History Matters: Path dependence and innovation in British city ...

More documents

Recommendations

Info

average in all forms of innovation outcome except ‘advance management techniques’, whereas Swansea underperforms in all forms of innovation outcomes, suggesting that the cumulative characteristics of the local innovation system contribute to the path dependent nature of development. Once a critical mass of innovation is reached it appears to become self-reinforcing, as distinct identifiable innovation and technological paths emerge, as in Cambridge. Not only is there a lack of critical mass in Swansea, which hinders such a self-reinforcing process, the nature of the existing innovation is also generally less radical. Respondents confirm that there is limited R&D within Swansea, which inhibits knowledge creation and innovation outcomes. One of the few Swansea companies cited as successful in innovation is Corus, which sponsors research in the University Engineering School. But while others mention the potential for innovation in the ICT sector in the city, the feeling is that most innovation is not leading edge: “Whether you say it’s product innovation or whether it’s just that they’re using software, and developing web pages, and these types of things...it’s mid-level innovation.” [Interview SW003] Another respondent from the Council comments on the difficulty moving from the ideas stage to patenting: “With the patents idea, to make it commercially viable, is a hell of a leap of faith. In fact, we and the university have discussed that on numerous occasions, because we’ve done joint initiatives where we’ve encouraged people to come forward with their ideas, but where we always failed, is getting that commercialisation of those ideas. Making them venture capital ready, and that’s the huge thing.” [Interview SW005] Having ready access to venture capital – and being viewed as a highly innovative place by venture capital organisations – has certainly been a major factor behind Cambridge’s success. As the Cambridge high-tech cluster has developed, a local venture capital industry has emerged to serve it – a form of coevolution – with some significant players, including Amadeus and Cambridge Gateway Fund. According to Library House some 108 companies in the Cambridge cluster are venture-backed, totalling £600m of institutional capital, making it second only to London, and fourth in Europe (Library House, 2007). Thirty-six per cent of venture-backed cluster companies are in the ‘healthcare and life sciences’ sector. There is also a thriving local business angel community. The general view is that access to venture capital is a strength of the cluster: “Not only is there now a healthy locally-based VC market, Cambridge’s position close to London means that VC organisations there are within easy reach, and view Cambridge favourably. I don’t think venture capital is a problem, though some argue that the British venture capital industry could steer more money into high-tech activity. The key issue is having entrepreneurs who can convince investors, to have ideas that can be brought to market. Cambridge does well here, but can do better.” [Interview CAMB004] Knowledge acquisition and adoption External knowledge networks are key to external knowledge identification and absorption. We have seen that an estimated 96.5 per cent of OECD new research knowledge is created outside the UK (AIM, 2008). This makes international knowledge networks particularly significant in bringing in new ideas and knowledge to particular localities. CIS4 data show that Cambridge firms are generally much more integrated into various networks (government partners, universities, consultants, customers and suppliers) than Swansea firms (Figure 31). Particularly striking is the extent to which Cambridge far outstrips Swansea on almost every type of network, indicating that its firms have much more extensive and intensive relationships with other firms and bodies – and potential access to much richer sets of external knowledge. “It may be that some Cambridge high-tech firms have relationships with other local firms, and might collaborate in some way with them. But my impression is that for most, like us, the customer base is national and even more importantly international, so links outside Cambridge are the key ones. Our fastest growing market is the Far East and China, so that is where we look for relationships with customers and manufacturers. Global relationships matter much more than local ones. To survive you have to think globally.” [Interview CAMB002] 54
Figure 31: Networks of external collaboration CIS4 2002-2004 Government, Public Research Both UK & overseas partners Overseas partners only UK partners only Universities Both UK & overseas partners Overseas partners only UK partners only Consultants, private R&D Both UK & overseas partners Overseas partners only UK partners only Types and locations of collaborations Competitors Both UK & overseas partners Overseas partners only UK partners only Clients or customers Both UK & overseas partners Overseas partners only UK partners only Suppliers Both UK & overseas partners Overseas partners only UK partners only Within Enterprise Group Both UK & overseas partners Overseas partners only UK partners only 0 1 2 3 4 5 6 7 8 9 10 Percentage of firms with external collaboration Swansea Cambridge “We monitor what is going on in all of our potential markets. Much of our business comes from the US. So we have recently set up an office in Cambridge, Massachusetts. The people there will be better placed to know what US customers want, to collaborate with them, and push that aspect of our growth strategy. Setting up that office there will allow us to better gain knowledge from that market, and about our competitors there.” [Interview CAMB003] In Swansea the importance of overseas networks is recognised by respondents as being critical for knowledge identification and absorption. Through the Technium programme, a number of international networks have been set up, for example, linking with science parks in China, South Korea and the US. However, 55
Page 1:
Research report: July 2008 History
Page 4 and 5: Executive summary History matters:
Page 6 and 7: 5. Strong local social networks. By
Page 8 and 9: Acknowledgements This report was wr
Page 10 and 11: Part 1: Introduction 1.1 History ma
Page 12 and 13: Figure 2: Three perspectives on eco
Page 14 and 15: Figure 4: Two alternative path depe
Page 16 and 17: In the long-run, city-regional econ
Page 18 and 19: into new practical and commercial f
Page 20 and 21: Part 2: Path dependence and innovat
Page 22 and 23: Map 2: Introduction of novel produc
Page 24 and 25: Figure 8: Selected cities best fit
Page 26 and 27: Figure 10: Change in knowledge-inte
Page 28 and 29: Figure 12: Knowledge partners locat
Page 30 and 31: Figure 14: Change in proportions of
Page 32 and 33: Figure 15: New firm formation in se
Page 34 and 35: Figure 17: New firm formation by in
Page 36 and 37: Part 3: Cambridge and Swansea: cont
Page 38 and 39: Around the same time, the public se
Page 40 and 41: with around 10-12 firms on each of
Page 42 and 43: Figure 19: The growth of high-tech
Page 44 and 45: Figure 22: Cambridge annual employm
Page 46 and 47: Figure 24: Cambridge and Swansea em
Page 48 and 49: Figure 25: Cambridge and Swansea kn
Page 50 and 51: Figure 27: The explosion of patenti
Page 52 and 53: Figure 29: Cambridge and Swansea na
Page 56 and 57: Figure 32: Cambridge and Swansea na
Page 58 and 59: new technologies, products or proce
Page 60 and 61: innovation. The Cambridge cluster w
Page 62 and 63: Part 4: Why do cities differ in inn
Page 64 and 65: of the subsequent construction of s
Page 66 and 67: These two studies illustrate how qu
Page 68 and 69: 68 or technology transfer programme
Page 70 and 71: Map 4: Warrington Master Plan 1972
Page 72 and 73: Map 6: Analysis of innovation outco
Page 74 and 75: Map 8: Analysis of innovation outco
Page 76 and 77: Map 10: Analysis of innovation outc
Page 78 and 79: Map 12: Analysis of innovation outc
Page 80 and 81: Appendix 2: Secondary data indicato
Page 82 and 83: Indicators of path dependent develo
Page 84 and 85: Table 11: GVA per capita Indicator
Page 86 and 87: Table 17: Patent applications per c
Page 88 and 89: Table 22: Geography of knowledge ne
Page 90 and 91: Table 28: Occupational breakdown of
Page 92 and 93: Cohen, W. and Levinthal, D. A. (199
Page 94: Roberts, M. (2004) The Growth Perfo
show all

History Matters: Path dependence and innovation in British city ...

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?