IV: Lessons from systems of innovation

Science–practice knowledge interaction in the Norwegian fish farming industry

Tone Merethe Aasen, Eli Fyhn Ullern and

о

Age Mariussen

Introduction

The context for this chapter is the salmon farming industry in Norway, which, over the past decades, has grown tremendously. The long, sheltered Norwegian coastline, with its favourable currents and water temperatures, has, since far back, formed the basis for strong local societies along the coast, and, more recently, has opened for a prosperous aquaculture industry. Today, there are more than a thousand fish farms from the south to the far north, producing salmon, rainbow trout and other marine fish species. They deliver their products to more than 100 countries, and jointly hold close to a 60 per cent share of the global market. Farmed salmon and other marine species have grown to be among the biggest Norwegian export industries, with important spinoff benefits for the coastal communities, supplier industry and Norwegian fishing industry in general (Winther et ah, 2017). The extraordinary results can be explained by the industry’s capacity of converting new ideas into practice (Stensvold, 2015), but also by outstanding research initially performed by agricultural researchers.

The chapter is based on empirical evidence from the Trondelag region in Mid-Norway, developed as part of the research initiative ‘Regional innovation through situated knowledge conversion’.¹ Empirical data were collected through semi-structured, step-stone interviews with 15 key respondents in the fish farming industry, related research communities, and public support systems. The ambition of the research was to explore how existing networks and systems of innovation, including policy instruments, contribute to the development and exploitation of new, science-based knowledge. Today, the fish farming industry faces the challenging situation of high commodity demand and increasing costs, combined with increasingly strict environmental restrictions on a production environment that is vulnerable in many ways: fish health, environment, volume, slaughter, transportation and revenue. Despite many excellent research communities, research is lagging behind when it comes to solving the challenges. Implicitly, the industry needs to turn its attention in new directions.

The questions emerging during the project were: which role does research- based knowledge play in processes of knowledge conversion, and what are the possible relationships between such processes and entrepreneurial discoveries?

Entrepreneurial discovery and knowledge conversion

Entrepreneurial discovery processes are explained throughout this book, yet a few characteristics of significance to this chapter should be emphasised. First, it should be remembered that entrepreneurial discover)' is defined as the phase that precedes the structured, visible phases of innovation (Foray, 2016; Piirainen et al., 2017), also referred to as the fuzzy front end of innovation (Shiba et ah, 1993), or the gestation phase (Van de Veil et ah, 1999). Although elaboration of the concept is still in progress, it can fruitfully be framed as processes of exploration and imagination creating new ideas about possible futures based on combinations of different types of knowledge, information and fantasies. Selection of a desired future forms a basis for new action: that is, experimentation and development. Implicitly, the objective of entrepreneurial discover)' is not to favour innovation in specific companies, but to incite the development of collective action and experience on a regional level, with the intention of identifying new opportunities. Second, entrepreneurial discovery allows for actors to re-orient and renew themselves and will therefore increase the probability for innovation. Thus, entrepreneurial discover)' can be conceptualised as ‘opportunity recognition’ (e.g. O’Connor and Rice, 2001; Park, 2005; George et ah, 2016), where the domain of opportunity is created through new combinations of separate domains of knowledge (Foray, 2015). The recognition of opportunity has also been connected to the identification of a ‘fault’ or an ‘imperfection’, which can be addressed through the invention of new resources (Kirzner, 1997).

While the purpose of entrepreneurial discover)' is new activity, innovation is the translation of that discover)' into real economic convergence (Foray, 2017), resulting from a group’s or companies’ successful exploration and exploitation of the recognised opportunity. Thus, a discovery can be the source of many lines of innovation. George et ah (2016) further suggest that the concept of opportunity recognition involves diverse processes for creating value. The interplay of such processes, nationally and globally, can be considered as the engine of market dynamics, where individual and regional initiatives are interlinked.

Entrepreneurial discoveries are characterised by strong learning dimensions (Foray, 2015). To follow the reasoning of Nonaka and Takeuchi (1995), learning is the result of destabilisation of an accepted ‘truth’, and the movement from old ‘know-how’ to new ‘know-how’. This process implies the input of new, explicit knowledge perceived as relevant (Nonaka and Toyama, 2003). A principal idea of this perspective is that to be of use in a specific context, explicit knowledge must undergo a conversion. As discussed by Aasen (2019) (Chapter 7 in this volume), knowledge conversion can be understood as a key concept, core to entrepreneurial discovery as well as to the subsequent events leading to the perceived existence of an opportunity for profit on the part of many people, and further actions on that perception. The research of Nonaka and von Krogh (2009) suggests the concept of‘knowledge conversion’ is composed of two elements. The first is individual knowledge expansion, coming about through combination of own knowledge with that of others. The second is group knowledge dynamics, energised by the interaction between explicit and tacit knowledge along the continuum (Janhonen and Johanson, 2011). In these processes ‘tacit and explicit knowledge mutually enhance each other towards increasing capacity to act’ (Nonaka and von Krogh, 2009: 638). The outcome of the knowledge-conversion processes is dependent on the process participants, because it is the interpretation of the knowledge into the context which is the important step. The ‘medium’ of interpretation is tacit knowledge, which could also be referred to as (non-articulated) experience. As pointed out by Janhonen and Johanson (2011), knowledge-creation and codification processes do not necessarily lead to performance improvement or value creation. Companies’ competitive advantages depend not only on knowledge creation but more importantly on knowledge conversion, diffusion and application. Thus, to be useful, the resulting ideas must then be articulated, shared, accepted and acted upon.

The Mid-Norway salmon farming case

Like the rest of the country, fisheries and fish farming represent significant export values in Mid-Norway, and is acknowledged as a cornerstone in the economic activity of the region far into the future. From the modest beginning, nearly 30 years ago, fish farming has grown into a multi-billion-euro industry creating local value for the 32 coastal municipalities in the region. The region contributes to about 25 per cent of the total sales value of farmed salmon in Norway. The industry is dominated by three large, national salmon farmers with activity in many locations all along the coast, accompanied by many small, local farmers, and sub-suppliers. A total of 18 companies produce edible salmon and rainbow trout, while 19 companies produce young fish. Most fish farming companies, both large and small, are family owned. In 2014 there was a total of 216 licences in the region, in 152 locations. 168 licences were granted to produce edible fish, eight for broodstock, and 36 for young fish. In addition, there were 13 R&D licences, as well as a few exhibition and educational licences.

In many ways, focusing a case of Norwegian salmon fanning on one region may seem to be a redundant delimitation, as this has indeed become a national industry. The large fish farmers dominating regional activity are established in several Norwegian regions. Yet, more than anywhere else in the country, the climate for entrepreneurial discovery and innovation in Mid-Norway should be favourable, with the combined and strong presence of fish fanners, suppliers, finance companies, public support, and strong education and research institutions.

The county municipality of Trondelag has taken an important role in the development of the regional fish farming industry, as a connector, coordinator and initiator of development activities. The connection between the county and the industry is close. Furthermore, actors from education and research are well integrated with the industry, and the approach they have developed to cooperation serves as a model for other regions. There are two upper secondary schools offering high-quality education within aquafarming in close cooperation with the industry, and the students are very popular. Both high schools and the industry are granted education and information licences to educate pupils, students, and the public. Moreover, the regional fish farming industry finances a professorship at the Norwegian University of Science and Technology (NTNU) in Trondheim. SINTEF, which is the largest independent research organisation in Scandinavia, is also situated in Trondheim, and is a key partner for the industry. Among other important partnerships is a centre for research-based innovation, Exposed, aiming to enable a sustainable expansion of the fish farming industry.

The Mid-Norway fish fanning case was framed as a case of exploring the role of research-based knowledge in processes of knowledge conversion, and the potential importance of this for innovation in the regional salmon farming industry. Entrepreneurial discovery emerged during the project as a significant concept, in part justified by a growing regional interest in smart specialisation strategies.

A reason for the original framing of the case was that from the very beginning of the Norwegian aquaculture adventure, the research community cooperated closely with the emerging industry. During the first years of salmon farming, several biological and technological challenges were overcome, such as the development of dry feed and onshore rearing of young salmon (i.e. smolt) (Aarset, 1998). This fundamentally advanced salmon aquaculture. Today, there is an increasing recognition of the need for research-based knowledge within the fish farming companies, gradually leading to the employment of more people with higher education at the academic level, facilitating knowledge transfer.

When studying actors in the regional fish farming economy, our original assumption was that the dynamics between industrial actors and research and education communities were empirically accessible in two ways: (1) through networks and systems of innovation providing flows of codified/research- based knowledge, and (2) through micro-level processes of converting and applying this knowledge through combinations of research-based knowledge with various forms of tacit knowledge. As distinct from mainstream studies, systems and networks of innovation were viewed as sources to, as well as results of, such. A second assumption was that knowledge conversion is the result of localised interaction between groups of people with different forms of knowledge. The concept of‘ba’ (Nonaka and Takeuchi, 1995; Nonaka and Konno, 1998; Mariussen, 2013) was adopted to enable a discussion about how the many actors in and related to the aquaculture industry share, combine, and convert knowledge in different forms and from different sources in interactive processes of learning and innovation.