Good practice:

Arctic Smart Rural Community Cluster

Rural villages in Lapland purchase energy and food from outside Lapland with millions of euros annually. According to studies by the Natural Resources Institute of Finland, nearly 50% of the villages’ purchasing power is spent on energy and food. All these euros are fleeing the area, even though a major portion of energy and food could be produced locally in a sustainable and profitable manner. The objective of the Rural Cluster is to cut off the outflow of capital of rural Lapland by creating new business operations in the fields of food products and decentralised energy production alongside the traditional rural entrepreneurship activities. The operations of the Rural Cluster aim to improve the local growth of the value added of rural raw materials in order to maintain an increasing amount of capital with the owners of raw materials.Operations of the cluster are focused on the development of the energy and food sectors. The cluster aims to find solutions for the existing problems of entrepreneurs (such as farmers and forest owners) and to introduce new entrepreneurs to the sector. The tool for this is knowledge development, which covers training, research and the counselling needed by entrepreneurs.

Two full-time employees at the Regional Council of Lapland and cluster manager from ProAgria Lapland, a state-owned organisation for agricultural consultancy. The cluster receives funding from the European Agricultural Fund for Rural Development, an annual budget around 185,000 euros per year.

The cluster has done tours at municipal decision-making bodies to promote local energy production and helped to develop a website that gathers energy advice for citizens, companies and muniThe economic importance of local purchasing has been brought to decision-makers in municipalities around Lapland. Cluster also brings information about ongoing projects to support municipalities and entrepreneurs. All communication material brings forward quantitative studies on the impact of local business.

Municipalities lack the capacity to absorb the support of the cluster organisation and the various forms of assistance available. Entrepreneurs often do not have time to engage, and have lack of resources to understand support schemes. Energy investments are low.

The cluster model in Lapland works well in sparsely populated areas, because it has enabled the cooperation of municipalities in public procurement and project development. The cluster can also collect and develop common objectives and good practices and distribute them across the region. It has been extremely important to quantify the amount of capital losses in the region, based on scientific studies, to justify the measures and objectives taken by the cluster. The cluster work requires enoughinterested municipalities, entrepreneurs and active regional development actors, especially in a situation where funding is limited. Without the communication and coordination project organised by the Regional Council, it would have been difficult to organise and gather together the actors of the cluster.