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.

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Feature
Public policy’s role and
capability in fostering the
emergence and evolution of
entrepreneurial ecosystems:
A case of ecosystem-based
policy in Finland
Nadja Nordling
Tampere University, 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 entre-
preneurial ecosystems. This paper contributes to the discussion by focusing on various actors’
roles in supporting entrepreneurship and facilitating interaction and collaboration within entre-
preneurial 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, sus-
tainable and leadership-based innovation services, entrepreneurs are linked to co-creation pro-
cesses, 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
Corresponding author:
Nadja Nordling, Tampere University, Kalevantie 4, 33014
Tampere University, Finland.
Email: nadja.nordling@tuni.fi
Local Economy
2019, Vol. 34(8) 807–824
!The Author(s) 2019
Article reuse guidelines:
sagepub.com/journals-permissions
DOI: 10.1177/0269094219896260
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(Sternberg, 2012). Recent work, however,
has illustrated that it is not new or small
firms per se that are important for econom-
ic growth, but rather a group of ambitious
entrepreneurs aiming constantly to explore
new opportunities, to turn them into busi-
ness ventures and to add as much value as
possible (Stam et al., 2012, 2009). “In prac-
tice, 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 emphasis-
ing more quality-based efforts in support-
ing 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 net-
works, 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 consid-
ered 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 con-
texts (Audretsch and Belitski, 2017;
Pitelis, 2012). The research that pays spe-
cific 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 col-
laboration, openness and mutual value cre-
ation, 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 con-
temporary 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 initia-
tives 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 exer-
cise. This paper analyses 43 platforms deliv-
ering innovation “services” to foster the EE
through engaging various actors into entre-
preneurial 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.
808 Local Economy 34(8)

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 innova-
tion 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 stud-
ies, 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 pro-
posed the term business ecosystem to illus-
trate firms’ ability to engage with its
surrounding environment and create
added value for actors involved in the eco-
system (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 leader-
ship. Meanwhile, the strategic literature
concentrates on the value creation and
value proposal at firm level and discusses
the leadership of the ecosystem by a key-
stone 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 tradi-
tions, the EE approach emphasises the
interdependence between actors and ele-
ments, but puts its central focus on entre-
preneurship 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 litera-
tures underplay the role of entrepreneurs
in creating value (Stam and Spigel, 2017).
The EE discussions focus on the relation-
ships 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 heteroge-
neous group from government agencies and
educational institutions to large firms, cus-
tomers, 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 – entrepre-
neurs may locate new opportunities, develop
and test their products and turn them into
Nordling 809

new ventures (Alvedalen and Boschma,
2017). The evolutionary nature of such eco-
systems is an important notion as the rela-
tionships, 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 system-
atic 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 entrepre-
neurs 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 dif-
ferent 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 con-
centration of entrepreneurial activity (e.g.
clusters, industrial districts, regional inno-
vation 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 interac-
tion and collaboration of various actors and
elements (Motoyama and Watkins, 2014) –
the dynamic nature of EEs – and fail in cap-
turing 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 pro-
viders 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 communi-
cate 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:
1. What is the role of public policy and
publicly funded institutions in creating
and supporting EEs (Acs et al., 2014)?
2. What are the innovation services to facil-
itate EEs that a region is trying to
achieve (Stam, 2015)?
3. How do various actors and elements
within the EE interact (Alvedalen and
Boschma, 2017)?
810 Local Economy 34(8)

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 environ-
ments 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 entre-
preneurship 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 pro-
gramme (worth 100 million Euros in total)
delivered by six Finnish cities (the 6CS,
2014–2020) supporting economic growth
and public sector renewal through incubat-
ing EEs both at the regional and national
levels. The programme goes beyond specific
sectors and aims to achieve goals of open-
ness, 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 pos-
itive 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 pro-
cess and aims to foster reflectivity, learning
and communication in the target communi-
ty 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 includ-
ing 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 (facili-
tators) followed the initial meetings;
•qualitative surveys collected from 40
platform facilitators including develop-
ment agencies, research and education
institutions, city governments and other
public organisations. Feedback discus-
sions with respondents followed the
surveys;
•contributions from 80 ecosystem actors
from operational (platform facilitators)
and strategy levels (policy-makers) gath-
ered 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 rep-
resentatives of city governments, other
Nordling 811

public organisations, research and edu-
cation institutions, non-profit organisa-
tions, 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 objec-
tives of the innovation services imple-
mented and a self-assessment of these
efforts, models of interaction among vari-
ous actors in the ecosystem and their moti-
vations and experiences of engaging with
the innovation services as well as the pro-
cesses that fostered entrepreneurship and
innovation. Workshops generated under-
standing of the different actors’ involve-
ment in the projects; their aims and
objectives; interaction and cooperation
among actors; support for participants in
entrepreneurship and innovation and mech-
anisms for knowledge sharing. The work-
shops featured extensive discussions of the
building ecosystems processes through ser-
vice delivery within the six cities, and also
between them, and creating global connec-
tions 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 ecosys-
tem development. This allowed a more
detailed observation of the exact ways par-
ticipants became a part of the ecosystem,
and their experiences of accessing the inno-
vation services and building added value as
a result of this. Whereas the interviews, sur-
veys, discussion forum and documents ana-
lysed focused mostly on the actors
delivering or enabling the innovation serv-
ices, 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 per-
sonal 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 meth-
ods were designed by the wider research
team, such as interviews and surveys, and
other researchers were involved in conduct-
ing 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 ele-
ments in EEs, their interaction and various
roles, motivation and incentives for differ-
ent actors in the innovation services, and
processes and models fostering and incubat-
ing 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 com-
bined with a bottom-up approach to allow
new themes and topics to emerge from the
different data sets.
812 Local Economy 34(8)

Incubating EEs in Finland
Recent policy measures in Finland have
focused on increasing the level of collabo-
ration, openness and mutual value creation
between economic actors. One of the recent
national programmes, the 6CS of Finland –
open and smart services (2014–2020) deliv-
ered via projects, provides an example of
the implementation of a wider ecosystem-
based policy. This sustainable urban devel-
opment strategy aims to foster and support
entrepreneurship and new business forma-
tion and increase the level of service inno-
vations in public services. The objective is
to enhance regional and national competi-
tiveness. In order to do so, the Strategy
captures the spirit of co-creation and col-
laboration in innovation platforms to
reach a wide social and economic renewal.
The Strategy utilises digital technology to
harmonise regionally dispersed public ser-
vice structure and to enable a coherent
market place for entrepreneurship.
This bottom-up policy initiative builds
on previous smaller scale attempts to devel-
op 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 ecosys-
tems 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 orga-
nisation of the 6CS actors to illustrate how
the large policy effort is put together and
what kind of mechanisms it includes in sup-
porting EE development. Then, as we aim
to ground our discussion of public policy
using an EE framework in “real life” expe-
riences, we provide tangible examples of
efforts that have been made within this
scope. Lastly, we turn our focus on evalu-
ating 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 big-
gest 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 mil-
lion Euros.
2
The Strategy is based on three larger
spearhead projects: open innovation plat-
forms, open data and interfaces, and open
participation and customership whilst sev-
eral 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 envi-
ronments for the development of new prod-
ucts, services, businesses and markets
ranging from brand new ideas to testing
ready-made products. The open innovation
platforms act as “hubs” to facilitate the
Nordling 813

ecosystem and link various regional actors
together in innovation services.
The spearhead projects are a joint ven-
ture 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 pro-
gramme period, which allows companies,
development agencies, research and educa-
tion 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 institu-
tions. While the 6CS sets the guidelines
and focus of the Strategy, within each indi-
vidual 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 inter-
esting is, firstly, that it is the first time that
the six biggest cities come together to devel-
op public services and entrepreneurial activ-
ities 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 inno-
vation platforms as an interesting and novel
policy effort to develop EEs. Next, we illus-
trate the logic behind innovation platforms
with a few examples that were deemed as
useful for developing the local EE through
interaction and collaboration through dif-
ferent ecosystem actors.
Example 1: University–industry collaboration
platform. Firstly, we introduce a “mature”
innovation platform with over 10-year his-
tory, repeatedly used as an example of a suc-
cessful 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 region-
al contexts both nationally and internation-
ally. The international activities are run by a
company but on operational level the facil-
itators constitute of either university person-
nel 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 innova-
tion process model that can be embedded to
various environments. The roles and inter-
action of actors involved are supported by a
digital platform that also connects the inter-
national 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 offer-
ing 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
814 Local Economy 34(8)

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 com-
panies can initiate a collaborative project,
while the platform helps to detect the
common interests to offer companies possi-
bilities to develop and test their products or
services together with the schools and ben-
efit 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 oppor-
tunities 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 par-
ticipants’ common interests, here the com-
panies’ 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 ser-
vice offered only a limited test environment
(one school), lacked in mediation between
the parties (lack of digital platform’s sup-
port) and was exclusive in nature
(companies were handpicked and informa-
tion online was limited). In addition, the ser-
vice 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 teach-
er’s input was not enough to keep the activ-
ities 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 inno-
vation. The platform’s services included
co-creation facilities, a variety of technologi-
cal devices, training and expert lectures in an
innovation friendly atmosphere with a
weekly schedule linking the participants
with each other and to the regional ecosys-
tem. The service was publicly funded and was
in action for seven years during which the
participants established over a 100 compa-
nies. 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 crowdsourc-
ing with a user-base of approximately 800
citizens from a particular city. The platform
offers an innovation service in which
Nordling 815

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 com-
petes with various international companies
offering similar services with larger user-
bases and state-of-the-art technological sol-
utions. 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 afford-
able solutions. However, for now the plat-
form has not been utilised widely. Lacking
leadership and resources as the particular
university does not have the manpower
(or the interest) to commercialise the con-
cept 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 univer-
sity hospital opening pathways for struc-
tured 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 facil-
ities with particular specialists from the hos-
pital, i.e. doctors, surgeons, nurses who test
and give feedback on the company’s prod-
uct 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 practi-
cal needs. The entrepreneurs gain from
valuable feedback and may develop the
product or service accordingly to better
meet the market needs (national and inter-
national). 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 inter-
dependence 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 citi-
zen’s recognised needs with companies’ sol-
utions. The needs are gathered by
interviewing citizens and after communicat-
ed to companies to build solutions in a
workshop-based mode, which exposes the
companies’ ideas also to specialists in a par-
ticular field (e.g. workshop for traffic
includes truck drivers, insurance company
personnel, engineers, etc.). The entrepre-
neurs gain new ideas and concepts to
enhance their business while creating solu-
tions for the city community. Even though
the service has shown some positive feed-
back, the process is rather heavy to facili-
tate as it builds on hand-picking each
816 Local Economy 34(8)

participating group (citizens, companies,
specialists). Despite the benefits for compa-
nies, 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 motiva-
tion 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 col-
laboration and interaction of EE actors
through innovation services, in which entre-
preneurs are connected to regional – or
even national or international – resources
(infrastructure, competencies, data, etc.) in
the spirit of co-creation. The examples rep-
resent both some of best practice examples
of how an EE approach can be used suc-
cessfully as a policy tool, and some of the
less successful ones to provide lessons to be
learned from.
The foremost important factor to consid-
er is the platform’s logic, i.e. how the pro-
cesses 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 plan-
ning 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 opera-
tional 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 strate-
gic level (decision-makers) actors. The oper-
ational 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 out-
come. Some of the less successful initiatives
struggled to secure entrepreneurs’ participa-
tion 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 collabora-
tion 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 cen-
tred around developing a constant flow of
spontaneous interactions and knowledge
co-creation between the chosen EE actors.
Some of the services utilised virtual plat-
forms, while some facilitated interaction in
physical permanent or changing environ-
ments – 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 pub-
lished handbooks describing systematically
how the process of bringing EE actors
Nordling 817

together would proceed and what roles each
actor had in the different stages.
Nevertheless, the platform was not sus-
tainable if it was unable to include a sustain-
able 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 organisa-
tion’s already existing programmes and
services as the issue often was that the prac-
tical, operational know-how of the process-
es 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 under-
scored 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 inno-
vation 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 mea-
sure in reality. The diversity and in some
cases the subtle nature of many effects sig-
nificantly complicated the development of
appropriate indicators and data collection
for evaluation purposes. However, it was
recognised that to be integrated as perma-
nent 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 initia-
tives benefited from an increased economic
and social value creation as a result of an
entrepreneurship ecosystem-inspired devel-
opment policy initiatives.
818 Local Economy 34(8)

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 foster-
ing 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 entrepre-
neurs with competences, data and test envi-
ronments to support entrepreneurship and
innovation in regionally embedded activi-
ties (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 nation-
al 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 gen-
erated useful knowledge on the preferences
and needs of the EE participants.
The platform-based models fostered eco-
system building in various environments by
offering innovation services, which facilitat-
ed the interaction between the entrepre-
neurs and other ecosystem actors, enabling
the former to develop and test products,
which were eventually turned into new ven-
tures (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 devel-
opment 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 sev-
eral 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 serv-
ices were run over time and the regional
actors and economic and social environ-
ment 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 nec-
essarily have to be permanent, but each of
them should aim at a sustainable operation-
al 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 pro-
cess to foster entrepreneurship (Malecki,
2018).
Conclusions
This paper presents an exploratory research
on the role and capability of a public policy
Nordling 819

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 innova-
tion 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 busi-
ness. 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 insti-
tutions, 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 ter-
minated when funding ended. However,
even these shorter lived initiatives created
and enhanced connections between entre-
preneurs and the ecosystem. Thus, it is not
enough to focus only on the capacity of
public policies to push forward the emer-
gence of EEs but also the evolution of the
ecosystems should be supported over the
longer term.
Nonetheless, according to our participa-
tory analysis and interviews, those involved
in the innovation platforms both as deliver-
ers of the services and those using the inno-
vation services reported overall positive
experiences. Moreover, the research indi-
cates that a publicly funded regional devel-
opment 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 inclu-
sion, a carefully developed value proposal
and process of interaction should be com-
municated 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 ecosys-
tems 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 region-
ally 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 foster-
ing entrepreneurship and the emergence of
EEs by public policy initiatives show prom-
ise if we take the case of Finnish ecosystem-
based policy as an example, but more
research on the role of public policies deliv-
ering 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
820 Local Economy 34(8)

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.
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 https://orcid.org/0000-0003-
3486-3253
Notes
1. For a full list of platforms and number of
people and organisations engaged in each
data collection stage, see Appendix 1.
2. Eighty million Euros: 50% European
Regional Development Fund, 33% cities and
17% central government, 20 million Euros
utilised from the European Social Fund.
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Appendix 1. Summary and timeline of data gathering during
involvement in the Six City Strategy
Platforms for innovation
services
a
Organisations
represented
People
involved
Interviews, spring 2015
Interviews with innovation service
facilitators (HEIs, nonprofit
BioMediTech, Demola,
Ideascout, ITS Factory,
Campus Arena, Kauppi
820
(continued)
822 Local Economy 34(8)

Continued
Platforms for innovation
services
a
Organisations
represented
People
involved
organisations, development agencies,
public sector, etc.) to understand
how collaboration, participation and
co-creation activities are organised
campus, Mediapolis, Tesoma
suburb (city of Tampere)
Analysis of the service logic of selected
innovation services, spring 2016
Workshops and meetings with innova-
tion service facilitators and regional
strategic development representa-
tives (e.g. city government, regional
council) to understand and develop
innovation services with the help of
an “outside” opinion
HealthHUB, Mapgets, Patio,
Takomo, NewFactory StartUp
Programme, Virpa-project
12 15
Online forum, fall 2016–spring 2017
Online forum data were gathered from
innovation service participants:
operational (service facilitators) and
strategic level (policy). The forum
gathered views on collaborative
development in four iterations in
order to capture the development
process of both the services and
understanding of them
CityGeoModel – open citygeo-
model, Data driven bissnes,
Demola, EduDigi, HealthHUB,
Change of owners in social,
Climate street, Service market
in Espoo, Smart Kalasatama,
Koklaamo, KYKY, MEDAIA,
Mediapolis, NewFactory
StartUp Programme, Virtual
innovation platform for ser-
vice robotics, Patio, SMACC,
SOHJOA, TreStart, TRY
OUT!, Future food world,
TUTLab, Twinkle, Y-campus,
OuluHealth, University hospi-
tals as innovation platforms
(Turku)
37 80
Qualitative survey, spring 2017–fall
2017
Qualitative survey data was collected
from 40 innovation service facilita-
tors (development agencies, research
and education institutions, cities and
other public organisations) in which
they assessed the innovation service,
feedback discussions with respond-
ents followed the surveys
Data driven business, Smart
Kalasatama, EduDigi (Vantaa &
Oulu), Service market in
Espoo, Circular economy
wholesale, Koklaamo,
Kustaankartano service
center, KYKY, Metsokangas
school, Service center
Helsinki, Virtual innovation
platform for service robotics,
Patio, Clean Vallisaari, Solution
factory, Skanssi, Future food
world, University hospitals as
innovation platforms (Turku &
Oulu)
21 44
(continued)
Nordling 823

Continued
Platforms for innovation
services
a
Organisations
represented
People
involved
Workshops, spring 2015–spring 2018
Nine workshops were organised in
different themes in order to develop
and share ideas on innovation serv-
ices. Participants were both opera-
tional (service facilitators) and
strategic level (policy)
1. Collaboration, measurement and
benefits in platform-based devel-
opment 17/20
2. Value creation in platform-based
development 11/14
3. Operational leadership and mea-
surement of open innovation
platforms 19/31
4. Why do we need innovation plat-
forms? 16/19
5. IPR and open innovation in plat-
form-based development – chal-
lenges 15/19
6. IPR and open innovation in plat-
form-based development – solu-
tions 13/18
7. Leadership training for innovation
platforms 1: from the develop-
ment of an open innovation plat-
form towards platform-based
service production 13/17
8. Leadership training for innovation
platforms 2: platform’s sustain-
ability: from projects to service
production 18/32
9. Utilising digitalisation in platform-
based development and innova-
tion services 21/51
b
130 221
Innovation services
In total the different data collection stages generated data on
43 innovation services
cd
a
Some of the analysed innovation services were working as projects during the time of the research, while some had
already been in operation for a longer time and thus already had a brand or were established companies.
b
The workshops created a wider understanding of the state of ecosystem-based development in Finland. However, they
did not offer analysis on specific innovation services, therefore not named here.
c
To be noted that some organisations (not necessary the same people) participated in multiple activities, so summing these
up here is not relevant.
d
To be noted that some of the people participated in multiple activities, so summing these up here is not relevant.
824 Local Economy 34(8)