Only connect, wrote T S Eliot. San Diego, California, has done just that, and as a result the city has developed a multi-million dollar high-tech industrial base, employing thousands. San Diego's Connect is an "institutional mechanism.. . which networks the competences and resources you need to grow companies", according to Dr Mary Walshok, associate vice chancellor of extended studies and public programmes at the University of California, San Diego (UCSD), and a cofounder of Connect. "You won't build new knowledge-based companies without this."
Connect has its own powerful connections. Walshok was helped in the start-up by Irwin Jacobs, who founded Qualcom - a Fortune 500 company with a turnover of $4 billion. You can't have robust knowledge-based industry without world-class research, Walshok asserts. However, she says, some world-class research centres have failed to yield industrial benefits.
Take Houston, Texas, for example, where the high levels of biomedical research are similar to those carried out in San Diego by UCSD and the Salk and Scripp institutes. "In San Diego, we have a very robust industry, with nearly 300 biomedical companies, directly employing 30,000 people," Walshok says. Houston, though, has benefited from virtually no commercial spin-offs.
In the last 10 years, 60,000 high-tech jobs have been created in the San Diego region, which now boasts more than 1,000 knowledge-based companies. Some $4 billion of venture capital has been attracted into the region in the last decade, she says.
Much of this is due to the work of Connect, Walshok says, describing it as "an excellent example of a university programme that links the various actors and capabilities essential to promote economic development via knowledge-based industry".
Connect was launched in the mid-1980s, when California's economy was in turmoil: banks were closing, companies were going bankrupt and unemployment was running at 14 per cent. San Diego's Economic Development Corporation and the university decided to develop initiatives to encourage and support the development and growth of regional industries, especially those emerging as a result of university or institute-based research.
An advisory group was set up, which identified the need for briefings, lectures, courses and technical and social support for emerging and growing high-tech companies. In order to grow existing companies and develop new ones, there are four requirements, Walshok says. You need good research ideas, capital, legal and management know-how and marketing and manufacturing skills.
"The old industrial model rarely put engineers and accountants into a room together. But the new entrepreneurial companies have to work very fast to get to market, they have to be sensitive to finance and to global market issues. In order to innovate and be successful, they need diverse teams."
It's a two-way process. Scientists and engineers acquire financial skills and management supports, while lawyers, bankers, accountants and marketing professionals receive technical briefings on high-tech products. Connect also provides regular opportunities for high-tech entrepreneurs, research scientists and business service providers to interact and gives one-to-one technical and managerial assistance to individual entrepreneurs and companies. Finally, it works to increase the access of local companies to sources of R&D funding.
International events that bring together budding entrepreneurs and investors are a regular feature. "We organise two- to three-day conferences where people with technical business plans compete for places to present their plans to investors who come to us from all over the world. These include the vice presidents of research and development from the big international companies."
"In the new knowledge economies, the large companies are scouring the world for promising inventions and new products. In the old days, innovation was in-house, but, increasingly, the big companies are looking for small companies to do their innovation for them."
These conferences, notes the Californian academic, are "gateways for the best and the brightest. The companies are looking for strategic partnerships. It's not a question of raiding, because they want to benefit from the human capital and capability of small companies." The small companies can license products to the large companies and then continue with their R&D. In the past, Walshok notes, companies developed their local markets before moving to the national and then global stages.
"Knowledge-based industries, though, think globally from the outset," she says. "If they're dealing with new products, they have long R&D cycles. You have to take a different business approach than you would if you were running a dress shop, say."
According to Walshok, in order to develop a world-class, knowledge-based industry, three elements, "three Cs" need to be in place: a community which is rich in concepts and ideas that will work; a labour force that can compete with the best in the world (i.e. competency); and connectivity - that is, linkages to markets and capital.
Ireland, she says, is well positioned. "Ireland has all the components, but they are not connected. There's a great entrepreneurial spirit, you're now embarking on significant investment in science and technology and your workforce has a good reputation around the world." However, she warns, "a lot of the businesses that service industry are still living in the old economy, yet there are many people who are anxious to start up new innovative companies. Public perceptions of where wealth and jobs are to be created are out of step with the times."
Despite the euphoria about the £1.9 billion allocated to science and technology under the National Development Plan, concerns are being expressed here about the lack of mechanisms to transfer research know-how into business. Putting vast amounts of money into research is all very well, critics argue, but how can we ensure that the State will gain an economic benefit? An initiative based on Connect could be established in Ireland. Mary Walshok was in Dublin earlier this month visiting the National Institute of Technology Management (NITM), based in UCD. The institute, set up in 1997, was part of an Enterprise Ireland initiative in R&D management.
The institute's mission, explains Breffni Tomlin of NITM, is threefold. "We want to get the practice of technology management up to the highest level and to maintain it at that level," he says. "We want to work with the multinationals that are based here and support the management of technology-intensive companies and encourage them to develop R&D in Ireland. We also want to support local technology entrepreneurship so that the number of technology-intensive companies can increase."
Tomlin is impressed by Walshok's work and the impact it has had in both Sweden and Scotland, where, with her co-operation, there are initiatives based on Connect. "We are very impressed with what they have accomplished and we want to continue to explore a connection with the programme."
