Quick Scan Public Policies to support

‘Hot Spots’ in Europe Synthesis Report

March 2005

Technopolis BV

Patries Boekholt

Shonie Mckibbin

Vincent Charlet

Alessandro Muscio

Alasdair Reid

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CONTENTS

1 Introduction 3

2 Key characteristics of top technology regions 4

2.1 Literature on top technology regions 4

3 Short summary of our case studies: typology of regions 9

3.1 Introduction 9

3.2 Short description of Top Technology Regions (Hotspots) 12

3.2.1 OULU 12

3.2.2 HELSINKI 12

3.2.3 GRENOBLE 12

3.2.4 MUNICH 13

3.2.5 ØRESUND 13

3.2.6 CAMBRIDGE 14

3.2.7 LEUVEN 14

3.3 The key characteristics underlying successful regions 14

3.4 The key characteristics supporting successful regions 15

3.5 EZ’s characteristics of top technology regions 17

4 The influence of policy on the success of TTRs 22

4.1 The influence of national policy in benchmark countries 22

4.1.1 Generic RTDI policies 22

4.1.2 Explicit support for TTRs by national governments 26

4.2 The influence of regional and local policy 28

4.2.1 Developing regional strategies and joint visions: the social capital 28

4.2.2 Developing linkages between actors: technology transfer and clustering 34

4.2.3 Creating an entrepreneurial climate 34

4.2.4 Regional marketing 34

4.3 The interplay between national and regional policies: coordination and synergy 34

4.3.1 Supporting regional network development 35

4.3.2 Local support of national policy 36

4.3.3 Cross border structures necessary for good integration of dual national policy 37

5 Lessons for policy 39

5.1 Can national or regional policy intervention create TTRs? 39

5.2 How to support TTRs 39

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1 Introduction

The Netherlands’s regional innovation policy is currently under discussion and

changing its direction. Historically regions in the Netherlands could only develop

innovation initiatives if they received European Structural Funds, or in the case of the

three northern Provinces, from a special development fund for this region provided by

the central government. The recent government Discussion Paper on regional policy

in the Netherlands1 called ‘Peaks in the Delta’ exemplifies a clear shift in the core

philosophy: in the new style regional policy, choices will be made for initiatives and

good project proposals in economic growth zones, i.e. those regional policy plans

with good perspectives for economic development. The Ministry of Economic Affairs

challenges all regions to come with promising innovation strategies. This is in line

with an important premise in the national innovation policy: increased focus and

critical mass instead of small-scale initiatives and fragmentation: ‘Focus and mass

are necessary to play an international leading role’. In this vision only well

functioning local and regional innovation networks of firms, research organisations

and governments will be able to develop attractive innovation activities. In order to

support policies for well functioning local and regional networks Technopolis has

been asked to make a quick scan of available material on how some European

countries support their regional hot spots or technology top regions. To do this we

have chosen a number of well known hot spots in Europe and described the

underlying factor for their strength with a particular focus on the local, regional and

national policy efforts that had and have an impact on the current strong position of

the region. The work is being undertaken on the basis of existing material and within

the time span of a month.

This report is the synthesis of a number of more specific country reports that describe

the hot spots that we have chosen as examples. The Country reports are found as

Volume B of this study.

The report is structured as follows. In the next section 2 we shortly discuss some of

the literature on technology top regions as far as this was available to us. Section 3

gives a short summary of the regional case studies described in more detail in the

Country reports. Section 4 discusses the role of policies in the emergence or further

development of the top technology regions. In the fifth section we give some policy

conclusions, however without explicit recommendations for the Dutch regional

policy, as this report’s objective is to provide food for thought rather than policy

advice.

1 Pieken in de Delta, Gebiedsgerichte Economische Perspectieven, Ministerie van Economische

Zaken, July 2004.

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2 Key characteristics of top technology regions

2.1 Literature on top technology regions

The literature on regional hot spots originally focussed on understanding the Silicon

Valley phenomenon. The origins of Silicon Valley, in the plentiful writings on the

region (eg Saxenian 1994, Rogers and Larsen 1984), are often traced back to 1937,

when a Stanford University professor, Frederick Terman, gave two of his graduate

students - William Hewlett and David Packard - a small loan to produce an audio-

oscillator which Hewlett had designed.

It was indeed the systematic and sustained efforts of Frederick Terman to establish

and cement links between the University and local businesses, which, together with

the stimulus of Government defence contracts, is regarded by most commentators as

central to the early development of the Valley. Saxenian (1994) identifies three key

institutional innovations in the 1950s which were stimulated by Terman and which

created an environment helpful to later rapid industrial growth:

• The establishment of the Stanford Research Institute, to assist local businesses and

to carry out practical research not traditionally associated with a university

• The initiation of the Stanford Honors Co-operative Program, whereby engineers in

industry enrolled in graduate courses at the University. By 1961, 32 companies

were participating, with 400 employees studying part-time

• The development of the Stanford Industrial Park, another vehicle for easing the

flow of people and ideas between the University and industry

Although Silicon Valley’s fame was at its highest in the 1980s and 1990s, the seeds of

this archetype of a region of excellence were sown decades before. This also shows

that trying to imitate Silicon Valley’s success in a very short time span is quite

unrealistic. The role of national government was not an explicit strategy to form a

regional cluster in IT and electronics, but emerged as an indirect effect of an

accumulation of R&D spending in the area through defence contracts.

The region maintained its dynamism over these decades.

As various analyst have demonstrated networking and staff mobility were and are

facilitated by the sheer density of firms in the area, which meant that engineers and

executives would meet easily, possibly by chance, in all kinds of informal settings.

People could also change job without necessarily moving house or becoming involved

in other kinds of social disruption. The physical proximity of large numbers of firms

has been a key feature enabling the culture of informal face-to-face contacts to

develop and thrive. In a situation of rapidly evolving technologies, instability, and

very limited internal R&D in small firms, such informal links are an effective means

for the diffusion and development of ideas.

‘The constant circulation of talent from one firm to another made it literally

impossible to maintain property rights over each innovation. The only way out of the

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problem was for each company to accelerate its own path of innovation, eventually

giving way to new spin-offs, in an endless process of extraordinary technological and

industrial self-stimulation’ (Castells and Hall, 1994, p. 18).

Saxenian (1994) has emphasised the co-existence of an entrepreneurial, highly

competitive, risk-taking culture with high levels of interaction and collaboration

between firms - ‘The paradox of Silicon Valley was that competition demanded

continuous innovation, which in turn required co-operation among firms’ (Saxenian,

1994, p. 46). She also stresses the acceptance of business failure, and the expectation

and likelihood that a failed entrepreneur will quickly reappear with another company.

We can describe regional hot-spots or Top Technology Regions (TTRs) in a broad

sense: a regional agglomeration that manages to create added value and

economic growth through a well networked ‘value chain’ ranging from

knowledge creation to commercialisation and diffusion, in one or more

technology based markets. This value chain contains the elements basic research,

applied research, development commercialisation and diffusion. A more practical way

is to define it as a concentration of research, technology and innovation activities in a

concentrated geographical area.

Some key characteristics of these hot spots are:

• The agglomerations are internationally acclaimed, if not world leaders

• The status of the TTR is based on high level R&D knowledge and technological

capabilities of its main actors

• The TTR has critical mass, i.e. the number of institutions, firms and people

working in a particular technological area is sufficient to create synergy effects and

economies of scale.

• The knowledge created and technologies developed, are commercialised by firms

in the region in products, processes and services, thus creating wealth and

employment for the highly qualified

The latter point is crucial if the policy objective for supporting TTRs is the creation of

economic wealth and high-qualified employment.

Some argue that ‘regional hot spots’ is a fashionable concept that will fade away

again. However, there are some undeniable factors that contribute to the emergence

of regionally clustered technology oriented hot spots:

• Internationalisation of science and technology; the literature suggests there is

evidence that international sourcing of R&D and the creation of international R&D

partnerships, particularly by large companies, are a growing phenomenon.2

Companies will focus their activities on areas which have an excellence and

critical mass in a certain competence field. The question is whether this will

2 See for instance Jungmittag, Meyer-Krahmer and Reger, Globalisierung von FuE und

Technologiemärkten - Trends, Motive, Konsequenzen, conference paper “Globalisierung von

FuE und Technologiemärkten, Konsequenzen für die nationale Innovationspolitik, Bonn 1-2

December 1997; Ruigrok W., van Tulder R., 1995, The Logic of International Restructuring,

Routledge, London.

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manifest itself in ‘local presence’ of these firms at those places where the

knowledge is present. If so regional hot spots will become a magnet for private

R&D investment

• Globalisation of world markets; The (re)-location of investments is becoming

less attached to home markets, and capital, people and information are becoming

more and more mobile. To attract these investments, or to keep national and local

investments embedded, highly industrialised countries rely on ‘advanced factor

conditions’

• The importance of clusters; i.e. horizontal and vertically linked networks of firms,

suppliers, research and technology institutes, where tacit knowledge exchange and

collaboration are of technology transfer. In these exchanges proximity matters

• A concentration of public R&D funding to achieve best value for money, given

the increased budgetary pressures in most industrialised countries

In a previous study for BMBF in 1998 Technopolis examined the success and failure

factors of a range of regional ‘centres of excellence’ or hot spots. The study looked at

Silicon Valley (USA), Boston 128 (USA), Cambridge (UK), California South-Bay:

Laser Technology (USA), Eindhoven: Mechatronics (The Netherlands), Gothenburg

(Sweden), Silicon Glen (Scotland), Hsinchu (Taiwan) and Kanagawa Science Park

(Japan) part of the Japanese Technopolis programme.

All cases and particularly the most successful ones showed that there is a long history

of building up competences before a TTR acquires critical mass and world class.

Strategic focusing through S&T policy only will not lead to instant success: it

requires a long-term strategy.

We distinguished three types of hot spots or Top Technological Regions (TTRs):

1. Hot spots where science and technology excellence in particular research areas

formed the basis for the successful exploitation of emerging technologies. In these

cases business start-ups and spin-offs were the initial economic basis for the

development of the TTR.

2. Those cases where the TTR grew on a basis of a tradition of co-operation

between industrial research with fundamental and applied academic research.

In these cases large established companies, with internal R&D capacities form the

heart of the hot spot. They will work together with local universities and other

knowledge suppliers, but even more so with other companies. We will call these

cases industry-led TTRs, where the growth dynamics in the region is largely

determined by established companies, rather than by new technology based firms.

3. TTR “planned” by policy: here the actors mainly large companies and research

organisations, have been artificially brought together in a concentrated

geographical space. The cases show dissimilar achievements in terms of fruitful

interactions.

The BMBF study came with five major conclusions:

1. In the successful TTRs, where new technologies created market success and

high-skilled employment, the combination of leading edge technological

knowledge, entrepreneurial spirit and in most cases human networks,

provided the basis for their take-off and growth.

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The most successful cases not only developed strengths in all elements of the ‘value

chain’, the elements of that ‘value chain’ were well connected through formal and

informal co-operations and linking mechanisms. In the early phases of Silicon

Valley, Boston 128, Hsinchu, California South Bay and Cambridge, where the

commercialisation side of the ‘value chain’ was not developed at the start, the

appropriate conditions for entrepreneurial activity, (culture, growing markets, venture

capital, little bureaucracy for business-start ups and investments, abundance of highly

qualified people) were decisive.

2. Research excellence alone is not a sufficient condition for a ‘centre of

excellence’ to grow into a TTR.

The most prominent research actors are good in strategic and applied science.

Furthermore a TTRs needs a critical mass of actors who can develop technological

knowledge into products for which there is a market demand. In the cases under

review these actors were either large companies with R&D capacities or a significant

number of new technology based firms located in the agglomeration. Thus any policy

to select potential TTRs should ensure that these actors are already present or that

conditions are favourable for their emergence.

3. TTRs have a long history.

With the exception of the Hsinchu Science Park, decades of investments in people,

research organisations, facilities and industrial know-how have been behind their

growth. Thus TTRs and particularly those based on leading edge research, cannot be

created overnight.

For a policy strategy this means two things. First it is important to identify those TTrs

that have had the opportunity to build up a certain critical mass of competences.

Secondly it means that supporting TTRs is a medium to long term policy strategy,

where immediate results in terms of economic growth cannot be expected.

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4. The role of public policy in a majority of the cases has been modest or

unintentional.

In some TTRs the indirect effect of concentration of R&D funding had an impact, but

only in the long term. The most important task of public policy is to provide

incentives and conditions for entrepreneurship, for the highly skilled technologists

and researchers, and facilities to improve linkages between the science and industrial

communities. The few cases of TTRs where public policy played a key role, policy

makers employed a ‘holistic’ approach, strategically using policy instruments for

industrial development, education, regional development, alongside science and

technology policy and sometimes even fiscal policy and financial regulation. This was

the case in for instance Silicon Glen which focused their foreign investment activities,

their cluster programmes and a number of science and technology initiatives on one

technology area where they had chosen to prioritise: electronics.

5. The role of science / knowledge institues in the TTRs differs depending

on the stage of the competence area’s life cycle and the technological and

industrial sectors involved

Emerging technologies, particularly in science intensive areas such as bio-technology

and bio-medicine, depend more on close links with (monodisciplinary) university

departments to acquire state of the art knowledge. In more mature technological areas

such as engineering, electronics, telecommunications, and increasingly information

technology, firms depend on combined technologies to solve complex problems.

Here multidisciplinary competences are more crucial than being at the frontier of

knowledge. As new TTRs mature, falling back on a wider array of knowledge areas

helps a sustainable development of the regional economy. Hence in the selection of

potential TTRs the focus on a very narrow area of scientific and technological

expertise risks a ‘fading out’ of the competence areas in question.

TTRs are usually strong in a limited number of clusters. Clusters can be seen as

concentrations of interconnected companies and research centres jointly creating

added value in a specific field. The essence of successful clusters is a variety of

actors in close proximity, reinforcing each other to perform better. The innovation

system approach has increased the interest in clusters as this concept, emphasises the

importance of interactions between the actors in the system. In the study for the

German Federal Ministry of Education and Science of success and failure factors we

also identified that technology based clusters move along a technology life-cycle and

have different requirements for support dependent on the phase they are going

through. For instance the recently emerging nano-technology networks have not yet

clearly formed regional concentrations as industrial partners are only recently

involved and the potential applications are widespread. Whereas for instance regions

with strong mechatronica clusters are usually embedded in areas that have a strong

historical tradition in automotive, engineering and machine tool industries.

Many of the conclusions of this study are still valid looking at the set of regions in

this quick scan.

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3 Short summary of our case studies: typology of regions

3.1 Introduction

The case studies chosen for the quick scan study are a combination of relatively

young, but established hotspots. These hot-spots show not only high levels of R&D as

indication of their innovativeness, but in addition have a certain dynamic that has

resulted in above average economic growth, and a reputation for world class high-

technology knowledge in a number of sectors (in most cases ICT and biotechnology).

The case studies provided the basis of the quick-scan and presented the opportunity to

extract lessons for future development of Dutch regional policies. As hotspots (top-

technology regions) are not independent of national systems the separate reports

(presented as a complementary document to this synthesis) provide a short

introduction to the national system in terms of the governance of regional innovation,

and the way in which the various National governments support development at the

regional level. The reports provide the history of the hotspots, key geographical data,

main features, regional economic performance, and dynamism. The main actors

present in the regional innovation environment are examined within this context,

including specific polices that have impacted on regional success. Main policy actions

are reviewed in terms of their degree of impact (paralleled with the 14 top technology

region characteristics provided by the Ministry of Economic Affairs), the policy

contributions summarised, and finally main lessons were extracted.

The inventory of the case studies is for the largest part based on existing literature and

documentation, and supported by experiences in the various countries and regions.

The case studies include Oulu and Helsinki (Finland), Grenoble (France), Munich

(Germany), Øresund (Border region - Denmark and Sweden), Cambridge (United

Kingdom), and Lueven (Flemish Belgium).

In order to set the scene for the discussion on the various hotspots, and characteristics

underlying and supporting TTRs, the main characteristics of the national – regional

governance systems of our case study countries are highlighted in Exhibit 1 below.

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Exhibit 1 Governance of regional development

Country National Policy Structures / Policy

Denmark In Denmark the Ministry of STI has the co-ordinating role in matters related to innovation policy, although the minister delegated part of the

authority to the Council for Technology & Innovation. The Nordic countries as a whole have been characterised until recent times by relatively

weak regional level governments. This has been changing in the last decade & particularly the last few years. 2004 has seen significant debate

& then a legislative decision on the creation of new regions by 2007. In this structural reform the number of local authorities will be reduced & 5

regions will replace the countries. A cornerstone of the governments new ‘regional’ growth strategy is to enhance competitiveness &

employment, stressing that regional development is a mutual responsibility between local actors & government. As a forum for targeting,

prioritising & coordinating initiatives, a number regional business co-operations have been established, the so-called Trade and Industry

Partnerships, between local, regional & national actors. Recently (September 2004) the Government launched an action plan aiming at

strengthening the regional high-tech development. The plan involves two new initiatives, namely Centres of Expertise & Regional knowledge

pilots. The Centres of Expertise will focus on regional competencies & act as intermediaries between regional research & SMEs

Sweden The Swedish institutional system is characterised by relatively small ministries, implying that functions assumed by ministries in other countries

to some extent fall under the responsibility of government agencies in Sweden. All ministries support research activities in their own sectoral

interest with their own budgets according to the so-called sectoral research principle. The Ministry of Education & Science and the Ministry of

Industry, Employment & Communication mainly handle issues affecting innovation. The Swedish Government initiated a process for regional

growth agreements in 1997, intended to become the principal instrument for co-ordinating & adjusting policies of the various sectors, & for

exploring new approaches to the promotion of regional & local industrial development. The first agreements were launched in March 2000.

Finland National STI policy is formulated by the S&T Council (which includes statements of regional policy in its yearly reviews). Ministry of trade &

industry has responsibility for industrial & technology policy, and for the National Technology Agency (TEKES) and the Technical Research

Centre (VTT). Practical definition & implementation of STI policy is in the hands of the funding agencies – TEKES, Academy of Finland, and

the national fund for R&D. TEKES has a regionally comprehensive domestic organisation for business support – its R&D funding is however

open to national competition. The Regional Development Act (1994) guides regional policy, and has delegated more power to the regions.

Moreover, a programme based regional policy was introduced in order to co-ordinate the actions of diverse regional organisations and players.

France French RTDI system is strongly centralised & managed according to nationally established rules & principles, although there is a growing trend

towards delegation of resources & authority from national to regional structures. However the bulk of RTD public spending, as well as the major

part of RTD policy still depend on national administration. The “power” of regional authorities within the RTD system is still marginal, at least

in financial terms - the existence of a contractual scheme between national & regional administrations, which enables regions to have influence

in the way the national budget is spent, are important in giving the regions some influence.

Regional RTD policy, as well as all regional policies, are run by the Regional Councils. A first dimension of regional RTD policy concerns the

management, & the partial funding of universities, which host most of fundamental research labs, as well as a growing part of applied research

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labs. Regions are encouraged to gather local critical mass & foster synergies between regional RTD actors. Regions are also active in the

management of public/private interfaces – nationally designed co-ordination mechanisms managed at regional level.

Germany In Germany the Federal government has large technology programmes to support R&D. The Lander (State) governments have large budgets &

run innovation programmes. Lander also set initiatives in the field of innovation & technology policy. Federal / State commissions provide

platforms for exchanging information & experience among policy actors. In the field of science both national & Lander governments are advised

by a Science Council – which draws up recommendations on higher education, science & research (in regards to thematic priorities &

institutional structures).

United

Kingdom

Until 2000 UK economic development policy substantially followed a top-down approach. UK government department centrally develop

policies, which are implemented at the regional level via regional offices. Successful experience of regionalisation programmes in Scotland &

Wales has influenced changes in Englands approach, the Government is now committed to revitalising English regions, its mission is to let

regions play their part in the knowledge-based economic revolution. The key department responsible for economic development policy and RTD

policy is the Department for Trade & Industry, is has a strong interest in regional economic policy, & since 2001, has the specific responsibility

for Regional Development Agencies (RDAs) in England. Most significant regional initiatives in recent years are Development of the RDAs,

Regional Innovation fund, and Regional Futures. Government Offices were established in the regions in 1994 to be key agents of government in

the regions.

Flanders The Flemish Innovation System has emerged from the decentralised Belgian Science and Innovation System. In the last decade policy responsibilities for S&T

have shifted from the federal level to the regional level of Flanders with the exception of some aspects of science policy. Flanders can thus be seen as a

national and a regional actor. The Flemish Provinces only play a minor role in innovation policy as they have limited funds for this area.

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3.2 Short description of Top Technology Regions (Hotspots)

3.2.1 OULU

Oulu is the largest northern city in Finland and Scandinavia, some 600km from

Helsinki, and functions as the capital city of the North. The region is well known for

its technology, hi-tech growth starting when the National government made the

strategic decision to establish the electronics department of the national research

institute (VTT) in 1974. Since then Oulu has become one of Northern Europe’s most

significant hi-tech regions, boosting a fast growing technology economy, with 15,000

hi-tech jobs, found within 800 companies, which earn some 3.7 billion total turnover.3

About 23% of Finland’s high technology is concentrated in the Oulu region.

The growth of Oulu as a hotspot has mainly been based on the export of electronics

and information technology, in particular the presence of Nokia (and its strong

research department) has been a major influence. Success is based on the

simultaneous realisation of a large group of factors - the strong investment of

businesses, research, training, and public organisations has been central. Co-operation

between the science park, Oulu University and other research institutes, the City,

regional councils, and companies has always been the basic reason for the success of

the Oulu region. Next to this the deliberate long–term national R&D policy helped

Oulu create the knowledge infrastructures and networks that have supported these

high growth technology sectors, in particular the establishment of the VTT research

institute, and support of these sectors through the various national R&D programmes,

such as Centres of Excellence, and Technology programmes.

3.2.2 HELSINKI

Helsinki is the capital of Finland, and the only real urban region in Finland. While the

geographic coverage of the city is less than 1% of the country, a quarter of the

population lives there, and 30% of Finland’s GDP is earned there. As a hotspot

Helsinki is known for its consistent and successful technology policy, and a

spectacular restructuring from traditional industry to high-tech. In the beginning of the

90’s Finland faced an economic crisis, which was an impetus for policy makers to

develop a double-sided strategy. On the one hand an investment in education,

research and technology, and on the other international marketing of Finland, in

particular the Helsinki region. A dominant factor in the economic dynamic of the city

is the presence of Nokia, and the fast growth in the ICT cluster built around it, early

market liberalisation, a rich tradition in high technology engineering and a favourable

"network-friendly" culture have been cited as features behind the emergence of the

impressive ICT cluster in the region.

3.2.3 GRENOBLE

The City of Grenoble in the French Alps (South West of France) is the capital of the

Isère department, at the heart of the Rhône-Alpes region. Grenoble is an important

centre for the production of hydro-electricity, which from an historical perspective,

played a seminal role in the setting up of fruitful cooperation between public science

and industry. The Grenoble region today appears as one of the first, internationally

3 Source: Invest in Oulu – 2002-Statistics Finland

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competitive, innovative clusters in France, and indeed has a long history of

relationships between science, technology and industry. In the second half of the

century Grenoble saw public research organisations established in and around the city.

Indeed the success of Grenoble “hot spot” in micro and nanoelectronics goes back as

far as 1960, when decisions of decentralisation taken by the head of state led to the

setting up of a new research lab (the LETI) were made, and closely followed by the

establishment of a state-owned company corporate research facility (CNET).

3.2.4 MUNICH

Munich is the capital of Germany’s southern state of Bavaria. It has a short history as

an industrial city, but the (re) location of headquarters of businesses and important

institutions to Munich after the Second World War had a strong and lasting effect on

its economy. Munich’s position as a hotspot is based on its strong economic basis,

continuously changing economic structure in favour of new growth sectors, modern

public infrastructure, high level of business oriented services, broad range of SMEs,

scientific excellence, and favourable geographical location. Today, the region is

known for its clusters of information and communication technology, automotive, life

sciences, and media. In terms of economic structure the city has some of the

Germany’s best-known multinational companies such as Siemens, BMW, Audi,

Daimler Benz Aerospace, and a number of global players in micro-electronics such as

Apple, Compaq, and Microsoft. Another feature is the large number of research

institutes and technology transfer agents and initiatives attached to them. Munich’s

success is mirrored in a strong set of actors that are able to support economic growth

in both existing and new growth areas. Its success as a venture capital hub in

Germany has been crucial in support of this growth, reflected in high levels of

business start-ups.

3.2.5 ØRESUND

The Øresund Region is composed of eastern Denmark and southern Sweden and

linked by the Øresund Bridge, and is one of Europe's strongest economic centres. One

fifth of the total Danish and Swedish GNP is produced in the region, eighth on the

European GNP scale. The region is increasingly seen as a power hub for the

economic growth of Scandinavia and the Baltic States - a combined area with a

population of over 50 million. The Øresund Bridge (opened in July 2000) and the

ensuing expansion of the road and rail network both on the Swedish and Danish sides

have created one of Europe's most interesting regions for industrial growth. In total

some EUR15 billion has been invested in infrastructure - both the road/rail network

and mobile communications network.

In terms of innovation potential and future potential, the Øresund region has a long

tradition of basic research. In a global perspective, the region lies at the forefront in

areas such as medicine and biotechnology, IT, environmental engineering and food

technology. The region boasts the highest concentration of IT expertise in

Scandinavia. Some 90,000 people work with system development and training.

Several international telecommunication companies have chosen to locate to the

research intensive areas around Copenhagen and Roskilde in Denmark as well as

around Malmø and Lund in Sweden, these include, among others, Sony Ericsson,

Nokia, and Motorola.

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3.2.6 CAMBRIDGE

Cambridge is probably the most evident hot spot in the UK in terms regional

innovation dynamics, it is situated in the East of England and is home to the renowned

University of Cambridge. There has been a long tradition of high-tech industry in the

Cambridge area, but the area ‘took off’ as a centre of competence in the late 1960s

and early 1970s, with the creation and growth of new small firms based on evolving

technologies, resulting in an explosive growth of new high-tech firms - and the

beginning of the so-called Cambridge technopole.

Since 1960 Cambridge has emerged as the epicentre of the most exciting cluster of

technology and innovation-based companies in Europe and a model ‘Cluster’ that

other regions strive to emulate. In the process, the Cambridge Cluster has driven the

region’s economic growth at twice the national average. The cluster is dominated by

the overwhelming dominance (in terms of research and innovation generation) of the

University of Cambridge, which has taken the lead in supporting the regional

development process. The excellence in research and innovation has led to the start-

up of hundreds of indigenous high tech companies.

The Cambridge biotech cluster is perhaps the most important in the UK. Cambridge

has world renowned research universities; a leading research hospital and a number of

important research institutes, The well established entrepreneurial culture in biotech,

with university spin outs dates from the 1980s, while academic spin-outs are a

particularly important source of new companies in the sector.

3.2.7 LEUVEN

The hot-spot Leuven is a relatively newcomer in Europe and is mainly clustered

around its well know knowledge institutes: the K.U. Leuven and the Institute for

micro- and nano-electronics IMEC which both belong to the European top research

institutes. Over the last decade dedicated efforts have been made to encourage high-

technology companies and start-ups in the vicinity of Leuven. In addition the presence

of the top class research institutes has attracted R&D investments and re-locations of

foreign companies. Technological strengths are mainly in life sciences, ICT (micro-

electronics) and telecoms.

In Leuven local actors mainly attached to the university and IMEC but also the City

Council have been the main actors that have driven this development forwards,

supported by an active RTD policy of the Flemish government funding the knowledge

institutes.

3.3 The key characteristics underlying successful regions

The case studies of our quick scan are recognised as hotspots in Europe in various

technology areas. They have in common a number of varying structural

characteristics, which formed the basis of their success:

• A history of international leading edge academic and applied research institutions

(particularly Cambridge, Leuven, München and Grenoble)

15

• The presence of strong industrial partners with leading R&D activities

(particularly München, Oulu, Helsinki, Grenoble)

• Good infrastructure – including transport nodes, roads, ICT

• A considerable population concentrated in urban areas

Nevertheless, the cases of Oulu and to a certain degree Grenoble show that even

regions that are geographically peripheral in their countries can bloom if local

circumstances are right.

The case studies show a certain mix of strengths are needed in a region as a

springboard to achieving high levels of economic development

The case studies have shown that this can mean:

• A strong industry – particularly concentrated in certain growth areas - such as

the case of Nokia in Oulu and Helsinki, Auto industry big names in Munich

• A strong set of research institutes (and a critical mass per technology area) that

are outward looking and focused on regional development needs – in most

case studies these structure have been established over a long time period, and

have been strengthened by National level technology programmes and/or

university funding, . We see however in the Oulu case an example where a

conscious decision by the government proved to be instrumental in ensuring

the region had a strong research institute – and that due to its technical focus

quickly became embedded into the regional landscape.

• Education institutes – for both supporting research and for ensuring a supply

of high level human resources – these must be integrated into the regional

landscape and mirror the needs of both current and future growth sectors/areas

• Strong entrepreneurial climate

The more recent TTRs, which have only been in the picture for approximately two

decades, (Leuven, Øresund, Oulu) showed that good timing, and developing a

visionary strategy at an early phase of the technology cycle helped them to grow

reasonably rapidly in comparison with the TTRs built on a long history (e.g.

Cambridge, München).

3.4 The key characteristics supporting successful regions

In addition to the structural factors that have developed over time the successful

regions also have dynamic factors that have been favourable in translating strong

structural elements into a set of working clusters.

First of all the existence of regional and local actors who have taken a lead in

bringing actors together, developing a consensus about the common future of the

region and implementing actions to enhance this. These ‘regional champions’ can be

different types of actors. In Cambridge the university and particularly the part of the

university dealing with commercialisation, St John’s Innovation Centre, was a driving

force to create facilities for new high-tech businesses and to attract investors from

abroad. In Leuven the interplay between various mainly local actors, the KU Leuven,

IMEC, the City Mayor, supported by the RTDI investment of the Flemish government

were instrumental in developing the hotspot. In the case of the border region –

16

Øresund, we see that cross border structures – under jurisdiction from, in this case,

both Denmark and Sweden, have been important in organisation of the regional

actors, and in developing a true integration of a regional approach for both

development of research and industrial clusters (Science Region) and for regional

marketing (Øresund Network). This ‘two-way’ approach is seen to be crucial in

overcoming regional differences.

Secondly a set of pre-requisites for the development of new business has been a

major cornerstone of the high level of growth experienced in the case study regions –

the translation (valorisation) of knowledge from universities and research institutes

via spin-offs in the regional environment has been responsible for the spiralling

growth and excellent economic position of the regions. These translation mechanisms

include:

• Venture Capital possibilities – such as in Munich – where the existence of VC

companies has positively influenced the intensity with which new companies

have established themselves. Cambridge also benefited from capital support.

Barclays (bank) plc recognised that the 20 or so high-tech companies in the

region in 1978 could form the heart of a mini-cluster, they provided assistance

to start-ups – including business advice and assistance in raising capital - by

1985 the number of companies had increased to 360.

• Technology transfer institutions – or a history of tech transfer to stimulate

research spin-offs. These have been an important factor in all of the case

studies, and for the majority are strongly supported by the (sector focussed)

science parks – where universities, research institutes and laboratories,

incubators, and companies have forged strong linkages. Examples include the

ASTEC science park in Grenoble, specifically aimed at start-ups, which as

eventually attracted a resources centre (MINTEC), which gathers both

education and research institutes, and has about 3000 members.

• Strong start-up climate (including incubators) and business support services to

ensure that (Small and medium) business locate / develop and remain in the

region. Again this has been an important factor for all case study regions. The

existence of science parks and associated business support centres, have

provided a good base for starters. We see a strong incubator and transfer

culture in the Munich region, particularly within the Biotechnology sector and

its innovation and incubator centre for biotechnology (IZB) and the BioM AG,

which co-ordinates biotech activities in the region. Again in Cambridge we see

a strong Innovation Centre for starters, again a key player in co-ordinating a

number of initiatives in the region.

Public policy played a role in nearly all the case studies with the exception of

Cambridge, although the impact on the way in which universities are funded has had

positive influences on the strength and possibilities enjoyed by Cambridge University

in terms of amount of funding, providing them the opportunities to invest in the

development of the region. This is discussed in more detail in section 4 below.

The ‘public-sector made’ example of the cross border Øresund region had a mix of

characteristics underpinning its position. A number of structural factors can clearly

influence the potential for improved competitiveness through synergies in a unified

cross-border RIS. These include:

17

- Human resources (access to a wider pool of skilled labour particularly

scientists and engineers) including a strengthened capacity of the knowledge

base (universities, research institutes, etc.) through an improved division of

labour the development of co-operation across the Straits;

- Exploiting complementarities in the production structure (sectors, size of

firms, entrepreneurial drive, etc.) and increased integration of production

systems,

- Access to the capacity and expertise of innovation intermediaries (including

financial intermediaries) and their potential to become cross-border actors.

Other policy initiatives such as supporting city marketing have played a role in

establishing the international reputation of the regions. This was usually done in a

later stage of development when the region was already strong. What the impact of

this marketing is on the attraction power of the region is difficult to assess. It is more

likely that external investors have come to the region through existing networks with

specific actors present in that region (universities, firms) than through the marketing

by brochures and websites.

There are no clear examples in our cases where policy had a negative impact on the

TTR, however studies have discussed the limiting role that local government played

in being restrictive with planning permissions for new science and industrial parks in

Cambridge. In ‘greenfield’ areas such as Cambridge and Leuven, there is a clear

tension between economic expansion and maintaining the quality of life (due to the

environmental pressures), which was one of the attractive factors of the region in the

first place.

3.5 EZ’s characteristics of top technology regions

In an internal memo from EZ, fourteen points were put forward to characterise a top

technology region. On the basis of the quick scan we will discuss these point one by

one. This discussion is presented in the following Exhibit 2.

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Exhibit 2 14 characteristics of ‘regions of excellence’ or hot spots

Findings from case studies1. Focus on core

(technological)

competences

Indeed most of the cases have a focus on one or more particular fields of technology. Munich profiles itself most clearly with biotech

but has other historical strengths as well (automotive, media). Grenoble’s profile was originally less pronounced but is moving

towards nano- and micro-electronics. The Øresund region has the least clear profile as it has strategies in four areas, Although medical

technology / biotech is best known.

2. Above average #

knowledge

generating

companies

It seems not the amount of companies only, but also the presence of international leading companies is important. The Oulu region

originally had only Nokia but this gradually attracted a network of suppliers to emerge. In all regions either indigenous international

players or those attracted at a later stage acted as key actors.

3. Excellent public

research

infrastructure

Knowledge institutes – both academic and applied research laboratories - have been a key instigator of new economic activity in all

cases. It showed that a pro-active role in commercialising research is a vital element. Policy decisions in this area – done by national

government - are very path dependent and are often taken many years ago. The cases of Grenoble, Oulu and Leuven show that the

good timing of these decisions (in an early stage of the technology life-cycle) and persistence in funding is necessary.

4. Structural

collaboration &

networking within

industry & between

industry & academia

Intermediary organisations such as St. John Innovation Centre in Cambridge, the intermediaries in the Øresund and Leuven regions,

and applied research centres such as IMEC and VTT have played an active role as broker between research and industry (existing and

start-ups). In the Oulu example we see that the existence of the VTT electronics institute has provided employment opportunities for

university graduates, and influenced the development of the department at the university in terms of curriculum and research activity.

In turn this close collaboration has provided a base on which Nokia made the decision to brings its research department to the region,

in time also building strong relationships within the regional research environment in the IT sector.

5. Coverage of value

/innovation chain

This characteristic is less pronounced in the case studies. As some of the hot spots have excelled in emerging technology fields -

which are highly international, access to international value chains seemed more important than having the value chain complete

within the region. In terms of policy to support high-tech supply chains there has been no evidence in the quick scan to suggest that

this has been important to policy makers. Although in the Finnish case the use of local (external) suppliers has meant a high level of

embedding of Nokia in the local environment, and the growth of a set of high-tech suppliers in the Finnish regions.

6. Above average #

& quality high-tech

starters

All regions show dynamism in new high-tech start-ups and have created various facilities to support this. In most cases these facilities

are provided within centres (Science Parks / Incubators) that are a sectoral agglomeration of industry, research institutes, universities,

technology transfer offices etc. Starters therefore strengthen the research rich, high growth sectors – a self perpetuating growth of

sorts.

7. Easy access of

SMEs to innovative

The role of SMEs – apart from high technology start-ups - has been less pronounced in the case studies.

19

knowledge

8. Own identity and

image

Each of the regions has started activities to market their strengths profiling themselves by their technology specialisation. In those

regions where public actors had a major role this happened in a more systematic manner. The Munich example is a unique one in that

it has both regional and sectoral initiatives. The State Government (Regional) approach has seen the development of Bayern

International under the auspices of the Future of Bavaria Programme - playing a key role in foreign trade promotion. At the sectoral

(Biotechnology) level the BioM AG not only co-ordinates the sector, but is involved in profiling Munich biotechnology

internationally. On the other hand this is also happening at the local level – in Oulu the City Council had already implemented its

‘Oulu – City of Technology’ campaign in the early 1980’s – which in the course of time has taken on a more regional focus –

involving a wider set of local and regional actors.

9. Level of self-

organisation of

regional actors

Regional actors such as universities, intermediaries and in some cases firms (Nokia, ST-Micro-electronics) played a key role as the

first instigators of creating a pool of excellence. Regional and local governments often stepped in later to provide the glue in the

system and support the profiling and marketing. Without the self-organisation of regional actors top-down initiatives from national

policy seem to have no sustainable effect. In fact most of the local initiatives supporting the hotspots involve the collaboration of

various players within the system.

10. Sufficient supply

of knowledge

workers

In all regions this was an important prerequisite. Universities and other HEIs were a major source of creating specialised skills for the

technology areas. Particularly important for the geographically remote regions of Oulu and Grenoble, which do not enjoy the

characteristics of urban cities, which act as inward mobility pull factors.

11. Good physical

access to and from

national &

international

locations

For two regions Ouu and Grenoble this seems to have had less importance, but for the others this certainly was the case. Although for

Oulu numerous daily connections to European Capitals (especially with Helsinki) have been important in making the region more

accessible as a business location for large companies – especially Nokia. In the case of Øresund the bridge between the cross-border

regions was the incentive for cross-border co-operation to be developed on a large scale.

12. Sufficient

industrial estates for

knowledge intensive

firms

In all cases dedicated science parks and incubators have had an important role to play. These have been important not only as physical

locations where high-technology infrastructure is present, but as a node of activity in which interaction takes place between industry,

research, and education. In addition these conglomerations (most Science Parks are indeed developed around a certain sector – think

of Medicon Vallery in Øresund) are important in supporting spin-offs and start-ups – where they can benefit from the established

networks, and infrastructure – most incubator, technology transfer, and start-up support is also physicall located within these parks,

e.g. The St. Johns Innovation Centre in Cambridge. Cambridge is a good example where the lack of industrial estates formed a barrier

to economic growth – when City Planning advocated the limitation of industrial expansion in the area, the plan, endorsed by national

government, acted as a disincentive to expansion in the 50s and 60s.

13. High quality of

life

In all cases the hot spots are urban areas in relatively pleasant and green surroundings. Those hot spots reliant on attracting people

from outside the region emphasise this element more prominently. In a number of cases the marketing efforts of the regions (and for

20

some city urbanisation plans) focus on the positive impact of good transport systems, cultural activities, housing supply, and

recreational pursuits on the region as a place to work and live. Examples of such plans are that of the Uusima Regional Councils Long

term strategy for the Helsinki Region, and the City of Munich’s - Munich Perspective.

14. Coordination of

public & private

investments

The coordination local-regional-national RTD investment seemed to have a boosting effect on the region’s activities and profiling.

Good examples are to be found in Germany and Flanders. In the case of Finland the matching of public and private funding in large

technology programmes have reinforced regional strongholds. In Grenoble the co-funding of large-scale research infrastructures is

another example of coordination of public and private investments.

21

As seen from the above table the characteristics chosen were all important, with a less

clear input from having the complete value chain present in the region and access to

knowledge for –traditional - SMEs. However this last point could be because the

choice of typical hot spot in our study are those that have an excellence in emerging

technologies in a relatively early phase of the life cycle. If the study would include

regions that are excellent in more mature sectors and technologies (e.g automotive,

mechatronics, machine building) this aspect would have been more prominent as a

success factor.

The importance of ‘quality of life’ is more difficult to determine from this quick scan

as this has not been systematically described in the existing literature.

Was anything missing from the list? The EZ list is quite complete and contains the

key elements for regional hot spots. However more emphasis could be given to access

to international value chains and state of the art knowledge through key private sector

players with an active role in the regions.

In our view the most essential elements of regional hot-spots would be:

• Above average # of knowledge generating companies

• Excellent public research infrastructure

• Structural collaboration & networking within industry and between industry and

academia

• Self organisation of regional actors

• Above average & quality of high-tech starters

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4 The influence of policy on the success of TTRs

4.1 The influence of national policy in benchmark countries

4.1.1 Generic RTDI policies

In France, Finland and the UK generic research and technology policy has had a

strong effect on strengthening the already existing regional R&D strongholds. For

France this was a deliberate strategy, for the two latter countries this happened by

‘default’ as key RTD actors were regionally clustered. The UK example highlights

how the national approach to research funding of the university system can have

positive effects on the way (and with whom) Universities undertake research.

Secondary impacts are also evident regarding the embeddedness of universities in the

regions, and support of the local environment. (See info box below for description of

the changes made in the UK system in the 1980’s.)

IMPACT OF UK (UNIVERSITY) RESEARCH FUNDING ON CAMBRIDGE

The UK has a strong market oriented university system, and consequently a clearer propensity

towards utilitarian, applied type research. During the last two decades the university funding

system in the UK has been subject to some dramatic changes, the result of government

policies that began in 1980, resulting in restructured budgets during the 1980’s, which put

new pressures (and incentives) on these institutions. A major instrument of reform was a

reduction in block grants to Higher Education Institutions (HEIs), which were offset (less-

then-proportionately) by increases in funds from other government sources. The actions were

undertaken to stimulate a process of financial restructuring aimed at reducing costs and

providing incentives (through mechanisms such as the Research Assessment Exercise and

Technology Foresight) for improving the direction of HEIs research efforts.

Further, the UK government has, through a number of interventions, been pushing research

productivity and links with industry. The Education Reform Act of 1988 created two new

funding agencies, the Universities Funding Council and the Polytechnics and Colleges

Funding Council, which later merged to form the Higher Education Funding Council (HEFC),

which modified the 'logic' of higher education funding. The two agencies were created to act

as buyers of academic services, transforming the role of universities from one of public

institutions subsidized by the state into that of private suppliers of specific services - i.e.

teaching and research. This change implied the creation of a new market for HEIs services

and pushed universities into bidding for students and interacting with other potential buyers of

their services such as industry, or the EC.

Overall, changes in research funding policy favoured competition for research funds among

all the HEIs and reinforced the dual support approach (from both the national HEFC and from

the Research Councils for specific projects). Selectivity on the basis of assessment of research

quality greatly awarded those research institutions with very high research productivity.

Universities such as Cambridge and Oxford catalysed a large share of UK research funding.

In 2003 Cambridge received 132 million pounds – some 3% of total funding for teaching and

research from the HEFCE, In fact Cambridge, after the Open University with 3.2%, received

the second largest piece of funding allocation, Oxford was in 4th

position with 2.9%,

23

As a consequence of the reform, the volume of industry contacts signed by these institutions

reduced, but research productivity was boosted. In the case of Cambridge, a number of

initiatives –i.e. like the creation of an incubator – fostered technology transfer to industry and

translation of research discoveries into business opportunities.

Note: This information draws upon David et al. (1995), Geuna (1997), figures can be found at

www.hefce.ac.uk/Pubs/hefce/2004/04_12/>http://www.hefce.ac.uk/Pubs/hefce/2004/04_12/

In the case of Finland the strength of industry in high-tech knowledge was supported

by strong public investments in the 1980s and 1990s through large-scale national

research and technology programmes, which in turn have been met by a strong

industry involvement. As this industry was concentrated in only a few regions, by

default RTD policy reinforced the existing pools of strength. Likewise in the German

case large thematic R&D Programmes have had a similar effect.

The Following Exhibit 3 gives an overview of both generic and specific national

polices that have influenced regional development in TTR’s in the case studies.

24

Exhibit 3 NATIONAL policies supporting TTRs – Generic and Specific

Country Generic national policy supporting high tech regions Specific regional policy supporting high-tech regionsDenmark Large Horizontal Research Groups Programme

Range of network programmes aimed at increasing inter-

linkages among companies, universities & research institutes

(vidennetværk, innovationskonsortier)

GTS Institutes

Regional network programmes - regionale vækstmiljøer

Øresund contracts provide an incremental extension to the existing repertoire –

but focussed specifically on this region.

The creation of Greater Copenhagen Authority is indicative of a shift in

emphasis, from seeing capital regions as a source of imbalance in growth to

giving support to the expansion of the big cities to the advantage of the country

as a whole. In the case of Copenhagen, Danish central government authorities

increasingly emphasised the need to develop the Øresund Region with Greater

Copenhagen at its core into the “Nordic city region No. 1”.

Sweden Technology programmes

Special technology programmes

Competence Centres (university focussed)

Development of Innovation Systems & Clusters (2002-2004)

National level Regional growth strategies are generally geared towards specific

industrial specialisations in the regions.

Programmes such as Regional consortia and VINNVAXT regional networks –

are widely focussed on all regional actors – to improve inter-linkages &

performance.

Øresund contracts

Finland 1. National Research & Technology Programmes (open to

consortia)

2. Centres of Expertise Programme (has a regional character

although not specifically regional) in Oulu the programme is co-

ordinated through a regional science park co-ordinator

Technopolis Plc and is very regionally focussed.

3. Cluster Programmes

In Oulu and Helsinki the Centre of expertise programme is co-ordinated at

regional level and embedded into (and based on) various regional plans for

development.

2. In Oulu the specific choice to support a research institute in the region has

been the corner stone of its success.

3. National government (together with the City of Helsinki, University of

Helsinki, and SITRA) established the Helsinki Science Park

France National government a major player in research and

development decisions and investment. The concentration of

large amounts of funding in one region or city has been a

deliberate strategy.

It seems there are specific policies in France to support specific regions – such

as high-tech in Sophia-Antipolis, Microelectronics in Grenoble, Genetics in

Evry, and Aerospace in Toulouse.

In 1960s decisions of decentralisation saw the establishment of a new research

lab in Grenoble – followed by research facilities of state owned companies.

This was supported by a national ‘Calculation Plan’.

25

Germany Thematic R&D Programmes.

Increasingly, financial support is being given to so-called

'centres of competence' that bring together main actors from both

industry and science in a certain field of technology. Some of

them also use a regional approach (e.g. Bio-Region Munich).

Explicit recognition of regional and sectoral clustering aspects in innovation

programmes – examples include BMBF programmes such as Inno-Regio, Bio-

Regio/ Bio-Profile, and Innovative Regional Growth Poles. A common feature

is the stimulation of regional and often sector-specific consortia that formulate

a joint innovation strategy and provide funding for joint innovation efforts –

integration of the regional dimension based on regional competencies in

knowledge generation, supportive public administration, financing institutions.

United

Kingdom

In the ‘80s and early ‘90s, the UK University funding gradually

shifted toward a model of allocation of resources, rewarding

research productivity. The reform increased the pressure on

universities in finding industry partners to finance research

(clearly putting universities like Cambridge in a favourable

position, due to research excellence).

In 1999 a map of existing cluster activity in the UK was made – a steering

group identified barriers to cluster development & recommend appropriate new

policy initiatives to Cabinet. The key role cluster development can have on the

regional economy was highlighted, in turn encouraging RDAs to develop

existing & embryonic clusters in their region, building on capabilities. DTI’s

cluster policy is to create the conditions that encourage the formation and

growth of clusters, but not to artificially create clusters. DTI sees in RDAs the

leading entities in governing this process of industrial development. RDAs are

responsible for taking forward the strategic aspects of cluster policy

development. This is funded through the Innovative Clusters Fund and carried

through under the Regional Innovation Fund.

Flanders The Flemish government has consistently invested in RTD and

in the case of Leuven particularly in IMEC, not from a regional

development perspective but from the perspective of creating a

world class RTD organisation.

No explicit regional policies as Flanders itself is a region.

26

4.1.2 Explicit support for TTRs by national governments

Few of the countries investigated have an explicit national and top-down policy to

promote regions of excellence. However there is a shift noticeable that regions of

excellence and particularly large urban concentrations of economic activity, are not

seen as a source of ‘problems’ (e.g. imbalance in growth) but rather an opportunity

with spill-over effects to the rest of the country. The Nordic countries are moving in

this direction, as well as France and Germany. Exhibit 3 above, shows specific

nationally implemented - regional focussed policy, supporting high-tech regions in

the case study countries.

Of all our case studies France is the clearest example where national policy is the

most dominant factor in supporting regional clusters. The power of regional

authorities is relatively marginal and the main RTDI investment decisions are made

on the national level. The country has been quite selective in promoting hot spots in a

selected number of areas: Sophia Antipolis (mainly IT), Grenoble (micro-electronics),

Evry (genetics) and Toulouse (aerospace). In these cases the strategy was to

concentrate public R&D laboratories and infrastructures closely related to strategic

industries in the hot spots. This type of ‘top-down approach’ to creating hot spots

seems to work only if there is sufficient private sector investment to match the

national investments. The German Bio-Regio competition also promoted regional

clusters, although in this case support was not for new cluster development, but rather

supporting regions where the sector was already strong i.e. Biotech in Munich.

The creation of the Greater Copenhagen Council or HUR (see case study report on

Øresund region) is indicative of a shift in emphasis, in the Nordic countries in general,

from seeing capital regions as a source of imbalance in growth to giving support to

the expansion of the big cities is to the advantage of the country as a whole. Further

the last decade or so, has seen the emphasis of regional policies in Sweden shifting

from a strong focus on supporting convergence of specific disadvantaged northern

counties towards a strategy based on ensuring balanced growth across the whole

country. In line with this new approach, and as of 1998, the Swedish Government

introduced a new regional industrial policy and promoted the concept of Regional

Growth Agreements aimed at ensuring greater coherence between policy areas and

strengthening the regional input on specific public funding priorities - generally

geared towards specific industrial specialisations in the regions. In Øresund the Scania

Region has been responsible for the Agreement, which has recently been replaced by

Regional Growth Programmes and a new programme for Scania was adopted in April

2004. Another example where strong regions are being supported in within the

German national initiative to stimulate competition between regions of excellence

(Kompetenznetze) and support their marketing.

One of the most prominent influences that national governments had in sowing the

seeds for TTRs is the decision to locate leading edge research and technology

laboratories in a certain region. This decision was usually at least two decades ago

and now starting to pay off in terms of motor for growth. A clear example of this

within the case studies has been the decision on the Finnish Government to invest in

the Oulu region through the establishment of a the local research institute of VTT.

27

Important was that the institute complimented the existing department at the

university, providing a local employment source for graduates. The influence was

two-way – the universities’ department was strengthened through its co-operation

with the VTT – developing their basic research activities. The existence then of both

a strong university and the VTT research institute was a reason for Nokia to move

their R&D department to the region. This happened in the 1980s and took quite some

time to develop into an internationally recognised hot spot.

Another example is the case of IMEC in Leuven, where the Flemish government

decided in1984 to set up an applied research institute that aimed to become world

class in microelectronics. The interaction between IMEC and the University of

Leuven, together with a number of leading international companies in

microelectronics formed a basis for a dynamic environment for high-tech business

start-ups. Both of these examples show the importance of good timing of such

decisions, at an early phase of a technology cycle (respectively silicon technology

and telecommunications). It would be difficult to repeat such an investment in a

research institute today given the higher barriers to entry in both technology fields.

Although the UK and particularly England has recently seen an explicit

regionalisation of its innovation and economic development policy, this policy is an

overall decentralisation across all regions and no choices are made in favour of a

particular hot spot or regional cluster. The Department of Trade of Industry – and

most other departments - has shifted funds and responsibilities from the national

ministry to the Regional Development Agencies (RDAs), which were launched in all

regions in 1999 and 2000. The 1998 Act requires the RDAs to develop a new strategic

vision for each of their regions. The Act encouraged RDAs to formulate clear

priorities to improve regional economic performance, and identify strategies for

achieving them.

The philosophy is to enable RDAs to develop their own customised strategies,

supported by a nationally managed ‘Regional Innovation Fund’ from which they

could invest projects to promote innovation and competitiveness. The DTI also

supported the RDAs to develop cluster strategies, mainly by providing expertise and

conducting studies, although a specific cluster fund has been developed (see

information box below). As these RDAs have a short organisational history and

relatively modest budgets their work on building regional profiles and clear policy

visions is only just starting to emerge.

UK CLUSTER POLICY – A REGIONAL APPROACH

DTI’s clusters policy is based on the creation of conditions to encourage the formation and

growth of clusters, not to artificially create them. Clusters were identified as an important area

of economic development in 1998 in the Competitiveness White Paper. Following the Paper,

the Minister for Science, led a full examination of biotechnology clusters. A number of

recommendations were made and 10 critical success factors for cluster development were set

out.

In February in 2001 the government published the first UK-wide systematic study of existing

clusters. The clusters map was published in tandem with the White Paper “Opportunity for all

in a world of change”, which recognises the key role cluster development has on the regional

economy, and encourages Regional Development Agencies (RDAs) to develop existing and

28

embryonic clusters in their region, building on natural regional capabilities. Since this

publication Cluster policy has increasingly been taken forward on a regional level by the

RDAs, and there have been a number of RDA and DTI organised workshops and conferences

aimed at increasing awareness of clusters and promoting best practice.

The DTI established a £15m Innovative Clusters Fund (ICF) in 2000-2001 as a pioneer-

funding stream to RDAs to promote cluster development and business incubation in the

regions. A further £35m was provided by DTI, as part of its Regional Innovation Fund (RIF),

to the RDAs in 2001-2002 to carry forward and progress their initial proposals. The cluster

funding had some obvious benefits on Cambridge. EEDA (RDA for East of England) receives

considerable funding to support local clusters, including Cambridge.

4.2 The influence of regional and local policy

4.2.1 Developing regional strategies and joint visions: the social capital

The bottom-up activities of regional and local actors have been essential to develop

the common strategy and visions to develop the regional image and vision. In each

example a different set of actors played a catalyst role:

• In Cambridge the university and technology transfer agencies were leading in

developing the environment for new business from research. Regional authorities

came in much later and facilitated what was already happening through self-

organisation

• In Leuven this role was played by the University of Leuven and to a lesser degree

IMEC, to be picked up later by the local authorities

• In Munich the Bavarian Land was the main trigger to develop these visions and

strategies, backed up by considerable investments

• In Øresund regional authorities and intermediaries took over where national

government activities had started. In this case European initiatives such as Intereg

and RIS/RITTS programmes enabled regional authorities to develop actions.

• In Oulu local universities and science park managers ensured that interlinkages

were made where national RTDI funding had started to develop the infrastructures

• Grenoble is probably the only case where regional authorities had marginal

influence, although local technology transfer and science park activities

complemented investments from the private sector and from the national

government

In the following Exhibits 4 and 5 the various polices at regional and local level

supporting TTRs in the various case study regions are shown. What becomes obvious

is the importance of the local level in the support TTRs. In all regions the local level

administration (some with more impact than others) have been involved in the

development of research and development infrastructure – namely in stimulating co-

operation with regional actors in the development of science and industry parks,

technology transfer points, incubators, and in marketing of the regions. Co-operative

ventures have also played a main role in a number of the cases, in particular BioM

AG in Munich for biotechnology, and in Finland, as by products of the Centre of

Expertise Programme, the Culminatum in Helsinki, and Technopolis (City of Oulu) in

Oulu.

29

The regional level governments have for the most not played an important role in the

development of the regions as Hotspots. In only two of the examples is a strong state

(regional) led approach present.

In Germany – due mainly to the de-centralised authority given to the State

Governments for innovation policy, the Bayern State (Regional level) government has

had the most pronounced effect on development of the Munich hotspot. In Bayern

there is a higher than average innovation budget (compared to other state governments

in Germany) due to privatisation of public institutes - revenue made available for the

support of high technology sectors.

The other example, where the importance of regionally led initiatives has been

paramount, is for a cross-border region of Øresund. Due to its cross-border character

it has been important to unite the region with organisations that represent both sides of

the border. The self-organisation of the regional actors with a view to promoting the

Øresund region and managing cooperation extends beyond infrastructure questions.

A series of cross-border organisations have been set up to promote integration of

higher education systems, development of research and industrial clusters through the

Øresund Science Region (see information box below), and regional marketing

through a joint external promotion platform the Øresund Network

(www.oresundnetwork.com). In most cases, the national authorities remain involved

notably in terms of joint funding of certain structures but as with the Øresund

Committee, the impetus and political direction is clearly given by local, and

increasingly regional (notably region Skane and to some extent the HUR).

30

Self Organisation of regional actors – Example: Øresund Science Region (OSR)

Cross-border networking in the Medicon Valley

Medicon Valley encompasses all activities relating to, or dependent on biomedical research

and development in Greater Copenhagen and Southern Sweden (Scania). The region

comprises a dense cluster of universities, hospitals and more than 300 life science companies.

Around 200 of these are R/D-based. With less than 3 million inhabitants, Medicon Valley

has an equal number of biologically derived compounds in pre-clinical and clinical

development as France and around 2/3 of the total number of compounds produced in

Germany with 80 million inhabitants!

Medicon Valley Academy (MVA) is probably the most advanced example of the cross-border

co-operation dynamics taking place in the Øresund Science Region. MVA works from the

principle that regions with strong organising capacity will perform better than regions

without. Regional organising capacity is defined as “The ability to organise (the chaos of)

activities and actors in the region into an efficient structure leading to synergy and progress

among the actors".

The creation of Medicon Valley Academy in 1997 was an important step in developing an

organising capacity in Medicon Valley. Since 1997, the organising capacity has been

strengthened notably by

• The change in 2000 of Medicon Valley Academy from a public project into a

member based organisation in 2000 with 50/50 public-private financing (member

fees)

• The commitment (membership) from all hospitals, universities and more than 200

companies in Medicon Valley to the Medicon Valley Academy organisation.

• The adoption of the Medicon Valley Strategy in 2001, supported by the majority of

companies and all relevant universities and hospitals

Findings from a recent survey4 found that from a narrowly defined cluster perspective

Medicon Valley has all the required components. However, from a regional innovation

systems point of view, the cluster has yet to improve the systemic linkages between the

production structure and the knowledge infrastructure within the region, especially across the

Danish-Swedish border. Continuing and sustained political efforts are needed to make further

progress towards a single cross-border regional innovation system. At the moment, the

Medicon Valley cluster remains embedded in two nationally demarcated regional innovation

systems, clearly shown by the limited cross-border integration among biotech firms and

public research organisations.

4 Proximities in a Cross-border Regional Innovation System: On the Knowledge Dynamics of

Medicon Valley (DK/SE) Paper prepared for The 4th Congress on Proximity Economics:

Proximity, Networks and Co-ordination, Marseille, June 17-18, 2004 Lars Coenen, Jerker

Moodysson, Bjørn T. Asheim Department of Social and Economic Geography at Lund

University, Sweden

31

Exhibit 4 REGIONAL (STATE) policy supporting the success of the Hotspots

Region Parties involved

Cambridge Some financial support to Bio-tech cluster East of England Development Agency (EEDA)

Grenoble - -

Helsinki - -

Leuven Flemish investment in research and technology. The region Vlaams-Brabant has no major

role to play

-

Munich 1. Future of Bavaria Initiative (1994)

2. High Tech Initiative (2000)

3. Bayern Innovativ – technology & knowledge transfer

4. Bayern International – key role in foreign trade promotion

1. Campaign focussed on the use & development of new technologies,

establishment of new companies, SME support, market development,

infrastructure, labour, environment and culture.

2. Aimed at advancing leading technologies and programmes through high-tech

centres, regional competence, knowledge workers, infrastructure,

internationalisation of RTD

4. Subsidiary of State government of Bavaria – funded through 1 & 2

Øresund 1. Øresund Committee – a co-operation forum for local & regional politicians from both

sides of the bridge. Primary structure for organising co-operation & managing EU co-funded

programmes in the region.

2. Øresund Science Region – aims to create a regional knowledge based power centre –

targeted on 4 science areas – operating through 4 parallel platforms. Activities include – co-

ordination of cross-border co-operation, promotion (branding), and capacity mapping.

3. Øresund Network – joint external promotion platform, respresenting the information and

marketing organization of Region

4. Swedish Region (Skania) - co-finances innovation projects of intermediaries, rather

than providing direct funding to business projects, this includes co-financing of

VINNOVA projects (e.g. Vinnväxt) The region has also developed strong co-

ordination with the Great Copenhagen Authority & Economics Ministry to ensure

growth.

1. Local & regional politicians / authorities from both Denmark & Sweden.

2. Management structures of the platforms are made up of key players from

industry, academia and public sector.

3. Danish/Swedish organisation owned by the Swedish Ministry for Foreign

Affairs, The Danish Ministry of Economic and Business Affairs, the regional

political body Region Skåne in southern Sweden and Greater Copenhagen

Authority.

4. The region is made up of a merger of the City Councils of Kristianstad and

Malmo, and includes some responsibilities of the regional association of Skane),

and unites some 33 municipalities.

Oulu - -

32

Exhibit 5 LOCAL (CITY) policy supporting (or having had most impact on the success of) the Hotspots

Hotspot

Cambridge University of Cambridge – liberal attitude towards research collaboration knowledge spill-out supported through university spin-offs,

research recruitment, & research collaboration. The university also established the Cambridge Science Park. St Johns College (part of

Cambridge University) established the St Johns Innovation Centre – providing provides business support for early stage knowledge based

companies – including a bio-centre, among its many tasks it runs the innovation relay centre, and programmes for businesses throughout the

region for the Regions RDA.

Grenoble The Grenoble regional CEA – created a science park ASTEC – specifically aimed at spin-offs, additional incubation facilities have also been

established – specifically Biopolis and MINATEC resource centre.

The MINATEC resource centre – gathers higher education and research operators within the micro-electronics sector

University has developed its own subsidiary – Floralis – to improve technology transfer

Helsinki City of Espoo together with Finnish Industrial Companies, and Insurance Companies established Innopoli – concentration of high-tech

research, training & business facilities at the Oteniemi Science park – including the Technology University and VTT (including the VTT

technology transfer unit - Finntech). The park also has a strong business incubator structure

Helsinki University of Technology has taken the lead in establishing the Oteniemi International Innovation Centre – tasks are international

technology transfer and marketing, searching for new technologies, and recruiting and business services

City of Helsinki and University of Helsinki (together with national partners) established the Helsinki Science Park – providing a lot of start-

up support.

City of Helsinki supports the city marketing and the Helsinki Regional Marketing Bureau has been established

The University of Helsinki has been active in establishing a number of research and training centres – Biocentre and Biomedicum Helsinki, are

situated within the University campuses in the region

The Centre of Expertise programme has led to the establishment of Culminatum – a co-operative venture made up of local stakeholders, and

plays a role of a regional development organisation – it runs the centre of expertise programme, and co-ordinates the strategic plan and

policy preparation for the region and a common development strategy for the universities. It also promotes technology transfer and supports

national programmes for commercialisation of research results (under the Innotuli programme), and seed financing and entrepreneurship

education (under the Spinno programme)

Leuven KU Leuven R&D together with Leuven Inc. have been very active in launching initiatives for high-tech start-ups, venture capital (together with

two banks) and science park development

Digital Signalling Processing Valley was an initiative from the knowledge institutes and the business community

Munich • Development of the BioM AG for the co-ordination of the BioRegio national competition. This Munich based biotechnology co-ordination

point is responsible for various initiatives in the region including: Support for starters / Searching for co-operating partners & investors /

33

Support for obtaining funds from the BioRegio programme / Providing funding through their own venture capital fund / Networking &

profiling of the sector

• Innovation & Incubator Centre for Biotech – launched as a support centre for bio-tech companies

• Munich Business Plan Competition – various actors – both public and private have forged a network to give backing & support to company

founders & entrepreneurs in the form of both capital and assistance

• City of Munich has been involved in the Marketing of the City, and for infrastructure development, incl. airport / conference centres

Øresund Denmark - Greater Copenhagen Authority has two important business development programmes – Copenhagen Capacity (inward

investment) and Wonderful Copenhagen (Tourism) it also co-ordinates the Øresund initiatives and manages the Interreg IIIA programme

Sweden

Oulu City of Oulu – Important player in the region, co-ordinates the Business Strategy which is focussed on developing the regional economy. It also

is responsible for the Technology City Strategy (1984) – constructed to compliment the municipal strategy of the city / since 1996 taken on a

regional character. The City also co-ordinates all the main players in the region under the guise of the Growth Agreement (2002-2006)– which

covers major fields of growth – the agreement is implemented by the Centre of Expertise. The growth agreement is supported by a logistics and

a business development programme. The City has also been, and still is a major stakeholder in the Science Park – Technopolis.

34

4.2.2 Developing linkages between actors: technology transfer and clustering

As we have seen from the above list knowledge institutions have played a key role as

catalyst of the ‘Triple Helix’. Universities, research institutes, and corporate research

facilities have a considerable impact on the development of the regions, especially if

their research and training focuses on the regions core competences. To achieve

development however, clear choices that support the region’s strategy (and strengths)

need to be made.

4.2.3 Creating an entrepreneurial climate

All regional hotspots discussed have shown an active commitment to supporting

high-technology start-ups through incubators, venture capital, active liaison offices in

universities and the creation of science parks. Cambridge and Leuven are examples

where dedicated attention to the commercialisation of science over a longer period

started to pay of in recent years in terms of numbers of high-tech start-ups created. In

fact achieving a self-promoting high technology region rests on the existence of new

high technology firms in high technology (growth) sectors. If excellent research

exists in regional institutes, valorise needs to take place in order for the research to be

effective in raising regional economic development growth, hence the importance of

start-ups and spin-offs – and the plethora of support possibilities that ensure their

existence and longevity.

4.2.4 Regional marketing

In the Finnish and German cases the existence of specific regional marketing offices

– with a strong technology banner – have been crucial in the marketing of the regions.

The involvement of all regional actors, whom together agree on a future vision for the

region and actively ensure that it is realized, has been important in giving a clearer

profile to the goals set out in such strategies.

However the marketing is an additional facilitation, which can only have an effect if

the region is a already strong attraction point. None of the regions can be said to have

relied on providing it with a ‘glossy image’ alone. It has helped them to become more

visible in the public debates on European hot-spots and therefore attracting attention

from European policy makers.

4.3 The interplay between national and regional policies: coordination

and synergy

With the exception of Cambridge, all cases show that the interplay between intended

or unintended - national and regional/local policies have been crucial to the

development of the TTRs.

35

4.3.1 Supporting regional network development

The national policies in Germany (Competence Centres and BioRegio) and in Finland

(Centres of Excellence), have promoted an improvement in regional networking in

strong growth areas, in fact funding depended on co-operation of actors to develop

regional strategies. In Munich the BioRegio programme of the Federal BMBF gave

the region the opportunity to bring together (an already strong network of players

concentrated in biotechnology) to bid for national funding – in turn this presented the

region with funds to further strengthen their biotechnology sector. An important

strength of the programme in the region was the development of the public/private

BioM AG – which acts as the co-ordinating body in the region under the programme,

but which also plays a crucial role for the sector as a whole.

Of course the German system – with its strong State (Länder) policy, has an inherent

regional focus. In the case of Munich, the Free State of Bavaria has a very large pool

of funds from which it has supported the growth of the region. Its two main

programmes – ‘The Future Initiative of Bavaria’ and ‘High-Tech Initiative Bavaria’

have been the driving force behind economic development in the State (and region)

since 1994. The Campaign focuses on, among others; Education, scientific research,

consolidation of innovations, and ICT; Establishment of new companies, support for

medium-size businesses, location of new markets, and infrastructure; and the Labour

market and social development. Other activities in the ‘Future of Bavaria Campaign’

were the establishment of Bayern Innovativ, the co-ordinating technology transfer

organisation, and Bavaria International, which promotes the region in foreign

markets. Under the programme there is a clear policy of stimulating Bavaria’s

strongholds rather than supporting innovation in a generic manner.

Specific national choices for high technology regions

In Finland political choice to support the development of a strong northern region was

the building block of development in the region. In particular the establishment of a

number of crucial actors required for a knowledge intensive region – i.e. university,

research institute, science park. In addition the Centres of Excellence programme has

supported existing networks in the various regions to develop into world class

knowledge centres, attracting more research and business – having a upwards spiral

effect on the regions development. Likewise support of specific regions for high

technology development can be seen in France, where national choices have been the

most dominant factor in supporting regional clusters - promoting high tech regions in

a selected number of areas: Sophia Antipolis, Grenoble Evry, and Toulouse. In these

cases the strategy was to concentrate public R&D laboratories and infrastructures

closely related to strategic industries in the hot spots. This type of ‘top-down

approach’ to creating hot spots seems to work only if there is sufficient private sector

investment to match the national investments. The German Bio-Regio competition

also promoted regional clusters, although in this case support was not for new cluster

development, but rather supporting regions where the sector was already strong i.e.

Biotech in Munich.

36

4.3.2 Local support of national policy

The case studies have shown that it is important that the local level government is

active in supporting traditional urban policies (e.g town planning, infrastructures,

industrial estates) that are a necessary pre-requisite for the higher level economic

plans. This is particularly evident in Munich where the City Level administration

(made up of a co-operation of all players) have developed a strong vision for the

future of the region in terms of economic, social, spatial and regional development –

including aspects to support growth in new and old technology areas such as Science

parks / Local employment strategies / SME support / Large infrastructure projects

such as transport node development / Regional marketing. In Oulu there is also

evidence of such co-operation at the regional level – in the form of the Regional

business strategy, which includes aspects of business support and marketing. Is

addition Oulu has developed a Growth Agreement (see information box below) –

which gives support to main growth areas with the help of both business development

and logistics plans.

LOCAL SUPPORT FOR NATIONAL POLICY – THE CASE OF GROWTH

AGREEMENTS IN OULU

National programmes have had major influences on how main actors co-operate in the region.

However local level policy plays an important role in the organisation of the economic

strategy for the region, strategies that support national policy ideologies – in particular with

respect to high growth technology areas (and cluster / sector development). Oulu relies on

three major programmes developed by local actors: Oulu Region Business Strategy 2002-

2006, Oulu Region Centre of Expertise Programme 2003-2006 and the Growth Agreement

2006. Within these programmes the bulk of interaction takes place.

The growth agreement guides Oulu's development until the end of 2006, and was concluded

between the City of Oulu and regional actors, and covers major fields of growth, i.e.

information technology, biotechnology, wellness technology, content production and media,

and the environment. It also includes business development and logistics programmes for

basic industry.

The growth agreement has been prepared under the leadership of the City of Oulu, while an

advisory board annually monitors the implementation and allocation of resources. The

Growth agreement is a significant investment in maintaining Oulu’s world position in the

future, in particular its name as a technology city. All of the area's major players are

participating in the agreement, in which they have committed themselves to together develop

the key high technology growth areas. The Oulu Region Centre of Expertise is responsible for

implementation of the Growth Agreement, and the practical implementation of the

programme, while the City of Oulu is responsible for coordinating the growth agreement as a

whole.

The cornerstone of the Growth Agreement is clusters, the Agreement comprising five clusters

consisting of enterprises and corporations, i.e. research institutes, educational institutes and

other actors. These make up a dense network that combines business, research and training,

skilled personnel and the management of industrial processes in the various branches. Inaddition there are two extensive programmes to support the implementation of the growth

agreement: the business development programme and the logistics programme.

37

4.3.3 Cross border structures necessary for good integration of dual national policy

In Øresund a situation exists where the governance structures created are strongly

dominated by the public sector authorities. The case study highlights the importance

of external (in this case European) funding in the instigation of cross-border

initiatives – the INTERREG programme appearing to have served as a catalyst for a

range of initiatives and co-operation building, particularly across the public sector

actors.

An example of such a regional co-ordination platform is the Øresund Committee -

created in 1993, it is a cooperation forum for local and regional politicians on both

sides of the Sound, consisting of political representatives from regional and local

authorities in Skåne and Greater Copenhagen, the Danish and the Swedish

governments having the role as observers. It is clear that the local and regional

authorities use the Øresund Committee as the primary structure for organising

cooperation and it has been entrusted with promoting regional cross-border co-

operation and managing the EU co-funded INTERREG programme for the region.

The following Exhibit 6 maps the most influential players in the various case studies,

and highlights that most have a strong combination of national and local actors. From

earlier information we see the combination of support for underlying factors being

mostly national supported, and supporting factors mostly undertaken by the local

level. An exception is the Munich region where the State Government has played the

largest role.

Exhibit 6 INFLUENTIAL PLAYERS involved in the success of high-tech

growth / economic development in region

Cambridge Grenoble Helsinki Leuven Munich Øresund Oulu

National Government X X X X X

Regional (State)

Government

X Vlaan-

deren

X X Skania

Region SE)

Development Agency X Øresund

Committee &

Science

Region

City level Administration X X Greater

Copenhagen

Authority

X

Universities X X X X X

Research Institutes X X X X

Tech- Transfer bodies /

Science Parks/Incubators

X X X X X X

Sector specific organi-

sations

X X

38

The following picture (Exhibit 7) positions the hot spot cases on the axes regional

–national led and public –private sector initiative. The positions are not static. For

instance in the case of Oulu, Grenoble and Øresund national public sector

interventions were initially very important catalysts, but gradually the regional public

sector actors took over important roles. This picture shows that there is not one model

for top technology regions. This also implies there is not one recipe how they can be

supported by policy.

Exhibit 7 Positioning the hot spot cases

Na

tion

ally

ledR

egio

nall

y l

ed

Public sector initiative

Private sector initiative

Grenoble

Cambridge

OlouHelsinki

München

Leuven

Øresund

39

5 Lessons for policy

5.1 Can national or regional policy intervention create TTRs?

A relevant question for policymakers is whether TTRs can be created by policy

initiatives. From the quick scan that we have done the answer is that policy decisions

– from national or regional government - definitely can make a strong difference, but

they are not a sufficient condition for TTRs to emerge. From the case studies we can

conclude that:

• Timing is essential if the aim is to develop excellence from an investment in a

particular research facility (laboratory, infrastructure) as entry barriers into newly

emerging technology field increase as they mature and finding the niches where

added value can be made through new comers is becomes more difficult.

Therefore repeating what many other regions have done before without having a

specific ‘unique selling point’ is a not a good strategy

• Almost all cases with the exception of the Oulu region had a number of

structural characteristics of hot spots already present in the region. These were

either embedded in a long history of research (e.g. Cambridge, Leuven, Lund) or

the presence of strong industrial actors (Helsinki, Munich, Grenoble) or the

combination of both. All these cases are also urban areas with considerable

populations with already have some degree of concentration of human skills due

to their population size and (regional) capital function. There are few examples in

Europe where regional hot spots have emerged from scratch. Even the Oulu case

has a history of almost two decades of dedicated action from national government,

regional actors and industry. Some of the French TTRs are also created with

considerable public funding.

• The examples also show that persistence in the strategy is needed and results from

policy actions can not be expected within the short to medium term.

5.2 How to support TTRs

As there are too many causal relations and external influences, and as each region has

a different starting point in terms of structural advantages, it is methodologically

impossible to measure the exact impact of policy interventions. There are however

typical regional and local policy measures, which have supported TTRs:

• Policies and initiatives to enhance a good climate for high tech start-up

companies. These are activities such as incubators and science parks, venture

capital funds, management support for starters, and good technology transfer

functions within the knowledge institutes. The regional knowledge institutes need

to play a decisive role in this as their institutional arrangements need to support

spin-offs.

• Fostering the networking between firms and between academia and industry,

possibly by playing a role as a spider in the web. Nevertheless the self-organising

capacity of regional actors must be present to have a catalyst effect

40

• Regional strategy processes often launched by regional development agencies or

other intermediaries where collective actors have agreed to focus on certain

technology areas or clusters

Although the previous has shown that there is no overall recipe for the emergence or

support of hot spots, the examples show that a number of issues are important lessons

for policy makers:

• The coordination of joint actions between national and regional governments

have been important in most of the cases. National governments can influence the

TTR process through its dedicated RTDI investments (provide the (public)

infrastructure for excellence), regional and local governments are necessary to

ensure or stimulate the interaction between the key players in the region

(networking function) and develop the regional vision. In addition we have seen

examples where national governments (and EU) have stimulated region strategy

building exercises (e.g. encouraging and guiding regional and cluster strategies in

UK, the regional growth contracts in Sweden, the regional competition for regions

of excellence and the support of regional marketing in Germany);

• The ‘triple helix’ between government, knowledge institutes and industry in the

region has to function as a catalyst. As we have seen not all parties have to be

involved from the start (e.g. Cambridge, Leuven and Munich are examples where

involvement of the local government was quite late, Oulu an example where the

business sector came in later) but at least two pillars of the triple helix must jump

start the dynamics. For national policy this means that supporting TTRs in areas

where the ‘Triple Helix’ has not found momentum will be less effective.

In terms of characteristics in our view the most essential elements of regional hot-

spots would be:

• Above average # of knowledge generating companies

• Excellent public research infrastructure

• Structural collaboration & networking within industry and between industry and

academia

• Self organisation of regional actors

• Above average & quality of high-tech starters

In terms of government policies the following have in our view been the most

influential:

• Investment in state-of-the-art research institutions and facilities, also ensuring the

abundance of skilled, usually by the national governments. This showed often to

be ‘by default’ if generic RTD support goes to regionally concentrated players

(e.g. Cambridge in the UK, Grenoble, Oulu and Helsinki, but also through

deliberate investments in leading institutions (e.g. IMEC in Leuven, VTT in Oulu,

Crolles facilities in Grenoble) which have a high relevance for industry

• Active support of entrepreneurship and new technology based firms in a limited

number of technology areas that reinforce the critical mass of activity in that area,

through thematic science parks, incubators and financing instruments. This is

mostly done at regional or local level. The local universities have to take an active

position in this.

• Facilitation by national and regional governments of strategy building, cluster

policies and regional marketing of a local area.