Many LEPs across the country are waking up to this new European term as with the responsibility being given them to spend EU structural funds from 2014-2020 comes a new approach to targetting resources to be spent on innovation.
The term Smart Specialisation is an approach to developing Regional Innovation Strategies which whilst not compulsory for LEPs is strongly encouraged by BIS in its guidance. This approach has developed in the last 3-4 years. This is in part due to
- The EU was failing to meet its targets under the Lisbon strategy on R and D and Innovation.
- A recognition that ERDF and other resources needed greater targeting to have impact.
- That previous programmes have not impacted sufficiently on Innovation levels.
- That previous programmes were pursuing unrealistic objectives which were not based on objective reality about what was feasible.
- So in the rest of Europe over the last two years regions have been pursuing the development of such Regional Innovation Strategies (labled RIS3 strategies) and a whole process has been developed with academic, business and expert input.
The overall approach can be summed up as
‘Smart specialisation means identifying the unique characteristics and assets of each country and region, highlighting each region’s competitive advantages, and rallying regional stakeholders and resources around an excellence-driven vision of their future’
European Commission 2011
The rationale behind the approach is to
• Make innovation a priority for all regions
• Focus investment and create synergies
• Improve the innovation process
• Improve governance and to get stakeholders more closely involved
• Make regions more visible to international investors
• Avoid overlaps and replication in development strategies
• Accumulate a ‘critical mass’ of resources
• Promote knowledge spillover and technological diversification
So what in practice does this mean. It means that hard choices on what sectors to invest in need making; this choice needs to based on objective analysis and the sectors chosen must be of international significance. Analysis needs to be focused on public and private sector assets; skills and opportunities. Internal cooperation within the regions needs stressing, and clear partnership based governance arrangements need to be in place.
So no longer will a long list of priority sectors do; LEPs needs to be really focussed and realistic about where they put there innovation monies.
The guidance issued by DBIS makes it clear that LEPs do not have to undertake the formal process, but does strongly encourage taking a similar approach. BIS guidance recommends the following (bullet points added)
‘Local investment plans for innovation need
- A strong and objective analysis of the local context and genuine potential for innovation; ensuring this analysis includes;
- lessons learned from previous investments,
- a strong evidence base; the role of existing assets, such as technological infrastructures and systems; linkages of finance, trade and information with similar sectors in the rest of the world,
- and a realistic assessment of the position of those sectors in the locality within the European and global economy.
- The true and relative potential of a local area can be presented within a SWOT (or similar) analysis.
- The SWOT analysis needs to be informed heavily by the views of businesses in the local area, especially those who have (or who are seeking to build) connections with similar or related sectors in other parts of the UK and beyond. Local universities will often have specialist and independent knowledge that can help calibrate the analysis within the SWOT. The depth of that analysis can be proportionate to the scale of the European Structural and Investment Funds to be invested. ‘
A fully RIS3 strategy would take this further and open up the LEP concerned to European peer review where other regions are ask to honestly assess the proposed choices made. This is co-ordinated through the S3 platform based in Seville, Spain.
What are Local Enterprise Partnerships (LEPs)/Devolved Administrations (DAs) doing about this?
Many LEPs and DAs have good early warning antennae and are well under way with such work. Increasingly there appears to be uptake of RIS3 type strategies. It is clear that Northern Ireland and Wales, Greater Manchester and Tees Valley are undertaking full RIS3/S3 strategies. Looking at the S3 platform website Greater Manchester will be undergoing peer review this autumn. Liverpool City Region amongst others is developing an Innovation strategy based on a RIS/S3 approach. Its tender document link is (here) which was published in January 2013.
Our Innovation Performance in the UK is mixed
Why is this necessary. Well the UKs innovation performance is second tier. I won’t go into detail here but the Innovation Union Scoreboard 2013 (IUS) shows that the UK lies in the second of four tiers of country rankings and the Regional Innovation Scoreboard 2012 (RIS) shows that apart from the broad South East other areas of the UK are dragging the UK’s performance down. So there is much scope to improve performance and benchmarking/ peer reviewing with other high performing areas could really be beneficial
The problem for BIS
39 LEPs in England will be reporting back on their priority sectors under the Innovation thematic objective. It is for BIS/CLG to piece this together to paint a picture to the EU of an English approach to S3. This will not be an easy task at all and it might mean that the UK Government will have to get tough with the draft strategies submitted in October as not all LEPs can major in for instance digital technologies but they probably will all want to.
This type of problem existed with the RDA strategies where they all wanted similar sectors; the difference here is that the previous Govt and the EU in the past didn’t try and impose coherency on such plans; now through the need for an S3 approach at the England level both the UK Govt. and the EU will try and enforce it. So be prepared for some hard negotiations post October!
What should LEPs do
1) Read the guidance; not just the UK Governments. Links to guidance/advice are listed below
2) Look at the recently published initial Findings of the Witty Review (particularly the heat maps), the BIS Research and Innovation Strategy for Growth 2011 the 8 industrial sector strategies (link here to the analysis) to see where your area/sectors might feature. You might as well link to the Technology Strategy Boards Strategy as well (here) although the TSB has been found wanting as they unlike many other more succesful European countries do not really recognise the extra benefit of a geographical dimension to promoting innovation. In twitter vocabulary that would be #fail
3) Talk to other LEPs and other regions. In presentations made in the last year it is clear for instance that Tees Valley LEP are well down the process.
4) Look at the S3 platform website; potentially register with them if you are not already.
5) If you are a member (or one of your Universities) of the European Regional Research and Innovation Network (ERRIN) or one of your cities is a member of EUROCITIES initial advice and support can be gained from these networks
6) There is no way that an S3 approach can be properly enacted before October 7th, if starting now but it would be sensible, just like many of the RDA’s before to commit to undertaking an Innovation Plan for the LEP and to consider developing this over the next few months so something more concrete can be submitted by January 2014.
7) Finally and importantly talk to neighbouring/ other relevant LEPs. It will often be the case that particular sectors do not respect LEP boundaries and I think it will be important to discuss the potential for joint or tiered approaches to smart specialisation. This approach can potentially link LEPs across England similarly to the approach taken under for instance the Regional Growth Fund Advanced Manufacturing Supply chain Initiative Project (AMSCI)
Links to Smart Specialisation Work in the UK
S3 in Northern Ireland
S3 in Cornwall
Fact Sheet – Short Guide
Guide to Smart Specialisation (122 pages long)
Guide to Smart Specialisation
Practical Approach to RIS3 and its self assessment
Smart Specialisation Platform
European Parliament Briefing
This has a lot of the academic/ expert justification for the approach and plenty of extra links