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Catalyse local, regional and national (supra-national) levels of government

Political commitment was an important consideration in the case studies. This implies commitment from various levels of government depending on the institutional context. In some cases that commitment is high and balanced on both sides of the border, such as the case of Ireland-Northern Ireland (United Kingdom). In others, such as Helsinki-Tallinn, the Bothnian Arc and Hedmark-Dalama, that political commitment is perhaps at a balanced level on both sides but not as strong as in other cases, for various reasons. The area of the TTR-ELAt shows varying levels of commitment, which is almost inevitable given the large number of jurisdictions that comprise the area. But political commitment is not enough. It needs to be matched by a more bottom-up interest by the firms, higher education institutions (HEIs) and other stakeholders supporting innovation so that public efforts are not in vain. Different tools, beyond regional innovation policy, may be required to build that sense of importance among the residents that elect the politicians who, in turn, have to justify the use of funds for cross-border activities.

Regions and cities need to identify the opportunities to collaborate cross-border

The effects of cross-border collaboration are generally felt most strongly at the local level. Those municipalities on the border see the benefits and costs associated with cross-border movements. Mayors feel the importance of the border with respect to local labour markets, spatial planning, housing markets, firm location, etc. They need to find concrete solutions to tangible “border problems” important to their constituents. In countries with a strong role for inter-municipal associations, cross-border co-operation is often pursued by local actors. In Germany, the Kreise (association of municipalities) are the driving force behind cross-border initiatives in most cases. In other countries (such as Italy or France), cross-border regions are a domain pursued by regional or provincial authorities given the greater level of municipal fragmentation (AEBR, 2010). Local level collaboration is therefore at the heart of these day-to-day cross-border efforts.

The cross-border collaboration for innovation in some of the case studies, and other international examples, builds on strong support by mayors. The collaboration for Helsinki-Tallinn is driven in large part by concerns and motivations of the respective city governments. In the Bothnian Arc, the mayors of the two largest cities (Oulu, Finland and Lulea, Sweden) view this collaboration as important for their respective success. In this case, their desire to be visible on the global map for innovation is their primary interest, despite being a 300 kilometre drive from each other. In San Diego (United States), the previous mayor was a leader in promoting greater cross-border collaboration with Mexico for the area’s economic development, such as opening an office in neighbouring Tijuana, suggesting that “we need to make the border the centre, not the end” (Medina, 2013).1

Regions, as opposed to localities, are a more appropriate scale for developing an innovation strategy that builds on the workforce, industrial base and research assets. A city is often only part of a larger metropolitan area that is a functional economic unit. Typically the core of cities specialise more in the knowledge-intensive services while surrounding areas may be the location for other industries, such as high-technology manufacturing. A regional scale is likely to include a larger set of firms, universities, technology centres and other assets that are all needed to develop a more diversified set of actors for a regional innovation system. In the Centrope area, for example, knowledgeintensive services are strongly concentrated in the capital cities Vienna (Austria) and Bratislava (Slovak Republic), while high-tech manufacturing is located in Hungarian and Czech regions. Universities and technology parks may also be located outside of the main city. In many cross-border areas, the settlement pattern is not necessarily centred around one core city, which also implies a greater need for a more regional approach to defining those cross-border areas for innovation.

Due to their own initiative or at the impulsion of a higher level of government, regions generally have some form of economic or innovation strategy. The development of such a strategy therefore needs to take into account the relevant conditions for supporting a region’s growth, including building on strong resources and opportunities in proximity. Regions located in the European Union have been tasked with developing a “smart specialisation” strategy as a way of setting priorities, based on unique regional assets and strengths in a national or global context, for innovation-driven economic growth (European Commission, 2012).

The potential for cross-border governance approaches is also based in part on the regional competencies for developing and implementing innovation policy instruments. For example, the sub-national share of public STI spending ranges from less than 10% in many countries to around 50% in Germany or the People’s Republic of China to around 80% in Belgium (OECD, 2011). Regions that have considerable competencies can themselves choose to devote budgets to cross-border-related efforts. Other regions may have the ability to identify cross-border potential, but have no funding or instruments to do this themselves. In those instances, the role of national governments becomes even more important.

In the case study regions, the regional competencies were generally weak or unbalanced, thus making national commitment particularly important. In other words, there were no cases where the regions on both sides of the border had the capability to develop, design and implement the instruments on their own. The imbalance in competencies also led to frustrations in some examples, where one side was better equipped to go forward but had to be patient for the other side to work through its multi-level governance structure. This is true in other cross-border areas as well, such as the more autonomous Swiss cantons collaborating with French regions. Another example is in the Centrope cross-border area, where the Austrian and Czech regions have own resources and institutions to formulate regional innovation policies and strategies, while the Slovak and Hungarian regions have a much weaker institutional and financial basis to do so.

The local and regional levels need to identify and articulate the ways that national policy and programme rules can help them be more effective in cross-border initiatives. Even in cases where there is a significant degree of decentralisation to regions for innovation policy, there are likely some issues that will still fall in the domain of the national level. The Oresund Committee, for example, established a common list of issues that require national action to address, including considerations for taxes, pensions, labour market issues, car registrations, cross-border transport, visas for non-EU citizens, etc. Several issues identified by the committee have been addressed.2 Other cross-border areas have sought different forms of awareness raising (or lobbying) to national policy makers to make their cross-border work easier.

National policy makers can help and/or hinder cross-border collaboration for innovation

Many national governments recognise in principle the importance of cross-border collaboration for the competitiveness of their countries. The Dutch Ministry of Economic Affairs has financed cross-border efforts around one of its national technology hotspots, Eindhoven. The French government supports the Mission Operationnelle Transfrontalitre (MOT) that provides services to its cross-border areas (Box 2.1). Hungary, which borders seven countries, has supported initiatives that seek to build on such cross-border ties, such as the Wekerle Plan for a cross-border economic development strategy in the Carpathian Basin as a source of growth for Hungarian-owned SMEs, or support to the Central European Service for Cross-Border Initiatives (Box 2.2). The federal governments of Switzerland and Canada have also noted the importance of federal and sub-national action to strengthen cross-border integration in the interest of national competitiveness (Box 2.3).

Box 2.1. Mission Operationnelle Transfrontaliere (MOT): France

The French Mission Operationnelle Transfrontaliere (MOT) was established in 1997 by the French Inter-Ministerial Committee of Spatial Planning and Development (CIADT). The MOT was then created as an inter-ministerial body, supervised by DATAR (the French Inter-Ministerial Delegation for Spatial Planning and Regional Attractiveness) and started working on five pilot cross-border areas: Lille Metropole (France/Belgium), Alsace (France/Germany/Switzerland), Geneva area (France/Switzerland), the Metropole Cote d’Azur region (France/Italy) and the Bayonne-San Sebastian area (France/Spain). Over the years, the MOT has become responsible for identifying and bringing together institutions and actors in charge of cross-border co-operation in France and abroad.

The MOT’s primary goal is to promote cross-border efforts between French local jurisdictions and their neighbouring regions across the border, by means of concrete projects and initiatives. The MOT assists French institutions aiming at establishing cross-border co-operation and promotes the visibility of cross-border areas at both national and EU level. The MOT gives advice and guidance to those authorities and organisations (both in France and the bordering countries) affiliated to the organisation, for the development of common initiatives. It helps cross-border areas in multiple steps of the project: from the definition of projects and programmes to the phases of analysis and implementation. It actively provides advice to all project partners and seeks a balanced involvement of the different stakeholders in the project development.

During each intervention, the MOT adapts its expertise to different regions and areas, by bringing to the cross-border area multi-national and interdisciplinary teams. The MOT facilitates the close involvement of all actors and stakeholders at each step of the project and promotes the engagement of the civil society. Its support lasts until the relevant actors have become independent in political, juridical, technical, financial and operational terms so as to guarantee the long-term sustainability of projects.

Over time, the MOT has been able to build an international network of cross-border areas and stakeholders. The MOT’s networks involve organisations over 11 countries in Europe, which include municipalities and networks of municipalities, national and regional authorities, cross-border entities and private sector organisations.

The MOT regularly organises seminars and working groups, where cross-border stakeholders meet and discuss different themes associated with cross-border governance and policy making. It also publishes documents and reports on cross-border issues, like the recent methodological guide on cross-border governance and policy programmes: Methodological Guidebook: Articulate Cohesion Policy, Governance Structures and Cross-Border Territorial Approaches.

Sources: Mission Operationnelle Transfrontaliere (MOT) (2012), Methodological Guidebook: Articulate Cohesion Policy, Governance Structures and Cross-Border Territorial Approaches, Paris, November.

Box 2.2. Central European Service for Cross-Border Initiatives (CESCI)

Modeled after the French Mission Operationnelle Transfrontaliere, the Central European Service for Cross-Border Initiatives (CESCI) was founded in 2009 to serve cross-border co-operation efforts in Hungary and Central Europe. Association membership includes local and regional municipalities, professional bodies and individuals. The organisation’s objectives include:

  • • provide professional support for cross-border co-operation along the Hungarian borders as well as in several other states of Central and Southeast Europe
  • • incorporate the Euroregions, the European Groupings of Territorial Co-operation (EGTCs) and the local and regional authorities participating in the cross-border co-operation into a network
  • • promote good examples from Western European initiatives
  • • establish strategic co-operation with the competent decision-making and decision-preparing institutes of the European Union as well as with Northern and Western European networks created for the same purpose
  • • strengthen the internal cohesion and mutual rapprochement within the region by establishing partnerships among the nations of Central and Southeast Europe.

CESCI seeks to promote a holistic approach to strategic planning in cross-border areas that takes into account territorial, social and economic cohesion. It also provides research and training on cross-border issues as well as support for institution and project development to secure long-term, sustainable co-operation in support of its objectives.


Box 2.3. The importance of cross-border regions: Switzerland and Canada Switzerland

The State Secretariat for Economic Affairs has noted several rationales for seeking to strengthen cross-border regions involving its cantons, as highlighted in a recent report.

Of the 26 cantons, 15 share a border with a neighbouring country. Political, cultural and especially economic relations are correspondingly close. In 2010, 75% of Switzerland’s nominal gross domestic product was generated in those 15 cantons. Not all border regions are alike, however, they range from metropolitan conurbations to alpine zones.

The border regions offer good prospects for cross-border collaboration, generating benefits on both sides of the border and also having effects beyond those territories. Frontiers also give rise to so-called arbitrage opportunities: businesses can exploit mismatched conditions on each side of the frontier: differences in price, taxation, wages and labour costs, for example - and also differing technological capabilities. Territorial proximity to neighbouring countries can constitute a competitive advantage (contact function), in that border regions become a starting point for cross-border networks or take on specific functions, such as transport hubs or transit centres (known as gateways).

Appropriate institutional frameworks are crucially important to regional economic success. Regions are not pre-ordained territorial units, but spaces that develop through social and economic exchange. Fields in which the actions of the federal government are of central importance to the economic development of the border regions include: enhancing locational quality and competitiveness; the labour market; foreign trade; infrastructure; and education, research and innovation. It is not only the federal government that makes a contribution to regional economic integration but also supra-regional and cantonal bodies.

Box 2.3. The importance of cross-border regions: Switzerland and Canada (cont.) Canada

The Canadian government has recognised the importance of cross-border regions, particularly since a significant share of its population lives within short driving distance to the United States (US).

The report Beyond the Border: A Shared Vision for Perimeter Security and Economic Competitiveness highlights opportunities for Canada and the United States to work bilaterally to achieve such goals. One of the four themes in the Beyond the Border Action Plan for bilateral Canada-US relations is trade facilitation, economic growth and jobs, including through innovation.

In addition, the Government of Canada’s Policy Research Initiative (PRI) issued a report: The Emergence of Cross-Border Regions Between Canada and the United States: Reaping the Promise and Public Value of Cross-Border Regional Relationships. The report notes some actions for the federal government to take, the important role of the sub-national level and the need for coherence between the two.

  • 1. Stronger and more diversified trade linkages, higher correlation in economic activity and lower border effects (resistance to trade due to the presence of the border) within cross-border regions emphasise the great extent to which the economies of neighbouring provinces and states depend on each other.
  • 2. Analysis using socio-cultural values shows that the northeast and northwest coastal regions are especially characterised by shared values. The socio-cultural values of Atlantic Canada are closer to those of the US east coast, while Alberta and British Columbia have socio-cultural values that are closer to those of the western parts of the United States.
  • 3. Regional cross-border networks and organisations have proliferated since NAFTA, and provide a useful vehicle for bi-national business and community groups to work together on issues of mutual interest, often with the ultimate aim of problem solving or creating local competitive advantages in the larger North American and global economies.

Sources: State Secretariat for Economic Affairs SECO (2012), The Foreign Economic Policy Report 2012, Berne,; Government of Canada (2011), Beyond the Border: A Shared Vision for Perimeter Security and Economic Competitiveness, report-paf rapport-eng-dec2011.pdf; Government of Canada (2009), The Emergence of Cross-Border Regions Between Canada and the United States: Reaping the Promise of Public Value of Cross-Border Regional Relationships, Policy Research Initiative, Ottawa, Ontario,

National regulatory and administrative barriers nevertheless hamper collaboration, not only on innovation, but in a more general sense for many cross-border activities. Differences in regulations and administrative provisions from one country to another create difficulties for the mobility of goods, services, people and capital and for the development of joint actions. Barriers to trade impede firm interactions (Box 2.4). Labour market differences in terms of certification requirements, benefit schemes, pension rights or tax systems are barriers for people to work across the border. This severely limits the possible benefits for cross-border efforts to promote innovation given the important role of skilled workers in knowledge-based economies. Different legal and administrative rules generate complexity, burdens and costs for workers and their employers.

National governments in most countries are still responsible for the bulk of science, technology and innovation funding. National governments determine the nature, priorities, funding levels and eligibility rules for many innovation-related programmes. Such rules can either facilitate or render difficult to impossible the participation of actors from both sides of the border. The issue may be the timing of the funding cycle, the sectoral or technological priorities for innovation funding, the eligibility rules or the reporting requirements. Efforts to better mainstream the cross-border dimension in national programmes is a way to tap these much larger funding sources to the benefit of a region’s development.

Box 2.4. Cross-border trade barriers: Addressing the innovation enabling environment

Barriers to cross-border trade of firms have been highlighted by analysis on several cross-border areas. According to the Nordic Innovation Center, trade barriers are defined as all kinds of measures from national governments that hamper or complicate the trade of goods and services between countries. They cover:

  • • technical rules and standards that place requirements on goods in the form of technical qualities
  • • testing, control, certification, labelling, packaging, etc.
  • • requirements for import licenses, import quotas or import bans
  • • certificates of origin, foreign exchange regulations
  • • company and tax laws
  • • tax regulations, for instance environmental
  • • demands on/of investments
  • • rules for setting up companies as well as authorisation requirements.

An analysis performed by InterTradeIreland across the island of Ireland on the barriers expressed by companies to cross-border trade were typically:

  • • Difficulty in sourcing equivalent regulations: Companies have to use a variety of sources to identify and map the equivalent legislation North and South. SMEs, in particular, have difficulty in distinguishing the comparable legislation.
  • • Duplication requirements in relation to compliance matters: A business which holds or processes data in Northern Ireland and is also established in Ireland has to register with the data commissioner and maintain that registration appropriately in both jurisdictions.
  • • Subtle but important differences in regulation essentially aimed at the same mischief:

Pursuant to the distance selling regulations, in the case of telephone communication in relation to distance sales in Northern Ireland, the identity of the business and the reason for the call must be stated at the beginning of the conversation. There is no requirement to do this at the outset of the call in Ireland so long as the identity of the supplier and the purpose of the commercial call is made explicitly clear at some stage during the call.

  • • Differences in the timing for the implementation of regulations: When adopted, an EU directive gives member states a timetable for the implementation of the intended outcome. Therefore different member states will implement the changes at different times with the potential to create confusion.
  • • A failure to recognise differing yet adequate standards imposed in each jurisdiction:

Where a construction-related contract is performed partly in Northern Ireland and partly in Ireland (for example, haulage activities) the Relevant Contracts Tax scheme needs to be applied to the part of the contract that is performed in Ireland.

Sources: Nordic Innovation Centre (2007), From Cross-Border Barriers to Market Opportunities, Nordic Innovation Centre, Oslo; InterTradeIreland (2009), Regulatory Barriers to Cross-Border Trade and Business, InterTradeIreland, June.

While many national innovation strategies acknowledge the importance of internationalisation per se, making cross-border international collaboration work is somewhat different. Policy makers recognise the value of global connections for the success of their research initiatives and for innovation. Policies may also encourage foreign participation in projects. However, the cross-border international collaboration often takes a different form than internationalisation more generally since it is a longer term and more comprehensive type of collaboration. It also implies that many more details need to be resolved given the close proximity. For example, an exchange agreement with a school in China will not raise the same day-to-day issues as an exchange whereby students can take classes in different institutions across the border on a daily basis because they can easily commute.

One of the main challenges is that national money tends to stop at the border. National, or regional or local politicians face difficulties explaining to their constituents why funding from their jurisdiction went to another jurisdiction. Within the European Union, which has been actively promoting integration across its member states and regions, some 85% of all public research and development (R&D) is programmed, financed, monitored and evaluated at the national level (European Commission, 2008 in OECD, 2012). In Europe, countries that developed joint programming for research used different strategies to address this problem of money crossing the border (Table 2.2). These different funding scenarios, such as a virtual or common pot, are important for a number of innovation policy instruments (Chapter 3).

Table 2.2. Strategies for addressing border issues in scientific funding

Financing approach



Money follows co-operation line

Stimulates cross-border funding

National legislation or administration rules might need modification

Money follows researchers

Allows better exploitation of individual expertise

Salary differentials and imbalances

Virtual common pot

Compatible with independent financial planning by funding bodies Funding only within national borders simplifies rules

Some proposals approved to be funded may be declined

Potential conflict between the funding of “excellence” and available national contributions

Real common pot

Proposal selection always follows the ranking list

Simpler selection procedure

Difficult to set up

Cross-border funding might seem to clash with national interests

Need for an agreed system to determine contributions, eligible costs, overheads, etc. Possible exclusion of some players on the grounds of national legislation

Balanced common pot

Proposal selection might follow ranking list, without the problems of a real common pot T opping off money could be made available by the EU

ERA-NET Plus experience

Long-term commitment required

Distorted exploitation of the system needs to be


Sources: High-Level Group for Joint Programming (2010), “Voluntary Guidelines on Framework Conditions for Joint Programming in Research 2010”, ERAC-GPC 1309/10, FC 0411 10.doc as cited in OECD (2012), Meeting Global Challenges through Better Governance: International Cooperation in Science, Technology and Innovation, OECD Publishing, Paris, 178700-en.

When there are exceptions to the rule, it is because there is an expectation that there will be benefits, even if more indirect, accruing to a national firm or other institution. For the cross-border cluster funding scheme in the TTR-ELAt, the Dutch Ministry of Economy contributed a much more significant amount of money (EUR 2 million) than the other regions, with the expectation that such an experiment will provide a return to Dutch firms and prove to others the value of such programmes (Chapter 3, Box 3.8). Denmark’s regulations allow for foreign researchers to use funds in joint programming research, enabling, in theory if not in practice, the creation of real common pot instruments (OECD, 2012).

National political commitment can raise the profile of the cross-border collaboration, which is often easier to achieve when capital cities are involved. Danish national policy makers live at the core of a cross-border region, and therefore can feel daily many of the issues associated with the cross-border character of the area. The bi-national innovation policy efforts undertaken by InterTradelreland are due to a unique political context that has prioritised collaboration for mutual economic benefit. The cross-border area of Helsinki-Tallinn, with two capitals, can more easily benefit from broader national level commitments for bilateral co-operation. For example, two iterations of “Wise Men” reports (Box 2.5) have focused on opportunities for greater co-operation between Finland and Estonia, particularly with a focus on education and research, which can provide a more policy-friendly context to the capital city collaborations. While not all the recommendations go forward, some, such as the Joint Estonian-Finnish Science, Technology and Development Council as well as joint projects on design and cooperation on business incubators, have been implemented. Several Swedish cross-border regions have noted challenges in garnering political attention to their barriers for crossborder collaboration in part because they are far from the capital.

Box 2.5. “Wise Men” reports on Finnish-Estonian co-operation: A focus on research and education

In efforts to promote greater co-operation between Estonia and Finland, two expert reports were commissioned in 2003 and 2008 by the respective Prime Ministers. The aim of the reports was to generate momentum and revive discussion on how Estonia and Finland can respond to global challenges by collaborating to support their economies and promote competitiveness. The Prime Ministers expressed particular interest in understanding potential for co-operation on the following topics: education, research and innovation, and energy. The 2008 report, for example, provided 55 recommendations and presented relevant background analysis. While not all the recommendations go forward, some, such as the Joint Estonian-Finnish Science, Technology and Development Council as well as joint projects on design and co-operation on business incubators have been implemented.

  • 1. Recommendations from the Ollila and Joeruut report in 2003
  • • increase co-operation in post-graduate education
  • • increase co-operation in acquisition and utilisation of laboratories and other facilities
  • • increase the mobility of students and researchers
  • • increase co-operation in high-tech business development
  • • secure the possibilities for Finns to study in Estonia and for Estonians in Finland.

Box 2.5. “Wise men” reports on Finnish-Estonian co-operation:

A focus on research and education (cont.)

2. Recommendations from the Blomberg and Okk report in 2008

Research and development

  • • establish a joint Estonian-Finnish Science, Technology and Development Council along with a permanent Finnish and Estonian secretariat and an independent Estonian-Finnish think-tank
  • • establish concrete forms of co-operation between Enterprise Estonia and Tekes on the one hand, and the Estonian Development Fund and the Finnish Innovation Fund Sitra on the other
  • • establish partnerships and co-operation networks between research institutions (Aalto University, Tallinn University of Technology and the Estonian Academy of Arts) and Estonian and Finnish design institutes in order to enhance co-operation in the field of creative work, commercialisation and marketing
  • • develop co-operation between Estonian and Finnish technology centres and enterprise incubators
  • • hold Estonian Science Days in Finland and Finnish Science Days in Estonia.


  • • put procedures in place for Estonian and Finnish Ministries of Education to harmonise the training objectives and the use of resources of the two countries as well as to co-ordinate teaching programmes and the investments made in education
  • • establish a joint Estonian-Finnish institution named the Cross Gulf University with a focus on organising co-operation in postgraduate education
  • • establish a joint Estonian-Finnish training fund with public and private funds to support students and researchers, particularly those undergoing post-graduate training, with housing allowances and to facilitate exchange of students between Finland and Estonia
  • • consider the possibility of establishing a joint office for Estonian and Finnish universities in China or India
  • • promote teaching of Estonian in Finland and teaching of Finnish in Estonia.

Sources: Blomberg, J. and G. Okk (2008), “Opportunities for cooperation between Estonia and Finland

2008”, Prime Minister’s Publications, 10/200; Ollila, E. and J. Joeruut (2003), “Finland and Estonia in the

European Union”, Prime’s Minister Publications, May.

European Territorial Co-operation funds are a critical cross-border funding source, with a few drawbacks

For regions located within the European Union (EU), the European Territorial Cooperation (ETC) programme is often the core or only funding source for cross-border regional innovation activities. The programme is commonly known as Interreg. Most of the ETC programme funds are dedicated to contiguous cross-border areas (Box 2.6). These EU funds have played a critical and catalytic role in developing cross-border relationships generally. They have also funded many valuable experimental instruments for cross-border innovation initiatives. In many cross-border areas, ETC funds are the only resources available (along with co-financing requirements) to implement crossborder instruments.

Box 2.6. European Territorial Co-operation: 20+ years of cross-border programmes

The history of European Territorial Co-operation (commonly referred to as Interreg) begins in 1989 with the establishment of 14 cross-border pilot projects, for a total budget of ECU 21 million. This paved the way to the adoption of the first generation of Interreg shortly after. Cross-border co-operation within the European Union (EU), however, dates back to 1958 with the creation of the first “Euroregion” at the German-Dutch border. During the 1960s and 1970s, European cross-border co-operation developed along the Rhine River as well as in Nordic countries, with the aim to develop tangible and concrete actions across countries.

More structured cross-border initiatives began with the creation of the Interreg I programme, in the programming period 1991-93. Interreg I was a cross-border co-operation initiative that led to the implementation of 31 operational programmes and 1 500 projects. During Interreg I, co-operation was essentially driven by infrastructure development, tourism and environmental issues. Rural development and SME support were only marginally targeted and private sector involvement was very limited.

The second edition of Interreg (Interreg II, 1994-99) saw almost a doubling of cross-border programmes (Interreg IIA), from 31 to 59. During that time, dedicated Community financial instruments for cross-border co-operation were created. Interreg IIA also targeted new fields of intervention like education, health, media services and language training. It involved not only cross-border co-operation but also transnational co-operation (Interreg IIB), aiming in particular at integrating the energy network in Southern European countries. In 1997, the Interreg IIC was created to develop seven general transnational co-operation projects plus six others focusing on the prevention of floods and droughts. The evaluation of Interreg II highlighted that integrated management of projects was present at internal borders and/or borders with a long tradition of co-operation. Cross-border co-operation proved to be more successful in the fields of tourism, culture, media and environment. As in the previous generation, outcomes in the field of economic development were less positive and the involvement of the private sector was still marginal.

Interreg III (2000-06) saw an increased number of project partners, thanks to the enlargement of the EU in those years. Under Interreg III, the programmes ESPON (European Spatial Planning Observatory Network) and INTERACT (Interreg Animation, Co-operation and Transfer) were launched. ESPON (launched in 2002) has the task to study territorial dynamics within the European territory, focusing on territorial structures, trends, perspectives and policy impact. It also provides comparable information about regions and cities in Europe. INTERACT (launched in 2003-04) assists stakeholders in implementing programmes and acts as an exchange and network platform. The evaluation of the Interreg III revealed barriers in terms of complex legal frameworks and instruments, especially at external borders.

In the period 2007-13, Interreg changed its name to European Territorial Co-operation and it became one of the three pillars of the European Cohesion Policy agenda, together with the other traditional regional development programmes. The budget of EUR 8.7 billion for this objective accounts for 2.5% of the total 2007-13 allocation for Cohesion Policy. During this period, territorial cross-border co-operation has involved 75 border areas, 13 transnational programmes and 4 EU-wide programmes, dealing with transnational exchanges and integrated urban development. This new generation of policies has had the objective to make cross-border co-operation more visible and to integrate the legal basis with specific cross-border co-operation instruments (like the European Groupings of Territorial Co-operation). The focus has also shifted towards more cross-cutting themes linked to innovation and environmental issues.

Source: European Commission (2010), Interact Newsletter, September, policy.

The geographic areas of intervention financed by European Territorial Co-operation funds for cross-border activities are often defined with a logic based more on shared disadvantage than shared opportunity. One of the intents of the cross-border efforts, in addition to supporting European integration, is to help these areas overcome some form of peripherality in their national context. When these cross-border area definitions are applied for innovation support, challenges can arise. Relevant innovation actors may be outside the perimeter definition (Chapter 1). For example, the Euregio Meuse-Rhine cooperation (created in 1976 and institutionalised in 1991) does not include the cities of Leuven and Eindhoven, among other areas that were subsequently developed as part of the TTR-ELAt cross-border regional initiative. The area defined by ETC funds for Ireland-Northern Ireland (UK) is focused on the border; however, many of the most significant actors for innovation are located outside that ETC area, notably Belfast (which often participates using the portion of funds for entities outside eligible areas), or Dublin.

The project-based approach results in a lack of strategic, game-changing interventions. The motto of one ETC cross-border area, “Overcoming borders: Project by Project” highlights the project-based logic of this programme. In many of the in-depth case studies, the project partners did not continue a relationship after funding ended. This implies that in many of those cases either the instrument was poorly designed or the public share of the financing too high. The collection of projects does help build bottom-up cross-border connections, thus increasing functionality in the cross-border area. But this accumulation of projects does not always lead to the public goods that facilitate greater integration of the cross-border area more generally, be that data, policy intelligence, strategy development or other high-impact projects.

The administrative barriers and programme approaches associated with funds were noted as problematic for innovation projects. Some of these rules and procedures are set by the individual ETC cross-border programme, others by national auditors, and yet other rules come directly from European policy. In a couple of ETC cross-border areas, the requirement for complex forms and in multiple languages was deemed a problem for firms or scientists. Procurement requirements for even small amounts can be overwhelming. For innovation work, criteria based on excellence or evaluations requiring special expertise are needed. This is in contrast with the often more jurisdictional approach to committees that decide the use of the ETC cross-border funds. The GCS Cross-Border Cluster Stimulation Fund in the TTR-ELAt (Chapter 3, Box 3.8) sets up a unique structure of experts hailing from the different jurisdictions to pre-select and recommend the firm-based innovation projects to the formal committee as a way to bring in the relevant expertise in the decision-making process. The Science Offensive programme in the Upper Rhine Trinational Metropolitan Region also had to design more adapted forms and procedures to overcome barriers generally associated with ETC fund use and ensure the quality of project selection (Chapter 3, Box 3.4). Other cross-border projects include partners in all jurisdictions of an ETC cross-border area to increase the probability of selection, even when that does not necessarily make sense for the programme logic. Forcing cross-border co-operation was seen as a drawback of the early attempts to fund collaborative R&D partnerships in the Oresund (Oresund Contracts programme, Chapter 3, Box 3.5).

Beyond the dedicated funding of ETC programmes, there are also opportunities for using other Structural Funds as a tool to support regional innovation strategies that may span borders. Regions in the EU benefit from some form of Cohesion Policy funding beyond ETC programmes. None of the case study regions were making use of such other Cohesion Policy funds for cross-border efforts, albeit cross-border strategies are now encouraged for effective use of those funds.3 Furthermore, the associated ETC-defined cross-border areas did not match what was deemed locally as most relevant for innovation-driven development. Allowing use of these other EU Cohesion Policy funds when relevant is another form of “mainstreaming” the cross-border element.

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