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Europe’s new regional innovation policy  

20 June 2022

Partnerships for Regional Innovation (PRIs) will be one of the pillars of the European Innovation Agenda, due to be unveiled next month. The initiative aims to make Europe a powerhouse for place-based innovation to promote sustainable development. Here, Kevin Morgan, Professor of Governance and Development at Cardiff University, argues the success of PRIs can only succeed by addressing societal innovation. 

Without fundamental social changes to patterns of consumption and production, technological innovation can fall flat despite the grand ambitions of policymakers. This is one of the themes of recently published Playbook, which launched the PRI programme.   

Partnerships for Regional Innovation will focus on innovation in the broadest sense of the term, breaking with the narrow conception which equated innovation with science and technology. The lessons of history show us that narrow experiments in innovation – like attempts to grow Technium Centres across Wales at the turn of the millennium – don’t work without fundamental changes in the wider regional ecosystem, like more integrated supply chains and more dynamic business-university relationships for example.  

Today, we are faced with a challenge of social innovation to address societal challenges. And that’s why the PRI programme is informed by a much broader conception of innovation and why it is a much more inclusive process. 

PRIs intend to help achieve the goals of the European Green Deal. They are designed to close the innovation gap across Europe, but many of us involved in the Scientific Committee that will oversee the PRI programme come from less technologically driven regions. 

Innovation is much more than science and technology, as important as that is, and so much more than research and development.  

This new innovation agenda was all too apparent at the launch of the PRI pilot project in Brussels last month. I was invited to speak on behalf of the Scientific Committee and I joined leaders of the cities and regions that had been selected to pilot the PRI programme. What I found most interesting was the fact that very few local leaders spoke about purely science and technology projects. Rather, they were more inclined to speak about projects that addressed societal challenges like the UN’s Sustainable Development Goals.  

I made it clear that top-performing cities and regions will tend innovate anyway, without needing a lot of assistance from government. But what is most distinctive about the PRI programme is that it offers an opportunity for all kinds of places to innovate – in other words to help all places to become the best that they can be. 

PRIs have their roots in Smart Specialisation, where regions focus on and develop their economic strengths through innovation. Smart Specialisation strategies eventually became a prerequisite for receiving EU development funds, so what began as an attempt simply to reorient Smart Specialisation towards sustainable development eventually produced the much broader PRI initiative. But where Smart Specialisation was perceived as the policy of a single directorate of the European Commission (namely DG Regio, which is responsible for urban and regional policy), the PRIs can be embraced by all DGs as testbeds for their policies in real places.  

The Commission’s Joint Research Centre has compiled a PRI Playbook of tools and governance mechanisms that can help to coordinate regional, national and EU innovation policies and mobilise multiple sources of funding. Each partnership is expected to draw on these and build a local mission for system-level innovation. 

The pilot will involve 63 regions, some participating individually, others as members of networks, plus seven cities and four EU states. Over the course of a year, they will test the tools in the playbook and ‘co-create’ the methodology for eventual deployment across the EU.  

Technology-based innovation still counts of course. But new technologies will have to be fully combined and connected with other forms of innovation to ensure that they deliver social and environmental benefits as well as the economic dividends.  

The PRI Playbook comes with tools which will help policymakers and regional actors diagnose bottlenecks and identify opportunities for technological development that can contribute to societal challenges.  

Transforming production and consumption systems is key. Strengthening start-up formations as sustainable prototypes will be vital, as will providing demand-side tools such as regulatory sandboxes for experimentation. And let’s not forget the potential of creative public procurement because the power of purchase needs to be harnessed to fashion new markets, new enterprises and more sustainable forms of development. 

But, below the surface, the PRI programme will need to draw on the intangible assets that foster the many forms of cooperation and collaboration that lie at the heart of every dynamic regional innovation ecosystem. Trust is perhaps the most valuable – and the most elusive – intangible asset because it has a value but no price. As we cannot buy trust, we must earn it by discharging our commitments to partners within and beyond the region.    

The PRI programme is all about embedding this spirit of collaboration in regional ecosystems in which public, private and third sector organisations learn to work in concert so that they are better able to find joint solutions to common problems. Collaboration should be fostered rather than frustrated by regulations that enable synergies to be forged between different funding schemes – that’s why the PRI Playbook aims to help places draw resources from multiple schemes and not just the conventional Structural Funds.  

If they are properly resourced and integrated with other place-based policies, PRIs have the potential to help Europe’s regions to innovate in the context of a broader conception of development. While science and technology can play an important role in this process, social innovation to address societal challenges – like climate-friendly cities and regions, renewable energy, food security, dignified eldercare for example – is likely to be far more consequential.   

Kevin Morgan, Professor of Governance and Development, Cardiff University