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. In Ukraine, these challenges remain highly relevant. However, despite the requirement to use S3 in regional development strategies based on methodical recommendations, smart specialisation has not yet been widely adopted within the country's governance framework. Thus, 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, which reviewed the emergence of smart specialisation in EU policy and its core concepts, and Part 2, which turned to implementation experience during the 2014-2020 and 2021-2027 programming periods, we glance at the possible future of S3 in the EU. Here, we consulted Richard Tuffs, Senior Expert at the “Friends of Smart Specialisation” group, and Francesco Molica, Director of the European Association of Development Agencies (EURADA).

The 2028-2034 MFF Proposal

In July 2025, the European Commission presented its proposal for the 2028-2034 Multiannual Financial Framework (MFF) – an “almost €2 trillion” package that emphasises simplified programmes, stronger alignment with EU priorities, National and Regional Partnership Plans, and a competitiveness boost to scale innovation and lead in clean and smart technologies. It particularly presents such key features:

• More flexibility across the budget, so Europe has the capacity to act – and react – fast when circumstances change unexpectedly or when new policy priorities need to be addressed;
• Simpler, more streamlined and harmonised EU financial programmes, so that citizens and companies can easily find and access funding opportunities;
• A budget tailored to local needs, with National and Regional Partnership Plans for investments and reforms, for targeted impact where it matters most, and ensuring a faster and more flexible support for more economic, social, and territorial cohesion across our Union;
• A powerful competitiveness boost, for Europe to secure supply chains, scale-up innovation, and lead the global race for clean and smart technology; 
• A balanced package of new own resources that ensures adequate revenues for our priorities while minimising pressure on national public finances.

This overall direction reflects a broader repositioning of EU economic strategy to embed competitiveness and industrial policy objectives into budget governance and national programming cycles, drawing on the New European Innovation Agenda’s push for Europe to lead in deep tech and strengthen conditions for startups and scale-ups, Mario Draghi’s 2024 priorities – closing the innovation gap in advanced technologies, aligning decarbonisation with growth, and strengthening economic security by reducing dependencies, and the Commission’s 2025 Competitiveness Compass which, building on the Draghi report, “provides a strategic framework to drive the Commission’ work for the next five years”.

In this context, the Commission’s proposed MFF structure can be read as an attempt to hardwire competitiveness and industrial policy objectives into budget governance and national programming cycles. This has brought uncertainty and a certain tension with S3 as it has historically been most effective precisely because it is decentralised, discovery-driven, and tailored to territorial assets – where regions are not merely delivery units, but strategic agents.

A Thematic Enabling Condition No More?

In the current 2021-2027 cohesion policy framework, S3 is not just encouraged; it is structurally embedded. Smart specialisation is a thematic enabling condition for major innovation-related spending under the European Regional Development Fund (ERDF).

 

 

The key concern now is that the post-2027 proposal could remove the explicit requirement, leaving adoption to the discretion of Member States. As Francesco Molica, Director of the European Association of Development Agencies (EURADA), warns: “In the new proposal, there is no longer a requirement to have smart specialization strategies in place. This will be left at the discretion of Member States.”

So, if S3 is optional, some Member States may maintain robust S3 ecosystems, while others may centralise programming in national plans with weaker regional discovery mechanisms. Also, EURADA warns in its 2025 policy paper, “there is a risk of a drift toward place-neutral investment – favouring projects with high aggregate EU impact but not necessarily balanced regional innovation growth.” Overall, S3 should be recognised as a core tool not only for cohesion policy but across competitiveness initiatives, while being better aligned with EU-level priorities and instruments.

How should S3 change to reflect the current challenges and agenda?

 

 

“This stronger top-down approach [of the proposed 2028-2034 MFF] will mean that future smart specialisation strategies will need to be aware of EU top-down objectives while also dealing with regional challenges and opportunities,” says Richard Tuffs, senior expert at the “Friends of Smart Specialisation”. He stresses that “smart specialisation has a strong track record but should evolve to play a strong role in growing regional economies within a changing economic and geopolitical climate.”

How exactly can S3 evolve? Policy, which shapes the 2028-2034 MFF proposal, points to three implications for S3, as noted by Mr. Tuffs:

• a stronger competitiveness focus on innovation as a growth driver – pushed by the 2022 New European Innovation Agenda’s deep-tech and market-upscaling ambition and reinforced by the Draghi Report’s priorities to close the advanced-technology innovation gap, align decarbonisation with growth, and strengthen economic security;
• a sharper integration of sustainability, treating nature as a managed capital asset rather than a secondary theme;
• and increasing attention at the EU to the industrial strategy, reflected in the 2025 Competitiveness Compass and the proposed European Competitiveness Fund focusing on strategic sectors such as clean tech.

"These three challenges will come on top of a day-to-day effort to improve the governance of smart specialisation (EDP and implementation). Smart specialisation strategies will also need to pay more attention to the interregional dimension of smart specialisation by joining up priority area value chains as illustrated in the regional innovation valley funding programme. It is also clear that regional priorities require a strong ecosystem which would include a skills strategy and also more attention to both innovative public procurement and inward private capital investment," concludes Mr. Tuffs.

What Happens Next?

After the European Commission presented its proposal for the 2028-2034 MFF in July 2025, work moved into the interinstitutional phase. Within the European Council, negotiations proceed in parallel at the technical and political levels, with a decisive institutional constraint: the MFF is adopted by the Council acting unanimously, after the European Parliament has given its consent. In practice, this means the package only moves when every Member State can accept the overall balance and the Parliament is prepared to endorse the political and policy architecture that accompanies it.

This sequencing explains why the outlook for S3 – and for cohesion policy delivery more broadly – remains uncertain at this stage. If the new framework reduces or removes S3 as a uniform enabling requirement, smart specialisation risks becoming unevenly applied across the Union, shaped more by national programming choices than by a shared, comparable regional discipline. Yet the same policy context also creates a clear opportunity: precisely because the post-2027 agenda is framed around competitiveness and resilience, S3 can reposition itself beyond cohesion policy as Europe’s place-based operating layer for prioritisation, ecosystem building, and interregional value-chain scaling – provided it is kept agile, evidence-driven, and connected to EU-level instruments that reward collaboration and market uptake.

For Ukraine, the practical conclusion from the three-part material is straightforward. Smart specialisation remains valuable even if it is not treated as a formal conditionality. We see from EU examples that regions that are already economically dynamic have often practised forms of entrepreneurial discovery and quadruple-helix coordination because they improve investment focus and innovation outcomes. At the same time, less mature ecosystems benefit from the structure, methods, and peer learning that S3 institutionalises. Ultimately, the “proof” of S3 is not a strategy document; it is the quality of strategic choices, the credibility of delivery pipelines, and the resulting gains in productivity, innovation capacity, and prosperity – outcomes that matter regardless of whether in the next MFF S3 is mandatory or merely the smartest available way to compete.