Leadership in Enabling and Industrial Technologies

Leadership in Enabling and Industrial

Technologies

Fostering an Entrepreneurial Mindset through Innovation

Policy

by Hosea Saputro HANDOYO (34186)

A dissertation submitted in partial fulfilment of

the requirements for the degree of

Master of Public Policy

2014

Willy Brandt School of Public Policy

University of Erfurt

Dissertation Supervisor: Prof. Dr. Edgar Aragón

Second Reader: Dr. Steffen Wetzstein

Erfurt, July 25, 2014

Hosea Handoyo | www.hshandoyo.net

i

Ego hoc Deo familia et amicis


ii

ABSTRACT

With the future growth of the global economy depending on innovation, this dissertation

is set out to examine the application of innovation and technology clusters in achieving

industrial leadership. By examining Regional Innovation System of Thuringia, the study

elucidates the process by which innovation can strengthen regional competitiveness and

the constraints it has. Two research strategies are used: a quantitative data analysis of

the region and a series of interviews with the innovation stakeholders. This also includes

a deeper investigation of the Ilmenau region. Data has been collected from archives,

newspapers, reports, and academic publications.

This dissertation challenges the argument that innovation depends primarily on

government policies rather than on the most innovative and commercially-active

stakeholders. While existing literatures on innovation assume all technology sectors are

similar, the investigation also highlights the specific approaches of technology clusters.

Drawing from the interviews and case studies, this study reveals the significance of

social capital, such as personal relationship and trust-building in innovation processes.

Thus, the results reinforce the importance of collaboration in innovation policy-making

and the need of interdisciplinary approaches in understanding innovation by integrating

politics and psychology with economics. It offers policy recommendations for the

Thuringian innovation stakeholders for improving the current Regional Innovation

System and Cluster approach within the EU framework of “Leadership in Enabling and

Industrial Technologies”.

Keywords: Regional Innovation System, Cluster, Regional Development,

Competitiveness

Word count: 19.226 (main body)


iii

KURZFASSUNG

Innovation ist der kritische Faktor für das zukünftige Wachstum der Weltwirtschaft. Die

vorliegende Arbeit ist daher darauf ausgerichtet die Verwendung von Innovations- und

Technologie-Clustern zur Erreichung von Marktführerschaft (im Industriebereich) zu

untersuchen. Durch die Untersuchung regionaler Innovationssysteme in Thüringen wird

jener Prozess durchleuchtet, im Zuge dessen Innovation die regionale

Wettbewerbsfähigkeit steigern kann. Außerdem werden vorliegende

Rahmenbedingungen und hemmende Faktoren betrachtet. Hierfür werden zwei

Forschungsstrategien angewandt: Zunächst wird eine quantitative Analyse der Region

durchgeführt um dann durch eine Reihe von Interviews mit Interessensvertretern aus

dem Bereich Innovation erweitert zu werden. Weiterhin ist eine tiefere Analyse der

Region rund um Ilmenau enthalten. Verwendete Daten stammen aus Archiven,

Zeitungen, Berichten und akademischen Publikationen.

Die vorliegende Arbeit stellt die Argumentation infrage, dass Innovation hauptsächlich

von Regierungsentscheidungen abhängt. Stattdessen wird der Einfluss von innovativen,

regional aktiven Wirtschaftsakteuren betont. Während vorhandene Literatur oft davon

ausgeht, dass sämtliche Technologiebereiche sich ähnlich sind, legt die vorliegende

Untersuchung einen Fokus auf spezifische Anforderungen für die Entwicklung

unterschiedlicher Technologie-Cluster. Unter Einbeziehung der durchgeführten

Interviews und Fallstudien wird weiterhin die Bedeutung von Sozialkapital (z.B.

persönliche Beziehungen, den Aufbau von Vertrauen) für Innovationsprozesse

herausgestellt. Darauf aufbauend bekräftigen die Ergebnisse die Wichtigkeit von

Kollaboration beim Erstellen von öffentlichen Innovationsstrategien und den Bedarf für

interdisziplinäre Ansätze, die ein Verständnis von Innovation durch die Integration von

Politik, Psychologie und Ökonomie vereinfachen. Die Arbeit gibt schlussendlich

Empfehlungen für Thüringer Interessensvertreter im Bereich Innovation, die dazu dienen

sollen den Ansatz für lokale Innovation und den Aufbau von Clustern unter dem EU-

Rahmenprogramm "Leadership in Enabling and Industrial Technologies" zu verbessern.

Stichwort: Regionales Innovationssystem, Cluster, regionale Entwicklung,

Wettbewerbsfähigkeit

Wortanzahl: 19.226


iv

SAMENVATTING

De toekomstige groei van de wereldeconomie is afhankelijk van innovatie. Dit

proefschrift onderzoekt de toepassing van geclusterde innovatie en technologie in het

verkrijgen van industrieel leiderschap. Door het Regionaal Innovatiesysteem van

Thüringen te onderzoeken blijkt hieruit dat innovatie processen het regionale

concurrentievermogen en zijn beperkingen kan versterken. Twee onderzoeksmethoden

zijn hiervoor gebruikt: een kwantitatieve analyse van de regio en een reeks interviews

met belanghebbende vernieuwers. Dit bevat tevens een dieper onderzoek naar de regio

Ilmenau. De data zijn verzameld uit archieven, kranten, verslagen en wetenschappelijke

publicaties.

Dit proefschrift vecht het argument aan dat innovatie in de eerste plaats afhankelijk is

van overheidsbeleid meer dan van innovatieve en commercieel actieve

belanghebbenden. Terwijl de bestaande literatuur met betrekking tot innovatie aanneemt

dat alle technologische sectoren vergelijkbaar zijn, benadrukt het onderzoek ook de

specifieke benaderingen die nodig zijn voor verschillende technologische clusters. De

interviews en casus studies in dit onderzoek tonen het belang aan van sociaal

vermogen, zoals persoonlijke relaties en het opbouwen van vertrouwen bij

innovatieprocessen. Samenvattend, de resultaten versterken het belang van

samenwerking in het innovatiebeleid en de noodzaak van een interdisciplinaire aanpak

bij het begrijpen van innovatie in het integreren van economie met politiek en

psychologie. Het biedt ook een beleidsaanbeveling voor de partijen die betrokken zijn bij

de Thüringer innovatie voor het verbeteren van de huidige aanpak ‘Regional Innovation

System en Cluster’ binnen het EU-kader van "Leiderschap in ontsluitende en industriële

technologieën“

Trefwoord: regionaal innovatiesysteem, cluster, de regionale ontwikkeling,

concurrentievermogen

Woorden tellen: 19.226


v

ABSTRAK

Dengan pertumbuhan masa depan ekonomi global bergantung pada inovasi, skirpsi ini

bertujuan untuk menelaah penerapan inovasi dan kluster teknologi dalam mencapai

kepemimpinan industri. Dengan memeriksa Sistem Inovasi Regional Thuringia, studi ini

memaparkan proses dimana inovasi dapat memperkuat daya saing regional dan

kendala yang dihadapi. Dua strategi penelitian yang digunakan adalah analisis data

kuantitatif daerah dan serangkaian wawancara dengan para pemangku kepentingan

inovasi. Hal ini juga diperkuat dengan penyelidikan lebih dalam di wilayah Ilmenau. Data

telah dikumpulkan dari arsip, surat kabar, laporan, dan publikasi akademik.

Skripsi ini menilik kembali argumen bahwa inovasi terutama tergantung pada kebijakan

pemerintah. Sejatinya, inovasi bergantung ada pemangku kepentingan yang paling

inovatif dan komersial. Sementara itu, literatur yang ada mengenai inovasi menganggap

semua sektor teknologi serupa, skripsi ini juga menyoroti pendekatan khusus yang

dibutuhkan berdasarkan sektor-sektor teknologi yang berbeda. Studi ini menunjukkan

pentingnya modal sosial, seperti hubungan pribadi dan kepercayaan dalam proses

inovasi. Dengan demikian, pembuatan kebijakan inovasi dan diperlukan pendekatan

interdisipliner dengan mengintegrasikan politik dan psikologi dengan ekonomi. Skripsi ini

diakhiri dengan menawarkan rekomendasi kebijakan untuk para pemangku kepentingan

inovasi dengan stakeholder Thuringian dalam meningkatkan arus Sistem Inovasi

Daerah dan Cluster pendekatan dalam kerangka Uni Eropa "Leadership in Enabling and

Industrial Technologies".

Kata kunci: sistem inovasi regional, kluster, pembangunan daerah, daya saing

Jumlah kata: 19.226


vi

ACKNOWLEDGEMENT

‘No duty is more urgent than that of returning thanks’

Aurelius Ambrosius (337-397)

When my grandparents† asked me to pursue higher education, I asked them how far I

should study, and they said, ‘as high as the heavens!’ It is clear that climbing the ‘stairs

to the heavens’ is not a work of solitary achievements. I am completely at loss when it

comes to acknowledging people who have helped me in completing this study.

First of all, I wish to express my gratitude to my academic supervisors; Dr. Edgar Aragón

for sharing his knowledge, experience, and the probing questions during regular

meetings. Also, to Prof. Florian Hoffmann for the encouraging support without which I

would have not completed this journey – and this includes the Dr. Steffen Wetzstein for

his support and inspiring comments. This also includes encouragements from the

Indonesia State Ministry of Research and Technology, past-minister Mr. Koesmayanto

Kadiman and Mrs. Lies Widjayanti who have introduced me to public policy and

innovation system. My deepest gratitude is also due to members of Willy Brandt School

and all the MPP family.

The research project has tremendous supports from all the experts and practitioners

whom I have interviewed and discussed with. I would also like to convey my thanks to

University of Erfurt, Thuringia Ministry of Economics, and TU Ilmenau. I thank Prof. Dr. -

Ing. Günther Schäfer, Dr. Dörte Gerhardt, and Sven Müller who helped opening the door

to TU Ilmenau and the companies in Ilmenau. I am also grateful for the constructive

inputs from Dr. Sandy Neish, Dr. Deborah Spencer, MBA., Dr. Patrick McCarthy, Dr.

Kevin Parker, and Dr. Fred van Eenennaam.

In this occasion, I would also thank many people who have played great deal in during

the past several years in shaping my life through the completion of this perplexing

journey with their mentoring supports, especially Bob Foster, Johnson Sinaga, Michael

Putrawenas, Nico† and Marie Mandersloot, Daisy Prasetya, and Ton Ammerlaan.

On personal level, I would like to express my deepest gratitude to my beloved families;

for their understanding, support, and endless love through the duration of my studies.

While from my ‘social life’, I can never thank these people enough for being ‘the

shoulders to cry on and ears that will listen’ and tirelessly reminding me to have a more


vii

balanced life in the past 2 years in Erfurt: Robert A Jonker, Thomas Weise, Tobias

Schönau, Martin Ostermann, Cindy Carina Affandi, Nonni Athari, and Jens Busse. Then

to some of my friend with whom I have a load of meaningful discussions and

collaborations, Ulrike Wollenhaupt-Schmidt, Tineke Tiebosch, Theresa Hermann, Maria

Sheviakova, Adriana Henriquez, Lukas Richter, Nastia Sabatkovskaya, Audrey Clarissa,

and to Maria Ehrich and her family.

I also wish to thank people from my ‘Doppelkopf’ group: Daniel Bormke, Sascha Uthe,

Karsten Schönfeld, Dr. Christian Scheibenhof, Ingo Schönemann, and Saskia Hippe for

demonstrating what friends are for. I also cannot leave this without mentioning the

distinguished delegates of Erfurt Model United Nations, both ‘orga’ and delegates in

2013 and 2014, particularly Florian Emmerich, Florian Hader, Nora Henscke, Peter

Tscherny, and Sarah Duryea who have shown great friendships and professionalisms.

Despite my effort to properly acknowledge everyone involves in this ‘journey’, I

apologize to those I forgot to mention here. I can only assure you that it was

unintentional.

Oremus pro invicem,

Hosea Handoyo


viii

TABLE OF CONTENTS

ABSTRACT (English) .................................................................................................... ii

KURZFASSUNG (German) .......................................................................................... iii

SAMENVATTING (Dutch) ............................................................................................. iv

ABSTRAK (Indonesian) ................................................................................................ v

ACKNOWLEDGEMENT ................................................................................................ vi

TABLE OF CONTENTS .............................................................................................. viii

LIST OF TABLES ......................................................................................................... xi

LIST OF FIGURES ....................................................................................................... xii

LIST OF ABBREVIATIONS ........................................................................................ xiii

Chapter 1 Introduction ............................................................................................ 1

1.1 Global Context .................................................................................................. 1

1.2 Regional Context .............................................................................................. 2

1.3 Aim ................................................................................................................... 4

1.4 Theoretical Framework ..................................................................................... 4

1.5 Methodology ..................................................................................................... 5

Case Study: Thuringia and Ilmenau University of Technology ........................... 6

1.6 Personal Motivation .......................................................................................... 6

1.7 Structure of Thesis ............................................................................................ 7

Chapter 2 Theoretical Framework .......................................................................... 8

2.1 What is technology innovation? ......................................................................... 8

2.2 Technology Level Readiness (TLR) .................................................................. 9

2.3 How does innovation play a role in Industrial Leaderships? ............................ 11

2.4 OECD Innovation System Approach ............................................................... 12

2.5 National Innovation Systems ........................................................................... 14

2.6 Regional Innovation System ............................................................................ 17

2.7 Cluster, Innovation, and Entrepreneurship ...................................................... 18

2.8 N-Helix Model ................................................................................................. 19

2.8.1 Triple Helix Innovation Model ...................................................................... 21

2.8.2 Quintuple Helix ............................................................................................ 22

2.9 Summary ........................................................................................................ 23


ix

Chapter 3 Methodology ......................................................................................... 25

3.1 Timeline, Funding, and Language ................................................................... 25

3.2 Conceptual framework of innovation and industrial leadership ........................ 25

3.3 Primary Data Collection: in-depth interviews and discussions ......................... 27

3.4 Secondary Data Collection .............................................................................. 30

3.5 Challenges and Limitations ............................................................................. 30

Chapter 4 Innovation in Thuringia: Moving Forward and Unlocking its Potentials 31

4.1 Cluster Approach in Thuringia ......................................................................... 31

4.2 Evaluation of Cluster Approach ....................................................................... 34

4.3 Regional Innovation System in Thuringia ........................................................ 35

4.4 Innovation Stakeholders: Quintuple Helix in Thuringia .................................... 39

4.4.1 Government ............................................................................................ 39

4.4.2 Academia ................................................................................................ 42

4.4.3 Business .................................................................................................. 42

4.4.4 Civil Societies .......................................................................................... 44

4.4.5 Media ...................................................................................................... 45

Chapter 5 Innovation in Thuringia under Microscope ......................................... 46

5.1 TU Ilmenau ..................................................................................................... 46

5.2 Fostering Entrepeneurship in TU Ilmenau: Auftakt ......................................... 48

5.3 Assessing Regional Innovation System in Thuringia ....................................... 49

Chapter 6 Where Theory Meets Practice .............................................................. 53

6.1 Can Cluster Approach and Regional Innovation System stimulate innovation

and achieve industrial leadership? .................................................................. 53

6.2 Where does leadership in enabling and industrial technologies reside? .......... 54

6.3 What is the most important factor to sustain LEIT? ......................................... 55

6.4 What are the best indicators for achieving LEIT? ............................................ 58

6.5 Impact and its Possible Implementation in Developing Countries .................... 60

6.6 Outlook and Future Research ......................................................................... 61

Conclusion .................................................................................................................. 62


x

Chapter 7 Policy Recommendations .................................................................... 66

I. Thuringian Ministry of Economics, Labor, and Technology ............................. 67

II. Thuringian Ministry of Education, Science, and Culture ................................. 67

III. Technology University Ilmenau ....................................................................... 68

IV. Small and Medium Enterprises (and Start-ups) in Knowledge Enabling

Technologies .................................................................................................. 68

V. European Commission DG Research and Enterprise...................................... 68

REFERENCES ............................................................................................................. 69

ANNEX 1 Overview of Different Technologies ........................................................ 80

ANNEX 2 Location of Thuringia in Germany ........................................................... 81

ANNEX 3 Location of major innovation cities in Thuringia .................................... 82

ANNEX 4 Geographical Situation of Ilmenau .......................................................... 83

ANNEX 5 OECD Systemic Approach Publications ................................................. 84

ANNEX 6 OECD National Innovation Systems ........................................................ 85

ANNEX 7 Guiding Questions for Interview .............................................................. 86

ANNEX 8 INTERVIEWS AND SELECTED QUOTES ................................................ 88

ANNEX 9 Overview of ThEx ................................................................................... 100

ANNEX 10 Locations of Commercial Research Institutes in Thuringia ................. 101

Declaration (Erklärung) ............................................................................................ 102


xi

LIST OF TABLES

Table 1 General Profile and Economic Performance of Thuringia .............................. 3

Table 2 Different National Innovation System (NIS) definitions by the primary

principal investigators of NIS ................................................................................. 14

Table 3 List of experts/scholars in innovation and industrial leadership ................... 26

Table 4 List of experts/scholars in innovation and industrial leadership ................... 29

Table 5 Overview of Thuringian Clusters ................................................................. 33

Table 6 Contribution of Knowledge Enabling Technology to Thuringia's Economy... 37

Table 7 Quintuple Helix Stakeholders in Thuringian Innovation System ................... 40

Table 8 R&D Excellence in Thuringia ....................................................................... 43

Table 9 Commercial Research Institutes in Thuringia .............................................. 45

Table 10 Research Funding in TU Ilmenau ................................................................ 47

Table 11 Regional Distribution of Entrepreneurial Activity in Thuringia ...................... 48

Table 12 Assets and Liabilities of Innovation in Thuringia .......................................... 50


xii

LIST OF FIGURES

Figure 1 Technology Level Readiness (TLR) Scheme .......................................... 10

Figure 2 TLR and Industrial Leaderships............................................................... 12

Figure 3 Innovation in Statist Model ....................................................................... 13

Figure 4 National Innovation System Schematic Representative .......................... 15

Figure 5 Learning Regions and Learning Flows in Regional Innovation Systems .. 16

Figure 6 Regional Innovation Systems in Europe .................................................. 17

Figure 7 Porter's Diamond for Cluster Analysis (Porter, 1990) ............................... 19

Figure 8 Technological Entrepreneurship and its Complexities .............................. 20

Figure 9 Schematic representation of Triple Helix ................................................. 21

Figure 10 Schematic Representation of Quintuple Helix .......................................... 23

Figure 11 Flow chart of the methodology used in this study .................................... 28

Figure 12 Structure of Thuringia Cluster Management (TMWAT, 2012) .................. 33

Figure 13 Diamond Model: Government Role in Upgrading Cluster in Thuringia ..... 36

Figure 14 Diamond Model: Private Sectors Influences on Cluster Upgrading .......... 36

Figure 15 RIS 3 Strategies (modified from TMWAT (2014, p. 7)) ............................. 38

Figure 16 Pillars of RIS3 to achieve its Vision ......................................................... 39

Figure 17 Innovation Process in the Head ............................................................... 57

Figure 18 Processes of Innovation .......................................................................... 57


xiii

LIST OF ABBREVIATIONS

BMBF Federal Ministry of Education and Research (Bundesministerium für Bildung und Forschung)

BMWi Federal Ministry of Economics and Energy (Bundesminiterium für Wirtschafts und Energie)

BRD Federal Republic of Germany (Bundesrepublik Deutschland)

DDR German Democratic Republic (Deutsche Demokratische Republik)

DevCo Development and Cooperation

DFG German Research Foundation (Deutsche Forschungsgemeinschaft)

DG Director General

e.V. Registered Association (eingetragener Verein)

EC European Commission

EP European Parliament

EU European Union

EUR Euro (€)

EXIST University-Based Business Start-Ups (Existengründungen aus der Wissenschaft)

FDI Foreign Direct Investment

FH University of Applied Sciences (Fachhochschule)

FI Fraunhofer Institute

FTVT Thuringian Research and Technology Association (Forschungs- und Technologieverbund Thüringen e.V.)

GDP Gross Domestic Products

GIZ German Federal Enterprise for International Cooperation (Deutsche Gesellschaft für Internationale Zusammenarbeit)

GmbH Company with Limited Liability (Gesellschaft mit beschränkter Haftung)

GNP Gross National Products

GVA Gross Value Added

H2020 Horizon 2020

HEI Higher Education Institution

HGN Higher Education Start-ups Network (Hochschul Gründer Netzwerk)

ICT Information and Communication Technology

IHK Chamber of Commerce ( Industrie- und Handelskammer)

IP Intellectual Properties

IPO Initial Public Offering

KET Knowledge Enabling Technology

KTP Knowledge Transfer Process

LEED Local Economic and Employment Development

LEG State Development Corporation of Thuringia (Landesentwicklungsgesselschafts Thüringen)

LEIT Leadership in Enabling and Industrial Technologies

MPI Max Planck Institute


ii

NIS National Innovation System

OECD Organization for Economic Co-operation and Development PO Patent Office

R&D Research and Development

RI Research Institutes

RIS Regional Innovation System

RIS3 Regional Research and Innovation Strategy for Intelligent Specialisation of Thuringia (Regionale Forschungs- und Innovationsstrategie für intelligente Spezialisierung für Thüringen)

SME Small and Medium Enterprises

STIFT Foundation of Technology, Inovation, and Research (Stiftung für Technologie, Innovation und Forschung Thüringen)

SWOT Strength, Weakness, Opportunities, and Threat

TAB Development Bank of Thuringia (Thuringer Aufbau Bank)

TH Thuringian Higher Education (Thüringer Hochschule)

TH Thuringia (Thüringen)

TH Technical College (Technische Hochschule)

ThAFF Thuringian Agency for Skilled Personnel Marketing (Thüringer Agentur Für Fachkräftegewinnung)

ThCM Thuringia Cluster Management (Thüringer Cluster Management)

ThEx Thuringian Center for Start-ups and Entrepreneurship (Thüringer Zentrum für Existenzgründungen und Unternehmertum)

ThüBAN Thuringia Business Angel Network

ThürING Thuringian Network of Innovative Start-ups ( Thüringer Netzwerk für Innovative Gründungen)

TMBWK Thuringian Ministry of Education, Science, and Culture (Thüringer Ministerium für Bildung, Wissenschaft, und Kultur)

TMWAT Thuringian Ministry of Economics, Labor, and Technology (Thüringer Ministerium für Wirtschaft, Arbeit, und Technologie)

TT Technology Transfer

TTD Technology Transfer and Development

TTO Technology Transfer Office

TU Technical University/University of Technology (Technische Universität)

TUI Technical University of Ilmenau

UNIDO United Nations

USD United States Dollar ($)

VC Venture Capital

WB World Bank

WIN Growth, Innovation, Resources (Wachstum, Innovation, Nachhaltigkeit)

WIR Business, Innovation, and Resources (Wirtschaft, Innovation, Ressourcen)


1

Chapter 1 Introduction

This chapter provides the overview of the thesis and presents the reasoning behind the

study. Started by outlining the global and regional relevance, this study attempts to

clarify differing viewpoints on the context of innovation policy with its own limitations.

This chapter is closed by disclosing the structure and logic of the thesis.

1.1 Global Context

The shape and potential of worldwide industries in the next 5-10 years are yet unknown.

Technological advances are rapidly growing and technological innovations are becoming

the key priorities of emerging economies to shift to knowledge economy. Europe

identifies Knowledge Enabling Technologies (KET) as the future key competences of

Europe. KET is a set of technologies which complement and improve the current

technologies. For example, nanoelectronics allow computer chips to be much smaller

and more powerful. This helps to improve the current quality computer industry and

medical devices. Thus, these industrial sectors could be the leaders in their industrial

sector. Becoming the global player and the best technology is also known as achieving

Leadership in Enabling and Industrial Technologies or LEIT (European Commission,

2013b).

European Union has suggested that LEIT is one of the answers to global economic

crises and increase Europe’s regional competitiveness in knowledge economy (EC

Decision C (2013) 8631). KETs comprise six strategic technologies: nanotechnologies,

micro- and nano-electronics - including semiconductors, photonics, advanced materials,

biotechnologies, and advanced manufacturing systems with Information and

Communication Technologies (ICTs) (See annex 1 for explanation of different

technologies). These technologies cannot stand alone to give added-values but they

have to be combined together. Hence, KETs are knowledge- and capital intensive with

high potentials to address the current and future general public challenges (EC Comm.

(2009) 512).

Industrial leadership depends on fostering innovative knowledge production from basic

and applied research from higher education institutions (HEIs). Boosting KETs is not

enough on funding scientific research but also transforming HEIs into entrepreneurial

ones with strong technology transfer activities. Hence, I propose that Leadership in

Enabling and Industrial Technologies can only be achieved if government has a strong


2

commitment in the implementation of Regional Innovation System and Cluster

Approach. Thus, the key stakeholder in driving innovation should be government.

Europe’s competitive advantage has been challenged by intense competition both from

private sectors and incentives from many emerging economies. With the economic

crises and market distortion, Europe is not always able to match and attract investments

in innovation of KETs. As a response, European Commission introduced its recent EU

Framework for Research and Innovation “Horizon 2020” with funding mounting up to €80

billion for 2014-20201. Unlike typical research funding programs, Horizon 2020 focuses

not just on scientific excellence in KETs, but also on industrial leadership, and potentials

to strengthen current industrial leadership and stimulate open innovations in local,

regional, national, and international levels (EC Comm. (2012) 341). Thus, it brings

science from lab bench, to board room, and to the market through entrepreneurship and

the growth of SMEs in Europe.

1.2 Regional Context

Thuringia, as one of the Federal States of Germany, is unique on its position (see Annex

2 and 3 for the maps). As part of a strong German economy, it is still considered newly

developing state – labelled as part of ‘New States” from East German2. The State itself

has undergone major restructuration following the German reunification with The West

States under Federal Republic of Germany3 which resulted in many company closures

due to efficiency with much better equipped West German companies (TMWAT, 2011,

pp. 3, 6). Currently, the economic growth is about 3.1% with 40 industry operations for

every 100.0000 inhabitants which means that the economic prospect is high (see Table

1.1 for more details). In comparison with other industrial States, Thuringia is doing better

than Bavaria or Saxony (TMWAT, 2013b, p. 1).

1 Horizon 2020 is the financial instrument implementing the Innovation Union, a Europe 2020

flagship initiative aimed at securing Europe's global competitiveness. Further information please

visit http://ec.europa.eu/programmes/horizon2020/ 2 After German Reunification ‘Die Wende’, five new states were re-established

Brandenburg, Mecklenburg-Vorpommern, Saxony, Saxony-Anhalt and Thuringia. 3 Also known as Bundesrepublik Deutschland (BRD)

http://ec.europa.eu/programmes/horizon2020/


3

Table 1 General Profile and Economic Performance of Thuringia

2012 Values

Area 16.172km2

Population 2.229.000

Population density 138 people/km²

Working population 1.015.800

GDP nominal 49,9 Mio. EUR

GDP per employed person 48.773 EUR

GDP per inhabitant 22.252 EUR

Gross Value Added 44,7 Mio. EUR

Exports 31,5 %

(Source: Thuringia Statistics Office, retrieved on 1 July 2014)

Now, its economy depends on manufacturing industry as the main growth engine. Since

the unification and economic reconstruction in ex- East German regions, Thuringian

manufacture has quadrupled its added value and made Thuringia as one of the highest

economic performance compared to the average of the new German States with an

export volume of 31.5% (German average export volume: 46.1%, new German States

average: 34.1%) (Germany Trade & Invest, 2014). United Kingdom maintains to be

Thuringia’s main trade partner with more than 1 billion Euros worth of exports. France

and Italy come second and third. Automobiles (Opel – Eisenach) and automotive parts,

plastics, metals are highly demanded products from Thuringia. However, highest export

rates are from medicine technology, toys, and pharmaceutics with more than 40% quota

(TMWAT, 2011, p. 22, 2013b, p. 8).

Thuringia has various innovation products the world has forgotten, both past and present

from high quality metal casting for bells and metallurgy, weapons, printing, medical

devices, and optics. Now, Thuringia’s highest export rates are from Knowledge Enabling

Technologies (KETs) such as precision technology (advanced manufacturing), medical

technology (micro- and nanoelectronics), and pharmaceuticals (biotechnology) with

more than 40% quota (TMWAT, 2012). Its international innovation products are evident

from the photodiodes for Mars explorer “Curiosity”, optics and precision technology from


4

Schott in Jena, and MP3 codes that revolutionized the music industry (Heimpold, 2011;

TMWAT, 2012).

Thuringia’s entrepreneurship and start-up agencies are funded by European Structural

Funds (ESF and ERDF), with these financing getting less every year Thuringia has to

come up with a new strategy, an effective policy with sustainable funding (Heimpold,

2011; TMWAT, 2012). Despite having more than 20 research institutes and biggest

German commercial research institute ‘Innovent’, Thuringia has the lowest innovation

rate (25 patents/100.000 population compared to German national average of 57

patents/100.000 population) (TMWAT, 2011, 2013b). Thus, there is a strong urgency to

address improve the innovation climate in Thuringia. The question is how to unlock the

potentials further? (Interview X)

1.3 Aim

The aim of this research project is “to evaluate the regional innovation system in

Thuringia in the context of Horizon 2020 Strategy, by assessing the current policy and its

possible future development”. Identification of the main stakeholders involved and

innovation strategies will be of the key focus of this project.. There are many factors that

emphasize the important of innovation in knowledge economy with focus on answering

one fundamental question: What explains innovation-based industrial leadership at

regional level?

1.4 Theoretical Framework

There are two main theoretical frameworks being used in this study. Firstly, it is Regional

Innovation System (RIS). The approach focusses on the relevant processes in

technology transfers. This covers R&D policy, regional development, regulatory

framework, local culture, and network access to expertise. Thus, the focus of innovation

policies depends on how government as the key regulator puts together all the

processes as part of a regional4 development. (B. T. Asheim, Smith, & Oughton, 2011;

Doloreux & Parto, 2005a).

4 The term ‘regional’ in many cases has been disputed due to its ambiguity (B. T. Asheim, Smith,

& Oughton, 2011, p. 11). Most scholars agree that regional means cross-borders. In the case of

Thuringia, it means within Thuringia and its surrounding region (TMWAT, 2011).


5

Within this RIS, I also introduce the implementation of Porter’s Diamond in Cluster

Approach. Michael Porter’s Diamond provides the guiding principles to analyse and

identify the key competitive advantage of a region which can be exploited. This helps in

understanding which innovation process should be prioritized (Ketels, Lindqvist, &

Sölvell, 2006). It simplifies the analysis by placing national competitiveness through four

main factors that are interconnected: (input/production) factor conditions, (market)

demand conditions, related and supporting industries (that could benefit main economic

activities), and firm strategy, structure and rivalry (market competitions) (Porter, 2008).

The second approach is by focussing on the stakeholders. KETs innovation evolves

from a simple linear model, which relies on university as the sole knowledge source, to

multi-stakeholders process. This framework is also called as Quintuple Helix Model

(Leydesdorff, 2012). Rather than focussing on the processes, this framework puts the

focus on the innovation stakeholders. It argues that success innovation depends on the

synergy between academia, business, government, civil societies and press, and

environment (or its entrepreneurial climate). Quintuple Helix, or the ‘Five-Helix Model’,

advocates that two extra ‘helices’, media/civil societies and (natural) environments, as

drivers to innovation in globalisation, aside from the regular ‘Triad’ (academia, business,

and government). Civil societies through media and culture-based public are needed in

identifying and sustaining the social capital while at the same time providing the support

to the core stakeholders. Environmental factors are also crucial putting innovation into

the right perspective, for example in green energy innovation as a response to global

warming (Elias G. Carayannis, Barth, & Campbell, 2012a).

1.5 Methodology

With Regional Innovation System and Quintuple Helix as main analysis frameworks, this

study uses Thuringia as the main case study and in particular one of Thuringia’s

innovation hub, Ilmenau. To delve further in this topic, a series of interviews with the

local Ilmenau innovation stakeholders will be conducted as the source for primary data.

Secondary data will be collected through vast array of written resources, such as

academic literatures, reports, studies, press releases, news articles, magazine articles,

websites of companies/governments, published statistics, a promotional materials, and

industry/trade journals. The main working language will be in English and German.


6

Case Study: Thuringia and Ilmenau University of Technology

As one of the most important science centres in Thuringia, Ilmenau University of

Technology (TU Ilmenau) has been recognized by EU commission as one of the rising

stars in innovation of KETs in Thuringia as stated by Dr. Peter Härtwich, European

Commission DG Research and Innovation (personal communication, 11 February 2014)

with and high growth of start-ups in Thuringia (Michael Fritsch, Erbe, Noseleit, &

Schröter, 2009; Michael Fritsch, Noseleit, Slavtchev, & Wyrwich, 2010; Lautenschläger

& Haase, 2005). The recent OECD report on Local Economic and Employment

Development (LEED) also highlights TU Ilmenau success in fostering entrepreneurship

and their contribution to regional economy (Hofer, Potter, Redford, & Stolt, 2013).

Another unique aspect of TU Ilmenau is its location which is rather isolated from other

major cities in Thuringia, such as Erfurt, Weimar, and Jena and surrounded by

mountains (see Annex 3 and 4 for the map). TU Ilmenau success in innovation makes it

more attractive to be studied. Unlike Friedrich Schiller University in Jena which has its

own advantages from Max-Planck Institutes and other prominent research institution and

by spill-over effects from many established technology companies (Cantner & Graf,

2006). Furthermore, TU Ilmenau is the main driver of regional economy under Ilmenau

Technological Development Area which puts Ilmenau as perfect candidate for Regional

Innovation Systems model, which emphasizes the importance of entrepreneurial

university in knowledge economy (Cooke, 2004, 2008) through an effective

implementation of entrepreneurship programs (Hofer et al., 2013).

1.6 Personal Motivation

During my biomedical research experience in the Netherlands and the United Kingdom, I

had the chance to explore ‘the other side’ of science through public debates, ethic

course, and entrepreneurship trainings. These sparked my subsequent interest in

technology and innovation policy. In 2008, past Minister of Research and Technology of

Republic of Indonesia, Mr. Kusmayanto Kadiman, introduced me to the concept of ABG

(Triplex Helix: Academia, Business, and Government). Hoping that I could contribute

something positive to the innovation system in Indonesia or any other developing

countries, he encourages me to take a step forward by studying public policy.

Thuringia opens many opportunities in which I have the chance to get the support from

TU Ilmenau to delve into innovation strategy and ways to foster entrepreneurial mindset.


7

Furthermore, with the introduction of KET, LEIT, and Horizon 2020, this creates a

suitable situation to expand my current knowledge and to contribute concretely within

actual EU framework. These circumstances make the case study special and worth to

learn from it, particularly with the limited time and scope of the thesis itself.

1.7 Structure of Thesis

The structure of the thesis is written in three major parts. The first part, consisting of the

first two chapters (chapters II and II), describes the methodology for the empirical data

and theoretical framework. Chapter II expands further Section 1.4 in detail about the

interview methods and the reasoning for interviewees’ selection.

Chapter III present the evolution of innovation theory from early 1960s to recent one –

further explaining Section 1.3. It will cover Regional Innovation System, Quintuple Helix,

and Michael Porter’s Diamond Model. This chapter also expounds on technology

literature and its commercialization by drawing into the latest European Union

measurement of technology commercialization ‘Technology Level Readiness’ (TLR

scales) for KETs. TLR determines the readiness of an innovation product to be

marketed. These theoretical frameworks from Chapter II are the main guidelines for data

presentation and analysis in the second part of the thesis.

The second part of the thesis covers the results and discussion. It is split into two

chapters. Chapter IV and V describe the recent KETs innovation policy and knowledge

management in Thuringia and TU Ilmenau strategy vis a vis with European Union

Horizon 2020 strategy. Furthermore, it also provides the stakeholders analysis of policy

making and innovation drivers.

Chapter V gives answers to research questions by discussing and contrasting theory

and practice. The final part summarizes the thesis by a concluding chapter with a future

outlook and policy memorandum for TU Ilmenau, Thuringian Ministry of Economics,

Labor, and Technology (TMWAT), Thuringian Ministry of Education, Science, and

Culture (TMBWK), SMEs, and other relevant stakeholders.


8

Chapter 2 Theoretical Framework

According to Porter, the economic performance of regions is strongly influenced by the

vitality and plurality of innovation (Porter, 2003). In the context of high technology, such

as in Knowledge Enabling Technologies (KET), innovation does not follow standard

innovation model pathway (Crescenzi & Rodríguez-Pose, 2011, p. 17; Korres,

Tsobanoglou, & Kokkinou, 2011).

This chapter will first illustrate the complexity of technology innovation and how the

innovation has been studied from early 1950 in ‘Linear Model’, System Approach

‘National Innovation System’ and ‘Regional Innovation System’ (Philip Cooke et al.,

2011; B. Lundvall, 2007) to the latest innovation framework ‘Quintuple Helix’ together

(Leydesdorff, 2012) with Cluster approach (Porter, 2008).

2. 1 What is technology innovation?

There is a general misconception made by many policy makers and even scientists

consider that both technology and innovation are the same (Allan, 2014). Technology

and innovations are two different concepts all together. Technology refers to the

application of basic knowledge or know-how, while innovation is new insight, novelty, or

improvement that changes the current technology (Jain, Triandis, & Weick, 2010). A light

bulb is light technology that involves the application of physics law, but innovation

arrives when scientists develop LED light bulbs that could use less energy.

Technological innovation speaks about the process of finding the new applications of

knowledge coming from (basic) research that can address societal challenges

(Burgelman & Maidique, 2004, p. 4; EIT, 2014).

Technological innovation5 process begins with series scientific experiments that involve

various trials and errors, and result in inventions or discoveries, such as light bulbs

(Edison, 1880; Hargadon & Douglas, 2001), cars, smart phones, to the latest

mechatronics or robotics (Allan, 2014; Palli, Pirozzi, Natale, De Maria, & Melchiorri,

2013). Nonetheless, innovation could also come from completely unintended (or

accidental) discoveries, for example in the case of antibiotic penicillin (Fleming, 1944;

Kardos & Demain, 2011), sweetener Aspartame (Mazur, 1976; Stegink, 1984, pp. 3–5),

household appliance microwave (L, 1953; Osepchuk, 2009), X-Ray ‘Roentgen’ medical

5 Technological innovation will be referred as simply innovation in this dissertation.


9

instrument (Haase, Landwehr, & Umbach, 1997, p. 81; Röntgen, 1898), and heart

pacemaker (Casas, De Gortari, & Santos, 2000; Greatbatch, 1962).

Furthermore, innovation itself can be classified into two different categories: incremental

and radical innovations. Incremental innovations refer to process of adaptation,

refinement, adjustment, and/or enhancement of existing technologies (Ali, 1994; Andries

& De Winne, 2013; Dewar & Dutton, 1986; Ettlie, Bridges, & O’Keefe, 1984). These can

be seen in the case of computer processor that works faster with the improvements of

micro- and nano-chips (III, 2014; Toshihiro Hanawa, 2009) or medicines with less side

effects and higher efficacy by modifying the chemical formulas (Ooms, 2000; Wang &

Lipsitch, 2006). On the other hand, innovations that introduce new products or

revolutionize certain technologies are considered radical innovations (Burgelman &

Maidique, 2004, p. 4; Dewar & Dutton, 1986; Ettlie et al., 1984). The abandonment of

telegrams in favor of telephones was one of the most obvious examples of radical

innovations.

2.2 Technology Level Readiness (TLR)

To achieve both incremental and radical innovations, we need scientific revolutions6 to

change the paradigm that innovation is linear – one idea goes directly to the market.

Technological innovation evolves from a simple linear process to a much more complex

multi-stages process which includes regulatory framework and intellectual properties

applications (Andries & De Winne, 2013; United Nations Conference on Trade and

Development, 2001). NASA initially developed a scale called Technology Level

Readiness (TLR) to assess if an invention or innovation is ready to be marketed

(Conrow, 2011; Mackey, 2011).

TLR is divided into nine different stages. Each different stage represents a different

process/phase (see Figure 1). These processes start with basic research (TLR 1 and 2),

then feasibility studies to determine whether the innovation is really able to be

implemented (TLR 2 to 4). Next is the technology development in which enhancement or

6 Despite the obvious importance and contributions of innovations to economy, the study of

innovation only began with the publication of ‘The Structure of Scientific Revolution’ by Thomas

Kuhn. Kuhn highlighted the importance of basic scientific research and commercial values

through micro-politics of innovation (Kuhn, 1962). Together with Robert Merton, Kuhn pointed out

that innovation depends on scientific knowledge; however innovation also has its systemic and

socio-cultural aspects related to scientific knowledge itself, such as ethics and cultural impacts of

radical innovations from industrial era (Kuhn, 1962; Merton, 1957) .


10

improvement can still be incorporated (TLR 5 to 7). If it passes, then it moves to

demonstration and development (TLR 6 to 8). In the two phases, which are almost

simultaneously, innovation products have to pass regulations and further commercial

developments (TLR 8-9). The last touch comes with further test and commercial launch

with marketing operations.

Figure 1 Technology Level Readiness (TLR) Scheme

Simplified from (Conrow, 2011) and modified accordingly based on (Seán McCarthy,

2014)

As an example, one could imagine the development of smartphones. Microelectronics

and sensor-technology (photonics) started the innovation with touch screen technology

for mobile phones. A model will be produced to test its feasibility. This is the crucial

phase where theory is tested on miniature level. Further technology development by

incorporating anti-scratch surface or larger capacity battery is needed to develop the

technology further. With demonstration to the public and investors, this smartphone

requires system development such as software (operating system) or network security.

Lastly with more test and models, this innovation is ready for mass-production and the

market.

The example may look straightforward but one must remember that the stages do not

have clear-cut criteria. Different technologies may have different treatment and need

shorter or longer time to accomplish each stage. In many cases different stages

overlaps. Innovation in pharmaceuticals requires longer phases 8 and 9 for the clinical

trials (regulations) compared to computer chips. Nevertheless one thing is clear that

different phases represent competitiveness of the product. Any innovations are

considered pre-competitive (not yet commercially realistic) until it has a certain system


11

that enables consumers to use it, for example until a smartphone has an operating

system. Once an innovation has been tested and passed all the regulations and

standards, it becomes competitive. The danger of innovation development lies in

technology and system development in which many innovative products or technologies

cannot demonstrate the added-value or their applications. These phases are also known

as ‘Valley of Death’ where time and financial investments go down the drain.

2.3 How does innovation play a role in Industrial Leaderships?

Industrial leadership7 means being in the forefront industries in world market in product

or process technology or in production and marketing. Thus, it puts the focus of

industries on the technology transfer and its translation to commercial success, rather

than merely innovation (David C. Mowery & Nelson, 1999, p. 2) Thus, it should already

pass Valley of Death (See Figure 2.2).

To achieve industrial leaderships, an industry must at least consider four main critical

factors before setting a plan or strategy based on the different TLRs (European

Commission, 2013b). These critical factors can be grouped together as resources,

institutions (management), markets, and technology. Resources reflect comparative

advantages that encompass factor productions including supply of high-skilled labors.

Institutions denote governance, firm organizations/managements, institutional

leaderships, and inter-firm linkages. Markets are concerned with market regulations and

finding the niche in existing market segments or creating a new market8 (EIT, 2014;

Mackey, 2011; David C. Mowery & Nelson, 1999). Technology shows the capability of a

firm to stay and compete in the market through innovation. It is also important to be

noted that firms must be aware of the TLRs (see Figure 1 and 2) and know how to react

to the uncertainty brought by TLRs (Mowery & Nelson, 1999, pp. 5–7).

7 It has a very similar meaning to Porter’s competitive advantage that is to outperform one’s

competitors (Porter, 1990); however industrial leadership focuses on technological sophistication

and innovative performance.

8 The latter usually involves radical innovations.


12

Figure 2 TLR and Industrial Leaderships

Simplified from (Conrow, 2011) and modified accordingly based on (Seán McCarthy,

2014) and (David C. Mowery & Nelson, 1999)

2. 4 OECD Innovation System Approach

Following Kuhn and Merton studies, the Organization for Economic Cooperation and

Development (OECD) investigated further the contributions of science to economy

through innovations. OECD started with Cooperation in Scientific and Technical

Research (Wilgress Report, 1960). Wilgress Report findings concurs with Kuhn and

Merton, that many non-scientific aspects involved and affected in innovation process. A

follow-up study by OECD, known as Piganiol Report, set the foundation for OECD

Member States’ science, technology, and innovation (STI) policies for the next 25 years

– see Annex 5. It is also known as the “system approach”. The report stated, “The

scientists (…) has the opportunity to cooperate with the educator, the economist, and

the political leader in deciding how science as a social asset can be furthered, and how

a nation and the human community can best benefit from its fruits. Science, in a word,

has become a public concern” (OECD, 1963a: p. 15). It also outlined science

contributions to social, health, economic, security, and well-beings of populations.

Piganiol Report has become the first white paper that advocated the importance and the

relationship of STI and economic policies. OECD suggested that since most of basic

research financing and educational policies come from the government, the government


13

should be the key actor that drives innovation. The government innovation policy should

be focused on universities and their cooperation with private sectors – a model which

was known as ‘The Statist Model’ (see Figure 2.1).

Figure 3 Innovation in Statist Model

In this model, innovation is led by government policies with limited academia and

business collaboration (adopted from Henry Etzkowitz, 2010a, p. 12)

In the United States, this Statist model was prominent in 1980s. Innovation policy began

to change with the introduction of Bayh-Dole Act (The Bayh-Dole Patent and Trademark

Amendments Act). The Act guarantees federally funded research in universities or

research institutes to file patents and carry out licensing from these patents. Indirectly,

this Act also brings the involvement of industries to interact with universities as partner in

licensing or research collaborations (D. C. Mowery, Nelson, Sampat, & Ziedonis, 2001).

Thus, innovation policy has shifted from centralized top-down, to a more fragmented

model which involves universities and research institutes (academia) and industry – lead

by government agencies (see Figure 3).

Reflecting on the technological dynamics, economic situations, and empirical findings,

OECD system approach evolved from 1970s to 1990s. In 1970s, the Research System

focused on the government top down approach to lead innovative activities in academia,

private sectors and their collaborations through financial incentives. In early 1980s, with

the dire economic climate in Europe, particularly the situation in Great Britain, OECD

suggested a more intensive and active undertakings with private sectors and less

government interventions. This was laid down in Technical Change and Economic Policy

(1980s) (Breschi, Lenzi, Malerba, & Mancusi, 2014; Doloreux & Parto, 2005a; EIT,

2014).


14

Eventually, OECD endorses NIS approach in 1990s by highlighting importance of linked

activities between government, academia, and private sectors (business) called National

Innovation System. – see Annex 5 and Annex 6 as comparison (OECD, 1995). OECD’s

priority in innovation is particularly important for Europe since European Union’s science,

technology, and innovation policies are primarily reflecting on OECD’s directions

(Doloreux & Parto, 2005a).

2.5 National Innovation Systems

Built upon OECD “systems approach” concept, three researchers offered a new

conceptual framework for science, technology, and innovation with ‘National Systems of

Innovations (NIS) by C. Freeman (1987), B.-A. Lundvall (1992), and R.R. Nelson (1993).

NIS framework suggest that innovation is part of a larger system comprising different

stakeholders with the focus of learning process resulting from different stakeholders’

behaviors and relations within a certain geographical location – see Table 2.3. Thus, it is

important to understand the process and primary activities of different stakeholders in

different countries (Christopher Freeman, 1987; B.-A. Lundvall, 1992; Nelson, 1993).

Table 2 Different National Innovation System (NIS) definitions by the primary

principal investigators of NIS

NIS completes the innovation conceptual framework in a more diverse and complex

approach from various case studies, primarily in Scandinavia, US, and Japan (den

Hertog & Remoe, 2001; Chris Freeman, 1995). The latter showed that innovation

paradigm also moved from incremental innovations in 1970-1980s to radical innovations

in 1990s with the rise of specialised and advanced technology research and

Freeman, 1987 "network of institutions in the public and private sectors whose activities and interactions initiate, import, modify and diffuse new technologies."

Lundvall, 1992 "the elements and relationships which interact in the production, diffusion and use of new, and economically useful, knowledge ... And are either located within or rooted inside the borders of a nation state."

Nelson, 1993 "... a set of institutions whose interactions determine the innovative performance ... of national firms."


15

development. Innovation of high technologies does not depend on (technical) research

activities alone but also marketing, (legal) administrations and the understanding of

commercial world and to an extent politics (Burgelman & Maidique, 2004, pp. 4–8;

Klingebiel & Rammer, 2014; Löfsten, 2014; Sears & Hoetker, 2014). With the increasing

complexities and uncertainties of advanced technologies, now technological innovations

must pass several steps such as certifications, safety tests, patents, product designs,

and marketing.

In the context of policy making, the former OECD “System Approach” focuses on the

role of government with its capacity to make and execute policies as stated in The

Research System (OECD, 1975), “… research cannot make alone a valid contributions

unless it is harnessed to comprehensive policies”. Rather than focused on the

governments, NIS tries to analyze innovation from the process. Thus, NIS takes into

account the globalization of research activities, networks of collaborators, clusters*, and

the role of intellectual properties – see Figure 5.

Figure 4 National Innovation System Schematic Representative

Adopted from (Henry Etzkowitz, 2010a, p. 13); Etzkowitz argue that NIS represents

fragmented governance (laissez-faire) society

More fundamentally, NIS puts the emphasis on ‘greater collaborations’ from networks

created from the activities supporting innovation, such as joint R&D between universities

and industries, research contracts, or licensing the main innovation sector or ‘national

champion firm’. This is one of the main reasons for OECD to study every OECD

Member States innovation policy between 2005 and 2010 – see Annex 6. OECD (and to

an extent, EU) encourages regions to take action such as: promoting innovation, new


16

forms of financing (i.e. venture capitals, business angels networks) through start-ups,

business services, and technology transfer; increasing interactions between

firms/business and high education/research institutes; encouraging small firms to carry

out R&D for the first time; building networks and cooperation in industry; and developing

high qualified labours/experts (Bonilla, Bishop, Axon, & Banister, 2014; EIT, 2014;

Korres et al., 2011; OECD, 2010)

The main critique of NIS is its focus on its national level; setting NIS almost exclusively

on the ‘local’ perspective and discounting the regional and global linkages between local

cluster or and innovation partners elsewhere. This is certainly becoming more and more

relevant with globalization (Chris Freeman, 1995; B. Lundvall, 2007). In California, Apple

cannot market a new iPhone without making sure that they do not break other

companies’ patents or understand what their international customers wants while at the

same time licensing parts of its technology from its rival, Samsung, in Taiwan. Google

must follow certain countries’ regulations, for example in regards to censorships in China

or Islamic countries. Genzyme, a Dutch biotech company, is also a good example. With

their headquarter in The Netherlands, they has two production plants in the United

Kingdom, sales branches around Europe and America, and R&D with different

universities worldwide (Deborah Spencer, personal communications).

Figure 5 Learning Regions and Learning Flows in Regional Innovation Systems


17

(summarized by Author from Cooke et al., 2011)

2.6 Regional Innovation System

The expansion of NIS concept is also known as Regional Innovation System (RIS).

Coming from regional science and economic geography, it puts its core concept on

global linkages between innovation stakeholders and partners. RIS proposes that

innovation cannot be contained only on national level but also regional level – bringing

innovation outside the state boundaries into the neighboring regions – to form „learning

regions “ and allow learning flows (Philip Cooke, Gomez Uranga, & Etxebarria, 1997) –

see Figure 5.

This is more relevant when high/advanced technology is involved as evidenced by

European Regional Innovation Systems which is embedded in Horizon 2020 in stimulate

interactions and synergy among EU Member States. EU on the basis of OECD’s

innovation policy also put their policy emphasis on regional competitiveness by the

following five main strategies: (1) regional policies for human resource development, (2)

demand-driven focus to human resource development, (3) base competitiveness on the

development of partnerships, (4) reinforcement of economic efficiency by policies of

equity, and (5) development of regional governance to consolidate national policies. This

is reflected by EU’s Social Cohesion and Development Policy and Social Inclusion and

Development (Bonilla et al., 2014; EIT, 2014; Korres et al., 2011; OECD, 2010) – see

Figure 6. It is EU’s strong view that innovation should address societal challenges while

at the same time strengthen the social cohesions and inclusions in Europe. Thus, each

policy should be linked and in coherence with other policies which charts a strong

regional innovation system.

Figure 6 Regional Innovation Systems in Europe

(modified from Breschi et al., 2014; Korres et al., 2011)


18

2.7 Cluster, Innovation, and Entrepreneurship

Both NIS and RIS are almost inseparable with the concept of industrial Cluster or

agglomerations of closely related industries for consolidating national policies and

gaining regional competitiveness. According to Michael Porter, clusters are “geographic

concentrations of interconnected companies, specialised suppliers, service providers,

firms in related industries, and associated institutions … in particular fields that compete

but also cooperate” (Porter, 1990, p. 197) Numerous studies showed that the presence

of cluster in a region stimulate commercialization of research by lowering its entry cost in

starting business, creating existing network for reaching critical mass, and providing

better access to diverse range of innovative inputs and complementary products (B.

Asheim, Cooke, Cooke, & Martin, 2006; Brenner, Cantner, Fornahl, Fromhold-Eisebith,

& Werker, 2011; Cooke, 2008; Delgado, Porter, & Stern, 2010; den Hertog & Remoe,

2001). The latter is definitely important for innovation in achieving LEITs which requires

a mix and match similar technologies.

It is argued that Cluster approach is the most appropriate approach to allow a ‘collective

learning system’ to analyze knowledge flows and competitive advantage through

interactions between certain types of activities based on four main attributes (Brenner et

al., 2011; Delgado et al., 2010). These attributes, which are also known as ‘ Porter’s the

diamond’, are context for firm strategy, structure, and rivalry, factor (input) conditions,

demand conditions, and related and supporting industries (Porter, 2003).

Factor conditions are production factors that determine production and supply of

goods/services, such as labour, natural endowment, capital, and infrastructures.

Demand conditions speak about the characteristics of (home) market demand. Firm

strategy, structure, and rivalry cover the conditions of firms and market regulations in a

certain country. The last one, related and supporting industries are the presence or

absence of industries that supply and support the value chain of the relevant industry

(Porter, 1998) – see Figure 7 .

Delgado, Porter, and Stern (2010) found that cluster stimulates entrepreneurship

through the growth of start-ups, increased productivity and collaborations among

participating firms (and other stakeholders such as academia and government

agencies). Furthermore, it also suggests facilitation of decision making through

increased communications and collaborations among innovation stakeholders,

particularly in RIS learning process. (Delgado et al., 2010)


19

Figure 7 Porter's Diamond for Cluster Analysis (Porter, 1990)

The latest and more intricate technological innovation gives birth to a new key notion

‘technological entrepreneurship’ under RIS (Breschi et al., 2014; Nacu & Avasilcăi, 2013;

Thérin, 2014, p. 17). This notion is a fundamental driver of innovation process. Mere

technical knowledge is not sufficient to bring technological innovations. Technological

innovation requires entrepreneurial spirit of a person or persons in understanding of

commercial world and socio-political environment to make profits and tackle societal

issues – see Figure 8 (Andries & De Winne, 2013; Burgelman & Maidique, 2004, p. 12;

EIT, 2014; Hargadon & Douglas, 2001). This is why cluster under RIS is very much

endorsed by EU under European Cluster Approach (Korres et al., 2011).

2.8 N-Helix Model

NIS and RIS are not without its limitations. The systemic approach introduced is not

sufficiently responsive to the dynamic of globalization, social relations, and technology

life cycle. It fails to address the changing paradigm of market and environment

interaction that moves from technology-push to a demand-pull approach in less favored

regions or regions with fragmented power (Elias G. Carayannis, Barth, & Campbell,

2012b; H. Etzkowitz & Dzisah, 2008; H. Etzkowitz & Klofsten, 2005). Both NIS and RIS

Context for Firm Strategy and

Rivalry

Demand Conditions

Related and Supporting Industries

Factor (Input) Conditions


20

assumes that innovation is generated in localized learning with fixed activities and

centralized power (H. Etzkowitz, 2004).

Figure 8 Technological Entrepreneurship and its Complexities

(adapted from Burgelman, Robert A, and Modesto A Maidique. Strategic Management of

Technology and Innovation. 4th ed. Homewood, Ill., p.5: Irwin, 2004 and modified based

on Horizon 2020 concept as outlined by “European Institute of Innovation and

Technology (EIT).” Horizon 2020, 2014.

http://ec.europa.eu/programmes/horizon2020/en/h2020-section/european-institute-

innovation-and-technology-eit.)

Thus, we are faced with paradox. Innovation in advanced technology by its nature is

unpredictable and full of uncertainty. The risk of failure is high (Andries & De Winne,

2013; Dewar & Dutton, 1986). Despite the effort of rationalizing innovation through the

systemic approach, it is becoming clear that there is a distinct need for new and

empirical research to simplify the complicated innovation framework, particularly as a

http://ec.europa.eu/programmes/horizon2020/en/h2020-section/european-institute-innovation-and-technology-eit

http://ec.europa.eu/programmes/horizon2020/en/h2020-section/european-institute-innovation-and-technology-eit


21

rule of thumb in decision- and policy-making. The focus shifted from process to

actors/stakeholders9.

2.8.1 Triple Helix Innovation Model

As a response to NIS and RIS limitations, Etzkowitz and Leydesdorff offered another

alterative system approach to the innovation called the Triple Helix Innovation Model.

This innovation model considers three main actors in innovation policy not exclusive to

one another but cooperative and interactive with each other – with overlapping roles in

between (Etzkowitz & Leydesdorff, 1996; Leydesdorff, 2012).

Figure 9 Schematic representation of Triple Helix

(remodeled from Etzkowitz, 2010a)

Innovation, the spirit on making things better and more sustainable, obviously cannot

originate from centralized policies made by the state (government), but also from

involving other ‘intellectual actors’. Academia produces and improves the technological

innovations in various universities and research institutes, while the industries are

prompted to bring them to the market. All these three actors bring economic and social

development. Together, they try to sustain it through equal and mutual relations. Here,

the institutional spheres overlap and encourage the actors to collaborate and cooperate

with each other. These reciprocal relations and their features are illustrated in Figure 9.

9 Long before, Kuhn and Merton argued that to speed up innovations, identification of key

innovation stakeholders is important. This key stakeholder should be the one who is able

to intervene and initiate innovation process (Kuhn, 1962; Merton, 1957)


22

Thus, rather than ‘dictating; what needs to be done as in NIS/RIS, Triple Helix model

allows the stakeholders to decide through learning platforms – the overlapping roles of

academia, business, and government in equal way with civil societies as the

intermediaries10.

One distinctive view of relevance to this approach is academia-driven innovation. In

Triple Helix Model, academia is the main source of innovation which knowledge and

technology are applied together with industry and supportive policies from the

government. This is in line with Schumpeter’s idea that combination of knowledge is the

heart of innovation and entrepreneurship (Schumpeter & Backhaus, 2003). Furthermore,

it also gives much importance to the institutional capacity of academia, particularly the

role of technology transfer office (TTO) to synergy and liaise the innovation activities

particularly in bridging academia with government and industry (Etzkowitz, 2004).

2.8.2 Quintuple Helix

Responding to the economic crises, growth of high technologies, and global warming,

Carayannis and Campbell incorporated two other ‘helices’. First, they introduced

Quadruple Helix (2009) by adding another helix: media-based and culture-based public

and civil societies. He argues that innovation should involve democratic mechanisms in

decision making (Carayannis & Campbell, 2009; 2012). This is important because

creative industry is inseparable from technology, for example in product design and its

practicality to change the public’s lifestyle. Secondly, in the context of global

environmental challenges, innovation should also incorporate environment as another

key driver to innovation – this model known as Quintuple Helix. As such in global

warming, high technological innovations in solar panels and biofuels were driven by the

10

It is clear, that in this model, the definition of each actor is fluid. Rather than defined by its literal

definition, each actor is defined by its role in driving innovation (Henry Etzkowitz, 2010a, p. 17).

This can be observed in the actions of policy institutions or think tanks or any other civil societies

as they can take both roles as ‘government’ and ‘academia’. Consortium of Science, Policy, and

Outcome (CSPO) is a think tank that works with the US House of Congress on issues involving

new science and technology policies. On one hand, they can be considered as part of

‘government’, while on the other hand, CSPO also works with different universities as part of

‘academia’, particularly Arizona State University, in conducting research and undertaking

international collaborations. Here, ‘government’ can also mean international organizations and

communities depending on its role which are not bound nationally or regionally but internationally.

Some of the examples are: European Molecular Biology Organization, European Science

Foundations, Max Planck Society, National Institute of Health, and Commonwealth Science

Council.


23

need of addressing the climate change and fossil fuels depletions (Carayannis et al.,

2012b) – see Figure 10.

Figure 10 Schematic Representation of Quintuple Helix

(adopted from Carayannis et al., 2012a)

Thus, the analytical point of innovation under Quintuple Helix depends on the five

aspects: (1) the education system that provides the human capital, (2) economic system

that represent economic capital, (3) political system that administer law and create

stability, (4) civil society and public that represent the social capitals such as attitudes,

values, mindsets, and (5) environment that can be translated as natural environment (in

the case of green technology) and comparative advantage (such as natural resources)

(Carayannis et al., 2012b). Thus the flow of know-how does not depend on actor.

Innovation has to be driven by all stakeholders.

2.9 Summary

In short, the study of innovation has just begun in the less than a century. Along with the

changes and demands of the public, knowledge production, technology transfer, and

commercialization of innovations, the system approach of innovation has evolved

rapidly. The development of Technology Level Readiness as indicator to assess

innovation has brought a multi-dimension structure, in which innovators are faced with

regulatory, market, and cultural frameworks.


24

It began with a linear model of innovation which claims that knowledge production

depends solely from specific discipline in academia (mode 1), to interdisciplinary

approach within academic communities (mode 2). With the introduction of National

Innovation System, and later its reformed model, Regional Innovation System,

innovation requires a much more comprehensive framework. It does not depend on

academia, but through learning process with other stakeholders, business and

government (mode 3).

In the last decade, in response to the limitations of NSI/RSI, the Triple Helix Innovation

Model has started the efforts to simplify and start to blur the boundaries between

academia, business, and governance. It argues that in innovation policy making,

government cannot stand alone without understanding the nature of science and

technology from academia and the market conditions from their business partners.

However, unlike RIS, Triple Helix points out the importance of intermediaries, such as

technology transfer office as university liaison with government and business.

Building upon Triple Helix, Quintuple Helix model adds two more actors: public and

environment. Understanding that knowledge in a Quintuple Helix Model is the pivotal

force and driver for progress. The Quintuple Helix is a model which grasps and

specializes on the sum of the social (societal) interactions and the academic exchanges

in a state (nation-state) in order to promote and visualize a cooperation system of

knowledge, know-how, and innovation for more sustainable development (see

Carayannis and Campbell [2010], p. 62).

Thus, the goal of the Helix-Conception is accomplished through the resource of

knowledge which produces additional value for society in order to lead in the field of

sustainable development. The pivotal question of the Quintuple Helix defines itself in the

following way: "‘Where does industrial leadership reside on regional level?”


25

Chapter 3 Methodology

In this Chapter, I describe the research procedure that I employed to answer the main

question. The main methodological approaches used in this Master Thesis are

assessment of conceptual framework in line with the research object (3.2) and in-depth

interviews with relevant stakeholders (3.3) with additional secondary data collection

(3.4). I also elaborate the limitations and challenges faced during the research (3.5).

3.1 Timeline, Funding, and Language

The project timeline was between 1 April 2014 – 1 June 2014, however the first

exploration of the topic started already from November 2013 with the initial contacts and

discussions with experts, researchers, and policy-makers. Some discussions about

innovation and cluster have also been conducted during my internship in Thuringian

Ministry of Economics, Labor, and Technology between July 2013 and January 2014.

Funding for this project was taken from Author’s scholarly expenses with scholarship

grant to from The German Academic Exchange Service (Der Deutsche Akademische

Austauschdienst, DAAD) awarded by Willy Brandt School of Public Policy, amounting up

to € 3.000,00.

The primary and working language in this project is English. German is also important as

many government documents and local newspaper articles are only available in

German. Despite author’s German proficiency, to avoid misinterpretation, the German

text will be provided as footnotes and further consultation with native speaker was made

to clarify particular passages/ data/information. Several interviews/discussions were also

done in German.

3.2 Conceptual framework of innovation and industrial leadership

Literature review is important to establish the conceptual framework and set the

theoretical foundation of the employed methodology, analysis, discussion, and future

research. Three main reference books were used as starting points: Henry Etzkowitz,

2010b; Surinach, Moreno, & Vaya, 2007; and Varga, 2009.


26

These books gave the initial background to the concept of technology transfer,

innovation system, and regional development with which further detailed search on

online database and reference books were conducted. Online database such as Google

Scholar, JSTOR, EBSCOhost, and Web of Science were used. Whilst for hardcopies

and reference books were obtained from libraries of University of Erfurt, TU Ilmenau,

University of Weimar, and Jena Friedrich-Schiller University collections.

Furthermore, these references were coupled with EU documents from (EU Database) to

the relevant public policy perspective and relevance particularly: Council Decision

2013/743, establishing the specific program implementing Horizon 2020 - the

Framework Program for Research and Innovation (2014-2020) and Leadership in

enabling and industrial technologies. Decision C 13/8631/EC, The European

Competitiveness and Sustainable Industrial Policy Consortium (ECSIP). (2013). Study

on the international market distortion in the area of KETs: a case analysis (DG

Enterprise and Industry). Brussels: European Commission11.

Table 3 List of experts/scholars in innovation and industrial leadership

Nr Name Expertises/Concepts Institution

1 Elias G. Carayannis 12

Quintuple Helix George Washington University, United States

2 Philip Cooke 13

Regional Innovation System

University of Cardiff, Wales, United Kingdom

3 Michael Fritsch 14

Innovation and Economic Geography

Friedrich-Schiller-Universität, Jena, Germany

4 Henry Etzkowitz 15

Triple Helix Innovation Stanford University 5 Loet Leydesdorff

16 Triple Helix Innovation University of Amsterdam, The

Netherlands 6 Bengt-Åke Lundvall

17 National Innovation

System Aalborg University, Denmark

7 Michael Porter 18

Microeconomic of Competitiveness, Cluster Management

Harvard University, United States

11

Retrieved from accessed

http://ec.europa.eu/enterprise/sectors/ict/files/kets/kets_market_distortion_pdf_report_july_2013_

en.pdf , last accessed 1 December 2013 12

http://business.gwu.edu/faculty/elias_carayannis.cfm. Retrieved April 2, 2014 13

http://www.cardiff.ac.uk/cplan/about-us/staff/philip-cooke. Retrieved April 2, 2014 14

http://www.uiw.uni-jena.de/index.php/team/47. Retrieved April 2, 2014 15

http://gender.stanford.edu/people/henry-etzkowitz. Retrieved April 2, 2014 16

http://www.leydesdorff.net/. Retrieved April 2, 2014 17

http://vbn.aau.dk/en/persons/bengtaake-lundvall(11cfc64f-5a0d-4006-89fd-

9e40dcdd5730).html. Retrieved April 2, 2014 18

http://www.hbs.edu/faculty/Pages/profile.aspx?facId=6532. Retrieved April 2, 2014

http://ec.europa.eu/enterprise/sectors/ict/files/kets/kets_market_distortion_pdf_report_july_2013_en.pdf

http://ec.europa.eu/enterprise/sectors/ict/files/kets/kets_market_distortion_pdf_report_july_2013_en.pdf

http://business.gwu.edu/faculty/elias_carayannis.cfm

http://www.cardiff.ac.uk/cplan/about-us/staff/philip-cooke

http://www.uiw.uni-jena.de/index.php/team/47

http://gender.stanford.edu/people/henry-etzkowitz

http://www.leydesdorff.net/

http://vbn.aau.dk/en/persons/bengtaake-lundvall(11cfc64f-5a0d-4006-89fd-9e40dcdd5730).html

http://vbn.aau.dk/en/persons/bengtaake-lundvall(11cfc64f-5a0d-4006-89fd-9e40dcdd5730).html

http://www.hbs.edu/faculty/Pages/profile.aspx?facId=6532


27

Subsequently, theoretical knowledge and EU policy documents were coupled and

additional relevant data, cases, and references were identified and followed up. The first

step was to go back to the initial publications and cross-referenced other publications19.

In sum, this thesis was based on National/Regional Innovation Systems, Triple-

Helix/Quintuple Helix Innovation Framework, Cluster and Competitiveness based on

Innovation (see Table 4.2 for the list of experts).

3.3 Primary Data Collection: in-depth interviews and discussions

Based on the Regional Innovation System (RIS) (Cooke et al., 2011) and Quintuple

Helix Innovation Framework (Carayannis et al., 2012a; Etzkowitz, 2010b), different

stakeholders from academia, business, government, NGOs/civil societies, and media

were selected for interviews (see Table 4 and Annex 8). This research employed in-

depth interviews to gather information relevant to innovation process in Thuringia and

Ilmenau. To accommodate different characters of research participants, who are

involved in innovation process, in-depth interview is the most suitable and objective

method to extract and understand hidden information, underlying motives and holistic

perspectives of the interviewee’s positions (Hine & Carson, 2007, p. 15). Most of the

interviews were done face-to-face in conventional manners while others were done by

telephone, Skype, Google Hangout, or email correspondences. A number of short

interviews/discussions were carried out during informal sessions in

conferences/workshops. To illustrate the process, please see Figure 11.

These interviews started with informal conversational interviews to provide friendly

atmosphere and make personal connections. This is necessary to confirm interviewee’s

interests in supporting the research and get the same/similar ‘wavelength’ and

understanding of concepts/definitions 20 . Following the brief informal conversational

interviews, guided interview, with basic prepared questions (see Annex 7), was

employed to obtain straight answers and minimize variations between interviews. This

was also important set the context of interview to innovation and industrial leadership

within the aim of the study.

In between the set questions, open-ended questions were also asked, depending on the

situation and answers given by the interviewees. This was deemed necessary to

19

This is important as many similar and identical concepts are labelled or named differently by

different researchers/experts/policy-makers. See 4.5 Limitations and Challenges 20

See Section 4.5 – challenges in conceptual framework.


28

explore, probe, and bring forth information concealed by interviewees. In addition, these

open-ended questions provided the flexibility needed to counter different interviewee’s

reactions (Berry, 1999; Gubrium & Holstein, 2002).

Figure 11 Flow chart of the methodology used in this study

(source: author)

Following the completion of the interviews, relevant information and data were

summarized, catalogued based on the topics/keywords, and followed up questions were

prepared. In some cases, further correspondences by Email and telephone were made

to confirm certain statements and inquire further information.


29

Table 4 List of experts/scholars in innovation and industrial leadership

Nr Stakeholders Participants Number of Interviews

1 Academia Technology Transfer Office

Academics

3

3

2 Government Thuringian Ministry of

Economics, Labour, and

Technology

Thuringian Ministry of

Education, Science, and

Culture

Chamber of Commerce

Thuringian Cluster

EU DG Research and

Enterprise

2

2

1

1

1

3 Business Small-medium Enterprises

(start-ups and spin-offs)

Consultancy*

6

2

4 Civil societies/

NGOs

Innovation Institutes

Academic/Research

Societies**

Tech transfer

intermediary***

Initiatives/associations

2

1

2

2

5 Press/Media Chief Redactor of Local

Business Magazine

1

Total Interviews: 29

Note: In some cases, classifications were based on the role of the participants. *) This

includes consultancy companies in Erfurt, Thuringia and Edinburgh, the United

Kingdom. Since they are profit-seeking, consultancy is considered part of ‘business’ **)

Academic/Research societies includes German Research Society (Deutsche

Forschunggemeinschaft, DGF), Boehringer-Ingelheim Fonds Network, and UK

Biotechnology and Biological Sciences Research Council (BBSRC). Despite their

funding from government, research societies acts almost independently from

government, thus it can be considered as civil societies. ***) Tech transfer intermediaries

are semi-profit seeking associations which owned/directed by government with clients

primarily governments and international organisations. This refer to German Society for

International Cooperation (Deutsche Gesellschaft für Internationale Zusammenarbeit

(GIZ) GmbH). Similar to research societies, their role in innovation and market opening

are more or less guided by international cooperation and contracts with SMEs.


30

3.4 Secondary Data Collection

Empirics and statistics were obtained from EURO-STAT21, German Federal Statistical

Office (Destatis)22, and Thuringian Statistic Office23. The information about Thuringia

was primarily from TMWAT, 2011 and 2013. While information about TU Ilmenau was

taken from TU Ilmenau Yearly Report 2013-2014 (TU Ilmenau, 2013) and released

information from TU Ilmenau Technology Transfer Office. Statistics and data from case

studies presented in the discussion section will be referenced accordingly. A number of

data presented in this thesis was also taken from two innovation and entrepreneurship

studies by STIFT as follows Fritsch et al., 2010 and Thüringer Netzwerk für Innovative

Gründungen (ThürInG), 2013.

Other information was gathered from vast arrays of written sources, such as press

releases, news/magazine articles, published documents, promotional materials, and

websites of companies, governments, or institutions. Online discussions, particularly on

Horizon 2020 LinkedIn groups, were also used as reference to practical experiences.

3.5 Challenges and Limitations

The main challenge is to get the opportunities to interview relevant stakeholders. This is

primarily difficult with the time availability. In some cases, there were no replies to

interview invitations. In that situation, alternative interviewees were sought out. The

limitation of this study is the difficulty in personal bias, especially since every stakeholder

has their own interest or agenda. Thus, to get some consistency of opinion, more

interviews were conducted.

Furthermore, there is absence of unified conceptual framework of innovation system,

particularly in its definition, national/regional scale, and empirical data validation. Various

researchers use ‘National Innovation System (NIS)’ and ‘Regional Innovation System

(RIS)’ interchangeably in different levels, scales and inter-relations. This made policy-

makers/politicians who are not fully conversed in innovation models (also extensively

discussed in Asheim, Smith, & Oughton, 2011; Doloreux & Parto, 2005).As it will be

discussed in the next chapter, each framework has its own limitations. Thus, one has to

be careful in selecting different frameworks to interpret the information.

21

European Union Statistic Office – EuroStat,

http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/ 22

Statistiches Bundesamt, https://www.destatis.de/EN/Homepage.html 23

Thüringer Landesamt für Statistic, http://www.statistik.thueringen.de/startseite.asp

http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/

https://www.destatis.de/EN/Homepage.html

http://www.statistik.thueringen.de/startseite.asp


31

Chapter 4

Innovation in Thuringia: Moving Forward and Unlocking its

Potentials

This chapter is the first part of findings. It expounds the innovation strategies in

Thuringia based on the discussed theoretical frameworks: Cluster Approach and

Regional Innovation System (RIS). Although the theoretical framework started with RIS,

Thuringia adopted Cluster policy earlier than Regional Innovation System. Thus, the

findings will be presented chronologically. It is summarized by analyzing the

stakeholders through the eyes of Quintuple Helix (government, business, academia, civil

societies/media, and environment). This section is indebted to Authors’ previous work

about Cluster Analysis in Thuringia (Handoyo, 2013).

4.1 Cluster Approach in Thuringia

Following Lisbon Agenda in 2000, Germany adopted the Cluster Approach on federal

level. The government identified the key industry in each German State and focus on

one specific sector 24 (Opaschowski, 2004). In late 2010, Cluster approach was

expanded into State level. Thus, every State is expected to identify and develop specific

Cluster initiatives (Heimpold, 2011). Cluster policy in Thuringia is designated to

compensate for shortcomings of the firm landscape. Thuringia has a small number of

large companies (only one company headquarter, compared to 90 headquarters in

Bavaria) and the high number of SMEs (TMWAT, 2011, 2012). Thus, the main subjects

of cluster policy are the cluster network organizations and firms’ cooperation to build

enough critical mass (Heimpold, 2011a, 2011b).

24

According to Jappe et al (2008), Germany started Cluster Approach already from 1990s

following the Fall of Berlin Wall; however, the policies were rather general and did not create

cluster/industry networks which are crucial for Cluster Policy. Ketels (2006) also identified that

Cluster Policy in Europe only came about after Lisbon Agenda (after 2000).

[ see Jappe-Heinze, A.; Baier, E.; Kroll, H. (2008): Clusterpolitik: Kriterien für die Evaluation von

regionalen Clusterinitiativen, Arbeitspapiere Unternehmen und Region Nr. 3/2008, Karlsruhe:

Fraunhofer-Institut für System-und Innovationsforschung (Fraunhofer ISI) Competence Center

"Politik und Regionen", in:

http://isi.fraunhofer.de/iside/p/download/arbpap_unternehmen_region/ap_r3_2008.pdf?WSESSIO

NID=c15d5beb2f56cd7a31d7c281e74e4970, accessed on 02/08/2013.]


32

To harmonize the efforts in Cluster Approach, TMWAT created Thuringian Cluster

Management (ThCM)25 as part of broader economic framework called “Future 2020”

(Zukunft 2020)(TMWAT, 2012). ThCM has four main objectives. It aims to strengthen

existing cluster growth and initiated a new potential cluster; increase expertise of

relevant stake-holders and stimulate innovations; to encourage cooperation between

Cluster actors and possible directions; and to provide international network support

including regional marketing. (TMWAT, 2011)

In order to enable participation of all relevant stakeholders in innovation process,

Thuringian government sets up four main bodies: Cluster Council, Cluster Board, ThCM,

and several Cluster Networks based on the different technologies. The Council meets

once a year to review progress and policy implementations by Cluster Board and Cluster

Board. It comprises the governmental executives: the Thuringian Ministry of Economy,

Labor and Technology (TMWAT), the Thuringian Ministry of Education, Science and

Culture (TMBWK) and the State Development Agency (LEG), Chamber of Commerce

(IHK), Thuringian Foundation for the Promotion of Technology and Innovation (STIFT),

and few other governmental departments. While the Board coordinate the cluster

policies between governmental departments. Implementation of policies with Cluster

Networks falls under Thuringian Cluster Management (ThCM) which is headed by LEG.

(TMWAT, 2012)

The structural relationship between these actors is shown below in Figure 12. Its

structure is rather rigid with the decision making process is being dominated by

governmental bodies and with limited private sectors influence or even academics. This

administrative burden often delays decision making and threaten the sustainability of

Cluster approach (Sölvell et al., 2003, Interview 3, 25). One could also see the typical

German bureaucratic top-down approach and the legacy of centralized governance from

the socialist East German era.

Thuringia focuses on thirteen clusters divided into three different categories: growing,

cross-sectional, and trending sectors as summarized on Table 5. Growing sectors are

automobiles (with Opel Eisenach as the driving actor), Life Sciences (under leadership

of Jena and Ilmenau), Green Energy (legacy of Solar Valley Centre Germany), and

Machinery (Schmalkalden). Cross-sectional sectors represent industries that can

support other growing and trending sectors. This category covers plastics and ceramics,

25

http://www.cluster-thueringen.de/

http://www.cluster-thueringen.de/


33

micro- and nanotechnology, sensor technology, and optics/optoelectronics; for example,

optics/optoelectronics can support automobiles, green energy, and robotics. The third

category is trending sectors which are industries that have high market potentials. Green

technology, robotics, and edutainment (creative economy) are in this category (TMWAT,

2011).

Figure 12 Structure of Thuringia Cluster Management (TMWAT, 2012)

Table 5 Overview of Thuringian Clusters

(compiled from TMWAT, 2011, 2012)


34

Aside from these clusters, Thuringia has two established clusters, which are food

industry and logistics 26 . Food industry includes liquor productions (Nordhäuser

Doppelkorn), sausage industries, mustard industries, and other local delicacies. Under

ThCM, food industry is incorporated into Life Sciences to upgrade its quality and

transform it into functional food (nutrition) industries. Logistics is another sector that

benefits from Thuringia strategic location in Germany and Europe (TMWAT, 2012).

4.2 Evaluation of Cluster Approach

Cluster approach in Thuringia depends on the government (TMWAT) policies (Interview

23). Despite Cluster Council Board efforts to involve other stakeholders, its top-down is

still prominent in decision making. Private sector is also not included in the decision

making process directly. They are represented by its cluster network (Interview 22).

Sölvel and Ketels (2003) argued that in decision making, private sector should be

participating in the Cluster Management. The rationale comes from the fact that the

private sectors are the ‘soldiers in the war field’. They know better what they need and

the field’s situation. In the context of industrial leadership, this is very significant as

different companies have to complete not just regionally but also globally (European

Commission, 2013b). Furthermore, private sectors are expected to be able to compete

globally. Solar Energy cluster in Thuringia, led by Bosch, are having difficult time

recently as they are losing their market to Chinese firms27. Despite suspected dumping

by Chinese solar companies, this could be addressed more effectively by governments if

communications between government and firms are closer (Choi & Anadón,

2013).Connecticut Cluster Management is hailed as one of the best examples. Having

CEOs of private firms in the Cluster Management leadership enables Cluster Policy

responsive towards market dynamics (Porter & Miller, 2003). Figure 13 and 14 list more

of Thuringian assets and points of improvement for both government and private

sector28.

Cluster requires a holistic approach and this comprehensive approach requires close

communications and cooperation among the stakeholders (Iammarino & McCann, 2006;

26

Tourism is technically a successful cluster in Thuringia particularly with its cultural richness and

long history, but it is not part of Thuringian Cluster Initiatives. ThCM uses tourism as part of

international marketing strategy under “This is Thuringia” (Das ist Thüringen) and “Discover

Thuringia” (Thüringen Entdecken) programs. 27

IG Metall, „Bosch Arnstadt muss bleiben”, 28 June 2013, http://www.igmetall.de/SID-

60970756-94813529/bosch-solar-energy-demonstration-vor-bosch-zentrale-in-gerlingen-

12016.htm, last accessed on 21 July 2013 28

This Figure will be discussed more in the next section as part of the whole evaluation together

with RIS.

http://www.igmetall.de/SID-60970756-94813529/bosch-solar-energy-demonstration-vor-bosch-zentrale-in-gerlingen-12016.htm




35

Storper & Scott, 2009). However, close cooperation does not mean collective

protectionism. Many high technology firms in Thuringia lack the efforts to upgrade their

products when we compared to Bioregion in Rhein-Neckar Dreieck (Bug, 2010; Krauss

& Stahlecker, 2001). Without upgrading their products through innovation, they are

losing their competitiveness and facing the threat of exiting the market (Interviews 4, 5,

11). In addition, there is also limited cooperation between private sectors with HEI/R&D

through consortiums, as in Scotland. Corporate Social Responsibility of Pharmaceuticals

such as Glaxo-Smith-Kline (GSK) providing PhD Fellowships is often to build strong

relationship with the future scientists and innovators. Similarly, Rhein-Neckar Dreieck

through Boehringer-Ingelheim has strong CSR by building new laboratories and

supports to local research students. This way, small and medium companies can benefit

from R&D activities without spending much (Mason & Brown, 2010; von Wissel, n.d.)

and at the same time attracting bright students to stay in the area and close to the

companies (Interview 1, 24). Rhein-Neckar Dreieck went steps ahead by incorporating

Cluster approach in the Regional Planning and Infrastructure. By expanding their

innovation strategy, Neckar region adopts the full picture of Regional Innovations

System (Krauss & Stahlecker, 2001).

4.3 Regional Innovation System in Thuringia

Following one year discourse (between June 2013 and May 2014), TMWAT announces

Regional Research and Innovation Strategy for Intelligent Specialization for Thuringia or

RIS329. The idea behind RIS3 is to bring the synergy between regional development,

cluster approach, and the opportunity of Thuringia innovation strength through research

and development (TMWAT, 2013a). By aligning Thuringia’s regional KETs innovation

strength and Horizon 2020, the Thuringian government expects to gain more benefits for

the local economy in achieving industrial leadership (Interviews 16-20).

Two specific sets of tasks underlie the foundation of RIS3. First, it identifies specific

needs of the market and what Thuringia can offer. This is imperative in making the links

between innovation or technology potentials and the market demands. This is primarily

done by Strength, Weakness, Opportunities, and Threat (SWOT) analysis as published

by TMWAT (2014) in RIS3 white paper. Secondly, it focuses on the development of

tools/instruments for an innovation friendly platform. This platform is the key in bringing

all the stakeholders together (see Figure 15).

29

Regionale Forschungs- und Innovationsstrategie für intelligente Spezialisierung für Thüringen


36

Figure 13 Diamond Model: Government Role in Upgrading Cluster in Thuringia Modified from Handoyo (2013). Black represents positive aspects of the Cluster, red represents points of improvements.

Figure 14 Diamond Model: Private Sectors Influences on Cluster Upgrading

Modified from Handoyo (2013). Black represents positive aspects of the Cluster, red represents points of improvements.


37

Table 6 Contribution of Knowledge Enabling Technology to Thuringia's Economy

Industries/Sectors

Gross Value Added Employment

Changes between 2008-2020 Changes between 2008-2020

∆ [Mio. EUR] [%] ∆ [Mio. EUR] [%]

Kn

ow

led

ge E

nab

lin

g T

ec

hn

olo

gy

Ap

plic

ative T

ech

Automotive + 720-810 80-90 + 10500-12400 51-60

Life Sciences Biotechnology + 140-150 140-150 + 1600-1800 100-113

Medical Devices + 270-300 123-136 + 3800-4300 83-93

Energy, Energy Storage + 470-530 104-118 + 7100-8100 73-84

Engineering + 220-300 20-27 + 1500-3000 6-13

Cro

ss-s

ectio

na

l

Te

ch

Plastics and Ceramics + 520-610 55-64 + 6100-7700 30-38

Micro- and Nanotechnology + 90-100 69-77 + 1000-2400 34-55

Precision Technology + 180-210 72-84 + 2100-3300 45-48

Optics/Optoelectronics + 270-290 135-145 + 1900-2600 46-63

Sum + 2880-3300 67-77 + 35600-43600 39-48

Tre

nd

Gro

wth

Are

as Green Tech + 820-930 82-93 + 9400-11000 52-61

Service-robotics + 8-9 73-82 + 100-120 43-52

Creative Economy, Edutainment + 120-130 200-217 + 1500-1600 167-178

Sum + 950-1070 89-100 + 11000-12700 57-66

Source: (TMWAT, 2011, p. 250)


38

In RIS3, Thuringia sets its technology potentials under four main pillars of intelligent

specialisation. They are industrial production and systems, sustainable and intelligent

mobility and logistics, healthcare and its technologies, and sustainable energy and

resources utilizations (see Figure 16). Each of the pillars represents the interdisciplinary

and application-oriented approach towards the implementation of technologies from the

different Cluster specializations (see Table 6 and in comparison with Table 5) (TMWAT,

2013a, 2011, 2012).

Figure 15 RIS 3 Strategies (modified from TMWAT (2014, p. 7))

This is done by intensifying the partnerships between innovation stakeholders and taking

advantage of ICT, creative economy, and services to attain the intelligent specialisation.

Creative industries such as advertising companies can help promote innovation products

in Thuringia by regional branding ‘Das ist Thüringen” (That’s Thuringia) 30 . ICT can

support the networks and communications including the use of social media for public

relation efforts (TMWAT, 2011)

30

The advertising video can be accessed on https://www.youtube.com/watch?v=UQxiYXptxqw

(DE) and https://www.youtube.com/watch?v=-_B-1ufsNZE (ENG), last accessed 1 July 2014

https://www.youtube.com/watch?v=UQxiYXptxqw

https://www.youtube.com/watch?v=-_B-1ufsNZE


39

Figure 16 Pillars of RIS3 to achieve its Vision

(TMWAT, 2013a, p. 7)

4.4 Innovation Stakeholders: Quintuple Helix in Thuringia

Unlike Regional Innovation System which focuses on innovation activities/strategies,

Quintuple Helix Innovation Model argues differently. It proposes that innovation that

leads to industrial leadership depends on the collaboration of the key stakeholders. The

key actors here are government, firms, academics, civil societies/public, and media

(Elias G. Carayannis et al., 2012a; H. Etzkowitz & Leydesdorff, 1996). However, this

classification overlaps in some organizations for example in the case of Government

initiatives (see Table 7).

4.4.1 Government

In Thuringia, based on RIS3, TMWAT is the main actor that coordinates the innovation

process based on what firms need. On financing side, TMWAT focusses on providing

loans, guarantee and subsidies. Aside from that, the focus also comes in participation

offer which depend on two different organizations, which serve as knots, under TMWAT

among several initiatives: State Development Corporation of Thuringia (LEG31) and

31

Landesentwicklungsgesselschafts Thüringen, http://www.leg-thueringen.de/

http://www.leg-thueringen.de/ueber-uns/uebersicht/


40

Table 7 Quintuple Helix Stakeholders in Thuringian Innovation System

Government Academia Business Civil Societies Press

1. EU and EC

a. DG Research

and Enterprise

b. National

Contact Points

2. BMWi

EXIST

3. BMBF

4. TMWAT

a. ThEx

b. ThCM

c. LEG + ThAFF

5. TMBWK

THGN

EU Referenten

6. IHK

TGN

7. TAB

1. HEI

a. University of

Erfurt

b. Bauhaus

University

c. University of

Jena (FSU

Jena)

d. TU Ilmenau

e. FH Jena

f. FH

Nordhausen

g. FH

Schmalkalden

2. Research Institutes

a. Max Planck

Institutes

b. Fraunhofer

Institutes

c. Leibniz

Institutes

3. TTO (linked to HEI)

4. Incubators and

Technology Parks

1. SMEs

2. Large Firms

3. Consulting Firms

4. Commercial

Research Institutes

5. Venture Capitals

1. STIFT

2. Market Team

3. ThüBAN

4. FTVT

1. WIR

2. Wirtschaftspiegel

Thüringen

(Author analysis)


41

Thuringia’s Centre for Start-ups and Entrepreneurship (ThEx32 ) (TMWAT, 2013a, 2011),

interviews 18, 24).

LEG was formed in 1992 as part of economy restructuration program following the

German reunification. Strengthened by 250 employees, its main roles cover a wide

range of sectors from attracting investors, properties, regional development, Cluster,

international marketing, regional management and development, energy and green

technology, and high-skills employment. The latter is managed in close cooperation with

Thuringian Agency for Skilled Personnel Marketing (ThaFF33). Between 1995 and 2003,

LEG has helped the formation of 944 companies with 48.550 employees and total

investment of 8.6 billion EUR34. Aside its main tasks, LEG strong role in Thuringia’s RIS

is on managing the Cluster to as discussed before (see Section 4.1). (TMWAT, 2011)

The other government initiative, which is directly involved in innovation and research

commercialization, is ThEx 35 . Recently formed in the late 2013, ThEx works a

coordinator for various efforts in start-ups formation. Serving as a knot, ThEx

harmonizes various NGO/associations efforts particularly in consulting, mentoring, and

events such as networking day and business competitions (TMWAT, 2013a, 2011).

Furthermore, ThEx fills in the missing link, which many civil societies fail to fill – see

Annex . It is to liaise with Chamber of Commerce (IHK) and other relevant government

agencies (Interviews 22, 24).

How about Ministry of Education (TMBWK)? TMBWK supports innovation by funding

basic research and support research infrastructure that favors innovative outputs. This

effort was signified by the formation of new division ‘Research and Scientific

Infrastructure’ in TMBWK in the first quarter of 2014 (Interviews 9, 19)36. TMBWK sets

the regional research priorities and aligns its policies with the federal Ministry of Science

(BMWi). Unfortunately there are very limited programs of research commercialization

due to the Thuringian Education Law that prohibits profit-taking from education institutes.

Chamber of Commerce (IHK) is another government body that represents the interests

of private sectors. IHK has similar efforts like LEG and ThEx including trainings,

32

Thüringer Zentrum für Existenzgründungen und Unternehmertum, http://www.thex.de/ 33

Thüringer Agentur für Fachkräftegewinnung http://www.thaff-thueringen.de/ 34

http://www.leg-thueringen.de/ueber-uns/uebersicht/, retrieved on 30 December 2013 35

Initially Research and Innovation was primarily coordinated by an ThürING (Thüringer

Netzwerkes für Innovative Gründungen, Thuringia’s Network for Innovative Start-ups). See

http://www.innovativ-gruenden-thueringen.de/ 36

TMBWK, http://www.bundespresseportal.de/thueringen/item/20071-forschungsexperte-

%C3%BCbernimmt-abteilungsleitung-im-th%C3%BCringer-wissenschaftsministerium.html,

retrieved on 13 January 2014

http://www.thex.de/

http://www.thaff-thueringen.de/

http://www.leg-thueringen.de/ueber-uns/uebersicht/

http://www.innovativ-gruenden-thueringen.de/

http://www.bundespresseportal.de/thueringen/item/20071-forschungsexperte-%C3%BCbernimmt-abteilungsleitung-im-th%C3%BCringer-wissenschaftsministerium.html

http://www.bundespresseportal.de/thueringen/item/20071-forschungsexperte-%C3%BCbernimmt-abteilungsleitung-im-th%C3%BCringer-wissenschaftsministerium.html


42

networking events, and consultations. It has also its own Start-up Network (Thuringian

Start-ups Network or TGN). The only different is the influence of TMWAT in decision

making. IHK becomes more the private sector lobby platform for the government.

4.4.2 Academia

HEI has an important role in gathering, generating, and distributing knowledge and

linking it to social challenges as innovation products (Michael Fritsch & Aamoucke,

2013). Research and Innovation in Thuringia can be found in primarily six different cities:

Erfurt, Weimar, Jena, Ilmenau, Schmalkalden, and Ilmenau with their HEI institutions

(see Table 8). Aside from HEI, R&D by other research institutes such as Fraunhofer

Institutes and Max Planck Institutes contributes largely to the research

commercialization. In terms of commercialization, each university depends on the

proactivity of their Technology Transfer Office (Interviews 1, 2, 3, 5, 7, and 15).

Technology Transfer Office (TTO) has a strong role in supporting scientists in their

research proposals/applications and/or business plans, providing information/contacts

for organizing patent applications/quality controls/certifications, and at the same time

encouraging students to be entrepreneurial through various events. In many cases, TTO

also manages the university incubator and works closely with technology parks. The

main problems of various Thuringia’s TTO are lack of financial supports and limited

staffs. A team of mere three to five people cannot really support hundreds of

researchers and students who would like to have consultations (Interviews 1, 2, 3, 5, 7,

and 15)

4.4.3 Business

Thuringia benefits more from Mittelstand economy or SME-based economy (see Table).

Large established companies in Thuringia such as Carl-Zeiss and Schott clearly give

contributes to the regional economy as predicted . However, it has limited effects only to

the localized area – in this case Jena. Other regions of Thuringia, except Eisenach

(Opel) and Arnstadt (Bosch), do not have large companies to support them. There are

also a number of small consulting companies that fills in the role of TTO such as

Stephen Crabbe Consulting and Ellipsis. Commercial Research Centers with their

association (FTVT) are also benefitting the innovation in Thuringia (see Table 9 and

Annex 10). Many researchers moved to commercial institutes to gain more financial


43

rewards and freedom from teaching duties (Interview 20). See Table 8 and 9 for more

details.

Table 8 R&D Excellence in Thuringia

(Author Analysis from (Michael Fritsch et al., 2009; TMWAT, 2013a, 2011, 2012)


44

4.4.4 Civil Societies

In the Quintuple Helix Framework, civil societies such as NGOs can help the limitations

of three core innovation stakeholders described previously. In Thuringia, there are

literally hundreds of NGOs in forms of associations (e.V.) that are affiliated with either

government agencies, universities, research institutions, or certain industrial sectors.

Most of them are working closely with ThEx and LEG particularly in consulting (Interview

5, 24).

There are at least four main civil societies which could be classified based on its

affiliations. In academia, Thuringia’s Higher Education Institutes Founders Networks 37

(HGN, Hochschulgründersnetzwerk) is the biggest association which covers all HEIs in

Thuringia. HGN provides an alliance among all university, university of applied sciences,

and technical university in Thuringia. The idea behind HGN is to provide exchange of

information and stimulate collaborations among HEIs. However, HGN seems to fall short

as lack incentives and competitions for grants between HEIs hinder the collaboration

(Interviews 1 and 7).

From the government part, aside from the Cluster Networks and Association, EU

Contact Points Network of Thuringia (EURNT)38 is an association that work closely with

TMBWK and in particular Department of Research and Infrastructure. It serves as the

primary contact for EU projects through EU research projects dissemination, science

policy lobby, supports of EU project applications, and consultations. All Thuringian HEIs

are members of EURNT too. EURN has a crucial role with regards to Horizon 2020 and

EU Leadership in Enabling and Industrial Technologies by making sure that HEIs and

applicants are fully aware of the restrictions and opportunities offered. However, EURN

has limited collaborations with SMEs which are also targets of Horizon 2020. The

current strategy is to have HEIs as their extension to local SMEs.

The most important civil society in Thuringia is Thuringian Foundation of Technology,

Innovation, and Research (STIFT). STIFT publishes yearly independent innovation

studies of Thuringia. Working as partner to TMWAT, TMBWK, HEIs, and firms, they offer

consultation and mentoring. Other than that, STIFT, together with TMWAT (in particular

ThEx), organizes the Thuringia’s Innovation Award for innovative companies. They also

organize other business plan and elevator pitch competitions.

37

For more HEI Start-ups Network, please visit

http://hsgbi.files.wordpress.com/2011/09/c3bcbersicht_grc3bcndungsnetzwerke_exist.pdf

38

EU Referenten Netzwerk Thüringen. http://www.eu-forschung.de/

http://hsgbi.files.wordpress.com/2011/09/c3bcbersicht_grc3bcndungsnetzwerke_exist.pdf


45

Table 9 Commercial Research Institutes in Thuringia

Research Institutes Bio

tec

hn

olo

gy

Me

tall

urg

y

Mic

ro-

/Na

no

tec

h

Au

tom

oti

ve

En

gin

ee

rin

g

Me

dic

al

Tec

h

Pre

cis

ion

Tec

h

Op

tic

s

Pla

sti

cs/r

ub

bers

CiS Institute of Microsensors and Photovoltaics

x x

X x

fzmb Gmbh

Research Center of Medical Technology and Biotechnology x

x

GFE Society for Production Engineering and Development

x

x x

x x x

INNOVENT

Technology Development x

x x x x x x x

ifw Günter Köhler Institute for Joining Technology and Materials Testing

x x x x

x x x

TITV Textile Research Institute Thuringia/Vogtland

x x

x

TITK Thuringian Institute for Textiles and Plastics Research

x x x

x x x

IAB Institute of Applied Construction Research

x

x

x

x

(Source: TMWAT, 2013a)

4.4.5 Media

The other important stakeholder of innovation is press. Media is believed as platform of

formal communication, promotion, and lobby between all the stakeholders. Aside from

other common and more federal-level magazines, such as The Business Weekley or

newspapers, Thuringia also relies primarily on WIR magazine 39 by TMWAT and

privately-owned Wirstchaftspiegel Thüringen (WST)40. There has been lack of press

coverage in many occasions. While WIR focuses on government success, WST is less

appreciated. At the end local newspapers become the main source of information

although it is not focused on technology per se.

39

Stands for Business, Innovation, and Resources, 40

http://www.wirtschaftsspiegel-thueringen.com/startseite.html?no_cache=1


46

Chapter 5 Innovation in Thuringia under Microscope

This chapter is the continuation of Chapter 4 with the focus on evaluating the innovation

system in Thuringia. To dig deeper, Ilmenau has been chosen to understand the

situation better. This is necessary to explore, probe, bring forth concealed informations,

particularly since most of the data gathered are only published by Ministry of Economics

(TMWAT).

With the overview of Thuringian Regional Innovation System, the question is still laid

open, “where does industrial leadership from innovation reside?” or in other words, with

all the strategies and framework, what or who the key driver for innovation in regional

level is? To answer this question, Illmenau in the southern part of Thuringia is an

interesting location to study. It has a population of 26.000 people from which 7000 of

them are students enrolled in Technical University (TU) Ilmenau. (TU Ilmenau, 2013)

Ilmenau’s economy for centuries depended on natural resources, such as silver and

copper, and tourisms. The opening of railway that connects Ilmenau with Erfurt in 1879

marked the beginning of industrialization. The economy shifted to manufacturing of

ceramics/porcelain and glass. Following the reunifications, Ilmenau lost its porcelain

industry while the glass manufacture started to produce laboratory apparatus and

measurement devices (TU Ilmenau, 2013)

5.1 TU Ilmenau

Limited train connection (up to twice an hour connection only to and from Erfurt) and

isolation by mountainous regions do not stop Ilmenau from being the one of the leading

innovative regions in Europe (Interview, OECD). The success seems very tightly

connected with the existence of TU Ilmenau. The precursor of the university was a

technical college “Thüringisches Technikum” in 1894. High quality graduates developed

it further into Technical University with intensive research in 1992.

The research activities of the TU Ilmenau to the six interdisciplinary and cross-faculty

research cluster Nanoengineering, Precision Technology, Biomedical Engineering,

energy and environmental technology, Digital and Media Technology, Computer


47

Sciences and Mobile Communication. Aside from technology, TU Ilmenau also offers

courses in economic sciences and business engineering41.

In 2004, the University was admitted to the German Research Foundation (DFG). The

Research of the TU Ilmenau is also supported by other non-university research

institutes, such as the Fraunhofer Institute for Digital Media Technology (IDMT),

the Fraunhofer Application Center System Technology (AST), a branch of

the Fraunhofer Institute for Integrated Circuits (IIS), the Thuringian Institute for Textile

and Plastics Research and the Institute for Microelectronic and Mechatronic systems

strengthened.

University success on research and its impact to local economy can be assessed based

on two aspects among many other indicators, research grants and the number of start-

ups. TU Ilmenau received up to €44.73 million in 2012 alone (see Table 10). From this,

about 10% came from industry and another 7% from EU.

Table 10 Research Funding in TU Ilmenau

2010 2011 2012

Federal Government 10,01 14,43 13,68

State of Thuringia 4,59 7,59 7,89

German Research Society 7,25 8,39 8,09

EU 1,38 1,30 3,82

Industry/Private Sector 4,51 4,68 4,96

Charity 0,00 2,78 3,70

Sum (in Mio EUR) 30,25 39,47 44,73

(Source: TU Ilmenau, 2013, p. 19)

Between 1995 and 2008 Ilmenau contributes to 7% of the start-ups activities in

Thuringia. If we compare this with Jena (9%) with more research institutes and financial

supports, Ilmenau shows a much better and successful track record (Michael Fritsch et

al., 2010, p. 49). From these start-ups, Ilmenau has higher entrepreneurial activity,

measured by the number of or percentage of start-ups in the regions compared to the

State (see Table 11). These signify efficiency in technology transfer and research

commercialization.

41

Wirtschaftsingeneurwesen


48

Table 11 Regional Distribution of Entrepreneurial Activity in Thuringia

Sector Ilmenau (%) Jena (%)

Cutting-edge Technology 12,4 12,6

High Technology 7,2 6,4

Service-based Technology 6,8 9,8

Non-technical Commerce 4,9 8,2

General Proportion 5,1 4,4

Source: (Michael Fritsch et al., 2010, p. 42) % represents proportion towards

total prop of State of Thuringia

5.2 Fostering Entrepeneurship in TU Ilmenau: Auftakt

To stimulate transfer of technology, TU Ilmenau relies on Auftakt42, a start-up forum

which is organized by ‘Gründerforum Ilmenau e.V.’ and the technology transfer office of

TUI Ilmenau. Rather than top-down approach by University, Auftakt was formed by a

number of students, staffs, professors, and external partners. Since 2011, this

Entrepreneurship Initiative provides support in business issues, provides contacts and

office space and is especially popular for one thing: a founder-friendly climate in which

start-ups feel good. (Corinna Bastian, 2012; Hofer et al., 2013)

Their three pillars activities, awareness, consultations and supports, and networking,

have largely made impacts to the number of start-ups in Ilmenau. Unlike many initiatives

that rely on mere business consultations and workshops (auftakt.Basis), Auftakt also

organizes experience sharing and dialogs (auftakt.Cafe), quizzes and games about

entrepreneurship knowledge (auftakt.Rallye), and speed-dating with investors (Venture

Capital Campus). By creating networking events, discussions, competitions, and

workshops, Auftakt increases the entrepreneurial spirit among TU Ilmenau students and

researchers.(Hofer et al., 2013; TU Ilmenau, 2013)

42

www.auftakt.org


49

The core activity of Auftakt comes in professional consulting which covers all three

phases - pre-seed, start-up and growth phase - as the contact person for any

founders/entrepreneurs especially for existing funding opportunities. To bring together all

stakeholders of the start-up support, Auftakt created local and international networks,

which are constantly being expanded. This combines particularly founders, founding

interested, investors, sponsors, coaches and mentors. In addition, this way Auftakt

creates opportunities to mutual exchanges between those who just started with the

experienced ones (Corinna Bastian, 2012; Hofer et al., 2013; TU Ilmenau, 2013). The

focus becomes changing the mindsets of those who are hesitant in taking a step forward

to commercialize their research (Interviews 1 and 8).

5.3 Assessing Regional Innovation System in Thuringia

Innovation in Thuringia is a work in progress. The recent RIS3 demonstrates Thuringia’s

commitment to innovation. Thuringia has many assets and potentials that can support

innovation and thus achieving industrial leadership (see Table 12, left column). Three

main assets specific to Thuringia is the location, government support in cluster and

regional innovation system, and high quality infrastructures. Thuringia’s location in the

center of Germany and relatively strategic to the new market in East Germany makes it

an attractive investment location, especially supported with high quality infrastructures.

Arguably, the government support is tremendous in setting an investment and political

climates that are friendly to innovation.

However, government is also the main liabilities by imposing so much bureaucracy

(Interviews 1-5, 8, 11-15, 17). While appreciating the efforts of TMWAT in streamlining

start-ups and entrepreneurship through ThEx, there are still limited collaborations with

many stakeholders, such as TMBWK and ThCM. There are also many overlapping

initiatives between IHK, TMWAT, and TMBWK. This can be seen in different initiatives

between three government bodies with the same goal: increasing start-ups.


50

Furthermore, in the context of public policy, Thuringia suffers from political typecasting

inherent in German political system where different political parties, despite being in

coalition, are hesitant to work together (Interviews 3 and 25).

Table 12 Assets and Liabilities of Innovation in Thuringia

Assets Liabilities

Europe / Germany / Thuringia

High quality of infrastructures and

public transports;

Strategic location that connects

West and East Europe (expansion

potential);

High R&D funding from Federal

level;

Long history and rich culture with

good quality of life;

Two streams of education system:

theoretical and practical

approaches

Negative demographic changes

(productive age 18-40 segment shrinks

-10%, while 65+ grows up 40%);

Less than 2% Thuringian GDP R&D

expenditures;

Dependency on EU funding;

Lack of political discourses among

ruling parties, coalitions, and

oppositions and also between states;

Low level of internationalization,

discourages international skilled

migrants

Cluster Policy

Strong government Cluster supports

under Thüringen Cluster

Management (ThCM);

Existing expansion with Saxony and

Saxony-Anhalt;

World-renowned universities and

research institutes (Max Planck,

Frauenhofer, Leibniz, INNOVENT);

Curricula is mainstreamed to

knowledge/skills needed the cluster

Lack of inter-institutional

collaborations between universities

and research committees

Too concentrated on two locations:

Jena and Ilmenau; lacking

interdisciplinary research with other

universities – even between the two

core cities, they are still reluctant to

collaborate;

Cluster network has weak

cooperation between private sectors

and research activities in universities

or R&D

Regional Innovation System / RIS3

Strong commitment from

government to support innovation,

both federal (EXIST) and State

(RIS3)

Existing communication platform

through various associations

Primary operation is through

imitation;

Low export quota with diagnostics

only about 25%, lowest compared to

other clusters

Focus on start-ups not on alternative

commercialization such as licensing.


51

Another aspect that should be highlighted is the lack of collaborations between

stakeholders and regions. Thuringia has a strong regional identity that discourages

collaborations between regions, including HEIs. This is evident from the low reception of

regional policy “Tricity Project” that tried to strengthen three cities in Thuringia (Erfurt,

Weimar, and Jena as a metropolis region). The city’s inhabitants feel that the project will

only take away the city’s identity43. Despite the project’s benefit on paper44, the project

did not get through and was shelved less than a year later with the resignation of the

Minister (despite the resignation was not due to the project)45.

In HEIs, competition for grants and other type financing may well the main reason for the

lack of collaborations between universities or other research institutes (interviews 3, 21,

25). Other than that, each university has developed their own niche (see Table 8), thus

many feels that they prefer to collaborate with other universities in Germany or abroad

rather than within Thuringia (Interviews 2, 4). This can be fatal as many universities in

Thuringia do not cater a broad range of subjects except University of Jena (Interview

25). Studies have shown that there is a strong correlation between high technology

innovations and the wide range of subjects being taught. The reasoning behind this is

clear, high technology, such as KETs, requires mix-and-match of different technology

sectors and disciplines. Thus, becoming specialized in one sector is only pre-requisite to

be competitive in KETs (Ketels et al., 2006; Ketels, 2003).

Furthermore, if we align this with Horizon 2020 that includes societal challenges and

dimension in EU Research framework, HEIs in Thuringia has much to do complement

their missing links. For example, University of Erfurt only focuses on humanities while

TU Ilmenau has the focus of engineering and natural sciences. Obviously, a close

43

http://www.thueringer-allgemeine.de/web/zgt/politik/detail/-/specific/Machnigs-Idee-einer-

Dreistadt-Erfurt-Weimar-Jena-fuehrt-zum-Eklat-139339552, retrieved on 31 May 2014 44

http://jena.otz.de/web/lokal/politik/detail/-/specific/Raumplaner-lobt-Machnigs-Plaene-fuer-

Dreistadt-Erfurt-Weimar-Jena-1296426586, retrieved on 31 May 2014 45

http://www.spiegel.de/politik/deutschland/ermittlungen-gegen-spd-politiker-machnig-eingestellt-

a-959483.html, retrieved on 31 May 2014

http://www.thueringer-allgemeine.de/web/zgt/politik/detail/-/specific/Machnigs-Idee-einer-Dreistadt-Erfurt-Weimar-Jena-fuehrt-zum-Eklat-139339552

http://www.thueringer-allgemeine.de/web/zgt/politik/detail/-/specific/Machnigs-Idee-einer-Dreistadt-Erfurt-Weimar-Jena-fuehrt-zum-Eklat-139339552

http://jena.otz.de/web/lokal/politik/detail/-/specific/Raumplaner-lobt-Machnigs-Plaene-fuer-Dreistadt-Erfurt-Weimar-Jena-1296426586

http://jena.otz.de/web/lokal/politik/detail/-/specific/Raumplaner-lobt-Machnigs-Plaene-fuer-Dreistadt-Erfurt-Weimar-Jena-1296426586


52

cooperation between the two Universities will create a better synergy, for example, a call

in Health, Demographic Change, and Well-being for Personalized Medicine 46 . TU

Ilmenau and Metralab47 could provide the technology while University of Erfurt could

support in providing governance framework for personalized medicine. Going further

than EU framework, this close cooperation would also offer knowledge exchanges and

increase Thuringia’s competitiveness.

46

http://ec.europa.eu/programmes/horizon2020/en/h2020-section/health-demographic-change-

and-wellbeing, retrieved on 20 June 2014 47

SME in Robotics, a start-ups from TU Ilmenau.

http://ec.europa.eu/programmes/horizon2020/en/h2020-section/health-demographic-change-and-wellbeing

http://ec.europa.eu/programmes/horizon2020/en/h2020-section/health-demographic-change-and-wellbeing


53

Chapter 6 Where Theory Meets Practice

With the situation presented in the previously (Chapter 4 and 5), this chapter seeks to

answer the hypothesis and the research questions. Moreover, it also draws new aspects

that are only explored briefly in the earlier. In order to keep this section as concise as

possible, each sub-chapter will be addressed based on the theoretical questions

presented in Chapter 1 ‘Introduction’ and Chapter 3 ‘Methodology’.

6.1 Can Cluster Approach and Regional Innovation System stimulate innovation

and achieve industrial leadership?

Empirical studies have shown that economic growth and industrial leadership coming

from business formations (spin-offs and start-ups) and regional entrepreneurship culture.

However these vary between different regions (Michael Fritsch & Aamoucke, 2013;

Michael Fritsch, 2014; Sölvell et al., 2003; Varga, 2009). Furthermore, industrial

leadership needs a strong synergy in networks and sectorial support (Ketels et al., 2006;

Mowery & Nelson, 1999, p. 9; Sandström & Carlsson, 2008; Storper & Scott, 2009). This

is positively reflected in the networks of innovation system and cluster approach as

shown by Thuringia’s RIS (RIS3) and Cluster Management (ThCM) (TMWAT, 2014).

Nevertheless, this framework still depends on the collaboration of the stakeholders

(Leydesdorff, 2012). While appreciating TMWAT’s efforts to put various initiatives for

start-ups under one umbrella, the lack of cooperation between stakeholders, including

with TMBWK is a challenge on its own. This can be seen from the several government

initiatives for example in the case of Thuringia’s Centre for Start-ups and

Entrepreneurships (ThEx) and ThCM which are under TMWAT. Both of the agencies

have rather limited collaborations and in many cases discourages private actors and

entrepreneurs to participate in the programs (Interviews 3, 25). Several interviews with

CEOs of high tech companies in Ilmenau argued that while they in principal support the

government policies, they find it difficult to follow the bureaucracy and in many cases

have limited information about what supports are available for them and whom to

contact (Interviews 6, 8, 12, and 13).

Moreover, specifically for Europe, Ketels (2004) pointed out that many European

industry sectors come into clusters without an organized or systemic approach from

neither private sectors nor governments. They grow ‘organically’ or simply by keeping

up with the market (Ketels, 2003). Porter (1990) in his book “The Competitive Advantage


54

of Nations” already presented several best practices of European Clusters that grew

organically such as the forestry products clusters in Sweden and Portugal and become

leaders in their respective market (p.249). However, these individual cases have been

evolving into clusters from long processes and time to reach their critical mass.

Therefore, while acknowledging the importance of RIS and Cluster approach in

stimulating entrepreneurship, it is important to change our paradigm that innovation

policy through entrepreneurship requires region-specific strategies and consideration of

local stakeholders (Carayannis & Campbell, 2012; Dejardin & Fritsch, 2011; Fritsch,

2002; Fritsch et al., 2010; Fritsch & Slavtchev, 2011; Fritsch, 2014; Kauffeld-Monz &

Fritsch, 2013; Ketels et al., 2006).

6.2 Where does leadership in enabling and industrial technologies reside?

The emphasis for Leadership in Enabling and Industrial Technologies (LEIT) lies on

R&D to strengthen industrial capacities and business perspectives, including SMEs. This

also covers Public-private partnerships (PPPs), cross-cutting technologies, ICT, and

their impact to address societal problems (European Commission, 2013b). This means

that greater variety of products and problems solutions to increase Europe competitive

advantage by having more brains and ideas, while at the same time getting out of the

deadly loops of thinking.

Numerous studies propose that industrial leadership resides on the State level

particularly with such broad emphasis, both economically and socially. Thus, the most

important actor that should drive one region to be a global player or leader in their

niches is government through their monetary and non-monetary policies. Monetary

policies can be through grants, subsidies, and bank-guarantee (Brenner et al., 2011.;

Houghton & Sheehan, 2000; Shane, 2005). On the other hand, non-monetary policies

can be the formation of agencies and intermediaries that can help HEIs and private

sectors to commercialize their innovations (B. Asheim et al., 2006; H. Etzkowitz &

Leydesdorff, 1996). In Thuringia, this is evidently can be seen through ThEx, ThCM,

THGN, and EXIST network (Interview 24).

However, in the context of enabling and industrial technologies, industrial leadership

depends on innovation and innovation depends on research. Thus, LEITs resides on the

most innovative and commercially-active stakeholders, which can be HEI or research

institutes, or firms (Interview 1, 3, 14, 15, 25). In the case of Jena, in the early 1900s that

industrial leadership depended on private firms’ innovation such as Schott and Carl-


55

Zeiss. Recently, it shifted towards the strong collaboration between academics and

private firms, including Schott and Carl-Zeiss (Cantner & Graf, 2006). Weak links

between European university and industry are the key of losing technological

competitiveness with the United States (Feser, 2012; Fritsch & Aamoucke, 2014; David

C. Mowery & Nelson, 1999, p. 364).

How about a small region? As mentioned before that innovation requires region-specific

strategies and policies, one can look up to Ilmenau. Ilmenau started differently. While

lacking large firms and being isolated, Ilmenau has become of the most important

innovation hubs in Europe (Hofer et al., 2013). Ilmenau innovation depends on the

research commercialization coming from TU Ilmenau and the existing SMEs (Interview

17).

Technical University, such as TU Ilmenau provides an advantage by having already the

emphasis on application (Mowery & Nelson, 1999, p. 363). TU Ilmenau has the

Biomedical Engineering Faculty, an inter- and intra-disciplinary faculty that creates a

new research field, as such robotics and medical devices (Interviews 1, 8, 14). This is

important in delivering new KETs technology (Interviews 4, 15, 16, and 20). Empirical

study in the United States showed that petrochemicals industry comes from chemical

engineering faculty in 1970-1980s ( Mowery & Nelson, 1999, p. 364). In this case, LEIT

depends on the TU Ilmenau strategy and its technology transfer activities. Therefore, in

terms of policy making, government should identify the most innovative stakeholder to

consult in order to achieve LEIT.

6.3 What is the most important factor to sustain LEIT?

Regional Innovation System and Cluster approach put the emphasis on collaboration.

Based on the interviews, it is very interesting that the focus of all stakeholders is on

social capitals, particularly personal relationships and trust-building. Based on the case

in Ilmenau, many entrepreneurs started their company and stay in Ilmenau because of

their social network and close relationships with university staffs (Interview 14). One

prominent example is Metralab. The founders of Metralab are TU Ilmenau Alumni with a

wide range of subject, computer science, industrial management, and neuroscience.

Their companies are continuation of research projects with one of the founder’s

Professor. Despite their financial success, Metralab still puts its base in Ilmenau further

because the founders have started family there. A number of other interviews also

support the importance of social capitals (Interviews 3, 8, 11, 12, 24, and 25).


56

The importance of social capitals has been overlooked for many years. The notion is

strong as indicated by the importance of mentoring and intermediaries. The founders of

Auftakt, the entrepreneurship forum in Ilmenau, went further and identified trust in social

networks is important in stimulating research commercialization. This is why Auftakt’s

mission is to create an entrepreneur friendly environment by changing the attitudes of

students and researchers towards entrepreneurship. Research showed that Auftakt has

rightly done so by building confidence and understanding the decision-making process

(Hofer et al., 2013).

Why trust and personal relationships are important in innovation process? The first is to

overcome the risk-averse attitude or hesitance to commercialize their research due to

risk and high uncertainty (Nooteboom, 1999; Woolthuis, Hillebrand, & Nooteboom,

2005). Mentoring is one of the solutions to deal with this reluctance by providing enough

information. Going outside one’s comfort zone is not easy. Many academics have to

reconsider their tenure and career to be entrepreneurs or move to industry. In terms of

strategy, all the focus on research commercialization is by becoming an entrepreneur

and starts a company ((Goethner, Obschonka, Silbereisen, & Cantner, 2012;

Obschonka, Goethner, Silbereisen, & Cantner, 2012). Moreover, there are many ways to

commercialize. One of the ways is through licensing in which the innovator. Coaches or

mentor are expected to give a balanced opinion.

Secondly, trust and personal relationship are needed to compensate the lack

knowledge. Innovation process, represented in the regional innovation system, requires

a person to understand various aspect of regulatory framework, market framework, and

network access aside from his/her own expertise on one specific technology sector. To

fully understand the whole process is almost impossible (see Figure 13). Researchers

need someone whom they can trust to help them and at the same time becoming their

personal advisor (Interviews 1, 3, and 8). Nevertheless, in high technology sector,

several interviews also pointed out that the mentors should also understand the

researchers’ field – a sensible idea but difficult to find mentors with similar backgrounds.

(Interviews 3, 6, 7, 12, 13, and 14)

The best case example was the GET UP Start-up Networks between 1999 and 2005 in

Thuringia. The aim was to stimulate start-ups like ThEx. However the most important

aspect from this framework that makes it different from ThEx was the decision process

that enabled each of different regions to participate. GET UP had offices in all regions

with HEI. Unlike ThEx which is centrally coordinated in Erfurt. Each office was

represented by high university officials that acted on behalf of the scientists, students,


57

and entrepreneurs in the regions. This empowered trust building, while at the same time

preserved the local identity and sense-of-belongings (Goethner et al., 2012; Martinelli,

Guerzoni, & Cantner, 2013; Obschonka et al., 2012). An interview with a scientist, who

is also an entrepreneur in Ilmenau, supported framework similar to GET-UP. He argued

that the university officials know better of the region innovation and thus, speeded up the

decision making process (Interview 13)

Figure 17 Innovation Process in the Head

Source: WEF, 2014

World Economic Forum (WEF) just recently (April 2014) took attitude as the key factor to

entrepreneurial culture. They argued that before one country designs innovation policy

to increase regional competitiveness, fostering an attitude that is open to entrepreneurial

career is the beginning of innovation. An entrepreneurial attitude will encourage a

person to learn other skills while at the same time change the cultural framework in

his/her surroundings (see Figure 17 and 18).

Figure 18 Processes of Innovation

Source: WEF, 2014


58

Changing one’s attitude is not an easy task, particularly for academics who are the

drivers of innovation. The key influence in changing one’s attitude is perceived

behavioral control or how much one could control the consequence of their actions.

Decision making in high uncertainty situation needs many considerations. But is it a

reasonable move to do? Research shows that the two influencing factors which are

necessary to encourage entrepreneurial attitude: entrepreneurial experience and one’s

(working) environment (Goethner et al., 2012). In a very entrepreneurial university, such

as Harvard and MIT, the chance of academics (including students) is higher (Ketels,

2003). In Germany, this is rather difficult due to academic environment that discourage

profit-taking activities in HEI (Michael Fritsch & Wyrwich, 2013 and Interviews 1, 3, and

25).

Thus, supports from technology transfer office, linkages with public support agencies,

and closer interaction with industries are believed to be the initial steps to overcome the

initial loss zone in early development of innovation (see Figure 1). Rather than just

focusing on technology transfer activities, personal relationship and trust-building

become key aspects to consider in fostering an entrepreneurial mindset and culture in

academia (Hofer et al., 2013; Obschonka et al., 2012; Tödtling, Prud’homme van Reine,

& Dörhöfer, 2011; WEF, 2014). This will create a sense of belonging of a person to

his/her place of work and the city.

6.4 What are the best indicators for achieving LEIT?

LEIT covers diverse spectra from business, technologies, education, and also societal

issues. The concept of LEIT itself is rather new (2010), therefore not much have been

studied. The current assessment based on EU level put together indicators of innovation

and industrial leadership. However, these indicators been assessed as one package.

Recently, several studies (EIT, 2014; Michael Fritsch, 2014; WEF, 2014) have recently

explored LEIT, though not directly, by widening the concept of innovation, not just for

economic development but also to address societal challenges.

Before we discuss the possible indicators to achieve LEITs, it is important for us to

understand the basic requirements of innovative and entrepreneurial economy. They are

(1) the size and quality of the regional knowledge base as a source of new ideas and

entrepreneurial opportunities (Houghton & Sheehan, 2000; Surinach et al., 2007); (2) the

regional culture of entrepreneurship (Tödtling et al., 2011) (3) qualifications of the

regional workforce (van Oort, Oud, & Raspe, 2009); (4) the availability and the quality of


59

other inputs (Martinelli et al., 2013); and (5) the intensity of local competition between

newcomers and incumbent firms on Porter’s Diamond ( Fritsch et al., 2010). From these

basic requirements, OECD argues that government should use employment and the

number of start-ups as the primary indicators for innovation. World Economic Forum

(2014) also suggested that access to financing, such as through grants and venture

capitals, should have some merit. Yet, access to finance can also be represented

through the number of start-ups (Interviews 1 and 25).

However, LEIT is difficult to be assessed based on employment or the number of start-

ups. In the initial phases of industry life cycle, there are always high numbers of new

business formations or start-ups. Then, as the industry grows and weakens,

employment goes down and business formations are relatively low. Thus, it is difficult to

conclude that both are causal. Furthermore, if we put the different technology based on

its readiness (TLR), this industry life cycle can either longer or shorter (Conrow, 2011).

For example, when one compare software and biotech start-ups. A software start-up,

which develops Apps for smartphones, can grow and decline fast. At the same time,

financing software-based start-ups requires much less investments due to its low fixed

costs. The number of new employment from this type of companies is also less

compared to a biotech start-up with much more financing, risk, and technology

development (Cantner & Rake, 2014). Thus, we can only consider employment and the

number of start-ups as initial ‘symptoms’ of growth but not empirically consider that as a

stable indicator for LEIT (Fritsch, 2002; Fritsch, 2014).

Furthermore, employment on its own is also difficult as new business formations,

through these start-ups, increase competitions, and may well lead to reduction of

employment for production efficiency in other companies. As a market rule, which

inefficient producers get removed from the market, new start-ups could also replace

incumbent companies (Fritsch, 2014) – just like the old cells, being replaced by the new

cells. Nevertheless, start-ups can actually positive as long as the incumbent and the new

companies could manage a strong relationship which leads to a better innovation and

share the ideas to define their own niches (Interviews, 1 and 25).

The discussion we have so far only focusses on short term measures of the number of

start-ups and we have not touched the important key aspect of LEIT, which is the (long-

term) impact to the society. Moreover, as discussed in the previous question, one could

not measure social capitals in the context of personal relationship and trust-building.

Discussions with EC and Thuringia’s government officials acknowledge the gap in

measuring the success of one region in achieving LEIT. The current approach relies only


60

in the efficiency of Horizon 2020 approved projects evaluation. Dr. Peter Härtwich from

DG Research and Innovation argued that Horizon 2020 encourages the participation of

SMEs and their collaboration with HEIs. He believes that collaboration between HEI and

SME is enough as of the most important indicators for LEIT, aside from the number of

start-ups and employment (Interview 10).

I would argue that the number of innovative products coming from one region is the most

important indicator in LEITs. Why can this be the case? If we look at the

pharmaceuticals industry, new medicine is the innovation product of long research. The

impact to the society can be directly measured by the number of patients being cured or

helped by the medicine. Therefore, a region should not just focus on the number of start-

ups or employment or the number of successful grant proposals but also focus on how

many new innovative products or research commercialization come from that region.

The number of sales will also indirectly indicate the success of the product in providing

solution to society’s challenges. Nonetheless, we should still make exceptions in the

case of high technology such as sensors for satellites which have definitely lower

number of sales compared to medical devices.

One of the main criticisms towards using the number of products entering the market is

the fact that different KET products have different life cycle (Thérin, 2014). A

biotechnology product requires minimum five years for product development while

software could take a year or even less to enter the market. Thus, while direct short-term

general impact can be signaled by the number of start-ups and employment, the number

of innovative products could serve as the long term indicator of success.

6.5 Impact and its Possible Implementation in Developing Countries

Developing countries need the technology transfer from developed countries such as

Germany and OECD countries. Innovation products such as draught-resistant seeds or

water-filter with carbon nanotubes that can sieve harmful bacteria are useful (Carsten

Schmitz-Hoffmann, ‘The Role of Private Sectors in Development Agenda’, European

Development Days 2013). The study presented could offer two important lessons in

context of development and innovation, and innovation policy-making in developing

countries.

The first aspect is improving livelihoods of developing countries with the new

technologies. This is mutual ‘symbiosis’ or cooperation. The developed countries can

help the country while at the same time these development programs can also open


61

markets for SMEs and other large firms (Interviews 2 and 4). The danger comes from

dependencies on developed countries. However, under Europe’s Policy Coherence for

Development, any new technologies being introduced to Europe’s partner countries,

requires a technology transfer program. Thus, developing countries can also improve

their innovation culture while at the same time having already a step ahead with

supports from developed countries (European Commission, 2013a).

Secondly, many of developing countries entrepreneurship policy-makings are hampered

by lack of cooperation between different stakeholders. In the case of Indonesia, several

government agencies have overlapping programs and there is hardly collaboration

between universities (Kusmayanto Kadiman, personal communication). This situation is

rather similar to Thuringia. Thus, this study appeals to the importance of social capitals

in innovation policy making particularly in fostering entrepreneurial mindsets as

discussed previously.

6.6 Outlook and Future Research

Innovation covers a broad range of subjects and disciplines. This study provides

important insights towards the importance of social capitals, such as personal

relationships and trust-building in stimulating entrepreneurship in a region. Thus,

innovation policy making cannot be seen through the eyes of economists alone, but also

psychologists and politicians. Fostering a mindset requires interdisciplinary approaches.

Innovation depends on the decision making process under fundamental uncertainty.

Therefore, this brings us to exciting future research questions: how can policy makers

reduce uncertainty from strategic choice and interactions in innovation in the field of

KETs? Can strategic interactions between relevant stakeholders trigger innovative

activities and thus bring about the entrepreneurship in academia? What knowledge

management or decision-making tools can we develop to catalyze the decision-making

process, especially in a bottom-up approach? What kinds of institutional designs and

intervention are necessary to keep such frameworks sustainable, especially in a

decentralized system? Are these designs and tools transferrable to other countries, in

particular developing countries? Unmistakably this study only provides the first step in a

long and winding road ahead where we have to make decision both pragmatically and

academically or “pra-cademic”48.

48

The term was first coined by Fred van Eenennaam from Decision Insitute.,

http://www.centerforcompetitiveness.nl/vision-2/methodology, last retrieved 1 July 2014

http://www.centerforcompetitiveness.nl/vision-2/methodology


62

Conclusion

Research and development activities reflect key source of innovation to achieve

industrial leadership and economic growth in knowledge-based economy. Recent EU

Horizon 2020 Framework Program has signified the importance of innovation in securing

and improving Europe's competitiveness, particularly with knowledge enabling

technologies or KETs. KETs are cross-cutting technologies that support the

development of other technologies or their applications such as medical technology,

advanced materials, and biotechnology. With a total budget of €960 billion in the next six

years, European Union aims to bring innovation and its applications from lab bench to

boardrooms, and to the living rooms. However the whole process for applying for the

grants, despite being heavily reformed, is still rather bureaucratic. This hampers the

impact of innovative research and technology transfer for the society.

The interest in innovation studies received a wider attention from the technology boom

of Silicone Valley in mid-1990s. The general theoretical literature on innovation focuses

on Regional Innovation System while industrial leadership concentrates on Cluster

approach. However, these theoretical framework on this subject, specifically in the

context of KETs and industrial leadership are inconclusive on several vital questions

within the policy making discourse in regional level. The study sought to answer two of

the following questions. First, what explains innovation-based industrial leadership in

regional level? Secondly, where does the industrial leadership reside? This study

proposed that innovation and industrial leadership depend on active policy-making of the

government.

To answer the questions, this study selected the region of Thuringian Ilm-Kreis in

Germany with Technological University (TU) Ilmenau as the spearhead of innovation in

the region. This isolated region has become of one raising stars of innovation despite

limited funding and spill-over effects from large companies compared to other bigger

cities in the region. Numerous site visits and interviews in Ilmenau provide a better

understanding of the region. It gives the chance to connect the theory into practice and

put the gathered information in perspective. The main empirical findings are chapter

specific and were summarized within the respective empirical chapters: chapter 4 with

the regional innovation system in Thuringia with case of TU Ilmenau and chapter 5 with

the discussion and analysis in efforts to answer the research questions. This section will

synthesize the empirical findings to answer the study’s two research questions.


63

What explains innovation-based industrial leadership in regional level? Industrial

leadership depends on policy synergy for technology transfer and collaboration of all

innovation stakeholders, which are government, academia, business, civil societies, and

also the media. In the context of KETs, several factors become increasingly important in

technology transfer: networking and supports to find a niche and to enter the market.

Mentoring is another aspect that has been identified as significantly help start-up

formations and cultivate entrepreneurial attitude among academics. However for KETs,

it is crucial to find mentors who are technology-specific respectively.

Interestingly, for a rather isolated region such as Ilmenau, there are two most important

aspects that keep many companies stay in Ilmenau. Firstly, it is personal relationship

between entrepreneurs and the TU Ilmenau and secondly, it is the trust built from the

relationships themselves. These conclusions were based on the testimonials of many

entrepreneurs and CEOs of technology companies. In many cases, project

collaborations were made because of how well one knows each other rather than mere

personal qualifications. The difficulty in grasping other academic fields or technologies

imposes a high level degree of trust to establish partnership. Therefore, innovation

policy requires strategic approach on personal level by addressing the social capitals,

such as personal relationships and trust-building, in a region or cluster.

For the second question, where does the industrial leadership reside? Many of the

interviewed stakeholders argued that industrial leadership, in theory, resided on the

State level. This can be explained as one region cannot sustain itself, particularly in the

framework of Technology Cluster Approach. In practice, it offered a different

explanation. Innovation depends on research. Research depends on higher education

institutions (HEIs), research institutes, and R&D intensive firms. Thus, to achieve

industrial leadership resides on the most innovative and commercially active

stakeholders. This pattern can only be an indication of generalization, if the regional

innovation system clearly emphasizes collaboration and role-sharing in technology

transfer and research commercialization. Nevertheless, in the context of region with

limited cooperation among the stakeholders, industrial leadership depends on the

intensity of collaboration between HEIs/research institutes and firms as evidenced by the

innovation success of Ilmenau and TU Ilmenau.

The theoretical frameworks for innovation therefore need to be revisited in order to

further understand the dynamics and links between innovation and industrial leadership.

Inherently, Regional Innovation System (RIS) suggests a sustainable innovation

economy through interlinked innovation activities (Cooke, 1997). This approach


64

complements the Porter's Diamond model that helps to identify the competitive

advantage of a regional innovation system (Porter, 1990, Delgado et al., 2009).

However, as proposed by Triple Helix Innovation (Etzkowitz & Leydesdorff, 1996) and its

further development, Quintuple Helix (Carayannis & Campbell, 2009), it is also

constructive to focus on the overlapping roles of the stakeholders, rather than the

processes. Focusing on RIS and Cluster Approach is consistent with what presented by

OECD (2014) and European Commission (2014). However, it contradicts that of Mowery

& Nelson (1999) which also puts significance in technology-specific policy for industrial

leadership for different innovation stakeholders. Nooteboom (2010), Cantner (2012), and

Fritsch (2013) argued that innovation system should also take into account the

psychological determinants of the trust-building among the stakeholders.

One particular policy program with extended theoretical underpinnings was the Auftakt

Program from TU Ilmenau. Auftakt has been hailed as an icon of success in stimulating

entrepreneurship and technology transfer by OECD (OECD, 2013). By creating an

entrepreneur-friendly climate which start-ups feel good and confident, its programs

reach out to the university students, researchers, and potential funding and private

partners through personal relationships and consultations. The relatively small university

with high research intensity makes the personal contacts possible. However, the lack of

funding and reluctance to take risks by starting a company become challenges to

overcome.

This study has used empirical findings to show that the current Regional Innovation

System and Cluster Approach are not making the full impact. These theoretical

frameworks assume that every stakeholder in innovation process is willing to collaborate

with each other. In practice, this is difficult to attain. Based on this study, conflict of

interests and overlapping responsibilities are prevalent in Thuringia. Furthermore,

Regional Innovation System approach supposes that each technology sector behaves

similarly. Again, this is also misleading perspective. High technology sectors such as

KETs have their own complexions and characteristics. While having the same natural

sciences principles, biotechnology and engineering have different approaches to

analyze and offer solutions to societal problems. The theoretical arguments for this

justification suggest the need for policy review which will enable linkage mechanisms,

either through interdisciplinary mentoring or associations by tech ambassadors and

Alumni network. These linkage mechanisms are also beneficial to address the

importance of social capitals, such as personal relationships and trust-building, in

innovation and collaboration.


65

The scale of innovation debate is therefore extensive and multifaceted even at the

regional and local level. Thus, to generate achievable policy strategies and development

targets with regards to industrial leadership, there is need for more investigations at the

local level to allow further assessment of local dimensions of the subject. Exploring the

following as future research strategies can facilitate the attainment of this goal. However,

it is clear that there is no rule-of thumb that could copy the success of Silicone Valley.

Future outlook of innovation model brought forward by this study is in the behavior of

human decision making under fundamental uncertainty of technology development. This

is particularly important in the different nature of academics and entrepreneurs.

Academics are rational decision makers. They tend to avoid risk-taking behavior which

is completely the opposite of the entrepreneurs. Therefore, this bring us to the future

research questions: how can policy makers reduce uncertainty from strategic choice and

interactions in innovation in the field of KETs? Can strategic interactions between

relevant stakeholders trigger innovative activities and thus bring about the

entrepreneurship in academia? What knowledge management or decision-making tools

can we develop to catalyze the decision-making process, especially in a bottom-up

approach? What kinds of institutional designs and intervention are necessary to keep

such frameworks sustainable, especially in a decentralized system? Are these designs

and tools transferrable to other countries, in particular developing countries?

The study has put another brick onto the wall of innovation knowledge, particularly in

regional innovation system and its policy strategy. Although, there are no policy

measures that can guarantee the emergence of technology cluster and industrial

leadership, this study opens up another door to interdisciplinary approaches in policy-

making by combining economics, politics, and psychology among other related

disciplines.


66

Chapter 7 Policy Recommendations

These sets of policy recommendations were derived from this study. They were selected

based on the (primary) stakeholders involved in the innovation process in Thuringia. The

main consideration of these policy recommendations are visibility based on the current

situation and comparative case studies. Several recent published policy

recommendations are also included below as further reference:

1. WEF. Enhancing Europe’s Competitiveness Fostering Innovation-Driven

Entrepreneurship in Europe. Insight Report. Competitiveness. Geneva: World

Economic Forum, 2014. http://www.weforum.org/reports/enhancing-europe-s-

competitiveness-fostering-innovation-driven-entrepreneurship-europe.

2. TMWAT. Regionale Forschungs- Und Innovationsstrategie Für Intelligente

Spezialisierung Für Thüringen. Erfurt: Thüringer Ministerium für Wirtschaft,

Arbeit und Technologie, May 15, 2014.

3. Hofer, Andrea-Rosalinde, Jonathan Potter, Dana Redford, and Jakob Stolt.

Promoting Successful Graduate Entrepreneurship at the Technical University

Ilmenau, Germany. OECD Local Economic and Employment Development

(LEED) Working Papers. Paris: Organisation for Economic Co-operation and

Development, April 3, 2013. http://www.oecd-

ilibrary.org/content/workingpaper/5k4877203bjh-en.

4. Thüringer Netzwerk für Innovative Gründungen (ThürInG). Innovative

Gründungen in Thüringen: Entwicklung und Ausblick 2013. Thüringer

Netzwerk für innovative Gründungen. Stiftung für Technologie, Innovation

und Forschung Thüringen (STIFT), December 20, 2013. http://www.stift-

thueringen.de/fileadmin/user_upload/stift/studie_2013_23122013.pdf.

http://www.weforum.org/reports/enhancing-europe-s-competitiveness-fostering-innovation-driven-entrepreneurship-europe

http://www.weforum.org/reports/enhancing-europe-s-competitiveness-fostering-innovation-driven-entrepreneurship-europe

http://www.oecd-ilibrary.org/content/workingpaper/5k4877203bjh-en

http://www.oecd-ilibrary.org/content/workingpaper/5k4877203bjh-en

http://www.stift-thueringen.de/fileadmin/user_upload/stift/studie_2013_23122013.pdf

http://www.stift-thueringen.de/fileadmin/user_upload/stift/studie_2013_23122013.pdf


67

I. Thuringian Ministry of Economics, Labor, and Technology

TMWAT and TMBWK should have a closer cooperation, particularly in innovation

strategy as described in RIS3 white paper.

Since many innovations come from universities and commercial research

institutes, therefore it is important to incorporate University partners (or through

TGN), FTFV, and Patent Office in ThEx. The collaboration will provide a better

communication platform between the stakeholders.

In order to gain synergy in industrial leadership, ThEx and ThCM should

cooperate and seize the opportunity of closer collaboration between SMEs and

HEIs in R&D and technology transfer.

Include licensing and other alternative commercialization under ThEx

Initiate collaboration with GIZ as opportunity to open markets for Thuringian

SMEs in GIZ-partner countries.

II. Thuringian Ministry of Education, Science, and Culture

TMWAT and TMBWK should have a closer cooperation, particularly in innovation

strategy as described in RIS3 white paper.

Incorporate entrepreneurship in the curriculum already from secondary schools

Coordinate Thüringer Grundernetzwerk (TGN) and EXIST-III using previously

Get-Up Framework to provide as a better decision making and collaboration

platform between HEIs in Thuringia.

Encourage more cooperation between Thuringian HEI, commercial and non-

commercial research institutes.


68

III. Technology University Ilmenau

(particularly for the Technology Transfer Office and Auftakt)

With the success and recognition of Auftakt by OECD, when the financial

situation is possible, more staffs for TTO and financial support to Auftakt would

be necessary to boost the performance of TTO and Auftakt;

Endorsing the Alumni Network that is currently being discussed, as

communication platform between the current students and alumni. Furthermore,

this Alumni Network can contribute to the financing of start-ups;

To increase collaboration with student initiatives, such as Market Team and

Entrepreneurship Society, which have similar vision and mission.

IV. Small and Medium Enterprises (and Start-ups) in Knowledge Enabling

Technologies

Connect with GIZ and TTO to discuss the possibility of doing projects together,

particularly as GIZ could open a market for many SMEs in developing countries.

TTOs can help to minimize the administrative burdens;

Reducing costs of R&Ds by collaborating with universities or other research

institutes for product development, particularly with Horizon 2020 supports for

SMEs.

V. European Commission DG Research and Enterprise

While positively welcoming the efforts to reform application process, it is still

bureaucratic and discourages many SMEs with limited human resources to

participate in Horizon 2020. Expanding the role of Contact Points to help these

SME or having less paper work for SMEs is highly appreciated;

Leadership in Enabling and Industrial Technologies requires long term supports,

thus SMEs which have been showing some positive progress should be made

easier to apply while new SMEs should get priority and supports for application

process.


69

REFERENCES

1. Ali, A. (1994). Pioneering versus incremental innovation: Review and research

propositions. Journal of Product Innovation Management, 11(1), 46–61.

doi:10.1016/0737-6782(94)90118-X

2. Allan, R. J. (2014, February). Technology - is it innovation? Retrieved April 10,

2014, from

http://search.informit.com.au/documentSummary;dn=133552321613385;res=IEL

ENG

3. Andries, P., & De Winne, S. (2013). Knowledge management practices for

stimulating incremental and radical product innovation. Retrieved April 10, 2014,

from https://lirias.kuleuven.be/handle/123456789/402171

4. Asheim, B., Cooke, P., Cooke, P. of R. D. P., & Martin, R. (2006). Clusters and

Regional Development: Critical Reflections and Explorations. Routledge.

5. Asheim, B. T., Smith, H. L., & Oughton, C. (2011). Regional Innovation Systems:

Theory, Empirics and Policy. Regional Studies, 45(7), 875–891.

doi:10.1080/00343404.2011.596701

6. Berry, R. S. Y. (1999, September 28). Collecting data by in-depth interviewing.

Retrieved May 13, 2014, from

http://www.leeds.ac.uk/educol/documents/000001172.htm

7. Bonilla, D., Bishop, J. D., Axon, C. J., & Banister, D. (2014). Innovation, the

diesel engine and vehicle markets: Evidence from OECD engine patents.

Transportation Research Part D: Transport and Environment, 27, 51–58.

8. Brenner, T., Cantner, U., Fornahl, D., Fromhold-Eisebith, M., & Werker, C.

(2011). Regional innovation systems, clusters, and knowledge networking.

Papers in Regional Science, 90(2), 243–249. doi:10.1111/j.1435-

5957.2011.00368.x

9. Breschi, S., Lenzi, C., Malerba, F., & Mancusi, M. L. (2014). Knowledge-intensive

entrepreneurship: sectoral patterns in a sample of European high-tech firms.

Technology Analysis & Strategic Management, 0(0), 1–14.

doi:10.1080/09537325.2014.886683

10. Bug, T. (2010). German investments in industrial biotechnology. Industrial

Biotechnology, 6, 241–243.

11. Burgelman, R. A., & Maidique, M. A. (2004). Strategic management of

technology and innovation (4th ed.). Homewood, Ill.: Irwin.


70

12. Cantner, U., & Graf, H. (2006). The network of innovators in Jena: An application

of social network analysis. Research Policy, 35(4), 463–480.

doi:10.1016/j.respol.2006.01.002

13. Cantner, U., & Rake, B. (2014). International research networks in

pharmaceuticals: Structure and dynamics. Research Policy, 43(2), 333–348.

doi:10.1016/j.respol.2013.10.016

14. Carayannis, E. G., Barth, T. D., & Campbell, D. F. (2012a). The Quintuple Helix

innovation model: global warming as a challenge and driver for innovation.

Journal of Innovation and Entrepreneurship, 1(1), 2. doi:10.1186/2192-5372-1-2

15. Carayannis, E. G., Barth, T. D., & Campbell, D. F. (2012b). The Quintuple Helix

innovation model: global warming as a challenge and driver for innovation.

Journal of Innovation and Entrepreneurship, 1(1), 2. doi:10.1186/2192-5372-1-2

16. Carayannis, E. G., & Campbell, D. F. (2009). “Mode 3”and’Quadruple Helix’:

toward a 21st century fractal innovation ecosystem. International Journal of

Technology Management, 46(3), 201–234.

17. Carayannis, E. G., & Campbell, D. F. (2012). Editorial preface to the first volume

of Journal of Innovation and Entrepreneurship. Journal of Innovation and

Entrepreneurship, 1(1), 1–3.

18. Carayannis, E. G., & Campbell, D. F. J. (2012). Mode 3 Knowledge Production in

Quadruple Helix Innovation Systems. Mode 3 Knowledge Production in

Quadruple Helix Innovation Systems, 1–63.

19. Casas, R., De Gortari, R., & Santos, M. J. (2000). The building of knowledge

spaces in Mexico: a regional approach to networking. Research Policy, 29, 225–

241.

20. Choi, H., & Anadón, L. D. (2013). The role of the complementary sector and its

relationship with network formation and government policies in emerging sectors:

The case of solar photovoltaics between 2001 and 2009. Technological

Forecasting and Social Change.

21. Commercialising Public Research: New Trends and Strategies. (n.d.). Retrieved

December 14, 2013, from http://www.oecd.org/sti/sci-tech/commercialising-

public-

research.htm?goback=%2Egde_76119_member_5816563407385563140#%21

22. Conrow, E. H. (2011). Estimating Technology Readiness Level Coefficients.

Journal of Spacecraft and Rockets, 48(1), 146–152. doi:10.2514/1.46753

23. Cooke, P. (2004). Systemic innovation: Triple helix, scalar envelopes, or regional

knowledge capabilities, an Overview. Presented at the International Conference

on Regionalization of Innovation Policy.


71

24. Cooke, P. (2008). How benchmarking can lever cluster competitiveness.

International Journal of Technology Management, 38, 292–320.

25. Cooke, P., Asheim, B. T., Boschma, R., Martin, R., Schwartz, D., & Tödtling, F.

(2011). Handbook of Regional Innovation and Growth. Edward Elgar Publishing.

26. Cooke, P., Gomez Uranga, M., & Etxebarria, G. (1997). Regional innovation

systems: Institutional and organisational dimensions. Research Policy, 26(4),

475–491.

27. Corinna Bastian. (2012, May 14). Gelebter Forschungstransfer „auftakt. Das

Gründerforum Ilmenau“ unterstützt Gründer der TU Ilmenau. Venture Capital

Magazine.

28. Crescenzi, R., & Rodríguez-Pose, A. (2011). Innovation and Regional Growth in

the European Union. Springer.

29. Dejardin, M., & Fritsch, M. (2011). Entrepreneurial dynamics and regional

growth. Small Business Economics, 36(4), 377–382.

30. Delgado, M., Porter, M. E., & Stern, S. (2010). Clusters and entrepreneurship.

Journal of Economic Geography, 10(4), 495–518. doi:10.1093/jeg/lbq010

31. Den Hertog, P., & Remoe, S. (2001). Innovative clusters: drivers of national

innovation systems. OECD Publishing.

32. Dewar, R. D., & Dutton, J. E. (1986). The Adoption of Radical and Incremental

Innovations: An Empirical Analysis. Management Science, 32(11), 1422–1433.

doi:10.1287/mnsc.32.11.1422

33. Doloreux, D., & Parto, S. (2005a). Regional innovation systems: Current

discourse and unresolved issues. Technology in Society, 27(2), 133–153.

doi:10.1016/j.techsoc.2005.01.002

34. Doloreux, D., & Parto, S. (2005b). Regional innovation systems: Current

discourse and unresolved issues. Technology in Society, 27(2), 133–153.

doi:10.1016/j.techsoc.2005.01.002

35. Edison, T. A. (1880, January 27). Electric lamp.

36. Ettlie, J. E., Bridges, W. P., & O’Keefe, R. D. (1984). Organization Strategy and

Structural Differences for Radical Versus Incremental Innovation. Management

Science, 30(6), 682–695. doi:10.1287/mnsc.30.6.682

37. Etzkowitz, H. (2004). The evolution of the entrepreneurial university. International

Journal of Technology and Globalisation, 1, 64–77.

38. Etzkowitz, H. (2010a). The Triple Helix: University-Industry-Government

Innovation in Action. Routledge.

39. Etzkowitz, H. (2010b). The Triple Helix: University-Industry-Government

Innovation in Action. Routledge.


72

40. Etzkowitz, H., & Dzisah, J. (2008). Rethinking development: circulation in the

triple helix. Technology Analysis & Strategic Management, 20, 653–666.

doi:10.1080/09537320802426309

41. Etzkowitz, H., & Klofsten, M. (2005). The innovating region: toward a theory of

knowledge-based regional development. R & D Management, 35, 243–255.

doi:10.1111/j.1467-9310.2005.00387.x

42. Etzkowitz, H., & Leydesdorff, L. (1996). A triple helix of academic-industry-

government relations: Development models beyond “capitalism versus

socialism.” Current Science, 70, 690–693.

43. European Commission. (2013a). EU 2013 Report on Policy Coherence for

Development (No. SWD(2013) 456 final).

44. European Commission. (2013b). Leadership in Enabling and Industrial

Technologies (European Commission Decision C). Brussels: European Union.

45. European Institute of Innovation and Technology (EIT). (2014). Horizon 2020.

Retrieved January 14, 2014, from

http://ec.europa.eu/programmes/horizon2020/en/h2020-section/european-

institute-innovation-and-technology-eit

46. Feser, E. (2012). Entrepreneurship education in the research-intensive

entrepreneurial university.

47. Fleming, A. (1944). The Discovery of Penicillin. British Medical Bulletin, 2(1), 4–

5.

48. Freeman, C. (1987). Technology policy and economic performance: lessons from

Japan. Retrieved from http://www.getcited.org/pub/102620862

49. Freeman, C. (1995). The “National System of Innovation”in historical perspective.

Cambridge Journal of Economics, 19(1), 5–24.

50. Fritsch, M. (2002). How and why does the efficiency of regional innovation

systems differ? Freiberg working papers.

51. Fritsch, M. (2014). New Firm Formation and Sustainable Regional Economic

Development–Relevance, Empirical Evidence, Policies. Retrieved from

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2402229

52. Fritsch, M., & Aamoucke, R. (2013). Regional public research, higher education,

and innovative start-ups: an empirical investigation. Small Business Economics,

41(4), 865–885.

53. Fritsch, M., & Aamoucke, R. (2014). Fields of Knowledge, Types of Higher

Education Institutions, and Innovative Start-Ups–An Empirical Investigation. Jena

Economic Research Papers, 2014, 013.


73

54. Fritsch, M., Erbe, A., Noseleit, F., & Schröter, A. (2009).

Innovationspotenziale in Thüringen: Stand und Perspektiven. Stiftung für

Technologie, Innovation und Forschung Thüringen (STIFT). Retrieved from

http://www.stift-

thueringen.de/fileadmin/user_upload/stift/2009_Innovationspotenziale_Kurzfassu

ng.pdf

55. Fritsch, M., Noseleit, F., Slavtchev, V., & Wyrwich, M. (2010). Innovative

Gründungen und ihre Bedeutung für den Standort Thüringen. Retrieved from

http://www.stift.com/stift/cms/cms_de.nsf/($UNID)/BA3D98821F0BB5C2C12577

E0003F48EA/$File/Innovative%20Gr%C3%BCndungen%20und%20ihre%20Bed

eutung%20f%C3%BCr%20den%20Standort%20Th%C3%BCringen_08_2010.pd

f

56. Fritsch, M., & Slavtchev, V. (2011). Determinants of the efficiency of regional

innovation systems. Regional Studies, 45(7), 905–918.

57. Fritsch, M., & Wyrwich, M. (2013). The Long Persistence of Regional Levels of

Entrepreneurship: Germany, 1925–2005. Regional Studies, (ahead-of-print), 1–

19.

58. Germany Trade & Invest. (2014). Economic Overview Germany: Market,

Productivity, Innovation (No. 14783). Federal Ministry of Economic Affars and

Energy; Federal Government Commissioner for the New Federal States.

Retrieved from www.gtai.com

59. Goethner, M., Obschonka, M., Silbereisen, R. K., & Cantner, U. (2012).

Scientists’ transition to academic entrepreneurship: Economic and psychological

determinants. Journal of Economic Psychology, 33(3), 628–641.

60. Greatbatch, W. (1962, October 9). Medical cardiac pacemaker.

61. Gubrium, J. F., & Holstein, J. A. (2002). Handbook of interview research: Context

and method. Sage.

62. Haase, A., Landwehr, G., & Umbach, E. (1997). Röntgen Centennial: X-rays in

Natural and Life Sciences. World Scientific.

63. Handoyo, H. S. (2013). Brief Analysis of Life Sciences Cluster in Thuringia:

Unlocking the Potentials (Case Study). Willy Brandt School of Public Policy,

Erfurt.

64. Hargadon, A. B., & Douglas, Y. (2001). When Innovations Meet Institutions:

Edison and the Design of the Electric Light. Administrative Science Quarterly,

46(3), 476–501. doi:10.2307/3094872


74

65. Heimpold, G. (2011). Clusterpolitiken in Bayern und Thüringen: Förderpraxis

nimmt wenig Rücksicht auf theoretische Vorbehalte. Wirtschaft Im Wandel, 17,

356–363.

66. Hine, D., & Carson, D. (2007). Innovative Methodologies in Enterprise Research.

Edward Elgar Publishing.

67. Hofer, A.-R., Potter, J., Redford, D., & Stolt, J. (2013). Promoting Successful

Graduate Entrepreneurship at the Technical University Ilmenau, Germany

(OECD Local Economic and Employment Development (LEED) Working

Papers). Paris: Organisation for Economic Co-operation and Development.

Retrieved from http://www.oecd-ilibrary.org/content/workingpaper/5k4877203bjh-

en

68. Houghton, J., & Sheehan, P. (2000, February). A Primer on the Knowledge

Economy. Monograph. Retrieved January 4, 2014, from http://vuir.vu.edu.au/59/

69. Iammarino, S., & McCann, P. (2006). The structure and evolution of industrial

clusters: Transactions, technology and knowledge spillovers. Research Policy,

35, 1018–1036.

70. III, H. A. B. (2014, January 21). System and method to improve chip yield,

reliability and performance.

71. Jain, R. K., Triandis, H. C., & Weick, C. W. (2010). Managing research,

development and innovation : managing the unmanageable (3rd ed.). Hoboken,

N.J: Wiley. Retrieved from

http://site.ebrary.com/lib/academiccompletetitles/home.action

http://site.ebrary.com/lib/alltitles/docDetail.action?docID=10395532

http://www.gbv.eblib.com/patron/FullRecord.aspx?p=547068

72. Kardos, N., & Demain, A. L. (2011). Penicillin: the medicine with the greatest

impact on therapeutic outcomes. Applied Microbiology and Biotechnology, 92(4),

677–687. doi:10.1007/s00253-011-3587-6

73. Kauffeld-Monz, M., & Fritsch, M. (2013). Who are the knowledge brokers in

regional systems of innovation? A multi-actor network analysis. Regional

Studies, 47(5), 669–685.

74. Ketels, C. (2003). The Development of the cluster concept–present experiences

and further developments (Vol. 5). Presented at the NRW Conference on

Clusters, Duisberg, Germany.

75. Ketels, C., Lindqvist, G., & Sölvell, Ö. (2006). Cluster initiatives in developing and

transition economies. Center for Strategy and Competitiveness, Stockholm.


75

76. Klingebiel, R., & Rammer, C. (2014). Resource allocation strategy for innovation

portfolio management. Strategic Management Journal, 35(2), 246–268.

doi:10.1002/smj.2107

77. Korres, G. M., Tsobanoglou, G. O., & Kokkinou, A. (2011). Innovation Geography

and Regional Growth in European Union. SAGE Open, 1(1).

doi:10.1177/2158244011413142

78. Krauss, G., & Stahlecker, T. (2001). New biotechnology firms in Germany:

Heidelberg and the bioregion rhine-neckar triangle. Small Business Economics,

17, 143–153.

79. Kuhn, T. S. (1962). The structure of scientific revolutions. Chicago, Ill. [u.a.]:

Univ. of Chicago Press.

80. L, S. P. (1953, September 15). Microwave apparatus.

81. Lautenschläger, A., & Haase, H. (2005). Gründungsförderung an Thüringer

Hochschulen: Zur Erfolgsanalyse des GET UP - Gründernetzwerkes. Jenaer

Schriftenreihe zur Unternehmensgründung, Nr. 8 / 2005, 8. Retrieved from

http://www.db-thueringen.de/servlets/DocumentServlet?id=5028

82. Leydesdorff, L. (2012). The Triple Helix, Quadruple Helix, …, and an N-Tuple of

Helices: Explanatory Models for Analyzing the Knowledge-Based Economy?

Journal of the Knowledge Economy, 3(1), 25–35. doi:10.1007/s13132-011-0049-

4

83. Löfsten, H. (2014). Product innovation processes and the trade-off between

product innovation performance and business performance. European Journal of

Innovation Management, 17(1), 61–84. doi:10.1108/EJIM-04-2013-0034

84. Lundvall, B. (2007). National Innovation Systems—Analytical Concept and

Development Tool. Industry & Innovation, 14(1), 95–119.

doi:10.1080/13662710601130863

85. Lundvall, B.-A. (1992). National innovation system: towards a theory of

innovation and interactive learning. Pinter, London.

86. Mackey, R. M. (2011). Assessing and Maturing Technology Readiness Levels. In

S. B. Johnson, T. J. Gormley, S. S. Kessler, C. D. Mott, A. Patterson-Hine, K. M.

Reichard, & P. A. S. Jr (Eds.), System Health Management (pp. 145–157). John

Wiley & Sons, Ltd. Retrieved from

http://onlinelibrary.wiley.com/doi/10.1002/9781119994053.ch9/summary

87. Martinelli, A., Guerzoni, M., & Cantner, U. (2013). Innovation and market

dynamics: A two-mode network approach to user-producer interaction. Retrieved

from http://druid8.sit.aau.dk/acc_papers/a22ykmgnyams7hnytyna5f7aabdq.pdf


76

88. Mason, C., & Brown, R. (2010). High growth firms in Scotland, final report for

Scottish enterprise. Glasgow.

89. Mazur, R. H. (1976). Aspartame‐a sweet surprise. Journal of Toxicology and

Environmental Health, 2(1), 243–249. doi:10.1080/15287397609529429

90. Merton, R. K. (1957). Priorities in Scientific Discovery: A Chapter in the Sociology

of Science. American Sociological Review, 22(6), 635. doi:10.2307/2089193

91. Mowery, D. C., & Nelson, R. R. (Eds.). (1999). Sources of industrial leadership:

studies of seven industries. Cambridge u.a.: Cambridge Univ. Press.

92. Mowery, D. C., Nelson, R. R., Sampat, B. N., & Ziedonis, A. A. (2001). The

growth of patenting and licensing by US universities: an assessment of the

effects of the Bayh-Dole act of 1980. Research Policy, 30, 99–119.

93. Nacu, C. M., & Avasilcăi, S. (2013). Technological Entrepreneurship: Success

Factors as Perceived by Potential Young Entrepreneurs. Advanced Materials

Research, 837, 639–644. doi:10.4028/www.scientific.net/AMR.837.639

94. Nelson, R. R. (1993). National Innovation Systems: A Comparative Analysis

(SSRN Scholarly Paper No. ID 1496195). Rochester, NY: Social Science

Research Network. Retrieved from http://papers.ssrn.com/abstract=1496195

95. Nooteboom, B. (1999). Innovation and inter-firm linkages: new implications for

policy. Research Policy, 28(8), 793–805.

96. Obschonka, M., Goethner, M., Silbereisen, R. K., & Cantner, U. (2012). Social

identity and the transition to entrepreneurship: The role of group identification

with workplace peers. Journal of Vocational Behavior, 80(1), 137–147.

97. OECD, O. (2010). OECD Science, Technology and Industry Outlook 2010.

OECD Pub.

98. Ooms, F. (2000). Molecular Modeling and Computer Aided Drug Design.

Examples of their Applications in Medicinal Chemistry. Current Medicinal

Chemistry, 7(2), 141–158. doi:10.2174/0929867003375317

99. Opaschowski, H. W. (2004). Deutschland 2020: wie wir morgen leben:

Prognosen der Wissenschaft. VS Verlag für Sozialwissenschaften.

100. Osepchuk, J. M. (2009). The history of the microwave oven: A critical review. In

Microwave Symposium Digest, 2009. MTT ’09. IEEE MTT-S International (pp.

1397–1400). doi:10.1109/MWSYM.2009.5165967

101. Palli, G., Pirozzi, S., Natale, C., De Maria, G., & Melchiorri, C. (2013).

Mechatronic design of innovative robot hands: Integration and control issues. In

2013 IEEE/ASME International Conference on Advanced Intelligent

Mechatronics (AIM) (pp. 1755–1760). doi:10.1109/AIM.2013.6584351

102. Porter, M. (1990). The Competitive Advantage of Nations.


77

103. Porter, M. (2003). The economic performance of regions. Regional Studies, 37,

545–546.

104. Porter, M. (2008). Clusters, Innovation, and Competitiveness: New Findings and

Implications for Policy (Vol. 23). Presented at the Presentation given at the

European Presidency Conference on Innovation and Clusters in Stockholm.

105. Porter, M. E. (1998). Clusters and the new economics of competition (Vol. 76).

Harvard Business Review Watertown.

106. Porter, M., & Miller, K. (2003). The state of Connecticut: strategy for economic

development.

107. Röntgen, W. C. (1898). Ueber eine neue Art von Strahlen. Annalen Der Physik,

300(1), 1–11. doi:10.1002/andp.18983000102

108. Sandström, A., & Carlsson, L. (2008). The performance of policy networks: the

relation between network structure and network performance. Policy Studies

Journal, 36, 497–524.

109. Schumpeter, J., & Backhaus, U. (2003). The theory of economic development.

Joseph Alois Schumpeter, 61–116.

110. Seán McCarthy. (2014, February 11). How to Write a Competitive Proposal for

Horizon 2020. Erfurt. Retrieved from

http://www.globalsciencecollaboration.org/public/site/PDFS/proposal%20H2020/

McCarthy%20S.,%20How%20to%20Write%20a%20Competitive%20Proposal%2

0for%20Horizon%202020.pdf

111. Sears, J., & Hoetker, G. (2014). Technological overlap, technological capabilities,

and resource recombination in technological acquisitions. Strategic Management

Journal, 35(1), 48–67. doi:10.1002/smj.2083

112. Shane, S. A. (2005). Economic development through entrepreneurship :

government, university and business linkages. Cheltenham [u.a.]: Elgar.

Retrieved from http://www.loc.gov/catdir/toc/fy0613/2005046194.html

http://www.gbv.de/dms/bsz/toc/bsz121393445inh.pdf

113. Sölvell, Ö., Lindqvist, G., & Ketels, C. (2003). The cluster initiative greenbook.

Ivory Tower Stockholm.

114. Stegink, F. (1984). Aspartame: Physiology and Biochemistry. CRC Press.

115. Storper, M., & Scott, A. J. (2009). Rethinking human capital, creativity and urban

growth. Journal of Economic Geography, 9, 147–167.

116. Surinach, J., Moreno, R., & Vaya, E. (2007). Knowledge externalities, innovation

clusters and regional development. Edward Elgar Publishing. Retrieved from

http://books.google.de/books?hl=en&lr=&id=ly3cZDCsetIC&oi=fnd&pg=PR9&dq=


78

knowledge+externalities+innovation+cluster+vaya&ots=51rjOC-

1YB&sig=dcphQDwinW6fydfj1gdK-zSra3Q

117. Thérin, F. (2014). Handbook of Research on Techno-Entrepreneurship, Second

Edition: How Technology and Entrepreneurship are Shaping the Development of

Industries and Companies. Edward Elgar Publishing.

118. Thüringer Netzwerk für Innovative Gründungen (ThürInG). (2013). Innovative

Gründungen in Thüringen: Entwicklung und Ausblick 2013. Stiftung für

Technologie, Innovation und Forschung Thüringen (STIFT). Retrieved from

http://www.stift-

thueringen.de/fileadmin/user_upload/stift/studie_2013_23122013.pdf

119. TMWAT. (2013a). Atlas of application -oriented research institutionseas. Erfurt:

Thüringer Ministerium für Wirtschaft, Arbeit und Technologie.

120. TMWAT. (2014). Regionale Forschungs- und Innovationsstrategie für intelligente

Spezialisierung für Thüringen. Erfurt: Thüringer Ministerium für Wirtschaft, Arbeit

und Technologie.

121. TMWAT, T. M. für W., Arbeit und Technologie. (2011). WIN - Wachstum,

Innovation, Nachhaltigkeit : Trendatlas Thüringen 2020. Hamburg : Hoffmann und

Campe.

122. TMWAT, T. M. für W., Arbeit und Technologie. (2012). Thüringer

ClusterManagement (ThCM): Ziele, Strukturen und Arbeitsschwerpunkte. Erfurt.

123. TMWAT, T. M. für W., Arbeit und Technologie. (2013b). Wirtschaftsbericht

Thüringen: Alle Branchen, alle Zahlen, alle Informationen für 2013 (Government

Report). Thüringer Ministerium für Wirtschaft, Arbeit und Technologie. Retrieved

from http://www.thueringen.de/de/publikationen/pic/pubdownload1495.pdf

124. Tödtling, F., Prud’homme van Reine, P., & Dörhöfer, S. (2011). Open innovation

and regional culture—findings from different industrial and regional settings.

European Planning Studies, 19(11), 1885–1907.

125. Toshihiro Hanawa, M. S. (2009). Evaluation of Multicore Processors for

Embedded Systems by Parallel Benchmark Program Using OpenMP., 15–27.

doi:10.1007/978-3-642-02303-3_2

126. TU Ilmenau. (2013). Bericht des Rektors 2012 (Yearly Performance Report).

Ilmenau: TU Ilmenau. Retrieved from http://www.tu-

ilmenau.de/universitaet/bericht-des-rektors/

127. United Nations Conference on Trade and Development. (2001). Transfer of

technology. New York, NY. [etc.]: United Nations.


79

128. Van Oort, F. G., Oud, J. H., & Raspe, O. (2009). The urban knowledge economy

and employment growth: a spatial structural equation modeling approach. The

Annals of Regional Science, 43(4), 859–877.

129. Varga, A. (Ed.). (2009). Universities, knowledge transfer and regional

development: geography, entrepreneurship and policy. Cheltenham u.a.: Elgar.

130. Von Wissel, C. (n.d.). Die Hochschulen in regionalen Innovationsstrukturen.

Relativ Prosperierend, 459.

131. Wang, Y. C., & Lipsitch, M. (2006). Upgrading antibiotic use within a class:

Tradeoff between resistance and treatment success. Proceedings of the National

Academy of Sciences, 103(25), 9655–9660. doi:10.1073/pnas.0600636103

132. WEF. (2014). Enhancing Europe’s Competitiveness Fostering Innovation-driven

Entrepreneurship in Europe (Insight Report) (p. 62). Geneva: World Economic

Forum. Retrieved from http://www.weforum.org/reports/enhancing-europe-s-

competitiveness-fostering-innovation-driven-entrepreneurship-europe

133. Woolthuis, R. K., Hillebrand, B., & Nooteboom, B. (2005). Trust, contract and

relationship development. Organization Studies, 26(6), 813–840.


80

ANNEX 1 Overview of Different Technologies

Name of Technology Short explanation Example

Nanotechnology Manipulation technique of materials on the atomic or molecular scale (Nano: one billionth of a meter; analogous to a soccer ball compared to the earth)

‘Nano’ tubes in the solar cells

Micro- and Nano-electronics

Electronics in small level, micro refers to a miniaturised version of larger electronics while nano-electronics refer to the application of nanotechnology in electronics.

Microelectronics: computer chips Nanoelectronics: cancer detector

Photonics The application and use of light properties

Detectors in digital cameras, optical sensors in computer, laser surgery

Advanced Materials Synthesis or production of new or better materials, this can be based on metals or even biologicals

Anti-scratch phone displays, unbreakable ceramics/glass

Biotechnologies The use of living organisms to make useful products

Enzymes in detergents, DNA cloning

Advanced Manufacturing New ways that improve products or production processes

The application of robots and sensors to detect cracks in ceramic production

Information and Communication Technologies

Integration of wireless communication methods, computers, and means of communications

Software, computer network security, mobile phones

Summarized and simplified from:

Karlsson, Charlie, Börje Johansson, and Roger R. Stough. Entrepreneurship and

Dynamics in the Knowledge Economy. Studies in Global Competition. New York, NY

[u.a.]: Routledge, 2006. http://www.loc.gov/catdir/enhancements/fy0654/2005012118-

d.html http://www.gbv.de/dms/bsz/toc/bsz12098542xinh.pdf.

Sismondo, Sergio. An Introduction to Science and Technology Studies. John Wiley &

Sons, 2011.

http://www.gbv.de/dms/bsz/toc/bsz12098542xinh.pdf


81

ANNEX 2 Location of Thuringia in Germany

Taken from the back cover of:

TMWAT. Thuringia: 100 Stories, 100 Surprises. Regional Marketing. Erfurt: Thüringer

Ministeriums für Wirtschaft, Arbeit und Technologie. http://www.das-ist-

thueringen.de/data/download/Thueringen_100_Geschichten_100_Ueberraschungen.pdf


82

ANNEX 3 Location of major innovation cities in Thuringia

Major cities with higher education institutes are with red box. They are (from left to right):

Schmalkalden, Nordhausen, Ilmenau, Erfurt, Weimar, Jena. Eisenach (most left) is also

included due to its significance in automotive cluster.

Taken from the back cover of:

TMWAT. Thuringia: 100 Stories, 100 Surprises. Regional Marketing. Erfurt: Thüringer

Ministeriums für Wirtschaft, Arbeit und Technologie. http://www.das-ist-

thueringen.de/data/download/Thueringen_100_Geschichten_100_Ueberraschungen.pdf

.


83

ANNEX 4 Geographical Situation of Ilmenau

Ilmenau is located about 33km south of Erfurt in the northern edge of Thuringian Forest

at an altitude of 500m of elevation. The basin where the city and TU Ilmenau are located

is surrounded by four different mountains (indicated by green color of the forest). They

are Pörlitzer Höhe (north), Ehrenberg (east), Tragberg (east), Lindenberg (south), and

Hangeberg (west). The white broken line shows administrative border. Image was taken

from Google Maps (2014) under Creative Commons License.


84

ANNEX 5 OECD Systemic Approach Publications

Year Title

1960 Cooperation in Scientific and Technical Research

1963 Science and the Policies of Governments

1966 Fundamental Research and the Policies of Governments

1966 Government and the Allocation of Resources to Science

1966 Government and technical Innovation

1966 The Social Sciences and the Politics of Governments

1968 Fundamental Research and Universities

1968-70 Gaps in Technology

1971 The Conditions for Success in Technological Innovation

1972 Science, Growth, and Society

1972-74 The Research System

1980 Technical Change and Economic Policy

1981 Science and Technology Policy for the 1980s

1988 New Technologies in 1990s

1991 Technology in a Changing World

1992 Technology and the Economy: the Key Relationships

These are OECD publications (white papers and reports) between 1960-1992 during

Systemic Approach before adopting National Innovation Systems. Compiled from OECD

Library http://www.oecd-ilibrary.org/ (last accessed 1 February 2014)

http://www.oecd-ilibrary.org/


85

ANNEX 6 OECD National Innovation Systems

Year Title Notes

1995 National Systems for Financing Innovation

1997 National Innovation Systems

1999 Managing National Innovation Systems

1999 Boosting Innovation: The Cluster Approach

2001 Innovative Networks: Cooperation in the National Innovation Systems

2001 Innovative Cluster: Drivers of National Innovation Systems

2001 Innovative People: Mobility of Skilled Personnel in National Innovation Systems

2002 Dynamising National Innovation Systems

2005 Governance of Innovation Systems

2006-2010: year gaps of OECD Member States Innovation Policy Reviews including different technology sectors – with collaboration from EU

2010 Measuring Innovation: a New Perspective

2010 The OECD Innovation Strategy: Getting a Head Start on Tomorrow

2013 Knowledge Networks and Markets

2014 Making Innovation Policy Works: Learning from Experimentation

- in collaboration with World Bank

2014 Intelligent Demand: Policy Rationale, Design, and Potential Benefits

These are OECD publications (white papers and reports) after dopting National

Innovation Systems starting from 1995. Compiled from OECD Library http://www.oecd-

ilibrary.org/ (last accessed 1 February 2014)




86

ANNEX 7 Guiding Questions for Interview

The main research question:

What explains innovation-based industrial leadership at regional levels?

In the context of theoretical framework:

Are Regional Innovation System and Cluster Approach sufficient to

stimulate innovation?

More specific questions for interviews/discussions:

1. How can innovation from start-ups and spin-offs contribute to regional

economy and achieve industrial leadership?

2. Who is the main stakeholder that sustains innovation and industrial

leadership?

3. What are the barriers of innovation and industrial leadership?

4. How the innovation stakeholders (academia, business, government,

NGOs and media) address the barriers of innovation?

5. What kinds of supports are available to stimulate innovation?

6. What can policy do to stimulate innovative start-ups?

7. What kind of policy is suitable to cultivate entrepreneurial attitudes and

activities?

8. Who starts innovation and industrial leadership?

9. Where does industrial leadership reside: regional, sectoral, or national?


87

10. How can the regional innovation system in Thuringia/Ilmenau be

improved?

Some of the questions were similar to the follow up questions from:

Fritsch, M. (2014). New Firm Formation and Sustainable Regional Economic

Development–Relevance, Empirical Evidence, Policies.

However, this project and the publication were conducted separately as this

project started in November 2013. The similarity is coincidental. Yet, it points out

the importance and relevance of the undertaken project.


88

ANNEX 8 INTERVIEWS AND SELECTED QUOTES

Nr. Position DOI Justifications Quotes

1 Technology Transfer Office

Manager (TU Ilmenau)

4 December

2013

TTO is the university

gatekeeper with government,

business partners and

research commercialization. It

also helps many research

grant proposal submissions.

There is limited interaction

between different stakeholders

(decision makers)

The focus of entrepreneurship is

still on business-plan

competitions

University is not part of Cluster

Strategy

There are many overlapping

entrepreneurship programs

2 Representative of GIZ for

Thuringia in Erfurt

(Deutsche Gesellschaft für

Internationale

Zusammenarbeit GmbH,

GIZ)

13 December

2013

German Federal Enterprise

for International Cooperation

is a federal enterprise owned

by German Federal

government with states and

many international

organizations as clients. GIZ

has a strong role in opening

new markets for German

companies in developing

countries.

Thuringia's innovation products

and technology have strong

potential to help developing

countries, however the idea of

opening new markets in

developing countries are still not

yet attractive due to the perceived

risks.


89

3 Innovation and

Entrepreneurship Head

Coach of STIFT

(Die Stiftung für

Technologie, Innovation

und Forschung Thüringen,

STIFT)

7 January 2014 Foundation for Technology,

Innovation, and Research is a

public organization funded by

European Enterprise with aim

to promote technology

transfer and research

commercialization through

start-ups and private sector

collaborations among many

other things.

Security is an important aspect

that shapes German people's

attitude. This makes people in

many cases risk-averse and thus

demotivates them to be

entrepreneurial.

Universities only focus on

university activities, teaching and

basic research. Research

commercialization is not always

the priority - though this is

changing lately.

Innovation technology requires

people, such as mentors, who

have strong interdisciplinary

backgrounds to guide

researchers/scientists to

commercialize their research, find

the niches/market, and come up

with business models/exit

strategies.

There is a strong need of raising

the business awareness of

scientists.

There are always ways to

improve the cooperation and


90

communications between

government bodies, universities,

and other initiatives to build

regional economy.

4 Head of Sustainable

Market, GIZ

(German Federal Enterprise

for International

Cooperation (Deutsche

Gesellschaft für

Internationale

Zusammenarbeit GmbH,

GIZ)

14 January 2014 GIZ is a federal enterprise

owned by German Federal

government with states and

many international

organizations s clients. GIZ

has a strong role in opening

new markets for German

companies in developing

countries.

Horizon 2020 has the potential to

develop local innovation and GIZ

can provide the links to partner

countries and open the markets

there,

Through GIZ knowledge sharing,

we (German stakeholders) can

learn from Partner countries.

With limited funding from federal

and local governments, many

German states depend on EU

funding, however EU funding

requires streamlining of policy

from federal to local regional

government. The synergy is still

missing nowadays and thus

making the eligibility to get the

EU funding a challenge.


91

5 Professor of

Entrepreneurship at Erfurt

University of Applied

Sciences

Business Mentor

Book writer "Coachment', 7

steps of entrepreneurship

22 January 2014 Representative from

academia and business

mentor

Mentoring is necessary, but we

need someone from the same

background. Someone from

biotech business should not be a

mentor for an entrepreneur

working on ICT products

We need entrepreneur

ambassadors that serve as"role

models" to students - in most

cases, personal contacts would

address the risk-averse attitude

of the students

Financing entrepreneurial

activities in HEI is always difficult,

especially in this education

financing climate.


92

6 CEO of software company

Entrepreneur from

university

16 January 2014 Representative of

entrepreneur from academia

Mentoring is important but only

with the right person with similar

background.

For start-ups, supports from local

city council or government are

always crucial, for example in

making the application easy and

finding a place to start the

business.

What is mroe crucial is the supply

of local talents from (local)

university.

Personally, venture capitals are

very much discouraging as they

gain ownership of our hardwork

setting up the company. It is best

to grow 'organically'

7 Tech Transfer Officer of

Ernst Abbe University of

Applied Sciences in Jena

5 February 2014 Another perspective from TTO

office in Jena

Jena has the advantage of big

companies which provides spill-

overs effects. However, it makes

local talents get absorbed by big

existing companies rather than

settingup their own companies.

Cooperation with other HEIs and

research institutes are definitely

important and fruitful, despite it is

still rather limited.


93

8 Founder of TU Ilmenau

Entrepreneurship Forum

'Auftakt'

Managing Director of

Venture Capital Firm

Entrepreneur, TU Ilmenau

Alumni

6 February 2014 Representative of

entrepreneur from academia

Part of TTO in TU Ilmenau

Initiator of entrepreneurship

forum

Bottleneck funding in TLR5 and

TLR6 innovation products

Funding of start-ups should come

from communcal (alumni)

networks to increase sense of

belonging.

Subsidies only create

dependency

ThEX is a good idea, however

universities are not part of ThEX

membership. Thus, it has very

limited cooperation with HEIs.

9 Head of Research and

Infrastructure Department,



Culture

11 February

2014

Representative of Ministry of


Culture

There is a strong link between

infrastructure and research.For

example, the mission of TMBWK

is to increase research capacity

of Thuringia. Thus, the new

speed train (ICE) line that

connects Berlin and Munich will

certainly help the mobility and

knowledge exchanges.

Horizon2020 certainly can

complement the funding of

research and increase the

research capacity of Thuringia.


94

10 EC DG Research and

Innovation

11 February

2014

Representative of European

Commission

Horizon 2020 is the improvement

of previous research funding

which couple research and

innovation under single program

for the first time. Furthermore, the

aim of Horizon 2020 is to address

societal challenges in open

society - the future of Europe.

Unlike its predecessors, Horizon

2020 requires (natural) sciences

to work together with social

sciences and humanities.

11 CEO of EU Research and

Technology Consulting

company

11 February

2014

Representative of consulting

company with much

experience in EU research

grants

LEIT reflects on the political

thinking of EU in the coming

years

Horizon2020 will force

researchers to think outside the

box, identify the application of

their research to solve Europe's

social challenges, and implement

it.

There is a strong need to

collaborate with many other

institutes from other EU Member

States, thus Horizon 2020 builds

European competitiveness as


95

whole. Not just focused on

regional level.

12 CEO of Medical Devices

Company and a

Neuroscientist

12 February

2014

Representative of

entrepreneurial scientist

Support for start-ups, especially

in high tech company, is in the

value chains and guarantee for

investments.

GET-UP scheme in early 2000s

was, in my personal view, the

most successful entrepreneurship

funding because it specifically

involved HEI leaders to

participate in the direction of

Thuringian innovation.

13 CEO of Medical Devices

Company and a scientist

17 March 2014 Representative of


The most important factor in local

economic development is

relationship and trust between the

people.

In the case of Ilmenau, the long-

term relationship with the

university supplies the talents.

Many of the grants have too

much bureaucracy which at the

end does not make sense to

spend our time on grant

proposals writing.


96

14 CEO of Robotics Company

Engineer and Business

Developer

19 March 2014 Representative of


In the case of our company, it all

started with a group of people

and a good relationship with our

professor in TU Ilmenau.

This highlights the importance of

trust, personal relationship, and

partnership - especially when we

are working interdisciplinary.

15 Head of EU Project Grants

for TU Ilmenau

26 March 2014 Representative of TTO,

providing the EU grant

perspective

In such small state, a better

cooperation between different

stakeholders and a centralized

organization would create a

critical mass that increases

Thuringia's competitiveness.

Many of researchers, CEOs of

start-ups, and other stakeholders

have not comprehend the

benefits and the importance of

EU funding, such as provided by

Horizon 2020 scheme. This

points out the importance of a

good network as a mean of

communicating the information -

selling the ideas and benefits of

EU grants.


97

16 EU Commissioner for

Regional Politics

16 June 2014 Representative of European

Commission

Horizon 2020 aims to bring

synergy in European Innovation

by inviting SMEs to participate in

tech transfer

17 Rector of TU Ilmenau 16 June 2014 Representative of Academia,

Head of University

Technology transfer requires

strong collaborations with SMEs,

not just relying on entrepreneurial

activities.

Academics hope TMWAT and

TMBWK have a better synergy in

terms of policy

18 Minister of Thuringian


Technology

16 June 2014 Representative from

government

Cluster approach should be

infused to RIS.

With ThEX, Thuringia tries to

bring all entrepreneurship

initiatives under one umbrella

19 State Secretary for



Culture


government

The main focus of TMBWK is

supporting the basic research

We agree that innovation is

important to the economy. That

is the amin reason why we

support TTOs

20 Chair of Innovation Strategy

of VDI Technology Centre

GmbH

16 June 2014 Innovation Researcher and

practitioner

RIS is definitely a muss have. It

creates the critical mass and

brings efficiency – especially in

public-policy making.


98

21 Professor of Network

Security and Computer

Sciences

15 January 2014 Representative of Academia One should look from the

perspective of scientists. We are

not trained to make risky

decisions.

In the context of

entrepreneurship, it is a real

danger that tenure creates a

comfort zone.

22 Creative Industry and

Entrepreneurship Advisor at


Economics, Labor, and

Technology

9 June 2014 Entrepreneurship Policy

Officer

Lack of collaboration between

different actors is always the

main concern

Networking event might work but

it is difficult to assess or quantify

23 Head of Cluster Department

at Thuringian Ministry of


Technology

22 May 2013 Cluster Expert ThCM is a step forward in

building regional competitiveness.

The main challenge is to bring all

the actors to sit down and have

public discourse

24 State Secretary for



Technology


government

TMWAT and TMBWK are having

close cooperation in developing

RIS3

Indeed, a closer collaboration

should be present, but we are

working on it.

Different ministries have different

guides to follow.


99

25 CEO of Incubator 16 July 2014 Expert in research

commercialization

The key is in the University. If a

University has a wide range of

disciplines, this already create a

critical mass

Large companies only focus on

their activities in the value chain.

Large companies forget the

importance of university in

supporting innovations – most of

the times.

Incubators are indeed important –

especially in applied sciences.

SMEs are too small to network

with large companies. They have

not much to offers. Usually it

takes 5-8 years before they can

approach large companies and

have meaningful collaborations


100

ANNEX 9 Overview of ThEx

Name Sector Tec

h T

ran

sfe

r

Co

ns

ult

ing

Ad

min

istr

ati

ve

su

pp

ort

Ma

rke

tin

g

Fu

nd

ing

Ev

en

t

Ma

na

ge

me

nt

ThEGA Thüringer Energie- und Green Tech

Agentur

Energy and Green

Tech

x x x x x

GWT* Beratungsnetzwerk Gründen und

Wachsen in Thüringen

Cross-sectoral, support

for start-ups

x x x

ThEX /

ThürInG*

Thüringer Zentrum für

Existenzgründungen und Unternehmertum

Cross-sectoral, support

for start-ups

x x x x

ThAFF Thüringer Agentur für Fachkräftesicherung Labor, Employment x x x

ThAK Thüringer Agentur für die Kreativwirtschaft Creative industry,

edutainment

x x x x

ThIMo Thüringer Innovationszentrum Mobilität Mobility, transport x x x x

ThCM Thüringer Cluster Management Cross-sectoral x x x

TI Thüringen International Cross-sectoral x x

ThüBAN Thüringer Business Angels Netzwerk Cross-sectoral x x

Author Analysis from http://www.thex.de/ueber-das-thex/


101

ANNEX 10 Locations of Commercial Research Institutes in

Thuringia

Source: (TMWAT, 2013a)


102

Declaration (Erklärung)

gemäß § 25 Abs. 1 der Prüfungs- und Studienordnung des weiterbildenden

Studiums „Public Policy“ an der Universität Erfurt

Ich versichere, dass ich die vorgelegte Arbeit selbstständig und ohne unerlaubte

Hilfe Dritter angefertigt habe. Alle Stellen, die ich wörtlich oder annähernd

wörtlich aus Veröffentlichungen jeglicher Art entnommen habe, sind als solche

kenntlich gemacht. Ich habe mich keiner anderen als der angegebenen Literatur

oder sonstiger Hilfsmittel bedient. Diese Arbeit hat weder in gleicher noch in

ähnlicher Form einer anderen Prüfungsbehörde im In- oder Ausland vorgelegen.

I affirm that the work I have submitted was done independently and without

unauthorized assistance from third parties. All parts which I took word-for-word

or nearly word-for-word from any sort of publication are recognizable as such. I

did not use any means or resources other than the literature I have quoted. This

work was not submitted in this or any similar form to an examination committee

in or outside of Germany.

Erfurt,

Datum /

Date

Unterschrift /

Signature

Name (Blockschrift /

block letters)

Date post:	27-Dec-2015
Category:	Documents
Upload:	hosea-handoyo
View:	180 times
Download:	1 times

Leadership in Enabling and Industrial Technologies

Documents