Regional innovation systems

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Topic dossier · Innovation Nexus

Regional innovation systems

Innovation is concentrated in place. A regional innovation system is the set of firms, universities, public bodies and intermediaries within a region and the rules that link them, and it shapes whether new technologies are created, adopted or passed by. This page sets out how regional capacity builds and diverges, how technology diffuses between leading and lagging regions, and what evidence the regional, national and supranational institutions that fund place-based policy can use.

Systems · around this subjectDesign, not a record

Regulatory sandbox board

Regional innovation systems · Regulatory sandbox · Cohort 4

Two pilots near exit testGRF · Innovation Nexus

Cohort

Parametric micro-coverInsuranceAgreed3 of 12Testing
Flood sensor data marketDataPartial4 of 12Conditions
AI permit triagePublic serviceAgreed4 of 12Testing
Drone deliveries, medicalLogisticsAgreed12 of 12Exit test

Exit criteria

Consumer harm
none recorded
Evidence
independent evaluation
Rule change
regulator decides
Wind-down
plan on file

Sandbox cycle

  1. Applyeligibility
  2. Admitsafeguards
  3. Testbounded
  4. Evaluateindependent
  5. Exitor rule change
  6. Publishlessons
Regulatory sandbox board: the screen's structure, terms and states for Regional innovation systems.Placeholder names and illustrative values; a design, not a record or a live system.

Fig.Regulatory sandbox board. Design wireframe with placeholder names and illustrative values, not a record or a live system.

01In brief

The short answer.

A regional innovation system is the set of firms, universities, public bodies and intermediaries within a region and the rules that link them. It shapes whether new technologies are created, adopted or passed by. Capacity concentrates through agglomeration and related variety, and diffusion lags with distance, so copying leading regions rarely works.

02Geography

Connected activity in the contiguous United States.

Night-time lights and population density, the footprint of electrified, connected activity, framed on the contiguous United States as an example geography for this subject; each layer is a dated NASA product.

The interactive map needs JavaScript; the layer list and sources are below.

Layers 2

Connected activity

Latest available

NASA GIBS / EOSDIS · ASTER GDEM (METI, NASA) · Natural Earth

Loading the latest NASA imagery.

Drag to move. Ctrl or ⌘ and scroll, pinch or the buttons to zoom; hover for the values under the pointer; reset returns to the region.

Night-time lights and population density, the footprint of electrified, connected activity, framed on the contiguous United States.Satellite and model products as NASA publishes them, each with its own date; indicators, not assessments of any place; claim ceiling INTEGRATED.

Data: NASA GIBS · ASTER GDEM · Natural EarthSources and licences

  • We acknowledge the use of imagery provided by services from NASA's Global Imagery Browse Services (GIBS), part of NASA's Earth Science Data and Information System (ESDIS). Colours redrawn from the published colour map; values averaged into H3 cells where shown (modified). NASA open data
  • We acknowledge the use of imagery provided by services from NASA's Global Imagery Browse Services (GIBS), part of NASA's Earth Science Data and Information System (ESDIS). Colours redrawn from the published colour map; values averaged into H3 cells where shown (modified). NASA open data
  • VIIRS Black Marble night-time lights, NASA Goddard Space Flight Center; distributed by the NASA Level-1 and Atmosphere Archive and Distribution System (LAADS DAAC); imagery via NASA GIBS. Colours redrawn from the published colour map; values averaged into H3 cells where shown (modified). NASA open data
  • Center for International Earth Science Information Network (CIESIN), Columbia University. 2018. Gridded Population of the World, Version 4 (GPWv4): Population Density, Revision 11. NASA Socioeconomic Data and Applications Center (SEDAC). Licensed under CC BY 4.0. Colours redrawn from the published colour map; values averaged into H3 cells where shown (modified). CC BY 4.0
  • VIIRS near-real-time products (flood, land surface temperature, snow cover, corrected reflectance), NASA LANCE; imagery via NASA GIBS. Colours redrawn from the published colour map; values averaged into H3 cells where shown (modified). NASA open data
  • ASTER GDEM is a product of METI and NASA (ASTER Global Digital Elevation Model V003, NASA LP DAAC); imagery via NASA GIBS. Colours redrawn from the published colour map; values averaged into H3 cells where shown (modified). NASA open data
  • Made with Natural Earth. Free vector and raster map data @ naturalearthdata.com. Public domain

Layers and dates

  • Night-time lights, daily: VIIRS Black Marble (VNP46A2), NASA LAADS DAAC · 12 Oct 2026
  • Population density, 2020: Population: CIESIN, Columbia University, Gridded Population of the World v4.11 (2018), NASA SEDAC, CC BY 4.0 · static
  • True colour: VIIRS NOAA-20 corrected reflectance, NASA LANCE · 13 Oct 2026

03The question

Regional innovation systems: how the risk develops.

Regional capacity and technology diffusion. The dossier below sets out how the risk develops, what is measured, where the data come from, how it is modelled and who decides.

Mechanism

Agglomeration

Skilled people, specialised suppliers and investors cluster where others already are. The returns to concentration are real, and they pull capacity away from smaller and peripheral places.

Mechanism

Related variety

Regions diversify most easily into activities close to what they already know. Policy that leaps to unrelated frontier sectors often lacks the skills and suppliers to take hold.

Mechanism

Diffusion lags with distance

Technologies reach lagging regions late, through supply chains, branch plants and returning graduates. Weak broadband, thin advisory services and small firms slow adoption further.

Mechanism

Governance capacity

Regions differ in their ability to design, co-fund and evaluate programmes. Funds allocated to places without that capacity are often underspent, or spent on what is easy rather than what is needed.

04Key terms

Terms used on this page.

Each term as this page uses it. Where a standard-setting body defines the term, the wording follows that body.

TermDefinition
Smart specialisationAn EU approach in which regions choose research and innovation priorities that build on their existing strengths.
Agglomeration economiesBenefits firms gain from locating near each other, such as shared labour pools and knowledge spillovers.
Related varietyDiversity of industries that share skills or technologies, which helps regions diversify.
05Indicators

What is measured, and how well.

Each indicator carries its unit, its cadence, the kind of source behind it and the evidence label a value would carry. No values are shown: a programme supplies them under its own authority.

IndicatorUnitCadenceSource typeLabel
R&D expenditure by region and sectorpercent of regional GDPbiennialRegional R&D statisticsOFFICIAL
Regional innovation performance groupcategory relative to the EU averagebiennialRegional Innovation ScoreboardESTIMATED
Patent applications by inventor regioncount per million inhabitantsannualRegionalised patent dataESTIMATED
Employment in knowledge-intensive services and high-technology manufacturingpercent of regional employmentannualLabour force surveysOFFICIAL
Enterprises with fast broadbandpercent of enterprisesannualEnterprise ICT usage surveysOFFICIAL
Absorption of regional innovation fundspercent of allocation committed and paidannualFund management dataOFFICIAL
Smart specialisation priority domainscount of registered domainsper programming periodSmart specialisation strategiesDECLARED
06Canvas

From sources to decisions.

The topic as a computational graph: named sources feed the methods, an evidence review gates the outputs, and the decisions stay with the authorities that hold them.

Pipeline canvas · Regional innovation systems as a run graphDesign, not a record
Regional innovation systems: an innovation through readiness gatesAn idea is tested as a concept, validated in the lab, piloted with an owner under safeguards and reviewed for adoption; each gate asks for evidence of effect, safety and cost before the next stage. Design of the process, not a record of a run.

Fig. 02Nodes carry their type, two metric rows and a state; connectors show what feeds what; dashed frames name the owners; the timeline is the cadence. Design of the pipeline, not a record of a run.

07Sources

Where the evidence comes from.

Named public datasets and institutional records, each with its licence class. Sources by agreement are used only under their terms and never republished.

SourceWhat it givesLicence class
Eurostat regional science and technology statisticsR&D, human resources in science and technology and patents at NUTS levelOpen, attribution (Eurostat reuse policy)
European Commission Regional Innovation ScoreboardComparative regional innovation performanceFree reuse, attribution
OECD Regional Database and OECD REGPATRegional economic indicators and patents linked to regionsOpen, attribution (OECD terms); REGPAT on request
JRC Smart Specialisation PlatformRegional priorities, strategies and peer reviewsFree reuse, attribution
European Commission Cohesion Open Data PlatformPlanned and spent cohesion funds by programme and themeFree reuse, attribution
US National Center for Science and Engineering Statistics (NSF)State-level R&D, workforce and innovation indicatorsPublic domain
08Decisions

Who decides, and what the evidence serves.

Innovation Nexus prepares evidence. The decisions below are taken by the authorities named, under their own rules, and never by the platform.

Who decidesThe questionEvidence this page serves
Regional governments and regional development agenciesWhich domains to prioritise in a smart specialisation or regional innovation strategyCapability profiles with related activities; priority choices of comparable regions
National ministries responsible for regional policyHow to allocate national innovation funding across regions without hollowing out lagging placesRegional indicators with their uncertainty; diffusion analyses
European Commission (DG REGIO and the Joint Research Centre)What conditions to attach to cohesion funding for innovation and how strategies are reviewedAbsorption data; peer reviews; evaluation designs
Managing authorities of structural fundsWhich calls to run and how to build the capacity to spend wellGovernance capacity assessments; programme designs

Outputs this topic produces

  • Regional capability profiles showing related activities and gaps
  • Diffusion analyses tracing how technologies reach lagging regions
  • Programme designs for place-based innovation with governance capacity assessed
  • Peer-learning formats linking regional authorities across borders
09Core questions

What experts ask.

Regional questions ask why capacity concentrates and how it spreads.

  • What are the region's strengths, specializations and gaps?
  • How quickly do new technologies reach firms and public services in the region?
  • Do regional institutions, such as universities and development agencies, connect to local firms?
  • How do national policies affect regions differently?
  • Can lagging regions build capability, or does policy reinforce existing leaders?
10Mechanisms

Mechanisms and drivers.

Innovation tends to cluster because of shared labour pools, specialized suppliers and knowledge spillovers between nearby firms. These advantages compound, so leading regions pull further ahead. Diffusion to other regions depends on their absorptive capacity, infrastructure, skills and the links between local firms and outside sources of knowledge.

Regional strategies often build on existing strengths, a principle sometimes called smart specialization, rather than copying leading regions. Their success depends on regional institutions with the capability to design and sustain them, which is itself unevenly distributed. Regions that depend on a single industry are especially exposed when a technology shift erodes it, which links regional innovation to economic resilience.

11Methods and data

How it is studied, and where the methods stop.

Method or dataWhat it showsLimits
Regional innovation indicatorsComparative performance across regionsComposite indices hide specific weaknesses
Technology adoption surveysDiffusion among firms and servicesPeriodic and often national rather than regional
Economic complexity and specialization analysisCapabilities and related diversification opportunitiesBased on trade and employment data that miss services
Policy evaluationEffects of regional programmesLong time lags and many confounding factors
12Methods

How it is studied, and what the methods cannot say.

  1. Policy, institutional and decision scienceMandate and gap mapping · Programme evaluation design · Comparative regulatory analysisApplied here
  2. Systems engineeringRequirements traceability for AI governance · Readiness gates for transfer programmesApplied here
  3. Artificial intelligence and machine learningCoding policy and legal texts · Mapping patents and papers to technologiesApplied here
13Questions

Questions and answers.

What is smart specialisation?
An approach in which regions choose a limited set of priority domains from existing strengths, through a process of discovery with firms and researchers, and focus innovation funding on them.
Why not copy the policies of leading regions?
Leading regions built capacity over decades on particular assets. Lagging regions usually gain more from adopting existing technologies and building on related strengths than from imitating frontier strategies.
Is this evidence only for European regions?
No. European data are the most harmonised, but the methods apply to any region with R&D, patent, employment and business data. Gaps elsewhere are stated.
Why does innovation concentrate in a few places?
Because talent, specialized suppliers and knowledge spillovers reinforce each other, giving established clusters lasting advantages.
Can lagging regions catch up?
Some do, usually by building on existing strengths, investing in skills and connecting local firms to external knowledge. There is no single formula.
Does Innovation Nexus work with specific regions?
Regional work is shown on the regions page only where a programme record supports it.
Innovation Nexus

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