Version: Final Date: 18 April 2012

Regional Innovation Monitor

Regional Innovation Report (Pohjois-Suomi)

To the European Commission Enterprise and Industry Directorate-General Directorate D – Industrial Innovation and Mobility Industries

Kimmo Viljamaa Henri Lahtinen Ramboll Management Consulting

www.technopolis-group.com

PREFACE

The Regional Innovation Monitor (RIM)1 is an initiative of the European Commission's Directorate General for Enterprise and Industry, which has the objective to describe and analyse innovation policy trends across EU regions. RIM analysis is based on methodologies developed in the context of the INNO-Policy Trendchart which covers innovation policies at national level as part of the PRO INNO Europe initiative. The overarching objective of this project is to enhance the competitiveness of European regions through increasing the effectiveness of their innovation policies and strategies. The specific objective of the RIM is to enhance the scope and quality of policy assessment by providing policy-makers, other innovation stakeholders with the analytical framework and tools for evaluating the strengths and weaknesses of regional policies and regional innovation systems. RIM covers EU-20 Member States: Austria, Belgium, Bulgaria, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, the Netherlands, Poland, Portugal, Romania, Slovakia, Spain, Sweden and the United Kingdom. This means that RIM will not concentrate on Member States where the Nomenclature of territorial units for statistics NUTS 1 and 2 levels are identical with the entire country (Estonia, Latvia, and Lithuania), Malta which only has NUTS 3 regions, Slovenia which has a national innovation policy or Cyprus and Luxembourg which are countries without NUTS regions. The main aim of 50 regional reports is to provide a description and analysis of contemporary developments of regional innovation policy, taking into account the specific context of the region as well as general trends. All regional innovation reports are produced in a standardised way using a common methodological and conceptual framework, in order to allow for horizontal analysis, with a view to preparing the Annual EU Regional Innovation Monitor reports. European Commission official responsible for the project is Alberto Licciardello ([email protected]). The present report was prepared by Kimmo Viljamaa ([email protected]) and Henri Lahtinen (henri.lahtinen@r- m.com). The contents and views expressed in this report do not necessarily reflect the opinions or policies of the Member States or the European Commission. Copyright of the document belongs to the European Commission. Neither the European Commission, nor any person acting on its behalf, may be held responsible for the use to which information contained in this document may be put, or for any errors which, despite careful preparation and checking, may appear.

1 http://www.rim-europa.eu

Table of Contents 1. Main Trends and Challenges in the Regional Innovation System 1 1.1 Recent trends in regional economic performance 1 1.2 Recent trends in regional innovation performance 3 1.3 Identified challenges 5 2. Innovation Policy Governance 7 2.1 Degree of institutional autonomy 7 2.2 Institutional-set up, co-ordination and implementation mechanisms 7 2.3 Availability and use of policy intelligence tools 11 2.4 Key challenges and opportunities 12 3. Innovation Policy Instruments and Orientations 14 3.1 The regional innovation policy mix 14 3.2 Appraisal of regional innovation policies 20 3.3 Good practice case 22 3.4 Portfolio of innovation support measures 23 3.5 Towards smart specialisation policies 24 3.6 Possible future orientations and opportunities 26 Appendix A Bibliography 28 Appendix B Stakeholders consulted 29 Appendix C RIM Repository information 30 Appendix D Statistical data 31

Appendices Appendix A Bibliography...... 28 Appendix B Stakeholders consulted...... 29 Appendix C RIM Repository information ...... 30 Appendix D Statistical data ...... 31

Figures Figure 1-1 Economic and innovation performance indicators...... 4 Figure 2-1 Management and implementation structure of regional innovation strategy ...... 11

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Tables Table 3-1 Overview of the regional innovation policy mix ...... 15 Table 3-2 Existing regional innovation support measures...... 18

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Executive Summary 1. Introduction: Main recent trends in the Regional Innovation System Pohjois-Suomi is among the structurally more challenged regions in Finland due to its location, long distances, dominance of small and medium sized enterprises (SMEs) and very low population density (on average 4.7 inhabitants/km2). Against this background the per capita gross domestic product (GDP) in the region was rather high (€25,400) in 2007, being 86.3% of the Finnish average and 103% of the EU average. The figure, however, is slightly misleading, because Oulu city- region in Pohjois-Suomi is one of the strongest regions in the whole country contributing considerably to the GDP per capita. Pohjois-Suomi has suffered from high unemployment as well as high levels of outmigration for a long time. Although unemployment has fallen in the 2000s the unemployment rate 10.1% (2010) remains still above the EU27 average (8.9%). Ageing population and outmigration pose challenges to the economic performance of the region. The share of the agriculture (1.57 times the EU27 average) and public services (1.21) in the economic structure are strong. Pohjois-Suomi has plenty of potential in terms of natural resources (e.g. the largest gold mine in Europe, several other mines in the preparation phase and plenty of wood). Moreover, Pohjois-Suomi shares borders with Norway and Russia being close to the very large natural resources of the two nations. Due to the location Pohjois-Suomi has an important intermediary role as part of the multilateral cooperation within the Barents region. The share of young people with tertiary education is also rather high in Pohjois-Suomi (almost 40 per cent compared to 30 per cent of the EU27), which is based on two universities providing higher education in the region. The University of Oulu is one of the largest universities in Finland. However, there is pressure on the national level to decrease the amount of higher education institutions and this causes concern in Pohjois-Suomi in terms of Universities of applied sciences. The innovation performance in the region has also been very good during recent years. The gross expenditure on R&D (GERD) was as high as 5.38% of the GDP in 2007, representing the highest figure among the Finnish regions. In comparison the EU average was only 1.37%. Also the GERD growth rate (4.34% between 2000 and 2007) has been significantly higher (1.81 times the EU average) than in the EU as whole. However, regional disparities are considerable. This is reflected in the share of SMEs innovating in-house in Pohjois-Suomi (0.79), which is somewhat below the national average (0.81). 2. Major innovation challenges and policy responses Challenge 1: Narrow industry focus on strategy and policy levels

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The strong industrial base of Pohjois-Suomi has been affected by globalisation. As a result traditional industries such forestry, metals and manufacturing have decreased in importance. There are other industries on which the future growth should be built on – especially tourism, experience economy and services – not forgetting the vast natural resources. These have been reflected to a certain extend in the regional strategies (e.g. Industrial Strategy of Lapland 2030) but funding remains targeted to the traditional fields and does not encourage research, development and innovation (R&D&I) in the more future oriented industries. Challenge 2: Regional disparities as a challenge for balanced innovation policy Due to significant regional disparities in Pohjois-Suomi it is challenging to develop the region as a whole. Around one third (229,000) of the population in the region lives in Oulu and the surrounding municipalities with population density of 49 inhabitants per square kilometer. At the same time there are approximately 183.000 people in the whole sub-region of Lapland, which is the northernmost part of the region with the average population density of 1.9 inhabitants per square kilometer. While the former figure is increasing, the latter decreases slowly. Moreover, Oulu is a known information and communication technology (ICT)-hub backed by several other industries and thus also attracts notable amount of both public and private sector funding, which is illustrated in the significantly higher GERD (Gross expenditure on R&D) compared to the EU27 average. The landscape for regional development is also quite different in the sub-regions. The private sector is much more active in Central- and Northern Ostrobothia (especially in the Oulu region) in R&D than in Lapland where the companies are smaller and lack the culture of applying for funding and utilizing the support instruments provided by the public sector. This is also reflected in scarcity of smart specialisation towards the northern parts of the country. Challenge 3: Ageing and employment in low population density area Similar to another Finnish region (Itä-Suomi) ageing presents specific challenges for innovation and for the regional economy as a whole, but particularly to services in the public sector. The age structure requires that specific innovations need to be carried both in public and private services. Moreover, Pohjois-Suomi is in danger of insufficient levels of employment in the coming decades. The situation, however, is not similar throughout the region, one of the sub-regions having the youngest age structure in Finland. At the same time this may provide an opportunity to focus on innovations related to the elderly. The need for innovation to find new solutions is further emphasised by the low population density in the region, which makes efficient service provision a challenge. 3. Innovation policy governance Pohjois-Suomi is not an administrative region in itself, and hence there are no formal regional organisations tackling innovation policy issues ii Regional Innovation Monitor

covering the whole of Pohjois-Suomi. Regional councils in the NUTS 3 level are closest to this. These organisations are responsible for regional development and to some extent also for innovation policy. Various actors (the regional councils together with the Centres for Economic Development, Transport and the Environment, the city governments, universities, technology centres and other intermediary organisations such as chambers of commerce) jointly formulate regional innovation policy activities. It is not uncommon for many sub-regions to have their own economic development policies that also cover aspects of innovation aspects. Regions have a relatively high degree of autonomy in the design and implementation of regional policies, such as the Regional Cohesion and Competitiveness Programme. The regional centres funded by the Centre of Expertise Programme (OSKE) design their own aims and measures, and also the ERDF programmes are designed and implemented at the regional level. The former, however, has been criticised for bureaucratic structure since the reorganisation of the programme as cluster based. The cluster-based model has emphasised the importance of university centres leaving regions without a university in a lesser position. The regional authorities have relatively little autonomy over the allocation of government funding. The overall budgetary autonomy of municipalities is considerable, but in practice much of their support for innovation is in the form of co-financing projects that are supported by European Regional Development Fund (ERDF), European Social Fund (ESF) and national programmes. Due to the administrative structure many planning and implementation processes take place in Pohjois-Suomi. The local and sub-regional strategies and measures capture the specific needs and opportunities better than centralised processes, although it can still be questioned, whether this industrious horizontal and vertical co-ordination is efficient enough to provide good results in a relatively sparsely populated region with a limited amount of human and financial resources. 4. Conclusions: future actions and opportunities for innovation policy Pohjois-Suomi is a region of different characteristics consisting of growing cities, lagging regions, ageing populations and even wilderness in Lapland. This is a demanding landscape for regional policy. Pohjois- Suomi consists of three sub-regions and is more of a statistical unit instead of being a functional entity. Thus policies are often implemented on sub-regional and municipal levels. On one hand this is good, because the actions are taken close to various stakeholders and the markets. On the other hand this causes increased competition between municipalities and previously also between universities and universities of applied sciences. For the latter the situation has improved, resulting in more specialized focus areas within higher education institutions in Pohjois-Suomi while competition for funding has risen to national and European level.

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However, Pohjois-Suomi is often viewed from its industrial heritage, even though traditional industries no longer are the most dominant sectors in the region. More emphasis should be placed e.g. on services (industrial and public sector), creative industries, and tourism. More support from the government level is needed for the stone and mining industry due to the scale of investments required. Smart specialisation is one of the targets set for the regions by the European Commission. Pohjois-Suomi needs to find a balance in this respect, since policies are being formulated on the national level and implemented mainly on sub-regional level leaving little room for smart specialisation deriving from the needs of the region.

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1. Main Trends and Challenges in the Regional Innovation System

1.1 Recent trends in regional economic performance Pohjois-Suomi covers nearly half of the whole country (44%), but less than 12% of the total population. Moreover, growing city-regions (Oulu, Rovaniemi and Kokkola), agrarian communities and wilderness are all to be found in the region. Pohjois-Suomi consists of three rather different sub-regions (on NUTS3 level): Central Ostrobothnia, Lapland and Northern Ostrobothnia. The amount of people living in the region is increasing in Central- and Northern Ostrobothnia and decreasing in Lapland due to migration, availability of jobs as well as education and a more positive age structure in the former two and due to outmigration and ageing in the latter2. Ageing of the population poses a challenge to the whole region. Municipalities in Pohjois-Suomi (especially in the northernmost parts of Finland) are large, yet there are not enough people to sustain the need for basic services. The situation is even worse outside the centres of settlement. This leaves the elderly in a difficult position, as the services they need, become fewer and are far from them. The picture is very different on the sub-region level. The age structure of Northern Ostrobothnia is the youngest whereas Lapland’s is the oldest of Finnish regions. Unemployment has been another persistent issue in the region and the unemployment rate is slightly above the EU27 average (9.7%) and clearly above the national average (8.4%). In 2010 the unemployment rate of Pohjois-Suomi region was 10.1% while the employment rate was 63.8%. In the sub regional level, Lapland has the highest unemployment rate (11.3%) followed by Northern Ostrobothnia (10.2%) and Central Ostrobothnia (6.8%)3 Pohjois-Suomi shares the highest figure among the Finnish regions in terms of unemployment whereas it is second to last measured by the employment rate. However, the situation has improved from 2000, when the figures were 14.1% and 60.8% and it can change more in the future due to ageing and increase in the demand of labour especially in the mining industry and services (tourism, public sector). Based purely on the economic performance Pohjois-Suomi is among the weaker regions in Finland. The level of per capita GDP reached €25,400 in 2007, which represents 86.3% of the Finnish average and is slightly above the EU average (101.6%). There are not many large companies in the region, which is dominated by micro companies (82% of all companies4). Among the most significant companies present in the region are e.g. Kemira, Nokia, Outokumpu, Ruukki, and Stora Enso and

2 http://www.tilastokeskus.fi/tup/suoluk/suoluk_vaesto.html#bruttokansantuote 3 http://www.tilastokeskus.fi/til/tyti/2010/tyti_2010_2011-02-15_tie_001_fi.html 4 ERDF Development Programme for Northern Finland 2007 -2013

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Lappset, headquarters. These also represent the most important industries in Pohjois-Suomi – forestry, ICT, mechanical engineering and metals industry. The average annual real growth rate of GDP in Pohjois-Suomi between 2000 and 2007 amounted impressively to 4.3%, which was nearly twice as high as the EU average (2.38%) and higher than the growth in Finland as a whole (3.46%). Since 2008 the growth rates have decreased reflecting the global economic downturn. Another indicator of a change in the economic performance of Pohjois-Suomi is the amount of patent applications to the European Patent Office (EPO). In 2007 there were more than 200 patent applications per million of inhabitants in Pohjois-Suomi, but in 2008 the figure decreased below 95 (provisional value)5. However, the share of economically active population with at least upper secondary education (in total) in Pohjois-Suomi exceeded both national and EU27 average by 106% in 2010. In terms of the share of economically active population with tertiary education Pohjois-Suomi (34%) outperforms the equivalent EU average by 121%. The challenges related to the economy and unemployment date back to the 1990 recession and even beyond. The structural change from industrial to information society has been a long process that continues still. For instance the changes in the Finnish forestry industry during the past few years have caused problems as production has been shifted away from Northern Finland to regions in other countries. This has been reflected in the amount of jobs in the industry. Several hundreds of jobs have been lost within manufacturing of paper and paper products as well as timber in all three sub regions in Pohjois-Suomi. Despite the decrease in employment, forestry remains one of the key industries in Pohjois-Suomi. Natural minerals discovered recently in the region on the other hand have accelerated the local economy, and could create jobs and increase the demand for various services. This has already been illustrated as increase in employment in mining, quarrying and related services. 6 The role of services has been relatively low in Pohjois-Suomi region, but again the situation is very different in the sub-region of Northern Ostrobothnia and its capital Oulu, in which services are by far the largest generator of jobs7. There are additional notable differences between regions in Pohjois- Suomi. The municipality of Oulu and its surrounding areas is one of the ICT and high-technology hubs in Finland. The rapid growth of the ICT industry (especially in the Oulu region) around the turn of the millennium backed with strong metals and mechanical engineering

5 http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&language=en&pcode=tgs00 040&plugin=1 6 http://www.tilastokeskus.fi/til/syr/2010/syr_2010_2011-11-25_tie_001_fi.html 7 http://www.ouka.fi/city/elinkeinot.asp

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industries was reflected in the increase in GPD (4.3% from 2000 to 2007). To ensure future growth in the Oulu region, Business Oulu (an organisation promoting the prosperity and competitiveness of companies in the region) focuses on the following key sectors: clean tech, creative industries, ICT and Nano, life sciences, as well as trade and services8. The importance of ICT industry (compared to the turn of the millennium) has decreased during the past few years and recession has also affected traditional industries (metals, forestry etc.). Hence new and better services are required to accommodate the growing needs of tourists travelling to the Pohjois-Suomi (especially Lapland) region from Central-Europe and Russia. Tourism – alongside the stone and mining industry - is one of the most promising drivers of growth in the region. Agriculture, hunting, forestry and fishing represented a 7% share of employment in the Pohjois-Suomi region in 2010, which is a hint above the national average (6%) and more clearly above the EU27 average. The highest share of agriculture among Finnish regions is to be found in Central Ostrobothia. Share of employment in industry (including construction) was 24% being exactly the same as the national average in 2010.

1.2 Recent trends in regional innovation performance This section discusses the innovation performance of Pohjois-Suomi e.g. in the light of the following indicators: gross expenditure on R&D (GERD), patenting, tertiary education among population aged 30-34 years. GERD per GDP (in %) was 5.87 in 2008, which was over 300% higher than the EU average and also 157% above the Finnish average. Pohjois-Suomi’s share of GERD (of GDP) was 4.12% in 2000 and has thus increased significantly by 2008. Simultaneously the rise in the EU was only 3.2%. Vast majority of R&D expenditure is spent by the business sector (over 80%), followed by the higher education institutes (14.3%) and by the government sector (5.4%). 9 In 2008 the business sector R&D expenditure of GDP (BERD) was very high (4.82%) in Pohjois-Suomi compared to both national (2.76%) and especially to EU27 average (1.21%). The figure 1.1 illustrates that the amount of innovative companies and their expenditure is significantly higher in Pohjois-Suomi than in other Finnish regions or in the European Union in general. Moreover, the trend has been increasing from 2000 to 2008, resulting in impressive growth of 53%. This indicates that research and development rests clearly on the private sector in Pohjois-Suomi and especially in the ICT sector in the Oulu

8 http://www.businessoulu.com/en/operating-environment/key-sectors.html 9 http://epp.eurostat.ec.europa.eu/portal/page/portal/science_technology_innovation/data/m ain_tables

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region. Until recently for instance Nokia has a R&D unit of a notable size in Oulu, which alone has raised the figure of private sector R&D. Nokia has by far been the biggest investor in R&D in Finland. The share of the population aged 30-34 years with tertiary education was 45.9 per cent in Finland in 2009, clearly outperforming (142.1%) the EU27 average. In Pohjois-Suomi the figure is somewhat lower (39%), although the figure has risen notably during the past ten years. The number of higher education institutions in the region (only two universities) is smaller compared to Western and Southern Finland, although the University of Oulu is among the largest HEIs with nearly 16,000 students. The importance of the University of Oulu for the Pohjois-Suomi region is reflected in the following figures: approximately 75% of the students are from the region and after graduation 66% of students find employment within the region. 10 In terms of patenting Pohjois-Suomi is among the successful regions in Finland mainly due to the companies operating in the Oulu region. For example a R&D unit of Nokia, other ICT companies and some innovative biotechnology companies contribute greatly. In 2007 the region had 201 EPO patent applications (per million inhabitants), although the figure has decreased from 2000 (254 applications). The amount of patent applications has fluctuated throughout the 2000s, yet remained quite stable with the annual average of 194 between 2000 and 2007. Pohjois-Suomi outperforms both national (188 applications per million inhabitants) and EU27 average (115 applications). In the category of product/process innovators Pohjois-Suomi performs clearly better (138.6%) than the EU27, but in marketing/organisational innovators (91.3%) falls behind the EU27.

Pohjois-Suomi (FI1A) Performance and change relave to EU ECONOMIC PERFORMANCE INDICATORS GDP per capita (PPP) GDP per capita growth Unemployment rate Change in unemployment rate

INNOVATION PERFORMANCE INDICATORS Terary educaon Government R&D expenditure Non-R&D innovaon exp. Patents per mln popoluaon Business R&D expenditure Higher educaon R&D expenditure Markeng/organisaonal innovators Product/process innovators

0 50 100 150 200 250 300 350 400 450

Figure 1-1 Economic and innovation performance indicators Source: Eurostat and Community Innovation Survey.

10 http://www.oulu.fi/yliopisto/tietoa

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1.3 Identified challenges

Challenge 1: Narrow industry focus on strategy and policy levels Pohjois-Suomi has had a strong industrial basis for decades which has been hit rather hard by globalisation. As a result, traditional industries such as forestry, metals and manufacturing have decreased in importance. There are other industries on which the future growth may be built on – especially tourism and services – not forgetting the vast natural resources. Until recently funding has remained targeted to the traditional fields and not encouraging R&D&I in the more future oriented industries. Challenge 2: Regional disparities as a challenge for balanced innovation policy Due to significant regional disparities in Pohjois-Suomi, it is challenging to develop the region as a whole. The three sub-regions are rather different. The city of Oulu is by far the largest municipality in Pohjois- Suomi with 141,000 inhabitants (and increasing) whereas there are approximately 183,000 people in the whole sub-region of Lapland. While the former figure is increasing, the latter decreases slowly. Moreover, Oulu is a known ICT-hub backed by several other industries and thus also attracts notable amount of both public and private sector funding, which is illustrated in the significantly higher GERD (Gross expenditure on R&D) compared to the EU27 average. The landscape for regional development is also quite different in the sub-regions. The private sector is much more active in Central and Northern Ostrobothia (especially in the Oulu region) in R&D than in Lapland where the companies are smaller and lack the culture of applying for funding and utilizing the support instruments provided by the public sector. This is also reflected in scarcity of smart specialisation towards the northern parts of the country. Challenge 3: Ageing and employment in low population density area Similar to another Finnish region (Itä-Suomi), ageing presents specific challenges for innovation and for the regional economy as a whole, but particularly to services in the public sector. The age structure requires that specific innovations need to be carried both in public and private services, especially in the health and wellbeing sector. The situation, however, is not similar throughout the region, one of the sub-regions having the youngest age structure in Finland. Simultaneously the current circumstances may provide an opportunity to focus on innovations related to the elderly. The need for innovation to find new solutions is further emphasised by the low population density in the region, which makes efficient service provision a challenge.

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2. Innovation Policy Governance

2.1 Degree of institutional autonomy The regional authorities have relatively little control over the general allocation of government funding. Regional councils have some independent funding in addition to Structural Funds (SF), but the regional Centres for Economic Development, Transport and the Environment (ELY-centres) mainly provide innovation support based on the funding that is allocated to them. Municipalities have great budgetary autonomy, but in practice much of their support for innovation is linked to co-financing of projects that are supported by ERDF, ESF and national programmes. Regions have a relatively high degree of autonomy in the design and implementation of regional policies. For example, the regional centres funded by the Centre of Expertise Programme (OSKE) design their own objectives and measures, as is also the case for the Regional Cohesion and Competitiveness Programme (COCO), where sub-regions plan their own goals and measures. In both programmes the plans are examined by the national coordinators to check that the general objectives are in line with the national objectives, but in practice there is a lot of autonomy both in terms of design and implementation. It is important to note that the Finnish governance system is a strong mix of national and local administration. The municipalities in Finland are relatively strong actors compared to many other countries and the bigger cities and towns in particular have been very active in local economic development and RTDI policy, often supporting development of local science and technology infrastructure. The biggest cities and towns, such as Kemi, Kokkola, Oulu, Raahe and Rovaniemi, all have active innovation-oriented economic development policies.

2.2 Institutional-set up, co-ordination and implementation mechanisms Innovation policies, strategies and actions in Pohjois-Suomi are guided and directed by the Finnish government, which decides on national development goals and lays down the general guidelines for regional innovation policy. In addition, the national policy decisions and measures aim at strengthening and extending the effectiveness of universities and polytechnics’ regional activities. The responsibility for preparing this package of measures rests with the Ministry of Employment and the Economy (MEE) and Ministry of Education and Culture (MOE). The national guidelines and measures form a general framework for all regions. From the national perspective the Centre of Expertise Programme is key part of the innovation policy. The general objectives of this programme are set in the national level but the actual regional objectives and measures are designed and implemented at the regions in the regional Centres of Expertise. Another support instrument - the

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Regional Cohesion and Competitiveness Programme - is also partly directed towards innovation policy. In terms of innovation policy there are no formal regional organisations covering Pohjois-Suomi. In the regional (NUTS 3) level, regional councils are responsible for regional programmes that also cover innovation policy to some extent. This task was given to the regional councils in the early 1990s and this has strengthened the role of the regional level in innovation policy, particularly with EU membership in 1995 and the introduction of structural funds (SF). The regional councils operate at the NUTS3 level. There are three regional councils in Pohjois-Suomi working in the sub-regions of Central Ostrobothnia, Lapland, and Northern Ostrobothnia. The regional programmes draw together various other planning instruments such as regional innovation strategies and strategies of individual organisations. Typical innovation policy measures are the development of key industry clusters and commercialisation of RTDI, innovation services and measures to improve the functioning of the innovation system. Regional councils are also mainly responsible for ERDF funds, which are increasingly directed to RTDI support. The role of structural funds as well as public funding in general has been very significant in Pohjois-Suomi. At the regional level the policies (including SF) are designed on one hand by the regional councils together with the Centres for Economic Development, Transport and the Environment (ELY-centres), which manage the regional implementation and development tasks of the state administration, and other stakeholders, especially the city governments, universities, technology centres and other intermediary organisations. Additionally horizontal coordination is carried out in the regional development programme processes coordinated by the regional councils in the individual regions and sub-regions of Pohjois-Suomi. Regional Centres of Expertise are coordinated by local science parks and technology centres that are responsible for initiating a range of innovation activities, in which research is combined with technological, design and business competence. The centres of expertise are also actively involving an innovation strategy in their own fields of expertise in the region. The centres of expertise are tightly linked with the local universities and polytechnics but also to the key industries in the region. The following Centres are located in Pohjois-Suomi: • Kokkola Region (Central Ostrobothnia) o Chemical industry o Other industries using chemicals, o Nanotechnology o Forest chemistry • Lapland o Tourism and experience industry o Content industry • Oulu Region o ICT o Environmental technology

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o Biotechnology o Welfare technology o Nanotechnology o Ubiquitious Computing • Raahe Region (Northern Ostrobothnia) o Metal technology The regional Centres of Expertise also participate in horizontal coordination of sector specific innovation policies by participating in national competence clusters. National competence clusters are network organisations in the National Centre of Expertise Programme, which comprises four to seven regional centres of expertise in the same sector around the country. In this way each regional centre is also networked nationally improving horizontal co-ordination and division of labour. The three sub-regions of Pohjois-Suomi are linked by several joint development themes, which include e.g. metal industry, forestry, engineering, leisure and tourism, welfare, and mining. Joint views of future activities are expressed in the Barents strategy (2009) and the industrial strategy of Lapland 2030 (2011) focusing on growing trade with Russia and better utilisation of natural resources. These strategies are implemented in regional development programmes and through joint projects of actors from different regions. There have also been efforts to develop a joint develop model for regional innovation policy in order to better respond to the future challenges (2009)11 Inter-regional cooperation takes place through the Multipolis network. The network is a registered association which is continuously developing its functions in northern Finland and Scandinavia. Multipolis consists of 19 centres of expertise (or poleis) focusing on different sectors of high technology. Knowhow of local centres is combined, resulting in competitive high-tech solutions. The magnitude and diversity of Multipolis allows competitiveness also at the international level. 12 Multi-level coordination is often carried out through various plans and strategies in different levels. For example national-regional links are used to ensure that regional strategies take into account the national plans. The Industrial Strategy of Lapland 2030 states that it “takes notice of the goals set for the development of Lapland” set out in the Regional Development Plan for Lapland 2030. However, it can be questions if the national policies take the regional needs into consideration. For instance the mining projects under progress are mostly run by foreign companies and there is a danger of the economic benefits escaping the Pohjois-Suomi region. Cross-border co-operation plays an important role in the region due to the various opportunities for growth in Russia. This is illustrated in

11 Ranta & Uitto, 2009 12 http://www.multipolis.com/index.php?179

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several organisations and sub-regions have cooperation across the border with Russia through various programmes (e.g. Interreg programmes). Horizontal co-ordination with innovation activities is mainly carried out through planning and strategies. Additionally to the above mentioned, intermediaries implement innovation policy in Pohjois-Suomi. They work closely and actively with the municipalities. Intermediary organisations in the region are the following: Digipolis in Kemi, Kokkola Technology Centre, Raahe region Technology Centre and Technopolis in Oulu as well as seven regional development organisations. The intermediary organisations representing the larger municipalities and city-regions tend to implement activities with a wider regional focus. The smaller development organisations may even hamper regional development, because they compete against one another leaving less room for networking and cooperation. There have only been a few changes in the institutional setup related to innovation policy recently. The establishment of regional ELY-Centres to co-ordinate the activities and policy measures of MEE in the regions has been an important recent change in the regional governance structure. Many national innovation services are provided by ELY- Centres. They are also responsible for regional foresight activities and participate in many local and regional planning processes. There are four ELY-Centres in Pohjois-Suomi. Prior to 1 January 2010 the ELY-Centres were known as the TE-Centres. The establishment of ELY-Centres form part of the government’s reform project for regional administration. The ELY-Centres provide the tasks and services of the former Employment and Economic Centres, Regional Environmental Centres, Road Districts, and State Provincial Offices’ departments for transport and communications and for education and culture. All in all, the innovation policy is delivered in Pohjois-Suomi through co-ordinated efforts by a broad network of several organisations including regional councils, municipalities, regional ELY-centres, higher education institutions and various intermediaries. Networked activities take place mostly at the regional (NUTS3) level and sub- regional level, where most of the strategies are designed and programmes are carried out. The innovation policy implementation includes the use of various funding mechanisms and development programmes such as ERDF, ESF, OSKE and COCO. Although these instruments focus on different aspects of innovation policy a lot of vertical and horizontal coordination is needed to avoid fragmentation in the system on one hand and overlapping of funding applications on the other.

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Figure 2-1 Management and implementation structure of regional innovation strategy

2.3 Availability and use of policy intelligence tools The regional policymaking as a collaborative process could be considered as a mix of evidence based policy making and negotiation processes. In practice this means that typically strategies and objectives are a result of co-operative planning processes by various stakeholders. The decisions are not always based on direct evidence, although previous evaluations and studies are considered. However, the decisions are based on various tools such as statistics, information provided by intermediaries and other forms of relevant data. In other words, the design of innovation policies is based on a variety of evidence provided by various organisations, but specific evidence based-methods are not always used in a consistent way. Evaluations are mostly carried out in the programme level through programme evaluations. In Pohjois-Suomi these mainly include the evaluation of ERDF-programme, the evaluation of the Centre of Expertise Programme and the evaluations regarding the COCO – programme. The ongoing national ERDF evaluation has a specific component that specifically assesses on “innovation and expertise”, and does look at each region (including Pohjois-Suomi) separately. The two national programmes have a more national focus in their approach. However, the evaluations also differentiate sub-regions in their results and in that way provide feedback. Other strategies and programmes are also evaluated in many cases but this activity is not consistent and depends on the region and activity.

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Foresight techniques are used especially by the regional organisations of the central government. The ELY-centres and Regional State Administrative Agencies compile monitoring and forecasting information linked to their operations. Such information is produced as part of normal operations, but also in various development projects. Part of this information (education, economy, and research) is linked with innovation policy and is used as tools in the strategy making processes. At the national level the Academy of Finland and Tekes, the Finnish funding Agency for Technology and Innovation, conducted jointly a foresight project called Finnsight 2015 in 2005-2006. The project viewed the factors of change in Finnish industries and society and identified challenges related to innovation and research activities. Attention was also paid to competences linked with science, technology, industries and society. 13

2.4 Key challenges and opportunities One of the key challenges is keeping the decision-making power and remaining institutions in the region. National policy, that steers regional policy, is formulated mainly in Helsinki (the Capital) and regional actors have marginal effect on the decision made on the national level although implementation takes place on regional or municipal levels. There is e.g. concern of the Ministry of Education and Culture decreasing the number of Universities of Applied Sciences due to the need of increasing productivity and effectiveness. The few HEIs are highly important for Pohjois-Suomi and especially for the sub- regions of Central Ostrobothnia and Lapland, because the former has no university at all and the latter only one. As a response to the lack of a University, a University Centre has been established to Kokkola. The Centre is an important part of the regional innovation system and also a vital link to research-based knowledge to the local companies. The Multipolis network is another platform for gathering scarce resources and building growth on existing assets. However, lack of R&D related skills and resources in companies still hinder growth in Pohjois-Suomi. Majority of companies are either micro or small, having scarce resources for R&D. And there is no support instrument addressing the challenge. This does not mean that the companies are not innovating, but their potential is not being utilised to the full extent. This relates to the curricula of higher education institutions in Pohjois- Suomi and especially in Lapland. The University of Lapland as well as the Universities of Applied Sciences focus more on education, health, well-being and the arctic dimension than responding to the needs arising from the companies, which have not been acknowledged adequately. The Proto-design project coordinated by

13 http://www.aka.fi/en-GB/A/Science-in-society/Foresight/FinnSight2015/

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the Lapland Vocational College illustrates increased recognition towards the requirements of the private sector from the public sector. Another challenge is the industrial heritage of Pohjois-Suomi. Funding remains targeted towards traditional industries instead of future growth fields. Utilisation of the stone and mining industry boom is an illustrative example of the contradiction between national and regional levels. The industry requires significant investments in the infrastructure, which cannot be covered solely on municipal level. The participation of government is necessary. Otherwise major parts of the benefits are gathered by the foreign companies operating the mines. Even though the regions is on one edge of Europe, is sparsely populated and is dominated by micro as well as small and medium sized enterprises, it also possesses several strength and opportunities for future. Small amount of actors in the regional innovation system allows closer interactions with the stakeholders. The scarcity of resources also forces individuals engaged with innovation activities to think outside the box resulting in novel ideas and creative models for operation (see the good practise case).

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3. Innovation Policy Instruments and Orientations

3.1 The regional innovation policy mix The region of Pohjois-Suomi supports research, technological development and innovation (RTDI) by moderate amount of measures. The region is more of a statistical unit instead of being a functional entity. Hence there are no regional RTDI policy documents in the regional level, which directly influence the development of the region. The main policy documents are either national (e.g. the national innovation strategy) or sub-regional documents (e.g. Towards a knowledge-based Northern Finland). This is reflected in the regional innovation policy mix, which mainly consists of measures covering the whole country instead of focusing on particular region. The EU Structural Funds (co-financed with the region) play an important part in the policy mix. Other important measures include the Centre of Expertise programme (OSKE) and Competitiveness and Cohesion programme (COCO). These measures are co-funded by the region. Because of its relative importance, funding provided by Tekes needs to be mentioned here also even though it is more of a national than a regional measure. Tekes funding for private and collaborative R&D is co-financed by the companies. The existing of portfolio of regional policy measures in support of innovation activities consists of the following instruments: • Measure 1.1 ERDF operational programme for Northern Finland 2007-201314; • Measure 2.1(Centre of Expertise Programme, 2007-2013)15 • Measure 3.1 (Cohesion and Competitiveness Programme)16 As shown in Error! Reference source not found.Error! Reference source not found., the ongoing innovation policies in Pohjois-Suomi focus especially on Governance & horizontal research and innovation policies and Creation and growth of innovative enterprises. Less emphasis is paid on research & technologies, human resources as well as markets and innovation culture in terms of innovation support measures.

14 http://www.rim-europa.eu/index.cfm?q=p.support&n=14779&r=FI1A 15 http://www.rim-europa.eu/index.cfm?q=p.support&n=13068&r=FI18 16 http://www.tem.fi/?l=en&s=3098

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Table 3-1 Overview of the regional innovation policy mix Governance Research Human Creation Markets & and Resources and growth and horizontal Technologies of innovation research innovative culture and enterprises

innovation policies • 1.3.2. Horizontal • 2.1.4. Research • 3.1.1. Job • 4.2.3. Support to ERDF measures in support infrastructures training (LLL) of technology transfer - operational of financing researchers and between firms other personnel 1.3.1. Cluster programme for • involved in framework innovation Northern policies Finland 2007- 2013 Centre of • 1.3.1. Cluster - - • 4.1.1. Support to - framework sectoral innovation expertise policies in manufacturing • Support to programme innovation in services • Support to technology transfer between firms Cohesion and • 1.3.1. Cluster - - • 4.1.1. Support to • 5.1.1. Support to framework sectoral innovation the creation of competitiveness policies in manufacturing favourable innovation climate • Support to programme innovation in services • Support to technology transfer between firms Source: Own assessment. The only policy document specific to Pohjois-Suomi is the ERDF Operational Programme 2007-2013. The programme covers some RTDI issues and pulls together various regional as well as national objectives related to RTDI. The innovation perspective is highlighted in the operation of the ERDF programmes, which have a broad approach to innovation by concentrating on horizontal governance of sub-regional policies, research and technology infrastructure as well as support for the creation and growth of innovative enterprises. In terms of governance measures, the ERDF operational programme for Pohjois-Suomi includes horizontal dimension in support of financing. ERDF measures focus on the promotion of innovation and networking and strengthening of knowledge structures. This is done by promoting the measures that are concerned with knowledge and innovations by strengthening the structures and knowledge clusters linked to them. Project financing includes support for cooperation and networking of innovation actors and SMEs, the improvement of the availability and efficiency of innovation services, the development of business incubators, the development of special knowledge of areas, the development of activities that support R&D, the development of electronic advisory and customer service systems and the utilisation of applied research.

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The main goals of priority axis 2 (Promotion of innovation and networking and strengthening of knowledge structures) are to develop innovation environments, to increase R&D, to support the development of support services to growth companies, to develop competitive centres of expertise, to contribute to networking, and to increase the utilisation of various funding instruments. The main indicators used to follow the progress of the programme are new companies established, new jobs created, the amount of R&D activities and new employment in R&D and research. The employment and unemployment rates are also being followed. Some key projects in the field of innovation involve the development of research facilities and training factories in the higher education institutes and the development of innovation networks around key technologies such as metal, surface materials, sensor technology and mining technology and battery technology. The budget for the priority area 2 is €232m for seven years (2007 -2013). Compared to southern and western parts of Finland the role of ERDF funding in the innovation policy mix is much more important in Pohjois-Suomi. It is estimated that almost 40% of the public innovation policy funding in Pohjois-Suomi comes from ERDF whereas in Etelä-Suomi the share is less than 10%. The main instrument for regional innovation support in terms of research and technologies is the Centre of Expertise programme (OSKE). The objective of the programme has been to create a strong network of centres of expertise supporting specialisation and cooperation between regions, and by so doing to increase regional competitiveness. In the period of 2007–2013 there exists 21 centres of expertise in Finland as well as 13 national networks (called clusters) linking various centres across the country. Each centre is a member of one or more expertise clusters and their Cluster Programmes. There are four Centres of Expertise in Pohjois-Suomi region. Although OSKE is a national programme, the activities of individual centres are designed and implemented at the regional level. A new regional cohesion and competitiveness programme (COCO) was launched in 2010 and the first period will run until 2013. The objective of the programme is to improve the competitiveness of all regions and to balance regional development by supporting interaction and networking. Innovation policy is one of the key focus areas. COCO will organise development activities in selected sub-regions and is co- financed by TEM and the municipalities. Like OSKE, COCO also follows a bottom-up approach with various sub-regions planning their own COCO-programme for four years. In the innovation policy mix the role of COCO is to concentrate on issues such as innovation culture, development of innovation support instruments etc. A total of eleven out of 52 COCO regions are located in Pohjois-Suomi The regional councils have their own funding instrument, and although relatively small, they provide funding for many projects that are related to innovation policy. For instance the Regional Council of Lapland launched in 2009 a project “Branch Manager for Mining and Stone Industry” to promote and coordinate the development of the mining

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and rock industry as well as the related infrastructure, logistics, work force, education, research and business networks-based operations. The project is a joint venture of the Council, the ELY-Centre and the Ministry of Employment and the Economy. 17 Tekes also allocates funding to the regions (Tekes funding can be considered both a national and regional level instrument) and it is somewhat problematic in terms of regional development. On one hand R&D funding provided by Tekes is among the most important instruments to the regions alongside ERDF and ESF funding. On the other hand Tekes funding is often channelled to industries that already are rather strong and to research conducted in universities (although a significant part of Tekes funding is channelled to SMEs). Regions lacking a university and strong industries/large enterprises (such as Central Ostrobothnia) have less means of accessing the funding. The regional development organisations also affect the regional innovation policy mix even though they do not provide funding. Instead they provide companies with specialist services related e.g. to innovation, business development, and development and quality of activities. The regional development organisations aim to detect the changes in the operating environment of businesses and to enhance internationalisation, marketing and business development. There are seven regional development organisations in Pohjois-Suomi: BusinessOulu Ltd., InLike Ltd., Kaustinen region business services, Kokkola region business services, NIHAK, Raahe region business services, and Rovaniemi Development Ltd.18

17 http://www.lapinliitto.fi/en/development/branch_manager 18 http://www.sekes.fi/

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Table 3-2 Existing regional innovation support measures Title Duration Policy priorities Budget Organisation More information responsible ERDF 2007-2013 • 1.3.2. Horizontal €292.6m Centre for Economic http://www.pohjois- operational measures in (Promotion of Development, suomi.fi/en/in- programme support of innovation Transport and the english.html for Northern financing activity and Environment of Finland 2007- • 4.2.3. Support to networking Northern Ostrobothnia 2013 technology transfer and between firms strengthening of skill structures) Centre of 2007-2013 • 1.3.1. Cluster €60.7m BusinessOulu Ltd., http://www.oske.net/en Expertise policies Lapland Centre of / programme • 4.1.1. Support to Expertise for the (OSKE) sectoral innovation Experience Industry, in manufacturing and Raahe Region • 4.1.2. Support to Technology Centre Ltd innovation in (RRTC) services Regional 2010-2013 • 1.3.1. Cluster The measure The Regional Council http://www.tem.fi/?l=en cohesion and policies does not have of Lapland, the &s=3098 competitivene • 4.1.1. Support to its own budget, Regional Council of ss programme sectoral innovation funding is Mid -Ostrobothnia, the (COCO) in manufacturing derived from Regional Council of • 4.1.2. Support to regional 18 Regional Innovation Monitor

innovation in development North -Ostrobothnia services funding. • 5.1.1. Support to the creation of favourable innovation climate Source: Regional Innovation Monitor repository

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The three most important regional innovation policy measures in Pohjois-Suomi are the following: 1. ERDF operational programme for Northern Finland 2007-2013 2. Centre of Expertise Programme 3. Regional cohesion and competitiveness programme (COCO) The ERDF operational programme for Northern Finland is the only regional support measure, while Centre of Expertise and Regional cohesion and competitiveness programmes are national, even though much of the priority setting and implementation takes place at the regional level.

3.2 Appraisal of regional innovation policies The appraisal of regional innovation policies in Pohjois-Suomi is somewhat complex since there is not much evidence available at the NUTS2 level. The only evaluation materials available are the ERDF programme evaluations and the mid-term evaluation of the Centre of Expertise programme. In the mid-term evaluation of the previous programming period it was estimated that around 9% of the ERDF projects had an impact on innovation activity and 5% on the development of regional expertise. According to these figures the impact of ERDF funding on innovation has not been very directly related to regional innovation policy. The mid-term thematic ERDF evaluation from the Priority area 2 (Promotion of innovation activity and networking and strengthening of skill structures) also emphasised the national results. Initial assessment for of the 2007-2013 ERDF programme in Pohjois-Suomi reveals that 253 out of 520 projects were in the priority axis 2: “Promotion of innovation and networking and strengthening of knowledge structures”. According to the operation programme around 37% of all public ERD funding was directed to this priority axis. More detailed results from the innovation policy expertise are expected in 2013. The role of the regional centres of expertise is quite important in connecting regional research and technological capabilities with the key industry sectors and regional industry clusters. The mid-term evaluation of the Centre of Expertise programme was conducted by Technical Research Centre VTT and published in 2010. The main objective of the evaluation was to assess the cluster-based operations model implemented in 2007. Based on the evaluation the cluster-based model has emphasised the national dimension of the programme allowing better utilisation of synergies and decreasing overlapping of duties in regions. The centres of expertise in Pohjois-Suomi have had a moderate impact in directing regional resources and knowledge capabilities, but this impact varies in different sub-regions. The relative importance of the regional centres of expertise also seems to be above the national average. 19

19 http://www.tem.fi/files/27402/TEM_44_2010_netti.pdf

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According to regional experts other key strengths - in addition to regional centres of expertise - are the regional development companies and technology centres (owned mostly by the municipalities). These organisations have a good knowledge of the local firms (particularly SMEs) and good networks to higher education organisations and financers. Especially the development organisations and networks in Oulu region have an important role. The challenge with these organisations is the local ownership, which sometimes makes larger regional measures difficult to implement. The importance of the ELY-Centres for companies and innovation related activities is especially high in Lapland and high as well in Central Ostrobothnia. The Centres provide essential support services towards new products, processes and services (e.g. preparation funding for SMEs for R&D projects or new, innovative businesses) and also present the starting-point for new entrepreneurs. Additionally there is a Tekes representative in each ELY-Centre guiding the companies in the process of applying for the Tekes funding. Active networking and a will to find complementary expertise from other organisations can be considered one of the strengths of the region. Networking is necessary in the higher education sector and especially in the sub-region of Central Ostrobothnia. The University Centre of Kokkola gathers the expertise of various higher education institutions in Finland (e.g. universities of Jyväskylä and Oulu and Technical University of Tampere) and injects it to the local companies through joint R&D projects. Moreover, the higher education institutions have also built cooperation with actors outside the region (e.g. the Aalto University). Given the challenges identified in the region (e.g. keeping decision- making power in the region, lack of R&D related skills and resources in companies and insufficient acknowledgement of industry needs), the current policy mix seems not be quite adequate. The problem in the region is not about the amount of project funding but about the lack of skills, capabilities and resources (time) towards R&D&I, especially among SMEs. The particularly promising industry (stone and mining) requires national level support. There also seems to be a need to further concentrate on the key sectors and build the capacities to increase the competitiveness of the sectors. In the selected sectors such as IC and bio technologies, the result of the innovation policy mix has been quite successful. When comparing the innovation policy mix to the innovation and economic performance indicators, it can be assessed that the innovation policy activities can be linked in some ways to the positive development in the higher education R&D, especially in the development of R&D infrastructure but also R&D activity. In the private sector, regional innovation policy has not had a significant impact on private sector R&D expenditure as a whole but at the same time the activation processes may have had an influence in the number of companies that perform innovation and in that way produce product and process innovations.

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Remark:

3.3 Good practice case In 2002 the education level of entrepreneurs in the wood processing industry was quite low and they often lacked the necessary resources for R&D. This did not prevent the SMEs from innovating, and the entrepreneurs would have wanted to be able to engage more in innovative activities. The Lapland Vocational College had been providing education and services for local industries and the staff was aware of the needs of the companies. Against this background it was decided to launch the Development of Operations Model for the Wood Competence Center in Lapland -project in 2002. The European Social Fund (ESF) –funded project aimed at creating a competence center around wood processing industry in Rovaniemi. The first step of the project was to benchmark similar centers elsewhere in Finland and some of them were struggling due to a lack of clients. Considerable amount of money and resources had been invested in the centers that were perhaps too specialized. Therefore it was decided to enlarge the industrial base to cater for more diverse group of companies. The second step was to create a network of institutions consisting of the Lapland Vocational College (leader), Rovaniemi University of Applied Sciences, Kemi-Tornio University of Applied Sciences, University of Lapland and Vocational College Lappia. Through the network SMEs can have access to competences related e.g. to prototyping, design, and services. The project has been a success and it was extended and re-named Proto-design. The development has been supported by European Social Fund, the Structural Funds and the Regional Development Fund. Proto- design has become well known among companies in Pohjois-Suomi and no marketing is needed. Even though the actual project has ended, the network and the operations model remain producing results for all stakeholders. SMEs consider a Vocational College easier to approach than a University. Moreover the network gives SMEs access to the competences of both the University of Rovaniemi and the two Universities of Applied Sciences allowing implementation of demanding R&D projects. Cooperation with companies has increased and the educational institutions are closer to the market than before. The college has modern equipment for educational purposes, which is now being used in its full capacity. Additionally the small revenue from the projects has allowed recruitment of new staff. Finally also the students are allowed to participate in the company R&D projects if no business secrets are involved. It is safe to say that the project has more than exceeded its initial goals and it illustrated how scarce resources can be combined resulting in added value for all stakeholders20.

20 More information (only in Finnish) is provided on the Internet pages of the Lapland Vocational College

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3.4 Portfolio of innovation support measures Several support measures have an effect on national level, but less on regional level in Pohjois-Suomi. The two most important ones are the COCO programme and the OSKE programme, which have already been presented in previous chapters. Another important measure is the Tekes programmes run by the Finnish Funding Agency for Technology and Innovation (Tekes). The programmes act as forums for the exchange of information and networking between businesses and research groups. They aim at providing opportunities for carrying out ambitious R&D projects and for developing business expertise and international cooperation. Moreover, the programmes provide a gateway to collaborating with the best research groups and innovative R&D companies in Finland. The programmes focus on strategically important areas of R&D that Tekes has identified together with the business sector and researchers. Each programme goes through a preparation period and not all programmes in preparation end up being executed. The average duration of a programmes ranges from four to six years and typically Tekes finances approximately half of the project costs while the other half comes from the participating businesses and research units. In 2008 Tekes introduced a new funding instrument for young, innovative growth oriented companies. The aim is to provide an opportunity for the most promising young companies to develop their businesses in a comprehensive way, as well as grow and internationalise their activities faster than in general. The general objective of the funding instrument is to increase the number and to accelerate the development of enterprises which are willing to grow fast and to get international. The company R&D is also supported by Finnvera plc, which is a specialised financing company owned by the State of Finland. Finnvera provides its clients with loans, guarantees, venture capital investments and export credit guarantees tailored to various stages of company development. Many of the guarantees are linked to ERDF programmes and therefore have a regional policy dimension. In addition to more traditional financial incentives, Finnvera also provides Microloans and Loans for Women Entrepreneurs targeting enterprises employing five people or less. The loan schemes for micro companies and female entrepreneurs were designed in the middle of 1990s when Finland was gradually starting to recover from severe economic downturn during the first part of the decade. The big challenge was to help cut unemployment and induce entrepreneurial activity. Since then, micro loans and loans for women entrepreneurs have been one of the tools to promote entrepreneurship

http://omat.lao.fi/?hanke_id=647&deptid=11181&languageid=3&NAYTA=2&showmodul. Information presented here is based on the project presentation on the aforementioned pages as well as on the interview of Pertti Lakkala (Industries Director, Lapland vocational College).

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by facilitating the access to debt finance and to promote self- employment. More research oriented organisation – the Academy of Finland – also has programmes which are used as tools to direct research and allocate research funding to fields that are considered of key importance in terms of science and society. The goal of the programmes is to advance a certain field of research and to create new scientific knowledge and knowhow by emphasising multidisciplinarity and transdisciplinarity as well as international cooperation. In 2011 the Academy of Finland provides funding through 10 research programmes. The funding is granted for at least four years and the decision to begin a new research programme rests with the Academy Board. Also relating to research, another measure is the ERA-NET funding scheme, which has been continued during the EU Seventh Framework Programme. The Academy has actively participated in capacities within ERA-NETs and been responsible for the preparation of such work related to the Academy’s own operations in Finland. The EU level funding has been very important for the development of Pohjois-Suomi. Two EU level support measures are actively being utilised: European Regional Development Fund (ERDF) and European Social Fund (ESF). While ERDF programmes are designed at the regional level, ESF is a national level programme in Finland. The relative share of Structural Funds, particularly ERDF, is bigger in Pohjois-Suomi than e.g. in Etelä-Suomi and Länsi-Suomi where national r&d funding is more prominent. Innovation policy related ERDF funding is also tightly connected with national policy instruments supporting regional innovation. Many of the projects and policy measure initiated by OSKE and COCO programmes are also connected to ERDF. A total of 23% of the ERDF Priority axis 2 funding was connected with COCO programme and its predecessor and 20% with OSKE programme. The ESF-programme focuses on projects concerned with internationalisation and competitiveness which develop knowledge and innovation systems, the working conditions and well-being of staff; and that develop innovation systems; promote networking; develop systems that facilitate the functioning of the labour market; and increase employment-related immigration and support the integration of immigrants. Efforts to boost innovation through tax-based mechanisms are relatively new in Finland and there have not been any significant policies affecting RTDI policies in Eastern Finland region.

3.5 Towards smart specialisation policies Pohjois-Suomi has struggled to shed the image of strong industrial heritage and steer development more towards innovation. Moreover, the division of the greater Pohjois-Suomi region to four administrative regions and the fact that municipalities (especially cities) have a great administrative autonomy has caused the development approach to be more fragmented if looking at the whole Pohjois-Suomi area.

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However, the efforts are starting to pay off and have resulted in the numerous new strategies targeting e.g. industry, tourism and travelling, creative industries, and energy. The Industrial Strategy for Lapland 2030 aims to build future growth on metal processing, energy, stone and mining industry, forestry and wood processing, as well as foodstuffs and organic food. The basis is on natural resources and the markets will be in the developing economies (e.g. China, India, Russia, South-Africa etc.) Other good examples of the recent progress are the Multipolis network and the Industry-based Barents strategy. The former utilises cooperation of centres of expertise focusing on different sectors of high technology to offer companies the best possible operating environment and boosts the competitiveness of northern Finland. R&D services of the network are cost-free for SMEs. The latter seeks growth from Russia by suggesting more active role for the Finnish government towards the Barents region, better coordination of activities in Finland, and development of the operating environments of SMEs. The various programmes targeting different aspects of innovation policy and different regions have further emphasised this. While OSKE can be seen as targeting towards smart specialisation in the more technology and research intensive fields, COCO and ERDF take a more broad based approach. The regional co-operative processes have aimed to smart specialisation in the regions, but as a result of the fragmented and multi-level nature of the regional innovation policy in Pohjois-Suomi, instead of one “big plan” there are several sub-regional strategies and plans with sectoral specialisation. There have been regional technology plans in the past designed together with Tekes, but their impact at the region has been rather modest. Educational institutions are involved in the processes and are therefore aware of the strategy focus areas. However, the focus areas of universities and polytechnics are also determined by the agreements with the Ministry of Education and Culture as well as their own strategies for education and research. In the past the educational institutions were not that focused or specialised and this caused challenges in funding applications. Nowadays the situation is much better and the HEIs apply for funding within the range of their own focus areas. This is reflected in the decreased competition among the HEIs and increased co-operation in European funding applications. All in all, the regional policy making processes in Pohjois-Suomi can be partly considered as following a smart specialisation strategy. However, the logic of the specialisation seems to be focusing on looking at the local strengths but less on global markets. Therefore it is difficult to say if the stakeholders in Pohjois-Suomi have actually considered how they should position themselves in the knowledge economy. The idea of smart specialisation starts from the assumption that in order to have a meaningful impact, R&D and innovation resources must reach a critical mass and need to be supported as much by targeted interventions in human resources and knowledge infrastructure. The logic in Pohjois-Suomi does follow this approach to some extent, but the

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existence of wider focus areas in Pohjois-Suomi with more detailed sub- regional focus areas may lead to situation where the scarce resources are scattered to too many specialised areas. With the low population and small number of companies in each specialised cluster the critical mass may be too difficult to achieve. This problem is partly addressed in the Centre of Expertise Programme, where regional centres in the same field around the country form networks, where they can increase division of labour and joint activity. At the regional level there have also been efforts to for networked clusters. However, since the innovation policy design and implementation is mainly carried out in the NUTS3 level regions, most of the activities still tend to be smaller scale and more local measures tend to dominate development efforts instead of putting an emphasis on larger development measures that would cover only few selected key areas in the whole Pohjois-Suomi region. The final consideration regarding the smart specialisation strategy is that whether Pohjois-Suomi region is the right level to pursue this kind of strategy at all. Since Finland is quite a small country, it may make more sense to pursue smart specialisation strategies at the national level and complement this with nationally networked but more local development strategies at the level of sub-regions (NUTS3) or city- regions. There are not any specific strategies related to smart specialisation thinking at the moment, although smart specialisation approach will be introduced in the forthcoming ERDF strategy in one form or the other. In Pohjois-Suomi the strongest potential for smart specialisation lies perhaps in various mobile applications in different sectors based on the expertise in information and communication technologies in the region.

3.6 Possible future orientations and opportunities Pohjois-Suomi is a relatively sparsely populated region representing 12% of Finland’s total population, with only one major city-region (Oulu), two Universities, four Universities of Applied Sciences and industrial structure dominated by micro and small enterprises especially in Lapland and few larger companies in the Oulu, Kemi- Tornio and Kokkola regions. Agriculture and natural resources are very strong in certain parts of the regions and the importance of stone and mining industry is on the increase. The region and especially the key city of Oulu have a distinctive concentration of R&D in telecommunications, electronics and some related industries. Moreover the region has some recent growth industries such as tourism and increasing activity in mining. The key expertise in these fields provides many new opportunities, particularly the application of information technology and mobile telecommunications solutions to various related sectors. The application of key expertise in new related areas is of utmost importance to the region especially when the recent trends in the

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mobile telecommunications have shown signs of decline and the key industry actor, Nokia, is reorganising its activities. The concept of smart specialisation may be of use in forming strategies to overcome the challenges in the core ICT industry and to exploit the opportunities to create various applications and services based on the strong expertise in the ICT sector. The scarcity of people is a challenge, but it also possesses opportunities for innovation. The public and private sector need to create novel approaches to provide basic services (schools, kinder gardens, health and wellbeing, transportation etc.) more efficiently by decreasing and ageing labour force. Moreover, new services are needed to cater for the needs of tourists and to attract new flows of tourists to the region. The existing policy mix with combination of Structural Funds, national and regional innovation policy measures as well as local economic development activities has been effective in building up the needed infrastructure in education, research and innovation as well as support for collaborative R&D activities for the key industries in the 10-15 years. However, there may be a need to readjust the focus somewhat to make better use of the existing strengths and better promote issues such as innovative growth SMEs, support for open innovation and service innovation.

Regional Innovation Monitor 27

Appendix A Bibliography

Academy of Finland. Finnsight 2015. http://www.aka.fi/en-GB/A/Science-in-society/Foresight/FinnSight2015/ Branch Manager for Mining and Stone Industry project. http://www.lapinliitto.fi/en/development/branch_manager BusinessOulu. Key sectors. http://www.businessoulu.com/en/operating-environment/key-sectors.html City of Oulu. Industries. http://www.ouka.fi/city/elinkeinot.asp ERDF Development Programme for Northern Finland 2007 -2013 Eurostat. Regional Statistics. Patent Applications to EPO by priority year. http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&language= en&pcode=tgs00040&plugin=1 Eurostat. Science, technology and innovation. http://epp.eurostat.ec.europa.eu/portal/page/portal/science_technology_in novation/data/main_tables Industry-based Barents Strategy, 2009. A report published as a part of an ERDF funded project to define the opportunities for future growth for Finnish companies in the Barents region in Russia. Mid-term evaluation of the Centre of Expertise programme. http://www.tem.fi/files/27402/TEM_44_2010_netti.pdf Regional Council of Lapland, 2011. Industrial Strategy of Lapland 2030. Ranta, T. & Uitto, A. 2009. Yhteiseltä areenalta globaaleille markkinoille – Pohjois-Pohjanmaan, Kainuun ja Lapin innovaatioympäristön yhteisöllinen toimintamalli. Tekesin katsaus 260/2009 Statistics Finland. Employment and unemployment in 2010. http://www.tilastokeskus.fi/til/tyti/2010/tyti_2010_2011-02- 15_tie_001_fi.html Statistics Finland. Population. http://www.tilastokeskus.fi/tup/suoluk/suoluk_vaesto.html#bruttokansantu ote University of Oulu. http://www.oulu.fi/yliopisto/tietoa

28 Regional Innovation Monitor

Appendix B Stakeholders consulted

1. Ilkka Yliniemi, Development Director, Council of Oulu Region (1 November 2011). 2. Suvi Ronkainen, Vice Rector, University of Lapland (3 November 2011). 3. Olli Pohjonen, Senior Advisor, Regional Council of Lapland (3 November 2011). 4. Kaj Lyyski, Development Director, Regional Council of Central Ostrobothnia (8 November 2011).

Regional Innovation Monitor 29

Appendix C RIM Repository information

30 Regional Innovation Monitor Baseline regional profile

SUOMI / FINLAND MANNER-SUOMI Region North Finland NUTS Code FI1A

Regional Profile

Introduction

Pohjois-Suomi is located in the northern part of Finland. The region covers the northernmost part of the Baltic Sea area and Lapland and has good connections to Northern parts of Sweden, Norway and Russia. Approximately one-tenth of the population and the economic activity of Finland are concentrated in the Pohjois-Suomi region. The sixth largest city in Finland - Oulu - contrasts the wilderness of Lapland. In Pohjois-Suomi innovation is much concentrated on innovation in the ICT sector around Oulu city-region. The challenge is to broaden the innovation activity to other sectors.

Repository

Support measures Branch Manager for Mining and Stone Industry project ERDF operational programme for Northern Finland 2007-2013 Policy documents Towards a knowledge-based northern Finland - building regional cooperation at tertiary level Open North Finland Industry based Barents strategy ERDF operational programme for Northern Finland Oulu inspires - Innovation Strategy 2007 - 2013 Organisations Regional Council of Lapland Kemi-Tornio University of Applied Sciences Centre for Economic Development, Transport and the Environment of Pohjois-Pohjanmaa Council of Oulu Region Oulu Innovation Ltd The University of Oulu

Economy

Pohjois-Suomi region covers three regional authority NUTS III areas (Keski-Pohjanmaa, Pohjois-Pohjanmaa and Lappi). The region is sparsely populated .It accounts for 12% of the national territory and 12% of the country's total population with the population of 640,000. The region covers both rural areas but also several small and medium sized cities with high level of economic activity. The regional GDP (PPS) was €16.2b in 2007, which accounts for about 10% of Finnish national GDP. Regional GDP per capita reached €25,500, which is 87% of the Finnish average and 102% of the EU average (Eurostat, 2010). The average annual real growth rate of GDP in Pohjois-Suomi between 2000 and 2007 amounted to 4.3 % p.a., which is well above the GDP growth in Finland (3.46%) (Eurostat, 2010). The industry structure in Pohjois-Suomi is generally quite similar to the national average. The share of employment in services (102%) is slightly above EU average. However, the role of public administration (121%) is quite string in the region. In absolute numbers over 11% of the people employed in the industry sector in Finland live in Pohjois-Suomi. Person employed in business services was 12.1% in 2006 (Eurostat, 2009). The share of industry jobs (26.4%) is slightly less than the EU-27 average of 28.0%. The share of agriculture (7.9%), however, is higher than in the EU (6.5%). All in all Pohjois-Suomi is the region of opposites with strong concentration of high-tech manufacturing in the Oulu city-region but at the same time a strong role of agriculture and forestry as well as tourism in most of the other parts of the region. Unemployment in Pohjois-Suomi is above average by European standards: the unemployment rate of 8.4% in 2008 was above both the EU-27 (7.0%) and national average (6.4%) rate. The recent recession has increased unemployment in Finland and Pohjois-Suomi has suffered a bit more than the average. From 2008 to 2009, unemployment rose 1.8% in the region compared with 1.4% in Finland ( Statistics Finland, 2010)

Research, Development & Innovation

Pohjois-Suomi has a very high expenditure for R&D as a percentage of GDP (GERD) in a European comparison. With a GERD of 5.38% of GDP (2007) investment in R&D is slightly above the national (3.48%), and clearly above the EU-27 (1.85%). The R&D activity is also heavily concentrated around the city of Oulu in the Pohjois-Pohjanmaa NUTS3 region. In absolute terms the region achieved a GERD of €1.0b (2007), which accounts for 16% of the Finnish GERD (Eurostat). Compared with the national average growth rate between 2000 and 2007 (5.7%), the growth of R&D expenditure in Pohjois-Suomi (8.8%) was clearly higher. In terms of R&D expenditure by sector of activity, 80% is spent by the business sector, 14% by the higher education institutes and 5% by the government sector (Eurostat, 2009). Compared to the EU-27 average, Pohjois-Suomi also shows higher R&D expenditure in the business sector. This is also true in comparison with Finland. A significant amount of public funding is directed to R&D activities. However, the increase in public R&D funding has not been able to keep up with the growth of R&D expenditure in the private sector. Pohjois-Suomi hosts a total of two universities and four polytechnics with high levels of research capacity. The region also hosts many public and private research institutes. Finland has also 20 government R&D institutes in eight policy sectors, with many of them having some activity also in Pohjois-Suomi. The share of human resources in science and technology as % of active population was 42.1%, which was lower than the Finnish average of 50.1% but higher than the EU-27 average of 39.8%. Pohjois-Suomi region has a relatively high level of patenting activity. Between 2000 and 2004 the EPO filings per thousand inhabitants was 0.19 in Pohjois-Suomi, which was almost two-times the EU-27 average of 0.11. The most important technological fields were ICT and electrical engineering.

Governance

Finland has a nationally centred governance system, which also includes innovation policy. Various related policy areas such as the legislation, taxation and education are also mainly decided at the national level. The primary responsible bodies for research and innovation policy are the Ministry of Employment and the Economy (TEM) and the Ministry of Education and Culture (OKM). OKM is responsible for Education, Training, Science policy, Higher Education Institutions and the Academy of Finland. TEM is responsible for the development, implementation and success of innovation policy in Finland. Regional innovation is promoted by TEM through innovation policy and regional development measures. The measures include the development of innovation environments, regional innovation and promotion of growth entrepreneurship policy. The main tools for the development of innovation are the Centre of Expertise Programme (OSKE) and the Cohesion and Competitiveness Programme (KOKO). The primary public agencies supporting and directing innovation activities are Tekes (support for applied research and industrial RTDI) and the 15 regional Centres for Economic Development, Transport and the Environment (ELY-centres), three of which are either wholly or partly located in Pohjois-Suomi. There are no formal regional organisations covering the whole Pohjois-Suomi related to innovation policy. In the regional (NUTS 3) level, regional councils are responsible for regional programmes that also cover innovation policy to some extent. The regional programmes draw together various other planning instruments like regional innovation strategies and strategies of individual organisations. Typical innovation policy measures are the development of key industry clusters and commercialisation of RTDI, innovation services and measures to improve the functioning of the innovation system. Regional councils are also mainly responsible for ERDF funds, which are increasingly directed to RTDI support. Compared to other Finnish regions the role of SF has been quite extensive in Pohjois-Suomi. The municipalities and particularly the bigger cities and city-regions have had a very active role in local economic development and innovation policy, often related to support in building local science and technology.

Policy

Since Pohjois-Suomi region is basically a statistical unit instead of being a functional entity, there are no regional RTDI policy documents in the regional level, which directly influence the development of the region. The main policy documents are either national (e.g. the national innovation strategy) or sub-regional documents (e.g. Oulu Innovation Strategy). The only recent document specific to Pohjois-Suomi is the ERDF Operational Programme 2007-2013, which also covers some RTDI issues and pulls together various regional as well as national objectives related to RTDI. The main instrument for regional innovation support is the Centre of Expertise programme (OSKE). The objective of the programme has been to create a strong network of centres of expertise supporting specialisation and cooperation between regions, and by so doing to increase regional competitiveness. In the period of 2007-2013 there exists 21 centres of expertise in Finland as well as 13 national networks (called clusters) linking various centres across the country. Each centre is a member of one or more expertise clusters and their Cluster Programmes. There are four Centres of Expertise in Pohjois-Suomi region. A new regional cohesion and competitiveness programme (KOKO) was launched in 2010 and the first period will run until 2013. The objective of the programme is to improve the competitiveness of all regions and to balance regional development by supporting interaction and networking. Innovation policy is one of the key focus areas. KOKO will organise development activities in selected sub-regions and is co-financed by TEM and the municipalities. The local level especially in the city-regions has been quite active in innovation policy. In the Oulu metropolitan area, which is the main concentration of economic and RTDI activity, there has been a recent development towards more coherent local innovation policy. Some hot innovation/RTDI policy topics in Pohjois-Suomi include policies to support the development of innovation environments, support for internationalization, the development of business skills and business services to support high tech businesses as well as better utilization of arctic climate as a source of innovation and new business activity. Support measure

SUOMI / FINLAND MANNER-SUOMI Region Pohjois-Suomi NUTS Code FI1A

Support Measure

Title of measure Branch Manager for Mining and Stone Industry project

Full title

Kaivos- ja kivialan toimialapäällikkö -hanke

Duration

From: 2009 To: 2012 Policy objectives 1.1.2. Activities of official advisory and consultative forum 1.2.1. Strategic Research policies 2.2.2. Knowledge Transfer

Presentation of the measure

The project originates from a policy recommendation devised by a workgroup set by the Ministry of Trade and Industry (nowadays the Ministry of Employment and the Economy, MEE) to examine the operational preconditions of the extractive industry. The Ministry recommended hiring of an extractive industry specialist in the Centres for Economic Development, Transport, and the Environment. The recommendation was based on the extensive resources of precious metal and mineral wealth in Lapland. Additionally the mining and rock processing industries are extremely important in the Finnish regions of Lapland, Kainuu, Ostrobothnia, and North Karelia, in terms of both livelihood and regional policy. The Branch Manager for Mining and Stone Industry project was initiated in 2009 as a joint venture between the Regional Council of Lapland, the former Employment and Economic Centre of Lapland (currently known as the Centres for Economic Development, Transport, and the Environment), and the MEE. The project period is from 1 June 6 2009 to 31 July 2012. The Branch Manager for Mining and Stone Industry operates in the Regional Council of Lapland, which is also the organisation in charge of the implementation of the project. The central objective of the project is to promote and coordinate the development of the mining and rock industry as well as the related infrastructure, logistics, work force, education, research and business networks-based operations. The tasks of the Branch Manager for Mining and Stone Industry include e.g. coordination of the development operations and strengthening of the mining cluster, comments on funding, industry reports as well as expert tasks and participation in workshops related to planning, project and land use operations.

Keywords Keywords

Cluster Budget, source and type of funding Form of funding provided Other Policy learning

Extent to which the measure can be considered as a success and worthy of policy learning

It is too early to judge the success of the measure (e.g results of first call for proposals still not known).

Evidence of outcomes based on evaluation and other evidence

It is too early to tell of the outcomes.

Do's and Don'ts

It is too early to point out any "do's and don'ts"

This measure is recommended as an example of regional good practice to policy-makers from other regions:

No Organisation(s) responsible Regional Council of Lapland

Support measure

SUOMI / FINLAND MANNER-SUOMI Region Pohjois-Suomi NUTS Code FI1A

Support Measure

Title of measure ERDF operational programme for Northern Finland 2007-2013

Full title

Pohjois-Suomen EAKR-toimenpideohjelma 2007-2013 Duration

From: 2007 To: 2013 Policy objectives 1.3.2. Horizontal measures in support of financing 4.2.3. Support to technology transfer between firms

Presentation of the measure

Northern Finland has traditionally been a priority area for ERDF funding due to low population density, long distances and large border regions. The innovation perspective is highlighted in the operation of the ERDF programmes by focusing on promotion of innovation and networking and strengthening of knowledge structures. This is done by promoting the measures that are concerned with knowledge and innovations by strengthening the structures and knowledge clusters linked to them. Project financing includes support for cooperation and networking of innovation actors and SMEs, the improvement of the availability and efficiency of innovation services, the development of business incubators, the development of special knowledge of areas, the development of activities that support R&D, the development of electronic advisory and customer service systems and the utilisation of applied research. The main goals of priority axis 2 (Promotion of innovation and networking and strengthening of knowledge structures) are to develop innovation environments, to increase R&D, to support the development of support services to growth companies, to develop competitive centres of expertise, to contribute to networking, and to increase the utilisation of various funding instruments. The key projects have been directed to the development of R&D capabilities in educational institutions and technology centres by establishing new labs and upgrading existing ones e.g. in the field of material technology, production technology and design.

Keywords

Incubators/science parks Small and medium-sized enterprises Early stage-financing Budget, source and type of funding Currency: EUR

Source of 2007 2008 2009 2010 2011 2012 2013 funding National public 34,062,176 34,062,176 34,062,176 34,062,176 34,062,176 34,062,176 34,062,176 funds Regional public 10,405,416 10,405,416 10,405,416 10,405,416 10,405,416 10,405,416 10,405,416 funds EU Structural 44,467,593 44,467,593 44,467,593 44,467,593 44,467,593 44,467,593 44,467,593 funds Private funds 68,580,690 68,580,690 68,580,690 68,580,690 68,580,690 68,580,690 68,580,690 Other Form of funding provided Grants Policy learning

Extent to which the measure can be considered as a success and worthy of policy learning

There has been a positive response by beneficiaries to the measure (e.g. over-subscribed in terms of requested versus available budget) but it is too early to judge results or impact

Evidence of outcomes based on evaluation and other evidence

The evaluation committee of the ERDF operational programme for Northern Finland has assessed the progress of the programme so far. Simultaneously the preparations are underway for the next programme period to begin in 2014. By spring 2011 ERDF supported development activities and investments have been started by 800 million Euros. Public funding accounted for 420 million Euros and private funds 380 million. For the whole programme period (2007 -2013) the regions of Northern Finland have been allocated 622 million Euros of public funding. The budget of the programme (including private funding) is 1.102 billion Euros. The ERDF funding has been especially used for ensuring that the structures and the competitiveness of Northern Finland are on a sound basis in the future. Notable amount of funding has been directed to companies' development and investment projects used to support the innovative and growth oriented micro, small and medium sized companies in the region. The ERDF funding has also significantly impacted on creation of new innovation and R&D environments and on strengthening of the existing ones. New significant environments have been created around various industries e.g. chemistry, environment, stone and mining, electronics, information and communication as well as travel. Additionally the so called creative industries and well-being have a role to play in the ERDF operational programme. The ERDF also add value by igniting investments that have large significance in terms of increasing the competitiveness of the region and the whole EU. As an example can be mentioned investments in airports and harbours, environmental actions, telecom and travel destinations. The funding has also been utilized in decreasing the effects of sudden structural changes.

Do's and Don'ts

Primarily, the institution managing such instruments should monitor closely the implementation to maximise the impact and ensure sustainability of projects that obtained support. What should be avoided above all is a lack of co-operation between measures operating in the region and other instruments.

This measure is recommended as an example of regional good practice to policy-makers from other regions:

Yes Organisation(s) responsible Centre for Economic Development, Transport and the Environment of Pohjois-Pohjanmaa

Policy document SUOMI / FINLAND MANNER-SUOMI Region Pohjois-Suomi NUTS Code FI1A

Policy Document

Towards a knowledge-based northern Finland - building regional cooperation at tertiary level Osaava Pohjois-Suomi - korkeakoulujen alueellisen yhteistyön päälinjaukset

Organisation responsible

The University of Oulu

Other organisation(s) involved

Kemi-Tornio University of Applied Sciences Content

The success of regions depends on competences, specialisation and networks. The further development and intensifying of cooperation between institutions of higher education in northern Finland is at the core of this strategy paper. The aim is to work towards a comprehensive model of outreach activities by universities and polytechnics providing top-quality tertiary level educational services flexibly and equally to citizens and businesses throughout the region. The most important areas of activities include adult education, promotion of innovation and entrepreneurship in the region, and the creative use of ICT. Additionally the universities and polytechnics aim to intensify educational provision and cooperation regarding basic degree programmes, put into place regional forecasting and evaluation processes as well as pay attention to knowledge management. A major aim of all parties is to achieve an increase in research and innovation activities in northern Finland by lowering the boundaries between regions and increasing joint actions.

Year of publication

2005

Link to website

Link: http://www.oamk.fi/~iskinnun/asiakirjat/Osaava_Pohjois-Suomi ...

Policy document

SUOMI / FINLAND MANNER-SUOMI Region Pohjois-Suomi NUTS Code FI1A

Policy Document

Open North Finland Avoin Pohjois-Suomi

Organisation responsible

Council of Oulu Region Content

The strategy for open North Finland was created in 2007. The aim of the strategy was to highlight the importance and necessity of regional policy for national wellbeing and development. Functional and successful regional policy was considered a possibility to increase national resources. The region of North Finland was thought to be especially important due to its vast natural resources, the notable amount of basic industry, its location (close to large energy resources in Russia) and unique nature. The main message of the strategy is being open. Only open and cooperative North Finland will be successful. This means welcoming new companies, corporations and individuals to the regions also from abroad. Openness relates also to the development of knowledge society. Knowledge society is the only option for North Finland. Other aspects in the strategy focus on building growth on wood, paper and steel, attracting tourists, enhancing the cooperation in the Barents area, strengthening of skills and competences as well as increasing the operating requirements of the companies for instance by better logistics. Several recommendations are laid based on these themes.

Year of publication

2007

Link to website

Link: http://www.pohjois-pohjanmaa.fi/file.php?1138

Policy document

SUOMI / FINLAND MANNER-SUOMI Region Pohjois-Suomi NUTS Code FI1A Policy Document

Industry based Barents strategy Elinkeinopainotteinen Barents-trategia

Organisation responsible

Council of Oulu Region Content

Russia is one of Finland's most important trade partners. So far the focus has been on trade related to Moscow and St. Petersburg regions and only little attention has been paid to the Barents regions eventhoug it possesses great potential due to its vast energy resources in Russia. Almost four million people live in the Barents region making it a notable market for Finnish companies. Therefore the strategy consists of several strategic objectives, which are expected to improve the situation. The first objective is to connect the Finnish state level authorities with the most important actors within the Barents region. The second relates to the coordination of the Barents region activities in Finland. The third aims at increasing Finland's visibility and recognition in Barents. The fourth focuses on enhancing and developing the transportation links between Northern Finland and the Barents region in Russia. Development of operations of SMEs is the fifth strategic objective of the strategy. The implementation of the strategy calls for increase funding, which will be derived from various fiscal sources (ministries, regional councils, cities and municipalities).

Year of publication

2009

Link to website

Link: http://www.ouka.fi/elinkeino/barents/BarentsStrategia.pdf

Policy document

SUOMI / FINLAND MANNER-SUOMI Region Pohjois-Suomi NUTS Code FI1A

Policy Document

ERDF operational programme for Northern Finland Pohjois-Suomen EAKR-toimenpideohjelma 2007–2013 Organisation responsible

Council of Oulu Region

Other organisation(s) involved

Oulu Innovation Ltd Content

The Northern Finland programme covers three regions: Central Ostrobothnia, Lapland and North Ostrobothnia. Northern Finland accounts for 44% of the total area of Finland and 12% of its population. At the end of 2006 the population was 636,275. It is around 800 kilometres by road from its southernmost to its northernmost point. The objective of ERDF operational programme for Northern Finland is to improve the region's opportunities to strengthen its position in international and national competition, and to respond to the structural change of business and industry. In addition, the programme will contribute to managing the future demographic change and the regional differentiation of the population. The objective of the projects in Northern Finland is to create 11 000 new jobs and 1 500 new companies. The total financing of the ERDF programme for Northern Finland is estimated to be over €1b.

Year of publication

2007

Link to website

Link: http://www.rakennerahastot.fi/rakennerahastot/tiedostot/esit ...

Policy document

SUOMI / FINLAND MANNER-SUOMI Region Pohjois-Suomi NUTS Code FI1A

Policy Document

Oulu inspires - Innovation Strategy 2007 - 2013 Oulu inspiroi - innovaatiostrategia 2007 -2013

Organisation responsible

Oulu Innovation Ltd Content The Oulu Inspires Innovation Strategy 2007-2013 draws the attention to and emphasizes the importance of human enthusiasm as a source of innovation. Enthusiasm springing from a working environment of inspired individuals enables renewal as well as success in global competition. The Oulu region has a sufficient number of businesses with a high aspiration level, to which strategic resources will be allocated. New business opportunities are discovered by matching local competencies and business domains with the potential of the global market. All business branches are potential innovation domains. To help cultivate ideas into innovation, businesses are provided with the access to professional facilitation. Innovation activities have to be internationally networked and services become an increasingly important part of economic growth. The central message of the strategy is the novel, inspired goal of the actors: by combining resources, it enables Oulu to strengthen its leading position in the next wave of development.

Year of publication

2007

Link to website

Link: http://www.ouluinspiroi.fi/english/strategy/index.htm

Organisation

SUOMI / FINLAND MANNER-SUOMI Region Pohjois-Suomi NUTS Code FI1A

Organisation

Regional Council of Lapland Lapin liitto Link: http://www.lapinliitto.fi/en Hallituskatu 20 B Rovaniemi, FI-96100 Mission The mission of the Council is to operate for the good of the region, its municipalities and inhabitants in all issues regarding development, planning, research and the representation of interests in the region. This has been stated in the treaty of the Regional Council of Lapland. The Council is also responsible for the regional development of the area and the regional land use planning. Differing from other regional councils in Finland, Lapland's Council is also in charge of the regional safety and rescue operations. Activities The following tasks have been assigned for the Council: Encouraging and protecting the common interests of the region and its municipalities as well as promoting the mental and material prosperity in the region together with developing the municipal, social and health-related, cultural, educational, environmental, and economic issues of the region, in cooperation with the municipalities. Performing the regional land use and development planning tasks of joint municipal boards as stipulated in the Land Use and Building Act (Maankäyttö- ja rakennuslaki), no. 132 of 1999. Performing tasks of the statutory regional development authority in accordance with the Finnish legislation on regional policies. Arranging the regional rescue services as stipulated by the Finnish Act on Formation of the Rescue Service Regions (Laki pelastustoimen alueiden muodostamisesta) no. 1214 of 2001. Performing any other statutory tasks that are based on the Finnish legislation.

Organisation

SUOMI / FINLAND MANNER-SUOMI Region Pohjois-Suomi NUTS Code FI1A

Organisation

Kemi-Tornio University of Applied Sciences Kemi-Tornion Ammattikorkeakoulu Link: http://www.tokem.fi Kauppakatu 29 Tornio, 95400 Mission Kemi-Tornio University of Applied Sciences (TOKEM) was established in 1992. Currently there are altogether 2600 students and the staff of approximately 220 persons studying e.g. modern technology and know-how in eLearning and co-operation with the business and working life both in Finland and abroad. TOKEM's mission is to be a competent educator and developer, which actively builds Lapland's future in a customer-oriented fashion, participating in the development of the province; educates experts in welfare, business, technology and culture, utilizing the latest technology, and conducts research and development that promotes the economic life and welfare of the region. The strategic environments of expertise include industrial Lapland, Lapland of Wellbeing, Lapland of Experiments and Culture and Lapland of Business and Entrepreneurship. TOKEM also pays attention to internationalization, which is involved in all operations. The focus of development is on English language programmes. Activities Kemi-Tornio University of Applied Sciences (TOKEM) considers its most important task to be the training of entrepreneurially spirited, highly skilled people, who understand the conditions and possibilities of the North. TOKEM provides education for young people and adults leading to a Bachelor's degree in the fields of business and administration, information communication technology, culture, technology and engineering as well as health care and social services. In addition TOKEM education is available in degree programmes aiming at a Master's degree in the fields of business administration, technology and engineering and health care and social services. The University of Applied Sciences has developed a broad and active network for international co-operation opening up opportunities for students to complete part of their Bachelor's theses and practical training abroad. Education is also provided for the incoming exchange students of its partner institutions. TOKEM supports the development of students' personal professional skills with versatile teaching methods as well as independent study through supportive guidance. Being a rather small unit is considered an advantage to the students: they get to know their teachers and tutors well and the other way around. The operations of Research and Development department are especially targeted to focus areas including the Nordic Countries and the neighbouring North Calotte Area, as well as the familiar collaboration area of European Union countries, but on a wider scale than previously. Resources are also aimed at cooperation with Russia and particularly with the Barents region.

Organisation

SUOMI / FINLAND MANNER-SUOMI Region Pohjois-Suomi NUTS Code FI1A

Organisation

Centre for Economic Development, Transport and the Environment of Pohjois-Pohjanmaa Pohjois-Pohjanmaan ELY-keskus Link: http://www.ely-keskus.fi/fi/ELYkeskukset/pohjoispohjanmaanely/Sivut/default.aspx Veteraanikatu 1 Oulu, FI-90130 Mission Centres for Economic Development, Transport and the Environment started operating on January 1 st, 2010. There are 15 of them in Finland. The Centres are responsible for economic development, labour force, competence and cultural activities, transport and infrastructure, the environment and natural resources. Activities The tasks of the Centres comprise those of the former Employment and Economic Centres, Road Districts, Regional Environmental Centres and State Provincial Offices. The Centres operate in close collaboration with the Regional Councils. The Centres foster regional development by implementing and developing government activities in the regions. The innovation activities comprise of implementing the national innovation strategy through the activities and measures of the centre. Providing Technology Experts in the centres bring Tekes funding and expert services as well as international research and development, and networks to customers in the regions. Experts help businesses and research organisations to launch national and international research and development projects. Innovation liaison officers serve companies and private individuals in IPR related issues. Related to innovation, ELY-centres are responsible for vocational training and adult vocational training planning and monitoring in their regions.

Organisation

SUOMI / FINLAND MANNER-SUOMI Region Pohjois-Suomi NUTS Code FI1A

Organisation

Council of Oulu Region Pohjois-Pohjanmaan liitto Link: http://www.pohjois-pohjanmaa.fi/index.php?1100 Kauppurienkatu 8 A Oulu, FI-90100 Mission According to its vision, the Council of Oulu Region is "a nationally visible force and an inspirational leader within the province´. The work of the regional council is intersectoral; it cooperates between different administrative sectors, organizations, business life and inhabitants. It outlines regional development targets, key projects and measures through the regional planning system that consists of the regional development plan, the regional strategic programme and the regional land use plan are. In Europe the Council of Oulu region is represented via North Finland EU Office in Brussels. Activities The Council of Oulu Region is regional, politically guided, municipal coalition for the development and interest supervision in the county. It is responsible for regional planning and general coordination of regional development programs related to national and EU structural funds. The Council oversees the interests of the people, municipalities, organizations and enterprises and speaks on their behalf regarding both national and international questions.The highest decision-making body of regional administration is the Regional Council Assembly, which is elected by a meeting of delegates from the member local authorities. Executive functions are carried out by the Administrative Board, which is elected by the Assembly. This system of elected representatives ensures that the inhabitants and local authorities have their own say on regional issues and decision-making.

Organisation

SUOMI / FINLAND MANNER-SUOMI Region Pohjois-Suomi NUTS Code FI1A

Organisation

Oulu Innovation Ltd Oulu Innovation Oy Link: http://www.ouluinnovation.com/index.php?96 Elektroniikkatie 3 Oulu, FI-90590 Mission Oulu Innovation Ltd is a non-profit development company which focuses on regional economic development in the high technology and high growth business sector in the Oulu region. Its main task is to support enterprises and to strengthen their competitiveness in the global markets. Oulu Innovation promotes the competitiveness of cutting-edge business expertise in the Oulu region as well as increases the region´s attractiveness as an operating environment for skills and business development. According to its vision, Oulu Innovation is the leading national organiser and coordinator of innovation networks in chosen fields of knowledge-based industry, an attractive partner in international co-operation and the main builder and manager of innovation-based business development network. The main shareholders of Oulu Innovation are the City of Oulu and Technopolis Plc. Activities Oulu Innovation Ltd promotes the attractiveness of the region, develops the operating environment of the enterprises and provides strategic leadership in developing the economic environment in the region. The company is also responsible for the implementation of the region´s innovation strategy, the Oulu Region Centre of Expertise programme and Invest in Oulu services. The company provides enterprises services as well as the skills and connections of the stakeholder and partner network. At the moment there are six ongoing projects. For instance the Global Clusters project concentrates on international marketing and on obtaining growth funding. The program provides management with concrete tools and best practices with which to recognize the company's special competitive advantages, markets for profitable and sustainable growth, best financial strategies and the right team for success. The program is intended for those companies pursuing strong growth in international markets, particularly ICT, BioTech, Wellness and CleanTech companies looking for rapid growth. In addition to carrying out development programmes and projects, Oulu Innovation supports the enterprises´ success by providing a variety of services such as needs assessments, communications, networks, consultation (enterprises and other network members are provided with a diverse range of support tools) and financing (finding new financing instruments for enterprises and development measures). One of Oulu Innovation´s most essential tasks is to build and maintain both national and international networks between enterprises and other stakeholders. The networks facilitate the enterprises entering into new markets as well as bringing them more customers and co-operation partners.

Organisation

SUOMI / FINLAND MANNER-SUOMI Region Pohjois-Suomi NUTS Code FI1A

Organisation

The University of Oulu Oulun yliopisto Link: http://www.oulu.fi/english/index.html Pentti Kaiteran katu 1 Oulu, FI-90014 Mission The University of Oulu is one of the largest universities in Finland with an exceptionally wide academic base. Internationally pioneering research is conducted as a collaboration of different disciplines. Forming an international science community of students and scholars, the University of Oulu is recognized for research that reaches out across disciplines and teaching that taps into this research. Dedicated to establishing itself as an attractive and efficient research community, the University of Oulu draws on the quality and breadth of its scientific programmes, state-of-the-art research and educational technology, close ties with business and industry and strong enterprise agenda, not to mention its collaboration networks involving hundreds of national and international scientific and educational institutions and organizations. Activities The tasks of the University of Oulu include promoting free research, education and culture and strengthening the national competence base to improve competitiveness and well-being. In addition, the university strives to ensure the availability of skilled researchers and a well-qualified academic labour force within its area of influence. Activities of the university will increasingly hinge on collaboration with external partners. This is reflected in the new strategy, adopted during 2009, which states that, in close collaboration with sector research institutes and economic life, the university will carry out a development programme to improve its international standing as a top science-based university. Practical steps in this direction include strengthening professional competencies through active participation in strategic national competence clusters and the Oulu Innovation Alliance. The university intensified its commitment to improve the employment eligibility of young people, particularly those with an academic background, and to lower the youth unemployment rate.

Appendix D Statistical data

Indicator Pohjois-Suomi Pohjois-Suomi EU27 (2000) (2008 or most (2008 or most recent) recent) GDP per capita 19,000 25,900 25,100 (PPP) Change in GDP per 5.63 (2000-03) 4.08 (2005-08) 3.73 (2005-08) capita Unemployment rate 10.2 (2000-03) 7.35 (2007-10) 6.98 (207-10) Change in -2.45 (2000-03) -0.02 (2007-10) -0.30 (2007-10) unemployment rate Tertiary education 0.33 0.39 (2010) 0.30 (2010) Government R&D 0.30 0.30 0.24 expenditure Patents per mln 252,4 182,5 (2006) 115,1 (2006) population Business R&D 3.15 4.82 1.21 expenditure Higher education 0.67 0.75 0.44 R&D expenditure Source: Eurostat and Community Innovation Survey

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Technopolis Belgium Avenue de Tervuren 12 B-1040 Brussels Belgium T +32 2 737 74 40 F +32 2 727 74 49 E [email protected] www.technopolis-group.com