Implementation challenge of smart specialisation innovation strategies in catch-up regions: the role of institutions, governance and capacity building

Abstract

This thesis examines public policy implementation in catch-up regions through the analytical lens of Smart Specialisation Strategies (S3). Smart specialisation is a regional innovation strategy, introduced in 2010 as the main European cohesion policy to promote economic convergence. Empirical research shows that catch-up regions encounter major difficulties in putting S3 theory into practice. The need to understand why S3 development cannot be taken for granted, brings into focus the implementation challenge of smart specialisation, which is currently associated with weaknesses in building responsive governance models, thick institutions and strong research capabilities for innovation-driven growth. This study investigates S3 challenges in two European catch-up regions: Crete and Central Macedonia. It builds upon a conceptual framework that brings together elements from regional innovation studies with institutional and capacity building theories, aiming to investigate public policy implementation barriers in two Greek regions which have been in fiscal crisis for over a decade. It suggests that S3 barriers derive from a much wider knowledge gap in regional studies, already existing before the introduction of smart specialisation as a development strategy. This gap rests on the lack of empirical understanding of what governance and institutional change is required in lagging regions to tackle the regional innovation paradox: how change impacts on economic growth, when change must be initiated to be feasible and realistic, and what capabilities are needed to support change for regional renewal and development. To operate the conceptual framework, a qualitative case study approach has been designed, using evidence from academic, public and private local actors with a key role in developing S3. Primary data were collected by means of fifty semstructured interviews; participant observation was also used as a complementary method. Secondary data were gathered from a detailed documentary analysis of official textual sources. The thesis demonstrates the implementation challenge of smart specialisation, extending previous studies which examine S3 development in lagging regions. In contrast to much literature, it shows that S3 barriers are not simply due to weakness of catch-up regions to build research capacities, but also to non-smart specialisation-related barriers, yet highly influential on policy implementation. Such barriers include critical mass accumulation problems, public-sector administrative burden and lack of public-private trust. They are institutional and capacity building-related, and they should not been seen, in conceptual terms, as a precondition to effective S3 implementation. Rather, they are the result of a concurrent existence of weak policy governance models, limited institutional autonomy for regional self-governance and lack of transformative capacities for structural shifts. Two contributions to knowledge are made. Firstly, the research contributes to bottom-up theoretical understanding of regional policy development by showing that S3 debate should no longer be just about improving research capacities, but about how to best understand and address opportunities and challenges emerging from bringing together institutional integration, policy governance advances and capacity building improvements. Particularly, it evidences that S3 challenge needs to be examined and understood through a concurrent analysis of the ways in which governance, institutions and capabilities embedded in the wider environment of a region are related and evolved. Secondly, it contributes to the further advancement of regional studies, by providing a practical understanding of how to best develop S3 in practice. A three-stage policy implementation model is developed to support innovation strategists to search for an S3 implementation mix that best corresponds to their own needs.