Regions’ innovation power under threat as EU reshapes the playing field

When the European Commission presented its proposal for the long-term budget for 2028-2034 this summer, it marked the start of one of the biggest reforms of EU cohesion policy in decades. The proposal would merge regional policy and agricultural policy into a single plan per member state – instead of the regional programmes that exist today.

For Sweden, this would mean shifting power over development funds from the regions to the national level, with potentially major consequences for how growth and innovation are financed locally.

This was the starting point for the panel “From Brussels to Borlänge” during Science Week and Sweden’s Innovation Riksdag in Södertälje on 8 October, where five voices from different parts of the innovation ecosystem discussed the future of Swedish regional development policy.

“We must act now – not wait”

Ebba Björkander, Head of the Dalarna, Gävleborg and Örebro County EU Offices in Brussels, explained that the proposal implies a completely new logic for how the EU allocates its resources:

“The Commission proposes to merge regional policy and agricultural policy. Instead of regional programmes, it wants each country to develop a national plan. This is a completely new way of distributing funds.”

She emphasised the importance for Sweden to start acting now:

“We are often good at waiting until everything is ready. But here we need to act now – otherwise we risk being left without influence.”

The EU’s cement – Tillväxtverket sees opportunities

Elisabeth Backteman, Director-General of the Swedish Agency for Economic and Regional Growth, gave the big picture of the changes shaping EU policy right now – from geopolitical tensions to the green transition:

“Europe needs to strengthen competitiveness, innovation capacity and the green transition. Cohesion policy is crucial here – it is the glue that holds Europe together.”

She identified three priority areas in the new proposal:

1. Bridging the innovation gap between regions.
2. Phasing out fossil fuels and strengthening the green competitiveness of businesses.
3. Increasing security of supply by reducing dependence on critical raw materials.

“The new Partnership Plan opens the way for action and mobilisation. But we have to do it together – nationally and regionally.”

Regions warn of reduced influence

Concerns were expressed from the regional level that the reform could lead to centralisation and a loss of capacity to act.
Matilda Eriksson from Region Örebro County emphasised that EU funds are crucial for smaller regions:

“Power is shifting from the regional to the national level. It doesn’t matter how good our communication channels are if our influence is reduced.”

She pointed out that the money is used to build capacity, testing centres and collaboration:

“These funds make a real difference. Without them, it will be harder to drive innovation and sustainable growth.”

“We must not forget local needs”

Mats Nyman, CEO of Bizmaker in Västernorrland, explained how EU funding has helped build a strong start-up scene in the region:

“We have been able to create more businesses and more jobs thanks to the Structural Funds. But I see a risk that local needs are forgotten when power is shifted upwards.”

He emphasised the importance of simplicity in the system:

“For those of us who work closest to businesses, it has to be easier. There is a threshold that we need to work together to remove.”

The metropolitan perspective: balance and co-operation

Anne Andersson, from the Stockholm region’s European office in Brussels, agreed that change is needed but warned that the reform risks becoming too nationalised:

“Putting more responsibility at national level risks closing borders between countries instead of promoting co-operation. We need to make sure that all regions are heard.”

At the same time, she pointed to the new opportunities offered by the EU’s Horizon Europe research programme, which is proposed to double its budget:

“There is huge potential here. If the whole country gets better at co-operating on research and innovation applications, Sweden can strengthen its role in Europe.”

“Now it’s up to proof”

In conclusion, Ms Backteman said that the EU must now live up to its promise of simplification:

“The EU wants to reduce the regulatory burden on businesses by 25% – it’s time to prove it. If we are to achieve the green and sustainable transition, we need to make it easier, not more complicated.”

The moderator concluded by reminding the audience:

“Remember that it was here, at Science Week and Sweden’s Innovation Riksdag, that the discussion really took off. If you want to influence future EU policy, you need to do it now.”

Ebba Bjerkander (Head of Office, Central Sweden EU Office), Anne Andersson (Managing Director, Stockholm Region European Office in Brussels), Matilda Eriksson (Development Manager: Business and Innovation, Region Örebro County), Elisabeth Backteman (Director General, Swedish Agency for Economic and Regional Growth), Matts Nyman (CEO Bizmaker)