The combined effects of rapid technological change, digitalization, climate change, circular economy, and new forms of work, call for innovative ideas to ensure that countries and regions not only adapt to change, but are also at the forefront of mastering and driving this change. A lot of effort has been put in place at the European level to stimulate innovation – with Smart Specialisation Strategies (S3) and Horizon 2020 programme being the prime examples of this. A larger volume of investment is dedicated to innovation at the national level. Nevertheless, this massive investment in innovation does not bring about the expected productivity growth¹ .One of the key reasons for this, lately cited by researchers and, amongst other organisations, the OECD², is the failing knowledge and innovation diffusion mechanisms.

In order for companies to be able to acquire and adopt latest technologies, work organisation and management practices, access to appropriately skilled and qualified labour is essential. It also requires recognising that process, product and social innovation can be equally if not more powerful than technological innovation. Furthermore, SMEs and traditional industries are vital for sustainability in towns and cities outside the main metropolitan centres and neglecting them can exacerbate phenomena of discontent. Recent years has witnessed growing regional disparities across and within member states creating “places left behind” accompanied by social-cultural and political fissures across developed economies – such as, for example, Brexit. Still most of the existing literature and S3 policies focus most on the “upstream” activities of the innovation ecosystems – supply side and knowledge creation angle, largely missing the “downstream” activities of innovation diffusion and adoption.

Emphasis and Omissions in RIS3 Policies and Literature³

Smart Specialisation is about regional economic transformation. Going beyond research-oriented and technology-based activities, education and training – and in particular VET, can play a critical role supporting the absorptive capacity. Existing good practices in a number of EU regions show that a Vocational Education and Training (VET) system, which is well integrated into local innovation ecosystems and economic development strategies, can provide a significant contribution towards economic modernisation and industrial transformation.

However, in most regions in the EU the links between VET and the broader innovation and economic transformation initiatives are still lacking. This is why the Commission has also launched an initiative to support the development of Centres of Vocational Excellence – VET institutions, which are an integral part of skills ecosystems, contributing to regional development, innovation and Smart Specialisation Strategies. They also play an important role in knowledge triangles, working closely and proactively with other education and training institutions, the scientific community and business, enabling learners to acquire the necessary skills, as well as supporting businesses, particularly SMEs, towards adopting and deploying the latest technological and non-technological innovations.