The Governance of Technological Districts: the Italian ...

International Association for Management of Technology

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The Governance of Technological Districts: the Italian case1

ROBERTO PARENTE Associate Professor of Local Innovation Systems University of Salerno via Ponte Don Melillo 84084 – Fisciano (Sa) – Italy e-mail: [email protected]

MICHELE PETRONE PhD – Research Assistant University of Salerno via Ponte Don Melillo 84084 – Fisciano (Sa) – Italy e-mail: [email protected]

Abstract With specific focus on the Italian case, the paper proposes an interpretative Model on technological districts evolution, based on the governance of relations among stakeholders (University, Government, high-tech firms, venture capital) that make up these districts. Following the Network Theory, the Model defines four different typologies of technological districts (potential, embryonic, developing, successful), characterized by different modes of governance of technological districts’ stakeholders. Particularly assuming that the interests of technological districts’ stakeholders tend to diverge, the Model emphasizes the key role of Public Actor in composing the different interests and objectives, so favouring the evolution of districts. The theoretical analysis is supported by empirical evidences about the policy of the Italian Public Government in the development of technological districts and, more in detail, about the evolutive path of two Italian cases, Imast in Campania Region and Turin Wireless in Piedmont Region. The empirical evidences allow to define some governance conditions that the Public Actor should create to support the development of technological districts. Keywords: Technological Districts, Triple Helix, Governance, Network Theory, Italian Public Policies.

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Although the paper is result of common research activity of two Authors, Roberto Parente has written paragraphs 1, 2, 3, and Michele Petrone has written paragraphs 4, 5, 6.

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Introduction Promoting Technological Districts (TD) is considered by scholars and policy makers as the new frontier in regional competitiveness and development (Cooke et al., 2004). In the last few years the Italian Government, like many other European Governments, has defined a Strategic Plan to develop TD, allocating a large amount of financial resources. Even if the specific measures may differ in each country, the real nature of these Strategic Plans is about the strengthening of University-Industry-Government cooperation. The positive effects of cooperation between such key actors, known as the Triple Helix Model of innovation, has been clearly proven (Etzkowitz, Leydesdorff, 2000). The successes of Silicon Valley and Route 128 in USA (Bank of Boston, 1997), the Cambridge area in UK (Cooke, Huggins, 2004), the Bangalore region in India (Parthasarathy, 2004), among many other cases, have been explained in terms of a full and efficient display of the Triple Helix Model. In our opinion, such empirical studies miss the point to identify a general framework that help to explain the TD development process. To support this research area, the paper promotes an interpretative Model that explains the main conditions in order to build and develop the Triple Helix effects starting from TD that are in the early stage of their development, enabling them to evolve in more mature and sustainable TD. We assume the governance of relations between TD stakeholders (Freeman, 1984) that should converge in the Triple Helix as the key issue of TD evolution. With specific focus on the Italian situation, the paper supports the hypothesis that the evolution of potential TD towards successful TD is connected to effectiveness modes of composing the different objectives of TD stakeholders. Particularly, we analyze the role of the Italian Public Government in composing the divergent interests and objectives of TD stakeholders, this supporting the TD development. In building our Model, we have put together different streams of research: Theories on Local Innovation Systems (Cooke et al., 2004) and the Triple Helix Model (Etzkowitz, Leydesdorff, 2000); Network Theory (Granovetter, 1985; Burt, 1992; Gilsing, 2005) and Theories about Systems structure and evolution (Freeman, 1984; Golinelli, 2005). The paper is made up of six sections, plus an introduction. At the beginning, the concept of TD is defined and the impact of successful TD on local economic growth is underlined (section 1). Then the governance of relations between TD stakeholders is assumed as the key condition for the TD development (section 2). That stated, the paper sketches out an interpretative Model on TD evolution. The Model defines four different typologies of TD, characterized by different modes of governance of TD stakeholders, with a different role that the Public Government plays in each typology (section 3). The Model is supported by empirical evidence, firstly, about the role of the Italian Public Government in TD development (section 4) and then, more in detail, about the evolutive path of two Italian TD cases (section 5). In conclusion, the empirical evidence permits the interpretation of some governance conditions that the Public Government should create to support the TD development, from potential to successful TD (section 6).

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Roberto Parente and Michele Petrone

1. Technological Districts and local development TD are local areas characterized by Universities with excellent scientific research in specific fields, established high-tech firms that have localized knowledge-based activities, and SMEs that are able to develop and apply new technologies. Qualified human resources, strong entrepreneurial spirit, a high rate of academic spin-offs and the availability of risk capital to support high-tech start-ups complete the features that qualify for a successful TD (Cooke, Piccaluga, 2004). In many successful TD, economic growth rates are much higher than the average national rates. In the software TD of Austin, during the period 1989-1997, an annual growth-rate of the population of firms up to 17% has been observed against a decrease (less 1%) in the same period in the US (McKinsey, 2003). In the Silicon Valley, the employment in the period 19952000 increased at an annual rate of 14%, compared to a rate of 2% in the same period in the US (Mckinsey, 2003). The software TD of Bangalore in India, during the 1992-2000 period, reached an annual growth-rate of the population of firms equal to 29% (McKinsey, 2003). In 2006, on a weekly average, four new firms were constituted or received services in the Software Technology Park of Bangalore (about two hundred new firms in a year)2. In the TD of telecommunications of Oulu, Finland, from 1995 to 2000 employment increased at an annual rate of 15%, against a rate of 2,5% in Finland during the 1993-1998 period (Mckinsey, 2003). In the wireless TD of Kista in the Stockholm area, there are about 72% of Swedish firms on wireless and about 65% of Swedish ICT start-ups have been created in Kista (Ragusa, 2006, p. 240). The evidence of these and similar successful incidents have induced many scholars to compare different case histories, in search of commonality. A Research Project at the Massachussets Institute of Technology (“Local Innovation System Project”, conducted from 2002 to 2005, on 23 Local Innovation Systems in six countries3) has concluded that there is not a “one best way” approach to developing a TD, but that there are several successful development models. The MIT Research defined four different models (Lester, 2005): indigenous creation, based on the emergence of an industry that has no technological antecedent in the regional economy but is strictly associated with Universities; transplantation from elsewhere, based on the development of an industry that is new to the region, but in this case the primary mechanism is the importation of the industry from elsewhere; diversification into technologically-related industries, in which an existing industry in a region goes into decline, but its core technologies are redeployed and provide the basis for the emergence of a related new industry; upgrading of existing industries, based on the upgrading of an industry in a region through the infusion of new production technologies or the introduction of product enhancements.

2. The governance issue in Technological Districts development The differences of local contexts, the historical background of technical and scientific knowledge in each context, the nature and the strategic orientation of local actors, make it necessary to define specific development models that emerge coherent with local features. 2 3

Web Site: www.blr.srpi.in. Web Site: http://web.mit.edu/lis/.

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The successful TD, even if not homogeneous in nature, shares the same basic condition that we all know as the Triple Helix Model (Etzkowitz, Leydesdorff, 2000). This Model represents the successful TD as a cluster whose engine has three Helixes: University; Government; Firms and Financial Institutions, that act in synergy and produce a network infrastructure, including tri-lateral initiatives and hybrid organizations. Examples of multilateral initiatives are University-Industry laboratories, public/private investment funds, technology transfer consortiums, etc. If we analyze TD in evolutive terms, the key question becomes why in some local contexts this network infrastructure is realized and why in some local contexts this infrastructure is stronger and more efficient than in other ones. Adopting a systemic approach (Freeman, 1984; Golinelli, 2005), the fundamental hypothesis we share is that the TD development is connected to the commitment of TD stakeholders. The TD is represented as a system in creation that enters into a relationship with different stakeholders. The governance of this system, the ability to make the interests of very different stakeholders compatibles represents the evolutionary factor from potential TD to successful TD a) Technological Districts Stakeholders According to the Triple Helix Model, the main groups of TD stakeholders are: - the Public Government System; - the Research System; - the Financial System; - the Entrepreneurial System. - The Public Government System includes Central and Local Governments. The Central Government, through the definition of available resources for research and innovation and rules using them, determines in a considerable way the intensity and quality of relations between research and industry (Breznitz, 2007). Local Governments can play an important role in the aggregation of local actors, using the institutional tools of public planning. In the meantime, Public Governments have some expectations from TD development, in terms of an increase in local economic development, employment rates, private investments, etc. - The Research System includes Universities, Research Centres, and Talents, i.e. those researchers interested in the exploitation of their academic activities. Universities produce value for TD, mainly through their research and services for the technological transfer. Talents, more directly, produce value for TD if they focalize their academic research on fields with a higher business impact, and/or prefer patents to publications, and/or assume entrepreneurial risk through academic spin-offs (Brett et al., 1991; Blair, Hitchens, 1998). Meanwhile, Universities and Talents can receive benefits if they actively participate in the TD development. Universities find new occasions to finance academic research, with public and private grants that are also condition of attracting the best students and researchers. Talents can find qualified job opportunities or real services and risk capital able to support their academic spin-off in TD.

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- The Financial System is made up of venture capital companies, business angels and banks. Venture capital produce value for TD, offering risk capital, managerial competences and network to support firms in early and developmental stages (Parente, Cerrato, 2002). Venture capital companies invest in TD, only if they receive benefits in terms of privileged access to high quality entrepreneurial ideas, public incentives to reduce the private risk of investments, higher returns as a consequence of favourable conditions and economic development in the area (Aifi, 2004; Parente, Petrone, 2007). - The Entrepreneurial System includes established high-tech firms and local SMEs. The localization of established firms can support the growth of local SMEs and stimulate the creation of new firms. Simultaneously, established high-tech firms localize their assets in a specific TD according to their expectations of privileged access to academic research results, high qualified human resources availability, and/or access to other high-tech firms interested in co-developing new technologies (Schillaci, Di Guardo, 2004). New technologies can also offer development opportunities to local SMEs. They usually operate in traditional sectors and, through the use of new technologies, can obtain new advantages in international competition (Camuffo, Grandinetti, 2005). To summarize, TD development requires the involvement of different stakeholders’ groups, owners of tangible and intangible resources that they commit to clustering strategy in a specific TD only if they foresee adequate benefits (Tab. 1).

Tab. 1 – TD stakeholders: transferable resources and expected benefits STAKEHOLDERS’ GROUPS

Public Government System

COMPOSITION OF STAKEHOLDERS’ GROUPS

TRANSFERABLE RESOURCES TO THE TECHNOLOGICAL DISTRICT

- Central Government - Local Government

- Funds to support TD development - Funds to improve the local area attractiveness - Local network building

- University - Research Centres

- Availability of research labs - Technical-scientific competence

- Talents

- Focus on patents - Assumption of entrepreneurial risk

- Venture capital companies - Business Angels - Banks

- Risk capital - Managerial competency and networking to support start-ups

Research System

Financial System

Entrepreneurial System

- Established high-tech firms

- Local SMEs

- Localization of investments in the area - Networking with local SMEs and public Research Centres - Corporate spin-offs - Entrepreneurial ability

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EXPECTED BENEFITS FROM THE TECHNOLOGICAL DISTRICT - Increase of local socio-economic development - Increase of private investments in the area - Political consent - New funds for academic research - Key role in the local economic development - Attractiveness for Talents - Real services and risk capital to support spin-offs - Qualified job opportunities in private sector - Privileged access to high quality entrepreneurial ideas - Public incentives to reduce the private risk of investments - Clustering - Access to academic research results - Qualified human resources - Other high-tech firms to co-develop new technologies - Product/process innovation - New competitiveness

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b) Potential divergences in TD stakeholders’ interests TD stakeholders (Research System, Public Government System, Financial System, Entrepreneurial System) have their own set of objectives often not fit with the kind of behaviour compatible with TD development: - Universities and researchers prefer publications to patents and academic spin-offs. The set of values (open science) and rules (publish or perish) that are prevalent in the public research system, result very far from the industrial system (Dasgupta, David, 1994; Rolfo, Calabrese, 2006); - Public Governments follow political rules, use bureaucratic languages and often have a short-term point of view (Maggioni et al., 1999); - venture capital companies do not want to support the high costs of due diligence of new entrepreneurial projects, and the long time and high risks necessary to develop high-tech star-ups (Aifi, 2004); - established firms, even if interested in cooperating with Research Centres and SMEs, have strategies and organization that go beyond a specific local context (Torrisi et al., 2004). Among TD stakeholders might be not only divergences in terms of objectives related to TD development, but fundamentally differences in terms of time frame of action, decision process structure and cultural approach to long term cooperation too. These divergences in interests and objectives of TD stakeholders produce failures in their relations and thus limit or stop the TD development. Academic research results have commercial opportunities but they remain unexplored; venture capital companies do not invest in early stage of high-tech firms; Public Governments do not understand the real needs of firms and produce unfit actions; established firms are able to appropriate of local knowledge too, but prefer to produce their economic and occupational development beyond the local boundaries. The ability to reconcile the different interests of TD stakeholders represents the key condition for TD development. Scholars and policy makers have to face up to the governance problem in these TD, i.e. the organization of relationships among parts whose interests could be in conflict (Harper, 1999). The solution of governance problem represents the key element to support the evolution from a condition of potential TD, characterized by few, or completely absent, relations among TD stakeholders, to a successful TD with softer and softer border lines among stakeholders (Fig. 1). Fig. 1 – The governance problem in potential technological districts GOVERNANCE SOLUTIONS

SUCCESFULL TECHNOLOGICAL DISTRICTS

POTENTIAL TECHNOLOGICAL DISTRICTS

PUBLIC GOVERNMENT

UNIVERSITY

UNIVERSITY PUBLIC GOVERNMENT

INDUSTRY

INDUSTRY

FINANCE

FINANCE

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3. The governance of Technological Districts: an interpretative model Following the Network Theory (Granovetter, 1985; Burt, 1992; Gilsing, 2005) and Theory about Systems structure and evolution (Freeman, 1984; Golinelli, 2005), we classify TD according to two items: - the density of ties among TD stakeholders. As defined in Network Theory, density refers to the proportion of present ties in relation to the total number of possible ties in a network (Gilsing, 2005). The distinction between strong and weak ties, as argued by Granovetter (1985), supports the difference between high density and low density ties in TD. According to Granovetter (1985), strong ties are characterized by durability, high frequency of interaction, reciprocity and possibly intimacy. Even if there is not a full overlap between the two concepts, there is a certain correlation between density and strength of ties: dense networks are also characterized by strong ties among actors, and vice versa. For this reason, the conditions of a TD can be qualified in a specific position, along a continuum between “few and weak ties” and “many and strong ties” among actors; - the modes of TD governance. The modes of TD governance are explained using the dichotomy between “hierarchy”, in presence of ex-ante coordination mechanisms of stakeholders’ relations led by a specific organization (Golinelli, 2005), and “market”, where the relations are based on individual and spontaneous actions of stakeholders. Using these two items, TD can be classified in four different typologies: - TD with a low density of ties among actors, whose relations are regulated by occasional contracts; - TD with a low-medium density of ties among actors, whose relations are coordinated by a specific organization; - TD with a medium-high density of ties among actors, whose relations are supported in their development by a specific organization; - TD with a high density of ties among actors, coordinated by quasi-market systems. As the following paragraphs will explain, the Italian experience shows a clear evolutive path of TD that induces to consider the four TD typologies as stages of development, qualifying them as (Fig. 2): - Potential Technological Districts; - Embryonic Technological Districts; - Developing Technological Districts; - Successful Technological Districts.

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Fig. 2 – The evolution of Italian TD: an interpretative Model Successful TD Developing TD HIGH U

Academic Incubators

VC Funds

I

G F

SoC

Univ.- Ind. Labs

DENSITY OF TIES

Embryonic TD Potential TD U

F

G U

SoC

LOW I

I

F

HIERARCHY

MARKET MODES OF TD GOVERNANCE G = Public Government

U = University I= Industry F = Finance SoC = Structure of TD Coordination

1) Potential Technological Districts In this first typology of TD, the ties among stakeholders are very few and weak. Stakeholders’ groups (Public Government System, Research System, Entrepreneurial System, Financial System) are disconnected from each other by a large cognitive distance, a substantial difference in the categories of interests and objectives perceived by each group. In these contexts, market mechanisms result ineffective in developing ties among stakeholders. The density of ties are very low and structural holes (Burt, 1992) are many. The structure of a potential TD can be compared with a “compartmentalized network” (Gilsing, 2005, p. 28). The definition of these contexts as potential TD is substantially due to an excellent academic research in specific fields, even if this is not exploited. 2) Embryonic Technological Districts The Public Government, thanks to institutional leadership and the use of real and financial incentives (Consiglio, Antonelli, 2003), is able to rise as leader organization (defined as structure of TD coordination) in the building of ties among TD stakeholders. The Public Government, through an activities of local development planning, creates the coordination mechanisms of stakeholders’ relations that define a new typology of TD, called embryonic.

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The mode of TD governance becomes strongly hierarchic, as a consequence of full control in network design and development by the public structure. The ties in the embryonic TD increase but remain substantially weak, because the private stakeholders (venture capital companies, established high-tech firms, local SMEs) declare a first and formal interest towards to the TD, but invest limited capital. An embryonic TD can be compared to a “loosely connected networks” (Gilsing, 2005, p. 30), with a low-medium density of ties. 3) Developing Technological Districts In TD defined as developing, the financial resources allocated by the Public Government and the direct involvement of local stakeholders produce hybrid structures, public-private, dedicated to technology transfer activities. University-Industry laboratories, academic incubators, public-private venture capital funds develop in the TD. The ties among stakeholders increase not only in number but also in strength, because of an increased commitment and direct investments by private stakeholders in TD activities. The density of ties reaches a medium-high level. The mode of governance of a developing TD can be defined as semi-hierarchic, because the public structure remains as TD coordinator, but some ties among TD stakeholders begin to develop spontaneously too, without specific intervention from the public structure. 4) Successful Technological Districts In this last typology of TD, identified as ideal final stage of TD development path, the different stakeholders’ groups arrive at aligned interests and objectives: entrepreneurial University produces a lot of patents and academic spin-offs; venture capital companies concentrate their investments in the area and invest in high-tech start-ups; established firms localize high value-added activities in the TD. With these local conditions, the public structure of coordination terminates its role because the different stakeholders’ groups that constitute the Triple Helix perceive spontaneously the great advantages to interact. The Public Government is on the same level as other TD stakeholders. A successful TD can be compared with a “strongly connected network”, with a lot of ties and high frequency of interaction among TD stakeholders (Gilsing, 2005, p. 29). The mode of TD governance evolves from hierarchy to market mechanisms that now result effective to develop ties among stakeholders.

4. The role of Public Government in Technological Districts development: evidences from Italy

a) The Ministerial and Regional Policies The MIUR (Italian Ministry of Research and Education), with Guide Lines for the Scientific and Technology Policy in April 2002 and then with the National Research Programme 20052007, decided to support and finance the creation of TD, through Institutional Agreements that involved Regional and Local Governments, Universities and Research Centres, banks

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and firms. According to the MIUR statements, the Regional Government has to define the TD project to compete for Ministerial Funds (Cotec, 2005). Each Regional Government has promoted preliminary studies to verify the local potentialities to build a TD, particularly an excellent scientific research in a specific field. Regional Governments have also promoted coordination mechanisms with local actors (Universities, Research Centres, Local Governments, Industrial Association, established firms, banks) to involve them in the TD project. In many Italian Regions, MIUR and Regional Government have formally approved the district project through Institutional Agreements, allocating public funds to develop the project (Tab. 2).

Tab. 2 – Technological Districts in Italy TECHNOLOGICAL DISTRICTS

INSTITUTIONAL AGREEMENTS

PUBLIC RESOURCES ALLOCATED

Turin Wireless (Piedmont Region)

Definitive Agreement (May 2003)

52,5 mln Euro

Veneto Nanotech (Veneto Region)

Definitive Agreement (March 2004)

41,8 mln Euro

Technological District on ICT (Lombardy Region)

Definitive Agreement (July 2004)

23,9 mln Euro

Technological District on Advanced Materials (Lombardy Region)

Definitive Agreement (July 2004)

39,9 mln Euro


26 mln Euro

Definitive Agreement (October 2004)

36,4 mln Euro

Technological District on Biotechnology (Lombardy Region) Technological District on Molecular Biomedicine (Friuli Venezia Giulia Region) Technological District on Intelligent Integrated Systems (Liguria Region)

Preliminary Agreement (February 2004)

44,4 mln Euro

Hi-Mech (Technological District on Advanced Mechanics) (Emilia Romagna Region)


50 mln Euro

Technological District on ICT e Security (Tuscany Region)

Preliminary Agreement (December 2005)

-

Technological District on Sustainable Building Material (Umbria Region)

Preliminary Agreement (February 2006 )

-

Definitive Agreement (June 2004)

60 mln Euro

Technological District on Quality and Security of Food (Abruzzo Region)

In constitution

-

Technological District on Agriculture-Industry (Molise Region)

In constitution

-


50,4 mln Euro

Definitive Agreement (April 2005)

13 mln Euro

Technological District on Mechanics-Electronics (Puglia Region)


11,9 mln Euro

Technological District (Puglia Region)


28 mln Euro

In constitution

-

Technological District on Logistics (Calabria Region)

Definitive Agreement (August 2005)

17,8 mln Euro

Technological District on Restoration of Cultural Arts (Calabria Region)

Definitive Agreement (August 2005)

11,4 mln Euro


33,9 mln Euro


10,6 mln Euro


41,1 mln Euro


8 mln Euro

In constitution

-

Technological District on Aerospace (Latium Region)

IMAST (Technological District on Polymeric Materials) (Campania Region) Technological District on Agriculture-Industry (Puglia Region)

Technological District on Technologies for hydro-geological and seismic risks (Basilicata Region)

Technological District on Biomedicine and Health technologies (Sardinia Region) Technological District on Micro-Nano Systems (Etna Valley) (Sicily Region) Technological District on Bio-agriculture and ecological-compatible fishing (Sicily Region) Technological District on Nautical transportations (Sicily Region) Technological District on Sustainable Building Materials (Trentino Alto Adige Region)

Source: MIUR (2006)

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b) The public structure of TD coordination The Italian TD are, usually, managed by a specific public structure of coordination, that assumes the legal form of Foundation or Company (Turin Wireless Foundation in Piedmont Region, Veneto Nanotech company in Veneto Region, Imast company in Campania Region, CBM company in Friuli Region, S.I.I.T. company in Liguria Region, Dhitech company in Puglia Region). Regional and Local Public Governments, Universities and Research Centres are members of these structures of coordination, with the partnership of established firms, local banks, Chamber of commerce. In some Italian TD, the public structure of coordination is the Regional Development Agency, as in Latium TD with the Filas Agency and in Emilia-Romagna TD with the Aster Agency, or is an internal Department of Regional Government, as in Lombardy TD. Generally the constitution of a specific public structure, exclusively dedicated to coordinate the TD, should accelerate its development, assuring: - focus on TD needs; - competence in the specific technological field of the district; - representativeness to private stakeholders; - quicker decisions, avoiding bureaucratic/political procedures.

c) Strategic Plans and Technology Transfer Structures The Italian TD are characterized by different development plans, defined by the public structure of TD coordination in relation to the features of local contexts. Particularly, three strategic development models can be distinguished (Nicolais, 2006): - SME's Development Model. In this case, the local area is characterized by a lot of SMEs, often operating in traditional sectors, and the TD represents the opportunity to transfer new technologies to these firms. Public intervention is based on real services and venture capital funds to support SME's development. An example of this is Turin Wireless TD in the Piedmont Region; - Corporate Research Center Model. In this case, established firms and Universities work together on common R&D projects. The public intervention supports a holding of research laboratories that produce new technologies for established firms. An example of this is Imast TD in the Campania Region; - Investment Creation and Attraction Model. In this case, the TD is based on excellent academic research but there is not a developed industrial basis in the area. The public intervention is based on supporting academic spin-offs and attracting established firms. Academic incubators and seed capital funds are the public structures to support new high-tech entrepreneurship in the area. This model characterizes, in a first developing phase, many Italian TD. Figure 3 summarizes the intervention of the Italian Public Government in TD.

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Fig. 3 – The public intervention in the Italian Technological Districts Ministry of Research and Education

Policy Plans Real services

+

SMEs Development Model

Public Investments in the district Institutional Agreements

Coordination Mechanisms Regional Government

Structure of TD coordination

Strategic Plans

public resources

Corporate Research Centre Model

Investments Creation and Attraction Model

Technology Transfer Structures

public resources

Public-Private Venture Capital Funds

University-Industry Labs

Academic Incubators/ Public Seed Funds

5. The evolutive path of two Italian Technological Districts IMAST (Polymeric and Composite Materials Engineering and Structure) in the Campania Region: an Embryonic Technological District For several years, scientific research in the Campania Region has held a high international status in the polymeric materials field. In this technological field, about 500 researchers work in Campania, 325 of them in public Research Centres (University of Naples “Federico II”, INFM, INFN, CNR, Enea, etc.) and 175 in private and mixed structures. 25% of all Italian scientific papers in the field of polymeric materials have been published by researchers from the Campania Region in international journals with higher impact factors. These scientific publications are among the most quoted in the world and researchers have developed a network of relations with the most important international Universities, such as Stanford University, MIT, Penn State University and Cambridge University. In 2001, the Regional Government of Campania approved the “Regional Strategy to develop innovation”, perceiving the centrality of technology transfer from scientific research to industry as a key factor in future local competitiveness. As a consequence of this new public strategy, in July 2003 the Regional Government and the Italian Ministry of Research and Education signed a Preliminary Agreement to define the guide lines in order to promote a TD on polymeric materials that exploited the high potentialities of scientific research in this field. In February 2004, the public Institutions involved in the TD project constituted the structure of coordination, the Imast company. In 2005, the public iter concluded with the definitive Agreement between MIUR and Regional Government, that allocated in all about 50 million Euros to develop the TD project.

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The Imast company has defined the TD development plan, receiving the interest statements of established firms, such as STMicroelectronics, Alenia Aeronautica, Ansaldo, Mapei, Avio, Pirelli. Some of these agreements were realized through R&D projects and laboratories that involved firms, Universities and Research Centres. In Campania TD, however, the involvement of private venture capital, the technology transfer towards local SMEs, the high-tech start-ups result still very limited, or completely absent. For this reason, Imast company has programmed new interventions.

Turin Wireless in Piedmont Region: a Developing Technological District With a first Memorandum of Understanding in December 2001 and then with a Definitive Agreement in 2003, the Italian Ministry of Research and Education, the Piedmont Region, Local Public Authorities, the Turin Chamber of Commerce, the Polytechnic and the University of Turin, the “Mario Boella” Research Centre, the local Industrial Association and some established firms promoted a TD on wireless in the Turin area. The public resources allocated to support the TD project were about 50 million Euros. The Turin TD is part of a larger development plan designed by the Public Local Authority that, with the first strategic plan of City of Turin passed in 2000 and, later, with the second strategic plan in 2006, has aimed at a knowledge-based local economy. The Foundation Turin Wireless, structure of TD coordination, has supported the TD development through the constitution of public-private organizations dedicated to technology transfer activities. In particular, the Foundation Turin Wireless has defined: - real services for the development of local SMEs (such as business planning, intellectual property assistance, networking, etc.). In the period 2003-2006, the Foundation supported about 300 local SMEs; - assistance in R&D projects and new prototypes of local SMEs, with the partnership of “Boella” Research Centre; - a collaboration with the academic Incubator of Polytechnic of Turin (I3P) to support spinoff firms. The incubator I3P has supported about 80 academic spin-offs; - two public-private venture capital funds, Piemontech and Innogest Capital. Piemontech, started in 2004, is a seed capital Fund of about 4 millions Euros (1.1 millions from Turin Wireless Foundation and the remaining part assembled from local actors, such as Eurofidi, the Turin Industrial Association, the academic Incubator of Polytechnic, Eporgen Venture). Piemontech invests in new high-tech ideas localized in the Turin area whit up to 200,000 Euro per investment. The Innogest Capital, on the other hand, started in 2006, is a Fund of about 60 million Euro. The Fund has been baked by Turin Wireless Foundation and Ersel, a private company in the venture capital sector. The public resources allocated by the Foundation in the Innogest Fund are about 6 million Euros, with the most part invested by private venture capital. The Innogest Capital Fund invests in the early stage of high-tech firms, whit up to about 2 millions Euro per investment. During 2007, the development of Turin TD was enforced through the starting of two new important projects: the Mi.To. Technologies company and the Venture Capital Pole. Mi.To. Technologies is a private company, made up of Turin Wireless Foundation and the Polytech-

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nic of Milan, specializing in intellectual property management for Universities, Research Centres and private firms. The constitution of Mi.To. intends to give a further boost to the exploitation of patents portfolio of Universities and Research Centres in the Turin area, reducing the transaction costs of technology acquisitions and developing Turin Wireless TD as a top level hub in intellectual property management. The development of Venture Capital Pole represents the last challenging objective of Turin Wireless Foundation, that aims at attracting international venture capital companies in the Turin area, such as Intel Capital, 360 Capital Partners, Tlcom Venture Partners, Invest club – club of angel investors, Doughty Hanson, Jupiter Venture and Quantica Sgr. The Turin Wireless Foundation has already actualized some agreements with these venture capital companies.

6. The evolutive conditions of Technological Districts: implications for policy makers The empirical evidences of the Italian TD, following the most consolidated international experience, shows that development of these districts is favoured and enforced by public intervention and governance choices. These public choices can determine the conditions able to transform a potential TD into an embryonic TD, and subsequently into a successful TD (Tab. 3).

Tab. 3 – The evolutive conditions EVOLUTIVE PHASES

EVOLUTIVE CONDITIONS

From Potential TD to Embryonic TD

-

Public funds Local political commitment

From Embryonic TD to Developing TD

-

A specific structure of TD coordination (foundation or company) Political leadership and qualified management in the structure of TD coordination A TD development plan correlated to the features of local industry and to the specific technological field

-

Effectiveness and efficiency of technology transfer structures

From Developing TD to Successful TD

- From Potential TD to Embryonic TD: public funds and local political commitment. Considerable public investments, especially by central Government, constitute a starting point in TD development. However, the public funds of central Government have to find fruitful ground in the commitment of local policy makers, who believe in innovation as a key factor in local development. Local policy makers must to sponsor, finance and support the TD project. In the two Italian TD analyzed, the TD project is part of a larger regional or local strategic plan to support technology transfer and entrepreneurship (the “regional strategy to develop innovation” of the Campania Region and the strategic plan of the City of Turin). The same thing happened in other Italian Regions, such as the Emilia Romagna Region that in 2002 passed Law 7 on “the promotion of the regional system on industrial research, innovation and

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technology transfer”. These public strategic plans trace the local development course, where the TD project is included with the regional funds allocated. - From Embryonic TD to Developing TD: the choices about the structure of TD coordination and the development Plan. In TD building, the choice of a specific structure of coordination (such as a foundation or a company) assures focus and greater coordination of TD activities, makes partnership with private actors easier, curtails political decision times, inducing a more effective public governance. The composition of the structure of TD coordination, in terms of political leadership to support the decisions adopted and a qualified management, can improve the governance effectiveness. Then, the governance effectiveness is concretely connected to the strategic choices adopted by the structure of coordination. The TD development plan should take into consideration the industrial background of the local context in order to support the competitiveness of local SMEs, the innovation of established firms in the area, or to attract outside high-tech firms and support academic spin-offs, the only choice if there is not yet a developed industrial basis. Particularly to attract venture capital into TD, specific public incentives (such as guarantees on a part of the losses or on a minimum return) could improve the risk/opportunity relation for local private investments. The TD development plan should also be determined with regard to the specific technological field of the district. According to the technological field (for instance Ict or biotech), the technology transfer ways, the timing of innovation, the relationship between large and small firms, the start-ups needs could be very different, requiring specific and suitable TD development strategies. - From Developing TD to Successful TD: the effectiveness and efficiency of technology transfer structures The effectiveness and efficiency in the management of structures involved in technology transfer activities (University-Industry labs, academic incubators, public-private venture capital funds) represent the key elements in creating the levels of high-tech entrepreneurship and private investments that qualify a successful TD. At this phase, the regulation for selecting the best entrepreneurial ideas and the quality of services offered to large and small firms become very important. Ultimately, the management of technology transfer structures has to allow a progressive autonomy from public funds, using revenues from patent licensing, capital gain from venture capital funds, fees from services offered, etc. Generally, the experiences of successful TD become visible as the State is gradually replaced by private entrepreneurs who consider investing in the district a profitable enterprise.

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IAMOT Proceedings

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