EU urges regional governments to do more to woo innovators

Politicians in Europe’s regions need to make a greater effort to bridge the divide between the EU’s new ‘smart specialisation’ regional development policy and the research and technology organisations that will be central to putting it into practice, according to a new policy brief by the EU’s Joint Research Centre.

The EU’s latest thinking on how to stimulate job creation in poorer regions says that universities, research institutes, regional authorities and industry should write roadmaps on how to make the best use of available resources and existing strengths to achieve some form of competitive advantage, in a ‘smart specialisation strategy’.

But many research and technology organisations, which typically occupy a space between the public and private sectors, and between the development of basic science and the commercial application of technology, say the process is far more complex than originally described by the EU, leaving many hesitant to get involved.

To address this, regional authorities have to step up their courtship skills, the report says. 

For example, the paper, which was launched at a policy event hosted by the European Association of Research and Technology Organisations (EARTO), is critical of local politicians in the UK for not building ties with the engineering consultancy TWI, when drawing up regional innovation roadmaps.

While TWI has a string of offices in the UK and is headquartered near Cambridge, hardly any of its client base is in the Cambridge region, with the organisation handling mostly overseas private sector contracts, in places like Australia, Bahrain, Canada, China and India.

“Consequently there has been little or no involvement of the TWI in the local Cambridgeshire smart specialisation strategy,” the brief reads. “It is then a responsibility of regions hosting a TWI office to seek their involvement.” 

In comparison, Finnish policymakers’ wooing of a local research and technology organisation paid off, according to JRC, giving the example of VTT Technical Research Centre, which is located in Espoo near Helsinki and has branches in Oulu, Tampere and Jyvaskyla. When it came to drawing up a cluster strategy, VTT, “only got involved where it was invited”, but signed up to help create a new biomass facility in a former printing works.

From the perspective of research and technology organisations, the attractions of EU regional grants are diluted by the requirement to find external sources of money.

Spain’s Tecnalia, set up in 2001, is charged by the Basque Country government to bring in some of its money from external sources, such as the EU Horizon 2020 research programme, and its competitiveness as a research institute depends in part on running an international operation.

“However, this brings challenges when international partners and clients seek support from Tecnalia. If such international firms were to be in competition with Basque firms, then there is a potential for a conflict of interest, in which Basque government funding may underpin research which benefits competitors to Basque firms,” the brief reads.

To deal with this, “Regional authorities might apply specific co-financing rules in [the] case of international projects [and] provide financing only for the part of the project that is relevant for the region and where impact on the territory can be proved,” the JRC suggests.

Research and technology bodies have also complained about the lengthy performance yardsticks that come with new EU regional money.

To address this the report suggests that, “Care should be taken on the specification of required outputs or results, so that RTOs can have a high degree of certainty about their ability to meet output targets for what might be speculative research projects, where the outcomes are not always knowable in advance.”

After spending billions across decades to help Europe’s poorer regions catch up, the European Commission last year announced it was starting with a blank piece of paper.

The Commission promised an end to the watering can approach, where regional money is sprinkled around widely - and ineffectively. 

Instead of handing out cash for regions to go after one-off projects, like building a new motorway, it is challenging them to find where their strengths lie and plough efforts into that.

To motivate regions to draw up new strategic roadmaps, funding for research and innovation under the regional programme has been increased. Between 2000 and 2006, it was €29.5 billion. Today it is up to €100 billion, exceeding total R&D spending under the EU’s €77 billion Horizon 2020 programme.