Markku Markkula

• Aalto University, Advisor to the Aalto

Presidents • EU Committee of

the Regions CoR, Chair EPP-CoR Task Force on

Europe 2020, Rapporteur on H2020 • Espoo City Planning

Board, Chair

markku.markkula@aalto.fi

New programme period paints a new landscape with new drivers of change and some new critical success factors: 1. Focus on impact, especially societal impact 2. More innovations out of research 3. User-driven development: citizens and communities of

practice 4. Regional innovation strategies based on Smart

Specialisation RIS3 5. From traditional clusters and triple helix to regional

innovation ecosystems 6. More multi-disciplinary and breaking the boarders 7. Mindset/mentality is the most crucial 8. Use of cohesion funds on innovation and capacity

building 9. Synergy in using Horizon 2020 and Cohesion funds 10. Multi-financing

I will especially review the key issues with respect to your conference objectives: new emerging approaches to networking and cooperation between regions.

JADE/Markkula:

“Theory and Practice to Regional Innovation Ecosystems and Open Innovation 2.0’

Scientific Excellence & Industrial Leadership

Smart Cities & Smart Regions Are Needed to Speed up and Scale up

EU2020 Implementation – New Key Elements Are

Regional Innovation Ecosystems Pioneering

EU2020

Markku Markkula, markku.markkula@aalto.fi Chair CoR-EPP Task Force on Europe 2020, Aalto University, Finland

More Societal

Innovations

Urban Design

Solutions

Digitalized Real Life Test-beds

Open Innovation & Smart Specialization

1. Professor C.K. Prahalad gave a clear message also to universities by defining three critical aspects of innovation and value creation (Source Open Innovation Yearbook

2012, DG INSFO):

1) Value will increasingly be co-created with customers.

2) No single firm has the knowledge, skills, and resources it needs to co-create value with customers.

3) The emerging markets can be a source of innovation.

The competitive arena is shifting from a product-centric paradigm of value creation to a personalized experience-centric view of value creation. 2. Professor Erkki Ormala in his presentation EU Regions and Horizon 2020

(Source ManETEI final conference 4 December at Aalto): “From traditional large enterprise to extended enterprise (in which the role of partners is much larger) with orchestration capability”.

Why Regional Innovation Ecosystems?

Critical Aspects of Innovation and Value Creation

Markku Markkula, markku.markkula@aalto.fi Chair CoR-EPP Task Force on Europe 2020, Aalto University, Finland

Erkki Ormala, Professor Aalto University,

Former Vice-President, Business Environment, Nokia

Open Innovation

• Access and drive global intellectual vision and insight

• Form strategic collaborations with world-leading institutions to multiply our efforts

• Build global test beds to learn from broader audiences

Engaging the World’s Leading Institutions

Erkki Ormala, Professor Aalto University,

Former Vice-President, Business Environment, Nokia

Identify Societal / Market Needs & define system requirements & barriers

Develop Useful Insights from Fundamental Knowledge

Integrate Fundamental Research & Innovation Knowledge into Enabling Technologies

Universities should analyse the ecosystems through several layers:

Interacting Learning & Research & Innovation Activities

(E O’Sullivan: Adapted from NSF ERC Strategy Framework)

Professor Sir Mike Gregory, 13 Feb 2013

Three Steps to Understand the System:

Business Model Levers Technology Levers

Value Proposition

Value Chain

Target Customer

Product and Service

Process Technology

Enabling Technology

Cultural Levers

Regional Innovation Ecosystem

Space (Ba & Flow)

Design

Mindset

Learning

Transformation: the 3 Types of Innovation (In the past: the focus on innovations has been on business and technology.

Now: also the cultural aspects are the drivers of change)

Incremental innovations

Semi-radical innovations

Radical innovations

Markkula M & Pirttivaara M, (2013). Adding the Cultural Levers. Developed from Davila T, Epstein MJ and Shelton RD, (2013), Making Innovation Work, FT Press, New Jersey.

New Governance

Culture

From Triple Helix to RIE: Using The Hubconcepts™ - Innovation Hub Framework

Company and forum driven activities

Public-private partnerships

Public policy driven activities

“Smart Handover”

National /Regional Innovation Policy

Research & Development Activities

Education (elementary to university)

Physical Infrastructure and Service Structures

Cluster Policies & Programs

Start-ups

Living Labs / Test-Beds

Incubation Environments

Anchors

Growth SMEs

Technology Innovation Area

Biotech & Pharma Phase I

Residential Zone

Semiconductor Phase II

Semiconductor Phase I

Biotech & Pharma Phase II

Scientific Research and

Education Zone

First-class master plans &

Innovation Hub concepts

complete each other

Based on Hubconcepts Inc / Jukka Viitanen: Copyright and all rights reserved.

Read the arcticle by Jukka Viitanen &

Markku Markkula & Carlos Ripoll in

the Knoewledge Triangle Book 2013.

The Changing Realities in the Systemic Development of Regional Innovation Ecosystems “From Triple Helix to RIE”

Jukka Viitanen, Markku Markkula, Carlos Ripoll Soler (the article, 16 pages, gives a clear process guidelines from the city governance perspective):

1. Introduction

2. The Triple Helix Model Extended to the National and Global Contexts

3. New Foundations for the Regional Innovation Policy and the Development of Specialization Capacity

4. The Interplay and Matching of Parallel Interests in the Regional Innovation Ecosystems

5. The Comprehensive Bench-Learning Approach for the Functional RIEs 5.1. Grand Master Planning 5.2. Coordinating Service Provision 5.3. Smart Orchestration 5.4. Channeling Ecosystem Resources

6. Conclusions

Development of National or Regional Innovation System

Public support

Stage 1: Creating pre-conditions

Stage 2: Initiating transformation towards RIE

Stage 3: Orchestration for global business

The Development Path of

the Regional Innovation Ecosystem (RIE)

Source: Jukka Viitanen & Markku Markkula & Carlos Ripoll, article in the Knowledge Triangle book, 2013

This is the process we are applying in practice in the Espoo Innovation

Garden regional ecosystem through the research program “Energizing

Urban Ecosystems” (20 million euros in 4 years: industry driven 50%

funding from industry, 50% from Finnish public funding) .

Stage 1 Regional pre-conditions: 1. Potential of existing regional/international innovation system (=audits) 2. Willingness to utilise this potential (=active participation) Stage 2 Creating the innovation hub: 1. Joint R&D 2. Joint innovation capacity 3. Joint commercialization 4. Joint platforms Stage 3 Orchestrating RIE: 1. Mindset change 2. Implementing Knowledge Triangle 3. Integrating innovation activities with research programs

The Development Path in More Detail

Source: Jukka Viitanen & Markku Markkula & Carlos Ripoll, article in the Knowledge Triangle book, 2013

Starting Points for Regional Level RIS3 Governance

• Our CoR experiences coming from many regions give a strong support on the following Smart Specialisation Platform statements: “RIS3 is an economic transformation agenda. RIS3 is a dynamic and evolutionary process (not a structure) deeply grounded in an entrepreneurial discovery process (not a one-off action) where governments are rather facilitators than in a position of command and control. RIS3 is for innovation leaders and for those lagging behind.”

• This means that Smart Specialization is above all a process strengthening regional co-creation and business collaboration through stakeholder involvement and shared ownership, not an issue of traditional governance structures: RIS3 is a process a) to foster stakeholder engagement under a shared vision, b) to link small innovative firms and also large companies on value networking, c) to commit the main actors in operating through the orchestrated multi-level governance, and d) to help build creative and social capital and thus increase the renewal capital at the local and regional level in different communities of practice.

Markku Markkula

Horizon and Cohesion Funds Go Hand-in-Hand

In addition to Scientific Excellence, H2020 will focus on industrial leadership and societal challenges, maximizing the competitiveness impact of R&I, as well as raising and spreading levels of excellence.

Besides improving the innovation ecosystems, Cohesion policy will partly increase the capacity of regions to participate in H2020 and partly fund R&D&I activities in a region that can build on H2020.

Both should have a strong base on European Partnerships

Guidelines for Combined Funding

Within a programme, a project or a group of projects, the use of different EU funding sources with many types of local funding is encouraged. RIS3 seeks to exploit complementarities and synergies, however avoiding overlaps and excluding double-financing.

Examples:

• Joint use of H2020 and ESIF funds to cover different cost items in a single project.

• Separate (not legally linked) projects financed through H2020 and ESIF and orchestrated to have synergic collaboration and stronger impact.

• ESIF funding is not legally linked to H2020 project, but a regional authority decides to fund beneficiaries to enhance the H2020 project in the region.

• ESIF to be used (with very little administration) to finance a project proposal which had a positive evaluation under H2020, but could not be funded due to a lack of H2020 funds under the call.

Regions to apply these and other policy guidelines in their use and in partnering RIS3 process on a continuous basis.

Smart Specialisation Strategies as Iterative, Tailor-made Policy Processes

The S3 design process can be described through “six steps”, each of which relates to the process rather than a theory or even any specific policy objective:

Step 1: Analyse the regional context and potential for innovation;

Step 2: Ensure participation and ownership;

Step 3: Elaborate an overall vision for the future of the region;

Step 4: Identify priorities;

Step 5: Define a coherent policy mix and action plan;

Step 6: Integrate monitoring and evaluation mechanisms.

Markku Markkula CoR Innovation Union keynote on 27 Nov 2013, based on “The role of clusters in smart specialisation strategies”, DG Research and Innovation

CHALLENGE 1: The “prioritization” challenge: how to select (and justify) priority intervention domains for S3? CHALLENGE 2: The “integrated policy” challenge: what are the adequate policies for S3? CHALLENGE 3: The “smart policy-making” challenge: what tools for evidence-based policy (measuring, assessing and learning in S3)? CHALLENGE 4: The “multi-level governance” challenge: how to align policies from national, regional, EU levels? CHALLENGE 5: The “cross-border collaboration” challenge: what is the appropriate territory to conduct a S3 and how to conduct polices that conform to it? CHALLENGE 6: The “stakeholders engagement” challenge: how to promote participation, engagement and commitment of the variety of stakeholders?

The RIS3 Process: Six Challenges to Implement Smart Specialisation Strategies in Practice

Markku Markkula CoR Innovation Union keynote on 27 Nov 2013, based on “The role of clusters in smart specialisation strategies”, DG Research and Innovation

Aalto frame for

the EU Horizon

Mega-Endeavour

(orchestrating a

project portfolio)

Project 1

Project 2

Project 3

Project 4

Project 5 Ou

tco

me

s o

f th

e p

roje

cts

Added value for these

projects

Additional added value for the

partners and stakeholders

Creating

enablers

for this

project

portfolio.

Some

projects are

coordinated

by Aalto and

some by the

others.

Other

impacts

Knowledge Triangle implementation

Education Research Innovation

Markku Markkula

Aalto University

Include flexibility through experimenting and spin-offs & spin-inns

How to make all this a reality?

Methodological RDI (integrated with the university’s focus areas and the regional strategy)

A. New concepts and activities need to be linked with RDI. B. Open Innovation integrates research, teaching, learning and different collaborative developments. It is a feature characterizing all these activities. C. In each topic the RDI areas in the picture can be different depending on the existing strengths of the faculty. D. Orchestration also for European partnerships based on RIS3. This means that each region should locally organise the settings in a similar documented way.

18

Societal Challenges

Industrial Renewal

Working Life Practices

Individual innovativeness

© Markku Markkula

5. Leadership

and Management

3. Human Capital

2. ICT

4. Living Environment

6. Innovation

Process

1.

Science & Society

Interaction

Orchestration of the specific projects and general open innovation activities focusing on the regional spearhead topic.

University’s

Focus Areas

The String Region

12,4 Million

Copenhagen Malmö

Hamburg

Kiel

Lübeck Rostock

- Open Innovation Arenas -

Fast international key players

Food

solutions

Mobile

solutions

Sustainable

solutions

Media

solutions

Flow

solutions

Packaging

solutions

Food

Academy

Mobile

Heights

Sustainable

Business

HUB

Media

Evolution

Training

Regions

Pack-

bridge

Danish-

Swedish

Cluster

Danish-

Swedish

Cluster

Smart

Materials

Smart

Sustainable

Cities

Personal

Health

Areas of innovation (smart specialisation)

Skåne

Local Digital Agenda for the Helsinki Region based on Smart Specialisation – Draft (the process goes on)

We will pioneer solutions to tackle Grand Societal Challenges. We will focus on:

1. Smart Urban Design, especially Open Data 2. Active and Healthy Ageing 3. Low Carbon Economy, especially Cleantech & Smart Traffic This means especially fueling Industrial Leadership by focusing on:

1. Regional Service Architecture and Modeling 2. Digitalization of System Processes, especially Services 3. Mindset and Other Enablers for Start-up and Growth Companies And this means scientific excellence focusing on:

1. Open Innovation Interlinked Ecosystems 2. Human Centered Living Environments: Integrating Real and Virtual

Reality 3. Key Enabling Technologies and their multidisciplinary applications Draft by Markku Markkula Fall 2013: based on the CoR Horizon 2020 opinion,

European collaboration on LDA activities, the EUE/RIE plans, the EU Smart Specialisation Mirror Group and Helsinki Region policy programmes.

SMART HOUSE

SMART CITY

Region SKÅNE with its partners: Road to Strategic Initiatives

e Health

Helsinki Region & Espoo City:

Practical Testing through

Strategic Cases

Establishing Nordic Challenge Platform to initiating and rapid prototyping societal innovations

Creating a joint portfolio of projects, including also the

existing ones, such as from the Helsinki Region side EUE,

ACSI, AppCampus, Digile SHOK, Active Life Village.

More about regions: www.cor.europa.eu

http://cor.europa.eu/en/events/Pages/eu2020-innovation-union.aspx

Find synergies and create strong partnerships

CoR Innovation Union Flagship Conference 27 Nov 2013 / Some Conclusions: 1. Innovation communities operate as ecosystems through systemic value networking in a

world without borders. INNOVATION IS NOT ANY MORE A LINEAR PROCESS 2. Innovation processes are strongly based on demand-driven user orientation and

customers as crucial players in innovations. OPEN INNOVATION 2.0 MEANS PUBLIC&PRIVATE&PEOPLE PARTNERSHIPS

3. Innovation strategies focus on catalysing open innovation and encouraging individuals

and communities towards discovery and effective use digitalised services. CREATING FAVOURABLE CONDITIONS FOR CREATIVITY AND INNOVATION

4. Innovation is often based on experimenting and implementing demonstration projects by partnerships, using the best international knowledge and creating new innovative

concepts. EXPERIMENTING & RAPID PROTOTYPING

http://cor.europa.eu/en/events/Pages/eu2020-innovation-union.aspx

Markku Markkula Chair CoR-EPP Task Force on Europe 2020

My material is based on the research & innovation development of the following persons: Matti Hämäläinen, Timo Itälä, Marko Nieminen and Panu Harmo, Aalto University Olli Nuuttila, Pia Kiviharju and Raimo Miettinen, Active Life Village Ltd Katariina Raij, Paula Lehto and Tuija Hirvikoski, Laurea University of Applied Sciences

CoR Seminar in Ancona

CoR ECOS Study visit in Espoo in 2010

Active Life Village Ltd

We reviewed new opportunities to create new wellbeing

service innovations and business opportunities

Industry

Public sector

Academia

Active Life Village, Espoo Aalto University

Laurea University of Applied Sciences

Triple helix

Users

Extracted from: Miettinen, R. Innovation and Research Environment for Welfare Service Innovations. Active Life Village Ltd. . Presentation held on the 6th September 2010 at CoR / ECOS Commission study visit to Helsinki-Uusimaa Region.

CoR Study Visit to Active Life Village & Caring TV September 2010 Foto by Tuula Palaste-Eerola

The Concept of Active Life Home: Integrated data collection and presentation for elderly care

For this change we need to implement the Knowledge Triangle:

Create Synergy between Research, Education and Innovation and Experiment All through Real Life Cases

Innovation

Education Research

Platform for Blended Learning

Orchestration

Special need to focus on: A. Value creation based on better use of intangible assets B. New processes and methods for university-industry collaboration C. Systemic change and societal innovations

Benefits are evident: For students For teaching staff For researchers For working life professionals

© Markku Markkula

On-going joint process for

defining and co-creating joint action themes

and vision

BA & Flow, demo days & social media, other

forms of effective communication,

virtual reality

Physical space of real hectic action for research with

experiments, demos and prototypes

Passionate key persons,

networking, processes, platforms,

focus on boundary objects

Mental entrepreneurial mindset with joint collaboration spaces and activities Aalto Design Factory & Startup Sauna & Urban Mill Aalto Innovation

Garden (three old buildings) Implementing Knowledge Triangle

Bottom-up activities

Summary:

Towards Smart Regions and Cities

There is a huge gap between the latest research knowledge and real life practice. What do we need to do to fill it? CoR has defined the following guidelines:

1. Europe needs pioneering regions to be forerunners in implementing the EU2020 and through that to invent the desired future.

2. Lifelong learning and the full use of ICT are cornerstones for this change of mindset towards entrepreneurship and innovation.

3. We need the dynamic understanding of regional innovation ecosystems where public, private and third sector learn to operate together. Modernize Triple Helix.

4. We need methodologies to mobilize public private partnerships and encourage especially people participations: user-driven open innovation & living labs.

5. We need to speed up the change by scalability & implementation.

Source: CoR Opinions 2011-2013

Martin Curley, Vice-President INTEL, CoR IU 27 Nov 2013:

Cities and Regional Ecosystems will be key drivers of 21st century growth

Open Innovation 2.0: Twenty Snapshots Discovery Mindset & Experimenting Societal Innovations

Source: Open Innovation Strategy and Policy Group, DG Connect

What new is needed?

EU Programme Period 2014-2020

I will in my presentation focus on what is the European frame for universities to tackle the challenges of the Europe 2020 Strategy (smart, sustainable and inclusive growth). I will start with defining in brief what new is needed?

1. Europe needs more piloting and experimenting: This can be done by increasing testing and implementing demonstration projects related to smart and sustainable development: studying, piloting, demonstrating and verifying new models.

2. Europe needs mindset change towards entrepreneurial discovery: This means creating innovation gardens and challenge platforms for collaboration with the businesses, universities and research institutions within the region: to create a working together culture, innovative concepts and methods for partnerships.

3. Europe needs more societal innovation: This can be achieved by developing the decision making processes needed to address societal challenges: using the best international knowledge and collaboration expertise, developing the required competencies and methods to support decision makers.

4. Universities and other knowledge actors need more synergy within their activities: This means orchestrating project portfolios and megaendeavours, as well as implementing the Knowledge Triangle principle in universities.