Home Articles Ticket to ride: tech parks and industry clusters

Ticket to ride: tech parks and industry clusters

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aa18-oct-nov-2006-ticket-to-ride-tech-parks-and-industry-clustersAmbitious business builders know better than most that, in this lucky country, the only luck that sticks is self-made. Sid Subbrahmanyam considers a few locations where geography still matters in search of some elusive ingredients for success. Hold on tight!

When the Federal Government launched the $3 billion ‘Backing Australia’s Ability’ initiative in 2001, it was the largest and most comprehensive program put forth to promote science and innovation in Australia. In a bid to make Australia a recognised centre of innovation and business excellence, the 2004 Budget set aside a further $1 billion for the second phase of this initiative. The initial commitment to promote excellence in research, science and technology was revised to enhance the commercialisation capabilities of local innovation and technology.

The creation of a platform for the realisation of this initiative has seen the establishment of leading edge technology environments in the form of industry clusters, technology parks, incubators and enterprise centres. It has resulted in the formation of technology communities, incubating a culture of innovation. The fundamental purpose of such technology environments is to usher ideas developed through high-tech R&D and innovation through to commercial feasibility.

Technology parks and enterprise centres have become a global phenomenon in the business of technology transfer and the creation of knowledge-based economies. In Australia, such leading-edge environments have contributed to the promotion of innovation, local business development and global recognition of home-grown technology. Australia now boasts a number of world-class technology parks, with each state having at least one.

According to Colin Graham, CEO of the Sunshine Coast Innovation Centre in Queensland, technology parks are recognised internationally as playing an imperative role in boosting the wealth of a community by promoting a culture of innovation and adding value to a group of knowledgebased businesses co-located in the Innovation Centre or Technology Park. “The best ones become real dynamos and hubs of innovation – both physical and virtual – and they provide a focus to grow a group of added-value businesses. In a virtual world, I still see immense value in developing a critical mass of small technology businesses in a key location,” says Graham.

COLLABORATION BETWEEN BUSINESS AND ACADEMIA

Technology parks typically pool together an array of technology-based businesses and research institutes to endorse the transfer of knowledge and technology. Most technology parks are partners of tertiary or research institutes. This marriage of business and academia is designed to build linkages between private enterprises, universities and independent research institutes.

Research and development is often the catalyst for the creation of new products and services. By directly involving businesses with academia, technology parks and enterprise centres allow industries and academics to pool resources. This, in turn, leads to the creation of new solutions to problems.

According to Dr Elane Zelcer, Executive Director of Monash STRIP, universities are at the forefront of development. The Monash Science Technology Research and Innovation Precinct (STRIP) is situated in the south-eastern suburbs of Melbourne, where over 40 percent of Victoria’s manufacturing sector is located. The Monash STRIP is central to this vibrant industry cluster, which represents the specialisation and comparative advantages of the region.

“You get high-level researchers in a room with business people who need a problem solved and they inevitably come up with unique solutions,” says Zelcer.

One criticism of universities is that it is difficult for industries to find an entry point. Technology parks are fertile places where businesses regularly form alliances with academic experts. “We’ve started to focus on developing institutes; a cross-disciplinary approach that is a good way to solve all kinds of problems people have,” says Zelcer. “This not only facilitates problem solving and innovation, but also establishes a support network for the merchandising of technology.”

INDUSTRY CLUSTERS

It is hard to imagine competing companies that are concentrated in a particular geographic location actually collaborating with each other. However, when these companies share first-rate infrastructure and the opportunity to draw upon a pool of highly skilled researchers and technology experts, collaboration makes commercial sense.

Dr Zelcer says clustering effectively reduces the cost of innovation and doing business. “If you take clusters in their pure form, they refer not just to clusters of enterprise, but to companies that come together because they can feed off each other.” In short, clusters offer a focal point to attract new investments and advance industry expansion.

David Napier, Executive Director of Digital Harbour at the Melbourne Docklands, has a vision of creating a vibrant technology cluster in an inner urban setting where students can work alongside software developers and managing directors of some of the world’s best technology companies. He says Digital Harbour is forming an environment that is conducive to collaboration, investigation, high-level application and the melding of like-minded organisations seeking to influence world markets.

START-UP GUIDE

Considered as one of the most beautiful regions in Australia, the Sunshine Coast is fast becoming an attractive base for knowledge-based businesses. The Sunshine Coast Innovation Centre is already having a major impact on the growth of IT businesses in that region. The Innovation Centre Incubator is occupied by high-potential start-up businesses. Such businesses use the expertise provided by the Innovation Centre to alleviate the hurdles in commercialising their technology.

According to Sara Brewer, Director of Calthapharm, moving the nutraceuticals company into the Innovation Centre incubator was the best vehicle for taking Calthapharm’s new biotechnology to the next level. A recent graduate of the incubator, Calthapharm, according to Brewer, “would not have moved as far or quickly had we not become a member of the Innovation Centre. We didn’t have any networks or background in commercialising the technology into retail products.”

New small businesses often need mentoring and nurturing to develop into successful enterprises. i.lab Incubator, Queensland’s technology incubator, provides new high growth technology based companies with the resources essential for start-up businesses to grow.

i.lab was established by the Queensland Government in 2000 as part of its Smart State strategy to promote investment and generate knowledge-based jobs. It has so far been integral in the development of high technology industries in Queensland and also acted as a platform for the success of various young technology entrepreneurs.

i.lab has 30 emerging companies that draw upon the expertise of its 150 staff members. There is also the option of ‘virtual incubation’ where external members are offered the flexibility of choosing their workspace whilst still being able to access the support of i.lab’s capabilities.

Incubators are an ideal platform for start-up businesses to gain commercial expertise in their technology. “Being at a network hub, we have business contacts on our system, so if you are starting or growing a business, we will know a lot of useful people – from venture capitalists to patent attorneys and so on,” says Colin Graham. By nurturing management, marketing and business development skills, incubators at technology parks and innovation centres act as a guide for start-up businesses.

IN THE REGION

Situated on the Mount Helen campus of the University of Ballarat is Ballarat Technology Park, Australia’s largest regional technology park. Ballarat Technology Park provides tenants with easy access to highly skilled and experienced research scientists, technical staff and IT graduates.

The major benefit of location at this park is its low cost environment, which is estimated to be about 20 percent lower than its counterparts located in metropolitan areas. According to the Director of Ballarat Technology Park, Dr Stan Jeffery, there is a big difference in metro technology parks and the ones located in regional surroundings. He says that it is easy to pick potential frontrunners in the metropolitan areas, but in the region it is essential to find and make winners out of potential business entrepreneurs.

This has certainly been the case for Ballarat Technology Park, which has enjoyed 300 percent growth in the last four years, from around 450 to 1,500 people. It houses the IBM’s computing service headquarters for South-East Asia. The Victorian State Revenue Office has also relocated 40 percent of its operations from Melbourne to Ballarat Technology Park. Dr Jeffery is optimistic about the future of the Park and says that it will only serve to provide growth for the greater Ballarat region.

AUSTRALIA AS A GLOBAL INNOVATION HUB

aa18-oct-nov-2006-ticket-to-ride-tech-parks-and-industry-clusters3Australia has the capability and infrastructure to be a leading nation in innovation science and technology. In order for this potential to be maximised, Australia’s technology parks, industry clusters and enterprise centres need to play a proactive role in stimulating and managing the flow of knowledge and technology from universities, R&D institutions, industries and markets. “What is needed is very strong working relationships with universities who can boost the creation and growth of innovation-based companies through incubation and spinoff processes, as well as sparking off links between academic and business researchers,” says Colin Graham.

Chris Butler, Park Manager of Technology Park, Australia, located in the Perth suburb of Bentley, stresses this importance of collaboration with universities, but adds that it is critical that private companies also perform their own research and development. “New or ongoing product development and innovation can potentially give a company a competitive edge. For example, 20 percent of companies based at Technology Park Australia reinvest company revenue into research and development,” says Butler.

One major obstacle that is hampering Australia’s effort to be recognised as a global innovation hub is the apparent lack of enterprise culture in Australian universities and the surrounding organisations. “Very few people are prepared to put in the hard work to grow new companies,” says Dr Stan Jeffery. It’s a problem that he believes cannot be solved by technology parks and enterprise centres alone. There has to be corresponding changes in other structures.

LOOKING TO THE FUTURE

Technology parks, industry clusters and innovation centres have a significant role to play in growing companies to the level where they can compete internationally. R&D in these precincts is continuously scaling new heights. Craig Butler believes that incubators and clusters in Australia will play a decisive role in the emergence of new businesses, but additional specialised clusters also need to emerge.

In order for Australia to strategically compete in the international marketplace, industries, universities and the government have to work together.

Knowledge precincts allow for such collaboration and serve as platforms for continuous innovation in processes, products and technology. In many ways, the process of science and technology commercialisation is still evolving from relatively modest beginnings in Australia – a country spoilt for good weather and bountiful natural resources. But all of that is changing in step with the global economy. And if there one thing that the world’s most successful, clever countries agree on, it’s that luck has very little to do with it.


VITAL INGREDIENTS

One typical success story of a local small business benefiting from its relocation to an innovation centre is that of Calthapharm. Calthapharm, a “nutraceuticals” company, is the brainchild of Graham Brewer, a physical extraction technologist, and his daughter Sara Brewer. Established in 2001, the father and daughter team operated Calthapharm from a home offi ce in Noosa, before deciding to relocate to the Sunshine Coast Innovation Centre in 2004.

Calthapharm has formulated a method of concentrating fruit and vegetable into a powder form. Having initially developed this physical extraction technology, Calthapharm’s decision to move to the Innovation Centre acted as a springboard to commercialise their technology into retail products.

“We needed an environment conducive to the development of high-level biotechnology. That is why we made the decision to move to Sunshine Coast, specifically because it is the Innovation Centre”, says Calthapharm director Sara Brewer. Their flagship product is the Q-Daily range, the specially formulated concentrated fruit and vegetable juice powder products providing complete and natural sources of vitamins, minerals and phytochemcials.


A BEACON ON THE HARBOUR

Located in the Docklands precinct on the Western edge of Melbourne’s CBD is Digital Harbour, a technology hub that has been modelled on some of the world’s most successful technology precincts. Digital Harbour will be the core of ‘iport’, an ongoing project to turn Melbourne Docklands into a high-tech hub that connects the state of Victoria to the rest of the world.Digital Harbour is different to most other technology parks, business parks or technology communities in that it is funded by a consortium of private developers. According to Executive Director David Napier, the main aim of Digital Harbour is to unite R&D, education and training specialists with companies ranging in size from start-ups through small and medium enterprises to large corporations operating in the high-technology space. “We have a vision of creating a vibrant technology campus in an inner-urban setting where students can work alongside software developers and managing directors of some of the world’s foremost providers and developers of leading-edge technologies,” says Napier.

With its strategic location beside blue chip companies, Digital Harbour is on the verge of becoming a fully integrated digital hub. “The gathering of a sufficient critical mass of such companies will create a ‘honey pot’ for the smaller private companies who are the cutting-edge thinkers and initiators of problem solving ideas,” says Napier.

www.digitalharbour.com.au


EVOLUTION OF CLUSTER

There is a common saying that from little things, big things grow. The phrase rings particularly true when talking about the growth and the purpose of the Small Technologies Cluster (STC), based around the Caribbean Technology Park in Scoresby, Victoria.The creation and growth of the STC tells a story. It demonstrates how an industry-specifi c area can be fostered to build a ‘hotbed’ of scientific and technical capabilities. The beginning of this ‘evolution’ occurred with the creation of the CRC for Microtechnology, in 1999.

According to Clive Davenport, CEO of the STC and founding CEO of the CRC, “The purpose of the organisation was to assist microtechnology research and raise awareness of microtechnologies. However, the industry was limited by its fabrication capacity. In other words, there was a lack of equipment and facilities. That is when a private consortium of three organisations – Swinburne University, Wilkore and Caribbean Park – rose to the challenge, creating Minifab, a fabrication facility, designed to specialise in microtechnology.”

As a privately run and funded equipment and service provider, Minifab was relying on the growth of microtechnology and nanotechnology related industries to sustain its development. It was a well formulated punt.

“Minifab was already attracting great companies to its facility, when the Victoria Government decided to fund the creation of the STC, using funds from its Science, Technology and Innovation program. The Small Technologies Cluster was created to be multi-disciplinary, incorporating bio, nano, micro, electronics and packaging,” says Davenport. “Its purpose is to build on the outreach program initiated by Minifab and create a real-sense of community. Today, the cluster comprises 23 businesses, including Minifab, Advent Pharmaceuticals, Aortech, MEMS-ID, Mycrolab and Daintree Networks, to name a few.”

So how do you create a cluster?

“Community integration is the key and innovation is the fuel, to creating a hotbed of technology investment and transfer,” says Davenport. “Small companies must be able to spin-off from R&D activities. Start-ups must be able to access technical and financial support. The success of one company attracts another, and another. And ultimately, this will build a critical mass of skilled people, expertise, capital and entrepreneurial drive.”

Much like the research and development that the STC promotes, this cluster is proving that even the greatest outcomes can have humble beginnings.


TPIA ANNUAL CONFERENCE

Technology Parks and Incubators Australia Ltd will hold its Annual Conference in conjunction with the 20th anniversary of the La Trobe University R&D Park from the 30 November to 1 December 2006.The conference will bring together representatives from technology parks, incubators, enterprise centres and the innovation and commercialisation community. It aims to facilitate the exchange of development strategies for innovative clusters and also act as a platform for various states to showcase the innovative potential of their respective technology park and incubator environments.

www.tpia.org.au.

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