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Strategic Vision for Regional Development and European Integration: An Innovation Area in Central and South-East Europe

G. Fayl, I. Bilik, I. Hronszky, T. Kemény, É. Nagy, J. Pakucs, G. Pethes, and J. Veress

Issue: According to available competitiveness indicators, many of the candidate countries will trail behind the rest of the EU when they join the EU on May 1st 2004.

Relevance: The creation of an "innovation area" in central and south-east Europe will help the countries concerned catch up with their stronger partners in the European Union. An "innovation area" of this kind could be the outcome of a pro-active, trans-national education & science & technology & innovation cooperation strategy involving the regions of the new EU Member States. Whenever possible, the broadest European participation should be sought.

Innovation - a driver of regional development and European integration1

The conclusions of the Lisbon Summit2 (March 2000) are currently one of the EU's main policy-drivers. The summit set the objective of Europe becoming "the most competitive and dynamic knowledge-based economy in the world by 2010". This challenging goal the can only be achieved if the enlarged EU is willing and able to take urgent action to significantly increase its innovation potential (see Box 1). The Commission's President, Romano Prodi stated recently: "Member States do not seem to realise that 2010 is around the corner. Four years after Lisbon it is clear that we are going to miss our mid-term targets. [...] Europe deserves better" (EurActiv, 2004).

The goals of the Lisbon summit can only be achieved if the enlarged EU is able to take urgent action to significantly increase its innovation potential

It is generally recognised that innovation is a precondition for economic growth. Innovation means creative development in terms of both production methods and organisation. It leads to enhanced productivity, and quality, and hence to more competitive products. Hence, innovation is a measure of competitiveness. A key feature of dynamic, sustained innovation is that it often leads to more and better job opportunities. Thus, it has the potential to improve living and working conditions and ensure the economic basis for high-quality public services. All these are significant contributing factors to ensuring a stable and prosperous society.

When looking for complementary measures to improve the innovation potential of the EU, the following should be kept in mind. Firstly, regional economies play an important role in the wider dynamics of innovation and economic growth. Moreover, the current trend towards globalisation necessitates new forms of cooperation, even between previously competing groups, in order to acquire and maintain competitive advantage at the global level. In this context, the enlargement of the EU should be considered as an important opportunity to increase Europe's role in the process of globalisation.

Enlargement of the EU should be considered as an important opportunity to increase Europe's role in the process of globalisation

Direct cooperation between regions, regardless of national borders, offers the EU, and Europe as a whole, a novel and challenging possibility for more active participation in the globalisation process in a way that enhances its competitiveness. Regions with high potential for knowledge creation offer particularly attractive opportunities for such initiatives. These regions need to be home to good quality universities and/or public and private research centres. And these need to possess adequate complementarities in terms of human resources and research infrastructures. Moreover, appropriate micro- and small/medium size enterprises should be present in these regions or adequately close links exist to them.

Integrating Europe's innovation potential within a "European Innovation Area" will open the door to new opportunities. The process needs to be promoted both through individual institutions in the different countries as well as through developing trans-border regional areas cooperating with each other and the rest of the EU and Europe. In this way trans-border regional cooperation activities can achieve synergies of expertise that might otherwise not be realised.

Trans-border regional cooperation activities can achieve synergies of expertise that might otherwise not be realised

Regional innovation systems based on open learning networks are potentially more flexible and dynamic than systems that confine learning and transfer of experience to individual companies or institutions. Regional learning networks can enable information flows, mutual learning and economies of scale (O'Doherty, Arnold, 2003). More and more attention is now being paid to the regions' own policies as a complement to the nation state's own regional policy, so regional authorities need to be brought into the process of economic and social cohesion (Horváth, 2002). However, this is not an automatic process and cannot be done without transferring certain responsibilities to the regions. Decentralisation would minimise unnecessary "red tape", and ideally avoid it altogether.

Box 1. Policy concerns

The latest analysis of the progress towards the Lisbon strategy shows that full implementation of this process could increase GDP by 0.5-0.75 percentage points over the next 5 to 10 years (European Commission, 2004).

The analysis highlights the need for an energetic implementation of reform in the different spheres through integrated strategies. The Member States are urged to seize the opportunities provided by the economic recovery and the coming enlargement, and to take urgent actions in three key areas:
Improving investments in knowledge and networks, by implementing the EU's "Growth Initiative" and giving greater priority to the level and quality of investments in research, education and training.
. Strengthening the competitiveness of European enterprises, by applying better regulation - particularly for the industrial sector - and by adopting both the proposal for the "Framework Directive on Services" and the proposal for the "Environmental Technologies Action Plan".
. Finally, promoting active ageing by encouraging older workers to remain in the work force and through a modernisation of educational systems for lifelong learning, of work organisation, and of prevention and health care systems.

Optimal conditions should be created for cooperation at regional level to take place on a voluntary basis. To be most efficient, research centres and (in most cases micro- and small size) enterprises, including incubators, should cooperate directly, regardless of national borders (see Box 2). Whenever possible, the participants should take full advantage of the support mechanisms offered through the EU framework for cooperation between regions across national borders. These measures include relevant parts of the RTD Framework Programme, in addition to the Structural Funds (the main instrument to promote social and spatial cohesion within the EU).

With adequate public and private economic support, and sustained political endorsement, enhanced cooperation could evolve between regions in central and south-east Europe that fulfil the "complementarities" criteria alluded to above. For example, illustrative examples along the Hungarian border could include: (i) Miskolc / Kosice / Krakow; (ii) Debrecen / Cluj / Oradea; (iii) Szeged / Arad / Timisoara / Beograd / Novi Sad; (iv) Pécs / Zagreb / Ljubljana / Koper / Maribor; (v) Györ / Sopron / Vienna / Bratislava / Brno / Komarno, just to give a few of the possible examples.

Many countries in central and south-eastern Europe lack experience in efficiently translating promising research results into practical and marketable applications

It is significant that these countries have a long tradition in good, sometimes excellent, higher education and basic research. This tradition offers an outstanding opportunity to contribute to the achievement of the Lisbon- and European Research Area objectives. However, to date, the potentials of these resources have been somewhat underutilised. National borders have hindered cooperation, sometimes to the extreme. Another shortcoming is that most of these countries lack experience in efficiently translating promising research results into practical and marketable applications. More experienced countries and regions should offer much needed advice and support in this respect.

Trans-border regional cooperation of the kind suggested above could eventually lead to voluntary resource pooling and the coordination of research activities in fields of common interest. A current example of this development is the "Bonus" project, where organisations from eight countries around the Baltic Sea have decided to work together in the area of marine research (CORDIS-1, 2004). The countries involved comprise are four EU Member States (Denmark, Finland, Germany and Sweden) and four Accession Countries (Estonia, Latvia, Lithuania and Poland).

Box 2. Initiative to energise innovation potential

Early 2003, a group of experts suggested the establishment of an "innovation area" in central and south-east Europe. The experts came from various parts of civil society and they joined the initiative in a personal capacity. The group met several times in order to formulate their strategy and an action plan for the initiative.

The fundamental paradigm of this initiative is that full use of the innovation potential of the countries involved will help them to become strong partners in the European Union. This innovation potential in central and south-east Europe has existed throughout history, but has been under utilised because national borders have hindered cooperation, sometimes to the extreme.

The basic instrument of the initiative is active, voluntary cross-border regional level networking between universities, research centres and enterprises (above all, micro- and small-sized ones). Networks will be open to all relevant actors that interested both within and beyond national borders. Moreover, attention will be paid to initiatives with similar aims. This includes relevant parts of the "Central European Initiative" that is an integrated, government-level framework of dialogue, coordination and cooperation among its member countries in the political, economic, cultural and parliamentary fields. (CEI, 2004).

The intended outcome of this pro-active trans-national education & science & technology & innovation co-operation strategy is the creation of an "innovation area". This will emphasise trans-border regional co-operation among the new EU Member States (i.e. Czech Republic, Hungary, Poland, Slovenia and the Slovak Republic) and, whenever possible, be extended to regions in the Applicant Countries and other parts of Southeast Europe. Moreover, whenever possible, appropriate partners should be invited from regions in Austria, Bavaria, Greece and Italy. Networking with centres of excellence in Russia, Ukraine and Belarus might be useful.

This is an outline of an independent, non-partisan initiative. On the occasion of the first World Science Forum (Budapest, 10 Nov. 2003), the Hungarian Prime Minister Péter Medgyessy, expressed the need and his support for the initiative and urged for steps to make in this direction.

The importance of an "innovation area" in central and south-east Europe

Regional level cooperation between the new Member States and Applicant Countries in central and south-east Europe will be beneficial for all the parties concerned. As these countries face similar structural challenges during the current process of transformation and development towards market economies, they would be able to learn from each other's experience. Moreover, most of them need to gain more hands-on experience in relation to maximising results of knowledge production for wealth creation.

There are also several crucial economic reasons for the development of an "innovation area" in central and south-east Europe.

To perform optimally, the regions' economies need greater market-access. Goods and services from the new Member States will have to compete head-on with existing goods and services already complying with EU standards and regulations. The consumers' measurement criteria will include price, quality, knowledge content and after-sales service.

The main market development potential in Europe for the foreseeable future will be in both central and south-east Europe. EU and overseas companies are already aggressively targeting these markets as can be witnessed by their marketing efforts.

Trans-border, regional cooperation in central and south-east Europe could lead to an "innovation area" and thereby boost progress towards creating a knowledge-based economy and society in this part of Europe. Obvious proximity considerations resulting from such a regional "innovation area" would further enhance the potential of these countries to produce usable innovations. It would also help to integrate these countries more closely with the "European Innovation Area" as a whole.

It is reasonable to suppose that in the medium to long term it will be high knowledge-content, rather than low labour costs, that will attract further foreign investments to central and south-east Europe.

The establishment of an "innovation area" in central and south-east Europe could also promote direct dialogue in the region

Furthermore, the establishment of an "innovation area" in central and south-east Europe would promote direct non-political dialogue in the region. We could also hope that growing trans-border cooperation will moderate nationalistic tendencies present in certain segments of society in some of these countries. Together with rising living standards, it could therefore help promote regional stabilisation and full integration with the EU.

However, the full benefit of such an "innovation area" will only be achieved if cooperation is completely open and does not exclude potential partners from beyond these countries' regions. Following on from this, the current initiative (see Box 3) is not an alternative to broader EU-level cooperation.

Box 3. Consortium supporting implementation of the strategic vision

The following actions are required in order to start making an "innovation area" in central and south-east Europe a reality:

. Create a compendium of the existing joint projects in the areas of education, science, technology and innovation that reach beyond individual national borders in central and south-east Europe.
. Identify areas suitable for cooperation in central and south-east Europe and not yet included in the compendium.
. Identify suitable cooperation- and financing partners in central and south-east Europe, and whenever useful, beyond it.
. Organise an international conference to promote the vision and bring together the various players in a fertile environment.
. Throughout the process, full consideration should be given to the support mechanisms offered by relevant EU initiatives.

To this end, an international consortium has been set up with participation of higher education, public and private research, and industry - see illustration. The consortium should help to create optimal conditions for voluntary co-operation at regional level. It provides an open framework for such co-operation through networking, regardless of national borders (including those of the "Schengen" area). Being a fully open structure, the consortium will help to generate interest for an "innovation area" in central and south-east Europe and to maintain focus on it. The latter could include formulating strategies for lobbying public authorities and civil society bodies.

The international conference mentioned above is scheduled for November 2004 and is currently being prepared.

The consortium is open to any interested, relevant public/private person and organisation that share the objective of this independent, non-political initiative.

Relevant bodies will be encouraged to support the consortium. This includes the "Central- and Eastern European Network", a platform for informal dialogue among the Presidents of national Academies of Science from the countries in Central and Eastern Europe3.

Policy approaches to promoting regional innovation

Against the background described above, the options available to the public authorities to promote regional innovation could include the following:

  • At EU level: promoting the establishment and further development of regional research infrastructures (including electronic networks, comprehensive databases and large installations) and their integration into the mainstream of European research.
  • At national level: encouraging the development of innovation potential in targeted fields (biotechnologies, information technologies, energy, drinking water, etc.). This would ensure an efficient combination of the advantages offered by higher education, basic research, and technology development, transfer and application. The latter would require the presence of relevant industries or close links to them.
  • Moreover, for less-developed regions: supporting the development of physical infrastructures (highways, railways, telecommunications, etc.). High-quality infrastructures are key contributors to mushrooming business activity, networking and generating new poles of development.

An encouraging development in the context of less-developed regions is the effort the EU is making to bridge the digital divide that separates the Balkans from the rest of Europe (see Box 4).

Box 4. Bridging the digital divide in the Balkans

With support of EU funds, the pan-European high-speed research network, GÉANT, has recently been extended to the Balkan countries with the completion of the "South Eastern European Research and Education Networking" (SEEREN) project. This project has provided more than just technical connectivity. Bridging the digital divide that still separates the Balkans from the rest of Europe was one of the key aims of the project. To this end, the project consortium has been active in encouraging EU Member States to work together with researchers from Southeast Europe.

The extension includes Albania, Bosnia and Herzegovina, Bulgaria, Greece, the Former Yugoslav Republic of Macedonia, Romania, and Serbia and Montenegro. It improves online access for researchers, thus enabling full participation and integration of the Balkan research community in the European Research Area.

The network also provides connection to North America and Japan, while further links to the Latin American and Mediterranean regions will be operational shortly. (CORDIS-2, 2004).


Initiatives are needed to strengthen cooperation on education, science, technology and innovation between the countries and regions involved, as well as with other countries and regions of the European Research Area. However, such initiatives should not be understood as suggesting a universal recipe for promoting regional innovation capacity. The issue is more complex. Solutions must be found locally. Realising trans-boarder cooperation is a main policy challenge for regions in transition economies (Dory, 2002). Initiatives such as that described here can become an element in reinforcing the strategies of the regions in the central and south-east European countries.

Figure 1. The CEIA International Consortium

The backbone of the "innovation area" in central and south-east Europe is a pro-active trans-national cooperation strategy on education, science, technology and innovation. Its active promotion will eventually result in more and better jobs - an admirable and necessary objective. The challenges are clear, but so are the opportunities.


European integration, innovation, knowledge creation, regional development, trans-border regional cooperation


1. This article represents the views of its authors and not necessarily those of their respective organisations.


3. The Central- and Eastern European Network (CEN) is a platform for informal dialogue among the Presidents of national Academies of Science from the countries in Central- and Eastern Europe. The Presidents participate in their personal capacity and do not represent their Academies as such. The initiative for the CEN was taken in 2003 by the European Academy of Sciences and Arts, and supported by the City of Vienna, in connection with the forthcoming enlargement of the EU.


  • CEI, About the Central European Initiative,, 2004.
  • CORDIS-1, Commission funding initiates unprecedented Baltic collaboration, 15 January 2004.
  • CORDIS-2, GEANT network extended to Balkans, 12 January 2004.
  • Dory, T. The Role of Innovation Strategies in Regional Development from Accession Countries' Point of View, The IPTS Report (66) 2002.
  • EurActiv, Commission criticises Member States for lagging behind Lisbon agenda,, 21 January 2004.
  • European Commission, Report from the Commission to the Spring European Council, Delivering Lisbon, Reforms for the Enlarged Union, COM (2004) 29 final, 21 January 2004.
  • Horváth, Gy., Regional science as a new factor in the European cohesion policy, The Parliament Magazine, 25 November 2002, pp. 16-17.
  • O'Doherty, D., Arnold, E., Understanding Innovation: the need for a systematic approach, The IPTS Report (71) 2003.


Gilbert Fayl, European Academy of Sciences and Arts

About the authors

  • Gilbert Fayl has a PhDin physical sciences and is Secretary of External Affairs of the European Academy of Sciences and Arts.
  • István Bilik has a PhD in natural sciences and is Secretary General of the Confederation of Hungarian Conference on Higher Education. Consortium Scientific Secretary (see Box 3).
  • Imre Hronszky is Head of Department of Innovation Studies and History of Technology, Budapest University of Technology and Economics. He has a PhD in philosophy, habilitated in engineering sciences.
  • Tamás Kemény is a Dr. of Sciences and is Executive Director of the Hungarian Foundation for Progress of Industry.
  • Éva Nagy has a PhD in applied linguistics and is Managing Director at the Institute for World Economics of the Hungarian Academy of Sciences.
  • János Pakucs has a PhD in engineering and is Managing Director of Olajterv Contracting and Engineering Co.; President of the Hungarian Association for Innovation.
  • György Pethes is Vice-President of the European Academy of Sciences and Arts. He has a D.V.M. and PhD. in physiological sciences.
  • József Veress is a Senior Advisor at the Office of National Development Plan and European Funds, Prime Ministers Office.

Contents of issue 84