Textiles In Decline In The East


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Textiles In Decline In The East

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