Value Network Capability 2016: The sluggish economic situation also poses a challenge to the Tampere Region's competitiveness

The Tampere Region has been undergoing structural change for a long period of time, with major upheaval in the regional economic structure. However, renewal of the Tampere Region is very much in play, which can be seen in, for example, the number of growth companies, increasing entrepreneurship and a changing economic structure. The Tampere Region has also made an active effort to respond to global change phenomena, such as digitalisation. Even though renewal has been more typical of the Tampere Region than stagnation, the situation in recent years has been challenging where regional competitiveness is concerned. The soft economic situation in recent years, in particular, has hindered renewal of this industry-intensive, export-driven region, which can be seen in the development of competitiveness indicators.

Value network capability. The situational picture of innovation 2016.

The number of growth companies dropped after several periods of rising growth. However, growth companies are still showing diverse growth in different sectors , and during the last growth period (2011-2014), particularly in labour-intensive sectors, such as industry and commerce. There is also growth in sectors that are smaller within the framework of the Tampere Region's economic structure, which indicates that new business is created and grows in somewhat unconventional fields helping the Tampere Region business sector to renew itself.

There was a considerable drop in the investment rate (-18.3%) from 2012 to 2013. This reflects the soft economic situation. The value added at factor cost in industry, value added per hours worked and value of industrial exports have, however, remained roughly the same, year-on-year. Indicators holding steady show that, despite the challenging times, we have been able to maintain our base level of operational capacity, even though new investments have not been made as actively as in previous years.

Although the number of entrepreneurs and skilled labour level have remained fairly even in recent years, decreases of over one per cent in the latest figures indicate the poor state of the economy and employment rate. The stable entrepreneurship environment shows that there have been no major changes in the operating environment that would significantly degrade or improve the outlook for entrepreneurial conditions.

The turnover in digital services has fallen (-5.9%) from the peak reached in 2013. However, there has been some positive movement in the sector in recent years and, with a deepening of digitalisation, new business opportunities are constantly arising. Indeed, the Tampere Region has not hesitated in jumping on the opportunities offered by digitalisation, as can be seen, for example, in the considerable number of growth companies in the information and communications sector. For example, there are numerous software developers on the list of growth companies. Read more about digitalisation

In 2016-2018, regions will be provided with funding for Launching regional innovations and experiments (AIKO). In the Tampere Region, the main themes of this AIKO funding are reform of the manufacturing sector and development of service and investment practices. AIKO funding is allocated primarily for small-scale, one-time trials creating new innovations as well as for pilots intended for the testing and launch of new operating approaches.

Elements of value network capability.

A profile comparison of Finland's different regions shows that the Tampere Region profile has remained unchanged compared to the analysis conducted during in 2015. In the analysis, the Tampere Region is part of the Regions of high knowledge and technology in Finland, but, in certain areas, the Tampere Region profile matches that of the capital region. Indeed, in terms of its competence and resource base, the Tampere Region is comparable with the capital region. (Figure: Entire country = 100). The most noticeable changes in the Tampere Region profile occurred in RDI funding and digital services turnover. The decline in the value added at factor cost of industry also stands out in the profile. Compared to the previous analysis, the Tampere Region was more active in terms of patent applications.

Minor changes in the profile compared to the analysis conducted last year showed that the Tampere Region has a fairly stable, clearly-defined and unique profile, but the analysis suggests potential change in certain areas. Changes in the RDI indicators confirm observations of changes to the Tampere Region's RDI profile made in the situational picture.

In terms of traditional innovation indicators, i.e. R&D expenses, patent applications and Tekes R&D funding, the Tampere Region is clearly above the national average as well as above regions of natural resources and regions of high knowledge and technology, but the difference between it and the capital region has grown. The competence base level has remained high. The low rate of success during the most recent growth period in the Tampere Region can also be seen in a comparison of regional profiles: the region has fallen slightly in the regions of high knowledge and technology and is now around the national average, but the level is still higher than the regions of natural resources.

Compared to the previous review, the Tampere Region has dropped closer to the national average in terms of factor cost in industry and value added. Furthermore, although the Tampere Region has fallen further behind the capital region with respect to digital services turnover, the difference between the Regions of high knowledge and technology and the Regions of natural resources is still considerable. The Tampere Region's trade balance is still clearly in surplus and above the national average.

Three Economic Profiles of the Regions in Finland: Capital region, Regions of high knowledge and technology and Regions of natural resources. Tampere Region is part of the Regions of high knowledge and technology and also presented independently. The index of the entire country equals 100.

Regions of high knowledge and technology: Southwest Finland, Satakunta, Tavastia Proper, Tampere Region, Päijänne Tavastia, Ostrobothnia and Northern Ostrobothnia. Regions of natural resources: Kymenlaakso, South Karelia, South Savo, North Savo, North Karelia, Central Finland, South Ostrobothnia, Central Ostrobothnia, Kainuu and Lapland. (Index review: Entire country = 100).

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