TCI 2014 Visualisation of Linkages in Networked Clusters: Analysis of the Biopharma Cluster Ecosystem in Cork
1. Visualisation of Linkages in Networked Clusters:
Analysis of the Biopharma Cluster Ecosystem in Cork
John Hobbs & Eoin Byrne
Parallel 4.1 New Cluster Policies and Cluster Evaluation
12 November 2014
2. VISUALISATION OF LINKAGES IN NETWORKED CLUSTERS:
ANALYSIS OF THE BIOPHARMA CLUSTER ECOSYSTEM IN CORK
DR JOHN HOBBS & EOIN BYRNE
EUROPEAN PROJECTS RESEARCH UNIT
DEPARTMENT OF MANAGEMENT & ENTERPRISE
CORK INSTITUTE OF TECHNOLOGY, IRELAND.
DATE: 12/11/2014
3. Traditional Cluster Analysis
Traditional Porterian cluster analysis focused on the INTERNAL workings and competencies of a
cluster and its local boundaries
Economic Analysis:
• Location Quotients
• Input / Output
• Regional Employment
• Patents
• Case Studies
Informs and Develops Policies Based on Regional Strengths
4. Visualisation of Linkages in Networked Clusters
Traditional Porterian Analysis + V-LINC Analysis = Contextual Policy
Informed policy
development within the
context of regional
strengths + dynamics
=
V-LINC supplements traditional Porterian cluster analysis by adding an EXTERNAL analysis:
European International
National
Informs & Supports Local/National Policy Development with an International Perspective
5. What Types of Linkages does V-LINC Measure?
Measuring input and output linkages has provided the backbone to traditional Porterian
research studies on concentrations of industry.
Derived from Marshall’s (1890); Porter’s (1998) and Leydesdorff (2012) each of which recognise
the role of knowledge, innovation, collaboration, administrative supports and specialised inputs.
6. How V-LINC measures the Business Value of Linkages
• V-LINC data collected through structured interviews.
• Measure the business value of linkages as perceived by company personnel.
• Using likert scale questions derived from Porter’s (1998) industry cluster theory.
= 36/40
= 31/40
= 27/40
= 24/40
Perceived Significance Value No.
High >30 to 40 2
Medium >20 to 30 2
Low >10 to 20 0
Tenuous >1 to 10 0
Employees Provide
Expert Views on Firm
Linkages
Head of Research &
Development
Confidentiality kept - Perceived Significance Bands
7. The Overall V-LINC Methodology
1) Individual
Firm Analysis
2) Multiple
Firm Analysis
Triple Helix Cluster
3) Reporting
Data Visualisation
Tabular Data
4) Policy & Strategy
Development
Firm Level
Cluster Level
National Level
European Level
Employees Provide
Expert Views on Firm
Linkages SMEs MNCs
8. Why Apply V-LINC to Biopharma in Cork?
• Biopharma an important economic sector
in the developed world (Battelle, 2013;
Cannon, 2014).
• Nationally, Biopharma is one of 14 sectors
selected by Government to be a driver of
growth in the Irish Economy, in the Report
of the Research Prioritisation Steering
Group (Forfás, 2012).
• Biopharma also features in Ireland’s RIS3
strategy (Forfás, 2014).
• Biopharma is a major industrial sector in
Ireland with a notable specialisation in
Cork. Cork stands out as a key region in
the Biopharma manufacturing sector.
• Repeated reference by policy makers is
made to Biopharma clustering in Ireland
(Martin, 2004; DETE, 2008; Riordan, 2008;
Forfás, 2010; DJEI, 2014).
9. Applying V-LINC to Cork Biopharma
78 interviews
472 Linkages
0 SMEs
7 Large Firms/
MNEs
• Area: 7,500 km²
• Population: 519,000
• Enterprises: 53
• Employees: > 9,600
• Policy: State Government – National
• Research & Education: 2 Universities
• Location Quotient = 3.88
10. Visualisation of Linkages in Networked Clusters
• Maps linkages between firms constituent in a cluster, with organisations they engage with.
• Reports linkages across 8 categories at 4 levels Local, National, European & International
11. Applying V-LINC to Cork Biopharma
Distribution of Linkages by Category and by Firm
Company GA IA IP IN OU RD SS TN Total (n)
Amgen 19.1% 21.3% 23.4% 0.0% 0.0% 8.5% 27.7% 0.0% 47
Eli Lilly 10.6% 15.2% 12.1% 9.1% 10.6% 15.2% 22.7% 4.5% 66
GE Healthcare 17.6% 9.8% 15.7% 9.8% 9.8% 2.0% 33.3% 2.0% 51
Gilead Sciences 7.4% 14.8% 6.2% 24.7% 1.2% 2.5% 37.0% 6.2% 81
Janssen Pharmaceuticals 4.0% 5.3% 5.3% 17.3% 8.0% 8.0% 34.7% 17.3% 75
Merck Sharp & Dohme 7.1% 14.3% 17.9% 13.1% 3.6% 1.2% 33.3% 9.5% 84
Pfizer 8.8% 5.9% 7.4% 16.2% 13.2% 4.4% 30.9% 13.2% 68
RFG Average 9.7% 12.1% 11.9% 14.0% 6.6% 5.7% 31.8% 8.3% 30
Total (n) 46 57 56 66 31 27 150 39 472
Most Populous (Rank 1-8) 5 3 4 2 7 8 1 6
Note to Table: The eight linkage categories are: Government agencies (GA); Industry association (IA); Industry peers (IP); Inputs (IN);
Output (OU); Research & development (RD) Specialist service linkages (SS) and Training (TN).
= 59 37% Specialist Services
12. Applying V-LINC to Cork Biopharma
What is the dominant geographic scope for each of the linkage categories?
Distribution of Linkage Categories by Geographic Scope
Geographic Scope Local National European International Total (n)
Government Agencies 30.4% 63.0% 0.0% 6.5% 46
Industry Association 33.3% 35.1% 19.3% 12.3% 57
Industry Peers 50.0% 17.9% 21.4% 10.7% 56
Inputs 27.3% 21.2% 34.8% 16.7% 66
Outputs 6.5% 0.0% 41.9% 51.6% 31
Research & Development 40.7% 44.4% 11.1% 3.7% 27
Specialist Service 58.0% 27.3% 10.7% 4.0% 150
Training 41.0% 38.5% 15.4% 5.1% 39
Percentage 41.9% 29.2% 17.8% 11.0% 100.0%
Total (n) 198 138 84 52 472
Note to Table: International linkages are those linkages with entities beyond the European Union.
This information is used with the perceived significance to assess the linkage categories.
13. Is there a Biopharma Cluster in Cork?
Porter’s Diamond Model of national competitiveness
14. Applying V-LINC to Cork Biopharma
1. Factor Conditions
Figure: Input and Specialist Service Linkages: Local, National, European and International
Local
National
European International
Geographic Scope Local National European International Total (n)
Inputs 27% 21% 35% 17% 66
Specialist Service 58% 27% 11% 4% 150
15. Applying V-LINC to Cork Biopharma
2. Demand Conditions
Figure: European and International Output Linkages
Geographic Scope Local National European International Total (n)
Outputs 6% 0.0% 42% 52% 31
• 94% of output linkages in this study are external to Ireland
• Importance - 100% of European and International linkages in the High and Medium band
16. Applying V-LINC to Cork Biopharma
3. Firm Strategy, Structure and Rivalry
Figure: Local Industry Peer Linkages
Geographic Scope Local National European International Total (n)
Industry Peers 50% 18% 21% 11% 56
• Cork: 50% of Industry Peer linkages in the Low or Tenuous band.
• IP linkages become more important as the geographic level increases.
17. Applying V-LINC to Cork Biopharma
4. Related and Supporting Industries
Figure: Local Industry Association Linkages
Geographic Scope Local National European International Total (n)
Industry Association 33% 36% 19% 12% 57
• Cork: 42% of Industry Association linkages in High and Medium bands.
• National 45% of Industry Association linkages in High and Medium bands.
18. Applying V-LINC to Cork Biopharma
4. Related and Supporting Industries
Figure: Local Research & Development Linkages
No B2B Research Links
in Cork / Ireland
Geographic Scope Local National European International Total (n)
Research & Development 41% 44% 11% 4% 27
• Cork: 91% of R&D linkages in High and Medium bands.
• National: 75% of R&D linkages in High and Medium bands.
19. Applying V-LINC to Cork Biopharma
5. Government
Figure: Local Government Agency Linkages
Geographic Scope Local National European International Total (n)
Government Agencies 30% 63% 0.0% 7% 46
• Cork: 65% of Government Agency Linkages are in the High and Medium bands.
• National: 79% of Government Agency Linkages are in the High and Medium bands
20. Applying V-LINC to Cork Biopharma
The table compares the overall perceived significance of linkages at each geographic scope.
Perceived Significance by Geographic Scope of Linkages
Geographic Scope Local National European International Total (n)
Perceived Significance
High 30 to 40 10.8% 16.3% 24.7% 26.9% 79
Medium 20 to 30 55.2% 55.3% 54.1% 40.4% 252
Low 10 to 20 30.9% 24.1% 18.8% 32.7% 127
Tenuous 1 to 10 3.1% 4.3% 2.4% 0.0% 14
Percentage 41.1% 29.9% 18.0% 11.0% 100.0%
Total (n) 194 141 85 52 472
The results, suggests that local linkages have less business significance to respondent firms
than those linkages developed outside County Cork; perhaps this is due to the limited
autonomy of firms within the respondent group, and their strong ownership and trading
connections internationally.
21. Key Connectors in Cork Biopharma Sector
Key Connector PCI UCC C. Chamber IMB CIT IDA C. County
High 30 to 40 20% 44% 0% 57% 14% 33% 33%
Medium 20 to 30 80% 44% 25% 29% 57% 50% 67%
Low 10 to 20 0% 11% 62% 14% 29% 17% 0%
Tenuous 0 to 10 0% 0% 13% 0% 0% 0% 0%
Total (n) 10 9 8 7 7 6 6
Linkage Category
6 IA, 2 IP,
2 TN 5 RD, 4 TN 6 IA, 2 GA 7 GA 3 RD, 4 TN 6 GA 6 GA
22. A Biopharma Cluster in Cork?
• Biopharma units in Cork compete with
one another for staff to develop better
processes, but compete on a global stage.
• Not primarily local
demand conditions
• 93% EU and INT.
• Some reliance on
local input factors
• IN – 27% local
• SS – 58% local
• A connected local industry – 41% of
linkages are local. Largest proportion of
local linkages in IP 50%, SS 58%, TN 41%.
• Supportive / facilitative
government. 64.3% local
and 78.6% of national GA
linkages are in top two
significance bands
23. Does a Biopharma Cluster Exsist in Cork?
• The authors conclude that there is no Biopharma industry cluster in Cork that accords with
the Porterian model.
• The evidence points more in the direction of a national Biopharma cluster given the large
numbers of local plus national linkages reported in the categories: industry peers, research &
development, training and industry association.
• DJEI (2014, p.20) have set a target to “Build globally competitive clusters and ecosystems for
key sectors, including the appointment of a sector specific Cluster Development Team to
drive the initiative across the system”
• Through understanding the nature, scope and perceived significance of the linkages within
the Biopharma ecosystem in Cork, the researchers can identify actions to strengthen the
sector through Porter type linkages.
24. Policy Recommendations (1)
Develop a Cluster Organisation for the Biopharma Sector in Ireland
The researchers suggest developing a cluster organisation responsible for the Biopharma
industry in Ireland.
The V-LINC analysis and results highlight scope for a cluster organisation to support
interactions and collaborations in the Biopharma sector. Very few industry association
linkages reported in the High perceived significance band (>30 to 40). This recommendation
supports the policy of DJEI (2014, p.20) which suggests that building globally competitive
clusters and ecosystems are essential for Ireland’s economic development.
Figure: National Industry Association Linkages , Cork Biopharma Figure: Local Industry Association Linkages, Cork Biopharma Sector
25. Policy Recommendations (2)
Enhance Indigenous Services Supply
In order to maximise the opportunity of supplying specialist services to Irish based units of
MNCs. Provide mentoring or assistance in strategy and execution to indigenous companies who
already supply MNCs in order to secure and increase their levels of business.
• 85.3% of specialist service linkages, occur in Ireland.
• Further develop the indigenous sector through links with the multinational sector via sub-supply,
outsourcing and collaborative linkages e.g. ‘Dealstart’.
Figure: National Specialist Service Linkages , Cork Biopharma Figure: Local Specialist Service Linkages, Cork Biopharma Sector
26. Policy Recommendations (3)
Incentivise Networking and Collaboration for Research in the Irish Biopharma Sector
A regional financial grant to strengthen research linkages for idea sharing and collaboration. A
successful application would result in the award of a voucher (e.g. €5,000), to cover the costs of
furthering B2B or industry/academic research linkages.
Many supports for research collaboration between industry and academic researchers in the
Biopharma sector in Ireland exist, through current SFI, EI and IDA Ireland programmes.
• 85% of the 27 Research and Development linkages reported are either local or national.
Figure: Local Research & Development Linkages, Cork Biopharma Sector
All local and national R&D linkages are with
academia and only 4 are reported in the
High perceived significance band.
The results suggest that it is difficult for
firms to create meaningful research
connections.
Inspiration can be taken from the co-operation
projects run by Clusterland Upper
Austria.
27. Closing Remarks
The analysis of the Biopharma sector in Cork shows evidence of fledgling research,
development and innovation linkages. Strategically Ireland needs to strengthen and expand the
Biopharma sector in Ireland.
To do so it is imperative that Ireland’s Biopharma MNC
component is linked more vigorously with its growing
indigenous and specialist services sectors.
An IDA and EI supported national cluster organisation
operating out of Cork or Dublin can be effective in
helping to build such B2B linkages.
Cluster programmes and initiatives can help the
Biopharma sector in Ireland leverage more from Horizon
2020 programmes and in terms of the specialist services
firms internationalisation.
28. Other Sectoral Applications of V-LINC
The V-LINC software is being used to analyse 5 local clusters in the Cork region.
Further engagement with 7 clusters across Europe through FP7 projects.
Local Cluster Analysis: International Cluster Analysis:
• Biopharma
• It@cork – European Tech Cluster
• IMERC - Maritime
• Kinsale - Tourism
• WCDP – Agri-Food.
• Be Wiser Project - Paris, Karlsruhe, Barcelona,
Cyprus, Slovenia, Northern Ireland and South
West Region. www.be-wiser.eu
• REMCAP – MSE, Southampton; IMERC, Cork.
www.remcap.eu
29. Potential Future Work Directions
Future developments of V-LINC could support work in the following areas:
Longitudinal Analysis: Global Value Chain Analysis:
• Measure and analyse cluster ecosystem changes.
• Impact of specific policies on linkage development.
Smart Specialisation Network Analysis
• Dr Bernie Fingleton (University of Cambridge)
• Dr Justin Doran (UCC)
• Dominique Foray (École Polytechnique de Lausanne)
• Declan Hughes (Dept. Jobs, Enterprise and Innovation)
• Dr Tim Sturgeon (MIT) & Dr Andrew Reamer (GWU)
• Louis Brennan (Dublin University)
2014 2016
30. Bibliography
• Battelle (2013), The Economic Impact of the US Biopharmaceutical Industry, Prepared by Battelle Technology
Partnership Practice for the Pharmaceutical Research and Manufacturers of America (PhRMA), July: Available online @
http://www.phrma.org.
• Cannon, B. (2014), An Industry perspective on the Biopharma sector in Ireland, presented at National Peer Review
Workshop Smart Specialisation: Moving Forward and Looking Outward, Dublin, 3-4 July 2014.
• DETE (2008), Knowledge and enterprise clusters in Ireland, Technical report, Department of Enterprise Trade and
Employment: Available online @http://www.entemp.ie.
• DJEI (2014), ‘Policy Statement on Foreign Direct Investment in Ireland,’ published by Department of Jobs, Enterprise and
Innovation, 30th July Available online @http://www.enterprise.gov.ie.
• Forfás (2014), Ireland’s RIS3 strategy, presented at National Peer Review Workshop Smart Specialisation: Moving
Forward and Looking Outward, Dublin, 3-4 July 2014.
• Forfás (2012), Report of the Research Prioritisation Steering Group, Available online @http://www.forfas.ie.
• Forfás (2010), Skills in the biopharma - pharmachem sector, technical report, expert group on future skills needs,
Technical report, Available online @http://www.forfas.ie.
• Hobbs, J. (2010), A Framework for the Analysis of Spatial Specialisations of Industry, PhD thesis, Cork Institute of
Technology, Cork.
• Martin, M. (2004), ‘AK pharmaceuticals opens engineering centre of excellence in Ireland’, Minister for Enterprise, Trade
and Employment, Micheál Martin, T.D. speaking at the official opening ceremony of AK Pharmaceuticals on the 8th of
October.
• Porter, M. E. (1998), On Competition, Harvard Business School Press.
• Riordan, M. (2008), ‘Valuable opportunity for linkages with United States’, Radio Interview with County Manager of
Cork County Council Martin Riordan. Red FM on the 23rd of June.
31. Dr John Hobbs,
European Projects Research Unit, Department of Management and Enterprise,
Cork Institute of Technology. Rossa Avenue, Bishopstown, Cork.
Mobile: 00353 86 8091294 Office: 00353 21 4335149
Email: john.hobbs@cit.ie Skype: jhobbs.cit
Mr Eoin Byrne,
European Projects Research Unit, Department of Management and Enterprise,
Cork Institute of Technology. Rossa Avenue, Bishopstown, Cork.
Mobile: 00353 86 0719451 Office: 00353 21 4335056
Email: eoin.byrne@mycit.ie Skype: eoin.byrne881
Editor's Notes
Table 1 lists the firms who participated in the V-LINC analysis. It provides the percentage of linkages they report in each of the eight linkage categories along with the total number of linkages they engage in. This table allows the researcher to distinguish the total numbers of linkages per category for the cluster being examined.
Table 1 report’s that the most frequent linkages are in outputs which account for 24.8% of linkages reported; this is followed by specialist service linkages (19.8%).
70% of linkages are contained within 4 categories; outputs, specialist services, inputs and industry associations; each of these categories contain more than 10% of the 572 linkages reported.
The least frequent linkages are those with government agencies, making up only 7%, although research and development and industry peer linkages were comparably low with 7.2% and 7.5% respectively.
Many of the large companies and MNCs reported more linkages than SMEs. EMC had the most numerous linkages, reporting 94 in total, and is the largest employer in the RFG and the region.
Only 8.6% of linkages in Inputs and 90% of Inputs in the High and Medium bands.
Only 5% of linkages in Specialist Services and 73% of Specialist Services in the High and Medium bands.
IP linkages become more important as the geographic level increases; 10% local, 14% national, 83% EU and 100% international linkages are in High and Medium band.