The role of RIS3 in Cohesion Policy

Brussels, 18 September 2012Luisa Sanches

Policy Analyst – InnovationDG REGIO

Cohesion Policy paradigm shift towards Cohesion Policy paradigm shift towards innovationinnovation

• Cohesion policy contributes to unlock the growth potential of the EU by promoting innovation in all regions.

• For 2007-2013, 86 billion to innovation, of which 65 billion come from the ERDF. That is 25% of its total budget. For the less developed regions the ERDF is the most important source and enabler to leveraging national and private funds.

Research/Innovation

Environment

Transport

Information societySocial infrastructureEnergy

TourismCultureInstitutional capacity

European Regional Development Fund and Cohesion Fund (ERDF)(€ 271 billion)

ICT is 4.4 %(€ 15.2 billion) of the total Structural Funds allocation (€ 346 billion)

of which

Broadband is 0.7 % (€ 2.3 billion)

Planned investment2007-2013

Objectives of cohesion policy 2014-2020Objectives of cohesion policy 2014-2020

• Deliver the Europe 2020 strategy objectives of smart,

sustainable and inclusive growth

• Focus on results

• Maximise the impact of EU funding through concentration

• Conditionalities (smart specialisation)

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Cohesion Policy

Thematic objectivesThematic objectives1. Research and innovation2. Information and Communication Technologies3. Competitiveness of Small and Medium-Sized

Enterprises (SME)4. Shift to a low-carbon economy5. Climate change adaptation and risk management and

prevention6. Environmental protection and resource efficiency7. Sustainable transport and disposal of congestion on major

network infrastructure8. Employment and support for labour mobility9. Social inclusion and poverty reduction10. Education, skills and lifelong learning11. Increased institutional capacity and effectiveness of public

administration

Concentrating resources to maximise impactConcentrating resources to maximise impact

Less developed regionsMore developed & transition regions

Concentration of ERDF investments on:• energy efficiency & renewable energy

• research & innovation• competitiveness of SMEs

• flexibility – different regions have different needs

• special arrangements for ex-convergence regions

60%20%

44%

6%Digital Agenda

Monitoring & up-date of RIS3

Cohesion Policy

Timing for RIS3 and Operational ProgrammesTiming for RIS3 and Operational Programmes

Development of RIS3 by MS and / or regions

Discussion of COM position paper

CSF & Legal frame

adoption

COM position papers

CountrySpecific

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Important novelties Important novelties for R&I in proposed Regulations (1)for R&I in proposed Regulations (1)

SMEs only! Large Firms only in connection with R&TD+i. Art.3 (ERDF Reg.): "The ERDF shall support productive investment, which contributes to creating and safeguarding sustainable jobs, through direct aid to investment in SMEs"

No physical infrastructures in rich regions: Art. 3 (ERDF Reg.): "In more developed regions, the ERDF shall not support investments in infrastructure providing basic services to citizens in the areas of environment, transport, and Next Generation Access (NGA)/ICT". Attention: under discussion in Council

Important novelties Important novelties for R&I in proposed Regulations (2)for R&I in proposed Regulations (2)

Promoting internationalisation: Art. 60.2 (b) (CPR Reg.): "The total amount allocated under the programme to operations located outside the programme area does not exceed 10% of the support from the ERDF…"

…and interregional collaboration: Art. 87.2 (c) v (CPR Reg.): "An Operational Programme shall set out the contribution to the integrated approach for territorial development set out in the Partnership Contract (Agreement), including the arrangements for interregional and transnational actions with beneficiaries located in at least one other Member State"

Important novelties Important novelties for R&I in proposed Regulations (3)for R&I in proposed Regulations (3)

Innovative actions in the field of sustainable urban development: CPR Art 84(7) "0,2% of the ERDF resources for the Investment for growth and jobs goal shall be allocated to innovative actions at the initiative of the Commission in the area of sustainable urban development" (not under shared management; urban development platform to facilitate networking among cities with IA)

Social innovation: ESF Art. 9: all areas falling under the scope of the ESF; Member States shall identify themes for social innovation; Commission shall facilitate capacity building for social innovation

+ in ERDF investment priority 1(b)

Important novelties Important novelties for R&I in proposed Regulations (4)for R&I in proposed Regulations (4) Common Strategic Framework: translate the objectives

and targets of smart, sustainable and inclusive growth into key actions for the ERDF, the CF, the ESF, the EAFRD and the EMFF which will ensure an integrated use of the CSF Funds to deliver common objectives (CPR Art. 10-12)But: not via delegated act, as proposed by COM, but as part of CSF regulations See COM proposals for key actions in SWD(2012) 61 final http://ec.europa.eu/regional_policy/sources/docoffic/working/strategic_framework/csf_part2_en.pdf

Open to synergies with Horizon 2020: Art. 55.8 (CPR Reg.): "An operation may receive support from one or more CSF Funds and from other Union instruments, provided that the expenditure item included in a request for payment for reimboursement by one of the CSF Funds does not receive support from another Fund or Union instrument,…"

Connecting Europe Facility: € 50 billion: Synergies

• Transport – € 31.7 billion

• Energy – € 9.1 billion

• Telecommunications – € 9.2 billion

• Broadband • Digital Service

Infrastructures• Horizontal Priorities

• Centralised management for grants allocation

• Competitive calls (or beneficiaries identified in the work programme)

• ‘Use it or lose it principle’ to ensure effective implementation

• Economies of scale and synergies between sectors to lower administrative costs

Partnership with financial intermediaries (like EIB) for financial instruments (such as loans, guarantees, or project bonds)

Implementation of projects (procurement, etc) remains responsibility of beneficiaries and

Connecting Europe Facility

Support new business cases through :

Loans

Guarantees

Bonds (project bond pilot)

Equity (infrastructure investment funds)

Potential beneficiaries

• Telecoms (incumbent or new

entrant)

• Utility companies

• Regional bodies, including

municipalities

• New alliances and partnerships

(PPPs), including equipment

providers

• ….AND MEMBER STATES !

Thematic ex-ante conditionalities Thematic ex-ante conditionalities … state-of-play regarding RIS3 conditionality…

Thematic objectives Ex ante conditionality Criteria for fulfilment

1. Strengthening research, technological development and innovation (R&D target)

(referred to in Article 9(1) )

1.1. Research and innovation:

The existence of a national or regional research and innovation (strategy) (strategic policy framework(s)) for smart specialisation in line with the National Reform Programme, to leverage private research and innovation expenditure,

[ which complies with the features of well-performing national or regional research and innovation systems.]

For research infrastructures only: 1.2 The existence of a multi-annual

plan for budgeting and prioritization of investments.

– is based on a SWOT analysis to concentrate resources on a limited set of research and innovation priorities;

– outlines measures to stimulate private RTD investment;

– contains a monitoring [ and review ] system.

A framework outlining available budgetary resources for research and innovation;

A [indicative] multi-annual plan for budgeting and prioritization of investments linked to EU priorities [and, where appropriate, the] European Strategy Forum on Research Infrastructures -ESFRI).

Thematic ex-ante conditionalities Thematic ex-ante conditionalities … to what else does the RIS3 apply?

Thematic objectives Ex ante conditionality Criteria for fulfilment

2. Enhancing access to and use and quality of ICT

(Broadbandtarget)(referred to in Article 9(2) )(R&D target)(referred to in Article 9(1) )

2.1. Digital growth: [ The existence within the

national or regional innovation strategy for smart specialisation of an explicit chapter for ] A strategic policy framework for digital growth to stimulate demand for affordable, good quality and interoperable ICT-enabled private and public services and increase uptake by citizens, including vulnerable groups, businesses and public administrations including cross-border initiatives.

[A strategic policy framework for digital growth, for instance, within the national or regional innovation strategic policy framework for smart specialisation is in place that contains]:- budgeting and prioritisation of actions through a SWOT analysis [ carried out inAlignment ] consistent with the Scoreboard of the Digital Agenda for Europe;– an analyses of balancing support for demand and supply of information andcommunication technologies (ICT) should have been conducted;– indicators to measure progress [measurable targets for outcomes] of interventions in the field of digital literacy,skills, e-inclusion, e-accessibility, and e-health [within the limits of Article 168 TFEU ] which are aligned with existingrelevant sectoral national or regional strategies.– assessment of needs to reinforce ICT capacity-building.

What is Smart Specialisation ?What is Smart Specialisation ?

‘Knowledge for Growth’ expert group (DG RTD) launched concept in the framework of ERA;

Problem: fragmentation/imitation/duplication of public R&D investments;

Stresses role for all regions in the knowledge economy, if they can identify competitive advantages in specific activities with knowledge and productive roots

Challenges: Smart specialisation has to embrace the concept of open innovation, not only investment in (basic) research.

= place-based economic transformation agendas

1) Focus policy support and investments on key national/regional priorities, challenges and needs for knowledge-based development (= tough choices)

2) Build on each country's/region’s strengths, competitive advantages and potential for excellence (= critical mass, differentiation)

3) Support all forms of innovation

4) Get stakeholders fully involved and encourage experimentation and private sector investment

5) Evidence-based and include sound monitoring and evaluation systems

R&I Strategies for Smart Specialisation (RIS3)

Cohesion Policy

http://ec.europa.eu/regional_policy/sources/docgener/informat/2014/smart_specialisation_en.pdf

Hypothetical Structure of a RIS3 Hypothetical Structure of a RIS3

RIS3RIS3

Skills & innovation capacities:Skills & innovation capacities:entrepreneurial, innovation management, creative …entrepreneurial, innovation management, creative …

KETs for SMEs :KETs for SMEs :Tech.transfer & audits, demonstrators, pilots Tech.transfer & audits, demonstrators, pilots

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Fields of "specialisation"

… or rather differentiation, diversification, critical mass,

future potential …

RIS3 ≠ reinventing the wheel!If an innovation strategy or support system exists, build on it!

RIS3 ≠ reinventing the wheel!If an innovation strategy or support system exists, build on it!

Technical Assistance may be used to develop and monitor the RIS3Technical Assistance may be used to develop and monitor the RIS3

RIS3 : Should be the backbone of the OPs and combine funds from several budgets (national and EU)

National funds

Regionalfunds

ERDFESF

Other EU Funds,Ex: Horizon 2020

National Competitiveness OPsRegional OPs

Synergies

Rural Development

Fund

The financing of the RIS3 is broadSeveral sources

Innovation businessmarket

Research Education

Aligning several strategies

Partnership agreement

Partnership agreement

National level RIS3

How may RIS3 per country?How may RIS3 per country?

• The platform is run by a steering team gathering representatives of several Commission Services: REGIO, EMPL, RTD, ENTR, EAC, CNECT, SANCO, CLIMA, AGRI and the JRC.

• The steering group started its activity in January to prepare the list of actions and launching of the Platform and meets regularly every month.

• A mirror group was set up: for advise and follow-up: High-level experts, representatives of Networks and bodies

(e.g. EURADA, ERRIN, UEAPME, EBN, OECD, European Cluster Observatory, European Cluster Alliance, etc.) It gathers every three months.

jrc-ipts-s3platform@ec.europa.eu

Commission support for RIS3:

S3Platform:• peer-reviews• analysis & data• training • communication

RIS3 policy events: • national• trans-national

Expert analysis and support• national• regional• thematic• process• ….

Cohesion Policy

Support for RIS3 developmentSupport for RIS3 development

Consultants, expertshttp://ted.europa.eu/udl?uri=TED:NOTICE:88796-

2012:TEXT:EN:HTML&src=0

European Commission

World Bank

JASPERS (Technical Assistance facility for the New Member States)

OECD

..

Cohesion Policy

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PART I: THE POLICY CONTEXT PART II: THE RATIONALEPART III: RIS3 DESIGN IN A NUTSHELL

Annex I – A step-by-step approach to RIS3 designAnnex II – Delivery instruments and horizontal

approachesAnnex III – Guidance for expert assessment

Edited by JRC IPTS in association with DG REGIO and with contributions from:

D. Foray, P. McCann, J. Goddard, K. Morgan, C. Nauwelaers, R. Ortega, Commission officials from various DGs and S3 Platform team

Available on the S3 Platform webpage

http://s3platform.jrc.ec.europa.eu/home

The RIS3 Guide

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RIS3 guide - Key steps for developing a RIS3

Step 1 – Analysis of regional context/potential

Step 2 – Governance

Step 3 – Vision for the future

Step 4 – Selection of priorities

Step 5 – Policy mix

Step 6 – Monitoring and evaluation

Monitoring

Policy mix

Priorities

Vision

Process

Analysis

RIS3

Incubators Universities & regional development Broadband

Soon available:

► Clusters ► Green growth ►

► Creativity ► Service innovation

► ….

Inspiration for innovation support:

• Oslo Manual (OECD) https://community.oecd.org/community/smartspecialisation

• Community framework for State Aid to Research and Innovation

• Analysis of regional innovation http://www.rim-europa.eu

• EURADA • Directory of "No-Nonsense" Activities to Build S³-minded Regions; • All money is not the samehttp://www.insme.org/files/3019

Thematic guidesThematic guides

26Cohesion

Policy

http://ipts.jrc.ec.europa.eu/activities/research-and-innovation/s3_b.cfm

Five investment models provide a broad spectrum of funding options

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5 models

Bottom-up

Privatedesign build and

operate

Publicoutsourcing

Joint venture

Publicdesign build and

operate

Information Information • Proposals for the Structural Funds 2014-2020:

http://ec.europa.eu/regional_policy/what/future/proposals_2014_2020_en.cfm

• RIS3 factsheet: http://ec.europa.eu/regional_policy/sources/docgener/informat/2014/smart_specialisation_en.pdf

• S3 Platform: http://ipts.jrc.ec.europa.eu/activities/research-and-innovation/s3platform.cfm

• RIS3 guide: http://s3platform.jrc.ec.europa.eu/s3pguide

Cohesion Policy