An interview with Viktor Nedović and Dijana Štrbac on Smart Specialisation and Macro-Regional Cooperation

This contribution for the Western Balkans Info Hub builds on reflections by Viktor Nedović and Dijana Štrbac on the role of Smart Specialisation Strategies (S3) in macro-regional cooperation, with a particular focus on the EU enlargement context. Both authors combine long-standing engagement with research and innovation policy in Serbia and the Western Balkans with direct involvement in European policy processes, making their perspectives especially relevant at a time when S3 is increasingly positioned as a key interface between national reform agendas and broader EU policy frameworks. Drawing on their professional experience and analytical work, the reflections situate S3 not merely as a technical planning instrument, but as a governance approach that can support strategic focus, stakeholder ownership, and alignment with the European Research Area.

The choice of contributors reflects the close links between smart specialisation processes and macro-regional cooperation frameworks, notably within the EU Strategy for the Danube Region and its Priority Area 7 (Knowledge Society). Viktor Nedović has played a central role in the development and implementation of Serbia’s Smart Specialisation Strategy and currently contributes to macro-regional cooperation as co-coordinator of PA7, while Dijana Štrbac brings an analytical perspective grounded in her research on innovation policy, indicator development, and policy evaluation, as well as her involvement in EU-funded projects and macro-regional governance processes. Together, their reflections offer insights into how S3 can help identify complementarities, strengthen cross-border value chains, and build institutional capacity across the Danube Region and the Western Balkans.

Against this background, the text examines both the strengths and the limitations of S3 implementation in enlargement contexts, engages with recent findings of the European Court of Auditors, and discusses opportunities for improving governance, monitoring, and strategic focus. It concludes by outlining recommendations aimed at strengthening smart specialisation as a continuous, learning-oriented, and cooperation-driven policy process capable of supporting sustainable development and deeper integration into European research and innovation ecosystems.

POLICY ANSWERS: Why are Smart Specialisation Strategies (S3) relevant in macroregional cooperation in particular in the enlargement context?

Dijana: Smart Specialisation Strategies provide a shared framework for aligning development priorities across countries with different levels of economic and innovation capacity. For enlargement countries, which often face fragmented innovation systems and limited resources, S3 supports evidence-based priority setting and helps focus public investments on areas with the greatest potential for impact and competitiveness.

At the macro-regional level, S3 facilitates the identification of cross-border complementarities and common strengths, enabling cooperation around joint value chains, innovation projects and coordinated investments. In the enlargement process, S3 also serves as a bridge to the EU by aligning national policies with EU innovation policy principles, while strengthening governance capacity and stakeholder engagement through the entrepreneurial discovery process.

Viktor: Smart Specialisation Strategies that present evidence-based, inclusive, and participatory approach to policymaking, became a tool for identifying regional/national/macroregional competitive advantages/priority domains/benchmarking through Entrepreneurial Discovery Processes. Common priority domains in different regions/macroregions can be used as a bases to define shared value chains and to strengthen cooperation based on complementarities in between regions/macroregions. It may further support establishing of sustainable networks, institutional capacity building and strengthening, exchange of good practices across the macroregions. It is of particular importance in the enlargement context as less developed regions, as the most of the enlargement countries/economies are, could benefit and build up in house capacities to more efficiently operate within European and international research and innovation ecosystems, connecting local and regional actors with EU-level institutions and funding instruments.

POLICY ANSWERS: What are the strengths and weaknesses of S3 in your assessment?

Dijana: One of the key strengths of Smart Specialisation Strategies lies in their place-based and participatory approach. By combining data-driven analysis with the entrepreneurial discovery process, S3 helps align research, innovation and industrial policy, encourages stakeholder engagement, and promotes more strategic use of limited public resources. In many enlargement countries, S3 has also contributed to improving policy coordination and strengthening governance capacities at national and regional levels.

At the same time, experience from the Western Balkans highlights several implementation challenges that are typical for enlargement contexts. Limited administrative capacity, weak monitoring and evaluation systems, and insufficient links between identified priorities and funding instruments often reduce the impact of S3. A key lesson learned is that S3 delivers results only when treated as a continuous policy process rather than a one-off strategy document, supported by strong governance and meaningful stakeholder engagement.

Viktor: In the design phase, Smart Specialisation introduces an inclusive and evidence-based approach. The S3 process includes a policymaking model that combines quantitative analysis, qualitative analyses, and structured stakeholder engagement. One of the most important added values is the creation of bottom-up ownership. Stakeholders do not simply comment on pre-defined choices; they actively contribute to the identification and validation of priority areas. It may result in a strong sense of responsibility and long-term engagement among key actors of quadruple helix structure. This ownership effect is particularly important because it represents a shift from more centralised policy design models towards a collaborative and participatory approach. In the implementation phase, Smart Specialisation delivers significant added value by strengthening stakeholder coordination and broadening the institutional base involved in innovation policymaking. Multiple institutions, including ministries and national agencies, jointly shape and implement measures aligned with S3 priorities. This broad institutional engagement has meaningfully improved coherence across policy instruments, clarified responsibilities within the policy mix, and strengthened institutional ownership. The result is a more coordinated and strategically aligned governance framework in which Smart Specialisation is no longer confined to a single ministry, but has become an integral part of wider development policy. At the same time, S3 implementation also revealed challenges, particularly regarding institutional capacity, governance structures, sustained stakeholder engagement and suitable monitoring and evaluation systems.

POLICY ANSWERS: You analysed the recent report of the European Court of Auditors, which of the main findings could you highlight as challenges and opportunities?

Dijana: The European Court of Auditors’ report highlights that smart specialisation has successfully helped align cohesion policy funding with regional innovation priorities, particularly by encouraging more strategic and place-based investment choices. A key opportunity lies in the strong acceptance of the S3 concept at regional level and its potential to support interregional cooperation, especially for less innovative regions that can benefit from complementarities, shared value chains and access to external knowledge and markets. This potential is particularly relevant in the context of macro-regional strategies, such as the EU Strategy for the Danube Region, which provide an additional governance and coordination framework for translating S3 priorities into concrete cross-border initiatives.

At the same time, the report points to several important challenges. These include uneven implementation across regions, limited administrative capacity, overly broad or insufficiently focused priorities, and persistent weaknesses in monitoring and evaluation frameworks. The lack of EU-level evaluation of S3 as a policy process, as well as weak alignment between regional S3 priorities and EU industrial policy objectives, further limits its strategic impact. Addressing these issues represents a major opportunity to strengthen S3 as a continuous, results-oriented policy tool rather than a formal compliance exercise.

Viktor: Some of the report’s findings I would like to highlight as challenges are:

• Smart specialisation strategies aim to “concentrate resources on a limited set of research and innovation priorities”. Consequently, the competent authorities were to define the priority areas for specialisation in their corresponding strategies. Managing authorities and implementing bodies should then have ensured that R&I funding focused on these priorities.
• The risk of overly broad priorities, leading to scattered funding with a lack of clear objectives. Broad priority areas, such as ‘energy’, risk producing dispersed, disconnected projects with limited synergies, spillovers, or critical mass. In contrast, a more narrowly defined priority area, such as ‘energy storage systems’, may improve the focus and effectiveness of the funding.
• Overly narrow priorities also bring with them drawbacks, such as reducing the potential number of participants (i.e. a region decides only to focus on a small number of already successful companies). In both scenarios (i.e. too broad or too narrow priorities), the outcome is that using a region’s economic advantages to best effect becomes difficult to achieve.
• The Commission integrated smart specialisation into cohesion policy in order to align more effectively funding and projects with regional economic structures and their potential strengths. Alignment between calls for proposals and the priority areas is therefore crucial to ensure that projects support regional innovation objectives.

Some of the report’s findings I would like to highlight as opportunities are:

• Interregional collaboration has the potential to lead to more successful regional innovation ecosystems. Facilitating access to resources, skills and knowledge from outside the region can yield substantial benefits. Collaboration can take place on many different levels, from policy development to opening up programmes to outside partners or joint projects, and, ultimately, policy integration through joint strategies.
• Smart specialisation strategies should not only identify priorities, but also actively help regions to benefit from complementary strengths and new knowledge, and to integrate into global value chains. In general, interregional connections can help regions diversify and boost resilience.

POLICY ANSWERS: What are your recommendations based on this analysis?

Dijana: Based on this analysis, a key recommendation is to strengthen the strategic focus and governance of Smart Specialisation Strategies. S3 priorities should be more clearly defined and regularly updated, with stronger links to funding instruments and clearer alignment with EU industrial and innovation policy objectives. In parallel, there is a strong need to simplify and reinforce monitoring and evaluation frameworks, to better assess the added value of S3 as a policy process and support evidence-based policy learning.

Building on the report’s strong emphasis on interregional cooperation, a second recommendation is to make better use of existing cooperation frameworks. Macro-regional strategies can serve as effective platforms for translating S3 priorities into joint projects, cross-border value chains and coordinated investments, particularly for less innovative and enlargement regions. This requires stronger incentives for cooperation, targeted capacity-building, and more systematic use of existing cooperation mechanisms to identify complementarities and scale up innovation activities beyond national and regional boundaries.

Viktor: To ensure that the process of designing Smart Specialisation Strategies leads to meaningful and appropriately defined priorities, it should be treated as a continuous process, regularly updated through Entrepreneurial Discovery Processes. The S3 concept should be adaptable to regions with different innovation profiles and administrative capacities, particularly less developed and enlargement regions. Finally, maximising the value of interregional cooperation requires identifying suitable thematic areas and funding mechanisms, supporting capacity-building, and ensuring appropriate incentives for cooperation are in place.

POLICY ANSWERS: Thank you very much for sharing your thoughts on the topic and all the best for the next steps!