Smart specialisation strategies and cross-border integration of regional innovation systems: Policy dynamics and challenges for the Upper Rhine

Abstract

The aim of this paper is to provide insights into the implications of the European Commission’s smart specialisation agenda in a specific, cross-border context. The paper critically reflects on some of the RIS3 (research and innovation strategies for smart specialisation) agenda’s premises by illustrating its practical implementation in the Upper Rhine area (i.e. Alsace in France and Baden-Württemberg in Germany). The first section revisits not only the smart specialisation concept in itself but also discusses it vis-à-vis the thematic of cross-border regional innovation systems and outlines some implications that it may have for the choice of innovation policy instruments. The second section introduces the specific framework of the Upper Rhine area and outlines possible options for the co-ordination of innovation policies on the basis of a yet to be developed, theoretically possible joint RIS3 strategy. The last section brings together these conceptual and applied perspectives on smart specialisation and outlines suggestions for progressive cross-border integration via regional innovation policies.

Keywords

Innovation policy regional development smart specialisation S3

Introduction

The aim of this paper is to provide new insights into the meaning and implications of the concept of ‘smart specialisation’ (S3) by illustrating a specific case of two border regions engaged in a progressive integration process of their innovation systems. The issues addressed concern the conceptual meaning of smart specialisation processes as well as their implications for innovation policy governance.

Recently, the originally quite academic – and not specifically regional – smart specialisation concept has gained tremendous importance for regional innovation policy and has ‘enjoyed a short but very exciting life’ (Foray et al., 2011: 3) from a taboo concept to becoming a policy hit. As, according to those who developed it: ‘Smart specialisation is not just for the “best” regions and technology leaders [but] for any region’. (Foray et al., 2011: 5), its political appeal was substantial and prompted a swift takeover by the European Commission.

In practice, however, things have proven less simple. When the development of smart specialisation strategies was made compulsory by the European Commission, different expressions of at least initial reluctance could be observed in several regions (Kroll, 2015). Notwithstanding, the final interpretation of RIS3 (research and innovation strategies for smart specialisation) by Europe’s diverse regions can be seen as a perfect illustration of how policy dynamics and different institutional frameworks at regional level can transform and adopt such straightforward (in theory) approaches (Iacobucci, 2014; Kroll, 2015).

The first section depicts not only the S3 concept itself but also the implications for the choice of innovation policy instruments and introduces the model of regional innovation systems integration between border regions coined by Lundquist and Trippl (2013). These prerequisites allow for the introduction of the case of the Upper Rhine in the second section. Accordingly, this section will conceptualise opportunities for the co-ordination of innovation policies in Alsace and Baden-Württemberg that a potential, future RIS3 concept could imply. The empirical elements encompass: (i) an original online survey (on a European scale) of regions engaged in the S3 process which helps to better characterise the respective positions of Alsace and Baden-Württemberg; (ii) an analysis of the most important policy documents (the so-called ‘grey literature’) on those two regions as well as; (iii) a set of interviews with the main persons in charge of S3 in the two regions. The final section discusses the results of the empirical investigations in the light of the model of progressive cross-border integration of regional innovation systems and attempts to address specific consequences of S3 for cross-border regional innovation policies, in particular with regard to the necessary diversity of areas of investments and excellence but also in terms of challenges related to multi-level governance. The conclusions address possible future policy developments and research.

Conceptual backgrounds

S3 and choice of innovation policy instruments

Generally, policy instruments can be defined as the ‘set of techniques by which governmental authorities wield their power in attempting to ensure support and effect or prevent social change’ (Vedung, 1997: 21). Furthermore, they can also be described as the ‘means’ through which the ‘ends’ of political life are achieved (Doern and Phidd, 1983: 111). Ever since the economic crisis hit the European Union, both innovation and cohesion policies at the European level have been undergoing substantial changes with respect to this ‘means’ dimension. ‘Smart specialisation’ was the new and upcoming paradigm in this regard, which has attempted to change the main premises that have dominated European regional policy during the past decades:

We are suggesting an entrepreneurial process of discovery that can reveal what a country or region does best in terms of science and technology. That is, we are suggesting a learning process to discover the research and innovation domains in which a region can hope to excel. In this learning process, entrepreneurial actors are likely to play leading roles in discovering promising areas of future specialisation, not least because the needed adaptations to local skills, materials, environmental conditions, and market access conditions are unlikely to be able to draw on codified, publicly shared knowledge, and instead will entail gathering localized information and the formation of social capital assets. (Foray et al., 2009: 2)

This statement illustrates quite well the most important challenge that smart specialisation implies for policy makers. The core idea of smart specialisation – the entrepreneurial process of discovery – urges the entrepreneurial forces of a region to take action and defines the role of policy as that of a moderator. Additionally, the concept underlines that regions cannot do everything in terms of science, technology and innovation action and related policies so they do need to focus on specific (carefully chosen) domains. In other words, regions should not try to imitate each other but develop distinctive areas of specialisation and then strategically concentrate their policy efforts on those ‘smart specialisation domains’.

Since it became an ex-ante conditionality for structural funds (European Union, 2013), the concept has very quickly turned into a dominant paradigm of EU cohesion policy. In the context of the debate on the reconfiguration of European regional policy that has been ongoing for some years, the dependence of funding on the drafting of smart specialisation strategies can be seen as an attempt to integrate goals and approaches of cohesion and innovation policy. Such efforts, however, have repeatedly been contested by several critics (BMBF, 2010; Council of the European Union, 2010; EFI, 2011: 52).

Generally, applying the credo of S3 holds quite some challenges for policy makers since ‘The complexity of the process [of S3] resides both in discovering the right domains of future specialisation and fixing the many coordination failures that can prevent emerging trends from becoming real and solid drivers for regional economic growth’ (Foray et al., 2011: 4).

From the point of view of policy instruments, the two consecutive core ideas of S3 – the notion of ‘entrepreneurial discovery’ and ‘discovering the right domains for future specialisation’ – bring up a number of propositions with regard to the instruments that will be chosen and implemented. Most importantly though ‘the main issue to be addressed by policy is not “what to do” but “how to help agents to discover what to do and how to implement the policy according to what has been discovered”’ (Foray et al., 2011: 10). In a nutshell, two main fields can consequently be identified for policy action: the application of a portfolio of strategic intelligence measures and learning processes that are associated with the identification ‘of the right domains’ are of significance followed by more traditional support measures for the associated ‘entrepreneurial discoveries’ and respectively by the distribution of financial and regulative aid in support of these discoveries. By citing among others Bijker et al. (1989) Flanagan et al. (2011: 706) point out that it is important though, to consider that

in the real world ‘policy instruments’ are intangible and, as a piece of social technology have a high degree of what science and technology studies scholars call interpretive flexibility, carrying quite different meanings from time to time, place to place and actor to actor […] The context and implementation of an instrument can be fluid over time as instruments are interpreted and reinterpreted in the light of changing rationales. Implementation is another factor here, and decisions taken during implementation may be critical in determining the impacts of policy action, potentially leading to major variations in ‘the same’ instrument across time and space quite independently of differences in strategies, policy rationales or meta-rationales. (see e.g. Slembeck, 1997)

Apart from the above mentioned ‘interpretive flexibility’ that policy instruments feature, a further challenge is the question: how to organise a coherent arrangement of different policy instruments, since they don’t work in isolation. Most of the times when an instrument is introduced, it ‘joins’ the instruments that have already been implemented. In some cases, there might be no challenge associated with this new instrument at all; in other cases, a very careful fine-tuning of the interaction of instruments is needed. Particularly over the past decade, innovation policy scholars have taken up the debate on this so-called ‘policy mix’ (among others Howlett and Rayner, 2007; Guy et al., 2009; Flanagan et al., 2011; Borrás and Edquist, 2013; Rogge and Reichhardt, 2016). A very first careful analysis on smart specialisation policies showed that ‘it is possible to conclude that the gravity is especially on policies in support of better networking and connectivity among different actors at the sub-national level’ to better facilitate the process of discovery (Walendowski, 2011: 16).

The following taxonomy of instruments that are in use in innovation policy points out the most relevant policy tools for implementing the concept of S3 according to the core ideas (Figure 1). The highlighted boxes show that mainly distributive elements as well as support measures for better cooperation as pointed out by Walendowski and policy expertise are needed for the formulation and implementation of the concept.

Particularly, the latter two categories presented in Figure 1 belong to the group of the so-called ‘systemic instruments’ which ‘according to Smits and Kuhlmann (2004) are tools that focus on the level of the innovation system instead of focusing on specific parts of innovation systems and support processes that play a crucial role in the management of innovation processes’ (Wieczorek and Hekkert, 2012: 74). As can be seen below, the two core ideas of S3 are reflected in the heuristic (Smits and Kuhlmann, 2004: 12) proposal for systemic instruments which – among other aspects – support the following functions:

Providing a platform for learning and experimenting

Create conditions for various forms of learning such as: learning by doing, learning by using and learning by interacting (Lundvall, 1992; Rosenberg, 1982).

Providing an infrastructure for strategic intelligence

Identify sources (technology assessment, foresight, evaluation, benchmarking), build links between sources, improve accessibility for all relevant actors (clearing house) and stimulate the development of the capacity to produce strategic information tailored to the needs of actors involved (Kuhlmann et al., 1999).

Stimulating demand articulation, strategy and vision development

Stimulate and facilitate the search for possible applications, develop instruments that support discourse, vision and strategy development. As Flanagan and Uyarra (2016: 181) point out though: despite the strong claims ‘made about the potential for “systemic” instruments and “strategic policy intelligence” tools such as foresight exercises to improve coordination and build shared and thus more coherent policyvisions […] evidence is scarce”. ‘Furthermore these instruments do contain even more interpretative flexibility than traditional „'substantive' levers of public policy, how can we really know that they are working? Such instruments actually introduce further complexity into the system to be coordinated’ (Flanagan and Uyarra, 2016).

If those systemic instruments for gathering relevant information are to complement or rather inform the more classic support measures for a sound S3 concept, a sense-making, coherent policy mix between those two instrument categories seems absolutely crucial and might be the prerequisite for fostering innovation within S3 concepts. Associated with this challenge of a well-balanced policy mix is the aspect of coordination (Braun, 2008; Metcalfes, 1994) and multi-level governance, respectively. As Magro et al. (2014) point out ‘the process of decentralization in the governance of innovation policies from national to regional and local levels constitutes another trend that has raised the complexity of the policy system, pleading for multi-level governance processes’ (Borrás and Jacobsson, 2004; Taylor, 2007), which challenges the already complex quest for coordination between policy shaping entities even more. This holds true particularly for activities across the border where several policy layers (administrative, political, organisational) of local as well as regional levels might interact with each other (see Co-ordination of innovation policies in the Upper Rhine area as a background for S3 implementation section) (Magro et al., 2014; OECD, 1991).

Furthermore, in connection with the needed ‘fine tuning’ of the inherent dimensions of the instruments, the observations so far also depict another challenge in its own right: the appropriate addressing of different actors within the regional innovation system. Policy makers are always confronted with the question ‘which policy instruments to implement at what time?’ but when it comes to the formulation of S3 concepts finding answers to the questions ‘who should we address with our measures? Should there be more emphasis on enterprises?’ pose a particular challenge. Evidently, the instance of ‘entrepreneurial discovery’ is a process that mainly takes place in entrepreneurial settings like SMEs or large-scale enterprises. But of course also members of higher education institutions or research institutes – mainly with a focus on applied sciences – show entrepreneurial knowledge and spirit. To exemplify upcoming challenges for actors that are different from firms, observations and thoughts by Goddard et al. (2013: 93) on the role of universities point out ‘underlying tensions between regional and academic drivers’:

First, the involvement […] of universities in regional governance and policy making that is required to inform strategic choice. Second, a possible mismatch between the current academic profile of universities in a region – the knowledge domains within which teaching and research is undertaken – and the specific industrial and locational assets of the region which are the focus of smart specialisation. Third, the synergy (or lack of it) between globally defined academic excellence and spatially blind higher education and research policies and geographically bounded regional needs/opportunities. Finally, and underpinning each of the preceding headings are questions about the nature of the university as a ‘loosely coupled' institution which has often been ‘black boxed' in much of the regional development literature and related regional policy and practice. (Goddard et al. 2013)

As already mentioned, it has always been challenging for policy makers to formulate and implement instruments that take into consideration the particular needs of different regional actors and entities. However, when considering S3 concepts, there seems to be another level of complexity and responsibility associated with the right choice of instrument: Since specialising mainly means leaving out other choices respectively focussing on a certain domain, the choice should be well prepared and thought through. This encounter also poses fundamental questions with regard to the right division of labour and legitimacy between the sphere of politics, economics and society at the meta-level that go beyond the scope of S3 concepts and this paper. However, it should be acknowledged that S3 policies might hold upcoming defiance with a view to several aspects: which sphere is the determiner when it comes to choosing the ‘right domains’ within a regional innovation system? Can actiosn of different policy actors and spheres be well coordinated and if so: how? Does the portfolio of instruments by the EU acknowledge the different local settings and requirements of the various European regions? Evidently to some extent the market potential of ‘entrepreneurial discoveries’ is quite unknown and unforeseeable: do public policies therefore really reflect the required degree of risk awareness? As Foray et al. make clear, if applied wisely, S3 concepts might offer room for being adventurous on the one hand, but at the same time create, a kind of safety net through considering strength on the national level on the other hand:

The discovery process is thus an issue in its own right. If accomplished properly through an entrepreneurial process of discovery […], such a process should logically identify […] the domains where new R&D and innovation projects will complement the country's other productive assets to create future domestic capability and interregional comparative advantage. (Foray et al., 2011: 4)

Cross-border regional innovation systems

Recently, a theoretical model has been proposed, by Lundquist and Trippl (2013), to scrutinise the potential integration processes in border regions vis-à-vis regional innovation systems and systemic innovation policy instruments (Figure 2). Basically, what the model proposes is that border regions exhibit certain stages of integration across the border and that in time they can gradually develop from a ‘weakly integrated system’ with almost impermeable borders into a (more utopian-type) common ‘cross-border regional innovation system’ (CBRIS). This development does not proceed as a balanced economy-wide phenomenon but rather certain parts of the regional innovation system might be/become more integrated than others. This holds when, for example either the knowledge generation sub-system (including universities, public research institutes, etc.) or the knowledge application and exploitation sub-system (i.e. the private business sector) would be cooperating intensively across the border: the CBRIS of a border region in question could be described as semi-integrated, since cross-border cooperation has not penetrated itself across all the different parts of the economy (Lundquist and Trippl, 2013; Trippl, 2010; van den Broek and Smulders, 2014).

Here also lies the potential for RIS3 in border regions: by linking knowledge producers from the one side of the border with the ones applying this knowledge on the other side, the potential for innovation can be jointly enhanced. Still, the knowledge application system on the other side of the border has to be able to exploit the knowledge produced on the other. Therefore, the concept of proximity plays an important role in the integration process between border regions: border regions benefit from similarities when it comes to the ease of cooperation and integration. These similarities can be observed through the lenses of a shared culture including, for example language and values (cultural proximity), knowledge bases (cognitive), rules, laws and regulations (institutional), trust-based relationships (social) as well as through shared technological expertise (technological) (e.g. Boschma, 2005). In short, since national borders still demark barriers for most proximity types, for border regions, simply being proximate in geographical terms does not automatically lead to high cooperation and similarity in the other more intangible dimensions of proximity (Koschatzky, 2000; Makkonen, 2015). Again, being too similar might also be detrimental for the innovative success of border regions: if the border regions are highly similar, for example they are involved in precisely the same industries and in the same research fields, there is not much that can be learned from the other side. Therefore, a system displaying, what in the literature (e.g. Frenken et al., 2007; Jauhiainen, 2014) is termed as ‘related variety’, would potentially constitute a much more viable CBRIS in terms of potential innovative outcomes: for successful radical innovations, it would be beneficial that the regions on the opposing sides of the border are similar enough so that they can cooperate but different enough for novel combinations of existing knowledge to emerge, offering in turn, opportunities for joint smart specialisation and entrepreneurial discovery. The role of regional innovation policies in this setting is to support exploiting this potential via for example intermediaries and bridging organisations, through transferring experiences of role models and successful collaborations and by promoting cross-border networking (Lundquist and Trippl, 2013; Trippl, 2010).

Co-ordination of innovation policies in the Upper Rhine area as a background for S3 implementation

This section addresses the issue of innovation policy coordination in the cross-border region of the Upper Rhine as a background for the implementation of a joint concept for smart specialisation. Besides parts of Switzerland and South Palatinate, Alsace and Baden – the western part of Baden-Württemberg – constitute the Upper Rhine region. Cooperation activities in different areas have been in place for several decades, but (joint) smart specialisation could serve as a vehicle for further deepening the existing links across the border. The empirical approach is detailed below.

Empirical basis

The analyses of the paper are built on two questionnaire-based online surveys that were conducted with the policy-makers responsible for RIS3 across the European Union in summer to autumn 2013 and 2014. Secondly, a range of in-depth phone interviews were conducted in late 2013 to gain deeper insights into regionally specific RIS3 processes’ characteristics and implications. The motivation behind the survey was to achieve a deeper understanding of strategy-building and the implementation of smart specialisation across Europe, the assessment of regional policy and the changes resulting from the smart specialisation requirements, as well as the options of regional policy (Kroll, 2015; Kroll et al., 2014). Basically, the questionnaires covered a range of aspects referring to the general framework conditions, the respective state of play related to regional RIS3 processes and the resulting strategies, as well as policy-makers’ assessment related to the process of implementing smart specialisation strategies in their regions. For the 2013 survey, more than 500 potential respondents could already be identified. In 2014, with more knowledge gained about the full teams working on RIS3, the baseline population could be extended to nearly 1000. In 2013, more than 70 of the targeted addressees completed the questionnaire in full and more than 130 answered notable sections of it. In 2014, the respective figures were similar with 80 full and 160 partial responses. Overall, the resulting coverage can, in both cases, be considered significant given that there are about 200 regional or national entities in charge RIS3 strategies in total.

To deepen the collection of information in France and Germany, 14 telephone or personal interviews were performed, from which 9 were taking place in Alsace and Baden-Württemberg. The interviews were based on semi-structured guidelines lasting between 45 and 75 minutes. The aim was to reach a better understanding of complex aspects needed for the interpretation of the collected data through the online survey. Furthermore, the interviews performed in the Upper Rhine area were targeting more specifically the issue of cross-border cooperation.

Germany and France in the context of smart specialisation

Overall, the survey underlined that both Germany and France have comparatively similar systems of governance and political traditions when compared to other European countries as far as S3-related processes are concerned. These findings were deepened by the specific interviews in Alsace and Baden-Württemberg. On both sides of the Rhine River, the framework conditions in terms of political priorities, human resources and specific competencies can be considered to be rather supportive, and also the degree of socio-economic development in 2013 was comparatively advanced in both national states. Equally, the process of conceiving and implementing smart specialisation strategies cannot be considered as ‘revolutionary', but rather as following the trajectories of political strategies developed beforehand. As the empirical study showed, both Alsace and Baden-Württemberg are encompassed in countries in which the perceptions and potential benefits of smart specialisation processes are not radically different at the national level (Kroll and Muller, 2014; Kroll et al., 2014).

Regional innovation governance and policy in Alsace and Baden-Württemberg

As a consequence, it seems necessary that the analysis takes a closer look at the bordering regions of Alsace and Baden-Württemberg and their existing, pre smart specialisation innovation policies. The decision to focus the analysis is mainly to be found in the fact that the level of interactions between the two regions is quite unique at European level. As earlier research has shown, strong economic relations can be observed as well as some innovation policy-related connections, even though the national boundary continues to play a dividing role (Koschatzky, 2000). This situation is reinforced to a certain extent by historical and cultural links, i.e. cultural proximity. On both sides of the Rhine, from Karlsruhe to Strasbourg and Basle, the Upper Rhine Valley constitutes a core region of Europe that has produced various cultural and technological revolutions and remains a very innovative region and a strong scientific area with a relative weight comparable to Belgium, Austria or Denmark (Héraud, 2012). The specificity of the Upper Rhine area, and maybe its strength, is its polycentric metropolitan nature: linguistic and institutional variety, together with a very old common culture (Héraud, 2011), may constitute a laboratory for S3 application. Against this background, it might provide a ‘living lab’ to improve the understanding of policy dynamics and complexity.

Alsace

On the French side, Alsace remains influenced by a long tradition of centralised governance, even though regional autonomy (décentralisation) has increased progressively in the past three decades. At the same time, in terms of innovation policy, the French situation can be seen as very specific. While up until the 1990s, the French innovation system was characterised by a centralist, interventionist philosophy (‘technological Colbertism’, Larédo and Mustar, 2001), today, it is undergoing profound transformations, coupled with new actors, regulations and frameworks, as well as new ways of implementing priorities (Héraud and Lachmann, 2015). Since France is at the cross-roads between centralisation and decentralisation, its governance system is now very complicated and variable, involving several levels of regional/local actors and national/European institutions and policy frameworks. Unlike in German federal states, the legal distribution of roles is fixed, and as a result, complex multi-level/multi-actor processes in the design and implementation of policies can be observed (Muller et al., 2009).

The principle of regional equity, if not equality, has also shaped a distinctive French response to the needs of a competitive, international knowledge-based economy. Networks and clusters of scientific excellence, rather than the concentration of resources per se, have become preferred policy tools, demonstrating equality of opportunity to compete for science resources, if not equality of outcome. This reflects a more gradual evolution in French policy towards equity rather than equality as a precondition for competitiveness: ‘equity represents a means of striving for equality within the reasonable limits of efficiency' (Baudelles and Peyrony, 2005: 109). Baudelles and Peyrony note a changing regional development paradigm in which competition between territories is no longer seen as a zero-sum game, a position supported by the rejection of the notion of ‘compensatory solidarity' by the most modern and progressive localities. The recent development of S3 strategies at regional level in France must be analysed and understood in the light of this specific context.

As in other French regions, the smart specialisation agenda did not come as a substantial novelty in terms of strategy and implementation, since all French regions had to develop (on request of the European Commission) so-called strategies régionales d'innovation (SRI) between 2006 and 2009. This process had to follow guidelines (‘Méthode Prager’) which already constituted a form of smart specialisation process.

Baden-Württemberg

The situation on the other side of the Rhine is quite different since – unlike France – Germany is a Federal state. In Baden-Württemberg, innovation policy has a long tradition, and stakeholder participation has been an important element of policy making for many years. In general terms, Baden-Württemberg has set up discussion groups comprising private sector as well as research institutes’ representatives since the mid-1980s. In 1992, moreover, the regional government implemented the ‘Future Commission Economy 2000’ which recommended the implementation of an ‘Advisory Council for Innovation’ which, under the name ‘Innovation Forum’, operated from 2002 to 2005. Along similar lines, the Enquete Commission ‘Situation and prospects of medium-sized companies, in particular family-owned companies’ was set up in the late 1990s. While there is, thus, a long and robust tradition of public consultation, innovation-related aspects have typically been featured only as one topic among others. Instead, most regional forums have focused on SME-specific issues in a broader sense. Expert hearings were another approach adopted to deepen the understanding of the topic. Additionally, best practices from other German regions and abroad were collected.

Further dialogue processes were also introduced in connection with Baden-Württemberg's cluster policy in 2007 coinciding with the establishment of the regional ‘Innovation Council’, a broad-based committee uniting 50 persons from leading companies, scientific institutes, culture, sports, media, community, churches, trade unions, chambers of commerce, industry and handicrafts and associations. Its recommendations, published in 2010, were based on an underlying study that described economic and technological perspectives for Baden-Württemberg until 2020, based on empirical evidence and expert assessments. The recommendations carved out a number of domain-type ‘future fields’: sustainable mobility; environmental technologies, renewables and resource efficiency; health and care; and ICT. Later, these were complemented by ‘growth fields’ outlined in the 2011 coalition agreement: aerospace, creative industries, logistics and key enabling technologies (Bündnis 90/Die Grünen BW/SPD BW, 2011).

In responding to the smart specialisation agenda promoted by the European Commission, Baden-Württemberg could put together existing elements as a coherent strategy that, in an inter-ministerial effort, was finally published in mid-2013 (Ministerium für Finanzen und Wirtschaft Baden-Württemberg, 2013). Moreover, Baden-Württemberg decided to go one step further and develop a concrete implementation tool at the sub-regional level, i.e. the RegioWIN competition. This action calls functional regions at NUTS 3 level to develop bottom-up strategic approaches towards regional innovation. During its first phase until autumn 2013, the regions were asked to develop a strategy concept. In case of a positive jury vote, the candidate regions were invited to further elaborate their regional development concepts and draft projects. After a second positive jury vote, concrete projects and support measures may be implemented from 2015 onwards.

An S3-related congruency at cross-border level?

The main point resulting from the interviews with policy makers (on both sides of the Rhine) about S3-related activities is that Alsace and Baden-Wurttemberg currently show some common features in terms of innovation policy.

Starting in 2011, a dialogue-oriented policy action associating regional companies, chambers of commerce, worker unions, networks and policy makers was introduced in Baden-Württemberg. This dialogue became a central element of the economic and innovation policies of the Land (Ministerium für Finanzen und Wirtschaft Baden-Württemberg, 2013). Baden-Württemberg's dialogue-based policy approach, since 2011 has comprised (1) the general economic dialogue (economic exchanges with chambers, unions or associations, etc.) which embraces (2) dialogues in sectors or branches (such as automotive, health industries, information and communication technologies, creative industries, logistics, aerospace, mechanical engineering), (3) theme-oriented dialogues (for instance concerning skilled labour, vocational training or related to clusters) and (4) regional dialogues (Ministerium für Finanzen und Wirtschaft Baden-Württemberg, 2013).

On the other side of the border, since the development of the Alsatian regional innovation strategy ‘Oser innover, Être ouvert au monde, Faire des choix’ (Région Alsace, 2009), substantial progress has been achieved through the smart specialisation rules of action. Changes are not only observable on the level of involved stakeholders (a higher share of regional companies is included) but also on the governance and the operational levels. The strategy development follows more strongly a bottom-up philosophy than in previous periods. During the process of conceiving the strategy, Alsatian policy-makers specifically paid attention to the intersection of emerging markets for regional firms and the specific regional competences.

Synthesising strategy documents in both regions and also referring to regional experts' assessments lead to the conclusion that the process of strategy conception according to the ‘smart specialisation’ rationales are based on important previous developments and strategies. In terms of joint strategy building across the French-German border, (joint) smart specialisation seems to play an important role as an instrument generating opportunities for strengthening existing cross-border ties and relations in innovation policy. So far, information exchanges have played the most important role. However, the process of conceiving S3 strategies was run in both regions independently, i.e. without setting explicit coordination mechanisms in place. Aligning strategies in region-specific fields of specialisation may offer opportunities for future collaboration and, ideally, lead to joint research and innovation efforts in the Upper Rhine region. Following an analysis of specialisation fields in Alsace and Baden-Württemberg, some potential fields of congruency can be identified between the two regions. The following table depicts the three main areas of congruency in terms of common specialisation that are: (i) green economy; (ii) sustainable mobility and (iii) health (to be understood in a broader meaning). Moreover, it is possible to detail these areas into seven more specific fields (see Table 1).

Table 1.

Areas and fields of congruency between Alsace and Baden-Wurttemberg.

A. Green economy

1. Sustainable energy production

2. Energy efficient buildings

3. Circular economy and water-related issues

B. Sustainable mobility

4. Optimisation of combustion engines

5. Hybrid- und electric vehicles/Sustainable mobility systems and services

C. Health and wellness

6. Administration, infrastructure and E-Health

7. Innovative treatment processes and new drugs

The previous section has shown that the cross-border system formed by Alsace and Baden-Württemberg is a case of an intermediate situation between ‘weakly integrated’ and ‘strongly integrated’ (cf. Figure 2). In other words, the two regions can be (at best) considered as exhibiting complementarities that are also reflected in the respective S3 strategies. However, going a little further two questions arise: (i) which existing policy mechanisms might – at least partly – explain this evolution? (ii) What could be done in the future, in terms of governance, to foster this evolution?

Concerning the first question, one important policy mechanism has been the cross-border project called RMT and TMO (Région Métropolitaine Trinationale du Rhin supérieur, Trinationale Metropolregion Oberrhein, http://www.rmtmo.eu/). This bottom-up initiative of the concerned regions (Alsace, a large part of Baden, a small part of Palatinate and North-West Switzerland), agreed by the national states, targeted a strategic convergence of four ‘pillars’: politics, economy and science as well as civil society. The self-organised activities of the scientific pillar have proven to be particularly efficient. A very original initiative has been the organisation of a cross-border call for research proposals co-financed by regional money and Interreg EU funds. This smaller sized local ‘Framework Programme’ was very popular among research labs of the Upper Rhine area, leading to numerous excellent proposals and several funded projects. Another cooperation instrument designed by the RMT and TMO academic community is an annual cross-border meeting called ‘Dialog Science’. It is nevertheless important to stress the fact that such a set of initiatives is no coincidence in the Upper Rhine area which has a long tradition of institutional creativity including cross-border international agreements like Oberrheinkonferenz, Oberrheinrat, Eurodistricts and, specifically for the academic community, the EUCOR federation of five universities founded in 1989 – which now claims to be ‘the’ university of the Upper Rhine and is de facto the core of the RMT/TMO scientific pillar – as well as the cross-border cluster Biovalley connecting local companies to academic labs. In such a context, there are clear indications that the S3 strategy of each part of RMT and TMO (particularly Alsace) just reflects what has been set up for decades by political will and bottom-up initiatives – often supported by the European structural funds. Therefore, the role played by the EU policy through its new S3 concept was, in this case, just to accelerate an existing systemic integration process. Is it old wine in new bottles?

The second question is about facilitating closer cross-border ties, for the future, in terms of innovation policy. This issue is clearly linked with intra-regional coordination (Baier et al., 2013) and multi-level governance (Crespy et al., 2007). In the case of Alsace, for instance, the specific process of systemic integration across the Rhine is strongly linked to the degrees of freedom of the regional government and its perimeter (cf. Trippl, 2010). The present institutional evolution of French regions will certainly impact the evolution of the cross-border system: French regions will have more competencies, but they must share the new powers with urban agglomerations. Strasbourg in this case will play an increasing role. Furthermore, the new perimeter of the region will include Lorraine and Champagne-Ardennes. Thus, further cross-border regional innovation policies could/should focus on finding common grounds between the different parts of the cross-border region. The work could/should start from the identified areas of potential joint-specialisation (Table 1) and further transfer the good practices of existing cross-border collaboration to other sectors and areas of the economy. Facilitating knowledge transfer, promoting cooperative network formation and stimulating (the exploitation of) related variety between the different parts of the cross-border region and the respective regional innovation systems should be a key aspect in this process. Existing bridging organisations and intermediaries have an important role as the catalysts of this development (cf. Jauhiainen, 2014; Lundquist and Trippl, 2013; Trippl, 2010).

Conclusion

In this paper, we attempted to provide new insights into the meaning and implications of the concept of smart specialization (S3) by examining the case of two border regions that can be considered as progressively entering an integration process of their innovation systems.

Conceptually, a review of the original smart specialisation literature underlines that the emphasis of the proposed paradigm shift is in fact much more on the ‘smart’ process than on the ‘specialisation’ outcome. In other words, the concept’s early advocates aimed to propose a new way of handling both political and real world complexity through collective discovery among economic and societal actors. Recognising distributed intelligence, diverging interests and the complexity of agency in the political sphere, administrations were encouraged to initiate entrepreneurial processes of discovery which, in the public domain, mirror processes by which companies orient themselves on the market. Firms, researcher, consultants and administrations were meant to conceive visions for development. Thus, the progressive discovery of the specialisation options and final choice of priorities would from they onset involve those actors who would later pursue these specialisations through actual entrepreneurial or other action. Importantly, it is this idea of an open and self-dynamising process that was genuinely new to the concept.

That said, this paper suggest that, in some regions, such processes have in fact already been in place for many years – and exploited for many purposes, among them cross-border collaboration.

For the case of two regions of the Upper Rhine Area, this paper illustrates how processes of joint discovery emerged both within the regions themselves and in cross-border collaboration long before the formal RIS3 agenda (and ex-ante conditionality) of the European Commission had ever been announced. Partly, this was triggered by previous European policies such as the local INTERREG Programme, it was initiated through own, strategically oriented initiatives of regional actors and administrations. Along partial congruences of the factual specialisations of both regions, several instruments were developed to coordinate efforts across the formally delineated support systems of both regions. Examples include a cross-border cluster in biotechnology (Biovalley), a university network (Eucor), collaborative political initiatives (RMT/TMO), as well as cross-border institutions at local (Eurodisctrict) and regional (Pamina) levels. All of those were efforts to not only manage but leverage and smartly exploit complex policy frameworks as well as actor constellations in a given framework – preceded by discourse, exploration, negotiation and, ultimately joint decision making. Hence, a spirit of smart specialisation existed years before the name was branded, so that its final institutionalisation in European support policy merely reinforced existing trends.

At the same time, it can be observed that the recent formal requirement to draft smart specialisation strategies and set up related governance mechanisms added in fact quite little to existing dynamics, as the two administrative processes were very weakly linked in practice. Not least, this was the case, as the ex-ante conditionality was by both administrations primarily seen as a formal requirement to respond to, rather than as an impetus to openly and informally explore joint futures with partners from neighbouring regions. Thus, the formal obligation to rethink and declare their specialisation policy in the RIS3 context remained little more than additional step in a long run discovery path, and a less cross-national one on top of that. Nevertheless, an ‘Upper Rhine identity’, cognitively constructed through past actions, became an implicit part of both regions formal activities. Shared visions have existed for years and were inevitably reflected both processes, even if these remained formally separate. In that sense, the independent formal processes of smart specialisation succeeded – as they involved actors who already have a vision and projects for their territory and engaged them in relevant discussions about future options and actions, including cross-border ones.

Hence, this study suggests that, if there is enough congruence and shared visions in a cross-border area, individual actors will naturally find their interest in collaborating across the border around specific projects and lobby for support for this in their respective environments. Consequently, the main political task is to support informal processes of exchange and, indeed, entrepreneurially minded, joint discovery between partners from both regions. More so even than regions, cross-border areas are situated in a complex environment of multi-level opportunities and obstacles that have to be acknowledged and assessed in mutual consultation to take action accordingly.

From a more general point of view, the paper suggests that joint smart specialisation, via common research and innovation efforts, can be an effective instrument to strengthen existing cross-border ties and relations in innovation policy. Hence, cross-border regions and organisations should fully explore opportunities that lie in informal joint discovery to better leverage the prevalent complexity of political, administrative and, more generally, funding systems. Therefore, recommendations for future policy making in this field were derived as (1) the identification of areas of joint specialisation, (2) the transfer of good practices, (3) the facilitation of knowledge transfer, (4) the promotion of network formation and (5) the exploitation of positive differences (related variety).

However, further comparable research is needed to confirm whether the experiences gained from the case of the Upper Rhine can be applied to other cross-border contexts. Accordingly, more research on the effectiveness (success and failure) of cross-border science, technology and innovation policy tools as well as past and present processes of joint discovery will be needed to identify the measures best suited to various different types of cross-border regions.

Footnotes

Declaration of conflicting interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

Emmanuel Muller is economist, specialised in innovation and knowledge economics and the coordinator of the French-German research chair evoREG at the University of Strasbourg. He is senior researcher at the Fraunhofer Institute for Systems and Innovation Research ISI since 1993 and at the Bureau d’Economie Théorique et Appliquée (BETA, University of Strasbourg) since 1992.His main research area deal with egional development, innovation strategies and knowledge economics.

Andrea Zenker is senior researcher and project manager at the Fraunhofer Institute for Systems and Innovation Research ISI Karlsruhe, Competence Center Policy – Industry – Innovation. Her research specifically focuses on innovation-related aspects on the regional level, including innovation policies and strategies, methodological aspects of innovation, innovation-related interactions and cooperation. She engages in research projects on behalf of the European Commission, national and regional ministries and further actors. From these experiences, she gained knowledge on innovation concepts, strategies and measures in various European regions.

Miriam Hufnagl studied political science with a focus on comparative systems science and policy studies at the University of Augsburg. Since 2009 she is researcher in the Competence Center Policy – Industry – Innovation in the Fraunhofer Institute for Systems and Innovation Research ISI in Karlsruhe. She started in 2011 the writing a PhD thesis at the Leuphana University Lüneburg writing on strategic policy making in research and innovation policy.

Jean-Alain Héraud is Pr Em of Economics at Université de Strasbourg (Unistra) and member of BETA (Joint research unit Unistra-CNRS). He was previously director of BETA and head of the Department of Economics at Unistra. During the last 35 years he led or participated in many research projects, particularly for the EU RTD Framework Programs, in the areas of innovation policy evaluation, technology foresight and assessment, and regional development strategies. He regularly published in economic reviews on topics related to innovation, creativity, territorial development and industrial economics (chemistry, energy, materials …).

Esther Schnabl is researcher and project manager since 2010 in the Competence Center ‘Policy – Industry – Innovation’ at the Fraunhofer Institute for Systems and Innovation Research ISI in Karlsruhe. Her research focuses on different aspects of regional innovation systems and regional innovation policy, in particular on current trends in regional specialisation as well as the opportunities and challenges for regional innovation systems arising from new technological developments.

Teemu Makkonen holds a PhD and a Title of Docent in Economic Geography. He is currently working as a Postdoctoral Research Fellow at the University of Tampere (Institute for Advanced Social Research). He is also an Assistant Professor, currently on a leave of absence, at the University of Southern Denmark (Department of Business and Economics). He is an Editorial Board Member of Fennia – International Journal of Geography and International Journal of Knowledge-Based Development. His research interests include border regions, economic geography, innovation studies, knowledge transfer and regional development.

Henning Kroll studied economic geography and economics at the Universities of Hannover and Bristol. Having joined Fraunhofer ISI in 2006, he has more than ten years of experience in the field of European, national and global innovation studies and coordinates projects in the areas of innovation research, innovation and technology policy, regional development as well as innovation indicators. His recent academic work focuses on smart specialisation, industrial modernisation and frugal innovation. Moreover, he acts as an independent consultant to the European Commission on smart specialisation and science-industry relations.

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