Collaborative Innovation Ecosystems as Platforms for Sustainable Entrepreneurship: A Regional Case from Lappeenranta, Finland

Abstract

Regional innovation governance plays a critical role in aligning economic development with sustainability
objectives. According to Systems of Innovation theory, regional actors, including municipalities, research institutions, and
businesses, form interconnected systems that shape the generation, diffusion, and commercialization of knowledge.
Effective governance within these systems is essential for enabling regions to respond to societal transitions, including the
shift toward green and circular economies. This paper explores how regional innovation ecosystems can serve as enablers
of sustainable entrepreneurship and corporate development. Focusing on a pilot project led by the City of Lappeenranta, in
partnership with Ikigaia and Servitium, and supported by Sitra, the study examines how cross-sectoral collaboration can be
structured to address shared sustainability challenges and stimulate innovation in green growth sectors. Drawing on
Innovation Ecosystem Theory and the Triple Helix Model, the research investigates how public, private, and academic
actors co-develop governance models, pilot initiatives, and communication platforms that support entrepreneurship in
emerging fields such as biomaterials, hydrogen (Power2X), and small modular reactors. The project’s methodology includes
stakeholder interviews, participatory workshops, and comparative benchmarking with other Finnish "InnoCities" to cocreate
new collaboration models. Through the lens of Stakeholder Theory, Collaborative Governance, and Dynamic
Capabilities, the paper reveals how shared leadership and adaptive processes foster a culture of sustainable innovation. It
also identifies persistent challenges such as fragmented funding, misaligned organizational timescales, and knowledge
accessibility, offering actionable strategies to overcome them. The findings contribute to ongoing discourse on sustainable
innovation governance by presenting a replicable and flexible model for ecosystem-based co-creation. It offers insights for
local governments, innovation intermediaries, and corporate leaders seeking to align entrepreneurial activity with longterm
environmental and societal objectives.