Sciencebased innovation:

1
Kharkiv Technologies International
WorkshopTechnology Transfer and Innovation
Support NetworksInternational Experience and
Prospects for Ukraine.

• Science-based innovation
• International experiences and EC projects for
  Ukraine
• Prof Ivan Samson
• Grenoble University
• EC project Team Leader

Kharkov, September 3-4, 2008
2
Contents

• 1-Science-based innovation
• 2 - The EU experiences of Science Parks
  (Saxenian, Bengston Lind)
• 3-The American experiences of Science cities
  (Etzkowitz)
• 4 - Russian success story St. Petersburgs
  software cluster
• 5 Local governments and the Triple Helix model
  of Etzkovitz and Leydesdorff
• 6 The EU support to innovation in Ukraine

3
1-Science-based innovation
4
The three factors of innovation performance

• According to experts, the key of innovation and
  competitiveness is in the combination of three
  factors (Peter Nijkamp)
• Knowledge the macro-factors of education and RD
  policies, as well as the micro-factors of skill
  training and the ability to learn and accumulate
  collective know-how in organisations
• Entrepreneurship linked to knowledge the point
  is not only to have good scientists, but good
  entrepreneurs able to take risks and became
  agents of change
• Favorable environment as innovation-friendly
  culture and institutional arrangements and
  infrastructure
• Ukraine has knowledge, but entrepreneurs and
  environment?

5
The two sources of innovation

• The world practice shows two ways of generating
  innovations
• Research/supply driven innovation originating in
  the laboratories of the academic institutions and
  large industry organisation, and then channelling
  into development departments and manufacturing
  activities, as well as small high-tech start-ups
  quite often born from spin-offs of large
  companies or research centres
• Demand/consumer driven innovation originating
  both in marketing departments of large companies
  as well as in the day-to-day activity of SMEs.

6

• The key problem of this way of generating
  high-tech production is transmission of
  innovations or technology transfer from science
  to production.
• The technology transfer was administratively
  ensured in FSU within large complex merging
  Science centres and large industries.
• Today these complex are no longer working because
  of cuts in budget spendings and industry
  privatisation and restructuring.
• The challenge for Ukraine is to rebuild the chain
  from science to industry

7
Two main world trends in technology transfer
clusters and technology networks

• These forms are both means of communication
  between Research and Production as well as
  interactions between firms.
• Clusters are rather typical of EU and networks
  are well developed in the USA, but both forms are
  more or less developed everywhere.
• The main difference is that clusters are
  geographical agglomerations of research and
  productive units, when networks rely mainly on
  distance connections between the units.

8

• The clusters are competitive because of the
  externalities (product inputs, knowledge,
  economies of scales, cooperations in problem
  solving) they provide, and there are innovative
  thanks to the variety of the units and the
  density of interactions
• they perform specially in the transfers of tacit
  knowledge (discoveries, know-how) that require
  face-to-face interactions, as well as in
  synergies, spin-offs and technology spill-overs
• Technology networks are competitive because they
  are based on top up-to-date discoveries and
  innovations, they gather the best codified
  knowledge in the world and still some less
  codified knowledge, and they provide the
  participants the resources of several
  territories
• The strength of the cluster is based on the
  agglomeration and concentration effects as well
  as in the community created by its long history
• the strength of the network is its plasticity and
  flexibility enabling worldwide permanent updates.

9

• 2 - The EU experiences of Science Parks
  (Saxenian, Bengston Lind)

10

• In many European countries the setting up of
  science or technology parks is an important
  strategy in creating territorial attractiveness
  and advantage.
• Generally these are seen as growth engines
  spurring economic growth not only in the park
  itself but also in the region where the science
  park is located.
• Three of the most interesting cases of science
  and technology parks are the pioneering parks in
  Great Britain, Cambridge Science Park in France,
  ZIRST Grenoble and in Sweden, Ideon Science Park,
  Lund (ISD).
• The three cases present striking similarities
  related to the start of science parks and
  subsequent growth of high-tech activity in the
  regional areas.
• In the 1970s Cambridge was a typical British
  university town with virtually no industry,
  Grenoble was an industry town with strong applied
  research centres and Lund was a university town
  with some industry.
• Grenoble had well developed relations between
  industry and academia, while in Cambridge and
  Lund the relations were few and weak. Despite
  these differences high-tech activity emerged at
  similar times in a unique local dynamic
  environment.

11

• In terms of university industry interaction Lund
  resembled the Cambridge situation, with a lacking
  tradition of industry-university relationships.
  Instead, both places had strong traditional
  academic values. The relations between industry
  and higher education had long traditions in the
  area and were considered to be a part of the
  local identity in Grenoble.
• In Cambridge influential scientists at key
  colleges, well acquainted with experiences at MIT
  and Stanford in the US, were the key drivers of
  the process.
• In Grenoble, local government politicians with a
  background in science and research, a few local
  industry managers and research institute
  directors played key roles in establishing the
  first science park.
• In both Grenoble and Cambridge the first
  businesses to localise in the parks were
  primarily spin-offs from established companies in
  computer and electronics.
• In Lund it is very uncommon for researchers and
  scientists to be involved in local government as
  politicians. In Grenoble, local government
  politicians acted as relational entrepreneurs
  with good relations to academia, the political
  system and industry.

12

• Thus the development of the process depends both
  on the available local resources and on
  initiatives of local actors.
• The major challenge in Lund was to create a new
  vision of a high-tech innovation system (frame
  breaking) and to relate actors from the
  university, industry and the political system
  with each other.
• These activities and roles could be related to
  the first step, creating a community of interest
  in Saxenians model of a new regional innovation
  system.
• The science park experience has specifically
  highlighted the importance of certain individuals
  in this first part of the process that is the
  role of the relational entrepreneurs.
• They all had prior experience or good contacts
  with all three types of actors the university,
  the industry and the political system.

13
3-The American experiences of Science cities
(Etzkowitz)
14

• The two leading U.S. high-tech regions, Route 128
  and Silicon Valley, were built on Brownfield
  and Greenfield sites.
• Drawing upon academic, business and government
  resources, a coalition of New England academic
  institutions and financial interests created a
  new model of regional economic development in the
  early post-war.
• Follow-on regions typically identify successful
  models and adapt them to meet their needs.
• Thus, the venture capital model was transferred
  from Boston to northern California to expand firm
  formation activity in the emerging semi-conductor
  industry.
• Silicon Valley, based on a flat network
  structure, is currently being transformed into a
  planetary system of strong entities with
  satellites

15

• How did these two strongly contrasting regions
  develop as the leading centres of science-based
  industry in the U.S. in subsequent decades?
• A simple answer is the presence of MIT and
  Stanford. While these two universities played an
  important role in transforming their regions it
  was not the university by itself that made the
  difference.
• The emergence of polyvalent research fields with
  simultaneous theoretical, technological and
  commercial potential provides a substrate for the
  growth of science based clusters.

16

• The strategy that evolved was based on a
  synthesis of university-business-government
  elements into a venture capital instrument
  government changing investment rules the
  university providing technology, human resources
  and capital to form new firms and business
  providing capital and legitimation to the new
  venture entity.
• Immediately after the war, Compton organized a
  consortium of universities, investment banks and
  insurance companies to found the first venture
  capital firm, American Research and Development
  (ARD) through sale of equity (stock) in the firm.
  

17

• Basic component of American model is an
  entrepreneurial university that rests on four
  pillars
• (1) legal control over academic resources,
  including physical property in university lands
  and buildings and intellectual property emanating
  from research
• (2) organizational capacity to transfer
  technology through patenting, licensing and
  incubation
• (3) an entrepreneurial ethos among
  administrators, faculty and students and
• (4) academic leadership able to formulate and
  implement a strategic vision.

18
4 - Russian success story St. Petersburgs
software cluster
19

• The growth rate of Russian software exports were
  about 40 and 30 in 2004 and 2005 respectively,
  in 2006 they increased by almost 54 and
  accounted for approximately 1.5 billion, which
  makes Russia the third largest player in the
  global outsourcing market, just after India and
  China.
• Since 1991 many former scientific workers,
  university professors and graduates have founded
  the first enterprises specialized in the SaS
  (software as service).
• At the time, the economic context characterized
  by the political and economic instability in
  Russia forced these pioneers to work exclusively
  for the Western clients. This openness with the
  regards to the global market enabled the constant
  knowledge flow between the worlds high tech
  centres, especially with the Silicon Valley.
  Moreover, this process was reinforced thank to
  the movement of the Russian diaspora.

20

• In 1999 several St. Petersburgs software firms
  created the first Association FortRoss in order
  to promote St. Petersburgs software sector
  abroad and to construct an image of a country
  specialized in the high-end outsourcing. the
  foundation of Fort Ross (RUSSOFT) became the
  turning point in the development of the cluster
  and the whole Russian software sector.
• Today there are about 150-200 software
  enterprises in St. Petersburg. Among these
  companies there are a dozen large firms employing
  approximately 400 programmers.
• Since 2000 St. Petersburg has become a well known
  cluster not only thanks to its local companies
  (Arcadia, Digital Design, eVelopers, Lanit
  Tercom, Reksoft, SJ Labs), but also due to the
  research centers of multinational companies such
  as Siemens, LG, Alcatel, Motorola, Sun
  Microsystems, Intel, Google, HP.

21

• Moreover, today the city hosts the Special
  Innovative Economic Zones and several IT parks
  established by the local universities.
• Thus, the city proved to be not only the
  attractive software outsourcing destination in
  terms of the cost reduction, but progressively
  evolved into developed software cluster highly
  integrated in the global value chain with a
  complex network articulating industry,
  universities and the State.

22
5 Local governments and the Triple Helix model
ofof Etzkovitz and Leydesdorff
23

• Derived from the Boston regional organizing
  experience in the 1930s and 40s, the triple
  helix model University-Industry-Government
  comprises three basic elements
• first, a more prominent role for the university
  in innovation
• second, a movement toward collaborative
  relationships among the three major institutional
  spheres in which innovation policy is
  increasingly an outcome of interaction among
  university, industry and government
• thirdly, in addition to fulfilling their
  traditional functions, each institutional sphere
  also takes the role of the other Thus, academia
  is a source of firm-formation in addition to its
  traditional role as a provider of trained persons
  and research. Government helps to support the new
  developments through changes in the regulatory
  environment, tax incentives and provision of
  public venture capital. Industry takes the role
  of the university in developing training and
  research, often at the same high level as
  universities.

24

• In recent decades, government has played an
  entrepreneurial role, revising the rules for
  interaction among the institutional spheres. For
  example, in the U.S. in 1980, and more recently
  in Japan and Denmark, government has transferred
  the intellectual property rights, deriving from
  its research funding, to universities in order to
  incentivize entrepreneurial behaviour.
• The model was expanded through analysis of areas
  where the role of one sphere in innovation,
  either predominated or was lacking, such as the
  State in Eastern Europe before and after the
  Berlin Wall. Too much, or too little, government
  impeded innovation.
• As the economic implications of research arise
  ever closer in time to the making of a discovery,
  the location of research becomes a political
  issue with regional relevance. Regions with
  extensive research resources conflict with those
  that wish to develop similar strengths, creating
  pressures to expand research funding.

25

• Academic advance and regional growth are mutually
  supportive goals. The need to periodically renew
  the technological capabilities of a region leads
  government, as well as companies and universities
  themselves, to explore ways for knowledge
  producing institutions to make a greater
  contribution to the economy and society.
• This opens the way to a more elaborated view of
  the process creating a high-tech regional
  innovation system. There are also individuals and
  organisations that have showed institutional
  leadership in terms of envisioning a new
  innovation system in the region and have worked
  hard to create the right conditions for this
  process to unfold.
• Local government as relational entrepreneurs make
  more than adapting the rules their proximity
  with actors make them unique actors capable to
  combine science an business. This opens the way
  to the decentralisation of innovation policy in
  creating regional or local innovation systems

26
6 The EU support to innovation in Ukraine
27

• The Cabinet of Ministers of Ukraine adopted the
  Resolution ? 447 of May 14, 2008 STATE PRINCIPAL
  ECONOMIC PROGRAMME Foundation of Innovative
  Infrastructure in Ukraine for 2009 2013
• This means the relaunching of efforts started in
  1999
• Current competitiveness of the economy rests on
  energy and material intensive sectors
• This economic specialisation neither ensures a
  sustainable growth to the country
• nor corresponds to its intellectual resources
  that represented almost 25 of FSU human capital

28
The EC supports projects to science and
innovation in Ukraine

• The 2006 Tacis National Action Programme (NAP)
  included a large envelope for projects on
  research and innovation
• Our team has to design, in coordination with
  major local stakeholders and EC, the concrete
  projects that will be put in tender process in
  2009 and implemented until end 2011
• The wokshop of Kharkov is a key moment for
  identifying the main obstacles to innovation ,
  the ways to overcome them and the first outlines
  of possible projects
• Direct beneficiaries and detailed project ToR
  will be identified in September and October

29
Four key issues

• We have identified four major issues where
  precise projects are likely to bring concrete
  progress
• The regulation and the legal environment for
  Research and Innovation in Ukraine
• Science based innovation and technology transfers
• The financial support to Research and Innovation
  in Ukraine
• The support to innovative SME and transnational
  networks
• and EDUCATION !

30

• In each key issue, one project providing EU and
  local technical assistance will develop a new
  mechanism or institution on a pilot basis showing
  policy makers and other stakeholders what could
  be successful
• The EU projects will bring concrete means such as
  expertise, networking, study tours, training,
  capacity building
• The design of the projects to be implemented
  before end 2011, with definition of components
  and of concrete outputs, will come out from the
  mix of our know how and YOUR suggestions !!