Abstract
In a knowledge-based economy higher education institutions (HEIs) and specialized research units have an important role to play in bringing knowledge to the regions. The first and perhaps most important step for an HEI is to understand the needs of regional industry Only then can it work in close and effective collaboration with firms. In this paper Finland's Satakunta Polytechnic (SPT) is used as a case example to examine what practical actions an HEI can take to increase interaction with industry and achieve better knowledge circulation. The paper describes the models and tools developed at SPT towards these ends, including strategy-based regional development, the cluster approach to development, the partnering process, knowledge management and the ‘SNIFF’ process (‘Searching for New Innovations For Firms’). It is stressed that regional development strategies must take into account the wide-ranging impacts of global competition and economics and thus regional actions must be compatible with the demands of global competition and the knowledge economy.