ESIC European Service Innovation Centre REPORT. Proceedings report of the peer review in the Canary Islands

Transcription

1 ESIC European Service Innovation Centre REPORT Proceedings report of the peer review in the Canary Islands

2 ESIC in Brief Increasingly, service innovation plays an instrumental role in the transformation and upgrading of traditional economic sectors and industries into more productive, competitive and high value-added business eco-systems. Considered as being multi-dimensional in nature, service innovation comprises innovation in services, service sectors or service industries that are provided by service entrepreneurs and service firms. It also takes place in manufacturing industries, adding further value and contributing significantly to overall productivity and profitability. There is a growing need to assess, analyse and demonstrate what impact service innovation has on industrial change and to assist Member States and regions towards a greater understanding of service innovation as a driver of industrial transformation and future competitiveness. The European Service Innovation Centre (ESIC) is a two-year initiative commissioned by the European Commission s Directorate-General for Enterprise and Industry to capture and demonstrate the dynamics and large-scale impact of service innovation as well as to assess how service innovation impacts on competitiveness, industrial structures and regional development. It will also focus on assessing the implications and impacts of service innovation on employment structures, economic patterns and on value creation. Primarily, ESIC will provide customised advice to six selected model demonstrator regions (the Canary Islands, Emilia-Romagna, Limburg, Luxembourg, Northern Ireland and Upper Austria). The initiative will also help Europe s other regions and Member States to make better use of the transformative power of service innovation in strengthening existing and emerging industries and markets and to develop better industrial policies and smart specialisation/cluster strategies. The goal of creating a favourable eco-system for service innovation will boost supportive infrastructures and business conditions that, in turn, will facilitate the take-up of innovative services throughout the economy. The copyright to this document belongs to the European Commission. Neither the European Commission, nor any person acting on its behalf, may be held responsible for the use to which information contained in this document may be put, or for any errors which, despite careful preparation and checking, may appear. This work is a part of a service contract for the Enterprise and Industry Directorate-General of the European Commission. The views expressed in this report, as well as the information included in it, do not necessarily reflect the opinion or position of the European Commission and in no way commit the institution.

3 Table of Contents ESIC in Brief 1. Context and objectives of the Peer Review 1 2. Summary of the Peer Review Sessions 2 3. Conclusions and Next Steps 11 Appendix A : List of Participants 12 Appendix B : Agenda of the Peer Review 14 This work is a part of a service contract for the Enterprise and Industry Directorate-General of the European Commission. The views expressed in this report, as well as the information included in it, do not necessarily reflect the opinion or position of the European Commission and in no way commit the institution.

4 1. Context and objectives of the Peer Review This proceedings report summarises the outcomes and conclusions of the peer review workshop organised by ESIC in the Canary Islands on the February The peer review workshop brought together ESIC partners, experts and key regional stakeholders with the aim to develop an action plan and roadmap that will facilitate the transformative power of service innovation in the Canary Islands. The starting point of the peer review was given by a Summary Assessment Report prepared by a team of ESIC that analyses the potential role that service innovation can play for the region. The Canary Islands is among the most visited regions in Europe and thus, tourism has been the backbone of its economy for several decades. International competition to attract tourists is, however, becoming increasingly intense and each region needs a diverse service offering in order to ensure that it receives a range of visitors and benefits from the income that they generate expenditures. Until now, the Canary Islands have relied on the traditional sun, sea and sand approach, even though the region has potentially much more to offer, especially as each of the seven islands has its own specific characteristics. The development of tourism in the region has largely been driven by multinational tour operators and hotel chains that have not paid much attention to the changing needs of the users or tourists. In addition, tourists want more than an hotel-experience but local service providers have not been very active in developing new activities for these tourists who are seeking new experiences. Against this background, the Canary Islands aim to develop a more versatile tourism sector that is supported by, and also serves as leverage for, other industries such as energy, ICT, agro-food, transport and logistics. This is especially the case as, through joint diverse initiatives, the economy of the region can benefit from a larger number of tourists throughout the year. The summary assessment report of the ESIC team identified the following challenges, in addition to those described above, that provided the framework for the peer review. 1) Diversification of the current provision for tourists is necessary to escape from low-cost competition. 2) There is a lot of potential to diversify the tourism sector in new, emerging industries on the Canary Islands, yet it is difficult to innovate in the traditional core of the tourism sector. 3) ICT, Agro-food, Green industries, Logistics and ICT can promote innovation in tourism, but there are notable barriers in these supportive or enabling sectors that hinder future development. 4) Promoting cross-sector links is hampered by limited cross-sectoral communication and the sector specific approaches of some existing policies, such as the traditional mono-sector cluster policies. 5) Within the current innovation policy mix, the policies promoting the technological and the R&D driven (supplyside) innovation are still dominant. In this context, the objective of the peer review was to: Enhance the understanding of the systemic approach that can unlock the potential in service innovation; Strengthen the development of the large-scale demonstrator (LSD) strategy; and Provide external input into the policy development of the Canary Islands. As such, this peer review facilitated policy learning and provided external input into the region s policy development. The policy learning involved promoting a better understanding of the systemic approach and the ways in which regional policy-makers can harness the transformative potential of service innovation. Based on the outcomes of the peer review, the ESIC team will prepare a policy brief including a set of policy recommendations and an action plan. European Service Innovation Centre - 1

5 The European Service Innovation Scoreboard, the summary assessment reports, peer review workshop proceedings and policy briefs are available online on the ESIC website at: 2. Summary of the Peer Review Sessions Session: Welcome Mr Juan Ruiz Alzola, Mr René Wintjes and Mr Henri Lahtinen The peer review was organised as a joint event between three islands. The majority of the participants, as well as the speakers, were in Tenerife, while some in Gran Canary and Lanzarote joined the workshop via a video link. The event was opened by the Director of Agencia Canaria de Investigación, Innovación y Sociedad de la Información (ACIISI), Juan Ruiz Alzola, who emphasised the importance of services to tourism and welcomed the work of ESIC, in this respect. The welcome speech was followed by a short tour de table and an introduction to the day including the agenda and the objectives. The Chair, Mr René Wintjes, from UNU-Merit, talked briefly about the importance of learning by doing and pointed out that the peer review was a joint effort in which everyone s participation was important. Then the floor was given to Mr Henri Lahtinen, Ramboll Management Consulting, who introduced ESIC, the model demonstrator regions and the challenges that they are trying to tackle with the help of ESIC. Session: Large-scale demonstrator strategy Mr Juan Ruiz Alzola, Mrs Alejandra Martinón, Mrs Ana Castañeda and Mrs. Anna van Welie In the first working session, Mr Juan Ruiz Alzola presented the regional challenges of the Canaries. He also created a link between tourism and the smart specialisation strategy (RIS3) by suggesting the diversification of high added-value activities across the value chain, as a means of achieving smart and sustainable tourism. Concrete examples were provided by Mrs Alejandra Martinón, Cabildo Insular de Lanzarote, and Mrs Ana Castañeda, Cabildo Insular de La Palma. The former explained how the island of Lanzarote has promoted a model based on sustainability since the 1960s, whilst the latter described how the island of La Palma has gathered 52 companies under the Star Island brand related to astro-tourism. The commentary of Mrs Anna van Welie, from Zuyd University, contained a European Service Innovation Centre - 2

6 list of important observations. She called for further profiling of tourists in order to be able to identify the various segments of visitors and pointed to the importance of offering unique experiences based on tailor-made services. She concluded by stating that the Canary Islands could have a lot more attractions to offer to tourists than are currently provided or enjoyed. Key points of this session: The RIS3 strategy of the Canary Islands takes into account the specific characteristics of the Outermost Regions (ORs) whilst aiming to reinforce the goals of the Europe 2020 strategy namely, smart, sustainable and inclusive growth; The strategy contains the following five priorities that all involve service sector participation: o Smart and sustainable leadership in tourism; o The European Mid-Atlantic Reference; o Socio-economic valorisation of specialised R&D; o Digital Agenda (ICT); o Green Growth: assuring sustainable growth; Tourism is very important for the Canary Islands, as it contributes 29.6% of the region s GDP and 34.7% of its employment, but overall labour productivity in the tourist industry is at a low level and it is difficult to increase this level because of the needs for a large number of employees with relatively low skills; Thus, the main objectives are to enhance the competitiveness of tourism, as well as to increase the diversification of high value-added activities in the value chains across all sectors particularly as the majority of the service innovations and the potential high-value added activities are not in the tourist industry itself, but in other industries that supply goods and services to the tourist sector; The Canary Islands is the top tourist attraction in Europe measured by number of nights spent in hotels, campsites and other collective accommodation establishments, but this also has a drawback in terms of its lack of any sense of urgency and awareness; Tourism started to develop on the island of Lanzarote in the late 1960s; Due to the strong influence of Cesar Manrique, 1 the painter, sculptor and architect, there are very few or negligible negative effects from tourism. His creative ideas, coming from outside the tourism industry, concerned ways of exhibiting and enjoying the beauty of landscapes as natural art, while preserving this natural and cultural beauty. The importance of landscapes and sustainability was emphasised by the introduction of a regulation and a business-model, which demanded that any activity must take account of the island s natural and cultural heritage; From the 1970s onwards, the public administration began to implement action plans for tourism development in terms of sustainability and the preservation of the environment, resulting in the following milestones: o Declaration of natural and environmental protected areas and spaces in the o island (1987); Lanzarote s zoning and rural plan which established a model of a gradual tourism, infrastructures growth and restrictions for new touristic accommodations (1991); o Declaration by the UNESCO of the Man and Biosphere Status (1992); o Tourism moratorium (2000); o Reserve Biosphere Strategy ( ); o Since 2004, different policies have been adopted to preserve the natural heritage, for agriculture and farming, sports, filming locations and mountain biking; Lanzarote has succeeded in bringing public administrations, private sector actors, tour operators and local people together in several initiatives such as Tasting 1 European Service Innovation Centre - 3

7 Lanzarote, Lanzarote a Natural Film Location, Sports within Volcanoes and Lanzarote s Cycling Route On the island of La Palma, the smart tourism theme is star gazing. The Astrophysical Observatory Roque de los Muchachos, inaugurated on La Palma in 1985, has become the most important observatory in the northern hemisphere. Its establishment was followed by a law in 1988 to protect the quality of the sky for astronomical observation; At the same time, the importance of tourism has increased, and various strategic and marketing plans have linked La Palma s development of tourism with weather, beaches, and landscapes as well as the sky and its stars; In 2009, the island government started leading the Stars tourism table in order to create a new attraction for tourists around starlight - Astro-tourism; Over the years, work has been done on branding an astronomical image for service providers. The brand is called Stars Island La Palma, and currently 52 companies such as hotels, restaurants and other service companies, have acquired the label. One of these, the restaurant La Muralla, has created a g-astronomic menu, which serves dishes that resemble astronomic phenomena such as planets; Sustainable tourism offers significant opportunities: o Development of well-targeted strategies for regions; o Close links between sectors such as hospitality creative industries transport; o Careful targeting of potential customers and management of customer experiences are required; o The seven islands, each with their own characteristics, should use their unique selling points to tap into these opportunities (diversification); o A better understanding of the user needs is crucial and more attention should be paid to niches or emerging new markets; o Thinking ahead is also important: what will tourists want in ten years from now? Who are the tourists? The values and behaviour of travellers are changing - there is more concern about the environment, and less focus on groups, while travellers are becoming increasingly individualistic and are demanding unique experiences and tailor-made or customised services; o Future consumer trends: fluid identities, combinations of, for example, luxury and backpack, short and long trips, the desire for authenticity and also simplicity, as well as constant change; o Future tourist activity profiles could consist, for instance of health, second-home living, authenticity, food and sports. So, tourists' demands diversified offer from the Canary Islands, and not only from the hotels. The examples of Lanzarote and La Palma demonstrate that joint, collaborative initiatives involving a variety of actors and following a thematic approach, form the basis of a useful and smart diversification strategy. Session: Framework conditions for service innovation Mr Henri Lahtinen and Dr Metka Stare This session focused on the necessary framework conditions for service innovation in the Canary Islands. Initially, Mr. Henri Lahtinen, Ramboll Management Consulting, presented the ESIC Summary Assessment Report on the region, and concluded that, in theory, the Canary Islands are an ideal test bed and living lab for service innovation but, in practice, a number of challenges need to be overcome before it will be possible to fully capitalise on this opportunity. The table below summarises the key points arising from the summary assessment report: European Service Innovation Centre - 4

8 Function of the innovation system Entrepreneurial activities Knowledge development and transfer Innovation and business model generation Strengths/assets Well-developed entrepreneurial attitude Relatively high share of people with tertiary education. Some subfields excel in their domain, for example, marine technology, astrophysics, water and renewable energy Relatively good knowledge infrastructure in some areas such as energy and astrophysics Innovative solutions and expertise can be found in various sectors such as energy and water Weaknesses/challenges Low self-employment Low level of private sector R&D Low level of European/ international cooperation Knowledge output in terms of patents and publications lower than the average of the EU27 and mainland Spain. Low level of general education High un-employment among young, highly educated people Brain drain Low capacity in many firms to capitalise on knowledge The fit between knowledge supply and knowledge demand is not optimal Lack of an innovation culture Overly-heavy bureaucracy Financing innovation and growth Collaboration and networking New financial instruments for innovative entrepreneurs such as through SODECAN Relatively good networks among policymakers Inter-sectoral and cluster networks and collaborative organisations Companies struggle to find funding Lack of private funding to match public support Lack of cooperation and communication between clusters/sectors Lack of private/public collaboration The administrative model is complex with relatively high levels of bureaucracy and inefficiency. According to Dr. Metka Stare, from the University of Ljubljana, the Canary Islands are not alone because, throughout Europe, the broader framework conditions have to be adapted towards service innovation, since the value creation and resulting productivity cuts across the whole economy. It requires problem and solution based approaches, interdisciplinary competences, co-creation, the use of digital technologies, cooperation amongst stakeholders and policy learning. Key points of this session: European Service Innovation Centre - 5

9 Socio-economic context: due to the resilience of tourism, the economy has not decreased. The private sector is characterised by SMEs and is responsible for almost half of the gross expenditure on R&D. Services contribute over 80% of GDP; Strengths and weaknesses have been identified in each of the five elements of the innovation system. The level of entrepreneurship is lower in the Canary Islands compared to other similar regions such as the Balearic Islands and Greece, and there is lack of internationalisation amongst the businesses; Some research excellence in technological sub-fields, such as marine technology, astrophysics and renewable energy exist and is related to specific natural conditions ( living-lab ). The outputs of these labs, in terms of patents and scientific publications as well as economic and service innovation impact, remain modest; The high level of bureaucracy is a barrier to innovation, as is the lack of an innovation culture. These are also reflected in the low level of business R&D and there is a also a need for increased availability of seed and venture capital funding; There are several (mono-)sectoral networks and cluster organisations but they seem to work in silos and also the share of innovative SMEs that collaborate with their peers is low; European manufacturing is under heavy pressure as a result of globalisation, therefore new business models and new levers of value creation are needed (ability to transform); Service innovation is reflected in value creation that cuts across the economy; At the EU level, service innovation is not sufficiently visible in policy objectives or measures, as the goals of innovation policy still tend to be influenced by support for traditional R&D and are biased towards technology: o Thus a move beyond new technologies to innovative solutions is required; The framework conditions for service innovation comprise human resources, dynamic markets, digital infrastructure and supportive public policy: o Human resources can be interpreted as new knowledge, skills (digital literacy) and competences adapted to service innovation. The resources are interdisciplinary and embrace problem and solution based approaches, as well as knowledge co-creation; o o o Dynamic markets relate to the degree of competition, regulatory and tax systems and administrative procedures, as well as to new forms of financing and to the role of demand; Fast and efficient capacity is important for digital infrastructure and services, which relates to broadband connection, wireless and mobile access, as well as the availability of KIBS that facilitate the deployment and the efficient use of new technologies; The complex nature of service innovation sets certain requirements for supportive public policy. There needs to be a coordinated mix of different policies, while cooperation and networking amongst the stakeholders is crucial, as are demand-side policy measures, such as public procurement and innovation vouchers; It is also important to move from policy imitation to policy learning. The discussion confirmed that many innovation problems and barriers and the policy challenges related to service innovation are not unique. Whilst the Canary Islands are unique in many ways, the region shares its need to transform innovation policy with many other regions in Europe Session: Policy mix for (service) innovation overall policy landscape - Mrs Alma Cruz and Mr Petri Räsänen The last session of Day 1 focused on the overall policy landscape and innovation platforms as a means of bringing the various actors in the innovation ecosystem together. Mrs Alma Cruz, Instituto Tecnológico de Canarias (ITC), presented the evolution of innovation policy in the Canary Islands, starting from and ranging through the third plan for European Service Innovation Centre - 6

10 RDTI in the period to the current RIS3 strategy. Traditionally, innovation policy has focused on the main sectors of industrial economy but a need has been identified to design new service innovation policies with a focus on the tertiary sector. Mr Petri Räsänen, from the Council of the Tampere region in Finland, explained how the innovation policies in Finland are shifting from traditional R&D driven clusters to innovation platforms. This is due to the increasing importance of multi-disciplinary, collaborative-innovation, as well as the higher expectations resulting from organising cooperative demonstration platforms rather than merely providing traditional R&D subsidies. Key points of the discussion: The third plan for RDTI in is currently being reviewed and updated: o The plan includes specific strategies aimed at generating knowledge and attracting talent and excellence, transferring knowledge into innovation and its stimulation, updating legislation and restructuring organisations; o The selection of priority sectors has been sharpened, and these currently consist of: tourism; astronomy and marine sciences; health; sustainability and natural resources; agriculture and food; and educational, social, cultural and economic development; o The next steps include the drafting of operational programmes, taking account of the RIS3 guidelines; Innovation policies have traditionally focused on the main sectors of the industrial economies in Europe and in Spain. The tertiary sector is becoming increasingly important, whilst service innovation adds value and can create a competitive edge. Thus, there is a need to design new service innovation policies; Since 1994, regional innovation policy initiatives that also focused on generating knowledge (R&D) and transferring knowledge (university-industry links) have been developed in Finland under the Centre of Expertise Programme. Tampere is one of the most R&D intensive regions in Europe, but also in Tampere the economic benefits of the traditional technology-push policy were disappointing. A more demand-side approach was needed involving more cooperation, new combinations, further systems integration and a better understanding of customer needs. The development of innovation policy used to be focused on clusters and cluster policy making. In 2008, it was accepted that the technology-push and the mono-sector cluster model no longer responded to the changing needs of society and thus, it was necessary to rethink and open up the Finnish innovation policy: o The existing clusters were no longer seen as safe bets ; o Collaborative innovation in businesses and societies assumed an increasing importance; o There were increasing expectations of returns on investments in innovation policy: Closed publicly funded research programmes create too little business; Innovation subsidies for companies do not create sufficient growth; The structures and bureaucracy of the innovation system were becoming overwhelming; The focus shifted to emerging ecosystems in which new policy tools replaced inefficient ones. The rationale behind this shift was that exceptional capabilities for collaborative innovation can provide a competitive edge for regional innovation ecosystems and policy-makers can organise this situation through promoting platforms; Innovation platforms, combining various people, processes and facilities, provide a new method of funnelling the flow of innovation in a sustainable way. This flow is from inputs such as basic research and knowledge creation, through the interaction fields of human resources and networks, networks of funds, regional clusters, university business collaboration and IP strategies, to outputs such as jobs, wealth, new products, services and markets and companies; The key factors in platforms, which set them apart from traditional clustering, include communities, talents and the global ecosystem orchestrators as drivers, creation of European Service Innovation Centre - 7

11 attractive environments for co-creation ( trying out new stuff ) and speeding-up going-to-market, capacity building and systemic projects, as well as demand pull instead of technology push; The Demola and New Factory concepts, that have been developed as new innovation platforms in the Tampere region since 2009, are based on the following, guiding principles: o Create new combinations of knowledge (tapping into young talent); o Move faster - from an idea (kick-off) to the prototype (pitch) in just 4 months; o Make it easily affordable to start but huge financial support is not necessary; The platforms have achieved encouraging results in four and a half years, including increased innovation capacity and continuous impact on the regional community. The 3.3m public investment, which represents less than 1m per year, has resulted in: o 535 innovation projects responding to problems, challenges and needs arising from real life; o innovation community members and 170 partner companies; o 100+ start-ups; o 500+ jobs; o 18m funding for start-ups and innovators. The Demola platform brings together companies with real cases or problems to be solved, multidisciplinary teams of students and university staff and thus, acts as a catalyst for practical university-business co-creation; Demola is open to any interested student. Participation is rewarded with credits for degree programmes at the university, and the student teams own the project results, which in turn can be licensed by the project partners or companies. The IPR framework has been designed with, and approved by, the project partners and it meets the requirements of the legal policies of global enterprises; The Demola network currently covers Finland, Hungary, Latvia, Lithuania, Slovenia and Sweden and further expansion is expected. The discussion concluded that such a transformation of innovation policy, through innovation platform such as Demola, was very relevant to the Canary Islands, as novel policy instruments are currently needed to implement the new strategy. Session: Large-scale demonstrator strategy Mr René Wintjes The second day began with a short recap of the previous day, conducted by Mr. René Wintjes. He pointed out that there were many common aspects that had emerged in the various presentations and discussions. Many of the policy initiatives are thematic, interlinked initiatives involving joint efforts and combinations of different actors coming from different disciplines. There was also a common aspect in the references made to the unique natural conditions of the Canary Islands, including astronomy and agriculture on volcanosediments, that could open up opportunities for further servitisation. This aspect related to the conclusion from the first day that the Canary Islands have a lot more to offer. There are many under-exploited resources or assets such as a large number of unemployed but highly-educated individuals and the bio-diversity of the region, which is a unique selling point. User-orientation was also a common element in the discussions but there are many types of users and so what do tourists want or need and what do entrepreneurs need? There were also many common elements relating to the relevant policy options that included: co-designing policy initiatives or formats that support the nurturing and demonstration of small ideas; using young talent as a source of innovations and solutions; and working in transversal, cross-sectoral groups. European Service Innovation Centre - 8

12 Session: Crossing the sectoral boundaries: towards concrete activities Mrs María José Hernández, Mr Pablo Lorenzo and Mrs Cecilia Hernández Rodríguez The session consisted of three presentations. Mrs María José Hernández explained how the Effi-e application had been developed to encourage more eco-friendly behaviour on the part of tourists and thus, contribute to reductions in the level of CO 2 emissions. According to Mr Pablo Lorenzo, the Lopesan Hotel Group had already been able to scale down its CO 2 emissions significantly and decrease its energy consumption by implementing the 3 Rs concept - reduce, reuse and recycle. The experiences of Lopesan should be shared with other hospitality establishments to enable larger scale reductions in the use of energy and improvements in energy efficiency in the Canary Islands. Similar efforts could be supported by the funds provided by CDTI. In her presentation, Mrs Cecilia Hernández Rodríguez, described the various forms of support that CDTI can offer for business R&D&I. Key points of the discussion: Effi-e is an IT-based application to reduce the carbon footprint of tourists; Effi-e is expected to combine the service providers like hotels and other tourist infrastructure, and the tourists through the IT platform that can be used to reduce water and electricity costs by monitoring spaces while increasing the environmental awareness of visitors; More environmentally-friendly behaviour of tourists can be rewarded through a bonus programme that offers eco points; So far only one hotel is testing the Effi-e application but other establishments are being encouraged to join. Currently no feedback has been collected from the users, nor has the business model been developed and tested, but the example has demonstrated that tourists and hotels on the Canary Islands can form a test-bed for ICT-based ecoinnovations; Also for Lopesan, the Canary Islands are a test-bed for their eco-innovation based business model. The well-recorded results and impacts represent a powerful demonstrational tool that can promote the wider use of such service innovations; Instead of simply using energy, hotels can also produce it, for example, by installing solar panels. Considerable savings in the use of energy can be achieved via more efficient management - 30% energy reduction in four years in the case of Lopesan; The Lopesan hotel group has been making investments in green technology since 2007 to generate 7 GWs of clean energy without consuming fuel, gas or electricity; More attention is also being paid to waste management through the 3 Rs concept reduce, reuse and recycle; CDTI operates all over Spain, but traditionally not a lot of funding has been funnelled to the Canary Islands. However, the number of applications is rising; Apart from specific grants, funding can be applied for at any time through open calls; Funding can be used to support industrial research, experimental development and innovation; R&D&I funding is available for new or improved processes, products and services. The overall approach is, however, biased towards technological innovation and applications for soft innovation, such as process innovations or new business models, are not yet well received. European Service Innovation Centre - 9

13 Brainstorming and concluding session In the final session, the participants were invited to engage in a dialogue with the members of the Peer Review Panel. The question of productivity in the tourism sector received considerable attention. Although the sector employs nearly 35% of the labour force, the value added corresponds approximately to 30% of GDP. It was also stated that the private sector is benefiting from tourism but it is not investing in the development of human skills or trying to attract talented individuals to the region. The impression of a lack of commitment was strengthened by the absence from the private sector of tourism sector representatives. Therefore, it was very important to start with small pilot actions targeting niche markets and new service providers and to demonstrate that it is possible to generate a transformation in tourism despite the current framework that is largely run by international tour operators and in which service providers are not really close to the users or markets. Such a transformation not only involves the sector itself but also other sectors that have a contribution to make to new business models and value chains. During the session, it was acknowledged that the Canary Islands have often been among the first regions to test new technologies or innovations, such as those in water sanitation and wind energy, but the region has not really capitalised on these opportunities. The Canaries need to tap into existing talent and increase cross-sectoral and multidisciplinary approaches in order to fully use the specific characteristics of the seven islands and their ability to act as a test bed. Otherwise, opportunities will continue to be missed in the future. Key points of the discussion: The productivity of the tourism sector is low but the value creation of service innovation cuts across the economy; The private sector benefits from tourism but it is not keen on investing in related human skills; The tourism sector has remained more or less the same for several years. Examples and demonstrators are required, as evidence of the potential for transformation; The Canary Islands could, and should, be used as a test bed for tourism innovation focused on everything that future tourists might need; Despite its excellent conditions, the region has not been successful in capitalising on new technologies or innovations; Harnessing talent is crucial talent is a resource that is not being used to the fullest possible extent; The Canary Islands have a lot more to offer, as there are many unused assets and resources; Schemes like the Demola platform seem to be very relevant to the Canary Islands. European Service Innovation Centre - 10

14 3. Conclusions and Next Steps The peer review of the Canary Islands attracted a number of participants to discuss the challenges and opportunities for service innovation, the related policy mix and the wider framework conditions of the region. Despite good conditions for service innovation and innovative approaches, the Canary Islands are struggling to capitalise on these opportunities. The large-scale demonstrator approach of the region aims to diversify and increase the competitiveness of the tourism sector, supported by other emerging industries. There are several niche markets that could be developed further, such as agro-food, health related tourism (especially for the 50+ generation), luxury, experience, sports/outdoor tourism, scenery (filming) to name a few. It is, however, important to identify the different types of tourists who are coming to the islands in order to be able to provide them with tailor-made services (keeping in mind that no two tourists are alike). Until now various sectors have been developed as clusters that promote the active participation of members within the clusters but not any real cooperation between the clusters. One of the underlying barriers to developing the Canary Islands large-scale demonstrator is this lack of cross-sectoral co-operation, especially on the two main islands. The cases from Lanzarote and La Palma illustrate what can be achieved when the public, private and third sector work together. These experiences need to be shared and discussed. Overall, cooperation and networking amongst innovation stakeholders should be promoted, as these stakeholders have complementary assets and could benefit from learning from each other. Unemployment and the inability to tap into talent represent other pressing challenges in the region. Therefore, establishing a platform similar to Demola could help to involve more talent by bringing together people with various skills, competences and backgrounds to develop and demonstrate new business opportunities and business models. Otherwise, the Canary Islands will continue to lose first mover advantages and benefits and these will be reaped elsewhere. The energy sector, for instance, has significant potential in terms of solar, thermal and wind energy, but these sources are not being used to the fullest extent. The energy saving scheme of the Lopesan hotel group, for which the Canary Islands serves as a test-bed and living-lab, illustrates that great reductions in the use of energy can be achieved. Also, with the introduction of smart grids, energy could be produced for the use of others, presuming that the legislative framework permits such a development and that the various stakeholders are willing to invest in the greater good of the whole region. Following the workshop, ESIC and the peer review panel will draft a policy brief, with a list of policy recommendations and suggestions for an action plan, which will be discussed with the region at the end of March European Service Innovation Centre - 11

15 Appendix A : List of Participants The Peer Review Panel: Anna van Welie, ESIC Regional Peer, Zuyd University Metka Stare, ESIC expert, University of Ljubljana, RESER Petri Räsänen, ESIC Regional Peer, The Council of Tampere Region Regional Stakeholders: Alberto Villalobos Márquez, ASINTE Alejandra Martinón, Cabildo de Lanzarote Alicia García Espino, Dirección General de Ordenación y Promoción Turística. Gobierno de Canarias Ana Castañeda Pérez, Cabildo de La Palma Anastasia Díaz, Cluster Logística y Transporte Armando Torres Gallo, Segai - ULL (University of La Laguna) Beatriz Amigó, Gobierno de Canarias Carlos Andrés Navarro Martínez, FULP Carmelo León, ULPGC Catalina Ruiz, ULL Cecilia Hernández, CDTI David López Pérez, Segai - ULL Desiré Brito, ASINTE Eduardo Manrique de Lara Enrique Padrón, ASHOTEL (Asociación Hotelera y Extrahotelera provincia Santa Cruz de Tenerife) Gonzalo Piernavieja, ITC (Instituto Tecnológico de Canarias, S.A.) Isabel Quevedo, Cámara de Comercio de Lanzarote J. Luis Saavedra, EDEI CONSULTORES José Andrés Moreno, ULL (catedrático ciencias de la computación e inteligencia artificial) Jose Manuel Padrón, ULL José Manuel Valle Feijóo, ENDESA Juan Ruiz Alzola, Gobierno de Canarias Julián Zafra, Gobierno de Canarias D.G. ASUNTOS ECONÓMICOS CON LA U.E. Lola Rodríguez, Técnico de innovación y medioambiente de ASOLAN Lucía Dobarro Delgado, Instituto Tecnológico Canarias Manuel Caballero, ICIA (Instituto Canario de Investigaciones Agrarias) María Victoria Cairós, Cámara de Comercio de Tenerife Michael Gourion, REGENERING Pablo Lorenzo, LOPESAN Patricia Fraile, Cluster Excelencia Tecnológica Pedro Fuentes, Gobierno de Canarias Pelayo Suarez, Instituto Tecnológico Canarias European Service Innovation Centre - 12

16 Rafael Pérez Jiménez, IDETIC - ULPGC Rafael Zárate, Cluster Biotifarm Rodrigo Trujillo, ULL Victor Quintero León, FGULL ESIC Team: René Wintjes, UNU-Merit Henri Lahtinen, Ramboll Management Consulting European Service Innovation Centre - 13

17 Appendix B : Agenda of the Peer Review Venue: ITC Institute, Plaza de Sixto Machado n3, Tenerife 18 th February :00 9:30 Arrival Chair: Mr. René Wintjes (UNU-Merit) 9:30 10:00 Welcome and tour du table Juan Ruiz Alzola, Director, Agencia Canaria de Investigación, Innovación y Sociedad de la Información Introduction: objectives of the workshop, today s agenda: René Wintjes, UNU- MERIT Presentation of the European Service Innovation Centre initiative: Henri Lahtinen, Ramboll Management Consulting 10:00 11:15 Canary Islands large-scale demonstrator strategy Presentation of the regional challenge: Juan Ruiz Alzola, ACIISI Case example from the Canary Islands how the region is supporting tourism by emerging industries /i.e. what the strategy means in practise: - Case Tourism and volcanology, Lanzarote, Alejandra Martinón, Cabildo Insular de Lanzarote - Case Tourism and stargazing, La Palma, Ana Castañeda, Cabildo Insular de La Palma Commentary note: Anna van Welie, Zuyd University Panel discussion 11:15 11:30 Coffee break 11:30 12:45 Framework conditions for service innovation Presentation of ESIC s assessment on the Canary Islands: Henri Lahtinen, RMC How the Canary Islands Government can support the tourism sector?: Juan Ruiz Alzola, ACIISI Framework conditions for service innovation: Metka Stare, University of Ljubljana, Slovenia / RESER Panel discussion 12:45 14:00 Policy mix for service innovation I overall policy landscape Innovation policy on the Canary Islands: Alma Cruz, ITC ESIC s assessment of the policy mix: Henri Lahtinen, RMC Development of systemic innovation policy - Demola and other innovation platforms: Petri Räsänen, Council of Tampere region Discussions of initiatives that could serve as demonstrator-initiatives Panel discussion and conclusions of Day 1 European Service Innovation Centre - 14

18 19 th February :00 9:15 Arrival 9:15 9:45 Large-scale demonstrator strategy Recap from Day 1 and expectations for Day 2: René Wintjes 9:45 11:15 Crossing the sectoral boundaries towards concrete activities 11:15 11:30 Coffee break Case Effi-e (IT, tourism and energy), María José Hernández, Effi-e Case Lopesan (tourism, energy, IT), Pablo Lorenzo, Lopesan CDTI research and innovation activity support to regional enterprises: Cecilia Hernández Rodríguez, CDTI Panel discussion how to increase the cross-sectoral co-operation and increase competitiveness across sectors? 11:30 12:15 Brainstorming session: diversifying the service offering on the Canaries by focusing on region specific characteristics 12:15 13:00 Concluding session ESIC s findings and recommendations so far Structured discussions of ESIC s findings and recommendations so far: ESIC team Wrap-up and conclusions of Day 2 Please note that more tools and advice can be found in the Smart Guide to Service Innovation that is available at The work of the European Service Innovation Centre is part of a service contract for the Enterprise and Industry Directorate-General of the European Commission, financed under the Competitiveness and Innovation Framework Programme. The information and views expressed in this report are those of the authors and do not necessarily reflect the official opinion of the Commission. The Commission does not guarantee the accuracy of the information. Neither the Commission nor any person acting on the Commission s behalf may be held responsible for the use which may be made of the information contained therein. Please find further information on the European Service Innovation Centre at ec.europa.eu/enterprise/initiatives/esic. European Service Innovation Centre - 15