Supporting industry clusters is a popular economic development strategy in the US today. Our colleagues in Europe have been supporting cluster development for some time now, and, in fact, for many, clusters have become passe. Economic developers in Europe are examining new approaches to regional development, and a number of new ideas are emerging. The concept of smart specialization strategies is gaining a lot of traction. (You can learn more in the background paper available here.) Championed by the European Association of Regional Development Agencies (EURADA) and leading officials within the European Union, smart specialization strategies (S3) seek to create a regional “commercialization ecosystem for new ideas.” What this means in reality is that European regions will move away from the current top-down cluster development strategies where central government agencies identify target clusters and steer R&D investment to large research instiuttions.
S3 is a more bottom-up approach that is led by businesses who opt to pursue a host of potential strategies, including diversification into new markets, pursuit of radical new innovations, or modernizing through the adoption of new technologies and processes. S3 strategies move further down in the innovation process. Instead of simply investing in R&D, these model are focused on commercialization and business development. Incubation, capital access, and entrepreneurial development strategies will assume more prominence. These processes are managed and promoted by regional innovation intermediaries that operate throughout Europe. Ohio’s Jumpstart or San Diego’s CONNECT are US-based examples of such networks.
This short summary does not do justice to the many nuances of the smart specialization approach. At the strategy level, the concepts make great sense. But, of course, the devil will be in the details as more regions use these tools and approaches. Regardless of the outcomes, the ongoing discussion around S3 is worth following if you have interest in new approaches to regional innovation.
