Chapter 4 - Smart Specialization as an Innovation-Driven Strategy for Economic Diversification: Examples From Scandinavian Regions

Abstract

This chapter provides conceptual and empirical foundations for smart specialization, a policy approach of far-reaching importance in the European context. We interpret the very notion as “diversified” specialization into areas of existing or potential competitive advantage, which differentiates a region/nation from others. “Smart” relates to the identification of these areas through a process of entrepreneurial discovery, in which all actors are mobilized to be able to discover domains for securing existing and future competitiveness. Competitive advantage through smart specialization can be promoted in all types of industries but based on the industry-specific modes of innovation and knowledge bases, which is illustrated through case studies in Denmark, Sweden, and Norway. Depending on the preconditions, we find that variegated strategies of smart specialization are pursued, including building the absorptive capacity of DUI-based firms by increasing their research-based competence (introducing analytical knowledge), combining unrelated knowledge bases to move into new related and unrelated industries, combining related knowledge bases to move into unrelated industries, and moving into high value–added niches by introducing symbolic knowledge in traditional sectors.