Science, technology, and innovation for economic competitiveness: The role of smart specialization in less-developed countries

•Integrates SS with innovation systems and economic competitiveness•Proposes a diagnostic tool to identify SS candidates by using exports and STI data•Identifies SS candidates for Bulgaria (i.e., Copper, Food, Machinery, Pharma, ICT)•Based on these results, it offers concrete policy recommendations for SS strategies.

Smart specialization (SS) is a policy concept that has gained significant momentum in Europe despite a frail theoretical background and implementation difficulties. These challenges become critical in the case of less-developed economies that often lack regional autonomy, a strong STI base, and local capabilities to identify and sustain such SS strategies. Combining elements from evolutionary economics and the export-led literature, I propose a framework that anchors the role of SS in the national innovation policy of such laggards, as a complementary avenue for improving competitiveness and growth. Moreover, to assist policy makers in lagging regions or countries, I advance a diagnostic tool to identify potential areas for SS, and also address the systemic and the regional-sectoral bottlenecks in these domains. I exemplify the use of this tool in the case of Bulgaria by using a large battery of quantitative and qualitative indicators from publicly available data. This type of investigation may be useful for other less-developed economies to kick-start this process and identify prima facie SS candidates.