FAQs on RIS3

• Smart specialisation is a place-based approach, meaning that it builds on the assets and resources available to regions and Member States and on their specific socio-economic challenges in order to identify unique opportunities for development and growt.
• To have a strategy means to make choices for investment. Member States and regions ought to support only a limited number of well-identified priorities for knowledge-based investments and/or clusters. Specialisation means focusing on competitive strengths and realistic growth potentials supported by a critical mass of activity and entrepreneurial resources.
• Setting priorities should not be a top-down, picking-the-winner process. It should be an inclusive process of stakeholders' involvement centred on "entrepreneurial discovery" that is an interactive process in which market forces and the private sector are discovering and producing information about new activities and the government assesses the outcomes and empowers those actors most capable of realizing this potential.
• The strategy should embrace a broad view of innovation, supporting technological as well as practice-based and social innovation. This would allow each region and Member State to shape policy choices according to their unique socio-economic conditions.
• Finally, a good strategy must include a sound monitoring and evaluation system as well as a revision mechanism for updating the strategic choices.

• Fit into the overall research and innovation policy (as outlined in the Innovation Union flagship's "Features of well performing national and regional research and innovation systems");
• Complement the existing national or regional funding and governance and legal measures that form part of their policy mix.
• Support effective and efficient measures that provide incentives to private R&I investments.

Identifying a "limited number of research and innovation priorities" is a requirement to fulfil the RIS3 ex-ante conditionality check in the proposed regulations for the future Cohesion Policy. A RIS3 should prioritise domains, areas and economic activities where regions or countries have a competitive advantage or have the potential to generate knowledge-driven growth and to bring about the economic transformation needed to tackle the major and most urgent challenges for the society and the natural and built environment. The number and nature of these priorities will vary from region to region. Note however, that although a first set of priorities should be identified when the RIS3 is designed they can be changed or modified, when new information/developments make it advisable.

Priorities could be framed in terms of knowledge fields or activities (not only science-based, but also social, cultural and creative ones), sub-systems within a sector or cutting across sectors and corresponding to specific market niches, clusters, technologies, or ranges of application of technologies to specific societal and environmental challenges or health and security of citizens (e.g. ICT for active ageing, mobility solutions to reduce traffic congestion, innovative material solutions for eco-construction, etc.). While some regions or countries may prioritize one or more Key Enabling Technologies (KETs), others will focus on applications of such technologies to specific purposes or defined fields.

Social, organisational, market and service innovation, or practice-based innovation, play as important a role in RIS3 as technological innovation based on scientific research. This is especially relevant for less-developed regions with comparatively weaker technological and science basis. RIS3 involves not only radical innovation but also exploiting niches by innovating in traditional fields, through developing and applying new business or organizational models, and adapting/exploiting innovations deriving from tacit knowledge and experience in these areas.

Most often, prioritised choices of domains, areas or specific economic activities will be complemented by horizontal measures. These aim at realizing adequate framework conditions for entrepreneurship, supporting the operation of all types of firms both in domestic and international markets, and for developing inter-firm, inter-cluster, and cross-border collaborations.

The expressions niche and domain in the context of smart specialisation are closely linked. To put it in a nutshell, a promising niche in a business environment is the counterpart of a promising domain in the pursuit of knowledge and innovative ideas. This relationship is so close that the two expressions are often used as synonyms.

In other words, the word niche refers to market, while domain refers to human knowledge (scientific, technological, practice-based etc.). A market niche is a portion of user or consumer market that can be addressed by specific products or services. It is usually defined in terms of the profile of potential customers and their needs; meeting these needs is the goal of the firm identifying/occupying the corresponding niche.

The word niche carries implicitly the connotation of a small, haven-like part of the market, whereby the firm serving specific customers' needs through targeted, differentiated products, can be less exposed to low-cost, global competition. Of course, as all markets, also such niches are subject to change and require sustained innovation and business efforts by firms operating in them.

A specialisation domain is an R&D or innovation area characterized by distinctive knowledge. It can be defined either in terms of capabilities or technology or product functionality.

The existence of a specialisation domain is often a precondition for having the capacity to develop innovative products or services for specific market niches.

A smart specialisation field/area is about being able to effectively match knowledge domains with market potentials, possibly in view of a niche market. Knowledge alone does not necessarily generate per se economic value of the sort reflected in GDP or total welfare estimates. On the other hand, products with little knowledge content, usually cannot defend their niches for long, if at all, and fall back to the diminishing returns competition typical of undifferentiated, so-called 'homogeneous' goods. Smart specialisation fields are therefore often at the cross-section of different sectors, technologies or knowledge domains.

Priorities should be identified based on two fundamental processes:

• An "entrepreneurial process of discovery" utilizing entrepreneurial knowledge existing in a region or country and taking an entrepreneurial approach in the sense of focusing on market opportunities, differentiating from others, taking (and managing) risks and seeking alliances to optimise the access to and use of resources (physical, financial, intellectual, market knowledge, etc.). This means that policy makers should involve all types of innovation actors (e.g. businesses, technology and competence centres, universities and public agencies, science and business parks, business angels and venture capitalists, civil society, etc.) in an entrepreneurial process for the design of RIS3 and assess their proposals for future development and investment. Simple surveys among these actors are by the way not sufficient. The essence of the entrepreneurial discovery process lies in its interactive nature that brings the different actors together in a participatory leadership process to carve out jointly the smart specialisation fields and develop a suitable policy mix to implement them. (See also the new annex 3 of the RIS3 Guide + Answer to question 5).
• An objective analysis of the region/country current situation in terms of research, innovation (incl. existing infrastructures), industrial structures (incl. clusters, position in value chains), skills and human capital (academic and other), demand (incl. public and societal demand), public and private budgets for research and innovation, framework conditions, functioning of the innovation eco-systems (see annex 1of the Innovation Union flagship initiative). The analysis should take into account the economic context with a place-based focus complemented by an outward-looking dimension. It should also examine the gaps, barriers and potentials for future economic development in a knowledge-intensive perspective, including potentials that will require cooperation with innovation actors in other countries and regions. This means the use of evidence to show what type of activities have the highest chances of success in a particular region or country, based on local assets and an examination of comparative advantages and complementarities with other European and global competitors.

Above all, priority setting cannot be regarded as a straightforward process whose outcome can be decided once and for all. Priority setting requires a certain degree of experimentation with new policy tools, ideally through pilot projects during the process of elaboration and modification of the RIS3. This in turn requires a strong governance system with sufficient political backing, in order to take risks and allow for failures from which lessons can be learned.

A key feature of RIS3 is its reliance on collaborative leadership. This means that no single institution (not even the World Bank and certainly not consultants) alone is able to write such a strategy: RIS3 is about partnership and should be developed with the active involvement of many different types of actors, including firms, science and business parks, universities and other research institutions, civil society organisations as well as national, regional and local authorities. The exact nature of this partnership will vary according to the national and regional institutional structures.

The involvement of entrepreneurs, broadly defined, is especially important to developing RIS3, and to the, aptly called, 'entrepreneurial process of discovery', because they are best placed to know what is likely to work in a particular place and with whom abroad cooperation can be helpful. This type of institutional capacity building cannot happen overnight and should be reinforced as the strategy is developed and implemented. Likewise, the entrepreneurial process of discovery can also be described as a 'journey' with no start or end. This is why the governance aspects of RIS3 should be constantly monitored and evaluated, and modified if necessary. These issues are discussed in depth on pages 34-44 of the RIS3 guide.

Entrepreneurial discovery is a key process in the definition of RIS3 priorities and therefore essential to a successful design of a smart specialisation strategy.

An "entrepreneurial process of discovery" utilizing entrepreneurial knowledge existing in a region or country and taking an entrepreneurial approach in the sense of focusing on market opportunities, differentiating from others, taking (and managing) risks and seeking alliances to optimise the access to and use of resources (physical, financial, intellectual, market knowledge, etc.). This means that policy makers should involve all types of innovation actors (e.g. businesses, technology and competence centres, universities and public agencies, science and business parks, business angels and venture capitalists, civil society, etc.) in an entrepreneurial process for the design of RIS3 and assess their proposals for future development and investment.

Simple surveys among these actors are by the way not sufficient. The essence of the entrepreneurial discovery process lies in its interactive nature that brings the different actors together in a participatory leadership process to carve out jointly the smart specialisation fields and develop a suitable policy mix to implement it (see also new annex 3 of the RIS3 Guide).

This means that the regional government no longer plays a role of omniscient planner but it will assess the potential of the new activities and empower those actors which are most capable of realizing that potential.

This helps avoiding the short-comings of purely political interest-driven or consultant-written strategies, because full stakeholder involvement through entrepreneurial discovery process allows to draw operational conclusions out of the results of the SWOT / statistical type of analysis to shape ownership around the strategies and to design the intervention methods according to the needs of innovation actors, in particular of course the enterprises. See also the definition in the annex of the Common Provisions Regulation for the European Structural and Investment Funds.

The risk of failure is inherent to innovation and this is fully accepted by the European Commission – but how risk is managed can influence the success of RIS3. Before defining what is meant by success or failure, it is useful to distinguish between innovation activities of firms, and innovative measures of support providers, including public bodies. Business innovation has by definition a higher risk than non-innovative activities, but when successful is likely to render higher returns for investment, jobs and growth. This is why innovation is a core issue for the Europe2020 strategy. The use of innovative support measures also entail a certain level of risk, but likewise have the potential for achieving better results.

Both types of innovation should be accompanied by appropriate risk mitigation or management. For example, with regard to the possible failure of business innovation projects, the Commission recommends coherent policy-mixes, such as the combination of advisory services with networking and clustering, as well as direct financial support. The Commission also promotes the increased use of financial instruments that enhance risk-sharing.

As for mitigating the risk of failure of public support mechanisms, the Commission encourages experimentation. This can include pilot interventions that can subsequently be abandoned or modified; this approach applies not only to the innovative actions for sustainable urban development, but to all innovation-related investments.

To determine whether there is success or failure at the level of operations, it is of utmost importance to set meaningful indicators, for instance those that include a realistic time-perspective. In this example, employment growth due to business innovation may not materialise within the programming period and to use this as an indicator may be counterproductive.

On the other hand, the development and testing of a prototype, new forms of co-operation along the value chain or increased collaboration with research institutes may materialise in time, and hence may be aptly used as indicators.  The setting and quantification of indicators should also take into account the level of risk and innovativeness of the measures to be supported by the proposed investment.

Understanding whether specific policy-driven operations work, or not, is a necessary step towards improving the policy which drives them. However determining whether there is success or failure at the programme level, above the level of specific operations, is another question. Result/outcome indicators reflecting the change that the strategy/programme want to bring about in a region or a Member State should be used and performance reviews would examine them at the level of priorities, i.e. assess the progress globally and not at the level of operations.

The RIS3 guide stresses the importance of defining adequate indicators in order to monitor and evaluate the strategy, but there is no one size fits all, ready-made approach: Indicators should be tailored to each region's specific circumstances, and this means that the identification of the appropriate indicators for each region has to be closely linked to the identification of RIS3 priorities and the design of an action plan.

It is important to highlight that RIS3 requires the use of results (or outcome) indicators. As opposed to output indicators, which measure what is produced or accomplished with the resources allocated to an intervention, results or outcome indicators measure the changes that arise from the implementation of an intervention. These changes are normally related to the objectives of the intervention, which is why it is important that RIS3 results/outcome indicators are linked to the strategy's priorities and activities. More information about indicators can be found on pages 59-61 of the RIS3 guide. For those policy makers with a special interest in the definition of indicators for RIS3, information is available on the S3 Platform website (e.g. results of a seminar in January 2014 at the following links: 1 and 2)

Mostly the RIS3 indicators will be at a higher aggregate level than the indicators and targets required for ERDF Operational Programmes, but the guidance on the ERDF intervention logic and indicator system can be applied for the RIS3 indicators (and for those parts of the RIS3 policy mix that will be implemented with ERDF support, it is recommended to align the indicators; see the Commision's Guidance Document on Monitoring and Evaluation for the 2014-2020 programming period).

Notice: indicators and targets for the RIS3 should have a causality link to the planned policy mix, the envisaged specialisation fields and vision for economic transformation. Indicators that would NOT qualify for this would be for instance: "attain the 3% target of GDP for R&D", "improve position in the Innovation Union scoreboard", "increase the amount of Horizon2020 grants compared to the 7 th Research Framework Programme for R&D". 

Yes, this is even a requirement for the RIS3 ex ante conditionality, as a framework outlining available budgetary resources for research and innovation, including an indicative multi-annual plan for budgeting and prioritization of investments in research infrastructures has to be provided. RIS3 is a comprehensive strategic framework that goes far beyond the management of the EU's structural funds: RIS3 can, and in fact should, be relevant to other sources of European and national public funding, and also should mobilise private investment, especially if measures are foreseen that are not eligible for the structural funds (e.g. activities outside the EU territory).

Note that for more developed regions/countries Structural Funds will only represent a minimal percentage of their RIS3 funding. The Operational programmes should demonstrate how the Structural Funds investments fit into the overall RIS3 strategy.

Notice: RIS3 may include some measures aimed at receiving European R&D funds from Horizon 2020 (which replaces the current FP7 programme), but it is not recommended to build large parts of a RIS3 strategy around this because - unlike structural funds - Horizon 2020 funds are allocated on a competitive basis, and hence their availability is not under the control of the RIS3 managers. If a region of member state wishes to increase its international cooperation, it should rather consider joining structured Horizon2020 parts like ERA-Nets, Joint Technology Initiatives, EIT Knowledge and Innovation Communities, etc. as in them they have a say on the calls' content and frequency.

The answer to this question depends on each Member State's institutional and territorial architecture, as well as on the administrative level responsible for the competences on R&D and innovation. It is up to the member States to decide what suits them best, in light of their governance structures.

As far as national RIS3 are concerned, it is worth recalling that if a country plans to have a national RIS3, this is supposed to be the national research and innovation strategy and not a separate/parallel plan in addition to the national R&I strategy.

If a country opts for a national RIS3 in addition to regional strategies, national and regional RIS3 have to be coherent and complementary. This will call for a consolidation of strategies and there will certainly be a need for governance structures that monitor the implementation at both levels. The Commission's remit here corresponds specifically to exploring issues related to the quality and effectiveness of the parts implemented by the Operational Programmes.

It is strongly recommended that authorities at the most relevant territorial level (NUTS I, II or III) with respect to the decision-making process of both drafting innovation strategies and managing EU Structural Funds register as members of the S3 Platform. Any specific queries on this subject can be addressed to the S3 Platform's mailbox: jrc-ipts-s3platform@ec.europa.eu.

The RIS3 guide highlights the important role to be played by all innovation actors in the RIS3 process (see step 2 of RIS3 Guide). Science, technology and business parks are essential stakeholders to be included in the RIS3 governance framework, and their input for the prioritisation stage should be considered a key element in the process.

In addition, these parks contribute to other dimensions of the smart specialisation paradigm: their management bodies have experience in stimulating and managing flows of knowledge and information between companies, universities, entrepreneurs and technicians, and provide an environment that enhances a culture of innovation, creativity and quality. They facilitate the creation of new businesses via incubation and spin-off mechanisms, and accelerate the growth of small and medium size companies, and work in a global network that gathers many thousands of innovative companies and research institutions throughout the world, facilitating the internationalisation of their resident companies.

In addition, companies are located in parks are specialized in very specific activities of several different sectors. This is why so many times, when these companies collaborate with others, appear new products, services or technologies produced through the combination of different activities and different sectors. This process of cross-fertilization of activities and sectors (related diversity) is also one of the activities on the daily agenda of the managing bodies of the parks and they can provide many examples of how they develop.

Yes, a RIS3 needs to outline the policy mix (EU funded and other) that will be used for its implementation; mere political visions and objectives are not enough. The outlined measures should in particular be fit to stimulate private research and innovation investment, i.e. it is recommended to involve entrepreneurs in the design of individual support tools and in the concept of the overall innovation support system (which should contain not only direct financial support to specific R&I projects, but also cooperation platforms, support services, infrastructures, etc.).

There are many ways in which highly developed regions can benefit from the activities of the Platform. These include networking possibilities with other EU regions and Member States, up-to-date information about RIS3 and innovation policies in the EU, mutual learning and exchange of information and best practices, access to data and case studies, and access to the results of the Platform's research activities. For example, highly developed regions which have participated in our peer review workshops have evaluated the experience positively as they have been able to take away interesting lessons to further improve their RIS3.

In principle the use of TA under the current Structural Funds for RIS3 development activities is possible, but needs to be checked in each individual case against the text of the OP and the availability of budget. The type of expenses which are normally associated to the Platform activities are the participation to workshops (travel + accommodation) and (if needed) upgrade of webpages to include references and cross-links. Regions can also volunteer to host a workshop; in this case they take charge of organisational expenses. Also the payment of experts to help with the development of RIS3 can be considered.