A Recipe For Development

Take a university campus, attach a subdivision, stir in some start-up firms, and incubate.

Photo: Mark McCarthy

GROWING COMPANIES: Michael Wacholder, director of the Rensselaer Technology Park, in Troy, N.Y.

In 1986, three students came up with the idea of an in-car navigation system as part of a new course in technological entrepreneurship at Rensselaer Polytechnic Institute, in Troy, N.Y. The idea was so compelling that some local investors involved with the university-owned Rensselaer Technology Park and Rensselaer Incubator Program threw in a little seed money to get the students' business rolling. The result blossomed into MapInfo, also based in Troy, now a US $165 million business with 900 employees worldwide.

But it doesn't stop there. Recently, one of the three student founders donated a substantial sum to start an annual competition among RPI students to devise life-enhancing technologies. And one of the early MapInfo investors used part of his earnings to endow a faculty chair in entrepreneurship at RPI.

In fact, the success of MapInfo has brought so many returns to the university and the local business community that Michael Wacholder, the director of the technology park, has created a chart to keep track of them."I've lost count of the number of directions the chart has taken," he says.

Getting started. A research science park begins with an institutional anchor, such as a university or a government research facility. Next comes the park itself, a commercial annex in which fledgling technology companies can feed on the support, direct and indirect, that the anchor and outside investors may provide. Commercial and scientific expertise can thus be brought together to speed the migration of new ideas from the laboratory to the market.

The argument for science parks has many strands: they attract business, technology, and brainpower; enable a region to become a leader in a certain technology; and promote cooperation between academia and industry. They also offer companies in the area the talent of local students, jobs for faculty spouses, incubation money for start-ups, and sometimes tax breaks or reduced rents.

"These parks have had a profound influence on regional economic growth and start-up enterprises," says Wacholder, who is also a founder of the Rensselaer Incubator Program and of the Association of University Research Parks (AURP), in Reston, Va. He adds that the program has nurtured more than 200 companies, most of which remain in the area.

The idea dates to the late 1960s, with the founding of such exemplars as the Stanford Research Park, in Palo Alto, Calif., and Research Triangle Park, in its self-named North Carolina town. Growth spiked in the 1980s and again in this decade. Today the International Association of Science Parks (IASP), based in Malaga, Spain, boasts 343 members in 71 countries, an estimated 25 of them in North America. There are many more parks outside this framework, enough in North America alone to bring the total to more than 180, says Eileen Walker, AURP's director of program development.

"Now, with a flat world, North American companies wanting to go global are seeking safe environments with existing infrastructure," says Walker."In less-developed nations, science, research, and technology parks enable a government to offer developed infrastructure within a small, controlled area instead of having to upgrade the infrastructure of an entire city or region."

Companies are often attracted to a park because of its location and its access to complementary businesses. Several years ago, Avnet, a leading global technology distributor headquartered in Phoenix, relocated its computer distribution group from Phoenix to the Arizona State University Research Park in Tempe. The move was made in part because Avnet wanted to master supply-chain management, a specialty of the university's business school.

Another attraction, especially for engineers with entrepreneurial plans, is the access many parks provide to venture funding. Since its inception in 2001, the Innovation Hub in Gauteng, South Africa--designated host of the IASP's 2008 World Conference--has helped secure more than $140 000 in seed money for fledgling businesses in its Maxum Business Incubator by facilitating discussions with funding agencies. That modest bit of funding was enough to help the Maxum incubator's first 30 companies create 183 high-value jobs, and 80 percent of those companies are still growing. The seven companies in the 2006 program together brought in revenues of more than $6 million.

Photo: Mark McCarthy

If you build it, they will come. Science parks have enabled some countries to become globally competitive in certain technologies. Hsinchu Science Park helped Taiwan rise to prominence in semiconductor manufacturing, and Technology Park Malaysia, in Kuala Lumpur, did the same for Malaysia in computer storage equipment. The Software Technology Parks of India, including the one in Bangalore, can take credit for a large part of India's success in attracting American outsourcing business. In Japan, Yokosuka Research Park developed the global standard for third-generation cellular technology.

Meanwhile, state governments in Australia are vying with one another for new start-ups by establishing parks specializing in different technologies."It's the most efficient way for the Australian government to play catch-up and the most planned approach of all the industrialized countries," says Virgil Perryman, president of EcoPlasma Alianza, an alternative energy company based in San Jose, Costa Rica."One of my projects is using three technologies that have come out of Australia. To me, that's disproportional. It shows that this type of program is working."

The most successful and competitive programs tie their science focus to the research and university anchors. In structuring the $200 million, 150-acre Advanced Technology Park of Beer-Sheva, Israel, for example, project manager Uzy Zwebner has been tapping professors and researchers at adjacent Ben-Gurion University of the Negev. Zwebner has been concentrating on the areas that best exploit the university's resources to help make his park stand out in a nation of science parks. Israel has one of the highest numbers of scientists per capita in the world, many of them immigrants from the former Soviet Union. A lot of these researchers have found work in the country's 45 science and technology parks and incubators, including some with integrated Israeli and Palestinian workforces.

Another anchor will be a new Israeli Army research center--a project that for the first time will affiliate the Israel Defense Forces with a science park. Slated to open in 2009, the park is seen as a way of building up the sparsely populated Negev Desert.

As science parks proliferate, they tend to compete for resources, but even neighboring parks need not cannibalize one another."Only when science parks in the same region draw on the same knowledge base do they become direct competitors," says the CEO of South Africa's Innovation Hub, Neville Comins."They often benefit more from complementary activities than from behaving as direct competitors. There is often more competition among incubators located at [a particular] science park, but then again, these tend to have specialized skills, which differentiate them."

Unfortunately, many of the emerging markets are still playing catch-up. Not all markets offer intellectual property protection, and some do not even provide basic services. Perryman had to pull two of his communications engineering companies out of research parks in Kenya and Sri Lanka because of disorganized infrastructure, power rationing, civil unrest, and political infighting between government agencies that controlled different aspects of the parks.

"Once you leave the safety of the more developed countries, science parks are a great idea--on paper," he says."A lot of good intentions don't always translate to reality. The governments have to have gotten beyond the point of day-to-day survival. Before you move into a park, make sure a major conglomerate is already there. You don't want to be in a science park early--you'll regret it."

About the Author

SUSAN KARLIN has contributed to The New York Times , Forbes , and Discover .

To Probe Further

The organizations below assist in the creation of science parks and business incubators, fostering innovation, technology, networking, and knowledge transfer between conglomerates and start-ups and between universities and individual innovators.

• Association of University Research Parks: http://www.aurp.net

• Association of University Technology Managers: http://www.autm.org

• International Association of Science Parks: http://www.iasp.ws

• World Alliance for Innovation: http://www.wainova.org

• World Association of Industrial and Technological Research Organizations: http://www.waitro.org

• World Trade Centers Association: http://www.wtca.org

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