Collège du Management de la Technologie – CDM Chaire en Economie et Management de l'Innovation – CEMI Smart specialisation : from academic idea to political instrument Dominique Foray Regions for Economic Change June, 2011 – Brussels

The simple idea was in the air! –Regions cannot do everything in STI so they need to focus on certain domains –They need to focus by developing distinctive and original areas of specialisation (not by imitating each other) Collège du Management de la Technologie – CDM Chaire en Economie et Management de l'Innovation – CEMI

D.Foray, P.A. David and B.Hall Smart Specialisation: the Concept ra/publication_en.cfm

However the simple idea implies a very complex process in practice –Discovering the right domains of future specialisations –Fixing the many coordination failures Will it work in practice? Collège du Management de la Technologie – CDM Chaire en Economie et Management de l'Innovation – CEMI

Collège du Management de la Technologie – CDM Chaire en Economie et Management de l'Innovation – CEMI

Publicité en 1910 Lunettes Léon Jeantet

Publicité en 1910 Lunettes Léon Jeantet Entrepreneurial discovery Imitative entry Policy Structural evolution

The centrality of entrepreneurial discovery An essential principle The role of entrepreneurial knowledge Making a clear cut distinction between smart specialisation and the older policies Collège du Management de la Technologie – CDM Chaire en Economie et Management de l'Innovation – CEMI

Collège du Management de la Technologie – CDM Chaire en Economie et Management de l'Innovation – CEMI At the regional government, we search and select our smart specialisations

Collège du Management de la Technologie – CDM Chaire en Economie et Management de l'Innovation – CEMI At the regional government, we search and select our smart specialisations NO !

Imitative entry/collective emulation Imitative entry is desirable to generate agglomeration externalities (clusters) Imperfect appropriation raises a well recognized and difficult policy problems Collège du Management de la Technologie – CDM Chaire en Economie et Management de l'Innovation – CEMI

Structural evolutions Transition Modernisation Diversification Radical foundation Collège du Management de la Technologie – CDM Chaire en Economie et Management de l'Innovation – CEMI

Collège du Management de la Technologie – CDM Chaire en Economie et Management de l'Innovation – CEMI Discovery Imitative entry Agglomeration externalities Policy Transition Modernisation Diversification Foundation Structural evolution What are the structural conditions and policies which will increase the likelihood of such event?

Inside the policy process Centrality of entrepreneurial discovery ….should not result in narrowing the scope of policy intervention What is top down, what is bottom up? Policy programs fostering smart specialisation need to be more sophisticated than thinking within the confines of this dichotomy will allow They call for an iterative process involving three main steps

Inside the policy process – 3 phases Support and possibly channels entrepreneurial discoveries in certain directions Monitor and assess the progress of the experiments..

Collège du Management de la Technologie – CDM Chaire en Economie et Management de l'Innovation – CEMI Source: Hausman and Klinger, 2007 Occupy the rich parts of the forest where it is easier to jump to other trees

Inside the policy process – 3 phases Support and possibly channels entrepreneurial discoveries Monitor and assess the progress..and thereby disseminate and guide the formation of a shared strategic vision Identify and address coordination failures

Collège du Management de la Technologie – CDM Chaire en Economie et Management de l'Innovation – CEMI Step1 -Proactive policy towards an economy rich in entrepreneurial discoveries Step 2 - Observation and assessment Strategic vision Step 3 - Coordination Region 1 Region 2 Not all regions need to go through the three steps

Message : A specialisation strategy is smart in two senses This is about knowledge resources and regions need to seek not only the concentration of resources but also to do it in an orginal and rather unique area of knowledge expertise The policy process is complex and follows an interative logic Collège du Management de la Technologie – CDM Chaire en Economie et Management de l'Innovation – CEMI

Message:What smart specialisation is not It is not the same thing as a cluster policy It is not only for the most advanced regions It is not about reducing diversity Collège du Management de la Technologie – CDM Chaire en Economie et Management de l'Innovation – CEMI

Collège du Management de la Technologie – CDM Chaire en Economie et Management de l'Innovation – CEMI Smart specialisation From academic idea to political instrument, the surprising career of a concept and the difficulties involved in its implementation By Dominique Foray,* Paul A. David** and Bronwyn H. Hall*** Forthcoming: