Innovation research

Theme for 2011: System-level changes and innovation

Global challenges, such as climate change, require radical innovations and system-level changes in the economy and in society more generally.

System-level change refers to simultaneous and broad-based change in operating models, structures and the interaction between them. They can create frontrunner opportunities amongst companies, and are necessary for more sustainable growth. Finland has a lot of strengths with which it can respond to the opportunities that accompany global challenges. Nonetheless, and understanding of the sources, barriers to and requirements for system-level changes is still in its infancy.

The goal of innovation research in 2011 is to produce views on the possibilities and bottlenecks of system-level changes in different fields. The 2011 research projects are grouped according to the following themes.

Achieving, monitoring and forecasting system-level changes and innovations


ACSI as an Accelerator for System Level Changes
Aalto University: Petra Turkama

The ACSI 2.0 project studies emergence of self-renewing innovation ecosystems and focuses on societal innovations. The aim of the project is 1) to find means to support emergence of innovative flows and dynamics, 2) to identify their systemic patterns and bottlenecks, and 3) to develop follow up and evaluation methods for output, outcomes and impacts of innovation initiatives. ACSI 2.0 benefits from the research results of the first phase of ACSI and continues to develop ACSI as a new generation innovation agenda, global platform for societal innovations and a novel research instrument for both the university and multidisciplinary research communities. The ACSI 2.0 project builds on a micro level perspective of innovation systems.

Secure Ageing Innovation
Turku University: Jarna Heinonen

The Secure Ageing Innovation (SAGE) takes a multidisciplinary approach on ageing, the opportunities it provides for business and system innovation, and the challenges it poses on the healthcare system. This research project combines key strategic research areas of University of Turku across the scientific spectrum, namely those of entrepreneurship and gerontological healthcare research, in a unique way to promote system innovations for secure ageing in a way that benefits the elderly, their relatives and the society as a whole. The study focuses on whether secure ageing could create new opportunities for businesses and for municipalities responsible for organising elderly care. The project brings together actors and points of view from local, regional, national and international levels. Ageing is a global issue with great societal relevance and international research collaboration is, thus, an important and integral part of the project.

Monitoring and forecasting

The 6th Wave and Systemic Innovations for Finland
Turku University: Markku Wilenius

Finland is currently going through period of transformation, where old industrial structures and businesses are partly disappearing. This is time to create new fields of businesses that are based on emerging needs in Finland as well as in global markets. 6th wave -project explores, analyzes and makes use of the next big wave of economic and social development known as Kontratieff cycle, which is a framework used in futures studies. It is based on the theory explaining that modern societies develop in 40-60 year cycles. Starting from the birth of industrialization, we are entering now the 6th wave which is assumed to take place between 2010–2050. The coming wave will be radically different to the previous cycle (1970-2010), driven by ICT. The upcoming era will be based on the rise of environment-, bio- and nanotechnologies as well as health services. The new wave will produce number of grave challenges to Finnish industries as well as to the carrying capacity of the welfare society. Together with private sector partners, project will study the implications of this cycle for Finland and draw some practical conclusions and policy recommendations in terms of how to support systemic innovations to emerge and flourish in Finland. Furthermore, we want to build a toolkit that companies and public sector can use in their strategic work. Eventually, 6th wave project supports Finnish industries and investors to enter those prospective markets

Co-evolution of Knowledge Systems and Innovation Pipeline
VTT: Hannes Toivanen

Significant system level transitions of innovation environments unfold long periods of time, consisting of co-evolution of knowledge creation systems, innovation implementation, demand structures, and policy regimes. We take a holistic approach to analyze progressive system-transitions with economy and society wide impacts in Finland in 1970-2014, and to develop specific scientometric foresight tools. Using bibliometric and patent data, we map the evolution of S&T capabilities, analyzing systemic changes and on how hot areas leading to innovation emerge. Sub-level (ICT) mapping is done to link different data sets with cases. In addition, one work package looks at policy learning and utilization of project results.


The Outlier Initiative
Aalto University: Liisa Välikangas

The Outlier Initiative explores the uniqueness of organizations that are able to achieve "10 times more" (10x) than their peers (comparative organizations or competitors). Such 10x change drives systemic transitions in most innovation environments. Thus the goal of the project is to understand the role that such highly impactful frontrunners (or positive deviants) play in system-level change and how such organizations can be strategically employed to induce innovation environment transitions. The project has a strong international presence and world-leading research partners. It uniquely combines three methodologies: scientific research, senior executive and grassroots engagement and the esthetic, or artistic, methods.


Opportunities and bottlenecks of system-level changes


System-level Innovation and Change in Evolving Global Wireless Communications Industry
Hanken School of Economics: Taina Tukiainen

This research proposal is concerned with the strategic evolution of the global wireless communications industry. It focuses on system-level innovation and change in the different layers of the industry during the period 2000-2012, and intends to further augment and expand the empirical and conceptual foundation for better understanding the directions and evolution of the industry beyond 2012. The research will provide useful insight for corporate-level platform strategy development for Finnish incumbents (e.g., Nokia), as well as guidance for Finnish startup firms eager to join and contribute to the ecosystems developing around the leading corporate platforms. The insights generated by the research will also usefully inform government policy with respect to further stimulating entrepreneurship and innovation in this crucial sector of the Finnish economy.


Transnational Private Regulation and System Level innovations in Global Food Value Chains
Turku University of Applied Science: Kaisa Sorsa

Transnational Private Regulation (TPR) and system level innovations in global food value chains aims at finding out what is the mechanism between TPR, contractual networks and system level innovations. The proliferation of TPRs in global value chain management offers a rich research object for system level innovation and learning. Research findings will contribute to the internationalisation of Finnish food industry.

University sector

Universities, Funding Systems and Renewal of Industrial Knowledge Base
ETLA, VTT, University of Helsinki, Aalto University: Terttu Luukkonen

The project studies the ways in which the ongoing structural change in universities provides framework conditions for the various funding mechanisms enabling or hindering societal/economic utilisation of university research and the role of the universities in the renewal of the knowledge base of the Finnish innovation system. Fulfilling this role is an important prerequisite for the renewal of the country's industrial and economic base. The perspective is systemic, though the study will collect information at the meso and micro level. The project aims to study the separate and combined impacts of the various research funding mechanisms and instruments on research paying special attention to innovativeness and innovation in university research. The project will collect case studies, carry out a survey and utilise documents and other studies. It will engage in intensive international collaboration and will carry out case studies or collect relevant information from a number of other countries.


Technology choices, experimentation and system-level change from the viewpoint of economics
Research Institute of the Finnish Economy, ETLA: Mika Maliranta

Finland has advanced from a technology follower towards a technology leader. As a result, firms' key decisions regarding technology choices are increasingly risky. Experimentation in the markets and reallocation of resources between firms are now key mechanisms of economic growth. While many firms will unavoidably fail, the potential returns in the global markets are huge. However, for various reasons (e.g. agency problems) there may be too little experimentation and risk taking compared to the social optimum. This calls for a policy intervention. The aim of this project is to facilitate policy design by studying firm level incentives and constraints as well as system-level changes related to R&D and technology choices. We provide new data and indicators about the links between firms' financial situation, productivity and growth. We also develop numerical models of firm dynamics and use them with Finnish firm data to understand the mechanisms through which financial constraints and firm level choices influence, with various feedback mechanisms, aggregate productivity. Such tools are also needed for (pre-)evaluation of alternative policies.


Green and sustainable growth – policy opportunities and challenges

Green Transitions: Global and Local Policies, Institutions and Experiences in Finland and Emerging Economies
University of Helsinki: Karoliina Snell

The project Green Transitions – Global and Local Policies, Institutions, and Experiences in Finland and Emerging Economies (GreenTrans) seeks to identify and explain various ongoing and potential pathways to green transitions. It scrutinises ideas, initiatives and practices of green growth and sustainability, and the patterns and mechanisms of governance that foster or restrain the opening, alteration and decline of socio-technical regimes. With a forward-looking and prescriptive orientation, the project emphasises ongoing and potential development trajectories that may open up possibilities for the emergence of new technological niches. It examines particularly Finnish green governance and the possibilities and hindrances related policies and practices create for development of green innovations in a global context.

Future Innovations and Technology Policy for Sustainable System-level Transitions: Case of Transport
Aalto University: Paula Kivimaa

Transformation of the present-day oil-based transport system would increase energy self-sufficiency and energy-security, reduce greenhouse gas emissions and give new business opportunities and jobs. This work aims to clarify how various socio-technical pathways could be progressed for Finland in the transport sector. We will assess the potential of innovation policy options intended to induce changes in the Finnish transport sector with a special emphasis on: (1) measures for energy efficiency and demand reduction in transport, (2) advanced biofuels and electric vehicles, and (3) vehicles and services related to public transport and light traffic. The project will consist of three interlinked sub-projects: first addressing the aims of the project from a policy perspective; second addressing the aims from a perspective of the actors in innovation networks; and third integrating the two other sub-projects. The overall aim of the project is to generate policy options and frameworks for innovation policy that will facilitate system-level transitions in the transport sector and related industries in Finland. The work is based on literatures on path dependence and path creation, as well as sustainability transitions.