The technological, economic and institutional aspects behind the development of biotechnology industry in Turku region, Finland

This paper examines the recent development of biotechnology related industry in the Finnish city of Turku, where especially pharmaceutical industry has adopted the use of post-1970s molecular biology breakthroughs in ?biotechnology?. Finland is now listed in numbers of biotech firms as the 10th largest in Europe and Turku is the only Finnish city mentioned in the European Commission report among the 20 most significant European biotech centres (2000). The interest of study is to scrutinise the dynamics behind the development as a combination of technological, institutional and economic factors. The main objective of this study is to focus on the link between technology and institutions but also on the role of different organisations in the process of building capability to produce new innovations and new industrial activity. This paper claims that the rapid development of the biotechnology industry in the 1990s in Turku arises from a much older story, with historical capabilities been gradually built up especially within pharmaceuticals over decades both in industry and university research. The interaction between universities and companies has been primarily driven and institutionalised by larger pharmaceutical and diagnostic companies in the past, and more recently by smaller start-ups and spin-offs. The latter do not have large corporate R&D capabilities and must thus depend to a greater extent on external research links. From the university point of view, the interaction has been more based on resource constraints than a dedicated strategy for developing co-operation in the field of biotechnology. From the policy standpoint, the development of the innovation system in Turku to support a new technology area has been different from many other Finnish cities, in a way that public sector has not played a very active role in the beginning. For a long time, the mobilising of local resources and the successful attempts to influence national S&T policy have mainly been a result of a network of individuals working in the industry and in the universities rather than a general strategy of the universities or the local government. More recently, the City of Turku has been much more active and even instrumental in building new institutions and infrastructure to support the growth of the new industry. Thus, the rise of Turku should be seen as building on older capabilities, recently driven forward by new institutions that have come about due to resource constraints, external economic shocks and fundamental changes in the global pharmaceutical industry. The new ?BioTurku? has arisen, therefore, more as a reconsolidation of expertise across sectors under a new banner of ?biotech?, which has in turn, allowed new configurations of innovative actors to link up and create new technological services and products as well. As a result, a variety of earlier unrelated sectors in food, pharmaceuticals and materials sciences, have now been pulled together with a common technological base. This development has also made it easier for the policy makers to formulate a focused strategy for local innovation policy.