To be globally competitive, regions need to take into account the dual phenomena of increasing international linkages and the persisting importance of geographic proximity. However, even when innovation actors are in proximity, the presence of an international border is a barrier for collaboration, one that is increasing in recent years. For many regions, there are a number of reasons why collaborating with an international neighbour makes sense for both sides. For innovation purposes, the definition of the “functional” area for cross-border policy requires some assessment of both the innovation relationships that are (or could be) relevant, as well as the other functional ties and institutional arrangements. The definition should seek to avoid simply creating rigid new borders.

Finding the right governance arrangements for collaboration is perhaps the most complex task for cross-border innovation policy. An overarching vision for collaboration is a useful place to start. The local and regional levels on each side of the border can identify the costs, benefits and opportunities before pointing out to national or other levels of government how they are helping or hindering cross-border efforts. While the innovation policy field offers a strong potential to create value, the high degree of uncertainty also renders the assessment of costs and benefits, as well as the urgency for action, more difficult. Innovation-driven economic development is a field where jurisdictions are also competing, but the real competition is not with the neighbour, it is on a global scale, implying potential for “co-optition” (co-operation for competition). Cross-border areas need to rely on both formal or informal governance arrangements, or both, but in all cases trust is essential and takes time. And since governance goes beyond government, wider stakeholder involvement beyond the public sector is necessary for sustainability.

Cross-border instruments that contribute to an overall strategy are more likely to have economic impact than if they are simply a collection of different projects. Data, mapping exercises and other forms of policy intelligence can best inform how to prioritise action. Sometimes cross-border policy instruments are experimental: they can serve as test cases before mainstreaming, whereby cross-border actors can participate in traditional innovation programmes. Flexibility in instruments on both sides of the border can be an alternative. Instruments that seek to force actors to collaborate when they have disincentives to do so, due to financial reasons, regulations or lack of a quality innovation partner, will simply not be sustainable. International examples of policy instruments implemented on a cross-border basis have shown different degrees of success.