1. 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, 21 st June 2010 Funded by the UK Innovation Centre (BIS, ESRC, NESTA and TSB)

2. Sara Davies, European Policies Research Centre, University of Strathclyde 2 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

3. Sara Davies, European Policies Research Centre, University of Strathclyde 3 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

4. Sara Davies, European Policies Research Centre, University of Strathclyde 4 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)

5. Sara Davies, European Policies Research Centre, University of Strathclyde 5 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

6. Sara Davies, European Policies Research Centre, University of Strathclyde 6 Conditions for innovation in remote areas (1) WeaknessesStrengths EntrepreneurshipScattered firms; Weak profitability Self-employment (but not growth-oriented) SkillsSmall labour pool, Weaker education incentives Hidden skills, Quality of life Access to financeFew intermediariesNetworks, Public aid Public researchFew universities / public R&D centres Some niches

7. Sara Davies, European Policies Research Centre, University of Strathclyde 7 Conditions for innovation in remote areas (2) WeaknessesStrengths CompetitionFew firms? DemandSmall local markets? Openness: HardVaries across countries but weaker than in cities Varies Openness: SoftSparse population; Strong ties may create risks Links across sectors within the region

8. Sara Davies, European Policies Research Centre, University of Strathclyde 8 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

9. Sara Davies, European Policies Research Centre, University of Strathclyde 9 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

10. Sara Davies, European Policies Research Centre, University of Strathclyde 10 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

11. Sara Davies, European Policies Research Centre, University of Strathclyde 11 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)

12. Sara Davies, European Policies Research Centre, University of Strathclyde 12 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

13. Sara Davies, European Policies Research Centre, University of Strathclyde 13 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)

14. Sara Davies, European Policies Research Centre, University of Strathclyde 14 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

15. Sara Davies, European Policies Research Centre, University of Strathclyde 15 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?

16. Sara Davies, European Policies Research Centre, University of Strathclyde 16 Thank you for listening! Sara.Davies@strath.ac.uk http://www.eprc.strath.ac.uk/irr/