Aug 4, 2021 at 12: 53 am

Five Pillars of Innovation Superclusters

Christian Rangen

6 MIN READ

The Triple Helix

In the 1990’s, Professors Henry Etzkowitz and Loet Leydesdorff conceptualized the Triple Helix framework, laying the groundwork for 25 years of Western innovation policies. The Triple-Helix framework was seen as a “university-industry-government in the Knowledge Society”.

Over the coming years, the Triple Helix model made its way into most western government’s innovation policies, leading to a large number of Science Parks, Technology Transfer offices and close industry-university relations. Eventually, the Triple Helix would become the backbone of many innovation cluster programs, connecting research, government and industry into a close partnership.

The shifting paradigm

Over the past 10-20 years, researchers, practitioners and emerging innovation economies have shown that the Triple Helix is insufficient to explain and support the entrepreneurial ecosystems emerging around the world.

From China to Israel, recent economic growth has showcased the power of the more “entrepreneurial economy”.

Academics from Harvard, MIT, BI have all added to the framework, eventually coming up with the entrepreneurial ecosystem model, the Five-Point or Pentagon model. In it, entrepreneurship and private risk capital is recognized as equally important pillars to the modern economy.

Combined, these five make up the five pillars of Innovation Superclusters. Superclusters are shifting from Triple Helix to Pentagon*. They actively recruit key members from Corporate, Capital, Government, Academia and Entrepreneurship, then go on to build a system-level innovation engine for national and international impact.

Explaining the Five Pillars

Private Risk Capital

In Western innovation policies, private risk capital was largely irrelevant. That is no longer the case. Looking to innovation hotspots like San Francisco, Tel Aviv, Beijing and Stockholm, private, competent risk capital matters.

Today, you can not build a strong ecosystem without a large number of capital actors (hint: this is not your local credit- and savings bank). With growing access to capital, good ecosystems are able tap into, raise and activate larger amount, from highly capable investors. A dynamic and liquid ecosystem will also create opportunities, investments, rapid investment rounds and – hopefully – strong exits. This again fuels the next generation in the ecosystem, creating a positive reinforcing mechanism, allowing strong ecosystems to get stronger.

Superclusters, looking to compete globally need private risk capital. A lot of it. In many forms. A single venture fund in your local market might sound like a great initiative, but it is a drop in the bucket. What is needed is a coherent Supercluster Capital Strategy. How many investors, in total, do you have in your Supercluster? What’s the access to angels and Superangels? How many investors are previous founders? What is the access to Corporate Venture Capital?

Do you have a large enough portion of lead investors, helping pull in outside capital beyond the local region? Do you even know the top 50 investors in your field? Are term sheets, CLN’s and SHA’s readily available in the Supercluster? How does the Supercluster help connect startups and the right kind of investors? These kinds of questions all fall under the domain of a Supercluster’s work on activating private risk capital.

Don’t build a Capital Strategy all by yourself. Gather a wide group of stakeholders with different skillsets and expertise. Please, make sure you have minimum 30% scale-ups and 30% investors in the room. Hint: public funding sources don’t count here.

Startups, Scale-Ups, and Accelerators

The “Entrepreneur” pillar is a broad one. Here, we place all aspects of entrepreneurship in relation to the Supercluster. That usually include startups, scale-ups, growth companies, accelerators, incubators, meet-ups and events.

How many startups are active members of the Supercluster? How many new startups can the cluster help develop over the next decade? How many scale-ups (fast growth companies, have raised more than $25M) are members of the cluster? How can the Supercluster help them grow faster?

How many accelerator programs does the Supercluster have? Should the cluster develop its own, in-house accelerators or partner with others? How many Incubators, around your Supercluster theme, do you partner with?

How can the cluster help scale a number of scale-ups over the coming three years? How can the cluster build a more entrepreneurial culture within the cluster? How can the cluster enable more “power-coupling” between startups and corporates? How many scale-ups can the cluster help reach IPO in the coming decade?

These are typical questions explored within the Entrepreneur pillar.

Note: the cluster does not have to build everything in-house. Strategic partnerships, international partners and collaboration models are core assets that can be nurtured at the cluster level and benefit all members, at less operating costs. We call this the Supercluster Accelerator Strategy.

 

 

Corporate Members; Local, National, International

Most clusters start out with a focus on “what does our handful of corporate members and partners need?”, “How do we serve them best”.

This is not the case in a Supercluster.  A strong Supercluster captures key industry leaders and leadership, attracts all the key corporates and cornerstone companies, but it also goes beyond that, maybe even far beyond that.

A true Supercluster aims at the development of the entrepreneurial ecosystem, not just the interests of established firms. Superclusters are able to bring in and activate a broad range of startups, scale ups, world-class researchers, top notch policy makers and active investors. Corporates, while possibly not fully seeing the possibilities in the Supercluster, are equally attracted and, over time, start adapting their own, internal innovation policies, strategies and even culture.

Successfully engaging with a Supercluster should naturally nudge any corporate to open up its innovation processes, increasingly moving towards what the literature calls “Open Innovation”. By establishing trust, personal connections, identifying shared industry-level challenges and a joint ambition to solve those industry-level challenges, corporates, even head-on competitors should, over time, find avenues for collaboration within a Supercluster.

Building an early Supercluster, it makes sense to find a senior industry leader, perhaps recently retired, to take on the role of Chairman of the Board and overall senior spokesperson. Most cluster boards have a large representation of corporate leaders on its Board of Directors. That’s ok, but make sure to balance this out with investors, scale ups, academics and government too.

Universities, Business Schools, and Research Labs

“Academics” cover a broad field and could include:

  • Direct involvement of local universities and business schools
  • Access to top-notch research experts and professors
  •  Research programs, anchored in the Supercluster topics or needs
  • PhD programs, researchers and research projects aligned with the Supercluster’s needs and interests
  • Education of High School, Bachelor, Master’s, PhD and MBA students in the fields of interest to the Supercluster
  • The building and operations of cutting-edge research labs, like an AI-lab

Equally important, is connecting far beyond the local region. Strong Superclusters will naturally develop far-reaching partnerships for student exchange, academic and research exchange, joint research programs and educational programs.

Importantly, and sometimes forgotten, is the role the academic partners play in building the future workforce and knowledge base of the members in the Superclusters. Working closely with industry leaders, academia can shape new learning experiences and educational programs – built around future needs.

Finance Innovation, a Fintech Cluster based in Bergen, Norway, worked with the local Business School, NHH, to create a two-year Executive MBA program in Technology and Innovation of Finance. Equally, the Seafood Cluster worked with NHH to develop a part-time, two-year MBA in Seafood Management, most likely the first of its kind anywhere in the world.

 

Government, Policies, and National Programs

Academically, the role of government in shaping innovation is raging. Free market believers tend to argue the government should just get out of the way and let markets settle things. Others argue that market failures (early stage technology development, collaboration projects and other industry-level activities) all benefit, or even require an active government intervention.

UK-Based Chair in the Economics of Innovation and Public Value at University College London, Professor Mariana Mazzucato, has published significant evidence of the role of the government in active policies, eventually giving birth to the foundational technologies today used in smartphones, the internet and endless industries around the world.

For Superclusters, the collaboration between Government and industry, and Government and ecosystem is crucial. Without Government support and leadership, either actively (visionary, cluster programs and funding) or passively (through policies, taxes and selected grants), few natural innovation hotspots would exist today.

Many look to and learn from the success of the Start-Up Nation, Israel. Few realize the critical role the Government played in both policies, funding and establishing a generation of publicly-funded, but privately-run venture capital funds in Israel, playing a key role in kickstarting the tech clusters that emerged in the following years.

Today, any Supercluster wants to actively involve and collaborate with Governments. Most Superclusters would build on the existing national economic development plans, in “industries of the future”, like AI, Seafood, Tech or Tourism.

Malaysia built its early Supercluster Program on the 2050 National Transformation Plan, TN50, looking at the long-term economic development of the nation towards 2050.

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Download the full report here to explore what Innovation Superclusters are, how they are formed, and how countries can get started building one.

If you want to get a taste of the digital strategy simulation Supercluster!, RSVP here to join the 2-hour Supercluster! Digital Discovery Session on 2nd September (11:00 – 13:30 CEST).

If you want to become a certified Supercluster! expert, sign up here for the Digital Simulation Facilitator Certification (DSFC) – a 100% online training and certification program for the world’s leading innovation cluster simulation. Once certified, you can use the digital strategy simulation with your clients, cluster, hub, ecosystem, national innovation agencies, or your business school students.

Christian Rangen
Christian Rangen

Strategy & transformation advisor to companies, innovation clusters, ecosystems and governments around the world.

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