NORTHERNNET INNOVATION & KNOWLEDGE TRANSFER Final Report
Prepared For: One NorthEast (on behalf of the Northern Way) Stella House Goldcrest Way Newburn Riverside Newcastle Upon Tyne NE15 8NY
Š nmp, October 2008
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TABLE OF CONTENTS 1.0 2.0 2.1 2.2 3.0 3.1 3.2 3.3 3.4 4.0 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 5.0 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 5.10 6.0 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8
Executive summary ..................................................................................................... 2 Introduction ................................................................................................................. 5 Project objectives ........................................................................................................................... 5 Outline of the report ....................................................................................................................... 5 Methodology ............................................................................................................... 6 Project initiation .............................................................................................................................. 6 Desk research ................................................................................................................................ 6 Primary research ............................................................................................................................ 6 Analysis & reporting ....................................................................................................................... 7 Network expansion...................................................................................................... 8 Case Studies .................................................................................................................................. 8 TTE & ATLAS.................................................................................................................................. 8 TTE................................................................................................................................................. 8 ATLAS .......................................................................................................................................... 10 MaNAP ......................................................................................................................................... 11 SohoNET ...................................................................................................................................... 12 International examples ................................................................................................................. 14 Results from primary research...................................................................................................... 14 Conclusions ................................................................................................................................. 15 Knowledge Transfer, Intellectual Property & Supply Chain Innovation ...................... 17 Case Studies ................................................................................................................................ 17 ICS - Hillington Park Innovation Centre ........................................................................................ 17 Pervasive media & HP labs .......................................................................................................... 19 Xmedia ......................................................................................................................................... 21 Israel ............................................................................................................................................ 23 Finland & Sweden ........................................................................................................................ 26 Crossover Labs ............................................................................................................................ 28 BTween ........................................................................................................................................ 30 Results from primary research...................................................................................................... 32 Conclusions ................................................................................................................................. 33 Recommendations .................................................................................................... 34 Knowledge Transfer, Intellectual Property & Supply Chain Innovation ......................................... 34 Building a knowledge bank .......................................................................................................... 34 Targeted network events .............................................................................................................. 35 Cross regional collaboration showcase ........................................................................................ 35 Establishing a NorthernNET portal ............................................................................................... 36 Network expansion and development .......................................................................................... 36 Extending academic links and external links ................................................................................ 36 Further recommendations ............................................................................................................ 37
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EXECUTIVE SUMMARY
Project Name: NorthernNet Collaborative Working Project Summary of opportunity & what the funding will provide: It is where technology and creativity meet that we see real innovation, programmes and activities that can facilitate the relationship between the development new technologies and the digital media industries and will net significant benefits. The media landscape in the North of England is one that is dynamic, thriving and growing with the construction of MediaCityUK in Salford predicted to deliver £1.5bn to the regional economy, employment opportunities for 15,500 people and £400m of programme spend. Northern Way Innovation Fund has committed to invest over £9m in the physical premises and high spend telecommunication network to support 15 (when complete) Media Access Bureaus geographically spread across the North of England. The NorthernNet Collaborative Working Project builds on this existing investment and exploits the network as it stands to create a virtual Northern Digital & Creative industry cluster. This will be used to demonstrate the opportunity for remote collaboration and facilitate knowledge transfer for both business and academia. It will deliver the five following elements: • a detailed knowledge bank of the company and research base in the North of England to facilitate a trusted network and a collaboration dating service (estimated cost £200k per annum) • a series of targeted networking events; spanning inter-subsector, mixed subsector and across non-digital & creative sectors (estimated cost £100k per annum) • a cross regional collaboration showcase to demonstrate the ability for teams to work virtually on commercially focused challenges when they are geographically distributed (estimated cost £750k per annum) • a NorthernNET portal to build a virtual communications platform for the Northern Digital & Creative industry cluster (estimated cost around £140,000 for the first year and then £40,000 for each subsequent year) • a link with the educational network JANET to encourage further collaboration between academia and industry in the sector (estimated cost £100,000 - £150,000) This will result in a strengthening of the supply chain, greater retention and development of talent and the achievement of scale by encouraging and facilitating collaboration across geographic boundaries. Having an established and growing deep talent pool is not only essential to delivering on the BBC’s commitments but will also be a positive enabler when aiming to attract other inward investment targets. All of this will result in bigger, better, stronger companies and increases in GVA across the Northern Way. It will also facilitate closer relationships between the private sector and academia, thereby increasing the level of R&D in the sector across the North of England. Criteria Pan Northern Opportunity: The sectors comprising the digital media industries are interrelated to the wider economy in many ways, from suppliers to production methods to distributors and broadcasters to one sector being a customer of another and vice versa. Many creative industries supplier bases are the same: photographers, designers, writers, researchers, producers, directors, audio-visual suppliers, research houses, printers. The former six all tend to be microbusinesses or freelancers who have to rely on more than one sector for their work. Larger or more established businesses will tend to specialise on specific sectors. Some sectors directly supply others: • advertising provides the primary revenue stream for commercial radio, television, publishing • design, software and music all directly feed advertising • publishing creates opportunities for television, film & video, radio and games software as well as other platforms within publishing (for example, novels being made into TV series and films, and in turn into video games – Harry Potter being the most obvious example) • likewise television, film & video, radio and games software create brand extensions that can be exploited through publishing, print and electronic • music is the digital industry and has led the way in which the business model has developed through developments such as Napster and iTunes. Music transcends all creative industry boundaries being an integral part of publishing, television and radio, film & video, software, computer games, advertising. The pan Northern opportunity enabled by the NorthernNET, MABs and NorthernNet Collaborative Working project is the ability for companies to easily identify potential collaborators, suppliers and even employees wherever they are located in the North of England. The events will be held either physically, or virtually, at each of the MABs enabling companies to benefit from the project independent of their location. This collaboration could lead to the development of new business models across different elements of the 2
creative and digital industries as separate industries evolve and mature at different rates. Impact and critical mass The challenge is how to help build and sustain economically successful creative and digital industries for the North Of England, that are able to exploit new technology to their advantage and compete in global markets. The opportunity is to develop multi-platform content solutions targeted at existing media and entertainment markets as well as other associated and emerging markets such as education, banking, tourism and other corporate activities. This can best be achieved by having a deep talent pool with a variety of skillsets, perspectives and experiences. Almost 40 per cent of new jobs come from just 4Ÿ% of all new businesses. High growth businesses are the future of the UK economy, creating turnover, employment and a supply chain opportunity for their geographies and sectors. In globalising their businesses, high growth companies address the UK’s balance of trade, and raise the profile of the UK as an international, innovative business nation built on a strong skills and economic base. As companies, high growth enterprises display similar characteristics and face particular issues in managing their growth and implementing their strategies. Growth involves risk; investment in research and development, entering new markets, taking on new competitors, reporting to boards and external funders, managing high numbers of staff, and for the start-up team it often means moving away from a hands-on role to a managerial role in a short space of time. Currently, each of the three regions has its own identity and niche strengths in different aspects of digital media. The North West is particularly strong in talent-led Broadcast elements and some marketing communications; Yorkshire in games and music and marketing communications for the financial sector; the North East in web, games and software. Each of those strengths will be affected in different ways by MediaCity:UK and by the globalisation of those industries. In the short term there will still be a need to focus on applying core skills to core markets and NorthernNet will enable greater efficiency of delivery for existing business. However, as convergence increasingly takes hold, the opportunities to apply specialist, niche skills in emerging markets will increase significantly. This will lead to an increase in the need for portable skills as portfolio working becomes increasingly prevalent. All three regions will benefit by being able to fully exploit their own existing individual strengths as well as acquiring benefits of scale by being able to develop new collaborative working practices that will overcome the barriers of geography. This will also help each region to retain and build on their own company base and reduce the threat of key companies from Yorkshire and the North East from relocating to Salford. It will also enable the North West to maintain a geographic spread of companies across its diverse region rather than it being totally clustered around MediaCity. This of course will help to sustain communities across all three regions. This will also apply to the academic infrastructure across the regions as the benefits of collaboration and scale should also apply in academia. The market failure that the NorthernNET, MABs and NorthernNet Collaborative Working project collectively are trying to address is the extremely low levels of collaborative activity currently observed in the North of England. This is required by businesses to offer a complete integrated solution to the content commissioners, which is becoming increasingly important with the growing requirement from a multi-platform industry. The NorthernNet Collaborative Working project specifically aims to address this failure by making the trusted network available to its members and to illustrate how the infrastructure the Northern Way has put in place can be used to meet the needs of the content commissioners in an achievable and effective way. It is only by actively being involved in a virtually collaborative project can the message truly be spread to the business community. The NorthernNet Collaborative Working project is expected to touch each member of the NorthernNET through the portal and the potential to access the information in the knowledge bank through the NorthernNET representatives. Each event and the cross regional collaboration showcase could benefit up to 300 people across the region. It is extremely difficult to measure the direct impact on GVA from increasing collaborative working and knowledge transfer. That said the NorthernNet Collaborative Working project is expected to enhance the GVA expectations already stated for the NorthernNET & MAB project and improve GVA figures for the sector by around 1-2% over the next two years. Leverage and sustainability There is the potential for commercial investment, specifically for the cross regional collaboration showcase which specifically looks for content commissioner involvement, such as the BBC, Sony and others. Initial discussions with Kevin Price, Head of Future technology and media for Media City, indicated that the BBC would be extremely interested in participating in this venture. It is likely that this will be at least a two-stage process where the business model has to be proven, based on the existing investment. Once proven, we believe that there will be many opportunities and investment choices to be 3
made that will ensure the sustainability of the investment. Once the model is established there is value in strengthening connections with other UK media networks such as Sohonet, SYDR and SEMN, together with international networks. However this can be done through potential virtual collaborations rather than establishing any formal network linkage. In future, the model could be extended to bring in national and international players to explore wider collaboration opportunities. There has been significant investment in the infrastructure to support the MABs and NorthernNET. Our analysis indicates that there may be benefit from establishing a peering point with JANET to encourage the collaboration with universities. In future there may be a case as the international traffic on NorthernNET grows to extend this capability, either through commercial discussions with Virgin or through external connection with another network such as MaNAP, however this is likely to be driven by demand (and subsequent revenue) by the NorthernNET membership. Fit with Government policy The NorthernNet Collaborative Working project has obvious synergies with a number of existing initiatives: • government initiatives, particularly the Cox Review (2005), the Creative Economy Programme and the formation of the TSB, the importance of the creative and digital sector to regional and national economic growth and competitiveness is clear. The Creative Economy Programme was launched in November 2005 in order to develop a strategic vision for the creative industries and tackle the very specific issues that will make a real difference to the productivity and growth of the UK economy and make it the world’s creative hub. The Secretary of State has described the creative industries as being “at the heart of our policies for strong regions and vibrant cities” – a clear indication of their growing status within the central government agenda. • The Knowledge Transfer Network for the Creative Industries (KTN) will provide a national, overarching network for the creative industries; complementing and partnering with RDA and DA sponsored initiatives, the Research Councils, DCMS and individual sector bodies, to help develop a co-ordinated approach to the challenges and opportunities faced by the creative industries. Ultimately the KTN will provide: o UK based organisations with the opportunity to meet and network with others in the UK and internationally; both within and across different sectors to identify new opportunities and partners. o A forum for a coherent industry voice to inform Government policy-making and to act as a conduit for implementation, particularly as it relates to technology development, exploitation and knowledge transfer.(DTI 2007) There is also significant alignment with NESTA Digital Convergence activities to ease cross-media content collaboration.
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2.0
INTRODUCTION
This report has been prepared by nmp for One NorthEast on behalf of the The Northern Way partnership. The Northern Way partnership brings together One NorthEast with Yorkshire Forward and the North West Development Agency, and other partners, to promote the economic development of the wider North of England. The Northern Way Innovation Fund has invested £3.7m in a high speed fibre optic telecommunications network (NorthernNET) to link a number of Media Enterprise Centres (now called Media Access Bureaus) across the North. These Media Access Bureau facilities are geographically spread from Newcastle to Leeds and Liverpool and will have the MediaCityUK development as the core Hub site for the network. The Northern Way Innovation Fund has additionally invested £5.6m in the physical premises (MEDIA ACCESS BUREAUs) across the North to enable Digital & Creative businesses and practitioners to broker deals, access talent, share resources, collaborate on content development, network, transfer data and innovate. The network when complete will result in 15 sites being connected across the North with MediaCityUK at it’s heart. 2.1 Project objectives The NorthernNET is now, with further investment, seeking to capitalise on the full range of benefits offered by NorthernNET by: • enhancing the connectivity and functionality, both across the UK and externally to a global network; • facilitating collaboration, innovation and interactions within the supply chain. The aim of the project was to examine two main project areas: •
Network expansion and development o Increasing the connectivity, both in the UK (for example to SohoNet and strategic commercial nodes in the North) and internationally, to create a global network; o Enhancing the functionality and services provided by the network, the specifics of which will be defined by the business users (for example access to render farms, data centres, professional services etc).
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Knowledge Transfer, Intellectual Property & Supply Chain Innovation o Stimulate collaboration and innovation between creative and digital companies in the North utilising the infrastructure of NorthernNET; o Develop and deliver innovative ways of using the network to promote “action conferences and collaboration” which will provide SMEs in the North with greater access and opportunities to partners and engage directly with content commissioners in all industries.
2.2 Outline of the report Following this brief introduction the report will describe the methodology applied, followed by a detailed discussion of the research (both case studies and interviews) conducted for the two areas together with conclusions from that research. Finally we present our recommendations to the Northern Way Partnership based on our analysis.
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METHODOLOGY
The approach nmp has used to undertake this project is summarised in Figure 1 below. Figure 1- Project approach
3.1 Project initiation A joint initiation meeting for this project and the NorthernNET innovation project took place on the 1st September 2008 between Mark Adamson, Emma Frost, Stuart McFarlane, Jason Legget, Danny Meaney and Mairi Robertson. 3.2 Desk research Case studies were used to examine priority networks in the UK and international markets and investigate comparable business models. These were: were • Project Atlas; Telcoms Trading Exchange; • • MANAP; • SohoNet. In addition we have provided a bulleted list of some international examples. Similarly we have developed 7 case studies to investigate existing Innovation schemes in the Digital & Creative Industries in the UK and in international markets to identify collaborative best practice in the Digital & Creative sectors. These were: • ICS; • Pervasive media & HP labs; • Xmedia; • Israel; • Finland & Sweden; • Crossover Labs; • BTween. 3.3 Primary research Interviews were conducted to investigate potential opportunities for network expansion by linking with existing networks and services such JANET, SohoNET and MaNAP. MaNAP These included MAB stakeholders and network stakeholders. In addition interviews were conducted with content commissioners and with content suppliers across a range of industries to identify commissioning opportunities and investigate relationship & techn technology issues that they have experienced.
3.4 Analysis & reporting Based on the research conducted we have developed recommendations for future investment to stimulate collaborative working and supply chain innovation across the sector and potential network expansion for Northernnet. This document represents the final report which includes: • the executive summary which has been based on a template provided highlighting the opportunities in both areas, the recommended project interventions, funding required and economic impact; • areas of priority for public sector investment, highlighting the added value from coordinating these opportunities across the North of England; • supporting case studies; • interview transcripts.
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4.0
NETWORK EXPANSION
This section includes the research that was conducted in the areas of network expansion & development. This includes case study research, insight from primary research and conclusions drawn from the research. 4.1 Case Studies This section provides a summary of the methodology deployed in other infrastructure development in the UK to establish best practise and lessons learnt. The initiatives investigated were: • TTE; • ATLAS; • MaNAP; • SohoNET. Each of these initiatives is discussed in detail below. 4.2 TTE & ATLAS In 2001, the Scottish Executive produced a policy document which contained a number of key themes and focus for creating a Smart, Successful Scotland. The Broadband telecoms piece was contained within the Global Connections theme: • greater digital connectivity; • increased global involvement; • a globally attractive location; • more people choosing to live and work in Scotland. The strategy of the e-Business team within Scottish Enterprise was to enable companies to attain competitive advantage in global markets and the availability of world class competitive telecoms was seen as a pre-requisite to achieving this. 4.3 TTE Why: The price per megabit of wholesale IP in Scotland for ISPs was significantly greater than an equivalent price in London. IP Transit was, and still is, only available from key locations across the UK where international cables terminate. As such, the Scottish ISPs needed to procure bandwidth (2mb/4mb/10Mb etc) from network operators in order to connect to these IP transit providers. This additional cost was subsequently built in to the retail price which they could then offer to end users. Scottish Enterprise launched a £6 million initiative to set up a new Telecoms Trading Exchange (TTE) in Scotland. The neutral trading exchange was based within Scolocate (co-location centre) in Edinburgh with a high capacity link between London and Scotland. The Telecoms Trading Exchange was expected to address two key issues affecting the Scottish telecoms market • Lack of information it is very difficult to compare services offered by suppliers because there is no impartial central source for information on prices and the quality of service provided; • Difficulty changing supplier – information on suppliers is no use if ISPs are unable to switch to a more favourable contract. Many contracts are for periods of 1-5 years. Additionally there are steep technical costs involved in moving to a more competitive provider. Model: Scottish Enterprise went out to tender for a provider to develop and operate a neutral trading exchange within Scolocate and a provider of a high capacity link between London and Scotland. The contract to run the exchange was awarded to UK-based Band-X Ltd that already owned and operated telecoms trading platforms in London and New York. The facility provided a platform allowing Internet Service Providers (ISPs) and other companies requiring high bandwidth to link into an extended range of suppliers letting them effectively compare costs and level
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of services available to them via a website. The website was effectively a trading mechanism offering neutral, impartial information and model contracts.
The second part on the initiative was a high capacity link (resilient 2.5Gb) between Scotland and London. This was provided by SSE Telecom (now Neos) although they had in turn leased the capacity from ntl:Telewest (now Virgin Media). Results: The Telecoms Trading Exchange was essentially a facilities based platform where leading IP transit backbones offer their services to a range of buyers via Band X. The exchange was operated through a neutral switch based in Scolocate in Edinburgh which was be open to any telecoms company and Internet Services Provider (ISP) who want to buy IP transit. From there access was be made to the larger number of IP transit backbones connected to Band-X platform in London, with the cheaper prices and greater choice of supplier they are able to offer. Band-X Ltd employed an account manager in Scotland to promote and sell services. The TTE attracted a number of customers all of whom took varying amounts of bandwidth. However, the potential market for customers was never going to be large enough without enabling connectivity within Scotland to Scolocate and the point of access to the TTE system. Therefore the project was only partially successful in realising its objectives. It did attract customers and they were able to buy IP transit more competitively than before. Despite this, given the other costs involved in providing an internet access service to customers, especially local loop costs, it is questionable as to whether there was a demonstrable reduction in end user pricing. The managed link between London and Edinburgh was critical to success of project allowed ISPs to appear as if they had a physical point of presence in London and gain access to competitive pricing for IP transit. However, the total cost of internet access provision for an end user also had a local leg element to it. This element of connectivity was not being addressed by the telecoms trading exchange service and hence the link up with the original Scotland-wide Atlas business park initiative. Band-X Ltd were bought out by an American organisation called Arbinet who honoured the contract for last part the 3 yr management contract but were unwilling to provide the service beyond this period unless the public sector were able to subsidise the London-Scotland link for an extended period. This was not
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really a feasible option given the restricted number of customers and the vast amount of unused bandwidth on the link. Lessons learnt: This project was one of a number of public sector interventions being developed in parallel - a supply side intervention which sought to address a market failure in the lack of supply of competitive wholesale IP transit. It would most probably have been commercially viable to continue without continued public sector support if: • there had been more retail customers (ISPs); • there was a bigger pull from the residential and business markets for broadband services ( in 2003 very few exchanges had been broadband enabled); • the Scotland-wide Atlas project had been approved in anticipated timescales. 4.4 ATLAS Why: Strategic investment in telecoms infrastructure was not normally widely available to SMEs. Scottish Enterprise identified that access to “advanced broadband” was required in key locations and the initiative was aimed at addressing future communications needs of key Scottish businesses over at least the next 15-20 years. The ATLAS project was to connect selected business parks by a high speed fibre based neutral wholesale IP network. Model: SE developed and managed 2 separate procurements; the first to design and build the dark fibre network on 6 business parks and the second to market, sell, maintain and operate the network. A 100% public sector owned company, Atlasconnect Ltd, was created as the contractual vehicle who would own the Assets. The first tender was won by Alfred McAlpine and the outsourced management contract was won by Atkins. Results: ATLAS represents a strategic investment in technology delivering SMEs advanced broadband services. Its aims were concerned with the future needs of the economy, rather than short-term commercial gain. Customers benefited from • removal of “last-mile” bottleneck; • direct fibre access onto their core networks; • fixed access cost; • no limits on bandwidth utilization; • scalable and flexible. Each business park has dual rings of dark, fibre-optic cable running around it, with cable legs running out to each building on the park. There is also a Co-Location Building (CLB) on each park, which is used for telecommunications inter-connect and data storage equipment. There are entry points (Neutral Access Points) where any private sector telecoms company can connect up its own external network to the Atlas on-park network, thereby gaining access to buildings and potential customers on the park. There is also expected to be economic benefits to the businesses on the 6 parks. An economic appraisal of Project ATLAS indicated this is estimated to be: • Direct telecommunications cost savings of between £3 and £4.5 million; • Indirect overall business cost base savings between £97 and £150 million; • Increased financial turnover between £48 and £72 million; • The creation of 73 to 110 jobs; • The safeguarding of a significant number of jobs. An independent economic appraisal has estimated that the overall GVA (Gross Value Added) benefits to SMEs at £25 million by Year 15.
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Lessons learnt: The limited number of network operators means backhaul choice for ISPs is still restricted and therefore there is no real competition and the limited numbers of ISPs means that end users are not really being targeted effectively. This is a long term investment where the benefits may not be observed for a number of years. In addition it was a very protracted and complex process. 4.5 MaNAP Why: As with the TTE the price per megabit of wholesale IP for ISPs in the North West was significantly greater than an equivalent price in London. Therefore Project MaNAP was established - a not-for-profit organisation set up to establish an Internet Exchange Point (IXP). Model: MaNAP is a not for profit company established in 1997, limited by guarantee and run by a board of directors known as the ‘council’. It consists of volunteers from member organisations that are voted onto the board by the current membership. Their role is to steer the company and to provide expert industry knowledge to operate and grow the company for the benefit of all members. Initial set up funding of £250,000 from the NWDA was used to purchase servers (~£220k) and the remainder was spent on marketing. The purchase was undertaken internally and used existing Manchester University connectivity. Increased demand from commercial organisations together with enhanced competitor offerings made it hard for MaNAP to fully capitalise on the opportunity. In April, 2005 NWIX became the owner and operator of Manchester Network Access Point Ltd. NWIX is a commercial organisation that provides independent and neutral Layer 2 Ethernet connectivity to ISP’s, Telco’s and other on-line businesses in the UK. Following this acquisition, MaNAP members had access to additional services from NWIX, allowing members to create flexible and competitive solutions to public peering and network expansion. This was seen to be a win-win for all. Results: MaNAP is a one of Europe’s most mature Internet Exchanges with over 50 members including: • large content providers such as the BBC, Virgin Media and Moneysupermarket.com; • access providers including Opal Telecom (Carphone Warehouse), THUS (Your Communications) and UKERNA. It collectively connects over 28 million subscribers. As a technology solution, MaNAP has provided what the region required - reduced network transit cost. Where customers in the North West were typically paying £70 per mg transit charges they are now through using MaNAP they are averaging £15 per mg. NWIX have made significant investment in hardware and infrastructure which all members benefit from and the membership rates have been subsidised to encourage development in regions outside of London. The presence of a secure resilient network has attracted inward investment and provided the area with competitive advantage over other UK regions. The NWIX network aggregates elements from key fibre providers into a single network connecting data centres across the UK and Europe. It is designed around multiple fibre connections from multiple suppliers, all routed diversely so each leg of the service is fully protected for maximum redundancy and resilience. It provides end-to-end Ethernet connectivity to deliver ultra fast, low latency performance. The Internet Exchange and Peering LAN which overlays the network means customers can freely exchange traffic with other peering Members at substantially reduces transit costs. On-net services such as Tier 1 Internet transit is delivered to every exchange at the same discounted pricing expected in London. Therefore costs are not geographically dependant and are also minimised as clients can access
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the network at the data centre closest to them. them At the time of writing, annuall MaNAP port charges are £1,200 per year, irrespective of speed. Figure 2 - NWIX network
MaNAP has enough capacity to carry the entire national load and reaches 12 million end users through their membership. The NISCC (National Infrastructure Co-ordination ordination Centre) have stated that MaNAP should be a significant consideration to any UK on on-line line business when reviewing business continuity plans, in London particularly. Being the UK’s first National Peering LAN, MaNAP has also become the first and only global IXP that is ISO accredited (ISO 9001 & ISO/IEC 27001) bringing peace of mind to their customers. Lessons learnt: Financially the project struggled after the initial funding had been used to setup the infrastructure, MaNAP experienced enced difficulties in maintaining the enterprise as an ongoing business due to the membership fees being equally spread between the number of members creating a problem when organisations left the company and growth was limited as the infrastructure costs needed to continue to attract members made membership costly. In order to run the exchange on a day to day basis a minimum of two staff were required, one to perform the day to day maintenance and management of equipment and the other to promote the exch exchange and encourage investment. This doesn’t take into account the 24/7/365 days a year support that is expected by members. As a result NWIX were asked to take over the ownership of the network and equipment for a fixed fee allowing the entity to survive. 4.6 SohoNET Why: Sohonet is the first and largest high bandwidth connector for the global entertainment industry that provides a fast and advanced digital media network that links a range of companies within the film,
broadcast and multimedia industries. The firm was established to address the problems felt by the founders surrounding the issue of transferring large amounts of data quickly and securely1. Sohonet was founded in 1995 by a group of Soho-based post-production companies to link together British film studios and London’s post-production community2. Model: The initial network, put in place in the mid 1990s, was the first commercial wide area ATM network in the world and has been a pioneer in operating an early wide area Ethernet network, deploying SDSL technology and being the first company to commercially deploy VDSL technology in the UK. The original Sohonet founders sold to Neos Networks in 1999, and was then acquired by Scottish and Southern Energy. As it became apparent that the match between the responsive and international requirements of Sohonet and the activities of a large utilities company, the current management acquired the business in 2003, making Sohonet independent of both post-production houses and carriers and allowing the company to grow and develop. Sohonet is a commercial business. It is not clear if there was any significant public sector investment in Sohonet. Results: The specific service provision put forward on the company’s website is as follows: • Direct access to a high speed network that by-passes the public internet (including full network management, network security, firewalls and advice on transfers); • ISP services; • The Sohonet freeway (which makes spare capacity available on a shared basis). Currently, the network has private connectivity to the United States, Canada, New Zealand, Australia, France, the Netherlands, Germany and Italy3 and also has the ability to provide connectivity to locations worldwide via fibre and satellite links. In 2007, in response to an increasing need from clients to transfer data on an ad hoc or trial basis, Sohonet Freeway was developed to allow Sohonet’s spare capacity to be shared amongst all users, thus allowing industry to share resources and collaborate internationally both within and between companies. Sohonet’s client list is a blue chip one and now numbers over 100, and includes companies such as Sky TV, Pinewood Studios, Talkback Thames, the National Film Theatre, Universal Studios, HBO and Abbey Road Studios. Leading studios have direct fibre optical connection to the Sohonet London Fibre ring. It uses Gigabit Ethernet, 10 Gigabit Ethernet and MPLS technologies including the use of wavelength division multiplexing on backbone connections. It has its own private optical fibre networks in several cities. Sohonet is also one of the pioneers of tapeless digital intermediate and is one of the instigators of the ProMPEG media dispatch protocol. It supports all types of media file formats. As a result of the establishment of Sohonet, and its ability to continue to innovate in its field, the increased client base and buying power of the company has allowed it to match its rivals and benefits its clients by utilising multiple carriers to ensure a higher level of reliability than single providers. Users of Sohonet do not merely access it for its transfer capability, clients also benefit from the absence of the dangers associated with the public Internet (piracy, viruses, unreliability etc.) and make use of consultancy and advice services offered by the company. This collaborative approach ensures that clients’ needs are met and that the network can continue to be reactive to its clients’ future needs.
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http://www.sohonet.co.uk http://en.wikipedia.org/wiki/sohonet 3 http://www.sohonet.co.uk/footprint.gif 2
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Lessons learnt: This appears to be an example of a market solution to a market problem on the assumption that the development of the network has been independently funded. Sohonet is a well known niche operator focusing on this specific market segment. The service provision is directly configured to the high transfer capacity needs of the film and TV industry. For a network such as Sohonet, its ability to offer security and reliability of transfer are the basis of its success. Sohonet appears to be a well-run self-sustainable commercial organisation. 4.7 International examples Some international connectivity examples are as follows: • MINAP: MINAP is a distributed Internet Exchange Point established in 2008 in Milan in the Caldera Campus. It is provides fast interconnections among members at no cost in order to improve latency and redundancy; • MSC-Malaysia is a dedicated 15 X 50 km Corridor, stretching from the Petronas Twin Towers in the north to the Kuala Lumpur International Airport in the south; and encompasses Cyberjaya (the Technology Core) and Putrajaya (the new administrative capital of Malaysia). Created in 1999, Cyberjaya is today home to many multinational companies such as Shell, EDS, Ericsson, BMW, HSBC, DHL and forms the nucleus of MSC-Malaysia; • France has opted to go straight to next generation access with fibre-to-the-business/home (FTTB/H). The government has set a target of 10 million homes to be covered by 2010; • The Multi-Use Network is a public-private partnership between the State of Colorado and Qwest to build a high-speed fiber-optic network. The cost $83 million split such that the state contribution was $23 million, with private investment of $60 million. The State acted as an anchor tenant to help leverage widespread development of telecommunications infrastructure. 4.8 Results from primary research On conducting interviews the general feedback on NorthernNet was very positive. The main questions that were raised during the interviews were based around the need to understand how the business would operate commercially to provide sustainability after the initial funding years come to an end. Three areas were examined in the primary research to explore potential network extension options to Northern NET. The key findings from research were as follows: Connection to Janet: • some form of peering with JANET is viewed as advantageous for both parties; • commercial creative industries could gain access to R and D from media led courses; • commercial creative industries could more easily use students for work experience which is hugely beneficial for both parties; • academics, as a matter of course, collaborate virtually and hence could offer some valuable lessons learnt to the commercial creative sector • academics could virtually access any services offered by NorthernNET • the main obstacle is to ensure there is no use of JANET for transit of commercial traffic -this could create problems of competition with other Telco Service Providers. Broader connectivity such as MaNAP • MaNAP is one of Europe's most mature Internet Exchanges. Membership is open to all operators of Autonomous Systems who are willing to sign MaNAP's Memorandum of Understanding; • for the NorthernNet users this means, for example, that instead of building network and data centres for individual storage and back-up solutions, they can be run far more cost-effectively over the existing NWIX network infrastructure; • this connectivity could provide 2 benefits o access to the MaNAP network which is already used by the likes of the BBC,therefore working in with the Media City Hub;
o
access all over the UK and Europe through their network as well as cost effective datacentre provision. 14
Connect to other networks • South East Media Network o South East Media Network is a business led consortium providing strategic focus for the regions digital content sector, it exists to enable the South East of England's digital content businesses increase their share of the global market. o SEMN provides two way communications between businesses, policy makers and support organisations. It informs local, regional and national strategies and drives improvement in business performance. SEMN engages with organisations and key stake holders from across the supply chain to ensure that support for digital content businesses is integrated and easy to access. SEMN is backed by the South East England's Development Agency. o 'South East Media Network exists to enable South East England's digital content businesses to increase their share of the global market' achieving this by providing strategic focus for the region's digital content sector: Analysing global market trends and their implications for the region’s businesses Leading the region’s response to those trends and implications Identifying new business opportunities for South East companies and facilitating the collaborations needed to exploit them Providing a gateway to make it easier for businesses to find the support they need to exploit new business opportunities Being the ‘ambassador’ for the South East’s digital content sector • NYnet o NYnet is a public sector led, open access, broadband infrastructure initiative that has created a backhaul infrastructure to 12 points of presence in North Yorkshire. This was done using aggregated public sector demand. o Learning from NYnet, establishing a business case is key together with a clear mandate for what NorthernNET is trying to achieve. 4.9 Conclusions There has been significant investment in the infrastructure to support the MABs and NorthernNET. Care must now be taken to ensure that there is a sustainable business model to support this investment after the public subsidy is withdrawn. Our analysis indicates that there may be benefit from establishing a peering point with JANET to encourage the collaboration with universities. This would take the form of a gateway between the two different networks and enable students and academics to send data securely and efficiently directly to commercial NorthernNET members. In addition, they will be able to access any services such as a member’s portal, which is an extremely valuable resource for all involved. This is likely to be a low cost investment however further work is required to understand how the two networks technically could interface. In addition, there are clear guidelines as to the types of organisations allowed to connect to JANET which can be found in JANET Connection Policy4. In future there may be a case, as the international traffic on NorthernNET grows, to extend this capability. This could be done either through commercial discussions with Virgin or through external connection with another network such as MaNAP, however this is likely to be driven by demand (and subsequent revenue) by the NorthernNET membership. That said, there may be benefits to connection to MaNAP to enable the NorthernNET membership to connect more readily to existing data centres. This is not a straightforward exercise since the NorthernNET can not directly interface with the Neutral Access Point (requirement for an Autonomous System Number). It may be simpler to encourage a data centre to the NorthernNet as a member. Establishing links with existing national and international network should be explored. There may be value to connecting virtually to these networks by establishing links to share intelligence and best practise. However in the first instance this does not require a physical connection. 4
http://www.ja.net/documents/publications/policy/connection-policy.pdf 15
Most importantly NorthernNET needs to establish its business proposition to customers. SohoNET have done this by focusing on security and reliability of transfer – this may also be a valid message for NorthernNET. In addition, a sustainable business case should be established with a clear mandate for what NorthernNET is trying to achieve.
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5.0
KNOWLEDGE TRANSFER, INTELLECTUAL PROPERTY & SUPPLY CHAIN INNOVATION
This section includes the research that was conducted in the areas of Knowledge Transfer, Intellectual Property & Supply Chain Innovation. This includes case study research, insight from primary research and conclusions drawn from the research. 5.1 Case Studies This section provides a summary of the seven initiatives to illustrate collaborative best practice in the Digital & Creative sectors. The initiatives investigated were • ICS; • Pervasive media & HP labs; • Xmedia; • Israel; • Finland & Sweden; • Crossover Labs; • BTween. Each of these initiatives is discussed in detail below. 5.2 ICS - Hillington Park Innovation Centre Context and History In January 1999 the Scottish Enterprise Board approved £5.6m over 5 years in funding for the Hillington Park Innovation Centre. The Centre is a unique public/private partnership between Scottish Enterprise Renfrewshire (SER) and Caledonian Land/MEPC. Caledonian Land invested £3.3m in the Innovation Centre with support from SER and Strathclyde European Partnership. The Centre was designed to provide high-quality business startup and incubation space for firms that were deemed to be "innovative". Incubators often require full public-sector financial support. For this project, Caledonian Land: gave a commitment to support the project for 10 years; made investment amounting to over 40% of the financial costs associated with building and running the Centre; and gave directorial commitment to the project’s wider economic development aims. Scottish Enterprise Renfrewshire provided a rental guarantee to Caledonian Land for the first five years of operation in return for gaining a commitment that the Centre would be run as an incubator for the subsequent five years. The rental guarantee was structured so that Scottish Enterprise Renfrewshire covered 100% of the rental costs during the first year and 50% of the rental costs for years two through to five Process The strategic aim of the Hillington Park Innovation Centre is to create the premier incubation and company building mechanism in the UK. Its mission is to support the development and creation of the next generation of knowledge-based, high-growth technology companies in Scotland by providing critical solutions and connections. The ambition is: • To have the Innovation Centre process of incubation regarded by the SE network as best practice; • That this model be considered for existing and new incubator projects; • The centre management company be one of the preferred suppliers for managing incubation projects; and • A key company building mechanism for the ITIs. The key differentiator offered by Hillington is access to: • A network of entrepreneurs – partners that offer credibility; • A network of experts – people embedded in the market who can add real value to tenants; • A network of executives – a resource that makes things happen. Outcomes Since opening in November 2000, the Centre has supported 128 companies of which 46 have graduated, 18 ceased trading and 41 current clients. Of these client companies 110 are still trading. The Centre has
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65 suites with additional meeting and conference facilities. It was designed and purpose-built to provide an environment conducive to innovation and creativity. The Centre comprises a striking modern office space located at the Hillington Industrial Estate to the west of Glasgow. It was a purpose-built building of 3,600 m2 gross. The building offers 2,600 m2 of letable floorspace that comprises 65 units ranging in size from 13 m2 to 76 m2. There is a central telephone reception and calls are routed through the reception to each individual unit. In addition, there are dedicated meeting rooms and a central meeting space adjacent to the in-house cafe. There is a large "board room" that has been finished a high specification in terms of fittings and presentation equipment etc. The Centre has exceeded all expectations and this early success, highlighted by the external evaluation, and the initial impact of the wireless pilot led the Centre management group and SE Renfrewshire o reassess the Centre and its strategy. A report that provides an evaluation of the Hillington Park Innovation Centre (HPIC)(undertaken between late 2004 and early 2005) states “the project has made good progress against each of the objectives that were set for it by the Enterprise network�. Future prospects SER and the Centre management group are conscious that to achieve the strategic ambition, changes in the external environment and developments within the SE Network need to be taken into account, for example, scanning technology opportunities, introduction of the ITIs and Globalscot, etc. The imperative is to ensure the implementation of new ideas and improvements in the operations of the centre so that the centre continues to be leading edge in incubation. Based on the environmental, network analysis and the recommendations from the external evaluation a number of development areas and initiatives to address these areas were identified. These are outlined in the table below. Centre operating structure
The ambition is to create the premier incubation and company building mechanism in the UK and to make a broader contribution to the Scottish economy by having the Centre’s model regarded as best practice in incubation. Early discussions with SE regarding future incubation and company building mechanisms indicate that the long-term strategy is likely to be a model in which the private sector takes a far greater role in the incubation, business development and funding of ITI created companies.
Improve the intensity and quality of business development support
What sets the Innovation Centre apart from other company building mechanisms is the scale and intensity of the service and the significant benefit of community. However the success of the Centre is dependent on continually striving to improve the level of service provision and moving as rapidly as possible along the business incubation life cycle to achieve the highest level of value added services. In order to offer these higher value added services the Centre requires additional resources. The funding to provide additional resources is sought from an ERDF application currently in the approval process. These resources will include specialist support for sales and marketing, investor readiness, technical and market research and an expanded seminar and workshop programme. The Centre clients will be a direct beneficiary of the Co-investment Fund. This is an innovative new scheme developed to address the market failure in early stage investment. The investment community recognises the value of the support on offer at the Centre and are more willing to invest in these new ventures.
Cluster focus and development of key core competencies
The Wireless Innovation project was identified based on there being a clear market opportunity to support companies in a global growth market. It is important to understand that this is just one component in the overall development of the Centre as providing leading edge business development support. The Centre will continue to scan the horizon to identify new 18
emerging opportunity to support the growth of Scottish technology companies. The Wireless Innovation project’s aim is to create a true centre of excellence in the wireless industry, a centre that will improve the competitive advantage of companies throughout Scotland. The recognition of the wireless project by the business community at a national level is an important step in raising the Centre’s Scottish profile. This will also help influence the SE Network and the Scottish Executive’s perception of the Centre’s value to the Scottish economy. Linkages with Intermediary Technology Institutes (ITIs)
The Centre strives to attract the best quality technology projects in Scotland. The Intermediary Technology Institutes (ITIs) will require various company building mechanisms to develop new technology start-up companies. The Centre is well placed to provide this mechanism, particularly for IT Techmedia in Glasgow. Nowhere else in Scotland is there a centre that brings together some forty innovative companies into one building together with the intensive support and access to entrepreneurial networks. The ITIs are still under development; however, SER and the Centre Director have established contacts within SE to ensure that the Centre is well placed to meet the requirements of the ITIs.
International/Global focus
The Centre has established links with other European incubators and science parks in order to share best practice and provide a framework through which centre tenants can establish strategic partnerships and technology transfer projects, for example the work with the Finnish science park. A good working relationship exists with Scottish Development International. The Centre is often a feature of events and presentations arranged through SDI. The wireless project has generated much interest from the SDI staff in the Boston office and this relationship is continuing to develop.
It is recognised that there is still a lack of provision of high quality office accommodation within the immediate area to meet the growth requirements of graduating companies. 5.3 Pervasive media & HP labs Context and History National and regional government strategy in the UK has indentified the Creative Industries as a sector in which the relationship between innovation, knowledge transfer, productivity and marketplace performance is integral to market success5. Pervasive Media Studio has been established to work as a facilitator and a broker of new partnerships in the Creative Industries. Pervasive Media is a collaboration between Watershed, the UK’s first dedicated media centre, and HewlettPackard Laboratories’ Bristol research facility and the South West Regional Development Agency. Watershed Arts Trust Ltd. is a company limited by guarantee, which has operated cinemas, undertaken events focused on digital media, delivered workshops and delivered training and development in these areas. The Studio itself is funded and partnered by a variety of stakeholders: Arts Council England South West; Bristol City Council; South West Screen; South West Regional Development Agency, University of the West of England and TLT Solicitors. The Pervasive Media project was borne out of the Mobile Bristol programme6, which was concerned with exploring how mobile devices and pervasive information technology could be used to enhance how residents and visitors experience and interact with their physical environment. Watershed and HP Labs also collaborated on the SE3D project in 2004, which led to 11 new 3D animations from new UK talent, which have featured around the world. Pervasive Media Studio, therefore, builds upon these previous
5 6
http://www.watershed.co.uk/news/reports/casestudy_hp.pdf http://www.mobilebristol.com/ 19
examples of knowledge transfer and collaborative working, and was opened in early 2008 by UK Chancellor Alistair Darling. The Pervasive Media Studio aims to bring together the computing, communications and creative industries within a dynamic, cutting-edge workspace to explore these opportunities; researching how new technologies could be used and what experiences could be created by growing this pervasive media environment.7 The project has a mission based on a collaborative approach and is described as an “open innovation programme”. The project has established links in academia with the University of the West of England (UWE) and the University of Bristol. The precise status of Pervasive Media Studio is unclear from publicly available information. Essentially, it is a “project” supported by the named partners and we would anticipate that much of the direct funding comes from The RDA with some in-kind and cash funding from the other partners. The level and duration of this funding has not been disclosed. Bristol is located in the South West region of England. The region has an economy worth £90bn annually, with the creative industries accounting for a substantial amount of the economy, valued at £9.3bn. Approximately 5m people live in the South West, and the region is increasing its population at a faster rate than that of the UK as a whole (3.9% compared to 2.5% since 1991). The region is home to Aardman (the creators of Wallace and Gromit), the BBC’s regional headquarters and Natural History Unit. Bristol has had for a number of years a thriving creative scene of which the Watershed is an integral part, summed up by the British Film Institute: “Watershed is not only a regional model of excellence, but a venue of national importance to which cinema programmers and venue directors across Britain can look for inspiration.” Process Pervasive Media Studio has, since its inception, hosted a number of events focused on ideas exchange and discussion. Such events range from ‘Skillswap’, designed to be open presentations on a variety of topics including databases, CMS project followed by discussion and analysis involving both participants and audience, to ‘Open Studio Fridays’ which invites any interested parties to come and brainstorm their new ideas with Pervasive Media provided the venue to facilitate such co-working. The Studio has also played host to recruitment events, including Pivotal Games (the South West’s largest computer games studio), which aimed to bring the potential employer into contact with their future employees. Outcomes A number of projects have been initiated at the Pervasive Media Studio in the time it has been operational. These projects include:
•
• •
The Sky Remains8. A groundbreaking Alternative Reality Game (ARG) developed by studio residents that combines interactive narrative, social networking and GPS-based technology. The project brings together the innovative creativity of HP’s pervasive computing researchers, and the artistic creativity of Licorice Films9 to create a game in which gamers are detectives collecting clues from the internet and also their physical environment. Graduate Residencies. The Studio currently has three UWE students carrying out 3-month residencies: Haywood Slucutt10, George Crabtree and Helen Bentley11. The Sensory Symptom12. This interactive project was conceived through a two-week collaboration between the Punchdrunk theatre company and HP Labs. The project demonstrates the feasibility of 7
http://www.southwestrda.org.uk/news/release.asp?ReleaseID=2315
8
http://www.theskyremains.com http://www.licoricefilm.com http://www.pmstudio.co.uk/project/haywood-slucutt 11 http://www.pmstudio.co.uk/project/george-crabtree-and-helen-bentley 12 http://www.pmstudio.co.uk/project/the-sensory-symptom 9
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theatrical experiences driven by interactive spaces and provides and early understanding of their requirements. Lessons learnt Business Model This looks like a good example of partnership working between an existing studio, private sector participant and economic development agency;.
Engaging Firms The project has successfully levered an existing facility to encourage participation. Its “open” approach is likely to be positive in engaging businesses.
Process There appears to be a particular focus here on encouraging creative brainstorming in a local environment within which participants are comfortable.
Outcomes It is arguably too early to draw conclusions as to the achievement of outcomes from this project.
A range of collaborative events have been fostered, which participants can engage with without the degree of formality and commitment required for some of the other initiatives. However, the focus is again on face-to-face contact.
5.4 Xmedia Context and History XMediaLab was established in 2003 and is directed by its founder, Brendan Harkin. XMediaLab aims to help individuals, start-ups and small companies to bring their ideas and creations to market, assisted by mentors and practitioners who are highly experienced in the digital media industries13. It positions itself as “the internationally acclaimed digital media think tank and creative workshop” and has delivered high profile events in each of Australia, China, India, New Zealand, Singapore, South Korea and the Middle East. It now claims over 200,000 hits per month on its web site. XMediaLab was originally part of the Sydney Film Festival and has now been held in six ‘media hotspots’ throughout the world, namely Australia, Singapore, China, India, the Middle East, New Zealand and South Korea. The “x” is described as relating to each of “cross-disciplinary”, “intersections of people, skills and ideas”, “A crossing over”, a place of “hidden treasure” and “the unknown”. The “labs” are events, with each Lab taking place over three days. The first day is a Keynote Conference open to all interested parties, which is followed by the two-day Lab itself which involves a number of preselected projects. Participants in the labs are from varied backgrounds: start-ups, creatives, media arts centres, R&D institutions, large corporations looking for ideas, venture capitalists, government agencies, independent advisors and successful mentors from around the world. This mix of participants contributes to the overall experience of the Lab and aims for a cross-platform, cross-discipline and cross-cultural exchange of ideas and collaboration.
13
http://www.xmedialab.com 21
Process XMediaLabs are based on the Open Space Technology facilitation process developed by Harrison Owen in the early 1990s. The process can be used with groups of 5 up to 500 and is particularly effective when a number of people must address complex and / or conflicted issues in a short period of time, with high levels of innovation, ownership and synergy14. It can be summed up thus:
“It is a self-organising practice of inner discipline and collective activity which releases the inherent creativity and leadership in people. By inviting people to take responsibility for what they care about, Open Space establishes a marketplace of enquiry, reflection and learning, bringing out the best in both individuals and the whole.”15 The aims of an Open Space meeting are to build energy, commitment and shared leadership; for participants to accept responsibility for what does or doesn’t happen; for action plans and recommendations to emerge as appropriate and to create a record of the entire proceedings as they go along. In the particular case of XMediaLabs, self-managed and self-selecting discussions have a general media theme which varies depending on the Lab itself. Each project team selects to whom they wish to talk to about their idea, ensuring that at any time, there are no participants who are stuck in an uninspiring situation. Importantly, all the Intellectual Property of the projects that are part of the Labs is protected. Each participant recognises each other participant’s prior and subsequent ownership of any IP that is presented in any form and any communications that occur within the Lab are non-binding, non-obligatory and nonproprietary. Testimonials and Outcomes Examples of the events delivered include: Location Wellington (New Zealand)
Theme Commercialising Ideas
Comments Keynote conference was attended by over 250 digital media professionals and over 60 digital media firms put forward projects to the “lab”. Suzhou Wealth of Animation Involved very high profile keynote speakers (China) from the world of animation addressing four themes through keynote presentations and the “business matching forum”: animation industry development; international business opportunities; quality assurance and management and technologies and skills. Seoul (South 3D Internet: “Virtual, Organised as part of the Korean Korea) Visual, Social” Government’s ICCON Expo Melbourne DIY TV Focused on the opportunities created by (Australia) video on demand and again including a mix of Keynote Speakers and the “lab”. All of the events follow a similar pattern, with Keynote Sessions being general admission and firms / projects being invited to take part in the labs. Some examples of the projects invited to take part in the various labs (not only those highlighted above) include:
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Switch.tv16 (Mumbai 2007 – Digital Entertainment)
14 15 16
http://www.freechild.org/firestarter/openspace.htm http://www.openspaceworld.org/tmnfiles/2pageos.htm http://www.switch.tv 22
•
VastPark17 (Melbourne 2007 – Digital Worlds: Social, Virtual, Mobile)
•
Leningrad Cowboys TV Shop18 (Singapore 2007 – Media Art&D)
•
Futurelab Futures Programme19 (London 2007 – Virtual Worlds)
Xmedia Labs are able to point to very many positive testimonials both from participating speakers / mentors and from firms /projects put forward to the labs:
• • • •
“An absolutely enriching experience.” Mohamed Nanabhay, Head of New Media, Al Jazeera “What a wonderful experience. A unique event which gathers a tremendous pool of talent together. Amazing.” Tom Duterme, Business Development Manager, Google “Very effective and fruitful. XMediaLab leaves a deep impression.” David Liu (Liu Yan), CEO, China Recreation District “I learned more in the three days than in the previous three years!” Adam Bryce, Global Trend Forecaster, Nike
Lessons learnt Business Model XmediaLab is a commercial organisation delivering these events on a paidfor basis; it seems likely that some support from national and local government bodies towards the events is secured.
Engaging Firms The quality of marketing of the events is extremely professional and high profile Keynote speakers are used to maximise participation.
Process A standard, structured process for the events (Keynote Conference, followed by “labs”) is used. The “open space” approach is greatly valued.
Outcomes Much positive feedback is evident and the continued roll out of the events suggests that participants gain significant benefit.
The events have mainly been confined to the southern hemisphere so far.
5.5 Israel Context and History In the early 1980s, Israel staggered under hyperinflation of more than 500 % per year. As the decade progressed, the government embarked on an ambitious economic stabilisation plan, but it was only in the 1990s, with the move to a flexible exchange rate and the use of monetary policy to tame inflation, that Israel managed to turn its economy around20. Historically, Israel as a country has very limited natural and financial resources. As such Israel’s scientists and engineers have constantly been faced with the requirement to be innovative in finding solutions to problems, such as drip irrigation (in response to the country's limited water resources) or the Merkava tank (as part of a wider effort to develop a home-grown defense industry)21. Thus history and geography have made Israelis adept in problem-solving and innovation. Israel’s R&D prowess rapidly expanded out of the military sphere, the universities and research institutes during the 1990s to create what has come to be known as a model high technology economy.
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http://www.vastpark.com http://www.anima.fi 19 http://www.futurelab.org.uk 20 Devi, Sharmila, The Finanical Times (13/02/2007) http://search.ft.com/ftArticle?queryText=israel+cluster+sector+&aje=false&id=070413009685&ct=0 21 Simon Griver (2001), Israel Ministry of Foreign Affairs Magazine: http://www.mfa.gov.il/MFA/MFAArchive/2000_2009/2001/1/Facets%20of%20the%20Israeli%20Economy%20The%20High-Tech%20Secto 18
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Many of Israel’s finest innovations have their roots in the Israel Defense Forces. Highly trained graduates of the Israel Defence Force apply cutting edge defense technology to market changing civilian applications22. In November 2007, the Financial Times reported the country’s leading share index was up a third compared to the start of the year and unemployment had decreased significantly within the previous 4 years from 11% down to 7.8 %23. Investment banks such as Morgan Stanley forecast that not even the economic slowdown in the USA will prevent Israel’s economy from continuing to grow. Such prosperity is due to two long-term trends. Firstly, Benjamin Netanyahu’s work as finance minster (2003 - 2005) brought about trends of tax cuts, lower welfare spending, privatisation and capital market reforms. Secondly, Israel is successfully integrating itself into the global economy - which has proved an increasingly receptive market for its exports of high-tech products, manufactured goods, pharmaceuticals and services such as consulting24. Leo Leidermann, chief economist at Bank Hapoalim, Israel’s largest commercial bank believes such success stems from Israel’s successful exploitation of globalisation25. Facts and Figures According to research into high-tech clusters published by Library House26, Tel Aviv is the third most significant cluster in Europe and Israel, behind just London and Paris. Although politically, Israel lacks stability with continuous boundary disputes with its neighbours Pakistan, its economy is booming, thanks in no small part to its growing high-tech sector. Whilst Israel’s over-reliance on software and IT exports made the company a prime victim of the technology downturn in 2000, the country’s current export performance is far more balanced27. Today nearly 1 in 10 Israeli works in the high-tech sector, and in 2006, some 3,500 start-up companies were created in the country’s sector, second in number only to the US28. Israel is a global leader in water conservation and geothermal energy, and its development of cutting-edge technologies in software, communications and the life sciences have evoked comparisons with Silicon Valley (the coastal plain of Israel is known as Silicon Wadi). More companies from Israel are listed on the
Nasdaq in New York than any other country other than the US and the exchange even has an Israel Index29. Computer giants Intel and Microsoft both built their first overseas R&D centers in Israel, and other hightech multi-national corporations, such as IBM, Cisco Systems, and Motorola, have opened facilities in the country. In July 2007, U.S. billionaire Warren Buffet's Berkshire Hathaway bought an Israeli company Iscar, its first non-U.S. acquisition, for $4 billion30. Such attributes and global reach stand testament to the country’s top ranking on the World Bank’s Ease of Doing Business Index in the Middle East as well as in the World Economic Forum’s Global Competitiveness Report31. Strategy and Drivers of Success Scientific research has been eminent throughout Israel in the 20th Century. Institutes such as the TechnionIsrael Institute of Technology founded in 1924 in Hafia, the Hebrew University of Jerusalem founded in 1925 and the Wizemann Institute of Science founded in 1934 in Rehovolt (now ranked third in the world in
22
http://www.diplomatist.com/pdf/israel.pdf Israel’s Economic Growth Defies Experts http://www.ft.com/cms/s/0/ed8b5714-8b2a-11dc-95f70000779fd2ac,dwp_uuid=50b45d26-5b63-11da-b221-0000779e2340.html?nclick_check=1 24 Israel’s Economic Growth Defies Experts http://www.ft.com/cms/s/0/ed8b5714-8b2a-11dc-95f70000779fd2ac,dwp_uuid=50b45d26-5b63-11da-b221-0000779e2340.html?nclick_check=1 25 (ibid) 26 Looking Inwards, Reaching Outwards – The Cambridge Cluster Report (2007) 27 Israel’s Economic Growth Defies Experts http://www.ft.com/cms/s/0/ed8b5714-8b2a-11dc-95f70000779fd2ac,dwp_uuid=50b45d26-5b63-11da-b221-0000779e2340.html?nclick_check=1 28 Devi, Sharmila, The Finanical Times (13/02/2007) http://search.ft.com/ftArticle?queryText=israel+cluster+sector+&aje=false&id=070413009685&ct=0 29 Devi, Sharmila, The Finanical Times (13/02/2007) http://search.ft.com/ftArticle?queryText=israel+cluster+sector+&aje=false&id=070413009685&ct=0 30 The MAGNET Clustering Efforts in Israel (2008:10) 31 The MAGNET Clustering Efforts in Israel (2008:10) 23
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creating revenue from technology transfer32) all preceded the existence of the Israeli State and attracted many highly educated Jews fleeing Nazi Europe during World War II33. After Israel’s hyperinflation and economic crisis of the 1980s, the economy recovered in the early 1990s, achieving a stable economic environment. Subsequently, a million immigrants from the former Soviet Union – including many university graduates and highly educated scientists and computer programmers started to pour into the country. Figures from the 1990s show that the number of employed engineers in Israel was nearly double that of the USA and Japan (135 in every 10,000 employed compared to 70 for the US and 65 for Japan)34. Such an influx of talent brought many innovative ideas to the country and is recognised by the Israeli Ministry of Foreign Affairs as one of the ‘prime catalysts that propelled [the hightech] industry to today’s level’35. Israel also has a culture of incubation and venture capital that nurtures its high-tech sector. In 1991, the Ministry of Industry, Trade and Labour created its programme of technological incubators and today there are 24 incubators spread across Israel that have helped more than 1,000 start-ups with premises, guidance and finance36 and the country now has the world’s highest investment in R&D per GDP. Following on from the successful uptake of the incubator initiative, a year later in 1992, the government started a funding initiative called Yozma which raised some $200 million in the first wave of venture capital investment , using subsidies to establish 10 venture capital funds with private-sector strategic partners from Israel, the US or elsewhere. Thus Israel’s international ties within the market began to take shape and were strengthened after the Oslo Accords of 1993 that, at the time, formed a milestone in the quest of forming a peaceful agreement between the Palestinians and the Israelis. Large international companies began to invest heavily in R&D centres in Israel and the country has recently experienced an influx of foreign investment. Several large international firms have also acquired Israeli companies in recent years, for example Siemens acquiring Ornet for its LAN-switching equipment and Johnson & Johnson acquiring the biotechnology company Biosense. In 1994, the government launched its MAGNET (Generic Pre-Competitive Technologies and R&D) programme, which was designed to allocate substantial financial resources to generic projects and which today includes 41 clusters. The programme aims to encourage collaboration between HEIs and businesses, to strengthen Israel’s high-tech expertise and competitiveness, to encourage collaboration between firms, and to efficiently allocate limited financial and professional resources. Future Prospects The Silicon Valley and other such clusters have enticed many Israeli researchers and scientists away from their home-country and the government is making a concerted effort to reduce this ‘brain drain’ and tempt them back, with a specialist government team enforced with this task37. Education has been subject to budget cuts in recent years, particularly to higher education and science, and entrepreneurs want this reversed. Eitan Broshi, director-general of the science and technology ministry, warned in 2007 that the Nobel prizes won by Israeli scientists are based on achievements from a generation ago38.
32
http://www.diplomatist.com/pdf/israel.pdf Simon Griver (2001), Israel Ministry of Foreign Affairs Magazine: http://www.mfa.gov.il/MFA/MFAArchive/2000_2009/2001/1/Facets%20of%20the%20Israeli%20Economy%20The%20High-Tech%20Secto 34 http://www.mfa.gov.il/MFA/MFAArchive/2000_2009/2002/5/High-Tech%20Opportunities%20in%20Israel 35 http://www.mfa.gov.il/MFA/MFAArchive/2000_2009/2002/5/High-Tech%20Opportunities%20in%20Israel 36 Devi, Sharmila, The Finanical Times (13/02/2007) http://search.ft.com/ftArticle?queryText=israel+cluster+sector+&aje=false&id=070413009685&ct=0 33
37
Devi, Sharmila, The Finanical Times (13/02/2007) http://search.ft.com/ftArticle?queryText=israel+cluster+sector+&aje=false&id=070413009685&ct=0
38
Devi, Sharmila, The Finanical Times (13/02/2007) http://search.ft.com/ftArticle?queryText=israel+cluster+sector+&aje=false&id=070413009685&ct=0
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5.6 Finland & Sweden Context and History Since the beginning of the 1980s, the Scandinavian region has been acknowledged world wide as the heart of the wireless industry. The analogue mobile technology Nordic Mobile Telephone (NMT 450), the first fully automated cellular phone system, was created in Sweden in 1985 and the GSM vision was created in 1987 when a whole group of operators from thirteen countries signed a Memorandum of Understanding in Copenhagen. There were 15 signatures in total: France, Germany, Italy, Sweden, Norway, Denmark, Finland, Spain, the Netherlands, Belgium, Portugal, Ireland and, from the UK, two independent operators - Cellnet and Racal-Vodafone39. Many of the leading companies in this field have their origins in Scandinavia – companies like Nokia and Ericsson - and Scandinavia has become a main focus of a global industry that has continued to grow over the last 20 years. According to the World Bank’s 2007 Knowledge Economy Index, Sweden has the world’s most advanced knowledge economy, moving up from 9th position in 1995 and overtaking many of its Nordic neighbours including Finland and Denmark. The World Bank states that such an achievement reflects strong advances in the EIR (rule of law), innovation (royalty and license fees payments and receipts, published journal articles and patents granted by the USPTO), education (tertiary education enrollment rates) and notably, ICTs (telephone, computer and Internet penetration)40. Finland, which held second position in 1995, has moved down to fourth position. In Sweden at present there are fast-growing clusters in telematics and visualisation producing exciting new applications for traffic and transportation systems, entertainment, design, simulation, data imaging, and bio-informatics. Ericsson owns a vast portfolio of wireless patents and is the obvious center in Swedish wireless technology. The WCDMA third-generation mobile technology now being deployed across the world was largely developed by Ericsson as were the wireless technologies NMT, GSM, GPRS and Bluetooth. Sweden’s wireless market is dominated by the three GSM network operators TeliaSonera, Tele2 and Vodafone. Overall some 20 mobile service providers are active41. Like its fellow Scandinavian neighbour, Finland is also well known for its innovation. Renowned technologies and services originating from Finland include Linux, the SMS, ring tones and Internet banking services. Finland is also known as a pioneer in telecommunications. Finnish developers have had a strong influence, for example, on the development of GSM and UMTS standards.
Facts and Figures The European Cluster Observatory recognises one IT cluster in Finland (Helsinki) and three communications clusters (Helsinki, Turku, Oulu). In Sweden, the ECO recognises one IT and one communications cluster both in Stockholm. Over the past decade, the ICT sector has grown to become one of Sweden’s major industries. In the private sector, almost 20 percent of the workforce is engaged in ICT services and electronics. The Swedish wireless industry today span some 500 companies ranging from leading wireless infrastructure company Ericsson to a rapidly growing number of mobile application developers42. With detailed knowledge of systems, Swedish companies are among the leaders in convergence and integration of telecom technologies and services. The strong telecom culture, with 1,200 information and communication firms and a number of ICT-intensive multinationals, make Sweden a one-stop shop for foreign ICT investors. In Finland, over the past decade, the number of R&D personnel has grown from 40,000 to nearly 80,000 and relative to the GNP, the Finnish R&D investments are the third largest in the world. Perhaps accordingly, the number of patents, especially in the ICT field, is among the highest of the world, when proportioned to population 43. According to Statistics Finland, the ICT sector included approximately 6,600 companies in 2005. The combined number of employees in these was approximately 109,000, and the 39
http://www.wirelessscandinavia.com/sw185.asp The World Bank Knowledge Economy Index 2007: http://siteresources.worldbank.org/KFDLP/Resources/461197-1170257103854/KEI.pdf 41 ICT in Fact: http://www.isa.se/upload/english/publications/ict_infact_2006.pdf 40
42 43
ICT in Fact: http://www.isa.se/upload/english/publications/ict_infact_2006.pdf Information on the Finish ICT Field (2007:5) 26
turnover was nearly EUR 50 billion, forming more than 10% of the country’s GNP. The twenty largest companies produce most of the sector’s turnover44. Strategy and Drivers of Success Both Sweden and Finland’s ICT clusters have developed in a large part around the country’s two leading Wireless companies; Ericsson in Sweden and Nokia in Finland. Ericsson owns a vast portfolio of wireless patents and is the obvious center in Swedish wireless technology. The WCDMA third-generation mobile technology now being deployed across the world was largely developed by Ericsson as were the wireless technologies NMT, GSM, GPRS and Bluetooth45. Similarly, Nokia is a central operator in the Finnish mobile cluster with most of its R&D operations located in the country. Practically all Finnish companies involved in mobile technology have a direct or indirect connection to Nokia46. Both countries allocate a large proportion of their resources to R&D, another factor that has driven the success of the Wireless industry. In Sweden, 3.6 % of GDP is poured into R&D every year which places Sweden at the very top of the world league, and Finland is not far behind coming a close third place. Aside from such companies acting as anchors and attracting many spin-out companies, both Sweden and Finland benefit from two of the world’s most modern high-speed broadband infrastructure, thanks to an extensive fiber optic networks that offer open access to providers. Such infrastructures support vibrant ICT clusters specialising in wireless and networking technologies. Both countries also invest heavily in their education systems and have a highly skilled workforce, a large proportion of which speak fluent English. In Sweden, around a third of all people in higher education are enrolled in ICT-related programs. Swedish universities churn out 1.24 new PhDs in science end technology per 1,000 inhabitants, placing Sweden well ahead of any other nation. Swedish universities and research institutes are undertaking a large number of ICT-related research efforts and are at the forefront in the areas of wireless systems, signal processing and microelectronics. In addition, mobile services and understanding the consumer are quickly taking on a prominent role at universities and research institutes. The four most important universities from a wireless perspective are the Royal Institute of Technology together with Kista IT University in the Stockholm region, Chalmers University of Technology in Göteborg, Lund University in the Öresund region and Linköping University in central Sweden. Together they account for the bulk of wireless research, but there are 29 other schools throughout Sweden that are also engaged in wireless R&D to some extent47. Lund University in particular is likely to become increasingly significant due to the Oresund Science Region developing out of a transnational initiative between Denmark and Sweden to try to achieve synergies from co-operation from two adjoining areas, now linked by a bridge, which both have strengths in medicine/biotech and IT/telecoms. It is not a ‘top-down’ initative by central governments, but a ‘bottom-up’ one, involving the public sector (local and regional), business and the universities48. In Finland, the Ministry of Education launched an action programme in 2004 designed to broaden the general level of training to strengthen the research activities in the ICT field and improve the quality of the workforce in this sector. The successful implementation of the programme is already reflected in the increasing number of graduates in the field and the growth is expected to continue in the future as well. There are 20 universities in Finland, all of which are owned and largely funded by the Finnish government. University studies are available to all, in principle, as Finnish universities do not charge term fees. Educational attainment in Finland increased significantly throughout the 1990s. Enrollments in universities and other higher education rose considerably, and today younger generations are viewed as very highly educated in comparison to other international standards49. The World Economic Forum ranks Finland as first out of 125 countries for their education system50. Helsinki holds the premier technology university in Finland, Helsinki University of Technology (TKK), which was founded in 1849. TKK’s Department of 44
Information on the Finish ICT Field (2007:11) ICT in Fact: http://www.isa.se/upload/english/publications/ict_infact_2006.pdf 46 Information on the Finish ICT Field (2007:30) 45
47
http://www.isa.se/upload/filer/pdf/isa_wireless2004.pdf Greater Cambridge Partnership, Economic Interventions for the Greater Cambridge Sub-Region (2006:53) 49 http://www.tieke.fi/mp/db/file_library/x/IMG/13751/file/ITC-finland_050322_LR.pdf 50 http://www.weforum.org/pdf/Global_Competitiveness_Reports/Reports/gcr_2006/finland.pdf 48
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Computer Science and Engineering is its largest faculty and leading educator in its field in Finland. The department is known for its internationally recognised research groups and degree programs and, relevant to the wireless sector, the department holds a telecommunications software and multimedia laboratory. The World Economic Forum’s competitive rankings also shed light on the success behind Sweden and Finland’s ICT sector. The organisation’s 2008 country economic profiles identify Sweden as holding first place in a ranking out of 131 countries for financing businesses through the local equity market, 1st place for the reliance on professional management and also for the efficiency of corporate boards, 4th place in terms of higher education enrollment, 1st place for the county’s availability of the latest technologies, and 5th place for laws relating to ICT51. The World Economic Forum identifies Finland as holding first place in a ranking out of 125 countries for having the most ethical behaving firms, 7th place in terms of quality of infrastructure, 1st place for their education system, 2nd place in terms of quality of maths and science education, 1st place in terms of technological readiness, 2nd place in terms of intellectual property protection and 1st place for the effectiveness of the country’s anti-trust policy52. Future Prospects A major trend in the industry is the conversion of broadband networks into multi-service networks characterised by the convergence of data, IP-telephony and TV over the Internet. Nordic mobile and wireless businesses are likely to have a central role in this next growth spurt of the technology market. In most of the previous significant growth periods, nearly all central businesses have been located in the United States (Microsoft, Cisco, Google, etc.), and such businesses have looked for partners within their domestic markets. Now the focus is turning onto the Nordic countries, the home of the two most significant mobile technology companies, Nokia and Ericsson. In order to be included in the next period of growth, the largest technology enterprises of the world will have to co operate with the current leaders in mobile technology. This new period of growth is only just beginning, but both Sweden and Finland are likely to benefit from related investments53. Leading the trend of convergence and integration within communication technologies the Scandinavian countries are paying special attention to technology areas such as photonics systems, mobile terminals, wireless systems and applications and services. 5.7 Crossover Labs Context and History Crossover Labs were first performed in the United States by Weblab54 and are currently directed by Frank Boyd of Unexpected Media and produced by Helen Croall of Sheffield Doc/Fest. Crossover is described as an international programme that is designed to explore the creative and commercial challenges of developing content and services for digital media by bringing together experienced and talented individuals from different sectors of the audio-visual industries, international experts and mentors to develop ideas for innovative cross-platform programmes, products or services55. The stated aims of the programme are to equip participants with the knowledge and skills to develop new media projects; explore new techniques for developing multi-platform programmes and services; encourage fresh thinking about interaction with viewers and users, through user-centred design processes; provide a framework for the development of concrete projects and the building of pitches and early stage concept prototypes. The founding partners of Crossover include Weblab, the South Australian Film Corporation, the Australian Government, the Australian Film Commission, the Adelaide Film Festival, Screen Yorkshire and the London Development Agency. However, the “supporters” for each Crossover Lab are described as regionally specific. Our understanding is that the events are funded by a combination of broadcasters and economic development agencies. For example, Crossover UK 2007 was funded by the London Development Agency, Screen Yorkshire, Channel 4 and the BBC as part of their cross-platform and digital
51
http://www.weforum.org/pdf/Gcr/profiles08/Sweden.pdf http://www.weforum.org/pdf/Global_Competitiveness_Reports/Reports/gcr_2006/finland.pdf 53 Information on the Finish ICT Field (2007:5) 54 http://weblab.org 55 http://crossoverlabs.org 52
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media strategies. NESTA is funding a pilot programme in 2008 that will provide places in three Crossover Labs: Crossover Docs, Crossover Kids, Crossover Games (this is part of its Raise Our Game” initiative). Process Each Lab is an event and includes a public pitch taking place around a related Festival or industry event such as Sheffield Doc/Fest, the Adelaide Film Festival and Nordisk Panorama. A Crossover Lab takes place over five days and creates a framework that allows new creative and commercial collaborations, and also affords an opportunity to explore new business models and markets56. With each Lab comes a theme (future Labs include Channel 4, Kids, Nordic, Games and Documentaries) and has its own committee specific to the theme which selects participants for each Crossover. Within each Lab, the aim is to bring together experienced professionals from filmmaking, new media design, games development, theatre and programming. Participants in Crossover are selected to maximise the potential for sharing across industry sectors and provides the platform for understanding how linear and non-linear production skills can be combined to deliver groundbreaking programmes and projects, and also foster new relationships across the various disciplines which can realise new creative and business opportunities. Importantly, all producers in the Labs own their own projects. However, all Intellectual Property that comes out of the brainstorming process is collectively owned by the Crossover participants. Outcomes and Testimonials Some examples of testimonials from past participants are as follows:
• •
• •
•
•
“By far the most genuinely productive course I’ve been on at the BBC.” Stephen McCrum, Producer, Two Pints of Lager and a Packet of Crisps, Grownups “Labs are a fantastic format for getting different creative minds to think, explore and collaborate on new ideas. The world of cross- platform content and distribution demands a range of skills from technical, creative, artistic and business contexts. Crossover is a perfect environment for talent to get together and really understand how creativity works in each others’ fields. I’ve found the Lab format the most effective and productive way of identifying and developing new ideas from cross-platform teams, and its a format we will be using more at Channel 4 as part of our cross- platform strategy.” Matt Locke, Commissioning Editor, Channel 4 “Without doubt, the most useful media course I have attended in a 20- year career in broadcast television.” Sonya Pemberton, Head of Specialist Factual, ABC “Very inspiring, I left buzzing with ideas. It was also great to share the experience with highly experienced filmmakers / commissioners and new media people. A very creative experience.” Georgie Weedon, Al Jazeera. “I consider it an honour to have participated. For me Crossover can make a wide, significant and lasting impact on both the broadcasting and new media sectors.” Matt Adams, Blast Theory “I attended the courses with very few expectations. On the first few days of the lab I was completely pushed outside my comfort zone as I was exposed to new information and new ways of thinking. These new skills were put to great practical advantage as the week unfolded. It was an amazing journey.” Kathryn Penny, Mezzo Films
A selection of projects borne out of the Crossover Labs process (though not necessarily under the brand name, but carried out by Frank Boyd) and are detailed below:
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http://nesta.org.uk/raisethegame 29
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The Museum of the Future and My Dangerous Lover Boy: Part of the first pilot Crossover Lab in the UK, and received development funding from the BBC, the National Film Board of Canada and regional screen agencies.
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Us Mob: Part of a Crossover Lab in Australia and received development funding from the South Australian Film Commission. Has been produced by ABC for the web with a broadcast component and is also being distributed to every school in Australia on DVD.
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BBC Innovation Labs: The process described above was used by the BBC and provided over 100 companies with the opportunity to develop and pitch ideas to BBC commissioners. Over the three years that the labs ran, approximately 50 development commissions were made.
Lessons learnt Business Model In this example, the “labs” are funded directly by broadcasters and economic development agencies without the direct input of other commercial organisations.
Engaging Firms The approach taken here is to piggyback onto existing festivals or industry events.
Process This is a very indepth process that is focused on sharing across platforms and parts of the creative industry supply chain. It is very much focused on face-toface participation in events.
Outcomes Some very positive feedback is evident regarding the nature of the process.
The general process of the “lab” is now tried and trusted across many sectors and geographies. 5.8 BTween Context and History b.TWEEN’s strapline is “where interactive ideas are seeded, shared and sold”. It was established in 2005 and aims to create ‘a dynamic environment where b.TWEEN people feel safe to have ideas, share them with their peers and meet the people who can help turn good ideas into products’57. This is achieved through a mix of events (including the annual “b.TWEEN” event) and the online community drawn from across the digital media landscape with this community element being supported by regular high profile events. The organisation behind b.TWEEN is Sheffield-based Just-b. Productions58, which was founded by Katz Kiely in 2003. They work on a range of interactive media projects including design of websites and games, action research, developing prototypes and the development and management of b.TWEEN and the related events. B.TWEEN appears to generate income from the following mix of sources: • Ticket revenue; • Sponsorship; • Grant funding. The funding mix for this is commercially confidential. Process
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http://www.just-b.com/btween/pages/history http://www.just-b.com/whatwedo 30
The ‘b.TWEEN People’ community includes commissioners, investors, aggregators, media buyers and independents from advertising, branding, creative technology, film, games, mobile, interactive art, TV and web. For many people, “b.TWEEN” is the annual high profile cross media industry marketplace event. This was held at the Museum of Science and Industry in Manchester over three days in June 2008. The fourth annual event was supported by the Technology Strategy Board and NWDA with New Media Age being cited as Media Partners and speakers included Ogilvy & Mather, BBC, Aegis, Orange, Channel 4 and a number of independents. Features of this annual event have included:
• • • • • •
“Exploding Narratives” pitches at the launch event (creatives are asked to compete to pitch for an “mscape” that they would like to make; A gallery of interactive installations again involving pitches from members of the b.TWEEN community; The potential for people to tune into live streams of presentations and discussions; Ability to join in discussions through chat rooms projected into the main presentation arenas; Delivery of evening networking events such as “Quickfire”; Provision of RFID that allow people to bookmark parts of the proceedings and access the video afterwards.
Some specific elements of the b.TWEEN website and community are worth noting:
• • • •
• •
It contains all the basic details of the annual event, such as programme and speakers details; The previous year’s presentations are included on You Tube; The site contains lists (and photographs) of high profile supporters and advisors; There are a variety of opportunities on the site for members of the community to compete to be contributors at the annual event (including “Interactive Gallery” “Quickfire” and “Enterprising Ideas”); this is in addition to other competitive elements (e.g. “Exploding Narrative” and “Branding Talent”; A Discussion Board is featured although usage seems reasonably limited; The site lists active members (there are 305 of these).
Testimonials and Outcomes59 • “Overall, the whole event has been a mixed bag for some people. Some sessions have felt like showcases for speakers which seemed poor value, other sessions inspirational and thoughtprovoking. All of the participants seem to have left with something of value and that ultimately has to be the main thing” The Mancunian Way, Manchester Evening News
•
•
•
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“[b.TWEEN] creates unique opportunities for practitioners from the independent digital creative and content sectors to interact with broadcasters, commissioning bodies and brands" Steve Taylor, Aegis “Every session is fascinating, but is also centred on commercially valuable intelligence about where the sector is going. We can genuinely say that our strategy has been changed because of the insight gained at B. TWEEN. As always, it was the informal conversations that proved the most illuminating and useful. B TWEEN is the friendliest, most industry-specific and business-aware networking event in the UK.” Max Zadow, Onteca There are two projects I am working on that I feel are more easily achievable than I imagined and have been moved forward by attending b.TWEEN. Andrea Petch Funkmeister Ltd An eclectic mix of technology, commerce and pure creative forced together in an environment that can't help but encourage even the most introvert of geekish geeks to brush their hair, de-smeer their glasses and communicate in the real world. Leo White Hydrant 59
These are taken from the following sources: the b.TWEEN website, http://preview.northwestvision.co.uk and http://blogs.manchestereveningnews.co.uk 31
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“b. TWEEN is my annual exposure to new ideas, people and opportunities” Mark Pearce, theWorkshop
One might reasonably expect a mix of soft and hard outcomes from an event (and community) such as b. TWEEN. The former would be about enhancement of participants’ capabilities, knowledge and networks as well as the generation of ideas. The latter would relate to the doing of deals. Lessons learnt Business Model The drive behind the event has been a commercial production business, albeit one with an evident commitment to their industry. Significant sponsorship and grant income has probably been required to make this work.
Engaging Firms The b.TWEEN website makes an attempt to build loyalty and sense of community but its achievement in doing so may be limited in reality. It seems likely that the high profile support of major players in the industry performs an important role.
Process The connection between the online community elements and the event itself look to be mutually supportive.
Outcomes Some positive feedback is evident and the apparent continued success of the event suggests that participants do gain benefit.
The event experiments with a variety of networking techniques. This may be of mixed success but probably helps in positioning the event as being an innovative one.
5.9 Results from primary research The key headlines from the content commissioners were: • Technology should be an enabler not the driver – it’s about people; • Scale and the ability to deliver is important; • It is still talent led; • The market will drive the cluster to form around the people with money – the commissioners; • Collaboration happens already – e.g. Vernon Kaye in partnership with Gallowgate productions to address issues of track record and infrastructure; • Technology is great but it is still about company growth and business maturity; • Very few companies are overcoming the content/technology multi-platform challenge; • How is it going to help companies to navigate the commissioning system. The key headlines from the content suppliers were: • Collaboration between sub-sectors in a growing need; • Trusted network of contacts is important; • Networking events need to be focused rather than just 100 people drinking coffee; • Technology is just an enabler; • Commercial end game is important - not just R&D for R&D sake; • Some type of market place- show and tell event would be useful; • Companies need help on their sales pitch; • High speed access is great but companies need help to understand how they can best use it and what it can enable; • Interest in engaging more with students; • People need to build networks physically- only then can things take place virtually; • Collaboration for collaboration sake is not good – needs to be a reason – preferably a commercial outcome.
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5.10 Conclusions It is clear that current levels of collaboration are low within the digital and media sectors both within each of the regions but especially across the regions. Any initiatives that are put in place must be relevant to the individuals involved and offer a recognisable value add to the business. Most of the collaboration case studies do not involve a physical network. This is a key issue as the infrastructure alone will not generate a collaborative working environment and culture. It is the softer skills and initiatives that are most successful in creating a sustainable collaborative mindset. It should also not be minimised the importance of physical collocation. This has been the basis of innovation & incubation centres, the virtual world is coming however there is still a need for people to engage physically. Collaboration will help the companies across the North of England gain the scale to meet the demands of the content commissioners, especially when an integrated content solution is required. However, this alone will not create a sustainable and growing digital media base – it is only by up-skilling the company base that this will happen. The Media Access Bureaus and NorthernNET offer a significant opportunity to enable distributed training across the North of England in a cost effective and efficient way. This could be used by the RDAs and/or commercial organisations and hence is another potential revenue generating opportunity for the Northern Way.
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6.0
RECOMMENDATIONS
The NorthernNET and Media Access Bureau infrastructure has been put in place to support the long term delivery of innovation and knowledge transfer across the Northern Way in the Digital & Creative Sector. The current supply chain infrastructure across the North of England is not sufficient to meet the anticipated demand for integrated content solutions. This is partially due to lack of collaboration but also heavily influenced by the shape of organisations located in the region. Bar a few notable exceptions there are few companies that have the required skills to meet the demands of content commissioners alone. The dominance of Manchester has the potential to skew the shape of the North of England. It should be noted that there is a broader consideration required to shape the interventions needed to develop the company base to meet the market requirements. The NorthernNET is only a facility that will reduce the impact of geographical diversity across the North. It will not be the answer alone and further research is required to identify complementary activities to ensure the sustainability of the supply chain in the North of England. 6.1 Knowledge Transfer, Intellectual Property & Supply Chain Innovation Within the Knowledge Transfer, Intellectual Property & Supply Chain Innovation activity, four strands of intervention are recommended to promote and facilitate the use of the NorthernNET. These are: • Building a knowledge bank; • Targeted network events; • Cross regional collaboration showcase; • Establishing a NorthernNET portal. Each of these is described further below. 6.2 Building a knowledge bank This activity will be centred on building a private knowledge bank on the company and research base across the North of England for use by the Northern Way. This will result in a single repository for all regions enabling a dating service to be provided to members of the NorthernNET for collaborative ventures. The knowledge bank will contain detailed company information related to their key skills and capabilities, detailed knowledge of their USPs and particular areas of expertise. The information will be gathered by one representative of the NorthernNET per region who will establish a relationship with each organisation. At this stage key economic indicators can be gathered to generate a current and accurate baseline for measurement of GVA and employment figures. The knowledge bank will become the “trusted network”, enabling people to identify organisations who may be appropriate to collaborate with. The NorthernNET will enable the resulting collaboration activities to occur in an effective and efficient way. It will be irrelevant where the companies are based as they will be on NorthernNET or will have ready access to a MAB. The establishment of a knowledge bank could facilitate a key piece of research to prepare a detailed SWOT analysis of the digital media supply chain in the Northern region. It could be used to identify any gaps, or in fact centres of excellence where further initiatives could be focused on. It will also provide a valuable resource for external agencies such as Nesta & PACT. This knowledge bank should also include Universities and seek to profile key researchers in fields within, and complementary to, the digital media supply chain. The expected costs are around £200k per annum based on 3 NorthernNET representatives who will create and maintain the knowledge bank. This includes fully loaded costs plus support as required.
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6.3 Targeted network events In discussions with key stakeholders the importance of networking was stressed, however what was critical was the relevance of the event itself and its attendees. Building on the knowledge bank, targeted networking events for members of the NorthernNET should be established. The events should be relevant and useful to the organisations, bringing together the right group of attendees (similar scale of organisation, similar interests and similar ar relative company position of attendees). The focus should be proactive engagement with a commercial focus to encourage potential collaborations and knowledge share. Three strands of events are recommended: • Within sectors:: focused on collaboration betwe between en companies within the same digital media sector; sector • Cross media subsectors: to encourage collaborations to generate integrated content solutions and to share best practise; • External sectors (such as finance, biomedical): to explore ways in which the digital media subsectors can further engage with strong industry sectors in the North of England. These events should be held eld at MAB locations offering the potential to stream activities across all a the media access bureaus. Any content that was created as part of these events could be stored and offered as intelligence to all member of the NorthernNET following the event. In future, if successful this content could be shared with the wider digital media community in the UK or internationally if this was seen to be of value to the Northern Way and the businesses in the North of England. k per annum based on holding 10 half day events through the year The expected costs are around £100k with around 20 people at each MAB. This cost assumes one employee working half time to organise these events and £2k expenses per event for a guest speaker. 6.4 Cross regional collaboration showcase The collaboration showcase is an annual event event aimed at demonstrating the collaboration potential of the NorthernNET. It is proposed this will be a commercially sponsored event where three key content commissioners setting a relevant challenge relevant to their industry but requiring a cross cross-platform solution. Teams will be generated to address the challenge over a two day event but each team will have members based at different Media Access Bureau sites. It is anticipated that that there will be a number of teams competing to offer the best solution tion set by the content commissioners. In initial discussions with Kevin Price, Head of Future technology and media for Media City, City, the BBC would be extremely interested in becoming involved with such a venture and would welcome further discussion. This iss a scalable event that can be hosted by each MAB location as appropriate. Figure 3 illustrates for 2 teams for each challenge at 6 different MAB locations. locations Figure 3 - illustration of collaboration showcase
This could be based on a similar model and structure to that used by Crossover Labs, however care must be taken to assess how the process would translate to a virtual working environment with dispersed teams. It is envisaged that the teams will collaborate using video conferencing facilities, collaborative virtual workspace tools and file transfer facilities. The output of the collaboration showcase will be key demonstrable evidence of the results of cross-sector collaboration across the NorthernNET and a clear indication of how companies can work together whilst not necessarily being located in the same room. This can be used by the Northern Way as valuable promotional material as well as by the collaboration participants in their own business. Again this will be valuable intelligence that could be shared with all members of the NorthernNET. The expected costs depend on the number of MAB locations, expected number of attendees and facilities required to disseminate the intelligence gained at the events. Each multi-site event is expected to cost around £750k based on 15 sites hosting around 20 participants each. If the initial pilot was successful there is the potential to extend this event to other UK, or even international, networks. This would firmly place the North of England on the digital media map whilst further expanding the networks of the companies involved. 6.5 Establishing a NorthernNET portal In order to add real value to the NorthernNET membership a portal should be established. This could be used to build a virtual community around the network and strength the linkage between content commissioners, academics and content suppliers. The portal could be used to: • Share knowledge, expertise and experience in a collaborative environment using Wiki’s, forums and messenger type services; • Advertise commissioning opportunities to the community – this could be used by content commissioners not only based in the North of England but the rest of the UK & potentially globally; • Advertising job opportunities and freelance postings; • Advertise events and training opportunities. The main cost associated with this will be the creation of the portal and then ongoing support and maintenance of the site, including moderation of content. This is estimated to be around £140,000 for the first year and then £40,000 for each subsequent year. 6.6 Network expansion and development There has been significant investment in the infrastructure to support the MABs and NorthernNET. Care must now be taken to ensure that there is a sustainable business model to support this investment after the public subsidy is withdrawn. Our recommendation is to augment the existing infrastructure with low-cost but high value connections with complementary networks. 6.7 Extending academic links and external links Academics, as a matter of course, collaborate virtually and hence could offer some valuable lessons learnt to the commercial creative sector. Our analysis indicates that there may be benefit from establishing a peering point with JANET to encourage the collaboration with universities. This could be located at one of a number of the MABs near a University hub. This would take the form of a gateway between the two different networks and enable students and academics to send data securely and efficiently directly to commercial NorthernNET members. In addition, they will be able to access any services such as a member’s portal, which is an extremely valuable resource for all involved. In particular there is a clear benefit from students and academics being able to access directly the information on the NorthernNET portal. This could be to learn about industry placements and graduate opportunities and to advertise innovative research and transfer knowledge. The Northern Way partnership could consider a University membership business model for such members to help recoup some of the investment required. The main obstacle is to ensure there is no use of JANET for the transit of commercial traffic. This is likely to be a low cost investment however further work is required to understand how the two networks could 36
interface technically. In addition, there are clear guidelines as to the types of organisations allowed to connect to JANET which can be found in JANET Connection Policy60. It is recommended that the Northern Way Partnership meet with JANET to discuss how such a gateway between the two networks could be established. The indicative investment required for circuit connection to JANET is approximately ÂŁ100,000 - ÂŁ150,000, however it should be emphasised that a full analysis of network topology and equipment required to achieve this. There may be a case as the international traffic on NorthernNET grows to extend this capability, either through commercial discussions with Virgin or through external connection with another network such as MaNAP, however this is likely to be driven by demand (and subsequent revenue) by the NorthernNET membership. In addition there is value in strengthened connections with other UK media networks such as Sohonet and SEMN, together with international networks. However this can be done through potential virtual collaborations rather than establishing any formal network linkage. 6.8 Further recommendations In order to exploit the investment already committed to the project it is clear that a number of activities need to happen outwith the 2 areas under consideration in this document. Knowledge of the initiative amongst the community was extremely low. There was confusion about what it was, what it would enable and why people would use it. Therefore a clear story needs to be developed to sell the opportunity. Companies need to be able to clearly see the added value to the business from joining the NorthernNET or accessing the MABs. Companies are unlikely to sign up because of the technology story, rather it will be a business decision based on how it will impact their bottom line. Therefore extensive marketing is required. A critical mass of members, including the key content commissioners, will be needed to fuel the growth of the network. There is a strong case that to encourage connection to NorthernNET and to fully exploit the infrastructure, a broader Next Generation Access initiative may be appropriate. This would reduce the barriers to companies connecting to the facility and truly enable cost effective high speed connectivity for the digital media industries. However this is outside the scope of this research and a much wider consideration as it would not only benefit the digital media community across the region but all industries. There are many schemes in place across the UK, such as FibreSpeed in Wales, Fibrecity in Dundee and Bournemouth and planned investments in Cornwall, which demonstrate the drive towards Next Generation Access.
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