The Making of the City of Knowledge.pdf

The Making of the City of Knowledge: UrbanPlanning and High Technology Industries in

Melbourne, AustraliaJuan Blanco, The University of Melbourne, Victoria, Australia

Abstract: In recent decades, cities have tried to capture the opportunities that arise fromknowledge-based industries to secure their economic interests well into the future. In this context,the generation of clusters within the urban structure is believed to encourage the growth ofthese industrial sectors, either by attracting foreign investment or by facilitating the growth ofindigenous firms. High-technology agglomeration constantly requires innovation because inits essence it involves the process of using knowledge (of living organisms and their makeup)and turning that knowledge into new products and services. Therefore, cluster success is notonly dependent of its endogenous dynamics; urban planning and institutional and legislativereform are considered a key factor to support its long-term generation and transfer of knowledge.In this context, several initiatives around the world had tried to capitalize on the assets ofurban agglomeration through planning policies and plans focused on integrating High Techactivities with renovation programs and infrastructure projects. Concentrations of HigherEducation Institutions, venture capital, business incubators and government research institutions,to name a few, are usually targeted in such strategies. This presentation will present some initi-atives that have led such trends, with different levels of success. Finally, the case of Melbourne—acity founded on primary industries, gold and manufacturing—will be presented in detail. TodayMelbourne’s economy is driven by knowledge-based industries in education, biotechnology,advanced manufacturing and design. It is also known as a city for the arts, literature, fashionand major events, making it internationally recognized as a Knowledge City.

Keywords: Knowledge-based Economy, Urban Policy, Clusters, Innovation

INTRODUCTION

Since the process of globalization and production reform was accelerated in the finalquarter of the last century, the most competitive metropolitan areas have been convertedinto complex service platforms. Competitive cities have developed specific structures togrow and nurture such processes, which are setting new challenges for their urban devel-opment. One of the most important outcomes of this process is the role that knowledge

holds in the definition of urban policies aimed to attract new businesses and investment. Busi-nesses need to be constantly responding to changes in the market as well as continuously pro-ducing new products and services (Cooke & Simmie, 2005). In order to be able to modify oldand create new products and services that the market wants, businesses require knowledge andinformation to be readily available so it can be transformed into marketable goods and services;been physical proximity one of the key characteristics in foster such processes.This paper will introduce the relation between technology and urban planning, most notably,

the central role of urban areas in generating and sustaining technological innovation. It willuse the case of Melbourne, Victoria, to exemplify how those relations are being used nowadays

The International Journal of Technology, Knowledge, and SocietyVolume 8, Issue 2, 2012, http://techandsoc.com/, ISSN 1832-3669© Common Ground, Juan Blanco, All Rights Reserved, Permissions:[email protected]

as catalysts for urban and technological development. Melbourne is a city that has carried-outa series of initiatives framed under the concept of Knowledge City 1, and has recently achievedinternational recognition for such efforts2. Most notably, it has been successful in developinga Biotechnology cluster that stands in a leading position worldwide. The study will rely onsecondary data-collected from public sources- to construct the case, supported by a review ofrelevant literature and information related this case in particular. It will later discuss the com-plexities of putting in practice the notion of city of knowledge by using traditional methods inurban planning and how effective they are in the development of a high-technology industry.

Literature Review

The emerging notion of Knowledge City attracts considerable interest from city policy makersand is seen by many actors in the urban development field as a possible solution to the sustain-ability challenges of the modern city and a recipe for citizens’ prosperity (e.g. Ergazakis et al,2004). Despite that, there are no agreed definitions of this term. Rather, there are severalcomplementary perspectives fromwhich to consider the concept, such as: Urban Capital Systems(Carrillo, 2004), Information Technology (Komnions, 2002), and Urban Processes (Landry,2000).Knowledge Cities can be described as incubators of knowledge and culture, forming a rich

and dynamic blend of theory and practice within their boundaries, and are being driven byknowledge workers through a strong knowledge production (Work Foundation, 2002). Associeties become increasingly knowledge-based, the nature of city development changes becauseactivities in the knowledge sector are becoming more important and they require conditionsand environments which are very different from those required by commodity-based manufac-turing activities in the production sector (Knight, 1995).Such innovation activities have their own processes and timeline, which are often not under-

stood by policy-makers. Innovation has been an object of research in traditional and contem-porary economic theory, but it continues to be an elusive term, falling short in unpacking theblack box of innovation. The following section will provide a brief explanation on how theinnovation can be related to physical factors, more specifically to conditions within their territ-ory.

Knowledge Economy and Territory

The concept of Knowledge Economy is crucial to understanding how innovation and territorialdevelopment relate. Such term seeks to describe “the major dependency on knowledge, inform-ation and skills from the public and private sectors” (OECD, 2005). In the majority of thecases, such knowledge-dependency can be an expensive and risky process for businesses requiringvast amounts of venture capital and entrepreneurial know-how; therefore they must rely onthe external elements available in its urban context, or cluster 3.The presence of clusters is believed to encourage the growth and stability of new industrial

sectors thereby working towards economic sustainability. Clusters have been found to be placesthat attract significant amounts of foreign investment as indicated by foreign owned researchwhich results in growth of employment opportunities for the local population. Clusters are alsothought to increase economic security by anchoring firms into the region (Massey, Quintas, &Wield, 1992).

1 This paper will use Edvinsson (2003) definition of Knowledge City: a city that was purposefully designed to encouragethe nurturing of knowledge.2 Melbourne is an important node for Higher Education and Biotechnology research. As consequence, in 2010 it wasawarded the ‘Most Admired Knowledge City Award,’ by the World Capital Institute and Teleos3Clusters are a geographically proximate group of interconnected companies and associated institutions in a particularfield, including product producers, service providers, suppliers, universities, and trade associations (Porter, 1998).

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THE INTERNATIONAL JOURNAL OF TECHNOLOGY, KNOWLEDGE, AND SOCIETY

Clustering

There is wide debate amongst academics about whether or not space or the location of economicactivity-in particular, the clustering of like firms, research institutes, universities and other formsof relevant infrastructure-facilitates achieving competitive advantage. Terms such as precinct,spatial cluster, creative or innovative milieu, agglomeration, industrial areas and so on, areused to identify the positive externalities that assist economic growth because it assists inknowledge creation and knowledge sharing which is a critical ingredient required in flexiblespecialization and innovation (Phillips & Yeung, 2003; Porter, 1998, 2003).Moreover, most of the literature agrees that geographical and institutional proximity allows

improvement of the critical knowledge and information transference to continuous innovationof its productive structures. These characteristics are translated in diverse spatial configurations:

1. Knowledge generation poles: higher education institutions, public and private researchcenters, science cities, etc.

2. Production hub of knowledge application: high-technology firms, new industrial districts,etc.

3. Technological and firm concentration areas for knowledge spreading: technology parks,new business centers, productive corridors, etc.

Encouraging economic clusters has become an important aspect of government policy aroundthe world because they are held to be important tools for assisting the growth and attractionof new industries and encouraging employment security for the population. But despite all theincentives and programs established by governments, they are not a proven recipe for success4.

Case Study: Melbourne

Australia is one of the world’s fastest growing knowledge economies (Dutta and Mia, 2009).The number of Australian firms and employment in the knowledge industry is increasing everyyear, as well as the revenue in Australian information industries (Frederick andMcIlroy, 1999).Moreover, Melbourne is home to 50 per cent of the top 20 biotech companies listed on theAustralian Stock Exchange and leading biotechnology research institutes and Victoria is hometo 139 biotech companies (DIIRD, 2007).These international scale achievements must be understood in the context of the planning

and development in Australian cities. The current focus is on Melbourne, the capital city of theState of Victoria and the original national capital of Australia.To help facilitate Melbourne’s progression to become a Knowledge city, in 1996 Victorian

Government adopted an information technology and multimedia strategy ‘Victoria 21’. Thestrategy was developed to position the state to attract investment and create jobs in the know-ledge sector (Frederick andMcIlroy, 1999). With a focus on international development ‘Victoria21’ vision was revised in 1999 and ‘Global Victoria’ strategy was developed and later on renamedas ‘Connecting Victoria’ (Multimedia Victoria, 2002). This strategy focuses primarily on:building a learning society; growing the industries of the future; boosting e-commerce; connectingcommunities; improving infrastructure and access; and promoting new politics (MultimediaVictoria, ibid). In 2002, Victorian Government launched its e-government vision ‘Putting Peopleat the Centre’ (Victorian Government, 2002). All of these efforts have shaped the configurationof emerging clusters in the spatial configuration of the city, as its shown in Figure 1:

4 The Chinese government has established a national-level scientific park designed for high-technology development.Despite its relative success, entrepreneurship has been labeled as “the missing ingredient”. In fact, and after interviewingseveral Chinese Science and Technology Industry Parks (STIPs) Watkins-Mathys and Foster (2006) conclude that whatappears to be missing still among STIP based firms are entrepreneurship and management skills.

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BLANCO: THE MAKING OF THE CITY OF KNOWLEDGE

Figure 1: Knowledge Clusters of Melbourne Metropolitan Area, Source: Victorian Government, 2002a, p. 87

Biotechnology

There is strong interest in biotechnology among governments who seek to actively promote itbecause it is believed to promise future growth in the industries that will arise out of biotech-nology breakthroughs which explains why there is much competition between governments toestablish themselves as biotechnology centres (Cortright & Mayer, 2002). Biotechnology eco-nomic activity is located in a few clusters within a few cities around the world, most notablySan Francisco, Boston, San Diego, Cambridge and Munich (Gilding, 2007). Biotechnology isan industry that constantly requires innovation because in its essence it involves the process ofusing knowledge (of living organisms and their makeup) and turning that knowledge into newproducts and services. Biotechnology is applied to numerous industries such as health, agricul-ture, environment and resources, and food and beverage processing (State Government ofVictoria, 2001a). For example, biotechnology is applied to the health industry to assist in theprevention, diagnosis and treatment of human illness (such as medication or therapies); it isapplied to the agricultural industry to assist in increasing crop yields, crop durability (for example

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in the face of drought) and the prevention, diagnosis and treatment of animal illnesses (StateGovernment of Victoria, ibid).

Biotechnology in Melbourne

Melbourne has been identified as having the largest biotechnology sector in Australia, whichalso has the largest biotechnology presence in the Asia-Pacific region (Gilding, 2007; StateGovernment of Victoria, 2001a). Melbourne’s lead in this sector has largely been attributed tothe fact that it has world class R&D infrastructure and is home to CSL Limited, one of thelargest pharmaceutical biotechnology firms in the world.To boost the development of this sector from an urban perspective, since late 1980s the

Victorian Government started to invest and develop knowledge precincts in the metropolitanMelbourne region. The Department of Planning and Development (1994) saw the prosperityincreasingly depending on the ability of Melbourne to compete in the world economy. Mel-bourne metropolitan strategy acknowledged that the performance of Victoria was depending,to a large extent, onMelbourne’s global economic competitiveness and also its ability to operateefficiently as an urban system focused on knowledge creation. At this time, effort was put into the identification of ‘knowledge precincts’, areas surrounding the main university campusesand had special local land use regulations in favour of high-tech industries, with links to anearby university.

Victorian Biotechnology Policy

Victorian Government policy which is more detailed than Federal policy has occurred in twophases, the 80s–90s and the early 21st century (2001-present) and has been the work of theDepartment of Innovation, Industry and Regional Development (DIIRD, 2007). For the mostpart, it represents a development in the Victorian Government’s understanding of the way thebiotechnology sector functions, requirements of the sector and subsequently how to plan tofacilitate functions and meet requirements to grow biotechnology. It should also be noted thatpolicy has predominantly been focused on Melbourne.State policy directed towards growing the biotechnology sector in the 80s–90s was centered

around developing “technology precincts” based on the assumption that agglomeration wouldfacilitate linkages between research and commercialization and thus facilitate the growth ofthe science and technology related sectors (Boddy, 2000). Research into the spatial character-istics of successful technology precincts around the world was used to inform policy that wouldencourage the development of precincts in Victoria that had similar characteristics. Policystressed the importance of land-use planning, infrastructure investment and the developmentof science and research parks–tools to be utilized in six technology precincts, four of whichwere focused around biotechnology; Werribee, Parkville, La Trobe University Campus andMonash. Each precinct had a committee whose role was to implement statutory planningchanges (such as creating special zones) to ensure the right type of development in the rightareas (Boddy, ibid). This approach has been criticized for relying particularly on the planningsystem to encourage agglomeration. Policy was abandoned in the early 90s when there was achange in government.Since 2001 onwards, biotechnology policy has continued to be influenced by assumptions

about the importance of having biotechnology clusters as well as the importance of facilitatingthe elements required for the commercialization of R&D.What has changed is the way in whichthe strategic plans have been developed and implemented which rely much less on the planningsystem. There have been three strategic plans, all of which have had significant focuses whileat the same time building upon one another. The 2001 strategic plan, Biotechnology StrategicPlan for Victoria, had an emphasis on strengthening biotechnology infrastructure. The 2004

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strategic plan, Victorian Biotechnology Strategic Development Plan, had an emphasis on en-hancing the commercialization of R&D as well as attracting foreign investment to the biotech-nology sector. The 2007 strategic plan, 2007 Biotechnology Strategic Development Plan, em-phasized continued development of the aims of the past two policies as well as identifying andleading in new growth areas within the biotechnology sector (for example, growth areas thathave arisen due to concerns about global warming). The results of such policies can been seenin the composition of employment in Biotechnology in theMelbourne Central Business District(CBD), particularly the predominance of one of those technology precincts: Parkville, with thetriangulation of The University of Melbourne, Monash University and CSL in the north sideas its shown in Map 1:

Map 1: The Spatial Distribution of Employment in the Biotechnology Industry, Source: Melbourne City, 2007b

Knowledge precincts have an important role to play inMelbourne’s overall R&D infrastructure.They provide opportunities for linkages, technology diffusion and cross fertilisation betweenhigh-tech businesses, academia and public sector R&D facilities. Successful precincts act ascatalysts for attracting new talent and investment, building up critical mass in particular areasof research and commercialisation (Government of Victoria, 1994).

Melbourne: Knowledge and Innovation

Despite being an important centre for Biotechnology, the city also stands out for generation ofinnovation and knowledge in other fields. In fact, Melbourne’s strengths in the knowledgesector also include Higher Education and Research; the Creative Industries; the Life Sciences;Advanced Manufacturing; and Information and Communication Technology (ICT).To boost sustainable business and trade inMelbourne, Federal, State, and City Governments

have a number of business development and support funds and programs (e.g. Victorian Bio-technology Strategic Development Plan 2007) available for small, medium size, and international

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companies (Melbourne City, 2004).Melbourne has one of the largest concentrations of advancedindustrial and scientific research in the Asia-Pacific region (State Government of Victoria, 2009).The depth of research available is evolving into clusters of cutting-edge expertise not only inacademia, but in sectors as diverse as nanotechnology, biotechnology, automotive, aeronautics,financial services, and design.Melbourne is also leading the Higher Education sector, standing out from within the compet-

itive Australian context5. The City ofMelbourne has more than 30 tertiary institutions, teachingmore than 70,000 students. In 2006, 21,000 of these were international students enrolled atan educational institution within the city. More than 18,000 of these were also residents. OnlyLondon and New York attract more international students than Melbourne (Melbourne City,2004).

Map 2: Spatial Distribution of Employment in the Higher Education Industry, Source: Melbourne City, 2007b

Moreover, Melbourne ranks in various listings among the world’s most liveable cities (i.e.Economist Intelligence Unit, 2005). Melbourne’s location and the high quality of life of its cit-izens play a significant role in this recognition, which is achieved through strategizing andcarefully planning of its urban development and socio-cultural atmosphere. This accomplishmentis not only limited to bringing all business, educaiton, and R&D clusters together. Other clusterssuch as tourism, sports, art, and culture have also contributed immensely to its transition intoa knowledge city.

5Australia has eight institutions in the world top 100 universities, as well as six in the ‘top 50 universities for life sciences& biomedicine’ (Times Higher Education-QS World University Rankings 2009).

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Conclusion

The making of a knowledge city is a long and complicated process, but it is evidently a pathto follow for the most sustainable urban development. Melbourne’s good practices can be usedas guidance for cities that are willing to pursue a knowledge-based urban development. However,each city is unique and characterized by different geographic, socio-cultural, economic, andpolitical conditions. Therefore, customized development strategies should be developed for theunique urban circumstances, competencies, opportunities, and challenges of that particularcity.The science and/or technology part development in Victoria has not yet been linked to the

biotechnology sector. In 2001 the State Government released Building a Commercial Base forTomorrow’s Industries: A Framework for Victoria’s Technology Parks. The Government ac-knowledged that technology parks were required to foster the commercialization process ofinnovation industries (State Government of Victoria, 2001b). Knowledge is created inMelbournebut is commercialized overseas where there is more access to venture capital, specialized skillsin regards to product testing and development, and better commercialization infrastructuresuch as testing laboratories. In other words, policy emphasized the importance of R&D infra-structure but stressed the need to commercialize local R&D.As it has been argued in previous sections, the complex process of planning towards City of

Knowledge does not have recipes for success: it is a process highly dependent on local networksof knowledge generation and urban planning culture. Melbourne based its approach in theconcept of Technology Precincts which later evolved into a more comprehensive approach,which includes not only the development of High Technology but a more culturally-orientedfocus for generating an attractive environment for the main material in any innovation process,its people.

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ABOUT THE AUTHOR

Juan Blanco: I am an architectural researcher, author and academic. I previously taught at P.Catholic University of Chile (PUC) and since October 2010, I am a PhD candidate at the Mel-bourne School of Design (MSD). My fields of interest include architectural design (biologicaldesign, passive systems, learning spaces), urban design (ecological urbanism, urban regeneration,technology parks) and urban planning (creative cities, innovation clusters, urban competitive-ness). I focus my studies on the massification of green guidelines, such as Green Star and LEED,and how they can sometimes act more like a barrier than encouragement for creative responsesthat really achieve environmental goals. My research seeks to understand how design disciplinecan take the lead in the delivery of a more sustainable built environment, taking Melbourne-based practices as case studies. I contribute to the Green Building Council of Australia (GBCA)as a member of its Technical Working Committee for its Communities Pilot Tool, an innovativeinitiative in Australia that tries to implement green design criteria into large-scale developments.I teach several subjects in the undergraduate and postgraduate curriculum of the Faculty ofArchitecture, Building and Planning of The University of Melbourne (UoM). During 2010, Iwas named Teaching Fellow in the MSD.

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