1. Innovation Based Start-ups and Growth Challenges and the role of VINNOVA Göran Marklund

2. VINNOVA’s mission To stimulate sustainable economic growth through: – Development of efficient innovation systems and – Financing of mission-oriented research

3. VINNOVA’s Innovation Policy Challenge Knowledge Knowledge Processes Innovation Innovation Processes Efficient Innovation Systems Göran Marklund

4. Improving Swedish economic competitiveness through NTBFs ”The Swedish paradox” – long-term high R&D- investments but moderate economic growth Existing R&D-intensive large multinationals will not be sufficient to solve the Swedish long-term growth problem VINNOVA will increase focus on: – Commercialisation of R&D through product innovations – exploited by start-ups and growth in NTBFs – within areas with great growth potential

5. New competitive R&D-based firms – policy challenges R&D New competitive R&D-based firm Capital Competence Dynamics Incentives Commercialisation process Lack of early stage capital Lack of competence Lack of ”interactive arenas” Weak incentives Capital Competence Dynamics Incentives

6. Problem owner ResearcherInnovator Application Commercial pilot Entrepreneurial team Business embryo ”Real” business Partners Application Goal: Application Business establishing Goal: Business embryo Market establishment Goal: Established business Established Business with Growth potential Commercialisation of R&D in new firms – different stages Time Economic value

7. Application Business establishment Market establishment VINNOVA is working strategically and integrated in all stages Centres-of-excellence for research and innovation Mission-oriented research Co-operation between universities, institutes & NTBFs National incubator program Swedish SBIR-program VINN NU National incubator program Swedish SBIR-program Matching funds Policy Time Economic value

8. Commercial pilot Application Entrepreneurial team Business establishment Goal: Business embryo VINNOVA’s role in the business establishment stage VINNOVA supports establishment of NTBFs with pre-seed funding in the VINN NU program The national incubator program aims at increasing the amount of available capital in the business establishment stage. The incubators also fill an important function by connecting researchers with entrepreneurs The planned SBIR-program fill two important functions as driving force for establishment of new R&D-based firms: Financing Reference customer / commercial pilot

9. VINNOVA’s role in the market establishment stage Market establishment Goal: Established business Business embryo ”Real” businesses Partners VINNOVA engages in increasing the amount of pre-seed and seed- financing through the incubator program. Early stage financing is necessary to give newly started NTBFs the sustainability that is required to establish a ”real” customer-base, to find distribution partners and thereby be able to attract commercial venture capital VINNOVA argues for matching funds that would iimprove the possibilities for NTBFs to attract commercial venture capital in early stages Studies of the SBIR-program in the US has shown that this program has generated a strong impact as ”reference” and thereby helped NTBFs to get early stage business deals and to attract venture capital

10. Thank You!

11. Quest for fundamental understanding? YesNo Yes No Research for fundamental understanding and use Göran Marklund Considerations of use? Pure basic research (Bohr) Use-inspired basic research (Pasteur) Pure applied research (Edison) Basic research on particular phenomena Source: Stokes, D.E., Pasteur’s Quadrant – Basic Research and Technological Innovation

12. Economic incentives Science incentives Market & Innovation High Value Added Low Value Added Long term to market value Short term to market value Development & Invention Radical renewal Incremental renewal Long term to invention Short term to invention Research & Science Yes No Fundamental understanding Application NoYes General analytical framework for R&D & innovation Strong localisation of economic valueWeak localisation of economic value High technology culture building Low technology culture building VINNOVA Kompetenscentrum Göran Marklund

13. Innovation system Definition The network of organisations, people and institutions that determine and shape the production, diffusion and use of technology and other knowledge. Göran Marklund Impact The organisation, processes and efficiency of innovation systems explain the pattern and speed of innovation processes and thereby the dynamic competitiveness of economic systems.

14. Avsaknad av riskvilligt kapital är ett problem i tidiga skeden av kommersialiseringsprocessen Tillämpning Verksamhets- etablering Marknads- etablering Tillväxt  Finansiellt svaga holdingbolag och teknikbroar  Stöd från NUTEK och SIC har i princip upphört  Få och svaga inkubatorer  Avsaknad av affärsänglar  Riskkapital- bolagen rör sig mot senare faser  Avsaknad av affärsänglar

15. Problemägare ForskareInnovatör Tillämpning Mål: Tillämpning VINNOVA’s role in the application stage VINNOVA finansierar behovsmotiverad forskning inom identifierade områden med stor tillväxtpotential VINNOVA arbetar aktivt för att få till stånd möten mellan forskare, innovatörer och problemägare genom satsningar på: Kompetenscentra Utveckling av högskolor och institut till starka nyckelaktörer Funktionella regioner VINNOVA stöder forskning som utförs i samarbete mellan forskare vid högskola/institut och personer verksamma i mindre högteknikföretag I nästan all VINNOVAs verksamhet deltar näringslivet och ofta offentlig verksamhet

16. Incubators and seed-funding Characteristics – Resource & competence centres for R&D-based start-ups and start-up growth – Sharp competition – Long-term centre investments – Profiled & competence in Scientific and Technological fields – Early stage seed financing resorces – for grants and conditional loans – Syndication of public & private capital – lowering private risks – Continuous and impact related evaluations Impacts – International experiences show substantial economic effects – Supports and is based on strong research centres – Regional commitment – priorities in regions – Attract less risk-willing private capital – through ”trust” and reductions of private risk – Should affect RTP – Until now small pilote program - 14 ”national” incubators (”incubator centres”) Göran Marklund