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The role of university spin-off firms in strengthening regional innovation systems in weaker places

THE ROLE OF UNIVERSITY SPIN-OFF FIRMS IN

STRENGTHENING REGIONAL INNOVATION SYSTEMS

IN WEAKER PLACES

Paper presented to Territorial Production and Networks 3: Knowledge, Development

and Policy, Sixth European Urban & Regional Studies Conference, 21st 24th

September 2006 Comwell Hotel, Roskilde, Denmark

Paul Benneworth

Centre for Urban and Regional Development Studies

University of Newcastle upon Tyne

Newcastle upon Tyne

NE1 [email protected]

Latest version 16th

August 2006

Draft 3.3, 8, 300 words in body text

Not for quotation without the authors permission.

INTRODUCTION

Universities should be very important actors in contemporary economic development.

The rise of the knowledge economy has made economic success increasingly

dependent on capacities to exploit knowledge and compete through innovation (see

Temple, 1998 for a review). Universities purposes are intimately related to

knowledge, learning and innovating universities create new knowledges,

challenging existing knowledge, diffuse and circulate that knowledge, transfer it to

businesses and teach it to students. Whilst the cloistered medieval origins of the idea

of a university (Newman, 1843) have sustained images of detached ivory towers,since the American Land Grant Universities of the 1860s, universities have worked

closely in partnership with government and business in their various knowledge

activities (Charles et al., 2003; Etzkowitz, 2005).

Many of the most compelling stories of high technology regional economic success

intimately involve universities working with businesses, notably in the totemic sites

of this new economy, such as Boston, Silicon Valley and Cambridge (Armstrong,

2001). But universities do not emerge as strong actors in these stories, their mostsignificant contributions to regional economic development apparently coming

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mailto:[email protected]:[email protected]


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through the high-technology businesses and entrepreneurs which emerge from those

universities into the real economy. Clusters of regional spin-offs linked to key

businesses such as Fairchild Semiconductors (Silicon Valley), the Digital Electronics

Company (Boston) and ARM Holding (Cambridge) all exemplify Etzkowitzs view

(2001) that universities can provide an entrepreneurial DNA that makes regional

economies more entrepreneurial and successful (Lee et al., 2000; Zhang, 2003;

Garnsey & Heffernan, 2005). But this relegates universities role to a pre-condition,

necessary but not sufficient to explain particular regional economic success stories.

Universities have thus become included alongside other shadowy factors such as

culture, trust, institutional thickness and industrial tradition, integral to particular

regional success stories, but whose contribution can never precisely be defined. Inthis paper, I distinguish universities specific contributions to regional economic

development by exploring their economic development function in less successful

regions. My premise is simple in less favoured regions (LFRs), cultures, economic

structures and institutional arrangements are a barrierto economic success (Linders et

al., 2005). Consequently, exploring specific successes in these regional contexts

illustrates more general processes by which university institutions contribute to

territorial economic development.

In this paper, I look at case studies from two such less successful regions, Newcastle

in the North East of England and Twente in the Netherlands. In both regions, which

have suffered decades of industrial decline, universities have become important

regional development actors. Each university has pursued a very different regional

engagement strategy, reflecting national and local differences in higher education

systems. Nevertheless, despite very different approaches in both regions and very

different national systems, universities have had remarkably similar regional impacts.The universities have created insulated high technology spaces which have allowed

entrepreneurs to succeed despite negative regional economic environmental features.

These spaces have also attracted new external investors who have sought to access

unique hybrid knowledges which have been produced by particular university-

business relationships. Outside actors resources have further stimulated regional

networks promoting, retaining and diffusing regionally the benefits of high

technology growth. Universities in both cases have been central to attracting and

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anchoring global knowledge investors, a critical territorial economic development

process.

UNIVERSITIES AS GLOBAL/ LOCAL ACTORS

The knowledge economy is extremely unevenly distributed, and many analyses have

subsequently inferred that an increasing importance for the regional scale to the

knowledge economy. A range of territorial innovation models (TIMs) have

emerged arguing that regions are important as the optimum scale for new knowledge

production, learning and innovation (cf. Moulaert & Sekia, 2003 for a review). But

others have noted that territorial innovation capacity is only relevant to economic

development insofar as it supports the international competitiveness of its firms

(Lagendijk & Oinas, 2005). Cooke & Piccaluga (2004) conceptualise TIM effects as

being produced within regions networked innovation systems. They see an ideal

type regional knowledge laboratory as a place where two distinct groups, knowledge

producers and knowledge users interact effectively to create regional economic

advantage (see figure 1).

[Figure 1 goes about here]

In this model, both knowledge producers and users have their own global networks,such as academic prestige and industrial competitiveness. Effective regional

innovation systems (RISs) facilitate connectivity between the two groups, allowing

regional combinations to be made from the various global flows passing through the

region, producing a local buzz from these global connections (Bathelt et al., 2004).

Well-functioning RISs maximise the local benefits produced from these global flows,

creating tangible economic activities and regional development (Cooke et al., 2003).

The various TIM concepts can be regarded as features which support systemic

linkages within the RIS, and hence produce this local benefit drawing on external

resources.

This broader networked RIS model implies a wider political-economic structure of

regions inter-related through the various global flows which pass through them

(Henderson et al., 2004). Well functioning regional knowledge laboratories are

attractive to outside investors because of their systemic and proven capacity to create

economic value by combining knowledges (Cooke & Piccaluga, 2004). There are

regions which suffer because they do not have such systems which combine global

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knowledges locally, and as Cooke & Piccaluga note, it is hard to conceptualise their

regional development processes in terms of knowledge-based development. The

challenge for such regions is to rebuild their local regional innovation systems in

ways that facilitate and promote these global/ local connections.

Such places face a range of barriers to effective RIS integration (Benneworth, 2007),

ranging from a lack of local institutional thickness (Amin & Thrift, 1994), to a lack of

critical mass (Lagendijk, 1999), the lack of entrepreneurial resources (Dubini, 1989),

and a mismatch between the science base and the knowledge users (Fontes &

Coombs, 2001). Tdtling & Tripl (2005) produced a typology of dysfunctional RISs,

distinguishing (a) remote peripheral regions with little institutional thickness, (b) old

industrial regions with few industrial champions, and (c) fragmented metropolitanregions. In this paper, I focus on one of these classes, old industrial regions:

Tdtling & Tripl characterise such regions problem in terms of lock-in, stressing

that in such situations, their networks are often characterised by technological and

/or political lock-ins (p. 1209).

A number of studies of less successful regions which have successfully restructured

emphasise the importance of building regional capacities which revitalise and

reconnect old locked-in knowledges to emerging global markets (inter alia Rehfeld,1995; Cumbers, 2000; Hospers, 2004; Batherlt & Boggs, 2005; Liefooghe, 2005).

Malmberg & Power (2005) highlight the importance of key actors in building up

effective RISs in old industrial regions most notably strong firms by bringing in

external (global) resources which can then initiate new local growth dynamics. The

issue facing old industrial regions is that they are typically undergoing both

restructuring and economic decline. Consequently, large firms in such regions are

often playing a contrary role to that envisaged by Malmberg & Power, removingresources via rationalisation and restructuring. This reduces these firms positive

territorial economic impacts, and raises the question of which key actors couldtake on

the RIS building function in such regions.

I argue in this paper that this global/ local function could conceivably be played by

any large, globally-connected organisation, not merely companies. There are regions

which have achieved renewal and economic growth through strong public sectors (cf.

Gray et al., 1996), whilst supranational and non-governmental organisations haveprovided a stimulus behind knowledge-intensive service complexes in emerging

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world cities (Smith, 2003; Baeten, 2004). However, supranational organisations tend

to be concentrated in capital cities, and the geography of public sectors across

advanced economies limits the extent to which they can influence old industrial

regions development trajectories.

There is an increasing recognition that universities may have a role to play in

stimulating regional economic development (Goddard & Chatterton, 2003, Rutten &

Boekma, 2003; Boucher et al., 2003). Certain types of universities have historically

been premised upon constructive linkages between global knowledge and local

application, embedding abstract theories in students, and transferring academic value

into commercial contexts (Delanty, 2002). American land grant universities,

European technical universities and polytechnic-type institutions have often beenimportant in diffusing their knowledge into regional contexts. Many universities are

well resourced for creating localised spill-over benefits, through the various global

networks which they assemble and combine in delivering their core teaching and

research missions (Goddard & Chatterton, 2003); examples are creating knowledge-

intensive business service activities, spin-off & graduate start-up firms, and training

knowledge workers (Boucher et al., 2003). This suggests that universities regional

interactions fit Malmberg & Powers (2005) description of global/ local RIS

animateurs. But in old industrial regions, there are few high-technology local partners

through whom universities transmit their value outwards (Fontes & Coombs, 2001)

and universities and research organisations in such regions are too often oriented on

traditional industries/ technologies (Tdtling & Tripl, 2005, p. 1209).

In this paper, I address the question how do universities become important economic

development actors in less favoured regions? through the question of how

universities can turn their global excellence into a local growth impulse?. Theheuristic that I explore is of universities in such contexts building small scale

knowledge laboratories within their regions (cf. Cooke & Piccaluga, 2004). These

knowledge laboratories are localised, insulated regional innovation networks. Local

entrepreneurs and global partners come together in these networks, using university

resources and creating economic value drawing on university-derived knowledge.

Assembling external stimuli and investors with local entrepreneurs creates unique

hybrid knowledge assets. Hybrid activities create spill-over benefits for local

entrepreneurs embedded in the regional economy, support universities; global

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excellence and attract outside knowledge investors. I focus on one concrete

mechanism by which universities build tangible local/ global networks, namely

university spin-off companies. I draw on examples from two old industrial regions,

the North East of England, a former coal/ steel/ engineering region, and Twente, a

former textiles region in the east of the Netherlands.

METHODOLOGY

In this paper, I argue that universities entrepreneurship promotion activities can have

a systemic effect on positioning the region within the knowledge economy by

strengthening those regions RISs. Old industrial regions tend to have what Dubini

(1989) has characterised as sparse entrepreneurship environments, often lacking the

necessary resources for innovation (Alderman & Thwaites, 1992). The universities in

the two case study regions have both attempted to stimulate regional economic growth

through promoting university spin-off companies (USOs)1 in new high-technology

areas. This is an attempt to create a knowledge-using network within their region,

who valourise academic knowledge by generating external sales. It is not

unsurprising that universities play this role, as Claryss et al. note in environments

with less demand for innovation, characterised by a weak entrepreneurial community

and a lack of other resources, [research institutions] may need to play a more

pro-active incubation role (2004, p. 1-2).

Spin-offs are a quintessentially new economy activity; high-technology, high-value

businesses in emerging sectors with high growth potential (Benneworth & Charles,

2005). Both universities have achieved their regional impacts despite very different

models for promoting entrepreneurship. Newcastle University has focused on

supporting entrepreneurial professors, and its website lists some 25 spin-offs created

over the last 27 years directly related back to the university, although it does not count

companies founded by graduates, including the multinational accountancy business

firm Sage which currently employs 10,000 globally. The University of Twente (UT)

has encouraged students to create their own businesses after graduation, providing a

loan, access to laboratories and mentors to support this low selectivity approach.

Since UT began this approach in 1984, 400 companies have from the university

employing 3,000 people in Twente (Karnebeeket al., 2001; cf. footnote 8).

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My argument is based upon case studies from these two regions, each comprising two

elements, a review of regional information sources and a set of key respondent

interviews. In the first part of the study, a wide range of documents were reviewed,

including historical and contemporary reports about both universities and their

regional contexts, along with contemporary policy documents and strategic plans

from the university, regional partners and the national government2. The main

substantive method was 75 face-to-face interviews in the two study regions, 32 in

Newcastle and 43 in Twente3 undertaken through a snowball approach (cf. Yin,

1994)4. Care was taken to reflect the fact that each university approached

entrepreneurship very differently, whilst ensuring broad interviewee samples; the

number and types of interview are set out in tables 1 and 2 below.

[TABLE 1 GOES ABOUT HERE]

[TABLE 2 GOES ABOUT HERE]

Interviews focused on how interviewees used relationships with other regional actors

to access resources to solve problems in establishing new high-technology firms and

developing their high-technology products, the precise focus varying by interviewee5.

These interviews and background materials were selectively combined to produce a

set of stylised narratives about university commercialisation, community building and

policy impacts in the two regions. A critical realist methodological perspective was

then used to infer more general structures, processes and mechanisms for

knowledge-based regional economic development from these stories and relationships

(Benneworth & Charles, 2005).

BACKGROUND TO THE CASE STUDIES

The two case studies cover regions where universities have actively prioritisedregional engagement, promoting university spin-offs in territorial contexts

characterised by long-term processes of severe deindustrialisation. Both regions are

archetypal sparse regional entrepreneurship environments. Despite being created at

very different times within contrasting national science systems, there are clear

similarities in each institutions regional role. Both universities were created as

applied technology institutions, and both institutions had a mission including social

and economic relevance. Both regions lacked large R&D intensive firms able to

respond meaningfully to policy-makers instruments, with universities becoming

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central to their respective RISs. As deindustrialisation compounded the weaknesses

of those RISs, both institutions developed more regionally-oriented readings of

societal relevance within their institutional missions.

Newcastle University, the North East of England

The North East of England industrialised from the late 18th century, developing a

peculiar form of carboniferous capitalism characterised by many small industrialists

unable and unwilling to invest in new production methods (Tomaney & Heyward,

1996). This complex began its secular decline from 1900, but demand for coal, steel

and shipbuilding in two world wars and the following reconstruction efforts masked

the emergence of deep-seated structural economic problems. The government

responded during the 1940s to 1960s by nationalising these industries intending to

modernise them, but a wider national economic crisis in the 1970s left the government

committed to austerity, rationalisation and downsizing, undermining attempts to

invest and modernise these sectors (cf. table 3). Nationalisation of these industries

also crowded out investments in high-technology industries, leaving the North East a

typical branch-plant region (Byrne & Benneworth, 2006). This situation was

compounded through the enduring misperception by key national science policy

makers that the North East was a place unsuitable for science, discouraging the

government from investing in strategic science facilities in the region, (Heim, 1985) a

misperception which came to have self-fulfilling properties6.

[Table 3 goes about here]

Newcastle University was formally created in 1963 from Kings College Durham.

This institution had its roots in Armstrong College, a specialist marine engineering

and agriculture institution created in the 1870s, which merged in 1937 with the

(Newcastle-based) Durham Schools of Medicine and Dentistry to create Kings

College (Loebl, 2001). Agriculture, medicine and engineering were all applied

subjects, and Kings College reflected this disciplinary mix in its ethos as a place of

useful knowledge (Potts, 1998). Despite successive UK governments discouraging

university/ regional engagement from the 1940s to the late 1970s, Newcastle-based

academics maintained industrial contacts throughout this period (Potts, 1998). After

1979, mobilising indigenous business assets for innovation became increasingly

important in the new European Regional Development Fund programmes. With few

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private or governmental R&D organisations active in the North East, the local

Department of Trade and Industry office and local authorities both demanded North

Eastern universities become regionally engaged (Benneworth, 2002). Newcastle

University responded with a number of activities over time, including a

Micro-Electronics Applications Research Institute (MARI, 1983), an City Technology

Centre (1984), a seed capital fund (NUVentures, 1987), a regional development office

(1995) and finally, a Business Development Directorate (2003). By 2004, regional

engagement had become a central principle in two key institutional documents, the

Business Plan and the Estates Masterplan (Newcastle University, 2004a; 2004b).

The University of Twente, East Netherlands.

Twente, in the East of the Netherlands was chosen in 1830 by King Willem I to be the

site of a new Dutch textiles industry. The Brussels Revolt of 1830 had ceded the

Flanders textiles areas from the Netherlands to the newly created Kingdom of

Belgium. In choosing a location for a new Dutch textiles industry, the king was

attracted by the traditions of home weaving amongst Twentes impoverished

subsistence farmers (Hospers, 2002). A huge textiles industry emerged after 1830,

exploiting Dutch colonies as dominated suppliers and a captive market, using royal

patronage and monopoly privileges, making Twente the third Dutch manufacturing

region by the 1870s (Brouwer, 2005). Industrialisation produced a particular form of

paternalism; workers enjoyed high living standards, quality housing and relatively

luxuriant leisure facilities (Jaarboek Twente 2005), at the cost of plummeting

competitiveness, with monopoly breeding complacency regarding their long term

prospects. The loss of the Dutch Indonesian colonies (1949) and the rise of Asian

low-wage competitors in the 1950s saw steadily declining employment, but as late as

1961 regional elites argued that those declines were temporary (ETIO, 1961 cf. table

4). By the 1970s, exacerbated by the oil shocks, the industry reached crisis point

(Lambooy, 1995), and by 1985, the industry had all but vanished from its former

heartland (see table 4 below).


The Technical Polytechnic of Twente (THT7) was created in 1961 to support Dutch

aspirations towards being an advanced manufacturing economy, by increasing

technical graduate numbers and promoting regional textiles renewal (Sorgdrager,

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1981). However, as the textiles crisis unfolded in the 1970s, the Government

considered closing THT to allow refocus scarce public resources to be refocused on

regions and industries with better economic prospects (Groeneman, 1991). What

saved THT was leadership; under the renowned Rector Magnificus8 Harry van der

Kroonenberg (1979-1982; 1985-1988), the university pioneered a series of

institutional innovations now typical of entrepreneurial universities (Clarke, 1998).

These included a technology transfer office (1979), an incubator unit (1982), student

entrepreneurship schemes9 (1985), knowledge circles (1990), regional venture funds

(1996), an open innovation centre (1997) and a technology accelerator (2003). The

university also rebranded itself University of Twente: the entrepreneurial university

in 1985. Its innovation resources made UT a central partner of the provincial

government and regional development agency as they have sought to expand high-

technology growth within what remains a comparatively underperforming regional

economy.

UNIVERSITIES AS KEY ACTORS IN REGIONAL DEVELOPMENT:

RELATIONSHIPS THROUGH SPIN-OFF ACTIVITIES

The first argument is that the spin-offs emerged beyond the university, taking assets

from the university and creating new commercial activities with an economic impact

wider than the university. Newcastle University adopted a spin-off promotion model

led by academic type staff; in 10 of the 13 businesses, professors and independent

lecturers started companies to pursue commercial work alongside their main research

activities. In the 1980s and early 1990s, the university at times tolerated, and at other

times promoted, spin-offs within wider efforts to expand their commercialisation

activity. Some spin-offs hired their own staff, including professional managers, and

rented university space. In a majority of cases (8/13) these adjunct teams grew to be

considerable and largely independent from the university. Three further firms were

formed from whole research groups formally left the university as fully functioning

commercial businesses. At UT, the model developed in the 1980s was primarily

external; in 1985, the university used government funds to establish a graduate

entrepreneurship scheme, TOP (cf. footnote 9) which provided entrepreneurs with a

personal loan (f. 30,000), business mentoring and networking, and laboratory space in

the university research group for a one year period. Applicants for this scheme wereprimarily masters students from UT, but over time, employees in businesses working

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closely with the university and people from businesses facing closure, used the TOP

scheme to establish new businesses business.

Although each spin-off model was very different, there were a number of notable

similarities, notably common dependencies from these USOs to the university, where

spin-offs used university assets to solve key problems encountered during start-up,

growth and innovation. In some cases the university provided soft resources for the

spin-offs, related to the people forming the companies. The majority of the

entrepreneurs involved in the spin-offs were university staff or former students

(although in Newcastle a number of firms hired professional managers after start-up),

with a very small minority having no direct link to the university. The university was

also an important source of staff , know-how and soft knowledges, includinglaboratory technical skills, assisting spin-outs through a variety of sub-contract,

temporary contracts and consultancy activities. It is notable however that no

companies formed from either institution were created solely to exploit a patent

without hiring former university staff10.

Each university was also a source of hard resources; both universities had seed

investment funds, along with links to a range of commercial and subsidised

investment funds. Both universities made space available within their campuses forrelated companies, within departments as well as in incubators. Universities provided

licenses, intellectual property (IP) and purchasing contracts which put value and cash

into the firm. In some cases, the universities provided what could be considered as

network resources, bringing together diverse resources and assembling them into a

working research group which was subsequently spun off. 3 companies in each

region were former research groups or support services that span themselves out of

the university.

It is of course unsurprising that USOs have links back to their universities,

particularly the soft links which are present in all spin-offs except licensing vehicles

(cf. footnote 10). More interesting is the multiple dependence of these new firms on

their host universities. Table 5 below shows the reliance of the four most successful

firms in each region, (average size 65 employees), on the university for the provision

for the nine key resources (classified as hard, soft & network) outlined above11. On

the basis of this classification, each USO had an average of five types of linkage backto the parent university, the same in both regions. The most important dependencies

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were on the university as a source of entrepreneurs, scientific staff and for premises.

This hints that the university is actually playing a number of different roles

simultaneously in each region, roles that in regions with more functional RISs might

be played by other actors, such as property developers, public R&D laboratories and

high-growth, high-technology firms (cf. Clarysse et al., 2004).


USOS SYSTEMIC IMPACTS ON THEIR RISS

The next step of the argument is that spin-outs played a number of roles in building up

their regional innovation environments. It is difficult to argue that the USOs directly

transformed Twente or Newcastles regional economies, as neither region had enough

new high-technology activity to represent a strong new knowledge-exploitation

subsector (Benneworth & Charles, 2005). However, in a number of cases, spin-offs

did contribute to RIS-building activities. All spin-offs worked directly with some

local partners, helping to raise their innovative capacities; all the companies

interviewed either sold some form of technical development service to local

companies, or involved local companies in product development processes12

.

Another direct effect on the RIS was that spin-offs themselves were sources of furtherknowledge-exploitation activities, in the form of daughter companies which

themselves had links back to the university. In Newcastle, three of the companies had

formed their own daughter companies. Figure 1 below shows how four companies

became a focus for growth in Twente through this serial entrepreneurship process,

creating new businesses, establishing joint ventures, and rescuing troubled

businesses13

. In total, these four spin-off companies, although strictly accounting for

only 150 jobs, had through their daughter companies an overall employment

footprint in Twente of 255 jobs.


Spin-offs also became involved in other activities which indirectly supported high-

technology commercialisation in each region. In both regions, spin-offs had been

instrumental in establishing a number of local networks which more generally

supported innovation and entrepreneurship. Three of Newcastles nanotechnology

spin-offs with complementary expertises (one in pure biotechnology, one in pure

nanotechnology, and one in applied chemical engineering) provided applied

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development services for local businesses. The three firms shared their

complementary skills through sub-contract arrangements which relied heavily on

strong inter-personal contacts, which in turn drew on contacts originating in the

university. In Twente, a number of design and engineering firms (including USOs)

had created a formal networking organisation, the Twente Initiative for Medical

Products (TIMP), that supported collaborative innovative in the field of medical

products, and underwrote the growth of a number of its c. 10 membership. The

university had initiated a technology ring for its spin off companies in 1990,

originally to help them sell to large regional firms, but the nature of the organisation

changed in the mid-1990s, in response to demands from a number of the high-growth

spin-offs, into mentoring and network organisation. A number of the companies

subsequently formed used the technology ring (TKT) to receive feedback on their

business plans, to identify non-executive directors and access venture finance.

Spin-offs as successful high technology companies were also enrolled into larger

projects by actors seeking to harness selected characteristics. In both regions,

university spin-offs were important in establishing new publicly-supported venture

capital funds. A majority of the spin-offs had accessed some firm of equity funding

or venture finance (8/13 in Newcastle, 11/18 in Twente), and a number of spin-offs in

each region had been sold to produce profits for their investors. The fact that

spin-offs had successfully used that finance was accepted by regional policy makers

as demonstrative that there was a latent demand for subsidised regional venture

capital fund for early stage investments. The majority of investments subsequently

made by these funds in fact went to non-USOs (cf. OOST, 2005, NStar, 2005).

This evidence suggests that USOs did have a wider systemic effect on the RIS than

purely stimulating employment creation in knowledge-exploiting subsectors. Thesesystemic impacts had three characteristics; firstly, spin-offs drew on various

university resources, and then built linkages out into the regional innovation system,

creating external points of access into the university. The spin-offs played a

cantilever role in this bridging process, taking assets tightly held within the

university, and helping to move them beyond the universitys formal institutional

boundary. Secondly, spin-offs helped to promote regional growth, creating daughter

companies, and raising the quality of innovation in other local companies. Thirdly,

they had a demonstration effect, helping to make the case that the two study regions

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where places where high-technology investments could make profitable returns. One

exciting feature of the system building in all these cases is that it produced the kinds

of asset typically absent from sparse RISs in old industrial regions. Moreover,

although in all these cases, the universities were very important to supporting these

impacts, it was not the universities themselves who were the key actors actually

building up the RISs

UNIVERSITIES AS STABLE INNOVATION ENVIRONMENTS

The third step of the argument is demonstrating how RIS activities developed by

spin-offs from the two universities were in turn firmly anchored around the university.

This had the effect in each case of producing a commercialisation community

around each university. The two universities had both evolved institutionally towards

making very similar contributions to their regional innovation networks, somewhat

surprisingly given the very different institutional approaches to entrepreneurship and

spin-offs in each university which reflected underlying differences in national higher

education systems. A clear mechanism encouraging this convergence was the fact

that promoting entrepreneurship had in turn changed the nature of each institution;

each governing body struggled with reconciling entrepreneurship promotion with core

university missions.

Newcastle University had to address the issue of increasing amounts of research work

undertaken by spin-offs outside the university structures. The university attempted to

manage the benefits it received from this, both in terms of publications from the work,

but also receiving commercial revenue for assets used. Newcastle University

therefore found itself involved in commercial relationships with a lot of very small

firms, which was both risky and time-consuming. Newcastle responded by

appointing business development managers (BDMs) to manage relationships with

these micro-businesses. BDMs relationship networks developed over time,

extending to business angels, venture capital providers and public sector technology

support organisations. BDMs assembled a community of trusted individuals around

the university, and the university bound these trusted external individuals into the

university through its formal academic and governance structures, such as visiting

chairs, appointments to Senate, Court and Council, and as consultants to the senior

management team. Not all individuals involved with spin-offs lay within this trusted

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community, notably amongst those three companies formed from research groups

which had left the university. This community of trusted individuals is depicted in

figure 2 below.

[FIGURE 2 GOES ABOUT HERE]

At the University of Twente, increasing effort was devoted to tying spin-offs back

into the university. From 1979, UT was concerned with its visible contribution to

regional development, at that time still important in justifying its existence, something

which required that its spin-offs remained in the Twente region. In 1982, the

University invested with two other partners in a Business Technology Centre (an

incubator, BTC) opposite the campus to provide premises for TOP companies. BTCs

success persuaded the municipality to develop the adjacent fields as a Business and

Science Park, which also provided space for firms which outgrew the BTC14

. The

Twente Technology Circle (qv) had also been created in 1990 to provide spin-offs

with a rationale to stay connected to the University. What motivated UT to shore up

links with its spin-offs was increasing government pressure on universities to

demonstrate applied value in research. This led UT to involve spin-offs in core

research activities, which in turn needed a network of available spin-offs around the

university.

The case of MESA+ (a nanotechnology and materials research institution) illustrates

this institutional evolution and enrolment process. In 1993, UT had six research

institutes, including two (MESA and CMO) in materials and nanotechnology; MESA

and CMO had each produced two spin-off companies. In 1995, the decision was

taken to amalgamate them into a new institution (MESA+), and appoint a commercial

director to develop a new laboratory site with parallel academic and commercial

facilitites, managed by a trading body allowed to rent space to commercial firms.

Young masters and doctoral students doing practical research in the MESA+ facility

came into contact with commercial employees. As a number of key UT professors

refused to allow staff to do commercial research15

, more commercially-minded

students used the TOP programme to exploit MESA+ research to establish their own

companies. By December 2005, 30 nanotechnology companies had been formed

through the MESA+ arrangement16,17. The first decade of MESA+s life involved the

creation of a community of regional companies anchored around the universitythrough MESA+ (see figure 3 below).

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In both these cases, the universities evolved to a common model with an academic

core, a shared space with academics and commercialisation activities present, which

held spin-offs and other commercial partners around the university. Although

MESA+ had a physical footprint, this was not the case in Newcastle or in other cases

around UT; the space appears to have been a virtual network space.

UNIVERSITIES CREATING HIGH-TECHNOLOGY SPACES OF

OPPORTUNITY IN LESS FAVOURED REGIONS

The final element of the argument is that these spaces were places where a variety of

resources were combined, both from regional and external actors. These spaces were

appealing to external actors because they offered pathways to academic knowledges

with the promise and track-record that they could effectively be commercially

exploited. The university spaces became places which anchored highly localised/

embedded networks with global and local constituents, where global resources flows

interacted to produce local economic benefit.

In Newcastle, a first global/ local element was the fact that spin-offs had begun to

develop external connections; a majority of the companies (8/14) had brought inexternal finance; 3 had obtained corporate venture capital investment, 2 from private

businesses, and 2 from business angels. One USO, with several academic parents

had located in Newcastle but used funds raised by financiers in the cities of its other

parents. Three of the six that had not raised external finance had been created within

the university, using national/ European research funds, alongside consultancy funds

from international clients to assemble commercially-oriented research groups18

.

These relationships had continued after the spin-off event, with those three spin-offs

emerging as very well globally-networked businesses embedded to varying extents in

the Newcastle RIS.

A second global/ local element provided at Newcastle was the way in which USOs

helped to connect other local companies to external knowledges, helping to

restructure regional industry towards more innovative market segments. There were

several elements of reconfiguration visible in the way that the university-based

nanotechnology network (the university, a BDM and three spin-offs) had helped to

support a number of regional businesses to engage with nanotechnology. One local

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company worked with this grouping to reorient their R&D away from mature bulk

chemicals into nanotechnology. This research group was subsequently spun off, grew

into a small businesses (i.e. >50 employees), and is now AIM-listed. An existing

local mature chemicals firm had previously experimented with nanotechnology, but

had spun-off that activity because of a poor fit with its core business. That spin-off

business developed close links with the university, and was bought out by a market

leader which retained core R&D and manufacturing in the region because of the

regions unique skills base. This prompted the parent business to reactivate its

nanotechnology activities; it embarked on a research programme involving the

university, the BDM and three spin-offs, to develop a new core technology area.

Although the footprint of the nanotechnology spin-off cluster was tiny, with c. 20

employees, in total there were a further 200 employed in these three additional

activities. These jobs were either entirely new jobs, or jobs which had replaced

mature chemicals manufacturing activities, the kinds jobs most at threat from

disinvestment in old industrial regions.

The third global/ local element in the North East was the impact of successful

spin-outs on central government perceptions of the quality of the North East as a

place to do science (qv). Newcastle University had built up two hybrid knowledge

exploitation activities (in nanotechnology and life sciences). The nanotechnology

facility - INEX (Institute for Nanotechnology Exploitation) exemplifies how such

centres built up. A professor had been initially funded by the university to pull

together nanotechnology expertise in the university, and had written a number of

multi-disciplinary bids for infrastructure support. One proposal subsequently won

external funding, initially from the RDA but later from UK science agencies and EU

Framework programmes19

. The UK DTI were persuaded to invest national funds in

local exploitation activity because of Newcastle Universitys perceived

commercialisation success demonstrated through its track record in creating spin-offs

(S&TC, 2004). Newcastle University received one-sixth of the entire national

allocation for the first round of the Governments nanotechnology commercialisation

programme (3m of 18m). This brought considerable new funds into Newcastle

University to invest in resources which both academics and companies could use..

In the case of Twente, the processes of global/ local connection functioned very

differently; in the late 1990s, Twente was successful in attracting R&D from a

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number of multi-national companies who came to the region to work with the

university, to recruit their graduates but also collaborate with spin-off companies. As

a consequence of the bursting of the high-technology bubble, many closed,

including activities from CGM Logica, Lucent Laboratories and Ericsson. In the case

of Ericsson, a number of individuals working for the company established spin-off

companies, drawing on various community facilities including the TOP programme,

the TKT, BTC and BSP. Four new companies were created out of a research team

comprising 30 staff, in each case externally-oriented high-technology activities from

particular businesses stuck to anchoring points created through university activities,

keeping elements of those activities locally, even when the firm itself closed down.

A second set of global/ local connections were where local spin-off entrepreneursinvolved multi-national companies in two regional networks (Mechatronica Valley

and the Technology Exchange Cell) bringing external R&D investment into those

regional networks. Mechatronica Valley was a foundation created by a USO

entrepreneur who had graduated from a professors research group, which was

contemporaneously facing closure. The entrepreneur approached several

multi-national firms with local development laboratories, who as he did recruited

graduates from the professors research group. He persuaded them to subscribe to an

organisation to sponsor a new professor at UT to ensure the continued flow of

graduates, but also providing an additional MESA+ professor. The Technology

Exchange Cell (TEC) was developed by French defence contractor Thales and UT as

a rapid development facility to develop business ideas from scenario analysis to

virtual and rapid prototypes. TEC depended on (and paid for) regional spin-offs to

provide the real development and prototyping services within its virtual development

environment. Both these projects brought hundreds of thousands of euros into the

region from external businesses investing in activities which reinforced UTs wider

commercialisation community.

A final example of global/ local connections was the way in which TOP companies

became involved in helping other firms access finance. One was TKT (qv), now

governed by seven TOP alumni, with links to two business angel networks based in

the west of the country, each of which have invested in two further USOs. Secondly,

two of the three founders of one spin-off created a corporate venturing company in the

Enschede city-region; this was recently awarded 1.2m from the national

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Technostarters programme to support their work in investing in early stage high-

technology start-ups. Thirdly, MESA+ has been designated as the hub for the Dutch

national government strategic research programme Nanoned. 50m from the

Hydrocarbon Fund20

was invested in applied nanotechnology research with

potentially significant economic impacts. Although only a fraction of these funds are

being invested in Twente, it nevertheless provides complementary resources and

activities alongside the existing critical mass, and may help to qualitatively increase

the scope of hybrid activities at MESA+ and in Twente.

In both regions, the universities created spaces where entrepreneurs could assemble

resources, and in doing so benefit from various kinds of university spill-overs,

through a five fold process:-

The two universities created a set of new actors in the region, held in orbitaround university through research and commercial linkages,

These new actors behaved independently, pursuing explicitly commercial goals,growth and innovation,

Spin-offs brought other actors into the university, their partners and advisors, andtogether, these group of actors formed a community around the university.

New spaces emerged around the university which provided places for this widercommunity family to function and live.

Other regional innovators were selectively permitted access into those spaces andcommunities thereby accessing resources that helped them to innovate and grow.

Each university benefited from having a cadre of spin-offs demonstrating university

success in commercialisation. The university community involves a group of people

with expertise and experience of how high-technology venturing can be successfully

pursued despite the prevalent sparse regional entrepreneurship conditions. In that

sense, the space encompassed by the wider commercialisation community differed

quite radically from the economic conditions prevailing elsewhere in the region. Each

local community environment was much more supportive, with finding partners with

complementary resources easier than in the region as a whole. The community could

be considered as a space of opportunity where entrepreneurs are not hampered by

resource shortages in innovating and creating unique assets. The universities and this

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wider community provided potential entrepreneurs with a point of stability around

which other activities and resources were assembled into coherent, viable businesses

and activities.

CONCLUDING DISCUSSION: UNIVERSITIES, ENTREPRENEURSHIP AND

TERRITORIAL ECONOMIC DEVELOPMENT

Universities as points of stability and spaces of opportunity?

This paper considers how universities become significant economic development

actors in LFRs with relatively under-developed regional knowledge economies, and

what roles they can play in plugging the gaps in RISs in such regions. Firstly,

universities do not automatically fulfil this role: both institutions placed significant

effort into regional engagement. Certainly, there was not a strong pull factor where

academics found it easy to establish new businesses exploiting their academic

knowledge. Consequently, each institution followed two pathways for creating

spin-offs. Both institutions went through an early phase in the mid-1980s of creating

research businesses which were subsequently spun-off in a relatively complete form.

Subsequently, the universities responded more or less enthusiastically to proposals

from external entrepreneurs acting in private capacities to create autonomousspin-offs.

Both types of firms were insignificant in regional economic terms, but over time their

presence forced the universities to reconfigure themselves to be more supportive of

their daughter companies, and consequently for regional entrepreneurial activities.

Both universities validated their activities in terms of their early successes, and USOs

helped to define the role of entrepreneurship in the university mission. In both cases,

entrepreneurship was defined as an external activity, to be performed by outsideagents limiting the university contribution but also bounding its risks. Each

universitys role was restricted to supporting and sheltering companies in the context

of a difficult regional economic environment.

Universities used a range of relationships to retain linkages to their spin-offs,

anchoring the spin-offs around the university. This was given findings elsewhere that

that spin-offs tend to drift away from the university after the entrepreneurial event

(Dahlstrand, 1999; Elgen et al., 2005). This anchoring also represents a key

mechanism for understanding how university activities had a broader system-building

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impact on the RIS. These anchoring mechanisms were initially based on particular

personal relationships, but some became institutionalised over time (MESA+ , the

BDMs). Access to the benefits of these institutions was not restricted to the initial

participants (e.g. TKT, nanotechnology incubator). These institutions evolved into

access points for external investors seeking access to commercially viable university

knowledges (e.g. both national governments, Ericsson). Because knowledge was held

within the communities and institutions, external partners engaged with those

institutions to access the knowledge, which often involved placing their own staff, or

providing funds to, those institutions (MESA+, INEX).

Fortuitously, the increasing policy importance of commercialisation in both countries

allowed both universities well to use their communities of spin-offs to demonstratetheir expertise in commercialisation. Both institutions won government science

funding acknowledging their historical success with commercialisation. The fact that

external partners funded and placed activities in these institutions in turn increased

their regional economic footprint: MESA+ attracted 10m and INEX some 11m of

one-off national grants for scientific infrastructure investment. Whilst the universities

were already large, knowledge-based activities, these wider local projects combining

local, regional and external activities provided direct mechanisms embedding global

and general knowledges within specific applied commercial contexts in those

particular regions. Although the universities were not responsible for those activities,

they played a variety of facilitative roles in both regions, anchoring local actors,

providing financial and knowledge resources, and attracting and convincing outside

investors.

Universities and high-technology development in LFRs

The two case studies together offer evidence corroborating and nuancing the

originally proposed mechanism for universities improving the regional innovation

systems in old industrial regions. The universities in each case built up and sustained

global/ local spaces of possibility, mini-RISs which did not suffer from all the

problems affecting their regional economic environments. Both universities put long-

term efforts into building up and sustaining those spaces, even at times when both

universities faced financial and managerial pressures to abandon their investments in

the absence of short-term profits. Central to the survival of those spaces was their

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occupation by a community of entrepreneurs whose rationale lay in making new

combinations of existing knowledges, attracting finance and ultimately building new

economic activity. Those spaces were assets in their own rights: external

entrepreneurs used those spaces to access unique knowledges, at the same time

contributing their own external resources to the overall combination process. The

contours of this spaces of possibility concept can usefully be applied to the

academic debates initially raised.

The first point relates to the way that gaps are dealt with in sparse, locked-in RISs.

Significant knowledge economy developments are based on combinations of global

and local resources brought to life by and within particular high-technology and

entrepreneurial communities. The essence of the model was that a well-resourced,well-networked actor assembled actors with strong external networks for the

production and exploitation of regional knowledges, simultaneously creating

economic activities through that exploitation activity. This is not restricted in its

application to universities, but there are other such types of organisation which could

conceivably provide an anchoring point for such spaces of possibility, including

non-governmental organisations as well as firms. The five step process outlined

above is clearly specific to old industrial regions lacking a strong knowledge

exploitation community but there are also implications for other types of

dysfunctional RIS.

Whilst these two old industrial regions suffered from the lack of governance

networks, with the universities mobilising governance arrangements to meet their own

needs, other types of dysfunctional RIS have other governance requirements. For

geographically remote peripheral regions and fragmented metropolitan regions, what

appears most important is sufficient institutional thickness to allow actors in suchplaces to focus on particular tangible activities that populate gaps in the RIS.

Institutional capacity in such places lies in identifying large, tangible projects that will

encourage co-operation, then mobilising that network to deliver the projects, creating

a global/ local community anchored around the locality. This is an interesting

perspective on the role of governance in producing well-functioning RISs, developing

from facilitating interaction, to leading and co-ordinating projects which seed and

incubate the necessary co-operations, which in turn lay foundations for future

unselfconscious interactions.

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The second contribution where this concept of a global/ local space of possibility can

be applied is to address the issue that knowledge economy activities in dysfunctional

RISs inevitably look unimpressive against well-functioning knowledge laboratories.

What is important is the possibility that these university spaces offer for networks

communities, allowing new connections to be built between knowledge producers and

knowledge users. In each case, the university anchored the community in those

locations, but the value of the community lay in the sum of the knowledge held within

the community as a whole. It was those embedded communities with whom external

actors engaged, but those external actors were also incorporated within the

community. The fact that external actors were active participants in those

communities also shaped the types of knowledge present in those communities, and

further contributed to and reinforced the place-specific knowledges. The overall

effect was that those external actors reinforced the local embeddedness of those

communities, and such communities could be conceived of as being glocal in

Swyngedouws sense of local manifestations of wider structural relationships (ref?).

This is the second feature of the concept of spaces of possibility, that they are not

purely local spaces, but they provide a means for mediating access to global

(external) forces in ways that strengthen rather than undermine regional

economies and communities. Universities appear able to play this role because the

two case study universities are as I have already noted strongly networked within

global networks of academic funding, prestige and power. Malmberg & Power have

noted that large firms can play this role, and large R&D-active firms are active in both

global knowledge production and exploitation networks. Other types of large

organisation might equally play such a role if they have strong global networks on

which they can draw; governments, non-governmental organisations and big

voluntary organisations (e.g. medical research charities) might also be able to play

such a global/ local role if they can leverage their global networks to provide a local

space of knowledge exploitation.

Thirdly, and finally, the concept of the new spaces of possibility, composed of

strongly embedded hybrid global/ local communities, provides an important relational

dimension to new regionalist conceptualisations of economic growth and

development. Global and local actors in both cases retained their individual

autonomy, but together were enrolled into broader composite projects with a series of

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glocal characteristics. In this sense, the economic development of the totemic sites

of the new economy might equally be about the production of such glocal spaces.

This in turn hints that such places not merely old industrial regions, peripheral

regions or fragmented metropolitan regions might better be understood by

decomposing and accounting for their success more explicitly into the various actors

global and local which have come together to reshape those places, and the

mechanisms by which that is achieved.

In this paper, I have argued that less successful regions can make local changes which

have broader impacts within the wider structures within which they are positioned.

What distinguishes economically significant local changes is that they are attractive

for external actors, and external actors contribute to realising and sustaining them. Inoted at the outset that some TIMs appear as purely local features, such as territorial

learning competencies, and the only have value insofar as they are able to influence

external actors. This suggests that those external actors are an intrinsic part of those

local advantages, and that the development trajectories of such places is influenced by

the trajectory of the dialectic interplay between local and global actors within such

apparently glocal spaces. Making more explicit and excavating this global/ local

dialectic in otherwise flat knowledge-based development theories of the new

economy could provide a fruitful avenue for further exploration in conceptualising

and understanding shifting geographies of uneven development in the 21st

century.

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Figure 1 The regional innovation system as a local circulation between globally-

connected regional innovators

Global

market/

production

networks

Source: after Cooke & Piccaluga (2004); in Benneworth (2004)

Universities(Knowledge

Generation Sub-

System)

Businesses

(KnowledgeUtilisation Sub-

system)

Technology

transfer

activity

ExportsLearning

Regional

investment

Demand for

technological

knowledge

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Table 1 Newcastle University interviews (March-July 2004)

Interviewee category Number Interviewee category Number

University senior managers 2 Spin-off/ commercial 3

University BDD 4 Spin-off/ previously academic 5

Academics/ spin-off owners 8 Other firms 4

Business angel 1 Student 1

Former spin-off, now

academic

3 National policy-maker 1

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Table 2 Twente University interviews (July-December 2004)

Interviewee category Number Interviewee category Number

University central employees 5 Spin-off/ commercial 15

University Research Institutes 6 Regional development

organisations

5

Academics 4 Other firms 2

National policy-maker 1 Other Higher Education 1

Independent consultant 5

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Table 3 Employment in the key industrial sectors in the North East of England,

1841 1861 1881 1901 1931 1961 1971 1981 1991

Population 617 942 1458 1995 2515 2610 2678 2636 2602

Coal miners 23 50 96 165 188 118 64 39 11

Iron & Steel - 13 31 34 23 57 56 22 10

Shipbuilding - 7 15 42 51 64 39 26 8

Source: Byrne & Benneworth, 2006

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Table 4 The decline of the Twente textiles industry 1955-1985, employee numbers

Year Employees

1955 44,000

1960 39,500

1965 34,000

1970 22,100

1975 15,300

1980 8,200

Source: Lambooy (1995) on the basis of ETIO-figures

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Table 5 The role of key factors provided by the university in the growth of eight key

spin-offs

Key factor drawn on by firm A B C D 1 2 3 4

Entrepreneurs

Soft Scientific skills

Academic know-how

Premises/ incubators

Hard Formal intellectual property

Venture finance

University / professors customer

Network Administrative structure

Regional image

Source: authors interviews

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Figure 2 The formation of new growth families from spin-off companies in Twente

Shading indicates companies within the same group; a bold title indicates the

company is still operational today; oval companies are spin-offs. A dashed line

indicates invested in, an unbroken line means evolved into

Source: authors interviews; company websites

1991

AXIS M. O.

1988/1994

3T

AXIS I.O.(1999)

TMS(1993)

AXIS W.R.(1999)

LIONIX(2001)

TMSI(2000)

Phoenix

Software(2002)

1995

TMP

Idefix(2003)

Smart-Tip(2004)

C2V(2001)

Medspray(2001)

NANOMI(2004)

1992

Aquamarijn

AXIS V.R(2001)

Ericsson

( art)

Lion

Photonics(2001)

Capilix(2004)

1992

DEMCON

??(2003)

Mimo

Technology(2003)

Art

Innovation(2003)

Micro-

montage(2003)

BBV

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Figure 3 The wider commercialisation community around the University of

Newcastle, 2004

Source: developed from authors own interviews, Benneworth (2007)

Departed

spin-out

firms

Core

business

development

community

University

senior

management

Externally

involved

stakeholders

Academic

entrepreneurs

Third party

firms

Existing

spin-out

firmsUniversity

external

family

University

institutional

boundary

Externally

motivated

mentors

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Figure 4 The development of MESA+ as an anchor point for a wider regional

commercialisation community 1993-2004

1993 membranespin-outs

Source: developed from authors own interviews

MTF

30 Nano

spin-offs

MESA+

Regional

firms

CMO

MESA

UT

Closure

Spin-out

MESA

Spin-out

BTC

Spin-out

daughters2006

UT

Membrane

Technologies

Group

BTCEuropean

Membranes

Institute

Regional

firmsMESA+

laboratories

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Figure 5 The university as a space of opportunity: a heuristic model

1 There is an extensive literature on spin-offs which it is not proposed to review in this stage. For the

purposes of this research, a spin-off company is a company with a link back to the university, in that

the founder was a university employee, or the university supported the entrepreneur in establishing the

company by providing access to laboratory/ office space, loans/ equity or intellectual property which

established a contractual link between the university and the new company (Pirnay et al., 2003). This

definition therefore largely excludes graduate start-ups which start independently of the university, but

does include graduate start-ups formed as a consequence of entrepreneurship promotion schemes, such

as the TOP programme (cffootnote 7).

2 Those documents directly cited in the paper are included in the bibliography; a full list of documents

reviewed is included in Benneworth (2005).

3 More interviews were undertaken in Twente because I did not have a good understanding of the

regional development context in Twente, whilst I had just completed a research project on regional

science policy in the North East England which provided comparable contextual information for the

North East.4 I consulted with academics in each institution with a knowledge of spin-offs to identify a core of

interviewees, and then the same was extended outwards approaching people recommended by theinitial interviewees.

5 For spin-off entrepreneurs, the focus was on their history of entrepreneurship, whilst for university

senior managers, their perceptions of policy evolution were important.

6 There were highly innovative activities in the region, particularly in the staple industries. The Consett

Iron Company pioneered spectrographic purity analysis in the 1950s, and there was world-class

shipbuilding R&D which later combined to become the industrial research organisation, the British

Shipbuilding Research Institute. Local utilities companies had R&D stations in the North East, and

British Gas had its engineering research station in the region at Killingworth. However, privatisation

and a reluctance of central government to invest in R&D in the North East gradually eroded this once

promising public-led research base.

GlobalRegion

Local knowledge

economy

University

Local

actors

Extended

knowledge

economy

Spillover

effectsResource

flows

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7 THT is the abbreviation derived from the Dutch name for the institution, Technische Hogeschool

Twente. Although literally meaning Technical High School, the Hogescholen are now part of the

higher education system as Universities of Professional Education alongside the Scientific Universities

(Garlicket al., 2006). However, despite the name, THT was created as a scientific university ratherthan a university of professional education.

8 The position broadly equates with the position in UK universities of Vice Chancellor; however, the

governance arrangements in Dutch universities are somewhat different to UK universities. UK

universities are traditionally governed by an academic body such as Senate, which appoints the senior

managers drawn primarily from promoted professors. In the Netherlands, universities have a small

executive board, which reports to (and is appointed by) a supervisory board of stakeholders, including

academic representation, but also the government and the Ministry of Education. The Rector

Magnificus is the senior academic representative on the executive board with responsibilities for

teaching and research; the other positions will typically not be held by academics, and have

responsibilities for finance, estates, regional engagement and internationalisation. In practise, there has

been a convergence of these two systems as both Dutch and UK universities come to terms with very

similar external pressures.

9 The most famous of these, about which a great deal has already been written, is the so-called TOP

programme, from the Dutch name, Tijdelijke Ondernemers Programma or Temporary Entrepreneurs

Scheme. The scheme is open to anyone with a business plan to exploit technologies and know-how in

university research groups; in practise this restricts participation to recent graduates and people

working in companies that have research collaborations to the university. This scheme has existed

since 1985, although it has been tweaked in response to experience and the changing demands of

funders.

10 A number of universities do have deals with venture capital firms in which the venture capitalists

assemble teams and invest their own finance to commercialise particular patents. The companies that

firm have no soft links back to the university, the relationship often being limited to the

IP-for-ownership deal.

11

The firms have been anonymised, with firms A to D being from Newcastle University and firms 1 to4 from Twente University.

12 This is not always the case other research projects in Newcastle have identified spin-offs in thefield of drugs discovery which perform specific clinical services for contract research organisations

outside the region, giving very limited regional impact.

13 The firms shown in figure 1 are not necessarily the same firms as shown in table 3.

14 A survey of TOP companies undertaken by the Business School at UT in 2001 showed that at the

time of the survey of 116 respond

paul benneworth

Documents