Custom vs Copy-Paste: Designing Financial Instruments that Fit Regional Innovation
Financial instruments are not inherently effective. Their impact depends on how well they are designed to match the needs of the territories they aim to support.
Too often, financial tools are copied from one context and pasted into another without sufficient adaptation. What works for one region may fail in another, especially when the economic structures, innovation maturity, and entrepreneurial ecosystems differ significantly.
The Risk of Copy-Paste Approaches
Regions across Europe are diverse. An instrument created for a dense urban startup ecosystem may not translate into success for rural regions focused on agritech, green transition, or social innovation. Similarly, a financing program targeting scaleups may be irrelevant in regions where early-stage innovators are still struggling to commercialize prototypes.
When financial instruments are deployed without understanding territorial realities, the consequences are predictable: low uptake, inefficient public spending, and missed opportunities for transformative growth.
Designing Financial Instruments that Fit
Building effective financial instruments requires a territorial approach.
This means:
- Conducting serious mapping of local needs, challenges, and innovation dynamics
- Designing instruments that are flexible enough to evolve alongside projects
- Actively involving a broad set of stakeholders—innovators, investors, business support organizations, local authorities—in the design process
Financial instruments must match the innovation journey, not attempt to force it into a template that does not fit.
Lessons for Regions
Copy-paste financial design risks stagnation. Customisation, while more demanding, is essential for creating funding tools that genuinely drive innovation, resilience, and sustainable growth.
At FI4INN, we encourage regions to design smarter, more tailored financial instruments, building systems that empower innovators to move from ideas to impact.