Hertfordshire County Innovation Plan - Hertfordshire Observatory

sweatertableΒιοτεχνολογία

3 Δεκ 2012 (πριν από 4 χρόνια και 10 μήνες)

252 εμφανίσεις

FINAL REPORT
A Knowledge Economy

Action Plan for Hertfordshire
Hertfordshire Prosperity Forum
Submitted by ANGLE Technology
Dated 23
rd
September 2003
Strictly private and confidential
A Knowledge Economy Action Plan for Hertfordshire
FINAL REPORT
Contents
Page
1. Introduction



..........................................................................

3

1.1 Background



3

1.2 Project methodology



4

1.3 The Hertfordshire knowledge economy and its strategic context



5

2. Hertfordshire’s knowledge topography



..............................

13

2.1 Key Sectors



13

2.2 The knowledge base



14

Hertfordshire knowledge chain gap analysis



.........................

26

2.3 Knowledge Chain



26

2.4 Summary of key Knowledge Chain issues and gaps



36

3. Knowledge Economy Action Plan



.....................................

40

3.1 The overriding challenges



41

3.2 The focus



41

3.3 The role of the champion



42

3.4 Prioritised interventions



42

Annex A:
................................................
Stakeholder Feedback and Interviewees
Hertfordshire County Council
ANGLE Technology
An innovation plan for Hertfordshire
DRAFT Report 20 June 2003
Glossary
Innovation
The commercial application and exploitation of new ideas
KTP
Knowledge Transfer Programme (used to be the Teaching

Company Scheme)
TCS
Teaching Company Scheme (currently the Knowledge Transfer

Programme)
RTO
Research and Technology Organisations, includes Public Sector

Research Establishments, Government Research Establishments,

Associations and Industry Research and Technology

Organisations.
PSRE
Public sector research establishments
SME
Small and Medium sized Enterprises typically <250 employees.
NPD
New product development
BRE
Building Research Establishment
GSK
GlaxoSmithKline
IACR
Institute of Arable Crops Research
BBSRC
The Biotechnology and Biological Science Research Council
TARRC
Tun Abdul Razak Research Centre
HCTOA
Hertfordshire Chief Technical Officers Association
HEDOG
Hertfordshire Economic Development Officers Group
Hertfordshire County Council
ANGLE Technology
An innovation plan for Hertfordshire
DRAFT Report 20 June 2003
Confidential
Not for distribution
1.
Introduction
Hertfordshire County Council acting on behalf of the Hertfordshire Prosperity Forum is

looking to produce and develop a high level county innovation strategy and action plan

which focuses on the broader innovation agenda. The following report presents the

final results of this project.
The project is being managed by a Steering Group comprising representatives of

Business Link Hertfordshire, the University of Hertfordshire (UH), the East of England

Development Agency (EEDA), Hertfordshire County Council and Stevenage Borough

Council. Wider stakeholder consultation is being sought to ensure applicability and

relevance.
This Knowledge Economy Action Plan forms part of wider regional and national

innovation related initiatives which are ongoing aimed at strengthening and diversifying

UK PLC.
The goal of this Knowledge Economy Action Plan is to develop a targeted programme

of interventions for Hertfordshire that builds on the county’s “knowledge economy” and

improves the quality and quantity of innovation. This report and its recommended

actions will become part of the Innovation Strategy for the County.
1.1
Background
After Cambridgeshire, Hertfordshire has the highest concentration of R&D related

activity in the East of England. It is keen to build on this strength and to increase its

long-term prosperity by encouraging the development of high-growth, high added value

knowledge-based business.
The underlying objective is not to increase the overall level of employment but rather to

improve the quality of jobs. The purpose of the innovation plan foreseen in this

proposal is not only to encourage the development of indigenous businesses of this type

in the county but also to make it attractive to like-minded inward investors be they

entrepreneurs starting a company or major corporates looking for a suitable UK base.
The intent of this study is to:

understand the size and principle features of Hertfordshire’s knowledge

economy including the key interfaces between the ‘knowledge houses’ including

HEIs, Research and Technology Organisations (RTOs
1
), major corporate

research laboratories and the economy at large;
1
RTO, meaning Research and Technology Organisation, is the generic term for what was Public Sector Research

Establishments (PSREs) and is an amalgamation of other facilities including Medical Research Charities , Industry

Research Association Laboratories and Government Research Establishments.
Hertfordshire County Council
3
ANGLE Technology
Hertfordshire Knowledge Economy Action Plan
FINAL Report 23 September 2003
Confidential
Not for distribution

make recommendations for carefully targeted interventions to improve the

quality and the quantity of innovation as it relates to the County’s knowledge-
based business.
1.2
Project methodology
The goal for this project was to develop a targeted innovation plan for Hertfordshire that

builds on the county’s “knowledge economy” and improves the quality and quantity of

innovation.
The focus of this project was on:

Creation & Attraction
of innovative technology oriented start-ups and inward

investors.

Development & Assistance
within the existing SME base.
The project was conducted in the following stages:
1.
Background research – assimilation and analysis of existing and ongoing

reports.
2.
Stakeholder interviews and consultation –interviews with over 30 key business

development, support and economic development stakeholders.
3.
Knowledge Topography Mapping
–identified, quantified and segmented the key

features of the Knowledge Base.
4.
Knowledge Transfer Value Chain and Gap Analysis – developed Knowledge

Chain model and quantified its key elements and linkages. Identified gaps,

“pinch-points” and key issues.
5.
Stakeholder review and workshop – collated and presented preliminary results

and issues to a working group of key stakeholders. Identified gaps and further

areas for development.
6.
Draft report compilation and stakeholder consultation.
7.
Final reporting.
The methodology differed somewhat from the original proposal in terms of stakeholder

consultation. A wider and more inclusive consultation and workshop scope was chosen

to ensure the full support and relevance of the final Action Plan.
It is expected that the final report will be taken forward in conjunction with other

ongoing innovation and economic development initiatives aimed at the Hertfordshire

Hertfordshire County Council
4
ANGLE Technology
Hertfordshire Knowledge Economy Action Plan
FINAL Report 23 September 2003
Confidential
Not for distribution
Knowledge Economy in particular, the Specialised Technological Activities report and

the EEDA Enterprise Hub Strategy.
1.3
The Hertfordshire knowledge economy and its strategic context
1.3.1
The principles of the Knowledge Economy
The diagram below illustrates the workings of an idealised regional Knowledge

Economy
2
.
1. Knowledge Capital
Capacity for creating new ideas
HEIs
,
PSREs
, R&D
2. Innovation Capacity
Capacity for commercialising ideas
NPD,
SMEs
, Major
corporates
3. Knowledge Economy
Outputs
Patents, innovations, designs, ™, ®, ©
4. Knowledge Economy
Outcomes
Products & services for sale
5. Knowledge Sustainability
Re
-
investment in
Knowledge Capital &
Innovation Capacity
The key components are:

Knowledge Capital,
which is the measure of the economy’s capacity to create

new ideas for possible use by business. The ability to generate new knowledge

resides mainly, but not exclusively, in the R&D community i.e. in university

research laboratories, RTOs and the R&D operations of major corporates such as

GSK. New knowledge is the basic feedstock of the knowledge economy.

Innovation capacity,
which is the measure of the economy’s capacity and

capability to convert

ideas into market ready products and services. In general

businesses – SMEs and major corporates – hopefully with a knowledge of the

2
SEEDA/Robert Huggins Associates ‘Global Index of Regional Knowledge Economies: Benchmarking South East

England (Nov 2001)
Hertfordshire County Council
5
ANGLE Technology
Hertfordshire Knowledge Economy Action Plan
FINAL Report 23 September 2003
Confidential
Not for distribution
needs of the market place, turn knowledge into products with or without the help

of a well thought out new product development methodology.

Knowledge economy outputs,
which are the Intellectual Property that

comprises the product in the form of patents, know how, registered designs,

trade marks, copyrights. Intellectual property is essentially a portable and

tradable asset.

Knowledge economy outcomes
, which is the wealth generation or income

generating step i.e. the result of a financial transaction such as the selling of

goods incorporating the Intellectual Property or the receipt of licensing income;

Knowledge sustainability
, which is the reinvestment step by which funds are

recycled back to generate more knowledge and develop more products.
An important part of the knowledge economy is the pathways between the various

steps, which have to work well if the knowledge economy is to function effectively.
As a guide, the health of a region’s knowledge economy can be judged by the:

presence and size of the key knowledge economy components;

the effectiveness of the linkages between the components.
In any given region such as Hertfordshire, it is unlikely that all the components will be

present in sufficient strength. In these circumstances it is important that there is ready

access to components in other regions and that the linkages to these external

components work well.
It is also possible to have a successful knowledge economy in a region where many of

the linkages are to markets, businesses and clients outside the region. For example the

region may be seen as a good location for technical service and sales operations while

the other HQ or administrative elements remain overseas. With the growth of

globalisation these linkages into and out of the region have special significance.
1.3.2
Strategic Context for Hertfordshire
The Hertfordshire Knowledge Economy Action Plan exists within a much wider

strategic environment which will have an impact on the successful delivery of the plan.

In particular, the geo-political, physical and market forces will directly influence the

delivery and outcomes of this plan.
Hertfordshire County Council
6
ANGLE Technology
Hertfordshire Knowledge Economy Action Plan
FINAL Report 23 September 2003
Confidential
Not for distribution
Geopolitical
The diagram below illustrates the main geopolitical ‘top down’ relationships. This

Action Plan encompasses and addresses a number of EU, national and regional issues.

Key innovation related programmes and their associated funding will be delivered

through the regional agencies and, as such, coordination will ensure that key initiatives

are supported and funded.
National and EU
(DTI Innovation Programme, SBS, Framework 6)
Regional
(EEDA Economic Development Strategy, RITTS,
Enterprise Hub Network, Cluster Strategies)
County
(Economic Development Strategy,
UH Innovation Initiatives,
Hertfordshire Business Link)
10
District/Borough
Strategies
Businesses
The principal influences are:

international (Largely EU) via Framework 6 programmes and through overseas

shareholders and inward investors;

the UK National Innovation Agenda set by DTI and the Treasury;

EEDA’s Regional Innovation and Technology Transfer Strategy and Economic

Development Strategy; innovation agenda and their progress or lack thereof to

date;

EEDA’s Enterprise Hub Network and Programmes and their associated

management strategy, important source of financial support;

Business Link small business support and advisory services and renewed SBS

commitment to ongoing support;

University of Hertfordshire commercialisation and innovation initiatives

including their new Innovation Centre;
Hertfordshire County Council
7
ANGLE Technology
Hertfordshire Knowledge Economy Action Plan
FINAL Report 23 September 2003
Confidential
Not for distribution

local authorities economic development agendas and their pivotal role in

approving planning permissions for local innovation network facilities.
Hertfordshire County Council
8
ANGLE Technology
Hertfordshire Knowledge Economy Action Plan
FINAL Report 23 September 2003
Confidential
Not for distribution
Physical
There are a number of physical infrastructure issues that exist in the County and which

must be addressed as part of this project:

innovation oriented growth and infrastructure issues need to align with the

Hertfordshire County Structure Plan which is currently under revision;

the County’s economy depends on importing people. Recognising and

leveraging existing North-South links will be essential to avoid exacerbating

transportation issues in the County;

there is heavy pressure on the limited development space available in the County

i.e. the developers role in space provision is pivotal and needs relationship

building and risk sharing;

importance of key employment site initiatives and importance of securing

appropriate small business space rather than more transit shed type distribution

and warehousing sites.
Figure
1
: Hertfordshire County economic forces and strategic context – fragmentation or consolidation?

Oxbr
idge”
Cam
Oxford
LONDON
Thames
Gateway
Milton
Keynes
Thames
Valley
Hertfordshire County Council
9
ANGLE Technology
Hertfordshire Knowledge Economy Action Plan
FINAL Report 23 September 2003
Confidential
Not for distribution
Market Forces
Figure 1 illustrates the conceptual nature of the County’s position with regard to the

regional economic forces. The County has several ‘push-pull’ forces acting on it that

can either fragment the knowledge base or provide the impetus for developing a

cohesive approach.
The key features are that:

the County is positioned in the middle of the UK Knowledge Economy Golden

Triangle nestling between Oxford, Cambridge and London who draw on its

resources;

Hertfordshire has a potential identity crisis based on these forces and the lack of

a central focal point. Does the County want to be a landlord and supplier to the

wider economies or be a cohesive power house in its own right? This will

require a renewed clarity of purpose;

it may be hard to obtain critical mass and market profile/recognition in such

company;

the vision for the county has become cluttered since the “Bright Green Industrial

Strategy” was written and it may need to be revisited;

it makes sense to work with those key players who have high profile

international and national connections (ex. BRE, GSK, MBDA, Astrium, BT,

Roche and Rothamsted Research) to promote County identity and profile;

their strategic position can be either a squeeze or an ideal strategic position.
Hertfordshire County Council
10
ANGLE Technology
Hertfordshire Knowledge Economy Action Plan
FINAL Report 23 September 2003
Confidential
Not for distribution
Figure
2
: Knowledge and technology based SME distribution for key sectors
3
3
Company data is based on available information and does not include the entire SME base in the County. Sample data is considered to be representative of the population.

Finance sector representation has not been included in order to focus on key technology based sectors.
Hertfordshire County Council
11
ANGLE Technology
Hertfordshire Knowledge Economy Action PlanAn innovation plan for Hertfordshire
DRAFTFINAL Report 20 June23 September 2003
Confidential
Not for distribution
Advanced engineering
Pharmaceuticals and biotech
Film & media
Electronic systems/components
ICT
Advanced engineering
Pharmaceuticals and biotech
Film & media
Electronic systems/components
ICT
Hertfordshire County Council
12
ANGLE Technology
Hertfordshire Knowledge Economy Action PlanAn innovation plan for Hertfordshire
FINAL Report DRAFT Report 20 June23 September

2003
Source: HCC Business Directory,2003.
Confidential
Not for distribution
2.
Hertfordshire’s knowledge topography
2.1
Key Sectors
Hertfordshire’s knowledge topography is based on the following key sectors
4

based on industry size, growth prospects and local concentrations.

Advanced engineering

Financial services

Information communications technology (ICT)

Pharmaceuticals and biotechnology

Aerospace and defence

Film and media

Environment
Financial and business services
are by far the largest employer, accounting for

25% of employees with St. Albans being a key location for firms such as KPMG,

Deloitte & Touche and Price Waterhouse Coopers. Sector growth in Hertfordshire

is expected to be 3.3%, which is slower than previous years.
R&D activities
continue to be higher than the UK average as do computer

services and ICT. High-tech manufacturing has experienced a decline in the last

year while chemicals and pharmaceutical has been performing consistently well.
Geographically the sectors are fairly evenly distributed along key North South

transportation links (Figure 2). However, concentrations of activity or

“clustering” is evident in the following areas:
Film and Media
: Concentrated in the South West of the County the Film and

Media Cluster is considerable and has a very high profile nationally and

internationally. Considerable attention is being paid to developing this cluster and

significant new studio and commercial developments at Leavesden and potentially

Hatfield will further enhance this sectors’ profile. This sector presents significant

promotional and public relations opportunities for the County.
Pharmaceutical and Biotech
: The County is home to some of the largest

pharmaceutical companies in the UK most of which are of global significance.

Key concentrations in Stevenage, Ware, Harlow (Essex), Hoddesdon and Welwyn

Garden City provide a significant catalyst for wider support activity.
4
Hertfordshire Local Economic Assessment 2002.
Hertfordshire County Council
13
ANGLE Technology
Hertfordshire Knowledge Economy Action PlanAn innovation plan for Hertfordshire
FINAL Report DRAFT Report 20 June23 September 2003
Confidential
Not for distribution
Aerospace and Defence
: Stevenage is home to significant national and

international players in this sector including MBDA (a BAE company) and

Astrium.
ICT
: ICT activity is spread relatively widely throughout the county. Most major

players align themselves along key road networks (e.g. T-Mobile at Hatfield on

the A1M) and new locations at Leavesden (BT Global Services) indicate a

growing presence in the South West of the County particularly around Hemel

Hempstead.
While a geographic and sector focus is the foundation for many of the ongoing

regional economic development initiatives, the County seems to present few clear

concentrations aside from those mentioned. While initiatives aimed at

encouraging innovation may require a particular sectoral theme, a sectoral focus

should not limit the involvement of other compatible organisations across other

sectors. Cross-fertilisation and cooperation between sectors should be encouraged

and facilitated. Business Link programmes aimed at encouraging these linkages

are excellent examples of this type of cross-sectoral approach.
2.2
The knowledge base
The indigenous Hertford Knowledge Base can be broken down into four main

functional groupings:
1.
Public Sector Research Establishments (PSREs) and

Research and Technology Organisations (RTO)
2.
HEIs and FE colleges
3.
Knowledge and technology based SMEs
4.
Large R&D corporates
While Hertfordshire has historically been home to a number of government

research establishments (GREs) such as MAFF at Rothamsted Research, Warren

Springs
5
(DTI) at Stevenage and the BRE at Garston,
it is important to note that

there have been few significant public sector interventions in Hertfordshire in

recent times that have helped to build the Knowledge Base.
The most significant aspects of the Hertfordshire County Knowledge Base to date

have been developed by the private sector.
5
Moved to Oxbridge
now part of GSK's land. AEA took the remaining jobs to Oxfordshire.
Hertfordshire County Council
14
ANGLE Technology
Hertfordshire Knowledge Economy Action PlanAn innovation plan for Hertfordshire
FINAL Report DRAFT Report 20 June23 September 2003
Confidential
Not for distribution
PSREs and RTOs
Hertfordshire is home to a number of PSREs and RTOs, the most significant of

which are:
Name
Location
Sector
Staff
Building Research

Establishment (BRE)
Garston
Materials –

construction/environment
1000
Rothamsted Research

(previously IACR)
Harpenden
Plant bioscience
700
Clare Hall Cancer

Reaearch UK
Blanche Lane,

Potters Bar
Medical research
200
Tun Abdul Razak

Research Centre

(TARRC)
Hertford
Materials – rubber
150
Furniture Industry

Research Association

(FIRA)
Stevenage
Materials – furniture
30
Materials Engineering

Research Ltd (MERL)
Hertford
Materials – engineering
20
Bioproducts Processing

Laboratory (BPL)
Elstree
Healthcare – blood
50
Silsoe Research Institute

(SRI)
6
Silsoe Bedford
Plant bioscience,

engineering
150-200
BRE is the UK’s leading centre of expertise on buildings, construction, energy

and in particular, the environment. They are a significant knowledge base for the

Environmental Sector in the County and currently provide research-based

consultancy, testing and certification services to customers world-wide. They have

considerable links within and outside the county. BRE is housed on the only site

in Hertfordshire that could be called a “Science Park” with fifteen independent

knowledge based businesses already located on its site. Interviews with senior

management have indicated an interest in leveraging their research capabilities

and increasing the profile of their site in the county. BRE is considered to present

a considerable opportunity to increase the innovation potential in the County and a

ready-made means of increasing the County’s profile.
6
Not in Hertfordshire County but has direct ties with County via IACR
Hertfordshire County Council
15
ANGLE Technology
Hertfordshire Knowledge Economy Action PlanAn innovation plan for Hertfordshire
FINAL Report DRAFT Report 20 June23 September 2003
Confidential
Not for distribution
Rothamsted Research (sponsored by the Biotechnology and Biological Science

Research Council (BBSRC) and formerly known as Rothamsted Experimental

Station) is the largest agricultural research centre in the UK and is one of the

oldest agricultural research stations in the world. They have research links and

collaborative projects throughout the UK particularly with Cambridge and the

John Innes Institute at Norwich. They are currently completing a £31M capital

redevelopment programme that includes new laboratories, glasshouses and

controlled environment facilities at their Rothamsted site. Unfortunately, local

considerations prevented them from getting planning approval for much needed

business incubation capacity as part of the redevelopment programme but

nevertheless the redevelopment represents a golden opportunity for the County to

promote itself. The implications of this are discussed in subsequent sections.
TARRC and FIRA are RTOs representing the rubber materials sector (largely

Malaysian based) and furniture sector respectively. They perform R&D for the

benefit of their members with many links external to the county nationally and

internationally. There is little scope for the further expansion or development of

these centres themselves however research undertaken within these groups

provides a potential source of new technology based products and spin-out

companies.
A smaller player, MERL provides laboratory based research and development

testing and consulting services specialising in elastomers, thermoplastics, adhesive

and fibre reinforced composites. They have considerable research links outside of

the County and more than 70% of turnover arises from clients outside the UK.

MERL has expressed interest in expanding its R&D function and is seeking new

laboratory/manufacturing facilities within the County. The search for new

facilities has proven extremely difficult and costly to the extent that even an

indigenous group such as MERL is forced to look outside the County for space.

Their plight provides a useful example of one of the key constraints to innovation

in the region- the lack of
appropriate
space.
The BPL is part of the national blood transfusion service and is more of a

government research establishment (GRE) than an RTO. It is a not-for-profit

organisation, wholly owned by the British Government and its research,

development, manufacturing and UK and overseas marketing departments are all

based at Elstree. BPL is actively seeking to license out many of its products and

has an interest in additional business development and partnering.
Many interactions and synergies exist between these organisations. In particular

BRE, TARRC and FIRA have previous interactions and share a considerable

national/international presence and client network. Also, the direct links between

SRI in Silsoe and the IACR exist. Further cooperation between the groups could

offer a good source of innovation. The involvement and engagement of these

groups as part of the wider R&D sector should be a priority.
HEI and FE colleges
Hertfordshire County Council
16
ANGLE Technology
Hertfordshire Knowledge Economy Action PlanAn innovation plan for Hertfordshire
FINAL Report DRAFT Report 20 June23 September 2003
Confidential
Not for distribution
While the University of Hertfordshire (UH) has a variable performance in RAE
7

rankings, the commercial research, technical and vocational skills base in the UH

and the County’s four FE Colleges with their ten campus sites provides a broad

commercially oriented knowledge base and physical network that reaches into

most parts of the County (Figure 3). The UH in particular provides a high degree

of “business relevant” services and interactions.
Figure
3
: Hertfordshire HEI and FE College Networks
UH
UH
HR
WH
WH
HR
HR
OC
OC
OC
NH
NH
NH
Luton
FE
FE
UH
UH
FE Colleges
HEI
Cran
Cran
-
-
field
field
London
London
HEIs
HEIs
Cambridge
Cambridge
As the central focus for the county, the UH has undergone significant new

development both on its existing site and on the new Hatfield Aerodrome site (de

Havilland Campus). It now boasts an impressive £120M new campus next to a

high profile business park. They are currently putting the final touches on the 800

sq/m UH Innovation Centre, just over 50% of which is pre-let. The university is

experiencing a good deal of interest for the innovation centre and has 300-400

sq/m of space available in 10 and 33 sq/m office space units. Further, they also

have a large chemical lab available next to the innovation centre and are seeking a

suitable tenant that will add value to the University’s research activities.
7
Research Assessment Exercise is conducted by HEFC and provides a measure of University research capability

and capacity.
Hertfordshire County Council
17
ANGLE Technology
Hertfordshire Knowledge Economy Action PlanAn innovation plan for Hertfordshire
FINAL Report DRAFT Report 20 June23 September 2003
Confidential
Not for distribution
In terms of its strategic development the University will be enhancing its

relevance to businesses and increasing its applied research and commercial

interactions rather than expanding the breadth of its RAE research. Key areas of

commercial interest include:

Aerospace, Automotive and Mechanical Engineering
including the

Automotive Engineering Centre
;

Computer Science
;

Design, Technology & Management
;

Electronic, Communication & Electrical Engineering
;

Health sciences (psychology);

Micro-particle physics – computing;

Creative design and media.
The University has a number of active commercial development programmes and

companies that focus exclusively on commercial research and technology transfer

including their Knowledge Transfer Partnership (KTP)
8
programme,
Science and

Technology Research Centre
(STRC) and Automotive Engineering Centre (AEC).

This activity and its capacity for generating commercial linkages is an important

asset to developing Hertfordshire’s Innovation potential and plays well to UH’s

own ‘third stream
9
’ or commercial/business agenda which the FE Colleges

increasingly share. This common interest in economic development is an

important building block for the Knowledge Economy Action Plan.
The four FE Colleges in the County encompass a total of 11 individual locations.

While the colleges do focus on basic skills development they are an essential

element to meeting the “Skills Gap” (see following). Further, many of the

colleges have expressed a strategic interest in developing their

innovation/entrepreneurial capacity. Several college sites have new modern

facilities (e.g. North Hertfordshire College in Stevenage) and still others have

potential development options that could play in important factor in building the

Hertfordshire innovation network.
Linkages to other HEI and developing knowledge centres such as Cranfield

University, Cambridge, Luton and more significantly, London are present. Both

the London HEI network and Cambridge are significant potential sources of

knowledge capital. However, these are expected to be more indirect sources.

Direct relationships with Luton and Cranfield in the Engineering, Environmental,

Automotive and Aerospace sectors are more established. The potential for

collaboration between Cranfield, Luton and Hertfordshire in terms of enhancing

the County’s indigenous knowledge base needs to be developed. Formal

8
Previously called the Teaching Companies Scheme (TCS).
9
Term commonly used to describe the new commercial interests/mission of HEIs. Also called Misson 3. It is in

addition to the traditional roles of Teaching (Mission 1) and Research (Misson 2).
Hertfordshire County Council
18
ANGLE Technology
Hertfordshire Knowledge Economy Action PlanAn innovation plan for Hertfordshire
FINAL Report DRAFT Report 20 June23 September 2003
Confidential
Not for distribution
relationships here are expected to provide more immediate opportunities than

possibly working with London or Cambridge.
Cambridge in particular is not felt to be a major contributor to the Hertfordshire

Knowledge Economy. While it does provide some impact in and around Royston,

Harlow and has considerable ties with key pharmaceutical companies in

Stevenage and Rothamsted, it is our opinion that the East-West flow of innovative

businesses to the County from Cambridge will not play a significant role in the

development of the County as a whole
10
.
It is important to note that London in particular offers a significant source of

available knowledge capital. The transport links are good and many of the

innovators in London’s major HEIs are Hertfordshire residents that can be drawn

upon. “Opening the door” to HEI spinouts from London is a key element to the

Knowledge Economy Action Plan and is discussed further.
Knowledge and technology based SMEs
In Hertfordshire, 99% of the businesse units have less than 200 employees and

they account for 72% of employees. The 1% of large business units account for

the remaining 28%. 86% are micro-businesses (1-10) and 14% are small and

medium sized (11-199).
11
Hertfordshire has the second largest stock of SMEs in the Region and has the

highest business start-up survival rates anywhere in the UK. Growth in the

number of registered businesses is considerably higher in the County than in the

East of England, the South East and the UK.
As can be seen by the earlier map (Figure 2), knowledge and technology based

SMEs are widely distributed geographically and are sectorally diverse. This is

considered to be a significant strength for the County and one upon which the

Knowledge Economy Action Plan should be built.
It is important to note that only a small number of SMEs within the county were

interviewed. As a result, SME “demand side” information relied upon key

stakeholders who had extensive ongoing contact with the SME base and was

supported with background materials. Professional experience and wider UK

surveys of knowledge and technology based firms were also drawn upon
12
. It

would be expected that any significant initiatives aimed at SMEs would be

confirmed as to their applicability and relevance through direct interviews with the

SME base.
The major factors limiting innovation within the UK include:
10
This sentiment is also echoed by SQW in their STA 1998 report.
11
Data from Hertfordshire Local Economy Assessment, 2002. LEA refers to business units rather than separate

business enterprises.
12
DTI UK Innovation Survey 2001
Hertfordshire County Council
19
ANGLE Technology
Hertfordshire Knowledge Economy Action PlanAn innovation plan for Hertfordshire
FINAL Report DRAFT Report 20 June23 September 2003
Confidential
Not for distribution
Economic Factors

excessive perceived economic risk;

direct innovation costs;

cost and availability of finance (obtaining affordable finance).
Internal Factors

organisational rigidities;

lack of qualified personnel;

lack of information on technology;

lack of information and access to markets.
For Hertfordshire SMEs many of these factors are applicable and relevant

although their degree of importance may differ. Stakeholder feedback from both

the SME community and Business Link indicates the following factors are

important issues facing County businesses as they seek to develop and innovate:

access to markets particularly key corporate supply chains;

flexible and affordable facilities (particularly for start-ups);

limited organisational resources;

access to qualified personnel;

provision of affordable housing;

transit and transportation infrastructure;

availability of finance.
Considering the potential of the current SME base in the County, any initiatives

aimed at increasing innovation within existing businesses will need to address

these barriers.
Large R&D focused corporates
Research and Development is one of the most significant industrial activities in

Hertfordshire. Hertfordshire consistently has a higher proportion of employees in

this activity than nationally. R&D is one of the largest employers and has the

largest output of any industry in Hertfordshire.
13
13
Hertfordshire Local Economy Assessment 2002
Hertfordshire County Council
20
ANGLE Technology
Hertfordshire Knowledge Economy Action PlanAn innovation plan for Hertfordshire
FINAL Report DRAFT Report 20 June23 September 2003
Confidential
Not for distribution
Table
1
: R&D Scoreboard 2002, Major Corporate R&D players by sector – top 10
Name
Sector
UK Rank

by sector
Location
R&D
(Millions)
BAE Systems
Aerospace

and Defense
#1
Stevenage (MBDA) &

Borehamwood
£994M
GSK
Pharma and

Biotech
#1
Stevenage/Ware (R&D

facility)
£2,651M
Roche

(historic)
Pharma and

Biotech
#7
Welwyn Garden City
£82.6M
Merck Sharp

& Dohme
Pharma and

Biotech
#8
Terlings Park

Essex/Herts border
£62M
Novartis

(Animal

Research Unit)
Pharma and

Biotech
#9
Litlington (Royston)
£40M
Johnson

Matthey
Chemical
#5
Royston
£44M
BT Global

Services
Telecommuni
cations
#1
Leavesden (future)
£362M
Kodak
Media &

photography
#3
Hemel Hempstead
£19M
Xerox
IT Hardware
#14
Welwyn Garden City
£19M
Hertfordshire is home to the R&D facilities for a number of the top 10 R&D

focused corporations in the UK according to the 2002 UK R&D Scoreboard

(Table 1). Although R&D figures are not likely all at one specific site (e.g. GSK)

the size of the facilities noted are nationally and internationally significant and are

concentrated around the A1(M) “Knowledge Corridor” to Stevenage, the M11

(Harlow and Bishops Stortford) and the M1 north (Figure 4).
While R&D activity is a key strength several major R&D companies such as

Merck Sharp & Dohme (Hoddesdon) and GSK who are global players in their

own right, have corporate and commercial HQs (i.e. no R&D) in Hertfordshire

and likely attract a great deal of traffic and attention to the County.
Roche UK headquarters located at Welwyn Garden City employs 1,000+ people

in product development, manufacturing, pharmaceuticals and consumer health

sales and marketing operations and corporate functions. While their R&D

function have decreased at the site following a reorganisation in 2002, the Roche

R&D facilities (100,000 sq ft, of highly specialised laboratory space) offer

increased potential for R&D pending an appropriate tenant. Further, the company

has just announced its intention to seek planning permission for a 21,800 sq. m

new UK Head Office facility in Welwyn Garden City.
Hertfordshire County Council
21
ANGLE Technology
Hertfordshire Knowledge Economy Action PlanAn innovation plan for Hertfordshire
FINAL Report DRAFT Report 20 June23 September 2003
Confidential
Not for distribution
Figure
4
: Hertfordshire major corporate R&D operations – expenditure on R&D
Pharma
/biotech
Astrium
MBDA (BAE)
GSK
Matthey
Novartis
TTP
GSK
Merck
Merck
Nortel
BT
Kodak
BRE
Xerox
T
-
Mobile
Roche
Schering
-
Plough
Aerospace/defence
ICT & hardware
Chemicals
Materials
GSK
TARRC
Rothamsted
SRI
BAE
Systems
Perhaps the single most significant feature of the Hertfordshire knowledge

topography is GSK’s corporate R&D laboratory at Stevenage. The site at

Stevenage, which cost £700 million and is one of the most advanced medicines

research centres in the world and continues to be an important centre for

investment, most recently in high throughput screening technologies. Further,

GSKs wider network including their facilities at Harlow and Ware make their

presence even more significant.
Hertfordshire County Council
22
ANGLE Technology
Hertfordshire Knowledge Economy Action PlanAn innovation plan for Hertfordshire
FINAL Report DRAFT Report 20 June23 September 2003
Confidential
Not for distribution
Further, the arbitrary boundaries of Hertfordshire are shared with key R&D

centres. In particular, the Neuroscience Research Centre (NRC), located at

Terlings Park on the Hertfordshire/Essex border, is one of the largest dedicated

neuroscience research laboratories in the world and is one of Merck & Co’s

premier research sites. Similarly, Novartis’s Animal Health Facility is located just

outside of Royston.
Another factor is the potential for ‘recycling’ such facilities in the aftermath of

mergers, acquisitions and restructurings. Laboratories are extremely expensive to

build so surplus assets such as Roche’s surplus lab facilities at Welwyn should be

seen as a valuable ‘legacy’ assets.
Previous work done on the R&D sector in Hertfordshire indicated that the

prospects for further R&D growth from existing companies in the County looked

positive although key concerns were expressed regarding the Aerospace and

Defence sectors.
14
14
Howells 1995
Hertfordshire County Council
23
ANGLE Technology
Hertfordshire Knowledge Economy Action PlanAn innovation plan for Hertfordshire
FINAL Report DRAFT Report 20 June23 September 2003
Confidential
Not for distribution
Figure
5
: Hertfordshire County Knowledge Chain Gap Analysis
Hertfordshire County Council
24
ANGLE Technology
Hertfordshire Knowledge Economy Action PlanAn innovation plan for Hertfordshire
DRAFTFINAL Report 20 June23 September 2003
Confidential
Not for distribution
RTOs
International
HEIs
SMEs
Corporates
VCs
Specialist
VCs
Business
Angels
R&D skills
R&D funding
R&D policy/
strategy
Specialised
tech skills
Appropriate property
Incubators
KTP (ex TCS)
Licensing
Collaborative research
Spinout
Local/regional linkages
National &
Interntl
links
Informal Networks
Formal Networks
Recruitment
Access to equipment
Publications
Training
London
RTOs
HEIs
SMEs
Corporates
Research base
Research and technical linkages
End
-
users
Innovation
centres
Joint R&D
centres
Policy/
Strategy
Funding
Skills/
training
Infrastructure
Specialist
R&D facilities
Seed/
SMART
Banks/
Markets
Business
development
Business
management
General
tech skills
Commercial
management
London
International
Strong
Moderate
Weak
Hertfordshire
capacity & capability
Commercialisation Process
Key
Success Factors
Technology transfer
strategy/framework
Local planning
coordination
Inter
-
regional
coordination
Business
relevance
Hertfordshire County Council
25
ANGLE Technology
Hertfordshire Knowledge Economy Action PlanAn innovation plan for Hertfordshire
FINAL Report DRAFT Report 20 June23 September

2003
Confidential
Not for distribution
Hertfordshire knowledge chain gap analysis
A key objective of this project was to develop the Hertfordshire Knowledge Chain

and identify the gaps, ‘pinch points’ and ‘bottlenecks’ including underused and

missing interfaces. The issues identified from this analysis form the basis for the

Knowledge Economy Action Plan.
As an aside, considerable effort has previously been spent by key County

stakeholders in providing input to the Regional Economic Development Strategy

and Regional Innovation and Technology Transfer Strategy (RITTS, 2000). Many

of the issues identified then continue to be the significant issues facing

Hertfordshire’s innovation capacity and capability.
The following presents the results of this mapping exercise and follows on with a

summary of the key issues for Hertfordshire as it seeks to progress the innovation

related aspects of its Economic Development Strategy.
2.3
Knowledge Chain
The Hertfordshire Knowledge Chain illustrated in Figure 5 above provides a

graphical representation of the key elements in the knowledge/technology

commercialisation process. It is a tool frequently used to graphically represent the

capacity and capability of key links in the chain and whether they are missing

(“Weak”), moderately represented (“Moderate”) or which are well represented

(“Strong”). It provides a useful conceptual map from which the key innovation

related issues can be identified and further addressed via targeted interventions.
The Knowledge Chain is presented along two main axis. The first horizontal axis

represents the technology commercialisation process and all the significant

elements in it. Starting at the knowledge/IP base (“Research Base”) it proceeds

through technology transfer via linkages (“Research and Technical Linkages”)

and finishes with the “End-users” or market for the product or service that has

been commercialised. The second vertical axis represents the important

ingredients to this process including skills/training, funding, infrastructure and

government policy/strategy. The following sections describe the Knowledge Map

and the key issues associated with each of its attributes.
Information used to populate this map was derived from a mix of background

research (see references) and stakeholder interviews (Annex A).
Hertfordshire County Council
26
ANGLE Technology
Hertfordshire Knowledge Economy Action PlanAn innovation plan for Hertfordshire
FINAL Report DRAFT Report 20 June23 September 2003
Confidential
Not for distribution
2.3.1
Technology Commercialisation Process
The research base
Hertfordshire County is one of the top ten research counties in Britain according

to census employment data (NOMIS). As supported by Howell (1995), it has a

strong and diverse research base consisting of the UH, key RTOs (principally

including BRE and Rothamsted), high concentrations of knowledge and

technology based SMEs, and a large national and internationally significant clutch

of large corporate R&D centres.
The Knowledge Topography of the research base shows the county to be

relatively diverse with no real centre or focal point in evidence. While seven

“Research Clusters” do exist, particularly the Aerospace and Defence, Materials

and Pharmaceutical/Biotech sectors, it is the strength in diversity that is the main

asset for the County in terms of encouraging innovation and economic stability.

Indeed it may be helpful to think of R&D as a major cross cutting theme in the

County’s economy or even a sector in its own right. This characteristic forms a

key element of the Knowledge Economy Action Plan for the County.
While the UH is considered to have a relatively low profile in the research base,

its ongoing development and growth will enhance the role it should play in terms

of generating and attracting commercial activity. Currently the UH is reinventing

itself as a modern and “business relevant” institution. Provided it delivers on this

strategic aim, it then can be looked upon as a source of increased commercial and

possibly business spin-out activity provided the appropriate support programmes

and environment are in place. Their new Innovation Centre will play and

important role in developing this potential and its role is discussed further in the

sections covering infrastructure potential.
RTOs and in particular Rothamsted (plant biosciences) and BRE (construction &

environment) are a significant asset for the county in terms of research capability.

Both sites have specifically indicated an interest in enhancing their physical

presence but have met with planning barriers. Rothamsted in particular was

refused planning permission for high potential “Bioincubator” capacity as part of

their recent redevelopment. BRE’s s and their facility is considered to be the only

true current “Science Park” type facility in Hertfordshire that could be delivered

quickly.
Access to London is a key element of the research base in Hertfordshire. As a

potential source of both research activity and knowledge capital it is significant

and has a great deal of untapped potential for attracting innovative research based

companies provided the appropriate business environment exists in Hertfordshire.

Dealing with the relevant infrastructure issues associated with this will be

paramount and is discussed further in subsequent sections.
Hertfordshire County Council
27
ANGLE Technology
Hertfordshire Knowledge Economy Action PlanAn innovation plan for Hertfordshire
FINAL Report DRAFT Report 20 June23 September 2003
Confidential
Not for distribution
As mentioned earlier, there are estimated to be roughly 700 foreign owned

companies in the county and approximately 500 have their European base in

Hertfordshire.
15
. While the foreign presence is one of the highest in the country,

most foreign owned companies only operate sales, marketing, distribution or

technical support centres from the County and therefore their
research presence

is limited. However, while companies such as Astrium (Stevenage), Xerox

(Welwyn Hatfield) and Kodak (Hemel) do have significant research capabilities,

the opportunities for attracting the research operations of large foreign owned

companies will be limited
16
. Therefore emphasis on retention and leveraging

existing foreign R&D will likely be more appropriate.
Research and technical linkages
Linkages between the Research Base and the End-Users are critical features of the

Knowledge Chain. Both physical linkages (e.g. training, technology transfer and

collaborative research programmes) and informal (e.g. networking/eventing,

access to research equipment, recruitment) are required to progress the initial

research/IP or innovations through to the marketplace.
Stakeholder feedback and background research suggests that Hertfordshire’s

research links at the local level are somewhat limited. Aside from several

informal or sponsorship type collaborations (e.g. MBDA, Astrium and GSK with

the Hertfordshire Business Innovation Centre (HBIC) Stevenage) and those at the

UH which has links with a wide variety of small and large corporations via

commercial research programmes and the KTP (previously TCS), businesses and

research in the county seem to be working in isolation from their county

environment. Although some companies do have limited links with local schools,

as Howell points out, most research links seemed to be similar to the make-up of

companies in that they are largely national and international in scale.
Spinout and licensing activity from the county research base into the local

economy was an area reported to be weak. Although this is likely a result of

several factors including cost and suitable accommodation issues, spinouts are a

key source of innovation that should be encouraged from the corporate, RTO and

HEI research base.
Considerable equipment and testing facilities exist within the county however

these were consistently reported to be either under-utilised or under-promoted.

Considering the high quality and availability of equipment at both the UH (e.g.

wind tunnels, heat extremes tester – largest in the country) and other RTOs (e.g.

BRE, MERL and FIRA) the scope for increasing innovation potential in these

areas is considerable.
15
Hertfordshire Future
http://www.hertsfuture.exemplas.com/about/4911_knowledge_based.asp
.
16
International investment in R&D facilities in the UK is decreasing as a result of the high cost of operations and

competition from EU countries (2001 DTI Innovation Survey and pers comm. Invest UK)
Hertfordshire County Council
28
ANGLE Technology
Hertfordshire Knowledge Economy Action PlanAn innovation plan for Hertfordshire
FINAL Report DRAFT Report 20 June23 September 2003
Confidential
Not for distribution
New collaborations such as the regional i10
17
programme which is a government

sponsored collaboration between HEIs in the East of England that aims to improve

the interface and engagement with business and other organisations, are expected

to help strengthen this linkage. While this is a new initiative, it does provide an

immediate opportunity to address many of the research and technical weaknesses

and gaps in the Hertfordshire Knowledge Chain.
Linkages between players in the R&D sector are also somewhat limited. Many of

the issues affecting major R&D players are common to all (e.g. affordable housing

for graduate level staff, difficulties in recruiting skilled technicians). Unlike

Aerospace who have had the East of England Aerospace Alliance (EEAA)

representing their views and issues and the Eastern Region Bioscience Initiative

(ERBI), the other R&D players in the County do not have a unified voice, linkage

or network. For such a key group of players this is an important linkage to

develop.
Recruitment and training linkages, particularly for in specialised skills, has

consistently been highlighted as a weakness in the area and is a constant issue for

the County. While programmes such as KTP (previously TCS) are an important

and successful tool for linking companies with the local employee base and

providing relevant training, overall the connection is weak and could be improved

upon. Extensive efforts to address this issue are ongoing involving the UH, FE

Colleges, Business Link and the Learning Skills Council (LSC) and they are

expected to continue.
Informal networks within the County are strong and extensive and groups such as

Business Link are key players in fostering and creating linkages. A multitude of

informal communication and interest networks exist both outside the county (e.g.

Medi Link, ERBI and East of England Innovation Society) and inside the county

(e.g. Hertfordshire Chamber of Commerce and Industry (HCCI) and Hertfordshire

Future). However, a physical network of franchised innovation/incubation

facilities that links locations and which “hardwires” organisations together

through common facilities and shared business support resources (e.g. The Oxford

Trust Innovation Centres, Surrey Enterprise Hub Network) is absent
18
.
As a relatively fragmented county, these hardwired networks are likely to be an

important catalyst for drawing the county together, presenting a concentrated

resource to outside investors and gaining economies of scale from promotional

and business support programmes. This issue is an important element to the

Knowledge Economy Action Plan and its further development is discussed further

in the Action Plan sections.
17
i10 information available at
http://www.i10.org.uk

18
recent EEDA initiatives to develop Enterprise Hubs throughout the region are ongoing and offer a potential

backbone and source of funding to develop a formal innovation network.
Hertfordshire County Council
29
ANGLE Technology
Hertfordshire Knowledge Economy Action PlanAn innovation plan for Hertfordshire
FINAL Report DRAFT Report 20 June23 September 2003
Confidential
Not for distribution
End-users
As illustrated in the Knowledge Chain, the End-users are the eventual market for

both product and service based innovations. To this end, Hertfordshire has strong

access to most national and international markets and this is one of the core

strengths of the County. However, businesses in Hertfordshire tend to utilise a

narrower range of international markets compared to the region
19
. While access to

markets is a key strength, leveraging and utilising this asset remains a

fundamental priority.
Stakeholder feedback seems to indicate that the County has some trouble

promoting itself as a location for innovative businesses. Unlike other high profile

areas such as Cambridge, Oxford or London, it is true that Hertfordshire has no

point of focus for promotion and branding. That said, it has a number of bright

“points of light” (e.g. GSK, Leavesden Studios). Consolidating these key assets

into a unified and brandable image can only help strengthen its profile and will

likely increase market interest. Given the current and future availability of

significant high profile sites and large office premises in key locations (Hatfield

Business Park), there is a compelling and relatively straight forward case for

pursuing a branding and marketing programme for the County. Linking and

leveraging existing high profile and well resourced brands such as Invest East

offer good potential synergies.
2.3.2
Key Success Factors
Skills and training
Hertfordshire’s claimant count was at 1.7% as of September 2002 and is one of

the lowest in the country. The Hertfordshire labour force will grow 6.7% by 2004

through labour force expansion and new job creation. Job growth in areas

requiring degree level qualifications (Level 4 Qualifications) is expected to

account for 57% of all new jobs within the county to 2006
20
. Job growth will

outpace labour force availability to 2004 further exacerbating current labour

shortages.
As a result, the skills and training aspects of the knowledge economy in

Hertfordshire are receiving a great deal of public and private sector attention. The

Hertfordshire Employment Strategy and associated action plan developed by the

Hertfordshire Prosperity Forum in 1999
21
echo feedback from stakeholders in this

study and the priorities and issues remain valid and relevant.
Business support programmes via the SBS’s Business Link programmes are a key

resource for the County. The ongoing programmes aimed at encouraging

19
Hertfordshire Local Economy Assessment, 2002
20
LSC, Overview Report on “Job Features Guide” Data, September 2002.
21
Hertfordshire Prosperity Forum, An Employment Strategy for Hertfordshire 1999.
Hertfordshire County Council
30
ANGLE Technology
Hertfordshire Knowledge Economy Action PlanAn innovation plan for Hertfordshire
FINAL Report DRAFT Report 20 June23 September 2003
Confidential
Not for distribution
innovation, linkages and entrepreneurship are an important strength and are a

valuable element of the overall action plan. DTI research indicates that there is a

discrepancy between the value/utility of these programmes for end-users and

delivery agencies. Applicable and relevant programmes based on end-user need

(e.g. additional resources) are required.
In general, while skills and training aspects of the Knowledge Chain are being

addressed, they do continue to be an ongoing concern and as a result have been

gauged as “moderate” on the value chain diagram due to the ongoing skills and

labour shortages. Further the general ICT skills gap is a persistent and ongoing

issue based on employer surveys and stakeholder interviews
22
.
For technology based businesses however there appears to be a significant skills

gap for highly specialised skills including engineering (civil, aerospace,

electronic), ICT technicians and bioscience/biomedical technicians. Meeting

these specialised technical skills will not likely be met by short-term oriented FE

programmes nor will it be viable for UH to develop specific curriculum offerings

to address them. Likely strategies will require a mix of industry and educational

sector cooperation as supported by the National Skills Strategy launched in July

2003. This is discussed further in the recommended actions.
The programme planning and budgetary policies of the LSC do not appear to be

providing the FE Colleges with the flexibility and forward planning provision

(currently year by year approvals) necessary to respond to industry with relevant

demand based programmes. The current education planning policy is limiting FE

Colleges ability to meet demand.
As pointed out in the 1999 Hertfordshire Employment Strategy, enhancing

“employability” is an important supply side contribution to the knowledge

economy particularly in a competitive environment like Hertfordshire.

Employability in this case is described as the process of ensuring an individual’s

skills remain valid in the competitive job market. Both the FE College network

and Business Link have ongoing programmes in this area however the use and

retention of individuals in these programmes is sometimes difficult. This is not

likely to be an issue that can be addressed as part of this process. The

Hertfordshire Learning Partnership should be the body to take this forward.
Funding
Funding and availability of finance seemed to be less of a constraint or barrier to

innovation in the County based on stakeholder feedback. Background research

and stakeholder interviews seemed to indicate that businesses with decent

commercial propositions in the County got the financing they require.
However, extensive demand based experience in this area throughout the UK

suggests that access to funding and finance is a consistent barrier to development.

Both the limited size and the dispersed nature of funding vehicles for early stage

22
Hertfordshire Local Economy Assessment, 2002.
Hertfordshire County Council
31
ANGLE Technology
Hertfordshire Knowledge Economy Action PlanAn innovation plan for Hertfordshire
FINAL Report DRAFT Report 20 June23 September 2003
Confidential
Not for distribution
business has historically been a big issue. In particular, the “Funding Gap”

between seed capital and venture capital investment (typically £250k-£2M) is a

real concern particularly given the currently poor venture capital market.
The fact that this particular study did not include large scale interviews with

SMEs and start-ups may explain this difference in perceptions, however, it has

been assumed based on considerable experience in this area that the funding gap

and access to finance is still a barrier to innovation for early stage companies in

Hertfordshire.
The scale and scope of the EEDA Venture Capital fund is uncertain at this stage.

The fund has been diluted somewhat from its original allocation however it is

expected to be an important, albeit limited, source of finance for early stage

businesses. Its relevance and availability is yet to be determined.
The strength of ties to the investment community is unknown. However, Business

Link is developing the Equity Link programme and offers a “Fit 4 Finance”

initiative aimed at improving access to VCs and readiness for finance. London

provides a considerable resource for access to venture capital for County

businesses and links with the City should be part of these initiatives.
Infrastructure
Hertfordshire County in general has significant and contentious infrastructure

issues and these are likely to be the most significant barriers to progressing the

innovation plan. The Hertfordshire County Structure Plan (currently under

revision) is the vehicle for addressing the key issues such as accommodation

availability and affordability, development sustainability, east-west transport

linkages and ICT infrastructure. While these issues are paramount and overriding

considerations to this project, the focus here remains on the infrastructure needs

for
enabling
innovative knowledge based business with the caveat that these

needs will be part of the overall structure plan.
The key issue for Hertfordshire County is the lack of provision of small flexible

business units in a consolidated and entrepreneurial commercial environment and

the importance of the public sector’s role as a champion for these developments.

The high value of commercial real estate has meant that developers are

maximising return through the provision of box style and large scale commercial

office space offerings. As a result, small, innovation centre style developments

are a relative rarity in the County (Table 2)
23
and they have largely been driven by

public sector groups and HEIs. Any further developments in this area will require

some element of public sector intervention.
23
Only includes facilities specifically catering to knowledge and technology based SMEs and start-ups. Managed

workspace and facilities such as the WENTA Centre in Watford and the STANTA Centre in St. Albans that are

for low value added business creation activities are not included in this definition.
Hertfordshire County Council
32
ANGLE Technology
Hertfordshire Knowledge Economy Action PlanAn innovation plan for Hertfordshire
FINAL Report DRAFT Report 20 June23 September 2003
Confidential
Not for distribution
Table
2
: Current innovation and incubation oriented facilities in Hertfordshire
Name
Location
Size
Status
UH Innovation Centre
Hatfield
9,000 sq/ft
50-60% let, near

completion. No incubation

space. Large adjoining lab

space.
Hertfordshire Business

Incubation Centre

(HBIC) Enterprise Hub
Stevenage
20,000 sq/ft+

office/workshop mix
Existing building, being

redeveloped (2004). Full

occupancy currently but

includes non-tech

businesses– high interest

looking to expand.
It is important to note that it is not the availability of office space in the County

that is the issue rather it is the
suitability
of space. There is over 3m sq/ft of

available office space in a variety of large office space locations (>5,000 sqft).

However, according to the Hertfordshire Future commercial database, the

majority of demand for space is for <2,000 sqft. Significant differences between

the supply of facilities and the demand persist in the County.
Firm demand estimates for space are not available. Rough and out of date

demand estimates of between 200-800K sq/ft for technology based businesses

were projected for specific areas of the County particularly for the M25, Hemel

Hempstead and Three Cherry Trees Lane Key Employment Site and recent work

is underway to confirm the level of demand
24
. Current project work on refining

this level of demand is ongoing via the Specialised Technological Activities

initiative however it is important to emphasise that understanding the specific type

of demand is critical to providing
appropriate
space (i.e. lab/office or

office/workshop mix) for small technology based business.
Recent evidence for the type of demand can be seen at the Hertfordshire Business

Incubation Centre (HBIC), a pilot for EEDAs regional Enterprise Hubs. Demand

for their small office and workshop units far outstrips supply to the point where

non-technology based businesses currently in the facility will be relocated to make

way for incoming tenants. This centre is to be developed to provide a further

20,000 sq/ft however it is expected that even this space provision will be quickly

let and more will be needed.
Appropriate
and
suitable
space for early stage knowledge based businesses is

likely to include the provision of a mix of office and workshop space comparable

to Table 3 below. As the table illustrates, Hertfordshire is poorly represented in

the Start-up, Incubation and Post-incubation (or Grow-on) space provision. Start-
up companies and early stage companies have few options open to them and are

forced to either put their plans on hold, look elsewhere or remain unconsolidated.
24
SQW & Hertfordshire County Council, Specialised Technological Activities planning. Ongoing.
Hertfordshire County Council
33
ANGLE Technology
Hertfordshire Knowledge Economy Action PlanAn innovation plan for Hertfordshire
FINAL Report DRAFT Report 20 June23 September 2003
Confidential
Not for distribution
It is important to note that the provision of space is not the only important

element. The provision of
relevant business support services and resources
to

help businesses identify and pursue funding, develop new products, technologies

and markets is critically important.
Table
3
: Space and service provision requirements typical of small business development cycle
25
40+
13
-
40
4
-
12
1
-
3
Staff
SPECIFIC /
UNIQUE
BROAD / BASIC
HANDS
-
OFF /
FACILITATION
HANDS
-
ON /
MANAGEMENT
Purpose Built
>10,000 sq.ft
Accelerator
Tech
-
enabled Shell
<4,000 sq.ft
Incubator/Hub
Fitted
-
out
<1,000 sq.ft
Virtual office /
Gateway/
Hatchery
<200 sq.ft
Facilities
Trading
2nd round VC, Angel
Seed, VC, Angel
Out of pocket
Funding
Outskirts
Science park,
inn
ovation centre,
Contiguous to
research base
Close to founder
Location
Trade linkages
Limited specialised
support
Full range of
business support
Early planning
support
Services
Mature business
Post
-
incubation
(3
-
7 yrs)
Incubation
(1
-
3 yrs)
Start
-
up
(0
-
1 yrs)
Key Business
Requirements
40+
13
-
40
4
-
12
1
-
3
Staff
SPECIFIC /
UNIQUE
BROAD / BASIC
HANDS
-
OFF /
FACILITATION
HANDS
-
ON /
MANAGEMENT
Purpose Built
>10,000 sq.ft
Accelerator
Tech
-
enabled Shell
<4,000 sq.ft
Incubator/Hub
Fitted
-
out
<1,000 sq.ft
Virtual office /
Gateway/
Hatchery
<200 sq.ft
Facilities
Trading
2nd round VC, Angel
Seed, VC, Angel
Out of pocket
Funding
Outskirts
Science park,
inn
ovation centre,
Contiguous to
research base
Close to founder
Location
Trade linkages
Limited specialised
support
Full range of
business support
Early planning
support
Services
Mature business
Post
-
incubation
(3
-
7 yrs)
Incubation
(1
-
3 yrs)
Start
-
up
(0
-
1 yrs)
Key Business
Requirements
COMPANY NEEDS
SUPPORT REQUIREMENTS
Through EEDA’s planned Enterprise Hub network there seems to be scope for

adding new facilities in the southwest corner of the county and possibly one other

area provided the appropriate partners and business model are in place.

Embracing these developments and maximising their scope and impact for the

County is a key component for meeting the space requirements for early stage

companies.
As a major science and technology focal point, the County does not have a major

Science Park. New high profile developments including Hatfield Aerodrome are

essentially business parks with little emphasis on research or technology transfer

and they are particularly not suited for small technology based companies. Future

and immediate opportunities do exist to address this shortfall however.
The BRE facility in Garston has 15 technology based businesses on site and

receives visits from over 200 companies on-site a day. It is the closest existing

facility in the county to a “Science Park” and BRE has expressed interest in re-
branding and repositioning its facility to promote it as such. They also wish to

work directly with the County to this end.
Also, recent development initiatives at the Three Cherry Trees Lane Key

Employment Site offer future opportunities for this style of high profile

development as does the Leavesden Studios Key Employment Site. Agreeing

development principles between developers and Local Planning Authorities

inevitably is a protracted process on larger development sites and this planning

25
ANGLE Technology Ltd.
Incubation Planning and Feasibility Programme
2001
Hertfordshire County Council
34
ANGLE Technology
Hertfordshire Knowledge Economy Action PlanAn innovation plan for Hertfordshire
FINAL Report DRAFT Report 20 June23 September 2003
Confidential
Not for distribution
process is limiting the provision of suitable space on these sites. Negotiations on

these sites are ongoing.
Ensuring appropriate space on these limited and critical employment sites is a top

priority for the county if they are to ensure a diversified and knowledge based

economy in the county. A commercially viable proposition that will encourage

developers to partner with the County to deliver these provisions is available and

should form part of the negotiations process.
Government policy and strategy
This Knowledge Economy Action Plan exists within a complex web of interlinked

national, regional and local economic development strategies. As an important

element in the Knowledge Chain, current government technology development

and innovation strategy initiatives should underpin and provide the means by

which key innovation projects can be delivered.
EEDAs Regional Economic Strategy (RES, 2001) and the Hertfordshire County

Economic Development Strategy (2000) are the key policy guidance documents

for this innovation plan and provide a strong support network and environment

within which to deal with the necessary business issues and needs. However,

there are a multitude of ongoing projects and initiatives currently in progress

which are part of these strategies and whose results are as yet unknown. Many of

these projects will have a bearing on this Plan and their results will need to be

incorporated at some point in time (e.g. Regional Enterprise Hub Management

Programme).
Future DTI strategies aimed at innovation within existing businesses will impact

the direction and scope of available resources to support existing companies.

Innovation plans aimed at moving companies up the supply chain and for creating

innovation within the supply chain should be coordinated with this initiative and it

will likely provide a possible source of finance.
Although key strategic planning documents are in place, on the ground delivery

and implementation, particularly at the regional level is perceived to be somewhat

fragmented and disorganised. EEDA’s relatively early stage of development has

meant there are a number of communications and coordination gaps between the

region and the county. Further, there is some historic disharmony between the

County, the Region and Hertfordshire’s stakeholders that along with the lack of

communication enhances the feeling of alienation from the region.
Coordination and communication with neighbouring counties including Luton,

Bedfordshire, Buckinghamshire, Essex and neighbouring boroughs in London

such as Enfield exists at an informal level only. Opportunities to work together on

infrastructure issues exist but seem to be under-utilised.
Stakeholder feedback indicates that co-ordination and communication between the

County Economic Development Plans and the requirements of the local planning

Hertfordshire County Council
35
ANGLE Technology
Hertfordshire Knowledge Economy Action PlanAn innovation plan for Hertfordshire
FINAL Report DRAFT Report 20 June23 September 2003
Confidential
Not for distribution
authorities is weak. The economic development visions for the County are not

translating on the ground. For example, Key Employment Sites are running into

planning hurdles in getting the appropriate mix of property offerings for small

technology based firms on the sites. Also, Rothamsted was recently refused

planning permission by local planning authorities for their high potential

Bioincubator facility. Local “NIMBY” planning is a reality for most high

potential sites particularly in affluent areas. In the UK this is not an uncommon

state of affairs but it leads to endless frustrations in the business community and is

almost impossible to explain to the managements of overseas based companies.
Finally, while government policies and economic development frameworks have

been based on solid feedback from the business community, maintaining the

relevance of key strategies and monitoring their implementation success for

businesses will continue to be an important part of the Knowledge Chain.
2.4
Summary of key Knowledge Chain issues and gaps
Research Base

Strong R&D research base but connections and linkages locally are

somewhat limited;

Current research & development capacity – existing baseline information

on the quantity, quality and type of R&D activity in the County is outdated

(i.e. Howell 1995). Up to date information could be a useful promotional

tool and could provide insights into the changes and trends affecting the

County;

Local linkages – somewhat limited local linkages between companies

within and immediately adjacent to the County;

RTO development – significant research base with key interest in playing a

larger role in County and Regional development. Ability to capitalise on

this strength is limited by local planning and economic development

discordance;

The London Knowledge Base – as a key source of potential research and

technology oriented businesses London is an underexploited resource on

the County’s doorstep;

International Research Facilities – international presence is significant

although R&D facilities are underrepresented.
Research and technical linkages

Local linkages – local linkages to the research base appear to be

underdeveloped compared with the stronger inter-regional, national and

international linkages;
Hertfordshire County Council
36
ANGLE Technology
Hertfordshire Knowledge Economy Action PlanAn innovation plan for Hertfordshire
FINAL Report DRAFT Report 20 June23 September 2003
Confidential
Not for distribution

Links to neighbours – existing linkages between neighbouring knowledge

bases and development initiatives (e.g. Luton Innovation Centre, Cranfield

Innovation Centre, Essex, select London Boroughs such as Enfield (Innova

Science Park)) will need to be nurtured, developed and reinforced;

Spin-out and licensing activity links were relatively low in the county and

although the HEI research base presents few options to this end, the

corporate research and RTO base presents significant opportunities;

Equipment and testing linkages – the county has considerable resources to

this end which are under-promoted and relatively unknown both locally,

regionally and nationally (e.g. UH one of the largest wind tunnel testing

facilities in the UK);

Formal “hardwired” networks – fragmented research and knowledge base

hinders promotional potential and physical interaction of companies;

R&D as a sector in its own right – R&D operations in the various sectors

are a significant contributor with common issues and they are not formally

linked up.
End-users

International market capture – while access to markets is strong companies

are narrowly focused on a limited range of international markets;

Hertfordshire image – lack of cohesive image and brand. Difficult to

promote to end-user markets.
Skills and training

Labour and skills shortages increasing – reliance on importing staff

increases pressure on transport networks;

Specialised and ICT skills gap remain – historic skills gaps that have been

occurring and which have been addressed in via past strategic action plans

remain;

Industry and education provider cooperation – specialised skills

development not likely viable for education providers. Hands-on industry

involvement with relevant training needed;

Business support – relevance and scope of business support services need

to be based on the end-user;

Educational provider flexibility – the ability of the skills and training

providers, particularly the FE Colleges, to be responsive to skills demands

from business is limited by inflexible and short-term LSC planning policy;

Existing initiatives performance – 1999 strategies for workforce

development are still valid. Performance on priority action items for

Hertfordshire County Council
37
ANGLE Technology
Hertfordshire Knowledge Economy Action PlanAn innovation plan for Hertfordshire
FINAL Report DRAFT Report 20 June23 September 2003
Confidential
Not for distribution
increasing knowledge and technology based jobs unknown and should be

quantified.
Funding

Funding gap – UK PLC wide phenomenon will likely persist and may

impact the development of commercially viable early stage businesses in

the county;

Regional Venture Capital Fund – delayed and downsized, scope unknown;

Access to VC Networks in London – ongoing venture capital network

development by Business Link must capitalise on access to the main UK

finance market in London.
Infrastructure

County Structure Plan – overriding tool for dealing with key infrastructure

requirements. Responsibility may pass to Regional Development

Agencies in the future. The plan must include appropriate space provision;

Suitable space provision – Current market offerings do not meet the needs

of small start-up businesses. There is lack of innovation and incubation

style facilities for the County;

No “Real” Science Park in Hertfordshire – existing facilities including

Hatfield Aerodrome are essentially business parks with little emphasis on

research or technology transfer. Particularly not suited for small

technology based companies;

Key sites and Science Parks – county currently lacks a high profile science

park style research base. Key employment sites offer a significant

opportunity to develop a science and technology focused development;

Pressure on existing innovation space from financial necessity– e.g. UH

50% full potentially with several units left for companies – Potential to

subsidise or manage space to keep from being taken out of the resource

pool by non-start-ups with EEDA? – Flexible letting policy is critical for

publicly support facilities.
Government Policy and Strategy

Strategic coordination – while economic development strategies are strong,

coordination and communication between both the regional and county

strategy is limited;

Programme coordination – given the number of emerging funded

programmes aimed at innovation (e.g. DTI supply chain innovation

Hertfordshire County Council
38
ANGLE Technology
Hertfordshire Knowledge Economy Action PlanAn innovation plan for Hertfordshire
FINAL Report DRAFT Report 20 June23 September 2003
Confidential
Not for distribution
programme) coordination and awareness of available sources of funding

for companies will be paramount;

Influential projects in progress – there are a number of key projects at both

the regional and national level that are currently underway which will

impact on this innovation plan;

Communication – the regional government is relatively distant and under

resourced. Little contact, communication or direct connection as of yet to

Hertfordshire;