THE PROCESS TO CREATE AN INNOVATION STRATEGY: THE CASE OF WESER-EMS, GERMANY
By Robert Hassink
Professor of Economic Geography, University of Kiel, Germany Adjunct Professor of Economic Geography, University of Oslo, Norway
Description of the approach
The region of Weser-Ems in north-western Germany was the first region to develop a regional innovation strategy supported by the European Union in 1998. With 15,000 Km² it has a comparable land size to Agder (16,000). With a population of 2.5 million inhabitants it is for German standards a relatively thinly populated region (162.7 inhab/km²). The region corresponds to the NUTS II- level.
Weser-Ems is located in the most western part of the state of Lower Saxony (Niedersachsen). The region consists of 12 counties (Ammerland, Aurich, Cloppenburg, Emsland, Friesland, Grafschaft Bentheim, Leer, Oldenburg, Osnabrück, Vechta, Wesermarsch and Wittmund) and five cities (Delmenhorst, Emden, Oldenburg, Osnabrück and Wilhelmshaven). Weser-Ems used to be a so-called administrative district (Regierungsbezirk), an administrative level between the state (Land) and counties (Kreise). The administrative district of Weser-Ems was until its abolishment, in 2005, the main initiator of the regional innovation strategy. Funding for innovative projects often comes from Hanover, the capital of the state of Lower Saxony.
The region has three relatively young universities in Oldenburg, Osnabrück and Vechta and two polytechnics (Osnabrück and Oldenburg/Ostfriesland/ Wilhelmshaven). Of the 120 research institutions in the Lower Saxony state, 90% are concentrated in the eastern triangle Hanover- Göttingen-Braunschweig. Hence, there are only very few non-academic research institutions in Weser-Ems. This is seen as a main bottleneck for innovative activities in the region. Traditionally, this is a relatively structurally weak region with a relatively low GDP per capita. Also the educational level of the age-cohort 25-64 years is below the national average, as are the R&D- investments as share of the GDP.
The main impetus to start to develop a regional innovation strategy can be seen in external financial support from the European Commission and the state of Lower Saxony. Particularly the launch of the RITTS/RIS programmes of the European Commission was the main reason why the regional stakeholders met regularly between 1995 and 1997 to discuss a submission of a proposal to Brussels. Weser-Ems was selected by the European Commission as one of 19 model regions in Europe to develop a regional innovation strategy.
The actual formulation of the regional innovation strategy went through a bottom-up procedure in which about 1,000 regional stakeholders worked in 15 working groups. The
thematic working groups focused on themes such as ICT, environment-friendly transport logistics, energy industry, endogenous innovation potential and renewable resources. The regional innovation strategy was formulated on the basis of a strengths-weaknesses analysis that was carried out by experts from the relevant regional groups and institutions. The aim of the regional innovation strategy is to increase growth and employment in the region Weser-Ems through the support of innovativeness and competitiveness of companies. The regional innovation strategy covers the whole area of the administrative district Weser-Ems.
In order to implement the actions of the regional innovation strategy the RIS project office was set-up with the financial support from Brussels and the state of Lower Saxony. The RIS project office runs the day to day business and tries to acquire funds from the European Commission, the state government of Lower Saxony, as well as from the federal government. From 1999 to 2001 there has been financial support from the European Commission (EFRE- programme RIS+) to carry out the strategy. After 2001 the RIS project office has managed to acquire funds on a more ad-hoc basis from various sources and spatial levels (supranational, national, regional). The annual budget of the RIS project office only based on membership fees is about 300,000 €; the total budget including project money strongly varies.
In addition to the RIS project office, a steering group of 24 members regularly meets to monitor the work done by the RIS project office. The steering group members consist of local authorities, chambers of commerce, industry association, large companies, as well as universities and polytechnics. The steering group also plays an important role concerning evaluation. They assess the effects of the proposed projects on the regional economy in general and on local small and medium-sized enterprises in particular.
The operative basis of analysis and project formulation was formed by three sub-regional conferences, Land Oldenburg, Osnabrück-Bentheim-Emsland and Ost-Friesland. The role of these sub-regional conferences as bottom-up processes is to develop the content of a regional innovation strategy and policy. This type of conferences can also be found in other German states, such as North Rhine-Westphalia (Gualini 2004). At this sub-regional level the main actors involved in innovation, such as companies, chambers of commerce, local authorities, universities, polytechnics and public research institutes regularly meet to select and prioritise projects. Selection criteria for the funding of projects are among others: a high relevance for the regional economy, existing potential for innovation in the region, significant potential for growth and a contribution to employment creation.
The bottom-up component is reinforced by the participation of regional councils, which consist of the main regional stakeholders, including both private and public partners, who together seek to foster local and regional development in their regions. Public grants are given to the regional councils as technical and organisational support to carry out public relations and provide the public with broad information. They also provide regional firms with information about the regional policy programmes and the ways on how to obtain subsidies. This includes advisory workshops and organising events, but also the acquisition of projects. Furthermore these regional councils help with the monitoring and assistance of regional projects, including projects supported in the framework of the regional innovation strategy. Project initiators are assisted in the process of developing applications and are accompanied until approval. The regional councils interact closely with the local business development offices and hence try to build up networks of all relevant actors.
Rationale and relevance of the approach to Agder
In general, the rationale to devise and implement a regional innovation strategy lies in more effectively organising and co-ordinating existing innovation policies and institutions. In many regions, policies and institutions can be found that are initiated and financed by ministries and administrations at several spatial levels (local, regional, national, supranational). Lacking co- ordination at the regional level leads to overlap and missed chances of synergy. Extensive and well co-ordinated interaction between regional institutes and policies makes them to be more than just the sum of parts. Moreover, by carefully analysing the strengths and weaknesses of the policies and institutions in the region, one can devise new institutions and policies that can reduce existing gaps and deficits in the region.
The Weser-Ems region has some similarities with the Agder region; it is a semi-rural area, with a rather peripheral location in Germany; it has a few medium-sized cities and three relatively small and young universities, which are actively involved in the regional innovation strategy. Due to its coastal location it has some maritime and tourism activities, but also a strong agricultural sector and food processing industry. The process of developing a regional innovation strategy seems to be of high relevance to Agder, which seems to suffer from a too fragmented, thick institutional tissue and a lack of bundling and prioritising. Moreover, the way the bottom-up approach of developing and selecting supported projects seems to fit to the consensus-oriented egalitarian society of Norway.
Results of the approach
The main outcome of the strengths-weaknesses analysis was that the region lacked research and development capacities in some important locally-embedded technology fields. The main initiative to tackle this problem was to set up the so-called competence centres. These centres were established on the initiative of university professors, researchers at public research establishments and researchers in local companies. The centres act as observers, analysts, triggers and suppliers of innovations, the latter on the basis of joint research projects. Often the staff involved in the competence centres and projects are financed by their main employer, such as the chamber of commerce, university or public research institute. If they work successfully and can foster technology transfer, spin-offs and entrepreneurship a fully fledged cluster can be the result in the future.
Since 1998, the following competence centres have been created: food industry (NieKE), traffic and logistic (LOGIS.NET), renewable resources (3N), future power supply (RIS Energy) and health care management industry (GewiNet). As a successful example, 3N is the main competence centre and contact partner for information about renewable resources and bio-energy in Lower Saxony. It gives advice along the value added chains about plant breeding, crop production, harvest and logistic, processing and process engineering, as well as the commercialisation of products. It is a platform and expert intermediary between industry, science and public administration. Other activities carried out by this competence centre include the acquisition, control and coordination of research projects, the evaluation and development of technical facilities/ facilities of bio-energy, statements, reports, evaluations, feasibility studies, the supervision of cross-linked internet platforms (3N/NaRo.Net/BEN-Online/RIKO-databank), public relations, trade fairs and expositions. It also regularly organises congresses, expert conferences, workshops and training courses.
In addition to competence centres as the core element of the regional innovation strategy, other individual projects are supported, as well, on the basis of public-private partnerships. Examples are the “youth for innovation” (y4i) project, which promotes innovation in schools, and the “impact assessment systems and methodologies for innovation excellence” (IASMINE) project, which investigates new methods to evaluate innovation strategies in an international
comparative way. The regional innovation strategy in Weser-Ems has realised an increase in linking knowledge resources and thus an increase in knowledge transfer also with regional companies.
Overall, due to the regional innovation strategy a broad and sound consensus among the actors in the Weser-Ems region has been achieved. According to Kipp (2007) this EU RIS pilot project marked the beginning of an innovation-oriented process of regionalisation.
Reasons for success/failure of the approach
All in all, the RIS/RITTS programme of the European Commission led to the initiative to develop a regional innovation strategy in this relatively peripheral and structurally weak region. The core element of this strategy, namely the competence centres, has set in motion a development towards clusters, although it has become clear that the road towards clusters is long. Due to the regional innovation strategy the relatively few endogenous innovation potentials that are available in this region are better and more efficiently used and fostered. However, recently due to changes in governance structures, namely the abolishment of the administrative district, the regional innovation strategy seems to be institutionally somewhat weakened in the Weser-Ems region (see below). Moreover, due to a lack of transparency concerning evaluations of the regional innovation strategy, it is hard to assess the real impact of the strategy on regional competitiveness, innovativeness and economic growth.
The conception of the competence centres is positively assessed by the main innovation actors in the region, although it has been criticised that the establishment often has taken several years. The success of individual centres strongly depends on the motivation of the involved actors. The lack of incentive structures has been criticised.
The obstacles faced and response taken
The main obstacles faced are related to changes in governance structures. In 2005 the RIS project office converted into a new organisational structure. It became the foundation of “Weser- Ems – Regionale Innovationsstrategie e. V.” (RIS Weser-Ems) in the form of a professional association. This change is related to the abolishment of administrative districts (Regierungsbezirke) in Lower Saxony. After the abolishment of the administrative district Weser- Ems in 2005, RIS Weser-Ems got a new organisation structure. The counties, cities, large companies, chambers of commerce and higher education institutes have set up professional association with the name Regionale Innovationsstrategie Weser-Ems. With the change of organisation structure, the RIS project office also moved to premises of the energy company EWE AG in Oldenburg, which seems to have got a larger say in the organisation. Accompanying this organisational change means also a stronger focus of support on the needs of the regional economy.
In addition, the guiding themes have been newly formulated and include now five industries: „food industry‟, „logistics and transport‟, „renewable primary products‟, „future energy supply‟ and „health, wellness and tourism‟. Three main themes that cut across these five guiding themes are „modern information and communication technologies‟, „technology transfer‟ and „training and qualification‟.
In the framework of planning for the EU structure funds support period 2007-2013 there were plans to give RIS Weser-Ems an autonomous regionalised budget of about 20 million EUR. However, the state of Lower Saxony decided to give each individual county a sum of 5 million EUR which should include co-financing. This meant a blow for the continuation of financing of a regional innovation strategy. Although the state of Lower Saxony expects the counties to finance cross-border innovation projects with these funds, in reality they use the funds to support their
own small and medium-sized enterprises. The upshot of this has been an increasing fragmentation of funds and a weakening of the regional innovation strategy.
According to Kipp (2007), who interviewed the main innovation actors, RIS Weser-Ems certainly has strengthened the networks of innovation partners in the region. The bottom-up process behind the strategy that is mainly based on existing endogenous competences and organisations is certainly the main explanatory factor behind the strength and enthusiasm of the innovation networks. RIS therefore has a broad backing from innovation partners in the region. Despite this broad backing, institutional and governance reorganisations such as the abolishment of the administrative district and the reorganisation of the distribution of EU funds, have recently reduced the capacity to act for RIS Weser-Ems. Many important actors in the region fear a further decrease in importance of RIS Weser-Ems in the future. Others, on the other hand, see in RIS Weser-Ems the last trump card local authorities have in north-western Lower Saxony after the abolishment of the administrative district. The challenge for RIS Weser-Ems in the near future will be to develop concrete and successful innovation projects from which all counties in the region will benefit.
Considerations for adoption of this model in Agder
Given the fragmented institutional tissue of the Agder region and the lack of critical mass in some industrial and technological areas, the regional innovation strategy of Weser-Ems seems to have elements that could be considered to adopt in Agder. Particularly the bottom-up process that led towards the strategy and its main outcome, the competence centres, seems to be a promising approach for Agder. As written above, the way the bottom-up approach of developing and selecting supported projects seems to fit to the consensus-oriented egalitarian society of Norway. It will help to raise enthusiasm among innovation actors in Agder to develop a regional innovation strategy and it will help to prioritise projects in a consensus-oriented manner. The main incentive to develop the strategy in the Weser-Ems region, however, was the support programme of the European Commission, an opportunity that is lacking in Norway. In Norway, the central government might play an important role in developing incentives for regions such as Agder to develop a regional innovation strategy.
Contact details and website for further information
Kipp, Daniel (2007) Regionale Innovationsförderung kleiner und mittlerer Unternehmen - Integration von Wissenstransfer, Netzwerkmanagement und Finanzierung. Universität Osnabrück, Fachbereich Kultur- und Geowissenschaften (PhD thesis).
Gualini, Enrico (2004) Regionalization as „Experimental Regionalism‟: The Rescaling of Territorial Policy-making in Germany. International Journal of Urban and Regional Research 28, 329-353.
Arbeitsgemeinschaft der Landkreise und kreisfreien Städte im Regierungsbezirk Weser-Ems (1998) Regional Innovation Strategy Weser-Ems: Strength-weakness analysis. Oldenburg.
http://www.ris-weser-ems.de http://www.iasmine.net/ http://www.y4i.net/ http://www.3-n.info/
CONCLUSIONS
In the knowledge-based economy, entrepreneurship and innovation are of fundamental importance to regional economic growth, particularly in developed cities and regions across the OECD. In the current context of financial crisis and economic recession, it is essential for local and regional governments to define and pursue an innovation and entrepreneurship strategy to meet the short-term imperative of weathering the crisis while ensuring long-term support for a broader economic development plan that will underpin growth during the recovery. In addition to this challenge, globalisation has enlarged the market and global competitors are putting pressure on mature and emerging economic sectors in terms of prices and the introduction of innovative products and services. Innovative and entrepreneurial activities that increase efficiency and product differentiation are therefore essential to face these challenges. It is important that appropriate policy support is designed and implemented to address the problems affecting firms and the local environments in which they operate in order to maintain jobs and economic growth locally and to compete in the global markets.
Agder has launched an important and ambitious multi-stakeholder exercise to define and implement an innovation and entrepreneurship strategy across the region that will provide a framework for future policies. Public authorities from both the East and West counties, together with representatives of the private sector, the University of Agder, and various local stakeholders are working together on a regional plan that will set the guidelines for the economic development of the region in the long run, based on knowledge-intensive activities. The Agder VRI Programme has been the basis for a first round of discussions to better understand the region‟s innovation assets and challenges, but some regional capabilities appear to be underexploited or need to be strengthened in order to achieve the expected results.
Agder is in a position of considerable strength in terms of its human capital and labour market performance, thanks notably to a highly-qualified workforce. Also, the presence of mature and well reputed leading companies in world niche markets is an important asset for the region. In terms of regional co-operation and political will, there is a remarkable tradition of collaboration among people and organisations in the Agder region, including during hard times, which is reinforced by the establishment of several notable formal regional partnerships across the two counties.
In addition, the region benefits from an important share of immigrants which offers the