Smart Specialisation & the
Bioeconomy
Dr Alessandro Rosiello
Innogen Institute – University of Edinburgh
ICABR - Ravello 21/06/2013
Economic Growth
• Neo-classical Economy (Solow 1950-70)
– Capital-driven growth; trade-off between scale and efficiency; Chandler’s
visible-hand
• Neo-classical Economy (Romer 1980-90)
– Knowledge-driven; spill-over effects
• Entrepreneurial Capitalism (1990 – present)
– New sources of economic growth
– New firm entry: radical innovation, technological diffusion, competitive
advantage based on knowledge creation, exchange and recombination
– Placed-based development
– The Entrepreneurial University/Triple helix
“Entrepreneurs are agents of change and growth in a market economy and they can act to accelerate
the generation, dissemination and application of innovative ideas… Entrepreneurs not only seek out and
identify potentially profitable economic opportunities but are also willing to take risks to see if their
hunches are right “ Audretsch DB Keilbach M (OECD1998) - Entrepreneurship Capital and Economic Growth
Evidence studies
• Rodrik and Hausmann (2003)
– First-mover advantages associated with
“entrepreneurial departures”
– Growth requires smart specialisation
• Evolutionary Economics
– Avnimelech and Teubal (2006): ICT cluster in
Israel (+ GDP: 4%)
– Bresnahan and Gambardella (2004): 7
worldwide cases of ICT clusters
– Cooke, Feldman, Rosiello and Niosi: several
case studies of Biocluster emergence
worldwide
– Saviotti (2008-12), Porter et al (2012),
Boschma & Martin (2010), OECD (2010):
clusters in various industries/countries
OECD (2012) new sources of growth…
• IP, brains and multi-purpose technologies
>> productivity + structural change
• Created, accumulated and stored in
specific locations
• Shaped by techno-scientific institutions
• Tacit/non-codifiable knowledge > hard to
transfer > regional quasi-monopolies
• Incremental dynamics/Critical Mass
Placed-based growth/Structural Change
OECD (2009) Clusters, Innovation and
Entrepreneurship
EU COM (2007-2010) Innovation Clusters in Europe
• up to 40% of jobs in clustered areas (especially
in innovative sectors)
• Majority of newly created jobs in innovative
start-ups
• Statistically significant relationship between
clustering on innovative firms and prosperity (EU
2007-10)
Innovation & Growth
70
Index of economic output
60
50
40
30
20
10
0
0
10
20
30
40
Index of innovative output
Source: Mikel Navarro et al, Basque Competitiveness Institute 2010
50
60
70
Region types…
OECD 2011 – regional knowledge specialisation
Knowledge hubs
Industrial production
zones
Non-S&T-driven regions
Source: Ajmone Marsan G and Maguire K (2011), Regions and Innovation Policy, OECD publishing
Extra-regional links
• Local buzz within Global networks
– Multinationals with similar/complementary activities in various
countries - providing differentiated products to national/regional
markets;
– Multinationals with differentiated subsidiaries worldwide
– Companies with geographically dispersed specialisations - whether or
not dictated by local market specialisation;
– globally-connected companies, with links to various centres of
excellence Sources of competitive advantage “indigenous” not
“endogenous”
• Knowledge generators and users plus public government actors
must work together > holistic strategy regional innovation!!
• European SMEs not working together/not exchanging
knowledge (Autant-Bernard et al, Research Policy, 2013)
“Knowledge producers and exploiters also participate in their external networks, and the value to them
of regional co-operation is in providing a means to secure a unique knowledge advantage that is not as
easily secured elsewhere” OECD (2011) Strengthening Global-Local Connectivity in Regional Innovation Strategies
SMART Specialisation
• Too much specialisation: locked-in dead-ends!
• Too much diversity: fragmentation and/or lack
of critical mass!
• Knowledge/asset variety: key driver for cluster
emergence and growth
• Diffusion of multi-purpose technologies
• Targeting areas of strength…without picking
winners!
SMSP & Regional Growth
• Emerging clusters drivers
for economic growth
• Cohesion policies: entrepreneurship & innovation have
the potential to
– Revitalise declining regions
– Uplifting lagging-behind regions
• Drop barriers to
– Trans-regional collaboration
– Access to innovation markets
• In line with Grand Challenges & EU Strategic Priorities
Cohesion Policy 2014-2020
• ERDF + ESF + CF: €201 billion
• RIS3 – conditionality
• Cohesion < Smart & Inclusive Growth
•
1. Smart & inclusive growth (€491bn)
Education, Youth,
Sport
•
•
•
•
Connecting
Europe
Competitive
Cohesion Business SMEs
Horizon 2020
€80 billion
2. Sustainable growth, natural resources (€383bn)
3. Security and citizenship (€18.5bn)
4. Global Europe (€70bn)
5. Administration (€62.6bn)
EU Multiannual Financial Framework 2014-2020
€1,025 Billion
Policy rationale: market or systemic failure?
or neither of them?
• Business R&D expenditure
• Spillovers
• Financial gaps
•
•
•
•
•
Excessive cognitive distance/Information asymmetries
Dynamic coordination failures
Eco-system management
Local/extra-regional networks
Inappropriate institutional structure
Lack of critical mass
• Neither top-down nor bottom-up
Approach
• Policy-mix coordination
• Entrepreneurship: main translator of knowledge capacity > growth
“A successful smart specialisation strategy will not be found by reading the tables of contents of the most recent issue of
Science or Nature but rather by observing the structures of the economy and supporting the processes of discovery
undertaken by the firms and other organisations operating in this economy” Foray et al (2011) –MTEI-Working Paper
SMSP - Policy mix
RATIONALE
• About diffusion/application of GPTs to revitalise
declining regions/areas of the economy
• Not about deciding which sectors of the
economy R&D should focus on; about
improving the mechanisms through which R&D
 innovation  structural change  growth
Approach
• Picking winners X
• Selecting Sectors X
• Patterns
• Transition, Modernisation, 2 types
of discovery
• Entrepreneurial departures
• Targeting functional areas
• Multi-level governance
SMART
Industrial
Policy
• Specialisation vs Diversification
• Policy Mix
• Effective coordination
• Pro-active strategy
Problems with SMSP
Discovering the right domains is by no means trivial and
technology foresight exercises or critical technology surveys
ordered by administrations tend to produce the same
ranking of priorities, without any consideration of the context
and specific conditions of the “client” for whom the exercise
is carried out. Too many regions have selected the same
technology mix – a little bit of ICT, a little bit of nanotech and
a little bit of biotech – showing a lack of imagination,
creativity and strategic vision. Foray et al (2011) – MTEI WP
• Specialisation…
• A realistic perspective for lagging behind regions?
– Entrepreneurial discovery?
– Dynamic coordination failures: how?
• 3 types of regions?
• (Lack of) absorptive
capacity
• What kind of advantage?
• Multi-level governance
Source: Innovation Clusters in Europe, DG Enterprise and
Industry Report 2010
Smart Specialisation: Policy – EU Commission 2012,
RIS3 Guide
What are the main requirements?:
• Leadership: a long-term commitment of national and regional
authorities
• Strategy: a plan with clear objectives and measurable deliverables
based on a SWOT-analysis
• (Tough) Choices: select few priorities on the basis of international
specialisation and integration in international value chains
• Competitive Advantage: mobilise talent by matching RTD + i and
business needs & capacities
• Critical Mass: identify areas where scale and scope can be
developed (e.g. foresight exercises)
• Stakeholder involvement / Ownership of the strategy
Cohesion policy: 11 Thematic
Objectives towards 2020
•
•
•
•
•
•
•
•
•
•
•
Strengthening research, technological development and innovation
Enhancing access to, and use and quality of, information and communication
technologies
Enhancing the competitiveness of small and medium-sized enterprises, the
agricultural sector (for the EAFRD) and the fisheries and aquaculture sector (for
the EMFF)
Supporting the shift towards a low-carbon economy in all sectors
Promoting climate change adaptation, risk prevention and management
Protecting the environment and promoting resource efficiency
Promoting sustainable transport and removing bottlenecks in key network
infrastructures
Promoting employment and supporting labour mobility
Promoting social inclusion and combating poverty
Investing in education, skills and lifelong learning
Enhancing institutional capacity and an efficient public administration
Innovating for Sustainable Growth: A
Bioeconomy for Europe – EU Commission 2012
• Bioeconomy crucial to deliver EU Cohesion Policy,
especially in restructuring/lagging-behind regions
– Transition towards more sustainable production
– Transition towards increased environmental
stability
– Security in food supply (p.20/21)
• Bio-based industries
– Animal-bio, agro-bio, industrial-bio, marine-bio
(knowledge enabling technologies – KETs)
• Health-bio not included; however better health in
Europe part of the Oslo GCs