Baltic sea

Report of the thematic expert group: Baltic Sea

This report mirrors the proposal and parts of the whole draft  ”Actions on Prosperity in the BSR Macro region 2009-01-01” and has been pasted under the preset headings of this report.

Description of the theme and its relevance.

Vision
The long-term vision is to establish the Baltic Sea Region (BSR) as a functioning macro region with an internationally competitive position in a number of strategically-prioritized areas. The BSR will be globally-recognized for its multi-disciplinary research and education, attractive business conditions, open and internationally-collaborative innovation environments, and high quality of life.
In order to fulfil the prosperity objective of the EU strategy for the Baltic Sea Region (-BSR) we suggest actions in creating a transnational  programme with interacting clusters, innovative milieus and emphasizing the SME’s, that is well anchored in the BSR countries and relevant Ministries. The objective is to create prosperity, economic growth and new jobs in the BSR through enhanced cluster and innovation cooperation.  This action is discussed to be spear headed and endorsed by Finland and Sweden jointly.

The Baltic Sea region  is one of the most competitive regions in the world today. The region has been characterized by a very dynamic growth since 2004 and shows strengths in education, technology, innovation capacity and business sophistication. Recently though, the region has been facing economic challenges due to the global economic crisis. The countries in the region have different sets of competitive advantages and positions with respect to handling the economic crisis . Cooperation between the countries on issues such as economical, social and environmental is strategically important.

The EU Commission has decided to develop a strategy for the macro region BSR. This is the first time EU develops a strategy for a sub number of member states and it is expected to be a model for other macro regions in the EU. The work is coordinated by the EU Commission/DG Regional, which has set up a process and a timetable to develop the strategy. The Swedish government takes active part in the process and the goal is that the BSR strategy will be decided on at a summit during the Swedish presidency during the autumn 2009.

The Swedish government after consultations with other member states in the BSR region has initiated processes to identify concrete and important actions to be included in the new BSR strategy. The actions are meant to create on a long term, a competitive macro region in the global economy.

The suggested actions will focus on innovation and increased competitiveness in various business sectors in the BSR, and will include transnational cluster collaboration. The objective is to create prosperity, economic growth and new jobs in the region through enhanced cluster and innovation cooperation. Small and medium sized enterprises (SMEs) along with competitive clusters and innovation milieus will be an important part of the suggested measures. The actions are proposed to be launched in January 2010. 

The suggested measures will include different innovative milieus and will boost a concrete transnational cooperation in the region. The suggested actions will contribute to the prosperity part of the BSR-strategy. The suggested measures are a direct result of the combined national experience in different countries that have run national competence centres and programs on regional innovation systems, SME networks and clusters. Germany, Norway, Finland and Sweden, have an extensive experience in promoting this type of systems. The suggested actions are mainly based on the transnational collaboration experience gained from the ongoing Baltic Sea Inno-Net project, which started in 2006 and will end in September 2009.

The rationale behind the suggested actions is that on a national and regional level, there is strong evidence both from theoretical and practical studies that well functioning clusters and competitive research and innovation milieus has positive effects on knowledge spillover, cooperation and competitiveness, renewal, innovation and  investments, which lead to economic growth and new jobs. In such clusters, many industries are co-located and business, research, innovation and important competences interact in ways which can out-perform less focused, less clustered and less internationally connected environments. There is also evidence that SMEs strongly benefit from networking with other SMEs and that innovation takes place at many different levels e.g. within firms and between firms, in networks and within regions. Promotion and support of different kinds of co-operative relations between firms and other actors is therefore very important. In the light of the economical crisis there is lack of capital generally for SMEs but especially in the early stages of the SME development. Addressing questions as inward investments and risk capital in the BSR region are therefore important as well.

Why are international links between different innovative milieus in the region important?
• Some of the future challenges demands solutions by more than one country. There is a multitude of areas where the BSR-countries can cooperate in order to develop new solutions. Two examples of future challenges lies within energy and environment.

• Increased knowledge spillovers, to companies and to national and regional innovations systems. Knowledge spillovers are important prerequisites for innovation.

• SMEs can gain from increased linkages to other companies, to research institutions and to skilled labour force within the whole BSR-region. Innovation is often a process in which several partners are included. A larger network facilitates new contacts. SMEs can also gain access to a larger market potential and possibilities for commercialization of R&D.

• For research institutions a larger critical mass of R&D can be created and new research and development projects. Research institutions will gain from cooperating with other institutions in the region and will also come in contact with companies outside the national boarder. 

• For societal partners cooperation between the countries can lead to joint action in order to solve future challenges for society. Concrete action will also promote political action and cooperation between the member states.

• Increased linkages between the BSR countries and its companies, research institutions and societal partners makes the region more attractive to partners outside the region and to investments’.
 
Goals and objectives
The suggested actions will include a full scale transnational program supporting innovation systems, clusters and SMEs networks in the BSR. The program is based on the following assumptions:

- The Baltic Sea Macro Region will be globally competitive and benefit from creating a joint innovation system based on  clusters and SME networks, and including exchange of knowledge, participation in joint R&D projects, human capital mobility, uniformity of education, lifestyle etc.
- The trans-national collaboration can be based on already existing national models
- There is a commercial interest for cooperation expressed by the participating clusters and innovation milieus

The precondition for the participation is a commercial interest in trans-national collaboration in the Baltic Sea Region. The overall recommendation is that the project should have a “bottom-up” approach and should be built on the commercial interest and cooperation expressed by the national clusters and innovation milieus. The bottom-up approach will also facilitate support of new ideas and future growth areas. The overall ambition is to create new commercial value in the BSR region.

The program should also build upon the Baltic Sea Region business strengths. Members of BSR Inno-net WP6 have in their report “Defining Priorities for Trans-National Programmes” listed the following national strongholds in the BSR-region.

- Energy and Environmental Technologies
- Food Processing
- Health and Well-Being
- Information and Communication Technologies (ICT)
- Biotechnology
- Maritime
- Nanotechnology
- Tourism

Sectors such as forestry, wood, wood processing and furniture are also mentioned as having great potential by being linked to or related to complementary sectors. Manufacturing, materials science and mechatronics are other sectors that could have the same potential.

There seems to be another group of already strong and/or growing sectors that could be combined in unique ways to create internationally competitive “new sectors” for BSR. This includes:

- Health and well-being, tourism and transport
- Food & life science/biotech (functional food)
- Energy/environment plus power generation/transmission

Proposed actions
The program is suggested to contain the following components:
A. World Class Innovation Systems collaborations
B. Transnational  Cluster collaborations
C. Innovative SMEs and networks
D. Capacity building
E. Foreign direct investments (FDI) and branding of the BSR Macro Region
F. Programme management and  knowledge development, (please observe that knowledge development will be separated from programme management).

Each component is described in the attached draft on “Actions on Prosperity in the BSR Macro region 20090109
Prerequisites of the implementation (financing, organizations, etc.)

Budget
The program is suggested to run for at least 6 years as this kind of development takes time. The overall program budget is suggested to be around 200 M Euro per year. The approximate funding to each component in the program A-F is suggested to be.
A 70 M Euro
B 50 M Euro
C 40M Euro
D 20 M Euro
E 10 M Euro
F   5 M Euro – please observe that knowledge management is 3 M Euro and not included in the programme management as such.

The financing sources are:
• Initiatives own financing-public and private
• EU research & structural funding from existing EU programs
• Additional EU funding
• National financing