8 December Institutional Structures and Arrangements at Public Sector Laboratories Lyndal Thorburn Advance Consulting & Evaluation Pty Ltd OECD Workshop on High Technology Spinoffs, Working Group on Innovation and Technology Policy, 8 December 1999

2 Public Sector Laboratories w Total 194 direct spinoffs from Australian research institutions. Of these 92 from universities 8 from hospitals 14 from co-operative research centres w Remaining 82 from public sector labs 56 from CSIRO 11 from Medical Research Institutes 3 from DSTO, 5 others

8 December CSIRO Structure & Aims w Science & Industry Research Act 1949 w Conducts scientific research to assist Australian industry w Can own & control IP But not permitted to own a controlling interest in a co. without Ministerial approval w Also subject to FOI, Privacy, ADJR

8 December CSIRO Research  Collaborative R&D;  Contract research;  Consulting;  Licensing of formal intellectual property;  Technical services;  Research by 6,700 staff (96/97) covers agribusiness, manufacturing, mining, environment, services

8 December Official Performance Indicators w Sector profile w External earnings w Publications, reports, patents w Customer satisfaction w Adoption and impact of research and advice NOT spinoffs, but it recognises 3 types of startups: technology transfer companies (30), direct spinoffs (55), indirect spinoffs (20)

8 December CSIRO Commercial Outputs w AUTM survey (1997) US universities, per 1000 “faculty”*, receive 37 disclosures, apply for 9 patents, negotiate 11 licence agreements, receive US$320,00 royalties w No Australian equivalent,but using AUTM standard in 1996/97 CSIRO should have applied for 60 patents (52) received US$2.1m royalties (US$4m) and produced 5 startups (2.5). * Trune (1996)

8 December CSIRO Startups w Range of forces: institutional technological profit market w Finance rare w Equity rare

8 December Stand-alone CSIRO New Spinoff licence royalties staff Individual shareholders Staff resign, redundancy, use $ for co. finance

8 December Joint Venture CSIRO New Spinoff licence royalties staff One or more firms/agencies licence staff royalties equity CSIRO staff usually on leave without pay, funding from jv partners, CSIRO may have equity position

8 December Subsidiary of single existing firm CSIRO New Spinoff licence royalties staff Existing firm staff/equity CSIRO staff resign or LWOP, funding from parent

8 December Public listing CSIRO New Spinoff licence royalties staff Public shareholdings equity

8 December Medical Research Institutes (MRIs) w Statute e.g. Garvan Institute of Medical Research, Howard Florey Institute of Experimental Physiology w Company e.g.Austin Research Institute w Approx 20 of these, AU$120m, 2000 staff w Main aim is understanding & treatment of disease

8 December MRI Commercial Outputs w No standardised performance indicators but annual reports concentrate on research activities, publications, conferences etc w Using same AUTM survey, expect 18 patent applications, $US0.64m royalties, 22 licence agreements, 1.2 startups in 96/97 no data available except known 0 startups that year

8 December Wholly owned subsidiary MRI New Spinoff licence equity royalties Staff?

8 December Joint Venture MRI New Spinoff licence royalties Multiple research institutions or single firms licence staff royalties equity Spinoff staff are usually provided by the partner firm or are recruited directly; researchers stay within MRI n = 1 (+2)

8 December Subsidiary of multiple owners MRI New Spinoff licence royalties staff VC and other private investors equity Spinoff driven by finance opportunity, MRI staff p/t in firm

8 December Summary of Models

8 December Issues w Spinoff rates influenced by Basic vs applied focus Commercial imperatives Commercial focus Finance w Spinoff structures influenced by Legal status Perceptions of risk