Innovation and specialization: too smart too soon?

For any industry I can think of, specialization is a pretty unquestioned means for differentiating. Put simply, innovation management is basically about what an organization does or can do to generate an “unfair advantage” based on knowledge. When successful, this advancement lets the company deliver more value to the market and in turn capture more value from it, thus increasing its bargaining power. And this value will mostly come from changes based on specialization at different levels. In the process, disrupting routines and implementing specialization will likely trigger some conflicts among different areas within the company. Also the undertaken efforts will differ across different organizations’ cultures and resources, but it would seem difficult to find a single enterprise disregarding the idea of specialization in itself.

However, if we change focus and move from companies to regional innovation ecosystems this solid shared view on specialization fades.  At least in my experience with immature ecosystems, not all actors will precisely show enthusiasm for the specialization idea to the point where key incumbents find it perfectly legitimate to state their aim is to mimic what other ecosystems are doing.

Specialization is demanding because it makes weaknesses evident and pushes the capabilities of local stakeholders towards new technologies and skills. It will no doubt alter the frequently complex equilibriums in the governance of the local set of players with dissimilar interests. I personally think it’s great news if it does, because that is precisely what territorial innovation should be about in spite of comfort (

In mature systems with an open innovation culture in place the right dynamics will materialize and realign actors towards a new common vision where all find winning scenarios. But in early stage (no matter how old) systems their governance, vision and leadership are not sufficiently developed. So when the challenges of specialization make some stakeholders feel threatened the rest will probably indulge for the sake of cohesion and formality. At the end of the day, specialization is a sexy prospect but stakeholders are your roommates.

In this context a genuinely European approach came to being: the regional innovation smart specialization strategies, RIS3

The rationale behind them is to build upon each region’s comparative and competitive strengths and thus exploit opportunities and emerging trends to achieve steady economic growth. RIS3 Agendas are to be designed following a very thorough methodology that provides itself innovative elements, like the Entrepreneurial Discovery Process approach:

I think RIS3 have introduced very interesting conceptual elements in the European innovation landscape from which practical outcomes are yet to be materialized. More than 150 European regions have conducted a challenging strategic reflection based on a common ground. This seems an excellent platform for efficiently allocating public (and private) funding for innovation, but will it be so?

Here are some questions I consider worth paying attention to in the coming months:

. Will RIS3 be effective in spurring inclusive, sustainable and smart growth? How can the attribution of results to RIS3 be measured?

. Who and how will ensure alignment and coordination of RIS3, H2020 and ESIF?

. What are the incentives put in place at supra regional level so that regions with identified RIS3 complementarities find it productive and easy to cooperate?

. In immature ecosystems such as the ones described before, how can a genuine Entrepreneurial Discovery Process of independent, distant to power, stakeholders be guaranteed?

I think this last point is key to make a true difference with respect to strategic attempts in the past. I will be writing more on innovation ecosystems and power in my next post.

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