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Outward-looking strategy


Written by Nicola Bellini

Reviewed by David Walburn

 

The concept

How to implement it?

Step in the RIS3 process

What can be expected?

A quote

References

Expert's comment

 

The concept


According to the Guide to Research and Innovation Strategies for Smart Specialisation[1], “A major novelty of the smart specialisation approach is that a region has to make its strategic decisions taking into account its position relative to other regions of Europe, which implies that the RIS3 approach requires looking beyond the regional administrative boundaries. (…) This type of analysis is important because the concept of smart specialisation warns against 'blind' duplication of investments in other European regions. Such blind duplication of efforts could lead to excessive fragmentation, loss of synergy potential, and ultimately could hamper the reach of the critical mass required for success. On the contrary, interregional collaboration should be pursued whenever similarities or complementarities with other regions are detected.”

In the world of open innovation and global value chains no serious innovation policy can be effective without the ability to connect the local asset knowledge with knowledge existing “elsewhere” (in other regions, in other countries of Europe and much beyond). The risk of a self-referential innovation policy at regional (as well as at national) level is leading to the risk of its irrelevance, because in most cases the achievement of critical mass and the viability of “smart” specialisations depend on their international / inter-regional framing. Furthermore, having an outward-looking approach allows also to identify opportunities that may not derive from the present critical mass of innovative activities within the region, but, e.g., from some especially valuable link with outstanding research centres or world-class companies located elsewhere.

Although many would agree on all this in principle, the translation of this concept into policy practice is far from obvious and easy. First of all, it requires a significantly increased availability of (comparable) data about other regions in Europe and worldwide. Secondly, it implies to assess the position of a regional economy not just in terms of rankings, but also with reference to the “value chains” and to the “relational assets” of regional actors (institutions, companies, universities etc.). Thirdly, as interregional cooperation is a complex and uncertain process, it suggests the need for institutional conditions favouring trust and effective cooperation between regional governments.

 

How to implement it?


Implementation requires a sound and consistent analysis of the regional economy in an inter-regional / inter-national perspective, especially through:

  • benchmarking and the “comparative positioning” with respect to other regions, i.e. by identifying leading regions and similar regions as reference for the areas of specialisation. This exercise is not without limitations: e.g. similar regions are not necessarily better partners for cooperation than different, but complementary ones;
  • the analysis of the position of regional actors, and especially companies, within value chains.

In policy terms, actions should aim at:

  • exploiting the existing inter-regional networks for the development of joint or complementary initiatives: this requires an assessment of results and opportunities to go beyond the exchange of knowledge on “good practices”;
  • capitalizing on and mobilizing the relational assets of the whole regional society, especially of those actors with a distinctive inter-regional and inter-national activity (e.g.,universities and companies);
  • opening the process by adopting an international dimension (e.g. involving international experts in monitoring and evaluation).

 

Step in the RIS process


Step 1: Analysis of the regional context and potential for innovation

 

What can be expected?


Emphasizing the outward dimension of the strategy:

  • increases the range opportunities for the differentiation strategies based in the co-invention of applications and related variety;
  • allows for a faster development of niches that are actual or potential part of trans-regional (or even global) value chains;
  • increases the opportunities to attract viable inward investments and/or human resources (talents);
  • increases the quality and speed of policy learning.

 

A quote


“There are more things in heaven and earth, Horatio, Than are dreamt of in your philosophy.” by William Shakespeare, Hamlet, Act 1

 

References


  • Bellini N., Hilper, U. ed.s (2013),  Europe’s Changing Regional Geography. The Impact of Inter-regional Networks. London: Routledge
  • Mariussen Å., Virkkala S. ed.s (2013), Learning Transnational Learning. London: Routledge

 

Mr Nicola Bellini


 

Nicola Bellini is Professor at the Scuola Superiore Sant’Anna in Pisa (Italy). Previously he was: Advisor for economic policy of the President of the Regione Emilia Romagna (1990-1991); Research Fellow, Nomisma - Economic Research Institute (1982-1990).  From 2009 to 2011 he was the Director of the Regional Institute for Economic Planning of Tuscany – IRPET. He is author and editor of books and articles on industrial policy, local and regional development, business support services and place branding. On behalf of DG Regio, he has been involved in the expert assessment of RIS3 strategies in Italy (Lombardy, Apulia, Campania, Basilicata, Calabria, Sicily) and Spain (Castilla y León).

nbellini@sssup.it

 

Expert's comments


Making an outward-looking approach the starting point in the preparation of a regional economic development strategy, provides one of the more useful insights in this series of papers. It might seem like common sense to take the external context into account when seeking ways in which a regional economy might become more competitive, but this does not always happen in practice.  Why should it be necessary for the paper to repeat the warning against “blind duplication of investments in other European regions”?

The reference to “blind duplication” here presumably refers to public policy and the commitment or investment of public sector resources in the pursuit of the objectives of such policy. Unfortunately there is a long record in economic development of policy not being driven by a rigorous analysis of problems and opportunities of the sort which would emerge from developing an outward-looking strategy. Instead policy is often driven by fashion – the latest “bid idea” – or by politicians confident that their plans of action do not need to take into account the accumulated experience of professional economic development practitioners.   A review of the changes in policy and priorities over the last couple of decades gives a good indication of the influences of changes in fashion, against a background where the fundamental challenges of facing policy-makers have remained largely the same.

The danger here is that the minds of policy-makers may be closed to the sort of alternatives that prior analysis would reveal. It can lead to attempts to impose measures which are inappropriate for the problems and opportunities faced by a regional economy. The great value of the approach outlined in this paper is that the process has to start with the understanding of the actualities of the region in the context of its competitiveness and complementarities with other regions – and then seeking to devise and implement bespoke solutions.

The paper rightly recognises the practical difficulties in taking such an approach, but there really is no alternative. Trying to take short cuts will result in less effective programmes.

The paper rightly identifies the important role that the private sector should play in the development and implementation of an outward-looking strategy. The paper makes reference to “companies”, but private sector participation should include businesses which are key to the productive capacity of the region, and those which provide intermediary and support services within the region. Creating effective means of engaging with private sector companies should be an important priority for an outward-looking strategy.

 

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@europe.com



[1] Foray D. et al. (2012), Guide to Research and Innovation Strategies for Smart Specialisation (RIS 3), May 2012.

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