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Knowledge Networks and Their Impact on New and Small Firms In Please cite this paper as: Proto, A. et al. (2012), “Knowledge Networks and Their Impact on New and Small Firms in Local Economies: The Case Studies of the Autonomous Province of Trento and Magdeburg”, OECD Local Economic and Employment Development (LEED) Working Papers, 2012/02, OECD Publishing. http://dx.doi.org/10.1787/5k9gs1cr080x-en OECD Local Economic and Employment Development (LEED) Working Papers 2012/02 Knowledge Networks and Their Impact on New and Small Firms in Local Economies THE CASE STUDIES OF THE AUTONOMOUS PROVINCE OF TRENTO AND MAGDEBURG Alessandra Proto, Simone Tani, Joerg Bühnemann, Olaf Gaus, Mathias Raith KNOWLEDGE NETWORKS AND THEIR IMPACT ON NEW AND SMALL FIRMS IN LOCAL ECONOMIES1 The case studies of the Autonomous Province of Trento and Magdeburg an OECD LEED Study in collaboration with the University of Trento 1 The study is part of the research project ―Innovation Policy and its Effects on Locally Embedded Global Dynamics‖ (OPENLOC), which is co-ordinated by the University of Trento and is financed by the Autonomous Province of Trento in Italy. ACKNOWLEDGMENTS This project has been undertaken by the LEED Trento Centre for Local Development of the Organisation for Economic Co-operation and Development (OECD) in collaboration with the University of Trento. The work was coordinated by Alessandra Proto, who also edited the report, and Andrea-Rosalinde Hofer who supervised the German case study. Dr Simone Tani, Municipality of Florence, and Alessandra Proto (OECD) in collaboration with Roberto Chizzali (OECD) prepared the case study on Trento; Joerg Bühnemann, Olaf Gaus and Professor Mathias Raith from the Interaktionszentrum Entrepreneurship at the Otto-von-Guericke- Universität Magdeburg prepared the Magdeburg case study. We thank contributors and reviewers of this paper for their time and critical remarks: Professor Giovanni Pegoretti, Dr Francesco Rentocchini and Dr Giuseppe Vitucci from the University of Trento, Mr Stefano Barbieri and Dr Jonathan Potter at the OECD Centre for Entrepreneurship. Last but not least, the commitment of all interview partners has been fundamental. Essential in- house support to manage the data collection through questionnaires and finalise the paper was provided by Roberto Chizzali from the OECD secretariat and Lodovico Bertuzzi and Francesca Romana Lenzi who participated in the project as research interns. 3 TABLE OF CONTENTS Acknowledgments ........................................................................................................................ 3 Executive Summary ................................................................................................................... 12 Background .............................................................................................................................. 12 Methodology ............................................................................................................................ 13 Summary of the Trentino Case study with key issues from firm evidence ............................. 16 Summary of the Magdeburg Case study with key issues from firm evidence ......................... 22 Conclusions .............................................................................................................................. 27 PART 1: THE TRENTINO CASE STUDY ............................................................................ 30 Trentino Case Study .................................................................................................................. 31 Subject-Matter of the Report ................................................................................................... 31 Methodology ............................................................................................................................ 32 Theoretical Assumptions and an Overview of the Main Reports on the Issue .................... 35 Main Reports on the Issue ....................................................................................................... 36 Evolution of the Province’s Research and Innovation Policies ............................................. 38 From the 1960s to the 1990s .................................................................................................... 38 The Last Decade ...................................................................................................................... 38 Law for the Review of the Research and Innovation System .................................................. 39 Multiannual Research Programme and Provincial Development Plan (XIIIth Legislative Term) ......................................................................................................... 40 The New Provincial Development Programme ....................................................................... 41 Trentino Knowledge Network: Social and Economic Embedding ....................................... 45 Entrepreneurial Fabric: Dynamism and Interaction ................................................................. 45 Political and Institutional Aspects ........................................................................................... 47 4 Trentino Knowledge Networks: Organisational Structure ................................................... 49 Players ...................................................................................................................................... 51 Types of Relationship .............................................................................................................. 59 System Openness, National and International Integration ....................................................... 68 Knowledge Networks: The Trentino Business Perspective ................................................... 71 Description of the Companies Participating in the Study ........................................................ 71 Knowledge Generation ............................................................................................................ 77 Knowledge Transfer ................................................................................................................ 80 Knowledge Application ........................................................................................................... 89 Business‘ Assessment of Industrial Policy and Innovation Issues .......................................... 93 Experts' Assessment of Industrial Policy and Innovation Issues ............................................. 96 Conclusions: Ideas for Innovation Policies ........................................................................... 101 List of the Interviews with the Experts.................................................................................. 105 Bibliography ............................................................................................................................ 107 Annex I: The Questionnaire ................................................................................................... 109 PART 2: THE MAGDEBURG CASE STUDY .................................................................... 118 Magdeburg Case Study ........................................................................................................... 119 Introduction ............................................................................................................................ 119 Terminology .......................................................................................................................... 119 Methodology .......................................................................................................................... 120 Exploratory phase .................................................................................................................. 120 Survey of enterprises ............................................................................................................. 121 State of Saxony-Anhalt ........................................................................................................... 123 Socio-economic background .................................................................................................. 123 Comparison of R&D data between East-German states ........................................................ 124 The Economic Region of Magdeburg .................................................................................... 128 Socio-economic considerations ............................................................................................. 128 Science and research .............................................................................................................. 137 Industry Description ............................................................................................................... 142 Mechanical and systems engineering..................................................................................... 143 Healthcare .............................................................................................................................. 147 Environmental technology and recycling management ......................................................... 151 5 Analysis of Expert Interviews ................................................................................................ 156 Identification of network structures and the role of knowledge exchange ............................ 156 Importance of new and small local firms within
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