Creating Knowledge Locations in Cities

Innovation and Integration Challenges

Willem van Winden, Luis de Carvalho, Erwin van Tuijl, Jeroen van Haaren, Leo van den Berg

• Publisher: Routledge
• Year: 2013
• eBook ISBN: 9781136460791
• Topic: Business
• Subtopic: Business Development
• Index: Business

Based on a clear and comprehensive literature review, this book contains an analysis of five knowledge locations in Europe and one in South Korea. The case studies in the book cover several European countries (Ireland, Finland, Germany, Spain, The Netherlands). The cases are well grounded in the different contexts that these national settings provide, which allows comparisons between them.

Part I

Introduction and theory

1 Introduction

Cities in the knowledge economy

Many cities and regions have the ambition to promote their ‘knowledge economy’: it is generally recognized that knowledge has become the prime source of wealth in advanced economies.

The now widely used term ‘knowledge economy’ refers to the increased economic significance of knowledge production, distribution and use. The OECD defines knowledge economies as ‘economies which are directly based on the production, distribution and the use of knowledge information’ (OECD 2006, 1996). Moreover, knowledge and creativity are considered by many scholars as engines for long-term economic growth (for example, Romer 1986), and therefore, human capital and R&D have obtained a more central place in economic theory and policy. Powell and Snellman (2004) also stress the increased speed of technological change. They define the knowledge economy as ‘production and services based on knowledge-intensive activities that contribute to an accelerated pace of technological and scientific advance as well as equally rapid obsolescence’ (p. 201).

There are signs that the emerging knowledge economy has reinforced the role of cities. First, the diversity of people, firms and cultures in cities constitutes a fertile ground for new ideas and innovations (Jacobs 1969). Second, the diffusion of new knowledge and technology is faster in urban areas, thanks to the density and physical concentration of large numbers of knowledge workers and knowledge-based firms (Audretsch and Feldman 1996) and rich ecologies of face-to-face contacts (Storper and Venables 2004). Third, big cities have large and specialized labour markets. This makes them attractive for knowledge-based firms (that need specialized, skilled staff) and for knowledge workers, who can more easily find the job they want, and have better career opportunities in the longer run (Polèse 2005). Fourth, due to rising incomes, consumers spend more on luxury goods, and large cities are relatively specialized in this type of goods. The ‘consumption value’ of cities has gone up, especially for well-paid knowledge workers (Glaeser et al. 2001). Finally, large cities are traditionally specialized in sectors that show high rates of growth in the knowledge economy: the creative industries and knowledge-intensive services. In sum, agglomeration economies have become more significant in the knowledge economy.

The urban revival is not visible everywhere, however. Some cities (national capitals, global cities, international service hubs, academic centres) have grown very fast, acting as a magnet for talent and investments, but others (small cities in rural areas, cities with an outdated economic specialization) have lost out in relative terms: they have severe difficulties in retaining knowledge workers and knowledge-intensive companies. Van Winden et al. (2007) discuss the differences between city types concerning their role in the knowledge economy. ‘Winning’ cities have particular characteristics that make them benefit from and reinforce their position in the shift towards a knowledge economy: a strong knowledge infrastructure, dense knowledge resources, large numbers of knowledge workers, a diversified economic base, good international accessibility and attractive amenities that help to lure knowledge workers.

Policies for promoting knowledge-based development

Despite wide differences in endowments, opportunities and context, city administrations across Europe have one ambition in common: the desire to be successful in the knowledge economy. In policy documents produced by cities of any type, knowledge has obtained a central place. Knight (1995) was one of the first to apply the term ‘knowledge-based development’ to cities, and elaborate policy implications. Urban policy initiatives are increasingly aimed at attracting higher-educated people, promoting entrepreneurship, developing clusters of knowledge-based industries and ‘creative’ industries. Van Winden (2010) discusses this ‘knowledge turn’ in urban policy across Europe, and identifies four manifestations: (1) widespread and intense efforts to lure knowledge workers and the creative class; (2) a growing role for knowledge institutes in urban development and planning; (3) an explicit ‘knowledge-based’ approach to the planning and design of public space, and (4) efforts to underline the identity of the ‘knowledge city’ using marketing and branding techniques.

Cutting across those policy manifestations, this study focuses on one particular instrument used to promote the urban knowledge economy: the creation of knowledge locations. We use this term to include a wide variety of area-based policies aimed to agglomerate knowledge-intensive activity in a designated area or city district. Thus, there must be an element of planning or deliberate policy aimed at agglomerating knowledge-based activity.

The term knowledge locations, as we use it, includes concepts like science parks, technology parks, open innovation campuses, creative districts, media hubs and so on. It excludes wider territorial concepts like regional clusters and other ‘valleys’, in which activities are spread over a larger territorial area, although we recognize and explicitly address the role of the wider regional economic context in analysing knowledge locations. Some knowledge locations focus on one specific branch or technology (such as bio science parks), others are more diversified.

In general, agglomerating knowledge-intensive activity in a particular location is believed to have a number of advantages, which should be assessed from a critical stance. Knowledge hubs provide opportunities for facility sharing (for example, the joint use of expensive facilities such as clean rooms or laboratorial facilities); they enhance networking and face-to-face interaction, and promote unexpected interaction between persons or companies, with positive impacts on innovation. They are believed to offer a set of economic benefits, by fostering links between industry and the local knowledge institutes and providing a favourable environment for start-ups. Moreover, as city marketing and branding takes up an increasingly important role in urban management, knowledge parks can help to foster the identity of a city as a progressive knowledge-based city: they give the local knowledge economy a face and an ‘address’. Finally, knowledge hubs are increasingly seen as a powerful tool for urban regeneration. Many cities seek to transform derelict urban areas into ‘creative districts’ (Evans 2009).

Research questions

In this study we want to improve our understanding on the functioning of knowledge locations in the new urban economy, and add to the existing body of scientific knowledge (reviewed in the next chapters) on the dynamics of this form of urban development. We aim to provide an updated view and complement an earlier wave of studies, such as the seminal High-tech Fantasies by Massey et al. (1992) or Technopoles of the World by Castells and Hall (1994). Moreover, explicitly, the study is intended to help policymakers make better-informed choices and better understand the role of a knowledge locations in the wider evolution of the regional and global economy. Developing successful locations which stimulate growth in the knowledge-based economy is a complex challenge because it involves many aspects, many actors and requires an innovative approach. As each location has its unique context and needs to distinguish itself from competing locations, no blueprints or rules-of-thumb can be provided. However, greater insight into the relationship with the environment, the dynamics on a location, and in-depth study of contextual and content criteria for success, enables policymakers to ask the right questions for their particular development.

This research addresses a number of questions:

• • What kind of benefits do knowledge locations offer, in theory and in practice?
• • How important are ‘local’ networks (between actors at the location) vis-à-vis networks at wider geographical scales (regional, national, international), and to what extent is this sensitive to different modes of knowledge creation?
• • How do knowledge locations emerge and evolve over time, and which factors influence these processes?
• • Relations with the city: how to integrate ‘knowledge locations’ in the urban fabric?
• • Stakeholder involvement: how are different stakeholders involved in the development, formally and informally? What are their perspectives, ambitions, expectations? How are these different interests to be managed?
• • Organization and management issues: how do we frame the co-operation between the various actors (such as project developers, banks, local government, universities, ‘end users’) at the various stages of development (design, implementation, maintenance and/or park management)?
• • How do we measure the ‘success’ of such locations?

Organization of the book

This book is organized as follows. The first part (Chapters 1–5) discusses relevant literature and builds a theoretical frame. Within this first part, Chapter 2 puts the development of knowledge locations into perspective. It elaborates on the variety of concepts, and sketches a brief historic overview of their development. Also, this chapter signals a recent trend of ‘re-urbanization’ of knowledge, manifested in the growth of inner-city knowledge hubs. In Chapter 3, we review the literature on knowledge locations, focusing on evaluation studies of science parks and creative quarters. We identify some gaps that we intend to fill with this study. Chapter 4 proposes a conceptual framework to analyse the development of knowledge locations in their context, based on a recombination of insights from various literature strands. We argue that in contrast to the traditional science park model, contemporary and hybrid types of knowledge locations have a dual strategy and potential outcomes: an industrial development and clustering dimension, and an urban integration and regeneration dimension. Chapter 5 elaborates on the methodology applied in the case studies and essays and outlines the global research design.

The Chapters 6–11, which jointly form the second part of the book, contain the case studies and essays on knowledge locations in various cities:

• • Chapter 6 Dublin (Ireland): the Digital Hub, an inner-city flagship IT hub with important regeneration ambitions;
• • Chapter 7 Eindhoven (the Netherlands): Strijp-S, a planned mixed-use creative district at a former Philips premises;
• • Chapter 8 Helsinki (Finland): the Arabianranta area, a former industrial area transformed into a highly successful multi-functional city quarter with design as a central theme;
• • Chapter 9 Incheon (South Korea): Songdo, a new knowledge district developed on sea-reclaimed land;
• • Chapter 10 Munich (Germany): Maxvorstadt, an inner-city quarter with a high concentration of knowledge institutes and cultural facilities;
• • Chapter 11 San Sebastian (Spain): PI@, a new nexus for the local audiovisual and multimedia industry.

Chapters 12–15 form the third part of the book. It contains a synthesis and puts knowledge location into perspective. It reflects on the different components of the framework, compares evidence and suggests success factors illustrated with examples from the various case studies. On the theoretical level, it analyses constructs, relations and mechanisms of an integrative framework to understand the development of knowledge locations. Also, it provides recommendations for policymakers, as well as suggestions for further research.

2 History and trends in knowledge
locations

An urban turn?

Science parks and other types of knowledge hubs have been – and are being – developed for a number of reasons and intentions: to nurture the growth of technology firms, to facilitate knowledge transfer between universities and companies, to act as a seedbed for start-ups, to stimulate innovation, to regenerate derelict urban areas, to lift a region or city into the knowledge economy, to attract foreign investment, to sustain local political discourses or to make money on real-estate inflation.

Classic science parks are the best-known and most ‘visible’ locations of the knowledge economy. In recent years, new generation knowledge hubs have emerged worldwide, focusing on the so-called creative industries (Evans 2009).

Science parks

Science parks are the best-known and best-documented type of ‘knowledge location’ (for example, Castells and Hall 1994). They are often located outside the city, built around a university or scientific institution. They contain a mix of premises for businesses, start-ups and research institutes. Typically, there is no housing or leisure function. Often, science parks are managed by public or semi-public companies, with most shares in the hands of the (local) government or the state.

Science parks can be defined as property-based initiatives that have formal and operational links with a university or other higher educational institute (HEI) or major centres of research (Zhang 2005, referenced in Tamasy 2007). Science parks come in several guises and have different initiators and business models. Just like incubators – which they often include – science parks have ‘identifiable administrative centres, focused on the mission of business acceleration through knowledge agglomeration and resource sharing’ (Phan et al. 2005, p. 166, our emphasis). Some focus on particular technologies, economic sectors or science fields; others are more generic. Table 2.1 lists the main goals of the various stakeholders in science parks.

The first well-known initiative to develop a science park (though not in a formal way) was taken by Stanford University's Dean Frederik Terman in 1951, who developed and leased university land for start-ups. This would turn into the well known Stanford Research Park, the cornerstone of Silicon Valley. Later on in Europe, Cambridge Science Park (CSP) was formally established in 1970 and can be considered as the mother of all science parks. It is the UK's oldest and most prestigious science park. Its development was led by Trinity College, which limited admission to technology and research firms. Currently, it is home to over 90 high-tech companies and 5,000 personnel, but its start was slow: two years after its official opening, it had only seven tenants, and only 20 per cent of the designated area was developed (Koh et al. 2005). CSP focuses on basic research, and many of the companies are led by researchers and scientists rather than typical entrepreneurs. In the 1980s, the science park concept became widespread (Monck et al. 1988); it is currently a fully fledged and growing reality throughout the world (see Figure 2.1).

Table 2.1 Main goals of the various stakeholders in science parks

Stakeholder	Main goals
Universities, research institutes	Science parks serve to strengthen knowledge transfer (interaction) between university research and industry, particularly to derive funding for future research. It also includes commercialization of research results, eventually through academic spin-off firms and utilization of idle land of the university. In the knowledge economy: meeting targets from government policy
National and local (regional) government and (public) business support organizations	Science parks support the restructuring of the local (regional) economy. They generate new firms, high-technology jobs, income and tax. Also, they serve to improve the image of the city (region), particularly international recognition
Real-estate and financial institutions	Science parks are seen as business opportunities. They serve as real-estate investment projects to raise profits. In addition, the firms that settle may serve as investment projects
Firms on science parks	Science parks are seen as favourable environments, in terms of supply of facilities, the positive image associated with it, and network opportunities with the university and other park tenants

Source: Van Geenhuizen and Soetanto, 2008, p. 94

Many universities create science...

Table of contents

• Front Cover
• Creating Knowledge Locations in Cities
• Regions and Cities
• Title Page
• Copyright
• Contents
• List of figures
• List of tables
• List of boxes
• Preface
• PART I Introduction and theory
• PART II Knowledge locations in practice
• PART III Synthesis of the findings and theoretical reflections
• Notes
• References
• Index