World Bank, ME & LDA seminar Peter Lindholm Organising and operating technology commercialisation World Bank, ME & LDA seminar Riga June 9th 2004 p.lindholm@inno-group.com

Summary A few key words Issues Necessary ingredients The inno model Expected outputs

1 - A few key words Commercialisation has little to do with scientific excellence, it is about money More than one Beneficiary (researchers, institutions, local authorities, State) Commercialisation is about skills No magic “Graal” in this business  

Patent Exploitation “A patent is an article of trade, not an academic award” Systematic selection of ideas and inventions aiming to assess exploitability Only inventions with believed potential to successfully compete on the market are supported Out of these the most promising projects are singled out and concentrated upon One reason is: only 20% of all claimed patents are subject to Intellectual Property Rights (IPR) and are effectively in use. 25 % state of the art => no patent 5 % unrealisable 10 % other solution 10 % not marketable 30 % patentable but not in use Exploitability is the decisive factor for activities. If an invention is not exploitable even on a long-term perspective there is no use to research its patentability.

2 - Issues Evaluating the existing potential of « objects » to be commercialised? Willingness of players to enter into a strong commercialisation process Availability of resources and competences to start the process

Value creation through the innovation lifecycle R&D Organisations Course of exploitation Capital inflow from exploited research (added funds for further research) Research Projects > Spin-outs > Start-ups > Licensing Intellectual Property “Archives” = Negative Inflow

3 - Necessary Ingredients (1) A portfolio of many researchers to ensure a permanent deal-flow of innovations Experience shows that a minimum of 1.000 researchers is needed to sustain a proper commercialisation team

3 - Necessary Ingredients (2) A strong consensus between the different stakeholders Commercialisation of public research is a complex process that often « hearts » researchers’ culture. Gaining support from researchers, heads of departments, chancellors is an absolute necessity

3 - Necessary Ingredients (3) Agree on measurable targets Turnover Start-ups Growth of existing companies Joint-ventures Research contracts

3 - Necessary Ingredients (4) Time Time to find out what can be commercialised and under which form Time to convince researcher to participate actively in the process Time to find customers Time to close deals

3 - Necessary Ingredients (5) Attract Competences Commercialisation implies a team of efficient, fast, flexible and very motivated individuals with inter-cultural skills Need of enough people to cover all commercial aspects Capacities to speak to research teams AND international companies

3 - Necessary Ingredients (6) Proactivity Visit all R&D teams Create trust Maintain continuous links Focus on group of R&D teams willing and able to enter the process Attract the other teams with a case by case approach

3 - Necessary Ingredients (7) Stop « Fairy Tailing » The stock on the shelf is rarely of high value Other research teams do similar things Companies do not always look for state of the art research, they search for technologies immediately usable

4 – The inno Model (1) Establishing a commercialisation company A Private-Public-Partnership organised between all stakeholders A business plan as for a start-up Enough starting capital to start the process Recruiting highly skilled, highly motivated staff

4 – The inno Model (2) Being liable for results Agree on goals with the different stakeholders (R&d teams, R&D institutions, Regional Authorities) Being monitored and measured on a continuous basis Adapt strategy according to needs

4 – The inno Model (3) Searching for a critical mass of research Creating a venture between local R&D organisations to ensure a critical mass of researchers allowing a continuous deal-flow and ensuring the commercialisation team has enough opportunities Estimation 2000: circa 2500 researchers in Latvia

4 – The inno Model (4) « Right of First Refusal » Any research with commercial potential is presented to the team The team is allowed to take or leave If not taking, the R&D team is free to use it as they wish

Innovation Evaluation Innovation value is determined through a dual-screening process Invention 1st “rough” screening 2nd “detailed” screening Patent / Exploitation “Gut feeling” Experience Early indicators Exploitation screening Market research / Market studies Research / Exploring potential industrial partners Feasibility studies Calculations Determination of the price on the market Survey and verification of exploitation possibilities Patentability screening Patent research national / international Determining the novelty value of the invention

Example of a “Votum” Introduction into the area of the invention Task and Advantages / Disadvantages Market Analysis and Exploitation possibilities IPR (Industrial Property Rights / Costs) Licensing possibilities Recommendation

4 – The inno Model (5) Managing the process Proactive visits to teams Continuous presence on the field Searching for clients across the world Asking R&D teams to respond to detected needs Consider non-patentable results

4 – The inno Model (6) Money Sufficient starting capital Continuous search for additional funds (EU, State, VCs, etc.) Establishing a pre-seed fund to prepare good projects for the market Protect properly the IP Continuously look for sustainability

4 – The inno Model (7) Developing Centres of Excellence Based on market needs, favouring the creation of new centres of excellence in horizontal research fields Entering Framework Six Projects (IPs & NoEs)

4 – The inno Model (8) Being international Benchmark research offers towards other European teams Establish links with customers based on needs and not location Create networks across Europe

4 – The inno Model (9) A few examples Mecklenburg-Vorpommern (2500 researchers in 9 organisations) FZK Nuclear Centre Baden-Würtenberg (2.000 researchers) MBDS Sophia Antipolis (1 researcher) Lower Austria (Management of ERDF innovation Funds)

5 – Expected Outputs (1) Generate income for Researchers Research teams Research Institutions The investors (public & private of the PPP)

5 – Expected Outputs (2) Develop entrepreneurial spirit to Help researchers becoming more opened to the usage of their work Favour the creation of a large number of start-ups

5 – Expected Outputs (3) Facilitate the development of the National Innovation System Help Latvian firms able and willing to access innovations Help clarifying the dilemma between basic research versus innovation & technology

5 – Expected Outputs (4) Create a strong image Helps attracting resources Supports the growth of the Region Makes the Region feel more competitive Attracts demands from local business community