Industr ia l change and smart special isat ionlndustr ial competit iveness: Global chal lenge5. regional respon5es

The EU täkes a market-dr iven approach to industr iä lI change, as industr ia l dynamics are increasinqlv

determined by market forces and ""porrr" 1oglobalisation. However, smart specialisation needs totake account of regional diversities and cannot use ao ne-size-fits-a ll äpproach. Sustainable developmentstrategies have to be based on information and expertisedrawn from all levels to assess compararrve advantaoesand create an effective partnership between civil society,business and publ ic author i t ies at regional , nat ional andEU level. This workshop facilitated the exchange of goodpractice from the sustainable development pacts andother forms of trans-national cooperation that supportinnovätive regional strategies and creative industries.

The workshop was chaired by Markku Markkula, Member of the Espoo City Council and of the Committeeof the Regions. the European Commission wds repre-sented by Ruth Paserman, Head of Unit, DG Enterpriseand lndustry (Europe 2020 and National Competitive_ness Policies) and Mikel Landabaso, Head of Unlt, DGRegional Policy (Thematic coordinatjon, innovation).The introduction was followed by project presentationsfrom Anton Schuller, Deputy Director ECO World Styria.Austria, Jan Larosse, Policy Advisor, Enterprise and In_novation Division (EWl), Belgium, and Ni(las Forsling,Head of Secretariat, Northern periphery progrämme.The project presentations were then commented on byProf, Mikel Navarro from the Orkestra-Basque Instituteof Competitiveness, 5pain.

According to Markku Markkula, a new industrial inno_vation policy was needed to encourage faster develop_ment and commercialisation of goods and services andto ensure that EU companies were first out onto themarket. He stressed the need for a maior chanqe in the

working culture and the necessity of building on col-laborative and modern working methods. New mecha_nisms were needed to ensure the cross-ferti l isation ofideas and business models. Furthermore, it was neces_sary to Integrate innovation and research into the devel-opment of products and services to help industries facetheir competitors. Strengthening the knowledge base,boosting research and investments were needed. Smartspecialisation strategies could, by the means of sharedtargets and a more collaborative and interregional ap_proach, become key facil i tators in tacklinq challenoesfaced by European industries.

Ruth Paserman gave an overview ofthe country specif-ic recommendations from the Council, which focused ongrowth-enhancing measures, improvement of businessand administrätive environments and access to financeas we

as energy sustainabil ity etc. The challenge washow to mitigate the country specific differences and jmprove transparency. 5he stressed the role ofthe regionaland local authorit ies alongside national authorit ies insetting the framework conditions for industrial com-petit iveness. These included factors such as the roles of

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public administration, research and innovation, regula-tions on settinq up businesses and ways of facilitatingcross-European access to services, However these wereonly preconditjons, which must be supported by an ac-tive industrial policy and a more proactive approach,where developing clusters and enhancing interculturalexchange had a role to play. In the future, clusters shouldcover not only a larger geographical area but also dif-ferent phases of product development incorporating re-search, production and different competencies broughttogether to create new kinds of clusters, which in turncould contribute to making Europe more competitive.

Mikel Landabaso focused on the need for a newhorizontal and industrial policy across sectors. The Eu-rope 2020 flagship initiative took the policy in the rightdirection; however it was also essential to mix it witha place-specific policy mindset. Federal policies mustmerge to respond to the needs of places, and improvethe mix of existing sectoral and regional policies. TheEuropean Commission promoted smart specialisationstrategies, including DG Regio's measures to support re-gional research policies in favour of smart specialisation.In this new era, four Commissioners had signed up fora common and tangible objective, and financing fromthe structuralfunds had been made available. However,it was stil l important to keep the bigger picture in mind,while including the regional perspective and existingresources. Mr Landabaso then emohasized the need tohave the right people around the right table to discussand decide with a view to having full political commit-ment and the long-term engagement necessary for realchange. The success stories in smart specialisation dem-onstrated the importance of regional and national col-laboration, as well as the importance ofdeveloping met-rics and involving the right stakeholders. ln this context,smart specialisation referred to realistic goal setting andspecialisation which comprised the technological and

industrial linkage needed for convergent and systemicrelevance. The key was to have - or to create - a visionand the partnerships needed for a strategy to be imple-mented at national and regional level.

,an Larosse presented the smart specialisation strat-egy for Flanders, which was aimed at the region's eco-nomic transformation. There was a future for industry ininnovation-driven value chains. Hence, industrial policywas the core policy for change, taking Europe to a newinnovation-driven growth path. This required a trans-formation of value chains and sDecialisation structures.Regions were the focal point for structural change,where specialised clusters could become engines fornew growth. Moreover. strategic governance was crucialfor making smart choices in times of budget constraints.The Flanders in Action framework started in 2006, aim-ing at a ' top 5 region 'posi t ion in Europe by means ofa transition to an innovation-driven growth model. Theinvestments focused on'spearheads'- areas that couldposition Flanders in future value chains with major societal and economic impact. Mr Larosse then mentionedsome of the tools used in Flanders for designing smartspecialisation strategies, such as technology platforms,competence development and open innovation. Theobjective was to identify smart specialisations at thecross-roads of regional innovation competences andmarket opportunities and/or societal challenges.

Anton Schuller represented ECO World Styria, whichwas voted the "World's Best Greentech Cluster" by the USCleantech Group in 2010. The Green Tech Valley Styria-cluster was founded in 2005 by 50 companies from thebiomass, solar, waste management or energy efficiencysectors, and it has developed into a cross-secto ra I clusterof 170 members. lt focused on strong R&D, especially ingreen technologies, and shared joint centres of compe-tences. The cluster's member companies currently en-joyed an average growth rate of 180/o annually, providing15,000 green tech jobs in the region. lts vision for thefuture concentrated on guiding technology companiesinto green technologies and smart internationälisation,on developing technological sample projects and fostering excellence centres in science and R&D.

Niclas Forsling continued the project presentationswith The Northern Periphery Programme 2007-2013(NPP), which was a part of the Commission's TerritorialCooperation Objective. co-funded by the ERDF. Therewere 9 partners from the peripheral communities ofnorthern Europe, including both EU Member and non-

Member States. The programme was aimed at develop-ing their economic, social and environmental ootential.by building on the success of joint projects, in order tocreate innovative products and services. Mr Forslino ex_plored in more detail the question of indusrrial chJngeand smart specialisation in the regional context: regionaldevelopment in rural areas called for entrepreneurshipand innovation as wellas specialisation building on localassets and cultural heritage. The most important clusterswithin the NPP included a creative cluster, a demograph-ic challenge cluster and a health cluster. As examples ofconcrete achievements in the field of new products, asresults of cross-sectoral cooperation, Mr Forsling thenpresented the cases of a see-through bujlding materialLitracon and a Rhubarb candy, produced from farmingwaste (surplus rhubarb) in cooperation with the foodindustry and the creative industry to make it a ,design

product". Mr Forsling concluded by emphasising the im-portance of cross-sectoral cooperation within the fieldsof both products and services, to achieve greater diver-sification, and the need to learn from and about otherclusters, in order to develop a new future and new busi-ness opportunities.

The project presentations were then commented onby Prof. Mikel Navarro from the Orkestra,Basoue ln-stitute of Competitiveness, a partner of the Centre forStrategy and Competitiveness at the Stockholm Schoolof Economics, financed by the European Commission,sDG Enterprise and Industry. prof. Navarro underlined theneed to develop regional strategies and to concentrateon regional assets and build on regional business envFronments with a view to greater effectiveness. Territoriesshould build actively on their competitive advantages _an important factor in place-based policy. Furthermore,the smart specialisation strategies should take into ac-count the role that the generic technologies had in re-newal and diversified specialisation in the regions andanalyse which R&D fields were worthy of focusing on.Sometimes design, organisational improvements andinnovative activities could contribute more to produc-tivity growth than traditional R&D activities, and hencethey must not be ignored in smart specialisatjon. Simi_larly, diversification. aDd innovation could come fromcross-fertil isation from traditional sectors. prof. Navarroconcluded by highlighting the fact that benchmarkingcould help to design smart specialisation strategies andmonitor implementation. lt was important to limit thenumber of priorities in regional strategies and to selectpriorities on the basis of international differentiation. Fi-nally, according to Professor Navarro, there were three

general principles for the regions to include in theirsmart specialisation strategies: fostering of private en_trepreneurship and stakeholder involvement, setting upevaluation and review mechanisms and cooperation be-tween different governance levels and regions.

On the basis of the presentations and the subsequentdiscussions, Mr Markkula concluded that both toD-down and bottom-up approaches were needed. ltremained a challenge ro integrate both for the mobili_sation and commitment needed in creating open in_novation structures and smart specialisation strategies.The role of the EU could be to provide long term visionto all regions with regard to their comparative advantag-es and to develop measures to leverage competitivenessand transformation within the reqions.

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