Examples of smart clusters

Presentation of Hans Wissema on 21st November 2013

www.wissema.com

Clusters

• “A geographically proximate group of interconnected companies, suppliers, service providers and associated institutions in a particular field, linked by externalities of various types” (Porter, 2003)

• “A group of companies, know-how institutions, financiers, service providers and governments, that collaborate in the development and employment of a common ‘driver’ in order to increase everybody’s prosperity”

• If the ‘driver’ is innovation, we speak of smart clusters

• The development of smart clusters is a prominent in EU policy item (New Industrial Policy)

Cluster drivers• Technology / innovation based (R&D, education)• Marketing / promotion based / common market research• Value chain-based (subcontracting, pooled production)• Quality (standards) based (French wine, Swiss watches,

DVD, Hollywood’s Oscars)• More?

PM• Usually clusters have a regional working area; the region

can be cross-border. They can also be non-regional• Often clusters use more than one ‘driver’ • Although large companies could participate in a cluster,

it is usually an SME affair

The centre can be:

• A technical university of the 3GU type• A cooperation, such as an auction hall / logistics

centre• An independent unit for quality control• There can be no centre at all

Key factors of success• An energetic champion (but he/she is not always

there)• Businesses are in the driving seat• Professional cluster management• Performance-based funding with a long term view• Clusters integrated into wider regional policy• Robust monitoring and evaluation mechanisms• Attention to the borders of the cluster• Good PR for public awareness• A strong ecosystem (see next)• Government support (see next)

The ‘ecosystem’• A cluster can only prosper if there is a common

denominator that binds the participants• In Cambridge they call it the ‘ecosystem’• It is comprised of:

• A common culture (Calvinism in Holland), common ethics (Philips / Siemens), common language.

• A common background (agriculture in Holland) • A strong regional pride (Flanders)• Awareness of the concept of ‘coopetition’

• The pride of the trade and the cluster exceeds competitive forces

Government support• Infrastructure• R&D funds• Bringing people together• Regulation• Support for starters• Venture capital

Ratios of collaboration

• Reducing cost and risk of research research foundations

• Innovation often requires collaboration between partners in the value chain (Apple)

• Every player has an interest in good education• Common marketing and export promotion• The larger the cluster, the more attractive to join

(IT Delft)

Why do clusters fail?

• Lack of engagement of companies (it’s a public policy game)

• Insufficient analysis leads to unrealistic expectations

• Insufficient ‘import’ of good ideas from successful clusters elsewhere

• Tendency to go for the same technologies as everybody

• Lack of attention to trans-regional aspects

Flower Auction Flora Holland

• Also known as Aalsmeer, one of the merger partners

• Sells 20 million flowers/day (at events: 30% more)• Turnover € 5 billion; profit € 15 million (estimates)• 80% is export; tunnel to Schiphol Airport• Building is about one million sq meters (=100

football fields); many climate zones• Flowers come from Europe, Colombia, Ecuador,

Ethiopia etc• Company is owned by flower growers (cooperation)• Origin: invention of ‘Dutch auction system’ (fast

and good prices)

Get the picture

Developments

• Quality control system enhances trade• It also allows distance trading (before, all flowers

had to be ‘in front of the clock’)• Increased trading ‘around the clock’, through

mediation. 35% of turnover stems from mediation• Growers become larger, sometimes 10 ha under

glass• Supermarkets order directy at large growers• Supermarkets and others buy bouquets, ready for

sale• Foreign members

Key success factors

• Good collaboration between the cooperation and the ‘company’

• Common (Calvinistic) culture• Open to changes (albeit after much discussion)• Excellent logistics• R&D at the University of Wageningen• Many R&D intensive seed developers (Novartis,

Bayer)• Growers have common marketing bureau, so

there is more collaboration

KU Leuven

• Established in 1425 and split into Flemish (KUL) respectively French speaking universities in 1968

• Developed IMEC, (Interuniversity MicroElectronics Centre) - Europe’s largest independent research centre in the field of microelectronic and nano-electronics with Intel, Samsung, Philips, ASML and ASMI, R&D budget € 230 million

• Developed university hospital Gasthuisberg (new hospital for € 1 billion)

• Total research funding of KUL, IMEC and Gasthuisberg is € 600 million per year

KU Leuven cont’nd• Science parks: Campus Biomedical Sciences,

Haasrode Research Park (5 buildings; 5 000 jobs), Arenberg, Termunk, Tienen, Remy site, Philips site as well as the campus Exact Sciences and the Heverlee Incubation and Innovation Centre

• At these sites, there are some 400 companies with 16 000 employment and turnover of € 8 billion

• A few dozen venture capital firms operate in Leuven; up to 2004 they had already invested € 500 million

• There is not so much support for technostarters; the university creates its own spinouts

Get the picture

Developments

• After building up IMEC, repeat with biotechnology• Ever increasing number of technoparks • Internationalisation of students and staff

Key success factors• A champion (professor Overstraeten)• An early commercial success: KUL sold the patents of TPA,

an agent preventing blood clotting, to an American pharmaceutical company; the revenues are several hundreds of million Euros

• Establishment, in 1972, of K.U. Leuven R&D, the know-how transfer cell (1 100 research contracts in 2008). Annually € 33 million license income, € 120 million contract research and some 5 to 10 spinoffs. Up to 2010, LRD has created close to 100 spinouts

• A very active regional government (Flanders)• Perfect location (near Eindhoven, Aachen)• Good discipline with researchers

KSFs by them• The basis is a critical mass of high quality research• Create an appropriate entrepreneurial climate in a university context• Create a legal framework with respect to the exploitation of academic

research• Create clear incentives and policies to encourage researchers to actively

seek knowledge transfer opportunities• Create a professional interface unit with an integrated approach on

research valuation with multidisciplinary teams and high value services. Develop the necessary instruments and networks for the further professionalisation of technology transfer support (this includes sophisticated management software)

• Create a seed capital and/or venture capital fund.• Foster spin-offs from university research• Make sure there is a clear ownership of IP• Create awareness among federal, regional and local stakeholders• Support networks and forums• Focus on focus and enthusiasm• Focus on quality of life

Automotive campus

• AutomotiveCampusNL provides a home for some 30 partners: • companies• education institutes, middle and higher

technical education • public and private research centers • test facilities in the field of automotive

technology and smart mobility• Companies are suppliers; NL does not produce

cars, only trucks• Clients are car manufacturers

Get the picture

Developments

• New developments in energy efficiency and safety

• Niches sell world-wide• Increasing international cooperation

Key success factors• There were existing scattered activities (building

blocks)• Strong support from the municipality and the

Regional Development Fund; ample use of subsidies (Tilburg is a poor area)

• Community building; sharing knowledge and skills• Essential role of technical education, notably

middle level• ‘Brabant’ culture

The assignment• Form groups of maximum 5 people• Choose a cluster or potential cluster• Analyse the regional context and the potential for

innovation• How can you ensure participation and

‘ownership’?• What would be your vision for the region?• Identify priorities• Define a coherent policy mix and action plan• Design monitoring and evaluation mechanisms