April 2003Takuji Hara, Kobe University 1 Roles of Technology Licensing Organizations (TLOs) in the Commercialization of Life Sciences ～ Japan ’ s Situation and Problems Takuji Hara Graduate School of Business Administration Kobe University

April 2003Takuji Hara, Kobe University 2 Contents The Process of Innovation The Bridging Problem TLO as an Organization for Bridging the Two Cultures The Area of Life Sciences Some Case Studies A Survey Conclusions

April 2003Takuji Hara, Kobe University 3 The Process of Innovation The Linear Model SciencesTechnologiesProducts

April 2003Takuji Hara, Kobe University 4 The Interactive Model SciencesTechnologies OrganizationsInstitutions Products

April 2003Takuji Hara, Kobe University 5 The Interactive Model An Example: Pharmaceuticals CompoundApplication Organizational Authorization Market Hara, T. (2003), Innovation in the pharmaceutical industry, Edward Elgar

April 2003Takuji Hara, Kobe University 6 The Two Cultures The Culture of Academic Research (Universities) Pursuing Knowledge Diverse and Longer-term Perspectives The Culture of Market Economy (Business Enterprises) Pursuing Profits Focused and Shorter-term Perspective

April 2003Takuji Hara, Kobe University 7 The Two Culture and Innovation To achieve innovation requires both of the two cultures and their interaction. Bridging the gap between the two cultures is the key to innovation.

April 2003Takuji Hara, Kobe University 8 The Bridging Problem Research World Understanding Nature Reputation in the Academic Society Business World Making Profits The Growth of the Company The Need of Research Funds The Need of New Products The Desire for Contribution to Society Bridging → Innovation

April 2003Takuji Hara, Kobe University 9 The Gatekeeper Receiving Information and Translating

April 2003Takuji Hara, Kobe University 10 The Boundary Spanner Receiving and Sending Information Translating and Arranging Research WorldBusiness World Boundary Spanner

April 2003Takuji Hara, Kobe University 11 The System Builder Linking Elements Social Actors Technological Components

April 2003Takuji Hara, Kobe University 12 TLO as an Organization for Bridging the Two Cultures Receiving and Sending Information about Technology and Market Valuing and Enclosing Technology (Translating) Marketing Technology (Translating and Arranging) Choosing Licensees (Linking Elements) Licensing (Arranging and Linking) Management of Intellectual Properties and Licensing Contracts (Arranging) Consulting (Translating and Arranging)

April 2003Takuji Hara, Kobe University 13 TLOs in Japan Institutionalized in 1998 by so-called Japan ’ s TLO act. 32 Official TLOs in Japan (March 2003) Different Forms ・ Stock Corporations ・ Intra-university Organizations ・ Foundations

April 2003Takuji Hara, Kobe University 14 Examples of TLOs in Japan Corporations: Hokkaido TLO (Hokkaido U. etc.) Tohoku Technoarch (Tohoku U. etc.) Institution of Tsukuba Liaison (Tsukuba U. etc.) CASTI (Tokyo U.) Kansai TLO (Kyoto U. etc.) Foundations: Osaka TLO (Osaka Prefecture, Osaka City, Osaka U. etc.) Hyogo TLO (Hyogo Prefecture, Kobe City, Kobe U. etc) Intra-University Organizations: Keio University Intellectual Property Center Waseda University Intellectual Property Center

April 2003Takuji Hara, Kobe University 15 Innovation in the Area of Life Sciences Very Long Lead-time Huge Costs High Risk, High Return Decisive Patents Exclusive Contracts Are Often Required. ↓ Significance of Each Licensing Contract → Finding Excellent Partners Is Crucial.

April 2003Takuji Hara, Kobe University 16 Case Studies OTM, UC San Francisco OTTL, Harvard Medical School IC Innovations, Imperial College, London CASTI, Tokyo University

April 2003Takuji Hara, Kobe University 17 OTM ， UC San Francisco (Aug 2001) One of UC ’ s TLOs (Largest Income Source) 4 PhD Licensing Associates in Life Sciences ２ Associates Have Experience in Technology Transfer in Life Sciences 170 Contracts a Year, $(2)77m Income Personal Network Is Important Focus at First, Then Go Open Bio-network in the Bay Area

April 2003Takuji Hara, Kobe University 18 OTL, Harvard Medical School (Feb 2002) Intra-University Organization 4 PhD Associates in Life Sciences All Have Experience in Technology Transfer or Business. Income $25m Personal Network Is Important Bio-network in Boston

April 2003Takuji Hara, Kobe University 19 IC Innovations ， Imperial College, London (Jul 2001) Stock Corporation Owned by Imperial College 5 Associates (2 PhDs in Life Sciences) 3 of Them Have Experience in Business 77 Inventions in Life Sciences 32 Patents in Life Sciences Human Network Is Important Bio-network in London

April 2003Takuji Hara, Kobe University 20 CASTI ， Tokyo University (Aug 2001) Stock Corp. Owned by a Group of Academic Staff at Tokyo University 4 Associates (None Works Biotechnology Only) 2 Have Experience in Business but NOT in Life Sciences 10 Contracts (10 More Close to Agreement) Co-marketing with Recruit Co. Ltd., a Human Resource Management Consultant

April 2003Takuji Hara, Kobe University 21 A International Comparative Survey on the Situation of TLOs in the Life Science Area (conducted in October March 2002) Licensing Associates in Life Sciences Social Networks Activities Performance

April 2003Takuji Hara, Kobe University 22 Licensing Associates in Life Sciences

April 2003Takuji Hara, Kobe University 23 Social Networks

April 2003Takuji Hara, Kobe University 24 Activities

April 2003Takuji Hara, Kobe University 25 Performance Note) 1 dollar (Canada) = 0.6 dollar (US), 1 Yen = dollar (US)

April 2003Takuji Hara, Kobe University 26 Conclusions TLOs are playing a role of bridging academic and business cultures. In the area of life science, each licensing contract is important. Ability in both life science and business is a key to successful technology transfer. Human network is another key to success. Life science expertise in TLOs is insufficient in Japan. Network in the life science area is underdeveloped in Japan. The linking function of TLOs is weak in Japan.

April 2003Takuji Hara, Kobe University 27 Key Tasks for TLOs in Japan Reinforcement of Expertise in the Life Science Area with Business Experience Development of Social Network in the Life Science Area Activation of the Linking and Arranging Functions of TLOs

April 2003Takuji Hara, Kobe University 28 Recently … The number of experts in life sciences in TLOs is increasing. Social networks and industrial clusters in life sciences are emerging. e.g. The Kobe Medical Industry Development Project “ Saito ” life science park, Osaka More and more university-industry technology transfers in the life science area are achieved.

April 2003Takuji Hara, Kobe University 29 Selected References Allen, T. (1977), Managing the Flow of Technology, Cambridge, MA: MIT Press. Friedman, R. A. and J. Podolny (1992), Differentiation of Boundary Spanning Roles, Administrative Science Quarterly, 37, Hara, T. (2003), Innovation in the Pharmaceutical Industry, Cheltenham: Edward Elgar Harmon, B. et al. (1997), Mapping the University Technology Transfer Process, Journal of Business Venturing, 12, Hughes, T. P. (1987), The Evolution of Large Technological Systems, in The Social Construction of Technological System (W. E. Bijker et al. eds), Cambridge, MA: MIT Press, pp Jamison, D. B. (1984), The Importance of Boundary Spanning Roles in Strategic Decision-Making [1], Journal of Management Studies, 21(2), Powell, W. W., K. W. Koput and L. Smith-Doerr (1996), Inter-organizational Collaboration and the Locus of Innovation, Administrative Science Quarterly, 41, Wiesendanger, H. (2000), A History of OTL,