EN    EN EN 
EN    EN  EUROPEAN COMMISSION  
Brussels, 6.10.2010 
SEC(2010) 1183 
  
COMMISSION STAFF WORKING DOCUMENT 
Document accompanying the Commission Communication on 
Regional Policy contributing to smart growth in Europe 2020 
COM(2010) 553 final 
EN 2   EN COMMISSION STAFF WORKING DOCUMENT 
Document accompanying the Commission Communication on 
Regional Policy contributing to smart growth in Europe 2020 
. 
TABLE OF CONTENTS 
1. Introduction................................................................................................................ .. 4 
2. New opportunities for regional innovation .................................................................. 5 2.1. Innovation Clusters for regional growth ...................................................................... 5 2.1.1. The role of clusters in regional growth ........................................................................ 5 2.1.2. The need to support clusters......................................................................................... 7 2.1.3. Synergies around clusters............................................................................................. 8 2.2. Constructing innovation friendly business environments for SMEs............................ 9 
2.2.1. The crucial importance of entrepreneurship and SMEs and the role of Cohesion 
Policy......................................................................................................................... ... 9 
2.2.2. Promoting entrepreneurial atti tudes and innovative mindsets ................................... 12 
2.2.3. Improving the business environment: St arting, running and gr owing an innovative 
business ...................................................................................................................... 1 4 
2.2.4. More focus on financia l engineering support............................................................. 15 
2.2.5. Synergies around SMEs support ................................................................................ 17 2.3. Embedding lifelong learning in research and innovation .......................................... 19 2.3.1. Universities that contribu te to regional growth.......................................................... 19 
2.3.2. The European Institute of I nnovation and Technology (EIT).................................... 21 
2.3.3. Developing regional and attractive res earch infrastructure s and centres of 
competence................................................................................................................. 23 
2.4. Creativity and cultu ral industries ............................................................................... 23 
2.4.1. Cultural and creative industries (CCIs)...................................................................... 24 2.4.2. Design for user-centred innovation............................................................................ 27 2.5. Digital Agenda ........................................................................................................... 2 8 
2.5.1. Why does the EU need a Digital Agenda?................................................................. 28 2.5.2. Research and Innovation in ICT: a key action........................................................... 29 2.5.3. Findings of the 2009 Strategic Report in  relation to the digital priorities ................. 29 
2.6. Demand-pull for innovation: Public Procurement ..................................................... 32 3. Increasing Synergies Between Policy Instruments .................................................... 32 3.1. Main EU funding instruments.................................................................................... 32 
EN 3   EN 3.2. Policy framework (synergies of design) .................................................................... 33 
3.3. Practical examples of synerg ies (synergies in action)................................................ 36 
3.3.1. Research infrastructures and Research Potential ....................................................... 36 
3.3.2. Synchronised support for innovation projects  and take-up of re search results.......... 37 
3.3.3. Science and technology parks .................................................................................... 37 3.3.4. Innovation, research systems and cluster initiatives .................................................. 38 
3.3.5. Improvement and internationalisa tion of innovation support services ...................... 39 
4. Towards smart specialisation strategies..................................................................... 40 4.1. Why do we need smart specialisation? ...................................................................... 40 4.2. What is smart specialisation?..................................................................................... 41 4.3. How can regions develop a smart specialisation strategy? ........................................ 44 4.4. Assessing smart specialisation st rategies: preliminary thoughts ............................... 46 
4.5. A Smart Specialisation Platform................................................................................ 47 5. Mapping Regional Innovation.................................................................................... 49 6. Quantifying Cohesion Policy support to innovation.................................................. 53 
6.1. Innovation ................................................................................................................ .. 53 
6.2. SMEs and other businesses ........................................................................................ 55 6.3. ICT ....................................................................................................................... ...... 57 
. 
EN 4   EN 1. INTRODUCTION  
This Commission Working Docume nt tries to provide clear guidance to national and regional 
governments for optimising the impact of Eur opean regional policy funding to inovation with 
the large amounts still available and align them with the new Europe 2020 vision. In order to 
do so the Commission wants to raise the awaren ess of Managing Authorities of new thinking 
regarding innovation support, including new oppor tunities and ways of maximising synergies 
across all Community Funds for innovation.  
It complements and gives further insight on the topics raised in the Communication on 
"Regional Policy contributing to smart growth in Europe 2020" and includes the most relevant 
concepts and policy tools to support the implementation of the "Innovation Union" flagship initiative, particularly its regional dimension.  
In this sense, it describes how synergies are being developed at Community level amongst 
Commission departments, groups of Member States responsible for various innovation 
programmes and High Level Groups of experts to build consistency and critical mass for the 
purpose of delivering innovation on the ground.  
Such concerted efforts are equally needed in each Member State to realise the capacity to 
deliver results and to benefit from the cr eative and innovative potential that European 
cooperation can offer. 
This Commission Working Document  includes further explanations on the concept of smart 
specialisation strategies, a dvanced in the Barca Report
1 and in the report 'The role of 
Community Research Policy in the Knowledge-Based Economy'2. Both reports have endorsed 
a recommendation to European Regional Policy  to reinforce its strategic approach and 
capacity to bring innova tion into the regions. This concep t, which is also supported by the 
European Parliament in its resolution of 20 May 20103 and has been avanced by many 
regions, will be translated operationally thr ough appropiate mechanisms as proposed in the 
Communication. 
It also introduces a synthetic indicator aimed at measuring th e innovation potential of regional 
diversity to illustrate the need for regions to use different policy-mixes and to establish territorial cooperation to realise smart growth.  
Finally, the last section provi des a detailed explanation of  how estimates for innovation, 
business support and ICT investment through the European Regional Development Fund 
(ERDF) and the European Social Fund (ESF) are estimated. 
                                                
 
1 'An Agenda for a reformed Cohesion Policy' by Professor Fabrizio Barca, June 2009, 
http://ec.europa.eu/regional_policy/policy/future/seminars/barca_sem_220609_en.htm 
2 Produced by the Expert Group on the ERA (European Research Area), chaired by Professor Luc Soete, 
in November 2009, http://www.kowi.de/Portaldat a/2/Resources/fp/Report-E xpert-Group-Role-CRP-in-
KbE.pdf. 
3 European Parliament P7_TA(2010)0189 - Resolution of 20 May 2010 on the implementation of the 
synergies of research and innovation earmarked Funds in Regulation (EC) No 1080/2006 concerning 
the European Fund of Regional Development and the Seventh Framework Programme for Research and 
Development in cities and regions as well as in the Member States and the Union 
EN 5   EN 2. NEW OPPORTUNITIES FOR REGIONAL INNOVATION  
2.1. Innovation Clusters for regional growth 
2.1.1.  The role of clusters in regional growth 
Becattini raised the issue of the importance of place-based economic development with the 
notion of external economies that cha nged the approach to  industrial policy.4 The prominence 
of location as a major determinant of competitiveness was further stressed by Porter in his seminal work on the notion of competitive advantage
5 underlining the impor tance of clusters, 
so acknowledging that the business environment outside companies plays a vital role for 
unleashing corporate growth potential and enhanc ing regional competitiveness. Clusters are 
'geographic agglomerations of companies, s uppliers, service provid ers, and associated 
institutions in a particular field, linked to externalities an d complementarities of various 
types'6. The concept of clusters and cluster policies and their role in competitiveness and 
innovation has been further described in detail in a 2008 Commission Staff Working 
Document.7  
As stressed in the Europe 2020 strategy, clus ters are an important tool for improving the 
business environment, especially for SMEs and are explicitly highlighted under the new 
Flagship Initiative “An industria l policy for the globalisation era” . Cluster initiatives can be 
the bridge towards a modern industrial policy and facilitate the change towards regional 
competitiveness, based on the upgrading of tr aditional economic activities through innovation 
while facilitating the emerge nce of new products, processe s and services which are 
competitive on the global market. Clusters are an important component of regional smart specialisation strategies,
8 since they offer policymakers th e opportunity to better streamline 
different policies towards the objective of  stimulating growth through innovation.9  
Cluster initiatives offer 'policymakers the possibility of addressing business demand 
collectively and ensuring a cost-efficient way to address a critical mass of recipients with a 
substantial policy impact through  public-private  partnership'.10 In the US as well as in Europe, 
cluster initiatives are usually in itiated by local and regional stak eholders that know best their 
own competitive advantage in the region and ha ve privileged contacts with the regional 
business community and academia.11 In addition, clusters can provi de a fertile combination of 
                                                 
4 Becattini, G, 1979: "Dal settore industriale al distretto industriale". Rivista di Economica e Politica 
Industriale, 5 (1) 
5 Porter, M., 1998: "Clusters and the New Economics of Competition". Harvard Business Review 
6 Porter, M., 1990: "The Competitive Advantage of Nations". New York: The Free Press and London: 
Macmillan 
7 European Commission (2008) “The  concept of clusters and cluster policies and their role for 
competitiveness and innovation: Main Statistical results and lessons learned”, Commission Staff 
Working Document SEC (2008)2637 that was annexed to the Commission Communication COM 
(2008)652 final of 17.10.2008 entitled “Towards world-class clusters in the European Union: 
Implementing the broad-based innovation strategy in the EU”. Both documents are available at 
http://ec.europa.eu/enterprise/policies/innovation/policy/clusters/  
8 "European Cluster Memorandum": 6 
9 European Commission SEC 2008 (2637): Towards world-class clusters in the European Union: 
Implementing the broad-based innovation strategy: 31 
10 Landabaso, Mikel, Rosenfeld, Stuart. 2009: "Public policies for industrial districts and clusters" in 
Becattini Giacomo, Bellandi Marco, De Propris Lisa (eds) 2009, A Handbook of Industrial Districts, 
Edward Elger, Nottingham: 744 
11 Sallet Jonathan, Paisley Ed, Mastermann Justin, 2009: "The Geography of Innovation. The Federal 
Government and the Growth of Regional Innovation Clusters", Science Progress: 6 and OECD, 2009: 
"Regions Matter – Economic Recovery, Innovation and Sustainable Growth", Paris: 12 
EN 6   EN entrepreneurial dynamism and contribute to th e building of a knowledg e-based economy, in 
line with the Europe 2020 strategy.12  
To have an impact on regional gr owth, clusters should build on lo cal strengths, help to create 
synergies between businesses, universities and rese arch entities and respond to market 
opportunities. The facilitation of interaction among stakeholders in  a cluster is vital for its 
innovation impact,13 since intangible factors14, such as access to tacit knowledge and 
opportunities for networking, become  more important assets th an those associated with 
proximity of suppliers15. The market alone does not always appear to maximise this potential. 
Therefore, public policy initiatives  have a facilitating role to play16 as acknowledged by 
company managers working in a cluster-like environment.17 Bodies, such as cluster 
organisations that manage cluster initiatives sh ould assess their results, analyse their impacts 
and bottlenecks and report thes e to public authorities.  
Moreover, clusters offer a fertile environmen t for SMEs to innovate  and develop linkages 
with large companies and international partners.18 It is widely acknowledged that cluster 
initiatives help to ‘glue’ Multinational Companies (MNCs) and SMEs, and root them to the regions through the favourable "l ocal collective competition goods"
19 created in cluster 
environments. Clusters can speed  the transfer of technology and, when MNCs relocate, to 
help to keep and develop it in the region. In lagging and rural re gions especially, clusters are 
therefore a useful tool fo r local development policies.20 Accordingly, clusters can be an 
important policy tool for regional development, as long as they foster and build on regional 
strengths, while maintaining global connecti ons and openness to new knowledge and change. 
As part of their on-going efforts to furt her boost competitiveness, research and  innovation in 
their region, managing authorities for European  regional policy should  continue to support 
cluster initiatives, particularly those which have  been proved to make efficient use of public 
support or those clusters which have a real poten tial to become clusters  of excellence and so 
more competitive in internati onal markets. Key areas that c ould be supported in this case 
include internationalisation of cluster firms, commercialisation of R&D results, cooperation 
activities across sectors, specialised training of the workforce, marketing activities, and 
integration of new concepts such as open innova tion. Cluster organisations play a key role not 
only by representing and managing the cluster, but also by providing sp ecialised business and 
innovation support services to the firms in the clus ter. Furthermore, they act as a bridge when 
it comes to transnational cooperation by facili tating transnational cooperation between the 
firms in the cluster and other innovation actors. 
Managing authorities should continue to use cl usters as building blocks for new regional 
strategies to revitalise rural areas and contribute to  regional cohesion, and to address emerging 
areas which have a high economic potential for their regions. However, the selection of new 
cluster initiatives should be built upon a detailed  analysis of existing strengths, assets and 
                                                 
12 European Commission SEC (2008) 2637 
13 OECD, 2007: "Competitive Regional Clusters", OECD Reviews of Regional Innovation: 32 
14 IAREG, 2010: "Intangible Assets and Regional Economic Growth", Policy Guide, FP7 Collaborative 
Research Project 216813. 
15 Rosenfeld, Stuart. 2009: "Generating Local Wea lth, Opportunity, and Sustainability through Rural 
Clusters", Volume 1, March 2009: 30 
16 OECD, 2009: "Regions Matter – Economic Recovery, Innovation and Sustainable Growth": 14 
17 European Commission, SEC (2008) 2637 : 34 
18 OECD, 2009: "Regions Matter – Economic Recovery, Innovation and Sustainable Growth": 55 
19 Sallet, Paisley, Mastermann, 2009: 10 
20 Rosenfeld, Stuart, 2009: "Generating Local Wea lth, Opportunity, and Sustainability through Rural 
Clusters", Volume I, March 2009: 21. 
EN 7   EN potential of the region. Recent studies such as those developed by the European Cluster 
Observatory21 are useful for this purpose. 
The importance of clusters for synergetic growth has been stressed by the Community 
Strategic Guidelines on Cohesion (CSGs) fo r the period 2007-2013, explicitly encouraging 
Member States and regions to promote strong  clusters, as a means of cooperation among 
businesses and between businesses and public research / tertiary education institutions – a 
knowledge triangle in their economic reform strategies.  
2.1.2.  The need to support clusters 
The ERDF Regulation for 2007-2013 includes e xplicit support to busin ess networks, public-
private partnerships and clusters. In this co ntext, from the € 86bn of Cohesion Policy funds 
allocated to innovation in the EU-27 for the period 2007-2013 considerab le amounts will go 
to supporting cluster ini tiatives and the related infrastructure. The ERDF has proved to be a 
good vehicle to support the framework conditions and develop projects that address ´grass 
roots´ problems and opportunities.22  
The revised EU Community Framework for St ate aid for Research and Development and 
Innovation also recognises the potential usefulness of public support by allowing certain 
targeted support measures for cluster development23. 
In particular, the Commission recommends that Operational Pr ogrammes for innovation 
should focus on activities where regi ons have a comparative advantage,24 on infrastructure 
such as science parks and incubators25 as well as networking activities needed to create the 
links between regional authoritie s, businesses and universities. 
Corallia – The Hellenic Technology Clusters Initiative, a RegioStar 2009 finalist 
Corallia, provides support for the development of state- of-the-art, industry-driven innovation clusters, 
and acts as a hub for industry, research centres and ven ture capitalists involved  in innovation activity. 
The project has yielded tangible results through the establishment and operation of the 'mi-Cluster' in 
Microelectronics and Embedded Systems and has led to a notable increase in annual turnover, 
exports, patent applications and new jobs. Mi-c luster company-members have strengthened the 
production value-chain of the ecosystem and have increa sed involvement in join t research efforts. The 
cluster actively cooperates with other cluster initiatives in the EU, such as the Foundation Sophia-Antipolis. 
ERDF co-funding of EUR 3.289 million; More information: http://www.corallia.org/el.html
  
Cohesion Policy also provides an important im petus in supporting transnational and cross-
border cooperation between clusters26 as mutual policy learning helps to advance faster and 
readjust cluster policies towards new emerging needs and challenges.27 This is crucial to help 
them to become the world class clusters that Europe needs. 
                                                 
21 http://www.clusterobservatory. eu/index.php?id=1&article=25  
22 Technopolis Group, 2008: "Analysing ERDF co-financed innovative projects", April 2008: 18 
23 Official Journal of the European Union, 30.12.2006: "Community Framework doe State Aid fro 
Research and Development and Innovation – Aid for innovation Clusters" pp.18. 
24 European Commission, SEC (2008) 2637 : 33 
25 European Commission, "Smart Guide on Innovation-Based Incubators" 
http://ec.europa.eu/regional_ policy/sources/docoffic/2007/w orking/innovation_incubator.pdf  
26 European Commission, SEC (2008) 2637: 40 
27 European Commission, , SEC (2008) 2637: 36 
EN 8   EN Medicon Valley Alliance, as part of the Øresund  science region (RegioStars Winner 2008 in the 
cluster category) 
Following completion of the new bridge linking Sweden and Denmark in 2000, with the financial 
support of Cohesion Policy, a development opportun ity arose in the Øresund region. The Medicon 
Valley Alliance – a network of firms, universities,  hospitals and public authorities and the Øresund 
Science Region capitalised on existing links between the area’s universities and the biomedical sector. 
As a result the Øresund region is now one of the leading biomedical regions  in Europe and today 
accounts for 60% of all Scandinavian life science ex ports. Even more impressive, it is now one of the 
top 10 EU regions for biotechnology and ap plied microbiology, immunology and oncology. 
More information: http://showcase.homesandcomm unities.co.uk/case-study/m edicon-valley-alliance-
denmarksweden.html 
2.1.3.  Synergies around clusters 
In particular, with the Regions  for Economic Change Initiative28 the Commission assists 
trans-national networks of re gions in their efforts to im prove their regional innovation 
systems, in which cluster policies may play a prominent role. It encompasses communication activities such as a web site, a database of case studies and the RegioStars Awards scheme 
(with CityStars categories). In 2011, the Regi oStars awards will also be conferred to 
Networking and Cluster initiati ves supporting regional growth and SMEs access to markets. 
The initiative aims to promote mutual policy learning and to  highlight examples of good 
practices in programmes co -funded by EU Cohesion Policy. 
In addition, regional policy makers are en couraged to use complementary Community-
funding instruments for fostering excellence at regional, national and EU-level with the aim 
of developing more world-class clusters in the EU, as has been outlined in the 
Communication “Towards world-class clusters in the European Union: Implementing the 
broad-based innovation strategy”,
29 and further analysed in the accompanying Staff Working 
Document30. The big leverage potential of  scientific research expenditu re by clusters is widely 
acknowledged both by EU and US academics, bette r delivering on the promise of more jobs, 
new businesses and transformative technologies.31  
Under the Competitiveness and Innovation Framew ork Programme (CIP), several instruments 
have been set up to support cluster exce llence. The European Cluster Alliance32 fosters 
cooperation and mutual learning aime d at developing better cluster policies in the EU. It is an 
open cooperation platform that currently brings  together more than 70 regional and national 
ministries and innovation agencies in charge of cluster policies. The European Innovation 
Platform for Clusters33 facilitates transnational cooperation between cluster organisations in 
view of developing and testing new or better innovation suppor t tools for cluster firms. Two 
partnerships have been established: for eco-innovative industries (EcoCluP) and for the 
biotechnology sect or (ABCEurope).  The European Cluster Excellence Initiative34 is 
developing Europe-wide standards for cluster management in order to accelerate the 
                                                 
28 http://ec.europa.eu/regional_policy/cooperation/interregional/ecochange/index_en.cfm  
29 European Commission, COM (2008) 652: "Towards world-class clusters in the European Union: 
Implementing the broad-based innovation strategy" 
30 European Commission, SEC (2008) 2637 
31 Sallet, Paisley, Mastermann, 2009: 7 
32 http://www.proinno-europe.eu/eca   
33 http://www.europe-innova.eu/cluster-ip 
34 http://www.cluster-excellence.eu/  
EN 9   EN professionalisation of cluster organisations. Finally, the Eu ropean Cluster Observatory35 
provides information and analysis on clusters in Europe. In part icular, it provides analysis and 
a mapping of cluster strengths for 38 sectors across EU regions usi ng a common methodology 
based on employment statisti cs. Furthermore, an open “European Cluster Cooperation 
Forum” will be established under the Eur opean Cluster Observatory by 2011. Building upon 
the policy cooperation of the European Cluste r Alliance and taking into account the 
discussions of the informal Competitiveness Council of July 2010, this measure will allow 
policy makers to share experience on cluster policies and evaluation practices from national 
and regional initiatives. 
Under the 7th Framework Programme for Research and Development (FP7), the “Regions of 
Knowledge”36 programme focuses on supporting transn ational cooperation between regional 
research-driven clusters, comprising the ‘tripl e helix’ of research entities, businesses and 
public authorities, with a vi ew to designing Joint Action Plans and fostering future 
cooperation between EU clusters37.  
At EU level, interaction between  different EU initiatives should  be strengthened. For instance, 
public authorities involved in INTERREG and “Regions of Knowledge” projects should be 
encouraged to become active members of the Eu ropean Cluster Alliance to benefit from the 
policy dialogue carried out at EU  level. In addition, cluster mana gers in such projects should 
be invited to participate in the European Club of Cluster Managers38 aimed at discussing 
problems and solutions of mutual interest. 
The forthcoming recommendations of the high level European Cluster Policy Group39 as well 
as the Group of experts40 working on “Synergies between FP7, the Structural Funds and CIP” 
which was recently established under FP7 will provide further suggestions for action on how to better exploit synergies between EU policy instruments so as to increase their impact to 
develop more world-clas s clusters in the EU. 
2.2. Constructing innovation friendly business environments for SMEs 
2.2.1.  The crucial importance of entrepreneurship  and SMEs and the role of Cohesion 
Policy 
As stressed in the Europe 2020 strategy, entrepreneurship is necessary to ensure “that 
innovative ideas can be turned in to new products and services that  create growth, quality jobs 
and help address European and global societal challenges”. Moreover, an environment in which small and medium-sized enterprises (SMEs)
41 can prosper is crucial to achieve the 
smart, sustainable and inclusive growth that  we are aiming for and will be promoted by 
several of the EU 2020 strate gy's flagship initiatives. 
                                                 
35 www.clusterobservatory.eu   
36 http://ec.europa.eu/research/fp7/index_en.cfm?pg=know   
37 http://cordis.europa.eu/fp7/capacities/regions-knowledge_en.html   
38 Organised as part of the European Cluster Excellence initiative http://www.cluster-excellence.eu/   
39 http://www.proinno-europe.eu/project/ecpg   
40 ftp://ftp.cordis.europa.eu/pub/fp7/docs /wp/capacities/regions/q_wp_201001_en.pdf   
41 Companies classified as SMEs are defined officially by the EU as those with fewer than 250 employees 
and which are independent from larger companies. Furthermore, their annual turnover may not exceed 
€50 million, or their annual balance sheet exceed €43 million. SMEs may be divided into three 
categories according to thei r size: micro-enterprises have fewer than 10 employees, small enterprises 
have between 10 and 49 employees, and medium-sized enterprises have between 50 and 249 
employees. See http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/sme-
definition/index_en.htm  
EN 10   EN Entrepreneurship is a major driver of innova tion, competitiveness and growth. Due to their 
strong presence in key sectors such as serv ices and knowledge-based  activities, smaller 
enterprises and the entrepreneurs who manage th em play a central role in the EU economy.  
The EU non-financial business eco nomy counts over 20 million en terprises. More than 99% 
of those businesses are SMEs. They provide tw o thirds of the private sector jobs and 
contribute to more than half of the total value- added created by businesses in the EU. Nine out 
of ten SMEs are micro enterprises with less than ten employees. Hence, the mainstay of 
Europe's economy is micro firms, each pr oviding work for two poeple on average.  
Between 2002 and 2008, the number of SMEs in creased by 2.4 million (13%), while the 
number of large enterprises only increased  by 2,000 (5%). The new Member States show 
higher birth and death rates of enterprises than the old Member  States. Most new firms are 
created in the service sector and are micro enterprises. The contribution of SMEs to 
employment growth between 2002 and 2008 (83%) wa s much larger than could be expected 
from their share in total employment (67%). However, with the onset of the financial and 
economic crisis in 2008, there is evidence that th e above cited positive developments have, at 
least temporarily, come to a halt.42 
In a globalising economy, with large incumben t firms outsourcing and off-shoring production 
and jobs to low cost locations, SMEs are an impo rtant source of job creati on in the EU as well 
as a means to consolidate existing jobs in the regions where they are located. According to a Eurobarometer survey conducted in summer 2009
43 innovative companies were more likely to 
declare an average annualised growth of more  than 20% over the preceding three years (25% 
as against 14% for non-innovative companies). In other words, innovative companies were 
more likely to be high-growth companies.  
More and more, "soft companies"44 and universities are providing tailor-made R&D based 
services through technical consulting and co-development with businesses in close 
consultation with clients and suppliers. 
Member States have committed themselves to implementing alongside the European 
Commission the Small Business Act for Europe (SBA),45 which is a unique and 
comprehensive framework. It includes the “SME Test” at European46 and national level. Its 
objective is to verify to what  extent regulatory and policy pr oposals affect small businesses 
and adapt these measures to make them more SME friendly. The “SME test” is complemented by the “business panels” of the Enterprise Europe Network which convey the opinion of 
SMEs on forthcoming EU legislation impacting on them.  
To make business environment friendlier, bo th for existing SMEs and for prospective 
entrepreneurs, the Commission in cooperation w ith the Member States is facilitating the 
                                                
 
42 SME Performance Review. Annual Report 2009. See http://ec.europa.eu/enterprise/policies/sme/facts-
figures-analysis/performance-review/pdf/dgentr_annual_report2010_100511.pdf  
43 Flash Eurobarometer No 271, "Access to finance", Analytical report, September 2009, 
http://ec.europa.eu/enterpri se/policies/finance/files/survey_acce ss_to_finance_analy tical_report_en.pdf  
44 "Exploding the Myths of UK Innovation Policy: How ‘Soft Companies’ and R&D Contracts for 
Customers Drive the Growth of the Hi-Tech Economy" , January 2010. David Connell, Jocelyn Probert. 
Centre for Business Research, University of Cambridge. 
45 See http://ec.europa.eu/enterprise/policies/sme/small-business-act/  
46 See http://ec.europa.eu/enterprise/policies/sme/small-business-act/sme-test/index_en.htm  
EN 11   EN identification and exchange of good SME po licy measures, as evidenced by the SBA 
Database of Good practices.47 
Innovation processes in crafts and SMES48 are characterised by on-going permanent processes 
and less technical-driven inve ntions. In most of them this involves using available 
technologies in new ways; base d on the experience and knowle dge of staff, long lasting, 
costumer and supplier relations an d existing networks and clusters.49 The value added of 
Cohesion Policy to them is mainly the ac cessible support it offers, based on proximity, 
innovation business services and oppor tunities for techno logy transfer. 
SMEs, and especially micro-enterprises, are heavily dependent on their regional environment 
where proximity plays a key role, in pa rticular regarding tacit knowledge for 
innovation. SMEs need policy support in tapp ing into the necessary outside resources, 
principally access to knowledge, in the form of advice through innovation support services 
and tailored counselling, technology or qualifi ed human capital, to face up to the new forms 
of competition that are developing in th e global economy. EU policy support to innovation-
friendly business environments  is needed through approp riate place-based policies50 and 
smart regional specialisation. 
Units for Intellectual Property Promotion (UIPP), Portugal 
The Portuguese Institute of Industrial Property (INPI) launched an ERDF co-funded project (2001-
2007), the UIPP Project, which was aimed at bringing the National Patent Office closer to companies 
and universities. It provided services to researchers and students as well as to SMEs for pre-diagnosis 
of IPR needs. 
Eligible costs included training, awareness activities and seminars, IPR advertising and 
dissemination, technical assistance and advice by  specialists. UIPP promoted partnerships and 
established a network between 2 business associations, 10 universities, 7 technological centres and 3 
science and technology parks. 
Between 2001 and 2007, the number of hi-tech patent applications to the EPO per million inhabitants 
increased from 0.4 to 7.5 in Portug al (European Innova tion Scoreboard).  
More information: http://www.innovaccess.eu/documents/20081211brussels/11-Dinis.pdf   
http://www.proinno-europe.eu/metrics   
SMEs are accordingly at the core of Cohesi on Policy, which is aimed primarily at creating 
jobs and raising productivity by making regions  and businesses more competitive. A thriving 
SME sector is not only essential for growth, job creation and innovation but also for social 
and economic cohesion. For the period 2007-20 13, the Community Strategic Guidelines on 
Cohesion51 emphasize the key role of SMEs, nota bly when it comes to increasing and 
improving their investment in R&TD, facilitatin g innovation and promoting entrepreneurship. 
Cohesion Policy in fact provide s the largest financ ial Community support to SMEs, including 
through financial engineering in struments such as JEREMIE. 
                                                 
47 http://ec.europa.eu/enterprise/policies/sme/best-
practices/database/SBA/index.cfm?fuseaction=welcome.detail  
48 Innovation policy at regional level: Crafts and SME priorities for the new Innovation Strategy – 
Discussion paper from UEAPME secretariat (3 June 2010). 
49 Ibidem. 
50 See "An Agenda for a reformed Cohesion Policy – A place-based approach to meeting European Union 
challenges and expectations", Fabrizio Barca, April 2009,  
http://ec.europa.eu/regional_policy/policy/future/barca_en.htm   
51 See http://ec.europa.eu/regional_policy/sources/docoffic/2007/osc/l_29120061021en00110032.pdf  
EN 12   EN Support and activities of Cohesion Policy targeted to SMEs are not  just about funding but also 
about innovative governance and strategies. C ohesion Policy can provide an integrated 
approach to address the need s of SMEs. It covers all pha ses of business creation and 
development. This is particularly important when it comes to ensuring that newly created businesses become dynamic and sustainabl e. Cohesion Policy pr ogrammes bring funding 
closer to the real concerns of SMEs through partnerships.  
All actors, including businesses and their organi sations should particip ate in the planning and 
monitoring process. In global competitive markets, SMEs need to anticipate new 
developments and Cohesion Policy can help them to adapt to structural  and industrial change 
and to diversify both their product range and cl ient base. Cohesion Policy is used by many 
Managing Authorities to improve the competit iveness of SMEs, in part through promoting 
tailor-made packages for networking and cooperation.  
This support often provides the initial platform fo r an increased number of SMEs to access the 
FP7 or the CIP. 
2.2.2.  Promoting entrepreneurial at titudes and innovative mindsets 
Small businesses depend on entrepreneurs – th e individuals who have the ideas and are 
willing to take the risks necessa ry to get firms off the ground. According to a Eurobarometer 
survey on entrepreneurship, conducted in December 2009,
52 the preference for self-
employment is lower in Europe than in, for ex ample, the US. 45% of all Europeans would like 
to be self-employed compared to 55% of Am ericans. In Slovakia, Belgium, Denmark, the 
Czech Republic and Sweden only one third of th e population or less decl ares an interest in 
being an entrepreneur. 
The important role of early entrepreneurship ed ucation was stressed again in the Europe 2020 
strategy, pointing out that Member  States will need to focus school curricula on creativity, 
innovation and entrepreneurship. In some Member States, entrepreneurship is already 
included in the national curricula  for secondary school and is an  objective in th eir education 
systems. 
The Commission has outlined a set of recomme ndations aimed at enhancing the role of 
education in creating a more entrepreneurial culture in European societies.53 Starting from an 
early age, education should stimulate young peopl e's awareness of entrepreneurship as an 
option for their future, and help them to be mo re creative and self-confid ent in whatever they 
undertake. At a later stage, universities and technical institut es should integrate 
entrepreneurship as an importa nt part of the curriculum.  
In 2007, the Commission published the “Oslo Age nda for Entrepreneurship Education in 
Europe”54 conceived as a menu from which all st akeholders can pick actions at the 
appropriate level. Efforts curr ently focus on increasing coordina tion between different actors 
so as to develop more systematic strategies at national and regional  level. A progression 
model has been designed to help Member States  and stakeholders to develop policy in the 
area of entrepreneurship education.55 
                                                 
52 Flash Eurobarometer No 283 "Entrepreneurship in the EU and beyond", Analytical report, 
http://ec.europa.eu/enterprise/policies/sme/fact s-figures-analysis/eurobarometer/index_en.htm  
53 Implementing the Community Lisbon Programme: Fostering entrepreneurial mindsets through 
education and learning, COM(2006) 33 final, 13.2.2006. 
54 http://ec.europa.eu/enterprise/policies/sme/pr omoting-entrepreneurship/education-training-
entrepreneurship/policy- framework/index_en.htm  
55 Recommendation of the European Parliament and of the Council, of 18 December 2006, on key 
competences for lifelong learning, Official Journal L 394 of 30.12.2006 
EN 13   EN A sense of initiative and entrepreneurship is al so defined as one of the eight key competences 
in the European Framework for Key Competences for Lifelong Learning.56 It involves 
creativity, innovation and ri sk-taking, as well as th e ability to plan and manage projects in 
order to achieve objectives. Th ese are obviously important comp etences even for people who 
finally do not opt to set up their own businesses, which will, for example, allow them to develop innovative ideas in the companies or organisations in which they are employed. The 
2010 Joint Education Report
57 indicated that there is an in creasing number of examples of 
promoting entrepreneurship through partnershi ps with enterprises or the development of 
student-run mini-businesses.  
‘Developing Entrepreneurship Studies’ – Estonia 
This project was run, with financial support fr om the European Social Fund, by the Foundation 
‘Innove’ and partners (six vocational schools and th e Estonian Chamber of Commerce and Industry) 
between September 2005 and August 2008. 
It resulted in the development of three new entr epreneurship modules which can be adapted to 
different vocational education and trining curricula: 
- a 40-hour basic module, targeting students in  vocational schools following basic education; 
- a 40-hour entrepreneurship module  for students in post-secondary vocational education; 
- an 80-hour Optional module: Evaluation of Bu siness Performance and Managing Entrepreneurial 
Challenges for students in vocational secondary education. 
In addition, CIP funded campaigns such as the European SME Week58 have been launched by 
the Commission to promote the image of en trepreneurship. The European Enterprise 
Awards59 have also been organised since 2006 to  identify and reward excellence among 
public authorities in promoting entrepreneurship  and small business at national, regional and 
local level. Every year, more th an 300 initiatives in each of th e participating countries (the 
Member States and Norway) compete in the na tional rounds of the competition. A high-level 
European jury selects the best entries. It is a fact that almost half of the intiatives that have been shortlisted for the awards so far have been co-financed by Cohesion Policy funds. 
ifex: Initiative for Start-ups and Business Transfer  – Baden-Württemberg, Germany, a European 
Enterprise Awards Winner in 2006. 
Via its online portal, ifex is a one-stop agency for information on start-up and business transfer 
policies, giving access to a large network of o ver 1,400 support service providers. It provides tailor-
made educational and support services to specific target groups, including schools, universities, 
women, ethnic and minority groups. 
Due to the success of the project, ifex became a p ermanent Unit in the State Ministry of Economic 
Affairs and also manages the nation-wide “German Ag ency for Women’s Start-ups” on behalf of three 
federal Ministries. 
ifex has demonstrated over the past 12 years how  to build an innovative and successful regional 
support infrastructure, in cooperation with all regional support service providers and in spite of 
shrinking public budgets. Its s upport measures have already been successfully transferred to other 
German and European regions with impressive results. 
                                                 
56 Ibidem. 
57 http://ec.europa.eu/education/lifelong-learning-policy/doc1532_en.htm  
58 http://ec.europa.eu/enterprise/policies/entrepreneurship/sme-week/index_en.htm  
59 http://ec.europa.eu/enterprise/policies/sme/best-p ractices/european-enterpr ise-awards/index_en.htm  
EN 14   EN Since 2009, the exchange programme for entrep reneurs, Erasmus for Young Entrepreneurs60 
is aimed at fostering the entreprenurial spirit in the EU, creating new enterprises and helping 
to internationalise the existing ones, via the exchange of  experience and knowledge between 
experienced and new entrepreneurs. By Ma y 2010, 2,200 entrepreneurs had been registered 
and 190 exchanges completed. 
2.2.3.  Improving the business environment: Starting, running and growing an innovative 
business 
New knowledge and new ideas are created every day across Europe. Transferring them into 
real innovation - a new economic activity that cr eates jobs and wealth - is facilitated by 
supporting those that have been insp ired by new ideas and knowledge.  
Promoting business incubators and growth of sm all innovative businesses is singled out in the 
Europe 2020 strategy as a way of creati ng growth through knowledge. Given the huge 
diversity of regions across the EU and the great complexity of innovation processes Regional 
Policy has an important role here. Based on the lessons learned from over the past 25 years, in particular through the BIC Network,
61 the Commission has published a Smart Guide on 
Innovation-Based Incubators.62 An innovation-based incubator is a business development 
centre for new entrepreneurs and SMEs that intend to develop innovative ideas.The aim of the 
guide is to give local stak eholders in a region, including the Managing Authorities of 
Cohesion Policy funds, an insight into the scope for innovation-based incubators and the steps 
needed to set up successful ones. 
Innovatum Technology Park  – Västra Götaland Region, Sweden 
The ERDF-supported Innovatum Technology Park is a development centre packed with research 
projects and inspirational activities. It consists of  a science centre, a project arena and an incubator, 
which is conducive for innovative ideas in its th ree areas of focus: production technology, clean 
technology and creative industry. Innovatum provides a network of professional advisors, access to 
external financing and guidance on managing a busi ness to entrepreneurs. Since 2003, more than 40 
companies have developed and several of them are now wo rking with international brands in global 
markets. 
Incubator Technology Centre – Wroc ław, Dolno śląskie, Poland  
The gap between high levels of scientific potential  and low levels of innovation in business is 
being bridged in the Lower Silesia region of  Poland by the Incubator Technology Centre, 
which provides a place for businesses to interact  with the academic comm unity in the form of 
the University of Wroc ław, the Wroc ław University of Technology, and the Wroc ław 
University of Environmental and Life Sciences. 
ERDF contribution: EUR 3 917 000 
The Enterprise Europe Network63 partners provide busine ss partnering services for 
technology development and knowledge transfer as  well as for market access abroad, they 
                                                 
60 http://www.erasmus-entrepreneurs.eu/  
61 The European Business and Innovation Centres (BICs) are support organisations for entrepreneurs and 
innovative SMEs. The first BICs were created in 1984,  co-funded by the ERDF as 'Innovative Actions'. 
The today more than 200 BICs are coordinated and supported by the European Business and Innovation 
Centre Network (EBN), http://www.ebn.be/ . 
62 The Smart Guide to Innovatio n-Based Incubators (IBI)",  
http://ec.europa.eu/regional_ policy/sources/docoffic/2007/w orking/innovation_incubator.pdf /. 
63 http://www.enterprise- europe-network.ec.europa.eu/index_en.htm  
EN 15   EN provide information, feedback and tailor ma de advice for business, including on innovation 
and technology transfer, and it practically encourage SMEs to  participate in EU funding 
programmes. An increasing number of centres  back up other innovation support providers, 
including private consulting SMEs and public-private  initiatives, in raising the quality of their 
services by encouraging the take-up of results fr om European pilot actions. This vast pool of 
expertise brings together 577 business support organisati ons (including chambers of 
commerce and industry, technology transfer centres, research institutes and regional 
development agencies) from 45 countries, and helps SMEs on a daily basis to seize the 
unparalleled business opportuni ties in the Single Market. 
While the creation of a company is always a ch allenge, the decision taken by an entrepreneur 
to go crossborder is even more so. The firs t difficulty is to find relevant and helpful 
information presented in a user friendly way. The Commission, with the support of the 
national administrations, has launched the “Your Europe portal”64 an online practical guide 
explaining each step of the proc ess and the specific rules and procedures to be followed for 
doing business in another Member State. 
XPER- REGIO: European Enterprise Award in 2007 
21 Lower Bavarian Municipalities got together in a st rategic alliance to supp ort entrepreneurship in 
small rural areas with EUR 3 million support from the ERDF, which led to total private and public 
expenditure of EUR 13.2 million in the region. Th e result was the creation of 170 new firms and 400 
jobs. 
2.2.4.  More focus on financia l engineering support 
The studies conducted for the ex-post evaluation65 of Cohesion Policy show that there is a role 
for non-repayable grants as well as for the va rious forms of financial engineering, including 
loans and venture capital. Currently, grants ar e by far the most common financial instrument 
for business support. Loans are widespread but account for a small proportion of total assistance, venture capital is confined to a few regions (mainly in the UK or in Germany). 
They also show that there is a role for both "direct" financial grants and "indi rect" support in 
kind (for example networking, clustering, innovation systems) and a tailored package of 
combined support can be more efficien t than support thr ough a instrument.  
Small businesses often have difficulties fi nancing their growth and innovations. The 
Commission is working with the Member Stat es to stimulate the provision of loans and 
venture capital for SMEs. Getting an innovativ e firm off the ground and expanding it requires 
money, but financing SMEs is a risky proposition. To solve this, Europe needs more investors 
and banks willing to take the risk, and European entrepreneur s need a better understanding of 
the concerns of investors and banks in order to be able to provide assurances about the 
soundness of their proposal. The Commissi on has organised a series of workshops
66 and 
developed self-assessment on-line tools fo r business plans and investor readiness.67  
                                                 
64 http://ec.europa.eu/youreurope  
65 Over 67,000 SMEs received support under the 'S upporting business devel opment programme, leading 
to the creation of nearly 200,000' jobs and 'Investing in research and innovation lerd to almost 38,000 
R&D projects receiving support w ith the creation of over 13,000 new long term re search jobs' 
http://ec.europa.eu/regional_policy/policy/impact/index_en.htm .  
66 http://ec.europa.eu/enterprise/newsroom/cf/item longdetail.cfm?item_id=2069&tpa_id=127&lang=en  
67 http://ec.europa.eu/enterprise/policies/innovation/ support/eu-support-for-innovation/index_en.htm#h2-
support-services-for-innovators 
EN 16   EN Financial engineering in Cohesi on Policy offers Member States , through their national and 
regional Managing Authorit ies, the opportunity to use part of their Cohesion Policy allocation 
of funding to indirectly finance SMEs, through financial intermediaries. The intermediaries 
leverage public money with their own funding to support SMEs through equity, loans and 
guarantees. Resources invested in SMEs and repa id by them need to be reinvested by Member 
States or by the regions, again for the benefit of  SMEs. In this way it is possible to create, by 
the end of 2015, a sustainable legacy of severa l billion EUR to be invested in a revolving 
manner for the benefit of SMEs and start ups. 
JEREMIE, Joint European Resources for Micro-to medium Enterprises,68 is the joint initiative 
of the Commission with the European Investment  Fund (EIF) designed to  increase the use of 
financial engineering instruments within the framework of cohesion policy, to improve access 
to finance for SMEs expansion and investment in innovation, as well as for financing new business creation. JEREMIE Holding Fund agreemen ts signed so far, in 15 Member States 
(EL, FR, ES, IT, UK, PL, RO, BG, HU, SK, LV, LT, CY, MT, SL), either at national or 
regional level, provide for a total amount of some EUR 3.1 b illion (2/3 is managed by 
national or regional financial institutions act ing as holding funds; remaining 1/3 by EIF). The 
JEREMIE Networking Platform
69 was launched in March 2009 as a tool for Managing 
Authorities and other institutions to promote the exchange of information, experience and 
good practice about the in itiative and financial engineering for SMEs in general, and to 
facilitate the practical implementation of JEREMIE. 
There are also many financial engineering instruments for SMEs implemented without 
holding funds in other regions, e.g. Scotland (U K), Toscana, Emilia Romagna, Lazio, Veneto, 
Molise, Sardegna, Piemonte (IT). 
Through the financial instruments of CIP, the Commission is making it easier for SMEs to get 
loans from banks, by providing guara ntees. It is also facilitating venture capital investment in 
SMEs. These financial instruments are managed by the European Investment Fund (EIF) and 
the funds are allocated thr ough banks and other financia l institutions. More than 
EUR 1 billion has been earmarked for this purpose for the period 2007-2013. This amount will enable financial institutions to provide a bout EUR 30 billion of new funding to SMEs, as 
each euro spent from the EU budget enables privat e investors to provide EUR 6 of risk capital 
or a bank to provide EUR 50 worth of loans. Th ese funds will therefore benefit an estimated 
400 000 SMEs in the EU. The financial instruments cover the different needs of SMEs, whether start-up or established companies. The High Growth and Innovative SME Facility 
provides risk capital for innovati ve SMEs in their early stages  and in their expansion phase. 
The SME Guarantee Facility provides loan guarant ees to encourage banks to make more debt 
finance available to SMEs, including microc redit and mezzanine finance, by reducing the 
exposure of banks to risk. 
The Risk-Sharing Finance Facility (RSFF)
70 was developed at the exp licit request of the EU 
Council of December 2005 asking the European Commission (EC) and the European Investment Bank (EIB) to propose a financing f acility, with risk-sharing elements, for the 
support of additional investments in Research , Development and Innovation (RDI) in the 
order of EUR 10 billion for the period 2007-2013. The RSFF is an innova tive debt-financing 
instrument jointly set up by the EC and th e EIB which provides lo ans and guarantees for 
private companies or public institutions with a higher financial risk profile. 
                                                
 
68 http://www.eif.europa.eu/wha t_we_do/jeremie/index.htm  
69 http://ec.europa.eu/regional_policy/funds/2007/jjj/jeremie_network_en.htm  
70 http://www.eib.org/products/loan s/special/rsff/index.htm?lang=en   
EN 17   EN The RSFF targets a variety of  beneficiaries such as European RDI-intensive entities 
(including SMEs) and research infrastructures, ir respective of their size and ownership, which 
contribute to the objectives of the EC 7th Framework Programme for Research, Technological 
Development and Demonstration activities (F P7) and to the objectives of the EIB i2i 
programme, therefore allowing financial support from the generation of knowledge until 
commercial innovation activities. The financing may be provided either to entities active in 
the field of RDI or to individual RDI-related projects, often at a demonstration stage. 
Launched in June 2007, more than EUR 7 billi on of loans have already been approved by 
May 2010 under the RSFF scheme, covering 20 Me mbers States and 2 FP7 Associated 
Countries. In the first part of 2010, an Independe nt Experts Group (IEG) has assessed the first 
three years of RSFF implementation, concludi ng on the fact that the RSFF is a uniquely 
innovative demand-driven instrument, successfully  introduced in the research funding of the 
EU within FP7 and having dramatically  expanded the financing for RDI.  
Given the similarity between different types of  EU financial instruments for SME-financing 
with guarantees (loans) and ve nture capital the Commission has initiated inter-departmental 
coordination meetings in order to  ensure an efficient use of scarce public funds through such 
instruments. The impact of EU funds can be maximised by concentrating on the strengths of 
each of these and improving the awareness at re gional and national level about their existence. 
As an example, among others, the RSFF interi m-evaluation IEG recommends for the future 
programming period (post 2013), as a comple ment to the existing RSFF facilities, the 
development of new forms of public private Ri sk-Sharing Financial F acility to meet RDI 
needs in regional development areas: a RSFF pr ogramme for research and innovation with a 
dedicated SME & Midcap windows drawing upon the experience of the existing JEREMIE 
financial programme. 
2.2.5.  Synergies around SMEs support 
Research and development belong to the core business of many small innovative enterprises, 
notably those providing knowledge-i ntensive services. The major ity of SMEs, however, often 
lack the financial resources , the capacity and the in-hous e expertise to develop R&D 
strategies and to do research. It is difficult fo r them to find a competen t partner or advice to 
develop their ideas and to access progra mmes which co-fund research and innovation 
activities. Even though the 7th Framework Programme for Research, Technological 
Development and Demonstration (FP7) with an  overall budget of EUR 50 billion for the 
period 2007-2013 is not primarily targeted at SMEs, their participation has been strongly 
encouraged: SMEs are entitled to  a higher funding rate of 75% fo r research activities while it 
is 50% for large enterprises.  The themes of the Cooperation Programme include a budget 
target of 15 % participation of SMEs, which is  equivalent to some EUR 5 billion. SMEs and 
SME associations which need to outsource research are supported through the programme 
"Research for the Benefit of SMEs" w ith an overall budget of EUR 1.3 billion.  
SMEs in research projects serve as an importa nt conduit for positive externalities in the form 
of knowledge spill-overs71, making the social return on R& D investment larger than the 
private return, so providing an  opportunity for efficient pub lic action. They are often the 
interface between research and the market tr ansforming new ideas and developments into 
successful business because they are flexible enough to react to changing circumstances and to seize new opportunities faster than larger co mpanies. According to a recent study on the 
                                                
 
71 The impact of publicly funded research on innovation: An analysis of European Framework 
Programmes for Research and Development. Robert Fisher, Wolfgang Polt, Nicolas Vonortas. PRO 
INNO Europe Paper No. 7.2009 
EN 18   EN European Research Framework Programmes,72 SMEs benefit the most in terms of gaining 
products and services out of their FP involvement . The participation of SMEs in EU projects 
allows them to access complementary knowl edge, extend their networks, acquire new 
customers and become more visi ble at international level.  
The impact study on SME participation in  the thematic programmes of FP5/673 confirms that 
their participation in the Framework Progr ammes has had a positive impact on the R&D 
projects concerned as well as on the SMEs themselves, especially on their R&D and technology. Based on this evidence, the impact study suggests developing a proper SME strategy for the Framework Programme. 
SMEs need R&D&I support programmes that are conceived from their perspective and 
tailored to their needs, including simple and straight-forward rules for participation and 
financing. A coherent and effective support pa ckage should encompass the whole innovation 
cycle from the conception of an idea through research and developmen t to exploitation and 
commercialisation. It should targ et both technical and non-tec hnical research and innovation, 
including service innovation, and have a clear orientation towa rds the market. National and 
regional support measures co-financed by Cohesi on Policy funds could further assist SMEs in 
internationalising their knowle dge network by, among other things, providing support and 
advice to access European rese arch and innovation programmes. 
The funding of innovation vouchers or explorat ory awards can help SMEs in exploring 
innovation and or international R& D projects. Such micro-grants can be ideal instruments to 
accelerate the take-up of technological and organisational innovation. 
After the R&D phase, there is often a need fo r further grant support, e.g. for demonstration 
activities to prove the viability of a new idea, before financing instruments like venture capital 
get involved and companies can commercially exploit the research results. Mutually 
complementary and better coordinated support sc hemes at regional, national and European 
level have the potential to foster the whole innovation cycle in SMEs while ensuring better 
use of scarce resources and opening new oppor tunities to facilitate transnational R&D 
activities. According to a recent st udy on SMEs and Internationalisation
74 at company level, 
innovation and internationalisation go ha nd in hand, one reinforcing the other. 
                                                 
72 Ibidem. 
73 Impact assessment of the participation of SMEs in the Thematic Programmes of the Fifth and Sixth 
Framework Programmes for RTD – DG Research, April 2010, to be published presumably in June 2010.  
74 Internationalisation of European SMEs, Final Report  – DG Enterprise and Industry, December 2009, to 
be published presumably in May 2010 
EN 19   EN Estonia's small enterprises have received innova tion vouchers from Enterprise Estonia for 
implementing 149 innovation projects. 
The total amount of grants financed from ERDF is now close to 8.75 million kroons. 
The Innovation Voucher Grant programme that op ened in February 2010 is the simplest way for 
enterprises to launch co-opera tion with research institutions fo r the purpose of implementing 
innovative ideas.  
A significant number of new co-operation projects between the private sector and universities have 
emerged  
Enterprises have begun to view universities as partn ers capable of providing the services that SMEs 
need. 
More information:  
http://hei.eas.ee/index.php?option=com_conten t&view=article&id=636:enterprise-estonia-gave-
innovation-vouchers-for-149-small-enterprises-last-year-&catid=41:news  
Companies face specific challenge s relating to introducing serv ice innovations. As a large 
share of innovation support in  the EU is still provided wi th a strong focus on technology 
development and transfer or organised in R&D projects, most service companies as well as 
manufacturing companies innovating through the services provided around their products, 
find little assistance from the traditional innovati on support services. It is therefore necessary 
to adapt innovation policies  to address these challe nges. The EPISIS INNO-Net75 facilitates 
transnational cooperatio n between policy-makers and innova tion agencies with regard to 
service innovation with the aim of testing new po licy approaches in this  area. In adddition, the 
European Knowledge Intensive Services Innovation Platform76 experiments with better tools 
and instruments to support serv ice innovation in specific industr ial areas such as renewable 
energy, sustainable construction, ICT, mobile se rvices, satellite enab led services, creative 
industries and audi ovisual services.  
The INNO-Partnering Forum,77 an initiative under PRO INNO Europe, has been launched to 
identify, develop and exploit s ynergies between public innovation funding agencies in Europe 
and to propose new approaches to improve the quality, efficiency and effectiveness of SME 
innovation support in Europe. All agencies can be  associated in this learning process through 
open calls to pilot activities. 
In this context, it should also be menti oned that the Commission has published a "Handbook 
on Community State Aid Rules for SMEs", includ ing temporary state aid measures to support 
access to finance in the current financial and ec onomic crisis, which should be useful for the 
Managing Authorities of Cohesion Policy Funds.78 
2.3. Embedding lifelong learning in research and innovation 
2.3.1.  Universities that contribu te to regional growth 
Higher education institutions  and research centres need to wo rk together with enterprises to 
bring innovation to the market. In  the past decade many universi ties in Europe have formally 
incorporated regional economic developm ent into their mission statements.  
                                                 
75 http://www.proinno-europe.eu/episis   
76 http://www.europe-innova.eu/web/guest/innovation- in-services/kis-innovation-platform/about  
77 http://www.proinno-europe.eu/p roject/inno-partnering-forum  
78 http://ec.europa.eu/competition/state_aid/studies_reports/sme_handbook.pdf  
EN 20   EN A number of them are increasi ngly developing an important role  in the commercialisation of 
research by expanding the entrepreneurial minds et and soft skills, such as creativity in 
graduates and by involving businesses communities in innovation. They develop, for example, creative design for important produ cts and services; they  support services for 
intellectual property rights (IPR) or are av ailable to assist businesses through 'innovation 
vouchers'.
79 In this way they are strongly embedde d in regional development, helping to 
create partnerships for regional growth. 
Combined Universities in Cornwall (CUC)  
CUC is an ERDF supported partnership of regional universities and colleges working together to 
cooperate with SMEs in line with  the region's decision to invest in higher education as a driver of 
economic regeneration. The CUC graduate placemen t scheme, ´Unlocking Cornish Potential´, for 
example, provides shorter project placements and uses grants of up to GBP 6,000 to reduce the risk of 
employing a graduate. The ESF also supports a sm all team which markets the scheme to business. 
Some 70 % of the 485 graduates placed since 2004 have been offered permanent jobs at the end of their placement.  
The EU Forum for University Business Dialogue80 has recently stressed the importance of 
effective cooperation between universities an d business for regional development and has 
called for a stronger involvement of regional author ities in this partners hip. To achieve closer 
cooperation, university programme s should involve more strongly students in activities linked 
to innovative businesses (incuba tors, start-ups, spin-offs). 
Better and closer cooperation between university and business  is a key element in the 
modernisation agenda of higher education and in making higher education more open to the 
needs of society. More intens e cooperation stimulates exchange and sharing of knowledge 
among both the business and academic communities. Exposure to real problems and solutions through relevant curriculum and placements enri ches student learning and prepares them for 
future employment, to cope with a changing environment and to face future challenges. 
University-business cooperation is crucial fo r the success of the knowle dge triangle and to 
boost Europe's innovation capacity. The main goal of fostering more ef fective links between 
university and enterprise is directed at challenges with soci al relevance, which would in turn 
enhance the efficiency of public investme nt in higher education and research.  
Twente (NL), a University embedded in its regional economy 
The University of Twente is a good example of a university embedded in its regional economy taking a 
joined-up approach to knowledge transfer. Th e university has a knowledge park and business 
accelerators communicating the knowledge it po ssesses to the business community. After supporting 
entrepreneurship, for over 10 years, the univers ity developed the TOP programme (Temporary 
Entrepreneurial Positions), University Student Enterprises and a growth  programme for owner 
managers have also been developed. Included in th ese modules are training and networking activities. 
The University of Twente has actively participated  in the ERDF Programme of Innovative Action for 
the region supported by Cohesion policy. 
More information: http://www.universiteittwente.nl/en  
                                                 
79 'Availability and Focus on Innovation Voucher Schemes in European Regions', EC November 2009 
http://www.europe-innova.eu/c/document_library/g et_file?folderId=122731& name=DLFE-6403.pdf 
80 COM(2009) 158 and SEC(2009) 425: A new partnershi p for the modernisation of universities: the EU 
Forum for University Business Dialogue 
EN 21   EN Knowledge transfer between uni versities and industry, howev er, raises the question of 
intellectual property rights. To support universities and to provide a more coherent framework 
for knowledge transfer activit ies the Commission has adop ted a Recommendation on the 
management of intellectual property in knowledge  transfer activities an d a Code of Practice 
for universities and other publ ic research organisations.81 The "Responsible Partnering" 
initiative also provides a guide82 to better practice in this area. 
Education, training, lifelong learning and mobilit y, as indicated in the Europe 2020's Flagship 
Initiative "Youth on the Move",  are vital to deve loping capacity of re gions to innovate. 
To reinforce the knowledge base and promote excel lence, the EU needs to  foster world-class 
education systems and curricula, a sufficient number of internat ionally-recognised universities 
and research institutes, a highl y skilled population whose skill sets are constantly up-dated, 
geographical and inter-sector mobility, excellent research infrastructure and policies that recognise and support social and non-technological innovation. 
National and regional authoriti es should consider, in partic ular, how regional policy can 
contribute to modernising higher education institutions  as well as support ing lifelong learning 
plans to ensure a high level of  up-to-date skills within SMEs. 
2.3.2.  The European Institute of I nnovation and Technology (EIT) 
The EIT
83 is the first initiative aimed at boosting  EU competitiveness by fully integrating 
higher education, research and business (the K nowledge Triangle) to generate and promote 
innovation of a world-class level. It is emerging as an identified  brand of European excellence 
in knowledge and innovation. Its role as a pi oneer goes beyond education and encompasses 
other important areas such as new models of  governance for innovation (leadership, business-
orientated management and results-driven), f unding (inter alia via the establishment of the 
EIT Foundation) and simplification (e.g. the use of  lump sums and flat rates on the way to 
establishing an outcome-based system).  
The EIT is intented to deliver world-l eading innovation through ne w types of creative 
collaboration and interaction between actors in the knowledge triangle, with entrepreneurship 
and the education of entrepreneurs as key dr ivers and linking factor s between the various 
sides of the triangle.  
The core of EIT activities is the development of Knowledge and Innovation Communities 
(KICs) to tackle major societal challenges (e.g. climate change, energy). KICs attempt to integrate the entire "innovation chain", from edu cation and research to entrepreneurship and 
commercialisation, with a constant focus on exce llence, strong ("CEO"-s tyle) leadership and 
management, delivery and impact.  
The work of each KIC is intended to be regionally embedded in 4-6 innovation hotspots or 
"co-location centres", each in different locat ions across the EU, which will link top-ranked 
universities, globally re nowned research institutes and worl d-leading companies, interacting 
with each other in the different  places. The principal characte ristic of KICs – and the co-
location centres of which they are composed – is to be highly in tegrated, legally and 
financially structured transnational public-private entities.  
                                                
 
81 C(2008) 1329 
82 http://www.responsible-partnering.org/ ; developed by leading associatio ns from academia and industry 
(EUA, EARTO, EIRMA and ProTon Europe) 
83 Regulation (EC)294/2008, 11.03.2008; http://eit.europa.eu/  
EN 22   EN Accordingly, the EIT has an important role to play in the EU Innovation landscape, by 
encouraging a step change in mentality across the Union, functioning as a model and "living example" of the knowledge triangle to strengthe n the EU's innovation capacity and the impact 
of innovation on the economy and society. 
Managing and regional authorities can explor e the funding opportunities in KICs which are 
autonomous partnerships bringing together  higher education institutions, research 
organisations, companies and other stake holders in the innovation process.  
At present, three KICs have been selected, in three priority areas: sustainable energy, climate 
change and ICT, with co-location centres in  each case in different Member States. The 
Climate-KIC has identified regional partners and designated them as Regional Innovation and 
Implementation Communities (RICs) able to co ordinate funding streams at city and regional 
levels. 
The Climate KIC explores potential regional pa rtners and funding opportunities under the EIT 
The Regional Innovation and Implem entation Communities (RIC), led by the Hungarian Bioenergy 
Competence Centre OBEKK, forms a network of six major European regions (with a combined 
population of over 26 million), which share a clear and demonstrable commitment to tackling climate 
change. They comprise Central Hungary, Lower Sile sia (Poland), Midlands (UK), Hessen (Germany), 
Emilia Romagna (Italy) and Valencia (Spain).  
RIC has access to a range of funding sources, includi ng the Structural Fund and national or regional 
R&D financing, and is able to coordinate these sources at city and regional levels. The resources 
concerned will be available for the Climate-KIC from the start of the programme. The RIC will 
initially focus on carbon emission reduction by participating in implementation programmes, 
demonstration projects and strategic support pr ogrammes. It will exchange and disseminate the 
knowledge obtained. 
More information: http://eit.europa.eu/ki cs1/climate-kic.html   
The OECD has stressed the role of public supp ort for involving higher education institutions 
in regional development by promoting clusters  and mobility of peopl e between universities 
and businesses at local leve l to improve human capital, the pool of knowledge and the 
attractiveness of the area for business.84  
Cohesion policy provided support for knowledge  partnership between universities and 
industry, under many forms, as well as for territo rial cooperation, particul arly between regions 
in different countries, focussi ng on innovation and including th e establishment of networks 
between universities, resear ch institutions and SMEs. 
                                                 
84 Higher Education and regions, OECD Policy brief (September 2007) 
EN 23   EN 2.3.3.  Developing regional and attractive research infrastructures and centres of 
competence 
 
Regional 
Partner Research 
InfrastructureRegional Partner Research 
Infrastructure
   Pan European 
   Research  
   Infrastructure Regional 
Partner 
Research InfrastructureGlobal Research Infrastructure  
 
Research infrastructure needs to provide world-cla ss facilities and services to researchers. It is 
at the centre of a knowledge -based innovation system linki ng research organisations, 
universities, industry, investors a nd public authorities. There are three ways of helping the EU 
and regions utilise their potential  fully: (i) develop world-class research infrastructure on the 
basis of existing scientific exce llence in regions, use the potentia l of the Structural Funds, (ii) 
involve less research intensive coun tries in networks of distributed  research facilities, and (iii) 
develop Regional Part ner Facilities (RPF). 
Typically these RPF would be associated throug h various schemes with large facilities, and 
by means of such links could share many of the benefits, including in particular dissemination 
to the local economy or collabora tion with local industry. The sp ecific ‘partnership’ role of 
RPF would include participation in preparing experiments, tr aining young scientists and the 
broad promotion of the science un dertaken at the large facility. The three ways listed above 
would also have an important, more general, ro le contributing to the ci rculation of ‘brains’ 
and reducing the risk of brain drain while at th e same time providing much needed balance to 
the distribution of European  research infrastructure. 
The PALS Research Centre  
The Pals research centre is the onl y laser laboratory in the Czech Republic and, indeed, in all the 
"new" EU Member States, which operates a kJ-class terawatt high-power laser. As an open civilian 
infrastructure, it serves not only the Prague region and the Czech Republic as a whole, but also 
neighbouring countries such as Poland and Hungary.  Close links exist with other European high-
power lasers through the LASERLAB-EUROPE network and it is at present closely involved in the 
preparation phase of ELI (ESFRI project ) which will be part financed by the ERDF  
2.4. Creativity and cultural industries 
Opportunities for regional developmen t go beyond technological innovation. Indeed, 
creativity can lead to new products and services  in all kinds of businesses, ranging from 
traditional sectors closely linked to local deve lopment, such as food, textiles, crafts and 
tourism, to more cutting edge sectors su ch as ICT and product and industrial design. 
Innovation can be based not only on technological  knowledge but also on market and societal 
knowledge and can lead to new developmen t strategies, business organisations and 
management and training models as  well as new societal solutions.  
The regional level is the one best suited to promoting creativity and innovation. Regions are 
large enough to matter and small enough to care for the people working and living there. 
Metropolitan centres are naturally in an advant ageous position to attract creative industries. 
But creative industries are also a catalyst for st ructural change in ma ny industrial and rural 
EN 24   EN areas with the potential not only to rejuvenate  their economies but also to changing their 
public image.  
Creativity and innovation require networking both w ithin the region and with other regions in 
the same country as well as outside. Groupi ng different regions a nd exploring different 
approaches can increase the effectiveness of a network. One factor of success in networking 
to increase creativity and innovation is to connect a wide variety of public and private partners 
from different sectors, regions and communities.  
2.4.1.  Cultural and creative industries (CCIs) 
During the recent “Towards a Pan-European initiative in support of innovative creative 
industries in Europe” event, organised by th e European Commission, experts adopted the so-
called Amsterdam declaration urging regions, Member States and the Commission to follow a 
more strategic approach to innovative creative industries85 “Cultural and creative industries 
are at the crossroad between cu lture, creativity and innovation. They offer a huge potential to 
contribute to the transformation of Euro pean society, responding to major social, 
demographical and environmental challenges and leading to a more sustainable and smarter 
economy within the EU 2020 strategy. Yet, th e combined cultural and economic potential of 
these dynamic industries still remain s largely underestimated and untapped ”. 
Recent studies show that CCIs tend to be hi ghly innovative companies with much economic 
potential86 and are one of the most dynamic emerging sectors in world trade87. Moreover, 
examples suggest that they play  an important role in many re gions, offering scope for cluster 
policies to further “strengthen the strengths”88. The CCIs therefore appear to be increasingly 
important for the development of the knowle dge economy; they are both knowledge and 
labour intensive and they have a large poten tial for generating employment and export 
growth. 
CCIs are an essential part of th e move from societies with a st rong focus on specific hardware 
production to those producing less tangible ou tput. They provide content for the further 
development of ICT, spur impulses for innovation and are instrumental in shaping social and 
cultural trends and consumer demand in the emerging 'experience economy'. Creative 
innovation services are often inputs to innova tive activities by enterprises in the wider 
economy.  
CCIs can also help to combat a wide range of social problems, from crime prevention to the 
fight against social exclusion, from expanding social capital to regenerating communities and 
improving public services.  
As highlighted in the recent Commission Green Paper “Unlocking the potential of cultural 
and creative industries”  these industries “ often contribute to boosting loca l economies in 
decline, contributing to th e emergence of new economic activities, creating new and 
sustainable jobs and enhancing the attractiv eness of European regions and cities ”.89 
                                                 
85 The Amsterdam declaration, ad opted on 5 February 2010.  
http://www.europe-innova.eu/creative-industries  
86 See in particular Commission Staff Working Document “Challenges for EU support to innovation in 
services – fostering new markets and jobs through innovation”, SEC (2009)1195 final, September 2009 
87 See in particular UNCTAD (200 8) “Creative Economy – the Challenge of Assessing the Creative 
Economy – towards informed policy-making” 
88 Staff Working Document “Challenges for EU support to innovation in services – fostering new markets 
and jobs through innovation”, SEC(2009)1195 final, September 2009 
89 COM(2010) 183, of 27 April 2010. 
EN 25   EN Also recently, the Council has invited the Member States and the Commission to adopt a 
strategic approach to culture in local and regional development policies,  including through 
stimulating a favourable environment for th e development of CCIs, especially SMEs90. 
Specific lines of action were highlighted such as encouraging a  favourable regulatory 
environment  for cultural and creative SMEs, strengthening  entrepreneurship through 
favouring the creation of CCI incubators, explor ing ways of promoting new business models 
and consolidating creative clusters and bus iness research centres , improving the access of 
cultural and creative SMEs to (d igital and physical) channels of distri bution, and promoting 
better links between CCIs and financial services. 
"ImMediaTe" and "BCreative" projects in the Eu ropean Knowledge Intens ive Services Innovation 
Platform91  
ImMediaTe92 is aimed at providing tools and services to assist the growth of digital media SMEs 
operating in creative industries. The project m obilises sector-specific financial resources and has 
developed innovation vouchers. It also organises a series of thematic events, market and investment 
forums focusing on presenting key trends and market opportunities for businesses in the digital media 
sector as well as pitch sessions for selected com panies allowing them to meet international financial 
investors. Ad hoc coaching on media literacy, in cluding management, marketing and IPRs, as well as 
financial and business support services are provided to SMEs across Europe.  
BCreative93 brings together various innovation suppor t measures for SMEs to link knowledge 
creation, incubation, finance and clusters. BCre ative provides support to SMEs across 
Europe to better exploit their re search results and helps them look for investors and potential 
business partners. The project has developed innovation vouchers and has set up a European online platform for creative busin esses, bringing together rele vant stakeholders and providing 
a toolkit to European companies to  help them to venture capita l and entrepreneurial skills as 
well as enabling them to exc hange information on intellect ual property and legal issues
. 
Culturally-based investment has led to the di versification of local economies in decline, 
spurred local growth and regeneration and enha nced social cohesion ac ross cities and regions. 
Berlin: regional revitalisatio n through creative industries   
The ERDF-supported Kreativ Coaching Centre (KCC) in Berlin, established in 2008, helps emerging 
entrepreneurs in creative industries by providing individual assistance through experienced coaches, 
qualified in business administration and creative indus tries, who offer advice and expertise to young 
and growing companies to solve their particular problems in a non bureaucratic, hands-on way. 
Moreover, the presence of CCIs and vibrant cultural communities are also seen by more and 
more cities and regions as ‘soft’ locati on factors that can he lp them boost their 
competitiveness by establishing a favourable environment for innovation and attracting 
highly-skilled people as well as companies. 
                                                 
90 Council conclusions of 10 May 2010 on the contribution of culture to local and regional development. 
91 http://www.europe-innova.eu/kis-innovation-platform   
92 http://www.europe-innova.eu/ImMediaTe  
93 http://www.europe-innova.eu/BCreative   
EN 26   EN Interactive Institute Sonic Studio (Piteå, Sweden)  
A significant success of the Studio is DigiWall, an interactive system combining a climbing wall, 
computer games and music applications in health care for therapeutic healing, adapting the 
application to the physical state of the patient. The studio collaborates with both traditional and more 
modern firms. 
This project has contributed to regional developmen t by boosting research in a novel interdisciplinary 
research area, which has attracted senior researcher s to the peripheral region concerned. The studio 
has also created new employment opportunities, both  in newly established enterprises and in existing 
ones. 
Attaining ERDF funding has been a significant quality  label for attracting other kinds of financial 
support 
To reinforce the contribution of CCIs to re gional innovation systems, it is necessary to 
develop synergies at different levels of governance. Success requires partnership between 
public authorities in different policy areas (higher education and research, culture, economy, 
industries and employment) and rele vant representatives from civi l society (businesses, social 
partners, citizens associations and NGOs). 
The Commission encourages Member States and regions to reap the benefits of CCIs by 
including them explicitly in their strategies for innovation and entrepreneurship, in 
cooperation with relevant stak eholders from civil society.  Moreover, EU Cultural policy 
needs to steer the implementati on of Culture and Media progra mmes in a way which increases 
the capacity of the cultural sect or to act as a catalyst for cr eativity and innovation at regional 
level through mobility, peer learni ng, peer coaching and cooperation.  
Creative Clusters in low density urban area (Obidos,  Portugal, as lead partner, together with other 
partners from Spain, Italy, Hungary, Romania, Finland and UK)  
The starting assumption of this ERDF URBACT network  is that creativity can act as a driving force 
for the economic development of small urban centres as well as big cities. 
Its objective is to promote exchange of experience and best practice and to make policy 
recommendations and suggest action plans relating to creative clusters in low density urban areas.  
The European capitals of culture offer an opportun ity for the cities bear ing the title and their 
surrounding areas to formulate a longer term st rategy of urban and cultural development.  
EN 27   EN Liverpool, European Capital of Culture 2008, and the HerO network “Heritage as Opportunity” 
(ERDF URBACT project with a Fast Track Networ k label: Regensburg, Germany, as lead partner 
and other partners from Austria, Italy, Lit huania, Romania, UK, Poland, France and Malta) 
A deprived area 25 years ago, Liverpool became Eur opean Capital of Culture in 2008. The key words 
of its success were participation, repositioning, regeneration and sustainability. The city organised 
national and international events, strongly focussed  and engaging local people. Intercultural dialogue 
required much creativity. Starting from cultural a ssets such as its maritime heritage, music and 
football, Liverpool became a brand for UK tourism itse lf. It is now one of the most popular cities in 
the UK for international visitors, after London and Edinburgh. 
The research team “Impacts 08” has developed a mo del for evaluating the multiple impact of culture-
led regeneration programmes that can be applied to events across the UK and internationally. 
The city is keen to share its experi ence with other cities. It is me mber of the HerO network "Heritage 
as Opportunity", funded by th e URBACT programme, a network of 10 cities with the aim of 
developing innovative management strategies balancing in a sustainable way the different needs of the 
local population, tourists, conservationists and lo cal business. Heritage management is more than 
preserving the past, it is about being creative and cap italising on the potential of cultural heritage 
assets for economic, social and cultural activities. 
At project level, the main expected outputs of th e HerO network are the compilation of interesting 
cases, the development of integrated management plans and as policy recommendations and practical 
guidance. At local level, support groups  and action plans will be established. 
The Fast Track label given to the HerO netwo rk under the initiative "Regions for Economic Change" 
provides opportunities and benefits. The Commission not only provides grants but participates in the 
discussions with the Managing Authorities to de fine strategies leading to concrete action in 
operational programmes  
The Commission will launch initiatives in 2011 to bring together the main actors at regional, 
national and European levels with the aim of making more strategic use of current and 
planned measures in support of cultural and crea tive industries.94 
2.4.2.  Design for user-centred innovation 
Although often associated with aes thetics and the ‘looks’ of products only, the application of 
design is in reality much broade r. User needs, aspirations and abilities are the starting point 
and focus of design activities, integrating,  for example, environmental, safety and 
accessibility considerations into products, services and systems. Design is increasingly recognised as a means for user-centred i nnovation, which however, is not sufficiently 
reflected in most national and regional innovation policies
95. Integrating a desi gn aspect at an 
early stage in innovation projects can stimulat e market take-up and the commercial success of 
innovations. 
South East England: stimulating eco-design in SMEs 
Design & Innovation for Business Sustainability (DIB S), led by WSX Enterprise and supported by the 
ERDF: is a programme stimulating SMEs to incor porate sustainable design into their products and 
services, cutting resource costs and attracting environmentally-awa re customers.  
. 
                                                 
94 As part of the "Innovation Union" flagship initiative,  specific actions will be undertaken to strengthen 
the role of cultural and creative industries as a catalyst for innovation and structural change.  
95 “Design as a driver of user-centred innovation” (SEC(2009)501 final). 
EN 28   EN Design support for SMEs, De Montfort University, East Midlands, UK96 
Through intensive design support, the De Montfort  S programmes have generated over 40 commercial 
products and created over 50 new jobs for regional SMEs over the past 5 years.  
The programmes facilitated the translation of resea rch outcomes and knowledge into new commercial 
products and services. Partnerships with regio nal design consultancies and other universities 
provided the in-depth specialist support required  to meet the innovation needs of SMEs.  
The project received € 800 000 of ERDF co-funding and provided a 7.5 x return on investment with 
respect to GVA increase, which will increase as more products are brought to market. 
. 
The SEE project (‘Sharing Experience Europe – Policy, Innovation, Design’ (ERDF INTERREG 
IV C)  
This Network of 11 organisati ons shares knowledge and experience in  order to develop new thinking, 
disseminate good practice and influence local, regional and national policies for design and 
innovation. The partners come from the UK, Belgiu m, Denmark, Estonia, Finland, France, Ireland, 
Italy, Poland, Slovenia and Spain. All are currently  involved in their own regional innovation policy 
and their regional governments have committed to exploring improvements in the provision and 
delivery of innovation, entrepreneurship and design through individual or joint policies 
2.5. Digital Agenda 
2.5.1.  Why does the EU need a Digital Agenda? 
The availability of fast internet access and s ophisticated on-line services on the World Wide 
Web is changing the very nature of innovation. 
Some 250 million internet users in the EU an d almost 2 billion worldwide are engendering 
new business models, stimulating innovation in  product development and service delivery, 
forcing the formulation of new marketing strate gies, increasing social inclusion and political 
participation, enabling a better realisation of cultural production, changing social habits and 
reshaping social and economic models. The In ternet is fuelling i nnovation and change on a 
massive and historically unprecedented scale. 
From now on, the rate of innova tion will also depend on the quantity and quality of the 
connections in this huge communication network.  Reducing gaps in access and the use of high 
speed communication networks and internet-based services may help to feed a new type of 
innovation beyond the restrictive environment of  research laborato ries and university 
campuses. 
The Digital Agenda calls for leveraging more private investment, better coordination and 
pooling of resources, joint research infrastructu re and innovation clusters, the development of 
open platforms for new applications and services , and ‘lighter and faster’ access to research 
funds. The Commission will notably: 
• Leverage more private investment throug h the strategic use of pre-commercial 
procurement and public-private partnerships by maintaining a 20% yearly increase in the 
ICT R&D budgetin FP7.  
                                                 
96 http://www.dmu.ac.uk/ 
EN 29   EN • Reinforce the coordination and pooling of resour ces with Member States and industry, and 
put greater focus on demand- and user-driven pa rtnerships in EU support for ICT research 
and innovation. 
• Ensure sufficient financial support for joint ICT research infrastr ucture and innovation 
clusters,- and further de velop e-infrastructures  
• Together with key national, regional and local  partners, engage, thr ough CIP financing, in 
large scale pilot projectsto test and develop innovative and inter-opera ble solutions in areas 
of public interest.  
2.5.2.  Research and Innovation in ICT: a key action 
The Communication "A Strategy for ICT R&D and Innovation in Europe: Raising the Game" 
highlighted the need to:  
• Support European leadership in ICT as a key enabling technology of the future.  
• Support knowledge hubs with unive rsities, research instit utes and infrastructure 
maintaining strong links with industry.  
• Support the importance of combining 'demand pull' from innovative markets with 'supply 
push' from new ICT and infrastructure to achieve both public serv ice goals and business 
growth.  
ICT research is the single largest budget ite m under the current EU Research Framework 
Programme (FP7). ICT in FP7 focuses on key areas where the EU has competitive advantages and established strengths, lik e communication and service infrastructure, electronics and 
photonics, digital content, and cognitive system s and robotics, as well as in challenging 
application areas such as health care, social inclusion, transpor t, energy and the environment. 
In the ICT Policy Support Programme (PSP),  one of the three areas of the EU's 
Competitiveness & Innovation Programme (CIP) supports the piloting of  inter-operable pan-
European digital services, notably for public se rvices. The ICT PSP is aimed at stimulating 
innovation and competitivenes s and accelerating the devel opment of a sustainable, 
competitive, innovative and inclusive information society.  
There is a need to reinforce combined effort s and exploit synergies with related Community 
R&D and Innovation policies to pr ovide increased support for the strategic content of the ICT 
R&D policies and programmes. Here  the public sector should take a more proactive role as a 
technologically-demanding buyer which, thro ugh pre-commercial procurement and/or 
procurement of innovation, stimulates the deve lopment of innovative solutions for the socio-
economic challenges which the EU faces. In addition to improving the quality and 
effectiveness of public services, this can help  create opportunities for companies to assume 
international leadership in new markets. 
2.5.3.  Findings of the 2009 Strategic Report in  relation to the digital priorities 
The Strategic Report,
97 adopted in March 2010, concluded that investment in the digital 
economy - rolling out broadband and exploiting ICT use in the public and business sectors - is 
proceeding relatively slowly and unevenly, even if it is possible to identify examples of good 
practice.  
                                                 
97 COM(2010)110 of 31.03.2010 http://ec.europa.eu/regional_policy/policy/reporting/cs_reports_en.htm   
EN 30   EN The following graph illustrates the rate of pr ogress across Member States in implementing 
ICT projects linked to  the Digital Agenda: 
Digital Agenda 
Allocation to selected projects 2007-2013
0,000,501,001,502,002,503,003,504,00
PL IT GR SK ES CZ PT HU FR RO UK DE LT LV SI FI SE EU27Decided EU investment 2007-2013 (€bn)0%10%20%30%40%50%60%70%80%
Rate of progress (%)
€ bn % project selected 
It is crucial that Member States improve th e implementation of progr ammes with increased 
transparency, networking and the exchange of  good practice and polic y learning on cohesion 
policy priorities to make an early contri bution to pursuing the Europe 2020 strategy, its 
flagship initiatives and its quantified targets.  
Capitalising on good ideas 
Beyond the significant financial investment foreseen for the 2007-2013 period, Cohesion 
policy also contributes to the promotion of ICT via supporting the exchange of good practice 
and innovative ideas between regions. Currentl y, three ICT related fast-track networks, 
included in the Regions for Economic Change in itiative, are in operatio n across the EU, with 
the aim of promoting innovation and the knowledge  economy at regional  and local level by 
transferring innovative ICT-related ideas in to mainstream Cohesion policy programmes: 
B3 Regions: Regions for Better Broadband connection98  
B3 Regions s aimed at improving the effectivene ss of regional development policies as regards the 
Information Society, by spreading the examples of  good practice of the expert partners relating to 
broadband implementation in disadvantaged areas. The aims are: 
1. To share experience of implementing broadband and related issues (such as demand aggregation 
and state aid regulation).  
2. To spread the benefits achieved in the consortiu m to external stakeholders and, in particular, to 
Managing Authorities and ICT agencies willing to implement successful broadband strategies with 
Structural Fund support. 
. 
PIKE: Promoting Innovation and the Knowledge Economy99  
The aim of the project is to improve regional and local Innovation & K nowledge Economy policies 
through the exchange and transfer of examples of e-Government and Wireless Broadband good 
practice, and through the integration of these into the development policies of participating regions 
 
                                                 
98 http://www.b3regions.eu/   
99 http://www.pike-project.eu/   
EN 31   EN IMMODI: 
This project is aimed at making the most of the results and examples of good practice developed by the 
partners as regards of e-Government and e-health, which contribute to the development of mountain 
and rural areas. Selected examples will be presente d at technical and regi onal workshops, detailed in 
a published guide and discussed with Managing Author ities in order to transfer them into the 
development programmes of participating regions 
 
Regio Stars Awards: original and innovative projects which can inspire other regions 
High Speed Broadband roll out in Auvergne 
High-speed broadband access is a decisive factor of competitiveness for region, in terms of both 
attracting new residents and firms and persuading exi sting ones not to leave. Auvergne, one of the 
most sparsely populated regions in France, launche d the first telecommunications public/private 
partnership in the country, with the help of a EUR 10 million ERDF grant, to extend high-speed 
broadband coverage to all households. 
. 
Computer Literacy Basics for a Lithuanian e-Citizen  
(Funding: :EUR 2,694,534 of which EUR 1,996,650 from the (ESF) Promoting computer literacy is key to reducing the digital divide which exists in Lithuania. The 
objective of the project was to increase the accessi bility of the Internet and e-services by providing 
information and computer literacy training to adu lts, establishing Public Internet Access Points 
(PIAPs) and stimulating the growth of e-services count rywide. Key target groups included those living 
in remote areas with little access to  digital services, in particular in rural regions, the elderly and 
those with disabilities. The aim was to equip 300,000 Lithuanian residents with computer literacy 
skills, in line with the objectives established by th e national Knowledge Socie ty Council. The project 
was conducted countrywide between  2006 and 2008. Over 50,400 adults (with an average age of 43, 
61% of whom came from small towns and rural area s) have since completed the LIA courses - helping 
to boost the overall competitiveness of Lithuania’s economy by upgrading skills. LIA is a good example of private and public partnership, especially with local municipalities, which make it possible 
to reach directly people persons living in district centres and rural areas. 
. 
.A new business model for ambulatory monitoring of patients suffering from congestive heart 
failure, Brandenburg 
Total cost: EUR 242,402 of which EUR 86,172 from the (ERDF)  The project combined the expertis e of various regional partners to provide an innovative ICT based 
business model for long term, ambulatory management  of patients suffering from congestive heart 
failure in underdeveloped areas. On e of the priorities was to encourage regional SMEs to develop 
business models using ICT applications that create new services or optimise the workflow of existing 
services in the health care industry. A further aims  was to investigate a new tele-monitoring device 
capable of measuring and transmitti ng multiple vital-indicators to a tele-medical centre to analyse the 
data. The concern aim was to reduce the number of  hospital admissions per patient, the number of 
days spent in hospital when admitted and the associated health
 care costs, while at the same time 
increasing the standard of health care and the quality of life for patients. 
 
EN 32   EN 2.6. Demand-pull for innovation: Public Procurement 
Public procurement is recognised as a key driver  of innovation particularly in areas where the 
public sector is a major purchaser. The Innova tion Union proposes that Member States and 
regions set aside specific budgets for procurement of innovative solutions.  
An important approach is  through  pre-commercial procurement where public authorities 
provide contracts to develop new solutions for specific challenges where existing products or 
services available on th e market are inadequate100. Another approach is for public tenders to 
set performance criteria or eval uation criteria which stimulate innovation in the market.  
A number of trans-national networks have  been supported by the European Commission 
under the Lead Market Initiative101 and other policies, such as  territorial cooperation, to 
develop this approach.  
The Innovation Union flagship initiative propo ses further EU support for procurement of 
innovation, including through the use of the Struct ural Funds. A particular focus will be on 
European Innovation Partnerships that are inte nded to provide a framework for major supply-
side and demand-side measures – including pr ocurement – to address specific societal 
challenges. 
East of England pre-commercial procu rement for health care innovations.  
In May 2009 the East of England Development Agency together with the UK National Health Services 
East of England and UK Technology Strategy Boar d launched a pre-commercial procurement of an 
innovative process, material, device, product or service which will help to meet current health 
priorities in the region. This initiative was by th eERDF. Up to £100,000 was awarded for winning 
tenders in a first phase with the potential of fu rther financial assistance to develop and evaluate 
projects in a second phase.102 The aim is to provide procuremen t opportunities for innovative health 
care businesses and bring the benefits of new i nnovations and technologies to patients. 
RAPIDE  is a Fast Track Network of the Regi ons for Economic Change Initiative funded by 
INTERREG IVC.  
The project is focused on supporting the implementati on of good practice relating to the role of the 
public sector in stimulating innovation in part ner regions, for example through: procurement, 
investment decisions (gap funding, regeneration etc. ), initiatives that assist and advise businesses and 
academia-business partnerships and policy development and adoption103.  
3. INCREASING SYNERGIES BETWEEN POLICY INSTRUMENTS  
This chapter outlines possible ways of incr easing synergy between EU funding programmes, 
in particular between those which are ma naged by the Commission and those which are 
implemented by national and regional authoritie s under the shared management approach of 
Cohesion Policy.  
3.1. Main EU funding instruments 
The main EU funding instruments co nsidered in this section are: 
                                                 
100 The legal framework and good practice on pre- commercial procurement are provided in the 
Commission Communication "Pre-commercial Procurement: Driving innovation to ensure sustainable 
high quality public services in Europe", COM(2007)799. 
101 See Lead Market Initiative website at http://ec.europa.eu/enterprise/policies/innovation/policy/lead-
market-initiative/index_en.htm   
102 More info on: http://www.eeda.org.uk/4091.asp   
103 www.rapidenetwork.eu 
EN 33   EN • the EU 7th Research Framework Programme (FP7), in particular the "Capacities" 
programme that includes “Regions of K nowledge (RoK)”, “Research Potential in 
Convergence and Outermost regions (RegPot) ”, "Research Infrastructures (RIs)", in 
connection with the European Strategic Foru m for Research Infrastructures (ESFRI), and 
"Research for the benefit of SMEs"; 
• the Competitiveness and Innovation Framework Programme (CIP), in particular its 
"Enterprise and Innovation Programme" with financial instruments, innovation and 
business support services, networking proj ects between innovation policy-makers and 
support providers and ec o-innovation projects; 
• the Structural Funds (SF), namely the Eu ropean Regional Development Fund (ERDF), 
including INTERREG IVC and U RBACT II, and the European Social Fund (ESF), which 
support Cohesion Policy. 
The importance of research and innovation is reflected in the budget allocations to these 
funding instruments: the 7th Research Framework Programme (FP7) has a budget of some € 50 billion; the Competitiveness and Innovation Framework Programme (CIP), has a budget of € 3.6 billion, part of which supports innovati on, and the Structural Funds have a budget of 
€ 85 billion dedicated to innovation, of which n early € 50 billion are allocated for core 
research and innovation. 
 
3.2. Policy framework (synergies of design) 
According to the General Regulation on Cohesion Policy104 the Commission and the Member 
States shall ensure that the assistance from the funds is complement ary to other financial 
                                                 
104 See Article 9 of Council Regulation (EC) No 1083/2006, of 11.7.2006, OJ L210 of 31.7.2006 
EN 34   EN instruments and the Commissi on decisions adopting FP7 a nd the CIP contain similar 
provisions105. 
Achieving the necessary "synergies" between the instruments is a major challenge, given that 
they generally have different in tervention logics, thematic priori ties, timing and funding rules. 
Moreover, their implementation usually invo lves different administrative levels and 
authorities.  
With a view to encouraging synergies, th e Commission, in 2007, adopted the Communication 
"Competitive European Regions through Research and Innovation"106, which built on earlier 
work of the European Parliament, the European Research Advisory Board107 and the 
Scientific and Technical Resear ch Committee of the EU (CREST)108. The key message of the 
Communication was the need for th e Member States and regions to improve the arrangements 
for co-ordinated preparation and use of th e EU funding instruments for research and 
innovation. 
The Communication also acknowledged in its conc lusions the important ro le of the European 
Commission in promoting synergies. Since its ad option, therefore, a numbe r of practical steps 
have been taken by the Commission in that direction. 
A "Practical Guide to EU funding oppor tunities for research & innovation"109 has been 
produced that provides potential beneficiaries with straightforw ard and simple information on 
EU research and innovation fundi ng. The guide includes a shor t description of the possible 
support offered by the three instruments, a check list of questions an d a scorecard to be 
completed in order to highlight th e most appropriate funding source. 
In addition, the guide explains the rules for combining the funding instruments and stresses 
the role of national an d regional authorities in exploiting the potential for synergies and 
fostering a co-ordinated access to the EU funds. This involves fostering greater cooperation at 
regional level between the organisations involve d in the management or implementation of 
the different EU funding instruments, such as : the Managing Authorit ies for the programmes 
of the Structural Funds; the National Contact Points (NCPs) for each area of FP7 and the 
Enterprise Europe Network (EEN) for the CIP.  
In complement to the Practical Guide, a Commission Staff Worki ng Document containing 
actual examples of synergies in the use of the different source s of EU research and innovation 
funding in the Member States is being finalised. 
Also, steps are being taken to better info rm national and regional authorities on the 
beneficiaries of EU research and innovation fundi ng located in their regions. This information 
is already provided to the nationa l authorities and the aim is to distribute it more widely at the 
regional level. 
                                                 
105 Decision No 1639/2006/EC OF THE EUROPE AN PARLIAMENT AND OF THE COUNCIL of 24 
October 2006 establishing a Competitiveness and Innovation Framework Programme (2007 to 2013); Decision No 1982/2006/EC OF THE EUROPE AN PARLIAMENT AND OF THE COUNCIL of 18 
December 2006 concerning the Seventh Framewor k Programme of the European Community for 
research, technological development and demonstration activities (2007-2013) 
106 COM(2007) 474, 16.8.2007 
107 Now the European Research Area Board (ERAB) 
108 Now the European Research Area Committee (ERAC) 
109 Practical guide to EU funding opportunities for research and innovation (2009): 
http://cordis.europa.eu/eu-funding-guide/home_en.html  
EN 35   EN Although much progress has been made, there is st ill room to further st rengthen and deepen 
synergies between the funding sources. Follo wing a recommendation from the Council110 an 
ERAC (former CREST) working group has examin ed synergies not just between the FP7, the 
CIP and the Structural Funds but more wi dely in the "knowledge triangle" including 
education and life-l ong learning. The conclusions of this work will feed  into the deliberations 
an expert group on synergies,  established under the 2010 work programme of the FP7 
regional actions, which will closely examine the development of synergies during the current programming period and the prospects for the next period, post 2013. 
Finally, the importance of synergies between funding sources for research and innovation was 
examined in the Week of Innovating Regions in Europe (WIRE) conference organised under 
the Spanish Presidency of the EU in March 2010 and will also be considered in a further WIRE conference under the Hungarian Pres idency in the first semester of 2011. 
Ireland: Resourcing Information and Technology  Transfer in the Border, Midland and Western 
Region - a Regional Programme of Innovative Actions (2006-2008) 
The programme was aimed at strengthening small business interaction with the higher education 
sector and helping owner managers develop their businesses through tailored mentoring and 
management assistance. 
Through the provision of research vouchers, 23 sm all firms across the region were able to access 
specialist research and knowledge services from colleges which allowe d them to progress to the next 
stage of their business growth plans. 
The business mentoring initiative for winners target ed small firms which had emerged from the 
Campus/Incubation environment as well as SMEs  with high value added export potential. Small 
specialist firms received strategic business planni ng, management and marketing supports under the 
scheme. 
These initiatives are being mainstrea med by the Irish Government and the EU FP7 has been identified 
as a possible vehicle to further stimulate the positive results obtained 
ERDF funding: EUR 1,108,233 More information: www.bmwassembly.ie
 
. 
Spain, a thematic network on R&D&I fund ed by SF, better coordination with FP7 
The Spanish National Strategic Reference Framew ork has established a coordination committee and 
thematic networks for ensuring complementarity be tween the Structural Funds and other national and 
community financial instruments; as well as fo stering exchange of good prac tice and lessons learned 
among managing authorities and main stakeholders.  
The research, development and innovation (R&D&I) ne twork is being supported under the "Technical 
Assistance" priority of the Operational Programme  "Technological Fund". CDTI (the Spanish Centre 
for the Development of Industrial Technology) is currently managing an operation called: "Support to 
the Spanish leadership of European and Internat ional projects" (ERDF support: around EUR 150 
million) which consists of three main parts: 
• Demonstration Projects derived from pr evious FP projects led by Spanish partners. 
• Support for the participation of Spanish compani es in the Joint Technologies Initiatives (JTI) 
fostered by FP7.  
• Support to international projects, mainly those in the EUREKA programme. 
                                                 
110 Competitiveness Council Conclusions of 3 December 2009 on guidance for future priorities. 
EN 36   EN 3.3. Practical examples of synergies (synergies in action) 
3.3.1.  Research infrastructures and Research Potential 
The Commission has started encouraging the Mana ging Authorities to consider the possibility 
of using the Structural Funds to provide complementary funding for two actions under FP7 
which are of particular importance for the regi ons but which suffer major funding constraints. 
These are the Research Infrastructures id entified by the European Strategy Forum on 
Research Infrastructures (ESFRI) 111 and the Research Potential action112. 
The Research Potential action is included in the Capacities Programme of FP7 and focuses 
explicitly on Convergence and Outermost regions. It aims at strengtheni ng the capacities of 
researchers in these regions to successfully part icipate in research acti vities at EU level. 
Projects are assessed in terms of scientif ic quality, management and impact, including 
regional development, by panels of experts. Due to a lack of resources, many projects 
assessed as good under this initia tive cannot be supported by FP7. 
ESFRI gives national authorities the opportunity to join tly explore the need s for new research 
infrastructures and to identify projects of pa n-European relevance. The ESFRI projects are 
selected by a Committee (delegates of the Memb er States) on the basis of a first analysis 
undertaken by a technical working group (scientif ic experts). Therefore, the ESFRI projects 
are, therefore, clearly relevant  for EU research. FP7 can fund the preparatory phase of the 
projects (e.g. feasibility studies) but cannot support their construction. This can be done 
through the existing national and EU funding instruments, includi ng the Risk Sharing Finance 
Facility (RSFF),113 a joint initiative of the Commission and of the European Investment Bank. 
Possibilities for funding Research Potential and ESFRI projects are being explored by a 
number of national authoritie s responsible for scientific research and some Managing 
Authorities of ERDF programmes.  The projects need to meet  requirements of scientific 
excellence and impact on the regional economy. For some ESFRI projects , industrial partners 
have already been identified and letters of in terest from companies received, demonstrating 
the potential impact on the econom y (partnership with innovative industri es, large companies, 
SMEs and start-ups; links w ith innovative incubators for the creation of spin-offs). 
ELI project (Extreme Light Research Infrastructure)  
The ELI project has been selected by the ESFRI Committee as being of pan-European interest. The 
preparatory phase of this laser facility, involv ing 40 research and academic institutions from 13 
Member States and supported by FP7 Capacities, has led to the selection of three sites providing 
complementary technologies, situated in the C zech Republic (near Prague), Hungary (Szeged) and 
Romania (near Bucharest).  
Possibilities for funding under Cohesion policy the c onstruction of new research infrastructure on the 
three sites (total costs exceeding EUR 700 million) are being explored by the national authorities responsible for scientific research and management of th e Structural Funds programmes with a view 
to meeting requirements relating to scientific excellence and the impact on the regional economy. 
Industrial partners have been identified and letters of  interest from companies have been received. 
More information: http://www.extreme-light-infrastructure.eu/index.php
 
                                                 
111 http://ec.europa.eu/research/infras tructures/index_en.cfm?pg=esfri  
112 http://cordis.europa.eu/fp7/capac ities/convergence-regions_en.html   
113 http://www.eib.org/products/loan s/special/rsff/index.htm?lang=en   
EN 37   EN In the future, the Commission could envisage  exploring funding oppor tunities for other good 
projects identified under EU Re search policy. For instance, in the context of the sub-
programme "Cooperation" of FP7, Eu ropean Technology Platforms (ETP)114 can act as a 
catalyst for research projects on some specifi c themes, involving businesses and promoting 
knowledge partnership for innovation. 
3.3.2.  Synchronised support for innovation projects  and take-up of research results  
The CIP co-financing of pilot and market replica tion projects, in particul ar in the fields of 
eco-innovation and ICT, as well as  the technology transfer and bus iness partnering services of 
the Enterprise Europe Network, can help rolling out innovations  that were developed with 
Structural Fund support in the Internal Market. The CIP financial instru ments can facilitate 
the economic success of firms that devel oped business innovation ideas emanating from 
Structural Fund supported research projects.  
Research results obtained by SM Es through the "Research for th e benefit of SMEs" projects 
of FP7, can lead to commercia l innovation ideas that may bene fit from SF support for their 
development, demonstration and implementation. 
3.3.3.  Science and technology parks 
The most commonly used definition of a science park in Europe is that of the International 
Association of Science Parks (IASP)115 ‘A Science Park is a bu siness support and technology 
transfer initiative that: 
• encourages and supports the start up and incubation of innovation led, high growth, 
knowledge based businesses; 
• provides an environment where larger and in ternational businesses can develop specific 
and close interactions with a particular centre of knowledge creation for their mutual 
benefit; 
• has formal and operational links with centres  of knowledge creation such as universities, 
higher education institutes a nd research organisations’. 
Science and industrial parks faci litate the establishment of li nks between higher education, 
research and businesses. They are cata lysts for technology tr ansfer activities. 
In the report,116 the European Economic and Social Co mmittee (EESC) refers to "Technology, 
Industrial, Innovation and Science Parks (TIIS)" as fulfilling the requirement to bring together 
universities, other research institutions and enterprises in all Member States and so help to bridge the technology gap between  regions. The EESC stresses th at TIIS are contributing to 
European industrial change, enhancing innovation-, clusteri ng- and Business-to-Business 
activities, and supporting SMEs and regional job creation. EESC also high lights the fact that 
TIIS play a prominent role in efforts to fa cilitate and stimulate innovation and regional 
development, given that they enhance co mpetitiveness, while helping to reduce 
unemployment and the gap be tween divergent levels of  regional development. 
                                                
 
114 More information: http://cordis.europa.eu/technology-platforms/home_en.html  
115 "Regional Research Intensive Clusters and Science Parks", EU Commission, DG RTD, September 2007 
116 EESC document CCMI/025 (14/12/2005) and CCMI/072 14/07/2010. 
EN 38   EN Science Park Potsdam Golm, Germany (Finalist RegioStars Award 2009)117 
Since the mid-1990s, the Science Park at Golm on  the outskirts of Potsdam has developed into the 
largest and most important science and research cent re in Brandenburg. Originally the site of 
Potsdam University, Golm now hosts three Max Planck Institutes, two Fraunhofer Gesellschaft 
Institutes, a business incubation centre( GO:IN) and many innovative enterprises. 
GO:IN, which opened in 200,7, provides ideal star t-up conditions for new entrepreneurs with services 
such as conference rooms, joint marketing and coaching. In 2008, it housed 28 enterprises. 
ERDF contribution: EUR 74.3 million More than 1.300 scientists are working at the science park and the various university institutes have a 
total of 7.000 students. Many joint research projects have been funded under FP5, 6 and 7. 
More information: http://www.wisspark.de/
 
In addition to fostering innovation for enterpri ses, the ERDF and ESF also support action to 
promote innovation in public au thorities including, for instan ce, experimentation with new 
forms of innovation, integration of innovation into social systems and urban planning and so 
on. Examples of good practice and measures that  were developed and tested under CIP, FP7 
and INTERREG projects could be taken-up and im plemented by managing authorities in their 
Operational Programmes. 
3.3.4.  Innovation, research system s and cluster initiatives 
There is a need to develop synergies between pilot projects funded under the different policy 
instruments (RoK, RegPot, Europe  INNOVA and PRO INNO Europe®118, FTN and other 
INTERREG and URBACT projects). To pursue this ob jective, it is crucial to foster a greater 
cooperation at regional level be tween the above mentioned orga nisations involved in the 
implementation of the different EU funding instruments. 
                                                 
117 Investing in our regions, 150 examples of projects co-funded by European Regional Policy, EC, 2010. 
118 See www.europe-innova.eu  and www.proinno-europe.eu   
EN 39   EN CLOE (Fast Track Network INTERREG IVC) to Cl usterpast (FP7-Regions of Knowledge project, 
lead partner Lyon, France), to the European Cluster Observatory (CIP project) and to the mainstream programmes of the Structural Funds 
The CLOE network "Clusters Linked  Over Europe" was one the first Fast Track Networks under the 
“Regions for Economic Change” initiative, created to speed up the transfer of good practice from 
pilot projects to large scale Structural Fund Op erational Programmes. CLOE has become the hub for 
over 25 local networks across Europe. CLOE and has  produced a Cluster Management Guide for 
regional authorities and cluster managers, iden tifying good practice, and methods, tools and 
processes for setting up and managing clusters in regions. 
The Clusterplast network
, created by some CLOE partners, is an inter-cluster initiative funded under 
the Regions of Knowledge action (FP7) to target  the future challenges fo r the polymer converting 
industry. It was set up under a Joint Action Plan (JAP) designed to promote synergy between local and regional authorities, businesses and research organi sations from the 6 European regions 
involved. The JAP will support technology-led devel opment in the regions, encouraging innovation 
through collaboration between RTD centres and com panies, stimulating new enterprises, attracting 
new investment through various varied initiatives and  coordinating activities to ensure consistent use 
of public and private funding. 
One output from the Clusterplast project will be the provision of a large information set for the 
European Cluster Observatory (CIP project). A ma jority of the common activities defined in the 
Clusterplast JAP could be eligible under the mainstream programmes of the Structural Funds. 
More information: http://www.clusterforum.org/
, http://www.clusterobservatory.eu/ , 
http://www.clusterplast.eu/  
3.3.5.  Improvement and internationalisation of innovation support services  
The 500 regional partners or more involved in the Enterprise Europe Network, have been 
recently encouraged to extend th eir business services to other stakeholders operating in EU 
regions. Traditionally, network partners are oriented towards the direct delivery of services to SMEs. From 2011 onwards they will also provide support to cluster organi sations, IP advisors 
and public enterprises to encourage them to  take up new innovation support schemes that 
have been developed through pilot activities  in Europe INNOVA and INTERREG projects. 
The Europe INNOVA valorisation project and a new role for the Enterprise Europe Network 
The Europe INNOVA platform is aimed at developi ng better innovation supp ort measures and making 
them available to professionals. In the past, the use of new measures has often been limited to the 
projects developing them. Since 2009, the TAKE IT UP project has provided support for all Europe 
INNOVA projects in better testing new measures in more regions and in documenting their results in 
an easily accessible manner. The work of TAKE IT UP  is supported by an expert group that includes 
representatives from partner organisations of the Enterprise Europe Network. 
The promotion of measures developed through  Europe INNOVA, like th e training courses on 
IP management, the European innovation ma nagement benchmarking platform (imp³rove) 
and others, can have a quick and tangible impact  and can lead on from joint policy analysis to 
better support for innovation in  regions. Innovation support measures need to be adapted to 
the characteristics of the regions concerned and to build on local strengths. Incentives also 
need to be provided for the development of new or improved innovation support measures in 
EN 40   EN order to accelerate the development and wider use of good practice, so contributing to more 
effective use of public funding.119  
4. TOWARDS SMART SPECIALISATION STRATEGIES  
4.1. Why do we need smart specialisation? 
Regional innovation policies have often demonstrated a lack of  efficiency in identifying 
priorities for individual region s and forms of practical colla boration between regions. It is 
widely argued that this is one aspect that regional strategies have been unable to solve, 
leading to a wasteful use of pub lic resources and hampering, or de laying, the realisation of the 
potential benefits for society. This is an even mo re critical issue in the present crisis in view 
of the scarcity of public and priv ate financial resources available.   
A more promising strategy appears to be for regions to construc t a strategic vision of their 
future that identifies how they should pos ition themselves in the knowledge economy. 
Formulating such a strategy means finding out which R&D and innovation activities can best 
be developed competitively in the region concerned and then implementing the policies 
necessary to pursue this vision. Such a discov ery process is at the heart of - a smart 
specialisation strategy. 
In this context, regions need to find their ‘market niches’ and to increase efforts to absorb 
knowledge targeted at the economic  activities that have  the potential to produce quick results 
in global markets and to address the social challenges they face, as well as that of 
globalisation. In sum, they have to bet on smart growth.  
Investment in R&D, human capital and innovation is crucial for all regions. But they start 
with different endowments of these assets. Ther e are potentially large gains from strategies 
that exploit an original, globally competitive sp ecialisation niche and strengthen it over time. 
In order to have a meaningful impact, R&D and innovation resources mu st reach a critical 
mass and need to be supported as much by targ eted interventions in human resources and 
knowledge infrastructure as in the provision of  suitable framework conditions for businesses. 
By focusing on areas of comparative advantag e and key enabling technologies or social 
challenges, smart specialisation strategies120 can ensure a more efficient and effective use of 
funds and human resources and potentially leve rage larger amounts of private investment. 
The exploitation of economies of scale has been  a major motivation for pooling resources and 
for EU approaches to RTD policy, as evidenced by numerous infrastructure initiatives, the increasingly large-scale measures supported by the FP (Networks of Excellence, Integrated 
Projects) and the European Technology Platfo rms, the EIT and other recent initiatives. 
However, priority-setting is st ill largely undertaken w ith national or regiona l considerations in 
mind, often failing to reap the full benefits of the opportunities offered by an enlarged European Research Area (ERA). 
In order to have an appreciable economic impact , RTD efforts must reach some 'critical mass' 
threshold. Priority setting is im portant, since individual regions or  countries may be unable to 
reach such a critical mass and so realise a comp etitive advantage in a specific area (e.g. nano- 
                                                
 
119 Commission Staff Working Document SEC(2009)1197 on “Making public support for innovation in the 
EU more effective – Lessons learned from a public consultation for action at Community level”, see 
www.proinno-europe.eu/sites/default/files/page /10/07/making_public_support_for_innovation.pdf   
120 Foray, D., David, P. and Hall, B. (2009), "Smart Specialisation: The Concept", Knowledge Economists 
Policy Brief No. 9,  
http://ec.europa.eu/invest-in-research/pdf/download_en/kfg_policy_brief_no9.pdf?11111   
EN 41   EN or bio-technology) or industrial sector. In ad dition, priority setting needs to be pursued 
consistently over long periods of  time. Several expert  groups have observed that many regions 
and countries disperse their efforts across too ma ny areas, and identify this as a key failing of 
the EU vis-à-vis its major global partners and competitors.  
Smart specialisation has been conceived as a regional and national strategy to overcome such 
problems. Smart specialisation strategies en tail a process of entr epreneurial discovery, 
identifying globally distinct niches and steer ing the RTDI and business innovation efforts of 
all stakeholders towards those areas. The con cept has been conceived by Prof. D. Foray and 
Prof. B. van Ark in the context of the Knowle dge for Growth Expert group established by the 
Commission. The notion was subsequen tly adopted in the Barca Report121 commissioned by 
DG Regional Policy as well the Expert Group "The role of community research policy in the 
knowledge-based economy"122. Both expert groups propose smart specialisation as a way 
forward for future Cohesion policy. 
4.2. What is smart specialisation? 
In a nutshell, smart specialisation123 is about placing greater emphasis on innovation  and 
focusing scarce human and financial RTDI reso urces in a few globally competitive areas in 
order to boost economic growth and prosperity. 
It should be understood that smart specialisation provides a strategy and a global role for 
every regional economy – irresp ective of whether they are dr iven more by manufacturing and 
new technologies, services and services innovation, or both.  While leader regions  might 
invest in the invention of a generic technology, less advanced regions  are often better advised 
to invest in the development of the applica tions of a generic tec hnology or service innovation 
in one or several important ar eas of the regional economy or in developing cross-sectoral 
approaches. Some examples are biotechnolo gy applied to the exploitation of maritime 
resources; nanotechnology applie d to various agricultural a nd food sectors such as the 
production of wine, cheese and olive oil; services enabled by information technology applied 
to the management and maintenance of th e archaeological and hi storical heritage. 
Effective investment and a policy framework fo r the knowledge based society need to be fed 
by strategic intelligence that stimulates the competitiveness of regions through the 
identification of priorities in high-value added ac tivities. Smart specialisation is an alternative 
to a policy that spreads investment thinly acr oss several areas and se ctors irrespective of a 
region’s industrial structure and knowledge capac ity (in terms of human capital, universities, 
research organisations and so on.). It entails  a fuller tailori ng of research and innovation 
policy to the regional context based on a realistic assessme nt of what can be achieved with 
limited resources. Smart specialisation can, moreover, be a key element in developing multi-level governance for strategic and integrated innovation policies
124. In this sense, policies to 
leverage investment for innovation have to be  better linked to other policy domains and to 
regional development and to be  built on a better unde rstanding of region al strengths in 
relation to those of other regions125. Smart specialisation is expected to create more diversity 
among regions than a regime in which every region imitates others. An absence of smart 
                                                 
121 http://ec.europa.eu/regional_policy/policy/future/barca_en.htm 
122 http://www.earto.eu/fileadmin/content/0 7_News__public_/KBE_Final_ReportRev-3.pdf 
123 Foray, D., David, P. and Hall, B. (2009), "Smart Specialisation: The Concept", Knowledge Economists 
Policy Brief No. 9, http://ec.europa.eu/invest-in-research/pdf/download_en/kfg_policy_brief_no9.pdf? 
124 Background note on "Accelerating the transformation of Europe th rough innovation" for the Joint 
informal meeting of Ministers for research and Industry, Brussels 15th of July 2010 
125 Belgian Presidency input to informal competitiveness council, July 2010. 
EN 42   EN specialisation would almost certainly result in duplication, incr easing uniformity and a lack of 
imagination and vision in setting R&D priorities, which in turn would diminish the potential for complementarities within the EU knowledge base. This could only produce poor results in 
terms of the contribution of R&D and innova tion to EU economic growth: most regions 
would remain unattractive to investors and would not  be able to compete with others to attract 
knowledge resources.  
Smart specialisation is also linked to the concept of world-class clusters
126, which offer the 
possibility of fostering excellence at all le vels and of strengthening specific competitive 
advantages. A particular focus in this re gard needs to be pl aced on supporting the 
development of more world-class clusters in new industries in order to avoid a misallocation 
of scarce resources. 
It is clear that scientific and innovation effort in a few locations and the neglect of the rest of 
the continent is not what Europe  2020 is about. Instead it calls  for smart specialisation as a 
way of reconciling strong centripetal forces towards the development of strong agglomeration 
effects with a relatively balanced geographica l distribution of innovation capacity across the 
EU. It entails regions developing  an original strategic vision in terms of science, technology 
and innovation and implementing the polic ies necessary to bring it about.  
Identifying an original and economically prof itable niche for each region in terms of key 
enabling technologies127 (e.g. ICT bio- or nano- technology), innovation in services or to meet 
social challenges (e.g. energy scarcity or the en vironment) would make the most of existing 
diversity across EU regions while at the sa me time facilitating the emergence of pan-
European areas of specialisation which are competitive at a global level.  
Smart specialisation can help al l regions make the most of EU  resources (such as from the 
Framework Programme and the Structural Funds), strengthen research and innovation 
capacity and mobilise latent potential. It can lead  to a more coherent distribution of resources 
in this area across the EU, by avoiding unnecessary duplication and increasing the potential 
for complementarity between a number of innova tion-related measures. Smart specialisation 
can, therefore, be a catalyst for interregional cooperation. 
Specialisation in the production process, in te rms of the concentration of activity within a 
certain area, generates scale economies, including, at least in certain contexts, in the case of 
knowledge production.128  
The agglomeration of innovation capacity is important for the productivity of 
technological research 
Literature on regional science highlights the importance of spatial dependence in knowledge 
production – i.e. the fact that research activities in any give n place are often influenced by 
related activities nearby.129 This is confirmed by an econometric study130 of the role of 
                                                 
126 http://intercluster.eu/index.php?option=com_flexicontent&view=items&cid=1:frontpage&id = 
159:release-of-the-white-paper-on-the-emerging-of-world-class-clusters&Itemid=1&lang=en  
127 http://ec.europa.eu/enterprise/sectors/ict/key_technologies/index_en.htm   
128 Furman, J. L., Porter, M. E. and Stern, S. (2002) , “The determinants of national innovative capacity”, 
Research Policy, 31, pp. 899-933 
129 Audretsch, D. and Feldman, M. (1996) R&D spillovers and the geography of innovation and 
production. American Economic Re view 86, 630-640; Bottazzi, L. and Peri, G. (2003), "Innovation and 
spillovers in the regions: Evidence from European Patent Data", European Economic Review, Vol. 47, pp. 687-710 
130 Varga, A. (2000), “Local A cademic Knowledge Transfers and the Concentration of Economic 
Activity”, Journal of Regional Science, Volume 40, No. 2, pp. 289-309 
EN 43   EN agglomeration in university R&D productivity in transferring  knowledge to innovation, based 
ion US metropolitan statistical area data. The st udy finds that a “critical mass” of advanced 
technology firms, private research labs and busine ss services is a prere quisite for university 
research to have a significan t impact on regional innovation.  
The development of regional innovation syst ems is a cumulative process characterised 
by positive-feedback: success breeds more success. 
Local innovation capacity is built up slowly over time, an observation that highlights the 
importance of policy with a l ong-term horizon. According to e ndogenous growth models, the 
size of the workforce generating idea as we ll as knowledge accumulated over the past is 
important131 ('standing on the shoulders of giants '). Cumulative processes also have a 
geographical dimension. Localitie s with high levels of agglomeration of innovation capacity 
can act as poles attracting mobile science and technology resources to in itiate a virtuous cycle 
of better performance and more resources.132  
Specialisation is a function of  the extent of the market 
Economic theorists as far back as Adam Sm ith have understood that the move from self-
sufficiency to specialisation is conditional on the means of sourcing o essential inputs not 
produced internally. Following this reasoning, great er specialisation will come naturally as the 
ERA matures and European integration in  research and innovation progresses.  
In its proposed form of implementation, the con cept of smart specialisation draws inspiration 
from studies of the implications of the emergence and diffusion of General Purpose 
Technologies (GPTs, analogous to 'key enabli ng technologies' (KETs)). Historical and 
theoretical insights suggest that  the diffusion of GPTs/KETs akin  to the development of the 
steam engine, electricity and computers in stimulating economic growth.133 A GPT/KET often 
emerges within strict sectoral confines in response to specific needs. The distinguishing characteristic of a GPT'/KET is its ‘gener alisation’ capacity, in  opening up numerous 
opportunities for proximate innovat ion across economic sectors.  
Smart specialisation is built on the pragmatic r ealisation that some regions may be better 
adapted to advancing the frontier (i.e. invent ing new GPTs/KETs), whereas others can be 
involved in the co-invention of applications. The aim of regions  adopting smart specialisation 
strategies is to achieve coherent matching between their science base, technology production 
and economic structure. This is a long-term process, with  echoes of similar processes 
advanced in economic geography under the banner 'the learning region'.
134 
                                                 
131 Romer, P. M. (1990),"Endogenous technological cha nge", Journal of Political Economy, Vol. 5, No. 98, 
pp. S71-S102 
132 Crescenzi, R., Rodríguez-Pose, A., and Storper, M. (2007), "The territorial dynamics of innovation: a 
Europe-United States comparative analysis", Journal of Economic Geography, Vol. 7, pp 673-709; Varga, A. (2006), "The spatial dimension of i nnovation and growth: empirical research methodology 
and policy analysis", European Planning Studies, Vol. 9, pp. 1171-1186. 
133 Crescenzi, R., Rodríguez-Pose, A., and Storper, M. (2007), "The territorial dynamics of innovation: a 
Europe-United States comparative analysis", Journal of Economic Geography, Vol. 7, pp 673-709; 
Varga, A. (2006), "The spatial dimension of i nnovation and growth: empirical research methodology 
and policy analysis", European Planning Studies, Vol. 9, pp. 1171-1186 
134 Asheim B.T. (2001), "Learning regions as deve lopment coalitions: Partnership as governance in 
European workfare states?", Concepts and Transformation , Vol. 6, No. 1, pp.73-101. 
EN 44   EN Regional development through smart speci alisation: The Bluebionet example135  
Bluebionet is focused on the development and adop tion of maritime biotechnology. Four maritime 
regions (in France, Germany ,the UK and Spain) a re coordinating their efforts to strengthen their 
knowledge base through the development of biotech applic ations in this area. This is an example of 
regions with a strategic vision identifying what ma kes their knowledge base unique and distinctive. By 
working in a coordinated way, they have determined that a new technology could modernise and revitalise what is for them an important economic se ctor. Such a vision has enabled them to define a 
competitive area with few players world wide and w ere critical mass is easier to reach. By working 
together, a critical cluster has been formed emerged  and the knowledge assets - people, ideas, labs – 
are available to all members of the network,  encouraging the expertise to remain in the EU . 
 
4.3. How can regions develop a smart specialisation strategy? 
A smart specialisation  strategy should be the end result of an entrepreneurial process of 
discovery. Appropriate means should be mobilis ed to identify and achieve a consensus on a 
smart specialisation strategy that translates global  opportunities (mainly in the form of key 
enabling, or 'general purpose', t echnologies) into regional strengths . It should be stressed that 
smart specialisation does not call for a pre-co nceived “grand plan”, but rather a flexible 
strategy under which the role of policy is one  of monitoring and providing qualified support. 
It should: 
• Be place-based: driven by a pragmatic assessm ent of individual strengths and weaknesses 
and mindful of the region's hi story, territorial characteri stics and broader geographical 
context, especially the activ ities of neighbouring regions.136 The involvement of 
stakeholders in the identification pr ocess is crucial in this regard. 
• Include a pool of strategic resources: proportional in size to the region's ambitions.  
• Be sufficiently broad to allow for a diversif ied portfolio of related activities: striking a 
balance between specialising enough in order to be competitive, but not so much so as to 
hinder diversification and expos e the region to the risk of changing market conditions or 
other external and unpredictabl e events. Cross-sectoral appr oaches and consideration of 
future potiential changes or spin-offs from existing sectors can contribute to such a 
portfolio. 
• Seek complementarities with other regions: regions focusing on the same key enabling 
technology yet with different capabilities a nd capacity can seek synergies by forming 
partnerships for closer res earch and innovation cooperation and mutual policy learning. 
• Assessed and monitored through peer review and anticipate stepwise structural change and 
the accompanying revision of priorities. Monitoring should be accompanied by fall-back 
strategies to avoid sunk costs being magnified. 
• Accompanied by a diverse policy mix, includi ng specific measures for higher education 
and vocational training, support to innovation and SMEs, taking account of necessary 
                                                 
135 Example taken from Foray, D. and Van Ark, B. (2007), Smart specialisation in a truly integrated 
research area is the key to attracting more R&D to Europe,  Knowledge for Growth Expert Group, 
Policy Brief 1, http://ec.europa.eu/invest -in-research/pdf/download_en/policy_brief1.pdf   
136 Barca, F. (2009), "An Agenda for a reformed Cohesion Policy. A place-based approach to meeting 
European Union challenges and expectations", Indepe ndent Report prepared at  the request of Danuta 
Hübner, Commissioner for Regional Policy. 
EN 45   EN changes in framework conditions. The sustaina bility of the strate gy will depend on the 
timeliness of complementary investment in rela ted areas. Care should be taken to ensure 
that the focusing of resources on areas of sm art specialisation does not interfere with the 
development of a broad human capital base. 
Differentiated strategies across space and time  
Strategic objectives will  depend on the regional context and may include: 
• Retooling: support to tec hnological and human resource upgrading within an already 
existing industry; 
• Extending: some diversification of the know ledge base is developed based on synergies 
between two or more activities (e.g. silicon and solar panels); 
• Emerging: the discovery of an entirely new niche which is likely to be viable and 
economically important. 
• Cross-sectoral: a new combina tion of sectors helps generate  innovative ideas for new 
products and services.   
Depending on local context and circumstances, the smart specialisation process can be 
motivated by different rationales and objectives: 
• Retooling of an existing sector : technological upgrading of an existing industry, involving 
the development of applications of a GPT. What is discovered  in this case is the potential 
of a given generic technology to generate structural change in  an already existing industry. 
Here smart specialisation means simply  that a new area of R&D and innovation 
specialisation (e.g. the application of ICT of some kind) is emerging to match an important 
industrial area of specialisati on in the region concerned. In this case, the role of 
entrepreneurs in stimulating the smart specialisation proce ss is obvious. But the retooling 
process can happen in industries which are at different levels of capability (high, medium, 
low). Two examples are given below of extreme cases of high and low capability. Depending on the local context, the role of  policy is likely to  be different too. 
Example 1: The Finnish Pulp and Paper (P&P) industry views nanotechnology as 
a promising source of valuable applications  innovations and its firms are taking 
steps to assess this potential. Some of the P&P companies are responding to these 
opportunities by increasing their overall internal R&D investment, which is aimed 
not only at implementing available technologies but also at exploring recent advances in areas of nanotechnology and biotechnology. 
Example 2: In the Braga region in Portugal, some retooling processes are evident 
involving the application of nanotechnologi es in the agro-food sector in order to 
improve quality control in the production of cheese, wine and olive oil. The 
emergence of biotech applications in the exploitation of maritime resources 
(Galicia, Spain) is another good example.
 
. 
• The co-emergence of R&D/innovation activi ties and the related business activity , 
which suddenly becomes profitabl e and attractive because of th e innovations applied to it. 
While some assets as well as market opportunities  might be present, th e fact that there is 
no industry, or a very  weak ones, makes it difficult fo r the specialisation to emerge 
spontaneously. What is discovered here is simply that research and innovation in a 
particular area will make business activities attractive and profitable when they were not 
EN 46   EN before. However stimulating entr epreneurs to make the discove ry concerned likely to be 
even more difficult than in the previous case since a lot of things are missing to make a 
business commitment economically attractive a nd profitable. While the difference between 
this and the previous case is one of degree (of capability), they require entirely different 
policy approaches. 
The development of IT applications fo r the management and maintenance of the 
archaeological and historical heritage in Italy (Florence) is a prominent example 
of the co-emergence of an R&D/innovation niche and a business activity  
. 
• Extension and diversification of the knowledge base , driven by the potential for 
economies of scope, intra-regional spillovers and potential synergies between different 
activities (an already existing one and an emerging one). What is discovered here is that an 
area for R&D and innovation focus could be high ly productive because of the potential for 
economies of scope and spillovers. A concep tual distinction can be drawn between 
spillovers, in the sense that research input in  one area may generate knowledge applicable 
to another area (e.g. silicon and solar panels), and economies of scope arising from the 
public aspects of core bodies of knowledge applicab le to other areas.  In practice, both 
effects are likely to be a function of the dive rsity of the region’s research and innovation 
activities and the linkages between them. The ro le of entrepreneurs here might again be 
less obvious for the simple reason that ex ploring new areas (even close to the main 
knowledge base) involves more risk and uncertainty than in the first case. 
The region of Toulouse exhibits smart speci alisation in aeronautics (Airbus valley). 
The extension of entrepreneurial activities and high education and research infrastructure to new areas such as satellites and GPS technologies is a good case in point.  
• Cross-sectoral links  can provide a region with the degr ee of originality and specialisation 
in its innovation strategy that  is necessary to differentiate  it and give it a competitive 
advantage compared to other regions. The fo stering of cross-sectoral cooperation has 
proved to be successful in generating ideas fo r new innovative applications and integrated 
solutions. 
In sum, regions need to formulate a smart specialisation strategy to make explicit their 
answers to the following questions: a) what is  the link between the major economic sectors of 
the region and the potential applic ation of a generic technology? b) which are the businesses, 
universities, and other bodies active in the region, which areas  are they active in and how 
should they be supported? c) is there a gap be tween the emerging areas of specialisation and 
the assets and infrastructure in the region and how should this be filled? 
4.4. Assessing smart specialisation st rategies: preliminary thoughts 
A smart specialisation strategy should be devel oped through a process of discovery led by 
entrepreneurs. Nevertheless, policy makers have  a central role in facilitating communication 
and in achieving the consensus necessary between stakeholders for an initial (yet flexible) 
identification of areas and sectors to prioritise; in other words in the definition of a strategy. 
They also have a cruc ial role in 'opening-up' the region to cooperation with other regions 
(nationally and internationally). The design of the strategy represents only the beginning of 
the process of discovery and its ultimate success is closely linked to how systematically it is 
assessed and revised.  
EN 47   EN Yet assessment of R&D and innovation processe s in general, and of those aspects most 
relevant to policy making in pa rticular, is notorious ly difficult. The process by which R&D 
and innovation translate into tangible economic  outputs is characterised by complexity, 
context-specificity and uncertainty. Important el ements of this process leave no measurable 
trail, or only do so partially and with a long  delay. These are important limitations in our 
ability to measure differences and trends and then act upon them, which apply equally to smart specialisation strategies. Nevertheless if strategies ar e designed according to common 
principles they can be compared with each  other and be subjected to peer review. 
Assessment of implementation can also cent re on two facets: the monitoring of the policy 
effort  needed to facilitate regional specialisation and the monitoring of the impacts  of this 
effort in terms of significant economic outcomes.  
Policy efforts 
It is important to assess the consistency of  public support for the knowledge economy with a 
region's smart specialisation strate gy. Regions can develop and use,  inter alia,,  the following 
monitoring and evaluation tools:  
• Indicators of alignment  of regional public R&D, skills generation and industrial structure. 
• Statistical identification  of related variety
137 to direct public reso urces to those areas, 
sectors and skills with the greatest potential for regional growth. 
Impacts 
The impact of the strategy can be assessed by monitoring structural change and economic 
impact. Taking into account the inter-complemen tary relationship between  structural change 
and economic impact, the two dimensions are bot h means to an end as well as ends in 
themselves. 
• Structural change : Monitoring means for changing industr ial structure, and patterns of 
cooperation as well as the structure of science and techno logy, including sp ecialisation and 
proximity to the GPT/KET framework identified need to be developed.  
• Economic impact : These can include a range of indicat ors, appropriately adjusted to the 
regional context, measuring economic impact in  terms of job creati on, skill levels and job 
profiles, the emergence of clusters and the creation of new companies in knowledge-
intensive sectors. 
4.5. A Smart Specialisation Platform 
Some Member States and regi ons are well advanced with the development, and even 
implementation, of smart specialisation strategi es. Other regions may wi sh to share the know-
how obtained and some regions may see a need to  adjust and up-date their strategies with a 
fresh approach. This is obviously for Member Stat es and regions to determine. However as it 
is the basis for the su ccess of the Europe 2020 strategy, in pa rticular the smart and sustainable 
growth flagships, and as the ever tighter constr aint on public finances re quires quick action to 
enhance the economic impact of public inve stment, the Commission puts its arsenal of 
support measures at the disposal of national and regional policy-makers.  
                                                 
137 Frenken, K., Van Oort, F. and Verburg, T. (2007), "Related variety, unrelated variety and regional 
economic growth", Regional Studies, Vol. 41, pp. 685-697 
EN 48   EN It plans to launch a "Smart Specialisation Platform", for national and regional innovation 
policy makers to provide assistance for the de velopment and review of smart specialisation 
strategies.  
This will bring together  the relevant EU funding programme s and policy support activities in 
research, regional, enterprise, i nnovation and education policies.  
It will also bring together expertise from research centres, regional authorities, businesses and 
Commission services, existing platforms and project s so as to help identify needs, strengths 
and opportunities. 
This platform will collaborate closely wi th the CIP-funded open “European Cluster 
Cooperation Forum” to be established under the European Cluster Observatory138 in 2011. 
Building upon the policy cooperation of the Eu ropean Cluster Alliance and taking into 
account the discussions of the informal Competitiveness Council of July 2010, this measure 
will allow policy makers to share the experien ce on cluster policies and evaluation practices 
from national and regional initiatives. 
. 
 Data material & analysis  Expertise & technical 
assistance Platforms for trans-national 
policy learning & 
cooperation 
REGIO • Ex-ante studies and 
analysis 
Ex-post evaluations 2000-
2006 
Thematic Evaluations 2007-
2013  
• Other studies • ESPON studies 
• RfEC good practice case 
studies • RFEC conferences 
RegioStars awards Fast Track Networks of the 
RFEC initiative 
RTD • Regional key figures on 
R&D 
• ERAWATCH  • "Socio-economic Sciences 
and Humanities" projects  
• Data from ESFRI on 
existing research 
infrastructure landscape 
• JRC studies • Contacts with regional 
research policy makers via 
existing FP7-funded networks and platforms 
• Access to R&D expertise via 
NCP network 
• Research Potential projects 
• Conferences and expert 
workshops • Regions of Knowledge  
• ERA-Nets 
  
ENTR • Regional Innovation 
Monitor (hub for data on 
regional innovation policies ; 
web-portal functions …) 
• European Cluster 
Observatory  
• Sectoral Innovation Watch • Contacts with regional 
innovation policy makers via 
existing CIP-funded 
innovation networks and platforms
139 
• Access to innovation and 
business support providers' • European Cluster 
Cooperation Forum 
• European Cluster Alliance 
 
                                                 
138 www.clusterobservatory.eu   
139 www.proinno-europe.eu/policy-cooperation ;  
http://ec.europa.eu/enterprise/policies/innova tion/policy/public-procurement/index_en.htm#h2-
networks   
140 www.europe-innova.eu  ; www.enterprise-europe-network.ec.europa.eu   
EN 49   EN • Regional Innovation 
Scoreboard + EIS 
• Innovation Policy 
TrendChart 
• studies (available budget in 
2011: some 200.000)  expertise via the EEN and 
other CIP-funded networks140 
• Conferences and expert 
workshops (available budget 
in 2011: some 200.000) 
• … 
EAC • Study on culture's 
contribution to regional and local development, including 
a pedagogical tool 
• Study on the European 
Capitals of Culture (ECoCs) 
and annual evaluations of the ECoCs 
• Study on the economy of 
culture 
   Study on the 
entrepreneurial dimension of 
the Cultural and Creative industries 
 • Conferences and expert 
workshops • Potentially
141, a working 
group of Member State experts working on how best to 
promote an integrated 
approach to culture in regional 
and local development. 
 Policy analysis groupings 
evaluating the impact of 
cultural policies at national, regional or local levels
142 
. 
5. MAPPING REGIONAL INNOVATION  
A synthetic indicator of regional innovation potential which takes account of several key 
aspects of the innovation process is develo ped here, including such aspects as R&D 
expenditure, patents, academic publications and the share of human resources in science and 
technology to capture the i nnovative capacity of a regio n. The absorption capacity is 
measured by the education level of the population, lifelong learning and the share of 
employment in knowledge intensive services. The capacity of the region to participate in the 
diffusion of innovation is based on motorway a nd railway density, acce ss to flights, the 
distance of the population to unive rsities, the share of high tech  employment and the share of 
households with broadband access.  
The map shows six types of region, ranging from  strong generators of knowledge to weak 
absorbers and diffusers.  
The first type 'strong generators ' is mostly made up of the hi ghly developed regions of the 
North-Western EU Member States. These regions  are close to the wo rld technology frontier 
and their growth process generally hinges on innovation and R&D as well as on the accumulation of human capital with a view to move the technology frontier outwards. 
The 'intermediate performers' broadly correspond to the moderately developed regions of the 
EU. These regions are catching up on the first group through a process of technology 
absorption. However, such a process requires high levels of human capital and the main 
                                                
 
141 Depending on formal adoption of the Work Plan for Culture from 2011 onwards, due in November 
2010. 
142 http://ec.europa.eu/culture/our-programmes-and-actions/doc2011_en.htm   
EN 50   EN challenge for these regions is to reduce the gap with the first group in terms of the education 
level of the workforce.143  
The two groups 'weak absorbers' and 'weak diff users' are mostly in Central and Eastern 
Europe. Absorption is mainly reflected in the education level of the workforce, the extent of life long learning and the share of employment in knowledge-i ntensive services. For these 
regions where the level of education is often relatively high, the main limiting factor is not 
human capital but rather the low endowment of infrastructure and the quality of the business 
environment, though factors like the quality of the education system or the links of the 
universities with businesses also need  to be tackled through policy action. 
Diffusion largely depends on factor mobility, access to broadband, employment in high-tech 
activities, international trade and foreign inve stment. When these are at a developed enough 
level, the strengthening of hu man capital usually needs to be  included in the priorities. 
The regions in the worst situation are those which are both 'weak absorbers’ and ‘weak 
diffusers'. This group includes Central and Easter n European regions but also some regions in 
the southern European countries. 
                                                
 
143 DG Regio Study 2010: R. Wintjes, H. Hollanders, "The regional impact of technological change in 
2020".  
EN 51   EN Map 4 Regional Innovation pote ntial – synthetic indicator 
 
Different potentials requi re different policy-mixes 
Such diversity implies that there is scope for a regional approach to innovation. Indeed, the 
innovation process has a strong local dimensi on. Knowledge includes an important tacit 
component that cannot be easily codified and therefore requires  direct interaction between 
actors in the innovation process.  
The geography of innovation has also changed in th e last few years, with a less well defined 
and more complex division of labour across cities , regions and countries. Lack of risk capital 
and the limited production, transfer and use of knowledge constitute key barriers to 
EN 52   EN innovation along with limited cro ss-sectoral collaboration, lack of entrepreneurship and the 
long-term negative effects of the financial crisis on R&D funding.144  
Regional diversity in development pathways an d models of innovation calls for differentiated 
policies adapted to specific re gional circumstances. Differentia ted policies can address the 
wide range of determinants of innovation pe rformance across the EU. Integrated policy 
approaches can target both innovation potential and broader social and economic framework 
conditions, particularly in lagging areas. Addres sing the weaker innovation systems is vital to 
enhancing overall economic performance. 
In order to achieve the Europe 2020 Strategy objectiv es of developing knowledge-based 
economies, there is a need to assess their potentia l for innovation in order to identify the best 
policy mix to overcome the challenges they face.  
The ex-post evaluations of  the 2000-2006 ERDF programmes recommended that in 
Convergence regions, the ERDF should focus fi rst and foremost on technology transfer and 
building capacity rather than into leading ed ge research. For example, building research 
centres in regions where the SMEs have limited absorption capacity is likely to be less effective than setting up innovation services fo r companies or more generally improving the 
business environment.  
                                                
 
144 Wintjes Hollanders, 2010 
EN 53   EN 6. QUANTIFYING COHESION POLICY SUPPORT TO INNOVATION  
The Community strategic guideli nes on cohesion policy (2007-2013) , adopted by the Council, 
stress that to promote sustainable developmen t and strengthen competitiveness it is essential 
to concentrate resources on research a nd innovation (RTDI), en trepreneurship, the 
information society and the training of workers. 
In 2007, the Commission published a Staff Wo rking Document 'Regions delivering 
innovation through Cohesion Policy'145 which produced an estimate, based on this approach, 
of the planned investment implemented through the Operational Programmes and communicated to the Commission by the Member States on the base of a list of categories included in the Implementing Regul ation for the Structural Funds.
146 
In 2010, the 'Strategic report 2010 on the impl ementation of the 2007-2013' programmes has 
made an overall assessment of the rate of adva ncement of these initial plans. This assessment 
shows that, while there has been  investment, there are still la rge amounts of funding available 
to be used. 
. 
6.1. Innovation  
ERDF and ESF support for inn ovation (total) by Objective 
Objective Planned EU 
Investment 
million € Allocated to 
Selected projects 
million € Allocation Rate % 
Convergence 61.289 16.291 26,6% 
Regional Competitiveness 
and Employment 21.887 5.446 24,9% 
European Territorial 
Cooperation 2.075 481 23,2% 
TOTAL 85.252 22.217 26,1% 
. 
                                                 
145 .SEC(2007) 1547.  
http://ec.europa.eu/regional_policy/sources/docoffic/official/communic/comm_en.htm  
146 Implementing regulation for the Structural and Cohesion Funds 2007-2013 (EC) No 1828/2006. 
http://ec.europa.eu/regional_policy/sources/doc offic/official/regulation/newregl0713_en.htm  
EN 54   EN ERDF and ESF support to innovation by category and groups (all objectives) 
Code Category Planned EU 
investment 
million € Allocated to 
selected projects 
million € Rate of 
Allocation 
% 
Research Technological Development Innovation 
1 R&TD activities in research 
centres  5.809 1.973 34,0% 
2 R&TD infrastructure and centres 
of competence in a specific 
technology 9.845 3.157 32,1% 
3 Technology transfer and 
improvement of cooperation 
networks ... 5.321 1.011 19,0% 
4 Assistance to R&TD, particularly 
in SMEs (including access to 
R&TD services in research 
centres) 5.853 1.248 21,3% 
6 Assistance to SMEs for the 
promotion of environmentally-
friendly products and production 
processes (...) 2.479 485 19,6% 
7 Investment in firms directly 
linked to research and 
innovation (...) 8.927 2.929 32,8% 
9 Other measures to stimulate 
research and innovation and 
entrepreneurship in SMEs 6.820 2.536 37,2% 
74 Developing human potential in 
the field of research and 
innovation, in particular through 
post-graduate studies ... 4.934 843 17,1% 
Entrepreneurship 
5 Advanced support services for 
firms and groups of firms 5.158 1.728 33,5% 
68 Support for self-employment 
and business start-up 3.212 491 15,3% 
Innovation ICT 
11 Information and communication 
technologies (...) 3.476 1.151 33,1% 
12 Information and communication 
technologies (TEN-ICT) 517 179 34,5% 
13 Services and applications for 
citizens (e-health, e-
government, e-learning, e-
inclusion, etc.) 5.216 1.008 19,3% 
14 Services and applications for 
SMEs (e-commerce, education 
and training, networking, etc.) 2.050 166 8,1% 
15 Other measures for improving 
access to and efficient use of 
ICT by SMEs  1.477 352 23,8% 
EN 55   EN  
Human Capital 
62 Development of life-long 
learning systems and strategies 
in firms; training and services 
for employees ... 9.645 2.254 23,4% 
63 Design and dissemination of 
innovative and more productive 
ways of organising work 1.751 158 9,0% 
64 Development of special services 
for employment, training and 
support in connection with 
restructuring of sectors ...  2.758 547 19,8% 
  TOTAL  85.252 22.217 26,1% 
The relative shares allocated differ between Me mber States depending on  the total amount of 
funds available, national needs and pr iorities set by each Member State. 
6.2. SMEs and other businesses 
The support to SMEs and other businesses can also  be estimated in a similar form. Categories 
included here are a subset of those indicat ed above with one important exception. The 
category 08 'Other investment in firms', wh ich accounts for a significa nt amount of funding 
has been excluded from the innovation group because it can be argued that it is not directly 
targeted at innovation. 
ERDF (mainly) support directly ta rgeted to SMEs by category 
SME Category Planned EU 
investment 
million € Allocated to 
selected 
projects 
million € Rate of 
Allocation 
% 
3 Technology transfer and improvement of 
cooperation networks ... 5.321 1.011 19,0% 
4 Assistance to R&TD, particularly in SMEs 
(including access to R&TD services in research 
centres) 5.853 1.248 21,3% 
6 Assistance to SMEs for the promotion of 
environmentally-friendly products and 
production processes (...) 2.479 485 19,6% 
9 Other measures to stimulate research and 
innovation and entrepreneurship in SMEs  6.820 2.536 37,2% 
14 Services and applications for SMEs (e-
commerce, education and training, networking, 
etc.) 2.050 166 8,1% 
15 Other measures for improving access to and 
efficient use of ICT by SMEs  1.477 352 23,8% 
68 Support for self-employment and business start-
up 3.212 491 15,3% 
  TOTAL 27.213 6.289 23,10% 
. 
EN 56   EN ERDF (mainly) support to businesses not related to size, of which a proportion also 
benefits SMEs by category 
Code Category Planned EU 
investment 
million € Allocated to 
selected 
projects 
million € Rate of 
Allocation 
% 
5 Advanced support services for firms and 
groups of firms 5.158 1.728 33,5% 
7 Investment in firms directly linked to 
research and innovation (...) 8.927 2.929 32,8% 
8 * Other investment in firms  14.096 5.671 40,2% 
  TOTAL 28.181 10.328 36,50% 
* Not included in innovation  
. 
ESF support related to businesses by category 
Code 
Category Planned EU 
investment 
million € Allocated to 
selected 
projects 
million € Rate of 
Allocation 
% 
62 Development of life-long learning systems and 
strategies in firms; training and services for employees ... 9.645 2.254 23,4% 
63 Design and dissemination of innovative and 
more productive ways of organising work 1.751 158 9,0% 
64 Development of special services for 
employment, training and support in 
connection with restructuring of sectors ...  2.758 547 19,8% 
  TOTAL 14.155 2.960 20,90% 
. 
EN 57   EN 6.3. ICT 
It is also possible to estimate the total amount of support to IC T, the first category of which 
(10: 'Telephone infrastructure (including broa dband networks)' was also excluded from the 
innovation total along with other types of infrastructure. 
ERDF (mainly) support for ICT by category 
Code Category Planned EU 
investment 
million € Allocated to 
selected 
projects 
million € Rate of 
Allocation 
% 
10 * Telephone infrastructures (including broadband 
networks) 2.306 418 18,1% 
11 Information and communi cation technologies 
(...) 3.476 1.151 33,1% 
12 Information and communi cation technologies 
(TEN-ICT) 517 179 34,5% 
13 Services and applications for citizens (e-health, 
e-government, e-learning, e-inclusion, etc.) 5.216 1.008 19,3% 
14 Services and applications for SMEs (e-
commerce, education and training, networking, 
etc.) 2.050 166 8,1% 
15 Other measures for improving access to and 
efficient use of ICT by SMEs  1.477 352 23,8% 
  TOTAL  15.042 3.274 21,8% 
. 
* Not included in innovation