Having played a role in Austin's transformation into “Silicon Hills,” and having consulted for various cities that hope to boost their own high tech economies – and having written a book about it back in '06 – I've been traveling and speaking for UNESCO, helping Asian, Caribbean, and Latin American countries launch their technopolis initiatives. Domestically, the Obama administration has made industrial clusters an important part of its innovation policy. An official of a very large US government agency called me up in late summer, heaped praise on my book, and said, “Dr. Phillips, you must consult for us.”
My ego, and to some extent my wallet, have expanded. My free time for blogging has shrunk.
The aspirations of my audiences and clients span the spectrum of:
- Boosting the capacity of indigenous universities.
- Getting these universities to see value in applied and industrial research, and in the transfer/commercialization of research product.
- Building science and technology parks.
- Building knowledge-based manufacturing and logistics parks.
- Building entire science cities from greenfield.
- Building “clusters” in targeted industries.
- Developing technopoleis that encompasses most or all the above, combined with a pervasive social commitment to local innovation and the quality-of-life that attracts young knowledge workers.
The word technopolis, of Greek lineage, found its way into Japanese at the time Japan's first science city, Tsukuba, was planned. (And yes, that is the proper Greek plural in the last bullet above.) The word was first embraced in the US by Bechtel Corporation, an architecture and construction firm that saw in the trend a promising new market segment. Since, the sense of the word has evolved to denote high-tech metropolitan regions (and the accompanying social commitment mentioned above) like California's Silicon Valley, Austin, North Carolina's Research Triangle, northern Virginia's beltway, India's Bangalore, France's Sophia Antipolis, and others that I've listed here. (That web site is long neglected also; I'll soon con a student into updating it.) Strong new initiatives like Russia's Skolkovo arise regularly.
The later notion of cluster, due to Prof. Michael Porter of Harvard, implies a process of lock-in and positive returns to scale in a region when an “anchor company,” highly innovative and active in exporting product from the region, attracts supplier and customer companies that benefit from proximity to the anchor firm. The spillover benefit of knowledge exchange becomes so great that companies in the cluster are reluctant to leave the region even if they are offered a better tax break elsewhere.
The cluster idea refers to companies and company groups only. Technopolis refers to the social, entrepreneurial, and infrastructural environment of a metro region. A technopolis can host several clusters, viz. the electronics and aerospace clusters in Silicon Valley. Similarly, Portland, Oregon is home to a semiconductor innovation cluster, a flat-panel display cluster, and an educational technology cluster. (The New York Times credited me as the godfather of the latter.) Contrariwise, San Diego hosts the world's foremost biotech cluster, but it is a city of military bases, retirement communities, immigrant small businesses, and suppliers to maquila manufacturers, i.e., not a true technopolis.
My own contribution to these efforts focuses on the role of social capital in technopolis development, and of course the role of universities. Frances Fukuyama, perhaps best known for a silly book on “the end of history,” wrote another, absolutely splendid book called Trust. In it, he defined social capital as the tendency of people to form voluntary associations. Not government-driven projects, and not family enterprises, but voluntary organizations at a meso level. Fukuyama documented that countries with a higher tendency to social capital were richer countries.
Early in the 2000's, I had been looking for a conceptual bin that would hold my high-tech economic development experiences from Austin, Portland and elsewhere. Fukuyama's was it. (He did not invent the social capital concept, but was the first to apply it to regional wealth.) I ran with it, applied it to technopolis, and a book and several journal articles and policy papers have resulted. I find technopolis consulting fascinating because of its combination of technology, social culture, geography, architecture, and so on, and because of the hugely varying cultures and constraints under which diverse countries are attempting their initiatives.
When I arrived in Daejeon in November to speak, my Korean hosts at the World Technopolis Association told me, “Hi Fred, the S&T Minister of [a certain very pleasant tropical country] is here, and we told the Minister she needs you to consult on her science park project.” Ah, I love it. As these projects progress and are publicly announced, I'll share more details with you.
The current US administration's emphasis on clusters is a clever one. By financially supporting scattered metro areas' own choices of targeted industries, it sidesteps the “Washington picking winners” approach which has been more or less extinct since the Reagan years, and which would be opposed by all Republicans and even most Democrats. It also makes best use of federal dollars by leveraging the positive returns to scale that characterize successful clusters.
There now seems to be nearly universal awareness that innovation is the key to productivity increase and thus a better and more sustainable standard of living. There is at least hope that this holds true in any region of the world. There is a (pleasantly surprising, to me) near-universal acceptance that initiatives to spur innovation need to be geographically focused, in “growth poles,” as opposed to scattering funds to every district of a country. All these principles point to specialized parks and regional cluster and technopolis efforts as the right way to go.
**
A commenter asked whether the Internet makes geography (and hence clustering) obsolete, or if not, how it changes the role of geography in industrial development. And, he asked, does “deep history” matter? I reply with this addendum:Deep history sure does make a difference. Portland's radio and instrumentation cluster, and the Oulu (Finland) telecomm cluster stemmed from those two region's histories of government forestry operations in remote areas, and the need for the ranger towers to communicate with one another. Austin's techno-entrepreneurial success leveraged the Texas oil wildcatter tradition of taking risk and forgiving (possibly multiple) entrepreneurial failure. Columnist Andy Mukherjee noted that:
[In] 1911 India's British rulers invited Nobel-laureate chemist William Ramsay to help select a site for a science school. Ramsay chose Bangalore.
[In the] 1950s and 1960s Independent India's first Prime Minister Jawaharlal Nehru set up state-owned engineering companies near Bangalore to fulfill his vision of rapid industrialization. He selected Bangalore because of the talent available at the Indian Institute of Science, the school set up by Ramsay.
A second factor is a great or near-great university willing to engage in industry outreach, and providing a large and steady flow of qualified graduate engineers. The University of Texas at Austin, Stanford in Silicon Valley, the Indian Institute of Science, MIT in the Boston area, etc. This is a problem for the still highly scholastic universities in the former Soviet states.
Third, sometimes, a dynamic, charismatic and high-profile individual who drives the process. Frederick Terman (the teacher of Hewlett and Packard) at Stanford, George Kozmetsky (founder of Teledyne, longtime business dean at UT, and mentor to Michael Dell) in Austin, Lee Kwan Yew in Singapore, etc.
Fourth, what I call the “edge city” phenomenon. In my view, the major centers of culture and population are inherently conservative. We can expect to see more freewheeling innovative behavior in smaller cities on the 'edge' of the major centrifugal cultural forces, but not too far out in the boondocks. (Moreover, real estate prices and intra-city travel times in the biggest cities are too high to support tech cluster formation.) This is why we see the most dramatic techno-preneurial flowering in Austin, not Dallas; Curitiba, not São Paulo; Daejeon, not Seoul; Bangalore, not New Delhi; San Jose, and not San Francisco. (Joel Garreau uses 'edge city' to mean an exurb of any major city, different from my usage.)
Fifth, a timely crisis can tip matters toward cluster growth. Bangalore's IT sector's great boost was all the programming needed to respond to the “Year 2000 crisis” - remember that? And Austin's software cluster took off after oil, cattle, and real estate prices in Texas all tanked at once in the 1980s.
You are right also about “random” occurrences. Where the forestry thing was deep history, Terman's move back to California from Boston was accidental history - but pivotal. So were the crises in Texas and India. More such tipping points in technopoleis' histories are documented.
The Internet does not trump geography in cluster formation. A distinction that I believe is due to Ichijiro Nonaka is that between “formal knowledge” and “tacit knowledge.” The former can be written down and squirted over wires. The latter requires working side by side with someone. The engineering writer Henry Petroski recalls how as a young paperboy he could not fold the newspapers according to instructions, but needed personal mentoring by older newsboys. This is why they say “technology transfer is a body contact sport.” When companies depend heavily on tacit knowledge transfer, collocation is essential.
So in a way (sixth!) some collocation and cluster formation is due to wide adoption of “Japanese” lean manufacturing techniques, which require reducing the number of suppliers. Rather than making suppliers compete for your business more or less blindly, you (the manufacturer) choose the one or two suppliers that have the greatest capacity for organizational learning, then help them learn, in exchange for long-term, volume procurement contracts at low prices.
Of course the Internet does foster tech entrepreneurship and tech industry growth by making outsourcing, offshoring, alliances, etc. easier due to broadband communication of formal knowledge (specs, schedules, etc.) over distance.
