Smart Investment for Smart Innovation in Europe | World Bank Institute (WBI)

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Smart Investment for Smart Innovation in Europe

The European Union’s (EU) growth strategy for the coming decade is called “Europe 2020” and also aims to reorient the continent’s economies toward exports. To achieve this, 3% of GDP needs to be invested in R&D, a target which would benefit from having a robust innovation.

These goals pose challenges for the European Commission’s (EC) Research and Innovation Strategies for Smart Specialization (RIS3) agenda. Each EU member state is to develop a RIS3 strategy at the national or regional level to gain access to the next round of EU’s structural funds. The ‘smart specialization’ concept and guidance notes encourage member states to invest in the national and regional collaborative identification of key R&D and innovation needs of the private sector, and a results-oriented specialization in areas of competitive advantage.

However, policymakers can have incomplete information of market failures. Process-related challenges with smart specialization also concern a variety of actors in forming the strategy and maintaining knowledge sharing between national and regional authorities as the strategies evolve and are implemented.

Smart specialization capacity development
A World Bank team from the Europe and Central Asia region (ECA), World Bank Institute (WBI), Finance and Private Sector Development (FPD ITE), and the Development Impact Evaluation Initiative (DIME) worked with the EC to organize a regional practitioner’s exchange to support four Eastern European countries (Bulgaria, Croatia, Poland and Romania) to work through these issues.

The 2012 exchange spanned a six-month period and culminated in a two day action-planning workshop held in Warsaw, Poland on June 27-28. The World Bank team joined the Poland Ministry of Economy, the European Commission, Korea Development Institute (KDI) and the Seville platform for Smart Specialization (JRC-IPTS) to convene this regional practitioner exchange. Stakeholders from Bulgaria, Croatia, Poland and Romania worked with international experts to advance the design of their RIS3.

This event was built on a similar regional event held in Croatia in 2011 (on “Innovating through the crisis – how to do it?”). In preparation for the practitioner learning in Warsaw, the World Bank convened the private sector and government counterparts for a video conference discussion to identify specific issues within the RIS3 agenda that could be facilitated through the World Bank’s operational and conceptual expertise on innovation policy, institutional capacity building and results. A background policy note on ‘Research and innovation for Smart Specialization Strategy: concept, implementation challenges and implications’ was prepared for the stakeholders.  They were also introduced to planning tools and evaluation methodologies to help implement their results-based RIS3 approaches.

RIS3 strategy: workshop results highlights
Participants at the Warsaw seminar rooms were teeming with questions about innovation policy bottlenecks, and how to identify productive approaches to achieve results. Questions asked included how can policymakers and other stakeholders create an enabling environment for efficient market selection for competitive advantages? How can we best create flexible national innovation strategies, which remain open for learning and experimentation? What instruments should be used to produce measurable outcomes such as commercialization of innovative products and services?

These questions were answered in the final output of the workshop - a draft presentation from each country, outlining an action plan on their respective RIS3 strategies. Public-private stakeholder teams from Bulgaria, Croatia, Poland and Romania identified measurable goals (such as a six-fold increase in R&D spending and increase in the commercialization of public research by private companies). They identified bottlenecks to innovation spurred-growth (such as coordination ‘glitches’ in the R&D policy mix, and the lack of knowledge and know-how about technology transfers and the high cost of patenting).

Finally, working with World Bank experts, the EC, Seville platform and international experts from the Czech Republic, Finland, Korea and Spain country teams were able to identify solutions to be tested. Among suggestions that participants came up with were that the commercialization of talent would be nurtured through contests for innovative solutions to “public good” issues and that internships vouchers could be provided for R&D-based enterprises to recruit highly qualified personnel.

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