Closing the Innovation Divide

1. ERRIN - RIM • Keynote 17 April 2013 • Markku Markkula • EU Committee of the Regions CoR, Rapporteur on Closing the Innovation Divide, Rapporteur on Horizon 2020, Chair EPP-CoR Task Force • on Europe 2020 Closing the Innovation Divide 1. CoR statements: What are the basic realities? • From “Triple Helix” to “RIE Regional Innovation Ecosystems”: How to address new innovative solutions on major societal challenges • CoR draft opinion focusing on mindset: What are the preconditions for necessary changes? • A Circular Economy – Re-using knowledge: How to develop regional innovation ecosystems to become laboratories for entrepreneurial discovery? • Smart cities and smart regions – need for deeper understanding the innovation: What are the processes and concepts for implementation? • Smart specialisation: What does that mean in practice? • We are facing the challenge: What are the different activities needed in organizing synergistic cooperation for the new programming period 2014-2020?

2. Committee of the Regions: Towards Smart Regions and Cities – What Are the Basic Obligatory Realities? There is a huge gap between the latest research knowledge and real life practice. What do we need to do to fill it? CoR has defined the following guidelines: Europe needs pioneering regions to be forerunners in implementing the EU2020 and through that to invent the desired future. Lifelong learning and the full use of ICT are cornerstones for this change of mindset towards entrepreneurship and innovation. We need the dynamic understanding of regional innovation ecosystems where public, private and third sector learn to operate together. Modernize Triple Helix. We need methodologies to mobilize public private partnerships and encourage especially people participations: user-driven open innovation & living labs. We need to speed up the change by scalability & implementation. Source: CoR Opinions 2011-2012

3. The Development Path of the Regional Innovation Ecosystem (RIE) Public support Development of National or Regional Innovation System Stage 3: Orchestration for global business Stage 2: Initiating transformation towards RIE Stage 1: Creating pre-conditions Source: Jukka Viitanen & Markku Markkula & Carlos Ripoll, article in the Knowledge Triangle book, 2013

4. The Development Path in More Detail • Stage 1 Regional pre-conditions: • Potential of existing regional/international innovation system (=audits) • 2. Willingness to utilise this potential (=active participation) • Stage 2 Creating the innovation hub: • 1. Joint R&D • 2. Joint innovation capacity • 3. Joint commercialization • 4. Joint platforms • Stage 3 Orchestrating RIE: • Mindset change • ImplementingKnowledge Triangle • Integrating innovation activities with research programs Source: Jukka Viitanen & Markku Markkula & Carlos Ripoll, article in the Knowledge Triangle book, 2013

5. How to Create Preconditions for Necessary Changes? • supporting the targets to be achieved on competitiveness and innovation by 2020, especially through continued investment in education and training; • stressing the importance of balancing technological, design and social innovation in both the public and private sectors, all of which are influenced by far-reaching digitisation; • striving for societal innovation, with living labs, testbeds and open innovation methods in regional innovation policy-making, while getting citizens on board; • highlighting the role of a local and regional environment that supports the integration of higher education, research and business; • implementing the Knowledge Triangle as a key principle in European university reform (greater synergies between research, education and innovation); • underlining the key role of research infrastructure in knowledge-based innovation systems; • focusing more on the active use of innovative public procurement, combined with simplification of procedures; • stressing the importance of Europe-wide collaboration and transnational cooperation projects between regions, building on innovation support and smart specialisation strategies; • highlighting the potential of cross-border cooperation, including inward investment to and outward investment from the EU; • improving competences for innovation and fostering a new innovation mind-set built on dialogue, collaboration and co-creativity to learn from best practice. CoR Draft Opinion “Closing the Innovation Divide”: Based on the request of the Irish EU Presidency, Rapporteur Markku Markkula

6. Closing the Innovation Divide  Action Points • In moving towards a circular economy for knowledge, national funding bodies like Tekes in Finland and Vinnova in Sweden could revisit and explore the results of projects completed during the last 5‑10 years, and unlock their treasures for reuse in new regional and national contexts. • Directorates-General in the Commission could do the same, making results accessible more broadly across different domains, in order to address societal challenges. University research could be made more directly relevant to policy-makers and project teams. CoR Draft Opinion “Closing the Innovation Divide”: Based on the request of the Irish EU Presidency, Rapporteur Markku Markkula

7. Applying Experiences from Industrial Systems  Interacting Learning & Research & Innovation Activities Three Steps to Understand the System: Identify Societal / Market Needs & define system requirements & barriers Integrate Fundamental Research & Innovation Knowledge into Enabling Technologies Develop Useful Insights from Fundamental Knowledge Professor Sir Mike Gregory, 13 Feb 2013 (E O’Sullivan: Adapted from NSF ERC Strategy Framework)

8. Closing the Innovation Divide  Action Points There are many research and innovation focus areas to support the drivers of change urgently needed during the 2014-2020 programming period. The CoR highlights the following ones as the success factors in inventing the future: • Innovation communities operate as ecosystems through systemic value networking in a world without borders. • Innovation processes are strongly based on demand and user orientation and customers as crucial players in innovations. • Innovation strategies focus on catalysing open innovation and encouraging individuals and communities towards an entrepreneurial mindset and effective use and creation of new digitalised services. CoR Draft Opinion “Closing the Innovation Divide”: Based on the request of the Irish EU Presidency, Rapporteur Markku Markkula

9. Work in Progress Globalisation  Need for Smart Specialisation Understanding the dynamics of global industries • Mapping and managing global value chains • Configuring production and supply • Understanding national industrial policies • ‘Making the right things in the right places’ Professor Sir Mike Gregory, 13 Feb 2013

10. Closing the Innovation Divide  Action Points • Regions and cities should create pioneering initiatives that are genuinely European in nature: multicultural, human-centred, focused on societal innovations and capabilities to create better structures for the welfare society and lay the groundwork for developing the digital single market. • Showcases for practical examples of successful initiatives should be created and made widely accessible, so other regions and cities can learn from the practical results and effective processes of past and on-going programmes. CoR Draft Opinion “Closing the Innovation Divide”: Based on the request of the Irish EU Presidency, Rapporteur Markku Markkula

11. Deeper Understanding of the Innovation  The focus on innovations has been on business models and technology. Now the cultural levers are the drivers of change. Incremental innovations Semi-radical innovations Radical innovations Picture: The three levers for the three types on innovation Markkula M & Pirttivaara M, (2013). Adding the Cultural Levers. Developed from Davila T, Epstein MJ and Shelton RD, (2013), Making Innovation Work, FT Press, New Jersey.

12. Closing the Innovation Divide  Action Points • The CoR stresses that smart specialisation is a regional policy framework for innovation-driven growth. What distinguishes smart specialisation from traditional industrial and innovation policies is mainly the process defined as “entrepreneurial discovery” - an interactive process in which market forces and the private sector discover and produce information about new activities and government assesses the outcomes and empowers those players most capable of realising the potential. Smart specialisation strategies are much more bottom-up than traditional industrial policies. CoR Draft Opinion “Closing the Innovation Divide”: Based on the request of the Irish EU Presidency, Rapporteur Markku Markkula

13. New Elements & Model for Research 3. early stage technology development 4. product development 2. concept/ invention 5. production/ marketing 1. research • Shared R&D&I programs between mutually committed: • Universities • Research Institutes • Industry • …. Proof of concept Proof of principle Demonstration Jos Leijten, 11 Feb 2013

14. Closing the Innovation Divide  Action Points • Europe must make major cultural changes and re-focus funding to ensure active application of the latest research knowledge at local and regional level. • The focused translation of research into practice requires good mutual understanding of what research there is, what issues there are, and how relevant research can impact local and regional issues. A new kind of knowledge triangle is needed for this, linking the world of research and science with the world of business and government through a kind of interactive translation service. CoR Draft Opinion “Closing the Innovation Divide”: Based on the request of the Irish EU Presidency, Rapporteur Markku Markkula

15. CoR Conference Plenary 10 April 2013 Conclusion Prof. Debackere, KU Leuven

16. Dynamic Interaction between University and Society NEW JOINT ARENAS for Co-creation Competence Development Scientific Knowledge Research Focus Areas as Drivers of Development Industry Research, Education and Innovation Society Lifelong Learners MINDSET CHANGE Markkula, M., Pirttivaara, M. & Miikki, L., 2009. Developed by using ideas of Lester & Sotarauta, Tekes report 2007 ”Innovation, Universities, and the Competitiveness of Regions”.

17. Closing the Innovation Divide  Action Points • The new innovation institutes focus on the new mind-set and environment required for user-centric design, co-creation and rapid piloting.  • These are flexible entities with a collaborative approach. Examples include: Incubators and Accelerators, Living Labs, Entrepreneurial Hubs, Development Labs, Social Innovation Labs, Fab Labs, Societal Innovation Learning Camps and Future Centers. They usually operate as associated entities of universities, municipalities and businesses. CoR Draft Opinion “Closing the Innovation Divide”: Based on the request of the Irish EU Presidency, Rapporteur Markku Markkula

18. Dynamic Interaction between University and Society Aalto Research, Education and Innovation Areas Society: Innovations and Well-being (Products, Processes, Services…) NEW JOINT ARENAS for Integration, Collaboration, and Co-creation; Access to Global Resources and Talent Inventingthe Future Other Impacts Aalto Factory Park Lifelong Learning Competence Development Mega-Endeavours Industry and other Organi-zations Aalto Living Labs Scientific Knowledge Aalto Research Focus Areas as Drivers of Development Learning by RDI Collaborative Knowledge Creation Competent People MINDSET CHANGE Aalto Values and Aalto Working Culture Development Processes Produces Knowledge Educates Other Impacts Faculty and other Staff Students Markkula, M., Pirttivaara, M. & Miikki, L., 2009. Developed by using ideas of Lester & Sotarauta, Tekes report 2007 ”Innovation, Universities, and the Competitiveness of Regions”.

19. The Frame for Implementing Knowledge Triangle (Synergy between Research, Education and Innovation) Source: Markku Markkula, article in the Knowledge Triangle book, 2013

20. Closing the Innovation Divide  Action Points • The CoR strongly supports the following proposal of the European Parliament’s ITRE Committee on the Horizon 2020 regulations: “Instruments for the connection between Research, Innovation and the Smart Specialisation Strategies shall be implemented both in Horizon 2020 and the Structural Funds in order to create objective indicators for the stairway of excellence and building the ERA”. CoR Draft Opinion “Closing the Innovation Divide”: Based on the request of the Irish EU Presidency, Rapporteur Markku Markkula

21. Regional Innovation Ecosystem Aalto University Campus 2020 Nokia Tapiola Garden City Young entrepreneurial mindset Rovio Aalto University Laurea EIT ICT Lab According to the plans, by 2020, there will be new investments of 4-5 billion €: metro, tunnel construction of ring road, other infra, housing, office and business buildings, public services, university buildings, sports and cultural facilities…

22. Aalto City Integrating Real and Virtual Worlds Aalto University campus with its surrounding business and residence areas is the innovation hub of the Helsinki Region. This picture is based on the Energizing Urban Ecosystems research program. The program with its € 20 million multidisciplinary research integrates new science, art and business developments to working  in a virtual environment. Regional Information Modeling is the breakthrough dimension in this research. 

23. Otaniemi based on Prof. Nonaka: Ba & Flow (our “Idea Space” developments)

24. Closing the Innovation Divide  Action Points • The CoR strongly believes that the process of defining “how”the many suggestions and recommendations in this Opinion can be realized in practice, and collaboratively exploring promising approaches for implementing them within and across regional boundaries, is the most effective way to turn excellent intentions into real results with powerful impact on the streets of Europe. This is key to closing the innovation divide. CoR Draft Opinion “Closing the Innovation Divide”: Based on the request of the Irish EU Presidency, Rapporteur Markku Markkula