Economic development of peripheral/lagging zones through smart innovation

In a globalised world, macro-economic policies are insufficient to properly handle the complex game of economic development and stabilisation. Significant differentiations and specificities are visible at the regional level due to new ways of communication, mobility, education, and access to information. A change of focus is therefore necessary from a macro- to a meso-economic approach. The meso level of analysis reveals significant imbalances between knowledge hubs, industrial zones and rural areas. Of special concern are rural areas, which in most cases fall into the category of lagging zones where local social capital and other basic factors show little potential to break down vicious circles in economic development. Under these circumstances, this paper introduces the concept of smart innovation as a means of supporting accelerated economic development within lagging zones. Innovation can be defined as smart when it embraces nonlinear paths to economic growth in areas with poor active endowments. An approach for operationalising smart innovation is also presented in this paper. Its potentiality is demonstrated using the example of a rural lagging zone with 25,000 inhabitants, a low level of economic activity, and significant structural gaps.