Cities are considered the locus of contemporary value creation in knowledge-based economies, and Basel with its long-standing tradition of innovation in life sciences is its prime example. Could designing your campus as a small city infuse a company with new intrapreneurial dynamics and attract new business inhabitants? Novartis is trying to do just that with is new 51-acres site designed as a place of “knowledge, innovation and encounter”.

Basel-Stadt is a city and canton of 37 km2 situated in North-Western Switzerland, consisting of three communities, Basel, Richen and Betting and 165,041 inhabitants which make it the third largest city in Switzerland but also one of the most important economic regions of the Swiss Confederation.

Basel’s history is defined by its position at the border with France and Germany and the closeness to the river Rhine, which the city managed to transform into an economic opportunity starting from the beginning of the 18th century with the emergence of its first industrial structures focused on silk dye works (Schubert et al., 2011) which further diversified into important chemical and pharmaceutical companies in the 19th century (Dettwiler, 2014). Starting from the beginning of the 1990s, these industries evolved from their initial focus on research and production into the more knowledge-oriented research and development field of Life Sciences – agrochemicals, pharmaceuticals, biotechnology, medical devices (Dettwiler, 2014).

If the city itself can be characterised as the centre of the Basel Life Sciences Region, the boundaries of this economic cluster extend outside the city administrative region into the wider tri-national area (Metrobasel, 2005) which contains, based on different institutional cooperation networks, 8 cantons (5 in Switzerland, 3 in France) and one German district.

The region is home to two of the world’s leading pharmaceutical companies, Novartis and Hoffmann-La Roche, and other leading Life Sciences companies in related branches (Huntsman Advanced Materials, BASF, Bayer Consumer Care, Syngenta – agribusiness, Ciba and Clarinet – chemicals, Straumann and Synths – medical technology). Overall, 900 companies with a yearly turnover of more than 100 billion EUR and an 18% share of the added value in the region (Metrobasel, 2005). Because of this concentration, the region also has the highest R&D investment as a share of GDP in the world and the largest number of employees in Life Sciences in Europe (BAK, 2010).

CorporateLandscapes_Basel_Novartis

Arial view of Novartis’s Knowledge Campus

Recently, the region has also developed into an important cultural centre (Schubert et al., 2011) with Art Basel as the world’s largest art fair for modern and contemporary works and Baselworld, the world’s largest watch and jewellery show. The region is also home to approximately 45 museums as well as other cultural institutions that rely on private philanthropic funding. This turn comes from the growing belief that investing in culture (Barnett, 2001) and social capital (Cooke et al., 2005) can be used as a tool to attract and maintain high-skilled workers to the region, but it is also grounded on historical basis, since the first private art collection opened here as early as the 16th century.

With a growing workforce of 27,800 people (Metrobasel, 2005) distributed within different political and administrative boundaries (14% work in Germany, 5% in France, 81% in Switzerland), Basel requires a wider regional network of coordination and cooperation which can tackle the fragmentation usually associated with border positions. This is also emphasised by the nature of open-innovation which stands at the core of Life Sciences, where a dense and versatile network of actors is seen as a key asset and indicator of innovative potential (Moodysson and Jonsson, 2007). For lead companies like Novartis which heavily rely on research and higher-education institutions as well as other business-related branches in order to conduct and grow their business in a chain economy, it becomes of crucial importance that they take part or initiate partnerships and structures that coordinate and enhance the nature of the region and its agglomeration potential (Todtling et al., 2011).

Getting the most out of Basel’s vibrant open innovation environment

The performance of actors in the sector of Life Sciences largely relies on their ability to create new knowledge, but the complexity of the process starting from research to the commercialisation of the new product requires expertise to be distributed between a wide network of collaborating institutions (Moodysson and Jonsson, 2007), each adding its own innovations to the entire chain. Typical for Basel region is what is called a “whole-chain-culture” (Dorhofer et al., 2011) which means that the entire innovation-creating chain of the Life Sciences industry – from basic research to clinical research, marketing and sales plus all necessary support functions such as financing services and suppliers – is entirely settled within the region and its parts are closely interlinked.

As a leading regional company, Novartis supports the development of the innovation networks (Moodysson and Jonsson, 2007) while it focuses on organising these complex structures and interactions in close proximity and control of their own campus (Todtling et al., 2011). In this sense, Novartis is investing in internal R&D through its own Friedrich Miescher Institute (part of Novartis Research Foundation) but also in complex collaborations with regional and national education and research institutions (Gartner, 2011). What is important to remark here is that it never does this alone, but through its wider network of stakeholders that facilitate the whole production cycle, thus leveraging risks and investment costs while also supporting the growth of partners. A good example is the recent effort of the company to reallocate the Department of Biosystems Sciences and Engineering from the prestigious ETH Zurich in Basel or the foundation of the School of Life Sciences from the University of Applied Sciences Northwestern Switzerland (Moodysson and Jonsson, 2007).

Another main component of Novartis’s open innovation strategy is the out- and in-licensing of pharmaceutical products and the targeted acquisition of innovative companies (Todtling et al., 2011) through its own venture fund which has until now supported more than 150 entrepreneurial ventures from various Life Sciences domains (Novartis Venture Fund, 2016).

Open innovation in a controlled city-like environment

Looking at the physical environment of innovation, compared to Roche which pursues a more classical open innovation strategy which focuses on the openness of the company towards the Basel region (Todtling et al., 2011), Novartis is more centralised on their campus. In this sense, open-innovation in Novartis is mostly confined to the partners that the company tries to bring inside its expanding campus (Todtling et al., 2011) which provides them with a supervised and controlled innovation environment.

Novartis’s regional innovation strategy thus focuses on the development and growth of its “Knowledge Campus” as an innovative physical platform for different actors cooperating with the firm (Frei, 2012). Its physical environment is based on Magnago Lampugnani’s Master Plan from 2002 which, in its architect’s words, is defined as “a city within a city” (Lampugnani, 2009). Its regular grid of streets mimics a planned urban extension. It is a reference to the Celtic archaeological site found in the area but, more importantly, it is based on the former factory grounds that it slowly replaces. The vision implies a staged decommissioning of industrial production until 2020 and its redevelopment into high-quality office space (Lampugnani, 2002). Instead of building a small number of skyscrapers, the plan focuses on lower density buildings intertwined with public spaces and functions which mimic an urban environment but also the internal institutional organisation of Novartis in different departments. The individual buildings were commissioned from different architecture studios in order to enhance the diversity of style but also from a marketing perspective, the campus being the home of buildings by ten Pritzker Prize architecture studios.

Keeping your valuable staff happy

The main goal of Novartis’s involvement into social programmes comes from its need to attract and retain high-skilled workers and their families into the area, which is crucial for its business as part of the Life Sciences (Todtling et al., 2005). As with the regional development goals, Novartis does not act alone but as a part of a cross-border stakeholder network, MetroBasel, involving private and public entities.

In this sense, the Metrobasel vision clearly states its partners support for improving regional quality of life through investment in culture, education and the creation of a shared regional identity for its inhabitants (Metrobasel, 2006).

On more concrete terms, the coalition and Novartis support the activity of Foundation Beyeler, a privately owned art collection and museum, as well as other high-level cultural institutions like Theatre Basel, Antikenmuseum Basel, Kunstmuseum Basel, Museum der Kulturen Basel. Through this network, they are also the main supporters of world-renowned fairs like Art Basel or Baselworld as well as more local ones like the Basel Museum Night (Novartis, 2016).

Novartis also cultivates close ties with the University of Basel, the ETH in Zurich and the EPF in Lausanne (Novartis, 2016). The Novartis Foundation sponsors young talent in biomedical research and supports research projects at Swiss universities.

In the field of sport, Novartis supports the local football team FC Basel and the basketball team Starlings Basket Regio Basel. They also help promote football talents in the Basel region (Novartis, 2016).

The starchitecture of high-end innovation at Novartis

Novartis’s products are catered to the health industry, medical equipment and research. Thus, there is no need for the company to direct important investments towards marketing its products to individual consumers.

In Basel, Novartis’s marketing investment is mainly focused towards promoting the company as a great working environment for its target group, international high skilled staff and towards its direct customers, medical and research institutions (Dorhofer et al., 2011). In this sense, since 2002, with the redevelopment of its Campus based on Vittorio Magnago Lampugnani’s Master Plan, the company has invited a large number of world-renowned architects (Diener + Diener, Peter Märkli, SANAA, Marco Serra, Adolf Krischanitz, Studio di Architettura, José Rafael Moneo Vallés, Frank O. Gehry, Tadao Ando, Fumihiko Maki, David Chipperfield, Yoshio Taniguchi, Eduardo Souto de Moura, Álvaro Siza, Herzog & de Meuron, Juan Navarro Baldeweg and Rem Koolhaas) to build iconic buildings and thus legitimise its headquarters as a state-of-the-art “Campus of Knowledge and Innovation”.

Navigating complex and overlapping stakeholder networks

Politics in the region are characterised by a strong sense of consensus with a left-liberal focus (Schubert et al., 2011). As mentioned before, Basel’s unique location at the borders with France and Germany has given birth to a tradition of trans-national negotiations (ETH-Studio, 2009) and the development of a series of cross-border structures, slowly expanding since the 1960s (Regio Basilensis), when the vision for Basel was first elaborated on a regional level towards a cross-border approach and a shared common economic and spatial vision since the mid-1990s. Transnational politics has benefited from a considerable public investment in recent decades and it involves a large variety of local, regional and national actors able to facilitate the development of Basel as an integrated metropolitan region (Reitel, 2010).

The most important of these structures is the Trinational Eurodistrict Basel which since 2007 coordinates politics and administration with a focus on spatial planning (Schubert et al., 2011). Its main objectives are improving regional transport infrastructure and the border region current spatial and programmatic fragmentation (TEB, 2007).

Other regional political and administrative cooperation initiatives include Infobest Palmrain (unified info point for regional taxation, labour law etc.), the Basel Metropolitan Conference (a link between the political, economic and social within Swiss cantons and the three bordering countries), the Upper Rhine Conference (12 working groups and projects focused on enhancing the life of citizens from South Palatinate, Baden-Wurttemberg, Alsace and N-W Switzerland), the Upper Rhine Metropolitan Area (the umbrella organisation for cross-border cooperation for space sustainability and development of a common regional strategy), INTERREG IV Upper Rhine (EU support programme for cross-border projects), the energy and climate Network Trinational Metropolitan Region of the Upper Rhine – TRION (linking players in energy and the fight against global warming), the tri-national environmental centre – Truz (environmental association uniting more than 50 environmental initiatives, communities, institutions and companies) and the Commission Hochrhein (promoting cooperation of Swiss and German actors on both sides of the Rhine between Lake Constance and Basel).

In regard to Life Sciences, we can find a few other governance structures formed in overlapping geographical regions which combine public, private and research institutions not restricted to the field of economy and R&D (Dörhöfer et al., 2009):

Basel Area is a marketing initiative and platform focusing on promoting the region worldwide in order to attract and support foreign companies and employees to relocate to the region.

MetroBasel is a platform initiated by BAK Basel Economics that comprises of around 25 companies, associations and local authorities from the adjacent regions with the goal of promoting the development of a coherent Basel trinational metropolitan region around the city of Basel. Its activity is mainly focused on education, quality of life and transport infrastructure (Gartner, 2011), but more importantly, it is the regional structure which represents the interests of Novartis, as one of its main stakeholders and financial supporters.

BioValley is an older and more “grass-roots” initiative funded in 1995 by retired regional employees as a network and a series of meetings between companies, political institutions and individuals to promote the growth of the biotech cluster in the Upper Rhine region as defined by the densely interlinked centres of Basel, Strasbourg and Freiburg (Metrobasel, 2005).

Envisioning the future together

All of these networks share similar development objectives and visions for overlapping geographical regions. Furthermore, all of them are highly polarised by the city of Basel which plays a regional brokerage role because of its wealth compared to the surrounding regions and its ability to invest it outside its administrative borders (Walther et al., 2013), through the Swiss Confederation Agglomeration Policy. This allows Switzerland to finance infrastructure in neighbouring countries if the investments are beneficial for the Basel region. An interesting example of this policy in action is the Basel-Mulhouse-Freiburg EuroAirport that is located in France but has benefited from Swiss investment and is operated by both countries (Beyer, 2007).

The lead role played by Basel has also led to a polarisation of urban elites inside its administrative boundaries (ESPON, 2010) and it explains why companies like Novartis locate their headquarters there while using the cross-border networks and strategies in order to expand and develop the fragmented territory located around the national border region.

Moving further, towards a more spatialized approach to cross-border governance structures, in 2013, as part of the Trinational Eurodistric Basel coalition, IBA Basel 2020 was created. It is an international architecture exhibition but also a platform focusing on communicating, marketing, supporting and implementing existing or future private, public or private-public projects which promote the cross-border agglomeration on three themes: “Landscapes“, “Urban Spaces” and “Living together” (IBA Basel 2020, 2013). Following its public call for projects organised in 2010, 40 projects were selected which became part of what is now the 3Land Development Vision, a joint master plan for the neighbouring cities of Basel, Huningue and Weil am Rhein (MVRDV et al., 2011).

IBA Basel 2020 and the 3Land Vision are materialisations of an emerging governance structure and a result of the diversity of actors and interests found at a regional level. Instead of imposing an overarching vision and defining it through projects and programmes that further need to obtain support from different entities, IBA Basel and the 3Land Vision combine overarching regional development goals with existing projects proposals for which there is already consensus but which require further coordination and framing. The 3Land Vision takes into account the redevelopment of a smaller geographical region than the IBA Basel 2020 as a whole or the administrative boundaries of the Trinational Eurodistrict Basel but the selected area represents a key development site for enhancing cross-border spatial and economic development.

An important stakeholder in the redevelopment of the east and west Rhine bank and the border region between Basel and Huningue is Novartis (MVRDV et al., 2011). The company is the main landowner in the area along with BASF and the main investor through its newly developed Knowledge Campus located inside Basel’s administrative boundaries and its still operational industrial infrastructure located on the other side of the border in Huningue, France. The area’s close proximity to the EuroAirport and the future availability of land through the relocation of Novartis production facilities represent great assets for the expansion of the existing corporate campus but also for building new facilities for start-ups, business accelerators (MVRDV et al., 2011), higher-education institutions and research laboratories, all related to Life Sciences and in this sense, highly beneficial for Novartis’s own growth agenda.

The first step of the plan is the development of the Campus Plus project, an expansion of the existing Novartis Campus towards the riverfront which will be facilitated through a private-public partnership with the Canton Basel and the port authority (Regierungsrat des Kantons Basel-Stadt, 2011), where the port will sell a part of its land to Novartis in order to build three new 65-m-high skyscrapers and six other office buildings in exchange for redeveloping the riverfront as a publicly accessible park and pedestrian and bike path connecting the city of Basel to Huningue.

In the past years, the area was subjected to another plan and public-private partnership for the development of a new university campus, Campus Volta as the new Swiss Nanoscience Institute (Schubert et al., 2011). The newly proposed campus, situated in very close vicinity to the existing Novartis HQ would have brought together on the same premises the Institute for chemistry, physics, biology, mathematics and computer sciences, the Institute for Systems Biology, ETH Zurich (Swiss Federal Institute of Technology Zurich) and a Novartis-owned institute. After numerous appeals, including ones coming from the rival Roche, the promoter coalition has moved the new campus building closer to the existing campus and the university hospital.

Both the Campus Volta project and the projects proposed as part of the 3Land Vision for the area adjacent to the Novartis Campus illustrate the close collaboration between the state and private actors which materialise in the skilful combination of public investment in infrastructure, public spaces and public institutions (universities and research) which are triggered by private interest and investment.

The 3Land Vision developed by MVRDV

The 3Land Vision developed by MVRDV

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