Chapter 3 - Regional Collaborative Measures
A competition in which local lead bodies ( e.g. Local development groups, city councils) can make bids for funding to develop collaborative innovation initiatives in their region. Key requirements are involvement of firms, higher education institutions and public agencies and the availability of significant co-funding. Schemes are envisaged to receive long-term 5 to 10 year funding and are expected to result in a significant upgrade in regional innovation capacity. Schemes may fund new R&D capacity creation, training and networking activities.
3.1 Introduction
In this chapter we consider the benefits to the Scottish Innovation System of a measure designed to support Regional Collaborative Initiatives. As the Scenario above suggests these would be regional or local initiatives, headed by a local lead body and involving a consortium of local private and public sector organisations. The aim of this type of measure would be to stimulate more intensive local networking, build innovating partnerships or networks and so link leading edge firms within the Scottish Innovation System more strongly to the universities. This would need to be supported by long term funding.
The inspiration for this scenario comes from the Swedish VINNVÄXT programme which itself aims to link university agendas to local innovation and economic development, link universities with local leading edge firms, and develop innovation partnerships among local leading edge firms. The VINNVÄXT programme's design was informed by a number of key concepts related to innovation and regional economic development, including those of the 'innovation system', 'triple helix' models of technological development, notions of the 'functional region', and ideas of 'sustainable growth'. VINNVÄXT differs from earlier initiatives in Sweden in terms of its long-term perspective (ten years), its process support, and the fact that the programme is competitive. Projects that have been granted funding are assessed after 1, 3, 6 and 12 years respectively. Over and above this, there are now a number of researchers who use the VINNVÄXT initiative as a source of practical case studies. This not only brings about greater knowledge of the processes, but also does so at a more strategic level. In addition to this, the VINNVÄXT programme itself is continuously monitored so that future versions can be further improved.
Our assessment of the value of this type of initiative to the SIS proceeds in three stages relating first to the desk-based ex ante evaluation (Section 3.2), second to the feedback from our focus groups (Section 3.3) and third from our key informant interviews (Section 3.4). Section 3.5 summarises the key conclusions.
3.2 Ex Ante Evaluation
One of the main weaknesses highlighted in 'The Scottish Innovation System: Actors, Roles and Actions' report was the general weakness of linkages in the SIS. This was apparent not only in terms of knowledge generation, but also in the exploitation of knowledge and in the mediation and sharing of knowledge. Across each of these categories innovation linkages between indigenous firms were particularly weak. Regional Collaborative Measures that can support greater collaboration, not only between firms but also with other actors, are likely to contribute positively to the innovation system. Support for the Regional Collaborative Measures would need to be long-term - on a 5 to 10 year basis. This is significant in that much collaboration may initially be informal and a significant period may elapse before complementary research interests are identified and direct benefits gained from the initiative.
Support under the Regional Collaborative Measures would be directed at a range of activities from funding new R&D capacity creation, to training and networking activities. As low absorptive capacity has been identified to be a barrier in indigenous Scottish firms undertaking collaborative research with the science base, efforts delivered through Regional Collaborative Measures ( e.g. Training and networking) may increase absorptive capacity, make local firms more aware of the research expertise in the science base and how to access this.
The regional focus of Regional Collaborative Measures would complement that of the cluster and industry groups and is particularly important where collaborations may be informal. Social networks emerging through informal collaborations take time to mature. Frequency of contact may be particularly important in this, a factor which is facilitated by close geographical proximity between partners. Notwithstanding the benefits from collaboration at a regional level, it would be important that the regional collaborative networks formed remained open to the activities of other networks within Scotland, the UK and EU. This would be consistent with the priorities identified in a recent Scottish Science Advisory Council ( SSAC) report 4.
In looking beyond the immediate projects, the successful development of Regional Collaborative Measures could result in a strengthening of the SIS. The short-term, direct and quantifiable benefits arising from this type of initiative would be limited, however. Instead, gains would be longer-term with the embedding of a more open culture of innovation with greater coherence between different regional actors.
In terms of synergy with existing innovation support measures, Regional Collaborative Measures are likely to strongly complement measures operated by Connect Scotland. Although Connect Scotland is more focused on entrepreneurial issues it is probable that the research-based networks arising from this initiative may lead on to the formation of new ventures and receive support through the Connect Scotland initiative. Research Collaborative Measures may also positively influence the activities of Technology Ventures Scotland ( TVS). Collaborative research groups formed through this initiative would need to be considered in formulating a commercialisation strategy for Universities at the regional level.
Undoubtedly indirect benefits would arise from this initiative as areas of complementary research expertise are identified and collaborative research partnerships develop. For example, it may become apparent that technical problems faced by a firm can be addressed by research expertise in the universities. In such cases the organisations may apply for assistance through the SCORE programme. Alternatively, spin-off projects with particular emphasis on co-operation in R&D and knowledge transfer between SME's and universities may arise which would be eligible for SEEKIT funding.
3.3 Feedback from the Focus Groups
The idea of Regional Collaborative Measures received something of a mixed reception from those attending the focus groups. While there was some support for the notion of long-term support for innovation and the strengthening of university-industry links there was doubt about whether Scotland could generate the economies of scale necessary to support the measure and whether the bureaucracy of the scheme might become burdensome. Difficulties identifying appropriate lead bodies were also highlighted.
The key points arising from the discussions were:
- Regional Collaborative Measures were seen by some individuals as having similar aspirations to the Intermediary Technology Institutes. This was regarded as creating some unnecessary overlaps in the innovation support system.
- There were mixed responses to the competitive nature of the initiative. While this was generally welcomed, there was also a concern that this might create competing systems and high-cost bureaucracy
- The long-termism implicit in the Regional Collaborative Measures was perceived as being positive in the sense that many current measures are much more short-term. Inherent in this may be a conflict given that much research is actually short-term. For example, many HEIs work on a 2/3 year timescale and there were said to be lower levels of innovation (measured, for example, by patent registrations) in Scottish universities compared to R&D-intensive universities such as MIT and Imperial.
- Others emphasised that knowledge transfer is often seen as a secondary activity in Scottish HEIs and that there is a long tradition of pure research. One comment was that the gap in firms' R&D spending could be plugged by training and collaboration across sectors. It was noted that exploitation is missing from most proposals and this must go beyond R&D since firms need to see market potential.
- There was a widely-held view that Scotland may not have the economies of scale to operate such a scenario on a sub-national basis. National measures may be necessary to support viable research networks.
- There was some support for the notion of regional networks, however, which might encourages HEIs to work with organisations they do not normally have a chance to work with. One attendee queried:
"Whether there would be restrictions on the size of companies. If not, this would be a good opportunity to enable us to work with other organisations we cannot work with presently."
- Others highlighted the crucial role of the local lead companies in the Regional Collaborative Measures. It was felt that local councils would be the least preferable 'local lead body' to lead such a scenario - given their organisational culture, lack of entrepreneurship, risk averseness etc.
3.4 Feedback from Key Informant Interviews
In general terms, there was little support for this type of measure among our key informants. Business respondents were generally sceptical about the potential leadership of regional consortia and the difficulty of ensuring a commercial focus; those from a public or education sector background were more concerned about the lack of coherence and the potential difficulties of the competitive element of the scheme. Some support was provided for this type of measure from those in the Borders, where the Local Enterprise Companies ( LECs) were said to be possible consortium leaders.
Business responses to this measure tended to focus on the difficulties of identifying appropriate regional lead bodies with the capabilities and commercial focus necessary to make the scheme effective. The following quotes are typical:
"The thought of local councils getting involved in deciding future priorities and making bids etc is frankly frightening -they're just not designed to do this".
"I'm not keen on this, I don't think Local Authorities will be much help in promoting innovation- this would be an automatic turn-off for most business".
"Sounds a bit grandiose. Where would the commercial lead come from? The danger is of it being nothing but public bodied involved, which would defeat the purpose. What would it drive towards any commercial outcome?"
Public and educational sector representatives, however, tended to focus on more strategic aspects of the scheme and emphasised the difficulty of ensuring regional coherence. One informant commented:
"Are we putting too many resources into 'failed' clusters, jumping on different bandwagons? Typically, by the time a government body latches onto something, things have moved on - other places overseas etc. Then getting out of something just as we are getting in. We need to make sure that we don't just end up doing what would have been the right thing to do x years ago. There are also lots of regional schemes- how joined up are they?"
The same point was made by other informants who focussed on the parallels between this measure and the current regionalised funding for the LECs: "This is a bit like funding for LECs already, but focussed on innovation". The similarity between this proposal and the ARC project run by Highlands & Islands Enterprise was also suggested by one respondent. The competitive aspect of the scheme, combined with the regional focus, also raised issues for some public sector representatives in terms of the potential distribution of funds within Scotland and the exclusion of some 'unsuccessful' regions:
"Re the competition aspect - I'm generally in favour of the 'best' being successful- e.g. the 'peer review' aspect of academe. But - from an economic development perspective - sometimes it's more of a cost/benefit approach that is needed".
A more positive view of this scheme was taken by representatives from the Border regions who envisaged the LECs taking a lead role and for whom the long time horizon of the project was said to be a marked contrast to other rural development initiatives. A more negative voice, however, reflected the difficulty of developing effective collaborative networks in rural areas:
"If you are based in a rural part of the UK, you often end up with better collaboration overseas e.g. with Scandinavia etc than you do with 'mainstream' bits of the UK itself. These places are used to dealing with population centres at different ends of the country with very little in between, and therefore isolated centres of excellence e.g. the Norwegian Polar Institute is a viable reality.
3.5 Summary
Ex ante evaluation suggests that this type of measure might strengthen local innovation dynamics in the SIS in the longer term, building local networks and potentially enhancing local spillovers and synergies. There was, however, little support for this type of initiative from system actors. Firms tended to regard local authorities - often seen as the potential lead partners in the regional consortia - as lacking the appropriate expertise to lead consortia effectively. Representatives from the public and educational sectors were more likely to emphasise issues related to critical mass. A mixed view was also taken of the impact of the competitive element of the scheme with a feeling that this might lead to a concentration of resources in central areas.