R UIMTELIJK P LAN B UREAU NETHERLANDS INSTITUTE FOR SPATIAL RESEARCH Regional knowledge networks in the Dutch ICT services and life sciences sector Anet Weterings & Roderik Ponds Netherlands Institute for Spatial Research The Hague, the Netherlands Paper prepared for the DIME-LIEE / NTUA Athens 2006 conference, 30 November – 1 December 2006

Background of the study Aim of Dutch Ministery of Economic Affairs (2004): to stimulate regional contacts between firms (mainly SMEs) and research institutes Economic geography: –Localised knowledge networks with many regional contacts among organisations –Firms within those networks obtain more knowledge and therefore perform better

Recent criticism Spatial proximity is not a necessary condition for knowledge transfer: are there regional knowledge networks? More attention for heterogeneity among firms in the regional network: –Due to differences in power (mainly size of the firm) –Differences in the internal knowledge base

Three research questions Are there regional knowledge networks and what is the structure of those networks? What type of firms use regional contacts to obtain knowledge? To what extent is there a relation between the firm’s network position and it’s innovative performance?

Outline empirical research Two sectors: ICT services and life sciences Three regions: South-Holland and Gelderland (life sciences) and the Middle of the Netherlands (ICT services) Data collection through telephone survey (response 38-45%) Social network analysis and regression analyses

Measuring knowledge contacts Question: Have you ever approached an organisation in the region when you were confronted with problems and has this helped to solve the problem? Distinction between contacts for: –Technological knowledge –Organisational knowledge ‘roster recall’ method: mention contacts on a list of names and add missing contacts

Life Sciences - Gelderland Technological Organisational 20 firms interviewed Firms with contacts Technological: 95% Organisational: 35%

Life Sciences – Zuid-Holland Technological Organisational 38 firms interviewed Firms with contacts Technological: 68% Organisational: 27%

ICT services – Middle country Technological Organisational 135 firms interviewed Firms with contacts Technological: 48% Organisational: 19%

Which firms have many regional knowledge contacts? Degree Centrality Regional Life-Sciences Degree Centrality Regional-ICT Constant 5.543* (3.049) 0,128 (0,131) Log (size) 1.907** (0.845) 0,208*** (0,057) Log (age) (1.684) -0,047 (0,109) Log (years of working experience in life sciences/ICT of founder) * (1.805) 0,027 (0,066) Entrepreneurial experience founder (0.944) -0,094* (0,053) % employees with university degree (0.019) 0,002** (0,001) % employees with > 5 years work. experience (0.013) 0,001 (0,001) Region 2.451** (1.066) - N46113 F1.794,77*** R-square0.1070,205 * p < 0.10 ** p < 0.05 *** p < 0.01

Measure innovative performance Different measures for the two sectors: Life sciences: number of patents ICT services: share of turnover due to the sales of new products or services between 2003 and 2006

Relation firm’s network position and innovative performance ICT-OLSICT- backward Constant33,252* (18,585) 29,537* (15,072) Log (unvalued degree centrality) -5,503 (11,444) - Number of non-regional Relationships -0,452 (2,416) - Share fte in development new products or services 0,388*** (0,109) 0,414*** (0,090) Log (size) 7,414 (8,146) - Log (age) -22,266 (13,950) - Log (years of working experience life sciences founder) -5,721 (7,724) - Dummy entrepreneurial exp. founder 10,310 (6,412) 13,419** (5,642) % employees with university degree 0,258*** (0,096) 0,262*** (0,091) % employees with > 5 years working experience 0,022 (0,077) - N92 F4,925***14,207*** R-Square0,3480,324 Life-Sciences OLS Life-Sciences Backward Constant-0,779** (0,377) -0,537** (0,264) Log (unvalued degree centrality) 0,547** (0,201) 0,620*** (0,176) Number of non-regional relationships -0,009 (0,024) - Log (size) 0,211* (0,110) - Log (age) 0,079 (0,206) - Log (years of working experience life sciences founder) 0,272 (0,219) 0,412** (0,189) Dummy entrepreneurial experience of founder 0,076 (0,117) - % employees with university Degree 0,003 (0,002) - % employees with > 5 years working experience 0,000 (0,002) - Region0,023 (0,127) - N39 F2,215*7,437*** R-Square0,3890,287

In sum, There are regional knowledge networks, but: –Not all firms are involved –Large differences between the technological and organisational knowledge Characteristics of the firm are related to the firm’s network position –Size –Different indicators of absorptive capacity Firm’s network position is not always related to the innovative performance of firms

Future 1.Characterising the regional network links (long-term contacts? How often face-to-face contacts?) 2.Spin-offs: Comparing the knowledge network with structure of spin-off network Examing the importance of labour mobility and educational networks for the establishment of regional knowledge networks