Intotalo: a community mobilised to inspire young entrepreneurs

Itä-Suomi,

SYNTHESIS

Intotalo (“Into house”) was a three-year project in the region promoting individual development and entrepreneurship among young people. The project created a pre- incubator1 supporting developing new business projects, increasing interaction between educational institutes and enterprises in project activities as well as building networks between enterprises and students in early years of their academic programmes.

The basic challenges under-pinning the project idea were the continuous brain drain of young people from the rural and peripheral Kainuu region, high unemployment, and the fact that the number of enterprises per capita and interest in entrepreneurship in the region had both been very low. Some studies also indicated that many young people would probably stay or move back if the local environment would offer possibilities to live and work in the region. At the same time, the traditional methods of entrepreneurship education did not seem to be successful in lowering the threshold for young graduates to become entrepreneurs. As a result, several local educational institutions were looking for new ways to align entrepreneurship studies closer with practice.

The novel Intotalo idea promoted by a couple of young entrepreneurship trainers with the support of the Mayor of provided a turnkey solution to these needs. The partnership for the project consisted of the Kajaani town, the joint authority of the Kainuu region and eight enterprises from the Kainuu region. Local educational institutes from the upper secondary school to local university units were also actively involved in the project.

The project had a focus on the following activities: - entrepreneurship and project training provided within secondary level schools; - a learning environment for entrepreneurship and project skills developed within tertiary education; - coaching and business development made available from the very early stages of enterprise development.

The practical activities of Intotalo focused on supporting new firm foundations, facilitating joint projects between students, start-ups and established companies and organising training courses and other events that support entrepreneurship among students. Intotalo also offered office desks at the training centres in Kajaani and Vuokatti to the young entrepreneurs involved in training programme.

Intotalo primarily addresses students from secondary and vocational schools to university and technical centres, but also other people interested in entrepreneurship. Intotalo creates a community where young entrepreneurs can develop their business ideas with the help of professional coaching and with the support of the other young entrepreneurs. The Intotalo

1 Pre-incubation supports a business idea at the stage of conception and business planning of the emerging company or, in other words, it is not necessary for the company to be defined in legal terms or to possess a product or service that is ready for marketing. companies form a network where experience is exchanged, mutual learning takes place and business can be developed together. It also helps new enterprises to get their first customer connections and joint projects through a wide network of local enterprises.

By 2007, a total of 31 companies were located in Intotalo or created with the support of Intotalo. During the project, a total of 15 new enterprises were created directly, 76 joint projects with enterprises were initiated, 513 people participated in various training activities and a total of 840 people participated in various events. Of the created companies, five are active in software (e.g. three dimensional modelling, digital media and content creation ), six in business services (e.g. accounting, translation, public relations and marketing), the others provide training services, nursing services and leisure services. In addition, four other businesses were born in 2006, whose founders had participated actively in Intotalo training. Moreover, a cooperative, “Intotalon osuuskunta”, was established for organising and managing the business development projects of the Intotalo entrepreneur students.

In addition to these concrete results, the project led to organisational and social innovations. Intotalo created a new innovative learning environment where ideas can be quickly developed and assessed together with professional coaches and an extensive network of other actors. The support to innovation is also realised in the new way of practice oriented entrepreneurship training that is provided by Intotalo staff in close collaboration with the local educational institutes. The project has not been limited by industry sector, technology or an academic discipline but has been open to all levels of education and fields of activity.

Intotalo received a very positive feedback and currently continues its operation as a separate unit of the Kajaani Technology Centre, owned by the town of Kajaani. Based on the project, similar initiatives have been established in several other Finnish towns.

Background information

Country: Finland Region: Itä-Suomi (East Finland) Project title: Intotalo - Entrepreneurship training centre

Key words: support for enterprises: start up, spin off, incubators, new business process; education and training, life long learning

Duration of project: January 2003 – December 2005

Funding: total budget €534,562 ERDF contribution €253,687 national budget €120,586 regional budget €133,097 private contribution €27,192

ERDF Objective: Objective 1

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1. PROJECT DESCRIPTION

Intotalo's overall objective was to promote individual development and entrepreneurship among young people, thereby facilitating the creation and growth of new enterprises. The main operational aim of this, three-year, project was to establish a pre-incubator service to assist local young people to develop business ideas. The project promoted a community based entrepreneurship model, where people work together, share their ideas and problems and get hands on coaching from professionals. It was expected that this would direct more young people to entrepreneurship and increase their skills to better meet the challenges of working life. It was envisaged to tighten the links between educational institutes and enterprises through training, practical project activities and building networks between young people and enterprises from the onset of their studies.

The project's activities were to produce the following outcomes (or results): - entrepreneurship and project training is provided within secondary level schools; - learning environment for entrepreneurship and project skills is established within the tertiary education level; - coaching and business development is made available from the very early stages of enterprise development.

The practical activities included: - providing support for start-ups (coaching and advise on business development and office desks at the project centres); - facilitating joint projects between students, start-ups and established companies; - organising specific training courses and various other events that support entrepreneurship among students of both secondary and tertiary level schools.

The project facilities located in the town centre acted as a place for young entrepreneurs to work, but were also used for training and business networking. Intotalo offered office desks at the centres in Kajaani and Vuokatti to the young entrepreneurs involved in the training programme. In this way the project provided a day-to day support for students and young entrepreneurs to develop their business ideas.

The direct beneficiaries were secondary school and university students and graduates interested in entrepreneurship. Intotalo created a community where young entrepreneurs could develop their business ideas with the help of professional coaching and with the support of other young entrepreneurs. The companies located in Intotalo formed a network where experiences were exchanged, mutual learning took place and business could be developed together. This part of the activities included sharing a working space with other entrepreneurs and coaching staff.

A number of educational institutes were indirect beneficiaries of the project, e.g. Kajaani upper secondary school and Kajaani vocational school. Close collaboration took place with the Kajaani University Centre. Students from Kajaani Department of Teacher Education and the Department of Information Processing Science participated in “Into Academy” activities that included entrepreneurship and project management training. In 2007, student groups from Kajaani University of Applied Sciences also participated. Other indirect beneficiaries of the project are local enterprises who now have a network of local students and undertake joint research and development projects with young entrepreneurs.

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The main quantitative results of the projects have exceeded initial expectations. Over three years, 513 students (initial target was 350) participated to training courses and 17 (initial target 11) new companies were founded through Intotalo’s pre-incubator. The project facilitated creation of 76 joint projects (target 60) and a total of 840 (target 800) people participated in events. Other main results were the creation of INTO-academia studies as part of the official studies of the Oulu University and the creation of INTO summer job initiative; where young people have created a summer job for themselves with the town of Kajaani paying a small basic salary.

As a result of the project, Intotalo itself became a permanent activity and is now part of the services of the Kajaani Technology Centre. Also, a dedicated Intotalo model and brand were created so that the idea can be transferred to other regions as well.

The expected impact of the project was to promote entrepreneurship among young people, particularly students, and to instil entrepreneurial spirit among those who do not want to become entrepreneurs. It is expected that this would contribute to the creation of new regional enterprises and lead to a decreased brain drain from the region. The long term expected impact is increasing the confidence in entrepreneurial activity among the population in the region, but this is expected to be noticeable in ten years’ time.

Although the town of Kajaani was very active during the project contributing to its budget with support from local key companies, the European Union support was of great importance for launching the project. The added value of European Regional Development Fund (ERDF) funding was increased credibility and enabling the activities to have sufficient scale by sharing the risks. The positive funding decision sent an encouraging signal to many regional stakeholders confirming that the Intotalo concept was feasible and worthy of participation. Together with national and regional funding, the ERDF funding gave the project enough resources to enable it to become a new permanent activity.

2. POLITICAL AND STRATEGIC CONTEXT

The basic challenges underpinning the project idea included the small number of enterprises per capita in Kainuu region, high unemployment and the brain drain from the region. Kainuu suffers from its peripheral location. The number of enterprises per capita is lower in Kainuu than in any other region in Finland (4% compared with 5% in Finland) and the net growth in the number of new enterprises is slow. The unemployment rate in Kainuu was 17.5% in 2004 compared with the national average of 8.8%. The large percentage of young people who leave the area creates a serious problem for the regional economy. Population figures in the region show an inversed age structure, indicating that in 2010, the size of age groups entering the labour market will only be 60-70% of those leaving. All of these issues were specifically addressed in the Regional Programme 2003- 2006, the primary regional development plan of the region, which placed an emphasis on entrepreneurship promotion.

One of the main reasons why people do not to move back to the region is that the local business environment does not offer enough possibilities and incentives for young people. Local community leaders see increased entrepreneurship and self-employment as the most promising way of creating new jobs in the region. Therefore, social and organisational

4 innovations are needed to help young people to start new businesses in both manufacturing and services. Intotalo was included in the Kainuu Regional Programme 2003-2006 as one of the measures to promote entrepreneurship. In the Regional Programme 2006-2010, it is also mentioned as one of the two key instruments for creating new enterprises.

3. IMPLEMENTATION

3.1. Project design and planning The original idea of Intotalo was introduced by two young entrepreneurs. Based on their past experience with business and entrepreneurship training and social networks among young entrepreneurs, their idea was to create a new form of learning environment in Kajaani. The model for the learning environment was heavily inspired by the Jyväskylä Team Academy, a special unit for entrepreneurship and leadership in Jyväskylä University of Applied Sciences, which had test a range of alternative learning tools.

At the same time, the local educational institutes had been searching for various ways to approach entrepreneurship education. As entrepreneurship is difficult to promote with traditional teaching methods, it was considered that a new kind of learning environment would be necessary in combination with the traditional teaching system. Intotalo was a turnkey solution to provide a new learning environment.

During the early stages of the project planning it was found that there were not enough models in the Kainuu region to encourage young people to be entrepreneurs. A preliminary “Intoa Kainuuseen” feasibility study highlighted the need to develop a concrete path to entrepreneurship and a pre-incubator model for young people. The target group and approach of the project was also further defined.

Intensive discussions among the project advocates and key supporters from the town of Kajaani, as well as refining of the project idea, took place before the actual project selection. Due to the creativity of the approach, it took a lot of time to develop a detailed plan and develop the concept before the project was actually chosen. Doubts about its feasibility, as expressed by some entrepreneurs, schools and elected officials during the planning stage of the project, delayed the start of the project and made it more difficult to secure necessary funding.

This challenge was overcome through patient negotiations, a feasibility study and by convincing a few key stakeholder of the value of the idea: the Mayor of Kajaani and the Director of Business Development together with the heads of the local university units were instrumental in securing local support and financing for the project. On a positive note, this delay allowed additional time to plan and prepare the project, and as a result, the project initiation went far more quickly than was the case with other projects.

Various interest groups were also already involved in the planning stages. Seminars with up to 50 people were arranged with young people and various interest groups such as businesses and municipalities. Even members of the parliament from the region were involved.

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One of the key challenges for the project was that the idea was completely new for the region. Kajaani had no similar experiences although the basic idea (networks of young entrepreneurs) had already proved to be a good one as a small but active network of young entrepreneurs had previously been working in the region. Another challenge for the project was that it was aimed at the interface of private sector (entrepreneurship) and public sector (schools and educational institutes), which was difficult to arrange. Typically, development projects in the region aimed at and involved one or other sector.

3.2. Management, monitoring and evaluation system For the overall management and monitoring of the project, a steering group was formed. It consisted of nine people representing the Town of Kajaani, the regional authority, educational institutes and enterprises. The steering group mainly focused on following the overall progress of the project. The project manager had the freedom to arrange daily activities. The coordination of project activities was ensured by having general discussions in the steering group and more specific joint planning by the project staff together with the stakeholders.

Daily management of the project was left to the project manager (who was also one of the original project advocates) with the exception of some administrative services (accounting, wages, billing, etc.), which were provided by the Town of Kajaani.

Evaluation was included in the project’s planning from the beginning. Clear, quantitative targets (new enterprises, training, joint projects) were agreed upon within the steering group. Result indicators, especially the number of new enterprises, were monitored. Also various outputs, such as the number of people participating in training and events, and the number of joint projects between students and enterprises generated by the project, were monitored continuously together with the steering group. There was also a continuous internal monitoring of customer satisfaction by using feedback forms and discussions.

The original developer of the project was selected as the project manager. However, the selection of the project manager was an open process and other candidates were also taken into consideration.

3.3. Governance: partnership and leadership The partnership for the project consisted of the Town of Kajaani, the Joint authority of Kainuu Region, University of Oulu (Kajaani Unit), Kajaani upper secondary school, Kajaani University of Applied Sciences, and eight key enterprises in the Kainuu region from various sectors such as publishing, retail trade, advertising, energy, telecommunications and the paper industry.

The role of the Town of Kajaani was to act as a lead organisation for the Intotalo project and provide financial and administrative services so that project staff could concentrate on project activities. The Town of Kajaani was also the local financier of the project. Between 2003 and 2004, Intotalo operated under the management of Kajaani Business Development Centre and from 2005 under the management of Kajaani Technology Centre. The Town of Kajaani has also strongly supported the project in public, giving it more credibility and room to manoeuvre. Local authorities also used the Intotalo concept as a way of branding and marketing the city activities and overall image as a town of creativity and expertise.

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The Joint Authority of Kainuu Region (former Regional Council) has been co-ordinating the project and has been responsible for allocating national and European Regional Development Fund support to the project.

Logically, the role of educational institutes has been as a partner in education. A division of labour has been developed wherein the educational institutions provide basic education in entrepreneurship while Intotalo provides a learning environment for project activities and some specific courses and training (mainly related to entrepreneurship and project management). In practice, this meant that Intotalo has organised such courses sessions for the educational institutes at the Intotalo facilities.

The local enterprises provided networks and specific project assignments but also acted as sponsors by providing the private part of the project funding. The enterprises have also committed to buy services from newly established firms. The interest of the enterprises in participating in the project has been to develop their future operational conditions in the region by activating young people in the region and by building networks between young people and local businesses.

The partnership has worked well, although some organisations have been slower than others in committing their contribution. The educational institutes have developed their own curricula in interaction with Intotalo and the companies have been active in supporting the Intotalo activities. The Town of Kajaani has stepped forward to take responsibility for Intotalo activities in the future by committing to finance the core activities. Many of the partners have not been in direct interaction with each other but rather have been co-operating directly with Intotalo. Nevertheless, the partnerships has been sustained after the project.

The support for the project grew gradually. In the beginning there were many doubts in the region, notably among enterprises. Also, some partners were cautious, as there was no previous experience of such endeavours. However, the core group with the Mayor of Kajaani and the Business development manager of Kajaani, the University of Oulu and the regional council, has supported the project actively from the beginning. These actors acted in close collaboration with the project manager and, after being convinced, wanted to promote the project to other stakeholders.

3.4. Innovative elements and novel approaches to implementation The kind of private-public partnership used in Intotalo, combining education and training with coaching and pre-incubation for young entrepreneurs all in one place, was a new idea. Including the focus group right from the beginning ensured that the vision for Intotalo came from young people. The existing network of young people known by the project manager and the early participants were given a possibility to participate in planning and development of the Intotalo activities by expressing their ideas and wishes.

It was also a new idea to bring in students from various levels of education, from secondary and vocational education to university education, and also from different disciplines. This not only provided a possibility for students to be exposed to Intotalo activities over a long period at different stages of their education, but also brought together people with different kinds of experience and different mindsets. According to some stakeholders, this has been one factor that has increased the innovativeness of the Intotalo community. Upper secondary school students, for example, were able to see and hear what

7 people studying at universities were actually doing, and at the same time, people from different disciplines and different business areas were able to interact closely with each other while operating on the same premises and participating in the same courses and training sessions.

Publicity and promotion were actively pursued by the project, and as a result, it attracted a lot of attention regionally as well as nationally. The key messages and different stories were brought together and used to present a brand image. This was new in the Finnish context.

It is also quite typical for projects with local or regional funding to rely heavily on local ideas and expertise. As opposed to this approach, Intotalo actively sought out the best trainers, skilled professionals and new models from around Finland. During the project, collaboration was established with 15 top trainers in Finland, whose approach conformed to that of the Intotalo project.

3.5. Key implementation obstacles and problem-solving practices The project did not confront any major obstacles. It has been argued that the main reason for this was that the process of defining and fine tuning the project model took something like two years before the actual project took place, meaning that it was very well prepared and organised. Some minor issues were sorted out in collaboration with the financiers.

The main obstacles during project implementation were, first, defining the target group clearly and ensuring that there was enough participants from different sectors in the group of key stakeholders and, second, realisation that the original project objectives were too rigid compared with actual activities.

As regards the first problem, with hindsight it can be emphasised that the project implementation would have been easier and more straightforward if the target group had been planned more precisely. This would have made it possible to find the most promising future entrepreneurs. This obstacle was tackled later, when project activities had gained momentum, by refocusing on the most promising individuals and groups.

In relation to the objectives there was some incongruence between the project goals and the actual project activities. The objective of the project - establishment of new enterprises - is a long process. Results were expected in the very short term as a certain number of new enterprises were agreed on as the target of the project. This resulted in the situation of project goals guiding the speed and scope of activities more than the project staff would have wanted. The problem was solved by accelerating the training and coaching process with some young entrepreneurs. However, this was a minor issue and carried out in a way that did not produce any negative effects. This problem probably reverts back to using too much objective based logic in project design and planning, and trying to follow the predefined targets too closely.

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4. INNOVATION RESULTS

The Intotalo project provides a new innovative learning environment where ideas can be quickly developed and assessed with professional coaches and an extensive network of other actors. The form of support for innovation has focused on creating a new form of business incubation and training. It is important to note that the philosophy behind Intotalo strongly supports processes where new ideas are developed together in open discussions and in a co-operative manner.

The main result of the project was the creation of the Intotalo, a service with both facilities and provisions for a new kind of learning environment, where the student is an active actor. In this environment, students can realise genuine projects in a real world environment and under direction and mentoring of experienced trainers. Intotalo addresses students from secondary and vocational schools to university and technical centres.

The support focuses on the pre-incubation process for new enterprises. This is a community based entrepreneurship model, where people work together, share their ideas and problems and get hands on coaching from professionals. It is considered as significantly increasing the likelihood of young people to become entrepreneurs. Aside from daily interaction, Intotalo also arranges regular meetings where the community members that work outside the Intotalo facilities can join and compare their experiences with others. This kind of peer group support and benchmarking process represents a relatively novel approach to entrepreneurship as many new entrepreneurs often struggle alone with their problems and ideas.

The model also made students more committed and helped them to build up networks with various interest groups. Thanks to these networks, it was easier for the new entrepreneurs to find first customers, thereby improving their capacity to effectively begin their activities. According to discussions with some entrepreneurs, the mechanism of assistance to locate the first customers has been an important factor for the new businesses to gain momentum.

The introduction of the new operating model and pedagogy to entrepreneurship education was another key innovative result. This kind of approach was new to the region (and most of Finland) and it has proved to lower the threshold of becoming an entrepreneur. The new model also complemented the existing entrepreneurship and project management education and gave the educational institutes a new instrument to support their educational programmes.

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5. SUSTAINABILITY AND TRANSFERABILITY

5.1. Sustainability The project is sustainable in that the concept developed in the project continues as a permanent organisation, which is organisationally part of Kajaani Technology Centre owned by the Kajaani town. The plan to establish a permanent organisation “Intotalo” was set from the beginning, provided that the project proved successful. The town of Kajaani provides 70-80% of the annual funding for Intotalo and the rest comes from generating revenue from training and other services. This system is sustainable and the current set-up ensures that all Intotalo activities and staffi are maintained and that Intotalo can adopt a long-run view to serving the local educational institutes, local enterprises and young entrepreneurs.

Nonetheless, the establishment and maintenance of a permanent organisation and sufficient financial resources may not be enough for Intotalo type of organisations that rely strongly on the contribution of key individuals in maintaining the dynamic and community spirit during operations. It is, therefore, important for the organisation to find and educate new people who will be able to continue the management of Intotalo operations in the same way, in case the original project staff should move on to other tasks. This issue was not tackled in-depth during the project and has only been considered at later stages.

In time the original network of entrepreneurs will be less active in the Intotalo community and new active people will be needed to maintain the internal dynamics of the community entrepreneurship model. In practice this means that while the existing companies grow and move out of Intotalo or participate in Intotalo activities, new like-minded and active people should be attracted to Intotalo on a regular basis.

It is critical for the sustainability of the project to be able to produce a new generation of creative key individuals that are interested in becoming entrepreneurs and work actively within the Intotalo community. This has been a major challenge for the Intotalo activity and specific personal targeting of suitable individuals has been done during training sessions to find new entrepreneurial elements with sociable character.

5.2. Transferability The project concept includes many sub-parts (training and mentoring services, a shared space for joint activities and interaction and a “pre-incubation” facility for new enterprises), all of which can be transferred to other regions, provided that the basic philosophy and methodology is maintained and that local conditions and culture are taken into account.

Functioning of the Intotalo model is dependent to a considerable extent on the manager’s abilities and capacities to understand the basic philosophy behind the concept. It is also important for the key people to be able to inspire others and to be able to build a community of active people around the concept. The Intotalo concept builds on a particular kind of participatory approach to entrepreneurship training and this approach should be maintained and mastered by the project staff.

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The Kajaani Intotalo model has already been copied by neighbouring towns of and (on a smaller scale) to , both located in Kainuu region. Another centre has been planned in the town of in the neighbouring Northern Ostrobothnia region. However, in all of these cases, the launch of the project has been personally facilitated or managed by people from the Kajaani Intotalo. The experience from these transfers in Finland has shown that the participation of project staff from existing Intotalo has been critical in order to transfer the concept successfully. It is also important that the project has strong local network connections to local educational institutions and the local business sector right from the beginning.

The transferability of project results is relatively small. The fundamental result of the project has been an increased capability and willingness of students and young people to become entrepreneurs or to adopt an entrepreneurial working culture. These effects are highly embedded in individuals and, therefore, very local if the people choose to remain in the region.

6. CONCLUSIONS: MAIN SUCCESS FACTORS

Leadership from committed group First of all, it has been of great importance that the project has been able to get an active group of creative people (approximately 20) to commit themselves to the community- based project. This core group of participants was able to develop the idea and ensure that it became a concrete activity.

Inspiring mission and vision Secondly, the project had an inspiring and well thought out mission and vision to guide it through the whole project period. This was partly the result of a long-term idea maturation process that lasted two years before the actual project started. This vision was clearly shared by all and the project did not have to change priorities much during implementation. It also included the target of continuing project activities through a permanent organisation.

Strong support from key regional players Thirdly, there was strong support for the project by some key agents, particularly the town of Kajaani, the University of Oulu and the regional authority. This has been of great importance, especially before the project selection and during the early stages of the project when there were doubts about, and critics of, the project. This support from influential parties made it possible for the project staff to concentrate on core tasks instead of wasting time in administrative tasks or political struggles.

Committed and professional project staff Fourthly, the commitment from the project staff has been of utmost importance in order for the project to be successful. It was widely agreed that the kind of community-oriented approach would not be possible without project staff being personally devoted to the various project activities. Also, their expertise was important as most activities are based on their skills in coaching, management and marketing of start-up enterprises. The new training models also required that project staff understands the underlying approach.

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Networking key regional stakeholders Finally, building up networks to the private sector, but also to the educational institutions in the region and elsewhere, was crucial. The success was partly based on previous contacts and on convincing key interest groups. This has had an important influence, for example, in creating collaborative projects between students and enterprises and in identifying first customers for start-up enterprises.

For the same reasons, it is important not only to find and mobilise the correct people during the early stages of the project, but also to build up a long-term way of action to maintain the active community structure and the network connections. This is done through attracting energetic and entrepreneurial people by using personal networks and by including these key individuals among young people and among partner organisations in the planning process. Training new people to share the competence and experience of the key individuals in the project can do this. One of the greatest challenges for these kinds of operations is to maintain the dynamic of the activities in the long term.

PROJECT CONTACT DETAILS

Contact person

Name: Marko Leppänen Position: Coordinator Organisation: Intotalo Kajaani

Address: Kauppakatu 7, 2 krs. 87100 Kajaani Finland

Telephone: +358 8 622 508 Fax: +358 8 622 509

Email: [email protected] Project’s website: http://www.intotalo.com/

The information contained in this case study is up to date as of: September 2007

This case study has been prepared by Kimmo Viljamaa in the framework of a study carried out by Technopolis Group on behalf of the European Commission. The contents and views expressed in this case study are those of the author(s) and do not necessarily reflect the opinions or policies of the European Commission.

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