Boosting Innovation in a Cross-Border Mountain Area to Develop Tourism

By Monika Jönsson

On the border between Sweden and Norway, there are mountains and appealing natural attractions where visitors spend their time skiing and participating in other winter activities. Four municipalities, Sälen, Idre, Trysil and Engerdal, two on each side of the border, have been developing a tourist destination, which today is one of the largest in Scandinavia. After an expansion of 30,000 new beds, will be the largest in northern Europe. To complete the expansion plans, a way of working called the Mountain Package has been established, where local, regional and national actors collaborate closely to remove barriers to co-operation, with this work being co-ordinated by the regional partners, Region Dalarna in Sweden and Hedmark County in Norway. One aspect of this work is to stimulate innovations and ideas to grow future business.

Hedmark-Dalarna participated in an OECD project, conducted in 2012-2013, which investigated the potential for a cross-border innovation policy shared with five other border regions in Europe. The reviewers of the study stressed that there was the potential for cross-border innovation and missed business opportunities in border regions. The review assessed that Dalarna-Hedmark did not have the same opportunities for innovation as the other case study regions, because of the great distances between the central towns of the two counties, their limited infrastructure and lack of public transport. Cross-border interactions between the two counties predominantly occur between the sparsely populated border municipalities. The OECD review emphasised that the main potential for cross-border co-operation in innovation in Hedmark-Dalarna was in the border area where the tourist destination is under development.

The tourist industry is rated among the expanding sectors of the world. From a regional point of view, Dalarna is the third largest destination in Sweden, and Hedmark is expanding because of its proximity to Oslo.

Tourism has grown into a significant industry offering a range of experiences to visitors. The tourism industry has generally found it difficult to assert its importance in relation to other sectors. It is composed of a number of small businesses that together provide visitors with services such as experience, food, accommodation and travel. One could say that the 'tourism factory' is less visible than other factories.

The tourism sector is not usually seen as an innovative industry, but instead as a service sector with a low level of technology and knowledge. However, what is an innovation? The Swedish Innovation Strategy states that: "Innovation is about new or better ways of creating value for society, businesses and individuals. Innovations are new solutions that serve the needs and demands in daily life and in the world around us. The value arises in the utilisation and implementation of an idea. The value created may be economic, social or environmental." In this strategy, there are no restrictions on the type of branch or sector, and innovations in services are included. Based on this definition of innovation, tourism can be characterised as an innovative industry.

The Mountain Package

The Mountain Package involves a process that started in 2008 and is an example of the ways in which local, regional and national stakeholders can mobilise on the basis of the needs of the tourism industry. It began when businesses in the mountain area were asked about their future plans. Based on their responses, it was estimated that 30,000 new beds were needed in the four border municipalities over the coming 10-15 years. The political ambition was to develop the area into the largest winter destination in Northern Europe. The scale of expansion requires the development of new products and experiences for tourists, a process that is expected to generate more jobs.

The Mountain Package was initiated by Region Dalarna, and later adopted by Hedmark County. Three separate projects were designed to prepare for the expansion. On the local level, questions arose concerning community planning, transport infrastructure for visitors and goods, as well as the supply of utilities to buildings and facilities. Issues on the regional level concerned internationalisation and product development. On the national level, issues of accessibility to and from the destination were managed. At all three levels, local, regional and national, stakeholders were co-ordinated by a group administered by Region Dalarna and currently also Hedmark County. Public actors have been mobilised on both sides of the border to support the building of the destination.

Local and municipal context – building a destination

The four municipalities on the Swedish and Norwegian sides of the border currently have approximately 100,000 beds for visitors. Tourist businesses are planning a significant expansion; apart from new accommodation, substantial investments have been made in skiing facilities and other attractions. There is a desire to develop the area into a year-round destination.

A skills shortage is one of the challenges for the business community regarding recruitment opportunities and developing the competences of employees. There is a specific need for the professional reception for international guests and an attractive product mix of services for new groups of customers. One problem is that the destination lies in a sparsely populated area, so skilled employees need to be recruited from other parts of Sweden and Norway. New methods to attract new groups to the service industry by offering higher education schemes close to the skiing facilities were tested. Dalarna University has been a positive force in offering distance education to seasonal employees.

The distance education offer was developed based on an initiative of the company that dominates the industry in the cross-border area, SkiStar. Hedmark University is involved to some extent, because it is possible to take economics courses by distance mode in Hedmark, but this opportunity is not available in Dalarna. Although it involves distance education, a campus has been established in Sälen with computer facilities and places where students can meet. The purpose of the distance education offer is to increase the competence of seasonal staff, and it is a way for companies to retain their staff for more than a single season, which is often the case with the people working in the industry, who are mainly young.

Other challenges in planning at the local level are to overcome differences and obstacles to create a satisfactory level of provision for the entire destination. Traffic in the region is due to expand, with increased co-ordination required between police, fire and ambulance services. There will also be growing demands on the health care system from those staying in cabins and hotels.

Regional context – attracting international visitors with new products

At present, there are few international guests in the area. The establishment of a new year-round mountain area destination will depend on attracting far more guests from foreign markets. The regional cluster initiative Destination Dalarna is intensely involved in the Mountain Package to increase sales to international customers through product development and planning, skills supply and increased maturity of the export market.

Attracting more visitors entails offering attractive products for tourists from Sweden, Norway and other countries. Products in the tourism industry nearly always consist of services that are produced at the moment of consumption. It is vital to develop products that are quality assured, packaged and priced to meet (or preferably surpass) customers' expectations. Business models need to be developed to reinvest value in the company. Destination Dalarna has followed a process based on reciprocal learning by observing others' actions, after which new products suited to the specific conditions in Dalarna can be created. There are plans to implement similar initiatives in Hedmark, as well as to strengthen cross-border collaboration on product development.

Photo: Region Dalarna

Photo: Region Dalarna

National context – infrastructure for travellers and goods

Together, local, regional and national actors designed a plan for sustainable transport provision to the mountains. The ambition was to combine existing projects in the region for the provision of tourism transport and to integrate them in future transport plans. One result of the collaboration was the regional transport programme for Dalarna, often regarded as a model to describe the needs of the tourism sector in transport infrastructure. Other specific results were improvements to the roads to the mountain areas and the new route that was inaugurated in the autumn of 2012. In addition, three bottlenecks were identified in the national and regional transport plans. The nub of the problem for all parties in the Mountain Package is to find sustainable solutions to increase accessibility for foreign travellers.

A regional analysis of the destination concludes that the expansion, functionality and increased attractiveness of the area cannot be achieved without a common airport for regular services and seasonal charter services. There is strong mobilisation of local, regional and national actors on both sides of the border to prepare for an international airport and find common solutions for connecting roads and a shopping centre.

A parcel of measures for growth and innovation – governance on the strategic and operational levels

The development described above all started with a signal that action was required during work on the current regional transport plan for Dalarna. For the first time, planned investments in the tourism sector were included in the analysis. The question was how public actors at a local, regional and national level could facilitate the realisation of business plans. One important motive was the importance of the tourism industry for Dalarna. Increased investment in the tourist industry provides more jobs, because increased production implies more visitors being cared for by more employees and/or entrepreneurs. Expansion of the number of beds leads to more restaurants, ski lifts and other activities, more investment in construction and in turn even more jobs. Today the Mountain Package is implemented co-operatively by Region Dalarna and Hedmark County.

The Hedmark–Dalarna Border Committee has become an important body to facilitate co-operation between actors in Hedmark and Dalarna. The regional actors on the Border Committee, the Regional County Council of Development of Dalarna County and Hedmark County Council, the County Administrative Board of Dalarna and County Governor of Hedmark, collaborate in promoting regional development and growth, and especially in lowering barriers at the border of the two countries. To build a world-class destination is a considerable challenge and requires the mobilisation of all actors.

The Mountain Package is an example of regional actors taking the lead in facilitating future business investment to meet a specific challenge. In other words, packages are an expression of regional leadership, initiative and co-ordination of public stakeholders.

In summary, for an effective process of change in a destination or a local community, there is a need for a regional actor to organise a multilevel governance system of public actors in general strategic positions. At an operational level, a cluster organises a multilevel ecosystem of actors for specific needs, in this case to boost innovation in tourism. In this kind of leadership, mutual learning is essential for development and innovation.

Back to Nordregio News Issue 5, 2013