Governance of the RIS3 Entrepreneurial Discovery Process: What is in the Spotlight?

Mari José Aranguren, Edurne Magro, Mikel Navarro and James WilsonOrkestra and Deusto Business School

This project has received funding from the European Union’s Seventh Framework Programme for research, technological development and

demonstration under grant agreement number 320131.

Territorial Strategy as Discovery

• Territorial strategy undergoing a popularity boom– In Europe debate being shaped around RIS3– European Commission Guide (2012) & growing academic literature (Foray, 2013,

2015; Kroll, 2015; McCann & Ortega-Argilés, 2013; Morgan, 2013; Navarro et al, 2013; Thissen et al, 2013; Valdaliso & Wilson, 2015)

• The defining characteristic of a smart specialisation strategy is that priorities should emerge from an ‘entrepreneurial discovery process’ (EDP)– Territorial strategy, not government strategy: participation of ‘quadruple helix’

• The design phase of RIS3 has been characterized by ‘entrepreneurial discovery’ to a greater or lesser extent in different regions– This paper analyses the governance of the RIS3 design process in 8 regions– It aims to draw implications for the ongoing implementation of RIS3

Why Governance?

• EDP requires shift from fixed plans to open processes– Territorial strategy is ‘alive’

• EDP is sensitive– Ultimately about making choices about thematic priorities, which are difficult

• EDP is complex– Multiple levels of territory, multiple layers & domains of decision-making

RIS3 Governance: Dialogue, involvement, engagement & coordination processes through which RIS3 decision-making takes place

Governance refers to all processes of governing, whether undertaken by a government, market, or network, whether over a family, tribe, formal or informal organization, or territory, and whether through laws, norms, power, or language (Bevir, 2012)

Governance processes and RIS3 dynamics

• Governance literature recognises the role of different elements affecting governance modes:– Importance of the context: socio-economic and structural factors (Edler et al., 2003;

Davoudi et al., 2008)– Importance of governing (public-private) networks (Peters, 1998; Rhodes, 2007) – Power relationships between actors; hierarchical and non-hierarchical modes of

coordination (Risse, 2012); from co- ordination to collaboration (OECD, 2012)– Path dependency (Peters & Pierre, 1998) and change mechanisms, affecting both

the regional structural dimensions and actors dynamics

RIS3 strategies have introduced a greater emphasis on governance relationships amongst different actors (from a quadruple helix perspective), and it is these relationships that could really influence the EDP and could make a difference to an effective RIS3 design and implementation

Research Approach

• Smart specialisation is a concept where practical implementation is running ahead of theoretical understanding

– FP7 smartspec project designed to integrate theoretical developments with ongoing observation and analysis of RIS practice in case regions

• This research is built from a meta-analysis of 8 of the regional cases that have been studied as part of the FP7 Smartspec project

– Common set of research questions covering all aspects of RIS3 design process– Fieldwork conducted between 2014 and the start of 2015– Interviews with key regional stakeholders & desk analysis of key regional documents

• Analysis of data guided by a proposed RIS3 governance framework

RIS3 Governance Framework

Path dependency & change mechanisms

Quadruple helix structures and power

RIS3 decision-making dynamics

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General regional features (including economic specialisation & clusters)

General Regional context & structure

Institutional structures &

dynamics

RIS3 Governance

Case Regions

Bremen Navarra PACA Scania Basilicata Eszak Alfold North East Slovenia

Country Germany Spain France Sweden Italy Hungary Romania SloveniaNUTS level of RIS3 NUTS1 NUTS2 NUTS2 NUTS3 NUTS2 NUTS2 NUTS2 NUTS 1

Population (thousands) 664 639 4937 1.411 576 1492 3294 2059

GDP pc (2013, EU28 = 100) 159 116 102 107 69 42 34 82

R&D Spending 2.69 1.79 2.00 3.89 0.57 1.28 0.3 2.59

Regional Innovation Scoreboard

Follower Follower Follower Leader Moderate Modest Modest Follower/Moderate

Regional Innovation System Type

Thick (spec)

Thick (spec)

Thick (div)

Thick (div)

Thin Thin Thin Thin

Quadruple helix structures and powerBremen Navarra PACA Scania Basilicata Eszak Alfold North East SloveniaHigh regional autonomy in innovation policy; dominant role for regional government & development agencies;strong research & business actors (MNCs), but largely unconnected to regional strategy

Medium regional autonomy in innovation policy; strong and leading regional government; strong universities & research institutions; high presence of MNCs; strong employers and trade unions associations

Medium regional autonomy in innovation policy; very strong HE and research institutions, linked to policy but disconnected from firms; high presence of small firms & large firm subsidiaries; Numerous support institutions; efforts to improve public-private networking

Low regional autonomy in innovation policy; strong role of regional government (co-ordinator); strong role of HE and research institutions; Strong role of business related organisations (intermediaries)

Medium regional autonomy in innovation policy; Strong role of regional government; weak university; strong presence of research centres, but isolated; high presence of MNCs and weak presence of SMEs

Low regional autonomy in innovation policy; Weak role for regional government; leading role for proactive universities; limited role for business (MNCs unconnected to regional strategy)

Low regional autonomy in innovation policy; teaching-focused HE institutions with weak research; strong public research institutions without connection with regional actors; presence of MNC branch plants; low SME absorptive capacity

Low regional autonomy in innovation policy; weak regional councils, dependent on municipalities; strong HE and research institutions, not connected to firms; high FDI and weak domestic firms; presence of some NGOs; Some interpersonal networks based on proximity

Disconnected quadruple helix structures & strong (regional or national) government power

Path dependency & change mechanisms

Bremen Navarra PACA Scania Basilicata Eszak Alfold North East SloveniaRIS3 based on previous cluster approach; risk aversion among policy-makers; incremental change around path extension

Planning culture; RIS3 strategy of some form since 2010, with vertical priorities & quadruple helix involvement; government leadership & economic / political context provide key change mechanisms

Strong role for existing clusters (competitiveness poles) in prioritisation process; user-driven innovation & concentration on knowledge domains with strong market potential are key change mechanisms

Strong basis and history of innovation policy; shift from cluster policy to platforms, and from research based policy to systemic innovation policies; change through recombination

Strong path dependence driven by EU influence; reliance on creating new institutions (layering) as change mechanism

Fast changing and flexible approach to policy since joining EU; EU directives and national policy leadership provide main change mechanisms

Path dependence determined by national level and vision of key national ministries; RIS 3 process could be seen as a change mechanism at regional level

High turnover of policies, fragmentation and lack of learning; EU directives and political context provide main change mechanisms

Stronger path dependency in more developed regions (with context-specific change mechanisms), & external (top-down) forces are key sources of change in less developed regions

RIS3 decision-making dynamics

Bremen Navarra PACA Scania Basilicata Eszak Alfold North East SloveniaGovernment led; strong role of RDAs at sub-regional level; limited research & SME involvement; some involvement of MNCs located in region

Active PPP to develop RIS3; initially government led, with other stakeholders as followers; political instability led to politicisation & stalling of process

Widespread participation; steering committee includes regional actors & is based on a permanent regional conference on innovation; initial frustration of HE & research actors with strong market orientation

Strong involvement of regional triple helix; leadership is systemic & collective in nature, lead by regional government; national government and large municipalities involved in decision-making

Regional government as managing authority; business not involved; No formal & established participation; only informal mechanisms.

Widespread participation of quadruple helix at sub-regional level; strong university plays key role; final decision-making dependent on national level implementation

RIS3 design at national level; didn’t involve RDAs, counties or firms; inputs dominated by HE & research institutions

RIS3 designed at national level with limited participation, & strong role of HE and research institutions; mayors, firms & NGOs involved in regional councils

Remain almost exclusively government led (regional or national), with a key role for research in some cases, but very little explicit business involvement

General Conclusions

• In all cases we can observe that two elements of the quadruple helix dominate, which tends towards a government-scientific biased ‘entrepreneurial discovery process’

• Limits between different quadruple helix actors still very much exist: slow adoption of ‘new governance’

• A variety of coordination mechanisms exist in various stages of development, and they tend to be more formal where there is a stronger top-down element to RIS3 design

• The design phase of RIS3 has demonstrated some signs of promoting mechanisms for change and altering policy path dependencies

• It is often people rather than organisations that are involved in RIS3 governance processes, which creates issues for continuity and highlights the often overlooked ‘human element’ in innovation strategy/policy

Multilevel governance: Specific conclusions and implications

• Multi-level governance appears to be a key element in the design phase of RIS3 strategies

• This is embedded in the institutional structures and dynamics and has been playing a determining role in shaping RIS decision-making dynamics

• Three typologies emerge:1. Single level: One clear level has dominated the design phase2. Top-down multilevel: The design phased has been multi-level, shaped from the national level 3. Networked multilevel: The design phase been multi-level, with balanced engagement

• We hypothesise that these typologies that have strongly marked governance relationships in the design phase, will be even more important in the implementation phase

– Signs that RIS3 is forcing multi-level governance issues to be taken seriously– But very much the start of a process, as funding sources from different levels will shape

possibilities for implementation

Thank You / Merci

Mari José Aranguren, Edurne Magro, Mikel Navarro and James WilsonOrkestra and Deusto Business School

This project has received funding from the European Union’s Seventh Framework Programme for research, technological development and

demonstration under grant agreement number 320131.