Better EU funding can help Regions modernise industry & build a brighter future: The ‘Vanguard Initiative’ case study

By Carl-Albert Hjelmborn, Director of the Skåne European Office 

EU funding

The Vanguard Initiative (VI) provides an excellent example of the need for the EU to establish funding mechanisms that give Regions the resources they need to more effectively modernise business growth, innovation and knowledge sharing. Investing in new start-up companies, technologies and jobs at regional level will create a better future for Europe as a whole.

The Skåne Region has been a Vanguard Initiative (VI) member since the early days of the network. The initiative currently consists of 30 European regions. It’s aim is to stimulate Industrial Modernisation in its participating regions, mainly through the smoother and more effective deployment of new technologies and the creation of interregional value chains.

Regional research and innovation strategies for smart specialisation (RIS3) are used as a basis to connect European regions with similar strengths or needs within well-defined technology domains (pilots). In short, the VI is putting RIS3 into practice on a European level – or “leading by example” as the VI motto has it.

Structured approach using RIS3

The Vanguard Initiative has attracted a lot of attention amongst EU policy makers, perhaps predominantly for the methodology developed within the network. It consists of a structured four stage approach: learn, connect, demonstrate and commercialise.

Skåne Region, together with the Tampere Region, are leading one of the initiative’s five pilot activities. We are currently trying to connect industries in ten European regions within the nanotechnology domain by establishing a network of shared and easily accessible facilities for industry in the field.

The exercise is a kind of labour sharing on a European level, based on RIS3, aimed at giving cheaper and better access to prototyping, validating procedures, certification etc for companies, and thereby supporting the modernisation of European industries.

Breaking new ground

Using RIS3 to connect European regions and industries and establish structured, hands-on interregional cooperation means breaking new ground. It also means exploring the boundaries of the current support structures for research and innovation on a European, national and regional level, not least the European regional development fund and Horizon 2020.

A few lessons have been learnt so far, pointing at the weaknesses of the existing programmes and support structures. From our perspective, and as discussed within the VI network, the following three weaknesses appear to be the most obstructive for EU level regional cooperation initiatives of the likes of VI (based on the VI paper “VI Democases Financing Needs Note”):

  1. There are no suitable financing instruments or programmes for establishing a regional network of shared facilities on a pan-European level.
  2. The operating costs of the network of shared facilities, once it is up and running, can only partly be supported by various instruments under H2020 (Innosup, ActPhast, Fast Track to Innovation etc.) but given the uncertainty of access to these, they’re not suited in the long term.
  3. Support for upscaling and replication, crucial for taking innovations to market, remain critical and the very few new instruments, such as the EIB’s InnovFin, are insufficient in scope and application.

In other words, despite all the EU funding mechanisms and programmes, there are no real instruments that allow for investments in the setup, operation and use of shared infrastructures across European regions based on needs identified through RIS3 cooperation.

This is also highlighted in the Commission Reflection paper on Harnessing Globalisation (European Commission COM(2017) 240 of 10 May 201), which emphasises the need for investments and policies that help the businesses to innovate continuously.

The Commission specifically points to the necessity to link start-ups and innovators in EU regions so that they can collaborate with leading players and enter global value chains. Here’s where pan-European RIS3 cooperation and facility sharing could play a critical role to help Europe’s industry to modernise, but initial investments need to come from the public sector.

The need for European funding mechanisms for the modernising of industry

Based on the above conclusions and our experiences from the VI cooperation so far, we see a clear need for European funding mechanisms supporting industrial modernisation.

Europe needs to do more to boost its industries’ innovative capacity and make use of the substantial resources invested in research and innovation.  It is all about investing in the industries and workers of the future, focusing on new manufacturing technologies, as outlined in the reflection paper from the Commission.

Our proposal would be to explore the possibility to integrate an investment support mechanism within the Interreg Europe programme in the next programming period, with the aim of supporting the setting up of networks of shared facilities.

And an even more ambitious step would be to set up a European innovation and demonstration fund with the same objective.

There is no mention of such initiatives in the Commission reflection paper, but we believe both alternatives should be put on the table and envisaged in the discussions about post-2020 programmes and financial instruments.