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From page 431...
... Chapter 7 Clusters and Regional Initiatives Clusters foster the collaboration needed to develop new ideas and bring them to market. In this way, successful clusters significantly improve the return on public investments in R&D and provide global leadership in key technologies.
From page 432...
... 432 RISING TO THE CHALLENGE Michigan: Advanced Batteries North East Ohio: Flexible Electronics, Renewable Energy ¤ ¤ ¤ ¤ New York: Nanotechnology West Virginia: Biometrics, ¤ Energy ¤ New Mexico: Information Technology, Aerospace, Bioscience South Carolina: Automotive Technology, Advanced Materials FIGURE 7.1 U.S. regional innovation clusters discussed in Chapter 7.
From page 433...
... CLUSTERS AND REGIONAL INITIATIVES 433 of research and industrial clusters in China and India and commented that ""the success of these emerging industrial giants of the 21st century cannot be understood without reference to the industrial cluster phenomenon that is embedded within them, housed within such institutional settings as Special Economic Zones and science-based industry parks. All the intellectual machinery developed to understand the rise of clusters in the advanced world is now going to have to be applied in order to make sense of this same phenomenon in the developing world, but in a new context defined by globalization and the emergence of global production networks and global value chains".3 POLICIES TO FOSTER INNOVATION The new competitive landscape is prompting state and regional authorities around the U.S.
From page 434...
... 434 RISING TO THE CHALLENGE requires an entire ecosystem in which high densities of talented people -- researchers, entrepreneurs, and investors -- collaborate to develop and launch new products and companies.5 As Michael Porter observed, to secure competitive advantage against other regions, communities must be able to fully exploit knowledge, relationships, and motivation that "distant rivals cannot match."6 Early U.S. innovation clusters such as Silicon Valley and Greater Boston emerged from the interaction between the private sector and major universities that received substantial federal research funding,7 but with little government design.
From page 435...
... CLUSTERS AND REGIONAL INITIATIVES 435 Until very recently, U.S. federal agencies have done little to support state and regional innovation cluster initiatives.
From page 436...
... 436 RISING TO THE CHALLENGE biotechnology clusters are based in the new Hong Kong Science and Technology Park (see below) .14 • Canada: As part of its goal of developing at least 10 internationally recognized technology clusters,15 Canada has established a network of 17 Centers of Excellence since 2008 in fields such as brain research, optics, and theoretical physics16 • Singapore: Singapore is investing billions of dollars in comprehensive strategies to expand innovation clusters in biomedicine, digital media, and high value-added manufacturing, including microelectronics and new materials (see chapter 3)
From page 437...
... CLUSTERS AND REGIONAL INITIATIVES 437 flexible displays, thin-film photovoltaic cells, medical devices (see chapter 3) .19 Cluster Dynamics Industrial clusters have been the subject of study since the pioneering study of Sheffield's cluster by the British economist Alfred Marshall in the late 19th century.20 He identified three basic advantages of clusters which are still acknowledged and have come to be known as "Marshall's trinity".
From page 438...
... 438 RISING TO THE CHALLENGE John Matthews, who has extensively studied Taiwan's Hsinchu technology cluster, cited data from the Hsinchu Science Park to the effect that firms located in the park were 66 percent more productive than firms located outside of the park.23 He attributed that fact in substantial part to the existence of "inter-firm linkages", cited by Marshall, which facilitated the establishment of highly efficient industry chains based on specialization by individual companies.24 If Matthews' productivity estimate is anywhere near accurate, the implication is that companies' presence in a successful cluster gives them a major cost advantage relative to other companies, regions, and countries. A further implication is that current trends, with see U.S.-originated designs bring manufactured in Asia, could be at least partially offset through the establishment of local manufacturing industry chains in U.S.
From page 439...
... CLUSTERS AND REGIONAL INITIATIVES 439 agreed that state and regional efforts have been "occurring on an ad-hoc basis without a formal U.S. policy." 27 The federal government has become far more engaged in the past few years.
From page 440...
... 440 RISING TO THE CHALLENGE across the country, develop evaluation metrics, and spread best practices.31 • The Small Business Administration is supporting efforts to develop robotics clusters in Michigan, Virginia, and Hawai'i with the help of state agencies and the Department of Defense.32 • The Department of Agriculture proposes a Regional Innovation Initiative in its FY 2011 budget. The agency would set aside 5 percent of the funding from around 20 programs, or about $280 million, would be granted on a competitive basis to pilot projects for regional planning in rural areas to create new industries.33 • The i6 Challenge program, announced by the Department of Commerce in May 2010, announced a $12 million partnership with the National Institutes of Health and the National Science Foundation to award grants to six teams around the country with the most innovative ideas to drive technology commercialization and entrepreneurship.34 • The Department of Labor proposes to use part of its FY 2011 budget request for a Workforce Innovation Fund pursuant to which states and regions would compete for funds by demonstrating a commitment to transforming their workforcesa program which will support cluster initiatives such as ERIC.
From page 441...
... CLUSTERS AND REGIONAL INITIATIVES 441 "Regional innovation clusters have a proven track record of getting good ideas more quickly into the marketplace," Commerce Secretary Gary Locke explained at an NAS symposium. "The burning question becomes, ‘How do we create more of them?
From page 442...
... 442 RISING TO THE CHALLENGE methods and practices, and federal support should leverage existing institutions and programs rather than create new ones. • Encourage self-organization: Clusters should be developed from the ground up rather than designed and driven from afar.
From page 443...
... CLUSTERS AND REGIONAL INITIATIVES 443 designed to spur sound private investment rather than merely distort the market. • Monitor and measure: Performance must be monitored and measured.
From page 444...
... 444 RISING TO THE CHALLENGE appreciation that innovation is a "cognitive and contextual process" that is based on face-to-face interactions, serendipity, and chance encouragers and their outcomes.42 Mark Muro and Bruce Katz of the Brookings Institution offer three reasons why clusters have recently gained the attention of U.S. policy makers.
From page 445...
... CLUSTERS AND REGIONAL INITIATIVES 445 assisting regional economy policy. The authors called on agencies to "link, leverage, and align" their resources with regional innovation cluster initiatives.47 State and Regional Case Studies Michigan's New Battery Cluster The steep decline in Michigan's auto manufacturing industry, which led to the loss of 800,000 jobs over the past decade, prompted state economic development officials to launch an intensive drive to develop new industrial clusters.
From page 446...
... 446 RISING TO THE CHALLENGE partnerships that brought together universities, industry, government agencies, and the U.S. Army -- a large potential customer for high-performance, energysaving rechargeable batteries.
From page 447...
... CLUSTERS AND REGIONAL INITIATIVES 447 Michigan also invested in skilled-worker training and research programs for electrified vehicle technologies. It established the Center of Energy Excellence for advanced batteries under a program in which state funds for research projects are matched by corporations, universities, and national laboratories.
From page 448...
... 448 RISING TO THE CHALLENGE TABLE 7.1 Advanced Battery and Energy Storage Investments in Michigan Company City 1 AVL Ann Arbor 2 TSC Michigan Northville 3 Ricardo Van Buren Twp 4 Magna Kalamazoo 5 FEV Auburn Hills 6 Detroit Testing Laboratory Warren 7 Compact Power Troy 8 Cobasys Orion Twp 9 Battery Solutions Howell 10 A&D Technology Ann Arbor 11 Dow Kokam Midland 12 fortu PowerCell Muskegon 13 Johnson Controls - Saft Holland 14 LG Chem Holland 15 Eaton Galesburg 16 Toda America Battle Creek 17 Magna Electronics Grand Blanc 18 Sakti3 Ann Arbor 19 ALTe Auburn Hills 20 Xtreme Power Wixom 21 Techno SemiChem Northville 22 Azure Dynamics Oak Park 23 Ford Wayne Assembly Wayne 24 Chrysler LLC Auburn Hills 25 GM Warren 26 A123 Systems Romulus 27 A123 Systems Livonia 28 Magna Holdings of America Troy 29 A123 Systems Ann Arbor 30 Bright Automotive Auburn Hills 31 Piston Group Detroit SOURCE: Michigan Economic Development Corporation, 2010. The MEDC is forging deeper partnerships between state agencies, federal agencies such as the DOE and the DOD, and national laboratories.
From page 449...
... CLUSTERS AND REGIONAL INITIATIVES 449 New York State's Nano Initiative Once a thriving center of advanced manufacturing, upstate New York fell on hard economic times as companies such as General Electric, IBM, Eastman Kodak, and Xerox began shifting production in the 1970s to other states and then overseas. The state government's decision in the early 1990s to invest heavily in nanotechnology research was part of a bold campaign to restore the region's industrial dynamism.
From page 450...
... 450 RISING TO THE CHALLENGE the focus has been on constellations of engineering and business people who can communicate easily.64 The campus also is home to the Institute for Nanoelectronics Discovery and Exploration (INDEX) , a $500 million collaboration among 11 top U.S.
From page 451...
... CLUSTERS AND REGIONAL INITIATIVES 451 Just as important for the state of New York, the nano-science compound is starting to make the region a magnet for high-tech manufacturing.69 The biggest industrial investment so far is a $4.5 billion silicon wafer plant being built on once-barren brush land north of Albany by GlobalFoundries, a joint venture between Advanced Micron Devices and an investment vehicle of the Abu Dhabi government. GlobalFoundries plans to become a new power in so-called chip foundries, which fabricate semiconductors on a contract basis.70 New York's nano initiative is branching far beyond semiconductors.
From page 452...
... 452 RISING TO THE CHALLENGE Rensselaer Polytechnic Institute (RPI) in Troy, New York".74 RPI operates an NSF Nanoscale Science and Engineering Center on campus which is pursuing research in areas such as carbon nanotubes and nanotube fabrication, graphenes, and liquids embedded with nanoparticles.
From page 453...
... CLUSTERS AND REGIONAL INITIATIVES 453 Interest in the field by law enforcement agencies and industry surged after the 2001 terrorist attacks on New York and Washington. WVU added one of the nation's first degree-granting programs in biometrics.
From page 454...
... 454 RISING TO THE CHALLENGE WVU also uses the traditional "linear model" of cluster building, Dr. Clements explained, in which research faculty help convert inventions into local businesses that then spawn other businesses.
From page 455...
... CLUSTERS AND REGIONAL INITIATIVES 455 Drawing on the scale and reputation of the Cleveland Clinic, a biomedical cluster in Greater Cleveland also is becoming well established, with more than 600 companies, including imaging giants such as Philips, General Electric, Siemens, Hitachi, and Toshiba. In 2008, the cluster attracted $395 million in venture capital as wells as National Institutes of Health funding.87 The state of Ohio is financially backing these initiatives.88 According to NorTech President Rebecca Bagley, NorTech acts as a "quarterback" for regional cluster initiatives.
From page 456...
... 456 RISING TO THE CHALLENGE can we keep here, how do we build a research capacity, and how do we keep manufacturing processes that make sense for northeastern Ohio? " she said.93 Advanced Energy One of the region's biggest cluster efforts is the Advanced Energy Initiative.
From page 457...
... CLUSTERS AND REGIONAL INITIATIVES 457 Polymers Efforts to broaden Ohio's polymer cluster also are underway. Akron has been a global center for the industry, due to its legacy as the rubber tire capital of America.
From page 458...
... 458 RISING TO THE CHALLENGE mainly on its low cost advantage.104 The state began in 2002 by upgrading research programs at South Carolina's universities. The state legislature funded an endowed chair program to attract high-quality academic researchers, provide facilities and equipment for academic research, and establish the International Center for Automotive Research (CU-ICAR)
From page 459...
... CLUSTERS AND REGIONAL INITIATIVES 459 Detroit, according to Clemson President James Barker109. The Clemson faculty has been regarded as pioneers in vehicle-related R&D since the 1970s, first in rail systems and then in auto modeling and engineering.
From page 460...
... 460 RISING TO THE CHALLENGE Clemson wants CU-ICAR to make an industrial impact far beyond car design. Because automobiles integrate so many complex parts and advanced technologies, Clemson regards the industry as "a platform for innovation that can be translated to countless other products and manufacturing processes," Present Barker explained.
From page 461...
... CLUSTERS AND REGIONAL INITIATIVES 461 for developing clusters in energy and environmental technologies, aerospace, film production, bioscience, information technology, and nanotechnology. The goal was to create new industries and "bridge the gap between federally funded basic R&D and the commercial sector," explained Thomas Bowles, science advisor to then-Gov.
From page 462...
... 462 RISING TO THE CHALLENGE Schott Solar has opened a module plant in Albuquerque. Intel announced a $2.5 billion upgrade to a plant to make 32nm chips.
From page 463...
... CLUSTERS AND REGIONAL INITIATIVES 463 development, entrepreneurial training, shared infrastructure such as incubators and prototyping facilities, and access to early-stage capital. Some cluster initiatives entail substantial new public investments.
From page 464...
... 464 RISING TO THE CHALLENGE jobs.127 There are more than 700 research, science, and technology parks of various stages of development around the world, according to the Association of University Research Parks.128 Research parks help create clusters of knowledge among researchers, academic institutions, companies, and government agencies.129 They incubate and spin off innovation-based companies.130 They provide value-added services and high-quality space and lab facilities that cannot be found on universities campuses.131 Science and research also are valuable for universities and national laboratories that seek to make a broader economic and societal impact.132 As former University of Maryland president C
From page 465...
... CLUSTERS AND REGIONAL INITIATIVES 465 • Zhangjiang High-Tech Park in Shanghai's Pudong district sits on what was farmland in 1992. Now, more than 6,000 companies and 160,000 workers cover 20 square kilometers, with plenty of room to expand.
From page 466...
... 466 RISING TO THE CHALLENGE competition. Presentations at STEP symposia suggests that U.S.
From page 467...
... CLUSTERS AND REGIONAL INITIATIVES 467 United States: Germany: China: M Square Adlershof Science & Zhongguancun Science Park Research Park Technology Park United States: West Lafayette and Discovery Research Parks France: Minatec Research v United States: Park v China: Sandia Science vv v Zhangjiang & Technology Park v vv Hi-Tech Park v v United States: China: Exploration Park v Suzhou Industrial v Park Mexico: v Hong Kong Research & Innovation Science & Technology Park Technology India: Park IIT-Madras Research Park Singapore: One North Science Park FIGURE 7.2 Global research parks discussed in Chapter 7. The Biopolis project in One North is the furthest along.
From page 468...
... 468 RISING TO THE CHALLENGE cognitive science, and devices for wired homes. Fusionopolis is housed in a 24story building designed by renowned Japanese architect Kisho Kurokawa that includes service apartments, experimental theater space, hotels, and a shopping mall featuring smart-shopping technologies.
From page 469...
... CLUSTERS AND REGIONAL INITIATIVES 469 offer business resources, such as one-stop services for accounting, intellectual property advice, and counseling. Some of the most prominent Chinese science parks are not single industry clusters; they are instead characterized by industrial diversity and a high concentration of R&D facilities of universities, corporations, and government research institutes.
From page 470...
... 470 RISING TO THE CHALLENGE China's most expensive real estate markets157. Companies can draw from some 9,000 researchers, scientists, and workers from several nearby universities.
From page 471...
... CLUSTERS AND REGIONAL INITIATIVES 471 Tenants in other industries include Hewlett-Packard, Lenovo, Infineon, Intel, IBM, Citibank, Infosys, SAP, eBay, Dow, and DuPont.162 Like management companies at other research parks in China, Shanghai Zhangjiang has its own direct-investment fund, which it sees not only as a source of capital to seed start-ups but also as a money-making opportunity. The company's has ¥2 billion ($310 million)
From page 472...
... 472 RISING TO THE CHALLENGE Adlershof. Several more institutes and business accelerators are under construction.167 A study by the German Institute for Economic Research (DIW)
From page 473...
... CLUSTERS AND REGIONAL INITIATIVES 473 organizations.172 Many of these former East German scientists now are entrepreneurs.173 Management of the science park is modeled after North Carolina's Research Triangle. Governments provided most of the funds for new buildings.
From page 474...
... 474 RISING TO THE CHALLENGE began as an extension of the national nuclear research institute177 and the Laboratory of Electronics and Information Technologies (Leti) , which spawned Thompson Semiconductor in 1973.178 It then took on a broader mission of promoting public-private research partnerships and the region's industrial base.
From page 475...
... CLUSTERS AND REGIONAL INITIATIVES 475 information technology, for example, and Uttar Pradesh capital Lucknow has industrial and research parks for software and life sciences. Several of the nation's famed Indian Institutes of Technology (IIT)
From page 476...
... 476 RISING TO THE CHALLENGE Leveraging Geography in Hong Kong Hong Kong is using an impressive new science park to develop a range of new industrial clusters and to position itself as a corporate research hub for China and Southeast Asia. The government has invested $1.5 billion so far to build the first two phases of the Hong Kong Science and Technology Park in the New Territories, close to the Chinese city of Shenzhen.
From page 477...
... CLUSTERS AND REGIONAL INITIATIVES 477 incubator.189 Texas A&M and Arizona State University also are among the partners.190 The goal is to help Monterrey develop new, hybrid industries and innovative companies that will be pillars of the region's growth and "promote a new culture of innovation in Nuevo Leon society," according to PIIT Director Jaime Parada.191 Monterrey has several key ingredients for innovation clusters in industries from auto parts and appliances to information technology and life sciences. The state of Nuevo Leon has the highest education level in Mexico.192 The Monterrey metropolitan area has several of Latin America's best universities, including Tecnológico de Monterrey and the University of Monterrey, as well as several major research hospitals.
From page 478...
... 478 RISING TO THE CHALLENGE At a time of intensifying global competition, there is considerable room for improvement in U.S. university research parks.
From page 479...
... CLUSTERS AND REGIONAL INITIATIVES 479 offices, bureaucracy can move too slowly or make obtaining technology too costly for entrepreneurs to seize rapidly evolving market opportunities.201 In other cases, commercialization is stymied by inadequate investment in physical infrastructure and a lack of capital to back promising start-ups and see them through the Valley of Death. Across America, however, new 21st century research parks affiliated with universities and national labs are being established that have been designed after studies of contemporary best practices and the demands of a knowledge economy.
From page 480...
... 480 RISING TO THE CHALLENGE Washington, DC and important nearby research institutions such as the American Center of Physics. M Square will cover 138 acres and have more than 2 million square feet of space when fully built out.
From page 481...
... CLUSTERS AND REGIONAL INITIATIVES 481 The West Lafayette park has nearly 100 high-tech businesses and entities and the nation's largest incubation program, covering 259,000 square feet and housing 57 start-ups. Some $121 million in venture capital has been invested in businesses.
From page 482...
... 482 RISING TO THE CHALLENGE raise more research funds, which surged to $342 million in the 2008-2009 fiscal year. Spurring Entrepreneurialism at Sandia As at many national laboratories engaged in weapons research, the technologies developed at Sandia National Laboratories in Albuquerque, N.M., did little through most of its history to stimulate civilian industries in the surrounding area.
From page 483...
... CLUSTERS AND REGIONAL INITIATIVES 483 Security Agency, and Sandia.215 MESA is used for both classified and nonclassified research and is a state-of-the-art microelectronics fabrication facility that can integrate single chips using different materials in ways not normally available to industry.216 Some of the park's tenants are sizeable. EMCORE, a developer of fiber-optic transmission equipment and solar cells used in spacecraft and terrestrial systems, employs 500 and has invested $104 million in Albuquerque.
From page 484...
... 484 RISING TO THE CHALLENGE reposition it for the future. Dubbed Exploration Park, the campus will support the emerging commercial space industry and new companies spun off from the center's research projects.
From page 485...
... CLUSTERS AND REGIONAL INITIATIVES 485 In the field of lighting, the Kennedy Space Center is developing lightemitting diode (LED) technology to help plants grow in controlled environments such as space.
From page 486...
... 486 RISING TO THE CHALLENGE competitiveness of the U.S. and other nations in a 21st century global economy.
From page 487...
... CLUSTERS AND REGIONAL INITIATIVES 487 entrepreneurialism, but also in the United States. Greater incentives and reform of technology-transfer policies may be required.

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