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The simple economics of smart specialisation

The simple economics of smart specialisation. Dominique Foray Ecole Polytechnique Fédérale de Lausanne Transition economics meets new structural economics June 25, 26 2013 UCL SSEES, London. D.Foray, P.A.David, B.Hall and B.Van Ark : Smart Specialisation: the Concept .

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The simple economics of smart specialisation

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  1. The simple economics of smart specialisation Dominique Foray Ecole Polytechnique Fédérale de Lausanne Transition economicsmeets new structural economics June 25, 26 2013 UCL SSEES, London

  2. D.Foray, P.A.David, B.Hall and B.Van Ark : Smart Specialisation: the Concept Knowledge for Growth expert group for the EC

  3. A policy concept to reconciletwologics • Vertical (not horizontal) prioritization • Dynamism, entry and competition, entrepreneurship • Policy design matters

  4. Policy design • Entrepreneurial discovery& newactivities • Entrepreneurial knowledge • Discovery • Spillovers • Neithersectorsnorindividualfirms are prioritisedMid-grainedgranularity & newactivities • Structural changes • Inclusiveness

  5. Sleeping giant Transport sector Excitedgoblingshightech cluster Hungrydwarfs lowtechSMEs

  6. Sleeping giant transport Excitedgoblingshightech cluster Hungrydwarfs lowtechSMEs Sectoral level mapping Activity level priorities

  7. Sleeping giant transport Excitedgoblingshightech cluster Hungrydwarfs lowtechSMEs Sectoral level A narrow view of smart specialisation!

  8. Sectoral level mapping prioritization Activity level Modernisation of the old transport sector : integratedlogistic system Diversification of SMEs: from automotive to biomedical sector Transition of the cluster: from ICT to med-tech

  9. Policy design • Entrepreneurial discovery& newactivities • Entrepreneurial.. • ..discovery • Spillovers • Mid-grainedgranularity • Inclusiveness • Evolution • Experimental nature of the policy

  10. Goals’s relevance for different types of regions • Smart specialisation goals • Facilitatingemergence and earlygrowth of new activitiespotentiallyrich in innovation and spillovers • Diversifying the regional system through the generation of new options • Generatingcritical mass, critical networks or clusters within a diversified system • S3 providesstrategies and goals for anyregion • For followers and leaders • Inclusivenessprovides a rationale for anyregion

  11. Limousin Knowledgeeconomyconvergence New ceramics Animal genetics and breeding Allocatingscarce capital to a few domains = distorsion SMEs ToT Finance

  12. Limousin Knowledgeeconomyconvergence New ceramics Animal genetics and breeding *Innovativeprojects are complementingexisting productive assets to generate structural changes SMEs ToT Finance

  13. Weneed S3, do weneed a policy for S3? • A counter-example in Switzerland • Some times markets do not fail in structuring entrepreneurial knowledge, generating entrepreneurial discovery and facilitatingco-ordinationatearly-growth stage • Some times theyfail! • Entrepreneurial discoveries • Information externalities • Capabilities • Aligningincentives • Early-growth • Coordination • Industry-specific public goods

  14. Conclusion • S3 as part of the new generation of technologypolicy (both non neutral and competitionfriendly)

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