Analytics, EU – Baltic States, Good for Business, Investments, Modern EU

Globalisation has brought enormous benefits to the less-developed economies of the world and many opportunities for Europeans. However, while the benefits are widely spread, the costs are often borne unevenly as the Commission’s experts highlighted. To take up the challenge of economic modernisation, the EU states need to empower its regions and help them create value. This means embracing innovation, digitisation, decarbonisation and developing people's skills.

In July 2017, Commission proposed a new set of actions to further help European regions invest in their niche areas of competitive strength (so-called smart specialisation strategies, 3S) and generate the innovation, resilience and growth needed. Commission’s reflection paper on 3S issues see at: http://europa.eu/rapid/press-release_IP-17-1995_en.htm

Using (harnessing) globalisation benefits, the Baltic States’ regions can benefit from a new EU support in quick creating optimal (resilient) economies, corresponding industries/manufacturing sectors and other services. Baltic States and regions are invited to apply until the end of October for two Commission’s tenders; if selected, they can benefit from the EU’s financial and advisory support in transforming their economies and modernising their industries. The results of the calls will be published in early December.

The Union’s “smart specialisation” approach

Since 2011, the European Commission provides advice to regional and national authorities on developing and implementing their “specialisation strategies” through the so-called “smart specialisation platform/strategy” (3S).

Generally, smart specialisation is a kind of innovative approach that aims to boost growth and jobs by enabling each region to identify and develop its own competitive advantages. Through EU-states’ partnership and bottom-up approach in the states, smart specialisation brings together local authorities, academia, business spheres and the civil society, working for the implementation of long-term growth strategies supported by EU funds.

Hence, in the 3S approach, “smart” - means to identify the region’s own strengths and comparative assets; “specialized” - means to prioritise research and innovation investment in competitive area; and “strategic” - means defining a shared vision for regional innovation.

http://ec.europa.eu/regional_policy/sources/docgener/guides/smart_spec/strength_innov_regions_en.pdf

Introduced as an instrument to ensure effective EU Cohesion Policy spending in research and innovation, smart specialisation has required all regions to design investment strategies based on their own competitive assets, e.g. from agro-food specialties and tourism to nanotechnologies and aerospace, to name a few.

Under these strategies, local businesses are receiving financial support to develop innovative products and expand beyond local markets. These strategies have also resulted in better links between science and business as well as improved coordination at all levels of local governance.

Commissioner for Regional policy, Corina Creţu underlined in Brussels (29 September 2017) that there were five steps which any state and/or region should take to get a share “in a value chain in a globalised economy”. These steps are: = embracing innovation, = increasing digitalisation, = reducing pollution (so-called decarbonisation process), = developing people's skills, and = breaking down barriers to investment. 

3S advantages

The 3S approach during last seven years has already facilitated mutual learning, data gathering, analysis, and networking opportunities in about 170 EU regions and 18 national governments. Besides, thematic 3S platforms have also been created. Various EU regions join forces and pool resources on the basis of matching smart specialisation priorities in high valued added sectors. For example, partnerships have been developed in the fields of 3D printing, medical technology, smart grids, solar energy, sustainable buildings, high-tech farming, etc.

The smart specialisation approach (3S) was introduced in all EU regional policy programmes in 2014. Since then, such approach improved the way regions design their innovation strategies, by closely involving local businesses and researchers. Over 120 smart specialisation strategies have been developed; more than € 67 billion from the European Structural and Investment Funds and national/regional funding has been available to support 3S initiatives. The Commission predicted that the following 3S achievements: it would bring 15 thousand new products to markets, create 140 thousand new start-ups and 350 thousand new jobs. 

See “smart specialisation in action”, in:

http://ec.europa.eu/regional_policy/sources/docgener/guides/smart_spec/strength_innov_regions_en.pdf

Commission’s pilot projects

The Commission’s pilot projects are building on the previous positive experience. The calls are divided into two groups:

Call 1: Tailored support for regions facing industrial transition. Some European regions have been bearing the costs of globalisation without yet reaping its benefits. They have often suffered substantial job losses and often can suffer from a lack of appropriate skills, high labour costs and de-industrialisation. Regions facing these specific challenges can apply to benefit from:

1) Tailored assistance from Commission’s experts organised in “regional” teams from several Commission departments. They will help regions draw up regional economic transformation strategies. Depending on specific regional needs and assets, the Commission will hire external experts to support the work of the regions. They can be for example experts in financial instruments, business consultants or researchers working on advanced manufacturing processes, etc. The Commission sets aside up to €200,000 per region to cover the costs of this external expertise; the money comes from the European Regional Development Fund (ERDF).

2) Additional support from the European observatory for clusters and industrial change to help regions build cluster policies and link better local firms, research centers and academia.

3) Up to €300,000 from the ERDF to support the early implementation of the regional economic transformation strategies, subject to sufficient progress in their development. This call especially targets “transition” and “more-developed” regions; some 5 regions will be shortlisted.

“Transition” regions would have a GDP per head between 75% and 90% of the EU average; “more-developed” regions’ GDP per head shall be over 90% of the EU average. That means the three Baltic States can de qualified in these two categories. 

Depending on the level of interest, the Commission may repeat the call to shortlist 5 more regions, with a new and similar budget.

Call 2: Interregional partnerships to develop competitive European value chains

The aim of this pilot project is “to commercialise” and scale-up so-called bankable interregional projects in priority sectors such as big data, bio-economy, resource efficiency, connected mobility, health and active ageing or/and cybersecurity.

Transnational partnerships of regional authorities from at least four different EU countries and involving universities, research centers, clusters and businesses can apply for Commission support in developing their projects and accessing new markets.

From 5 to 10 selected partnerships will benefit from tailored support by special teams established within the Commission, involving experts from several thematic departments and external experts. A total of €1 million from the ERDF will support the development of these partnerships.

Regions can apply until 31 October 2017; the results of the calls will be published in early December.

According to Commission’s assessment, Latvia as a moderate innovator and has the following priority areas (so-called 3S) in smart specialisation: 1. Information & communication technologies; 2. Human health & social work activities; 3. Key enabling technologies; 4. Energy production and distribution, and 5. Manufacturing and industry.

http://ec.europa.eu/regional_policy/en/information/publications/factsheets/2017/smart-specialisation-strengthening-innovation-in-latvia

More information on the 3S issues is in the following links: = Inforegio – how to apply?; = Factsheet – Smart specialisation pilot actions; = Factsheet – what is smart specialisation?; = July 2017 Communication – Strengthening Innovation in Europe's regions; = July 2017 MEMO – Challenges ahead: boosting innovation-led growth in EU regions.