Smart Specialisation Strategies (S3) are central to EU Cohesion Policy, guiding regional growth, innovation, and competitiveness. They emerged to address fragmented policies and regional disparities. For Ukraine, smart specialisation is the EU’s key language for regional innovation and place-based development. Understanding S3 is vital for Ukrainian regions, RDAs, and ministries to support EU accession and to use EU tools domestically.

This article is written for readers who are not S3 experts but who repeatedly encounter terms such as entrepreneurial discovery or the quadruple helix and want to understand how these concepts connect. If the text raises as many questions as it answers, it has fulfilled its purpose. Readers are encouraged to continue exploring the original EU guidance, the Smart Specialisation Community of Practice, Joint Research Centre publications, and practitioner networks such as Friends of Smart Specialisation.

Following Part 1 of the series «Smart Specialisation – Present and Future», where we reviewed the emergence of smart specialisation in EU policy and its core concepts, in Part 2 we turn to implementation experience during the 2014-2020 and 2021-2027 programming periods. Here, we draw on insights from EU practitioners and analysts. In particular, we consulted Richard Tuffs, Senior Expert at the “Friends of Smart Specialisation” group, and Dr. Jan-Philipp Kramer, Partner and Head of EU Services at Prognos AG.

In the coming third part of the series, we will have a look at the possible evolution of S3 based on the gained experience and the proposal for the 2028-2034 Multiannual Financial Framework.

The material is developed by the Swiss–Ukrainian project UCORD, in cooperation with the European Association of Development Agencies (EURADA) and the Decentralization portal. The contents of this publication are the sole responsibility of the author(s) and do not necessarily reflect the views of the Swiss Agency for Development and Cooperation, or NIRAS Sweden AB.

 

From Concept to Conditionality

With the conceptual foundation of smart specialisation in place, the turning point came when S3 moved from an idea into a funding requirement. During the 2014-2020 Cohesion Policy programming period, Member States and regions had to have a smart specialisation strategy in place as an ex ante condition for using the European Regional Development Fund (ERDF) for Thematic Objective 1: “Strengthening research, technological development and innovation.” In practice, that meant that regions seeking to invest ERDF funds in research and innovation first needed to prepare an S3-compliant strategy and submit it to the European Commission for assessment.

This requirement led to fast and widespread adoption. Member States and regions began drafting their RIS3, running entrepreneurial discovery, collecting evidence, choosing investment priorities, and putting monitoring arrangements in place – often with help from the RIS3 Guide and the S3 Platform. They then demonstrated compliance during Partnership Agreement and Operational Programme negotiations. By the end of the period, around 185 strategies with more than 1,000 priority areas had been adopted across the EU.

 

Key Lessons from the 2014-2020 and 2021-2027 cycles

The first cycle revealed how ambitious it really was. As Richard Tuffs recalls, most regions were “starting from a blank page with little experience in the suggested methodology.” The entrepreneurial discovery process was, in many places, outsourced to consultants:

 

 

“This task was often handed to consultants, which resulted in a strategy (often off the shelf) and little buy-in and commitment from politicians. Tough choices are difficult, and so often the priority sectors were too broadly designed to fit potential funding programmes.”

A risk of “box-ticking” and overly broad priorities, as Mr. Tuffs also mentions, was flagged as early as 2013 in the Working Document on Smart Specialisation by the Committee on Regional Development, and it continued to emerge as regions approached compliance with different incentives. Specifically, the 2022 Analysis of key parameters of Smart Specialisation Strategies, made by Prognos AG and CSIL for DG REGIO, notes that “a high intensity of Cohesion Policy funding” is logically (and anecdotally) associated with regions being “eager to comply with the ex-ante conditionality,” showing “engagement and commitment.” Conversely, regions with a “low level of cohesion policy funding have smaller incentives to care for the S3 conditionality.”

At the same time, the Prognos Analysis findings show that implementation quality depended heavily on governance choices: whether regions built S3 into the whole policy cycle and made it a strict criterion for selecting funded projects, rather than leaving it as a strategic document with weak operational traction. Governance capacity constraints repeatedly emerged as a decisive factor: strong institutional/administrative capabilities and leadership helped regions run a credible EDP, set an appropriate thematic focus, and manage “ambition” realistically, while weaker capacities increased the risk of overly conservative strategies.

Surprisingly, some regions with lower institutional capacity sometimes performed remarkably well in the design of S3, which “was a very interesting finding”, says Dr. Jan-Philipp Kramer, Partner, Head of EU Services at Prognos AG and the Project Manager of the above-mentioned Analysis.

 

 

“Our interpretation was that some regions with lower institutional capacity approached smart specialisation by closely following how implementation was laid out by the European Commission – particularly the process defined through the ex ante conditionality at the time. In those regions, compliance with the individual steps tended to be stronger: they took each step more seriously and applied the framework more rigidly. By contrast, some more advanced regions felt they did not necessarily need that structure because they had already been working with similar approaches before S3 became formalised. […] But when you are new to a framework, understanding it well and applying it rigorously can be a real advantage.”

The same rigor, argue the authors of Prognos Analysis, should be applied to better, more continuous monitoring. They emphasise the need to track whether entrepreneurial discovery runs through the whole policy cycle (including monitoring, evaluation, and updating), and whether funding calls truly reflect and implement stated priorities. As Dr. Kramer puts it:

“If you set up a strategy and you want to reach its objectives, you need clear targets. You need KPIs – key performance indicators – and you need a way to track whether you are moving toward them. […] This is a key element if you want to benefit from a strategy – so you are not investing money “blindly” into something you cannot measure.”

The matter of monitoring and evaluation is not only related to regional smart specialisation projects. In the 2025 Review of Smart Specialisation Strategies in the EU by the European Court of Auditors, it’s noted that “evaluations at the regional level focus on the impact of the underlying innovation investments, rather than on the smart specialisation process itself.” This demonstrates that while the emphasis is placed on practical outcomes of on-the-ground investments as a measure of success, evaluations of the impact of smart specialisation itself as a policy remain elusive.

That is not to say that S3 has not proved useful. The same ECA Review concludes, based on its survey with more than 100 regions, that “even though regions find the entrepreneurial discovery process a demanding criterion to fulfil, they consider it beneficial”. The ECA Review also notes a Committee of the Regions study which found that, in particular, the regions gained greater awareness of the need to engage stakeholders, including industry, institutions, researchers, and civil society.

And that was a lesson of high importance as further highlighted by Richard Tuffs: “The choices of smart regional priorities were supposed to be identified by an entrepreneurial discovery process bringing the regional triple helix stakeholders (regional governance, universities, research institutes, and business) together to find a compromise and develop a strategy.”

This means, continues Mr. Tuffs, that most regions focused primarily on internal priorities: “the first cycle was thus focused on an inward perspective of identifying competitive advantages in the region and making tough choices of which to select as priorities based on the supportive ecosystem such as clusters and research and innovation potential”. However, continues the expert, “developing synergies between different funding streams was, and remains, a major problem. [...] In the first cycle, there was little attention on interregional collaboration and how the selected priority areas fitted European or global value chains. For the second cycle, more attention was paid to interregional collaboration as a way of developing value chains and critical mass supported by smart specialisation thematic partnerships and the smart specialisation Community of Practice.”

Studies support Mr. Tuffs’ notion on the outward perspective. The Prognos Analysis found that designing S3 at regional/sub-regional level can help prioritisation, but only if paired with interregional coordination/collaboration to “minimise overlaps and help regions find their ‘uniqueness’”. However, while interregional collaboration is common in principle, “European regions were underusing their potential for effective interregional collaboration, leaving significant untapped opportunities” (ECA Review quoting 2023 Bertelsmann Stiftung Report).

Specifically, the Prognos Analysis mentions that there’s a great foundation for cooperation based on complementarities. It identifies many potential interregional linkages based on complementary knowledge across priority areas and shows that priorities broadly align with EU industrial ecosystems. But it also confirms that for more than 95% of these potential links, actual cooperation is low or non-existent. Where cooperation does happen, it often follows geographic or cultural proximity rather than strategic matching. Dr. Kramer clarifies how to reach the strategic complementarity:

“It is about identifying how different strengths can fit together: ‘I have strength A, I need capability B,’ and a partner brings something that is not a duplicate of what you already do. Think of it as assembling a puzzle rather than replicating the same piece.

To identify that kind of complementarity, regions can combine quantitative and qualitative sources. [...] They can look at publication data, and they can also speak directly to firms and researchers – through interviews, surveys, and other structured consultations. In practice, you need a mix of quantitative evidence and qualitative insight to make a decision. [...] “We have this, you have that, and together it creates value.” That is the vital mentality regions need to apply.”

 

Practical takeaways for Ukraine

For Ukraine, the practical takeaway from S3 implementation cycles is not to replicate S3 as a formal document, but to internalise the implementation disciplines highlighted throughout this article:

• invest in governance and political ownership, but where capacity is still being built, apply guidance with precision;
• treat monitoring and evaluation as a continuous management tool with clear targets and KPIs, not an afterthought;
• learn to shift from an exclusively inward “priority list” to an outward logic of complementarity – using interregional partnerships to connect distinct strengths into European value chains and critical mass.

The first and second cycles of smart specialisation in the EU demonstrate both the resilience and the limits of the approach. S3 succeeded in embedding a shared strategic framework across EU regions, improving policy coherence, and encouraging evidence-based priority setting. At the same time, uneven capacity, monitoring, and interregional cooperation have constrained its transformative potential. These lessons now inform a period of renewal.

As the EU enters a new Multiannual Financial Framework shaped by green and digital transitions, strategic autonomy, and enlargement, smart specialisation is once again being re-examined – not as a compliance exercise, but as a tool that must adapt to new policy objectives and geopolitical realities. Part 3 will therefore look ahead, examining how S3 is expected to evolve under the next MFF and what this means for regions preparing for the future.