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Country report: Finland

Introduction

This report has been written as a part of the Europe INNOVA Cluster Mapping Project. One part of the project is a mapping of cluster policies, cluster institutions and cluster programmes in European Countries.

For each country, a separate report has been written. Oxford Research AS in Nor-way has been responsible for the mapping of cluster policies. Oxford Research has developed the structure of the mapping and prepared the final reports. Most of the work has however been done by research institutes or consultancies in the different countries. These organisations are members of “The European Network for Social and Economic Research – ENSR” or partners in the Europe INNOVA Cluster Mapping Project.

Based on the national reports, the main findings have been summarised by Oxford Research in a separate report.

The Europe INNOVA Cluster Mapping Project has been financed by the European Commission. The views expressed in this report, as well as the information included in it, do however not necessarily reflect the opinion or position of the European Commission and in no way commits the institution.

Kristiansand, Norway, December 2007.

Harald Furre

Managing director

Oxford Research AS

Please find more information about the Cluster Mapping Project and the Authors of this report on:

www.clusterobservatory.eu

www.oxfordresearch.eu

www.ensr-net.com

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Report written by:

Satu Aaltonen,

SE Entre, Turku School of Economics, Finland.

E-mail: satu.aaltonen@tse.fi

Finance/ Economy

Science/ Research

Trade/ Industry

Interior Other Main ministries responsible for implementing cluster policy

x x x The National Technology Agency (TEKES), The Science and Technology Policy Council (STPC), The Finnish Innovation Fund (SITRA), Academy of Finland, Na-tional Research and Development Centre for Welfare and Health (STAKES), etc.

Key agencies responsible for implementing cluster policy

Is cluster policy their only task?

Yes No x

Are there any national cluster programmes?

Yes x No 2

Are there any regional cluster programmes?

Yes No x

Number of programmes

Source of financing National programmes Regional programmes National ministries X EU structural fund X Regional budget X Business X Other X

Low Medium High National level

Importance of cluster policy

Regional level Policy papers on national level Yes No

Increased impor-tance

Reduced importance Shifted Cluster policy over time

1990-95 1995-2000 2000-05 2005- Since when has cluster policy been used?

x Yes No x Individual Business org. Political party Agency

Cluster development related to a particu-lar person/organization?

Research inst. Successful cluster programmes The Centre of Expertice for Software Product Business 1999-2006,

TEKES, Technology Programme, Infra-Construction and Services 2001-2005

Yes No A general council exists Is there a cluster or competitive council? x

No/Low Medium Important Degree of obstacles when building cluster policy

General assessments of competitiveness? Yes No

Role of clusters as framework in policy areas Low Medium High Business network policy x FDI attraction policy x

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Export promotion policy x Sectoral industry policy x Science and education policy x Competition and marked integration x Source: Oxford Research

1. Terminology

In each country there will be one or possibly several terms or phrases used to de-scribe clusters. In some cases, different terms represent “competing” perspectives on clusters and, as perspectives change over time, one term may gradually replace an-other.

Some terms used to describe clusters in Finland are for instance: osaamiskeskus, osaamiskeskittymä, klusteri, osaamisklusteri, tietämyskeskus, alueellinen innovaatiopolitiikka, toimialaklusteri, teollinen klusteri. In English: Centre of Exper-tise, Cluster, Cluster of Expertise, Regional Innovation Policy. In Finland, the term ‘cluster’/’klusteri’ is used in Finnish language mostly in the same vein as in English. However, it is not always clear, whether ‘klusteri’ is a synonym for a sector of an industry and its services in an undefined geographic area (e.g. the whole Finland) or for a cluster which constitutes of organisations, which are part of the same value chain or network in a limited geographical area (region). The terms ‘teollinen klusteri’ / ’industrial cluster’ and ‘toimialaklusteri’ / ’sectoral cluster’ are also used (Virtanen & Hernesniemi 2005). The Centres of Expertise (CoE) Program uses the term ‘Competence Cluster’ in its new program season 2007-2013 to mean a nationally important network of local Centres of Expertise. For the regional clusters the term ‘osaamiskeskus’ / ’centre of expertise’ is used. E.g. the Competence Cluster in renewed CoE Programme is formed from businesses and public corporations bonded with each other, whose interplay produces clearly demonstrable benefits. The most important element in the cluster is network coop-eration. The Competence Cluster is formed from at least two centres of expertise situated in different regions, having complementary fields of expertise which can be defined on the basis of branch, technology, expertise or application. Clusters, how-ever, should not comprise entire branches of industry, but rather top-level expertise sub-areas of more functional clusters, or promising new sub-areas with development potential, with whose help centres can together develop the competitiveness and business activity of the whole cluster. In addition to technology-intensive fields, clus-

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ters may include other fields of expertise, for example, service industries or so-called creative industries. Four to seven centres of expertise make up the cluster structure, in which there is a separately specified coordinator. The coordinator is placed in one of the centres in the cluster and is responsible for mutually agreed tasks on a contrac-tual basis. The national coordinator of cluster is financed by Ministry of Trade and Industry while Ministry of Interior still, as in previous programming phases (1994-2006), co-finance (50 %) regional Centres of Expertise. In recent years the term of ‘innovation policy’ has become sort of chant in Finnish science policy. Along with that, the use of term ‘alueellinen innovaatiopolitiikka’ / ‘regional innovation policy’ became more widespread in the 2000’s. This term reflects the new regional orientation of Finnish innovation policy, which becomes manifested e.g. in the Centres of Expertise Programme and the trends of Finnish higher educa-tion policy in early 2000’s (Schienstock & Hämäläinen 2001). Whether regional inno-vation policy can be used as a synonym for the cluster policy, is however question-able. The same applies to the new programme called Strategic Centres for Science, Tech-nology and Innovation (CSTI) by the National Technology Agency (TEKES) and the Academy of Finland. The programme has been started in the autumn of 2006 (Tekes 2007). The term used for cluster in that program is ‘strategic centre’.

Source: Schienstock G. & Hämäläinen T. (2001) Transformation of the Finnish innovation system. A network approach. Sitra Reports series 7. Helsinki, Sitra. Tekes (2007) www.tekes.fi, read in 20th March, 2007. Virtanen E. & Hernesniemi H.(2005) Klusterin evoluutio. Prosessikuvaus. [Evolution of a Cluster. Process Description.] Teknologiakatsaus 174/2005. Helsinki, Tekes. In http://www.tekes.fi/julkaisut/Klusterin_evoluutio.pdf, read in 20th March, 2007.

2. Cluster development programmes and cluster organisations

In many countries, there are programmes set up specifically to promote cluster de-velopment. Such programmes can be carried out by existing actors (for example a government agency), or new actors can be set up to run them. Often, one of the purposes of such programmes is to help initiate cluster organisations, that is, the programme provides financing or otherwise promotes the formation of cluster-

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specific organisations, typically in some form of public-private partnership. A coun-try can have many (even hundreds) of such cluster-level organisations in operation.

The main actors in designing and implementing Finnish cluster policy are The Par-liament, the Cabinet, the Science and Technology Policy Council (STPC), the minis-tries, the Academy of Finland, the National Technology Agency (TEKES), sector specific research and development institutes and the Finnish Innovation Fund (SI-TRA). These actors set the ’grand’ lines of Finnish cluster policy, but e.g. in the CoE Programme the National Committee of the CoE Programme has the most important role in the policy setting of the programme. The ministries, STPC, TEKES etc. for-ward their goals through their representatives in the Committee. The Parliament and the Cabinet have the ability to create the framework in which the cluster policy may be executed. Those bodies have the legislative power and they also define annually, which amount of the state budget may be used in science and tech-nology policy, and how the ministry budgets are supposed to be allocated. The Science and Technology Policy Council was created in 1987 to continue the work of the Science Policy Council, which was originally founded in 1963. It is the highest-level policy and coordinating body in its field. The Council is appointed for three-year terms by the Government. The Prime Minister of Finland chairs the board of the council. Other members of the Council are the Minister of Trade and Indus-try, the Minister of Education, the Minister of Finance, four other ministers and 10 representatives from the Academy of Finland, the Finnish Funding Agency for Technology and Innovation, the universities, business and industry, and employees. The Government appoints the non-ministerial members for the term of the Parlia-ment. The main tasks of the Council include strategic development and coordination of Finnish science and technology policy as well as of the national innovation system as a whole. It directs and coordinates the science and technology policy, issues state-ments on the allocation of public science and technology funds to the various minis-tries and fields. Every three years it publishes a report defining the guidelines of the Finnish science, technology and innovation policy. Of the ministries, the Ministry of Trade and Industry, the Ministry of Education and the Ministry of Interior have the most influence on the cluster policy formulation and implementation in Finland. The Ministry of Trade and Industry steers Finnish

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technology policy and provides support for industrial research and development. The main instrument for the execution of this policy is TEKES, which is supervised by the Ministry of Trade and Industry. Approximately 30% of the public research budget is channelled through TEKES, equalling about 400 million euros. TEKES acts also as a catalyst for private R&D funding, since the involvement in the TEKES projects necessitates own financial involvement of the companies.

The cluster policy is also implemented through regional Employment and Economic Development Centres (TE-centres). Which provide several financial and consultancy services for companies and farmers of their area of operation. The services provided are from three different administrative sectors, namely the Ministry of Trade and Industry, the Ministry of Labour, and the Ministry of Agriculture and Forestry. There are 15 TE-centres in Finland. They were established in 1997. The Ministry of Education is responsible for the Finnish education system and also the basic research conducted in the institutions of higher learning and research insti-tutions. The main instrument for the execution of this policy is the Academy of Finland, which is supervised by the Ministry of Education. The Academy of Finland is the most important funding agency for basic research. Approximately 15 per cent of all Government research funding is channelled through Academy, equalling about 260 million euros. The Ministry of Interior has the main responsibility in developing Finnish regional policy and acting as a mediator between EU’s regional measures (Structural Funds) and Finnish regions. The Regional Development Act (602/2002) sets the guidelines, goals and division of responsibilities in implementing the regional development pol-icy. The national special programmes, which are pursuing these goals are the Re-gional Centre Programme, Rural Policy Programme, Centre of Expertise Programme and the Island Development Programme, of which the Centre of Expertise Pro-gramme aims most distinctively at developing regional industry clusters. Also other ministries implement the policy that can be called cluster policy. How-ever, their policy focus can be regarded more sector specific and the regional and networking aspect is often in a more minor role. But in case the cluster policy is de-fined that way that it includes national industry specific development activities, the Ministry of Social Affairs and Health, the Ministry of Agriculture and Forestry and the Ministry of Transport and Communications among others, act to improve the

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operational preconditions of both the private companies and the public organisations in their field. There are also a number of sector specific research and development institutes in Finland that contribute to the cluster development in this broader sense. Altogether there are 21 of them, the largest of them being Technical Research Centre of Finland (VTT), National Research and Development Centre for Welfare and Health (STAKES) and Agricultural Research Centre of Finland. National Research and Development Centre for Welfare and Health (STAKES) has a network of regional centres of excellence on social work since 2002, which include 8 regional centres. They aim at developing the cooperation and sharing of knowledge between the municipalities, the universities, the polytechnics and the third-sector social work organisations. The network seems to lack the perspective of entrepre-neurship; therefore it is not described here in more detail. The Finnish Innovation Fund (SITRA) is an independent public fund, which under the supervision of the Finnish Parliament, promotes the welfare of Finnish society. SITRA was founded in 1967. The Fund is pursuing equally both the economic growth and the well-being of Finnish citizens. Since 2006 there has been five pro-gramme areas: health care, food and nutrition, environment, Russia, and India. Through its projects SITRA strengthens the competitiveness of fields of industry chosen by it, like health care and environmental technology in this case. The methods of promoting their goals include research funding, experimental projects, business development and funding services, venture-capital investments and national strategy building activities. Source: Ahlbäck J. (2005) The Finnish National Innovation System. ERRIN European Re-gions Research and Innovation Network. Helsinki, University Press. European Region Research and Innovation Network (2007) in http://www.errin-brussels.org, read in 20th March, 2007. European Trent Chart on Innovation (2006). Annual Innovation Policy Trends and Appraisal Report. Finland. A publication from the Innovation/SMEs Programme in http://trendchart.cordis.lu/tc_country_list.cfm?ID=4, read in 20th March, 2007. Finnish Science and Technology Information Service in http://www.research.fi/en, read in 20th March.

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Ministry of Education (2007). The Science and Technology Policy Council of Finland. In http://www.minedu.fi/OPM/Tiede/tiede-_ja_teknologianeuvosto/?lang=en, read in 20th March, 2007. Ministry of the Interior (2007) in www.intermin.fi, read in 20th March, 2007. Regional Development Act (602/2002). Unofficial translation in http://www.finlex.fi/pdf/saadkaan/E0020602.PDF, read in 20th March, 2007. SITRA (2007) in www.sitra.fi, read in 20th March, 2007. STAKES (2007) Sosiaalialan osaamiskeskukset (Regional Centres of Expertise on Social Work) in http://varttua.stakes.fi/FI/Verkostoyhteistyo/sosket/osaamiskeskukset.htm, read in 20th March, 2007.VNS 3/2000vp. Valtioneuvoston selonteko aluehallinto 2000 -uudistuksen toteutumisesta [Council of State’s Report on Implementation of the Local administration 2000–reform]. http://www.intermin.fi/intermin/home.nsf/Pages/BD71F785B6E91D5702256A56000C46FE, read in 20th March, 2007. 2.1. Agencies for cluster policy implementation

In Finland there are 19 Regional Councils. Those are South Karelia, South Ostro-bothnia, Etelä-Savo, Häme, Itä-Uusimaa, Joint authority of Kainuu Region, Central Ostrobothnia, Central Finland, Kymenlaakso, Lapland, Tampere Region, Ostroboth-nia, North Karelia, Nothern Ostrobothnia, Northern Savo, Päijät-Häme, Satakunta, Uusimaa and South-West Finland. Councils are at the regional level main responsible of administration of special programmes (e.g. CoE Programme) and ERDF (Euro-pean Regional Development Fund). The Regional Councils are statutory joint municipal authorities. They operate as re-gional development and regional planning authorities and are thus the units in charge of regional planning and looking after regional interests. The operation of Regional Councils is based on the Regional Development Act. Their task is to draw up regional development programmes and reconcile them with the regional development measures of the regional administration authorities, to pre-sent objectives for the development of regional infra-structure, to develop the framework for business activity to generate new enterprises and new jobs within the region, to reinforce the regional economy in every possible way and to improve the occupational skills of the population. The Councils act together with the local gov-ernment, the State and the businesses and organisation in the region. The Regional

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Councils are also responsible for the land use planning at the regional level. The Regional Councils are mainly financed by the member municipalities. In addition to this the councils receive an annual grant of about 12 Meur primarily for the inde-pendent regional development of the business community, the so called regional development grant in the state budget. The organisation of the councils is tripartite. The highest decision making body is the assembly. The assembly is consisted of the representatives of the member munici-palities. The Assembly normally convenes twice a year. The executive and adminis-trative body of the Regional Council is the Board. The Boards convene at least once a month. The Office of the Regional Council assists the Board in its administrative tasks. The office is headed by a Regional Manager. The total number of the staff is approximately 600 – the biggest office having around 70 employees and the smallest 10. Source: Finnish Regional Councils (2007) in www.reg.fi, read in 20th March, 2007.

2.2. National cluster programmes

• Programme name:

Finnish Centre of Expertise (CoE) Program • Financing:

Council of State, through the Ministry of Interior and Finnish Regional Councils, and since 2007 also the Ministry of Trade and Industry.

• Source of programme financing:

In the programme period 1999-2006 the financing structure of projects was: enterprises 22%, Tekes (Finnish Funding Agency for Technology and Innovation)14%, EU’s Structural Fund Programmes 14%, EU’s framework pro grams for research 5%, municipalities 13%, Employment and Economic Development Centres (TE-Centres) 8% and the Council of State 6%, Ministry of Education 4% and other sources 14%. The financing comes also partly

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from ministries (Ministry of Interior, Ministry of Trade and Industry, Ministry of Education, Ministry of Labour, Ministry of Social Affairs and Health, Ministry of Agriculture and Forestry). (Kanninen et al. 2007, Tekel 2007a.)

• Budget:

The Council of State allocates around 11 Meur (2007) annually for the programme: 8,7 Meur for Centres of Expertise by Ministry of the Interior and 2,6 Meur for Cluster Coordination by Ministry of Trade and Industry. Because the funding of Centres of Expertise is a type of co-financed (50%), the total annual budget for basic funding of 21 Centres of Expertise is about 16 Meur. During 1999-2006 the total volume of the projects run in the programme was 578 Meur. Thus, only around 10% of the total budget comes from the Council of State and the rest from other sources. In the programme period 1999-2006 17% of the total funding was tendered R&D money. (Kanninen et al. 2007.)

• Time horizon:

Originally initiated in 1991, the first programme period 1994-1998, the second period 1999-2006 (first part 1999-2002, the second part 2003-2006) and the third season 2007–2013.

• Actor/Programme initiator:

Administrator of the regional policy of the Ministry of the Interior Mr. Anssi Paasivirta suggested launching the Centre of Expertise Programme in 1991 (Kanninen et al. 2007, Lemola 2006). Finnish Parliament passed a law in 1993, the Regional Development Act (Act no.1135/1993), which enabled the establishing of the CoE Programme in 1994. The Ministry of the Interior had the administrative authority of the programme.

• Carried out by:

Carried out by regional Centres of Expertise. In 1994 there were 8

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regional CoEs and 21 fields of expertise, 1995-1998 11 and 25 respectively, 1999-2002 the number of CoEs was 16 and fields of expertise 35, and after 2003 until the end of the second programme season in 2006 there were 18 regional Centres of Expertise and 4 national networked Centres of Expertise in 45 fields of excellence. The third programme seasons starts this year with 21 CoE, which constitute 13 Competence Clusters. The Government has nominated 13 nationally remarkable Competence Clusters which are carried out by 21 Centres of Expertise in 2007-2013. The Clusters are:

• HealthBio Cluster • Well-Being Cluster • Food Development Cluster • Future Energy Technologies • Ubiquitous Computing • Digital Content • Tourism and Experience Industry • Nanotechnology, Microsystems and Future Materials • Maritime Cluster • Intelligent Machines • Forest Industry Future • Housing Cluster • Environmental Technology Cluster.

• Actor formed for this purpose:

Usually the CoEs are situated in local technology centres or science parks. These organisations operate mainly as non profit bases. The science parks were estab-lished in the 90’s to act as mediators and coordinators of co-operation between local universities and companies (Neuvo 2006). Today there are 24 science parks in Finland, which provide e.g. premises, incubator, education and consulting ser-vices. (Tekel 2007b.)

The actors (CoEs) don’t have other tasks apart from this programme. However, the technology centres and science parks, which host the programs, have also other tasks. They provide e.g. incubator, education and consulting services, like-wise owning and leasing of offices.

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• Organisational set up at programme and project level:

The National Committee for the Centre of Expertise Programme monitors and coordinates the activities in different regions. In the committee there are repre-sentatives from the Ministry of Labour, the Ministry of Education, the Ministry of Trade and Industry, the Ministry of Agriculture and Forestry and the Ministry of Social Affairs and Health in addition to the representatives of the Ministry of Interior. It has also members from the fields of economy, research and educa-tion as well as professionals working in regional and local administration. Alto-gether the committee has 20 members and three permanent experts. The com-position of the committee mirrors the basic ideology of the programme (the tri-ple-helix model) – to create the platforms for the cooperation between economy (companies), science (organisations of higher education and research) and ad-ministration (the ministries and regional actors). In the programme season 2007-2013 there are two Secretary Generals – one from the Ministry of Trade and Industry, senior advisor Pirjo Kutinlahti, and the other from the Ministry of Interior, ministerial advisor Mika Pikkarainen. Mostly the Centres of Expertise are situated in regional science parks. The um-brella organisation of them, the Finnish Science Park Association (TEKEL), is responsible for the national development project, the objective of which is to promote the cooperation between different actors around the operations of the centres of expertise and to increase cooperation between different centres of ex-pertise. In last programme period (1999-2006) the most innovative project of the year was annually nominated among Centres of Expertise. This nomination en-abled the committee to pay attention to nationally important issues. On the regional level the Centres of Expertise can be regarded to constitute from the network of different regional actors (partner organisations, companies and the administrative bodies). The group of people who are responsible for the administrative duties, the staff of CoE is usually quite small. In addition to the science parks the administrative organisation can be also university, polytechnic or a non profit company, which is established specially for this purpose. There is usually also a local steering group and an expert body supporting the activities. In the year 2000 there were 463 members in executive groups and advisory boards, 700 members in expert bodies and 2172 companies and other organisa-

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tion (in total during 1994-2000) taking part in CoE activities. (Osaamiskeskuk-set… 2001.) In the season 1999-2006 there were 5100 companies annually taking part in the CoE activities (Kanninen et al 2007). The Competence Clusters in renewed CoE Programme are formed from busi-nesses and public corporations bonded with each other, whose interplay pro-duces clearly demonstrable benefits. The most important element in the cluster is network cooperation. The Competence Cluster is formed from at least two cen-tres of expertise situated in different regions, having complementary fields of ex-pertise which can be defined on the basis of branch, technology, expertise or ap-plication. Clusters, however, should not comprise entire branches of industry, but rather top-level expertise sub-areas of more functional clusters, or promising new sub-areas with development potential, with whose help centres can together develop the competitiveness and business activity of the whole cluster. In addition to technology-intensive fields, clusters may include other fields of expertise, for ex-ample, service industries or so-called creative industries. Four to seven centres of expertise make up the cluster structure, in which there is a separately specified coordinator. The tasks of the coordinators are to con-duct joint operative activities and projects, and networking both nationally and internationally. The coordination assures that the local and national activities are parallel and in interaction. It also increases the cooperation between industry and research organizations. The coordinator is placed in one of the centres in the cluster and is responsible for mutually agreed tasks on a contractual basis. The national coordinator of cluster is financed by Ministry of Trade and Industry while Ministry of Interior still, as in previous programming phases (1994-2006), co-finance (50 %) regional Centres of Expertise.

• Scope and target:

• Geographic coverage: The whole Finland through the regional centres and the network activities of those centres.

• Policy focus (please see the table at p. 17 from the OECD report in the end of this document and relate your comments to this)

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The policy focus of the CoE programme is simultaneously on regional, educa-tional and technology policy. The aim is to recognise nationally – and preferably also internationally – competitive sectors of industry which have the potential to evolve into internationally recognised clusters of top-level expertise. The pro-gramme aims for creating new products, services, companies and jobs related to this top-level expertise. That way the cluster could then stimulate the whole economy of the region. The top-level expertise is mostly synonym to the high-tech expertise. However, the CoEs have also been chosen from non-high-tech clusters, such as tourism and culture. The economy based on top-level expertise is pursued by bringing local actors, such as the universities, businesses, regional developers, business financiers and venture capital investors together and creating the structures of cooperation and knowledge transfer. Programme is activating specially the research and develop-ment operations of small and medium-sized companies and also the collabora-tion between large multinational companies and SMEs in their fields of expertise. On the national level it is regarded important to support both the specialisation and cooperation between different regions. However, in spite of the indisputable emphasis on regional development, the lagging regions are not favoured. In fact, the goal of creating top-level expertise based entrepreneurship naturally favours the large university towns and their top-expertise. • Cluster lifecycle targeted:

The measures are targeted in the clusters both in the embryonic and emerging stage

e.g. bio or ICT, and also in the more mature e.g. steel or wood clusters. The pro-

gramme is not aiming for recovering already declineing clusters, but rather for find-

ing new solutions for those areas which have been dependent on the declining indus-

tries.

• Programme contents:

Short description:

The centres of expertise launch cooperation projects (public-private) between the research sector, educational institutions and industry. These projects boost the com-petitiveness of companies, strengthen and improve regional expertise, create new

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businesses and promote the creation of new innovation environments.

Activities: The programme is designed to pool local, regional and national resources to the Exploitation of top-level expertise. The programme supports regional strengths and specialisation and furthers cooperation between the centres of expertise.

Ambitions/goals:

The aims of the programme are specified in the numbers of new knowledge intensive jobs, maintained jobs, new knowledge intensive businesses, new innovations and trainings. Also the quantity of nationally and internationally tendered funding is re-garded as an indicator of success.

Target group:

The programme is targeted to increase innovativeness and economic growth based on the high scientific know-how. Knowledge transfer in cooperative projects (be-tween SMEs, large companies and research community), trainings and spin-offs (based of innovations made in the research community) are tools for that. Thus, the target group is virtually the whole business, research and education sector. However, in practise the focus is rather on SMEs and embryonic and emerging businesses than large and well-established ones.

Level of R&D involvement:

In the Programme season 1999-2006 the CoEs were able to get and utilise 113 mil-lion euros of tendered R&D funding. That is approximately 1/5 of the whole volume of the projects. There was a significant variation in the share of tendered R&D funds within the CoEs - the largest being Oulu Region Centre of Expertise with 32 million euros and the smallest being Mikkeli Region Centre of Expertise without any.

The number of new innovations – products, services and procedures – was 3 768 in the Programme season 1999-2006.

Programme offers:

Individual Centres of Expertise and their stakeholders are responsible for designing

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the development measures they wish to use (so called bottom-up approach). What the national level offers, is the long term basic funding (see above), national guidance and ongoing evaluation, and a shared project data-base, which is used in monitoring the actions taken at regional level. At the level of CoEs training and project planning services are provided. Most of the science parks offer also incubator programmes, consultancy and financial guidance.

Cross-country/interregional activity:

The new programme season 2007-2013 is emphasising the co-operation between centres of expertise more than the earlier seasons. This will be realised by introduc-ing a new meaning for the word ‘Competence Cluster’. In the new programme sea-son the term ‘cluster’ is used to mean a nationally important network of local Cen-tres of Expertise. Every ‘cluster’ has a coordinator, which is responsible for coordi-nating the activities of CoEs, creating a platform for cooperation between the CoEs and outside organisations and other ‘clusters’ as well as other national and in-ternational actors of innovation policy. The coordinator also helps to set the shared aims, contents and activities within the ‘cluster’.

• Process:

There were two phases in the application process of the new programme period 2007 - 2013. The preliminary phase concentrated for the cluster ideas. The most innovative and value added clusters for the continued consideration were chosen. In the second phase the clusters and the centres of expertise for those clusters are chosen. The process is based on submission of proposals. The applications were evaluated and ranked by the National Committee for the Centre of Expertise Pro-gramme. The final decision of the chosen CoEs and Competence Clusters were made by the Council of State based on the report by the Ministry of the Interior and the Ministry of Trade and Industry.

Selection of clusters to support:

The both sides are included in selection process. The application process is more bottom-up type than top down. Regional actors together with companies create and design the applications. In the selection process the goals of national innova-tion policy and connections to other regional development activities play naturally

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an important role.

Main elements in applications if that is used: The applications need to convince the choosers on clear operational focus and the cooperation between the CoE within the cluster. The cluster needs to consist of at least two CoE from different regions. A proof of connections to the inter-national top excellence and the companies in the sector is needed. Also evidence of working cooperation between local actors, strategic long term plan, and the commitment of regional actors (also financial) is demanded. The clusters are expected to be already internationally of high excellence, nation-ally significant and innovative. The applications should mark the steps to the utilization of that know-how, to the growth and to the internationalization.

• Evaluation:

The Programme season 1999-2006 was evaluated twice, first in the mid-term of the programme season in 2003 (Huippuosaamisesta…2003) and then at the end in 2006 (Kanninen et al. 2007).

The evaluation of the Programme season 1999-2006 focused on three areas of interest: 1) implementation and impact of the CoE Programme, 2) significance and management of programme basic funding, and 3) regional best practices during the Programme Period. (Kanninen et al. 2007.) The conclusions of the evaluation were that the implementation of the pro-gramme has been successful both at the national and Centre of Expertise levels. Based on the project data reported by the Centres of Expertise themselves, the programme has influenced the creation of approximately 1 300 new enterprises and 13 000 jobs, and contributed to the retention of appr. 29 000 jobs in the sea-son 1999-2006. However, they remind that the reported impacts are not solely due to the measures of the programme. Number of people trained during the programme season was 91 000. The average number of enterprises involved in the operations annually was 5 100. (Kanninen et al. 2007.) The focus of CoE operations has shifted from regional networking toward more focused operations during the season 1999-2006. CoE operations have acted as a

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development project catalyst in spearhead fields and gathered fragmented devel-opment investments under broader entities. (Kanninen et al. 2007.) In the mid term evaluation the main problems were identified to be in the net-working and cooperation between CoEs, low level of internationalisation, insuf-ficient resources for monitoring and development work and unspecified division of work between CoE Programme and other instruments of regional develop-ment. (Huippuosaamisesta… 2003.) In the total evaluation (Kanninen et al. 2007) these problems were returned. It was stated that in the future more emphasis should be placed on the specialisa-tion and the cooperation among CoEs, in order to avoid overlapping of func-tions. The CoEs should also have a national role in serving operations in a cer-tain field of expertise. The division of work between the CoEs and other re-gional development agencies (such as TEKES and TE-Centres) should be more explicit. In the evaluation it was also recognised that there is often a gap between the formal objectives of the programme and the operations of the CoEs. That should be paid more attention to in the future. The shortage of internationalisa-tion had continued also in the last half of the season. (Kanninen et al. 2007.) • Planned future:

New programme season is now starting for the years 2007-2013, with a stronger emphasis on cooperation and specialisation between regions, networking, inter-national level of excellence and stronger connection to the national innovation policy. Also more horizontal cooperation between different industry sectors, as also between high-tech and other industries is highlighted. Focus will be more on growth entrepreneurship, SMEs, marketing, increasing business competencies and better exploitation of research results in the new pro-gramme season. Increasing internationalisation will be strived for. CoE Pro-gramme will be more closely connected to the new strategy of Tekes, the devel-opment of higher educational institutions and implementation of innovation pol-icy based on Lisbon strategy than before. New Centres of Expertise will be organised according to the new cluster-model. (See previous paragraphs.)

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Source: Act no.1135/1993, The Regional Development Act. Finlex database in http://www.finlex.fi/fi/laki/ajantasa/kumotut/1993/19931135 (in Finnish), read 20th March, 2007. Huippuosaamisesta alueille kilpailukykyä. Osaamiskeskusten väliarviointi 1999-2002. (2003) [Mid-term evaluation of the Centres of Expertise for the period 1999-2002] Sisäasiainministeriön julkaisu 4/2003. Helsinki, Ministry of the Interior. Kanninen S., Mikkonen R., Kuusisto J., Lemola T., Halme K., Viljamaa K. (2007) Osaamiskeskusohjelma 1999-2006. Loppuarviointi. [Evaluation of the Finnish Centre of Expertise Programme 1999-2006] Sisäasiainministeriön julkaisu 57/2006. Helsinki, Ministry of the Interior. Lemola T. (2006) Alueellisen innovaatiopolitiikan suunta. [The directions of regional innovation policy]. KTM julkaisuja 10/2006. Helsinki, Ministry of Trade and Indus-try. Neuvo Y. (2006) Osaamiskeskusohjelman konsepti 2007+ [The concept of the Cen-tres of Excellent Programme 2007+] PowerPoint presentation held in Innopoli 10th April, 2006. In www.intermin.fi/intermin/images.nsf/files/d4267b56e5b9cfdfc225714d004bc0ad/$file/neuvo100406.ppt, read in 20th March, 2007. Osaamiskeskukset aluekehitystyössä. [Centers of Excellence as a part of regional de-velopment activities] Tarkastuskertomus 13/2001. Helsinki, Valtiontalouden tarkas-tusvirasto. Pikkarainen M. (2006) Ohjelman hakumenettely ja valintakriteerit [The application process and the criterions for the selection for the Programme] PowerPoint presenta-tion held in Innopoli 10th April, 2006. In http://www.intermin.fi/intermin/images.nsf/files/723472009d2176abc225714d004bcf8b, read in 20th March, 2007. Tekel (2007a) http://www.tekel.fi/ohjelmat_verkostot/osaamiskeskusohjelma , read in 20th March, 2007. Tekel (2007b) http://www.tekel.fi/english/science_parks/ , read in 20th March, 2007.

2.2.2 National cluster programme

For each programme: • Programme name:

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TEKES Technology Programmes

• Financing:

TEKES, companies, universities, polytechnics and research institutes. The fund-ing of TEKES is decided in the State Budget annually. In 2006 the total budget was 495 million euros, 42% of that sum is spend in the technology programmes. The total budget includes about 20 million euros of EU structural funds, which are distributed by TEKES. (Tekes 2007.)

• Source of programme financing:

TEKES is financing about half of the costs of the projects and the coordination costs of the programme as a whole. Hence, in 2006 TEKES funding for pro-gramme activities was around 196 million euros. Little more than the half of the costs is covered by the investments of the companies, universities and research institutes. (Tekes 2007.)

• Budget:

In 2006 the total budget for the technology programs was 382 million euros. There were 23 technology programmes in motion in the end of 2006. Thus, the average magnitude of the programs was around 17 million euros. However, there is a great variation in the magnitude of the programmes (annual Tekes funding to the programmes varied between 0,3-27,3 million euros in 2006). • Time horizon:

TEKES Technology Programmes last usually 3-5 years. The first national Tech-nology Programmes were launched in 1984, a year after the foundation of TE-KES. There are simultaneously projects ending, starting and in motion.

• Actor:

• Programme initiator: TEKES was founded in 1983 and the technology programmes became one of their policy instruments already in 1984. It is not clear who or what body was the initiator. • Carried out by:

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TEKES is the key actor in these programmes, but the programmes are built mainly from the needs and viewpoints of the enterprises. Therefore, the partici-pation of the companies is regarded very important. Also the research institutes and universities play an important role, since their know-how is used as a fuel in these programmes.

Finnish Funding Agency for Technology and Innovation, TEKES is a key actor in Finnish technology and innovation policy. Apart from preparing, funding and coordinating of cluster specific technology programmes, TEKES provides funds for applied technical research and risk-carrying R&D ventures in industry. Fi-nancial services include both loans and grants. In 2006 the share of SMEs of the corporate R&D financing was 53%. (European Trent Chart… 2006, Tekes 2007.) There are 320 people working for TEKES. Alongside with the headquarters they have 14 regional departments at the regional employment and economic devel-opment centres (TE-centres) and six offices abroad. TEKES takes also actively part in designing the Finnish technology policy. (European Trent Chart… 2006, Tekes 2007.) Organisational set up at programme and project level:

Each technology programme has a person in charge and an operative team in TEKES, and possibly a programme manager from an outside organisation. The programme manager is mainly responsible of the practicalities. Each technology programme has an executive group, which is keeping the pro-gramme on course with the strategic guidelines made by the board of TEKES. The executive group also monitors the progress of the programme with the help of the annual plan of action. The members of executive group are chosen on the grounds of their know-how and work experience. They don’t act there as representatives of their organisa-tion or background groups, but as individuals.

• Scope and target:

• Geographic coverage: The whole Finland • Policy focus (please see the table at p. 17 from the OECD report in the end

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of this document and relate your comments to this)

The policy focus of TEKES Technology Programmes is mostly on both science & technology policy and industrial & enterprise policy. The focus is on develop-ing high-tech applications either within the firms involved in the projects or to be adapted by other firms. Also the commercialisation of the innovations and the spin-offs from the research is encouraged. In comparison to the CoE Pro-gramme high involvement of larger firms is eye-catching. • Cluster lifecycle targeted

No, there are technology programmes focused on both very old and established clusters and new, emerging clusters.

• Programme contents:

Short description: TEKES uses technology programmes to allocate its funding, networking and ex-pert services to areas that are considered important for Finnish economy and business life. They provide platforms for exchange of information and network-ing between companies and research communities. The technology programmes consist of joint research projects (of companies, universities and research insti-tutes), and services that support companies’ business operations, such as semi-nars, training programmes and international visits.

Activities Networking, cooperation, knowledge shearing, payback of the investments, abil-ity to commercialise the innovations. The results of the programmes are speci-fied in the numbers of patent applications, new products, new services, publica-tions, theses and new manufacturing processes.

Ambitions/goals

The main focus is usually in developing new technologies, applications or proce-dures for the use of companies in order to promote Finnish competitiveness in world economy. Implicitly the projects to the programmes are chosen based on the cost-benefit assessments between applications.

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Target group

The programmes are targeted both to the small and large companies and re-search institutions in the areas that are important to national business and soci-ety. Tekes launches programmes in areas of application and technology that are in line with the policies outlined in Tekes’ strategy. Focus on SMEs The share of TEKES’s R&D funding to the SME companies was over 50 % in 2005. Large firms are encouraged to network with SMEs within the projects. Level of R&D involvement High. Technology programmes are build around R&D goals and activities striv-ing for them. Programme offers

The programmes offer opportunities to networking and knowledge transfer through seminars and workshops. Also international networking is encouraged (e.g. excursions abroad). Training is organised within the programmes. The pro-grammes provide also arenas for publishing the results of the undertakings. Funding is an essential part of the programme structure. Tekes funding may be a low-interest loan or a grant, depending on the stage of the innovation and the nature of the proposed project. Financing can also be awarded to foreign entities registered in Finland. Foreign-owned companies with R&D activities in Finland are not required to have a Finnish partner to be eligible for funding. Cross-country/interregional activity

Usually all programme level activities are national. The very idea of the pro-grammes is to start up R&D projects among research institutes and industry around the country and then bring them together in seminars and other common activities.

• Process:

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TEKES plans the technology programmes in association with companies, uni-versities and interest groups. The planning is done in work groups and open seminars. The decision to start a programme is taken by the TEKES board. The projects to the programmes are chosen based on applications. Firms may apply for R&D funding from the programmes continuously. The universities and research institutes may apply funding for research projects normally once a year.

• Selection of clusters to support:

The process is mainly top down, even if, the process involves hearing the actors of cluster policy. The initiative and the final decision of the selection of the clus-ters to support is in the hands of TEKES. • Main elements in applications if that is used:

Companies are encouraged to propose project which include networking with other companies or cooperation with universities or other research organisations. Industry involvement is strongly encouraged from research projects of universi-ties, too. The more the applicant and the partners are investing themselves the better. Large companies are urged to work together with SMEs in the projects.

• Evaluation:

Every technology programme is evaluated at the end of the programme season by external experts, many also in mid-term. The experts are nominated by the impact analysis unit of TEKES. The evaluation provides information and under-standing on the dynamics of research and development practice and the factors contributing to its success or failure. One evaluation can cover several pro-grammes if they belong to the same field of technology, or cluster, or if they have similar goals, or some other common denominator.

Individual technology programmes are evaluated, but the technology pro-grammes as a policy instrument have not been evaluated. However, there is cur-rently a evaluation in Tekes underway (called Meta), which evaluates the tech-nology programme management activities.

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• Planned future:

There is no knowledge of radical changes in the structure or focus of Technol-ogy Programmes in near future. However, Tekes has listed its strategy focus ar-eas (clusters) and the promising sub-areas in those clusters. These can be used as indicators of the future plans in the cluster policy of Tekes. The promising areas are the following (TEKES, Clusters 2007): Information and communications cluster

mobile products and services telecommunication services content business software products information technology services instrumentation and automation components ICT solutions for health care

Metal cluster

renewing metal logistic solutions machines, equipment and services system suppliers knowledge intensive services

Forest cluster

sustainable processes future fibre products new solutions for media and packaging wood biomass utilization system concepts for wood products

Well-being cluster

health care technology pharmaceuticals and diagnostics functional foods framework for well-being

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well-being services Chemical and bio cluster

energy products solutions for forest cluster intelligent and functional materials environmental solutions health care solutions

Environmental cluster

environmental technologies and methods sustainable solutions, processes and services renewable energy solutions and services

Energy cluster

solutions and services for energy utilisation solutions for energy distribution renewable energy solutions and services other solutions for clean energy and climate change mitigation

Real estate and construction cluster value-networked construction process service models for renovation and maintenance integrated products and systems proactive facility management and ownership services and software

Food cluster

functional foods services food safety food chain management and cost-efficiency intelligent packaging

Source: European Trent Chart on Innovation (2006). Annual Innovation Policy Trends and Appraisal Report. Finland. A publication from the Innovation/SMEs Programme in http://trendchart.cordis.lu/tc_country_list.cfm?ID=4, read in 20th March, 2007.

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Tekes (2007) Clusters, promising areas in clusters in http://www.tekes.fi/eng/tekes/clusters.html, read in 20th March, 2007. Tekes (2007) Tekes vuosikertomus 2006 [Annual Report 2006].

Tuomaala E., Raak S., Kaukonen E., Laaksonen J., Nieminen M. & Berg P. (2001) Research and technology programme activities in Finland. Technology Review 106/2001. Helsinki, TEKES.

2.2.3 Regional cluster programme

There are no identified regional cluster programmes in Finland.

2.2.4 Competence Clusters of CeE Programme, their leaders and participating

CoEs:

• HealthBio Cluster – Mr Tom Palenius (Turku), tom.palenius@bioturku.com, CoEs: Turku, Kuopio, Oulu, Helsinki region, Tampere

• Well-Being Cluster - Ms Minna Hendolin (Kuopio), minna.hendolin@teknia.fi ja Pasi Sorvisto (Oulu), pasi.sorvisto@ouluinnovation.com, CoEs: Kuopio, Oulu, Helsinki region, Tampere

• Food Development Cluster - Mr Jukka Lähteenkorva (Seinäjoki), jukka.lahteenkorva@foodwest.fi, CoEs: Seinäjoki, Kuopio, Helsinki region, Turku

• Future Energy Technologies – Mr Kari Luoma (Vaasa), kari.luoma@merinova.fi, CoEs: Vaasa, Joensuu, Jyväskylä, Pori, Tampere

• Ubiquitous Computing – Mr Juha Miettinen (Tampere), juha.miettinen@hermia.fi, CoEs: Tampere, Jyväskylä, Oulu, Pori, Helsinki region

• Digital Content – Ms Irina Blomqvist (Helsinki region), irina.blomqvist@culminatum.fi, CoEs: Helsinki region, Hämeenlinna, Tampere, Kouvola

• Tourism and Experience Industry – Mr Petri Salmi (Rovaniemi), petri.salmi@elamystuotanto.org, CoEs: Rovaniemi, Helsinki region, Savonlinna, Turku

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• Nanotechnology, Microsystems and Future Materials – Mr Esko Peltonen (Jyväskylä), esko.peltonen@jsp.fi, CoEs: Jyväskylä, Joensuu, Kokkola, Mik-keli, Oulu, Helsinki region, Tampere

• Maritime Cluster – Mr Petteri Jernström (Turku), petteri.jernstrom@koneteknologiakeskus.fi, CoEs: Turku, Lappeenranta, Pori, Vaasa, Raahe

• Intelligent Machines – Mr Toni Sulameri (Tampere), toni.sulameri@hermia.fi, CoEs: Tampere, Hyvinkää, Hämeenlinna, Lappeenranta, Seinäjoki

• Forest Industry Future – Mr Timo Kärki (Lappeenranta), timo.karki@lut.fi, CoEs: Lappeenranta, Joensuu, Jyväskylä, Kajaani, Kokkola, Mikkeli, Turku

• Housing Cluster – Ms Raija-Leena Ahtola-Marks (Helsinki region) raija.ahtola@culminatum.fi, CoEs: Helsinki region, Joensuu, Hämeenlinna, Lahti

• Environmental Technology Cluster – Ms Mari Pantsar-Kallio (Lahti), mari.pantsar-kallio@lahtisbp.fi, CoEs: Lahti, Kuopio, Oulu, Helsinki region

3. Cluster organisations

3.1 Successful cluster programmes

In a country there may be one or a few cluster programmes which are considered to be particularly significant or successful and are often referred to when cluster policies are discussed.

In Finland two successful cluster programmes can be identified. Below is a short description in what ways they are successful and the reasons attributed to their suc-cess.

1. The Centre of Expertise for Software Product Business 1999-2006 carried out by Technopolis Ventures Ltd. – Innopoli.

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The know-how of the programme is based on the universities in Helsinki region, above all with the department of software and telecommunications technology at the University of Technology. The target groups of the programme are already existing Finnish software companies and research groups, which are developing innovations that are commercially competitive. The focus is on the promoting of the internation-alisation of the companies and the cooperation between research and industry. Small firms gain most of the Programme. They get a lot of new contacts to other firms, research groups and other important actors. The Programme constitutes a network, which makes it easy to get in touch of useful contacts. The services of the Centre of Expertise for Software Product Business include con-sultation services, designing the contents and financing of development projects, and the SWbusiness.fi –service. It is an online service, which provides centralised news, events, and research and company information related to software product. It has become an important meeting place and databank for software product companies. A total of 370 software product companies and 150 service providers have registered into the service. The Centre of Expertise participates in the Global Software business development programme that aims to find strategic partners, sponsors and customers for Finnish companies in the US markets. A professorship has been created in the field of software product business. A net-work of professors has been established, a graduate school has been started and the division of labour between research groups has been improved. A representative of the CoE is taking part in the work of incubator organisation of Technopolis Ventures. The CoE is mediating valuable information about the services and subsidies also to those enterprises which are not part of the business incubator units.

Source:

Centre of Expertise for Software Product Business (2007) in

http://www.uudenmaanosaamiskeskus.fi/ohjelmistotuoteliiketoiminta/, read in 20th March,

2007.

Osaamiskeskusohjelma 1999-2006. Loppuarviointi. [Evaluation of the Finnish Centre of

30

Expertise Programme 1999-2006] Sisäasiainministeriön julkaisu 57/2006. Helsinki, Ministry

of the Interior.

2. TEKES Technology Programme, Infra – Construction and Services 2001-2005 The programme had an objective of supporting the structural change of Finnish in-frastructure building and maintenance towards a market driven network of service providers. During the programme period an industry cluster of enterprises, government offices, and research institutions took shape. The Programme supported the change by pro-viding a platform of communication and hosting 112 research and development pro-jects with total volume of ca 32 million euros, of which TEKES financing was about one half. More than 150 companies together with several Finnish and foreign univer-sities and research centres were participating to the programme. “The projects produced significant results, e.g. in the field of new procurement mod-els and services for infrastructure construction, automation of machines and proc-esses, new measuring and monitoring technologies, innovative products, services, and equipment, and environmentally sound technologies.”

Source:

Infra – Construction and Services (2007) in

http://akseli.tekes.fi/opencms/opencms/OhjelmaPortaali/ohjelmat/Infra/en/etusivu.html,

read in 20th March, 2007.

Timonen J., Huuhka P. & Antikainen M. (2006) Hallinnonalasta klusteriksi. Infra – raken-

taminen ja palvelut 2001-2005 –ohjelman arviointi. [Evaluation of Infra – Construction and

Services –programme]. Teknologiaohjelmaraportti 18/2006. Helsinki, Tekes. In

http://www.tekes.fi/julkaisut/Infra_arvio.pdf, read in 20th March, 2007.

4. Cluster policy

Above the level of agencies and programmes is the policy level. On the policy level, plans and strategies are developed in the form of policy documents, directives and

31

legislation, rather than concrete programmes and organisations.

There may be one overarching policy for clusters, a “cluster policy”, outlining spe-cifically how cluster development should be pursued. In addition, clusters may form a framework in a long range of policy fields. Primarily, this is often the case in three key areas: innovation and technology policies, regional economic development pol-icy, and entrepreneurship/SME policy. However, it can also occur in many other policy areas.

4.1. Overarching cluster policy

In Finland there is not so much explicit policy talk about cluster policy. The most important policy measure in this respect is the Centre of Expertise Programme by the Ministry of the Interior and the Ministry of Trade and Industry Recently there has been discussion whether in Finland should establish a new national cluster agency (“Finclusters”) mainly for more efficient integrating of different regional clus-ter projects out side the Centre of Expertise Programme. The proposed agency would also co-ordinate international networking in cluster issues. The Centre of Expertise Programme concentrates on exploiting internationally top-level expertise on the basis of regional strengths. The programme brings the actors in the regions in the selected 13 competence clusters into broad cooperation in order to implement strategic development programmes (2007-2013). Connection to national innovation policies is reinforced and attention is especially drawn to co-operation and division of labour between Competence Clusters of CoE Programme (bottom up policy) and the Science and Technology Policy Council’s Strategic Centres for Science, Technology and Innovation (CSTI) (top-down policy). In line with the gov-ernment’s decision a broader role is now intended for the Ministry of Trade and In-dustry in the new Centre of Expertise Programme. The Council of State approved a new national cluster oriented Centre of Expertise Programme for 2007-2013 and the implementation procedure in 7.12.2006. Source: Ministerial advisor Mika Pikkarainen, Ministry of Interior

Any published policy papers on national level/public and/or official studies

and reports

Cluster policy is not mentioned as such in the national science, technology and inno-

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vation strategy, but it is implied in it. The strategy announces that one of the central challenges of the innovation activities is the developing of national, regional and local cooperation and making the regional and national innovation strategies parallel. National R&D financing will be more focused. The starting Strategic Centres for Science, Technology and Innovation (CSTI) Programme is designed to execute this strategy. TEKES is launching a new Tekes Strategic Centres for Science, Technology and Innovation (CSTI) Programme this year. In these centres companies, universities and research institutes will agree on joint research plan. Aim is to develop new prac-tical applications to the needs of the companies within next 5-10 years. CSTI will provide “a new way of coordinating dispersed research resources” to meet the targets of Finnish business and society. The centres will be established on the following ar-eas: energy and environment, metal products and mechanical engineering, forest clus-ter, health and well-being, information and communication industry and services. Source:

Tiede, teknologia, innovaatiot (2006) [Science, technology, innovations] Science and Tech-

nology Council of Finland in http://www.minedu.fi/OPM/Tiede/tiede-

_ja_teknologianeuvosto/julkaisut/?lang=fi, read in 20th March, 2007.

TEKES (2007) in www.tekes.fi, read in 20th March, 2007

The main aim of the state in the design of any cluster policy

The cluster policy is simultaneously focusing both the old established clusters (wood, steel, and engineering) and the potential new clusters (e.g. biotechnologies and ICT). Source:

Tiede, teknologia, innovaatiot (2006) [Science, technology, innovations] Science and Tech-

nology Council of Finland in http://www.minedu.fi/OPM/Tiede/tiede-

_ja_teknologianeuvosto/julkaisut/?lang=fi, read in 20th March, 2007.

Tekes (2007) Finnish innovation policy in http://www.tekes.fi/eng/innovation/policy/,

read in 20th March, 2007.

Finnish cluster policy

All in all, Finnish science and technology policy is rather young as an independent

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national policy segment. It has not been independently enforced until from the end of 1960’s. The first era of Finnish science and technology policy (from the end of 60’s to the end of 70’s) can be called the building-era. (Tarkiainen 2005, 20.) During the second phase in the 80’s the policy was mostly technology driven and concentrated on building up the Finnish Funding Agency for Technology and Inno-vation (TEKES) and other structures of policy implementation. (Tarkiainen 2005, 20.) Today we live the era of national innovation system, which has been implemented from the 90’s on. The emphasis of the policy is on the creating and assuring the pre-requisites for innovations. The main focuses for doing this are the securing of the knowledge creation and utilisation processes and structures, paying more attention to R&D and education, creating a more innovation and technology friendly atmosphere and reaching for internationalisation and the more comprehensive understanding of global economic changes. (Tarkiainen 2005, 20-23.) Deep depression in the early 1990’s, preparation for the EU membership and the Regional Development Act in 1993, which specified the administration structures for the distribution of EU’s regional funds and reorganised the division of labour be-tween regional actors, were all part of the policy trend which gave more weight on the regions. The foundation of regional Employment and Economic Development Centres (TE-centres) in 1997 was part of this continuum (Schienstock 2006). All these changes were in line with the so called subsidiarity principle, which guided the EU policy at the time. The Centres of Expertise Programme was a science and indus-trial policy measure which was well in line with those larger policy trends. The strong emphasis on the innovation policy in the Finnish Science and technology policy has its roots in the guidelines set by OECD. The Lisbon Strategy sort of guided European R&D policy to the tracks already directed by Finland. (Lemola 2006.) At the time the most important practical issues on the agenda were the aim to grow the national R&D budget to the same level as in other industrial countries and to strengthen regional policies. The Finnish Centre of Expertise Program also kind of crystallized all of these aims. The newest ‘trend’ in innovation policy seems to be moving more towards national focus away from strong regional emphasis. The vast number of regional projects

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seems to include a lot of overlapping and lack of cooperation and knowledge trans-fer. The new structure of the Centre of Expertise Programme is in line with this trend. Intensified use of local resources, stronger centres and well designed coopera-tion and specialisation between them is wanted. (Lemola 2006.) Source:

Lemola T. (2006) Alueellisen innovaatiopolitiikan suunta. [Direction of the regional innova-

tion policy] KTM julkaisuja 10/2006. Helsinki, Ministry of Trade and Industry.

Schienstock G. & Hämäläinen T. (2001) Transformation of the Finnish innovation system. A

network approach. Sitra Reports series 7. Helsinki, Sitra.

Tarkiainen A. (2005) Avaimia ja lukkoja vertailemassa – hyvinvointiklusterista uusi ovi

innovaatiopolitiikkaan. [Comparing Keys and Locks – Will Welfare Cluster become a New

Door to Innovation Policy?] KTM Rahoitetut tutkimukset 12/2005, Teknologiaosasto.

Helsinki, Ministry of Trade and Industry.

4.2. Clusters as framework in policy areas

Finnish innovation and technology policy is largely described already in the earlier sections, because cluster, innovation and technology, science and industry policies are all deeply interconnected. It is also hard to describe the role of clusters in these three key policy areas separately, since even if the term cluster is not used in all occasions, it is deeply rooted in both the innovation and regional policy. Innovation and technology policy is mainly implemented in the regional level by the Employment and Economic Development Centres (TE-Centres), universities, poly-technics and science parks. There are 15 TE-centres in Finland. They provide several financial and consultancy services for companies and farmers. The services provided are from three different administrative sectors, namely the Ministry of Trade and Industry, the Ministry of Labour, and the Ministry of Agricul-ture and Forestry. In every TE-Centre there are also representatives of Tekes, who promote the technology and innovation policy in the region. The regional impacts of universities and polytechnics have been paid increasing at-tention since the beginning of the century. Since 2002 the regional development

35

plans have been used in the university funding negotiations. The amendment to the Universities Act was made in 2004, which highlights the interaction of the universi-ties with the surrounding society and their obligation to promote the societal impact of research findings – the so called third mission of universities. (Universities Act, Korkeakoulujen (2001)) The most recent regional strategy for education and research (up to 2013) was released in 2004 by the Ministry of Education (Regional… 2004). The science parks were established in the 90’s to act as intermediates and coordinator of co-operation between local universities and companies. Today there are 24 science parks in Finland, which provide e.g. premises, incubator, education and consulting services. They are regional actors and as such they are able to further the building of new innovation based clusters and recognise the regional strengths. Centres of Ex-pertise of the CoE Programme are mostly situated in the science parks. In addition, the science parks have cluster programs of their own (such as ICT Turku, in Turku Science Park). Source:

Employment and Economic Development Centres (2007) in www.te-keskus.fi, read in 20th

March, 2007.

Korkeakoulujen alueellisen kehittämisen työryhmän muistio 28:2001.[Memorandum of re-

gional development of the institutions of higher learning] Ministry of Education.

Regional strategy for education and research up to 2013. (2004) Publications of the Ministry

of Education in Finland 2004:11 in http://www.minedu.fi/OPM/Julkaisut/2003/koulutus-

_ja_tiedepolitiikan_aluestrategia_vuoteen_2013?lang=fi, read in 15th April, 2007.

Universities Act, in Finlex

http://www.finlex.fi/en/laki/kaannokset/aakkos.php?lang=en&letter=U, read in 20th

March, 2007.

Tekel (2007) in www.tekel.fi, read in 20th March, 2007.

Regional economic development policy

Regional economic development policy is implemented by the municipalities and the Regional Councils. In Finland there are 416 municipalities, which constitute 19 Re-gional Councils. The regional economic development activities are based on the goals of finding the special fields of know-how and striving for the competitive edge by regional specialisation. In the Centre of Expertise Programme Regional Councils are connected to national innovation policy during the application process.

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Source:

Centre of Expertise Programme (2007) in www.oske.net, read in 20th March 2007.

Regional Councils (2007) in www.reg.fi, read in 20th March, 2007.

Entreprenurship and SME policy

Regional Employment and Economic Development Centres (TE-Centres) are the executors the entrepreneurship and SME policy at regional level. They provide help in all phases of the business life cycle, above all in starting a business, developing it and in the internationalisation. The TE-Centres provide consultancy in starting, reg-istration, running and exiting the business, services of National Board of Patents and Registration of Finland, trainings and financing. Financing for SMEs is also provided by Finnvera, which is a State owned organisation, which has 16 regional offices. Finnvera is also Finland’s official Export Credit Agency (ECA). The activities of TE-Centres and Finnvera are not explicitly cluster oriented. The Ministry of Trade and Industry has developed a service concept Enterprise Finland (Yritys-Suomi)(www.enterprisefinland.fi and www.yrityssuomi.fi) which pro-vides services to new enterprises, growing ones and the businesses aiming at interna-tional markets. The service consists of networks of other relevant actors such as Finnvera, Finnpro etc. The services can be obtained at regional TE-Centres and in the Internet. The cluster policy and SME policy mostly interconnected in the incubator activities that the science parks host. The incubator units can be sector specified (e.g. in Turku bio and ict sector). Hence, they are part of the regional cluster strategy. Source:

Employment and Economic Development Centres (2007) in www.te-keskus.fi, read in 20th

March, 2007.

Finnvera (2007) in www.finnvera.fi, read in 20th March, 2007.

Turku Science Park (2007) in www.turkusciencepark.fi, read in 20th March, 2007

FDI attraction policy Regional clusters will be used as spearheads for marketing and different action taken

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at local level (CoE Programme). Source: Ministerial advisor Mika Pikkarainen, Ministry of Interior

Export promotion policy

National Competence Clusters will have own internationalisation strategies for com-panies (CoE Programme). Source: Ministerial advisor Mika Pikkarainen, Ministry of Interior

Science and education policy

Depending on Competence Cluster training and education can be critical for their future (CoE Programme) Source: Ministerial advisor Mika Pikkarainen, Ministry of Interior

5. Cluster or competitiveness councils

In some countries, councils have been set up to promote a dialogue about clusters and competitiveness. Often, these councils have representatives from the govern-ment sector as well as from the academic world and the business community.

There is not any specific council or other organisation promoting a dialogue about clusters and competitiveness in Finland. However, Science and Technology Policy Council (STPC) is also looking after the competitiveness aspects of cluster forma-tion. Finnish Competition Authority is a general organisation, which operates under the Ministry of Trade and Industry. It was founded in 1998.Its objective is to protect sound and effective economic competition and to increase economic efficiency by promoting competition and abolishing competition restraints. There are no docu-ments about the impact of the Finnish Competition Authority on national cluster policy.

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Source: Finnish Competition Authority (2007) in www.kilpailuvirasto.fi, read in 20th March, 2007.

Science and Technology Policy Council in http://www.minedu.fi/OPM/Tiede/tiede-

_ja_teknologianeuvosto/index.html?lang=en, read in 20th March.

6. Other policy issues

Later on in this project, we will take a further look at cluster-related issues in each country. It would be useful to know about any other issues that have an impact on clusters in your country. Such issues could be, for example, any macro economic policies that may be relevant for clusters (tax regimes, etc), or if any general evalua-tion has been made about the country’s competitiveness and barriers to competitive-ness.

6.1 Main obstacles to the process of building cluster policy

An expert group of Finnish innovation policy actors have pointed out two black spots in creating a trans-national cluster programme (Christensen et al. 2007). Those are “a lack of understanding and acceptance of the benefits to trans-national net-working/clustering activities” and difficulties “to plan (in order to ensure a ‘win-win’ situation); national programmes take up to a year to plan – trans-national pro-grammes would likely take longer”.

Source:

Christensen L., Vogelmann H. & Hansson E.W. (2007) Mapping of National Cluster Policies

and Programmes in the Baltic Sea Region. Part II. Unpublished manuscript of Mapping of

Cluster Policies and Programmes, BSR InnoNet.

6.2 Any general assessment of competitiveness or barriers to competitiveness

in Finland

The Science and Technology Policy Council have listed some national weaknesses of Finnish innovation policy. Those are among others strong dependence of global economy, long distances of markets, low level of internationalisation, small volumes in every sector of innovation policy due to small population, lack of high-tech in-

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vestments, deficiencies in marketing and business competencies, small number of spin-offs from the universities and lack of venture capital. Source: Tiede, teknologia, innovaatiot (2006) [Science, technology, innovations] Science and

Technology Council of Finland in http://www.minedu.fi/OPM/Tiede/tiede-

_ja_teknologianeuvosto/julkaisut/?lang=fi, read in 20th March, 2007.

6.3 Other remarks

The term of clusters and cluster policy has been used very vaguely. In some occa-sions the clusters are more or less a synonym to the industrial sectors in a national level. In the study of Sakari Luukkainen (2001) the Finnish industrial clusters are identified by a quantitative value chain analysis. Five clusters are identified: food-stuffs, ICT, metal, construction, forest. In other occasions the regional aspects of clusters are emphasised more. More prob-lematic the situation becomes, when cluster development is discussed. Then also the activities that aim at building clusters are included. In the Regional innovation policy –seminar (26th Sep., 2000) Mr Kimmo Halme from Science and Technology Policy Council outlined cluster policy from three overlap-ping standpoints: from technology and knowledge perspective, from product and industry sector perspective and from the perspective of regionally strong clusters. (Alueellinen…2000) Therefore, all Technology Programmes of TEKES were included in this description. They are built in accordance to the triple-helix model and they definitely do their bit in creating new clusters or intensifying already established ones. Nonetheless, also other definitions have been used. In ‘Research and technology programme activities in Finland’ -report (Tuomaala et al. 2001) only those programmes are regarded as national cluster programmes, which are based on the additional funding programme prepared by the Science and Technology Policy Council and approved by the Finnish Government in 1996. They were mostly concentrated on the development of a spe-cific industrial sector, they involved several sectors of Finnish society, joint funding and were coordinated by the ministries. They had to have a more limited regional focus. It can be argued that within ten years time all Technology Programmes have become more like those cluster programme at that time. The regional emphasis is still missing in many of them, thou.

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Source:

Alueellinen innovaatiopolitiikka Suomessa –seminaari (2000) [Regional Innovation Policy in

Finland –seminar] in http://www.uta.fi/laitokset/tyoelama/hankkeet/MikaAIS.htm, read

20th March, 2007.

Luukainen S. (2001) Industrial Clusters in the Finnish Economy – Strategies and Policy Im-

plications. Ministry of Trade and Industry, Studies and Reports 7/2001. Helsinki, Ministry of

Trade and Industry Finland

TEKES (2007) www.tekes.fi, read in 20th March, 2007.

Tuomaala E., Raak S., Kaukonen E., Laaksonen J., Nieminen M. & Berg P. (2001) Research

and technology programme activities in Finland. Technology Review 106/2001. Helsinki,

TEKES.

6.4 Policy trends

Policy trends

Policy Stream Old Approach New Approach Cluster Programme Focus

Regional

policy

Redistribution from

leading to lagging

regions

Building competi-

tive regions by

bringing local

actors and assets

together

Target or often include lagging regions

Focus on smaller firms as opposed to

larger firms, if not explicitly than de facto

Broad approach to sector and innovation

targets

Emphasis on engagement of actors

Science and

technology

policy

Financing of indi-

vidual,

single sector pro-

jects

in basic research

Financing of

collaborative

research involving

networks with

industry and links

with commerciali-

sation

Usually high technology focus

Both take advantage of and reinforce the

spatial impacts of R&D investment

Promote collaborative R&D instruments

to support commercialisation

Include both large and small firms; can

emphasise support for spin-off start ups

Industrial and Subsidies to firms; Supporting com- Programmes often adopt one of the

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Policy trends

Policy Stream Old Approach New Approach Cluster Programme Focus

enterprise

policy

national champions mon needs of

firm groups and

technology ab-

sorption (espe-

cially SMEs)

following approaches:

Target the "drivers" of national growth

Support industries undergoing transition

and thus shedding jobs

Help small firms overcome obstacles to

technology absorption and growth

Create competitive advantages to attract

inward investment and brand for exports

Source: OECDA review of national cluster policies: why are they popular, again?, June 2006