Developing a Regional Service Cluster. Case: Setting Up a Social Affairs and Health District in Päijät-Häme, Finland

Finland as a society is facing major challenges due to ageing and financial difficulties of municipalities. According to many authorities the Nordic welfare state has come to its end in Finland. Therefore, Finnish municipalities are forced to develop new methods to maintain the good quality of public services. In this paper, we argue that the most efficient method to achieve this is to develop a regional service cluster, which means radical changes in the role of the municipality. Instead of producing all the services themselves, municipalities should act as leaders of the regional service cluster. The leader role demands that municipalities concentrate on their core activity and create strategic partnership arrangements with private service providers to take care of the related support activities. So far, co-operation with private service providers has mostly been limited to purchasing without any common goal. Nonetheless, acting in network requires more strategic co-operation between the actors. Public sector actors should be responsible and control the whole network, for example creating it, finding partners and evaluating the outcome. The research includes the development process of the social and health care sector reform in Päijät-Häme province, Finland, a case which we analyze using the framework of the regional service sector. In this reform, the hospital district is transforming into a new organizational structure which includes all the services of social affairs and health. It is a pilot project in Finland. The purpose of the research study is to create concrete tools how to develop, govern and measure the impacts of regional service cluster. The main research questions are: - What kinds of ways of action and rules should the developer network pursue? - How democratic processes can be assured in the network service structure? - How municipalities’ ownership is managed in the long run? - How the efficient development of human resources and services is taken care of in this network structure? - How the efficient management of the non-public service providers’ network should be governed? The framework can be used in every occasion when municipalities are developing new ways of maintaining their responsibilities of organizing different services to their inhabitants.