Creating Growth by Connecting Smart Place-Based Development Strategies with Transnational Networks

Age Mariussen
Aalto University

Fatime Barbara Hegyi
Joint Research Centre

In the past years, the European Commission launched three thematic Smart Specialisation platforms to support interregional collaborations and activities in strategic areas linked to agri-food, energy and industrial modernisation. The three thematic platforms aim to support European Union regions committed to co-invest jointly in strategic growth areas. The bottom up component in this process has resulted in a wide variety of industry-scientific partnerships at regional and transnational levels. These networks include regions which are very different in terms of innovation ecosystems, but nevertheless connected through a shared thematic focus enabling transnational processes of innovation. With reference to existing literature and experiences so far, the paper outlines a conceptual framework for how transnational cooperation may strengthen regional place-based development strategies and improve regional innovation capabilities. Key analytical concepts are proximity, knowledge complexity, entrepreneurial discovery processes, stakeholder analysis and cluster emergence.

Introduction and aim:
This paper aims to explore why an increasing number of European regions in close cooperation with quadruple helix partners, such as clusters, firms, universities, NGOs and member states combine smart place-based innovation strategies with transnational thematic networks of innovation. The bottom up component in this process has resulted in a wide variety of thematic Smart Specialisation partnerships, driven by a broad range of actors and supported by various stakeholders. These emerging networks include regions, which are very different in terms of innovation ecosystems, but nevertheless connected through a shared Smart Specialisation (S3) priority area, in which they wish to realise joint investment projects. This collaboration has resulted in a rich variety of organizational solutions and approaches, which allow actors and stakeholders to see different barriers and concerns of innovation (Mariussen, Hegyi and Rakhmatullin, 2019).
Based on the ongoing experiences as well as existing literature, the paper suggests a conceptual approach, which demonstrates how this thematic S3 methodology of linking interregional innovation eco-systems is expected to enable new entrepreneurial discovery processes, as well as long term impacts driving institutional change and improving regional innovation capabilities.

Research methodology:
By combining spatial / geographic proximity inside regions with complimentary forms of trans-national proximity, such as cognitive, temporal, and organizational proximity, S3 strategy enables transnational synergies across different regions with related knowledge domains (Xiao et al, 2018, Byrne and Callaghan, 2014). These synergies may create knowledge complexity, new knowledge combinations, which open up for new innovation strategies. The paper suggests how these synergies may provide a new locus of innovation (Tanner, 2018), where different forms of proximity are combined in different phases of the entrepreneurial discovery process (along the workflow methodology of the thematic S3 approach). Finally, the paper suggests how this process might create new, emerging European clusters (Virkkala et al, 2018).

Results and implications:
The combination of science-based knowledge and industrial/scientific knowledge depends on the degree of spatial proximity, that indicates a place-based dynamic within a region combined with 'global pipelines' providing knowledge from abroad (Bathelt et al, 2004, Xu et al, 2017). The absorption and application of science-based knowledge are rarely straightforward.
An important precondition for successful processes of exploration is the formation of complex knowledge spaces. A knowledge space is defined by a context, where knowledge is shared. This context may be an innovation platform that defines concepts of a technological paradigm, or a combination of scientific disciplines, or skills in understanding the dynamics of markets. Knowledge spaces may be separated, like in epistemic communities and communities of expertise protecting their skills from others, or they may be overlapping, as cross sector and cross disciplinary forms of knowledge (Virkkala, 2017).
Thus, though the alignment of innovation agendas across regions and borders, regions can combine complementary strengths in research and innovation, exploit research and innovation competencies and may acquire necessary research capacities or overcome lack of critical mass and fragmentation. Furthermore, through the linked regional ecosystems, challenges may be responded through learning via the institutionalised network of knowledge and expertise, aka via the thematic S3 platforms.

The paper suggests how these synergies may provide new entrepreneurial discovery processes, where different forms of proximity (geographic, temporal, organizational and cognitive) are combined in different phases of the entrepreneurial discovery process (scoping, mapping, matching), and how each phase includes mobilisation of stakeholders. The process leads to a strengthened and more dynamic knowledge base of the regional innovation eco-system leading to new competitive advantages within regions. Also, the participation in such interregional initiatives can improve the positioning of regional actors in global value chains.