SSTI Digest

Three major announcements were made in Singapore last month focusing on R&D of new technologies and educating the workforce to produce specialized graduates in upcoming fields.

 

Development plans for Asia’s first zero-energy building (ZEB) were released by the Parliamentary Secretary for National Development. The Building and Construction Authority (BCA) will retrofit an existing building that will both house classrooms and offices and serve as a testbed for green technology research. Slated for completion in 2009, the ZEB is expected to be 60 percent more energy efficient than an average commercial building. The building will create a highly efficient complex that produces as much energy as it consumes from renewable resources.

 

The National University of Singapore will use the facilities for testing technologies that come out of the university’s research laboratories. The project is jointly funded by the Ministry of National Development and the MND Research Fund for the Built Environment. The BCA also is stepping up its efforts in industry training and will offer a new Diploma program next year in mechanical engineering, with an emphasis on green building technologies, according to a BCA press release. More information is available from the BCA at http://www.bca.gov.sg/.

 

Two private industry partnerships also were among the announcements in Singapore last month. In collaboration with Singapore institutes of higher education, IBM Corporation will offer a new multidisciplinary research and academic track through Singapore’s universities. The Service Science, Management and Engineering (SSME) discipline integrates aspects of computer science, operations research, engineering, management sciences, business strategy, social and cognitive sciences, and legal sciences.

 

SSME graduates will likely enter the field as solution designers, consultants, engineers, scientists and managers. With employment projections expected to be concentrated in the service-providing sector of the economy, the goal is to make productivity, quality, sustainability, learning rates and innovation rates more predictable across this sector, according to IBM. Further details regarding curriculum will be announced by the participating universities in March. More information on the SSME discipline is available from IBM at http://www.ibm.com/university/ssme.

 

Finally, Indiana-based Hillenbrand Industries Inc., specializing in medical technologies, recently announced that Singapore will be the site of its Asia-Pacific Innovation Center. The center will focus on R&D projects for global applications and will become a center of excellence for microelectronics embedded in software products. Singapore’s increasingly knowledge-based economy, technical talent and sophisticated healthcare institutions were cited as factors in the decision process. The announcement is available at: http://ir.hillenbrand.com/releasedetail.cfm?ReleaseID=276277

The theory of spatial clustering has been very popular in the TBED field for many years, as researchers attempt to explain the transformation of places like Silicon Valley and the reasons various locales are economically competitive. Practitioners have utilized the theory as a method to describe their own state and regional economies and to support the development of specific industries. As an industry cluster grows, additional benefits of agglomeration are realized.

 

These benefits include the creation of a localized skilled pool of labor, saving funds from sharing infrastructure and reduced costs of transactions, and knowledge spillovers which create more rapid sharing of information across an industry. The geographic reach of clusters, a subject still under investigation by the research community, sometimes varies by size depending who is using the term. In some studies, clusters are at the state level, while others cluster studies are limited to the regional or even neighborhood level.

 

Depending on the industry, certain benefits to co-location exist. But can these benefits of co-location be applied to the various organizations that push TBED for a particular location? Are there substantial agglomeration benefits to placing many of a state’s or region’s TBED players into one building or within the same block?

 

SSTI has selected three case studies where a number of a geographical area’s TBED communities are physically coming together. And just like industrial clusters, as more and more organizations are drawn to a central point, the cluster becomes larger.

 

Georgia Tech’s mixed-use, multi-building Technology Square is a $400 million campus expansion that helps to fulfill the research, academic, continuing education and government needs for the university and the state of Georgia. Formally opened in October 2003, Technology Square contains the school’s College of Management, the Georgia Tech Hotel and Conference Center, the Georgia Electronic Design Center, and the Enterprise Innovation Institute – the parent organization of Georgia Tech’s industrial extension services, VentureLab, and ATDC, the university’s technology incubator. As start-up businesses graduate from Georgia Tech’s incubator, they relocate into Technology Square along with other technology firms, as interest exists in possible collaborations with faculty, other companies, and employable students. Equity investment firms and utility companies also are present in the development.

 

Besides having all of these components adding to the entrepreneurial environment, Technology Square contains the largest concentration of economic development agencies in the southeastern U.S. and possibly the nation, according to Georgia Tech’s Vice Provost, Wayne Hodges. Since its construction, the Georgia Department of Economic Development, the Georgia Department of Technical and Adult Education, the Georgia Economic Developers Association, and other technology associations have joined ATDC and its incubating and graduated companies inside a single building within Tech Square. The proximity allows for increased communication and collaboration between departments and organizations and is rapidly becoming the hub for the technology community of Atlanta, if not all of Georgia.

 

A similar project has taken root in the Discovery District of downtown Toronto. The MaRS Centre is a 700,000-square-foot complex home to 70 organizations, including several hospitals, venture capital and other equity financing organizations, provincial institutions, economic development organizations and start-up companies. Opened in May 2005, the MaRS Centre combines the renovated site of the Toronto General Hospital (where insulin was discovered in the early 1920s) with new buildings constructed for wetlab and office space. Designed as an “innovation convergence centre” where investment and capital, scientific research and entrepreneurship combine, the MaRS Centre deals primarily in biomedical and life science discoveries, but is quickly moving to new areas of research such as nanotechnology and materials science.

 

How does design factor into the success of MaRS? For an example, hallways connecting the office and laboratory space were constructed so that employees could be seen from public spaces such as an enclosed central atrium. Visually, this kinetic movement improves the sense that the complex is alive with activity. Furniture within the complex is set on wheels to allow mobility and flexibility, and within the incubator space, small rooms have been minimized which has the effect of more groups assembling in public spaces. Employees also cluster in a central food court area, which includes commercial space for banks and other services. Plans were released this year detailing the Phase II construction of the MaRS Centre, which will add 900,000 sq. ft. of office and laboratory space by 2010.

 

But not all TBED clusters have to be on the magnitude of Technology Square or MaRS. The Advance Colorado Center (ACC) has collocated eight entities within one floor in downtown Denver. Formed as a nonprofit incubator for economic development organizations in 2004, the ACC provides a common headquarters and logistical support for TBED groups and other organizations promoting growth in the state. Tenants include the Colorado BioScience Association, the Colorado Nanotechnology Alliance, the Colorado Association for Manufacturing and Technology, the Colorado Photonics Industry Association, Connected Organizations for a Responsible Economy, CSIA, the Colorado Film Commission, and CTEK. Funded by Colorado’s Economic Development Commission, the organizations within the ACC share office equipment and space and sponsor joint programs. The ACC has emerged as a one-stop shop for visitors and international delegations to receive information about various sectors of the Colorado economy.

 

So, is concentrating TBED organizations in a specific location an effective strategy? The answer cannot be a simple yes or no for all communities.

 

Concentration would seem to be effective only if the aggregation results in something better than is occurring through the individual parts. Cost efficiencies aside, certain benefits and interactions must take place that would not normally occur if the organizations were spread throughout a region. For example, increasing the opportunities for people to bump into each other all day might produce previously unrealized benefits. Addressing shared clients more efficiently and quickly could be another.

 

Travel convenience for shared clients is a possible advantage of co-location, but not always. It could be a disadvantage to prospective clients if they are diffused across the region and must spend more time traveling to every meeting, training session, workshop, or event. There are other potential drawbacks to consider as well. Competition for prime office or parking spaces and resources among the tenant service organizations, while often times quite petty, could hinder cooperation. Alternately, the possible encroachment of “group think” in addressing client issues could stifle creativity, customer service, and objective evaluation of the success and failure of particular approaches.

 

Design of TBED organization spaces – whether in shared locations or separate – may benefit from many of the same concepts discussed in the previous story about the design of research laboratories. In addition to creating informal social spaces and centralized eating places, large atriums or exterior courtyards could be used to get people from different organization to visually see each other. Minimizing hallways that lead to dead ends and building with transparent materials also may help to stimulate connectivity. Regardless of the specific design components, it will be interesting to follow how TBED organizations physically situate themselves within their communities in the years to come.

 

More information on Georgia Tech’s Technology Square is available at: http://www.gatech.edu/technology-square/

 

For more information on the MaRS Centre, including pictures of the existing and future design, visit: http://www.marsdd.com/MaRS-Centre.html

 

Additional details about all of the organizations that comprise the Advance Colorado Center can be found at: http://www.advancecoloradocenter.com/

A handful of competitiveness reports have been released in the past two weeks, each comparing various geographic locations and incorporating a range of innovation metrics. Perhaps the publication garnering the most international press has been The Global Competitiveness Report 2007-2008 by the World Economic Forum. Produced since 1979, this year’s version of the Report includes the Forum’s Global Competitiveness Index, which incorporates 12 “pillars of competitiveness” consisting of roughly 120 variables to rank 131 countries. These pillars range from Infrastructure and Macroeconomic Stability to more advanced groupings such as Technological Readiness and Innovation.



The U.S. and Canada are ranked first and 12th, respectively, in the report's Innovation subgroup. Each country’s Innovation ranking was calculated using such variables as the quality of scientific research institutions, company spending on R&D, government procurement of advanced technology products, the availability of scientists and engineers, and intellectual property protection, among others. The top five countries in terms of the composite GCI score were the U.S., Switzerland, Denmark, Sweden and Germany. The study ranked Canada 13th in the world, in terms of overall competitiveness.

 

A second recently released report, Raising Productivity Growth: Key Messages from the European Competitiveness Report 2007, delves more into the drivers of competitiveness in the European Union, especially in terms of productivity. The report notes that the labor productivity gap between the E.U. and the U.S., after widening continuously since 2001, is beginning to diminish. While the difference in annual productivity growth was relatively small at 0.1 percent, productivity measured as gross domestic product (GDP) per employed person was 38.6 percent higher in the U.S. than the E.U. and, if measured as GDP per hour worked, was 25 percent higher in the U.S. The report contends the main reason for this gap is the productivity growth from factors such as technical progress and organizational innovation. Policies designed to foster the use of information technologies, increase investment in R&D, and induce competition with product market reform should lessen the gap by driving productivity.

 

The first Annual Toronto Region Innovation Gauge, assembled by the Toronto Region Research Alliance, was also just released. The report benchmarks the greater Toronto region against 10 U.S. states with a relatively comparable population and economic size identified as leaders in technology -- California, Connecticut, Illinois, Massachusetts, Minnesota, New Jersey, New York, North Carolina, Pennsylvania and Virginia. This region - with a population of 6.8 million - contains North America’s second-largest financial services cluster, second-largest automotive cluster, third-largest ICT cluster and the continent’s sixth-largest pharmaceutical cluster, the report observes.

 

Modeled on the Massachusetts Innovation Economy Index produced by the Massachusetts Technology Collaborative, the Innovation Gauge organizes indicators into three categories - innovation inputs, innovation processes and innovation outputs - in order to assess strengths and weaknesses. This 2007 version states three main findings:

John Wilkinson was promoted to minister of research and innovation in the Ontario cabinet.

Canada’s Treasury Board recently announced the creation of an independent panel of experts to provide advice on transferring management of federal non-regulatory laboratories into private or other non-government hands. The four individuals comprising the panel, each with extensive experience and leadership in Canada's science and technology community, will consider different management options for the Canadian systems of federal research labs.



Many of the largest nonregulatory and non-life science-related federal laboratories in the U.S. are managed by private companies through competitive selection processes. Others are co-located and run by academic institutions. The panel may consider privatization or quasi-privatization of life science-related labs that, in the case of the National Institutes of Health and U.S. Department of Agriculture, remain government-operated.



The Canadian panel will focus on four key objectives:

The creation of the Canadian Association of University Research Parks was announced earlier this month. AURP Canada will represent 25 Canadian science, technology and research parks and will be a chapter of the Association of University Research Parks (AURP). Eileen Walker has been appointed AURP's new executive director.

The India Ministry of Micro, Small and Medium Enterprises announced last week a plan to provide funding to 50 universities and training institutions for the creation of up to 100 enterprise incubators within innovative fields.

 

While the details have yet to be released, the Ministry plans to provide funding to 50 universities to create up to 100 incubators that will host approximately 1,000 micro and small enterprises over five years. The government will provide grants of Rs. 5 lakh per incubator - about $62,000 USD - to help support and promote emerging industries, including biotechnology and pharmaceuticals.

 

Last year, the Parliament enacted The Micro, Small and Medium Enterprises Development Act of 2006, calling for the “promotion and development and enhancing the competitiveness of micro, small and medium enterprises.”

 

More information about the Act is available at: http://ssi.nic.in/MSME%20Development%20Gazette.htm

Canada's 17 research parks have agreed to join forces, creating a formal association.

As the development of a nation's science and technology capacity becomes a critical component for economies around the globe, it is becoming even more critical for countries to implement strategies that will enable future competitiveness. This is particularly true for the world's leading economies, which is why, for example, the European Commission increased the resources invested toward research and innovation (see May 2, 2005 and Oct. 22, 2006 issues of the Digest.)



With the recent release of a national science and technology strategy, Canada becomes the latest developed nation to outline specific steps to maintain its competitive position. Mobilizing Science and Technology to Canada's Advantage centers around themes to encourage more private R&D and concentrates federal research support in the areas of natural resources, the environment, health and information technology. The strategy follows up on the government's November 2006 release of Advantage Canada, a report that recognizes the competitive strengths of the Canadian people and infrastructure and emphasizes the necessity to do more to create innovation and spur improvement.



The emphasis on private R&D investment is supported by various statistics illustrating Canada's current position. In 2005, the strategy observes, only 54 percent of the $27 billion of the R&D performed in Canada in 2005 originated from the private sector (note: all figures are in Canadian dollars). Comparatively, this is well below the average of countries in the Organisation for Economic Cooperation and Development (OECD), where private sector R&D averages 68 percent of total expenditures. Among the G7 nations, Canada has the highest ratio of public R&D investment to national gross domestic product (GDP). But when the private sector is factored in, total R&D spending is only 2 percent of GDP, less than most of the G7 economies.



From a workforce perspective, Canada is the OECD country with the highest share of its population with an undergraduate degree. However, it is ranked 20th in natural science and engineering degrees, as a share of total degrees, and 17th in the number of people in science and technology occupations, as a share of total employment. The report concludes that Canada's private sector "does not provide enough incentives for students to strive for advanced S&T and business management skills."



Policy recommendations are organized into three categories: a collection of steps to ameliorate Canada's entrepreneurial advantage, its knowledge advantage, and its people advantage. Some of the highlights of these recommendations include:



Entrepreneurial Advantage

Manufacturing firms come in all shapes and sizes. Little ones. Big ones. Ones that need more labor from their employees to assemble components. Ones that need more R&D from their employees to design products.

 

And, for a variety of reasons, many manufacturing firms decide to collaborate with other entities in order to develop new and improved products. A recent discussion paper from the Center for European Economic Research sheds new light on the motives of these collaborative firms. In Motives for Co-operation: Evidence from the Canadian Survey of Innovation, Tobias Schmidt develops a typology of these firms, differentiated by their reasons to engage in collaboration.

 

What’s new about Schmidt’s research is the tool he uses to explore the relationship between these motives (to share costs or to access external knowledge, for example) and the descriptive factors (size, industry type, educational attainment of employees, for example) of these firms. Much of the previous research in the field has used proxy measures to explore the motives of firms. But Schmidt utilized a direct question about firm motives that was included in Canada’s 2005 Survey of Innovation, a question that has not been featured in many past national innovation surveys from around the globe.

 

Depending on how they answered the specific question concerning motives, firms were placed into one of four categories: those who collaborate to share the cost of developing innovations, those who access external knowledge outside of the firm, those who collaborate to enable the scale-up of production, and those who collaborate to develop commercialization activities. From this mandatory survey of all Canadian manufacturers with 20 or more employees and at least $250,000 in revenues, a random sample of 8,900 firms stratified by type of industry, region of Canada, and firm size were selected for the statistical analysis. A slew of variables, including each firm’s innovative practices, public R&D support, and firm characteristics also were captured by the survey.

 

The study’s findings? Firms whose motives for collaboration are cost-sharing are very similar to firms whose motives are accessing external knowledge. Schmidt speculated this similarity is because their concerns - finance and knowledge - are both inputs at the development stage of the innovation process. These firms are generally large in size and are more research-oriented than other firms. By typology, they are very different than firms that collaborate to scale up production, operating at the diffusion stage of the innovation process. Firms that collaborate for commercialization purposes have characteristics somewhat between these two extremes. This typology may assist TBED organizations to target certain types of firms for their policies to increase commercialization, or to strengthen collaborations with the intention of lowering costs.

 

In addition, a key difference exists between the four grouping of firms based on their collaboration motives. The existence of public R&D funding has a strong effect on the likelihood that a firm collaborates to access external knowledge, but not for the other motives.



A copy of Motives for Co-operation: Evidence from the Canadian Survey of Innovation can be downloaded at: ftp://ftp.zew.de/pub/zew-docs/dp/dp07018.pdf

Lyne Bouchard is the president and CEO of TechnoMontréal, a new umbrella organization for the city's information and communications technology cluster.

To promote excellence and accelerate innovation in the nation's aerospace, defence, security and space industries, Canada earlier this month launched the Strategic Aerospace and Defence Initiative (SADI) -- a repayable contribution program being administered by Industry Canada's Industrial Technologies Office (ITO).



Canadian aerospace, defence, security and space industries are knowledge-intensive and major contributors to Canada's economy. The aerospace sector, alone, had sales of $21.8 billion and exports of $18.5 billion and employed 75,000 highly skilled-and-paid Canadians in 2005. SADI is expected to invest nearly $900 million over the next five years, with funding to reach up to $225 million per year, in support of these industries.



SADI was developed with three objectives in mind: (1) to encourage strategic R&D that will result in innovation and excellence in new products and services; (2) to provide enhanced opportunities for Canadian A&D industries; and (3) to foster collaboration between research institutes, colleges, universities and the private sector. By investing in strategic R&D projects, ITO will concentrate its resources on projects that involve the development of technologies that focus on next generation products or services, build on Canadian strengths, enable Canadian companies to participate in major platforms, and assist in meeting Canada's international obligations. Each project proposal will be assessed according to its technology, social and economic benefits and the submitting company's ability to achieve the stated objectives.



SADI's repayment structure will be formula-based and standardized. Repayments on contributions will be based on gross business revenues of a recipient company, or its relevant division which lowers the risk to the government. The repayment will start regardless of the success of the technology developed. On average, repayment periods will be limited to 15 years, with repayments starting shortly after the completion of the R&D phase. All of these features will allow for more money being repaid earlier to the government.



More information about the Strategic Aerospace and Defence Initiative can be found on ITO's website at www.ito.gc.ca.