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GUIDE TO CREATING AND DEVELOPING INNOVATION CENTERS

(TECHNOLOGIES AND KEY PRINCIPLES)

GUIDE TO CREATING AND DEVELOPING INNOVATION CENTERS


(TECHNOLOGIES AND KEY PRINCIPLES)

BRIEF VERSION

Moscow–Hong–Kong–Daedeok–Lund–Montpellier–Oxford–Beijing–San-Francisco–Singapore–Helsinki

2012

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BRIEF VERSION

CONTENTS

RESUME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Annex No. 1. SOURCES OF EXPERIENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6


1.1. The Biggest Innovation Centers of the World. Ratings of Innovation Centers . . . . . . . . . . . . 6
1.2. Top-30 of World Innovation Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.3. Factors of Success When Founding Innovation Centers . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Annex No. 2. BASIC TECHNOLOGIES OF CREATING INNOVATION CENTERS . . . . . . . . . . . . . . . . . . 14


2.1. Business Incubation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.2. Attracting External Financing For Innovation Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.3. Establishing Horizontal Links . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.4. Creating the Efficient Technological Park Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.5. Establishing Social Links and Creation of Reputation (PR and Branding) . . . . . . . . . . . . . . 21
2.6. Organizing the Work of Innovation Center Management Bodies . . . . . . . . . . . . . . . . . . . . 22

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GUIDE TO CREATING AND DEVELOPING INNOVATION CENTERS
(TECHNOLOGIES AND KEY PRINCIPLES)

RESUME

We ourselves would never dare to prepare the document in the genre so ambitious, as the Guide, but for
one circumstance. Co-authors of the present document can be pardonably considered those people who
have achieved the highest success in creating innovation centers and innovation environment. Moreover,
only those apparently have the right to express their weighty opinion about how innovation centers are
created and how they develop. They have founded the environment in which the innovation business
has grown with the turnover of more than 2.5 trillion dollars of annual operation; their “sponsored”
companies include Intel, Nokia Group, DuPont; among their innovations are such technologies as
Bluetooth, cloud programming and EPROM memory chip.
The Guide is a result of numerous conversations with the Founding Fathers of the leading innovation
centers, and with their team-mates, of meetings with employees of innovation companies and with their
partners. One must say that often we got a picture, which significantly differed from habitual presentations
of technological parks: partly, as the result of the inevitable difference between theory and real life; in
some degree, due to the fact that this work was carried out in the period of conceptualization of after-
crisis changes, which have devaluated some truths, unit recently unshakable. This work is also based on
studying the experience of 35 most efficient innovation centers of the world on the rating list. Finally,
the third basis of the present work was the survey among the most reputable innovation managers on
the secrets of their success and about the mistakes in their work.
The Guide generalizes managerial approaches and practices for creating the innovation infrastructure,
which have proved their efficiency in the most successful innovation centers of the world. The history
of every of them is unique. Thousands of factors determined their development: historical peculiarities
and business lifestyle, the level of education of population and development of industry, as well as state
policy. As the result, the researchers from time to time become convinced that establishing a creative
environment is akin to art. And if it is so, there is no need to generalize; it is important to learn from
one or two congenial masters. But, nevertheless, there is something common.
First of all, all projects of innovation centers have emerged as the result of deep crises and of realization
of the fact that innovations may help overcome the difficulties. Thus, foundation of the Ideon Research
Park in Swedish province of Skone was the response to decrement of the basis of local industry –
wharves, under the pressure of South-Korean competitors at the end of the 1970s. And foundation
for organizing the network of Technopolis Research Parks was laid in the Finnish “backwater district” –
the city of Oulu, which started to lose population sweepingly after the Second World War.
In this sense, Russia certainly is in the mainstream.
Secondly, the trace typical for the majority of successful innovation centers is the fact that they
develop in strongly defined sequence, passing a number of stages in course of development:
I. C oncentration of resources (this stage is characterized by growth of scientific and research potential of
the region and formation of good entrepreneurial climate, primarily, for beginning and small companies,
where innovation center is being formed; overcoming the “Great Wall of China” between research
centers and industry);
II. Formation of innovation ecosystem (i.e., symbiosis of technological startups, small enterprises and
large-scale high-tech business; stable parks of science-intensive companies are formed; regional
authorities start the active policy of supporting the innovation business and creating the required
infrastructure; large-scale advertising and PR-campaigns are carried out, aimed at forming a new
brand of the region as an innovation center);

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BRIEF VERSION

III. Breakthrough (rush growth of turnover of large (anchor) companies and their transformation into
global players; significant growth of the number of technological startups; formation of the market of
venture investments and of the mechanism for separation of risks of venture investors, for example,
within the frames of private and state partnership);
IV. Mature development (created infrastructure for supporting the innovation enterprises works efficiently;
it becomes more and more «technological» and scalable; development of own brand of the innovation
center takes place; incorporation in the existing technological chains, and creation of the new ones,
on the basis of international cooperation).
Attempts to ignore the above sequence and huge resources aimed at resolving the tasks of the next
stages that aren’t prepared yet (as well as attempts to skip a stage) at best lead to stagnation and to
absence of the desired results.
And finally, thirdly: practically all successful innovation centers have encountered a certain number of
general problems in their progress. The technologies of their solution are already developed: each of them
in its turn consists of a set of simpler problems. And practically all more or less successful innovation
centers are the result of combination of these elementary items.
Here are the basic technologies of innovation management:
1. Business incubation. Contrary to the conventional opinion, the term «business incubator» has rather
rough relation to real estate object. The problem that technological business incubators have to resolve
can be simply formulated as: Deficit of successful technological startups. They can be attracted not by
low rental fee, but by creation of efficient business environment, as well as by providing the innovation
startups with the kind of services and premises that they really need. The most important service
is transfer of entrepreneurial skills to the participants of innovation startups, for which experienced
and well-paid business coaches are required.
2. Establishing the system of projects financing. Continuing financial and economic crisis has entailed
serious deterioration of the situation with attraction of private venture capital. In this connection,
solution of the problem of attracting financial resources requires technological parks to search for
nonstandard mechanisms of attracting external financing of innovation projects and, respectively,
creation of maximally comprehensive and amicable climate for the investor. The condition for origin
of such climate on the one side is private-state partnership based on granting interest-free or
conditionally reimbursable loans to innovation projects and, on the other side, an extremely wide
choice of projects that are promising from the point of view of the investor.
3. Establishing horizontal links between the participants of an innovation centre – researchers, innovation
entrepreneurs, venture investors and institutions of development. The simplest and the most obvious
way to stimulate formation of horizontal links between various participants of an innovation system is
gathering them under the same roof. This significantly helps create comfortable sites for communication
where various participants of the innovation system could regularly intersect in course of day-to-
day operations, get to know each other, share ideas and establish partner relations. Apart from its
function of a site for communication, the innovation center should perform functions of the influencer
for companies located in it. The possibility of obtaining a recommendation and of direct connection
with the necessary person or organization is often not less important than financial or consultative
support.
4. Creating infrastructure of the technological park. This infrastructure should be oriented at satisfying
the needs of small technological enterprises first of all and be maximally flexible: small premises
that are capable of quick expansion when necessary, and compact laboratories equipped with all
required communications and facilities. Outside the walls of the technological park, such premises

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GUIDE TO CREATING AND DEVELOPING INNOVATION CENTERS
(TECHNOLOGIES AND KEY PRINCIPLES)

are impossible be found for a reasonable fee in the majority of European, American or Asian cities.
Territorial proximity to universities and other R&D centers may simplify the task of creating the high-
quality infrastructure. Concentration of small technological companies in the same place serves as a
strong magnet which afterwards attracts large rich companies.
5. Branding and PR. Development of long-term high-risk project such as a scientific park or an innovation
centre to great extent depends on the expectations, which are formed in the society with regards
to its results: what tasks and objectives are set to a specific technological park, what is the limit of
its possibilities, direction and strategy of development. This requires constant explanatory work with
mass media. Furthermore, the destiny of the innovation center practically always is the derivative of
successes and misfortunes of its residents. However, at the initial stage of development of startups,
while they have no their own «employment history», their perception by banks, venture companies
and other counteragents is significantly determined by the reputation of the technological park where
they are residents. That’s why investments into PR are never useless: they facilitate attraction of
startups into the innovation centre, and afterwards also of investors.
6. Organizing the management. The main task of the innovation center is creating favorable business
environment and providing services on business operation and development that are demanded by
innovation companies. Only those executives can cope with this task who have the experience in doing
business, as they understand which particular services are requested, and how they should be rendered.
If the state, directly or via its representatives, starts influencing too strongly on management of the
innovation center, high risk exists of its transformation from a center rendering services to innovation
business, working on the basis of a clear business model (client – service provider), into a center for
distributing the state subsidies. The task of the innovation center management company can not be
the profit-making only. And just by that reason control bodies of the innovation center should possess
autonomy not only from state authorities, but also from private investors and shareholders.

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ANNEX NO. 1

SOURCES OF EXPERIENCE

The number of innovation centers and technological parks in the world, i.e., places of concentration of
innovation business, now is approaching to a thousand. This index will be growing up further on: a number
of people associate the exit from the present global economic crisis with a new technological wave. And,
to conquer this wave, at least such infrastructure is necessary which adds to origin, establishment and
expanded reproduction of innovation companies. That’s why the interest is quite clear towards such
places, where such infrastructure or, using professional slang, “ecosystem», has been built.

1.1. The Biggest Innovation Centers of the World. Ratings of Innovation Centers

From that incomplete thousand of presently existing innovation centers and technological parks, only few
could prove their efficiency. Progressive advance (even if subject to some rises and falls) has become
the first criteria of the rating of efficiency of innovation centers, which formed the base of the present
Guide (See Table 1). Together with these criteria, the rating also considers the other ones: Contribution
of the innovation center to the development of economy, notoriety and quotation, level and significance
of the companies working in the centre; the scope of the innovation centre, accessibility of venture
capital and availability of information. Innovation centers in the rating are not ranked (from the most
efficient ones up to those with the lowest efficiency): that is simply senseless, as the source conditions
of their foundation and the missions assigned to them are incommensurable. Neither particularities of
financing of their current activity nor its relative scope are criteria for evaluation of efficiency of an
innovation center. In this relation, efficiency of an innovation center in the offered rating is evaluated
irrespective of their relative scopes, as well as of the form of their organization and financial self-
sufficiency.

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Table 1. Efficiency Rating of Some Innovation Development Centers

№ Name of the innovation center


USD)

Scope

Country
Efficiency
companies

Dynamics of
development
Assigned rating
with companies

Scale – scope*
Overall volume of

Self-sufficiency**

Year of foundation
residents*** (million
aggregate income of
investments / Annual

Number of registered

Staffing level together


1 India Silicon Valley, Bangalore India 1990s 0,905 0,74 N .mkt Positive G.mkt5 20 000+ 130

2 Ideon Research Park Sweden 1983 0,955 0,8525 G .mkt Positive G.mkt5 3 000 260

3 Yokosuka Research Park Japan 1987 1,135 0,9925 G .mkt Positive G.mkt5 154

4 Kyoto Research Park Japan 1987 1,135 0,95 G .mkt Positive G.mkt5 250+

5 Kendall Square, Massachusetts USA 1990s 0,91 0,725 N .mkt Positive G.mkt5 450+ 1 2 00

6 Hsinchu Science and Industrial Park Taiwan 1980 1,225 1 G .mkt Positive G.mkt5 139 416 440 38455 / 301*

7 Berlin Adlershof Technological Park Germany 1991- 1 0,9925 G .gov Positive G.gov5 7268 471 94 / 770 *
1992
8 Technopolis Oulu Finland 1982 0,86 0,7325 N .mkt Positive G.mkt5 4500 215

9 Silicon Valley Palo Alto, San Diego, Sth San Francisco USA 1950s 1,225 0,72 N .mkt Stable G.mkt4 250 000+

10 Silicon Wadi, Israel Israel 1990s 0,91 0,8225 G .mkt Stable G.mkt4 3 000+

11 Tsukuba Science City Japan 1985 1 0,855 G .gov Stable G.gov4 120

12 Research Triangle Park North Carolina USA 1959 1,135 0,64 N .org Stable G.org3 170

13 Austin Silicon Hills (Texas) USA 1980s 1,135 0,7625 N .mkt Negative G.mkt3 150 725

14 Shanghai Zhangjiang hi-tech Park China 1992 0,86 0,495 N .gov Stable G.gov3 100 000 3600

15 Montpellier Agglomeration France 1986 0,5 0,77 N .gov Positive N.gov5 5 000 445 530*

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GUIDE TO CREATING AND DEVELOPING INNOVATION CENTERS
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Continued of table 1

№ Name of the innovation center


USD)

Scope

Country
Efficiency
companies

Dynamics of
development
BRIEF VERSION

Assigned rating
with companies

Scale – scope*
Overall volume of

Self-sufficiency**

Year of foundation
residents*** (million
aggregate income of
investments / Annual

Number of registered

Staffing level together


16 Cambridge Science Park Great 1970 0,505 0,7375 N .org Positive N.org5 5 000 100
Britain
17 Leiden Bio Science Park Nether- 1984 0,775 0,72 N .org Positive N.org5 3100 70
lands
18 Techno Park Campinas Brazil End of 0,725 0,7875 N .mkt Positive N.mkt5 5500 67
1970s
19 Technoparc Montrèal Canada 1987 0,635 0,735 N .org Positive N.org5 4849 34 2 000

20 Biopolis One-North Singapore 2003 0,545 0,4525 N .gov Positive N.gov4 5 500

21 Innovation Place Research Park Canada 1980 0,5 0,49 N .gov Positive N.gov4 5 000 192 36*

22 Hong Kong Science and Technology Park China 2002 0,635 0,6525 N .gov Positive N.gov4 80

23 Otaniemi Science Park Finland 1985 0,635 0,5675 N .mkt Positive N.mkt4 250

24 Symbion Scientific Park Denmark 1986 0,725 0,56 N .mkt Positive N.mkt4 180

25 Zhongguancun Science Park China 1988 0,635 0,345 R .mkt Positive N.mkt4 950 000 22 000 124 000*

26 Sophia Antipolis France 1984 0,775 0,9125 G .gov Stable N.gov4 31 000 1452

27 Technology Park Bentley Australia 1985 0,725 0,4375 N .gov Positive N.gov4 110

28 ZIRST Technological Park, Grenoble France 1972 0,775 0,8425 G .gov Stable N.gov4 10 000+ 320

29 Porto Digital Brazil 2000 0,635 0,68 N .mkt Positive N.mkt4 130

30 METU-Technopolis Turkey 1991 0,5 0,475 N .gov Stable N.gov3 3 300 240

31 Madrid Science Park Spain 2001 0,5 0,45 N .gov Stable N.gov3 250
Of the table 1

№ Name of the innovation center


USD)

Scope

Country
Efficiency
companies

Dynamics of
development
Assigned rating
with companies

Scale – scope*
Overall volume of

Self-sufficiency**

Year of foundation
residents*** (million
aggregate income of
investments / Annual

Number of registered

Staffing level together


32 National Technology Park Ireland 1984 0,635 0,52 N .gov Negative N.gov2 3 000+ 80 7
33 Oxford University Begbroke Science Park Great 1990s 0,37 0,7 N .mkt Positive R.mkt4 40
Britain
34 Daedeok Innopolis Korea 1992 0,28 0,3925 R .gov Positive R.gov4 40 338 1006
35 Tomsk science and technology park Russia 1990 0,365 0,3075 R .gov Stable R.gov3

Innovation centre of international scale

Innovation centre of national scale

Innovation centre of regional scale

* By scale, innovation centers are divided into groups: “R” Index, “regional” – regional; «N» Index, «national» – national; «G” Index, “global» – international.
** By grade of their financial self-sufficiency, innovation centers are divided into groups: .org Index – innovation centers having significant financial dependence on support of third organizations; .gov Index – innovation centers having
significant financial dependence on support of institutions of state and municipal authorities; .mkt Index – financially self-sufficient and self-supporting innovation centers.
*** Asterisk specifies the index of aggregate incomes of residents of an innovation center for the accounting period.

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BRIEF VERSION

1.2. Top-30 of World Innovation Management

The names of Bill Gates or Steve Jobs are known to everybody, but the stories of their success are not
replicated – they are unique. The other case is those persons, who managed to create the environment,
«infusion broth», in which future gates and jobs could apply themselves. The names of these people,
leading executives, scientists and officials, who managed to achieve the most success in creation of
favorable conditions for implementation of innovations in various countries of the world, are much less
known. Their very names formed the base of the present Guide.
The criteria for inclusion into this list of innovation management gurus are quite simple (See Table 2,
in alphabetic order): Quotations in the leading world business and scientific periodicals, evaluations of the
leading experts and journalists, present popularity of the candidate (participation in state and corporate
consultative authorities on development of innovation infrastructure), availability of own scientific and
entrepreneurial experience, as well as of important prizes and awards. In course of formation of the
list, more emphasis was also put on the contribution the persons on the list made into transformation
of economy of a region of even of the whole country.

Table 2. Top-30 of World Innovation Management


Countries where projects have
Person (Name) Merits
been realized
Famous Brazilian innovative researcher and entrepreneur, pioneer
Paulo Arruda Brazil in geneticsCoordinated the establishment of Centre of Molecular
Biology and Genetic Engineering in Unicamp, Brazil (University and
Research Center in Campinas)
Head of a number of research centers in the China, architect of
innovation policies in microelectronics. The person who founded and
Wang Yangyuan China continues to develop the microelectronic industry of the China More
than 40 years of experience in semiconductor industry.Director of
the Microelectronics Research Center, Beijing University.
The most successful venture investor in Israel, one of the chief
Joseph Vardi Israel innovative managers of the Israeli hi-tech industry, one of Israel’s
most prominent innovation entrepreneurs and venture capitalists.
Peter Dobson Great Britain Initiator and director of Begbroke Science Park (Oxford), National
advisor on nanotechnology to the Research Councils, the UK

Kazuo Inamori Japan Founder of Kyocera, Kansai Cellular Telephone Co., KDDI Corporation
and several venture companies
Coordinator of Singapore government policy in the field of innovation
Philip Yeo Singapore development. Chairman of the board of directors of SPRING, Council
for Standards, Improved Efficiency and Innovations.
The USA, Finland, Singapore, International advisor BASF, Nike, Intel, Nissan, PricewaterhouseCoopers
John Kao Ireland, United Arab Emirates and others, as well as for governments of Finland, Singapore, Ireland,
United Arab Emirates and the USA.
A partner, managing director and chief advisor at InnoPraxis
Mervi Käki Finland, Poland, Cyprus, New International Ltd. Former CEO of Technopolis Capital RegionFormer
Zealand, Russia Member of the Board of Technopolis Ventures Business
IncubatorPreviously held managing positions at Technopolis PLC.
Founder and President of Tsinghua University Science Park (TusPark),
Mei Meng China Director of TusPark Development CentreChairman of TusPark Co. Ltd.
Permanent Board Member of the Chinese Association of University-
based Science Parks.
The USA, Singapore, Malaysia, One of the founding fathers of the Silicon Valley, advisor on innovation
William Miller South Korea, Japan policy in South Korea, Singapore, Malaysia and Japan, co-director of
Stanford Programme on Regions of Innovation and Entrepreneurship.
One of the founding fathers of the IT cluster in Bangalore, prominent
Nagavara Murti India Indian innovative entrepreneur and software engineerCo-founder and
former CEO and currently Chairman Emeritus and Chief Mentor of
Infosys, Bangalore, India.

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Continued of table 2
Countries where projects have
Person (Name) Merits
been realized
One of the founding fathers of the IT industry in India, founder and
Shiv Nadar India chairman of HCL Technologies, founder and chairman of the Shiv
Nadar Foundation, founder of the Shiv Nadar University.
Prominent Indian entrepreneur, head of the Government of India's
technology committee, TAGUP,Cofounder and former Chairman and
Nandan Nilekani India CEO of Infosys Technologies, a global IT services companyCo-founder
of India’s National Association of Software and Service Companies
(NASSCOM) and the Bangalore Chapter of The IndUS Entrepreneurs.
President of the National Research Foundation of Korea, advisor
to the Government of Korea on science and technology policies,
Se-Jung Oh South Korea Member of the Korean Academy of Science & Technology and the
Presidential Advisory Council on Education, Science and Technology,
Republic of Korea.
Vice-president for Economy and Innovation at Montpellier
Agglomeration, business and innovation center which is the first
Gilbert Pastor France French business incubator and the 2007 Best Business Incubator
that has created more than 470 companies, President Delegate to
Economic Development and Employment, Montpellier, France.
Venezuelan economist and expert on technology and socio-economic
development, International consultant in innovation development to
Carlota Perez Venezuela, China, Brazil, multilateral organizations, including the OECD, the UN Conference
Netherlands, Spain on Trade and Development, UNESCO, UN Industrial Development
Organization, the UN Development Programme and the World Bank
as well as to private companies.
One of the founders of the biotechnology industry in Brazil, a
Fernando de Brazil well-known researcher and entrepreneur in biotechnologies and
Castro Reinach geneticsFamous venture capitalist Has coordinated a great number
of research groups and labs.
A leading Japanese innovative businessman, venture capitalist in
Masayoshi Son Japan ICT, founder and current CEO of SoftBank Capital, CEO of SoftBank
Mobile, chairman of Yahoo Japan.
Former Deputy Chairman of the Research, Innovation and Enterprise
Council,Former Chairman of the National Research Foundation
Tony Tan Singapore (2006-2011),Former Minister for Education, Minister-in-charge
for NUS and Nanyang Technological Institute. Author of the One-
North innovation business park. President of Singapore since 2011.
CEO of Hong Kong Science and Technology Parks Corporation, About
40 years of experience managing and building large organizations in
Asia-Pacific and globally for DuPont, covering product lines from
Anthony Tan Hong Kong chemicals to synthetic fabric and fibers like Tyvek and LycraUsed to
work in R&D and production for DuPont in the US as well as to be
involved in the development of new products/businesses in electronic
imaging and medical products.
Founding farther of Israel’s high-tech, significantly influenced the
Dov Frohman Israel computer memory industry, developer of EPROM. Founder, former
Vice-President and first general manager of Intel Israel.
Managing Director of CREEDA Projects Pty Ltd., a network of
entrepreneurship, innovation and SME development consultants in
Julian Webb Australia, New Zealand, China Australia and internationally. Leader in the small business development
and business incubation industries since the 1980s.Has established a
big number of business incubators in Australia and internationally.Asia
Region Facilitator for the World Bank’s infoDev Incubator Initiative.
National Chief Technology Officer and the Secretary General, the
Chang-Gyu South Korea head of Office ofStrategic R&D Planning in Korea. Former advisor
Hwang to Samsung Electronics on R&D of Samsung Electronics' future
technologiesFormer technical consultant at Intel and Hewlett Packard.
President of Stanford University, pioneer in computer architecture,
John Hennessey The USA RISC (Reduced Instruction Set Computer) technology, member of
executive bodies and a top manager for a number of internationally
renowned hi-tech corporations (Google Inc. and other).
General Director of Lundavision AB, founder of Ideon Research Park
Sven-Thore Holm Sweden, Russia, China in the city of Lund (Sweden) where over 10,000 jobs have been
created since 1984

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Of the table 2
Countries where projects have
Person (Name) Merits
been realized
One of the ideologists of Finland’s innovation policy and the country’s
Pertti Huuskonen Finland, Poland, Cyprus, New
Zealand, Russia first technoparks. One of the founders and chairman of the board of
directors at Technopolis PLC.
One of the founders, chairman and CEO of analytic center Joint
Russell Hancock The USA, China, Taiwan, Great Venture: Silicon Valley Network, international advisor on regional
Britain, Spain development, consultant to high tech companiesFormer member of
the Board of Directors of New California Network.
Vice President of Tsinghua University Research Park (TusPark,
Herbert Chen China Beijing), Deputy Director of the Tsinghua University Science Park
Development Centre in Beijing,President of the Asian Pacific Division
of the International Association of Science Park.
Founding father and a pioneer of Taiwan innovation development.
Chin-Tay Shih Taiwan Advisor on science and technology to Taiwan’s Executive Yuan. Former
chief of the Taiwan Institute for Industrial Technology Research.
Founding father of the Israeli venture capital industry and prominent
Yigal Erlich Israel Israeli venture investor Former Chairman of the Israel Venture
Association. Vice-President of Israel National Council on R&D.

1.3. Factors of Success When Founding Innovation Centers

The third (together with the rating of success of innovation centers and the list of their «gurus» –
founders) base of the Guide is survey among the most competent innovation managers about the
recipes of their success and mistakes in their activities. This survey was of an open nature; in other
words, respondents did not have any previously prepared set of answers.
The survey helped determine a number of factors, which the respondents considered important for
success of innovation centers:
• Efficient PR support, strong brand of an the innovation center;
• Political will and presence of long-term strategy of the innovation centre, which the state (or local
authorities) are ready to implement systematically (“patient state”);
• Stable business model of the management company; capacity of the management company to ensure
financial self-sufficiency and to generate profit;
• Independency of the management company from the founders of the innovation center (state or
university) in decision making; formation of innovation center control bodies from professionals with
business experience;
• Correct determination of competitive niche of the innovation center in relation to other innovation
centers;
• Attraction of big high-tech corporations as a component of the innovation ecosystem and anchor
investors;
• Correct determination of priority directions of activity (priority spheres of technological development),
with consideration of local advantages and conditions.
When answering the question about the factors hindering success of innovation centers, the experts
named the following ones:
• Excessive attention to material infrastructure in the prejudice of immaterial services and attraction
of strong staff and projects;
• Insufficient professional level of the specialists, attracted for working in the management company.
In the opinion of the respondents, the most negative consequences are entailed by attraction for

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executive posts of sons of state structures and academic institutes without experience of work in
business sphere;
• Insufficient attention to PR and to formation of strong brand of the innovation center;
• Insufficient attention to business training of researchers and students (insufficient involvement of
scientific and university centers into enterprise);
• Adherence to the strategy of «pushing» technologies to the market; concentration of resource on
the projects, which do not resolve specific consumers' problems. Excessive attention to development
of R&D and technologies in the prejudice of development of business of resident companies and
business environment;
• Mistakes when determining specialization and priorities of the innovation center;
• Creation of innovation infrastructure on the base of abstracted forecasts and not of real necessities
of the existing and potential resident companies of the innovation centre; low adaptability of the
infrastructure to the requirements of the specific company;
• Excessive influence of the state (local authorities), universities (as a rule, it is the question of state
universities) and academic institutions on innovation center management.
The survey has also helped reveal and summarize managerial practice and approaches of three main
groups of innovation centers, which had proved their efficiency. These are:
• Big technological parks with the participation of private capital, possessing financial self-sufficiency
and interest-bearing. As a rule, such innovation centers have been founded on the initiative of state
or municipality as an institution of regional development. However, further on they passed into the
ownership of private investors, and at present they combine the functions of development institutions
(point of access to state, social and private-state programs of innovation development support) and
private developer projects. One may include into this group Ideon Research Park, located in the city
of Lund (Sweden), as well as a network of technical parks managed by a Finnish company Technopolis
Oy, including the oldest Finnish techno park in the city of Oulu.
• State innovation centers – institutions of development; such centers have been founded on state
initiative, and mostly thanks to state investments; their current activities is subsidized by state and,
actually, they perform the functions of state development institutions. At the same time, influence of
state authorities on operational management of such center may vary. For example, all the elements
of innovation infrastructure of Montpellier Agglomeration (France), including Innovation business
center (business incubation) and techno parks, belong to the municipality, and their employees are
municipal officers. While state innovation center of Hong Kong is managed by a fund independent of
state. Apart from the above innovation centers, this group includes Biopolis Techno Park (Singapore)
and Daedeok scientific town (South Korea).
• Techno parks being profit centers of universities. The mission of such innovation centers is not only
commercialization of university developments, but also sale of various services, which the university
may offer to science-intensive companies (scientific-research infrastructure, joint R&D, networks of
contacts), as well as efficient management of a part of real estate of the mother university (mainly,
land plots, on which such techno park is located). From the number of innovation centers analyzed
in this thesis, this group includes, in particular, Oxford University Begbroke Science Park, as well as
TusPark scientific Park of Tsinghua University.

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BRIEF VERSION

ANNEX NO. 2

BASIC TECHNOLOGIES OF CREATING INNOVATION CENTERS

Each innovation center, which experience was represented in the Guide, formed in its own unique
conditions, and had to resolve a complex of, however, unique problems, peculiar only to the said country
and to the said region; it has a unique management structure and a model of business processes
organization. Nevertheless, just these differences emphasize universality of a number of managerial
technologies, which to this or that extent are replicated in the overwhelming majority of the studied
innovation centers. Here are the basic technologies of innovation management:
1. Business incubation;
2. Financing of projects;
3. Horizontal links between the participants of the innovation center;
4. Infrastructure of the technological park ;
5. Branding and PR;
6. Management.
Each technology in its turn consists of a set of simpler ones. And, practically all more or less successful
innovation centers are the result of combination of these elementary blocks.

2.1. Business Incubation

The problem, which technological business incubators have to resolve, can be simply formulated as:
Deficit of successful technological startups. The reasons, limiting the number of organized startups,
or hindering development of already created ones, can be described with the following easy situations:
• The people, who potentially could create technological business, do not do that, as they do not know
what to start with, or are afraid of beginning.
• The people, who will to create an enterprise and possess technologies and ideas necessary for that,
do not know how to manage business.
• The starting companies can not find premises, comfortable and in the best way suitable for their
kind of activity.
• Absence of necessary contacts. The people who create startup can not find other people, who would
possess knowledge, skills and contacts necessary for their business.
The basic modes of solution of two first problems are creation of a system of business education and
transfer of business skills to the participants of innovation startups. Solution of two other problems
is connected with organization of efficient business environment in business incubator, as well as with
submission to innovation startups of such services and premises, which they really need.
The main principles of organization of business education in incubators were developed in the first
European innovation centers in 1970-80s, first of all, in English and Scandinavian ones, and afterwards
this model, with various grade of success, was replicated both in most of developed and large developing
countries.
From the point of view of approach to business education, innovation centers may be nominally
divided into two big groups. Business incubators belonging to the first group are mainly oriented at

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commercialization of technologies and elaborations, created in universities and research centers. The
second group is mostly oriented at the projects, appearing at the open market, as well as at separated
projects of already existing technological companies. The first group differs from the second first of
all, by presence of pre-incubation stage, which foresees involving of business incubator to the project
development at the earliest stage of its life, just before registration of the enterprise.
The most important principles of business education in the incubators are its continuity, obligatoriness
and individuality. Project team works with the coach from the first up to the last day of its stay in the
incubator. Moreover, this education is obligatory. In essence, training is the main service rendered by
the business incubator. If the project team needs no education, it does not need an incubator. Finally,
the main form of education is work with the business coach, who is «assigned» to the project and is not
substituted for the whole duration of its stay in business incubator.
Training is the most important, but at the same time the most «untechnological» component of
innovation startups incubation process. The task of the incubator is to transfer not only business skills,
but also entrepreneurial culture. Just for that reason training may benefit, only if it is carried out in the
format of permanent personal communication, and not of special courses, lectures and seminars. The
coach should know in details the curated projects, have wide personal business and managerial experience
and have absolute weight in the eyes of clients of business incubators.
Just for that reason, search for good coaches is at the same time the most important and difficult
task for creation of efficient business incubator: it is necessary to find successful entrepreneurs and
managers prepared to train on the permanent basis.
As the experience of successful business incubators show, efficient business coaches as a rule
are recruited from three main sources: Businessmen, who have sold their business; professional top-
managers (as a rule, after the end of their career); professional coaches, who have acquired practical
experience due to longstanding work with the projects of the said incubator. On the whole, one may
state that business training is not only the most important, but also the hardest replicated managerial
know-how in the field of support of the starting technological processes.
How can the business incubator motivate such highly qualified specialists who are also self-fulfilled
and successful people? Firstly, this work should be well-paid. Secondly, work in the business incubator
gives the possibility to expand personal contacts with the participants of the innovation system,
including investors and potential business partners, due to use of business incubator contacts.
Thirdly, this is access to insider information and possibility of tracing technological novelties before
their entrance to the market. Fourthly and finally, this work is prestigious. Coaches, who have come
to the incubator from business, are perceived as a part of managerial elite entrusted with socially
important mission.
Contrary to the conventional opinion, the term «business incubator» has quite a rough relation
to real estate object. The main function of business incubators is not providing startups with
offices, but tackling other key tasks: teaching business skills, attracting financing and establishing
horizontal links.
Thus, the main accent should be made on creating a comfortable place for communication located
in close proximity to university and private R&D centers. Another important principle of organizing
a business incubator operation is the following: the emerging innovation enterprise should receive
only the premises and services it really needs at the moment. In most the above studied innovation
centers, rent price for office and laboratory premises is equal or exceeds the average market one,
therefore such approach helps innovation enterprises save money without reducing the quality of
services and comfort, as well as rationally use areas and resources available for the technological
park or an incubator.

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2.2. Attracting External Financing For Innovation Projects

Continuing financial and economic crisis has entailed serious deterioration of the situation with attraction
of private venture capital. To resolve the problem of attracting financial resources, technological parks
are required to:
• Search for non-standard mechanisms of attracting external financing for innovation projects;
• Create the maximally comprehensive and friendly climate for the investor;
• Increase their proposal of projects which are promising from investor's viewpoint.
The need for financial support of innovation projects by means of state programs in form of grants,
shared financing and conditionally reimbursable loans is now recognized in practically all countries with the
active innovation development policy. In the majority of countries where the studied innovation centers
operate, the problem of financing innovation projects on pre-investment stage of their development
has been successfully resolved due to nationwide state programs of financial support of the innovation
business. Nevertheless in several cases, amounts and forms of such kinds of financing are insufficient,
which creates a great problem for the heads of innovation centers: such kinds of questions are beyond
the competence of both the management company and regional authorities and municipalities. In these
conditions, regions and some innovation centers have to create their own instruments for financing their
starting projects which could compensate deficit of financing from nationwide programs. In particular,
such instruments include public-private funds which offer interest-free or conditionally reimbursable
loans to investment projects. Other than enhancing their reputation, private investors who invest in
such funds may also be motivated by regional and municipal tax benefits.
Expanding the range of potential sources of external financing is also possible by attracting funds
of unqualified investors into venture projects. The term «unqualified investor’ in this context may refer
to both big institutional and small private investors without experience of financing innovation projects.
For example, in Hong Kong they managed to attract the of such investors to venture projects by
establishing a special «package» investment mechanism aimed at big entrepreneurs, manufacturers of
special equipment who had additional funds. The special investment mechanism allows reducing the level
of investment risks by means of forming a pool of shares of startups specializing in developing a certain
family of technologies. Instead of investing in a specific company the destiny of which is hardly predictable,
the investor obtains the possibility of investing his funds into development of a whole park of companies
working in this technological park on the same theme. It’s worth noting that the technological park is
a co-owner (not more than 5 percent of the charter capital) of all startups included in the investment
pool; this provides the investors with an additional guarantee that of proper supervision and management
of efficient use of investments.
Efficient intermediation and establishment of communications between resident companies on the
one side and venture investors and business angels on the other side is the mandatory condition for
success of an innovation centre, and one of its most important functions. This intermediary may be
fully successful under two conditions: a prepared demand for such investments (sufficient number of
high-quality promising projects which have been properly designed and which are comprehensive for
investors), and sufficient supply.
The first task can be resolved by creating efficient business education and business training systems
on the incubation stage, as well as having regular meetings and presentations for innovation centre
residents and their potential investors. Confidence of investors in little-known projects is gained mostly
through high quality of procedures used in the innovation centre for selecting the best projects, as well
as through efficiency of the project preparation system. Essentially, business education programs and
procedures for selecting projects and preparing such meetings are considered an instrument for reducing
investment risks. On the whole, the following are key for the efficient projects presentation to investors:

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• High-quality transparent procedures of projects selection for business incubators of the innovation
centre, or significant competition between the projects (queues) for dislocation in the innovation
centre, which helps choose the best ones;
• Meetings with investors; preparing presentations for these meetings, preparing business plans for
projects is an integral part of business training programs at the incubation stage;
• Organization that facilitates these meetings guarantees that all projects admitted to presentations
are properly prepared, with elaborated business plans comprehensive for potential investors, with
functioning organizational structure, understanding their marketing strategy; and which understand
their marketing strategy.
The most important instrument for resolving of the second task is forming a stable pool of loyal
investors around the innovation centre, those who’d be willing to invest in the projects located in it.
This informal pool strongly simplifies access to venture capital for the resident companies, as member
investors are from the very beginning oriented at working with projects of this innovation centre, are
loyal to it, have permanent informal contacts with the heads of both management company and single
projects, are informed about development and perspectives of resident companies and are confident in
procedures of projects selection and methods of their support used in the centre.
Networks of venture investors and business angels, with the support of state development institutes,
also play a significant role. Nevertheless, experience shows that it is hardly possible to create a stable
pool of venture investors and business angels loyal to the innovation centre based only on the possibilities
of such kinds of networks. Special role is played by personal contacts and contacts of the heads of
management companies, as well as by contacts within the frames of communities of investors already
formed in the region. On the whole, when heads of the innovation centre management company have
a wide range of personal contacts among the chiefs of venture funds, operating and potential business
angels, and a number of leading innovation centers, it’s one of the key conditions for efficient work of
these managers.

2.3. Establishing Horizontal Links

Forming horizontal links between the participants of innovation system such as researchers, innovation
entrepreneurs, venture investors and institutions supporting innovation business, is the key and
indispensable condition for founding a successful innovation centre. Mechanisms stimulating origin of
horizontal links help form and accumulate the “social capital”, i.e. raise the level of trust and awareness
of each other among the players of an innovation system, which results in reducing the collaboration
issues. For young innovation centers, the main task is catching-up development; these links compensate
drawbacks of the institutional environment and are required first of all to increase the level of mutual
confidence between the participants of an innovation ecosystem. In mature innovation centers, network
and horizontal links allow saving time and financial expenses for establishing business collaboration, and
are catalysts for innovation business development.
On the whole, instruments and managerial technologies used for stimulating creation of horizontal
links have the mission of resoling four basic problems:
• Deficit of information between the participants of an innovation system on each other, as well as on
the situation on the respective market, and trends in technologies development;
• Absence of mechanisms and permanent sites for establishing personal and business contacts;
• Deficit of confidence between participants of an innovation system;

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• Status problem: an unknown manager of a staring technological enterprise, which potentially could
be interesting for a big corporation or a grand venture investor, often has no idea how to draw
attention of the “seniors”.
The simplest and the most obvious way of stimulating formation of horizontal links between various
participants of an innovation system is to gather them under the same roof. Creating comfortable areas
for communication where various participants of an innovation system (university researchers, employees
of R&D subdivisions of big companies, participants of science-intensive startups, representatives of
service companies offering services to technological business) could regularly intersect in day-to-day
operations, get to know each other, share ideas and establish partner relations, is the most important
task of business incubators and technological parks.
Apart from its function as a site for communication, an innovation center should play the referential
role for companies located in it. The great majority of surveyed experts emphasize the importance of
constant personal contacts between supervisors of innovation center management companies and all
significant participants of the regional innovation system. First of all, this means universities, research
centers, large corporations, venture investors and state agencies dealing with support of innovation
business. These contacts should be maintained not only and not so much with top managers but directly
with those who may turn to be useful for a starting innovation enterprise. Use of such links widely expands
the possibilities not only of the innovation center itself, but also of startups located in it. The innovation
center and its managers share their personal contacts and reputation with the emerging businessmen.
The possibility of obtaining a recommendation and of direct connection with the necessary person or
organization is often more important than financial or consultative support.
Another important instrument of creating horizontal links between the participants of an innovation
system in a great number of successful innovation centers is autonomous network organizations (specialized
networks). As a rule, network structures of such kind are established around one or another “base”
institution, particularly, universities, technological parks, as well as regional state and municipal agencies
responsible for the innovation policy.
One of the most illustrative examples of such specialized network organizations that unite and render
services to the participants of an innovation system is the Connect network which operates in the region
of San-Diego, South California. Largely thanks to Connect, recently San-Diego has started to win the
competition over its neighbor, the Silicon Valley. The network offers services in a number of spheres: help
in creating and developing technological enterprises, raising the investment quality of small technological
companies, establishing horizontal links between investors and innovation companies, help in forming
clusters of high-technology companies, GR, strategic research, lobbying and participation in forming
the national innovation policy, promoting regional technological companies on national and international
levels, professional education, sharing experience, and popularizing technological enterprise in the society,
providing legal and consultative advice in establishing professional unions.
Another great example of an autonomous network organization oriented at rendering services to
participants of an innovation system is the Association of graduates of Tsinghua University, which plays a
significant role in forming the innovation ecosystem in TusPark technological park, and to great extent levels
drawbacks of the institutional environment, which hinders development of innovation enterprise in China.
In spite of material differences between the above listed successful autonomous network organizations,
one may trace a number of factors, which have eventually ensured their efficiency and popularity among
participants of regional innovation systems:
• Instruments and services offered by the network should satisfy consumers’ needs at the right time
at the right place;
• Strong brand and good reputation among all the participants of IC;

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• Willingness of the IC participants to collaborate;


• Adaptability and flexibility.
There are another two features that distinguish successful networks that professionals and are aimed
at facilitating their business contacts. Firstly, they should have a good reputation among all participants
of the process, as well as represent the community of professionals free of strangers. And secondly
they should be considered an active and efficient business instrument by the professionals. None of this
is possible without using the mechanisms, or selecting the best (startups, venture investors, etc.),
or assigning target groups for participation in specialized events. Moreover, many of such events may
be organized only in a “selected membership club” format. For instance, one of Connect’s «hits» is the
venture round tables, i.e. closed informal meetings of large venture investors and technological startups
selected by an authoritative jury in the course of multistage competition. Efficiency of such meetings
is ensured by the fact that trustworthy competition procedures believable are the first stage of due
diligence startup claiming investments.

2.4. Creating the Efficient Technological Park Infrastructure

A Technological Park primarily means not a building but rather a complicated business environment,
which stimulates growth of innovation companies and which is formed under the influence of specific
local conditions and market demands. A Technological Park is not a place, but rather a process. And the
main task of technological parks should certainly be the assistance to resident companies. That’s why,
on the one side, a technological park is a real office where residents and their clients lodge, meet each
other and communicate, and, on the other side, it is a range of concrete and extremely diverse services
rendered to these residents.
If we analyze the trends of territorial dislocation of technological parks in retrospect, one may notice
that up to 1980s, a steady tendency existed to bring them out of the limits of the existing municipia, to
built «cities of the future» in an empty space. Over the last 25 years however, the idea of organizing a
scientific park inside the city has become more popular. This way it is easier to establish links between
innovators and funders; furthermore, the park itself becomes an urban-planning enterprise. Therefore
nowadays, scientific and technological parks are now parts of cities. Two thirds of the modern scientific
parks are located on the territory of the cities, and one third, in close proximity to them, up to 50 km.
On the whole, the experience of the last decades certainly testifies in favor of territorial integration
of technological parks in cities and suburbs, as such approach helps cut down expenses for creating the
required infrastructure, as well as simplifies establishing relations with the external world, and enables
the inflow of residents and their clients.
As for Asian technological parks, contrary to Europe, the main initiators and operators of similar projects
are not regional and municipal authorities, but rather national state bodies. As a rule, technological parks
are considered an instrument of a catching-up development. Generally, the first large Asian technological
parks learned from the experience of not only the largest American innovation centers such as the Silicon
Valley, but also of the Soviet science cities. The majority of the largest Asian technological parks and
technopolises imply developing vast territories, and actually are independent large-scale urban-planning
projects, to a certain extent integrated in the plans for developing the nearby cities.
Residents of technological parks may be:
• Young innovation companies which have trained in an incubator;
• Large companies, both international and transnational;

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• Research centers of universities;


• Startups (if there is a business incubator in the technological park).
However, irrespective of the correlation between these “inhabitants”, the experience of successful
technological parks shows that their infrastructure and the set of rendered services should be oriented
primarily at young enterprises. Firstly, big companies depend much less on the presence of various
services in the technological park. They come here rather to get an opportunity to use the potential
of a young enterprise which can fully exercise this potential in certain conditions only. Secondly, if we
analyze technical parks as institutes of regional development and transformation of the regional economy,
orientation at supporting startups and small innovation enterprises allows creating the maximum number
of working places in science-intensive branches, as big corporations, to the contrary, strive to optimize
of their number. Finally, small technological companies create true breakthrough innovations capable of
resulting in significant changes of existing markets, or establishing new ones, and they do it more often
than large corporate businesses.
Therefore, infrastructure offered by a technological park should be oriented at satisfying the needs of
this target group of consumers: small technological enterprises. Moreover, technological parks should
offer the infrastructure and a range of services that these enterprises would not find elsewhere. For
example, these may be small biological laboratories (up to 60 sq. m) which has all proper facilities (water,
cold and laboratory gases), is equipped with a minimal amount of specific devices and purifying systems,
and meets all safety requirements. Outside the walls of the technological park, it’s not impossible to find
such premises for a reasonable fee in the majority of European, American or Asian cities.
That’s why when we speak about premises, both laboratory and office, their adaptability and an
option of quick expansion in accordance with the changes in the needs of a growing company become
the priority. Buildings of many successful technological parks look like “boxes” without interior capital
walls which may be quickly adjusted (within 1-2 months) in accordance with the demands and possibilities
of a specific project. Adaptability of premises is also an important factor that ensures fullness of the
technological park and its stable growth, and that means stability of its business model. Thus, the
experience of Finnish technological parks shows that such kinds of projects achieve a break-even point
when their area exceeds 20 thousand sq. m, with their fullness not less than 95 percent.
The same principle works for services on operation and development of business offered to potential
residents of technological parks. A young innovation enterprise should receive only the services it really
needs at the moment. Quality of rendered services and, most importantly, the level of their customization
are among crucial factors of a successful competition of a technological park for the best projects and
talented people. That is why specific services may deal with adaptation of the rendered services to the
needs of each concrete project in those technological parks which have to sustain intense competition
for better projects with other innovation centers (primarily it refers to Asian innovation centers, which
resolve the tasks of catching-up development and are forced to gather first-class projects, literally, on
“many a little” basis). In other words, individual service adjustment here is “hand-made”.
The need for creating centers for collective use of scientific and research equipment for technological
park residents does not meet an unambiguous response. In some successful technological parks, such
centers already exist, and are considered an important element of infrastructure simplifying growth
of small science-intensive companies and reducing their capital expenses. In other just as successful
centers (such as Biopo^le techno park in Montpellier), they decided to give up collective use centers,
as their services were not requested by resident companies. Nevertheless, the majority of experts
say that they prefer to see university laboratories and other R&D centers in technological parks.
Moreover, for a number of successful technological parks presence of strong university research
laboratories inside them is one of the key competitive advantages (for example, Begbroke Science
Park, Great Britain).

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Finally, another important adaptive function of the technological park, although not evident at first
sight, is creating comfortable conditions for communication. By this reason, it is extremely helpful to
unite under the same roof companies which are currently at the same stage of development (for example,
to place small innovation enterprises as well as divisions of large corporations in the same technological
park), as well as university laboratories and R&D centers of large companies. Founders of such successful
technological parks as Technopolis in Oulu (Finland) and Ideon in Lund (Sweden) mentioned that without any
irony, the most important part of a technological park is a restaurant (and in Oulu, saunas also). On the
whole, one third of all the areas of successful European technological parks are allotted to public areas.

2.5. Establishing Social Links and Creation of Reputation (PR and Branding)

Ability to establish comprehensive dialogue with the society (in the widest sense) and its single elements
(business and academic environment) is one of the key factors of steady development of innovation
centers and scientific parks. The issues of identity, positioning and choice of an efficient strategy for
developing individual brands have recently become especially relevant with the growth of the number of
innovation centers in the world, escalation of competition between them and the increasing blurring of
the basic, “scientific park” brand.
On the whole, from the view point the brands evolution, scientific parks and innovation centers may
be divided into three groups:
• Parks the brands of which are based on the reputation of their base research institutes and universities;
• Parks PR-capital of which is the derivative of brands of the biggest residents;
• Mixed versions of brads which have originated due to synergy of reputations of the base scientific
institutes and the biggest or the most successful residents.
For each of these groups, components of a strong brand are different. Factors forming a strong brand
of an innovation center may be divided into two groups. The first one includes environmental factors
beyond control of scientific parks themselves: scientific reputation of the base university, the level of
technological, industrial, infrastructural, and socioeconomic development of the region, as well as of
the regional labor market, and the quality of state support for the innovation economy. The second one
includes controllable factors which directly depend on the strategy and policy of development chosen
by a specific scientific park or innovation center. The main controllable factors are: presence of big
international companies, stories of success, positive influence on the regional economy, quality of the
used procedures and of operating activity management of the innovation center, quality and range of
services rendered to the residents, efficient system of brand promotion, and spread of the information
about the center.
However many experts agree that there’s one common condition: to be strong, the brand should be
precise. Development of a long-term high-risk project, such as scientific park or innovation centre, to a
large extent depends on the expectations which are formed in the society with regards to its results.
The main risk here is the negative feedback when such expectations prove to be overstated or simply
erroneous. This often happens when estimating intermediate results or comparing the “achievements”
with similar projects in other countries. It is possible to avoid this trap only by means of constant
explanatory work media. The society should have a clear idea of what tasks and objectives are set to
a specific technological park, see the limit of its possibilities, and understand direction and strategy of
development.
According to the experience of successful parks, preparation and implementation of the development
strategy of a scientific park’s brand is based on the following general principles.

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Firstly, the development of scientific park’s brand should ensure attraction and support of key groups
of interests: state, universities, business and resident companies themselves. Respectively, the process
of strategy formulation should be based on identification of their demands and include elaboration of
answers to the question how scientific park may add to their satisfaction.
Secondly, the brand of a scientific park should emphasize positioning of the said technological park
across the globe and across the nation. In the conditions of intense competition for development resources
(perspective projects, venture financing and qualified personnel), the scientific park needs to formulate
a unique offer just for those potential residents and counteragents, which may be maximally useful for
achievement of its strategic targets.
Thirdly, the brand development strategy should be dynamic, and consider changes in the level of
development of the scientific park itself and its residents, as well as flexibly respond to the changes in
external socioeconomic environment.
It is important to mark that a strong brand is not only an obligatory condition for successful development
of the innovation center itself, but also an instrument for supporting young innovation companies.
Furthermore, the destiny of the innovation center practically always is the derivative of successes and
misfortunes of its residents. However, at the initial stage of development of startups, while they have no
“employment history” of their own, their perception by banks, venture companies and other counteragents
is significantly determined by the reputation of the technological park where they are residing.

2.6. Organizing the Work of Innovation Center Management Bodies

Traditionally, an innovation center is viewed as a development institute missioned to ensure growth of


science-intensive branches, increase of the number of well-paid jobs, commercialization of the advanced
technologies, attraction of private investments to research engineering, etc. However, one often
loses sight of the fact that an innovation center is an organization that performs economic activity.
Meanwhile, this side of their activity has key importance for providing efficient support to innovation
business, among other things.
Paradoxically as it may seem, an innovation center should be considered not only an institute of
innovation development, but also as a developer project, even though a rather specific one, oriented at
a particular group of consumers. Operating payback (and ideally the capacity of generating profit) and
presence of a stable business model of the innovation center is a precondition for its success. It’s not
only about financial self-sufficiency and stability, though they are also important, and are a condition for
steady development of the innovation center. A stable business model also makes relations between the
management company and the owners of the innovation center on the one hand, and resident companies
on the other hand, more comprehensive and transparent. The essence of these relations is based on
a simple scheme, “client – service provider”: innovation companies buy services that they really need
(rent, services on development and conduct of business) from the innovation center at a market price.
Efficient innovation centers have various business legal structures and diverse management structures.
There is one thing which unites them: in all studied cases, management bodies of innovation centers have
significant autonomy in taking decisions with regard to its founders and owners. Firstly, it refers to owners
represented by state and (or) local authorities where they participated in founding the innovation center.
Autonomy of management bodies is expressed not only by their independence in managing the current
operation of innovation centers and investment solutions, but also by their personnel. Management
bodies of successful innovation centers are formed as a rule from independent directors who are
mostly professional managers with a large work experience in private business. Importance of attracting

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independent professional managers with business work experience to administer the innovation center
is based on several factors:
• The main task of the innovation center is creating a favorable business environment, and providing
services in the area of business operation and development, which are demanded by innovation
companies. Only those executives can cope with this task, which have experience in carrying out
business, as they understand what particular services are requested, and how they should be rendered.
• Heads of the innovation center management company should have experience of working in an
organization which earns rather than distributes money. If the state, directly or via its representatives,
starts influencing too strongly on management of the innovation center, high risk exists of its
transformation from a center for rendering services to an innovation business, working on the basis
of a clear business model (client – service provider), into a center for distributing the state subsidies.
• Innovation center is a long-term project planning horizon of which is at least 15-20 years, while the
state, with little exclusion, is an extremely impatient and inconsistent executive.
• Profit-making cannot be the only task of the innovation center management company. And it is just
by this reason management bodies of the innovation center should have autonomy not only from
governmental authorities, but also from private investors and shareholders.
Another fundamentally important trace that distinguishes the management system of successful
innovation centers is absence of a single decision-making center, which would coordinate “from above”
the activity of all centers supporting innovation businesses, which often have similar tasks and different
jurisdiction. Functions of management companies are as a rule limited to administering the property
of the innovation center, as well as to rendering services on business operation and development to
resident companies. Apart from them, in “mature” innovation centers, services and support of innovation
centers are rendered by various state, university, private and social institutions, functions of which may
intersect, and actions of which are not always coordinated. However, as the experience of successful
innovation centers proves, the only way to efficiently eliminate these contradictions is to organize regular
meetings of the management company heads with leaders of independent support institutions working in
this innovation center, and to look for compromises, rather than to create a single coordination center,
or a “super administrator”.

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