Constructing regional advantage: Towards state-of-the-art regional innovation system policies in Europe?

The core arguments of the constructed regional advantage (CRA) approach stem from the work that started in Brussels in an expert group appointed by DG Research of the EU Commission. In 2006, DG Research launched the final report on "Constructing Regional Advantage" as the new way of taking on and combating new challenges and problems of globalization for European regions (Asheim et al., 2006). CRA means turning comparative advantage into competitive advantage through an explicit policy push promoting a Chamberlinian monopolistic competition based on product differentiation creating unique products, an assumption which was fundamental for Porter's cluster approach also. While building on the lessons from the dynamic principle of the theory of competitive advantage (Porter, 1990, 1998) as well as of the innovation system approach (Lundvall, 2008) emphasizing that competitiveness can be influenced by innovation policies and supporting regulatory and institutional frameworks, the constructed advantage approach recognizes the important interplay between industrial and institutional dynamics as well as calls for greater attention to multi-level governance. What is especially highlighted is the role of a proactive public-private partnership and impact of the public sector and public policy support by acknowledging to a greater extent the importance of institutional complementarities in knowledge economies. This approach represents an improved understanding of key regional development challenges as well as a better anticipation and response to the problems by addressing system failures of lack of connectivity in regional innovation systems (RIS).