TECHNIUMS - A FAILED AND EXPENSIVE EXPERIMENT?

The Triple Helix model, where government, academia and industry work together to create a vibrant innovation economy, is one of the new holy grails for policymakers around the World.

And over the last three years, a team of researchers at the University of Wales has been examining this process within the Welsh economy and recently completed a series of cases studies on this process.

One of the more fascinating examples we examined was that of the Technium programme. This was established at the beginning of the last decade to provide office space and support for high technology firms to commercialise university research and turn this into thousands of highly paid jobs within technology-based firms in Wales.

Unfortunately, such ambitious plans did not materialise and whilst ten Techniums were built across Wales at a massive cost to the public purse, they ended up largely unoccupied and expensive to maintain.

Indeed, an evaluation of the Technium programmes carried out by the consultancy firm DTZ revealed that each job generated by the project cost an average of £190,000 of public money and occupancy rates at the Pembrokeshire Technium were as low as four per cent.

Given this, and after much consideration, the Welsh Government finally pulled the plug on the initiative in 2010 and closed six down.

So what went wrong?

Whilst there have been various critiques of the Technium concept from academics and businesspeople, perhaps the most detailed comes from the evaluation by DTZ which noted a number of key flaws to the whole concept.

The first was the lack of any clear rationale for the roll-out of the programme beyond the first incubator in Swansea. One has to wonder why the WDA had then gone ahead with building Techniums across Wales before a ‘working prototype’ had been fully tested?

Secondly, there were no explicit objectives for the Technium programme and it would seem that the only rationale was to build as many of these as possible before the European funding ran out. Certainly, there seemed to be little consideration of whether there was demand, either from the local business community or from the universities, for this type of building. This particular critique, from the Western Mail in 2005, seems to hit the nail firmly on the head as to the serious problems in the programme event then.

Thirdly, it would seem that the monitoring and evaluation of the programme by Technium managers was practically non-existent which, given that many of those involved had very little experience of managing such projects, is not surprising.

But it would also seem that this failure on the ground was not noticed by those higher up within the system. As the former Economic Development Minister Andrew Davies pointed out, civil servants at the time did not keep ministers informed on the performance of the programme or on major decisions being taken which led to serious issues over its management.

Finally, occupancy rates were low and the provision of business support and its take up was minimal which would be expected if, as critics have pointed out, Techniums were actually not in any way innovative in their concept or, more importantly, in their execution.

Whilst space within each property was targeted towards innovative businesses, there was no real support provided on site to any of the firms located there, which is a critical element of what we see within successful incubator programmes around the World where financial and management advice is as important, if not more important, than the physical space in which the companies are based.

In fact, the recent success of cheap entrepreneurial spaces such as Indycube across Wales shows that spending a fortune on buildings is not the way to develop more entrepreneurial businesses, especially when it was clear that there was actually little connection between the Techniums and the wider innovation system in Wales.

So was it a waste of money? Cardiff University’s Professor Kevin Morgan thinks so. As one of the more strident critics of the whole Technium programme, he believes that the question remains as to why there has been no public inquest into the ‘failure of an experiment that cost around £111 million’.

And he has a good point, given some of the exaggerated claims made by some over the alleged success of Techniums that are now seen to be, at best, misleading.

I suppose if we had seen a Google or a Nokia emerging from one of the Techniums during the last ten years, the failure of the rest of the programme would have been forgotten.

But that was highly unlikely to happen when there was preference in spending nearly a hundred million pounds of taxpayers’ money on shiny new buildings rather than focusing on attracting the best scientists to Wales whilst, at the same time, encouraging a greater entrepreneurial spirit amongst students and graduates as they do in the great universities of Stanford, Cambridge and MIT.

Ten years ago, in a speech at a science and technology conference at the Celtic Manor, I questioned whether Wales “had enough science to commercialise within its public and private sectors that will fill all those Techniums with high technology businesses that will take make Wales a smarter wealthier nation?”

In fact, I said then that it was pointless concentrating public funding on commercialisation activities whilst the R and D base in academic institutions and private sector organisations was declining or at best, standing still. In the end, you cannot commercialise technology if there is little relevant technology to commercialise.

That is what those who put the Technium concept together at the time forgot but what is thankfully now slowly being rectified through programmes such as Ser Cymru that aims to attract the best brains in the World to Wales.

The shame is that it took a decade and nearly a hundred million pounds to learn that lesson but it is one that I hope the Welsh Government will take to heart from the failed experiment of the Techniums as it looks to implement its new innovation strategy over the next few years.

Unbelievable Chutzpah: Game Over!

Professor Ed Kleinbard was recently quoted in the New York Times, referring the Apple's tax strategies:

“There is a technical term economists like to use for behavior like this,” said Kleinbard. “Unbelievable chutzpah.”

Given a set of rules, one tries to game the system, namely one is apparently following the rules but goes quite close to the line (of rule-breaking) or just over, and one's defense is twofold: I followed the rules, and their interpretation is subject to question. And, our job is to maximize (returns, rewards, rank,...) and so we go for the  gold.  It would seem there was a time when people did not game the system so much, maybe it was white shoe law firms on Wall Street, maybe it was professors, maybe it was physicians, maybe it was students.  There was a notion of professional integrity, that one not followed the rules, in practice and in their intent.

Now, it would seem that most who game the system would not want their neurosurgeon to do so. Nor their babysitter. Nor their spouse. Nor their secretary, if they have one. Perhaps it is a Hobbesian/Milton-Friedman world, but it would seem that most of those players do not want to be subject to the consequences of others' gaming the system. They want reliable professional ethical high-integrity behavior. Perhaps I am wrong, and they find the response to others' gaming the system through litigation and counter-strategies.

So when a student quotes back to the professor what the professor said, as a defense of what the student did, as often happens, rarely do teachers find themselves convinced by their argument. Let us say that their quote-back is accurate. The best response is, "I was wrong."  Here is a Feynman story:

This second error [in his Lectures] was pointed out to Feynman by a number of readers, including Beulah Elizabeth Cox, a student at The College of William and Mary, who had relied on Feynman’s erroneous passage in an exam.  To Ms. Cox, Feynman wrote in 1975,  “Your instructor was right not to give you any points, for your answer was wrong, as he demonstrated using Gauss’s law.  You should, in science, believe logic and arguments, carefully drawn, and not authorities.  You also read the book correctly and understood it.  I made a mistake, so the book is wrong.  I probably was thinking of a grounded conducting sphere, or else of the fact that moving the charges around in different places inside does not affect things on the outside.  I am not sure how I did it, but I goofed.  And you goofed, too, for believing me.”

Second best, "You misunderstood what I said." Now the student might go to a university committee and win on the technicality (perfectly OK by me). But that won't make them better thinkers or scholars. It won't get them the kindness of strangers in the future, who being aware of the student's strategy leave no room for any recourse on the student's part. What happens is a legalistic and defensive posture.

If someone has been excessively formal and legalistic, wise souls are very careful in dealing with them. Usually, they are in fact warned ahead of time, "Don't even talk to him!" Hence, at best all communication is in writing, and very carefully composed to be Teflon; or if need be in person with another person present as a witness. You will not answer their indicting questions, but ask similar ones of them. Hence, a dean might respond to, "Why did I not receive tenure?", with "Do you believe that three articles in those journals is sufficient to demonstrate your research contribution?" or more aggressively and less kindly, "How did your book show critical thinking and scholarly context?"

By the way, Sherry Turkle has pointed out, that we are often better off responding in person, even by telephone, to those who are formal and legalistics. That breaks down the abstraction and formality. Email is especially dangerous since we SEND and then have regrets. On the other hand, just as a salesman will make it impossible for you to close the door on him, there are well known devices (evangelists specialize in these) for insisting on continuing a conversation even if one is told there is no more. It is like the child's "Why?", succeeded by tower of why's.

I imagine that the gamer still wants scrupulous and professional behavior on the part of others. There is lots of discretion in these interactions, and what you give is more or less what you are likely to receive. If not now, in the future. Not always, not even often, but....