Master's Thesis
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Master’s Thesis Master’s Degree Programme in European Studies Human Geography Understanding of innovations, territorial innovation systems and spatial scaling in regional policies of Northern Ostrobothnia. Oxana Kozar 2015 Supervisors: Tommi Inkinen Markku Löytönen UNIVERSITY OF HELSINKI FACULTY OF SCIENCE DEPARTMENT OF GEOSCIENCES AND GEOGRAPHY GEOGRAPHY PL 64 (Gustaf Hällströmin katu 2) 00014 Helsingin yliopisto Index Introduction ......................................................................................................................... 1 Theoretical concepts ........................................................................................................... 4 Innovation ....................................................................................................................... 4 Regional dimension in innovation .................................................................................. 7 Territorial innovations models ........................................................................................ 9 Innovation and periphery .............................................................................................. 17 History of economic and innovation development in Northern Ostrobothnia .................. 19 History of innovative development in Finland ............................................................. 20 History of economic development in Oulu ................................................................... 22 Educational institutions ............................................................................................. 23 Role of big enterprises in Oulu ................................................................................. 25 VTT in Oulu .............................................................................................................. 26 Technology parks and public-private cooperation .................................................... 27 Center of Expertise Programme and Multipolis network ......................................... 28 Social and economic development in Northern Ostrobothnia ...................................... 29 Methods............................................................................................................................. 37 The understanding of innovation activities in regional strategic programmes of Northern Ostrobothnia .................................................................................................................. 41 The industries associated with innovative activities ..................................................... 42 The concepts of regional innovation systems, clusters and innovative milieu in regional strategic programmes of Northern Ostrobothnia .......................................................... 44 Spatial scaling of innovation systems ........................................................................... 48 Conclusions ....................................................................................................................... 52 References ......................................................................................................................... 54 Introduction Innovations and innovative development have become of the most popular concepts in economic development during last few decades. However, the understanding of these concepts may differ. Too narrow definition can lead to the development strategies that don’t utilize all possible resources and mechanisms for economic growth and prosperity, too broad definition erodes the theoretical concepts, makes them less practically applicable and promotes their transition into buzzwords. An interesting example of using innovations and knowledge as tools for economic development is the rise of the city of Oulu as a technological and economic center. A city which economy in 1960s was based on resources-intensive industries has become one of the main economical, technological and social centers in the country and acquired importance on international level. Oulu phenomenon has become an iconic success story from Finnish knowledge-based development. Nevertheless, the region of Northern Ostrobothnia where the city of Oulu is situated has not become one of the leading regions of Finland. For example, in 2012 it occupied 11th position among 19 Finnish regions by GDP per capita. Low population density, provincial position it terms of geographic distances and innovation resources are still affecting the level of development of Northern Ostrobothnia. The geographical scaling of the research and delimiting the borders of the region were problematic. While addressing the issues of technological or knowledge-based development in Oulu, many researchers use different geographic scales as if they were interchangeable without taking into considerations the differences in their structure and the interrelationships they are in with each other. Northern Ostrobothnia is often used as a synonym to Oulu region. This confusion is supported by the official website of Council of Northern Ostrobothnia, which is titled “Pohjois-Pohjanmaan liitto” in Finnish with the English translation “Council of Oulu region” below. As a result, the development of other municipalities, such as Raahe or Oulu is not taken into account. In addition to this 1 ambiguity, some researchers claim to focus on bigger region of Northern Finland, however, leaving the region of Northern Ostrobothnia in the shade of Oulu or Lapland development. In this paper the research will go beyond Oulu and will be concentrated on the region of Northern Ostrobothnia with its other municipalities. However, since all the scales are connected and can influence one another, the local, higher regional and national level will be also considered. The research will refer to public sector policies that are formulated on regional level and are supposed to provide common vision and common planning for future regional development. It will be analysed how innovations and innovative developments are understood and planned on this level. The policy documents chosen for the research are regional strategic programmes of Northern Ostrobothnia for four programming periods: 2004-2006, 2007-2010, 2011-2013 and 2014-2017. The method used for the research is qualitative content analysis which allows to systematize the content of the texts and interpret the ways the concepts of innovations and territorial innovation systems are utilized. In addition, I will also have a look on how geographical scaling of innovative activities is defined in the policies. Therefore, four research questions of the thesis were formulated: How is innovation understood in the regional policies of Northern Ostrobothnia? Has the understanding changed during the last decade? What sectors is the concept of innovation and innovative development connected to in the policies of the region? What concepts connected to innovative development (innovative milieu, regional innovation systems, cluster) are dominating in the policies and how these concepts are correlating with each other? Has the way of utilizing these concepts changed? 2 How has innovative development been scaled in regional development documents of Northern Ostrobothnia? 3 Theoretical concepts Innovation To begin with, it is important to define the basic term “innovation”. Innovation implies newness, which is reflected in the most of the definitions given to the term. At the same time it is important to distinguish between invention and innovation. Nowadays invention is rather seen as “the first occurrence of an idea for a new product or process, while innovation is the first attempt to carry it out into practice”. (The Oxford Handbook of Innovation, 2006) Cooke (2001) defines innovation as referring to “the process of commercialising new knowledge, possibly though not necessarily emanating from universities, with respect to product, process or organisational innovation”. Schumpeter, one of the first researchers studying and conceptualizing innovation, in his early works considered innovation as performed by heroic entrepreneur, a pioneer, who “draws other producers in his branch after him”, whose task is in “breaking up old, and creating new” (Schumpeter, 1996). Later Schumpeter switched to understanding innovation as being created by collective effort and acknowledged the need for systematic innovation (Cook; Oxford Handbook). Therefore, while defining innovation it is useful to pay attention to the process of the knowledge transfer as well as users, producers and other intermediaries. Based on the context, the understanding of innovation can differ. Some sources, for example, Oslo Manual, address only technological innovation and define two types of innovation - product and process innovation. Product innovation is creating new product and introducing it to the market, process innovation is developing new production or delivery methods, which can mean improving equipment, working methods, human resources (Oslo Manual). However, on the company level creating new product involves not only technological solutions, but a range of entrepreneurial decisions and activities. 4 Hence, Schumpeter, having wider understanding of innovative activity, defined a list of activities that can be considered as innovation. Based on his classification, with the addition on one more type (“new services”) Johannessen et al. (2001) define six following types of innovative activities: 1) developing new products; 2) developing new services; 3) developing