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
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.
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.
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.
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.
Prof. dr. Jacques van Dinteren, Zjak Consult
Thanks to the multitude of ways to communicate that are available today, it is sometimes said that distance no longer matters and that – by extension – the geographic location of STPs has become much less important. Nothing could be further from the truth. Surveys among businesses located at STPs demonstrate this. For example, for businesses at Dutch STPs, the proximity of a university, the STP’s geographic location and its accessibility on the regional scale level are still the most important factors. The failure to satisfy these kinds of crucial requirements has jeopardised the success of more than one STP. In some cases there had been no critical analysis of the regional conditions, or those in charge were too convinced of the possibilities of being able to make favourable changes to those conditions, such as accessibility and networking opportunities with other businesses and knowledge institutions. Not all environments are conducive settings for an STP.
If a region has good market prospects for the development of an STP, it is still relevant to ask where exactly the best location is. Site selection compares the available alternatives in terms of various characteristics such as accessibility, environment/landscape, the infrastructure in place (the internet backbone, for instance), the space for future expansion and the proximity of interesting companies and knowledge institutions. From the vantage point of sustainable development, it is also logical to look at the possibilities for (creating) multimodal access and good integration in the landscape. Given the trend to consider STPs an important node in an innovation area, site selection specifically has to provide for a careful integration of STPs in that regional knowledge ecosystem.
Market-based site design: key to success
The target group, functional concept, financial feasibility and functional programme of requirements for the development of an STP can be outlined on the basis of market research. Because STPs usually involve a long development period (up to thirty years even), this requires a specific approach: after all it is virtually impossible to sketch out the market prospects for the next twenty years, for example. The market research for an STP must therefore also explicitly contain an analysis of the region that investigates whether all the conditions imposed by such a development are satisfied.
Our experience has taught that as far as the time horizon is concerned, an in-depth, detailed market research is mainly useful for the medium term. Not many property projects are established in this period however, but a market study gives a first (but nothing more) picture of the feasibility in these early years. In this stage it is important that market research also clarifies the target groups and functional concept. The functional concept describes the STP ‘product’ in functional terms. It is the creative idea that lays the foundation for the design. This has to do with the atmosphere/ambience, ways of working, communication possibilities, spatial quality, etc. Testing should demonstrate that the concept appeals to the target group and will incite them to set up business at the STP.
In our approach market analysis does not stand alone. The exchange of ideas and cooperation between market researchers and designers in developing a vision and concept is unusual, but in our view are precisely the keys to success in achieving a successful plan. In our market studies, the designers and colleagues from other relevant disciplines are involved from the very beginning therefore.
Interdisciplinary site design
“The 21st century science park once again regards the built environment as vital, not as an end in itself but as an aid to the process of creativity, interaction and innovation,” John Allen said during one of the IASP conferences. This calls for new types of buildings, high-quality landscaping and the availability of a great range of services. A design that provides for these new requirements will be a significant success factor for the park. On the other hand, more traditional aspects of a design are still needed, such as safety and security, transport and communication infrastructure, parking facilities, and space for expansion.
It is important to point out here that in our opinion, urban planners are just one of the categories of specialists working on the site design for an STP. A 21st century site design for an STP is not resilient unless it is underpinned by a far broader, interdisciplinary team. Along with a focus on environment and sustainability, market research must be brought into the entire development process in order to share ideas – continually – and create a joint vision from a variety of perspectives or disciplines, which include urban planners, landscape architects, traffic consultants and financial experts.
Because the development of an STP is a long-term project (provided there is a good selection strategy), flexibility in the site design is key, as is stability to secure the return on investments. This means keeping as many options for future development open for as long as possible. The design needs to be organised in such a way that opportunities can be combined right up to the last moment. The core team continually tracks developments that affect the plan, tests the foundation for stability and adjusts the plan if necessary.
Attracting the brains: changing the work environment
The importance of an intelligent design that maximises the chances for innovation, ‘serendipity’ and the exchange of ideas is considered increasingly important by developers, businesses, designers and other parties involved. The line of reasoning in this is as follows: if employees enjoy their work, they work better. If they work better, this positively impacts productivity and creativity. This ultimately leads to better results for companies.
Based on this kind of thinking, a work environment can be created that can benefit the STP’s companies in the War for Talent. Not only in order to generate employees, but also to retain them for as long as possible. A work environment must be created that stimulates the process of creativity, interaction and innovation. A survey we conducted among companies located at Dutch STPs indicated that 69% of them agreed or agreed strongly with the statement that given the increasing shortage of highly educated people on the job market, it is essential that STPs offer these workers an optimal work environment. This means extensive facilities (for instance, shops, hair salons, restaurants and cafés, fitness studios) and an attractively designed STP with recreation options (walking and jogging routes, meeting places, etc.).
The interior design of each building on an STP is largely informed by the need for a pleasant and attractive work environment. The current trend is for employees to collaborate in project- and program-managed working formations where they increasingly connect through virtual meeting points rather than in person on the work floor. This trend is revolutionising our idea of a work environment. A work environment is no longer simply a physical site (i.e. an office with meeting rooms); it may include virtual elements (ICT), as well as more abstract elements (corporate culture and shared beliefs on how to do certain things). Each of these elements is equally important in the creation of an effective and productive work environment, and they are all interdependent.
The need for multi-purpose buildings
Many STPs come with laboratories and cleanrooms. These high-tech spaces have sophisticated and expensive equipment which is often shared by multiple users. Shared use of laboratories and/or cleanrooms requires clear communication lines between users so that security can be safeguarded while innovative experiments are being carried out. Whether the buildings in question belong to small start-ups or to large multinational corporations, it is of vital importance that user requirements be discussed and defined upfront. This is an important step towards ensuring that the requirements for the yet-to-be-built laboratories can be met and that clear boundaries be established with regard to what the various users are and aren’t allowed to do. One way to make appropriate decisions for all parties involved is to carefully weigh one’s choices regarding flexibility and the total costs of ownership (TCO). By doing so, one can establish a well-considered program of requirements that can be used to determine which design criteria the various end users expect to be implemented. Once these steps have been taken, the program can then be used as a guideline in monitoring the design, engineering and construction of the new buildings.
Prof. dr. Jacques van Dinteren, Zjak Consult
“Many have come to view science parks as a type of ‘silver bullet’ with the capability of dramatically improving a region or community’s ability to compete in the global technology and innovation economy. The reality, however, is far more complex.”
IASP chairman Rick L. Weddle
Innovation is the key word in government plans to strengthen the economic climate. Numerous conditions will have to be created for a successful innovation policy. What cannot be overlooked in this process is the physical environment that businesses need in order to be able to successfully work on new ideas, products and services. These are usually very specific buildings that often require major investments. These could be offices as well as laboratories, clean rooms, small-scale (trial) production units, etc. Buildings that can usually be found at Science and Technology Parks. Science and Technology Parks (STPs) are growing in number and at an increasing pace since the first parks were built in the 1950s. Together with universities and other knowledge institutions, STPs, and especially the businesses established there, play a crucial role in the progress of science and the economy. These specialised business parks have become an essential part of local and regional innovative ecosystems.
The development of STPs is many times more complex than the development of a regular business park. While the emphasis early on was on the physical development, along the way developers started realising that STPs require an entirely different approach. Approximately two decades ago the adage ‘brains, not bricks’ was used to stimulate the process of creativity, interaction and innovation. The importance of this is increasing in fact as people realise that an attractive (physical) work environment contributes to creativity and competitiveness. And just as importantly: it helps attract and retain creative, well-educated employees in the War for Talent.
Nevertheless, the adage ‘brains, not bricks’ did not alter the fact that the developed environment is still of crucial importance. The development of an STP calls now more than ever for a well-grounded integrated plan on the area level. It also requires clear ideas for the park management, financing, guidelines for buildings, property financing, etc.
Know the success factors
An analysis of the papers published during IASP conferences over the past years clearly highlights the success factors in setting up an STP. A distinction can be made here between the regional factors (on which the developer often has little or no influence) and the factors that concern the STP itself.
Important regional factors or conditions are:
- A well-functioning network of innovative/creative businesses and institutions
There must be a culture of intellectual interaction, creativity and entrepreneurship in the region. Strong, specializing economies with a good regional or local innovative ecosystem form a sound basis for successful STPs.
- A well-functioning job market of knowledge workers
Technology and knowledge companies are even more dependent than other economic sectors on well-educated, creative workers. This condition is therefore essential. It is also important that the region be able to attract and retain these knowledge workers.
- An attractive residential and living environment
An attractive residential and living environment is an essential condition for attracting highly educated people and retaining knowledge workers already living in the area.
- The presence of tertiary education, universities and other knowledge institutions
In addition to the presence of these knowledge institutions, a large innovative company can also play a key role. Universities or other knowledge institutions do not necessarily need to be in the immediate vicinity of the STP, though this does stimulate informal contacts.
- Available sources of financing
Innovative companies often need a long development period for their products. This requires, for example, specific financial arrangements, provided by cooperating regional banks, as well as access to other sources of financing, such as innovation funds.
The key factors for success for the science park itself are:
The development of an STP must be explicitly embedded in a regional or local innovation strategy to promote economic development.
- Market, vision and strategy
The development must be based on a thorough market survey. Working from this basis, the target group can be clearly delineated and a distinctive concept can be conceived of. This is set down in a clear vision and a long-term strategy for attaining the goals that have been formulated. It is precisely because a specific target group is chosen that the operating estimate takes a much longer time than for a regular development. Proposals for eliminating weak features of the regional economy are also important.
- Strong management
A science park distinguishes itself from a regular business park by the fact that the contacts do not stop once the business moves in, but in fact just begin at that point. A science park therefore has professional management. The management is responsible for high-quality housing and the concrete range of facilities on offer, such as laboratories, clean rooms, testing facilities, etc. At some STPs a great deal of attention is devoted to the set-up and management of incubator centres, in the thinking that this is where the future ‘residents’ of the park will be coming from. Leasing the buildings helps management to control the park and guarantees a future proof development.
- Broad package of services
The management ensures that the businesses located in the park can function optimally by offering a very broad package of services. This can include access to sources of financing, management and marketing advice, development of innovation strategies and the fostering of contact between entrepreneurs. The organisation of seminars, training, informal meetings, etc, is also important. Events, concerts, exhibitions and happenings are organised at some parks, as a way of contributing to a creative environment.
- Clear choice of target group
A clear choice must be made for a particular target group. This ensures that the site has a clear profile. The management is responsible for a clear admission strategy and must stick to this. In addition to the target group, there must be a possibility for complementary businesses to take up residence as well, such as consultancy firms and other specific (technical) service providers.
- A strong urban planning concept
On the level of the science park itself, a work environment that stimulates creativity and innovation is required. The services mentioned earlier play a role in this. The presence of consumer amenities, the architecture and the landscaping are also factors. There must be an overall urban planning concept and a coordinating urban planner who supervises the architecture of the individual buildings. In view of the long-term planning, flexibility in the concept is of great importance. Sustainability plays a significant role in all plans these days.
- A unique, distinctive identity
After making a clear choice in terms of target group and property concept, the management and stakeholders must subsequently ensure that the science park has a clear identity. This identity is fleshed out in, for instance, the name and logo and must be distinctive and consistently expressed externally by all the parties involved.
- Facilitating role for the government
There is usually a facilitating role reserved for the local government. The local government’s commitment is important and the municipality (in cooperation with other government agencies) can play a role in attracting businesses and improving national and international accessibility. Government subsidies will often be necessary, certainly in the starting phase. Government loans are also attractive because the term of these loans is often longer than those provided by financial institutions.