The role of Clusters in the process of Smart Specialization

Competitiveness clusters

Policy Old New Policy changes lead to the development of clusters… 03 Regional Redistribution from the more towards the less developed regions Building innovative regions (networking of all development actors, specialisation) Science and Technology Individuals, sector research Multi-sector research, focus on innovation commercialisation Industry and Entrepreneurship Support to enterprises; national champions Support to cluster development, building business infrastructure and business support institutions

Cluster Policy in Croatia 04 Cluster Policy in Croatia Competitiveness cluster Business clusters Croatian clusters Improving competitiveness of Croatian economy Ministry of Economy Improving competitiveness of Enterprises Ministry of Entrepreneurship and Crafts

Croatian Competitiveness Cluster A Croatian Competitiveness Cluster is a sector specific not- for-profit organization which brings together the business, scientific and policy making communities in a formal structure. Stakeholders from the three sectors, in combination, represent the ‘Triple Helix’ concept. The intention is to gather the best players in their field – small, medium and large companies, business clusters, public and science and research institutions in order to develop synergies and cooperative efforts. The final outcome of this synergy will be increased sector competitiveness. Public Sector Business Sector R&D and Science Institutions

COMPETITIVENESS CLUSTERS OBJECTIVES LINKING BUSINESS, SCIENCE AND GOVERNMENT BOOSTING COMPETITIVENESS IN EACH OF THE PRIORITY SECTOR DEVELOPMENT AND TARGETED USAGE OF BUSINESS AND R&D INFRASTRUCTURE INTERSECTORAL COLLABORATION AND INTERNATIONALI-ZATION PROMOTE AND ATTRACT INVESTMENTS LOBYING HUMAN RESOURCE DEVELOPMENT EASY ACCESS TO KNOWLEDGE INSPIRING INNOVATION ENVIRONMENT EFFECTIVE KNOWLEDGE SPLLOVER EASY ACCESS TO SUBCONTRACTORS EASY ACCESS TO RESEARCH PARTNERS COLLABORATION CREATING CRITICAL MASS STRONG LINKAGES TO RESEARCH ORGANIZATIONS AND UNIVERSITIES

Identified sectors of strategic importance to Croatia Sectors with high added value (pharmaceuticals and medical equipment production, chemical industry, automobile industry, defense industry, electrical and mechanical machines and equipment production, ICT, creative industry, construction industry) Traditional sectors with territorial capital (food-processing industry, wood processing industry, the maritime industry, textile industry)

Smart Specialization Strategy

The concept of Smart Specialisation CHOICES AND CRITICAL MASS COMPETITIVE ADVANTAGE CLUSTERS AND CONNECTIVITY COLLABORATIVE LEADERSHIP

3S TRANSFORMATION: 4 MODES • Transition is one pattern of structural changes that a smart specialization strategy is likely to generate. Transition occurs when a new economic domain emerges from existing industrial commons (a collection of R&D, engineering, and manufacturing capabilities that sustain innovation). E.g. the development and growth of a sustainable chemistry sector out of the present chemical industrial commons. • Modernization is another pattern. It is manifest when the development of specific applications of a general-purpose technology produces a significant impact on the efficiency and quality of an existing (often traditional) sector. E.g. rejuvenating present, traditional manufacturing operations through the introduction of mechatronics’ technologies. • Diversification in a narrow sense is a third pattern. In such cases the discovery concerns potential synergies that are likely to materialize between an existing activity and a new one. E.g. diversification of traditional textile activities into a high value-added technical textiles industry. • A fourth strategic pattern involves the radical foundation of an economic activity domain. In this case, the discovery is that R&D and innovation in a certain field has the potential to make some activities progressive and attractive that had not been previously. E.g. nanotechnologies for health via medical technology applications.

The Smart Specialization process bring new opportunities to Croatia To identify our strengths but also key areas for improvement and investments. To review and update our national policy towards a knowledge-based economy for the economic transformation of the region. To strengthen the private-public technology and knowledge transfer channels: Strengthening researchers and business collaboration. Increasing opportunities for ‘self-discovery’ activity. Linking research and technological capacities with public support. Governance challenges S3 is changing our governance mechanism. S3 is redefining our policy instruments S3 is reveling our areas for improvement (e.g. International R&D linkages). DF

The S3 thematic priority areas and cross-cutting themes

Coverage of delivery instruments in Croatian innovation system

Delivery instruments

process of Smart Specialization The role of Cluster in process of Smart Specialization

Clusters and smart specialization Clusters are very much at the heart of smart specialization. Clusters = important delivery instrument for S3 Clusters help focus strategy on successful sectors and emerging opportunities, business environment + cooperation Clusters facilitate structural transformation and upgrading Clusters are a good platform for mobilizing entrepreneurs and innovation actors for strategy development and implementation ('entrepreneurial discovery')

Croatia identify 6 leverage points for clusters and cluster policies to be used in Smart Specialization Strategies: Prioritization challenge: how to select (and justify) priority intervention domains for S3? The “integrated policy” challenge: what are the adequate policies for S3? The “smart policy-making” challenge: what tools for evidence-based policy (measuring, assessing and learning in S3)? The “multi-level governance” challenge: how to align policies from national, regional, EU levels? The “cross-border collaboration” challenge: what is the appropriate territory to conduct a S3 and how to conduct polices that conform to it? The “stakeholders engagement” challenge: how to promote participation, engagement and commitment of the variety of stakeholders?

Tools used by cluster policies Supporting establishment of innovation and/or technological platforms Supporting implementation of cluster initiatives (GVC, Branding, FDI promotion, Internationalisation) Supporting collaborative RDI actions Upgrading the cluster-specific business environment and business and innovation infrastructure (Centres of Competence) Upgrading the knowledge and skills (smat skills)

INDUSTRY INNOVATION NETWORK S3 COUNCIL FUNDING SOURCE ACTIVITIES EFFECT INDUSTRY INNOVATION NETWORK 1. Coordination of drafting strategy RDI for priority thematic areas and cross-cutting areas determined within the S3 2. Monitoring of the thematic innovation platforms 3. Monitoring the impact to on the Croatian economy EU Project "Support to establish industry innovation networks and development TIAs" (7.5 million euro) Enhancing the competitiveness of the Croatian economy and realization of industrial growth through increased productivity and diversification of the economy (the development of new products and services) Industry Innovation Council President of the Council Minister of Economy Members: MRDEUF, MSES, MEC, MT, MLPS, MA, AIC, HAMAG-BICRO, Rectors of the universities, Croatian County Association, Croatian Chamber of Economy, CEA, Croatian Exporters Association, Presidents of thematic innovation councils Health and Quality of Life Innovation Council Energy and Sustainable Environment Innovation Council Traffic and Mobility Innovation Council Security Innovation Council Food and bio-economy Innovation Council KET Innovation Council Creative industriesInnovation Council Tourism Innovation Council Creating RDI strategies for TIAs Project pipeline Education of the business sector for RDI Promotion of innovation 1. EU Project "Support to establish industry and development Innovation Network of TIAs" (7.5 mil. euro) 2. EU tender for RDI projects (200 mil eur) 1. Increase investment in research and development of the business sector (BERD) 2. Number of the business sector RDI projects Presidents of the relevant clusters, CEKOM managers, the deans of faculties and colleges, directors of institutes, large companies 1. Own, collaborative and contractual projects 2. Innovation infrastructure 3. Horizontal activities EU tender for competence centers amounting to € 110 million Increasing the GDP share of research and development of the business sector (BERD) CoC 1 CoC 2 CoC 3 CoC 4 CoC n CLUSTER AUTOMOTIVE INDUSTRY CLUSTER MARITIME INDUSTRY CLUSTER WOOD PROCESSING CLUSTER ICT INDUSTRY CLUSTER CONSTRUCTION INDUSTRY CLUSTER HEALTH INDUSTRY Defining and improving the value chain and supply chain Export promotion Encouraging FDI Branding Education EU Project "Support to the implementation of cluster initiatives" in the amount of € 7.5 million 1. Increase in exports 2. Increase in FDI 3. Increase the value added of industrial sector 4. Inclusion in global value chains CLUSTER DEFENCE INDUSTRY CHEMICAL, PLASTICS AND RUBBER INDUSTRY CLUSTER FOOD INDUSTRY TEXTILE, LEATHER GOODS AND FOOTWARE INDUSTRY CREATIVE AND CULTURAL INDUSTRY ELECTRICAL AND MECHANICAL MACHINERY INDUSTRY Support for competitiveness clusters operating costs 5 million kuna

marija.rajakovic@mingo.hr