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An undesirable result of the rapid implementation of smart specialization into the framework of European Union Cohesion Policy was that it left several practical issues unanswered. An important unanswered issue is the implementation of economic impact assessment in a smart specialization policy context. Integrating entrepreneurship and interregional network policies into an economic modelling framework is considered among the most prominent challenges. This paper introduces how these two policies are implemented in the GMR-Europe (geographic, macro and regional) model. The simulations highlight that smart specialization policy targeting the development of entrepreneurship and knowledge networks is not equally successful in all regions.

Framework Programs (FPs) of the European Union (EU) finance collaboration among research units located in different parts of Europe and as such they mediate the flow of a significant amount of knowledge across distantly located European regions. Contrary to expectations, no evidence has been found in the literature on the supposed positive regional innovation impact of FP participation. We assume in this article that the overall missing impact of EU FP participation on regional patenting masks an important spatial regime effect. Our results are supportive of this assumption. While FP research subsidies act as a substitute for funding from other sources in regions of old EU member states, innovation in lagging regions in Central and Eastern Europe tends to rely more on the external knowledge transferred via FP-funded research networks to compensate for their less developed local knowledge infrastructures. Our findings are important, as they suggest that, in combination with other policies, strengthening research excellence and international scientific networking in relatively lagging regions could be a viable option to increase regional innovativeness.

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