Discovery process of a smart specialisation strategy: The Flemish case

Jan Larosse – Flemish GovernmentDG Regio Staff Training on Smart Specialisation

Brussels, 14 December 2011

Flemish government | Department of Economy, Science and Innovation2

FLANDERS: Key Figures

Flanders: a prosperous region

with an open economy in the core of Europe

medium innovation performer

Population: 6.3 million (= 57% BEL)

Language: Dutch

Surface: 13.521 km² (= 45% BEL)

GDP: €220 billion (= 57% BEL)

Export: 100.3% of GDP (=73.3%BEL)

GERD/GDP: 2.12% (2009). Target 3% for 2020

Total public budget STI policy: €1.9 billion of which €1.23 billion R&D

‘Innovation follower’ (Innovation Union Scoreboard).

The region has constitutional competences on

research, innovation and economic policy

Flemish government | Department of Economy, Science and Innovation

Successive steps in the ‘discovery process’ of a Smart Specialisation Strategy in Flanders

1. 2006- 2009: ‘Flanders in Action’ and ‘Pact 2020’

A comprehensive strategic framework for socio-economic structural change

2. 2011: Six ‘Innovation Crossroads’

A challenge driven innovation policy

3. 2010-2011: Transformation processes for future markets

A new industrial policy

4. 2012: A next step towards sharper prioritisation

A targeted cluster policy

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Flemish government | Department of Economy, Science and Innovation

1. ‘Flanders in Action’: a comprehensive strategic framework for change

‘Flanders in Action’ (ViA): strategic framework for a new growth path Change was needed because of persisting competitiveness problems ViA = long-term future project of the Flemish government (starting 2006) ‘Pact 2020’,supported by +100 stakeholder organisations in 2009 Aiming at a ‘top 5 region’ position in Europe = transition towards an innovation

driven growth model, Consensus that STI investments should be focussed on ‘spearheads’: domains that

can position Flanders in future value chains with important societal and economic impact.

20 objectives in five principal domains (yearly monitoring of target figures)1.      greater prosperity and welfare;

2.      a competitive and sustainable economy;

3.      more workers gainfully employed, in more suitable jobs, and for longer average career terms;

4.      a high quality standard of living;

5.      an efficient and effective administration.

The Science&Innovation Advisory Council (VRWI) selected 10 ‘spearheads’ (breakthrough initiatives) in 6 Cluster domains (still mainly technology driven)

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Flemish government | Department of Economy, Science and Innovation

Focussing on spearhead initiatives in 6 ‘clusters’

• Departure from a pure ‘bottom-up’ innovation support policy• Focussing public S&T resources on 6 thematic ‘clusters’ identified by strategic

intelligence and expert consultation• Still large domains: ‘Innovation Direction Groups’ should advise strategies for

industrial sectors (automotive, sustainable chemistry)

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SWOT Analysis of Flanders vs EU

EU Foresight Study with 15 key areas

Flemish government | Department of Economy, Science and Innovation

2. ‘Innovation Crossroads’: challenge driven innovation policy

• Societal challenges recognised as driver of a new innovation strategy(‘Innovation Centre Flanders’: concept note adopted by Flemish Government on May 27th 2011)

• Departure from a purely bottom-up research and innovation policy• Six ‘innovation crossroads’ are identified for the development of

specific innovation strategies Eco-innovation Green energy Sustainable mobbility and logistics Innovation in care Social Innovation Industrial transformation (specified along certain core sectors)

• ‘Innovation crossroads’ are a space where interdisciplinary research and open innovation can contribute to societal and economic value creation.

• Innovation Directory Groups are assigned by the Minister to advise on such strategies (ongoing)

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Flemish government | Department of Economy, Science and Innovation

NEW INDUSTRIAL POLICY in Flanders: an integrated framework for transformation of the economy

• White Paper ‘New Industrial Policy’ (27 May 2011):Integrated policy platform for economic transformation with 4 pillars

• A ‘New Productivity Offensive’: targeting unexploited sources of productivity growthin resource productivity, smart infrastructures,clusters, specialisation.

• A strong vision:‘Factory of the Future’: a vision of a sustainable, innovative, flexible andnetworked economy centred on the ‘real economy’

• A strong management structure:An interministrial body and interdepartmental coordination

• A strong stakeholder based process for discovering new growth opportunities:Secoral policies with ‘Roundtables’

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Productivity &

Competitiveness

Policy

New Industrial

Policy

Infrastructures

Policy

Competences

& Labour Market

Policy

Industrial

Innovation Policy

Flemish government | Department of Economy, Science and Innovation

New Industrial Policy in Flanders: New governance for new transformation strategies

New ‘strategic governance’ for transformation:

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Interministrial Committtee Industry(Economy, Innovation, Work)

Industry Council(Targeted cluster policy)

Interdepartmental Coordination4 Policy Pillars

1. Productivity & competitiviness

policy

2. Industrial Innovation policy

3. Competences & labour market

policy

4. Supportive infrastructure

policy

S&I Council (Innovation Crossroads)

Sector policy (Transformation action plans)

NEW!

Flemish government | Department of Economy, Science and Innovation

3. Transformation processes: core of New Industrial Policy

• A ‘Renewing Sectoral Policy’ as main implementation strategy Round Tables are organised with sectoral partners to elaborate

‘Strategic Agendas’ for transformation in all sectors (included are new arrangements for policy coordination)

Focus is on ‘transformation strategies’ based on value chains, clustersand grand projects (cross-sectoral)

• A three steps entrepreneurial discovery process1. Visioning: with focus on sustainablity (transition management /

experiments)

2. Strategy development: focus on societal challenges and transformation by innovation (strategies within innovation nodes)

3. Action plan: with focus on investment projects in transformation action plans driven by frontrunners (core of the Round Tables)

• Frontrunner: FISCH (Flanders Initiative for Sustainable Chemistry) The sector federation developed from 2007 onwards a transformation strategy, supported by a broad mobilisation in the sector and beyond (more than 700 participants), in 3 parts: a strategic research programme on renewable materials and process intensification; open innovation infrastructures; new business models (e.g. chemical leasing) and sustainability criteria

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Flemish government | Department of Economy, Science and Innovation

‘TINA’: a new public investment fund to leverage transformation

Transformation & INnovation Accelleration Fund Launched March 2011 Key part of New Industrial Policy: support transformation trajectories € 200 million (to be expanded) to facilitate industrial transformation by

innovation Minority equity stakes and subordinated loans with commercial return Policy rationale: a missing-link in financing to promote open innovation &

manufacturing consortia

An innovative financial instrument Investments can only take place in consortia Requirement of transformation strategy (on the level of value chain and

cluster) and vision on go-to-market is required Involvement of a lead-company (and spill-overs to SMEs) Presence of a detailed implementation plan and exit strategy

Managed by PMV, the public investment company, to leverage ‘public’ returns

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Flemish government | Department of Economy, Science and Innovation

Smart Specialistion case-studies(OECD-TIP project on smart specialisation in global value chains)

Action Learning= simultanious policy learning and policy development

Two transformation cases in need of smart specialisation strategies:

Case 1: Sustainable Chemistry Largest petro-chemical cluster in Europe in Flanders; strong links with

food, building e.o. sectors; cross-border links with NL and DE Transition towards bio-based economy How to become a world-class cluster in sustainable chemistry? Focus on strategic road mapping (cross-border!)

Case 2: Nano-for-Health IMEC: largest independent nano-electronics research institute in Europe;

technology platform for open innovation Health: transition towards ‘personalised care’ How to leverage technology platform for these new application areas? Focus on the management of an emerging eco-system (cross-border!)

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Flemish government | Department of Economy, Science and Innovation

4. Targeted cluster policies

New developments in the framework of New Industrial Policy: •The Industry Council (expert advisory council) is launched in November 2011: one of its key assignments is to advise on the development of a ‘targeted cluster policy’ (lead clusters).•A pilot cluster approach is launched for sustainable chemistry

The sector federation developed a transformation strategy supported by a broad mobilisation in the sector and beyond (more than 700 actors): FISCH (Flanders Initiative for Sustainable Chemistry) = strategic research; open innovation infrastructures; new business models (e.g. chemical leasing) and sustainability criteria for the design of innovations

The governement supports the establishment of a ‘Competence Pool’ for the strategic research programma of FISCH (5 mio euro/year)

•International policy learning: lead-role in new OECD project ‘Smart Specialisation in Global Value Chains’

Use of strategic monitoring & case-studies for ‘discovery’ of smart specialisation

Aimed at criteria for identifying smart specialisations & design strategies

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Flemish government | Department of Economy, Science and Innovation

Conclusion: elements of a smart specialisation strategy

Smart specialisation is a policy approach for prioritisation of public RDI investments for transition periods. Strategies are developed in a multi-actor and multi-level policy environment. Based on the Flemish experience they contain following elements:

•A comprehensive policy framework for socio-economic change Wide societal mobilisation for a transition Integrated policy approaches

•A targeted innovation policy Societal challenges as driver for new opportunities Strategies advised by domain experts and informed by foresight

•An economic transformation policy Policies at structural level (value chains and clusters) System innovation based on frontrunners and grand projects

•An enhanced cluster policy Enhanced with strategic governance for making choices Outward looking (international value chains; EU policy priorities)

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Flemish government | Department of Economy, Science and Innovation

Successive steps in the ‘discovery process’ of a Smart Specialisation Strategy in Flanders

1. 2006- 2009: ‘Flanders in Action’ and ‘Pact 2020’

A comprehensive strategic framework for socio-economic structural change

2. 2011: Six ‘Innovation Crossroads’

A challenge driven innovation policy

3. 2010-2011: Transformation processes along value chains for future markets

A new industrial policy

4. The next step towards sharper prioritisation

A targeted cluster policy

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Flemish government | Department of Economy, Science and Innovation

Smart Specialisation discovery process

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Smart Specialisation

specialisati

Societal challenges DEMAND-SIDE

Smart Specialisation at ‘INNOVATION CROSSROADS’

Localisation

Economic value Globalisation

Social value

Competences SUPPLY-SIDE

Excellence Relevance

 Jan Larosse,

Policy Advisor,

T: 32 2 553 5993E: jan.larosse@ewi.vlaanderen.be 

 Department of Economy, Science and Innovation (EWI)

Koning Albert II-laan 35 box 10, 1030 Brusselswww.ewi-vlaanderen.be | info@ewi.vlaanderen.be