Regional cooperation requires sustained capability development
“Made in Northeast Romania, scaled in Europe.” With these words, Cristina Baghiu, Hub Coordinator at Digital Innovation Zone, described the ambition of Northeast Romania at the Annual I3 Instrument Forum in Brussels on 1 October 2026. Her remark that travelling from Iași to western Romania can take almost a day is not simply an observation about infrastructure. It points to a structural condition: innovative companies in peripheral regions must seek European markets, partners and investment while the services that could support them remain fragmented and geographically dispersed. This might be more than anecdotical evidence, as research suggests that knowledge spillovers from R&D weaken rapidly with distance and remain largely within the investing region (Bottazzi & Peri, 2003), while administrative borders further constrain cross-regional cooperation. (Tang et al., 2022)
The article addresses the following guiding question: How can cooperation supported by the I3 Instrument help regional organisations develop innovation capabilities that endure beyond project funding?
The purpose of the I3 Instrument
The Interregional Innovation Investments (I3) Instrument connects regional strengths through smart specialisation priorities to help innovations reach markets and scale within European value chains. Strand 1 supports interregional investment partnerships, Strand 2a supports the integration of less developed regions into European value chains, and Strand 2b builds capacity to prepare interregional business and investment cases (EISMEA n.d.; 2025).
Methodological Approach
This exploratory article combines forum material, a focused narrative literature review and an analytical synthesis. The programme and a three-minute transcript excerpt cover one contribution, not the full panel. (Annual I3 Instrument Forum 2026). Official I3 information provides the policy context (EISMEA n.d.; 2025).
The selective narrative review draws on absorptive capacity and organisational learning (Zahra & George 2002), dynamic capabilities (Teece 2007) and regional innovation policy (Tödtling & Trippl 2005). The six recommendations are the authors’ synthesis, not an evaluation of I3 outcomes or empirically validated best practices. Firm-level theories are applied cautiously to regional partnerships with distributed responsibilities.
Figure 1 Panel discussion on building innovation capacity in regions with the I3 Instrument, Annual I3 Instrument Forum, Brussels, 1 October 2026. (Photograph: Pirita Ihamäki)
A regional example from Northeast Romania
Baghiu described a one-stop shop through which innovative small and medium-sized enterprises (SMEs) could access regional support and wider European markets. The example from Northeast Romania highlights a practical requirement: a region needs a coherent service offer before it can connect its companies effectively with partners elsewhere.
“We were lacking an aligned way of working for technology transfer,” Baghiu explained (I3 Instrument Forum). The response was to develop shared practices linking universities, research centres, and markets. Technology transfer centres could adapt these practices locally, while the innovation hub connects expertise with market opportunities. Shared expertise and virtual services would help address distance through coordination. This reading is consistent with evidence that interregional linkages support the diversification of peripheral regions most when they connect regions with complementary capabilities, rather than when they simply increase the number of connections (Balland & Boschma 2021).
Regional development and national research authorities were involved in an advisory board from the outset. This created a channel for translating project learning into policy and longer-term support. The example illustrates why capability building involves governance and working practices alongside access to technology.
Interregional links can support peripheral regions when partners offer complementary capabilities (Balland & Boschma 2021). However, firms need sufficient internal expertise to benefit from external knowledge. Those with weaker capabilities depend more heavily on regional knowledge infrastructure (Grillitsch & Nilsson 2015). Institutional quality also shapes the benefits of European investment (Barbero et al. 2023).
Learning and renewal as foundations for innovation capacity
Absorptive capacity is the ability to recognise valuable external knowledge, assimilate it, and apply it commercially. Zahra and George (2002) distinguish potential from realised absorptive capacity: acquiring knowledge does not automatically improve performance. A peer-learning visit may reveal a useful service model, but implementing it requires staff time, expertise, and decision-making authority.
I3-supported cooperation can strengthen regional innovation capabilities by turning shared knowledge into organisational practices and connecting complementary expertise with company needs.
Dynamic capabilities concern sensing opportunities, seizing them, and reconfiguring resources (Teece 2007). In regional cooperation, these concepts help to explain the tasks of identifying company needs, committing partners to joint development and renewing services after experience. Learning becomes tangible when partners adopt a shared assessment method or implement a joint pilot.
Regional conditions matter. A practice developed in a well-connected region may require different staffing, funding or institutional arrangements elsewhere. Transfer therefore involves testing and adaptation, not simple replication (Tödtling & Trippl 2005).
Policy recommendations for strengthening cross-border innovation capacity
1) Joint assessment of needs and capabilities
Partners should map company needs, expertise and service gaps, defining their contributions and learning priorities. This translates smart specialisation into practical tasks and establishes a baseline for progress.
2) A shared service pathway and clear responsibilities
Intermediaries should agree on responsibilities for company enquiries, needs assessment and cross-regional referrals. Testing a shared referral process can precede investment in a digital platform.
3) Linking learning to practical development
Workshops and staff exchanges should address company challenges through technology testing, service development or investment preparation. Documenting changes helps to retain learning beyond individual staff members.
4) Cooperation around complementary capabilities
Pilots should combine complementary expertise with business needs, defining partner roles, testing access, data and intellectual property arrangements, and evidence for investment decisions. Less experienced regions need meaningful responsibilities to develop capabilities.
5) Planning continuity from the outset
Partners should agree early on responsibility and funding for services after the project. Pilot findings can inform policy improvements, while follow-on funding requires assessing eligibility and is not guaranteed.
6) Monitoring capabilities and continuity
Evaluation should track capability changes alongside activities, using baselines and post-project follow-up. Proposed indicators include service referrals, adopted methods, investment-ready pilots and continued collaboration; these require validation.
Conclusion: Building lasting regional innovation capabilities
I3-supported cooperation can strengthen regional innovation capabilities by turning shared knowledge into organisational practices and connecting complementary expertise with company needs. Sustaining these benefits beyond funding requires clear responsibilities, resources and coordinated services. Policy should support learning alongside investment preparation. The Northeast Romanian example offers a starting point, while comparative evaluation is needed to assess how such arrangements work across different regional contexts.
References
Balland, P.-A., & Boschma, R. (2021). Complementary interregional linkages and Smart Specialisation: an empirical study on European regions. Regional Studies, 55(6), 1059–1070. https://doi.org/10.1080/00343404.2020.1861240
Barbero, J., Christensen, M., Conte, A., Lecca, P., Rodríguez‐Pose, A., & Salotti, S. (2023). Improving Government Quality in the Regions of the EU and its System‐Wide Benefits for Cohesion Policy. JCMS: Journal of Common Market Studies, 61(1), 38–57. https://doi.org/10.1111/jcms.13337
EISMEA. n.d. Interregional Innovation Investments (I3) Instrument. European Innovation Council and SMEs Executive Agency. Accessed on 1.10.2026. https://eismea.ec.europa.eu/programmes/interregional-innovation-investments-i3-instrument_en
Grillitsch, M., & Nilsson, M. (2015). Innovation in peripheral regions: Do collaborations compensate for a lack of local knowledge spillovers? The Annals of Regional Science, 54(1), 299–321. https://doi.org/10.1007/s00168-014-0655-8
Teece, D. J. 2007. Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal 28 (13), 1319–1350. https://doi.org/10.1002/smj.640
Tödtling, F. & Trippl, M. 2005. One size fits all? Towards a differentiated regional innovation policy approach. Research Policy 34 (8), 1203–1219. https://doi.org/10.1016/j.respol.2005.01.018
Zahra, S. A. & George, G. 2002. Absorptive capacity: A review, reconceptualization, and extension. Academy of Management Review 27 (2), 185–203. https://doi.org/10.5465/amr.2002.6587995
Authors
Pirita Ihamäki
PhD, MSc, Principal Lecturer in Innovation Management
School of Industrial Engineering
Tampere University of Applied Sciences
pirita.ihamaki@tuni.fi
ORCID: 0000-0002-3303-8895
Cristina Baghiu
Hub Coordinator
Digital Innovation Zone
Romania
cristina.baghiu@digital-inovation.zone
ORCID: 0000-0001-6305-7029
Photo: Adobe Stock