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REGional Innovation pOlicy, knowledge Spillovers, Productivity, and INstitutions

Final Report Summary - REGIO_SPIN (REGional Innovation pOlicy, knowledge Spillovers, Productivity, and INstitutions)

REGIO_SPIN project main aim was to provide policy recommendation on cohesion policy, science, technology and innovation policies, and training based on empirical evidence, at the region level. The emphasis on the contextual nature of policy has led towards a differentiated territorial innovation policy approach or place-based policies also in EU regional policy.

Lines of research
The project has evolved along three main lines of research. The first has addressed the importance of regional institutions – in particular decentralization and regional autonomy - for the implementation of cohesion policy and good (regional) governance. The second line of research has addressed: i) innovation performance across European regions, with a comparative perspective on an emerging country, namely innovation performance of Chinese regions; ii) the dynamics of university-industry linkages for technological transfer and innovation,. The third line of research has tackled i) the effectiveness of training policy in improving labour marker performances of workers and unemployed; ii) labour market institutions, skills and innovation.

Relationship with other institutions and joint dissemination activities
A main added value of the project is represented by the connections and relationships established through the activities of the project with other universities, research institutes, and political organisations. The project has also made it possible to establish a number of important links between the host institution - the Department of Geography and Environment at the London School of Economics - and other British universities, namely Birkbeck College at the University of London, European higher education and research institutions, namely the National Research Council of Italy and the University of Rome Tre in Italy, and American universities, namely the Department of Political Science at Columbia University, where Dr. Andrea Filippetti spent the Fall 2014 as a Visiting Fellow.

Together with Simona Iammarino (LSE), and Frederick Guy and Helen Lawton-Smith (Birkbeck College), Dr. Filippetti has helped organizing two LSE-Birkbeck joint international workshops: 1) Scientific Labour Markets and Innovation Systems, July 2014, Birkbeck College, University of London; 2) Risky Skills, July 2015, Birkbeck College, University of London. Together with Simona Iammarino (LSE) and Anna Giunta (University of Rome Tre), Dr. Filippetti co-organised a joint workshop on University-Industry linkages: Evidence and Policy, May 2014, Rome TRE University. Another joint workshop is currently being organized as a follow up of the recent activities of the project for 31st May- 1st June 2016 at Rome Tre University on Risks and Resilience: A Regional Perspective.

Another important link is that established with ISFOL - Institute for the Development of Vocational Training of Workers at the Italian Ministry of Labour and Social Policies. This link has allowed Dr. Filippetti to carry out the work on training for which ISFOL has provided the micro-data for the empirical analysis. A formal agreement (see attachment) has been established between the Department of Geography and Environment at the LSE, ISFOL, and the Centre for Innovation Management Research, Birkbeck (University of London). The agreement aims to carry out joint research for the next three years on the issues of regional training provision, regional labour markets and skills, as well as to present joint projects for instance to the European Commission research programme Horizon2020.

Main results, conclusions and their potential impact and use and any socio-economic impact of the project.

The main results of the project and their potential impact are here discussed for some of the lines of research described above. Other research outcomes can be seen through the list of publications provided the dissemination section below.

Regional innovation and STI policy. We have studied the sources – in particular the relative importance of capital accumulation versus investment in technological capabilities - of labour productivity growth in the European region in the last decade. We found that, especially in lagging behind regions, productivity growth is mainly driven by capital accumulation. This means that technological improvements and innovation have so far played a relatively minor role, as they have not been central in the policy design and implementation at the European level. Such findings have important implications for future cohesion policy. In order to encourage further economic convergence of lagging behind regions cohesion policy should concentrate on improving and upgrading technological capabilities that may help autonomous generation of innovation as well as absorption of technologies developed in advanced regions. Mechanisms that facilitate diffusion across countries should be further encouraged.

Cohesion policy, institutions and regional autonomy. We have found that i. decentralization encourages economic growth when fiscal decentralization is coupled with political decentralization, and ii. cohesion policy, namely structural funds, have a higher impact on economic growth in decentralized regions. In terms of policy implications, these results suggest that multi-level governance seems to be an effective policy tool for cohesion policy implementation, and that decentralization reforms should involve both fiscal and political dimensions simultaneously.

University-industry linkages. Our analysis confirms the ‘special’ nature of U-I collaborations in that they face more difficulties/barriers than other collaborations. This provides a rationale for policies that try to minimize these barriers. While spatial proximity certainly facilitates collaboration, other mechanisms might produce equally beneficial effects on these collaborations with less ambiguous side-effects. In this regard investments aimed at raising the quality of universities and their capacity to attract ‘start inventors’ would be suitable to facilitate U-I collaborations. Furthermore, the reinforcement of the technological capability of private firms by facilitating the hiring of highly experienced researchers/inventors can also foster U-I collaborations. Both policy options would reduce the reliance on expensive infrastructure (such as those needed for U-I incubators) or co-location subsidies, while avoiding the potentially distorted effects linked to the re-location of firms or of university research units.

Training and individuals’ performance in the labour market. We have studied the impact of training on both unemployed and employed people across the North and the South of Italy. We found that training is not effective for unemployed, especially in the Southern regions, in that it does not increase their probability of becoming employed. By contrast, in the South of Italy, training has a substantially larger effect on the probability of remaining employed, than it does in the Northern regions. This difference cannot be explained by regional variation in unemployment rates, by standard measures of the quality of education, or by social capital variables. In terms of policy implications this suggests a deep rethinking of the training system, especially for unemployed and in lagging behind regions, such as the South of Italy. There are also implications for education policy: differences in the quality of education system across regions tend to be reinforced by training, in that more and better educated tend to be more frequently trained within companies. For instance, German-style education and training system has provided less variance in the quality of education across students. Finally, policies aimed at providing training for unemployed, such as training courses, could be substituted by incentives to be trained within business firms.

Dissemination activities
The results of the project have been disseminated though the participation in several conferences, workshops and seminars (listed below). In addition, other ‘generalist’ tools have been used such as Open Democracy ( https://www.opendemocracy.net/can-europe-make-it/andrea-filippetti/european-integration-and-winds-of-secession ); a personal blog of Dr. Andrea Filippetti from an Italian online newspaper (http://www.glistatigenerali.com/occupazione_precari/la-formazione-professionale-aiuta-a-trovare-lavoro/). In addition, several direct contacts with regional policy makers have been established concerning regional innovation policies and training policies, namely with the regional governments of the Abruzzo and Molise regions in Italy. The research carried out in the project will also inform and constitutes a base for discussions on new perspectives in regional policies in various forthcoming events, such as, for example, the EU Commission-Department of Geography & Environment at the LSE sponsored conference Reassessing Economic Development Policy for Regions and Cities: Growth and Equity, Institutions and Governance, People and Places which will take place on April 21st and 22nd at LSE, London.
final1-isfol-lse-agreement.pdf