The Eindhoven Region, south of Amsterdam, is a very successful place. Officially designated in Dutch as Samenverkingsverband Regio Eindhoven (SRE), the region has long been the industrial center of Holland, with 730,000 inhabitants and a workforce of 400,000. Its major cities are Eindhoven (pop. 212,000), Helmond (88,000) and Veldhoven (43,000).
Eindhoven generates €24 billion of GDP and €55 billion in exports, one-quarter of the Dutch total. It absorbs 36% of all private Dutch R&D spending and is home to globally recognized companies including Philips, the healthcare, lighting and consumer product giant, and ASML, maker of photolithography equipment for the production of silicon chips. Eighteen percent of all Dutch automotive jobs are in Eindhoven, and nine percent of all life technology employment. The Eindhoven University of Technology, with more than 7,000 students, is considered one of the top three research universities in Europe. The High Tech Campus Eindhoven founded by Philips houses over 80 companies employing another 7,000 residents.
Yet the region faces major challenges, and its ability to rise to them will determine whether its success can continue.
Eindhoven is a manufacturing center in a high-cost country. By focusing on producing high-value, technology-based products, it is in competition with fast-growing manufacturing centers in nations with much lower costs. Many are striving mightily to perfect the complex manufacturing capabilities that have made Eindhoven successful, which creates unceasing pressure for the region to boost productivity. Foreign competitors are also seeking to raise their own game in R&D and knowledge creation, and Eindhoven, which generates 50% of all Dutch patents, needs to stay ahead of the curve.
At the same time, however, Eindhoven is saddled with Europe’s demographics, in which a low birth rate and aging population is reducing the regional labor force. To win the battle for the talent that provides its competitive advantage, the region must make itself economically and socially attractive to knowledge workers from around the world.
The Brainport Model
Eindhoven’s answer to these challenges is a public-private partnership called Brainport Development (www.brainport.nl). Its members include employers, research institutes, the Chamber of Commerce, the SRE, leading universities and the governments of the region’s three largest cities. A small professional staff meets regularly with stakeholders to identify their strengths, needs and objectives, then looks for opportunities for them to collaborate on business, social or cultural goals. Any stakeholder of Brainport has the opportunity to create new initiatives or partner with other stakeholders. Their work is based on a strategic plan called Brainport Navigator 2013 (with a 2020 version in the works funded in part by the Dutch government). It calls for focusing on five key areas for development: life technologies, automotive, high-tech systems, design and food & nutrition.
It sounds simple enough, and little different from strategies and collaboration groups at work in cities and regions around the globe. It could even be derided as a “talking shop” in which endless meetings take the place of action. But that would be a mistake.
Take healthcare. The region already has about 825 businesses active in the health sector, which employ 17,000 people. To drive further growth, Brainport created a project called Brainport Health Innovation (BHI). Its goals are to foster increased well-being for the elderly and chronically ill, to reduce healthcare costs and increase productivity, and to do so while generating economic opportunities for the region.
The total cost of regional healthcare is forecast to rise from €17bn now to €25bn by 2020, in large part because of the need for 100,000 new healthcare workers to meet demand. BHI’s conservative goal is to improve productivity by 1 percent per year, which would reduce demand for new personnel by 25,000 and save about €750 million. Meanwhile, BHI’s work expects to generate 150 new companies employing at least 10,000 people. It is a conscious effort to reduce employment demand in one area in order to increase it in another, where the region as a whole can benefit more.
BHI has involved hospitals, insurance companies, technology manufacturers local government and individual patients to design and implement realistic technology solutions that offer a profitable operating model. In the works are the Living Lab eHealth project, in which aging people test new services and products introduced by the BHI participants, including remote monitoring and diagnosis over broadband.
A Care Circles project aims to more efficiently share capacity among providers for home care of the elderly and disabled. The longer such patients can be cared for at home, the happier they generally are and the lower the costs of their care. The nighttime hours represent the biggest challenge to home care. Through Care Circles, all calls go to a central dispatch, which matches the location to the partner organization closes to the patient. The result is better quality and availability of care at a lower total cost.
Track Record in Collaboration
Some partnering, some pre-commercial testing, some cost-sharing – at first glance, the BHI projects sound worthy but hardly enough to light up the night. But that is the Brainport method. Bring together the players from business, government, institutions and citizens groups. Figure out specific projects on which they can cooperate for clear mutual benefit. Then manage the projects carefully until they produce results and gain the ability to become self-sustaining.
The range of Brainport projects is extraordinarily wide. The Automative Technology Center involves 125 organizations in collaborative projects that, from 2005 to 2008, generated €4.5m in new investment. The start-up of new high-tech systems and ICT companies is stimulated by incubators with names like Catalyst, Beta II and the Device Process Building.
Design Connection Brainport manages a wide range of projects in design and technology, in order to encourage the industrial design expertise that is as essential as information technology to all of the SRE’s industrial clusters.
Paradigit is a systems integrator founded in a university dormitory that built a fast-growing business producing build-to-order PCs and name-brand systems. Through membership in Brainport, the company identified an opportunity that turned into a program called SKOOL. This program pro-vides over 800 Dutch primary schools with a combination of hardware and software that vastly simplifies the integration of information technology into education. Students receive SKOOL laptops from Paradigit. When students start up the laptops for the first time, the systems automatically connect to the SKOOL server, download all of the applications specified for that school and configure themselves. SKOOL provides remote management of all servers and PCs at its client schools, as well as an online interface for students and teachers to communicate and share content securely. So "bullet-proof" are the hardware and software that SKOOL's technical support department consists of just three people.
The Taskforce Technology, Education and Employment program (abbreviated TTOA in Dutch) focuses on promoting the interest of young people in engineering, attracting foreign knowledge workers, career counseling and lifelong learning. A project called Technific has created an award-winning game called Medical Investigators, in which the student is an investigator accused of committing a crime. His goal is to prove his innocence by collecting evidence throughout the game using an electron microscope, infrared equipment and DNA testing. Each completed experiment helps the students advance to the next level. Another 1,500 kids take part in BrainTrigger, in which they work with local companies to develop innovative solutions in the fields of sustainability, mobility, safety and health.
Responding to Crisis
As the financial crisis gripped the region, TTOA funded research projects for more than 2,000 workers who faced layoffs in order to preserve their skills until the economy recovered. An additional €670,000 went to retraining personnel within businesses. A Dutch entrepreneurs organization identified Helmond, the SRE’s second largest city, as offering the Netherland’s best response to economic crisis.
TTOA also goes on the road to international career fairs in the US, Europe, Turkey, India and China to promote opportunities in the Eindhoven region. Its Expatguideholland.com Web site provides information and services to smooth the path of highly-skilled immigrants and their families.
Information and communications technologies are also brought to bear on creating a quality of life that attracts and retains the digitally literate. Digital City Eindhoven attracts a half-million visitors monthly to a Web-based social media tool that encourages residents to learn more about the region. A WMO Portal involves 20 organizations in answering resident questions on health care, social services and housing. Bestuuronline puts political meetings in the city of Eindhoven online, while Virtual Helmond involves residents of that city in decision-making about planning, building designs and street furniture.
An online game called SenseOfTheCity allows anyone with a GPS-equipped mobile phone to create a personal map of the city and identify what they like best and least. A 12-day festival called STRP, which attracts 225,000 visitors, features music, film, live performances, interactive art, light art and robotics. GLOW is another festival that celebrates Eindhoven's history as home to the Phillips lighting division. The center of the city of Eindhoven is transformed for 10 days into an open-air museum of design in light, much of it interactive, for 65,000 visitors.
The Enabling Infrastructure
The most long-standing innovation projects of Brainport and the SRE concern broadband. From 1999 to 2005, the Dutch government funded a pilot program called Kenniswijk (“Knowledge City”) to subsidize installation of fiber to the home. The program ended after connecting 15,000 homes, but it was followed by a classic Brainport project: Be-linked, which brought together companies, institutions, social organizations, governments and residents to promote broadband deployment and applications. Over the ensuing years, it has stimulated a remarkable range of activity.
A commercial provider, Reggefiber, has aggressively expanded in municipalities where at least 40% of residents commit to taking service. It is now serving more than 230,000 households. Eight industrial parks, backed by loan guarantees from the city of Eindhoven, have installed their own fiber networks. The City of Eindhoven has offered its 100+ schools service on a fiber network at low fixed costs, as well as help in using it streamline management processes and improve teaching outcomes.
A nonprofit Eindhoven Fiber eXchange Foundation, established by the city of Eindhoven and the Eindhoven University of Technology, interconnects service providers throughout the region to let them make the most efficient use of assets. Its members include a broadband consortium of 21 social organizations, which share their own networks through the exchange. In 2010, eight of the region’s 21 municipalities set up a €2.4m fund to create a virtual regional network made up of interconnected service providers.
In the small village of Neunen, two residents succesfullly lobbied the Dutch government to capitalize deployment of a fiber network, called OnsNet, which achieved a 97% penetration within 3 months of start-up. That remarkable goal was achieved through a cooperative ownership model. Property owners were asked to pay for the "last-mile" connection from the core network into their buildings. The case for citizens to put their own money into operating the coop was simple: they were investing in a home improvement that would increase the value of their property.
The citizens of Nuenen own 95% of OnsNet and join technical and operational executives at meetings to identify new ideas and solve current problems. And the pace of innovation has been unceasing. An online exercise and weight-loss program, with a "virtual fitness coach," is popular. A "Window on Nuenen" channel provides access to video cameras strategically positioned around town, which allows the housebound elderly to stay connected to the life of the community. The OnsNet community TV service trains locals in the use of video equipment and makes it simple to upload video clips. Clubs and societies post video of their meetings and events. A local church offers live broadcasts of baptisms and weddings on a paid basis. Parents and grandparents chat over video with children and grandchildren far away.
OnsNet is an example of something Brainport calls “open innovation.” The Brainport nonprofit terms itself is an open innovation platform, in which many players pursue their own interests in collaboration with others, with Brainport acting as instigator, facilitator, negotiator and traffic cop.
The model is simple to explain in theory but hard to carry out in practice. World markets are changing fast and demographics are presenting challenges to growth all around the globe. The hope of the Eindhoven region is that years of practicing open innovation, on a foundation of information and communications technology, provide an advantage that competitors will find it hard to match.
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