1. GROWTH ECONOMICS and Fund-raising in international cooperation SECS-P01, CFU 9 Economics for Development academic year
9. INNOVATION TRANSFER
Roberto Pasca di Magliano
Fondazione Roma Sapienza-Cooperazione Internazionale

2. Innovation= value creation

3. Value Creation
Innovation converts research into economic value and creation of specialized jobs
“Capitalism is based on a process of continuous revolution based on technological innovation through phases in which new structures emerge and old ones are destroyed. This process of 'creative destruction' is the fundamental fact of capitalism”
( Joseph Schumpeter)

4. Meening of Innovation
Innovation is the action of making new products or new methodologies/process that did not exist before
In order to innovate one has to focus applied research on technology transfer towards the business sector as follows:
Identification of new technologies and their industrial application
Protection of the investment into new technologies via patent, copyrights, license, design rights
Definition and development of appropriate marketing strategies
Technology transfer via licensing and commercial agreement towards existing companies or new startups
Innovation:
Makes a discontinuity in traditional knowledge, and know-how. This discontinuity increases overall productivity and labour productivity. i.e. with the same amount of resources it is possible to produce more goods (development) or to use less resources needed to produce the some amount of goods than before (sustainability)
Development and sustainability are linked to technology diffusion and production process, quality of life (rise of income) and to the environment (improved use of available resource)

5. New entrepreneural capitalism of Research & Innovation
It is a tech-based capitalism focused on research as the main driver for competition and enterprice’s development
It is a capitalism based on innovative entrepreneurs with an advanced university curriculum
It is a capitalism improving technology and innovation diffusion through spill-overs and knowledge sharing) and the creation of new start ups with a direct benefit fo the overall economy
It is a capitalism that is able to attract foreign investment either in the equity acquisition of existing companies or in the green field investments

6. Life cycle of innovative firms and finacing resouces
Idea
Spin-off
market
Continuous innovation of the product
Final organization structure
marketing e6 sales investments
Partnership and acquisitions
Company set up
Innovative prototype
Commercial feed backs
Tuning of innovative product
Commercial structure
Strategic Partnership
Product definition
Business plan
Market analysis
Analysis and idea evaluation
Activity
- Incubatorors
- Business Angels
- Public Admin. support
Venture Capital
Private Equity
Support
- Private Equity
- IPO
Family financing Pre- seed financing
Family financingSeed
Second Round
Venture capital
Expansion Capital
Pre-seed financing typicallSeed financing Start up financing in the testing phase of the innovative idea. The idea is often channeled into paths of of which must be checked for validity commercial

7. Start up and spin-off are unattractive to the conventional credit
RIS K
«Lab-pure» Research
Base Research
Market Test
Applied Research
Patents and Licences
Prototype
100% financing from Public Institutions
( Incentives, contributions, scholarships,…)
Partnership private-public sector (Equity Capital, Loans, guarantees)
Venture Capital
hi tech investments
(Private sector)
Produce and Put the innovative product on the market
DON’T have a solid bankable
DON’T generate a positive cash flow
DON’T have a business model to understand
DON’T have access to forms of finance based on collateral
DON’T generate interest for the banks because of the limited investment
Risk
High
Medium
Low

8. Financing technogical innovation
Venture Capital
Financing of business ventures in high-technology sectors in the initial phase of their business
Investment in risk capital for firms having an high growth potential, on the part of specialist Venture Capitalist
Mechanisms to define return to the investors of the capital collected by start-up
Limits -> considerable managerial skills of the start-up’s team
Business Angels
Non-institutional investors (managers) which manifest themselves through management support and forms of direct financing to companies still in their infancy and therefore requiring initial financial resources
Reflecting their a strong risk attitude, they subscribe to a part of the capital investment in spin off with high growth potential and they provide important management consulting and financial

9. R&D investments: EU comparison
Svezia ,74%
Finlandia 3,45%
Germania 2,54%
Danimarca 2,48%
Austria 2,46%
Francia 2,10%
Belgio 1,88%
Regno Unito 1,76%
Olanda 1,71%
Lussemburgo ,66%
Slovenia 1,56%
Rep. Ceca 1,55%
Irlanda 1,30%
Spagna 1,20%
Italia ,16%
Average UE
1,85%
Fonte: Eurostat, Key dati 2006

10. R&D investments in Italy= %
GDP
Fonte: Commissione europea, Key Figures 2006, Media EU-27

11. Innovation Performance comparison

12. Investors in R&D in Italy
subjects
Investment in R&D %
University
4.792
33%
Public and/or governamental bodies
2.565
18%
Private firms and private research center
7.057
48%
Non Profit Organization
186 1%
TOTAL
14.600
100%
(million euro 2010)
In Italy private companies have a very low involvement in the R&D process and investments
Fonte: Elaborazioni IPI su dati ISTAT “Indagine sui centri per l’innovazione e il trasferimento tecnologico in Italia”

13. R&D distribution within firms
more than 80% of private investment in R&D is concentrated in only 3% of the firms
3% firms
> 80% R&S
97% firms
< 20% R&S
Fonte: Elaborazioni IPI su dati ISTAT “Indagine sui centri per l’innovazione e il trasferimento tecnologico in Italia”

14. Measures to improve relationships among research centers and firms in Italy
In Italy there are many actors trying to fill the gaps within the innovation value chain. These actors have to create links between the different subjects involved
This implies
different and more effective organizations to bring innovation from public research centers to private companies, in particular small and medium-through services for spin-offs and start-ups in the areas as follows:
promoting innovation (joint lab)
service quality management
business plan and market analysis
business management systems
support the participation of venture capital
support to finance investment projects
Fonte: Elaborazioni IPI “Indagine sui centri per l’innovazione e il trasferimento tecnologico in Italia”

15. Conclusions
Spin-offs and high-tech start-ups are the best way to create value from applied reasearch and innovation diffusion.
In order to promote such a process, the following interventions are needed:
Support activities (e.g.: how to incorporate a company, how to manage it, market analysis, business plan, procedure for quality control and patenting)
Laboratories and offices (Innovation parks)
Coordination with selected partners in Italy and abroad
Equity financing from SEED and Venture Capital
Preferential credit lines for research and innovation activities