Creating open innovations in the Norwegian mining and mineral sector
Norway stands on the edge of developing the mining and mineral industry1. The Northern
hemisphere is expected to be home to vast, undiscovered reserves of minerals, and Norway is the
7th largest mining nation in this northern region. Moreover, the market continues to increase as
each person in the western part of the world consumes 15 – 18 tons of minerals each year. The
value of the metals and minerals hidden beneath the surface in Northern Norway alone is estimated
at 1500 billion NOK2. To underline the possibilities of the sector, Professor Ken Coates, Canada
Research Chair in Regional Innovation at University of Saskatchewan stated “If the mining sector is a
1000 yard race, we have gone about 2 yards.” 3 However, mining and minerals is a cyclical, non-renewable
resource industry. It is important to exploit its immense potential to contribute to balanced
economic growth and sustainable prosperity of Northern Norway. Further to ensue how mining
projects can benefit local and Saami communities. Finally to ensure that development is carried
out in a responsible and sustainable manner.
Despite high economic performance, Norway scores lower on innovation than most OECD
countries, EU and the other Nordic countries. Innovation is conceptualized as a dynamic interplay
between the forces of scientific and technological development and the forces of markets and
demands (Kline & Rosenberg 1986; Fagerberg 2005). Taking the social profile and the high focus
on the environment into account, a greater understanding of how innovation may increase social
and economic benefits to the existing and the emerging industry in Norway is needed (OECD,
2011). As the value creation in Northern Norway is lower than in the rest of the country 4, it is of
vital importance that researchers take advantage and ownership of this exceptional opportunity
that exists in this region. As it currently stands, most of the mineral and mining companies in
Norway have non-Norwegian origins. As the Norwegian economy is reliant upon growth in the
private sector to finance increased public expenditure in the future, it is especially important that
Norway is able to utilize the profits that will stem from one of the country’s most precious natural
resources. An important consideration in the mining industry is the focus on environmentally
friendly and sustainable ways of developing technology for extraction of minerals from the ground,
and ways of handling the disposal of unusable materials. Thus, this sector is knowledge-intensive
and research-based. The Norwegian Government states “Innovation and research are important parts of
the industry. A considerable innovation capability is needed to meet the consumers need for special products”
(Nordområdene, Visjon og virkemidler (Stortingsmelding 7 (2011-2012).
Tromsø University Business School (TUBS) at arranged “The Circumpolar Conference, High
North Entrepreneurship and Innovation” 26- 27th of November 2012, with a workshop for the
mineral and mining industry on challenges in commercialization. The representatives from the
industry wanted cooperation between the government and universities in order to meet the
industrial challenges in the sector. It included the need for increased focus on innovation when
working collaboratively with northern communities and people (including indigenous people).
Education is needed at the high-school-, college- and university-levels because of the shortage of
people educated in the sciences, engineers in particular. Consequently this proposal is based on the
challenges the High North must face in order to increase the breadth and width of the competenceThe mineral production (NGU, 2008 numbers) is worth 11, 4 billion NOK and employes 4 800 people in Norway. Further, the
processes to produce mineral/ metallic products has a value of 107 billion NOK, employees 22 800 people and exports for 75
billion NOK.
2 Ove Sollid, director at the Stjernøy site of Sibelco Nordic AS.
3 (Circumpolar Conference, High North Entrepreneurship and Innovation at University of Tromsø, 27-28 November 2012,
http://UiT.no/ansatte/organisasjon/artikkel?p_document_id=285954&p_dimension_id=88167&p_menu=42374)
4 This is also due to the fact that many of the larger companies have their main office outside of the Northern region, and thus the
growth in value creation is registered outside of the region.
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based work life related to mining. Through dialogue with the industry, it is clear that additional
challenges within the mining industry revolve around long decision-making processes, difficulty in
attracting the right people and issues around transport and cargo transport, which are crucial for
the mining industry (Oftedal and Foss, 2013). Therefore, in the future, the Arctic mining industry
will need new technology for extracting minerals in addition to a wide range of logistics investments
to improve roads, ports and handling equipment.
The topic for this proposal is exploring the factors conducive for open innovation in new start-ups
(entrepreneurship) and existing firms within the emerging mining and mineral industry in Norway.
New knowledge of these factors will be beneficial for the future value creation in the High North,
and will extend and strengthen TUBS industrial connection to Finnmark and Nordland based on
the work laid down in establishing the Circumpolar Conference in High North Entrepreneurship
and Innovation.
Theoretical framework and research questions
Open Innovation
With globalization the era for open innovation has begun for many firms. Open innovation is
defined as combining internal and external ideas as well as internal and external paths to advance
the development of new technologies (Rost, 2011).Thus open innovations refers to companies
being innovative using input from external resources (i.e. inventors, entrepreneurs, researchers,
partnering companies) as well as internal resources, their employees. The advantages of
cooperation is increasing in the open innovation era. The shift from purely internal R & D activities
to increasingly using academic communities and universities has started emphasizing that firms
should be open to outside innovation ( e.g. Rigby and Zook, 2002; Christensen et al. 2005). As
Chesborough, 2003 puts it: “Not all smart people work for us. We need to work with smart people inside and
outside our company”. Since open innovation requires ideas both internally and externally relations,
research has starting focusing both on how companies shall create employee networks that deliver
open innovation (Whelan et al, 2011) and so called outside – in- process where the company’s own
knowledge base is enriched through integration of suppliers, customers and external knowledge
sources. These processes may increase a company’s innovativeness (Lausen and Salter, 2006; Lettl
et al., 2006; Piller and Walcher, 2006).
The theme for this Phd application aims for generating new knowledge of factors which are
conducive to open innovation in an emerging industry like mineral and mining5. Emerging
industries are characterized by an initial small size and newness of the industry yielding high costs
relative to mature industries. Further they are characterized by technological and strategic
uncertainty (Porter, 1980). Thus in a situation with new suppliers, customers and markets both
entrepreneurs starting new firms and existing companies in emerging industries facing obstacles
in making successful open innovations. Thus the research question in this project is: Which factors
and processes are driving open innovations in new start-ups and established companies within the mining and mineral
sector?
The first aspect that will be investigated are how networks are conducive to open innovations.
Networks are structures of relations between economic actors which affect behaviour of those
involved. Through networks entrepreneurs and organisations get resources like skills, competence,
labour, capital, new information and technology, access to market etc. The impact of networks on
entrepreneurship has been documented in several studies (Granovetter, 1995; Foss 1993; Greve
and Salaff, 2003; Witt, 2004) but the relationship to open innovation has not been explored. A
positive association between networking and firm performance (Watson, 2007) and networking
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The mining part of the industry has long traditions in Norway, whereas the processual mineral industry is younger.
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and innovation (Nybakk et al., 2012) has been documented in some studies. Research show that
network capabilities strengthen the relationship between entrepreneurial orientation and spin – off
performance (Walter et al., 2006:558). Organisations can be innovative both through exploring new
ideas but also through exploiting resources they already have. Qualitative research suggest that
exploration requires that weak ties to develop into innovation organisational capabilities and future
innovation. Exploitation, on the other hand requires strong to effective utilisation and development
of existing repertoir of corporative knowledge (Harryson, 2008). Hence, both external and internal
(employees) networks, and strong and weak network architecture are likely to be conducive to
create innovativeness in new and existing companies. Thus our first research question is:
Q1: How are external and internal networks conducive to open innovation in the
mineral and mining industry?
In contrary to the petroleum industry which has long traditions to use research based knowledge
and highly educated work force on Master and Phd- level, the mineral and mining industry has
been forced to work up commercialisation competence themselves. Through the GeoNor – report
(2010) an R & D and innovation strategy directed towards sustainable utilization of mineral
resources in Norway (MINERAL 21). A spin-off from universities or ideas taking into commercial
use is called academic entrepreneurship (O’Shea et.al 2005; Wood, 2009). As universities are
increasingly devoted to fulfill their third mission (aside from research and teaching) in terms of
regional innovation, we need further insight into how new start-ups are based on the collaboration
with the universities and research institutions such as NTNU, SINTEF, UiT and NGU.
University- industry collaboration has been viewed as significant for knowlege and technology
transfer and thus regional innovation. But recent research indicate that collaboration has not yet
been theorized in the academic entrepreneurship literature (Foss, 2012). Thus scant attention has
been paid to the complexity of actors, intentions and objectives in transforming scientific
knowledge to commercial use. And few studies have investigated collaboration from the industry’s
point of view. Hardly any research has paid attention to how commercial actors in the mineral and
mining industry collaborate with research universities and which collaborative dimensions are
crucial in co- creating commercial value. Thus our second research question is:
Q2: How is collaboration between university and industry conducive to creating open
innovation in the mineral and mining industry?
In the literature also the company ownership has been viewed as factor for regional development.
The third aspect that we consider unexplored is the effect typical infrastructure in the mineral and
mining sector both in Norway and Canada; companies involved are often foreign and that local
ownership is scarce. Theoretically it is interesting to explore the manner in which domestic versus
foreign ownership influences innovation in the mineral and mining sector. The role of
organizational culture (Damanpour 1991; West and Anderson, 1992; Martins and Terblanche,
2003) and management (Amabile, et.al. 1996) has impact on the success of the implementing
innovations in organisations. Whether these differ in foreign owned or regional owned companies
is an open question. Observations of the industry in Canada suggest that innovation is more
predominant in the Canadian based companies than the foreign. However as this is only anectodical
evidence, a comparative study could be undertaken with regard to the situation in Norway. Thus
the third research question is:
Q3: How may organisational culture and management in domestic foreign owned
companies influence open innovation in the mining and mineral industry?
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In emerging industries, there is little legitimacy for commercializing new technologies. Delmar and
Shane (2004) argue that legitimacy, in terms of acceptance by stakeholders, is key to new venture
success and a precursor to performance. Delmar and Shane (2004), further insists that increasing
incremental levels of legitimacy is more difficult than attaining an initial base. Innovations by its
very nature, lacks legitimacy due to its liability of newness. Understanding the legitimacy creation
process within the mineral and mining industry is therefore crucial to improving the open
innovation processes. Aldrich (1990) introduces the terms socio-political and cognitive legitimacy.
Socio-political legitimacy refers to formal and informal rules that people and actors are constrained
or enabled by. Cognitive legitimacy refers to the specific knowledge that is accepted within a certain
community. Both socio-political and cognitive legitimacy are important when presenting new
technology to an existing market. Therefore, our last research question is:
Q4: How is socio-political and cognitive legitimacy conducive to open innovation
processes in the mining industry?
The figure below illustrates the theoretical framework for investigating open innovations in the
mining and mineral industry.
R&D
collaboration
External
networks
Internal
networks
Company
ownership
Companies
innovativeness
Legitimacy
Strategic focus of the Phd at TUBS/BFE/UiT and international collaboration
TUBS has a special role at the BFE faculty in educating graduates to take leading positions as
innovators, entrepreneurs and managers in the private sector in Northern Norway. This Phd
application is the first one to emphasize the knowledge of factors that are conducive for
entrepreneurship and innovation in an era when the regional responsibilities of UiT will be
stronger. August 1st 2013 UiT mergers with University College of Finnmark to create the new
institution: University of Tromsø, Norways Arctic University. The vision of the new organization
is to produce teaching, research and professional development and dissemination at a high
international level. With the expansion to Finnmark, the foundation for reaching out to the mining
and mineral industry grows even stronger. Secondly, this application is based on international
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collaboration with external competence from University of Saskatchewan (UoS)6 on northern
entrepreneurship, northern economic development and regional innovation northern
entrepreneurship. UoS has further a mining centre and their research themes involves the
following issues: indigenous peoples and mining, environmental protection and environmental
remediation, the impact of fly in-fly out labour markets, supply and logistical arrangements to
support the mining industry, government royalty revenues and allocation of resource wealth, efforts
to build sustainable communities in the North, mining and northern infrastructure. These issues
point to the embedded nature of emerging mineral and mining. This is extremely important for the
further development of the industry in Norway. The government has put effort into building ethical
guidelines into indeginous peoples interest in economic development in the North (cf. “Nye
byggesteiner i nord” , Stortingsmelding 7; Strategi for mineralnæringen, Nærings- og
Handelsdepartmentet, 2013).
Phd training, work plan, academic and industrial support
The Norwegian Research School of Innovation (NORSI) provides an internationally competitive
Phd program in innovation, and consists of a research network of Norwegian universities and
colleges, leading institutions in Scandinavia, as well as top international universities in the United
States, Europe and Asia. TUBS is represented on the teacher side through the applicant for the
proposal, and the Phd candidate is suggested to be enrolled in this program. In addition the High
North Academy and Young Scientist Forum connected by Artic Frontiers in Tromsø are relevant
networks for the Phd candidate. A collaboration with University of Saskatchewan (UoS), one of
Canada’s most research intensive institutions with a long record of community engagement and
promotion of regional development is planned. Thus the Phd candidate will have access to
comparative insights from a research stay at the mining centre at UoS. Visiting the International
Centre of Northern Governance and Development in Saskatoon (ICNGD) may also enhance the
understanding of embedded context of the sector with indigenous population.
We foresee a 4 year plan for the PhD candidate, with the 25% lecturing responsibility both at the
Bachelor level in entrepreneurship and innovation as well as the Master level within TUBS. One
year fieldwork and some research stay in Canada is planned the second year. The dissertation is
planned based on four published articles and an umbrella chapter.
Table 1: Progress and dissemination plan
Time
Activity
1.1 2014
Developing research framework, literature review,
bibliometric analysis, methodological approach,
Phd Courses
2015
Data collection (fieldwork, survey, interviews)
and data analysis in Norway and Canada (possible
Phd courses at UoS)
2016
Preparing articles for publication, conference
participation, submitting and resubmitting articles
31.12 2017
Resubmitting articles and finalizing four
publications, writing umbrella
Methods and data
Our Canadian colleagues are partners in the ongoing project «Entrepreneurship, intrapreneurship and the commercialization of
High North Science: Building a collaborative circumpolar network for the new economy» (Norgesuniversitetet, 2012- 21013) where
the applicant of this proposal is the project leader.
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In order to grasp the complex structure embedding open innovation, various methods and analysis
will be employed. Both qualitative and quantitative data will be collected and comparative analysis
will be employed on data from Norway and Canada. A fieldwork in some companies in Norway
will be performed. The level of analysis will be both at the firm level and individual level. Managers
and employees in companies are central actors in networking, collaboration and in legitimacy
building. Some measures at the industry level will also be investigated.
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