Thank you very much for that kind introduction and I'm honoured to be leading the first panel this morning and to be the token male on the panel. It is good for me. I am delighted to have the clicker and I'm delighted to be introducing this panel. This really is a star cast. As you heard yesterday from our provost at MIT, the MIT motto is men's at mannus, mind and hand, and as a recent recruit to MIT and particularly its management school, MIT really does do this, men's at mannus. Not only do we have PhDs who then go on to become fabulous entrepreneurs, we also take the best of our research and try to apply it in the real world, so I am thrilled to have this panel this morning, the details are behind me. The way we're going to run this panel this morning is I'm going to start off with our two very learned professors and then we'll go to our two practitioners, but let me briefly introduce the panel so you know the star cast we have up here this morning. First of all, I'd like to introduce Professor Suzanne Berger from the MIT political science department. She was founder of MIT's international program, MISTI, and especially its MIT France program. In the United States, she's been elected to the American Academy of Arts and Sciences and back here in Europe, she's been honored by the French government with the highest honor of Légion d'Anneur. Today, which as those from MIT know is Pi Day, an American calendar reference, it's 3 slash 14, 3.14, it just shows you the kind of culture we come from in MIT that we like to celebrate Pi Day. But that's particularly appropriate because Pi is also the acronym of Professor Berger's most recent research, production in the economic knowledge, innovation economy, I can't read my own handwriting. And that is very pertinent for today to look back at this deep research and particularly the role of manufacturing in our advanced economies. So that is Professor Berger and in a moment I will invite her to speak first to my right over here is Professor Fiona Murray, who is a professor of entrepreneurship at MIT's management school, the Sloan School. She is an associate dean of innovation and she is co-lead with Professor Bulovich of the provost and MIT's Pan MIT innovation initiative. So we look forward to hearing from her about innovation and particularly the science of innovation, which is what the laboratory for innovation science and policy is all about. Then we will turn to Donna from Scotland, and that's when we will go from the men's to the mannus side. We will take that high level MIT research and science of innovation and hear how it's being applied in the real world. So Donna will speak about the experience of Scotland and as you will see our title for this panel is Ecosystems in the European Union. Not everybody in the European Union is in the Euro area, but somehow they still managed to have innovation and entrepreneurship. So we will be hearing from Scotland and how the experience of applying MIT lessons through our REAP programme have gone up there in the Highlands and Islands. And then we will turn to Laudez, the other end of Europe, to hear about that experience down in Granada in southern Spain. So with that, may I please first turn to Professor Suzanne Berger. So I just hit this. Well, it's a pleasure to be here today and I'd like to tell you a little about a project that was run at MIT between 2009 and 2013. And it involved 20 faculty from departments across the institute and a number of our graduate students. And the question we were asking was what does it take to bring innovation to market? What are the kinds of inputs that are required to bring innovation to market? Inputs being skills, training, capital, suppliers, knowledge, facilities and policies. And in particular, do we need any manufacturing in our country? Do we need any production in our country in order to get innovation into the market? And it was clear to us, particularly at a place like MIT, that the United States excels at innovation. But there is a question about whether we can really get full value from our innovation if we don't have the ability to bring it to market in the United States. And by full value, I mean the ability to build on innovation in the creation of new companies, new good jobs and future streams of innovation. And I think if you think back to 2009, when this project was launched, a time when not only was for financial markets in dire crisis, but we saw something like six million jobs in manufacturing over a decade collapsing, three million alone in the course of the financial and economic crisis. And I think on all of our minds was this question of maybe when we look at the leading American companies, a company like Apple, we see that Apple does research, it does design, it does distribution, but it doesn't do any production at all. And yet Apple reaps the lion's share of the profits from the sale of its products. So maybe the model for the United States for everybody should be an Apple model. That is, should we really believe that production can just take place somewhere else without loss of our ability to bring innovation to market in a way that is profitable, not only for American companies, but created with the possibility of creation of good jobs. So that was in a way what was on our mind here. And when we talk about bringing innovation to market, I think that we had in our group a definition of innovation that went well beyond the definitions that we heard here yesterday. We were thinking not only of Oslo type innovation, we were thinking of a very broad spectrum of innovation, not only innovation in the form of patents, but innovation in business processes and organizations and manufacturing from what we can see at one end of the spectrum as patentable, disruptive, path breaking, you could say MIT type innovation, but also new business models, repurposing of old ideas into new products and new models all the way to the other end of the spectrum where you'd see a company like Procter and Gamble making changes in the production of very ordinary items like diapers, but in ways that allowed them to make radical improvements in the rapidity and efficiency of the way in which they were producing these very standard items. So we saw innovation across the United States in companies of all sizes and our question was in companies of all sizes and kinds in innovations of a very wide variety. What does it take to get them into the hands of a customer? And in order to carry out this research, we broke up into work groups. Overall, in the course of the project, we carried out interviews in about 265 companies. In each company, we asked relentlessly one question and the one question was when you have a new idea, when you see a new idea coming up either out of the lab or off the shop floor, what do you need to do to get it into the hands of a customer? And we asked those questions in metalworking shops in the middle of Ohio. We asked those questions in Fortune 500 companies. A second component of the study was a study of startup trajectories. We looked at all of the startups that came out of MIT's technology licensing office in the years 1997, 2007. There were in fact 200 such companies. We set aside the 50 that came out in software because that's a relatively easy thing to scale up. And we looked at the 150 that involved harder technologies to scale. We looked at a sample of what we called mainstream manufacturing companies in Massachusetts, Ohio, Georgia and Arizona. We then looked at some matched companies in Germany and China. We did technology scans and surveys. We did a study of skills in American manufacturing establishments. On the skills side, I would just point out that in those years 2009, 2010, just about the only thing that you could get people to agree on in the Republican and Democratic parties in the United States was that there was a skills gap that our problem in the United States was somehow that our workers didn't have the kind of skills that companies needed. This seemed to us a rather dubious proposition because after all three million people had just lost jobs and it seemed unlikely that the jobs that they reasonably recently had jobs, it seemed unlikely that the skills that were required would have changed so rapidly as to require wholly different people and skills. And so we sent out questionnaires to 2,000 manufacturing establishments asking them not is there a skills gap because that had become like apple pie in motherhood. We didn't ask them that. We asked them one simple question. We asked how long did it take to fill the last position in your company when you wanted to fill a job and in 75% of the answers of the companies, it took them less than a month. So we came to see that perhaps the question of skills was not really the main problem that we were looking at on that front. What we did see, and I think if we had more time I'd love to go into this in more detail, that there had been an enormous transformation of corporate structures in the United States from the 1980s to today. In the 1980s, the leading companies in the United States were vertically integrated large companies in which research, development, design, production, manufacturing all took place under the roof of the same company. And what we've seen over the course of 30 years is a breakdown of that model so that today a company that is integrated in that way, a company like General Electric, for example, is the rare beast. And almost all of the companies that were the vertically integrated champions of the 80s have now been reduced to core competence firms. This breakup of the vertically integrated firm took place under very severe pressure from financial markets and that's and of course it was enabled by new technologies. But financial markets played a very large role in this breakup of the vertically integrated firm and the breakup of vertically integrated firms has had an enormous impact on the industrial ecosystem of the United States. What we've seen is over the last 30 years enormous holes develop in the industrial ecosystem because when innovation took place in large companies in those vertically integrated firms in the 1980s, they had the resources to do scale up. Think of a company like DuPont when DuPont invented nylon in its laboratories in the 1930s and 1940s. First of all, they had basic something like basic research labs at DuPont in those days. Those were the days of Bell Laboratory of Xerox Park of IBM Central Research Laboratories. Those facilities simply don't exist anymore. But when you did have something like basic research taking place in companies and came up with something like nylon at a DuPont, DuPont had the money, the resources and the skills to scale that up to market within the four walls of DuPont. They had plants that they were able to convert and did convert from viscose and acetate to nylon production. They had workers and managers that they were willing to retrain for working in nylon plants. They had equity that allowed them to borrow and to finance the enormous capital requirements of extensive nylon production. And so all of this could take place within the vertically integrated firm. Today those firms don't exist any longer and the question is where do we get the resources today for scale up? Where do we get the skills retraining reformation that are necessary for moving into radically new enterprises? So I think when we look at the small and medium scale mainstream manufacturers, they need to be able to access complementary capabilities from the ecosystem. They don't have the capabilities that would allow them on their own to be scaling up their own innovations. It used to be the case that skill formation took place within the large companies and then apprentices who were trained within big companies leaked out into the ecosystem and small and medium firms could hire people with those skills. There are very few large companies in the United States or any companies in the United States today that are training apprentices. And that means that in fact we have to provide, we have to come up with another model for skill training. How do we educate the workforce we need absent the models of skill training we used to have? And finally at these holes in the ecosystem refer to the difficulty of actually getting transformative technology that we see on the horizon at places like MIT. How do we get it into the hands of those firms that might actually be able to use it? So we came to see the making of a new industrial ecosystem as the most urgent challenge that we face in the United States. That if we want to get the best of our innovation into the marketplace, we need to rebuild capabilities in the industrial ecosystem. We need to fill the holes that have been created by a process of corporate transformation. There was much that was good in the course of this, of the enormous transformation of American corporations. But we have failed to provide the infrastructure for a new industrial ecosystem. And in rebuilding I think our goal has to be to raise the rate and speed of bringing innovation to market across the country. And what we came to believe in the course of the project was that the direction we ought to move is to build institutions that could allow for convening, coordinating, risk pooling and risk reduction in trying to rebuild the ecosystem. And so I know that you're going to be hearing about some of the projects that are relying on regional ecosystem rebuilding. But I would like just to signal some of the projects and some of the directions that the United States has been moving that follow a rather different pathway. And the pathways that we're seeing are ones or recommending are ones that might have common principles. And I think the principles we're looking for are experiments in building these complementary capabilities. By capabilities I mean skill formation, something to replace the local banks in local ecosystems. We don't have any local banks anymore in the United States. And when we went to Germany and learned about the role of local banks in supporting Middlestand firms as they try to bring new firms, new projects to market, we realized how valuable a component of a total industrial ecosystem, a local bank, can be. So how do we, what kind of experiments can we imagine in building complementary capabilities? What kinds of designs can we imagine so that no one company pulling out kills the institution? How can we learn to use public funds to incentivize the contribution of private and other actors not to substitute for them? We believe that one very interesting experiment in the United States on a national level has been the creation of manufacturing innovation institutes. This was a major initiative of the Obama administration and I think that our MIT production in the innovation economy project really contributed substantially to the thinking that went into the creation of these projects. These are projects that build around particular technology. So the first of them, the additive manufacturing project, which is now three years old, was a project around 3D printing. The government announced that it would put some of money on the table. Initially it was $40 million and asked companies, universities, community colleges to compete in a competition that required coming as a team and 12 teams applied for those federal funds for additive manufacturing. The winning team had two universities, Carnegie Mellon and Case Western and a wide variety of small, medium and large companies. The money came from the federal government through the defense department and they're now basically, it's located in Youngstown, Ohio. There are now 15 such institutes involved, actually MIT is involved in nine of them. I think we haven't yet had a chance to evaluate these projects, but they have these elements that I described as common principles. Basically the idea is to try to create public goods or semi-public goods or club goods that would allow a diversity of actors to benefit from capabilities that no single firm is able to create on its own. We're very interested, I think one of our next steps would be to try to understand whether these institutes are in fact operating in that sense. Here in Europe there are comparable models. If you look at the French polder competitivité, that's a somewhat similar model. The French, however, have 70 of these polder competitivité, so it's a little hard to compare them to something that's, I think, a more concentrated and focused model, which is the American Manufacturing Innovation Institutes, each of which now has an average of about $70 million of federal funding and an equal or larger sum from the states and individual industries. I look forward to hearing about the regional model. Professor Berger, thank you very much for setting out that on the production and the innovation economy. I think the heartening thing from that whole piece of research is that there is hope for manufacturing and that there are interventions. As I said, this was a very MIT approach of men's at Manus, taking front-line research and Professor Berger's expertise and then turning it into something very concrete, leading to manufacturing. It's very exciting to see the previous president having endorsed those manufacturing innovation initiatives. With that, may I now turn to my other MIT professor here. This is Professor Fiona Murray from the MIT Management School. Great. Well, thank you, Phil, and thank you for the opportunity to talk to you today. I think in his remarks yesterday, my colleague Scott Stern previewed some of the things that he at least wanted me to talk about, and so I've tried to make sure that I fulfill the mandate that he provided for me yesterday. First, I just want to go back, and I think as Suzanne has already done and as our provost did yesterday, do a little bit of definitional work, and this is not to say that we necessarily disagree with some of the other definitions that were provided, but rather to say these are the definitions that we're using in the work that we do. When we created this innovation initiative for MIT, my colleague Vladimir and I had to do quite a lot of work saying, well, if we have an innovation initiative, let us at least define innovation so we know what it is we're meant to be managing or organizing or encouraging at MIT and beyond. So we do take this quite wide definition, I think, very much in the same spirit as Professor Berger, and think about it as this process of taking ideas all the way from inception through to impact. That isn't to say that on campus we have to get all the way through to the impact piece, but rather to say that is the trajectory that we want to put ideas on. And we are not confined in the way we think about that to ideas that are narrowly of the sorts of things that we only think about on campus of things that you might think of as technology in a more specific sense, but rather there can be new innovations in business models, technologies, processes and so on and so forth. The other piece that I think is especially important in the work that we're doing collectively is really this focus as well on entrepreneurship. As a we think of entrepreneurship in probably a more narrow sense than some people who might think of entrepreneurial behaviour, but rather entrepreneurship as the collection of activities that are involved in creating and growing new enterprises. And we take that definition quite seriously because we think that that's really an organizational definition. It basically argues that much of the entrepreneurial activity that's going to take place will happen in the context of these new to the world organizations that are going to be part of that entire innovation process. But we don't think that they are important alone or in and of themselves, that in fact there are a range of stakeholders that are going to have to be invoked if we want to get ideas from that earlier stage all the way through to impact in the world. And so it may be that universities are involved, that startups are involved, that they have to work with large corporations, that they have to work with corporations involved in supply chains and manufacturing, but that there is a role for government and for risk capital. And so there are a number of different organizational entities. And a lot of what we're worrying about is really the ways in which those different entities interact and work together effectively both on a regional level also at a national level and then across regions because I think what we increasingly see is that this innovation process tends to connect one region of the world to another where each particular region has its own form of comparative advantage. Before I go on, I would also say that one of the inspirations behind this and this focus on entrepreneurship has really come from our students. And so we heard yesterday Manuel talking about the young generation, unemployment and so on. And I think if you were sitting at MIT's campus in 2008 right after the financial crisis, although it's not a place where you think about unemployment, it was extremely hard for our students to find jobs. The students that were graduating for probably one of the first times in a very long time found that that investment that they'd made in extraordinary education didn't actually necessarily mean that they could walk out into the traditional jobs in consulting and banking as well as in big companies and so on. And so what we saw in that post-2008 period was actually a larger number of our students deciding to start companies and to become entrepreneurs. And even though the economy rebounded and the banks and the consultants and others came back to campus to recruit, it seemed to me that what had happened was actually a more important secular shift and that the students weren't necessarily changing their paths back to the more traditional ones. But in fact we now find that of those students who graduate and are not going directly on to further education, almost 20% of them are joining venture-backed start-ups. That's a quite significant percentage when you think about it. And so it's also the case that they're not always starting these companies, but they're certainly interested in being part of that different organisational model. As Suzanne said, we have a lot of start-ups that come straight out of MIT based on research in our laboratories, about 25 of those a year. There are probably another 100 or so that come, let me say, from the dorm room. It's not quite fair, but they're not directly connected to work in the laboratories. And we know from surveying our alumni that there are about 1,000 companies a year that get started by our alumnments. So clearly entrepreneurship is a vehicle that they see as an important piece of this puzzle. But we also see that this is not evenly distributed around the world. You've heard already from many people that innovation is quite spiky and not evenly distributed. Certainly that's also true of entrepreneurship, particularly entrepreneurship that's really involved in this innovation process and really moving these ideas out into the economy through innovation-driven enterprises. So a lot of the research that we've done collectively has been to try to understand what are those conditions that enable particular regions to actually be effective in particularly the early stages of that process. So our approach to these innovation ecosystems is really three-fold, and you saw a slightly brighter version of this image from Professor Stern yesterday. So we think about understanding the system, the stakeholders, and then the strategies that regions are taking or can take to really enhance their ability to do innovation. So let me say something about the system because I think that actually connects the dots between some of the work and the ideas that we heard yesterday, some of the discussion of clusters and so on. I think at the core we think about foundational institutions. We've heard a little bit about the fact that things that we take for granted here in the Eurozone and elsewhere, basic fundamental institutions, rule of law and certainty are extremely important as things that just sort of allow for contracts and so on and so forth. We then think about certain places in the world having quite strong cluster-based comparative advantage, and so it's not that we see what we're doing in, as a counterpoint in a sense, to the cluster orientation, but rather to say that's something about the current economic structure in a particular place, and on top of that we see two really quite distinctive sorts of capacities that regions will have. One is innovation capacity. This is an idea that is quite long-lived. People have thought about this for a long time, and that is the capacity to develop new to the world ideas and start to move them towards impact. What we wanted to think about is the fact that we see that as really quite separate from an entrepreneurial capacity, which is the capacity to create new to the world enterprises and to actually start to scale them up so that they actually grow and engage in job creation and so forth, and what we see in the most vibrant regions of the world is that they build on their foundations, their clusters, but actually have both ICAP, as we would call it in shorthand, and ECAP. They have those two things, and those things are connected, that those people engage in innovation, especially the earliest stages, whether it's in the sort of technological innovation, are actually part of and interact with those community of individuals and also the entrepreneurs. These are not two separate worlds that those worlds are actually connected together. When those worlds connect together, we see the development of what Scott talked about yesterday, these innovation-driven enterprises that skewed distribution, those companies at the high end of the distribution, that have potential to have really significant growth in economic outcomes, and obviously that leads to a variety of forms of impact, economic impact, social progress and so on. That's really the system that we think about and we want to ask the question, how does one intervene in that system, where are the points of leverage that we have? One thing that I think is worth saying that is very key to our model is that it's very easy to step back and talk about a system in the abstract, but we actually observe that these systems only work well when a whole range of key stakeholders, individuals, of human agents are actually involved and connected and talking to one another. There are lots of stories, particularly stories of places like Silicon Valley which will be stories all about the entrepreneur. If you come to Kendall Square and if you talk to people at MIT on the wrong day, they'll tell you it's all about MIT. On the right day, I think we remind you that it's actually about everybody being engaged. There's a role for risk capital providers. There is a role for very large corporations, and I think Suzanne articulated that well in terms of providing a lot of the complementary assets and some of the traditional assets and manufacturing and so on. But there's also a role for government, and so I think this is a rather different view than a view that you sometimes hear in some of the classic US narrative that the government should basically get out of the way, that in fact the government I think plays a quite strong and purposeful role in bringing stakeholders together and in providing some of the conditions for action. And what we see in some of these most well-functioning innovation ecosystems is that these stakeholders actually know one another and come together and engage with one another. The third piece that we think about is really this strategic piece, which is to say you can do some of the sort of setting of the table of creating the underlying institutional conditions for these ecosystems, but in fact it's about some quite clearly defined policy and programme interventions that are really the things that are going to make the difference in starting to accelerate innovation-driven entrepreneurship and accelerate the effectiveness of these particular regions, accelerating the ways in which people and resources come together to actually be effective. Now I think on the policy side we've already heard that innovation policy and entrepreneurship policy frankly is a complicated object. Somebody mentioned yesterday that we need to have some simple things for policymakers and politicians to understand. I think the challenge of innovation is that innovation policy is actually in the remit of many different government departments and many different agencies. You can't sort of put it all in one place and say do these one or two things and everything will be fine. There's many different policy levers that I think need to be pulled at some point simultaneously and in particular ways that allow the innovation capacity and the entrepreneurial capacity to have an effective policy foundation. There's a long list that I won't go through but somebody I think Greta earlier mentioned visas. Certainly on the innovation side the ability to make sure that you have the right talent, having the right sorts of mobility coming to the right places at the right time is critical. Similarly with entrepreneurship having the entrepreneur's visa as we have in the UK and other countries I think can be extremely critical. In terms of taxes, whilst I think it's the case that you can have high tax regimes that can still have lots of entrepreneurship we know that specific interventions like capital gains tax on angel investing and early stage investments can be really critical to driving capital into some of the earlier stages of certain companies. Things like bankruptcy rules and ease of doing business obviously all matter. So there's a sort of set of I think quite complicated but fairly clearly articulated pieces of innovation policy that I think we can define and for which we have growing evidence. But it's really the programme piece I want to talk about because that I think is where we can take action and we can actually see results in the more short term. So it's really with that in mind that our regional entrepreneurship acceleration programme brings regions together to help them think through both the system that they have and come to some shared agreement of what the strengths and weaknesses are in their system to come together as stakeholders so that they actually talk to one another and then to create these strategic priorities so that you have a prioritised ability to move forward with strategic actions that are really relevant to your region. And it really is in that priority setting an understanding of your comparative advantage that I think the cluster work becomes really powerful and helpful to say what are the specific areas in the economy, what are the assets in my economy that I want to build on where I think I have the opportunity for some sort of comparative advantage. So we bring regions together to basically engage in this shared learning to come to a shared perspective on where their system is, its strengths and weaknesses and what they do. And so our theory of change gets reflected in this particular programme which Scott referred to yesterday where we work with regions over about a two-year period to go through the frameworks, the strategy building and then really the implementation. And this is not about MIT coming saying you should do this, it's actually coming and being a thought partner and saying well how do you understand your data, what do you think is your comparative advantage and then can we help you in that implementation. As part of the implementation particularly for programmes I would say that we have to build on two things. So we have to build on the science of innovation as you've heard, what the evidence is but we also have to build on the art. There's a sort of an art and a science to this in part because our knowledge is not actually sufficiently robust for us to say if you do this under these conditions the following three things will happen. Our actual knowledge of this is not sufficiently reliable for us so in some ways we're at the opposite end of the problem from the sort of total factor productivity discussions that Manuel had yesterday where we can measure everything into oblivion and we're not quite sure what to do with that. In this case the programme bottom up level we're not quite sure always how to measure it we haven't done that many systematic studies and so we're actually having to build up from what makes sense and what we observe from lots of examples. But let me say something about what we see as the effective elements of an effective programme. Typically these programmes are going to be time bounded and they're going to be designed to enhance a particular area of strength or overcome a particular challenge. They do tend to build on comparative advantage and I think if there's one thing that's important about these kinds of programmes they generally link and engage more than one stakeholder group so things that are done across different stakeholder groups tend to be more effective than others. Let me give you an example that is close to home so one of the observations that we've made at MIT is that our hard tech, our tough tech hardware-based companies actually don't have the time the capital and the resources that they need to really develop and the time frames that tend to match the sort of venture capital that floats about. And so part of, we've created a new programme called the engine and one of the key pieces here is to actually link those entrepreneurs back to some of the highly specialised infrastructure and equipment on campus. So that's a fairly specific programme which comes with some fairly specific sorts of capital as well as infrastructure. So we're linking the entrepreneurs back to the universities to help give them the ability to translate those ideas more rapidly. Let me give you another example. So Kaufman Foundation for a long time had some Kaufman Fellows which basically gave PhD scientists and engineers the opportunity to work in the venture capital space for a period of time. One of the things that I think that did is it connected the universities and technical talent into the risk capital community. So it's a different bridge but it was a bridge that meant that over time this capital community, particularly in the US became highly technical in its expertise which made it much easier for them to then invest in these really deep science oriented companies. So that's another form of linkage. We've been working recently with Singapore who have a challenge of the fact that much of their top talent is sort of stuck inside the government. And so we've been helping them design a programme that actually bridges the gap between government and entrepreneurship and says, if you want to pay back your country don't work for the government, be an entrepreneur. That's meant to send both a cultural signal but also to again bridge the gap of the people in the ecosystem. So we're continually thinking about programme design in terms of the bridges that they can build across the different parts of the stakeholder ecosystem. Let me just say the last piece is that if we do this and we never measure anything then I think we are not developing the science of innovation in the way that we should. So we need to evaluate programme effectiveness as we go along. And while we need ecosystem level metrics of the form that we discussed on the panel yesterday we also need to get really good I think at programme evaluation. There's a lot of expertise in this around doing things like randomised controlled experiments and so on but really just think about this as us needing to do clinical trials on the kinds of programmes that we design. And when we do this we need to have the discipline to actually engage in this. This requires some bravery because you have to be willing to be able to find that your programme actually didn't have an effect or at least not an effect that's measurable. But I think it's extremely important. And so let me just end with one example of us having done this for an accelerator programme in Boston called Mass Challenge that takes about 120 something companies every year into a classic sort of three to four month mentor based programme of acceleration. I'm going to spare you the regression tables in the interests of time and simply show you the scatterplots. So imagine on the x-axis basically what I've done is you kind of line up all the companies that apply and I can judge them and I can give them a judging score. And what you'll see if you just looked along the x-axis is those scores are basically continuous and so between the companies I chose and the companies I didn't those ones on the margins are basically the same. And I picked that arbitrary cut off where that line is in the middle of 128 because that's the number that Mass Challenge needs to take every year. On the y-axis you can basically see the funding outcomes for these companies. And so it's the ones that are on your top right-hand side that actually were in the programme who got the accelerator treatment compared to the ones that were not. So what that basically shows us is that in fact in this case in that programme there really is a measurable demonstrative effect in terms of jobs, funding outcomes and so on. That requires in this case an entire PhD students' worth of effort to actually do this analysis in a rigorous and serious way. But as we get better at doing that I think we really have the opportunity to build up our science of innovation and science of programmes in a way that I think is going to mean that our ecosystems are going to be benefited by these kinds of programmes in a more systematic fashion. So thank you. Excellent. Thank you very much. Thank you to both professors and I think the provost of MIT who was here yesterday who oversees political science and management would be delighted that we have such professors here. Just listening to you both today what I love about this is the MIT approach of men's at mannus.  I'm also struck that you both take as your unit of analysis the ecosystem. So I wonder if I could just ask you both a quick question. This seems to be a different approach than just a firm level analysis or a national economy level analysis or even a cluster analysis. How much of a challenge is it or a novelty to use the ecosystem as a unit of analysis and then what have been the challenges of actually taking forward these particular programmematic interventions in the first case the manufacturing innovation initiatives on Professor Berger's side and then on Professor Murray's side applying REAP and are these things that we think we might be able to use here in Europe? I think when we are looking at the ecosystem we're looking at the resources that are available to firms as they attempt to create value so that when, for example, I would be interviewing one of the Ohio metalworking firms that fell into our main street sample and when I would ask them when you have a new idea, for example, about not simply making the metal boilers that three generations of your family have been making in this company but now you're actually talking about working on projects where you'll be bringing types of metal that you've used in construction into the defence industry. Where do you actually find the skilled people you need to do this? Where do you find the capital that you need to build new plants? Where do you get the skills that you don't have in your company? At each point in that interview I was constantly trying to understand what was it that the company had in their existing resources and where potentially in the environment within the range that they might actually access could they find the missing pieces? In the missing pieces here were missing pieces of skill, missing capital, missing expertise and skills that were not available within the firm. I think as we sat down then to do the analysis of the ecosystem and compared the situation of this Ohio company with a quite comparable in some ways company that we had interviewed in Germany the German firm that we had in mind as a sort of match was also working in metal working and was actually making machine tools and the machine tool manufacturer in Germany told us that most of his machine tools were being made for the auto industry and as he was thinking about the auto industry he came to feel that he was kind of vulnerable or too vulnerable to fluctuations in the automobile industry and that he wanted to sort of branch out. So he went to a trade fair and he observed that there were machine tool makers who were working on making machine tools for artificial hips so he began to realize that what he was seeing there in the trade fair wasn't so different from some of the machine tool technologies that he was using in the auto industry so he started experimenting within his own company on what they might do to make machine tools for artificial limbs, for knees and he was able to go to a technical university close to the company and get some help from them. He was able to go to a local banker who had known three generations of his family he was able to borrow from the local bank as I mentioned, no local banks anymore in the United States he was able to go to a Frauhofer Institute nearby, get some help from them he was able to join a German government financed research consortia on medical devices so there was, in his environment there was an extraordinary diversity of public goods or you could say semi-public goods that he could join with the resources that he had in his own firm whereas our American guy was home alone he basically was able to use only the resources that he had in his own pocket he wasn't even able really to use the R&D credits that our tax system offers because the definition of R&D and innovation in the United States is so narrow that it's really totally unavailable to your ordinary company so I think we had a kind of functional definition of ecosystem which amounted to the kinds of resources that were available on a semi-public basis that company individuals and companies could join with what they themselves had in pocket Excellent, thank you very much Sure, I mean I think the idea of a regional ecosystem on the one hand we've been inspired by some of the work on clusters that really is done at the sort of nuts to level kind of analysis but it's also something that I think are these boundaries that rather naturally emerge when you ask people how far do you reach to get the sorts of resources and the people and the circulation of ideas and talent and resources that you actually want and typically that happens in a way that can be quite hard to define because it doesn't always map neatly to political boundaries I think perhaps the Silicon Valley is one of the best examples is that there's no such, there's really no place it's just been defined as such there's no mayor of Silicon Valley as Phil likes to remind our students there's no sort of particular landmark that says this is where it is, it has become if you like a sort of a natural evolving boundary around that and some of the same, I think we're greater Boston well we really think about it as Kendall Square but if you came to visit you'd see that it sort of bleeds out over time to some natural boundaries Occasionally it's more straightforward a place like Singapore you might think of as a quite nicely self-contained ecosystem it's a country, it's a city state it seems to be about the scale and so I'm not sure that we're as scientific as we might like to be about where those boundaries really lie it is about the sort of the natural boundaries that the innovators and entrepreneurs sort of place around the activities that they do but you also mentioned some of the implementation challenges I think and I think our two other speakers can really speak to that my own experience is that particularly for the types of activities that we're talking about these sort of program interventions of which the manufacturing institutes I think would be one is that you do have to get engagement across multiple stakeholder groups and I think that's easy to say it's difficult to actually do meaningfully to sustain that engagement in practice over the long run I think it's also hard because what people really want is to say which program should we do, show me one and I'm going to cut and paste and replicate that and the reality is that each ecosystem has its own particular underlying conditions that means that the right intervention is going to be different in each case and so I think that's a very hard thing because you can't always build on precedent in a narrow sense because we don't have enough evidence and so we, at the same time as we're implementing a program we really need to implement the evidence building capability as well and the program evaluation and I think that requires a level of discipline and commitment to the implementation that is hard to do and to really have that political will to do that as well so those are the three things that I think are challenging in implementation Well thank you both professors Thank you as well We'll now move to the next slides One of the things that really strikes me having picked up on yesterday's conversation is how little this approach to ecosystems and dealing with specific companies relies on national percentages of funding in R&D and last night we heard about not making GDP our divine inspiration and not sacrificing people and the likelihoods on the altar of GDP I'm also struck with the implementation of innovation how often it's not just about calling for more a greater percentage of GDP to be spent on R&D it's like people calling for a greater percentage just to be spent on defence there may be magic in the numbers but it's also what you do on the ground which is a nice segue now to our two practitioners from our professors and I'm going to go to Donna first she represents the Highlands and Islands region of Northern Scotland which for those of you who follow Eurostat is a Nuts 2 region of the Nuts 1 region of the United Kingdom and I believe Scotland is still part of the United Kingdom as I speak this morning although things are moving quickly You couldn't resist it So with that and I am delighted it's part of it Of course I say that with some humility as a Brit waiting for a text to find out if my country is taking itself in union With that let's go to the happy of topic of how do you take these MIT insights into manufacturing into production in the innovation economy into the regional entrepreneurship acceleration program how do you take that into the region that you care about Donna What I'm going to speak about over the next 10 minutes essentially is patient policy making What I mean by that is I'm going to speak about what we have done in Scotland to boost our ecosystem over the past five years in particular I want to draw on Fiona's points around the connection between innovation capacity and entrepreneurial capacity and this for Scotland is a whole system endeavour Scotland of course has a long history of producing innovators and adventurers who have over centuries gone elsewhere in the world to commercialise and to exploit their ideas and now in the 21st century Scotland has 19 public universities and actually has the fifth highest spend in the OECD on higher education R&D but yet similar to many advanced economies continues to struggle to to be boosted continues to struggle to use this knowledge to underpin world class businesses so this Scottish economy is relatively mature and actually has been reasonably comfortable over a long period of time and actually this can lead to a degree of inertia inertia is a very negative thing in terms of innovation and in pushing forward so what does it take in that context to create outstanding entrepreneurs and an ecosystem that they need to launch and to scale innovation driven enterprises or IDEs as Fiona has spoken about so small countries small places like Scotland don't have deep pockets we can't publicly fund large amounts of basic or fundamental research and we need to wait for decades to see what happens in an ecosystem we have to exploit relatively close to market research we have to collaborate we need every single person in the system to draw on some of what Manuel said yesterday we have to draw the knowledge to us and we also have to focus tightly on exploiting opportunities we have to be agile and we have to use our comparative advantage and we have to step in uniting the innovation ecosystem we established our innovation centres to draw together in one place academia, business corporates and government around major industrial challenges global challenges where Scotland has a contribution to make I want to mention two of those innovation centres particularly the Scottish Aquacultural Innovation Centre or SAIC and the Industrial Biotechnology Innovation Centre by BioC Both of these innovation centres were created by business and academia together with government and under industry driven boards inside universities their purpose, their focus their outcomes have all been driven by industry challenge by customer need by stimulating the market what really started to drive results for years into these innovation centres has also been the quality of the leadership the human capital the connectivity between people and it goes back to an earlier point made that people know each other in a small environment people know they have to work together and also draw in international expertise where needed there's also a tremendous amount of collaborative spirit in all of this and a willingness on behalf of all parts of the ecosystem to pull together in response to that industry demand most recently my organisation Highlands and Islands Enterprise announced an additional million pounds of R&D funding with business to leverage and stimulate greater demand to focus on new technologies particularly in the aquaculture supply chain which is a big sector in Scotland and these funds will be managed by government with the innovation centre and matched by industry cash using of course our dear friends state aid articles 25 to 29 we never go away from state aid it's always there lurking in the background what is important with these funds is that they will be used across the industrial sectors so they'll be used from logistics to sensors to software to packaging it doesn't matter which sector the technology or the information comes from what matters is that it improves industrial productivity in a specific sector it's blurring the edges and drawing together the technologies in industrial biotechnology we have substantial international business players located in Scotland we have excellent research in marine, agricultural and health related areas and there is also a circular economy push on reducing waste particularly food waste which actually stimulates new products and services and we want these innovation centres to be right at the heart of that where I bioc perhaps has some advantages is actually in the coalescence of Scotland's deep research pool in this field with economic development agencies such as my own at the table we are part of the board and businesses of scale to capitalise on these technologies but it's the close connectivity between innovation and entrepreneurs the frictionless motion of ideas money and people that really matters in 2014 Scotland published our REAP strategy having completed the regional entrepreneurship acceleration programme Scotland was the first region or nation to be accepted onto the REAP programme following years of entrepreneurship teaching in Scotland by MIT the exchange of ideas with the MIT faculty and our peers on the regional entrepreneurship programme were of critical importance in the first cohort of REAP we had New Zealand and Finland and Andalusia from Spain as well as other regions Hangzhou from China and this stimulating debate and exchange of ideas was actually very important to Scotland through REAP we recognised that parts of our ecosystem needed to change and it could very easily take at least 10 years to deal and to shift with the cultural issues to paraphrase our culture in Scottish culture could very easily have eaten our REAP strategy for breakfast really didn't matter every part of the ecosystem in Scotland has to work effectively to enable entrepreneurial teams and intrapreneurial teams to build and to sustain ide's and you can see Scotland's REAP strategy online in executing it we looked firstly at a series of programmes that we could put into the system which we build on what we had but actually take us further and faster the first of those was in early stage finance together the private and the public sector launched the Scottish Edge a seed funding competition using government and corporate money now in round 10 the Scottish Edge has now awarded over 8 million pounds as a combination of private and public sector money to a wealth of young companies the Royal Bank of Scotland actually has provided a large part of the cash and there are other private sector partners in there pooling more ambitious businesses through the system and enabling them to be financed and to gain not just from the public sector financing with private sector but also the wealth of experience that sits in some corporates in Scotland to address business confidence and closed networking entrepreneurial Scotland emerged as a private sector network for seriously ambitious intrapreneurs entrepreneurs and innovators and it has now over 600 international members and they for example provide mentoring and non-executive director functions for growing enterprises the third thing we did to address the quality of entrepreneurial skill was to launch what we call the Scotland can do scale programme a summer school for entrepreneurs whose businesses already have market traction so these companies are already growing so this is about the quality of entrepreneurship the international perspective on where they go next the teaching for scale has been provided by Bill Ollett from MIT and Noam Wasserman initially from Harvard we now have put 130 very ambitious intrapreneurs and entrepreneurs through Scotland can do scale and we have another 70 coming this summer the competition for these places is fierce and what it has done is it's raised the game of entrepreneurship the visibility of entrepreneurs to feel that they can be part of something this dynamic and energetic the positive energy has been really refreshing and great to see and the other thing it's done is to foster a culture of celebration in Scotland celebration of success celebration of opportunity but also acceptance and recognition of failure as a way to actually build and to move on it's very important in Scottish culture the benefits of both so we now have over 100 very ambitious entrepreneurs that have gone through also through MIT's entrepreneurship development programme the return on investment from that has been astonishing in Scotland entrepreneurs find they can do environment in Boston and the positive business culture really invigorating but we take this back to Scotland we're not trying to replicate it we want to do it but we want to to work in a truly Scottish way and to build our system in a way that works for us we have searched Europe for executive education of the quality and relevance that MIT produce through EDP but we haven't been able to find it and that in itself is a statement and there is much much more to come from Scotland REAP is at least a 10 year journey for us and it's a 10 year journey in patient policy making and the execution of that and our research called the Global Entrepreneurship Development Index or GEDI as we like to call it which assesses our entrepreneurial system performance three years into our journey the difficulty with a lot of metrics is their backward looking and we're looking forward and so the way that we measure what's happening is actually what's happening with our people and the results of what we're investing in and how that feels across the ecosystem and the difference is all this made to the energy and the focus of what we're doing I think the REAP team took from the programme that what matters in Scotland is the connectivity the connection of everything together and the focus focus over very long periods of time the early signs are very positive for us the number of innovation driven enterprises or innovation active businesses is increasing rapidly and the diffusion of innovation across the system is evident to see the test will be whether the system is ready to help a number of these innovation driven enterprises to scale already in Scotland recently we saw our first two of these mythical unicorns be sold which actually has some negative sides but very positive sides as well in unicorns being sold there is a recycling of that talent and of that money back through the system in Scotland the importance of the informatics centre at the University of Edinburgh has been absolutely critical in the on-going creation and sustaining of talent and knowledge the next challenge for us is to actually turn our attention to healthcare because in the healthcare system in Scotland we have a great combination of innovators leading the public sector health service as a major customer and that's a different view for us as a consumer as the customer for business we have some innovative procurement tools we're currently experimenting with and working with and we now have a series of very capable entrepreneurs in the informatics and information management in the health sectors we also have 50 years of great data so let's see where the next 6 to 10 years takes us we have an appetite for change and we're still experimenting Excellent Thank you very much Donna for that perspective from Scotland I'm reminded as we prepare the slides for Lorde's how important it is that we have this MIT research and expertise but it takes human agents to actually make this happen it's rather like the diffusion of technology it may look from 30,000 feet that technology just diffuses it actually takes human agents it takes people to adopt the technology and to adapt it and the same with the insights from MIT it takes leaders to actually take it back to their regional ecosystems adopt the frameworks and then adapt them to their very specific regional ecosystems so having talked about Scotland in the very north of Europe we'd now like to Lorde's and Granada in the very south Thank you Phil Thank you to all of you for this opportunity it's a pleasure to be here today to be competitive region must invest in innovation driven entrepreneurship and the way to promote this innovation is via engage technology parks PTS Granada is a technology park focus on health broadly defined to include biotech pharmaceutical, medical device diagnostic and digital health the PTS Granada integrates four areas with the development and innovation so it's business development and innovation healthcare research and education in the research area PTS promotes initiative to foster basis, traditional and clinical research with the state of the art facilities so we have also a key player that is the Andalusian Biobank which manage all the biological materials that are stored in the entire Andalusian public health system in the healthcare area PTS Granada offer a brand new hospital with 700 beds and the Andalusian electronic medical records the EMR and the episcraving system currently compromise more than 8 million records and connect the majority of the region public primary care facilities as well as all pharmacies in the education area PTS hosts the Faculty of Medicine and the University of Health Science which complement the existing advanced multifunctional centre for simulation and technological innovation and these almost 10,000 MDs and medical professionals have participated at this centre in the last five years so what we are doing now is that the PTS lever to the increasing human capital in the region that currently includes more than 5,000 students in the health area so empowered by this MIT Regional Entrepreneurial Acceleration Program, the MIT REAP the PTS Granada aims to continue foster innovation driven entrepreneurship as a result of that in 2016 the European Commission has green light activate a three year long project funded by the European Union to support innovation in a small and medium size enterprise and foster the smart rein industrialization of Europe Granada Health and Energy Park will be one of the key participants in this project participating as a health related cluster organization PTS bring together a group of innovation driven enterprise in the sector for exploring, defining and developing innovative application and service for new cross sector and cross border value chains and PTS Granada is leading this large scale demonstrator validation and impact assessment aiming at testing the festivity of the innovation strategies proposed by the project so we hope that in the next two years we will be successful during the implementation and that you hear from us as some examples of European cross border and smart industrialization and accelerating economic development and job creation through effecting enhancing innovation driven ecosystem but let's give me a very specific example what is going on in Granada because that is what is happening now if we do a research we see how I mean of course I want to say that the health park is located just outside Granada and that is a beautiful city with 500 years of university history and a long tradition in health care producing a life science and a flourishing entrepreneurial ecosystem with innovative capacity we have the PhD, we have the research we have the infrastructure all of that but we have 4% of national scientific production that is pretty good because our territory is just 2.5% the population is almost 2% but the GDP again is 1.4 so that is a paradox so having so much national scientific production that we have solid GDP so what is happening so if we do a research and we research a 25,000 articles in 4 years in 6 major journals and we have we find that just 101 articles have a possible human clinical application and 10 years later just 10 years later so imagine 5 were in licensed clinical use so of these 5 just one and only one have a major impact on current medical practice so how we go from basic to clinical research how we are able to solve this patient need this doctor needs and I use this joke that say we should be more explicit here in step 2 that is a then America of course and that is what is going on difficultest step because developing medicine this sector health is a long risky expensive endeavor and all of you know that take long take a lot of years from an idea to a registration in FDA or if in a European medicine agency so what we try to use how we work with the people from MIT and trying to to look for the bottlenecks but in a very specific way so we saw that there was problem in the discovery research in the clinical development that in the translational medicine all of this part have some bottlenecks and so the thing is that we have a huge wave now here and we cannot be lost in translation we have to surf because if not is going to be a trouble so we have this translational paradigms that if we try to look for all these clinical needs that the doctor have that the patient have we need to identify very much where is the problem if it's in the basic part it's in the translational or it's in the clinical and if we do a survey to a lot of a company I just highlight the big pharma I will say that our main needs is to what all of them think is that our main needs is to identify and validate relevant biomarker to help us to sensibly decide if we should embark on big phase 3 clinical trials with cost million of euros to run so we have to work on that that is the bottleneck that is more important so seeing that we saw that there was a lot of translational capabilities that are they are working in academia and also in industry so we have the basic research in academia and industry and we have the patient care in academia in the hospital and the market and sales in the industry and the pharmaceutical development in the industry is very small but the clinical research in academia is pretty big so we need to look for this kind of project management team that combine academia and industry and that's we are working locally and it's working pretty well because once I don't know if I mentioned that that we have in the business development area we have 74 innovative or innovation driven enterprise and we have also big pharma we have mark we have Abbott we have Pfizer we have also ICT companies like Telefonica for digital health so what we are trying to do is build this new pathway for lab to market and work in how we can do this center for translational clinical research and that can overcome each of this article that the basic researcher phase, the clinical researcher phase the translational researcher phase so we are working in translational or focus on translational enablement or implementation and will consist of helping to develop coordinate and integrate project management teams as well as to provide human core and fiscal resource to ensure success of each translational project so here we have a clinical research center that do all this complex first into human and early phase clinical experiment we have this clinical research lab that do all the acquisition process, storage and retrieve of human specimens from human to clinical trials we have this translational research lab that focus on best side to bench hypothesis driven experiments so we are trying to to foster that and we have the resource center supporting us the translational project management teams that actually have the whole ecosystem, there is the government with the regulatory, the big pharma that they are combining and working with all the all the protocols how to go to the early phase clinical trials and they have the entrepreneur the entrepreneurial they have the university, they have the whole ecosystem and of course we are working in the next generation because who is the one on how we are going to be able to train a mentor and establish this collaborative community if we don't have this good role model of translational research so for us that's having challenging it's a challenge of course but we are working on that and we also are trying to combine this with this European project about cluster and bringing all this innovation capacity with entrepreneurial capacity and that's it I think if you have any question Thanks Now I understand we have microphones we've got a gentleman at the front who's ready while the microphone goes around that one thing I would say is both Donna and Lorde are very modest they talk about their teams, they talk about their region they talk about the ecosystem but what is very clear from the REAP program is it takes a leader and a champion of these REAP teams to make a difference and both Donna and Lorde have been exemplary in leading their regional ecosystems so Diego they are coming from Dartmouth I want to start by congratulating the panel this probably has been one of the best panels I've seen in a long time and of course it's not just because of the value of the individual pieces of the panel but because I think the whole is greater than the sum of the individual parts and it's been beautiful to see such a stark contrast between the models of innovation that Fiona and Suzanne have proposed that was very clear to me and my question is about that but before going to the question I want to frame it in the context of the different evolution of manufacturing in the US and Germany that Suzanne was touching on I think this is a very important question not only because it's important intrinsic importance but because of the things that it teaches us and so I think that Suzanne's analysis is very interesting my view is what Suzanne has highlighted but with some small details of that discrepancy so for example I've studied this issue too and I think that the role of human capital and human capital institutions is critical so the vocational training schools in Germany is fundamental to such of the youth go there and that provides a huge supply of semi-skill workers that we don't have in the US used to be on the job training would be the way to produce that in the US unfortunately because of the rotation in jobs in the US which is way higher than in Germany companies in the US don't provide these trainings while in Germany they do second important difference has to do with the focus of R&D so R&D in the US goes to software, electronics and pharma very easy to outsource in Germany it goes as you beautifully highlighted with your example of the machine company and it goes to tools, to cars to precision machinery that's very difficult to outsource, requires this human capital it fits into the local producers so jobs stay there. Finally the role of the government is fundamental but it's fundamental in a very sophisticated way so if you tell me what's the key government institution in Germany my answer is Fraunhofer and the reason why is well you know it's the following and now we're going to be presenting to the board of directors of Fraunhofer study have been conducted for three years evaluating the impact they have on German's productivities in the companies, the performance the main finding is that sales of companies that interact with Fraunhofer causally increases by 9% points after they engage in research contracts with Fraunhofer and that's what ties to the issue of innovation systems in the US and Germany so the way that this model the way in which knowledge and innovation goes to the market in this model is the following companies are below the knowledge frontier they would like to Diego are you building to a question this is my question this is my question the benefit of these smart academics now go on finish your point and then professor books it is interesting but I want to hear your answer back as well you know as with innovation you have to be patient okay so the question has to do with the contrast and so I want to highlight that contrast the way innovation and knowledge goes to the economy in this model that Susan was suggesting has to do with the fact that those that have the knowledge provided to the companies and then the companies continue to do in their business in contrast with the silicon ballet model what we are hoping is that the researchers the innovators become entrepreneurs and they guess what the market needs and then in that process hopefully they will get it right and hopefully they will bring something to the economy and that happens very very rarely and when it happens probably happens for reasons that are not the ones that lead to the highest value for society like you know my notion my sense is whether we should be hoping to produce the next Facebook and whether that is really what we should be aspiring to I guess that's the question and that's what I think the silicon ballet model produces excellent thank you very much can you pass the microphone to Bill Trachtenbird who will be our third questioner Professor Berger would you like to respond to Diego sure I'm happy to do that there was a second person over there so Fiona you mentioned that tax actually might impact innovation I would be really interested to hear a little bit more on that I read a study last week from LSE where they said even on a national level the result were inconclusive and I personally would argue that maybe we would need to increase the capital gains tax to compensate for the damage that some of the startups actually creates like Uber and Airbnb that are exploiting a regulatory gap rather than innovative gap that's on the one hand on the other hand only comes to the meat of the programs accelerators and incubators I have another question on that a German study on the Swedish incubators came out with similar results they saw a higher likelihood of survival based on if you were partaking in a program or if you were not however based on the selection criteria of the incubator I would suggest that that might be bias in a sense and on the other hand when I did my research interviewing the Swedish incubator managers I found that 80% of them actively avoid disruptive technologies hence lowering the risk overall and that while spending government money basically and what is your take on that and how can we actually allow for disruptive technology companies within the selection criteria Excellent thank you very much Manuel Yes Fiona I want to say that the RIP project is unique in my actually my knowledge in the sense that it is an intervention that is designed to have an impact but also to study to develop the science of innovation and we don't have many opportunities in the social sciences and economics to do things like that so it's a fantastic thing now but I didn't quite get what's the placebo here I mean what's the control group do you have a control group to which you can compare the effectiveness of the project in vain you have a particular model of what the region is and how to intervene but you need some mutations because that's not the only way to go about it and perhaps you need some a virtual region quote unquote of virtual stakeholders and so forth and try that out as well in your next version to Suzanne talk out the fragmentation of industry and the fact that all these traditional vertically integrated the corporations have vanished and there are these holes but on the other hand you have the Googles and the Amazon and so forth which are incredibly integrated in their own terms and they do have enormous capabilities to do not everything but a great deal not inside in a location but within the confines of the film so you have this dual phenomena I would like you to comment on that one word about Donna I commend the fact that you stressed emphasise the fact that visibility competition for this program a celebration of both success and restaking these are critical things that we don't pay enough attention to them thank you very much I saw a fourth question so we'll take that and give the panel a chance to come back and answer these thank you this is Enrique with MIT talking about clusters and also these efforts of regions how do you know when region ignites and how do you measure it very good questions so with that I think Professor Berger the first question may have been started with you so if you would like to come back on any of those I would take the question that Diego asked and that you asked I think the German model is really a challenging one for us to think about and because it really suggests that manufacturing can have a very significant role in an advanced industrial country if you look at how economists in the United States have looked at the German success they've really largely dismissed it as a kind of effect of over strong over strong euro which has given a strong advantage to German manufacturing so that the actual fact that Germany still has something like 20% of its workforce employed in manufacturing is seen as a kind of artifact an artificial derivative of a strong euro which is allowed an even stronger mark to in fact have an export capability that it would not have had if the mark had had to make its way in the world alone the consensus view of I would say American mainstream economists has been that the disappearance of manufacturing in the United States and the disappearance of agriculture is a kind of natural is a kind of natural phenomenon in the United States in 1900 we needed 40% of the workforce employed in agriculture to feed the rest of us today we need less than 2% of the population in manufacturing also imagine that we might have needed a large manufacturing workforce in the past today we really don't need that amount of people and I think focus uniquely a monetary phenomenon we really don't understand the role that manufacturing plays in Germany and what the disappearance of manufacturing has meant in the United States for our ability to scale up from innovation into actual commercialization it doesn't allow us to understand our deficit on tradeable goods so the challenges that you've raised Diego I think are really serious ones for our understanding and we really have not begun to fully understand the impact the impact of the differences between the two countries on your question don't we actually see the rebirth today of a certain kind of vertically integrated company I think it could well be that over the last five years as we've seen Google and Amazon companies that started as almost uniquely limited to software as they've begun to move into cars and drones and other things that actually require producing hardware it does look as if we are again looking at something like the rebirth of vertically integrated companies what's kind of interesting about these companies and you can see it is that they are protected by very large cash reserves you can see something like Apple against financial market pressures and it's fascinating to me how the unicorns and a number of even super unicorns are today resisting moving into public offerings exactly as a way of protecting themselves against the pressures that other companies have experienced from in fact being publicly listed companies if we just look however at the last 30 years and leave the last five out of consideration what's really interesting is that all of the new big companies over a 30 year period in the United States whether Cisco or Qualcomm or Apple or the others have been companies that in fact had no production capabilities I think we're seeing perhaps the beginning of something new there and something quite interesting Excellent, thank you very much Professor Murray So let me see if I can remember all the questions let me say just something about tax policy so I think it's really difficult to think about this in the broad sense of tax policy or taxation rate and ask what that's doing for a much more specific set of activities around entrepreneurship and innovation I think there's some quite compelling evidence that the changes in capital gains for very early stage investment especially angel investments has certainly led to a take off in the amount of angel and seed stage investment and risky things particularly in the UK when they change those policies so I think there's some quite reasonable evidence that that's true if you look at a different piece of regulation and I'm not sure we'd really call tax regulation but it's certainly around how money flows something like the prudent man the laws and rules that were put into place was the thing that allowed a lot of institutional investment to go into venture capital in the early stages in the US so I think there's some evidence there Should we argue for increased taxes because sometimes when we have early stage companies and these innovation driven enterprises they behave in ways that we don't like and they take advantage of regulatory loopholes I don't think that increasing taxes is the right solution to that I think the solution to that is to think about the regulation that you want to place on taxi services and such like so I don't think we should use the blunt instrument of taxation to solve some of the regulatory capture behaviours of specific companies I think that we should deal with that in a different way so that would be my answer to the kind of uber sort of piece of the question I think there's also some really interesting things that happen around taxes around charitable giving and philanthropy that have caused different flows of capital and more patient capital into certain sectors where there are charitable and impact oriented interests that I think are also quite interesting more subtle ways of thinking about capital flows to the question about accelerators you know how can we know obviously if you actually just looked at everybody who is in an accelerator just like if I looked at the outcomes of people who went to MIT and those that didn't or people who went to any other excellent program it's very very difficult to separate the selection from the treatment effect and so what we did specifically in our study is actually look at the margin between the people who just got in and the people who just didn't on the basis that if you actually looked at the scores and the way the judges understood those they were basically identical and so we're using a method called regression discontinuity just to look at that margin obviously the people that were the shoe in because they were fantastic they were going to do really well anyway so we're trying to be very very careful when we do this analysis to make sure that we are actually picking up an effect in a meaningful way not just away was really good at choosing I think that every accelerator is different and so it's when you want to think about whether or not you are taking in or not taking in disruptive and high growth potential businesses we have to look at what the selection criteria are and what the incentives are of the people running the program Mass challenge for example is not the profit so I think they have an ability to make different sets of choices they're not government funded at least today and well you asked a similar question but in a broader sense so we do not have placebo regions there are regions who haven't taken the program I think that the program is sufficiently messy for want of a better word in the specifics of the people involved at the particular moment that it's really difficult at the moment I think for us to really understand the impact at a pure regional level it's much easier for us to get a bit more serious about the impact of specific programs I think your idea of so mutation I think happens because we are not suggesting a specific solution that's going to be the same in every case and so in some senses every single region is doing something different that allows us to look at solutions that we believe take into account the specificity of the particular situation it would be just like my saying franhofer is great let's cut and paste that and put it in the UK and call it a catapult well because the entire UK industrial economy and structure and apprenticeships and industry structure is different then I would argue that the franhofer model if you cut and pasted it simply wouldn't work and so I see every interaction and every region in some ways as its own mutation but the idea of a sort of synthetic region I think we could do a lot with that and we could do a lot with the sort of modelling that we would to help us think through that so that we could be a bit more thoughtful and systematic so I appreciate that comment Thank you for professors I want to give the practitioners a chance to come in particularly as you're in regions we weren't able to run a parallel Scotland or a sterile Grenada and not treatment but how does it feel to you to actually be in those regions and what are the impacts you see Certainly from my perspective I would echo what Fiona said there is very much a unique programme and certainly you go in using the stakeholder model and looking at the ecosystem perspective but you draw from that what's right for your part of the world and the issues are evident to the team and the selection of the team that undertakes Reap is very carefully selected from each part of the ecosystem and that is there to reflect a different set of experiences different set of opinions for us the beauty of the programme in many ways was the journey that these people go on over a number of years and out into the real world again to execute the strategy that develops because that shared experience creates a terms of reference that then spreads more widely through the system and for us that was probably the most powerful element of it where you share a common language a common taxonomy almost of what it is we're talking about and then through our experience we shared that much more widely across a group of stakeholders hundreds of people in the system that then went further and further and on it goes so for us it's the team in itself was simply the beginning but the team was chosen very carefully not to present similar views because that's not the case we all have very different views and different experiences but with the MIT faculty we were able to build on a common set of experience that we could then apply and draw others in but at the end of the day it does take a certain type of person to be that receptive to that level of change because you have to be in a system that's ready for that and it's to the point around ignition and I'm not sure that ignition is necessarily the right word when you're dealing with something that takes years of mutation but I'd certainly like to think that Scotland is to an extent igniting itself and the catalyst in that has been the REAP programme Lord Ace, did you like a chance to come in? I mean in our case in Andalusia I mean for us it was very helpful to have this framework and to do this overall assessment of all the capacities from the innovation point of view and from the interpreter point of view so we researched of the people, the funding, infrastructure policy rewards and we were with this common language and for instance the demand we saw that we have limited and not focused enough today so we thought we have to work on that but this is a long period I mean we have to be patient of course and what we are doing right now is something, I mean the first thing that we are doing is measuring measuring everything I mean Scott is also with his work is helping us and Fiona and Mercedes Delgado is the advisor is the scientific advisor in our European project for this European cluster collaboration platform for instance now that we are researching is how to transfer how to do this cross border and cross sector value and in forest specific sector in health, aerospace agro food and ITC we are using all these tools and what we have now is a wonderful way to start to measuring everything to predict how will be the quality of these companies for instance in the case of this European project we have this project, the activate project will benefit and the lucy entrepreneur in mediatif and tangible way by provided direct funding we give them 5000 euros it's not a lot of money but it's a good start so how we do that and also we have other business school like ESA that is helping us for the mentorship and helping them how to have all these structure have the status to be the best company but the call for us now we are in the process of assessing and selecting the best companies is paramount so how we measure and how we are aware of that the companies that we are picking are the best one and that's for us was very helpful all this experience with the RIP team the work that is doing the MIT also we are also using the ESA work but for us, for the framework was very very important well thank you, now I realize we've gone a little over so I should probably wrap that up there and if people have further questions they can come up and ask people get us back on track so what I would just say in conclusion before I invite you to thank the panel here is I've been very heartened that nobody actually talked about culture because one of the things we've discovered is that Europeans who come to MIT in that area are as fabulously entrepreneurial as any of the local Americans and also that we can take the lessons from MIT to other parts of Europe, whether it's north Scotland or southern Spain so I think we have grounds for optimism here and I think that sets us up very nicely for the next panel led by the European Commission because it's really those executive agencies that need to take forward some of these lessons and while we were fretting yesterday that we couldn't see much of an ROI on our R&D in FTP and GDP actually if you put the three letter acronyms aside and talk about the people and take Manuel's impassioned plea last night to think about the people I think there are reasons for optimism so please join me in thanking this fabulous panel and I believe it's now coffee break