the role of innovation policies in regional …100 - 134 (10) 90 - 100 (13) 80 - 90 (23) 70 - 80...

The role of innovation policies in regional development – the Finnish case

Innovations generate regional vitalityKnowledge, specialisation and networking determine succes in

international competition

Dr Veli-Pekka SaarnivaaraDirector General

Tekes, the National Technology Agency of Finland

DM 9131904-2004 Copyright © Tekes

Preconditions for the success of regions in Finland

l Success of a region depends on the success of its companies in global markets

l Companies’ success on global markets requires internationally competitive technology and know-how

l Developing internationally competitive technology and know-how requires focusing and centralisation

l Effective networking and co-operation is essential for two reasons:l Technology in-sourcing: access to multiple technologies

from several sources is usually necessaryl Individual companies can also prosper outside the centres if

they can access the knowledge and know-how they need through networking

#88582

Competitiveness by region

Index of competitivenessWhole country = 100

100 - 134 (10)90 - 100 (13)80 - 90 (23)70 - 80 (20)59 - 70 (19)

Competitiveness clearly correlatesearnings growth, growth inemployment, net migration andeconomic development.

A large part of the competitivenessis explained by human capital,innovation and R&D investment.


Source: Huovari, Janne - Kangasharju, Aki - Alanen, Aku. 2001. Alueiden kilpailukyky.Pellervo Economic Research Institute PTT, Publication 176.

Research and development costs and added value three years later by region

Source: Statistics Finland DM 5862008-2003 Copyright © Tekes

AverageR&D costsper capita in 1995-1998, euros *

< 100100 - 400400 - 800

> 1 000

Added valueper capitain 2000,euros

< 16 00016 000 – 19 00019 000 – 25 000

> 25 000

* Eastern Uusimaa1997-1998

0 1 2 3 4 5

EU

FINLAND

Berlin

Ile de France

Rheinhessen-Pfalz

Mid-Pyrénées

Helsinki Region

Oulu Region

Tübingen

Oberbayern

Stuttgart

Braunschweig

Top areas of research in Europe

10 top areas represent a quarter of total R&D investment in EU10 top areas represent a quarter of total R&D investment in EU


R&D investment in relation to GDP

%Source: European Commission, 2002

Network of universities, polytechnics, publicresearch organisations and science parks in

Finland


UniversityUniversity unitPolytechnicPolytechnic unitVTT, Technical ResearchCentre of Finland or otherpublic research instituteUnit of public researchinstituteScience Park

Networking in corporate R&D projects

0

20

40

60

80

1999 2000 2001 2002 2003

Subcontractingfrom researchinstitutes

Large companysubcontractingfrom SMEs

Part oftechnologyprogramme

Internationalcooperation

Share of networked projects, %


Almost all projects funded by Tekes in large companies and more than 80 per cent of all R&D projects were networked. The figures include corporate R&D projects, but not smaller feasibility studies.

Networking by region in corporate R&D projects funded by Tekes


0

10

20

30

40

50

60

70

80

90

EU subsidisedregions

Other regions(growth centres)

Uusimaa

Average of networked projects in 2000-2003, %

Companies’ subcontracting from universities, polytechnics and research institutes

Large companies’ sub-contracting from SMEs

Regional networking with partners from Oulu in electronics and telecommunications programmes


Includes partners who participated in at least three projects in Tekes Electronics and Telecommunications technology programmes.

Lappeenranta University of Technology (Lappeenranta)

Salcomp Oy (Kemijärvi)

CCC (Oulu)

Sonera (Helsinki)

Nokia Mobile Phones (Oulu)National Semiconductor Finland Oy,former Fincitec Oy (Kemi)

University of Oulu (Oulu)

Efore Oy (Helsinki)

Projekti-Insinöörit Oy (Helsinki)

Cybelius Software Oy (Oulu)

Teleste (Turku)

Tampere University of Technology (Tampere)

Nokia Networks (Oulu)

ADC Telecommunications Oy (Oulu)

VTT, Technical ResearchCentre of Finland (Helsinki)

Helsinki University of Technology (Espoo)

JOT Automation Oy (Oulu)

Nokia Research Center (Helsinki)

VTT, Technical ResearchCentre of Finland (Oulu)

Extrabit Oy (Oulu)

ABB (Helsinki)

NetHawk Oy (Oulu)

Elektrobit Oy (Oulu)

Vaisala Oyj (Helsinki)

Polar Electro Oy (Oulu)

Filtronic LK Oy (Oulu)

Aspocomp Oy (Helsinki)

Elcoteq Network Oyj (Lohja)

Planar Systems Oy (Helsinki)Ultraprint Oy (Oulu)

Suunto Oy (Helsinki)

Picopak (Lohja)Nokia Mobile Phones (Salo)

Tekes’ corporate customers by region


Number of customers in 2000-2003

0

250

500

750

1 000

1 250

1 500

1 750

Helsinki Region Other growthcentres

Other regions

Newcorporatecustomers

1,750

1,500

1,250

1,000

Public sector activities of R&D in Finland

A01/ 99-12

Ministry ofEducation

Academy ofFinland

Universities

Ministry ofTrade andIndustry

Tekes

RegionalTE-Centres

Other ministriesand theirinstitutes

SitraFinnvera Oyj

Finpro

Science andTechnology

PolicyCouncil

PARLIAMENT

VTT

GOVERNMENT

Competitiveness,profitability and

growth

New businesses,start-ups

Impact of Tekes activities

Research institutesand universitiesEnterprises

Societal and environmental

impacts

Projects and programmesInternational cooperation

Tekeslprovides expert services

and R&D fundinglcoordinates programmes


Boosting exports, broadening industrial and economicbase, generating new jobs and improving well-being.

Boosting exports, broadening industrial and economicbase, generating new jobs and improving well-being.

Total 392 million euros and2,196 projects

Total 392 million euros and2,196 projects

Total Tekes R&D fundingin 2003

Industrial R&D grantsto companies

156 million euros

Research fundingfor universities andresearch institutes162 million euros

Industrial R&D loansto companies40 million euros

Capital loans for R&Dto companies

34 million euros


Tekes R&D funding per technology application areas in 2003

Million euros

Biotechnology

Material technology

Information and communications technology

Applications of well-being

Applications ofsustainable development

Knowledge intensivebusiness services

Business know-how ofthe networked economy

Intelligent products,processes and systems

Each project may be targeted to several areas.

0 25 50 75 100 125 150


Technology programmes in brief

Effective utilisation of research results is ensuredby scheduling the projects of research institutesand universities concurrently with company R&D

projects, and by networking with them.

l 24 ongoing programmes inthe beginning of 2004 with atotal cost of 1.3 billion eurosl Each programme typically

lasts 3-5 yearsl 2,000 company

participations annuallyl 800 research unit

participations annuallyl Tekes usually finances

l 60-80% of university projectsl 25-50% of company projects

Steering grouplenterprises

Tekes

l Preparationl Coordinationl Decision

making

Company R&Dprojects

Grants

GrantsLoansCapital loans

Research projectsat universities andresearch institutes

SynergyNetworkingPart financing



Innovation environment in FinlandResources and funding

Pri

vate

Basic research Applied research Business R&D

Business developmentMarketingInternationalisation

R&Dat companies

3,375

The figures represent the total extent of each organisation in million euros in 2002. In parenthesis the share thatis funded from the State budget. The funds of Tekes, the Academyof Finland and Innofin are funded entirely

from the State budget.

BusinessAngels

387

Pub

lic

Finnvera352 (34)

Universities926 (402)

Academyof Finland

177 Ministries,TE-Centres,

sectorial research311 (227)

Tekes386

VTT219 (68)

From abroad152

Innofin5 (4)

Finpro35 (20)

Venture capitalists:Private 349

Industry Investment Ltd 63 (42, additional state investment)

Sitra 48

Preconditions for the success of regions in Finland

l Success of a region depends on the success of companies on global markets

l A core is needed to ensure availability of skilled people and to create and disseminate knowledge: UNIVERSITY, RESEARCH INSTITUTE, POLYTECHNIC

l Effective interchange of information and knowledge between research units and companies: CO-OPERATION

l Low threshold and bureaucracy for start-ups: ENTREPRENEURSHIP and supportive, innovative environment: TECHNOLOGY PARKS AND CENTRES, INCUBATORS

l Pre-seed, seed, R&D and venture capital financing: FLEXIBILITY AND CO-OPERATION IN FINANCING

l Partners on regional, national and international level: NETWORKING, EXPERT SERVICES TO FIND PARTNERS

l Tools and incentives for risk taking and networkingl TECHNOLOGY PROGRAMMES for technology development

l TECHNOLOGY CLINICS for technology transfer

l PRE-SEED INSTRUMENTS for searching ideas and preparing business plans

l PARALLEL R&D- AND VC-FUNDING for growth and internationalisation of companies #91319

the role of innovation policies in regional …100 - 134 (10) 90 - 100 (13) 80 - 90 (23) 70 - 80...

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