#EURegionsWeek UNIVERSITY: The importance of networks in regional economic smart specialisation policies
Regional economic policy needs to be based on research that goes beyond the traditional regional composite and benchmark exercises that simply compare all regions using many possible indicators. The availability of empirical data on networks of trade, knowledge and direct investment, enables us to strengthen the evidence base for smart specialisation strategies and help policymakers identify their knowledge-based strengths and weaknesses at the regional level. These inter-regional relations are central in new policy initiatives that are based on a systems way of thinking about innovation and growth and allow for tailored regional economic development strategies and policies.
The enhancement of national and international networks of trade, knowledge and investment is critical for developing a region and shaping its policy architecture and priorities, especially in weaker regions. The example of Brexit showed the heterogeneous trade impacts in regions and sectors in the UK and in Europe that were caused by global value chain effects and differences in revealed competition. Analyzing revealed competition in detail showed that the growth of individual firms or sectors in specific regions may be misleading when it is demand-led growth in combination with a loss in market shares. Relevant stakeholders shaping policy architecture and associated policy instruments enhancing competitiveness based on a wide range of policies can be identified by learning from other regions. Private and public R&D, human capital, institutional factors and are main factors that influence regional economic growth. This takes place partly via performance-enhancing knowledge spillovers via network linkages between regions if there is sufficient absorptive capacity in the receiving region.
The interactive session was developed with the Dutch ministry of agriculture, nature and food quality in the context of the broader welfare programme on region deals. It gave the following interesting new insights into regional smart specialisation development policies and the importance of networks. Recent smart specialisation policies are targeted at long run growth in broader welfare solving future societal challenges. The policies are targeted at innovation and knowledge creation, mainly in the existing successful firms in the regions (sector policies - picking winners). There seems to be a general consensus that a large variety of regional (non-economic) policies may affect competitiveness of firms, although knowledge and education is supposed to have the strongest effect. Regional innovation policies should be targeted at human capital, where collaboration takes place with the technological leaders. In general, policies facilitating or enabling future development, possibly via networks, are to be preferred over direct policy measures such as subsidies.
Finally, it was a striking result that the preparation for Brexit in European regions was only with respect to regulatory changes although the importance of networks, especially via trade, was shared among participants.
Take away message
This workshop showed the importance of networks of trade and knowledge for regional development. These networks are crucial in what makes policy instruments successful and what determines the important stakeholders to be involved in regional economic policymaking.
Knowledge Networks – Network linkages to other regions are valuable sources of performance-enhancing knowledge spillovers. To fully leverage networks, however, it is important to have high local absorptive capacity. Dr Nicola Cortinovis
Research and Innovation Policy – Private and public R&D, human capital, institutional factors and the relative position of productivity of the region are main factors that influence the development of its productivity and hence economic growth. Dr Olga Ivanova
Smart Specialisation – “The enhancement of national and international networks of trade, knowledge and investment is critical for developing a region and shaping its policy architecture and priorities, especially in weaker regions.” Prof Philp Mccan
“Brexit has heterogeneous trade impacts in regions and sectors in the UK and in Europe that is caused by global value chain effects and competition, and this may lead to increased regional inequality in the UK, yet may work more cohesively in the rest of Europe.” Prof Frank van Oort
Competitiveness – “The growth of individual firms or sectors may be misleading when it is demand-led growth in combination with a loss in market shares. By learning from other regions we can identify important stakeholders and a wide range of non-economic policies that may enhance competitiveness.” Dr Mark Thissen