Innovative strategies in remote areas

Sara Davies, Jillian MacBryde and Rona Michie

Seminar on Innovation in remote areas, UHI Centre for Remote and Rural Studies,

Inverness, 21st June 2010 Funded by the UK Innovation Centre

(BIS, ESRC, NESTA and TSB)

Sara Davies, European Policies Research Centre, University of Strathclyde2

Outline

• Background to the study• Ideas behind the study• Sectoral structure and innovation• Conditions for innovation• Innovative strategies in remote areas• Initial conclusions• Future research directions

Sara Davies, European Policies Research Centre, University of Strathclyde3

Background to the study

• UK Innovation Research Centre: exploratory study

• Interviews with policy makers & business support organisations in UK ‘remote regions’

• Interviews with State ministries and agencies in Austria, Finland, Norway, Sweden, UK

• Practitioner workshop May 2010• Discussion papers: Sectors, Conditions,

Methods• International academic seminar June 2010

Sara Davies, European Policies Research Centre, University of Strathclyde4

Ideas behind the study

• Studies on innovation and geographical proximity

• Policy focus on innovation ‘in the regions’ • What about remote/rural areas?

– Case studies of innovation in remote areas– Social / organisational proximity– ICT opening up access to markets/knowledge

• Concept of hidden innovation (NESTA, OECD)

Sara Davies, European Policies Research Centre, University of Strathclyde5

Sectoral structure and innovation in remote areas

• Sectoral structure is different in remote areas– More agriculture/forestry/fishing and energy– Less manufacturing – Fewer business services– More tourism/hospitality & public services

• Innovation varies across sectors– Traditional definitions of innovation are biased

towards technology-based manufacturing

Sara Davies, European Policies Research Centre, University of Strathclyde6

Conditions for innovation in remote areas (1)

Weaknesses StrengthsEntrepreneurship

Scattered firms; Weak profitability

Self-employment (but not growth-oriented)

Skills Small labour pool, Weaker education incentives

Hidden skills, Quality of life

Access to finance

Few intermediaries Networks, Public aid

Public research Few universities / public R&D centres

Some niches

Sara Davies, European Policies Research Centre, University of Strathclyde7

Conditions for innovation in remote areas (2)

Weaknesses Strengths

Competition Few firms ?

Demand Small local markets ?

Openness: Hard

Varies across countries but weaker than in cities

Varies

Openness: Soft

Sparse population; Strong ties may create risks

Links across sectors within the region

Sara Davies, European Policies Research Centre, University of Strathclyde8

Innovative strategies in remote areas

• Negating aspects of remoteness• Using embedded natural resources• Exploiting an image of remoteness• Building on embedded human capital• Addressing the constraints of

remoteness

Sara Davies, European Policies Research Centre, University of Strathclyde9

Innovative strategies (1): Negating aspects of remoteness

• Eg. oil/gas-related engineering, electronics• Kinds of innovation

– Can include R&D, technological, organisational and marketing innovations in specialist sectors

– World-leading products for global markets• Conditions for innovation

– Public funding for infrastructure, higher education, research, business aid

– Attraction of dynamic, growing firms• Caveats

– Few regions– Few sectors even in these regions

Sara Davies, European Policies Research Centre, University of Strathclyde10

Innovative strategies (2): Using embedded natural resources

• Eg. renewable energies, Arctic technologies• Kinds of innovation

– Can include R&D, technological, organisational and marketing innovations in specialist sectors

– Focused on national/global markets

• Conditions for innovation– Expertise and technology, often from outside– Natural resources that need to be used in situ

• Caveats– Limited to resource-based sectors

Sara Davies, European Policies Research Centre, University of Strathclyde11

Innovative strategies (3):Exploiting an image of remoteness

• Eg. food, creatives, tourism, outdoor goods• Kinds of innovation

– Mainly organisational and marketing– Focused on national/global markets

• Conditions for innovation– Value of remoteness in urban markets– Local human skills & expertise– Policy support for infrastructure

• Caveats– Limited to certain sectors (some with low profitability)

Sara Davies, European Policies Research Centre, University of Strathclyde12

Innovative strategies (4): Building on local human capital

• Eg. business services, creatives, tourism• Kinds of innovation

– Mainly organisational, marketing, technological adaptation

– Focused on national/global markets

• Conditions for innovation– Depends on area’s natural, cultural, social attractiveness– Transport and ICT networks

• Caveats– Some sectors may involve relatively low pay, long hours

and poor job security

Sara Davies, European Policies Research Centre, University of Strathclyde13

Innovative strategies (5): Addressing

the constraints of remoteness

• Eg. e-health, community enterprise• Kinds of innovation

– Mainly organisational, technological adaptation– Focused on local/national markets

• Conditions for innovation– Public sector funding or policy commitment to

universal services– Often depends on local expertise, skills and

commitment

• Caveats– Facilitated by potential for local solutions to be

applicable in other places (more efficient/effective public services)

Sara Davies, European Policies Research Centre, University of Strathclyde14

Initial conclusions

• There is innovation in (some) remote rural areas• Innovation potential in a remote area depends on

– Its sectoral structure– Its conditions for innovation – which in turn depend eg. on

national/regional policy decisions

• Innovation strategies in remote areas include:– Negating aspects of remoteness– Drawing on locally embedded natural or human resources – Exploiting an image of openness– Addressing the constraints of remoteness

Sara Davies, European Policies Research Centre, University of Strathclyde15

Future research directions

• Conditions for innovation in remote areas– Which conditions matter most for individual firms and

sectors in remote areas?– How are conditions evolving due to technological changes

or shifts in business strategies or policy decisions?

• Innovative strategies in remote areas– How are firms and other actors innovating in peripheral

areas? – What differences are seen across sectors and areas?

• Methods for researching innovation in remote areas– What methods could be used for studying remote

innovation?

Sara Davies, European Policies Research Centre, University of Strathclyde16

Thank you for listening!

Sara.Davies@strath.ac.uk

http://www.eprc.strath.ac.uk/irr/