Abstract
In the European Union, smart specialization is an important concept in regional policy. Its primary aim is to achieve inclusive and sustainable economic growth. There is a lack of convenient region specific measures to operationalize smart specialization startegies (S3). The purpose of the paper is to find “indices of smart specialization” on a regional level. We propose indices that are based on (1) the rate of industrial diversification, (2) revealed comparative advantage and (3) regions’ overall relative specialization. In the empirical part, we analyze smart specialization in Finland using structural data provided by Statistics Finland for seventy sub-regions (LAU1) and 24 sub-industries in manufacturing. These industries are the most important for exports, productivity, and regional economic performance for a small country. The following indices are used in empirical evaluations: Herfindahl-Hirschman Index (HHI) for regional diversity, Balassa-Hoover Index (BHI) for revealed comparative advantage, and Region’s Relative Specialization Index (RRSI) for aggregate regional specialization differences. The concept of smart specialization is related to these measures. Index analyses reveal that many growing sub-regions have similar comparative advantages. This means inter-regional synergy, and it enables opportunities for strategic cooperation between regions. To develop smart specialization strategies for Europe’s regions, we need these kinds of empirical knowledge-based management tools and planning approaches.
Highlights
The European Union has a cohesion policy which underlines integrated and placebased economic convergence
We shall demonstrate the use of some regional planning and management tools, which are suitable for smart specialization (S3) analysis and management
We focus on the industries, the most important element of Quartet Helix, when analysing smart specialization strategy in the regional context
Summary
The European Union has a cohesion policy which underlines integrated and placebased economic convergence. We shall provide a new empirical tool package for the analysis of smart specialization strategy in the European Union. Measurement of these economic issues is important for the smart specialization strategy in EU-countries and EU-regions (Gianelle et al 2016). This article focuses on competitive advantage and spatial development, but we understand that all kinds of innovation activities are shaping local economies and industries. If (1) there is not much innovation and R&D activity, if (2) there are not much competitive advantages in local economies, and if (3) spatial development is not effective and economy is not delivering economic growth, welfare, and happiness, the development process is not fully based on smart specialization strategy. Our empirical approach directly supports regional and local reality checks in this respect
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