The Smartest Places on Earth
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IBM’s commitment to the RTP had an impact far beyond the success of its computer system. It opened the way to the brainsharing future, a new way for corporate, government, and academic research entities—which had been isolated and siloed—to collaborate, and it legitimized the research-park concept in the United States.
A Research Cluster Is Not the Same as a Brainsharing Ecosystem
Today, the Research Triangle Park no longer has a monopoly on innovation in the Raleigh-Durham area. And what attracted the brightest minds to the RTP in the 1950s and 1960s—the suburban setting, trees and landscaped greens, isolation—is not what appeals to today’s young researchers. As we’ve seen, they prefer a lively, urban setting, with open work spaces, coffee shops, and cafés, where the environment stimulates informal communication and facilitates open and collaborative innovation.
What’s intriguing about the Raleigh-Durham area is that brainsharing environments have sprung up near the Research Triangle Park, including the Centennial Campus in Raleigh, as well as locations and facilities in Durham. In 2010, the old Lucky Strike factory, just a few miles from the RTP, was reopened as part of the 1-million-square-foot American Tobacco Campus, which that company calls “one of the most ambitious, largest and farthest-reaching historic preservation and renovation projects in the history” of North Carolina.15 “That’s where the action is now,” said Richard Brodhead, president of Duke University.16
However, the RTP’s management is well aware of the cultural shift toward a different approach to innovation and is working to enhance the park’s environment so that it will connect with and benefit from the new beehives of activity that surround it. Many of the RTP enterprises are investing in materials research. For example, we met with Chuck Swoboda, the wiry and enthusiastic CEO of Cree, a maker of LED materials for semiconductors. Swoboda, who has been with the company since it went public in 1993, works out of the headquarters offices sited next door to the company’s manufacturing and R&D facility. Gaining new knowledge is king at Cree, Swoboda says, which is why the company is located near North Carolina State, where researchers focus on advances in the materials essential to the fabrication of LEDs.17
The American Tobacco Campus, the year before its $200 million renovation in 2004.
Credit: Ben Casey, 2003
A revitalized American Tobacco campus.
Credit: American Tobacco
Cree has come a long way since its early days, when it introduced the first blue laser to the world. At the time, most researchers thought the idea of using LEDs for lighting was crazy. Then came one of those serendipitous, sideways breakthroughs in product development. Ursula Piëch, wife of then Volkswagen CEO Ferdinand Piëch, caught a glimpse of a blue LED and found the light appealing. Soon enough, they were gracing the dashboards of the new Volkswagen Beetle.
The North Carolina area, then, has plenty of corporate muscle, but it would not be a brainbelt without the participation of its three original university members, as well as other nearby educational institutions that have joined the action.
NC State University, for example, is home to the fourth-largest engineering school in the country18 and runs the top program in one of the world’s most ancient and also most futuristic materials: textiles, a discipline that most other universities abandoned when textile manufacturers moved out of the area. NC State’s colleges of engineering and management also offer a joint program in entrepreneurship through its Centennial Campus, which is a cross between a college campus, an industrial park, a research facility, and a company incubator—an updated, more intense version of the Research Triangle Park environment.
Although Stanford and MIT led the way in bringing universities, start-ups, and research-oriented companies together in collaborative and often physically co-located relationships, the Centennial Campus is the only such initiative led by a state university. “This is a true live, learn, and play environment,” Randy Woodson, NC State’s chancellor, said of the Centennial Campus, which has as many as sixty-four companies on its grounds. “You can go to class in the morning, study in a world-class library, do an internship in the afternoon, and go to work after graduation with a company without ever having to leave the campus.”19
Not only have many companies moved to the Centennial Campus, but sometimes they are born there. Materials is an important focus. Spoonflower.com, for example, was founded in a campus residence hall nicknamed the “Garage” in honor of the favored start-up venue for American entrepreneurs. What we found particularly relevant about Spoonflower.com is that it, like so many brainbelt companies, builds on one of the legacies of the area, in this case, textiles. The company produces wallpaper, fabric, and gift wrap that its customers design.
But there is much more action in materials that are not so familiar. The Centennial Campus is home to the Nonwovens Institute, for example, which focuses on the development of startling and advanced new materials. These typically have unique properties: they are antimicrobial; filter out ultraviolet light; are resistant to chemicals, including those used in weapons; and resist heat. Everything from diapers to protective clothing will be affected by this research, and large textile companies such as Hanes, as well as the military, are keenly interested. The work of the institute is so renowned that Stuttgart-based Mann+Hummel moved its R&D center for filtration technologies to the Centennial Campus in 2013.
The Centennial Campus provides companies with all the benefits of a brainbelt environment, from research facilities to restaurants, but it has some unique twists. One-fourth of the research funding at the Centennial Campus comes from corporations, a much higher contribution than the average 5 percent that is typical for major research universities in the United States. In return, the investors gain access to groundbreaking research as well as the rights to commercialize the innovations their programs generate. To facilitate this process, NC State developed a standard contract so that companies do not have to negotiate new agreements for each deal.20 The contract specifies that the corporate entity will retain full rights for the commercialization of an innovation but will pay the university a fee when the value of the intellectual property passes a critical threshold of $20 million. This arrangement avoids red tape, saves time, ensures consistency across relationships, and enables the process of transforming research findings into marketable technologies and products.
Today, the area is developing into a full-fledged brainbelt—with the Centennial Campus, cutting-edge manufacturing facilities, associations with educational institutions throughout the state, and the transformation of disused facilities like the Lucky Strike factory—and is, as a result, provoking changes in the original Research Triangle Park itself. Bob Geolas, president of the RTP, sees its future in the eighty start-ups and early stage companies that have been nurtured in the park’s five incubators, more than 40 percent of which employ fewer than ten people. Some of these companies have a new and distinctive character: small-scale, low-capital manufacturing. Dick Daugherty, former head of manufacturing at IBM, describes it as “local craft manufacturing” conducted by young companies with only a few employees that make a limited number of high-quality components on demand.
In sum, the Research Triangle Park is looking to move beyond the repurposing of fragments of the old approach to manufacturing to create a new model that brings together academia, global business, nanobusiness, government, and social engineering in an environment that still features rolling hills but is better known for its brainsharing. “We need to be highly collaborative, authentic, unique, and inspiring,” said Geolas, “if we want to keep it fresh and attractive to the smartest young creative minds.”21 And, as it does, the area can continue to build on the knowledge it has amassed over the decades—much of it related to materials—and push it into the applications of the future.
Bob Geolas, president and CEO of the Research Triangle Park.
Credit: Research Triangle Park
Lund and Malmö: Supporting Materials Research with a World-Class To
ol
Every rustbelt needs a connector to coax or cajole it into transformation. In Akron, the connector was Luis Proenza; in Lund and Malmö, it was Nils Hörjel. In the early 1980s, Sweden was undergoing an economic downturn. As governor of the southern region of the country at that time, Hörjel was convinced that the area could be headed for rustbelt status, as shipbuilding and other heavy industries went into decline.
Whereas government ministers in Stockholm tried to manage the national economic crisis with traditional, Keynesian, policy-driven measures, Hörjel developed a vision of the future for his cities that involved a different approach. He imagined a new economic structure with two pillars: first, the computer and electronics industry, and second, the disciplines of chemistry and biotechnology, both of which are still key research fields of Lund University.
A first step, Hörjel thought, would be to establish a science park where for-profit companies could collaborate with the researchers of the not-for-profit university. As Hörjel imagined it, the park would encourage and support research and business creation and eventually produce the area’s next big, knowledge-based industry. Hörjel was well positioned to bring businesspeople and academics together. Former colleagues describe him as an atypical politician,22 a cross between a civil servant and an entrepreneur, a man who sat on the board of several Swedish firms, including Ericsson, the electronics company. As a result, he had built an extensive network of people in both the public and private sectors. He was a successful connector.
Hörjel identified a good location for the science park—near the university and convenient to private companies—but it was zoned for residential housing. He worked with Lund’s local authorities to change the zoning designation and then gained the financial support of Ingvar Kamprad, the founder of IKEA, to buy the parcel. Next, Hörjel brought together the leaders of several local construction and development companies, many of them competitors with one another, and worked with them to form a consortium to develop the park.
A tanker under construction at Kockums Shipyard in Malmö, Sweden, 1961.
Credit: Getty Images/Winfield Parks
Hörjel conferred with the local business leaders about what the commercial focus of the park’s activity should be. Chips? Medical devices? A member of the prominent Wallenberg family sat on Ericsson’s board of directors, and Hörjel knew him well. When the board gathered for a dinner at the family’s castle, Wallenberg made a persuasive argument to his fellow board members that Lund’s industrial focus should be mobile telephony and that Ericsson, in desperate need of young, skillful engineers, should locate its research center at the new science park that Hörjel was developing. That way, Ericsson might be able to enter the market early and gain a leadership position.
Within two years, the science park, now named Ideon, achieved liftoff. Like the Research Triangle Park in North Carolina, it was born through a collaborative effort of developers, entrepreneurs, local politicians, established companies, and a nearby university. Lund University may be local, but it is the largest in Scandinavia and its 48,000 students make up nearly half of the city’s population. It is one of the top one hundred research universities in the world, with a history of innovations that include ultrasound, the artificial kidney, Bluetooth, and the nicotine medication Nicorette.
Mats Lindoff, then Ericsson’s chief technology officer, was one of the first to join the company’s team at Ideon. Lindoff’s boss, Niels Rubeck, showed him a prototype phone and told him their assignment was to take the clunky prototype that was “as big as a brick” and make it “as small as a matchbox.” As the project gathered momentum, Ericsson hired as many as twenty engineers a week, initially from Sweden and then from all over the world. At the peak of its activity, Ericsson employed 4,000 engineers. Ericsson worked closely with the scientists at Lund University and benefited in particular from the contributions of Sven Olof Orvik, a leading academician in radio technology. He, with his top students, solved several of the thorniest technical challenges as part of their research. After graduating, they made a swift transition to the Ericsson labs.
Ericsson’s activity on the mobile phone created an extensive ecosystem of partners and suppliers in Lund and the surrounding area. For every research engineer employed at Ericsson, there were ten more working at nearby suppliers and other mobile technology companies. The demand for phones exploded, and Ericsson sought to ramp up production to 100 million phones a year. Even with a highly automated production line, however, the company could not meet this production target. They investigated sourcing capacity from China and found they could produce phones there at a lower price, with higher quality and more reliability. So, in 1999, Ericsson began production in China. Although the move enabled the company to rapidly increase production, it had a serious downside: it separated engineering from manufacturing. With the disciplines operating in isolated silos, Ericsson could not benefit from multidisciplinary collaboration. So, as smartphones began to appear on the horizon, the Ericsson engineers rejected the idea of getting involved in that market, because they saw too many technical barriers. “We lost our dominance in mobile because we took too much of an engineering approach,” Lindoff said.23
The rest is history. In 2007, Apple introduced the iPhone and, by 2009, Ericsson’s mobile division became a part of Sony. Still, just as we have seen in other brainbelts, the research expertise in Lund was so great that Sony retained the Ericsson research center at Ideon and 2,500 engineers continued to work there.
The members of the Lund brainbelt began to consider new initiatives. Hörjel had originally proposed two pillars to the new economic structure: electronics and computer science, and chemistry and biotechnology. The global outlook for biotechnology was bright, so they refocused their efforts on life sciences.
In 2014, AstraZeneca consolidated its research and moved its R&D scientists from Lund to Göteborg, vacating its facility, Medicon Village, which was located right next door to Ideon. Lund joined with other players from Sweden and Denmark in a new life-sciences initiative known as Medicon Valley. It is home to several leading pharmaceutical companies, including Novo Nordisk, the Danish company that is the global leader in diabetes research and is the largest pharmaceutical firm in Scandinavia; Bioinvent; Active Biotech, a developer of new drugs in immunology; Camurus; and major medical device makers such as Gambro. There are also hundreds of other small biotech start-ups that have high hopes of making it into the big league. More than 40,000 people work in the valley—nine out of ten life-science workers in Denmark and one out of five in Sweden. They seek to succeed in the face of the onerous risk-reward ratio in life sciences. Only one of fifteen drugs that enter clinical trials succeeds, and very few of those become blockbusters in the market.
Ideon is home to, and an incubator for, companies in a range of technology industries, in clean technology, software, and new materials, as well as life sciences and telecommunications. Richard Mosell, a patent lawyer and the son of an inventor, is head of the Incubator at Ideon. “Innovation mostly takes place at the boundaries,” he said. “At Ideon, we create an environment where engineers talk to creative people and entrepreneurs.” Sharing brainpower, says Mosell, is nothing like the rigid hierarchical process of the rustbelt industries of shipbuilding or tire making. “It’s really much more like making a movie.”24
This approach has led to the creation of a remarkable project of the kind you might see in a movie, the $300 million Max IV particle accelerator. It is a circular, Coliseum-sized structure that looks every bit the biggest research project ever undertaken in Sweden, which it is. The Max IV promises to shift the center of gravity in the world of particle research. Its users will include not only university professors but also companies that do research on new materials and want to study nano-size molecules. According to Katarina Noren, a chemist who manages relations between the accelerator and its corporate users, the Max IV “beats all but a handful” of the latest accelerators in the United States, Europe, and Japan.25
You might imagine that knowledge gained in such a facility would be jealously guarded by the companies that sponsor it, just like in the old days of secretive, behind-closed-doors R&D. With Max IV, however, companies have two choices. They can use the facility for free if they agree to share the knowledge that results from their experiments. But certain kinds of research would be flat-out impossible without an accelerator of this caliber, and companies will likely be willing to pay substantial fees for that kind of initiative, which will help defray the costs of managing and constantly improving the facility—which will, in turn, benefit all users.