THE ROLE OF UNIVERSITIES IN URBAN POLES: A CASE STUDY OF ENSCHEDE, NETHERLANDS

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1 THE ROLE OF UNIVERSITIES IN URBAN POLES: A CASE STUDY OF ENSCHEDE, NETHERLANDS This report has been produced by the URBACT II network RUnUP following a study visit to Enschede in the Netherlands between the 24th and 25th of March Enschede is a municipality and a city in the eastern Netherlands in the province of Overijssel and in the Twente region. The city is a former centre of textile production. When this industry left the area for cheaper production centres in South-East Asia, Enschede became one of the poorest municipalities in the Netherlands. The biggest challenge of the city is to prevent higher educated (wealthy) citizens from moving to the west (Randstad). Decades of renovation work in the city centre have been carried out with the goal of making Enschede more attractive to this group. The Universiteit Twente (University of Twente), a university with mostly technical studies, is located in Enschede. It's one of the three technical universities in the Netherlands (besides Delft University of Technology and Eindhoven University of Technology). The Universiteit Twente is also the only large campus university in the Netherlands. Figure 1: The University of Twente

2 STUDY VISIT KEY QUESTIONS A visit to the Enschede exploring the role of universities and wider development of enterprise and entrepreneurship, in particularly the activities of the University of Twente, inevitably raises a range of critical questions: What has driven the University of Twente to develop its entrepreneurial capacity and profile? What are the core elements of the University of Twente model that enable it to be referenced as an entrepreneurial university Can the Entrepreneurial University concepts of the University of Twente be replicated elsewhere? How has the successful development of the University of Twente impacted upon the local communities of Enschede and Hengelo? What has been the involvement of local Government in Enschede and Hengelo in shaping economic development policy and the strategic direction and approach of the University? What are the new developments of the University of Twente and how will these support the further development of Enschede and Hengelo and enable these local communities to address the issues of the economic crisis? The aim of this document is to explore the activities of the University of Twente and the local communities of Enschede, Hengelo and the wider province and region that support the enhancement of the university role within these communities. Figure 2: Images of the University of Twente According to the law in the Netherlands each university has three different tasks; education, research and service to the community. This last aspect includes knowledge and technology transfer. The process of knowledge and technology transfer should bridge the gap between fundamental research (the core activity of a university and research institutes), applied research (the research that is tailor-made for industry) and society. In practice, the transfer of knowledge obtained by research is easier with the larger companies that can afford to invest in new knowledge and technology and in most cases have a researchlaboratory of their own, than it is to small and medium sized enterprises (SMEs).

3 Alongside this at a National level a key aim of the Netherlands Innovation Platform is a focus on entrepreneurship. Specifically this includes the focus on increasing entrepreneurship and enhancing the business climate with the aim of increasing the share of fast-growing companies, increasing the number of innovative start-ups, enhancing the attitude towards entrepreneurship and increasing interaction between SMEs and knowledge based institutions. STAGE 1: FROM TEXTILES TO UNIVERSITY CITY Historically Enschede was a large production centre for textiles, originally as a cottage industry, but since the start of the 19th century on an industrial scale, especially in the manufacture of bombazijn (a mixture of cotton and linen) proved an export success. In the 1970s textile production in Enschede came to a halt due to fierce competition, mainly from the Far East. This had a profound effect on the city population. Enschede became one of the poorest municipalities in the Netherlands and (de facto) went bankrupt. Today unemployment in the City of Enschede is between 14 and 15% but has limited employment opportunities and as a result an ambition of creating a further 10,000 new jobs over the next decade. The University was founded in 1961 as the Technische Hogeschool Twente, the Netherlands third higher vocational institute of technology later to become a university (the other two being Delft and Eindhoven). The Dutch government s decision to locate the new institute in Enschede, the main city of Twente, was based on the rich industrial heritage of the city. Another important consideration was the fact that the local economy needed a boost to compensate for the dwindling textile industry. Figure 3: Images of Kennispark and Twente Business and Science Park The University of Twente has a world class research programme. In the applied sciences, the emphasis is on nanotechnology, process technology, engineering, information & communication technology,

4 and the biomedical sciences. UT research programmes are organised in six research institutes: Institute for Nanotechnology (MESA+) BioMedical Technological Institute (BMTI) Centre for Telematics and Information technology (CTIT) Institute for Behavioural Research (IBR) Institute for Governance Studies (IGS) Institute of Mechanics, Processes and Control Twente (IMPACT). Alongside this the university has the following departments and faculties Behavioural Sciences Management and Governance Engineering Technology Electrical Engineering, Mathematics and Computer Science Science and Technology International Institute for Geo-Information Science and Earth Observation (ITC) The University of Twente places great emphasis on the useful application of knowledge in society. Patents, life-long learning programmes, and spin-off companies testify to this commitment, as does the university's intensive involvement in research programmes that enhance knowledge infrastructure in the Netherlands. So far it has produced 600 spin-off companies; more than any other Dutch university. STAGE 2: FROM GOVERNMENT INTERVENTION TO KNOWLEDGE INTENSIVE ENTREPRENEURSHIP The University of Twente see "entrepreneurs as a bridge between university and industry". Their Entrepreneurial University journey began in 1980 with an initial study of graduate enterprise which identified that 50 people with 43 businesses were enterprise active while 80% of staff were supportive of enterprise development. As a result the overwhelming consensus was that within the university "people who develop new companies should be supported". As a result the Temporary Entrepreneurial Positions (TOP) programme was started at the University of Twente when Prof. H. van den Kroonenberg began to support new entrepreneurs in his own research group. Since this was successful, (financial) support was sought and found in the Ministry of Economic Affairs in When Van den Kroonenberg became Rector of the University he supported the TOP-Programme and other entrepreneurial activities of the University of Twente. The Liaison Group was involved in the TOP-Programme from the start. It became supported by the Board of the University and received financial support, first from Dutch Ministry of Economic Affairs and later from the European Social Fund. The TOP-Programme recognises that there is a gap between fundamental research and the application of knowledge in

5 surrounding society and that entrepreneurs with access to research groups and their knowledge and expertise and facilities are able to bridge that gap. This is reflected in the mission statement for TOP "To stimulate as many people as possible to create a company on the fields of knowledge of the University of Twente that have a good possibility to survive in the long-term". During the first year the knowledge-based company supported by TOP is located in the university. After the first year they have to move on (ideally to the Business and Technology Centre-BTC and when they have grown too big for the BTC, they should move to their own premises on the Business & Science Park). During one year knowledge-based firms can be on the TOP-Programme. Prerequisites for entering the TOP-Programme are having a business idea that matches with the interest of staff-members in one of the research-groups of the university and having a consistent business plan. On that basis the TOP coaching committee makes its decision on whether the entrepreneur is suitable for the programme. Figure 4: Spin-off Company formation at the University of Twente TOP strives to stimulate graduates and researchers to start their own knowledge- intensive company. Assistance in the incubation-phase is considered to be important. As the programme developed in the 1980s, the University offered an interest-free loan (up to 20,000 euro), office space and connection to a University research group. But also advice and training in preparing a business plan and working out management, marketing, and financing strategies. Of those going through the programme 80% have been graduates and researchers, 15% from other universities and 5% from industry. Entry in TOP is open for knowledge based companies, for entrepreneurs (no students) with a full time commitment with the support of a University research group and

6 appropriate business plan. On average 20 people are on the TOP programme at any one time The impact of TOP is clear and significant with the strong promotion of an entrepreneurial climate at the University of Twente with clear links and open doors to the university research groups and the creation of a network of companies who are active in the fields of knowledge linked to the university. In addition the programme has had a significant impact on regional economic development with 80% of businesses remaining in Twente providing in excess of 2800 jobs for highly educated people. The lessons learnt over 25 years are clear and significant. The value of the TOP process lies in the business planning but not in the plan as it will never be carried out. Similarly there is a requirement to never judge ideas but ensure alignment between ideas and the individual. And overall it is recognised that while TOP supported companies may grow slowly they grow sustainably. Figure 5: Business and Technology Centre BTC Twente While the TOP programme has been a core component in the positioning of the University of Twente as an Entrepreneurial University other significant developments have taken place to support the entrepreneurial positioning of the university. First is the creation of the Business and Technology Centre BTC Twente in BTC is an incubator for innovative technological companies providing accommodation facilities and business support.

7 Alongside this in 1989 was the creation of Technology Kring Twente (TKT) or Technology Circle Twente an active network of 180 high tech businesses in Twente with a particular focus on co-operation and exchange of information. members are often young, high tech innovation and product developing companies; technical businesses employing between 10 and 25 staff. They aim at new developments and in their role of providers of knowledge they form a link between Twente University and business. TKT's primary activities include; sharing knowledge; exchange of experience and expertise enhancing cooperation between members; supporting business development and enhancement of market profile and strengthening the position of the Twente region as a knowledge area. Additionally in 1989 was the development of the Twente Business and Science Park. The Business & Science Park (BSP) is a high value industrial park for knowledge intensive companies, businesses that specialise in services, as well as for the University of Twente that is directly adjacent the park. The BSP itself measures 40 hectares and is situated on the edge of Enschede, between the two largest cities of the region of Twente, Enschede and Hengelo. The successful BSP formula is based on its unique location, outstanding facilities, an intensive and active knowledge exchange, and an atmosphere that encourages mutual beneficial cooperation. The technical University of Twente (UT) plays an active role in the park through an intense cooperation with science companies, including facility and laboratory sharing and exchanges of personnel. The combination of university study, high tech knowledge-based industry, and business services generates both ideas and jobs and has proven to be a very strong magnet for like-minded companies and investors. Recognising the importance of its entrepreneurial university profile the University of Twente established the Dutch Institute for Knowledge Intensive Entrepreneurship (NIKOS) in Nikos organizes knowledge development and dissemination of knowledge intensive entrepreneurship. The business development department aims its support activities directly at entrepreneurial processes in the university (both students & researchers) and in the region (private people or SMEs), resulting in new start-up firms.

8 Figure 6: The activities of Nikos, The Dutch Institute for Knowledge Intensive Entrepreneurship Nikos consolidates the university s expertise and experience, from the Chairs for Innovative Entrepreneurship, Marketing, Strategic Management and International Management, in a professional academic team, qualified to do research, teach, offer consultancy & training and business development support in these fields. They work for and with students, firms in and outside the region, policymakers and partners at the University of Twente. STAGE 3: FROM ENTREPRENEURIAL PROGRAMMES TO INNOVATION PLATFORM AND TRIPLE HELIX CO-OPERATION The innovation and enterprise development work of the University of Twente has clearly impacted on the region of Twente and its stakeholders. This can be seen in the development of the Twente Innovation Platform and Kennispark. The Twente Innovation Platform was formed on the initiative of the province of Overijssel. The Twente Innovation Platform (TIP) is represented by regional government, educational and research institutions and businesses. Worth 400m euro over 7 years with the aim of establishing 12,000 jobs in the Twente region the platform is aimed at supporting 5 clusters of activity, namely; construction, technology and health, safety and technology, food and materials & high-tech systems. Over 100m is allocated towards the development of business and research. Within the development of Enschede it is recognised that their is a gap in the economy of the area in terms of employment creation

9 opportunities. There is a particular identified need to create in excess of 800 start-up companies but the current enterprise systems supports small company development. This has resulted in the need to introduce a business support programme that is designed for high growth, high technology based businesses. That programme is Venture Lab Twente supporting 350 participants in 4 years, creating 200 SMEs with 30 SMEs creating in excess of 100 full time equivalent employees (FTE) and in total supporting 3000 direct and 6000 employment places. Venture lab Twente focuses on high technology and high growth based firms, from early phase to business realisation. This includes opportunity recognition, business model development, business plan development through to company start-up. Particular support is provided for building entrepreneurial competences, building an entrepreneurial team and worldwide networking. Figure 7: The Venture Lab Twente Value Creation Model VentureLab Twente provides a number of office facilities (free office space) with access to newly developed technologies, venture capitalists and relevant networks of (international) companies and scientists. There are four entry points to the VentureLab community which are specially designed to deliver services that suit the needs of all types of high-tech high potential entrepreneurs and ventures. VentureLab Training

10 This entry point covers the complete training programme of VentureLab Twente. An entrepreneur or their team will participate in a one year education Programme. The Programme starts three times a year for up to 40 new participants (February, May, and October). VentureLab Open Training Previewing what is expected within the training programme VentureLab Venture Class The Venture Class is a monthly organised public training and networking opportunity VentureLab Soft Landing In order to help high-tech high potential entrepreneurs and ventures from outside the Netherlands achieve a soft landing to the West-European markets, VentureLab offers them the support needed that will help them facing the challenges that are common while entering in foreign markets. While the Innovation Platform Twente is a significant development, of similar standing is the establishment and operation of Kennispark. Kennispark builds on the history of the University of Twente as an entrepreneurial university and is a joint development between the University, City of Enschede and Province of Overijssel. It has a key focus on the commercialisation of university knowledge (Kennis) alongside the stimulation of student entrepreneurship and local area development with a core agenda on commercialisation, innovation and entrepreneurship as a driving force in addressing the need to establish 10,000 new high-end jobs by In this context it is recognised that the university can't do it alone and that the city recognises the university is a key development partner. Kennispark is seen at the province level as serving provincial goals, by giving input in money and support as a donator and catalyst but with no long-term obligations. Meanwhile for the city the focus is on the need for jobs, area development and planning and support for infrastructure development. The University of Twente provides and supports knowledge and training, cooperation with commercial partners alongside its role as an entrepreneurial university. The partnership is linked through an affiliation contract who commit with each other for the realisation of the master plan. Kennispark in this context can be seen as 3 partners with 3 perspectives, with 3 languages all operating with their own complex structure. Kennispark delivers this through the operation of 3 key programme areas; Facilitating the starting and growing of businesses; stimulating innovation in existing companies and developing an inspiring area for innovative

11 businesses. Economic development and area development are mixed and from a partner perspective there are potentially different perspectives on what Kennispark is. In entrepreneurship development a particular focus is on awareness, education and training; business development; financing networks and incubator development. Alongside this support for innovation is strong with support for open innovation clusters based on research programmes; high technology facilities and facility sharing; access to knowledge through commercial and societal portals with a particular emphasis on thermoplastic composites, high technology factory (nano production), virtual reality and serious games, telemedicine and medical imaging. But as explained earlier Kennispark Twente is also an area based development activity which supports inward investment, a master plan for area development (200,000m 2 ), alongside building redevelopment and talent attraction and retention activities. This includes the redevelopment of a university building to provide a 50,000 Sq.m business incubator and the redevelopment of the road between the University Campus and Kennispark Location at a cost of 40m euro. Figure 8: Kennispark Area Development This work is based on a strong foundation as Kennispark is based on nearly 30 years of entrepreneurship support from the University of Twente. The area is the location of 335 companies of which 75% are

12 technology-based or innovation active and support 5549 jobs. As an innovation campus of national importance Kennispark support 40 new spin-off companies per year and is directly linked to the higher management of the University, City and province with linkages outside of existing structures. In addition the development of Kennispark will be supplemented by the inclusion of the Saxion University for Applied Sciences and Regional Development. Saxion University of Applied Sciences is one of the largest institutions of higher education in the Netherlands, with over 22,000 students with a particular focus on applied research knowledge centres in entrepreneurship and innovation, design and technology, health and technology, education, urban and environmental studies and hospitality business focussed on SME and society. The role of Saxion University is seen in supporting SMEs in comparison to the role of the University of Twente with its commercial focus. Saxion in this context is in a phase of awareness raising, strategy development and competence development with a particular focus as a Kennispark partner in inner city campus development and are seeking agreement with the city on the development of entrepreneurship within the city centre alongside its involvement in the Creative Incubator in Twente CONCLUDING REMARKS The enterprise and entrepreneurial development of the Twente region and in particular the City of Enschede has its origins in the 1980s development of entrepreneurial support for staff, graduates and students at the University of Twente. From the origins of the TOP programme the university has established for itself a strong profile leading to its status as an entrepreneurial university which has been reinforced by its activities and in 2001 the creation of NIKOS as the Dutch Institute of Entrepreneurship. The focus of the University of Twente has been clearly inside-out reflecting the commercialisation and university-industry linkage philosophy of the University. While Enschede can be seen very strongly as a university city with its night life and population of students from Saxion University and the University of Twente the engagement of the city and province authorities from the observations in the study visit with the development process around the economic perspective of the city has been limited. This is visibly driven through the Innovation Platform Twente, which is a regional initiative and also the engagement with Kennispark which itself has an area based development approach yet both initiatives have only been developed during the last decade and are managed through intermediary organisations rather than through engagement of the city and province authority directly.

13 An OECD report on Twente ( recognised a low skills base, brain drain, uneven development and high unemployment among issues for Twente. While performance in entrepreneurship and knowledge based activities in Enschede is strong there is a visible requirement (observed in the study visit) to reinforce the role of the city and the province in shaping the wider view of economic development and the role of universities in this context which may include to a larger extent the involvement of the Saxion University.