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Smart specialisation: why is it the time for cities to act now? Experiences from Bilbao and Basque country

19 April 2016

The Basque Country is celebrating now the 25th anniversary of the Basque cluster policy. According to Michael Porter, it was the first region in the world in applying massively the cluster concept to its industrial policy. Interestingly, this year is also the 25th anniversary of Porter´s Competitive Advantage of Nations, one of the most influential essays on the linkage between places and competitiveness.

Infocus logo

Eva Salcedo and Oihana Eizmendi work in Bilbao Ekintza, the local development agency for the Basque capital, and they are the coordinators of the URBACT network on smart specialisation at city level, which is called IN FOCUS. Both met in Bilbao with Miguel Rivas (lead expert for this project) on the occasion of that celebration, the Basque Cluster Day, and took the opportunity to discuss on the motivation and scope of the new URBACT network.

A first reflection was about the meaning of smart specialisation, and we all immediately agreed it is not a new concept at all, since it deals with sector prioritisation in local economic development, and subsequent stakeholder alignment around those priorities. Moreover, it has much to do with the old issue of “public choice” in public policies, as opposite to the lack of impact of the “coffee-for-all” type of deliveries.

However, the concept has recently reached great popularity because of the so-called Research and Innovation Strategies for Smart Specialisation (RIS3), a method delivered by the European Commission as ex-ante condition for all the EU regions to access the Structural Funds in the current programming period 2014-2020. In this context, a performance shortage has rapidly emerged on this issue at the level of urban economies. It deals with the articulation of smart specialisation strategies at regional level to those cities within the region with a background and relevant specialisation strategies underway. At a large extent it is a matter of multi-level governance, rising up specific questions such as: is RIS3 methodology applicable to the city? What is the right distribution of roles between entities at regional level and entities at the level of main cities?

Honouring its reputation in cluster policies, Basque Country´ smart specialisation strategy has been recognized by the European Commission as a RIS3 benchmark. Nonetheless, the three main Basque cities - Bilbao, San Sebastian and Vitoria- each of them with very different economic profiles, have barely participated in that planning process. Many other core cities across Europe, from Silesia to Andalusia, have experienced that lack of voice. This issue is like an “elephant in the room” in all the meetings and guidelines related to RIS3. According to Eva Salcedo, Head of Business Promotion at Bilbao Ekintza, “generally speaking there is much room for improvement in the regional-local articulation, and in particular the RIS3 strategy is a great opportunity for it”. This is certainly a significant gap, given the main role big cities play in today´s global competition.

Anyhow, this somewhat lack of effective city-region articulation makes little sense, since the RIS3 method is very close to integrated urban development approach. For instance, RIS3 roadmaps to move the selected priorities forward are configured as “policy mix”. In fact, what makes a strategy smart is its planning process itself. In RIS3 jargon this is called the “entrepreneurial process of discovery”, which is basically a triple helix type of participatory format with an aim to push sectoral silos, of any kind, down.

Nevertheless, the IN FOCUS roadmap will not only aim to transfer the RIS3 method down to  local level, or better articulate the local economic development strategies with RIS3 at regional level. The project will also trace a specific city roadmap to smart specialisation, as a powerful and overarching approach to properly assemble a number of key concepts and trends in local economic development, such as cluster-based segmentations of course, entrepreneurship and talent management, business related facilities and new industrial space, and branding & marketing the city as business location.

On these topics, the Basque capital offers cutting-edge developments. Bilbao is a world-class reference in urban revitalisation as many already know, whose success must be explained beyond the Guggenheim effect. Sure, the Guggenheim building and museum played an engine or catalyst role, which opened the path to other major revitalisation works and physical milestones, e.g. Nervión riverfront redevelopment, construction of the subway, iconic Isozaki towers, former oil and wine storage Alhondiga by Philippe Starck. But, as Oihana Eizmendi claims, a set of other soft initiatives equally contributed, and still do, to Bilbao´s renaissance, following the Basque common assumption that a good industrial policy is the best way to lead to social wellbeing.

Thus, besides the above-mentioned tradition in effective cluster policies and sector prioritisation, Bilbao Ekintza is hardly working on boosting the start-up local scene, as well as providing new urban workplaces by refurbishing and giving new life to disused buildings through Bilbao Auzo Factory initiative. Bilbao city and province are jointly displaying the integrated communication strategy Bilbao Bizkaia Be Basque, and Bilbao Ekintza is currently building up a specific branding and marketing strategy for the city as business location.

Summarizing, and in Eva Salcedo´s words, “after 25 years at the forefront in cluster-based industrial policy and economic development, Bilbao and the Basque Country aim to play a pioneering role again, this time in relation to the smart specialisation concept and how it applies to cities, and want to do this in collaboration with other cities with the same ambition”.

For this journey, Bilbao, along with the cities of the initial partnership of the In Focus network (Turin, Oporto, Bucharest and Plasencia) want to have on board cities with background in cluster-based economic development, wishing to deepen into the concept of smart specialisation and bridge with their RIS3 strategies at regional level. But also cities with no significant experience on this, yet with a clear determination to move forward in this field. As matter of fact, the project is about cities wanting to bring together the ultimate approaches in business-led local economic development into new fresh and efficient supporting and catalysing schemes, much better adapted to the current times.

As far as we get a relevant partnership for peer-learning, we might easily be able to bridge with other relevant entities and forums working on this matter, just in order to enrich and expand our own outputs and results. In this sense, we as IN FOCUS have initiated a dialogue with the Eurocities Forum on Economic Development and the Smart Specialisation Platform created by the European Commission to give support to EU countries and regions for the design of their RIS3 strategies.

 

Miguel Rivas

Grupo TASO, Lead Expert for IN FOCUS

mrivas@grupotaso.com