Putting institutions and agency into innovation system theory. The Oslo Cancer Cluster

from innovation system and institutional entrepreneurship perspectives

Arne Isaksen, University of Agder and James Karlsen, Agderforskning and University of

Agder

Abstract

Innovation system has become an important concept in academic and policy circles. The

concept underlines the interactive and socio-cultural element of innovation processes. The

concept is, however, also criticized for being too static, too occupied with systems at the

expense of actors, and for giving little concrete policy advices. The paper discusses if the

concept of institutional entrepreneurship can enrich the innovation system approach and offset

some of the alleged weaknesses of this approach. The paper tests the possibilities of linking

the innovation system and institutional entrepreneurship approaches through a case study. The

study examines the development of the organisation Oslo Cancer Cluster to become a key

actor in a dynamic innovation system centred on research and production of new cancer

treatments in the Oslo region, and to achieve the status of a Norwegian Centre of Expertise by

Innovation Norway. The case points amongst others on the long term building of

organizations and knowledge in cancer research in the Oslo area, recent institutional changes

that paved the ways for the Oslo Cancer Cluster organizations, and the efforts of a few

entrepreneurs and organizations to bring about the changes. The study illustrates possibilities

of adding perspectives from the institutional entrepreneurship approach into the innovation

system way of thinking.

Introduction

Both researchers and policymakers have shown increasing interest in the concept of regional

innovation system (RIS) over the last three decades (Asheim et al., 2011). The concept

belongs to a wider innovation of system approach which since the 1990s has become a

dominating way of conceptualising innovation processes in much of the literature, as evident

in the emphasis of the Oxford Handbook of Innovation (Fagerberg et al., 2005), and the

appraoch is also seen as highly relevant for understanding industrial development processes

and for designing public policy in developing countries (Lundvall et al., 2009). The

innovation system school has contributed strongly to enhance the understanding of the

complexities of innovation activities (Asheim et al. 2011, p. 877), the embedding of

innovation processes in social and institutional structures, the importance of collaboration and

collective efforts among a range of actors (rather than the work of lonely heroes) in

achieving successful innovations, and the evolutionary and often long-term nature of

innovation activity.

Despite these advances in our understanding of innovation processes, some deficiencies exist

in the innovation system research. This article aims to address two deficiencies pointed out by

Asheim et al. (2011). The first is that the innovation system school remains under-theorised,

while the second points to a need to enhance our understanding of the dynamics of RIS and

the emergence and evolution of new knowledge intensive industries (op.cit., p. 880). This

article aims for a theoretical contribution by combining the innovation system school and the

approach of institutional entrepreneurship. This last approach can contribute with a dynamic

element, especially with regard to institutional change, and with a focus on individual

entrepreneurs and agency to the rather structurally based innovation system school.

The second deficiency mentioned by Asheim et al. (2011) is addressed by a study of the

emergence, development and status of the Oslo Cancer cluster. This is a cluster organisation

established in 2006. Oslo Cancer Cluster received the status as one of 12 Norwegian Centres

of Expertise already in 2007, a status which is reserved for the internationally most

competitive clusters in Norway. The cluster organisation consists of more than 60 partners

including research institutes, global biotech and pharmaceutical firms located in Oslo and

beyond, established and venture based Norwegian firms, hospitals and patient organisations

(Furre & Flatnes, 2010; Oslo Cancer Cluster). The core activity of the cluster and the cluster

organisation is the long-lasting and expensive commercialisation process from basic research

to products on the market. Even established as a cluster organisation in 2006, the activity

builds on several decades of cancer research in hospitals, universities and R&D-institutes in

Oslo. The cluster organisations has experienced a fast increase in number of participants since

2006, and the cluster appears to be dynamic as demonstrated by 11 firm start-ups between

2007 and 2009 (Furre & Flatnes, 2010).

This article focuses on the institutional change demonstrated by the creation of the Oslo

Cancer Cluster and the apparently increase in joint activities among cluster participants the

last few years. The main empirical research questions are: What is the core of the institutional

change that spurred the emergence and development of the Oslo Cancer Cluster? Who were

the central institutional entrepreneurs in this case? These questions are followed up by a

theoretical question regarding in what way the institutional entrepreneurship approach can

bring more dynamism and agency into the innovation system school of thought.

The article is organised as follows: first, the innovation system school and the approach of

institutional entrepreneurship are described and discussed. Thereafter, the article presents the

empirical context of the Oslo Cancer Cluster seen through the lenses of the innovation system

approach. Third, the article analyses aspects of the development of Oslo Cancer Cluster from

the viewpoint of the institutional entrepreneurship approach. The final section discusses the

possible added value of combining the innovation system and institutional entrepreneurship

approaches.

The innovation system school

An innovation system (IS) approach has been developed over two decades as a generic

framework to analyse international competitiveness in terms of innovation and learning rather

than merely via labour costs (Asheim & Gertler, 2005; Lundvall, 2007). The approach

conceptualises innovation activity as an interactive and dynamic process carried out through a

rather stable network of private and public actors. The actors constitute two main subsystems

(Cooke et al., pp. 104-105). The first consists of firms in the industrial sector in question,

including their upstream and downstream activities. The second subsystem includes the

knowledge infrastructure of education, research and technology transfer institutions. The

system of innovation approach by the Aalborg school highlighted userproducer interaction

as vital for innovation, and cooperation between the actors is underpinned by an institutional

framework of informal rules of conduct, government regulations and policy instruments

(Edquist, 2005; Lundvall, 2007). Some actors enter into long-standing co-operation

characterised by interactive learning in an atmosphere of mutual understanding and common

rules.

Innovation systems are classified according to the context considered most important for the

main actors and institutions (Edquist, 2005; Wicken, 2008). The important context can be

defined by geography (national and regional systems), industrial sectors (sectoral systems) or

generic technologies (technological systems). Firms are often part of several of these

innovation systems; however, one type of system may be the most relevant to specific firms.

A number of global competitive Norwegian firms are, for example, part of regional

innovation systems, but depend on Norwegian sectoral innovation systems within the oil and

gas and the maritime sector for R&D co-operation (Isaksen, 2009).

The concept of regional innovation system (RIS) is geared towards the study of informal co-

operation, knowledge spillovers and the exchange of tacit knowledge between co-located

partners. Innovation processes are triggered by a wide range of factors as a regions

competitiveness is determined by the productivity, in the widest sense, of its firms, workers

and other economic, social, institutional and infrastructural assets(Martin, 2011, p. 236).

Sectoral and technological innovation systems focus on the technology, the knowledge base

and the institutional context in which firms act (Malerba, 2004). Innovation processes are

affected by industrial sectors, and firms that face similar technologies are seen to share some

common behavioural and organizational traits and develop similar range of learning patterns,

behaviour and organizational forms(Malerba, 2004, p. 15). The national level is particularly

important when it comes to the policy dimension; As long as national states exist as political

entities with their own agendas related to innovation, it is useful to work with national

systems as analytical objects (Lundvall et al., 2002, p. 215). The last quotation points to the

fact that the innovation system concept must be seen as a focusing devise, i.e. an analytical

tool, rather than a standard prescription for policy makers (Lundvall, 2007).

The IS-approach is, however, criticised on various grounds, amongst other for being

structural, static, geographically closed, and applied as a normative policy prescription. Critics

point to the fact that the approach is primarily concerned with the structural elements of the

innovation system, demonstrated in the institutional set-up of the knowledge and industrial

sub systems and knowledge flow between these (Uyarra, 2011). The importance of actors,

such as entrepreneurs in universities and firms, for innovation performance are much less

considered. Likewise, the role of uneven power among actors when it comes to prioritising

tasks and resources in organisations in the innovation system seems to be absent in IS studies.

Furthermore, IS studies have often been snapshots focusing on the characteristics, and

strengths and weaknesses, of particular well developed national or regional systems, while the

historical development of the systems is less reflected upon (Doloreux & Parto, 2005). The

regional innovation system approach, in particular, is accused to overstating regional inter-

firms relations and the role of the regional knowledge infrastructure at the expense of extra-

regional relations and factors (Fitjar & Rodguez-Pose, 2011, which build on empirical results

from five large Norwegian cities). Critics also maintain that the approach has been used in an

instrumental way in fostering standardised models for best innovation practise that often

neglect differentiated contexts (Flysand & Jakobsen, 2010). This is seen in statements such

as countries possessing national and regional innovation systems in specific sectors will

become wealthier (Niosi, 2010, p. 43).

Much of these criticisms are nevertheless misplaced and outdated. With regard to the static

character of innovation system research, recent contributions in evolutionary economic

geography, for example, aim to understand precisely how the real economy evolves through

real time (Boschma & Martin, 2010, p. 4). This approach departs from the micro level,

focusing on how firms learn and innovate based on their routines. It is well established in this

approach that competitive advantages are seen as a dynamic process, and not a static state of

affairs (Martin, 2011, p. 240). Even so, empirical studies of innovation systems still most

often focus on a specific point in time. The critique pointing to closed innovation systems is

also misinformed as social systems are always open and, thus, regional innovations systems

usually have diverse links to national and international actors and innovation systems

(Tdtling & Trippl, 2011, p. 457). Innovation system research is, however, a mainly structural

approach with little focus on the activity of individual entrepreneurs. The article now turns to

another methodological approach with discussion of the institutional entrepreneurship school

of thought which is more actor based.

Institutions, organizations and entrepreneurs

The concept institution is associated with conceptual diffuseness within the IS approach. It is

sometimes used about actors such as organizations, while other times about formal and

informal rules of behaviour (Edquist, 2005, p. 186). To increase the rigor, the specificity of

the approach and to make it more theoretically consistent it is necessary to discuss and define

key concepts. The concepts institution, organisation and entrepreneur are examples of

concepts developed within other approaches and then adopted to the IS approach.

The concept entrepreneur has a wide range of meanings. At the one extreme an entrepreneur

is a person that dares to take a risk and generate changes in the economy, and at the other end

it is often used about a person that establishes any kind of business. Schumpeter (1934/1968)

underlined the connection between the entrepreneur and the creation of innovations. The

function of the entrepreneur is to create innovations, and Schumpeter was very clear that if the

entrepreneur did not continue to create new innovations he/she was no longer an entrepreneur.

In Schumpeters approach the entrepreneurs function is to create radical changes, and this

can only be done through a process of creative destruction. This implies that in order to

innovate something else have to de destructed so that resources can be used for new

innovations.

The concept of entrepreneur has a different meaning within institutional theory because of the

concept institution. There are two different approaches to the concept institutional

entrepreneur within institutional theory; an economic/political, and a

sociological/organizational (Bruton et al., 2010; Hardy and Maguire, 2008). In this article the

first approach which is used with the work of Alfred North (1990) is the main source of

inspiration.

Norths approach is founded in his understanding of institutions as the rules of the game in

society or, more formally, are the humanly devised constraints that shape human interaction

(North, 1990, p. 3). Institutions are both formal, such as laws in a country and codified rules

in organizations, and informal, such as norms and codes of behaviour Institutions regulate

human behaviour; i.e. state what people should do and what they should not do. Institutions

are different between different IS. Laws and regulations are different between countries and

informal institutions may vary between nations, regions and organizations. The institutional

set-up (the specific configuration of formal and informal institutions) of an IS therefore varies

between different countries, region and industries.

Institutions are relatively enduring. This means that they are relatively hard to change but can

be changed in a long time perspective. Institutional change must therefore be analysed over

long time. In short term perspective, changes can be hard to identify because they are usually

slow and incremental.

North (1990) distinguishes between institutions and organizations. The latter are groups of

individuals bound by some common purposes to achieve goals. Organisations are such as

political, economic, social and economic bodies. Organisations are the players in games in

society and their behaviour in the game is regulated by institutions (rules). It is the interaction

between institutions and organisations that create institutional change, and the function of the

entrepreneur is to act as the change agent.

North, as Schumpeter, argued for the entrepreneur as the change agent of institutions, but

change in Norths approach is slow and incremental. However, even small changes can have a

huge impact once the development in locked into a specific development path. The most

important reason for change is the price mechanism. Once an entrepreneur experiences a

change in the price he/she tries to change the contract or agreement. When changes in

contracts or agreements and are repeated over a long time, and the development has properly

been locked in to a specific development path, a new institution may emerge (North, 1990, p.

84).

The direct cause, i.e. which entrepreneur that first initiated the change, can be hard to

identify since the cause may have occurred a long time ago and identified at a much later

stage. The cause of an institutional change can be a critical incident a long time ago. Critical

incidents are significant happenings that are important for the change process (Pettigrew,

1990). Establishment of new organizations or new ways of working in, for example, a region

or an industry can be critical incidents and indicators of institutional change. Based on this

view the article aims to identify critical incidents and important institutional entrepreneurs for

the development of the Oslo Cancer Cluster.

Context and method

Oslo Cancer Cluster (OCC) is part of the NCE (Norwegian Centre of Expertise) program,

which marks the preliminary end point of a long term institution building process among the

organizations that are occupied with research and production of new cancer treatments in the

Oslo region. The NCE program was launched in 2006 by Innovation Norway with the aim of

strengthen innovation and internationalization processes further in already strong regional

clusters, and where the members of the cluster organisations agree to enter long-term binding

collaboration (Isaksen, 2009).

The NCE program has a long-term perspective. The participating firms are offered

professional and financial support for development processes up to ten years. Regional

clusters program have to apply for membership. The criteria for membership are quite

restricted, and there is severe competition to become a member. First, local/regional actors

have to establish a partnership (or use an already existing partnership) of relevant players to

form an application. The application must be embedded in the most important firms in the

region, in knowledge organizations such as university, higher education organizations, and

other R&D organizations, public support organizations and financial actors. Through the

application process the numbers and the geographical area of the cluster are defined.

Second, the applications are evaluated by the national owners of the program, supported by

external experts. Innovation Norway aims making a brand out of the NCE. Thus, only the best

applications are approved, and the program now has 12 regional clusters as members. The

description and analysis of Oslo Cancer Cluster from the regional innovation system

perspective depart from the member list of the cluster. Key information about the member

organizations, such as year of establishment, number of employees and turnover, are obtained

from the database Purehelp, which collects information from public sources. Further

information about ownership, key products and services, organization, annual reports etc.,

was gathered from the home pages of the member organizations.

The database Purehelp and home pages were also used to find out if the key firms in the

pharmaceutical industry in Oslo (NACE 21 Manufacture of basic pharmaceutical products

and pharmaceutical preparations) are members of Oslo Cancer Cluster. The question is

whether the members of Oslo Cancer cluster include the key actors in the manufacturing

industry that develop and produce cancer treatment as their core activity. Purehelp reports 14

firms within NACE 21 in the Oslo region which are not members of Oslo Cancer Cluster.

Two of these are pharmacies. The others, except one firm, are Norwegian producers of a wide

specter of drugs and health-related products. None of these firms are specialized within cancer

research or production, thus, the firms do not belong to the innovation system of cancer

research and production in Oslo.

The above mentioned information was used to analyse Oslo Cancer Cluster from an

innovation system perspective but it was not sufficient to discuss the case from an

institutional entrepreneurship approach. We supplemented with available written material of

main organization in the cluster and their development, and also with in-depth interviews with

two key informants with regard to the establishment and development of the cluster.

The informants were selected on basis our knowledge about the cluster and the cluster

organization. We decided to have two interviews, one with the leader of the cluster

organization and one with a CEO from a firm. It is what Flyvbjerg (2006, p. 230) calls

information-oriented selection of cases where the research strategy is to maximize the utility

of information from small samples and single cases, such as in our case. We created a semi-

structured interview guide with some main questions, however were flexible to follow up with

new questions.

The interview with the firm representative aimed to gather information about his opinion

about OCC, such as its function in the cluster. The person we interviewed has been working

for a long period in several pharmaceutical firms in the Oslo region and could provide us with

important information about the development of OCC. The interview with the manager of

OCC gave us in-depth information about the cluster organization, since he had both been the

leader of the chair and was now the leader of the cluster organization, in addition to central

positions in other organizations as well.

Oslo Cancer Cluster from the innovation system perspective

Oslo Cancer Cluster is as said the name of the member organization consisting of

organizations that in different ways are engaged with development of new cancer diagnostics

and medicines. We use, however, the cluster concept in analytical terms to denote

geographically bounded concentrations of interdependent firms (Asheim and Isaksen, 2002).

Regional innovation systems denote regional clusters of firms that are surrounded by

supporting knowledge exploration and diffusion organizations, which may be located in or

beyond the region in question (op. cit.). The innovation system approach is deemed to be

particularly relevant in studies of the pharmaceutical industry. This industry can be

considered as a system or network because innovative activities involve, directly or indirectly,

a large variety of actors, who are heterogeneous in many respects (McKelvey et al., 2004, p.

112). Important actors in the sectoral innovation system of pharmaceuticals include large

multinationals, small, specialised and research intensive firms, research institutes,

universities, venture capital companies, regulatory authorities (of e.g. patent laws), and the

publich healt system as an important customer. The innovation system has some specific

industry characteristics, such as the fact that the pharmaceutical industry is extremely R&D-

intensive, requires a scientific workforce that is connected to the wider research community,

has strong IPR (Intellectual Property Right) regimes, strict rules for the approval of new drugs

which demands sophisticated and expensive clinical trials, and as a result high barriers to

entry, and the industry is subject to cost containment policy (op. cit.). A further characteristic

is the fact that pharmaceutical and biotechnology industry clusters are found in relatively few

places (Gertler and Levitte, 2005). While efficient international circulation of scientific

knowledge in codified form (Gertler and Levitte, 2005, p. 488) takes place in biotech, firms

also benefit from geographical proximity to scientific research, to venture capital and the

expertise that comes with it, and from access to highly educated people in a local labour

market. Clustering is strengthened by the fact that entrepreneurs, who are often scientists,

most often locate in their local area (op. cit.). Such characteristics also point to the relevance

of using regional innovation system as lenses to describe the structure and working of the

industry focused on cancer medicine research, development and production in Oslo. In doing

this we focus on member organizations in Oslo Cancer Cluster.

Table 1 sum up a few key facts about members of the Oslo Cancer Cluster1. The table

indicates that the regional innovation system of cancer development and production includes

organizations that fill various and key roles. The industry category consists of 39 firms. As

much as16 of these are Norwegian divisions of often very large pharmaceutical

multinationals, which are the dominant players within the industry. Nine of the12

pharmaceutical corporations found on Fortunes list of the worlds 500 largest corporations2

that have a division in Oslo. Most of the Norwegian divisions are occupied with marketing,

selling and informing about the corporations products to Norwegian customers. In about five

firms the Norwegian divisions also take part in clinical tests and research where Norwegian

patients and doctors participate. Boehringer Ingelheim Norway, for example, is responsible

for a number of clinical studies in cooperation with Norwegian medical centers and hospitals,

and this firm leads large, international projects within the corporation.

The divisions of international corporations represent the bulk of jobs among the members of

Oslo Cancer Cluster. However, a number of younger, independent and mostly small

pharmaceutical firms are also part of the cluster organization. These are most often academic

spin-offs but also industrial spin-offs or start-up companies with Norwegian entrepreneurs and

venture capital. The firms are in general still in the clinical test phase of their first products or

occupied with developing further a technological platform. The firms often cooperate with

national and foreign R&D institutes and are supported by the research council of Norway and

the EU. These are typical dedicated biotechnology firms (Chiaroni and Chiesa, 2006) or what

McKelvey et al. (2004) denote as specialised new biotechnology firms. These are science-

based companies based on a new idea about new pharmaceutical compounds or technical

devices, and the firms often aim to license products to larger pharmaceutical companies at the

latest possible stage; typically clinical test phase II and III.

Although the firms generally are in the clinical test phase a few also have put patent protected

products on the market under their own brand name or have license agreement with a global

biotechnology company. Norway has 122 patent applications in biotechnology in the period

2006-2009 filed under the Patent Cooperation Treaty (according to OECD Patents Statistics).

This is low in international comparisons. A bit more than half of these patent applications

come from firms in the Oslo region. Photocure is one of few Norwegian owned

pharmaceutical firms with marketed products and world leadership in a specific technology.

1 The information builds on the database Purehelp.no, and on home pages of members of Oslo Cancer Cluster. A few member organizations such as two interest groups have not been placed in any of the categories.

2 http://money.cnn.com/magazines/fortune/global500/2009/industries/21/index.html

Photocure was founded by the Norwegian Radium Hospital in 1997, and has also spun off a

new firm.

Table 1: Classification of members of Oslo Cancer Cluster in 20123

Sub system Type of organization Number of

organizations

Median age of

organizations

Ca. number of

employees in

Norway

Industry Norwegian divisions of

multinationals

16 1990 1,000

Norwegian owned firms 23 2001 300

Knowledge

organizations

R&D institutes 6 1998 600

HEIs 4 1971 n.a.*

CROs 4 1997 20

Financial

actors

Seed and venture capital

funds

6 2007 50

Source: Key information of members of the Oslo Cancer Cluster from Purehelp.no and members home pages.

* It is not possible to state clearly the number of employees occupied with teaching and research within the field

of cancer in HEI

The Oslo Cancer Cluster also includes a number of different knowledge organizations. Six of

these are classified as R&D-institutes which contain a total of 600 employees. Half of these

are found at the Institute of Cancer Research at Oslo University Hospital. This

multidisciplinary institute has since its start in 1954 been central in Norwegian and

international cancer research. Norway also has comparatively many publications within

cancer research (oncology) (Reve and Sasson, 2012). Other public research institutes also

focus on cancer research. The Centre for Cancer Biomedicine with about 100 employees and

located at the University of Oslo and The Norwegian Radium Hospital is appointed as a

center of excellence by the Research Council of Norway. The Norwegian Institute of Public

Health, Department of Biopharmaceutical Production with 35 employees is a contract

manufacturer and service provider for biopharmaceutical products in general and aims to

accelerate product development and supply products for clinical trials. Important is also the

Cancer Registry of Norway, Institute of Population-based Cancer Research. The Register was

established in 1951 as one of the worlds oldest national cancer registries. All medical doctors

in Norway are instructed by law to notify new cancer cases to the Cancer Register. The large

amount of data and the unique personal identification number in Norway, makes the Cancer

Registrys data suitable, also internationally, for research. A similar, but smaller register is

organized by HUNT Bioscience. This is a public company which offers industry access to the

HUNT Bio- and Databank which is a fully established Norwegian-population-based

prospective health survey and biobank collected through 30 years in three phases from a

regional cohort of 130,000 individuals. The HUNT Study is one of the largest and most

comprehensive population-based health studies ever performed.

3 Build on membership list in May 2012 (www.oslocancercluster.no)

The knowledge organization also include four higher education institutions (HEIs) and

recruiting companies, including the University of Oslo, and four contract research

organizations (CROs). The HEIs are important both when it comes to providing employees,

performing research, and as sources of several spin-off firms. The CROs provide a range of

support, such as running clinical trials and developing documentation for products, to the

pharmaceutical and biotechnology industries in the form of research services outsourced on

contracts. Three of the four CROs operate from Sweden.

The last group in Table 1 includes six seed and venture capital funds. Included here is

Innovation Norway which is the Government's most important instrument for innovation and

development of Norwegian firms. The other funds are focused on supporting academic spin-

offs and on life science start-ups. Inven2 is the largest actor within commercialization of

research in Norway, owned by the University of Oslo and Oslo University Hospital and

particularly occupied with innovations from these organizations. A similar fund is the

Norwegian Radium Hospital Research Foundation (RF), which is a pre-seed investor and

project developer, aimed to strengthen cancer research at the Radium Hospital and also invest

in companies based on a larger group of leading Nordic research institutions. Bio-Medisinsk

Innovasjon AS (BMI) is an investor and incubator for biomedical start-ups, cooperating

closely with Inven2, RF, the TTO (Technology Transfer Office) for Oslo University Hospital

and the University of Oslo. BMIs project portfolio includes all ongoing projects from RF,

which is also one of BMIs major owners. The two other funds include a seed capital fund and

a venture company focused on life science sectors, and where the venture fund has invested in

many of the start-ups firms in Oslo Cancer Cluster. These funds typically have deep

knowledge of the technology in which they are investing, and contribute with managerial

advices.

Table 1 demonstrates that Oslo Cancer Cluster represents a fairly well-developed innovation

system. It consists of a combination of Norwegian divisions of global pharmaceutical

corporations and an undercurrent of mainly small Norwegian firms which are mostly in

clinical test phases. The firms are supported by a number of dedicated R&D-institutes,

university education, contract research organizations, seed funds and venture companies

focused on the life science industry, in addition to the networking activity, promotion of the

cluster and efforts to increase the availability of capital by Oslo Cancer Cluster. The

innovation system then includes the key actors and factors that can feed a cumulative circle of

development (Chiaroni and Chiesa, 2006). This is a much more positive assessment than the

one by Reve and Sasson (2012) of the indeed much wider health and biotechnology sector in

Norway, which is said to lack a well-developed industrial cluster and local investors (p. 217).

The distinctiveness of the pharmaceutical industry becomes hidden within the large health and

biotech sector which includes among other things pharmacies. The innovation system

centered on cancer research and production in Oslo is, however, in an early stage of

development which is seen in the quite many spin-off and start-up firms in clinical trials, and

the full potential of the Oslo Cancer Cluster is still to be proven. It is however interesting to

examine which institutional change that spurred the fast emergence of the Oslo Cancer

Cluster, which is the question that we now address.

Oslo Cancer Cluster from an institutional perspective

Oslo Cancer Cluster, OCC, was established as a cluster organization in 2006, and approved as

a member of the NCE program in 2007. The midterm evaluation in 2010 gave OCC a very

positive assessment (Furre & Flatnes, 2010). Compared to many of the other NCE members

OCC has used short time to fulfill the NCE criteria. The usual way is that cluster

organizations first become members of the Arena program, a cluster program also

administrated by Innovation Norway, but with a much lower profile and statues as NCE. Why

have OCC been so successful in such a short time? What is the story behind OCC?

Discussed from the institutional change approach the story behind OCC consists of two parts.

One part of the story is the long term development process of diagnosis, treatment and later

research on cancer in the Oslo region. This is a complex story about an institutional

development process that goes back almost 100 years and involves many actors at different

points of time. This story is not the main issue in this article, and will therefore not be

discussed in-depth. However, some critical incidents and organizations are important to

mention in order to understand the institutional set-up which OCC has developed from, see

Table 2.

Some formal institutions and organizations have been very important for development of

cancer research in Norway, such as the establishment of a law registration of cancer,

establishment of the Cancer Register and the Radium Hospital, cf. the previous section. Two

of these organizations, the Radium Hospital and the research foundation Norwegian Radium

Hospital Research Foundation, (NRHR), have a direct connection with the establishment of

OCC. The Norwegian Radium Hospital has been an important national player since its

establishment in 1932 within cancer research and cancer treatment in Norway. Due to

institutional changes in the Norwegian health system the hospital was merged together with

another hospital in the Oslo region in 2005 and then merged together with two other hospitals

to Oslo University Hospital in 2009.

The second part of the story about OCC starts in the early 2000s with the idea of establishing

the project Oslo Life Science, and the change in the strategy of NRHR in 2005. In 1986 the

Radium Hospital established The Norwegian Radium Hospital Research Foundation (NRHR).

Up to 2005 the foundation had a TTO function but in connection with the merger of the

Radium Hospital the foundation changed strategy. One part of the new strategy was to invest

in companies that are working with applied cancer research. NRHR tries to stimulate

researchers to commercialize their findings instead of writing a new academic article about

their findings. In mid-2012 the research foundation had invested in 13 companies with a total

stock value of over 200 million NOK (about 27 million euro). Many of the physicians that

have established these companies have been researchers at the Radium Hospital, and many of

the companies are working with new types of medicines that make cancer to a chronic

disease, and not a deadly one.

The establishment and development of OCC is also a story about concrete collaboration

between some key persons. The most important of these is the CEO of OCC and NRHR. He

was leading the Oslo Life Science project, was the first chairman of OCC and then later

became the CEO of OCC. He is also in the board of many of the start-up companies, which

also are members of OCC. When this person and a colleague were working with the Oslo Life

Science (OLS) project in 2006 they were informed that a new program (NCC) was established

with the aim of facilitating already strong regional clusters in Norway and were asked if they

should apply. Even if OLS was only a project idea at that time, they applied. The application

was turned down but the idea was so interesting that they were invited to a meeting with the

representatives of the NCE program. In the meeting they were told that the profile as a life

science cluster was too broad and that they should create a more distinct profile. They

followed the advice, and decided to focus only on cancer and named the new organization

Oslo Cancer Cluster. Since the CEO was also a board member of several cancer intensive

research companies he recruited these as members of the new cluster organization. In 2007 a

new application was sent and this time with a positive result. Since then OCC has amongst

others been working with marketing and promotion of the cluster through participation in

international conferences and arrangement of conferences in Oslo. OCC is besides Cancer

Bio-Sant, in France, one of two specialized cancer clusters in Europe.

Participation in the NCE program made it possible to speed up already planned activities in

the OLS project; i.e. to follow an already created path but with a more distinct profile, higher

speed, involvement of more actors, and support and advice from the program. One example of

planned activity was to extend collaborations between research organizations in different

hospitals and universities, public actors, biotechnology firms, the cluster organization etc.

This strategy was planned in OLS but at that time they did not know about the cluster

concept. The cluster concept and the work methods used in the NCE program turned out to be

meaningful Oslo Cancer Cluster and were adopted and adapted to this context.

The matching of the idea of the NCE program and the idea of the OLS project demonstrates

some common understandings. These relate to change of the behavior of researchers, such as

from the production of scientific articles only to be more concerned about commercialization

of research findings. It includes increased collaboration between actors in the industry, the

research and public sectors in order to coordinate and utilize resources. The research activity

has led to a change in the understanding of cancer treatment, from seeing cancer as a deadly

disease to a chronic disease.

The key person, the CEO of Oslo Cancer Cluster and NRHR, is educated as a physician, he

has long experience as a municipal physician, and he was involved with establishing the first

private hospital in the Oslo region and Norway. He has been an important player in the

organizations he has been involved in, has managed to identify new opportunities and see

how these can be used by OCC and NRHR to increase innovations from cancer research. It is

not possible to state definitely that he and the organizations he is working inare the cause of

the institutional change in cancer research and production in the Oslo region. This person and

organizations like the Norwegian Radium Hospital, its research foundation, the Oslo Life

Science project and Oslo Cancer Cluster have been important in identifying a change towards

more focus on cluster building and commercialization, have adapted to that change, and

through their actions have reinforced an institutional change process in the Oslo region.

Table 2: Important Incidents in the development of Oslo Cancer Cluster

Important incidents Year of

establishment

Main purpose

Establishment of the

Radium Hospital

1932 Specialist on cancer treatment. One of the biggest centers in

Northern Europe.

Law of cancer register 1951 Law imposing hospitals, pathological institutes and x-ray

departments to notify all cancer cases to the Cancer Registry of

Norway from 1. January 1952.

The Cancer Registry of

Norway

1952 One of the oldest national cancer registries in the world.

Combined with the unique personal identification number used

in Norway, the Cancer Registrys data is suitable for research and spreading of information on cancer.

Institute for cancer

research

1954 The Institute has seven research departments and about 340

employees (master students included). About 70% of the

employees and projects are externally funded.

The Norwegian Radium

Hospital Research

Foundation (NRHR)

1986 NRHR is an independent organization founded by The

Norwegian Radium Hospital and the Norwegian Ministry of

Health with the aim to strengthen cancer research at the current

Oslo University Hospital.

Oslo Life Science 2004 Established as a project.

Establishment of a new

hospital

2005 Radium Hospital merges with Rikshospitalet. In 2009 this new

organization merges together with Ullevl and Aker Hospitasl

to Oslo University Hospital.

Establishment of the NCE

program

2006 Innovation Norway, the Research Council Norway and SIVA

establish the program.

Oslo Cancer Cluster 2006 Formally established as a cluster organization.

Oslo Cancer Cluster 2007 Becomes a member of the NCE program

Discussion and conclusion

The introduction raised three questions: what is the core of the institutional change that

spurred the emergence and development of Oslo Cancer Cluster? Who were the central

institutional entrepreneurs in this case? In what way can the institutional entrepreneurship

approach bring more dynamism and agency into the innovation system school of thought?

The specific and concrete answer to the first question is that a connection appeared between

the ideas of the NCE program and the ideas that the Oslo Life Science project (OLS) were

working with. The connection was made by a researcher that knew about the plans of OLS

and the NCE program. The ideas of both organizations fitted very well, OLS adapted their

ideas to become Oslo Cancer Cluster (OCC) which became a member of the NCE program.

Without these concrete incidents; i.e. actions, OCC would not have been established at that

point of time. Without the concrete actions the ideas could have remained as ideas and talk.

The actions made them concrete.

The core of the institutional change behind the emergence of OCC is new ideas of industrial

development (the idea of clustering), a change in understanding of how research should

contribute to society (from writing yet another scientific article to commercializing research

results), a change in the understanding of cancer treatment (from curing cancer to live with

cancer as a chronic disease), and more awareness that actors in different organizations need

to collaborate to reach common objectives.

The second question is hard to answer in a concrete way. Several organizations have been

important players at distinct points of time in the development of OCC, such as NRHR and

OLS. Without their actions OCC would not have been established. In specific moments these

organizations have played the role as entrepreneurs; i.e. to make actions that made a

difference and pulled the change one step ahead. In addition, also persons, in particular the

CEO in OCC and NRHR, have played an important role by having positions in different

organizations and initiating necessary actions. With regard to the third question the article

demonstrates both strengths and weaknesses with the innovation system approach as this

approach is usually applied. By use of the innovation system way of thinking the article

describes the main actors in the system of cancer research and production of cancer medicine

and treatment in the Oslo region, as summed up in Table 1.The article describes the role of

individual actors with regard to research, clinical testing, production, marketing, sources of

spin-offs, commercialization, sources of seed and venture capital and so on. The article also

analyses where, in which organizations, and how research and innovation activities occur, and

we could conclude that Oslo Cancer Cluster represents a fairly well-developed innovation

system.

However, the empirical analysis of Oslo Cancer Cluster as an innovation system also

demonstrates some weaknesses with the system approach as the bare mapping of

organizations in the system leaves several important questions unanswered. These include

why the organizations play their specific roles in the system, how they achieved or got their

roles, which institutions or rules of the game that coordinate knowledge flow and cooperation

between actors in the system, how institutions have changed, and who are important change

agents. Thus, as emphasized above the innovation system approach would benefit from being

more dynamic and actor oriented. The key question is if our interpretation and use of the

institutional entrepreneurship way of thinking can contribute in that endeavor.

Based on our experience the adding of a dynamic aspect to the innovation system approach is

fairly straightforward. The article has traced the establishment of key organizations, described

as important incidents in Table 2, and how new organizations arise from existing ones. One

example is how the establishment of OCC was a result of ideas in the OSL project which in

turn was based on ideas from key persons in The Norwegian Radium Hospital Research

Foundation (NRHR). There is, however, a risk in finding only the success stories when

going backward into the history from the existing organizational set-up.

The institutional aspect is more difficult to handle. We see that new understandings, such as

increased local collaboration following the cluster concept and a changed emphasis from

basic research and publication to research, development and commercialization, paved the

way for the establishment of the Oslo Cancer Cluster. These are important institutional

changes which can be linked to the activities of a few key entrepreneurs in NRHR and to the

start up of the NCE program. The actual entrepreneurs and mechanisms behind the

institutional changes are however difficult to trace in detail. Nevertheless, the article has

demonstrated can the concept of institutional entrepreneurship may very well supplement the

innovation system approach. A main mission of the institutional entrepreneurship way of

think is to raise awareness of the fact that innovation system analyses should also examine

how central organizations have been established, have given rise to new organizations, how

institutions as rules of the game coordinate activities in the system and how and why these

institutions change.

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