Lapland’s Arctic Specialisation Programme Programme written by team: Kimmo Heikka, Kristiina Jokelainen and Jukka Teräs from The Regional Council of

Cover photos: Lapland The North of www.onlyinlapland.com; Stora Enso; Agnico-Eagle, Kittilan kaivos

Other photos in order of appearance: Stora Enso; Detria.fi; Juha Pyhäjärvi; Lappset Group Ltd; Hotel & Igloovillage Kakslauttanen; Timo Ari; Agnico-Eagle, Kittilä mine; Lapland The North of Finland; Arctic Power, Kalle Junttila; Regional Council of Lapland, Lapland The North of Finland; Mikko Jokinen

Layout and graphic design: Markus Ylikoski / Reddo Partners Ltd

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Regional Council of Lapland

ISBN: 978-951-9244-72-3

Annals: A38/2013

Rovaniemi 2013 Lapland’s Arctic Specialisation Programme

Regional Council of Lapland, November 2013

Table Of Contents

Foreword 7 Summary 8 1. Introduction 10 1.1 Finland’s Strategy for the Arctic Region2013 12 1.2 Definition of the Arctic operational environment 13 1.3 Global drivers of Arctic growth 14 2. Lapland: The Most Arctic Region In The European Union 15 2.1. Current state analysis: Lapland 2013 15 2.1.1 Viewpoints of Lapland’s economic actors concerning the Arctic 17 2.1.2 Lapland of industries - Arctic business 19 2.1.3 Lapland of innovations 23 2.1.4 Lapland of expertise 25 2.1.5 International Lapland 28 2.1.6 Sustainable Lapland 29 3. Vision And Strategy Of Lapland’s Arctic Specialisation 33 3.1 Vision 33 3.2 Six cornerstones of Arctic development in Lapland 34 3.3 Strategic Arctic priorities of industries in Lapland 36 3.3.1 Priorities of Arctic business in Lapland 37 3.4 Education and RDI as part of Lapland’s Arctic specialisation 40 4 Implementation Of Lapland’s Arctic Specialisation Programme 41 4.1 Implementation of selected priorities in 2014-2020 41 4.1.1 Refining Arctic natural resources 41 4.1.2 Utilising Arctic natural conditions 42 4.1.3 Cross-cutting development for Arctic growth 42 4.2 Detailed presentation of proposals for action 44 4.1.1 Refining Arctic natural resources 44 4.1.2 Utilising Arctic natural conditions 48 4.1.3 Cross-cutting development for Arctic growth 51 4.2 Roadmap 2014–2020 57 5. Programme Monitoring and Assessment 62 5.1 Introduction 62 5.2 Role of monitoring and assessment 62 5.3 Monitoring and assessment of the Arctic Specialisation Programme 63 ANNEX The streering group of the Lapland’s Arctic Specialisation Programme 67 6 Foreword

Everybody is today talking about Arcticness, sought in bioeconomy. The key of the emphasising either threats or opportunities, programme is the strong positioning of our depending on the speaker and viewpoint. region as part of national and international There are major global factors of change Arctic development. In the future, Lapland behind all this, ranging from climate change will be more distinctively profiled into an and fluctuations in the balance of power in international centre of Arctic transport, global economy to the increased demand information and telecommunications. for natural resources. Climate change and Lapland’s Arctic Specialisation Programme the possible melting of polar ice may lead has been prepared jointly by Lapland’s to opening up a new sea route to the Arctic regional actors. I wish to thank all the Ocean and a new commercial route to Asia, parties who have contributed to this which has gradually become the centre of programme for their committed efforts that power of the new global economy. Climate show faith in the future. For us in Lapland, change will also facilitate the exploitation of Arcticness shows as vast potential. The minerals and natural resources in northern opportunities offered by energy, logistics regions. It has been estimated that almost and abundant natural resources are waiting one fourth of the world’s unexploited oil and to be exploited. Above all ordinary, it is safe gas resources are located in Arctic regions. to say that Lapland is the best Arctic region! In this change of the operational environment, Finland has begun to define 22.10.2013 its national position with regard to Arctic development prospects: the Council of State Mika Riipi revised Finland’s national Arctic Strategy County Governor in August 2013. The revised strategy emphasises the increasing importance of the Arctic Region and the idea of whole Finland as an Arctic country. As an action programme for Finland’s most Arctic Region, Lapland’s Arctic Specialisation Programme can be considered to specify Finland’s national Arctic Strategy. The programme takes the objectives of the national strategy to a more concrete level and brings Lapland’s role and importance in Arctic development prospects to the level it deserves. Furthermore, the programme is Lapland’s response to the European Union’s Smart Specialisation concept for the next programming period. The programme highlights Lapland’s natural resources and natural conditions, their sustainable utilisation, and increasing value added. Lapland’s strong spearhead sectors are still tourism and the mining industry, and opportunities have also been

7 Summary

The European Commission has introduced business whose sustainable utilisation will the Smart Specialisation1 policy concept in offer Lapland opportunities to exploit its order to support the regions of the EU and commercial expertise in the short, medium to boost competitiveness and innovation. and long term. Another aim is to offer Smart specialisation strategies help regions employment to inhabitants and provide integrate their development efforts through companies with preconditions for new EU financing. Lapland’s Arctic Specialisation business. Programme focuses on the points of According to the vision of Lapland’s Arctic departure and opportunities of Lapland’s Specialisation Programme 2030, Lapland will smart specialisation and on concrete draft enjoy a leading position in exploiting and proposals. The key target group in the commercialising Arctic natural resources programme is financing authorities and and conditions. Lapland will also be the Lapland’s development organisations. centre of international arctic transport, Arctic regions are important in global information and telecommunications. From terms, so they also arouse international the point of view of Lapland’s future, the interest from the point of view of finance, aspects to be highlighted are the sustainable expertise, education and research. Finland’s utilisation of natural resources and natural new national Arctic strategy also relies on conditions and increasing value added. The this approach and the fact that Finland as a most important Arctic spearhead sectors whole is part of the Arctic Region. Lapland, in Lapland are the mining and metal Finland’s northernmost region, is an industry, tourism and bioeconomy. Although essential part of Finland’s Arctic character, Lapland’s Arctic Specialisation Programme considering that of the people living to the focuses on specific sectors, it also challenges north of the 60th latitude, almost every others to innovate new, strong spearhead third is a Finn2. sectors. The expertise that has accumulated The following development cornerstones in Lapland will be utilised across several have been identified in the preparation of sectors. The unexploited draft innovations Lapland’s Arctic Specialisation Programme: generated by companies, research institutes accessibility, the sustainable utilisation of and educational institutions in Lapland will natural resources and natural conditions, be investigated systematically. increasing value added, making more Lapland’s Arctic Specialisation Programme efficient use of the expertise already contains proposals for action for the period accumulated in Lapland, and Arctic pride. 2014-2020. The proposals are divided The programme recognises the role of into three main categories: the refining Lapland as an Arctic living environment, in of Arctic natural resources, utilisation of which development efforts are constantly Arctic natural conditions and cross-cutting pursued in close interaction with inhabitants development enabling Arctic growth. The and the Arctic nature. The key objective programme contains some 50 specified is to identify and develop Arctic fields of proposals for action. The programme is linked with Lapland’s Arctic Specialisation

1 roadmap, which sets out the phasing of http://ec.europa.eu/research/regions/index_en.cfm?pg=smart_spe- cialisation the various actions for the period 2014- 2 http://valtioneuvosto.fi/tiedostot/julkinen/arktinen_strategia/ 2020. In addition, the programme describes Suomen_arktinen_strategia_fi.pdf

8 the structure of financing innovations and business in Lapland, within the framework of which the actions will be implemented. The proposals for action of the Arctic programme will be integrated with broader regional development work by means of a regional assessment and monitoring model.

9 1. Introducti on

The promoti on of innovati on is one of Arcti c Region, which requires combining the key prioriti es of the European Union’s public fi nancing and private investments regional policy for the next programming and maximising the benefi ts of the inputs period (2014- 2020). The purpose of the made in the region. Smart Specialisati on concept launched by Lapland’s Arcti c Specialisati on Strategy the European Union3 is to help regions under the theme ’Lapland - A Strong fi nd innovati on opportuniti es in their own Arcti c Expert’ was prepared in an ERDF sectors and services. In practi ce, smart project by the Regional Council of Lapland specialisati on refers to specialisati on in between October 2012 and November which economic growth is based on uti lising 2013. The work largely followed the six- competence structures to develop the phase guidelines issued by the European regional business sector. Commission (Figure 1). Smart specialisati on helps fi nd interacti on The Regional Council of Lapland assigned between and within diff erent sectors, ‘Lapland’s Arcti c Specialisati on Programme’ services and technologies both in and the status of a Smart Specialisati on Strategy. between regions. Financial aid is allocated The programme was prepared along with from structural funds on the conditi on that developing the 2014-2017 Innovati on regional and nati onal Smart Specialisati on Programme for the Lapland University strategies have been prepared4 . One of Consorti um. The Arcti c Specialisati on the most important aims of the Smart Programme was integrated with the regional

Implementation, Integration of Governance: Ensuring Developing an Analysis of regional definition of a coherent monitoring participation and overall vision of the Identification of context and potential policy mix, roadmaps and evaluation ownership region’s future priorities for innovation and action plan mechanisms

Figure 1: Phases of the Smart Specialisati on Strategy

Specialisati on strategy is to assist regions operati onal programme and emphasises in integrati ng their development eff orts the most important regional drivers and with the EU’s fi nancial instruments and emerging spearhead sectors. programmes in order to create mutually The Arcti c Specialisati on Programme complementary proposals for acti on. highlights in parti cular soluti on models Lapland is Finland’s most Arcti c that take account of the special features region, which is developed in view of of the region. In additi on, perspecti ve is the internati onal, nati onal and regional needed on how the inputs from diff erent operati onal environment and its Arcti c fi nancing programmes and instruments special features. The enti re Lapland is an can be channelled to joint development projects. At the same ti me, the eff ects of 3 htt p://ec.europa.eu/regional_policy/newsroom/detail. fi nancing can be maximised and effi cient cfm?id=361&lang=en use made of the diminishing resources. 4 htt p://ec.europa.eu/regional_policy/sources/docgener/infor- The increased internati onal interest shown mat/2014/smart_specialisati on_fi .pdf

10 towards Arctic regions also calls for actions regularly and the group was consulted to manage Arctic knowhow and expertise for feedback on the choices made in in Arctic conditions. the priorities. A number of stakeholder meetings and workshops were arranged during the project, theme interviews were The Regional Council conducted with companies and economic stakeholders, and an electronic business of Lapland assigned survey was carried out. In addition, a broad consultation was arranged with the most ’Lapland’s Arctic important stakeholders towards the end of the programme preparation process. The Specialisation Programme’ authors of the programme participated in future workshops, which were organised as the status of a Smart part of the regional operational programme work and by higher education institutions. Specialisation Strategy. Existing thematic strategies and programme documents were also used as background material. The integration of the Arctic Different types of analysis and planning Specialisation Programme with other methods have been used in the preparation regional development efforts was ensured of the programme in order to take account through extensive stakeholder work and of the needs and views of a large group participatory actions. of actors. Interviews, workshops and A group of development priorities and regional hearings were arranged during values was selected for use as the basis and the preparation process, peer evaluation starting point of the Arctic Specialisation was sought at the international level, and Programme, as shown in the figure below the progress of the work was presented at (Figure 2). different venues. A steering group consisting of several members was appointed to the project. The work was presented to the group

Figure 2: Lapland as an arctic expert and actor / Lapland’s Arctic Programme

11 Figure 3: Arctic environment5

1.1 Finland’s Strategy for the stability and the environment, international 5 6 Arctic Region 2013 Arctic cooperation, and the objectives and implementation of the programme. Based on the guidelines issued by the According to the vision of the revised Finnish Government, Finland’s Strategy national Arctic strategy, Finland will be for the Arctic Region was revised by a an active operator capable of sustainably working group, which published the combining environmental business document ’Finland’s Strategy for the opportunities through international Arctic Region 2013 - Decision in Principle cooperation. The revised strategy of the Council of State 23 August 2013’ emphasises the increasing importance of in August. According to the document, the Arctic Region and the idea of Finland as Finland’s revised Strategy for the Arctic an Arctic country. The strategy viewpoints Region 2013 is based on comprehensiveness describe Finland’s role in terms of four and a broad-based approach. The Strategy pillars: an Arctic country, an Arctic expert, comprises the following themes: vision, sustainable development and environmental Finland’s Arctic population, education boundary conditions, and international and research, Finland’s Arctic business, cooperation. According to the strategy, Finland 5 Nordregio/J. Roto. can adopt a key role by opening up and 6 http://valtioneuvosto.fi/tiedostot/julkinen/arktinen_strategia/ innovating with new opportunities in cold- Suomen_arktinen_strategia_fi.pdf

12 climate expertise, construction, technology, globe’s surface area (7.9 million km²) and refining, product development, services and approximately 14% of the total area of research. The aim is to promote growth and the Arctic Region (2 million km²). Some competitiveness, but only by respecting 30% of the area of Lapland (approximately environmental values. The document also 35 000 km²) is protected under a nature points out that the objectives of the national conservation scheme. Arctic strategy with regard to tourism, The starting point of Finland’s Strategy renewable natural resources, mining and for the Arctic Region 2013 is that Finland, transport, for instance, are for the most part crossed by the Arctic Circle, is an Arctic achieved in Lapland (Finland’s Strategy for country. The Arctic Region arouses national the Arctic Region, page 10). interest from the viewpoints of economy, expertise, education and research, In the approach adopted in Lapland’s Arctic Specialisation Programme, the Arctic Region 1.2 Definition of the Arctic is defined according to Finland’s national strategy and based on the fact that Lapland operational environment is the most Arctic region in Finland and the EU. The Arctic region can be defined in a variety of ways. Geographically, the Arctic Region borders on the Arctic Circle (66° 33’N) and People of the Arctic region can also be defined in terms of temperature, the tree line, permafrost, the coverage There are almost four million inhabitants of sea ice and different types of political in the Arctic Region, of whom some 10% agreements7. represent indigenous peoples. The share of the indigenous population varies regionally from a few percentages to almost a hundred Basic features of the Arctic region8 per cent. There are 19 million inhabitants north of the 60th latitude, most of them Major variations in cold and the amount of Finns. Therefore, Finland’s Arctic character light are among the basic elements of the is emphasised by the fact that almost every Arctic nature. The people, flora and fauna of third person living north of the 60th latitude the region have adapted themselves to cold is a Finn9. weather in one way or another. In terms of the tree line, the Arctic Region begins from the transition zone between forest Expertise in Arctic conditions10 and the Arctic treeless tundra. Continuous permafrost prevails in the region if it covers Expertise in Arctic conditions means that at least 90% of the land area. In sea areas, people, machines, equipment, companies the border of the Arctic Region is defined and infrastructure, in fact the whole in terms of the period for which the sea society, are capable of dealing with cold remains covered by ice. Nature conservation weather and sharp fluctuations in natural areas make up some 5 per cent of the conditions. People, too, must be able to work efficiently and safely. Infrastructure, 7 buildings, machines, equipment and http://www.arcticcentre.org/Suomeksi/TIEDEVIESTINTA/Arktinen- alue. industrial plants must function properly

8 9 Arctic Centre, Conservation of Arctic Flora and Fauna (CAFF) 1996. http://valtioneuvosto.fi/tiedostot/julkinen/arktinen_strategia/ Proposed Protected Areas in the Circumpolar Arctic 1996. CAFF Habitat Suomen_arktinen_strategia_fi.pdf. Conservation Report No. 2, Arctic Flora and Fauna, status and conserva- 10 tion (CAFF) 2001. Edita, Helsinki. ISBN 9979-9476-5-9. K.Heikka & Digipolis Oy.

13 even in 85°C temperature fluctuations (-50 As a result of advances in technology, many – +35), in different types of rain (e.g. rain, natural resources can be utilised profitably freezing drizzle and snowstorm), wind, and and transported to the global markets. It in light and humidity fluctuations. Expertise should also be noted that there are major in Arctic conditions means the ability to cross-border Arctic transport and logistics comprehensively control and utilise these solutions. Therefore, new transport aspects. connections call for cooperation and rules. Sustainable development has raised the safety of working environments, transport 1.3 Global drivers of Arctic and people’s everyday lives to a new level. Arctic regions must have globally growth cutting-edge capabilities in productivity development to ensure that competitiveness To form the big picture, global forces of can be developed favourably and the change must be examined as the starting services of societies secured. Productivity points for Arctic growth, which, too, is development calls for an ability to act based on international demand and change. as a forerunner in the use of the latest According to Professor Laurence C. Smith technology. (2011), there are four global forces that Globally the most challenging force shape the Arctic Region and its growth: changing the Arctic Region is perhaps demography, the demand for natural climate change, which seems to cause resources, globalisation and climate change. glaciers and permafrost melt at an According to UN forecasts, the world’s accelerating speed. Larger areas of the Arctic population will reach its peak - approximately Ocean remain without ice cover for longer 10 billion (now around 7 billion) - during periods, which will open up new ground- the current century. At the same time, breaking opportunities to global logistics. people are packing in cities. It has been The importance of maritime expertise will estimated that globally 10 000 people move still be emphasised in spite of trends in from the countryside to cities every hour. Arctic climate. Urbanisation also offers opportunities for Among other things, climate change prosperity, as urbanisation and growth in may change growth conditions in Northern consumer demand will together translate Europe considerably. This will make it into huge investments in buildings and possible to cultivate new plant species, but infrastructure. at the same time plant diseases and pests Population growth, urbanisation and will spread to the north. There are abundant gentrification have increased the demand pure freshwater resources in Fennoscandia for natural resources. In addition to and elsewhere in the north. Water may exploiting known natural resources, people become an even more valuable natural are constantly looking for new resources - resource than oil when climate change dries also in Arctic regions. Nordic societies are up parts of Southern Europe. politically stable and have a small country risk. Globalisation development (e.g. growth in international trade) in fact offers vast opportunities to the Arctic Region. The development of energy technologies plays an important role in the Arctic regions. The advances made in biotechnology, nanotechnology and material sciences generate new demand for raw materials.

14 2. Lapland: The Most Arctic Region In The European Union

Statistical facts on Lapland:

• Land area 92 665 square kilometres, which is 25.7% of Finland’s land area. • 182 810 inhabitants, which is 3.4% of Finland’s population (in August 2013). • Largest residential centres: Rovaniemi (60 944 inhabitants), (22 399 inhabitants) and (22 172 inhabitants) • Six sub-regions: Rovaniemi region (Rovaniemi and ), Kemi-Tornio (Kemi, Keminmaa, Simo, and Tornio), Eastern Lapland (Kemijärvi, , , and ), Northern Lapland (Inari, Sodankylä and ), Fell Lapland (Enontekiö, Kittilä and , ) and Torne Valley ( and ). • Employment: municipal sector 27.8% (whole country 22.5%), state and state-owned companies 10.8% (whole country 8.8%) and private sector 49.2% (whole country 58.3%).

Figure 4: Lapland’s regional structure and development corridors11

2.1. Current state analysis: EU’s Smart Specialisation Programme,12 Lapland 201311 international experts mentioned the following aspects, for example, which are related to the development of Lapland: What are the starting points of the current state and future of Lapland from the Arctic • Lapland is a unique region in Europe and viewpoint? Lapland is the northernmost globally region in Finland and the whole EU, and • In developing Lapland, one should not be the most Arctic region of Finland. The Arctic content with plans and programmes that character is present throughout Lapland’s merely repeat the plans prepared for many identity and activities. This chapter looks other regions. at the current state and future of Lapland • Development programmes are limited by from the Arctic perspective. Lapland’s population base and demographic In the peer review meeting in Spain trends. On the other hand, opportunities are in February 2013, which is part of the offered by Lapland’s international profile

11 12 Source: Regional Council of Lapland. http://s3platform.jrc.ec.europa.eu/6th-peer-review-7-8-feb.

15 and its location as the neighbour of many Finland’s Arctic character’ e.g. as follows: countries. • To develop industry in Lapland, energy • Lapland’s research and education expertise, solutions play an important role especially e.g. the University of Lapland, Arctic Centre in the use of natural resources. Energy of the University of Lapland, Lapland solutions may also influence the image and University of Applied Sciences, Lapland’s brand of Lapland. It is also important to research institutes, and the Sami Education come up with sustainable energy solutions Institute. and present them to parties outside Lapland. • Utilisation of Lapland’s natural resources • Entrepreneurship offers a wealth of new (mining in particular) opportunities to Lapland. • Tourism in Lapland • Northern transport and logistics What is Arctic operation like from Lapland’s development needs perspective? In the international EU Peer • Lapland from the point of view of overall Review meeting in Spain, which was safety and the environment connected with the preparation of Lapland’s • Position of the Sami in Arctic Finland Smart Specialisation Programme, Lapland’s • Position of Lapland in national and current situation, competitive advantages international Arctic cooperation. and key challenges were summarised as follows: The Arctic Council plays an important role in the development of the region. Lapland is • The mining industry is undergoing strong well positioned to apply the guidelines and growth in the industrial and business sector. priorities of the Arctic Council in the next The key sectors are tourism and the process few years. At the same time, the Council industry (steel industry, forest industry). acts as a venue where Lapland can influence Arctic business opportunities related to matters actively. climate change, for example, are opening up. In its Kiruna Declaration of 2013 the • Lapland’s competitive advantages are Arctic Council emphasised the sustainable its effective transport connections and development of trades and decided logistics. Additional strengths are the strong to establish a task force to prepare a traditional industry, the use of information circumpolar business forum. In addition, technology, expertise in international it decided to set up a task force for tourism, pure nature, high quality of living, coordinating Arctic research in the member excellent range of research and development states. Both the task forces offer Lapland services, and the availability of extensive a concrete channel for extending Arctic educational services. international activities and improving • Challenges are posed by long distances, their efficiency further. Finland will be the Arctic conditions, increasing the number chairing country of the Barents Euro-Arctic of SMEs, the small number of foreign Council (BEAC) for a two-year period from companies and experts, maintaining autumn 2013 onwards. This will expand Lapland’s image, a falling population trend, the international cooperation network and migration loss, and combining large-scale offer an opportunity to influence guidelines investments with living environments. concerning Lapland.

Finland’s Strategy for the Arctic Region 2013 document13 refers to the position, role and functions of Lapland as ’an essential part of

13 http://valtioneuvosto.fi/tiedostot/julkinen/arktinen_strategia/ Suomen_arktinen_strategia_fi.pdf.

16 2.1.1 Viewpoints of Lapland’s basic knowledge of Lapland, logistics economic actors concerning the expertise and material knowledge for use in Arctic challenging conditions, winter construction, and knowledge of berries and wild game. The preparation of Lapland’s Arctic The respondents wanted to enter into closer Specialisation Programme involved business cooperation in the Arctic Region interviews with companies, major both as partners and experts. Among other economic actors and the representatives things, the aim with marketing efforts is to of development organisations. Workshops find contacts with the mining sector market were also arranged, and thematic interviews in Arctic regions. There is also need to make and web surveys were used for companies, more extensive use of web-based marketing. which varied from large-scale industrial enterprises to one-man firms. Below is a summary of the opinions that companies Arctic tourism business and their stakeholders had about Arcticness. The interviews and workshops paid special attention to the question of what the Large-scale Arctic projects key activities and attraction factors of Arctic tourism are. Of the respondents, There are many broad investment projects slightly over 40% reported that they were in progress or pending in the Arctic regions. engaged in Arctic tourism business in one So far only few of Lapland’s companies way or another. In the near future, they have participated in large-scale projects. would like to participate more closely in It should be noted that almost 80% of the the international joint marketing of Arctic respondents were interested in participating tourism and in utilising the opportunities in large-scale projects in Arctic regions. offered by nature, for instance. In addition, Similar results were also obtained from they saw opportunities among other things the interviews and projects. Forty per cent in developing the interfaces between Arctic of the respondents had participated in tourism, construction technology and the investment projects in the North Calotte industrial sector. Experience services, and Northwest Russia, and one fourth natural conditions, such as northern lights, had received invitations to tender for and snow and ice construction in particular, such projects directly from customers, as are utilised as Arctic attraction factors. part of invitations to tender from mining companies, through other companies, and as raw material inquiries from equipment Arcticness is an attraction manufacturers. factor in tourism Arctic business today and in the near future

From the point of view companies, Impediments to Arctic business Arcticness is understood as an everyday element broadly connected with business. The lack of information on future Many of the replies suggested that the investment projects is one of the greatest companies in Lapland consider practically impediments to expanding Arctic business. all of their operations Arctic! The things In general, the overall lack of information regarded as special expertise include was considered an impediment to business

17 development. Furthermore, challenges in internationalisation programmes, for the recruitment of skilled personnel, and instance. Companies expected innovative legislation, permit and contract issues, public procurements, implemented by were taken up in some of the replies. municipal snow and ice construction Workshop participants in particular wanted companies, for instance. more education and research that would support the development of business. Other impediments included the lack of courage More information to grasp Arctic opportunities and the lack of linguistic skills. Even ’the lack of faith in expected from authorities this Arctic flimsiness’ was mentioned as an impediment.

Special expectations for Lapland’s Lack of information as Arctic Programme an impediment to Arctic The responding companies mentioned several development perspectives in view of business Lapland’s Arctic Specialisation Programme. The main themes were:

• Concrete measures and taking account of the Arctic expertise, education and business viewpoint: It was insisted in many of projects the replies that the Arctic expertise available in Lapland (held by the University and the Companies do not consider Arctic education University of Applied Sciences, for example) a special need. Companies and business should be linked with business more closely. actors pursue some cooperation with ’Things are now done separately without research and sector research institutes setting business goals or having business and educational institutions. Important expertise. Project goals should be specifically forms of cooperation are final papers and targeted at launching business.’ benchmarking journeys. Concrete needs • Sustainable development and the combining were emphasised in Arctic expertise, such of industries: ’Increasing cooperation and as continuously updating Russia-related generating agreement between different practices and improving linguistic skills. sectors: tourism, mining, forestry, culture etc. Enhancing the opportunities of the sectors in a manner that will promote Expectations regarding cooperation regional employment and economy without with authorities unsustainably over-exploiting nature...’ • Role of the public sector as a network actor Most of all the companies hoped that and link between experts: ‘In my opinion, authorities would increase the amount there should be a public network coordinator of relevant information, set up concrete who would manage projects and get as networks and projects, and safeguard many companies as possible involved in the business interests. They would also welcome activities. This would help the establishment additional efforts related to infrastructure of networks and doing things together and maintenance, the communication of also promote regional well-being.’ information related to international • Special Arctic opportunities and challenges: transports and the implementation of ’Opportunities and requirements of the

18 commercial adopti on of the North-East It is challenging to defi ne what exactly is Passage.’ ’Tourism programmes, in which Arcti c business. Here, the basic criteria are Chinese tourists, for instance, would be taken the uti lisati on of Arcti c natural resources directly to Kirkenes by boat and to Rovaniemi and conditi ons, use of experti se related to by road.’ ’Year-around availability of nature Arcti c conditi ons in products and services, trails.’ ’Monitoring large-scale projects, and and actual Arcti c products. matt ers related to their schedules.’ • Access to the internati onal markets, including large-scale Arcti c projects. Arcti c business involves the uti lisati on of natural Companies want concrete resources and experti se results related to Arcti c conditi ons in products and services 2.1.2 Lapland of industries - Arcti c business A mine or industrial plant, for example, does not automati cally pursue Arcti c business The key actors and operati ons in Arcti c even if it operates in the north. However, business in Lapland are presented in the companies do have to take Arcti c conditi ons fi gure below (Figure 5). into considerati on in their operati ons, which

Customers of Arctic production and services Other industries using Arctic Extractive industries Arctic production and Large-scale Arctic projects services

Customer / user needs Arctic Specialisation Research and Education Competence of Arctic

Branches of Activities and Industries Experts to Operate Authority in the Arctic Circumstances Competence of Arctic of Arctic Competence

Sustainability and Society

Arctic Human Capital Arctic knowledge networks and partnerships

Specific Arctic Issues, for example Indigenous people

Figure 5: Arcti c business in Lapland

19 20 Photos: Stora Enso, Detria.fi, Juha Pyhäjärvi, Lappset Group Ltd. calls for special expertise and solutions. The Large-scale Arctic projects same also applies to mining and industrial service suppliers, who must be able to utilise natural resources deal with the prevailing conditions and have in-depth expertise in order to address customers’ needs. There are abundant renewable natural The customers of Arctic business in resources in Lapland, such as forests, Lapland comprise both large-scale projects farmland, water and wild game. Lapland is (oil and gas industry in Norway and Russia, part of the northern coniferous zone and and the mining industry in the North Calotte) has extensive forest resources. Currently and other services and customers (e.g. Arctic commercial forests yield more wood than construction and bioeconomy). Research what is exploited. Wood is a renewable, institutes and educational institutions low-carbon raw material and can be support Arctic business in Lapland, create processed into a number of products and preconditions and offer new opportunities. scaled into profitable business ranging from Business is controlled and regulated by single carpenter-made items to industrial authorities, who also possess extensive production worth of billions of euro. Lappish Arctic expertise. Business has networked wood is already processed in a variety regionally, nationally and internationally, and of ways into energy chips, sawn timber, also takes account of special questions, such playground equipment, houses, pulp, board as indigenous peoples. and paper, for instance. The intention is to The average annual turnover of further increase the utility value of hard, companies in Lapland totalled approximately slow-growth Lappish wood. In the future, it EUR 10 billion in 2007-2011. Of this, 59% is important to find new products in wood was generated in the Kemi-Tornio region, processing, such as biofuels. 23% in the Rovaniemi region and the Bio waste from the industry and rest in other parts of Lapland. The urban communities can also be used as regions of Rovaniemi and Kemi-Tornio, bioeconomy raw material. In fact, Lapland which altogether have slightly over 120 000 is well positioned to become a model region inhabitants, can be considered the drivers of in bioeconomy, which refers to economy Lapland’s economy - the centres of services that uses biological natural resources and industry. Thanks to tourism and mines, to produce food, products, energy and companies are increasing their turnovers services. It seeks to reduce dependency on considerably especially in Fell Lapland and fossil energy, prevent the impoverishment Northern Lapland. of ecosystems and promote sustainable Large-scale Arctic projects are highly economic development. significant investments in areas where The most high-quality and diverse tourism natural resources are utilised, and there services in the Arctic regions can be found in are also major investments related to Lapland, which has numerous fell centres, infrastructure, tourism and services. Several city-based tourism centres, and different billions of euros are invested in the northern types of natural and cultural attractions. parts of Europe every year. The companies Broadly understood, Lapland’s tourism is in Lapland have successfully participated entirely based on the utilisation of Arctic in competition for investment projects in conditions. The most important attraction the region. They have also been successful factors are its harsh nature and conditions in Northern Sweden, whereas only few (eight seasons, landscapes, the cleanest air of them have managed to benefit from in Europe, snow, ice, water, the Polar night, the growth in the oil and gas industry in northern lights and the midnight sun). Northern Norway.

21 The most high-quality testing in Europe takes place in Northern Sweden and Lapland. Companies operating tourism services in in the sector mainly offer varied testing environments and related services (e.g. the Arctic regions are accommodation and restaurant services). In addition, the sector invests in better testing available in Lapland environments, in extending testing services and in developing year-around testing.

Arctic conditions also allow the provision of tourism experience services, such as Most of the vehicle winter glass-roofed igloos for admiring northern lights, different types of snow and ice testing takes place in constructions, ice-breaker cruises on frozen sea, visits to reindeer farms, husky and Lapland and Northern snowmobile safaris, and journeys to cross the Arctic Circle. Sweden Perhaps the best example of systematic communications and brand-building is the localisation of Santa Claus at the Arctic Lapland is situated in an area interesting Circle in Rovaniemi. Lapland alone has from the point of view of receiving satellite many places where Santa Claus lives, not materials. Testing operations can be to mention other alternatives found around extended further, thanks to the expertise the world. Rovaniemi has managed to profile available in the Lapland Meteorological itself as the ’most genuine’ home to Santa Research Centre. New research and business Claus, who is a good example also in the related to weather services, for instance, sense that the theme can be linked with the are interesting from the point of view of investigation of Arctic business as a whole. Lapland. Globally the most interesting example is An excellent example of Artic products the winter testing of vehicles. Most of the is snowmobiles, which the Canadian Bombardier manufactures in its Rovaniemi plant - the only unit of this kind in Europe. Of Pho course snowmobiles could be manufactured to: Ho te anywhere, but Rovaniemi has generated l & I gl special design and manufacturing expertise oo vi lla in the course of decades and also provides g e K outstanding conditions for snowmobile a k s la testing. u tt t a n e n Special snowmobile expertise focused in Rovaniemi

22 Metal industry Forestry industry Mining and industrial large service companies Tourism Mining

Arctic testing

Green construction Biofuels industry

Local food

Reindeer herding Size of industry in Lapland of industry Size Natural products small low Growth potential of the sector high

Figure 6: Size (turnover) and growth potenti al of sectors related to Lapland’s Arcti c business14

Mining operati ons and the gas and oil 2.1.3 Lapland of innovati ons industry have increased considerably in the Barents Region, which has resulted in broad transport and logisti cs development needs. Starti ng points of innovati on Many of the surveys on the development acti viti es of transport in northern regions (e.g. Transport Needs of the Mining Industry in The purpose of Innovati on acti viti es is to the North 2013, published by the Finnish create new products and services. Another Transport Agency, and the Arcti c Railway aim is to introduce more effi cient producti on 2012 prepared by the Northern Lapland and acti on models, competi ti ve advantage Joint Municipal Authority for Regional and higher producti vity, which can be Cooperati on) describe the developing enhanced by uti lising new technology, transport needs of the north and their improving experti se and specialising. Acti ve regional impacts. New transport connecti ons innovati on is the cornerstone of boosti ng will also generate extensive service business competi ti veness and producti vity growth and indirect jobs. both in business and the public sector. The size and growth potenti al of Lapland’s Producti on and value chains are broken Arcti c business sectors are shown inFigure down into smaller parts in the face of 6. However, uncertainty around trends in economic change and in the internati onal the global economy and the operati onal division of labour, i.e. specialisati on is environment that may aff ect the mining gaining strength as a phenomenon. On the industry, for example, must be taken into other hand, some actors are strengthening considerati on in the assessment..14 producti vity and their competi ti ve positi on by adding service elements to their industrial products, for instance. 14 Source: Lapin Luotsi (adapted).

23 The main economic sectors are offers Lapland the chance to combine its traditionally divided into primary production, various sectors. The utilisation of expertise processing and services. However, this is in natural products, for instance, will create a very rough classification and does not innovations for use in wellness and health give a correct picture of the sectors or of tourism products and services. their internal change. According to some Lapland’s innovation activities are estimates, as much as a half of international targeted at fields estimated to offer growth export industry jobs are classified as services potential and impact. There are growth related to the product, the customer opportunities in several fields of expertise in or companies. The change in primary Arctic business, and innovation investments production has resulted in a transition should not be limited to technology only. to services through processing. This According to the results of some surveys, phenomenon is underlined by the consumer the most important factors contributing demand for organic and local food, which in to the growth of companies in any sector turn has increased the economic importance are15 the combinations of technological, of primary production. marketing and organisational innovations. Service processes have changed, due to This finding should be one of the key points fast information technology development of departure when outlining Lapland’s and and digitalisation. According to a traditional Arctic innovation activities. view, services are consumed almost at the Lapland’s research institutes and same time as they are produced, whereas educational institutions provide a good basis digital services can be consumed regardless for Arctic innovation activities. However, of time and place. Trade, travel agencies, they should specialise more boldly in Arctic education and entertainment in particular themes. This could strengthen the position have entered international information of the institutions in the national division of networks to stay. labour between education and research. At the same time it would offer strong support to developing Arctic business in Lapland. Lapland’s Arctic innovations The global economic change is also Lapland’s research evident in Lapland. Transitions within and between primary production, processing institutes and educational and services provide the basic starting points for innovation activities in Lapland. institutions should International development suggests that specialisation is the path to improve specialise more boldly productivity and competitiveness. In the international division of labour, companies in Lapland are, by their very nature, in From the point of view of Arctic business the position to develop and specialise in and innovation activities, internationally the refining of Arctic natural resources interesting real-life testing and pilot (industry, mines and forests) and conditions environments, or living labs, have been set (tourism) and to make use of the expertise up in Lapland. Good examples of innovation they have in Arctic conditions. Lapland is environments of this kind are numerous by far the forerunner in developing tourism tourism areas, urban centres, villages, in the Arctic regions. The tourism industry transport infrastructure, areas used by the has kept close eye on trends, of which the 15 most recent one is wellness tourism that ETLA uutta arvoa palveluista, http://www.etla.fi/wp-content/up- loads/ETLA-B256.pdf.

24 Finnish Defence Forces, windfarms, and Arctic design is a future industry mining and industrial environments. One of the most interesting environments is Lapland has produced a number of Arctic connected with the testing of vehicles and innovations, such as solutions for the large- tyres. scale industry, new innovations for small firms, and Arctic innovations for the public sector. Lapland arouses international interest 2.1.4 Lapland of expertise as a testing and pilot Expertise in Lapland rests on the network of higher education institutions, vocational environment (a living lab) institutes and sector research institutes, which cover the whole Lapland. The higher education institutions Lapland’s testing and pilot environments of Lapland, the Kemi-Tornio University have opened doors to the testing business. of Applied Sciences, the University of At the same time, opportunities have Lapland and Rovaniemi University of emerged to develop, commercialise and Applied Sciences have acted as pioneers conceptualise expertise in Arctic conditions developing regional cooperation in Finland into new business. Arctic conditions can by first establishing the Lapland Regional be refined into a profitable business idea University and later the Lapland University most naturally in tourism, in which the Consortium. The purpose of the cooperation living labs provide continuous information has been to ensure that the higher on customers’ experiences and purchase education institutions, which are among decisions. In mining and industrial the northernmost in the whole of Europe, operations, Arctic conditions mainly impose will also be able to offer educational and challenges in construction and maintenance, research services in the future. The Kemi- for example. These challenges must be Tornio University of Applied Sciences and addressed in sustainable, cost-efficient Rovaniemi University of Applied Sciences ways that can also be multiplied and will be merged into Lapland University of commercialised for use in other projects. Applied Sciences on 1 January 2014. Arctic Design is an interesting, evolving Since 2008, the consortium has had sector contributing to Lapland’s profile. a joint Innovation programme, which It will hardly change the balance of has defined the priorities of research, Lapland’s key industries, and its potential development and innovation activities (RDI). lies elsewhere. Arctic Design and its tools As a result of the cooperation, two institutes cut across many sectors. Design can have been founded together with vocational act as an important instrument in the education: commercialisation and conceptualisation of expertise in Arctic conditions into new • The Multidimensional Tourism Institute is a business. In the Design Finland programme joint institute made up of tourism research (Ministry of Employment and the Economy/ at the University of Lapland, the tourism, Ministry of Education and Culture 2012), the hospitality management and finance degree University of Lapland was ranked among the programmes of Rovaniemi University of three centres of expertise in Finland whose Applied Sciences, and Lapland Tourism potential field of expertise is Arctic design. College. • The Institute for Northern Culture is a

25 joint institute for the Faculty of Arts of the and growth in the Arctic operational University of Lapland, Business and Culture environment. It will transform the strengths at Kemi-Tornio University of Applied Sciences, and opportunities of its changing Arctic and cultural education at Vocational College operational environment into new vitality Lappia. to address the needs of northern areas. Its strategic core is expertise in Arctic The University of Lapland, which has some conditions. The strategic priorities of Lapland 5000 degree students, provides education in University of Applied Sciences are Arctic science and the arts. According to its profile, cooperation, expertise in northern borders, it specialises in Arctic and northern themes promoting the intelligent use of natural and tourism research. In addition, there resources, management of distances, and are three main multi-disciplinary priorities security expertise. Entrepreneurship and within the various profile areas: service business development are a cross-cutting design, northern well-being, changing work theme in all the priorities. and sustainable development, and justice and fairness. The fields of education and research The future Lapland covered include pedagogy, tourism and business, law, industrial art, social University of Applied sciences, and northern and Arctic themes. The university promotes sustainable Sciences will be a driver development, well-being and equality both regionally and globally. The University of of change and growth Lapland also houses the Arctic Centre, which produces information for securing in the Arctic operational sustainable development in Arctic regions. environment. The University of Lapland, Lapland Vocational College is a vocational which has some 5000 educational institution run by Rovaniemi municipal education and training degree students, provides consortium. It arranges vocational basic and adult education in all fields of education. education in science and Some 5000 students study in the college every year. Other sources of vocational the arts. According to its education in the Rovaniemi municipal and training consortium are the Lapland Tourism profile, it specialises in College profit area, the Santa Sports Institute enterprise and the Lapland Apprenticeship Arctic themes. Centre. Vocational College Lappia is run by Kemi-Tornionlaakso municipal education The future Lapland University of Applied and training consortium. The college has Sciences16 will be a driver of change 2700 young students and some 1300 adult students. Basic degrees can be completed in five fields: well-being, culture, nature, social 16 To be established on 1 January 2014 when Kemi University of services and technology. Applied Sciences and Rovaniemi University of Applied Sciences are merged. The Sami Education Institute is a unique

26 Lapland Vocational College, Lappia, the Sami Educational Institute, East Lapland Vocational College, the Arctic Centre, the Finnish Forest Research Institute, the Geological Survey of Finland, Agrifood Research Finland, the Finnish Game and Fisheries Research Institute and the Finnish Environment Institute are part of Lapland’s research and education network.

educational institution, with Inari as its main be established at the Arctic Centre. The place of operation. The aim of the institute information centre would serve the Arctic is to increase the vocational expertise of information needs of the entire European the Sami, arrange education mainly for the Union. needs of business in the Sami area, promote The Geological Survey of Finland GTK is a regional employment, and maintain and leading European expert in the assessment, develop the Sami culture. It arranges basic research and sustainable use of mineral vocational education, vocational continuing resources. Its mission is to produce the and supplementary education, and courses geological information needed by the and semester-based education in Sami business sector and the society in order to language and culture. promote the controlled, sustainable use of East Lapland Vocational College in soil and natural resources. The GTK’s unit in Kemijärvi offers education in a variety of Northern Finland specialises in services to fields. Students can complete qualifications the mining industry. in services, production, social services and The Northern Finland unit of the natural resources. Finnish Forest Research Institute Metla The research expertise base in Lapland specialises in research into ecologically and is strengthened by extensive research economically efficient forest regeneration into natural resources, which is pursued and cultivation methods. It also investigates by separate regional units in the sector the combining of different types of forest institutes. use and questions related to nature tourism. The Arctic Centre of the University of MTT Agrifood Research Finland Lapland specialises in multi-disciplinary specialises in the cultivation of feed, food, Arctic research into global change, ornamental and special plants and in the sustainable development, environmental semi-cultivation and collecting production and minority rights, and Arctic information of natural plants under cold conditions. structures. It communicates on Arctic Research information is used to promote issues through information services, a the availability of pure raw materials and library, and science centre exhibitions. In the utilisation of northern quality in rural addition, the centre acts as an expert for businesses. Finnish government in international politics The Finnish Game and Fisheries regarding themes related to the Arctic Research Institute RKTL has four units in Region. In fact, Finland will propose to the Lapland, which specialise in research into EU that an Arctic information centre should reindeer husbandry, wild game monitoring

27 and research, the monitoring of fish stocks the University of Turku’s Lapland research and fisheries, and research related to the institute Kevo. most important lakes and rivers in Lapland, including the monitoring and investigation of Atlantic salmon, which calls for international 2.1.5 International Lapland cooperation17. Finnish Environment Institute SYKE Although Lapland is the northernmost produces multi-disciplinary environmental region in the EU, and one of the most research covering the area of Lapland. peripheral ones, the international dimension Important information on Lapland has always been part of the everyday lives of is also produced by the Centre for its people. Lapland is the only Arctic region Economic Development, Transport and in Finland that is surrounded by three other the Environment and the Regional State Arctic countries. In fact, Lapland is Finland’s Administrative Agency as part of their most international region also known official tasks. worldwide. Its location as the neighbour of The regional laboratory of the Radiation Sweden, Norway and Russia has promoted and Nuclear Safety Authority STUK in internationalisation, which shows by nature Rovaniemi is responsible for research into in many daily contexts. northern food chains and radio ecology, Cross-border cooperation in the North and the radio activity analysis of food and Calotte and the Barents Region has long, environmental samples in the provinces of well-working traditions. The forms of Lapland and Oulu. cooperation are flexible enough to allow Lapland Meteorological Centre in quick reaction to changing conditions and Sodankylä is a versatile, highly sophisticated to find new operating models, as necessary. observation and research platform for Arctic cooperation plays a key role in view projects, which are conducted by its own of Lapland, considering that Arctic regions staff and visiting researchers. The centre are evidently gaining in global importance. produces a wealth of information on the In addition, Lapland acts as the gateway of effects of the layers of the atmosphere and the whole EU to Arctic regions.18 vegetation, soil and snow. The measurement Among other things, Arctic cooperation data are used to constantly develop new in Lapland is pursued by the Arctic Council, remote surveying and modelling methods the Arctic University, the Northern Research for monitoring and predicting environmental Forum, the Arctic collaboration scheme changes. of the Sami Education Institute, and the Sodankylä Geophysical Observatory Northern Forum. The centre of Lapland is is a national institute that operates under Rovaniemi, the largest and internationally the University of Oulu. The purpose of the most well-known city. It plays an the observatory is to carry out running important role as the international centre geophysical measurements for the needs for Arctic expertise and a place where of research and practice. It publishes people meet. It is also closely connected measurement-related materials and pursues with the globally known Christmas and continuous research and development work. Santa Claus brands and acts as the centre The measurements are part of Finland’s for preparing the EU’s Arctic Information obligations in global research. Centre. There are also other important research The funding programmes available institutes in Lapland, such as the University through Finland’s EU membership have of Helsinki’s Kilpisjärvi Biological Station and encouraged one to develop Lapland’s

17 METLA, MTT and RKTL will be merged as the Natural Resource Cen- 18 tre at the beginning of 2015. Lapland’s International Operation Strategy 2015/2030.

28 international dimension further. The EU’s business sector. The financing of education Interreg and Kolarctic ENPI programmes and RDI operations will also be more have strengthened international cooperation dependent on Brussels or the financial aid in education, research and different types available from other international sources of development activities. in the future. The international mobility of university cooperation has developed education and research in global competition. Founded Lapland is the most upon the initiative of the University of Lapland in 2001, the Arctic University international region in network has generated strong expertise capital. The network brings together more Finland than 130 actors from Arctic regions. The EU’s Arctic Information Centre has assigned the responsibility for running the centre to the Arctic Centre, which will strengthen Lapland’s international research expertise 2.1.6 Sustainable Lapland further. Companies in Lapland are often Lapland lives out its natural resources and characterised by a local international natural conditions, so the ability to maintain dimension. One of the most important balance in sustainable development is a key industries in Lapland’s regional economy is issue in view of its survival. It is challenging tourism, the growth of which largely relies to maintain preconditions for sustainable on foreign tourists. The globalisation of the development under Arctic conditions. tourism market and the increased use of Special challenges are posed by the broad the Internet have improved the visibility international interest shown towards of Lapland on even broader international natural resources (especially minerals and tourism markets. metals). The mining industry is establishing Globalisation and vast natural resources itself in Lapland, which has aroused a lot of have increased the interest of international debate on how to reach a balance between large-scale industry in Lapland and other economic interests, the environment, and Arctic regions. Mining investments have social and cultural factors. promoted the internationalisation of SMEs The mining industry will generate awaited in Lapland and also created a competence investments in the region, which in turn will base for becoming established on the global promote employment and development market. in cities and municipalities. On the other The backbone of Lapland’s economy is hand, one must make sure that mining the large-scale industry, which relies on the economics is capable of living side by side processing of wood and metal and mainly with other industries, such as tourism, focuses on the global market. In addition, reindeer husbandry and industries based on there are SMEs in Lapland that specialise renewable natural resources. The challenges in different fields and whose customers are posed by the need to combine different mainly global. sectors (such as land use) are constantly Although Lapland is an international evident in Lapland, too, and regional region, internationalisation must be development work is based on compromises developed further so that it will bring and taking account of the needs of different distinct economic added value to the stakeholders.

29 Lapland lives out of its equal benefits to all parts of the region. Lapland of sustainable mining industry natural resources and refers to policies that are consistent with the action plan ’Making Finland a Leader in natural conditions Sustainable Extractive Industry’, which was published in 2013. Ecological sustainability in Lapland refers In practice, sustainable development in particular to the sufficient protection of in Lapland means sustainable societal sensitive nature and the maintenance of development. The cornerstones of societal diversity and Arctic ecosystems. The idea development are economic, ecological, is to promote actions through which the social and cultural sustainability, whose environmental loading caused by the society mutual balance creates preconditions for and other branches of industry can be socially sustainable development and safe controlled. living. Efforts have been taken to ensure Social and cultural sustainability in balanced development in Lapland, with a Lapland creates preconditions for taking view to addressing the needs of the whole account of regional characteristics and region. special features, on which the balanced development of the region is based. Maintaining and utilising a strong The cornerstones of competence base in production and in service development will promote the social societal development are development of the region. Factors creating the basis for socially economic, ecological, sustainable development in Lapland are presented in the figure below. The basic social and cultural pillars of sustainable development consist of features and background elements sustainability characteristic of Lapland, combined with general global needs (e.g. safety, maintenance of expertise and business Economic sustainability in Lapland refers development). to the utilisation of Arctic natural resources and conditions. The aim is to generate long- term balanced growth, which will bring

30 19

Industry based on natural Integration between resources and conditions economic sectors

Economic sustainability

Industrial Social Development of service Lapland licensing economy

Sustaining the vitality Viable knowledge of the region and skills Sustainable Managing the environmental development Social stress capital

Fragile People’s nature Lapland Social Ecological and cultural sustainability Secure future sustainability

Sustaining the diversity of the nature Recognising the originality and - Ecosystems typical for the Lapland characteristics - Balanced utilisation and preservation - Lappish rural villages - Sami people –arctic experts - Lappish identity

Figure 7: Basic pillars of sustainable development in Lapland19

19 Based on the EU’s sustainable development strategy and nati onal sustainable social commitment. The fi gure is based on the presentati on of ‘Internati onal Insti tute of Sustainable Development’.

31 32 Photos: The Regional Council of Lapland, Timo Ari, Agnico Eagle / Kitti lä mine, Lapland The North of Finland 3. Vision And Strategy Of Lapland’s Arctic Specialisation

Lapland is already there where others want to be!

Arctic expertise is an everyday element mindset and target state and outlining the in all spheres of life in Lapland. The local objectives of Lapland as an Arctic Region. It people have adapted their activities to also sets out the priorities that Finland as the surrounding sensitive nature and an active player wishes to focus on in Arctic want to develop their capabilities as the operations and interaction in future. Lapland inhabitants of the most Arctic region in does not to want to be a mere onlooker in Finland to become leading experts in the development of the Arctic Region. sustainable development. For the local people, international cooperation, too, is a natural part of their everyday lives, as shown Lapland does not want to in Section 2.1.4. As a result, it is safe to say that Lapland is already there where others be a mere onlooker want to be! However, Lapland also wants to make sure that it will remain an active, competent Arctic expert in the future as A key element in the vision of Lapland’s well. Arctic Strategy is the sustainable utilisation of Arctic opportunities also commercially. Lapland and Rovaniemi, the centre of 3.1 Vision Lapland, share a long history and play an important role in the Arctic policy and the international cooperation process. Lapland’s Vision 2030: Lapland will enjoy a leading special Arctic position and expertise must position in the utilisation of Arctic natural be taken into consideration and utilised resources and Arctic conditions. As the nationally. Arctic regions and their natural most Arctic part of Finland, Lapland resources are attractive globally. will commercialise its Arctic expertise and make sustainable use of Arctic business opportunities. Lapland will be Lapland is active an active Arctic player and an important international centre of Arctic transport and knowledge. Lapland will act as a Lapland’s industrial vision for 2030: Lapland link between the Arctic Region and the grows by nature. European Union and offer its inhabitants an original, attractive place for living. • The cornerstone of industry in Lapland is the The vision of Lapland’s Arctic refining of natural resources based on the Specialisation Programme is a future- principles of sustainable development. oriented description reflecting a distinct • The industry and operating environment in

33 LAPLAND’S ARCTIC Vision SPECIALISATION PROGRAM Midterm objective

Current situation

2013 2020 2030

Figure 8: Lapland’s Arcti c Specialisati on Programme: Vision 2030 and intermediate target 2020.

Lapland have reached a level where Lapland Lapland grows by nature att racts new companies and employees by nature. • Lapland’s industrial actors are internati onally desired network partners. 3.2 Six cornerstones of Arcti c • Lapland’s industrial growth stems from development in Lapland innovati veness and Arcti c experti se.

Six cornerstones of Arcti c development have Ph oto been recognised in the preparati on of the s: A rc Arcti c Programme, on which Lapland’s Arcti c ti c Po w Specialisati on Programme can be built. e r, K Accessibility is absolutely essenti al for a l le the development of peripheral areas, such J u n as Lapland. It is fundamental to ensure tti

l a the cost-effi cient mobility of people, raw materials and products, and the availability of suffi cient transport connecti ons (including telecommunicati ons connecti ons) so that Lapland can also be developed from the Arcti c viewpoint. The sustainable refi ning of natural resources and natural conditi ons now and in the future is the cornerstone of Lapland’s Arcti c Programme. The role of Arcti c natural resources has become more important in Lapland in the last few years parti cularly

34 Targeted innovation policy strategies – focusing– exceptional ability

Spearheads of development and progress

Exploratory Innovation policy Potential new and unexpected spearheads

Common innovation policy Common knowledge – multidisciplinary – generic ability

Figure 9: Innovati on and development policy investi gati on model20

as a result considerable increase in mining It must also be ensured that diverse Arcti c operati ons. Lapland is a nati onally and research and educati on is pursued in internati onally important region in terms of Lapland in the future. The Arcti c experti se both non-renewable and renewable natural of research insti tutes and educati onal resources. insti tuti ons must be commercialised. In Increasing value added has become an additi on, experti se in ’Arcti c everyday life’ important cornerstone in the preparati on must be commercialised into products and of Lapland’s Arcti c Programme. This services. The public data resources opening aspect is oft en closely connected with the in the public sector, for instance, also off er availability and price of energy. Increasing new opportuniti es for commercialising value added should not only be understood Arcti c experti se. as the intenti on to increase raw material processing in Lapland but should also d lan be extended to all economic acti viti es. ap f L Lapland’s forest and farmland resources l o ci n u should be processed much further in the o C l processing chain within the boundaries of a n o i the region. Lapland’s natural products are g e R processed in the region more extensively :

o 20 t than earlier. o

h More extensive use must be made of P Lapland’s Arcti c experti se. At the concrete level, this means new products and services based on and uti lising the vast Arcti c experti se that has accumulated in Lapland.

20 Strengthening ground, growing spearheads and ferti lizing weeds, Sotarauta & Kosti ainen 2008.

35 Thematic spearheads of the regional economy

Mining and Tourism and metal industries Bioeconomy related industries

SME refining SME Services and Industries natural resources arising from the needs of Independent large industries or new industries

Stimulating and nurturing next generation’s industries

In Lapland we’re looking for the - strengthening and sustaining the basic industries functional spearheads supporting - Generating new industries Education, research and development better the development diversely integrated in the refining new products and services

Figure 10: Lapland’s Arcti c Specialisati on Model: spearheads, new emerging branches and supporti ve infrastructure

Sustainable Arcti c policies are and will select strategic prioriti es in Lapland’s Arcti c remain essenti al cornerstones in the Arcti c Programme. The model seeks to ensure success of Lapland. Lapland’s vulnerable, balanced development between three main slowly renewing Arcti c living environment enti ti es (seeFigure 9). The general innovati on places high environmental requirements, and development policy ensures long-term which must be addressed using the best operati ng preconditi ons for all actors. The technologies available and with an atti tude targeted innovati on and development policy that respects the environment. is focused on a specifi c sector or cluster. An Arcti c pride is the sixth cornerstone of experimental innovati on and development Lapland’s future success. A positi ve Arcti c policy provides a basis for growth for atti tude, faith in the future and pride about randomly generated innovati ons. It also the unique Arcti c living environment make seeks to look for new ideas by encouraging up a sustainable base for planning and people to experiment and take risks implementi ng the future Arcti c Lapland at (Sotarauta 2009). the level of citi zens. Lapland’s Arcti c development spearheads and the related close and supporti ve branches are presented in Figure 10. The 3.3 Strategic Arcti c prioriti es of leading principle is the sustainable uti lisati on of natural resources and conditi ons. Instead industries in Lapland of a simple division between branches, the aim is to fi nd cross-cutti ng Arcti c business The investi gati on model of Sotarauta and opportuniti es across sectoral boundaries. Kosti ainen (2008) is used to identi fy and

36 The leading principle is commercialisable fi eld of experti se is the socially, ecologically and economically the sustainable uti lisati on sustainable combinati on of diff erent business operati ons. Experti se in the of natural resources and multi ple use of Lapland’s Arcti c nature is an export product. Arcti c conditi ons One of the key goals is to develop the existi ng and future mines in Lapland into Arcti c examples of sustainable development. 3.3.1 Prioriti es of Arcti c business in The key issues are overall resource Lapland effi ciency, the minimisati on of residue, taking account of other branches, and social From the point of view of Lapland’s acceptability. It is also important to uti lise future, aspects to be highlighted are the deep-lying ore (ore resources not visible on sustainable uti lisati on of natural resources the surface) and to develop ore prospecti ng and conditi ons and increasing value added. methods suitable for use in sensiti ve natural The driving sectors related to Arcti c natural conditi ons. Geoenergy off ers research, resources in Lapland above all rely on the innovati on and business opportuniti es in uti lisati on of the extracti ve industry and the Arcti c environment. forests and on infrastructure based on a vital Mineral processing involves large-scale village network. On the other hand, Arcti c energy and capital intensive operati ons. It natural conditi ons create the foundati on for is in the interest of people living in Lapland developing the tourism business and testi ng to promote soluti ons that allow the further acti viti es. processing of minerals in the region. This A globally very interesti ng and calls for eff orts to enhance experti se,

ARCTIC NATURAL RESOURCES ARCTIC NATURAL CONDITIONS ARCTIC BUSINESS EXPERTISE

Customer/

User Needs Arctic products and services

Enabling SME industry Internationalisation technology

Arctic Proficient arctic Arctic education knowledge authorities and research resources

Arctic knowledge networks and partnerships SUSTAINABLE SOCIETY

Figure 11: Arcti c natural resources and natural conditi ons in relati on to the network of actors in Lapland Refi ning natural resources

37 38 Photos: Lapland The North of Finland, Mikko Jokinen accessibility and energy (energy price). Utilisation of natural conditions The utilisation of natural resources essentially involves mining and industrial Global tourism is being reshaped. Europe service companies. World-class mining is losing its market share, whereas Asia is and industrial actors create constant gaining in importance in terms of arrivals demand for specialised services, such as and departures. Lapland and other Arctic maintenance services, at the investment regions will be attractive destinations stage and over the long term. Resource for new and growing markets. Success efficiency, the minimisation of residue and in global competition requires attractive the development of new symbiosis products tourism centres that act as drivers of combined with expertise in Arctic conditions developing tourism. Competition also calls will offer specialised service suppliers new, for networking with small companies, whose unrecognised business opportunities. strengths usually are authentic, customised Industries based on bioeconomy21 will tourism services. continue to play an important role in the The competitiveness of Arctic tourism history of Lapland’s economy in the future, relies on the utilisation of natural too. Lapland’s forests offer opportunities conditions, the sustainable use of nature, for diverse business. New volume products, cooperation between actors, service quality, such as biofuels, are needed to supplement innovative product development, and the main forest utilisation line (wood, paper efficient communications and marketing, and board). New local energy solutions can for instance. It can be said that tourism be adopted, thanks to abundant energy companies are refining Lapland’s nature wood resources. Energy-efficient, low and Arctic conditions into experiences and carbon timber construction is also part of services. Lapland’s development. Growth in Arctic tourism could be The utilisation of natural resources and triggered through small investments if the the further processing of foodstuffs are sector is capable of developing year-around smaller scale operations in which hundreds tourism activities instead of only relying on of small companies and thousands of seasonal services. In addition to improving local people in Lapland are engaged. The accessibility, this is one of the most natural resource sector and farm products, important goals in tourism development. reindeer, wild game, fish, berries, herbs and At the same time new products and mushrooms are part of the Arctic business, services must be identified and processed. offering vast development potential. Digitalness and global information networks Large-scale Arctic projects offer overseas allow Arctic experiences in Lapland to be mining and industrial service companies communicated, marketed and sold in a cost- broad opportunities, though they also efficient manner. Utilising the preconditions involve challenges. As a rule, the companies for intelligent transport, and tourism and in Lapland are too small to operate alone in service chains, for example, will improve the offshore projects of Northern Norway. digital accessibility and the adoption of However, infrastructure investments in applications. the mainland also offer opportunities to Snow and ice in different forms are smaller actors. Companies need solutions an essential part of Arctic experiences. that promote cooperation in order to take Therefore, investments should be made in advantage of the Arctic investment boom. snow and ice construction. In addition, new- generation products are needed that can be implemented as experiences in an energy-

21 efficient manner throughout the year. Bioeconomy refers to economy that uses biological natural resources to produce food, products, energy and services. http://www.biotalous. Expertise in Arctic conditions has also fi/biotalouden-askelmerkit/biotalous-lyhyesti/.

39 emerged in Lapland in the preparation of Education and RDI operations play forecasts for lakes and rivers and in related an important role in view of regional construction. Forecasting floods, for instance, development. Based on the principles of could offer major international business smart specialisation, the planning work opportunities, because other countries, too, focused on finding the interfaces through have to struggle with melting snow and ice which the best possible outcome can be causing floods that are difficult to predict. achieved through cooperation between Arctic vehicle testing is an excellent business, education and RDI actors. example of refining natural conditions into The thematic spearheads selected in high-quality business. Most of the testing the Arctic Specialisation Programme for operations in Finland are already carried out economic development will be used as in Lapland and offer international growth the drivers of regional growth during the opportunities. Basically, there are three programming period. The recommendations development directions: 1) proceeding in and concrete proposals for action presented the value chain and offering even broader are based on economic needs. The testing services, 2) developing testing precondition for economic growth is the environments and seeking to offer year- availability of skilled labour, cooperation in around services and 3) offering broader, the development of new innovations and more high-quality supplementary services the sufficient availability of information to (e.g. accommodation, restaurants and support decision-making. To implement experiences). New business opportunities these preconditions, the role and importance are also available through extending testing of different actors must be considered with services to new customer groups. regard to different measures. Education and RDI activities play a crucial role in the actual implementation of the programme in order 3.4 Education and RDI22 to fill the expertise and knowledge gap. The achievement of the goals of the programme as part of Lapland’s Arctic is based on close, fluent cooperation specialisation between the business sector and education and research organisations in Lapland. Lapland’s Arctic Specialisation Programme Most of the research in Lapland takes is Lapland’s response to the demand of the place in universities and the units of research European Commission for smart regional and institutes. The role of education and RDI national specialisation strategies. The point activities varies according to proposal, of departure was to determine the economic though it can be envisaged at the same strengths and development spearheads of time that the work will not succeed without Lapland for the programming period 2014- strong inputs from these two parties. 2020. The programme should act as an Regional education and RDI development instrument helping one to find regional needs were also recognised during the solution models and answers to challenges preparatory work, and solutions were related to stable development. The guideline sought to them. In addition, needs must be is to follow a user-oriented innovation policy identified and a knowledge and expertise in which research and education are based base outlined for supra-regional, national on the needs of the region’s industries. and international networking. In addition, broad cooperation ensures the best possible regional and economic effectiveness.

22 Research, development and innovation activities

40 4 Implementation Of Lapland’s Arctic Specialisation Programme

4.1 Implementation of selected 4.1.1 Refining Arctic natural priorities in 2014-2020 resources

The following chapters discuss Objectives: implementation of Lapland’s Arctic • To refine Lapland’s renewable and non- Specialisation Programme in 2014-2020. renewable Arctic resources in Lapland, The focus is on three chosen priorities: ensuring as high value added as possible. refining Arctic natural resources, utilising • To ensure that industry and mines refining Arctic natural conditions and pursuing cross- natural resources follow the principles cutting development enabling Arctic growth. of socially and ecologically sustainable The refining of Arctic natural resources development as ecoefficiently as possible. includes the spearheads of sustainable • To develop and internationalise Lapland’s Arctic mining, Arctic bioeconomy, large-scale ecoefficient solution suppliers who offer Arctic projects, and the small and medium- industrial and mining services and master sized industry. Arctic conditions. To multiply the business of The utilisation of Arctic natural Lapland’s service companies in large-scale conditions includes sustainable tourism, Arctic projects. low-carbon Arctic construction, Arctic • To ensure that the refining of natural innovation research and testing resources will also offer opportunities environments, and the spearheads of the for smaller scale business - a separate tools utilised in Arctic conditions. programme for SMEs for the refining of Cross-cutting development for Arctic Arctic natural resources. growth includes the following spearheads: the accessibility programme, new business from Arctic innovations, cross-cutting Arctic research and education, digital Spearheads and proposals for Arctic solutions and securing international action: financing. The spearheads of each priority and New sustainable Arctic industry and mines their proposed actions are presented in the • Ecoefficient, low-carbon industry and mining summary below. Single proposals for action • Reforming industrial and mining service are discussed after the summary in Sections companies 4.1.1. - 4.1.3. • Future mining research programme • Arctic natural resource knowledge and innovation community

41 Arctic bioeconomy Spearheads and proposals for • From bioeconomy into business action: • Increasing cooperation between bioenergy actors in Lapland • Bioterminals Sustainable Arctic tourism • Utilisation of ash • An Arctic tourism product and service development package • Future tourism; an education and research A large-scale Arctic project programme programme • Concrete exports to large-scale projects in • New-generation snow and ice construction Northern Sweden, Northern Norway and products Northwest Russia. • Developing Arctic recreational environments • Further processing investigations related to large-scale Arctic projects. • New business opportunities of Arctic logistics Arctic innovation research and testing environments • An expert group of Arctic testing business, An Arctic natural resource refining education and research programme for SMEs • Living Lab networks for Arctic testing • Investigations into refining from the point • Promoting the use of non-emission vehicles of view of SMEs • Intelligent low-carbon Arctic construction • Commercialising new innovations in the natural resource sector • Developing refining in SMEs Tools for utilising Arctic conditions • Shaping expertise in Arctic conditions into new products and services 4.1.2 Utilising Arctic natural • Material databank on Arctic conditions conditions • Quality manual for Arctic conditions

4.1.3 Cross-cutting development Objectives: for Arctic growth • To make Lapland a forerunner in the development of diverse tourism activities in northern regions. To create new internationally attractive tourism products Objectives: and services based on natural conditions • To ensure that growth-inducing, cross-cutting and natural phenomena. actions support fields of specialisation • To pay special attention to safety in Arctic related to the refining of natural resources tourism and to socially and ecologically and the utilisation of natural conditions. sustainable activities. • A critical aspect with regard to the • To develop multi-sector research and testing development of the whole Lapland is good environments and related business based on accessibility. Lapland must be developed into Lapland’s Arctic conditions. the hub of Arctic transport, which will open • To set up tools for expertise in natural up new business opportunities. conditions for the business sector and • Digital solutions are part of accessibility, developers in Lapland. service solutions for sparsely populated • To make Lapland an expert in Arctic areas and new business opportunities (e.g. conditions, whose know-how is sold globally. data centres).

42 • Lapland’s innovation system must be Arctic digital solutions enhanced considerably. New ideas, • Utilising Arctic public data resources innovators and entrepreneurs are scarce • Arctic cloud service resources. • Remote multi-sector health and well-being • To assign resources to multisector Arctic innovations education and research, which are the • eLappi Campus – a need-based expertise foundation of business and the society and development environment the enabler of growth. Arctic education, • Digital services into a competitive element research and development services will be rendered internationally attractive. • Increasing international EU funding will Cross-cutting Arctic education and research expand research and development activities. and development activities This will also result in new networks and • A cluster of top-flight expertise in Arctic and opportunities in view of the economy. northern research • An Arctic education, research and development commercialisation programme Spearheads and proposals for • The UArctic network and business contacts action: • Arcticness as part of education • Development and commercialisation of Arctic safety expertise (tourism, industry Accessibility programme and natural resources) • Opening northern airports • Promoting the acquisition of international • Connections between Lapland and the Arctic EU funding for Arctic growth Ocean • Strengthening the operation of the Arctic • Construction of road and railway information centre infrastructure under Arctic conditions

New business from Arctic innovations • Arctic Innovations Oy • Specialised Arctic business services • Recognising Arctic innovations • Cluster of expertise for Arctic design • Arctic capital investment solutions • TEAM Arctic • Arctic brand work • From Arctic indigenous industries to an innovation • Sodankylä innovation centre

43 4.2 Detailed presentation of proposals for action

4.1.1 Refining Arctic natural resources

Spearhead: New sustainable arctic industry and mining

The aim is to refine Lapland’s Arctic natural resources in a socially and ecologically sustainable manner, seeking to generate as high value added as possible in the region. Industrial and mining service companies will be reformed and internationalised. A specific refining programme will be prepared for SMEs.

Proposal for action 1: Ecoefficient, low-carbon industry and mining

The aim is to implement the BAT principle (Best Available Technology) in processes and policies throughout the delivery chain, based on the lifecycle approach. A multiphase entity in which the existing industrial and mining companies are developed. In addition, networks will be created through innovation platforms operating in real- life environments and allowing analysis, testing and piloting.

Proposal for action 2: Reforming industrial and mining service companies

The idea is to develop new business concepts for Lapland’s industrial and mining service companies capable of dealing with Arctic conditions. In addition, the creation of new products and services and their inclusion as brands in Lapland’s image will be promoted. Another aim is to set up a network of ecoefficient, low-carbon industrial and mining service companies.

Proposal for action 3: Future mining research programme

The programme is based on the idea that mines have several lifecycles (before, during and after mining operations). Their impacts will be investigated within the framework of the region’s economic, environmental, social, legal, technological and cultural contexts and ramifications. Another topic of interest is the formulation of new alternative processes in a closely networked national and international operational environment. The technological and scientific field of research in the programme is the development of ore prospecting methods suitable for use under sensitive Arctic conditions, and opportunities to utilise deep-lying ore resources.

Proposal for action 4: Arctic natural resource knowledge and innovation community

The aim is to promote the profilation of natural resource research in Lapland in a national and international operational environment. This will be enhanced by developing a cluster for regional research into natural resources. In addition, a broader Lapland expertise and innovation community will be established, which will focus on nature resource education and RDI activities. The aim is to turn Lapland’s actors into internationally recognised RDI actors in their fields of expertise, based on the sustainable use and refining of natural resources. 44 Spearhead: Arctic bioeconomy

Lapland has traditionally had versatile business that is based on bioeconomy. The role of bioeconomy will become even more prominent in the future, and Lapland is well positioned to become a model region for Arctic bioeconomy. The aim is to identify and boost strong, rising bioeconomy fields that promote and combine business diversely based on renewable natural resources.

Proposal for action 1: Bioeconomy into business

Identifying emerging bioeconomy-based branches in Lapland and making important strategic choices for the region. Ensuring that Lapland is linked with the implementation of the national bioeconomy strategy and action programme and that its viewpoints are taken into consideration in these. Support measures are related to promoting business that is solely based on bioeconomy and to improving expertise and enhancing product development.

Proposal for action 2: Increasing cooperation between bioenergy actors in Lapland

The aim is to introduce a cooperation model between forest and energy sector entrepreneurs, forest owners and other actors in order to improve the supply, refining and end use of roundwood and wood energy. This calls for the building of new forms of cooperation and networks.

Proposal for action 3: Bioterminals

The aim is to promote the building of a suitable bioterminal network for Lapland in order to support the versatile use of wood and the comprehensive utilisation of raw material (currently too expensive). Complete operation models (harvesting and logistics chains) and research-based information for use in project work, for instance, are not available for setting up small bioterminals in the conditions prevailing in Lapland. Bioterminals could be used to collect, process and store wood and other materials.

Proposal for action 4: Utilisation of ash

One of the aims is to create a practice for utilising ash from power plants in Lapland. Very little use is currently made of ash as a residue product. The themes to be investigated in Lapland are the amount and quality of ’waste’ ash, the types of existing processing operations, costs between different utilisation opportunities, income opportunities, legislative guidelines and transforming the use of ash into business.

45 Spearhead: Large-scale Arctic projects programme

Several broad investment projects are currently in progress in the Barents Euroarctic Region, which also offers vast business opportunities to Lapland. The support needed by Lapland’s companies will be promoted in order to help them participate in major Arctic investments. Special marketing efforts will be focused on large-scale projects in Northern Sweden, Northern Norway and Northwest Russia, which are related to the utilisation of natural resources, development of infrastructure and other construction.

Proposal for action 1: Concrete exports to large-scale projects in Northern Sweden, Northern Norway and Northwest Russia.

The aim is to help Lapland’s companies access large-scale Arctic projects, in which market information, the right types of cooperation networks, export-promoting financing, strong physical presence and visibility, and experienced experts in the Arctic markets are needed. Special attention will be paid to supporting their export efforts through financing and expert work. Offshore business will be investigated as a separate sub-field and cooperation opportunities with international offshore actors outlined.

Proposal for action 2: Further processing investigations related to large scale Arctic projects

The aim is to produce a comprehensive analysis and assessment of Lapland’s opportunities to significantly increase further processing in the region. The Arctic environment places special boundary conditions on investigations, which must be updated sufficiently often.

Proposal for action 3: New business opportunities of Arctic logistics

The aim is to outline the opportunities offered by Arctic development to new logistic business. Investigations will be drawn up of the new opportunities available in the growing refining of natural resources, large-scale projects pursued in the neighbouring countries, possible railway routes to the Arctic Ocean, and the opening of the Northern sea road.

46 Spearhead: Arctic natural resource refining development programme for SMEs

The precondition for economic development in Lapland is a stable, diverse SME sector that promotes stable development in the region. Special measures are needed in order to encourage SMEs to expand their business in the refining of natural resources. The rich renewable natural resources in the north offer vast potential to innovative product and service production based on their use. There is also demand for such products and services on the global market.

Proposal for action 1: Investigations into refining from the point of view of SMEs

The aim is to provide an exhaustive account of opportunities and needs for further processing from the point of view of SMEs. The focus in the work will be on small and medium-sized solutions instead of large-scale projects. Opportunities can be explored with regard to the use of industrial residue, for example. The Arctic environment places special boundary conditions on the investigation.

Proposal for action 2: Commercialising new innovations in the natural resource sector

The abundance and purity of renewable natural resources in the Arctic Region and their concentrations of active substances offer vast potential to innovative product and service production based on their use. There is also demand for such products and services on the global market. The production is based on ecosystem services and also involves natural and cultivated herbs, berries, primary and secondary products from trees, and products made of reindeer and sheep, which are used to prepare food, drink, ailment, medication and refreshment products and services.

Proposal for action 3: Developing refining in SMEs

Investigations into the further processing opportunities available to SMEs and the commercialisation of new innovations also require further actions that will ensure the launch of further processing activities. The challenge in development efforts is to develop sustainable production technology and logistics that meet the needs of SMEs and to strengthen business expertise, especially the commercialisation of products and services. In addition, product development support measures and the development of expertise will be taken into consideration.

47 4.1.2 Utilising Arctic natural conditions

Spearhead: Sustainable Arctic tourism

Sustainable Arctic tourism is looking for new sustainable growth guidelines especi- ally from the point of view of Arcticness. A lot has already been done in Lapland to develop tourism, and the opening up of new Arctic opportunities, such as transport routes, will offer new opportunities to tourism, too. Tourism safety and environmental factors play an important role in the programme.

Proposal for action 1: An Arctic tourism product and service development package

Account will be taken of customers, stakeholders, employees, responsibility, proac- tive product development, sustainable products and services, customers’ changing habits and the operating environment used in providing services. In addition, use will be made of social, cultural, sense-based aspects and elements related to nature and the built-up environment.

Proposal for action 2: Future tourism; an education and research programme

The aim is to strengthen expertise and knowledge under the following themes: Accessible and safe Arctic tourism (taking account of changes in tourist profiles), A learning tourism region (taking account of developing tourism region action and cooperation models) and Foresight (promoting the introduction of a proacti- ve policy to serve development and decision-making in the production of future tourism services).

Proposal for action 3: Next-generation snow and ice construction products

The aim is to develop next-generation snow and ice construction solutions and new experience-based structures and to investigate how they can be implemented and maintained in a resource-efficient manner. Another sub-area is to develop resource-efficient solutions of different scale in order to implement year-around snow and ice structures.

Proposal for action 4: Developing Arctic recreational environments

The aim is to market and establish a brand for cutting-edge Arctic expertise, edu- cation, research, development and innovation activities, companies, the public sector and the whole recreational environment. The opportunities of Arctic design lie in the combination of international expertise, research and business. Arctic de- sign is not confined to any particular branch but there is a built-in demand for it in different business models. Companies can find new business potential through the Arctic Sustainable Art & Design theme network.

48 23

Spearhead: Arctic innovation research and testing environments

Arctic innovation research and testing environments act as a venue for determining the necessary research centre infrastructure, purchase of testing infrastructure, reduction of product and service lifecycle costs, basic investments, and testing in Arctic conditions in Open Innovation development environments.

Proposal for action 1: An expert group of arctic testing business, education and research (consortium)

A unit of experts will be set up, at first for a fixed period, who will launch RDI projects related to expertise and business connected with Arctic conditions. The purpose of the group is to build national and international networks, Arctic expert consortia, and RDI and testing environments. A consortium will be established, after which new members will be added and changes made to the group as needed. Examp- les of the implementation of the consortium are targeted innovation centres, and research, education and product development centres for Arctic vehicle testing.

Proposal for action 2: Living Lab23 networks for Arctic testing

The aim is to create an Arctic testing operations network in order to support the expertise and knowledge available in Lapland. The idea is to promote the evolve- ment of Living Lab testing environments in different parts of Lapland, which has the best and most natural conditions for arranging Arctic testing. Lapland offers testing opportunities to national and international customers, who in addition to laboratory testing need real-life Arctic conditions for a sufficiently long annual testing period.

Proposal for action 3: Promoting the use of non-emission vehicles

The aim is to focus on developing non-emission technologies in Arctic conditions. The work will set out from piloting the selected target, after which attention will be paid to infrastructure development, charging systems, service supply, safety and the application of rules. Good examples of this are electric snowmobiles and fuel cell technology.

Proposal for action 4: Intelligent low-carbon Arctic construction

The aim is to develop ecoefficient low-carbon timber construction, new wood element solutions, research, development and innovation activities, and com- mercialisation. New business environments in industrial timber construction call for specialised overall management skills from companies, consumers and mu- nicipalities. Attention will also be paid to timber construction as part of tourism construction projects.

23 The Living Lab concept was first introduced in the United States where it referred to a housing research laboratory. The Living Lab concept has been elaborated in Finland and extended for use as a product and service development action model. The action model is currently being commer- cialised into an international export product. http://publications.theseus.fi/handle/10024/6772 49 Spearhead : Tools for utilising Arctic conditions

The following tools are proposed to support commercialisation in order to make use of Arctic conditions in Lapland’s companies and development organisations.

Proposal for action 1: Shaping expertise in Arctic conditions into new products and services

Lapland’s companies have built-in Arctic expertise, which has often not been com- mercialised separately. Tourism companies are an exception, however, as the whole sector mainly relies on the attraction of Lapland’s Arctic conditions. The expertise that companies have in Arctic conditions must be recognised, commercialised, conceptualised and shaped into Arctic products and services.

Proposal for action 2: Material databank on Arctic conditions

Knowledge of materials suitable for use in Arctic conditions must be increased, and feedback and user experiences collected for material developers. The material databank would also include information on the types of materials that can be used, the changes taking place in material properties in cold, the interpretation of standards, and real-life experiences.

Proposal for action 3: Quality manual for Arctic conditions

The idea is to introduce a consistent action model that can be linked with the quality systems of Arctic mining and industrial service suppliers, and process, energy and mining industry production plants. The manual for mining and industrial service suppliers will cover topics such as competitive advantage, the availability of custo- mer processes, energy efficiency and the marketing benefits offered by expertise in Arctic conditions. Important themes in the action model for industrial, mining and energy actors are the verification of the service supplier’s expertise in Arctic conditions, procurement guidelines and auditing.

50 4.1.3 Cross-cutting development for Arctic growth

Spearhead: Accessibility programme

Accessibility is one of the most important criteria for Lapland’s success. It is funda- mental to ensure the cost-efficient mobility of people, raw materials and products and the availability of sufficient transport connections (including telecommunications connections) in order to develop Lapland. Aspiring towards large visionary solutions should not overrule the development of the existing infrastructure (e.g. revamping the ports of the Bothnian Bay).

Proposal for action 1: Opening northern airports!

This is connected with accessibility, which is one of the cornerstones of Lapland’s Arctic Programme. What are the preconditions and boundary conditions on which as many airports in Lapland can be kept open in the coming years? What is re- quired from different actors? What models can be found abroad? What concrete measures can the actors take in order to promote the operational preconditions of airports in Lapland?

Proposal for action 2: Connections between Lapland and the Arctic Ocean

Lapland needs working connections to the Arctic Ocean. There are several alter- native routes for the Arctic railway line. A sufficiently exhaustive description must be provided of the new business opportunities and indirect effects of the railway and other transport routes.

Proposal for action 3: Construction of road and railway infrastructure in Arctic conditions

Public sector cuts have impaired the construction and repair of the road network in Lapland. The aim is to support actions to reduce road lifecycle costs (e.g. the minimisation of frost damage). Promoting the lifecycle approach is also important in order to reduce costs.

51 2425 Spearhead: New business from Arctic innovations

The basic idea in the economic development of Lapland is to support and promote the commercialisation of the innovation capacity of regional actors. Regional special features also require new approaches and shifting the focus from growth centres to other parts of the region. In addition, there are unexploited Arctic ideas in Lapland’s companies and research and education organisations, which can be commercialised but only with special support.

Proposal for action 1: Arctic Innovations Oy

Arctic Innovations Oy is responsible for the implementation of a decentralised inno- vation model in Lapland and is actively engaged in strong national and international networks. The company receives its basic funding from cities and municipalities based on the customer-producer model. Its operation is not confined to any particular sector.

Proposal for action 2: Specialised Arctic business services

The aim is to draw up a consistent development programme for innovative start- up and growing companies. It must be investigated how the latest information can be transferred from the university network to companies. It is also important to promote entrepreneurship among young people and find out how companies’ needs and RDI activities can be combined more efficiently. The aim is to support the piloting of innovative start-up and growth companies. Specialised business services should be established.

Proposal for action 3: Recognising Arctic innovations

The programme for recognising and utilising Arctic innovations has been planned in order to highlight new business ideas and drafts, which are the unexploited parts of business and research ideas, for example24. The development of new products, services and markets is boosted by working environments (innovation platforms) that are coordinated by Lapland’s universities and vocational education establish- ments together with the business sector. In addition, standardised action models and processes will be generated for transforming ideas into competitive business.

Proposal for action 4: Cluster of expertise in Arctic design

The aim is to create a cluster of expertise in Arctic design in Lapland25, consisting of two development phases. Phase one will see the establishment of a centre for top Arctic design expertise that will introduce design in companies operating in Arctic fields, promote the establishment of new companies and create contacts with Arctic research. Phase two will involve measures to support the foundation of a business incubator, in which national and international parties will provide coaching assistance to companies.

24 Measures have been taken in different parts of the world to utilise unexploited draft innovations through development projects and programmes. A good example is the Innovation Mill programme, which is based on Nokia’s inventions and seeks to generate new business from Nokia’s unex- ploited ideas.

25 In the Design Finland programme, Lapland is ranked among the three clusters of design expertise in Finland, with Arctic design as its field of expertise. 52 In addition, support will be provided to Arctic design research and development activities based on business needs and to companies’ commercialisation efforts. The Arctic Design week action model will be established as a cooperation venue between the region’s companies and educational institutions.

Proposal for action 5: Arctic capital investment solutions

The aim is to create an action model for making more efficient use of the existing capital investment solutions, taking account of public and private investments. The government has supported private actors and the capital investments that it has made in innovative growth companies. Business angels will be encouraged through tax reliefs. New funding to start-up companies will be channelled through Tekes, and a growth fund established through Finnish Industry Investment. In addition to state measures, the needs and opportunities of Arctic capital investment activities will be outlined.

Proposal for action 6: TEAM Arctic

Team Arctic is a special application in the Team Finland scheme, the purpose of which is to promote exports. The special features of Arctic business and focus on the Arctic operational environment stress the need for specialised expertise. Team Arctic operates in close cooperation with Team Finland.

Proposal for action 7: Arctic brand work

There are vast opportunities in communications related to Lapland’s Arctic exper- tise, but also challenges. Especially the tourism sector in Lapland has succeeded superbly in increasing its international visibility (e.g. CNN), whereas Lapland’s Arctic expertise has not been highlighted sufficiently. More Arctic emphasis must be given to brand work in Lapland. Lapland is known as a unique holiday destination, but its opportunities to business and sustainable industry are not known.

Proposal for action 8: From Arctic indigenous industries to an innovation

The aim is to create an action model and concept (innovation centre) in order to support the commercialisation of the industries of indigenous peoples. Their traditional knowhow, combined with the use of modern technology, will open up new opportunities and innovations for technical solutions in housing, transport and adapting to weather conditions, for instance. The action model is closely integrated with education and RDI activities in the Sami area.

Proposal for action 9: Sodankylä innovation centre

The aim of the centre is to enhance the commercialisation of research expertise in Lapland and the creation of new innovations. It will also strengthen cooperation between research and business actors in the region and support the participation of regional actors in joint national and international projects. The building of the centre for innovation and its environment in Sodankylä will promote the balan- ced development of the region. An action model will be set up in the centre for commercialising innovations (start-up companies and large and medium-sized companies), together with expert services and a contact network. 53 Spearhead: Arctic digital solutions

The latest information technology and digitalisation will open up vast new opportu- nities for utilising Arctic expertise. Lapland will invest in the development of digital society services and contents through bold, pioneering solutions. It will also support the development of knowhow and digital solutions in SMEs.

Proposal for action 1: Utilisation of Arctic public data resources

There has been debate on the use of Arctic data resources on several forums after the Finnish Government decided to promptly open public data resources for use by citizens and companies. The data resources offer opportunities to exploit natural resources and climate conditions. Lapland’s actors should quickly make sure that most of the Arctic expertise connected with the opening of public data resources will accumulate in Lapland.

Proposal for action 2: Arctic cloud service

The Finnish government has plans to introduce new major solutions with regard to the national data network and its international routing. According to the plans, there will be new trunk routes via the Baltic Sea to Central Europe and via the Northeast Passage to Asia. These international routings would substantially impro- ve the possibilities of Internet cloud service companies to establish themselves in Finland. There are plans to introduce an Arctic cloud service programme in order to help companies in the field to become established in Lapland.

Proposal for action 3: Multi-sector remote health and well-being innovations

Technological applications will be adopted with the aim of developing services based on customers’ needs. In addition, patients and customers will be given the opportunity to run errands digitally with the help of secure systems. Remote techno- logical innovations will be used to support the participation, learning and activeness of citizens and help them take responsibility for their health. Information will be collected on the existing remote technology solutions and their deployment will be promoted. Interactive technology environments will be adopted in monitoring health and well-being, for example.

Proposal for action 4: eLappi Campus – a need-based expertise development environment

The aim is to create action models in which physical, social and virtual learning and RDI environments are merged. This requires the development of eLearning methods, tools, policies, contents and support services. Lapland’s strong eLearning expertise will be developed further in an agile, flexible manner in order to address the needs of the business sector.

Proposal for action 5: Digital services into a competitive element

The theme will link the Arctic Specialisation Programme with Lapland’s digital strategy by strengthening the implementation of company-based solutions. The aim is to support the development of expertise in companies in the use of digital solutions (e.g. Arctic eBusiness and marketing). 54 Spearhead: Cross-cutting Arctic education and research and development activities

An important sub-area in the implementation of Lapland’s Arctic Specialisation Programme is to strengthen diverse regional educational and RDI activities that must be capable of addressing the needs of regional actors.

Proposal for action 1: A cluster of top-flight expertise in Arctic and northern research

The aim is to ensure that multi-disciplinary basic and applied research into Arctic and northern themes can be pursued in Lapland. In addition, a cooperation forum for Lapland’s Arctic researchers will be established. The purpose of the Arctic research network is to draw up the Arctic and Northern Research Programme 2014-2020, the aim of which is 1) to produce information on Lapland’s Arctic and northern character in a number of fields for use by the academic scientific community and in the everyday operational environment, 2) to deepen and expand expertise in issues related to the Arctic Region, 3) to promote scientific, social and economic effectiveness with regard to Arctic issues and 4) to create new interdisciplinary and international cooperation networks across scientific and artistic fields. The themes of the research programme include Arctic culture, well-being, tourism and design, northern environment, Arctic rights, and learning and Arctic information.

Proposal for action 2: An Arctic education, research and development commercialisation programme

Lapland’s universities, sector research institutes and secondary educational institutions (education, research, development and innovation services) will be developed into need- based, commercialisable service entities together with the region’s companies. Services will be piloted in Lapland and developed further into export products suitable for Arctic regions in particular. Student groups will participate actively in the development work.

Proposal for action 3: UArctic network and business connections

The aim is to develop a cooperation model between the uArctic network and business actors, in which the Arctic expertise of the education and research network will also serve the needs of the business sector in Lapland. At first the existing Arctic sources of business information and the need for cooperation networks will be investigated, and attention will also be paid to the boundary conditions of the uArctic network and opportunities to promote the establishment of the Arctic commercial network.

Proposal for action 4: Arcticness as part of education

Educational cooperation in Arctic regions must be based on developing the sustainable consumption of natural resources and supporting the industries, language and cultures of communities and local people in Arctic regions. The educational organisations in Lapland will together develop practice-oriented educational programmes that address the needs of the local nature and people. The content and models of education will also be developed so that they will support the setting up of top-flight Arctic expertise clusters in Lapland. Diverse multi- sector education will be developed in the same thematic fields in order to secure the establishment of leading Arctic expertise clusters in Lapland that support both education and research (design and Arctic research). 55 Proposal for action 5: Development and commercialisation of Arctic safety expertise

Finland and Lapland have broadly profiled themselves as safety experts. This expertise is also identified and recognised in Finland’s national Arctic strategy. Safety has been highlighted as a cross-cutting theme in Lapland’s Smart Specialisation Programme (tourism, industry and natural resources). Important Arctic safety sub-areas include the development of industrial risk management expertise and the multisector development of safety expertise.

Proposal for action 6: Strengthening the acquisition of international EU financing for Arctic growth

The development of Arctic products and services often requires extensive financing and an expertise network. To increase international financing, use must be made of the opportunities offered by EU programmes and the international network, for example. Support will be allocated to selected Arctic specialisation flagship initiatives in order to strengthen the creation of synergy between different funding channels and to support international networking. The initiatives may include projects to establish top-flight expertise clusters and allow the networking of the clusters nationally and internationally.

Proposal for action 7: Strengthening the operation of the Arctic information centre

The role of Lapland as the producer and conveyer of Arctic information will be strengthened. This will be done among other things by enhancing the role of the Arctic Centre in the conveyance of information. An important sub-area will be the development of regional effectiveness and added value. When implemented, the EU’s Arctic Information Centre will underline the role of the region and its participation in innovative ways.

56 4.2 Roadmap 2014–2020 level. The synergy between the various fi nancing programmes is shown in the fi gure It is in line with the smart specialisati on below (Figure 12). principle to create broader development As shown in the fi gure, the concepts, in which implementati on is based implementati on of the proposals for acti on on the use of diff erent fi nancial instruments in the Arcti c Specialisati on Programme and programmes and the fi nancial synergies also requires fi nancing from outside that they off er26. One wants to maximise regional development programmes. The the eff ecti veness of EU fi nancing in order matrix below describes the strategies to ensure the best possible outcome from and programmes that infl uence the Arcti c development and innovati on acti viti es. Specialisati on Programme, and the fi nancing The idea is to promote internati onalisati on channels enabling its implementati on. by linking regional RDI acti viti es with broader Aft er the fi nancing matrix the programme global operati onal environments. The role provides a preliminary account of the of structural and investment funds (ERI) is planned ti meframe of the spearheads and to develop regional structures, capacity and proposals for acti on in each priority with capabiliti es. Correspondingly, programmes regard to the durati on of the programming providing fi nancial support to RDI acti viti es period (Figures 14-16). In additi on, the and educati onal cooperati on2728throughout fi nancial framework will be specifi ed so that the EU are means of presenti ng regional indicati ve ERI fi nancing for the spearheads development work in the internati onal and proposals for acti on can be defi ned, context. It is hoped that projects are set up together with recommendati ons for fi nding that receive part of their fi nancing from ERI synergies with other forms of fi nancing. programmes and part from the internati onal

Upstream (monitoring) Downstream (applying)

Horizon 2020 ESI Utilising enabling Cosme technology Demonstrations and pilots Service Transregional/national National funds collaboration development

Erasmus+ Creative Europe

Staircase to excellent National and regional RDI environments Excellent RID Regional innovations

Structure and capacity Research and development Innovations Market development Regional Policy

Figure 12: Synergy between the EU’s fi nancing programmes and desired impact28

26 Synergies between European Structural and Investment Funds, Horizon 2020 and other EU programmes related to innovati on, Guide for policy-designers and implementers, draft August 2013. 27 Horizon 2020, Cosme, Erasmus+. 28 Source Katja Reppel, Head of Directorate General for Regional Development.

57 Level of operations Strategic programs Operational programs Funding

EU Innovation union European regional Interreg programs Sustainable resource collaboration H2020 and Cosme management; raw materials, Support for research and Programme for Social bioeconomy innovations Change and Innovation EU Strategy for the Baltic Sea Education development Creative Europe and Region Partnership instruments Erasmus+ EU Digital strategy other EU funding Cohesion policy instruments and programs

National National competitiveness ESI programs Investment funds, and employment program Knowledge and innovations ESI funds National partnership programs TEKES agreements for ESI TEKES programs Academy of Finland and National smart specialisation Academy of Finland research special programs strategy programs SITRA National bioeconomy Finland’s minerals strategy, Funding from ministries strategy action plan - EU funding instrument Finland’s national Arctic strategy

Regional Regional operation East and North Finland ESI funds, programme operation programme Regional development Cross-border collaboration Regional operation resources Lappi agreement programme Economy/Business Regional strategies for Regional growth programme Business example tourism, industry Artic Specialisation Funding from ministries development programme EU funding instruments Strategy for culture and creative industries Climate and energy strategy

Municipalities/ Local development programs Growth programs of the Like above cities Municipalities’ and towns municipalities and cities Development ‘strategies Local business development agencies/ Strategies and development programs Education & programs of the actors research

Figure 13: Financing matrix

58 Refining Arctic natural resources

2014 2015 2016 2017 2018 2019 2020

Ecoefficient, low-carbon industry and mining Arctic BAR solutions Innovation platforms and piloting II Innovation platforms I Reforming industrial and mining service companies New businesses Network development Product and service branding Sustaining development

Future mining research programme New sustainable Arctic natural resources knowledge and innovation community

Arctic industry and mines and industry Arctic Research cluster of natural resources Creation of knowledge and innovation community

From bioeconomy into business New business possibilities Business development platforms II Business development platforms I Bioenergy actors’ collaborations

Arctic Bio terminals

bioeconomy Feasibility study Bio terminal piloting

Utilisation of ash

Concrete export to large scale projects in Northern Sweden, Norway and North-West Russia

Further processing Further processing investigations investigations (update) A large-scale Arctic project programme project New business opportunities in Arctic logistics

Investigations into refining Investigations into refining from the point of view of SMEs from the point of view of SMEs (update)

Developing refining in SMEs I Developing refining in SMEs II for SMEs Commercialising new innovations in the natural resource sector,

refining programme refining (integration with Arctic bioeconomy) An Arctic natural resource resource natural Arctic An

Figure 14: Roadmap for the refi ning of natural resources

59 Utilising Arctic natural conditions

2014 2015 2016 2017 2018 2019 2020

An arctic tourism product and service development package Tourism development and innovation platform to support industry

Future tourism; and education and research programme Need based , new methods, service experienced

New-generation snow and ice construction products Snow- and ice construction RDI Testing and piloting innovations Developing arctic recreational Developing arctic recreational Sustainable arctic tourism arctic Sustainable environments I environments II

An expert group of Arctic testing business, education and research

Arctic testing industry and RDI consortium Arctic testing unit of expert Promoting the use of non-emission vehicles Arctic piloting destinations Implementing arctic testing and piloting Constructing arctic piloting environment Living lab network for Arctic testing Intelligent low-carbon Arctic construction and testing environments testing and Arctic innovations research innovations Arctic

Shaping expertise in Arctic conditions into new products and services

Material databank of Arctic conditions

Quality manual for Quality manual for Arctic conditions Arctic Tools for utilising Arctic conditions I Arctic conditions 2

Figure 15: Uti lisati on of Arcti c natural conditi ons

60 Cross-cutting development for Arctic growth

2014 2015 2016 2017 2018 2019 2020

Connections between Lapland and the Arctic Ocean

Opening northern airports programme Accessibility Construction of road and railway infrastructure under Arctic conditions

Arctic Innovation Oy Recognising Arctic innovations

Team Arctic Innovation platforms Operational models in practise

Specialised Arctic business services

Start up business programme RDI infrastructure Stabilising business Young entrepreneurship services

Arctic capital investment solutions

From Arctic indigenous industry to an innovations Arctic innovations Arctic New business from New business Cluster of expertise for Arctic desing Centre of expertise Arctic design business incubator for Arctic design Arctic brand work Sodankylä innovation centre

Utilising Arctic public Arctic cloud service data resources

Remote multi-sector health and well-being innovations Technology platforms; development and upgrading I&II Improved used of technology platforms solutions

Arctic digital Arctic eLappi Campus –a need based expertise development environmants eLearning platforms solutions development Content development I Content development II

Digital services into a competitive element

A cluster of top-flight expertise in Arctic and northern research Network of arctic research Cluster of top-flight expertise Arctic and northern research programme I&II UARCTIC and business contacts Development and commercialisation of Arctic safety expertise Arctic education, research and development commercialisation programme Promoting the acquisition of international EU funding for Arctic growth

research and development development research and Strengthening the operations of the Arctic information centre Cross-cutting Arctic education, Cross-cutting Arctic Arcticness as part of education – need –based development actions

Figure 16: Cross-cutti ng development for Arcti c growth

61 5. Programme Monitoring and Assessment

5.1 Introduction programmes29 provide a framework within which projects can be implemented. Cross- The new EU programming period 2013- cutting themes (e.g. ecoefficiency and 2020 will place more specific conditions supporting innovations) largely guide the on EU-financed project activities in order types of concrete measures that should be to ensure productivity and compliance focused on during the financing period. As with the goals set. The idea is to make sure part of planning the future EU programming that financing programmes generate the period, measures have been prepared in required added value for the Europe 2020 the programme through which Lapland will objectives. Therefore, the implementation specialise into an Arctic expert capable of of the various financing programmes and influencing matters. projects will be monitored and assessed more carefully. To support this, the various directorates general of the European 5.2 Role of monitoring and Commission and the administrative authorities of financing programmes have assessment together drawn up guidelines and manuals for developing monitoring and assessment The purpose of monitoring Lapland’s Arctic practices at the programme and project Specialisation Programme is to produce level. At the next phase of the regional observation-based reporting (in relation programme work, it is important to find to given criteria and indicators) on the the most suitable practices for use in achievement of the results and outputs Lapland’s operational environment in order defined for project activities. Monitoring to promote the implementation of the Arctic supports management and decision- Specialisation Programme. making. It also includes corrective measures The productivity of financing is monitored if the planned result or output has not and impacts are assessed by collecting been achieved. Project and programme information systematically, applying suitable monitoring focuses on current issues. The methods and using indicators determined question at the project level is of result- beforehand. Another very important sub- based monitoring. area is the anticipation of risks and threats, The purpose of assessing Lapland’s the adoption of precautionary measures, Arctic Specialisation Programme is and the availability of procedures to 29 overcome them. Europe 2020 provides a general objective at the level of the EU, Although guidelines and definitions which has been specified with seven flagship programmes (strategies), e.g. Innovation Union, Resource Efficient Europe, Digital Strategy and for project monitoring are assigned from Youth on the Move. More specific EU level objectives in the flagship above, weight is given to monitoring and programmes will be put into practice through specific initiatives, financ- ing instruments and programmes. The Smart Specialisation Initiative, assessment carried out from the point of for instance, directs the operation of structural funds and to some view of stakeholders and beneficiaries. extent also of other programmes so that these take account of the ob- jectives of the Innovation Union. The idea is to find synergies, remove The general EU policy, strategies and overlapping elements and generate need-based activities.

62 to investi gate how well the project (or 5.3 Monitoring and assessment programme) addresses the need for which of the Arcti c Specialisati on it was originally launched. Assessment is a systemati c method and objecti ve analysis Programme of the project, programme or policy and its planning, implementati on and results. Monitoring and agreeing on assessment It should produce useful informati on that practi ces according to region and actor can be used as feedback in future decision- are an important sub-area in creati ng the making. European Commission’s smart specialisati on Monitoring and assessment are strategies and programme. The Arcti c interdependent. Both of them emphasise Specialisati on Programme (Lapland’s Smart specifi c basic concepts (e.g. effi ciency, Specialisati on Strategy) produces content producti vity, eff ecti veness, purpose and for Lapland’s regional programme and for sustainability), of which the latt er two are preparing the future programming period. stressed in the assessment. The mutual The focus of the Arcti c programme is on relati onship and level of the basic concepts pursuing business-based development work, of monitoring and assessment are outlined supporti ng educati on that promotes such in the fi gure below. work and enhancing RDI acti viti es.

Sustainability What are the positive effects after the project has come to an end?

RELEVANCE Is the project in line with the needs and desires of the beneficiaries

IMPACT Is project purpose influencing in the achievement of the overall objective?

EFFECTIVENESS How well the project results are supporting the achievement of the project purpose?

EFFICIENCY How well the project is converting resources and means into the results? (cost-effectiveness) Resources/ means Activities Results Immediate objective Overall objective(s)

What kind of What will be What will be What is the What kind of means will be done? achieved? purpose of the changes are used? project? wanted?

Figure 17: Monitoring and assessment concepts

63 The implementati on of the Arcti c a ’fl oati ng’ recommendati on. A disti nct programme will be monitored and assessed monitoring and assessment model must as follows: be prepared for the regional programme in order to produce systemati c, relevant • the needs of diff erent target groups and informati on for decision-making at diff erent benefi ciaries of the proposals for acti on, levels. In practi ce, this means that joint and strategic objecti ves, are taken into objecti ves, exact indicators and their sources considerati on, improving the accuracy of future project • monitoring the fi nancing programmes planning will be defi ned for project and used in the implementati on; assessment programme acti viti es in Lapland. The aim practi ces. is to achieve realisti c, disti nct results and objecti ves. In practi ce, measures will be carried There will be stricter demands about out as joint projects between companies, projects really achieving their promised business sector developers, municipaliti es, permanent eff ects. This will place new educati onal insti tuti ons and other public requirements on project implementers and agencies. The above points of departure fi nancial authoriti es. It is proposed at this and needs must be taken into considerati on stage that more accurate regional indicators when introducing monitoring and should also be defi ned upon the preparati on assessment practi ces for the implementati on of the regional programme in order to of the Arcti c Specialisati on Programme. support project acti viti es. At the same ti me, The Arcti c Specialisati on Programme the parti es using project fi nancing must will be implemented as part of the future establish disti nct strategic objecti ves as to regional programme. This will already when and for what purpose they wish to ensure that the programme will not remain apply for project fi nancing.

Desired change

Impact (Long term influence) Overall objectives

Regional Operational programme, Arctic Results (Direct/indirect Specialisation programme influences) Project objective/ purpose and Funding programme objectives

Project outcomes (services, products, etc.) Operational objectives

Means Project activities

Funding Need-based projects supporting Arctic specialisation programme

Figure 18: Project acti viti es in relati on to programme work

64 The objectives of programmes representing different focus areas must coincide in order to generate the desired added value. Monitoring and assessing the implementation of these interfaces based on correct criteria will produce the necessary information for right decision- making in development matters. The idea is to find mutual dependency and effectiveness between the results, outputs and objectives of different measures. Multi- level monitoring and assessment is required to support this. The relation between project activities and the implementation of the Arctic Specialisation Programme is described in the Figure 18.

65 66 ANNEX The streering group of the Lapland’s Arctic Specialisation Programme

Members:

• Mika Riipi, Regional Council of Lapland (chair) • Maiju Hyry, Regional Council of Lapland (vice-chair) • Eija Virtasalo, Lapland Centre for Economic Development, Transport and the Environment (deputy member Kari Ruokonen) • Timo Rautajoki, Lapland Chamber of Commerce • Viljo Pesonen, Municipality of Sodankylä • Esko Lotvonen, City of Rovaniemi (deputy member Erkki Kautto) • Minna Uotila, University of Lapland (deputy member Jorma Puuronen) • Liisa Holmberg, The Sámi Education Institute • Tapio Piirainen, City of Kemi (deputy member Tero Nissinen) • Erkki Parkkinen, Municipality of Pelkosenniemi • Reijo Tolppi, Kemi-Tornion University of Applied Sciences (deputy member Eero Pekkarinen) • Martti Lampela, Rovaniemi University of Applied Sciences • Virpi Alenius, Finnish Forest Research Institute

Other specialists:

• Mervi Nikander, Regional Council of Lapland • Olli Pohjonen, Regional Council of Lapland • Ari Konu, Lapland University Consortium • Kristiina Jokelainen, Regional Council of Lapland • Kimmo Heikka, Regional Council of Lapland • Jukka Teräs, Regional Council of Lapland • Kaarina Mäcklin, Regional Council of Lapland (secretary)

67