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Chapter 2: Supply Chain Management in th... > 4. THE DEVELOPMENT OF OULU IN THE CO... - Pg. 21

Supply Chain Management in the Context of Economic Area with the positional development of the economic area in the literature of management (Rusko et al. 2009; Rusko 2008). It is also possible to connect economic develop- ment of economic area with coopetition concept (Rusko 2008). Coopetition, simultaneous coop- eration and competition (see, e.g. Brandenburger & Nalebuff 1996) are possible to divide into two types: intentional coopetition and tacit (or uninten- tional) coopetition (Walley, 2007; Rusko, 2008). In the case of location there are two categories: 1. 2. Business incubations and regional networks (intentional coopetition) Local clusters based on competition (unin- tentional coopetition) Both of these categories have connections also to SCM. In the business incubations, the firms involved in the system, cooperate in several forms, both vertically and horizontally. In the vertical cooperation these firms of the business incubations are completing with each other in their supply chains, that is: they are (or part of their activities are) belonging into the same supply chains. In the case of local clusters based on competition, there are not only possible unintentional coopetition (Rusko 2008) but also there might be reflections for SCM frameworks. The firms in the business area will complete their supply chains unintentionally basing on geographical proximity. In the case of geographic proximity the firms copy the formats (or conventions) of innovators, that is, proximity will cause the mimetic isomorphism (Ketchen et al. 2004, p. 790; Rusko 2008). The firms are copying e.g. best practices from the other firms' supply chains to their own supply chains. Disparate viewpoint, which combines supply chain management and geographical economics, is presented in Rusko et al. (2009). In the context of tourism destination they consider following levels of supply chain: operational, tactical and strategic (See, Figure 3). In the strategic level, supply chain design is the most important element. In Rusko et al. (2009) supply chain design consists of new sustaining investments or artefacts. These invest- ment decisions have long-lasting effects upon the development and success of the economic area. These decisions have also effects upon the supply chains on the tactical and operational levels. For example, in the case of Kittilä tourism destination, the decision of local municipality to concentrate on Levi winter resort in the mid 1960's had long- lasting effects on spatial tactical and operational level supply chains and SCM. (Rusko et al., 2009). The strategic level investment decisions will increase cumulatively the SCM endowment. The increase in the SCM endowments will increase also the different possible ways to combine prod- ucts or outcomes of the area: in the case of busi- ness incubations, the number talents will increase providing more versatile solutions of business incubations for existing or incoming firms. Thus, the spatial volume of business increases because of an increase in the SCM endowment of the area. (Compare, Rusko et al. 2009). This supply chain endowment concept has been used only in the context of tourism destination. However, the same framework and analogy is possible to apply in other spatial-based businesses. In next section we will apply this framework for the ICT development of Oulu area. 4. THE DEVELOPMENT OF OULU IN THE CONTEXT OF SCM The supply chain (SC) endowment for high tech Oulu consist of several elements. Here we first list these elements following the structure of Table 1 and classify them into categories of operational, tactical or strategic supply chain level (Table 2). In Table 2 are listed the most important actions during the development of high tech Oulu area. Most of these actions have positive effects on the progress of high tech Oulu, but some of them, especially during the mature of ICT sector have also negative effects. In Figure 4 is depicted all 21