Innovation through programming? The Finnish Centres of Expertise Programme as an instrument of networking and knowledge building

The Finnish Centres of Expertise (CoE) Programme has been an integral part of Finnish regional innovation policy since 1994. Its objective has been to create a strong network of centres of expertise supporting specialisation and cooperation between regions, and by so doing increasing regional competitiveness. The recent evaluation of the programme shows that that the programme can still make a claim for uniqueness and boast of its success in supporting regional specialisation and expertise, though challenges remain in particular concerning network building and knowledge transfer. One of the main challenges here lies in promoting inter-regional linkages and networks in an environment that is prone to regionally specific co-operative solutions. If the promotion of expertise and the creation of networks is inherently regional, and the funding structures equally so, how are inter-regional networks and organizational forms expected to flourish? What are the advantages and disadvantages, based on Finnish experience, of regional vs. national approaches to networking for innovation promotion and knowledge transfer? Though the Centres of Expertise programme has been the flagship of Finnish regional policy since 1994, there are a number of questions related to the programmes implementation that can be of wider use beyond the limited Finnish regional context. Some of these are presented and further elaborated in the paper proposed here. How to achieve functioning and stable regional partnerships in innovation and industrial policy and how to promote regional development through them? How to promote internationally competitive expertise in areas as different as automation, IT, biotechnology, energy, the experience industry and chamber music? Is the regional approach to expertise useful or should small countries instead proceed from a national perspective? It is argued here that many of these issues are basically questions of knowledge creation and transfer, and are thus themselves dependent upon the nature and success rate of network creation. National authorities are however also in a position to promote the creation of such networks: regionalised innovation solutions can be seen to emerge both as ’ bottom-up’ and ‘top-down’ process, but rarely do they emerge independently of some external support. The organisational method of the Finnish CoEs is unique, at least in Nordic terms. One of the Finnish ‘keys to success’ seems to lie with the organisational structure of the programme: it is regionally steered through the regional partnership networks (formed by the public sector, businesses, public authorities and the R&D sector), operationalised by the Technology Centres and nationally co-ordinated by a broadbased national Committee, the members of which range from business representatives to the representatives of the public authorities, key ministries and universities, and innovation organisations. This is line with one of the prevailing ideas of innovation systems (i.e. the triple helix) and therefore perhaps not particularly unique as far as the core ideas for the utilisation of regional innovation as a development resource are concerned. This, together with the fact that the prevailing consensus over high technology and expertise are the ‘keys to success’ for a small, knowledge-intensive society such as Finland has ensured that the management of the CoEs has been stable 1 The author of this paper was the co-ordinator of the consortium undertaking the evaluation project. The Final Report (in Finnish) with summaries (in English and Swedish) can be found at http://www.intermin.fi/intermin/biblio.nsf/1C848696B9716D80C2256CC600409494/$file/OSKE.pdf over a long period of time, whereas many other similar initiatives have typically failed because they have been temporary in nature and they have worked with very limited resources to hand. Another one of the ‘keys to success’ is undoubtedly the role of the CoEs in the regional innovation systems. The evaluation showed that between 1999 and 2002 the Centres mobilised a significant part of the network of innovation and regional development in their activities. In so doing they have also convinced the regional actors of the usefulness and effectiveness of the programme. The financial picture supports the view of regional commitment. The fact that Centres of Expertise have been so successful in mobilising an important amount of R&D funding and the other financial resources required for the co-financing of the programme can be taken as an indication of this regional commitment. Basic funding, which is used to launch projects accelerating the development of the innovation environment only amounts to approximately 6% of the total funding available, and it can therefore only be used as a minor tool in the launching of new projects, or as an additional project co-ordination resource. Approximately 30% of the funding comes from businesses and the role of the business sector in the regional networks is thus of particular interest here. While most of the businesses that have participated in the projects organised as a part of the CoE programme represent the SMEs sector, the role of big business is equally central in some regional networks (regional and cluster-specific differences will be discussed in more detail in the final version of the paper). Finally it is argued here that the nature of regional innovation networks needs to be considered both as a regionally and nationally specific phenomenon, it is therefore also susceptible to regional and national policy initiatives and influences. The influence of cluster-specific differences should however not to be overlooked either: regional innovation networks are not only dependent upon the nature and quality of knowledge transfer, but they are also dependent upon the nature of the national cluster or industrial field in question. Therefore the instruments needed to best promote network-building need to be understood as constrained by both regionally specific and cluster-specific preconditions and environments.