Innovation regional planning and latent dimensions: the case of the Algarve region

Regional innovation systems (RSI) concept is an important theoretical framework to analyse regional profiles of regions when trying to understand Innovation but it has also been used by practioners to design and implement policies. This study hopes to contribute to the understanding of the Algarve RSI, a peripheral Portuguese region in the National and European framework, where an economic growth is supported by Tourism, which leaves it out of the group of poorest regions when the GDPpc indicator is taken in account. The regional profile, the comparison with the other European regions and the characterisation of RSI following developed typologies are discussed in this paper. Through the analysis of 175 regions of the EU 15 the study seeks to find the dimensions underlying the innovative phenomena and to create homogeneous groups of regions that display similar profiles. Factorial Analysis was used to reduce the dimension of data from a barrage of regional indicators such as: Critical Mass of Territories, Economic Performance, Level of Wealth, Employment Market, Sectoral Structure of the Economy, Age Group Structure, Education and Training, Technological Employment, R&D and Patents. Having determined the four main factors with significant results (Technological Innovation, Human Capital, Economic Structure and Availability of the Employment Market) what followed was a hierarchical analysis of Clusters, resulting in five groupings of regions: Disadvantaged Regions, Average Regions, Central Regions, Large Economic Centres and Innovating Regions. A synthesis of the recent Regional Innovation Strategies for the Algarve is presented including previous experiences (Ettirse and INOVAlgarve) and the Algarve’s Regional Innovation Plan, which will try to create a pathway for regional development supported by knowledge-based activities for a more diversified regional economy.