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Weekly Updates* The micro level. Innovative forms of knowledge transfer. These are 'bottom-up' initiatives that make knowledge flow and create real innovation beyond strategic frameworks. Examples are virtual networks and common platforms for experimentation.
The best results are achieved when there is a good balance between bottom-up initiatives and strategic co-ordination. Finally, and very importantly, to make the system work, funding is needed: it is the 'oil of the regional innovation machine'. New initiatives only work when there is at least initial funding.
Cities vary in the quality of the triple helix cooperation they manage to achieve. Part of the explanation for this variation lies in the composition of the asset mix. In cities with a high share of knowledge-intensive industries, such as Munich and Boston, co-operation between companies and universities/research institutes is smooth; this can partly be explained by the high 'absorptive capacity' of the local high-tech business sector. This environment typically does not exist in cities with a weaker economic structure and less innovative firms.
There are many barriers to university-business co-operation. Universities and companies too often are two worlds: they have different drivers (academic prestige vs. profit making), different time horizons, different work attitudes, and often lack incentives. Some of these bottlenecks can only be solved at the national level but there is a role for sub-national policy too.
To improve co-operation between universities and companies, several policy options are open to city policymakers:
* Financial incentives. City or city-regional or local governments can create incentives to improve business-university collaboration. In Munster, for example, the Polytechnic University now receives less untied funding from the region of North Rhine Westphalia. In the new system, the more successful the polytechnic is in attracting financial means from the industry, the more grants it receives from the region. Cities can also create networks by providing financial rewards for co-operation. In Eindhoven, the Stimulus project financially rewarded innovative co-operations between business and knowledge institutes.
* Investing in joint facilities and technology centres where firms and research institutes can co-operate. German cities are very active in this respect. One example is CeNTech, again in Munster, a centre for nanotechnology research. It provides high-level facilities for university research groups and encourages the creation of new businesses from research. Many cities have created technology parks near university establishments. In 1985, the city of Dortmund in Germany, in collaboration with the Fraunhofer Institute, the Chamber of Commerce and a bank created a technology park. By 2004, twenty years later (time is needed), it has 200 companies, most in high tech industries, which contribute substantially to the Dortmund economy.
* Create transfer agencies. In many cities, higher education institutes have transfer agencies that create links with business and help administrative and contractual issues. In Munich, the FLUGGE program, initiated by the government of the Free State of Bavaria as part of the Bavaria Hightech Offensive, also aims to increase the number of spin-offs from the universities. It supports the technology transfer centre at the Ludwig Maximilian University, that links business demand and university supply of knowledge. The program also offers university researchers the possibility of starting their own company while remaining university employees on a half-time basis to reduces the early stage risk of starting up a company.
* Open university facilities and knowledge to firms. In Munich, for instance, young firms are allowed to use the laboratories of the Technical University and may even use the university as their address.
* Support or set up industrial liaison programmes where companies pay a fee to have unlimited access to academic resources, such as specialised information services, seminar series and newsletters. One of the best known examples is the Industrial Liaison programme of the MIT in Boston and they exist in many places.
Improving co-operation among triple helix players is not only an urban or regional issue and needs support from other levels of government. Much depends on national innovation policies, the higher education system and education policies, intellectual property regulation and other policies concerning the functioning of the national innovation system as a whole. Cultural differences among countries also play a role--in the US, there is a long tradition of university researchers commercializing their research, whereas in Europe this is much less common (although now increasing).
Promoting entrepreneurship
While less directly in the purview of city governance agencies, institutional support for entrepreneurship is an important tool in promoting an urban knowledge economy. Support for entrepreneurship has many aspects, from the place of entrepreneurship in educational institutions to infrastructure support for new firms. Cities differ widely in initiatives in this field. Van den Berg et al. (2001), in a study of growth clusters, found several types of start-up support policy. In some cities (Munich and in Helsinki are good examples), firms are offered not only office space and other support but also access to networks of established firms in the region. Eindhoven (The Netherlands) developed the concept of 'twinning' new firms with existing ones, where large firms contribute to a start-up facility, both financially and by sharing their knowledge and networks. In other clusters, for instance in the biotech cluster in Vienna, large firms were also willing to invest in young firms as they saw their own interest in the proximity of young, dynamic complementary firms.
Interactive policymaking
A city's success in the knowledge economy greatly depends on the quality of co-operation between various urban actors. Involving all key actors in policy making is therefore crucial so that urban governments can tap into resources and skills from other organizations and citizens to gain strength, creativity, new ideas and resources. Research (Van den Berg, Braun & Otgaar 2000) suggests that companies are willing to contribute to achieving different aspects of sustainable urban development, partly to improve their image, to attract labour, or simply to improve the physical environment of their offices. The key challenge for urban management is to mobilise these resources, to identify leaders with an interest in the community, and to deal with the business community and city residents in new ways. Box 3 illustrates the partnerships between government and business in the Netherlands.
Smaller cities can play too: The case of Oulu, Finland
In many countries, the capital regions or other big metropolitan areas easily attract highly-skilled staff and are the prime receivers of foreign direct investment. The example of the city of Oulu (180,000 inhabitants, located in the north of Finland), however, shows that, under some conditions, smaller provincial towns can also be successful in the new economy
Over the period since the 1980s, Oulu has managed to develop a highly specialized ICT cluster. In Oulu, more than in any of the other cases mentioned in this paper, public policy, both national and local, has shaped its major cluster. The city did not have a large home market to support an ICT cluster, nor was it located near other markets. It was strong in sectors such as R&D in which market nearness is less important. Joined-up national regional development policies, the creation of a technical university, strong and consistent local policies and a co-operative culture fostered the city's cluster success.
Instead of supporting local declining industries, in the 1970s the Oulu city region decided to enhance the co-operation between university and industry and rely on local competences in building its future. It was helped in this by the establishment (via national policy) of the University of Oulu, the laboratories of the Technical Research Centre of Finland and the foundation of the first Science Park in the Nordic countries which proved crucial factors in growing local knowledge-based industries. Nokia, the lead firm, has had a very important impact on the economic development of the region. Regional policy of the time strongly influenced Nokia's decision to locate in Oulu because in the underdeveloped northern areas of Finland all the costs of buildings could be deducted in the year of construction. In 1972, it started production of US military radio equipment for the Finnish military forces and in 1973 the production of radio equipment, networks and radio links followed while in 1975 Nokia Plc transferred part of its production of modems and other equipment to Oulu. In 1981, the production of digital centres started in the city region, with 100 employees. R&D for mobile phones was launched in 1988. Nowadays, Nokia Plc, with its two divisions, Nokia Networks and Nokia Mobile Phones, is one of the biggest private employers in the Oulu region, employing 4300 people. The establishment of Nokia in the region generated a further wave of establishment of new smaller firms in electronics and later in the software industry.
Local policy over the years has also strongly supported the cluster's development. The city's decision in 1982 to invest in a science park was an essential step and the city was determined to utilize the know-how and competence of the area by enhancing close co-operation between university and businesses, fuelled by strong interpersonal networks in the region. This has gradually resulted in a very strong co-operative culture in which knowledge is easily spilled over. Oulu was so successful that it became the model for national policies to create regional 'centres of excellence' in Finnish cities.
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