January 14th, 2021 - Alex Usher
I want to draw everyone’s attention today to a short but quite interesting report from the OECD, the Evaluation of the Academy for Smart Specialization, a rather unique university/community partnership for regional economic development based in Karlstad, Sweden. It seems to have been done on a contract basis (i.e. the Academy paid OECD for the analysis), but the unit that did it goes under The Geography of Higher Education, which I urge everyone to keep an eye on because it seems like a group doing really interesting stuff in areas Canadians should care about – how universities can contribute to regional economic development.

So, Karlstad is a town of about 80,000, the seat of the Värmland Region (pop. 275,000), which sits along the Norwegian border. Värmland is a region amid a fairly long decline, and the story is familiar: it used to be dependent on steel and pulp/paper for an economy, and is now dealing with the long shift to a service economy. One of its chief assets in this shift is Karlstad University, a new-ish university with about 9,000 FTEs, based in the capital city. If you’re thinking of Canadian equivalents, think about a cross between Thompson Rivers and Ontario Tech.
Now, one of the interesting things about Karlstad University is that it has been quite focused on regional development almost since the beginning; even more remarkably, the regions has reciprocated that interest. In 2006, the region asked the OECD for recommendations on how the university could better contribute to economic growth (the report is here).  This led to some early partnerships such as the “10 professors program”, in which the region paid the university to hire ten professors, provided they were employed almost exclusively in applied research and were matched with local business clusters working in fields such as production technology, materials science, renewable energy, etc. The final report on this project suggested that the project was reasonably good, but suffered somewhat from the professor/cluster relationships being seen as too transactional and insufficiently relational.

All the while, Karsltad U grew some interesting institutional appendages. In 2005, it created Karlstad University Professional Services AB to handle the business side of all commissioned education given by the university to companies and to public organisations. It also created a Research Service, created to develop new models of service provision as it relates to the use of technology, quality, organisation design and networks with an emphasis on customer involvement, and gave it a staff of 45 from a range of disciplines, such as sociology, psychology, theology, business administration, life sciences, and IT. For an institution of this size, these are big, important commitments to regional development.

In 2015, the region and the university reached an agreement to substantially deepen their co-operation arrangement. The region kicked in 50 million SEK (about $4.5 million), on the condition the university donate 25 million and with the anticipation of another 25 million to come from other revenue sources. This money was to be channelled into creating the Academy for Smart Specialisation for the period 2016–2020 (the details of which can be found here). This is a big deal in Swedish terms because unlike our provinces, their regions aren’t normally involved in funding higher education. From a jurisdictional point of view, this is like a small Canadian city dumping a few million on a university, which basically never happens. Also, the university needed to put real money in the game. And yes, sure, it’s getting 98% of its money from the central government in Stockholm so it was not raising money to pay for this, but it’s nevertheless a real sacrifice with a real opportunity cost.

Another key point about how the system was set up was that the regional government made some initial decisions about where it wanted to “specialise” (ie. put its money): i) the forest-based bio-economy, ii) digitalisation of welfare services, iii) advanced manufacturing and complex systems, iv) Nature, culture and place-based digitalised experiences and v) systems solutions with photovoltaics. There was a kind of sixth cross-cutting specialisation, namely “value-creating service” (no, I don’t really get this either) and a seventh “theme”, also of a cross-cutting nature, is what they called “gender mainstreaming.

I won’t get into too many details here – if you really want the nitty-gritty, read the report, especially pages 27-28 and 47-51. The basic conclusion of the OECD’s evaluation was that Smart Specialization has been transformational for Värmland. Most of the Academy’s activities have met or exceeded expectation in most respects (nature, culture and place-based experiences seems to have been a bust but when you try so many things at once, you have to expect a failure here and there).  It is important to note that this is not really a case of a university going out and “saving” a region; in fact, as the authors note, the key distinguishing factor between specializations which went well and those that did not was the presence of a strong local industry cluster. That is: receptor capacity may be a pre-condition to universities being able to work effectively in a given domain. It’s an interesting point because it does point towards how concentrations of legacy industry might actually be a source of strength: Karlstad’s work on developing a bioeconomy country might have been aided by the presence of (shrinking) pulp and paper companies rather than a blank slate of hopeful start-ups. 

There are few lessons in here that you could take directly to small-town Canada, but there are a whole lot of interesting ideas in here to ponder. I’d like to just highlight a few. First, I want everyone to note that European Countries use OECD as a think tank and consultant. CMEC, which arguably plays a similar role within Canada, does nothing similar. Maybe it should: without someone playing this role, it is difficult to organize useful benchmarking and evaluation. Second, and this bears repeating, holy cow there actually is a culture of benchmarking and evaluation over there. When’s the last time you saw a higher education entity in Canada give carte blanche to a third-party to evaluate one of its initiatives and publish the results independently? Wowsers. Third, and I think this is key, is that region of Värmland was actually prepared to set some priorities, and fourth, that decent cluster organizations were in place prior to the development of the program. It’s not clear how either of these conditions could be fulfilled in Canada since we are loath to tell anyone no, and our businesses tend not to co-operate the way European ones do. Nevertheless, a lot to think about here, and some interesting Canadianized models could certainly emerge from this – even if the exact model itself is not easily transportable.

In any case, if you’re interested in knowing more, the Geography of Higher Education Group is holding a 4-hour webinar on the Karlstad case on 27 January. It’s a bit on the early side for most of us (it starts at 11 AM Paris time), but if you’re an early riser you may enjoy it. Register here:  https://meetoecd1.zoom.us/meeting/register/tJwrdumtrjguGNB17mOIc6KYE00-q4Q6ioLn

Have a good weekend.