MULTITEL: an Innovation Centre Contributing to Power Regional Growth

MULTITEL: an innovation centre contributing to power regional growth

SYNTHESIS

Multitel1 is an information technology centre of excellence located in the Province of Hainaut, Wallonia, Belgium. Since its creation in 1999, and thanks to a significant European Regional Development Fund (ERDF) contribution in this early phase of development, Multitel has become a key partner for firms in the region seeking to innovate. Indeed, the centre expects to generate revenue of €1.3m from industrial resources in 2007 (a five-fold increase since 2003), with firms employing less than a 100 people accounting for half of this revenues. In addition, the centre has sourced approximately €1.2m from European Union (EU) level contracts in 2007, notably through participating in 21 projects in the EU's 6th Research Framework Programme (FP6). The centre has pursued a deliberate strategy of complementing core applied research activities and technology development with companies with a portfolio of training services for companies (amounting to approximately 10% of sales of services to enterprises).

The industrial research and development projects conducted by Multitel are selected based on the need to maximise the chances of licensing innovative products and services on the market. The six registered patents achieved to date and, as well as the five spin-offs that have been created, are good examples. The spin-offs are growing at a rapid pace, with an aggregate turnover of €8,5m and 95 employees in 2007. Ensuring continued close cooperation with its spin-offs is part of the ethos of Multitel, summed up by the director as “better five successful spin-offs than 20 failures”.

Multitel grew out of a cluster of research projects funded by the ERDF under the 1994- 1999 Objective 1 programme and proposed by two departments of the “Faculté Polytechnique de Mons” (Faculty of Engineering). The centre was officially created in 1999 as a separate legal entity and, in 2000, was reinforced by the integration of expertise in the image processing field drawn from the Telecommunication and Teledetection Laboratory of the Catholic University of Louvain.

The innovation centre now brings together a multidisciplinary team of around 60 applied research staff (including engineers, scientists and technicians), and an administrative and project management structure. Multitel designs and integrates innovative information and communication technology solutions in cooperation with local businesses, and also collaborates with other centres and larger companies at European level. Multitel acts as a link between academic research in universities and its application in businesses, both local and multinational firms.

Multitel’s research activities are concentrated in four areas, each representing a department of the centre. Its expertise covers speech and signal processing (voice synthesis and recognition etc.), photonics (optical amplification, fibre lasers etc.), image processing (video surveillance etc.) and networking activities (voice over Internet protocol, traffic

1 http://www.multitel.be simulation, protocol emulation etc.). Multitel works closely with the Mons Faculty of Engineering and the Catholic University of Louvain academic staff and with other national and international research centres.

To develop its industrial partnership, Multitel is following a pro-active and diversified approach. Since 1999, more than 350 Walloon and European companies of different sizes and from different sectors and locations have already used the technology consultancy, training or prototype development services of the innovation centre. Many of them have entered into both technology development and research agreements with Multitel. Although one of its primary objectives was to help regional small and medium sized enterprises to become or remain competitive, Multitel has also developed partnerships with larger companies in order to generate sufficient revenue and to remain sustainable in the longer term.

Among the key success factors of Multitel’s project is its autonomous governance and management structure with strong industrial involvement, which guides the orientation of the centre’s activities. The centre also enjoys sound financial and quality management, and was granted ISO2 quality certification in 2006. Finally, financial support from the regional government (which is co-financing the centre with ERDF under the Objective 1 Phasing out programme for 2000-2006, along with other programmes such as the regional ‘Marshall Plan’ up to 2010) has been combined with a strong policy steer to create a sustainable centre (standards certification, at least 50% of its income sourced from industry, inclusion of industrialists on the board of directors etc.).

Finally, a balanced use of the EU's FP6 funding possibilities has also contributed to the success of the centre. By this means, the centre has been able to create additional large networks of industrial contacts while generating a considerable inflow of funds, helping the region to improve its position in the European Research Area and providing a modest contribution to overturning the so-called Matthew effect (“that the strong gets stronger”).

Background Information

Country: Belgium Region: Wallonia Project title: Multitel - telecommunications, signal and image processing research centre

Key words: Information society: services and applications for companies; Spin-off; Technological and market innovation

Duration of the project: 2000-2006

Funding: Total budget €25,872,033 ERDF contribution €7,684,699 ESF contribution €18,187,334 Regional budget €12,936,016

Objective: Objective 1

2 http://www.iso.org/

2 1. PROJECT DESCRIPTION

Multitel3 is a centre of excellence located in Wallonia, in the Province of Hainaut. It was initiated in 1995 under the previous Objective 1 programme (1995-2000) by two departments of the Faculté Polytechnique de Mons (Faculty of Engineering of Mons4) the Electromagnetism and Telecommunications Department and the Theory of Circuits and the Signal Processing Department. Spurred on by a decision of the regional government to concentrate resources on creating sustainable innovation centres, Multitel acquired the status of a fully-fledged research centre in 1999 in the form of a non-profit organisation independent of the FPMs. In 2000, Multitel was reinforced by the integration of expertise in the image-processing field drawn from the Telecommunication and Tele-detection Laboratory of the Université Catholique de Louvain (Catholic University of Louvain, UCL5)

Under the Objective 1 Phasing out programme (2000-2006), Multitel received a total of €18,187,332 of European Regional Development Fund (ERDF) support. A limited share (€2,570,125) was used to part-fund the construction in 2006 of a new building to house Multitel’s growing staff, while the vast majority (€15,617,207) was allocated to supporting a number of applied research projects and related services, as follows:

- Information and communication technologies (ICT) used for the development of intelligent man-machine interfaces (€4,946,220) - telecommunication networks (€5,961,095) - expertise pole in visual communication technology (€2,082,181) - sustainability of the innovation centre Multitel (€1,883,990) - development of a flow management platform (€743,721).

Multitel is now a recognised centre of excellence and consultancy provider to industry, consisting of a multidisciplinary team of around 60 researchers (including engineers, scientists and technicians). It is led by an administrative and project management unit, which aims to foster innovative ICT projects integrated with the needs of local businesses, as well as to collaborate and be acknowledged worldwide.

Multitel’s research activities are concentrated in four areas, each representing a department of the centre. This expertise covers speech and signal processing (voice synthesis and recognition etc.), photonics (optical amplification, fibre lasers etc.), image processing (video surveillance etc.) and networking activities (voice over internet protocol, traffic simulation, protocol emulation etc.). Multitel works closely with the staff of the associated academic institutes and with other research centres (such as the French institutes INRIA6 and Eurecom7).

The applied research is provided through an extensive range of services. Multitel offers industrial services from technological development to training courses (on Linux8 and open

3 www.multitel.be 4 www.fpms.ac.be 5 http://www.uclouvain.be/ 6 http://www.inria.fr/ 7 http://www.eurecom.fr/ 8 http://www.linux.org/

3 source software, programming tools and languages) to all businesses, whether they are local, national or international, small, medium and large companies.

More than 350 Walloon and European companies have already used the research centre’s services in consultancy, training or prototype development. For instance, firms such as Alstom9, Alcatel10, Belgacom11 and Telindus12 have forged both technology development and research agreements with Multitel. Since the centre was created, the industrial income has been growing at a rapid pace (by a factor of five since 2003).

Furthermore, Multitel is now playing an active role at the European level with an involvement in 21 EU Research Framework Programme 6 (FP6) projects (of which two as the co-ordinator)13; and seven EUREKA14 projects. To transfer its research results into marketable solutions, the centre has registered six patents to date and has set up five spin- offs based on its core research competences. These spin-offs currently employ a total of some 95 people:

- Acapela Group (1997): voice technology - IT-Optics (2000): information technology solutions based on open source software - Smartwear (2002): a line of textile products for the "Guide du Routard" brand as well as innovative products aimed at multi-functional clothing markets - ACIC (2003): software and hardware products in positioning, data fusion and image and video analysis - Polymedis (2003): software development for the medical world to manage emergency rooms overflow.

Multitel is expected to have an important impact on the economic development of the region, since it has generated over 300 skilled jobs (in the centre itself, in the universities and in the spin-offs) and has become a key provider of customised local services for small and medium sized enterprises in the ICT field.

ERDF funding has been a key element in enabling the development of a significant critical mass of industrially relevant expertise in telecommunications and software technologies in Hainaut. The obligation to compete for regional, national and international funds from 2000-2006 onwards, and to set up a fully-fledged and partially self-funding research and innovation centre, has facilitated the implementation of an autonomous business focused strategy for the centre.

9 http://www.alstom.com/home/ 10 http://www.alcatel-lucent.com/wps/portal 11 http://www.belgacom.be 12 http://www.telindus.com/ 13 http://ec.europa.eu/research/fp6/index_en.cfm 14 EUREKA is a pan-European network for market-oriented, industrial R&D. See www.eureka.be.

4 2. POLITICAL AND STRATEGIC CONTEXT

The Walloon Region, in general, and the Province of Hainaut in particular, are seriously lagging behind other comparable European regions according to most key indicators of economic development, competitiveness and innovation. Hainaut’s low economic performance is due to a vicious circle of underdevelopment, with the main contributing factors being a concentration of activities in traditional, low-value-added industries, a poorly educated population, major deficiency in entrepreneurial dynamics and very weak business research and development (R&D) investment (at an index of 45 compared to 100 for Belgium)15. Creating and diffusing knowledge was at the core of the strategy of the 2000-2006 Objective 1 ERDF programme for Hainaut. The programme document noted that “the shift towards a knowledge-based economy is a fundamental challenge that must guide the implementation of the overall development programme”16.

Multitel is one of the several centres of excellence, created and funded in Hainaut since 1994. Their mission is to carry out applied research activities in their area of competence and provide firms with technological assistance, technological watch and technology diffusion (including training). They differ from the earlier ‘collective research centres’ (linked to industrial sectors): they originate in universities rather than industry and they originally received solely public funds. However, a new regional funding mechanism introduced in 2002 allows that only certified research and technology centres meeting a number of criteria would be eligible for funding. One of these criteria was to attain at least 50% self-resource funding from industrial clients etc.

During 2000-2006, continuous support for the centres of excellence centres was one of the major priorities of the ERDF programme, and the centres received some 10% of public funds. Over the two periods (1994-99 and 2000-2006) more than €200m were invested in the development of such centres. Multitel was the second most important beneficiary, receiving some 16% of the available funding allocated to the 15 centres. The centres of excellence can be considered as one part of a concerted effort to raise the intensity of effort and expenditure by both the public and private sectors on innovation and R&D. Since 2005, the need to develop not only research and innovation centres, but also to increase structured cooperation between such centres with university teams and businesses in the framework of “competitiveness poles”17 is a key priority of the so-called “Marshall Plan”, or of the regional priority actions until 200918.

15 See the SPD Objective 1 Phasing out Hainaut 2000-2006, page116. http://objectif1hainaut.wallonie.be/ 16 See the SPD Objective 1 Phasing out Hainaut 2000-2006, page 95. 17 http://clusters.wallonie.be/federateur/en/general-information/competitiveness-hubs.html 18 See (in French): http://gov.wallonie.be/code/fr/action_prio.pdf

5 3. IMPLEMENTATION

3.1. Project design and planning As noted above, the idea of building an innovation centre like Multitel originated in two departments of the Mons Faculty of Engineering in 1994. As a result, a number of applied research and technology projects for funding under the 1994-1999 Objective 1 Hainaut programme, under the umbrella ‘Multitel’. In 1999, the Faculty officially created Multitel as an independent non-profit-making innovation centre and, in 2000, a team of researchers from the Catholic University of Louvain, which is in the neighbouring province, were associated to Multitel in order to reinforce its expertise.

The result is that Multitel’s applied research projects are closer to industrial applications than the more academic research projects of the three university departments. Multitel’s projects take account of industry needs from the outset and the research staff work with a technical-commercial team in a proactive way, identifying projects and sources of funding, as well as developing partnerships with businesses, from small local firms to multinationals. Based on its growing reputation, businesses have begun to approach the centre directly to request support in implementing various technology projects. The management of the centre emphasises that a key success factor is the necessity to concentrate on its core business of supporting industrial innovation.

The four main research fields pursued by the centre have been selected in line with research activities undertaken in the associated laboratories. These themes correspond to some of the key technologies defined by the Walloon authorities in the second half of the 1990s, and have been adapted to the regional industrial base and its needs. Multitel has proved that it can adapt its research focus to changing technology needs and industrial demand, a good example of this being the decision to refocus its research in optics and photonics towards the more buoyant field of medical products (lenses and lasers).

The 2000-2006 ERDF programme foresaw three main forms of support for centres of excellence such as Multitel: - Make available dedicated workspace notably for start-up enterprises and high-growth firms working in fields related to or complementary to those of the centres of excellence (measure 1.3); - Fund additional investment in buildings or equipment required for the pursuit or further development of services to enterprises in high value added sectors (measure 2.3); - Make available additional research or other staff as required, to provide services to businesses in the zone (measure 2.5).

At the start of the 2000-2006 programme, the regional government launched a call for tenders and invited proposals from the centres of excellence. These proposals had to reflect the ERDF programme‘s key priorities. An expert task force, independent of the regional administration, evaluated proposals submitted to the regional government. Most ERDF projects were selected in a first round of applications; a second round allowed the allocation of the remaining funds either to existing projects selected in the first round, or additional complementary projects. Multitel was successful in securing funding for four ERDF projects for 2001-2006 and was awarded two further subsidies for a flow management platform and the new centre building, in 2004.

In addition to the ERDF funds, Multitel also received €7.6m in funding from the European Social Fund (ESF) to “promote and focus on the human resources in the research area”. This involves mainly technology watch activities, and marketing and dissemination of research results. These activities are fully complementary with the projects funded by ERDF, which mainly focus on research activities and technical infrastructure.

From the outset, Multitel adopted a central position in the innovation chain, with strong upstream relationships with the universities. Downstream, it maintains strong links with industry, including the five spin-offs it set up. This strategy enables it to keep abreast of the state-of-the-art on the research side, and to respond rapidly to the requirements of companies.

In terms of risk-management practices, Multitel develops prototypes that are tested in real life conditions. They are constantly enhanced and adapted according to demands. Moreover, when working on a large and long-lasting project, Multitel strives to develop concrete applications of the research undertaken. In this respect, Multitel’s spin-offs clearly highlight the need to focus on niche markets with highly differentiated products.

Since 2002, Multitel, in partnership with its associated university laboratories, has generated €35m, in other words, it has more than doubled the funding received from the ERDF.

3.2. Management, monitoring and evaluation system The board of directors was originally drawn from the academic sector. However, in 2006, the region urged all the centres of excellence, including Multitel, to have boards with half of the membership from industry, and with an alternating presidency. For Multitel, this posed no problems, since it reflected the centre’s strategy to involve businesses directly in guiding the focus of its activities. Multitel plans to go even further along this route and have more than 50% board members from industry. To date, representatives from both large companies (such as Alstom, Alcatel, Thalès19) and smaller firms have been appointed to the board of directors.

Multitel’s organisational structure is divided into five departments, four of which correspond to specific R&D areas. The fifth one is the administrative and project management unit. The centre’s staff includes around 60 technical and scientific profiles and 10 administrative and project management employees. Each department is divided into several teams, which interact closely with each other in order to conduct cross-disciplinary projects. The mission of the centre’s management staff includes developing relationships with industries, as well as to ensure guaranteeing the administrative and financial handling of projects, communication and support on intellectual property rights (IPR) issues.

Multitel monitors its activities, including those funded by the ERDF, by following trends in a number of indicators: employment rate, degree of involvement in European projects, registered patents, industrial contracts etc. The use made of ESF funding is also monitored through indicators, such as number of seminars and training sessions organized, number of participants and their degree of satisfaction, and number of external events in which Multitel staff participate.

19 http://www.thalesonline.com/

In relation to quality management, Multitel was awarded ISO 9001 certification in 2006 for its entire activities. This certification validates the quality approach of Multitel, which includes the following actions: - to provide quality products and services; - to measure the customers’ satisfaction; - to implement an organization familiar to all the collaborators; - to reinforce the centre’s entire performance; - to ensure the personal development of every staff member within the company.

On the human resource management side, Multitel aims to secure the loyalty of its employees by providing them with long contracts and attractive salary packages. The technical and managerial profiles of its personnel are adapted to the needs of ongoing projects. Personnel are hired through formal job advertisements as well as through informal networks, at national and international levels, often as a result of collaboration in European level projects. The centre participates in various events in order to promote its activities. Attracting and retaining skilled staff remains a critical issue in the region.

Multitel tries to encourage young researchers to be entrepreneurially minded by defining development areas that are commercially exploitable, by motivating them and helping them to launch spin-offs and by encouraging ongoing collaboration between the centre and the spin-offs for the development of new products. To date, 95 people are employed in Multitel spin-offs and 100 researchers in university departments, who work regularly with Multitel.

3.3. Governance: partnership and leadership In line with the centre’s philosophy as outlined above, as well as with the management board structure, Multitel emphasises its proactive approach in order to efficiently respond to the needs of industry (financial resources, time allocated to research, IPR etc.). However, as one of Multitel’s primary objectives is to help local small and medium sized firms to become or remain competitive, it is required to develop partnerships with larger companies in order to generate sufficient revenue to remain sustainable in the long term.

Since its creation in 2000, Multitel has achieved strong growth in its industrial partnerships. The centre forecasts revenue of €1.3m from industry in 2007 (a five fold increase since 2003, with smaller firms20 representing 50% of the total). In addition, the centre will generate approximately €1.2m from EU level contracts for 2007 essentially from 21 participations in FP6 (of which two as project co-ordinator). European contracts are of primary importance for Multitel as a way to establish contacts, to learn more about industrial needs and the issues driving technology.

Since 2006, Multitel has also participated in three projects carried out within the framework of the competitiveness poles21 promoted by the Walloon Marshall Plan in aeronautics, transport and logistics.

Since April 2005, Multitel has also initiated a partnership in the traceability area with another research centre (CEWAC22) in the form of an economic interest grouping called

20 Enterprises with less than 100 employees 21 See http://www.polesdecompetitivite.eu

8 MUWAC, which is located in Charleroi and covers the whole of the Walloon market. In addition to its six single owned registered patents; Multitel has registered others, jointly with the SNCF23 and Alstom.

To disseminate results and develop new partnerships, Multitel organizes free conferences directed towards businesses, where it presents its activities and results, and collects insights from industry. In addition, researchers attend international conferences where they present their work. Multitel issues biannual newsletters aimed at Walloon enterprises (more than 300 subscribe to date) and makes uses of the regional press and the centre's own website for optimising communication.

3.4. Innovative elements and novel approaches to implementation Two examples give an insight into how Multitel’s management has sought to encourage the introduction of innovative new services to companies or novel solutions to problems faced by the high-technology spin-offs from the centre.

Firstly, a deliberate strategy is pursued to complement the core applied research activities and technology development for companies with a portfolio of training services (networking, programming, exploitation systems, optics, signal processing and Red Hat24) aimed at businesses. This has become an important source of revenue, since it represents 10% of the centre’s industrial income. Moreover, Multitel was the first, and remains the only, certified Red Hat centre in Belgium and certifies up to 40 persons each year.

Secondly, a private investment fund directed towards the creation of spin-offs has been launched in 2000 with a capital of €0.5m. The fund, called Cedrebel, has today available seed-capital resources of up to €1.1m to invest in spin-offs.

3.5. Key implementation obstacles and problem-solving practices Multitel encountered several obstacles during the development of its activities, all of which were tackled efficiently.

First example concerns the launching of the spin-offs, which always involves the risk of failure based, in particular, on the fact that a good researcher is not always a good manager. Multitel claims that one of the added values of being positioned in the middle of the research-to-innovation spectrum is that it is easy for people to move to structures up- and downstream (from the laboratory to the production line).

External factors, such as political decisions, have also posed questions for the functioning of the research centre. For example, the decision of the regional minister to disallow centres of excellence applying for funding via the EUREKA programmes. The diversity of funding sources of Multitel enables it to avoid financial difficulties that might arise as a result of changes to funding frameworks.

22 http://www.cewac.be/ 23 www.sncf.fr 24 Red Hat is the most trusted supplier of Linux and Open Source technologies. Its Global Learning Service stands as the worldwide leader of training and certification in the Linux space, in Open Source software, in programming tools and languages.

9 4. INNOVATION RESULTS

In its mission statement, Multitel clearly affirms its willingness to perform applied research for industries, whether for smaller or larger companies. ERDF-funds have been used by Multitel to support innovation both directly through one-to-one co-operation with regional firms, and indirectly by enhancing the innovation linkages and knowledge flows between the different actors in the regional innovation system.

The experience of the 2000-2006 period shows that Multitel has achieved a number of significant results that have boosted the innovative potential of the Hainaut Province and the Walloon region.

By developing synergies with regional companies, Multitel makes it easier for them to access state-of-the-art technology in the high-technology sector, from the technology itself to the services and training provided. The innovation centre provides more than 150 services of this type each year in the Walloon region.

Moreover, Multitel is a strategic research partner to companies of all sizes, notably those aiming to take part in European projects. Multitel involvement in the 21 FP6 projects is being followed up in the 7th Research Framework Programme (FP7), where the centre has applied for a significant number of new projects in collaboration with well-known regional and international companies.

ACIC25 is a spin-off of Multitel, the Catholic University of Louvain and the Mons Faculty of Engineering created in late 2003. Specialised in image technology, it provides soft- and hardware solutions in the fields of: - in- and outdoor positioning (vision, sound, Wi-Fi technology and inertial devices; GPS26, D-GPS); - data fusion (fault detection, change detection as well as fusion of acoustic and optical data for monitoring); - image and video analysis (people counting, traffic monitoring, behaviour and intrusion detection).

Since the market is highly competitive, ACIC defines for each project the system requirements in accordance with the customer’s needs, to offer a streamlined system configuration at the best quality/price ratio possible.

ACIC was set up and is wholly owned by the researchers and no external capital has been sought to date. Multitel is not a shareholder of the company but as for other spin-offs, Multitel receives 7% of the royalties generated by ACIC under a licence agreement for patents held by Multitel. ACIC’s links with Multitel remain strong, especially with the Image Processing Department in the framework of research projects (e.g. SERKET, Translogistic). Collaborations are also frequent with the Catholic University of Louvain's Telecom laboratory and the Mon Faculty of Engineering FPMs’ laboratories.

ACIC has experienced a rapid growth: from a team of four persons and a turnover of €400,000 in 2004, it has generated a turnover of € 600,000 in 2006 with a budget of €370,000. Growth forecasts for 2007 are also very promising (+ 140% of turnover). Seven people were working for ACIC as of June 2007 and it is expected to have between 10 and 12 employees by 2008.

25 http://www.acic.eu 26 http://en.wikipedia.org/wiki/Global_Positioning_System

The market-oriented industrial R&D projects Multitel conducts have contributed to the introduction of innovating products and services in the market. The six registered patents to date as well as the five centre spin-offs can be seen as good examples of this process. These spin-offs are growing at a rapid pace, with a turnover of €8.5m, and 95 persons employed, in 2007 (see example of ACIC).

The objective of the research conducted by Multitel is to ensure rapid technological transfer to spin-offs and other regional firms. The researchers in Multitel’s spin-offs are shareholders in their respective companies. Some of these spin-offs were launched by means of the FIRST-spin-off grants27 proposed by the Walloon region, which finance a researcher’s salary for one year. Ensuring continued close cooperation with its spin-offs is part of the ethos of Multitel, summed up by the director as “better five successful spin-offs than 20 failures”. Hence, careful selection of the technologies to be exploited via spin-offs and the market potential on which a new company is based is part and parcel of the Multitel approach.

In the longer-term, Multitel can expect to have a significant impact on the development of the region’s innovative capacities thanks to: - its provision of high technology services towards local companies - its technical innovations that strengthen its expertise in its domains of activity and the visibility of the regional research potential internationally; - the link it provides between academia and industry in Wallonia; - the skilled workers it attracts.

A good example of the way Multitel helps to support regional development in partnership with other regional research organisations and enterprises is the TransLogisTIC project28, a pilot project of the competitiveness cluster "Logistics in Wallonia" launched in July 2006. The objective is to provide innovative telematic methods to improve multimodal transport, beyond existing systems of traceability for lorries, trailers and pallets limited to road transport. Endowed with a budget of €14 million over two and a half years, the project is supported by major enterprises among which Alstom, smaller firms, universities and research centres. Multitel is in charge of the implementation of new high-performance on- board beacons. Logistics is seen as a sector of crucial importance for the future of the Walloon economy and thanks to TransLogisTIC smaller Walloon firms will be assisted to compete with global shipping agents such as DHL in the area of multimodal freight exchange.

27 http://recherche-technologie.wallonie.be 28 www.translogistic.be

11 5. SUSTAINABILITY AND TRANSFERABILITY

5.1. Sustainability The updated mid-term evaluation for the Objective 1 Phasing out programme was favourable in its description of the centres of excellence. However, the evaluator considered that “it is important to avoid that the investments made with ERDF support remain restricted to the creation of scientific and technological research centres disconnected from the economic and technological reality of the businesses in the Province, and without direct and indirect spillovers in terms of employment creation”29.

The evaluator noted that one of the risks for a number of centres was that their strategic choices would remain too heavily dependent on the interests of their universities, rather than being inspired by their main missions related to regional business development. The evaluator also underlined that it was still proving difficult to ensure sufficient private funding for these centres and that, in general, their funding structure needed to be more diverse. Most centres are still heavily dependent on European funding, and their future is at risk with the anticipated reduction in EU funds.

As noted above, Multitel has been actively pursuing a policy to avoid such pitfalls identified by the evaluator of the programme. The innovation centre aims to be self- financing in the medium-term.

In terms of financial sustainability, Multitel’s balance sheet has been positive for some time. The centre has invested in a new building which was financed using €2.5m of ERDF funding plus €1.1m of own funds.

Multitel is currently working on a five-year rotating business plan and management considers the viability of the centre is guaranteed to 2020 thanks in great part to a new project in preparation with a consortium of industries. By 2010, Multitel plans to have less than 50% of its annual operating budget sourced from public funds, based on increased cooperation with enterprises, the sale of specialized training services to businesses and an active, but focused, participation in European research programmes.

Another key element is that the management of the centre is making efforts to increase the number of industrial representatives in the board of directors in order to stay as close as possible to market needs.

5.2. Transferability

Multitel’s sound financial management and quality management practices are keys to the success of the centre. Although such practices are not new, their rapid application to a recently established centre, for instance the ISO quality certification, has been important in ensuring credibility with both regional politic makers and industrial clients.

The case of Multitel suggests that creating applied research and innovation centres concentrating on projects aimed at providing rapid, marketable solutions to companies can have an overall positive effect in terms of critical mass of researchers and engineers and in generating additional innovation activity and expenditure on research and innovation in

29 http://europe.wallonie.be/apps/spip/IMG/pdf/Evaluation_rapport.pdf, pg.30

12 less-favoured regions. The staff numbers in the associated university departments have increased since Multitel was created suggesting that Multitel has filled a gap in service provision for applied R&D for businesses, while not competing with the university teams on the academic front.

6. CONCLUSIONS: MAIN SUCCESS FACTORS

Multitel’s case suggests that there is a number of factors that are key to success in creating and developing applied research centres in less-favoured regions. These include: - The need for an autonomous governance and a management structure with strong industrial involvement in the (re)orienting of the centre’s activities; - A proactive and diversified approach to develop industrial partnerships which include a mix of large and small firms, sectors and locations (e.g. expanding the centre’s activities outside the province), a mix of services from applied research projects in consortia to professional training services for individual enterprises in specific technologies; - A strategic multi-year business and financial plans to ensure the financial sustainability of the centre. The financial position of the centre is assured by a mix of capital investments, diversified funding sources and a pro-active policy of securing additional long-term stable sources of financing; - Avoidance of involvement in projects or activities that are too far from the centre’s core business, and which distract attention from the delivery of innovation services to enterprises; - Understanding that while the role of such centres includes the creation of new high- tech employment generating firms, the number of spin-offs from a centre needs to be carefully managed in order to maximise the survival rate. In this respect, ensuring continued cooperation with spin-offs has been a hallmark of Multitel’s success; - Finally, the wise use of participation in EU Framework Programmes can also be considered a success factor of the centre. It has allowed the centre to create additional large networks of industrial contacts while generating a considerable inflow of funds, helping the region to improve its position in the European Research Area30 and providing a modest contribution to overturning the so-called Matthew effect (‘that the strong gets stronger").

30 http://cordis.europa.eu/era/

13 PROJECT CONTACT DETAILS

Contact person

Name: Ms. Edwige Jessel Position: Project coordinator Organisation: Multitel

Address: Rue Pierre et Marie Curie 2 7000 MONS (BELGIUM)

Telephone: +32 65 34 27 22 Fax: +32 65 34 27 98 Email: [email protected]

Project’s website: http://www.multitel.be

The information contained in this case study is up to date as of: October 2007

This case study has been prepared by Alasdair Reid and Nelly Bruno in the framework of a study carried out by Technopolis Group on behalf of the European Commission. The contents and views expressed in this case study are those of the author(s) and do not necessarily reflect the opinions or policies of the European Commission.