1. KNOWLEDGE ECONOMY FORUM VI Developing Networks and a Market for Knowledge Brokerage Gilbert Nicolaon Cambridge April 19, 2007

2. Knowledge economy and traditional sector industry

3. R&D and the Economy  The “end” users of R&D (Knowledge)  Multinationals  High tech SMEs  Traditional sectors SMEs

4. Public R&D and Industry  Public R&D relation with industry :  Multinationals :  Through Industrial R&D labs  High tech SMEs (often spin-offs) :  Usually tight relations  Traditional sectors SMEs : Very limited cooperation (research scientists and traditional SMEs managers do not know each other)

5. Industry in Europe  Industry in Europe :  Multinational : a few hundred  High Tech SMEs : a few thousand  Traditional SMEs : over 200 000 (+ Recently, Services sector SMEs)  « Traditional » sector SMEs represent  a large potential market for technology

6. Traditional Sectors and Technology  The demand for technology from « Traditional » sector industry is limited  BUT :  Technology is important for SMEs competitiveness  SMEs competitiveness is essential for the economy  Economic growth is essential for every country

7. A Paradox !  Traditional sector industry (mainly SMEs) offers a very large market…  BUT…  …This market is usually not targeted by Scientists !  Because traditional sectors industrialists :  Have limited interest for R&D..  Use outdated equipment…  ….

8.  « …Technology absorption is as important as innovation… »  Shigeo Katsu  V.P. World Bank  April 17, 2007

9. Absorption and Innovation  Traditional sector industry offers a Mkt. for :  Technology Absorption  Which requires technology services  +  Innovation  Technology Push  Market Pull

10. Push or Pull ?  Technology Push  From the Lab to the market  Idea of a scientist  Limiting step : selling the idea to :  An industry  An entrepreneur  TOP DOWN  Market Pull  From market needs to the lab  AND Back to market  Need identified by industry  Limiting step :  Identifying the customer  Identifying the need BOTTOM UP

11. Push or Pull ? Technology Push MarketPull Technology High to Med. Med. To Low Market? Well known Risk High to Med. Med. To Low Rate of Return High to Med. Med. To Low Success rate Low Med. To High

12. A double « challenge »  Traditional sector industries are not very attractive for research scientists  Technology is not the priority for traditional sector industries managers’  BUT…

13. The « Challenge »  Technology is essential for competitiveness  Competitiveness is essential for economic development  CONCLUSION  Technology demand has to be « stimulated »

14. “Stimulated” bottom up  A 3 Partners cooperation :  Governments or/and International Org.  Stimulate the process to boost the economy  Provide training  Provide support and « assistance »  The Public Research laboratories  Provide the appropriate technology services  The Industrial SMEs (+, recently, service SMEs)  Identify the market needs

15. Technological Innovation Technological Innovation  Requires a wide range of expertise  Usually not available « internally »  Networks are widely used to :  Identify appropriate technology providers  Identify appropriate partners : Financial engineeringFinancial engineering Market analysisMarket analysis I.P.R.I.P.R.

16. The components of Innovation Large Group High T. SME Trad. SME Public lab TechnicalYY?Y EconomicalYYYN FinancialY??N LegalYNNN I.P.R.YYN?

17. Technology Networks  Many active networks  National (and Regional) Innovation agencies  Venture Capitalists  Federation of Industries  E.U. Framework Program  International networks

18. National Networks  Ministries of Industrial Development  Many countries have a national agency  U.S.A. : S.B.A.  France : Oséo group  Netherlands : Senter  Finland : Tekes  Croatia : Bicro (created with W.B. support)  ….

19. A National Agency : Oséo - innovation (France)  Assistance for innovation and Technology Dvp.  Financial support  Soft, conditional loans  Small grants to support external consulting Economical (Market studies) Economical (Market studies) Legal (Legal agreements,; I.P.R.) Legal (Legal agreements,; I.P.R.) Partnership (Partner search) Partnership (Partner search)  « Expertise » assistance  Technical  Financial (Business Plan)  Legal

20. A National Agency : Oséo - innovation (France)  A networking activity  Technical  Through the Technology Dept. BUT ALSO …  Economical  With specialized consultants  Financial  With V.C., Banks, Business Angels…

21. International Networks  World Bank  An activity which started in the 80s’  Covering numerous eligible countries  European Union  Framework Program  ERA-NET  Eureka

22. Brokerage events  Invented in the early 90s’  The goal :  For technology providers To meet with  Technology buyers  The « challenges »  A good balance between Buyers and Providers  A « qualitative » mutual interest

23. Brokerage : an example  Euro-Trans Days Oct. 15-16, 2007  A E.U. event on Surface Transportation  GOALS  Stimulate SMEs, R&D, Stakeholders cooperation  Stimulate Tech. Transfer  CONTENT  Plenary sessions  Workshops  One to One confidential meetings

24. A few examples

25. An example of success  An applied R&D project  A French SME (Elmetherm, 40 employees)  A major British china producer (Royal Dolton)  An academic lab. (University of Limoge)  An innovative way of producing china cups  With assistance and support from :  The French Innovation Agency  A French Regional administration  D.T.I.

26. An example of success  World Bank Tech. Dvp program  India(1988-96)  NCL restructuration program  NCL 1988 : A R&D public Institute  Limited contact with Indian industry  Limited financial resources

27. An example of success  NCL restructuration program  An “ambitious” restructuration program  Intensive training focused on Mkt. Oriented R&D  Training about I.P.R. (B.T.G., London, U.K.)  Equipment financing  …  A “side” success  A patented new plastic  A partnership NCL-G.E.  A major R&D investment by G.E. in India

28. An example : The French textile industry  80s, 90s Competition from Morocco, Turkey  Numerous French enterprises have disappeared  Some have survived and are profitable  Which are those which survived ?  Those which improved productivity by introducing technology in their production facilities  Those which improved their product by focusing on « technical textiles » with high Added Value  In this « traditional » sector the enterprises which survived are those which focused on technology

29. Conclusion  Technology commercialization requires a very wide range of expertise: TechnicalTechnical BUT ALSO : Economical, Financial, Legal, Cultural….Economical, Financial, Legal, Cultural…. Bringing these expertise together is a key success factor for technology development (whether it is Tech. Push, Mkt. Pull, or Tech Absorption)

30. Thank you for your attention Gilbert Nicolaon win.tech@club-internet.fr

32. Suggestion Nb. 1  Give more attention to traditional sectors :  High Tech industries need innovation BUT  Traditional sector industries need technology  To update their production facilities  To adapt to environmental regulations  To save energy  To improve their competitiveness  DO NOT « NEGLECT » TRADITIONAL SECTORS INDUSTRIES

33. Suggestion Nb. 2  Do not think only : “Technology push” (Selling what you know how to do)  BUT  Think also “Market Pull” (Offering what your potential customers needs) THINK « MARKET PULL »

34. Suggestion Nb. 3  Do not neglect close by potential customers  Every industry needs technological services (Including traditional sectors industry)  International markets are more risky and costly to tackle (*). They should not be your only target  DO NOT NEGLECT CLOSE BY CUSTOMERS  (*) : Rule of thumb : The cost of a cooperation is proportional to the square of the distance between the partners

35. Suggestion Nb. 4 (For policy makers)  The Process has to be « catalysed »  Strong incentives are needed  Researchers have to be motivated  Industrialists have to be motivated  Financial incentives on top of legal incentives  Financial support for Research/industry partnerships  Individual financial rewards for researchers  « STRONG » INCENTIVES ARE ESSENTIAL

36. Suggestion Nb. 5 (For policy makers)  A legal framework stable over a long period of time is essential  Innovation takes time  Incentives should be stable over long period of time  Legal (Tax) system should be stable  THE RULES SHOULD NOT CHANGE WHILE THE INNOVATIVE PROJECT IS GOING ON

37. Gilbert Nicolaon  1/3 R&D (1963-1975)  University (France and USA)  Industry (Franco-American joint venture)  1/3 Scientific « diplomacy » (1976-1985) (Sci. policy)  U.S.A. (Houston, Chicago, New York)  U.K. French Embassy (London)  1/3 Innovation engineering (1985- ) ANVAR French Innovation agencyANVAR French Innovation agency British Technology Group (London)British Technology Group (London) EUREKA program (European mkt oriented program)EUREKA program (European mkt oriented program)

38. A few exemples  The rusty cans Convince SMEs  The expensive chocolateLegal agreement  The rickshawLocal innovation  The tea cupSme/Univ/Large Co  The microplaneInvest. Abroad  The endless C.D.Large and small  The biodegradable Large and small  The by-productSerendipity (CLEF)  The very High Tech.Spin-off (Soitec)

39. An example : The European textile industry  25 years ago :  Numerous enterprises in Western Europe  Very different in size  Some with international markets  Some with regional markets  A very tough competition from cheaper labour countries (Turkey, Morocco,…)

40. An example : The European textile industry  Tomorrow :  Turkish textile industry is now moving to…  …China! (*)  (*) learned yesterday, from a Turkish participant.