USING CLUSTERS TO DEVELOP A NEW TECHNOLOGY DRIVEN ECONOMY

1. Mark Copsey 31 May 2005 USING CLUSTERS TO DEVELOP A NEW TECHNOLOGY DRIVEN ECONOMY

2. British – worked in Economic Development for last 20 years Worked in English Local Government and up to 2002 for Yorkshire Forward – the Regional Development Agency for the Yorkshire region Worked in South Yorkshire Objective 1 area on cluster development BACKGROUND

3. CONTENT • Using technology to create and drive competitive regions • Using cluster initiatives to achieve change • Experience working in the UK and New Zealand

4. YORKSHIRE

6. SOUTH YORKSHIRE – OBJECTIVE 1 REGION • In 2000 South Yorkshire was designated as an Objective 1 region • Total programme developed over 7 years of around £3B • Strategy built around 6 programme priorities

7. PROGRAMME OBJECTIVES • Reshape the economy by increasing the scale and presence of new and high technology growth sector companies • Modernise business base, maintain and develop a technologically advanced manufacturing sector • Help communities to re-engage • Capture new opportunities for communities in the process of economic transition • Remove barriers constraining economic growth

8. An industrial heartland based upon Steel, Coal Mining, Engineering (eg Railway). Up to 1980 GDP at UK average and just below EU average Went into severe decline through the 1980’s Hit employment and GDP hard – by early 1990’s below 75% of EU average and became an Objective 1 region in 2000 South Yorkshire GDP decline(EU=100) 100 95 90 85 80 75 70 65 1979 1981 1984 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 Source:Eurostat Regio SOUTH YORKSHIRE – THE CHALLENGE

9. South Yorkshire’s economy is too dependent on industries in decline Too few jobs, too few companies Focused on those sectors with the best prospects for growth Will require significant investment from external sources Used a cluster lens Investment Strategy STRATEGY TO ADDRESS PROBLEM Economic Infrastructure Community Hi Tech Clusters Capability Skills

10. Key parameters for activity from a total budget in excess of £1B: Total investment 633m euro Net jobs created 17,000 New firms created 500 Cluster strategies: Advanced Manufacturing and Metals Environmental and Energy Technologies Banking and Finance Bioscience Creative and Digital Industries CLUSTERS – HEART OF THE STRATEGY

11. Time limited Need for speed Need a driver Based on knowledge drivers Source knowledge internally and externally Core approach What have we got? - Research and company capability Where is it going? - Markets and their future shape Are we competitive? What needs to happen? THE APPROACH TO CLUSTER INITIATIVES

12. FINDING THE DRIVER Each cluster had to identify the opportunity around which a new employment platform could be developed • Metals ➜ Aerospace and Medical Devices • Environment ➜ Remediation • Bioscience ➜ Drug design and support services eg infomatics • Creative and Digital ➜ e-learning and multimedia content • Banking ➜ Outsourcing

13. Centre of the world in terms of stainless steel – world reputation but uncompetitive Huge decline in employment Had the classical cluster support infrastructure – research, companies large and small, specialised training, community But pointing in the wrong direction? Value still being generated Had to find a new driver Specialist alloys an increasing focus of attention Opportunity in Titanium cutting Becoming a driver linked to aerospace Had around 50 companies already >40% of activity in aerospace supply chain METAL CORE – CAN IT BE RE-INVENTED?

14. DEVELOPING THE DRIVER Casting Technology International Specialist supply companies eg Thornton Precision Components

15. INVESTING IN THE DRIVER

16. Has significant access to resources Developed a focal point – Advanced Manufacturing Park Integrated set of stakeholders: Project Team Les Pynn – Business Development DirectorLaura Watkinson-Teo – Project Co-ordinator Cluster DevelopmentBob Heywood - Advanced Engineering Cluster Manager Inward Investment Martin Tyler - AMP Inward InvestmentSimon Spode - RSY Inward Investment Jim Warden - AMP Marketing, US/Canada Funding Support Tony Newson - Objective 1 Tariq Javid - Regional Selective Assistance Land and Property Eddie Peat - UK Coal Dave Custance - Yorkshire Forward  PR and Events Theresa Lindsay CO-ORDINATING INVESTMENT IN THE FUTURE

17. ADVANCED MANUFACTURING PARK

18. ASSOCIATED INVESTMENTS • Not just about a site: • Supply chain development • Labour market assessment and training • Inward investment and investor support • Investing in the knowledge base • Investing in growing companies • Investing in incubation ➜ Critical was the COMMITMENT to investment

19. NEW ZEALAND

20. NZ – DIFFERENT PLACE - SAME ISSUE • 2003 - Trade New Zealand and Industry New Zealand merged to form New Zealand’s national economic development agency • Key objective to move New Zealand’s per capita income to the top half of OECD rankings • A global network of nearly 40 offices around the world • Incorporating Investment NZ • Challenge in NZ not greatly different to South Yorkshire – would be an Objective 1 country – on a par with Spain

21. NZ GDP PER PERSON CF OECD 1970-2003 For NZ per capita income to be in the top half of OECD by 2020, need to grow economy by 50% or $50bn

22. NZTE’S STRATEGY GIF Goal: “Return NZ’s per capita income to the top half of the OECD rankings and maintain that standing” • Government’s goal is very ambitious • For NZ business it means: • International engagement is crucial to achieve required growth • Strong connections between NZ businesses and key players in global value chains are critical • Collaboration between businesses is crucial to achieve scale for engagement • Market led rather than production push

23. We need to... Improve the international competitiveness and sustained profitability of NZ business Growth & Innovation Framework • 3 Strategic Goals • Build business capability • Improve the environment for enterprise & growth • Increase international connections so that we can... …help to return NZ’s per capita income to the top half of the OECD rankings STRATEGIC DIRECTION 3 Foundations Build international business capability Facilitate strategic projects Facilitate strategic relationships Clustering Initiatives fit all of these goals

24. BUILDING A CLUSTER AROUND HTS • Example of new technology – High Temperature Superconductors –where NZ has globalability and recognition • Objective to develop a technology capability into an industrial sector • Report commissioned - Aim should be to create HTS activity worth $300M pa by identifying and proactively engaging with industry in areas of early commercial opportunity From this to this…..

25. The ability to conduct electricity with minimal resistance Potential use in a number of areas within the power industry: Motors Generators Transformers Fault Current limiters Cables Wider applications in scientific and medical fields where strong or high magnetic fields are required HTS – WHAT IS IT ALL ABOUT?

26. Surprised many that NZ has leading capability in this industry Based on the quality of science in IRL, Victoria University and Canterbury University Spun out 3 companies – HTS 110 from IRL, Canterbury TX from University of Canterbury and Magritek from Victoria University But critical is the ability to receive and use the science HTS IN NZ HTS MRI HTS Motor

27. Did not fit any one cluster capability Needed the capability of a number – too risky and too hard for one go it alone Built around of 4 areas that had necessary competency Had international links and partnerships INDUSTRY DEVELOPMENT WITH CLUSTER LENS

28. HTS APPLICATIONS

29. HTS Opportunities

30. OPPORTUNITIES • Design and supply magnet systems • Supply current leads • Development of HTS magnet system products eg Power supply • Cryocooling • Development of prototype projects for use in NZ and beyond • Transformers • Fault Current Limiter • Fast Generators - aircraft • MRI and NMR

31. DETERMINING THE DIRECTION • Report proposed 2 10-year goals for developing an HTS cluster: • A company that is a major player in HTS devices • A base for the design and development of an international company in HTS power and rotating machinery • Continuation of on-going research in core HTS technology to feed future product development and maintain global links • Restructure R+D work around markets • Magnetic fields • Power systems • Energy conversion

32. ACTIONS TAKEN BY NZTE • Working group set up involving regional clusters: Wellington, Christchurch, Dunedin and Southland • Formalising the group into an HTS Consortium • Focus on engaging the private sector to drive forward the emerging commercial opportunities • Learn by doing • Our vision is to set up a structure within which: • Private sector led groups develop products • Utilise research capabilities at IRL & Canterbury &Victoria Universities

33. Inner ring separately funded body HTS Transformer DELIVERY MODEL FOR HTS WORK HTS Pilot projects HTS Wave power • HTS Commercialisation Consortium • Facilitate the development of expertise and capability within EDAs • Co-ordinate potential HTS partners and projects • Facilitate Industry partnership groups • Provide a focal point for international collaboration • Develop forward plan for HTS in NZ • Provide forum for HTS awareness Medical opportunity Develop centres of academic excellence on HTS Research focused development opportunities Applied Research Talent Powersystems Cryocoolers Current leads Business groups based upon technology opportunities Outer ring activities initiated with own commercial funding arrangements Cryostats

34. SEEKING TO REPLICATE

35. AG BIO – CORE OF NZ CAPABILITY

36. SUNSET - MARLBOROUGH SOUNDS