Policy Area Innovation

Why?

Cities and regions across the Baltic Sea Region face environmental, social and economic challenges that demand strong place-based innovation. Regulatory and administrative barriers, fragmented governance and uneven innovation capacity limit collaboration and slow the scaling of solutions across borders.

Innovation divides between urban and rural areas hinder progress on climate adaptation, clean energy, circular economy transitions, digitalisation, mobility and safety and resilience, while opportunities in the maritime environment, blue economy and smart urban–rural development remain underused. Place-based innovation also plays a crucial role in responding to demographic and social transitions. Active community engagement and social innovation are essential to ensure inclusive, sustainable transformation.

Macro-regional cooperation can unlock this potential by aligning local and regional ecosystems with societal needs and strengthening the region’s overall competitiveness.

This Action calls for initiatives towards

• local and regional authorities adopt new smart city, smart village or smart specialisation strategies explicitly integrating place-based innovation approaches and supporting macro-regional and cross-border cooperation• introduction of new approaches, practices and networks for macro-regional and cross-border cooperation between local/regional authorities in the Baltic Sea Region, facilitating data sharing, joint pilots, or innovation funding schemes
• increased number of Baltica Sea Region regional or local development strategies explicitly integrating climate adaptation and mitigation measures through macro-regional or cross-border place-based innovation approaches (e.g., smart cities, circular economy, resilient infrastructure)

Why?

Digital transformation is rapidly reshaping the Baltic Sea Region, offering major opportunities to improve public services, strengthen competitiveness and advance climate and sustainability goals. Yet uneven digital readiness—ranging from gaps in broadband access and digital skills to fragmented regulations and technical standards—limits the ability of public authorities, citizens and businesses to benefit from new technologies. These divides hinder interoperability, restrict cross-border digital services and risk widening socio-economic inequalities. At the same time, the region faces growing needs related to cybersecurity, data governance and the responsible use of AI and emerging technologies.

By fostering collaboration, strengthening trust and aligning with EU frameworks, digital transformation can be turned into a driver of sustainable growth, resilience and competitiveness for citizens, businesses and public authorities across the macro-region.

This Action calls for initiatives towards

• new approaches, practices and networks for cross-border digital service interoperability
• number of national, regional or local authorities adopting new guidelines on ethical AI use and cybersecurity
• wider uptake of digital tools by businesses to improve efficiency and service delivery
• funding bodies increasingly reflect priorities related to digital skills, interoperability and responsible use of digital technologies
• number of Baltic Sea Region municipalities integrating digital climate solutions (e.g. digital twins, e-mobility, flood monitoring) into local planning or service delivery
• number of national, regional or local digital strategies in the Baltic Sea Region integrating climate mitigation/adaptation measures (e.g. smart energy, resilient infrastructure)

Why?

Business and innovation ecosystems across the macro-region play an important role in driving sustainable economic activity, yet many remain constrained by fragmented policies, uneven coordination and differences in access to resources. Collaboration across borders is often limited by support infrastructures that focus mainly on national or regional priorities and lack the tools or capacities to operate transnationally.

Differences in the availability of funding, skills and organisational capacity further reduce opportunities for joint co-creation, while gaps in shared digital platforms, interoperable testbeds and data frameworks restrict collaboration and slow ecosystem development. These conditions make it more difficult for the macro-region to take full advantage of the green, digital and social transition.

These challenges highlight the need for outcomes that strengthen collaboration, improve alignment and support more coherent development of business and innovation ecosystems across the macro-region.

This Action calls for initiatives towards

• new approaches, practices and networks in the Baltic Sea Region promoting measures for transnational SME co-creation
• new practices enabling cross-border value chain cooperation adopted by Baltic Sea Region clusters or business support organisations
• more EU, national or regional funding programmes adapting programming or calls, adjusting budget allocations or introducing synchronized calls to support cross-border SME co-creation and ecosystem collaboration
• increasing number of clusters or SME networks adopting new green innovation practices (e.g. on circular economy, low-carbon production, climate-smart services)