Innovation policy in Emilia-Romagna and Valencia

Trabajo presentado a la XXXVIII Reunión de Estudios Regionales: "The Challenge of Regional Development in a World of Changing Hegemonies: Knowledge, Competitiveness and Austerity" celebrada en Bilbao (España) del 22 al 23 de Noviembre de 2012.
This paper examines the evolution of regional innovation policy in Emilia-Romagna, and Valencia, regions with similar economic features that implemented similar innovation policies in the 1970s and 1980s. We investigate whether their similarities have led to similar targets, policy tools and governance developments. We show that innovation policy in both regions suffered from the effects of privatization, budget constraints and changes to manufacturing during the 1990s and highlight the consequences. Although Emilia-Romagna experienced deeper change to its innovation policy, privatizations and/or the replacement of public funds promoted commercial approaches and induced market failures in both regions. The worst effects of these policies were the implementation of less risky innovation projects, the shift towards extra-regional projects and markets, and the favouring of large firms.