Entrepreneurial development niches for Interreg

This article introduces potential niches for Interreg programmes in relation to entrepreneurial development in cross-border and transnational functional areas (FAs).

The ideas presented here have been inspired by an exchange between ESPON, Interreg stakeholders and representatives of the Directorates-General (DGs) for Research and Innovation and for Internal Market, Industry, Entrepreneurship and SMEs within the framework of the ESPON transnational outreach project.

The synergies observed between Interreg, the framework programme for research and innovation (Horizon 2020) and the Enterprise Europe Network (EEN) can be clustered into two main domains (see graph above) Both domains are considered niches for Interreg programmes, as they delineate areas of intervention that account for the place-variant needs of a cross-border or transnational FA (spatial heterogeneity) and control for possible deadweight risks, i.e. overlaps with activities carried out in the context of place-invariant innovation and entrepreneurial support schemes.

The role of both niche domains for entrepreneurship in crossborder and transnational functional areas can be empirically tested. The results can be helpful for Interreg programme implementation authorities beyond the multiannual strategies and cooperation programmes. The design of specific calls for proposals can benefit from empirical findings and pave the way for synergetic interventions that take into account developments and activities planned or carried out within Horizon Europe and/or the EEN. Such value chains are expected to increase marginal social impact at a low marginal cost.

This article is not the result of an empirical analysis but presents the conceptual framework only. The empirical model that can be tested in certain cross-border or transnational areas, or across these FAs, builds largely on the model applied by the knowledge spillover theory of entrepreneurship (Acs et al., 2009). Using the same set of variables, the Interreg niche model includes the notion of knowledge spillovers through knowledge imports (e.g. appropriation of open research results, open data or other knowledge residuals from abroad), as well as a recognition of high-impact industrial sectors that are considered particularly competitive and fertile for the economy of the cross-border or transnational FA. The latter can be the result of cross-border or transnational regional smart specialisation and entrepreneurial discovery processes (Foray, 2015).

FARENT= KSTOCKα+KIMPORTβ+FA*KSTOCKγ+ EEN*KIMPORTδ+BARRζ+INCη+ CONTROLλ+u

Entrepreneurship in a cross-border or transnational FA (FARENT) is a function of the knowledge stock (KSTOCK = R&D investments and research capital investments), knowledge import (KIMPORT), entrepreneurial barriers (BARR = corporate tax, individual tax, public expenditure in relation to GDP as a proxy of substitution effects), level of knowledge appropriation from incumbent firms (INC = patents, gap between actual and potential GDP) and other observable influences (CONTROL = share of population in the age segment 30-44; share of population living in urbanised areas). The model has also been designed to investigate the marginal effects of knowledge imports if they are associated with the EEN as well as the marginal effects of the knowledge stock accumulation if this occurs in the FA’s priority sectors.

Individual observations for each of the niche domains already documented by the European Commission and the Interreg CENTRAL EUROPE programme are presented below.

EEN as well as the marginal effects of the knowledge stock accumulation if this occurs in the FA’s priority sectors.

Individual observations for each of the niche domains already documented by the European Commission and the Interreg CENTRAL EUROPE programme are presented below.

Strategic investments in the knowledge stock of a cross-border area

The International Iberian Nanotechnology Laboratory (INL) was co-financed by (among others) the Interreg Spain– Portugal programme. Nanotechnology was identified as an investment priority during the Portuguese–Spanish summit in Évora, Portugal, because of its applications in medicine and healthcare, food and environmental monitoring, information and communications technology (ICT) and renewable energy. The current activities of the INL are distributed across these domains and match the smart specialisation priorities (RIS3) of the Portuguese and Spanish border regions.

In 2017, the INL kicked off the Interreg Spain–Portugal project NanoGateway with the goal of establishing a cross-border smart specialisation strategy in nanotechnology, also known as nanoRIS3. NanoGateway sought to cluster the crossborder innovation system around the common denominator of nanotechnology and assimilate nanoscience excellence into the cross-border entrepreneurial network, thus establishing a common scientific, technological and entrepreneurial functional space.

The INL currently has a portfolio of nearly 170 research projects including projects worth nearly €14 million funded under Horizon 2020.

The first entrepreneurial spin-off as a result of scientific research conducted at the INL was RUBYnanomed. By using applied nanotechnology, a team of INL researchers developed a single-use device able to capture circulating tumour cells (CTCs) in the bloodstream using as little as 7.5 ml of blood from a patient. CTCs are biological particles that cause secondary tumours by flowing freely in the bloodstream and attaching to other organs. RUBYnanomed seeks to help oncologists define the best treatment options for their patients by continuously monitoring their condition without having to wait until tumours are detectable in scans or x-rays.

Spatially adjusted EU open innovation

In May 2019, the Interreg CENTRAL EUROPE Programme launched an experimental call designed to link Interreg outputs and results with those of directly managed EU programmes, with a focus on the framework programme for research and innovation, Horizon 2020, and its predecessors. In December 2019, Interreg CE selected nine projects for funding. An example of a project involving spatially adjusted EU open innovation is the CERUSI project. It seeks to support social entrepreneurs in rural regions by means of the Rural Social Innovation Lab Caravan. It builds on the Regional Circular Living Lab concept developed through the Horizon 2020 project LIVERUR, which combines principles of the circular economy and social inclusion with business development. It was co-developed and tested in 15 pilot regions, feeding into a conceptual framework, whose territorial adaptation to rural central Europe will be carried out as part of the CERUSI project. Sectors covered include agriculture, food and beverages, crafts and rural tourism.

The full paper on entrepreneurial development niches for Interreg is available on the ESPON website.

References

Acs, Z.J., Braunerhjelm, P., Audretsch, D.B. and Carlsson, B. (2009). The Knowledge Spillover Theory of Entrepreneurship. Small Business Economics, vol. 32, no. 1, pp. 15-30.

Foray, D. (2015). Smart Specialisation: Challenges and Opportunities for Regional Innovation Policies. London and New York, Routledge.