An innovation is generally defined as “the implementation of a new or significantly improved product, good or service; a new marketing method; or a new organisational method in business practices, workplace organisation or external relations (OECD/Eurostat, 2005)”. Sustainable growth is increasingly related to the capacity of economies – including regional ones - to support innovation, adapting to an ever changing and more competitive environment. Innovation, whether it relates to the development of new products, processes or organisational techniques, can help give economic operators a competitive edge. As such, the European Union places the fostering of innovation at the centre of its Europe 2020 strategy aimed at supporting smart, sustainable and inclusive growth; and particularly the flagship initiative of the Innovation Union.
Innovation is not only a source of growth and competitiveness, it can also act as a tool for addressing global challenges like climate change and social issues such as inequality. The role of innovation as a dual driver of growth and sustainability is recognised by the United Nations’ Sustainable Development Goals (SDGs), adopted under the 2030 Agenda for Sustainable Development. Specifically, SDG 9 seeks to build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation.
Regions play a key role in supporting innovation and implementing innovation policies. The importance of regions in innovation policy has been driven by the increased recognition that regional innovation contributes to overall national innovation performance; as well as by a shift of focus in regional development policies from supporting redistribution of wealth, to encouraging development and innovation by building on local strengths (OECD, 2011 section 1.1).
The role of regions in promoting innovation and economic development is recognised at the European-level, with the adoption of “place-based development policies”. These can be defined as “long-term development strategies aimed at promoting growth and social inclusion of specific places, by means of integrated bundles of public goods and services and institutional changes, produced by local projects based on the extraction and aggregation of people’s knowledge and preferences” (Barca, 2009). The EU's cohesion and regional policy for 2014-20 is the most recent example of the high priority given to regional innovation, given its importance among the thematic objectives of funding provided as part of the EU’s regional development ambitions. Under the 2014-2020 EU programming period 30% of the total allocations are being used for innovation in the wider sense.
The EU has provided longstanding support to the development of regional innovation capacities by means of cross-cutting policy tools and information (e.g. Regional Innovation Monitor Plus), as well as by developing methodologies aimed at facilitating the development of regional innovation policy frameworks and strategies. The European Union has sponsored such work since the mid-nineties, in the form of RITTS (Regional Innovation and Technology Transfer Strategies), RTP (Regional Technology Plans) and RIS (Regional Innovation Strategies). More recently, the EU has encouraged the development of “smart specialisation strategies” at the regional level which “set priorities in order to build competitive advantage by developing and matching research and innovation own strengths to business needs in order to address emerging opportunities and market developments in a coherent manner, while avoiding duplication and fragmentation of efforts”.