Summary Findings and Policy Recommendations

Summary Findings and Policy Recommendations Summary Findings and Policy Recommendations Summary Findings and Policy Recommendations Disclaimer The project consortium gratefully acknowledges funding by the European Commission, DG Information Society & Media. All views expressed in this document, however, are those of the author and do not necessarily reflect the views of the European Commission. Authors: Gareth Hughes, IRISI Europe Ltd. Jorge Assis, European Regional Information Society Association (eris@) James Cornford, Centre for Urban and Regional Development Studies, Newcastle University Karsten Gareis, empirica Gesellschaft für Kommunikations- und Technologieforschung mbH Ranald Richardson, Centre for Urban and Regional Development Studies, Newcastle University Martin Sokol, Queen Mary and Westfield College, University of London For more information about the TRANSFORM project, please visit www.transform-eu.org or contact: karsten.gareis@empirica.com Contents s . Executive Summary ......................................................................................................................................... 4 Acknowledgments ............................................................................................................................................ 7 1. Introduction ...................................................................................................................................................... 9 1.1. PercePtions of the regional information society and Knowledge-Based economy ...................................... 11 1.2. indicators and BenchmarKing Processes for transformative Uses of ict .................................................... 12 1.3. Policy maKing at the regional level .................................................................................................................. 12 2. Perceptions of the Regional Information Society ................................................................ 13 2.1. the imPortance of ict investment ....................................................................................................................... 2.2. the Policy frameworK .......................................................................................................................................... 2.3. the role and contriBUtion of regions .............................................................................................................. 2.4. transformative Uses of ict ................................................................................................................................. 2.5. Understanding the transformative Uses of ict ............................................................................................... 2.6. five ‘clUes’ to transformative Uses of ict ....................................................................................................... 2.7. transformative Use of ict as a collective action ProBlem ........................................................................... 13 14 15 16 18 19 23 3. Indicators and Benchmarking Processes .................................................................................. 24 4. Policy Making At The Regional Level ............................................................................................ 27 4.1. regions in a gloBal context ................................................................................................................................ 4.2. sUggestions for eU Policy interventions .......................................................................................................... 4.3. sUggestions for regional self-helP ................................................................................................................. 4.4. overall ... the fUtUre … lisBon 2020? ............................................................................................................ 27 29 30 33 5. ANNEX ................................................................................................................................................................. 35 5.1. enaBling transformative Use of icts – the role of regional innovation cUltUre ..................................... 35 5.1.1. The Problematic: Why Some Regions Get More out of Their Technologies than Others? ................... 35 5.1.2. The Literature .............................................................................................................................................. 36 ICT “Use”: A Missing Element in Regional Studies ....................................................................................... 36 Conceptualising Transformational Use of ICT ............................................................................................... 37 Transformative Use and the Regional Scale ................................................................................................. 38 Conceptualising Regional Innovation Culture: Five Clues ............................................................................ 39 5.1.3. Approach and Methodology ....................................................................................................................... 39 Case Study Selection .................................................................................................................................... 40 Data collection ............................................................................................................................................... 41 Analysis methods .......................................................................................................................................... 41 5.1.4. Findings ....................................................................................................................................................... 41 5.1.5. Conclusion ................................................................................................................................................... 43 5.2. measUring transformative Use of icts – QUantitative evidence from the transform Piloting sUrvey ..................................................................................................................... 43 5.2.1. Approach and Methodology ........................................................................................................................ 44 5.2.2. Key results from bivariate analysis ........................................................................................................... 44 5.2.3. Key results from multivariate analysis ..................................................................................................... 48 Summary Findings and Policy Recommendations Executive Summary The TRANSFORM project set out to explain the variations that appear to exist among regions concerning the extent to which information society investments bring about positive transformations in support of regional economic and/or social development. Our analysis suggests the need for some important shifts in emphasis in policy and programmes at both European and regional/local levels which we believe will be useful in re-directing information society policy towards more effective, transformational, investments that will better support the Lisbon objectives. The target audience for our policy recommendations is those policy makers involved directly in the i2010 process and those concerned with Structural Funds policy and management at the European level, at the regional level, or with regional policy at national level. The report discusses how to understand transformational change in a regional context. As a way to summarise the main findings from the extensive academic and practitioner literature, a number of ‘clues’ are presented regarding the factors that contribute towards such change in a regional setting and at three levels: the individual, the firm/ organisation, and the regional public sector. In addition, the report discusses some concrete suggestions about the collection of appropriate evidence (indicators) should feed into regional policy-making. “Transformative” uses of ICT are understood as those that open up substantially new ways for individuals, firms and governments to achieve their goals. In many cases, this refers to activities which would not have been possible without ICTs. This is important insofar as ICTs serve as drivers for innovation, as tools for transforming education, government, health care and business models and thus as instruments for improving the quality of life of citizens and the competitiveness of enterprises. – but we conclude that it’s the soft factors that make the difference. Economies and societies that are unable to harness the transformational benefits of ICT are, we suggest, less likely to make a successful transition to the knowledgebased economy/society. The soft factors comprise networking, the development of shared narratives and visions, (regional/collective) learning, leadership and the propensity and willingness to follow, and openness to the outside world and wider influences. These five “clues” reflect the innovation culture with which a region is endowed and thus influence the likelihood that a region can successfully adopt ICT to bring about transformational change (doing things in new ways, doing new things, developing new markets). We suggest that networking cannot be treated in a casual ad hoc manner. It needs to be strategic, well planned and professionally executed. Successful networking involves the interaction of what we have called idea networks, expertise networks and resource networks. Developing visions plays an important part in building shared objectives or ‘common purpose’ and the creation of appropriate (social) ‘structures’ may help increase the willingness of key actors to cooperate and collaborate. Collective and lifelong learning – are important for underpinning a region’s capacity to develop transformative uses of ICT. If knowledge is the most fundamental resource in the contemporary knowledge-intensive economy, then learning is the most important process. Experimentation is important in achieving transformational change through ICT but this implies taking increased risks - so regions have to be willing to learn to encourage experimentation and ‘learning by doing’, becoming less risk-averse and more tolerant of failure. Adopting others’ good practice is a source of (accelerated) learning without first-mover risks – but good practice needs to be adapted appropriately. Fostering the Change to a Knowledge-Based Economy ICT adoption is considered as a major lever for improving productivity levels and increasing the competitiveness of Europe and its regions. Moreover, ICT is now widely accepted as an important driver for growth and for successful transition (by individuals, firms and regional economies) to the knowledge-based society. However, we conclude that the benefits which accrue depend less on ‘how much ICT you have’ than on ‘what you do with it’. Thus far, policy programmes and indicators have focussed on hard factors  Regional development is a particularly complex multiagency change problem which necessitates effective leadership (and a leader-follower dynamic) which, in turn, is an important dimension of a region’s social capital. In particular, public sector bodies must be willing to exercise a dynamic leadership role in the absence of alternatives. Regions that have openness in their institutional environment often perform better since they are receptive to new ideas, better able to adapt, and become leaders in innovation processes. However, it is important they should at the same time be able to maintain their regional identity. The evidence indicates strongly that ICT investment alone is insufficient to achieve transformational outcomes – it needs to be accompanied by other changes in structures, processes, practices and attitudes, as well as an enabling environment. The former include, inter alia, organisational change, willingness to experiment, development of appropriate skills, innovation and effective change management. Competing successfully in the global economy – as well as reducing exclusion and improving quality of life – are intrinsically bound up with a successful transition to the knowledge-based society and effective investments in ICT are widely understood as playing a vital role in achieving this at the regional level. Concrete evidence concerning economic returns on ICT investments is hard to find (especially at regional level). There is, therefore, an ongoing need to support appropriate research and to identify and promote successful (regional) development projects and models – as well as to build and maintain suitable indicators and benchmarking systems to support regional development policy initiatives based on ICT. will not automatically solve social inequalities and spatial imbalances in all regional settings. ‘Regional innovation cultures’ and the ‘soft infrastructure’ of a region play an important role in the effectiveness with which regions exploit ICT to achieve their aims and goals. Each region has to find its own solution to its problems, according to its own values, endowments and other competences. History, geography, culture and other factors matter and so each region needs to carry out a careful analysis of its ‘endowments’ and act accordingly. Regions need to plan their (overall) development in an integrated and strategic manner, concentrating above all on creating a favourable environment (framework conditions) in which ICTs will doubtless play an important role. Policymaking at the regional level can play a key role in improving a region’s innovative performance. Moreover, it is the poorer, less favoured regions which have the greatest potential to contribute to EU growth. Accordingly, we recommend modifying the Lisbon Strategy and re-aligning i2010 to place greater stress on transformative uses of ICT and on an explicit role for regions – so as to make a more effective contribution to the European information society and knowledge-based society. It is important that EU institutions continue to emphasise the The creation and maintenance of social capital in the knowledge-based society require widespread and effective use of ICT. However, while ICTs can be harnessed to reduce social exclusion and/or regional inequalities, they can equally aggravate the problem. In this regard, the EU’s eInclusion policy (part of the third pillar of the i2010 initiative) is of special importance and significance. However, i2010 offers only limited scope, role or opportunities for regions. We conclude that the successor of the i2010 policy initiative should adopt a multi-scalar approach – encompassing multilevel and multi-agency cooperation – involving EU, national, regional and local level actors, and corresponding levels of governance. Up to now, the regional (and local) level has been inadequately included in the process – and most regions continue to be inadequately equipped to develop and adopt appropriate indicators and benchmarking. We emphasise the need to steer away from a ‘one size fits all’ approach – to be more sensitive to the sometimes adverse effects for particular regions that arise from the ways in which ICTs are developed and used. More ICT investment and more knowledge economy development importance of organisational change, skills development, experimentation, innovation and effective (change) management in the development of the information society and the knowledge-based society. The earmarking of Structural Funds for the Lisbon Goals is welcome but there needs to be more emphasis on investing (time and money) in the soft factors. In particular, there is a need for interdisciplinary training in order to create a cadre of ICT researchers and practitioners who recognise the complexity of the processes involved in the creation, implementation and transformative use of these technologies, and can bring a set of technological and social competencies to bear in a number of spheres where ICTs are (or could be) present. Transformation (through ICT adoption) is a collective action problem in that it implies co-ordinating (enrolling, mobilising) a large number of diverse actors – to generate new ideas and to implement them through coordinated, but not centrally directed, action. The experience of earlier EU initiatives (e.g. RIS, RITTS and RISI) could be exploited in this context.  Summary Findings and Policy Recommendations Regional Indicators & Benchmarking We strongly endorse the Commission’s recognition of the need to improve the capacity of regions to reinforce a regional benchmarking culture. However, indicator availability at the regional level is presently poor. Benchmarking as a tool for policy-making, and benchlearning as a process for building social capital and developing a strategic approach, should be available to regional policymakers as well as to those at EU and Member State levels. However, with one small (and not relevant) exception, the i2010 indicators do not address the regional level at all. Thus, any policy which attempts to foster transformative use of ICTs is currently penalised by the lack of an appropriate statistical base and this absence should be rectified as soon as possible. Specific attention needs to be given to the role of “soft factors” and we recommend that the current set of (i2010) ICT related indicators should be supplemented in order to better reflect the impact dimension of ICT use (including the nature, purpose and meaning of use) – rather than simply availability, access and extent of use. Regional Policy Making Since every region is different, each must adopt a strategy and plan that is specific to itself and its own peculiar circumstances and context(s). There is no one-size-fits-all solution. At best, there is a series of issues to be addressed and a set of collective social attributes to be further developed (relating to networking, visions, learning, leadership and openness). The European Commission needs to recognise that much more effort, money (and time) will need to be channelled into New Member States and their regions to bridge the digital gap and promote the knowledge economy there. The European Commission should provide a clear message to regions and their administrations about the importance of transformational uses of ICT, the soft factors necessary for such development, and how this fits with development of the knowledge-based society and achieving the Lisbon goals. This could be achieved in a variety of ways but one possibility is to stage a high profile event such as a major conference (perhaps in 2009 – The EU Year of Creativity & Innovation) on the theme of Regional Transformative Uses of ICT. There is much that regions can do to help themselves Indicators should be designed which relate performance to a region’s own regional development goals since a benchmarking system is more likely to attract interest if it can be tailored to the specific development goals of that region. Furthermore, there is a need to move away from one-directional indicators accompanied by a shift from benchmarking systems towards the establishment of mechanisms for regional benchlearning. including adoption of an explicit and strategic approach to inter- and intra-regional networking, development of systems for collective learning, addressing leadership (and followership) issues, and creating shared visions and narratives through consensus and partnership building. Some tangible ‘structures’ (e.g. steering committees, secretariat, etc.) may be helpful in supporting such efforts. There is widespread agreement regarding the Lisbon goals There is a clear need to supplement economically the existing (i2010) benchmarking process and indicator set so as to meet the specific needs of regional policy making. It should focus on a limited number of key indicators of transformative uses of ICT which can be operationalised. In particular, policy makers need ‘leading indicators’ that underlie the notion of a regional innovation culture and the capacity for ICT-enabled, transformative change – such as network creation, continuous learning and innovation, and participation and empowerment. From a practical perspective, regions require a small number of high-value indicators which allow them to measure their progress over time and to compare themselves against other regions, thereby identifying their main strengths and weaknesses – rather than facing a choice between the expense of setting up observatories and doing nothing.  but progress towards achieving them has been hampered, in our view, by ineffective implementation. In part, we suggest this is the result of the overly technocratic and ‘less appealing’ nature (to regions) of the i2010 policy initiative. We stress the need for an update to i2010 to cover the medium to longer term (i2020?); in the process, we suggest taking stronger account of the development of appropriate social capital at regional level, as well as the conditions necessary to achieve transformational uses of ICT, and to do so in more appealing ways that will attract the interest, support and participation of the regions. The role of the regions in delivering transformation in the context of i2010 and successor initiatives is central. The integrating mechanisms, the networks and the resources do not exist at other levels. Without the regions, we believe that Europe’s hopes for transformation through ICT will not be delivered. Acknowledgments Apart from the TRANSFORM study team, the following persons have given valuable comments and input which fed into the drafting of this document. The usual disclaimers apply. Ahonen, Pasi (Lappeenranta University of Technology, Finland) Ashheim, Bjorm (University of Lund, Sweden & University of Oslo, Norway) Berdnikovs, Andrejs (Latvian Academy of Science, Institute of Economics, Latvia) Bianchi, Annaflavia (IPTS, ICT Unit, European Commission) Buleon, Pascal (University of Caen, France) Camagni, Roberto (Politecnico di Milano, Italy) Capello, Roberta (Politecnico di Milano, Italy) Cas, Johan (Austrian Academy of Sciences, Austria) Christopherson, Susan (Cornell University, Department of City and Regional Planning, USA) Coroyannakis, Sophia (Consultant, Greece) Dolnicar, Vesna (University of Ljubljana, Slovakia) Duguid, Paul (University of California, USA) Grimes, Seamus (National University of Ireland, Department of Geography, Galway, Ireland) Hall, Peter (University Collegue London, UK) Hassink, Robert (Universität Bonn, Department of Geography, Germany) Heinderyckx, François (Université Libre de Bruxelles, Belgium) Henry, Nick (University of Newcastle, UK) James, Al (University of Cambridge, Department of Geography, UK) Kalvet, Tarmo (PRAXIS Center for Policy Studies, Estonia) Karnite, Raita (Latvian Academy of Science, Institute of Economics, Latvia) Lainevuo, Ari (Uusimaa Regional Council, Finland) Lindgren, Hans (Senior Adviser/Consultant, Sweden) Läpple, Dieter (Technische Universität Hamburg-Harburg, Institut für Stadt und Regionalökonomie, Germany) Mancini, Chiara (Regione Emilia-Romagna, Italy) Millard, Jeremy (Danish Technological Institute, Denmark) Neubauer, Jörg (Nordic Centre for Spatial Development, Sweden) Nurmela, Juha (Statistics Finland) Osimo, David (IPTS, Joint Research Centre, Spain) Pál, Gáspár (International Center for Economic Growth - European Center, Hungary) Piatkowski, Marcin (TIGER – Transformation, Integration and Globalization Economic Research, Poland) Pollone, Michela (Piedmonte Development Ageny, Italy) Preston, Paschal (Dublin City University, Ireland)  Summary Findings and Policy Recommendations Roe, Aidan (Consultant/Evaluator, UK) Runiewicz, Malgorzata (Independent expert, Poland) Rutherford, John (Ecole Nationale des Ponts et Chaussées, Laboratoire Techniques Territoires Sociétés, France) Sabol, Tomas (University of Kosiçe, Slovakia) Santinha, Gonçalo (Universidade de Aveiro, CEIDET, Portugal) Sartori, Laura (Universitá di Bologna, Dipartamento di Discipline della Communicazione, Italy) Scott, Allen (UCLA Social Science Computing, USA) Shaddock, John (Yorkshire and Humber Assembly, UK) Stankov, Petar (Center for Economic Development, Bulgaria) Sullivan, Patrick (The Hatchery Europe Ltd., Wales, UK) Triglia, Carlo (Universitá di Bologna, Dipartamento di Discipline della Communicazione, Italy) Vale, Mário (University of Lisbon, Portugal) Vickery, Graham (OECD) Williams, Mike (University of Wales, UK) Xuereb, Marisa (Island Consulting Services, Malta)  1. Introduction There is much evidence which suggests that a digital divide continues to exist between Europe’s regions. However, the nature of the variation across regions is not well understood, neither are the ways it can be sensibly measured. While the potential benefits of information and communication technology (ICTs) are available – at least to some degree – to every region, the ways and the effectiveness with which regions exploit these potentials varies hugely across the EU. How can these disparities, which are reflected in the relative success of regions in achieving economic growth and social progress, be explained and understood? Some European regions appear to have the capacity to take the new ICTs and use them effectively to create new and successful products and services, organisational and administrative forms, even whole new ways of life. These regions take up new technologies and use them to change their economic and social prospects in positive, transformative, ways. Other regions, by contrast, seem to do little more than ineffectually ape the innovations of their more creative neighbours. The TRANSFORM project has developed an understanding of what transformational change means in this context and has developed some ‘clues’ regarding the factors that appear to contribute towards such change in a regional setting. TRANSFORM has particularly analysed the effects of socalled “Regional Innovation Cultures” on the ways and the effectiveness with which regions exploit ICT to achieve their aims and goals and has done so at three levels: the level of the individual, the level of the firm/organisation, and at the level of the regional public sector. TRANSFORM has drawn up a conceptual framework to better understand transformational uses of ICT and its relation to regional development; reviewed available evidence from the research and practitioner literature; taken stock of available indicators and measurement approaches for exploring ICT-related, transformative change in regions; carried out in-depth primary research in 12 case study regions across Europe; constructed and tested a set of indicators on ICT-related transformative change at regional level; and developed concrete suggestions about how the evidence collected should feed into regional policy-making. The policy recommendations focus particularly on informing the i2010 policy process1 (including preparation of a successor initiative) and the Community Support Guidelines for the Structural Funds, suggesting ways in which they might be refined and improved, to take greater account of regional disparities and of the wider influences which determine the transformative use of ICTs rather than merely their availability and uptake. The main focus of our policy recommendations is those policy makers involved directly in the i2010 process and those concerned with Structural Funds policy and management at the European level, at the regional level, or with regional policy at national level. These, of course, encompass the EU institutions, including the Commission and Member States. We also target the European Statistical System (NSIs and Eurostat), with whom we have interacted throughout the process. Our policy recommendations will also be relevant to a range of other actors concerned with information society issues and regional policy in general, especially those policy makers operating at regional level. With a view to emphasising a key conclusion of our work, we point out at the initial stage and subsequently argue that the i2010 policy process needs to adopt a multi-scalar approach, involving EU, national, regional and local level actors, and corresponding levels of governance. Our view is that the regional level tends to be inadequately or not fully included in the process – moreover, European regions do not have tools and are not taken appropriately into account in indicator development and benchmarking – to the disbenefit of the regions but also of the wider process. At present, as shown on the left-hand side of Figure 1 [following page], regions (and other local actors) are able to feed into and influence the i2010 policy development process only through the Member States and by means of occasional ad hoc arrangements. We believe that the local and regional levels (as well as civil society more generally) should be represented directly in the debate as illustrated in the right-hand side of the same figure. Thus, one important focus of our recommendations concerns how to more fully involve regions – echoing points in the 1 The project is very much policy-oriented and thus a key output of the research concerns policy recommendations. “i2010 – A European Information Society for growth and employment”, Communication from the Commission to the European Parliament, the European Economic and Social Committee and the Committee of the Regions, COM(2005) 229 final.  Summary Findings and Policy Recommendations Figure 1: The need for closer involvement of regions in the i2010 policy process. Source: The authors. recent Committee of the Region’s report2 – and how to build in a process of multi-scalar (multi-level and multi-agency) cooperation and consistent interaction and knowledge exchange – with feedback loops – which sensitises all scales to each other’s concerns and the higher levels to the particularities of place(s). This focus ties in with the essentially processual nature of many of our recommendations. Our recommendations can, conceptually, be divided into three categories, though we hope to show how these relate to each other. These three categories are: » Our first set of recommendations concern how the regional information society/knowledge-based society should be conceptualised. Here, we seek to engender an intellectual shift in how policy makers (and indeed the wider community) think about the regional information society/knowledge-based society, moving the emphasis away from narrowly measured outcomes and towards a greater understanding and awareness of the processes, contextual factors and explanatory variables, which lead to, or inhibit, success, competitiveness and cohesion through use of ICTs. We hope that our recommendations will, then, have explanatory power. » The second set of recommendations concerns the choice of indicators and benchmarking processes that should be used to measure ICT-related developments at regional level. We have designed a Regional Information Society Benchmarking System which builds on existing indicator frameworks such as the i2010 benchmarking indicators, but extends them to take better account of the impact of uses of ICT. Our recommendations explain how best this benchmarking system can be utilised by policy makers and how existing tools can be integrated in the new system. We also suggest processes by which this can be further developed over time – since no benchmarking system can be regarded as ‘complete’, but will need to respond to future societal developments. » Finally, the third set of recommendations is targeted at particular policy groups at the regional level. These will be concerned, inter alia, with (a) government and governance including leadership, (b) innovation capacity including public sector support to enterprises, and the role of enterprises (especially SMEs) and (c) individuals as consumers, parents, learners, patients, employees, and so forth. In the three sections to follow, we look at the three categories of recommendations mentioned above and, in doing so, we present some ‘conclusions’ about what we 2 Resolution of the Committee of the Regions to be submitted to the European Spring Council 2008 on ‘The Strategy for Growth and Jobs — Handling the “Lisbon paradox”’ (2008/C 105/07), 25 Apr 2008. 10 have learned from the research undertaken in the project. In this sense, earlier analysis and conclusions – whether firm or tentative – acted as the triggers for generating policy recommendations for debate within the project team but also with other stakeholders represented inter alia by our two expert groups – the Regional Innovation Culture Expert Group (RICEG) and the Indicator Development Expert Group (INDEG). In presenting our conclusions and the policy recommendations we derive from them, we will not re-rehearse all of the extensive analysis carried out in the context of TRANSFORM3, but our draft proposals for recommendations are nonetheless based firmly upon it. The Annex of this document contains » in section 5.1, a summary of our research findings about the factors which enable transformative use of ICTs in regions, which relates in particular to the role of regional innovation culture. Empirical research consisted of 12 case studies in selected NUTS2 regions across Europe; » in section 5.2, a summary of the results from a pilot survey which was conducted in order to pilot new indicators and to explore the transformative impact of ICTs as perceived by individuals. The survey was carried out in the same 12 regions as the case studies. Our aim has been to try to understand, and if possible explain better, why individuals, firms and the regional public sector in some regions appear able to use ICTs in ways that bring about beneficial transformations whilst elsewhere (as yet) they have not. The project began by exploring what the research and practitioner literature has to say about the key factors which explain the different degrees of regions’ success in the knowledge-based economy and society. This analysis focussed, in particular, on the role of soft factors such as regional (innovation) culture in enabling transformative uses of ICT. The review identified five key “clues” which appear to be of major importance for exploring and understanding why some regions, but not others, are able to use ICTs so much more effectively to achieve their goals: » Networks – and in particular, networks that bridge social worlds – play a key role. This relates to the notion of social capital which has attracted much interest in policy circles in recent years. » Reflection and reflexivity are important, as are shared representations (such as “visions” or other kinds of narrative) as the means by which reflexivity can be brought about. 1.1. PercePtions of the regional information society and Knowledge-Based economy From a regional policy point of view, we understand transformative use of ICTs as fostering regional development in the knowledge-based economy and society, the goals of which have been set in the major related EU policy processes, namely the revised Lisbon agenda and the i2010 strategic framework. The main goals of regional development are thus considered to be: economic growth and competitiveness, employment and human capital formation, social inclusion and cohesion, good governance, and environmental sustainability. With regard to ICT, the i2010 strategic framework defines four core application domains: e-business, e-government, e-learning and e-health. These are a main focus of TRANSFORM. They are analysed along three particular levels of ICT use: by individuals, by firms, and by the regional public sector. » Regional innovation requires learning, not only as a lifelong activity of citizens, but also as collective, social process. » The dynamic between leaders and followers is another, albeit less openly acknowledged, key factor for differentiating between regional innovation cultures. » The literature offers plentiful of evidence for the importance of regional openness to the outside world. Such openness, though, needs to be rooted in a sense of closure, as reflected in the notion of regional identity. These five “clues” are seen as reflecting the kind of regional innovation culture with which a region is endowed. One can further hypothesise that the extent to which a region has an effective innovation culture is decisive for the ability of individuals, firms and regional government to make best use of ICT – that is, to make transformative use of ICT. From a regional perspective, investment in ICTs and related transformational change is important since, in broad terms, the available evidence suggests that ICT is an important driver for growth. However, as indicated above, the extent 11 3 Interested readers are refered, in particular, to two TRANSFORM publications: D1.1 “Transformation of Regional Societies Through ICTs: State(s) of the Art(s)” which presents the findings of the literature review, and D2.1 “TRANSFORM Indicator Stocktaking Report”, see www.transform-eu.org. Summary Findings and Policy Recommendations to which benefits accrue depends less on how much ICT you have than on what you do with it and, more than that, on its meaning or significance to the user (individual, firm or region). There is now a wealth of evidence which indicates that ICT investment alone is insufficient to achieve transformational outcomes – it needs to be accompanied by effective changes in structures, processes, practices and attitudes, as well as a supporting or enabling environment. The former include, inter alia, organisational change, willingness to experiment, development of appropriate skills, innovation and effective management. 1.3. Policy maKing at the regional level In broad terms, regions and their regional policy makers share the overall European objectives enshrined in the Lisbon Strategy: economic growth and competitiveness; employment and human capital formation; social inclusion & cohesion; good governance, and environmental sustainability. In many regions, there is an explicit objective to develop the regional information society since ICTs – the tools of the information society – are seen as a means for achieving the ‘Lisbon’ goals. For Objective 1 (from 2007: “Convergence”) and 2 (“Regional Competitiveness & Employment”) regions, there has been a requirement (for EU-15 regions) or encouragement (for New Member States regions) for an explicit ‘earmarking’ of Structural Funds for activities that promote the Lisbon goals. 4 1.2. indicators and BenchmarKing Processes transformative Uses of ict for In some regions, there is an understanding also that competing successfully in the global economy and achieving economic growth – as well as reducing exclusion and improving quality of life – are intrinsically bound up with a successful transition to the knowledge-based economy and society. Moreover, effective investments in ICT are widely understood as playing an important – some would say essential – role in building the regional knowledge-based economy and society. We might argue, then, that EU policy makers and policy makers in many Member States are to some extent “knocking on an open door” with regard to development of the information and knowledge-based societies when it comes to gaining buy-in from regions. However, from a regional development perspective, too often the support mechanisms are either inadequate or inappropriate. Whilst € 347 billion (at current prices) is allocated to the Structural Funds in the present programme period (2007 – 13), we can be reasonably sure (based on recent past evidence) that at least some Member States and regions will be unable to fully draw down their allocation due to failures in their absorptive capacities. Even in those states and regions where the funds will be fully expended, some will fail to make any appreciable 4 A main objective of the project was to contribute to the refinement of our understanding and measurement of the regional aspects of the (regional) digital divide in Europe through: » devising a benchmarking system, consisting of a set of indicators and tools/methodologies for data collection, to map the transformative uses of new technologies, within the realms of individuals, firms and public institutions; » pilot testing indicators and tools in a carefully selected sample of EU regions, with a view towards obtaining a benchmarking system that not only fully reflects the state of the art in research on interrelations between the information/knowledge-based society and regional development, but that also lays the groundwork for a self-sustaining network of integrated information/knowledge-based society observatories at the regional level. Against this background, TRANSFORM sought to develop a system of indicators which, as well as featuring a core set of established technology indicators, contains adequate measures of the extent to which ICT is used for transformative purposes. The aim has been to develop, pilot and validate elements of an ‘economical’ indicator and benchmarking system that will meet the specific needs of regional policy makers seeking to exploit ICT to bring about transformative change in support of regional development objectives. 12 EU-15 member states are required to invest the predominant part of their financial allocations, namely 60% of Funds for their Convergence regions and 75% for their Regional competitiveness and employment regions. See Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions - Member States and Regions delivering the Lisbon strategy for growth and jobs through EU cohesion policy, 2007-2013, COM(2007) 798 final, Brussels, December 2007. impact in terms of their competitiveness, growth, employment, inclusion and quality of life. We know, of course, that paradigm shifts such as the information and knowledge-based societies do not happen overnight and that single Structural Funds programming periods typically allow insufficient elapsed time for the full effect of (even wise) investments to pay off and show their full impacts. Nonetheless, past evidence, taken from over two or even three programming periods, suggests only slow progress occurs in some regions. Enlargement has, of course, increased the extent of Europe’s regional disparities and poses a major challenge. Recent political and economic upheavals in many of the New Member States and regions have resulted in low levels of social infrastructure. In particular, regional government and governance in many New Member State regions is newborn and as yet quite immature. In terms of policy recommendations that directly affect the regional level, we therefore ask (a) what can the EU and Member States do to help regions to be better able to help themselves and (b) what steps can the regions themselves take to improve their development capacity? We also ask whether the Lisbon Strategy and i2010 can be considered successes and, if not why not and what could be done to improve them. » » » » » ‘change in mood’, but emphasise that such investment will need to be supported by a range of other measures if Europe and its regions are to utilise the technologies to their fullest extent. There is some evidence to support the contention that ICT investment is an important driver for growth and that such investment is positively correlated with productivity growth at a national level6. The evidence also suggests that the US has been more successful than EU in this regard7 and, naturally, commentators have sought an explanation. There is much agreement that building the knowledge society is the best, and perhaps only, way to sustain European ways of life. There is a presumption that effective use of ICT will play a critical part in that. However, hard evidence concerning economic returns on ICT investments is difficult to find. There is, therefore, an ongoing need to support appropriate research and to identify and promote successful (regional) development projects and models8. ICT investment and development of the information society play an important role in their own right but they also have an important part to play in fostering innovation and in helping the transition to the knowledge-based society. This applies to both the economic and social fields. Whereas early research indicated that the Internet and other ICTs might have problematic “impacts” on social capital within communities and on sociability of individuals, more recent research – including findings from the TRANSFORM piloting survey – suggests that the creation and maintenance of social capital in the knowledge-based society require widespread and effective use of ICT. In this regard, the EU’s eInclusion initiative as part of the third pillar of the i2010 policy initiative is of special importance and significance. 2. Perceptions of the Regional Information Society 2.1. the imPortance of ict investment » Support for ICT investment as a means to achieving the knowledge-based society and economy has recently been given added impetus by the emergence of broadband technologies. At the European level comparisons are being made between the EU and its competitor ‘blocs’ across the world. Within the context of regional development and cohesion policy, investment in ICT infrastructure has moved from being largely taboo to being a key policy tool5. We support this 5 6 See, for example, Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions - Bridging the Broadband Gap, COM/2006/0129 final. See, for example, “Effects of ICT capital on economic growth”, Staff Paper, European Commission, DG Enterprise & Industry, Innovation Policy (Technology for Innovation), Brussels, June 2006. 7 See, for example, “EU versus USA”, Fredrik Bergström & Robert Gidehag, Timbro, Stockholm, June 2004. 8 The differences between overall economic performance of the US and EU can be explained in part (but not fully) by variations in working hours (Americans work longer hours rather than being more productive than Europeans) but, for related reasons, the European ways of life emphasises more the importance of social benefits and social returns on ICT investments. 13 Summary Findings and Policy Recommendations » We suggest that successful transition to the that arise from the ways in which ICTs are used. More ICT investment and more knowledge economy development will not automatically solve social and spatial inequalities. » Notwithstanding these concerns, the Lisbon agenda indicates that Europe’s performance in the translation of knowledge and research into innovation is insufficient. The huge disparities between regions regarding their innovative performance10 imply that policy-making at the regional level can play a key role as well. The ‘Lisbonisation’ of the Structural & Cohesion Funds (earmarking in terms of the Community Support Guidelines (CSG)) is expected to address this. » Lisbon provides an overall unifying policy framework for the EU and its development. Its implementation is the subject of a variety of policy initiatives and funding programmes, the largest and most important of which are the Structural & Cohesion Funds. The CSG prioritises investment in innovation, the knowledge economy, and information and communication technologies. » Transition to the knowledge society necessitates, inter alia, effective availability of, access to, adoption and exploitation of, the tools of the information society – ICTs. In particular, it will be necessary to develop transformative uses of ICT if its full benefits are to be realised. » The main EU policy instrument for supporting information society development within the context of the Lisbon Agenda is i2010. i2010 is based on three pillars: the creation of a Single European Information Space to promote an open and competitive internal market for information society and media services; strengthening innovation and investment in ICT research; and supporting inclusion, better public services and quality of life through the use of ICT. » In our view, the first pillar creates a level playing field (which favours the stronger players/regions); the second pillar will directly favour those regions with a head start in ICT research and innovation (the stronger players again); and only the third pillar opens up space for the ‘ordinary’ regions – the vast majority that have neither leading ICT research nor strong business services and media sectors that might be expected to benefit from the first two pillars. knowledge-based society, in which knowledge confers critical competitive advantage, is itself an important transformational aspect of ICT. Economies and societies that are unable to harness the transformational benefits of ICT are, we suggest, less likely to make a successful transition to the knowledge-based economy/society. 2.2. the Policy frameworK » The Lisbon Agenda tends to be widely known and (at regional level) there is broad agreement about, and support for, its main goals. In particular, Lisbon provides an important context for regional (as well as Member State) development with its focus on: economic growth and competitiveness; employment and human capital formation; social inclusion & cohesion; good governance, and environmental sustainability. » The problem with the Lisbon Agenda is one of inadequate or failed implementation9. With the relaunch of the Lisbon Strategy in 2005, the EU has taken on an immense transition task to catch-up with the progress towards the 2000 Lisbon objectives and to build a globally competitive knowledge-based economy so as to create more jobs and growth. ICTs are one of the keys to achieving this goal. » While few would disagree that having “the most competitive” and simultaneously “socially inclusive” economy is a good thing, questions can be raised about the capacity of Europe to achieve these aims. This is not just a question of implementation – there are, perhaps, more fundamental contradictions in the strategy. One can ask, for example, if liberalisation of the telecommunications market has contributed to the ‘digital divide’, both social and territorial. More generally, while ICTs can be harnessed to reduce social exclusion and/or regional inequalities, equally they can aggravate the problem. » We emphasise the need to be more sensitive to the sometimes adverse effects for particular regions 9 See the Kok Report, 2005, “Facing the Challenge – The Lisbon Strategy for Growth and Employment”, Report from the High Level Group chaired by Wim Kok, November 2004. See also eris@’s Opinion on “Cohesion and the Lisbon Agenda: The Role of the Regions”, Brussels, February 2005 which stated “The Lisbon Agenda and the eEurope Action Plans (2002 and 2005) have to date been limited in their success due, in part, to their failure to engage the regions as an integral and explicit part of the processes.” 1 10 See OECD 2005c; Hollanders 2006. » It might reasonably be argued that i2010 provides a broad EU-level approach based primarily on grounds of additionality – tackling at an EU level issues whose harmonious solution would be difficult at a national level and impossible at a regional level. With the exception of the third pillar, i2010 offers only limited scope, role or opportunities for regions and even in the third pillar the regional dimension focuses mainly on tackling the digital divide that results from infrastructure deficiencies in under-served areas. » approach and tighten the link between ICT policies and Lisbon priorities. Policy makers also have to understand how new economic and societal developments can extend the benefits of the information society to new groups, fostering competition and European industrial leadership while including society at large. As already pointed out, disparities between regions’ innovative performance imply that policy-making at the regional level can play a key role as well. Less Favoured Regions (LFRs), if only they could accelerate their development, have the most scope to contribute. » The mid-term review of the i2010 strategy aims to ensure that i2010 continues to be a valid reference framework for Europe’s information society and media policies. However, the main thrust of both the Lisbon Strategy and the i2010 policy initiative is, in our view, for a standardised one-size-fits-all approach – taking inadequate account of the diversity of regions and their needs, priorities and opportunities. » While recognising the importance of ICT investment, we consider that the Lisbon strategy and i2010 policy framework place insufficient emphasis on (a) the nature of ICT use (and the need to develop transformative uses in particular) and (b) on the role and contribution of regions. » Across the EU, major public interventions on broadband tend to be the province of the regions. Major SME eBusiness interventions (and major resources) are regional in many Member States. eGovernment and ICT services for citizens are again largely driven (strategically at least) at the regional level. Finally, Innovation is also a regional-level policy in many Member States. Moreover, the integration across these themes (infrastructure, eBusiness, eGovernment and innovation) often takes place at the regional level – and it is by working across the sectors that genuine transformation becomes possible. The regional level is not merely a useful level to achieve ICT-enabled transformation, it is the level where this transformation can be initiated and sustained. No other level can achieve comparable integration/interaction/synergy between these actors. » We recommend the need to modify the Lisbon Strategy and to re-align i2010 to place greater stress 1 » The CSG state that “The identification of regional needs should take into account existing Community initiatives in favour of ICTs, in particular the i2010 — a European Information Society for growth and employment.”. However, it is difficult to see how i2010, in its present form, could make more than a quite limited contribution to identification (and delivery) of regional needs. » The linkage between the EU’s information society policy and its regional policy appears rather asymmetric. While regional policy and the Structural Funds Guidelines recognise the importance of the information society, the i2010 policy makes scant mention of regions and regional development – other than from an EU-wide perspective (concerning eInclusion in the third pillar). 2.3. the role and contriBUtion of regions » Insofar as Member States (or at least those having a population in excess of, say, 4–5 million) can be considered as the sum of their parts, it stands to reason that regions can and should make a contribution to the Lisbon Strategy as well as to National Reform Programmes. However, it has been argued beyond this that regions are the optimal location for fostering innovation and that the region is the ideal level to develop and implement many aspects of information society strategies – lower than the level of overburdened national government but above the fragmented level of local authorities11. » Even the i2010 Annual Information Society Report 2007 indicates the need to take a more forward-looking 12 11 See, for example, “Regionalism”, Summary based on a report by G.Stoker, B.Hogwood and U.Bullman (University of Strathclyde) Research Report published by the Local Government Management Board, 1996. 12 COM(2007) 146 Summary Findings and Policy Recommendations on transformative uses of ICT and on an explicit role for regions so as to make a more effective contribution to the European information society and knowledgebased society. Clear mechanisms should be defined for involving regions more directly beyond existing arrangements through the Member States and other ad hoc approaches. Further, policy needs to recognise the differential inherited endowments and capacities of individual regions, as well as local goals and priorities. » Rhetoric matters and it matters most when the messages are clear and succinct. The Commission should not underestimate the influence that key EU publications can have on those responsible for regional development. » Although we consider that the regional level is very important, we also recognise that one cannot ignore the continuing importance of nation states. Our case study work, for example, showed this well both in Sweden and Slovakia. With a risk of oversimplifying, generous national investment in ICT infrastructure in Sweden paved the way for transformative uses of ICT, while in Slovakia the lack of national leadership in ICT makes any endeavour at the regional level so much more difficult. Interviewees in Slovakia highlighted as one of the problems the lack of national coordination in terms of common technical standards for developing various eServices and applications. A multi-scalar approach may be the right one – getting EU, national, regional and local levels to agree to coordination mechanisms in dealing with these and other issues. » The Lisbon Strategy and i2010 policy initiative recognise the risk of the digital divide but the solution is seen (at least by i2010) mostly in terms of technology (and technology networks in particular). There is a need to supplement this focus on technology with a focus on institutions and cultural factors – social competencies as well as technology and technical competencies (see below). » It is non-codified or tacit knowledge that is a crucial source of competitive advantage and this requires regular face-to-face contacts of the actors involved and these are best sustained within spatial proximity, e.g. within a region. Soft factors such as habits, conventions, rules of conduct, trust and social capital tend to be regarded as partly place-specific and ingrained in regional culture. In this sense, culture is indirectly, but powerfully, linked to the success or failure of regional economies. 1 2.4. transformative Uses of ict » We could argue that the notion of transformational change is comparatively well established in the analysis of firms. Indeed, the management literature is full of accounts how to “turn around” companies and how to initiate “revolutionary” change. But, more specifically, as a causal or enabling factor, the role of ICT in inducing or contributing to such change has also attracted much interest in recent years, for example in the context of eBusiness strategies. However, by contrast, the concept of transformative change appears to be much less clear when applied to the public sector and, in particular, to individuals’ use of ICTs. » Transformative use of ICTs is understood as fostering regional development in the knowledge-based economy and society, the goals of which have been set in the major related EU policy processes, namely the revised Lisbon agenda and the i2010 strategic framework. Thus we argue that transformative change is a change in the form of (regional) society but not its type, and nor in its underlying goals and aims. » ICTs serve as drivers for innovation, as tools for transforming education, government, health care and business models and thus as instruments for improving the quality of life of citizens and the competitiveness of enterprises. In this regard, as i2010 argues, new ICTbased technologies are essential not only for greater resource efficiency but also to achieve qualitative shifts towards radically different, more sustainable economic and social consumption patterns. » However, the scope for ICTs contributing to a better spatial balance (between rural and urban areas) is not properly appreciated. At a simplistic level, there is a presumption that ICTs will automatically bring about this better spatial balance (the ‘death of geography’ view) and to this extent the potential of ICT is overestimated. On the other hand, under-investment of ICTs in rural areas – where the returns on investment are inevitably lower – means that the potential for better spatial balance is not fully realised. The reality is that market forces have resulted in powerful agglomeration effects.13 13 See for example Editorial Team established by the Coming Presidencies Group (2006): “The Territorial State and Perspectives of the European Union”, Background document for the Territorial Agenda for the EU. See also EUROREG et al. (2006): “ESPON project 1.2.3 – Identification of Spatially Relevant Aspects of the Information Society, Draft Final Report”. » The paradox for rural areas in respect of ICTs is that regions in the periphery have better opportunities today through ICTs (if they can grasp them) to mitigate somewhat the (negative) effects of their location. Conversely, the success of some urban environments is becoming counter-productive as they become more expensive, more congested and more polluted. The opportunity for towns/cities to work together with their rural hinterlands is a transformative use of ICT that deserves to be taken more seriously. » • consumer to business (C2B) Citizen to administration (C2A) and Administration to citizen (A2C) These ‘service’ relationships between government, enterprises and citizens are illustrated in Figure 2 (where MNC = multi-national corporation, LA = local authority). Of course, the diagram in Figure 2 is an oversimplification in many respects. We recognise, for example, the disproportionately large role that local government and municipalities play in some Member States in the provision of many services, especially those relating to social welfare and health care. Moreover, the distinction between public and private sectors is often less clear cut than illustrated here with private enterprises often contracted to deliver public services. » Bringing about transformational change through ICT is anything but simple. Indeed, its very complexity may explain why relatively few regions (or Member States) have thus far been successful in achieving it. There is nothing to be gained by presenting regional policy makers with an over-simplified, one-size-fits-all solution with which to face the challenge of developing the knowledge-based economy. Figure 2: Analysis of service relationships in and between the spheres of ICT adoption in a region. Source: The authors. » Our analysis of transformative uses of ICT has focused on individuals, firms and the regional public sector. In this sense, the interaction between them (necessary for any kind of transformative change) is covered by a range of ICT-mediated services classified typically as: • • • • • Administration to administration (A2A) Business to business (B2B) Citizen to citizen (C2C) Administration to business (A2B) and Business to administration (B2A) Business to citizen/consumer (B2C) and Citizen/ » To illustrate some of the potential scope for transformative uses of ICT, Figure 3 offers some clues about the various ‘domains’ in which ICTs could bring about significant change14. The diagram serves to emphasise first the complexity of planning and managing effective transformative change at regional level and, second, the need for all the main actors (as regulators, providers, users/consumers etc.) to be willing to cooperate in using ICT-based delivery systems and services. 14 Adapted from the PRELUDE Thematic Guide to eCommunities, Komarek and Hughes, published by eris@, Brussels, May 2004 1 Summary Findings and Policy Recommendations Figure 3: Key domains for transformative applications of ICT. Source: Komarek and Hughes (2004). Figure 4: ICT diffusion as a 2-phase process towards transformation.Source: The authors. » In order to demonstrate the difference between transformative and non-transformative uses of ICT, it appears useful to think of ICT diffusion as a two-phase process (see Figure 4): In a first phase, ICT is adopted to do better what has been done before already, i.e. to increase efficiency (speed, throughput, output, variety, productivity, etc.). While significant improvements can be obtained this way, the true potential of ICTs to enable new ways of doing things is not being exploited. This is what the second phase is about: Questioning traditional processes and means of achieving the fundamental goals of stakeholders, and making progress towards stronger social and networking capital, continuous learning and innovation, and empowerment of people as citizens, consumers, patients, learners, creators, and so forth. 2.5. Understanding the transformative Uses of ict » ‘Regional innovation cultures’ – and the soft infrastructure of a region – appear to play an important role in the ways and the effectiveness with which regions exploit ICT to achieve their aims and goals. As stated above, in additional to placing emphasis on technology and technological factors (including technology indicators), there is a need to focus more on the ‘soft’ factors – as stressed by many of our case study interviewees. » Policy makers need to understand their regional innovation cultures and try to make ICT policies work, as far as possible, with the grain of that culture. Each region has to find its own (regional) solution to its 1 problems, according to its own values, endowments and other competences. In particular, as Phil Cooke15 suggests, “the historical trajectory of a region sets serious limits to the windows of opportunity with regard to relevant policy options.” » More broadly, we conclude that history, geography, culture and other factors matter, which makes it necessary that each region carries out a careful analysis of its ‘endowments’ and act accordingly. The economic structure of a region is embedded in a social and institutional framework, and cannot be understood without considering this framework. » It is important that EU institutions continue to emphasise the importance of organisational change, skills development, experimentation, innovation and effective (change) management in the development of the knowledge-based economy and society – and that these take place within a particular context. We suggest the possibility to use 2009 Year of Creativity & Innovation to promote transformative uses of ICT. » In practical terms, the earmarking of Structural Funds for the Lisbon Goals is welcome but again there needs to be an emphasis on investing (time and money) in the soft factors. We suggest the possibility to propose guidance of the need to re-orient some small part of the Structural Funds to invest directly in improving soft infrastructures (creating additional social capital as part of regional capacity building). » There is a need for a more explicit approach to developing the regional capacity to help regions use their ICT investments more transformatively and thereby help them to compete in the emerging global knowledge-based economy. Unlike in many other policy areas, there does not appear to be a cadre of information society professionals, with their own training bodies, own professional associations, and with a departmental home (compared, for example, with engineers, planners or social workers). This may be a good thing as it brings different people to the table, but it may also mean that they are less able to galvanise resources. » 15 lives and create disruptive, highly competitive business models, but these opportunities have until now only been superficially realised, either economically or socially. We believe that this can be attributed in part to lack of interdisciplinary understanding of the various elements which are required to effectively utilise technologies across a number of spheres. There is a need for interdisciplinary training in order to create a cadre of ICT researchers and practitioners who recognise the complexity of the processes involved in the creation, implementation and transformative use of these technologies, and who can bring a set of technological and social competencies to bear in a number of spheres where ICTs are (or could be) present. » We recommend that the Commission should consider how it might support the development of schemes and mechanisms for helping to promote/build social capital around transformative uses of ICT including, inter alia, eLearning (ICT-mediated) training courses, ‘Summer Schools’, Guides to Good Practice, staging a high profile Good Practice Conference with an Exhibition and Awards with a follow-up Best Practice Web Portal (to build a Virtual Community of practitioners). This could include the idea of exchanges of personnel or secondments between the Commission, Member States and regions, particularly involving those from the New Member States. We stress again the importance we attach to multi-scalar interinstitutional working and that such an exchange scheme or secondments could contribute to more effective ways of policy development. 2.6. five ‘clUes’ to transformative Uses of ict » Following an extensive review of the relevant literatures, TRANSFORM has identified what we call ’clues’ to understanding the nature of regional innovation cultures which we believe, in turn, determine a region’s endowments: they are networking, shared narratives and visions, learning, leadership, and openness. The extent to which a region has an effective innovation culture is decisive for the ability of individuals, firms and regional government to make best use of ICT – that is, to make transformative use of ICT. We describe briefly each of these clues below. » Networking is critical for advancing to the knowledgebased society and represents an important aspect of building social capital – both bonding and bridging social 1 ICTs have the potential to substantially improve people’s Phil Cooke (Ed.), “Constructing Regional Advantage – principles, perspectives, policies”, Report prepared buy an independent expert group for the European Commission, DG Research, Brussels, 2006. Summary Findings and Policy Recommendations capital16. The proliferation of relatively loosely articulated networks that span social worlds – bridging, rather than bonding social capital – is especially important. » Transformative use of ICT is characterised by being (a) multi-agency – they require the co-ordinated decisions of a number of independent actors; (b) multi-level – they require changes in organisational structures, business processes, working practices, attitudes, mind sets and problem definitions, as well as the direct application of new technology; and (c) multi-domain – they cross traditional boundaries and silos, between public and private, between households and organisations, between the various silos of the welfare system or the various branches of traditional industrial structures. By modifying Figure 2 on page 19, Figure 5 below illustrates a possible multi-agency, multi-domain network which addresses a particular regional challenge. » We suggest that networking cannot be treated in a casual ad hoc manner. It needs to be strategic, well planned and professionally executed. Regions should be encouraged to develop Regional Networking Strategies & Action Plans: identifying clear goals, assigning responsibilities, allocating a budget, and ensuring collective learning ensues. » Whilst structured systems for learning might be implemented, this needs to be balanced with informal networking. Whilst capturing information and knowledge in a formal network may be feasible, innovation often relies on informal interactions and networking in which capturing, sharing and extending learning is very much more difficult. Nonetheless, it should be feasible to create environments and appropriate tools (making use, for instance, of Web 2.0 technology) in which information and knowledge are shared in a more Figure 5: Example of a transformative change process via multi-agency, multi-domain networking. Source: The authors. 16 “The central idea of social capital is that social networks are a valuable asset. Networks provide a basis for social cohesion because they enable people to cooperate with one another for mutual advantage.” (Field, 2003, p.12). Drawing on Woolcock’s distinctions, the author puts forward three types of social capital: bonding capital, ties between alike people in similar situations; bridging social capital, more distant ties of like persons; linking social capital, which reaches out to unlike people in different situations (Field, J. (2003) Social Capital. London: Routledge, p42). 20 informal fashion. Social networking sites may act as a supporting mechanism to such informal groupings. » Successful networking in this context involves the interaction of what we have called idea networks, expertise networks and resource networks: specifically that each on its own will fail. Expertise and resources without ideas are prone to set off cautiously and conservatively – it may achieve something but nothing very transformative. Ideas and resources without expertise generate interesting but ultimately failing projects that can lead to cynicism about the potential for transformation, while ideas and expertise without resources lead to promising pilots, plans and schemes but without follow through. It is important to remember that resources refer not only to financial resources but also to (peoples’) time and ‘political legitimacy’ and that expertise is not just technical and quasi-technical (e.g. financial and project management) expertise but also includes domain expertise in fields such as health, education, etc. » » Visions and narratives, reflection and shared perceptions likewise play an important part in building shared objectives or ‘common purpose’ and a greater willingness among key actors to find ways to cooperate and collaborate. However, we stress the need to achieve a balance between evidence and vision/narrative so as to calibrate vision with reality: relying on evidence alone with no shared vision results in nothing happening while, on the other hand, if we wait for adequate ‘evidence’, pure vision is likely to be (more or less) wrong. » The development of shared representations of ‘possible futures’, route-maps, collective vision and so on need not, of course, be universally shared representations: indeed, they may be highly contested. Yet, they structure the interaction between social actors, setting expectations, upsetting assumptions and orienting attention to particular goals. We suggest here (as elsewhere) that the creation of appropriate (social) ‘structures’ is important – in this case, for example, forums for open discussion and debate on regional priorities for developing the regional information and knowledge-based society (e.g. South Yorkshire established an eForum and Malopolska set up an Information Society Council while Kosice’s vision to develop an ‘intelligent region’ saw the creation of “Kosice IT Valley”). Identification, documentation and dissemination of good demonstration projects can play a useful part in gaining commitment to the longer-term vision. » We attribute a critical role to the vision-building process, which might still be the best approach to adopt in several European regions. In many regions, a serious debate on the nature and type of information society, cross-cutting » » » the various institutional and social layers of the region, has not yet been conducted. Nevertheless, it is crucial for making expectations clear, for agreeing the priorities, and for shaping the policy action consequently. There is no evidence that we are aware of to suggest that it has been wrong to place priority on developing visions and strategic integration. Developing and sharing perceptions about a vision mitigates differences in political views and also helps provide a potential control on agendas. Integration – and coordination – links between the various pillars help maximise results, help build regional capacity to overcome weak social capital, soft technologies and infrastructures. Learning – both as a collective social process and as lifelong learning for individuals – is an important factor underpinning a region’s capacity to develop transformative uses of ICT. If knowledge is the most fundamental resource in the contemporary knowledgeintensive economy, then learning is the most important process. It suggests the need to promote even more the importance of lifelong learning (for example, through the Structural Funds in eligible regions), recognising also the key role that incidental and informal learning have. Again, it may be necessary to build some structures to facilitate collective (regional) learning. Successful learning regions should have an ability to ‘learn ahead’ – a collective capability of regions ‘not so much to adapt to change as to anticipate it and change accordingly’. We suggest the need to promote and support further the use of regional Foresight initiatives (through the Structural Funds and other means). Experimentation and ‘learning by doing’, or ‘learning by innovating’, are stressed as being at least as important as more structured means of diffusing ‘best practice’ in relation to ICT usage. Experimentation implies taking increased risks so regions have to be willing and able to (learn to) encourage experimentation and ‘learning by doing’. This, in turn, means that public funding regimes have to become less risk-averse and more tolerant of failure – seeing failure as a further opportunity to learn. Following the demise of Innovative Actions as a platform for experimentation within the framework of the Structural Funds, it has been said that experimentation has now been mainstreamed. It will be necessary to observe carefully whether this will indeed prove to be the case. 21 Summary Findings and Policy Recommendations » We suggest that perhaps there needs to be a tension between things happening in the mainstream and those people who operate ‘at the margins’. We believe there needs to be a degree of creative tension and room for creativity which cannot always be accommodated in the mainstream. The question is how quickly the mainstream can pick up (capitalise) on these, potentially releasing creative resource for further experimentation. Since co-funding is likely to come from mainstream institutions, a degree of tolerance of chaos (and failure) may be required. » support for such efforts but such funding can be seen as an investment in regional learning. Leadership (or more precisely, the leader-follower dynamic) is our fourth clue and an important dimension of a region’s social capital – especially political leadership. Collective leadership (and leadership teams) in particular appears to be important. We see regional development as a particularly complex multi-agency change problem which necessitates effective leadership. » Personal leadership, particularly political leadership, is clearly important. Proponents of the information society and believers in transformational change through ICTs need to form ‘coalitions of the willing’. Proponents in leadership positions must go beyond charismatic leadership to create the institutional structures to take the agenda forward. » In LFRs especially, ‘private institutions are often thin on the ground’, and public sector agencies ‘invariably have to assume the leading role in animating economic development’17. This leads us to suggest the need for public sector bodies to be more willing to exercise a more dynamic leadership role in the absence of alternatives (from the private or third sectors). Even so, a loose form of governance (that is inclusive) is likely to produce the best results. » In some regions/small nations a political leader (often a minister) has been identified with the ICT/innovation/ transformation portfolio and a central (cross-cutting) department has evolved. This provides not only stability for long-term action, but also a focus for integrated ‘multi-agency change’ across the region as a whole. Regions with this type of approach and central resource (Wales, Estonia, Latvia are good examples) seem able to make more fundamental and longerlasting progress than those which rely on more ad hoc structural arrangements. » Openness: Regions that perform better have openness in their institutional environment which makes them receptive to new ideas and better able to adapt and to be leaders in innovation processes. What seems important here is that a region is both open to the flows of people, 17 » Slavish adherence to good practice imported from elsewhere should be avoided. The good practices of others should be a source of (accelerated) learning without having to take the same first-mover risks – but such experiences need to be carefully adapted to the specific content and environment into which they are being ‘imported’. » Learning is a collective and interactive process occurring between firms, between firms and consumers and between firms and other public and private institutions. Learning by doing is probably the most important kind of learning for transformational use of ICT and this kind of learning is arguably best instituted at a local or regional level. Consequently, it can be argued that the region is the most appropriate level for the transformation towards the ‘learning economy’ or ‘knowledge society’. » Once more, it may be necessary for regions to develop new (additional) ‘structures’ or mechanisms to facilitate regional learning. In the context of specific projects, there is a case for earmarking some of the funds for reflection and learning and for the codification (documentation) of that learning so that others can share the experience and the knowledge that comes from it. Too often, those who create innovation and generate good practices are too busy with their next project to devote time to communicating with and ‘educating’ others (e.g. through documentation and other means). » At a regional level, difficulties tend to be experienced in engaging both SMEs and other end users (the beneficiaries of many ICT projects) – a tendency confirmed by our 12 case study regions. If possible, regions have to develop ways to overcome these problems in order to ensure (a) that policies are relevant to the needs of SMEs and (b) that the real (as opposed to imagined) needs of end users are addressed. It may be necessary to modify funding systems to provide Morgan, K. (1998) Regional Renewal: The Development Agency as Animateur, pp. 229-252 in H. Halkier, M. Danson, and C. Damborg (Eds.), Regional Development Agencies in Europe. London: Jessica Kingsley Publishers/RSA. 22 technologies, ideas and images, but also capable of keeping a certain distance from that circulation, having the capacity to distinguish between those globalised ways of doing things and ‘the way we do things here.’ – thereby maintaining their regional identity. » These five clues relate to transformative uses of ICTs in rather complex ways. There is no simple chain of causality. What is more, each of these areas interacts with the others (see Figure 6). » We sum up by stating again that, often, “transformative” is understood as uses of ICT that open up substantially new ways for individuals, firms and governments to achieve their goals. In many cases, this refers to activities which would not have been possible without ICTs. » The European Commission is urged to emphasise among regions the need to adopt a process (or processes) with a view to developing a region-specific strategy and plan that takes account of that region’s specific endowments, opportunities, ambitions, values etc. This processual approach can not be reduced to a “How To …” guide but involves a variety of processes selected according to specific needs in specific contexts. » » » the generation of novel approaches to the organisation of activity (utilising the capacities of ICTs) to “do things in a new way” or to “do new things”. But it also implies co-ordinating (enrolling, mobilising) a large number of diverse actors – both to generate new ideas and to implement them through coordinated, but not centrally directed, action. The experience of RIS, RITTS and RISI may be useful in this context18. Contemporary ICT-based transformative change is always to some extent a multi-agency change process. Transformational change is about regional actors actively and collectively making sense of the potential and possibilities of new technologies. Phenomena such as eGovernment or eBusiness cannot be undertaken by state agencies or individual businesses alone; they require the co-ordinated adoption of technologies and standards by these actors and others (households, intermediaries, brokers, etc.). Given the time it takes to adapt to ICT and make the necessary complementary investments, it should not be surprising that the benefits of ICT may only emerge over time. Thus, regional approaches to transformative uses of ICT need to be strategically planned for the longer term. » “ICT provides a number of solutions to respond to the challenges that face the EU (ageing population, high expectations with regard to quality of life, in particular in healthcare, environmental and transportation concerns), and the leadership and technology expertise all remain available within Europe’s borders, but strong political leadership is needed at all levels: pan-European, Member State and regions.” 19 » We suggest that technological change, globalisation, climate change and other challenges conspire to make regional development more difficult and more complex. Figure 6: The Five Clues to transformative use of ICTs. Source: The authors. 18 2.7. transformative Use of ict as a collective action ProBlem » The model of transformative change through ICTs treats transformation as a particular kind of collective action problem. Transformation, it implies, is based on RIS/RIS+ (Regional Innovation Strategies) financed by DG Regional Policy and the RITTS projects (Regional Innovation and Technology Transfer Initiatives) financed by DG Enterprise were a regional experiment in which the European Commission, in a direct link with the regions, attempted to provide a response to regional needs for developing innovation capacity. In a similar fashion, the RISI (Regional Information Society Initiative) co-financed by DGs Regional Policy, Employment & Social Affairs, and Information Society supported 22 regions to develop strategies and action plans for information society development. 19 EU ICT Task Force Report, November 2006. 23 Summary Findings and Policy Recommendations Nothing will be gained, however, by oversimplification or by compartmentalisation (into vertical ‘silo’ domains). Regions need to plan their (overall) development in an integrated and strategic manner, concentrating above all on creating a favourable environment (framework conditions) in which ICTs will doubtless play an important role. » society and the new international division of labour, all of which are directly related to applications of ICT. Benchmarking is a central component of the Open Method of Coordination and, as such, has been an important policy tool for EU policy-making on information society related issues. Within the i2010 policy process, a revised set of benchmarking indicators was agreed upon in 2006 to measure progress towards achieving the i2010 goals21. However, with the exception of 3. Indicators and Benchmarking Processes » Indicator availability at the regional level is poor. This applies, in particular, to measures which go beyond simply “counting computers”. Unfortunately (though predictably) we do not have indicators of the transformative uses of ICTs (nor has any, to our knowledge, been devised). This problem is not specific to transformational uses of ICT or, indeed, to any uses of ICT. In fact, it tends to be a more general problem for regional policy makers. » The Commission itself has already noted: “For 20072013 an effort needs to be made to improve the capacity of the regions to reinforce a regional benchmarking culture “namely by the development and use of regional ICT indicators” . 20 distinguishing between Objective 1 (from 2007: “Convergence”) and 2 (“Regional Competitiveness & Employment”) regions – a regional breakdown which is of limited or no use for informing region’s policy-making, as it does not allow comparisons between NUTS regions within a country), these i2010 indicators do not address the regional level at all. » Any policy which attempts to foster transformative use of ICTs is currently penalised by the lack of an appropriate statistical base and this absence should be rectified as soon as possible. Statistical categorisations designed for an industrial society can not (sensibly) be used to benchmark or measure performance within a postindustrial, or towards a knowledge-based, society. It’s like trying to drive a car by using only the rear-view mirror. » The obvious first step must be to make progress towards availability of basic indicators of ICT uptake and use for all NUTS2 regions. Eurostat, National Statistical Institutes and the regions should join together and explore ways in which the data can be supplied in a cost-effective and reliable way. Financial support should be given to regions that participate in harmonised data collection (cf. Urban Audit). If needed, options should be explored to cut down the level of detail in other areas of statistical measurement to free up funds needed for the collection of information society statistics at regional level. » In addition, and as we have remarked in the previous chapter, there is a need to supplement the Lisbon/ i2010 focus on technology with a focus on institutions and cultural factors – on social infrastructure as well as on technological infrastructures and technical competencies. This has implications for what is funded and what is measured. Indicators need to be developed accordingly. In particular, we need to develop new indicators for benchmarking the capacity (of individuals, » The key role of the regional level for achieving progress towards the knowledge economy and society is widely acknowledged, and the EU spends significant funds on ICT-related investments in EU regions. It appears obvious that benchmarking as a tool for policy-making should be available for regional policy-makers as well as those at EU and Member State levels – and it is surprising that this is not the case. » It is equally unsurprising, therefore, that there is still a lot of confusion among decision-makers in EU regions about how they can best tap the full potential of ICTs and the so-called knowledge economy. Likewise, many regions are uncertain about how to react adequately to the challenges arising from recent paradigmatic developments such as globalisation, the network 20 Commission of the European Communities (CEC)(2007) ‘Growing Regions, Growing Europe. Fourth Report on Economic and Social Cohesion’, Luxembourg: Office for Official Publications of the European Communities - emphasis added. 2 21 See the report of the i2010 High Level Group, 2006. firms and regions) to ‘unlock’ the transformative potentials of ICTs. » Specific attention needs to be given to the role of “soft factors” such as social and networking capital and regional institutional capacity. We recommend that the current set of (i2010) ICT related indicators should be supplemented in order to better reflect the impact dimension of ICT use (including the nature, purpose and meaning of use) – rather than simply availability, access and extent of use. » We need to remain alert to and aware of the potentially negative sides of Internet use, such as for instance the increasing risk of a violation of data privacy: While the Internet is a handy way to participate and spread one’s opinion – and thereby is encouraging social participation – the traces which users leave in cyberspace can endanger their ability to subsequently control their data and may severely damage their reputation. This is just one example which highlights the need to analyse not only the extent to which a region exploits ICT’s potential, but also the level of awareness among citizens » level. Optimally, rather than devising indicators that try to use a common yardstick to measure success across all regions, indicators should be designed which relate performance to the region’s own regional development goals. It can be assumed that a benchmarking system is more likely to attract interest if it can be tailored to the specific development goals of a region, rather than to some overarching concepts such as i2010 which regional policy-makers may feel distanced from. For developing indicators on transformative use of ICT, it may be useful to distinguish between four dimensions, or layers, of ICT use: infrastructure, adoption, behaviour and meaning (see the figure below). While generic indicators can be developed and agreed upon for the infrastructure, adoption and behaviour layers, measurement of aspects in the top layer (“meaning”) need to take full account of the specific policy objectives and – often culturally influenced – deployment context of the country or region for which indicators are calculated. It may therefore be of limited use to try to benchmark across regions using statistical indicators of “meaning”. Figure 7: Outline of a benchmarking system that covers transformative uses of ICTs. Source: The authors. about risks related to upcoming, new applications of technology, and about ways how to protect themselves against them. » Once sufficiently within robust indicators level have been » There are other limits to the extent that onedimensional, quantitative indicators can be usefully applied for benchmarking as well. Regarding indicators of transformation, for example, we note that ‘more is not always better’. For example, a region will be more prone to change when there is a balance between closure (of regional actors that allows a closely knit cooperation structure) and their openness (to external knowledge 2 established national benchmarking systems, these should be explored to determine whether some of these need also be applied at regional Summary Findings and Policy Recommendations that prevents the region from falling into situations of lock-in and path dependency). Equally, a balance needs to be struck between hierarchy and markets; between cooperation and competition; between strong and loose ties; or between too little and too much in the case of ‘institutional thickness’. When designing benchmarking systems, care needs to be taken that such complexity is properly taken into account. » An additional issue concerns the need for further work on the creation and refinement of indicators for transformation of the society. Do we choose to define a threshold under which rather we just talk about a search for efficiency gains, a search for rationalisation and modernisation, and beyond which we really recognize a transformative effect? Moreover, building richer indicators would allow comparison of different regional approaches, different information society models, and the evolution of each along with distinct sets of parameters. » We have, therefore, to ensure suitable choice and selection of indicators – but also to ensure that policy makers understand their use and limitations. In particular, this implies a move away from one-directional indicators. It also implies that we need to advance from agreeing on benchmarking systems towards the establishment of mechanisms for benchlearning. This describes a process in which statistical experts, researchers and policy-makers from different countries/regions get together to make full sense of benchmarking data, to fully understand differences reflected in the data, and to discuss ways in which experiences from one country/ region can be transferred to others. » The Community Support Guidelines state that “Actions need to be based on context indicators related to the existing economic structure (including industrial specialisation; level of economic development; quality of connectivity to ICTs and potential synergies between regional poles of economic activity). The identification of regional needs should take into account existing Community initiatives in favour of ICTs, in particular the i2010 — a European Information Society for growth and employment.” We conclude that there is a need to supplement in an economical manner the existing (i2010) benchmarking process and indicator set so as to meet the specific needs of regional policy making. » Good, or at least reasonable, indicators exist for the Lisbon goals (growth and competitiveness, social 2 22 cohesion, sustainability, jobs and human capital formation, good governance). These indicators are, however, of little assistance to policy makers at regional, national or European level as they are too ‘causally distant’ from ICT-enabled transformative change to assist in making investment or regulatory decisions. As a result they ‘arrive too late’ to assist decision makers and it is difficult to disentangle the exact causal contributions of ICT-based transformative change. » Policy makers need more causally ‘proximate’ indicators of ICT-based transformative change if they are to be able to identify the most promising opportunities for investment. That is, they need ‘leading indicators’. » A way to measure transformational use is to explore whether ICT applications have provided the opportunity to do things which have been impossible before, and which are of relevance to individuals, firms and governments to achieve their goals. » Promising candidates for leading indicators on transformational use of ICT can be grouped using three concepts which underlie the notion of a regional innovation culture and the capacity for ICT-enabled, transformative change: • • • network creation, continuous learning and innovation, and participation and empowerment. These concepts need to guide the development of appropriate (supplementary) indicators of ICT-relation transformational change. » Some of these variables have been taken up by the UNDERSTAND project which developed harmonised questionnaires for application 22 in regional ICT observatories across Europe . We recommend that the results of this project should be more widely promoted and some means found to support its continued adoption and take-up by additional regions. » Future research and implementation projects in the area should focus, in particular, on “benchlearning” (a point that emerged strongly at the eris@ 2008 conference) rather than on data generation for indicator building or classical benchmarking. A follow-up project See UNDERSTAND 2006, http://www.understand-eu.net to UNDERSTAND could demonstrate how the data collected via harmonised regional observatories can be utilised for the purpose of benchlearning. It would need to suggest a benchlearning methodology, which could then be agreed upon by Member States and adopted on a wider scale. » A possible approach towards achieving regionallevel indicators would be to simply press for all i2010 indicators also to be available at the level of NUTS1 or even NUTS2 level. However, we recognise that the cost makes this impractical. A more selective approach is required that focuses on a limited number of key indicators of transformative uses of ICT which can be operationalised. In particular, effort should be concentrated on assessment of: • • Which i2010 indicators are of particular importance for transformative change? Are there country-level indicators which need to be modified in order to take account of the specific properties of regions, and of the specific requirements of regional policy-makers? • Are there issues of strong relevance for regional policy-making - which highlight the role of “soft” issues as influencing transformational uses of ICT - which are not at all covered by the i2010 indicators? » An important way through which a benchmarking system provides value is by offering time-series data, especially if these are available across regions to allow comparisons. This means that the investment in a benchmarking system bears its biggest fruits in the medium term rather than the short term. To avoid this leading to under-investment in indicator collection, we recommend the Commission to seek ways to find funds that can be provided to kick-start the process. » There are two main criteria for assessing the extent to which an indicator is of particular relevance for regional (as opposed to national) policy-making: Does the indicator measure a construct or development: (a) which is of direct relevance for regional economic and/ or social development, and (b) which can be (directly or indirectly) influenced by regional policy-makers. When applied to, for example, the indicators fed by the Eurostat harmonised questionnaires on ICT usage, it appears that quite a few of the commonly used measures may be of limited value for regional policy-making. A small » » set of core indicators with direct relevance to regional development should be defined. From a practical perspective, regions require a small number of high-value indicators which allow them to measure their progress over time and to compare (“benchmark”) themselves against other regions, thereby identifying their main strengths and weaknesses – rather than being faced with either the expense of setting up observatories or doing nothing at all. We suggest that indicators should be non-redundant, i.e. they should not correlate strongly with similar indicators in the list – since using all of them would not add much value to the benchmarking purposes, but drive up costs. Of course, regions are free to set up more comprehensive statistical data sets at their own cost if they feel the need for them. 4. Policy Making at the Regional Level 4.1. regions in a gloBal context » The Community Support Guidelines state that “The dissemination of ICT across the Union’s economy represents a major lever for improving both productivity levels and the competitiveness of regions. The dissemination of ICT also encourages the re-organisation of production methods and the emergence of new business and private services. The efficient and effective delivery of public services — in particular e-government and e-health — has a significant potential for economic growth and for enabling new services. Technology dissemination can contribute to regional development by favouring the creation and growth of poles of excellence in ICT activities and developing connectivity and networking among enterprises and SMEs in particular.” It goes on to say that “Policy measures should therefore focus on connectivity. This includes improving innovation support services for SMEs with the particular objective of boosting technology transfer between research institutions and enterprises. It also requires the development of the skills needed in the knowledge economy and to develop content through the delivery of applications and services (such as e-government, e-business, e-learning and e-health), which provide 2 Summary Findings and Policy Recommendations interesting alternatives to other, often more costly, service delivery models. …. It is therefore important that an appropriate broadband communication infrastructure be available across the Union at an accessible cost.” » While agreeing that connectivity is a necessary baseline condition, it is not a sufficient condition to ensure transformative uses of ICT. We suggest that a modified policy statement affirming the importance of connectivity while placing new (additional) stress on the importance of measures to ensure that the most effective (transformational) uses are made of ICT would encourage regions to think more carefully about their choices of ICT investments. » Of course, some successful regions possess a regional culture that is already conducive to entrepreneurialism, innovation, learning and knowledge creation. On the other hand, some Less Favoured Regions (LFRs), despite strong institutional presence, have unsuitable (rigid) cultures that prohibit organisational, policy or economic innovations. The resulting ‘lock-in’23 basically reflects an inability of such regions to ‘forget’ the old trajectories and to ‘learn’ new developmental paths. » A more subtle version of this argument is offered by Todtling and Trippl 24 to some extent to be bound together. We include, for example, social, environmental, spatial, cultural and other outcomes but argue that achieving progress in these domains is to some degree dependent on economic success. » These driving forces are not ones that regions can simply choose to ignore. It has been said that you can learn to surf the tide of change but if you choose to ignore it, then at best you end up swimming against the tide, get tossed about helplessly or, at worst, may be swamped and drown. » Whilst competition is growing, so too very often (in the knowledge economy) are the benefits of cooperation and collaboration. The ability to combine competition with cooperation is becoming an important developmental attribute (for individuals, firms and regions). For example, regions often compete with each other quite directly for trade, for jobs, for EU funding etc. – but they are often also members of the same European networks through which they engage in joint learning by sharing their good practices and by collaborating in inter-regional projects. » Transition to the knowledge-based economy and society will not happen of its own volition – many actors have to be mobilised and this could be initiated at EU, Member State or regional level. » More specifically, as we have argued earlier, regions need to take stock of and (if necessary) enhance their social capital and associated soft infrastructures, in large part because it is these soft infrastructures that underpin effective co-operation. They need to understand their regional innovation culture and then to shape their strategies and action plans accordingly – taking adequate account of their endowments (strengths and weaknesses) and also of the opportunities and threats with which they are confronted. » Bearing in mind that each region is different (we would suggest, more strongly, unique), it follows that each must adopt a strategy and plan that is specific to itself and its own peculiar circumstances and context(s). There is no one-size-fits-all solution – nor even a straightforward methodological check-list of what precisely to do. At best, there is a series of issues to be addressed and a set of collective social attributes to be (further) developed – relating to our five ‘clues’ networking, visions, learning, leadership and openness. who argue that key challenges differ according to type of region: rural and sparsely populated regions tend to suffer from institutional thinness; older industrial regions tend to suffer from lock-in; and metropolitan regions tend to be affected by fragmentation. Case study research in TRANSFORM confirmed the existence of these differences. Policy response, therefore, needs to take full account of the different types of innovation-related challenges of regions rather than to offer generic solutions. » Our concern with transformational uses of ICTs rests equally with the non-economic benefits of ICTs as much as with the purely economic. And yet these tend 23 Grabher, G. (1993) ‘The Weakness of Strong Ties: The Lock-in of Regional Development in the Ruhr Area’, in Grabher, G. (Ed.) ‘The Embedded Firm’, London: Routledge, pp. 255-278. 24 Tödtling, F., and Trippl, M. (2004) ‘One size fits all? : Towards a differentiated policy approach with respect to regional innovation systems’, SRE - Discussion Papers / Department of Urban and Regional Development, Nr. 2004/01, Draft Version, Paper prepared for the conference “Regionalization of Innovation Policy – Options and Experiences”, German Institute of Economic Research (DIW Berlin), June 4-5. [Available at http://epub.wu-wien.ac.at/dyn/ virlib/wp/mediate/epub-wu-01_749.pdf?ID=epub-wu-01_749] 2 4.2. sUggestions for eU Policy interventions » We have earlier mentioned that successful transformational development relies upon the interaction of three types of network: ideas, expertise and resource networks. We suggest that the EU (and the European Commission in particular) can offer all three – ideas, funding/resources, as well as technical expertise and know-how. » In recent times, we have seen at EU level growing subsidiarity and simplification (in policy and programme terms) which has resulted in less intervention or support (which term you prefer depends on your viewpoint). » Without doubt, the European Commission has » more challenging framework for implementing information society or knowledge economy agendas (than is the case in EU-15) and this should be reflected in the policy approach. Simply put, we consider that the EC needs to recognise that much more effort, money (and time) will need to be channelled into New Member States and their regions to bridge the digital gap and promote the knowledge economy there. The accumulated (and sometimes codified) experience and expertise of the RIS, RITTS and RISI initiatives – but especially the underlying processes – could be put to good use in encouraging and supporting regions to plan and to implement transformational uses of ICT. Of course, there are differences but any such new initiative would (should) not be starting from scratch. » In the absence of an appropriate specific funding instrument (since Innovative Actions have now been abandoned – the official line is that experimentation is now mainstreamed), we suggest that the EC could invite (Objective 1 and 2) regions to use their Regional Operational Programme (ROP) funds to finance a joint inter-regional learning platform and programme (i.e. mainly at their own expense). The EC’s contribution could, in this case, be limited to providing (and funding) the coordination mechanisms as well as technical and domain-specific expertise. » » Raising awareness is important, but this needs to be accompanied by adequate financial resources. Again, the problem is perhaps the most acute in the New Member State regions. In the New Member States, regional authorities in their current form and shape are often relatively new creations and, with limited budgets, they are often struggling to run basic regional government functions. They have very limited resources to embark on ‘grand’ information society and ICT initiatives. EU funding will be critical in pushing the information society/ICT agenda (and the broader ‘knowledge economy’ agenda) forward. » The social and economic transformation that has occurred in the New Member States creates a much » We recommend also that the EC gives consideration to staging a major conference (perhaps in 2009 – The EU Year of Creativity & Innovation) on the theme of Regional Transformative Uses of ICT including an exhibition of relevant ICT projects and schemes with awards for the best (most interesting/useful of these projects/schemes). High profile activities of this kind are already proven in terms of attracting the interest and participation of regions. 25 significant experience of providing support systems for relevant aspects of regional development derived from the earlier Innovative Actions programme (199499) . We refer specifically to RIS, RITTS and RISI 25 – all of which supported regions to adopt a strategic approach to issues of innovation, technology transfer and information society development. In addition to financial resources, significant expertise was made available through methodology support workshops, network arrangements, exchange of practices, peer reviews etc. Without much doubt, participation in these initiatives raised awareness of the issues and possibilities and considerably added to the social capital and development capacity of the participating regions. Beyond this, the EC can still provide useful interventions and support. Importantly, these include providing a clear message about the importance of transformational uses of ICT and how this fits with development of the knowledge-based society and achieving the Lisbon goals. In addition, the EC could commission and publish documentation (or other tools/media) to help regions develop their social infrastructure in appropriate ways. The 2000-06 Innovative Actions programme is subject still to evaluation but the Regional Innovative Actions Programmes (RIAPs) appear to have been much less successful than the earlier IRISI and RISI programmes. They were project based with fewer opportunities for strategic intervention or for capacity building. Moreover, the EC could additionally consider the creation of a web portal to provide follow-up networking activities and to maintain and extend the virtual community generated by such a conference. 2 Summary Findings and Policy Recommendations » Finally, there are a range of other ‘instruments’ and mechanisms that might be considered as means of supporting regions in their efforts to plan and deliver transformative uses of ICT as they strive to shift to the knowledge-based society. These include, for example, training systems including eLearning and ‘summer schools’, the development of a repository of good practices and the preparation of a good practice guide(s), as well as support for selective networking activities through (for example) the CIP and Regions for Economic Change. Other financial instruments may be available to help fund such mechanisms. » of such an assessment, we recommend regions should develop a strategy and action plan – with the important proviso, of course, that its development involves all main stakeholders and secures their commitment to the plan. The strategy and action plan need to be framed within the context of, and be consistent with, higherlevel plans (e.g. the wider regional development plan and, where relevant, the ROP). Openness is a vital part of networking and regions should create ways to ensure they are open to new ideas, new knowledge, new technologies etc. Part of the solution may reside in having an open attitude with respect to inward migration, business networks, and political relationships and in embracing ideas from elsewhere, not adopting them slavishly, but interpreting them in the particular regional context. » Institutionally-led networks that do not have enthusiastic support at the individual level are likely to generate a rather dull and slow following of “best practice” (without questioning who it is best for). On the other hand, a pure “hactivist” approach (based on individual enthusiasts) may ‘fizz’ and be interesting but is likely to remain disconnected from mainstream institutions and, thus, ultimately lack weight and impact – so tending to get stuck in perpetual piloting. Ideally, a region needs to create and/or participate in networks which strike an appropriate balance between the two. » Developing shared visions can be difficult and may take time – but the time taken will pay off. The process may begin with an awareness-raising campaign which helps to establish regional identity, identify who the key actors might be, as well as raising debate about issues of regional development in general (the end goals) and transformative uses of ICT in particular (and their potential benefits). The ultimate objective is to generate shared perceptions about the priorities for development and to secure the commitment of the key actors to them. 4.3. sUggestions for regional self-helP » There are many steps and actions that regions can follow to build their social capital and associated soft infrastructure to help them to address better exploitation of transformative uses of ICT and thus help them towards becoming knowledge-based societies. We highlight here those that we consider to be the most important. » We have emphasised the importance, as we see it, of regional innovation culture in determining the capacity to exploit and benefit from transformative uses of ICT at a regional level. We have argued the need for appropriate soft infrastructure and this could be said to include the regional innovation system. Such a system needs to be well-defined, shaped according to the region’s special context and circumstances, and understood by regional development policy makers and practitioners. » Bringing together business interests, universities and research laboratories, and the public sector in appropriate coalitions or networks (the ‘Triple-Helix’) is one such manifestation of a regional innovation system. It highlights the need to ensure that ideas networks, expertise networks and resource networks have access to each other and are encourages to interact. » However, knowledge-acquisition, -creation, and -exploitation call for participation in wider networks in which social ties are much looser (as well potentially as less certain, more difficult and more expensive). Taken together, we recommend that regions take stock (carry out an audit) of the various networks in which they participate and seek to map the ways they inter-relate and the expertise domains that they cover. In the light of such analysis, a region can begin to make better sense of what it has and where the gaps might be. On the basis 30 » In some regions there may be a need to step up efforts to raise awareness among regional policy makers of the importance of the information society and ICT agendas for regional development. This problem is probably most acute in regions of the New Member States where the information society/ICT agenda is relatively new at the national level, let alone at regional level. Bold mechanisms for learning from old (EU-15) Member States and regions should be established to short-circuit the learning process and accelerate development. » In addition to a stock-taking audit of networking activities, regions should also undertake some assessment of their situation in respect of assets and challenges, strengths and weaknesses, opportunities and threats etc. Moreover, it may be helpful to carry out a ‘mapping’ of the key players (individuals, companies, institutions, administrations etc) within the region who could contribute to the overall strategy and plan – as well as evaluating the nature and extent of their influence. » Developing shared visions and building support (followership) may be relatively easy in the initial stages but followers will want to see some signs of progress or, at the very least, concrete evidence that the plan will bring benefits. We suggest the need for some careful research as well as planning for some early success stories (demonstration projects) so as to solidify support behind the initiative. » Leadership is more difficult to deal with but again we should refer more precisely to the leader-follower dynamic – there could be too many leaders and not enough followers! Even so, a region either has good leaders or it doesn’t. If it doesn’t, then the region needs over time to try to develop individuals to assume such roles (grooming) or else to use the (labour) market place to buy someone in (head-hunting). Neither scenario is ideal: one is slow to bring results and the other risks failing to understand the region or failing to deliver a commitment to it. On the other hand, we advocate the importance of collective leadership and its usefulness in situations in which individual leadership may be absent. » Provided that leaders exist, then selection criteria need to include charisma, ability to influence, to persuade and to open doors, as well as having an understanding of the issues and an ability to convey an enthusiasm for them and the initiative. » In particular, the public sector must be willing (where necessary) to offer strong dynamic leadership – but this should be tempered with an inclusive, open-governance approach to decision making. Bearing in mind that initiatives to bring about transformative uses of ICT are seen as collective action problems, it will pay to reward participation with shared responsibility – thus forming a part of a ‘collective leadership’ approach. » Our findings suggest that the public sector must embrace the role of coordinator and driver of information society policy ‘through the region’, but should, of course, allow and encourage other actors to become involved. This would be an iterative and continuing process, allowing feedback loops. This would imply: • the political will to do so [we don’t have policy prescriptions for how to arrive at this, but creating, supporting and maintain a ‘community of believers’ is important]. • establishing a forum (such as the e-forum in South Yorkshire) both to continually examine and update what is happening in the region, for example: how this can be related to other priorities in the region (and concomitant resources be drawn upon), is there overlap between project and activities in the region – can these be drawn together…. • processes to bring other actors into the forum. » Whilst the role and contributions of individuals to networks and, especially, to leadership are crucial, we emphasise the collective action nature of bringing about transformative change through ICT. » According to a collective action perspective, the regional level is the optimal level to get all relevant actors involved, trying to solve, conciliate and coordinate their needs and expectations in a process to develop consensus about priorities and formulation of specific strategic plans. This perspective requires long-term policies, as independent as possible of the local electoral cycle. » Public sector leadership will thus demand the creation of ‘soft’ governance infrastructures, making them inclusive for the goals of regional development. A related point is the need to create and mobilise a ‘coalition of the willing’, which follows a bottom-up or top-down approach depending on the particularities of the region in question – in any case, it involves making links between ‘ideas networks’, ‘expert networks’ and ‘resource networks’. » Regardless of the degree of autonomy/self-government capabilities of each region (and likely of more importance in those ‘regions’ where formal powers and competences are not well consolidated), the success of information society related programmes and/or projects seems to be linked to the ability to achieve widespread mobilization and continuous motivation of 31 Summary Findings and Policy Recommendations actors – ‘deliverers’ and ‘end-users/beneficiaries’. This collective mobilization is, among other things, clearly linked to the ability to communicate clear messages by those that are recognized (within each region’s own governance arrangements) as the legitimate actors to ask for the commitment of others – typically, although not necessarily exclusively, elected politicians. » Learning is perhaps the most important part of building regional social capital. Indeed, at the end of the day, a region’s development (including its capacity to use ICTs for transformative change) rests mainly on (the quality of) its people. But learning needs to be seen as continuous, both for individuals (lifelong learning) and for the region as a whole (collective learning). Specific mechanisms will need to be constructed to facilitate collective learning. These can include: building resources into projects to allow proper reflection, evaluation and dissemination of lessons learned; support for network activities including meetings and electronic communication (e.g. web sites if appropriate); workshop, seminars, conferences, and other face-to-face events, etc. » We have said that initiatives which induce and encourage transformative uses of ICT will not simply happen. They call for explicit efforts of mobilisation and, for this reason, in addition to agreeing overall leadership responsibilities, we recommend the creation of a regional forum or steering committee26 in which the main actors are represented. The steering committee should be charged with overall responsibility for the initiative, its progress and direction. » We advocate also the setting up of a secretariat (or management unit or similar) to take care of the day-today organisational requirements and to help maintain progress. This secretariat should have an initiative director as well as one or two other staff who can take care of promotion, awareness-raising, arranging meetings, support for the steering committee etc. » There is now an emerging literature which applies the concept of social capital to the regional ‘knowledge economy’, where innovation, and especially » endogenously driven innovation, is regarded as crucial » » » to competitiveness. We suggest the need for regions to be familiar with such literature and the corresponding need, from time to time, to update their strategies, plans and programmes (including their ROP). ‘Transforming peripheral European regions into dynamic “learning regions” remains a formidable challenge’. Richard Florida27 argues that creativity has become the critical economic resource and that economic development and prosperity, at national, regional and urban levels is now dependent on developing, but more so attracting, the creative class. This school of thought argues that regions need to retain their graduates and attract new ones, to provide an attractive environment that will draw creative people to the region, etc. Thus, it is argued that regions have to learn how to “foster talent, technology and tolerance”. Florida, is, of course, chiefly concerned with the economic sphere and this school of thought remains hotly contested. Similar creativity must be applied in the sphere of social policy (and links between creatives and creativity in the two broad policy areas must also be developed to create synergies). Florida might be accused of being rather elitist in his focus. In our view, creativity should be seen as a resource which is present at all levels of society and needs to be tapped at all levels if we are to have a productive and cohesive Europe of the regions. Unlocking this potential may, inter alia, contribute to the transformative use of ICTs and, at the same time, ICTs could contribute to the unlocking of some of this potential. Regions are recommended to make fullest use of those opportunities for sharing good practices that already exist. The ‘not invented here’ syndrome appears to have a substantial number of adherents but this only results in the ‘re-inventing of the wheel’ thus reproducing avoiding mistakes of others and wasting scarce resources on the one hand, and failing to take advantage of good practices that can be adapted and adopted thereby accelerating development at a lower cost on the other hand. In the context of i2010 and its third (eInclusion pillar), we recommend regions to make full use of the European Broadband Portal (www.broadband-europe.eu) 26 The steering committee, project director and management unit in the RISI initiative (1996-98) were called the ‘regional motors’. See the IANIS Guide to Good Practice on Regional Information Society Initiatives, G.Hughes (Ed.), Chap 2, Brussels, September 2004 – available at www.ianis.net (go to the Competence Centre \ IANIS Guides). 32 established by the Commission (DG Information Society 27 Florida, R. (2002) ‘The Rise of the Creative Class’, New York: Basic Books. & Media in cooperation with DGs AGRI, REGIO and COMP) as a forum for the exchange of good practices and information relating to broadband projects and strategies in under-served territories. Moreover, through inter-regional cooperation, there are possible additional opportunities for demand aggregation and for generating levels of demand that may be more viable in economic and technology terms (e.g. satellite) or that could yield a stronger negotiating position with suppliers. » Regions should work hard to maintain a coherent and strategic approach to their information and knowledge society development efforts. Failure to do so results in fragmentation and this reduces greatly their value for users at increased cost. There is a need to encourage the introduction of shared yet flexible ICT standards that would be commonly accepted by the authorities at all levels of governance. » » enterprises will depend upon more than nationalistic jingoism. They need to be involved, given a role, and some responsibility. Most know it is in their interests – and the interest of their community, locality and region – to get involved. The information and knowledge society elements of Lisbon are supported in policy terms by i2010. This policy appears to inspire only a very limited followership. It deals predominantly with very technical issues (IPR, DRMs, security and so on). Important as these are, they inspire little interest from the average citizen or organisation. Even its label is rather technocratic in comparison with its predecessor (eEurope) with which many people and organisations – and regions in particular - were able to easily identify. Moreover, in mid-2008, i2010 can hardly be expected to inspire efforts towards a longer-run more strategic set of objectives. If Europe’s enterprises, administrations 4.4. overall ... the fUtUre … lisBon 2020? » The information society is not just a matter of technology but rather a new socio-technical configuration that can lead to development and growth. From this perspective, it remains of vital importance to maintain a focus on the ends, rather than on the means. ICTs in themselves have no intrinsic value – we value them for the things we can do and achieve with them. Clearly, the more we can do with them, the more we will value them. For this reason, there is a special interest in the transformative uses of ICT. » There is a general consensus that the Lisbon goals are appropriate goals and that we seek to achieve them in a context characterised by what is called the ‘European Model’. However, if we can agree that there’s nothing much wrong with the strategy, it is clear that there is a problem of implementation. » What began in 2000 as a wake-up call to Europe and Europeans, to recognise and face up to major challenges (globalisation, competition, technological development, environmental changes, demographic challenges and so on) is now surrounded by a sense of apologia. One of the problems, in our view, has been the role accorded to Member States at the expense of the local and regional levels. Most people and enterprises exist in mostly localities and regions – they spend most of their time in these places. Mobilising these people and » » » and citizens are to be motivated and mobilised to renew their efforts – in a collaborative spirit – then our main information society policy instrument needs to be more forward-looking, more proactive, more inspiring, and more relevant to everyday needs and priorities. At the very least, we should be talking about i2020 (or Lisbon 2020). This raises the issue of time itself as an important factor which emerges from our study. Transformation is not an immediate process but rather one that takes time and planning horizons need to understand and respect that. Moreover, regions have different starting points in time (particularly with regions of the regions of the New Member States). There is little doubt that in competitive development terms, and in terms of inclusion and quality of life issues, the goal is the knowledge society. The problems surround the task of getting there. At present, Europe’s economic progress in this direction appears slow by comparison with our major competitors, both traditional and newly emerging. We suggest that our ambitions are too low and our progress too slow – else we should accept that social and other non-economic objectives may be holding back Europe’s ability to compete in purely economic terms. A new urgency and a new drive is called for – in which we see beyond the technology itself to the uses and 33 Summary Findings and Policy Recommendations impacts we know ICTs can deliver (provided we organise ourselves to make them happen). i2010 talks of the challenges posed by these technologies (for example, new concerns about privacy for users in social networks etc.). Of course, technology, technological changes, and the impacts of technology will always pose challenges and difficulties. But we should instead focus on the new opportunities these technologies can offer us and society – to bring about transformational changes. » Lisbon 2020 should set out the new global challenges and the new opportunities, focusing on building an equitable, inclusive, competitive knowledge society - inviting all sectors, at all levels to contribute to its achievement. Of course, big ambitions call for big policies, and these in turn require a big effort if their aims are to be achieved. » First, we need to know (better) where are going (beyond 2010). Second, we need to know how we are going to get there and who is going to be doing the doing. Third, we need to be able to measure our progress – using reliable and relevant metrics. Fourth, our progress does not take place in isolation. We need to be able to benchmark against the best-in-class (which, here, means best in the world). » There is a risk of inaction and inertia, of complacency and failure. In part, these stem from concerns (sometimes legitimate) with subsidiarity and simplification of policy and programmes. Unfortunately, we live in a complex (and increasingly complex) world. Although, for purposes of study and understanding, we need often to simplify things, ultimately, we have to manage the complexity – and be able to turn it to our advantage. In an ICT-enabled knowledge society, we should (and need to) be able to handle that complexity. » Competitiveness, growth and jobs are key European economic objectives. Our ability to be successful in these terms depends to a considerable extent on our many, many SMEs. It is well known, and our case study regions have confirmed, that it is difficult to engage and mobilise this (large, dispersed) sector of the economy. But, it employs many people and has significantly greater scope for growth (of wealth and jobs) than our relatively few large enterprises. » Many SMEs have very limited capacity to do more than they are already doing – trying to survive on a day-to-day 3 basis. Getting many of them to think about innovation, let alone about transformative uses of ICT, within a regional (or European) strategic framework, seems highly unlikely. And yet, that is a critical task. At all levels of government (local, regional, national and European), there needs to be a concerted and collaborative effort to make it happen. » Of course, the propensity for innovation, development and growth of SMEs varies – and this needs to be taken into account in policies and programmes. We shall probably need to be selective about the SMEs we try to work with but, in any event, we have to find ways to overcome their reservations, concerns and limitations. We could begin by focussing more on their needs, by meeting promptly and in full, the real costs of their engagement, and by ensuring that they can more quickly get resultant, innovative services, products and processes to market. The implication of the way we have thought about transformative use of ICT is that we should stop thinking about encouraging discrete, isolated SMEs to use ICTs and rather target the wider business ecology – supply chains, clusters and other networks – rather than individual firms. » Regions and their diversity offer an important opportunity for Europe and the Lisbon Agenda. Regions need relatively little encouragement to contribute towards the Lisbon goals but their voice needs to be better heard and suitable support mechanisms should be created. We believe that an active role for the regions in delivering transformation in the context of i2010 is central. The integrating mechanisms, the networks and the resources do not exist at other levels. Without the regions, Europe’s agenda on transformation through ICT will not be delivered. 5. Annex has delineated three main ‘channels’ through which ICTs have a beneficial impact: » First, efficiencies are realised through rapid technological progress in the production of ICT goods and services in ICT producing industries. Thus, the ICT sector is a driver of productivity growth for the whole economy. Efficiency gains in the ICT sector are also reflected in the fast price declines of ICT products. » Second, investments in ICTs provide more capital for workers, which raise their productivity. » Third, greater use of ICTs in all sectors in the economy helps firms to increase their efficiency. The central concern of the TRANSFORM project is with the last of these questions – the use of ICTs and, more specifically, with qualitative as well as quantitative variation in this factor – the kind of uses that are made of the technologies as well as the volumes of users and the intensity of usage. The i2010 group states baldly that ‘the EU invests less in ICTs, the ICT sector is less efficient, and the performance has been disappointing in ICT-using sectors’. For us, it is this last issue that is of paradigmatic importance – the performance of the ICT using sectors and their capacity to effectively utilise ICTs. For us, the ICT-using sectors of society are not just firms but also households, government agencies and other organisational forms (the third sector). It has been apparent for some time that the simple act of adopting new Information and Communication Technologies (ICTs) does not, on its own, lead to the kinds of beneficial outcomes which have been claimed for these technologies. Rather, the beneficial outcomes only flow where there has been significant transformative use of these technologies. To use these technologies for transformation requires a wider set of changes to structures, processes and practices. These changes, in turn rest on changes in attitudes, mindsets and values. These wider set of changes are sometimes presented as necessary to ‘unlock’ or ‘unleash’ the potential of ICTs. Some individuals, firms, public bodies and regions appear to be better at ‘unlocking’ that potential than others. One aim of TRANSFORM is to develop new indicators for benchmarking this capacity to ‘unlock’ ICTs. The second objective of the project, and the one that is centrally addressed here, is to use the notion of a Regional Innovation Culture to explore the organisational, social and cultural factors that might underpin the capacity to make transformative use of ICTs at the regional level. 3 5 .1. enaBling transformative Use of icts – the role of regional innovation cUltUre 5.1.1. The Problematic: Why Some Regions Get More out of Their Technologies than Others? Information and communication technologies are a powerful driver of growth and employment. A quarter of EU GDP growth and 40% of productivity growth are due to ICT. Differences in economic performances between industrialised countries are largely explained by the level of ICT investment, research, and use, and by the competitiveness of information society and media industries. ICT services, skills, media and content are a growing part of the economy and society.28 How can we foster transformative use of ICTs in Europe’s regions? What indicators can we use to benchmark current transformative activity in the regions? What evidence can we reliably use to guide policy? If we take the quotation from the European Commission above as a statement of fact, then two important questions emerge immediately. » Can we also say that substantial portions of GDP and productivity growth at the regional level are also explained by ‘ICT investment, research and use, and by the competitiveness of information society and media industries’? And, more importantly here: » What is it that determines ‘ICT investment, research and use’, and ‘the competitiveness of information society and media industries’ at the regional level? We need to note here that growth and productivity increases are related a range of ICT related factors – ICT investment, ICT research and ICT use together with the competitiveness of ICT-intensive ‘information society’ and media industries. The i2010 High Level Expert Group29, reviewing the evidence on the economic impact of ICTs 28 Commission of the European Communities (CEC) (2005) ‘i2010 – A European Information Society for Growth and Employment’, COM(2005) 229 final. 29 i2010 High Level Expert Group (2006) ‘The economic impact of ICT: evidence and questions’, memo, April 20. Summary Findings and Policy Recommendations Figure 8: Overview of TRANSFORM Workpackage 1. Source: the Authors. Figure 8 provides a schematic of the main elements of the Workpackage. until very recently. ICT usage, while present in most accounts of regional development in a knowledge-based economy and society, is seldom placed centre stage and made the focus of explanation. Tantalising references to 5.1.2. The Literature The TRANSFORM project faced the challenge of sophisticated ICT usage in these bodies of literature, are never fully explored or even described. This may be, in part, because of the enormous range and flexibility of many contemporary ICTs, which makes generalisations about the technologies themselves, let alone their many and various uses, extremely difficult. In this context, we were obliged to look across a range of literature in order to find material that related innovation cultures to ICT usage. The TRANSFORM literature review – what we called the State(s) of the Art(s) – therefore addressed four key bodies of work that might be expected to have something to say about regional innovation cultures and sophisticated or transformative use of ICT: » the literature emerging from the notion of national and then regional ‘systems of innovation’ and culminating the notion of the ‘learning region’; » the literature emerging from work on the idea of civic participation, social networks and social capital; » the literature on creativity, the creative class and creative cities; and, synthesising a number of more or less discrete literatures dealing with the themes of ICT use, the conceptualisation of “innovation culture” and regional development. Perhaps surprisingly, while we found these literatures rich in ideas, and many individual papers that came close to addressing our theme, there was no established body of literature that dealt directly with the relationship between regional innovation cultures and sophisticated ICT usage. What is more, we found that the concept of “transformational use” of ICT, again increasingly widely used, needed to be more explicitly defined. Finally, we sought in the literature an operationalisation of the notion of innovation culture which we could carry through into our empirical work. ICT “Use”: A Missing Element in Regional Studies The ways in which ICT is used – as distinct from the manufacture of ICT hardware and software and the availability and levels of adoption of, or investment in, particular ICT technologies and services – has, with the partial exception of the work of Manuel Castells, been given little attention in regional development studies literatures 3 Table 1: Literatures Compared. Source: The authors. » the sociological literature on culture, values and modernisation. » » An established literature on ‘business transformation’ The established business literature on transformational leadership We have briefly summarised some of the main features of these literatures in Table 1. » What is noticeable about these literatures is that, while there is a strong focus on ICT hardware and software production processes in a number of cases (in particular the regional innovation systems/learning region literature), and there is some attention paid to the cultural determinants of ICT expenditure/investment in the literature on cultural values, in only one case is there a sustained body of work – that on social capital – that seeks to link ICT usage and aspects of culture. However, this body of work, perhaps best exemplified by the work of Barry Wellman and his many collaborators, is not concerned with the cultural (social capital or social network) preconditions of effective or transformative use of ICT but rather figures the relationship the other way round – a concern with the impact of ICTs, above all the internet, on social capital and social networks. Conceptualising Transformational Use of ICT The notion of transformative use of ICT, while increasingly widely used in business, e-government and policy documents, remains under-defined. We have drawn on a range of literatures to define transformational use of ICT including: » » An emerging literature on ‘transformational government’ We have also noted a more general usage of the term “transformation” in the New Member States to contrast with the notion of “transition”. We have also drawn on the wider literatures concerning new models of ICT usage which have been developed on the back of the emergence of the internet as a (conceptually) universal information infrastructure, in particular the emerging strand of work on ‘digital business ecosystems’. What emerges from this review is a notion of transformative use of ICT as characterised by three key features: Transformational ICT usages are multi-agency: that is to say that they require the co-ordinated decisions of a number of independent actors; Transformational ICT usages are multi-level: that is to say that they require changes in organisational structures, business processes, working practices, attitudes, mind sets and problem definitions, as well as the direct application of new technology 3 Summary Findings and Policy Recommendations » Transformational ICT usages are multi-domain: that is to say that they cross traditional boundaries and silos, between public and private, between households and organisations, between the various silos of the welfare or the various branches of traditional industrial structures. Transformative Use and the Regional Scale What is clear is that transformational change does not need to be organised at a regional scale nor does it need it be beneficial to a particular region or aligned with the region’s development goals. The network orientation and multi-scalar nature of most ICT-based transformation processes imply that regions are just one of several possible institutional contexts. And, of course, ICTs have been used by many private actors precisely to ‘disembed’ themselves from a particular territorial configuration – for example, through offshoring call centre jobs. These strategies have not, of course always been successful: that such changes have often been followed by a process of on-shoring (relocating jobs back to the host country), does not change the impact of the original decision. Similarly, e-government, e-health or e-learning initiatives may or may not encompass a regional dimension and may or may not align with regional goals. We therefore want to distinguish between four kinds of transformational change, dependent on two factors – the degree to which any particular transformation initiative involves the constitution of the region as a significant actor and the extent to which the transformation initiative is aligned with regional goals. This gives us a two-by two matrix as in Table 2. In the first quadrant, transformation for the region, transformation processes undertaken by public and private actors within and beyond the region have a positive outcome for the region in terms of the region’s official goals, but the region remains a non-existent or weak actor in the process, reaping the benefits of change in a passive manner. The region is passively buoyed up by the wave of change. The second quadrant, transformation in the region, is a less beneficial outcome where the outcomes of transformational change processes are either irrelevant to or negative in relation to regional goals and the region is a weak or nonexistent actor in such initiatives. In this version, the region is simply a space, within which, or through which, elements of transformation take place. To keep the wave metaphor, in this quadrant the region is tossed about and may be drowned by the wave of change. In quadrant 3, transformation in spite of the region, the region is constituted as a strong actor, but as one that is struggling with the outcomes of Another way of thinking about transformative use of ICT is to think historically. From this perspective, transformation builds on and develops earlier models of how ICTs should be applied – from simple task automation through business process re-engineering and work informatisation and computer supported co-operative working to transformative use of ICT. Transformative use of ICT does not replace these other ways of applying ICYT but rather builds on and extends them. Fore example, where earlier constructs focused on specific tasks (automation), the linkage of tasks into processes (BPR) or the support for skilled collective practices (CSCW), transformation is focused on the wider organisational ecology. This builds on the infrastructural character of new ICTs. In this sense, we echo the “Business Ecosystems” approach to ICT usage. From this point of view ICT adoption and usage does not make sense in terms of individual firm, organisation or household but rather complex collectives (supply chains, clusters, communities) in which individual decisions are highly interdependent. Figure 9: Four conceptual models of ICT usage. Source: The authors. In short, then, transformational use of ICT is a complex change process that takes place between as well as with a range of actors (firms, households, public agencies, civil society organisations). Bringing about transformational use of ICT is therefore first and foremost a collective action problem of mobilising and co-ordinating a diverse range of actors and its major challenge is that of governing this often unstable coalition of actors. 3 transformational change which are acting against the region. In out metaphorical terms, we might describe this as swimming against the tide or battling against the waves. In quadrant 4, transformation by the region, the region is constituted as a strong actor in the transformation process and then outcomes of transformation are relatively well aligned with regional goals. This is what we might think of as successfully surfing the wave of change. The first two quadrants concern transformational change which happens “in” or “for” the region – that is transformation that involves individuals, companies or organisations which are located, or partly located in the region but which does not relate to the region as an actor or only as a weak actor. While this kind of transformational use has varied implications for the region, these implications are in a sense collateral or unintended. In policy terms, it is important to recognise whether the region is generally being buoyed up or drowning in the context of transformational change and to strategise and plan accordingly, but any strategy implies moving to the second pair of quadrants – transformation by or in spite of the region – in which some regional actor, generally (but not always led) by political and/or professional leadership from the public sector, emerges as a strong actor in relation to ICT. This second response to transformational use of ICT, one that operates “through” the region as a significant actor, or that constitutes the region as an actor which is able to relate transformational change to regional goals, strategies, and objectives. This kind of transformational use of ICT is of primary interest to the TRANSFORM project. We operationalised the notion of regional innovation culture in terms of five dimensions: » 1) The structure and operation of social networks (abbreviated to networks); » 2) The relationship between leaders and followers (abbreviated to leadership); » » 3) Narrative/vision and reflection (abbreviated to narrative); 4) Structures and processes of individual and collective learning (abbreviated to learning); » 5) Regional Openness and Closure (abbreviated to openness) In selecting these elements we were guided by the regional development literature – which has stressed in particular networks, learning and the dynamic of openness and closure – but we also looked at the ‘aspatial’ literature on the use of ICT which also stresses the role of networks, leadership and narrative. At the same time, we sought Table 2: Four models of transformation and the regional scale. Source: The authors. The key point here is to stress that ICT-based transformative change is a multi-scalar process and that it can relate to the region scale in a number of ways, that the region is just one possible actor in the transformation drama, and that the region can play more active or more passive roles within that drama. Conceptualising Regional Innovation Culture: Five Clues What is a regional innovation culture? How might we capture this notion empirically? Culture is a notoriously hard term to define. It is both something that you have and something that you do. It both an inheritance from the past, but it is also always in development and has the potential to develop in unexpected directions. It is a resource to be drawn on and a barrier to be overcome. In the context of TRANSFORM we have sought to operationalise the notion of culture in terms of what we termed “clues”. In doing this we have sought to stress an active notion of culture as “the way we do things round here.” concepts that had some empirical grounding in actual behaviours rather than just attitudes or values, without lapsing into pure behaviourism. Thus in our empirical work we were always keen to capture not just informants’ opinions about these five dimensions of regional innovation culture, but also concrete manifestations of them which we could check against other accounts and the documentary record. Thus, for example, we looked for evidence that there were networks – meetings, fora, documented contacts – as well as a degree of consensus among informants; we sought evidence of consistent narratives in documents and web sites, as well as from informants; and so on. 5.1.3. Approach and Methodology How could we test the validity of our model? The absence of well established and codified indicators for both 3 Summary Findings and Policy Recommendations transformational use of ICT and many of the soft indicators suggested a qualitative and comparative analysis of regional case studies. Case Study Selection In selecting the case study regions we have sought to ensure broad geographical coverage of the European space, including old Member States, both north and south, and New Member States. We have also sought to ensure a degree of diversity of regional types across Europe as well as variation within individual countries. In order to achieve this we have utilised a number of selection criteria. These include a statistical exploration of existing data on the uptake and use of ICT in the European regions, which explored the relationships between ICT adoption and GDP per capita and between ICT adoption and GDP growth. Through this process we construct a four-fold typology of regions, (RICEG) and beyond to assess the viability of the chosen regions as case studies (for more detail see TRANSFORM Deliverable D1.3). Through this process we have selected 12 case study regions in seven countries. The regions (at the NUTS 2 level) are depicted in Figure 10. The selection of two regions from within the same country in the cases of Germany, Spain, Poland, Slovakia and the UK enabled us to test for country effects. It should also be noted that there is only one capital city – Bratislava – within the regions selected. Throughout the case study selection, our aim was to choose regions which would be representative of the broad range regional experience in Europe rather than being statistically representative of the population of European regions as a whole or, alternatively, as exemplars Figure 10: Case study regions. Source: The authors. namely: vanguard or leading regions, potential regions, sluggish regions, and lagging regions. We supplement this approach through the use of a range of other sources and established classifications, in each case seeking to cover the full range of types of regions. Finally, we discussed the possible case studies with a experts drawn form the TRANSFORM Regional Innovation Cultures Expert Group 0 of good practice. Finally, unlike similar studies30, we have not only chosen regions with well established, or at least well documented, regional cultures, but have rather chosen 30 cf. Keating, M. Loughlin, J. and Deschouwer, J. (2003) ‘Culture, Institutions, and Economic Development: A Study of Eight European Regions’, Cheltenham: Edward Elgar. a range of regions from those with well defined boundaries and a strong regional cultural to those that have a weaker identity and more ambiguous boundaries. Data collection For each case study there were four main stages of data collection. Stage 1 involved key data capture and analysis (both soft and hard), including information on potential initiatives, regional ICT strategies and the structures of regional governance. Stage 2 used a snowball methodology with multiple ‘seeds’ to identify key actors within our case study regions, who in turn helped to identify initiatives and key informants. We classified our informants into four relatively discrete groups: » Type 1 informants, concerned with broad regional policy issues; » Type 2 informants with a strategic overview of the ICT developments in our priority domains (e-government, e-health, e-business and e-learning); » Type 3 informants, directly involved in managing ICT initiatives; and, » Type 4 informants, relatively independent critics (often academics). In stage 3, the case study visits, explored a range of research questions, using a semi-structured interviews at the regional, domain and initiative levels as well as with the ‘critics’. Prior to researchers going out into the field the methodology was piloted and further developed by the workpackage leader (for more details see Deliverable D1.4). Individual case study documents were prepared but have been retained within the consortium to protect the confidentiality of individual informants. Short summaries of the case studies are appended to D1.5. Analysis methods Methodologically, this synthesis is based on an iterative and comparative design which works through the development and “testing” of theoretical statements against the data gathered in the 12 regional case studies. respondents. The public sector took the lead on ICT policy in most of our regions. In some cases, this was because it was felt that there was no alternative source of leadership. Where the public sector did not take the lead, beyond their formal responsibilities for preparing regional plans, we could find no other source of leadership, outside particular isolated domains. Similarly, the public sector dominated ‘overarching networks’ (those networks which bring together actors from a number of domains) and at least animated or facilitated most of the other networks which we came across, the main exception being project networks which drew their funding from outside the region. Political leadership by key individuals was seen as crucial to ICT developments by most respondents and its absence was lamented in regions where it was not seen as present. The potential to exert political leadership, of course, varies from region to region. In some regions effective leadership may depend on formal political positions (for instance, an elected regional president); in others there is no regional level political structure to provide a leadership voice. In these places, the case for collective action was more pronounced. Networks were also seen as important. Of course, this to some degree reflects a general tendency towards regional ‘governance’ as opposed to ‘government’. Networks may be more important in the ICT/IS policy area than in other policy areas. In many policy areas there is a clear institutional, departmental or professional home from which to exert influence. This is not necessarily the case in respect of ICT or the wider information society agenda. It is true that there is an increasing body of IT professionals many of whom have a base in IT departments, but what we are interested in here is the development of an ICT and social and economic development community. Such a body of people is not necessarily recognised and often has to carve out space in which to operate. Here, networking is very important in bringing together a ‘critical mass’ of individuals. There was a general view amongst our respondents that inclusive networks, which brought together a range of actors and reached out to end users, would be beneficial in creating an environment in which transformational use of ICT could occur. It must be said, however, that we found no examples of such an inclusive network approach in place. Emilia 5.1.4. Findings Drawing together our five clues, the following general points emerge. Both networks and institutional and individual leadership were seen as important by the majority of Romagna probably came closest, but even here there was concern about the extent to which end users were integrated. The main absentee mentioned by our respondents was the SME community. This absence was noted in nearly all regions, including those which are generally acknowledged 1 Summary Findings and Policy Recommendations to have history of strong business networks. Even where inclusive networks do exist in the formal sense, there are of course power asymmetries, based on differentiated resources and so it is difficult to give equal weight to all. On some interpretations, the concepts of networks and of leadership would seem to be at odds, the former being used to suggest non-hierarchical complex systems, the latter to infer a degree of hierarchy. In reality, of course, physical networks have key nodal points and may need to be built in hierarchies (or forms of precedence) in order to run smoothly. Similarly, in social networks, not all points in the network are necessarily equal, in terms of resources and capacities, though each point is important for the network’s overall effect. Often, leadership is required in networks, for example: to form a non-organic network; to give direction and impetus to networks; to help give structure to networks; to make links to other networks. In the more formal networks, institutional leadership or leadership (titular or otherwise) from an individual who has seniority in a recognised institution can give voice to the network in the general policy community, taking the network’s ideas to regional or extraregional resource networks. In less formal networks, leadership is often, of course, collective and the issues are sorted out through discussion. But an animator may be required from time to time to keep the network going. It is also likely that if these networks are to be effective they will need to link into both resource networks and expertise networks. Networks also form important sites for learning and for information and ideas exchange. As such, they can provide a source of expertise upon which leaders can draw when creating and pushing forward the ICT agenda. Overarching networks and cross-domain networks also provide learning opportunities for those engaged in project and initiative development and can provide opportunities do develop joint projects. Projects and initiatives, themselves form a further locus around which learning can occur. Indeed, ‘learning by doing’ was seen as very important by the majority of respondents, the general view was that a number of factors stood in the way of the learning process; these include the short term nature of projects, the narrow ‘tick box’ way in which projects are evaluated, the ‘fear or failure’ and the fact that funders and policymakers do not want to hear ‘bad news’. the potential to lead to more profound learning. For example, university research whether technical or socio-economic, can be used to help ‘explain the region’ or to draw in experiences from elsewhere. Assuming that this can be tailored to the region rather than ‘cut and pasted’, there are said to be clear benefits. We found examples of both formal and informal relationships between these sets of institutions (and between individuals working across institutions) which were beneficial. This axis does not, however, always work as well as it could. One problem is that some academics feel that the region is not interested in their work and that they also misunderstand the purpose and values of the academic world. From the opposite perspective, some regions find it difficult to engage their universities which are funded from outside the region and whose focus is the global rather than the local sphere. Including end users into networks through ‘co-design’, as opposed to merely ‘exit questionnaires’ handed out at the end of projects, was also regarded as key to lesson learning, though we found few examples of this process. Turning to our narrative and vision clue, there were significant differences across regions and within regions as to how important this is in general and as to whether there is a need for a single narrative, and indeed, what that narrative should be. The IS and ICT agendas clearly have a future oriented narrative, characterised by change and discontinuities from the past. ‘Second worlds’, cyber-spaces, virtual communities and electronic cottages are envisaged. In the policy sphere, it is interpreted as better futures with ‘more and better jobs’, more efficient markets and better (as well as more and cheaper) public services. In some regions, a clear story was felt necessary in order to overcome ‘historical pessimism’ and to provide narrative to this still relatively new policy area. It was seen by some as an opportunity to ‘leapfrog’ other regions or to overcome the disadvantages of distance and to revalorise local resources. Creating a credible vision and narrative may also help to overcome the weak statistical and empirical bases which make it difficult to demonstrate the effectiveness of ICT policy. It was also generally felt, however, that narrative has to be flexible and must be combined with or bend to technological developments and to contingencies which arise and might need to be grasped opportunistically. In a number of the regions, leadership was seen as important in Although cross domain networks were uncommon, it was generally recognised that bringing different actors together – say the public sector, universities and the private sector – had 2 creating or giving voice to narrative. It was noted, however, that it is important that an individual should be able to communicate that narrative to institutions, as well as to the general community, otherwise the narrative disappears with the individual. Networks were also important in creating and sustaining narratives about the transformational power of technology. Individuals within networks, particularly semi-formal and informal networks, seemed to have a shared narrative. In some regions, such visions, though not unquestioned, seemed to have gained hegemony. In other regions, however, there appeared to be a strong degree of ‘vision fatigue’. The ICT vision was also perceived to be unfulfilled in many regions, with people still pointing to the ‘dot com’ bust, past infrastructure failures, digital divides, including spatial divides, and the negative impacts of ICT facilitated globalisation. A key question for policymakers, in all regions, and particularly those suffering from vision fatigue, is how to balance the promises of the IS agenda against past promises and against present realities. There was no ‘settled view’ as to the need for a single regional statement or document setting out a regional IS vision. Where the ICT agenda was relatively mature, the mainstreaming of policy and the insertion of ICT into policy areas, or appropriate domains, meant that there was no need for an overarching policy or a single IS policy agenda. Other respondents suggested that a directional narrative was important to bring a wider population on board. It was also felt by some that the need for an articulated narrative may vary along the journey towards an IS. This does not suggest a linear process, but that there may be moments when the narrative has to be restated or restructured. One commonly held belief was that it was important that narrative should not get too far out of touch with reality, ‘keeping the vision real’, and a key element in reconciling narrative and reality was through concrete ‘demonstration’ by means of projects and initiatives that deliver. One point which emerged is a need for a balance between institutional capacity, networks and other forms of collective action and the role of the individual operating within, across, and in the interstices between, these collectivities. Those individuals, whether leaders, individuals involved in projects, ‘networkers’ or ‘network spanners’, play an important role in the development process. Such individual have some affinity with Castells’ and Himanen’s31 ‘social hackers’, but tend to have some institutional affiliation. These individuals tend to be ‘enthusiasts’ and ‘believers’. They utilise their own resources, but may also require space in which to operate and be able to draw down ‘redundancy’ in the overall ecosystem. These individuals (and their networks) may be more 31 important in ICT/IS agendas than in other policy areas as they do not always have a recognised institutional, professional or departmental home. In these circumstances individual agency may gain greater weight. Successful, informal, and even formal, networking also requires this spare capacity. This space may not be available in all regions, of course. So, for example, in some New Member States, system and resource constraints do not allow the leeway for, and do not have mechanisms to reward, such additional activity. A key question is how such individuals can be articulated with institutions, and how they can be incorporated into institutions which reward their initiative, but without losing their innovative and perhaps freewheeling attitudes. 5.1.5. Conclusion The increasing availability and lower costs of basic ICT infrastructures have created a new agenda at the regional level focused finding new ways of using those technologies for regional development goals. Regions are not, of course, equally endowed with infrastructure, and levels of competition and prices of services also vary. However, much sophisticated usage of contemporary ICTs is not necessarily dependent on huge bandwidth or elaborate, cutting-edge technologies. Our field work has shown that there is wide agreement from those in the field that the elements of regional innovation culture which we have highlighted networking, leadership, learning, narrative and reflexivity and a balance between openness to the outside world and regional closure are important to making ICT projects and initiatives work. Where there were effective networks and leadership, and a credible broadly shared narrative, regions could develop considerable agency in developing new and transformational uses of ICTs which could support regional development goals. Where these key aspects of the regional innovation culture were missing, transformational uses of ICT may or may not be present, their contribution to regional development goals was limited. 5.2. measUring transformative Use of icts – QUantitative evidence from the transform Piloting sUrvey The overall objective of indicator piloting within TRANSFORM was to make progress towards indicators Castells, M. and Himanen, P (2002) ‘The Information Society and the Welfare State: The Finnish Model’, Oxford: OUP. which statistically capture uses of ICT which can be 3 Summary Findings and Policy Recommendations described as “transformative”. Whereas TRANSFORM as a whole is looking into indicators in all three main domains – individuals / private households, businesses and the government / the public sector, piloting within the project was limited to indicators which use individuals as the reporting unit. Of course, this includes the role of private individuals in the economy (as employees, consumers, share-owners etc.) and in relation to the State (as public sector workers, citizens, patients, learners, etc.), see figure below. as the total online population aged 18-64 in the twelve EU NUTS 2 regions also covered by the case study research undertaken in TRANSFORM. The decision to conduct the survey in the same regions which are also subject of the case study research was taken in order to enable the project to directly compare the findings from both research strands, and therefore to enrich the overall analysis of conditions for transformative use of ICTs in EU regions. Key features of the survey are summarised in Table 3. 34353637 The universe for the survey was the total Internet user population (aged 18-64) in the regions covered. Internet users should here be interpreted as people with advanced user experience. Table 4 presents some national-level indicators on Internet and broadband uptake. Comparable regional data are not available for the regions covered by TRANSFORM. It can be assumed however, that regional performance on these indicators is above or below national averages, respectively, depending on whether GDP/capita is above/below the national figure. The sizable difference in the spread of Internet and broadband Figure 11: Focus of TRANSFORM indicator piloting. Source: The authors. Internet between Member States – in particular, between the Old and the New Member States – imply that the sociodemographic composition of the universe (i.e. age, employment and social status distribution) also differs quite extensively between the countries in the sample. This needs to be taken into account when comparing the results between regions. For more in-depth discussion of methodological issues surrounding the pilot survey, see TRANSFORM Deliverable D2.4 “Indicator Piloting Data Report”. Most existing statistics on the use of ICTs by households – especially those few ones which are available at the regional level within Europe – focus on basic readiness and uptake of ICTs rather than the value which people and organisations derive from using the Internet, mobile telephony, and other ICTs. In recent years, however, academic research including work at publicly funded research centres such as the Oxford Internet Institute32 and the Pew Internet & American Life Project33, as well as research by National Statistical Institutes has made progress in identifying and measuring the ways in which the Internet and other ICTs exert a direct, tangible influence on people’s lives and the ways successful companies and public sector organisations operate. This is the background against which in the following results from piloting within the context of the TRANSFORM project are presented. 5.2.2. Key results from bivariate analysis (a) The extent to which the Internet “makes a real difference” to people’s lives can be explored by looking at people’s perceptions. Whereas most indicator systems which are currently in use attempt to measure whether individuals have 34 5.2.1. Approach and Methodology The TRANSFORM regional population survey was conducted in late 2007/early 2008. Data collection was designed as an Internet user survey with the universe set 32 33 See http://www.oii.ox.ac.uk/ See http://www.pewinternet.org/cv Individuals aged 16 to 74 who access the Internet, on average, at least once a week, within the last three months before the survey. Use includes all locations and methods of access. 35 Percentage of households that are connectable to the Internet over a broadband connection. It covers all households having at least one member in the age group 16-74 years. 36 Percentage of individuals aged 16 to 74 who have used the Internet, in the last 3 months, for interaction with public authorities (i.e. having used the Internet for one or more of the following activities: obtaining information from public authorities web sites, downloading official forms, sending filled in forms). 37 This indicator covers all individuals aged 16 to 74. Financial investments are excluded.  Table 3: Key features of the TRANSFORM Internet User Survey. Figure 12: Questionnaire overview. Source: The authors. Table 4: Internet uptake and usage by country 2007. Data source: Eurostat (2008).  Summary Findings and Policy Recommendations used certain applications of the Internet, the TRANSFORM pilot presented respondents with a list of possible uses of the Internet and then asked how important these are perceived to be for (a) their private life and (b) – using a somewhat different list of items – their ability to carry out their job (if in employment). We found that Internet users consider many of the uses they make of the Internet as being of essential or at least high importance. Commercial functions such as onlinebanking and pre-purchase information seeking about products and services are among the uses which are considered as most important. Information sources which are specific to the resident region are given – on average – roughly the same weight as non-region specific information sources. in general”. These are uses which have to do with information that in earlier times would have been sought in newspapers, specialist magazines and reference books. [General information search]. (c) Following a methodology suggested by the Pew Internet & American Life Project, we presented interviewees with a list of items describing what can be termed “major decisions in life” (see table next page). For each of these decisions, we first enquired whether respondents had to deal with it in the reference period, in which case they were then asked what role the Internet played for dealing with the decision. The results clearly show how that the Internet does indeed play (b) By means of a factor analysis, the 15 items could be reduced to four factors, each of which represents types of Internet usage which are typically given the same importance by respondents. The four factors are: » “To play online games” appeared as a separate factor [Online gaming]; » A second factor includes “To buy or order goods and services”, “To use your bank’s online services” and “To find information about goods or services which you consider buying at shops in your region or city”. These are instrumental uses with a clear focus on commercial transactions [Commercial]; 3839 a highly significant role in decisions which are transformative in character. About one in four Internet users who have been face with major decisions about financial issues, education & training for themselves or their children, moving place or changing jobs state that the Internet was of essential importance for dealing with the issue. Somewhat less than one in five of those who have been helping another person deal with a major illness or health condition considered the role of the Internet as essential. If considering all of those who indicated a high importance of the Internet in the process, figures are around 50% for all listed “major decisions” with the exception of “helping another person deal with a major illness” and “moved into a new place to live”, for which somewhat less than 40% indicate that the Internet was of major importance. These results also indicate that local and regional public agencies can indeed play a powerful role in helping citizens deal with major decision in life, by offering online public services (in key areas such as health, education & training, jobs and accommodation) which meet the needs and preferences of users. (d) The survey results also suggest that social ties including family and friends, but also interaction more remote acquaintances, play a powerful role in the exchange of ICT skills. A high level of social capital, if defined as existence of extensive networks of strong and weak ties, can therefore be expected to make it easier for a region to spread the skills necessary for making full use of the potential of ICTs. We found that initial education (at school, college or university) and formal training courses play an important role for a much smaller share of respondents compared to learning on the job (for those in employment), help from friends or relatives and self-study and trial & error. While the latter findings indicates the relevance of the ability to self-learn and learning self-efficacy are likely to be of key importance for skill acquisition, the role of friends and relatives for transfer of skills deserves a closer look. » A third factor includes “To communicate with people located in the same region”, “To communicate with people located outside of the region but inside country”, “To communicate with people located abroad”, “To work at home” and “For educational and learning purposes”. These uses relate to online communication and to instrumental uses concerned with work and learning [Communication, work & studies]; » The final factor includes “To find information about health and medical care services in your region, city or neighbourhood”, To find information about health issues in general”, “To look for news about your region, city or neighbourhood”, “To obtain information about events in your region, city or neighbourhood”, “To look for career related information from your region, city or neighbourhood” and “To look for career related information (jobs, information related to your work) 38 39 Value “1” on 10-point scale (1 = essential, 10 = not important at all) Values “1” to “3” on 10-point scale (1 = essential, 10 = not important at all)  Table 5: The role of the Internet for major decisions in life (TRANSFORM findings). Data source: TRANSFORM 12 Region Internet User Survey. (e) The survey also asked Internet users whether they get help from others – friends and family, people at work or place of education, people at public places such as libraries, people at Internet cafés, or a formal trainer in a computer course – for using computers and the Internet. Likewise, we asked whether respondents give help to any of these groups. The results suggest that regular Internet users are indeed an important source of support for their friends and family, with 71% stating that they give help to this group. But the transfer of skills is not limited to this group, as 61% also state that they give help to other groups of people – especially colleagues and co-students, respectively. (f) The buzzword Web 2.0 has been used extensively in recent years to describe applications of the Internet which comprise a strong degree of user involvement, such as in the case of the popular social networking sites which combine traditional means of online communications (discussion boards, online chat, e-mail) with the possibility to upload and share (often self-created) content, to identify people with similar interests, and to easily find content or users which is likely to be relevant, for example by implementation of rating and “tagging” of pieces of content. In spite of the criticism which the hype around the so-called Web 2.0 applications has attracted, there is widespread consensus that the Internet has indeed become a powerful instrument for user involvement and an outlet for creativity40. Results from our survey suggest that the share of Internet users who actively contribute to the Internet, including uploading of self-created content, is indeed considerable. Taken together, Internet users who have contributed self-created content in the 3 months prior to the survey make up 51% of the sample. If engagement on chat sites, newsgroups or discussion forums and creating a profile on a social networking site are added, the share (which may be dubbed “participative web users”) rises to 74%. (g) The TRANSFORM survey attempted to gauge whether applications of the Internet are perceived as having had a positive effect on living conditions within regions. For this purpose a question was used asking about the Internet’s effect on the conditions in the region for (i) Finding a good job, (ii) Getting high-quality education, (iii) Engaging in adult/ further education and lifelong learning, (iv) Setting up an own business, (v) Making your voice heard in regional politics and public life, (vi) Enjoying leisure time, (vii) Enjoying a high quality of life. Results show that the Internet is widely perceived as having a positive impact on living conditions when it comes to “enjoying leisure time”, “getting good education” and “finding a good job”. The latter is – given the high rates of unemployment plaguing many EU regions – a result of some interest to policy-makers. On a less positive note, while much has been made of the Internet’s potential to improve direct participation of citizens in day-to-day policy-making and in civil society, the results from the survey indicate that it is proving difficult to translate such potential into reality. Only 40% of respondents think that the Internet has improved conditions for this in their region – much less than for all the other aspects of living conditions listed. It appears that those regions, in particular, which suffer from wide-spread disengagement with politics, such as Thüringen 40 See OECD (2007) ‘Participative Web: User-Created Content’, Working Party on the Information Society, Online Document, Paris: OECD. in Eastern Germany, are also the least successful in applying the Internet for the purpose of improving the situation. In  Summary Findings and Policy Recommendations contrast, every second respondent from the Swedish region Mellersta Norrlland states that the Internet has improved conditions for political participation – roughly the same share than those who see a positive effect for the other aspects of living conditions. (h) Inspired, again, by a study by Pew Internet, we explored the correlation between the size of personal networks of social ties with the frequency of contacting these ties at least once a week, differentiated by the means – face-toface contact, telephone, e-mail and instant messaging, or text messaging. Analysis of the TRANSFORM survey data showed that, while the share of social ties which are contacted at least once per week per phone or face-to-face is decreasing significantly with increasing network size, for social networks up to a size of 50 persons, the share of people contacted at least weekly via e-mail appears more or less independent from the size of the network. This suggests that e-mail is indeed “more capable than in-person or phone communication of facilitating regular contact with large networks” . This findings is of some 41 making and discussions (at least 2-3 times per week). What is the influence of using ICT on active group membership? It has been argued that extensive use of ICTs is detrimental for civil participation, as face-to-face contacts are replaced by media-poor ICT-mediated contacts, such as via e-mail, chat or instant messaging. Our findings, however, show that strong use of e-mails and other ICT for making contacts within groups goes hand-in-hand with a stronger participation in day-to-day decision-making within these groups. (j) Our survey also asked respondents directly whether they think that the Internet has had an effect on the number of people they communicate with at least occasionally. This is a very simple operationalisation of the notion of “weak ties” as suggested by Granovetter. Theoretical accounts of the relationship between ICT use and weak ties have repeatedly concluded that the Internet is likely to increase the number of weak ties as it diminishes the costs of keeping in (loose) contact with a large number of people. The TRANSFORM data support this proposition: More than one in two respondents state that the Internet has increased their number of private weak ties within the region as well as within the country. 46% also felt an increase in occasional contacts with people abroad. The numbers are somewhat smaller for work-related contacts. For all of these types of contacts with the exception of work contacts abroad, the share of respondents who perceive a strong increase as a consequence of the Internet is between one in four and one in five. relevance as it suggests that e-mail is of high instrumental value for maintenance of so-called “weak ties”, since these are typically much more numerous compared to strong ties and as such more difficult to maintain by means of faceto-face or telephone communication. It appears that, in particular, the one-to-many functioning of e-mail and other ICTs (instant messaging, texting) enables maintenance of larger networks of social ties. (i) Research into social capital is concerned with group membership as an indicator for civil participation and individual-level investment in social capital, usually outside the sphere of work. The TRANSFORM survey explored group membership as well as the ways in which respondents communicate with other people in the group(s) they are member of. According to the results, 65% have been members of any type of group (business or professional association; a sport club or league; a religious organization; a hobby group or club; a neighbourhood, school, charity, voluntary or any other local group; a political or activist group; or any other group or organization) in the three years prior to the survey. Once we check whether respondents have actively taken part in decision-making and discussion within any group they are member of, we find that one in four in the total sample is a passive group member only; only 13% of the total sample are frequently participating in decision41 5.2.3. Key results from multivariate analysis In order to gain insight into the factors which can explain differences in impacts of ICT as perceived by individuals, we carried out a number of multi-variate analyses. These control for the distorting effects of structural differences in the sample composition in the 12 regions. The findings from the analysis (reported in full in TRANSFORM Deliverable D2.3) support the following observations: (k) The way the Internet is used is indeed strongly associated with levels of social capital, when the latter is defined in simplified terms as being made up by the level of trust, the number and diversity of social ties, and active membership in social groups. While the intensity of using the Internet, measured in average hours per day, does not exert a significant influence, the fact that the Internet is used at more than one location (arguably, the first step towards “always & everywhere on” access) as well as the relevance which Boase, J., Horrigan, J.B., Wellman, B. and Rainie, L. (2006) ‘The Strength of Internet Ties’, findings report and questionnaire, Washington, DC: Pew Internet & American Life Project.  is given to non-commercial uses of the Internet were both found as significant explanatory factor. This is consistent with findings from previous research according to which “patterns of Internet use, such as using the Internet for communication versus entertainment, provide the most critical basis for explaining the development of online friendships as well as their transitioning to offline settings” . 42 (n) The findings of the multivariate analysis of factors which explain the extent to which the Internet is perceived as having led to an increasing number of “weak ties” – operationalised here as people with whom respondents communicate at least occasionally, within their region, outside of the region or abroad – support a number of observations. First, there is a significant association between the utility of the Internet for private life and for work life, respectively, and experience of an increasing number of “weak ties”. This shows that the ability of the Internet to allow users to maintain occasional or regular contact to people the knowledge of whom is of instrumental or social value is among the most important benefits which advanced users derive. (o) Moreover, people who are engaged in social groups are more likely to experience growing numbers of private “weak ties” than those who are not: The Internet allows people who are already engaged in nurturing their social capital to do so easier and to more effectively utilise their social capital for their own personal goals. There is also a positive association between the diversity (but not the size) of private networks of social ties with a perceived increasing number of private weak ties resulting from Internet use. The latter relationship can also be observed with respect to the Internet’s perceived effect on work-related ties. The analysis suggest that people who possess strong “linking” or “bridging” social capital, in particular, use the Internet to make new contacts which may be mobilised when needed for private or work-related goals. This squares well with the claim made in the literature (e.g. Field 2003) that social networks which include a wide variety of people according to social status, occupation, ethnic and cultural origin, and language are often of higher instrumental value as they can give access to a large variety of skills, knowledge and experience. (p) Uptake of participative Web 2.0 applications is strongly associated with private-sphere “weak ties”, but only little with work-related “weak ties”. This appears to reflect the fact that many of the applications concerned achieved wide-spread uptake for private use first, before diffusing into the business sphere. (q) The data indicate a significant degree of variation concerning the extent to which people feel that the Internet has made a real difference to living conditions in their resident region. In most cases, these differences appear to be between countries rather than between regions within the same countries – although care must be taken as the number of regions covered by the analysis is too small to allow generalisation. The effect of the Internet is felt most strongly  (l) In particular, the extent to which Internet users have taken up participative Web2.0 services such as social networking, blogging and contributing self-created content is strongly associated with levels of social capital. In general, it appears that the more advanced the use of the Internet, the higher is the score on the social capital index. Care should be taken, however, not to conclude that there is a direct causal link between ICT use and social capital. A better reflection of reality would be to assume a correlation which is mutually reinforcing: On the one hand, the more people are engaged within social networks and the more they put trust in fellow citizens, the higher is the utility which they can derive from using advanced Internet applications; on the other hand, the more experience people have gained in using such Internet applications, the easier it is for them to actively engage in social networks. These findings give support to the emerging view that the Internet is enabling persons with strong individual social capital to more effectively reproduce it. On the other hand, since age, gender, employment status, household type and educational attainment are controlled for, the results indicate that “the role of the Internet in social relationships [is] something more than that it is merely integrated into the maintenance of offline relationships” . 43 (m) A strong association is also found between helping people other than friends and family in using computers and the Internet on the one hand and the social capital compound index on the other. This appears partly self-evident as more and stronger social contacts also provide more opportunities for helping others use computers. It is also, however, a reminder of the role which strong social capital plays for enabling the transfer of skills within a community or region. This is of special relevance for the case of digital literacy skills, since other data from our survey (not reported here) show that informal help from others – in combination with learning by doing – is perceived as by far the most important sources of computer skills. 42 di Gennaro, C. and Dutton, W.H. (2007) ‘Reconfiguring Friendships – Social Relations on the Internet’, Information, Communication & Society, 10(5): 591-618; pp. 596-7. 43 Jensen, M.J., Danziger, J.N. and Venkatesh, A. (2007) ‘Civil Society and Cyber Society: The Role of the Internet in Community Associations and Democratic Politics’, The Information Society 23(1): 39-50. Summary Findings and Policy Recommendations by Internet users in the New Member States, especially in the Bratislava region which has seen spectacular growth rates in recent years. Among regions from the Old Member States, there is some evidence that Emilia Romagna has succeeded better than the other regions in perceivably improving living conditions with the help of ICT. Mellersta Norrland and East Anglia also emerge as “good performers”, although the evidence is weaker (but still significant). (r) The role of trust is found to be of special relevance for the extent to which a positive impact of the Internet is felt within regions. This does not apply to general trust, but to trust in people in the immediate region and the belief that people are willing to help each other out. It appears that the Internet requires a certain degree of community-level social capital (as indicated by high levels of trust) in order to yield the positive effects on living conditions which are hoped for by policy-makers. (s) Finally, the extent to which individuals have taken up participative Web2.0 applications is significantly and positively associated with perceived Internet-enabled improvements in living conditions. It can be assumed that people who believe in the power of the Internet to make a difference are also more enthusiastic about new Internet services, and that – vice versa – experience of advanced Internet applications is likely to make people more aware of the difference which the Internet has already made to living conditions. It follows that activities which strengthen awareness among regional stakeholders, including society at large, about the possible benefits to be derived from latest-generation ICTs can exert a positive influence on regional development. In sum, our analysis suggests that the Internet is indeed having a tangible “impact” on users, for example by allowing them to maintain close contact to large networks of social ties, by enabling participation in Internet-based forms of creativity and socialising, by allowing frequent participation in decision-making within social groups, and by supporting the maintenance (and possibly also creation) of social capital. 0 Summary Findings and Policy Recommendations www.transform-eu.org