Smart specialisation as a development strategy in Denmark

Old Town of Aalborg

Aalborg has a small but charming Old Town, and being Danish there are plenty of bicycles.

What kind of strategies can help regions to strengthen their performance in knowledge and innovation? This was the theme of the ESPON Open Seminar that I took part in last week in Aalborg. What emerged was a strong consensus on the importance of getting stakeholders to feel a sense of ownership of a flexible regional strategy, which in turn was part and parcel of building trust. This region of North Denmark shows how strategic spatial planning has been used to create jobs and growth.

Regions

The Danes reformed their system of regional planning in 2007. Previously this country of 5.4 million citizens had 14 “County” authorities. These were reduced to 5 regions. North Denmark has a population of approaching 600,000, which is less than any of the other four regions. It is mainly rural and relatively remote from the capital, Copenhagen. It has the lowest income levels of the regions, and is losing population. Regional unemployment is above the national average. Thus delivering development is no easy task.
The 2007 changes were not just about boundaries. They also changed the way that planning is done. The regulatory aspects of land use planning were more fully decentralised to the lower level of local government. The efforts of the Regions were to be directed at strategic planning for regional development.

Changing the culture: building trust

In their presentation to the Seminar, Carsten Jahn-Hansen from Aalborg University and Morten Lemvigh, Head of the Region’s Department for Industry, Competence and Technology, argued that this amounted to a fundamental shift away from a welfare distribution model of planning to planning as the basis for a competitive growth strategy. “The culture in the old Counties was rule-based. The planning culture had to change to earn trust and build legitimacy for a new co-ordinating role” said Prof. Jahn-Hansen.

Trust was lacking under the regulatory system. If planning is really to co-ordinate a range of investment decisions, then evidently those investors need to have confidence in the plans and the planners. Incentive systems and co-financing can help. Planning becomes more networked and culturally-based.

Smart specialisation

Mr. Lemvigh stressed that regions need to look for the sectors in which they and their enterprises have a comparative advantage. Funds need to be concentrated rather than spread. One area of perceived strength is in higher education. The University of Aalborg has around 12,000 students and is a key partner for the Regional Council. There is also a strong emphasis placed on innovation in the business community, where the food sector remains strong.

Aalborg

The town of Aalborg, while small by international standards, is the key motor of regional growth. Thus again the partnership between the councils for the town and the region is vital. In recent years it has invested heavily in a number of key assets. For a city of its size (the urban area is around 125,000) Aalborg is surprisingly well connected by air. Its airport provides connections via main carriers to the European hubs, is easy to reach and a focus for continuing investment. While it does not suffer the congestion that is so crippling in the big airports, the “Drop and Kiss” zone includes the admonition “No kisses more than 3 minutes!”

Culture-led regeneration

The city council has also invested in significant culture-based developments by the waterfront. Our seminar was in Nordkraft, a former power station from the 1940s and 50s that has been converted into a multi-purpose culture and leisure centre. The workshop in one of the Nordkraft cinemas was the most comfortable I have ever attended, with powerpoints displayed on the big screen. Nearby is the House of Music, a concert hall.

We also had a meeting in the Utzon Centre. This was the last building conceived by Jorn Utzon, the Danish architect who designed the Sydney Opera House, and who died in 2008. It is a meeting place with an emphasis on architecture and design, and there was an exhibition on building construction there this week. Outside, tall ships were mooring for the annual regatta. These and a number of other projects are aligned along a loosely defined growth axis that runs through the town.

Vision, networks, knowledge and flexibility

There was a substantial degree of consensus in the ESPON Seminar about the value of the approach exemplified in North Denmark. A range of speakers from different parts of Europe, including the UK, echoed the value of having a vision; creating attractive places; integration through trust, cross-professional and cross-scale working; and creating flexible development strategies for which key stakeholders feel a sense of ownership. Mr. Lemvigh captured it as “Create consensus around strategic planning: take chances on your special strengths but leave other things out”.

While it is not always followed, such views represent mainstream thinking about planning and economic development across much of the western world for the past 20 years. In essence we are talking about endogenous growth theory. The next round of Cohesion Funds (2014-2020) remains rooted in this thinking. Resources will be concentrated on “thematic objectives” linked to Europe 2020. There will be a new provision for “community-led development”, to support local, place-based, sub-regional and multi-sectoral development that is stakeholder-led.

My concern is that this is the agenda of the era of growth and confidence that came to an end in 2007-08. When the economy is growing and investors are confident it is easier to entice them into partnerships. It was sobering to be reminded that in Latvia, GDP fell by 25% between 2006 and 2010, and that out-migration is around 1% a year. Support for the market economy fell from 39% in 2009 to 22% last year, though GDP is now on the rise again. Even in such conditions there will be some places and companies that can forge a way forward, but there are many other places where the litany of “vision, networks, knowledge and flexibility” is not going to deliver for the foreseeable future. Cohesion Policy needs to recognise this reality.