Innovation Area Development Partnership

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Managing the ecosystem of innovation areas

Prof. dr. Jacques van Dinteren, Zjak Consult, The Netherlands / Innovation Area Development Partnership (IADP)

Laurens Tait MSc, Arup / Innovation Area Development Partnership (IADP)

Ir. Frank Werner, KCAP Architects&Planners / Innovation Area Development Partnership (IADP)

 

Paper for the world conference of the International Association of Science Parks and Areas of Innovation (IASP) in Istanbul, September 2017

 

Management Summary

While the emphasis early on was on the physical development, along the way developers started realising that science and technology parks (STPs) require an entirely different approach. This paper starts with presenting an overview of the development of the STP-concept and the impact of management on the success of these parks. In The Netherlands that success is to a certain extent often hampered by the fact that several parties are involved, having their own responsibilities. A simple model is described in which daily management can have control over the socio-economic and the physical aspects. This model can also be used for co-innovation parks and the upcoming concept of innovation districts (all together: innovation areas). In the last part it is stated that changing concepts have led to changes in management and this evolution will continue due to, among others, globalisation.

The innovation area as an umbrella

The ‘science park’ is a phenomenon of increasing relevance to modern urban planning (Christiaanse, 2007). In Europe, universities are reconsidering their position in society and taking on extensive reorganisations and expansions of their physical structures. The post-war university campus as an isolated community of scholars is subject to thorough revision. In Asia, on the other hand, new campus-style universities are shooting up like mushrooms. Global companies build campus-style factory sites for their international headquarters or for their research-and-development departments.

Given the nature of the activities and the institutions a science or technology park (STP) focuses on, it should not be considered likely that this would be a static concept. Companies and institutions that are focussed on innovation generally are highly dynamic. Nevertheless, in the first decades of its existence the STP-concept was predominantly viewed as a ‘stand-alone’ activity and often primarily as a real estate development. In western economies this has significantly changed over the last three decades and the primary focus has shifted to stimulating innovation. That is a first trend.

A second trend is the broadening of the concept. When it is about specific locations for innovations it is no longer about STPs alone. (Industrial) co-innovation parks, developed around a leading innovative company instead of a university, were created when these companies opened up their sites for other companies and institutions.

A relatively new concept is the innovation district which can be defined as “a designated zone with its own specific management team, whose main objectives include economic development via the promotion and attraction of selective innovative business for which specific services are provided or made available, and that may also include residential and cultural zones or facilities, or be embedded in urban spaces having such facilities, and with which the economic aspects of the area of innovation interact” (Sanz, 2016). In fact Sanz and others (Nilina c.s., 2016) use the term “innovation area”. The scale of such an area can vary widely. Ann Arbor SPARK (U.S.A.) covers an entire region, while 22@Barcelona is 200 ha. In our opinion all the more reason to distinguish between innovative regions and innovation districts which, in terms of scale, are comparable to co-innovation parks and science parks. We suggest to use the concept of an “innovation area” as the umbrella term for science parks, industrial co-innovation parks and innovation districts. On a higher geographical scale one can distinguish the “innovation region”.

The shifting away from a real estate development towards stimulating innovation has changed the management of these sites. It is not about managing buildings, but managing a community of people working on innovations. Due to its character managing an innovation district might be somewhat different from managing a STP or an co-innovation park. The management of such a development is still important, though functional blending of activities is a relatively new element in this concept and might ask for a somewhat different approach. Due to the functional mix other parties than the usual ones might become involved, such as the inhabitants of the area. Moreover, the link with a university is generally less strong, though this can be partially overcome by establishing a ‘branch’.

The above demonstrates that there are alterations in the concept over time and this has led to changes in the way these estates are managed. Such modifications will continue, for example due to the rather isolated geographical position of many STPs, often at the edge of a city. That poses questions about the embeddedness of STPs (and probably also co-innovation parks) in the region. May be the region is a better scale: an innovation region with multiple focal points (innovation areas) and a network of companies and institutions which are located in those innovation areas and elsewhere in the region. That poses questions about the way innovation areas and their linkages with the region are organised. It also raises the question whether management at the regional level is needed. And in a next step one has even to consider the global level. Thanks to travel options, telecommunications and the like, regions are included in worldwide networks through the process of globalisation and innovation parks become hubs in global knowledge network.

This paper will discuss some of these changes, using a simplified model of changing innovation area concepts and changing management activities.

Changing concepts, changing management

Figure 1 sketches the development of the innovation area concept over the past decades, also showing the emergence of innovation districts and the growing interest of embedding these concepts in regional and worldwide networks. It is an ideal-type image which will rarely apply to a specific innovation area. The figure mainly shows that currently much more emphasis is placed on networks and (therefore also) on the regional and worldwide embedding of an innovation area. The more complex these networks are, which is also related to the geographical scale, the more important the management of the ecosystem.

There are many ways to manage a company and there are also many ways to run an innovation area. When analysing management concepts, ownership is an important starting point. A survey of IASP in 2012 (European Commission, 2013; refer to figure 2) shows that the public sector dominates: 55% of STPs in Europe are owned by public parties, mainly local government, public universities and regional government. This can be a mix of public parties. 15% of the STPs are privately owned (private universities and foundations, and private companies) and 31% of the STPs have a mixed ownership. In this latter case local government, public universities and private companies dominate.

Figure 1: Ideal-type development of the innovation area concept and its management Ontwikkleing management

Figure 2: Ownership of STPs in Europe (source: European Commission, 2013)

 Ownership

The above mentioned survey by IASP relates ownership to land, sites, infrastructures and buildings. If perceived in such a way managing a STP doesn’t differ from managing an industrial estate or a business park. This focus on the physical aspects of a STP was typical for the first decades of the STP concept, as stated earlier. In that stage the typical characteristic of a STP was a physical clustering of a certain target group, in this case a group of companies focussing on research and development. During the years the insight grew that the real economic asset of a STP is in the linkages between companies, institutions and a university. The conclusion was that successful STP management needed an extra layer. Management of a commercial estate will focus on infrastructure underground and the surface and will take care of buildings and the built environment figure 3). But the added value of an innovation area is in the ‘software’ as an extra layer. That distinguishes it from a regular industrial site or business park:

  • management of the networks between companies, institutions and a university;
  • management of the facilities for companies, institutions and a university;
  • management of the services for the community (the people who work on the site).

Figure 3: physical and socio-economic layers as individual and interconnected components of an innovation area

lagenbenadering

The right section of figure 1 shows the manner in which the management of innovation area concepts has adapted to evolving concepts and the shift from real estate towards the community (to put it briefly). Today many STPs in the western world are ‘halfway’, although many differences exist between countries and regions. There is a focus on creating networks between the parties in the estate and management also takes care of a high quality environment for the employees to sustain creative processes and to attract and keep a critical and highly educated workforce, the community. When looking at creating the community joint festivities, sports events and having a drink together should help to develop this. Part of this is also the quality of the working environment. Two third of the managers in Dutch science parks stated that due to the scarcity of highly educated personnel a sublime working environment is essential. Although it isn’t a science park, but much more a cluster of media companies, Chiswick Park in London is still one of the most striking examples of creating such a work environment. Although building a community is perceived today as an essential part of an innovation part, the most crucial is creating the networks between companies and institutions. Match making, organising seminars, support with patent applications are all matters which are part of the extensive service package which innovation area management offers.

So, today, there are many different management activities: area and real estate management, network and community management, but also facility management, asset management, etc. All these management activities generally have different stakeholders. This can cause problems. How can these different fields become properly connected and organised in a coherent way? Is it possible to have one organisation that can do business on behalf of all partners? If there is only one owner managing a STP is (relatively) easier, of course. In The Netherlands that is case with the High Tech Campus in Eindhoven. Other STP’s show a somewhat more complex organisation.

Managing STPs in The Netherlands

Although there are many differences one can generally state that many of the Dutch STPs now are in the stage of further developing the community and building networks. The question who manages the STP is relevant here, because in general there are two or more stakeholders. The exception is the High Tech Campus in Eindhoven. Starting point for the Philips High Tech Campus were the high quality laboratories of Philips (NatLab), the trend towards open innovation and the feeling by management that the company had to stimulate the regional economy. This latter aspect had to with the decision by Philips to move their headquarter from Eindhoven to Amsterdam in 1998. In a discussion with government the idea of an open innovation park came up to compensate for the loss (although only 300 jobs were involved). Initially the park was managed by Philips, but in 2008 Philips decided to sell the campus to focus on their core business.  In January 2012 Philips established High Tech Campus Eindhoven Site Management B.V. (without the name Philips). This organisation takes care of daily management, including marketing and promotion. In that year a Dutch investor  Chalet Group) bought the campus and today all management activities are still in one hand. However some specific and unique facilities are still owned and managed by Philips.

New tenants in HTCE get two types of contracts with two organisations affiliated to Chalet Group: a Service Level Agreement (SLA) with HTCE Site Management and a Lease Contract with Calittum HTCE for rent and parking space. The first one overs three types of services: collective obligatory services that are site related (e.g. energy, ICT, infrastructure, etc.); collective optional services if needed; and optional services that are free choice and taken via HTCE Site Management (Curvelo Magdaniel, 2016).

TU Delft Science Park once started in 2005 as a predominantly real estate project by property developers Bouwfonds MAB and ING Real Estate: Technopolis Innovation Park (120 ha). University and municipality took care of the financial aspects of the land development, including the financial risks. The developers took care of the master plan and the investments needed, would buy the land from the owners and develop the buildings. All parties worked together in a project organisation, but due to the lack of expertise in the development companies the project failed and the university took over. The exclusive cooperation agreement between the landowners of Technopolis and ING Vastgoed and MAB / Bouwfonds was disbanded. Today the university has the lead and is looking for the best form to manage the development. The university also offers space for companies in their own buildings. Municipality and university work together on the marketing of the science park in ‘Delft Technology Partners’.

So far for the involvement of real estate companies. One being successful, but another wasn’t. In the Netherlands property developers are reluctant and if a developer is interested the question often is how to convince investors. It is a niche market and if developers or investors doesn’t feel comfortable, projects will not start. Even when it is only about buildings it is sometimes difficult to get the project going. Specialisation, however, helps as is shown by the successful developments of Kadans Science Partner. A very interesting aspect is that this developer / investor combines a real estate development with the management of the building, as the building remains in the portfolio of Kadans. Kadans provides a total package of services, including work space facilities, coaching, advice, financing and access to its network.

To stimulate investments and to make investments easier to get, the Netherlands Investment Institution (NLII) is now organising a fund for science parks and R&D related real estate. Pension funds and insurers can invest directly in this fund.

In the case of the Amsterdam Science Park the estate is owned by municipality and university together, however it is a patchwork of ownership. The estate of the Dutch Scientific Organisation (NWO) covers the northern part of the science park and has its own park management. Municipality and university sell the available land for the same price. Both took care of the urban master plan, which is supervised by the municipality.

The construction zones are subject to a building code that is characterized by a continuous and varied network structure that establishes a system of successive public and semi-public spaces. Situating communal amenities at junctions fosters concentrations of public activity. Instead of standing like isolated jewels in the landscape, the buildings ‘fold’ themselves around the courtyards and interweave with adjacent buildings. In this way, interactivity, knowledge exchange and cooperation among the companies in the area is stimulated. This creates a base for successful social and economic interaction through stimulating a ‘xenogamy’ of various talents, ideas and insights.

Companies that want to establish on the park go to the central organisation which takes care of the first contact. Contracts are handled by the land owners and the municipality checks if the company fits into the profile as described in the spatial plan. Daily management is carried out by the Science and Business Organization of Amsterdam Science Park. This is the central and joint organization of the three founding partners, which are the city of Amsterdam, University of Amsterdam and NWO. These three are in the board of directors and are joint by four other representatives of companies and institutions on the park. The main goal of the S&B organisation is to connect entrepreneurship, education and research and to connect Amsterdam Science Park with its external partners. The main focus points of the management organisation are:

  • acquisition & retention;
  • valorisation & entrepreneurship;
  • corporate communication;
  • functions & facilities;
  • internal & external relations.

It all works well together, but it is said that an improvement can be achieved if the land is in one hand and competences are concentrated, both preferably within the existing management organisation.

The same ideas can be heard in Utrecht Science Park. Stakeholders are the Utrecht University, the academic hospital and the Hogeschool Utrecht (College). Provincial and local government is also involved but not an owner of building or land. Daily management is carried out by Foundation Utrecht Science Park.

Several parties own the land. That includes parking spaces, but the fares for parking are not synchronised. Interested companies and institutions can have a site on basis of a land lease. Available land is sold by the university, but in general interested parties start the discussion with the foundation.

In a project carried out in 2016 the joint conclusion was that too many parties were involved in too many aspects of the science park. The ambition is to get a slim and flexible organisation, which will be the existing foundation. The question is, however, which tasks can be handed over, under what conditions (mandate). The joint ambition is

  • a common vision regarding the development of the science park (urban development, economic impact, target groups, growth strategy, etc.);
  • joint park management;
  • joint mobility management;
  • joint parking management;
  • cooperation in offering services to the community;
  • marketing and acquisition of the target group, including a strict admission policy.

In the vision attention has to be paid to the question how costs, profits and risks can be distributed among the stakeholders. Whatever the organisation, the stakeholders are all customers of the daily organisation (the existing foundation). A  stakeholder analysis it is determined to find out which stakeholders are involved and the degree of the influence they can get.

With regard to the area development each party retains his responsibilities as currently laid down. Joining forces in this field will be discussed in a later stage.

Looking at Utrecht and Amsterdam it is clear that there is a feeling that governance of a science park should be organised in such a way that all relevant tasks are carried out by one central organisation. This can be heard in several other places in The Netherlands. Managers involved are very much interested in (rather) simple organisations as have been set up for Oxford Science Park or Surrey Science Park in the United Kingdom. So, during a project for Utrecht Science Park the question rose: what can be a rather general governance model that takes every stakeholder seriously, but makes one central, coordinating management office possible? How to optimise governance?

Optimalisation of governance

Starting point is that in today’s innovation areas the development of a knowledge network of companies and institutions is essential (including facilities). The same goes for the creation of a community (which is more focussed on personnel, offering services and a top working environment). All together: the ecosystem. Of course one needs also an attractive area and buildings that suit the needs of companies and institutions that are focussed on innovations. This leads to following simple way of reasoning: development strategy à ecosystem à physical development. It cannot be denied that first of all the ‘guests’ in the estate (companies, institutions, university, leading innovative company, others) are central. This leads to the scheme presented in figure 4.

The scheme makes a distinction between the social-economic system (blue) and the physical, spatial system (brown) which creates the conditions for the social-economic system. The two main activities in the social-economic system will be carried out by one organisation, taking care of daily management and strategies and is controlled by a supervising council in which all relevant stakeholders are represented. That includes the stakeholders responsible for the area and the buildings. Now we have to add government. First of all because the plans have to fit into the legal plans of (local) government. Also the university, for example, will have its own policy that can be relevant for the development. Now we have a model that is recognisable in several science parks in The Netherlands (figure 5).

 Figure 4: in search for a governance structure – starting position

 Organisatie 1

Figure 5: The extended scheme

Organisatie 2

Problem is, however, that daily management has no direct control over the physical environment. In many of the Dutch cases this doesn’t hamper the functioning of daily management, although it is often said that it makes a coordinated management of the estate less easier and asks for more coordination than would be necessary. Therefore, the next step in the model is to give the ecosystem management organisation the mandate to take care of the area and real estate management Figure 6). To complete the picture we can add the linkages between the central management organisation and external parties that offer financial solutions, which are of great importance for the companies and institutions working in the innovation area. Stakeholders in the Utrecht Science Park are now together exploring the possibilities for such a model.

Figure 6: Final scheme

organisatie 3

New themes in management

The ideas about managing an innovation area have changed over the years. It would be simple to think that it would stop here. New developments are coming up, like serendipity management or changing the introvert character of STPs and co-innovation parks and making these estates focal points in a regional network.

Serendipity management

A new element in managing the networks of an innovation area is creating or stimulating serendipity. Essentially serendipity management comes down to: how can people with different backgrounds be connected and collaborate, to enable new insights and ultimately new products to be developed through “pure coincidence” (= serendipity)?  This may manifest itself in a building in which the concept resembles all kinds of creative work places which are popping up all over the place in which flexible, playfully designed spaces with all kinds of facilities and short lease periods are available for creative people, entrepreneurs and others. An example of this in a science park is the NetWork Oasis at the Joensuu Science Park (Finland). This concept will only become truly interesting when the idea of serendipity is combined with a method in which different researchers and product developers with different characters and backgrounds are brought together. This is done via a step-by-step process including training camps and work sessions to build teams, which will then focus on the development of a new product (see Kakko, 2013). This has consequences for the management method, as shown in the table below. Not that this will make project management obsolete. The schedule shows that by including networking, and particularly from the perspective of serendipity, other skills are required from managers and involved parties.

Table 1: Difference between project management and management of serendipity (Kakko, 2013) Serendipity management

Regional embeddedness

A STP can only develop and be successful if it is situated in an innovative region. So, it is logical that a STP, but also other innovation areas, is well connected with its region. An innovation area needs regional embeddedness. An innovation area, in fact, is nothing more than a spatial cluster of R&D related activities within an innovative region. And even than: what is a region when we are talking about innovation? The best innovation areas are or are becoming hubs in large, global networks, thanks to enhanced telecommunication and travel options.

Linkages in the regional network can be established by companies and institutions. Part of the game can be the creation of satellites by an innovation area. As an innovation area has reached the limits of its growth, occasionally “branches” are developed in other parts of the region. One out of three members of IASP already has one or more branches. In The Netherlands none of the innovation areas have branches. In 2016 the Utrecht Science Park was the first one to think about establishing satellites because the park itself is almost fully occupied. A project has been carried out to find out what the best locations are. Two branch types were distinguished:

  • development cluster: applied R&D and development of products based on the results of basic research;
  • testing cluster: laboratories, pilot plants and the like.

After a first selection of 37 locations, 11 were investigated in more detail. 14 variables, grouped in three main dimensions, were used to test the suitability of these possible satellites:

  • (spatial) quality of the location and companies present (availability of sites and buildings, representability of the buildings, availability of services, quality of public space, other companies present);
  • reachability (travel time to Utrecht Science Park by car and by public transport, time to reach a motorway, time to reach a railway station);
  • development potential by local government (legal cooperation, welcoming attitude, willingness to invest, park management, strict admission policy).

To test the stability of the outcomes two sets of weighted variables were used, which had no great impact on the outcomes. Utrecht Science park now starts to use a nearby complex as its first satellite. The other selected sites are under further investigation.

With or without branches, larger regions can have several innovation areas within its borders. An interesting example in The Netherlands is the Eindhoven region (figure 7) which has a mix of co-innovation parks, science parks, university campus, so-called creative factories (a cluster of creative or innovative small firms in an old factory). To profit from such a constellation and in general of an overrepresentation of innovative companies just innovation area management will not be sufficient. Regional management is needed to link innovation companies, institutions and innovation areas. Such a strategic regional cooperation between all relevant parties is also a good starting point to link the region to global networks and become a hub in these networks (some information on networks on a higher geographical scale will be presented later on).

Figure 7: Eindhoven region (The Netherlands) as an example of an innovative region with several focal points 

Eindhoven

Regional cooperation

The combination of different types of innovation areas with regional cooperation between parties involved, has made the Eindhoven region a key player in innovation and in global innovation networks. The Eindhoven region promotes itself as Brainport. Main goal of Brainport management is not the development of innovation areas but is achieving economic growth. The focus is primarily on innovation networks and the business environment that is needed to develop and sustain these networks. There is no direct link between the management of the innovation areas and regional management.

The region is now working on a new strategy: Brainport Next Generation to be able to adapt to new developments. They will move towards a Multi Helix model which also involves citizens, customers, consumers, investors, designers, artists and corporations. It is expected that by broadening the scope faster implementation and an accelerating rate of innovation will be possible. Brainport wants to achieve breakthrough projects and ‘living labs’ will be set up by strong consortiums of innovative companies, knowledge institutions and social partners.

Another example of regional economic cooperation is Science Port Holland which was founded in 2008 and is a regional partnership of the municipalities of Delft and Rotterdam and the Technical University of Delft. Together they worked towards the realization of an attractive business environment within the region Delft – Rotterdam for knowledge-intensive companies. One of the tasks of Science Port Holland was the development of five innovation areas. Today the name of the organisation has changed into InnovationQuarter and there is no longer a focus on developing innovation areas. The focus today is much more on the regional-economic aspects of innovation. “The mission of InnovationQuarter is to strengthen the regional economy by supporting and stimulating the innovation potential of the area. In close cooperation with all major corporations, educational and research institutions – like the Erasmus University Rotterdam, the Delft University of Technology and Leiden University – and government organisations, InnovationQuarter supports technological developments, encourages entrepreneurship and invests in start-up companies.”

Hubs in global networks

At the regional level linkages between companies and institutions are easy to establish. A good functioning of regional networks, together with other factors (such as labour market, infrastructure, living environment, etc.) can make a region and its innovation areas a success. Although these regional networks or ecosystems are crucial, most important are the higher level networks: national and international, which are in first instance determined by the linkages of individual companies and institutions. Information on innovative developments is such a valuable asset that in fact distances do not matter. Today worldwide communication has become so easy that innovation often happens on a global scale. “The innovation activities are becoming borderless, yet interconnected. Thus, the future success of innovation ecosystems is measured increasingly in the abilities of innovation actors (and core organisations) to connect and manage talent, partnerships, clusters and practical innovation processes – in combining the local knowledge base into the global innovation power grid” (Launonen and Vitanen, 2011). In a survey among entrepreneurs established on Dutch STPs 64% acknowledged the following statement: “”If it is about really crucial knowledge for my business, distant is no issue. If necessary, I will travel to the other end of the world to gain this knowledge”.

Results from the same research project seem to suggest that size and constellation of innovation areas seem to play a role in the linkages and the intensity with which an innovation area or a region is taken up in global networks. Leiden Bioscience Park in the western part of The Netherlands is a rather stand-alone development in its region, whereas – as shown before – the Eindhoven region has a number of innovation areas and a strong regional cooperation of stakeholders involved. It is interesting to see that the companies in Leiden Bioscience Park are much more interested in global linkages than Eindhoven is, whereas the companies established on High Tech Campus Eindhoven show strong local and regional linkages, demonstrating the strong regional network (figure 8).

Figure 8: regional focus of companies on two Dutch science parks

Focus eindhoven en leiden

To conclude

It must have become clear that buildings are no longer the main aspect of science parks and – more broadly – innovation areas, but that community building and networking are essential. This distinguishes this concept from industrial parks, business parks and office parks. Which doesn’t alter the fact that ultimately the businesses and institutions located in the innovation areas also need a roof above their heads. In view of this, specific requirements can be placed on buildings, particularly from the desires for community building and networking. For instance, pedestrian flows, the creation of meeting points, concentration of catering and restaurant facilities where pedestrian flows meet, creative work environments, etc. For the successful management of a science park, it is crucial that the different layers in the social-spatial structure of a science park are recognised and are connected: the infrastructure, the buildings and the networks. This actually makes an interdisciplinary set up of the management team an absolute necessity.

In light of the developments outlined here, it is obvious that new innovation areas should be developed in accordance with a modern plan. This means they are embedded in the regional economy and are part of broadly set up innovation programs. All of that in an attractive spatial setting with real estate which optimally facilitates this specific way of working. This can only be successful if these developments are managed from an integral management philosophy. It concerns not only the management, though also the nature and the design of the buildings, the quality of the surroundings and the possibilities for meetings etc. The older science parks and co-innovative parks are not sufficiently geared to do this. If they want to keep up with the increasingly faster paced developments in the area of innovations, a physical and functional redevelopment will be required, including a reorientation of the management.

Quoted literature
  • Christiaanse, K. (2007), Campus and the City.
  • Curvelo Magdaniel, Flavia (2016), Technology campuses and cities. A study on the relation between innovation and the built environment at the urban area level. Delft, The Netherlands): Technical University.
  • European Commission (2013), Setting up, managing and evaluating EU science and technology parks.
  • Kakko, Ilkka (2013), The Fundamentals of Third Generation Science Park Concept. Paper for the UNESCO-WTA International Training Workshop, Daejeon, Korea.
  • Launonen, Martti, and Jukka Viitanen (2011), Hubconcepts. Helsinki, Finland.
  • Nilina, Anna; Josep Pique; Luis Sanz (red.): Areas of innovation in a global world. IASP (e-book).
  • Sanz, L. (2016), Understanding Areas of Innovation. In Anna Nilina, Josep Pique, Luis Sanz (red.): Areas of innovation in a global world. IASP (e-book).

 

 

The importance of an integrated approach; from balancing between real estate, concept, and management to the value of innovation programmes

Paul Jansen MSc, Caudata Consult / Arup / Innovation Area Development Partnership

Chiel van Dijen MSc, Kadans Science Partner / Innovation Area Development Partnership

Tom Minderhoud MSc, UNStudio / Innovation Area Development Partnership

Laurens Tait MSc, Arup / Innovation Area Development Partnership

Executive summary

Years of experience in the development of science & technology parks and industrial innovation campuses all over the world taught us the importance of a comprehensive approach, but more importantly the relevance of innovation programmes linked to modern innovation areas. These ‘soft’ innovation programmes mostly focus on the joint development of knowledge, new business cases and connecting talent from diverse backgrounds.

Case studies from the Netherlands teach us that these innovation programmes are already a basic precondition to a successful innovation area. The content of the programmes (knowledge exchange, financial vouchers to support business cases, connecting talent, business development support, etc.) are important but the main theme and distinguishing brand factor becomes the defining aspect. The key take away is that these programmes are crucial to establish a ‘soul’ and specific ‘flavour’ to the park, campus and its community.

Economic relevance

Knowledge and innovation are essential elements for the economies of most countries. With a successful innovation policy, one cannot ignore the physical environment that businesses (both large and small) require in order to successfully execute their work and ideas and generate/share knowledge, all focused on creating innovative products and services. These companies often require special buildings that may require large investments. Buildings may include offices as well as laboratories, clean rooms, small-scale (test) production units, and so on. These sites may thrive in many places, but economic researchers assume that a concentration of such buildings (and thus innovative companies) results in added value for all companies involved. Although research into these assumptions shows quite variable results, this assumed added value has resulted in a clustering of companies in numerous science parks. While numbers are difficult to provide, one indicator may be the number of members of the International Association of Science Parks & Areas of Innovation currently approximately 400.

Development in ‘science parks’

 The development of science parks, innovation districts and areas is far more complex than developing a regular business park or work location. Given the target audience and the specific requirements laid down by the involved entrepreneurs and institutions with regards to the built environment, the surroundings and facilities, the development of a science park requires a well-considered integral plan on the urban level, but also clear ideas about the management of the park, funding, programme guidelines for buildings, real estate financing, innovation programmes and so on.

Striking a balance between the hard elements (infrastructure, real estate, other facilities) and the softer elements, like governance, management and innovation programmes is crucial for a successful innovation area[i]. The commonly agreed preconception is that a comprehensive approach is essential for an area to be successfully developed, but the complex nature of an innovation area, makes it increasingly important to work in an integrated team. Numerous disciplines play a role, but the triad of market research through spatial concept into an urban master plan is crucial. The Innovation Area Development Partnership (IADP) is a recently founded Dutch initiative that provides an iterative cross-fertilisation approach, world class knowledge and unique services.

Due to the particular nature of innovation areas, establishing such areas and monitoring their quality is not easy. For this purpose, the Innovation Area Development Partnership has developed a conceptual model that provides a first concise checklist to assess whether all ingredients are present in the development of an innovation area. If issues are missing, it should be immediately clear that (additional) attention must be paid to these specific aspects. But above all, using this model, the correlation between various programmes, actors, management, real estate, infrastructure becomes clear. By applying this model in various developments around the world, the IADP is currently validating the proceeds of this model in concrete projects.

In our opinion the link between market (potential) and the urban master plan (product) is essential. By applying market research, the target group, the functional concept, the financial viability and the functional programme of requirements will be clarified. The market research however, has a broader goal than only providing insight into market potential, it also describes the long term strategic development trajectory.

In the development of innovation areas, the redevelopment of existing sites and the creation of innovation districts a modern ‘master’ should be followed nowadays. This means that the parks and/or innovation areas are embedded in the regional economy, are part of broad-based innovation programmes and are managed by an integral management philosophy. The aim is to design this in an attractive organisation with modern real estate and inviting surroundings, that optimally facilitate this new way of working and co-creation and innovation. The activities within innovation networks now transcend a single innovation area, often having a regional, national or even international focus. Furthermore, another characteristic is that they are usually the result of a unique combination of public and private ownership.

The potential of this new generation of science parks, co-creation and innovation parks and innovation districts to act as a motor (substantial driver) for the regional economy, is now generally accepted. However, limited research has been done on the success factors for a comprehensive development (hard and soft elements) of these sites and areas. Still we see developments driven by real estate demands on the one side or autonomous regional innovation programmes on the other. The most important factor is to know how to connect both sides of the spectrum in order to contribute substantially to the regional economy in the long term.

Before we present some thoughts on this topic from a Dutch perspective we would like to show the development in time from science parks, industrial innovation campus to innovation districts, including their management and the offered services. To our opinion there are currently three main types of innovation areas.

Science Parks

 When talking about the clustering of innovative companies the science park is the oldest concept in relative terms. Since the rise of science parks in the early fifties, quite a few definitions have been introduced. For example, the IASP places strong emphasis on the science park as an organisation of professionals committed to exchanging information flows between companies and research institutions, promoting innovation in companies and assisting starters and spin-off businesses. However, Hansson (2004) focuses more on appearance and, on the basis of a number of definitions, concludes that science parks almost always have a university in close physical proximity, focus on knowledge and high tech companies and include a special organization that helps starters. We support the definition of the IASP. We believe science parks are primarily about stimulating innovation through well-functioning networks. Property and area development are crucial, but are nevertheless of secondary importance.

The development of science parks is a relatively recent phenomenon: of all European science parks, only 4% were established before 1980. 27% were established in the 1980s and the rest thereafter (EC, 2014). Science parks are primarily an urban or, even more so, a metropolitan phenomenon. Judging from the membership of the IASP, only 6% of parks are located outside of cities and 40% can be found in cities with well over a million inhabitants.

Two-thirds of the science parks in Europe are situated on university grounds and 17% are located no less than 5 km away from such institutions. Earlier IASP research has shown that worldwide, approx. 40% of all science parks have an on-site university or one located in their immediate vicinity. The absence of a clear link with a university may result in a relatively ineffective park (Ratinho et al., 2007). But inefficiency may also occur if the concept is not taken seriously and companies only establish themselves in such parks for their public image and appearance. Moreover, the relationship with the university is not necessarily or solely based on intense knowledge sharing between the research institute and companies based in the park. The availability of various facilities and a pool of students (interns) and graduates play a significant role and are sometimes even more important than the actual sharing of knowledge (Van Dinteren and Pfaff, 2011; EC, 2014). It should not necessarily come as a surprise that companies don not solely focus on adjacent universities for knowledge sharing and co-innovation. When talking about crucial knowledge or information, these transcend the decision to establish oneself in a certain region (Weterings and Ponds, 2007). Nevertheless, it is these relationships between companies and knowledge institutions that distinguish science parks from regular business or office parks. Science park management teams (the fact that there are separate management teams is another factor that makes these parks unique) are often committed to these relationships and try to promote cooperation between individual companies and companies and universities. This allows for the creation of an informal network (‘local buzz’), resulting in substantial positive effects when creating innovation networks between local actors (Capello and Morrison, 2005). At the same time, one could write an entire book about the differences of opinion on this aspect.

Although the stimulation of networks, cooperation and knowledge sharing are essential to well-functioning area management, attention is equally paid to the creation of a community. One could consider the networks as communities, but when talking about communities, these are often less ‘strict’. Communities involve informal contact between employees, meeting each other at seminars, organizing sports events, concerts, and so on. By applying these principles in a well-designed environment creativity is promoted.

The Industrial Co-Innovation Park

Earlier parts of this paper have focused on the relationship between science parks and universities. At the same time, a science park may also develop itself around a different major research institution. For example, even a company may act as the pivot. In the latter case, it is better to speak of an ‘(industrial) co-innovation park’. Where the crystallization point in a science park is the university, in a co-innovation park this is a leading industrial company. Examples include the DSM Industrial & Biotech Campus (DSM, Delft, Netherlands), Kodak’s Eastman Business Park (Rochester, USA), the AUDI Ingolstadt site (Germany), the Luxembourg Automotive Campus (established around Goodyear’s Luxembourg Innovation Center and IEE s.a. sensing solutions) and Chemelot Campus (DSM, Sittard/Geleen, Netherlands).

Such developments are the result of company strategies, focused on co-innovation: the cooperation with other companies and institutions to develop innovative, creative solutions and products. Nowadays it has become harder for companies to keep up with changing technology, economy and markets by innovating solely by themselves. Technology in particular has become so specialised that nobody can afford to do everything at the highest level on their own. Cooperation with other companies, institutions and universities is required. To succeed, businesses must overcome their deep-seated fear of knowledge sharing. Fortunately, in many cases they were able to do so: these days, it has become popular to view cooperation with strategic partners as essential in the development of technological innovations.

Continuous innovations across organizational boundaries may lead a company to the idea of establishing an industrial co-innovation park on its site (or adjacent to it). Precondition is that the company must understand the dynamics of inter-organisational networks and develops – or has already developed – skills in managing networks and facilitating network processes.

The practical possibilities for establishing a co-innovation park, in terms of available space, are often attributable to the downsizing of activities or excessive hectares of expansion reserve. Downsizing may partly occur by offshoring activities, but may also be related to changing production conditions. For example, these days the manufacturing of semiconductors requires less and less space. So, setting up an industrial co-innovation park can be attractive if the leading company:

strongly advocates the idea of innovation and wants to innovate in close cooperation with its suppliers (open innovation or co-innovation); is established in a region that has the characteristics that stimulate innovation, the space required by other companies and is able to take care of the qualities that are asked for to make such a park a success.

This does not mean that co-innovation always requires physical proximity of the firms and institutions involved, but being located in the same park makes it easier to communicate. Moreover, companies situated on such integrated industrial areas may share the material supplies, utilities and services focusing on – for example – safety, quality, personnel and the environment.

Innovation Districts

A relatively new phenomenon in the field of innovation is the innovation district. In an innovation district, the cooperation between companies and institutions is still essential, but the concept differs in specific ways from the two aforementioned districts. First of all, these districts are often located inside urban areas, whereas most science parks are located on the outskirts of cities, in suburban locations. Moreover, innovation districts are often not newly developed, but are formed after a restructuring of an existing situation. As a result, an innovation district often has a mixture of purposes, including housing. In organisational terms, this often means a shift from the triple helix to the quadruple helix. And whereas science parks often place a strong emphasis on technical disciplines, an innovation district often takes a broader approach and thus offers room for a wide variety of creative industries and consulting firms. The link with a university may be less strong, but may partly be replaced with auxiliary branches. In addition, specialisation is sometimes not a key aspect of these districts. For example, 22@Barcelona focuses on four different clusters: Media, Information and Communication Technologies (ICT), Medical Technologies (MedTech), Energy and Design.

Similar to other districts, innovation districts have the requirements of good, dedicated management that encourages the creation of a community and networking between established companies and institutions. And compared to industrial campuses, there is often a leading company or institution (hospital, university, research institute).

Sanz (2016) describes an innovation district[1] as follows: “a designated zone with its own specific management team, whose main objectives include economic development via the promotion and attraction of selective innovative business for which specific services are provided or made available, and that may also include residential and cultural zones or facilities, or be embedded in urban spaces having such facilities, and with which the economic aspects of the area of innovation interact”.

Science parks, innovation districts and industrial innovative campuses are different concepts, especially in terms of target groups and physical form. At the same time, they show strong similarities in terms of work environment and management. Proper management – both in physical and functional terms – is a prerequisite for all three. Looking at the three districts together, they are all part of the overarching concept on an ‘innovation area’

From physical environment to work environment

Whereas during the early days of science parks the focus was often on physical development, over the year’s people have started to realise that science parks require a completely different approach. About two decades ago, the adage ‘brains, not bricks’ was introduced. This broke with a science park as mere property development. At the same time, this doesn’t mean that the physical environment isn’t vitally important in stimulating the process of creativity, interaction and innovation (Van Dinteren & Keeris, 2014). The importance of this is even increasing now that people are realising that an attractive (physical) environment contributes to creativity and competitiveness. Here we could make a distinction between facilities for employees and facilities for companies.

The sharing of facilities for companies, which people hope will lead to knowledge sharing and synergy, is a major reason why companies establish themselves on a campus or science park. This aspect is more important than the actual possibilities of cooperating with the university itself, as shown by a survey among entrepreneurs established at Dutch science parks or campuses. Besides the presence of a young student population, the availability of information systems, laboratories and clean rooms is also important (Van Dinteren & Pfaff, 2011).

On the other hand, when talking about facilities for employees (including ambiance created by buildings, design and landscaping), management has the following reason for their existence: if employees enjoy their work, they simply work more effectively. If they work more effectively, this subsequently has a positive effect on productivity and creativity. Ultimately this leads to better outcomes for businesses. Over two thirds of entrepreneurs at Dutch science parks (completely) agree with the statement that, “given the increasingly tight labour market for highly educated people, it is essential that a science park offers an optimal working environment” (Van Dinteren & Pfaff, 2011). This involves extensive amenities (e.g. shops, hairdressers, restaurants, fitness centres) and an attractively landscaped park with recreational facilities (walking and running routes, meeting places, and so on). A concept such as ‘Enjoy Work’ therefore doesn’t primarily focus on the target group, but on creating a comfortable working environment (see www.enjoy-work.com; Van Dinteren, 2007).

Dutch case – Leiden Bio Science Park – Astellas’ Mirai House’

 In the Netherlands, the design of the Astellas ‘Mirai House’ is a great example of a shift in emphasis from the physical environment to the work environment. IADP-partner UNStudio was involved in designing the Research and Development Headquarter for the international pharmaceutical firm Astellas on a prominent location within the bio science park. The European headquarters of Astellas in Leiden, Mirai house, aims to benefit from the knowledge available locally. In this way Astellas aspires to offer excellent treatment options for doctors and patients and to ensure that the medicines developed follow the regulations applicable in the individual countries of the EU.

During the development of medical treatments, Astellas mobilizes external resources and proactively involves partners at every step of the R&D process. In the early discovery phases Astellas collaborates both with acclaimed academic institutions and with public and private organizations to complement the available own knowledge. Essential for this co-creation is the organization of the science park and the location of the headquarters within the innovation park. The building is seamlessly and physically embedded in the park by providing clear sightlines and creating a pleasant, open and transparent working environment for Astellas employees, in addition to an agreeable and welcoming gesture to their international visitors.

UNStudio proposed a development that put an emphasis on an innovative mix of functional use and that offers architectural quality and new urban interaction. In the public space surrounding the building an emphasis is set on the human scale and on pedestrian and bicycle movement to encourage human interaction and facilitate social connections.

The organisation and materialisation of the building ensures clear views towards each of the three functional areas within the main framed volume surrounding a courtyard: offices, laboratories and entrance hall. The floor plans in the interior are flexible and based on the campus concept, where emphasis is placed on communication.

In line with the DNA of the park the building volume of the Mirai House aims to integrate the research and laboratories in an organic way with the more organizational additional requirements of a large company such as offices and ancillary functions. By streamlining these operational aspects Astellas strives to connect with other partners in the R&D process and to stay at the forefront of innovative scientific discoveries. In the Leiden Bio Science Park there are around 106 tenants linked to bio sciences institutions and medical companies employing a total of around 18.000 professionals in a range of companies from start-ups to well established multi-nationals. Together they form a symbiotic work sphere supporting research, education, networking facilities and business partnerships.

Innovation programmes and their relevance to the work environment

The Organisation for Economic Co-operation and Development (OECD) definition of innovation is “production or adoption, assimilation, and exploitation of a value-added novelty in economic and social spheres; renewal and enlargement of products, services, and markets; development of new methods of production; and establishment of new management systems. It is both a process and an outcome”. A 2013 survey of literature on innovation found over 40 definitions. Definitions of innovation programmes are even more diverse. Within the IADP we talk about innovation programmes as a cluster of activities aiming at establishing innovation (see above). Activities are most often about:

– Knowledge exchange;

– Support new business cases (by financial vouchers);

– Connecting talent from diverse backgrounds;

– General business development support

– network activities.

Dutch cases – innovation programmes – work environment relevance

 In general, Dutch innovation programmes are not always linked to a specific science park or industrial innovation campus. Sometimes there is not even an urban link and the focus of these programmes is purely at the regional economy, like the Dutch Rijk van Nijmegen 2025 innovation programme for instance.

What we learn from other Dutch innovation programmes is that these really add to the work environment by their community and business stimulating role. Sometimes these programmes even play a crucial role in establishing ‘physical’ knowledge intensive real estate by offering subsidized ‘start-rents’ and by doing so offering an interesting business case for real estate investors.

Novio Tech Campus, Nijmegen

Novio Tech campus in city of Nijmegen offers 10,000 m² of state-of-the-art research infrastructure and accommodation for entrepreneurs and researchers in the Life Sciences, Health and HighTech sectors. In close corporation with its partners Kadans Science Partner and SMB Life Sciences, Novio Tech Campus offers entrepreneurs access to the expertise, facilities and (inter-)national networks of companies and knowledge institutions. They also provide start-ups and young companies an integrated package of facilities and support for their enterprise.

In particular SMB played a crucial role in the establishment of the campus. Without this support programme the initial business case of the first building of the campus would have been much more difficult. Later on, the role of the programme changed and is incorporated in the new Business Generation Health & Technology programme. Recently the Business Generation Health & Technology (BGHH) has been established as implementation programme with the aim to increase employment by innovative entrepreneurship particularly in the (top) sectors life sciences & health (LSH), high tech systems & materials (HTSM) and chemistry to stimulate and support. There are three core activities defined focused on assisting innovative enterprises (start-ups, scale-ups and grown-ups). With three work programmes:

– an incubation work programme for (very new) start-ups

– an acceleration of work programme for scale-ups

– an activation work programme for established SMEs (grown-ups)

In addition, there are the following support activities.

– Marketing & communication to put the ecosystem on the map

– Scouting and screening of new business opportunities

– Knowledge sharing events for entrepreneurs and partners

Although the Novio Tech SMB support programme was crucial to the initial business case of the campus, its role has changed and is nowadays important for the ‘soul’ of the campus, at least according to the CEO of Novio Tech Campus.

Brightlands Chemelot Campus, Geleen

Brightlands Chemelot campus in Geleen is home to a vibrant and fast-growing open community of ground-breaking and world-leading companies and knowledge institutes. Facilities include the latest R&D and manufacturing infrastructures. The Brightlands Innovation Factory is the entrepreneurial backbone of the Brightlands ecosystem states that world-class industry knowledge and expertise are coupled with expert supported programmes, value-added services and facilities, and access to funding. The business development team at Brightlands Chemelot Campus is the partner for growth on campus. The team helps to shape new businesses by combining IP positions, facilities, networks and venture capital, and more, all of which strengthen the clusters within the campus’s prime scientific sectors and provide services in the campus’s Service Boulevard.

Brightlands Chemelot Campus is home to the Maastricht Science Programme and Chemelot Innovation and Learning Labs (CHILL). This institution offers chemistry courses for students and professionals. Building and nurturing a community of this kind takes effort. Brightlands Chemelot Campus believes in the efficacy of community-building initiatives, such as seminars, network meetings, TEDx events, sports, and vitality programmes such as BtheMove, and a range of effective campus communication channels. These ‘soft activities’ are valued of more importance to the work environment than the actual physical real estate and shared facilities.

DSM Campus, Delft

At this campus, various successful public-private R&D programmes are running and available to the companies, universities and other stake holders. The Yes!Delft Incubator, for instance, offers facilities and services in a high-tech centre, including office space, meeting facilities, technical workspaces, coaching services and regular networking events. Europe’s largest public-private innovation partnership was created in 2010 by the European Institute of Innovation and Technology. Climate KIC brings together 162 partners to educate and develop innovation to solve challenges caused by climate change. DSM, TU Delft and Deltares are all part of the Dutch Climate-KIC centre and by doing so offering a unique work environment in Delft.

Pivot Life Science Park, Oss

In another Dutch example the regional innovation programme the “Power of New Business Oss” offers companies at the Pivot Life Science Park in Oss financial vouchers in order to test new business cases. Specific, and expensive, early drug recovery tests are supported by this regional innovation programme. This is an example of a very tailored support from a more abstract programme, but also at Pivot Life Science Park Oss the general attitude towards the activities of the innovation programme is that it offers a unique flavour to the campus community and its work environment. By talking to the entrepreneurs, it became obvious that the actual business stimulating activities are valued, but its community engagement activities even more.

It is also seen in Oss that the brand that the programme adds to the campus management package strengthens the actual content.

In conclusion

It can be concluded that a balanced development of modern innovation areas is an important precondition for success in the short and long term. In this paper, we have focused on the value of soft factors to the work environment, in particular Dutch innovation programmes, and the need for a comprehensive approach.

Years of involvement of the partners of the IADP in the (re) development of several Dutch science parks and industrial innovation campuses learns that in the Dutch practice this principle is widely accepted but not always valued correctly. In some cases, there is still either a sharp focus on the real estate development and operation or on regional innovation programmes. Management of an integrated business case is a rarity, although some examples described in this paper show otherwise. The ownership situation in Dutch science parks usually doesn’t help either. Often a separate real estate company focuses on a balanced real estate exploitation, with limited attention for the structuring and management of innovation networks. Even if the importance of these networks and communities is recognized as vital to a regional economy.

Physical hardware (real estate, infrastructure), such as incubator centres, laboratories and meeting places are of course important, but only in a facilitating sense. Based on an analysis of several Dutch science parks (true innovation areas do not exist yet in the Netherlands) and innovation programmes learning points can be derived with regards to the comprehensive approach, the management, ownership, and content of innovation programmes. It can be stated that although an innovation programme is an important pre-condition in establishing a science park, it is not a unique selling point anymore. In one way or the other these programmes are part of the management package of almost all science park or campus in the Netherlands.

Key take away is that science parks and industrial innovation areas develop into modern innovation areas, including their management and the offered services. Innovation programmes have become an important element of the offered service package and sometimes play a crucial role in the initial business case of the real estate. The programmes (and its activities) are very valuable to the work environment, but are so common that there not considered as a unique selling point. Most important is that these programmes create a ‘soul’ and specific ‘flavour’ to the park, campus and its community. At least, that is what the analysis of various Dutch cases teaches us.

Bibliography
  • Capello Roberta and Andrea Morrison (2005), An evaluation of the effectiveness of science parks in local knowledge creation: a territorial perspective. Paper for the 5th Triple Helix Conference. Turin.
  • Dinteren, Jacques van (2007), Enjoy work! Als leidend principe. Een nieuw type werklocatie. In: Real Estate Magazine (50), pp. 24-29.
  • Dinteren, Jacques van, Debbie Pfaff (2011), Science park: innovatie of imago? In: Real Estate Magazine, no. 32, pp. 32 – 37.
  • Dinteren, Jacques van, Willem Keeris (2014), Innovatie vraagt om investeren in R&D-vastgoed. In: Real Estate Research Quaterly, april, pp. 26 – 34.
  • EC (2014), Setting up, managing and evaluating EU science and technology parks. European Commission.
  • Hansson, Finn (2004), Science parks as knowledge organisations. The ‘ba’ in action? MPP working paper no. 15. Copenhagen Business School. Copenhagen.
  • Ratinho, Tiago, Elsa Henriques and Luís Maltes (2007). Science parks and business incubators: the Portuguese case. Paper for the European Investment Bank.
  • Sanz, L. (2016), Understanding Areas of Innovation. In Anna Nilina, Josep Pique, Luis Sanz (red.): Areas of innovation in a global world. IASP (e-book).
  • Weterings, Anet, and Roderik Ponds (2007), Regionale kennisnetwerken en innovatie. Rotterdam: NAi Uitgevers publishers.

 

[1] Factually speaking, Sanz refers to an Innovation Area. We prefer to reserve this term for the different concepts combined. According to Sanz’ definition, an innovation area can be both considered at a sub-local and regional level. When it comes to the regional level, we prefer to use the term innovative region.

[i] We consider an innovation area as an overall idea for different concepts such as science and technology parks, (industrial) co-innovation parks and innovation districts

Real estate and hospitality: inseparable!

By Daniël Mutsaers, PT Finance, partner IADP

How often didn’t we say that “if we had been involved in the process at an earlier stage, things would have looked very differently”…

Figuur 2 Daniel

As the hospitality experts of The Innovation Area Development Partnership, we are often called upon to create added value to campuses and their buildings in such a way that campus and building residents feel optimally facilitated. And too often we find out that the power of hospitality in the design phase is constantly underestimated.

Of course there is always (usually…) sufficient attention paid to ensuring enough parkings, a proper heating/cooling system, clean toilets and a trendy interior with consultation areas, for example. However, we experience that people, when equipping specific facilities, reason too much from the logical real estate mindset instead of from a more sensitive hospitality approach.

What exactly is “Hospitality?” Another trendy catch-all term is “Experience.” What it is all about is that the daily campus resident and his/her guests should feel like a fish in water. Emphasizing the word ‘feel’. That is, of course, by definition a personal interpretation. And therefore, it is difficult to interpret. On the one hand, it is all about the very small details. However, is really good coffee a small detail? Did you know that 35% of organisations do not offer their guest any coffee at all?
It is also about the heartfelt smile of the entire hospitality team.  A welcoming entrance is important, but having a strong foundation in order is also essential. For one thing, it is important that the coffee corner is situated along the walking lines from the building’s entrance, but at the same time it should breathe the intimacy of a living room. And preferably in such a way that it also combines the reception of guests. Cost optimization!

For a campus environment, the foundation is a little bit more complex than that. For example, because of the mix of different types and international campus residents, because of access regimes, which make a warm welcome difficult, and, not least, the mixture of old and new buildings. Community building support hospitality, but that needs the investment of a lot of energy. Also, the consideration between security (“a feeling of safety”) and hospitality causes campus organisations to relapse into traditional constructional solutions, instead of thinking about solutions that integrate security and hospitality.

You may think we are stating the obvious… but we would like to show you around various campuses and buildings, where people, on a daily basis, still experience obstacles from the real-estate-driven choices made during the development phase.

And then, the business model. Real estate managers are becoming increasingly and rapidly convinced of the importance of hospitality when this involves a clear profit. The sum of a higher productivity, less absence and returning customers, is not very complicated. This is especially the case when combining various hospitality functions as much as possible from the process chain in the front office

But probably even more important: committing talent to you! By facilitating a top working environment. Things that Google and Facebook have been doing for several years for their offices. In our catering tenders, we more and more often see that employers are willing to invest again in an attractive lunch concept in combination with high standard fresh-bean coffee.

These are all things that optimize the real estate value. Happy employers, because of happy campus employees, and therefore happy residents who are willing to pay a higher price per m2. The rental value ladder shows this effect:

Figuur Daniel

Our advice: involve specialists from the hospitality point of view, in a timely manner, as of the design phase. This prevents any unnecessary interventions afterwards to optimally facilitate your campus residents and guests. Substantiated by solid business cases which demonstrably pay off your investment.

Would you like more information about what IADP can add to your campus and buildings, with regard to hospitality, or would you really like us to show you around various reference buildings and projects? Please contact Paul Jansen (+31 6 535 763 99) or Daniël Mutsaers (+31 6 215 803 99), business partners at IADP.

Prof. dr. Jacques van Dinteren, Innovation Area Development Partnership / Zjak Consult

Paul Jansen MSc., Innovation Area Development Partnership / Caudata

The science park concept is not static. Given the nature of the activities and the institutions it focuses on, it should not be considered likely that this would be a static concept. Until the beginning of this century this concept was predominantly viewed as a ‘stand-alone’ activity and often primarily as a real estate development. Currently, a science park (and similar concepts) are increasingly being considered as a focal point in a network of innovative companies and institutions. The management of science parks has kept up with these changes over time. New developments demand further changes. At the same time, new concepts have developed and the science park does not have the exclusive right to being and becoming a focal point of innovations.

Innovation areas

In the early stages of the development of science parks the emphasis was placed on real estate. Especially during the last three decades this has significantly changed and the primary focus has shifted to stimulating innovation. That is the first trend. A second trend is an increase in scale. As science parks have reached the limits of their growth, occasionally “branches” developed in other parts of the region, which stresses the importance of previously mentioned networking even more. One out of three members of the IASP (International Association of Science Parks and Areas of Innovation) have two or more locations. Furthermore, those ‘branches’ can not only be found in the regions which are strongly focussed on innovation, but also at other work locations such as industrial co-innovative science parks (developed around a leading innovative company instead of a university), creative factories (creative companies under one roof) and innovation areas. The last category is relatively new and can be defined as “a designated zone with its own specific management team, whose main objectives include economic development via the promotion and attraction of selective innovative business for which specific services are provided or made available, and that may also include residential and cultural zones or facilities, or be embedded in urban spaces having such facilities, and with which the economic aspects of the area of innovation interact” (Sanz, 2016). The management of such a development is, as already was the case in science parks and co-innovative parks, still important, though functional blending is a relatively new element in this concept. The link with a university might be less strong, though can be partially overcome by having a “branch” in a different location.

Figure 1: Eindhoven region (The Netherlands) as an example of an innovative region with several focal points Eindhoven

It is important to establish the fact that the scale can vary widely. Ann Arbor SPARK (U.S.A.) covers an entire region, while 22@Barcelona is 200 ha. All the more reason to distinguish between innovative regions with multiple focal points (to illustrate this: see figure 1) and innovation districts which, in terms of scale, are comparable to co-innovation parks and science parks. Innovation area will then be the umbrella term for science parks, industrial co-innovation parks and innovation districts.

Except for the fact that innovative regions currently may have multiple focal points and a network of companies and institutions which are located in those innovation areas can be created, and companies and institutions which are located in other parts of the region must establish that these innovation areas and innovative regions are also included in the worldwide networks (telecommunication, travel options etc.) through the process of globalisation.

The figure below sketches the development over the past decades. It is an ideal-type image which will rarely apply to a specific innovation area. Figure 2 mainly shows that currently much more emphasis is placed on networks and (therefore also) on the regional embedding of an innovation area.

Figure 2: ideal development of the innovation area concept

Ontwikkleing management

Changing management

The right section of this rough sketch of the development of the concept also shows the manner in which the management of these concepts must also adapt. Often this is all covered by the common denominator “park management”, though the scope of the tasks has become much broader, or can be addressed in a much broader manner. Whereas park management originally still strongly focussed on the maintenance of the real estate, it was fairly quickly combined with making services and facilities available, and subsequently by the wish to create a ‘community’ in the park. Firstly, the attention is focused on the employees. Joint festivities, sports events and having a drink together should help to develop this. The next step (once more: in an ideal typical process) is to connect the people who work in the park as well as the companies. Match making, organising seminars, support with patent applications are all matters which are part of the extensive service package which the park management offers. Some parks take this one step further in the form of management encouraging serendipity.  Essentially it comes down to: how can people with different backgrounds be connected and collaborate, to enable new insights and ultimately new products to be developed through “pure coincidence” (serendipity)?  This may manifest itself in a building in which the concept resembles all kinds of creative work places which are popping up all over the place in which flexible, playfully designed spaces with all kinds of facilities and short lease periods are available for creative people, entrepreneurs and others. An example of this in a science park is the NetWork Oasis at the Joensuu Science Park (Finland). This concept will only become truly interesting when the idea of serendipity is combined with a method in which different researches and product developers with different characters and backgrounds are brought together. This is done via a step-by-step process including training camps and work sessions based on which teams are formed, which will then focus on the development of a new product (see Kakko, 2013). This has consequences for the management method, as shown in the table below. Not that this will make project management obsolete. The schedule shows that by including networking, and particularly from the perspective of serendipity, other skills are required from park managers and involved parties.

 Table 1: difference between project management and management of serendipity (Kakko, 2013)

Serendipity management

In line with the previously mentioned processes of increased scale, an increasing amount of attention is given to the park management organisation of the relationships with companies and knowledge institutions which are located outside the park, though in the region. Certainly in combination with the science park’s satellites, this can lead to an innovation area on a regional level.

Interdisciplinary management team

It must have become clear that buildings are no longer the main aspect of science parks and – more broadly – innovation areas, but that community and networking are essential. This distinguishes this concept from industrial parks, business parks and office parks. Which doesn’t alter the fact that ultimately the businesses and institutions located in the innovation areas also need a roof above their heads. In view of this, specific requirements can be placed on buildings, particularly from the desires for community building and networking. For instance, pedestrian flows, the creation of meeting points, concentration of catering and restaurant facilities where pedestrian flows meet, creative work environments, etc. For the successful management of a science park, it is crucial that the different layers in the social-spatial structure of a science park are recognised and are connected to: the infrastructure, the buildings and the networks. This actually makes an interdisciplinary set up of a park management team an absolute necessity.

Redevelopment

In light of the developments outlined here, it is obvious that new innovation areas should be developed in accordance with a modern plan. This means they are embedded in the regional economy and are part of broadly set up innovation programs. All of that in an attractive spatial setting with real estate which optimally facilitates this new manner of working. This can only be successful if these developments are managed from an integral management philosophy.

It concerns not only the management, though also the nature and the design of the buildings, the quality of the surroundings and the possibilities for meetings etc. The older science parks and co-innovative parks are not sufficiently geared to do this. If they want to keep up with the increasingly faster paced developments in the area of innovations, a physical and functional redevelopment will be required, including a reorientation of the management.

Quoted literature

  • Kakko, Ilkka (2013), The Fundamentals of Third Generation Science Park Concept. Paper for the UNESCO-WTA International Training Workshop, Daejeon, Korea.
  • Sanz, L. (2016), Understanding Areas of Innovation. In Anna Nilina, Josep Pique, Luis Sanz (red.): Areas of innovation in a global world. IASP (e-book).

 

Room for Knowledge Development: from Science Park to Innovation District

Prof. dr. Jacques van Dinteren, Innovation Area Development Partnership (IADP)[1] / Zjak Consult

Paul Jansen MSc., Innovation Area Development Partnership (IADP) / Caudata

Any services and knowledge economy includes numerous innovative companies and institutions that are engaged in research, data, knowledge and information and the acquisition and transmission thereof. For a large number of these organisations an office location is sufficient. However, when it comes to basic research – especially in terms of beta disciplines – there are often more stringent requirements. With a view to cooperation opportunities, appearance and work environment quality, some of these companies have a need for specific job site concepts that capitalize on these aspects, such as science parks and industrial campuses. Moreover, the past two decades have seen the rise of new concepts that will discussed in more detail in this paper.

 Knowledge and innovation are essential elements for most countries’ economies. With a successful innovation policy, one cannot ignore the physical environment that businesses (both large and small) require in order to successfully execute their work and ideas and generate/share knowledge, all focused on creating innovative products and services. These companies often require special buildings that may require large investments. Buildings may include offices as well as laboratories, clean rooms, small-scale (test) production units, and so on. These sites may thrive in many places, but economic researchers assume that a concentration of such buildings (and thus innovative companies) results in added value for all companies involved. Although research into these assumptions shows quite variable results, this assumed added value has resulted in a clustering of companies in numerous science parks. However, numbers are difficult to provide in the absence of a precise definition of such parks. One indicator may be the number of members of the International Association of Science Parks & Areas of Innovation (IASP; www.iasp.ws): currently approx. 400.

Science Parks

When talking about the clustering of innovative companies, relatively speaking, the science park is the oldest concept. Since the rise of science parks in the early fifties, quite a few definitions have been introduced. For example, the IASP places strong emphasis on the science park as an organisation of professionals committed to exchanging information flows between companies and research institutions, promoting innovation in companies and assisting starters and spin-off businesses. However, Hansson (2004) focuses more on appearance and, on the basis of a number of definitions, concludes that science parks almost always have a university in close physical proximity, focus on knowledge and high tech companies and include a special organization that helps starters. We support the definition of the IASP. We believe science parks are primarily about stimulating innovation through well-functioning networks. Property and area development are crucial, but are nevertheless of secondary importance.

The development of science parks is a relatively recent phenomenon: of all European science parks, only 4% were established before 1980. 27% were established in the 1980s and the rest thereafter (EC, 2014). Science parks are primarily an urban or, even more so, a metropolitan phenomenon. Judging from the membership of the IASP, only 6% of parks are located outside of cities and 40% can be found in cities with well over a million inhabitants.

Two-thirds of the science parks in Europe are situated on university grounds and 17% are located no less than 5 km away from such institutions. Earlier IASP research has shown that worldwide, approx. 40% of all science parks have an on-site university or one located in their immediate vicinity. The absence of a clear link with a university may result in a relatively ineffective park (Ratinho et al., 2007). But inefficiency may also occur if the concept is not taken seriously and companies only establish themselves in such parks for their public image and appearance. Moreover, the relationship with the university is not necessarily or solely based on intense knowledge sharing between the research institute and companies based in the park. The availability of various facilities and a pool of students (interns) and graduates play a significant role and are sometimes even more important than the actual sharing of knowledge (Van Dinteren and Pfaff, 2011; EC, 2014). It shouldn’t necessarily come as a surprise that companies don’t solely focus on adjacent universities for knowledge sharing and co-innovation. When talking about crucial knowledge or information, these transcend the decision to establish oneself in a certain region (Weterings and Ponds, 2007). Nevertheless, it is these relationships between companies and knowledge institutions that distinguish science parks from regular business or office parks. Science park management teams (the fact that there are separate management teams is another factor that makes these parks unique) are often committed to these relationships and try to promote cooperation between individual companies and companies and universities. This allows for the creation of an informal network (‘local buzz’), resulting in substantial positive effects when creating innovation networks between local actors (Capello and Morrison, 2005). At the same time, one could write an entire book about the differences of opinion on this aspect.

Although the stimulation of networks, cooperation and knowledge sharing are essential to well-functioning area management, attention is equally paid to the creation of a community. One could consider the networks as communities, but when talking about communities, these are often less ‘strict’. Communities involve informal contact between employees, meeting each other at seminars, organizing sports events, concerts, and so on. And all this in a well-designed environment that promotes creativity.

The Industrial Co-innovation Park

Earlier parts of this paper have focused on the relationship between science parks and universities. At the same time, a science park may also develop itself around a different major research institution. For example, even a company may act as the pivot. In the latter case, it is better to speak of an ‘(industrial) co-innovation park’. Where the crystallization point in a science park is the university, in a co-innovation park this is a leading industrial company. Examples include the DSM Industrial & Biotech Campus (DSM, Delft, Netherlands), Kodak’s Eastman Business Park (Rochester, USA), the AUDI Ingolstadt site (Germany), the Luxembourg Automotive Campus (established around Goodyear’s Luxembourg Innovation Center and IEE s.a. sensing solutions) and Chemelot Campus (DSM, Sittard/Geleen, Netherlands).

Such developments are the result of company strategies, focused on co-innovation: the cooperation with other companies and institutions to develop innovative, creative solutions and products. Nowadays it has become harder for companies to keep up with changing technology, economy and markets by innovating solely by themselves. Technology in particular has become so specialised that nobody can afford to do everything at the highest level on their own. Cooperation with other companies, institutions and universities is required. To succeed, businesses must overcome their deep-seated fear of knowledge sharing. Fortunately, in many cases they were able to do so: these days, it has become popular to view cooperation with strategic partners as essential in the development of technological innovations.

Continuous innovations across organizational boundaries may lead a company to the idea of establishing an industrial co-innovation park on its site (or adjacent to it). Precondition is that the company must understand the dynamics of inter-organisational networks and develops – or has already developed  – skills in managing networks and facilitating network processes.

The practical possibilities for establishing a co-innovation park, in terms of available space, are often attributable to the downsizing of activities or excessive hectares of expansion reserve. Downsizing may partly occur by offshoring activities, but may also be related to changing production conditions. For example, these days the manufacturing of semiconductors requires less and less space.

So, setting up an industrial co-innovation park can be attractive if the leading company:

  • strongly advocates the idea of innovation and wants to innovate in close cooperation with its suppliers (open innovation or co-innovation);
  • is established in a region that has the characteristics that stimulate innovation,
  • the space required by other companies and is able to take care of the qualities that are asked for to make such a park a success.

This is not to say that co-innovation always asks for physical proximity of the firms and institutions involved, but being located in same park makes it easier to communicate. Moreover, companies situated on such integrated industrial areas may share the material supplies, utilities and services focusing on – for example – safety, quality, personnel and the environment.

Innovation Districts

A relatively new phenomenon in the field of innovation is the innovation district. In an innovation district, the cooperation between companies and institutions is still essential, but the concept differs in specific ways from the two aforementioned districts. First of all, these districts are often located inside urban areas, whereas most science parks are located on the outskirts of cities, in suburban locations. Moreover, innovation districts are often not newly developed, but are formed after a restructuring of an existing situation. As a result, an innovation district often has a mixture of purposes, including housing. In organisational terms, this often means a shift from the triple helix to the quadruple helix. And whereas science parks often place a strong emphasis on beta disciplines, an innovation district often takes a broader approach and thus offers room for a wide variety of creative industries and consulting firms. The link with a university may be less strong, but may partly be replaced with auxiliary branches. In addition, specialisation is sometimes not a key aspect of these districts. For example, 22@Barcelona focuses on four different clusters: Media, Information and Communication Technologies (ICT), Medical Technologies (MedTech), Energy and Design.

Similar to other districts, innovation districts have the requirements of good, dedicated management that encourages the creation of a community and networking between established companies and institutions. And compared to industrial campuses, there is often a leading company or institution (hospital, university, research institute).

Sanz (2016) describes an innovation district[2] as follows: “a designated zone with its own specific management team, whose main objectives include economic development via the promotion and attraction of selective innovative business for which specific services are provided or made available, and that may also include residential and cultural zones or facilities, or be embedded in urban spaces having such facilities, and with which the economic aspects of the area of innovation interact”.

Science parks, innovation districts and industrial innovative campuses are different concepts, especially in terms of target groups and physical form. At the same time, they show strong similarities in terms of work environment and management. Proper management – both in physical and functional terms – is a prerequisite for all three. Looking at the three districts together, they are all part of the overarching concept on an ‘innovation area’

Work Environment

Whereas during the early days of science parks the focus was often on physical development, over the years people have started to realise that science parks require a completely different approach. About two decades ago, the adage ‘brains, no bricks’ was introduced. This broke with a science park as mere property development. At the same time, this doesn’t mean that the physical environment isn’t vitally important in stimulating the process of creativity, interaction and innovation (Van Dinteren en Keeris, 2014). The importance of this is even increasing now that people are realising that an attractive (physical) environment contributes to creativity and competitiveness. Here we could make a distinction between facilities for employees and facilities for companies.

The sharing of facilities for companies, which people hope will lead to knowledge sharing and synergy, is a major reason why companies establish themselves on a campus or science park. This aspect is even more important than the actual possibilities of cooperating with the university itself, as shown by a survey among entrepreneurs established at Dutch science parks or campuses. Besides the presence of a young student population, the availability of information systems, laboratories and clean rooms is also important (Van Dinteren en Pfaff, 2011).

On the other hand, when talking about facilities for employees (including ambiance created by buildings, design and landscaping), management has the following reason for their existence: if employees enjoy their work, they simply work more effectively. If they work more effectively, this subsequently has a positive effect on productivity and creativity. Ultimately this leads to better outcomes for businesses. Over two thirds of entrepreneurs at Dutch science parks (completely) agree with the statement that, “given the increasingly tight labour market for highly educated people, it is essential that a science park offers an optimal working environment” (Van Dinteren en Pfaff, 2011). This involves extensive amenities (e.g. shops, hairdressers, restaurants, fitness centres) and an attractively landscaped park with recreational facilities (walking and running routes, meeting places, and so on). A concept such as ‘Enjoy Work’ therefore doesn’t primarily focus on the target group, but on creating a comfortable working environment (see www.enjoy-work.com; Van Dinteren, 2007).

Towards a Conceptual Model

Due to the very particular nature of innovation areas, establishing such areas and monitoring their quality is not easy. So what aspects are essential in creating a successful innovation district? Previous blogs focused on regional factors (which the developer has little to no control of; see blog1) and the factors that affect the park itself (see blog2). In summary:

Tabel

Considering the aforementioned, then various aspects can be displayed a model as presented in Figure 1.

Figure 1: Towards a conceptual model of innovation areas

Conceptueel model ENG

As stated earlier, innovation districts must be developed in full. This conceptual model provides a tool and may function as a checklist to assess whether all ingredients are present in the development of an innovation district. If aspects are missing, then it should be immediately clear that (additional) attention must be paid to these aspects. But above all, using this model, the correlation between various programmes, actors, management, real estate, infrastructure becomes clear. By applying this model in various developments around the world, the IADP currently validates the proceeds of this model in concrete projects.

[1] The IADP is a collaboration between eight Dutch companies, active in areas including market research, concept development, urban planning, architecture, park management, financial advice and investments. See: iadp.co

[2] Factually speaking, Sanz refers to an Innovation Area. We prefer to reserve this term for the different concepts combined. According to Sanz’ definition, an innovation area can be both considered at a sub-local and regional level. When it comes to the regional level, we prefer to use the term innovative region.

Bibliography

  • Capello Roberta and Andrea Morrison (2005), An evaluation of the effectiveness of science parks in local knowledge creation: a territorial perspective. Paper for the 5th Triple Helix Conference. Turin.
  • Dinteren, Jacques van (2007), Enjoy work! Als leidend principe. Een nieuw type werklocatie. In: Real Estate Magazine (50), pp. 24-29.
  • Dinteren, Jacques van, Debbie Pfaff (2011), Science park: innovatie of imago? In: Real Estate Magazine, no. 32, pp. 32 – 37.
  • Dinteren, Jacques van, Willem Keeris (2014), Innovatie vraagt om investeren in R&D-vastgoed. In: Real Estate Research Quaterly, april, pp. 26 – 34.
  • EC (2014), Setting up, managing and evaluating EU science and technology parks. European Commission.
  • Hansson, Finn (2004), Science parks as knowledge organisations. The ‘ba’ in action? MPP working paper no. 15. Copenhagen Business School. Copenhagen.
  • Ratinho, Tiago, Elsa Henriques and Luís Maltes (2007). Science parks and business incubators: the Portuguese case. Paper for the European Investment Bank.
  • Sanz, L. (2016), Understanding Areas of Innovation. In Anna Nilina, Josep Pique, Luis Sanz (red.): Areas of innovation in a global world. IASP (e-book).
  • Weterings, Anet, and Roderik Ponds (2007), Regionale kennisnetwerken en innovatie. Rotterdam: NAi Uitgevers publishers.

Your own innovation campus

Strengthening your business

Prof. dr. Jacques van Dinteren, Zjak Consult

For today’s businesses, it is crucial to work together on innovation with other firms and organisations. Technology has become so specialised that no one can afford to do everything on their own. Co-creation and co-development with partner firms, institutions and universities are essential for being successful. Most new, successful products are the result of collaborative work between engineers, marketing experts, designers and often colleagues and academics as well. The benefits are lower costs, faster time to market and higher return on investment.

In this era of technology and innovation, science and technology parks are growing in number at an increasing pace since the first one was created in the 1950s. Less well known is the development which involves medium-sized and large innovative firms establishing their own ‘science park’. We call this an industrial innovation campus.

The industrial innovation campus differs from a general science park in various ways:

  • In essence it is all about the links between the host firm and the partner firms established on the company site, whereas the focus of firms located in a science park is clearly on the nearby university.
  • The inter-company links on a science park are generally less intense than those on an industrial campus.
  • Because an industrial campus is strategically important for the host firm, it will have an admission policy which will be much stricter than in most of the science parks.

Today, your firm may have the space and buildings available to set up such an industrial innovation campus and perhaps you have taken the strategic decision to consolidate your R&D on a single site. This might be the right time to invite other firms to your site to work together and enhance the innovation potential. Although it is possible to communicate worldwide with suppliers and other firms, proximity clearly makes communication easier. Especially when it is about strategies and innovation. That is why a campus can help to improve your business.

Is setting up a campus attractive?

The answer to the above question is “yes” if the leading firm

  • strongly advocates the idea of innovation and wants to innovate in close cooperation with its suppliers (open innovation or co-innovation);
  • is established in a region which has the characteristics that stimulate innovation and
  • has the space needed by other firms and can create the qualities required to make such an estate a success?

The last two questions are very similar to the questions that should be posed towards developing a science park. See my two blogs that have been published about these aspects:

For regional innovation climate see blog:  click here

For qualities of the site see blog: click here

figuur

So, let us concentrate here on the first question about the firm’s philosophy. Let us start with the observation that nowadays it has become harder for firms to keep up with the changing technology, economy and markets merely by innovating. Technology in particular has become so specialised that nobody can afford to do everything on its own at the highest level. Cooperation with other firms, institutions and universities is essential. To succeed, companies need to overcome their deep-seated fear of sharing and in many cases firms have been able to do so: it has become popular to view collaboration with strategic partners as essential resources in the development of technology innovations.

Continuous innovations across organisational boundaries might lead a firm to the idea of establishing an industrial innovation campus on its site (or adjacent to it). A precondition is that this firm understands the dynamics of interorganisational networks and develops – or has developed – skills in managing networks and facilitating network processes. Today, firms often have the space available for such an industrial innovation campus. They may have outsourced activities to other countries, need less space due to new technology or bought too much ground in the past, etc. This offers the opportunities for developing your own industrial innovation campus.

Some Dutch examples

Examples in the Netherlands include Chemelot (DSM, Sittard-Geleen), BioTech Campus (DSM, Delft), Novio Tech Campus (NXP, Nijmegen) and High Tech Campus (originally Philips, Eindhoven).

 

Novio Tech Campus, Nijmegen (The Netherlands)

Our market researchers and urban planners have formulated a restructuring plan for the business area of NXP semiconductors. NXP is concentrating its activities on its site and needs less space. This offers the opportunity to create the Novio Tech Campus where start-ups and other activities can find attractive accommodation. Focus is on health care and semiconductors, but other activities are also welcomed to stimulate crossovers.

DSM Industrial & Biotech Campus, Delft (The Netherlands)

Delft wants to present itself as a City of Technology. In order to take advantage of the huge potential in white biotechnology, DSM has the will and the resources at its disposal to provide the city with an important (economic) impulse. The consultants of Royal HaskoningDHV have therefore set out a strategic vision for the (re)development of the DSM site into a high quality Industrial & Biotech Campus. The aim is to create an attractive working climate and promote collaboration with knowledge organisations like Delft University of Technology and other firms working with DSM or in the same fields.

High Tech Automotive Campus, Helmond (The Netherlands)

Local businesses in the automotive industry, education and knowledge institutes and the municipality of Helmond took the initiative to develop an automotive science park, using the available space on the industrial estate where some firms in this industry were already established. The idea is to create an innovative and sustainable environment in which businesses can cooperate within the automotive sector. Starting from market research and a site analysis, a spatial functional concept has been designed that meets the requirements of the selected target groups. This concept has been translated into an ambitious urban design that blends into the landscape and creates an inspiring working environment.

Concept & market orientation;

heart & soul of the urban master plan

Urban van Aar (Royal HaskoningDHV) & Jacques van Dinteren (Zjak Consult)

Studying major urban developments worldwide, we find that successful projects have a clear and convincing concept in common. A concept strong enough to guide the planning and building process and attractive enough to tempt the market to invest. The question is how to generate such a concept. A second question concerns the role of market studies in this concept generation.

Our studies show that some major projects suffer from delays and lack of sales and even bankruptcy due to the lack of a concept for the envisaged urban development plan. Mistakes we found included:

  • absence of any concept, based on the idea that real estate will always sell;
  • lack of ambition: too much reliance on strategies from the past (“it worked before”);
  • no idea about the preferences of the demand side, no awareness of the competition;
  • a too rigid mono functional concept resulting in a ‘Blue Print’ plan;
  • a concept consisting of marketing slogans, which are expected to tempt investors;
  • failing relations (economic, social, transportation) with the surrounding built environment.

We also found a range of projects with satisfactory sales results but which disrupt the urban environment by creating congestion, environmental problems, vacancies and other issues. All these projects can be assessed as ‘not successful’, i.e. they are not profitable for the city in the long term.

Short term, self-centred approach

It struck us that both developers and governments tend to rely on previous projects, not realising that the market is already saturated or has changed. They continue using the same concept over and over again. “Surprisingly often and for their own reasons, companies put other interests ahead of customers’ interests. (…..) These narrower interests can be characterized as the ‘production concept’, the ‘product concept’, the ‘selling concept’, or simply a ‘short-term, self-centred approach’” (Mike E. Miles et al., Real estate development, 2003). Or put in another way: “Any customer can have a car painted any color that he wants, so long as it is black” (Henry Ford).

Another common approach is to opt too quickly for the most obvious opportunity. An initiator has a promising proposal for a new project (creating jobs and international exposure) and the government wants to support him by offering an available piece of land. The project will then be planned in the same spot ignoring the restrictions of the site and the preferences of investors, future companies and inhabitants, as well as ignoring the existing or future competition. This is an example of a very common error in urban master planning: skipping the stage of concept development and neglecting the required study of future developments: demography, economy, transportation, environment, etc. These planning projects ‘jump’ from site surveys to designs and forget to build a proper set of ideas for the place of the project within the city.

A ‘market oriented concept’ or a ‘marketing concept’

Often, marketing tools and slogans are used to motivate an urban development. Think of ‘Eco City‘, ‘Beach City’, ‘Sports City’ and other similar concepts. If these titles for urban development are used to market a good plan, the project might succeed. But if these marketing slogans are just window dressing, many will fail because a sound foundation  is missing. This is the difference between a ‘market oriented concept’ and ‘marketing concept’.  A sound foundation takes into account and integrates market demand and requirements, transportation, utilities, quality standards, etc. Based on such research, the concept should be resilient enough to cope with the ever changing market and preferences of the public and business world.

Our conclusion is that the planning concept – the set of leading ideas for a development – is the essential and key element in the urban planning process. It forms the link between the regional context, the site’s potential, the market and the socio-economic trends on the one hand and the urban design, how it fits into the city and how it will improve urban life on the other.

Market orientation is indispensable

Let’s go back to our central questions: how to generate the concept for a major urban project and what is the role of market survey herein? The key position of the concept in the planning process is illustrated in the diagram below.

diagram-concept

Without compromising other aspects like the environment, policy and feasibility, one can state that market research is an indispensable part of the concept development. Socio-economic situations and trends are studied in order to generate an overview of motivated expectations – such as limitations and chances – for the specific location. The best examples of these market studies produce an in-depth regional and sometimes even (inter)national socio-economic analysis and forecast which will be translated into a demand forecast and programmes which will form the basis for the concept and the master plan. Cooperation between the market specialists, the client and the master planners is important as this interaction helps focus the socio economic studies and identify chances and opportunities at an early stage. Urban planners must be involved in these early stages: market specialists often use the ideas and experience of master planners to find the decisive details, such as the local market for new ideas which have proven successful elsewhere. On the other hand: market specialist still play a role in later stages of the development process to control how the plan will meet market developments and requirements.

Furthermore, one must remember that when it comes to square metres and rate of sales, the market perspective is limited to between five and ten years. However, the market research is much broader and also focuses strongly on establishing the strategic lines of development for the long term. These strategic guidelines in particular have to be translated into the concept. Obviously, if a specific development takes many years, market research must be repeated on a regular basis, say every five years.

Circular process

Creating a concept based on the research performed is a circular rather than a linear process. Contrary to what many people think, a good concept does not fall from the sky. It is a constant interaction between the potential of the location, regional links, technical possibilities, new opportunities and market developments. It is the heart of the planning process and everyone involved contributes.

An important factor in the concept development is the level of ambition defined by the developer or the government. This ambition reveals the willingness to take certain risks (generally within certain financial limits) in order to achieve a higher goal, such as strengthening the image of the city, resilience, sustainability, etc. Sustainability is definitely an ambition that cannot be ignored.

The method briefly described here is (obviously) not limited to new urban developments or real estate projects. Especially in Western countries, changing demographic and economic conditions require transformations of existing urban areas. Taking into account the importance of sustainability and resilience, such product innovations are essential. Due to the complexity of inner city restructuring processes, the importance of good interaction between market research and concept development cannot be underestimated.

Take your time

In short, a good concept is indispensable in urban development (but also in smaller scale real estate projects). Given that interest, it is amazing that the government and real estate developers often economise on these first steps in the development process, even though a strong urban concept and underlying studies are crucial to the ultimate success of a project. It cannot be denied that creating a good foundation for an urban (re)development plan is more time consuming. However, if one takes into account the lifetime of such a development and its envisaged long term success, there’s no other choice.