Innovation systems for sustainability: insights from wood construction businesses and land use planning in Finland

Innovation is widely recognized as a key driver of economic growth and development, yet sustainability-oriented innovations have received comparatively less attention. This dissertation adopts the Regional Innovation System (RIS) perspective to explore the relationship between innovation and sustainability, while acknowledging the importance of financial performance for ensuring companies’ success. Article I present a systematic literature review aimed at assessing the current state of scientific literature on RIS for sustainability with a particular focus on regions situated between two or more adjacent nation states—referred to as Cross-Border Regional Innovation Systems (CBRIS). The findings highlight a notable absence of sustainability considerations in CBRIS literature and a lack in understanding regarding the factors that facilitate or hinder the integration of such systems. Articles II and III are empirical studies that apply RIS framework in the context of land-use planning and construction in Finland. The data for these studies are based on, respectively, a survey targeting Finnish municipal civil servants involved in land-use planning and adjusted annual financial data from forest-based companies. The findings of Article II indicate that in urban municipalities, innovation-related actors and institutions play a more prominent role in land-use planning, with an emphasis on sustainable building objectives. In contrast, other municipalities tend to prioritize ecosystem service objectives. Article III examines the financial performance of Finnish sawmills and wood element producers as distinct stages in the wood construction value chain during 2012-2021. The results reveal a declining trend in the solvency of wood element producers and a wide variation in profitability. Overall, while differences in financial development and performance were found between the two production stages, the findings reflect characteristics of typical manufacturing industries. While innovation and agglomeration are often closely linked in current discourse, regions with lower levels of agglomeration have received comparatively less attention. The findings of this dissertation highlight this imbalance, particularly in cross-border and rural regions, which hold plenty of potential for sustainability-oriented path development, such as in the bioeconomy. Consequently, the dissertation emphasizes the importance of regional focus and need to consider different geographical levels in innovation research and policy design.