Chair of Entrepreneurship, Innovation, and Technology

Research Report: Subsidizing regional innovation

Professor Dr. Faems coordinated a study that received funding from Dutch regional innovation programs.

Professor Dr. Faems coordinated a study on the selection and execution of hundreds of projects that received funding from Dutch regional innovation programs within the scope of the European Regional Development Fund (ERDF). Based on the results, Professor Dr. Faems emphasizes the need for strict selection, ambitious projects and trust-based governance.

Working together on innovation

Results indicate that the Dutch ERDF programs select projects that potentially contribute to more innovative SMEs. In most projects, SMEs and/or knowledge institutions work together on knowledge sharing and innovation. The research shows that projects would not have been implemented without this support. A large majority of respondents expect that independent funding or alternative financing would have been difficult.

Ambitious goals

The results of the research also show that the majority of the funded projects successfully realize the anticipated objectives. However, the researchers argue for more ambitious project objectives. Professor Dr. Dries Faems stresses that: "The vast majority of current projects aim at creating a healthy business activity that will have regional impact. However, there is a need for projects that aim to become leading at an international level as they can really make a difference in the long term for the structural development of regions."

Strict project selection

With the introduction of the Dutch ERDF programs, it was decided to work with expert committees in which independent experts assess project applications. The quality of the applications has increased significantly over the years. The independent expert committee played an important role according to the researchers. "The report emphasizes the importance of the expert committee as a strict gatekeeper that guarantees the selection of high-quality projects. We therefore argue for maintaining a strict selection policy in which the independence of the expert committees is central. This is certainly not self-evident and requires constant attention,"says Professor Faems.

Reducing administrative burden

Respondents indicate that the administrative pressure that the implementation of an ERDF project entails can hamper or delay the realization of results. The researchers recommend that the program managers and controlling bodies try to realize a cultural change. They propose building a lean and trust-based project control structure in combination with the well-functioning strict selection at the gate. The focus of inspections should, according to them, lie in the project selection phase. In the subsequent execution phase, the administrative burden should be reduced to the minimum necessary.

An English executive summary of the core results can be found here. The full report (in Dutch) can be accessed here.