The RHOMOLO model has been used to evaluate the macroeconomic impact associated with the Research and Innovation (R&I) targets declared by regional and national policy makers in the context of Smart Specialisation. The positive effects on GDP materialise via productivity improvements and depend on how ambitious the regional R&I targets are.
The RHOMOLO analysis
The analysis focuses on the implementation of Smart Specialisation in Southern European regions (in Greece, Italy, Portugal, and Spain) where policy intervention in support of R&I investment is most needed due to the relatively poor innovation performance compared to their Northern counterparts of the EU.
The estimated positive macroeconomic effects of the Smart Specialisation policy in the regions under scrutiny reach a peak at the end of the Cohesion policy financial period, when the positive demand-side effects of the investments reach their maximum and the productivity improvements fully materialise according to the policy targets. Due to the high innovation content of the policy under scrutiny, the productivity effects are assumed to last beyond the end of the policy funding period, although their effects are assumed to decline gradually over time.
The importance of Smart Specialisation in a nutshell
Cohesion policy aims at promoting smart, sustainable and inclusive growth in all regions of the EU, with a particular focus on the less developed ones. EU countries and regions must formally adopt a R&I Strategy for Smart Specialisation (RIS3) in order to access funding for R&I investment through the European Regional Development Fund (ERDF), which is the main fund to support European economic development.
The ERDF budget related to Thematic Objective 1, "Strengthening research, technological development and innovation", is legally bound to finance national/regional RIS3 whose targets are explicitly written in the multiannual planning documents (the so-called Operational Programmes) elaborated by national and regional policy makers for the period 2014-2020.
- 1 Juli 2020