The European Court of Auditors Review 05/2025 offers one of the most thorough analyses of how Smart Specialisation Strategies (S3) are driving regional innovation across Europe — guiding over €70 billion in cohesion policy investments between 2014–2027.
Key messages and insights
1. Strategic focus, but limited coherence S3 replaced fragmented spending with targeted regional priorities. However, coherence with EU-wide industrial and skills agendas (e.g. semiconductors, hydrogen, green transition) remains weak, reducing impact.
2. The Entrepreneurial Discovery Process (EDP) This participatory approach — involving businesses, academia and civil society — is now mandatory, but 46% of regions find it highly demanding. Many lack the capacity or partnerships to make it meaningful. VET providers and Centres of Vocational Excellence (CoVEs) could be systematically included to connect innovation with the skills base required for implementation.
3. Interregional cooperation: still underused The new S3 Community of Practice and S3 Observatory foster collaboration, but many regions don’t engage. Stronger links between VET, universities, and industry can boost innovation diffusion and support the twin transition.
4. Monitoring and evaluation: a weak pillar No EU-level evaluation of S3 has been conducted since 2014. Indicators vary widely, hindering learning. The ECA calls for simpler, comparable tools — and for assessing skills outcomes alongside innovation results.
5. The missing link: skills for smart specialisation The European Social Fund+ can finance “skills for S3”, but this lever is underused. To succeed, regions need skills ecosystems built on collaboration between:
- Universities, advancing R&D and innovation leadership.
- VET and CoVEs, developing the applied competences industry needs.
- Together they enable innovation to scale.
Three priorities for the next generation S3
- Align S3 with EU industrial and skills strategies
- Integrate VET, CoVEs and universities into the EDP and regional governance
- Evaluate success through both innovation and skills impact