Börje Terje Asheim CIRCLE Lund University

2009-2014

The aim of the project was to analyze the strategy of establishing Centres of Expertise (CoE) in Finland, Norway and Sweden to see how this policy fits with a broad based innovation policy, and discuss if the performance of the CoEs can be expected to improve by being informed by this new policy. More specifically the project aimed at analyzing how a process of combining the STI (Science, Technology, Innovation) mode of innovation with the DUI (Doing, Using, Interacting) mode could be supported and achieved at the firm and regional levels by analyzing how the cognitive distance could be reduced and the absorptive capacity increased in the RIS (regional innovation system) as well as in different types of firms.

The three most important results from the project are the following:

1) Attempts to combine science- and user-driven policy by simply increasing STI output may be inefficient as it is difficult to commercialize research results since DUI firms often lack the necessary absorptive capacity and because the market may not be prepared for and open to such science-based innovations. This provides a potential explanation for the apparently paradoxical relationship that economies which consistently invest in research and development (R&D) sometimes score low in terms of innovation output. This entails that innovation policy needs to be adapted to the industry it aims to develop. In industries dominated by DUI firms, it is often not sufficient for RIS policy to only increase the amount of STI in the knowledge infrastructure. Policy also needs to address the issue of the absorptive capacity of the firms. Also absorptive capacity in the wider society (such as customers and other users) is of crucial importance. Technology and society are interdependent, societal conditions are always decisive for the successful outcome of technological breakthroughs. CoEs can be seen as important test beds (or niche experiments) for the development of new technology as well as more thorough renewal of existing industries. Policy stimulating innovation in CoEs must however take the adoption aspect seriously into account to be successful. This requires policy coordination across not just cognitive domains (such as science and industry) but also across spatial scales. Many institutional conditions working as barriers for renewal are out of reach for regional policy and require that the regional policy is attuned to and embedded in national and international policy. The lack of such embeddedness of regional policy measures is an important drawback of many of the CoE-initiatives analyzed in this project.

2) One important issue in this regard concerns stimulating recruitment of highly educated personnel, which again requires relevant study programmes and PhD education at regional universities. A further way to improve the absorptive capacity of DUI firms is through establishing closer links between industry and academia. That would be a way to enable STI-mode innovation in DUI type of firms without necessarily having to recruit researchers. By researchers being involved in the development and implementation, they can ease the process of absorption. STI firms may have problems to commercialize research results due to a lack of knowledge in setting up a production line, in organizing logistics, marketing, etc. This relates also to the general question of how STI firms can draw more on customers and actors in the broad innovation system, and also make more use of experience-based knowledge from different parts of the firms, in innovation projects. Both tasks demand internal capacity building, but aimed to create more learning organizations beyond the R&D department. Such experience exchange and diffusion across the STI and DUI domains within firms and within the region will ultimately also contribute to influencing the absorptive capacity beyond the firm boundaries and beyond the CoE-initiative, potentially increasing the chances for successful outcome of the CoE in the wider society.

3) A common theme in contributing to make DUI firms more research-based and STI firms more able to employ experience-based knowledge is "capability building". In the first case, this includes building more research competence within firms, and in the second case, building more competence in industrialization and commercialization within firms. This makes it possible for both DUI and STI firms to utilize both a narrow and a broad RIS. DUI firms must be able to use the expertise in research institutes, regardless of their location. STI firms need to cooperate with applied R&D institutes, consulting firms, etc. in parts of their innovation projects, which is often most easily achieved in situations of geographical proximity. A conclusion is then that policies of linking science- and user-driven innovation activity must focus on the building of capabilities in firms, R&D organizations and the wider society (including market and policy).

These findings has resulted in an increased focus on how to customize innovation policy to better fit the industrial structure in various regions both with respect to path extension, i.e. to secure the continued competitiveness of existing industries, and to promote new path development either through regional branching (path renewal) or through new path creation based on commercialization of new research results. One important dimension of this is how to determine the optimal combination of knowledge bases (analytical, synthetic and symbolic knowledge) of the industries in regions to secure existing and future innovativeness and competitiveness.

During the period of the project an increased international attention has been paid to the importance of a broadening of national and regional innovation policy. Finland pioneered a broad based innovation policy on a national level in 2010, while Norway on a regional level already for some years had promoted such a policy. Today several nations and regions (e.g. in the context of EU's Smart Specialization Strategy for Regional Development) as well as international organizations such as the EU and OECD are pushing for countries adapting a more broad based policy. In OECD's review of the Swedish Innovation Policy one of the recommendations was to broaden the mission of VINNOVA from only supporting a STI based innovation policy to promote a more broad based policy.

Researchers from the project have actively been advising regional and national innovation and planning agencies in Norway, Sweden, Finland, Canada as well as international organizations such as the EU and OECD.

The two most important publications among the vast number of published results are the following:

1) Combining Innovation Policy: Linking Scientific and Practical Knowledge in Innovation Systems, by Arne Isaksen and Magnus Nilsson. European Planning Studies, 2013.
The article analyses how the two modes of innovation (STI and DUI) can be combined into a broad based innovation policy in regional innovation systems. The analysis indicate that policies aimed to link science- and user driven innovation activities should focus on building absorptive capacity of DUI firms and implementation capacity of STI firms. Thus, the article provides an evidence based foundation for formulating regional innovation policy that will efficiently promote this policy aim.

2) Path renewal in old industrial regions: possibilities and limitations for regional innovation policy, by Lars Coenen, Jerker Moodysson and Hanna Martin. Regional Studies (forthcoming)
This article focuses on how to customize regional innovation policy to facilitate industrial renewal in locked-in regions and industries, which is an important aim of CoE programmes in the Nordic countries. The paper discloses that while such programmes may have a significant impact on the regional and national development of their target industries, the path-reinforcing tendencies beyond this scale are largely out of reach for such initiatives. Thus, the article provides important insights for policy makers of the limitations of national and regional innovation policy in a globalizing knowledge economy.

The project has primarily aimed at academic publications in international peer reviewed journals and in books published by leading publishers. In addition, the project has also generated publications in books published by Nordic publishers using Nordic languages. An important overall element of the publication strategy has been to choose publication outlets that are considered the most relevant for this field of study, e.g. choosing journals that specializes in the areas of research that is covered by the project, and, thus, also may be read by policy makers and practitioners and not only by researchers. This underlines the close proximity and interaction between research and practice in the field of innovation studies. A further emphasizes of this is that the results from the project has also been mobilized in the writing of more policy oriented reports on aspects of innovation policies to national and regional science and innovation agencies in several countries. Also presentation of results at academic conferences as well as targeted workshops including researchers as well as policy makers has been an important dissemination strategy. In addition to the examples mentioned above, the project has been presented at special sessions in a range of conferences and workshops where researchers and policy makers meet.

Publications

Asheim, B. T. (2010): Contribution of research organisations, in Potter, J., Proto, A., and Marchese, M. (eds.), SMEs, Entrepreneurship and Local Development in the Marche Region, Italy. OECD, Paris, 70-80.

Asheim, B. T. (2011): Learning, Innovation and Participation: Nordic Experiences in a Global Context with a Focus on Innovation Systems and Work Organization, in Ekman, M., Gustavsen, B., Asheim, B. T. and Pålshaugen, Ö. (eds.) (2011), Learning Regional Innovation. Scandinavian Models. Palgrave Macmillan, Basingstoke,
Hampshire, 15-49.

Asheim, B. T. (2012): Leveraging public investments in higher education research and development to stimulate innovation – the Swedish case in a Nordic comparative perspective. Report to the Social Science and Humanities Research Council of Canada, March 2012.

Asheim, B. T. (2012): Strong Research and Innovation Milieus – A New Regional Innovation Policy? in Johnsen, H. C. G. and Pålshaugen, Ö. (eds.), Hva er innovasjon? Perspektiver på norsk innovasjonsforskning. Höyskoleforlaget.

Asheim, B. T. (2012): The changing role of learning regions in the globalising knowledge economy: A theoretical re-examination. Regional Studies, 46, 8, 993-1004.

Asheim, B. T. and Herstad, S. (2014): Path development and the organizational and spatial structure of R&D institutions: A comparison between Norway and Sweden. Paper presented at the 2nd Geography of Innovation International Conference, Utrecht University, Utrecht, The Netherlands, January 2014.

Asheim, B. T. and Isaksen, A. (2010): Politikk for sterke näringsmiljöer: den nordiske ’Centres of Expertise’-strategien, in Spilling, O. R. (ed.), Innovasjonspolitikk. Problemstillinger og utfordringer. Fagbokforlaget, Bergen, 191-208.

Asheim, B. T. and Mariussen, Å. (2010): Nordisk innovasjonspolitikk i et komparativt perspektiv, in Spilling, O. R. (ed.), Innovasjonspolitikk. Problemstillinger og utfordringer. Fagbokforlaget, Bergen, 51-77.

Asheim, B. T. and Parrilli, M. D. (2012): Introduction: Learning and Interaction: Drivers for Innovation in Current Competitive Markets, in Asheim, B. T. and Parrilli, M. D. (eds.), Interactive Learning for Innovation: a Key Driver within Clusters and Innovation Systems. Palgrave Macmillan, Basingstoke, Hampshire.

Asheim, B. T., Isaksen, A., Moodysson, J. and Sotarauta, M. (2011): Knowledge bases, modes of innovation and regional innovation policy: A theoretical re-examination with illustrations from the Nordic countries, in Bathelt, H., Feldman, M. P. and D. F. Koegler (eds.), Beyond Territory: Dynamic Geographies of Knowledge Creation, Diffusion,  and Innovation. Routledge, London and New York, 227-249.

Coenen, L., Moodysson, J. & Martin, H. (2014). Path renewal in old industrial regions: possibilities and limitations for regional innovation policy. Regional Studies, forthcoming.

Isaksen, A. and Karlsen, J. (2013), Can small regions construct regional advantages? The case of four Norwegian regions. European Urban and Regional Studies, 20, 2: 243-257.

Isaksen, A. og Nilsson, M. (2013), Combined Innovation Policy: Linking Scientific and Practical Knowledge in Innovation Systems. European Planning Studies, 21, 12: 1919-1936.

Martin, R., Moodysson, J., & Zukauskaite, E. (2011). Regional Innovation Policy Beyond ‘Best Practice’: Lessons from Sweden. Journal of the Knowledge Economy, 2(4), 550-568.

Moodysson, J., & Zukauskaite, E. (2012). Institutional conditions and innovation systems: on the impact of regional policy on firms in different sectors. Regional Studies 48(1), 127-138.

Nilsson, M., & Moodysson, J. (2011): Policy coordination in systems of innovation: A structural-functional analysis of regional industry support in Sweden. CIRCLE Working Papers, WP2011/09.

Puukka, J., Asheim, B. T., Goddard, J., Teichler, U. and Wade, P. (2010): Higher Education in Regional and City Development – Berlin, Germany. OECD, Paris.

Sotarauta, M. & Kosonen, K.-J. (2013) Customized Innovation Policies and the Regions: Digital content services and intelligent machinery in Finland. European Urban and Regional Studies. 20(2), 258-274

Sotarauta, M. & Mustikkamäki, N. (2012) Strategic leadership relay: How to keep regional innovation journeys in motion? In Sotarauta, M., Horlings, I, & Liddle, J. (eds.) 2012. Leadership and Change in Sustainable Regional Development. Abingdon; Routledge.

Sotarauta, M. (2012) Policy learning and the ‘cluster-flavoured innovation policy’ in Finland. Environment and planning C: Government and policy 30 (5), 780-795.

Sotarauta, M. (forthcoming in 2014) Territorial Knowledge Leadership in Policy Networks: A Peripheral Region of South Ostrobothnia, Finland as a Case in Point. . Accepted for publication in Rutten & Benneworth & Boekema (eds) The Social Dynamics of Innovation Networks: From Learning Region to Learning In Socio-Spatial Context. Routledge.

Yelland, R., Asheim, B. T., Dubarle, P., Holm-Nielsen, L. and Timmerhuis, V. (2010): Higher Education in Regional and City Development – Rotterdam, The Netherlands. OECD, Paris.