Karel Skokan VŠB-Technical University of Ostrava Faculty of Economics Czech Republic

1. Utrecht, 10-12.2.2008Regional Innovation System in Moravia Silesia(Old Industrial Region)of the Czech Republic Karel Skokan VŠB-Technical University of Ostrava Faculty of Economics Czech Republic Petr Rumpel University of Ostrava Faculty Science Czech Republic

2. Contents • Moravia Silesia in the process of transformation • FDI in Moravia Silesia • Regional innovation system • Industry clusters • Knowledge-bases and knowledge providers • Governance I

3. Location of Moravia Silesia region

4. Why old industrial region?Industrial tradition in Moravia Silesia • 1796 beginnings of coal mining in Ostrava • 1828 foundation of first ironworks in Ostrava (Vitkovice co.) • 1847 railway connection to Vienna and Cracow • 1850 + dynamic development of industry in Ostrava: coal mining, metallurgy, metal processing, engineering • 1900 + Ostrava City an industrial centre of Austrian-Hungarian Monarchy, • 1945 + great development of industry in the wholearea of Northern Moravia andSilesia including opening of NewIronworks inOstrava in 1951 • 1950 + period of enormous populationgrowth and industries expansion • 1989 +restructuring and revitalisation of industry,closure of mines, inflow of domestic and foreign investments

5. Moravia Silesia in the Czech RepublicMain Regional Indicators One of 14 NUTS 3 regions One of 8 NUTS 2 regions Elected Regional Authority Ostrava (310,000) – regional centre

6. Moravia Silesia Industry Structure

7. Manufacturing in Moravia Silesia

8. Transformation of Moravia Sielsia • Past (up to 1990): Steel hart of the country Traditional industries: Employment 1990 2005 Coal mining 110.000 30.000 Steel industry 70.000 20.000 • Future(after 2003): Dynamic innovative region Automotive industry HYUNDAI Heyes Lemmers+ others Electrical engineering SIEMENS ICT(PCs, SW) ASUSTek, TietoEnator Electronics ELCOM, Bang & Olufsen www,dynamicregion.cz

9. GDP of Moravia Silesia and CR (1996-2006) Break-even 2003, MS growth higher then of Czech Republic

10. Moravia Silesia: Trends in UnemploymentBreak-even: 2003 9,6 % Still 65 816

11. Foreign Direct Investment 1st pillar of Moravia Silesia transformation • Industrial zones • Nošovice (Huyndai) • Kopřivnice Business Park • Ostrava – Mošnov • Třinec – Baliny • Karviná – Nové Pole • Ostrava – Hrabová • Science & Technology Park • Krnov – Červený Dvůr Total area: 600 hectares More 50 FDI

12. Main FDI in Moravia Silesia

13. Foreign Investors in Moravia Silesia by Industry

14. Automotive industry expansion:Hyundai Manufacturing Plant Location: Nošovice IZ Construction: April 2007 Manufacturing: March 2009 Employees: 2700 (3500) Cars per year: 200,000 (300,000) Korean TIER 1 suppliers: at least 10 Other TIER 2,3 suppliers Expected new jobs by 2011: 11,000

15. Transformation results • Dynamic old industrial region with declining unemployment and growing GDP • Strong re-industrialization and moderate innovation in favorable external conditions • Still NOT critical mass of innovative businesses, traditional branches dominate • Good regional marketing: focus group – foreign investors, investor friendly environment and public administration • Good atmosphere and business climate,inflow of industrial investments and developers • Improved transport infrastructure and accession • Expanding knowledge bases – strong universities and secondary schooling system • Pollution of environment (ironworks, steelworks, cars, …), brownfields • No systemic innovation policy – no support for RIS from political elites, • Path dependence – technical skills, slow re-skilling

16. EU SF Providers RDA Ostrava Banks Regional Agencies Regional VCs and BAs Government Agencies Other Intermediaries Chamber of Commerce Regional innovation system in Moravia Silesia EU Innovation Policy Government and R&D Central Authorities National Innovation Policy Regional Authority / Local Authorities Regional Development Strategies and Programmes Regional Innovation Strategy Knowledge providers Universities R&D Institutes CAIT STP BIC ICs Regional Industry Clusters Old Economy Indigenous MNCs New EconomyInnovators Knowledge users

17. Business Structrure Main features From factor driven through investment to innovation driven • Old Economy (Indigenous and foreign) • New Economy Innovators (Indigenous and foreign) • Multi National Companies • Regional Industry Clusters

18. Industry Clusters in Moravia Silesia Region • Cluster movement in the Czech Republic started in Czech Republic in Moravia Silesia. 2002Pilot study on Clusters in North Moravia Silesia 2003 Preparation of cluster concept and policy at national level (within MIT and CzechInvest) 2004Development of Cluster programme 2004-2006 within EU Structural funds. 2006Establishment and development of cluster initiatives

19. Moravia Silesia Leading Sectors Organised in Clusters • Key traditional industry sectors: • Metal and processing – Natural traditional cluster HZ • Engineering – The Moravian-Silesian Engineering Cluster (MSSK) • Wood - The Moravian-Silesian Wood Cluster (MSDK) • Automotive – The Moravian-Silesian Automotive Cluster (MAK) • New competitive sectors: • Information technologies – IT Cluster • Hydrogen technologies – HYDROGEN (storage & distribution, safety) • Renewable energy - ENVICRACK (pyrolysis-based combustion of biowaste)

20. Regional clusters in Moravia Silasia

21. Most Successful Clustersin Moravia Silesia

22. Knowledge bases in Moravia Silesia region(1st assessment on employment by NACE)

23. The most relevant regional actors in the field of R&D and innovation in MSR • Tertiary education institutions – universities (their main mission is education based on R&D Innovative firms – generate economic growth in modern industries with high added value • R&D institutes • Supporting institutions – intermediaries • Policy makers: the role of initiator, sponsor and coordinator play the regional government and their leaders supported by municipal authority (selfgovernment) of regional capital.

24. Knowledge providers in Moravia Silesia Four universities – 39 000 students VŠB – Technical University Ostravawith 7 faculties: The Faculty of Economics, Faculty of Electrical Engineering and Computer Science, Faculty of Mining and Geology, Faculty of Metallurgy and Material Engineering, Faculty of Mechanical Engineering, Faculty of Civil Engineering and the newest Faculty of Safety Engineering. (22000 students) The University of Ostravawith 5 faculties: Faculty of Arts, Pedagogical Faculty, Faculty of Natural Sciences, Faculty of Medico-Social Studies. (9 000students) The Silesian Universitywith 3 faculties: Faculty of Business and Commerce, Faculty of Arts and Natural Sciences, Institute of Mathematics. (6000 students) Ostrava Business School(private). (2000 students)

25. Higher Technical Education in Moravia Silesia

26. R&D institutes • Institute of Geonics of Academy of Sciences Ostrava Poruba-focused on research of processes in the earth crust and its impact on environment as well as the research of materials. • Research Institute of Coal in Ostrava –Radvanice conducts research in the area of mining and for mining industry. • Vítkovice – Research and Development Ltd. Ostrava Vítkovice is engaged in research in traditional branches especially in metallurgy, energy production and material research. • VVUHŽ Research Institute of Iron Metallurgy a.s. Dobrá (near Frýdek Místek). The main traditional specialization of the institute is the so called secondary matallurgy but in the last years it has been adapted to the new needs of the automotive industry and automatization technology. It has available own laboratories and specialised testing devices.

27. Innovative firms With significant focus on research and development (without companies in traditional heavy industry): • Visteon - Autopal, Ltd. Nový Jičín • Bang and Olufsen (Industrial Park Kopřivnice + R&D Centre in STP Poruba) • SIEMENS VDO – Frenštát pod Radhoštěm and Ostrava • Most of ICT firms in MSR • Firms in Science and Technology Park in Poruba, • SME firms in Business Innovation Centre Ostrava - Vitkovice and in other incubators in the region • OSRAM Bruntál (Western part of the MSR) • BEHR – PZ Ostrava – Mošnov; Business Zone at Airport Ostrava • IVAX CZ Opava Komárov • Borcad CZ LTd.. • Tens of small companies in different branches

28. Moravia Silesia Strategy documents • Regional innovation strategy (2003) –need for upgrading • R&D development blueprint (2005) • Regional development programme (2000-2004, 2005-2008) • The way forward (2005 – long-term development vision) • Regional operational programme (2007-2013) for • EU Structural Funds (716 mil €) • Other Operation programmes in HR and Innovation Priority: Infrastructure, entrepreneurship, human resources and innovation

29. Supporting Institutions • Science and Technology Park Ostrava-Poruba, a.s. • Regional Development Agency Ostrava, a.s. (Initiatives ClusterNet, Innova, ForTech, Credo) • Business Incubator of Technical University Ostrava-Poruba – in construction • Centre of Advanced innovation Technologies (CPIT Centrum Pokročilých Inovačních Technologií) – in construction • BIC Ostrava – Business Innovation Centre Ostrava • Union for the Development of the Moravian – Silesian Region • Regional Innovation Centre Frýdek Místek, Ltd. • Chamber of Commerce – not with strong influence

30. Moravia Silesia DevelopmentResults 2007 • Generally a succes story in last years • Transformation of traditional industries (mining, metallurgy) • Modernisations of organisations and institutions - universities • Tertiarisation – retail, but banks and insurances, consulting services as well • Inflow of FDI – Hyundai (2007-2009, 1 bill. of EUR) • Development of automotive industry and electrotechnical industry • Still nor strong diversification – but diversification • New branches and firms in the regional context – IT, automotive • Hight developers activity – real estate market • Optimism and positive business climate • Brain drain stopped