The Contribution of Innovation Hubs Towards Strengthening the Regional Development in Sweden

1. Introduction

Innovation is the key driver of economic performance and competitive advantage and is hence a major topic in current research related to business management [Ferasso et al. (2018); Asheim (2019); Morales-Alonso et al. (2022)]. Innovation is also a source of growth and a tool for undertaking global challenges [OECD (2013)]. To adapt and compete in today’s rapidly changing economies, most countries engage in innovation-driven activities to develop economic competitiveness and social welfare at the regional level [Ferras-Hernandez and Nylund (2019); Ferasso et al. (2018)]. Depending on the availability of resources, a country’s innovation capacity varies from region to region [Martin (2020)], and building favorable conditions for innovation at the national, regional and organizational levels separately [Oksanen and Hautamäki (2014)] is a challenge. Thus, innovation has become increasingly open and wide-ranging and, for regional and national development, must now occur in a communicative, collaborative and creatively designed space [Oksanen and Ståhle (2013); Jiménez and Zheng (2021)].

In a study published recently [Osarenkhoe and Fjellström (2022)], the authors illuminate the platform created by an innovation hub to facilitate its competitiveness and that of the firms and other partners in the regional innovation system to gain access to global value chains and contribute to greater innovativeness and competitiveness. Thus, creating such a platform invariably enables SMEs to overcome liabilities of size, resources, newness and foreignness when attempting to enter foreign markets where they lack relevant prior network positions [Johanson and Vahlne (2009); Kumar et al. (2022), cited in Osarenkhoe and Fjellström (2022, p. 15)].

Although the concept of the innovation system, which includes innovation hubs, is still emerging [Kumar et al. (2022)], some define it as “a set of components and the causal relations influencing the generation and utilization of innovations and the innovative performance” [Granstrand and Holgersson (2020, p. 1)]. Innovation is thus often the result of the interactions of an ecology of actors [Granstrand and Holgersson (2020); Spicka (2022)] and, consequently, Osarenkhoe and Fjellström’s [2022] study draws upon the four dimensions of interaction approach, which focuses on the interaction process, interaction partners, relationship atmosphere, and relationship environment (e.g. integration of social, economic and environmental forces) required to analyze relationships at the dyadic-network level [Håkansson (1982); Håkansson et al. (2009); Håkansson and Snehota (2017b); Singh et al. (2022)], thus capturing the interconnected relationships between interdependent actors and organizations.

Although, the vital role played by regional industrial clusters in enhancing the competitiveness of an industry or region cannot be overemphasized, extant literature on their role remains very scanty and under-explored. According to Kumar et al. [2022], extant literature has focused its attention on highlighting their functioning, the prerequisites to be satisfied for actors to collaborate in the innovation cluster, and the advantages of being a part of the industrial cluster. Unfortunately, the “blind spot” in literature that has not yet received enough attention on the role of the lead actor that orchestrates social-economic resources among cluster members [Liu et al. (2019); Bittencourt et al. (2021) cited in Kumar et al. (2022)].

However, if the key player in the regional industrial cluster, referred to as “Innovation hub” in this study, creates, for example, unconducive socio-economic environment of distrust among cluster members, the outcome may be a poor performance of cluster members [Singh et al. (2022); Kumar et al. (2022)]. This scenario supports our argument for more studies that shed light on the vital role of innovation hub in orchestrating resources related to or concerned with the interaction of social and economic factors. If this “blind spot” in literature suggested by Kumar et al. [2022], Singh et al. [2022], Osarenkhoe and Fjellström [2022] is investigated, innovation capabilities of firms and other actors in the innovations system/regional innovation hub may be enhanced. Furthermore, creation of a shared value, as far as socio-economic factors are concerned, between heterogeneous actors with different goals, leading to diverse outcomes for members who jointly undertake innovation projects may be facilitated.

The concept of the innovation hub (IH) as a co-working space that encourages collaborative learning is diffused in many regions across the world [Jiménez and Zheng (2021)] and IHs are considered a crucial intermediary for the development of regions via innovation agendas [Avdikos and Merkel (2020)]. Chowdhury et al. [2021] discuss the concept from a regional, Swedish perspective highlighting the factors that influence IH innovation capacity. At the same time, these authors suggest a need for a further study of “how innovation hubs contribute to regional innovation and development” (ibid.). Osarenkhoe and Fjellström [2017] place emphasis on cluster’s role in internationalization and regional growth. With this motivation, this study looks at the significance of IHs in creating regional development through their activities.

In highlighting the potential of IHs, Jiménez and Zheng [2021] and Nicolopoulou et al. [2017] identify IHs as creators of social value that take on societal challenges to solve regional developmental challenges. Baark and Sharif [2006] recognize IHs as systems that create an economic value and a strategic advantage for a region. Avdikos and Merkel [2020] further argue that innovation hubs can be divided into two types, where one focuses on raising economic value (entrepreneurial-driven) and the other on raising social value (community-led) for their users and communities.

Due to the limited availability of scholarly articles and empirical research on IHs, we consider here also other types of innovation centers, like digital IHs and science parks (SPs), to identify their influence on regional development. Alvarez [2021] studied digital trade and its advancements in North America. While Hervas-Oliver et al. [2021] and Vakirayi and Belle [2020] have analyzed digital IHs, relevant only for Industry 4.0 (i.e. smart manufacturing industry), and identified the characteristics as well as the socio-economic aspects of digital IHs, others have identified SPs as innovation centers that create economic competitiveness and strategic advantages, which in turn promote regional development [Bencke et al. (2020); Cadorin et al. (2017); Hommen et al. (2006)], or suggested that the SPs create social value for the geographical region as well [Fulgencio (2017)].

A contextual disparity can be seen in the scholarly literature. Whereas Baark and Sharif [2006], Bencke et al. [2020], Cadorin et al. [2017] and Hommen et al. [2006] claim that innovation centers are likely to have economic influences on regional development, Jiménez and Zheng [2021], Nicolopoulou et al. [2017] and Fulgencio [2017] claim that innovation centers generate social influences on regional development. In addition to those two debates, Vakirayi and Belle [2020] shed light on the necessity of digital IHs for both economic development and social development of regions. Since the study conducted by Vakirayi and Belle (ibid.) was based only on literature, they directed the attention of future researchers to develop a research model that applies a holistic approach to measure the socio-economic impacts of digital IHs.

Answering this call for further research, we deemed it important to establish a framework for exploring the economic and social influences of IHs in general rather than restricting our study to digital IHs. Till date, a few studies have explored IHs’ socio-economic contribution to regional development, a knowledge gap that this study aims to fill, by investigating how IHs contribute to regional development. This scholarly interest will be fulfilled by seeking an answer to the following question:

RQ: How does an innovation hub influence development in regions?

However, the objective of this paper is not just to reflect on the contribution made by IHs to regional development, but rather to create scholarly interest in promoting IHs to induce regional development through innovation.

The remainder of the paper is organized as follows: Based on a review of the literature, the next section presents and discusses existing definitions of innovation, IHs and regional development outreach, as well as the socio-economic influences that innovation centers have on regional development. This is followed by a section discussing the methodology used to collect and analyze the data. The most important facts from the empirical data are then presented and a critical analysis is undertaken to provide a more comprehensive answer to our research question. Lastly, the final section presents our conclusions on the topic, the contribution made by the study and the suggested areas for future research.

2. Literature Review

Innovation plays an important role in regional development [Kraus et al. (2021); Samara et al. (2022)]. Innovation hubs often play the role of a catalyst in creating the environment for innovation in a regional setting that can result in regional development [Kumar et al. (2022)]. Therefore, it is necessary to understand the links between innovation, regional development and the role of innovation hubs as an innovation center and a contributor towards regional development.

2.1. Innovation

Innovation is about creating and improving products, services or processes [Asheim et al. (2011); Fulgencio (2017)]; it is a process that requires a variety of resources such as knowledge, motivation and collaboration [Oksanen and Ståhle (2013); Samara et al. (2022)]. Innovation is always associated with economic growth [Brooks et al. (2018)] and is determined by R&D activities and other organizational interactions in the pursuit of acquisition, diffusion and improvement of new technologies [Yoon (2017)]. Although Brooks et al. [2018], Yoon [2017] and Fulgencio [2017] describe innovation as a way of increasing economic outputs, Nicolopoulou et al. [2017] and Oksanen and Ståhle [2013] note that, nowadays, innovation is expected not only to provide economic profitability, but also to address social issues.

2.2. Regional development

Regional development has been described as efforts that enhance the living standards and well-being of citizens living in a particular region, and also denotes regional contributions to national performance and resilient societies [OECD (2013)]. The significance innovation has for regional development cannot be denied [Brooks et al. (2018); Kraus et al. (2021); Morales-Alonso et al. (2022)]. Hence, the role of innovation is identified as one that fosters regional economic growth and serves as an important driver of a region’s competitive advantage [Brooks et al. (2018); Lopes et al. (2021)]. According to Fudge et al. [2021], there are two interconnected ways of understanding regional development: from a regional economy standpoint (GDP, employment rate and household income), and from the standpoint of societal well-being (people’s livelihoods, education, health, and the quality the environment). They (ibid.) further claim that in recent times the focus of regional development has moved from economic development alone, to sustainable economic, social and environmental development.

Regional development policies increasingly focus on an innovation-driven growth [OECD (2013, p. 17)]. Since innovation at the regional level occurs as a result of a region’s capability to activate, develop, sustain and manage knowledge dynamics [Schiuma and Lerro (2008)], regions are increasingly seeking to improve their capacity to adapt knowledge to innovational needs to promote the development of the region [OECD (2013)]. González [2021] conducted a cross-country comparison of competitiveness in Latin America, one key finding identified was that it is linked to the population welfare. He also noted that policy implications played an important role in regional competitiveness. Asheim [2019] and Bencke et al. [2020] identify innovation-based growth as the key strategy for regions to compete in the global knowledge economy and to interact with universities, industry and government to improve the conditions for bringing about regional innovation. Martin [2020] similarly suggests empowering regions with knowledge, infrastructure and university–industry collaboration to strengthen innovation-based regional development, and Chowdhury et al. [2021] suggest the potential of regions to extend their infrastructure, knowledge sharing, innovative culture and network collaboration through IHs. Along the same lines, Osarenkhoe and Fjellström [2017] explain that social interactions such as dialogue, collaborations, common strategy and joint actions are important for the growth and competitiveness.

2.3. The innovation hub — A regional innovation center

IHs serve as a central point from which the activities and knowledge flow of a region’s innovation communities can be managed. Proximity is important, therefore, they often build on existing campuses or offices owned by core partners of the hub [EIT (2021)]. An IH’s core value lies in finding host communities with a passion for innovation and entrepreneurship and encouraging them to collaborate while offering a variety of services such as social events, mentoring sessions, and incubation and acceleration for start-ups [Jiménez and Zheng (2021)]. According to Oksanen and Hautamäki [2014], the development of IHs can be rationalized for two reasons: “First, innovation hubs as specialized places of knowledge and business produce value for global networks. Second, building innovation hubs is presented as one possible response to regional structural changes and crises” (p. 12).

IHs serve as local clusters like science parks [Baark and Sharif (2006)] and social incubators that facilitate social innovation [Nicolopoulou et al. (2017)], as well as providing extensive networks and value-added projects through knowledge generation [Baark and Sharif (2006); López-Rubio et al. (2021)]. An IH consists of three main stakeholder groups (supporting networks) — universities, industry and government [Chowdhury et al. (2021); López-Rubio et al. (2021)] — and influences regional innovation through the interrelations among these three spheres Erina et al. [2017]. As mentioned by Avdikos and Merkel [2020], IHs are mutual survival platforms that play a vital role in the socio-economic development of small cities and rural communities [Kumar et al. (2022)]. Avdikos and Merkel [2020], moreover, highlight that, in addition to business innovation, social innovation can also emerge from IHs to expand the idea of innovation-based development.

2.4. Innovation hubs and regional development

Cadorin et al. [2017] write that regional development can be derived from the expertise talents that exist in the region. The ability of a regional cluster to attract more qualified people and retain current expert talents is therefore found to have a high correlation with the region’s innovation performance [Asheim et al. (2011); Yoon (2017)]. In accordance with Jiménez and Zheng [2021], co-working spaces/hubs are purposely designed to bring people from different backgrounds together to build innovative communities. Chowdhury et al. [2021], Yaghmaie and Vanhaverbeke [2020] and Oksanen and Hautamäki [2014] further specify that IHs accelerate university–industry–government (supporting networks) collaboration by satisfying existing actors and attracting more people to the hub. More innovative and economically developed regions have a higher number of inter-organizational networks. Hence, there is a significant association between a region’s actor network and its overall innovation performance [Huggins and Prokop (2017); López-Rubio et al. (2021)].

The creation of small and medium-sized enterprises (SMEs) and innovation-based entrepreneurial activities are essential for regional innovation performance [Lopes et al. (2021); Kumar et al. (2022)]. As Avdikos and Merkel [2020], Obeysekare et al. [2017], and Vakirayi and Belle [2020] suggest — co-working spaces/hubs are considered to be an important tool for entrepreneurial development as they create jobs by supporting start-ups and self-employers to grow. Baark and Sharif [2006] identified how an IH could provide strategic advantages for a region’s firms through the generation of new knowledge. Their study also provides evidence of an increase in the percentage of firms entering the regional market and of SMEs undertaking more innovative activities after the establishment of a regional IH.

Regional innovation clusters are associated with the continuous growth of the economy and hence lead to investments in R&D, infrastructure and education, and technology growth in regions [Yoon (2017); Osarenkhoe and Fjellström (2022)]. Securing external funding and foreign direct investment is important for development. As Asheim [2019] pointed out, collaboration is a prerequisite for EU member states wishing to receive funds from European Regional Development Fund (ERDF) to implement the smart specialization strategy (S3) at the regional level. Firms located in clusters are more likely to receive a pool of foreign direct investment (FDI) and funding from the European Union [Ferras-Hernandez and Nylund (2019)].

In recent times, economic growth and regional development has emerged through the S3 strategy, which promotes the efficient use of public investment [Lopes et al. (2021)]. Hervas-Oliver et al. [2021] point to S3 as a new regional development path articulated through digital IHs. They further claim that digital IH facilitates collective actions and cooperation between industry and government, and drives the regional focus of modernization through smart specialization (i.e. S3). Asheim [2019] discussed, in addition, the value of the S3 strategy for regional economic development, citing its potential for maximizing knowledge-based development, competitive advantage and regional strengths. As described in EU Science Hub [2020], economic gains are not the only driver, S3 strategies also add social value such as enabling coordination between regional stakeholders, solving societal challenges, and aligning resources between public and private firms efficiently.

Walsh and Winsor [2019] and Schiuma and Lerro [2008] also highlight social values for the region as another key element of growth and development. This is emphasized in socio-cultural factors such as trust, collaboration, encouragement and positive attitudes among the regional actors. According to Avdikos and Merkel [2020] and Jiménez and Zheng [2021], IHs facilitate different forms of social capital, such as collaboration, trust, mutual learning, community development, and social innovations. Nicolopoulou et al. [2017] describe the IH as a social incubator that shares a common set of values and enables collaboration to support regional actors to develop their businesses. As per those authors, IHs also serve the region through social entrepreneurship activities. Vakirayi and Belle [2020] show how an IH has a significant influence on society and the communities in a region and, hence, notably improves creative thinking skills and leads to collaboration and gender equality.

Along with creating social value for the community, Nicolopoulou et al. [2017] draw attention to the importance of IHs in implementing the principles of sustainability in their activities, the implication being that IHs can focus on regional sustainability via building capacity and value-based collaboration.

2.5. The conceptual framework

While Baark and Sharif [2006], Bencke et al. [2020], Cadorin et al. [2017] and Hommen et al. [2006] have all pointed out the economic influences of innovation centers on the development of regions, and Jiménez and Zheng [2021] and Nicolopoulou et al. [2017] focus on the social influences, Vakirayi and Belle [2020] note that the influences of innovation centers on regional development are both economic and social in nature. Based on the arguments put forward in previous studies, we attempt to formulate a conceptual relationship between IHs and regional development. The literature on several innovation centers (science parks, IHs and digital IHs) lead us to postulate that this relationship may become stronger through the social and economic influences of IHs. To build an empirically strong conclusion to our research question, we explore the influence of IHs on regional development from these two perspectives (economic/social) which are shown in Fig. 1.

3. Methodology

Little is known about the ways in which innovation hubs influence regional development, this study follows an exploratory approach with inductive reasoning [Stebbins (2011)]. The study consists of two cases (innovation hubs, IHs), since the case studies are appropriate for inductive theorization [Welch et al. (2011)] and exploratory research [Guercini (2014)]. The IHs are in two Swedish regions, one IH has been in operation for about four years and has worked in several projects, whereas the other one has been in operation for two years.

Two hubs can help us to highlight possible IH influences in different scenarios, with their different experiences. A short description of the two case IHs are presented as follows:

Case 1. IH Region 1 (IH-R1)

The innovation hub in Region 1 commenced in 2017. It is located in the region’s science park building, in premises provided by a cluster company associated with the IH. Incubators, investors, the municipality, and the region’s two universities are also affiliated to the IH. For this study, we interviewed representatives from the municipality, the cluster company, a university, an incubator, and an entrepreneur from IH-R1.

Case 2. IH Region 2 (IH-R2)

This innovation hub was established by the local municipality in collaboration with a cluster company and university in 2019. The premises are provided by a company that rents out co-working space, and a well-established incubator with more than a decade of experience is associated with the hub. For this case, we interviewed representatives from the municipality, the cluster company, the university, and the property-owning company from IH-R2.

3.1. Data collection

Semi-structured interviews were used to collect data, as this method enables smooth transitions between the structured questions of the interview and impromptu questioning [Salmons (2016)]. Ten participants (five from each IH) were interviewed. Questions were formed in an open-ended way that encouraged the respondents to be more expressive regarding their thoughts and experiences, making the answers more elaborative [Salmons (2016); Saunders et al. (2012)].

Prospective participants were first contacted via email and, of these people, six were then selected based on ease of accessibility, inclination to participate, and their availability at a particular time, following the convenience sampling method [Etikan et al. (2016)]. Since six respondents were not adequate, we adopted snowball sampling to reach more participants that were otherwise difficult to access [Naderifar et al. (2017)], by having our initial interviewees introduce us to suitable participants in their circle of acquaintances. The interviews were conducted during the global COVID-19 pandemic when social restrictions were in place, consequently this enforced us to conduct interviews using digital video-conferencing applications as the most suitable medium to gather primary data of this kind [Lobe et al. (2020)]. Depending on the respondents’ preferences we used either Zoom or Microsoft Teams meetings. All the interviews were recorded with the permission of the respondents, since one challenge is usually to take notes at the same time remaining attentive to the interviewee’s answers and preparing impromptu follow-up questions [Adams (2015)]. Table 1 provides a summary of the interview details.

3.2. Data analysis

The purpose of the analysis is to ensure it conveys the participants’ perceptions [MacIntosh and Morse (2015)]. The inductive reasoning [Salmons (2016)] supports the content analysis method [MacIntosh and Morse (2015)]. Once all interviews had been conducted, the recordings were transcribed and cross-checked for accuracy, and the content of the data was then sorted based on commonalities. Similarities as well as contradictions in the data were checked and we looked for common themes to describe the findings. The next step involved an initial review to identify and encode the date, combining similar concepts. The findings were then collated with other findings in the literature to enable us to draw conclusions.

4. Empirical Findings

With the intention of identifying the focus of actors affiliated to IHs, the respondents were asked whether they consider economic benefits or social benefits when carrying out projects. Most of the respondents from the two hubs noted that the two types of benefits were equally important when it came to project outcomes. One respondent from IH-R1 explained that hub activities to a great extent concern “the contribution”: “You know — if it is not a good business, if it does not generate any money — there will not be any social impact, so they are sort of interlinked”.

Another IH-R1 respondent, a representative from a business-oriented organization, explained that, because his organization is profit-focused, they “look at the financial returns mainly”, but does not disregard “the social impact or environmental impact$\dots$ . So it’s a balance”. The respondent from the municipality in IH-R1 specifically highlighted the social aspect, commenting on how they focus more on the social value of innovation: “definitely trying to focus on value creation for the citizens”. Other comments, from IH-R2 respondents included that: “They would need to go hand in hand for us”, and “I think it’s two in one”. Another respondent stressed this idea, remarking how “the strongest combination comes when we use both of them”.

Hubs foster a network of different actors that collaborate with each other, which leads to regional development. One respondent from IH-R1 mentioned how the support network makes them strong — with many actors to support growth, the city “has the benefit of being big enough to have a critical mass in terms of companies and organizations, yet small enough to be able to keep the roles effective”. The hub is therefore “a regional resource” that supports regional development. Another respondent from the same hub stressed on how the IH’s downtown location attracts more investors and companies to the city. Through IHs, regions can attract investors.

As a respondent from IH-R2 noted, the hub enabled them to “attract the right people with the right skills, and may attract business to come here. If we have a competitive edge, it may help some companies to locate here”.

IHs connect academic research to the industrial sector of the region. An IH-R2 respondent representing the university mentioned that their research “may have an influence on society, and this can be an innovation, or it can be a change and a new policy, or a new way of doing things, or new knowledge transferred from the university to society”.

IHs facilitate this transfer, bridging the flow of academic research knowledge into industry application. A respondent from IH-R1 said that the hub “provides quite a lot of knowledge and expertise on how to collaborate with the university and how to use research knowledge in a company’s work and in how they develop the company”.

As another respondent from the same hub put it, the IH also supports entrepreneurial and individual research ideas that identify “needs in the marketplace”, and thinks that their research “may bring benefits or value”.

IHs support start-ups in many forms. A respondent from IH-R2 said that the motive behind initiating the hub was to encourage more start-ups. Another explained that, since universities are not allowed to finance start-ups, they direct individuals with business ideas to an incubator or the innovation hub. A respondent also pointed out that to attract more companies and support start-ups, IHs need to create a favorable environment — with ample data, funding, management support, and resources. Another, from IH-R1, mentioned that the hub provides an overall perspective “you get everything — from how to go from research to make a company grow into an international setting”.

Another respondent, an entrepreneur who took part in our research, explained how IH-R1 had supported and guided him in developing his business idea to attract investors and setting up his business and get it up and running.

Respondents from IH-R2 mentioned two resources the region has that can attract more companies. One is the ability to provide electricity efficiently, making the region a good place for companies that require energy as infrastructure. The other is data-driven innovation, which gives them a competitive advantage in data management. They therefore focus on creating a “smart city connected to GIS data” and attracting more entrepreneurs through IH activities. The projects carried out via the IH thus focus on achieving smart specialization through the efficient use of available resources and maximization of competitive advantage.

Respondents from IH-R2 conveyed that the hub provides smart solutions to social problems through many of its activities. The university’s representative mentioned that its research sometimes involves pairing research ideas to people with existing issues and that, once an issue was identified, they conduct the research, adding that they had now “decided on four different strategic research areas, all of which are going to be challenge-driven, so they are meant to address or solve challenges in the society”.

Another respondent explained that certain issues in the region had been identified, including high unemployment numbers, a low rate of education, and an unfavorable corporate climate, and that they try to address these issues through hub activities. Another respondent mentioned that, in the hub’s data-driven innovation, they consider how to use “data to plan the society in a better way and their geographical positioning in connection to health” by predicting issues related to the health and well-being of an increasing elderly population in the region. The hub is also planning to conduct innovation camps to gather people and to identify relevant topics and challenges. A respondent from IH-R1 similarly mentioned that, through hub activities, they match social issues and challenges to potential start-ups. Another IH-R1 respondent explained how they focus on creating value for citizens by meeting the needs of local residents: “So we work a lot with service designs”.

Respondents from both hubs expressed how IHs help to enable the region to use its available resources sustainably, for sustainable development of society. As one respondent from IH-R2 explained, they do this by focusing on smarter sustainable cities and places through smart specialization: “By applying the hub’s skills to the topic of smart specialization, the hub can contribute to the sustainable development of the region”.

According to a respondent from IH-R1, the property-providing organization lays the foundation for collaboration between actors and that “they work in different areas — [such as] energy, sustainability”.

Two respondents expressed how hubs can modernize city life and make it smart. As described by one of them, from IH-R1, actors in the hub coordinate with one another and connect different parties in projects related to the various needs of municipalities. One such project is the nationwide Viable Cities project, in which Vinnova is planning for smarter cities. Under the mantel of the main Viable Cities project, other sub-projects operate and coordinate with the actors of the hub. According to the other, an IH-R2 respondent, the hope is that data-driven innovation will help “to build a smarter society in the future, that [they] can plan smarter by contributing to meeting the UN targets for 2030”. Hence, they have planned to align the hub’s projects with these sustainable development goals.

The cross-collaboration between regional hubs enables resource exchange for increased innovation. As the IH-R1 respondent explained, the network of hubs allows them to share certain resources that would otherwise be unavailable in some regions: “We have a few people who work with many cases per year, and they gain more expertise. So that is why we provide support to more universities and more regions”.

Another respondent mentioned that cross-collaboration between hubs also enables them to bring in companies from other areas: “The companies we invest in depend on subsequent investments — from private investors, from tech investors, from venture capital firms”.

They therefore arrange events such as Match Day, where they invite investors to make “presentations of the companies followed”.

5. Analysis and Discussion

Modern innovation consists of two perspectives — economic and social growth [Nicolopoulou et al. (2017); Oksanen and Ståhle (2013)]. Thus, a region that emphasizes innovation must ensure continuous development in both economic profitability and socio-cultural advancements. Our study suggests that to ensure both economic and social benefits towards the region it operates in, an IH must be formed as a regional cluster. To some extent, this contradicts Baark and Sharif [2006], who placed emphasis on the monetary benefits, and Nicolopoulou et al. [2017], who highlighted the social benefits of IHs. Although some members join the hub to gain profit for themselves, our study suggests that the role of IHs as a team provides dual benefits to regional development. We identified three roles that IHs take on in their quest to support regional development — as acquirers, supporters, and creators — this yields socio-economic influences on regional development.

5.1. IHs as acquirers

According to our respondents, the core strength of the hub, as well as the region, lies in the actors who work in and with the hub. The geographical location of the hub enables it to acquire expertise talents and knowledge resources for the region. Consequently, the hub adds to the region’s strengths and expedites growth of the region through a high proportion of qualified actors [Cadorin et al. (2017); Asheim et al. (2011); Huggins and Prokop (2017)]. This study, therefore, shows that IHs make a significant contribution to the efficient flow of knowledge between universities and industry [Erina et al. (2017); Vanhaverbeke (2017); Oksanen and Hautamäki (2014)].

IHs are, in addition, also capable of acquiring investments for regional activities. In particular, the proximity of an IH’s location to actors and other resources attracts more companies to invest in the city center. Both hubs looked at in our study are funded by Vinnova (which supports regional innovation through government funding) and are willing to cooperate with EU projects to acquire additional funding from the European Regional Development Fund (ERDF). This study found that EU supports regions to cooperate more with other countries and encourages S3 strategies when granting EU development funds [Asheim (2019); Ferras-Hernandez and Nylund (2019)].

5.2. IHs as supporters

The study underlined that entrepreneurs and start-ups in both studied regions receive support through their respective IHs from the early idea development, to finding investment and setting up their businesses. Establishment of new companies in the region builds up the region’s business strength and competitiveness [Baark and Sharif (2006); Oksanen and Hautamäki (2014); Avdikos and Merkel (2020); Obeysekare et al. (2017); Vakirayi and Belle (2020)].

In addition, the study indicates that innovation hubs are bound to support the smart specialization strategy (S3) of its region. The potential to maximize the competitive advantages, knowledge-based development, and strengths of a region by emphasizing S3 strategies is high [Hervas-Oliver et al. (2021); Asheim (2019)]. Apart from providing the economic benefits discussed above [EU Science Hub (2020)], the S3 strategies emphasized by the IHs in our study also provide societal benefits. One IH has several projects focusing on UN sustainable development. They, thereby, contribute to the region becoming a smart city by improving technology advancements, especially in the health care sector.

5.3. IHs as creators

This study reveals that both IH-R1 and IH-R2 facilitate a favorable environment for knowledge sharing and collaboration activities for their members. Besides improving the collaboration of regional actors, IHs can help to build a positive and creative regional culture and thereby raise the mutual trust between actors [Nicolopoulou et al. (2017); Walsh and Winsor (2019); Schiuma and Lerro (2008)]. Both hubs consider such social value creation for the citizen and focus on societal gains as a major requirement [Nicolopoulou et al. (2017); Jiménez and Zheng (2021); Avdikos and Merkel (2020); Vakirayi and Belle (2020)].

Furthermore, the study also demonstrates that IHs share their physical and knowledge capital and provide support for other regions with low innovation capacity, with the IH members in the study defining this strategy as creating “cross-collaboration” with other regions.

Based on the effects of IHs described above, Fig. 2 illustrates the roles played by the IHs as acquirers, supporters, and creators in generating socio-economic influences that lead to regional development.

6. Conclusions

Although some previous studies have looked at how innovation centers such as science parks and digital IHs drive regional development, little is still known about the ways in which IHs can contribute to regional development. Hence, this study was carried out in the quest to give an answer to the question: How does an innovation hub influence development in regions? The study identifies that IHs can take on three different, and complementary roles, to support socio-economic influence on regional development: as acquirers, supporters, and creators. By combining these roles IHs can strengthen regional development on different levels (i.e. start- ups, entrepreneurs as well as small- and medium-sized enterprises).

Regional hub activities can draw expert knowledge and investment to the region, which consequently contribute towards regional development. This supports earlier studies by Asheim et al. [2011] and Yoon [2017]. The study also expands the perspective that IHs support start-ups and entrepreneurs from idea development to up-and-running business operations, potentially increasing the number of firms in the region [Baark and Sharif (2006); Oksanen and Hautamäki (2014)]. It also confirms that IHs enable regions to maximize their competitive advantage and achieve smart specialization [Hervas-Oliver et al. (2021); Asheim (2019)]. The study moreover illustrates that IHs facilitate a smooth knowledge flow and collaborations that help to build a positive and creative culture that supports regional development [Nicolopoulou et al. (2017); Walsh and Winsor (2019); Schiuma and Lerro (2008)] and facilitate sustainable development by creating social values [Nicolopoulou et al. (2017)]. The study also highlights how IHs enable regions to exchange resources through cross-collaboration. Aligned with the findings of Avdikos and Merkel [2020], the study leads us to conclude that IHs create socio-economic influences on regional development.

This study also has significant and practical implications for policy makers. In regions that strive to develop growth and competitiveness, decision-makers can refer to this study when determining how to drive the capacity of an IH towards increased development of a region. Depending on a region’s strengths in resources and competitive advantage, our findings can be used as a guide when plotting the direction for IHs since they highlight the importance of IHs in achieving smart specialization and explain several ways to do it. The influential connection of IHs and regional innovation shown in the study provides ample information to understand what can be improved upon to strengthen this connection and thereby increase an IH’s contribution to regional development.

The study also has several significant societal implications. For those with an interest in regional development and the concepts addressed in the study, such as government institutes and researchers or academics, the findings provide comprehensive knowledge on the connection between IHs and regional development. In addition to presenting ample knowledge for entrepreneurs, innovators and investors regarding the possibilities of collaborating with IHs, by showing how these actors can contribute to the region in a broader perspective, this study also encourages them to do so.

The study also paves the way for more avenues of research. Ideas for future research include exploring, separately and in detail, the influence of IHs on the two aspects looked at here. Quantitative studies can be conducted to contrast and assess these influences in the context of IHs, in order to identify whether they are the same for both aspects. Future studies can also examine how the influence of IHs can be enhanced by providing support to start-ups and SMEs to use artificial intelligence or Big Data or block chain for innovation management to maximize the contribution of the firms and the IHs towards regional development.