While smart specialisation is primarily about the economics of specialisation, vocational education and training (VET) and skills are the engine that drive smart specialisation. The ETF’s methodological approach on skills for smart specialisation anchors the implementation of smart specialisation
strategies in a realistic supply of relevant skills - in particular at medium and high levels. It opens up discussions about skilling, upskilling, reskilling and career development support in the context of the twin digital and green transitions. It offers a concrete tool to connect vocational education and training through productivity-enhancing skills to the drive for innovation, growth and competitiveness. Finally, the ETF’s Skills for smart specialisation approach facilitates cross-border partnerships which lay the groundwork for private and public partners to increase use of innovation support from various sources such as Horizon Europe1, the EU’s key funding programme for research and innovation, as well as new funding instruments such as the Interregional Innovation Investments2. As a result, the ETF’s skills for smart specialisation approach builds pathways for focused VET excellence to flexibly supply relevant human capital and workforce retraining for the private sector for higher productivity and
quality jobs.

The reason why the ETF set out to develop a methodological approach in 2019 is that regions and countries that have the right skills are able to do certain things better. They are able to produce more, to produce more complex products and services, and to innovate and make new products or develop services that are not yet available. Moreover, as industries are related through their skills, industries that enter a region are often related to the region’s current industries. The reverse also holds true. Industries that exit a region tend to be unrelated to other industries in the region. These elements make human capital development a key determining factor for smart specialisation.