Where the governance and funding functions are integrated within the same government department there is a much greater risk that the S3 project selection process will be subjected to political pressures from within or captured by dominant interest groups from without. The project selection process needs to be - and also needs to be seen to be - transparent, fair and robust.
To retain the trust and credibility of regional stakeholders, the S3 governance and funding systems need to be separated and rendered accountable to different departments. Moreover, the S3 implementation needs to be effective as well as accountable – it must not be forgotten, in other words, that good governance is a means to an end and not an end in itself.
The Welsh Government in the UK has gone to great lengths to ensure a clear and credible division of labour in the governance and funding of its S3. The Department for Economy, Science and Transport is responsible for managing the design and delivery of S3 projects and, to ensure this process is transparent, inclusive and robust, the department created a wholly new Innovation Advisory Council for Wales in 2014, composed of senior representatives from the “Triple Helix” of government, business and higher education. One of the key roles of the Council is to provide independent oversight of the implementation of S3 in Wales. This governance function is wholly separate from the funding function, located in the Wales European Funding Office, which reports to the Finance Minister. Although clarity and transparency are assured in such a division of labour, the fact remains that this arrangement can also create coordination challenges and institutional tensions and these problems need to be openly acknowledged if they are to be properly addressed.
See the webpage of the Innovation Advisory Council for Wales (in English)
S3 governance, communication, public sector role