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Urban planning is an ambiguous term having different definitions according to the prevailing context.

Urban planning is, in the Finnish planning tradition, the branch of architecture dealing with the design and organisation of urban spaces and activities, exploring a wide range of aspects of the built and social environments of urbanised communities. Urban planning aims at conciliating the conflicting demands of social equity, economic growth, environmental sensitivity, as well as aesthetic appeal.

According to the Land Use and Building Act (2000), the Finnish land use planning system has three levels with a clear division of labour between them:

the regional land use plan, the local master plan and the local detailed plan (Fig. 1). The land use planning system is hierarchical; higher level plans steer lower plans. In addition, the Government defines national land use guidelines, which should be taken into account throughout the country in all land use decisions and land use planning.

An essential feature in the Finnish local land use planning system is that it is a municipal monopoly ⁴. The municipal land use planning system first produces local master plans tasked with defining general land use patterns and shaping the urban structure. Local master plans allocate areas for land uses such as housing, services and recreation. Local detailed plans are the most important planning tool used to control building design and construction. The main characteristics of local neighbourhoods are determined in the local detailed plans. The plans include regulations on the use of areas and the volumes and

4 The only plans that still are submitted for ratification to the Ministry of the Environment are joint master plans (prepared cooperatively between several municipalities) and regional land use plans.

locations of buildings as well as on the types of construction allowed. Streets and park areas are also defined at this planning level.

Figure 1. Land use planning system in Finland (www.ymparisto.fi, 5.3.2009)

The Land Use and Building Act entitles citizens to participate in land use planning procedures and influence decisions related to building developments, both at regional and local levels. The extent and nature of public participation are defined according to the nature of each plan. Participation in planning procedures is open to all parties with an interest in the plans, including landowners, local residents, and other people whose livelihoods or other interests will be significantly affected. It is noteworthy that this provision also encompasses other public authorities, enterprises or organisations whose activities may be affected, even if they are located in other municipalities.

(www.ymparisto.fi, 5.3.2009)

According to Staffans (2004, 45, with ref. to Horelli & Kukkonen 2002), urban planning is a social, ethical and political practice applied by the municipality, in order to influence the future of its member citizens and the development of the community. In addition, Staffans emphasises the role of knowledge-building in urban planning, terming it a knowledge practice. She points out that urban

planning is not only a set of practices but also a set of processes related to these practices.

Urban planning can also be considered as a professional practice. For example, Puustinen (2006) has pointed out that planning professionals often consider themselves to be in charge of implementing 'the public interest' in land use planning. Many planners however share the view that they represent neutral experts seeking value-free technical solutions to planning problems.

Naess and Saglie (2000) have listed some definitions of the concept of planning reflecting different planning theories and ideologies:

- "Planning has been defined as a method or procedure to influence future allocations of activities to space or space to activities" (Williams 1996).

- "Planning is the process through which scientific and technical knowledge is connected to organized action" (Friedmann 1987).

- "Planning is the use of scientific procedure—albeit crude—in policy-making"

(Faludi 1973).

- "Planning is the process of preparing a set of decisions on future actions, directed towards the achievement of goals by preferred means" (Dror 1973).

- "Planning is the ability to control the future by current acts" (Wildavsky 1973).

- "Planning is an activity dealing with proposals about the future, with evaluation of alternative proposals and with methods to achieve these processes. Planning is rational, adapted thinking, used on the future and on areas where planners, or the administrative organs of which the planners are part, have a certain degree of control" (Simon 1957).

In addition to the above definitions, Naess and Saglie remind us that planning is usually considered as the connection between theory and action. In practice, spatial planning involves both substantial issues and a number of procedural questions, including the organisation of the planning process, the roles of planners in relation to decision-makers, the types of knowledge to be utilised and analyses to be performed, and the instruments for implementation of the plan.

Mäntysalo (2000) presents the following definition: "Planning is representing future activities and attempting to organize these activities by arranging their

representations. [...] Land-use planning consists of representing the future uses of land attempting to organize them by arranging their representations [...]"

In this thesis, urban planning covers all the phases of local land use planning, as mentioned in the Land Use and Building Act, including public participation in planning.

The definition of urban planning applied here is based on Staffans (2004), with an additional emphasis on the processual nature of this activity, in accordance with several definitions referred to above: Urban planning is a political, social, professional and architectural practice with related processes, aimed at influencing the future of the municipality and the living environment of its member citizens.

Further, this thesis defines urban development as an activity that includes stages both preceding urban planning and succeeding it. Thus, urban development starts from the visions and goals for a new area and includes the stages of urban planning, building design and construction, and also the maintenance and use of the new area.

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In the management literature, two different meanings of the term process can be distinguished. The research approach that studies change and the emergence of phenomena over time is called 'process research' (e.g. Langley 1999). But the literature also uses the concept 'process' when it studies the process-oriented management structures of today’s networked organisations, often called business or service processes. Here, the object of study is the process and its management (e.g. Davenport, 1993)

Change and the emergence of phenomena over time can be analysed through seven process research strategies, ranging form the quantification strategy with statistical analyses to a narrative strategy that describes and analyses qualitatively how things develop and change over time (Langley 1999). According to Pettigrew (1997), only the narrative approach explicitly and directly observes the process in action, and is thereby able to describe and account for how some organisational or social entity or issue develops and changes over time. Thus, Pettigrew elaborates the definition of a process: A process is a sequence of individual and collective events, actions, and activities unfolding over time in

context. Pettigrew also points out, that a process analysis is incomplete without linking context, processes and outcomes.

A common form of progression in the process models described in the strategy literature is, according to Van de Ven (2007), a linear sequence of stages or phases of development. For example, a decision making process is typically viewed as a sequence of separable stages ordered in time (e.g. need recognition, search, screen, choice activities) and with transition routines to make adjustments between stages.

Van de Ven points out, however, that many social processes reflect far more complex progressions than simple linear sequences. He has thus presented a vocabulary of developmental progressions that goes beyond simple unitary stages (Van de Ven 1992)⁵. When a developmental process unfolds over time following more than a single path, the progression of events may include convergent, parallel, and divergent streams of activities. A description of how multiple progressions of events diverge, proceed in parallel, or converge over time thus provides a useful vocabulary for making process statements about specific stages or the overall developmental pattern of a developing entity over time.

A (business) process as an object of research considers the structure and operations of an organisation. It involves elements of structure, focus, measurement, ownership, and customers (Davenport 1993, 5-6). It implies a strong emphasis on how work is done within an organisation, in contrast to a product focus where emphasis is on what is done. Davenport defines a process as "a structured, measured set of activities designed to produce a specific output for a particular customer or market". He underlines that a process is a structure for action, i.e. a specific ordering of work activities across time and place, with a beginning, an end, and clearly identified inputs and outputs.

This thesis studies the process of urban development. The structure and the outcome of the urban development process are in the focus of the research. It is, however, also essential to apply a process research approach to observe the urban development process in action and to be able to describe how it develops and changes over time.

5 This vocabulary provides the analytical terms needed to make clear distinctions between various process models. The typology includes unitary, multiple, cumulative, conjunctive, and recurrent progressions.

The definition of process, suitable for this thesis, is therefore based on a combination of the definitions by Pettigrew (1997) and Davenport (1993):

A process is a sequence of individual and collective events, actions, and activities unfolding over time in context, designed to produce a specific outcome.

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The simplest definition of innovation is "the introduction of something new".

The meaning of the term innovation has, however, been constantly refined, starting from Schumpeter (1911/1934) who first determined the distinction between invention and innovation: "An invention is a novel idea, a sketch or a model for something. Innovations are those inventions which have been commercialised on the market by entrepreneurs, while imitations are innovations which have been copied by others" (Saarinen 2005, 49-50, with ref. to Schumpeter 1911/1934). Cumming (1998) has described how it gradually became accepted that a new concept had to be brought into use before innovation could be said to have taken place.

Latterly, this definition has been complemented to include the concept of success. For example, in 1988 Urabe wrote: "Innovation consists of the generation of a new idea and its implementation into a new product, process, or service, leading to the dynamic growth of the national economy and the increase of employment as well as the creation of pure profit for the innovative business enterprise" (Urabe 1988, 3). This signifies that a new concept must be brought into successful commercial use before innovation has taken place.

Cumming assumes that this hardening of the understanding of the word innovation is a result of the increase in business competitiveness and the development of a customer focus. His conception of the most succinct definition that covers the broadest range of applications is: "Innovation is the first successful application of a product or process" (Cumming 1998, 22).

Researchers on innovation in organisations frequently distinguish between product and process innovations. When process innovations are at issue, the success of the innovation is not necessarily evaluated in commercial terms only but also in terms of e.g. duration or customer satisfaction (e.g. Davenport 1993, p.16). This broadening of the evaluation of success also applies with regard to urban planning.

Davenport (1993, 10-11) distinguishes process innovation from process improvement. According to his definition, process innovation means performing a work activity in a radically new way, whereas process improvement involves performing the same business process with slightly increased efficiency.

He admits, however, that the level of change from incremental to radical forms a continuum. Where a process innovation yields only incremental benefit, Davenport would classify it as an improvement. Another important difference between process innovation and process improvement is the starting point.

Process innovation initiatives start, according to Davenport, with a relatively clean slate, but process improvements start from existing processes.

A strict division between innovation and improvement has since been replaced by a renewed concept of innovation, including three degrees of novelty compared with the firms' previous products and activities: entirely new, significant improvement and minor improvement (see e.g. Palmberg et al.

2000, 20-21). Additionally, the degree of novelty from the viewpoint of the markets has been included in the evaluation: an innovation can either be new to the domestic market or new to global markets.

In this research, the definition of innovation is as follows: Innovation is the successful introduction of a new idea into the market in the form of a new product or new service, or an improvement in a process or an organisation, carried into practice.

In addition to the above definition, innovations in urban development should be evaluated by their societal quality (Kivisaari & Lovio 2000; Väyrynen et al.

2002; see also Fig. 7, in Section 4.3.4).

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The definition of the concept of service has seen significant evolution over the last four decades. Research first concentrated on portraying services as being different from physical products. Rathmell (1966) observed that most marketers have an idea of the meaning of the term goods, because these are tangible products, but services seem to be everything else. He identified a list of characteristics for services, including e.g. intangibility. Vargo & Lusch (2004) suggest that this approach of defining services residually has persisted, and services are still mostly seen as opposed to tangible goods.

Several attempts have been made to elaborate the definition. Grönroos (1988) defines four basic characteristics that can be identified for most services: (1) Services are more or less intangible, (2) Services are activities or a series of activities rather than things, (3) Services are at least to some extent produced and consumed simultaneously, and (4) The customer participates in the production process at least to some extent.

Edvardsson (1997) views a service as part of the wider concept of the product. A product may consist of goods, services, computer software, commonly in combination. The customer is most often involved as a co-producer in the production process, while a service is created in and during a process.

Grönroos (2000) develops his definition by stressing the process nature of services. He now defines services as "processes consisting of a series of activities where a number of different types of resources are used in direct interaction with a customer, so that a solution is found to a customer’s problem" (Grönroos 2000, 48).

Already in 1995, Gummesson had pointed out that consumers do not buy goods or services, but rather purchase offerings that render services, which create value. He thus used value instead of solutions to customer problems.

Edvardsson & Olsson (1996) argue that service is generated by a process, and the customer outcome is created in this process. This process is, however, different from those in which goods are manufactured. The manufacturing process takes place at one time and in one place, and the customer does not participate in the process. In the case of services, the customer does take part in the process as co-producer. The customer is present and affects the result in terms of added value and quality.

Related to earlier research, Edvardsson et al. (2005) argue, that there are currently two main approaches within service research: service as a category of market offerings and service as a perspective on value creation. They claim that the new focus in service research today is not on the differences between goods and services, but on differences in how we want to portray value creation with customers (and other stakeholders) where the customer’s perspective is emphasised. They conclude that looking at service as a perspective on value creation through the lens of the customer may add to future understanding of the service approach; co-creation of value with customers is key and the

interactive, processual, experiential, and relational nature form the basis for characterising service.

A different approach to defining the concept is suggested by Vargo and Lusch (2004, 326). They define services as "the application of specialized competences (skills and knowledge) through deeds, processes, and performances for the benefit of another entity or the entity itself".

Grönroos (2006, 6) states that, thus far, no common definition has emerged in the literature. He notes that earlier definitions are mostly based on what a service is, i.e., based on the service activity. With reference to Edvardsson et al.

(2005, 118), he suggests that another starting point for defining a service is to consider what a service should do for the customer, i.e. service as a marketing logic. A logical starting point for developing such a definition could be that a service should support customers in a value-generating way.

Grönroos (2006) elaborates on this and claims that suppliers and service providers do not create value in their planning, designing and production processes. The customers do it themselves in their value-generating processes, i.e., in their daily activities when products are needed by them to perform activities. Suppliers only create the resources or means required to make it possible for customers to create value for themselves. In this sense at least, when suppliers and customers interact, they are engaged in the co-creation of value.

Vargo and Lusch (2004, 331) share the same view: "Value is always co-produced with the customer; the enterprise can only make value propositions".

Due to the customers’ involvement in these interactive processes, firms and customers are co-producers of the service and co-creators of value; at some point the customer may be a sole creator of value as well (Grönroos 2006). Following this service logic, a service as an activity can be defined as a process where a set of resources interact with each other and with the customer aiming at supporting the customer’s processes in a value-generating way.

Grönroos (2006) emphasises that according to the Nordic School view, goods do not render services as such. A customer does not consume a drill as a service, but the process of using the drill together with, for example, information about the drill and knowledge about drilling in order to make a hole in the wall. This process is the service. The drill is not a transmitter of service (contrary to e.g.

Vargo & Lusch 2004), rather it is one resource needed to make a service process possible.

In this research, service is defined according to the Nordic School view and following the views of Grönroos (e.g. 2006): A service as an activity is a process where a set of resources interact with each other and with the customer aiming at supporting the customer’s processes in a value-generating way.