Path development in different regional settings. Regional policy approaches in the global economy

The project has been part of the Research Council?s ?Program for R&D and innovation (VRI)? in the 2014-2016 period. The main question in the project is what characterizes the long-term development of industry and innovation systems in different regions. The empirical analyses include industrial development and policy formation in four regions in Norway; Agder, Rogaland, Hordaland and Finnmark. Some analyses are carried out for all Norwegian regions, and the analyses of policy formation compare the four Norwegian regions with Skåne (in Sweden) and the Basque Country. The project has been managed by Agderforskning and carried out jointly with IRIS, Bergen University College and the Northern Research Institute Alta. The research institute CIRCLE at Lunds University and the research institute Orkestra in San Sebastian in Spain also participate in parts of the project. The project has studied four main themes that make up key challenges for future regional industrial development in Norway, and which have become even more relevant in the recent wake of downsizing in the oil and gas sector. The first theme addresses renewal of regional industry. An important question includes how different types of regions can strengthen their already strong industries and at the same time develop new industries. Regions find it challenging to develop growing businesses outside of regionally strong industries that attract a lot of resources, but this is vital to ensure long-term industrial development. Analyses in the project demonstrate that much regional networks, entrepreneurial activities and activities by the financial sector first of all are strengthening existing, strong regional industries rather than stimulating growth of new industries for the regions. The second theme addressed challenges from increasing globalization, seen amongst others in increased foreign ownership of firms. Central questions are what lead multinational companies (MNCs) to establish and maintain activity in Norwegian regions, and how MNCs can strengthen the innovation capability of more genuine regional businesses. The project demonstrates that knowledge sharing inside MNCs leads to renewal of the regional industrial structure, however, there also exist important barriers for growth of entirely new activity in units of MNCs. These include amongst others that firms in MNCs are assigned specific roles in the value chain and particular product and market segments, which hamper firms? development of new business activities. The third theme is based on the fact that innovation activity almost always involves collaboration among people within and between enterprises. A pertinent question is how firms link and utilize internal and external knowledge sources in innovation processes. The theme also studies how firms manage to mobilize employees? knowledge and ideas for innovation purposes. Results from several quantitative studies in this part of the project contribute in downplaying the importance of the regional context for firms? innovation capability, in particular in less central regions. Studies demonstrate amongst others that most cooperation among firms that strengthen their innovation activity results from conscious chose of partners rather than being the result of random meetings (that mostly occur locally). Furthermore, learning and innovation benefit most from cooperation with partners that are neither too proximate in geographical and cognitive terms nor too distant (e.g. see thinks very differently). Regional cooperation is seen to stimulate innovations in R&D-intensive regions but to have little or no significance in regions with less R&D-activity. The fourth theme is partly based on results from the first three. The theme analyses what are the most relevant policies for stimulating industrial development in different regions. This analysis is based on the fact that industrial and innovation policy needs to be adapted to diverse regional conditions. The project finds that the development of innovation policy is far more different among the six regions (four Norwegian and to foreign) than expected based on the fact that policy makers tend to copy best practice tools among regions. The differences do not only reflect differences with regard to size and extent of institutional support from, amongst others, the regional knowledge infrastructure among the regions. Differences reflect also variations in how local actors have managed to adapt to and use macro changes. Policy for restructuring and renewal of regional industry needs both private entrepreneurs, innovative firms, development of regional innovation systems, such as new educational programmes, and support adapted to emerging industries. There is a need for regional adapted policy that stimulates both innovative actors and that makes innovation systems able to supporting groups of these with common challenges and requirements.

The project is cooperation between research institutions in four regions: Agder, Rogaland, Hordaland and Finnmark, and also involves cooperation with leading foreign researchers. A main challenge facing all four regions is the securement of long-term indu strial development. An important question is to what extent and how the regional industries manage to renew themselves in response to increasing demands from a more knowledge based and global economy. The project addresses this question through four sep arate, but interdependent work packages (WPs). The first WP examines renewal of regional economies. The research questions concern the identification and investigation of factors that lead to path extension, path renewal and path creation in different typ es of Norwegian regions. The second WP relates to globalisation and regional embedding. Research questions consider the regional specific factors that attract and retain activities in multinational companies in Norwegian regions, and how the globalisation of Norwegian firms affects regional innovation capabilities. The third WP examines knowledge flows within and between firms. The research questions concern the identification of organisational conditions and structures that best enable firms to mobilise employee competence in innovation activity and of knowledge sources and channels that are important in firms' innovation processes. The final WP revolves around innovation policy and regional network governance. The main research question asks what types of policy initiatives and network governance prove most relevant and effective in stimulating industrial renewal and path creation in different regions. More systematic insights into these themes will assist in the development of policy instruments and w orking methods that will strengthen the innovation capabilities of different types of regions; both instruments in the VRI program and other parts of the support system.