pattern of activity overall. For example, if the policy objective is to boost the level of research and development activity in a region’s SMEs, there may be a need to design a call for innovative projects, improve business/university links, stimulate the supply of specialist finance, help attract suitably qualified managers, provide supportive, specialist  working environments such as business incubators, and provide management coaching on IPR and project management.

Today’s regions should be able to combine well  established measures, such as those listed above, with new, experimental  interventions,and designing bespoke measures to suit their particular circumstances.  This depends on development agencies keeping themselves well informed about policy interventions and instruments  nationally and internationally. 

The following graph tries to illustrate the concept by showing how a set of horizontal and vertical policies are interacting among each other:

 

How to implement it?


To think in terms of value chains and to remember that there is a law in physics which tells us that a chain is only as strong as its weakest link. This approach is in line with the need to take into account the systemic interactions of different policy instruments.

 

Step in the RIS process


Step 5. One of the critical issues of the implementation of the smart specialization process is the need to combine the different regional strategies amongst themselves to build a coherent framework.

 

What can be expected?


  • A qualitative and quantitative increase of private and public investments for a given policy priority.
  • A review of the uniqueness of the regional policy instruments: often regional public authorities are using the same types of instruments without integrating them in a real regional eco-system.
  • An answer to the question: which portfolio of policy instruments are most effective for a given aim, such as: (i) how to increase private investment in R&D+I; (ii) how to support SMEs to innovate; (iii) how to enhance cooperation between SMEs; (iv) how to support the take up of key enabling technologies by SMEs; (v) how to help SMEs to diversify geographically or technologically; …

 

A quote


"A policy mix perspective places less emphasis on the design and evaluation of individual instruments of innovation policy and focuses more on questions of completeness, balance and interaction among policy instruments." [1] - OECD's Working Party on Innovation and Technology Policy

 

References


 

Mr Christian Saublens


 

Christian Saublens has more than 30 years of working experience in European trade organizations. Since 1992 he is the Executive Manager of EURADA, the European Association of Development Agencies, a network of 145 organisations. Christian has been involved in the organization of numerous conferences and meetings dealing with all matters related to regional development. He wrote several papers and working documents on business support schemes for SMEs. He played an important role for the dissemination in European regions of concepts such as benchmarking, business angels, investment readiness, proof of concept, clusters, open innovation, financial engineering, crowdfunding, … Several times Christian has been appointed as an expert by the European Commission and the Committee of the Regions.

christian.saublens@eurada.org

 

Experts' comments


Analysing the nature and causes of a market failure, and deciding on the policies and policy instruments to be deployed to address  the problem,  are the most critical processes in the work of regional development agencies.   There are often circumstances which make it difficult to do this work effectively. There may be political pressure for a quick fix which does not match the nature of the problem.  A new policy instrument may be in current  fashion, creating a desire to put it into effect without adequate assessment.  Perhaps most common of all is sloppy working by some agencies, not seeing the need for rigorous analysis, and not having the expertise or knowledge to identify the most appropriate measures required.

Three things are clear:

  • Firstly, in almost all cases, a mix of measures will be needed to tackle an economic development problem effectively.
  • Secondly, measures which are understood, and fit for purpose are vital if scarce resources are not to be wasted, and the credibility of the agency is not to be undermined by failure.
  • Thirdly, these matters can only be understood and dealt with if the knowledge exists within the agency about international best practice in economic development, and there is a willingness to see such knowledge applied.

 

Mr David Walburn


After a career in business David Walburn joined Greater London Enterprise in 1986 where he was responsible for venture capital and other small business support, before becoming Chief Executive of the organisation. He was the Chair of the London Business Angels Network and played a key role in the setting up of the European Business Angels Network. He has worked with the UK government and the European Commission on developing public policy initiatives to improve the financing of small and medium-sized enterprises. He was the Chair of Capital Enterprise, the umbrella body for organisations supporting micro business development in London, until 2012.

For the last ten years he has been a Visiting Professor at London South Bank University where he headed the Local Economy Policy Unit and was the managing editor of the journal Local Economy.

He has served as President of EURADA, and been a member of a number of advisory bodies of the European Commission.  He has been an active member of the International Economic Development Council in Washington DC and has a wide range of international contacts with economic development organisations.

He continues to write and lecture on small business finance and regional economic development.

davidwalburn@london.com



[1] OECD: "Report on the policy mix for innovation in Iceland".

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