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The Smart Specialisation Strategy (S3) in Albania: A New Strategic Approach to Innovation

The Smart Specialisation Approach

In recent years, countries and regions in the European Union (EU) have developed Smart Specialisation Strategies (S3) as a new tool to promote innovation and regional development. The S3 approach, which is gaining growing international interest, is place-based and aims to identify a limited number of priority areas within the national or regional economy where public investment in research, development, and innovation can have the highest impact. It emphasizes the potential of cross-sectoral linkages beyond traditional industries and promotes diversification based on these interconnections.

Since S3 is a highly participatory process, priority areas should not be defined top-down solely by policymakers but should instead be agreed upon through an inclusive dialogue among stakeholders across sectors and territories, known as the Entrepreneurial Discovery Process (EDP). This includes ministries and government agencies, the private sector, academia, research institutes, and civil society.

Today, a strong focus on innovation policies is even more urgent due to the growing need to address the social challenges of the last decade.
Implementing S3 in the Western Balkans should be viewed within the context of the EU enlargement strategy, which provides an accession perspective and foresees support for various policy areas, including socio-economic development.

 

The S3 Design Process in Albania

Albania began its S3 design process in 2016 under the responsibility of the Ministry of Education, Sports and Youth. This decision was also linked to the higher education reform, seen as a need for better collaboration between higher education institutions (HEIs) and businesses to align more closely with regional development goals and labor market demands.

A national event organized in December 2016 with support from TAIEX brought together a large number of actors and institutions. From the roundtable discussions, an informal working group of various experts was created, which worked toward developing the S3 until its formalization in 2018.

In 2017, Albania registered on the European Commission's Joint Research Centre (JRC) platform for S3, and in 2018, the informal working group—comprising representatives from various institutions, including business and academia—was formalized by order of the Minister of Education, Sports and Youth.

More key stakeholders were included, forming a broader team comprising:

  • Ministry of Education, Sports and Youth
  • Ministry of Finance and Economy
  • National Agency for Scientific Research and Innovation
  • National Union of Producers
  • Regional Development Agency
  • HEIs
  • Municipality of Tirana, etc.

The S3 team also established the National Analytical Team with representatives from institutions and experts such as INSTAT, the Department of Statistics at the University of Tirana, AIDA, the General Directorate of Industrial Property, and others. Several activities were organized for the drafting of the S3 and capacity-building training seminars.

Meanwhile, S3 became part of the regional agenda of the WB6 (Western Balkans 6), as part of the Smart Growth pillar in MAP REA (led by the Ministry of Finance and Economy), and was integrated into two chapters of Albania’s EU integration framework.

To assist Western Balkan economies in the S3 design process, the JRC of the European Commission developed an S3 Framework that outlines all steps leading to the final draft of the strategic document, which can be used as a guide.

The Albanian S3 team drafted an S3 Roadmap based on the JRC Framework. So far, several steps have been taken to develop a national-level strategy while keeping a regional perspective in mind, focusing on the potential of Albania’s 12 counties.

Identification of Preliminary S3 Priority Areas for Albania

Albania completed the initial context analysis steps according to the S3 Framework through quantitative and qualitative mapping of the country's economic, innovative, scientific, and technological potential. The respective reports carried out an initial identification of those economic and productive areas that could potentially be selected as priority areas for the S3. More information can be found at this link.

Entrepreneurial Discovery Process (EDP)

The EDP concept emphasizes the importance of involving key actors and new opportunities in determining priority areas. EDP recognizes that regional or national governments do not possess inherent wisdom or ex-ante knowledge of future priorities. This phase follows the mapping stage and dives deeper into the sectors and subsectors previously identified, discussing the needs and tools (policy, measures, and financial instruments) that should be undertaken to support innovation.

It also explores and further defines the sectors that, based on consultations, may generate more or less interest among stakeholders than the initially identified ones.

EDP was carried out through working groups across the country with the participation of experts and stakeholders from the quadruple helix – central and local government, academia, business, and civil society. It identified challenges, needs, and innovative activities of interest for these actors.

This consultative and participatory process is what primarily distinguishes S3 from traditional industrial and innovation policies. The data/findings from the EDP working groups complemented and further developed the results from the mapping phase to prepare the S3.

The EDP phase included various national-level activities such as roundtables and workshops, as well as bilateral meetings with neighboring countries, held from October 2022 to July 2023.

National S3 experts facilitated discussions and helped gather data. Supported by the JRC of the European Commission, they organized around 30 national events and 3 bilateral meetings with neighboring countries Kosovo, Montenegro, and North Macedonia, ensuring a comprehensive methodology for discussing priority sectors and subsectors.

The final EDP event was held on October 31, 2023, summarizing the phase’s results and outlining the next steps toward finalizing the Smart Specialisation Strategy (S3).
Participants included representatives from the quadruple helix (government officials, academia, business, and civil society), ambassadors, representatives from diplomatic missions, and international organizations.

The EDP phase helped define the priority areas and the shared vision of the quadruple helix actors for the innovative development of these key sectors.

Identification of S3 Priority Areas and Drafting of the Strategy

The National S3 Team, in collaboration with coordinators from institutions within the S3 Interministerial Committee led by Deputy Prime Minister Ms. Belinda Balluku, and with support from the JRC of the European Commission and field-specific experts involved through the EU4Innovation project, identified the priority areas (link) based on the EDP report and prepared the draft of the S3.

This phase involved continuous consultation with key stakeholders, with over 120 individual or group meetings with interested parties or government representatives to discuss specific measures. The final draft of the S3 was discussed in the Government Economic Block and consulted with the JRC of the European Commission.

The final draft was published for public consultation. The final version of the S3 draft was submitted to the Council of Ministers for approval.

Strategy Approval

On December 26, 2024, with Decision of the Council of Ministers No. 824, the National Smart Specialisation Strategy (S3) 2025–2030 and its accompanying Action Plan for implementation were officially approved.

Inter-Institutional Coordination and Involved Actors

By order of the Prime Minister, an Interministerial Committee was established to oversee, draft, and implement the S3 Strategy. This committee is chaired by the Deputy Prime Minister, Ms. Belinda Balluku.

Among the main duties of the Committee are to ensure the smooth progress of drafting and implementing the S3, and to promote high-level coordination among institutions to guide and direct efforts in line with the S3 objectives.

This strategy is envisioned as an umbrella strategy that covers a wide range of sectors and involves a significant number of central and local institutions.

The members of the S3 Interministerial Committee include:

  • Minister of Finance and Economy
  • Minister of Education and Sports
  • Minister of State for the Protection of Entrepreneurship
  • Minister of Agriculture and Rural Development
  • Minister of Tourism and Environment
  • Minister of Culture
  • Minister of Health and Social Protection
  • Minister of State for Service Standards
  • Director General of the State Agency for Strategic Programming and Aid Coordination (SASPAC)
  • Director General of INSTAT
  • Director General of the Albanian Investment Development Agency (AIDA)
  • Director General of the National Agency for Information Society (NAIS)
  • Director General of the General Directorate of Industrial Property
  • Leader of the National S3 Team
  • Chair of the Conference of Rectors
  • President of the Academy of Sciences
  • Head of the Union of Chambers of Commerce
  • Head of the Union of Albanian Producers
  • President of the Association for Local Autonomy

The National S3 Team (NS3T)

The National S3 Team operates at a technical level and contributes directly to the strategy drafting process. Its members include representatives from various institutions and organizations (listed here).

The Interministerial Committee is tasked with the essential responsibilities of monitoring, drafting, and implementing the S3 Strategy. Led by Deputy Prime Minister Ms. Belinda Balluku, the Committee plays a central political role in guiding and aligning the strategy with national priorities. One of its main functions is to promote high-level institutional coordination to steer work in accordance with S3 objectives.

The Albanian S3 Team, composed of sector-specific technical experts, developed an S3 Roadmap based on the JRC Framework to guide the development of a national Smart Specialisation Strategy, while also maintaining a regional perspective.

The NS3T has directly contributed to the strategy development process through:

  • data collection and analysis;
  • definition of vision, strategic objectives, and the specific action plan;
  • consultation with quadruple helix actors (government, academia, business, civil society);
  • and implementation of all components outlined in the activity plan (roadmap), including its periodic updates in collaboration with the JRC and the European Commission.

Implementation

S3 implementation is governed by a strong governance model, involving the following actors:

  1. Interministerial Committee – Led by the Deputy Prime Minister and supported by the Albanian S3 Team (established by Prime Ministerial Order):
    • The Committee serves as the highest decision-making body, responsible for:
      • reviewing monitoring results,
      • updating the Action Plan,
      • establishing thematic working groups,
      • engaging experts,
      • and ensuring alignment with sectoral strategies and initiatives.
    • The National S3 Team oversees technical coordination and national/international reporting on S3 progress.
  2. S3 Monitoring Unit – within the Ministry of Economy, Culture, and Innovation:
    • Monitors the implementation of S3 activities, including those funded through the Growth Plan.
    • Serves as the Technical Secretariat of the Interministerial Committee.
    • Provides biannual implementation reports.

 

The National S3 Team ensures a structured dialogue with the main institutions responsible for implementing S3 initiatives. It focuses on detailed planning, progress reporting, and resource allocation, working closely with responsible institutions at both the administrative and political levels.