What is a city-owned innovation and development company?

We all know that there are public authorities of cities, and there are companies of all sizes, and then there are clubs and associations for example for all kinds of hobbyists. But do we know that cities typically own a separate company inwhich they conduct many kinds of development work that is not organisationally doable or legally easy inside of the official city administration? This is a huge but rather silent phenomenon in the field of urban innovations, typically linked to business life in the city. In Finland, even few smaller municipalities may have organised a development company together. So, a development or in some case an innovation company seems to be a must for a city or municipality, at least in Europe. What comes to practical Smart City discussions, these development companies are typically in charge of answering to researchers’ questions, or organising a stand to the Smart City expos.

To clear out this phenomenon, FinEst Centre has ordered an overview report dealing with 70 Finnish development companies. The report is written by  Dr. (Econ.) Petteri Ojala who is currently working in University of Turku. The report was supported by  FinEst Twins project (Kalle Toiskallio (Aalto), and Matti Hämäläinen (Forum Virium Helsinki)).

The work is done by academic resources, although oriented more as a basic report, based on publically available facts that before this report were not collected together. For example, majority of them are offering business services for existing companies, potential entrepreneurs, operating environments, business premises, and promoting the region. Although  majority of them are Ltd.’s, but since the background of them vary, there are also a few are municipal business units, associations, cooperatives, networks, or even univerisities of applied sciences. However, only 3% of them are located within Universities. Variation of their topical focus is wide, since half of them has a quite strict industry orientation. Over one third of them has a turnover of more than one million euros. However, only 6% (4) of them have a turnover of 5-11M€.  The turnover in 37% of them is only hundreds of thousands of euros, so in general they are rather small scale  and basically non-profit actors. Thinking of volumes of their staff, it seems to be typical that one employee equals 80 000€.

Perhaps the strongest comment to academic discussions is that the boundary spanning between siloed administrative and business domains seems to be a key function of these companies, not to mention the individual “specialists” in these units. That is, to bring different stakehodelrs  together. Thus, the report opens up the term of boundary spanning and discusses it shortly.

Read the whole report (75 pages):
Spanning boundaries in quest for vitality. An overview of Finnish municipal agencies.
By Dr. Petteri Ojala

(the report is publically available only through this Research Blog. Thus, it has no bibliographic meta-data.)