Heterogeneity among research spin-offs: the case of “intellectual property-based firms” Margarida Fontes - INETI & DINAMIA Oscarina Conceição - DINAMIA Towards the European Resarch Area: Knowledge Creation and Circulation in Portugal, 1st NONIUS Seminar- Lisboa, 16 November 2007

1st NONIUS Seminar - Lisboa 16 November RBSOs and their role: heterogeneity Focus of S&T and innovation policies Instrument for the commercial exploitation of knowledge produced in PSROs RBSOs are heterogeneous companies Not necessarily reflected in support policies … Policy makers perception ? Variety - implications for the way RBSOs perform role in the transformation of scientific and technological knowledge in economic value Should be taken into account in policy formulation

1st NONIUS Seminar - Lisboa 16 November How to address heterogeneity ? Exploratory – put forward some hypothesis that will need to be developed & empirically tested Focus: one potential source of heterogeneity - the commercialisation strategy adopted by RBSO Basic decision RBSOs have to make when commercialising the knowledge developed in a PRO: Develop products or services based on the knowledge/ technology and sell them in the market – alone or through alliances – the “traditional route” Opt instead for selling or licensing the actual technology

1st NONIUS Seminar - Lisboa 16 November A basic strategic choice Routes chosen  different modes of behaviour Why is this choice relevant for our purposes ? Influence the way the RBSOs conduct their knowledge transformation function Produce heterogeneity in innovative behaviour and thus in RBSOs impact on the innovation system Imprinting effect of early choices influence the shaping of new firm: resource mobilisation and search for relationships may constrain / reduce margin for subsquent choices  Understand which factors influence this decision

1st NONIUS Seminar - Lisboa 16 November Factors influencing decision Hypothesis (theory-driven) on factors that can influence decision: (combining insights from economics of technological change and strategic management of technology) Nature of knowledge Appropriability conditions (capacity to protect technology) Access to / control upon complementary assets  Relevance of resource endowment – but resources both shape and are shaped by strategic choice (disentangle ? ) Two stage approach: investigate impact of those factors on strategic choice; investigate whether firms adopting different strategies have substantially different resource mixes.

1st NONIUS Seminar - Lisboa 16 November The IP based company model Look in particular detail to one model: the case of firms specialising in production & sale of intellectual property IP-based model as a business (not as complementary or transitory activity) as an exception until recently Becoming more frequent as markets for technology develop, but still a less well understood organisational form.  Argument: RBSOs may be particularly prone to adopt this model (specifities) Sources of heterogeneity: specific model with specific functions in the innovation system: way firms organise innovative activities & interact with the system

1st NONIUS Seminar - Lisboa 16 November Framework of analysis Questions: Which are the conditions that favour the emergence of the IP-based company Which are the requirements for companies to operate within this model  Which types of organisational configurations emerge as viable models of behaviour in this context (and are they sustainable in the long term ?) RBSOs and the IP-model are there specific features of RBSOs that make adoption of this model more likely ?

1st NONIUS Seminar - Lisboa 16 November  Organisation of knowledge production division of inventive labour development of markets for technology Intellectual property system (strengthening) Organisation academic system (exploitation of research) Financial system (VC / valuation of intangibles such as IP)  Viabilise firms that: exploit academic knowledge, perform basic research, have long development times, have IP as sole asset, trade it on technology markets to other firms that turn it into products and bring them to the market. Incidence: some (mostly science based) sectors Conditions: Institutional changes

1st NONIUS Seminar - Lisboa 16 November Requirements Basic requirements: High appropriability Nature of knowledge novelty/ radicalness (patenting / value to customers) pervasiveness - guarantee continuity of IP production (generate new generations of technology)  Also enable product orientation - what drives choice? Other factors ? Access to key complementary assets / extent to which these are controlled by existing firms Resource (non) endowment Conditions of external environment (functioning technology markets; availability key resources; influence of shareholders)

1st NONIUS Seminar - Lisboa 16 November Specificities of RBSOs & requirements Opportunities deriving from science: Nature of knowledge: novel + generic (broadness) Appropriability: codification + “natural excludability” Influence of parent PRO & other policy actors: Growing pressure to patent Nurture promising technologies: resources / access to VC Origin entrepreneurs / non-commercial environment: Competence bias: focus on developing S&T activities (more closely related to their cognitive processes) rather than production / commercial ones (different skills) Scientific reputation as an asset

1st NONIUS Seminar - Lisboa 16 November Empirical testing Research being conducted on RBSOs in Europe (74 firms, about 13 exclusively in technology markets, 9 in both): test hypothesis concerning factors that influence decision Research targetting specifically IP-based firms (starting): test theoretically defined requirements & achieve detailed understanding of model(s) of behaviour Comparison between different institutional environments: understand influence upon emergence/viability of model  Policy level: awareness of variety among RBSOs, its sources and implications for policy Case of IP-based firms: relevance; conditions for viability; role of policies in different environments