Developing the economic competence in Åland
The new BSR Policy Briefing explores the economic competence in Åland Islands, the autonomous region situated in the archipelago between Finland and Sweden. The empirical material for the analysis is based on the implementation of the EU Structural Fund Programme “Entrepreneurship and Competence” 2014-2020 where the authors have participated as external evaluators. In total close to 11 million euros was allocated to 72 regional development projects within the project period, including the funding from REACT for supporting regions during the COVID-19 pandemic period.
Global trends must be taken into account
Throughout history the economy in Åland has been closely related to shipping and lately also to tourism. The economy and labour market in the region were heavily affected during the Covid-19 pandemic and the subsequent travel restrictions. Global megatrends such as demographic change, technological change, climate change and globalisation have a strong impact on economic development. The recent change in the geopolitical situation has implications not only for global trade but also to regions such as Åland.
Projects have an effect on the economic competence
The authors find several examples of how the Programme and financed projects have contributed to raising the economic competence in Åland, as well as examples of how micro-level economic competence is linked to macro-level economic development of the region. The Programme played a significant role especially during the pandemic when financial support was provided to people and businesses to help kickstart the recovery of society.
However, there are also exceptions where the projects failed to meet the targets, and where the lack of economic competence may have been part of the explanation for the failure. As an example, the setup of a regional risk capital fund that was one of the prioritised ERDF projects, was closed down earlier than planned due to e.g. insufficient number of projects meeting the set criteria and lack of interest.
Networking is the key to success for small economies
The authors provide recommendations and insights to increase the economic competence in Åland.
- Pay continuous attention to inclusivity and engagement of many different stakeholder groups, to unlock the full potential of economic competence in Åland. This would mean expanding the networks beyond “the usual suspects” (e.g. key companies, educational and research institutes).
- Take advantage of the horizontal and vertical multi-level governance context and engage with actors and networks regionally, nationally and internationally.
- Pay attention to the ability to attract talent and a competent labour force. In an ever-increasing competition of talent, this is particularly important for small and remote economies.
- Transfer good practices of organisational competence from large and experienced economic actors to the SME sector. Åland has a number of innovative and growth-oriented companies with a track record of advanced organisational competence.
- Pay extra attention to participating in international networks (Finland, Sweden, Baltic Sea Region & EU) to further strengthen technical or functional competence in Åland.
- An outward-oriented attitude towards international contacts and networks as crucial for increasing learning capability in Åland. Due to the limited population, it is challenging to create critical mass in several fields of economy.
- Provide relevant incentives that motivate companies to further innovate and invest in Åland.
