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Smart Specialization Strategies for Sustainable Regional Development: Comparison
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Please note this is a comparison between Version 2 by Wenqian Li and Version 1 by Viktorija Šipilova.

The smart specialization strategy (S3) is a place-based approach to regional development, which rapidly became highly demanded across regions regardless of its novelty. In essence, S3 aims to support regions to transform their economic structures in favor of knowledge-based development. Practical implementation includes setting a limited number of priorities within development strategies and involving a wide range of stakeholders. The S3 approach differs from conventional innovation policies because it focuses on the process of “self-discovery” and targets a limited number of activities that have the potential to serve as a regional competitive advantage. Today, the approach continues to evolve. The updated vision of regional development accentuates sustainability at the core of regional growth. To achieve better outcomes, regions need to localize the Sustainable Development Goals (SDGs) and discover opportunities based on their own capacity, potential, and vision. Smart specialization strategy for sustainability (S4) aims to embed sustainability into economic activities, aligning them with local characteristics and challenges. The key objective of this transformation-oriented regional development policy is to help regions become places with high business activity and an attractive environment in which to work, live, and invest. A special contribution of S3 and S4 is their support in discovering regional potential, even in declining regions. This can significantly contribute to closing productivity and income gaps.

  • regional economic development
  • smart specialization strategy (S3)
  • smart specialization strategy for sustainability (S4)
  • regional innovation policy
  • sustainable development goals
What is the rationale and the role of the smart specialization strategy (S3) in regional development? This entry summarizes and emphasizes key characteristics and challenges of S3 as a modern approach to regional economic development [1,2][1][2] with an increasing role in the context of the sustainable development agenda [3,4][3][4] in the European Union (EU).
Under modern conditions, management of economic processes aimed at mitigating unfavorable business cycles, improving weak competitiveness, or supporting sustainable stakeholders’ behavior is a forward-looking practice. Such policy approaches are based on proven and adjusted actions that are mostly common and driven by the objective characteristics of economic conditions. At the regional level, these interventions aim to maintain economic vitality, unlock competitive advantages, and narrow productivity and income gaps.
From a theoretical perspective, the economics of regional development focuses on economic growth and disparities [5]. For the regional economic development, a strategy that uses local resources to drive economic growth from within rather than relying on external influences [6] is highly relevant. The utilization of local resources to address issues of economic growth and disparities is a core principle of S3, announced in 2010 [7] and employed since the 2014–2020 programming period [8] in the EU. In essence, S3 is a place-based policy-making concept in the EU that focuses on building the competitive advantage of a region, considering research and innovation as tools for regional development [9]. S3 fosters knowledge-based growth in the EU’s regions and countries to achieve a smart, sustainable and inclusive Europe [9]. Specifically, the S3 approach was introduced as a response to the productivity gap between Europe and the United States to ensure more effective public spending and investments in knowledge domains [10].
Under modern conditions, economic growth calls not only for purely economic considerations but also for societal and environmental benefits [11], thereby emphasizing sustainable development. In essence, regional policy contributes to unlocking regional potential for sustainable development [12]. In this regard, both scientists and practitioners expand the term ‘smart specialization strategy (S3)’ to the ‘sustainable smart specialization strategy (S4)’ [13] or the ‘smart specialization sustainable strategy (S4+)’ [14], thereby indicating that sustainability lies at the very heart of S3. From this perspective, the S3 approach integrates a sustainability dimension, emphasizing ecological challenges and the European Green Deal as tools [13,14][13][14]. Although the acronym S4 is still not widely used, the approach of sustainable smart specialization is currently in the process of development for implementation across the EU Member States [15]. From the core concept of sustainable development, new terms such as sustainable economy, sustainable economic growth, and sustainable region appear, emphasizing a need to align economic goals and activities with sustainability principles. Sustainable development requires balancing economic growth, environmental protection, and social equity [16]. This, in turn, emphasizes the logic behind the transition from S3 to S4.
In essence, literature emphasizes that sustainable development is promoted through a combination of public policies [16]. For decades, the EU has implemented several policy initiatives that ensure commitment to the UN’s 2030 Agenda for Sustainable Development—“A Sustainable Europe for a Better World: A European Union Strategy for Sustainable Development” [17], ‘Strengthening Innovation in Europe’s Regions: Towards resilient, inclusive and sustainable growth at territorial level’ [18], “A Union that strives for more. My agenda for Europe: political guidelines for the next European Commission 2019–2024” [19], “A New Plan for Europe’s sustainable prosperity and competitiveness” within the 2026 Commission Work Programme. These initiatives offer a long-term vision for regional development, focusing on innovation, cohesion, and sustainability at all levels. For the current programming period for 2021–2027, the green dimension [13], emphasizing a complete sustainability approach to regional development, accompanies economic and social dimensions. In this context, S3 is an enabling condition for EU countries during the ongoing programming period [9]. This approach to innovative regional development has earned high recognition, and experts call for its mandatory status to be maintained for the next programming period, 2028–2034 [20,21][20][21]—although this question remains open during the ongoing debates.
In practice, EU Member States have to develop S3 strategies to access funding from the European Regional Development Fund (ERDF) [7] and, at the same time, integrate the SDGs into their strategic policies at national, regional, and local levels [22,23][22][23]. Given regional disparities in terms of development levels, available resources, and economic structures, a place-based approach to regional policy-making is of high importance [12]. At its core, the S3 approach to regional development offers place-based, creative, and forward-looking solutions for how regions can build their competitive advantage in line with sustainability principles through employing local capabilities. At the sectoral level, regions prioritize certain economic sectors to enhance their competitiveness and wellbeing (for S3 priorities in the EU regions see [24]. The selection of investment areas is determined by priorities based on key challenges, regional specialization of production systems, and productive sectors with high development potential (for example, see [25]. Based on the practical implementation of S3 strategies, it is possible to highlight several illustrative examples. One notable example relates to the exploitation of small- and medium-sized enterprises’ potential in innovative sustainable product development [23]. Another example highlights the role of digital technologies in developing smart villages [26]. An additional example emphasizes the transfer and commercialization of innovative sustainable solutions [27]. Overall, around seventy billion euros were invested in research and innovation during the implementation of S3 strategies for the 2014–2020 and 2021–2027 programming periods [7].
S3 strategies are understood as drivers for research and innovation in less-developed regions, as well as for the industrial transition [12]. S3 has broad financial support through the European Regional Development Fund (ERDF) (part of the Cohesion Policy), the Interregional Innovation Investment Instrument (I3), which makes this practice long-term oriented. Under modern conditions, investments have to be guided by the Sustainable Development Goals (SDGs), which require a shift in focus from purely economic growth and competitiveness to a sustainable, digital, and inclusive economy.
This entry outlines the essence of S3 in regional development and broadens its understanding in the context of the sustainability agenda. The entry also contributes to the clarification of terms used for the S3 approach, which is important in the context of the high diversity of regional, sectoral, and institutional stakeholders involved in the process. Given a large volume of academic and policy studies on S3, this entry contributes to a coherent body of knowledge that may serve regional actors from different domains. A concise and step-by-step explanation of S3 from terminological, theoretical, and policy-making perspectives provides easy-to-understand material also for non-experts in the field.
To achieve these aims, this entry employs a qualitative methodology based on desk research and conceptual analysis. It analyses academic literature and EU policy documents to outline the core essence of S3 and its transition to S4.
The first section introduces readers to the relevance and usefulness of the S3 approach in regional development. The second section answers the question of what S3 is by paying attention to the terminology, theoretical framework, policy-making approach, and result-oriented practice. The third section explains the essence of S4, paying attention to terms, reasons, features, and benefits of the transition from S3 to S4. The fourth section offers discussion and concluding remarks. In conclusion, the author also builds upon existing definitions to offer a refined definition of the term ‘smart specialization strategy’ in the context of the sustainability agenda.

References

  1. Storper, M.; Iammarino, S.; Rodriguez-Pose, A.; Diener, A. The Regional Development Trap in Europe. 2022. Available online: https://cepr.org/voxeu/columns/regional-development-trap-europe (accessed on 29 July 2026).
  2. Garashchuk, A.; Isla-Castillo, F.; Podadera-Rivera, P. Economic cohesion and development of the European Union’s regions and member states—A methodological proposal to measure and identify the degree of regional economic cohesion. Socio-Econ. Plan. Sci. 2023, 88, 101621.
  3. Assembly of European Regions. About Agenda 2030. 2020. Available online: https://regions2030.com/about#goal (accessed on 29 July 2026).
  4. United Nations. The 17 Goals. Department of Economic and Social Affairs. Sustainable Development. Available online: https://sdgs.un.org/goals (accessed on 29 July 2026).
  5. Flynn, S. Economics of Regional Development. 2021. Available online: https://www.ebsco.com/research-starters/economics/economics-regional-development (accessed on 29 July 2026).
  6. ScienceDirect. Regional Economics Development. Available online: https://www.sciencedirect.com/topics/social-sciences/regional-economics-development (accessed on 29 July 2026).
  7. Brent, T. Save Smart Specialisation R&D Strategies, Regional Associations Tell EU. 2026. Available online: https://sciencebusiness.net/news/cohesion-policy/save-smart-specialisation-rd-strategies-regional-associations-tell-eu (accessed on 29 July 2026).
  8. Tsipouri, L. S3 Implementation—Past and Future. Policy Brief No. 1. S3 Community of Practice. 2023. Available online: https://ec.europa.eu/regional_policy/sources/policy/communities-and-networks/s3-community-of-practice/S3_Implementation%E2%80%93Past_and_Future.pdf (accessed on 29 July 2026).
  9. European Commission. About S3. Available online: https://ec.europa.eu/regional_policy/policy/communities-and-networks/s3-community-of-practice/about_en (accessed on 29 July 2026).
  10. European Parliament. Smart Specialization. 2013. Available online: https://epthinktank.eu/2013/08/14/smart-specialisation/ (accessed on 29 July 2026).
  11. OECD. Environment, Society and Economy. Available online: https://www.oecd.org/en/topics/environment-society-and-economy.html (accessed on 29 July 2026).
  12. Foray, D.; Morgan, K.; Radosevic, S. The Role of Smart Specialisation in the EU Research and Innovation Policy Landscape. Available online: https://ec.europa.eu/regional_policy/sources/brochure/smart/role_smartspecialisation_ri.pdf (accessed on 29 July 2026).
  13. Landabaso Álvarez, M. From S3 to S4: Towards Sustainable Smart Specialisation Strategies. European Commission. 2020. Available online: https://ec.europa.eu/newsroom/jrcseville/items/670313 (accessed on 29 July 2026).
  14. Provenzano, V.; Seminara, M.R. S4 + and the Sustainability Dimension for a New Territorial Perspective. In New Metropolitan Perspectives. NMP 2022. Lecture Notes in Networks and Systems; Bevilacqua, C., Balland, P.A., Kakderi, C., Provenzano, V., Eds.; Springer: Cham, Switzerland, 2023; Volume 639.
  15. Alliance of Regional Innovation Ecosystems Based on Smart Sustainable Strategies (ARIES4). Background. 2026. Available online: https://aries4.eu/en/about-us/background (accessed on 29 July 2026).
  16. EBSCO. Sustainable Development: Overview. 2024. Available online: https://www.ebsco.com/research-starters/environmental-sciences/sustainable-development-overview#full-article (accessed on 29 July 2026).
  17. European Union. Strategy for Sustainable Development. 2001. Available online: https://eur-lex.europa.eu/EN/legal-content/summary/strategy-for-sustainable-development.html (accessed on 29 July 2026).
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  20. RIS3.cz. Open Letter: Why It Is Necessary to Protect and Strengthen Smart Specialization. 2026. Available online: https://ris3.gov.cz/en/news/open-letter-why-it-is-necessary-to-protect-and-strengthen-smart-specialization (accessed on 29 July 2026).
  21. Chomicz, E. Open Letter on the Future of the EU Budget (2028–2034). Ensuring Europe’s Innovation and Competitiveness Leadership. European Regions Research and Innovation Network. 2026. Available online: https://errin.eu/system/files/2026-03/Open%20Letter%20on%20the%20Future%20of%20the%20EU%20Budget.pdf (accessed on 29 July 2026).
  22. European Commission. EU Approach to SDGs Implementation. Available online: https://commission.europa.eu/strategy-and-policy/sustainable-development-goals/eu-approach-sdgs-implementation_en#working-together-towards-the-sdgs (accessed on 29 July 2026).
  23. Interreg Central Europe. Circular Design and Development of Sustainable Products in 4 Key Sectors in Central Europe. 2024. Available online: https://www.interreg-central.eu/wp-content/uploads/2025/03/Analysis-of-S3-regional-strategies.pdf (accessed on 29 July 2026).
  24. European Commission. S3 CoP Observatory. Available online: https://ec.europa.eu/regional_policy/assets/s3-observatory/index_en.html (accessed on 29 July 2026).
  25. General Directorate for Knowledge Economy, Labour and Enterprise, Emilia-Romagna Region. Smart Specialisation Strategy S3 Emilia-Romagna Region 2021–2027. 2021. Available online: https://www.interregeurope.eu/sites/default/files/2025-09/IT_Emilia-Romagna_S3_ENG.pdf (accessed on 29 July 2026).
  26. Ocsko, E. Smart Rural Areas in the 21st Century: Executive Summary. Directorate-General for Agriculture and Rural Development (European Commission). 2023. Available online: https://op.europa.eu/en/publication-detail/-/publication/253b3d69-68c1-11ee-9220-01aa75ed71a1/language-en (accessed on 29 July 2026).
  27. Ministry of Smart Administration and Regional Development. Interreg 20 Success Story: Project ecoRIS3—Policy Instruments for Supporting Local and Regional Innovation Ecosystems. 2024. Available online: https://www.esfondi.lv/en/implemented-projects/inspirational-stories/interreg-20-success-story-project-ecoris3-policy-instruments-for-supporting-local-and-regional-innovation-ecosystems (accessed on 29 July 2026).
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