How ‘Smart’ Are Smart Specialization Strategies?

• Published date: 01 September 2022
• Author: Marco Di Cataldo,Vassilis Monastiriotis,Andrés Rodríguez‐Pose
• Date: 01 September 2022
• DOI: http://doi.org/10.1111/jcms.13156

How ‘Smart’Are Smart Specialization Strategies?

MARCO DI CATALDO,

1,2

VASSILIS MONASTIRIOTIS

2

and ANDRÉS RODRÍGUEZ-POSE

3

1

Ca’Foscari University of Venice, Venice, Italy

2

European Institute, London School of Economics, London, United Kingdom

3

Cañada

Blanch Centre and Department of Geography and Environment, London School of Economics, London, United Kingdom

Abstract

The introduction of smart specialization (S3) as a fundamental pillar of the 2014 reform of the EU

cohesion policy is a signif‌icant strategic shift in European development intervention. S3 strategies

aimed at mobilizing the economic potential of each country and region of the EU by allowing a

more place-based and bottom-up approach to development. However, despite the salience that

S3 has acquired in a short period of time, there has been no European-wide evaluation of the extent

to which S3 strategies truly ref‌lect the economic characteristics and potential of the territories

where they are being implemented. This article examines the characteristics of S3 strategies across

Europe –by focusing on their development axes, economic or scientif‌ic domains and policy pri-

orities –to assess whether this is the case. The results show that S3 strategies display a prolifera-

tion of objectives, a problem that particularly affects areas with weaker quality of government.

Moreover, strategies are generally loosely connected with the intrinsic conditions of each region

and mostly mimic what neighbouring areas are doing. The lack of more concise and focused S3

strategies is likely to undermine the effectiveness of what is, otherwise, a very interesting and

worthwhile policy experiment.

Keywords: smart specialization; EU policy; regions; Europe

Introduction

Smart specialization (S3) occupies a special position in European policymaking. Analyt-

ically, the concept has its intellectual origins in the literature on innovation policy and on

new forms of industrial policy. However, the concept is still far from being fully articu-

lated. This has not prevented it from gaining powerful traction in the realm of policy, be-

coming, since the 2014 reform, one of the backbones of the EU regional development

policy, which itself is a fundamental constituent of the EU’s cohesion policy. As noted

by Foray et al. (2011):

Elaborated by a group of academic ‘experts’in 2008, [smart specialisation] very quickly

made a signif‌icant impact on the policy audience, particularly in Europe. […] Such a suc-

cess story in such a short period of time is a perfect example of ‘policy running ahead of

theory’: while smart specialisation seems to be already a policy hit and policy makers

show some frenetic engagements towards smart specialisation, the concept is not tight

in particular as an academic concept. (Foray et al., 2011, p. 3)

But what is smart specialization? And why is it so important in the EU’s cohesion pol-

icy? Following Midtkandal and Sörvik (2012, p. 1), smart specialization is a process

aiming to develop a vision in order to identify the areas of intervention of greatest

strategic potential in every territory. As such, it represents a place-based development

strategy that includes not only identifying, through what is known as the

JCMS 2022 Volume 60. Number 5. pp. 1272–1298DOI: 10.1111/jcms.13156

© 2020 University Association for Contemporary European Studies and John Wiley & Sons Ltd

entrepreneurial discovery process, where the potential of every territory lies, but also

developing a system of governance involving multi-stakeholder mechanisms in order

to set strategic priorities and systems of intervention (Midtkandal and Sörvik, 2012,

p. 1).

The adoption of smart specialization has been one of the key elements of European

policy since 2014 and is a signif‌icant strategic shift in cohesion policy. The aim of the

reform was not only to improve the effectiveness of the policy at large (for example,

by improving the sectoral targeting of funding and creating production synergies), but

also to introduce a new way of thinking about local economic development: from a

‘one-size-f‌its-all’to a more place-based intervention, from a top-down approach to a

more bottom-up one and from an objective of economic convergence among European

regions to a multitude of objectives adapted to the conditions and potential of every

region.

Smart specialization has been designed as a policy mechanism that can support regions

(and countries) to unleash their growth potential by helping them identifyand harness

their dynamic (and latent) comparative and competitive advantages.

As a new policy and new concept, however, there is still limited knowledge about its

effectiveness and impact. Because it was implemented for the f‌irst time on a large scale

during the programming period 2014–20 –and despite some early attempts at assessing

its impact (Crescenzi et al., 2020; Gianelle et al., 2020; Iacobucci and Guzzini, 2016;

McCann and Ortega-Argilés, 2016) –it will take some time after the end of 2020 for a

concrete picture of its effectiveness to emerge. What is surprising, however, is that there

are very few accounts of how S3 strategies across Europe really ref‌lect the endogenous

potential of all regions for which an entrepreneurial discovery process was conducted

and, subsequently, a smart specialization strategy drafted. In other words, we lack a com-

plete picture of how ‘smart’smart specialization truly is.

This is what this article intends to do. We set out to offer a comprehensive analysis of

the population of regional S3 strategies currently in operation in the EU with the aim of

assessing how independent they are from one another and how they are inf‌luenced by dif-

ferences in economic and institutional characteristics –quality of government, economic

and technological capacities –across regions of Europe.

To do that, we f‌irst document and analyse some key features of the population of S3

strategies, focusing on the prevalence of different economic and scientif‌ic domains and

policy objectives within and across regions (the breadth of specializations per region

and the coincidence of specializations across regions). We then examine how groups of

regions cluster with regard to their economic priorities (domains) and through this we

identify f‌ive distinct clusters of (smart) sectoral specializations across the EU. Last, we

perform an exploratory analysis of key features of the S3 strategies across space, seeking

to understand whether the policy approach as a whole contributes to a smarter policy at an

aggregate level –in other words, whether the smart strategies adopted at the local level

truly match the local economic context and can therefore be taken as a suitable approach

for mobilizing the economic potential of Europe as a whole. This is achieved by

assessing, using regression analysis, the drivers of the observed heterogeneity in the

key characteristics of regional strategies, offering a unique insight into how the policy cre-

ates or resolves spatial divisions in Europe.

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© 2020 University Association for Contemporary European Studies and John Wiley & Sons Ltd