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Innovation Environment >Smart Updated at: 10.05.2018

The innovation story of Tampere

Uniqueness of Tampere innovation tradition

Usually by ‘traditional’ we refer to something conservative, to something that does not change much. Exceptionally, in Tampere, tradition is particularly related to change; the city and its industries are proof of a continuous tradition of innovation throughout its history of more than two hundred years.

There must be something very special in a northern city of only 200,000 inhabitants, located far from large markets, if it is chosen for research and product development by companies such as Intel, Microsoft, and Nokia. However, Tampere is not only a place for information and telecommunication technologies; it also houses large research and development laboratories for companies representing, for example, more traditional industries such as mechanical engineering (Cargotec, John Deere and Sandvik). Or take an example from the life sciences, and you will find innovations so radical that you may think it must be science fiction: from a patient’s fat cells, a new jaw bone was grown in his stomach using stem cell technology! And it is not only about large companies, and the march of new fast-growth firms has begun in Tampere.

Besides the creation of innovative products and processes, Tampere is renowned for its active role in developing innovation environments, and recently as a forerunner of open innovation platforms. The city has indeed become a natural innovation laboratory for citizens in their everyday milieu. For these reasons, there was no controversy in Finland over Tampere’s role as a leading coordinator of the national Innovative Cities Program, set up by the Finnish Ministry of Employment and the Economy, for the first Program period of 2014–2020. Tampere has been one of Finland’s leading cities in different innovation evaluations and measurements. But more than plain indicators, a unique esprit de corps of innovation activities within the city is nationally well known. Let us take a closer look at this innovation tradition.

A history of continuous change and innovation

First impulses for the development came from the outside. First, Swedish king Gustav III visited the banks of Tammerkoski rapids and established the town in 1779. In 1819, Tsar Alexander I of Russia visited the still modest town and was so impressed by the potential created by the rapids that he set up systems of considerable customs and tax relief for entrepreneurs and industrialists that would locate to the town. This marked a phase of rapid development. The first important industrialist to come to Tampere was the Scottish engineer James Finlayson, who founded a cotton mill in the 1820s. In the hands of the Nottbeck Family, who came from Russia, this cotton mill came to represent one of the cornerstones of the Finnish industrialization process.

One of the young Nottbecks brought an electric light to the town immediately following its invention. He was working as an engineer in New York for Thomas Alva Edison’s laboratory and was impressed by the potential of electricity, especially in terms of its impact on factory safety. This young man was able to convince his father, who was then the director of the Finlayson factory, of the same, and so the Edison generator No 3. was shipped from New York to Tampere. The generator and the first 150 incandescent light bulbs were installed in the weaving hall in March 1882, and the first electric lights were lit in the Northern Europe. Today, the city of Tampere’s slogan reflects this legacy – “Tampere all bright”.

The first paper machine in Finland began to operate in 1842, in the paper mill of J.C. Frenckell & Son, in Tampere. In general, Tampere was industrialized before other cities in the country. In 1870, about 40 per cent of all industrial labourers were to be found in Tampere, although the city housed less than 10 per cent of all the inhabitants of the country. By that time, the industrial base of the town had already become considerably extended and diversified: wood and textiles processing had been followed by shoe and clothing industries and, somewhat later, by chemical, metal and machinery industries. For many of the companies within the town it was typical to invest in product and process development marking the beginning of the innovation tradition. Of those many companies founded in Tampere, one happened (in 1865) to be Nokia

Even though there was no higher education institution in the city before the 1960s, the significance of education and training was already well understood in the 19th century. Accordingly it was more than 150 years ago that Tampere College of Services, Tampere Worker’s Institute, Varala Sports Institute and Tampere Technical College were established, again as the first in Finland. Education and diversified skills were much appreciated, to illustrate which a short anecdote can be provided: the Soviet leaders Bulganin and Khrushchev made a visit to Tampere in 1957 (Stalin and Lenin had already visited in 1905 to discuss their vision of a certain social innovation…). They also toured the Lokomo factories, one of the largest sites with a diversified product range. Soviet leaders suggested to the director that the factories could focus on only one kind of product. The proud reply was that “our workers are so skilled that they can build any kind of products”. What was perhaps lost in economies of scale was gained in the tradition of empowerment and a “can-do” attitude still typical today.

However, the heyday of manufacturing was to reach its summit in the 1960s, with a total of 37,000 employees. After 1962, employment in manufacturing went into a slow decline due to internationalization, automation, rationalization, outsourcing and other factors.

Transformation to knowledge economy

In the 1970s, the manifold processes and impacts of globalization and knowledge economy began to have an effect. Importantly, the key stakeholders in Tampere saw this as an opportunity and took many proactive measures. It was commonly agreed in the city that the university was an institution of the future and therefore a strategic priority. During the 1960s, the growth coalition managed to lure two universities to relocate from Helsinki to Tampere. First was the University of Tampere, with its forte being research and education in society and health; soon after this UTA established the first chair in computer sciences in the Nordic countries. UTA was quickly followed by a small unit that would become the Tampere University of Technology, soon to be recognized as the “university of industry”. These two were later supplemented by Tampere University of Applied Science, which provides the local labour markets with practically oriented professionals.

During the following decades, industry learned to collaborate with all of them in an intensive and versatile way. Regarding their high share of external funding for R&D (more than 60 per cent), both the two scientific universities belong to the national top four. This is achieved through intense bidding competition and unarguably reflects their strong participation in the generation of new knowledge that benefits society. The universities have greatly helped to create a “local buzz” as well as the much-needed “global pipelines” that have fed the local innovation environment with a continuous stream of fresh ideas and knowledge.

At the beginning of the 1990s, Finland plunged into a deep recession, and this certainly hit Tampere hard, too. For some years, one-fifth of the workforce was unemployed. “What does not kill you, it will strengthen”, the Finns say; and indeed, the steps taken from the mid-1990s were large and influential. In retrospect, it seems that the recession sped up the development of the knowledge economy.

In the current decade, every fifth inhabitant of Tampere is a student in a higher education institution and every third inhabitant over 15 years of age has a degree from a higher education institution. Out of almost 10,000 R&D workers, more than half are employed by the private sector.

For many years, R&D expenditure has amounted to more than 900 million euros annually. This represents approximately 15 per cent of the national total. Per inhabitant this is more than 2,000 euros, as it has been since 2006, and thus Tampere represents the national top level in R&D intensity. Of gross regional product, R&D accounts for about seven per cent. Parallel figures are seldom seen among European cities.

For the past two decades, 150–300 patent applications have been filed annually in Tampere. It is particularly important that these applications are distributed evenly into different patent categories, indicating that there exist highly diversified knowledge bases within the city, enabling combinations of competences and manifold interfaces fruitful for innovation, as witnessed in the development of this time.

There are therefore strong arguments that Tampere is a city of knowledge economy and of innovations, in the full meaning of the terms. But in concrete terms, what are those major innovations in the city over the course of time? The following chronological list provides some evidence as examples:

1837, the first modern factory building in Finland (Finlayson)
1843, the first paper machine in Finland (Frenckell)
1882, the first electric light in the Nordic countries (Finlayson)
1900, the first locomotive manufactured in Finland (Tampella)
1909, the first automobile manufactured in Finland
1923, the first radio broadcasting in Finland
1965, the first ice hockey hall in Finland
1974, the first NMT mobile call in the world (Nokia)
1978, the first ATM machine in Finland
1984, the first biodegradable implant in the world (Bionx Implants)
1991, the first GSM mobile call in the world (Nokia)
1993, the first analogue cellular data card in the world (Nokia)
1994, the first GSM data card in the world (Nokia)
1995, the first walking forest harvester in the world (Plustech/Timberjack)
1995, the first Internet call in the world (Nokia)
1996, the first personal digital assistant in the world (Nokia)
1998, the first digital x-ray image in the world (Imix)
1999, the first WAP server in the world (Nokia)
2001, the first mobile camera phone in the world (Nokia)
2001, the first automated mine loading in the world (Tamrock)
2003, the first walk-through display in the world (Fogscreen)
2004, the first automated container terminal in the world (Kalmar)
2005, the first rapid test for coeliac disease in the world (University of Tampere/Biohit)
2008, the first preservative-free prostaglandine eye-drop for glaucoma treatment in the world (Santen)
2008, the world’s first operation in which a jaw bone was grown from the patient’s fat cells using stem cell technology (Regea)
2009, the first antibiotic-releasing biodegradable implant in the world (Bioretec)
2012, the first 41-megapixel camera phone in the world (Nokia)
2013, the first hybrid straddle carriers in the world (Cargotec Kalmar)
2012, Nokia 808 PureView (41-megapixel camera phone)
2013, Nokia Lumia 1020 PureView
2015, Nokia OZO virtual reality camera for professional content creators

As can be seen, Nokia’s impact has been considerable during the past decades, as Tampere has been a major global research and product development hub for the group since 1986. Nevertheless, the two other key clusters have shown remarkable innovativeness. There are, indeed, three key fields of competences and three industrial agglomerations based on these strengths locally: a wide-ranging ICT cluster, a versatile life sciences cluster and an intelligent machinery cluster that represents the successful transformation of the traditional mechanical engineering industry. Let us take a glance at these three.

ICT cluster: In a city with 200,000 inhabitants, the mobile industry alone employs more than 6,000 engineers. A key long-term strength of the cluster is its wide-ranging spectrum of industries, application domains and product competences. The cluster covers three key areas: mobile handsets and embedded devices; telecommunications networks; and Internet and cloud services.

Tampere has not been immune to the changes in Nokia Group and in Nokia-driven mobile cluster in Finland. However, the situation has not been as gloomy for Tampere as for some other Nokia sites. This is because Tampere has been a key R&D site for the most sophisticated mobile handsets as well as for long-range strategic research, with a lot of embedded local knowledge. The former activities, however, became a part of Microsoft, and consequently the group emerged in 2014 as a new important player within the city. Nokia also remains important in its historical place of birth, retaining hundreds of R&D specialists in telecommunications, digital mapping and location applications and services and long-term research and IPR portfolio management. In the current structural change of Tampere, the ICT talent pool and knowledge base evolved around Nokia is utilized in the development of a “city-as-a-platform” -based urban innovation ecosystem, and in related open data, open government and participation driven new digital services and smart city solutions.

In addition to Microsoft, in recent years numerous other international companies have come to Tampere, including Accenture, CGI, HCL, Tata Consulting Services and Intel. Besides these large ICT multinationals, there is a fast-growing cohort of startups and knowledge-intensive firms.

Life sciences cluster: The city has a combination of multidisciplinary, technological, biomedical and medical expertise in education, research, healthcare and business sectors. In recent years, the health, wellness and biotechnology sector in the city has been the fastest growing in Finland and received the largest number of private investments in business development. Tampere is, indeed, globally at the forefront of research and product development for biomaterials and tissue technology, and the research carried out has given birth to several companies based in the city that operate in the global market.

Intelligent Machines represents the traditionally strong technology cluster in Tampere and its immediate vicinity, with more than 1,000 companies that account for added turnover of more than 7,000 million euros and employ more than 34,000 people. R&D investments account for more than 750 million euros annually, which demonstrates the seriousness with which the leading knowledge-intensive companies take sustaining their innovativeness.

There are ten world market leaders operating in Tampere that form the backbone of the cluster. These include AGCO Power (global leader in diesel engine technology); Bronto Skylift (global market leader in truck-mounted hydraulic platforms); Fastems (globally leading supplier of automation to the mechanical engineering industry), John Deere (global market leader in design, manufacture and distribution of forest machines); Cargotec (global market leader in cargo and load handling solutions); Metso Automation (market leader in process automation solutions for the pulp and paper industry); and Sandvik (globally offers the widest range of equipment for rock drilling, rock excavation, processing, demolition and bulk-materials handling).

Importantly, many of these have very recently invested in the city, indicating that, despite their global expansion and offshoring activities, those companies are convinced by Tampere’s importance, especially as an innovation environment. Let us take the example of the world’s largest production automation and testing site for container terminals located in Rusko, Tampere: Cargotec Group invested approximately 35 million euros in its brand new technology centre in 2012. But isn’t it strange that a company producing machinery for ports has decided to build such a large unit in Tampere, an inland city with no coastline?

“For us, Tampere is an important center of technology development, acting as the spearhead in the intelligent machinery and energy sufficiency technologies.” Mikael Mäkinen, CEO of Cargotec.

What has independent research to say about the innovation tradition in Tampere? An extensive study on the geography of innovation in Finland by VTT (the Technical Research Centre of Finland; Valovirta et al. 2009) concludes:

Tampere city-region has maintained its strong position as one of the most innovative locations in Finland also in the light of the results of this study. Of all the identified innovations, altogether 367 innovations originated from companies that had… development activities in Tampere. Metal and mechanical engineering industries have remained robust and have developed a considerable amount of new products over the decades. In [the] 1960s and 1970s the key product developers [in] these industries were Tampella, Valmet, Lokomo and Rauma-Repola. These traditional industrial groups have gone through many kinds of changes in their ownership during the last three decades. In 1980s, the key innovator was Kvaerner Pulping, in 1990s there were Timberjack and in 2000s Metso Power, among others.

Another strong cluster is the electronics industry which has its roots in innovations by Valmet Automation (nowadays Metso Automation). Nokia’s active product development of mobile phones began in the 1990s in Tampere. (…) In addition, there has been active product development conducted especially in [the] rubber and plastics industries (Finlayson and Nokian Tires) as well as in [the] paper industry (especially Raflatac’s adhesive papers and labels).

The most important perceptible transformation of the recent decades has been the considerable increase of innovation activities within the telecommunications, research and development, and business services industries from 1980s onwards. Most of the innovations have emerged from small knowledge-intensive firms…” (p. 44)

Hence the legacy of innovativeness by the more traditional industries and large companies, crucial for the future, has been passed to and sustained in smaller firms and in new industries. As is known, the immediate environment is very important for small, growing firms, especially in the first phases of their life cycle. This has been well understood for a long time in Tampere, traditionally dominated by large-scale industries.

Building the innovation environment

Besides innovations themselves, the local environment is a subject of continuous, long-term development in order to maintain its conduciveness to innovativeness and effective commercialization of outcomes. The past decades have seen the construction of basic innovation infrastructure, such as universities and their mechanisms for technology transfer, science parks, programs of centres of expertise and clustering, and so forth.

Collaboration between the universities and the business sector has for a long time been both intensive and a natural part of daily activities (Smart Europe Assessment, Tampere Project 2013): “There is a unique co-creative and collaborative atmosphere between universities and businesses”. Without delving into the lengthy list of actors, it is worthwhile to characterize some of the key actors that form the backbone of the local innovation environment.

University of Tampere, focuses on society and health. Its leading fields of research include e.g. information, information technology and knowledge; cities, the environment and the regions; journalism and media; changes of society; the individual and the health of the population. Centers of Excellence in Research status has been conferred by the Academy of Finland on Research on Mitochondrial Disease and Ageing and The Finnish Centre of Excellence in Historical Research. It is the top university nationally in terms of external funding from foreign private companies. The university is very popular among potential students but the most difficult to get into; only one in ten applicants is approved annually.

Tampere University of Technology, has a reputation as an industrial university due to its long-lasting close collaboration with industrial companies. Leading fields of research are especially signal processing, optics and photonics, intelligent machines, biomodelling and the built environment. The Academy of Finland has appointed the Signal Processing Algorithm Research Group (SPAG) and Generic Intelligent Machines (GIM), together with Helsinki University of Technology, as Centers of Excellence in Research.

In addition, Tampere University of Applied Sciences supplements this knowledge infrastructure with its versatile supply of graduates in, for example, Computer science, Media and Graphics, Digital gaming, and many other fields. The large R&D facilities of the Technical Research Centre of Finland VTT (more than 300 experts) provide the companies with an R&D partner especially in those three areas of competence that are at the core of strong local clusters.

Tampere has been the forerunner of large, locally initiated public–private partnership-based innovation programs. These have generated cumulative competences and the confidence to conduct large-scale innovation policy operations with high impacts (see e.g. the final evaluation of the National Centre of Expertise Program).

There has been an intense learning process and evolutionary path related to the local innovation policy. The latter part of the 1990s saw the emergence of a cluster-based innovation policy that bore fruit first as an enabler of rapid growth in the ICT cluster and then, on both sides of the millennium, as large innovation programs (eTampere, BioNext, Creative Tampere) and their impacts on local entrepreneurialism and many innovative outcomes. Nevertheless, the programs back then were characterized to some extent by a supply-driven logic.

Somewhere between 2005 and 2008 it was realized, both in Tampere and nationally, that a more demand-driven approach should be taken. This is to, for example, exploit the potential hidden in a large public sector (innovative procurement), in a highly educated population (democratization of innovation) and in more active IPR management (open innovation) of companies and higher education institutions, for example.

Cluster- to platform-based innovation policy

Development led to local experimentation with open innovation environments and platforms during the years 2008–2010. Highly renowned and award-winning initiatives – Demola, Protomo and the whole New Factory concept – were generated. A new innovation program, Open Tampere, was launched as a large-scale program from 2012 onwards, scheduled to last until 2018. This program aims at fostering new growth of firms and international businesses and at promoting a continuous innovation-based transformation of the traditional industries. It also involves stakeholders such as students, other citizens and heterogeneous local communities in participation in many ways.

It is highly probable that New Factory, with its Demola and other service concepts will be the most important future generating instrument which has already in a very short period of time showed its true colours. Or what about these figures? Since 2012, New Factory has facilitated more than 600 projects with 300 partner companies and other partner organisations, generating 110 start-ups and more than 650 new knowledge-intensive jobs, and attracting 18 million euros of funding for start-ups and innovators.

Demola is an environment in which to generate prototypes and demonstrations from ideas coming typically from private firms. These ideas will be developed in projects by multidisciplinary student teams which own the intellectual property rights; no wonder it is highly popular among them. Demola has developed into a Europe-wide ecosystem for collaborative innovation, and it is now located in 12 cities in 9 countries, and has 40 university partners.

New Factory has over 1100 square meter of co-creation space in the heart of Tampere. The building – the “old factory” or “six-storey” as it is sometimes called – is located in the historic Finlayson area. The name comes from a Scottish industrialist James Finlayson who selected the place for setting up a mill in the early 19th century. The industrial development of Tampere began from there and the area continues to be a prime location for business and renewal of the region.

These open innovation platforms are environments for product and service development and for new market creation. Their processes, from idea generation to real business, are guided by clear, explicit procedures that have made operations easy and have left space for creativity. However, a fundamental idea behind the obvious success of New Factory is that it relies on a community spirit and is fuelled by participant individuals’ real, genuine motivation.

And yet, there is more. Mediapolis open innovation environment was opened in 2014. The national broadcasting company Yle (TV2), Tampere University of Applied Sciences, City of Tampere and Technopolis Ltd. are the backbone of this mesh of creative and ICT-based industries. Experiences from the New Factory will be widely applied to lead the different stakeholders with their ideas and competences on an intended collision course to generate innovations.

Within the life sciences cluster, the most important single activity must be BioMediTech at the Institute of Biosciences and Medical Technology, where over 250 scientists conduct research and education in the fields of cell and molecular biology, genetics, biomaterials, biosensors, computational systems, biotechnology, biomedical engineering and regenerative medicine. What makes it especially interesting is that it is at the same time a joint biotechnology research centre of University of Tampere and Tampere University of Technology and an innovation platform combining biomedicine and medical technology.

All these developments can be further boosted by exploiting the potential of innovative public procurement and creation of local lead markets. For these purposes, the national Innovative Cities Program (INKA) provides Tampere a significant advantage, as the city is in the leading role nationally to coordinate the Intelligent Cities and Renewing Industrial Production sub-programs. The program began in 2014 but the city has gained a lot of experience already before that through, for example, adopting practices such as crowdsourcing in suburban development and public transportation.

Oma Tesoma (my own Tesoma), launched in 2013, is the first case in Tampere’s innovation strategy in which innovation platform activity is integrated into urban development policies and projects. In Oma Tesoma, a city district of Tesoma is developed as an innovation platform to attract companies, residents and local communities to generate and create service innovations, business opportunities and attractive living environments and economically viable and sustainable urban areas together. Tesoma, built in 1960s and 1970s, is a diverse city district with some 20 000 inhabitants.

The results and experiences of Oma Tesoma will be utilized and scaled up in other major urban development projects and investments in Tampere - required by the city’s rapid growth (225 274 inhabitants in October 2015 vs. an estimated population of 275 000+ in 2040).

Everyday life in Tampere

“Tampere Region. It’s All Bright! So what makes Tampere so special? Sun-bathed lakes and lush ridges, local bakers’ butter-eyed buns, fresh urban nature, animated and at the same time peaceful environment, welcoming like a small village with a cosmopolitan atmosphere.”
(Smart Europe Project: Tampere Assessment Report 2013, p. 3)

In spite of its innovativeness, Tampere is far from a hard-boiled business city; its image among Finns is actually very convivial. Tampere is the number one centre for theatre, with tens of professional theatres which gather their audiences from all over the country. The city has been labelled home to so-called Suomi-rock (“Finnish rock”) since the 1970s. The national TV channel (TV2) is most of all renowned for its programs targeted at children and teenagers. The local amusement park has the second largest number of annual visitors in the country. It must be as a result of these and other factors that, all through the 2000s, Tampere has time and again been positioned in the first spot in polls asking about the most preferable city to migrate to. The city is characterized by a combination of an inspiring climate of innovation, high educational status and the Nordic style of welfare.

And the future will be…?

If we first look back at the 1990s, there was a recognized problem of low entrepreneurialism regarding knowledge-intensive businesses and especially their lack of growth orientation. Promising firms either remained rather small and lacked global market ambition or were sold to foreign owners, and the real growth took place somewhere else. However, this did not matter that much during the period of dominance of large companies. Now, when it matters, the future looks bright even to the eyes of sceptical observers: in 2015, there are approximately 200 firms that fulfill the criteria of a growth firm. This, more than any other fact, tells that what used to be a major weakness of the local innovation environment has become a future asset and a guarantee of industrial renewal.

Tampere’s innovation tradition is very much alive and kicking.