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James Karlsen, Arne Isaksen (University of Agder) and Olav R. Spilling (NIFU STEP)

The challenge of constructing regional advantages in peripheral areas The case of marine biotechnology in Tromsø, Norway. James Karlsen, Arne Isaksen (University of Agder) and Olav R. Spilling (NIFU STEP). Tromsø.

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James Karlsen, Arne Isaksen (University of Agder) and Olav R. Spilling (NIFU STEP)

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  1. The challenge of constructing regional advantages in peripheral areasThe case of marine biotechnology in Tromsø, Norway James Karlsen, Arne Isaksen (University of Agder) and Olav R. Spilling (NIFU STEP)

  2. Tromsø • Tromsø is located at latitude of nearly 70 degrees north, which is the same latitude as Alaska and Siberia • Strong population growth the last 40 years mainly due to growth in the public sector (university, hospital and administration) • The biggest city north of the polar circle with 64,000 inhabitants in 2008 • Thick public support system with a lot of policy instruments and money available • Thick knowledge infrastructure in Tromsø (University, science park, incubators and applied research institutions)

  3. Marine biotechnology in Tromsø • Proximity to organism that lives in cold arctic seas • Strategic decision of developing research on arctic organism at the university and applied research institutions since the 1970s • Strong emphasis since the 1990s in the public supports system, regional policy circles and the university to facilitate a marine biotechnology industry in Tromsø and northern Norway • However, there is still a small number of marine biotechnology firms (11) in Tromsø and only two firms with more than five employees

  4. Main researchquestion • Why does Tromsø have so few firms and jobs in the marine biotechnology industry considering the large effort to construct regional advantage in this industry in the region? • How can lessons from the Tromsø case inform the theory of constructing regional advantage?

  5. The idea of constructing regional advantage • Regional advantage can be constructed by the help of policy tools that are fine-tuned to specific regional and industrial characteristics, and that in particular aim at: • target the dominant innovation mode and knowledge base of regional industries • strengthen the working of regional innovation systems (RIS) (strengthening the knowledge flow within and between the two subsystems of RIS and stimulating the establishment of lacking actors in the RIS) • increase related variety and knowledge spillover in the regional industry • link regional industry and knowledge organisations to global value chains and knowledge networks

  6. Constructing advantage in the marine biotechnology industry • The biotechnology industry has some specific characteristics important for constructing regional advantage: • innovation activity is based on analytical knowledge which require both high internal R&D competence in firms and interaction with R&D institutions • a fairly linear and lengthy innovation process • innovation steps that need both analytical and synthetic knowledge • the need of dedicated biotech firms that can develop basic research findings • the need of firms with knowledge and capital to industrialise and commercialise new biotechnology products

  7. Knowledge infrastructure and policy instruments

  8. The biotech companies in Tromsø

  9. Main modes of innovation

  10. Lack of related variety • Industrialization takes place outside Tromsø because of lack of local synthetic knowledge • Lack of critical mass of companies, entrepreneurs and venture capital • High variety within the marine biotech industry in Tromsø, but not much related variety

  11. Knowledge sources and networks • Departments of the University of Tromsø are important nodes in the local knowledge network, however some of the firms also cooperate with universities in other regions (Norway and abroad) • Little knowledge flow between the companies • The knowledge flow along the value chain is mainly out of the region

  12. Conclusion • Why so few firms? • Not lack of analytical knowledge and knowledge infrastructure • Not lack of support instruments and public money • Lack of synthetic knowledge in the commercialization and industrialization phase • Lack of local knowledge spillovers

  13. Possible theoretical lessons and further research questions • Is the framework of constructing regional advantage most relevant in more central regions? • Can peripheral regions develop analytical knowledge industries? • The sub-system of knowledge infrastructure can be constructed, but it does not necessarily lead to industrial development • May be policy makers have to acknowledge that biotechnology industry is a part of a national innovation system and that the critical factor in this case is synthetic knowledge

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