Why a challenge-oriented approach is a good match for the needs and challenges of EU Cohesion Policy

• The emergence of challenge-oriented approaches to place-based innovation policies raises the question of how these can be mainstreamed into the EU Cohesion Policy, the world's largest regional development program. • The challenge-oriented approach could provide a deliberative framework for setting territorial development priorities and help coordinate public investments across policy areas within the context of Cohesion Policy. • This approach enhances stakeholder engagement by fostering partnerships around localized challenges and leveraging mission-oriented methods. • Future Cohesion Policy could benefit from exploring legal and operational pathways to incorporate the challenge-driven approach effectively, though this would require substantial capacity at the regional level and navigating trade-offs between bottom-up and top-down models. The policy brief discusses how a challenge-oriented approach to place-based innovation policies can bring added value to EU Cohesion Policy. In so doing, it looks at the potential implications of a challenge-led logic on three dimensions: the rationale of Cohesion Policy, its operational aspects as well as its challenges in terms of governance and coordination. Three areas are explored: how a challenge-driven logic can offer a deliberative approach to formulate challenge-oriented territorial development priorities in the context of Cohesion Policy; how the challenge-oriented approach can provide an optimal coordination framework to consolidate and streamline public investments from across policy areas and governance levels; how it can reinforce stakeholders engagement in Cohesion Policy around localised challenges and help build challenge-oriented partnerships.