Questioning EU cohesion policy in Portugal: a complex systems approach

Abstract:

During the last decade the development of the Norte region of Portugal has been the subject of several studies whose conclusions - according to the present paper - need revision in line with a new scientific paradigm. It is our understanding that regional and innovation policies should be based on a complex systems approach whose emergence is acknowledged in the first part of the paper. Accepting the usefulness of this meta-theory for research on firms' behaviour and innovation, we develop a preliminary analysis of the strategic behaviour of small and medium-sized enterprises (SMEs) in the Norte region in responding to direct financial support from Structural Funds. The empirical results confirm the research hypothesis that current policies based on financial incentives have little effectiveness in promoting the changes required by SMEs in the globalising knowledge-based economy. Considering knowledge as an emergent property of complex social systems, as are firms and regions, the paper argues that SMEs need a customised and interactive innovation policy, managed at a regional level. This argument should be considered, both in Portugal and at the EU level, as part of the EU Cohesion Policy debate after 2006.