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Regional Innovation Monitor 8 March 2013 Regional Innovation Monitor Thematic Paper 6 Innovation Policy in Metropolitan Areas: addressing societal challenges in functional regions Regional Innovation Monitor Thematic Paper 6 Innovation Policy in Metropolitan Areas: addressing societal challenges in functional regions UNU-MERIT René Wintjes, Serdar Turkeli and Florian Henning In association with: Fraunhofer ISI & Technopolis Group To the European Commission Enterprise and Industry Directorate-General Directorate D – Industrial Innovation and Mobility Industries Preface The research for this report was undertaken by UNU-MERIT for Directorate-General for Enterprise and Industry in the framework of the project ‘Regional Innovation Monitor’ (Contract No. ENTR/09/32). This thematic paper is the product of a desk research. It takes into account material from the RIM baseline regional profiles; innovation measures repository as well as the regional governance and policy survey which was all developed in the framework of the RIM project. The report has been written by René Wintjes, Serdar Turkeli, and Florian Henning (UNU-MERIT, Maastricht University). RIM provides detailed information on regional innovation policies for 20 EU Member States: Austria, Belgium, Bulgaria, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, the Netherlands, Poland, Portugal, Romania, Slovakia, Spain, Sweden and the United Kingdom. The core of the RIM service is a knowledge base of information on some 200 regions. European Commission official responsible for the project is Alberto Licciardello ([email protected]). For further information about the Regional Innovation Monitor and access to the full range of information on regional innovation policies, please visit the RIM website at: http://www.rim-europa.eu Disclaimer It should be noted that the content and conclusions of this report do not necessarily represent the views of the European Commission. The report is the responsibility of the authors alone. Table of Contents Executive Summary i 1. Introduction 5 2. Characteristics of metropolitan areas in terms of governance, innovation and challenges 7 2.1 The complex governance of functional regions 7 2.2 Societal challenges and innovation (policy) challenges 13 3. Metropolitan policies to address societal challenges 22 3.1 Integrated regional and metropolitan strategies 22 3.2 Promoting social innovation and entrepreneurship 25 3.3 Smart City initiatives 28 4. Conclusions 33 Appendix A Literature 35 Appendix B Metropolitan areas selection 38 Table of Figures Figure 1 Brussels (Nuts1&2) compared to Belgium and compared to EU 27..................8 Figure 2 Munich (data for Nuts2 Oberbayern) - Compared to Germany and Compared to EU 27.............................................................................................................................9 Figure 3 Rhein Sued - compared to Germany and compared to EU 27 ........................10 Figure 4 Quality of government in London compared to UK and other regions ...........11 Figure 5 Quality of government in Prague compared to Czech Republic and other regions............................................................................................................................. 12 Figure 6 Average characteristics of the Regions (Nuts2) of the 29 largest Metropolitan Area’s in Europe, EU27=100 .......................................................................................... 14 Figure 7 GVA per head in Greater Manchester North and South.................................. 15 Figure 8 Challenges rated as important for future development of their region by respondents in metropolitan regions ............................................................................. 16 Regional Innovation Monitor Executive Summary Metropolitan areas have specific characteristics which are based on agglomeration, which has both advantages and disadvantages in terms of innovation, governance and societal issues. Because of the localised specific need and the specific capacity to provide solutions, metropolitan regions are in a sort of ‘lead-market’ situation for solutions to societal challenges. Therefore, policymakers in metropolitan areas have specific innovation policy opportunities to address specific societal challenges concerning: environment, energy, communication and transport, health and nutrition, and exclusion-related challenges. Social innovation policies are more addressed at the local level and less often at the regional level, since social innovation is very context dependent, based on local interactive processes of co-evolution and co-development between a diversity of actors. A diversity that goes beyond ‘triple helix’ partners, since also citizens and public and non-profit organisations can be involved. Governance of metropolitan areas as functional regions can be quite complex. Development of new governance mechanisms can be necessary. Next to merging of local administrative units into additional levels of administration, voluntary cooperations among local units (as in the case of Stuttgart) are important because local municipalities can discuss what the appropriate, functional level of governance is to address a specific societal challenge. Particularly strong in the innovation performance of metropolitan areas are on average: GDP per capita, share of high educated, knowledge intensive services, government R&D expenditures and patents. The strength of metropolitan areas in government research organisations is largely based on national strategy and funding (or regional in the case of high autonomy), but they are hardly the result of a local strategy. The government research institutes and the universities often are engaged in society relevant research, which makes them relevant actors in social innovation policies. Their functional area in this respect often exceeds the borders of the metropolitan area, but local social innovation initiatives can be coherent with the missions of such institutes. Actors which are particularly strong in metropolitan areas include: government research labs, public sector (for various levels) and creative industries. Within Smart Specialisation Strategies at regional level social innovation policies in metropolitan areas can play an important role, since the interaction among these local actors can strengthen the chosen specialisation trajectory at regional level; e.g. by embedding and exploiting the knowledge of the government research organisations and the creative industries into local experiments which involve public sector and citizens in addressing societal challenges with co-produced social innovations. Metropolitan areas can enhance their role as living labs in which the various local actors co-produce social innovations as solutions to local societal challenges. In this respect, metropolitan areas can function as lead-markets for social innovations. For the conventional research policies the local level is in general not the most appropriate level of governance. Regional innovation strategies are mostly concerned with the more technological and research oriented supply-side innovation policies. At a lower level, in local strategies in metropolitan regions we find more examples of demand-side innovation policy initiatives, promoting localised applications addressing local societal challenges. Regional Innovation Monitor i The conventional policy solutions to the conventional innovation policy challenge concerning the valorisation of results from science and research should be complemented by social innovation policies; e.g. incubators and entrepreneurship policies in metropolitan areas should also include support to start-ups based on social innovations developed by social entrepreneurs. Concerning innovation in the public sector we can conclude that the solutions not always come from more R&D or new technologies, but it also calls for social innovation initiatives. ii Regional Innovation Monitor 1. Introduction This thematic paper addresses innovation policy concepts and practices to address societal challenges in large metropolitan areas in Europe. Many social innovation initiatives originate in metropolitan areas and this seems related to certain characteristics of metropolitan areas. The core characteristics are based on agglomeration, which has certain advantages. In the past, the attention has been paid mostly to the advantages of agglomeration. Cohesion policy was for instance mostly oriented to address the challenges in the “less-favoured” peripheral regions, but agglomeration also has disadvantages, e.g. concentrated societal problems such as traffic jams and air pollution. For research and innovation activities in general, the agglomeration advantages remain quite strong, so many regions which host a metropolitan area have a higher level of RTDI performance than most other regions in the same country. We will identify some of these RTDI characteristics (performance and policy challenges) of metropolitan areas in the EU. Also in terms of governance these largest cities are often in a particular position, which is related to a central position of the core city as a functional region in the hierarchy with other regions in the country. Some metropolitan areas are governed by many local administrative units, others have special autonomy, e.g. London and Prague. Metropolitan areas have large public government sectors, because often they also host the regional and national governments. On the other hand, there are also
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