WHITE SPACES IN BUILDING INNOVATION CLUSTERS A.S.Rao Senior Advisor, Innovation Clusters,FMC email@example.com http://www.indiainvents.blogspot.com/
Implementation challenges and opportunities – analysis in the Indian context• Success formula• Knowledge flows• Cluster’s knowledge creation capability• Indian pilot• A model for Indian Innovation Cluster(!)• Discussion
Innovation cluster- why are they popular and how are they successful• The U.S. government each year spends about $150 billion on basic scientific research and development and out of that about $100 million is spent to support regional innovation clusters and associated business incubators.• As measured by patent rates, productivity rates and other innovation metrics, an innovation cluster creates new companies and new jobs.
Pittsburgh’s innovation cluster Pittsburgh Life science Greenhouse (PLSG) was formed as a focused incubator to provide capital investments and customized company formation. PLSG focused on bioscience companies with promising innovation in the biotechnology, diagnostics, health care information technology, medical devices and therapeutics. Three programs were taken up to fuel growth in Life science industries:• The Life Science Greenhouse Initiative (LSGI) for very early stage life science start-ups and regional workforces plan development projects;• The CURE grants program to help maturing start-ups access the next round of development capital;• Funding of venture capital groups in the state to help finance these start-ups. The $60 million state fund with $180 million private capital infused additional capital of $240 million in targeted areas to fund 280 start-ups.
Ohio University• Known for rich natural resources like iron ore, salt, clay, coal.• Transformed as high tech cluster with Ohio university generating patents, technologies and spin-offs. Ohio University is home to 44 centers and institutes, and many support the commercialization of faculty research and technology. These include: Edison Biotechnology Institute, Avionics Engineering Center, Ohio Coal Research Center, Institute for Corrosion and Multiphase Technology, Nanoscale and Quantum Phenomenon Institut.• Since 1983, the Innovation Center has incubated more than 100 companies; helped create more than 1,000, assisted with 9 spin‐off companies from university‐invented technology and supported the start up of 27 companies created by university faculty and staff. 784 start-ups between 1995 and 2000 specializing in biomedical research, renewable energy and gourmet food.
Swiss Medical Technology• With the clock ticking on their watch industry in the late 1970s because of a glut of cheaper, digital Japanese watches, the Swiss timepiece and mechanical engineering sectors desperately needed a shift and then came medical technology.• A combination of government technology development programs, a talented and well-educated labour pool, a supportive academic community and favorable tax rates have combined to make Swiss medtech one of the fastest growing industrial sectors in the country.• The Swiss medtech sector in 2008 comprised of about 700 companies, employing 49 000 people in the production of products such as dental and orthopedic implants, urinary infection diagnostics, surgical tools, sterilization products for the healthcare sector, electrocardiographs, and precise ophthalmology measuring tools.
Success factors• Four principles for cluster success are: Place matters, networks are critical, patience is necessary, and leadership is essential.• Some clusters developed on their own over decades without any particular set of individuals or institutions consciously thinking about their development. New clusters, however, required decisive local leadership to begin to flourish.
Social capital of a cluster The study on effect of social capital on new venture creation at Cambridge high tech cluster had important findings:• A limited number of individuals, together, shaped the Cambridge High tech cluster. At the center of a high tech cluster is a mini cluster of key individuals (investors, academics and serial entrepreneurs) who can influence the success of the cluster.
Knowledge flows in innovation cluster• The knowledge-using elements are involved, in maintaining or expanding capacity using given modes of production; training workers in established operating procedures, or within a cluster context, the imitation of production techniques used by neighboring firms.• The knowledge changing elements are involved in the management of innovation processes; in product design and development; or in the search for, selection, adaptation and assimilation of new product or process technology from outside the cluster.
Buzz Vs pipeline• Buzz refers to the information and communication ecology created by face to face contacts, co-presence and co-location of people and firms within the same industry and place or origin.• Global pipelines are purpose built connection between a given local firm and parties on the outside world. Partners can range from other firms, suppliers, customers, universities, research centers. Establishing global pipeline is costly, yet it is possible with a conscious effort on the part of partners at both ends of the pipeline, making the exchange highly targeted towards specific pre-defined goals.
Clusters knowledge creation capability• A cluster that has a high level of knowledge creation capability is one where knowledge held by individual firms is effectively shared among cluster firms through inter-firm knowledge exchanges and amplified by individual firms’ knowledge spirals leading to enhanced knowledge creation by individual firms.• Knowledge overlap between cluster firms and number of cluster firms that engage in knowledge exchanges with outside entities.
Indian pilotTwo pharmaceutical clusters of Ahmedabad-Vadodara (state of Gujarat), Hyderabad (stateof Andhra Pradesh); Information andCommunication Technology(ICT) cluster ofDelhi-NCR and three foundry industry clustersof Samalkha, Faridabad and Kaithal (all in stateof Haryana).
Strategic objective• Foundry cluster: Build social capital• ICT cluster:Create demand for innovations• Hyderabad Pharma cluster: Transform to clean & green cluster.• Gujarat Pharma cluster:Breed a new generation technopreneurs.
Process• Map Dominant Feature of cluster.• Develop cluster attitude• Connect Dots• Create hope and excitement• Change Dominant feature of cluster.
Indian Model(!)• Improve the cluster knowledge creation capacity in stages , support taping of global sources of knowledge and creating cluster knowledge.• Identify the type of industry commons essential and bring it to life.• Develop service providers: knowledge gate keepers, innovation intermediaries.
Structure of cluster coordinating body• Information Network: Cluster Coordinating Body would collate all information of interest to stakeholders and disseminate same with physical meetings, digital media, social networks. Large part of information would be about government programs, promotional and regulatory. Authorities, universities, institutes, firms deal directly with one another and keeping the cluster coordinators in the loop is not mandatory.• Orchestrated Network : cluster coordinators would actively be involved in fund disbursement and knowledge networking.• Managed Network: Public authorities would park the apportioned funds with the coordinating agency to manage against targeted outcome.
Discussion When trying to replicate innovation cluster model in India, several questions arise, such as;• Can a university drive t17he development of a cluster? What are the conditions essential to make a technical University- center of regional economic activity?• What is needed to increase social capital of a cluster?• In the absence of appropriate knowledge flows from local institutes, how could the cluster firms access external knowledge?• Can the public authorities prioritize support activities?
E Book• The E Book `Promoting Innovation in Clusters- a guide book for promoting innovation in MSME clusters is now available as DVD. This book is authored by me along with Mukesh Gulati,Dr.Tamal Sarkar, Ranjan Singh, Keerthi Lal kala, Sourabh Gargav, Dr.Ashutosh Khanna. Contents:Chapter1: Overview of Clusters in India• Defining cluster• Presence of Clusters Globally• Presence of Clusters in India• Cluster Development in India, its Challenges and the Vision AheadChapter 2: Global Models of Innovation• Regional Innovation Clusters and the US Model of Innovation• European Model of Innovation• Asian Models of Innovation
E Book (contd)Chapter 3: Technology Upgradation for Promoting Innovation in Indian Clusters• - Case Studies• Phase 1- Technology Procurement Through Funds• i.) Shantha Biotechnics Vaccine Innovation Case – Funded by TDB• ii.) Revival of Kinhal Art Innovation – Funded by TEPP• Phase 2 – Technology Transfer• i.) Coimbatore - SBI Uptech Programme• ii.) Indo- German Tool rooms for new dies and moulds- GTZ, Ministry of SSI• Phase 3 – Collective Approach• i.) Ludhiana Knitwear Cluster- A case on providing multiple inputs• ii.) Technology change through benchmarking in Ganjam Cashew Cluster• iii.) Jalandhar Sports Goods Cluster• Phase 4 – New Trajectory towards Innovation• i.) Conceptualisation of Bio Technopreneur Programme• for Ahmedabad Pharmaceutical Cluster• ii.) Formation of NITEE & its various focus areas in ICT Cluster Delhi-NCR• iii.) Design intervention reflecting knowledge flows among network partners leading to new• designs in Samalkha Foundry Cluster
E Book (contd)Chapter 4: Implementation Challenges and Opportunities, Analysis in the Indian Context• An overview of Innovation Clusters• Challenges that limit knowledge flows into the clusters in India• Indian Pilots for Promotion of Innovation in Clusters• Innovation and MSME Clusters- Indian ContextChapter 5: Proposed Implementation Framework at Cluster Level• Diagnostic Study Report and Action Plan.• Trust Building, Social Capital and Implementation• Monitoring and Evaluation.• The DVD priced at Rs 799/- contains an E Book ( E Reader not required) and a PDF file.For copies but online at E bay or contact:Foundation for MSME ClusterUSO House, 2nd Floor, USO Roadoff Shaheed Jeet Singh Marg6 Institutional Area, New Delhi 110067