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Policy workshop in Upper Austria: Policies to foster the transformative power of service innovation – towards a common roadmap for Upper Austria

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The regional work done in ESIC has reached the peer review phase. The aim of the ESIC activities carried out in all model demonstrator regions has been to assist regional policy-makers to test, update and improve their existing policies as well as to boost emerging industries by transformative service innovation. Via the expert analysis and regional self-assessment the summary assessment reports have been finalised by the ESIC consortium. The peer review phase, in turn, encourages policy learning and provides external input into the policy development of the region and leads eventually towards regional policy recommendations.

On the 25-26 February 2014 more than 15 regional stakeholders gathered for a 1.5-day lively workshop hosted by TMG Upper Austria to discuss how a common transformation through service innovation strategy or roadmap could be given shape. Participants included representatives from Industry, Academia and policy-making and policy agencies (such as the Austrian Federal Development and Financing Bank (AWS), the Austrian Research Promotion Agency (FFG),  (Technologie- und Marketinggesellschaft m.b.H (TMG). Invited experts and peers from other regions, apart from the ESIC team, included Jochen Barth (Service Science Factory, NL), Irene Ek (Growth Analysis, Sweden) and Mette Abrahamsen (Service Cluster Denmark, Denmark). The main objective of the workshop was to identify how Upper Austria, as a heavily industrialised region, can benefit more from transformation through service innovation and to sketch the contours of the requested strategy. The programme contained three sections to arrive at input for such a joint strategy. 

Upper Austria consistently ranks as Austria’s most competitive region. Manufacturing is dominant in this region, and particularly the automotive, mechanical engineering, metal processing, chemicals, plastics, paper, wood and automation sectors. The region has invested for some years already in a process for bringing together various stakeholders including firms, academia and government institutes, to explore how services and service innovation can help to increase its industry’s strengths. This process of ‘large-scale experimentation’ is now gaining momentum, there is a clear request in the new regional economic and research programme (Innovative Upper Austria 2020) launched 22 January 2014 to develop a service strategy or roadmap that could spur transformation in the manufacturing strongholds in Upper Austria. The activities of ESIC are aimed at supporting this transformation process in Upper Austria.

Dr. Michael Strugl, Minister of Economy State of Upper Austria, stated that “It is imperative for the transformation of the Upper Austrian manufacturing industries to develop more service-inclusive business models. The development of a service strategy as announced in new regional economic and research programme “Innovative Upper Austria” is exactly focused on facilitating this transformation. The whole ESIC exercise is very helpful in formulating this agenda, fuelling it with good ideas and suggestions and having people from industry, academia and policy working on this challenge together.”

First best practices and challenges facing Upper Austria regarding transformation through service innovation where discussed in the peer review. It was evident that academia, industry and policymakers in Upper Austria see the need for a change and share the view that smart combinations of manufacturing and innovative services are key to the future fortune of the region and also see the need for a change. There is clearly an understanding that the key challenge is switching to a service inclusive business models (and having customers pay for services some of which they have received for free so far). The quite advanced thinking regarding transformation through service innovation is also reflected in policy actions, initiatives from industry and academia that are already running, but not necessarily in a coordinated way. However, it was also observed, as illustrated in the ESIC report, that the current rich policy mix is in need for a refocus and more coordination.

Secondly, best practices from other regions including Finland, Denmark, Sweden and the Netherlands were presented and discussed including examples of manufacturing firms that have gone through transformation processes that local firms such as Rosenbauer (the manufacturer of firefighting equipment that presented its case as well) are experiencing right now. What was evident that these are lengthy processes. In terms of policy-making it was clear that it also makes sense to carefully refocus and reword existing policies and look for fruitful cooperation between the regional and national level.


A list of practical suggestions made by both experts and local stakeholders during the first day proved useful for kicking off the second day of the workshop where the contours of a type of practical actions needed for giving shape to a transformation through services strategy for Upper Austria were discussed. Starting point were six suggestions made in the ESIC report that were clearly recognised. To these were added the need for funding and awareness raising. A methodology for translating the resulting 8 categories of suggestion into practical actions was agreed upon and will form the basis for the ESIC policy report. There is no consensus yet on what actions are most needed and how to activate and coordinate local actors and initiatives best, although there seemed to be much support for the flagship proposal in the form of service factory for industrial renewal in combination with a refocus of the current policy mix. The Tobacco Factory in Linz is possible a good place to start such a flagship initiative where also the workshop ended with an inspiring guided visit to the Tobacco Factory. The discussion will continue with policy briefs.

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