This paper focuses on the impact of the Smart Specialisation Strategy (S3) and Industry 4.0 (I4) initiatives on firms’ performance in Italy during the 2014-2020 programming period. By analysing European Regional Development Fund (ERDF)-funded projects, we use OpenCoesione data and the staggered Difference-in-Differences approach to assess the effectiveness of S3 and I4 investment projects. Our results reveal that firms’ projects integrating I4 technologies within the regional S3 framework significantly enhance firms’ performance measured, alternatively, by value added, employment and labour productivity. This positive effect is particularly evident when compared to firms' investment projects funded under other ERDF plans. Our analysis underlines the role of S3 and I4 initiatives in stimulating innovation and firms’ outcomes. It carries profound implications for managers and firms, highlighting strategic and focused investment in S3 and I4 as a pathway to enhanced regional innovation and development effectiveness.