Historic Background to Policy Driven Innovation System Development

by The Bearing Wave on October 7, 2015

Integrated projectsIn our work, we often talk about integrated projects and integrated development, but what does this really mean, and in what context can it be relevant? To explain this, below is an historic background.

Pro-active work with regional policy driven innovation system development started in most OECD countries in the 1950s and 1960s. This was a period of relatively strong economic growth, fiscal expansion and low unemployment and the main objective of the activities was to achieve greater equality and sustainable growth in this period of rapid growth and structural changes. The main instruments were subject to a model of redistribution of wealth in the form of centrally controlled financial transfers and wide scale public investments. With Horizon 2020 the EU has returned to this approach in force.

In the last two decades, policy driven innovation system development has become a motive for initiating debate, both in the scientific community and among those responsible for implementing policy, on changing the paradigm of regional policy in relation to objectives, priorities, tools, actors and territorial areas of intervention.

The debate is stimulated in connection with attempts to demonstrate the positive impact of the cohesion policy, which is actively discussed in the context of the EU budget, where from the new period 2014 to 2020 there has been a search for the added value of the policy.

Policy Driven InnovationWith the evolution of development challenges and economic, social and territorial conditions, regional policy is successively transformed. Originally, the attention of the “regionalists” was focused on the goals and question whether it is to be oriented on the equity (social cohesion, convergence) or on the efficiency (economic cohesion, competitiveness).

Regional policy began to evolve from a model of short term grants distributed by order from superior authority “for the most disadvantaged areas” to the model of long term, decentralised development policies aimed at promoting all regions (irrespective of the degree of prosperity), from dispersed intervention to more selective investments.

Development strategies have begun to take into account a wide range of direct and indirect performance factors, focus on the endogenous territorial characteristics (instead of exogenous investments and transfers). Emphasis has been put on opportunities rather than barriers and on good governance where an increasingly important role was played by regional and local authorities.

Numerous scientific publications suggest that development policies should support growth in all regions, and regions should invest in their own development by mobilising local resources and funds in order to exploit their specific competitive advantages without excessive reliance on national transfers and grants.

In summary, fundamental change in the paradigm of regional policy described primarily in the OECD’s achievements consists in:

  1. strong orientation of public intervention on enhancing the competitiveness of regions and unlocking the growth processes through better use of competitive advantages and development potentials,
  2. departure from the model of short term grants distributed by order from superior authority “for the most disadvantaged areas” to the model of long term, decentralized development policies aimed at promotion of all regions,
  3. departure from dispersed interventions to more selective (focused) investments.

The difference between the old approach and the new approach is summarised in the table below.

Comparison table

About The Bearing Wave :

The Bearing Wave is a blog for the consulting firm Bearing, where we write about our methodology and experience. We also present news from our practice and thoughts on development, and we sometimes publish guest authored articles. The blog has been published since 2009 and contains hundreds of articles, and it has several hundred readers every day from across the world.

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