Adopting regional policies to support the Fourth Industrial Revolution

Roberta Capello,

 Camilla Lenzi,

 Reda Nausedaite

A review of policy measures to manage the current technological transformation, conducted as part of the Technological Transformation and Transitioning of Regional Economies (T4) project, demonstrated uneven interest across Europe. In the EU-27 and EFTA countries, only a relatively small number of regions (at NUTS 1 and NUTS 2 levels) have adopted polices specifically connected to the Fourth Industrial Revolution. Regional policies supporting the emergence of Industry 4.0 can be discussed in relation to three topics: sectors targeted by policies, support available through policy measures and expected impacts.

“over two thirds of regional policy measures are designed to support Industry 4.0 development across multiple sectors without targeting individual industries.”

Breaking down the regional viewpoint on Industry 4.0 support

Looking at sectoral trends, it is evident that over two thirds of regional policy measures are designed to support Industry 4.0 development across multiple sectors without targeting individual industries.

Those sector-specific regional policies that are in place most often target the ICT sector, followed closely by the marine/naval sector (a particular feature in Spanish regions), agriculture/food (primarily in French regions) and energy (most often targeted by German regional policies).

As for the types of support made available, regional Industry 4.0 policies and measures can be broken down into three broad categories:

support through funding (e.g. for the acquisition and/or introduction of 4.0 technologies), 

support through consulting (e.g. training courses for businesses, evaluating readiness to deploy 4.0 technologies),

support through dissemination (e.g. networking platforms for industrial actors working with 4.0 technologies).

Of these, funding actions are the most common, being employed in nearly two thirds of regional measures aimed at Industry 4.0. The second largest category is dissemination support. Here, evidence shows fairly strong interest from regions in investing in awareness-raising actions. Nearly half of policy measures include dissemination activities (most commonly found in Belgian, Spanish and German regions). Consulting is the least employed support action, identified in over a third of measures and most common in Spanish regions.

“the Fourth Industrial Revolution is not yet understood as an effective way to solve regional underperformance.”

Finally, with regard to the expected impacts of Industry 4.0 and measures supporting it, the largest proportion of policies in this area are designed to utilise Industry 4.0 as a way of maintaining current regional performance.

The second largest proportion of policies aim to improve the performance of regions that are already doing well (this type of policy is most common in Belgium, France and Austria).

These policies can be broadly divided into those that target specific sectors that have a strong regional presence and long-term strategies connected to innovation, research and development, and smart specialisation. The third largest group of policies is made up of those designed to reduce poor performance in regions through the introduction of 4.0 technologies (these are most frequently found in Greece, Spain and Italy).

Strength where strength is - untapped opportunities

The analysis of regional policy measures found relatively few actions that are designed to utilise 4.0 technologies in low-performing sectors to uplift industries. This suggests that the Fourth Industrial Revolution is not yet understood as an effective way to solve regional underperformance.

Most regional policies are designed around the principle of maintaining strength where there is strength already, which suggests that, at regional level, policy-makers view 4.0 technologies as the next stage in the evolution of industry but not necessarily as a tool to advance regional competitiveness. Work carried out by ESPON will hopefully go a long way towards raising awareness of the potential of 4.0 technologies to drive regional industrial performance.

Most regional policies are designed around the principle of maintaining strength where there is strength already, which suggests that, at regional level, policy-makers view 4.0 technologies as the next stage in the evolution of industry but not necessarily as a tool to advance regional competitiveness.

Work carried out by ESPON will hopefully go a long way towards raising awareness of the potential of 4.0 technologies to drive regional industrial performance.