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Dr. Thomas J Allen, MIT Center for Collective Intelligence 03-19-09 Interview Transcription

Dr. Thomas J Allen, MIT Center for Collective Intelligence 03-19-09 Interview Transcription

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Published by Coins
Creating the right space to foster a spirit of innovation

Dr. Thomas J Allen, Margaret MacVicar Faculty Fellow, Howard W. Johnson Professor of Management, Emeritus, MIT Sloan School of Management, talks about his seminal research documenting the value of companies and people working in close proximity to nurture innovation. Tom Allen's work formulated the idea of the Allen Curve - a simple understanding that the closer people and companies are located the more cross fertilization of ideas, network building, talent exchange, and enterprise results. This research supports the large success in regional technology business building at the Youngstown Business Incubator, Youngstown, Ohio and the Charleston Digital Corridor, Charleston, South Carolina - locations driven by investment in Quality, Connected Places and resulting in cool surroundings where people and companies want to be!

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Note: Dr Allen contributed this interview to the Institute for Open Economic Networks (I-Open) in 2009 to further education of new practices and tools to build enterprise in Open Source Economic Development. Copyright 2010 Betsey Merkel and I-Open. Creative Commons 3.0 Attribution-Noncommercial-No Derivative Works. Institute for Open Economic Networks (I-Open) 4415 Euclid Ave 3rd Fl Cleveland, Ohio 44103 USA Learn more about I-Open at http://i-open-2.near-time.net/overview/welcome
Creating the right space to foster a spirit of innovation

Dr. Thomas J Allen, Margaret MacVicar Faculty Fellow, Howard W. Johnson Professor of Management, Emeritus, MIT Sloan School of Management, talks about his seminal research documenting the value of companies and people working in close proximity to nurture innovation. Tom Allen's work formulated the idea of the Allen Curve - a simple understanding that the closer people and companies are located the more cross fertilization of ideas, network building, talent exchange, and enterprise results. This research supports the large success in regional technology business building at the Youngstown Business Incubator, Youngstown, Ohio and the Charleston Digital Corridor, Charleston, South Carolina - locations driven by investment in Quality, Connected Places and resulting in cool surroundings where people and companies want to be!

Watch the streaming video interview at:
http://www.livestream.com/coinsconference/video?clipId=flv_0bc40038-5847-43d3-b1ab-d4f42015be5e

Learn about COINs across these media platforms:


COINs 2010 http://www.coins2010.com
Facebook http://www.facebook.com/pages/Savannah-GA/Collaborative-Innovation-Networks-COINS2010-Conference/102489653133049
Flickr http://www.flickr.com/photos/coinsconference/
Livestream http://www.livestream.com/coinsconference
Scribd http://www.scribd.com/SwarmCreativity
Slideshare http://www.slideshare.net/SwarmCreativity
Twitter http://twitter.com/coins_2010
Twitter Hashtag #COINS2010
Vimeo http://www.vimeo.com/user4147060
You Tube http://www.youtube.com/coinsconference

Note: Dr Allen contributed this interview to the Institute for Open Economic Networks (I-Open) in 2009 to further education of new practices and tools to build enterprise in Open Source Economic Development. Copyright 2010 Betsey Merkel and I-Open. Creative Commons 3.0 Attribution-Noncommercial-No Derivative Works. Institute for Open Economic Networks (I-Open) 4415 Euclid Ave 3rd Fl Cleveland, Ohio 44103 USA Learn more about I-Open at http://i-open-2.near-time.net/overview/welcome

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Published by: Coins on Aug 08, 2010
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Copyright 2010 Betsey Merkel and I-Open. Creative Commons 3.0Attribution-Noncommercial-No Derivative Works. Institute for OpenEconomic Networks (I-Open) 4415 Euclid Ave 3rd Fl Cleveland, Ohio44103 USA
 1
Interview and transcription March 19, 2009
Tom Allen on the Allen Curve: Creating the right space to foster a spirit of innovationThomas Allen, Ph.D.Howard W. Johnson Professor of Management, EmeritusMIT Sloan School of Management
[00:09:58] I’m Tom Allen and I’m talking about a study that we did inbiotechnology, clusters of biology technology companies in theBoston Cambridge area, testing the basic hypothesis that whether clustering of start-up high technology companies together geographically has any benefits or not. It’s been a discussion in thepast. We defined an experimental group first of companies that werelocated in the region behind MIT or Harvard Medical School on theBoston side of the Charles River. We defined it by postal codes. Wesaid if they happened to be in one or more zip codes then they werein our experimental group. If not, they were in our control group,which included companies within one hundred kilometers of wherethe experimental group is located. One went as far as Wooster,Massachusetts. And we made comparisons between the two of them;now, what we had – and you’ve got some of the data - we set up aweb page that listed all of the companies that were doingbiotechnology research in the region and we pulled a sample of fiftycompanies that we were going to gather data from and what we did
 
 
Copyright 2010 Betsey Merkel and I-Open. Creative Commons 3.0Attribution-Noncommercial-No Derivative Works. Institute for OpenEconomic Networks (I-Open) 4415 Euclid Ave 3rd Fl Cleveland, Ohio44103 USA
 2
was set up the web page first for the two hundred or so companies.Then, on randomly chosen days we send e-mails out to scientists inthe fifty companies that we’re studying and we asked them to thinkabout what they did on that given day. Had they talked to anybody inany of these other companies about a scientific subject, not businessdeals, but scientific subjects? Then just take the mouse and click thatcompany, it goes into our data base, we collect that because we dothis repeatedly over a period of six months, every week on a differentday for six months. Then we plot out a network from the data that wehave, we know which companies have had some contact with oneanother and that includes by the way, five major broad basedpharmaceutical companies located in the area. Merck, Pfizer, Wyeth,Astrozac, and Louverdis are located here and we sampled scientistsin those companies as well. There were also a number of large well-established biotechnology companies: Biogen, Genzyme, and soforth, five or six companies of that sort and we sampled from them aswell. So, we had a pretty complete network of companies becauseeven those we weren’t studying directly, we got references to,somebody said to talk to, somebody in the company that didn’thappen to be one of the ones we were sampling we assumed thatthat meant there was communication between those two companies.Once you have data like that you can begin to ask a lot of questionsabout it. For example, one of the basic questions was, “How are thecommunications within the cluster, within those zip codes than thereis with those companies outside?” And the answer is, “Yes.” If youplace a simple graph theory measures to it you find the companieswithin the geographic cluster are more central to the network than areother companies. Then, you can ask things about the role of theUniversities, the role of the major pharmaceutical companies, and soforth. You find, of course, that the Universities are a major factor because that’s where most of the companies have their origins. Therewere actually five Universities nearby doing biotechnology research.But most of the work, most of the companies had their origins ineither Harvard Medical School or MIT. But, Boston University is veryactive, a lot of companies came out of Boston University,Northeastern University less active, Tufts a little bit through the
 
 
Copyright 2010 Betsey Merkel and I-Open. Creative Commons 3.0Attribution-Noncommercial-No Derivative Works. Institute for OpenEconomic Networks (I-Open) 4415 Euclid Ave 3rd Fl Cleveland, Ohio44103 USA
 3
Medical School and so forth; but one of the key things that came outwas the role of those major pharmaceutical companies, everybodywas connected into to them. Largely, I think, although I can’t reallytest that, because they were active in going out and trying to makecontact with the small companies. They were all obviously trying toexpand into biotechnology and there is a lot of technology available inthese small companies, they were looking for license opportunities or acquisition opportunities, and they were working hard at it. But, theybecome a major factor in the network and I think that it really helpsthe network to develop as a result of their position. We also found thecommunication was much higher, as I think I said already, of withinthe geographically defined cluster area than the companies that werefarther out. We tested it still another way to see whether there wasany affect from physical proximity. We obtained the latitude andlongitude of each of the companies in the sample, now that obviouslyis the location of the front door, but these companies were prettysmall and the error there isn’t very great. There is a bigger error inthat we measured the distance between the companies but we did it‘as the crow flies’ - we didn’t measure around corners or anything, itcould be done but I wouldn’t get into that level of detail. But we thenwere able to compute for each company the average distance thatcompany was from all the other companies in our study. So nowthat’s a character of the company, what’s their mean distance from allthe other companies that are in the study? We related that to the levelof communication among that same set, how much did that focuscompany, the company that we’re looking at, how much did thatcompany, the scientists in that company, communicate with all theother companies? And so now you have two measures for eachcompany: they’re average distance and their level of communicationwith those other companies. And when you relate those two you finda sudden drop within a few kilometers, it’s just about zero, it’s veryhigh in close and drops off very rapidly with distance showing thatbroadband communication isn’t really a substitute for face-to-face,these people were talking with one another face-to-face. That is howdistance impacts the likelihood of communication betweencompanies. Some of that I think is due to the fact that the companies

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