The financial crisis has raised critical questions as to whether the current economic and development models are still able to reinvigorate the competitiveness of European regions, notably those that are least performing and often characterised by a predominance of traditional manufacturing industries and low-tech services.
For decades European programmes have provided support to regions and Member States to develop better innovation programs. Nevertheless the ‘innovation gap’ to the capital market driven US innovation system is seemingly not closing, while the advantage over Asian countries with a strong role of public governance is narrowing. Has there something been going wrong? Might Europe need a distinct innovation model that builds on its recognised strengths: the social capital, the strong regions and the recognition of critical but ultimately limited role of both ‘good governance’ and ‘capital markets’?
Recent publications for example by Porter, Harvard Business School, on the development of emerging industries in US regions and their limited exposure to international competition, but also the German “Innovationsindikatoren” study that ranked 27 leading economies in five domains of innovation assets and performance, showed that some common assumptions of performing innovation systems might be outdated. In that and other studies ‘the three S’ – Switzerland, Singapore and Sweden – take the top ranks while the US is in a fast decline of innovation performance.
Whereas during the last years the focus of activities with the aim to maintain competitive industries has broadened to include innovation activities that are not driven by R&D, the supported actors remained the same: Innovative entrepreneurs with technology driven start-ups as ‘the gold standard’.
Undoubtedly young, growth oriented SMEs with scalable business models have the highest potential to generate jobs, in particular for the well educated and internationally oriented. But isn’t beyond the possibilities of most small and young enterprises to change industries, emerge new ones and raise the competitiveness of regions and nations?
The assumption of start-up enterprises being the change agents for industries might hold if strong capital markets provide an opportunity for early investors to profit from acquisitions or public offerings. These capital market transactions effectively connect start-ups to existing big players that are in a position to change industries. Regions of origin of these start-up might draw lasting benefit even in case of early acquisitions if they have a strong governance; if that’s not the case the regions might have invested in vain for regional development.
But are there any alternatives in the delivery of innovation support than focussing on the individual enterprise? Can challenge driven approaches deliver innovation or will they ultimately result in a planning system for applied research?
The expert group on service innovation recognised the role of regional clusters and advocated the model of ‘large scale demonstrators’, that are conditionally funded as (i) collaborative projects between enterprises, (ii) implemented through existing network, (iii) contributing to realise agreed development strategies endorsement by a governance system.
DG Enterprise and Industry started the first four ‘large scale demonstrator projects’ in the context of new European Alliances for Creative Industries (ECIA) and for Mobile and Mobility Industries (EMMIA). The Alliance concept shall in future structure around emerging industries the interaction of ‘innovation policy makers’ currently under PRO INNO Europe® and the ‘innovation support practitioners’ currently under Europe INNOVA.
The Alliance concept describes the general format of DG ENTR support to emerging industries. At the same time the proposals for future European programmes for 2104-20 are presented. So a window of opportunity is open to fine-tune the approach, to define specific support formats and to address how mutual learning between regions for a better support to industrial innovation can be established in the context of future European programmes.
Against this background the 2012 PROINNO Annual Partnering Event shall focus on three major themes:
How can industries under stress from global competition transform and re-emerge with enhanced competitiveness? How can the transformations effectively realise existing strengths while mediating a process to abandon what cannot be maintained and overcome the resistance to change from influential incumbents?
Can innovation support continue to focus on small and single enterprises if sectors need transformation? And if not, who should be targeted instead and might this require new formats of support provision?
How could a permanent learning mechanism for better innovation support be established that overcomes the problems of being implemented through projects?