Impact of Science Parks and Innovation Centres: Some initial findings Charles Monck Charles Monck & Associates
Context and Objectives 30 th anniversary of UKSPA Many changes since the last review by Angle Technology in 2003 Lack of up-to-date performance and impact data on Science Parks and Innovation Centres Very low profile of Science Parks and Innovation Centres in successive Governments Research and Innovation Strategy Complementary to the parallel study undertaken by David Rowe and IASP for the European Commission 2
Growth of members over time Science Parks Innovation Centres Bio Incubators Date No GFA m sq ft Av area Sq ft No GFA sq ft No GFA sq ft <1980 2 1.76m 880k 1980-9 14 3.75m 268k 2 95k 1990-9 13 3.93m 302k 1 21k 1 31k 2000-4 9 1.87m 208k 6 130k 2 140k 2005-9 6 1.57m 262k 8 334k 3 159k 2010-14 7 1.21m 173k 11 306k 6 376k Total 51 14.09m 276k 28 886k 12 706k 3
Number of Science Parks by Gross Floor Area ( 000 sq ft) 9 8 7 6 5 NO 4 3 2 1 0 <50 100 150 200 250 300 350 400 450 500 550 600 650 700 750 >750 GFA of 51 Science Parks 000 sq ft (average size 276,000 sq ft) 4
The Survey of Science Parks, Innovation Centres and Bio Incubators UKSPA members In operation (2014) Responses from members Science Parks 51 29 Innovation Centres 28 4 Bio Incubators 12 8 Total 91 41 UKSPA members In operation Sample Sample as % of total Gross floor area 15.6m sq ft 8.2m sq ft 53% Area occupied 12.8m sq ft 6.6m sq ft 52% Number of firms 4,058 1,978 49% Employment 60,541 29,763 49% 5
Economic impact 1. Gross (and net) jobs created in the local economy 2. New firm formation 3. Growth and development of firms on and off science parks and innovation centres 4. Harnessing the knowledge base 5. Strategic added value to partners 6
Most important contributions of SPs/ICs to local economy Rank Factor % 1 Being a highly visible centre for technology and innovation in the local area 100 2 Having specialised property and facilities for technology businesses 97 3 Creation of new technology businesses 95 4 High quality employment creation 90 5 An excellent working environment that attracts and holds high quality technical staff 88 6 Technology transfer from knowledge base (university etc.) to businesses 86 7 Diversification of the industrial base of the local economy 83 8 Inward investment of technology companies 79 9 Employment creation 76 7
1. Employment on and off SPs and ICs Firms on SP/IC Firms that left SP/IC Total % Science Parks 54,100 54,000 108,100 78% Innovation Centres 3,700 5,600 9,300 7% Bio Incubators 2,700 900 3,600 3% Total 60,500 60,500 121,000 88% SPs that closed 16,500 16,500 12% Total 137,500 100% 8
Geographic distribution (SPs only) High Tech in region % of total employment SP employment % of high tech jobs in region Eastern 52,279 2.6% 24,872 48% East Midlands 98,979 3.9% 3,262 3% London 176,265 3.9% 944 1% North East 26,797 2.6% 1,934 7% Northern Ireland 3,286 North West 77,053 2.5% 8,348 11% Scotland 61,178 2.5% 14,084 23% South East 223,748 5.7% 27,781 12% South West 75,806 3.1% 2,350 3% Wales 25,303 2.0% 121 0 West Midlands 60,619 2.5% 18,436 30% Yorkshire & Humber 48,144 2.1% 2,628 5% Total 926,171 3.3% 108,045 11% 9
Sectors Included in the High Tech definition 2110 : Manufacture of basic pharmaceutical products 2120 : Manufacture of pharmaceutical preparations 3250 : Manufacture of medical and dental instruments and supplies 6201 : Computer programming activities 2611 : Manufacture of electronic components 6202 : Computer consultancy activities 2612 : Manufacture of loaded electronic boards 6203 : Computer facilities management activities 2620 : Manufacture of computers and peripheral equipment 2630 : Manufacture of communication equipment 2640 : Manufacture of consumer electronics 6312 : Web portals 2651 : Manufacture of instruments and appliances for measuring, testing and navigation 2660 : Manufacture of irradiation, electromedical and electrotherapeutic equipment 2670 : Manufacture of optical instruments and photographic equipment 6209 : Other information technology and computer service activities 6311 : Data processing, hosting and related activities 7211 : Research and experimental development on biotechnology 7219 : Other research and experimental development on natural sciences and engineering 7120 : Technical testing and analysis 10
2. New firm formation IMPORTANCE OF START UPS Proportion of firms coming to SP/IC as a start up (n=38) Proportion of firms in more than 1,500 sq ft units who came to SP as a start up (n=34) No in sample % of sample Number of firms in SP/IC portfolio 860 firms 46% 1,870 firms 127 firms 27% 268 firms SUPPORT FOR START UPS No of SPs/IC with pre incubation/ incubation programmes n = 41 Sample No Av no per SP/IC No of firms SP/IC Portfolio 21 (51%) 1 47 Number or firms per incubation programme 245/yr 12/yr 500 /yr No of SPs/ICs raising funds for start ups 9 SPs 20 SPs Funds raised over last 7 years 187m 3m/yr 60m/yr Firms supported over last 7 years 268 firms 4/yr 77/yr 11
3. Growth and development of tenant companies STAGE OF DEVELOPMENT Response n=37 % of firms in sample No of firms in SP/IC portfolio Early start up stage (< 2 yrs old) 22% 890 Product development stage (>2 yrs old) 12% 490 Lifestyle and service businesses 12% 490 Mature businesses 37% 1,500 Fast growing firms 17% 690 Total/ number of firms 1810 firms 4,060 EXPORTERS n=29 No exports < 30% > 30% % of sample 49% 33% 18% In portfolio (4,060 firms) 1,990 firms 1,340 firms 730 firms 12
Anchor tenants and M&A ANCHOR TENANTS (SPs only) No of firms No of employees Area occupied No in sample n=23/25 50 9,400 1.4m sq ft % of sample 4.4 49% 33% No of firms in SP portfolio 133 27,000 4.6m sq ft Profile of average anchor tenant 200 staff 34,000 sq ft MERGERS/ ACQUISISIONS M&A amongst current tenants N =31 Tenants that left due to M&A activity N =23 No in sample 183 137 % of sample 13.2% 12.7% No of firms on Science Parks 400 380 Av number per Science Park 5.9 6.0 13
Services provided by SP/IC Services SP (29) IC (4) Bio Inc (8) Total None Raise risk and loan finance 21 3 7 31 10 Improve marketing 19 4 6 29 13 Better financial controls 17 1 3 21 19 Other business problems 21 2 6 29 12 14
Managers views on the value of key services Universities/ research institutes LEPs and develpoment agencies Mentors/ business advisers TSB support services LAs' support services Venture/seed funding Legal service firms UKTI and FDI partners Financial institutions Patent professionals Training providers UKTI export services BIS GrowthAccellerator Market research firms 0% 50% 100% Very important Moderately important Slightly important Not important 15
4. Harnessing the knowledge base SPIN OUTS FROM UNIV and RIs % of firms on SP/IC No of Spin - outs (All Parks) Now on SP (N=33) 7.6% 310 Number that were on SP and have left (N=32) 8.6% 350 Total 660 ACCESS to UNIV - RI KNOWLEDGE BASE % of firms on SP/IC No of firms All SPs Employment of local graduates (N= 33) 39% 1,580 Relationship with Univ/RI (N= 33) 27% 1,090 Using Univ/RI facilities (N= 31) 21% 850 Student projects (N=31) 15% 610 Collaborative research projects (N=33) 12% 490 16
5. Strategic added value to partners Profile of the local area Visiblity of innovation locally Enhanced profile of University/ RI Tech transfer and spin outs Commercialisation of research Entrepreneurship in the University Improving the student experience Source of income for University/ RI 0% 20% 40% 60% 80% 100% Very important Moderately important Marginally important Not important Not applicable 17
Engagement with the Univ/RI Location in relation to Univ/RI SP (29) IC (4) BIO (8) Total SP/IC on or adjacent to Univ/RI 16 0 5 21 SP/IC within 3 miles of their closest Univ/ RI 8 0 3 11 SP/IC not located close to Univ/RI 5 4 0 9 Type of engagement SP (24) Univ/RI represented on the Board of the SP/IC 18 1 7 26 Research group from Univ/RI an occupant of the SP/IC 20 0 6 26 SP/IC shares some services with the Univ/RI 17 1 8 26 University is a shareholder in the SP/IC 13 1 7 21 TTO/ Research and enterprise has an office on the Park 12 0 5 17 SP/IC shares scientific infrastructure with the Univ/RI 11 1 4 16 University is the main shareholder (over 80%) 10 1 1 12 IC (-) BIO (8) Total (32) 18
Participation in external bodies External Body N = 41 No of SPs/ICs % Participate regularly in committees related to regional / local startup and SME business support programmes 32 78% Participate regularly in committees related to regional / local SME innovation programmes 29 71% Regularly attend University committee(s) Regularly attend Chamber of Commerce committee(s) 27 66% 17 41% Chair of any sub groups or committees of local or regional actors relevant to the work of the SP/IC 16 39% On the Board of the LEP (England only) 2 5% 19
Funding of business support services SPs (29) ICs (4) Bio (8) Total (41) Spend m < 1m 9 1 2 12 6m 1-2m 2 3 2 7 10m 3-5m 3 3 12m 6-10m 4 1 5 40m Total 18 4 5 27 68m Sources: Public sector 35m Private sector 33m 20
6. Property issues - development 2000-12 Property development Sq ft developed % Stock Source of funds Spend % spend New Build 2.9m sq ft 34% Public sector 202m 39% Refurbished 2.0m sq ft 24% Private sector 314m 61% Total sample 4.9m sq ft 58% Total sample 516m 100% Total all SP/ICs 9.2m sq ft Total all SP/ICs 970m Investment SPs ICs Bio Total Value < 2m 3 2 2 7 7m 3-5m 6 1 1 8 29m 6-10m 6 0 2 8 67m 11-20m 9 1 1 11 167m 21-40m 3 0 1 4 91m 41-80m 1 0 0 1 57m 81-100m 1 0 0 1 98m 21
Scope for future property development Availability of land with and without planning permission Land with planning permission Land without pp Premises area sq ft SPs ICs Bio Total Area m sq ft No Area m sq ft None 10 2 1 13 0 22 < 50,000 5 2 1 8 0.2m 2 83k 51-100,000 3 3 6 0.5m 4 0.3m 101-250,000 6 1 7 1.3m 6 1,1m 251-500,000 2 2 4 1.4m 2 1,0m 501-1m 1 1 0.5m 3 2.1m > 1m 2 2 3.0m 2 10.8m Total 29 4 8 41 6.9m 41 15.4m 22
6. Property - relative importance of funding sources Regional bodies (LEPs and DAs) Univ/RI Private sector tenants EU funding Local government National government Banks Property developers 0% 20% 40% 60% 80% 100% Very important Moderately important Marginally important Not Important 23
7. Some policy implications Very uneven geographic coverage of Science Parks Weak/ fragmented provision in many major cities Linkage with Catapult Centres and other Public sector research institutes Increased engagement by the property development/investment institutions Under utilisation of Science Parks and Innovation Centres in the implementation of Government s research and innovation policies Low level of funding to support incubation and growth of tenant firms Continued dependence on public funds for the expansion of Science Parks and Innovation Centres in weakest regions 24
8. Proposed next steps 1. Draft research report with case studies 2. Develop and refine policy implications 3. Prepare policy paper setting out the role of science parks and innovation centres for Government, TSB, and LEPs/ Development Agencies and other key stakeholders 4. Review and revise the annual statistical survey 25
Questions and discussion Charles Monck & Associates Tel: +44 1423 566198 Levens Hall Mob: +44 7949 081653 Lund Lane cmonck@charles-monck.com Killinghall Skype: charles.monck Harrogate HG3 2BG North Yorkshire 26