**4. Competitiveness of regions**

Private organizations are doing their best to be more profitable and they are open to new ideas. That is why companies are actively starting to use new technologies and trying to find the most suitable business environment for their locations. At the government, region, and town level, the situation is quite different. Their task is not to make business, but to develop good and fruitful business environments for companies. Building infrastructure, providing a skilled labor force, etc., have been their main tasks.

By identifying the key factors for the Industry 4.0 related renewal, we will find different factors, i.e., "levels." These are described in **Figure 2**.

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**Figure 2.** Factors affecting Industry 4.0 related renewal.

#### **4.1. Legislation**

what changes are about to happen in our industry or value network and how applying digitization makes it possible to remain competitive and even further increase competitiveness.

The development of new technologies not only causes major changes and transformations, but also provides plenty of opportunities for exploitation of sustainable, residential, and residential-oriented urban centers and environments. The subscriptions to the Internet (IoT) alone will rapidly multiply in the years to come. This development affects traffic, travel chains, housing for commerce, welfare, healthcare, tourism, services, industry, etc. This development of new Internet-related technologies described in **Figure 1** places urban development and

Training, development, innovation, and testing can no longer take place in a separate and closed laboratory environment, but to be able to create sustainable innovations education and development activities must be brought into an operating environment where residents, nongovernmental organizations, political decision-making, civil servants, and students meet with regional development and different disciplines. The urban infrastructure is a part of the innovation-based ecosystems of different actors that produce new innovations at their interface.

Private organizations are doing their best to be more profitable and they are open to new ideas. That is why companies are actively starting to use new technologies and trying to find the most suitable business environment for their locations. At the government, region, and town level, the situation is quite different. Their task is not to make business, but to develop good and fruitful business environments for companies. Building infrastructure, providing a

By identifying the key factors for the Industry 4.0 related renewal, we will find different fac-

development principles into a new perspective.

**Figure 1.** Rapid adaptation of new internet-related technologies.

136 Digital Transformation in Smart Manufacturing

**4. Competitiveness of regions**

skilled labor force, etc., have been their main tasks.

tors, i.e., "levels." These are described in **Figure 2**.

Legislation is the very first level that we can see as the driver of development. At this level, we should understand that legislation should not be considered as an actor, which regulates/ limits (actions), but legislation makes new kinds of business possible and supports business development. Generally, we can understand that legislation gives "the rules of the game" and this way makes business environments more predictable with less business risks. Legislation also gives the framework for operations like recycling, land use, and new business models, but also taxation decisions might encourage new businesses. EU legislation gives the framework for legislation but still there is national legislation, which steers local business and industry.

#### **4.2. Land use**

We have industrial/logistics areas where companies are located. Usually, the industrial areas have developed and profiled themselves based on the strengths in the local region like logistic connections, population, energy, raw materials, knowhow at universities, skilled labor force, and so on. The question will be: how should we plan land use (business/logistic areas) so that companies would be able to create a fruitful business ecosystem, efficient material use (circular economy), and minimize logistic expenses. This is usually a long process and the steps are not known accurately.

#### **4.3. Regional strengths**

We have industrial/logistics areas where companies are located. Usually, the industrial areas have developed and profiled themselves based on the strengths in the local region (like logistic connections, population, energy, raw materials, knowhow at universities, and skilled labor force).

#### **4.4. Enterprise ecosystem**

There are clear indicators that short distances will improve co-operation between companies. In the case of material and economic efficiency, short distances give savings in logistic expenses.

### **4.5. History**

Every region and business has its own history and traditions, which makes it challenging to introduce new ideas makes it more difficult to manage change.

The vision and approach are based on the need of regional clusters and the strengths of a region (e.g., logistic, university, natural resources, etc.). Industry 4.0 development can be seen as a smart utilization of digitization, which has European level comparability to European

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Contents of education and training will be designed so that content will respond the future needs. Learning will take place in "real world" environments (field labs), which gives faster cycle time for development activities and implementation. This is the way, how to ensure the birth of new innovations and the renewing the businesses and organizations. In universities, engineering students among others should be prepared to meet the demands of Industry 4.0 in order to be able to operate in future employment domains [9]. However, Industry 4.0 should not be linked to the competence requirements of only engineering students and thus future engineers. It is probable that Industry 4.0 affects largely the whole society, and therefore all the university students should be somehow involved with various perspectives of Industry 4.0.

Most regions do not have a strategy or analysis on aligning regional development and digitization. Häme region of Finland is designing its new strategy "Smart Häme" to respond the challenges of digitization and to be the part of Digital Single Market (DSM). Based on that, the focus is to increase the know-how on how to successfully apply digitization on Häme region. After a Smart Specialization analysis, five key ecosystems (clusters) were identified. These were expected to be the most critical for the development and attractiveness of Häme region (see **Figure 3**). These are the ecosystems, which also should have special attention and resource allocation, in development: "Smart Agriculture," "Smart City," "Smart Factory," "Smart Wellbeing," and "Smart Defense." The evaluation criteria, which were used to select the ecosystems

development in all key clusters.

**Figure 3.** Häme region clusters/"Smarts."
