What can Parliamentarians Do? CPA, London, United Kingdom Technology Transfer What can Parliamentarians Do? CPA, London, United Kingdom 26 July 2011

The commercial challenge How do you get from technical ‘proof of concept’ to broad-scale market penetration? Technical ‘proof of concept’ £300 bn Publicly Funded Research Developt & early market entry Venture Capital Investment Round(s) Growth Phase Acquisition By Technology Company Commercial Maturity Broad-Scale Market Adoption

The market is inefficient Established technology companies are conflicted: adopting better, cheaper technologies simply cannibalises their existing business. In developing country market established companies may not exist Technical ‘proof of concept’ Developt & early market entry Growth Phase Commercial Maturity £300 bn Publicly Funded Research Venture Capital Investment Round(s) Acquisition By Tier One Technology Company Broad-Scale Market Operation To Partners’ Benefit

There is a critical resource gap Technology transfer offices do not have the skills and resources to develop an investible commercialisation plan. Traditional VC model is not to rescue good technologies from bad business plans. Technical ‘proof of concept’ Developt & early market entry Growth Phase Commercial Maturity £300 bn Publicly Funded Research Venture Capital Investment Round(s) Acquisition By Technology Company Broad-Scale Market Adoption

H2O fills the resource gap Solution 1: harness H2O scouting process to the strategic needs of our Partners to identify best available technologies. Technical ‘proof of concept’ Needs-driven technology ID Scout Best Available Technology To Meet Need Developt & early market entry Growth Phase Commercial Maturity £300 bn Publicly Funded Research Venture Capital Investment Round(s) Acquisition By Tier One Technology Company Broad-Scale Market Adoption

H2O fills the resource gap Solution 2: harness H2O’s team of experienced technology entrepreneurs to our partners’ network to take technologies through ‘proof of value’ and into the market. Technical ‘proof of concept’ Needs-driven technology ID Commercial ‘proof of value’ Developt & Spinout Creation Developt & early market entry Growth Phase Commercial Maturity £300 bn Publicly Funded Research Scout Best Available Technology To Meet Need Venture Capital Investment Round(s) Acquisition By Technology Company Broad-Scale Market Adoption

What Can Parliamentarians Do? “Roots & Shoots” Model Technology Scout Process Identify Which Markets to Stimulate National Level Strategic Thinking Nurture Commercial “Shoots” Into Local Markets Public Support to Leverage Private Investment £300 bn Publicly Funded Research Cherry Pick Best Technology To Meet Need Establish NewCo Around Best Technology Bed Down “Roots” Into Local Research Base Translational Research Funding Technical ‘proof of concept’

The opportunity The world spends iro £300bn on publicly funded research annually; the technology outputs mostly neglected. Technology transfer system is hugely inefficient Technology Transfer Offices are grossly under-resourced; Venture Capital (if available) needs well developed business plans; Incumbent tech companies (if they exist) view innovation as a risk. Key limiting factor: experienced technology entrepreneurship Research Institutions lack the skills and resources to develop high quality commercial propositions from raw technology Venture Capital will not invest in undeveloped propositions Challenge to pull the best available technologies through to market Opportunity to cherry pick the best of the world’s publicly funded research output to meet market needs, unlock financial returns and deliver long-term social impact Several lines of evidence for under-exploitation. Value of IP Group / Qinetiq versus commercial R&D spend Tom Hockaday thinks spinout rate at Oxford (exceptionally well-resourced University) could double with better resourcing.

Dr Paul Coleman paul.coleman@h2ovp.com