PRESIDENT’S CORNER

RENDEZVOUS OF THE ‘THIRD KIND’:TRIPLE HELIX ORIGINS AND FUTURE POSSIBILITIES

HENRY ETZKOWITZ
HENRY ETZKOWITZ

President
Triple Helix Association

International Triple Helix Institute Palo Alto (www.triplehelix.net)

henry.etzkowitz@triplehelixassociation.org

 
The Triple Helix, representing university-industry-government interactions, was mooted in a 1993 International Workshop on University-Industry Relations at UNAM’s Centro Para la Innovacion Technologica in Mexico City. Impelled by Mexican reality where university-industry interactions and the institutions themselves operated within a governmental framework, the image also fits laissez-faire societies where the role of government in university-industry interactions could also be discerned.. This article discusses the sources of the Triple Helix model in a government led response to economic downturn in early twentieth century New England that recognized universities as a key regional actor and suggests how the model may play a role in response to the contemporary economic crisis.

During the energy crisis of the late 1970’s, I was invited to be an organizational consultant to a California start-up developing solar cell technology. I interviewed scientists in the firm. They did not fit the previous models of academic or corporate scientist. They said, ‘we don’t write articles, we go for patents’. On the other hand, they were not part of a large corporate bureaucracy, tailoring their scientific objectives to a firm’s goals. Indeed, these physicists, having made money from stock options in the semiconductor industry, were among the funders of the firm and had a say in its course and direction.

I began to think of them as entrepreneurial scientists. The academic consultants to the firm from the chemistry department at UCLA didn’t appear to be any less entrepreneurial, seeking funds from various governmental and industry sources to support their research groups. Academics fund raising for their research had been defined as academic entrepreneurship (Vollmer, 1962). I defined the phenomenon of scientists’ involvement in start-ups as entrepreneurial science and obtained research funds from the National Science Foundation to conduct case studies and interview academic scientists and administrators, both favorable and opposed to the commercialization of research.

To present the results, I submitted a paper to a session at the American Sociological Association annual meetings organized by Joseph Ben David, the distinguished sociologist and historian of science at the University of Chicago and Hebrew University. He wrote a letter saying, “Your paper is fine. I accept it. But how can you study university-industry relations without looking at the history of MIT”? I had to agree. I sought funds from the National Endowment for the Humanities, and from a base at the History of Science Department at Harvard, went to the MIT archives. During my stay at Harvard, a colleague asked, “Why are you always going to MIT; you are at Harvard!” One answer was in President Compton’s papers in the archives where I found correspondence with the Governors of the six New England States about the New England Council.

MIT and the Rise of Entrepreneurial Science

The Council, founded in the 1920s by the Governors of the six New England states, brought together university, industry, and government leaders, to address the economic decline of the region from the early twentieth century. The unique concentration of universities in the region included, not only Harvard and MIT, but many other schools like Boston University, Boston College and Northeastern University that have since attained academic distinction. It was impossible to organize a New England regional leadership group without including its universities; they were too significant a feature of the region’s institutional landscape to ignore.

The social properties of the triad, with its ‘tertius gaudens’ mediation and other triadic properties transformed a simple public- private partnership into a ‘Triple Helix’ of university-industry- government interactions. Indeed, the Council’s Board of Directors divided virtually equally into governmental, business, and academic members, sealing the triadic deal!

Involving academia in interactions to foster economic and social development introduced a novel element that is increasingly the basis of economic and social development strategy in both advanced industrial and developing societies. The New England Council came to this conclusion early in the twentieth century. Starting from a focus on ‘New Products’ that might be developed by existing firms, the members of the Council gradually came to consider the broader context for innovation. They learned to study existing strategies for their applicability to the region before committing resources to them. Thus, they were less likely to waste resources on a fruitless strategy, in contrast to regions that commit to the fashionable strategy of the day, without first analysing and addressing gaps that would have to be filled to increase the chance of success. The Council realized that the creation of support structures to facilitate entrepreneurship from academia was the basis for producing spin-off firms as a systematic activity. Moreover, links to an eco-system outside the university, conducive to the establishment and growth of new ventures, and overlaps with the university in significant ways, is the key to creating a critical mass of such firms.

MIT President Karl Compton was part of a circle of the school’s administrators that envisioned a ‘Research Row’ of science-based firms in Cambridge, Massachusetts, extending from the MIT campus along the banks of the Charles River. As a science advisor to President Roosevelt, Compton had advocated using science to create new economic activity to cure the great depression. However, this idea had found scant support in an era when science, as a source of labour-saving inventions, was often believed to be the cause of the depression. The Science Advisory Committee in which Compton was a member failed to agree on a strategy and the report was left unpublished. Back home, the President of MIT received a more respectful hearing. The Council was open to a new approach after trying and failing to implement existing innovation strategies. These included attracting branch plants of existing firms and raising the technological level of local small and medium sized firms that, in this case, were found to be too far behind the technological curve to be amenable to renewal. Compton tailored his knowledge-based economic development proposal to the experience of New England, generalizing the sporadic creation of firms from academic research at MIT and Harvard from the late nineteenth century, initially in industrial consulting and scientific instrumentation, and then radio in the 1920’s (Shimshoni, 1970).

Intrigued by the idea, the Council began an exploration process that today would be called a SWOT analysis, an examination of strengths, weaknesses, opportunities, and threats. The strength of the region with respect to the envisioned strategy was its universities and significant financial resources from previous industrial and commercial success. The weakness was the relative lack of support structures and seed financing for new venture creation. The discussion process among the Triple Helix actors culminated in the invention of the venture capital firm to fill the gap. The American Research and Development Corporation (ARD), a novel firm, organized as a public corporation with pro- bono aims for regional development, was structured to take a long- term perspective. Indeed it was more than a decade before it had its first significant success in founding a firm from a research project to develop an aircraft simulator left behind from the World War II R&D effort but that had finally run out of government support.

In the mentoring model that was created, ‘… Doriot [the Harvard Business School Professor with entrepreneurial experience, who directed the first venture capital firm] compensated for Olsen’s (founder of Digital Equipment Corporation (DEC)] lack of business experience by raising funds and sending directors to DEC’s board meeting, providing a ground for Olsen to have experience in managerial work’ (Tiaki and Ito, 2014). In this early instance, the venture firm provided an eco-system for firm growth, playing a much broader role than financing and advice, the narrower remit of most contemporary venture firms. The mini-computer industry that grew from this initial effort failed to move to the next generation of personal computers and disappeared. However, what was left behind was an infrastructure for knowledge-based firm formation, government agencies, and venture capital firms that were available to respond to the potential of biotechnology.

The Triple Helix in Nucleo

This is how the New England Council, led by Compton, came up with the idea of a new organization offering seed capital and business advice. Compton and his colleagues expanded upon a long -standing notion that the solution to the region’s economic ills could come from the development of ‘new products’. By expanding the idea from new products within exiting firms to new products within new firms emanating from the university, they created a pathway from the university to industry, relying on academia rather than industry as the source of new technologies.

The concept became viable as large-scale government funded research at MIT and other universities, during the Second World War, greatly expanded the base for new technology creation within academia. Without this support-base from government, the concept of university originated firms would have been a very limited one. Indeed, ARD’s initial success came from a government supported research project, ongoing since the Second World War to develop an aircraft simulator that produced the mini-computer as a byproduct. This was the technology that ARD helped its academic developers make into the Digital Equipment Corporation, the original firm in the Massachusetts mini-computer industry, and the source of the Route 128 technology conurbation that emerged during the 1960’s as an inspirational icon.

However, many observers, including those in Boston, often attributed the region’s success to peripheral features like the Route 128 ring road that provided a location with easy access for the new firms. Indeed, by encouraging their movement away from their source in the region’s universities, the suburban road, by isolating the firms from academia, may have contributed to their failure to intake the next generation of new computing ideas that led to the invention of the personal computer, superseding the Route 128 cluster.

Generalization of the Model

Originating in Boston to assist firm formation from MIT, the venture capital industry spread to northern California, where it played a key role in facilitating firm formation from Stanford. The early twentieth century transfer of the Poulsen arc technology from Denmark that was the basis for the proto Silicon Valley Federal Telegraph company has become a global steady stream as Silicon Valley’s gravitational field intensifies (Lecuyer, 2006). An entrepreneurial teaching dynamic had already been institutionalized based on interaction with local technology firms, often founded by Stanford graduates to transfer existing technology to the region.

Stanford University’s interaction with Silicon Valley exemplifies the changing relationship of an originating university to a knowledge- based industry that has grown beyond its source. Once the Valley began to produce new firms from succeeding generations of firms that had originated from the university, the relationship to Stanford became more distant. Firms like Hewlett-Packard, an early 1940’s start-up had grown up and came to be viewed as irrelevant by academics in a new era of start-ups, according to the firm’s director of university relations, who began an interview saying, “You may think we have a close relationship to Stanford, but we don’t anymore”. Of course, he was working to redress that gap, visiting the Office of Technology Licensing and exploring collaborative R&D projects with the university’s administration. Despite continuing philanthropic donations and collaborative relations with existing industries, through organizations like the Center for Integrative Systems, a university-industry-government collaboration to renew the semi-conductor industry in response to Japanese competition in the 1970’s, the academic sphere seemed less salient in comparison to a burgeoning industrial sector (Kenney, 2000). Nevertheless, Stanford continues to be a source of new firms, like Google and others that have not yet attained iconic status.

Half of present-day Stanford’s undergraduate student body majors in computer science, many of them attracted by the discipline’s entrepreneurial or at least employment potential. A student government initiated start-up mentoring project, the StartX Accelerator, which the university now supports, serves as a portal to Silicon Valley. Gordon Moore, exponent of the eponymous law of exponential increase in computing power and skeptic of Stanford’s economic impact on Silicon Valley, nevertheless, agrees that its effect is considerable, with the university sourcing firms that generated half the Valley’s revenue between 1988-1996 (Moore and Davis, 2001). Is it any wonder that other universities and regions wish to emulate MIT and Stanford, Boston, and Silicon Valley, despite warnings that these innovation icons are unique and ill suited for replication?

MIT and Stanford are world-renowned entrepreneurial universities, models for other schools who seek to follow in their footsteps and become engines of economic development. Firms founded by MIT graduates generated 10% of the Massachusetts economy and 5% of the state’s jobs and had an even greater economic impact on California as well as significant impact on the rest of the country. Commenting on the 1997 Federal Reserve Bank of Boston report that announced these findings, then MIT President, Charles M Vest said, “About 90 percent of these companies have been founded in the past fifty years, in the period of the great research partnership between the federal government and the research universities”. The role of federal research funding is a sometimes under- appreciated element of the US Triple Helix in comparison to the entrepreneurs who take off from this base.

Stanford made this alliance with government a key element of its development strategy during the early post-war, transforming itself from a relatively modest academic institution, into a world-class university (Lowen, 1997). Replicating the MIT strategy of attracting large-scale federal funding, Stanford creating the Stanford Research Institute and clusters of faculty in key research areas with conjoint theoretical and commercial potential. Thus, the unintended consequence of the war-time organization of federally funded research at MIT became a conscious academic and regional development strategy, producing the contemporary phenomenon of Silicon Valley (Etzkowitz, 2013).

Fifty Silicon Valleys?

Making an entrepreneurial university is not simply a matter of encouraging students and faculty to take risks and form startups or even the establishment of a venture capital industry. The great US entrepreneurial universities rest on a national policy of funding the creation of new technology platforms in areas relating to defense and health. This is the source of the search and biotechnology industries, among others. Since the US is limited for ideological reasons to a relatively limited set of technological areas, the way is open for others to take initiatives in a plethora of fields, for example, solar photovoltaics and desalination of water, with macroscopic implications. China has taken up the challenge but Europe lags behind. A recent seminar at the Brodolini Foundation in Rome presented Europe’s IT intentions as a third mover strategy: using IT to raise the level of small and medium sized firms and existing industries. This was not even a second mover strategy of carving out protected spaces for clones of Google, like Russia’s Yandox and China’s Baidu.

Europe should raise its game! It has the advantage of ability to raise enormous financial resources by borrowing at low interest rates (Etzkowitz and Etzkowitz, 2014), and the R&D collaboration infrastructure at the European Union level. What it lacks is a strategy to focus resources and a selection mechanism, like the US DARPA program, to choose future potential advanced platforms for development. With high level universities in transition to an entrepreneurial model and a strong Civil Society, Europe has the ingredients that have produced Boston and Silicon Valley as well as rising innovation regions in Boulder, Colorado, San Diego, California, New York, and elsewhere. In the next decades, the world will have fifty Silicon Valleys, scattered across the US, China, India, Brazil, Russia, and elsewhere. Indeed, some of these future locations of innovation are already emerging. Europe should abandon austerity policies and create its rightful share.

REFERENCES

Etzkowitz, H, Ed. (2013) Silicon Valley: Global Model or Unique Anomaly. Special Issue. Social Science Information December; 52 (4).

Etzkowitz, H and Etzkowitz, A. (2014) Europe of the Future and the Future of Europe: the Innovation/Austerity Choice. THA Helice Magazine, 4(1) 2015, reprinted in Industry and Higher Education, April 2015.

Kenney, M, Ed. (2000) Understanding Silicon Valley: The Anatomy of an Entrepreneurial Region, Stanford University Press.

Lecuyer, C. (2006) Making Silicon Valley. Cambridge: MIT Press.

Lowen, R. (1997) Creating the Cold War University: the Transformation of Stanford. Berkeley: University of California Press

Moore, G and Davis, K. (2001) Learning the Silicon Valley Way.
SIEPR Discussion Paper 00-45, Stanford Institute for Economic Policy Research, July 15, 2001, p11.

Shimshoni, D. (1970) The Mobile Scientist in the American Instrument Industry. Minerva. 8 (1), Jan.

Tiaki, S and Ito, C. (2014) University Start-Up or Technology Transfer; Japan US comparison on commercialization of new technology at the dawn of the computer age. www.lib.kobe- u.ac.jp/handle kernel/9002474.

Vollmer, H. (1962) A Preliminary Investigation and Analysis of the Role of Scientists in Research Organizations. Menlo Park: Stanford Research Institute.