In the beginning of 2023, EUSBSR PA Innovation has launched a new initiative on Collaborative BSR Decarbonization. The initiative brings together BSR cities participating in the EU Mission for climate-neutral and smart cities, and promotes and fasilitates joint climate actions between the cities. The goal is also to promote cross-macro-regional cooperation on climate issues.

One of the key actions of PA Innovation is to support developing Grand Challenge innovation projects. The leadership of the EU in the climate crisis, including the Green Deal, Fit for 55 package and the climate missions (Adaptation to Climate Change and Climate Neutral and Smart Cities) provide an excellent framework on a transnational level for addressing climate related challenges. The climate issues are strongly embedded in the national strategies of all key actors across the region. Decarbonization ambitions have been set locally and nationally as well as within firms.

From the perspective of EUSBSR the approach to address the climate crisis has been primarily from marine environment (Save the Sea), but also from the perspective of distinct substance areas – PA’s Bioeconomy, Transport, Energy, Nutri, Spatial Planning; with clearly defined sustainability actions. However, integrative approaches to systemic cross-sectoral innovations, specifically on city level, are yet missing on strategy level.

The EU ambition regarding international city or regional collaboration is moving towards even stronger collaboration constellations. In addition to the EU Cities Mission, this is also supported by the new EU innovation agenda aiming for a network of collaborating regional innovation valleys. This new direction of EU innovation policy must be strongly included in EUSBSR strategy implementation.

The ambition for PA Innovation is to define relevant value-adding focus areas for city-region level BSR-collaboration. Leading cities, regions, and companies should collaborate in innovation ecosystems, with high ambitions and mission-type approaches. Within BSR there are enough climate and cultural similarities between cities, regions, and countries, which offers BSR a unique opportunity to become a role model for decarbonization.

Topics that should be addressed as part of the mission must emphasize new forms of integration of complementary city and company capabilities:

• City block – district-level urban planning and communal design;
• Electrification of mobility and its impact on city energy infrastructure;
• Fostering communities to undertake circular economy initiatives;
• Integrating sustainability and resilience regionally;
• Making climate neutral solutions that are more suitable for the less affluent world.

The “Collaborative BSR Decarbonization” mission entails e.g., the following collaborative aspects:

• Supporting and leveraging leading cities and regions already in EU missions, regarding issues that they feel natural for BSR-level, city-company collaboration;
• Strong company/ecosystems dialogue and leading public sector support for design and value-added activities;
• Connecting with national ministries and innovation agencies around decarbonization, to work on strengthening impact of international mission-related collaboration;
• Working with universities and students, to access new ideas and insights into challenges;
• Connecting to relevant projects and programs funded through other sources or other similar networks;
• Connecting the initiative to key individuals from BSR that are involved in developing and implementing EU climate missions (for instance mission board members) and new initiatives supporting interregional collaboration, including Regional Innovation Valleys and PRI);
• Promoting to and collaborating with other EU macro-regions;
• Defining activities and ecosystems with a mission approach, through evolving co-creation;
• Recruiting leading actors that could support co-creation and implementing the focus area;
• Identifying relevant concepts and activities to gain added value from the transnational context;
• Discovering and awareness building of leading capabilities for the BSR-specific mission;
• Supporting project proposal development to BSR (Interreg) to drive concrete work on missions and EU programs/partnerships (HE, I3, Driving Urban Transitions, Missions), identifying complementarities and added value with these instruments.

In 2014-2021, EUSBSR PA INNO has prioritised Smart Specialisation to ensure that innovation measures are designed to better meet the local and subregional level need of actions. The same regional/S3 focus continues in EU 2021-2027, and is relevant in all three priority innovation actions/themes of the new EUSBSR Action Plan (2021): Challenge-driven innovation; Digital Innovation and transformation; Co-creative innovation.

Supported by EUSBSR PA INNO, BSR sub-regions have been actively developing their S3 in line with the EU Green Deal and with increasing focus on interregional cooperation. Various EUSBSR S3 projects have facilitated the building of long-term strategic innovation cooperation and partnerships that can eventually lead to joint investments, as well as provided insights and tools for regions to develop their smart specialization strategies for sustainability (S4), with a strong focus on inclusive sustainability, green and digital transition. Regions have an important role in strengthening the commitment of all actors in BSR innovation ecosystems, including the business sector, to move forward with selected strategic direction within interregional cooperation.

The flagship EUSBSR PA INNO platform project on S3, ‘BSR S3 Ecosystem’ (Interreg Baltic Sea Region, 2018-2022) was aligning various EUSBSR S3 initiatives to better steer investments across BSR. The platform was built on the experiences of Interreg BSR funded EUSBSR S3 projects LARS, BSR Stars S3, Smart-up BSR and GoSmart BSR/ GoSmart&Excel BSR, as well as S34 Growth, BIOREGIO, ClusterFy and TraCS3, funded by Interreg Europe. BSR S3 Ecosystem project was led by Region Västerbotten.

Experiences and results of the BSR S3 Ecosystem platform project, offer valuable tools and guidance for the effective and coordinated utilisation of EU 2021-2027 opportunities in BSR sub-regions, including utilisation of the new EU instrument for interregional innovation investments (I3). Recommendations and results of BSR S3 Ecosystem project, materialized as ‘BSR Innovation Hub’, as a source of strategic advice and support for the macro-region’s innovation community, which also constitute a basis for the EUSBSR PA INNO’s S3 agenda and actions from 2022 onwards, and as related BSR S3 Ecosystem based consortia/proposal selected to take part in the Partnership for Regional Innovation (PRI) Pilot Action co-sponsored by the EC’s Joint Research Centre and the EU Committee of the Regions. The pilot (2022-2023) is led by Region Västerbotten, and supported by EUSBSR PA Innovation and CPMR Baltic Sea Commission.

The European Commission’s Communication on the New Innovation Agenda of July 2022 contains five Flagship actions to upgrade the EU’s innovation performance, in the context of significant global challenges. One of these Flagships is dedicated to strengthening European Innovation Ecosystems by creating regional innovation valleys. The learning and evidence from the BSR S3 Ecosystem project and the core objectives of the BSR Partnership for Regional Innovation (PRI) pilot aim to facilitate the EUSBSR/MRS contribution to the EU’s new Innovation Valley architecture: Exploring how S3 can be better aligned to SDG and Green Deal objectives, providing new tools and upgrading capacity across BSR territories to realise these objectives.

Upgraded support and cooperation infrastructures are needed, including strategic connections to wider EU ‘pathways’ and ‘valleys’, to join up efforts across EU value chains linked to twin transitions. Cross macro-regional cooperation (linked to S3 alignment) is a very important opportunity and policy framework in this.

Partnerships for Regional Innovation

BSR S3 Ecosystem 

EU law requires certain companies to disclose information on the way they operate and manage social and environmental challenges. In April 2021, the EC adopted a proposal for a Corporate Sustainability Reporting Directive (CSRD), which would amend the existing reporting requirements. The proposal extends the scope to all large companies and all companies listed on regulated markets, including listed SMEs. For several reasons, sustainability reporting is expected to increase also among the companies that are not obliged by the law. A reporting company is expected to report certain data also on its suppliers´ sustainability parameters (eg scope 3 GHG emissions) and will in the near future request that data from a large number of SMEs that are part of its value chain. Currently, the sustainability information reported by companies differs from one company to another. The lack of precision in the current requirements and the complexity of the directives and regulations has resulted in many private reporting standards and frameworks. The project develops and pilots the solution for the target groups – Sustainability Reporting Tool consisting of: a digital reporting environment with the guidance of what data to submit that allows the service and ICT sector companies to see and evaluate their performance in the required sustainability areas; recommendations for companies on how to efficiently align their operations with the required sustainability parameters.

SusTool project (2023-2025) is financed by Interreg Baltic Sea Region programme, and it contributes to EUSBSR PA Innovation Action 2 ‘Digital Innovation and Transformation. The project is led by Estonian Ministry of Economic Affairs and Communications.

PA INNO has promoted digitalisation and digital economy related cooperation in BSR especially through its kickstart activity on Real-Time Economy, and in connection with the development of a new “RTE flagship”. Launched by PA INNO in 2018, the RTE idea relies on smart solutions and trust services in which Estonia and Finland are among leading countries in the world. Real-Time Economy (RTE) is a cross-border and cross-sectorial economic model in which so far manually performed various administrative operations and financial transactions (B2B, B2G, B2C) will be created and processed digitally, in real-time, and based on international data standards.

Further information on PA INNO activities on RTE