Tuesday, June 9, 2009

Barcelona's Big Bet On Innovation

This is an interesting and, if I may say, very relevant piece in Businessweek on what Spain has been working on since 2004 to engender innovation. The cluster effect situated in the beautiful city of Barcelona is regarded as a work-in-progress Even with 70 science parks already in existence in Spain. 22@Barcelona Chief Executive Josep Miquel Piqué is quoted as saying, "But these are not enough to transform an economy". "Knowledge infrastructure is not just fiber and telecom. You also need things like good food, wine, and aesthetics. So cities have become the new neuro-centers of the knowledge economy."

The aim is to create what Piqué describes as a "cluster of clusters," where professionals in emerging tech and service sectors can co-mingle and serendipitously dream up hybrid industries.


Few neighborhoods more dramatically illustrate urban planners' shifting attitudes toward industry than Barcelona's Poblenou district. In the late 19th century, Poblenou was promoted as the industrial center of Spain. Over time, Barcelona's citizenry wanted its polluting factories moved outside the city. Recessions and Asian competition did the rest. By 1990, the district was a cemetery of 1,300 factories that once made everything from textiles to foodstuffs.

Now Poblenou illustrates the reurbanization of industry. The 115-block district is being transformed into 22@Barcelona, a global hub for "knowledge industries" such as digital media, clean energy, design, medical devices, and information technology.

Since construction of office and lab space began in 2004, 1,440 companies employing 40,000 workers have moved in. Google (GOOG), Yahoo! (YHOO), Orange, Telefónica (TEF), Lego, and Alstom all have research and design centers. Tenants of the media cluster include Spanish National Radio and Mediopro, the film studio behind the Woody Allen movie Vicky Cristina Barcelona, for which Spanish actress Penélope Cruz won an Oscar. Several universities also are relocating their campuses to the district, bringing 30,000 students. Within two decades, 22@Barcelona is expected to employ 130,000, have 4,000 new housing units, and have cost around $15 billion.

"Cluster-of-Clusters" Science Park

Spain already has an estimated 70 science parks. "But these are not enough to transform an economy," argues 22@Barcelona Chief Executive Josep Miquel Piqué. "Knowledge infrastructure is not just fiber and telecom. You also need things like good food, wine, and aesthetics. So cities have become the new neuro-centers of the knowledge economy."

The aim is to create what Piqué describes as a "cluster of clusters," where professionals in emerging tech and service sectors can co-mingle and serendipitously dream up hybrid industries. "We want to be a platform for mini-science parks," Piqué says.

Developers also want to integrate these clusters thoroughly into the urban environment: Companies are urged to use Poblenou as a "living lab" where they can test-market products before attempting to sell them broadly. They also are being encouraged to recruit local artists for design help and to get involved with primary schools to inspire young talent early.

Spain's economy could use the boost. After years of heady growth, the nation was hit especially hard by the real estate crash and global financial crisis, pushing unemployment above 17% in May.

Companies already have begun using the city as a living laboratory. One street is lit with lamps powered by light-emitting diodes, supplied by a consortium led by Spanish electric utility Endessa and engineering design firm Santa & Cole. Police plan to try out new low-energy motorcycles made by Barcelona's SunRed, which recently unveiled models of a solar-powered motorcycle shaped like a large snail.

Artist Recruitment

Local IT companies, meanwhile, can use the urban setting to launch new services for wireless telecom, health care, and security. "Our goal is to create new Spanish companies that think globally from the outset," says Piqué. "This is a good place for companies to learn in Barcelona before they sell to the world."

Barcelona's large community of artists is another asset. The district is setting up programs in digital arts, while companies developing everything from satellite software to workspaces using novel materials are hiring artists to create innovative designs.

To develop a long-term stream of local talent, the government is encouraging companies to set up programs in neighborhood schools. Lego, for example, is demonstrating robots to 8-year-olds. "We learned from Silicon Valley that only 4% of California secondary students choose to be engineers," Piqué explains. "It is good to attract the best talent from India and China, but we need to also attract talent from our own cities and regions."

And what about Poblenou's industrial legacy? Dozens of 19th century factory buildings complete with their towering brick chimneys have been preserved to echo the Old Economy past.


walla said...

The concept of clustering has certainly evolved from Marshall's study of italian districts in the late 1800s to Porter's diamond model in his work of the 1970s, The Competitive Advantage of Nations.

Indeed, now that our services sector will be the in-thing, one can envision what will be needed to create that enviroware to add to the hardware (infrastructure R&D), software (human capital) and orgware (institutions and social capital) needed to realize the full potential of clustering. All necessary because without one, you will only get another concrete and glass sprawl, not an electrifying metropolis populated by energized people celebrating their cerebration of great discoveries and super entrepreneurial achievements.

Yet, reading the Barcelona writeup, we can be excused for thinking we are not there yet. For instance, we have Bangsar and now Sri Hartamas in the Klang Valley but the expats keep to themselves and there are no experimental outfits. You can find dancing classes, spas and teh tarik spots, though. If we stretch a bit and imagine Bayan Lepas, there are two shopping malls and one snake temple. And if we imagine the Lot 10 junction in downturn KL, Sungei Wang has already been bought over by our southern cousins. So if we go to Cyberjaya or one of those technology parks near Serdang which is strangely enough under Subang Jaya jurisdiction, we will have to telepathize Mr Spock to beam us up because there's no life down there. And that's absolutely necessary because if he doesn't, we won't be able to find our way out of that place ever again. It doesn't have intelligible signs.

Duly drowning in sorrow, we try to go back to our basics. That starts by us asking ourselves if we have clusters in the first place.

An emphatic yes was heard, came the resounding reply. Last it was checked, Bayan Lepas still exists. But it's all blocks of factories and not large ones too, at that, isn't it? Where are the watering holes, some may ask? How many spin-outs (technical term here) does USM do there a year? Are there malaysian jay-walker's, it was added? That's Mr J Walker, the first dotcom entrepreneur who tried to get the courts to legalize the patenting of services business models, later selling out his interests to some sheikh. He has bushy eyebrows.

Anyway, and unless the statue of francis light can move by itself, the answer is an equally emphatic no.

walla said...

But what about our automotive cluster, someone braved? The japanese were meticulous in their study. First, they took Porter's four-point diamond model comprising demand, factor, firmware and supporting industries. Then they realized all four were needed to work simultaneously and synchronously. Since that wasn't possible in the cluster they found, they flattened the diamond to create a flowchart instead and used it to prioritize which should be developed first, and so on. Going by that analysis, they concluded we didn't have enough demand, skilled labour and supporting industries. Another group from Argentina did a separate study for the Klang Valley clusters and concluded that local government coordination had been weak, inter-firm synergies were not tapped, sub-speciation was not well-developed and labour had been diverted away from the clusters to other geographically dispersed enterprises.

That's just for basic clustering. So, Barcelona's a long way to go.

Yet, if one may be allowed to dispel negativism for once, it is possible to paint a festivalish vision of a new tomorrow for our clusters but it will require extremely high and wide buy-in, made all the more persuasive because we are fast running out of good ideas on how to transform and re-prime our economy and manpower. You will need something to pull everyone up all in one go, rather than depend on the old way of making incremental pushes from base.

The buy-in has to be pervasive and comprehensive for the reason everyone must cooperate proactively to make the new cluster model a complete success. Which means old beliefs and assumptions are out the window, and old rules are passe.

The blogger will probably be able to regale you with his ideas.

At this juncture, something remains a puzzle. Why can't the Kampar plant be used to make the new european-type highly fuel-saving hybrid diesel vehicles that's even better than the Prius? Because we don't promote that type of diesel? Why not?

We can hub a cluster for Malaysia to be at the seasian forefront in fuel-efficient hybrids using the best technologies made bespoke for Asian market combined with dm's new cluster model.


de minimis said...

Scarily impressive excursus on the putative history of clustering leading to Michael Porter and, then, bringing it home to our own hesitant and tentative clustering attempts. One thing is apparent, much more thinking, planning and internalising is needed before Malaysia can get to the next level. Many thanks for the input, bro walla.