EU Regional Policy and the Stimulation of Innovation: The Role of the European Regional Development Fund in the Objective 1 Region Burgenland

In recent years regional policy has become more and more concerned with the improvement of the innovation capacity and performance of firms. Many regional development strategies have as key elements the support of their regional innovation systems and innovative clusters of firms. It has been recognized that increasing the technological level, the value added and the competitiveness of a regional economy relies to a large extent on the innovation capacity of regional firms and clusters. Regional development is an important policy issue also for the European Union. The EU Structural Funds aim at supporting regions lagging behind in their development or facing structural problems. In this paper we are going to analyse how the European Regional Development Fund (ERDF) affects innovation in the Austrian Objective 1 region Burgenland. In this case study we use data from an innovation survey conducted in the context of the recent mid-term evaluation in order to assess the innovation-related effects of the ERDF. The analysis leads to the conclusion that the ERDF does not target the problems and needs of regional firms regarding innovation in a satisfactory way which also hampers the successful restructuring of the regional economy.