How to build innovation clusters in Europe, Part II
February 5, 2010 2 Comments
Science|Business is an independent news and events service being focused on R&D investment and policy in Europe. To encourage public dialogue about innovation policies in Europe, it created together with Microsoft Corp. in 2007 a panel of leaders in industry, academia and policy: The Science|Business Innovation Board. Over the 2008, it had been meeting to find the answers how Europe can create high-tech clusters capable of challenging those of the USA.
The conclusions of this event were:
- a review of leading clusters,
- a manifesto for action and
- a proposal: Special Innovation Zones for Europe or SIZEs.
After reporting the cluster review in Part I of this topic, click here for the details, I am going to discuss the manifesto and the SIZEs proposal and end with my own comments, as usual.
The manifesto for action:
1. BUILD ON EXISTING STRENGTHS. Clusters cannot be planted on bare soil, wherever a politician feels like it. They can only be nurtured in places that have already demonstrated knowledge, skills and growth.
2. FOCUS RESOURCES. Don’t scatter the money far and wide. Pick just a few of the most promising regions and sectors for support, and provide an environment – family-friendly, multidisciplinary, good salaries – that will attract the brightest minds.
3. BE OPEN. Encourage the best people, wherever in the world they may be, to work in Europe’s clusters. Promote open competition, among universities, companies and regions, for funding . Promote border-crossing – among people, ideas, scientific disciplines, and industries.
4. BENCHMARK, monitor and be transparent. Base funding and regulatory policy, not on the clash of political interests, but on empirical analysis of what’s working and on open competition.
5. ENCOURAGE risk-taking, cross-disciplinary work, bold innovation and experimentation.
Let me expand to see from where this manifesto comes and how it can be outlined.
The EU counts about 2,000 clusters. Currently, cluster policy operates on a national or regional level and at least 70 national cluster policies across the EU are claimed. Cambridge, Munich, Grenoble and Stockholm, to name a few, are vibrant areas for scientific discovery, technological innovation, and jobs. On the other hand, just the University of California–San Francisco in the Silicon Valley, has spawned publicly traded companies with a market value of $90 billion, which is three times the value of Europe’s entire bio-tech sector. Moreover, Silicon Valley has 350,000 jobs, Bangalore 170,000 jobs, Cambridge, being one of Europe’s top clusters has only 50,000. Europe, as a whole, needs to focus.
The most promising clusters should be picked up and the resources should therefore be focused on them. Of course, such centres should be selected through transparent, international, data-based competition. I should be conducted by a council, mostly formed by non-EU experts weighing applications reporting their performance. The performance itself should be based on both hard numbers, such as spin-outs, licenses, post-doctoral fellows and jobs created, and soft analysis about governance, infrastructure and quality of life. Similar models have already been applied to the disbursement of European academic research grants and 97% of applicants were rejected. Getting this expert approach to work in Europe’s sclerotic and politicised university sector, demonstrates it could work in regional policy also.
Here it comes the proposal. The EU should give them a new legal status: the Special Innovation Zones for Europe or SIZEs. They should be entitled to obtain:
– extra cash from the Structural Funds budget to invest in schools, infrastructure and cultural amenities that will stop and reverse the brain drain,
– dispensation from rules impeding free movement of people, such as immigration and labour policies,
– dispensation from rules hampering a direct link of academic people with industry,
– seed and venture funding, supported by the EU but managed by investment professionals,
– low cost office space and support services and
– low-tax status reserved for young, innovative companies.
When a cluster is established, future growth should not be taken for granted. The EU-level policy should equip clusters to look beyond their local boundaries enabling them to think and act globally. Studies report that the most successful clusters are entrepreneurship driven and companies are the main agents of change. They need business opportunities to grow and to make the cluster self-sustained. Of course, Universities are a key aspect. They need to promote the development of professors and researchers as entrepreneurs, by getting involved in the formation of companies based on their research but without literally losing their university posts. Incentive structures should be adapted in order for those academics to get recognition and advancement for working with industry and not just for publishing papers. Knowledge transfer should be encouraged at every level within a cluster: between universities, between universities and companies and finally between companies.
In conclusion, my own takeaways, i.e. what I personally got by reviewing this part of the topic:
- As it happens quite often, you do not need to re-invent the wheel: there are plenty of innovation clusters in Europe.
- Pick up the most promising ones and test the EU policy on them.
- In local networks where the same people meet up all the time, after the initial burst there is no additional knowledge coming in. Connections between clusters both at European and global level must then be encouraged and promoted.
- If you want to create wealth for the community, which is what Innovation is all about, support SMEs to move into the clusters.