Identification of Smart Regions with Resilience, Specialisation and Labour Intensity in a Globally Competitive Sector – Examination of LAU-1 Regions in Finland
Identification of Smart Regions with Resilience, Specialisation and Labour Intensity in a Globally Competitive Sector – Examination of LAU-1 Regions in Finland

Summary/Abstract: The purpose of the study was to construct smart specialisation indicators for LAU-1 regions in Finland. Established indices are based on indicators of the regions’ revealed comparative advantage and the degree of diversification in the sub-regional industrial structure. Furthermore, we introduce an indicator that can be used to assess the socio-economic importance (employment) of diversification and specialisation for a region. The indices data is based on Statistics Finland (2015) data for the 70 Local Administrative Unit level 1 (LAU1) sub-regions in Finland. The potential S3 indices measured here reveal the position of each sub-region’s smart specialisation among the 70 sub-regions in 2015. It is common economic knowledge that manufacturing industries are the most export-oriented, highly productive and thus can approximate a region’s success in international trade and competitive advantages. The study is based on three smart specialisation indices: the Herfindahl-Hirschman Index for regional resilience (HHI), the regional relative specialisation index (RRSI) based on the Balassa-Hoover Index (B-H), and the relative employment volume index in the manufacturing sector (LIMI). Through index examination, we can obtain knowledge about a region’s smart specialisation status and potential. The results reveal that each sub-region has its own smart specialisation characteristics with a different risk profile. Sub-regions like Helsinki and Tampere have a similar industrial structure to Finland as a whole and are resilient: they will benefit from nationwide economic and industrial policy, and they have a good capability of resisting economic shocks. Our study reveals that there are some other similar smaller (LAU-1) sub-regions in Finland – for example Rauma. As such, it is critical that this kind of research-based basic information be taken into account when constructing sustainable strategies for regional development. Similar calculations could be performed for all regions in Europe.

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