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  • 1. “ Bringing Cambridge to Consett? Building university-centred entrepreneurial networks in peripheral regions ” “ International Experiences in Promoting University Spin Off Firms” University of Newcastle upon Tyne, 26 th November 2004 Paul Benneworth (Newcastle University/ Radboud University Nijmegen)
  • 2. Acknowledgements
    • UK Economic and Social Research Council
    • David Charles, Catherine Hodgson & Aard Groen
    • Newcastle University & Twente University
    • Participants in the study
    • www.staff.ncl.ac.uk/p.s.benneworth/test.htm
  • 3. Outline
    • The new knowledge economy
    • University spin-offs in periphery
    • The model of spin-offs and TENs
    • The network methodology
    • The case studies: Newcastle, Enschede
    • Further analytic directions
  • 4. The new knowledge economy
    • Knowledge as factor of production
    • Competitiveness through innovation
    • New successful places
      • Totemic sites of the new economy
    • Role for less successful places?
    • Double problem – the “double bind”
      • Poor performance
      • Lack of foundations for future performance
  • 5. Spin-offs and the knowledge economy
    • Totemic sites and spin-offs
    • High embodied knowledge value
    • Innovative and competitive firms
    • Entrepreneurial DNA for changing regional mentality
    • Idea of spin-offs as quintessential new economy activity
    • BUT drawn from limited pool of exemplars
    •  An ‘ecological fallacy for LFRs?
        • How far can inferences be stretched?
  • 6. Newcastle University in the North East of England
  • 7. Newcastle Uni: long term player
    • Origins in marine technology college and Medical College for Durham University
      • 1940s-1970s: d égagé
    • Long-term decline of regional industries
      • Newcastle as ‘Brasilia of the North’
    • 1980s – the Newcastle Technology Centre
    • 1990s – HESIN, Three Rivers
  • 8. Newcastle: traditional university, high technology industries
    • North East: low technology, old industrial
    • Universities major source of R&D
        • 60% Newcastle University
    • Good record of NU associated companies
        • Sage (1981) – world-leader in SME accountancy software
        • MARI (1985) – was large consultancy business in 80s
        • Novocastra (1990) – sold after decade for €50m
        • Arjuna Solutions (1998) – worth €20m in 3 months
    • Strong institutional commitment to promoting regional economic, cultural, social development
  • 9. Twente: peripheral region The central Netherlands and Overijssel Province Map 1 Provided from CIA world factbook, universities added manually Map2 and boundary data are copyrighted by FOTW - Flags of the world website
  • 10. Twente: de proef in de bos
    • 1961: Textiles in decline in the East
      • New university created to revitalise industry
    • 1970s: national debate over future of TUT
    • 1980s: van Tilburg as first spin-off
      • Harry van der Kroonenberg support
      • Creation of famous ‘TOP’ scheme
    • 1990s drift and loss of focus
    • 2000s MESA+ and the business accelerator
  • 11. UT: key summary
    • UT has been an entrepreneurial university for 20 years and has close links with the region, key commercial and public‑sector actors
    • Big financial pressures to generate the funds to pay off the mortgages on the new state development
    • Continuing declining funding in real terms for the HE budget
    • Importance of third tier funding to university but importance of funds from large funds rather than small local SMEs.
    • Requirement to have from 1980 proof that their research has benefit
    • They are an applied research university, so they do not have physics, chemistry etc, they have applied medical physics, electrical engineering etc.
    • University are a key player in the regional innovation system and opportunity to get public funds to support private activities.
  • 12. Building a new knowledge economy
    • 7,000 jobs created in spin-off (TOP) companies
    • Attraction of 2 (3?) national research centres (LTIs) to the East (CMET, TI, …)
    • Anchoring key companies in the region ?
      • Philips Signaal (  Thales)
      • Ericsson (closed 2002)
      • Vredestein (tyre manufacturers)
  • 13. Contribution to regional economy?
    • Small numbers of sustainable jobs
    • Not replacing declining industries (NVQ II/ VMBO/ MBO level occupations)
    • Long term strategies not matched by rising levels of new firm formation
    •  In what sense are USOs improving regional performance?
  • 14. A co-evolutionary spill-over model Source: Benneworth & Dawley, 2004 (after Muller & Zenker, 2000) University USO Knowledge about innovation Product innovation with IPR University/ business relationship Other firm Other product innovation Territorial knowledge pool
  • 15. Our model of spill-over Source: Benneworth & Charles, 2004 (after Muller & Zenker, 2000) University USO Knowledge about innovation USO (product) innovation University/ business relationship Other firm Other product innovation Territorial knowledge pool 1 2 3 Business support
  • 16. Key elements of our model
    • University/ spin-off relationships
    • Working with business support organisations & government
    • Working with other high technology small firms
    • Spinning-off as a ‘community of practise’
  • 17. Method and sample
    • 2 x 40 semi-structured interviews
      • University managers, professors
      • Spin off owners, partners
      • Third party innovation partners
      • Other key local partners
    • Focus on Universities of Newcastle, Twente
    • Snowball from initial sample
    • Analysis of notes and 2d documents
    • BUT first cut probe to structure analysis
  • 18. University/ spin-off interactions: Newcastle
    • Spin-offs as research partners
        • Putting research back into the university
        • Levering in external/ valourisation research
        • Spin-offs as research users
    • Professor as nexus – academic/ entrepreneur
    • Overlap: spinoff/ university labour markets
    • Third party firms drawing on commercialisation expertises
    • BUT third party also adds to knowledge pool
  • 19. University/ spin-off interactions: Twente
    • TOP programme using ‘waste’ in university
      • Increasing pressure from cutback environment
    • Spin-offs as research ‘atmosphere’
        • ‘ Forcing’ new ideas into other companies
        • Little feedback into development of research strengths
        • Focus on organic growth
    • Entrepreneur as nexus – full-time entrepreneurship
    • New models of spin-off with active commercialisation yet to be proven
    • “ Political value of spin-offs >> economic value”?
  • 20. Universities shaping the TEN: Newcastle
    • Universities in North East seen as quite good at spinning out companies – metrics
    • Problem with external CoE – university not seen as source of entrepreneurship
    • Government ended SMART - relied on by smallest USOs
    • Finance Act 2003: university legal action still pending
  • 21. Universities shaping the TEN: Twente
    • UT seen as THE Dutch exemplar
      • Fits with Balkenende/ Brinkhorst agenda
      • Frans van Vrucht part of so-called Innovation Platform
    • LTIs totally dependent on existing UT/ USO expertise
    • UT lost out in concentration agenda
      • ‘ broadening’ agenda never enacted!
    • UT vs. Philips for new nanotechnology LTI
      • Regional vs. ‘national’ agendas.
  • 22. USOs, universities and HTSFs: Newcastle
    • Good examples of collective action
        • Company works with USO on a project, and the USO MD supervised TCSs, Ph.D.s in key areas – one TCS associate became USO employee.
        • USO had problems and solved with local micro-business, which fed back into own products
        • Chemical corporate spin-off used uni kit & USO laboratories and is developing projects with USO
        • Service (software) business populates platform with domain/ expert knowledge from the university
    • Mediated through single person – bilateral?
  • 23. USOs, universities and HTSFs: Twente
    • Strong sequence of growth: new/ bigger/ stronger nodes & connections
        • CMET – spin-outs and research groups: still active today
        • Cluster activities in the sequence: TIMP, Nanotech Valley
        • MESA+ used by large companies outside the region
        • Companies help to create the land-use of a high technology economy: incubator, science park, wireless hotspot
    • Mediated through single person – bilateral?
    • Clusters in different areas
      • Near to the Spearpoint Institute areas but not perfect
  • 24. The nanotechnology sequence, Twente Centre for Micro-Electronics Technology Transfer Twente 3T Aquamarijn Twente Micro Products Kymata C2V Lion Technologies Lionix Medspray Twente Medical Products TMP Int’l MESA Institute (B) MEMS research group (E) ? Oldenzaal Rubber company ? Deventer PC training company NANOMI Membranes research group (W) Mosaic Systems (Breda) Phoenix European Membranes Institute Membrane Applications Centre Twente Pervatech Krabbe Engineering Membranes research group (S) X‑Flow Microflown MESA+ (R) Axis IO Axis MO Smart-tip Idefix Micronit
  • 25. ‘ Spinning-off as community of practise’: Newcastle
    • Little continuity between ‘regimes’ 1-3
        • The Manchester computer disaster (Bursar)
        • NUventures (NUWater, NUGround, Newchem)
        • HERO Business Development Managers
        • Business Development Directorate
    • Some progression from admin into companies, (regimes 3  4)
    • Internal ‘myths’ -- great companies – demonstration effect for other entrepreneurs
    • Dominance of professor/ entrepreneur model
      • Low rates of progression of student/ RA e’ship
  • 26. ‘ Spinning-off as community of practise’: Twente
    • Heavily personalised and antagonistic regime changes
        • van der Kroonenberg as an ‘external visionary’
        • ‘ ERDF drift’ and ‘Empire building’ in 1990s
        • Destroying the TOP programme to save it (1998)
        • The Business Accelerator idea (born on a mountain top)
    • Some progression from admin into companies, (regimes 3  4)
    • Internal ‘myths’ -- personal enrichment
      • demonstration (distraction) effect for academics
    • Dominance of ‘lone wolf’ entrepreneur model
      • High rates of progression of student/ RA e’ship
  • 27. The revised Newcastle TEN
    • Strongest element appears to be university/ USO relationships.
    • Community of practise started slowly, but some signs that a broader ‘network’ of practise building up;
      • two BDMs now CTOs for USOs
    • Universities not strong political actors and USOs not the critical asset necessary to improve political power
    • Very few “1 USO – many HTSF” relationships, so reworking existing not building new relationships
  • 28. The revised Twentish TEN
    • University part of strong technological network
    • Other (strong) nodes (sources of growth)
      • LTIs
      • Cluster organisations and activities
      • OOST (RDA), municipality, province (Elsevier)
    • University very strong political actor
        • but Frans van Vrucht now retiring (party last Wednesday)
    • Clear weakness around community of practise
  • 29. Future analytic directions
    • Newcastle Concentration in (1)
      • Cathedral in desert?
    • Twente: strong (1), (3) weak (4), v weak (2)
      • Growth pole but longevity?
    • Different types of peripherality  different types of mechanisms?
    • Does it all really make a difference?
      • Slow process of change vs external shocks