creating regional wealth in the innovation economy american university – kogod – nov 2002 jeff...
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Creating Regional Wealth in the Innovation Economy
American University – Kogod –
Nov 2002
Jeff Saperstein and Daniel [email protected] and [email protected]
Creating Regional Wealth 3 Years of Research
• Project teams in Regions : 12 teams• Bibliography : 150 key articles and 30 books• Face to face interviews as possible : 85 meetings
with 115 persons in 15 countries• Format that enabled us to be consistent yet true
to local flavor • Factors selected by region to highlight local
dynamics yet eliminate redundancy• Emphasis on perspectives
www.creatingregionalwealth.comwww.creatingregionalwealth.com
Our Web Site
Part 1. Presentation
4. Israel Wadi Valley5. Grenoble &
Sophia Antipolis
3 Key Ingredients
1.Introduction
2.Key Topics
Part 2. Discussion
Kogod- Escp-Eap Cooperation
ModelsPerspective
Best practices
Questions &
Comments
1. IntroductionST Microelectronics Challenges
A proper framework so that innovation
and creativity are assured, not a
question of luck
Create a culture which enables
disruptive break through as well as sustained
innovation
Create an Open-Minded culture. One where
innovation and creativity are for everyone, not just products, not just R & D
Be Superiorly Innovative
and Creative
New Business Models ST Microelectronics
Understand how the world of semiconductors is changing
Understand how the arrival of new business models and paradigms threatens us, and learn how we can respond
Understand how the arrival of new business models and paradigms opens up new opportunities for us
Be strategically and commercially nimble, flexible and responsive
Where is the RIGHT place to BE ?
Intellectual Capital of Regions
.
“Clusters are a Driving Force in increasing exports
and are Magnets for attracting Foreign Investment”
Feb 2000 Economic development Quartely Vol 14 p.15
“Clusters are a Driving Force in increasing exports
and are Magnets for attracting Foreign Investment”
Feb 2000 Economic development Quartely Vol 14 p.15
CClusters Michael lusters Michael Porter*Porter*
CClusters Michael Porter lusters Michael Porter DefinitionDefinition
Clusters are concentrations of highly specialized skills and knowledge, institutions, rivals, related businesses, and sophisticated customers in a particular nation or region.
CClusters Michael Porter lusters Michael Porter DefinitionDefinition
Proximity in geographic, cultural and institutional terms allows special access, special relationships, better information, powerful incentives, and other advantages in productivity and productivity growth that are difficult to tap from a distance.
As a result in a cluster, the whole is greater than the sum of the parts.
Were is the Right Place to be ?
Silicon Valley or Death Valley ? • Baby Cluster : Atlas valley
• Babel Cluster : Sophia Antipolis• Island Cluster : Wadi Valley (Israël)
• Magnet Cluster : Silicon Valley
• Network Cluster : Bengalore
2. Creating Regional WealthKey Topics
• Principles and Practices enabling Regions to adapt to Innovation Economy
• How can Regions Plug into Innovation Economy with their own particular Strengths ?
• How can Foreign Investment be attracted and businesses plug into successful regions ?
Regional Wealth CreationKey topics
How to Survive as a Cluster ?
How to Create a Regional Center
of Excellence ?
High Tech Cluster War : How to attract Investors?
Regions Selected Gold Medalists and Others
Sophia AntipolisTaiwanIsraëlIndia
ModelsPerspective
Best practices
Silicon Valley
Ireland
Munich
Cambridge
3. Creating or Destroying Value ?Key Ingredients For Success
• # 1 Cross Fertilisation
• # 2 Coopetition
• # 3 Pollinisation
• # 4 Innovation
• # 5 Incubation
Creating Regional ValueKey Ingredients for Success
# 6 . A Champion - Networker# 7 . “Magic Atmosphere”# 8 . No NIH “Not Invented Here” # 9 . Knowledge Transfer# 10. Diasporas Culture
Key Ingredients# 11. Education Investment
• Priority for Governments
Major Universities
Regional Technical Colleges
Research Institutions
Technology Parks
# 12 . Convergence of Societal Institutions
• Working Together for a Region to SucceedGovernment at all levels
NGO’s and educational institutions
Industry and labor
Venture Capital and Markets
Permeable collaboration has huge implications for individual career choices
#13 . Risk and Chutzpah !
• Entrepreneurial risk must be rewarded and encouraged for individuals
Stock options and Open Capital Markets
Environment that does not penalize failure
# 14.Branding & Distinctive Competencies
• Successful Regions have staked out important distinctive competencies
Leverage Regional Strengths
Do not replicate Silicon Valley
#15.Flexibilty & Regional Evolution
• There is an evolution to regional success and working up the value chainLow-cost manufacturing and service centers
evolve to high end sophisticated regions
Regional integration between high end and low end is encouraging (Taiwan--China)
Transnational diasporas are great catalysts for regional development
For much of the world, poverty, ignorance, and societal dysfunction has led many to despair, anger and fanaticism as the only way to attain human dignity. Perhaps the promise of Creating Regional Wealth in the Innovation Economy will provide another way for the benefit of all.
There are presently in Israel:
about 1,000 mature technology companies 2,000 startups 320 startups in which venture and private
funds have invested
Immigration of a highly skilled workforce from the former USSR : 55% have more than 13 years of education
Conversion of military technology into commercial successes
4. Wadi Valley
Number of employees engaged in R&D/10,000 employees
0 50 100 150
UNITED STATES
JAPAN
GERMANY
CANADA
SWITZERLAND
TAIWAN
UNITED KINGDOM
SOUTH KOREA
IRELAND
SINGAPORE
145ISRAEL
Food7% Machinery
8%
Textiles10%
Chemicals20%
High-Tech22%
Other33%
Exports in 1991
Total Export: $7.7 bn
Chemicals
43%
Food4%
Machinery6%
Textiles5%
19%
High-Tech
Other23%
Exports in 2001
Total Export: $20
bn
Israeli-based VCs and Startups
From 3 VC funds in 1993 to more than 100 funds (2002)
Over $5 billion invested in technology companies last 5 years
Multinational presence in Israel
Through R&D and production facilities : Intel, Microsoft (their only R&D center outside
USA), IBM, Motorola, DEC(COMPAQ), Analog Devices, Rockwell, EMC, 3M. ADC Telecom, AOL, BAAN, BMC, Broadcom, Cisco, Compaq, Conexant, Fujitsu, GE Medical, Intel, Johnson & Johnson, etc.
Through investment in Israeli companies : Daimler-Benz, Siemens, America On-line, US
Robotics, Applied Material, Sumitomo, Boston Scientific, 3 COM, J&J, Terayon, Marconi, Motorola, Nortel Networks etc.
Interest from Multinational Players
High Tech Clusters France-Israel Cooperation Potential
Smart Card & Security
Software
Biotechnology
Wireless
Medical Instrumentation
Other possible areasof R&D cooperation
Sector Sub-Sector
1
2
3
4
5
Data / Network security, Contactlesstechnologies, Reading Terminals
Internet, Data Transmission and DataManagement, Network Security, Mutimedia, Engineering softwares
Bio-therapeutic drugs, Diagnostic techno-logies, Bioinformatics, Bioanotechnologies, Stem Cells, Proteomics, Pharmacogenomics
Diagnostic Technologies, Telemedicine,Surgical Devices, Medical Softwares,Medical Imaging
Opto-electronics, Call Centers, Semi-conductors, Electronics, Plastics & Rubber, Aerospace technologies
Fixed broadband technologies, MultimediaMessaging, Voice Transmission, IntelligentAntennas
SMART CARD AND SECURITY
Companies interviewed
France Israël
Axiome Technologies
Kasys
SMART CARD AND SECURITY
We have identified the following opportunities
France-Israeltechnological niches
• Encryption• Electronic Signature• Authentication• Biometrics• Contactless• Reading terminals
Entreprises France (< 1000 employés)
Ask , Datacard Group, Astria, Atos Origin, Cyber-Comm, Verifone, Activcard Europe, Elva, Xiring, Tronic’s Microsystems, Neurocom, Cyber Networks, Kasys, Rapsodia Software, Trapinex, BG Ingénierie, Card.Dev, Rovip Industrie, Sokymat Identification, Atlantic Zeiser,Logfi, Moneyline, Transworld Payment, Solutions, EDSI, Silicomp, Trusted Logic, Trusted Logic, Mercury Technologies.
Entreprises Israël (< 1000 employés)
• OTI - On Track Innovations• Transway• Comsense• Ordacard• Power paper• Electronics Line• Samco Corporation• Scsquare Ltd, • Secure2net, Adamtech, Metaform Ltd
SOFTWARE
FRANCE ISRAEL
Magic Software Enterprises
Click Software
AvivD.I.E.S
Companies interviewed
• Medium Term– Internet– Data Management– Multimedia– Network Security
• Long term– Image Processing
Entreprises France (< 1000 employés)
Ausy, Ares SSII, Fininfor Progiciels et Systèmes, Titus Interactive, Ilog, Groupe Sinorg, Prologue Software, BVRP Software, Mediagerance, Linedate Services, GL Trade, Cryo Interactive, Kalisto Entertainment, Algoriel, Consort NT, Médiascience, Esker, Cohéris Atix, Tracing Server, IGE+XIAO, Pharmagest InterActive, Infovista, Generix, Dalet, ARI, IT Link, R2i Santé, Itesoft, Conexant, Infogrames, etc.
Entreprises Israël (< 1000 employés)
Check Point Software, Magic Software Enterprises, Sapiens International, Retalix, Crystal Systems Solutions, Contahal, BackWeb Technologies, ClickSoftware Technologies, Mind CTI, e-SIM, Testnet Software Testing, Top Image Systems, Arel Communications & Software, Multimedia K.I.D., Marnetics Broadband Technologies, Emblazes Systems, SEA Multimedia, etc.
SOFTWARE
We have identified the following opportunities
France-Israeltechnological niches
France Israël
XTL Omrix
Origenix Biotechnology General
D-Pharm Mind Sense Vivalis
IDM
BIOTECHNOLOGY
Companies interviewed
• Medium term– Diagnostic technologies– Therapeutic Drugs
• Long term– Bioinformatics– BioNanotechnologies– Stem Cells– Génomics, Post-Génomics– Protéomics
Entreprises France (< 1000 employés)
Transgene, Cerep, Synt:em, Genset, Hybrigenics, Genfit, GenOdyssée, Exonhit, ValiGen, Flamel Technologies, Biovector Therapeutics, Nicox, Meristem Therapeutics, Genoway, Gentech, Vivalis, Proteus Pharma, Entomed, Neuro-3D, Appligene, Chemunex, IDM, BIP, Cellectis SA, Cellpep SA, Centre d'Immunologie Pierre Fabre, Génopoïétic, MERISTEM Therapeutics, etc.
Entreprises Israël (< 1000 employés)
• Bio-Technology General • Compugen• Healthcare Technologies• XTL Biopharmaceuticals• Keryx Biopharmaceuticals Inc.• Orgenix, Pharmos• D-Pharm• Omrix• Biotechnology General• Mind Sense
BIOTECHNOLOGY
We have identified the following opportunities
France-Israeltechnological niches
Biotechnology
In this field, cooperation is vital. Companies have to cooperate with each other, with research institutions and with universities. They also have to cooperate with pharma companies.
The time available for a biotech company to achieve critical mass is continually shortening and the definition of critical mass is continually increasing.
Biotech companies need to run faster and jump higher than ever before.
France Israël
Shiron Satellites
Locationnet
Algotech
Optiway
WIRELESS
Companies interviewed
• Fixed Broadband Technologies• Multimedia Messaging• Voice Technologies• Intelligent Antennas
Entreprises France (< 1000 employés)
• IB Group• Genesys • Coriolis Telecom• Siris• Com 1 • NET2S• Western Telecom Phone Systems &
Network
Entreprises Israël (< 1000 employés)
• Siris• Mentergy• Orckit Communications • Walla! Communication• Ectel• Nexus Telocation Systems• MER Telemanagement Solutions• Eurocom Communications• Alvarion
WIRELESS
We have identified the following opportunities
France-Israeltechnological niches
MEDICAL INSTRUMENTATION
Companies interviewed
France Israël
Laboratoire Aguettant
5. Grenoble
•A high-tech hub: Digital, IT, micro&nanotechnologies•Mission: No 1 in Europe for micro&nanotechnologies•Influence by local environment and tradition•Entrepreneurial spirit: spin-offs, self-sufficiency
Sophia Antipolis
•Telecom Valley brand•« California in Europe »•R&D, inter-disciplinarity, cross-fertilization
Grenoble
History of hydroelectric power & atomic energy Isolated environment but market exists A pioneering and self-sufficient spirit.
4 renowned universities including the INPG“Communication exchange” between
universities, research laboratories & industry
20 year history of spin-offs, entrepreneurshipCentre d’ Energie Atomique (CEA): key player
Local hero: Louis NEEL
Technology Transfer between research and industry
“Micro & Nano-Technology House”: FF 790 million
Aim: no. 1 in Europe for Micro & Nano Technology
Informal network
Local Culture
Spin-off creation
Future Strategy
Challenges and problems for Grenoble“to stay competitive and to attract multinationals”
•Regional Infrastructure factors: no TGV from Lyon, isolation.Competition: Lyon & Sophia-Antipolis are in the same region.
•National Brittany, Lorraine, Paris and Sophia-Antipolis are national competitors for high-tech development.
•International Grenoble is not a major European city. In competition with Munich, Dublin, Barcelona and Stockholm.
Role of Government in Grenoble
Regional and local governments
Intellectual capital
1900+ 1950s 1970s 2000+
Research and atomic energy
Microelectronics and high-tech
Micro & Nano technology
Hydro-electric power
National Government
Scienceparks
CEA Decentral-ization 1982
Spin-offs
Incubators
Government
Isolation
pioneering spirit
self-sufficiency
Physical E
nvironment
Alps, Ita
ly, Germ
any,
Switzerla
nd
Regional organisations
AEPI, CCIG
Traditional
Industry 1950s
Hydro & atomic energy
Local Hero:Louis NEEL
INPG9 engineering
schools
4 Universities2 business schools
ZIRSTSpin-offs
20 yrs
State-funded research labs
CEALeti INRIA
« Informal Network »
Industry:dynamic companies
Grenoble« spin-off slopes »
Intellectual capital
ideas
Technological know-how
entrepreurship
Inspiration
Informal business network
creativity
Pioneering spirit
International tourismfor 2 centuriesRich Region
International Infrastructure and Population
BUT high unemployment stronghold of the FN
Sophia as ISLAND
Lifestyle Inspiration
R&D
Innovation
Sophia Antipolis
History: painters & writers
Co-opetition and Networking
International village character: all key people know each other
Big companies:
Common need & competition
CO-OPETITION
Network of high tech companies, research bodies educational establishments and other interested parties
Attracting & leveraging skillsrecruitment, partnership with
education
Promoting the brand & locationco-opetition with traditional local
industry and local government: M-tourism
10 years
THE BRAND
Critical Mass
The Main Challenges
Skills• Marketing, business, IT and engineering• Cross disciplinary
Infrastructure• Growth in step with Sophia Antipolis expansion
Government• appreciation and support of high-tech
Co-opetition • ever closer co-opetition between all the parties on these issues
SUCCESSCONFIDENCE
EXPERIENCESUCCESS
ICROSS
FERTILIZATION
?
Entrepreneurial spirit
INRIA: since 1983 in Sophia Antipolis•No entrepreneurial spirit at the time•« Learn through experience and a network »•Failure: researchers can return to their posts
Motivation•«for the benefit of the French nation »•To defend the interests of France against those of competing countries such as US•Not so much personal wealth creation
RESEARCH
EDUCATION
COMPANIES
Education & Research
UNSA, ISIA, INRIA, ENSBA, CNRS, Institut Eurocom
CAMPUS S.T.I.C.
SAN
Associations
PERSAN, Telecom Valley, database forum, Club des dirigeants, Club
HiTech
PA
RTN
ER
S
Cross Fertilization
