In a globally interdependent environment strategic cooperation is a key policy in developing relative competitive advantage of CB- region. The principles of the European social model (work for all, social equality&safe environment) can be maintained by investing in the high level of education, applications of science&technology and establishing strategic networks. Yet the existing capacity of investments in education, R&D and networking is not sufficient for maintaining relative competitive advantage of the CB-region. Thus a new paradigm of innovation policy needs to be adopted. For a Central Baltic brand, innovative individuals and networks, more enterprises and a system theory approach is needed to develop competitive advantage. Previously, innovation policy has largely been seen as equal to science and technology. Recently innovation research has focused on innovation environments and systems, that is the aim and a core method of this project of school and company cooperation. The aim of this project is to develop an innovation environment, an innovation system of education institutes and companies that benefits from the innovation capacity of workers and learners. Innovation system enhances the applications of successful company activities and policies in education. The establishment of the innovation system includes 1. Developing new innovation paradigm focusing practical (vs. theoretical), proactive (reactive), demand-driven (supply oriented), open (closed) and multi-player partnership (clusters) approach, 2. A research, an analysis of the competitive assests and innovation systems of the partners, 3. Description of successful policies in applying innovations at work and learning, 4. Piloting results and learning materials, 5. Joint implementation plan of the innovation policy, a strategy of the innovation network of schools and companies of maintaining the CB innovation forum for continuing activities and business networks in global markets. Partners share similar challenges of the shortage of the highly-skilled labour and building up relative competitive advantage of optimising human potential. Partners build upon similar mentality&Central Baltic identity in pursue of enhanced economic vitality &Nordic living standards. The region is challenged by the development of knowledge-based economy/ubiquitous society, geographical position around the Baltic Sea, the use of minority languages&similar heritage in formal education& learning. Achievements: The INTO PRACTISE project established a Central Baltic Innovation Network of the education sector and companies to optimize the human potential at work and in learning. Furthermore, the project developed the learning environments in vocational education so that the innovation capacity of students and labour force can be better utilized. In addition to establishing the network, the project organised innovation seminars in Sweden, Finland, Estonia and Latvia. Innovative practices in companies were examined and, based on this research, the project partners produced different study materials as well as a good practice database.