Innovation management of biorefineries in Finnish forest sector

The aim of this report is to give a comprehensive overview of the opportunities integrated biorefining can offer to Finnish forest industry companies and to assess what changes it would require from these companies to implement biorefining into their business. Also the strengths and weaknesses of the Finnish forest industry companies connected to biorefining are examined through innovation management theory frames, industry comparisons, company examples and couple of case-examples. The conclusions of the report include the statement that the Finnish forest industry has a good starting point for biorefinering and many advantages compared to other countries and industries. Unfortunately the history of the industry is holding it back and the thinking patterns would have to be altered to a more innovative and co-operational direction.

Innovation Project Portfolio Management

Companies today are forced to innovate in order to remain within business. Such innovation projects undertaken by the companies are defined in this study as creative ideas which have been managed through “Stage-Gate” innovation process. This process is used to manage innovation projects as they proceed from being newly created to ready for launching/implementing. This has ensured that the companies manage the innovation project right. However, with so many new creative ideas the companies can come up within limited resources, the companies must rely on Innovation Project Portfolio Management (IPPM) to ensure that they are managing only the right innovation projects. Although, there are many tools and techniques available for use within Project Portfolio Management, there is still no consensus on which are the most effective and no standard framework has been established especially for IPPM. Thus, this study proposes a practical framework for which individual innovative organization can follow as a guideline to manage its innovation project portfolio. The study theoretically first addresses the key differences between project portfolio management of innovation projects and other traditional projects - one of which is the stage nature of innovation projects due to their unclear objectives from the beginning compare to clearly established objectives of traditional projects. Secondly, different tools and techniques which can be used are examined based on the three goals of IPPM: (1) Maximizing the Value of Innovation Project Portfolio: Financial Methods, Decision Trees, Scoring Models and Checklists; (2) Balancing Innovation Project Portfolio: Visual Representations; and (3) Aligning Innovation Project Portfolio with Strategy: Bottom-Up (Scoring Models with Strategic Criteria) and Top-Down (Strategic Buckets). Finally, the two approaches in which IPPM can be integrated with Stage-Gate innovation process are discussed: (1) Gates- Dominated; and (2) Portfolio Reviews-Dominated. Practically, this study investigates IPPM of a case organization, and through analysis of the case study results proposes a practical framework for case organization to improve its current management of innovation project portfolio. This framework is then generalized to propose a final practical framework or guideline for which an innovative organization can follow to manage its innovation project portfolio.

Reflexive model of research-based theatre – processing innovation at the crossroads of theatre, reflection and practice-based innovation activities

Contemporary organisations have to embrace the notion of doing ‘more with less’. This challenges knowledge production within companies and public organisations, forcing them to reorganise their structures and rethink what knowledge production actually means in the context of innovation and how knowledge is actually produced among various professional groups within the organisation in their everyday actions. Innovations are vital for organisational survival, and ‘ordinary’ employees and customers are central but too-often ignored producers of knowledge for contemporary organisations. Broader levels of participation and reflexive practices are needed. This dissertation discusses the missing links between innovation research conducted in the context of industrial management, arts, and culture; applied drama and theatre practices (specifically post-Boalian approaches); and learning – especially organising reflection – in organisational settings. This dissertation (1) explores and extends the role of research-based theatre to organising reflection and reflexive practices in the context of practice-based innovation, (2) develops a reflexive model of RBT for investigating and developing practice-based organisational process innovations in order to contribute to the development of a tool for innovation management and analysis, and (3) operationalises this model within private- and publicsector organisations. The proposed novel reflexive model of research-based theatre for investigating and developing practice-based organisational process innovations extends existing methods and offers a different way of organising reflection and reflexive practices in the context of general innovation management. The model was developed through five participatory action research processes conducted in four different organisations. The results provide learning steps – a reflection path – for understanding complex organisational life, people, and relations amid renewal and change actions. The proposed model provides a new approach to organising and cultivating reflexivity in practice-based innovation activities via research-based theatre. The results can be utilised as a guideline when processing practice-based innovation within private or public organisations. The model helps innovation managers to construct, together with their employees, temporary communities where they can learn together through reflecting on their own and each others’ experiences and to break down assumptions related to their own perspectives. The results include recommendations for practical development steps applicable in various organisations with regard to (i) application of research-based theatre and (ii) related general innovation management. The dissertation thus contributes to the development of novel learning approaches in knowledge production. Keywords: practice-based innovation, research-based theatre, learning, reflection, mode 2b knowledge production

On Innovative Search: the use of internal and external sources of innovation among Finnish innovators

This dissertation explores the use of internal and external sources of knowledge in modern innovation processes. It builds on a framework that combines theories such as a behavioural theory of the firm, the evolutionary theory of economic change, and modern approaches to strategic management. It follows the recent increase in innovation research focusing on the firm-level examination of innovative activities instead of traditional industry-level determinants. The innovation process is seen as a problem- and slack- driven search process, which can take several directions in terms of organizational boundaries in the pursuit of new knowledge and other resources. It thus draws on recent models of technological change, according to which firms nowadays should build their innovative activities on both internal and external sources of innovation rather than relying solely on internal resources. Four different research questions are addressed, all of which are empirically investigated via a rich dataset covering Finnish innovators collected by Statistics Finland. Firstly, the study examines how the nature of problems shapes the direction of any search for new knowledge. In general it demonstrates that the nature of the problem does affect the direction of the search, although under resource constraints firms tend to use external rather than internal sources of knowledge. At the same time, it shows that those firms that are constrained in terms of finance seem to search both internally and externally. Secondly, the dissertation investigates the relationships between different kinds of internal and external sources of knowledge in an attempt to find out where firms should direct their search in order to exploit the potential of a distributed innovation process. The concept of complementarities is applied in this context. The third research question concerns how the use of external knowledge sources – openness to external knowledge – influences the financial performance of firms. Given the many advantages of openness presented in the current literature, the focus is on how it shapes profitability. The results reveal a curvilinear relationship between profitability and openness (taking an inverted U-shape), the implication being that it pays to be open up to a certain point, but being too open to external sources may be detrimental to financial performance. Finally, the dissertation addresses some challenges in CISbased innovation research that have received relatively little attention in prior studies. The general aim is to underline the fact that comprehensive understanding of the complex process of technological change requires the constant development of methodological approaches (in terms of data and measures, for example). All the empirical analyses included in the dissertation are based on the Finnish CIS (Finnish Innovation Survey 1998-2000).

Biodiversity and ecosystem functioning in angiosperm communities in the Baltic Sea

The biological variation in nature is called biodiversity. Anthropogenic pressures have led to a loss of biodiversity, alarming scientists as to what consequences declining diversity has for ecosystem functioning. The general consensus is that diversity (e.g. species richness or identity) affects functioning and provides services from which humans benefit. The aim of this thesis was to investigate how aquatic plant species richness and identity affect ecosystem functioning in terms of processes such as primary production, nutrient availability, epifaunal colonization and properties e.g. stability of Zostera marina subjected to shading. The main work was carried out in the field and ranged temporally from weeklong to 3.5 months-long experiments. The experimental plants used frequently co-occur in submerged meadows in the northern Baltic Sea and consist of eelgrass (Z. marina), perfoliate pondweed (Potamogeton perfoliatus), sago pondweed (P. pectinatus), slender-leaved pondweed (P. filiformis) and horned pondweed (Zannichellia palustris). The results showed that plant richness affected epifaunal community variables weakly, but had a strong positive effect on infaunal species number and functional diversity, while plant identity had strong effects on amphipods (Gammarus spp.), of which abundances were higher in plant assemblages consisting of P. perfoliatus. Depending on the starting standardizing unit, plant richness showed varying effects on primary production. In shoot density-standardized plots, plant richness increased the shoot densities of three out of four species and enhanced the plant biomass production. Both positive complementarity and selection effects were found to underpin the positive biodiversity effects. In shoot biomass-standardized plots, richness effects only affected biomass production of one species. Negative selection was prevalent, counteracting positive complementarity, which resulted in no significant biodiversity effect. The stability of Z. marina was affected by plant richness in such that Z. marina growing in polycultures lost proportionally less biomass than Z. marina in monocultures and thus had a higher resistance to shading. Monoculture plants in turn gained biomass faster, and thereby had a faster recovery than Z. marina growing in polycultures. These results indicate that positive interspecific interactions occurred during shading, while the faster recovery of monocultures suggests that the change from shading stress to recovery resulted in a shift from positive interactions to resource competition between species. The results derived from this thesis show that plant diversity affects ecosystem functioning and contribute to the growing knowledge of plant diversity being an important component of aquatic ecosystems. Diverse plant communities sustain higher primary productivity than comparable monocultures, affect faunal communities positively and enhance stability. Richness and identity effects vary, and identity has generally stronger effects on more variables than richness. However, species-rich communities are likely to contain several species with differing effects on functions, which renders species richness important for functioning. Mixed meadows add to coastal ecosystem functioning in the northern Baltic Sea and may provide with services essential for human well-being.

Service innovation development and knowledge integration practices - a comparative case study on KIBS sector

Academic research on services and innovations on services has significantly grown during recent years. So far research concerning management of knowledge intensive work on service development activities is very limited. The objective of this study was to examine knowledge integration practices that support service innovation development and to the best of knowledge such studies have not been previously published in academic literature. In the theoretical part of the study a review of state‐of‐the‐art literature was conducted, research gap was indicated and a framework for analysis was built. In the empirical part an explorative comparative multi‐case study was carried out in KIBS sector. Four companies were selected and four service development projects were inspected. The service development activities and knowledge integration practices were identified. The cases were carefully compared and results formed. The empirical results indicated that service innovation development is partly linear and partly incremental flow of activities where knowledge integration practices have important role supporting the planning and execution of tasks. Knowledge integration practices supporting planning and workshops are close interaction, interpretation, project planning and sequencing of work tasks. The identified knowledge integration practices supporting building service solution were careful role and competence management, routines and common knowledge. The main implication is that to manage knowledge intensive service innovation development a firm should carefully develop and choose relevant knowledge integration practices to support the service development activities.

Strategic Innovation Management Based on Three Dimensions

This thesis examines innovation development needs of firms in a remote rural region. The perspective of the study is in strategic innovation management and three dimensions of innovation development: innovation environment, value delivery and innovation capability. The framework is studied with a theoretical and methodological approach in the context of the development of a regional innovation system and the defining of innovation development needs. The thesis is based on existing innovation management literature, expanding it by examining the features of the three dimensions. The empirical data of the study comprise 50 purposefully selected firms within the region of Pielinen Karelia located in Eastern Finland. Most of the firms (70%) included in the study represent manufacturing firms, and over 90% are small and medium-sized enterprises. The research data consist of two questionnaires and an interview, which were done during 2011 in the connection of a regional development project. The point of view of the research is in regional development and harnessing the innovation capability of the firms within the region. The principal research approach applies soft systems methodology. The study explores the means to foster the innovativeness of firms from the viewpoints of innovation environment, innovation capability and value delivery. In closer detail, the study examines relations between the innovation capability factors, differences in innovation development needs within the value delivery system, between sectors and between firm size categories. The thesis offers three major contributions. First, the study extends earlier research on strategic innovation management by connecting the frameworks of innovation capability, innovation environment and value delivery process to the defining of innovation development needs at the regional level. The results deepen knowledge especially concerning practice-based innovation, peripheral regions and smaller firms. Second, the empirical work, based on a case study, confirms the existence of a structural connection integrating five factors of innovation capability. Statistical evidence is provided especially for the positive impacts of the improvement of absorption capability, marketing capability and networking capability, which are the main weaknesses of firms according to the study. Third, the research provides a methodological contribution by applying the innovation matrix in the defining of the innovation development needs of firms. The study demonstrates how the matrix improves possibility to target policy instruments and innovation services more efficiently through indicating significant differences between the innovation support needs regarding various time horizons and phases of innovation process.

Disturbance and ecosystem functioning : the role of changes in benthic biological traits

Rapid changes in biodiversity are occurring globally, as a consequence of anthropogenic disturbance. This has raised concerns, since biodiversity is known to significantly contribute to ecosystem functions and services. Marine benthic communities participate in numerous functions provided by soft-sedimentary ecosystems. Eutrophication-induced oxygen deficiency is a growing threat against infaunal communities, both in open sea areas and in coastal zones. There is thus a need to understand how such disturbance affects benthic communities, and what is lost in terms of ecosystem functioning if benthic communities are harmed. In this thesis, the status of benthic biodiversity was assessed for the open Baltic Sea, a system severely affected by broad-scale hypoxia. Long-term monitoring data made it possible to establish quantitative biodiversity baselines against which change could be compared. The findings show that benthic biodiversity is currently severely impaired in large areas of the open Baltic Sea, from the Bornholm Basin to the Gulf of Finland. The observed reduction in biodiversity indicates that benthic communities are structurally and functionally impoverished in several of the sub-basins due to the hypoxic stress. A more detailed examination of disturbance impacts (through field studies and -experiments) on benthic communities in coastal areas showed that changes in benthic community structure and function took place well before species were lost from the system. The degradation of benthic community structure and function was directed by the type of disturbance, and its specific temporal and spatial characteristics. The observed shifts in benthic trait composition were primarily the result of reductions in species’ abundances, or of changes in demographic characteristics, such as the loss of large, adult bivalves. Reduction in community functions was expressed as declines in the benthic bioturbation potential and in secondary biomass production. The benthic communities and their degradation accounted for a substantial proportion of the changes observed in ecosystem multifunctionality. Individual ecosystem functions (i.e. measures of sediment ecosystem metabolism, elemental cycling, biomass production, organic matter transformation and physical structuring) were observed to differ in their response to increasing hypoxic disturbance. Interestingly, the results suggested that an impairment of ecosystem functioning could be detected at an earlier stage if multiple functions were considered. Importantly, the findings indicate that even small-scale hypoxic disturbance can reduce the buffering capacity of sedimentary ecosystem, and increase the susceptibility of the system towards further stress. Although the results of the individual papers are context-dependent, their combined outcome implies that healthy benthic communities are important for sustaining overall ecosystem functioning as well as ecosystem resilience in the Baltic Sea.

Exploring the value creation in service ecosystem context: the case of the information technology sector

This thesis examines customer value creation in a service ecosystem context. The objective of this thesis is to develop a comprehensive view of value creation processes in a service ecosystem context and an understanding on the roles of the stakeholders involved in these processes, focusing on the information technology industry. The novelty of the two central concepts of this thesis, systemic customer value and service ecosystem, as well as the gap in the literature of empirical research on value creation in an ecosystem-level, opened an interesting research topic. The empirical study is conducted as a single case analysis, utilizing Group Decision Support System (GDSS) and also Analytic Hierarchy Process (AHP). The findings suggest that customer value is created by a complex combination of interactions among different actors of the ecosystem. Thus, value is not created by a single offering directed to the customer, but by an integration of services from different parts of the ecosystem as well as the active participation of customer in this process.

The Impact of National Innovation System on Entrepreneurial Venture Creation Process

The important role of entrepreneurship in countries’ economic development and overall society well-being is widely recognized by researchers, experts as well as policy makers. Every phase of the process of starting a new business is related to the interaction with at least one player of country innovation system and therefore the efficiency of this interaction may have an influence on the success of whole entrepreneurial process and consequently on the willingness of potential entrepreneurs to engage into this process. The study proposes a System Dynamics model for studying the impact of National Innovation System (NIS) on the entrepreneurial venture creation process. The developed model also takes country population aspect into account and provides results for estimation the effect various demographic tendencies on the process performance. The special impact is made on possible ways to facilitate the development of entrepreneurial framework conditions. Business incubators are seen as one of the effective tool for accomplishing such task. The study also provides the result for estimation of possible impact arising from properly functioned Business Incubators.

Entrepreneurship, Service Innovation, International Expansion and Performance in SMEs: Empirical Evidence from Finnish ICT Industry

The thesis aims to clarify the mixed results of prior literature regarding the performance impacts of entrepreneurship and human capital through service innovation and international expansion. The thesis examines the factors affecting degree of internationalization (DOI) and performance in ICT SMEs. These factors are entrepreneurial orientation (EO), human capital and service innovation (SI). The data was collected via questionnaire from Finnish ICT SMEs. The results suggest that EO consist of three dimensions that have different impact in DOI and SI. Also DOI has inverted U-shaped relationship with international performance, whereas DOI-profitability relationship is linear. The results of the study suggest that SMEs should not blindly increase their DOI, and that strategic focus is important.

Innovation in a Non-Formal Adult Education Organisation – Multi-Case Study in Four Adult Education Centres

More than ever, education organisations are experiencing the need to develop new services and processes to satisfy expanding and changing customer needs and to adapt to the environmental changes and continually tightening economic situation. Innovation has been found in many studies to have a crucial role in the success of an organisation, both in the private and public sectors, in formal education and in manufacturing and services alike. However, studies concerning innovation in non-formal adult education organisations, such as adult education centres (AECs) in Finland, are still lacking. This study investigates innovation in the non-formal adult education organisation context from the perspective of organisational culture types and social networks. The objective is to determine the significant characteristics of an innovative non-formal adult education organisation. The analysis is based on data from interviews with the principals and fulltime staff of four case AECs. Before the case study, a pre-study phase is accomplished in order to obtain a preliminary understanding of innovation at AECs. The research found strong support for the need of innovation in AECs. Innovation is basically needed to accomplish the AEC system’s primary mission mentioned in the ACT on Liberal Adult Education. In addition, innovation is regarded vital to institutes and may prevent their decline. It helps the institutes to be more attractive, to enter new market, to increase customer satisfaction and to be on the cutting edge. Innovation is also seen as a solution to the shortage of resources. Innovative AECs search actively for additional resources for development work through project funding and subsidies, cooperation networks and creating a conversational and joyful atmosphere in the institute. The findings also suggest that the culture type that supports innovation at AECs is multidimensional, with an emphasis on the clan and adhocratic culture types and such values as: dynamism, future orientation, acquiring new resources, mistake tolerance, openness, flexibility, customer orientation, a risk-taking attitude, and community spirit. Active and creative internal and external cooperation also promote innovation at AECs. This study also suggests that the behaviour of a principal is crucial. The way he or she shows appreciation the staff, encouragement and support to the staff and his or her approachability and concrete participation in innovation activities have a strong effect on innovation attitudes and activities in AECs.

Launching the product innovation to a market: case study from a dairy industry

In the environment of ever-changing needs of customers, technologies and competitors, the survival of the company depends on how well it researches, develops and implements new products to the market. The need for development of new products relates to many factors: globalization, international competition which is now underway on a global scale, scientific advances and development of production, changes in consumer preferences and consumer behavior. In this study the focus is on the company form a dairy products industry. This study is aimed to defining the role of product innovation launch strategy in an overall enterprise strategy, and to select the optimal combination of its marketing tools. The main purpose of this study is to determine place and the role of innovative marketing based in the innovation process, and to determine launch and positioning strategies in the general concept of an innovative product. The object of the study is the Russian enterprise, which is aimed to achieve a competitive advantage through the continuous production of new products, upgrade existing ones and improve innovation management practices. Research showed that the differentiation strategy is suitable for launching the dairy industry product innovation to a market.

The Role of Universities in the Triple Helix model of innovation management within the biotechnology industry, Case example: Turku Science Park Network

Biotechnology has been recognized as the key strategic technology for industrial growth. The industry is heavily dependent on basic research. Finland continues to rank in the top 10 of Europe's most innovative countries in terms of tax-policy, education system, infrastructure and the number of patents issued. Regardless of the excellent statistical results, the output of this innovativeness is below acceptable. Research on the issues hindering the output creation has already been done and the identifiable weaknesses in the Finland's National Innovation system are the non-existent growth of entrepreneurship and the missing internationalization. Finland is proven to have all the enablers of the innovation policy tools, but is lacking the incentives and rewards to push the enablers, such as knowledge and human capital, forward. Science Parks are the biggest operator in research institutes in the Finnish Science and Technology system. They exist with the purpose of speeding up the commercialization process of biotechnology innovations which usually include technological uncertainty, technical inexperience, business inexperience and high technology cost. Innovation management only internally is a rather historic approach, current trend drives towards open innovation model with strong triple helix linkages. The evident problems in the innovation management within the biotechnology industry are examined through a case study approach including analysis of the semi-structured interviews which included biotechnology and business expertise from Turku School of Economics. The results from the interviews supported the theoretical implications as well as conclusions derived from the pilot survey, which focused on the companies inside Turku Science Park network. One major issue that the Finland's National innovation system is struggling with is the fact that it is technology driven, not business pulled. Another problem is the university evaluation scale which focuses more on number of graduates and short-term factors, when it should put more emphasis on the cooperation success in the long-term, such as the triple helix connections with interaction and knowledge distribution. The results of this thesis indicated that there is indeed requirement for some structural changes in the Finland's National innovation system and innovation policy in order to generate successful biotechnology companies and innovation output. There is lack of joint output and scales of success, lack of people with experience, lack of language skills, lack of business knowledge and lack of growth companies.