1. Learning by Doing – Experiences from RIS Tartu Rene Tõnnisson Institute of Baltic Studies

2. Key Message It is useful to learn how other regions have done it but the best way is learning by doing and don’t be afraid of making mistakes because...

3. Mistakes come from lack of experiences and experiences come from mistakes

4. Presentation Outline Introduction to the region Lessons learned in Consensus building phase Challenges of the Analysis phase Management and Administrative issues Strategy and Implementation

5. Tartu and South Estonia Tartu. Population - 350 000 inhabitants Area – 15 000 sq Km Main sectors – Forrest- Wood, Metalworks- Machinery, Food, Textile

6. RIS Tartu and South Estonia Project period 01.01.2002 – 31.12.2004 Project Partners Tartu City, Uppsala County and Shannon Development Total Budget 485 000 Euros

7. Consensus Building Simple questions - What do we mean by Innovation - What is the aim of the Regional Innovation Strategy

8. Joseph A. Schumpeter (1883-1950) ©Thorvaldur Gylfason We decided to follow the economic theory of innovation by Joseph A. Schumpeter, today continued by Chris Freeman, Carlota Perez and many others. Schumpeterian economics is the one kind that allows you to set innovation into a larger framework - and it is he who coined the term to begin with.

9. WHAT ARE INNOVATIONS AND HOW DO THEY WORK? because at least for a time, the novelty that marks the innovation makes it impossible for competitors to get “into the action” The ENTREPRENEUR in search of a SHORT-TERM MONOPOLY, which only an innovation - except if there are laws to the contrary - provides AND WHAT PROPELS INNOVATION? INNOVATIONS ARE NOT INVENTIONSINNOVATIONS ARE NOT INVENTIONS innovation is an economic terminnovation is an economic term innovation is lucrativeinnovation is lucrative Innovations are new products, processes, or distribution or financing mechanisms that are succesfully brought into the economic process (market)

10. Tartu Regional Innovation System

11. But this is just half of the story... There are innovations that are only good for the entrepreneur, and there are innovations that are also good for state, society, and economy. And while entrepreneurship is nice as such, the interest for the state side and regions lies in promoting it in precisely those areas that have a “snowball effect” to produce a general increase in production and wealth.

12. The aim of RIS... is thus to promote and support development of such an innovation system in region which would help the region to increase its competitiviness and thus welfare in large For that there are different strategic components...

13. INSIGHT and VISION &APPROPRIATENESS and REALITY and REALITY

14. REMEMBER ALSO THE SAYING BY DONALD RUMSFELD: “There is no Long-Term without the Short-Term”

15. Analysis Phase Analysis Paralysis Qualitative versus Quantitative approach Loosing the interest of companies

16. Some of the questions regions should ask: Whom do I have? Whom can I attract? PEOPLE PARTNERS With whom can I work here? and abroad? INFRASTRUCTURE How am l connected and reachable? MONEY Can I afford failures? STAMINA Can I afford 1% success rate in 20 years? ENVIRONS Will people actually want to live here?

17. Management and Administrative issues Halfway through the project some management problems will most definetly emerge Defining the clear role for foreign partners Cashflow management Reporting modalities

18. Strategy Building and Implementation Domination of strong partners Pilot Actions Funding scheme for implementation

19. Strong University as a dominant stakeholder Population of Tartu 100 000 inhabitants 25 000 University Students University of Tartu founded in 1632 and the only classical university in Estonia with 11 faculties from Theology to Medicine

20. Pilot Actions They are very important as they are only tools to provide immediate tangible results Start with them as early as possible and devote as much budget as possible

21. Big challenge – How to move from fashionable rhetorics on Innovation

22. ... to understanding that it can really be matter of life and death

23. Only then the result, as depicted in Lorenzetti’s Fresco in the Siena City Hall, may be an enlightened public policy that, through the promotion of the right economics, provides welfare and happiness for all in the region, so that the people can dance in the streets Only then the result, as depicted in Lorenzetti’s Fresco in the Siena City Hall, may be an enlightened public policy that, through the promotion of the right economics, provides welfare and happiness for all in the region, so that the people can dance in the streets

24. THANK YOU! Contact Information: Rene Tõnnisson Institute of Baltic Studies Email: rene@ibs.ee Tel: +372-5029873