WP2 Conceptualizing demand creation mechanisms for European regions of knowledge Deliverable 2.2 Report on SWOT and regional impact and performance measurement for each Sat-Nav cluster Version date Author V0.1 16 March 2009 Bernhard Katzy (CeTIM) Zhao Zhou (CeTIM) Marco Conte (ESoCE) Jurgen Vogel (GR-m) Felix Esser (B-AIR) Tomas Bohrn (CSO) Contract No.: 206201 Deliverable no.: 2.2 Deliverable subject: Report on SWOT and regional impact and performance measurement for each Sat-Nav cluster
Transcript
WP2
Conceptualizing demand creation mechanisms for
European regions of knowledge
Deliverable 2.2
Report on SWOT and regional impact and performance
measurement for each Sat-Nav cluster
Version date Author
V0.1 16 March 2009
Bernhard Katzy (CeTIM) Zhao Zhou (CeTIM) Marco Conte (ESoCE) Jurgen Vogel (GR-m) Felix Esser (B-AIR) Tomas Bohrn (CSO)
Contract No.: 206201 Deliverable no.: 2.2 Deliverable subject: Report on SWOT and regional impact and performance measurement for each Sat-Nav cluster
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INNOFIT CONSORTIUM INNOFIT Consortium
Number Partner Partner Short Name Country 1
(Coordinator) Centre for Technology and Innovation Management
CeTIM NL
2 GruenderRegio M GR-m DE 3 ESoCE NET ESoCE IT 4 bavAIRia B-AIR DE 5 Living Lab Leiden Foundation L3F NL 6 Czech Space Office CSO CZ
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TABLE OF CONTENTS INNOFIT CONSORTIUM...................................................................................................... 2
TABLE OF CONTENTS......................................................................................................... 3
4.1 IMPACT AND PERFORMANCE MEASUREMENTS OF DEMAND CREATION IN SOUTH HOLLAND ....................................................................................................... 36
4.2 IMPACT AND PERFORMANCE MEASUREMENTS OF DEMAND CREATION IN LAZIO REGION............................................................................................................. 44
4.3 IMPACT AND PERFORMANCE MEASUREMENTS OF DEMAND CREATION IN BAVARIA ...................................................................................................................... 52
4.4 IMPACT AND PERFORMANCE MEASUREMENTS OF DEMAND CREATION MECHANISM IN PRAGUE ............................................................................................... 60
Cluster building has been regarded as an effective tool for creation of flourishing knowledge-based industries. Regions play an important role in the process as the geographic and (networked) organizational locus of stimulating knowledge sharing, information exchange, to higher levels of innovation, and higher level of business formation. Cluster, here, is defined as geographic concentrations of interconnected companies, specialized suppliers, service providers, firms in related industries, and associated institutions (for example, universities, standards agencies, and trade associations) in particular fields that compete but also cooperate.
However, only realizing the importance of cluster is not enough to facilitate the building of a competitive European SatNav industry, which still seems to be a tough challenge. The hypothesis of the Inno-FIT project is that traditional supply side innovation models, which focus on research and technology development, education of experts, provision of finance and other external factors, is necessary but not enough to ensure the success of clusters. Such technology-pushed models are faced with an effect, which is called “market failure”, in the transition period where the question remains to be answered whether there will be a market and for which service. The Inno-FIT project therefore searches to complement these mainstream models with a strong focus on the demand side of innovation, which centres on developing products or services with an eye on users’ demand and market potential.
Scholars’ opinions vary on of how to effectively build competitive cluster, which leads to different approaches to analyse the rationale behind the cluster economic outcome (e.g. Diamond model). In any cases, it is undisputed that one relevant origin in competitiveness of a regional industry lies in its firms, especially as well their market and demand orientation. And among all firms, the entrepreneurial ones are believed to have high market orientation and to bring substantial benefits to economy in terms of employment, innovation and productivity. Entrepreneurial regions such as Boston’s route 128 and Silicon Valley are two compelling American cases on the role of entrepreneurial ventures in the development of cluster.
The role of this deliverable in the Inno-Fit project is an analysis of the current state of demand creation mechanism in the clusters that represented in the consortium. This is relevant to define on what basis in the clusters the joint action plan (to be developed in WP 4) can build, and how it should be designed for successful take-up. Besides, the impact and performance of demand creation mechanisms in European SatNav regions is also measured in this work package. The survey on the implementing situation of demand creation mechanism has been conducted both on cluster level and firm level.
To achieve the aim of develop competitive SatNav industry, a strategic planning method, the SWOT analysis is employed for Deliverable 2.2. With this method which is firstly developed in the project and business ventures fields, the internal factors (Strengths and Weaknesses) and external factors (Opportunities and Threats) of European SatNav clusters for demand creation are evaluated. The outcome of SWOT analysis produces penetrating and insightful knowledge on shaping and revising the strategy for building competitive SatNav industry.
This deliverable contributes to both theory and practice. To theory, contrary to traditional cluster competitive analysis approach, the survey based on capability perspective is inside-out approach to analyse cluster’s routines, which determine the behaviour of organizations under particular circumstances.
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The practical contributions is empirical information on the implementation of demand mechanism, and the Strengths, Weaknesses, Opportunities and Threats of European SatNav industry which contains ideas like why some demand creation mechanisms work in specific regions, while some others didn’t. The information would bring sage suggestions to policy makers of cluster/region in shaping appropriate strategy and realising it.
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2. INTRODUCTION
Starting with the concept of Demand Creation developed in Task 2.1 and Task 2.3, which was defined as a process that discovering, satisfying latent and existing demand with services or products development which are based on technical or scientific knowledge. Unlike traditional supply side of innovation, demand side of innovation is a market-pull mode which drives innovation process through existing and potential market demand. Specific example like “lead market”, one of the demand creation best practices identified in Deliverable 2.1, is a way to push innovation through public intervention, has been well “exhibited” in the case of Galileo application, like German TollCollect for road taxing.
To achieve the objective of INNOFIT, helping advance the innovation action plans of industrial decision makers, research, and innovation policy making to spur a genuine European SatNav industry, the impact of demand creation mechanisms on innovation process has been measured in this deliverable.
This deliverable report consists of two tasks see the figure below:
Figure 1 Contents of Deliverable 2.2 report on SWOT and regional impact and performance measurement
for each Sat-Nav cluster
• Task 2.2: Benchmarking strengths and weaknesses of European clusters
Started by an investigation of literature and was furthered with visits of regions where demand creation experiments have been conducting, interviews with key stakeholders include cluster (region) policy makers. Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis of European SatNav clusters for demand creation has been performed.
• Task 2.4: Impact and performance measurements of demand creation mechanisms
After conducting regional surveys to evaluate the effect (both economic and social effects) of regional plans and policies and the involvement of stakeholders, the impact and performance of demand creation mechanisms in European SatNav regions has been measured.
Research methodology
Both survey and interview methodologies were adopted to analyze the Strengths, Weaknesses, Opportunities and Threats (SWOT) of European SatNav clusters for demand creation and to measure the impact and performance of demand creation mechanisms. Two sets of questionnaires including both open questions and multiple-choice one were employed for cluster members and cluster managers separately. These survey and interviews were undertaken at a population comprises a group of key stakeholders from each regions include cluster manager, policy maker, officer from government, and entrepreneurs.
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The surveys are conducted in following regions
Figure 2 SatNav regions where surveys are conducted
Key concepts
• SWOT analysis
A strategic planning tool starts with an objective and initially developed in the fields of project or business venture. It is used to shape feasible strategy through identifying the key internal (Strengths and Weaknesses) and external factors (Opportunities and Threats) that are important to achieving the objective.
- Strengths: attributes of the entity those are positive to achieving the objective - Weaknesses: attributes of the entity those are negative to achieving the objective - Opportunities: external factors those are helpful to achieving the objective - Threats: external factors those might be harmful to achieving the objective
• Cluster
Sat-Nav Clusters are defined as regional agglomerations of firms engaged in the development of satellite navigation applications, which are supported by a specialized infrastructure like service provider which offering consulting on the legal, regulatory, policy and political framework.
• Stakeholders within Cluster
We define Stakeholders within cluster as any organizations which are part of Satellite Navigation Industry, not only the organizations which get engaged in the Value chain directly, but the organizations which could affect the business environment of the cluster, like government, informal business association and the like. The chief stakeholders include Government, education institutions like University, hogeschool, business incubators, companies (Large firms, SMEs, New ventures), research institutes, business service providers, network organizations and technology transfer centre. In this document, we use terms “Cluster stakeholder” and “Cluster member” interchangeably.
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3. BENCHMARKING STRENGTHS AND WEAKNESSES OF
EUROPEAN CLUSTERS
3.1 SWOT ANALYSIS OF SOUTH HOLLAND
Description of activities implemented/ Methodology
The analysis is conducted within “South Holland”, which doesn’t refer to the traditional geographical or administrative district. Take West-Holland province for example; in the sense of administrative district, it mainly includes Leiden, The Hague, and Delft. However, the term- “South Holland” in this report is an agglomeration of several industries, business, universities, research institutes, infrastructure, commercial association, and the like. For most of the organizations we studied were located in the southern part of Holland, so we call it “South Holland” to provide a more “touchable” sense. A large portion of attentions will be put on Satellite Navigation industry in this report, which is considered as promising downstream industry of GALILEO.
Some providers of Satellite Navigation infrastructure, like companies centring on the designing, manufacturing, and the launch of satellite, are not included directly in the framework of Satellite Navigation industry analysis. For we believe that the infrastructure is more close to the Aerospace industry in terms of characteristics of industries like state operated, capital intensive. However, the intimacies between these two industries are hardly to be neglected. The linkage and interaction between Aerospace Industry and Satellite Navigation Industry will be discussed in this report as well.
In order to get a comprehensive landscape of Satellite Navigation in “South Holland”, interviews with a number of people, include policy advisor, entrepreneurs from start ups, CEO from SMEs, Large companies, professors at Universities, managing director with research institutes, person who in charge of Technology Transfer Center of research institutes or Universities, officer from economic statistic department, are conducted by CeTIM.
There are two sets of questionnaires; one of them is for Cluster manager, while another one is for cluster members. The questions for Cluster Manager are mainly on macro level, which is aimed at getting a general, region/cluster level perception of Satellite Navigation in “South Holland”. Concerning cluster members, in order to gathering ground opinions on the organization growth and regional competitiveness building in Satellite Navigation, most of the questions are based on organization level. Given the same interviewees for both task 2.2 SWOT analysis of European SatNav clusters for demand creation and task 2.4 the impact and performance of demand creation mechanisms in European SatNav regions, some questions only for task 2.4 are also included in these two sets of questionnaires.
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General Description of the Satellite Navigation in “South Holland”
The Satellite Navigation industry in “South Holland” mainly located in the district of Delft, Leiden, The Hague, and Amsterdam, which is one of the top business locations in Holland even in Europe.
Four high level universities (university of Amsterdam, VU university Amsterdam, Leiden University, Delft University of Technology) are located in this area, of which Delft University of Technology is one of the top Aerospace engineering universities in the world, the faculty of Aerospace Engineering is one of the largest of the faculties with several renowned research institutes devoted entirely to aerospace engineering in northern Europe. In addition to possessing excellent, high standard education in various fields like space engineering, ICT, Business, and others, the research and technology centre of European Space agency (ESTEC) is in Nordwijk which is only 20 minutes drive from Leiden. More than 2000 specialists work at ESTEC on dozens of space projects: science missions, human spaceflight, exploration, telecommunications, satellite navigation and Earth observation as well as technology development. Well developed education system, top research center on space related fields, and their technology transfer program make “South Holland” become a pool of skilled human resource and knowledge.
Despite of comparative long history of space technology in “South Holland”, it seems that people don’t realize the full potential of Satellite Navigation applications. Satellite navigation, is still young commercial industry, young and enthusiastic entrepreneurs start to act in this field. Take ESA incubator (ESA business incubator is affiliated to ESA and designed to bridge the gap between an idea and an actual business by helping a technology transfer project get off the ground and assisting its development into a viable business) as an example, 6 out of 11 companies which are under incubation now are in the business area of satellite and navigation.
Satellite navigation companies are divergent; their service and product are overlapping with other sectors like ICT, logistics. In the “South Holland”, IT, Transportation, and Entertainment are well developed clusters.
Besides the diamonds model factors we presented above, one more factor we would like to address is the living environment of “South Holland”, it is a quite international region, the figure will be added. It located on the Dutch coast with miles of sand beach, more than half the region’s area is covered with woodland, parks, gardens; more important, it has a tolerant and open culture, a large variety of religious and ideological backgrounds are represented, among other Christianity, Buddhism, Islam and Hinduism. Holland is one of few countries where allow same-sex marriage.
SWOT Analysis and Report
Start with the objective that bridging the gap between knowledge provider and market demand, an analysis on Strength, Weakness, Opportunities, and Threats of “South Holland” for demand creation has been conducted based on process framework of demand creation which we developed in the Deliverable 2.1.
Strength of Satellite Navigation in “South Holland”
- “South Holland” is a region of knowledge and skilled space engineers
Faculty of Aerospace Engineering at Delft University of Technology, the only education institute carrying out research and education directly related to
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aerospace engineering in the Netherlands. In 2008, the faculty has some 1900 undergraduates and graduates, 200 members of academic staff and 100 PhD students. And another key player within the “region”- ESA in Nordwijk, is the largest ESA site, and the scientific and technical heart of ESA, more than 2000 specialists work at ESTEC on dozens of space projects: science missions, human spaceflight, exploration, telecommunications, satellite navigation and Earth observation as well as technology development.
In addition to scientists and engineers, high-level business education are also provided in “South Holland” by The Universiteit van Amsterdam Business School (ABS), Rotterdam School of Management (RSM), which have reputation in business education in the world. Besides a science based business programme is provided by the oldest university in Holland- Leiden University.
- Entrepreneurial climate, market sense, and clustering climate
Some figures from one of the best demand creation mechanisms we discussed in Del 2.1- European Satellite Navigation Competition (ESNC) shows that, the number of ideas submitting to ESNC is the highest among all the 13 participating regions. And the respondents expressed strong interests in the regular Satellite Navigation Industry events, social networking opportunities, and in creating application focused cooperation projects within the “South Holland”.
Weakness of Satellite Navigation in “South Holland”
- There is no real “clustering” in Satellite Navigation in “South Holland”
Responses don’t have a cluster image with Satellite Navigation in “South Holland”, it is hard to obtain information on regional events, and the cluster members feel that they barely know each other, the information on cluster actors and the initiatives is very limited; the cooperation and the knowledge exchange is limited as well. Currently, the respondents feel that the region does not have any relevance to most cluster members, especially not for signalling.
- The awareness of Satellite Navigation application and their potential is limited
During the conversation with end-user, they don’t realize what satellite and navigation can bring more than just GPS. It means that demands are potential. Many respondents are insecure about the existence, quality and potential of application markets. The respondents’ overall awareness of existing (informal) support mechanisms is low.
- The existing platform within region doesn’t work well
The initiatives are the primary platforms for information dissemination, information exchange, and networking, however, only a small portion of responses believes that it is easy to obtain information within the cluster; the knowledge is being exchanged; and the region has a strong culture. Suggestions that organizing more satellite navigation application-specific professional and social events, are proposed by the respondents when conducting interviews.
- Separate engineering education and business education
Engineering education on space technology are mainly provided by Delft University of Technology, within the faculty of aerospace engineering, the course and research are only in corporation with other engineering university and research centre, rather than business education. Meanwhile, the business
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education provided at Rotterdam school of management is rarely combined with technology faculty.
Opportunities of Satellite Navigation in “South Holland”
- Overlapping between the existing well developed clusters might promote the development of Satellite Navigation in “South Holland”
The supporting industries like logistics, the overlapping of clusters stimulate the development and formation of new cluster. According to cluster mapping of European Cluster Observatory Project (http://www.clusterobservatory.eu), Entertainment, Transportation, and IT are well developed clusters in “South Holland”, which are closely related to Satellite Navigation industry, all the 6 satellite navigation companies within ESA incubator, are more or less related to the above 3 clusters.
- The popularity of devices with GPS ability might stimulate the prosperity of location-based service
Now, the number of cars with Portable Navigation Device increase dramatically, in Europe, now around 20% of the 210 million cars on the road are equipped with some kind of navigation device, which in various surveys more than 40% of car drivers indicate that they would be very interested in a navigation solution. Meanwhile, more and more mobile devices are equipped with GPS, map, like the models launched by Google, Apple, Nokia, Sony Ericsson, Samsung and other companies. The penetration and prevalence of mobile device GPS ability provide a platform foundation for the prosperity of location based services.
Threats of Satellite Navigation
- The first mover advantage of other regions
The first mover advantage, regions like the USA plays the most important role as a procurement market, providing 70%, followed by EU 15 countries at 15%. The economic region of Munich is the third most important procurement market, makes up 7%.
- Demand condition in well developed regions might enhance the competitiveness of satellite navigation industry
As a sales market, Germany is the first place, which accounts for over a third of total sales volume, followed by the EU 15 at 15% and the USA makes up 12%, while China accounts for some 11% of sales.
In addition, the potential competitors from china, where new GPS system (Compass navigation satellite system) is under construction, so far 4 satellites are running in the sky, while so far we don’t know the time of the launch of the 3rd satellite for GALILEO.
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3.2 SWOT ANALYSIS OF LAZIO REGION
Description of the activities performed
In order to assess and to describe the main characteristic of the Aerospace District in the LAZIO Region, ESoCE-Net has collected the needed information as follows:
An important source of information analysed was provided by the so-called “P.O.R – Programma Operativo Regionale – Competitività Regionale ed Occupazione” (Regional Operative Program for the Regional Competitiveness and Employment), which is the basis of the regional policies in support of the Regional Competitiveness and Employment. The document contains a deep insight of the current status of the LAZIO Region economy, structured into the main economical sectors
A number of meetings conducted with representatives from SMEs, Industry and the Regional Development Agency, during the activity which the region is performing to facilitate the networking and collaboration inside the aerospace cluster. It is worth mentioning that ESoCE-Net itself played a major role in the establishment of the LAZIO Connect cluster and have coordinated a number of meetings with the main stakeholders in the Lazio region. This provided a source of first-hand, valuable information which has been subsequently validated by the information directly collected through the questionnaire (to this end, it is important to remind that the objective of this analysis is only to collect veritable information and not to perform a statistical analysis or survey about how the status of the region is perceived)
The INNO-Fit Questionnaire. Information were collected from personnel of Space Engineering S.p.A. and from representative of FILAS; which is the Agency of the Lazio Region in charge of implementing the industrial policies at regional level, with the aim of validating the information collected through the above mentioned activities.
Space Engineering S.p.A. is a small enterprise (around 100 employees), which has historically been the supplier of larger groups for the provision of Engineering services for space missions in the Radio Frequency design sector. Space Engineering is now widening its activities and operations and is willing to re-deploy the acquired competences to other/neighbouring market segments (especially in the GNSS services). This responds to a diversification strategy and it is seen as a measure to decrease the uncertainties connected to the large restructuring which the aerospace sector underwent to in the past years.
Filas' mission is to guide the economy of Lazio and promote development and innovation, especially through the adoption of new technologies. Filas manages tools related to innovation, new technologies and the net economy in order to strengthen the competitiveness of regional SMEs both in terms of regional product growth and external investment incentives. Filas pursues these objectives to promote the development of innovative enterprises and support the Regional government in monitoring the state and needs of enterprises. Filas' main tasks include:
• Providing financial assistance;
• Managing special funds of the Lazio Region;
• Promoting and supervising measures for the development of industrial areas and productive sectors, especially the aerospace and GNSS one;
• Implementing EU programmes.
General Description of the Aerospace District in the Lazio Region
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The technological aerospace district located in the Lazio Region of Italy sees a major concentration of large, medium and small enterprises involved in the aerospace supply chain. This position has been strengthened during the last two decades by specific government commitment at national, regional and local levels. The large industrial companies and smaller enterprises operating in the Region are characterised by strong technical capabilities, high quality productivity and broad diversification in national and international projects. FILAS, the financial investment agency of the Lazio Region, coordinates and promotes the activities of the technological aerospace district.
The technological aerospace district shows a five Billion Euro turnover with 30,000 employees, 250 prominent sized companies concentrated in different areas of industrial expertise, 11 Research centres, 5 Technological Centres, 5 Universities, 4 Engineering Faculties, 3.000 professors, researchers and specialists involved in aerospace R&D activities.
FILAS, supported by ESoCE-Net, has recently launched the project “Lazio Connect” which aims at increasing the productivity of the local economy through the formation of Virtual/Advanced Collaboration in the aerospace industry. The Lazio Connect has produced the following main results:
i) a cooperative model for the commercial and operational governance of the cluster;
ii) an organisational model designed ad-hoc;
iii) an ICT infrastructure, and;
iv) a legal framework to regulate collaborative contracts and deals.
Through Lazio Connect, SMEs operating in heterogeneous sector would acquire and integrate competencies as well as productive and technological skills in order to compete in a global market environment. The Lazio Connect initiative takes his place in a framework of rising adoption of a collaborative cluster approach in the Lazio Region and aims at creating a case of best practice at local and national level. The adopted collaborative framework is being applied initially to three main business streams:
i) Sat/Nav applications and services;
ii) Earth observation;
iii) Micro-satellite production.
SWOT Analysis and report
The questionnaire has been administered taking into account for the specific competences and roles played by the various actors and were used as main guideline and manual for gathering information. It was not intended that each of the players should have had filled it in exhaustively but only according to their own visibility and interests. In this respect, it is quite true that the questionnaire has parts more suitable for Regional Development Agencies and others which suit more entrepreneurs. Finally, the results collected through the questionnaire were not intended to represent a statistical sample of what the perception of the region is but to merely represent the picture taken at these very days, which can be usefully compared with the future ones, to support the understanding of the dynamics and evolution of the region itself.
Strengths, Weaknesses, Opportunities and Threats have been analysed in terms of the four categories mentioned (Technology, Market, Organisational/Clustering and propension to Innovation).
Description of Strengths of the Aerospace District in the Lazio Region
- Strong experience and historical background in the wide aerospace sector
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One of the strengths of the Aerospace District in the Lazio Region is represented by its strong tradition in the aerospace sector and in its active role in the major space programmes, especially for defence and telecommunication. The Aerospace District in the Lazio Region can also include as a main element of the context the Frascati ESA offices, which have been active in the GMES sector, and have contributed to the development of a number of initiatives in the fields which can be considered synergetic with the GNSS downstream one. Although the main driver for the whole aerospace cluster was the Large Enterprises (the Finmeccanica group www.finmeccanica.it is largely present in the region), since the last few years there was a common perception that a redeployment of the accrued competences have to be done, in neighbouring market sectors. FILAS, the financing agency of the Lazio Region, has clearly identified three priorities in the aerospace sectors, which are:
o Product and services in the Earth Observation;
o Product and services for EGNOS/Galileo;
o Microsatellites.
It is quite clear that the first ones are quite synergetic for the development of some interesting offer in the GNSS downstream market.
Finally, the companies in the LAZIO Region have definitely accumulated significant experience, knowledge, technology and know-how in the aerospace sector, thus providing a promising context in which to develop GNSS downstream market.
- Support from the region to match offer and demand
In the Lazio region context, FILAS is quite active to support the development of the industrial context in the aerospace sector, as it is one of the main regional priority. As a response to one of the most dire needs expressed by the entrepreneurs (SMEs have a number ideas but lack of marketing experience and competences, and need a support in the process of commercial validation of such ideas), FILAS has launched the Space2Land project, aimed at gathering together on one hand the technological providers and on the other hand the public demand (Public Administration, Civil Protection, Municipalities). The basic idea is to connect both sides of the market, with the objective of:
o Identifying common needs on the demand side, thus lowering the investments/costs needed to activate new initiatives;
o Aggregating competences, technology and skills in order to deliver what it is needed and not what is possible to deliver based on individual capabilities and capacities;
o Sharing “commons” for the development of product/services, which can be validated before being developed and delivered to the final customers.
As a result of this effort, FILAS has identified the existence of a huge additional market for the companies of the district, amounting to several tens of million Euro.
- Availability of business collaboration infrastructure
FILAS has recently launched the Lazio Connect initiative, which addresses needs for creation of additional business by providing an integrated framework suitable for facilitating the peer-to-peer collaboration among companies in the aerospace district, in particular in the Sat/Nav field (where integration of complementary expertises will be probably needed to offer adequate service an product).
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The collaborative framework, which is a sort of nurturing environment for the creation of additional demand – so-called “endogenous” demand as it is create spontaneously when a common business infrastructure is provided, is based on the following elements:
o Governance for the LAZIO Connect cluster, including roles and mutual relationships, including common collaboration processes, templates and tools;
o LAZIO Connect Legal framework, suitable for stipulating legal agreement to support the identified collaboration opportunities;
o LAZIO Connect Collaborative ICT platform.
- Awareness and willingness to adopt Open Innovation Mechanisms (Living Labs)
FILAS is supporting the adoption of living lab concepts, with the aim of developing user-centric platforms of services based on a collaborative network which involves three main groups of actors: (1) large companies and SMES in the supply side, (2) representatives of the demand side- our user groups- such as Local and regional administrations, and (3) representatives of the R&D and innovation system i.e. R&D centres, universities, laboratories. The platforms provide value added services to final users (citizens of the Lazio region) in the field of mobility and info-mobility, emergency management, Land surveillance and control, Tracking and traceability of goods, Informative system supporting the management of local public transport, and others, based on the integration of ICT and space technologies (Earth observation, telecommunications and satellite navigation).
The platforms involve Local and Regional Authorities, such as Fire brigades, Regional and Local Transport Agencies, Emergency services, Civil Protection, and other, in order to design the platform requirements and specifications and co-invest in their implementation. The developers are regional Large companies and SMEs specialised in ICT, communication, space technologies.
Description of Weaknesses of the Aerospace District in the Lazio Region
- Supply chain mentality and insufficient focus on R/D
The companies in the LAZIO region have a consolidated tradition as added value suppliers to Larger companies (at both local and international level) in international programmes, where niche excellence where often required. They has brought companies to involuntarily lean on Large Enterprises, which were meant to provide contracts and business opportunities and to discard their own plans and agenda for Research and Development of their own products. As a result of this, the focus on R&D and technology development are underdeveloped and SMEs often lack of resources suitable for providing support to technology development. In addition, the bondage between companies and University is weak from this point of view (Universities have their own, independent agenda) and it is difficult to capitalise on existing capabilities for further developments.
- Lack of user-oriented culture and inability to transform technology into innovative product
Strictly linked to the point above described, with respect to the business attitude of the companies of the Lazio region, they tend to privilege the technological aspects rather than the use scenario point of view, which is fundamental when we deal with GNSS downstream market and services, which is probably more a market pull business rather than a technology push one. This results in underestimating the
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contribution which a user could give to the development of a specific product/service (they are used to deal with Large Enterprises, which often dictate what to do and how) and in trying to sell the features of technology instead of the benefits, which can be well discussed with the users.
- Insufficient size of the SMEs players
The economic texture in the LAZIO region is mainly composed by three categories of players:
o Large Enterprises;
o Small Enterprises, up to 100 people employed;
o Microenterprises, up to 10 people employed;
Almost all the companies fall in these categories and there is a lack of organisation characterised by an intermediate dimension, suitable for facing the market with their own resources. This results in a limited capability of producing innovative product and services without negotiating collaboration agreements with third parties.
- Low capability to manage IPR formalisation and protection
SMEs in the Lazio region reluctantly start collaboration with third parties because it is believed that one of the most important priorities is the protection of the internal Intellectual Property Rights. There is a low attitude in formalising IPR into patents (number of patents produced and effectively utilised for commercial purposes) is not available. This results in a barrier for collaboration and, hence, for expanding the business beyond their current boundaries.
Description of Opportunities for the Aerospace District in the Lazio Region
- Presence of a fertile ecosystems, suitable for aggregating different competences and different organisations, including R&D centres and Universities
The technological aerospace district shows a five Billion Euro turnover with 30,000 employees, 250 prominent sized companies concentrated in different areas of industrial expertise, 11 Research centres, 5 Technological Centres, 5 Universities, 4 Engineering Faculties, 3.000 professors, researchers and specialists involved in aerospace R&D activities. It is indeed a significant economic context when described in an aggregate form and has the potential for further development.
- Availability of some basic infrastructure (Galileo Test Range), on which to start developing new product and service concepts
The availability of the Galileo Test Range is one of the basic platform needed in order to nurture the potential of the region for the development of the GNSS downstream market. Filas is quite active to provide support in order to create the basic infrastructure needed to develop a new kind of business. In addition, it is worth mentioning also the Frascati Living Lab, which is an ESA-ESRIN initiatives, aimed at making available information relevant to Earth observation, which can be conveniently integrated with GNSS to provide turn-key services and products.
- Access new competences and markets at international level through formalised collaboration
The availability of the LAZIO Connect business infrastructure is providing an additional benefit to the companies of the region. As a matter of fact, the availability of a structured collaboration framework is forcing companies to formalise the
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requirements for a given collaboration together with the offered competences and technologies. This can put the companies in the region in a position of actively selecting business partners belonging to different clusters and/or to promote themselves and access new markets.
- Adoption of new ways of working and of innovation management Best Practices
The perfect response to one of the weaknesses previously identified (quite traditional and consolidated modus operandi) is to adopt new ways of working and of innovation management Best Practices, as experimented all over Europe, also in different market sectors. It is felt that more openness to such new approaches to business.
Description of Threats for the Aerospace District in the Lazio Region
- Insufficient ability to operate outside traditional project typology and with operative links with R&D Centres and Universities
In order to effectively boost the GNSS downstream market in the Lazio region, there is a need of enhancing the capability of working with partners having a different background with respect to the aerospace one. In particular, integration with complementary technology (mobile technology, earth observation data, interface with existing systems on which customers’ operate) is a must and requires the ability to adopt different business languages and codes. In addition, there are no many operative links with the Universities and R&D centres, which are structured and functional to the development of new products and services (public Universities and R&D centres rely almost exclusively on public rather than private funding) and they are used mainly as an external support and manpower for already defined task.
- Restructuring of the Aerospace global sector could weaken the support of Large Industry
The companies in the Lazio region are still largely dependent upon the projects they get from the big players in order to keep the business going. The transition from a supply chain based economy to a proactive proposition of own products and service is on going and may require some time. However, the restructuring of the Aerospace global sector could weaken the support of Large Industry to the SMEs cluster and make the transition less smooth as needed.
- Recent establishment of the cluster with respect to other regions and too much bureaucracy to support cluster activities
The Lazio Connect initiative is still in its early deployment stage and the cluster as a whole needs a piloting period to fine tune and optimise its collaborative operations. This may result in some delay with respect to the needed time for having all the products and services in place for the deployment of the GNSS downstream market. In addition, the region has only recently switch to an innovative attitude (thanks to FILAS and his staff of young, open-minded professionals) and there is still a lack of quick and effective tools to support the actions that are needed to be taken to support effective cluster roll-out activities (the objective is that the association managing the cluster has to reach self sustainability in few years).
- Traditional attitude with respect to innovation from the entrepreneurs
Entrepreneurs in Lazio region are quite conservative and their category mainly dates back in the 80s and 90s with the boom of telecommunications and defence programmes. It is perceived that they consider innovation as equivalent to
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technological excellence (which used to be their main success factors in the past years), and not how to use in the smartest way the technology you have. Even though the region is pushing towards more modern approach to innovation (i.e. Open Innovation, Living Labs), there is the perception that the potential of new methods to support the innovation is not fully appreciated nor understood. It is FILAS task to make them aware of what it is happening in the outside world and how people are facing 3rd millennium challenges.
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3.3 SWOT ANALYSIS OF BAVARIA
Description of implemented activities / methodologies
As part of the INNOFIT program, a SWOT analysis is to be carried out for Bavaria as a satellite navigation location using a predetermined questionnaire. One of its purposes is to make it possible for the first time to compare the leading European satellite navigation clusters.
However, in order to guarantee comparability among the regional SatNav clusters in Europe, the concept of “satellite navigation” must first be defined in the context of this SWOT analysis.
In this analysis, whenever the term “satellite navigation” is used the branch and market structures of “SatNav applications” are meant. In other words, all software and hardware solutions which use GNSS signals for various applications in the most varied industrial and end user realms.
In this sense, “satellite navigation” is a cross-branch, intersectorial technology. It is put to use in branches as diverse as tourism, transportation (automotive, rail, aviation, shipping), logistics, defense and security, as well as in the construction industry and in agriculture. It can be described as a spin-off technology of aerospace activities (a space application), rather than an aerospace activity in its own right.
The operating infrastructure for GNSS systems (ground and space segments) are, by contrast, part of “aerospace activities.” The same is true for satellite earth observation (GMES/KOPERNIKUS), satellite development and manufacturing (including small- and micro-satellite construction), and for satellite launcher systems. It hardly needs mentioning that basic aviation and space systems are not part of satellite navigation either.
Although Bavaria has to be numbered among the internationally prominent aviation and aerospace regions also in these areas (with over 35,000 employees, a turnover exceeding EUR 6.5 billion, and complete civilian/military value adding chains), the branch structures of aviation and aerospace activities are so dramatically different from those of satellite navigation that we do not regard a joint consideration of both branches as able to fulfill the goals of this SWOT analysis.
In order to gather the date for this SWOT analysis, a number of SME representatives and major players in the satellite navigation field as well as R&D institutions and organizations were questioned in personal interviews by the two Munich INNOFIT project partners GR-M and bavAIRia.
The questionnaire devised as part of the INNOFIT program was used as an interview guide. In addition, some supplementary results from location studies previously carried out by the bavAIRia team were also incorporated in the analysis.
A brief, general description of the SatNav cluster “Bavaria” is first presented below, followed by a short summary of its significant strengths and weaknesses, opportunities and threats.
General Description of the Bavarian Satellite Navigation Cluster
The Free State of Bavaria is one of the internationally leading locations in satellite navigation. The young industrial sector of satellite navigation employs about 1,500 staff in more than 120 companies with an annual turnover of about EUR 350 million. Bavaria is one of only a few locations internationally which cover the satellite navigation branch, encompassing the entire value adding chain including all levels of the supply chain. Key to the Bavarian success story
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is the close cooperation of a large number of satellite navigation firms, also with companies from other strong branches (e.g., aerospace, biotechnology, automotive, life science, new materials, robotics and mechatronics, ICT and others), ranging in size from small suppliers to large internationally operating corporations. Bavarian companies also benefit from an excellent infrastructure, comprised of 14 universities and research institutions which conduct research in all key areas of aerospace and satellite navigation and include GSOC, GCC, the GATE Test Bed and BAYNAVTECH.
At the end of 2006, bavAIRia e.V. was founded by the Bavarian Ministry of Economics, Infrastructure, Transportation and Technology (STMWIVT) as the central cluster management organization. Within the Bavarian cluster initiative and as part of the initiative “Allianz Bayern Innovativ,” bavAIRia has been commissioned with the management of the “aerospace” and “satellite navigation” clusters. Activities of bavAIRia focus on networking among industry, research institutions and political decision makers on national and international levels. The linchpins of the bavAIRia strategy are so-called “platforms,” working groups which focus on a specific topic (for example, railway technology, logistics, traffic, GIS/land usage, robotics, security, UAV, engineering, engine manufacturing, instruction and training, and others). To date, bavAIRia has built up about 20 of these platforms in close cooperation with Bavarian companies. These can be compared with communities of practice. The aerospace and satellite navigation sectors are too complex for cluster get-togethers to be fruitful, as they would inevitably need to be thematically vague.
Platforms may not only cover themes within one cluster—there are also platforms which transcend cluster boundaries. Platforms are used to forge connections between representatives of industry and research institutions within the cluster, and also to connect them to other business development entities (for example, other clusters) in Bavaria, Germany and abroad. In addition to the platforms, bavAIRia has developed a marketing and communication strategy in order to generate public awareness and interest with regard to the economic potential especially of the young satellite navigation sector and in order to inform companies and research institutions about the available platforms and the benefits arising from membership.
The central regions for Bavarian satellite navigation are Munich, Nuremberg, Würzburg and their environs.
SWOT Analysis and report
The most important opportunities and threats, strengths and weaknesses presently confronting satellite navigation companies in Bavaria are described below. This information is based on a combination of the results from a questionnaire-based survey of companies, other bavAIRia analyses, and an examination of the present market situation. The purpose of this section is not to provide the reader with a scientifically precise concise study, but rather with a well-founded general informative overview of the topic.
First of all, the strengths and weakness of the Bavarian satellite navigation cluster will be described below, followed by a critical examination of the opportunities and threats.
Description of the strengths of the Bavarian satellite navigation cluster
- Coverage of the entire satellite navigation value adding chain
The Bavarian satellite navigation companies convincingly encompass all links of the SatNav value adding chain in the most varied application branches.
On the part of the companies there are several international key enterprises which are very broadly conceived to deal with virtually all parts of the value adding
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chain. On the hardware or receiver level this includes, for example, eRide and Tyco Electronics; in the area of services EADS Astrium, IfEn and ESG can be mentioned. Other key companies are, for example, IABG, LogiCom, ProTime, Elektrobit (3Soft), Rohde & Schwarz, Kayser-Threde and AWTC Europe. The value adding chain is complemented by various service providers in the areas of financing and insurance, such as SpaceTec Capital Partners, who have positioned themselves as venture capital providers in the area of satellite information services.
- An excellent SatNav research environment
Particularly in the Munich area, the Bavarian research environment offers a concentration of SatNav-relevant research institutions which is rare on the international scene. It is composed of 14 research institutions and universities. These include the two German elite universities TU Munich and LMU, two Fraunhofer institutes, and in Oberpfaffenhofen (south of Munich) the largest DLR complex in Germany. Here, DLR can draw on over 30 years of experience in the area of high precision GNSS time synchronization, the basis of satellite-supported navigation. Already in 1981 it also developed a GPS receiver there, and the European SatNav supplemental system EGNOS is based on patents from DLR Oberpfaffenhofen.
Bavarian science institutions have expertise throughout the entire technical range of satellite navigation, from the optimization of signal processing to integrated systems which incorporate the most varied positional and signal transmission systems. Besides GPS/ GLONASS/ KOMPASS/ GALILEO signals, EGNOS and D-GPS, these also include, for example, RFID and GSM tracking. In the further development of these basic technologies for specific application fields such as robotics, transportation and logistics, and security, Bavarian institutions have a high standing, also internationally.
As to teaching, a number of courses of study which concentrate on satellite navigation have been established at Bavarian universities.
Description of the weaknesses of the Bavarian SatNav cluster
- Small size and inadequate financial strength of the SatNav companies
The satellite navigation cluster is still a very young cluster. Most of the companies are less than ten years old, although research in these topics has been going on for over 30 years. The youth of the branch is reflected in the start-up character of many of these companies; the majority is SMEs.
With an average of 12 employees and an annual average turnover of EUR 2-3 million, these companies have such a low “critical competitive mass” that their international competitiveness is based exclusively on technological niche know-how.
Medium-sized business and even large companies are also involved in satellite navigation, but it usually represents only a small part of the company or involves only one department, which explains the low number of employees in Bavaria. Only some 20% of the companies are dedicated satellite navigation businesses, and these are exclusively small start-ups; the other 80% are conglomerates active in a number of different fields. Accordingly, satellite navigation is often a very small and young field of business.
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- Only minimally linked supply-chain structures
Because of the youth of the cluster, linkage to customers and suppliers is at an early stage of development. At present the market is oligopolistic, i.e., a decentral
network characterized by a wide range of customers from various application fields. The most important customers are DLR, EADS Astrium, automobile firms and suppliers, government ministries and offices, and ESA. Thus a SatNav “community” is only beginning to emerge. Managers usually have only a small and weakly connected network available in the branch and are in urgent need of a cluster management which as a central contact point can provide transparency and reflect a wide range of activities.
- Too strong a focus on technological development areas
The Bavarian SatNav companies put a clear emphasis on technical R&D activities. This is not surprising in light of the youth of the branch and its extent of development, but it means that marketing and customer orientation are only partially in the focus of company activities. This brings with it the risk that technological product development does not meet actual customer requirements.
- Weak networking among the companies and with R&D institutions
Despite the excellent research infrastructure in Bavaria, the extent of networking in the R&D area between the SatNav SMEs and research institutions is relatively low.
The reasons are complex and range from fear of unwanted technology transfer to potential competitors to uncertainty about how to initiate cooperative agreements to a lack of marketing expertise.
This is where the cluster application forums are positioned; for two years they have been successfully linking companies and research institutions and making cooperation possible.
Description of the opportunities of Bavarian SatNav cluster
- Various strong technology-related branches
Satellite navigation is a cross-branch technology which is relevant for the most varied areas of diverse branches.
In many branches, Bavaria is one of the internationally leading industrial locations, for example for automobiles, machine construction, aerospace, life sciences, environmental technology, etc. There are accordingly excellent local opportunities for the SatNav companies to find new customers and with these customers to develop locally SatNav solutions tailored to specific branches.
- An excellent infrastructure
Bavaria has a satellite navigation infrastructure almost second to none worldwide:
• The GATE control center for the GALILEO test bed in Berchtesgaden is financed by DLR Oberpfaffenhofen. Genuine GALILEO signals from six ground signal generators can be received in Berchtesgaden over an area of about 65 km2. GALILEO users as well as software and hardware developers can test their applications and equipment under realistic conditions.
• Currently, one of the two control centers for the GALILEO satellite
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system (GCC) is being established in Oberpfaffenhofen. This infrastructure for satellite navigation is actually located at an aerospace facility. On the one hand this points out the importance of aerospace in Bavaria, and on the other hand the establishment of the GCC also calls attention to the significance which the Bavarian government attributes to the young high-tech branch of satellite navigation.
• European Satellite Navigation Industries (ESNIS), a European consortium to develop the GALILEO infrastructure, was originally based in Ottobrunn (as part of the aerospace branch, but with relevance for the satellite navigation cluster). Building on the new decision basis for further GALILEO commissioning on the part of ESA and the EU, the ESNIS project management has been transferred to ESA.
• BayNavTech in Ottobrunn is a competence and technology center for satellite navigation. One of the functions of BayNavTech (or the Performance Evaluation Center PEC) is to guarantee the performance testing and monitoring of satellite navigation signals, systems and services. In addition, BaynavTech provides a simulation and analysis environment for the further development of satellite navigation systems, makes available development support services, and verifies hardware and software for generating and processing navigation signals.
• Sophisticated startup infrastructure: financial support programs, technology and entrepreneur centers, technology transfer and consulting centers (especially under the Chambers of Industry and Commerce for Munich and Upper Bavaria, and for the city of Munich). There are, in addition, four so-called incubators, two of which are relevant for start-up companies in the satellite navigation branch: the Garching Technology and Entrepreneur Center GATE, UnternehmerTUM (associated with Munich Technical University), and the Oberpfaffenhofen applications center AZO. On an area of 2,000 m² the incubator accommodates 14 companies which are primarily engaged in satellite navigation and communication as well as in geoinformation technology and services.
• The Munich Satellite Navigation Summit has developed into an internationally leading trade fair for the satellite navigation branch, complementing ION in the USA.
• A SatNav Summer School is organized by the Institute of Geodesy and Navigation of the Universität der Bundeswehr, Neubiberg, in cooperation with Stanford University and the Institute Superieur de l`Aeronautique et de l`Espace, Toulouse. bavAIRia is a sponsoring partner of the Summer School.
• The successor trade fair, SYSTEMS, has a Satellite Navigation Area at which satellite navigation companies can present their achievements each year.
• With the ESNC (Galileo Masters Competition) of AZO a SatNav network has been created which is unique worldwide and generates innovative GNSS applications by providing access to special-topic sponsors.
• And finally, the infrastructure measure of the Bavarian government, the
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cluster offensive which also includes the founding of bavAIRia e.V, should be mentioned. This infrastructure measure can successfully increase national and international networking, consultation, and the coordination of financial support also for companies active in satellite navigation.
Description of the threats of Bavarian SatNav cluster
- Lack of engineering expertise
The SatNav companies employ academics to 80%, 60% of whom come from the engineering sciences and 20% from other technical academic fields. According to general labor market studies, particularly SMEs with high R&D expenditures are confronted above average with the problem of a lack of technical expertise available on the market. On the one hand, this is because these companies are not very well known, and on the other hand because of the high qualifications possible candidates must meet and the limited training capacities of these company. As a consequence, especially the small SatNav companies are hindered by the increasing lack of experts particularly in the engineering disciplines. Already now, about 42% of all SatNav companies fear that internal innovation and growth processes could be delayed by a lack of sufficiently qualified staff.
- Market uncertainities after the new Galileo invitation to tender
The delays experienced by the GALILEO program in recent years have led to an image loss and to uncertainties on the part of SatNav companies and their customers. This has in some cases led customers to cancel or delay their SatNav involvement. Although there are no recent surveys on the economic consequences of these delays, the image damage has been immense according to many Bavarian companies.
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3.4 SWOT ANALYSIS OF PRAGUE
The below given description and SWOT analysis is based on the combination of survey using the agreed questionnaire, analysis effected by the authorities and institutions active in the SATNAV field and overview of the current market situation. The analysis starts with a brief overview of the strategy, main stakeholders and activitites of the cluster followed by the SWOT analysis itself.
Strategy
To describe the current situation in the Czech Republic we adapt the following procedure recommended on website of VE-Forum:
Implementation of this procedure arising from detecting following subjects:
• Czech companies in the satellite navigation sector • Czech clusters in the satellite navigation sector • European SAT/NAV clusters with relation to Czech companies • Czech non-governmental organizations supporting investment and innovations • Czech governmental organizations supporting investment and innovations • European organizations.
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The basic information and data for this period are getting from information sources of the Mi-nistry of Trade and Business, professional associations. Information about companies are archived in the database of Czech Space Office.
Basic Overview of the main actors in the field of Satnav
Currently the activities related to space and Satnav are mainly represented by the following stakeholders:
Czech companies of the satellite navigation sector:
• Honeywell
• INTV Satelitní komunikace
• Telenor Network
Czech SAT/NAV clusters (CITT cluster Prague)
• Czech Space Office (cluster administrator)
• Telematix
• Eltodo
• UniControls
• Princip
• I.C.E.
• Lesprojekt
• Sprinx Systems
European SAT/NAV clusters relating to the Czech companies:
• ERA-STAR
• CASTLE
• AZO
Czech non-governmental organizations supporting business and innovations:
• Association of small and medium-sized enterprises of the Czech Republic
• Conferderation of Industry of the Czech Republic
• Moravia-silesian electrotechnic Association
• Association of innovative entrepreneurship of the Czech Republic
Czech governmental organizations supporting business and innovations:
• Ministry of Industry and Trade
• Ministry of Education, Youth and Sports
• Ministry for regional development
• Czech-Moravian Guarantee and Development Bank
• Investment and Business Development Agency – CzechInvest
• Czech Trade Promotion Agency - CzechTrade
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European organization:
• ESA (European Space Technology Platform)
Strategic focus to assure the right level of
• Data platform of Czech companies in the field of satellite navigation
• List of Czech SAT/NAV clusters
• Analysis of the process relating to the support of undertaking of Czech SAT/NAV companies
• Roadmap to support undertaking of Czech SAT/NAV companies
• Suggestions to improve existing proceeding of Czech and European institutions
• Handover of information about companies and of the support of SAT/NAV under-taking in the Czech Republic to the partners of the current project
Major stakeholders active in the clustering activities in relation to the SATNAV sector
The following entities represent the mainstream of actitivities in the field of interest.
- Czech Space office -. The national contact point for Galileo related activities
- Association of transportation telematics
- Technical Universities and related incubators and innovation centers supported by major companies, e.g. in Microsoft innovation center in Brno supporting new applications in the satelite navigation mainly related to portable devices.
- Business Tuesday – IT related network with active workgroup of Venture capitalists, major multinationals developing mobile applications including SATNAV and location based opportunities.
These activities are described in more details below.
Czech Space office
Czech Space Office is a non-profit association. It was created in November 2003. The Czech Space Office is the central contact point for the coordination of all space-related activities in the Czech Republic. It fulfils tasks of the national information and advisory centre on opportunities to enter the international space scene and about space activities in the Czech Republic. The CSO makes the portal to the international space community for Czech science, R&D and business sectors.
Activities and services include:
• supporting the participation of Czech researchers in international space collaborations,
• managing the relationship with ESA and contributions of the Czech Republic to ESA programmes,
• providing information and consulting Czech parties concerned in space-related project specification, establishing contacts with cooperation partners and support in technology transfer activities,
• facilitation of the space industry development and implementation of space applications through providing dedicated training opportunities
• elaboration of the Czech Space Programme,
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• representing Czech Republic’s interests in official European space-related establishments as GAC, HSPG, FP7-Space Programme Committee, Working Group GEO/GEOSS,
• membership at IAF, ESTP and EURISY organisations,
• national contact point for Galileo,
• Student and outreach activities.
To reach those objectives, the CSO organizes seminars and workshops for professionals from various fields of space activities, as well as educational and public events devoted to space related topics.
The Office closely cooperates with the Czech Ministry of Education, Youth and Sport, which is a governmental body responsible for space activities in the Czech Republic. CSO provides administrative, technical and professional support to the Ministry required for different space related tasks and decisions. It also prepares meeting of the Czech Board for Space Activities (CBSA) and corresponding documents. CSO coordinates and administrates projects in ESA programmes and evaluates results of the cooperation for the Ministry. CSO also represents the Czech Republic in a High-level Space Policy Group chaired by EC and ESA. Finally, CSO is as well a member of the European organization EURISY promoting education and information about space technology and its applications, and a national point of contact for the World Space Week - a worldwide UN space outreach activity.
The CSO's work includes gathering and archiving information about Czech space projects as well as the information on foreign space programmes having importance for development of the Czech space activities. It covers management of databases of the Czech institutions both academia and industrial and data on space projects being undertaken in the Czech Republic, their status and results.
The office offers help and provides projects preparation consultancy, advises SMEs to incorporate into international high technology networks and to search for partners in international space projects. It supports relationships between research and industry.
Moreover, the Czech Space Office also offers information on the Czech space activities and advertises their results inside and outside the country. It arranges seminars and conferences and supports the attendance of Czech institutions and firms in specialized exhibitions dealing with space technologies.
All the CSO work is based on collection and maintenance a database containing data and information about space projects, results and activities of relevant organizations having relation to cosmic activities (presently database includes more than 200 industrial firms).
Last but not least, CSO serves as information point for general public as well as for professionals. It prepares information and advertisement materials describing capacities and potentials of the Czech Republic in space, documents about Czech space activities and their results. It also communicates examples and information on benefits of the space projects to schools and media.
Abbreviation used: CSO – Czech Space Office ESA - European Space Agency ESTP - European Space Technology Platform GAC - GMES Advisory Council GEO - Group on Earth Observations
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GEOSS - Global Earth Observation System of Systems HSPG - High Level Space Policy Group IAF - International Astronomical Federation
Association of the transportation telematics
Mission
association of companies, institutions and universities from the Czech Republic and Slovakia, focused on telematics and navigation including information, communication technologies and services (ITS) in transportation and other sectors. The mission is: Representation of Czech & Slovak ITS
Strategic marketing & product development International co-operation Assistance to Eastern European ITS initiatives Education & training of ITS professionals, users Co-ordination of members' projects ITS projects support via working Gross
Joint Industry Portfolio
Sensors & actors: gate crossing signals, cameras, active and passive detectors, radar
Positioning: GPS, Glonas, Galileo, EGNOS, gantry systems
Data processing: GIS, billing, management, expert systems
End user devices: on-board units, chip-cards, user terminals
Services: technical, financial consulting
ITS Fundamentals
Transport Telematics (ITS, Intelligent Transport Systems and Services) integrates information and telecommunication technologies with transport engineering under the support of
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other related industry, in order to provide for the existing traffic infrastructure an advanced system of control of traffic and transport processes – enhancing the transport performance, traffic efficiency, road safety and comfort of transportation etc. The main objectives of transport telematics is to offering of intelligent services, which must be considered at several levels: for travellers and drivers (users), infrastructure administrators, transport operators (carriers), security and rescue system, financial and control institutions. The basic components of transport telematic systems include the following fields:
Electronic payments Management of security and rescue measures Management of traffic processes Management of public passenger transport Support at management of means of transport Support of people’s mobility Support of supervision over adherence to regulations Management of freight transport and forwarding agents Transport and traffic data base
Facts & goals Founded in 2000
More that 70 companies, institutions on board as regular members
Fast growing
The main goal of ITS&S, the Association for Transport Telematics, is to achieve fast development of transport telematics in the field of roads, railway, waterway and air transport by providing technical, economic and ecologic benefits to a society and also to association members. ITS&S provides mainly a communication infrastructure to its members, therefore most of the association projects are in fact joint projects of a subset of the association member's companies. Some examples of joint projects are provided below: Main networking projects
ITS Prague conferences NavAge Prague conferences
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ITS Bratislava RoSaLINE conferences (Slovakia)
Digital Maps - regular meetings of the Czech professional community
Czech Industry promotion
Czech TeAm (Bulgaria and other countries)
Consulting projects
Czech strategy of electronic ticketing in public transport Evaluation of the efficiency of the tolling systém e-vignette feasibility studies
R&D projects
EFC (implementation conditions in the Czech Republic) RDS-TMC (research and field tests) ITS National Architecture (project name TEAM) GALILEO (5-year application project)
Pilot applications
Field tests of RDS-TMC in Prague region (2004) Safe Road Tunnels (three tunnels in Prague)
Standardization
Chair of national group CEN/TC278 and ISO/TC204
Chair of standardization committee TNK136 "Road Telematics"
Example of activity led by workgroup focused on SATNAV
Digital Maps and Traffic Information The working group Digital Maps and Traveller was set up as an open platform for solution of issues related to this topic. It includes provision of support, coordination and exchange of information
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when undertaking significant projects in the field of design and application of map data, navigation systems and traveller information (Navigation map of the Czech Republic, RDS-TMC systems and other). It is also the efforts of the working group to keep informed the wide professional public and the professional guarantee in national and international activities. Navigation systems use especially satellite positioning and are a fundamental and necessary component of control and optimisation of extensive traffic and transport processes. Accurate, reliable and safe knowledge of position of a vehicle, freight or user together with additional elements of navigation systems (digital map data, up-to-date traffic information, identification systems etc.) will enable application of logistic algorithms that have a direct economic impact on the price for the traffic and transport process with relation to further sustainable growth of traffic and transport. Advanced navigation systems are based on the parameters of the future European system Galileo, which will enable applications with higher security demands such as navigation systems for security and rescue forces, crisis management of cities and regions, monitoring systems for transport of dangerous freight etc. As the signal of the Galileo system will be secret, the navigation services will be usable also in systems of electronic toll collection, payments for parking etc. At the same time, these navigation systems will be also applicable to navigation of pedestrian users including navigation inside buildings, navigation of handicapped people etc. In studies elaborated within the framework of the Galileo project, navigation services were identified as the most expanding sector in Europe and the price share of such services in the future will more and more dominate over the price share of end devices of on-board and user units. The thematic part deals with integration of particular navigation services on the basis of specific requirements, including their application in superstructure telematics systems.
SWOT Analysis
Strengths
- existing and continuously growing community of actively involved stakeholders
- existing link between multinationals, SMEs and Academia
- identified competencies within the SME, Academia and university levels with committed and knowledgeable development teams
Weaknesses
- fragmentation and insufficiently developed and applied spirit for joint efforts and common vision activities together with other companies and institutions
- lack of experts able to cover both technologies, project management and business development areas in order to be to meet the current market opportunities
- SATNAV and space related activities often considered as a part of “rocket science” only for selected experts instead of great opportunity for SMEs
Opportunities
- Czech Republic became an official ESA member which opens vast opportunities for the long term and stable market and development of the sector
- The main wave state support programmes in combination with the EU structural funds will reach the peak soon which will create strong growth potential at least over the next 5 years
- Technology based companies increase their activities in the field of knowledge based economy despite the overall economic situation
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Threads
- The high dependency of the Czech economy on the car production industry representing over 20% of GDP might negatively influence the general economic climate for new development projects.
- Change of the government does not provide clear guarantees that the identified economic reforms would be effected within a defined timeframe
- Low number of effective projects generated by local companies
Next steps and concrete future action
To establish a strong organization that would cover GNSS (and Space), Industry and Institutions in order to improve the information flow either internally or within the European and World community.
Czech Space Office currently moderates the discussion in order to get MoU signing. MoU should involve the project experience on the field of communication and project management. This organization should be composed of these three entities:
− Czech Space Alliance (CSA) www.czechspace.eu
− Association Of The Aviation Manufacturers (ALV)www.alv-cr.cz/index.php?lng=en
− Transport Telematics Association (SDT)www.sdt.cz/intro.php?&lang=en
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Conclusion
- South Holland
Inherited from long history of space technology, it makes “South Holland” become a pool of various skilled personnel, and knowledge, which are key input factors in building industry/region competitiveness. However, these factors cannot guarantee the growth and success of an industry in a region. The lack of clustering, like the interaction between stakeholders, the exchange of information and knowledge, might weaken the strength of industry development that accumulated by inputs factors.
On the other hand, the thriving supporting clusters might be promote the development of Satellite Navigation in “South Holland”, if we could synthesize the strengths, and opportunities, and address the challenges of first mover competitor from the Unit States.
- Munich
Bavaria as a location of satellite navigation activities is one of the leading SatNav locations worldwide because of its excellent infrastructure (based on the timely involvement of the state government in this area), the number of highly motivated companies, and the presence of other branches of the economy which strongly enhance and support satellite navigation.
However, the weaknesses are still serious enough—especially relating to the long-term competitiveness of this very fragmented branch with its start-up character in Bavaria—to require vigorous coordination and support provided by a Bavarian cluster management over the next few years.
- Lazio region
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LAZIO Cluster SWOT analysis
Strenghts Weakness
Opportunities Threats
TECHNOLOGY: Strong experience and
historical background in the wide aerospace
sector
MARKET: Support activities sponsored by
the region to match offer and demand
CLUSTERING: Availability of business
collaboration infrastructure.
INNOVATION: Awareness and willingness
at Region level to adopt Open Innovation
Mechanisms (Living Labs)
TECHNOLOGY: Supply chain mentality
and insufficient focus on R/D
MARKET: Lack of user-oriented culture and
inability to transform technology into
innovative product.
CLUSTERING: Insufficient size of the
SMEs players.
INNOVATION: Low capability to manage
IPR formalisation and protection
TECHNOLOGY: Presence of a fertile ecosystems, suitable for aggregating
different competences and organisations,
including R&D centres and Universities.
MARKET: Availability of some basic infrastructure (i.e. Galileo Test Range)
CLUSTERING: Access new competences
and markets at international level through
formalised collaboration
INNOVATION: Adoption of new ways of
working and innovation management BP
TECHNOLOGY: Insufficient ability to
operate outside traditional project
typologies and sectors
MARKET: Restructuring of the Aerospace
global sector could weaken the support of
Large Industry
CLUSTERING: Cluster organisation young, bureaucracy to support cluster activities
INNOVATION: Traditional attitude towards
innovation from the entrepreneurs
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ED
ED
Prague The existing infrastructure, interested stakeholders and the market opportunities represent a considerable potential for the future growth. In order to use and realize this potential it is necessary to overcome the identified weaknesses, threads and other barriers. The current project and the opportunity to share the experience and information with major SATNAV regions represent the basid for this effort to succed.
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4. IMPACT AND PERFORMANCE MEASUREMENTS OF
DEMAND CREATION MECHANISMS
The objective of this task is to evaluate the effect of regional plans and policies and assess the involvement of stakeholders and to measure the impact and performance of demand creation mechanisms in European SatNav regions.
4.1 IMPACT AND PERFORMANCE MEASUREMENTS OF DEMAND CREATION IN
SOUTH HOLLAND
Introduction
To achieve the objectives which are set in this task – evaluate the effect and impact of existing regional plans and policies, asses the involvement of stakeholders within Satellite Navigation clusters, 21 interviews with representatives from different entities are expected to be conducted.
Interviews Summary
The Organization where representatives come from Number of Representative
Business Service Provider 1 Rep
University 2 entities 1 Rep from each
Incubator 2 Rep
Research Institute 1 Rep
Venture Capitalist 1 Rep
Start up (Younger than 2 years) 4 entities; 1 Rep from each
SMEs (10-249 employees) 3 entities, 1 Rep from each
Large Companies (>250 employees) 2 entities, 2 Rep from each
Government 1 Rep (Industrial Policy maker)
Regional development agency 1 Rep
Cluster management association 1 Rep (Cluster manager)
Technology Transfer Center 2 Rep
Two sets of questionnaire are used, of which, one is for Cluster manager, industrial policy maker, while the other one is for cluster members. For the details of these two questionnaires, please refer to the Appendix. All the name of specific entities, interviewees are showed as capital letter for confidential reason.
Some economic figures about South Holland
Some economic figures
Population 3,455,097(South Holland Province till 1st of Jan 2007)
The number of start-ups in 2005 87299 (cbs*)
Unemployment rate in 2008 2.7% (cbs*)
Percentage of non-dutch of whole population
in 2008
4.1% (cbs*)
Propensity towards entrepreneurship in 2007 35% (cbs*)
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*Due to the availability of statistics data and the porous boundary of the area we are studying, some figures addressed here
are for the whole country
*CBS: www.cbs.nl the website of Statistic Netherlands is responsible for collecting and processing data in order to publish
statistics to be used in practice, by policy makers and for scientific research
To some extent Holland is a less entrepreneurial countries in Europe comparing with Germany and Italy, a survey conducted by European Commission in 2007 shows that 35% of people interviewed prefer being an entrepreneur over being an employee by asking a question “Suppose you could choose between different kinds of jobs, which one do you prefer:….being an employee, being self-employed, one of these. The share of propensity towards entrepreneurship increased constantly in past six years, from 30% in 2002 to 35% in 2007 (the figures for 2005 and 2006 are not available). While the percentage were 55% and 39% in Italy and Germany separately. In 2005, the number of start-up is 87,299 in the whole Holland; while the number of enterprises went bankrupt were 56,388.
Turning to venture capital investment, in 2006, the venture capital made available to companies was 0.103% of gross domestic product, while Germany, Italy and Czech Republic were 0.044%, 0.079%, 0.001% separately. With respect to another factor, Job mobility (the indicator is the number of years that people have worked in their current job) which is considered as a crucial prerequisite for regional innovation, it seems that Holland has less Job mobility comparing with other countries, the numbers of Holland for 0-1 year, 1-3 years, and 3-5 years, are 8.34%, 11.04%, and 13.15%, while Czech are 11%, 12.27% and 13.57%; German are 14.25%, 11.94% and 11.47%; Italian are 11.08%, 10.63%, and 11.88% in 2006
The unemployment rate in 2008 was 2.7%, we got this figure by dividing unemployment labour force (ULF: Persons who have accepted work for at least 12 hours a week, or willing to work at least 12 hours a week, who are available and actively seeking work for at least 12 hours a week) with total population aged 15-64 (All residents of the Netherlands in the age category 15-64, excluding persons in homes and institutions.) among the whole population, 4.1% are non-dutch in 2008.
“South Holland” in this report doesn’t refer to the traditional geographical or administrative district, there is no formal identity, no borders can be found. However, given the most of the stakeholders we interviewed were located in administrative South Holland Province, and for the availability of statistics figures, the majority of regional information in this report are based on South Holland Province.
South-Holland is located in the mid-western part of the Netherlands with a population of 3,455,097 till the first of Jan 2007, the international population accounts a large share, take Leiden as an example, it’s a city with highly diverse population. Residents represent over 200 nationalities. 25% of the population are non-native dutch1.
It is one of the major employment centres in the Netherlands which is “hotbed” for a number of industries include manufacturing, construction, communication, transportation and life sciences. According to Clusterobservatory Project (http://www.clusterobservatory.eu), the Satellite Navigation relevant clusters (Entertainment, Finance, Transportation, and ICT) are well developed within this region. In addition, South Holland is also a pivotal especially in Space, and space related technology, a number of top research centers, education institutions. However, comparing with these clusters, Satellite Navigation is still a fledgling and emergent one.
Environment of South Holland for Satellite and Navigation
Generally speaking, South Holland is a region full of Satellite and Navigation related knowledge and scientists, researchers. One of the top space research centres-ESTEC (The European Space Research and Technology Center), and one of the top Aerospace Engineering University- TUD (Delft University of Technology) are both located in this region. In addition to these two research and education institutions, research and education institutions like TNO, Rotterdam school of management, Leiden University, Amsterdam University and the others’ role can not be neglected as well.
However, abundance of knowledge and skilled person don’t bring a flourish industry automatically. In contrary to prosperous Satellite Navigation related research activities, the business side, the established players do not yet strongly engage in satellite navigation application development. The end-users don’t have clear demand on it except the location based service like PNDs (Portable Navigation Devices). However, young and enthusiastic entrepreneurs start to act in this field.
The activities of Satellite Navigation business in South Holland might be promoted or stimulated by the well developed cluster within the regions. The respondents indicate some traditional space actors located in the cluster. The cluster and its surrounding regions offer diverse and challenging market opportunities for road transportation, tourism, maritime industry, agriculture, health, construction, and defence application.
Key Players within Cluster
1) ESTEC, The European Space Research and Technology Centre in Noordwijk, the Netherlands
ESA’s Technology Transfer and Promotion Office, now called the Technology Transfer Programme Office (TTPO), was established in 1990, which is aimed at facilitating technology transfer from space technologies to non-space application and the commercialisation of such applications. Since it began operating the TTPO has started several special initiatives.
In Nordwijk, one of the major initiatives of TTPO, ESA Business Incubation, launched in 2003, which tries to assists start-up companies to get their business off the ground by providing funding and business development assistance. Till 27th of Oct, 2008, 31 companies have completed or are doing their incubation period at ESA’s Business Incubation Centre located at ESTEC. Of which 11 start ups are under incubation, while the rest have completed. About 45% of the all business (14 of 31) is focused in Satellite Navigation or Satellite Navigation related.
Besides, a National Technology Transfer Initiatives was jointly set up in 2001 by ESA, The Dutch Ministry of Economic Affairs and the Netherlands Organization for Applied Scientific Research (TNO) with the objective of bridging the gap between the European space sector and industry players to enable an effective and efficient process for the transfer of Knowledge.
2) TNO Space Division
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TNO, the Netherlands Organization for Applied Scientific Research, is one of Europe’s leading independent research and development organizations. TNO focuses on strengthening the innovative power of companies and public and governmental organisations in many domains. TNO has over 30 years of experience in the development of innovative space technology, with dozens of satellites flying systems that were designed, built or tested by TNO.
TNO is currently closely involved in the realisation of Galileo. They have developed sun sensors for satellites and are working on receiver technology and the certification of Galileo, to guarantee that it will function as specified.
They are in cooperation with Dutch and other European partners, and track record in navigation systems, verification and certification, receiver technology, cost modelling and emergency management to provide an excellent basis for the possible users of Galileo, including software houses and service providers, who have a need to know the requirements of the end users.
3) TomTom
A company specialized in Portable Navigation Devices (PDAs) and software for use on PDAs and smart phones which was found in 1991 and publicly listed in 2005. It is a digital mapping and routing company that focuses on car navigation and aimed to gain competitive advantage through superior products, a leading brand and a flexible production structure. They deliver Maps through a combination of high quality map data base that is continuously kept up to date through input from our extensive fleet of surveying vehicles and large community of users; they deliver Routing through the world’s largest historical speed profile data base and real time traffic information services. Together this enables TomTom to offer cutting edge navigation solutions that can be used on different hardware platforms.
TomTom is a market leader in Portable Navigation Devices (PNDs) with more than 3,500 employees and five business units include TomTom, Tele Atlas, Automotive, Mobile and TomTom WORK.
IN 2008, TomTom navigation products are sold in 30 countries (and over 20 languages). TomTom has offices in 17 locations in Europe, North America, Asia and Australia. Tele Atlas provides maps including detailed street-level and interconnecting road networks for 73 countries. The revenue in 2007 is €1,737 million.
4) NIVR (Netherlands Agency for Aerospace Programmes)
NIVR ( Netherlands Agency for Aerospace Program), a network organization, which acts as an intermediary between knowledge providers like scientists, users of knowledge like companies, and infrastructure providers including government and other organisations.
It is aimed at promoting the development in the fields of airplane construction, airplane exploitation , and SatNav industry via granting assignments, financial resources and supplying information on the relevant field, and through implementation of subsidy schemes on behalf of governmental bodies.
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The performance of SatNav Cluster in South Holland
Being on the early stage of SatNav industry, no governmental apartment or office was set up to collect or gather economic figures to trace the development of SatNav industry in Netherlands. Besides, SatNav enterprises are embedded in different industries like logistics, transportation for instances. The boundary of SatNav is overlapping with other. Both make it difficult to obtain official statistic data on the performance of SatNav industry in South Holland.
Only 40% of the respondents perceive the firms/institutions on the field of SatNav within South Holland as competitive, 40% shows neutral attitudes towards the argument that “Overall the firms/institutions in the cluster(region) are very competitive”, 20% doesn’t know. At the same time, the respondents’ feedback on the argument, “Overall the firms/institutions in the cluster (region) are very innovative”, is divergent. The answer was distributed over the options (Agree, Disagree, Neutral, Don’t know) averagely.
Only 20% of the respondents perceive that information on the SatNav activities of the cluster (region) is not hard to obtain. Around 40% respondents believe that the firms/institutions in the cluster (region) know each other. More than 50% of respondents think that the cluster firms are successful both in translating market into new products, and translating technical advance into new products.
As mentioned above, no official data on the economic performance were collected, but the respondents’ perception indicates that the absolute and relative contribution of satellite navigation applications to the regional GDP, employment, and the number of start-ups and co-operations increased constantly. As to the European market share: most of the members don’t have a clear perception on the cluster’s share in the European satellite navigation applications market.
The Performance of Best practices
- The Innovation Voucher
As we addressed in Del 2.1, Innovation Voucher is a Dutch policy instrument which aimed at bridging the gap between small and medium-sized enterprises (SMEs) and knowledge providers (like universities, research institutes and technology transfer centres).
The following information comes from the report by CPB (Comprehensive summary of Netherlands Bureau for Economic Policy Analysis (CPB) Document 140 – The effects of the Dutch Innovation voucher 2004 and 2005).
The vouchers have been allocated by means of lottery, so in principle the applicants that won a voucher and the applicants that did not win do not differ in any way, except for having a voucher. About half of the SMEs with a 2004 voucher participated in the survey. The results don’t show significant effects on product innovation, product improvements, and process innovation. But 65% of the SMEs with a 2005 voucher would not have commissioned a study if they were without voucher while 20% would have commissioned a study anyhow. 15% percent did not use the voucher.
There is also some evidence that a few of the 65% additional studies are actually studies that would have been commissioned somewhere in the future, but that have been ordered earlier because of the voucher. The input effect of the innovation voucher seems to be once-only. SMEs that won a 2004 voucher do not
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cooperate more often with knowledge institutes in the following year and a half than SMEs that did not win.
They also say that an overall assessment of the social costs and benefits of the innovation voucher policy instrument also needs evidence about the social value-added of more innovation. The study conducted by CPB did not perform such an assessment because of lack of accurate data on the value of innovation.
- ESNC (South Holland)
By the end of October in 2008, the 5th European Navigation Competition came to a close after hitting a new record with over 500 registered participants in the Galileo Master Competition.
13 European high-tech regions with 525 ideas from Asia, Europe and Australia joined the competition in 2008. Registered ideas covered the fields include gaming, location based service, health and finance, automotive, telecommunications, traffic management, environment protection, tourism, logistics and transportation and so on. The winner of 2008 was an innovative tracking system for rescuing castaways by their own crew which won in three categories: regional winner UK, special topic winner GSA and GALILEO Master. Alongside the GALILEO Master four special topic prize winners and the regional finalists from the participating partner regions were also distinguished.
A global network of high-tech regions and international experts on the field of SatNav are being enhanced by ESNC since the initiative set off by the Free State of Bavaria in 2004. This maintains a strong orientation toward industry needs and leverages its partner regions to quickly implement the numerous promising ideas emerged from the competition. The number of international experts from both research and industry side was increasing dramatically in past 5 years, from just 17 experts in 2004 to 77 in 2007.
Involvement of stakeholders
Being the core part of cluster development, networking usually is measured in terms of resources embedded in the network, the size of network, and the ties between actors within network. In this chapter, we aimed at mapping the SatNav cluster of South Holland to address questions include: who is doing what in SatNav from an industry level? How are the ties between actors within South Holland?
Mapping the SatNav cluster of South holland
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Just as the Figure shows, In South Holland area, there is no formal entity has been found during the interviews, which is in charge of the strategy position, cluster management, or transformation of cluster. However Living Lab in Leiden plays a role like cluster management association. Besides, NIVR (Netherlands Agency for Aerospace Program), is the executor for the policies issued by Dutch ministry of economic affairs (EZ). To some extent NIVR and Living Lab both act to build pleasant business environment which aimed at facilitating the development of SatNav industry in South Holland area.
Universities, research institutes are engaging in the development of SatNav industry by means of technology transfer (e.g., ESA technology transfer program), engineers education (faculty of aerospace engineering in TUD). So far, These engagements are not running in a bilateral way. A typical way for technology transfer is the technology user (most of them are from industry, and have contact with technology provider) come to Technology Transfer Program Office with a specific demand, then the technology providers take a look at the technologies on the shelf, if not, they also try to discuss with scientists whether the demand could be met.
Some incubation, collaboration programs are emerging under the lead of some key players. New start-ups, SMEs in the field of SatNav start to know other players (suppliers, service players, even competitors) but most of the players are from the same group. A dense interaction between different groups hasn’t been established.
Based on the information we got from the interviews, we have following arguments:
- The role of Anchor Company should be strengthened.
As the figure above indicates, TomTom is a big player in the field of SatNav in South Holland, however, TomTom didn’t show it’s role in the development SatNav cluster which should have. During the interviews, all the respondents admitted clearly that TomTom is a big player, more than 50% of the respondents show interest to cooperate with TomTom if it is feasible. But none of the respondents has built cooperation with TomTom.
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- Sub-clustering is emerging but different groups within the area don't know
each other well.
The figure suggests that three groups are existing, which are lead by Logica, ESA incubator, and Living Lab in Leiden. Take ESA incubator as example, number of new firms created in the field of satellite navigation technology applications and supporting services in 2008, 2007 and2006 was 6, 4, and 5. By January of 2009, eight SatNav start-ups are being incubated within ESA incubator. Some of the SatNav ventures were moved out and to other places due to scarcity of office space in ESA incubator, however all the moved-out start-ups still have regular contact with ESA incubator. But there is no interaction between these groups.
- Some positive mechanisms exist.
Innovation Voucher, IPC project are both stimulating the collaboration between knowledge provider, knowledge user (mainly SMEs, and start-ups). Free Discovery
- Better integration between venture capital and early stage financing should
be enhanced.
The picture shows that venture capital didn’t put their attention in the field of SatNav in Holland. There is no public early stage financing program only for SatNav start-ups or SMEs. How to get venture capital involved in SatNav, and get early stage financing for SatNav enterprises are still a tough challenge.
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4.2 IMPACT AND PERFORMANCE MEASUREMENTS OF DEMAND CREATION IN
LAZIO REGION
Introduction and some economic figures about the LAZIO Region in the Sat/Nav
Industry
The objective of this task is to provide an assessment of the impact achieved at regional level further to the introduction of demand creation mechanisms as previously described in T2.2 in the LAZIO region.
The LAZIO Connect initiative and the Frascati Living Lab were selected as Best or Good Practices for demand creation mechanisms at regional level and were detailed described in previous sessions.
In order to identify which criteria can be used in providing an assessment on that and to compare the benefits achieved with respect the current status, a description of the operative living scenario of the Lazio Region is hereafter given: improvements has to be measured starting from this basic scenario.
The data hereafter provided to describe the Lazio Aerospace cluster are derived from the documentation officially issued by the Italian Government in their bid to win the GSA headquarter premises to Roma and are therefore official.
The European aerospace industry, although smaller than that of the USA, has a position of leadership in product development and in other specialized fields.
Italy is the 3rd contributor of ESA and one of the most important players in the European space programs and occupies a relevant role in the cooperation with third countries. Lazio’s aerospace vocation goes back to the beginning of the last century, and the Region is still today of great international importance in this sector.
This position has been strengthened during the last two decades by specific government commitment at national, regional and local levels. The large industrial companies and smaller enterprises operating in the Region are characterised by strong technical capabilities, high quality productivity and broad diversification in national and international projects.
Today Rome and Lazio are the seat of the first Italian Distretto Tecnologico Aerospaziale - Aerospace Technology District (DTA), a European leader not only thanks to its technological and manufacturing excellence, but also to its evident international vocation.
The Lazio aerospace industry is becoming a European cluster of excellence, specialising, among other things, in products and laboratories –such as the Galileo Test Range- that will serve the Galileo system, offering optimal conditions for the development of European Union enterprises in global markets.
The Distretto Tecnologico Aerospaziale - Aerospace Technology District (DTA) of Lazio is the result of a precise political will, in terms of public resources committed:
– DTA APQ6 Framework Agreement of 2004 committed 60 million euro of public resources which expect to generate a further 72 million euro of private funds in the aerospace sector;
– Economic, Research and Innovation Development Fund of 2006 committed 60 million euro in co-financing in favour of scientific projects, local research laboratories, local technology development;
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– Scientific Research Funds of 2006 committed 13 million euro over 3 years in favour of industrial applied research and transfer technology of Small and Medium-sized Enterprises working in high tech fields.
The Distretto Tecnologico Aerospaziale - Aerospace Technology District (DTA) of Lazio is described by the following key facts and figures:
– Rome and Lazio’s Aerospace sector: 5 Billion Euro turnover;
– 30,000 employees;
– 250 prominent sized companies concentrated in different areas of industrial expertise;
– 10 Research centres;
– 4 Technological Centres;
– 5 Universities;
– 4 Engineering Faculties;
– 12 Departments, 30 Postgraduate and Graduate courses;
– 3.000 professors, researchers and specialists involved in aerospace R&D activities.
The following major aerospace companies are located in the region:
– Alcatel Alenia Space
– Finmeccanica
– Telespazio
– Selex Sistemi Integrati
– Selex Communications
– MBDA
– Elsag
– Galileo Avionica
– Elettronica
– Galileo Industries
– Vitrociset
Most of the companies in the aerospace sector are located within the so-called “Tecnopolo Tiburtino”, which is located in the East side of Rome and covers an overall surface of 72 hectares, with a 300,000 sq.m. industrial area. It is a veritable park of knowledge and productive intelligence, dedicated to high-tech sectors and to the aerospace industry. In particular, important Galileo research centres close to Tecnopolo Tiburtino are:
– ESA ESRIN Centre for Earth Observation, which is located only 20 km away in Frascati, which has launched the Frascati Living Lab initiatives in order to bring to the market available space technology and data in the GMES domain, also suitable to be used in conjunction with sat/nav applications and services.
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– Galileo Control Centre is located 100 km from Rome in the Fucino Valley, with its headquarters at less than 5 km from the site of the proposed GSA location
– EGNOS Master Control Centre is located only 20 km away in Ciampino
In addition, the Galileo Test Range initiative has been launched, within the Lazio territory, aimed at establishing a permanent structure for the validation of the Galileo signal. The GTR was built inside Tecnopolo Tiburtino and involves also ASI Italian Space Agency, ENAV Italian Company for Air Navigation Services, and the University of Rome La Sapienza. The initiative calls for the creation of a national laboratory for experimentation and analysis of the Galileo signal, for testing and certification of user terminals and for testing and support of Galileo applications.
Finally, in this context, FILAS (the financial agency of the Lazio Region) has set up the “Centro Atena”, in charge to develop and implement policies to support the growth and development of the DTA, by means of targeted actions and initiative, one of which is LAZIO Connect. Filas manages tools related to innovation, new technologies and the net economy in order to strengthen the competitiveness of regional SMEs both in terms of regional product growth and external investment incentivation. Filas' main tasks include:
– Providing financial assistance;
– Managing special Regione Lazio funds;
– Promoting and supervising measures for the development of industrial areas and productive sectors;
– Implementing EU programmes.
The performance of SatNav Cluster in the LAZIO Region
Due to the cross-sectional character of the SatNav-Cluster monitoring of the GDP is not possible. Companies come from different sectors such as Biotech, robotics, transportation, automotive, tourism, logistics or security. Most of the existing companies have activated business streams relevant to Sat/Nav applications, so it is also difficult to say how many companies are “Sat/Nav” companies and how many people are involved in the relevant operations.
There are no special policies adopted so far by the region, specific for SatNav companies. The region supports indirectly the sector due to the infrastructure of the cluster and with some initiatives and project which have been launched in the sector (LAZIO Connect, Space2land initiative).
In general, information on activities of the cluster is not easy to obtain even though the firms and institutions in the region know each other well. The district through FILAS is also well connected with major national, European and global players in the SatNav field. Contact to other R&D institutions and clusters exist since 2005. Networks on the European level include COIN (European Commission, DG INFSO), Sidereus (European Commission) and ENCADRE.
In this context, it is worth mentioning that the strategy that the LAZIO Region is adopting to support the harmonised development of the aerospace cluster implies the development of the collaboration among the various actors present in the regional development context and the sharing of common infrastructures (like the GTR for instance), competencies and resources.
The strategy of the LAZIO Region was a consequences of the current economic texture present in the region not only in the aerospace sector but in general, composed by Small (up
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to 100 employees) and Micro (up to 15 employees) sized enterprises which was generated mainly as spin-off initiatives from the Large Groups operating in the sector, mainly belonging or derived from the Finmeccanica Group (www.finmeccanica.com). This also implies that their initial vocation was to be a node of the supply chain, without developing an autonomous entrepreneurship. At the moment, the situation has significantly changed and the majority of the companies are considering deploying their knowledge and high technology (acquired from the participation in advanced space program, often with the role of technology provider) in neighbouring market sector and, primarily, in the GNSS downstream market.
In order to do so, according to a survey conducted among some of them, SMEs expressed the following issues in relation to the above mentioned scenario:
– They have insufficient technical resources to cover the whole lifecycle of a new product / service and insufficient financial resources to support it due to their limited size;
– They lack competencies for “sensing” the market, and they do not know whether an idea is worth pursuing or not. They need both demand creation mechanisms and market validation processes, in order to minimise the risks associated to the conduction of new projects;
– They are not sufficiently prepared to access complementary resources at international level. They lack business intelligence, but also a structured business taxonomy suitable for seamlessly integrating with new partners.
The response of the region to those needs was to promote the collaboration and synergies between the different companies of the regions, so that they can overcome the above mentioned perceived gaps. The table reported below shows how the region strategy contributes to overcome those gaps.
Gaps Element of
the
regional
strategy
Remarks
Insufficient ability of vertical integration of complementary competencies at SMEs level. Lack of legal competencies necessary to manage IPR and to leverage background information;
Collaborative Networks of SMEs
SMEs must be organised in collaborative networks, which can aggregate pools of complementary resources and competencies relevant to the identified market. The legal framework of the collaborative network of SMEs protects IPR and addresses the allocation of the generated ones
Insufficient capability of accessing new partnerships, complementary competencies and technologies, especially at international level.
Collaborative Networks of SMEs
The availability of a structured collaboration platform can increase the credibility of the member of the network and facilitate the collaboration (availability of references and templates)
Lack of mechanisms and processes for the validation of business opportunities originated by the industry.
Collaborative Networks of SMEs + Living Labs
In a collaborative cluster scenario, Living Labs can effectively stimulate a User Driven Market demand creation for new product and services in the early stages of the product development.
Strategy and relevant implementation in the LAZIO Region to support the aerospace cluster
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The Performance of Best Practices
The context of the aerospace sector in the Lazio Region is very dynamic yet complex and it is therefore not easy to measure and correlate the outputs coming out from the various initiatives present on the territory, which had historically different origins (private, public and even international). The LAZIO region through its agency FILAS has recently put lots of effort in order to coordinate and optimise all the initiatives in the domain, not only the ones relevant to the demand creation mechanisms and the following promising results can be shown.
Living Lab in the Lazio Region
ITech is the business Incubator opened in November 2006 by BIC Lazio to support technology-based start ups. Located in Tecnopolo Tiburtino technological park in Rome, ITech makes available a broadranging and integrated system of pre-incubation and incubation services. The aim is to transform ideas and projects developed by researchers (academic/research spin off) or by the experience of the production system (technological spin off) into a new business. An agreement between ESA and BIC Lazio provides the assistance for implementation and testing phases of new business idea projects, with the aim to the identification of ESA’s skills and competences which offer a potential industrial exploitation for no space application and to the definition of the tools for the transfer of those competencies. The programme founds itself in providing the potential entrepreneurs with the economic and financial know-how of BIC Lazio in the enterprise creation sector with the technological skills of ESA. The agreement is managed by a permanent work team and it is supported by a pre-incubation structure available in ESRIN premises, in Frascati, in the context of the Frascati Living Lab.
As a result of the Frascati Living Lab initial deployment and operations, in the framework of ITech initiative BIC Lazio is assisting:
– eleven project ideas in pre-incubation phase
– sixteen new start ups in incubation phase
The above mentioned figures are very promising and testify the effectiveness of the undertaken approach. As a matter of fact, 27 potential new companies in the sector of advanced services and applications are significant even in the dynamic and consolidated economic context of the LAZIO region in the aerospace sector, increasing of about 10% the numbers of significant players and originating new jobs and wealth in domains which are additional to the ones, traditionally mastered in the LAZIO territory (such as manufacturing).
Collaborative Cluster Initiative
Added value space based ICT Applications are considered the most promising domains on which to develop the potential of the LAZIO Cluster at global level, according to the LAZIO Region.
The LAZIO Region, through its funding agency Filas, has launched a survey aimed at quantifying the collaboration potential of the district, in terms of relevant projects, by connecting offer and demand players, the latter especially in the Public Demand area (Civil Protection, Fire Brigades, Public Administration, including the main municipalities and the five LAZIO provinces.
A specific market survey has identified 12 relevant sectors, including 41 economic segment which are interested/impacted by added value space based ICT Applications.
A sample of 31 organisations, including both public entities as well as privately owned companies, have taken part in such a survey, with a view of identifying common opportunities
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in a collaborative environment. The sample of 31 organisations covers 8 market sectors, with Regional and Public Administration which constitute the 48% of the sample itself. About two thirds of the sample are organisations which are potential buyers of added value space based ICT Applications, with an already existing expenditure of 13.395 Keuro.
The survey has been conducted involving 47 people representing 31 organisations from the demand side.
The result of the collaborative effort in the LAZIO Region cluster can be summarised in the following points:
– Identification of three major platforms, for which to develop added value space based ICT Applications (“Construction planning and territory survey”, “Environment and safety” and “Transport and Mobility”).
– A shared agreement for 21 collaborative initiatives for the short period has been achieved.
– A potential regional internal market amounting to 18.613 Keuro has been identified, thus increasing by about 150% the current figure about public expenditures;
– A shared agreement for 19 collaborative initiatives for the medium period has been achieved.
In conclusion, the Collaborative cluster initiative is a significant success since has allowed the identification of emerging, unexpressed demand for added value space based ICT Applications, to be satisfied by the launch of 21 collaborative projects. This is expected to more than double existing expenditure figure for added value space based ICT Applications.
Conclusions
From an overall point of view, even though metrics are in place and are reported in this deliverable for the demand creation Best Practices reported, a model for capturing, framing and assessing the outputs of specific initiatives in the domain is still missing at overall, policy maker level. The objective should be to measure economic and social effects (wealth generated, increase in GDP, numbers of jobs created and/or safeguarded, how patents are related to the previous factors and so on) for each € spent on initiatives on the aerospace district.
A regional model to measure the effectiveness and the added value of regional initiative is felt in the LAZIO region as a priority and would be extremely appreciated as an output from the INNOFIT project. The idea of having an operative model for regions for Demand Creation Best Practices, supported by an economic model to perform evaluation associated to such Best Practices is seen as extremely useful. To this end, the LAZIO Aerospace cluster can contribute to this achievements in terms of expected benefits (and relevant metrics) which are connected to the Frascati Living Lab and to the LAZIO Connect initiative. As far as Living Lab style initiative are concerned, the following initial performance parameters can be listed as follows:
– Actual formalization of the Living Lab organisation and identification of the relevant legal entity (association, EEIG);
– Number of SMEs mobilized;
– Number of citizens involved in the activities of the Living Lab, both directly and indirectly;
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– Number of new, innovative, added-value products and services validated at local level;
– Number of new, innovative, added-value products and services identified in the co-creation process implied by a Living Lab instance;
– Amount of funding mobilized, additional with respect to the initial investments done by the local Development Agency and suitable for ensuring long term sustainability of such a setting ;
– Number of Venture Capitals and Private Equity Funds involved, willing to support financially the identified innovative start-ups;
– Number of links established outside the specific Functional Region of LAZIO, in view of promoting the access to both new competences and markets for the specific industrial sector targeted;
– Number of stakeholders involved, relevant to the specific targeted market and to SMEs involvement in the development of the relevant products and services, especially at Public Procurement level.
– Number of new, innovative education and training courses generated, suitable for supporting the operation of such demand creation mechanisms;
– Number of talents attracted and retained in the region.
As far as LAZIO Connect style initiatives are concerned, the following initial expected benefits can be listed as follows:
– Actual formalization of the cluster network and identification of the relevant legal entity (association, EEIG);
– Number of SMEs mobilized and registered to the cluster organisation;
– Number of new, innovative, added-value products and services identified by entrepreneurs, by leveraging the collaboration potential in and outside the collaborative cluster for creating new Virtual Enterprises;
– Amount of funding mobilized (for instance in terms of membership fees, sponsorships, common development projects from the EC for instance), additional with respect to the initial investments done by the local Development Agency and suitable for ensuring long term sustainability of such a setting ;
– Number of Venture Capitals and Private Equity Funds involved, willing to support financially the identified Virtual Enterprises;
– Number of operative links (entrepreneurs/users fora, specific marketing events, conventions with emerging markets) established by the Collaborative clusters with similar initiatives, in view of promoting the access to both new competences and markets for the specific industrial sector targeted;
– Number of stakeholders involved, relevant to the specific targeted market and to SMEs involvement in the development of the relevant products and services, especially at Public Procurement level.
– Amount of additional projects generated within the collaborative clusters;
– Amount of additional revenues generated for the companies of the collaborative clusters;
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– Number of jobs generated/safeguarded as a consequences of additional projects generated within the collaborative cluster.
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4.3 IMPACT AND PERFORMANCE MEASUREMENTS OF DEMAND CREATION IN
BAVARIA
Introduction
To evaluate the effect of regional plans and policies and to assess the involvement of stakeholders within Satellite Navigation clusters, several interviews with representatives from different entities were conducted. Two sets of questionnaire were used, of which, one is for Cluster manager, industrial policy maker, while the other one is for cluster members. Other sources of information were a study about Aerospace and Satellite Navigation in the Munich region conducted by Chamber of Commerce and Industry for Munich and Upper Bavaria (IHK) and the City of Munich, Department of Labour and Economic Development, in 2007 (http://www.muenchen.ihk.de), the cluster manager bavAIRIa e.V. (http://www.bavairia.net/), the Bavarian Ministry of Economics, Infrastructure, Transportation and Technology (http://www.stmwivt.bayern.de/) and the German Aerospace Centre (DLR, http://www.dlr.de).
Some economic figures about Bavaria
With a gross national product of 385.2 billion Euro, bavAIRria exceeds those of 19 of the 25 EU member states. bavaria's economic performance per capita of 30,993 Euro is considerably higher than the German and European average.
International comparative studies underline Bavaria’s outstanding location attributes; in particular the Munich region is regularly in the top ranking.
Fifty years ago, Bavaria was still an agricultural state with no intensive links to important international markets. Since then Bavaria has developed into a "European High Tech Mecca" (a quote about Bavaria from Bill Gates, Microsoft's CEO and Founder), becoming a center of the "New Economy" and a globally significant economic partner.
Bavaria’s economy is characterized by small and medium-sized companies of the industrial, trade and service sectors, but also by global players, such as Siemens, BMW, Audi, EADS,
Interviews Information
The Organization where representatives come from Number of Representative
University 1 Rep
Incubator 1 Rep
Research Institute 1 Rep
Venture Capitalist 1 Rep
Start up (Younger than 2 years) 2 entities
SMEs (10-249 employees) 2 entities
Large Companies (>250 employees) 2 entities
Government 1 Rep
Regional development agency 1 Rep
Cluster management association 1 Rep (Cluster manager)
Technology Transfer Center 1 Rep
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adidas, and MAN, thus providing a wide spectrum of competitive suppliers, customers and potential partners.
On both the international and national level, Bavaria has taken a leading position in many new technologies - information and communication technologies, biotechnology and genetic engineering, energy and environmental technologies.
Bavaria provides an excellent infrastructure in sectors such as transport, telecommunication and energy, which guarantees optimal links and support to international markets, a high level of education and continuing education, an intensive promotion of research and technology with a share of 3.0% of the GDP resulted in Bavaria's top international rating, thus ensuring a lasting innovation and competition potential; and efficient administration, quick planning and authorization procedures as well as reliable and pro-business practices.
Some economic figures of Bavaria Population 12.519.312
The number of start ups in last years 60.000
Unemployment rate (Nov. 2008) 3,6%
Percentage of international people 9%
R&D expense per nominal GDP 3%
Patent applications per 100,000 inhabitants in
Bavaria
115
Patent applications per 100,000 inhabitants in
Germany
64
Per Capital income 30.993 Euro
GDP per gainfully employed 61.870 Euro
In keeping with the principle of "Shaping rather than owning", the Bavarian State Government has reinvested proceeds from privatization, totaling some 4.2 billion Euro, in modernizing industry, state, and society within the framework of its High-Tech and "Offensive Zukunft Bayern" initiatives.
Bavaria has, for instance, specifically consolidated its competencies in cross-sectoral technologies of the future, such as information and communication technologies (ICT), life sciences, advanced materials, mechatronics, energy, and environmental technologies as well as nanotechnology.
The successful start to the Galileo program will be followed by additional steps to enhance the Free State's role as a center of excellence in European satellite navigation. Further development of the public R&D infrastructure and support of companies seeking innovations in ICT are seen as an ongoing mission in Bavaria.
In 2006, Bavaria again underpinned its top position as the No. 1 start-up state in Germany. No other German state can claim anything like as great an increase in new businesses. With a balance of 11,019, Bavaria on its own has nearly as many start-ups as all the other large non-city states of Baden-Württemberg (+1,236), Lower Saxony (+3,062), Hesse (+3,506) and North-Rhine Westphalia (+3,279) together. More than one in every four new businesses in Germany is on balance established in Bavaria. Over 60,000 new Bavarian companies have been established since 2003. According to calculations by the IfM research institute, an overall total of 40,954 new companies were set up in Germany in 2006.
Environment of Bavaria for satellite and navigation
The Free State of Bavaria is one of the leading locations in aerospace and satellite navigation worldwide. In 2007 more than 400 aerospace companies with about 30.000 employees
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generate a turnover of 6,5 billion Euro. As a result, Bavaria is the largest aerospace area in Germany besides Hamburg and Bremen. Bavaria is also a hub for German military aviation.
The young industrial sector of satellite navigation applications employs about 1.200 highly trained people and staff in more than 120 companies with an annual turnover of about 350 million Euro. Bavaria is one of few locations internationally which cover both the aerospace and the satellite navigation branch and encompass almost the entire value chain along with all levels of the supply chain. The Bavarian companies also benefit from an excellent infrastructure: this includes 14 universities and research institutions, which conduct research in all key areas of aerospace and satellite navigation, the German Space Operation Centre, the Galileo Control Centre, the Galileo gate testbed and BAYNAVTECH. The cluster co-ordinator bavAIRia e.V. was founded by the Bavarian Ministry of Economy, Infrastructure, Traffic and Technology (STMWIVT) at the end of 2006 as part of the Bavarian cluster initiative and of the initiative “Allianz Bayern Innovativ”.
Key players within the satellite navigation application cluster
1) bavAIRia e.V.
BavAIRia e.V. was founded in August 2008 with the help of the Bavarian Ministry of Economics, Infrastructure, Transportation and Technology (STMWIVT) as the central cluster management organization. Within the Bavarian cluster initiative and as part of the initiative “Allianz Bayern Innovativ,” bavAIRia has been commissioned with both, the management of the aerospace as well as with the “satellite navigation” cluster.
2) Anwendungszentrum GmbH, Oberpfaffenhofen (AZO)
The AZO has been established in 2001 as incubating institution within DLR, see below, supporting SatNav and space application related start-ups. Currently, 36 firms are hosted by the AZO. Since its start more than 50 companies have been supported.
3) Research and training in Bavaria
14 universities and research institutions in Bavaria, e.g. the two German elite universities, the Technical University Munich and the Ludwig-Maximilians-Universitaet, two Fraunhofer Institutes, and in Oberpfaffenhofen (South-West of Munich) the largest DLR (German Aerospace Center) complex in Germany are in one way or the other supporting Satellite Navigation applications and related SME by either offering training courses or supporting research teams in receivers, software or innovation management .
4) The Munich Satellite Navigation Summit
The Munich Satellite Navigation Summit has been established as the European and International conference with global impact featuring invited high-ranking worldwide speakers from industry, science and governments dealing with the directions of satellite navigation now and in the future.
The Summit is part of the efforts of the Bavarian government and the cluster on aerospace and satellite navigation to stimulate applications and services in this high-tech field in the greater area around Munich. In 2009 the seventh Munich Satellite Navigation Summit will be held from March 3 to March 5.
5) European Satellite Navigation Competition (ESNC)
The European Satellite Navigation Competition, formerly called Galileo Masters Competition, is an international idea competition awarding the best ideas for innovative applications in the field of satellite navigation. Since 2004 initiated and
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organized annually by the Anwendungszentrum GmbH Oberpfaffenhofen and in collaboration with the SYSTEMS Business to Business Trade Fair, the ESNC is oriented targets companies and entrepreneurs from research institutes, universities, and private individuals. From its start, the competition has grown from three partner regions to 13 high-tech regions of from Europe and beyond: Bavaria, Hesse, Baden-Württemberg, Nice / Sophia Antipolis, Prague, South Holland, Madrid, Lombardy, Great Britain, and this year's new regions, Queensland / Australia, Taipei / Taiwan, Lower Saxony, and North Rhine-Westphalia. The goal of the ESNC is to continue to strengthen the international collaboration of these regions, particularly with regard to the development of applications and services made possible by the European satellite navigation system Galileo. The ESNC is carried out under the patronage of the Bavarian State Ministry for Economic Affairs, Infrastructure, Transport, and Technology with the support of the German Aerospace Center (DLR).
6) Navigation World at SYSTEMS
Since 2004, Europe's leading satellite navigation network has come together at the information and communication trade fair SYSTEMS in Munich, Germany. The Navigation World area is a meeting place for decision makers in the IT, telecommunications, Geographic Information Systems and satellite navigation industries. The Navigation World's "show within a show" and topic-specific exhibition offer providers of software solutions, integrators, devices, components, and services an ideal platform for presenting products and expertise.
7) The BayNavTech Satellite Navigation Centre Munich
BayNavTech is the Centre of Navigation Competence and Technology at EADS Astrium in Ottobrunn, Bavaria. It bundles the Bavarian satellite navigation technology competences in Munich as a European centre for satellite navigation performance and applications.
8) Regional policy makers
- Bavarian Ministry of Economics, Infrastructure, Transportation and Technology (STMWIVT)
- Chamber of Commerce and Industry for Munich and Upper Bavaria (IHK),
- City of Munich, Department of Labor and Economic Development.
Within this group the Bavarian State, i.e. the StMWIVT, is the biggest supporter and provides own budgets fostering innovation in Bavaira, i.e. the Bayerische Cluster Offensive, the Offensive Zukunft or High-Tech Offensive Bayern.
9) About 100 small and medium-sized enterprises in SatNav (up to 249 employees, full time equivalents)
10) Around 10 major SatNav companies with more than 250 employees, which hold smaller or larger working groups on SatNav.
The performance of SatNav Cluster in Bavaria
Cluster level-Economic Performance
Due to the cross-sectional character of the SatNav-Cluster monitoring of the GDP is not possible. Companies come from different sectors such as Biotech, robotics, transportation, automotive, tourism, logistics or security
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Since 2003 around 15 to 20 new start-ups in the field of SatNav are being established in the Cluster every year. Over the past five years (2003-2007), the number of new firms created in the field of satellite navigation technology applications has increased strongly between 5 to 10%. The share of new companies created in this sector in the total number of new firms creates in the cluster is about 2 to 5%. This share increased modestly (1-5 %) during the past five years. Compared to other European satellite navigation application markets the share of the Bavaria cluster has increased modestly (1 - 5%) between 2003 and 2007.
In total 1500 people work in more than 120 SatNav firms in Bavaria. The annual turnover is around 350 Million Euro. On average a SatNav firm in Bavaria has around 12 employees and a yearly turnover of 2-3 Million Euro.
The number of firms in the field of SatNav in the cluster went bankrupt remained constant in the last five years. About 5% of all SatNav firms in the region went bankrupt during the last few years.
Bavaria is recognized as a “hotbed” for SatNav industry on all levels since 2006. The cluster management is supported by the Bavarian government and receives around 830.000 Euro per year.
There are no special policies, e.g. tax reductions, for SatNav companies. The government indirectly supports the sector due to the excellent infrastructure of the cluster.
In general information on activities of the cluster is easy to obtain and overall the firms and institutions in the region know each other well. Bavaria is also well connected with major national, European and global players in the SatNav field. Contact to other R&D institutions and clusters exist since 2005. Networks on the European level include CASTLE, KIS4SAT (DG Research), Siderius (European Commission) or ENCADRE.
The Performance of Best practices
In which, the best practices’ performance as identified in Deliverable 2.1 would be assessed.
- The Performance of Galileo Road Show
The GALILEO ROADSHOW aims to inform about the potential capabilities of satellite navigation and to link users and supply chain in the satellite navigation industry. The GALILEO ROADSHOW was triggered in 2005 in response to the insufficient supply of information about GALILEO (national/international) available to potential users and SMEs.
The GALILEO ROADSHOW is made up of short impulse-driven speeches by various referees and lasts a maximum of one day. The main target audience of the ROADSHOW are small and medium-sized enterprises from a variety of branches, but also large companies, associations, public authorities, government agencies, research institutions, universities, students and others. To date, GALILEO ROADSHOWS have been held at the SYSTEMS, at various German Chambers of Industry and Commerce, companies, universities and other organisations in Würzburg, Nürnberg, Oberpfaffenhofen, Kaufbeuren, Ingolstadt, Rosenheim, Berchtesgaden, Donauwörth, Hof, Straubing and Coburg. The expansion to other German federal states and beyond was and is intended. In this respect it is worth mentioning Berlin, Wolfsburg (VW), Osnabrück, Stuttgart, Vienna, Praque and Sophia Antipolis.
- Lead Market initiative and its impact
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The Lead Market Initiative for Europe will foster the emergence of lead markets high economic and societal value. On the basis of intense stakeholder consultations, six markets have been identified against a set of objective criteria: eHealth, protective textiles, sustainable construction, recycling, bio-based products and renewable energies. These markets are highly innovative, respond to customers’ needs, have a strong technological and industrial base in Europe and depend more than other markets on the creation of favorable framework conditions through public policy measures. For each market, a plan of actions for the next 3 - 5 years has been formulated. The European citizens will benefit both from the positive impact on growth and employment (the identified areas could represent three million jobs and 300 billion EUR by 2020) and from the access to enhanced goods and services of high societal value. Potentially new lead market candidates are continuously reviewed and eventually new sectors identified in the future. One of the potential candidates is satellite navigation applications with a predicted market volume of 270 billion EUR in 2015, worldwide.
The Lead Market Initiative (LMI) for Europe was launched by the European Commission following the “EU’s 2006 Broad based innovation strategy”. The scope of the LMI, the selection of the six markets and the action plans were approved just recently in the Competitiveness Council (mainly composed of the Ministers for European Affairs, Industry and Research from the Member States) of May 2008. The actions recommended within the LMI Action Plan ask to deploy a core set of policy instruments, which could also be partly implemented on a regional level, namely Legislation, Public procurement, - Standardization, labeling and certification and Complementary instruments. (In certain market areas, measures to provide business and innovation support services, training and communication are deemed a necessary complement to the above policy instruments. In some instances, financial support and incentives which aim at facilitating the interaction of customers with the innovating companies and their solutions are considered advantageous. Such schemes could involve Structural Funds and State aid funding.)
Assessment
This means that the LMI is a rather new policy instrument, which had not much time up to now to develop a grip on the European economy or its policy makers.
The following trends can be observed:
More and more regional bodies favour and support cluster co-ordination organizations in Satellite navigation applications throughout Europe. Following the ENCADRE Memorandum of Understanding lead by ESA, which has been established in 2006 during the Europe INNOVA project CASTLE funded by DG Enterprise and Industry, currently about 15 coordinating cluster entities support this sector. Some of them support forums bringing users and providers together, forums which support market pull activities in close collaboration with key stakeholders from the public side, see www.europe-innova.org and ENCADRE. Also activities of public institutions as lead customer are partially implemented, though only on small scale, like the City of Munich’s tourist guide “cruso”, a GPS-based device introduced in November 2008. On standards, bavAIRia together with Piemont / Torino Wireless work on joint standards in info-mobility systems. When it come sto complementary infrastructures Bavaria is certainly one of the most active regions in the support of satellite navigation applications be it through the financing of appropriate universities and research organisations, through facilities like GCC and gate or the fact that the SatNav incubator AZO
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has already been established back in 2001. bavAIRia as cluster coordination could also be seen as an infra-structure projects. Further value is added through international and transnational cluster co-operations to the benefit of the SMEs
Involvement of stakeholders
Within the cluster knowledge is extensively being shared. The awareness for e.g. policies, public funding or information trends is fostered by technology platforms, regular and irregularly distributed newsletters, regular events - at least each month an event - and seminars.
- Application Forums
Platforms are used to forge connections between representatives of industry and research institutions within the cluster, and also to connect them to other business development entities e.g. other clusters, like IT in Bavaria, Germany and abroad. bavAIRa’s satellite navigation user forums bring together many of the relevant key players along the entire value-added chain – from the operator of the Galileo control center, the German Space Operations Center, R&D chains and the various system and subsystem suppliers for the European satellite navigation systems, software and systems developers, mobile phone providers all the way to the private and business users. Optimum results are expected from this link and the creative interaction of industry, research and politics, with a view to identifying the markets anticipated for the use of satellite navigation, and developing successful projects. Currently, eight platforms focusing user and providers needs down to specific applications are in operation: security, traffic, IT/information & communications, robotics, transport, tourism/leisure, geo-information systems/land use, medicine as well as two regional platforms, one in Berchtesgarden and and one in Nueremberg. All platforms have regular meeting schedules, some of them four times a year, others, e.g. the transport, meet every month. Participation varies from small project groups with three to four participants and larger platforms with up to 35 people. Average attendance is about 20 people.
- Support infrastructures
In 2008, both, the gate test bed in Berchtesgaden, an infrastructure of six transmitter stations in the mountains simulating certain Galileo signals in a fixed terrain, as well as the Galileo Control Centre-GCC, were opened. Since the official opening of the certified gate services will be in spring 2009 and since there are no Galileo satellites, but one to control currently, there is not much user involvement those two infrastructure units to report.
- Newsletters
Two newsletters are being quarterly published by bavAIRia, one is for all the currently 120 members and the members of the ARGE Working group on Satellite Navigation initiated back in 2001, the other newsletter is distributed to a wider range of people interested in Satellite navigation, 500 in total. The Anwendungszentrum Oberpfaffenhofen (AZO) also publishes a newsletter on a regular basis (three to four times a year), which is distributed worldwide, including leverage effects, to 40.000 - 50.000 readers.
- Summer schools , seminars and trainings
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The “Carl-Cranz Gesellschaft e.V.”, Oberpfaffenhofen, an legal association, provides post-academic training. It offers up to 90 courses (1-5 days) every year. The topics range from “Principles of Satellite Navigation”, “Indoor Navigation” to “Vulnerability and Robustness of Satellite Navigation”.
The “International Summer School on Global Navigation Satellite Systems” was established in 2007 and is organized by the “Institute of Geodesy and Navigation” of the University FAF, Munich / Neubiberg, in co-operation with Stanford University (USA) and SUPAERO, the École Nationale Supérieure de l'Aéronautique et de l'Espace, (France).
More than 80 % of the personnel employed in the 120 SatNav companies are highly qualified and the companies face a serious qualification problem in the long run. So, training courses and summer schools are established in order to provide the companies with new qualified personnel-
- Cluster Evaluation
In 2008, the Satellite Navigation Cluster, like all the clusters in Bavaria, has undergone an external evaluation by the Fraunhofer Institut für System- und Innovationsforschung, an external independent research / evaluation organization. The results of this evaluation were presented in December 2008 and underline the positive results of the clusters for the economic success in the region of Bavaria.
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4.4 IMPACT AND PERFORMANCE MEASUREMENTS OF DEMAND CREATION
MECHANISM IN PRAGUE
In order to evaluate the effect of current plans and policies and to assess the involvement of stakeholders within Satellite Navigation clusters we were based on interviews with representatives from selected main entities. We followed the methodology of two sets of questionnaire, one is for Cluster manager, industrial policy maker, and the other one for cluster participants. In addition we also used the studies on related activities provided by the public bodies and academia
The main methodology used for the impact and performance assessment
Institution Number
Business service providers 2
Universities 3
Research institutes 1
Incubators 1
Business angels 1
Technology transfer centers 1
Venture capitalists 2
Associations 2
SMEs (up to 249 employees, full time equivalents) 4
Major companies (more than 250 employees, full time equivalents) 8
Basic parameters:
Companies actrively involved in SATNAV and Telematics - 85
Participation of universities – Prague, Brno, Pardubice, Plzeň, Ostrava
In order to evaluate the performance of the cluster we addressed not only the directly involved and committed players as indicated in the SWOT analysis but also the major foreign investors who evaluate the overall perfomance and attractivness of the environment and available core competencie. Another importnat investor and stakeholder is the state. Thanks to positive rezults of the evaluation and audit of the potential in space related activities effected by major players active in this field (ESA, EADS Astrium, Thales) the government decided to provide full support and take the participation in Europian programmes as one the priorities. SATNAV is one of the promissing sectors, mentioned also in the future development strategy of the Czech Republic. More information on the above mentioned is described below in more details.
Overview of the supporting activities
Czech Space Officee as the main contact point organizes regular seminars, on monthly basis with the aim to stimulate the demand in the active participation on opportunities in Satnav and in general space. An importnat milestone in this effort was the successfull audit effected by ESA in co-operation with major primes. This fact is crucial for the further development of the
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cluster mainly thanks to the support by the governement in terms of the budget commitment to mandatory and optional programmes and in the related interest of primes and other major player. Joint actions are regularly organized by CSO with EADS - Astrium, Thales, Honeywell and other major players.
GNSS systems and project Galileo
The CSO organizes a seminar which bears the above name approximately every three months. The participants are given basic information about all functional and planned GNSS systems with emphasis on european system Galileo.
ESA Radar Remote Sensing Course 2008 in Prague
A five-days intensive Radar remote sensing course was held from 27. - 31. October 2008 in the facilities of Department of Applied Geoinformatics and Cartography, Charles University in Prague. The course was jointly organised by the Czech Space Office, European Space Agency and the above mentioned Charles University.
Educational Opportunities in Field of Earth Observation for Czech Republic
On 13th December 2007 the CSO organised an ESA Education seminar with focus on EO. The purpose of the seminar was to give a presentation about ESA ongoing activities in the field of EO education and the tools that ESA has developed so far for this purpose for secondary / high school / university / PhD and specific user level
ESA-opportunities for czech companies and institutions in the field of
telecommunications
Czech Space Office (CSO) in cooperation with ESA Telecom department and Czech Ministry of Education, Youth and Sports (MEYS) organized a seminar "ESA - opportunities for czech companies and institutions in the field of telecommunications". The seminar was held on 11.12.2007 on the premises of MEYS
ESA industrial audit of the Czech republic
In connection with current negotiation process of accession of the Czech republic (CR) to the European Space Agency (ESA) convention there was an ESA industrial audit held between 10.-12.October 2007. The aim of the audit was to assess the capacities of Czech industry and research to participate in ESA space projects
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Potential Topics for Czech - ESA Cooperation in EO Ground Segment RTD
The CSO held on 26. 6. 2007 a seminar focused on potential opportunities for participation of czech companies in Research and Technology Development in field of EO Ground Segment. Eleven companies and research institutes had participated.
A) Major multinational companies
Apart of the primes, Czech Republic became the strategic development site for foreign investors namely in the field of ICT. Based on the interviews with companies who established there development centers in Prague and other locations in the Czech Republic it rezults that the knowledge base for mobile and telemetric technologies represents an important asset. Microsoft innovation center focused on this field can serve as an example. After its opening in 2006 there are first actual products and systems which where developed in cooperation with SMEs and university teams, like a navigation tool specifically designed for handicaped population to enable their orientation and movement in cities. The core technology is based on Satnav.
Another important developmetn center in this filed is STMicroelectronics design center. The core competence is the design of chips and micorsystems where the mobile and navigation technologies represent the priority. The center employes more than 100 designers of integrated circuits and embedded systems.
The third most important multinational company active in the field is Honeywell who established the global engineering cetner in the Czech Republic, employing more than 2000 engineers. The priority of the development center is the aerospace sector. Honeywell is actively co-operating with universities and SMEs, e.g. in the domain of navigation and security systems.
B) Involvement of the state
The state institutions strongly support the concept of demand creation by means of cluster formation including other forms of public support both on the national and regional level.
An important step and achievement is the full membership to ESA which opens the core platform for future growth
The Czech government has recognised the strategic importance of industrial participation in ESA programs and in 2007 decided to launch an intensive campaign to move on from PECS, the transition program for ESA membership candidates,
to full ESA membership. Formal request to initiate the negotiations was sent to ESA DG on January 9th 2007. The general director welcomed the application, and forwarded it for consideration of the next ESA Council. The first round of negotiations started in June, with the visit of an ESA team to Prague, lead by Mr.Jean-Jacques Dordain himself.
Czech government in ESA HQ
An example of the importance given by the Czech government to speedy accession to the ESA convention, when a delegation led by the prime minister Topolanek, and including his
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ministers of industry and trade, transport, vice ministers of foreign affairs and defence, and advisors met the DG in ESA HQ to press for acceleration of
the process. The leader of the Czech Space Alliance was included in this high level delegation. This fact underlined the government’s practical awareness of ESA membership being about industry and increasing its competitiveness. The DG commented that he appreciated the seriousness of the government’s goal also because he had never had so many ministers in his office at the same time. The conclusion was that the DG will forward the urgency to the counsel and that all involved will be committed to press the accession process at the highest possible speed.
ESA Audit of Czech technology industry
ESA carried out an audit of the capabilities of Czech industry. Five ESA experts reviewed previously prepared questionnaires distributed to Czech entities selected by the relevant ministries, the Czech Space Office and several professional organisations. Three days were then spent in face to face meetings with 26 chosen companies and two research institutes, including also visits to four aerospace factories.
Next steps
Whilst the accession negotiations are in progress at the political level, it is up to the Czech industry to show not only that its capabilities are up to the standard necessary for full ESA membership, which the audit is expected to demonstrate, but also that it has sufficient interest and capacity to develop partnership with ESA member companies and to participate with them in new projects under the existing ESA PECS programme. The start has been made - several industrial projects have been successfully completed, and others are in progress. One of the latter had been won in a competitive ESA bid, with an industrial partner and prime from Italy. But more activity is needed and this requires more contacts and mutual awareness of potential Czech suppliers and ESA member state industry.
The governemtn launched the following programmes where the SATNAV cluster will benefit mainly with respect to development of:
- ICT technologies (over
- space related activities
- cluster and RD infrastructure
The total amount of public support will exceed 2 bil.EUR by the end of 2013
C) Willingness and ability to work in cross-cultural teams
Considered the relatively limmitted size of the Czech Republic, smaller in population than Bavaria (10 million inhabitants) it is crucial to be open to other cultures and provide the right environment for joint reasearch and developmetn activities. To this purpose we can mention the following statements made by representatives of major ICT companies.
"Sun chose to locate its development centre in the Czech Republic over other attractive
locations around the world. Prague was chosen especially thanks to its abundance of
software-development specialists, excellent infrastructure, stable environment, and the
helpful attitude of the government."
• Zdenek Pilz, General Manager, Sun Microsystems Czech
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"The Czech Republic is an attractive destination for companies like ours that hope to reach
a broad European market - Brno has excellent infrastructure and facilities, a supportive
government, and people with multiple language skills."
• Akshaya Bhargava, Managing Director and CEO, Progeon Ltd.
Conclusion
- South Holland
South Holland is one of the hotbeds for entrepreneurship activities, base on factors that we have; competent universities and research institutes make South Holland become knowledge, and engineers pool in the field of SatNav. Besides, open culture and pleasant life environment make South Holland become an attractive place for both entrepreneurs and scientists.
Feedbacks from the interviews suggest that respondents believe the start-ups creations, and market share was increased constantly in the past 5 years. Meanwhile, some competent key players in the field of SatNav exist, but they are not playing the role they should have in the development of regional economy.
With respect to involvement of stakeholders within the region, sub-clustering is emerging but different groups within the area don't know each other well. Enterprises groups were found during the interviews, group members know each other well, but the liaison, or interactions between groups are rare.
- Lazio region
Information on activities of the cluster is not easy to obtain even though the firms and institutions in the region know each other well. The district is well connected with major national, European and global players in the SatNav field through FILAS.
The Collaborative cluster initiative is a significant success since has allowed the identification of emerging, unexpressed demand for added value space based ICT Applications, to be satisfied by the launch of 21 collaborative projects. And the Living Lab in Lazio Region is promising. As a matter of fact, 27 potential new companies in the sector of advanced services and applications are significant even in the dynamic and consolidated economic context of the LAZIO region in the aerospace sector, increasing of about 10% the numbers of significant players and originating new jobs and wealth in domains which are additional to the ones, traditionally mastered in the LAZIO territory (such as manufacturing).
- Munich
In the field of satellite navigation, Galileo as well as EGNOS hold the promise of technical and commercial success for Europe similar to that attained by Airbus in the aircraft market. According to EU estimates, the Galileo market potential is set to add up to 270 billion € in user markets by 2015. In conjunction with earth observation and communication, satellite navigation offers countless opportunities for new products, applications and services. Bavaria has identified satellite navigation as a forward-looking technology and is well prepared in this respect.
Particular importance is attached to the commercial use of satellite navigation. This affects a wide range of companies throughout Bavaria operating in areas such as software and chip development, vehicle construction, telecommunications, agriculture and tourism. Activities in the field of satellite navigation are consequently geared towards the development of innovative products and services with a view to creating sustainable high-tech jobs. This is set to benefit small and medium-sized companies particularly in Bavaria. The region has a high
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concentration of companies in the sectors information and communications, automotive, electronics, chip development and finance. Combined with skilled research efforts in a wide variety of disciplines, these enable Bavaria to maintain and extend its leading position in satellite navigation at both domestic and international level.
As compared to the age of the cluster, some 5 years now, the satellite navigation application cluster in Bavaria is a young cluster. Although research started about 30 years back at the German Aerospace Center the road to market for this new technology is not yet well paved. It is now not technology focus, but increased market pull activities, what is needed in Bavaria. Since the establishment of the cluster coordination organization bavAIRia in August 2006 progress has been made in formally introducing communication, organizational and training structures in the region in order to systematically support the growth of new SatNav business in this area. Involvement in trans-national and worldwide activities of the SatNav community rounds the picture up and makes Bavaria one of the leading SatNav regions in European and the world.
- Prague
Thanks to the new membership of the Czech Republic in ESA committed network of stakeholders the cluster has a great potential for growth. In order to reach the goals comparable with other main SATNAV regions it is important to take advantage of the current project and to adopt the best practices together with other co-operating regions. The core of the successfull further development of the cluster lies in overcomming the identified weaknesses and threads and maintaining an open and cross-cultural environment.
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CONCLUSION
The characteristics of different regions on demand creation process vary. Various demand creation mechanisms work in different stages of demand creation process, the mechanisms in one region differ from others. For example, in the four regions we interviewed, Innovation Voucher has been implemented for 5 years since 2004 in Holland, Bavaria has just launched, at the same time, other mechanisms like Galileo Road Show and User Forum are only available in Bavaria region. Besides demand creation mechanism, the endowment of crucial factors in diamond model for clustering analysing and supporting initiative differ among surveyed regions as well. Resources like knowledge, technology, infrastructure, supporting initiatives include European commission projects, national innovation scheme are not distributed to each region on average, which has indications that there is no one best way to fostering the development of SatNav industry, during the implementation of Joint Action Plan, specific regional characteristics should be taken into account.
On the other hand, “Effective Liasions” between different demand creation mechanisms, supporting initiatives are missing. Working independentantly abate the performance that those initiaves should bring. Overlapping among them weaken the efficiency of resources. So, to identify the exsiting initiatives, mechanisms, clarify their working area, avoid overlapping, and make them work in tandom become next task. For example, the connection between ESNC, Living lab, and other incubation initiative seems to be a possible solution.
With respect to the most crucial stakeholder within SatNav industry-the product and service providers, SMEs are missing. SatNav is strongly overlapping with other industries like mobile telephony, logistics, transportation and so on, which is relative developed, the anchor companies from these industries, are stepping into the area of SatNav, like Nokia, Logica, Skoda, and so on. On the other hand, start-ups on SatNav are emerging from Demand Creation Mechanisms, and other regional or European level innovation scheme. The dramatic increase of ESNC participants in past 5 years is in line with this argument. However, the SMEs are missing in the regions we surveyed, how to stimulate, foster the growth of start-ups become a challenge in the development of SatNav industry.
The performance measurement for most Demand Creation Mechanisms and other regional innovation scheme is absent. Data on monitoring are difficult to abtain, which make it become a tough task to observe and trace how these mechanisms and initiative work, which help us to refine, and copy to other regions. A comprehend performance measurement which covers employment, product development should be proposed.
Information are not shared effectively among stakeholders, different kinds of information for SatNav industry are located in different places. To get the information that stakeholder inquires, it usually takes a lot time to browse from one website to another. An information platform which gathers most of the information concerning SatNav industy and plays a role as online SatNav directory is necessary.
