The I3 Instrument Support Facility has released the 2025 I3 Observatory Report, titled Interregional Innovation Investments for EU Cohesion and Competitiveness. This report provides the first comprehensive analytical overview of projects funded under the I3 Instrument and highlights the Instrument’s growing strategic importance within the European innovation landscape.
As coordinator of the I3 Instrument Support Facility, Technopolis Group supports the continued development of the I3 Observatory as a central knowledge and data hub for interregional innovation investments across Europe.
A business-driven instrument advancing innovation
The I3 Instrument supports the creation of interregional consortia that transform Smart Specialisation (S3) priorities into joint, business-led investment projects. Under DG REGIO’s policy framework, it translates place-based smart specialisation strategies into concrete interregional innovation and investment initiatives that support market deployment and scale-up.
The Instrument helps regions build structured interregional ecosystems, scale up innovation activities close to market, and develop European value chains in strategic areas. The impact of the I3 Instrument is twofold:
- it strengthens EU competitiveness through coordinated, innovation-driven investments at interregional scale,
- while, under ERDF objectives, it ensures that regions with different innovation capacities can actively contribute to and benefit from shared European value chains.
The business-driven nature of the Instrument is reflected in participation patterns. 60% of projects were initiated by cluster organisations or SMEs, and cluster organisations are involved in 84% of surveyed projects, confirming their central role in mobilising industrial ecosystems and driving investment-ready collaboration.
Cohesion and competitiveness go hand in hand
The analysis shows that the I3 Instrument increasingly integrates Less Developed Regions (LDRs) into established innovation networks in more advanced regions. Importantly, private companies from LDRs receive funding levels comparable to those in other regions, despite accounting for a smaller overall share of participants.
Under DG REGIO’s policy framework, the I3 Instrument translates place-based Smart Specialisation (S3) priorities into concrete interregional innovation and investment projects that support market deployment and scale-up. S3 continues to provide a structured basis for collaboration, with around 40% of I3 projects having emerged from previous activities within S3 Platforms. In parallel, approximately 41% of projects report direct interaction with ERDF managing authorities (up from 33% in the 2024 survey), strengthening the operational link between the I3 Instrument, ERDF implementation and Cohesion Policy objectives. Cluster organisations are also becoming more central, being involved in 84% of surveyed projects and reinforcing business-led interregional cooperation.
The report emphasises that projects connect diverse organisations contributing complementary expertise along the value chain. Around half of surveyed investment projects make use of Financial Support to Third Parties (FSTP), lowering participation barriers for SMEs and third parties, accelerating knowledge transfer and supporting value chain integration.
I3 also fosters stable partnerships beyond individual projects. Among surveyed consortia, 53% plan to expand collaboration after the project ends, while 31% intend to continue current activities. Future plans shape the most relevant EU funding pathways: Horizon Europe, INTERREG, and EIT RIS are particularly prominent for new initiatives, while close-to-market programmes such as VInnovate are relevant for sustaining and scaling ongoing activities. A gradual shift from public to private funding is emerging as well, with consortia seeking to sustain activities planning to rely less on public grant funding over time; an investment logic that combines EU support with private investment and promotes lasting interregional cooperation.
At the same time, implementation challenges remain, notably varying regional capacities at both business and institutional levels. Addressing these disparities will be important to maximise impact and ensure balanced participation across Europe.
Overall, the findings indicate that the I3 Instrument is helping to bridge innovation and cohesion policy at a continental scale, integrating LDRs into established networks, preparing the ground for EU-wide scaling of innovation commercialisation, and aligning regional strengths with European competitiveness priorities.
The I3 Observatory: data and insight in one place
The findings of the Annual Observatory Report complement the quantitative data available through the I3 Observatory dashboard, the central data hub of the I3 Instrument Support Facility.
The I3 Observatory dashboard is publicly accessible and can be used by policymakers, businesses, research organisations and innovation intermediaries interested in interregional collaboration and investment. In practice, stakeholders use it to:
- identify I3 Instrument projects implemented in their region,
- find organisations with similar profiles or thematic interests across Europe,
- explore emerging value chains and cooperation patterns in shared S3 priorities,
- benchmark participation across regions and thematic areas.
By making structured project data publicly available, the Observatory enhances transparency on funded activities and achieved results. It enables open access to information on beneficiaries, themes, geographic coverage and collaboration patterns.
At EU level, the analytical insights generated help identify trends, gaps and bottlenecks in interregional cooperation. This evidence feeds into policy reflection and supports the improvement of interregional innovation instruments under ERDF and Cohesion Policy in future programming periods, strengthening the strategic design of EU-level interventions.
Stakeholders can access the dashboard, the full annual report, and the latest news, events and publications via the I3 Instrument Support Facility website, the central point of contact with the I3SF team.
