Skills for smart specialisation : an analysis of ERDF and ESF support for S3 skills in the 2014-2020 programming period

The significant role of human capital and higher education in place-based development and innovation in response to the twin transition is increasingly recognised within the European policy and funding context. This research attempts to quantify the extent to which the ERDF - as one of the most significant sources of public investment for research and innovation - and ESF - as Europe's main instrument investing in human capital - supported the provision of high-quality education and training relevant to the needs of territories and their smart specialisation (S3) domains in the 2014-2020 programming period. Through the application of a keyword search approach to data reported on projects under the two funds throughout the 2014-2020 programming period, the research identified that between 8 and 10% of projects funded concerned skills-related activity relevant to S3. This represented around 24.0 bn € (11%) of ERDF and 14.9 bn € (17%) of ESF investment. Moreover, around 9% of all analysed ERDF as well as ESF lead beneficiaries were identified as Higher Education Institutes (HEIs) with, specifically, 1% of all ERDF (c. 6,130 projects) and 4% of all ESF (c. 2,580 projects) corresponding to S3 Skills projects led by a HEI. The share of Skills for S3 funding at national level varied from 48% to 2% under ERDF and between 53% and 2% under ESF, reflecting factors such as varying eligibility and funding strategies, levels of economic development and educational attainment, demographic, economic and labour market factors as well as the diversity of education systems and HEIs across the EU territory. The results enable a better understanding of the size of investments in skills for territorial development from different funding sources, and the variables that reflect territorial differences, for example the positive territorial correlation between high investments in S3 skills and thriving innovation eco-systems. The ex-post analysis can inform the alignment of funding in support of skills for S3 and productivity ex-ante across different funds and will be supported by a similar analysis on initial allocations and programming priorities for the 2021- 2027 programming period, as well as for investments from the Recovery and Resilience Fund (RRF).