OULU REGION S SMART SPECIALISATION

OULU REGION S SMART SPECIALISATION

Oulu Region s Smart Specialisation 2 Contents 1 Smart specialisation strategy process... 3 2 Focus areas of the Oulu Region s smart specialisation, incl. SWOT analysis...4 3 Exploitation of key technologies and innovation enviroments/.development platforms, incl. technology transfers...9 4 Securing the commitment of stakeholders to the smart specialisation process...11 5 Policy mix -resources and private funding... 12 6 Smart specialisation monitoring system... 13 Layout: Anne Vimpari Cover images: Pixabay Date: 28.5.2014

3 Oulu Region s Smart Specialisation 1 Smart specialisation strategy process The Oulu Region s smart specialisation strategy process for 2014 2017 began in 2012 with an update of the sub-regions industry strategies. The regional council initiated a regional strategy process for the Oulu Region s smart specialisation as a part of regional programme work in the spring of 2013. The status of the region s development was assessed with the help of the sub-regions industry strategies, statistical data, post-evaluation of the regional programme 2011 2014 and other reference material. The strategy has been prepared in an interactive, open preparation process in collaboration with broad, diversified networks of stakeholders. Companies, business development organisations, research institutes, educational institutions, municipalities, organisations, social partners, public sector authorities and individuals have taken part in the work. Open seminars and thematic, focused workshops have been arranged in the region for the purpose of working out content and emphases. Representatives from the private sector have participated especially in thematic workshops related to their own areas of operation. Work groups consisting of specialists have worked on the textual content. The strategy document has been available for public review, and over a hundred comments have been submitted, which all have been reviewed and taken into consideration. The choices made in smart specialisation have taken into account the structure of the region s enterprises and industry, areas of special expertise, research infrastructure, international position, national innovation policy and the region s strengths and possibilities in the implementation of the INKA programme. Preparation of the INKA programme has raised the significance of different kinds of innovation environments in the development of new business operation in the strategies approved by the City of Oulu and other stakeholders in 2013. During the planning the core elements of an innovative city were identified in Oulu by the city, higher education institutions, VTT and companies together. They include physical innovation environments, higher education institutions innovation centres and companies most significant development themes from the standpoint of new international business. The programme requires stakeholders to set a common goal, work together seamlessly and recognise their own roles.

Oulu Region s Smart Specialisation 4 2 Focus areas of the Oulu Region s smart specialisation, incl. SWOT analysis Focus areas of the Oulu Region s smart specialisation: ICT and software sector, incl. integration with businesses in different fields Basic industry s value chains: mining and metal industries, refinement of timber raw material Clean technologies, incl. energy Healthcare and wellness technology ICT and software sector Oulu s ICT concentration is a significant cluster that affects the entire country and still has a strong role in international ICT development. The focus of the region s ICT has been on data communications and cell phone systems, which continue to be developing areas. The energy and process industries and mining, among others, could benefit from ICT service business even more. The need to digitalise traditional sectors is a growing opportunity for ICT companies. Key areas of technology are linked to the ICT ecosystem (wireless data transfer, mobile devices and software, printed intelligence, 3D Internet, information security, security technology of digital and physical environments, information systems). The southern part of the region is focused on developing wireless solutions that support service business and digital manufacturing processes. The future of the region s ICT cluster is affected by rapid technological changes. One of the core paths of development is the so-called Internet of things, i.e. the network of devices and objects that communicate with each other. The IOT enables construction of services for, e.g. management of energy consumption or monitoring of home care. Measuring the condition of the environment and new energy systems also increase the demand for well-developed data communications systems. With the growth of data communications, the significance of cyber security is constantly increasing; there are several growing digital and physical information security companies in Oulu. Technological development related to measuring humans (e.g.

5 Oulu Region s Smart Specialisation wearable information technology) is a significant development trend that enables the utilisation of cloud and mobile technology in the development of healthcare innovations. The significant increase in health and wellness data and its refinement and secure transfer of data from one device to another are a significant source of innovations. Refinement of data into services that support individuals is quickly increasing through the development of digital services and innovation platforms. Renewal of the ICT cluster is at the threshold of a major change. Its new areas of specialisation involve a large group of SMEs and strong international-level competence potential. It is important from the standpoint of the Oulu Region s competitiveness that the increased productiveness enabled by ICT is utilised in different sectors. The ICT solutions of different sectors also reduce the carbon footprint by decreasing travel and transport needs and developing the energy and material efficiency of processes. Renewal of the ICT sector happens through small companies. New companies are created in sectors that utilise ICT know-how, like digital services and gaming. Mining industry The Oulu Region is a traditional mining region with three currently operational metal mines in Pyhäsalmi, Raahe and Nivala. Reopening of the Mustavaara mine is under preparation. The region also has several gold and nickel deposits whose mining potential has been explored. The fact that most mine projects are situated in northern Finland underscores the region s role in developing the field. The common goal of the northern regions is to increase collaboration for sustainable development of the mining sector. The question is not only of mines, but of developing the entire mining industry cluster and its value chains. The University of Oulu has Finland s key competence in mining and metallurgy education as well as a multidisciplinary research environment needed for research in the field. For example, it is possible to study control of material flows with the help of a continuous concentrating plant. The close proximity of the main areas of operation enables smooth cooperation with industry. The research environment has been developed by building a modern laboratory and academia s first continuous concentrating plant for research purposes. In developing the mining sector, the challenges of social and ecological acceptability have been addressed by searching for solutions by means of multidisciplinary, cross-regional cooperation, for example. A definite area of development in the mining sector is the utilisation of international business potential as a broader ecosystem to which is brought a variety of machines, equipment and systems, ICT solutions and services. The goal is a sustainable mining industry, therefore economic benefits, environmentally sustainable operation and social acceptability are emphasised. It is essential to plan and build mine projects in such a way that no irreconcilable conflicts with the environment or other area users will emerge.

Oulu Region s Smart Specialisation 6 Metal industry The Nivala-Haapajärvi, Oulu, Raahe and Ylivieska sub-regions are home to about 380 SMEs in the metal industry; their total annual turnover comes to nearly a billion euros. Many companies in the metal industry have also become internationalised either directly or through their parent company. The steel and metal industries employ about 9000 people directly and around 20 000 indirectly. The Bothnian Arc is the core region of the Scandinavian steel industry. Finland s and Sweden s most important steel production plants and a considerable number of downstream operations such as machine shops are situated in this region. The sector is also the most important industrial employer. The steel industry in the region believes it will succeed in international competition by specialising even more in manufacturing special steels and by relying on the region s own raw material reserves. The Oulu Region has special expertise in new special steels. Special steels are expected to bring significant growth potential to Finland s entire metal and machine shop industry. New generations of products manufactured from special steels compete with their light weight, strength, durability and the energy savings and lower carbon dioxide emissions these characteristics bring about. The SME sector has enormous business potential as it begins to exploit newgeneration steel raw materials in its production. Applied material research and manufacturing know-how will make it possible to achieve competitiveness in the machine shop industry by integrating education, research that supports SMEs operation and the transfer of knowledge. Oulu is a partner area in the INKA programme s Innovative Industry theme. Refinement of timber raw material The Oulu Region has strong know-how and long traditions in utilising timber raw material in the forest and timber product industry and also as bioenergy. The region has good possibilities to develop new ideas in the high-added-value bio-economy. A future development challenge is to safeguard a high degree of refinement and added value for timber raw material. The bioeconomy will enable the birth of significant new business around the existing forest industry. In addition, the development of bio-refining will open entirely new business opportunities around processes, products and services and make it possible to use bio-based raw materials in current processes and products. The value chain has unexploited potential in the area of biomaterials and biochemicals already now the region has globally significant know-how in technology related to their production. In the near future, particular interest will be focused on sectors that can exploit the value of these technologies by combining expertise in the bioeconomy and production technologies with ICT solutions and by spawning intelligent production solutions that make efficient use of natural resources. Clean technologies, incl. energy In the area of clean technologies the Oulu Region has expertise particularly related to water and air purification. Water-related know-how is specialised in water purification processes and monitoring of water quantity and quality. These solutions are applied in the food, brewery, timber refining, energy, steel and mining industries, in monitoring the condition of the

7 Oulu Region s Smart Specialisation environment and in water purification plants. Air-related expertise is concentrated above all on catalytic air purification. Companies products are used to clean emissions from industry, heavy vehicles and small motors. Motor vehicle emissions are reduced with metallic exhaust catalysers their development combines know-how in metal technology and chemical processes. Technological know-how related to renewable energy is focused on bioenergy. Promising areas of competence include technologies and services related to the built environment, such as energy solutions in buildings and the role of ICT in controlling energy production and consumption. Significant operators in the sector are opening their infrastructure to R&D, promoting rapid development and more interaction between different stakeholders. The region has considerable peat production, agriculture and forestry; there is a great need to develop clean production technology at the beginning of the production chain. Healthcare and wellness technology The Oulu Region has an abundance of healthcare and wellness technology companies which have their sights on the international market. The region s strong know-how in wireless data transfer, Internet, cloud and mobile technology offers possibilities to build wellness innovations for the future on a completely new basis. The region has strong know-how in the development of digital services needed to introduce and commercialise innovations, as well as familiarity with novel business models and value chains. The healthcare and wellness sector is currently undergoing a major change where organisation-oriented development is becoming individual-centred. Technological development has enabled personal monitoring of one s own health, e.g. by using mobile devices and applications. The focus of development is shifting more and more from treating illness to development of preventive service solutions. Novel solutions in ICT-assisted wellness and healthcare offer cost-effective services and they are making the ecosystem user-centred. The City of Oulu is responsible for the national INKA programme under the Health in the Future theme and is cooperating closely with four other cities taking part in the theme. With the INKA programme Oulu is being developed into an internationally networked centre of top technology with an eye on international markets. The leading projects of the Health in the Future theme are self-care solutions of the future and a start-up ecosystem for growth companies. Self-care solutions of the future will provide electronic self-care services for individuals, with particular emphasis on utilising mobile and Internet-based solutions, combining them with new diagnostic solutions and innovations and safeguarding information security. Development of these services and products relies strongly on the region s know-how, especially in the bio-sector, medicine, health science and behavioural science.

Oulu Region s Smart Specialisation 8 Oulu Region s SWOT analysis: STRENGTHS world-class expertise in narrow special fields flexible network formation diversified industrial structure and good development outlook well-rounded education and research network new R&D ideas functional basic infrastructure region s features bring added value to the European economy natural resources and nature-related values new Arctic possibilities OPPORTUNITIES value of northernness is growing; large investments technology transfers between different sectors of industry and production merging, networking and specialisation of regional know-how reinforcing the position of strong sectors in global value networks growth of exporting and development of global services sustainable utilisation of natural resources WEAKNESSES weak financial resources and capital small actors and volumes, vulnerable structure sparsely populated, long distances ageing, shrinking population regional imbalance and unemployment controversies in exploiting natural resources Finland s internal competition vulnerable production structure; Oulu is undergoing a rapid structural change lack of expertise in internationalisation narrow peak in research deficient wideband infrastructure THREATS the path from innovation to market is too long financially maintaining the competitiveness of leading companies shrinking R&D resources national-level concentration of resources region s potential and possibilities not recognised and reinforced in national policy regionally centred and slowing growth tightening global competition deteriorating basic infrastructure

9 Oulu Region s Smart Specialisation 3 Exploitation of key technologies and innovation environments/ development platforms,incl. technology transfers Due to the location of industry and high-level research institutes in the region, the Oulu Region has several key technology areas. Technology transfers from research institutes to companies are supported with open innovation environments and development platforms. Public funding is used to support development of the research infrastructure as well as pilot and demonstration environments. For example, Oulu Mining School has the world s first automated continuous test concentrating plant built into a university environment. Another significant example is the printable intelligence production laboratory, PrintoCent. The Oulu Region has internationally high-level key technology in ICT technology, especially in wireless data transfer technology and the software sector. The region has plenty of SMEs based on ICT technology and large leading companies in the technology. ICT technology broadly accelerates development and growth in many different sectors, and ICT solutions are integrated into business in the different sectors. Renewal of the ICT cluster happens through small companies; renewal is supported by developing the start-up ecosystem. On the other hand, new digital services including cloud solutions and gradually also so-called ubiquitous systems also significantly reshape established ICT companies and other companies in the sector. In the area of printable intelligence, the region is Finland s and one of Europe s leading areas due to the research done and the pilot research infrastructure in the region. A large group of SMEs has sprung up around this key technology area. These SMEs are actively forming clusters and networks with large international companies. Technology transfers to the companies are promoted with a research infrastructure of complementary research institutes, which enables early-phase product development, pilots and experiments. By utilising the services created by PrintoCent, companies can start their business based on printable intelligence more quickly and with less risk, as they can use the services of PrintoCent s pilot plant in their early-phase product development and production and can integrate with the corporate community and exploit the region s strong research activity. Printable intelligence is a technology area of the future and will affect the development of different sectors in a significant way.

Oulu Region s Smart Specialisation 10 In material technology the Oulu Region has key technology related to special steels. The region has steel industry and the University of Oulu has high-quality research on steel and materials. The University of Oulu is one of the main implementers of the metal and machine shop industry s SHOK programme Fimecc Oy. The objective of innovation is to decrease the carbon footprint of the metal industry and improve its global competitiveness by integrating the principles of digitalisation, durability and a system mind-set as a part of production control. Other focus points are digitalisation and application of complex process models in a real-time industrial operating environment. The goal of research is to renew the sector and significantly increase its competitiveness. The research programme is built around steel refinement chains. The key technology involves corrosion- and wear-resistant steels and durable and lightweight steels and their application in various product solutions related to, e.g. the maritime industry and offshore operations. Cooperation is extensive and well networked.

11 Oulu Region s Smart Specialisation 4 Securing the commitment of stakeholders to the smart specialisation process Companies, business development organisations, research institutes, education institutions, municipalities, organisations, social partners, public sector authorities and individuals have taken part in smart specialisation strategy work. Open seminars and thematic, focused workshops have been arranged in the region for the purpose of working out content and emphases. Representatives from the private sector have participated especially in thematic workshops related to their own areas of operation. Work groups consisting of specialists have worked on the textual content. The main stakeholders in the focus areas are committed to the smart specialisation process because the work is truly based the stakeholders strong areas. The chosen focus areas are integrally included in the stakeholders own operating strategies. All the choices made are backed up by a strong group of industrial enterprises and robust know-how in research institutes. Smart specialisation is supported by the region s business developers and public actors. The objective is that collaboration between diverse groups of stakeholders will reinforce the regional innovation system so that the region s economy is strengthened and the base of expertise continues to grow.

Oulu Region s Smart Specialisation 12 5 Policy mix -resources and private funding The Oulu Region s smart specialisation is supported in regional decision-making by structural funds according to the goals of the structural fund programme. The structural fund programme is business-oriented and its measures promote SMEs and thereby private R&D investments. Regional public funding is also focused on capital investment funds that are invested in early-phase growthoriented companies. Finland s first asymmetrical capital investment fund has been established in the Oulu region to invest private capital in the development of the region s enterprises. The companies access to capital investments is activated by arranging various coaching and match-making events between companies and capital investors. Companies face definite challenges in obtaining funding for growth, but purposeful work is being done in the region to solve the problem. The focus areas of the Oulu Region s smart specialisation correspond well with national innovation policy. For example, the Strategic Centres for Science, Technology and Innovation (SHOK) are very applicable to the Oulu Region s specialisation areas. (Metal products and machine construction FIMECC Oy; energy and the environment CLEEN Oy; healthcare and wellness SalWe Oy; development of information and telecommunications and digital business DIGILE Oy; the built-up environment RYM Oy and bioeconomy FIBIC Oy are all SHOK centres.) The Oulu Region strongly utilises national technology and innovation funding in both business development and research. Smart specialisation is also reinforced with INKA programme resources Oulu is responsible for the Health in the Future theme and is also a partner region in the Innovative Industry theme led by Tampere. The goal is that the region s stakeholders will utilise international networks of cooperation and European initiatives. Smart specialisation makes it possible to exploit programme synergies by specifying measures that enable the use of structural funds to construct so-called steps to the top and improve the region s competitive status, e.g. in acquiring Horisontti 2020 programme funding. Oulu s innovation alliance and its thematic innovation centres gather the region s stakeholders into national and international joint projects like the Horisontti 2020 programme and other EU programmes. In particular, the environment and energy sector, Internet research and healthcare technology innovation centres are strongly linked to sectors that are recognised as nationally strategic growth areas.

13 Oulu Region s Smart Specialisation 6 Smart specialisation monitoring system Implementation of development goals and focus areas defined in the Oulu Region s regional programme, measures that are carried out and their impact are monitored by means of quality and quantity monitoring. Quality monitoring examines development measures carried out to promote the strategic choices of focus areas and monitors implementation of the strategy. Quantity monitoring consists of meters that describe realisation of goals as well as possible. The main meters are assigned quantity and/or quality goals. If necessary, joint meetings and thematic seminars are arranged among partners to support monitoring. Responsibility for coordinating monitoring lies with the regional council.

COUNCIL OF OULU REGION Sepänkatu 20, 90100 OULU Puhelin +358 (0)40 685 4000 www.pohjois-pohjanmaa.fi