The status, characteristics and potential of SMART SPECIALISATION in Nordic Regions

By Mari Wøien, Iryna Kristensen and Jukka Teräs NORDREGIO REPORT 2019:3

nordregio report 2019:3 1

The status, characteristics and potential of SMART SPECIALISATION in Nordic Regions

By Mari Wøien, Iryna Kristensen and Jukka Teräs

NORDREGIO REPORT 2019:3

Prepared on behalf of the Nordic Thematic Group for Innovative and Resilient Regions 2017–2020, under the Nordic Council of Ministers Committee of Civil Servants for Regional Affairs. The status, characteristics and potential of smart specialisation in Nordic Regions

Nordregio Report 2019:3

ISBN 978-91-87295-67-6 ISSN 1403-2503 DOI: doi.org/10.30689/R2019:3.1403-2503

© Nordregio 2019

Nordregio P.O. Box 1658 SE-111 86 Stockholm, Sweden [email protected] www.nordregio.org www.norden.org

Analyses and text: Mari Wøien, Iryna Kristensen and Jukka Teräs Contributors: Ágúst Bogason, Eeva Turunen, Laura Fagerlund, Tuulia Rinne and Viktor Salenius, Nordregio.

Cover: Taneli Lahtinen

Nordregio is a leading Nordic and European research centre for regional development and planning, established by the Nordic Council of Ministers in 1997. We conduct solution-oriented and applied research, addressing current issues from both a research perspective and the viewpoint of policymakers and practitioners. Operating at the international, national, regional and local levels, Nordregio’s research covers a wide geographic scope, with an emphasis on the Nordic and Baltic Sea Regions, Europe and the Arctic.

The Nordic co-operation Nordic co-operation is one of the world’s most extensive forms of regional collaboration, involving Denmark, Finland, Iceland, Norway, Sweden, and the Faroe Islands, Greenland, and Åland. Nordic co-operation has firm traditions in politics, the economy, and culture. It plays an important role in European and international collaboration, and aims at creating a strong Nordic community in a strong Europe. Nordic co-operation seeks to safeguard Nordic and regional interests and principles in the global community. Common Nordic values help the region solidify its position as one of the world’s most innovative and competitive.

The Nordic Council of Ministers is a forum of co-operation between the Nordic governments. The Nordic Council of Ministers implements Nordic co-operation. The prime ministers have the overall responsibility. Its activities are co-ordinated by the Nordic ministers for co-operation, the Nordic Committee for co-operation and portfolio ministers. Founded in 1971.

The Nordic Council is a forum for co-operation between the Nordic parliaments and governments. The Council consists of 87 parliamentarians from the Nordic countries. The Nordic Council takes policy initiative s and monitors Nordic co-operation. Founded in 1952.

Stockholm, Sweden, 2019 Table of contents

Foreword...... 7

Executive summary...... 8

Introduction...... 11

1. Conceptual framework...... 13

2. Policy review...... 18

3. Methodology...... 29

4. Nordic regional case studies...... 34 Overview...... 34 FINLAND: KYMENLAAKSO...... 36 SWEDEN: STOCKHOLM...... 43 DENMARK: MIDTJYLLAND...... 52 NORWAY: NORDLAND...... 57 ICELAND...... 69 THE ÅLAND ISLANDS...... 77

5. Cross-case analysis...... 81

6. Key findings and policy recommendations...... 83

References...... 93

Annex 1...... 107

nordregio report 2019:3 5 List of Abbreviations AIKO (Finland) Alueelliset innovaatiot ja kokeilut (Regional innovations and experiments)

EDP Entrepreneurial discovery process

ELY-Centre Finnish Centre for Economic Development, Transport and the Environment

ERDF European Regional Development Fund

EU European Union

FD (Norway) Finansdepartementet (Ministry of Finance)

KMD (Norway) Kommunal- og Modernisering Departmentet (Ministry of Local Government and Modernisation)

RCN Research Council of Norway

R&D(&I) Research and Development (and Innovation)

RIS3 Research and Innovation Strategies for Smart Specialisation

S3 Smart Specialisation Strategy

SMEs (Micro) Small and Medium-sized Enterprises

nordregio report 2019:3 6 Foreword

This report arose from research undertaken by tions across regions, the Nordic countries provide Nordregio on behalf of the Nordic Thematic Group a comparative perspective of the possible methods for Innovative and Resilient Regions 2017–20201 of applying smart specialisation, both in the region under the Nordic Council of Ministers’ Committee itself and in Europe more widely. The report high- of Civil Servants for Regional Affairs. The work lights the enabling and impeding factors and offers programme for the Nordic Thematic Group for In- policy recommendations for working with smart novative and Resilient Regions 2017–2020 listed specialisation in future. Thus, it aims to provide a three themes that create a foundation to under- solid background and policy recommendations for stand the factors that support the creation of deliberation in the process of developing a smart innovative and resilient regions across the Nordic specialisation strategy. countries. These prioritised themes were resilience, The close collaboration between the Nordic smart specialisation (S3) and digitalisation. The Thematic Group for Innovative and Resilient Regions three themes are closely interlinked from a regional and Nordregio was crucial for the creation and de- development perspective; therefore, their comple- velopment of this report in terms of the valuable mentarities are considered throughout the entire discussions, support and guidance provided in this implementation process. working relationship. The editors would like to ex- This report explores the concept of smart press their gratitude to the thematic group for specialisation in the Nordic context and offers an creating a supportive and stimulating milieu in the analysis of the added value of smart specialisation final months leading up to the publication of this as a tool for regional growth in this region. The in- report. The report has also benefitted from the depth study on smart specialisation was carried editorial and administrative tasks undertaken by out in the period from 2017 to 2018 and drew on Mari Wøien and Jukka Teräs at Nordregio. the insights and experiences of regional stakehold- Finally, this study is valuable from the view- ers and relevant national actors. The thematic point of Nordic ministries and institutions in devel- group and its secretariat are grateful for the time oping their innovation and research and develop­ and effort spent by these regional and national ment (R&D) policy work. It contributes to the actors in providing relevant information and ena- framework for the adaptation of smart specialisa- bling the empirical research for this in-depth study. tion in the Nordic Region. Smart specialisation is gaining momentum in Europe due to an ex ante conditionality for the Eu- ropean Regional Development Fund (ERDF). The Nordic Region is well-suited to spearheading the Mr. Mikko Huuskonen assessment of the concept’s added value. Given Chair of the Nordic Thematic Group for Innovative the relatively strong regions and similar institu- and Resilient Regions 2017–2018

1 More information on the Nordic Thematic Group for Inno­vative and Resilient Regions 2017–2020 is available on Nordregio's website. nordregio report 2019:3 7 Executive summary

The overall objective of the current smart spe- research and innovation (R&I), whereas Finland re- cialisation study (undertaken during 2017–2018) mains largely regional in its approach. It is inter- is to create an understanding of how the differ- esting to note that, in Norway, which is not a mem- ent Nordic regions adapt to the smart speciali- ber of the EU, regions are increasingly considering sation policy concept (referred to as S3) and to smart specialisation as a potential approach to analyse the added value of its implementation in regional growth and innovation. More­over, in 2018, the Nordic context. The study is part of the work the Norwegian Ministry of Local Government and programme for the Nordic Thematic Group for Modernisation published a handbook (Veileder) to Innovative and Resilient Regions 2017–2020 set by smart specialisation at the regional level. Looking the Nordic Council of Ministers. across the ocean to Iceland, smart specialisation has This report attempts to create a foundation not been formally adopted as a concept. However, for understanding the added value of smart spe- as its innovation policies are modelled on those of cialisation in the Nordic context. It focuses on the the EU, it is likely that similarities will be observed cohesiveness and complementarity between the in its upcoming innovation policies. different tiers of government, paying particular In those regions in which smart specialisation attention to the dialogue between the national has not yet been adopted, it is still possible to and regional levels to identify factors that enable detect de facto smart specialisation. This refers or impede the implementation of smart speciali- to initiatives that clearly carry resemblances to sation. The report also addresses the role of smart smart specialisation (Teräs et al., 2018). Thus, the specialisation in realising the green economy and one of the aims of this report is to further analyse looks at regional commonalities in the pursuit of the status, potential and the characteristics of identifying a Nordic model of smart specialisation. smart specialisation also beyond the EU’s regional Although there might not be a clear-cut vision of boundaries, whilst considering the nature of smart such a model, common themes can be identified specialisation in EU member states. that enables the implementation of smart spe- cialisation, such as similar approaches to regional Empirical research governance and socio-political factors. The case study areas in this report were selected The acceptance and implementation levels of to ensure that territorial diversity in the Nordic smart specialisation differ markedly between the Region was represented. They cover urban and Nordic countries. The European Union (EU) mem- capital regions as well as rural regions, the Arctic ber states, Sweden, Finland and Denmark, are and islands; they also cover a variety of typologies, required to draw up innovation strategies in line with the aim of uncovering and analysing trans- with the smart specialisation discourse because national and transregional similarities and differ- it is an ex ante conditionality for receiving Struc- ences. Thus, they provide a pan-Nordic perspective tural Funds from the European Regional Develop- on benchmarks for the design and implementation ment Fund (ERDF). To date, the Faroe Islands and of smart specialisation. Greenland have not adopted smart specialisa- The Finnish region Kymenlaakso has begun to tion, but the Finnish province of Åland has includ- integrate smart specialisation successfully into ed smart specialisation as part of its innovation its regional strategy. Enhancing its vision for re- strategy for 2014–2025. Denmark, as an EU mem- gional development, Kymenlaakso has traced and ber state, has developed a policy framework that defined its regional domains, creating a foundation consists of a number of national strategies related for long-term prosperity. In addition, the definition to innovation, but regarding the full utilisation of of these domains creates a sense of urgency by the smart specialisation concept it remains some- bringing clear priorities into the regional agenda what reluctant. Sweden has created a multi­level and facilitating the allocation of available regional S3 framework, consisting of several strategies for resources. Creating clear prioritisations and spear- nordregio report 2019:3 8 heads in the regional S3 strategy (known as Kym- ownership and leadership for enabling and capi- RIS) enhances the region’s chances of success talising on smart specialisation, enhancing the dis- when participating in tendering processes for re- semination of knowledge of the concept and its gional funds. consequent utilisation. Despite not having adopted an S3 strategy, Like Norway, Iceland is a non-EU member and the Stockholm region remains the innovation leader it is therefore not required to implement smart of the EU. Arguably, the implementation structure specialisation in its regional innovation and R&D of smart specialisation in Stockholm challenged policies. Moreover, Iceland does not have the re- its development, as the political ownership to gional governmental structure that is seen in the the process was largely missing. For this reason, Nordic Region at large. Smart specialisation is not the development of S3 policies have been largely included in its national innovation policies, but the person-dependent and vulnerable to change. Al- upsurge of a smart specialisation discourse, and though the region has developed an overarching the fact that Iceland’s approach to innovation is innovation strategy, the strategy remains general, often reminiscent of the EU’s approach, may in- with only loose connections to the S3 concept. As a dicate that smart specialisation will form part of capital region, Stockholm has a wide variety of ac- Iceland’s future innovation policies. Like Denmark’s tors, and the absence of a strong history of cluster Midtjylland region, similarities to the S3 concept politics may have affected its ability to mobilise are detectable in Iceland’s policies. these actors for smart specialisation. With this in Åland is not part of the EU Smart Specialisation mind, it may be worth questioning whether smart Platform but has nevertheless developed an inno- specialisation is better suited for mid-sized regions vation strategy based on the concept for receiving with e.g. a historically strong industrial sector, cre- ERDF funding. Additionally, the smart specialisa- ating clear and obvious prioritisations based on tion concept is firmly rooted in Åland’s approach to existing strengths and knowledge networks. The sustainable development and influences its skills case of Stockholm may thus indicate that there is policies and education planning. Thus, the take on an ‘optimal size’ for the implementation of smart smart specialisation in Åland is largely practical in specialisation. its orientation. Over time, Åland’s smart speciali- The Central Denmark Region, Midtjylland, sation attempts may be challenged by its limited takes a pragmatic approach towards smart spe- volume in R&I. cialisation as it has largely regarded the concept as a means to secure ERDF funding to boost regional Key findings competitiveness. Thus, the practical application of To some extent, the implementation of and ap- S3 is limited to dialogue forums and partnerships proaches to S3 are cast differently across the and it carries little substantive meaning for the Nordic Region. Regardless of this, there are under- regional innovation stakeholders. However, the S3 lying similarities between the region’s countries— proxy structure adopted appears to be substan- they are characterised by their relatively strong tial and the current approach to regional innova- economic positions, high levels of trust and natu- tion in the Midtjylland region suggests that a ‘de ral resource dependency—that may enable, but- facto smart specialisation strategy’ has been im- tress and deepen S3 strategies. For example, plemented. regional S3 policies targeting the bioeconomy The Norwegian region of Nordland was the may increase the competitive edge of natural first region to consider the concept of S3 as part resource-dependent regions, levelling the playing of its innovation and research and development field and reducing the traditional urban–rural di- (R&D) strategy, after a thorough review of the chotomy. Considering the case studies analysed concept’s potential for regional growth. However, for this report, it is clear that the more rural re- the challenges regarding multilevel governance gions, with stronger industrial sectors and greater structures between the regional and the national reliance on natural resources, are actively using levels may cause additional complexity in the fu- S3 to increase their competitive advantage. By ture. The Planning and Building Act and the inte­ comparison, the metropolitan and urban areas gration of S3 objectives may assist in further are displaying some lack of enthusiasm for the structuring the strategical work. The Nordland concept, owing to their already high levels of in- case also demonstrates the importance of clear novative performance and the overall nature and nordregio report 2019:3 9 number of companies present in the region. How- with the right set of capabilities for bringing about ever, some of these regions do display traces of the strategy in a sound manner, is necessary, but de facto smart specialisation, due to the scholarly only in combination with the engagement of actors focus of their universities and research institutes. across pre-identified areas of regional strength. This divide also raises the question of optimal Furthermore, based on the case studies, it seems size, noted above in relation to Stockholm: that is, evident that a strengthened connection between regional size may be relevant in terms of available the different levels—businesses, regional actors actors and the economic structure for enacting and national authorities—may be an advantage an S3 strategy. in constructing a strong regional economy. Trans­ When examining the operationalisation of regional and transnational knowledge sharing, en- smart specialisation, it is evident that the regional abled by common platforms—such as the EU’s S3 administrations play a significant role, although Platform in Seville, Spain, which provides support commitment to the implementation and the sub- to the design and implementation of S3—remains sequent performance of the concept varies across important in devising best practice examples and the EU and the Nordic Region. Thus, the method- providing methodological inspiration. ology and strategies connected to its implementa- Despite being a relatively new concept, S3 has tion are decisive for the uptake of S3. In exploring made its way into the fabric of various Nordic re- smart specialisation and the relative policy and gions. The concept has been adapted in local and regional context in the Nordic Region, there are regional contexts, and similarities are detectable evident signs of what this report has referred to across the macro-region, implying the existence as de facto smart specialisation, that is, regions of a Nordic model of S3. Arguably, the nature of are working in line with the S3 concept, despite not the context within which the Nordic innovation having formally adopted its methods and processes. systems are situated have aided and incentivised In this report, the case studies indicated that the the implementation S3 strategy processes. The ways in which the Nordic innovation systems and existing innovation systems facilitates the adop- markets are organised are reminiscent of, and tion of the S3-logic, and their absorption capaci- largely compatible with, the theoretical founda- ties makes for an easy adoption of the policy tool tions of smart specialisation. regardless of the country’s EU-membership sta- Devising a smart specialisation strategy re- tus or ex ante con­ditionalities. The Nordic region quires a combination of harmonised actions and may play an active role in creating benchmarks for actors. A clear regional ownership and leadership, the implementation of S3 elsewhere in the future.

nordregio report 2019:3 10 Introduction

Background of the study cialisation to their regional innovation strategies. Smart specialisation was first introduced by the There is also no overview of the differences be- European Union (EU) in 2010 as a bottom-up policy tween the concept of smart specialisation and the for regional innovation to help bridge the growing regional innovation strategies. What emerges is gap between Europe and the United States, Japan a clear learning gap in the Nordic context that is and other emerging global competitors (European worthy of further exploration. Commission 2010a; Foray and van Ark, 2007; Teräs An evaluation of the impact of smart speciali- and Mäenpää, 2016). The smart specialisation sation programmes and strategies is rather chal- concept and its sub-concepts of ‘entrepreneurial lenging, given the early stage of their implementa- discovery processes’ (EDP) and ‘domains’ assist tion. Often, the evaluation is limited to collecting in promoting strategic innovation policies from feedback and reflections from the actors and an entrepreneurial perspective. Lending this lens participants involved in the respective smart spe- to the overall strategic implementation of smart cialisation programmes and projects. This study specialisation (S3), this bottom-up approach may comes at a critical moment, as there is a need to identify and address new and emerging innovation meet the growing demand of policy makers for paradigms that break with a region’s dominant or assistance in assessing S3 developments, as well traditional areas of economic strength (Teräs and as to provide them with the most recent data on Mäenpää, 2016). smart specialisation. Thus, drafting research and innovation strat- This report aims to evaluate and analyse the egies for smart specialisation (RIS3) became an present status of smart specialisation in the Nordic ex ante condition for accessing the EU Structural Region. Given that smart specialisation is part of Funds for the 2014–2020 programme period. This an ex ante conditionality for EU member states, implies that for the first time, territorial cohesion— it is particularly interesting to consider the smart the fundamental goal of European regional policy— specialisation rationale, challenges and opportuni- is ‘“welded” with the objectives of competitive­ness ties facing the regions that remain outside the EU and innovation’ (Bellini, 2015: 23). While a large and are thus not directly affected by the condition- body of literature deals with the theoretical under­ ality. This report provides an in-depth analysis of five pinnings of the smart specialisation concept different regions in the Nordic partnership: the (Foray et al., 2011, 2013; McCann et al., 2011, 2013; Finnish region Kymenlaakso; Stockholm, Sweden; Morgan, 2013, 2015; Foray, 2015), understanding the Central Denmark Region, Midtjylland; Nordland its potential to address growth challenges that in Norway; Iceland; and Åland. different European regions face is still largely It is important to note that the empirical re- missing (Capello and Kroll, 2016). For the sake of search for the case studies reflects the stakeholder the nature of this report, we will be referring to perceptions of S3 and does not seek to generalise ‘S3’ rather than ‘RIS3’. the empirical findings beyond the analyses of the It is evident that the relatively early adop- commonalities identified throughout this process. tion of smart specialisation and its influence on the overall strategy process, which were features Aim and scope of the Nordic development of smart specialisa- The overall objective of this S3 2017–2018 study tion, may be favourable factors in implementa- is to create an understanding of how the different tion, which should be taken into account in future Nordic regions adapt to the S3 policy concept and policies and strategies in Europe (Kroll, 2015; Teräs to analyse the added value of its implementation in and Mäenpää, 2018). However, there is currently the Nordic context. Four research questions (RQs), no systematic overview of how the Nordic regions defined below, assist in reaching this objective: adapt and implement the concept of smart spe-

nordregio report 2019:3 11 RQ (1) How do the national and regional govern- tifying regional strengths and weaknesses, and mental levels support S3 processes and which finally, the level of stakeholder involvement in S3 tools are in place for this purpose? processes.

RQ (2) What are the enabling and impeding fac- Structure of the report tors influencing the adoption of S3 elements at This report is structured in the following manner. the regional level? First, in Chapter 1, the report introduces the con- ceptual framework. The purpose of the know­ledge RQ (3) To what extent does the S3 approach aid overview is to introduce the key concepts and pro- the understanding of the relevant processes in re- vide an overview of national and regional policy gional innovation systems and the stimulation of support related to S3 processes. Chapter 2 pro- necessary synergetic co-operation within them? vides an overview of smart specialisation policies in the Nordic Region. The reception of smart spe- RQ (4) As a place-based approach, how does S3 cialisation differs between the Nordic countries and contribute to driving the green growth agenda in is not uniformly applied. This chapter provides the the Nordic context? contextual background for the empirical research conducted for this report. Chapter 1 and Chapter The relation between regional smart specialisation 2 build on the foundations provided for this re- strategies and national policies, as well as funding port in Kristensen, Teräs, and Wøien’s Discussion priorities, are crucial issues for the analyses. With paper: ‘The potential for Smart Specialisation for a focus on the cohesiveness and complementarity enhancing innovation and resilience in Nordic re- between different tiers of government and the gions’, which was prepared for the Nordic The- dialogue between regional and national levels vis- matic Group for Innovative and Resilient Regions à-vis regional smart specialisation, such analyses and published in January 2018 (Kristensen et al, may provide significant insights. 2018). Chapter 3 lays out the methodology ap- The project also considers the different geo- plied when conducting the empirical research and graphical scales of S3. This includes the highly considers the desktop material studied and ana- relevant but not yet sufficiently analysed aspect lysed for this report. The section refers to existing of transnational and transregional collaboration, approaches to understanding S3 from a policy and a benchmarking of smart specialisation de- perspective and provides a rationale for the case sign and its implementation in and from a pan- study selection. Chapter 4 presents the empirical Nordic perspective. research undertaken using case studies. The case From a policy perspective, it is important to study interviews were undertaken during the sec- consider how the public authorities can initiate in- ond half of 2018. The section takes a closer look at terregional learning processes for S3 and EDP in the six Nordic regions examined and their concep- a feasible manner. Furthermore, it is worth men- tualisations and approaches to smart specialisa- tioning the green transition, as it plays an impor- tion. Chapter 5 places the empirical findings from tant part in the future of the Nordic economies. the case study research into a cross-case analysis. Given the abundance of natural resources avail- The cohesiveness, complementarities and dialogue able to the Nordic countries, the bioeconomy is between the different tiers of government and re- particularly relevant. Finally, the project will con- gional actors are examined from a comparative tribute to the sharing of experiences and knowl- perspective. Chapter 6 concludes by providing a edge at the Nordic level regarding the design and thorough overview of the main findings pertaining implementation of smart specialisation strategies to the research questions, followed by a series of and their outcomes in relation to the organisation policy recommendations for regional and national of regional–national governance structures, the authorities and other interested parties. methodology employed by the regions for iden-

nordregio report 2019:3 12 1. Conceptual framework

The purpose of the knowledge overview is to in- strategies or specialisations to ‘the magical chaos troduce the key concepts and provide an overview of the blind watchmaker’ (Foray et al., 2011: 3). of national and regional policy support related However, the paradigm shifts in European innova- to S3 processes. Regional economic development tion policy that have developed over the last few and growth are increasingly centred around the years have increasingly emphasised the role of the production and utilisation of knowledge, and the co-ordinating agents involved in the innovation success­ful translation of knowledge into innovative process. Additionally, the demand-side measures products and processes is headlining policy objec- of innovation policy have significantly enhanced tives. This section will consider this paradigm shift the importance of competition-friendly sectoral in innovation policy design, followed by an explora- policy, and highlighted the relevance of the region- tion of new designs as it appears in smart specialisa- al dimension by placing stronger emphasis on the tion strategies. Key concepts such as entrepreneurial knowledge assets required for long-term economic discovery processes and domains will be studied. growth (Foray et al, 2011; OECD, 2011). A number of theoretical concepts exist to ex- The paradigm shift in innovation plain the policy processes for constructing regional policy design advantage, thereby highlighting the role of regions Over the past decade, innovation and knowledge- in these developments. These theories include i) based economic development have become a learning regions, where interactive learning plays a headline for policy makers emphasising the stra- key role in regional networks (e.g., Asheim, 2011); tegic importance of building a strong knowledge ii) innovative milieu, where emphasis is placed on base for the economy. In this discourse, knowledge regional institutional endowment and knowledge is regarded as an asset that can appear in two interexchange (e.g., Fromhold-Eisebith, 2004), and forms: as an input (competence) and an output iii) clusters, where industrial value chains with the (innovation) in the production process (Lundvall, spatial perspective of proximity are the main focus 2003). The question of how knowledge is produced, (e.g., Asheim, Smith and Oughton, 2011). How- mediated and used has become a prominent issue ever, the conventional methods of implementing in policies for growth and regional development. regional innovation policies have been challenged, Existing disparities in growth patterns across as they continue to focus strongly on research and regions precondition individual and context-spe- development (R&D) processes, whereas these are cific policy approaches. Terms such as ‘radical in- such spatially concentrated processes that the novation’, ‘fast movers’ and ‘competitive entry’ policy efforts end up favouring only a small num- reflect positively the imperatives of EU policies. ber of regions (Boschma, 2008; Asheim, Boschma However, they do not add much to regions that are and Cooke, 2011). Many policy makers tend to fall not front-runners in any specific industry. The suc- for the fallacy of ‘imitating success stories’ and cess of innovative communities depends on their subsequently fail, while the presence of knowledge ability to combine and share both knowledge and asymmetries and important region-specific as- skills, as well as different policy approaches. sets remain unexplored. Asheim et al. state that Often, a prevailing justification for the exist- ‘innovation is about [the] creation of new products ence of an innovation policy is the risk of market and processes, but to be effective it must draw on failure, owing to the existence of knowledge ex- the capabilities of regions’ (2011: 882), thus empha- ternalities, information asymmetries and capital sising the necessity of recognising differences and market imperfections. Any deviations from these capitalising on regional advantages. established ‘neutral points’ in innovation policy There has been a rapid increase in the volume would stir up debates around issues of wrong of investments in knowledge-intensive activities, choices, such as the creation of market distortions as a regional policy tool for realising the potential by ‘picking winners’, a process which likens sectoral for knowledge spillovers in innovation-related ac- nordregio report 2019:3 13 tivities. However, long-term sustainable economic Originally, the idea of smart specialisation outcomes will depend particularly on an expansion was introduced by a group of economists with ex- of those domains where innovation can generate pertise in growth and innovation (the K4G expert complementarities between sectors, thereby cre- team), with the aim of understanding Europe’s ating ‘future domestic capability and interregional weak performance in the development and com- comparative advantage’ (Foray et al, 2011: 4). mercialisation processes of technological develop- Boschma (2008) argues that neither specialisa- ments (McCann and Ortega-Argilés, 2016) and to tion within specific economic sectors nor a diver- address the fragmentation of European innova- sity of sectors promotes innovation processes in tion policies and explore alternatives. The role of their own right, instead emphasising the need for entrepreneurship was considered vital as ‘innova- ‘regional specialisation in related variety’ (2008: 8). tions … can be successfully nurtured, disseminated This line of reasoning echoes Schumpeterian views and taken up within the wider EU economy’ (Mc- of ‘new combinations’, or a cross-fertilisation of Cann and Ortega-Argilés, 2016: 538). Later, Foray existing factors, generated by a multifaceted set et al. (2009) further refined the concept of smart of structures in a different way (Lundvall, 1992: 8). specialisation by defining it as ‘an entrepreneurial In this context, the development of potential ap- process of discovery … a learning process to discover plication areas is highly contingent on the ability of the research and innovation domains in which a re- the region to use existing capabilities in a way that gion can hope to excel’ (2009: 2). will influence regional economic growth. The launch of the Barca Report in 2009 marked a ‘spatial turn’ of innovation strategies (Teräs et al., 2015), bringing to the fore the notion of place- Towards smart specialisation based development as ‘the new paradigm for the The origins of the concept operationalisation of EU policies at the regional Past efforts at selective public intervention to level’ (Dubois, Kristensen and Teräs 2017). Table 1 ensure a favourable environment for innovation below presents some of the key features that dis- and growth have failed. This is because policies tinguish smart specialisation from a cluster-based of ‘picking the winner’ fail to optimise the existing approach (author’s elaboration, based on Foray, innovation potential and take advantage of the David and Hall, 2009, 2011; McCann and Ortega- knowledge-based resources, be it a ‘leading’ or Argilés, 2011; Ketels et al, 2013; Bellini, 2015): a ‘following’ region. One way to overcome these The term ‘specialisation’ has remained rather challenges is to generate and empower distinctive vague in the context of regional policy making. regional assets and competencies based on a re- Bellini (2015) states that ‘smart specialisation is gion’s unique economic structures and knowledge an invitation not to specialise [the] economy, but bases, consciously adapting to the regional context. the policies and their objectives’ and that it is a

Table 1: Distinguishing cluster-based approaches from smart specialisation strategies

Elements of comparison Cluster-based approach Smart specialisation strategy

Unit for specialisation Broader set of economic sectors Specific innovation-intensive domain or niche of economy

Approach Enhancing external effects through Facilitating knowledge spillovers shared infrastructure and input between knowledge domains markets

Types of linkages in Linkages between knowledge do- Groups of companies in related focus mains industries

Function Element of innovation ecosystem Wider policy aiming at transforming ecosystems

Expected outcome Enhance the performance of a Structural transformation of an group of related industries economy around new knowl- edge-based activity domains

nordregio report 2019:3 14 an entrepreneurial discovery as ‘a new area of Smart specialisation: structural change that opens up, into which a whole A strategic approach to enhance economic segment of an industry can move to explore it and transformation by directing knowledge generate numerous innovations’ (2015: 24). investments into activities with the highest potential to generate spillover effects on regional growth. Entrepreneurial and economic knowledge deployment within specialized ‘well-targeted diversification, based on ‘related va- area rieties’, i.e., a reduction of sectoral specialisation’ (2015:24). Furthermore, it should be noted that for rural and peripheral regions it may be necessary Introduction of Consolidation Entrepreneurial to consider the benefits of smart diversification of regional & novelty based extra- discovery: RIS3 on shared- rather than smart specialisation (see e.g. Asheim regional smart 'core' knowledge- et al., 2017). McCann and Ortega-Argilés (2016) networks based state that policy results stimulated by smart specialisation approaches have never been about sectoral specialisation, but rather about ‘carefully choosing priorities which are best suited to moving Not technology development the region from its current development trajectory per se but apillation of to a stronger trajectory via the enhancement of the knowledge new ways local entrepreneurial climate’ (2016: 542). In other words, smart specialisation is not a structure but Figure 1: Entrepreneurial discovery process (EDP) a transformative activity that aims at addressing Source: Dubois, Kristensen and Teräs, 2017 unique capabilities, capacities and infrastructure specific to a technology or sector (Foray, 2017 at Instead of promoting individual innovations, the the 12th Regional Innovation Policy Conference entrepreneurial search process stimulates a de- (RIP) 2017). mand-driven ‘innovation discovery’ (Rodrik, 2004; Asheim and Grillitsch, 2015), which leads to a Entrepreneurial discovery process— structural transformation of the regional economy. The ‘smart’ core of S3 As a policy process, therefore, S3 may foster a S3 corresponds to a new policy prioritisation logic heuristic approach aimed at gradually improving (McCann and Ortega-Argilés, 2013) grounded in the capacity of regions to source and use knowl- EDP. In a nutshell, whereas smart specialisation edge more effectively as a key driver of economic refers to the policy process, entrepreneurial dis- growth and societal change. Thus, bringing the covery describes the functional processes enabling S3 argument into the regional development con- it (see Figure 1). Entrepreneurial discovery refers text directs attention to regional capacity build- to the processes of promoting specialised diversi- ing, the potential of exploiting related variety and fication initiatives across related sectors, referred the importance of interregional and intraregional to as domains, in regional economies (Foray et al., connectivity between different organisations (Mc- 2011; Asheim and Grillitsch, 2015). The reference Cann and Ortega-Argilés, 2013). to ‘entrepreneurial’ reflects the importance of re- EDP constitute the ‘smart’ core of S3, underlin- combining the existing entrepreneurial knowledge ing the vertical or ‘specialisation’ logic of resource scattered across the regional innovation system allocation. The entrepreneurial knowledge, which is (Foray et al., 2011; McCann and Ortega-Argilés, needed for ‘domain’ discovery, rarely arises from a 2013; Boschma, 2014), while the use of ‘discovery’ single organisation or individual. Therefore, smart highlights the non-deterministic, interactive pro- specialisation can only be achieved through new cess of identifying novel applications from region- collaborative behaviour between entrepreneurs. al entrepreneurs, which is the opposite approach This loosely encompasses all relevant stakeholders, to that of ‘picking the winner’ adopted in previous including individual entrepreneurs, companies, uni- generations of R&I policies. Foray (2015) defines versities, technology transfer offices and regional nordregio report 2019:3 15 sectors in S3 aims to ‘realise the potential for scale, Entrepreneurial discovery: scope and spillovers in knowledge production and a process of engaging various actors use’, and to ‘develop distinctive and original areas of (i.e., organisations and agencies) in an specialisation for the future’ (Morgan, 2013: 104). experimentation process to explore This is arguably much less intuitive than promoting alternatives for sustaining the competitive entire industries or individual champions. advantage of regions. The emergence of domains necessitates the creation of new functional linkages across firms, sectors and localities within the regional economy. development agencies that have the capacity to As pointed out above, Boschma (2008) argues contribute to the discovery of new domains (Foray that neither specialisation within specific eco- and Goenaga, 2013). To give a new perspective to nomic sectors nor a diversity of sectors promotes the topic of RIS implementation, scholars have ad- innovation processes in their own right and that, vocated a more pragmatic approach that puts en- instead, the main focus should be on solutions that trepreneurs in a position ‘to discover the domains seek specialisation through regional cross-sectoral of R&D and innovation in which a region is likely to links or ‘related variety’. In a way, this relates more excel given its existing capabilities and productive to the idea of smart diversification than to smart assets’ (Foray et al., 2011:7). Thus, in S3 thinking, specialisation (Asheim and Grillitsch, 2015; Cooke, entrepreneurial discovery is conceived as an itera- 2016). tive, cyclical process involving multiple streams of Building transformative activity (i.e., selecting knowledge exchanges and shaping a joint knowl- priorities or building domains) means addressing edge base within a specialised area (or domain) specific capabilities, capacities and infrastructure that can aid the generation of new knowledge specific to a technology or sector (see Figure 2). ‘about the future economic value of a possible di- Identifying a region’s strong sectors and the map- rection of change’ (Foray, 2015: 24). ping of possible domains may open up room for alternative projects and generate new areas of Domains as transformative activities knowledge in the region. However, it is important The main place-focused dimension of S3 is the to restate that the determination of strong sec- emergence of one or more domains within the re- tors in a region and the subsequent act of building gional economy that are cross-sectoral and of local domains for structural transformation does not delineations. From this perspective, regional inno- equate to a narrow or exclusive regional approach vation cannot be attributed to a specific sector or to growth. Rather, it encourages a strategic view locality of a region but arises from new forms of on how to consolidate efforts to find new areas of cognitive connectivity. possibilities. Foray defines a domain as the level at which S3 According to Foray, transformative activity priorities are identified, assessed and supported, is ‘neither an individual project nor a sector as a neither too high (an entire sector), nor too low (an whole, but a collection of existing innovation capac- individual firm) (2015: 41). Thus, a domain corre- ities and actions oriented towards a certain struc- sponds to a mid-level economic unit that stretches tural change (e.g., transition, diversification or mod- across several sectors or activities (without cover- ernisation of regional economy)’ (at RIP 2017). This ing them entirely), thereby offering greater learn- implies that there is no one-size-fits-all regional ing possibilities and opportunities for knowledge recipe, and that each transformative activity al- spillovers (McCann and Ortega-Argilés, 2013). The ways involves some level of uncertainty and risk. promotion of new domains rather than entire Although smart specialisation is gaining mo- mentum in the European policy debate, a few po- tential dilemmas seem to persist regarding its im- plementation. Below are some of the main factors/ Domain: risks impeding S3 implementation, as identified by refers to a transformative activity that stems Capello and Kroll (2016): from existing economic structures and causes structural transformation.

nordregio report 2019:3 16 n The implementation process can be hampered Forest-based by a lack of local preconditions for innovation, es- Pulp & paper bioeconomy industry pecially in more peripheral regions.

TA n Regions often find it difficult to diversify around Bioeconomy local historical specialisation patterns. Packaging n Difficulties in policy prioritisation may exist. Some regions tend to replicate policies at the local Clean tech for food Food production level with the ambition to be strategic in relation industry to the national and international levels. Strong TA n The repositioning of peripheral regions in inter- sectors ICT national value chains is often beyond the control of Digital technologies regional policy makers (due to the strong depend- in machine and ence of many regions on large multinational enter- mechanical industry Steel and prises). manufacturing n There is a risk that ‘discovery’ processes become TA Digital economy predominantly driven by the public sector, and Etc. hence, there is a lack of application-oriented strat- egies because of the weak absorptive capacity and creativity of small and medium-sized enterprises (SMEs).This section will give an overview of the Projects that can generate spill-overs current European policy context for smart speciali- sation. It will also provide a policy review of the five Figure 2: Development of transformative activity Nordic countries, as well as a shorter summary of (selecting priority areas). Source: Foray, 2017 the three territories (Faroe Islands, Greenland and (RIP conference 2017) + authors' interpretation. Åland).

nordregio report 2019:3 17 2. Policy review

This section is based on desktop research and processes across the EU. There are currently 179 covers the Nordic Region more broadly than the European regions registered on the S3 Platform, proceeding case studies. For a compilation of na- plus 16 non-EU member state regions. 37 of these tional S3 approaches in the Nordic region, please regions are Nordic (S3 Platform 2019). Being regis- consult Table 6 in Annex 1. tered on the platform indicates a region’s interest in smart specialisation and the international net- European level: S3 as ERDF working related to S3. The level of implementation conditionality of S3 strategies varies significantly between the The European Commission manages its Cohesion registered regions. For example, some regions in- Policy through the European Regional Develop- clude smart specialisation strategies within their ment Fund (ERDF), through which EUR 277 billion regional programmes, whereas other regions are is allocated to regional development for the period currently at the stage of finding ways to incorpo- 2014–2020 (European Commission, 2017). The rate an S3 approach in their strategy design. overall aim of the Cohesion Policy is to reduce re- gional differences and ensure growth across Europe. The ERDF operates under the EU policy Europe 2020: A Strategy for Smart, Sustainable and Inclusive Growth (2014–2020). This means that the funding mechanism follows the priorities of R&I, informa- tion and communications technology (ICT), small and medium-sized technology developments, as well as advocating for a low-carbon economy. Development of a smart specialisation strat- egy is a precondition for regions to receive funding from the EU Structural Funds. As the Structural Funds are considered a crucial tool for European regions to overcome economic crises and down- turns, this precondition links smart specialisation strategies to the concept of resilience. In this way, the European Commission directs regions to de- sign their place-based R&I strategies in an inclu- sive way, with smart specialisation as a guiding approach. The requirement does not mean that a stand-alone S3 strategy is necessary to achieve EU funding, but such a strategy must be in place as part of the broader regional development strategy. The main tool to support regions in their S3 strategy design and implementation is the Smart EU Countries Registered in S3P Specialisation Platform (S3 Platform, see Figure EU Regions Registered in S3P 3). The platform is maintained by the EU Joint NON EU Countries Registered in S3P Research Centre, and provides guidance material NON EU Regions Registered in S3P and good practice examples, as well as facilitating Country Peer Review Region Peer Review peer review and mutual learning. The platform also supports access to relevant data. Incorporating Figure 3: Overview of regions and countries on S3P. S3 thinking has become part of policy making Source: S3 Platform 2019 nordregio report 2019:3 18 Nordic national strategies supporting S3 growth and development strategies. Similarly, As EU member states, Sweden, Finland and Denmark Sweden has created a multilevel S3 framework are required to draw up smart specialisation comprising several strategies for R&I, including re- strategies to access Structural Funds, whereas gional development strategies, regional innovation Norway and Iceland, which are outside the EU, strategies, the National Innovation Strategy and do not face the same requirement. Smart spe- the Research and Innovation Bill (Sörvik, forthcom- cialisation strategies may be developed at both ing). As a follow-up, several Swedish regions have the national and the regional levels, but it could developed S3 strategies according to the Euro- be argued that S3 strategies are predominantly pean Commission’s S3 guide (Sörvik, forthcoming). anchored in a synergy between the regional and Thus far, 16 Finnish regions have developed re- the EU levels, whereas the role of the national gional S3 strategies to varying degrees and regis- government is to provide support. This dynamic is tered on the European Commission’s S3 Platform particularly evident in Sweden and Finland, where (EC, 2018). This signifies a considerable interest in there is no overarching national S3 strategy, but strengthening the regions and creating new net- where extensive regional S3 strategies have been works, while looking internationally to identify devised. However, in Finland, smart specialisation new potential collaborations. As non-EU member efforts are co-ordinated and monitored from the states, neither Iceland nor Norway is obliged to national level (Helsinki–Uusimaa Regional Council, adopt regional S3 strategies, although some Nor- 2015). Thus, despite the lack of national S3 strat- wegian regions have displayed significant interest egies in place in Finland and Sweden, there are in S3 policy tools. national frameworks to include and support re- gional S3 efforts and strategies (see e.g., Helsinki– Finland Uusimaa Regional Council, 2015). In Finland, smart specialisation takes place only The reception of smart specialisation policy at the regional level, and not actively in all regions strategies differs between Nordic countries. Often (Polverari, 2016). The authorities responsible for considered an ‘S3 sceptic’, Denmark (Lindqvist, S3 are the regional councils (Teräs and Mäenpää, Olsen, Perjo and Claessen, 2013) has developed a 2016). Please see Box 1 for an example of a regional policy framework that consists of a number of na- smart specialisation strategy developed in Lapland. tional innovation-related strategies. These include Finland has decided not to develop a national the Innovation Strategy: Denmark a Nation of Solu- smart specialisation strategy (Polverari, 2016), but tions (2012–20), which was complemented in 2015 smart specialisation is supported at the national by the growth and development strategy within level. The Finnish Regional Strategy 2020 describes the whole-of-Denmark strategy, as well as regional regional specialisation as an essential means to

Box 1: Lapland, Finland Lapland in North Finland spans an area of Specialisation Strategy, and has three major 98,982 km2. and has 183,330 inhabitants. themes: 1) the refining of Arctic natural Lapland is known for its tourism industry but resources, 2) the utilisation of Arctic natural also for its Arctic expertise in several areas, conditions and 3) cross-cutting development such as Arctic car testing, sustainable use of enabling Arctic growth. The six-step S3 mines and processing industries. The region’s approach (analysis, governance, vision, research and education institutes include priority selection, policy mix and monitoring/ the University of Lapland and the Lapland evaluation) was adopted and followed University of Applied Sciences. closely in Lapland. The regional smart specialisation strategy After the strategy formulation, five process in Lapland took place in two major Smart Clusters were introduced in 2014– phases: the S3 formation in 2012–2013, 2015: Arctic industry, Arctic rural networks, and the S3 implementation phase in 2015. Arctic design, Arctic security and Arctic Lapland’s strategy is entitled the Arctic development infrastructure.

nordregio report 2019:3 19 promote regional development and innovation, and preparing for the coming EU programme period and efforts have been made to enhance collabora- for 2021 onwards (Owal Group Oy, 2017). tion and networking between citizens, regions and other actors to improve the effectiveness of re- Sweden gional development (Ministry of Employment and As an EU member state, Sweden is required to the Economy, 2010). The Regional Strategy 2020 develop smart specialisation strategies to receive aims at highlighting Finnish specialised domains in ERDF funding. The administrative level for develop- the world economy by focusing on regional compe- ing smart specialisation frameworks is the national tences (Lindqvist et al., 2013). Funding for regional smart specialisation ef- forts is available at the national level for 2016–2019 Box 2: Värmland, Sweden as part of the national innovation programme The Värmland region covers a 17,519 km2 Regional Innovations and Experimentations (AIKO). land mass in the midwestern part of This funding platform links the concepts of smart Sweden. The region borders the Akershus, specialisation and resilience, as the objective is Østfold and Hedmark regions of Norway. to regenerate regional economies by supporting The population of Värmland is 281,367 (SCB, region-specific strengths and to implement meas- 2018). The regional capital is Karlstad, with approximately 92,218 inhabitants (ibid.). ures to mitigate the impacts from ongoing struc- The Värmland region is mostly known for tural transition. Another objective of the AIKO its steel and forestry industries. The region programme is to raise the specialisation profiles of has one major innovation centre, Karlstad regions so that they become more internationally University, which has over 16,000 students significant. To achieve this, the national government (Karlstad University, 2018; S3 Platform, has made strategic growth agreements between 2017b). the Helsinki metropolitan region and six other cities. The Värmland region prepared its RIS3 The government supports competitiveness efforts strategy during 2014–2015. After analysing targeted at regional strengths through the forma- available regional assets, officials in Värmland tion of contract-based co-operation agreements identified their targets for specialisation, i.e., between the regions and the central government. their S3 domains. The region has put forward Smart specialisation is gaining more ground four different categories for specialisation. The first, transverse specialisation (value in Finnish regional development. Currently, the creation services), concerns a general level regional councils, in collaboration with regional of specialisation and thus, is not central for key actors, are preparing regional strategic pro- developing domains. However, Värmland grammes for the 2018–2021 period. Guided by the also emphasised prioritised specialisation Regional Development Act (Ministry of Economic (which includes a forest-based bioeconomy, Affairs and Employment, n.d.), these programmes digitalisation of welfare services, and will steer and co-ordinate regional development. advanced manufacturing and complex The current drafts focus significantly on smart systems) and specialisation under qualification specialisation; for example, smart specialisation is (the ‘upcoming’ areas of specialisation, which prominent in the regions of Pirkanmaa and Central include nature, culture and place-based Finland. There are also co-ordination, monitoring digitalised experiences, as well as system and evaluation measures at the national level, de- solutions with photovoltaics). Finally, the region included a category of new areas of vised to oversee the preparation and implementa- smart specialisation, which are yet tion of regional strategic programmes. The forth- to be discovered. coming formulations on the implementation plans Additionally, Värmland has developed will set out the priority areas for national and EU the Academy for Smart Specialisation. This funding. Currently, the implementation plan entails is a collaborative initiative between Karlstad a resilience aspect as part of a regional prepara- University and Region Värmland to strengthen tion plan for future structural changes (ibid). the research environment in the region and Recent national contributions to smart spe- to renew the region’s industry (Karlstad cialisation include a national analysis of regional University, 2019). The project will run until core strengths, which has been conducted to support 2020. the regions in updating their regional strategies nordregio report 2019:3 20 government and, to some extent, the regional development strategies. Both strategies accentu- governments (Polverari, 2016). Despite a strong ate EU Cohesion Policy as an integrated part of national innovation system—including Sweden’s the Swedish regional growth policy and the need Innovation Agency Vinnova and its Vinnväxt pro- for an alignment of the regional, national and EU grammes, and Tillväxtverket, the Swedish Agency strategies for regional growth. for Economic and Regional Growth—Sweden has There are national efforts to increase the up- decided not to develop a separate, designated na- take of smart specialisation strategies in Sweden. tional S3 strategy (Polverari, 2016). Nevertheless, Tillväxtverket is a central actor strengthening some regions did. Please see Box 2 and 3 for ex- regions in their work with smart specialisation. amples of regional smart specialisation strategy The agency’s remit is to ‘support actors that have developed in Värmland and Skåne. regional development responsibilities regarding The current Swedish national innovation strat- smart specialisation and to disseminate experi- egies include some reference frameworks for re- ences and competences from this work’ (Tillväxt- gional smart specialisation. The Swedish Innovation verket, n.d.) The agency’s most important task is Strategy (2012) states that Swedish regions will to ensure that EU funds are invested in projects increase their innovation capacity based on their that promote regional growth and employment. unique conditions. Furthermore, the regional strat- The agency has supported regions in their innova- egies should be grounded in combined regional– tion and S3 strategy development within the Re- national leadership. In turn, this will assist the dia- gional Work on Innovation and Clusters (RIK) pro- logue between the national, regional and interna- gramme. The work on smart specialisation will be tional levels. According to the National Strategy continued, drawing on lessons learnt from the RIK for Sustainable Regional Growth and Attractiveness programme (Tillväxtverket, n.d.) 2015–2020, ‘greater collaboration between academia, Most Swedish regions work to develop their society and industry is required, to bring about joint own S3 strategies in line with the EU recommen- strategic and long-term initiatives’ (Government dations (Tillväxtverket, n.d.; Henning et al., 2010). Offices of Sweden, 2015: 4). The strategy guides These can be either embedded in the respective the development and implementation of regional regional development strategies for each region

Box 3: Skåne, Sweden The Skåne region is the southernmost region The strategy identifies three areas of in Sweden and spans an area of 10,968 km2, relative strength: personal health, smart with a population of 1,358,637 (SCB, 2018). and sustainable cities and smart materials. The regional capital is Malmö, with 338,230 Further, Skåne has taken advantage of the inhabitants (ibid.). Skåne has a diverse international scope of S3 by being part of industry, with academic excellence in material the Vanguard Initiative, which aims to lead science, medicine, mobile technology, food by example in industry-led interregional and nutrition (Lagnevik, 2012). Skåne hosts co-operation based on smart specialisation strong clusters in life science, clean-tech, principles (cf. Vanguard Initiative, n.d.). Skåne ICT, packaging, food, mobile communication has participated in S3 peer review activities and film (Vanguard Initiative, n.d.; Cooke & since 2012. Eriksson, 2012). A cross-border life-science Skåne’s International Innovation Strategy cluster, known as Medicon Valley, operates and related documents are produced by the in Skåne and the Danish capital city of Skåne Research and Innovation Council and Copenhagen. Other important co-operative the Sounding Board for Innovation in Skåne, initiatives have been introduced with Finnish wherein universities, institutes of technology, Oulu (eHealth) and Tampere (Smart Cities) municipalities, arenas, industry, the public (Vanguard Initiative, n.d.). sector and student representatives can work The International Innovation Strategy together to support innovation and create 2012–2020 for Skåne (2011) envisions Skåne regional economic conditions that enhance as the most innovative region in Europe. growth.

nordregio report 2019:3 21 or in general innovation strategies or they can be criteria. Viewing the Danish Government’s innova- created as a separate document altogether, as a tion strategy—The Danish Strategy for Cluster and designated S3 strategy for the region. That said, Network Policy—and existing regional growth and the guidelines for mandatory regional develop- development strategies indicates that the existing ment strategies already include some elements of national and regional S3 strategies are equiva- an S3 approach. These strategies must be based lent to the general layout of smart specialisation on a regional analysis and contain goals and pri- strategies. oritisation for the work on regional growth (Till- Denmark’s Strategy for Cluster and Network växtverket, n.d.). Most of these strategies already Policy 2016–2018 designates that the Cluster Forum include prioritisations of economic sectors, clus- is responsible for ‘discussing and co-ordinating re- ters or innovation systems (Lindqvist et al., 2013). gional strategies for smart specialisation and en- Interestingly, the Swedish national regional funds suring cohesion with the general strategy for the programme does not require a pre-existing (re- cluster and network policy’ (The Danish Ministry gional) priority setting (Tillväxtverket, n.d.). of Higher Education and Science and The Danish Agency for Science, Technology and Innovation, Denmark 2016: 5). The Cluster Forum is a Danish informal As mentioned above, Denmark has developed a body where ministries, regions, municipalities and policy framework that consists of a number of the regional cluster forums share knowledge and national innovation-related strategies. In 2012, co-ordinate activities between clusters and net- Denmark launched a new innovation strategy, A works. The forum’s overall purpose is to support Nation of Solutions, which included 27 policy initia- Danish cluster development and to create cohe- tives focused on research, innovation and educa- sion between local, regional, national and interna- tion. This policy document represented a shift to a tional cluster and network efforts (ibid, 2016.) more demand-driven innovation policy, in which en- At the regional level, the regional growth fo- hanced knowledge flows and strengthened innova- rums are the focal points for business develop- tive capabilities in the education sector took centre ment (Danish Business Authority, n.d.) and they stage. In 2015, the strategy was complemented by are responsible for the RIS3 process (Asheim, an additional strategy, Growth and Development 2014). Design of regional growth and development in the Whole of Denmark (Vækst og udvikling i hele strategies falls under the remit of the regions Danmark) that sought to foster regional growth (Erhvervsstyrelsen, n.d.), whereas the regional and development using ‘regional smart speciali- growth forums decide how structural fund resources sation’. This strategy devised over 100 initiatives are to be allocated (Danish Business Authority, n.d.). that targeted building partnerships between re- search institutions and businesses, with the aim of Norway intensifying knowledge sharing and innovation in Norway, as a non-EU member state and does not businesses (OECD, 2016). have an ERDF-related incentive to adopt smart As an EU member state, Denmark engages specialisation approaches. However, it has been with the smart specialisation concept to benefit found that since the introduction of the S3 concept from the EU Structural Funds. Two Danish regions, in Nordland, ‘many components of smart speciali- Nordjylland and Midtjylland, have now joined the sation seem to have been applied, even if the con- S3 Platform. In general, however, smart speciali- cept has not been formally adopted’ (Lindqvist et sation in Denmark is currently adopted at the na- al., 2013: 18). These adopted components include tional level only (Polverari, 2016). regional partnerships, prioritisation of sectors, The official national commitment towards knowledge development and the implementation smart specialisation is found in the national op- of various policy measures (ibid). Regional authori- erational programme for the European Regional ties have the strategic and political responsibility Development Fund (ERDF) 2014–2020, Innovative for regional business development (KMD, 2018). and Sustainable Enterprise Growth (Danish Busi- It is important to note the role of the Plan- ness Authority, 2014). This programme comprises ning and Building Act from 2008 in underwriting the preconditions that should be met to qualify the scale and scope of regional planning in Nor- for funding by the ERDF, and it highlights how way. The Act sets the framework for sustainable Denmark’s existing policy frameworks meet these regional development for future generations by nordregio report 2019:3 22 Box 4: Nordland, Norway Nordland county comprises 38,456 km2 of aspects for the region. The strategy work land in the north-western part of Norway. It began in Nordland in 2013, when the regional has a population of approximately 242,000 authorities were informed of the possibilities inhabitants, with the largest concentration of S3. An evaluation study was commissioned centred in Bodø, the regional capital (which by the county, after which S3 was officially has about 50,000 inhabitants). Nordland is included in the regional innovation strategy in mostly known for its extensive fish farming 2014. Nordland specialises in three distinctive activities, as one-tenth of the world’s salmon areas: the seafood industry, processing is grown there. It also uses hydroelectricity industry (of metals, minerals, chemicals and extensively. The second largest cluster in machines) and experience-based tourism. Norway is situated in Helgeland, and it The chosen fields represent the existing R&D specialises in minerals, metal, fish, oil and gas and industrial sectors, and are all export and green hydroelectric power. Nordland’s orientated (Foray et al., 2012; Nordland main innovation centre is the Nord University County Council, 2014). in Bodø, with 6,000 students. Nordland’s County Administration has Nordland has not published a separate S3 also taken steps to enhance the competences strategy document, but instead has produced on S3 amongst key stakeholders in the region a wider innovation-related Innovative and hosted three lectures in a seminar series Nordland strategy. Thus, smart specialisation entitled ‘the S3 School’ during the autumn of is one part of the broader innovation 2017 (Nordland County Municipality, 2017). activities, which tend to focus on educational

co-ordinating the tasks relevant to actors at the been to ‘empower regions with competences and national, regional and municipal levels. Its jurisdic- responsibility for research and innovation, and to tion spans the protection and utilisation of natural give regions more autonomy in designing targeted resources, area planning, and appropriate and policy mixes’ (Sörvik and Midtkandal, 2016: 157). timely actor engagement (Lovdata §1-1, n.d.) In In 2013, the Research Council of Norway decided light of the development of smart specialisation that the VRI programme, with many features simi- strategies, the law regulates the framework within lar to S3, was to emulate the smart specialisation which S3 can develop, rather than specifying the concept (RCN, 2013). One of VRI’s key objectives processes required to fulfil legal requirements. was to develop methods for regional analyses, In September 2018, the Ministry of Local Gov- which resulted in the identification of a limited ernment and Modernisation published a guideline number of prioritised areas, and proposed targeted (Veileder), Smart Specialisation as a Method for Re- policy activities (Sörvik and Midtkandal, 2016). gional Business Development, thus taking on a co- VRI’s successor is the ongoing FORREGION (Forsk­ ordinating role and suggesting a growing overall ningsbasert innovasjon i regionene) programme. interest in S3 in Norway (cf. Smart Specialisation This programme focuses on supporting research- som metode for regional næringsutvikling; KMD, based innovation at the regional level. Here, too, 2018). This guidebook reiterates the compatibility smart specialisation has inspired the design of the of S3 and the Planning and Building Act, as the legal programme. For example, smart specialisation text does not concern strategies, although it does approaches guide the dialogue between various encourage further integration of S3 thinking in the regional and national actors, and the FORREGION revision of regional plans, which occurs every four programme’s specific activities will be ‘based on years. the unique opportunities and challenges found in In recent years, the national support for re- each region’ (RCN, 2017a). The RCN continues to gional smart specialisation has been undertaken gather knowledge and experience on smart spe- by the Research Council of Norway (RCN, Forsk­ cialisation by following up and monitoring the ningsrådet). The precursor for these guidelines was FORREGION initiative (RCN, 2017a). These pro- the Programme for Regional R&D and Innovation grammes have been important for the building of (VRI), which ran during 2007–2016. VRI’s aim has partnerships at the regional level. nordregio report 2019:3 23 Several Norwegian regions have begun work- tional frameworks introduced in the National Re- ing with the smart specialisation concept (RCN, gional Plan. The Regional Destination Management 2016), and seven regions have registered on the Plans for the tourism industry focus on regional EU’s S3 Platform. For example, the county of Møre strengths, echoing smart specialisation. Addition- og Romsdal developed an innovation strategy for ally, Iceland is currently developing a new National 2016–2020 with the smart specialisation method Innovation Policy to be introduced by the end of in mind (Møre og Romsdal County Council, n.d.). April 2019. Another county, Nordland, officially included S3 in Smart specialisation remains a relatively un- its regional innovation strategy in 2014. familiar concept in Iceland compared with the ac- Although S3 does not bring entirely new con- tive integration of S3 into regional development cepts to Norwegian regional development efforts, policies elsewhere in the Nordic Region. The move it continues to provide the country with a rationale towards stronger regions and a more devolved to guide its innovation system, thus incentivising governance structure may incentivise S3-like poli- further exploration of innovation (Mariussen and cies in the future. Finne, 2017). Faroe Islands, Greenland and Åland Iceland The Government of the Faroe Islands does not Icelandic policy making for innovation and eco- engage actively in smart specialisation nor is it a nomic development is dominated by policies at the partner in S3 networks. However, there are some national level, owing to the governance structure specific areas of investment and collaboration and the limited number of regional-level policies that are in line with S3 thinking. The Faroe Islands in the country (Lindqvist et al., 2013). In fact, the government has decided to promote the country ‘regional’ concept is limited in use, as Iceland has a as ‘a maritime service hub’ and ‘a shipping country’ dual governance structure: national and municipal (The Government of the Faroe Islands, 2015). Sup- (ibid). Iceland, as a non-EU member, is not required port is also given to areas of aquaculture, tourism by the ERDF incentives to adopt a smart specialisa- and various creative industries, such as gaming tion approach in its regional development policies. and film. Further, collaboration efforts have been Although Iceland has not formally adopted initiated and supported between the University of the smart specialisation concept, some frame- the Faroe Islands, the research environment and works and processes incorporate the general ra- industry (ibid). tionale and ideas of S3. For example, Iceland 2020, In Greenland, there are no references to smart a guiding Icelandic policy statement, is a product specialisation at the national level. Interest in an S3 of collaboration and consultation with the general approach to policy formation has been shown only public, business interest groups, trade unions, lo- by one municipality, Kujalleq. Taking part in the EU cal authorities and regional associations. Moreo- Regional Innovation in the Nordic Arctic (REGINA) ver, regional growth agreements between eight project, which focuses on local smart specialisa- rural regions and the central government have tion (LS3) strategies, Kujalleq initially surveyed lo- uncovered regional prioritisations in, for example, cal companies to map out skills, competencies and tourism activities related to nature and culture, development strategies in the region. The next finished food products and renewable and eco- step in its LS3 participation strategy is to engage friendly energy (ibid.) local stakeholders in REGINA workshops to discuss More recently, Iceland has devised Regional local challenges and possible solutions. Kujalleq’s Growth Plans (Sóknaráætlanir landshlutanna) to current targets include skills development in food incentivise place-based strategies for innovation production and growth in innovative processing and regional development (Samgöngu og sveitar- techniques (Jungsberg et al., 2017). stjórnaráðuneyti, 2018b). This is breaking with the Åland has incorporated smart specialisation tradition of innovation policies being concentrated in its Innovation Strategy 2014–2020. The smart at the national level, confirming the trend of shift- specialisation strategy builds on the region’s ing innovation and funding to the municipal level. Structural Funds Programme: Entrepreneurship In these instances, the municipalities collectively and Competences 2014–2020 and the education formulate innovation strategies. These strategies policy Competence 2025. The Ålandic approach to are developed in conjunction with the new na- S3 emphasises EDP, seeking to support companies nordregio report 2019:3 24 in knowledge development rather than through companies with growth potential (with manufac- traditional R&D investment (Innovation Strategy turing as the main industry) (S3 Platform, 2018). 2014–2020). Åland has identified special innova- Smart specialisation approaches are being tion potential in the maritime sector, and thus, it incorporated into regional strategies to an in- highlights maritime-related industries as a focus creasing extent, as exemplified, for example, by point for smart specialisation strategies (Ålands on­going strategy processes in Finland that are be- landskapsregering, 2014). ing structured according to the S3 concept (c.f. the Finnish Pirkanmaa and Central Finland’s drafts Regional level: S3 approaches in Nordic regions for regional programmes). In its draft for the re- The key objectives of the smart specialisation gional programme 2018–2021, Central Finland’s concept revolve around finding regional areas of overall goal of regional well-being/welfare is to be strength and mobilising various relevant stake- achieved through five identified S3 spearheads, holders in the process. However, this does not and South Karelia’s forthcoming innovation strat- mean that the regions are developing narrow and egy will have the role of a designated regional S3 exclusionary innovation policies. For the Structural strategy (Regional Council of South Karelia, 2017). Funds, these aspects are highlighted in regional- Smart specialisation is also figuring as a tool for level strategies, regardless of whether these are regional economic growth and development in the labelled innovation strategies, separate S3 strat- Arctic region (Teräs et al., 2018). For more infor- egies or general regional programmes. However, mation, please see information box 5. Engaging with there are diverging levels of engagement with S3 showcases the fact that it is not regarded as a the smart specialisation concept across different disconnected strategy in relation to regional pro- regions, ranging from full implementation of S3 grammes; instead, S3 is regarded as a potential strategies to merely probing the general rationale foundation on which to build regional programmes of the concept. Further, there are different em- and a tool for strengthening interregional collabo- phases on whether the selection of priority areas ration. or the level of stakeholder inclusion should be the primary focus of attention for regional authorities. On a Nordic level, S3 engagement dates back Box 5: Smart Specialisation in longest in Sweden and Finland, and the most Sparsely Populated Arctic Areas extensive S3 strategies can be found in Swed- (Teräs et al., 2018) ish and Finnish regions. Swedish Östergötland, S3 holds significant potential for addressing Skåne, Värmland and Örebro, and Finnish South challenges in sparsely populated areas. Ostrobothnia, Helsinki–Uusimaa, Kymenlaakso Exploring S3 in an Arctic context, this and Lapland exemplify substantive regional-level report gives an overview of the relative smart specialisation efforts. Some of these strat- contexts and support mechanisms egies, such as in the Finnish regions of South Os- available for S3 in these regions. Pioneering advanced interregional collaboration and trobothnia, Kymenlaakso and Helsinki–Uusimaa, joint efforts are part to unlocking the S3 include an action plan for monitoring the develop- potential in the Arctic, especially for ment of the strategy and its implementation. The ensuring critical mass formation. This evi- most comprehensive strategies on S3 disclose the dent in the case reasoning behind their priority selection, and com- studies provided ment extensively on stakeholder involvement (cf. in the report. Regional Council of South Ostrobothnia, 2014; Hel- The report was Smart Specialisation in Sparsely sinki–Uusimaa Regional Council, 2015; Kymenlaakso Populated European Arctic Regions co-authored and Liitto, 2016). In Denmark, Syddanmark’s smart published by the

Jukka Teräs, Viktor Salenius, specialisation strategy places sustainable energy, Laura Fagerlund and Lina Stanionyte Joint Research health and welfare technology, and experience- Committee (European based businesses at the forefront of economic 2018 Commission) activities (Interreg Europe, 2018). Stakeholders in and Nordregio, Midtjylland, in turn, have developed various pro- 2018. grammes, methods and tools targeted towards EUR 29503 EN

nordregio report 2019:3 25 However, many regions keep smart speciali- and knowledge available. When considering regional sation separate from their regional programmes. domains, the green economy, or the bioeconomy, Often, S3 has been allocated a designated place holds a promising place in the quest for possible in regional innovation strategies or as a strategy smart specialisation strategies. This builds on one of its own, either as a comprehensive overview of of the EU’s seven pillars for ‘smart, sustainable S3 objectives or as a brief overview. An interesting and inclusive growth’ across countries and regions exception in this regard is the Finnish rural region in the union, the ‘Innovative Union’ (EC, 2010c: of Kainuu. In its regional plan, Kainuu states that 11). The concept of the bioeconomy has gained S3 approaches tend to prioritise high-level exper- increasing policy attention in recent years and is tise in R&I, rather than allowing for a more diverse particularly prominent in R&I agendas across the approach to ensure employment. Therefore, the EU. Additionally, it is considered a research priority. industrial Kainuu region recognises a need to ac- The report Bioeconomy Development in EU Regions commodate its top industries, which tend to re- states that 207 out of the 210 territorial units quire lower skilled labour, as well as identifying analysed include bioeconomy aspects in their R&I priorities within the framework of smart speciali- plans (EC, 2017). However, their focus areas for sation (Kainuun Liitto, 2017). a bioeconomy vary significantly, with agro-food Not all regions have welcomed smart speciali- priorities being the most common (ibid). It is also sation as a guiding tool. Some that have not wel- important to note that the authors do not claim comed S3 include regions of Norway and Denmark, that smart specialisation causes the green transi- and some of Sweden’s southern regions. In Sweden, tion. Rather, it is contributing to fine-tuning and the regions of Jönköping, Halland, Kronoberg, Ble- developing new perspectives on the use of natural kinge and Kalmar (SBHSS), which form an area resources that may help push the green transition that is predominantly rural, have not joined the and the bioeconomy along. S3 Platform. However, these regions have joined The Vanguard Initiative is one such initiative forces in regional economic development and, (Vanguard Initiative, 2016). It creates transregion- through their joint organisation known as SBHSS, al value chains in an industry-driven process, aided they have identified two strong areas in which by public support to overcome the ‘valley of death’. they continue to invest, namely smart housing and It applies the smart specialisation concept to make smart production2. Although these regions clearly a difference in the market and has a pilot project do prioritise specific areas of regional growth, on the bioeconomy (Vanguard Initiative, n.d.). smart specialisation has not been included in the With the bioeconomy playing an important part in regions’ current development strategies or vo- the resurrection of regional economies across the cabularies. One step to further the adoption of S3 EU, it would be interesting to take a closer look at is the proposal by the SBHSS’s managerial group, its relevance to smart specialisation. Furthermore, the ‘chefgrupp’, to establish a working group to a recent EU study maps the envisioned priorities identify the wider region’s strengths within the S3 and activities related to R&I in the bioeconomy in framework. EU member states and regions (Spatial Foresight The selection of priority areas in different re- et al., 2017). gions has not received a unanimously positive re- One example of using existing local and re- ception. Although Finnish regions tend to make newable resources to further local economic de- specific prioritisations, some Swedish regions dis- velopment through green smart specialisation is card priority selection as a part of their strategy the renewed focus on the forestry sector. Smart processes. specialisation may be a way to bolster the sector’s role in a wider regional development perspective. Smart specialisation and the green Additionally, the forestry sector as part of the bio- transition economy plays an integral part in a myriad of EU In the Nordic context, smart specialisation as a policy objectives. These include climate–energy, place-based approach is also linked to the pursuit biodiversity (Bell et al., 2018), industrial policies of a green transition due to the nature of resources and the EU’s Cohesion Policy, with the latter being an important source of funding for SMEs and new entrepreneurial searches (McCann and Ortega- 2 http://sbhss.eu/files/Handlingsprogram/Verksamhets­ inrikting_forslag_2016.pdf Argilés, 2013). At the very core of the smart spe- nordregio report 2019:3 26 cialisation agenda is this ‘partnership-based policy process’, which draws on the insights of entrepre- Box 6: Paper Province neurs and policy makers, ensuring strong links be- Paper Province is a forestry company cluster tween regional and industrial policies and the cre- comprised of 100 companies located in ation of viable domains (ibid., 2013: 1300). Thus, Värmland, Sweden. It was established in 1999 in an effort to attract and recruit the link between the bioeconomy’s knowledge employees with the right competences. The focus and forestry as a ‘domain’ in smart speciali- Paper Province is a world leading cluster in sation is highly relevant, as it fundamentally draws forestry bioeconomy. The cluster received on local resources, tacit knowledge and know-how: the EU’s highest award for clusters in 2017 simply put, it has an incremental potential to add – Cluster Management Excellence Gold value. (Paper Province 2019a). Paper Province is also partaking in the Bioeconomy Region, Bioeconomy and S3 in the Nordic Region an Interreg Sweden – Norway collaboration The bioeconomy is firmly situated within R&I focusing on the commercialisation of frameworks. It adds to the knowledge economy, products, services and new techniques in enhances innovation systems and demands fa- the bioeconomy, and the transition from a vourable investment and policy frameworks. Local fossil economy to the green economy (Paper Province 2019b). bioeconomy efforts indicate the potential for a renewed focus on industrial policy. Moreover, the bio­economy allows for the creation of a smart spe- cialisation strategy that encourages knowledge The green transition in a wider perspective spillovers and innovative thinking in business mod- The bioeconomy as a domain under smart spe- els, as well as aggregating a range of relevant sec- cialisation has wide-reaching effects and could tors and activities. Taking the Finnish and Swedish feed into the green transition at a higher level. forestry sector as a case in point, it is evident that Digitalisation has revolutionised the way in which the innovations occurring in this sector of the bio- the bioeconomy sectors such as the forestry sector economy hinge on the ‘novel matching of existing operate (see more about e.g. Intelligent Forests in scientific and technical knowledge’ in the specific Metsä Group n.d.), as well as it helps facilitating regions (Foray et al., 2011: 7), as well as increased processes, collaboration and trade and, even more R&D budgets to further explore innovative appli- importantly, contributing to improved prospects cations, for example, of nanotechnology and bio- for wider regional resilience. It can be argued that technology, as has occurred in Finland (ibid). with the smart specialisation agenda, regional de- Considering the case of the Paper Province in velopment becomes increasingly all-encompassing, Värmland, Sweden, the spillover effects and links placing emphasis on spatial planning and spillover established in the region have arguably encour- effects between industries (McCann and Ortega- aged entrepreneurship in associated sectors; this Argilés, 2015). In turn, this may assist in the re- is the ‘feeding and nursing’ required to ensure a naissance of otherwise ‘forgotten’ industries, successful smart specialisation strategy (Foray et elevating them to greater national importance. al., 2011). Furthermore, to ensure stable prospects This is particularly evident in terms of anticipated for the use of forest resources, the continued use of regional value creation (Bell et al., 2018), regional smart specialisation strategies and the creation development and cohesion (McCann and Ortega- of an interconnected web of actors, favourable Argilés, 2015) and, arguably, the creation of a gen- frameworks must be in place, in terms of both pol- eral optimistic outlook for the sector and its po- icy and investment opportunities. Thus, providing tential investors. The green transition will further ‘cushioning’ for a ‘bumpy risk landscape’ through realise the potential for viable regions in the fu- long-term funding mechanisms and the establish- ture, which emphasises the importance of recog- ment of national or regional smart specialisation nising the benefit of such domains. Together with strategies is essential (McCann and Ortega-Argilés, smart specialisation and regional resilience, the 2013; Mazzucato, 2013). bioeconomy and the subsequent green transition may work their way into the fabric of regions that are endowed with sustainable quantities of bio- mass and natural resources. Smart specialisation nordregio report 2019:3 27 may enhance the success rate in implementing the knowledge creation, smart specialisation coupled regional bioeconomy agenda through funding, R&I, to the bioeconomy may have a negative effect. knowledge sharing and entrepreneurship. Thus, smart specialisation may create an increas- However, it is worth noting that although ingly bigger gap between regions that encompass smart specialisation and regional resilience go both knowledge centres and natural resources, hand in hand, smart specialisation can also in- and those that do not. Furthermore, following crease regional disparities. As smart specialisa- the same logic as for competitive advantage, the tion builds on innovation systems, it is inherently bioeconomy in a smart specialisation perspective focused on R&I frameworks (McCann and Ortega- may act as a lock-in hindrance in the future. Thus, Argilés, 2015). Arguably, this requires and assumes key questions are how this may be avoided, and certain prerequisites in terms of triple helix linkages how smart specialisation can remain sufficiently (i.e., linkages between universities, companies and flexible to avoid regions ‘getting stuck’. Achieving the public sector), or at least the existence of a this agility and flexibility will be vital in ensuring university or research institute within the region the compatibility of domains, smart specialisation that undertakes research relevant to the domain and regional resilience. in question. As such, in regions with lower levels of

nordregio report 2019:3 28 3. Methodology

This section will describe the methodology ap- of S3 implementation. It states that the monitoring plied in this report. It will refer to the existing ap- system for S3 should pursue two essential objec- proaches to understanding S3 (often referred to tives: (i) assess the output produced by funded as research and innovation for S3 [RIS3]) from a projects within the realm of each S3 priority; and policy perspective and provide a summary of three (ii) measure the result in terms of socio-economic comprehensive approaches identified through a objectives achieved for each S3 priority. However, literature review. Following this overview, a ration- despite this set of guidelines, monitoring continues ale for selecting the case studies for empirical re- to be regarded by many regions as an ‘additional search will be provided, followed by an overview of burden rather than as an instrument for strategic methods for data collection and their purposes in management’ (Gianelle et al., 2016: 112). There are light of this report’s objective. a few reasons for this attitude, namely:

Approaches to S3 policy analysis (i) the lack of indicators due to the novelty of the As Foray and Goenaga (2013) aptly point out in concept, which necessitates the building of new their policy brief, ‘the need for data and indicators databases (Sörvik and Kleibrink, 2015) about smart specialisation are critical … [to] track (ii) the complexity of the econometric analysis progress, assess structural transformations and and the level of detail of the databases, which compare strategies’ (2013: 10). Despite the ex- complicates the process of pre-and post-evalua- tensive spread of the S3 concept in the European tions of RIS3 (Feder, 2015) policy context, information on how the impact of (iii) the lack of a comprehensive theory and frame- S3 can be measured quantitatively remains rela- work for evaluation (Feder, 2015). tively scarce (e.g., Rodríguez-Pose et al., 2014). A Handbook on Implementing Smart Specialisation Table 2 presents a selection of approaches to S3 Strategies was released in 2016 to provide guide- studies identified through a literature review. lines on how to plan the monitoring and evaluation

Table 2: Overview of approaches to S3 analysis

Approach Brief description References

Governance-based This study suggests that diversity in implementation is Kroll, 2015 approach (to the strongly determined by differences in general institutions interpretation of RIS3 and, more importantly, regionally specific modes of outcomes) governance.

Connectivity analysis Connectivity analysis is used as an input in structured Virkkala et al., 2017 dialogues among leading stakeholders on S3 policy making and implementation. This approach may lead to policy interventions supporting entrepreneurial discoveries.

S3 six-step The study analyses similarities and differences in the Teräs and framework for smart specialisation implementation processes in different Mäenpää, 2016 implementation regions within the same national context.

nordregio report 2019:3 29 Kroll (2014) systematically reflects on the first Another approach to RIS3 evaluation has been experiences of implementing RIS3 in European proposed by Virkkala et al. (2017). They suggest a regions. Specifically, he addresses the persistent connectivity analysis where triple helix stakehold- failures to achieve the S3 agenda’s objectives and ers (universities, companies and the public sector) examines where policy makers have found that collaborate in an EDP specifically for monitoring bottom-up RIS3 processes yield positive results the implementation of smart specialisation strat- in cost–benefit analyses. Two Europe-wide online egies. Figure 4 illustrates connectivity in the EDP surveys were conducted in 2013 and 2014. They and shows how increased co-operation creates yielded a sample of 80 full answers per survey, more opportunities for innovative interaction. Prox- which was sufficient for a regression analysis but imities and gap analyses are the primary methods not for complex quantitative modelling. Based on of the connectivity analysis and policy model. these findings, the study shows that the require- Teräs and Mäenpää (2016) make use of a six- ments of smart specialisation, which is a complex step framework to analyse and compare the dif- process, are high for regional policy makers and ferences in RIS3 strategy formulations in two cannot easily be fulfilled by many less experienced Finnish regions, Ostrobothnia and Lapland. The regions. Nevertheless, the study found that the steps comprise: (i) analysis of the regional context RIS3 processes had benefits, with their major mer- and potential for innovation; (ii) governance by en- it being ‘in their contribution to changing routines suring participation and ownership; (iii) elaborat- and practices of governance even if those, for now, ing an overall vision for the future of the region; remain without measurable effect on policy’ (Kroll, (iv) identification of priorities; (v) policy mix, prep- 2015: 1). Table 3 summarises some outcomes of aration of policy mix, roadmap and action plan; the RIS3 processes by EU member state groups. and (vi) integration of monitoring and evaluation Kroll’s study is an interesting benchmark to con- mechanisms. The study reveals first, that the im- sider for the purpose of this report and to inspire plementation of S3 is time-consuming (compared implementation in the Nordic Region. with the estimated timeframe set by the European

Table 3: Outcomes of RIS3 process by EU member state groups

Central Southern Eastern Contingency Europe Europe Europe coefficient

Novelty of process/routines Not at all or only in some respects new 78.3% 55.6% 65.5% 0.054 In many respects or totally new 8.7% 38.9% 31.0%

Novelty of findings High/very high degree of novelty 8.7% 38.9% 31.0% 0.390 Moderate degree of novelty 56.5% 44.4% 41.4% Low/very low degree of novelty 21.7% 11.1% 13.8%

Main effect/benefit Clearer focus of allocations 38.1% 23.5% 6.9% 0.041 Better understanding of potentials 14.3% 58.8% 48.3% Renewal of planning culture 19.0% 5.9% 34.5% Technical improvement through 9.5% 0.0% 3.4% methodological input

Overall cost/benefin assessment Benefins outweighed costs 43% 76% 38% 0.133 Benefins equalled costs 5% 12% 38% Costs outweighed benefits 14% 6% 17%

nordregio report 2019:3 30 Connectivity model Public organisations

Companies EDP Universitites

REGION

Figure 4: Triple helix connectivity in the entrepreneurial discovery process. Source: Virkkala et al., 2017

Commission) and second, limited participation by they cover urban and capital regions, rural regions, companies and entrepreneurs in the EDP increases Arctic and island typologies, hi-tech and low-tech the risk that existing regional capacity will not regions, university regions and regions with strong be realised. Third, it finds that regions are often industrial sectors, as well as early adopters of S3 motivated to participate in the S3 work primarily and ‘latecomers’. Although smart specialisation is because of its status as an ex ante condition for an EU ex ante conditionality, it was important for receiving EU structural funding. this report to adequately cover all Nordic countries, regardless of whether or not they are EU member Empirical research: Case study states. Thus, the case studies in this report: selection Nordic regions are at the centre of this empirical 1. Represent a diverse set of regional typologies in research on S3, and the empirical case studies are the Nordic regions based on qualitative approaches. According to Yin 2. Identify an approach to smart specialisation, or (2018), using case studies—e.g., as a means to in- de facto smart specialisation, as a regional focus vestigate the effect of introducing a policy strate- area gy—is a holistic approach to understanding mate- 3. Allow for cross-case analysis to identify the exist- rials and evidence, and the complexity allows for a ence of a Nordic model of smart specialisation. richer methodological approach. The case studies for this report consider the national policies and As green aspects have a strong impetus in the support systems for regional smart specialisation; Nordic industrial model, the report also addresses the allocation of responsibilities in terms of S3 be- the ways in which smart specialisation may help tween national and regional levels; the readiness drive the green growth agenda forwards in the for and uptake of S3 in Nordic regions; and op- Nordic Region. portunities for Nordic collaboration in the light of interactions and interdependencies between the Empirical data collection and analysis Nordic regions in terms of thematic innovation pri- This report used a variety of methods to collect orities, industrial clusters and value chains. Different the empirical data, as follows: typologies are utilised, as the challenges and op- portunities faced by urban and sparsely populated n Desktop research: Primary and secondary regions in terms of S3 may differ. sources (strategy documents, policy briefs, aca- demic articles etc). Case study selection n Semi-structured stakeholder interviews: 4–6 in- The six case study areas were selected on the ba- terviews were conducted for each case study, de- sis of territorial diversity in the Nordic Region, and pending on the stakeholders’ relative positions in nordregio report 2019:3 31 relation to the implementation and their roles in Desktop research: Primary and secondary smart specialisation or innovation. More precisely, sources the interviewees were selected on the basis of In addition to conducting case studies, extensive their thematic relevance and the groups to which desktop research was conducted, where docu- they belonged, which were classified as follows: mentary primary sources (e.g., regional develop- regional growth agencies, regional administrative ment strategies, documents produced by govern- boards, national and regional funding agencies, ment agencies, etc.) were analysed, and secondary stakeholders at universities or research institutes, sources (e.g., scholarly articles) were considered cluster organisations and knowledge consortia. to further the contextual analysis. According to The interviewees were selected based on the authors’ Vromen (2010), the qualitative use of primary network. Interviewees were also identified on sug- sources is purposeful for providing an historical gestions by regional and national stakeholders. overview and adding context and depth to the n Cross-case analysis and benchmarking: Using case study analysis. The desktop research con- the information gathered from the desktop research ducted for this report occurred both before and and the interviews, a comparative analysis of the after the stakeholder interviews and informed the case study regions and their positions with regards semi-structured interview process. to smart specialisation was conducted, which as- sisted in benchmarking and making policy recom- Semi-structured stakeholder interviews mendations. Following a pre-defined question template, all in- terviewees were asked similar questions on aspects The table (Table 4) below presents the informants of smart specialisation in relation to their role in and the nature of their place in the regional inno- the region’s innovation system. To allow for depth vation system. Note that regional differences and and elaboration on specific areas of interest, the availability of actors was not uniformly available, interviews were semi-structured. The interviews and that for the case of Iceland, the national gov- were recorded and subsequently transcribed. The ernment is represented as there is no regional au- analysis that followed was based on what the in- thority platform (Lindqvist et al 2013). The table terview questions and answers revealed to be the also reflect the way in which the regions work with most pressing smart specialisation issues, with a S3 and what emphasis it is given, as well as giving particular focus on enablers and impediments to space for the different contexts pertaining to ac- the innovation policy tool. The analysis was based tor involvement and stages of S3 implementation. on thematic resonance (Vromen, 2010), in that

Table 4: Informants 2018

Region Regional/ Innovation and Research Businesses Business National Development Institutes/ Clusters Authority Agency/ Experts Corporation

Kymenlaakso 2 3 1 1 0

Stockholm 1 1 2 1 1

Midtjylland 1 1 1 1 0

Nordland 2 3 1 0 1

Iceland 3 0 2 0 0

Åland 3 0 1 0 0

Authors’ elaboration based on table in Teräs (2008: 80). nordregio report 2019:3 32 codes and themes emerged from a comprehensive to assess the potential of S3 in a specific context. analysis of interview transcripts in the empirical Furthermore, the purpose of the cross-case analy- research. The case studies also used a number of sis and subsequent benchmarking is to find common quotations from the interviewees to inform the ground and develop ‘good practice’, i.e., examples content and scope of the analysis. that assist in developing and improving a smart To ensure the anonymity of the stakeholder specialisation discourse and policy objective in the interviewees in the text, all quotes and in-text cita- Nordic countries. tions have been given a code pertaining to their region and their interview number (e.g. K1, S2, M3, Limitations of the study N4, I5, Å6…). The interview list has been organised It is important to note that this report is subject to follow in alphabetical order and it does not reflect to limitations. Although the Nordic Region seem the interview number. Neither does it reflect the comparable on the surface, the countries differ in regional code. a number of different ways. This includes culture, innovation systems, industrial history and poli- Cross-case analysis and benchmarking tics. As such, the report’s starting point is from a In research focusing on regional development, framework based on contextualised comparisons success stories often take the central stage, ac- (Locke and Thelen, 1995). Despite these differences, cording to Teräs (2008). The purpose of the case there still seem to be lessons learned through good studies in this report is thus to highlight not only practices across the countries formatted to fit the the stories of successful implementation of S3, context of the country in question. but also take account of regions that are lagging The study is also replying on a limited sample behind – or indeed, countries that have not adopted of regions, and with only one region from each an S3 policy at all. In terms of the latter, these cases country (except Finland: Kymenlaakso and Åland), will primarily focus on the characteristics of the the report is not intended to make generalisations country or region’s innovation system as a means for the countries at large.

nordregio report 2019:3 33 4. Nordic regional case studies

Overview been adopted in the regions. All quotes in this case This section presents the empirical findings from study, and to some extent the policy documents, the case study research undertaken, and is based have been translated from its original language to on desktop research and interviews with key English. stakeholders identified in the Nordic Region. The As previously mentioned, the case study areas interviews were conducted between March and were selected to ensure the territorial diversity in October 2018. To uphold stakeholder anonymity, the Nordic Region was reflected. They cover urban the interviewees are not identified in the text and and capital regions, rural regions, the Arctic and the codes provided are randomised. However, a islands, hi-tech and low-tech regions, university full list of interviews is provided at the end of the regions and regions with strong industrial sectors report. The case studies vary in length, depending and, finally, early adopters of S3 and latecomers. on the degree to which smart specialisation has Table 5 illustrates the case study regions identified.

Table 5: Case study regions

Country Region Typology

Finland Kymenlaakso Early adopter, industrial, rural, EU member

Sweden Stockholm Capital region (urban), hi-tech, EU member, universities, critical mass availability, late adopter

Norway Nordland Rural, industrial, university, non-EU member, early adopter

Denmark Midtjylland University, critical mass availability, rural, bioeconomy, strategic adopter

Iceland Iceland Challenge critical mass, rural, industrial, non-EU member

Åland Islands Åland Challenge critical mass, rural, strategic adopter

nordregio report 2019:3 34 Figure 5: Map of the case study regions. Source: Eeva Turunen / Nordregio. nordregio report 2019:3 35 FINLAND: KYMENLAAKSO Kymenlaakso Region by Eeva Turunen Two centres and their surrounding rural areas: Kotka–Hamina subregion & Kouvola Introduction subregion Kymenlaakso is situated in the south-east of Fin- Number of residents: 175,511 (Dec 2017) land, between the Russian border and the Helsinki Area: 7,455,51 km2 (including water areas) metropolitan area. Access to Russia has been sig- S3 domains: Bioeconomy, logistics and nificantly improved by a new fast train connection digitalisation from Helsinki to St. Petersburg via Kouvola, and by significant investments in E18 motorway improve- ments. The European route E18 passes one of the its capacity by 32% and became a modernised busiest border crossing points (Vaalimaa–Torf- mill, producing paper and bioenergy as well as janovka) on the Finnish–Russian border and ends pulp (Regional Council of Kymenlaakso, 2016: 14). in St. Petersburg. Kymenlaakso is divided into two KotkaMills and Sunila factory by Stora Enso are subregions: Kouvola to the north and Kotka–Hamina some of the other key actors in the region. They to the south. are known for their specialised products, such as The region is known especially for its favour- KotkaMills’s bio-based packaging products and able logistical possibilities and flourishing pulp and Stora Enso’s lignin-based products, the first pro- paper industry. The strongest regional cluster has duced in Europe. been within the field of logistics. Both the Port of Compared with other Finnish regions, Kymen- HaminaKotka and Kouvola’s railway are among laakso has experienced a serious loss in its economic the biggest logistical centres in Finland. A vital competitiveness; its gross domestic product per rail and road node in Kouvola city functions as a capita has been below the national average since thoroughfare for approx. 10 million tons of annual the beginning of the 21st century (Ministry of Eco- imports and exports (Ministry of Economic Affairs nomic Affairs and Employment of Finland, 2018). and Employment of Finland, 2018). The terminal Despite the challenges (e.g., closure of paper mills centre is part of the Trans European Network. and geopolitical tensions, such as the EU–Russia Kouvola has high expectations regarding the sanctions), Kymenlaakso’s strong orientation to- development of cargo traffic. There are about 200 wards international markets, as well as its versa- logistic companies in the region, employing around tile logistics sector, promising forestry industry 2,000 people. A new route between Finland and and areas of related know-how, are encouraging China (Kouvola–Xi'an) was recently opened and factors for the regional economy and its innova- will bring new business opportunities with China, tion environment. Japan, Australia and South Korea. Currently, most Bioeconomy, intelligent logistics, the food in- exports are sawn timber, packaging products, ma- dustry, intelligent packaging technologies, games chinery and equipment. A recent development in and cybersecurity are recognised as the strongest the Port of HaminaKotka has also shown potential areas of growth in Kymenlaakso. Most of them are growth possibilities (Ministry of Economic Affairs part of the region’s smart specialisation strategy and Employment of Finland, 2018). The port has domains and are integrated into the regional de- signed a letter of intent with Finnpulp Oy, a Finnish velopment plan for 2018–2021 (Maakuntaohjelma), company that is planning to open a large softwood as well as in the shorter-term and more detailed bioproduct mill in the city of Kuopio (Finnpulp Oy, regional implementation plan for 2018–2019 (Min- 2018). This opportunity will increase its potential istry of Economic Affairs and Employment of as an exporting port. The monthly transport flows Finland, 2018). In establishing the focus on these from the Port of HaminaKotka are around 1.2–1.6 domains, the recent investments in regional com- million tons (Port of HaminaKotka, 2018.) panies, prospects for development, the region’s lo- Kymenlaakso has a versatile paper and pulp in- cation close to Russia and the Baltic Sea and the dustry sector. UPM Kymi in Kouvola, with 870,000 existing know-how have been taken into account. tons of annual production, is one of the biggest The innovative potential is regarded as strongest pulp mills in Europe. After recent investments within these domains because of their modernising amounting to EUR 98 million, the mill strengthened capacity to foster the traditional business sec- nordregio report 2019:3 36 tors and their opportunity to create cross-cutting The initiative for the region’s smart specialisation synergies, complementing each other’s needs, or strategy and its planning process originated from available capacities. co-operation between the Kymenlaakso University of Applied Sciences (KyAMK), Aalto University and the European Committee of the Regions. The The regional innovation system and University of Applied Sciences was participating smart specialisation in the Change2020 development programme led Creating a new regional innovation system by Aalto University. The aim of the development Kymenlaakso’s smart specialisation strategy, programme was to ‘provide a practical view on how Kymenlaakso Research and Innovation Strategy project organisations, regions and project consortia in- (RIS3), was published in April 2016. Kymenlaakso volved in regional development projects can meet the was one of the first regions in Finland to adopt the smart specialisation requirements of the EU pro- S3 concept to streamline its strategic vision about gramme period 2014–2020’ (Pienonen and Mark- the region’s innovation system. One of the motiva- kanen, 2015) This programme opened the region’s tions for establishing the strategy was to create a eyes to smart specialisation as a concept and to striking profile with clear regional strengths. Such the work being carried out by other EU regions a profile would yield Structural Funds from the EU, under the S3 framework. This realisation was the but would also facilitate the understanding of joint trigger for KyAMK and the Regional Council of regional economic potentials. The interviews con- Kymenlaakso to establish the Kymenlaakso RIS3 ducted for this case study made it clear that project. The Change2020 programme was also the Kymenlaakso was very willing to apply the S3 region’s first introduction to the EU’s ex ante con- framework as a tool to establish S3 domains: ditionality. Before the regional S3 strategy, it had been relatively difficult for Kymenlaakso to receive ‘Kymenlaakso RIS3 process was an important im- Structural Funds from the ERDF or European Social pulse towards creating a common regional vision Fund because of increased competition from other about our long-term strengths and joint opportuni- Finnish regions with similar economic or demo­ ties. It was a first attempt to comprehensively un- graphic profiles and the lower budgets for these derstand our real strengths and joint possibilities.’ regions. (Interview K3 & K5)

Intelligent logistics play an important role in Kymenlaakso's smart specialisation strategy. Source: pixabay.com

nordregio report 2019:3 37 A new regional innovation strategy was seen of selecting the region’s key domains. The project as the region’s opportunity to create an innova- aimed to engage all regional key actors through tion system that stood out from its neighbouring joint workshops and different expert working regions, by developing a highly focused strategy groups. These consultation groups were focused with prioritised areas of specialisation. In selecting on finding crucial challenges, key enabling technol- the three focus domains, the region wanted to fa- ogies and business opportunities with the highest cilitate the focus areas’ possibilities (e.g., through potential under each domain. Each preselected do- the allocation of available funds) to create a critical main had its own consultation group that helped mass through specialisation and to stimulate in- prepare the preliminary assessment of the do- vestments from the private sector. The elaborate main’s existing potential, and facilitated the evalu- strategy was acknowledged as increasing the pos- ation and decision-making process for the regional sibility of success in the tendering process for EU strategy. This form of collective strategy work was funding. The strategy was also expected to en- a new opportunity for an increasingly tight-knit re- hance the ‘Kymenlaakso brand’ and maximise the gional vision, according to one of the interviewees: region’s growth potential and international com- petitiveness by specialising in its actual strengths. ‘Selecting the domains was a chance to engage dif- These opportunities were well recognised at ferent actors working for a common regional vision.’ the regional governmental level. By focusing on (Interview K3 & K5) strengthening the innovation environment within the selected domains, Kymenlaakso is aiming to As well as the leading role taken by the University build more synergies across the business sectors, of Applied Sciences, the involvement of the regional and therefore, to build more resilience in the re- development corporations was clear from the be- gional innovation systems. ginning of the Kymenlaakso RIS3 process. These are local corporations that promote the subre- Smart specialisation in Kymenlaakso: gion’s business opportunities, support startup Optimising scarce resources as a small networks and provide services for regional compa- region nies to develop and access international markets. The development corporations, such as Kouvola The governance of regional smart Innovation (Kinno Oy) and Cursor Oy in Kymen- specialisation laakso, operate at the subregional level. Kinno Oy The current Finnish Government has not directly is owned by the city of Kouvola in the Kouvola sub- adopted the S3 concept, but the government pro- region and Cursor Oy is co-owned by five southern gramme for 2015 and its priorities cover similar el- municipalities in the Kotka–Hamina subregion. ements. This includes reinforcing the partnership During the Kymenlaakso RIS3 process and between universities and the business/private sec- the ongoing strategy implementation phase, the tor, and the government’s funding programme for development corporations have taken on a sig- 2016–2019, the Regional Innovations and Experi- nificant role. The corporations know the regional mentations (AIKO fund), although these elements actors well and their operations are based on a are not properly linked to foster the regional inno- regular dialogue between the regional companies vation strategies (Virkkala, 2015). At the national and the regional management authorities. To- level, the Ministry of Economic Affairs and Employ- gether with the University of Applied Sciences, ment is responsible for regional development in they are responsible for co-ordinating and further Finland. The ministry has informed regions about EDP, while simultaneously communicating the the EU’s S3 ex ante conditionality, with innovation general priorities of the S3 strategy. The RIS3 pro- policy being tied to receiving Structural Funds. cess and the decision to develop a common vision However, without national-level instruments, Ky- was a new approach for the subregions, which had menlaakso has had to take the initiative in building separate strategic visions. Nevertheless, the new its own S3 strategy. shared strategic vision between Kouvola and Kotka– The project and the strategy process Kymen- Hamina helped the main actors to find their roles laakso RIS3—Smart Specialisation in Northern and competent focus areas of work within the Growth Zones started in June 2015, with the aim selected domains. Moreover, it facilitated a more

nordregio report 2019:3 38 targeted regional strategy through focused deci- International funding was received from differ- sions based on preselected areas of specialisation. ent Interreg programmes (Interreg Central Baltic, As an interviewee explained: Interreg Europe and Interreg BSR), as well as the Horizon2020 R&I programme. ‘The concept is facilitating decision-making and cre- ating more focused actions. The domains are bring- ‘The first lesson learned from the Kymenlaakso RIS3 ing more careful consideration for the strategical process was that smart specialisation is an evolu- work and decision-making.’ (Interview K2) tionary process of discovery through strong regional collaboration.’ (Interview K3) The effects of Kymenlaakso RIS3 The S3 concept has helped small regions such as The clear regional focus and genuine willingness to Kymenlaakso realise that determining their key build a shared vision helped Kymenlaakso to stand strengths enables them to optimise available re- out in the tendering process for regional funds. The sources more effectively. Kymenlaakso’s success in other desired effects of the regional S3 strategy recognising its main strengths and identifying the were increased economies of scale and regional S3 domains was the product of a shared vision, a competitiveness. The evolutionary process of dis- strong network and close co-operation between covery and fostered regional collaboration were the regional actors (Interview K1). The S3 concept the key factors in achieving these qualities. encouraged the region to reinforce the industrial synergies and strong regional co-operation, which Contributions to a well-established are acknowledged to be prerequisites for building innovation system a region with an inspiring, innovative environment The final selected domains were digitalisation, and creating stronger economic competitiveness. bioeconomy and logistics. The relative potential The region’s early reaction and the favour- of each of the preselected domains was evaluated able timing for the regional S3 strategy has had against common criteria. These criteria were de- positive effects from an international perspective. scribed in the regional smart specialisation strategy Kymenlaakso is currently participating in several as follows: international projects, including EU macro-policy efforts in the Baltic Sea Region (BSR), such as n the growth potential arising from the develop- Smart-up BSR (Cursor Oy) and BSR GoSmart ment of the operational environment and markets (Kinno Oy), which are focused on furthering the n key expertise in business enterprises and at work with the region’s smart specialisation strat- universities and other higher educational institu- egy and contributing to its strategic goals. These tions and the possibilities to further develop these projects will continue to operate in tandem with n development of domains leaning on the regional the S3 strategy’s implementation phase. Both strengths projects aim to increase the capacity of the inno- n companies’ willingness to participate in EDP vation actors through mutual learning, knowledge and the development process sharing and best practice cases. In addition to n potential to succeed in the international ten- the S3 strategy being linked directly to such pro- dering process jects, the region has promoted its know-how and n targeting of the region’s public investments S3 domain-related specialities to garner further n possibility of stimulating investments in the work with smart logistics (e.g., SmartLog3) and private sector projects related to the circular economy and the n possibility of creating economies of scale bioeconomy (e.g., CircPro4, KYMBIO5 and NERO6). through specialisation n networking potential, both internationally and nationally

3 SmartLog, cf. https://www.kinno.fi/en/smartlog n other potential positive indirect effects on the 4 CircPro, cf. https://www.kinno.fi/en/circpro region or other industry sectors (Regional Council 5 KYMBIO, cf. https://www.xamk.fi/tutkimus-ja-kehitys/ kymenlaakson-biotaloustoimintaympariston-kehittaminen- of Kymenlaakso, 2016). kymbio/ 6 NERO, cf. https://www.kinno.fi/seudun-kehittaminen/ The three domains are well-known and established kinno/projektit/nero-cost-reduction-nearly-zero-energy- wooden-buildings-northern in Kymenlaakso. The priority areas are clearly pre- nordregio report 2019:3 39 sented as cross-cutting elements in other regional strategies and they are also recognised by the re- PackageMedia Oy is the largest digital package plant in the Nordic countries. Its gional companies, especially by those that have business activity is an interesting example some domain-related operations or activities (In- of innovative entrepreneurship rising terviews K4 and K7). However, stronger engage- at the interface of digital applications, ment of the companies remains a key next step in bioeconomy and smart logistics. With developing a more integrated S3 strategy, as well its agile, flexible and tailored packaging as focusing on international business opportuni- material, its operations contribute to all the ties and markets. However, for a small region such Kymenlaakso S3 domains. Digital package as Kymenlaakso, the advantage is that the actors technology means utilising an omnichannel know each other well and the RIS3 process has strategy approach in the physical packages. been an excellent opportunity to gain a greater The company has been involved in understanding of each other’s operations. the process of S3 strategy formulation and is currently actively networking with regional companies and actors. It co- ‘The most amazing thing is to learn to know the other operates closely with regional sawmill actors in the region well. By getting to know each KotkaMills Oy and has active connections to other, the understanding increases, and compa- regional coding companies. The company’s nies’ real needs and their surplus capacity are much innovative approach of utilising digital easier to identify. It is also much easier to create solutions in the conventional industrial new partnerships when the companies understand production chain creates an iterative each other’s operational work well. The concept has learning and developing process. The brought a successful operational framework to in- production and the products are constantly crease regional synergies.’ (Interview K2) developing and PackageMedia is open to creating synergies with regional companies Even though the domains are fixed and rather gen- and to developing their know-how. eral in their description, their targeted focus areas Negotiations for co-operation with the South-Eastern Finland University of Applied and development priorities are changing and de- Sciences and with a regional educational veloping over time. This evolutionary process guar- centre have commenced. (Interview K4) antees that regional funding and supported ac- tions are targeted to the innovations with the most potential. The domains consist of more detailed subdomains that are founded on the basis of im- In Kymenlaakso, the network within the bio- proved co-operation and active EDP. For example, economy and circular economy is vast, with a few by the end of the Kymenlaakso RIS3 process, the large actors (e.g., UPM Kymi and Stora Enso), and development priorities under the bioeconomy and many micro or small-scale enterprises. Therefore, circular economies were bioenergy, new resource- kick-starting EDP in this domain has required a effective and low-carbon products and entrepre- great deal of work and active communication, neurial activity. After active engagement of local which has largely been the responsibility of the companies, the focus domains were targeted spe- consultation group. EDP under the bioeconomy cifically to construction and sustainable housing, domain commenced with mapping the regional packaging and new bio-based solutions through companies and their operational activities, follow- biochar and innovative waste management. From ing the Kymenlaakso RIS3 process. The first phase the beginning, digitalisation was agreed to be a of the EDP indicated the companies’ willingness cross-cutting domain that could facilitate the cre- to participate and their positive attitude towards ation of interlinkages between conventional busi- building regional synergies. The next phase of the ness sectors. This element has been an important EDP began when a cooperation between Xamk, motivator for clustering around blockchain solu- the Regional Council of Kymenlaakso and Kinno tions in logistics (SmartLog), e-Health and smart Oy started a ERDF funded project to develop the carbon packages (PackageMedia Oy). However, operational environment of the bioeconomy in digitalisation’s focus on cybersecurity and gami- Kymenlaakso (KYMBIO). This project is continu- fication have also been gaining growth potential, ing the systematic work of creating stronger net- with recently established companies in these areas. works between regional actors by focusing on their nordregio report 2019:3 40 strengths. The aim is to foster collaboration be- However, according to an interviewee, some of the tween research institutes, educational institutions working groups have found it difficult to motivate (LUT, Xamk and Aalto University) and companies or communicate the concrete benefits of the EDP dealing with the bioeconomy or circular economy. to companies, which has slowed their activities.

Monitoring the innovation system Challenges and opportunities ‘The potential of the KYMBIO project as well as that Further work is required on the implementation of the Smart-up BSR and BSR GoSmart projects process of the Kymenlaakso regional S3 strat- to support the regional innovation system is ac- egy. The constantly developing EDP and the lack knowledged and noted at the regional administra- of well-functioning monitoring mechanisms are tive level. In fact, the regional expectations rely on universally acknowledged as shortcomings of the these projects to update the regional S3 strategy, current implementation phase of the strategy. by creating a better monitoring mechanism for S3 The future plans for EDP are to engage and mo- implementation, continuing EDP and fostering the tivate more companies through more active and industrial symbiosis between the selected domains.’ effective communication. The RIS3 expert work- (Interview K3) ing groups and especially the ongoing projects (Smart-up BSR, GoSmart, KYMBIO and Smart- Cursor Oy and Kinno Oy are in regular dialogue Log) have a key role in this process. However, some about these parallel BSR projects. BSR GoSmart informants stated that to encourage or improve will focus on regional smart specialisation through the work of the consultation groups, better tools practical joint actions for SMEs. The project is fo- for communicating and motivating the regional cusing on supporting SMEs in their internationali- companies need to be provided. This was pointed sation process and continuing the EDP with these out by several interviewees for this case study: companies. The project is managed by Kinno Oy. In contrast, the Smart-up BSR project has an empha- ‘In order to create and maintain a resourceful strat- sis on the region’s overall S3 strategy. On a pan- egy, the regional actors must understand the EDP Baltic scale, it is addressing the challenges that as a dynamic process. It is a constant learning pro- the regions face in implementing their regional R&I cess to understand regional strengths and time- policies. As a representative of Cursor Oy states, related opportunities.’ (Interview K1) ‘the results are aiming to facilitate regions to realise their policies in practice, eliminate obstacles and During the Kymenlaakso RIS3 project, it was con- leverage their collective knowledge and expertise to sidered that one of the key success factors for the achieve effective regional and transnational collab- regional strategy was its dynamic co-ordination oration’ (Cursor Oy, 2018). By the BSR GoSmart and management. Through systematic manage- project Cursor Oy has been strengthening its role ment of the ongoing projects, this target could be as a leader and co-ordinator of regional smart achieved. However, it is clear that the co-ordina- specialisation. Regional Council of Kymenlaakso is tion and management of the strategy is focused an associated partner in this project. The project around a few key actors who know each other well. is a continuation of the earlier co-operation with In a small region such as Kymenlaakso, staffing Aalto University, which is the lead partner of this changes that affect key people driving the strate- pan-Baltic project. gy (e.g., retirement of a key actor who encouraged In addition to the ongoing projects, the RIS3 the development of the logistic cluster) may have expert working groups, i.e., consultation groups, detrimental effects regarding the communication are responsible for engaging key actors for clus- of or commitment to the strategy. tering purposes and negotiating on the pivotal One of the challenges identified and tied to long-term development needs under each domain. the region’s innovative environment is its econom- Their meetings are held approximately twice a ic structure, which has been based traditionally on year, with the aim of determining which existing large industries. However, recent developments networks, know-how or entrepreneurship areas have indicated that structural change is occurring, have the most potential to advance the cluster. and the region is aiming to increase the number Regular meetings were also intended to function of SMEs with innovative and sustainable business as a monitoring mechanism for the S3 strategy. ideas, using the S3 strategy as a beacon for at- nordregio report 2019:3 41 tracting actors. As an interviewee stated, ‘Well- flective of the long-term strengths of the region. established domains are expected to work as sig- Well-established domains have already brought nals to regional companies’. (Interview K1) clearer common priorities to the agenda and fa- The limited resources of regional councils to cilitated the allocation of the region’s available re- support regional projects or facilitate the co-or- sources. dination of the S3 strategy were acknowledged Fostering the region’s strategic work with as possible impeding factors. However, the possi- smart specialisation relies on the success of the ble regional reform in Finland is aiming to devolve ongoing projects to update the strategy, the crea- more administrative tasks to the regional level and tion of better monitoring mechanisms for project therefore, the allocation of available resources implementation, continuation of EDP and fostering and prioritisation of the S3 strategy could become the industrial symbiosis across the selected do- easier. However, the regional reform is an ongoing mains. These opportunities have resulted from the governmental process and many uncertainties re- region’s earlier efforts and achievements regarding main in relation to it. regional smart specialisation. The lack of concrete and implemented moni- The regional S3 strategy, the Kymenlaakso toring mechanisms was identified as one of the RIS3 process, has enabled the region to stand out key shortcomings of the regional S3 strategy. In in the tendering process for regional funds. The 2016, the Kymenlaakso RIS3 strategy published by strategy’s approach to the S3 domains and its es- the Regional Council of Kymenlaakso listed poten- sential EDP as a dynamic evolutionary process of tial indicators to evaluate the implementation pro- discovery provide the flexibility to develop regional cess. However, these indicators have not been well strengths and foster regional collaboration with utilised. Therefore, the positive achievement of an open-minded attitude. the Kymenlaakso RIS3 process was the continua- In learning from institutional experiences, tion of the co-operation with Aalto University. The greater attention should be paid to small regions Smart-up BSR aims to help update and reinforce such as Kymenlaakso, where the role of a few key the regional strategy and facilitate and systemise actors in driving the development of the region’s its implementation, with the assistance of trans- innovative environment is essential. The ability national collaboration and mutual learning. of the companies to learn about and from smart specialisation depends on both their conceptual Key findings knowledge and the personal relations between re- Kymenlaakso has successfully commenced inte- gional companies. The benefits of a small region grating the S3 concept into its regional strategies. in working with S3 and achieving a successful EDP The region has a genuine willingness to enhance are that the actors know each other well and this the support mechanisms for regional innovations can assist them to create new partnerships. and to reinforce promising domains that are re-

nordregio report 2019:3 42 SWEDEN: STOCKHOLM Stockholm County by Mari Wøien Biggest city: Stockholm, capital of Sweden Number of residents: 2,336,404 Introduction Area: 6 524 km2 Stockholm is often hailed as the ‘hidden’ Silicon Areas of strategic importance: Green city, Valley of Europe, and its formidable innovation healthy city, smart city, inclusive city and capacity should not be discounted. As such, the attractive city region theoretically holds an excellent position for Source: SCB, 2018a and 2018b fine-tuning its innovation system by employing a smart specialisation strategy. Nevertheless, it ap- pears that there are hurdles to overcome before it specialisation strategy. Moreover, it may seem can fully capitalise on the key concepts pertaining as though the work on regional development has to the strategy. been caught in a Catch 22- like position; outper- This case study will examine the reasons for formance resulting in less financial support for de- the slow adoption of smart specialisation in Stock- veloping a refined smart specialisation strategy for holm and the structural challenges that smart future regional growth. The interviews conducted specialisation may encounter in a strong innova- for this case study suggest that this is occurring tive hub such as Stockholm, with a large variety of and, coupled with a lack of political ownership of the diverse actors on the scene. strategy and the limited understanding about the Although a relatively small capital city on a added value of smart specialisation within the po- European scale, Stockholm is an innovative power­ litical governance structures, it has impeded organi- house. A key question is whether Stockholm is sation around the smart specialisation concept. The suffering from a ‘big city’ problem, in that the Stockholm case study presented in this section is complexity of the innovation system hampers the based on both desktop research and interviews mobilisation of and engagement with a smart with local stakeholders and actors in the region.

The areas of strategic importance in Stockholm is centered around creating a smart and sustainable city. Source: shutterstock.com

nordregio report 2019:3 43 Stockholm’s innovation system and politics and moreover, has tended to approach in- the application of S3 novation and innovation strategies from a ‘generalist’ Stockholm is Sweden’s foremost region in terms perspective. The lack of collaboration between in- of R&D (Stockholm Läns Landsting 2018b: 175). It novative SMEs may be a result of this. is home to strong research institutions, including The initial idea of creating a collaborative plat- the Karolinska Institute, the Royal Institute of Tech- form to drive the regional innovation system for- nology (KTH), Stockholm University and Södertörn wards came from the County Governor at Stock- University; has a highly educated population; a holm County Administrative Board (CAB) in 2010, broad business sector; and hosts various head- resulting in the establishment of the collaborative quarters of multinational companies (Stockholm platform Innovation Stockholm. Founders of the Läns Landsting, 2018b). The outward-looking focus platform were the Stockholm County Adminis- for expanding markets and opportunities is an trative Board, alongside Stockholm’s Chamber of additional regional strength, and Stockholm’s in- Commerce, the county council, the City of Stock- ternational reputation draws significant amounts holm, the Royal Institute of Technology (KTH), of venture capital (ibid; Braunerhjelm et al, 2018). Stockholm University, Karolinska Institute, the col- These preconditions are critical factors for fos- laboration of municipalities in Greater Stockholm tering favourable entrepreneurial environments, and the Stockholm Business Region. Innovation building on the existing large knowledge hubs, Stockholm was tasked with the development and and facilitating public infrastructure and human implementation of the regional innovation strategy capital (Braunerhjelm et al, 2018; Stockholm Läns Stockholm 2025: The world’s most innovation driven Landsting, 2018b). Moreover, Stockholm is the economy, launched in 2012. Following dialogue- country’s beating heart, a node for new ventures rounds with key stakeholders and thematic work- and development and an engine for innovation. It ing groups, an adhering Action Plan was launched enjoys a special position as a capital city and the in 2013. In parallel, the strategy became an im- host of decision-making functions, as well as being portant input to the programming process for culturally diverse and creative. Global Entrepre- developing the operational program for the ERDF neurship Monitoring (GEM), which measures and 2014–2020. analyses entrepreneurship, found that business The innovation strategy Stockholm 2025 aimed opportunities in the Stockholm region were very to create an increasingly attractive region with high compared to the rest of Sweden in its 2018 strong collaborations and high levels of R&D outputs national report.7 However, it also pointed to weak- to meet future global challenges. Several key actors ened entrepreneurial activities since its previous from both the industry, academia and public sectors report in 2017 (Braunerhjelm et al, 2018: 7). Albeit, took part in formulating and implementing Stock- this report will focus on the environment pertain- holm’s innovation strategy, which was completed ing to SMEs and the entrepreneurial discovery before the EU’s ex ante conditionality of smart processes leading to establishing new domains, specialisation strategies (S3) came into effect for rather than start-ups. EU member states. Stockholm 2025 thus acted as Based on examining the EU’s RIS performance a substitute for a smart specialisation strategy in for 2017, it is interesting to note that although the programme period 2014–2020, as the national Stockholm is performing at a very high standard authorities stated that Swedish regions were ex- in terms of SMEs’ in-house innovations (EC, 2017a: empt from writing S3 strategies, in consultation 48), it scores lower than its neighbouring counties with the EU. The structure of the strategy was on the indicator ‘innovative SMEs collaborating commented on by one of the interviewees: with others as a percentage of SMEs’, and is only ahead of the south and west of Sweden in this ‘Most regions have innovation strategies that have regard (EC, 2017a: 49). This is in line with obser- staked out areas of relative strengths, but the vations made by a regional actor interviewed for Stockholm region’s innovation strategy has not. We this case study, who pointed out that Stockholm have pointed out strategically important functions, has traditionally been suffering from weak cluster principles and tools. We talk about capital, public procurement, efficient R&D&I systems, etc. but we do not talk about prioritised sectors or challenges 7 The GEM report for 2018 is based on 164,000 interviews from 54 countries (Braunerhjelm et al, 2018). we need to solve.’ (Interview S4) nordregio report 2019:3 44 The efforts to consolidate innovation through the structure for driving the platform and the work on Innovation Stockholm-platform did however cata- S3 forwards. lyse new processes and opportunities. For example, the Royal Institute of Technology took on the re- The Structural Funds partnership sponsibilities for coordinating the R&D infrastruc- and Regional Development ture action plan (KTH, 2015). This resulted in an Stockholm’s regional innovation system is sup- analysis exploring the requirements and opportu- ported by the Structural Funds partnership nities to enable the expansion of open laboratory tasked with the management of the ERDF-funds. environments for researchers, both nationally and The Structural Funds partnership is largely a po- regionally (Svensson, 2015). Through extensive litical organisation, which role is to devise calls for consultations with other knowledge hubs, a total tenders on strategically important projects for of approximately 90 facilities were identified in regional development. Though not strictly focus- different universities or research institutes. The ing on innovation as it also includes the ESF, the laboratory environments that were deemed suit- Structural Funds partnership nevertheless devel- able for public access at KTH were listed on the oped and applied the Stockholm Model: a govern- institutes’ websites and contain 18 different labs ance structure that can be summarised as a model with access to lab equipment for concept verifica- to help concretise the use of EU funding in strate- tion (KTH, 2018). The availability of such laboratories gic initiatives to solve regional challenges through is an important step towards creating a milieu for innovation (Sweco, 2017; Länsstyrelsen, n.d. a). technological development. However, some scepti- However, a recent report by the Swedish consul- cism towards opening up for outsiders was noted tancy group Sweco noted that the impact of the (Svensson, 2015). Stockholm Model has not yet reached beyond the The S3-concept was lifted by the Stockholm scope of ERDF projects and is not well harmonised CAB in an attempt to further anchor innovation as with the overall objectives of the Structural Funds a strategic policy area for regional development. (Sweco, 2017). Through conversations with the EU’s Directorate- ERDF-funds have been used in the efforts to General for the Regions in 2015, the existing Stock- consolidate innovation-driven questions through holm 2025-strategy was considered as a starting the Innovation Stockholm-platform, in an attempt point for staking out S3-like prioritisations in the to stake out strategic areas of growth. Staking strategy’s revision period. This was also because out these areas are necessary due to the limited of the thorough process undertaken by Innovation funds provided the Stockholm region, both from Stockholm, as the Stockholm 2025-strategy was the EU and the national level, one interviewee re- based on a process spanning nearly two years and counts (Interview S4). The interviewee further ex- the input from approximately 500 participants. plained that the limited amount of funding from As one interviewee recalled, ‘we couldn’t just throw the EU level and the national level is partly due to that out’ (Interview S4). the success of the region on international rankings As coordinator of the collaborative platform in terms of innovation, but that it is also because Innovation Stockholm, the CAB initiated investiga- of a lack of a national political mandate steering tions to map the region’s areas of strengths, in line the objectives and manoeuvring options within the with the EU’s ex ante conditionality for S3 (Vad et County Administrative Board itself. Acting as the al., 2015). The mapping reported a relatively frag- state’s agent in the county and tasked with regional mented or generally overarching areas of strength innovation questions, the county administrative in the prevailing regional structure but traced out board has limited access to funding outside the areas of particular strength such as life sciences, yearly earmarked funds following the state budget ICT, the creative industries and cleantech (Vad et allocations (for more, see Länsstyrelsen Stock- al., 2015: 10). However, due to personnel changes holm 2017). This differs from the regional struc- and limited understanding of the added value of tures in e.g. Skåne and Västra Götaland, where S3, the process of revising the innovation strat- the regional development policies are developed in egy was postponed, and in 2017, Innovation Stock- the county council and thus additionally benefit- holm-platform went idle as the County Governor ting from regional tax income. The differences be- retired. This suggests a highly person-dependent tween e.g. the northern regions, such as Jämtland

nordregio report 2019:3 45 Source: Jon Flobrant / unsplash.com

and Stockholm is evident in development funds for Stockholm’s County Administrative Board has growth per capita (Braunerhjelm et al, 2018). As encouraged the Stockholm-based science parks, one the Stockholm-based interviewees stated, collaborative platforms and incubators (e.g. Urban ‘in Stockholm, we do regional development funded ICT Arena and Kista Science City, Södertälje Science by cinnamon buns’ (Interview S4). Park, Flemingsberg Science Park, OpenLab and Stockholm is the last region in Sweden to re- Grön Bostad) through the ERDF-funds to trace organise its regional structure, which came into out prioritisations for strengthening these as effect on the 31st of January 2019 (Region Stock- cluster organisations. Despite the CAB’s attempts holm 2019). to create a solid structure, the lack of a political mandate on the regional level limits its ability to Engaging actors in collaborative partnerships manoeuvre such a system, and furthermore to According to an interviewee, forging arenas for devise an innovation strategy with clear prioritisa- cluster collaborations has been an Achilles’ heel in tions. the regional innovation system in Stockholm (In- Engaging actors with a genuine interest in the terview S4). With the lack of interest and support field and those who are committed to particular for developing a strategic innovation strategy strategical areas of specialisation is important. based on cluster organisations, or indeed; S3-pol- However, connecting the right actors has been a itics, from the political level, there has been a lim- challenge in Stockholm. Based on interviewing na- ited mandate to drive the question forward. Ac- tional and regional actors within the innovation cording to this interviewee, the approach towards funding agencies, it is clear that the sheer number cluster politics, innovation and more recently, S3, of large players and their relative financial strength has been largely interdisciplinary, to avoid ‘picking presented a challenge in finding and inspiring the winners’. Stockholm does host some strong clus- right actors from a regional development perspec- ters, such as life science, finance and ICT, but only tive. However, according to one interviewee, some few of them (e.g. the film and fashion industry) larger actors have begun forming cluster organi- have established cluster organisations to support sations to secure and incentivise an ecosystem for business development, rooted in the ownership of ensuring competencies in the future. Nevertheless, sector specific companies (Vad et al., 2015). the challenge of engaging actors persists:

nordregio report 2019:3 46 ‘It is just that the actors are so big and have their velopment in the region’s work on innovation, ac- own interest at heart, so it wouldn’t really matter cording to one of the interviewees. if there was a strategy. It is difficult. In a smaller Given this, it might be worth considering the town, companies want to collaborate to become ties between universities as institutions for inde- stronger together.’ (Interview S2) pendent research and the national agendas for R&D funding. Although there are collaborative The Agency for Regional Growth’s recent S3-pilot efforts with relevant companies in cluster forma- study is one example of the operationalisation of tions, these collaborations often happen organi- such strategies on a nation-wide level, by gather- cally and in line with the universities’ own working ing and educating cluster organisations to reach lives and not in accordance with regional policy the companies more easily and ground the con- agendas. However, there is increasing interest cept (Tillväxtverket, 2018). When employed in a regarding collaboration from universities in the strategically sound manner, smart specialisation Stockholm region to secure resources and stu- may shed light on new opportunities within exist- dents in the future (Interview S4). However, one ing areas of competitive advantage, also within interviewee from an institute in Stockholm stated: Stockholm. Engaging in creating bottom-up pro- cesses, with a clear grassroots ownership through ‘In practice, at the universities … I’m a bit sceptical actor engagement, is an important tool for ensur- [now] of this effort to force forward clusters in this ing the endurance of the concept and its manifes- manner, and whether it is the right thing to put a lot tation at the ground level, according to a national of effort towards. The universities have their inner expert interviewed for this case study: life and processes for developing research in collab- oration with the surrounding society, in a way that ‘[It] highlights the importance of mainly engaging they may be globally competitive.’ (Interview S1) those that have a genuine interest in the field and [are] committed within one strand of strategical Forging these links between academia and busi- area of specialisation.’ (Interview S3) nesses and building the ecosystem around clusters and focus areas may be an important first step in As such, it seems that smart specialisation must facilitating smart specialisation processes in the be framed to assess its added value to Stockholm’s future, especially as the future wealth of a region regional innovation system: it offers a different lens, tends to be considered in line with trends in R&D depending on the purpose of the agency adopting expenditure (EU Regional Innovation Scoreboard, the approach. The nature of smart specialisation 2017: 60). The recognition of this seems also evi- as a bottom-up approach figures on two levels: 1) dent in Stockholm County Council’s8 recent pub- as a strategy for regional development, and 2) at lication Regional Development Plan for the Stock- the grassroots level as a method and framework holm Region: Europe’s Most Attractive Big City to organise and orient entrepreneurial endeavours. Region (RUFS 2050). The RUFS 2015 is a long-term Smart specialisation is the furthering of the planning document that addresses a host of soci- knowledge economy in practice, linking business- etal challenges, solutions and opportunities. It rec- es, academia and the public sector. The private ognises the need to strengthen R&D and envisions sphere is also increasingly visible in this equation. an increase in public–private investment, looking A good example of such collaboration with the to smart specialisation as a strategic tool for this surrounding companies through smart specialisa- purpose (Stockholm Läns Landsting, 2018b). In tion is Karlstad University in Värmland, Sweden. the report, the council considers that the decline in The regional council there has been acting as a public spending on R&D is ‘threatening the Stock- node, facilitating collaboration and ensuring that holm region’s position as a knowledge region’ there are clear priorities in academia, companies (Stockholm Läns Landsting, 2018: 29) and it envi- and the public sector, and providing an example of sions an increase of R&D spending from 3.8% of well-functioning, successful quadruple helixes. This gross regional product to 4.5% during 2018–2026 is also the case for smart specialisation in Västra (Stockholm Läns Landsting, 2018: 37). However, as Götaland, where it is clear which agents represent the companies in areas pertaining to business de- 8 Stockholm County Council changed its name on the 1st of January 2019 to Region Stockholm (Region Stockholm 2018) nordregio report 2019:3 47 the authority on planning processes in the region, hind. As the EU granted Sweden an ex ante con- its R&D&I focus has largely been framed within ditionality exemption for receiving ERDF-funding, long-term planning perspectives and a general key actors in Stockholm decided not to develop approach to innovation related to healthcare and a smart specialisation strategy. The most recent public transportation. EU Rio Report additionally points to the relative RUFS 2050 also makes note of the promising challenges of implementing smart specialisation nature of smart specialisation (2018: 176) and em- strategies (S3) in Sweden at large, in bridging the phasises the need for adequate societal planning to national and the regional levels through the ERDF meet the needs and preconditions for creating en- management mandate, the support operates at trepreneurships and supportive measures for ena- the NUTS2 level, which does not easily harmonise bling innovation. The report cites existing quad- with the regional structures (counties and regions) ruple helixes such as Flemingsberg Science, Kista in Sweden and is a ‘challenge for co-ordination Science City and Södertälje Science Park as exam- and cohesion’ (2017: 14). However, it should be ples of innovative processes and platforms facili- noted that the Stockholm region corresponds to tating infrastructure. However, to reap the effects both the EU’s NUTS2 and NUTS3 level and does of smart specialisation and continue to build the not have this problem. Nevertheless, the report innovative machinery of the Stockholm region, it also highlights key challenges tied to ‘the lack of is important to delve into the possibilities of what a central actor that drives the development for- S3 might provide the region. Opening up the ex- ward’ (Hallonsten and Slavcheva, 2017: 15) a cen- isting platforms to explore new domains will help tral challenge in Stockholm. As reiterated by the create more dynamic processes. Furthermore, cre- county administrative board and the actors in the ating space for flexibility in the regional strategies Structural Funds partnership, who are currently will help tackle emerging challenges and needs; a in charge of operationalising smart specialisation general planning document may not be able to ad- in the Stockholm region, ‘[T]he problem is that we dress these subtle or needed changes. don’t have any political commitment in the region’. (Interview S4) (Political) Leadership Bringing smart specialisation back to the re- Stockholm is often hailed as an epicentre for in- gional level, the question of political ownership novation and it figures high on the OECD’s and and leadership of the regional smart specialisa- EU’s innovation rankings (OECD, 2013; EC, 2017b). tion strategy is interesting in the Stockholm case. However, when it comes to adopting the smart Analysis of the results of the interviews indicates specialisation concept, Stockholm is falling be- that this is the greatest hurdle to be overcome.

Source: Louis Reed / unsplash.com

nordregio report 2019:3 48 The size of the region in terms of the variety of The responsibilities for regional growth and actors available, the size of companies, the his- innovation moved from Stockholm County’s ad- torical strength of the region to innovate and at- ministrative board to the county council, now Re- tract foreign and national investments, alongside gion Stockholm, in January 2019 (Stockholm Läns the established and largely laissez-faire approach Landsting, 2018a; Region Stockholm 2019). The to innovation from a governance perspective, all implications of this move are uncertain, although make it harder to claim ownership of strategies the county council’s recent publication RUFS 2050 and mobilise actors: is an indication of its commitment to ensuring in- novation aspects are on the political agenda. It is ‘It would be easier in a smaller town as it is easier decisive for the future of smart specialisation in to find the right partners to collaborate with, focus Stockholm that the regional growth department and mobilise for a common cause. This is what you in the Stockholm County Council places a substan- usually would call the ‘big city’ problem. It is diffi- tial focus on developing the strategy: both for the cult.’ (Interview S2) advancement of the strategy beyond a de facto state and for taking the reins on channelling the Notwithstanding this claim, smart specialisation funding into knowledge hubs that are strategically as a concept is a tool that is not restricted to a important for the region in the future. Likewise, particular level of governance or organisation, and the council should communicate the strategy to it needs to be framed in terms of the objective the political level, help align funding and consoli- and the mandate of the actor in question (Foray, date the efforts towards creating an innovative 2009: 91). For example, the actor engagement is- resilient region for the future. sue begs the question of whether the objective of As the next EU programme period is likely to a smart specialisation strategy will become a de require a clear smart specialisation strategy in the facto innovation method adopted widely on both Stockholm region, focusing on making prioritisa- the political level and at the grassroots level, or tions and tracing out domains, based on defined whether it will become ‘just another strategy’ with areas of strength in knowledge-intensive indus- no actions or commitments attached. tries and areas that are strategically important to In the interviews, it was mentioned that the the region, may help direct the funding and ensure absence of unequivocal guidelines partly arises the financial instruments go further. According to from the fact that prioritised thematic areas have an interviewee, the regional actors need to take not been adequately identified, but it is also the ownership of the strategic development of these result of the long-established approach towards domains. From the interviews, it was clear that business development funding, as largely multidis- the public sector, like the business sector, must ciplinary and organic. Although smart specialisa- want and need something to catalyse change, and tion figured as part of the future envisioned priori- this should depart from a framework informed by ties of the former innovation platform Innovation clear political prioritisations. Stockholm and is mentioned in the recent RUFS 2050 as a method for staking out the main pri- De facto S3 in Stockholm orities in creating an innovative region, there has The Stockholm region has yet to adopt a formal been no clear commitment to establishing clear smart specialisation strategy, but tendencies to- prioritisations. For smart specialisation to work wards S3 are discernible. For example, in the Swed- optimally in Stockholm, it would be worthwhile to ish Agency for Economic and Regional Growth’s in- clearly define areas or responsibilities, from creat- terim report ‘Increasing competitiveness amongst ing platforms, to disseminating information from SMEs’ (Öka konkurrenskraften hos små och medel­ the EU to the businesses and clusters organisa- stora företag) the ERDF is evaluated for the pro- tions and moreover, to clearly communicate the gramme period 2014–2020 (Tillväxtverket, 2017a; added value of smart specialisation. However, to 2017b). In the report, smart specialisation in Stock- mobilise, anchor and operationalise smart special- holm is mentioned, and sorted under the umbrella isation, there needs to be a firm ownership of the objective of ‘the sustainable city’ and there are process at a strategic as well as on the operational further areas pertaining to this objective, namely level. As an interviewee stated, ‘It is important to green city, healthy city, smart city, inclusive city have a regional actor who would “own” a domain and attractive city (Tillväxtverket, 2017b: 126). … e.g., cluster organisation, forum’. (Interview S3) nordregio report 2019:3 49 In relation to S3, only a few projects have been Smart specialisation as a strategy may help cre- funded, but they are large projects that concen- ate strong hubs for expertise, attracting both new trate resources in specified areas (ibid, 2017: 135). and established foreign companies to the city. The way smart specialisation has been used as a Thus, ‘cracking the smart specialisation code’ may guiding tool for regional development within key positively impact on the ability to stake out clear institutions on the national level, indicates that objectives for cluster collaboration and become a there is a tendency towards a de facto operation- targeted tool for regional growth and branding. alisation of S3 at large, despite the lack of national It may also be a tool for restructuring the focus guidelines. When the responsibilities for regional within clusters to establish a clear direction: development was at the CAB, there were also ten- dencies towards steering their operationalisation ‘If it wasn’t for S3, progress would have been much of the plans in an S3-like direction. As one of the slower for us, or perhaps not at all. It enables us, interviewees commented: clarifies our objectives and acts like a magnet. It allows you to attract the right stakeholders. Your ‘[T]here isn’t a formalised idea, though things happen. role is to be the catalyst, facilitator and connector.’ But it isn’t called S3. And that is what I usually say: (Interview S5) we work in line with S3 without a formal strategy.’ (Interview S4) In contrast, in a more overarching, all-encompass- ing cluster, it can be unclear what roles the cluster Operationalisation of S3 at the can and cannot play for start-ups and companies, grassroots level which was a concern expressed by one of the in- Understanding the key concepts of smart spe- terviewees (Interview S6). Without a clear objec- cialisation, such as EDP and domains, is crucial for tive, the added value of smart specialisation when the manifestation of a systematic approach to in- applied in a cluster remains within the realm of its novation within the conceptual framework. Clear collaborative platform, rather than discovering communication of the nature of concepts such as new or existing opportunities in a wider domain. As EDP and domains would demystify smart speciali- such, it was argued by one of the interviewees that sation and make its benefits more apparent to smart specialisation might be a remedy for ensur- those enabling these concepts, be they specialised ing healthy and innovative clusters in the future cluster organisations or governance agencies. by incentivising and supporting the exploration of Throughout the interviews, the concepts of new domains through EDP. One interviewee at a domain and EDP were not discussed at length, as Stockholm-based innovation cluster formulated it the interviewees were either not directly engaged this way: in the operationalisation of the concepts, or they were not familiar with the terms. However, the ‘If you do not have S3 … well, when everything is concepts have been adopted to guide one existing possible, nothing is possible. [S3] helps us nudge cluster in Stockholm without guidance from the progress in a direction’ (Interview S5) political and administrative levels in the region. According to one of the interviewees, the concept In the areas within which smart specialisation has of smart specialisation is a strategic approach to been adopted as an approach in Stockholm, e.g., organising and structuring clusters from within. In at Urban ICT Arena, the key concepts of EDP and Kista’s Urban ICT Arena, smart specialisation is domain helps restructure methods connected to refining and concretising business clusters, which innovation. The domain is defined and the purpose in turn facilitates the process, naturally selects of EDP is clear. the appropriate actors within that space and be- comes a beacon for those who are genuinely inter- Key findings ested in exploring new niches where their potential Stockholm is Sweden’s foremost region in terms might lie: of R&D and entrepreneurship, and frequently fig- ure at the top of the EU’s Innovation Scoreboard. ’S3 becomes a lighthouse ... it attracts the ones that The region’s outward-looking focus for expanding are interested in getting there, and sends signals to markets is regional strength, and the city’s inter- those that [the lighthouse] might not be right for.’ national reputation draws venture capital to the (Interview S5) region (ibid; Braunerhjelm et al, 2018). In examin- nordregio report 2019:3 50 ing enabling and impeding factors that influence Considering the interviewees, the driving forc- the adoption of smart specialisation elements in es behind a reorientation towards an S3 policy Stockholm, it is worth considering the current in- strategy is highly person-dependent and it is val- novation systems and platforms that are in place id to question whether the added value of smart to steer innovation efforts. There is significant specialisation indeed has been adequately under- scope for improvements to create long-lasting stood. Consequently, the concept did not ‘stick’ at collaborative structures in the region. With most the political level in Stockholm resulting in the lack of the budget spent for this programme period, it of political commitment to the concept, making is difficult to finance new collaborative platforms it difficult to stake out a clear path for prioritisa- and cluster projects in line with clearer prioritisa- tions of areas of strengths in the long term. Addi- tions. tionally, attracting relevant actors often rests on a One of the key underlying questions asked in sound political mandate from the authorities. this case study is whether the nature of Stock- At the same time, S3 is operationalised in a holm’s complex innovation system and the suc- de facto state as approaches to regional develop- cess of the existing system hamper the organisa- ment from a regional governance perspective is tion around the smart specialisation concept, and happening in subtle ways – but by another name. thus falling victim to a ‘big city’-complex. From Furthermore, a few cluster organisations, such the interviews conducted for this study, it seems as Urban ICT Arena, are adopting the concept evident that this may be the case. The current sys- and employing it on a grassroots level for clarify- tem is presently working, but the ability to plan ing their goals and ensuring that the right actors for tomorrow’s challenges might be lacking due to are attracted to their platform. S3 also figures a path dependent approach to regional develop- on the national level through the Swedish Agency ment, and the laissez faire approach to prioritise for Economic and Regional Growth, supporting strategic areas of growth. Breaking Stockholm’s SMEs by attracting larger cluster organisations tradition of non-involvement in defining areas of in the nation at large. Stockholm has traditionally prioritisation for strategic support for businesses, been suffering from weak cluster politics, and as may prove to be challenging as the innovative ma- such might to some extent miss out on possible chinery persists regardless of the implementation kick-starters for mobilising around existing clus- of a new regional strategy. However, despite the ters that hold potentials for smart diversification lack of a regional smart specialisation strategy, through newly identified domains. it is clear from the interviews that the concept With its excellent performance on the EU’s of smart specialisation can function without an innovation scoreboard, it is pertinent to question overarching policy objective guiding funding to- the importance of applying this innovation tool wards regional and economic development, but at to Stockholm County’s policies for innovation and a grassroots level. This is also in line with Foray’s regional growth. This connects to the broader un- vision of smart specialisation as a generic tool, derstanding and importance of smart specialisa- rather than being restricted to a specific geo- tion as a strategy, in terms of its added value for graphical or administrative level (Foray, 2015: 91). the Stockholm region, and the way in which the In a Catch-22- like position, the Stockholm region strategy will take precedence for directing fund- continues to outperform as an ‘innovation hub’, ing instruments. However, the use of the tool as a and the funding from the EU and from the na- means to ensure a diverse yet interconnected and tional level continues to be much lower than for its related economic and industrial base—referred to Swedish counterparts. This contributes to limiting as related variety—and to further Stockholm’s and the resources towards creating a smart speciali- Sweden’s relative economic and social resilience, sation strategy. Coupled with a limited number of may prove a sound strategy. Nevertheless, its suc- people tasked with regional development, and the cess depends on the successful organisation, polit- division of tasks within the region, S3 is not taking ical ownership to the S3 process and engagement the centre stage. of key actors.

nordregio report 2019:3 51 DENMARK: MIDTJYLLAND Midtjylland (Central Denmark by Viktor Salenius Region) Biggest city: Århus Introduction Population: 1,316,368 2 Smart specialisation in Denmark is primarily seen Area: 13,006 km as a set of criteria that must be met to obtain EU Areas of strategic importance: Food, energy and the environment, creative industry, ICT, funding for regional development programmes. tourism The national government has not initiated any significant communication with the regions about devising S3 strategies, and knowledge and inter- est about S3 is low among regional stakeholders constituted the focus areas for early economic because it is conceived as a foreign, ‘imported’ specialisation and, while the share of GDP value- policy strategy. added has gradually shifted towards medium- However, this is not to say that the main ideas tech and high-tech innovation, the same sectors and aims of smart specialisation are missing from have largely remained dominant. The Danish in- Danish innovation and regional development. On novation system today is characterised and driven the contrary, the latter builds on principles that are by several sector-specific cluster organisations very similar to the S3 framework, for example, in (either national or region specific), and by a strong the form of bottom-up industry involvement when R&D presence from universities and other research deciding on core development projects and revis- institutions. ing regional strategies. The EU tacitly recognises These general remarks also hold true in the this resemblance, and Danish regional develop- case of the Central Denmark Region. The region ment frameworks receiving S3-linked EU funding is well developed and innovative, displaying the have been allowed to continue without significant lowest unemployment levels in the country and restructuring. the highest relative share of patent applications This case study focuses on the Central Den- and it consistently scores well above the Danish mark Region (Midtjylland). The region’s pragmatic and EU averages on several key innovation indica- approach towards smart specialisation exempli- tors (EC, 2018). The following paragraphs outline fies very well the overall image for Denmark that the main stakeholders of the regional innovation is outlined above. The Central Denmark Region system in the Central Denmark Region. The data is part of the EU S3 Platform, wherein it has laid have been gathered through desktop research and out the core focus areas for developing its re- interviews. gional economy. Many features of the operations The cluster organisations maintain the industry of regional innovation stakeholders resemble very networks needed for collaborative projects and closely the main methods and concepts of smart thus, are a key stakeholder in the innovation sys- specialisation. However, the regional development tem. All business development programmes need strategy does not formally recognise or elaborate to be co-ordinated by an operator, and this is typi- on smart specialisation or its core concepts, and cally the cluster organisation. The clusters in the neither regional authorities nor cluster organisa- Central Denmark Region are described as mature tions have purposefully adopted S3 in their region- and internationally oriented, and they have built up al development efforts. extensive networks among businesses, research institutions and consultants. Among the most sig- Midtjylland’s regional innovation nificant clusters present in the Central Denmark system Region is the wind cluster—the region hosts a large Since the beginning of Danish innovation policy agglomeration of world-leading wind turbine pro- in the early 1990s, Denmark has developed into ducers and over half of all wind energy-related an efficient, skill-intensive knowledge economy, jobs in Denmark (State of Green, 2018). characterised by high labour-market mobility and The Central Denmark Region also has a very flexibility and by a high share of SMEs in many key strong research base, maintained by its research industries (Edquist and Hommen, 2018; Kristensen institutions, most notably Århus University, which et al., 2011). Services and agricultural production is Denmark’s largest and second-oldest institute nordregio report 2019:3 52 The bioeconomy is a key strength of the Midtjylland region. Source: Jeremy Bishop / unsplash.com of higher education, with over 40,000 students in place in the country when smart specialisation and 11,000 staff (Århus University, 2018). There was introduced, Denmark opted to amend these are close networks between industry and research, strategies and justify how the criteria for S3 were and the university’s testing facilities and research already being fulfilled by existing documents. The initiatives act as platforms around which other EU accepted this as an alternative to a designated stakeholders have formed collaborations. For ex- smart specialisation strategy (Polverari, 2016). On ample, the regional authorities co-operated with the other hand, the concepts of S3 are seen to pro- the university to raise the overall awareness of and vide a space for dialogue between the key actors, efforts regarding the circular economy when the i.e., the research, public sector and business com- concept was not yet widely known in industry, but munity and thus, as an opportunity to form nec- was already a key focus in academic research. One essary partnerships for innovation and collabora- interviewee emphasised that the role of universi- tion. In the Danish national context, as explained ties in the innovation system has increased even by one of the interviewees, these dialogues at the more in recent years (Interview M2). national-level Cluster Forum are seen as the way The regional authorities (the Regional Council in which the S3 concept of specialisation domains and the Growth Forum) play an important role in is carried out in practice. Apart from the co-ordi- supporting the clusters and research institutions nation of the national-level cluster organisations, in their efforts. So far, most significant efforts in and administration of structural funding by the cross-sector communication and collaboration on Ministry for Higher Education and Science, there is innovation strategies have been co-ordinated by little other S3-related involvement from national the regional authorities, although the role of the authorities. latter may be smaller in the future due to adminis- trative restructuring. The region also provides, for Regional level example, financial support to innovative SMEs as There is no apparent initiative to purposefully a targeted effort to strengthen the value chain in adopt S3 at the regional level in the Central Den- the region’s strong economic sectors. mark Region. One interviewee pointed out that, in many cases, it could potentially be beneficial if the concepts and methods in regional innovation were S3 in Midtjylland: Pragmatism harmonised more with those of other countries. As through S3 equivalence one interviewee commented: National level At the national level, S3 is understood predomi- ‘I was invited to speak in another country and they nantly in the context of structural funding. On the asked me to focus on smart specialisation in my one hand, S3 tools and concepts constitute an ex presentation … and I looked it up and studied it to see ante condition that must be met to secure EU fund- what kind of value it might have for us and I realised ing. As extensive R&D&I strategies were already that a lot of things we already do.’ (Interview M3) nordregio report 2019:3 53 However, as the interviewee continued, there has by the United Nations have been used as a basic not been any communication from the national framework in the regional development strategy level to make this happen, nor is there sufficient process. regional and local knowledge about S3 to advise An additional challenge impeding formal adop- businesses and other actors on how to benefit tion of S3 in the region is that there is no regional from it. Instead, the existing regional development body with the capacity to co-ordinate substantive strategies are treated as S3 equivalent, and the smart specialisation processes. Otherwise, the Re- Central Denmark EU Office provides assistance gional Council and the Growth Forum could carry in filling out funding applications so that criteria out this co-ordination role, as they already facili- are met. Another interviewee pointed to the al- tate cross-sector dialogue between clusters and location of structural funding by the Ministry of different stakeholders. However, according to one Higher Education and Science, noting that any of the interviewees, after the completion of a re- distinct, competitive specialisations should have form that is currently taking place, the Danish re- been drawn up at this earlier stage. Consequently, gional authorities will not be able to conduct direct when the funding reaches the regional level where business development projects as before. Instead, it is decided in detail how the money is used, S3 the regions will procure these services from cluster is very much understood merely as terminology organisations and other actors, encouraging them linked to facilitating regional competitiveness by to collaborate with each other as much as possi- supporting strong sectors and clusters (for exam- ble. The sector-specific cluster organisations have ple, the food sector) and to meeting specific EU traditionally been quite isolated from each other requirements (such as reducing the environmental and do not currently have the cross-cutting initia- footprint of food production). tive to establish formal smart specialisation tools. Nor does the regional development strategy of the Central Denmark Region have any desig- Challenges and opportunities nated S3 element. The regional strategy delineates core focus areas and development themes, namely Signs of de facto smart specialisation in sustainable adaptability, cohesive urban develop- the Central Denmark Region ment, knowledge and skills, and focused growth Nonetheless, despite the issues outlined above, (Central Denmark Region, 2016), but these are not there are noteworthy correlations and resem- formulated as distinct competitive specialisations. blances between the self-developed strategies Smart specialisation is not specifically elaborated and processes in the Central Denmark Region and on in the strategy, the newest edition of which the original smart specialisation concepts. Keep- was being adopted by regional stakeholders in late ing in mind that the region is a member of the EU 2018, at the time of writing this report. Instead, S3 Platform, it may well be argued that S3 has a the Sustainable Development Goals as devised strong de facto presence in the region.

The focus on the bioeconomy and its different facets shows signs of de facto S3 in the Midtjylland region. Source: Jed Owen / unsplash.com

nordregio report 2019:3 54 The first of these S3 similarities relates to the S3 concept of domain formation. The distinction process through which the regional growth and is that while the Regional Council and Growth Fo- development strategy was devised, as it involved rum are encouraging cross-sector projects and a proactive dialogue in which all stakeholders were dialogue, there is no system or framework in place heard and involved. As one interviewee recounted, for co-ordinating these collaborations, whereas, in the regional authorities invited municipalities, pri- the case of S3 domains, such co-ordination would vate companies, cluster organisations and other exist and be carried out by a regional S3 authority. stakeholders to a series of workshops preparing However, the underlying mentality is the same, i.e., the formulation of the strategy and culminating in that sector-specific clusters do not always have all large-scale seminars. It is apparent that the way in the knowledge they need and that significant op- which the strategy process was carried out closely portunities for new synergies, innovations and re- resembles the S3 EDP concept. In fact, the latter gional growth areas go unnoticed unless different may resemble the strategy process even more stakeholders and sectors collaborate. In the Cen- closely than does the Sustainable Development tral Denmark Region, the cluster organisations Goal on Partnerships (SDG 17) that the regional therefore seek collaborative initiatives in which authorities actually used as inspiration for the they engage their constituent companies. The col- strategy seminars. Moreover, the bottom-up dis- laborative focus areas, such as new bioeconomy cussions in the Central Denmark Region are clearly supply chains or products, are not referred to as aligned with supporting the potential and specific domains, but more generally as regional growth competitive advantages of the region: opportunities. While there is no explicit reference to smart specialisation or adherence to a harmo- ‘We must hold our nerve and continue to focus on nised strategy in the region, the S3 way of thinking the areas where we are ahead such as food, energy is present. and the environment, creative industry, ICT, digital growth and tourism—all areas where an ambitious Clusters vs smart specialisation and concentrated effort is already in place.’ (Central Clusters and cluster associations clearly take cen- Denmark Region, 2016: 9). tre stage in innovation and development in the Central Denmark Region and, due to restructuring The second notable parallel between smart spe- of the roles of public stakeholders, this cluster-cen- cialisation and innovation in the Central Denmark trality is likely to persist. One perspective is that Region is the way in which research institutions this may inhibit the emergence of cross-sector co- lead the way in finding new regional competitive ordination and the frameworks that are required advantages and applying traditional strengths. to achieve a more active adoption of and know- Århus University has been active in searching for how about smart specialisation. As recounted by new applications and solutions and potential fu- one interviewee: ture development areas, in particular in the food, agriculture and non-food bioeconomy, which are ‘Clusters in Denmark are strong and mature with regionally important sectors. The focus of these large networks, and it is not always easy to convince activities is to make a sector that experiences them [to collaborate] … the companies are not al- many ongoing transitions and challenges, more ways looking for new tools, concepts and methods. knowledge intensive, competitive and sustainable, Trust within the cluster will help to promote new so that it develops into a distinct regional strength. ideas and motivate them to start looking across It is telling that this research-driven innovation ac- sectors, but building trust takes many years, espe- tivity is one of the sectors described in the Central cially when you have most of your cluster compa- Denmark Region’s membership profile on the S3 nies partly located outside Europe.’ (Interview M2) Platform. The link to smart specialisation thinking in the operation of the region’s R&D stakeholders The alternative perspective, on the other hand, is while implicit, is clearly present. that this is not a categorical impediment against The third link between the independent inno- making use of S3 concepts or peer knowledge from vation efforts in the Central Denmark Region and other European regions. Since regional innovation the smart specialisation framework is between within the Central Denmark Region seems to in- the region’s cross-sector collaborations and the stinctively share much of the underlying rationale nordregio report 2019:3 55 for S3 and adopts similar working methods, albeit competitiveness. Subsequently, the concept car- on a less formal basis, the region is remarkably ries little substantive meaning for regional innova- well placed to take advantage from S3 more ex- tion stakeholders, and the practical applications plicitly in the future. of S3 are conceived as being limited to dialogue forums and partnerships. As the role of clusters Horizontal aspects: Nordic model for and cluster associations continues to strengthen, S3 and the green transition regional authorities have a decreasing mandate Interviewees consistently mentioned the same to established formalised frameworks for cross- themes when asked to describe a specific Nordic sector collaboration. model of innovation/S3. High levels of trust among Putting aside the lack of formal structures and local enterprises and other actors as well as low hier- co-ordination mechanisms, however, the de facto archical gaps and collaborative political and indus- resemblances to smart specialisation are striking, trial traditions are highlighted as key characteris- both in terms of theory and practice. The strategy tics of Nordic economies and innovation systems. process carried out in the regional Growth Forum The circular economy and the green transition as a dialogue between all types of stakeholders are recognised as fields in which the Central Den- is inspired by United Nations frameworks, but it mark Region is particularly suited to benefit from could just as well be characterised as a good prac- smart specialisation and strategies that resemble tice example of S3 EDP. Academia and research S3. The region has a strong economic tradition in institutions in the region have had an important bioeconomy and agricultural production, as well as role in refining and adapting traditional specialisa- in green energy. Århus University and other stake- tions in the regional economy to find new applica- holders have undertaken consistent efforts to up- tions and competitive advantages. Cross-sector grade previous regional specialisations into new collaboration on such specialisations, while lacking and sustainable applications and processes, and ownership by a co-ordinating body and the label of this remains one of the core focus areas for the domains, forms an important part of the region’s regional innovation system. Cross-sector collabo- future economic development. The bioeconomy ration in developing the region’s strengths in these and green transition-related innovation is one of fields has been relatively active and progressive, these strong points and it involves all key stake- even despite the lack of centralised co-ordination holders in the Central Denmark Region. along the lines of key S3 concepts, but this could Judging by the Central Denmark Region case, be increased even more. As one interviewee noted: the S3 equivalence agreed between Denmark and the rest of the EU appears substantive. As Den- ‘The main obstacle for quite a while was in raising mark is a knowledge economy, with traditional an agenda that was not very salient yet. We are try- Nordic societal institutions characterised by high ing to push SMEs into converting to a more circular levels of trust and collaboration, and additionally business model, but at the clusters there are not by particularly localised economic co-ordination necessarily people who would be able to advise the mechanisms when compared with its Nordic peers, companies on how to do that, so [regional authori- it is not very surprising that such collaboration ties] end up with a double role of trying to educate persists in the innovation system, even informally [local authorities] and find knowledge abroad in order and without deliberate effort. The question for fu- to get the transitions going.’ (Interview M2) ture policy makers to assess is what benefits could be attained if smart specialisation in the Central Key findings Denmark Region was formalised into speci­fic out- Much like Denmark overall, the Central Denmark spoken S3 strategies and processes. One such Region takes a pragmatic approach towards benefit, as recognised by the interviewees, would smart specialisation. S3 was never communicated be stronger communication and co-operation links to the region as anything more than a set of condi- to S3-active regions across Europe and the Nordic tions to secure structural funding to boost regional Region.

nordregio report 2019:3 56 NORWAY: NORDLAND Nordland County by Mari Wøien Biggest city: Bodø Number of residents: 243,335 (Oct 2018) Introduction Area: 36,090 km2 Nordland was the first Norwegian region to in- S3 domains: Aquaculture, process industry, corporate smart specialisation in its innovation tourism. strategy in 2013, with a view to following the trend Source: SSB (2018) observed throughout Europe for an increasing fo- cus on industrial specialisation. Realising that the region already worked in line with the concept, ership’ through clear political and administrative the county administration saw the potential to leadership and long-term visions, as well as the redirect a previously ideology-driven approach need to be willing to prioritise funding and focus. to regional development towards knowledge and This case study examines the status of smart research-based growth. Additionally, the intro- specialisation in Nordland county and attempts duction of smart specialisation/S3 has responded to distil the most pressing issues that must be to ‘the significant centralisation of research fund- addressed to enable the smart specialisation ing towards synergy research (sentersatsing) of strategy. The case study is structured as follows. national and international [funding] programmes’9, First, a brief overview of smart specialisation in which also corresponds to a wider societal need Nordland and Norway is provided. Second, the for increased specialisation (Nordland County, case study examines the empirical findings, based 2014: 7). Although not part of an EU member on interviews11 conducted in Nordland in June state, Nordland’s application to take part in the EU’s S3 Platform network was accepted. The S3 Platform allows Nordland County Municipality to Box 8: Smart specialisation as continue its systematic approach to collaboration a method for regional business with its European regional counterparts, while de- development – A Handbook veloping a more ‘targeted innovation policy based The handbook (Veileder) was developed on networks and relevant stakeholders’ in the re- by the Ministry of Local Government and gion (Nordland County, 2014: 7). Modernisation on request by the counties. Since including smart specialisation as part of The Handbook is first and foremost its innovation strategy, there has been a growing developed as a tool for the county interest across Norway in the creation of similar administrations in the region, due to their approaches. Initially, the Ministry of Local Govern- role as an engine ment and Modernisation wanted to see this devel- for regional

Veileder opment as a regional decision, giving space for a development and growth. bottom-up approach. More recently, however, the Smart spesialisering som metode for regional ministry has seen the value of acting as the co- næringsutvikling The handbook ordinator and facilitator of the S3 process. Thus, outlines the the Ministry of Local Government and Moderni- concept and how it may be used sation recently published a comprehensive guide in a Norwegian (Veileder), Smart Specialisation as a Method for context (KMD, Regional Industrial Development10 (KMD, 2018b) to 2018b). incentivise the development of S3 strategies. This guide highlights the role of the region as a catalyst for change and emphasises the necessity of ‘own-

9 All documents listed in the reference list from Norwegian 11 All interviewees have been anonymised to the extent this sources are translated into English. has been possible, based on requests from the affected 10 [KMD] Ministry of Local Government and Modernisation parties. The interviewees represented regional and national (2018b) Veileder: Smart Spesialisering som metode for regional funding agencies, the county administration, research næringsutvikling. institutes and a science park. nordregio report 2019:3 57 Experience-based tourism is an important component of Nordland's S3 strategy. Source: pexels.com

2018, and considers in turn the enablers and hin- and analysis produced by the local research insti- drances for operationalising S3. Third, the case tute Nordlandsforskning. The expertise on smart study turns to general comments regarding the specialisation already present in the regional in- potential of S3 as a tool for further consolidat- novation system in Nordland allowed the county ing the Norwegian national and regional innova- administration to commence dialogues and hold tion systems. Finally, and considering the current seminars, and to learn from best practice cases situation, it concludes that one of the most impor- and regional learnings in e.g. Vaasa, Finland. tant findings from the empirical research case is a Successfully implementing S3 requires an ex- clear need for a multilevel governance approach to cellent understanding of the regional capabilities smart specialisation to concretise and create a dy- and areas of strength, the development of the namic but corresponding governance mechanism region in question and its capacity to diversify for regional development. (Boschma, 2016). Nordland County’s administra- tion for enterprise and industry is characterised by Smart specialisation: Norway and a genuine understanding of the regional innova- Nordland tion system, and it knows the industrial landscape Nordland was the first region in Norway to sign and its history well, according to several inter- up to the EU’s S3 Platform, a platform for all EU viewees for this case study: regions applying S3 as an innovation tool. The platform gives the county access to an important ‘The administrative leadership in the Department body of knowledge and an extensive network from for Enterprise and Industry has a very good under- which to draw lessons (Nordland County, 2014: 7). standing of research for regional development and As a strategic tool, smart specialisation has been works closely with the industry regarding R&D re- incorporated into the policy arena for innovation in sources and, although they aren’t the ones giving Nordland and it is part of a broader policy strat- the premises, they are nevertheless an analytical egy. The strategy was developed by the county and practical resource for the industry at large.’ administration and was built on the solid research (Interview N1) nordregio report 2019:3 58 Moreover, it was noted by the Trailing Research approach to increase regional prosperity (Nor- Group on Smart Specialisation (følgeforsknings- dland County, 2014). To create a comprehensive gruppe) that ‘soft learning’ through various pro- innovation strategy, the county municipality con- jects, e.g., Interreg, and best practice cases in sulted over 600 stakeholders across different sec- Europe, has been beneficial. Thorough analyses tors, businesses and research institutes to identify and consultations were conducted prior to the and analyse the opportunities and challenges in strategy development (Mariussen et al., 2016), as the region (Nordland County, 2014). noted by one of the interviewees. In other words, Although Nordland does not have a separate ‘the county continues its tradition of basing strat- overarching S3 document, the concept creates egy developments on locally anchored knowledge’ the foundation on which the Innovation Strategy (Mariussen et al., 2016). This may be seen in the 2014–2020 is built (Nordland, 2014). The justifica- deeply specialised industries in the area, linked to tion for using the strategy is its targeted nature, fish farming and aquaculture, education, environ- and the potential it brings to diversifying and ment and processing industries, as emphasised in strengthening the region’s competitive advan- Nordland’s Innovation Strategy (Nordland County, tage. Furthermore, the place-based approach to 2014; Madsen et al., 2017). S3 in the EU closely corresponds to the practices Furthermore, the Trailing Research Group already existing in Nordland, which allows for the pointed out how the place-based focus of the continued range of sectoral strategies, while simul- strategy breached the sectoral approach to the taneously targeting and maximising the regional regional innovation system by focusing on the idea development funds. As one of the interviewees at of domains. Starting with the interdisciplinary na- the county administration stated: ture of the supplier industry, which later led to tar- geting Nordland’s areas of strength—experience- ‘What we have observed is that both the regional based tourism, aquaculture and industry (Madsen and national instrument in an S3 perspective help et al., 2017: 10)—helped bring forward new syner- us achieve more than if we spread the funds at ran- gies. The key concepts of EDP and domains are dom. The county administration has been very clear not new in the EU, nor are the concepts an en- about how the S3 strategy relates to the industrial tirely new approach to innovation on the sectoral development in Nordland.’ (Interview N6) level in Norway (cf. Clausen, 2009). For example, the Trailing Research Group on Smart Specialisa- The focus and scope of smart specialisation dif- tion in Nordland pointed to key enabling features fers from its predecessors, such as the RCN’s VRI12 and related areas in the existing innovation and programme, as it takes a more systemic approach industrial systems that helped lift the oil and gas to innovation by encouraging a wider set of tools sector and fish farming, features such as the long for restructuring and enabling research and knowl- traditions of ship building and herring fishing, with edge-based growth. Establishing well-functioning already existing industrial and knowledge ecosys- triple helixes are important for increasing the re- tems in place (Mariussen et al., 2016). Specialising search capacity in this region, which, in turn, may in creating business opportunities within similar facilitate the uptake of smart specialisation, ac- sectors, a process termed ‘related variety’, is also cording to the interviewees. This work commenced mentioned as a key strength in Norway, according with the RCN’s VRI programme, which led the to the government’s Handbook on Smart Speciali- county to encourage approaches based on triple- sation; the concept is in fact ‘the foundation for helix structures (Madsen et al., 2017: 11). According most enterprises and business/industrial clusters’ to the interviewees, the involvement of triple-helix in the country (KMD, 2018b: 9). In this regard, the representatives in the development of the smart Handbook points to the industrial expertise in the specialisation strategy indicates the close relation- town of Raufoss and how it has diversified within ship between the industry and the institutions in advanced processes, finding new areas of applica- the county at large. bility (KMD, 2018b). The VRI programme was succeeded by the In 2014, Nordland created a regional innova- FORREGION programme, which places emphasis tion strategy based on the visions in the County Plan (Fylkesplan), A Creative Nordland, with R&D 12 VRI stands for Virkemidler for Regional FoU og Innovasjon and sectoral strategies for an all-encompassing (in English, Instruments for Regional R&D and Innovation). nordregio report 2019:3 59 on building strategic partnerships and collabora- at these seminars included the county administra- tion, in prioritised industries, between the RCN, tion, Innovation Norway and the Northern Norway the county administration and regional and na- Tourist Board, and the interviewees who attended tional development agencies (e.g., Innovation Nor- the seminars indicated that they were highly valued. way) (RCN, 2017: 6). The RCN is also inspired by The seminars, which enabled the actors to work the EU’s smart specialisation approach and wants with S3 in practical ways, were held on a monthly to see the strategy applied in Norwegian regions basis from September to December 2017 (Nord- (RCN, 2017). It refers to smart specialisation in land County, 2017; Interviews). The purpose of the its regional policy, showing a similar approach in programme was to anchor the concepts and per- Norway for receiving funding based on the exist- spectives on S3 and the theoretical framework at ence of strategies based on thorough regional the administrative level, to ensure that there was analyses of strengths and expertise (RCN, 2014). a united view and a mutual understanding of the There is a current European trend to focus pub- innovation policy strategy ahead. The seminars lic funding on stimulating private investments— were not only interesting to the actors in Nordland which, by extension, influences the relative ability County, but drew attention to and encouraged of different countries and regions to participate in the participation of other county administrations various funding programmes, such as, for example, across Norway. According to one of the interviewees the Horizon 2020 Eighth framework funding pro- for this case study, the S3 School emphasised the gramme. Likewise, financial instruments for R&I need for a closer working relationship between the are gradually following the same path, with funds regional and the national levels and offered a re- being concentrated in centres for excellence in re- newed invitation to reconnect these ties to ensure search in Norway (e.g., centres such as the Cen- regional growth through S3. tre for Research-based Innovation, the Norwegian The S3 School was not aimed at the local busi- Centre of Excellence and the Centre for Environ- ness and industry sectors, as it was not seen as ment-Friendly Energy Research (Nordland County, necessary for these sectors to understand the 2013). Such partnerships enable the development theoretical framework underlying the S3 concepts, of a focused and a highly competitive research such as EDP and domains. This view was commonly sector in Norway, which is necessary when com- held among the interviewees. Instead, the S3 peting for funding from the EU and other bodies School was intended as a strategic tool for those (Nordland County, 2013). setting the framework conditions for regional de- Moreover, the Planning and Building Act may velopment. As one of the interviewees stated: play a significant role in the formation and im- plementation of smart specialisation due to its ‘All new concepts are just language for something prominent position in regional planning. Accord- that already exists. You describe what you see ... ing to the newly devised guide (Veileder), the Plan- so perhaps you don’t need to understand the con- ning and Building Act underwrites the framework cepts. The ones who need to understand them are for development of all regional plans, and smart the politicians and the administration, if you are to specialisation may help add depth and value to re- use it as a tool for industrial development.’ (Inter- gional business development. This central Planning view N6) and Building Act is unique in the Nordic context, and its impact on the long-term prospects of the However, it should be noted that the view ex- region may aid and bring forth a thorough integra- pressed by this interviewee was not held by all in- tion of S3 at the regional level (KMD, 2018). terviewees. This points to an interesting debate around the framing of S3 as a concept and distin- Actor engagement in Nordland: Adoption guishing between the macro- and micro-levels of of key concepts innovation. According to one of the interviewees, Nordland County has been organising a series of S3 is both a strategic tool for the funding agen- seminars on smart specialisation since 2017. This cies, and a methodology for the entrepreneurs at ‘S3 School’ as it is known, is aimed at the teaching the ground level. The concepts of ‘domains’ (a re- the central actors in Nordland’s innovation system gion’s resources in terms of institutions, adminis- about the theoretical and practical implications of tration and tacit knowledge in the industry (Mad- S3 (see Nordland County, 2017). The participants sen et al., 2017: 10)) and of EDP (the dual process nordregio report 2019:3 60 of R&D (micro-level) and the ‘self-discovery’ of mise the working forms at the grass roots level. It new areas of potential exploitation (Mariussen, is important to recognise the way in which EDP is 2017)) are guiding concepts that are well-suited framed, whether it is from the public authorities to redirecting and renewing innovation policies at or the business sector. As one of the interviewees the local, regional or national level. In the Trailing stated: Research Group’s project on Smart Specialisation in Nordland, Madsen et al. (2017) writes that the ‘I think it is important to differentiate between S3 focus on domains and EDP sketched out new ways as a designation for regional development [on the to create new business opportunities and new sec- one hand] and, on the other hand, as a strategy tors and clusters, and indicated how to find such that can support change. S3 has become shorthand opportunities. Understanding this policy tool for for strategies, and that is because it is the public ac- innovation may fundamentally change the exist- tors that are talking about it, and not the industry ing approaches and help shape new development or the businesses themselves.’ (Interview N1) trajectories. This was echoed by several of the in- terviewees for this study, including in the following The concept of smart specialisation plays a guid- statement: ing role in the innovation strategy in Nordland County. Although the concept has taken form ‘EDP is one of the most complicated concepts, as it through the efforts of a dedicated county admin- fundamentally changes things and helps these go in istration and key actors in the innovation system, new directions. A whole new area suddenly opens issues remain in relation to the dissemination of up for development.’ (Interview N6) smart specialisation at the grassroots. By and large, smart specialisation is a grassroots con- These concepts may be best suited to creating the cept, and its processes need to be allowed to grow correct frameworks that will facilitate the adop- organically in these spheres. This issue was men- tion of processes, such as entrepreneurial discov- tioned by one of the interviewees working with eries and the recognition of new domains at the entrepreneurship. Ensuring adoption at both the regional level. However, it is worth questioning county and the enterprise levels and demystifying whether businesses need to be increasingly in- the academic governance concepts may be nec- volved to anchor the working methods and legiti- essary.

Nordland's S3 strategy draws on its natural resources. Source: Andreea Chidu / unsplash.com

nordregio report 2019:3 61 Empirical findings: The politics of a ‘systematic approach to common sense’, the innovation and governance for region’s means and mandate to operationalise regional development the strategy might hamper its development and mani­festation as an innovative framework. National policies for regional development There have been recent moves to transfer The relationship between the regional and the na- more responsibility for regional development to tional levels was repeatedly mentioned through- the regional level in Norway. However, as one in- out the interviews for this case study, both in terviewee emphasised, what is required is a closer terms of the scope to manoeuvre within the and more comprehensive governance structure: framework the regions are given and being part of shaping these premises for the future. A related ‘Most financial instruments are connected to the issue is the financial instruments that are required national level today. But there are suggestions that for regional development, as these are anchored the regional reform will transfer quite a few of these to the national level and follow national objectives. instruments to the regional level for the regions to Currently, there is no S3 strategy at the national have a broader set of responsibilities in regional level. However, as the regions are turning towards development. The challenge is that we have so few S3, the national-level government needs to take instruments when creating an S3 strategy when it a closer look at the relative ability of the regions requires a policy mix and a multilevel governance to operationalise innovation strategies, such as structure.’ (Interview N4) enabling EDP to be part of the grassroots’ inno- vative framework and development processes. S3 The expert advisory group on the country-wide re- requires not only financial instruments that are gional reform points out that transferring greater connected to the regional level to a larger degree, powers to the regional level in terms of industrial but also multilevel governance structures that dy- development without a firm agenda at the na- namically evolve with needs at the regional level tional level runs the risk of creating a less competi- in Norway. This comes back to the institutional tive industrial sector internationally. Although this structure that is required for a smart specialisa- was a general comment that did not refer to the tion strategy to take form. Smart specialisation is S3 framework, it recognises the dangers of trans- inherently a tool for enhancing cohesion and level- ferring such development powers to the region ling the ground for a more competitive state. This without harmonising these powers within a firmly suggests the need for a more comprehensive and embedded national agenda (KMD, 2018a: 61). The beneficial financial instrument structure as the re- group also points to the need to develop the finan- gions develop their relative strengths. cial instruments from a regional development per- However, one of the interviewees noted that spective (ibid). limited funds in a region may hamper thorough development of the industrial sector: ‘how [the The issue of funding, SMEs and county] operationalises [S3] is connected to how it ‘branches’ manages its funds; it is the most important instru- Although the smart specialisation strategy is con- ment the county has’. (Interview) Given the extent ceived and implemented at the regional level, it is of the tasks that are within a region’s mandate, important to note the implications when a colla­ prioritising S3 might prove a challenge, as one of borative structure between the national and the the interviewees pointed out: regional levels is lacking. This comes to the fore when considering the operationalisation of smart spe- ‘The question is whether S3 would drown in every- cialisation. As Norway is not a part of the EU, the thing else that they have to deal with, such as infra- regions in Norway are not required to create a smart structure and education. They would rather make specialisation strategy, nor do they receive funding the cuts in [S3] than in the budgets for education from the ERDF to implement such strategies. and roads … I’m not sure it would be prioritised.’ There is a regional R&D fund available to and (Interview N7) managed by Norwegian regions. However, these are not county specific but pertain to larger geo- Based on the interviews, it is evident that although graphical regions (typically two or three counties). smart specialisation is considered a good idea and Using this fund for regional S3 would require a har- nordregio report 2019:3 62 monisation of regional objectives. According to the pelen et al., 2016). In terms of Nordland’s focus on interviewees, the Regional Research Fund in North tourism as part of its S3 strategy, there is a ten- Norway is not formatted optimally to serve the dency to consider funding for R&D in this sector diversified R&D structure that may surface fol- extraneous. However, Nordland County is shifting lowing an S3 strategy. Considering the R&D strat- away from the traditional tourism rationale and egy developed by Nordland in 2013, the objective seeking to develop a more ‘experience-based trav- of the new common R&D strategy between the el’ sector. This was mentioned by several of the in- three counties of Nordland, Troms and Finnmark terviewees, as the following statement indicates: is to create common ground for the prioritisations of the financial funding in the Regional Research ‘A lot has happened in tourism, and there has been Fund. As one of the interviewees stated: a lot of work and research competencies built up fo- cused on experience-based travel, rather than tour- ‘There are three regions with three different struc- ism per se … There is a tendency to think that tour- tures, cultures and strategies. If you try to make ism does not have a need for financing like other something that will fit all, it will not fit anyone. The industries do. It is not technology based. And that is point is that the regions must have politics that a shame because we see that tourism has been lift- complement each other. Having different strategies ed up after the industry started thinking about the will not work in a larger region.’ (Interview N4) production of experiences rather than regular tour- ism; tourism based on how a person experiences the The strengthening of the regional research funds place and not just the nature itself.’ (Interview N6) is a start, but it needs to be considered more sys- tematically. With an increasing number of tasks The criteria used to assess the allocation funding following the regional reform and a budget likely were mentioned as an issue by one interviewee to shrink in the coming years, operationalising S3 from a research funding agency who stated that, from a county administrative perspective might be often, the criteria target industries with a particu- challenging (KMD, 2018c: 3–6; Ministry of Finance, larly technology-driven objective. Moreover, the 2018). Unless regional research funds are increased, financial instruments and funding tend to be tied only small changes are possible. Allowing S3 to take to the dominant industrial sectors in Norway, the precedence through a supportive county adminis- ‘power houses’. Another interviewee commented tration may only allow for smaller changes. on this, noting that funding criteria were connect- ed to wider national objectives and the economic National R&D funding ‘engines’ in Norway: The nature of the national funding opportunities plays an important role in S3. Although the type ‘When the oil sector experiences a downturn, funds of funding pertains to the vision and purpose of are stimulated centrally in e.g., aquaculture, and the the funding agency per se, the overarching na- focus shifts very quickly. That’s when you get these tional focus (e.g., technology development) limits synergies where tech transfer comes in. But some- the funding opportunities for alternative areas thing dramatic needs to happen, or the sector in of research. This is in line with Fagerberg et al.’s question becomes so lucrative that it receives that observation regarding the Norwegian national in- kind of attention.’ (Interview N7) novation system and the ‘selection environment for new entrepreneurial ventures’; Fagerberg et al. This may also explain the strong technology focus state that new endeavours that have very weak in the national funding bodies. Nevertheless, such links to the dominant sectors would find that the a narrow focus might limit the possibility of ex- system poorly corresponds to their needs (2009: ploring alternative specialisations outside the tra- 5) To some extent, this rings true when examining ditional sectors, such as Nordland’s tourism sec- the R&D grant amounts in the RCN’s Project Bank tor. According to an expert on S3 in Nordland, and (Prosjektbanken) (Cappelen et al., 2016; RCN, 2018). echoed by other interviewees for this case study, However, this does not mean that these sys- the situation in Norway makes it difficult to cre- tems are closed to new ventures, but that the suc- ate a regional ‘co-specialisation’ structure. Using cess stories have often been dependent on other the tourism industry as an example, the S3 expert sources of funds, such as foreign investment (Cap- stated that: nordregio report 2019:3 63 ‘We have a situation in Norway that makes it dif- tourism industry, highlight one of the core dichoto- ficult to build up a regional ‘co-specialisation’ struc- mies in this case study: the relationship between ture. One example they use in Nordland is that the industry needs and the funding opportunities they’ve spent 10 years building up capabilities in available. The available funding established the both the industry and in R&D to allow the tourism regions’ relative ability to change paths in terms industry to transition from a service industry to an of R&D and industrial innovation. The case study experience-based economy … but then the funding interviews highlight an interesting perspective in channels are suddenly throttled in those areas of the debate regarding agenda setting and the ties the specialisation that it is most needed. And these between the regional and the national levels; as an kinds of obstacles from a national policy level could interviewee noted, ‘the instruments needed for an be overcome by strengthening the foundations for S3 strategy [are] outside the region’s control’. (In- multilevel governance.’ (Interview N1) terview N4) To read more about tourism as part of smart specialisation, please see Box 9. The structural issues noted in this section, such as the attempt to establish an experienced-based

Box 9: Tourism as a Focus of Smart Specialisation Nordland County Municipality started working terms of conflicts with other industries and on new avenues connected to tourism in the local communities. However, there are currently mid-2000s. They have since then built close no funding opportunities through RCN that relations and collaborative partnerships with may be used to continue to build the tourism key local actors in academia, businesses, and industry with R&D in mind. Moreover, the local public authorities and organisations, tourism industry is dominated by SMEs lacking developing common plans and strategies. the financial fortitude to invest in R&D. Tourism Shifting the focus onto ‘experience-based’ also faces another structural challenge as the tourism through discovery processes and largest tourism-oriented companies are often systematic work is an extension of the partly owned or owned by the public sector. previous regional growth programme on This means that these companies tend to be ‘Coastal Cultures’ (Kystkultur). This new focus disqualified from participating in tenders for on experience-based tourism took part in a R&D for growth, both in terms of business- research project which became part of the oriented R&D and research-based funding. This InnOPP-cluster, generated by the research may mean that the carefully constructed work project Northern InSights and VRI, specifically undertaken on tourism in the local research focusing on the knowledge-based aspects of institutes thus far, may fade. Therefore, the tourism industry. Northern InSights started systematic dialogues and collaborative in 2009 and ended in 2017 after a prolongation efforts with the national level are crucial (Nordlandsforskning 2018). This collaborative for the development of tourism as part of effort between researchers, businesses and Nordland County’s S3 strategy (Interview N5). the public sector resulted in a knowledge and The support letter Tourism2X: Opportunities experience-based tourism and a range of new through National Strategies! (Reiseliv2X: competencies, both theoretical and practical Nasjonal strategi gir muligheter!) backed by within the field of the experience-based a range of key actors in the industry, such as economy (Interview N5). Innovation Norway, The Norwegian Forum The county council in Nordland reported for Tourism, the Norwegian Confederation however that the changing notion of tourism of Trade Unions, LO, Norwegian Hospitality as a knowledge-based economy is not yet Association, researchers, and the Enterprise considered comprehensively at the national Federation of Norway are lifting the cause to level. Tourism, as an industry, uses the same bring Norway to the forefront of sustainable natural and common resources as e.g. tourism in light of global megatrends and new aquaculture and faces similar challenges in challenges (Nordlandsforskning n.d.).

nordregio report 2019:3 64 EDP and engaging actors: tive ability of the companies in Nordland to ap- Geographical and structural challenges ply for funding for R&D because, as one of the in- Engaging actors across the regional innovation terviewees stated, it is not the main ‘concern’ of system has proved a challenge. Geographical dis- the company branch. This was also recognised in tances continue to make collaboration difficult de- Nord­land’s R&D strategy (2013). The relative size spite the digital age. As the majority of the com- of the companies, their collaborative nature and panies in Nordland are SMEs, this often means the distances create an unfavourable environment that their capacity to apply for funding (e.g., for for securing the funding required to realise key S3 R&D) is limited without support from larger com- concepts. As an interviewee stated: panies (Nordland County, 2013). According to an interviewee working with entrepreneurship, the ‘Many of the financial instruments we distribute fa- smallest companies tend to be highly specialised vour larger businesses, or businesses that collaborate but also geographically bounded, which limits their with others. And with large distances, collaboration ability to connect and collaborate with companies becomes more difficult, and with a host of smaller that could assist them in bolstering their position. enterprises, it becomes even more challenging.’ According to this interviewee, distance may ham- (Interview N3) per collaboration, with the result that the SMEs’ chances of winning the most competitive funding is According to the Norwegian Statistical Bureau, reduced because ‘collaboration is often a precondi- it is the most established companies that benefit tion’. (Interview N3) This issue was also mentioned most from the existing framework for financial as a hurdle by the government’s expert group on instruments (Cappelen et al., 2016). This was also the regional reforms (cf. KMD, 2018a: 61), a state- observed by Clausen (2009), who notes that firms ment echoed by that of another interviewee: ‘The with already existing innovation capabilities (e.g., tendency to concentrate R&D and competencies … as shown in relation to patenting activity) were and [the establishment of] branches13 … limits our ‘significantly more likely to access public R&D fund- development potentials.’ (Interview N6) ing’ (Clausen, 2009: 365). Thus, a self-reinforcing This could mean that the ability to attain na- mechanism occurs, as firms with an innovative his- tional funding is relatively uncertain, as the overall tory are able to initiate more projects, resulting in concentration of R&D in major innovation centres a larger gap between the highly innovative firms in Norway and the emphasis given to collaboration and the less innovative firms or the traditionally in R&D becomes an issue for regional development less innovative firms or sectors. This is evident in in Nordland. Closer harmonisation may benefit ef- sectors such as construction and tourism, which forts to link the national needs with the existing can suffer from too narrow a funding portfolio at regional economic structure. This is also relevant the funding agencies: when considering the absorptive capacity of SMEs and it may further encourage a holistic view on re- ‘We have also got a very strong, proactive and inno- gional innovation policies in light of the develop- vative tourism industry, but we are struggling with ment of skills and competencies. As such issues fall finding the right financial instruments, and perhaps within the regions’ jurisdiction, it might be worth the instruments are not designed to include them.’ examining the systemic nature of the strategies to (Interview N3) sustain future needs. With regards to smart specialisation and the Smart specialisation may assist in overcoming ability to ensure EDP, there are other issues that this problem, as the traditional sectors are gener- need to be considered as well. An examination of ally favoured as investment opportunities in Nor- the R&D Strategy for Nordland clearly indicates way—by public and private capital—even though that the largest companies in Nordland are the there are signs of new sectors emerging. This may subsidiaries of larger firms, with their R&D facili- result in a diversified structure of related variety. ties located elsewhere (Nordland County, 2013). How­ever, this depends greatly on the location of This is particularly important in terms of the rela- the innovation departments and the increased knowledge opportunities discovered by the parent companies in a specific area. Cracking this code 13 'Filialisering’. would release the potential of S3 and help connect nordregio report 2019:3 65 Nordland’s regional innovation system with an in- ture of project applications to Norwegian funding creased national or international presence. agencies; and 2) the willingness to take on risks. Thus, the availability of funding and the risks en- EDP and risk management tailed concern ‘the public sector culture and their Operationalising EDP may be challenging because troublesome relationship to risks’. (Interview N1) of the mismatch between the regional S3 objec- There is an argument for a stronger multileveled tives and the availability of purposeful national fi- governance system to strengthen the framework nancial instruments corresponding to the region’s within which EDP and the exploration of new do- needs. This was clarified by one of the interview- mains may develop. ees, who commented that ‘EDP is difficult to op- erationalise when you do not have control over the Norwegian path dependency and S3: funds that [are] needed to incentivise such a pro- Match made in heaven? cess’. (Interview N4) The existence of already well-established sectors is Another factor required to enable EDP to an important variable for the success or failure of manifest at the ground level is the availability of new areas of innovation, as noted by Cappelen et investments and risk buffers. It is clear that the re- al. (2016), Clausen (2009) and Neffke et al. (2011), gions have a role in incentivising the development among others. In Norway, successful innovation of entrepreneurial innovations through, for exam- has historically been tied to the economic devel- ple, public procurement. Venture capital is also opment of resource-intensive industries (Castel- available in Nordland, but such companies tend lacci et al., 2009). Although similar mechanisms to to be risk averse, according to an interviewee, and those of EDP have previously been utilised (Mari- target familiar areas or areas where they have al- ussen et al., 2016), it is nevertheless interesting to ready made investments, as previously mentioned note the viability of these innovative ideas in re- in this case study (Mazzucato, 2013). Foreign in- lation to established sectors (Clausen, 2009). In vestment is also important for new ventures to an article entitled Industrial R&D Policy in Norway: gain momentum in the Norwegian national inno- Who Gets the Funding and What Are the Effects?, vation system, with most foreign investment aris- Clausen notes that the beneficiaries of R&D and ing from various EU funding mechanisms (Clausen, other funding tend to be connected to the larger 2009). The Research Council of Norway’s Project industries and possess economics of scale and Bank (Prosjektbanken) indicates that the main re- scope (Clausen, 2009). Considering the flows of cipients of such funding in Nordland County were R&D funding between governmental funding bod- the SME instruments for Phase 2 such as general ies and recipients, it is clear that the likelihood of R&I activities and small-scale research projects receiving funding is higher when a recipient has al- (RCN, 2018). ready received funding from another agency in the Returning to the issue of the resources that national innovation system. In addition, there are are available to companies and industries to re- recurring investments in the ‘dominant’ sectors duce risk, it is clear from the interviews that public of the former ‘national champion’ policies (Inter- support is highly sought after to bolster new de- views; Cappelen et al., 2016; Innovation Norway, velopments, especially in a region that is charac- 2017). This has driven the call for a closer relation- terised by SMEs and sole proprietorships: ship between national and regional framework agendas in driving regional development politics. ‘The less resources available for reducing develop- The adoption of the key concepts such as EDP ment risks, the more difficult it is to do development and domains is important for various reasons, as work. Sole proprietorship is high risk. Public support mentioned in the sections above, but the most is very important in such instances. Even if it is a pertinent issue is the homogenisation and stream- small project, it might develop into something larger.’ lining of funding agencies so as to complement the (Interview N6) innovation system and help drive the S3 agenda forwards. According to the interviewees, this has so In recognising risk as part of the S3 development far been a challenge, resulting in a narrow strategy. objectives, two considerations need to be taken Nordland’s innovation system may be charac- into account according to one of the interviewees: terised in terms of the structure that spans Nor- 1) prioritisations in terms of the quality and na- way at large—an innovation system based on a nordregio report 2019:3 66 strong relationship between the sectoral and the The existence of a Nordic model for S3 was national system (Fagerberg et al., 2009). According discussed during the interviews, and a few themes to Fagerberg et al., this system is co-evolutionary, recurred in relation to the high levels of social capi- in that the national system develops policies and tal and trust. In particular, willingness to change, institutions that corresponds to the traits seen in including reorienting towards new ways of work the sectors and the economic development pro- is more likely when countries are more innovative cess (ibid: p. 5). In such a system, these authors and possess more social capital. Moreover, the argue, the interaction between the national and high levels of education and the recruitment of the sectoral innovation systems reinforces an en- academic labour power by regional and other au- vironment where new ventures are limited by in- thorities might mean a higher absorption capac- creasing path dependency, rendering the success of ity when it comes to understanding the need for new ventures dependent on the relative economic change and building bridges between the public strengths of the sector to which they belong and private sectors. Nevertheless, as one inter- (Fagerberg et al., 2009). In other words, ‘history viewee notes: ‘We are not sheltered from institu- matters’ for ‘new combinations’ (Schumpeter, tional drag’. (Interview N1) 1934 (2004)). Considering the long tradition of sectoral in- Key findings novation in Nordland, S3 should be able to unlock Although the concept of smart specialisation is the potential of the main industries and diversify not entirely new in terms of the way in which the the industrial economic structure in the county. Norwegian innovation system operates, Nord- The key is overcoming the funding barrier at the land is the first region in Norway to adopt such a national level. strategy, despite the fact that Norway remains outside the EU. Embedding the smart specialisa- The green transition and the Nordic model of S3 tion framework as part of the regional innovation When asked about the role of smart specialisa- strategy has proven beneficial for Nordland County, tion in driving the green agenda, the interviewees as it has helped target its prioritisations and chan- consistently answered that green perspectives are nel funding. Smart specialisation is gaining mo- by and large incorporated in the existing industrial mentum in Norway, and the Ministry of Local Gov- and research processes, and often figure as a pre- ernment and Modernisation’s recent guidelines condition for receiving funding and support from to help navigate and introduce the S3 concept in the state level. According to one interviewee, includ- the Norwegian context is an important symbolic ing aspects on sustainability and green growth is to step. The Norwegian path-dependent innovation the advantage of a project application: system may provide a favourable environment for S3 to blossom, although there is a risk of stalling ‘It is quite evident in our tender calls that [the green this process by focusing on the dominant exper- aspects] should be an advantage … so when we work tise already in place, and preventing opportunities with project processes, we do make it clear that we in new domains being realised. are looking for sustainability aspects and how they Following the interviews conducted for this are emphasised, because it is a criterion your pro- case study, it seems that there is some tension ject proposal is measured against.’ (Interview N3) between the local, regional and national levels regarding innovation, promotion and funding of The green transition is a component of a brand- R&D&I. One way to potentially ease this tension ing opportunity, but it also involves restructuring is by finding a governance approach in which the working processes, aligning these with other im- financial instruments are supported in a comple- portant mega trends, such as digitalisation, and mentary way. The creation of place-based regional influencing the old industrial paradigms. However, innovation strategies is indeed in need of synchro- smart specialisation could be a method for further nisation through the alignment of funding. How- systematising the green transition and the circular ever, this should happen in a mutually reinforcing economy, by means of EDP. To achieve this, one of way, between the regional and the national level. the interviewees called for public actors to play a It is natural that established structures are being greater role as facilitators in incentivising changes challenged, as a process driven from the bottom- to traditional industrial development. up gains momentum through the general disper- nordregio report 2019:3 67 sal of the S3 concept as a tool for enabling inno- and regional levels. This is particularly evident in vation at the regional level. However, joint efforts relation to the proximity of companies and the and initiatives at the regional level are needed to ability to create domains, discover new entrepre- successfully adapt and develop the S3 concept in neurial ventures and incentivise related variety. As Nordland. Boschma states, ‘Relatedness requires connectivity’ With limited room to manoeuvre in terms of (2016: 6). available finance and an expected increase of Following a thorough analysis of the region, tasks following the regional reforms, S3 seems Nordland has created a solid foundation from more relevant than ever in enabling a focused and which to develop its strategies. With an engaged concerted approach to innovation. One of the re- county administration, and with an extensive quirements for successfully implementing S3 is to knowledge of the region’s advantages taking own- have a firm understanding of the regional areas ership of the process, the S3 concept has the po- of strength. Despite ticking the boxes for ena- tential to spread across the region. Thus, it is im- bling such a strategy at the regional level in terms portant for the Nordland County administration of leadership and targeted prioritisations, there to continue spearheading the concept by taking are significant hindrances lurking in the decou- ownership of the processes alongside increasingly pled structure of available financial instruments integrated and synchronised national policies on and funding opportunities between the national smart specialisation.

nordregio report 2019:3 68 ICELAND Iceland by Ágúst Bogason Biggest city: Reykjavík, capital of Iceland Population: 353,070 (July 2018) Introduction Area: 103,000 km² As Iceland is not an EU member, there are no re- Areas of strategic importance: Tourism, fish quirements for it to adopt smart specialisation in processing, aluminium smelting, geothermal its regional development plans. In Iceland’s new and hydropower regional policy (Byggðaáætlun) for 2018–2024, there is no formal mention of smart specialisation (Samgöngu- og sveitarstjórnaráðuneyti, 2018a). the Prime Minister's Office, the Ministry of Edu- The same can be said for the Regional Growth cation and Culture and the Ministry for Environ- Plans (Sóknaráætlanir landshlutanna) that each ment and Natural Resources. The Prime Minister's region develops around their own priorities. Al- Office is responsible for the activities of the Sci- though smart specialisation strategies are cur- ence and Technology Council (Vísinda- og tækniráð) rently not formally used in Iceland and the concept which, among other things, has the responsibility is not mentioned in the relevant policy documents, of defining the government’s policy regarding sci- there are many indicators that similar strategies ence, innovation and technology. Other funds that are being used. finance different R&D projects also exist. The ad- In the past, Icelandic policy making for in- ministration of these funds is largely carried out novation and economic development has been by the Research Center of Iceland (Rannís), which dominated by the national-level government. again operates under the Ministry of Education Due to the governance structure in Iceland, the and Culture (Fjármála- og efnahagsráðuneytið, term ‘regional’ is limited in use because there are 2018). only two governance levels: national and munici- Other government-funded units, institutions pal (Lindqvist et al., 2013). Nonetheless, decision- and smaller funds operate in different regions of making and policy making regarding regional pri- the country. The largest of these actors is the Ice- orities, innovation and funding have increasingly landic Innovation Centre (Nýsköpunarmiðstöð), been moving from the national level to the mu- the main tasks of which include the interplay of nicipalities, which collectively make growth plans technological consulting and business support, for their regions. The Regional Growth Plans, along encouragement of innovation and support for the with Iceland’s newly introduced National Regional advance of new ideas through research, develop- Plan and the newly developed Regional Destina- ment projects, business development and profes- tion Management Plans for the tourism industry, sional advice and consulting (Nýsköpunarmiðstöð, have involved wide collaboration and consultation 2018a). The Innovation Center operates in the City with business interest groups, trade unions, local of Reykjavík but also has smaller facilities around authorities and regional associations, focusing on the country (Nýsköpunarmiðstöð, 2018b). Matís the existing strengths of each region. Work has is a government-owned, non-profit, independ- also begun on a new National Innovation Policy, ex- ent research company founded in 2007 following pected to be finished before the end of April 2019, the merger of three former public research insti- and the development process for this will include tutes. Matís pursues R&D aligned to the food and participation by a wide range of stakeholders. The biotechnology industries and has laboratories or policy review that follows is based on desktop re- Food Innovation Centers located in eight cities and search and in-depth interviews with stakeholders. towns around Iceland (Matís, 2018). The University of Iceland also has nine research centres outside Current policy and institutional the capital area (Háskóli Islands, 2018) and the framework University of Akureyri and the University of Rey- For the last few years, innovation activities have kjavík have been expanding their research activi- mainly been fostered by the Ministry of Indus- ties around the country, an important move in fur- tries and Innovation. However, certain activities thering innovation at the regional level. As one of in the field of innovation are the responsibility of the interviewees stated:

nordregio report 2019:3 69 Iceland finds synergy effects in its blue bioeconomy and tourism. Source: pexels.com

‘The presence of the universities in more rural areas food production, fishing, aluminium and tourism and the formation of knowledge-based clusters has industries. The current Icelandic innovation system had a great effect. It has encouraged innovative has placed Iceland eighth on the European Innova- thinking, especially in the regional sense. The social tion Scoreboard in 2018. However, there is a struc- impact this has had is considerable.’ (Interview I2) tural difference between the EU and Iceland, as Iceland’s GDP per capita is well above the EU aver- So-called business development agencies (Atvin- age but, at the same time, the employment shares nuþróunarfélög), which are part of the national in manufacturing and high-tech manufacturing innovation strategy, have also contributed to fur- are well below the EU average. Innovation-friendly thering innovation in more rural areas. They mainly environments and attractive research systems work directly with business development and in- are the strongest innovation dimensions when it novation in a regional or local context. These de- comes to measuring innovation performance in velopment agencies are linked to the Regional Or- Iceland, whereas sales impact and intellectual as- ganisations of Municipalities (Landshlutasamtök sets are the weakest innovation dimensions (Euro- sveitarfélaga) that operate in eight different re- pean Commission, 2018). gions. In recent years, these organisations have R&D expenditure as a percentage of GDP has taken on more responsibilities in regard to policy fluctuated over the past decade. It was at its low- making and decision-making in innovative regional est, 1.76%, in 2013, compared with a peak of 2.92% matters. This step has been essential in building a in 2006 (Hagstofa, 2018). In 2016, expenditure as foundation for place-based innovation to occur. As a percentage of GDP in Iceland was 2.08%, com- the majority of the municipalities have very small pared with the OECD total of 2.23% (and 3.26% in populations and limited resources, these organisa- Sweden, 2.75% in Finland, 2.87% in Denmark and tions have provided a platform to join forces and 2.03% in Norway)14 (OECD, 2018). co-ordinate innovation efforts. Clusters in which In the guiding policy statement Iceland 2020, public institutions, private and public companies, written as a response to the financial crisis of industry and universities combine their expertise have been developing around some areas in the 14 The numbers from 2016 are the most recent comparable last few years, mainly in relation to the energy, numbers available. nordregio report 2019:3 70 2008–2009, a goal of significantly increasing ex- ‘Municipalities are not obligated to participate in penditure on R&D was espoused. In a policy strat- the Regional Organisations but most of them do egy document released by the Science and Tech- nonetheless, since not participating would also re- nology Councils in 2017, a goal of R&D expenditure move the possibility of influence. … The creation of amounting to 3% of GDP before 2024 was estab- the Regional Organisations has been beneficial for lished. Today, around one-third of the R&D ex- everyone involved.’ (Interview I4) penditure comes from public funds, whereas the rest comes from international R&D funds, EU ini- In recent years, these organisations have been en- tiatives and the private sector (Mennta- og men- couraged by ministries and the Icelandic Regional ningarmálaráðuneyti, 2017a). Development Institute (Byggðastofnun) to de- In recent years, there have been suggestions velop independent strategies, so-called Regional that the structure of the regional and innovation Growth Plans (Sóknaráætlanir landshlutanna). policies should be reformed, as evidenced in vari- These are strategic plans that cover the local op- ous policy documents. The proposed reforms in- erating areas of each Regional Association (Land- clude a simplification of regulations, increasing shlutasamtök sveitarfélaga). They include a status tax rebates for innovation and research funding assessment of the relevant region, a vision for the and the creation of a better and more compre- coming years, goals and actions to achieve those hensive support system for clusters (Fjármála- og goals. The Regional Growth Plans specify regional efnahagsráðuneytið, 2018). A few changes have al- priorities, while taking into account the main ob- ready been put into practice and have contributed jectives of Iceland’s rural and regional policy, devel- to moving the policy making for innovation and opment policy, cultural policy and, where appropri- economic development from the national level to ate, other public policies. A Governmental Steering the regions. This also includes the distribution of Committee on Regional Issues (Stýrihópur stjór- funds. Further structural changes are on the agen- narráðsins um byggðamál) supports the regional da and a new National Innovation Policy is now in associations in creating the Regional Growth Plans the making. and making agreements between regional associ- ations and ministries (Samgöngu- og sveitarstjór- Recent developments: Empowering naráðuneyti, 2018b). the regions There are eight informal Regional Organisations of ‘The aim of creating these Regional Growth Plans Municipalities (Landshlutasamtök sveitarfélaga) in was mainly to bring the decision-making and re- Iceland established by the Icelandic Association of sponsibility to the regions so they themselves can pri- Local Authorities (Samband íslenskra sveitarfélaga). oritise and allocate state funds to their regional and These organisations consist of municipalities in a community development projects.’ (Interview I4) particular region and they are involved in the de- velopment of regional affairs and in safeguarding At first, there was some doubt regarding how well their interests for their specific area. Creating a the regional organisations were equipped to handle platform for the municipalities to collectively or- these new tasks. However, after a short adjust- ganise and prioritise was considered necessary ment period, all regions proved to handle the tasks to further regional innovation matters. By estab- well, according to the interviewees. The increased lishing formal organisations of municipalities and strength that followed municipal co-operation sharing knowledge and resources, stronger units soon provided opportunities to develop more for- that are better equipped to move place-based in- mal institutions around the regional issues. As a novation forward were created. result, some areas have opened regional offices These organisations do not have the formal that provide a co-ordinated and interdisciplinary legal status of being a third branch of the public service related to economy, education and culture administration. Nevertheless, their creation has in the region. By moving these tasks to the regions, assisted in avoiding certain governance structural the municipal level has been empowered through issues that would have hampered place-based in- the regional organisations, creating a more fer- novative and regional development possibilities. tile ground for innovation. Although they are not According to one interviewee, the existence of these formally the third level of administration, their regional units has changed things for the better: active involvement has given small municipalities nordregio report 2019:3 71 a collective voice. After overcoming initial obsta- ‘Too often no funds were connected to the policies cles, the system is now running smoothly, so it is and as a result there was no monitoring or follow- assumed that more responsibilities will be moved up. As a result, too often, nothing happened.’ (In- to the regions in the future. terview I4)

Improved effectiveness and development This situation has been altered by changing the Two separate evaluations of the R&I environment process and moving funds and decision-making to in Iceland have pointed out that there is a lack of the regions and by re-evaluating the plans every effective prioritisation of public investment in R&I year through a built-in evaluation system that has (Taxell et al., 2009). One report argued that en- been put into place. hanced prioritisation could lead to better results, Therefore, the Icelandic innovation environ- an increased impact of research efforts and more ment can best be described as being in a transi- efficient use of human resources and funds (Heijs tion phase. Even though the centralisation of et al., 2014). The report of the European Research policy making and the distribution of funds for in- and Innovation Area Committee also suggested novation have moved more towards the regions, that it was important to link the development of formally the national government is still the main research areas to the overall research priorities actor. The governance structure makes it hard to (European Council, 2014). Problems regarding the decentralise the public innovative system. None- unclear link between government policy and the theless, some steps have been made to move the different R&D&I funds have also been discussed process closer to the regions themselves. The pro- domestically (Mennta- og menningarmálaráðuney- cess of targeting priorities and distributing funds, ti, 2017a). Therefore, one of the reasons for under- which used to be dominated by the national gov- taking the recent structural changes to the sys- ernment in a very top-down way, has moved more tem in Iceland was to tackle these problems, while towards a bottom-up process. The new system ensuring the best use of funds and providing for has created smaller and more independent units more local participation (Samgöngu og sveitar- that are making their own plans with broad stake- stjórnaráðuneyti, 2018b). holder participation. The decisions are increasingly One interviewee stated that the transparency taken at the regional level, while the government of the whole process had increased simply by mov- and ministries have adopted more of a monitoring ing the decision-making to the regions (Interview role, providing the strategy and creating dialogue I4). According to this interviewee, previously the di- between different actors. In that sense, centrali- vision of funds could be regarded as highly person sation has decreased but, at the same time, the and network dependent, resulting in uneven fund- whole process has been regulated and formalised. ing across the country. Thus, the legitimacy of the process has been increased considerably by giving S3: Organic or by recipe? Limitations the municipalities more authority. New laws about and applicability public spending, mainly the Public Finance Act, While discussing the possibilities of smart speciali- which was established in 2015, have also played a sation as a strategy, some experts consulted in part in changing this for the better. this case study expressed the view that the term Now, the Regional Growth Plans have also been might not be a ‘game changer’ that would revolu- implemented into law, with the Icelandic Associa- tionise the way innovation is conducted, at least tion of Local Authorities (Samband íslenskra svei- not in the Nordic countries. Some considered that, tarfélaga) involved in the process. This provides a in a way, the smart specialisation strategy is sim- better connection between the National Regional ply a term that has developed from and replaced Development Plan and the Regional Growth Plans ‘clusters’. Some of the interviewees revealed that for each part of the country by integrating dif- this innovation development has been occurring ferent policies on different issues into one. Before organically in the Nordic countries for some time this, according to some of the interviewees, poli- without guidance from some sort of framework: cies of one sector were not necessarily in line with policies of other sectors: ‘When encouraging innovation, the Nordic countries have for a long time put emphasis on exchanging

nordregio report 2019:3 72 information and focusing on what is already being ‘You might say that the way of doing innovation in done well.’ (Interview I3) the Nordic countries is not necessarily based on the smart specialisation ideology, but rather that the Other informants mentioned that the Nordic smart specialisation ideology fits with what is being countries and the Baltic states had been focusing done at these places and has been done for quite on the factors that smart specialisation highlights some time.’ (Interview I2) even before the concept was developed. They argue that different clusters in the Nordic countries have In this manner, according to some of the inter- emerged more or less spontaneously when work- viewees, smart specialisation has adopted much ing with existing strengths in specific areas around of what was already in place in the Nordic coun- certain ecosystems, industries or resources in co- tries. In Iceland, as well as the other Nordic coun- operation with universities and authorities. Thus, tries, the focus in the last decade or so has been smart specialisation has adopted and developed on complementing and working further with lo- how these clusters have emerged and what has cal uniqueness and specialties already in place in caused them to be successful in generating and certain regions, increasing the inclusive and inter- fostering innovation. This includes focusing on active process of stakeholders’ involvement, en- what has been done well in these areas—using lo- couraging the creation of co-operation platforms, cal knowledge and further using existing resources support services and infrastructure that manage to develop valuables in innovative ways. One inter- flows of knowledge and information between dif- viewee expressed the view that smart specialisa- ferent actors and enhance a culture of innovation, tion was, in fact, just a slightly different definition creativity and quality. For the most part, these in- from the cluster concept but, by introducing a new terviewees considered that this happened without term to replace the old one, certain priority as- a national framework or a strategy dominating pects that are emphasised can be better defined. the innovation sector. In this way, some aspects of the smart specialisa- Some even added that one of the main char- tion strategy have provided tools to sharpen the acteristics of Nordic innovation compared with in- way in which innovative strategies are perceived, novation elsewhere was the way that innovative especially the focus on the local, place-based com- thinking has occurred over a longer period of time, ponent. This is considered to align with the direc- which has encouraged ongoing dialogues between tion Nordic innovation has taken in recent years: different actors and utilised existing strengths to

Source: shutterstock.com

nordregio report 2019:3 73 create more value. This way of approaching inno- ing planned and developed in Iceland, the country vation also led to another Nordic characteristic, had applied for EU membership and negotiations whereby the consequences of innovation are often with the EU were ongoing. The EU membership environmentally friendly: was later revoked, but the Regional Growth Plans and other structural changes to innovative and re- ‘If I should name one thing to describe Nordic inno- gional matters were often made with EU guide- vation it would be sustainability. That is a concept lines in mind when they were developed. that is in the foreground of most Nordic innovation. Innovation is always in some way about problem A new innovation policy and future solving and now, environmental problems are high developments on the agenda. Green solutions are, because of this, While some steps have been taken recently to often a side effect of innovative thinking, at least in improve the innovation structural framework in a Nordic context.’ (Interview I2) Iceland, further changes are on the agenda. Now, efforts are being and have been made to At the same time, these same informants ex- strengthen the support system for entrepreneurs pressed the view that smart specialisation, while and startups, and work has begun on preparing in many ways useful, has some limitations for Ice- an official cluster policy for Iceland, focusing on land. These limitations are mainly due to the small the strengths of different industries in different population and the lack of industrial diversity and regions (Fjármála- og efnahagsráðuneytið, 2018). economic possibilities: The preparation of a new innovation policy for Ice- land has started in co-operation with representa- ‘Apart from the capital area, Akureyri and a handful tives of political parties and various stakeholders of other towns, the settlements all have 4,000 in- in close consultation with the industry and the sci- habitants or less, most of them far less. The towns entific community. This work will produce a com- are almost all located along the coast, have the prehensive innovation policy for Iceland, providing same climate and rely on the same resources. Cul- guidance and suggestions for a strategic framework. turally, there are no real differences, no language difference or even dialects and no historical minori- ‘I have expectations that the innovation strategy ties. This homogeneity of course affects the eco- will, through this interdisciplinary co-operation, be nomic possibilities.’ (Interview I1) able to cover all the different issues that innovation must take into consideration, and that our society Because of the small population, limited funding as a whole will benefit.’ Þórdís Kolbrún R. Gylfadót- and expertise, the possibilities for diversifying the tir, Minister of Industries and Innovation (Ministry economic activities and increasing regional resil- of Industries and Innovation, 2018b). ience are diminished. The interviews conducted for this case study revealed that the small popula- Formally, there is no smart specialisation on the tion has also resulted in a tendency to centralise agenda for Iceland’s new innovation policy. None- decision-making. There are quite a few examples theless, the future vision is that Iceland will be a in Iceland where the focus has been on using the leading actor when it comes to R&D, innovation existing facilities and products along with the lo- and knowledge-based industries, to ensure that cal knowledge that has evolved around it, to cre- it is better prepared to face the social challenges ate more value in a creative and innovative way caused by further diversification of the economic from raw materials and natural resources already foundations, so that the well-being of citizens is in place. In that way, it can be argued that aspects based on a more solid foundation. The aim is that of smart specialisation are already existing in the tax regulations, including rebates for research Icelandic innovation environment, even though funding and acquisition of foreign expert advice, the smart specialisation model has not been con- will be altered to further encourage innovation sciously used: that is, a de facto smart specialisa- in companies, with the aim of increasing interna- tion has emerged. tional research collaborations in accordance with However, it should be taken into consideration the Government's Policy Agreement (Fjármála- og that when the recent structural changes were be- efnahagsráðuneytið, 2018).

nordregio report 2019:3 74 Regulations and administrative affairs are to direction. Lack of diversity in the economic activi- be simplified and a more comprehensive support ties in the different regions and the small popula- system for companies, regional actors, universi- tion mean limited expertise and funds, as well as ties and research centres to undertake innovation tendencies to centralise decision-making. The gov- is to be developed. The goal of strengthening in- ernance structure also has limitations and, while novation, both in the private and the public sec- the national level has given more authority to the tors, is to be achieved through the integration of municipalities, it is likely that the national govern- institutions and different funds along with better ment will remain the most prominent player. co-ordination of procedures. There is also a plan However, many similarities can be found be- to better support the development of innova- tween smart specialisation and how Iceland is de- tion at all levels of the educational system (Stjór- veloping its innovation strategy, and much of the narsáttmáli, 2017). Even though the term smart current framework was partly or wholly developed specialisation is not going to be in the foreground while Iceland held candidate status for EU mem- when this new innovation policy is developed, al- bership. Trying to integrate the regional aspect most every single aspect targeted is similar to the into more policies is an ongoing project that has S3 ideology. The new policy will mainly serve as called for greater local involvement. The creation a framework and strategic tool, providing guide- of regional organisations with responsibility for lines for those working on innovative matters to Regional Growth Plans has made it necessary for achieve the desired goals. It is not meant to be a different actors to have an ongoing dialogue, which specifically place-based framework, but rather to has made the whole process more transparent and, help incorporate and encourage thinking similar to in the end, more effective. This has many things in smart specialisation and, in that way, act as an in- common with the ideology of smart specialisation. strument to further innovation in rural areas. It is According to the interviewees, it can be debated hoped that the changes already put in place will be whether the Nordic countries are basing their in- consolidated through the new innovation policy, as novation strategies on smart specialisation or if will other structural changes that are on the agenda, the S3 ideology is simply following what the Nordic making the whole process more transparent and countries have been doing for the past decade. at the same time more beneficial for everyone Either way, more focus is now put on existing involved. This includes the creation of a more for- local knowledge, resources and strengths than mal review mechanism, improving the monitoring some years ago. The interviewees expressed the and evaluation of the whole process and enabling view that this has occurred in part organically and regular updates of the strategic choices made. Ice- in part based on learning from the experience of land’s innovative framework has previously had a other Nordic countries that are developing clus- great deal in common with the strategy currently ters. Strategies in line with smart specialisation being targeted at a regional level in the EU and, if seem to be more apparent in smaller regions in everything goes according to plan, will continue to Iceland, where companies are working on a smaller evolve in that way. Thus, even though smart spe- scale, whereas larger and more established Icelan- cialisation will not formally be used as a frame of dic companies, operating in bigger markets, devel- reference in the process of developing a new policy, op their own strategies for innovation. when examined in more detail, it is clear that it is, There are many examples where innovation at the very least, a close relative of the S3 ideology. has produced interesting products in different places around Iceland by focusing on what already Key findings exists in the area and environment. In that way, As a non-EU member, Iceland has no requirement people have defined in detail where value is al- to implement the smart specialisation approach ready being produced, what national resources are to its regional policies and it is not likely to do so. in place, what kind of companies and businesses Although steps have been taken to develop a more already exist in the area and what the local knowl- regional-based framework around innovation edge is based on. Then, focusing on those aspects, matters, and hopes are that even more responsi- they have developed new innovative products and bilities can be given to the regions, Icelanders are services. In this way, some areas have been able also realistic about how far they can go in that to optimise their scarce resources to create some-

nordregio report 2019:3 75 thing new. Moreover, this way of thinking is being lated to smart specialisation will formally become highlighted as a strategy for doing more innova- part of Iceland’s National Innovation Policy. tive thinking in the future. In many ways, Iceland has come a long way The links between a national innovation policy in generating innovative thinking in similar ways and the regional policies are not formally in place, to its neighbouring countries. It has not formally but might be when the new national innovation adopted smart specialisation, but some process- policy has been developed. Regions have already es incorporate the general ideas of the concept. defined their own challenges and been granted However, it is a matter of debate whether Iceland more authority in their own regional prioritisa- is actively using smart specialisation or if smart tions. If further development of the innovative sys- specialisation is promoting what the Nordic coun- tem goes as planned, different plans at regional tries have themselves developed when nurturing and national levels will integrate with each other innovative matters in a regional context. in the coming months and a framework closely re-

nordregio report 2019:3 76 THE ÅLAND ISLANDS Åland by Laura Fagerlund and Mari Wøien Biggest City: Mariehamn Population: 29,733 Introduction Area: 1,581 km2 Åland is an autonomous, demilitarised province Areas of strategic importance: Maritime in the Baltic Sea, officially part of Finland. Be- industries ing autonomous, Åland has its own government, Sources: ÅSUB (2017); Nordisk Samarbete (n.d.) which answers to Åland’s Parliament. Åland is also responsible for the functions undertaken by Fin- land’s regional councils, such as regional and land- use planning. Åland’s strength lies in its maritime Policy and institutional framework sector, which accounts for approximately 20% of Employment of the term smart specialisation in Åland’s GDP (ÅSUB, 2017). Its maritime sector is Åland’s Innovation Strategy 2014–2020 is a re- a starting point for smart specialisation on Åland, sponse to the ex ante conditionality for receiving but the sector relies heavily on co-ordination from funds from the ERDF. However, the islands were mainland Finland. As a relatively small and open already utilising smart specialisation methods and province, the maritime sector is also prone to practices, according to one of Åland’s experts on changes on the international scene. Åland also has smart specialisation: a strong tourism industry, a developed IT sector, and agricultural and energy sectors (ÅSUB, 2017). ‘Åland is doing the same things as it has been doing These also serve as a starting point for establish- before but are now calling it smart specialisation’. ing smart specialisation on the island. (Interview Å3) The Government of Åland’s Innovation Strate- gy 2014–2020 provides a comprehensive overview The operationalisation of the Government of of the region’s strengths, weaknesses, opportuni- Åland’s Innovation Strategy responds to the chal- ties and challenges. Strengths include a strong tra- lenges observed in the welfare sector, as well as dition of self-employment and entrepreneurship, to pressing issues concerning the environment and coupled with Åland’s small scale, which is ideal for climate change, and the need to bolster both en- experimentation, its location between Finland and ergy and food supplies. The long-term aim of the Sweden and core competences, especially in the strategy is to increase productivity, levels of em- maritime sector. The Innovation Strategy also re- ployment and further export of sustainable and fers to current challenges on Åland, related to its competitive products (Ålands Landskapsregering, small-scale society, which contributes to the law 2015). of Jante15, enterprises that are founded without The key actors for innovation and smart spe- ambition to grow and expand outside the region, cialisation on Åland are the education sector, inflexibility in the education sector and difficulties businesses and the business sector’s organisa- matching supply and demand for certain compe- tions. Several actors were involved in the develop- tences (Ålands Landskapsregering, 2015). Åland’s ment process of the Innovation Strategy, including opportunities are centred around maximising the Åland’s Growth Council, the Industry Department knowledge brought in by improving the education of the Government of Åland, a strategy group and in adherence to Åland’s core competences, as well six working groups for the new EU programmes as furthering tourism that focuses on Åland as an 2014–2020, a monitoring committee and ex ante ‘exotic island’ (ibid.) This case study takes a closer evaluators. Moreover, the process involved sev- look at the innovation system in place on Åland, eral workshops, discussions and seminars. Smart alongside the enabling and impeding factors for specialisation strategies regulate the European the realisation of smart specialisation on the island. Structural Funds with the aim of securing a more The analysis that follows is based on desktop re- effective use of public funding and stimulating search and interviews with stakeholders on Åland. private investments. Thus, it was in Åland’s inter- est to develop a strategy for smart specialisation

15 The law of Jante is a social code that disparages individual both from a financial and a development perspec- achievements and commends collective feats. tive, as the interviewees highlighted. nordregio report 2019:3 77 The maritime industry plays an important role in furthering the implementation of S3 in Åland. Source: pixabay.com

Business strategies and EDP struments to co-fund and support promising new Åland’s Innovation Strategy is a horizontal ap- smart ventures and has an interesting portfolio of proach to smart specialisation, focusing on tech- projects co-funded with the ERDF (ÅUAB, 2018). nological and market-driven innovations and the Thus, market-driven innovation is a strategy for existing know-how of businesses. Additionally, operationalising entrepreneurial development Åland’s Structural Funds Programme 2014–2020: processes within existing businesses, based on the Entrepreneurship and Competence aligns with the existing capabilities on the island. In this way, it is Innovation Strategy and aims to support invest- a reactive rather than a proactive strategy for in- ments in innovation and research, and to buttress novation. SMEs’ ability to start new projects related to the Some practical examples that illustrate enterprises’ core competences (Ålands Landskap- Åland’s implementation of smart specialisation sregering, 2018b). are Åland Business Lab and Åland Sailing Robots. Åland has limited human and financial resourc- According to two interviewees, Åland Business es to build a strong technical research environment Lab assists entrepreneurs by giving them expert to further advance the core competences. There- advice, help from a project leader, the opportu- fore, the best strategy for developing the business nity to take part in a course in sales and physical sector is considered to be based on ‘market pull’ office spaces (Högskolan på Åland, 2016b). Åland ideas. This approach encourages businesses to Sailing Robots is a project with the goal of build- identify their strengths and competences in rela- ing the first sailing robot to autonomously cross tion to market needs and to develop services and the Atlantic Ocean (Högskolan på Åland, 2016a). products to meet this demand. The existence of Both Åland Business Lab and Åland Sailing Robots venture capital funds is also positive for the viabil- have received financial support through the Entre- ity of future business developments. For example, preneurship and Competence programme. Another Åland Utvecklings AB possesses good financial in- example relates to wind power, which is rapidly de- nordregio report 2019:3 78 veloping on Åland. The FLEXe Demo project aims waves, sun and biogas) and its locality and situ- to make Åland a testbed for smart electricity ation, coupled with the ‘market pull’ approach to grids with 100% renewable electricity generation business development and entrepreneurship, may (Ålands Landskapsregering, 2018a). Åland works help create a favourable environment for discov- well as a testbed for various reasons, including its ering new opportunities through ‘related variety’. size—being small means there is greater flexibility, Simultaneously, this focus on green growth and enormous investments are not required and cus- the bioeconomy may help develop closer ties be- tomers in the whole value chain can be involved. tween smart specialisation and sustainable devel- Åland is situated between two areas with dif- opment. ferent currencies (the Swedish krona and Finnish The education policy programme Competence euro), which allows for cross-border trading. More- 2025 is another important component of the com- over, the share of renewable electricity production prehensive take on smart specialisation on Åland, in Åland is already high. The project is operated by and is included in its Innovation Strategy (Ålands the Finnish company CLIC Innovation, with energy Landskapsregering, 2015). Through the education companies on Åland and the Government of Åland programme Competence 2025, the Government of participating in the project. As electricity grids Åland wants to encourage entrepreneurship and will become more dependent on the weather with digitalisation among its students, as well as to fur- wind power, smart electricity grids will use elec- ther incorporate aspects on sustainability, equal- tricity when availability is high, but use less when ity, integration and flexibility. Examples of planned the availability is low (Ålands Landskapsregering, activities in this education programme are centred 2018a). around a closer collaboration with the labour mar- Despite its limited resources to develop strong ket, entrepreneurship courses, teaching program- knowledge hubs in an array of different sectors, ming, improving the availability of adult education Åland’s smart specialisation strategy could be in- and life-long learning, including Swedish as a for- terpreted as aligning with the European Commis- eign language, and identifying different needs in sion’s description of innovation strategies as ‘put- education (Ålands Landskapsregering, 2017). ting entrepreneurial knowledge to work’ (Ålands Landskapsregering, 2015: 8). Åland’s aim when it Key findings comes to smart specialisation is to encourage and stimulate creative and innovative thinking, as the Prospects of S3 implementation on Åland sub-targets are to support businesses’ own knowl- Åland is not a registered member of the EU Smart edge growth and to develop the businesses’ abil- Specialisation Platform. However, Åland did use ity to commercialise their knowledge of their re- the smart specialisation procedures when devel- spective markets in a proactive way. Thus, Åland oping its Innovation Strategy, as the inclusion of S3 is encouraging the employment of EDP-like ap- was part of developing the Structural Funds Pro- proaches. Creating environments for strong entre- gramme in Åland. The EU Commission encourages preneurial attitudes are fundamental for spurring Åland to continue working to improve research, original and dynamic business developments in a technological development and innovation, and region without much public funding or support. to support employment and labour force mobil- ity (Ålands Strukturfondsprogram 2014–2020). Smart specialisation, sustainable The latter should be particularly pertinent in the development and education continuation of the work, as it focuses on the po- The Development and Sustainability Agenda for tential of youth and the successful integration of Åland is an overarching strategy for sustainable immigrants into the labour market. With this in development. According to an interviewee on mind, Åland is urged to consider the synergy ef- Åland, the Government of Åland uses smart spe- fects created when supporting entrepreneurship cialisation as a de facto tool for sustainable de- and self-employment (Ålands Strukturfondspro- velopment, as the objective and approach of the gram 2014–2020). concept are detectable in the strategy despite the Being dependent on importing expertise is a concept not being mentioned. For example, the challenge for Åland and maintaining co-operation focus on developing the energy sector by drawing with its partners is important for the prosperity on the strength of natural resources (e.g., wind, of the region. Currently, Åland is performing well nordregio report 2019:3 79 in this regard, as demonstrated by successful new projects, such as the aforementioned FLEXe ‘For us, S3 is first: business development, second: Demo project. In the future, continued success will Åland’s University of Applied Sciences, and third: depend on the ability of the region to attract busi- commercialisation.’ (Interview Å2) nesses and investment. Creating a strategy for maximising its R&I could help steer businesses to This understanding of smart specialisation illus- the island, drawn by existing knowledge hubs and trates its implementation process on Åland: it is the tacit know-how in the region. As such, employ- an integrated and comprehensive approach, with ing a smart specialisation strategy to target fund- a focus on education, regional expertise and pro- ing in R&I in prioritised areas of existing strengths viding businesses with the means to develop their may help strengthen Åland’s position as a desir- activities. As such, smart specialisation on Åland is able partner for collaboration in the future. indeed a practical process where implementation One sector to target is the agriculture and is more important than promoting the term smart food production sector. Åland has a strong agricul- specialisation (Teräs, 2017). tural and dairy production sector, which is of great The future implementation of smart speciali- importance to local well-being. With a grounding sation on Åland is likely to be shaped by a prac- in the societal fabric and its long traditions, R&I tical take on the implementation of smart spe- in the agricultural sector may serve as a potential cialisation and it is arguable that Åland may be area of smart specialisation in the future. One in- challenged if it is not able to maximise its capa- terviewee also mentioned Åland’s finance sector, bilities in R&I. However, by identifying key regional which has close links to its local IT sector, as an strengths and targeting its resources, the island area that could be targeted under the smart spe- may identify spearheads that allow it to remain an cialisation strategy. attractive collaborative partner and create a com- Concerning the prospects of smart speciali- petitive edge. As Åland is highly dependent on the sation on Åland and its implementation in Entre- import of expertise and co-operation partners, preneurship and Competence, an interviewee com- smart specialisation may play a positive role in mented: Åland in assisting such partnerships in the future.

nordregio report 2019:3 80 5. Cross-case analysis

ownership and clear objectives in this space, it is Based on the analysis conducted spanning six clear that without a strong political mandate and Nordic regions and their position in relation to a clear policy commitment from the national and smart specialisation, there is room for cross-case regional level, S3 will be more a symbolic gesture analysis. Smart specialisation appears to be an than an applied pragmatic and strategical policy important key to unlocking regional potential in tool for regional growth. The success or inability the Nordic Region. to apply the S3 concept in these regions may be Considering the implementation of S3 policies, indicative of its relevance and the predilection of the concept has the longest tradition in Sweden different geographical areas and typologies. and in Finland and thus, the most extensive S3 The Midtjylland region in Denmark and Åland strategies can be found in these countries. Each in Finland are applying smart specialisation prag- have different outlooks regarding the necessity of matically, as a mechanism to receive ERDF fund- adopting such a strategy, and the case study re- ing. However, their existing innovation systems do gions, Stockholm and Kymenlaakso, display two indicate an existing de facto smart specialisation, very divergent results. On the one hand, Kymen- as the structures resemble the characteristics of laakso, as one of the early adopters of smart spe- the EU tool, with targeted sectors and the tight- cialisation, has a highly systematic and strategic ening of connections between knowledge centres approach to smart specialisation. Situated be- and the regional industries. Smart specialisation tween the border to Russia and the Finnish capi- would help clarify the structural difficulties in en- tal region, Helsinki–Uusimaa, Kymenlaakso is the suring regional growth, as well as the pursuit of a node for logistics in Finland. It is also the home green transition and sustainable bioeconomy. of advanced biorefineries. Kymenlaakso has been The varying results and natures of the appli- able to maximise its strengths and it is a highly cation of smart specialisation is interesting with specialised region with a clear regional vision, regards to its adoption outside of the EU. Norway, which has enabled the region to attract both inter- a non-EU member, has an increasing number of national collaboration partners through various In- regions discovering the value and appropriate- terreg programmes in the Baltic Sea Region, while ness of the concept, despite not receiving funding successfully securing funding from large EU funds, from the ERDF. The Ministry of Local Government such as Horizon2020 for R&D. On the other hand, and Modernisation recently published a guide on and despite being an EU top performer on matters smart specialisation, encouraging regions to de- of innovation, the capital city of Sweden, Stock- velop similar structures. This could be interpreted holm, has been less able to organise and mobilise as a way of recognising and responding to the around the concept of smart specialisation. With a strengthening of regional advantages across the tradition of providing minimal guidance regarding EU, wishing to remain relevant in R&I in the future. the creation of key objectives in innovation and re- In turn, this re-emphasises Bellini’s claim that the search in the region, smart specialisation appears fundamental goals of territorial cohesion through to sit uneasily in the existing innovation structures. EU regional policy have finally become cemented Although there have been efforts to create objec- within the objectives of innovation and competi- tives to focus funding, these remain overarching tion (2015). and non-specific. However, there are examples Nordland was the first region in Norway to where the smart specialisation concept has been adopt the strategy and has applied it in line with successfully implemented at the ground level, in its R&D&I strategies. The strategic and methodo- business clusters. Moreover, there are indications logical work to implement the strategy is being of an increasing interest in the concept among key upheld as a regional ‘recipe’ for the creation of actors in the innovation system, in universities, such strategies. However, the operationalisation businesses and regional agencies. In relation to of the strategy remains a challenge, as the key nordregio report 2019:3 81 funding mechanisms and objectives are defined at optimally, other regions have benefitted from the the national level. The alignment of funding struc- nudge S3 has given them for developing a more tures is key to favourable outcomes at the regional targeted regional innovation policy. This is also level, which is a hurdle to be overcome in Nordland. true for the green transition, or the bioeconomy, The lack of multilevel governance structures is also as the Nordic region’s economic structure rests on part of the problem in realising smart specialisa- natural resources and the development of these. tion in Stockholm. However, the experiences of However, it can be argued that the efficiency and other regions in Sweden, such as Värmland, indi- the range of products and new processes may cate that the successful implementation can occur benefit from a regional S3 strategy, also in that it without active support from the national level. may contribute to creating a more comprehensive However, this largely depends on how the region ecosystem around key industries. In the long term has been organised internally, and whether or not this may help lift regional attractiveness and con- they respond to the national or the regional po- tribute towards territorial cohesion. Analysing the litical level, which has been one of the weaknesses cases also begs the question of the existence of a in Stockholm. Stockholm could therefore benefit regional ‘optimal size’, to avoid ‘big city’-problems from better communication across all levels of or the struggle to gain the critical mass neces- government. A clear political mandate is thus nec- sary. Although there might be an ‘optimal size’ – essary. To some extent, this also applies to Iceland. medium-sized regions with access to knowledge Although Iceland is not a member of the EU and institutions, industries and sufficient critical mass does not explicitly apply the smart specialisation – hybrid versions have been detected (Teräs et al, concept in its quest for increased innovative com- 2018; see also Box 5, Chapter 2). Considering these petitiveness, there are moves to devolve powers to hybrid versions operating S3 on the basis of col- the regional associations. Although the national laboration for attaining key resources was beyond level maintains control over the R&D funding, the the scope of this study, but it is nevertheless an geographical distribution of universities and uni- interesting aspect in the ‘optimal size’-debate. versity colleges provides a promising vision for As such, the existence of a Nordic Model thus the future. From a policy perspective, the relation not appear, but the quick adoption of the strategy between regional smart specialisation strategies tool in some regions may point to a highly compat- and national policy thus remain an interesting ible innovation environment. Throughout the case challenge. studies, an S3-equivalent structure for innovation has been detected, and it is thus worth discus- Concluding remarks sion whether the innovation systems in the Nordic From this cross-case analysis, it is evident that countries are a form of de facto smart specialisa- there is no uniform Nordic approach to smart spe- tion. Therefore, the division of success is thus not cialisation, but there are shared common features wholly dependent on the status of a Nordic coun- detectable across the regions. The regions act on try or region as an EU-member state, but rather their existing preconditions, and whilst some re- on its willingness to tweak its structures to ac- gions may have been heavily involved in innovative commodate for new innovation systems. activities and have found a method that works

nordregio report 2019:3 82 6. Key findings and policy recommendations

In this report, we have attempted to shed light on as well as for identifying whether there is a spe- the role and potential of smart specialisation for cific Nordic model of smart specialisation, consid- enhancing innovation and resilience in the Nordic ering both the presence of natural resources and countries. The report was centred around four the governance frameworks in place supporting research questions: 1) How do the national and innovation. regional levels support S3 processes, and what In the context of this report and its findings, tools are in place for this purpose? 2) What are it is important to note that smart specialisation is the enabling and impeding factors influencing the first and foremost an EU ex ante conditionality in adoption of S3 elements at the regional level? 3) line with the objectives of creating territorial cohe- To what extent does the S3 approach aid the un- sion. Thus, neither Norway nor Iceland are under derstanding of the relevant processes in regional any obligation to employ smart specialisation as innovation systems and the stimulation of neces- a regional strategy tool for enhanced innovation. sary synergetic co-operation within it? and 4) As a Therefore, this report considers the potential of place-based approach how does S3 contribute to smart specialisation in the context of the already driving the green growth agenda? existing innovation systems, looking at the ways in The regions considered for this case study which it has been employed, but also what needs were the Kymenlaakso region, in Finland; Stock- to be in place for it to manifest on the ground. holm, Sweden; Midtjylland, Denmark; Nordland, Consequently, the structure and focus of the case Norway; the Åland Islands as part of Finland; and studies are centred around the structural neces- Iceland. Due to the lack of a regional governance sities and the requirements for the operationali- level on Iceland, the report took a holistic approach sation of the strategy. Smart specialisation in this to studying the potential of smart specialisation report is understood as a regional development there. tool for increasing R&D through a restructuring of The purpose of this report and its aims are funding and developmental power at the regional in line with the objectives of the Nordic The- level. matic Group on Innovative and Resilient Regions The following section outlines and summarises 2017–2020. Commissioned by the Nordic Council the key findings from the case studies. The section of Ministers, the overall ambition is to create an is structured according to the research questions understanding of how the different Nordic regions stipulated above. adapt to the S3 policy concept, and furthermore, to analyse the added value of its implementation Main findings: Empirical research in the Nordic context. This report has provided a thorough knowl- RQ 1: How do the national and regional levels edge and policy overview of smart specialisation in support S3 processes, and what tools are in the Nordic Region. In attempting to obtain a sys- place for this purpose? tematic overview of how the Nordic regions have Smart specialisation/S3 takes on different roles adopted and adapted the concept of smart spe- across the Nordic Region and, although it seems cialisation in their respective regional innovation that its prominent position as an ex ante condi- strategies, it is evident that there is a significant tionality in the ERDF would indicate a stronger knowledge gap in understanding how the respec- position in EU member states, this is not the case tive countries position themselves compared with in the Nordic countries. The advancement of S3 as their Nordic counterparts. This is particularly rel- an innovation tool has indeed been implemented evant for future collaborative cross-border work, in both EU member states and non-EU member nordregio report 2019:3 83 states alike. Furthermore, its relative success de- 2020, smart specialisation is considered an essen- pends not on the EU or the ERDF, but on the com- tial tool for promoting regional development and mitment of regional and national actors in under- innovation, and the ministry has taken steps to in- standing the relative added value that the tool form the regions of the EU’s ex ante requirement might bring. This is perhaps most apparent in the (Ministry of Employment and the Economy, 2010). S3 commitments displayed in Norway, where the However, the development of such strategies re- Ministry of Local Government and Modernisation mains within the regions’ responsibilities. has taken on a co-ordinating role. The commitment Smart specialisation is largely considered a towards S3 is also evident in Sweden and Finland, way to access the EU’s Structural Funds in Den- while Denmark has demonstrated a lack of inter- mark, and the country has been labelled an ‘S3 est in the concept beyond its strategical value as sceptic’ in the past. Although the concept is pri- a source of funding. Iceland is not an EU member, marily co-ordinated from the national level, three and smart specialisation does not figure on either Danish regions, Nordjylland, Midtjylland and the the national- or regional-level agendas. Region of Southern Denmark have joined the S3 Platform (S3 Platform 2018). The Danish policy National level framework for innovation encompasses a range In Sweden, the Swedish Agency for Economic and of related strategies, which includes a focus on re- Regional Growth (Tillväxtverket) is co-ordinating gional growth and development. However, the fo- S3 efforts and is a central actor strengthening re- cus on the regional level may change in the coming gions in their work with smart specialisation. The years, as a centralisation of regional domains and agency’s most important task is to ensure that responsibilities has recently been devised. EU funds are invested in projects that promote In Norway, the Ministry of Local Government regional growth and employment. The Swedish and Modernisation has taken on the role of co- Government’s agency administering funding for ordinator for smart specialisation. It published a R&D&I, Vinnova, is not visible in the work on smart guideline (Veileder) on regional applications for S3 specialisation. This organisation presents a chal- in September 2018. Previous efforts to empower lenge, as the Agency for Economic and Regional regions with competences and responsibilities for Growth tasked with the co-ordination of smart R&D encouraged the development of relatively specialisation is mainly concerned with financial in- autonomous and targeted policy mix designs, as struments tied to rapid growth in SMEs and com- demonstrated by both the Research Council of panies, rather than innovation. Innovation requires Norway’s (Forskningsrådet) Programme for Re- long-term investment, something which Vinnova gional R&D and Innovation (VRI) for 2007–2016, provides. Certain Vinnova Vinnväxt programmes and its successor FORREGION. The latter pro- encourage smart specialisation to receive funding, gramme draws inspiration from smart specialisa- but this programme is provided at the national tion, as stated in its programme description. level and does not involve the regional place-based Due to the lack of a regional authority in Ice- aspect of smart specialisation. Thus, in the coming land, any strategies pertaining to smart specialisa- programme period, the organisation of smart spe- tion would be implemented at the national level. As cialisation would benefit from a clearer structure. a non-EU member, Iceland is not required to adopt The national level in Finland is supporting a smart specialisation approach in its regional de- measures for smart specialisation but has not velopment, and it has not formally adopted the adopted an S3 strategy. However, the govern- concept. However, collaborative and consultative ment programme for 2015 covers similar elements processes, including civil society, branch organisa- to S3 and reinforces the partnership between the tions, trade unions, local authorities and regional universities and the private sector. In 2016, it also associations, have taken place, and resulted in the introduced a new funding programme for Regional policy statement on innovation. Innovation and Experimentations, the AIKO fund, Åland’s approach to smart specialisation is in- running until 2019. Nevertheless, these efforts corporated in two of the region’s Structural Funds remain largely decoupled from the regional inno- Programme: Entrepreneurship and Competences vation strategies (Virkkala, 2015). However, the 2014–2020 and the education policy Competence concept does have significant support from the 2025. national government. In the Regional Strategy nordregio report 2019:3 84 Regional level to structuring the innovation system to gather rel- When examining the operationalisation of smart evant actors and promote entrepreneurship and specialisation on the ground, the regional councils competitiveness. play a significant role, although commitment to In Finland and Sweden, the ERDF remains the and actual implementation of smart specialisa- main funding body for regional innovation and de- tion varies across the EU. On the surface level, velopment. In Finland, AIKO has been an important smart specialisation is a method for concretising separate funding body, but the regions will take regional visions and goals, with a view to strength- the main responsibility for the development of S3 ening regional SMEs and research institutes, and policies and the support mechanisms that might assisting in the creation of spearheads that at- be inspired among regional actors and stakehold- tract funding on the national and international ers. However, the AIKO fund is part of the Finnish stages. This may occur through the use of regions’ government’s regional policy initiatives for 2016- R&D funds to mobilise industries and to support 2019 and is not guaranteed to be continued. industries and regional research institute in the In Norway, the regions are encouraged to de- application processes for tender calls from larger velop regional innovation strategies in line with funding bodies. Taking a closer look at the opera- smart specialisation, and the concept has inspired tionalisation of the concept, however, it seems the Research Council of Norway’s most recent clear that one of the challenges is the persistent FORREGION programme. However, a closer align- prevalence of established institutes and companies ment of the funding objectives and availability for receiving funding. ensuring true regional variety is could be strength- The levels of maturity are also indicative of ened. It is important to recognise the role of fund- the performance level, although being an early ing measures for ensuring regional competitive- adopter does not equate to having smooth S3 ma- ness but, nevertheless, there needs to be a clear chinery. However, the methodology and strategies distinction between national funding priorities for connected to the implementation are important sustaining performance levels in R&D&I in terms of for the uptake of S3 in the region, which was the international competition and rankings, and excel- case, for example, in Nordland. lence in nation-wide regional R&I centres targeting The Swedish and Finnish case study regions, as regional development goals. part of the EU, are the early adopters of the smart As a regional development tool, the level on specialisation strategy, but Nordland in Norway which S3 is operationalised partly depends on the also displays high levels of maturity in the appli- national interest in the concept, but also on how it cation of the concept. In terms of S3 operation- has been organised and communicated. Thus, clear alisation, Danish regions are lagging behind with communication and a sound governance structure their S3 approach, despite having regions present to ensure accessibility of additional funding out- on the EU S3 Platform. Regardless of their level of side the ERDF are interesting aspects that argu- maturity, S3 policies may help create a more at- ably should be considered. tractive region, drawing investment and funding from home and abroad. RQ 2: What are the enabling and impeding Overall, the region may function as the channel factors influencing the adoption of S3 elements between the companies at the regional level and at the regional level? the larger EU machinery. This is particularly evident in Finland and Kymenlaakso, where the strategy is Enabling factors employed as a way to attract funding and policy The enabling factors associated with the success- assistance from the EU. ful implementation of smart specialisation in the Nordic Region can be summarised as follows: 1) Tools supporting RIS3 clear regional ownership and leadership, with the The ex ante conditionality is a powerful tool for in- right set of capabilities for realising change; 2) in- centivising the adoption of smart specialisation. In clusiveness and actor engagement for a compre- fact, in Denmark, the concept seems to be adopt- hensive strategy development; and 3) social capi- ed only because of the ex ante conditionality. Re- tal, and 4) peer regions allowing for transregional garding Åland, smart specialisation is largely im- and transnational knowledge sharing (e.g., as ena- plemented strategically for receiving funding, but bled by the S3 Platform in Seville). is nevertheless part of a comprehensive approach nordregio report 2019:3 85 At the regional level, what is needed to sup- tween Värmland, Hedmark and Oppland16 as part port S3 processes is clear ownership of the pro- of Interreg Sweden-Norway (Interreg Sweden- cess and a leader to spearhead implementation Norway, n.d). and operationalisation. Performing the role of regional pioneers in Norway, the county adminis- Impeding factors trative board in Nordland has demonstrated the The impeding factors found by analysing the em- benefits of taking on responsibilities, breaking new pirical research are presented to help point out the ground for a restructuring of regional innovation drawbacks and gaps and assess how situations strategies. Building on a meticulous and thorough may be improved. regional analysis, involving a range of key actors Struggling to engage actors is a problem seen in the region and beyond, Nordland has been able in some of the regions considered for this case to stake out its strengths and prioritisations. Re- study, particularly in Stockholm. Many of the chal- vealing the de facto S3 aspects of the regional in- lenges in Stockholm appear to relate to the issue novation system may also assist in this process. of there being an ‘optimal size’ for a region im- Understanding the necessity of creating a strong plementing smart specialisation, in terms of the regional objective to attract investments and of number of actors available and the strength of ensuring future competitive advantage by appro- large portfolios of various thematic areas. This priately positioning the regional economy, as has highlights the need to recognise that there are been seen in Kymenlaakso and Nordland. no ‘ideal models’ (Tötdling and Trippl, 2005: 1215), Moreover, well-functioning multilevel govern- that different types of regions need different ance structures are key to furthering smart spe- types of policies to adequately address the needs cialisation at the regional level. Based on the case of the region. S3 may be comprehensive enough to studies, it is evident that a strengthened connec- account for these changes but understanding that tion between the different levels—businesses, re- different regions might need different processes gional actors and national authorities—may play to achieve the similar results needs to be consid- to a region’s advantage in constructing a strong ered in this equation. What works in Arctic regions, regional economy. For example, this may be dis- such Lapland, or industrial or forestry regions such cerned as a key difference between the Kymen- as Värmland might not work in Stockholm. These laakso region in Finland, where the Ministry of Em- findings highlight that there might be an urban– ployment and the Economy has long recognised rural or typological divide, which should encour- the added value of S3, and Nordland, where the age further studies to investigate whether there national authorities have recently discovered the is an ‘optimal’ size for smart specialisation. Based potency of S3 for regional development. on the findings in this report, the mid-level regions Regarding inclusiveness, attempts to invite seem to be the well-positioned for implementing and engage actors have been successful and in Ky- smart specialisation strategies, whereas capital menlaakso, where the development corporations regions and the island regions seem to struggle, ei- representing regional actors and their interests sit ther with the presence of too many relevant actors comfortably at the intersection between the com- or lacking in critical mass, as in the case of Åland. panies and the regional management authorities. Moreover, the ‘monopoly of funding’ and in- The region may also play a key role as a source ternal objectives of the large actors and universi- for transnational collaboration, as was the case ties present in Stockholm may be an issue limiting regarding the knowledge sharing and best prac- the adoption of smart specialisation, although a tice learning opportunities between Nordland and strong regional authority may be capable of en- Ostrobothnia when Nordland first began develop- gaging these actors. Engaging small and medium- ing its strategy. When employed in the right way, sized actors has also been a challenge in S3 ori- smart specialisation may further transnational ented efforts, although this most likely pertains collaborations, as seen in the various Baltic Sea to the role of the regional authorities in the local Region collaborations in which Kymenlaakso is en- innovation system and that the funding mecha- gaged. This is also evident in Sweden, where cross- border collaborations on forestry specialisations occur across the Swedish–Norwegian border be- 16 To read more, visit The Bioeconomy Region (Interreg Sweden-Norway): http://www.interreg-sverige-norge. com/?portfolio=the-bioeconomy-region-2 Accessed Jan 2019. nordregio report 2019:3 86 nisms available tend to come from national agen- cialisation strategies is decisive for the prosperity cies. Moreover, in traditionally strong innovation of a region, as the Stockholm region remains one environments, such as Midtjylland, although the of the most innovative regions in Europe, despite university has adopted the role of a catalyst for not having a formal S3 strategy. cluster collaborations, the effects are likely weak- er than if the region had acted as a co-ordinator. RQ 3: To what extent does the S3 approach This is also true for Stockholm, where the larger aid the understanding of the relevant universities are working in line with their internal processes in regional innovation systems research plans and agendas. and the stimulation of necessary synergetic Additionally, the existence flexible financial in- co-operation within it? struments on the national level that can help en- Smart specialisation contributes to furthering the sure that the regions effort in creating industrial understanding of regional potential when consid- and economic variety in line with their S3 strate- ered in the context of the case study regions in this gies, seems to be key, albeit absent to some ex- report. It elevates the enabling and impeding fea- tent. Steering and incentivising processes is a chal- tures of the existing innovation system in terms of lenge when the financial means and instruments its ability to accommodate smart specialisation are outside the region’s domain. This is the case as a tool for restructuring processes. The evidence for Nordland; despite its wish to specialise in tour- presented in this report suggests that regions ism (See Box 9), the financial instruments from should take on the important role of ensuring re- national agencies favour technology development gional development through smart specialisation and basic research over social innovation. What is by encouraging and structuring the possibilities missing is a multilevel governance structure that for diversifying the economic structure at the dynamically evolves with the needs at the regional ground level. The scope of this role is particularly level to enable interregional variety. evident in the way that the region can play a role The lack of political ownership related to in facilitating EDP and collaborations to establish adoption of smart specialisation is particularly and identify new domains, and in its capacity to go evident in the Stockholm case. Despite the efforts beyond the traditional innovative bodies, such as, of key regional actors on the ground, the level at for example, the universities. which S3 has been devised hampers further de- Understanding the relevant processes in the velopment of the concept. In turn, this impacts on regional innovation systems for unlocking the po- the ability to mobilise key actors around concepts tential of S3 has figured as a key component in such as EDP and domains. Although Stockholm is Nordland, where the lecture series, the ‘S3 School’, lagging behind in the adoption of the smart spe- helped shed light on the roles of the different key cialisation concept, other Swedish regions, such as stakeholders through a thorough introduction of Värmland and Skåne, are aptly positioned for the the key concepts, EDP and domains. Understanding future. These regions have had a clear mandate the need for creating a connecting ‘node’ is another from their regional authorities, due to the liberties key feature worth mentioning, for example in the the administration has in the county council as op- Smart Specialisation Academy in Karlstad, Värm- posed to the county administration boards, which land (see Box 2). These systematic approaches to are bound by national politics. Coming back to the exploring smart specialisation have been instru- structure and the division of tasks in the Stock- mental in the development of strong S3 strategies, holm innovation system, it is arguable that al- evident in both of the aforementioned regions. though the personal commitment of civil servants As a place-based approach, smart specialisa- and key stakeholders is invaluable, the success of a tion adds to the legitimacy of the region as an ac- strategy depends on the political mandate these tor for change. Regional administrations and simi- are given for completing the task. If the national lar actors bring businesses and industries closer level is uncommitted to the process and the task to the decision-making and policy-making bodies. for regional development and growth is located in This may create a more dynamic economic struc- the state’s representative in the region, there will ture, responding to the needs of the businesses not be sufficient funds or hours to implement a and industries at the regional level. Thus, one of new innovation strategy. However, it is too early the key added values of smart specialisation is re- to say to what extent the existence of smart spe- lated to the role of the region as a risk buffer and nordregio report 2019:3 87 reliable partner in fostering new opportunities by pects of EDP aspects may be detected in Åland’s providing platforms and connections. The case approach. By focusing on creating a sustainable, studies also revealed the limited and/or extensive smart and inclusive community through the de- power the regional agency may have, and that this velopment of competences and skills for entrepre- depends on the way in which tasks are divided and neurship, it provides a good example of how inno- the relative autonomy the region has to employ vation takes on a comprehensive role. EDP should new policies, in terms of both human and financial be described as a collective, overarching concept, resources. This was also discussed in the section rather than a process undertaken by a sole entre- above (RQ 2). preneur. In this way, smart specialisation and EDP However, it is also important to understand may be a way to continue building value chains the nature of the agency applying the S3 concept, beyond what is traditionally within the scope and to understand the way it has been framed. As was power of a few businesses alone. This may also be mentioned in the Stockholm case study, the added the way in which the S3 concept differentiates it- value of S3 is found by recognising the role of the self from the ‘old’ cluster policies. EDP as a place- agency or organisation applying the concept; it based, bottom-up approach grounds the strategy, ‘offers a different lens’ depending on the relative and creates linkages between institutional layers. position of the organisation applying it. To echo These grounding processes are also evident Foray, smart specialisation as a concept is a tool in Stockholm, for example, despite the fact that that is ‘not restricted to a particular level of gov- they remain within the sphere of businesses and ernance or organisation’ (2009: 91). clusters. The Urban ICT Arena in the Kista area of Stockholm is a good example of an implementer of New domains and opportunities S3, and it has subsequently been used as an example At the regional level, smart specialisation is not a of best practice by the county administrative board. replacement strategy, but a complementary tool The case studies revealed important aspects for unlocking the potential of the existing innova- of applying the key concepts of smart specialisa- tion structures and strategies. Although it may tion. To some extent, they show that S3 reaches appear to be a new strategy, it is in fact a tool beyond the traditional R&D focus on high-tech and enabling the operationalisation of a more com- process innovation, and that there is a tendency prehensive innovation system (Ketels et al., 2013). towards creating new ecosystems by reaching Furthermore, smart specialisation is a driver for across. Smart specialisation has also demonstrat- discovering new synergies between actors, be- ed that it may bring about aspects of social inno- yond their traditional sectors. This enables the in- vation, such as in the tourism industry. Tourism as novation system to continue developing its main a possible area of specialisation was detected in innovative ‘engines’, while creating a favourable Nordland, where the traditional understanding of environment for exploring opportunities in ‘relat- tourism is shifting towards an understanding of it ed variety’: from ‘inward’-looking structures and as ‘experience based’ and comprehensive, rang- ‘outward’-looking clusters in, for example, circular ing from infrastructure and facilitation to content economy initiatives. In the Nordic context, smart and adventure. Thus, smart specialisation brings specialisation is often understood as a new frame added value in terms of the types and varieties of for renewing the cluster idea. Even though the two innovation it enables. concepts differ in their scope and focus, the po- It is too early to say the extent to which S3 tential for using clusters as ‘core toolkit’ is there has had a significant impact in the Nordic Region, (Ketels et al., 2013: 5). It complements the cluster but there are data that indicate attempts to re- structure present across all Nordic countries and structure innovation systems and raise the role of makes it increasingly comprehensive. It also has the regions in ensuring their economic security, for the potential to connect and link a wider segment example, in Finland, Norway, Sweden and Åland. of the regional economy. This is particularly evi- Although there are few signs thus far, the imple- dent when examining the industrial transition ex- mentation of the smart specialisation strategy in periences in Kymenlaakso, or the role of the IT and certain regions may serve as a benchmark in the financial sector in Åland. future. Furthermore, smart specialisation will al- The role of smart specialisation in furthering low for Europe-wide benchmarking opportunities the potentially comprehensive and inclusive as- and transregional knowledge exchanges. nordregio report 2019:3 88 RQ 4: As a place-based approach how does example, in Norway, the role of green or sustaina- S3 contribute to driving the green growth bility aspects is firmly ingrained in calls for tenders agenda? in securing project funding for R&I. Low- to zero- One of the objectives of this report was to consider emission solutions are favoured in public tenders, to what extent smart specialisation is a driver for even, for example, in determining the types of fer- the green transition in the Nordic Region. From the ries allowed on public water ways (Miljøstiftelsen case studies, it is evident that green perspectives ZERO, 2017). Such steps may play an important often are included in the overall objective in indus- role in cementing the green transition and smart trial transitions, and smart specialisation does as- specialisation as mutually reinforcing concepts. sist in focusing on green products and systems. However, it requires a careful consideration of With an industrial structure heavily based on the availability of alternative funding for research natural resources, smart specialisation becomes a within untraditional sectors, such as tourism. tool for bolstering the R&D aspects of these indus- The discourse surrounding green growth and trial endeavours. This is particularly evident in the the bioeconomy is a vehicle for smart specialisation case of Kymenlaakso, Finland, where the special- to take form and become part of the dominant con- ised areas are drawing on the existing strengths versation on the green transition. In this way, smart of a strong bioeconomy, coupled with the logistics specialisation may contribute to an increase in the and circular economy and attracting funding, for knowledge capacity, and the diversification of the example, from Horizon 2020, to consolidate R&I ‘greenification’ of industries and businesses. efforts in the region. Both the EU and national funding agencies The vast natural resources in the Nordic Re- allocate significant funding and financial instru- gion, including the blue and green bioeconomies, ments towards the realisation of the green growth renewable energy sources, such as wind, tidal and agenda. In turn, this may help assist in boosting hydropower, and the mining and maritime indus- innovation. Hence, green growth and technology tries, hold great potential for driving green growth development become not only a ‘good to have’, through strategically applied smart specialisa- but a ‘smart to have’. Several Nordic regions are tion objectives. This includes the development of showing signs that would suggest the exploitation high-tech processes and products, but it also ne- of this trend. Unlocking S3 at the grassroots in the cessitates capitalising on old and new techniques. context of green growth may also occur through The mixture of old and new techniques coupled targeted financial instruments for green technol- with natural resources helps further the objective ogies, bypassing the region altogether. However, of territorial and regional cohesiveness, bringing this does challenge aspects of natural resource life to green, alternative innovation. Their existing protection and conservation. Striking the balance know-how and defined structures for R&I may help between these competing discourses may be part justify targeted regional policies, while encourag- of the discussion on smart specialisation and the ing businesses and industries, or clusters, to en- green transition in the future. Thus, Nordic smart gage in a widening of their product portfolio, so as specialisation and the green transition may go to avoid systemic ‘lock-in’ in the future (Ketels et hand in hand as a trait of a region moving into a al. 2013). Rather than merely ‘following the yellow new industrial era. brick road’, S3 through EDP may aid historically path-dependent systems to break into a plethora of alternative trajectories, bolstering the future Additional findings of national economic engines. Thus, when applied De facto S3 to the green growth agenda, smart specialisation The existence of a de facto smart specialisation may also have an inclusive function, bringing pros- approach in the Nordic Region at large is evident perity not only to the ‘elite’ regions but also to rural from the case studies. Moreover, it was suggested and peripheral areas. in the case study on Iceland that the nature of The green transition and smart specialisa- smart specialisation is very closely aligned to what tion may be particularly compatible, as the Nordic is already taking place in the Nordic countries, countries have been able to prioritise ‘green think- although more refined. Smart specialisation is ing’: this could be understood as being part of a adopted to varying degrees in the Nordic regions new and refined version of the Nordic model. For studied for this report, and it is possible to trace nordregio report 2019:3 89 the existence of a de facto smart specialisation. targeted lens through which one may understand De facto specialisation is the instance where re- and construct policies for R&I. Hence, smart spe- gions are working in line with the concept despite cialisation seems highly compatible with the ex- not having formally adopted its methods and pro- isting structures in place in the Nordic case study cesses (Teräs et al, 2018). This was detected both regions, although regional variety is observed. in Midtjylland and in Stockholm, in that the ways The shared geographies and typologies in the in which the Nordic innovation systems and mar- Nordic Region, and the corresponding structures kets are organised are often in line with the foun- building on these natural resource endowments dations and ideas of smart specialisation. are all part of the ‘shared experiences’ in Nordic In terms of Midtjylland, several similarities economic history (Kristensen and Lilja, 2011). More- have been detected. First, the process leading to over, opportunities for transnational learning play the regional growth and development strategy in- an important part in the realisation of smart spe- cluded an active dialogue, during which all stake- cialisation. The development of similar structures holders were heard, which closely resembles EDP. and innovation systems across the Nordic Region Second, finding new regional competitive advan- shows the effect of learning from best practice ex- tages and the application of traditional strengths amples, as demonstrated by Nordland’s adoption have been part of, for example, Århus University’s of the S3 concept despite not having an ex ante strategy when searching for new applications and requirement. Additionally, there was a shared un- solutions and potential future development areas. derstanding amongst the case study interviewees Third, the region’s approach to cross-sectoral col- that the Nordic countries are applying S3 from the laboration resembles the S3 process for identifying same starting point – and the commonalities be- domains. Although the processes do differ, the un- tween the countries seem to create a sense of a derlying idea remains the same: that clusters may Nordic Model. not possess all the knowledge and the synergies Such shared characteristics seem to be evi- that they may be required for future developments. dent in the structure of capital in the Nordic Re- Åland is another good example of a region gion, which is often long-term, patient and rela- where de facto smart specialisation has taken tively predictable, based on the empirical evidence place due to its geographical location and natural in this report. Similarly, the small home markets resources. It has adopted practices that prompt force the Nordic countries to look beyond their associations to smart specialisation. This was also borders to expand and develop. Although this is detected in Iceland, as the main industries encour- something that is already happening spontane- age the development of ‘related’ ecosystems in aq- ously to some degree (Kristensen and Lilja, 2011), uaculture. Regarding the Nordic territories of the smart specialisation may compel the Nordic re- Faroe Islands and Greenland, a deeper exploration gions to consider alterative market opportunities of their innovation strategies in relation to the and new segments. nature of their strengths and available resources Furthermore, many of the underlying struc- would be worthwhile to determine whether these tures required for the adoption of smart speciali- show signs of de facto S3 approaches. sation in the Nordic countries were consistent In many respects, a well-functioning bioec- across the case studies. Such structures include onomy and circular economy structures need de high levels of trust in the social and political sys- facto S3 policies to move ahead, not only by way tems, flat hierarchies and highly educated popula- of diversifying markets, but also to secure funding tions. Furthermore, social capital and actor-net- and investment in the future. Various guises of de work relationships in the local innovation systems facto smart specialisation may be present in the support the likelihood of developing new prod- ‘systems thinking’ in Nordic countries. ucts, methods and processes. The collaborative tradition between the political and the industrial The Nordic model of S3 levels, and the adaptability of systems were also Across the case studies, the Nordic Region is dis- mentioned in the case studies as idiosyncrasies of playing high levels of de facto smart specialisation, both Nordic innovation and the Nordic economic where the nature of the concept is comparable to systems. These are important components worth the system already in place. Nevertheless, smart capitalising on, enabling economic growth in the specialisation does bring an additional and more existing structures. nordregio report 2019:3 90 These underlying structures are also noted in cesses, as was the case in Stockholm, Kymenlaak- the literature on the nature of Nordic capitalism so and Nordland. (Kristensen and Lilja, 2011). In their book, Nor- Hence, the first signs of a Nordic model of dic Capitalisms and Globalization: New Forms of smart specialisation are already present on the Economic Organization and Welfare Institutions, scene. The Nordic Region seems to hold a promis- Kristensen and Lilja note that some of the rea- ing position in advancing its regional advantage, sons for the success of the Nordic Region are the both in terms of green growth and institutional conformity of market needs and adaptability to change. This leads us to contemplate the question new institutional and industrial design, which en- of whether the presence of de facto smart special- able the Nordic Region to deal with both national isation is an important element the Nordic model and global challenges as they emerge (2011: 6). by default. Smart specialisation, and particularly EDP, have been adopted to promote and develop regional Policy recommendations strengths in line with identified market niches. The following list presents the recommendations This is further cemented in the close relationship derived from the empirical and desktop research between the business and industry sectors and conducted for the purpose of this report. The rec- public agencies, where innovation strategies are ommendations that follow are targeted towards drawn up and based on dynamic dialogue and pro- policy makers in the Nordic Region.

Policy recommendations

1. Multilevel governance n Create guidelines Following the regional interest in the S3 concept at the regional level in Norway, the Ministry of Local Government and Modernisation published a handbook (Veileder) on navigating the Norwe- gian political and planning systems in implementing S3. Signalling national interest in the concept may assist regions to consider their regional business and industrial development in a new light, and steer towards increased regional specialisation. n Balancing national and regional relationships This is particularly important for the operationalisation of S3. There needs to be a strong col- laboration to find the best governance model between the regional and the ERDF structure/ national level to make RIS3 a relevant and viable tool. It is additionally important to refrain from making an overarching policy that overrules the regional place-based component.

2. Enable regional transitioning n Ensure availability and appropriateness of funding mechanisms This depends on the nature and strength of the collaborative relationships in the region, but also on the availability of appropriate financing from the national level. n Create flexibility for unlocking true regional variety Recognising the need for different types of funding instruments on the regional and the nation- al level to allow for a wider set of priorities may be valuable in the long term. n Stability through long-term commitment Regional and national co-creation for ensuring critical mass and well-balanced measures in a long-term perspective is crucial for success.

3. Mobilise actors to empower the regions n Increase inclusiveness and engagement of actors Ensure that actors across the regional network have the opportunity to participate in the plan- ning processes leading to the strategy development. It is also important for the region to demon- strate what service the region might be able to provide to its business and industrial ecosystem. n Build trust for stability and long-term investments Long-term stability requires high levels of trust and ownership and allows actors to co-create regional S3 strategies. Moreover, it creates incentives for investments as the framework is firmly embedded in regional plans. n Favourable environments for EDP and identifying ‘domains’ Facilitate the development of new ideas by providing a platform where stakeholders may come together and create new networks.

nordregio report 2019:3 91 4. Ownership and leadership n Be a leader of S3 processes Communicate the role of the regions in the creation of S3 strategies and ensure a clear vision for the future. Clear leadership is key to mobilising actors in a region. n Delegate and divide responsibilities Determine who does what, when and how. Whose involvement is required to get S3 off the ground? n Invest in key persons to lead and inspire S3 processes (mavericks) Change agents are important for mobilising actors behind S3, taking leadership and ownership of the process or ‘steering the ship’. n Think like an entrepreneur Identify the enabling and impeding features of entrepreneurship to understand the needs of new developments and discoveries.

5. Avoid redressing ‘old’ approaches n Discover new opportunities and domains Consider going beyond the cluster structure to discover synergy effects with other sectors or work together for industrial transformation by adding new branches to the cluster. n Rebranding old approaches only, without additional measures, is neither smart nor special Recognise the added value of restructuring old innovation strategies to allow for something new. It may enable new entrepreneurial discoveries to emerge.

6. Beyond ex ante conditionalities n Consider the added value of S3 as an approach in its own right Consider S3 beyond the need to obtain ERDF funding. What value can S3 add to the region as a tool to sharpen and further develop the regional innovation system?

7. Optimal size for S3 n Consider the typology and size of the region when implementing S3 Mobilising actors in regions with high levels of innovation capacity and diverse industrial sectors may be difficult. Mid-size regions with fewer actors on the scene but strong industries may be better suited to S3 than metropolitan regions, particularly in those areas where expertise and R&D facilities may be shared.

8. De facto S3 n Reveal the de facto S3 aspects in the region Revealing existing S3 similarities helps in fast-forwarding the S3 process, facilitating and strengthening the implementation of S3 in a place-based setting. The Nordic regions are front- runners in discovering de facto S3. n Do not ‘reinvent the wheel’: build on existing knowledge where relevant Conducting a thorough analysis of the existing regional strengths and building on this may help kick-start the process of finding new domains and areas of prioritisation.

9. Nordic model of S3 n Appreciating the value of transnational collaboration Optimise responses to the new wave of S3 across Europe and seeing opportunities for cross-border collaboration between small regions. Sharing best practice examples across the Nordic Region has aided a deeper understanding of S3 and how it may be executed. This shows to the high level of trust between actors. n Good pre-understanding of the mechanisms of smart specialisation De facto smart specialisation revealed in the regions adopting the concept. n Investments in increased knowledge on the ground S3 is a relatively new concept and further research into its nature is necessary to gain sufficient knowledge to create comprehensive approaches. The S3 School in Nordland and the S3 Academy in Värmland are good examples of investments in knowledge for furthering regional S3 onsite.

10. Remember operationalisation n Focus on implementation A strategy without an action plan and implementation is just a strategy without a result. Regions that do not follow up on their strategies are falling behind. Proper implementation of the strategy results in improvements (e.g., the Swedish region of Värmland and Finnish Lapland).

nordregio report 2019:3 92 References

General references Cooke, P. (2016b). The virtues of variety Asheim, B. (2011). The changing role of learning in regional innovation systems and regions in the globalizing knowledge economy: entrepreneurial ecosystems. Journal of Open a theoretical re-examination. Regional Studies, Innovation: Technology, Market, and Complexity, 46(8): 993–1004. 2(1): 13. Asheim, B. and Grillitsch, M. (2015). Smart Dubois, A., Kristensen, I. & Teräs, J. (2017). specialisation: Sources for new path Outsmarting geography: Implementing development in a peripheral manufacturing territorial innovation strategies in sparsely region. Lund University, CIRCLE Center for populated regions. European Planning Studies, Innovation, Research and Competences in the 25:8, 1316–1333. Learning Economy: Lund. European Commission (2010a) Europe 2020: Asheim, B.T., Grillitsch, M., Trippl, M. (2017) Commission proposes new economic strategy ‘Smart Specialization as an Innovation- in Europe. Available at: http://europa.eu/rapid/ Driven Strategy for Economic Diversification: press-release_IP-10-225_en.htm?locale=en Examples From Scandinavian Regions’ Accessed Oct 2017 in Radosevic, S., Curaj, A., Gheorghiu, R., European Commission (2010b). Expert evaluation Andreescu, L., Wade, I. (eds) Advances and the network delivering policy analysis on the Theory and Practice of Smart Specialization, performance of cohesion policy 2007–2013. Chapter 4, pp. 73-97. Task 2: Country Report on Achievements of Asheim, B., Smith, L. H. and Oughton, C. (2011). Cohesion Policy: Sweden. Directorate-General Regional innovation systems: Theory, empirics Regional Policy: Brussels. and policy. Regional Studies, 45(7): 875–891. European Commission (2010c) Europe 2020: A Bellini, N. (2015). Smart specialisation in Europe: strategy for smart, sustainable and inclusive Looking beyond regional borders. Symphonya. growth, Available: http://ec.europa.eu/eu2020/ Emerging Issues in Management, 1: 22–29. pdf/COMPLET%20EN%20BARROSO%20%20 Boschma, R. (2008). Constructing regional %20007%20-%20Europe%202020%20-%20 advantage: Related variety and regional EN%20version.pdf Accessed Oct 2017 innovation policy. Report for the Dutch Feder, C. (2015) Smart specialization: Searching Scientific Council for Government Policy. for new theoretical foundations. Regional University of Utrecht: Utrecht. Studies Association Conference 2016, Graz Boschma, R. (2014). Constructing regional (Austria). advantage and smart specialisation: Foray, D. (2017) ‘Smart specialization strategies Comparison of two European policy concepts. and less-developed regions’, Presentation at Scienze Regionali. 13:1, 51-68 the 12th Regional Innovation Policy Conference, Boschma, R. and Gianelle, C. (2014). Regional Universidade de Santiago de Compostela, Oct branching and smart specialisation policy. S3 26th 2017. Policy Brief Series, No. 06/2014. European Foray, D. (2015). Smart specialisation— Commission, JRC–IPTS, Spain. Opportunities and challenges for regional Capello, R. and Kroll, H. (2016). From theory innovation policy. Routledge: London. to practice in smart specialization strategy: Foray, D. and Goenaga, X. (2013). The goals of Emerging limits and possible future smart specialisation. S3 Policy Brief Series, No. trajectories. European Planning Studies, 24(8): 01/2013. European Commission, JRC–IPTS, 1393–1406. Spain. Cooke, P. (2016a). Four minutes to four years: The Foray, D., David, P. A., and Hall, B. H. (2011). advantage of recombinant over specialized Smart specialisation from academic idea to innovation—RIS3 versus ‘smartspec'. European political instrument, the surprising career of Planning Studies, 24(8): 1494–1510. a concept and the difficulties involved in its nordregio report 2019:3 93 implementation. No. EPFL-WORKING-170252. Nordic regions. Preliminary report: Policy and EPFL. literature review. Discussion paper prepared Foray, D., David, P. A. and Hall, B. (2009). Smart for the Nordic Thematic Group for Innovative specialisation–the concept. Knowledge and Resilient Regions, 20 November 2017, economists policy brief, 9: 85, p.100. Stockholm: Nordregio. Foray, D., and van Ark, B. (2007) Smart Kroll, H. (2015). Efforts to implement smart Specialisation in a truly integrated research specialization in practice—Leading unlike area is key to attracting more R&D to Europe, horses to the water. European Planning Studies, Knowledge for Growth, European Issues and 23:10, pp. 2079–2098. Note: Permission obtained from Policy Challenges, Vol 1, pp. 24–26 H. Kroll on the 25th of January 2019, to use the table on p. 31 Fromhold-Eisebith, M. (2004). Innovative in this publication. milieu and social capital—Complementary or Kymenlaakso Liitto (2016). Kymenlaakso’s smart redundant concepts of collaboration-based specialisation RIS3 strategy 2016–2020. regional development. European Planning Available at: [http://www.kymenlaakso.fi/ Studies, 12: 6, pp. 747–765. attachments/article/3954/Kymenlaakso's%20 Helsinki–Uusimaa Regional Council (2015). smart%20specialisation%20RIS3%20 Smart specialisation in the Helsinki–Uusimaa strategy%202016-2020.pdf] Accessed 1 Feb region: Research and innovation strategy for 2018. regional development 2014–2020. Available Locke, R. M., and Thelen, K. (1995). Apples and at: [https://www.uudenmaanliitto.fi/ oranges revisited: contextualized comparisons files/16166/Smart_Specialisation_in_Helsinki- and the study of comparative labor politics. Uusimaa_Region_-_Research_and_Innovation_ Politics & Society, 23 :3, pp.337-367. Strategy_for_Regional_Development_2014- Lundvall, B.-A. (1992). National systems of 2020_B_51_-_2015.pdf] Accessed 31 Jan 2018 innovation. Towards a theory of innovation and Interreg Sweden-Norway (n.d.) The Bioeconomy interactive learning. London: Pinter. Region. Available: http://www.interreg- Lundvall, B.-Å. (2003). The economics of sverige-norge.com/?portfolio=the- knowledge and learning. Department bioeconomy-region-2 Accessed Jan 2019 of Business Studies. Aalborg University. Kainuun Liitto (2017). Kainee–Ohjelma. Available at: [http://livernspleen.com/wp- Maakuntasuunnitelma 2035. content/uploads/2012/12/the-economics-of- Maakunataohjelma 2018–2021. (Translated: knowledge-and-learning.pdf] Accessed: Nov Kainuu Programme. Provincial Plan 2035. 2017 Provincial Program 2018–2021). Available at: Mariussen, Å. and Finne, H. (2017). [https://www.kainuunliitto.fi/sites/default/ Entrepreneurial discoveries in Norway: What’s files/kainuun_maakuntaohjelma_2018-2021_ new? Innovation research in Norway—Recent hyvaksytty_mv_18122017.pdf] Accessed 31 Jan findings and new perspectives. SINTEF/ 2018 Nordlandsforskning. Available at: [https:// Ketels, C., Nauwelaers, C. Cassingena Harper, www.forskningsradet.no/servlet/Satellite?blob J., Lindqvist G., Lubicka, B., Peck, F. (2013) col=urldata&blobheader=application%2Fpdf&b The role of clusters in smart specialisation lobheadername1=Content-Disposition&blobhe strategies. Director-General (DG) for Research adervalue1=+attachment%3B+filename%3D% and Innovation. Available at https://ec.europa. 22mariussen-finne.pdf%22&blobkey=id&blobta eu/research/evaluations/pdf/archive/other_ ble=MungoBlobs&blobwhere=1274509864935& reports_studies_and_documents/clusters_ ssbinary=true] Accessed 1 Feb 2018 smart_spec2013.pdf Accessed Oct 2017 McCann, P. and R. Ortega-Argilés (2011). Kristensen, P. H. and Lilja, K. (2011). Nordic Smart specialisation, regional growth and capitalisms and globalisation: New forms applications to EU cohesion policy. Documents of economic organization and welfare de treball IEB, 14, pp 1–32. institutions. Oxford University Press: Oxford. McCann, P. and Ortega-Argilés, R. (2013a). Kristensen, I., Teräs, J., Wøien, M. (2018). Modern regional innovation policy. Cambridge The potential for Smart Specialisation Journal of Regions, Economy and Society 6(2): for enhancing innovation and resilience in 187–216. nordregio report 2019:3 94 McCann, P. and Ortega-Argilés, R. (2013b). Ostrobothnia_Smart_and_Outstanding_ Transforming European regional policy: Strategy_for_Smart_Specialisation.pdf] A results-driven agenda and smart Accessed 1 Feb 2018. specialization. Oxford Review of Economic Rodríguez-Pose, A., di Cataldo, M. and Rainoldi, A. Policy, 29(2): 405–431. (2014). The role of government institutions for McCann, P. and Ortega-Argilés, R. (2016). Smart smart specialisation and regional development. specialisation, entrepreneurship and SMEs: S3 Policy Brief Series No. 04/2014. European Issues and challenges for a results-oriented EU Commission, JRC–IPTS, Spain. regional policy. Small Business Economics, 46: Rodrik, D. (2004). Industrial policy for the twenty- 537–552. first century. Paper prepared for UNIDO. Metsä Group (n.d.) The future of the forest Available at: [https://drodrik.scholar.harvard. industry is in intelligent forests, available: edu/files/dani-rodrik/files/industrial-policy- https://www.metsagroup.com/en/ twenty-first-century.pdf] Accessed: Nov 2017 Campaigns/IntelligentMetsa/intelligentforest/ S3 Platform (2018) Registered countries Intelligent-forests-are-alive/Pages/default. and regions in the S3 Platform, European aspx Accessed Jan 2019 Commission. Available: [http://s3platform.jrc. Miljøstiftelsen ZERO (2017). Nyheter om fossilfri ec.europa.eu/s3-platform-registered-regions] og utslippsfri skipsfart. (Translated: News Accessed Jan 2019 about fossil and emission free shipping) Spatial Foresight, SWECO, ÖIR, t33, Nordregio, Available in Norwegian: https://zero.no/ Berman Group, Infyde (2017). Bioeconomy nyheter-utslippsfri-skipsfart/ Accessed Nov development in EU regions. Mapping of 2018. EU member states’/regions’ research and Morgan, K. (2013). The regional state in the era innovation plans & strategies for smart of smart specialisation. Ekonomiaz, 83(02): specialisation (RIS3) on bioeconomy for 103–126. 2014–2020. Available at: [https://ec.europa. Morgan, K. (2015). Smart specialisation: eu/research/bioeconomy/pdf/publications/ Opportunities and challenges for regional bioeconomy_development_in_eu_regions.pdf] innovation policy. Regional Studies, 49(3): Accessed Jan 2018. 480–482. Sörvik, J. and Kleibrink, A. (2015). Mapping Neffke, F. M. H., Henning, M. and Boschma, R. innovation priorities and specialisation (2011). How do regions diversify over time? patterns in Europe. S3 Working Paper No. Industry relatedness and the development 08/2015. European Commission, JRC–IPTS: of new growth paths in regions. Economic Spain. Geography, 87 (3), 237–265. The Danish Ministry of Higher Education Organisation for Economic Cooperation and and Science and The Danish Agency for Development (OECD) (2011). Regions and Science, Technology and Innovation (2016) Innovation Policy, OECD Reviews of Regional CLUSTER STRATEGY 2.0 - Strategy for Innovation. OECD Publishing: Paris. Denmark’s Cluster and Network Policy Paper Province (2019a) Så började resan mot en 2016-2018, Available at: [https://ufm.dk/ hållbar framtid. (Translated: This is how the en/publications/2016/files/danish-cluster- story began) Available in Swedish: [http:// strategy-2-0_eng.pdf] Accessed Oct 2017 paperprovince.com/om-oss/historik/] Teräs, J., Dubois, A., Sörvik, J. and Pertoldi, M. Accessed Jan 2018 (2015). Implementing smart specialisation in Paper Province (2019b) Oljeindustri möter sparsely populated areas. S3 Working Paper skogsindustri. (Translated: The oil industry 10/2015. European Commission, JRC–IPTS: meets the forestry industry) Available in Spain. Swedish: [http://paperprovince.com/projekt/ Teräs, J. and Mäenpää, A. (2016). Smart the-bioeconomy-region/] Accessed Jan 2018 specialisation implementation processes in Regional Council of South Ostrobothnia (2014). the North. Lessons learned from two Finnish South Ostrobothnia – Smart Outstanding: regions. European Structural and Investment Strategy for Smart Specialisation. Available at: Funds Journal, 4(2): 75–86. [http://www.epliitto.fi/images/B_64_South_ nordregio report 2019:3 95 Teräs, J. and Mäenpää, A. (2018). In search of and Sustainable Enterprise Growth. domains in smart specialisation: Case study National Operational Programme for the of three Nordic regions. European Journal of European Regional Development Fund, Spatial Development, 68. Available at: [http:// 2014–2020, DENMARK, 20 March. Available doi.org/10.30689/EJSD2018:68.1650–9544] at: [http://s3platform.jrc.ec.europa.eu/ Teras, J., Salenius, V., Fagerlund, L., & Stanionyte, documents/20182/223684/DK_RIS3_201403_ L. (2018). Smart Specialisation in Sparsely Final.pdf/b7f00dc3-87cc-4519-8afc- Populated European Arctic Regions (No. 59e40ec79ae9] Accessed Oct 2017. JRC114273). Joint Research Centre (Seville Erhvervsstyrelsen (n.d.). Regional policy site). actors. Available at: [https://regionalt. Tödtling, F., & Trippl, M. (2005). One size fits all?: erhvervsstyrelsen.dk/regional-policy-actors] Towards a differentiated regional innovation Accessed November 2017. policy approach. Research policy, 34(8), 1203- European Commission (EC) (2018) Smart 1219. Specialisation Platform: Registered Countries Vanguard Initiative (n.d.). Bio-economy— and regions in the S3 Platform. Available at: Interregional cooperation on innovative use [http://s3platform.jrc.ec.europa.eu/regions/ ] of non-food biomass. Available at: [https:// Accessed December 2018. www.s3vanguardinitiative.eu/cooperations/ Gianelle, C., Kyriakou, D., Cohen, C. and Przeor, bio-economy-interregional-cooperation- M. (eds.) (2016). A Handbook on Implementing innovative-use-non-food-biomass] Accessed Smart Specialisation Strategies. Brussels: Mar 2018. European Commission. Virkkala, S., Mäenpää, A. and Mariussen, Å. Government Offices of Sweden (2015). (2017). A connectivity model as a potential tool Sweden’s National Strategy for Sustainable for smart specialization strategies. European Regional Growth and Attractiveness Planning Studies, 25(4): 661–679. 2015–2020. Available at: [http://www. Vromen, A. (2010). Debating methods: government.se/498c48/contentassets/ Rediscovering qualitative approaches. In: ad5c71e83be543f59348b54652a0aa4e/ Marsh, D. and Stoker, G. (eds.) Theory and swedens-national-strategy-for-sustainable- Methods in Political Science, 3rd ed. Palgrave regional-growth-and-attractiveness- Macmillan: London. 20152020---short-version.pdf] Yin, R. K. (2018). Case Study Research Government Offices of Sweden (2012). and Applications: Design and Methods. The Swedish Innovation Strategy. SAGE Publications: Los Angeles. ISBN: Retrieved from [http://www. 9781506336183 government.se/49b758/contentassets/ cbc9485d5a344672963225858118273b/the- Policy context references swedish-innovation-strategy] Asheim, B. (2014). North Denmark Region RIS3: Henning, M., Moodyson, J. and Nilsson, M. Expert Assessment: An expert assessment (2010). Innovation och Regional omvandling: of behalf of DG Regional and Urban Policy. från Skånska kluster till nya kombinationer, Available at:[http://www.rn.dk/regional- Region Skåne: 978-91-633-6184-5. (Translated: udvikling/fakta-og-statistik/revus-analyse/-/ Innovation and regional change: from media/Rn_dk/Regional-Udvikling/REVUS/ Scanian clusters to new combinations) REVUS-analyser/North_Denmark_Region_ Available at: [https://www.researchgate. RIS3_Expert_Assessment.ashx] Accessed Oct net/publication/316990939_Innovation_och_ 2017. Regional_omvandling_fran_Skanska_kluster_ Cooke, P. and Eriksson, A. (2012). Resilience, till_nya_kombinationer] Accessed March 2018. ‘white spaces’ and cluster platforms as a Interreg Europe (2018). iEER and smart response to globalization shocks. In Cooke, P., specialisation in Southern Denmark. Available Parrilli, M. D. & Curbelo, J. L. (eds.) Innovation, at: [https://www.interregeurope.eu/ieer/ Global Challenge and Territorial Resilience. UK / news/news-article/1060/ieer-and-smart- US: Edward Elgar Publishing Limited. specialisation-in-southern-denmark/] Danish Business Authority (2014). Innovative Accessed Aug 2018. nordregio report 2019:3 96 Jungsberg, L., Copus, A., Weber, R. and Nilsson, Finnish Regional Development Strategy 2020. K. (2017). Demographic change and labour Publications of the Ministry of Employment market challenges in regions with large-scale and the Economy. Regional Development resource-based industries in the Northern 23/2010) Available in Finnish: [http:// Periphery and Arctic. Regional Innovation in www.lamk.fi/projektit/enne/materials/ the Nordic Arctic (REGINA). REGINA Report Documents/23_2010_web.pdf] Accessed Oct 2018:1. Nordregio: Stockholm. 2017. Karlstad University (2019) Academy for Smart Møre og Romsdal County Council (n.d.) Specialisation. Available: [https://www.kau. Strategiar og planar. (Strategies and se/en/external-relations/external-relations- Plans) Available in Norwegian: [https:// university/good-examples/academy-smart- mrfylke.no/Tenesteomraade/Regional-og- specialisation] Accessed Aug 2018 naeringsutvikling/Strategiar-og-planar/ [KMD] Ministry of Local Government and (language)/nno-NO ]Accessed Oct 2017 Modernisation (2018b). Smart Spesialisering Nordland County Council (2014) Et Nyskapende som metode for regional næringsutvikling. Nordland: Innovasjonsstrategi for Nordland (Translated: Smart specialisation as a 2014–2020. (Translated: An innovative method for regional development) Available in Nordland: The innovation strategy Norwegian: [https://www.regjeringen.no/co for Nordland 2014-2020) Available in ntentassets/9cff31a9a15c457c9366c63c5aa6 Norwegian: https://www.nfk.no/_f/p34/ 5f42/veileder-smart-spesialisering-endelig.pdf] ic48ed4d0-b9fb-40a4-b9f0-4aa158001c28/ Accessed Nov 2018. innovasjonsstrategi_trykkeklar1.pdf Accessed 1 Lagnevik, B. (2012). Region Skåne. Towards a June 2018. RIS3 Strategy. Powerpoint presentation in Nordland County Council (2017) S3 Skole – Høst Seville, 3 May 2012 by Björn Lagnevik. Available 2017. (Translated: The S3 School – Autumn at: [http://s3platform.jrc.ec.europa.eu/ 2017) Available in Norwegian: [https://www. documents/20182/88981/MS_02+Pres+Skane. nfk.no/tjenester/naring/innovasjon/s3-skole- pdf/94b6a156-c2ea-460d-9a4c-12f63da5587b] host-2017.1001798.aspx] Accessed June 2018 Accessed Nov 2017. OECD (2016). OECD Science, Technology and Lindqvist, M., Smed Olsen, L., Perjo, L. and Innovation Outlook. OECD Publishing: Paris. Claessen, H. (2013). Implementing the concept DOI: https://dx.doi.org/10.1787/sti_in_outlook- of smart specialisation in the Nordic countries. 2016-en An Exploratory Desk Study. Nordregio Working Owal Group Oy (2017) Alueiden vahvuuksien Paper 2013:1 [http://www.nordregio.se/Global/ analyysi. Työ- ja elinkeinoministeriön julkaisuja, Publications/Publications%202013/WP2013_1. Alueet, 24/2017. Retrieved from http:// pdf] owalgroup.com/wp-content/uploads/2015/01/ Lovdata (n.d.). Lov om planlegging og TEMjul_24_2017_verkkojulkaisu.pdf byggesaksbehandling (plan- og bygningsloven) Polverari, L. (2016) The implementation of Første del: Alminnelig del. Kapittel 1. smart specialisation strategies in 2014–20 (Translated: Law on planning and construction- ESIF programmes: turning intelligence into cases (Planning and Building Act) First Part: performance, IQ-Net Thematic Paper 39(2), General. Chapter 1) Available in Norwegian: Glasgow: European Policies Research Centre, [https://lovdata.no/dokument/NL/lov/2008- University of Strathclyde. 06-27-71/KAPITTEL_1#KAPITTEL_1] Accessed Prime Minister’s Office (2011). Iceland 2020— Dec 2018. Governmental policy statement for the Ministry of Economic Affairs and Employment economy and community knowledge, (n.d.). Regional development and regional sustainability, welfare. Retrieved from [https:// councils. Available at: http://tem.fi/en/ eng.forsaetisraduneyti.is/media/2020/ regional-councils Accessed Oct 2017. iceland2020.pdf] Accessed Oct 2017 Ministry of Employment and the Economy. Research Council of Norway (RCN) (2013). (2010). Suomen aluekehittämisstrategia Programplan 2014–2017: Program Virkemidler 2020. Työ- ja elinkeinoministeriön julkaisuja. for regional FoU og innovasjon – VRI. Alueiden kehittäminen 23/2010. (Translated: (Translated: Program 2014-2017: The regional nordregio report 2019:3 97 research, development and innovation programme. In Kyriakou, D., Martínez, M. P., program) Available in Norwegian: [https:// and Periáñez-Forte, I. (eds.). Governing Smart www.forskningsradet.no/prognett-vri/ Specialisation (Vol. 106). London: Taylor and Forside/1224529235249] Accessed Oct 2017 Francis. Research Council of Norway (RCN) (2016). Teräs, J., Salenius, V., Fagerlund, L., Stanionyte, Programrapport 2016: Virkemidler for L. (2018) Smart Specialisation in Sparsely regional FoU og innovasjon/VRI. (Translated: Populated European Arctic Regions, EUR Program report 2016: The regional 29503 EN, Publications Office of the European research, development and innovation Union: Luxembourg. ISBN 978-92-79-98266- program) Available in Norwegian: [https:// 8. Available: [http://s3platform.jrc.ec.europa. www.forskningsradet.no/prognett-vri/ eu/documents/20182/201464/Smart+Speci Forside/1224529235249] Accessed Oct 2017 alisation+in+Sparsely+Populated+European+ Research Council of Norway (RCN) (2017a). Arctic+Regions/6d39afc9-6b7d-442d-a4bd- Forskningsbasert innovasjon i regionene d2c4f86d8092] Accessed Jan 2019. (FORREGION): Programbeskrivelse. The Danish Agency for Science, Technology (Translated: Research based innovation in and Innovation (2016). Cluster strategy the regions: Program description) Available in 2.0: Strategy for Denmark’s cluster and Norwegian: [https://www.forskningsradet. network policy 2016–2018. Available no/prognett-vri/Regional_satsing_ at: [http://s3platform.jrc.ec.europa.eu/ fra_2017/1254009745962] Accessed Dec 2017. documents/20182/232200/DK_Cluster_ Research Council of Norway (RCN) (2017b). Strategy_Final.pdf/cec1103a-b6bf-4895-8fe5- Sluttrapport VRI-programmet 2007–2017: 892ce3a0b00c] Accessed November 2017. Program Virkemidler for regional FoU og The Government of the Faroe Islands (2015). innovasjon–VRI. (Translated: Final Report Coalition Agreement 2015, Annex. Available at: of the VRI program 2007-2017: The regional [http://www.government.fo/the-government/ research, development and innovation coalition-agreement/annex/] Accessed Oct program) Available in Norwegian: [https:// 2017 www.forskningsradet.no/prognett-vri/ Tillväxtverket (n.d.). Uppföljning av regionala Forside/1224529235249] Accessed Dec 2017. företagsstöd och stöd till projektverksamhet. S3 Platform (2018). Midtjylland. Available at: (Translated: Follow-up of regional business [http://s3platform.jrc.ec.europa.eu/regions/ support and support for project activities) DK04/tags/DK04] Accessed Aug 2018. Available in Swedish: [https://tillvaxtverket. S3 Platform (2019) Registered countries and se/download/18.44451b6d15cc476e0b86 regions in the S3 Platform, Available: [http:// d75b/1498718930162/Finansieringför%20 s3platform.jrc.ec.europa.eu/s3-platform- regional%20tillväxt%202016.pdf] Accessed registered-regions Accessed Jan 2019]. Nov 2017 Accessed Jan 2019. Tillväxtverket (2017). Finansiering för regional SCB (2018) Folkmängd i riket, län och tillväxt 2016. (Translated: Financing for kommuner 30 September 2018 och regional growth 2016) Available in Swedish: befolkningsförändringar 1 juli- 30 September [https://tillvaxtverket.se/vara-tjanster/ 2018. Totalt. (Translated: Population in the publikationer/publikationer-2017/2017-06-30- realm, county and municipalities September finansiering--for-regional--tillvaxt-2016.html] 30, 2018 and population changes July 1 to Accessed November 2017. September 30, 2018) Available in Swedish: Tillväxtverket (n.d.). Utvecklingsansvariga aktörer. [https://www.scb.se/hitta-statistik/statistik- (Translated: Developers responsible for efter-amne/befolkning/befolkningens- development) Available in Swedish: [https:// sammansattning/befolkningsstatistik/ tillvaxtverket.se/aktuella-amnen/regional- pong/tabell-och-diagram/kvartals--och- utveckling/utvecklingsansvariga-aktorer.html] halvarsstatistik--kommun-lan-och-riket/ Accessed Oct 2017 kvartal-3-2018/] Accessed Jan 2019. Tillväxtverket (2017). Tillväxtverkets strategi för Sörvik, J. and Midtkandal, I. (2016). Continuous smart specialisering. (Translated: The Swedish priority setting in the Norwegian VRI Agency for Economic and Regional Growth’s nordregio report 2019:3 98 strategy for smart specialisation) Available in (2018), Kymenlaakso. (Snapshot of regional Swedish: [https://tillvaxtverket.se/download/1 development). Available in Finnish: [https:// 8.2f389fc715bc4774dbd252f9/1493878730736/ tem.fi/documents/1410877/6463080/ Tillväxtverkets%20strategi%20för%20 Kymenlaakso.pdf/94335080-37b6-43ef-bc87- Smart%20specialisering,%20maj%202017.pdf] 891e311363fc/Kymenlaakso.pdf.pdf] Accessed Accessed Oct 2017 8 Oct 2018. Vanguard Initiative (n.d. a). Region Skåne. Port of HaminaKotka (2018). Transport statistics. Available at: [http://s3vanguardinitiative.eu/ Available in Finnish: [http://www.haminakotka. partners/region-skane] Accessed Oct 2018 com/fi/tietoa-satamasta/haminakotka- Vanguard Initiative (2016). Vanguard Initiative satama-oy/liikennetilastot] Accessed 8 Oct position paper: Regions and future EU policies 2018. for growth and investment. Available at: Regional Council of Kymenlaakso (2017a). The [https://www.s3vanguardinitiative.eu/sites/ regional plan 2018–2021 (Kymenlaakson default/files/docs/general/vi_position_paper_ maakuntaohjelma 2018–2021). Available post2020_final_7nov2016.pdf] Accessed Jan in Finnish: [https://www.kymenlaakso.fi/ 2018 aluekehitys/maakuntaohjelma/kymenlaakso- Ålands landskapsregering (2014). Ålands ohjelma-2018-2021] Accessed 29 Oct 2018. innovationsstrategi. Available at: [http:// Regional Council of Kymenlaakso (2017b). www.regeringen.ax/sites/www.regeringen. The implementation of the regional plan ax/files/attachments/page/alands_ 2018. (Kymenlaakson maakuntaohjelman innovationsstrategi_12_maj_2015_uppd_12_ toimeenpanosuunnitelma 2018–2019) juni_2015.pdf] Accessed Oct 2017. Available in Finnish: [http://www. kymenlaakso.fi/attachments/article/13349/ Case study references Toimeenpanosuunnitelma%202018-2019%20 Finland Kymenlaakso%20lopullinen.pdf] Accessed 29 Pienonen, T. and Markkanen, M. (2015) Oct 2018. RIS3 Workbook for learning-driven Regional Council of Kymenlaakso (2016). regional development, Business Arena Oy Kymenlaakso’s smart specialisation RIS3 (Presentation slides). Available at: [https:// strategy 2016–2020. Available at: [http:// www.businessarena.fi/wp-content/ www.kymenlaakso.fi/attachments/ uploads/2015/09/Change2020-RIS3workbook- article/3954/Kymenlaakso's%20smart%20 learning_A.pdf] Accessed 29 Oct 2018. specialisation%20RIS3%20strategy%202016- Cursor Oy (2018). Smart BSR. Available at: 2020.pdf] Accessed 29 Oct 2018. [https://www.cursor.fi/fi/smart-bsr] Accessed Virkkala, S. (2015). Älykäs erikoistuminen ja 29 Oct 2018. alueelliset innovaatiojärjestelmät talouskasvun Finnpulp Oy (2018). Port of HaminaKotka chosen lähteenä. T&Y Talous ja Yhteiskunta 3/2015. for Finnpulp’s export harbour. Available at: Available in Finnish: [http://www.labour.fi/ty/ [http://www.finnpulp.fi/press-archive/port- tylehti/ty/ty32015/pdf/ty32015Virkkala.pdf ] of-haminakotka-chosen-for-finnpulps-export- Accessed 28th Oct 2018. harbour.html] Accessed 22 Nov 2018. Ministry of Economic Affairs and Employment of Sweden Finland (2018). Regional Economic Prospects, European Commission (2017a). Regional ELY Centre of Southwest Finland (Alueelliset innovation scoreboard. Available at: [http:// kehitysnäkymät, 11/2018, Kaakkois-Suomen ec.europa.eu/docsroom/documents/23881] ELY-keskus). Available in Finnish: [http:// Accessed 17th Aug 2018. julkaisut.valtioneuvosto.fi/bitstream/ European Commission (2017b). Regional handle/10024/160786/TEMrap_11_2018_ innovation scoreboard: Region profiles Alueelliset_kehitysnakymat.pdf] Accessed 8 by country, Sweden. Available at: [http:// Oct 2018. ec.europa.eu/DocsRoom/documents/24187] Ministry of Economic Affairs and Employment of Accessed 17th Aug 2018. Finland (2018). Aluekehittämisen tilannekuva, Braunerhjelm, P. Holmquist, C. Thulin, P., Skoogberg, Y. (2018) Global Entrepreneurship nordregio report 2019:3 99 Monitoring Report: Entreprenörskap i Stockholm.pdf Accessed Nov 2018 Sverige - Nationell GEM Rapport 2018, Länsstyrelsen (n.d. a). Regional lärandeplan Entreprenöskapsforum, ISBN: 978-91-89301- för strukturfonderna 2014-2020 i 96-2. Stockholmsregionen. Available in Swedish at: Hall, P. and Soskice, D. (2001). Varieties of [https://www.lansstyrelsen.se/download/18. capitalism: The institutional foundations 2e0f9f621636c84402723fa8/1528120397551/ of comparative advantage. Oxford: Oxford L%C3%A4randeplan%20f%C3%B6r%20 University Press. strukturfondspartnerskapet%20 Hallonsten, O., and Slavcheva, M. (2017). RIO Stockholms%20l%C3%A4n.pdf] Accessed 17 Country Report: Sweden. JRC Science for Aug 2018. Policy Report: Research and Innovation Länsstyrelsen (n.d. b). Observatory Country Report Series. Available Strukturfondspartnerskapet Stockholms at: [https://rio.jrc.ec.europa.eu/en/country- län. Available in Swedish: [https://www. analysis/Sweden/country-report] Accessed lansstyrelsen.se/stockholm/om-lansstyrelsen- 17th Aug 2018. stockholm/om-oss/internationellt-arbete/ Innovation STHLM (2018). Innovationskraft strukturfondspartnerskapet-stockholms-lan. Stockholm. Available in Swedish: [http:// html#0] Accessed 14 Aug 2018 www.innovationsthlmblog.com/innovation- Peterson, C. (2011). Sweden: From large stockholm/] Accessed June 2018. corporations towards a knowledge-intensive Kristensen, P. H. and Lilja, K. (2011). Nordic economy. In Kristensen, P. H. and Lilja, K. (2011) capitalisms and globalisation: New forms Nordic capitalisms and globalisation: New of economic organization and welfare forms of economic organization and welfare institutions, Oxford: Oxford University Press. institutions, Oxford: Oxford University Press, Kristensen, P.H. (2011). The co-evolution of pp. 183–219. experimentalist business systems and enabling Polverari, L. (2016). The implementation of welfare states: Nordic countries in transition. Smart Specialisation Strategies in 2014–20 In Kristensen, P. H. and Lilja, K. (eds.). Nordic ESIF programmes: Turning intelligence into capitalisms and globalisation: New forms of performance. IQ-Net Thematic Paper 39(2). economic organization and welfare institutions, Glasgow: Policies Research Centre, University Oxford: Oxford University Press, pp. 1–46. of Strathclyde [KTH] Royal Institute of Technology (2015). Region Stockholm (2018) Landstinget blir Samverkan. Available in Swedish: [https:// Region Stockholm. Available in Swedish: www.kth.se/en/samverkan/infrastruktur] [https://www.sll.se/nyheter-stockholms-lans- Accessed 17th Oct 2018. landsting/2018/12/landstinget-blir-region- [KTH] Royal Institute of Technology (2016). stockholm/] Accessed Jan 2019 Innovationskraft Stockholm. Available in Region Stockholm (2019) Regional utveckling, Swedish: [https://www.kth.se/en/samverkan/ Available in Swedish: [https://www.sll.se/ arenor/innovationskraft-stockholm-1.457803 ] verksamhet/Regional-utveckling/] Accessed Accessed 17 Oct 2018 Jan 2019. Länsstyrelsen Stockholm (2015). Kartläggning Statistics Sweden (SCB) (2018a) Folkmängd av styrkeområden i Stockholmsregionen. i riket, län och kommuner 30 September Available in Swedish at: [https://www. 2018 och befolkningsförändringar 1 juli- 30 lansstyrelsen.se/download/18.2e0f9f621636 September 2018. Totalt. Available in Swedish: c84402725f64/1528205690507/Rapport%20 [https://www.scb.se/hitta-statistik/statistik- 2015-4%20Kartl%C3%A4ggning%20 efter-amne/befolkning/befolkningens- av%20styrkeomr%C3%A5den%20i%20 sammansattning/befolkningsstatistik/ Stockholmsregionen.pdf] Accessed 14 Aug 2018 pong/tabell-och-diagram/kvartals--och- Länsstyrelsen Stockholm (2017) Årsredovisning halvarsstatistik--kommun-lan-och-riket/ 2017. Available in Swedish: [https://www. kvartal-3-2018/] Accessed Jan 2019 lansstyrelsen.se/download/18.4771ab7716298e Statistics Sweden (SCB) (2018b) Land and d82ba7283d/1526068884776/%C3%85rsredov water area in square kilometre by region, isning%202017%20L%C3%A4nsstyrelsen%20 type of area and year. Available: http:// www.statistikdatabasen.scb.se/pxweb/en/ konkurrenskraften hos små och medelstora ssd/START__MI__MI0802/Areal2012/table/ företag, Rapport: 0228. Available in Swedish tableViewLayout1/?rxid=91a95f65-725f-42aa- at: [https://tillvaxtverket.se/download/18. 9439-1e8cdc581d06 Accessed Dec 2018 c22cacc15ce883b8cf8b03a/1499434955285/ Socialfondens Övervakningskommitté (2015). Utv%C3%A4rdering%20av%20 Regional handlingsplan för Europeiska %C3%A5tta%20program,%20Regionala%20 socialfonden 2014–2020 i Stockholm. utvecklingsfonden,%20Tematiskt%20 Available in Swedish at: [https://www.esf. m%C3%A5l%203.pdf] Accessed 12 March se/Documents/Min%20region/Stockholm/ 2018. Regional%20plan/Slutlig%20%20 Tillväxtverket (2017c). Utvärdering av nio Regional%20handlingsplan%202014-2020%20 program Regionala utvecklingsfonden 20150129%20%C3%96K.pdf] Accessed Tematiskt mål 1 Delrapport 1 om målet: November 2018. Stärka forskning, teknisk utveckling Södertälje Science Park (2018). Vårt och innovation. Available in Swedish: profilområde. Available in Swedish at: [https:// https://tillvaxtverket.se/download/18. sscp.se/sodertalje-science-park/vart- c22cacc15ce883b8cf8a7eb/1499431902020/ profilomrade/] Accessed 12 Nov 2018. Rapport_0227_webb.pdf Accessed March 19 Stockholm Läns Landsting (2018a). Regionalt 2018. utvecklingsansvar i Stockholms län. Available Tillväxtverket (2018) Tillväxtverket: Strategi for in Swedish at: [https://www.sll.se/om- Smart Specialisering. Available in Swedish landstinget/Regionbildning-i-Stockholms-lan/] at: [https://tillvaxtverket.se/download/18.2 Accessed November 2018. f389fc715bc4774dbd252f9/1493878730736/ Stockholm Läns Landsting (2018b). Regionala Tillv%C3%A4xtverkets%20strategi%20 utvecklingsplan för Stockholmsregionen (RUFS f%C3%B6r%20Smart%20specialisering,%20 2050). Available in Swedish at: [http://www. maj%202017.pdf] Accessed 4 Oct 2018 rufs.se/rufs-2050] Accessed Oct 2018. Urban ICT Arena (2018). Us + Partners. Available Svensson, A. (2015). Requirement and possibility at: [http://www.urbanictarena.se/us- analysis: For future work in possible national or partners/] Accessed 12 Nov 2018. regionally available laboratory environments Vad, T.B., Karlsson, F. Öhlin, J., Nielsen, A., for researchers, industries and others at KTH. Johannesson, C. (2015) Kartläggning av Available at: [https://www.kth.se/polopoly_ styrkeområden i Stockholmsregionen, fs/1.548840!/Requirement%20and%20 DAMVAD, Länsstyrelsen Stockholm. Available possibility%20analysis_FINAL.pdf] Accessed in Swedish: [https://www.lansstyrelsen. Oct 2018. se/download/18.2e0f9f621636c84402 Sweco (2017). Utvärdering av 725f64/1528205690507/Rapport%20 Stockholmsmodellen, Delrapport November 2015-4%20Kartl%C3%A4ggning%20 2017: Uppdrag av Länsstyrelsen i Stockholm av%20styrkeomr%C3%A5den%20i%20 2016. Stockholmsregionen.pdf] Accessed June 2018 Tillväxtverket (2015) Nyps. Available in Swedish: [https://nypscentralen.tillvaxtverket.se/ Denmark sidhuvud/omnyps/forvaltning.4.4f9fd2c7123e0 Central Denmark Region (2016). Growth 67bdde80005249.html] Accessed August 2018. and development strategy: Executive Tillväxtverket (2017a). Operational programme Summary. The Regional Council and Growth under the ’investment for growth and Forum, 2016-2025. Available at: [https:// jobs’ goal. Available in Swedish: [https:// www.rm.dk/siteassets/om-os/english/ tillvaxtverket.se/download/18.6617481415516 regionaldevelopment/eng-vus-webversion.pdf] 92c5bea89b7/1468398414458/Operativt%20 Accessed Oct 2018 program%20Stockholm%20engelsk%20 Edquist, C. and Hommen, L. (2008). Comparing version.pdf] Accessed 17 Aug 2018. national systems of innovation in Asia and Tillväxtverket (2017b). Utvärdering av åtta Europe: Theory and comparative framework. program Regionala utvecklingsfonden In Edquist, C. and Hommen, L. (eds.) Small Tematiskt mål 3 Delrapport 1 om målet: Öka Country Innovation systems. Globalization, nordregio report 2019:3 101 Change and Policy in Asia and Europe. Press. Pp. 116-145. Cheltenham: Edward Elgar Publishing Limited, Clausen, T. (2009). Industrial R&D policy in pp. 1–28. Norway: Who gets the funding and what European Commission (2018a). Central Jutland/ are the effects? In Fagerberg; J., Mowery, Midtjylland. Retrieved from the Smart D. and Verspagen, B. (eds.) Innovation, Path Specialisation Platform. Available at: [http:// Dependency and Policy: The Norwegian Case, s3platform.jrc.ec.europa.eu/regions/DK04/ Oxford: Oxford University Press, pp. 349–373. tags/DK04] Accessed Oct 2018 Fagerberg; J., Mowery, D. and Verspagen, B. European Commission. (2018b). Eurostat. (2009). Introduction: Innovation in Norway, in Available at: [https://ec.europa.eu/eurostat] Innovation, Path Dependency and Policy: The Accessed Oct 2018 Norwegian Case. Oxford: Oxford University Kristensen, P., Lotz, M. and Rocha, R. (2011). Press. Pp. 1–33. Denmark: Tailoring flexicurity to changing roles Finne, H., Løvland, J., Mariussen, Å., Madsen in global games. In Kristensen, P. and Lilja, K. E.L. and Bjørkan, M. (2018). Rapport: Blir (eds.) Nordic Capitalisms and Globalization. Nordland mer Nyskapende? Midtveisrapport av Oxford: Oxford University Press, pp. 86–140. følgeforskningen av fylkets strategi for smart Polverari, L. (2016). The implementation of spesialisering. Available in Norwegian: [https:// Smart Specialisation Strategies in 2014–20 www.nfk.no/_f/ic206dc3b-e371-4cdc-afd8- ESIF programmes: Turning intelligence into f6e174f9e50f/blir-nordland-mer-nyskapende. performance. IQ-Net Thematic Paper 39(2). pdf] Accessed 29 Oct 2018. Glasgow: Policies Research Centre, University Haanes, Ø.R. (2018). Men Kven skal of Strathclyde. Styre Pengesekken? Årskonferansen, State of Green. (2018). Central Denmark—The Regionale Forskningsfond: Nord-Norge. world's tightest wind cluster. Retrieved from Available in Norwegian: [https://www. State of Green: [https://stateofgreen.com/ forskningsradet.no/servlet/web/prognett- en/partners/city-of-aarhus/solutions/central- nordnorge/Nyheter/Men_kven_skal_ denmark-the-world-s-tightest-wind-cluster/] styre_pengesekken/1254036834338/ Århus University. (2018). Århus University. p1253953709215] Accessed 30 September Available at: [https://international.au.dk/] 2018. Accessed Oct 2018 Madsen, E.L., Løvland, J., Mariussen, Å. and Vinogradov, E. (2017). Monitoreringssystem Norway og nullpunktsmåling for innovasjonsstrategien Boschma, R. (2016). Opportunities for smart til Nordland, prosjektnotat nr 7. Available specialisation, Seminar in Bodø, 14 October in Norwegian: [https://www.nfk.no/_f/ 2016. Presentation available at: [https://www. i796273d5-29f3-4f85-a2d0-749d1f42bf24/ nfk.no/filOversikt.aspx?MId1=17632&Filkategor monitoreringssystem-og-nullpunktsmaling- iId=12942] Accessed June 2018. for-innovasjonsstrategien-til-nordland.pdf] Cappelen, Å., Fjærli, E., Iancu, D.C., Klemetsen, Accessed 10 July 2018. M., Moxnes, A., Nilsen, Ø.A, Raknerud, Mariussen, Å. (2018). Smart flernivåkoordinering. A. and Rybalka, M. (2016). Innovasjons- Available in Norwegian at: [https://www. og verdiskapingseffekter av utvalgte nfk.no/_f/i6cb1583d-c2af-4188-b6ab- næringspolitiske virkemidler. Available ca4a40af9660/smart-flerniva-koordinering- in Norwegian at: [https://www.ssb.no/ dansen-for-a-engasjere-staten-opp-ned-opp- virksomheter-foretak-og-regnskap/artikler- og-til-siden.pdf] Accessed 6 November 2018. og-publikasjoner/_attachment/262261?_ Mariussen, Å., Finne, H., Ljunggren, E. and ts=153f4d17cb8] Accessed 1 Nov 2018. Tønseth, S. (2016). Hva er smart spesialisering Castellacci, F., Clausen, T., Nås, S.O. and egentlig? Available in Norwegian: [https:// Verspagen, B. (2009). Historical fingerprints? www.nfk.no/_f/i17bbbafd-9bbf-4528-ac4d- A taxonomy of Norwegian innovation. In a388597d47f5/teorinotat1-kortversjon.pdf] Fagerberg; J., Mowery, D. and Verspagen, B. Accessed 3 June 2018 (eds.) Innovation, Path Dependency and Policy: Mazzucato, M. (2013). The entrepreneurial lion: The Norwegian Case, Oxford: Oxford University Debunking public vs private sector myths. nordregio report 2019:3 102 London: Anthem Press. ISBN 978-0-85728252-1 www.nfk.no/_f/p34/ic48ed4d0-b9fb-40a4- Ministry of Finance (FD) (2018). State budget b9f0-4aa158001c28/innovasjonsstrategi_ 2018. Available in Norwegian at: [https://www. trykkeklar1.pdf] Accessed 1 June 2018. regjeringen.no/no/dokument/statsbudsjettet/ Nordland County (2017). S3 Skole—Høst 2017. statsbudsjettet-2019/id2611124/] Accessed 15 Available in Norwegian: [https://www.nfk. Oct 2018. no/tjenester/naring/innovasjon/s3-skole- Ministry of Local Government and Modernisation host-2017.1001798.aspx] Accessed 1 November (KMD) (2018a). Rapport fra Ekspertutvalg: 2018. Regionsreformen – Desentralisering av Nordlandsforskning (n.d) REISELIV2X: Nasjonal oppgaver fra states til fylkeskommunen, Feb strategi gir muligheter. Available in Norwegian: 2018. Available in Norwegian at: [https://www. [http://m.nordlandsforskning.no/getfile. regjeringen.no/contentassets/2ac32be8629541 php/1325248-1546435383/Bilder/Artikkelbilder/ 259acade7d15d9451e/regionreform---rapport- REISELIV2X%3A%20Nasjonal%20strategi%20 fra-ekspertutvalget.pdf] Accessed 29 Oct gir%20muligheter%21.pdf] Accessed: January 2018. 2019 Ministry of Local Government and Modernisation Nordlandsforskning (2018) Opplevelser i (KMD) (2018b). Smart spesialisering som Nord – Kunnskapsbasert Verdiskaping. metode for regional næringsutvikling. Available Sluttmelding. Available in Norwegian: [http:// in Norwegian at: [https://www.regjeringen.no/ opplevelserinord.no/getfile.php/1319718- contentassets/9cff31a9a15c457c9366c63c5a 1509976491/Opplevelser%20i%20nord/ a65f42/veileder-smart-spesialisering-endelig. Sluttmelding%20Opplevelser%20i%20 pdf ] Accessed Oct 2018 nord%202009%20-%202017.pdf] Accessed: Ministry of Local Government and Modernisation Dec 2018 (KMD) (2018c). Orientering om framlegg til Nordland Fylkeskommune (2018). Industri i statsbudsjettet for 2019-programkategori Nordland. Available in Norwegian at: [https:// 13.50 Distrikts—og regionalpolitikk-førebels www.nfk.no/tjenester/naring/industri-og- rammer. Available in Norwegian at: [https:// mineraler/] Accessed 22 Oct 2018. www.regjeringen.no/contentassets/57eeefdb Research Council of Norway (RCN) (2014). 19714cd39f13855cbb06a4a8/2019_distrikts- Regionalt arbeid: Forskningsrådets policy regional-progr_1350.pdf] Accessed Dec 2018 for 2014–2018. Available in Norwegian Neffke, F., Henning, M., and Boschma, R. (2011). at: [https://www.forskningsradet. How do regions diversify over time? Industry no/prognett-regionsatsing/Om_ relatedness and the development of new programmet/1254019513326 ] Accessed July growth paths in regions. Economic Geography, 2018 87(3): 237–265. Research Council of Norway (RCN) (2018) Project Nordic Institutes for Studies in Innovation, Bank. Available in Norwegian at: [https:// Science and Education (2018). R&D statistics www.forskningsradet.no/prosjektbanken/#/ and indicators: Research and experimental explore/statistics/Kilde=EU&distribution=Sokn development 2018. Available at: [https:// ad&chart=bar&calcType=funding&Sprak=no&s brage.bibsys.no/xmlui/bitstream/ ortBy=date&sortOrder=desc&Geografi.1=Nord handle/11250/2499206/Folder%202018%20 land] Accessed July 2018 web_eng.pdf?sequence=4&isAllowed=yU] Schumpeter, J.A., (1934) The theory of economic Accessed 1 November 2018. development: An inquiry into profits, capital, Nordland County (2013). FoU—strategi for credit, interest and the business cycle. Tenth Nordland 2013–2025. Available in Norwegian Edition (2004). New York and London: at: [https://www.nfk.no/_f/p34/i1f10176f- Transaction Publishers. 1a0f-467f-97b1-6f45a8fd09c2/fou-strategi- [SSB] Statistisk Sentralbyrå (2018). Nordland for-nordland-2013-2025.pdf] Accessed 1 June Fylkeskommune: Befolkningsprofil. Available 2018. in Norwegian: [https://www.ssb.no/ Nordland County (2014). Et Nyskapende kommunefakta/kostra/nordland] Accessed 1 Nordland: Innovasjonsstrategi for Nordland November 2018. 2014–2020. Available in Norwegian: [https:// nordregio report 2019:3 103 Iceland Lindqvist, M., Smed Olsen, L., Perjo, L. and Euorpean Council (2014) European Research and Claessen, H. (2013). Implementing the concept Innovation Area Committee – ERAC. Available of smart specialisation in the Nordic countries. at: [https://www.consilium.europa.eu/en/ An Exploratory Desk Study. Nordregio Working council-eu/preparatory-bodies/european- Paper 2013:1 [http://www.nordregio.se/Global/ research-area-innovation-committee/] Publications/Publications%202013/WP2013_1. Accessed 8 Nov 2018. pdf] Accessed 25 Oct 2018. European Commission (2018). European Matís (2018). Company profile. Available at: innovation scoreboard 2018. Available [https://english.matis.is/company-profile/] at: [https://ec.europa.eu/docsroom/ Accessed 6 Nov 2018. documents/30685] Accessed 25 Oct 2018. Mennta- og menningarmálaráðuneyti (2017a). Fjármála- og efnahagsráðuneytið (2018), Stefna og aðgerðaáætlun Vísinda- og Fjármálaáætlun 2018–2022, Available tækniráðs 2017–2019. Available in Icelandic: in Icelandic: [www.althingi.is/altext/ [https://www.stjornarradid.is/verkefni/visindi- erindi/146/146-800.pdf] Accessed: 8th Nov nyskopun-og-rannsoknir/] Accessed 8 Nov 2018 2018. Hagstofa (Statistics Iceland) (2018). R & D Mennta- og menningarmálaráðuneyti (2017b). expenditures (% of GDP). Available at: [https:// Uppbygging rannsóknarinnviða á Íslandi til statice.is/statistics/business-sectors/science- framtíðar 2017. Available in Icelandic: [https:// and-technology/rd/]Accessed 25 Oct 2018 brunnur.stjr.is/mrn/utgafuskra/utgafa.nsf/ Háskóli Íslands (2018). Stofnun rannsóknasetra SearchResult.xsp?documentId=FFABFB3E4B2 HÍ. Available at: [http://rannsoknasetur.hi.is/ B1264002580FE00519E76&action=openDocu forsida] Accessed 7 Nov 2018. ment] Accessed 8 Nov 2018. Heijs, F., Dooley, J., Maijala, R. and Verbeek, A. Ministry of Industries and Innovation (2014). ERAC peer review of the Icelandic (Atvinnuvega- og nýsköpunarráðuneytið) research and innovation system. Brussels: (2016). Sóknaráætlun landshlutanna, European Commission. Available at: [https:// Greinargerð um framvindu samninga og www.menntamalaraduneyti.is/media/ ráðstöfun fjármuna 2015 [https://ssa.is/ frettir2014/Final-report-peer-review-STI- images/stories/skjol/2017/2_1_greinarger%20 Iceland2.pdf] strihpsins_2015_final.pdf] Accessed 8 Nov Innovation Center Iceland (Nýsköpunarmiðstöð) 2018. (2018a) – Starfsstöðvar Ministry of Industries and Innovation Nýsköpunarmiðstöðvar Íslands. Available in (Atvinnuvega- og nýsköpunarráðuneyti) Icelandic: [https://www.nmi.is/en/about- (2018a). Work on a new Innovation Strategy innovation-center-iceland] Accessed: 28th Oct has begun. Available at: [https://www. 2018 stjornarradid.is/efst-a-baugi/frettir/stok- Innovation Center Iceland (Nýsköpunarmiðstöð) frett/2018/05/02/Vinna-hafin-vid-motun- (2018b) – About Innovation Center Iceland. nyskopunarstefnu/] Accessed 25 Oct 2018. Available at: [https://www.nmi.is/is/um- Ministry of Industries and Innovation nyskopunarmidstod/um_starfsstodvar] (Atvinnuvega- og nýsköpunarráðuneyti) Accessed: 28th Oct 2018 (2018b). Press release. Available in Icelandic: Kristensen, I., Teräs, J., Wøien, M. and Rinne T. [https://www.stjornarradid.is/efst-a-baugi/ (2018). The potential for smart specialisation frettir/stok-frett/2018/05/02/Vinna-hafin- for enhancing innovation and resilience in vid-motun-nyskopunarstefnu/] Accessed 22 Nordic regions. Preliminary report: Policy Oct 2018. and literature review. Discussion paper OECD (2018). Gross domestic spending on R&D. prepared for Nordic Thematic Group for Available at: Innovative and Resilient Regions, November [https://data.oecd.org/rd/gross-domestic- 20, 2017, Stockholm [http://www.nordregio. spending-on-r-d.htm] Accessed 25 Oct 2018. org/wp-content/uploads/2017/04/Smart- Prime Minister's Office (Forsætisráðuneytið) Specialisation-Discussion-Paper_-180202.pdf] (2011). Iceland 2020 (Ísland 2020—sókn fyrir Accessed 25 Oct 2018. atvinnulíf og samfélag). Available in Icelandic: nordregio report 2019:3 104 [https://www.stjornarradid.is/media/ Nordisk Samarbete (n.d.). Fakta om Åland. forsaetisraduneyti-media/media/Skyrslur/ Available in Swedish: [https://www.norden. island2020.pdf] Accessed Oct 2018 org/sv/information/fakta-om-aland] Accessed Samgöngu- og sveitarstjórnaráðuneyti (2018a). Aug 2018 Tillaga til þingsályktunar um stefnumótandi Teräs, J. (2017). Utvärderarnas första delrapport byggðaáætlun fyrir árin 2018–2024. Available per 31.12.2016, Ålands strukturfondprogram in Icelandic: [https://www.althingi.is/ perioden 2014–2020. Stockholm: Nordregio, altext/148/s/0690.html] Accessed 31 Oct 2018. Sweden. Available in Swedish: [https://www. Samgöngu- og sveitarstjórnaráðuneyti (2018b). regeringen.ax/sites/www.regeringen.ax/files/ Sóknaráætlanir landshluta. Greinargerð um attachments/article/str_fond_version_final_ framvindu samninga og ráðstöfun fjármuna nordregio_med_annex_2.pdf] Accessed Aug 2017. Available in Icelandic: [https://www. 2018 stjornarradid.is/verkefni/sveitarstjornir-og- Ålands Statistik och utredningsbyrå [ÅSUB] byggdamal/byggdamal/soknaraaetlanir/] (2017). Vanliga frågor om Åland. Available in Accessed 7 Nov 2018. Swedish: [https://www.asub.ax/sv/vanliga- Stjórnarsáttmáli (2017). Sáttmáli fragor-om-aland] Accessed Nov 2018 Framsóknarflokks, Sjálfstæðisflokks og Ålands Landskapsregering (2015). Ålands Vinstrihreyfingarinnar – græns framboðs Innovationsstrategi 2014–2020. Available um ríkisstjórnarsamstarf og eflingu at: [https://www.regeringen.ax/sites/www. Alþingis. Available in Icelandic: [https:// regeringen.ax/files/attachments/page/ www.stjornarradid.is/lisalib/getfile. alands_innovationsstrategi_12_maj_2015_ aspx?itemid=a5aa63d9-d5b4-11e7-9422- uppd_12_juni_2015.pdf] Accessed Aug 2018 005056bc530c] Accessed: 23nd Oct 2018 Ålands Landskapsregering (2017). Kompetens Taxell, C., Yelland, R., Gillespie, I., Linna, M. and 2025—Utbildning för en hållbar framtid på Verbeek, A. (2009). Education, research and Åland. Available in Swedish: [https://www. innovation policy. A new direction for Iceland. regeringen.ax/sites/www.regeringen.ax/files/ Available at: [https://www.forsaetisraduneyti. attachments/guidedocument/kompetens- is/media/vt/education-research-innovation- 2015-utbildning-for-en-hallbar-framtid-pa- policys-skyrsla-nefndar-mai2009.pdf] aland-broschyr.pdf] Accessed Aug 2018 Accessed Nov 2018 Ålands Landskapsregering (2018a). FLEXe Demo- The World Bank (2018). Research and projekt. Available in Swedish: [https://www. development expenditure (% of GDP). regeringen.ax/infrastruktur-kommunikationer/ Available at: [https://data.worldbank.org/ el-energi/flexe-demo-projektet] Accessed Aug indicator/GB.XPD.RSDV.GD.ZS] Accessed 25 2018 Oct 2018. Ålands Landskapsregering (2018b). Ålands strukturfondsprogram 2014–2020. Available Åland in Swedish: [https://www.regeringen.ax/ European Commission (n.d.). Kestävää naringsliv-foretagande/finansiering/alands- kasvua ja työtä 2014–2020—Suomen strukturfondsprogram-2014-2020 ] Accessed rakennerahasto-ohjelma. Available in Aug 2018 Finnish: [https://ec.europa.eu/regional_ Ålands strukturfondsprogram (2014). Operativt policy/sv/atlas/programmes/2014-2020/ program inom målet investering för finland/2014fi05m2op001] Accessed Aug 2018 sysselsättning och tillväxt, Entreprenörskap Högskolan på Åland (2016a). Ålands sailing och Kompetens i Ålands strukturfondsprogram robots: Havsforskningsplattformen. Available 2014–2020. Available in Swedish: [http://www. in Swedish: [https://www.ha.ax/forskning- regeringen.ax/sites/www.regeringen.ax/files/ samverkan/projekt/alands-sailing-robots/] attachments/page/program-eruf-esf-2014. Accessed Aug 2018 pdf] Högskolan på Åland (2016b). Business Lab Åland. Ålands Utvecklings AB [ÅUAB] (2018). Available in Swedish: [https://www.ha.ax/ Investeringar. Available in Swedish: [https:// forskning-samverkan/projekt/business-lab- www.auab.ax/investeringsbolag] Accessed aland/] Accessed Aug 2018 Aug 2018 nordregio report 2019:3 105 Stakeholders consulted in the process* Interviews: Nordland Interviews: Kymenlaakso Beate Rotefoss, Senior Adviser on Innovation, the Kirsi Tallinen, Research Manager at Xamk South- Industrial Development Corporation of Norway Eastern Finland University of Applied Sciences (SIVA) Marja Holopainen, S3 specialist and Project Bjørn G. Nilsen, Special Adviser on Business and Manager at Cursor Oy Technology for Region Nordland, Research Mauri Reinilä, CEO at Package Media Oy Council of Norway Petri Tolmunen, Head of International affairs and Hanne Østerdal, Industry and Development Project Manager at Cursor Oy Manager, Nordland County Administration Tiina Heinikainen, Specialist in international Håkon Finne, Senior Research Scientist, SINTEF affairs at Kinno Oy (Stiftelsen for industriell og teknisk forskning) Tytti Lankinen, Specialist in Smart Specialisation Inger Teigstad, Department Manager, Innovation and international affairs at Kinno Oy Norway Toni Vanhala, Development Director at the Pål Ove Henden, Senior Adviser, Bodø Science Park Regional Council of Kymenlaakso Una Sjørbotten, Senior Adviser, Nordland County Administration Interviews: Stockholm Cecilia Johansson, Tillväxtverket Interviews: Iceland Jens Sörvik, National expert on S3 and formerly Einar Olavi Mantyla, Project Manager at the at the European Commission’s S3 in Seville University of Iceland, Division of Science and Maria Lindqvist, Development Manager Innovation Innovation, Department of Business, Geir Oddsson, Senior Adviser at the Foreign Stockholm County Administrative Board Ministry of Iceland Petra Dalunde, Chief Operating Officer, Urban Hólmfríður Sveinsdóttir, formerly a specialist at ICT Arena the Icelandic Regional Development Institute, Tim Nordh and William Brandt, CEO and Founder, currently a Senior Adviser at the Ministry of respectively, of a startup tied to a cluster in Transport and Local Government, Department Östra-Mellan Sverige of Local Government and Regional Affairs Ulrika Ljungman, Business Manager, the Royal Þórlindur Kjartansson, Chairman of the steering Institute of Technology (KTH) group formulating Iceland’s new Innovation Policy and former Chairman of Innovit Interviews: Midtjylland Torfi Geirmundsson, Senior Adviser at the Nordic Anne Mette Sørensen Langvad, Head Consultant Council of Ministers on energy and the circular economy, Central Denmark Region Interviews: Åland Benita Simonsen, Cluster Manager, Lifestyle & Christel Lindholm, Co-ordinator, Government of Design Cluster Åland Claus Bo Andreasen, Chief Consultant, Danish Jouko Kinnunen, Head of Research, Statistics and Centre for Food and Agriculture, Århus Research Åland University Linnea Johansson, Avdelningschef, Susanne Johansen, Division for Result, Impact Näringsavdelningen, Government of Åland and Policy, Danish Business Authority Susanne Strand, Head of Division (Allmänna byrån), Department of Business, Government of Åland

*Note: The order of the interview list does not correspond to the numbering used in the text nordregio report 2019:3 106 Annex 1. Country Table Compilation 6: of nation S3 approaches in the Nordic region Denmark Finland Iceland Norway Sweden Åland Name of the S3-related strategy S3-related the of Name (2014) Fund,Development 2014–2020 Regional for European the Programme Operational National (2010) Strategy 2020Finnish Regional (Sóknaráætlanir landshlutanna) Plan Growth Regional 2020Iceland for the economy and community Governmental statement policy Guide ( Guide Programme FORREGION (2018) Regional Business Development for a Method as Specialisation Attractiveness 2015–2020 Attractiveness and Growth Regional Sustainable for Strategy National Sweden’s 2014–2020 Strategy Innovation Åland’s Veileder (2011) ): Smart Smart ): (2017) (2015)

Content of the strategy the of Content framework qualifies for the ERDF the for qualifies framework policy existing its with Denmark how argues and ERDF the for qualifying Entails the preconditions for through regional competences economy world the in Finland for role a specialised at aiming A strategy and regional development innovation for strategies Place-based Crisis 2008/09. Financial the to A response clustering. knowledge economy development and R&D, and innovation growth, smart economy emphasis and on society; efficient an for statement A policy considering specialisation smart administrations municipality county the guiding and enabling for a tool is and context Norwegian the for S3 of concept the presents guide The this promote to efforts international and regional, between connection national the strengthens and regions the in Promotes research-based innovation development strategies Guides the development of regional strategy as an annex an as strategy specialisation smart the Entails Major actors involved Growth Forums Growth Regional Forum, Cluster The Authority, Business Danish The Councils and Employment, Regional Affairs Economic of Ministry The Authorities; Regional organisations Local of Association Icelandic Transport and Local Government; of Ministry The Innovation; and Industries of Ministry The Iceland of Offices Government The Municipality Administration. Municipality and Modernisation; County Government Local of Ministry The (Siva) Norway of ration the Industrial Development Corpo and Norway Innovation councils; county the Council; Research The authorities, Tillväxtverket authorities, regional other and councils County (the Government of Åland) Landskapsregeringen - Policy for support S3 Agreements Growth Funds; Structural regional development funds; including activities, R&D&I to allocations Bill Finance n mapping of regional strengths) n n N/A N/A (RCN) Norway of Council Research the in Funds Research Regional formulation, Vinnväxt strategy S3 their in regions supports Tillväxtverket initiatives alongside the ERDF co-funds AB Utvecklings Åland

Information (a national agreements Growth Funding AIKO via programme

nordregio report 2019:3 107 nordregio report 2019:3 108

P.O. Box 1658 SE-111 86 Stockholm, Sweden [email protected] www.nordregio.org www.norden.org

ISBN: 978-91-87295-67-6 ISSN: 1403-2503 DOI: doi.org/10.30689/R2019:3.1403-2503 nordregio report 2019:3 110