Figure 5. Institutional capacity.

How can the tool be used?

Everybody, persons, businesses etc. are influenced by external forces of change. In innovative businesses and innovative networks, there is also an opportunity to shape the forces of change in a way that enable them to influence the development locally.

Figure 5 illustrates the process of building institutional capacity. External forces of change imply that society is influenced by something external. For the Energy Region network, the decision about the power line Ørskog-Fardal – a prospect the business sector may see as a threat but also an opportunity. This is a big infrastructure project, and the contractors want large and reliable suppliers. If many national stakeholders enter the local market, local businesses may lose due to the competition. The powerline will also lead to many new hydro-power developments in order to reach the market. If local businesses are to compete over these as well, they have to organize in a new way; they will have to find different ways to collaborate. This was one of objectives when the Energy Region network was established. To get there, they have to use the institutional capacity in the network.

There are three important components for institutional capacity: knowledge, relations and the ability to mobilize:

  • Knowledge and knowledge resources – the broadness of knowledge that is found among those involved in the business or network, and which is continuously developed through courses, training, persons etc. or through introducing new ideas or exploring joint ideas.
  • Relational resources – refers to the network itself, and the expanded network, i.e. every participant knows each other. The relations between the actors in a network are developed through common meeting points, joint activities and joint projects. Here, the participants learn to know each other, and connect more closely. The ability to attract and engage new actors keeping them interested over a longer time is a key for the institutional capacity.
  • The ability to mobilize – access to knowledge and relational resources are prerequisites for developing a sustainable institutional capacity. These resources also need to be mobilized to reach their potential. It may be necessary in such processes to take advantage of emerging opportunities in order to mobilize, or to apply other techniques of mobilization and agents of change. To achieve development, it is important that both society and all actors fully use their ability to develop and use their institutional capital.

The content on this page is not optimised for smaller screen resolutions. Please visit this page with a resolution greater than 1080px in width.