In many European countries urban areas are magnets that attract people from villages, smaller towns and rural districts because cities offer more hope for jobs, education, cultural and leisure activities, health care and better living standards. At the same time rural areas and small towns located far from the large cities or other growth centers face: downsizing and ageing population; out-migration of young people; high unemployment because of loss of jobs in traditional sectors, lack of novel ideas for increasing in new jobs, businesses and industries; and limited access to education. In order to build their competitiveness, local authorities must look for different ways to open their inhabitants to innovations – as entrepreneurs, as consumers, and as citizens.The mission of the Innovation Circle (IC) project was to address this challenge by training people from different sectors within the municipality/region about how to work together to develop their communities into attractive place for living, working and visiting. The aim of IC was to stimulate innovations and long term development in rural districts and smaller and medium sized towns in the Baltic Sea Region.The project was organized into three main blocks of actions:1. The Innovation Academy (IA) - a training program to improve partners competence for working with innovations and stimulation of entrepreneurship in their regions. The Innovation Academy consisted of 5 workshops for adults and 2 youth summer camps;2. Local Actions:Step 1 – Each project partner formed a Community Generator Group which was responsible for the analysis of the local context and identification of problems, innovative solutions, and actions for their community development. The Community Generator Group consisted of representatives from public and private sector, non-governmental organizations, SMEs and young people.Step 2 – the Community Generator Group elaborated an Innovation Charter – a document which presents community development vision and possible innovation/development projects which could bring attractiveness, optimism and employment to the place. The document was presented to the local municipal council and further developed into a concrete action plan.Step 3 – Community Generator Groups in close cooperation with other project partners implemented innovative local projects (53 in total).Step 4 – The best projects were presented and awarded in the final Innovation Circle event EXPO 2007.3. Innovation Forum – experience exchange among project partners through annual conferences and circulation of information (newsletters, video materials, web-site, brochures, and research reports). Achievements: 350 people who participated in the Innovation Academy enhanced their skills and knowledge about effective governance, spatial development, sustainability, entrepreneurship and management of innovative projects. Workshops and summer camps of the Innovation Academy were a great meeting place for partners to exchange experience and know-how and an opportunity to establish relations for initiation of concrete activities for community development.In the frame of WP2 (Local Actions), all the project partners formed Community Generator Groups, consisting of professionals from different sectors and organisations, and youths. These groups were trained to become the agents of change in their communities. The concrete results accumulated within WP2, amongst others, are 53 local and transnational actions developed as a result of discussions, meetings and analysis of the local context, needs and challenges. These actions are all unique for their local context, aiming at and/or involving innovations, sustainability, entrepreneurship, culture, design, etc.More than 1000 people were directly involved in IC project events. The project involved about 300 youth in seven countries of the BSR. In general, the IC stimulated cooperation between different generations, different sectors and areas of activities and different levels of authority. The project managed to generate wide publicity in all partner regions. The project final event EXPO 2007 contributed a lot by promoting Innovation Circle project internationally. In total there have been more than 100 articles published in local, regional and national mass media; additionally, the publicity for IC project was ensured through the project website and partner websites, radio and TV reportages, various promotion materials and items and project display in different third-party conferences, seminars, workshops.In order to ensure project durability and maintenance of the results and outputs, the IC project aimed to establish a transnational network for the development of small and medium sized places and rural areas around the Baltic Sea. In September 2007, twelve of the IC partners established the Innovation Circle Network - an independent and not-for-profit organisation.