Public policy’s role and capability in fostering the emergence and evolution of entrepreneurial ecosystems: A case of ecosystem-based policy in Finland

Abstract

This paper explores public policy’s role and capability in fostering the emergence and evolution of entrepreneurial ecosystems. While the entrepreneurial ecosystem approach has focused on the ingredients and essentials of entrepreneurial ecosystems, the policy-focused dimensions are lacking, and especially insights derived through the “real world” policy efforts to develop entrepreneurial ecosystems. This paper contributes to the discussion by focusing on various actors’ roles in supporting entrepreneurship and facilitating interaction and collaboration within entrepreneurial ecosystems by taking a participatory action research approach to study the case of ecosystem-based policy in Finland. Findings illustrate that public policy may incubate and facilitate entrepreneurial ecosystems through regionally embedded actors. Through well-designed, sustainable and leadership-based innovation services, entrepreneurs are linked to co-creation processes, data, infrastructure and competencies to support new ventures whilst benefitting also the regional ecosystem. However, the challenge lies in embedding the processes in other regional contexts in which the organisations and institutional settings may be different.

Keywords

co-creation entrepreneurial ecosystems innovation services platforms regional development

Introduction

Regional policies often strive to support the growth of new and small firms (Sternberg, 2012). Recent work, however, has illustrated that it is not new or small firms per se that are important for economic growth, but rather a group of ambitious entrepreneurs aiming constantly to explore new opportunities, to turn them into business ventures and to add as much value as possible (Stam et al., 2012, 2009). “In practice, ambitious entrepreneurs are more likely to achieve substantial firm growth, innovation or internationalization than the ‘average’ entrepreneur” (Stam, 2015: 1760). From a policy perspective, this means moving from more quantity-based approaches towards approaches emphasising more quality-based efforts in supporting entrepreneurship and innovation (Stam, 2015).

Many regional development approaches such as industrial districts, clusters and innovation systems include the discussion of entrepreneurs and spin-offs. The main difference of the entrepreneurial ecosystem (EE) approach is that these are the central focus (Acs et al., 2017; Malecki, 2018). EEs may be described as tight, autonomous networks, in which openness, interaction and inter-dependence go beyond the level of more traditional networks or clusters (Malecki, 2018; Stam, 2015).

Most of the existing studies have considered the attributes of EEs – such as policies, actors and the supporting institutions – with a focus on the various components, relationships and aspects that enable growth and development in regional contexts (Audretsch and Belitski, 2017; Pitelis, 2012). The research that pays specific attention to the processes of interaction and collaboration, and on embedding EEs into local and regional contexts is still scarce (Malecki, 2018; Mason and Brown, 2014).

From a policy perspective, ecosystem-based policy aims at both supporting the development of emerging ecosystems and assisting ecosystem renewal (Rinkinen, 2016). Through a focus on collaboration, openness and mutual value creation, the EE approach holds potential to make public policy more effective and to make such policy initiatives more relevant to wider groups traditionally excluded from innovation activities. Despite EEs’ growing relevance for public policy, the concept so far has been applied almost exclusively on (successful) cases, while the empirical findings have not been used to advance the ecosystem concept theoretically. It has been criticised as being “underdeveloped” and “undertheorized” (Spigel, 2017; Stam, 2015). As a result, the role of public policy in supporting and creating EEs remains unclear (Feld, 2012).

To fill in these two blanks in our contemporary understanding of EEs – how they are embedded into local and regional contexts, and what the role of policy is in supporting and creating EEs – this paper investigates ecosystem-based policy initiatives taken in Finland. It focuses on a large national development programme delivered by the six biggest cities in Finland, the Six City Strategy (6CS) – a sustainable, cross-sectoral inter-regional development policy effort, which aims to foster and support entrepreneurship and new business formation while also creating better public services. The Strategy is a large effort towards ecosystem-based policy in Finland, its aims and objectives are built on various previous smaller scale attempts towards ecosystem development that were also consulted during the exercise. This paper analyses 43 platforms delivering innovation “services” to foster the EE through engaging various actors into entrepreneurial activities. These activities aim to be inclusive and mutually beneficial approaches for participants: this paper explores how regional actors facilitate the EEs through innovation services and connect entrepreneurs with the ecosystem.

EEs in recent literature

This paper considers Finnish ecosystem-based policy development and investigates a large national programme delivered by six Finnish cities, which has the explicit aim of supporting and developing EEs within a wider approach also encompassing innovation and regional economic development. As such, the EE lens is employed as a means of understanding the efforts that have taken place in Finland, in a two-way process using theory to better understand policy practice, and feeding back insights from policy practice “on the ground” to advance theory.

The EE concept has emerged in both academic work and policy practice in recent years. In regional development studies, approaches such as industrial districts, innovation systems and clusters have focused on the interaction of regionally embedded actors and regional performance (cf. Spigel, 2017; Stam, 2015). Within this, policy measures to create environments beneficial to entrepreneurial activity and innovation have been widely discussed. In the strategy literature, scholars have proposed the term business ecosystem to illustrate firms’ ability to engage with its surrounding environment and create added value for actors involved in the ecosystem (Iansiti and Levien, 2004; Thomas et al., 2014). Recently, strategy scholars have discussed physical or virtual platforms that facilitate the activities of an ecosystem (Gawer and Cusumano, 2014) – a matter that has also been tackled in recent policy measures (cf. Arvidsson and Mannervik, 2009). Even though these two literature streams both discuss ecosystems, they do it from different perspectives. Whereas the regional development literature focuses on the territorial boundedness of an ecosystem and regional performance, it insufficiently acknowledges the issue of ecosystem leadership. Meanwhile, the strategic literature concentrates on the value creation and value proposal at firm level and discusses the leadership of the ecosystem by a keystone company or a platform leader (cf. Acs et al., 2017; Gawer and Cusumano, 2014; Zahra and Nambisan, 2012) but is not directly linked to the regional growth.

Drawing from these two research traditions, the EE approach emphasises the interdependence between actors and elements, but puts its central focus on entrepreneurship as the output – and also the input – to the ecosystem (Acs et al., 2017; Mason and Brown, 2013; Stam, 2015). This is partly in response to the fact that previous regional development and strategy literatures underplay the role of entrepreneurs in creating value (Stam and Spigel, 2017). The EE discussions focus on the relationships and interactions among regional actors, policies and resources with the aim to support entrepreneurship in the first place (Malecki, 2018; Stam, 2015). The actors within an EE encompass a heterogeneous group from government agencies and educational institutions to large firms, customers, suppliers and venture capitalists (Acs et al., 2017) that support new and growing firms (Mason and Brown, 2014) and work towards shared cultural values supportive of entrepreneurial activity (Malecki, 2018). Spigel (2017) offers a list of cultural, social and material attributes that provide benefits and resources to entrepreneurs.

In this paper we define an EE as: “A set of entrepreneurial actors, entrepreneurial organizations, and institutions, processes which (…) coalesce to connect, mediate, and govern the performance within the local entrepreneurial environment” (Mason and Brown, 2014: 5).

The interaction amongst the players is key: when engaging with the ecosystem – other actors, policies, recourses – entrepreneurs may locate new opportunities, develop and test their products and turn them into new ventures (Alvedalen and Boschma, 2017). The evolutionary nature of such ecosystems is an important notion as the relationships, elements and roles within the ecosystem change (Mack and Mayer, 2016; Malecki, 2018). EEs may be seen as a tool to create and maintain a dynamic and systematic local process of entrepreneurship (Malecki, 2018). By collaboration among the different actors in the EE, policy-makers expect that the innovation potential can be better exploited both in the existing and new firms as well as in research, and in society as a whole. In addition to entrepreneurs and government, the EE research has found universities to play a key role in the ecosystem often serving as “hubs” (Greene et al., 2010; Schaeffer and Matt, 2016; Villani et al., 2017).

Alongside discussions of the EE approach’s possibilities, challenges and shortcomings have been raised (Stam, 2015). Theoretical conceptualisation has proven to be difficult partly due to the different kinds of ecosystems emerging in which the entrepreneurial type is only one (Acs et al., 2017). Also, it remains unclear how to distinguish EEs from other terms that seek to explain the geographical concentration of entrepreneurial activity (e.g. clusters, industrial districts, regional innovation systems). Much of the literature entails superficial generalisations on EEs rather than rigorous social science research (Stam and Spigel, 2017: 2). Specifically, empirical studies lack focus on the interaction and collaboration of various actors and elements (Motoyama and Watkins, 2014) – the dynamic nature of EEs – and fail in capturing the contexts in which EEs emerge and evolve (Alvedalen and Boschma, 2017; Mack and Mayer, 2016; Mason and Brown, 2014). These are all elements addressed in this paper, which attempts to fill some of these identified gaps.

Moreover, the measurement of EEs, their causal mechanisms and effects between the ecosystem input and output relations, and the factors that enhance entrepreneurship remain enigmatic (Alvedalen and Boschma, 2017; Stam and Spigel, 2017). Elements that enable the research findings to be generalised beyond specific regional settings remain underexplored (Nicotra et al., 2018). Further, the capability and role of policies to support the formation of EEs has been questioned, with more research needed on this policy element (Acs et al., 2014; Feld, 2012; Malecki, 2018).

Mason and Brown (2014: 1) suggest that in order to create EEs “policy intervention needs to take a holistic approach, focusing on the following: the entrepreneurial actors within the ecosystem; the resource providers within the ecosystem; entrepreneurial connectors within the ecosystem and the entrepreneurial environment of the ecosystem”.

From a policy perspective, Acs et al. (2017: 3) explain that the right questions need to be asked, such as “What elements of the ecosystem do we want to improve?” and “With what end goals in mind? Thus, policy-makers need to be able to communicate the value proposal of each ecosystem, evaluate their strengths and weaknesses, and measure their impact in order to foster and capture the added value of EEs (Mason and Brown, 2014).

From reviewing the extant EE literature, we have identified three pertinent research questions with regard to public policy towards EE development:

What is the role of public policy and publicly funded institutions in creating and supporting EEs (Acs et al., 2014)?

What are the innovation services to facilitate EEs that a region is trying to achieve (Stam, 2015)?

How do various actors and elements within the EE interact (Alvedalen and Boschma, 2017)?

These are the broad questions used to design our case study and to analyse the materials pertaining to the Finnish case. Overall, we set out to explore how different regional actors create and support environments conductive to entrepreneurship via developing EEs in regional contexts.

Methodology and data

The aim of this study is to explore public policy’s role and capability in fostering the emergence and evolution of EEs. Specifically, it examines how platforms facilitate interaction and collaboration between ecosystem actors to support entrepreneurship and new business growth through innovation services. A possibility to explore the creation and support to EEs was enabled through the author’s position in a very large national development programme (worth 100 million Euros in total) delivered by six Finnish cities (the 6CS, 2014–2020) supporting economic growth and public sector renewal through incubating EEs both at the regional and national levels. The programme goes beyond specific sectors and aims to achieve goals of openness, collaboration and mutual value creation.

The author was working in one of the Strategy’s spearhead projects from January 2015 to June 2018 – a period during which the data were gathered. As the objective of the project was to provide knowledge and solutions for open innovation platforms to the design of innovation services, and thus answer practical problems and achieve positive benefits for the multitude of regional actors involved, this research fits well into the participatory action research (PAR) approach (cf. Ladkin, 2004). In the PAR approach, the researcher is a part of the process and aims to foster reflectivity, learning and communication in the target community and among the stakeholders to solve the problems and to foster development (DeLyser and Sui, 2014). According to the approach, the process is equally important to the outcome (Ladkin, 2004: 545–538).

The author’s position enabled access to data and people that would have otherwise been unreachable. The data for the project were collected via an active interaction with policy-makers, companies, higher-education institutions (HEIs), city-governments and development agencies among others. Altogether, this exercise provided data on 43 innovation platforms or initiatives of such to facilitate ecosystem development. Specific data collection activities consisted of:¹

20 interviews with key actors involved in innovation service development including HEIs, city governments, non-profit organisations and industry;

interviews and discussions with 15 people from operational (platform facilitators) and strategy levels (policy-makers) including HEIs, city government and other public organisations. Feedback discussions with service providers (facilitators) followed the initial meetings;

qualitative surveys collected from 40 platform facilitators including development agencies, research and education institutions, city governments and other public organisations. Feedback discussions with respondents followed the surveys;

contributions from 80 ecosystem actors from operational (platform facilitators) and strategy levels (policy-makers) gathered via an online discussion forum in which the data collection was performed in four iterations in order to capture the development process of both the services and understanding of them;

nine workshops organised in different themes in order to develop and share ideas about platforms for ecosystems with over 220 participants including representatives of city governments, other public organisations, research and education institutions, non-profit organisations, hospital districts and science centres;

analysis of 12 handbooks and reports published on the platform’s innovation processes accompanied with information from the delivering organisation’s websites;

a thorough document analysis of the 6CS in order to generate understanding of the programme’s approach and aims and thus understand the objectives of ecosystem-based development.

The topics investigated by these mixed methods centred around different actors’ roles and involvement, the aims and objectives of the innovation services implemented and a self-assessment of these efforts, models of interaction among various actors in the ecosystem and their motivations and experiences of engaging with the innovation services as well as the processes that fostered entrepreneurship and innovation. Workshops generated understanding of the different actors’ involvement in the projects; their aims and objectives; interaction and cooperation among actors; support for participants in entrepreneurship and innovation and mechanisms for knowledge sharing. The workshops featured extensive discussions of the building ecosystems processes through service delivery within the six cities, and also between them, and creating global connections via platform-based initiatives.

Further participatory observation was undertaken in one of the cities (which is kept anonymous here) where the author was involved in several innovation and entrepreneurship projects aimed at ecosystem development. This allowed a more detailed observation of the exact ways participants became a part of the ecosystem, and their experiences of accessing the innovation services and building added value as a result of this. Whereas the interviews, surveys, discussion forum and documents analysed focused mostly on the actors delivering or enabling the innovation services, by engaging and interacting also with the customers or users of these services through the “on the ground” involvement in local projects, wider understanding of the innovation services and their output was gained.

The author acknowledges that the personal level commitment in the project – via the PAR approach as a part of the team developing the innovation services together with the regional actors – can lead to some level of subjectivity. This is an inherent issue with action research approaches, and cannot be completely accounted for; however, measures were taken to triangulate across different data sources as described above and also in the analysis and interpretation of data through involving several different researchers in the process. Some of the data collection methods were designed by the wider research team, such as interviews and surveys, and other researchers were involved in conducting the interviews. Working closely with two colleagues from outside of Finland in the analysis of the data has helped to re-evaluate the focus of the project and to enhance objectivity.

The data were analysed inductively using the following categories: actors and elements in EEs, their interaction and various roles, motivation and incentives for different actors in the innovation services, and processes and models fostering and incubating the ecosystem. These categories were inspired by the questions we developed as a result of the in-depth literature review, a shortened version of which is provided above. This directed approach was combined with a bottom-up approach to allow new themes and topics to emerge from the different data sets.

Incubating EEs in Finland

Recent policy measures in Finland have focused on increasing the level of collaboration, openness and mutual value creation between economic actors. One of the recent national programmes, the 6CS of Finland – open and smart services (2014–2020) delivered via projects, provides an example of the implementation of a wider ecosystem-based policy. This sustainable urban development strategy aims to foster and support entrepreneurship and new business formation and increase the level of service innovations in public services. The objective is to enhance regional and national competitiveness. In order to do so, the Strategy captures the spirit of co-creation and collaboration in innovation platforms to reach a wide social and economic renewal. The Strategy utilises digital technology to harmonise regionally dispersed public service structure and to enable a coherent market place for entrepreneurship.

This bottom-up policy initiative builds on previous smaller scale attempts to develop platforms for ecosystems. Ecosystem-based development is nationally interesting in Finland and the 6CS brings new elements to development work by combining the strengths of the six biggest cities in order to build an innovation service “machinery” to serve the development of regional ecosystems and the emergence of a national EE.

While our research generated data on 43 innovation platforms, all were initially injected by public funding, some initiated during the 6CS and some pre-existing ones integrated in. Some services were more mature (with over 10-year history) and others only recently launched. By analysing platforms in different development stages, we were able to evaluate the evolution of ecosystems: actors, elements and roles, interaction, motivation and incentives of participation.

Next, we take a closer look at the organisation of the 6CS actors to illustrate how the large policy effort is put together and what kind of mechanisms it includes in supporting EE development. Then, as we aim to ground our discussion of public policy using an EE framework in “real life” experiences, we provide tangible examples of efforts that have been made within this scope. Lastly, we turn our focus on evaluating the innovation services and highlight some aspects we found to be of importance in order to develop “successful” services.

The organisation of the 6CS of Finland

The strategy is implemented by the six biggest cities in Finland: Helsinki, Espoo, Vantaa, Tampere, Turku and Oulu, which accommodate some 30% of the Finnish population. The strategy is part of the implementation of Finland’s structural fund programme for sustainable growth and jobs. The public funding during the programme period totals around 100 million Euros.²

The Strategy is based on three larger spearhead projects: open innovation platforms, open data and interfaces, and open participation and customership whilst several pilot projects complement these focus points – all contributing to the overall goal of ecosystem development and growth. The projects focus on opening and utilising public data for commercial use; co-creating services to allow inclusive models for the wider communities to engage in innovation and entrepreneurial activities; enabling entrepreneurs’ access to user- and customer-driven innovation; developing open innovation platforms to serve as environments for the development of new products, services, businesses and markets ranging from brand new ideas to testing ready-made products. The open innovation platforms act as “hubs” to facilitate the ecosystem and link various regional actors together in innovation services.

The spearhead projects are a joint venture for all six cities, while each pilot project has implementers from at least two of the six cities. Open calls for the pilot projects take place twice a year during the programme period, which allows companies, development agencies, research and education institutions, municipalities and other public organisations, associations and cooperatives to apply. The target groups of the 6CS projects (ERDF funded) are entrepreneurs, start-ups, and other firms as well as research and education institutions. While the 6CS sets the guidelines and focus of the Strategy, within each individual project the project deliverers design the innovation services’ aims and objectives and how to facilitate interaction via the service.

What makes the 6CS unique and interesting is, firstly, that it is the first time that the six biggest cities come together to develop public services and entrepreneurial activities together to create a national network of services to better serve both the public service development and entrepreneurial growth. Secondly, the programme is the first large-scale policy attempt to implement ecosystem-based policy both on regional and national levels. The Strategy provides a large-scale possibility for the six-city-actors to participate in innovation service design and facilitation, and utilise their expertise for ecosystem development.

Platforms for EEs

We now focus on the mechanism of innovation platforms as an interesting and novel policy effort to develop EEs. Next, we illustrate the logic behind innovation platforms with a few examples that were deemed as useful for developing the local EE through interaction and collaboration through different ecosystem actors.

Example 1: University–industry collaboration platform

Firstly, we introduce a “mature” innovation platform with over 10-year history, repeatedly used as an example of a successful innovation service. The platform facilitates interaction between universities and companies and was inspired by a large tech company’s need to outsource some of its innovation activities and collaborate with a local university. The platform was launched with public funding but has since developed into a business model and been successfully embedded into multiple regional contexts both nationally and internationally. The international activities are run by a company but on operational level the facilitators constitute of either university personnel or people from, e.g. regional development agencies or think tanks.

The success of the model may be traced to a sustainable and well-designed innovation process model that can be embedded to various environments. The roles and interaction of actors involved are supported by a digital platform that also connects the international platforms together. Incentives and motivation for participants are carefully designed. Whereas companies gain in fresh ideas coming from the university students, students gain valuable experience working in real-life innovation projects and for the universities the model offers an educational tool. The platform facilitates a constant flow of projects and interaction between the target groups. Funding for the model comes from local universities, cities and companies (as customers) as it benefits them all. The service is sustainable as it has been able to renew itself to meet up with the ecosystem’s changing needs offering inspiration and ideology also for the more recent platform-based initiatives.

Example 2: Comprehensive school–industry collaboration platform

The second example illustrates an innovation service offered by a city government to facilitate interaction and collaboration between companies and comprehensive schools with the support of a digital platform. Nearly each of the city’s schools was engaged in the activity and training on the service was provided. Within the platform, both schools and companies can initiate a collaborative project, while the platform helps to detect the common interests to offer companies possibilities to develop and test their products or services together with the schools and benefit from ideas and feedback from the pupils. The schools can utilise a new kind of an educational tool, beneficial for the teachers and offering new learning opportunities for the pupils in entrepreneurial spirit. A handbook of the model illustrates the roles and modes of collaboration throughout the projects. The model was developed and tested within the 6CS and has been integrated as part of the city organisation’s activities gaining funding from public budget. Discussions with other cities and the Ministry of Education have been initiated in order to scale the model nationally.

Example 3: Comprehensive school–industry collaboration platform

The third platform run by a regional development agency also facilitates interaction between schools and companies. The model offers companies an experiment environment in a particular school to test and develop their products and services (e.g. lightning in the school area or games tested by the pupils). Whereas in example 1 a digital platform guided the collaboration and detected participants’ common interests, here the companies’ desires guided collaboration. In the time of the research, the initiative did not show signs of success. The reasons behind this may relate to that the innovation service offered only a limited test environment (one school), lacked in mediation between the parties (lack of digital platform’s support) and was exclusive in nature (companies were handpicked and information online was limited). In addition, the service lacked in leadership of the process. The regional development agency developed the model together with the school but did not intend to continue facilitating the platform in the future. Even though the school in question had a history of collaborating with companies, the committed head teacher’s input was not enough to keep the activities going: an outside facilitator was called for. However, as the benefits for the school nor the wider community were not clear, the city government was not eager to pick it up. It seems the service was more build on “what we have” than from actual ecosystem needs. The school continues collaborating with companies but at the time of the research the service model had not spread within the city in question or beyond.

Example 4: Talent–industry collaboration platform

The fourth example illustrates a platform that was launched in an economic and societal turbulence caused by big company’s layoffs. A regional development agency established a platform to support unemployed talents to utilise their competencies for entrepreneurship and innovation. The platform’s services included co-creation facilities, a variety of technological devices, training and expert lectures in an innovation friendly atmosphere with a weekly schedule linking the participants with each other and to the regional ecosystem. The service was publicly funded and was in action for seven years during which the participants established over a 100 companies. In time, the demand for the service decreased and the activity was terminated.

Example 5: Citizen–industry collaboration platform

A digital platform facilitated by a university builds on the idea of crowdsourcing with a user-base of approximately 800 citizens from a particular city. The platform offers an innovation service in which customers (companies or public sector) may expose their product or service to the users for collecting user experience data for a small fee to allow availability also for start-ups. The platform is the result of many publicly funded projects: initially it was launched by the city government but later taken over by the university, and since developed part-time by university researchers. The intermittent development of the platform (at some point there were no funds available) and multiple funding sources have steered the development work to different directions when trying to match with the emphasis and objectives of each of the funding devices. The service has customers within its “hometown” but competes with various international companies offering similar services with larger user-bases and state-of-the-art technological solutions. However, the platform has shown some potential for urban development, and the service could perhaps strive if scaled to other cities, and thus increasing the user-base and offering more possibilities for companies to engage in serving also the wider community in detecting new affordable solutions. However, for now the platform has not been utilised widely. Lacking leadership and resources as the particular university does not have the manpower (or the interest) to commercialise the concept and start facilitating and selling the service, restricting its scalability. Each new location would require trained facilitators and an organisation in which the platform would be embedded in. At the time of the research, new project funding was allocated to develop the service further.

Example 6: Hospital–industry collaboration platform

This example focuses on a university hospital opening pathways for structured collaboration with companies by setting up a test- and experiment platform. The facilitation of the service is run by the hospital’s special unit and it is offered as a chargeable service for companies. There is a selection of innovation services to choose from but the basic service core includes access to the test and experimentation facilities with particular specialists from the hospital, i.e. doctors, surgeons, nurses who test and give feedback on the company’s product or service. Companies showed great interest towards the service, which has been priced so that it is also accessible to start-ups. The funding comes from revenue from the service sales, and the hospital pitches in as it gains in learning about the state-of-the-art medical device solutions, which are designed in collaboration with the hospital’s staff and aim to serve practical needs. The entrepreneurs gain from valuable feedback and may develop the product or service accordingly to better meet the market needs (national and international). The hospital can later buy the product and be sure that it fits into its needs. The platform has strong leadership by the university hospital in building its ecosystem. The incentives and motivation are clearly communicated building on interdependence between the ecosystem actors.

Example 7: Urban development–citizen–industry collaboration platform

Our final example illustrates a platform facilitated by a city government with an aim to link up city citizen’s recognised needs with companies’ solutions. The needs are gathered by interviewing citizens and after communicated to companies to build solutions in a workshop-based mode, which exposes the companies’ ideas also to specialists in a particular field (e.g. workshop for traffic includes truck drivers, insurance company personnel, engineers, etc.). The entrepreneurs gain new ideas and concepts to enhance their business while creating solutions for the city community. Even though the service has shown some positive feedback, the process is rather heavy to facilitate as it builds on hand-picking each participating group (citizens, companies, specialists). Despite the benefits for companies, incentives for specialists nor the city community are not as clear as there is no promise that the city-government would utilise the companies’ solutions in city development in the future. So far motivation is based on interest on a novel attempt but in the long run this might not be the case. Even though the service has not been embedded as part of frequent activities within the particular city, the process model is available for the city personnel use. However, there are no funds allocated for its utilisation. The process model has been pitched to other cities too, but as working as merely a workshop-based model, integrating it in multiple cities has not shown promise.

Evaluating innovation services

This research shows that in the Finnish case the objective of platforms is to facilitate collaboration and interaction of EE actors through innovation services, in which entrepreneurs are connected to regional – or even national or international – resources (infrastructure, competencies, data, etc.) in the spirit of co-creation. The examples represent both some of best practice examples of how an EE approach can be used successfully as a policy tool, and some of the less successful ones to provide lessons to be learned from.

The foremost important factor to consider is the platform’s logic, i.e. how the processes of collaboration and interaction are designed and how the funding of the service after the initial programme funding is organised. Even though on paper the planning and implementing of the services may sound straightforward, the practise proved to be more complicated.

Most of the platforms were designed and implemented bottom-up, i.e. by the operational level actors (facilitators), whereas it showed that in order for the platform to be “successful”, the platform should be a joint venture between the operational and strategic level (decision-makers) actors. The operational level has the “on-the-ground” knowledge, whereas only the strategic level actors are able to embed the services into wider contexts and organisational settings.

The route to a “successful” innovation service starts from considering, which users the service aims to reach, which are their roles and responsibilities and value proposition for each actor. For example, entrepreneurs need to know beforehand how much time and other resources need to be invested and what is the expected outcome. Some of the less successful initiatives struggled to secure entrepreneurs’ participation or commitment to the activities. This shows that in some cases it is not enough to open up data, infrastructure or knowledge bases if a facilitated process of collaboration is lacking. Therefore, in order to better support entrepreneurship, the value proposition of the service should be straightforward. This had to be evaluated in each case as the services were functioning in a variety of environments and engaging different kinds of actors.

A common structure found in practice was that the platform would devise the approach for innovation service provision, taking the role of facilitator or intermediary among EE actors. The processes were centred around developing a constant flow of spontaneous interactions and knowledge co-creation between the chosen EE actors. Some of the services utilised virtual platforms, while some facilitated interaction in physical permanent or changing environments – or combined elements from these. Tools and models to facilitate interactions were sought from readily designed models (e.g. charrette, learning cafe) or were custom-designed. Some platforms published handbooks describing systematically how the process of bringing EE actors together would proceed and what roles each actor had in the different stages.

Nevertheless, the platform was not sustainable if it was unable to include a sustainable funding model into its logic. In order to do so, the platform needs to consider which actors benefit the most and what are their responsibilities. In most cases, this meant embedding the service as a constant tool into a particular organisation and either funding it from the organisation’s budget or with revenues from service sales – or a combination of these two.

Another practical challenge rose in the attempts to embed the services to organisation’s already existing programmes and services as the issue often was that the practical, operational know-how of the processes was with the specific people executing the projects (facilitating innovation services) and often hired as project personnel. The facilitators often lacked authority to make these decisions and the services developed were not utilised in the future or their future remained unclear. It became clear that for the innovation services to survive and become sustainable, a regional actor with the capacity to do so needed to assume the leadership role and thus gain a strong position in steering the local EE development. In some cases, this process went quite smoothly: an actor (such as a university hospital, for instance) designed the service from its own needs, gained strong leadership and embedded it into their practices.

However, as each of the services were different, it is impossible to provide a pattern how the logic of platforms should be repeated and how could they be scaled to other environments: the initiatives were often very specific to a city and its unique needs, which made scaling across regions hard to implement. A lack of scalability ran against the underlying idea of platforms, which envisions the services to be scaled up and delivered on a cross-regional basis. This challenge of entrepreneurship services scaling up underscored the tensions between the locality-bound nature of EEs and the policy-driven attempts to extend the EEs beyond their original borders usually with the support of digital technologies.

The experience of platform-based initiatives offers instructive examples of the practical difficulties that may invalidate large-scale (e.g. national) efforts to build an EE. As the set of unanswered questions on the leadership and sustainability of the innovation services already lie on the regional level, as described above, how to scale the services to national level remains problematic. This revolves around the regionally specific problems that the innovation services aim to tackle and how different regions have different problems.

Another notable challenge associated with the development of innovation services through policy initiatives was assessment of their role in fostering entrepreneurship and innovation. Obviously, for programmes receiving large public funds, the value for money and the evaluative components are important but highly problematic to measure in reality. The diversity and in some cases the subtle nature of many effects significantly complicated the development of appropriate indicators and data collection for evaluation purposes. However, it was recognised that to be integrated as permanent activities by the regional organisations or institutions, the services had to provide clear regional economic and social value.

It is, of course, natural for these rather “novel” policies to have both successful and unsuccessful outcomes. A degree of “growing pains” is also expected when something new is being tried. Overall, the cities involved in the development initiatives benefited from an increased economic and social value creation as a result of an entrepreneurship ecosystem-inspired development policy initiatives.

Emergence and development of EEs

Since there have been several ecosystem-based policy initiatives in Finland, the 6CS being the most recent and large scale, we concentrate in the discussion on the public policies’ role and capability in fostering and supporting the emergence of EEs in a regional context. Our exploratory research suggests that it is possible to foster EEs by facilitating interaction and collaboration among the EE. Some of the innovation services explored have already been integrated as a part of continuous regional activities. In the most successful cases, the projects were able to establish sustainable processes to connect entrepreneurs with competences, data and test environments to support entrepreneurship and innovation in regionally embedded activities (cf. Alvedalen and Boschma, 2017). The 6CS actors were also connecting with each other to combine resources and to better favour entrepreneurship. The Strategy was also pushing forward a national level EE – a level that has been mostly ignored in academic literature (cf. Malecki, 2018). Meanwhile, some of the projects failed to generate long-lasting innovation services but they, nevertheless, contributed to intensified collaboration among the EE actors. The less successful projects also generated useful knowledge on the preferences and needs of the EE participants.

The platform-based models fostered ecosystem building in various environments by offering innovation services, which facilitated the interaction between the entrepreneurs and other ecosystem actors, enabling the former to develop and test products, which were eventually turned into new ventures (cf. Alvedalen and Boschma, 2017; Feldman and Zoller, 2012; Stam, 2015). Some services allowed more citizen- or customer-based approaches to innovation and development (cf. von Hippel, 2005) to allow new services to be built from the existing needs. The services were built around intermediary activities – adopted by universities, city governments and non-profit agencies among others (cf. Feldman and Zoller, 2012) – to facilitate inclusion of wider groups in the innovation and development processes and lead to a wider social and economic impact. The key was the presence of a regional actor taking on the ecosystem leadership. In the services explored, various actors became leaders based on local specificities (cf. Acs et al., 2017; Gawer and Cusumano, 2014; Zahra and Nambisan, 2012).

In conclusion, the experience of the several platform-based innovation services in Finland provided an example of ecosystem-building initiatives, which indeed had an evolutionary dimension (as per: Mack and Mayer, 2016). As the services were run over time and the regional actors and economic and social environment changed, some of the services became irrelevant or unnecessary over time. Besides, the roles of actors within the EE were evolving as well, for instance with some actors becoming “innovators” or “problem solvers” and others taking on leadership roles in delivering the services.

On a wider level, the adaptability and evolution of the services was highlighted as the key. The offered services do not necessarily have to be permanent, but each of them should aim at a sustainable operational model to foster added value and offer benefits while meeting a variety of local needs. These needs are changing over time as the EE evolves; thus, the EEs would enable a dynamic and systematic local process to foster entrepreneurship (Malecki, 2018).

Conclusions

This paper presents an exploratory research on the role and capability of a public policy to foster the emergence and evolution of EEs. It focuses on the development of platforms as a particular policy tool to achieve an EE development. The research illustrates how ecosystem-oriented innovation services can be designed both at the city region and national level to support entrepreneurship and link entrepreneurs to regional and national recourses though platform-based initiatives. Some examples are provided of how this has been attempted on the ground in Finnish ecosystem-based development initiatives, focusing especially on a large-scale national 6CS policy.

Preliminary research shows that EE policy initiatives were enablers for regional actors to launch and develop new services to foster entrepreneurship and new business. New models to link entrepreneurs with both regional and national level resources were developed and at the time of the research, some of them had been embedded in regional organisations or institutions, the sustainability of such activities were in some cases questioned. Some of the developed activities or services did not find a sustainable operational model but were dependent on project funding and were terminated when funding ended. However, even these shorter lived initiatives created and enhanced connections between entrepreneurs and the ecosystem. Thus, it is not enough to focus only on the capacity of public policies to push forward the emergence of EEs but also the evolution of the ecosystems should be supported over the longer term.

Nonetheless, according to our participatory analysis and interviews, those involved in the innovation platforms both as deliverers of the services and those using the innovation services reported overall positive experiences. Moreover, the research indicates that a publicly funded regional development programmes are able to facilitate cross-sectoral interactions and spontaneous connections in order to create new business possibilities through open approaches. These platform-based initiatives highlight the issues of innovation service design that is inclusive and engages a wider set of EE actors in the activities beyond the “usual suspects”. Alongside openness and inclusion, a carefully developed value proposal and process of interaction should be communicated in order to make the approach transparent. A well-designed and clearly communicated process enables services to spread the benefits of the ecosystem-based models to the regional and national ecosystems widely.

Furthermore, to match the needs to the resources in the EE is vital. Our research indicates that ecosystems are evolutionary and thus develop and change over time; the needs and resources also change. This is why the leadership and steering of the ecosystem activities by a dedicated actor is important. An ecosystem is never complete but should be facilitated and access to new actors should be open in order to encourage sustainability and social and economic value in the long run.

This paper has also provided some insight on how attempts to foster entrepreneurship, and create and support EEs with a national policy initiative stemming from the regionally embedded actors can be executed. The role of regional actors is crucial as they have the knowledge on regional needs and access to wide resources. The potential for fostering entrepreneurship and the emergence of EEs by public policy initiatives show promise if we take the case of Finnish ecosystem-based policy as an example, but more research on the role of public policies delivering such activities across different regions and countries is clearly needed.

As the larger scale 6CS was ongoing at the time of the study, the research was not able to analyse fully and conclusively the role of the particular initiative in the further ecosystem development. Longitudinal research is clearly needed. Future research themes could explore and evaluate the entire 6CS by including data also on the impact on the regional and national level development – in fields such as the start-up rates, new job creation or the offer of new products and services. This would enable to create a comprehensive picture of the EE-building strategy’s impact.

Footnotes

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: This work has been supported by Alfred Kordelin Foundation.

ORCID iD

Nadja Nordling

Notes

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