1 EU Committee of the Regions CoR Territorial Dialogue on "Territorial Pacts to implement Europe 2020" Brussels, 22 February, 2011 Markku Markkula, Member of the Espoo City Council, CoR member, Rapporteur of the Europe 2020 Flagship Initiative "A Digital Agenda for Europe", Rapporteur of the CoR Outlook opinion "The role of local and regional authorities in achieving the objectives of the Europe 2020 strategy", (EPP/FI) Pacts for Europe 2020: Good Practices and Views from EU Cities and Regions How can the city and the region become home for innovation activities that aim at solving grand societal challenges? How should the decision-making process be organized when implementing initiatives that aim at solving grand societal challenges? Need for Radical Transformation The EU political leadership has stated the need for renewal. It can be summarized with the following, as stated in the flagship initiative Digital Agenda for Europe: The crisis has wiped out years of economic and social progress and exposed structural weaknesses in Europe s economy. Europe s primary goal today must be to get Europe back on track. The track, however, is not the same as it used to be. We need to invent the future for Europe. The measures concern all aspects of governance in the public and private sectors. The ongoing global change will have an enormous impact on everything. The European Parliament resolution of 5 May 2010 on a new Digital Agenda for Europe stated: "this digital revolution can no longer be thought of as an evolution from the industrial past but rather as a process of radical transformation". And the opinion of the Committee of the Regions approved on 6 October 2010 had the same message: the Information Society has been a tremendous accelerator of economic and social progress. The required transition from an Information Society to a Green Knowledge Society can even be seen as a type of paradigm shift. Figure 1: Finland to Pioneer Paradigm Shift To enable this radical transformation Europe needs to design and implement multilevel governance approach, including contractual commitments, and also pioneering regions and cities to show what this means in practice. This presentation identifies the necessary steps to be taken in Europe in general, and also describes the pioneering activities in the Helsinki Region.
2 Increasing Competitiveness through Human Capital Cultural richness and enriching collaboration between cultures have, throughout history, been strengths of Europe. Due to the globalization and the network society business practices, the competitiveness of Europe must now be seen in a new light. Competitiveness must be strengthened in diverse ways, putting emphasis on the one hand on critical success factors and focus themes, and on the other hand on skills and abilities and well-being of all regions and inhabitants, thus improving the probability of development and success. Competition is a positive thing when it aims at improving the quality of life and skills of all participants. It is not a question of some being oppressed and some successful, but of increasing the common good. The successful implementation of EU 2020 strategy depends on systemic change. Characteristics of systemic change include strong purposefulness and goal setting based on deep understanding of the interconnection and mutual dependencies of various factors and phenomena, as well as the targeted collaboration of the actions of different decision making and activity levels. Old measures and ways of working do not function effectively anymore. We need courage and ability for open renewal. The manifesto of European Year of Creativity and Innovation 2009 provides a solid cultural basis for the renewal needed during the next few years: 1. Nurture creativity in a lifelong learning process where theory and practice go hand in hand. 2. Make schools and universities places where students and teachers engage in creative thinking and learning by doing. 3. Transform workplaces into learning sites. 4. Promote a strong, independent and diverse cultural sector that can sustain intercultural dialogue. 5. Promote scientific research to understand the world, improve people s lives and stimulate innovation. 6. Promote design processes, thinking and tools, understanding the needs, emotions, aspirations and abilities of users. 7. Support business innovation that contributes to prosperity and sustainability. What is the meaning of all this on a regional level? Too often people still remain objects of different actions rather than becoming the subjects. The main target for the renewal measures is not changing the structures and administration, but changing the working culture. Of course, changes will be necessary in order to improve the preconditions for developing the working culture and enabling the flourishing of the inhabitants and their potential. This requires strengthening the role of cities - however, not their old role as service providers. The new role of the cities is to enable proactive collaboration and business activities. The cities should create a regional culture of collaboration, characterized by responsiveness in relation to the motives, aims and resources of people and different communities, including businesses. The newest research on the competitiveness of the Helsinki Metropolitan area stresses the increasing importance of human capital. Latent potential should be realized and used to strengthen the community. Resources must not be directed in the structures of institutions, but rather in people. The cycle of competitiveness builds up in a new way and new order: sustainable well-being > sustainable innovations > sustainable competitiveness > sustainable well-being. Local Digital Agendas Cohesion policy is one of the key policy areas through which regional and local authorities can carry out many of the flagship initiatives. "Territorial Pact on Europe 2020", as a distinctive part of the strategy's governance, should be used as a practical instrument in line with the inter-institutional partnership principle as officially recognized in the strategy. Territorial Pacts could be conceived as natural components inside of the National Reform Programmes. They should not represent new bureaucratic instruments, but
3 rather concrete mechanisms inside of the Member States' internal policy structures to ensure a commitment of all levels of public authorities to the national objectives towards EU 2020 Strategy. To pick up one example from the Digital Agenda flagship, there is list of initiatives where regional and local authorities can clearly deliver results: e-government to improve supplying of public services in education, health, social inclusion and territorial planning; increase the interoperability between central, regional and local administrations; enhance literacy in ICT; step-up awareness-raising on stimulating the infrastructure upgrade; support the development of public-private partnerships involving local and regional authorities; and support ICT development for SMEs in the area of public ICT services, to name but a few. I am convinced that by integrating Territorial Pacts and Local Digital Agendas in practice we can produce answers to the general questions: How can local and regional authorities enable the desired radical change? and How can the strategies and operational programs of the EU and its member states be put in action in local and regional levels? A solution can be found in an inspiring activity that interconnects the essential potential actors from several levels. The focus needs to be in action, not again in planning and drafting documents. Towards Smart Cities Applying the latest theories and practices of leadership and change management in a networked society, the critical success factors need to focus on working culture and decision making. The challenge for EU 2020 is its regional and local role: Can we get regions to implement EU 2020 and the flagships, and by that to accelerate the reaction speed in answering the grand societal challenges and changing needs? A partial answer to this is the Local Digital Agenda, the challenge with respect to it being: Do we get regions around EU to draft their local digital agendas and get committed to implementation at the high political priority? By the help of the Local Digital Agendas we could: 1. Strengthen the decision makers' understanding of digital economy and the huge opportunities to enable the renewal by the flagships. 2. Promote radical citizen and customer centeredness and new practices in leadership, both on strategic and operational level. 3. Create favorable conditions to change the attitude and mindset towards creativity, innovativeness and entrepreneurship. 4. Interconnect small-scale project and pilot activities to a whole supporting the same goal. 5. Renew the working culture, since silos in management prevent efficient service development. Member state level, local level, third sector and businesses must be open-minded and cross organizational boundaries in seeking working practices for developing customer-centered production and optimizing costs. It has often been stated that Europe, in order to again become a global-level pioneer as a strong area characterized by humanism and multi-culturalism, needs pioneer regions that are open-minded in developing and testing new ideas and concepts of radical innovations. Typically this means a systemic approach towards human-centric regional innovation ecosystems. The smart city concept needed is strongly based on integrating the three factors which political decision making is facing in trying to tackle the grand societal challenges: a) Society with people and their human potential and choices being the core driver or preventer of change; b) Technology and economy effected by the digitalization enabling new approaches and new business concepts creating prerequisites and conditions for the desired well-being development; c) Environment with limited tolerance requiring much more attention than in the past. For the desired smart city and smart region development we need new kind of innovation platforms to enable demonstrations and rapid prototyping.
4 Figure 2: Manifestations of User-driven Innovations Encouraging user-driven innovation is high on the priority list of a regional innovation ecosystem. This is due to ongoing socioeconomic development and evolving business models. In addition due to fast ICTdevelopment, users now have much improved capabilities and increasing willingness to participate actively in innovationrelated activities. The importance of developing the Helsinki metropolitan area for Finnish competitiveness as a whole has been generally recognized. In our view, the competitiveness strategy is brilliantly carrying out the vision for the metropolitan area, according to which The Helsinki Metropolitan Area is a dynamic world-class centre for business and innovation. Its high-quality services, art and science, creativity and adaptability promote the prosperity of its citizens and bring benefits to all of Finland. The Metropolitan Area is being developed as a unified region close to nature where it is good to live, learn, work and do business. The Competitiveness Strategy for the Metropolitan Area defines the priorities for developing international competitiveness in the area and the actions needed to achieve them. According to the Strategy the City of Espoo develops the Otaniemi-Keilaniemi-Tapiola area as an innovative centre based on the interaction of science, business and art. This area (T3) can form, acting together and in interaction with each other, a globally unique innovation environment. How does the smart and responsive city operate? We have defined a few basic characteristics: People are too accustomed to being service receivers. In a responsive city, the scattered resources play together and the strengths of different players are interconnected in a new way. The central question is not whether it is the city or some other instance that provides the service. Instead, what is essential is the value chain that consists of the collaboration of different actors. A responsive city can build its well-being and competitiveness by gathering the resources of individuals, communities, associations and businesses together. It is essential that the city knows the communities, associations and businesses and engages in an ongoing dialogue with them. At the same time, the city must be able to modify its structures and processes according to the changing abilities and motives of the other actors. The city needs courage to replace the traditional with the new and untested when the old ways no longer produce the desired outcomes. The role of the city changes: it becomes a partner that cultivates the resources of the different actors, including the latent resources. Operations are built in a new way. The city directs its resources for creating favorable conditions for an interplay and synergy between the resources of businesses, citizens and public sector. The competitiveness is based on people-public-private partnerships. This cannot be reached without new types of concepts. The Energizing Society program concentrates on implementing theories proven effective and on continuously developing these theories and concepts. Digitalization enables practices that positively differ from the traditional ones. The paradigm shift can be implemented in practice.
5 Regional Innovation Ecosystem To tackle these questions, we are starting a special mega-level project Energizing Society (organized as a RYM SHOK research programme www.rym.fi). As part of this, we use the Local Digital Agenda for the Helsinki metropolitan region with the Otaniemi science community (www.otaniemi.fi and www.aalto.fi) area together with local industries and municipalities as the pioneering innovation hub. The area includes head offices of top international large companies like Nokia, Kone and Fortum, and also small global stars like Rovio (their product Angry Birds being the global number one mobile game) and other Aalto UnIversity Venture Garage start-ups. The enabler for the desired transformation will in our case be the Regional Innovation Ecosystem (creating a joint collaboration culture and platform for systemic innovation). The key principles and practices for that are Triple Helix (creating more cooperation between companies, universities and cities) and Knowledge Triangle (creating more synergy between research, education and innovation). This Energizing Society -program is a good example of the need for more benchmarking and collaboration between different European regions. Moreover, the program is an example of a closer collaboration between the global research network of the universities and of transferring the research results into practice. The main player in the program being Aalto University, the forerunner of the European university reform, we will also concentrate on the development activities required in EU level. Examples of this include collaboration with EIT ICT Lab operating in our region, local and regional implementation of the Digital Agenda Europe and the new European Partnership Programmes, such as Smart Cities. Figure 3: The Hub Framework for the Innovation Ecosystem Evaluations Hubconcepts Inc. has conducted extensive best practice studies in leading Asian, American and European innovation environments in 2009-2010 and developed proprietary evaluation and management framework for practical innovation ecosystem analysis. This concept provides practical framework and tools for analyzing and evaluating the success factors of the global best practice innovation hubs. Through this Energizing Society programme we can help several EU initiatives, as an example the European Innovation Partnerships to be established as a result of the Innovation Union flagship. We also analyze the need to renew the guidelines and practices of Structural Funds and other regional policy funding mechanisms and instruments in implementing the EU 2020 Strategy.