This article intends to explore whether or not Smart Specialisation is relevant for Earth Observation entrepreneurs, by taking a “bottom-up” look (from the innovators’ / entrepreneurs’ perspective) at Smart Specialisation – the process of developing and implementing innovation policy at a local level currently used throughout the EU and beyond. Read further to discover what Smart Specialisation is about, why it is relevant for Earth Observation, and why and how entrepreneurs can benefit from learning more about it and from getting involved. The article shall focus on examples consistent with the seven sectors addressed by e-shape’s showcases – food security & sustainable agriculture, health surveillance, renewable energy, ecosystem, water resources management, disasters resilience, and climate.

The basics: what is Smart Specialisation Strategy (S3) and why should entrepreneurs care about it

Smart Specialisation or S3 (Smart Specialisation Strategy, also RIS3 – Research and Innovation Smart Specialisation Strategy) refers to the designing of place-based innovation policy following the systematic consultation of the region’s entrepreneurs and other innovation stakeholders. Rooted in academia, this approach has been adopted by all EU countries and/or regions. RIS3 is the cornerstone of the EU Cohesion Policy as of 2013-2014 (Multiannual Financial Framework 2014-2020). Proudly ‘made in the EU’, this policy approach has been adopted in multiple countries and regions beyond the EU. Indeed, the official Smart Specialisation platform (S3P) indicates that more than 180 Smart Specialisation Strategies have been developed at regional or national levels, and 208 regions were registered (19 EU member states, 7 other countries, 187 EU regions and 18 other regions respectively).

In the EU, smart specialisation strategies can either be defined at country level (e.g. Ireland, Slovenia, Estonia), at regional level (e.g. Spain, Greece, Finland) or at both levels (e.g. Italy, Poland, Sweden). Therefore, in this article, by “local” we refer to country and/or regional level.

The main novelty smart specialisation brings forth is developing synergies between top-down and bottom-up approaches. In other words, besides identifying the local assets worth political and financial support, the local authorities in charge are to regularly consult with the local entrepreneurs, companies, business associations, clusters, excellence centres, technology parks and universities. Consequently, entrepreneurs and innovators would have a say in establishing the local priorities by means of weighing in on the various directions considered by the local authorities and in the prioritisation of innovation funding.

An opportunity for Entrepreneurs to claim a central role in the design of innovation policies

As mentioned previously, consulting the innovators i.e., the grassroot actors who create new products and services, is by definition at the centre of the “smart specialisation” process. Policymakers refer to this as “Entrepreneurial Discovery Process” which means that each local authority enters into regular consultations with entrepreneurs, clusters, academics, technology parks and other stakeholders working on innovative products or services in the region.

What does this mean in practice? The interactions and their results are as diverse as the regions and countries themselves. However, the resulting types of involvement could be grouped into two categories – direct, company level involvement (or even of a person as a member of civil society) or indirect involvement via a local institution representing the company’s interests. The most popular ‘intermediaries’ are science parks, innovation hubs, regional sectoral clusters, technology transfer hubs, university technology centres, and business associations.

A classical and transparent example from France, Occitanie, sees discussions and stakeholder involvement organised around 8 working groups, one for each 2021-2027 priority. The region lists clusters that are either leading or getting involved in the working groups. As such, companies can either opt for getting directly involved in the working groups or for joining a cluster and thus ensure their interests are indirectly represented.

The involvement of local actors such as WaterCampus Leeuwarden stands out amongst the RIS3 success stories for it has strongly influenced the development of Smart Specialisation in Northern Netherlands over 2014-2020 as well as further into 2021-2027. The synergies developed between the local authorities and WaterCampus have had tangible, positive outcomes in terms of innovation and business creation in the region and beyond. As of 2002, thanks to this “meeting point of the Dutch water technology sector”, 38 spin-offs came to life, 75 new water technology companies were established, and 90 water technology patents were registered (link to the latest WaterCampus monitor 2020 in Dutch).

In the Hauts-de-France region, France, an organic next step has been tried out: directly involving citizens in the green energy transition through, for instance, establishing a municipal solar energy cooperative using contributions from citizen-investors.

It is worth emphasizing that the only entity in charge of the smart specialisation process is the local authority, meaning that, be they a better specialisation match, none of the other European regional or national authorities have a part to play in the S3 process. Therefore, should the local priorities differ from the company’s innovation aims, for the company to become a direct beneficiary of the smart specialisation process a shift or a broadening of the local priorities would need to occur.

Another important element of entrepreneurial involvement is “now” – now is the time to get involved. Currently, the 2014-2020 smart specialisation strategies are undergoing assessment to help establish appropriate guidelines for the 2021-2027 period. Depending on the region, the authorities might have already set new priorities, or are in the process of defining their specialisation. While the database is somewhat outdated, the interested stakeholders should first identify the local authority responsible for developing and implementing the strategy by looking up the region/country in which the company was established on the S3 platform.

The relevance of Smart Specialisation for Earth Observation and e-shape’s showcases

Although not explicit, technological capabilities and advancements are very much at the core of RIS3. Indeed, in the process of defining the local specialisation, the research and innovation capabilities of a region/country are also being assessed for the purposes of considering the local science and technology potential when drafting the strategy. For instance, upon developing its first Smart Specialisation strategy (2014-2020), Romania became aware of the low transfer of academic research results into the market and of the low uptake of innovation within companies. To remedy this, the authorities undertook actions to exploit the power of RIS3 and promote technological transfer by improving governance and stimulating regional innovation ecosystems. In contrast, the Västra Götaland region in Sweden already boasts six established science and technology parks. The existence of these technologically advanced structures has determined the authorities to take advantage of their capabilities upon deciding what sectors to prioritise in their smart specialisation strategy. Therefore, the six local priorities revolve around and support the ambitions manifested by the six existing science and technology parks: life science, transport, green chemistry, materials, textiles, and the maritime sector.

Thanks to their transversal, innovative and technology-intensive solutions, Earth Observation stakeholders have the potential to become part of the core stakeholders involved in the development of local innovation policies as defined through these smart strategies. As S3 is to further focus on “sustainability” – rebranded into S4 (Smart Specialisation Strategies for Sustainability), a clear mandate is opening up for EO-based solution developers. This brings more emphasis on cross-sectorial solutions and aims to create stronger synergies between the local and EU-level policies (e.g. European Green Deal), and/or global goals (e.g. Sustainable Development Goals).

As mentioned previously, countries and regions have just published or are in the process of redefining their intended priorities for 2021-2027. However, certain conclusions can be drawn from analysing the previous set of local strategies, and the priorities (“S3 Thematic Platforms” and “EU Macro Regions”) that benefitted additional support from the European Commission to establish cross-country and/or cross-regional networks within the EU.

Having analysed the local strategies for 2014-2020, it becomes apparent that most regions and countries have prioritised (smart) agriculture, renewable energy, or energy transition, placing climate and long-term sustainability concerns at the core of their values as expressed across different specialisation sectors.

For instance, 2/3 of all EU Member States and regions have set energy as one of their priorities, allocating a total amount of €40 billion from the European Cohesion funds to supporting investments in the low carbon economy. Hence energy as well as agri food are two of S3’s thematic platforms aimed at enhancing cooperation, capacity (learning) and user uptake of the innovative solutions produced within the participating regions. Out of the four EU Macro Regions, the Danube region’s priorities match several of the interests pursued by the e-shape showcases – biodiversity and environmental risks, energy, water, and disaster resilience – see the DAREnet project for floods.

Way forward – when ‘smart’ can become ‘smarter’

With or without the entrepreneurs’ participation, the Smart Specialisation Strategies are here to stay and will define the local innovation agenda and priorities that impact their work. Whilst the local and European authorities are in the process of evaluating the results of this local innovation policy “experiment” (2014-2020), new strategies are being written setting priorities for the next seven years.

The quality and diversity of these strategies, not to mention the level of involvement of the local entrepreneurs – a cornerstone in developing such strategies – might raise some concerns. Indeed, in a recent research paper on S3, its authors tried to answer the question “How “Smart” Are the Smart Specialisation Strategies?”. Their findings show that upon developing their first iteration (2014-2020), the countries or regions with weaker governments struggled in trying to balance too many objectives and therefore failed to specialise. Further concern was raised by the fact that most strategies appeared to be mimicking those of the neighbours instead of showcasing a clear focus on the intrinsic advantages of the region.

While part of the solution most likely lies in better governance, hence capacity building activities for policymakers might help, these findings also speak to the importance of getting entrepreneurs on board as their experience and active involvement could really contribute to updating and successfully implementing the future, hopefully smarter (sustainable) specialisation strategies.