Chapter 13

Governance and Short-Term Product Development in Clusters — An Example: The FIRE Application¹

13.1. Introduction

The development of clusters in France, after selection and the establishment of governance, has followed different trajectories, as shown by a recent evaluation of these clusters by an auditing company [KPM 06] (the results of this evaluation are due for publication in 2011). However, a certain number of articles and discussions have led us to think that, in certain cases, the development of clusters has led to “drifting”. The appropriation of various projects by big businesses has led to a certain degree of abandonment of the primary function of clusters, which was the establishment of relationships and actions contributing to the comfort and development of small and medium industries and businesses present in clusters [DOU 06].

At the outset, the creation of clusters was supposed to lead to the development of new synergies through public—private partnerships brought about by the different players involved in the cluster: the state (or regional governments), research and education, and industry. These aspects have received attention in various publications, including the work of Michael Porter and the Dutch school (triple helix) (Figure 13.1) [LEY 98].

Figure 13.1. Triple helix [INT 07]

We should also remember that the development of clusters was intended to save time and create high-performance clusters as quickly as possible, entities which, in a normal system of development (without voluntarist state intervention), would only have reached such levels of performance in 10 or 15 years or even longer (see the examples of Sophia Antipolis in Nice, France, and Triangle Park in the United States).

Job creation, another aim of clusters, was meant to become one of the principal elements in the dashboard. In this chapter, we will use an example (the FIRE project, developed by the secure communicating solutions (SCS) cluster in Provence-Alpes-Côte d’Azur (PACA)) to highlight those points we consider to be most important in creating the conditions for shared development among actors in the cluster and among small and medium businesses and industries.

13.2. Considerations on the development of clusters

In the development of competitiveness clusters, public—private sector partnerships have developed around different research orientations, which follow the pattern set out below:

– in the majority of cases, development of generic technologies over a span of 5 years or more. In this case, most interest comes from large companies and from groups of laboratories (National Scientific Research Center (CNRS, Centre National de la Recherche Scientifique), universities, etc.). These actions are, in most cases, characterized by the purchase of heavy material. The problem in such cases is that the initial aim of the cluster, to establish a relatively rapid dynamic, is not attained;

– in the best of cases (which is, alas, rare), the aim is to develop industrially viable products in the short term, using synergy between the competences of the various actors involved in the cluster, with, if necessary, the development of rapid fundamental research to increase the industrial robustness of the product.

The latter case attracts our attention, as it illustrates how development and innovation within clusters should operate:

– The state finances research and education, facilitating the creation of knowledge and competences (first step). To stop here would be to carry out only half of the work.

– The second step consists of transforming these competences and knowledge into action, i.e. into commercial, exportable products. This step is crucial, and it should be the major concern of clusters, which, unfortunately, is far from being the case.

This definition of innovation, set out in different projects carried out on the initiative of the European Community (Interreg III) [ERI 06], highlights the importance of this approach. It must, clearly, be accompanied by fine analysis of the competences already present, an analysis which will lead to brainstorming, evaluations using strength, weaknesses, opportunities, threats (SWOT) analysis terms, etc. This prefigures the activities to be carried out by the competitive intelligence (CI) unit associated with the cluster; the CI unit must act not only in terms of CI but also in terms of technical CI (this term is preferred to that of economic intelligence in this case, as the latter term has no real meaning at international level). This last orientation is very different from traditional technological watch as it associates technical analysis with the introduction of this analysis into the development strategy. Note that the sole function of information supply, without organizing the creation of actionable knowledge, is not the aim of the CI unit [DOU 07a]. Actionable knowledge cannot be found; it must be created. This is why the stages of creation of actionable knowledge become fundamental in economic development processes, and the reason we have highlighted the importance of creating conditions for the analysis of information obtained by a CI unit (technical or otherwise) in light of competences already present in the cluster. This modus operandi is fundamental and renders the development of a center for the simple diffusion of information to companies in the cluster obsolete. However, this is unfortunately what happens in certain poles. The practice is born of the fact that partners in the cluster may not wish to exchange or discuss information of strategic importance to their business, the result of which has been the transformation of what should have been CI units into simple documentation centers (centers already present within the major companies of the cluster).

13.3. Grievances of small businesses and industries

Clusters were initially designed to generate contacts between varied actors: large companies (including multinationals) with small and medium businesses and industries, in addition to public and political actors. In this context, grievances have emerged, particularly from small businesses and industries:

– Too much talking and sharing too much information can lead to ideas being “captured” by entities with greater power and speed in development than that found in the small company responsible for the original idea. For this reason, information exchanges remain limited and do not go “to the bottom of things”, rendering the innovative dynamic which should emerge in the cluster sterile, at least in part. In this context, we cite the example (without giving the name) of a cluster that established an information exchange platform but where, by prior accord, it is not possible to know what has been consulted and by whom in this platform, even for members of the cluster! In this simple example, we see all the difficulty of establishing a propitious climate for intercompany innovation in such conditions.

– Lack of a judicial framework for project development. Who participates, and how will profits, if profits are generated, be distributed between project actors, etc.? As an illustration, we might cite the example of an aviation technology cluster in the Lorraine region of France, where simplified joint-stock companies (sociétés par action simplifiées) are created for particular projects [BOU 06]. These are simple to implement and present the advantage of fixing “rules” for actors, rendering exchanges more fluid and allowing more rapid attainment of objectives. Other systems have been developed, for example, in Australia with the creation of initially fictitious entities (e.g. the distribution of one hundred “parts” among actors), with pro rata distribution of parts in relation to work carried out or to carry out (this distribution is reviewed each year). Once the product is finalized, this allows immediate passage, as far as judicial protection is concerned, to the creation of a real company for exploitation of the product. We can also cite the approach often used by businesses in the domain of initial discussions before the exchange of licenses or the creation of partnerships: non-disclosure agreements.

– The projects developed are too long term, creating, in the best of cases, generic technologies which generally will not be useable by small businesses and industries as it is far from certain that, in 5 years, the entities concerned will still be involved in the cluster, or even still be in activity.

– Big businesses have a large number of people available to participate in governance of the cluster, but these individuals remain attached to their company and are either person which are representative of the company, or which are retired from the company on “non-operational career end pathways” or are present to gain benefits for their employer from possible advances, with no guarantee of sharing the results.

– The research or R&D projects developed or presented by the majority of clusters are too complex and, in case of success, produce results too late.

13.4. The context of the SCS cluster, PACA, France

Before any detailed description of the project and before discussing the factors which allowed its development, it is interesting to know that the FIRE project is the only commercial product developed in a relatively short time span within the SCS cluster (a cluster with international ambitions) involving small industries and businesses as well as medium-sized entities.

We will now provide a brief reminder of the structure of the SCS cluster. The SCS cluster was created in the PACA region by actors including businesses, associations, and laboratories, which shared knowledge in microelectronics, software, and telecommunications. The set of key competences present in the domain was intended to lead, after market analysis, to the creation of new and innovative products. At the outset, the cluster was made up of 44 companies, 10 laboratories, and 7 associations for the promotion of technologies, often financed by regional or national government institutions.

Figure 13.2 allows us to visualize the cluster, with its two main geographical sites: the Rousset region (near Marseille), with a pronounced industrial character, and the region of Sophia Antipolis, near Nice, which has a clearer “research” character.

Figure 13.2. Structure of the SCS cluster

Modeling the cluster shows the desired effects of synergy: it allows market analysis (of what exists) then, using the set of competences present in the cluster, develops the innovation and creation of products likely to conquer international markets. We note the existence of a double mechanism: creation of competences with state assistance and then, from these competences, development and innovation of new industrial products.

Thus, the value chain of the SCS cluster may be represented as shown in Figure 13.3.

Figure 13.3. The SCS value chain [CHA 07]

13.5. Origins of the FIRE project

The FIRE project [GUS 09] was born of a simple idea to create an application allowing the use of multiple, relatively simple sensors at reduced cost due to mass production. The domain of this application needed to respond to a social or industrial demand in order to generate finance.

The analysis of existing products based on the knowledge of participants brought up the traditional domains of security, protection, information transfer, geographic localization, etc. The markets linked to these applications were already taken by products with which it would be hard to compete, and thus a new idea was needed. This idea emerged following unplanned brainstorming sessions and informal discussions between companies involved in sensor development. This highlights the necessity not of a priori valorization but of creating the right conditions for exchanges and meetings leading to the production of innovative ideas. In this way, various valorization cells developed by public organisms (research organizations or universities) have very little impact, as their practices are based on the valorization of existing attributes rather than the creation of exchange conditions promoting innovation. Following on from these discussions and after reviewing possible domains of protection and detection, an individual wondered if it would be possible to apply or create a system for protection against forest fires. In this case, note the influence of mental preconditioning: the PACA region is subject to serious forest fires in summer, producing environmental degradation and with disastrous effects on certain economic activities, particularly tourism. This preconditioning certainly played a part in the emergence of the idea.

13.5.1. From idea to creation

An idea to create a system to monitor forest fire using RFID captors, which emerged in the Smart Packaging Solution (SPS) Company, which then became, by consensus, the project manager, competences were sought within the cluster. This then led to the constitution of a consortium for carrying out the project, including SPSs (packaging, sensors, and low-cost industrial production), Cryptiris (development of secure RF communication systems), the Paul Cézanne University/CNRS (IM2NP laboratory) (design and optoelectronic characterization of IR sensors), the Université de Provence/CNRS (IUSTI laboratory) (fire modeling, optimization of sensor networks on-site), CEREN (experimental validation on different scales and testing (fire tunnel and smoldering)), SDIS 13 (tests, feedback on real fires), and Protection Civile 06 (institutional and operational expertise).

13.5.2. Industrial aims of the project

The industrial aim of the project was to create a low-cost system allowing large scale and long distance:

– transmission of alerts in prevention phase (crossing temperature, hygrometric thresholds and wind speed) and in crisis phase (fire detection);

– rapid and precise detection and localization of the source of a fire;

– prediction of the arrival of a fire in a sensitive area and anticipation of its evolution;

– continuous information provision on the intensity of the fire and its spatio-temporal evolution.

A concomitant aim was the development of a volatile organic compound (VOC) sensor in order to detect local increases in VOCs, intoxication, generalized wildfire, and signaling, using an alarm, the threshold for the lower limit of inflammability.

13.6. From design to creation and commercialization

The FIRE project is now operational. It uses general packet radio service (GPRS) transmission over a secure mobile infrastructure, geolocation using current population survey (CPS), digital terrain models, vegetation maps, calculation of average winds, and information retrieval and processing. It is presented commercially in the form of modules: a FIRE cell (20 ha) or a basic kit (<20 ha), where the density of sensors varies depending on the local fire risk.

13.6.1. General event sequence from an idea to a commercial product

In this project, it is remarkable to look back at the sources of creation of clusters. Initially, it associated small industries and companies and was born of the convergence of a set of competences present in the cluster. The complementary research projects carried out to finalize the product were of short duration, simply focusing competences already present in a university laboratory on a precise aim. The operational FIRE product is a good example of the creation of a robust and internationally exportable product with high added value. The time taken for its creation, relatively short, constitutes an ideal toward which clusters should aim. The development of base technologies linked to long-term research (of the order of 5 years) should also be part of the aims of a competence cluster, but this should be counter-balanced by the valorization of competences and knowledge toward accepted market products. This is the very definition of innovation and of the triple helix: the government finances research and training, which develops knowledge and competences, from which innovations may develop leading to the creation of internationally marketable products. In this way, a virtuous spiral is created and synergies and development created by clusters reach their full potential.

The application has been presented internationally through trade fairs or “B-to-B” contacts: Italy, Chile, Morocco, Tunisia, Greece, and the United States have all either been approached by, or have spontaneously approached, the cluster following international communications. The interest expressed by each country is clear and significant.

The project to establish a pilot in the PACA region, financed by the European fund of regional development (FEDER) and the region, should be supported by the SCS cluster and would be a determining and trigger element for the commercialization phase. The cluster would also be responsible, in the case of exemplary projects, for maintaining a technological “shop window”, participating in the international outreach desired by the state.

To return to one of the aspects of the KPMG study of competitiveness clusters, the FIRE project seems exemplary in terms of its responses to the different criteria set out by KPMG. Figure 13.4, an extract from this study, presents these criteria.

Figure 13.4. Extract from the six main statements — KPMG analysis (http://www.kpmg.com/global/en/pages/default.aspx)

13.7. Conclusion

It is therefore possible, if a cluster is well structured from the outset and if the actors involved meet and exchange, to create new products from existing competences requiring adjustment with limited research input. A fundamental aspect is highlighted in the KPMG study: “this (the success of the cluster) is incontestably centered on economic results: turnover, margins, and the development of new markets. Common sense!”. These are the applications that create solid links between authors and indubitably constitute a base from which other shared projects may develop. The initial idea was not “captured” by a third party; it was, however, shared with each actor bringing their own competences to the creation, but, essentially, a project manager was chosen by common accord, meaning that possible returns on investment could be shared equitably between different actors. Furthermore, a company was created to commercialize the “FIRE product”, leading to the creation of jobs.

Note, too, that relatively simple methodologies exist which allow us, from a set of competences, to decline these competences in already created applications, allowing us to create a basis for reflection that promotes innovation. The use of industrial property and Automatic Patent Analysis within this framework is an example of this; various works have been published in this context to describe both applications and subjacent ideas [DOU 04, DOU 07b].

It is thus clear that the operation of clusters should not focus strictly on preexisting methodologies at organizational level and the “dominant thought”. These organizations must be open, leaving as much place as possible for innovation and exchange, and must also facilitate fluidity in contacts and support the ethics of exchanges and information sharing [CIW 09].

13.8. Bibliography

[BOU 06] BOURGOGNE P., The StratinC project, European Community (Intelligence and Innovative Cluster), 2006, www.competitivite.gouv.fr/spip.php?article25.

[CHA 07] CHARAI H., Presentation given in the course of an AMIE meeting, Casablanca, Morocco, 2007.

[CIW 09] CIWORLDWIDE, Various pieces of information published on the subject, June 2009, www.ciworldwide.org.

[DOU 04] DOU H., “Benchmarking R&D and companies through patent analysis using free databases and special software: a tool to improve innovative thinking”, World Patent Information, vol. 26, no. 4, pp. 297–309, 2004.

[DOU 06] DOU H., “Competitive intelligence accelerator of cooperation”, Intelligencia Economica defensa y seguridad — Que desafios por el siglo XXI, Military College, Santiago du Chili, Chile, 21–22 November 2006, www.ciworldwide.org.

[DOU 07a] DOU H., “La Inteligencia Competitiva, hoy — competitive intelligence today”, Conference Internationale, Competitive Intelligence, Carlos III University, Madrid, Spain, 28–29 November 2007, www.ciworldwide.org.

[DOU 07b] DOU H., MANULLANG S.D., DOU J.M., Jr, Competitive Intelligence and Technology Watch for Industry Development, Department of Industry, Indonesia, 2007.

[ERI 06] ERIKSON P., Regional Center of formation and training, Guiseppe Zanardelli, Azienda speciale de la provincia de Brescia, Interreg III C, Aalborg, Denmark, 13 February 2006.

[GUS 09] GUSTINI G., FIRE project, June 2009, [email protected], www.pole-scs.org/scs_project20146.fr.htm.

[INT 07] INTERREG III, Strategic intelligence and innovative clusters — a regional policy blueprint highlighting the use of strategic intelligence in cluster policy, Interreg III C (European Community), 2007.

[KPM 06] KPMG, Poles of Competitiveness in France: promising but defects of youth to be corrected, December 2006, www.kpmg.fr/FR/Publication/Documents/Communications/EtudeKPMGPolesCompetitivite07.pdf.

[LEY 98] LEYDESDORFF L., ETZKOWITZ H., “The triple helix as a model for innovation studies (Conference Report)”, Science & Public Policy, vol. 25, no. 3, pp. 195–203, 1998.

¹ Chapter written by Henri DOU.