Micro clusters and looking to the future

1. Micro clusters and looking to the future Jukka Teräs, Norrum Oy, Finland RIBS Final Conference, Nairn, Scotland February 27, 2013

2. Contents Part 1: Non-metropolitan regions, innovations, micro clusters Part 2: Review on RIBS and reflections/thoughts on future - how to capitalize on the RIBS experience -  the possible future co-operation

3. RuralInnovation and Business Systems • ”Rural Innovation and Business Systems (RIBS) project will specifically help SMEs in rural regions of Ireland, Scotland, Iceland, Sweden and Finland to address the effects of the economic downturn and strengthen their competitiveness and growth potential.” • ”RIBS will develop Business Growth Programmes (RIBS products) in: SME Growth, SME Internationalisation, Entrepreneurship, and Rural Clustering.”

4. What is a cluster? • “Clusters are geographic concentrations of interconnected companies and institutions in a particular field.” (Porter 1998) • ”Consider a garden in Vancouver. The soil is the university environment, the seeds of ideas germinate in the soil there, watered by funding from the federal granting councils. The plants grow, fertilized by funding from venture capitalists…few of the flowers live long enough to mature, go to seed , and generate new plants; most are picked while they are still blooming and carried off by passersby – large multinational companies, who want to have the flowers in their homes. ” (Vancouver Biotech cluster, Wolfe & Lucas 2004)

5. Ourchallenge: rural/peripheralregions and innovationbarriers(Tödtling & Trippl 2005)

6. The challenge in rural/peripheralregions: how to fill in and/orcompensate for the missingclusterelements(Sölvell 2009) TCI Jyväskylä 2009 Jukka Teräs

7. Innovations: Morefrequent in cities ? • Large cities and metropolitan regions hold key positions in the emerging knowledge economy (Cooke et al. 2007). Yes, BUT: There are numerous examples of smaller, non-metropolitan regions that have been capable of building up and sustaining industrial and service concentrations. • A study of 159 local industrial clusters in 31 countries (Brenner & Muhlig 2012): ” Urbanization is less important for high-technology industries. This somehow contradicts the usual belief that high-technology industries are strongly based on innovations and that innovations are more frequent with cities because of the knowledge spillovers” • Geography of Finnish innovations (VTT 2009): ”Currently, innovations are being created in all regions in Finland. The more complex innovations are more likely to be developed in large cities. However, the central role of customer co-operation in developing innovations is repeating relatively evenly both in urban companies and in rural companies.”

8. Micro clusters: cansmall-scale clusters provide an effective means to establish a competitive advantage? • Practicallyallclustersaremicroclusters in the verybeginning (e.g. ArgeplogCarTesting Cluster in North Sweden: firstvisits of Bosch engineers to Arjeplogregion, contacts with localbusinessmen, Arjeplog Ice Track in early 1970s) • Needs for critical mass depend in part on willingness of companies to cooperate. The greater the willingness to cooperate, to intentionally pursue economies of scale, the smaller the numbers of firms needed to have “critical mass.” (Regional Technology Strategies 2009) • Some key success factors: “our way” of doing things instead of not only copying from others, distinctiveness, 1-2 primus motors, persistence, pride • “Even though companies, like individuals, take monetary gains into account in their business decisions, they rarely choose paths that exclusively maximize their financial gains. Attitudes and values also shape decisions.” (RTS 2009). Valid for any cluster environments - but especially for micro clusters. • RIBS project has identified several viable micro clusters and cluster initiatives (e.g. Iceland)

9. Review on RIBS and reflections/thoughts on future - how to capitalize on the RIBS experience - the possible future co-operation

10. How to capitalize on the RIBS experience • Whatarewegoing to donext is stronglyconnected to whatwearegoing to deliver to ourkeyinterestgroups: NPP, companies, ourhostorganizations • Wehavemetthe requirements of RIBS workpackages: SME Growth, SME Internationalisation, Entrepreneurship, and RuralClustering. Areweable to (further) developtools/products out of WPs, to beutilized in future– especially in ourregions? • Whatare the nextsteps: a tailor-made programme for the core RIBS companies- based on the company replies? How to act as ”personaltrainers” for the selectedcompanies? How to broadenup the currentselection of companies? • How dowemaximize the results of ourinterregional RIBS efforts? How to continuejointlearningand benchmarking?

11. Long-term vision: NorthernPeriphery is becomingmore and morelucrative • Fourmajorforcesshaping the world: climatechange, populationgrowth, the globalization of the economy, and the demand of naturalresources • The livingconditions in the currentlywarmparts of the earthturnworsewhereas the northernlatitudesbecomemorelucrative • The growingpopulationneedsmore and morecleanwater, food and naturalresources ( Smith L. 2011: ForcesshapingNorthernfuture and the New North in 2050)

12. EU 2014-2020: Anything for us?

13. FutureCohesionPolicy(Landabaso 2012)

14. Concentration of ERDF funds(Landabaso 2012)

15. EU and SmartSpecialization(Williams 2012; http://s3platform.jrc.ec.europa.eu)

16. SmartSpecialization(Landabaso 2012)

17. How to profileyourregion(Williams 2012)

18. Lapland is spiritually, geographically and in its actions above ordinary. Creative madness Rich in nature Positive originality, which is contagious. Everyone is uniquely individual. Lapland is rich in nature. People living in the towns or countryside feel close to the nature - it feels like a second home for many. Arctic magic Consider it done! Open and Arctic In Lapland there is a strange kind of magic that cannot be described in words alone. It can only be experienced. In Lapland brisk bold ideas and expertise go hand in hand, in an international yet local environment. Lapland is an international meeting point without borders. This has created a culture of transparency. The very best Arctic region.

19. NPP programme 2014-2020 is likely to includeArcticcooperation NPP Evaluation 2012

20. NPP Programme 2014-2020: Preparatory Project Call 2013 now open • The Northern Periphery Programme 2007-2013 Monitoring Committee would like to invite preparatory project applications that have a view to developing a main project application for a INTERREG VB Northern Periphery Programme through a preparatory project call. • Preparatory project applications are encouraged that have a view to developing a main project application for the future programme, based on INTERREG IVB themes and addressing emerging themes for post-2013, following the principles of the EU2020 Strategy: Smart, Sustainable and Inclusive growth. The Programme welcomes project partners from the NPP area and the adjacent regions of Russia and Canada. • The maximum total budget for these preparatory project applications is 45 000 EUR with a maximum grant of 27 000 EUR (60% intervention rate). • All approved preparatory projects can run up to 9 months. They are expected to start 1st July 2013 and end no later than 31st March 2014. • Mandatory attendance at specific events is required. • OPENING OF CALL: 21st January 2013, APPLICATION DEADLINE: 12th April 2013, DECISION DATE: 18th June 2013 www.northernperiphery.eu

21. Finalremarks • The transnational network of RIBS experts from Scotland, Ireland, Iceland, Sweden, and Finland has been successful in several areas: sharing of information, good practices, joint learning, and trust • For most of the companies, the NPP region is not sufficient as a market. However, NPP region could serve as pilot or demonstration environment and as a ”living lab” • A new NPP programme, based on the RIBS experience and potentially including e.g. Arctic dimension and possibilities to co-operate with Canada and/or Russia, is an alternative worth consideration.