Rural Innovation and Business Systems: Empirical
results from Iceland
Introduction to data collection
Content
Content
2
Introduction to data collection
2
Sample
2
Data collection procedures
2
Evaluative discussion related to the
method
2
The Business and Innovation Compass 3
The Business and Innovation Navigation
Tool
3
Discussion and Implications
3
Sample
The sample of companies was selected
by the staff at the Regional Development
office. The companies are all “medium”
sized in the West Iceland region and
relatively established. We emphasized
companies from the food industry and
the building industry but few other
companies were also included as they
were considered interesting and
important for the future development of
the region.
The companies as a whole are
considered representative of the region
although tourist companies are not
included in this sample.
Data collection procedures
All the data is collected by the local
project leader for the RIBS project and
all the interviews were conducted on
site. The respondents were in all cases
the CEO’s of the companies.
Evaluative discussion related to the
method
As it turned out, many of the questions
seemed to be measuring the same things
so in many cases the responses to one
question automatically gave the
responses to few others. The Innovation
Navigation Tool did not prove very
successful as many of the CEO’s had
problems understanding it and relating to
the questions.
The Business and Innovation
Compass
In general, the CEO’s are very focused
on the quality of products and services.
This is especially true for the food sector
but holds also for the other companies.
The companies in the food sector are
mostly working with fresh fish products,
where quality is of paramount
importance. Fish from Iceland is
relatively pricy but is in high demand
because of the high quality. In general,
most of the companies are working in
the higher price range and must rely on
product quality and customer service to
survive the competition from other
countries.
Only few companies have any real long
term visions or strategies. This might be
related to the recent crises in Iceland,
which forced CEO’s to concentrate on
survival in the short term, rather than
long term strategy. However, one could
also argue that the crisis would increase
the need for long term vision and
planning.
The companies are in general risk
aversive and focus on lower but safer
margins. Also this, may be influenced by
recent crisis.
While the CEO’s concentrate on product
quality the majority does not allocate
more than 1-2% of the income in R/D
activities. This is surprising as one
would expect companies in the high
price range to have a constant need for
innovations and progress.
In most cases, the CEO’s declared they
were open for suggestions and ideas
from the staff but real contribution from
the workers seemed the exception rather
than the rule.
The Business and Innovation
Navigation Tool
The Business and Innovation Navigation
Tool did not prove very successful for
the analysis. The respondents did not
always understand the questions or gave
answers, which did not harmonize with
other information they gave.
Still, it can be stated that the most
important stakeholder groups are
“customer” and “owners”. Few
respondents saw governmental bodies or
universities as important stakeholders.
Hardly any regional stakeholders were
considered important for the companies.
Discussion and Implications
The analysis clearly shows a lack of R/D
investment and long term strategy
among most of the companies. Many
companies are extremely reliant on
natural resources (fish) but the
processing is simple and income is
therefore mainly based on quantities.
Most of the firms in the survey would
probably benefit from more R/D work
and long term strategy. Most regional
support is now yielded to entrepreneurs
and start-up companies but the larger,
established companies do not have
access to much regional support.
Another characteristic is that most of the
firms do not rely on local markets but
export the majority of their products
either to other regions or abroad. The
main reason for this is the small size of
the region and good access to the capital
region. West Iceland has only 15.000
inhabitants and 50% of them lives in less
than 1 h drive from Reykjavik. This
means that there is a very low access
barrier for companies to sell their
products in the capital region. The larger
fish producing companies are almost
entirely export oriented. They are
situated in West Iceland because of the
proximity to the fertile fishing grounds.
All in all the analysis show a relatively
weak regional dimension. The
companies do not consider them
“regional” and do not seek much support
from the regional support system.