From regional innovation strategies to the multi-level governance of science, technology and innovation. Prof David Charles David Goldman Professor of Business Innovation University of Newcastle upon Tyne Business School and Dr Paul Benneworth Centre for Urban and Regional Development Studies University of Newcastle Newcastle upon Tyne, NE1 7RU, UK Tel +44 (0) 191 222 3596 d.r.charles@ncl.ac.uk web www.ncl.ac.uk/curds or www.ncl.ac.uk/unbs

Introduction In recent years the development of regional innovation strategies has been promoted heavily by the European Commission and in many cases national governments also Oughton et al, 2002; CEC, 2001; Dohse, 2002). Such strategic approaches recognise an academic consensus over the importance of innovation in regional economic development, as well as the systemic context of innovation (Morgan, 1997). Some regions constitute systems for learning and innovation that create advantage for the firms located there (Maskell and Malmberg, 1999). Hence the policy lesson for less successful regions is to develop strategies for building such innovation systems in order to realise economic resurgence (Rodriguez-Pose, 1999). It may be argued that these strategies have emerged from an optimistic belief that regional innovation systems can be designed, even though human and financial resources in such regions may be limited, as well as in relatively short periods of time. Furthermore, a conceptual leap has been made from the identification of regional innovation systems in selected successful regions, which have often emerged without strategic intent at a regional policy scale and often map imperfectly onto regional government boundaries, to the design of policies that aim to construct ideal-type innovation systems, or just exhort firms to be more innovative.

Whilst there have been some successes in strategies to better structure innovation policies in some regions, our evaluation of the EU RITTS programme (Charles et al 2000) showed the difficulties in achieving success in regions where some form of successful innovation system was not already in place. Indeed many strategy development 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 a myopia as strategy focused purely on the supply and demand for innovation support services within the region. Thus rather than conceiving of the regional innovation

system as an open and holistic system, it was seen as closed and narrow in scope. The consequences 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 to other policy fashions such as clusters (OECD, 2001) or the social economy. Other regions however have sought to rethink the scope of support for innovation and have examined more fundamentally the role of science and technology policy, in a sense looking for the regionalisation of science policy as an input to innovation. More importantly, by examining science policy in addition to innovation, a more fundamental debate over the respective competences of regional, national and indeed international 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 for policy.

Science policy has traditionally been seen in a national context. Developments in recent years have included the growth of new governance relationships at national level, and the collaboration between national governments and international organisations (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 other countries also. This has created the potential for new areas of contention and debate within science governance (Perry, 2003).

Science policy is being caught up within a wider process of devolution in many countries. Science policy is increasingly seen as a core element of national innovation and economic competitiveness policies, and this is shaping the scientific input into a number 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 rely on a science base that needs to be considered at a sub-national as well as a national scale. 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 English regions. 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 and the regional development agencies (HoL, 2003). Elsewhere in Europe and in federal governance 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 of knowledge and innovation, have been used by regional level authorities and partnerships to argue for an increased role in the governance of science, technology and innovation policy. Whilst the primary concern has been to develop capacities and programmes to promote innovation within regions, this has not stopped at support for knowledge transfer mechanisms, but has also encompassed basic scientific infrastructure. We can thus identify three dimensions to the debate on regions and science policy:

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

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

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

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

In the development of European Union science policy, recent policy statements have stressed the importance of regions in the mobilisation of research and technological development (RTD), in that regional level actions may be necessary to encourage the growth of innovative firms and their integration into a European research area, but also that to support innovation there is a need for the meshing of policies at local, national and European scales (CEC, 2001). The Commission specifically identifies issues of research governance in the regions as central to these developments, seen as having the aspects of policy shaping, policy making and policy implementation. The nature of governance relations for research and science in Europe are increasingly multi-scalar and shared across levels, yet this complexity is not yet fully appreciated in the UK, where the presumption remains of a national focus for policy. There is therefore a need to examine the ways in which science policy evolves within countries, the influences and actions at different territorial scales, differences between regions, and the nature of the multi-scalar governance that is emerging.

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

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

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

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

The primary case studies presented here are from the UK, specifically the North East of England, and Australia. Comparison between the UK and a federal non-European system in the form of Australia which otherwise shares many aspects of UK institutional design was felt to be particularly useful.

In the UK we particularly examine the emergence of a new science based programme supported by one of the new regional development agencies. The North East case is one of the most ambitious, involving a series of centres of excellence drawing upon university expertise, a Science and Industry Council, and exploitation strategies. These regional initiatives seek to develop the basic science infrastructure alongside the development of innovation strategies, and so offer direct challenges to previous national 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.

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 is a comprehensive state development strategy covering almost all aspects of public services. The innovation and economic development aspect has tended to focus on biotechnology and ICTs, although with other more niche oriented clusters such as tourism, 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 also developing exploitation strategies. An important issue here has been the role of the states 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 between the regional and national science policies. Previous assumptions about the balance between regional development concerns and scientific excellence are being challenged 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 national policy concern, but is a policy domain that is negotiated with both regional-scale and EU-level institutions. Whilst not a novel idea in a variety of other countries, this is quite a surprising notion for many in the UK, where national policy has been dominant.

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

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

A growth of devolution movements in a number of European countries

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

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 of knowledge as a development factor, often raising it to an overwhelming importance relative to more traditional factors such as labour and capital. In such discourses, universities and other knowledge infrastructures also occupy a key role both as resource endowments within the region, but also more interestingly as active participants in the construction of regional competitive advantage. Regional economic success 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

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 also changing, and the new production of knowledge thesis (Gibbons et al, 1994) suggests that knowledge production is becoming interdisciplinary, reflexive, and more widely networked and distributed. The idea of mode 2 knowledge production, as differentiated from mode 1 or traditional disciplinary knowledge is a popular characterisation of these changes. The mode 2 thesis suggests the reduced relevance of traditional conceptualisations of innovation as basic knowledge breakthroughs emerging from disciplinary-based academic and public research units, being transferred into industrial development labs through codified means. Such linear approaches to innovation may never have been more than a caricature, but that today the need to increase the pace of innovation as product lead-times and life-cycles reduce and competition becomes more global means such leisurely processes are redundant. 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 more interactive 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 and knowledge stimulating economic convergence, there remain intense national and regional inequalities with some regions being seen as centres of knowledge production, of symbolic analysts (Reich, 1992) and hence of value added and retained income. This suggests that knowledge is not so transportable and tends to accumulate in 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 competitiveness stresses the interaction between access to global sources of knowledge (often represented as “best practice”) and localised knowledge arising from the concentration of sectorally or cluster specific tacit knowledge. Such local knowledge is developed and shared within a socialised process involving groups of knowledgeable workers learning-by-doing, moving between firms, and learning through firm-to-firm interactions. The local specificity of the knowledge and associated customs and practices does not mean it is parochial however, as the cases of 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 the role of knowledge in regional development. As Moss Kanter (1997) has claimed, a university has joined an international airport as a ‘must have’ element in the list of attributes needed by regions bidding for major inward investment projects. But whilst universities have been seen for many years as bait for multinationals, often as a source of technically qualified labour, it is in the context of endogenous development strategies that universities have risen to the fore. Exemplars of university spin-off inspired growth and high skill economies have become central to discourses of knowledge based economic development, reinforced by European programmes such as the Regional Innovation Strategies (RIS) which emphasise the need to use

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

The endogenous development argument also reflects a greater emphasis on locally specific responses to the rigours of globalised competition. If the demands of globalisation place limits on the ability of national governments to differentiate firm regulation, partly due to the subordination of national policies to new supranational authorities, then it is argued that local conditions become more important in differentiating 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 their underlying knowledge base, and a central element of this is the basic science and technology research and development infrastructure, including and particularly that element which is funded by the state.

Growth of devolution A second theme is that of devolution. Across Europe there has been a trend in recent years towards a higher degree of regional autonomy as governments devolve powers down to regional level institutions, elected or not, and as regional-level bodies seek to acquire or exercise a greater range of powers. This can be most clearly seen in the case 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 increased international awareness and networking within the states of federal nations also.

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

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

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

• Integrative regionalism – a process of modernisation of regions and better integration within the nation state, addressing the differentials between the regional and national performance, but without any strong claims for autonomy.

• Competitive regionalism – the region seeking greater autonomy to engage in economic 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 region regarding the national level of government, from desire for stronger integration, for independence or to overcome obstacles. Different options may also co-exist within a single nation state, so in the UK we see autonomous regionalism in the case of Scotland and something more like integrative regionalism in some English regions. These differences in approach combine with different historical traditions of centralisation, decentralisation, and devolution, with a number of parallel but distinctive processes in Europe at present. Examples of devolution and decentralisation 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

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

With specific reference to R&D and science, the distribution of private investment is often highly skewed between regions, and government expenditure also can be highly differentiated. We can see in the case of the UK, that although business expenditure on R&D is highly varied between regions – between 0.5% and 2.7% of GDP – the government investment in R&D also varies, albeit at a much lower level – from almost 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 the research 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 technologies there was a shift in emphasis towards the application area rather than the foundation

technologies. The scope of the Framework Programme in areas such as the environment and health was broadened considerably, with new fields of competence being introduced. Finally, in the interests of cohesion, the mobility and training element was been considerably expanded. In parallel with these developments of the Framework Programme was been the growth of a large number of complementary policies in technology transfer, in the dissemination of research results, and in supporting RTD activities at the regional level.

This process of expansion and extension of the Framework Programme continued through until the fifth programme, but a more substantial shift is proposed for the sixth 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 of the regions in science policy.

The European Research Area (ERA) is a new vision for European research: a vision of 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 beyond a specific programme for collaborative research to embrace greater co-ordination of public research funded by the member states, and the removal of structural barriers which inhibit the mobility of researchers. In parallel the Commission has set new objectives 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 between national efforts to promote R&D and the pooling of national policy efforts for collective gain, there is a clear regional dimension also. The Commission recognises that many regions are themselves developing RTDI policies often aimed at strengthening regional advantages, and in many cases involved in inter-regional collaboration. Indeed the Commission has itself been very active in supporting these initiatives through the Structural Funds and its Innovation programme. Programmes such as the Regional Innovation Strategies and RITTS have aimed to develop the strategic 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 the ERA thinking develops these ideas is to recognise that the European objectives are best served by promoting the development of RTDI capacities in the regions, through the effective targeting of European and national policies, and by using the regional scale for the effective absorption of knowledge developed through policies at a national and European level, especially for SMEs.

As a consequence the Commission has been considering how the various instruments available under the new Sixth Framework Programme for RTD can be utilised in conjunction with the regional scale of research governance. Actions such as the new networks 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 scale of research and science governance above the national level, with consequences for the pooling of sovereignty in some areas, as well as greater support for the emergence of regional scale science governance through direct support for regional strategies and a framework for inter-regional collaboration across national boundaries.

New disruptive technologies The final underlying theme in the emergence of regional science policy is the emergence of new science based technologies such as ICTs, biotechnology, nanotechnology, new materials etc. Whilst many of these new technologies are emerging in the main centres for R&D investment, such as Cambridge or Silicon Valley, they represent both a window of opportunity for other regions and a perceived imperative for national and regional governments.

A central issue in many of the newer technologies is their underlying dependence on integration across disciplines and between research and industry (Gibbons et al, 1994). This has implications for the institutional focus of the underlying research as it suggests the need for new research centres which are unencumbered by traditional disciplinary boundaries and relationships. Inevitably such new centres are more footloose than existing research centres and become an opportunity for regional bodies as well as individual universities to compete to host such centres. This is well illustrated 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 is facilitated by the initial absence of critical mass and importance of mobile ‘stars’ who can 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 in novel areas of science and technology, recognising that any windows of locational advantage quickly become closed once some regions start to accumulate a critical mass of researchers. Unfortunately there are a relatively small number of technologies that fall into this category and hence a large number of regions have targeted the same technologies for investment, with the likelihood that most will not be successful.

A related issue is the importance of political factors such as regulation, especially important in new technologies with an ethical or environmental dimension such as biotechnology or nanotechnology. Regions vary greatly in their control over regulatory issues, and often this is primarily a national issue, but within federal systems where some aspects of regulation are devolved, there is the potential for regions to seek to secure advantage through regulatory means. Thus in Germany some Länder have adopted less stringent controls over biotechnology in order to encourage the development of the industry.

Multi-scalar science policies in action The four trends identified above are all contributing to the emergence of new governances of science and technology policies. The next sections examine two case studies of regions within which regional scale science policies have been developing as a result of a combination of these.

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 1966 report of the North East Economic Planning Board, 'The Challenge of the Changing North', from which one paragraph deserves reproduction in full as it summarises excellently an argument presented at regular intervals since then, and still largely true today.

'Unless the important manufacturing industries within the region can be persuaded to undertake a substantial proportion of the basic development work 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 heavy investment in industries based on the physical sciences (eg electronics) having been confined to other regions; or by the reluctance of management itself to invest 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 the choice of employment available to school leavers with scientific leanings.'

The situation has changed little since the 1960s it seems. The North East still has little in the way of public R&D infrastructure. There are no government research establishments, although prior to privatisation, there were some R&D facilities of public corporations, such as British Gas, now closed. The only public sector research facilities therefore are the universities.

During the early 1980s when the universities, and the then polytechnics, were facing funding cuts combined with exhortations from government to engage more effectively with industry, the region’s universities established a number of mechanisms and initiatives to increase their support for local industry, and also to increase local income generation. At the level of individual institutions this consisted of science park developments, industrial consultancy programmes, research clubs, teaching company schemes and the like. But there was also the beginning of a more collective response in the form of HESIN - Higher Education Support for Industry in the North, a collaborative framework involving the five universities in the region, plus the regional 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 the subsequent development of a regional strategy in that they grew and developed beyond their local authority origins, gaining access to other forms of funding, and providing key resources for subsequent initiatives. However alongside these successes there were other initiatives that have failed, such as the Newcastle Technology 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 early 1980s. With a low level of high technology industry in the region, and with the little

that was there being mainly production oriented, general R&D grants met with little absorptive capacity. The prime beneficiaries at this time were the large electronics and defence companies, whose R&D was heavily concentrated in the South of England.

However in the late 1980s, as the Department for Trade and Industry (DTI) cut back on R&D grant aid, a number of regionalised technology transfer initiatives were launched, some associated with universities, the most important of which was the regional technology centre programme. In the North East, the universities had already established HESIN, and the two Newcastle-based universities already had a similar collaborative centre, which was used as a foundation for winning the new RTC contract. Later the RTC developed a slightly broader role than simply university liaison, and now delivers a number of other DTI initiative and ERDF projects.

Regional Strategic Approaches in the 1990s

North East Technology Support (NETS) At the beginning of the 1990s the region had a large number of small technology support agencies including the universities’ specialised initiatives, further education colleges, and some other smaller projects. Total funding for these activities was small and fragmented, and there was no coordination, in part because of the existence of numerous funding routes. DTI had made little or no effort to provide coordination, as policy at that time was for the encouragement of new initiatives and to permit the market to determine which initiatives survived. Into this context came the investment of additional resources for local technology support through the Structural Funds, initially in the STRIDE programme, but also in the main regional programmes for the area. These were all administered through DTI and beginning with STRIDE, DTI officers began to develop a more interventionist approach. It is also important to note that at this time DTI was giving the regional offices increased autonomy, prior to the merging of the regional offices of several spending departments in the regions into new integrated regional government offices.

For STRIDE, DTI North East had already received considerable interest prior to the formal launching of the programme, and rather than simply calling for proposals, the responsible officers tried to pull together some of the known proposers into consortia with common interests. In the end there were four STRIDE consortia and one additional project funded from the ERDF. These five projects became known as NETS, North East Technology Support, and a set of common activities was encouraged such as a common response form when visiting SMEs, regular group meetings to discuss progress, a programme of self-administered audits, and a final collective report and strategy for the next phase of ERDF funding.

Regional Innovation and Technology Strategy Independent of the NETS process described above, during 1993 a large number of the actors involved in areas of innovation and technology support in the North East came together to develop a Regional Innovation and Technology Strategy.

The need for a strategy was identified during the development of the North East Regional Development Strategy, as the region’s bid for continued support under objective 2 of the EU Structural Funds. Within that broader proposal, there was intended a theme ‘to promote the development and application of R&D and new

technology and stimulate innovation in the region’s industries and services, particularly by the extension of links between further and higher education, industry and business support agencies’. This particular theme had been specifically encouraged by the European Commission in response to a perceived problem in the low 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 basis for the broader coordination and management of technology and innovation support services across the region.

For operational purposes a Technical Working Group was established chaired by the North of England Assembly (NEA), supervised by the RITS Steering Group chaired by DTI. The Technical Working Group comprised a team of experts drawn from representatives of DTI, TECs, further and higher education, the Northern Development Company, technology support agencies, the private sector, and local authorities. As such then the RITS Steering Group was a formal committee of representatives appointed by DTI on behalf of the government departments involved in the Structural Funds administration, whereas the Technical Working Group was more open to any interested party to attend, and provided more of a brainstorming opportunity.

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

The development of phase 1 was pursued through a series of meetings at which papers and contributions were tabled according to a staged process similar in form to the RITTS/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's submission 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 and restructuring of the regional infrastructure. Subsequently a proposal was submitted under the RITTS scheme by NDC and Durham University. The RITTS project that emerged however was very much a consultant-run project and ultimately had little impact on the policy landscape.

Within the SPD for 1994-96, the technology support component became substantially more important than previously, with several inter-related elements. First there were separate measures for the embedding of inward investors, and the development of small firms, each of which could involve technology support, such as in cluster projects. But more importantly measure three was aimed at knowledge based

industries, with a key objective being to increase the involvement of the region’s universities 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 funding opportunities from the EU, both via the regional programmes and the Framework Programme. These built on expertise gained, often with EU funding, by the universities 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 the absence of a supportive UK government.

Northern Infomatics Applications Agency

NIAA was a non-profit umbrella organisation sponsoring projects aimed at improving the 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 responsible for coordination, technical advice and management, but then devolved specific project actions to sector groups bringing together actors with resources and expertise for implementation. NIAA was directly involved in EU Information Society initiatives

Knowledge House

Knowledge House was and remains an interface between the local universities and industry, essentially providing a first point of access for SMEs within each of the individual institutions. The network consists of a central node within the regional technology centre, and nodes at each university. Node managers respond to enquiries from SMEs and intermediaries, but also proactively develop registers of expertise in their institutions, organise workshops and other events, oversee quality management procedures for handling external enquiries and projects and manage consultancy links with firms. Again this project was initially funded under the ERDF, although more recently has been funded by new university outreach funds.

The Three Rivers ‘Project’

This 'project' consisted of three academic-industry collaborative centres, located in the three main conurbations of the region, each of which is located on a different river, hence the name. The three centres were organisationally separate, and emerged independently, but were badged under a common theme at the instigation of the Government 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, and was based at a university, but with industrial representation on its management board. The three centres were:

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

Centre for Achievement in Manufacturing and Management (CAMM) based in Sunderland University on Wearside, with a focus on high volume production industries, undertaking research and consultancy including business analysis, product design, manufacturing logistics, cost and performance measurement and supply chain management, and supported by a

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

In Newcastle, an existing Engineering Design Centre in the department of Marine Engineering in Newcastle University, that had focused on the development and dissemination of new design techniques in the made-to-order engineering industries extended its activities through the Regional Centre for Innovation and Design. RCID focused on working with local SMEs on shorter term projects.

As noted the centres all emerged from slightly different contexts, but shared a set of common principles in terms of the types of service offered, the close involvement of local companies, and a collaborative relationship with researchers in other universities within the region. All were dependent on ERDF support, and working within a regional innovation governance system set by the Northern Development Company DC 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 by the Tyne and Wear Development Corporation, with funding from the Millennium Lottery Fund and ERDF. ICfL combines, on one site, research laboratories for Newcastle University’s Institute for Human Genetics, an incubator for biosciences companies, a visitor attraction on the subject of genetics technology, and a small research centre in the sociology and ethics of genetics technology which also has a strong public outreach function. ICfL also hosted a biotechnology cluster development 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 regional economic 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 public bodies, 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 level of resource relative to the local population base due to the perceived greater need within 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 develop a 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 of their initial guidance from government, building upon existing innovation strategies developed through the government regional offices, often assisted by funding from the RITTS and RIS programmes. However, the resources available to the RDAs in support 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 were highly limited in their use of funds from central government due to the funding streams being locked into central government programmes delivered in the regions, yet for some the need to compensate for historically low government R&D expenditure in the regions was a key objective.The North East Regional Economic

Strategy (ONE, 1999) specifically focused on the universities as a vehicle for rebuilding the knowledge base in the absence of government R&D, identifying ‘Placing universities and colleges at the heart of the Region’s economy’ as one of six main priorities. The weakness of the existing R&D base was recognized and the strategy stated that ‘There is a widespread belief throughout the Region that the Government must direct more Treasury funded research to Universities outside London, particularly to the North East. This is essential to underpin the Region’s approach to promoting knowledge transfer’ (ONE, 1999, 59). One approach which was suggested was the idea of Advanced Centres of Excellence, also termed Centres of Discovery, which like the new International Centre for Life would combine research, exploitation, spin offs, educational outreach, training and public understanding of science. Four additional centers were proposed, but with the specific technology areas and mechanisms to be decided.

What then accelerated the debate in several of the RDAs was a decision by Government 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 the South East. Regardless of the complex arguments around the decision and the competing rationalities (Perry, 2003) the effect was to galvanise the energies of the scientific and political communities in the North West to argue for additional R&D funding to compensate for the likely downgrading and potential closure of the Daresbury Laboratory in Cheshire, having lost this investment. As part of the decision to allocate additional science resources to the region, a study of the science base in the region was undertaken by Arthur D. Little (ADL, 2001) and a North West Science Council was established to oversee the development of a future strategy.

The North East RDA and universities recognized the opportunities offered by this model, 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 not suffered a defining incident such as the Daresbury/Diamond decision, it had seen the closure of laboratories in former public corporations (British Gas in particular), and its 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 review of the research base in the North East in relation to current and future needs of key industry clusters.

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

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

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

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

New centers of excellence based on energy and engineering, digital technologies and process industries,

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

Plus further suggestions to enhance recruitment of talent, rationalise intermediaries, improve the region’s image for science and technology and enhance collaboration between the universities. (ADL, 2001)

North East Strategy for Success ONE’s response to the ADL report was the ‘Strategy for Success’, submitted to the DTI in the September of 2001, and implementing most of the recommendations of the ADL 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 a regional 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 existing regional strengths. The regional exploitation agency, now known as NStar, provides access to finance, proof of concept investment and commercialisation advice and assistance. The Science and Industry Council was established in December 2001, and CEOs for the five centres were recruited during 2002.

During 2003 the five centres have been developing their own models of operation and preparing business plans. In each case resources have been made available from ONE to pump prime the centres over a five year period, including capital and research investment as well as recurrent costs, but each of the centres has been required to plan for self sufficiency from commercial and investment income at the end of that five year period. Overall it is estimated that the RDA will invest around £200 million over the five years in the Strategy for Success programme, but aiming to leverage a similar level of investment from ERDF, Framework Programme and other national programmes (ONE, 2003). Each of the centres has evolved quite distinct strategies depending on the characteristics of the technologies and sectors they support, and on the 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 been able 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 the University of Newcastle, such as the Genetics Knowledge Park, one of the regional hubs of a national initiative to develop post-genomic technologies for the health sector, 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 and internationally. The University of Newcastle in particular has been the source of several spin off biotech firms in recent years which have located in the incubator facilities 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 to assemble a critical mass, assisting its development, and supporting the commercialisation process. CELS is however also very externally oriented, seeking to develop partnerships with other UK regional initiatives and centres of biotechnology research to build complementary networks within a national biotech strategy, as well as building overseas links and networks.

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

Centre and RCID in Newcastle, a physical site on the coast with extensive testing facilities for offshore based systems including converted docks and adjacent buildings, and an existing network of firms in the renewable energy and offshore sectors. NAREC builds more directly out of the region’s historic engineering base and technical 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 on that previous expertise in areas where it has not been fully exploited. NAREC, like CELS also looks to wider collaborative activities and has been working with other regions in developing a networked model for a new UK energy research centre.

The three other centres are also quite distinct. The Nanotechnology, photonics and microsystems centre builds upon an academic research base including the University Innovation Centre for nanotechnology in Newcastle, and photonics expertise in Durham University. The Chemical and Process Industries centre though is more industry 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. CPI also incorporates the EPICC initiative from the previous round of policy. Finally the digital technologies centre, CODEWorks, is a much more virtual centre linking a number 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 science policy outlined earlier coming into play. First, in terms of developments in regional development theory and practice, there have been quite dramatic shifts in the policy framework in the region away from some of the traditional instruments and approaches towards a recognition of the importance of innovation, and within that the science base. This thinking at the regional scale has been supported by national guidance on regional scale policy from the DTI, such as in their requirement for an innovation action plan, but also and perhaps more forcefully from the European Commission through successive negotiations on the use of ERDF and the types of measures that the Commission would be prepared to see in the region’s plans.

The devolution process is also having an effect, initially through the formation of RDAs and the gradual process of handing over greater leeway to them to allocate government funding towards the needs of the region. As the RDA has gained greater flexibility, so it has increased the proportion of its expenditure on science and technology, creating new regional institutions such as the Science and Industry Council, and the centres of excellence, and seeking to engage in discussions with national 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 expected to have further effects as has been seen in Scotland where the devolution of higher education 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 on the low levels of R&D and the need to win greater investment from central government.

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

type strategy development programmes due to a lack of institutional capacity prioir to the formation of the RDAs, and whilst there have been attempts to learn from other regions, 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 as through 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 this expertise is to some degree being drawn upon in the centres of excellence.

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

Overall the region presents a clear example of the recognition of the limitations of traditional approaches to regional development, both in turning away from a previous emphasis on foreign direct investment towards newer paradigms such as innovation strategies and social enterprise, culture etc, but then a second recognition that simply encouraging innovation through SME audits and awareness programmes also doesn’t work 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 the basic 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, including industry oriented public institutions like the Fraunhofer Institutes, or the Basque technology centres and hence there has been a heavy reliance on the universities and a few new and small technology intermediaries. The intensity of reliance on the universities, given the various other demands and stresses on the HE system has perhaps placed undue stress on universities to deliver on the basis of small levels of investment against an agenda which is new to them. A particular problem has been sustainability of initiatives within the new universities which have otherwise been denied 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 times not 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 of excellence.

Queensland The second case study is the state of Queensland in Australia which in recent years has been using the label the ‘Smart State’ – a whole-of-government initiative of the Labor premier, and which has been re-affirmed after the state election of 2001. Queensland has been perhaps the most interventionist state government in recent times, 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

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

In Queensland, the ‘Smart State’ strategy is a comprehensive state development strategy covering almost all aspects of public services. The innovation and economic development aspect has tended to focus on biotechnology and ICTs, although with other more niche oriented clusters such as tourism, sustainable mining, etc. Most recently a consultation or issues paper has been issued on an R&D strategy for the state. This 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 as information and communication technology, biotechnology, nanotechnology, light metals, “new era” foods and advanced mining technologies. The providers of this research are predominantly Queensland’s universities, medical research institutes, co-operative research centres and State Government departments. (Queensland DIIE, 2002a)

The rationale for the Smart State priorities seems to be driven by political vision rather than analysis. The problems of reconciling such grand strategies with the difficulties 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 colonial history and geography. As an extensive, dry and largely uninhabitable continent, Australia’s colonial population was primarily settled through a small number of coastal cities, each acting as a gateway to agricultural and mining resources in their hinterland. 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 the US than a European nation state, and powers were granted to the national level from the states rather than the other way round.

Thus in terms of science and technology policy, the Commonwealth Government has overall leadership of national science and innovation policy, but shares responsibilities with the states. The states have traditionally funded research to meet local and state management needs, including sponsorship of agriculture, but the Commonwealth government has supplemented that through national institutions such as CSIRO which is in part concentrated in the Australian Capital Territory (ACT) around Canberra, and part distributed to the various states. In higher education also there is a shared responsibility – whilst funding of both teaching and research has been largely transferred over the years to the Commonwealth (and more recently back to the students), the states retain their original rights to regulate the individual universities, and have higher education portfolios within their Education departments. Thus in Queensland, the state ministry Education Queensland has an Office of Higher Education which ‘authorises the operation of public and private universities’ and ‘accredits other private providers to deliver higher education courses in Queensland’. (http://education.qld.gov.au/strategic/accreditation/university/). State governments are increasingly engaging with their higher education sectors through additional funds to direct university strategies towards state objectives.

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

terms by the state capitals, which typically account for 60-80% of the state population, and are the major sources of economic growth - Sydney, Melbourne and Brisbane 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 of economic growth based on services and new industries, economic development policy has been primarily focused on what is known as Regional and Rural Australia (Beer et al 2003).

With the decline of the traditional resource economy as a consequence of the effects of globalisation on agriculture, and the ‘hollowing-out’ of mining operations, so much of 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 to Australian identity, despite the reality of an urban population, has skewed policy.

A recent feature of regional development policy has been the political differences between states and commonwealth government. Since 1996 the Howard Liberal Commonwealth Government has been pushing a small government agenda, responding to the One Nation right and a constituency in rural areas, and hence hawkish on foreign policy and immigration and supportive of the rural areas but without investing in strong institutions. In contrast, all of the State governments have shifted to Labour but are pro-business and modernising in orientation. Consequently there is intense competition between the main parties and tiers of government over who can best deliver a knowledge economy whilst dealing with the decline of regional Australia.

A central feature of this agenda is research and innovation policies, and national government has been active in developing position papers and policy frameworks since 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 and technology

Dec 1998 Industry policy statement – Investing for growth – Technology Diffusion Program

Oct 1999 Shaping Australia’s Future: Innovation – Framework Paper

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

Feb 2000 National Innovation Summit

July 2000 National Biotechnology Strategy

Jan 2001 Backing Australia’s Ability: an innovation action plan for the future

April 2002 Higher Education at the Crossroads

May 2003 Our Universities: Backing Australia’s Future

At the state level, the need to underpin economic development strategies with innovation resources, and the political concern over the distribution of national R&D resources between states has stimulated State intervention in what might be termed footloose R&D. This includes seeking to attract R&D investment, promoting spin off companies, and attracting Commonwealth funded research.

0

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Figure 1 above shows R&D expenditure by type within the states, and is not standardised for population size. However it provides a good illustration of the distribution 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 private sector. 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 Queensland for example. What is most noticeable about Queensland is the relatively high share of state R&D.

Qld as % total

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•The point about Queensland’s state expenditure is demonstrated clearly in the second figure. Here we show Queensland’s share of the Australian total for various forms of R&D. Although with around 18% of the national population, Queensland has only around 14% of overall R&D expenditure, less for business and Commonwealth expenditure, 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 Queensland’s ‘Smart State’ strategy was introduced by an incoming Labour government as a ‘whole-of-government’ plan for the future. It takes the form of a knowledge-based economic strategy, linked with a desire to build a more cohesive society, sustainable development, and more flexible and better targeted public services. Within the economic development element of the strategy, the State is aiming ‘to develop Queensland as an Asia-Pacific hub for the new industries of the 21st Century - industries such as biotechnology, information technology, nanotechnology and communication technology’.

The State has therefore prioritised a set of ‘growth sectors’ which includes both the high tech – such as biotechnology and ICT – but also low tech where the State has some advantage – such as advanced mining and ‘new era’ foods. As part of this the State has identified the need to invest more in research and development both in a generic 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 (Queensland Government, 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 as information and communication technology, biotechnology, nanotechnology, light metals, “new era” foods and advanced mining technologies. The providers of this research are predominantly Queensland’s 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 cluster initiatives such as aerospace in Ipswich, west of Brisbane, a variety of local clusters in Logan, south of Brisbane and pleasure boat building on the Gold Coast.

Biotechnology Again, as in the North East, biotechnology is an important element in the state strategy, and within the universities. Queensland has established a Bioindustries Taskforce within the Department of Innovation and Information Economy and is working particularly with the three universities in Brisbane to support the development of the cluster, with the development of significant new research infrastructures, new degree courses, support for spin off firms and other networking and promotional activities.

Employment, although small, is growing rapidly from just over 1225 jobs in October 1999 to an estimated 2700 currently, of which the majority are in research institutes.

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

as undergraduate teaching funds are normally provided by the Commonwealth Government. The primary research developments have been with the University of Queensland focused on an Institute for Molecular Bioscience, but another research centre 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 Molecular Bioscience (IMB) at the University of Queensland, as well as dedicating $77.5M over ten years to support the IMB in attracting key researchers and developing strategic research programs • providing $4.5M towards the establishment of a Centre for Biomolecular Science and Drug Discovery and an associated research commercialisation centre at Griffith University'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 an investment ready position • establishing a networking program (BioLink) that facilitates the development of a tight 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 commercial development 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 to assess 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 Molecular Bioscience (IMB), at the University of Queensland. This is a major research infrastructure, perhaps the biggest single bioscience concentration in the Southern hemisphere, with 800 researchers, and incorporating an ARC research centre in functional genomics, the HQ of the Australian Genome Research Facility, ARC centres of excellence in biotech, UQ research centres, part of CSIRO, and staff from Queensland State’s Department for Primary Industries.

The State government provided investment of $15m to the $105m capital cost of the building, and $77.5m over ten years for key research programmes. The building is located centrally on UQ’s site and brings together all of the constituent elements in a flexible arrangement that encourages interaction between different government and university laboratories.

Whilst UQ has a very successful commercialisation arm Uniquest, perhaps one of the most successful in Australia, IMB was felt to need it’s own dedicated commercialisation body IMBcom. IMBcom is actively engaged in the

commercialisation process through the establishment of new biotech companies and has 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 Queensland as an advanced economy in the tropics. Living in a tropical environment brings a set of particular problems, and hence commercial opportunities, which have not typically been capably of being exploited by other high R&D economies, whilst many of the countries with such needs have relatively weak innovation potential. Queensland has a significant opportunity, through its northern areas to assemble considerable R&D resources within a set of climatic and ecological conditions to address problems of great concern to many tropical economies.

Specific challenges of Queensland’s tropical areas offering opportunities for tropical science exploitation

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

–increased exposure to extreme climatic events such as cyclones, or even intense tropical rain storms;

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

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

–impact of accelerated rates of ecosystem biological processes such as biomass production, carbon and nutrient cycling;

–land management issues of soil erosion and chemical containment in cropping systems 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 and economic criteria. The developmental challenges of Northern Queensland are quite distinct from those of many other more populated parts of Australia. Although a vibrant tourism industry has emerged, the challenges of distance, critical mass and access to infrastructure combined with the hot humid climate, and considerable social problems within the indigenous aboriginal community, all add to the difficulties of economic development. The natural resources of the area, with mega-diversity both in the sea and on land pose enormous responsibilities as well as presenting opportunities for the discovery of new commercially exploitable resources.

There are however some significant R&D resources relative to the small local population - James Cook University, Australian Institute of Marine Science, University of Central Queensland, CSIRO, Sugar Research Institute, University of

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

Better connecting and harnessing these research resources to economic and social development strategies is therefore the core of the strategic vision – ‘Queensland recognised as an international centre of excellence in Tropical Science, involved in collaborations 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 the Northern 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 are a number of obvious points of similarity, but also some distinct differences. We start with the similarities.

First, as in the North East, and elsewhere, we see the increased attention paid to innovation in the discourse of economic development, both at State level and at lower regional scales such as in Northern Queensland. Specific policies to promote clusters are being pursued at regional scale in Northern Queensland as well as in the main metropolitan South East Queensland around Brisbane. Venture capital, incubators, and spin offs are also actively promoted alongside innovation support for traditional manufacturing sectors. Such policies are not supported so fulsomely by the national Commonwealth Government – innovation and regions are part of the discourse, but intervention at national level is limited in scope.

Devolution is not an active process in Australia due to the federated nature of Australian governance, yet what is clear is the strong divergence between interventionist Labour State governments and a ‘small-government’ Liberal Commonwealth administration. Australians have tended to split their voting intentions, which reflects a distrust of Canberra and a concern for an active State government close to home. State Governments appear therefore to be increasing their involvement in areas where they previously ceded responsibility to the Commonwealth, such as R&D policy. This is no more apparent than in the case of the Australian synchrotron, where the State of Victoria stepped in to fund the whole project when the Commonwealth Government prevaricated. Incidentally Queensland also sought to capture this project, but were outflanked by Victoria which was willing to advance the full cost and so trumped Queensland.

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

On the issue of mode 2 science and new transdisciplinary areas of science however there 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

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

Unlike the North East, the federal nature of the governance and the strength of State departments has led to the existence of a stronger research base in the regions, and an opportunity 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 government research – illustrated perhaps by the role of the Department of Primary Industries in the IMB project. The potential for a stronger partnership between national, state and university sectors would seem to be stronger where the state has significant responsibilities, and provides a powerful argument for further devolution in the UK.

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