The Global Financial Crisis
It is six years ago now, since the global financial crises hit us. It is considered by many economists the worst financial crisis since the Great Depression of the 1930s and it resulted in the collapse of large financial institutions, the bailout of banks by national governments, and downturns in stock markets around the world. Then it hit the real economy. The crisis played a significant role in the failure of thousands of businesses, declines in consumer wealth estimated in trillions of euros, and a downturn in economic activity leading to a global recession and contributing to the European sovereign-debt crisis.
As of now, no one really knows how long the recession will continue, and the ultimate damage it will do to global economies. In Europe, Portugal, Ireland, Italy, Greece and Spain have huge debt-GDP ratios and unsustainably huge fiscal deficits. The crises did not hit the emerging markets as hard as it hit the advanced economies, and as a result, the hegemony of the the advanced economies in the world is shaken and the emerging economies have strengthened their competitiveness.
European Union strategy to mobilize competitiveness
To recover from the economic downturn, the European Union (EU) decided on a strategy to bounce back through developing smart, sustainable and inclusive growth. This requires a comprehensive European innovation strategy and the focus is on investing in research, innovation and entrepreneurship in every EU Member State and region, so as to fully exploit the European common economy´s potential.
Right now, the European Commission requires national and regional authorities across Europe to draw up research and innovation strategies for smart specialisation, so that the EU’s Structural Funds can be used more efficiently to create a foundation for renewed economic growth and so synergies between different EU, national and regional policies, as well as public and private investments, can be enhanced. Governments and regional development agencies are right now working on creating and mobilising such strategies, although it is not yet so well known to the public.
Smart specialisation means identifying the unique characteristics and assets of each country and region, highlighting each region’s competitive advantages, and rallying regional stakeholders and resources around an excellence-driven vision of their future.
It also means strengthening regional innovation systems, maximising knowledge flows and spreading the benefits of innovation throughout the entire regional economy. Smart specialisation is essential for truly effective research and innovation investments. In the European Commission’s cohesion policy in 2014-2020 it is a precondition for using the European Regional Development Fund (ERDF) to support such investments.
National/Regional Research and Innovation Strategies for Smart Specialisation (RIS3 strategies) are integrated, place-based economic transformation agendas that are intended to do five important things:
They focus policy support and investments on key national/regional priorities, challenges and needs for knowledge-based development.
They build on each country/region’s strengths, competitive advantages and potential for excellence.
They support technological as well as practice-based innovation and aim to stimulate private sector investment.
They get stakeholders fully involved and encourage innovation and experimentation.
They are evidence-based and include sound monitoring and evaluation systems
For more in depth information about RIS3, you can read this article that we published in November 2012.
Tomorrow I will give you some concrete examples, by publishing an article about our work with the implementation of RIS3 in the East Sweden Region, Östergötland.