Recovery perspectives and “smart specialization” in the Baltic States

In modern national development paradigm there are two main components: recovery and resilience; however, “smart specialisation” also helps to catch-up with the competitive European and global markets. Therefore these smart strategies serve as a vital element in national recovery and resilient plans towards socio-economic modernisation. Examples from the three Baltic States reveal similar and specific aspects of science and research’s role in national perspective strategies. 

The EU member states have been obliged to prepare and present their national recovery and resilience plans (RRPs) to the Commission during 2021. Besides, modern national governance is facing another vital and new double-transformation’s challenge dealing with the digital and green transitions in growth patterns. For example, in green transition the states need to anticipate additional actions in order to meet Union’s ambitious target of carbon neutrality by 2050. In this regard, the Commission suggested a certification framework for carbon removals, to boost the states’ sustainable growth patterns. In order to deliver on the EU’s zero pollution action plan, the states have to intensify measures in tackling surface and groundwater pollution as well as ambient air quality starting from 2022.
In the digital transition, the states have to accelerate the use of digital solutions for business and education as the process has already visualized some shortcomings: e.g. the states have to accelerate production of chips in fostering innovation in semi-conductors to prevent current supply shortages. Besides, the Commission has suggested for 2022 a package of digital transition measures concerning digitalisation in schools, in higher education institutions, as well as new measures in multimodal digital mobility services; e.g. strong digital skills will be vital for SME’s progress.
The Commission requires that national RRPs shall dedicate at least 37% of the budget to support climate objectives and green transition, and 20% to the digital transition.
More on RRPs in: https://www.integrin.dk/2021/04/22/the-eu-states-are-determined-to-formulate-their-recovery-and-resilience-plans-rrps/

Combining “smart specialization” and recovery
The general rules for presenting national RRPs are the following: the ways to achieve recovery, and the ways to enhance resilience (both in referring to the common EU policy guidelines) and in accordance to six main pillars: – green transition, – digital transformation, – smart, sustainable and inclusive growth (including economic cohesion, jobs, productivity, competitiveness, research, development and innovation with strong SMEs; – social and territorial cohesion; – health and socio-economic institutional resilience (with the aim of, inter alia, increasing crisis preparedness and crisis response capacity); and – the next generation’s policies for children and youth through e.g. education and skills.
As is seen, smart growth concept has become an integral part of national recovery and resilience plans, which makes 3S an important part of states’ perspective development.
More information on RRPs in the following websites: – Recovery and Resilience Facility: Questions and Answers; – Factsheet on the Recovery and Resilience Facility; – Recovery and Resilience Facility: Grants allocation.
The national RRPs have been approved by the Commission for financial support during 2021. Source: https://ec.europa.eu/info/sites/default/files/economy-finance/rrf-factsheet.pdf
For example, Lithuanian RRP at: https://ec.europa.eu/info/files/factsheet-lithuanias-recovery-and-resilience-plan_en; and https://ec.europa.eu/info/sites/default/files/com-2021-386-lithuania_factsheet_en.pdf . Latvian RRP at: https://ec.europa.eu/info/business-economy-euro/recovery-coronavirus/recovery-and-resilience-facility/latvias-recovery-and-resilience-plan_en. And Estonian RRP at: https://ec.europa.eu/info/business-economy-euro/recovery-coronavirus/recovery-and-resilience-facility/estonias-recovery-and-resilience-plan_en.

Although the ideas of the so-called “smart growth” and states’ “specialization” occurred about a decade ago, its importance in both new approaches to national development and the states’ specific places in the EU socio-economic integration are still necessary and vital.
From its inception, the ideas of smart specialisation strategies (3S) have been been regarded as a quite perspective and resolute approach to perspective European integration: the EU institutions (through the EU Cohesion Policy) aimed at boosting innovation-driven growth through the use of “smart specialisation” strategies; mainly, two Commissioners were involved – one for industry and entrepreneurship, and another one for research, science and innovation.
Over a hundred new 3S have been introduced in EU-27 so far with huge support from the EU Structural and Investment Funds and national/regional financing. For example, during only one year (2020) about 15 thousand new products have been released to the EU’s market, some 140 thousand new SMEs created and over 350 thousand new jobs. That means the national political economy will survive and flourish only if the markets are oriented to smart, specific and competitive goods/services produced in all EU member states.
Reference to: https://ec.europa.eu/regional_policy/sources/docgener/guides/smart_spec/strength_innov_regions_en.pdf

3S strategy: past and present
At the end of 2017, the Commissioner for regional/cohesion policy introduced five new steps which the member state should implement in national 3S approaches; these steps included: embracing innovation, increasing digitalisation, reducing pollution (so-called decarbonisation process), developing new skills, and breaking down barriers to investment.
More active 3S approach has appeared in all EU regional policy programs improving the ways regions designed their innovation strategies by closely involving local businesses and researchers: over 120 3S used over €67 billion from the European Structural and Investment Funds.
Note. Examples on “smart specialisation in action” can be seen in:
http://ec.europa.eu/regional_policy/sources/docgener/guides/smart_spec/strength_innov_regions_en.pdf.

About the S3 Platform and the strategy’s implementation in such spheres as good practices, strategy formation and policy-making, mutual learning and access to relevant data, as well as in policy-making, education and training, see: http://s3platform.jrc.ec.europa.eu/home

Specific attention in the EU’s 3S is given to developing regional smart specialisation strategies (R3S), which are aimed at making innovations as the driving force for growth in all EU regions. The R3S, associated with the support from the European Structural and Investment Funds, stimulated private investment for sustainable growth.
See: national/regional innovation strategies for smart specialisation factsheet.

There are some vital elements in the 3S concept: thus, “smart” growth means that the states have to explore mainly innovative approaches to development based on the outcomes of the 4th technological revolution.
More in: https://www.weforum.org/focus/fourth-industrial-revolution

Then, “specialisation” means that the states are using available resources (natural, human, etc.) in achieving competitive advantages in Europe and globally according to their priorities.
While the “strategic” aspect in 3S means defining the best perspective vision for any state/region in the long-term perspective. It is important to note that a uniting factor in 3S is a strategic economic growth in any state shall be achieved –generally – through support from science, research and innovation.
More on science role in the Baltic States in: Sparitis O. and Eteris E. Modern European science policy: challenges and opportunities for Latvian perspective growth. – SIA Medicinas Publish. 2019. – 124 pp.

It is vital to mention that the 3S’ key principles include e.g. assessment of available resource and specific socio-economic priorities for specific types of development and growth as “specialisation” means focusing on competitive strengths and realistic growth potentials supported by a critical mass of activity and entrepreneurial resources. National 3S should embrace a broad view of innovation and practical technological support; all of it would be available from the scientific community.
References to the EU Joint Research Center’s document at: https://s3platform.jrc.ec.europa.eu/documents/portlet_file_entry/20125/S3-Key-Elements.pdf/23a14b4c-f871-9a77-7e93-0b19e4b910f1

Science, research and innovation in 3S
During the whole 3S process, the research and innovation (R&I) has been regarded as a driving force in successful implementation in the states: thus, present Horizon Europe, the EU’s €95 billion research and innovation program for 2021-27 represent a good R&I impetus to growth.
For example, the first Horizon Europe grant agreements will take place already in the fall of 2021 with the new calls for the interested partners.
The EU research Commissioners several times underlined the importance of valuable and mutually beneficial R&I cooperation between the states and EU institutions within the European single market.
However, in the EU strategic plan for 2020-24 there isn’t e single word about 3S; though in one of the six “broad political goals”, i.e. lobs and economy there are some hints to increased production. But this goal is to be treated carefully: “we need to rethink the way we produce and consume”, acknowledges the strategy’s website.
In the new EU’s concept of “industry 5.0” industry’s role is recognized in “achieving societal goals” and a “resilient provider of prosperity”
For example, R&I can help the states “to move quicker to circular economy” with lower negative effect of using natural resources and minimal waste. Besides, R&I will make industry greener while reducing poverty, inequality and protecting environment.
However, by acknowledging the EU’s role in supporting growth, creating quality jobs (specifically for young people and SMEs), creating “new home-grown businesses” and making the member states an attractive place for businesses and investment, the strategy doesn’t show the concrete ways to implement the goals. In that sense, there is no doubt that 3S approach is really missing in national growth strategies.
Source: https://ec.europa.eu/info/research-and-innovation/strategy/strategy-2020-2024_en

The 3S aspects in the Baltic States
During last five years, the three Baltic States have seen some common and specific approaches to “smart specializations”. For example, Estonian 3S approach includes six priority’s items: e-health; bio-technology (incl. healthy food, medicine, diagnostics, therapy and bio-banking); ICT industry and robotics; other ICT’s applications (incl. cybersecurity, e-governance and “big data”); materials technology, and rational use of natural resources.
Hence, Latvian 3S approach seems rather different and is concentrated on six items: knowledge intensive bio-economy; bio-medicine and medical technologies; smart materials, technology and engineering; advanced ICT; and smart energy;
Finally, 3S in Lithuania is slightly different including: agricultural innovations and food technologies; sustainable energy; new materials, production processes and technologies; health- and bio-technologies; transport, logistics and ICT; inclusive and creative society.
There are some common denominators in all three countries’ 3S priorities, which could summarized in the following way: a) several priorities are in line with the EU’s recovery and resilience requirements (ICT and digital issues, bio-economy and smart/sustainable energy); b) some priorities can serve as a background for sub-regional cooperation, like health and bio-technologies).
Notes: more on 3S composition in the EU’s sub-regional integration in:
Eteris E. EU’s macro-regional cooperation: smart specialisation approach. In:
http://www.baltic-course.com/eng2/modern_eu/?doc=154109
General web-links for further information: Commission’s website on 3S platform: https://s3platform.jrc.ec.europa.eu/s3-platform; on the EUSBSR in: https://s3platform.jrc.ec.europa.eu/s3-in-baltic-sea-region; on energy issues in: https://www.baltictimes.com/the_fate_of_natural_gas_in_the_european_green_deal/

One of the best ways in 3S is to concentrate on most promising export items for the Baltic States. There are two main EU’s registered and protected products’ names: e.g. protected destination of origin, PDO and protected geographical indication, PGI. E.g. exports of PGIs represent over 15 percent of total EU agro-food exports.
Wines remained the most important product both in terms of total sales value (51%) and extra-EU trade share (50%); the US, China and Singapore are the EU’s GI products main destinations accounting for half of their export value. Launched in April 2019, the European public database “eAmbrosia-EU Geographical Indications registers” includes geographical indications (GI) for agro-food products, wine and spirit drinks registered and protected in the EU.
Source: https://ec.europa.eu/info/news/geographical-indications-food-wine-and-spirit-drinks-now-available-new-public-database-2020-jan-10_en

Note: In order to acquire PDO or PGI, the states needs serious efforts; so far there are the following examples among the Baltic States (in food sector registered during last 5 years): Kaimiškas Jovarų alus and two cheeses -Džiugas Cheese and Liliputas (LT), Rucavas baltais sviests, Jāņu siers, Carnikavas nēģi and Latvijas lielie pelēkie zirņi cerials (LV).
More in: https://ec.europa.eu/info/food-farming-fisheries/food-safety-and-quality/certification/quality-labels/geographical-indications-register/

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