Charles Benneworth

7/29/2019 Charles Benneworth

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From regional innovation strategies to the multi-level

governance of science, technology and innovation.

Prof David CharlesDavid Goldman Professor of Business InnovationUniversity of Newcastle upon Tyne Business SchoolandDr Paul BenneworthCentre for Urban and Regional Development StudiesUniversity of Newcastle

Newcastle upon Tyne,NE1 7RU, UK

Tel +44 (0) 191 222 3596

[email protected] www.ncl.ac.uk/curds orwww.ncl.ac.uk/unbs

Introduction

In recent years the development of regional innovation strategies has been promotedheavily by the European Commission and in many cases national governments alsoOughton et al, 2002; CEC, 2001; Dohse, 2002). Such strategic approaches recognisean academic consensus over the importance of innovation in regional economic

development, as well as the systemic context of innovation (Morgan, 1997). Someregions constitute systems for learning and innovation that create advantage for thefirms located there (Maskell and Malmberg, 1999). Hence the policy lesson for lesssuccessful regions is to develop strategies for building such innovation systems inorder to realise economic resurgence (Rodriguez-Pose, 1999). It may be argued thatthese strategies have emerged from an optimistic belief that regional innovationsystems can be designed, even though human and financial resources in such regionsmay be limited, as well as in relatively short periods of time. Furthermore, aconceptual leap has been made from the identification of regional innovation systemsin selected successful regions, which have often emerged without strategic intent at aregional policy scale and often map imperfectly onto regional government boundaries,

to the design of policies that aim to construct ideal-type innovation systems, or justexhort firms to be more innovative.

Whilst there have been some successes in strategies to better structure innovationpolicies in some regions, our evaluation of the EU RITTS programme (Charles et al2000) showed the difficulties in achieving success in regions where some form ofsuccessful innovation system was not already in place. Indeed many strategydevelopment processes fail through inadequate resources, limited political support,

poor implementation and commitment, or conflicts with national policies.Furthermore, the drive to engineer regional innovation systems has often led to amyopia as strategy focused purely on the supply and demand for innovation support

services within the region. Thus rather than conceiving of the regional innovation
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system as an open and holistic system, it was seen as closed and narrow in scope. Theconsequences have been initiatives which have struggled to achieve success.

Disenchantment with the low levels of success has stimulated a variety of responses.One approach has been to reduce the emphasis on innovation strategies and switch toother policy fashions such as clusters (OECD, 2001) or the social economy. Otherregions however have sought to rethink the scope of support for innovation and haveexamined more fundamentally the role of science and technology policy, in a senselooking for the regionalisation of science policy as an input to innovation. Moreimportantly, by examining science policy in addition to innovation, a morefundamental debate over the respective competences of regional, national and indeedinternational science policies and bodies has been introduced. The main focus of this

paper is to examine this tendency and explore the implications for regions and forpolicy.

Science policy has traditionally been seen in a national context. Developments inrecent years have included the growth of new governance relationships at national

level, and the collaboration between national governments and internationalorganisations (Laredo and Mustar, 2001). However a new set of regional or sub-national science policy institutions are emerging, most recently in the UK, but in othercountries also. This has created the potential for new areas of contention and debatewithin science governance (Perry, 2003).

Science policy is being caught up within a wider process of devolution in manycountries. Science policy is increasingly seen as a core element of national innovationand economic competitiveness policies, and this is shaping the scientific input into anumber of other policy domains such as regional economic development. Innovation

policy has for a number of years been a growing element of regional economic

development policy, and there has been a growing realisation that such policies relyon a science base that needs to be considered at a sub-national as well as a nationalscale. In the UK such devolution of science policy is clearly apparent within Scotland,

but issues are also emerging in Wales and more recently in some of the Englishregions. The significance of this is recognised recently by the publication of a report

by the House of Lords Select Committee on Science and Technology on science andthe regional development agencies (HoL, 2003). Elsewhere in Europe and in federalgovernance systems science policy is increasingly at least partly a shared competence

between national and state governments.

Since the 1980s new paradigms of regional development, based on the importance ofknowledge and innovation, have been used by regional level authorities and

partnerships to argue for an increased role in the governance of science, technologyand innovation policy. Whilst the primary concern has been to develop capacities and

programmes to promote innovation within regions, this has not stopped at support forknowledge transfer mechanisms, but has also encompassed basic scientificinfrastructure. We can thus identify three dimensions to the debate on regions andscience policy:

The geography of science funding and location of major scienceinfrastructures with associated regional multiplier effects (Charles andBenneworth 2001, Perry 2003),

The potential for regional interests to be involved in the shaping and setting ofscience and technology policy priorities, and


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The regional development implications of science and technology exploitationand commercialisation through innovation policies and the linkage betweenthe science base on regional industry (Cooke, 2003).

These debates have been further complicated by the involvement of the EuropeanCommission in funding science infrastructures, negotiating with national and otherinterests over policy priorities and providing financial support for regional R&Dactivity and exploitation through the research and regional budgets (Charles 2001).

In the development of European Union science policy, recent policy statements havestressed the importance of regions in the mobilisation of research and technologicaldevelopment (RTD), in that regional level actions may be necessary to encourage thegrowth of innovative firms and their integration into a European research area, butalso that to support innovation there is a need for the meshing of policies at local,national and European scales (CEC, 2001). The Commission specifically identifiesissues of research governance in the regions as central to these developments, seen ashaving the aspects of policy shaping, policy making and policy implementation. The

nature of governance relations for research and science in Europe are increasinglymulti-scalar and shared across levels, yet this complexity is not yet fully appreciatedin the UK, where the presumption remains of a national focus for policy. There istherefore a need to examine the ways in which science policy evolves withincountries, the influences and actions at different territorial scales, differences betweenregions, and the nature of the multi-scalar governance that is emerging.

Three key questions may be posed, recognising the uniqueness of different nationalcontexts:

1. How do sub-national governances negotiate within national, and indeedinternational, science and innovation policy frameworks?

2. To what extent do sub-national governances map onto innovation systems, anddoes this provide a sufficient rationale for the institutionalisation of newscience infrastructures at a regional scale?

3. What kinds of mechanisms and instruments are used? Do they follow fashionsor are they appropriate to local contexts? Does sub-national science policylead to wasteful competition and duplication, or are there benefits to nationaland international scientific and economic development?

The primary case studies presented here are from the UK, specifically the North Eastof England, and Australia. Comparison between the UK and a federal non-European

system in the form of Australia which otherwise shares many aspects of UKinstitutional design was felt to be particularly useful.

In the UK we particularly examine the emergence of a new science based programmesupported by one of the new regional development agencies. The North East case isone of the most ambitious, involving a series of centres of excellence drawing uponuniversity expertise, a Science and Industry Council, and exploitation strategies.These regional initiatives seek to develop the basic science infrastructure alongsidethe development of innovation strategies, and so offer direct challenges to previousnational policies of concentrating scientific excellence.

In Australia we examine state-based science and technology strategies in Queensland.

A significant policy development in Australia has been the development of sub-national policies that sought to prioritise investment in key growth clusters, or sectors.


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This has however been paralleled by a prioritisation of certain technologies nationally,with the Australian Research Council for the first time last year earmarking a

proportion of funds for key technologies. In Queensland, the Smart State strategy isa comprehensive state development strategy covering almost all aspects of publicservices. The innovation and economic development aspect has tended to focus on

biotechnology and ICTs, although with other more niche oriented clusters such astourism, sustainable mining, etc. The state government has sought to invest in the

basic science infrastructure, often in niche areas such as tropical R&D, whilst alsodeveloping exploitation strategies. An important issue here has been the role of thestates stepping into areas of policy previously reserved for the national government,

but doing so in order to pursue economic development strategies.

With both countries there is a growing focus on the tensions and interactions betweenthe regional and national science policies. Previous assumptions about the balance

between regional development concerns and scientific excellence are beingchallenged with significance for the direction of national policies.

A shift to a multi-scalar science policy?

There is wide recognition that science policy is no longer purely a matter of nationalpolicy concern, but is a policy domain that is negotiated with both regional-scale andEU-level institutions. Whilst not a novel idea in a variety of other countries, this isquite a surprising notion for many in the UK, where national policy has beendominant.

Why we should see the emergence of a multi-scalar science policy in the UK todaycan be seen as the result of the convergence of a variety of political, economic, andeven science and technology trends, which over the past couple of decades havesubstantially changed the climate for science policy and particularly its role inregional development planning. Four key developments are identified here:

New paradigms of regional development based on innovation and the applicationof knowledge

A growth of devolution movements in a number of European countries

The emergence of new supra-national collaborative bodies such as the EU andtheir enrolment by national states to support economic development andcompetitiveness

New disruptive technologies as windows of opportunity in science policy

Each of these developments is briefly reviewed in turn.

New paradigms of regional development

Much of recent thinking on processes of regional development stresses the role ofknowledge as a development factor, often raising it to an overwhelming importancerelative to more traditional factors such as labour and capital. In such discourses,universities and other knowledge infrastructures also occupy a key role both asresource endowments within the region, but also more interestingly as active

participants in the construction of regional competitive advantage. Regional economicsuccess will depend on the ability to create and apply knowledge that is specific to the

firms in that region in other words it is tacit or difficult to transfer, or is new


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information and can be used locally before being taken up by firms in other locations(Maskell & Malmberg, 1999).

In parallel the foundation of such advantages, knowledge production itself, is alsochanging, and the new production of knowledge thesis (Gibbons et al, 1994) suggeststhat knowledge production is becoming interdisciplinary, reflexive, and more widelynetworked and distributed. The idea of mode 2 knowledge production, asdifferentiated from mode 1 or traditional disciplinary knowledge is a popularcharacterisation of these changes. The mode 2 thesis suggests the reduced relevanceof traditional conceptualisations of innovation as basic knowledge breakthroughsemerging from disciplinary-based academic and public research units, beingtransferred into industrial development labs through codified means. Such linearapproaches to innovation may never have been more than a caricature, but that todaythe need to increase the pace of innovation as product lead-times and life-cyclesreduce and competition becomes more global means such leisurely processes areredundant. Instead knowledge discovery processes become more focused in the

interstices between disciplines, and in new areas yet to be formally institutionalised,and the links between fundamental research and product development become moreinteractive and iterative.

As such then, socialised processes of knowledge production and exploitation suggest,rather than seeing a process of convergence, and the free flow of information andknowledge stimulating economic convergence, there remain intense national andregional inequalities with some regions being seen as centres of knowledge

production, of symbolic analysts (Reich, 1992) and hence of value added and retainedincome. This suggests that knowledge is not so transportable and tends to accumulatein specific places, and hence the importance of knowledge and tacit knowledge in

particular has become a central element of new theories of regional development.

Current economic development theory on knowledge and territorial competitivenessstresses the interaction between access to global sources of knowledge (oftenrepresented as best practice) and localised knowledge arising from theconcentration of sectorally or cluster specific tacit knowledge. Such local knowledgeis developed and shared within a socialised process involving groups ofknowledgeable workers learning-by-doing, moving between firms, and learningthrough firm-to-firm interactions. The local specificity of the knowledge andassociated customs and practices does not mean it is parochial however, as the casesof Silicon Valley and other high technology complexes demonstrate (Saxenian, 1994).Indeed it is the ability to derive global advantage from highly localised knowledge

that is the cornerstone of competitiveness.

The question of equitable distribution of research universities is also linked with therole of knowledge in regional development. As Moss Kanter (1997) has claimed, auniversity has joined an international airport as a must have element in the list ofattributes needed by regions bidding for major inward investment projects. But whilstuniversities have been seen for many years as bait for multinationals, often as a sourceof technically qualified labour, it is in the context of endogenous developmentstrategies that universities have risen to the fore. Exemplars of university spin-offinspired growth and high skill economies have become central to discourses ofknowledge based economic development, reinforced by European programmes such

as the Regional Innovation Strategies (RIS) which emphasise the need to use


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universities and other RTD infrastructures to support small and medium-sizedenterprises (SMEs) and regional competitiveness.

The endogenous development argument also reflects a greater emphasis on locallyspecific responses to the rigours of globalised competition. If the demands ofglobalisation place limits on the ability of national governments to differentiate firmregulation, partly due to the subordination of national policies to new supranationalauthorities, then it is argued that local conditions become more important indifferentiating firm performance.

From this debate we see an increased attention placed in regional development theory,increasingly taken up in policy and practice, on the need for regions to develop theirunderlying knowledge base, and a central element of this is the basic science andtechnology research and development infrastructure, including and particularly thatelement which is funded by the state.

Growth of devolution

A second theme is that of devolution. Across Europe there has been a trend in recentyears towards a higher degree of regional autonomy as governments devolve powersdown to regional level institutions, elected or not, and as regional-level bodies seek toacquire or exercise a greater range of powers. This can be most clearly seen in thecase of devolution in the formerly more centrally governed countries such as Spain,France and the UK, but may also be observed more subtly in the increasedinternational awareness and networking within the states of federal nations also.

Keating has suggested there are varying pressures and strategies being adopted (seeKeating and Loughlin, 1996)

Defensive regionalism responding to threats for change from outside the region,and defending a traditional way of life, traditional industries or specificcommunity characteristics.

Autonomous regionalism claims for regional autonomy on the basis of historicalor ethnically defined identities, such as in Scotland or the Basque Country.

Integrative regionalism a process of modernisation of regions and betterintegration within the nation state, addressing the differentials between theregional and national performance, but without any strong claims for autonomy.

Competitive regionalism the region seeking greater autonomy to engage ineconomic competition with other regions and with the nation state, with the nation

state being seen as an obstacle to development.

Across these different options there is a varying position on the part of the regionregarding the national level of government, from desire for stronger integration, forindependence or to overcome obstacles. Different options may also co-exist within asingle nation state, so in the UK we see autonomous regionalism in the case ofScotland and something more like integrative regionalism in some English regions.These differences in approach combine with different historical traditions ofcentralisation, decentralisation, and devolution, with a number of parallel butdistinctive processes in Europe at present. Examples of devolution anddecentralisation in a variety of countries are presented later in this report.

The demand for greater regionalism is also reinforced by the weakening of the nation-state in the face of globalisation and by the pooling of sovereignty and the subsuming


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of particular policy competences to the EU scale, especially within the context ofeconomic and monetary union. In parallel, regions are responding to the continuingoutcomes of uneven development and the failings of national policies to addressongoing or even widening disparities, in part due to the weakened bargaining powerof national governments over the location of private sector investment.

With specific reference to R&D and science, the distribution of private investment isoften highly skewed between regions, and government expenditure also can be highlydifferentiated. We can see in the case of the UK, that although business expenditureon R&D is highly varied between regions between 0.5% and 2.7% of GDP thegovernment investment in R&D also varies, albeit at a much lower level fromalmost nothing to around 0.4% of GDP.

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Figure 1 R&D expenditure by type as a proportion of GDP for UK regions (2000)

Supra-national collaboration

Initial EC approaches to science and technology policy were seen as addressing the

need for the Community to support centrally certain areas of science where national

governments could not meet the scale requirements, and where the results of theresearch could meet another objective of the EC, e.g. nuclear power meeting energy

policy objectives. This policy was broadly enlarged in the early to mid 1980s on three

fronts: to support strategic technologies where the EC was being left behind (e.g. IT),

to work in areas where a common public interest could be identified (e.g.

environment), and to encourage international co-operation and mobility within the

science community. The latter began to address certain issues of cohesion, but the

prime concern was still support for scientific excellence on a pan-European basis.

In the late 1980s partly arising from the third enlargement (Spain and Portugal) and

the need to raise research and technological development (RTD) in the less favoured

regions some of these developments were strengthened. In the strategic technologiesthere was a shift in emphasis towards the application area rather than the foundation


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technologies. The scope of the Framework Programme in areas such as theenvironment and health was broadened considerably, with new fields of competence

being introduced. Finally, in the interests of cohesion, the mobility and trainingelement was been considerably expanded. In parallel with these developments of theFramework Programme was been the growth of a large number of complementary

policies in technology transfer, in the dissemination of research results, and insupporting RTD activities at the regional level.

This process of expansion and extension of the Framework Programme continuedthrough until the fifth programme, but a more substantial shift is proposed for thesixth programme, focused on the concept of the European Research Area (CEC,2000), with implications both for the role of national governments and for the place ofthe regions in science policy.

The European Research Area (ERA) is a new vision for European research: a visionof a fully developed, functioning and interconnected research space, in which

barriers would disappear, collaboration would flourish and where a functional

integration process would take place CEC, 2001). The idea of the ERA goes beyonda specific programme for collaborative research to embrace greater co-ordination of

public research funded by the member states, and the removal of structural barrierswhich inhibit the mobility of researchers. In parallel the Commission has set newobjectives for raising the overall level of R&D investment in Europe to 3% of GDP,with a majority of this being through the growth of private sector investment.

Whilst much of the ERA agenda is about encouraging greater collaboration betweennational efforts to promote R&D and the pooling of national policy efforts forcollective gain, there is a clear regional dimension also. The Commission recognisesthat many regions are themselves developing RTDI policies often aimed at

strengthening regional advantages, and in many cases involved in inter-regionalcollaboration. Indeed the Commission has itself been very active in supporting theseinitiatives through the Structural Funds and its Innovation programme. Programmessuch as the Regional Innovation Strategies and RITTS have aimed to develop thestrategic capacity of regions to redesign their RTDI systems and introduce new

policies (see Charles et al 2000 for an evaluation of RITTS for example). Where theERA thinking develops these ideas is to recognise that the European objectives are

best served by promoting the development of RTDI capacities in the regions, throughthe effective targeting of European and national policies, and by using the regionalscale for the effective absorption of knowledge developed through policies at anational and European level, especially for SMEs.

As a consequence the Commission has been considering how the various instrumentsavailable under the new Sixth Framework Programme for RTD can be utilised inconjunction with the regional scale of research governance. Actions such as the newnetworks of excellence can be considered to promote collaboration and integration

between centres of excellence, and to involve researchers in less favoured regions.

Thus the increasing involvement of the EU in R&D policy has led both to a new scaleof research and science governance above the national level, with consequences forthe pooling of sovereignty in some areas, as well as greater support for the emergenceof regional scale science governance through direct support for regional strategies anda framework for inter-regional collaboration across national boundaries.


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New disruptive technologies

The final underlying theme in the emergence of regional science policy is theemergence of new science based technologies such as ICTs, biotechnology,nanotechnology, new materials etc. Whilst many of these new technologies areemerging in the main centres for R&D investment, such as Cambridge or SiliconValley, they represent both a window of opportunity for other regions and a perceivedimperative for national and regional governments.

A central issue in many of the newer technologies is their underlying dependence onintegration across disciplines and between research and industry (Gibbons et al,1994). This has implications for the institutional focus of the underlying research as itsuggests the need for new research centres which are unencumbered by traditionaldisciplinary boundaries and relationships. Inevitably such new centres are morefootloose than existing research centres and become an opportunity for regional

bodies as well as individual universities to compete to host such centres. This is wellillustrated by the development of new centres for nanotechnology for example, or by

the competition in Germany for regions to be the focus of biotechnology investment(the BioRegio competition) (Dohse, 2002). The footloose nature of such centres isfacilitated by the initial absence of critical mass and importance of mobile stars whocan be attracted by the promise of high quality facilities and salary packages.

Many regions are now engaged in a competition to gain first mover advantage innovel areas of science and technology, recognising that any windows of locationaladvantage quickly become closed once some regions start to accumulate a criticalmass of researchers. Unfortunately there are a relatively small number of technologiesthat fall into this category and hence a large number of regions have targeted the sametechnologies for investment, with the likelihood that most will not be successful.

A related issue is the importance of political factors such as regulation, especiallyimportant in new technologies with an ethical or environmental dimension such as

biotechnology or nanotechnology. Regions vary greatly in their control overregulatory issues, and often this is primarily a national issue, but within federalsystems where some aspects of regulation are devolved, there is the potential forregions to seek to secure advantage through regulatory means. Thus in Germany someLnder have adopted less stringent controls over biotechnology in order to encouragethe development of the industry.

Multi-scalar science policies in action

The four trends identified above are all contributing to the emergence of newgovernances of science and technology policies. The next sections examine two casestudies of regions within which regional scale science policies have been developingas a result of a combination of these.


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North East England

Since the 1950s there have been periodic studies of the technology base of the North

East and calls for action by central government. Notable among these was the 1966report of the North East Economic Planning Board, 'The Challenge of the ChangingNorth', from which one paragraph deserves reproduction in full as it summarisesexcellently an argument presented at regular intervals since then, and still largely truetoday.

'Unless the important manufacturing industries within the region can bepersuaded to undertake a substantial proportion of the basic developmentwork which underpins their processes, there is a danger that the region will be

condemned to mere productive activity of a kind which is becoming obsolete.Yet the creation of a climate favourable to innovation has scarcely been

helped by there being no government civil research station, and only one of

the research associations in this region; by the Government's heavyinvestment in industries based on the physical sciences (eg electronics) having

been confined to other regions; or by the reluctance of management itself toinvest in research and development. The present technological imbalance

inhibits contact between university departments and industry, discourages

graduates from considering a career in the North, and seriously reduces thechoice of employment available to school leavers with scientific leanings.'

The situation has changed little since the 1960s it seems. The North East still has littlein the way of public R&D infrastructure. There are no government researchestablishments, although prior to privatisation, there were some R&D facilities of

public corporations, such as British Gas, now closed. The only public sector researchfacilities therefore are the universities.

During the early 1980s when the universities, and the then polytechnics, were facingfunding cuts combined with exhortations from government to engage more effectivelywith industry, the regions universities established a number of mechanisms andinitiatives to increase their support for local industry, and also to increase localincome generation. At the level of individual institutions this consisted of science

park developments, industrial consultancy programmes, research clubs, teachingcompany schemes and the like. But there was also the beginning of a more collectiveresponse in the form of HESIN - Higher Education Support for Industry in the North,

a collaborative framework involving the five universities in the region, plus theregional centre for the Open University.

Local authorities in the region also supported the growth of a small number of non-profit research and technology support agencies. Each of these were important to thesubsequent development of a regional strategy in that they grew and developed

beyond their local authority origins, gaining access to other forms of funding, andproviding key resources for subsequent initiatives. However alongside thesesuccesses there were other initiatives that have failed, such as the NewcastleTechnology Centre for example.

In common with most of the peripheral regions of the UK, the North East benefited

little from central government high technology assistance during the 1970s and early1980s. With a low level of high technology industry in the region, and with the little


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technology and stimulate innovation in the regions industries and services,particularly by the extension of links between further and higher education, industryand business support agencies. This particular theme had been specificallyencouraged by the European Commission in response to a perceived problem in thelow levels of RTD and innovation in the region. Although explicitly a part of the bid

for ERDF and ESF support, there was a further objective of using the RITS as a basisfor the broader coordination and management of technology and innovation supportservices across the region.

For operational purposes a Technical Working Group was established chaired by theNorth of England Assembly (NEA), supervised by the RITS Steering Group chairedby DTI. The Technical Working Group comprised a team of experts drawn fromrepresentatives of DTI, TECs, further and higher education, the NorthernDevelopment Company, technology support agencies, the private sector, and localauthorities. As such then the RITS Steering Group was a formal committee ofrepresentatives appointed by DTI on behalf of the government departments involved

in the Structural Funds administration, whereas the Technical Working Group wasmore open to any interested party to attend, and provided more of a brainstormingopportunity.

The process was defined as consisting of two main phases: a first phase that wouldlead to a framework for the initial proposal to the Commission as part of the widerRegional Development Strategy process, and a second phase which was to refine thestrategy for local use in project development and evaluation.

The development of phase 1 was pursued through a series of meetings at which papersand contributions were tabled according to a staged process similar in form to theRITTS/RIS process to emerge within the European Commission,

1. Business needs analysis

2. Review of existing provision of technology support

3. Quantification and matching

4. Establish requirements and formulate policy

5. Define strategic plan

6. Implementation plan

The final draft plan was submitted to the Commission as part of the region'ssubmission for the new 1994-9 objective 2 strategy.

Whilst the phase 1 report went into the Single Programming Document proposals,there was no pressing need for phase 2 other than for the internal rationalisation andrestructuring of the regional infrastructure. Subsequently a proposal was submittedunder the RITTS scheme by NDC and Durham University. The RITTS project thatemerged however was very much a consultant-run project and ultimately had littleimpact on the policy landscape.

Within the SPD for 1994-96, the technology support component became substantiallymore important than previously, with several inter-related elements. First there wereseparate measures for the embedding of inward investors, and the development ofsmall firms, each of which could involve technology support, such as in cluster

projects. But more importantly measure three was aimed at knowledge based


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industries, with a key objective being to increase the involvement of the regionsuniversities with industry, and this funding stream led to a number of key initiatives.

Collaborative regional strategies and projects

In the absence of a strongly directed approach at the regional scale, a series of bottom

up sector-based initiatives emerged in the region, very strongly dependent on fundingopportunities from the EU, both via the regional programmes and the FrameworkProgramme. These built on expertise gained, often with EU funding, by theuniversities and other technology support agencies over the previous ten years or so,and perhaps a strong sense of having to carve out a strategy for themselves in theabsence of a supportive UK government.

Northern Infomatics Applications Agency

NIAA was a non-profit umbrella organisation sponsoring projects aimed at improvingthe social, economic and business wellbeing of the region by the use of informatics.The agency operated with a central Steering Group and Board which were responsiblefor coordination, technical advice and management, but then devolved specific projectactions to sector groups bringing together actors with resources and expertise forimplementation. NIAA was directly involved in EU Information Society initiatives

Knowledge House

Knowledge House was and remains an interface between the local universities andindustry, essentially providing a first point of access for SMEs within each of theindividual institutions. The network consists of a central node within the regionaltechnology centre, and nodes at each university. Node managers respond to enquiriesfrom SMEs and intermediaries, but also proactively develop registers of expertise intheir institutions, organise workshops and other events, oversee quality management

procedures for handling external enquiries and projects and manage consultancy linkswith firms. Again this project was initially funded under the ERDF, although morerecently has been funded by new university outreach funds.

The Three Rivers Project

This 'project' consisted of three academic-industry collaborative centres, located in thethree main conurbations of the region, each of which is located on a different river,hence the name. The three centres were organisationally separate, and emergedindependently, but were badged under a common theme at the instigation of theGovernment Office North East. Each of the centres addressed the needs of a

particular generic type of industry, viewed in terms of the mode of production, andwas based at a university, but with industrial representation on its management board.The three centres were:

European Process Industries Competitiveness Centre (EPICC) based inTeesside University, with support from a number of the large process industrycompanies based in the Teesside region, notably ICI and British Steel.

Centre for Achievement in Manufacturing and Management (CAMM) basedin Sunderland University on Wearside, with a focus on high volume

production industries, undertaking research and consultancy includingbusiness analysis, product design, manufacturing logistics, cost and

performance measurement and supply chain management, and supported by a


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number of inward investors in the area including Nissan, Electrolux, andBlack and Decker.

In Newcastle, an existing Engineering Design Centre in the department ofMarine Engineering in Newcastle University, that had focused on thedevelopment and dissemination of new design techniques in the made-to-orderengineering industries extended its activities through the Regional Centre forInnovation and Design. RCID focused on working with local SMEs on shorterterm projects.

As noted the centres all emerged from slightly different contexts, but shared a set ofcommon principles in terms of the types of service offered, the close involvement oflocal companies, and a collaborative relationship with researchers in other universitieswithin the region. All were dependent on ERDF support, and working within aregional innovation governance system set by the Northern Development CompanyDC and Government Office.

Finally, the end of the 1990s saw the development of the International Centre for Life,

a 64 million development in Newcastle city centre which was initially promoted bythe Tyne and Wear Development Corporation, with funding from the MillenniumLottery Fund and ERDF. ICfL combines, on one site, research laboratories for

Newcastle Universitys Institute for Human Genetics, an incubator for biosciencescompanies, a visitor attraction on the subject of genetics technology, and a smallresearch centre in the sociology and ethics of genetics technology which also has astrong public outreach function. ICfL also hosted a biotechnology clusterdevelopment body BioSci North.

Arrival of RDAs and development of a Regional Economic Strategy

The new Labour government in the UK in the late 1990s sought to strengthen regionaleconomic development through a set of new regional development agencies (RDAs)in the English regions, often incorporating existing small regional bodies, such as

NDC in the North East, with other powers and functions transferred from other publicbodies, into new more powerful regional bodies. In the North East, the new agency,named One NorthEast (ONE), was one of the larger of these bodies, with a high levelof resource relative to the local population base due to the perceived greater needwithin the region. ONE commenced work in 1999, with its initial priorities being to

build the new organisation out of a diverse set of constituent elements, and to developa Regional Economic Strategy according to guidelines set by national government(Benneworth, 2001).

RDAs and the Science Issue in the UK

All of the English RDAs were required to develop innovation action plans as part oftheir initial guidance from government, building upon existing innovation strategiesdeveloped through the government regional offices, often assisted by funding fromthe RITTS and RIS programmes. However, the resources available to the RDAs insupport of this were very limited the Competitiveness Fund launched in 1999

provided 250k per RDA in 1999/2000 and 440k per RDA in 2000/02. RDAs werehighly limited in their use of funds from central government due to the fundingstreams being locked into central government programmes delivered in the regions,yet for some the need to compensate for historically low government R&Dexpenditure in the regions was a key objective.The North East Regional Economic


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Strategy (ONE, 1999) specifically focused on the universities as a vehicle forrebuilding the knowledge base in the absence of government R&D, identifyingPlacing universities and colleges at the heart of the Regions economy as one of sixmain priorities. The weakness of the existing R&D base was recognized and thestrategy stated that There is a widespread belief throughout the Region that the

Government must direct more Treasury funded research to Universities outsideLondon, particularly to the North East. This is essential to underpin the Regionsapproach to promoting knowledge transfer (ONE, 1999, 59). One approach whichwas suggested was the idea of Advanced Centres of Excellence, also termed Centresof Discovery, which like the new International Centre for Life would combineresearch, exploitation, spin offs, educational outreach, training and publicunderstanding of science. Four additional centers were proposed, but with the specifictechnology areas and mechanisms to be decided.

What then accelerated the debate in several of the RDAs was a decision byGovernment to allocate resources for a new synchrotron, known as DIAMOND, not

to a laboratory in Cheshire in the North West as expected, but to Oxfordshire in theSouth East. Regardless of the complex arguments around the decision and thecompeting rationalities (Perry, 2003) the effect was to galvanise the energies of thescientific and political communities in the North West to argue for additional R&Dfunding to compensate for the likely downgrading and potential closure of theDaresbury Laboratory in Cheshire, having lost this investment. As part of the decisionto allocate additional science resources to the region, a study of the science base in theregion was undertaken by Arthur D. Little (ADL, 2001) and a North West ScienceCouncil was established to oversee the development of a future strategy.

The North East RDA and universities recognized the opportunities offered by thismodel, and sought to follow on very rapidly, using a similar approach to help to

clarify its position regarding centres of excellence. Whilst the North East had notsuffered a defining incident such as the Daresbury/Diamond decision, it had seen theclosure of laboratories in former public corporations (British Gas in particular), andits attempts to get on the shortlist for the relocation of the Meteorological Office had

been fruitless. So in early 2001, Arthur D Little were contracted to undertake a reviewof the research base in the North East in relation to current and future needs of keyindustry clusters.

The delivery of the ADL report in August 2001 provided a clear template for theregion, combining some of the experiences of the work in the North West and therefinement of the previous work in the North East. There were several groups of

recommendations:

Specific recommendations regarding clusters and cluster strategies in theregion, and networking within the region and with other neighbouring regions

The formation of a regional Science and Industry Council modeled on theNorth West experience

Further development of the two emergent centers of excellence in the region in life sciences and in nanotechnology (the latter having recently beenannounced as a national initiative based in Newcastle University),

New centers of excellence based on energy and engineering, digital

technologies and process industries,


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An exploitation company, proof of concept funding, and some form of jointventure business school,

Plus further suggestions to enhance recruitment of talent, rationaliseintermediaries, improve the regions image for science and technology andenhance collaboration between the universities. (ADL, 2001)

North East Strategy for Success

ONEs response to the ADL report was the Strategy for Success, submitted to theDTI in the September of 2001, and implementing most of the recommendations of theADL report. The core of the SfS was the formation of a Science and Industry Council,five centers of excellence, each to be established as non-profit companies, and aregional exploitation agency. The five centers would focus on life sciences,nanotechnology, new and renewable energy technologies, digital technologies and

process industries a mixture of novel technologies to the region and existingregional strengths. The regional exploitation agency, now known as NStar, provides

access to finance, proof of concept investment and commercialisation advice andassistance. The Science and Industry Council was established in December 2001, andCEOs for the five centres were recruited during 2002.

During 2003 the five centres have been developing their own models of operation andpreparing business plans. In each case resources have been made available from ONEto pump prime the centres over a five year period, including capital and researchinvestment as well as recurrent costs, but each of the centres has been required to planfor self sufficiency from commercial and investment income at the end of that fiveyear period. Overall it is estimated that the RDA will invest around 200 million overthe five years in the Strategy for Success programme, but aiming to leverage a similar

level of investment from ERDF, Framework Programme and other nationalprogrammes (ONE, 2003). Each of the centres has evolved quite distinct strategiesdepending on the characteristics of the technologies and sectors they support, and onthe legacies of existing centres and activities they have been able to build upon.

Taking the case of the Centre of Excellence for Life Sciences (CELS), this has beenable to build upon the foundations set by the International Centre for Life (ICfL),BioSci North and a set of research programmes and regional networks initiated by theUniversity of Newcastle, such as the Genetics Knowledge Park, one of the regionalhubs of a national initiative to develop post-genomic technologies for the healthsector, and with DoH and DTI funding, and BioNE2t an research council funded post-genomic regional research network which supports scientific networking activities,

expertise databases, symposia etc and develops linkages to businesses regionally andinternationally. The University of Newcastle in particular has been the source ofseveral spin off biotech firms in recent years which have located in the incubatorfacilities of the ICfL, and a key role of CELS is to develop and enhance this process,identifying areas of commercially-relevant research where the region is able toassemble a critical mass, assisting its development, and supporting thecommercialisation process. CELS is however also very externally oriented, seeking todevelop partnerships with other UK regional initiatives and centres of biotechnologyresearch to build complementary networks within a national biotech strategy, as wellas building overseas links and networks.

The New and Renewable Energy Centre (NAREC) also builds upon a series ofexisting assets, in terms of the academic research base such as the Engineering Design


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Centre and RCID in Newcastle, a physical site on the coast with extensive testingfacilities for offshore based systems including converted docks and adjacent

buildings, and an existing network of firms in the renewable energy and offshoresectors. NAREC builds more directly out of the regions historic engineering base andtechnical expertise, as well as the previous rounds of innovation support in the made

to order engineering field. However, the focus is on a new niche field which draws onthat previous expertise in areas where it has not been fully exploited. NAREC, likeCELS also looks to wider collaborative activities and has been working with otherregions in developing a networked model for a new UK energy research centre.

The three other centres are also quite distinct. The Nanotechnology, photonics andmicrosystems centre builds upon an academic research base including the UniversityInnovation Centre for nanotechnology in Newcastle, and photonics expertise inDurham University. The Chemical and Process Industries centre though is moreindustry based and is focused on the former ICI Wilton complex in Middlesbrough,and a corporate R&D centre that is in increasingly fragmented ownership as ICI has

sold off the various businesses on the site to different multinational companies. CPIalso incorporates the EPICC initiative from the previous round of policy. Finally thedigital technologies centre, CODEWorks, is a much more virtual centre linking anumber of university centres and cluster groupings across the region.

Policy issues

In the North East case, we can see the four main drivers of a regional level sciencepolicy outlined earlier coming into play. First, in terms of developments in regionaldevelopment theory and practice, there have been quite dramatic shifts in the policyframework in the region away from some of the traditional instruments andapproaches towards a recognition of the importance of innovation, and within that the

science base. This thinking at the regional scale has been supported by nationalguidance on regional scale policy from the DTI, such as in their requirement for aninnovation action plan, but also and perhaps more forcefully from the EuropeanCommission through successive negotiations on the use of ERDF and the types ofmeasures that the Commission would be prepared to see in the regions plans.

The devolution process is also having an effect, initially through the formation ofRDAs and the gradual process of handing over greater leeway to them to allocategovernment funding towards the needs of the region. As the RDA has gained greaterflexibility, so it has increased the proportion of its expenditure on science andtechnology, creating new regional institutions such as the Science and Industry

Council, and the centres of excellence, and seeking to engage in discussions withnational bodies such as research councils on their allocations of funds to the region.Any further devolutionary moves in the form of an elected assembly may be expectedto have further effects as has been seen in Scotland where the devolution of highereducation policy to the Scottish parliament has led to policy divergence with England.The awakening awareness of S&T issues in the regions institutions including the(currently non-elected) assembly and industry associations is currently focusing onthe low levels of R&D and the need to win greater investment from centralgovernment.

Supra-national policy affects have already been mentioned in connection with theERDF programmes, and this has been the most significant influence from outside theUK. The region, like many others in the UK struggled to benefit from RIS/RITTS


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type strategy development programmes due to a lack of institutional capacity prioir tothe formation of the RDAs, and whilst there have been attempts to learn from otherregions, there has not been such an enthusiasm for such networking as in many other

places in Europe. Direct international research collaboration in the region, such asthrough the Framework Programme has been very limited, due to the weak R&D base

of the region. It is primarily the universities that have been able to participate, and thisexpertise is to some degree being drawn upon in the centres of excellence.

Finally, the developments most recently in the Strategy for Success and centres ofexcellence are strongly focused on new areas of what might be termed mode 2 scienceand technology, particularly where national infrastructures are less well developedand opportunities exist to win resources from the national level. Nanotechnology is aclear example of this, with the region winning investment in the form of a nationalUniversity Innovation Centre the only UIC in the nanotechnology field.

Overall the region presents a clear example of the recognition of the limitations oftraditional approaches to regional development, both in turning away from a previous

emphasis on foreign direct investment towards newer paradigms such as innovationstrategies and social enterprise, culture etc, but then a second recognition that simplyencouraging innovation through SME audits and awareness programmes also doesntwork due to the low technology base of the region and external dependency. It could

be argued that this is either a regional failing in implementation or a limitation of thebasic model and powers, and more likely in this case a combination of the two.

A central problem has been the absence of public R&D within the region, includingindustry oriented public institutions like the Fraunhofer Institutes, or the Basquetechnology centres and hence there has been a heavy reliance on the universities and afew new and small technology intermediaries. The intensity of reliance on the

universities, given the various other demands and stresses on the HE system hasperhaps placed undue stress on universities to deliver on the basis of small levels ofinvestment against an agenda which is new to them. A particular problem has beensustainability of initiatives within the new universities which have otherwise beendenied research funds from national government and hence have struggled to leverage

between ERDF funded regional initiatives and mainstream national research funds.The consequence has been that the somewhat optimistic expectations have at timesnot been fulfilled, and hence promoting a slightly guarded attitude to the universities,and a desire to develop an alternative parallel set of institutions, such as the centres ofexcellence.

Queensland

The second case study is the state of Queensland in Australia which in recent yearshas been using the label the Smart State a whole-of-government initiative of theLabor premier, and which has been re-affirmed after the state election of 2001.Queensland has been perhaps the most interventionist state government in recenttimes, a massive shift in what was formerly the most conservative of states.

A significant policy development in Australia has been the development of sub-national policies that sought to prioritise investment in key growth clusters (Maude,2004), although the term sector still tends to be used in Australia. This has however

been paralleled by a prioritisation of certain technologies nationally, with the


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Australian Research Council for the first time in 2002 earmarking a proportion offunds for key technologies.

In Queensland, the Smart State strategy is a comprehensive state developmentstrategy covering almost all aspects of public services. The innovation and economicdevelopment aspect has tended to focus on biotechnology and ICTs, although withother more niche oriented clusters such as tourism, sustainable mining, etc. Mostrecently a consultation or issues paper has been issued on an R&D strategy for thestate. This notes that,

The Government is also funding initiatives to position Queensland as a worldcentre for critical enabling technologies and new R&D areas such as

information and communication technology, biotechnology, nanotechnology,light metals, new era foods and advanced mining technologies. The

providers of this research are predominantly Queenslands universities,

medical research institutes, co-operative research centres and StateGovernment departments. (Queensland DIIE, 2002a)

The rationale for the Smart State priorities seems to be driven by political visionrather than analysis. The problems of reconciling such grand strategies with thedifficulties of delivery within localised production systems will be a central issue.

Political and economic context

Australia has a distinct political and economic character arising from its colonialhistory and geography. As an extensive, dry and largely uninhabitable continent,Australias colonial population was primarily settled through a small number ofcoastal cities, each acting as a gateway to agricultural and mining resources in theirhinterland. Separate states were established under the control of these cities, which

subsequently federated together in the Commonwealth of Australia (Beer et al 2003).Thus the relationship between states and Commonwealth Government is more like theUS than a European nation state, and powers were granted to the national level fromthe states rather than the other way round.

Thus in terms of science and technology policy, the Commonwealth Government hasoverall leadership of national science and innovation policy, but sharesresponsibilities with the states. The states have traditionally funded research to meetlocal and state management needs, including sponsorship of agriculture, but theCommonwealth government has supplemented that through national institutions suchas CSIRO which is in part concentrated in the Australian Capital Territory (ACT)

around Canberra, and part distributed to the various states. In higher education alsothere is a shared responsibility whilst funding of both teaching and research hasbeen largely transferred over the years to the Commonwealth (and more recently backto the students), the states retain their original rights to regulate the individualuniversities, and have higher education portfolios within their Education departments.Thus in Queensland, the state ministry Education Queensland has an Office of HigherEducation which authorises the operation of public and private universities andaccredits other private providers to deliver higher education courses in Queensland.(http://education.qld.gov.au/strategic/accreditation/university/). State governments areincreasingly engaging with their higher education sectors through additional funds todirect university strategies towards state objectives.

State development policies in Australia are also heavily shaped by their particulargeography. The states are on the one hand dominated in economic and demographic


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terms by the state capitals, which typically account for 60-80% of the statepopulation, and are the major sources of economic growth - Sydney, Melbourne andBrisbane in particular. These modern, service-oriented cities are typically surrounded

by declining resource based regions, and whilst it is the cities which are the sources ofeconomic growth based on services and new industries, economic development policy

has been primarily focused on what is known as Regional and Rural Australia (Beer etal 2003).

With the decline of the traditional resource economy as a consequence of the effectsof globalisation on agriculture, and the hollowing-out of mining operations, so muchof industrial policy and R&D has been focused on the needs of the resource sector.Indeed one might argue that the centrality of rurality and resource industries toAustralian identity, despite the reality of an urban population, has skewed policy.

A recent feature of regional development policy has been the political differencesbetween states and commonwealth government. Since 1996 the Howard LiberalCommonwealth Government has been pushing a small government agenda,

responding to the One Nation right and a constituency in rural areas, and hencehawkish on foreign policy and immigration and supportive of the rural areas butwithout investing in strong institutions. In contrast, all of the State governments haveshifted to Labour but are pro-business and modernising in orientation. Consequentlythere is intense competition between the main parties and tiers of government overwho can best deliver a knowledge economy whilst dealing with the decline ofregional Australia.

A central feature of this agenda is research and innovation policies, and nationalgovernment has been active in developing position papers and policy frameworkssince the late 1990s, but arguably with little direct impact except for the drive towards

a marketised higher education system.Recent Commonwealth policy statements and developments concerning science andtechnology

Dec 1998 Industry policy statement Investing for growth Technology DiffusionProgram

Oct 1999 Shaping Australias Future: Innovation Framework Paper

Dec 1999 HE policy statement Knowledge and Innovation: a policy statement onresearch and research training

Feb 2000 National Innovation Summit

July 2000 National Biotechnology Strategy

Jan 2001Backing Australias Ability: an innovation action plan for the future

April 2002 Higher Education at the Crossroads

May 2003 Our Universities: Backing Australias Future

At the state level, the need to underpin economic development strategies withinnovation resources, and the political concern over the distribution of national R&Dresources between states has stimulated State intervention in what might be termedfootloose R&D. This includes seeking to attract R&D investment, promoting spin off

companies, and attracting Commonwealth funded research.


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0

500000

1000000

1500000

2000000

2500000

3000000

Qld

NSW Vi

c SA WA

Tas

NT ACT

Overseas

Private non-profit

Higher Education

State

Commonwealth

Business

Figure 1 above shows R&D expenditure by type within the states, and is notstandardised for population size. However it provides a good illustration of thedistribution of resources. New South Wales and Victoria are the largest states in

population terms and have the majority of R&D resources, especially from the privatesector. The ACT or capital region despite being small has a high share of university

and commonwealth expenditure, more of the latter than the much larger Queenslandfor example. What is most noticeable about Queensland is the relatively high share ofstate R&D.

Qld as % total

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

Business Commonwealth State Higher

Education

Private non-

profit

Total


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The point about Queenslands state expenditure is demonstrated clearly in the secondfigure. Here we show Queenslands share of the Australian total for various forms ofR&D. Although with around 18% of the national population, Queensland has onlyaround 14% of overall R&D expenditure, less for business and Commonwealthexpenditure, slightly more for universities. However Queensland spends around 26%

of state R&D funds, much greater than the average for states.

Queensland Smart State: Key objectives and prime components

Queenslands Smart State strategy was introduced by an incoming Labourgovernment as a whole-of-government plan for the future. It takes the form of aknowledge-based economic strategy, linked with a desire to build a more cohesivesociety, sustainable development, and more flexible and better targeted publicservices. Within the economic development element of the strategy, the State isaiming to develop Queensland as an Asia-Pacific hub for the new industries of the21st Century - industries such as biotechnology, information technology,nanotechnology and communication technology.

The State has therefore prioritised a set of growth sectors which includes both thehigh tech such as biotechnology and ICT but also low tech where the State hassome advantage such as advanced mining and new era foods. As part of this theState has identified the need to invest more in research and development both in ageneric way and directed towards key target technologies, and two specific cases will

be examined here, biotechnology and tropical science.

A recent consultation or issues paper on an R&D strategy for the state (QueenslandGovernment, 2002) notes that,

The Government is also funding initiatives to position Queensland as a world

centre for critical enabling technologies and new R&D areas such asinformation and communication technology, biotechnology, nanotechnology,light metals, new era foods and advanced mining technologies. The

providers of this research are predominantly Queenslands universities,medical research institutes, co-operative research centres and State

Government departments.

At a more local level specific local authorities have also identified small scale clusterinitiatives such as aerospace in Ipswich, west of Brisbane, a variety of local clusters inLogan, south of Brisbane and pleasure boat building on the Gold Coast.

BiotechnologyAgain, as in the North East, biotechnology is an important element in the statestrategy, and within the universities. Queensland has established a BioindustriesTaskforce within the Department of Innovation and Information Economy and isworking particularly with the three universities in Brisbane to support thedevelopment of the cluster, with the development of significant new researchinfrastructures, new degree courses, support for spin off firms and other networkingand promotional activities.

Employment, although small, is growing rapidly from just over 1225 jobs in October1999 to an estimated 2700 currently, of which the majority are in research institutes.

Particular initiatives include the development of a new Bachelor of BiotechnologyInnovation degree with Queensland University of Technology - an interesting move


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as undergraduate teaching funds are normally provided by the CommonwealthGovernment. The primary research developments have been with the University ofQueensland focused on an Institute for Molecular Bioscience, but another researchcentre is being developed in Griffith University.

The table below illustrates some recent developments.

Queensland support for Biotechnology provided in 2000/01

providing $5.5M towards the establishment of the $100M Institute for MolecularBioscience (IMB) at the University of Queensland, as well as dedicating $77.5M overten years to support the IMB in attracting key researchers and developing strategicresearch programs providing $4.5M towards the establishment of a Centre for Biomolecular Scienceand Drug Discovery and an associated research commercialisation centre at GriffithUniversity's Gold Coast campus providing $0.5M towards the $3M fit-out of laboratory facilities for the Centre for

Immunology and Cancer Research at Princess Alexandra Hospital establishing BioStart, an initiative designed to encourage and support start-ups in

bringing the intellectual property developed in their research activities to aninvestment ready position establishing a networking program (BioLink) that facilitates the development of atight knit, supportive environment within which biotechnology will prosper participating in and supporting Queensland biotechnology missions to major

biotechnology conferences including BioJapan 2000 and Bio2001 in San Diego, USA supporting international biopartnering initiatives that facilitate the commercialdevelopment of Queensland's bioindustries by increasing global competitiveness establishing a Government-wide mechanism to help to identify the key priorities for

research and development spending and provide a clear policy basis upon which toassess individual R&D projects

Source: Queensland Department of Innovation and information Economy 2001

Annual Report.

Perhaps the key element within this whole strategy is the Institute for MolecularBioscience (IMB), at the University of Queensland. This is a major researchinfrastructure, perhaps the biggest single bioscience concentration in the Southernhemisphere, with 800 researchers, and incorporating an ARC research centre in

functional genomics, the HQ of the Australian Genome Research Facility, ARCcentres of excellence in biotech, UQ research centres, part of CSIRO, and staff fromQueensland States Department for Primary Industries.

The State government provided investment of $15m to the $105m capital cost of thebuilding, and $77.5m over ten years for key research programmes. The building islocated centrally on UQs site and brings together all of the constituent elements in aflexible arrangement that encourages interaction between different government anduniversity laboratories.

Whilst UQ has a very successful commercialisation arm Uniquest, perhaps one of themost successful in Australia, IMB was felt to need its own dedicated

commercialisation body IMBcom. IMBcom is actively engaged in the


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commercialisation process through the establishment of new biotech companies andhas a portfolio of 8 spin offs and startups over its first three years.

Tropical Science Strategy

Following on from the biotechnology strategy, the tropical science strategy is a more

place-specific approach to innovation, building upon the special place of Queenslandas an advanced economy in the tropics. Living in a tropical environment brings a setof particular problems, and hence commercial opportunities, which have not typically

been capably of being exploited by other high R&D economies, whilst many of thecountries with such needs have relatively weak innovation potential. Queensland has asignificant opportunity, through its northern areas to assemble considerable R&Dresources within a set of climatic and ecological conditions to address problems ofgreat concern to many tropical economies.

Specific challenges of Queenslands tropical areas offering opportunities for tropical

science exploitation

increased exposure of people, cars, buildings and commodities to intense sunlightand high temperatures, often in very humid conditions;

increased exposure to extreme climatic events such as cyclones, or even intensetropical rain storms;

need forspecial clothing material that will absorb ultra-violet (UV) light (tominimise skin cancer), and clothes that are loose-fitting for air-flow and comfort;

exposure to more frequent occurrence ofvenomous creatures such as the taipan andother snakes, the box jellyfish in coastal waters, and many other stingers.;

impact ofaccelerated rates of ecosystem biological processes such as biomassproduction, carbon and nutrient cycling;

land management issues ofsoil erosion and chemical containment in croppingsystems and mine reclamation;

crops, pastures, trees, herbs, flowers and turf species adapted to sub-tropical/tropical environments; and

increased exposure to vector-borne and other diseases characteristic of the tropics(eg dengue fever).

The tropical science agenda is especially valid in regional development respects due

to the opportunity to address triple bottom line objectives social, ecological andeconomic criteria. The developmental challenges of Northern Queensland are quitedistinct from those of many other more populated parts of Australia. Although avibrant tourism industry has emerged, the challenges of distance, critical mass andaccess to infrastructure combined with the hot humid climate, and considerable social

problems within the indigenous aboriginal community, all add to the difficulties ofeconomic development. The natural resources of the area, with mega-diversity both inthe sea and on land pose enormous responsibilities as well as presenting opportunitiesfor the discovery of new commercially exploitable resources.

There are however some significant R&D resources relative to the small localpopulation - James Cook University, Australian Institute of Marine Science,

University of Central Queensland, CSIRO, Sugar Research Institute, University of


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Queensland, Queensland Government Departments, Cooperative Research Centres,and Great Barrier Reef Marine Park Authority

Better connecting and harnessing these research resources to economic and socialdevelopment strategies is therefore the core of the strategic vision Queenslandrecognised as an international centre of excellence in Tropical Science, involved incollaborations to sustainably improve economic, social and environmental conditions

in Queensland and other tropical areas of the world.

Currently there is also discussion about the wider linkage of this strategy with theNorthern Territory and Western Australia, which also cover the top end of Australia.

Policy Issues in Queensland

How then can we compare the Queensland case with that of the North East? There area number of obvious points of similarity, but also some distinct differences. We startwith the similarities.

First, as in the North East, and elsewhere, we see the increased attention paid toinnovation in the discourse of economic development, both at State level and at lowerregional scales such as in Northern Queensland. Specific policies to promote clustersare being pursued at regional scale in Northern Queensland as well as in the mainmetropolitan South East Queensland around Brisbane. Venture capital, incubators,and spin offs are also actively promoted alongside innovation support for traditionalmanufacturing sectors. Such policies are not supported so fulsomely by the nationalCommonwealth Government innovation and regions are part of the discourse, butintervention at national level is limited in scope.

Devolution is not an active process in Australia due to the federated nature ofAustralian governance, yet what is clear is the strong divergence betweeninterventionist Labour State governments and a small-government LiberalCommonwealth administration. Australians have tended to split their votingintentions, which reflects a distrust of Canberra and a concern for an active Stategovernment close to home. State Governments appear therefore to be increasing theirinvolvement in areas where they previously ceded responsibility to theCommonwealth, such as R&D policy. This is no more apparent than in the case of theAustralian synchrotron, where the State of Victoria stepped in to fund the whole

project when the Commonwealth Government prevaricated. Incidentally Queenslandalso sought to capture this project, but were outflanked by Victoria which was willingto advance the full cost and so trumped Queensland.

Supra-national policy is of course of less concern in Australia, although the context ofinternational investment and competition is a core driver of the strategy. The need toconnect and collaborate with other centres of excellence internationally is a commontheme in the various strategies and initiatives. Going back to the synchrotron thoughthere is a direct international component in that New Zealand is seeking to buy intowhat is essentially a State initiative in Victoria. States are thus increasingly looking toact upon an international stage.

On the issue of mode 2 science and new transdisciplinary areas of science howeverthere is a stronger congruence with the North East, both in the conventional

priorities of biotechnology, ICT and nanotechnology, and also more interestingly in

the selection of tropical science. The latter is clearly mode 2 but building very


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strongly on local assets and demands, and a set of well defined markets in rapidlydeveloping nations in Asia and Africa.

Unlike the North East, the federal nature of the governance and the strength of Statedepartments has led to the existence of a stronger research base in the regions, and anopportunity for bringing a closer link between the operation of government in health,environment etc and innovation system development.

This relieves the universities of some of the burden of expectation we see in the UK,as Australian universities can be the basic research complement to State governmentresearch illustrated perhaps by the role of the Department of Primary Industries inthe IMB project. The potential for a stronger partnership between national, state anduniversity sectors would seem to be stronger where the state has significantresponsibilities, and provides a powerful argument for further devolution in the UK.

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