Markku Markkula

• EU Committee of the Regions CoR,

Rapporteur on H2020• Aalto University, Advisor to the Aalto

Presidents• Helsinki Region,Chair of the Steering

Board for Using Structural Funds

markku.markkula@aalto.fi

My starting point for the presentation is the new programme period landscape painted by the following new drivers of change and new critical success factors:1. Focus on impact, especially societal impact2. More innovations out of research3. User-driven development: citizens and communities of

practice4. Regional innovation strategies based on Smart

Specialisation RIS35. From traditional clusters and triple helix to regional

innovation ecosystems6. More multi-disciplinary and breaking the boarders7. Mindset/mentality is the most crucial success factor8. Use of cohesion funds on innovation and capacity

building9. Synergy in using Horizon 2020 and Cohesion funds 10. Multi-financing

Developing Regional InnovationEcosystems through RIS3, Horizon 2020

and European Partnerships

Scientific Excellence & Industrial Leadership

Smart Cities & Smart Regions Are Needed to Speed up and Scale up

EU2020 Implementation – Key Elements Are

Regional Innovation

Ecosystems Pioneering

EU2020

Markku Markkula, markku.markkula@aalto.fiChair CoR-EPP Task Force on Europe 2020, Aalto University, Finland

MoreSocietal

Innovations

UrbanDesign

Solutions

Digitalized Real Life Test-beds

Open Innovation & Smart

Specialization

Horizon and Cohesion Funds Go Hand-in-Hand

In addition to Scientific Excellence, H2020 will focus on industrial leadership and societal challenges, maximizing the competitiveness impact of R&I, as well as raising and spreading levels of excellence.

Besides improving the innovation ecosystems, Cohesion policy will partly increase the capacity of regions to participate in H2020 and partly fund R&D&I activities in a region that can build on H2020.

Both should have a strong base on European Partnerships

RIS3 new opportunities are open for our use.

Guidelines for Combined Funding

Within a programme, a project or a group of projects, the use of different EU funding sources with many types of local funding is encouraged. RIS3 seeks to exploit complementarities and synergies, however avoiding overlaps and excluding double-financing.Examples:• Joint use of H2020 and ESIF funds to cover different cost items in a single

project.• Separate (not legally linked) projects financed through H2020 and ESIF and

orchestrated to have synergic collaboration and stronger impact.• ESIF funding is not legally linked to H2020 project, but a regional authority

decides to fund beneficiaries to enhance the H2020 project in the region.• ESIF to be used (with very little administration) to finance a project

proposal which had a positive evaluation under H2020, but could not be funded due to a lack of H2020 funds under the call.

Regions to apply these and other policy guidelines in their use and in partnering RIS3 process on a continuous basis. RIS3 new opportunities

are open for our use.

“Smart Specialization Strategies for Research and Innovation. Different regions different approaches”

• Our CoR experiences coming from many regions give a strong support on the following Smart Specialisation Platform statements: “RIS3 is an economic transformation agenda. RIS3 is a dynamic and evolutionary process (not a structure) deeply grounded in an entrepreneurial discovery process (not a one-off action) where governments are rather facilitators than in a position of command and control. RIS3 is for innovation leaders and for those lagging behind.”

• The smart specialisation approach is not just about a more focused and limited approach to cluster funding. RIS3 is a structural reform to upgrade the entire business environment and innovation ecosystem in the region.

• Smart specialization is opening up important opportunities for joining forces, matching roadmaps and building more world-class clusters.

• Regions can now spend up to 15% of their funds outside their programme area, if it is to the benefit of their territory.

RIS3 new opportunities are open for our use.

Manuel Palazuelos Martinez, Platforma S3 , IPTS (DG JRC), Comisión Europea, Sevilla

17.12.2013

From RIS to RIS3 Building on the past • Widespread experience of national/regional innovation

strategies in the framework of the EU Cohesion Policy • Achieved greater co-operation among private and public

stakeholders and better communication between technology providers and clients

Breaking with the past (weaknesses in the period 2007-2013)• Not in tune with the industrial and economic fabric of

regions • Too narrow vision of 'technological' innovation • The best performing regions were just copied or resources

spread across 'all sectors' • Lack of international and trans-regional perspective

Manuel Palazuelos Martinez, Platforma S3 , IPTS (DG JRC), Comisión Europea, Sevilla

17.12.2013

Smart Specialisation Strategies as Iterative, Tailor-made Policy Processes

The S3 design process can be described through “six steps”, each of which relates to the process rather than a theory or even any specific policy objective:Step 1: Analyse the regional context and potential for innovation;Step 2: Ensure participation and ownership;Step 3: Elaborate an overall vision for the future of the region;Step 4: Identify priorities;Step 5: Define a coherent policy mix and action plan;Step 6: Integrate monitoring and evaluation mechanisms.

Markku Markkula CoR Innovation Union keynote on 27 Nov 2013, based on “The role of clusters in smart specialisation strategies”, DG Research and Innovation

RIS3 new opportunities are open for our use.

1. Professor C.K. Prahalad gave a clear message also to universities by defining three critical aspects of innovation and value creation (Source Open Innovation Yearbook

2012, DG INSFO):

1) Value will increasingly be co-created with customers. 2) No single firm has the knowledge, skills, and resources it

needs to co-create value with customers. 3) The emerging markets can be a source of innovation.

The competitive arena is shifting from a product-centric paradigm of value creation to a personalized experience-centric view of value creation.2. Professor Erkki Ormala in his presentation EU Regions and Horizon 2020

(Source ManETEI final conference 4 December 2013 at Aalto): “From traditional large enterprise to extended enterprise (in which the role of partners is much larger) with orchestration capability”.

Why Regional Innovation Ecosystems?

Critical Aspects of Innovation and Value Creation

Markku Markkula, markku.markkula@aalto.fiChair CoR-EPP Task Force on Europe 2020, Aalto University, Finland

We need to react on the changing innovation landscape. Universities need to learn from business life to modernize their operations.

Erkki Ormala, Professor Aalto University,Former Vice-President, Business Environment, Nokia

We need to react on the changing innovation landscape. Orchestration is the key for success.

Identify Societal / Market Needs & define system requirements & barriers

Develop Useful Insights from Fundamental Knowledge

Integrate Fundamental Research & Innovation Knowledge into Enabling Technologies

Universities should analyse the ecosystems through several layers:

Interacting Learning & Research & Innovation Activities

(E O’Sullivan: Adapted from NSF ERC Strategy Framework)

Professor Sir Mike Gregory, 13 Feb 2013

Three Steps to Understand the System:

We need to react on the changing innovation landscape.

Business Model Levers Technology Levers

Value Proposition

Value Chain

Target Customer

Product and Service

Process Technology

Enabling Technology

Cultural Levers

Regional InnovationEcosystemSpace (Ba & Flow)Design

Mindset

Learning

Transformation: the 3 Types of Innovation(In the past: the focus on innovations has been on business and technology.

Now: also the cultural aspects are the drivers of change)

Incremental innovations

Semi-radical innovations

Radical innovations

Markkula M & Pirttivaara M, (2013). Adding the Cultural Levers. Developed from Davila T, Epstein MJ and Shelton RD, (2013), Making Innovation Work, FT Press, New Jersey.

New Governance

Culture

We need to react on the changing innovation landscape and create new governence culture

Helsinki Region Smart Specialisation

The Helsinki regional RIS3 has the following steps (some already fulfilled, some on the process):1. A collaborative scenario process was carried out 2012-2013 within the Greater Helsinki

Region.2. Main targets up to 2040 were defined by the Helsinki Regional Council in cooperation with

the municipalities.3. The process for the Helsinki Region policy programme was organized in 2013 with

stakeholder hearings and open consultation. The outcome including the vision and strategy 2040, as well as the strategic priorities for 2014-2017 was approved by the Regional Council on 11 December 2014.

4. Implementation plan with the spearhead mega-endeavors is approved.5. The re-organizing the activities of the Steering Board for using structural funds and running

the RIS3 process.6. The ongoing process phase is the defining in more detail the ecosystems and roadmaps for

each spearhead mega-endeavor. All stakeholders are engaged. Universities and other innovation key actors are having the major role in this.

7. The most challenging activity is integrating the points 5 and 6 targeted to new RIS3 governance concepts which are based on orchestration and synergic implementation processes. These will lead to strong societal impact through each spearhead mega-endeavor.In this slide I see RIS3 as a process

important for universities

CHALLENGE 1: The “prioritization” challenge: how to select (and justify) priority intervention domains for S3?CHALLENGE 2: The “integrated policy” challenge: what are the adequate policies for S3?CHALLENGE 3: The “smart policy-making” challenge: what tools for evidence-based policy (measuring, assessing and learning in S3)?CHALLENGE 4: The “multi-level governance” challenge: how to align policies from national, regional, EU levels?CHALLENGE 5: The “cross-border collaboration” challenge: what is the appropriate territory to conduct a S3 and how to conduct polices that conform to it?CHALLENGE 6: The “stakeholders engagement” challenge: how to promote participation, engagement and commitment of the variety of stakeholders?

The RIS3 Process: Six Challenges to Implement Smart Specialisation Strategies in Practice

Markku Markkula CoR Innovation Union keynote on 27 Nov 2013, based on “The role of clusters in smart specialisation strategies”, DG Research and Innovation

RIS3 new opportunities are open for our use.

Espoo Innovation Garden T3

• Within the area we have leading universities, global businesses and early-stage start-ups. • T3 area is built on ecological, economical and ethical sustainability.• All collaboration is based on the idea ofmultidisciplines contributing together.• T3 is a living community with 110 nationalities, 5 000 research scientists, over 800 companies, 16 000 students, and 43 000 residents.

T3 is a largest concentration of science and technology based research and innovation in Northern Europe. It’s a unique area for collaboration and living that is based on a deep cultural heritage combined with a world-leading innovation ecosystem. Our innovation ecosystem contains all of the essentials, from universities and research organisations to investors to co-operative centres and organisations where people and businesses come together to better equip our future.

We Cannot Reach the Target by Incremental Small Steps:

Metaphor of Gardening

We need to create “Joint Regional Innovation Ecosystems”

Inventing the future: Working and learning together

Fruits of global pioneering to the use of all

Today

The picture is based on the results of the Aalto Camp for Societal Innovation 2011: Markku Markkula

Gardening to enable uniqueness

The upside-down tree metaphor originates 1992 by Leif Edvinsson

Research & Education

AppCampus

2500 submissions reviewed in 18 mths150 Investment decisions made30 Applications launched, running rate 15-20 apps per month

Corporate partnersComplementaryPartiesCoaches

PYK (Small Enterprise Center)

Training for entrepreneurs

Aalto Center for Entrepreneurship

Around 200 innovation proposals/year -> 10-15 companies->15-20 patent applications

Aalto Ventures Program

Problem based learning program to foster entrepreneurial mindset and skills

Co-operation with Stanford

Startup Sauna

30-40 companies in acceleration / year 20 million Euros raised30 students trained with internships

SLUSH Established as the leadingStart-Up event in Europe

Aalto Startup Center80 companies in incubation/ 32 high growth

AaltoES

9000 community members100 activists Annually 8000 participates events

EIT ICT LabsEIT Nodes &partners in Europe

Entrepreneurship ecosystem

On-going joint process for

defining and co-creating joint action themes

and vision

BA & Flow, demo days & social media, other

forms of effective communication,

virtual reality

Physical space of real hectic action for research with

experiments, demos and prototypes

Passionate key persons,

networking, processes, platforms,

focus on boundary objects

Mental entrepreneurial mindset with joint collaboration spaces and activities Aalto Design Factory & Startup Sauna & Urban Mill Aalto Innovation Garden

(three old buildings) Implementing Knowledge Triangle

Bottom-up activities

We need concepts to increase synergy.

Aalto Campus is the Angry Birds’Nest…

Near 2,000 million downloadsFastest growing brand ever

The ”Angry Birds“Comes from Otaniemi

Figure May 2013

(C) Otaniemi Marketing Ltd 2013

Selected as Global #1 Young Incubator

July 2013, Silicon Valley

Ilkka PaananenCEO Supercell

Jyrki KatainenPrime MinisterFinland

Something outstanding: slush.org organised by students, based on Aalto Entrepreneurship Society & Startup Sauna

The Future is here: slush.org 1000 start-ups, 200 venture capitalists and other investors, 5000 participants

http://www.youtube.com/watch?v=Q2LPjCupmPI&feature=youtu.be

From Triple Helix to RIE (Regional Innovation Ecosystem):

Using The Hubconcepts™ - Innovation Hub Framework

Company and forumdriven activities

Public-privatepartnerships

Public policydriven activities

“SmartHandover”

National /Regional Innovation Policy

Research & Development Activities

Education (elementary to university)

Physical Infrastructure and Service Structures

Cluster Policies & Programs

Start-ups

Living Labs / Test-Beds

Incubation Environments

Anchors

Growth SMEs

Technology Innovation Area

Biotech & Pharma Phase I

Residential Zone

Semiconductor Phase II

Semiconductor Phase I

Biotech & Pharma Phase II

Scientific Research and Education Zone

First-class master plans &

Innovation Hub concepts

complete each other

Based on Hubconcepts Inc / Jukka Viitanen: Copyright and all rights reserved.

Read the arcticle by Jukka Viitanen & Markku Markkula & Carlos Ripoll in the Knowledge Triangle Book 2013.

RIE is crucial for successful H2020 & ESIF projects .

The Changing Realities in the Systemic Development ofRegional Innovation Ecosystems “From Triple Helix to RIE”

Jukka Viitanen, Markku Markkula, Carlos Ripoll Soler (the article, 16 pages, gives a clear process guidelines from the city governance perspective):

1. Introduction2. The Triple Helix Model Extended to the National and Global Contexts 3. New Foundations for the Regional Innovation Policy and the Development of Specialization Capacity 4. The Interplay and Matching of Parallel Interests in the Regional Innovation Ecosystems 5. The Comprehensive Bench-Learning Approach for the Functional RIEs 5.1. Grand Master Planning5.2. Coordinating Service Provision5.3. Smart Orchestration5.4. Channeling Ecosystem Resources6. Conclusions RIE is crucial for successful

H2020 & ESIF projects.

Development of National or Regional Innovation System

Public support

Stage 1: Creating pre-conditions

Stage 2: Initiating transformation towards RIE

Stage 3: Orchestration for global business

The Development Path of the Regional Innovation Ecosystem (RIE)

Source: Jukka Viitanen & Markku Markkula & Carlos Ripoll, article in the Knowledge Triangle book, 2013

This is the process we are applying in practice in the Espoo Innovation Garden regional ecosystem through the research program “Energizing Urban Ecosystems” (20 million euros in 4 years: industry driven 50%

funding from industry, 50% from Finnish public funding) .

RIE is crucial for successful H2020 & ESIF projects.

Stage 1 Regional pre-conditions:1. Potential of existing regional/international innovation system (=audits)2. Willingness to utilise this potential (=active participation)

Stage 2 Creating the innovation hub:1. Joint R&D2. Joint innovation capacity3. Joint commercialization4. Joint platforms

Stage 3 Orchestrating RIE:2. Mindset change3. Implementing Knowledge Triangle 3. Integrating innovation activities with research programs

The Development Path in More Detail

Source: Jukka Viitanen & Markku Markkula & Carlos Ripoll, article in the Knowledge Triangle book, 2013

RIE is crucial for successful H2020 & ESIF projects.

Aalto frame for the EU Horizon

Mega-Endeavour(orchestrating a project portfolio)

Project 1

Project 2

Project 3

Project 4

Project 5 Ou

tco

mes

of

the

pro

ject

s

Added value for these projects

Additional added value for the partners and stakeholders

Creating enablersfor this project

portfolio.Some

projects are coordinated by Aalto and some by the

others.

Otherimpacts

Knowledge Triangle implementation

Education Research Innovation

Markku Markkula Aalto University

Include flexibility through experimenting and spin-offs & spin-inns

We need concepts to increase synergy.

How to make all this a reality?Methodological RDI

(integrated with the university’s focus areas and the regional strategy)

A. New concepts and activities need to be linked with RDI.

B. Open Innovation integrates research, teaching, learning and different collaborative developments. It is a feature characterizing all these activities.

C. In each topic the RDI areas in the picture can be different depending on the existing strengths of the faculty.

D. Orchestration also for European partnerships based on RIS3. This means that each region should locally organise the settings in a similar documented way.

31

SocietalChallenges Industrial

Renewal

Working LifePractices

Individualinnovativeness

© Markku Markkula

5. Leadership

and Management

3. Human Capital

2. ICT

4. Living Environment

6.Innovation

Process

1. Science &

Society Interaction

Orchestration of the specific projects and general open innovation activities focusing on the regional spearhead topic.

University’s Focus Areas

We need concepts to increase synergy.

Five perspectives

Innovation culture

New kinds of collaborationUrban test-beds

Demonstrations in Real life & Virtual reality

ICT Cluster Revolution & Job creation

We need new instruments such as ACSI Innovation Camps 2010-2013

Local Digital Agenda for the Helsinki Region based on Smart Specialisation – Draft (the process goes on)

We will pioneer solutions to tackle Grand Societal Challenges. We will focus on:1. Smart Urban Design, especially Open Data2. Active and Healthy Ageing3. Low Carbon Economy, especially Cleantech & Smart Traffic

This means especially fueling Industrial Leadership by focusing on:1. Regional Service Architecture and Modeling2. Digitalization of System Processes, especially Services3. Mindset and Other Enablers for Start-up and Growth Companies

And this means scientific excellence focusing on:1. Open Innovation Interlinked Ecosystems2. Human Centered Living Environments: Integrating Real and Virtual Reality3. Key Enabling Technologies and their multidisciplinary applications

Draft by Markku Markkula Fall 2013: based on the CoR Horizon 2020 opinion, European collaboration on LDA activities, the EUE/RIE plans, the EU Smart

Specialisation Mirror Group and Helsinki Region policy programmes.

Increasing collaboration between regions.

Analysing the DigiBusiness Evolution: Rodmapping

2007

20102012

Globalisation

Wellfare

Rovio – Angry BirdsArctic15SlushEU Digital Think TankKites RyProtomoGrowth coachingInternational Business ProgrammeDigital content creation / Creative industriesEducation Esport (Future Learning Finland)Digidemo

Climate change

Ageing

Technological development

Sustainable development

Quality of life

ICT structural change

EU / Helsinki Digital

Agenda 2020

Open data and citizen participationService design and Helsinki WDCTv/crossmedia – The Mill SessionsSilicon Valley Think TankRussia Think Tank – ICT Cluster and digiTvDesign ThinkingSmart CityNew FactoryNeogames – internationalization rewardDigital packagesVision +Strategic cooperation (Tekes, TIVIT, VTT, Sitra, Finpro, TT, veturi- ja kasvuyritykset)

Mindtrek Neogames ja Pelikehittäjät RyNew funding models(Mediatonic)Digital interaction(Kites)eLearning (eOppimiskeskus Ry)Tekes, TIVITDemola

The Need to Take Virtual Reality in Use for Collaboration

Introduction of the tool used by CoR Innovation Union Conference 27 Nov 2013A 2.5D Networked virtual reality tool was used both during the Networking Lunch and the Workshops. One dedicated user in each of the groups was responsible for adding material to the virtual environment and presenting the outcomes.

The virtual environment had dedicated working areas for each of the four groups, and one for the entire event, containing the material for each working group. Simple tools for adding web-based material were introduced, enabling people to add material in a fast and interactive manner.

The Virtual reality tool was accessible with a web browser, using Meshmoon Webrocket-technology

2013 Markku Markkula, Juho-Pekka Virtanen, Lars Miikki, Ali Kämäräinen, Tommi Hollström, Marika Ahlavuo, Hannu Hyyppä, Hank Kune

Find synergies and create strong partnerships

CoR: collaboration for Innovation 2.0

CoR Innovation Union Flagship Conference 27 Nov 2013 / Some Conclusions:1. Innovation communities operate as ecosystems through systemic value networking in a

world without borders. INNOVATION IS NOT ANY MORE A LINEAR PROCESS2. Innovation processes are strongly based on demand-driven user orientation and

customers as crucial players in innovations. OPEN INNOVATION 2.0 MEANS PUBLIC&PRIVATE&PEOPLE PARTNERSHIPS

3. Innovation strategies focus on catalysing open innovation and encouraging individuals and communities towards discovery and effective use digitalised services. CREATING FAVOURABLE CONDITIONS FOR CREATIVITY AND INNOVATION

4. Innovation is often based on experimenting and implementing demonstration projects by partnerships, using the best international knowledge and creating new innovative concepts. EXPERIMENTING & RAPID PROTOTYPING

http://cor.europa.eu/en/events/Pages/eu2020-innovation-union.aspx

CoR: collaboration for Innovation 2.0

Summary:

Towards Smart Regions and Cities

There is a huge gap between the latest research knowledge and real life practice. What do we need to do to fill it? CoR has defined the following guidelines:1. Europe needs pioneering regions to be forerunners in implementing the

EU2020 and through that to invent the desired future.2. Lifelong learning and the full use of ICT are cornerstones for this change of

mindset towards entrepreneurship and innovation.3. We need the dynamic understanding of regional innovation ecosystems

where public, private and third sector learn to operate together. Modernize Triple Helix.

4. We need methodologies to mobilize public private partnerships and encourage especially people participations: user-driven open innovation & living labs.

5. We need to speed up the change by scalability & implementation.

Source: CoR Opinions 2011-2013

Summary

What new special is needed?

RIS3 & H2020 Modernizing Universities during the EU Programme Period 2014-2020

1. Europe needs more societal innovation: This can be achieved by developing the decision making processes needed to address societal challenges: using the best international knowledge and collaboration expertise, developing the required competencies and methods to support decision makers.

2. Europe needs more piloting and experimenting: This can be done by increasing testing and implementing demonstration projects related to smart and sustainable development: studying, piloting, demonstrating and verifying new models.

3. Europe needs mindset change towards entrepreneurial discovery: This means creating innovation gardens and challenge platforms for collaboration with the businesses, universities and research institutions within the region: to create a working together culture, innovative concepts and methods for partnerships.

4. Regional Innovation Ecosystems are based on modernizing the role of strong research based universities.

5. Universities and other knowledge actors need more synergy within their activities: This means orchestrating project portfolios and megaendeavours, as well as implementing the Knowledge Triangle principle in universities.

Summary