Episode 2 in the September 26, 2014 issue of Sensors Weekly Newsletter began the in-depth analysis of 14 topics in the MEMS Commercialization Report Card market research project while Episode 2 offered analysis of Design for Manufacturing and Marketing. This week, Episode 3 provides a thorough assessment of Technology Clusters. Here we focus efforts on only one topic since the results of the MEMS Commercialization Report Card from a verbatim perspective have influenced me to want to provide more background on this topic and some of the current clusters and their activities. By critically assessing the verbatims on this topic, it was quite evident there needs to be some "education" on this topic.
First here are the grades: 2013 Grade=C+, 2012 Grade= C+, Change=0, S.D.=1.8 (based on 85 respondent inputs). Next, refer to figure 1 below.
Fig. 1: Cluster Development has maintained its C+ grade from 2012 and is perhaps the most misunderstood and/or not understood topic of the entire 14 Report Card topics based on analysis of the verbatims.
Since I began tracking this topic with the 2003 Report Card, facilitated as a result of a strategic marketing research study I conducted on technology clusters for the State of Michigan's Economic Development Corporation, the grades have varied between C+ to B+ with the 2013 grade being C+ (Fig. 1) and a standard deviation of 1.38 over the 11 years of tracking the grades. I believe these mediocre grades provided by the market research participants recently exist due to the lack of newly-formed clusters in the past couple of years and also based on the lack continuing level of support of existing clusters, especially in the US. Additionally, based on the 85 verbatim inputs that I received as part of this study, it is quite apparent to me that the concept of clusters is not well known. Micro and Nano clusters are a significant entity in the European Community to the point where they have initiated a "Cluster of Clusters", meaning that they brought together several technology clusters from various parts of the EU and formed this "cluster of clusters".
The concept of clusters has existed for centuries. As early as 500 BC the Greek city-state of Miletus existed as a cluster in manufacturing wool products. Industrial clusters have existed since the beginning of the industrial revolution. Technology clusters first become prominent in the Route 128 area of Boston in the early 1940s to support the US military involvement in World War II. Then, Silicon Valley saw its first technology cluster develop to support the meteoric growth of the semiconductor industry in the early 1960s. The informal creation and development of these clusters is a major catalyst in the successful economic development of these regions and the technologies produced therein.
Clusters are defined as geographical concentrations of firms, supplies and related industries and specialized institutions that occur in a particular field in a nation, state, city or region. Cluster formation has been proven to provide organizations within the cluster with competitive advantages in the market as a result of enhanced cost-efficiencies and faster time to market. I've taken some of Harvard Business School's cluster guru Professor Michael Porter's concepts and created my own cluster model specific to micro and nanotechnology.
The benefits that emanate from clusters for their participants are many. Porter has written much on how clusters create competitive advantage for its participants. This emanates from the ability of the cluster participants to share information on both a formal and, more importantly, informal basis. The relationship of the intellectual property (IP) core, the technical university, provides a major source of highly trained technologists to support existing or spun-out organizations. The cluster also provides clean-room and other technology and manufacturing facilities with their well-trained operators for capital limited organizations to use on an as-needed basis, thereby eliminating large overhead.
Cluster Necessary Elements
Micro and nano-system clusters require ingredients similar to other clusters, i.e., intellectual property creation, not only as ideas and patents, but also through people's experience and know-how. I equate this to a three-legged stool. All of these elements need to exist at sufficient levels for the creation of a successful cluster or the stool collapses.
Intellectual Property Creation
Most high technology clusters have formed around centers of intellectual property, either through federally-funded laboratories and/or through research universities. Intellectual Property is defined here in a more general and all-inclusive sense that goes beyond patents. General knowledge and experience of design and processes is of great value and can be transferred with less encumbrance than that associated with patents. People who have worked for these institutions who are gifted with great ideas and an entrepreneurial spirit spin out of these engagements and seek opportunities for greater fame and fortune. These people wish to not move themselves and their family but rather to take advantage of the business and social infrastructure within what they've developed. Therefore, they set up their businesses in close proximity to their former employer. Without the people and their talents and treasures, there can be no creation of new businesses, which are the basis of the cluster.
Cluster Funding Sources
The world of capital formation has no physical boundaries as investment firms are always seeking the best risk/reward tradeoff opportunities. However, there is a human tendency to want to work as close to home to maximize work efficiency. Therefore, there is a tendency for investment firms to have offices in close proximity to cluster areas.
A case in point: Silicon Valley and Boston. In the case of the earlier cluster, Boston, investments were made out of New York City, the US financial capital. The second phase was to set up offices in the Boston areas and for Boston-based financial institutions to create venture arms.
In the case of Silicon Valley, again earlier investors came from the outside, e.g., Boston and New York, before a significant financial infrastructure was set up locally in Northern California. Funding sources need not be physically located with a cluster but it certainly helps matters if they do. Also, although the informal clusters of Route 128 and Silicon Valley have received no direct federal funds other than military contracts from the Department of Defense, most microsystems clusters receive either direct investments in research and/or facilities or favorable tax considerations from their local governments.
A critical requirement to achieve competitive advantage is the existence of a human resources, plant, equipment, and services infrastructure. The availability of these resources can reduce time to market and product development costs.
The local availability of well-trained legal, financial and business professionals in addition to technicians, machine operators, designers, and a broad spectrum of consultants is critical. In the case of capital intensive industries like the semiconductor and microsystems industries, the availability of research and development facilities and prototyping facilities is of significant importance. Typically, new companies tend to be fabless and need the support of a well-run and fully equipped development manufacturing/foundry facility.
Large-scale production facilities are typically not necessary. The close proximity of technicians, service personnel, applications engineers, and raw materials, gases, chemicals, etc., is critical to support these facilities. These requirements have been somewhat mitigated as a result of the recent popularity of microsystems foundries.
Many Micro and nano-systems clusters have been formed in Europe, North America, and Asia. Micro and nano-systems clusters require many of the same ingredients as other technology based clusters. We focus our comments here on several of the more successful clusters that are established. I believe that the increasing popularity of the funding of these new entities and continued funding of earlier formed clusters is due to the past success of the clusters to create jobs and the resulting creation of new businesses in the region which translated into tax revenues for the region and country.
Dortmund, Germany: The first microsystems cluster, created in 1989 was fueled by intellectual property from the Technical University at Dortmund and funded by the regional German government. This cluster exists to this day being most successful in its support developing major microsystems players including Steag Microparts (acquired by Boeringer Mannheim in 2004) who has developed nebulizers for asthma patients, and H.L. Planar (acquired by Measurement Specialties in 2005) who has a broad portfolio of MST technologies and is currently in large volume production of tilt sensors for automotive applications. Dortmund is also the location of IVAM, which was founded in 1995 and is a leading microsystems development trade organization that supports this cluster as well as other organizations having currently over 300 members in over 20 countries. IVAM provides a communications bridge between suppliers and users of high tech products and services in need of education and guidance in the fields of microtechnology, nanotechnology and advanced materials.
University of Washington Microfabrication Facility: Originally founded in 1997 under the Washington Technology Center (WTC) and transferred to the University of Washington in 2011, the MFF has had 55 companies and 31 research groups associated with it and using its fabrication facilities. Its mission plan is to nurture the creation and retention of jobs in Washington-based companies by increasing the effectiveness and abilities of those companies to adapt and deploy technology that leverages the investment made in research at the state universities, i.e. University of Washington, Washington State, Eastern, Western, and Central Washington Universities. Companies served to date include Micronics, Microvision, Combimatrix, Lumera (now part of Gigoptix), Trace Detect, Therus, EOSpace, Ionographics, Silicon Designs, Blue View Technologies, New Light Industries, MesoSystems, and Neah Power. These and other companies represent the creation of over 400 new jobs. To date, $1.6M has been invested by the state of Washington, and the facility has extended its reach to many US- and Canadian–based organizations. The goal of its multi-phased development program has been to formulate and create a network of interested parties including companies, academic institutions, and government agencies who are committed to exploring technology development and commercialization of micro- and nano-technology.
State of Michigan: The criterion of intellectual property in the cluster is aptly satisfied with the excellent work on micro- and nano-systems at the University of Michigan (through its Wireless Integrated Microsystems and Sensors Center) and, Michigan State, Michigan Tech and Wayne State University. ISSYS was the first commercial Microtechnology company to be founded out of University of Michigan. Other notable startups include Handylab (bioMEMS), Sensicore (bioMEMS), ePack (MEMS packaging), and Tessera (RF MEMS). Intellectual property for all of the new startups was licensed from the University of Michigan. R&D fabrication for the companies has primarily been supported by the University of Michigan through its former laboratories and through recently completed Laurie Nanomanufacturing Facility at its Ann Arbor campus. Wayne State University in Detroit also has a significant research and development facility at its Smart Sensors and Integrated Microsystems Center and has spawned a number of startups in this field focusing primarily on biomed applications.
Microtech Sudwest/Baden-Wurttemberg/Freiburg Germany: The Microtech Sudwest Cluster (MST BW) has IMTEK and its Department of Microsystems Engineering under the direction of Prof. Roland Zengerle, founded in 1995 as a core source for IP. The cluster is comprised of 350 members including 12 higher education institutes with 40 microsystems professorships and 18 other research institutes boasting over 1,200 scientific employees. Its industrial members include Bosch, Daimler and Roche Diagnosis with 57% (200) of the participants being SMEs and 7% (25) being startups. Roughly one in seven patents granted worldwide in the microsystems field comes from this cluster region. In January 2010, the German Federal Ministry of Education and Research selected MST BW as one of five winners of the highly prestigious Leading Edge Cluster Competition resulting in an 80-million Euros grant award.
- Minatec-Grenoble France: This cluster was officially created in 2006 with its framework agreement established in 2002 when I first visited there and met with the Minatec Director Jean-Claude Gilbert who currently holds this position. During my most recent visit in March 2011, the fields that were literally inhabited by cows during my first visit have turned into a gigantic complex of three research organizations, three research universities, and 20 companies, all on the sprawling 20-hectare campus that provides over 70,000 square meters of workspace and over 10,000 square meters of cleanrooms. The cluster has 2,400 researchers, 1,200 students, and 600 industrial and technology transfer specialists. It has an operating budget exceeding 300-million Euros. Some of the many companies spun out of this cluster include STMicroelectronics, Tronics, Memscap, E2v, Sofradir, Ulis, MicroOled, Movea, and, the newcomer, ISORG.
Numerous other micro and nanosystems clusters include:
- Silicon Valley, Northern California
- Greater Boston, Massachusetts
- Four Corner States (New Mexico, Arizona, Colorado, Nevada) (US)
- Albany, New York (US)
- Edmonton, Canada
- Enchede, The Netherlands
- Flanders, Belgium
- Goethenburg, Sweden
- Neuchatel, Switzerland
- Northwest (Liverpool/Manchester), UK
- Seoul, Korea (Kyunggi Technopack)
- Hinshu , Taiwan
- Elyria,Ohio (US)
Pertinent verbatims selected from a total of 85:
- Not sure what this means.
- This is closely related to the fact that MEMS is not a hot field for funding. Clusters may develop but including academia in it may prove difficult, unless we find new niches for MEMS.
- Europe is getting better, US is not.
- This is a concept that is well beyond the vast majority of management and decision makers, yet the power is unmistakable.
- Europe still leads in this area. But very little is happening in the US.
- Some clusters are forming but we need more.
- Clusters largely intact and growing slowly worldwide.
- Haven't heard any new news on this for MEMS. Other industries are benefiting. The MEMS Industry needs to lobby more.
- Efforts in Ohio and New York showing some traction.
Micro and nano-systems clusters have proven themselves to be effective facilitators to the successful commercialization of these MEMS technologies. They literally have created hundreds of companies worldwide and thousands of high skill and high paying jobs. Their economic development growth and enhanced competitive advantage objectives have more than been met.
We foresee the continuation of support for both existing micro and nano-systems clusters in the future and the creation of additional clusters to help facilitate the successful commercialization of these technologies worldwide. Furthermore, I believe that the concept of clusters is not as well known as it is thoroughly understood by the MEMS community, as a verbatim stated "not sure what this means" and to use a verbatim on the topic which sums up the situation: "this is a topic that is beyond the vast majority of management and decision makers, yet the power is unmistakable." Now give that person a cigar.
About the Author
Roger H. Grace is president of Roger Grace Associates (Naples, FL) which he founded in 1982 as a marketing consultancy serving the sensor, MEMS, IC and capital equipment markets. He holds the B.S.E.E. and M.S.E.E. (as a Raytheon Company Fellow) degrees from Northeastern University where he was awarded the Engineering Alumni of the Year Award in 2004. He was a visiting lecturer at the University of California at Berkeley College of Engineering from 1990 to 2004. He can be contacted via email at [email protected].
R. Grace, Barriers to the Successful Commercialization of MEMS: The 2011 MEMS Industry Report Card, Micromanufacturing/MEMS/Nano Live USA Proceedings, March 8, 2012