Challenges with strategic placed-based innovation policy: implementation of smart specialization in Estonia and Wales

Abstract

ABSTRACT This paper examines the implementation of smart specialization in Europe and exposes challenges arising from moving towards a more strategic (directional and non-neutral), place-based, and bottom-up mode of regional innovation policy. The analysis focuses on two small European nations – Wales and Estonia – and discusses the challenges that they have experienced with designing and implementing directional and non-neutral policies of smart specialization. Through a decade of research, drawing on interviews and documentary analysis, we find that in both cases, the entrepreneurial discovery process (EDP) was not conducted as it was envisioned. Furthermore, the undertaking of smart specialization has not necessarily delivered on the promise of orienting regional policy towards a more sustainable, place-based, and bottom-up approach. This has led to a situation where local problems as well as opportunities have been overlooked and local smart specialization agendas have instead been shaped by centrally chosen broad values and directions in a top-down manner.