Digital Innovation Hubs: Insights from European Experience in Supporting Business Digitalization

Abstract

Digital technologies can boost regional and sectoral productivity, yet firms in Latin American and Caribbean (LAC) countries are experiencing shortfalls in digital uptake and innovation. This is partly due to a scarcity of knowledge suppliers able to respond to the region's or countries' diverse needs. Digital innovation hubs (DIHs) can offer a collaborative, location-based approach and address these gaps. This study analyzes data from over 300 DIHs in Europe, revealing that university-affiliated DIHs offer sophisticated services, such as collaborative research and testing facilities, while industry-affiliated DIHs focus on activities closer to the market, including mentoring and ecosystem building. Three case studies show that establishing a DIH is not achieved overnight but is instead a learning and improvement process; that a DIH evolves in response to regional needs and assets; and that DIHs require reliable funding for their development, particularly public financing, in their early stages. Hence, LAC policymakers should take in to account the need for a context-sensitive, context-adaptive strategy when promoting DIHs as a tool for public policy. Voucher programs and regional policies for productive development, such as smart specialization strategies, could also refine and mobilize the demand for specific digital technologies, facilitating the establishment of DIH-type initiatives.