Small and medium sized enterprises largely fall behind other players in innovation and investments in research & development (R&D). Thanks to the Interreg project GoSmart BSR, enterprises in seven countries around the Baltic Sea learned how to use smart specialisation to improve competitiveness jointly and gain access to new markets.
Collaboration across the borders for a better regional innovation plan
Smart specialisation has become one of the most discussed topics of recent years among different kind of stakeholders. It enables regions to identify and develop their unique competitive advantages. Smart specialisation approaches and strategies (S3) spread rapidly across Europe and the Baltic Sea region as they infuse innovation through practical partnerships among business, research and authorities. In the north-western Baltic Sea region, this process stems from high demand for innovation and competitive strengths, whereas in the south-east of the region, the idea is still nascent and ‘pushed’ by the EU. The long-term challenge is to strengthen emergent European and macro-regional systems of innovation, and thus to support the regions in all parts of Europe.
What innovation challenges do SMEs have to face?
The most critical group among those implementing smart specialisation strategies are small and medium sized enterprises (SMEs). They largely fall behind other categories of economic players in terms of innovation activities and investment in R&D. While about 48% of innovative large enterprises in the EU undertook in-house R&D in 2014 to 2016, only 18.8% of EU-28 SMEs did so, according to this recent European Commission’s report.
SMEs struggle to become more competitive due to the fact they operate on a smaller scale and hold limited financial resources. However, the development and improvement of innovation strategies for SMEs is crucial for the economic resilience of the regions and countries.
Coming together to make the change
The Interreg project GoSmart BSR has helped enterprises in seven countries to go – smartly – beyond borders and to enter new markets. By a bold name of internationalisation, enterprises and regions win on increased innovation and competitiveness. The project primarily developed two tools to support this process: Transnational Smart Specialisation Strategy (Trans-S3) as well as the Transnational Innovation Brokerage System (TIBS).
The Transnational Smart Specialisation Strategy (Trans-S3) methodology is a new tool for building more knowledge-based and more competitive economies. It was developed for the seven project pilot regions in Denmark, Estonia, Finland, Germany, Latvia, Lithuania and Poland. Trans-S3 methodology allows transitioning from the concept of one competitive region to the concept of a competitive group of regions, guiding them towards a strong position in global value networks. It helps regions to identify their common smart specialisation priorities and specific economic domains with high internationalisation potential (e.g. agro-food, Information and communications technology infrastructure, digitalisation, transport and logistics).
The TIBS system connects entrepreneurs through tailor-made consulting services on innovation and international cooperation. It guides them step by step, from the very first idea to establishing a solid partnership with international innovators, opening new business opportunities. Around 1000 SMEs were addressed to initiate interregional cooperation networks that would help them into meeting their individual business needs. For example, a Polish company producing premium class medical was partnered with a Latvian producer of textile-haberdashery goods to deliver a three colour trim ecological product complying with medical standards.
“With GoSmart BSR we are increasingly working together and implementing the smart specialisation strategies, not just exchanging good practices. This project has already been a very innovative, ambitious and advanced example which has laid an excellent foundation and basis on which we can build as we’re moving on to the new programme period,” emphasizes Esa Kokkonen, Policy Area Coordinator Innovation of the EU Strategy for the Baltic Sea Region (EUSBSR) and Director of the Baltic Institute of Finland (watch the video).
The value of the Transnational Innovation Brokerage System
The company “Design Elevator” Ltd from the Vidzeme region in Latvia, used the innovation broker to jointly analyse target audience of their product, most important sales channels, and prepare information for foreign partners. Now, the company is about to launch a new product – Design Thinking Toolkit – a set of cards with guidelines to apply Design Thinking in businesses and personal projects. “When we have a partner with whom we can work long term, in terms of support and providing the feedback, forcing us to reflect on what we’re doing, that brings a tremendous amount of value,” says the founder of “Design Elevator” Charles Bušmanis (watch the video).
Design Elevator is one of four companies which profited from services developed by GoSmart BSR in Vidzeme, Latvia. Summarising the results of the first and the second pilot cycles, as many as 41 SMEs from Estonia, Finland, Germany, Latvia, Lithuania and Poland made use of TIBS services.
In very pragmatic ways, GoSmart BSR cuts to the very fabric of shared challenges and expands into all levels of transnational cooperation such as joint planning, joint binding decisions, lasting partnership structures around new functions (e.g. TIBS and Trans-S3). Working together on piloting, testing and assessments is at the core of GoSmart BSR project.
Currently, the project continues its activities in the extension stage project GoSmart&Excel BSR. The focus is placed on advancing the practical use of Trans-S3 methodology and TIBS even further in the region to tackle the common challenge of limited innovativeness and internationalisation among local SMEs.
Article by Marta Riekstiņa, Vidzeme Planning Region, with support of Luca Arfini, Interreg Reporter, Managing Authority/Joint Secretariat of Interreg Baltic Sea Region