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Social Capital & Green

Innovation

Philip Cooke

Centre for Advanced Studies, Cardiff University & School of Development, Aalborg University

Presented at OECD Workshop on ‘Partnerships for Development & Diffusion of Innovation’

Social Capital: Definition

• The exercise of social norms of reciprocity,

trust and exchange for political or

economic purposes among networks of

social actors

• In business, involving other firms and

social, political or economic institutions or

organisations for mutual benefit

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Social Capital: Mechanisms

• Embeddedness (Relational & Structural)

• Autonomy (Capabilities – e.g. Penrose)

• Integrity (e.g. Professional)

• Integration (e.g. Community)

• Linkage (e.g. Networks)

• Synergy (e.g. Governance)

• Trust

Social Capital & SME Performance (Cooke &

Clifton, Regional Studies 39, 1065-1078) (2005):

Key Research Findings

• Using postal survey and interviews

• For 100 firms x 3 areas per 12 UK regions

• Innovative SMEs high users of Social Cap.

• :Such SC in global and local networks

• :Collaborate more than non-innovators

• :Trust collaborators more

• True in high & low GDP performance areas

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1. Green Innovation, Green Clusters & Green

Governance: Key Analytical & Policy IssuesWe are faced with Climate Change through Global Warming

from Greenhouse Gases

Peak oil has probably been reached although oil & other fossil fuels will continue to be exploited but at high consumption cost $100+ per barrel

What are innovators doing to contribute to reductions in human contributions to Climate Change & Transition to Non-Fossil Fuels? In what ways are Social Capital Partnerships Helping?

From an evolutionary perspective, we recently see some regions able to multiply their cluster „species‟ according to „related variety‟ theory (Jacobian clusters, after Jane Jacobs)

Related variety theory postulates growth from „knowledge spillovers‟ among SMEs with high horizontal „absorptive capacity‟ between sub-industries

Elsewhere few or zero, possibly too specialised, clusters may be found.

How far does Social Capital Theory explain cluster multiplication and, contrariwise, lack of cluster forming energy?

What other contributions does Clustering make to reductions in CO² and other greenhouse gas emissions?

An Example of Complex Related Variety

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Cleantech %-Share of Total VC Investments in 2006

2. California‟s Jacobian Clusters

Cluster Legend:

Clean Tech

Biotechnology

Wireless

ICT

Agro-Food

Wine

Film

Click for

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Micro-elektronica

Nanotechnologie

Telematica

Communicatie

E-security

Mechatronica

Feed – food

- health

Life

sciences

L-SEC

DSP-Valley

Leuven.Inc

Jacobian Clusters Involving Related Variety

with „Platform Policy‟ support: KU Leuven

Cleantech?

Related Variety „Platform‟ Support• Knowledge centres (e.g. IMEC)

• Entrepreneurs (many „academic‟; IPR assigned)

• Seed Money, (e.g. from KU Leuven Inc.; business angels)

• Capital markets (strong links to Bourse, AIM, NASDAQ etc.)

• Infrastructure (3 Science Parks with incubation)

• Role Models („academic entrepreneurs‟)

• Cluster Policy (Flanders & Local support)

• Presence of international companies (e.g. interaction with Philips, Centocor, MedVision, Autocyte & [agro-food] Cargill)

• Networks within and among sub-clusters, also abroad

• Government (national funds supporting research & innovation)

• Quality of Life (university town, historic and green ambience, Brussels & international airport nearby)

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3. Social Capital & Green

Innovation in Wales

• In the Social Capital & SME Performance research

Wales was one part of UK where business social capital

(8/12)ranked much higher than SME competitiveness

(11/12)

• „Bridging‟ social capital institutions play an important

role; (former) WDA („Taste of Wales’); Welsh

Government (Green Agenda); LEADER schemes; EU

programmes/projects; Co-operative agricultural supply;

Distinctive Language & Culture; History of Trade Union

solidarity, etc, etc.

• These combine as conventions, institutions and

organizations that embed certain kinds of „partnership

governance‟ with economic development potential

Environmental Innovation in Wales:

30 Solar Energy Equipment Manufacturers

LlaniSolar

G24i

Sharp Solar, Dulas; PV Systems;

Corus Colours, ICP Solar, Jantec

Solar, IQE

PHOTOVOLTAICS CLUSTER

ICP Solar

MicaulSolar

Clear Sky

ThermonaxSundance Renewables

Royce Renewables

PJB Systems

Solar Housing

Solarfit

KDUK

Sunset Solar

SB Alternative Energy

Bright Light Solar

VE Heating

Eco Energy Systems

Solarfit

InterSolar

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IGER – Novel Agricultural Products Research: Miscanthus & SugarGrass

Germinal

Holdings, Bristol

Germinal

Holdings, Lincoln

IGER

IGER

SW Seed Ltd.

Cambridge

Genus,

Hampshire

Alltech, USA,

Ireland &Worldwide

BPI Agri,

London

R&D

SAs

Research

Collaborations

Sanofi-Aventis

Guildford

Advanta,

Lincoln

Unilever,

Cheshire

Genencor, Copenhagen

Alltech

Merial

Biotal, Cardiff Tesco

South Counties Foods

Dengie Crops

Dow Elanco

Monsanto Cultech, Port Talbot

Prya

Kemira, Helsinki

Molecular

Nature

Spinout

Germinal

Holdings N.I (2),

RoI

Biocomposite CentreBangor Wales

Swansea University

Swansea Institute of HE

Technium Sustainable Technologies

IGER

CARM Technologies

WAG

Cardiff University National Non-Food Crop Centre

DTI

Cambridge Biopolymers ltd, USA

DEFRA

Plant Fibre

Technology ltd

Estech Europe

Hydro Polymers ltd, Norway

Infineum UK ltd

Warwick Manufacturing Group

Warwick International ltd, (Sequa, USA)

Aston Uni. Polymer Processing

& Performance ResearchKnauf Insulation

Dairy Crest Ingredients ltd

Cambridge Biopolymers ltd

Springdale Crop Synergies ltd

Hyperlast ltd, UK & Polland

Research Centres Research Collaborations (customers)

Bangor University

NEWI, Wrexham

Spin-offsFounding

Bodies

EU

Springdale Group

BBSRC

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Green Cluster Entrepreneurship: N. Wales

Madryn.co.uk

GWINLLAN

PADRIG

LLANBADRIG

VINEYARD

Hemp: 8

Farms

Car Door Panels

e.g. Mercedes

Future Farmers of Wales

140 FarmsBiofuels (e.g. BML), Functional Foods

& Organics

Omega 3 Oils: Avocado,

Camelina, Olive & Hemp

Culinary Oils

HERBS FROM

WALES

4. Two Newly Researched „Cleantech‟ Energy

„Cluster Species‟ in Denmark

• Wind Turbines

• Manufacturers (evolve from single, small to sea wind farms at scale)

• Materials (base, towers, blades, galvanisers)

• Gearboxes (DK then DE)

• Hydraulics, Pneumatics

• Coolers, De-vibrators

• Sensors, Controllers, Measurers

• Machining, Flanges, Rings, Fasteners Heat storage & back-up heating

• Research

• Services, software

• Sea & land logistics

• Solar Thermal

• Solar Collectors

• Glazed (Roofs) – (Flat Plate Collectors)

• Glass

• Heat absorbent copper/aluminium

• Coatings, paint

• Pipes welded to absorber plate

– Vacuum Collectors• Parallel glass tubes

• Absorber

• Transfer pipes

• Vacuum is insulator

• Unglazed (Swimming Pools) Long

tubes• Synthetic absorbent material

• Hydraulics in pool filtration system

• Heat storage & back-up heating

• Plumbing & Installation

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The North Central Jutland Wind Turbine Cluster

Source: Danish Wind Industry Association Data, 2007

Jutland‟s Solar Thermal Cluster

Source: ESTIF Data

Danfoss A/S

Grundfos Sensor

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Other North Jutland Jacobian Clusters• Aalborg-Aarhus – Solar Thermal Energy

• Salling – Furniture

• Ikast – Textiles, Fashion Clothing

• Vaarst – Pigmeat

• Barritskov – Årstiderne Organic Food Network (30,000 households per week- organic food boxes)

• Nr. Aalborg – Insulated Pipework

• Nr. Skagen – Fish Processing Equipment

• Why do California, Jutland & Wales Have „Cluster Species‟ Multiplication? Possible Elements -

• Social Capital

• Collective Entrepreneurship

• Technological Branching

• Peripherality (Copenhagen is favoured core)

• Infant Industry Subsidy

• Innovation System – DTI, Universities, Local, now Regional Funding

• A high degree of „related variety‟

5. Some 40% of Freight in UK is Food

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Redundant Trade

6. Agro-food producer clusters: S. Germany

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Stockholm‟s local food cluster network

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The Dogme Organic Project, Copenhagen

• Dogme means „rule‟

• The rule is 75 % of the foodstuff used in the

kitchens of the municipalities and canteens must

be organic by 2008. This means:

• Day-care centres

• 24-hour care centres

• Canteens

• Residential homes

• Schools

The rural-urban relational space

• Copenhagen city council spends €25 million ($30 million) on food annually

• Local procurement creates an attractive market for organic farmers

• Accordingly this builds a stable foundation for further organic development

• Politically, it shows the City of Copenhagen talks and acts seriously about being a “locomotive” for sustainable urban (& rural) development

• Aim is to make food organic within the existing food budgets. This if work routines and food habits are changed together

• Policy for post-school education of kitchen personnel

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Results: Copenhagen

• Reorganization to organic food has been accomplished

• 410 of the 517 day-care centres in the City of

Copenhagen have been reorganised

• 35 24-hour care centres reorganised by end of 2006

equivalent of 75% now organic

• 40 out of the city‟s total of 53 canteens and community

centres reorganised – 76% organic end-2006

• In 45 out of 65 of the city‟s total of 65 primary and lower-

secondary schools it is now possible to buy a healthy

lunch from school booths

• The lunch served in these schools is at least 60 %

organic

City of Ishøj

• a suburb of 21,000 to the south of Copenhagen

• 1997 creates its environmental action plan: resource consumption, quality of drinking water, and business

• 1999 environmentally friendly public purchases invoked

• 2001 Waste and waste water project in cooperation with local housing associations

• 2001 environmental award is launched

• 2002 all nurseries and integrated nurseries/kindergartens serve 100% organic food

• 2003 the organic food project embraces others city institutions

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‟Food & Climate,‟ Malmø, Sweden

• Based on free meals (as usual in

Sweden)

• Linking with curriculum

• Aiming at 75% organic

• Linking with climate effects of food

consumption and sustainability

• Based on local school food preparation

http://www.malmo.se/skolautbildning/skolmat/ekomatiskolan.4.d2883b1066e2aee8a80003130.html

Conclusions

• Social Capital & (Green) Innovation go hand-in-hand

• Climate Change & „Peak Oil‟ ($100 barrel)

• Innovators and Investors Rush to „Cleantech‟

• Cleantech has Related Variety & Knowledge Spillovers („Business‟ Social Capital) to ICT, Biotech, Nanotech, & Materials – Cluster Multiplication

• „Platform Policies‟ Require Horizontal, not only Vertical Governance Models

• „Food Kilometres/Miles‟ & „Redundant Trade‟ Problems

• Green Innovation, Green Clusters & Green Governance are the New „Grand Policy Challenge‟