Papers in Evolutionary Economic Geography

July 1, 2017

# 17.17 Smart Specialization policy in the EU: Relatedness, Knowledge Complexity and Regional Diversification

Pierre-Alexandre Balland, Ron Boschma, Joan Crespo and David L. Rigby

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Smart specialization has become a hallmark of the EU’s Cohesion Policy. Envisaged as a bottom-up initiative identifying local knowledge cores and associated competitive advantages, the operationalization of smart specialization has been rather limited, as a coherent set of analytical tools to guide the policy directives remains elusive. To tackle the weak underpinning of smart specialization policy, we propose a policy framework around the concepts of relatedness and knowledge complexity. We use EPO patent data to provide evidence on how EU regions develop new technologies in the period 1990-2009. We find that diversifying into more complex technologies is highly attractive but difficult for EU regions to accomplish. Regions can overcome this diversification dilemma by developing new complex technologies that build on local related capabilities. We use these findings to construct a policy framework for smart specialization that highlights the potential risks and rewards for regions of adopting competing diversification strategies. We show how potential costs of alternative strategies in regions may be assessed by making use of the relatedness concept, and how potential benefits of various smart specialization strategies can be derived from estimates of the complexity of technologies. A series of case-studies of different types of regions illustrate the utility of this policy framework.

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November 1, 2013

# 13.22 Constructing Regional Advantage and Smart Specialization: Comparison of Two European Policy Concepts

Filed under: 2013 — Tags: , , — mattehartog @ 6:41 pm

Ron Boschma

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This paper discusses two influential policy concepts at the European level that aim to promote economic diversification of regions, that is the Constructing Regional Advantage concept (CRA) and the Smart Specialization concept (SS). Both approaches are in favour of policy intervention but defy ‘one-size-fits-all’ policies as well as ‘stand-alone’ policies that create new activities in regions from scratch. Although ‘picking-the-winner’ policies are rejected, both policy frameworks identify and prioritise ‘promising’ targets for policy intervention, but they do so differently. The SS concept organizes this identification process through entrepreneurial discovery in which entrepreneurs select the domains of future specialization. The CRA concept focuses on identifying related variety and bottlenecks that prevent related industries in regions to connect and interact. Crucial in both frameworks is the strong involvement of local stakeholders. However, both approaches also agree that rent-seeking behavior, corruption and lock-in are potential threats to effective policy making. To avoid this, both are in favor of an open and inclusive approach and a policy implementation process that is closely monitored. The paper argues that the two policy concepts can provide useful inputs to develop a smart and comprehensive policy design that focuses on true economic renewal in regions and that avoids rent-seeking behaviour of vested players.

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