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Bioeconomy in the Nordic Regions

By Jukka Teräs

Bioeconomy has gained growing attention and importance on the Nordic research and industrial agenda. An increasing number of Nordic actors have attempted to develop the principal products of the bioeconomy: bio-based products and bioenergy. What then is the current state of the art of the Nordic bioeconomy - especially from the viewpoint of regional development? Are there good regional practices to learn from and transfer within the Nordic region?

Nordic in-depth study of the regional bioeconomy

Nordregio has conducted an in-depth regional study of the Nordic bioeconomy in 2014. The study presents an overview of instruments and explores 'good practice' case studies of innovation and entrepreneurship in the field of bioeconomy. The study included five Nordic cases: the Forssa region of Finland, South Iceland, the Østfold region of Norway, the Örnsköldsvik region of Sweden, and the Lolland region of Denmark. The cases were selected to provide rich data on good practices in the field of bioeconomy in Nordic regions. The selected cases include regions with biorefinery initiatives in various stages, regions with a variety of approaches to regional clustering, and regions where key companies play different roles in the bioeconomy field.

Case study regions

Figure1: Nordic case-study regions of the Nordregio regional bioeconomy study in 2014. Click to view larger image.

Regional bioeconomy cases - a brief overview

Forssa, a region with 37,000 inhabitants in south-west Finland 100 km from Helsinki, has launched the bioeconomy concept as part of the Forssa Brightgreen concept. The activities usually connected to the bioeconomy originated in the early stages of the industrialization of Forssa, with an emphasis on the symbiosis of agriculture and industry as early as the 1840s. MTT Agrifood Research Finland, operating under the Ministry of Agriculture and Forestry, located its main operations in Jokioinen in the Forssa region in the 1970s. Currently, the private sector bioeconomy actors in Forssa include the food industry and clean-tech/environmental technology companies such as Envor Group Oy (recycling, processing of paper, treatment of biowaste), the LHJ Group (industrial waste treatment, soil remediation, municipal waste management) and Watrec Ltd. (clean-tech solutions in biogas technology and wastewater and process water treatment). Envor Group has recently published a plan to establish a biorefinery as a flagship project of the Forssa EnviGrowPark industrial region.

According to the study, Forssa has the advantage of a long tradition and accumulated knowledge of bioeconomy-related know-how and expertise, especially in agriculture. The key public and private actors have succeeded in preparing a common vision. The Brightgreen Forssa programme is an instrument to focus on spearhead programmes and key priorities of the bioeconomy. The actors in the Forssa region emphasize long-term continuity, but short term 'victories' are also needed as well as rapid steps to develop the local bioeconomy.

The South Iceland region covers a large area of 30,966 km2 across the south and south-east coast of Iceland, has 26,000 inhabitants and is divided into 15 municipalities. Unlike in Iceland as a whole, agriculture is an important sector, with 40% of the agricultural production of Iceland coming from the region. Fisheries also play an important role in the regional economy. Tourism is expanding in the region, and food innovation there has been promoted by the state-owned Matís Ltd., Innovation Centre Iceland, and local and regional actors. The small-scale bioeconomy innovation activities include developing cod liver, dried fish products as souvenirs, raw goat sausages, and the development of hot smoked mackerel products. Moreover, the use of waste flows has been developed in connection with the fisheries.

The study shows that there is considerable potential in South Iceland to increase the added value of the biomass materials from agriculture and fisheries. Innovation is central to the development of the bioeconomy. Food innovation is particularly relevant to this rural and sparsely populated region, as it can build on local competences and knowledge of primary production and does not necessarily require high-technology competences and facilities. The innovative projects in South Iceland are mostly small-scale innovations for which local knowledge and the competences of the local people are central. Small companies require external encouragement to develop their innovative ideas further.

The Østfold region in Norway is situated in south-eastern Norway. The population of Østfold County is approximately 285,000, with Sarpsborg and Fredrikstad making up the fifth-largest urban area in Norway. Although agriculture comprises an important part of the economic activity in the region, 83% of the population lives in urban areas. Traditionally, wood processing has had a stronghold in Østfold County. Borregaard, the locomotive company of the bioeconomy in the Østfold region, is one of the world's most advanced and sustainable biorefineries. Borregaard is a relatively self-sufficient company, and has little collaboration with regional stakeholders such as the County Council. However, Borregaard contributes to the local environment through various development projects. The local forest owners who provide Borregaard with raw material for their production are also important regional actors.

The Norwegian bioeconomy case study in Østfold County illustrates an example of a strong locomotive company dominating the bioeconomy activities in the region - without significant regional cluster formation. Borregaard controls the entire value chain from extracting wood/forest residues to the end products (e.g. cellulose, lignin, fine and basic chemicals, food ingredients, ethanol). Borregaard is more a globally and nationally based company than a regionally based one.

Örnsköldsvik is located in Sweden, 550 km from Stockholm. There are approximately 55,000 inhabitants in the Municipality of Örnsköldsvik, which has a city centre as well as large forest areas and minor areas of agriculture in the countryside. The major industrial ventures include MoDo, a pulp, paper and logging enterprise that was established in 1903. A large proportion of the bioeconomic activities in the Örnsköldsvik region form a bioeconomic cluster built around the pulp mill in Domsjö, SP Processum being the cluster company.

According to the study, the Örnsköldsvik bioeconomy cluster is an essential part of the regional change story, based on accumulated knowledge and natural resources in the region. The industrial downturn of the 1990s paved the way for the biorefinery initiative. The SP Processum bioeconomy cluster organization has been able to deliver and communicate a systematic, long-term approach and vision in bioeconomic initiatives. Read more about the Örnsköldsvik case in the next article of this issue.

The Lolland region of Region Zealand, Denmark initiated green growth activities as early as the 1980s. These green growth activities have developed significantly in recent years, especially into the fields of bioeconomy and resource efficiency. Biofuel production in Lolland was established in collaboration with public–private partnerships. These biofuels include rapeseed oil, biodiesel from algae cultivation and bioethanol from agricultural production. The Green Centre was founded in 1988 in Lolland to help farmers innovate. The centre has modern laboratories that offer biological, plant technological and environmental analyses and development facilities.

The economic resurgence of Lolland has mainly been the result of local initiatives rather than interventions at a national level, although the overall national policy of a green economy has played a role. In addition to providing practical and innovative solutions for local and regional problems, the focus on the 'green economy' also represents additional export potential for Region Zealand.

Lessons learned from the Nordic cases

First, the adoption of the bioeconomy concept varies significantly - not only among but also within the Nordic regions. Some Nordic regions have largely adopted the term 'bioeconomy', whereas some other regions are only just becoming familiar with the term.

Second, the intensity of regional co-operation between actors varies significantly among the Nordic case-study regions. For example, regions may have developed an active regional cluster collaboration with intensive public–private co-operation and a cluster management organization, as the Örnsköldsvik case illustrates. Regions may have an actor structure with a locomotive company but without intensive regional co-operation, as Østfold does. Other regions may have a fragmented actor structure with numerous smaller bioeconomy organizations, such as in the South Iceland case. There is no typical Nordic bioeconomy regional structure or organizational model that can be identified; every region has its own specific characteristics.

The Nordic cases also illustrate the importance of the long-term commitment of key operational and financial actors in developing a regional bioeconomy. An example is the 10-year VINNVÄXT programme by VINNOVA in Örnsköldsvik, which makes it easier for several other actors to commit to regional bioeconomic initiatives. Moreover, public–private partnerships such as those in the Forssa case are frequently mentioned by the respondents of the study as favourable for developing the bioeconomy of the Nordic regions.

The study reveals a variety of national approaches to bioeconomic activities. Some Nordic countries have recently launched national bioeconomy strategies (Finland 2014) or important documents intended to have an impact on the national bioeconomy policy (Bioeconomy Panel, Denmark 2014). However, there is a common desire in the Nordic countries and regions to focus on true implementation and definite actions on the bioeconomy, including scaling up of demonstrator plants to larger-scale facilities and opening up new export markets to bioeconomic products and services. This study shows that there is a genuine interest among the bioeconomy actors in learning from other Nordic actors, and also in building co-operative Nordic relationships. The increased international visibility of the Nordic bioeconomy actors would also be welcomed. For larger-scale R&D efforts and bioeconomic investments, intensified Nordic co-operation may offer new opportunities for initiatives such as scaling up of the regionally/nationally developed pilot plants.

The general impression of the Nordic bioeconomy is that it can be a motor for creating jobs and economic activities, especially in rural regions, while also being beneficial for the environment. Although all cases show examples of successful entrepreneurship, cluster development, creation of clustering or intermediary firms and even what can be defined as successful regional innovation systems around the bioeconomy, it is difficult to assess the actual impact of regional development (in terms of jobs or economic activity). Certainly, many jobs have been created and this is obviously one extremely important factor of (rural) regional development. It was not the explicit purpose of the project to identify these jobs, but the results of the case studies make it obvious that they are important from a local perspective.

What can be ascertained is that the Nordic cases illustrate the possibilities of the bioeconomy in terms of providing jobs and regional growth, not only in an urban context but also in a rural environment. However, the large-scale impacts of bioeconomic development still hinge on the scaling up, market development and systemic changes that would need to occur in society. From a long-term perspective, the 'glocal' nature of the bioeconomy - global and local at the same time - also opens up new business opportunities for Nordic entrepreneurs.

Back to Nordregio News Issue 4, 2014