In 2019, in a San Francisco startup circle, I met Steven Hoffman, popularly known as the “Captain” in the Bay Area. While giving me his book, “Make Elephants Fly”, he said something to me that opened a whole avenue of research interest for me. He casually said that he is invited to meet a lot of political leaders and heads of states around the world who ask him this question: “How can we have a silicon valley in our country”? His answer invariably is “Silicon Valley is not a place, it’s a mindset”, he said.
Yes, "Silicon Valley" is often used to refer to the high-tech hub in the San Francisco Bay Area that is home to many tech companies and startups, but it can also be used more broadly to refer to the innovative and entrepreneurial culture that is prevalent in the tech industry. The term "Silicon Valley" was originally coined to describe the region because of the large number of silicon chip manufacturers that were based there, but it has come to represent much more than just the physical location.
This led me to the question of how Silicon Valley came about. What was the genesis of this mindset? Indeed, there is a lot of literature around it. Hoffman has his own explanation in his book, which points towards the diversity of people and their interest in things beyond work (a quality that Hoffman feels is missing in most of the entrepreneurs outside of Silicon Valley, especially in Asia). However, the explanation that has stuck with me the most is the “Triple Helix Model” which describes the structural forces which led to the development of the Silicon Valley and can lead to useful policy prescriptions for other such ecosystems.
Before we venture further into this discussion, a disclaimer is in order. As any good historian will explain, there are no formulas in history and each historical phenomenon emerges due to a unique pathway or combination of causal factors. Yet, it is desirable, to draw limited generalizations to learn from history. Even E.H. Carr, the author of the seminal book, “What is History?” tends to agree. If we weren’t able to compare contexts and draw lessons from history, it would hardly then be useful. So, I am going to go ahead and explain the occurrence of the Silicon Valley through a combination of factors explained in the triple helix model, and am going to go ahead and propose that after due tailoring for context, the triple helix model may have something useful for other countries looking to develop thriving entrepreneurial ecosystems such as the Silicon Valley.
(Apple Park, Cupertino; Photo by Carles Rabada on Unsplash)
The Triple Helix Model
The triple helix model is a conceptual framework that posits the necessity of collaboration and integration among the academic, industrial, and governmental sectors for the purpose of fostering innovation and propelling economic development. This model asserts that these three spheres are interdependent and should engage in ongoing dialogue and collaboration in order to create a fertile environment for innovation to thrive. Originally introduced in the 1990s, the triple helix model has been widely utilized in the analysis of various contexts, including regional development, technology transfer, and innovation policy.
The Triple Helix model suggests that in a knowledge-based society, the traditional boundaries between the public and private sectors, as well as between science, technology, universities, and industry, are becoming increasingly blurred. This gives rise to a system of overlapping interactions in which industry serves as the center of production, government acts as a source of contractual relations that facilitate stable interaction and exchange, and universities are a source of new knowledge and technology. Additionally, each of these spheres retains its primary role and identity while also taking on characteristics of the others; for example, universities may support start-up creation in incubator and accelerator projects, similar to the role that industry plays. This concept was first introduced by Leydesdorff and Etzkowitz in 1996.
According to Pique et. al (2018), the Triple Helix model challenges the traditional view of universities as simply supporting structures for innovation, providing trained personnel, research results, and knowledge to industry. Instead, it posits that universities should be seen as equal partners and influential actors in the innovation process. In previous institutional configurations, universities often had a secondary role or were subordinated to either industry or government, but in the Triple Helix model, they are on equal footing.
Although the Triple Helix model is sometimes perceived as a static system, with each sector operating independently, it is actually a dynamic process that can lead to different configurations, particularly in lagging European regions. Each sector, or "helix," has an internal core and an external field of activity, and these two dimensions expand simultaneously. The vertical dimension refers to the evolution of each helix according to its mission or strategy, while the horizontal dimension refers to the interactive relationships and exchanges of goods, services, and functions between the sectors. These interrelationships create an innovative environment where knowledge flows in all directions. Overall, the Triple Helix model is understood as a spiral pattern of innovation that reflects the complexity of activities and the multiple reciprocal relationships that occur throughout the process of knowledge capitalization in the science and technology sector.
This model also postulates that in a knowledge-based society the boundaries between the public and private sector, science and technology, university and industry are increasingly fading, giving rise to a system of overlapping interactions: (a) Industry operates as the center of production; (b) Government acts as the source of contractual relations that guarantee stable interaction and exchange (c) Universities are the source of new knowledge and technology.
The Three Agents in the Triple Helix Model
In the Triple Helix model, the university, industry, and government are referred to as the three "agents" or "helixes" of the model. Each agent has its own unique role and function in the innovation process:
1. The university: Universities are seen as the primary source of new knowledge and technology. They are responsible for conducting research, educating students, and transferring knowledge to industry and other sectors.
2. The industry: Industry is the center of production and is responsible for commercializing new ideas and technologies and bringing them to market.
3. The government: The government plays a regulatory role and is responsible for establishing the policy and legal frameworks that govern the innovation process. It may also provide funding and other resources to support research and development.
The three are interconnected and dependent on each other. They should work together in a collaborative and mutually beneficial way in order to drive innovation and economic development.
Changing Role of the Agents with Ecosystem Maturation
The roles of the three agents in the Triple Helix model - universities, industry, and government - are known to change as the innovation ecosystem matures. Pique et al. (2018) identified four stages in the evolution of an innovation ecosystem, and the relative importance of the Triple Helix agents appears to vary at each stage:
Inception: During this stage, universities play a particularly important role in supporting business development, and new industry agents such as accelerators and business angels also become involved. The government tries to get closer to both universities and industry in order to expand the collaboration area.
Launching: At this stage, there are few changes in the relative importance of each agent, but universities and industry strengthen their ties while the government takes on a secondary role.
Growing: As companies grow and regulations start to affect them, the public administration becomes more influential, allowing companies to showcase their solutions in cities and through policy regulations. Universities may lose some of their influence at this stage (but not as much as they did 10 years ago because they can maintain their ties with startups through venture capital funds).
Maturity: During this stage, the industry remains the most important agent, while the government continues to play a regulatory role and universities provide human capital and new ideas (though some believe their relevance has declined as corporate research labs become more active).
Overall, the relative importance of the Triple Helix agents appears to shift as the innovation ecosystem evolves. At the maturity stage another important change that happen
(Source: Pique et. al, 2018)
The Challenge in Developing Countries
One challenge that many developing countries face is building effective interlinkages among the three agents of the Triple Helix model - universities, industry, and government. In developed countries, these sectors often have well-established relationships and channels of communication, which can facilitate the flow of knowledge, technology, and resources necessary for driving innovation and economic development. However, in many developing countries, these interlinkages may be weaker or less developed, which can hinder the ability of the three agents to collaborate and drive innovation.
There are a number of factors that can contribute to the challenge of building effective interlinkages among the triple helix in developing countries. These can include a lack of infrastructure and resources, political instability, a lack of legal and regulatory frameworks, and cultural and social barriers. In order to overcome these challenges and build effective interlinkages, it is important for developing countries to invest in infrastructure, education, and research, and to establish policies and institutions that support collaboration and innovation. It is also important for the three agents to engage in ongoing dialogue and to identify and address any barriers to collaboration. By working together and building strong interlinkages, the triple helix can help drive innovation and economic development in developing countries.
How can Think-do Tanks help
Think tanks, also known as "think-do tanks," can play a significant role in the Triple Helix model by providing research and analysis that can inform policy and decision-making processes and support the collaboration and integration of the three agents - universities, industry, and government. For example, think tanks can conduct research on the impact of different policies or initiatives on innovation and economic development, and provide recommendations to policymakers and other stakeholders on how to optimize the impact of these policies. They can also work with universities and industry to identify areas of research that have the potential to drive innovation and support the transfer of knowledge and technology from academia to the private sector.
They can also help bridge the gap between academia, industry, and government by providing research and analysis that is relevant and useful to all three sectors, and by facilitating collaboration and communication among the three agents. The dialogue and collaboration among the three agents that the think-do tanks facilitate, by hosting events, workshops, and conferences, and by providing platforms for the exchange of ideas and information are crucial in bridging the gap between academia, industry, and government and supporting the development of strong interlinkages among the three agents, which is essential for driving innovation and economic development.
Beyond Interlinkages: An Additional Challenge in India
TheyBeyond Interlinkages, an additional challenge in India is the geographical concentration of development. Cities such as Mumbai, Hyderabad, and Bangalore are a case in point here where industrial development has not led to the creation of a regional sprawl of Industrial activity as has happened in California. The term "Silicon Valley" originally referred to the Santa Clara Valley, which is the southern part of the San Francisco Bay Area and includes the cities of San Jose, Santa Clara, and Sunnyvale, among others. However, over time, the term has come to be used more broadly to refer to the entire region, which includes the cities of San Francisco, Oakland, and other cities in the Bay Area. Perhaps Mumbai and even Delhi with their satellite towns may boast of similar features yet their sprawls are limited to immediately interconnected cities and may not span across regions. Moreover, the tech-hubs in India, i.e., Bengaluru and Hyderabad can hardly boast of regional growth. Their Development continues to remain concentrated. The state of Karnataka even has a “Beyond Bengaluru” program to increase the sphere of high-growth economic activity beyond Bengaluru.
One potential reason for the concentration of development in Indian cities is the lack of infrastructure and connectivity in more rural or remote areas. Many of these areas may not have access to the same resources and opportunities as more developed urban centers, making it more difficult for them to attract investment and development.
The Problem of Centralized to Distributed Network Transformation
The nature of the policy problem of concentrated economic and innovation system development may be termed as the “Centralized to Distributed Network Transformation”. The problem of "centralized to distributed network transformation" refers to the challenge of transitioning from a centralized network structure, in which a single central authority controls and coordinates all network activity, to a distributed network structure, in which multiple nodes or agents are able to communicate and collaborate directly with each other.
There are a number of challenges that can arise when attempting to transform a centralized network into a distributed one. One challenge is the need to redesign and reconfigure the network infrastructure to support decentralized communication and collaboration among the nodes or agents. Another challenge is the need to develop new protocols, rules, or algorithms to enable the nodes or agents to interact with each other and reach consensus on decisions and actions.
Additionally, the transformation from a centralized to a distributed network can be complex and time-consuming, and it may require significant changes to the organizational structures, mental models of governance, and radical shifts in the processes of the network. It can also be difficult to manage and coordinate the activities of a distributed network, as there is no central authority to control and direct the actions of the nodes or agents.
Despite these challenges, many organizations, governments, and networks seek to transition to a distributed structure in order to increase resilience, scalability, and adaptability, and to take advantage of the benefits of decentralization. This is the problem that India faces in many domains, whether urbanization of civil service reforms or governance in general, especially when it comes to center-state relations.
The Four Phases of Shifting from Centralized to Distributed Networks
Along with constant cultural change and adaptation which remains a regular feature of a shift from centralized to decentralized governance or social structures, there are four phases in dealing with the problem of shifting from centralized to distributed networks.
Node Nourishment: In this phase, the central node, or hub, nourishes, governs, and assists other dependent nodes. This phase is characterized by a strong reliance on the central hub for resources, support, and guidance. The central hub may also identify the unique capabilities of the dependent nodes and provide resources and support to help them develop and grow.
Secondary Node Specialization: In this phase, some of the capabilities that reside in the central hub may begin to move to secondary nodes, or dependent hubs. This may involve the transfer of resources, expertise, or other assets to these secondary nodes, which can help them become more self-sufficient and capable of operating independently.
Node Sufficiency and Hub Hopping: In this phase, the secondary nodes may develop capabilities that are larger or more advanced than those available at the central hub. This may involve the growth of research centers or universities, or the development of other specialized capabilities. As the secondary nodes become more self-sufficient, they may become quasi-sufficient and may be able to operate with a greater degree of independence from the central hub. In some cases, large companies or other organizations may move their headquarters from the central hub to a secondary hub, a process known as "hub hopping."
Hub and Node Integration: In the final phase, there is a emergence of a synergistic relationship between all nodes, as they become integrated and interdependent. This phase is characterized by a more balanced and mutually beneficial relationship between the central hub and the secondary nodes, as they work together to achieve common goals and objectives.
How might a Systems Thinking Informed Plan for Beyond Bangaluru look based on the Four Stages of Shifting from Centralized to Distributed Networks?
(Photo by satyaprakash kumawat on Unsplash)
1. Nurturing Dependent Nodes:
Identify and support the unique strengths of dependent nodes in Bangalore
Provide resources and assistance to help these nodes grow and develop.
Implement policies and programs that promote collaboration and partnership between the central hub and dependent nodes.
Identify universities in Mysore that specialize in deep technology or industries in Hubbali that are experiencing rapid growth.
Connect these universities or industries to the central hub in Bangalore through exchange programs or accelerators.
Organize bi-annual Market Access Events/Programs for investors and large corporations to interact with accelerators, incubators, government agencies, and universities in the region.
2. Specializing Secondary Nodes:
Transfer resources, expertise, or other assets from the central hub to secondary nodes as needed.
Encourage the development of specialized capabilities at secondary nodes, such as research centers or universities.
Foster collaboration and partnerships between the central hub and secondary nodes
Develop capacity in universities, accelerators, and incubators in Tier II and Tier III cities.
Each Tier II city accelerator identified in the plan should develop specialized, autonomous capabilities.
Each Tier II city university or department should also develop specialized, autonomous capabilities through flagship competitions for startups, research grants for innovation, and investor interactions.
Organize Market Access events for Mysore, Mangalore, and Hubbali (and other Tier II and III cities).
3. Increasing Node Self-Sufficiency and Hub Hopping:
Support the growth and development of secondary nodes to increase their self-sufficiency.
Encourage the development of advanced capabilities at secondary nodes, such as research centers or universities.
Foster collaboration and partnerships between the central hub and secondary nodes.
Encourage the relocation of large companies or other organizations to secondary hubs as appropriate.
Provide tax incentives and other incentives for industries to set up in Tier II and Tier III cities.
Provide tax incentives and grants to universities and accelerators for outcome-based research and development programs.
Establish joint investor and innovation circles between Tier II and III universities, accelerators, and companies with leading entrepreneurial universities worldwide.
Establish exchange programs between Tier II and Tier III city accelerators and incubators with other leading accelerators in India and around the world.
4. Integrating Hubs and Nodes:
Foster collaboration and partnerships.
Foster collaboration and partnerships between the central hub and secondary nodes.
Establish policies and programs to encourage the integration and interdependence of all nodes.
Encourage the sharing of resources, expertise, and other assets among all nodes to maximize efficiency and effectiveness.
Develop governance structures and processes that promote collaboration and cooperation among all nodes.
Setup agencies to facilitate offices and headquarters of micro-multinationals in Tier-II and Tier-III cities.
Government designs incentives (through a special economic zone or other models) to facilitate offices and headquarters of micro[1]multinationals in Tier-II and Tier-III cities.
Cluster-wise development schemes for each Tier-II and Tier-III city cluster.
Continued expansion and coordination of investor circles and market access programs.
In implementing all of the above structural changes, a concomitant culture change may be necessary for all important stakeholders through education, retraining, and exchange programs with desirable examples such as Silicon Valley.
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