UNIVERSITE - INDUSTRIE: UNIVERSITE - INDUSTRIE: POTENTIELS ET LIMITES DE POTENTIELS ET LIMITES DE

DIVERS MODES D’INNOVATIONDIVERS MODES D’INNOVATION

Jean-Jacques Degroof

MIT Industrial Performance Centre

jdegroof@mit.edu

http://web.mit.edu/ipc/people/affiliates.html

Conférence Innovac

18-19 Novembre 2010

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INTRODUCTIONINTRODUCTION

1990s: growing concern about techno-logical 1990s: growing concern about techno-logical gap between the USA and Europegap between the USA and Europe

Renewed interest in technology innovation Renewed interest in technology innovation

Recognition of entrepreneurship as a valid Recognition of entrepreneurship as a valid mode of technology innovationmode of technology innovation

Interest of policy makers in involving academic Interest of policy makers in involving academic institutions in technology transferinstitutions in technology transfer

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INTRODUCTIONINTRODUCTION

Multiple policy initiatives to support technology Multiple policy initiatives to support technology transfer from universities.transfer from universities.

Support for spinning off new ventures from Support for spinning off new ventures from universities.universities.

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INTRODUCTIONINTRODUCTION

However,However,

– Spin-off firms tend to come from a small number of top Spin-off firms tend to come from a small number of top research institutions.research institutions.

– The firms’ size, growth rates, revenues are modest.The firms’ size, growth rates, revenues are modest.

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Callan, B. (2001). "Generating spin-offs: evidence from the OECD." Science Technology Industry Review. Special issue on fostering high tech spin-offs: a public strategy for innovation 26: 13-56.

•

Degroof, J.-J. and E. B. Roberts (2004). "Overcoming Weak Entrepreneurial Infrastructures for

Academic Spin-Off Ventures." The Journal of Technology Transfer 29(3-4): 327-352.

Heirman, A. and B. Clarysse (2004). "How and Why do Research-Based Start-Ups Differ at Founding? A Resource-Based Configurational Perspective." Journal of Technology Transfer 29(3-4): 247.

Clarysse, B., M. Wright, et al. (2005). "Spinning out new ventures: a typology of incubation strategies from European research institutions." Journal of Business Venturing 20(2): 183-216.

Mustar, P., M. Renault, et al. (2006). "Conceptualizing the heterogeneity of research-based spin-Offs: a multi-dimensional taxonomy." Research Policy 35(2): 289-308

Wright, M., B. Clarysse, et al. (2007). Academic Entrepreneurship in Europe. Cheltenham, UK, Edward Elgar

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1.1. CHALLENGES TO THE SPIN-OFF CHALLENGES TO THE SPIN-OFF MODEL MODEL

2.2. OTHER MODES OF TECHNOLOGY OTHER MODES OF TECHNOLOGY TRANSFERTRANSFER

3.3. TECHNOLOGY TRANSFER AND TECHNOLOGY TRANSFER AND TYPES OF LOCAL ECONOMIC TYPES OF LOCAL ECONOMIC DEVELOPMENTDEVELOPMENT

Three partsThree parts

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1.1. CHALLENGES TO THE SPIN-OFF CHALLENGES TO THE SPIN-OFF MODEL MODEL

1.1.1.1. Generic ChallengesGeneric Challenges (*) (*)

1.2 Challenges specific to weak 1.2 Challenges specific to weak entrepreneurial entrepreneurial

environmentsenvironments

(*) Adapted from Shane, S. (2004). Academic entrepreneurship. University spin-offs and wealth creation. Cheltenham, UK, Edward Elgar

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Industries: Industries: spin-offs are not adapted to all industriesspin-offs are not adapted to all industries

– + Industries in which patents are more effective.+ Industries in which patents are more effective.

– + Younger technology base.+ Younger technology base.

– + Segmented Markets.+ Segmented Markets.

– - Require large complimentary assets.- Require large complimentary assets.

– - Large average firm size- Large average firm size

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IndustriesIndustries

– Most common in biomedical industries.Most common in biomedical industries.

• Protected by strong patents.Protected by strong patents.

• Commercialization allows more time than in the physical sciences.Commercialization allows more time than in the physical sciences.

• Universities are the locus of expertise in the life sciences.Universities are the locus of expertise in the life sciences.

• Performance of the products is more valued by clients than cost.Performance of the products is more valued by clients than cost.

• Low need of complementary technologies.Low need of complementary technologies.

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Technology: Technology: spin-offs are not adapted to all types of spin-offs are not adapted to all types of technologiestechnologies

– Radical inventions vs. incremental innovations.Radical inventions vs. incremental innovations.

– Early stage inventions.Early stage inventions.

– Technologies with broad applications.Technologies with broad applications.

– Cutting edge technology providing significant economic value.Cutting edge technology providing significant economic value.

– Strong intellectual property protection.Strong intellectual property protection.

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Commercialization: Commercialization: problematicproblematic

– Early stage ‘embryonic’ technologies: difficult to license.Early stage ‘embryonic’ technologies: difficult to license.

– ““Technology push” nature of product creation (>< “market pull”). Technology push” nature of product creation (>< “market pull”).

– Market uncertainty is very high: is there demand for the product (at what price)?Market uncertainty is very high: is there demand for the product (at what price)?

– Longer than average product development cycleLonger than average product development cycle

– Scaling.Scaling.

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1.1. CHALLENGES TO THE SPIN-OFF CHALLENGES TO THE SPIN-OFF MODEL MODEL

1.1.1.1. Generic ChallengesGeneric Challenges

1.2 Challenges specific to weak 1.2 Challenges specific to weak entrepreneurial entrepreneurial

environmentsenvironments

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1.1. CHALLENGES TO THE SPIN-OFF CHALLENGES TO THE SPIN-OFF MODEL MODEL

1.1.1.1. Generic ChallengesGeneric Challenges

1.2 Challenges specific to weak 1.2 Challenges specific to weak entrepreneurial entrepreneurial

environmentsenvironments1.2.1 Tech transfer policy level 1.2.2 Firm level

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OriginationOrigination Concept TestingConcept Testing Product Product DevelopmentDevelopment

Opportunity Opportunity identificationidentification

Opportunity selectionOpportunity selection

IP protection testingIP protection testing

Business concept Business concept testingtesting

SelectionSelection

Internal advising Internal advising capabilitiescapabilities

Network supportNetwork support

Degroof, J.-J. and E. B. Roberts (2004). "Overcoming Weak Entrepreneurial Infrastructures for Academic Spin-Off Ventures." The Journal of Technology Transfer 29(3-4): 327-352.

See: http://web.mit.edu/deshpandecenter/

Firm creation

1.2.1 Tech transfer policy level

Generic process of spin-off creation

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Need to put in place a complex value chain Need to put in place a complex value chain requiring significant resourcesrequiring significant resources

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OriginationOrigination Concept testingConcept testing Product Product DevelopmentDevelopment

Opportunity Opportunity identificationidentification

Opportunity selectionOpportunity selection

Technical concept Technical concept testingtesting

Business concept Business concept testingtesting

SelectionSelection

Internal advising Internal advising capabilitiescapabilities

Network supportNetwork support

TechnicalTechnical Research capabilities; Research capabilities; management of research; management of research; IP CapabilitiesIP Capabilities

R&D capabilities; IP R&D capabilities; IP capabilities Business due capabilities Business due diligence and planning diligence and planning skillsskills

R&D capabilities; business R&D capabilities; business development and development and management skillsmanagement skills

FinancialFinancial R&D financing; investment R&D financing; investment in TTin TT

Innovation grants; seed Innovation grants; seed financing; investment in TTfinancing; investment in TT

Early stage VC; growth-Early stage VC; growth-stage VCstage VC

HumanHuman Scientists; TT specialistsScientists; TT specialists TT specialists; business TT specialists; business coachescoaches

Scientists; management; Scientists; management; board members; advisorsboard members; advisors

SocialSocial Scientific networkScientific network Scientific network; network Scientific network; network in industry and in the in industry and in the entrepreneurial communityentrepreneurial community

Scientific network; local Scientific network; local and international network and international network in industry and in the in industry and in the entrepreneurial community.entrepreneurial community.

ResourcesResources

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– Issue of scaleIssue of scale

– Lesson: Individual institution or several institutions Lesson: Individual institution or several institutions should join forces?should join forces?

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1.1. CHALLENGES TO THE SPIN-OFF CHALLENGES TO THE SPIN-OFF MODEL MODEL

1.1.1.1. Generic ChallengesGeneric Challenges

1.2 Challenges specific to weak 1.2 Challenges specific to weak entrepreneurial entrepreneurial

environmentsenvironments1.2.1 Tech transfer policy level 1.2.2 Firm level

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1.2.2 Firm level

SMESMEGrowth-Growth-

OrientedOriented

VentureVenture

ConceptConcept Substitute for a job Substitute for a job and/or to pursue other and/or to pursue other lifestyle choiceslifestyle choices

Pursue opportunity with Pursue opportunity with high potential to high potential to maximize economic maximize economic value for the value for the entrepreneur and entrepreneur and his/her supportershis/her supporters

OwnershipOwnership ClosedClosed Open (outside funding)Open (outside funding)

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1.2.2 Firm level

SMESMEGrowth-Growth-

OrientedOriented

VentureVenture

ManagementManagement Weak – overlaps with Weak – overlaps with ownershipownership

Growing professio-Growing professio-nalization -Distinct from nalization -Distinct from ownershipownership

UltimatelyUltimately ContinuityContinuity Exit – “liquidity event”Exit – “liquidity event”

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Too much focus on spin-off creation and not enough on growth?Too much focus on spin-off creation and not enough on growth?

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Too much focus on licensing university patents as a mechanism ofToo much focus on licensing university patents as a mechanism oftechnology transfer?technology transfer?

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1. CHALLENGES TO THE SPIN-OFF 1. CHALLENGES TO THE SPIN-OFF MODELMODEL

2. OTHER MODES OF TECHNOLOGY 2. OTHER MODES OF TECHNOLOGY TRANSFERTRANSFER

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MIT faculty perception of relative importance of alternative channels of knowledge transfer from university to industry (N = 68)

18%

5%

26%

6%12%

7%

17%

9%

Publications

Conferences

Consulting

Conversations

CollaborativeResearch

Patents & Licensing

Recruiting Graduates

Supervising

Patent & Licensing

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Types of University-Industry Interaction Contributing to Innovation (% Types of University-Industry Interaction Contributing to Innovation (% Companies)Companies)

0 10 20 30 40 50 60

Non-exclusive licensing of University held patents

Innovation-related expenditure spent on universities

Exclusive licensing of University held patents

Internships

Joint research and development projects

Problem-solving / consulting by university staff

Recruitment at post doctoral level

Testing and standards

Conferences

Publications

Recruitment at first degree, or masters level

Informal contacts

US

UK

Cosh, A.D., Hughes, A. and Lester, R.K. (2006) UK Plc:Just How Innovative Are We? Cambridge-MIT Institute, University of Cambridge and MIT.

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Use of Sources of Knowledge for Innovation: All CompaniesUse of Sources of Knowledge for Innovation: All Companies

Cosh, A.D., Hughes, A. and Lester, R.K. (2006) UK Plc:Just How Innovative Are We? Cambridge-MIT Institute, University of Cambridge and MIT.

0 20 40 60 80 100 120

Private research institutes

Government research organisations

Commercial labs or R&D enterprises

Universities/higher education institutes

Other public sector, eg Business links

Consultants

Trade associations

Professional conferences, meetings

Environmental standards and regulations

Technical standards or setting bodies

Technical press, computer databases

Fairs, exhibitions

Health and safety stds and regulations

Competitors in your line of business

Knowledge within the group

Suppliers of equipment, materials etc

Clients or customers

Internal knowledge within the company

US UK

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1. CHALLENGES TO THE SPIN-OFF 1. CHALLENGES TO THE SPIN-OFF MODELMODEL

2. OTHER MODES OF TECHNOLOGY 2. OTHER MODES OF TECHNOLOGY TRANSFERTRANSFER

3. TECHNOLOGY TRANSFER AND 3. TECHNOLOGY TRANSFER AND TYPES OF LOCAL ECONOMIC TYPES OF LOCAL ECONOMIC DEVELOPMENTDEVELOPMENT

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3. TECHNOLOGY TRANSFER AND 3. TECHNOLOGY TRANSFER AND TYPES OF LOCAL ECONOMIC TYPES OF LOCAL ECONOMIC DEVELOPMENTDEVELOPMENT

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Four Types of local economic Four Types of local economic developmentdevelopment

Indigenous creation of new industryIndigenous creation of new industry– Silicon Valley: personal computer, semiconductorSilicon Valley: personal computer, semiconductor– Boston: biotechBoston: biotech

Transplantation of new industry into regionTransplantation of new industry into region– I-85 corridor (NC/SC): automotive industryI-85 corridor (NC/SC): automotive industry

Diversification of existing industry into new industryDiversification of existing industry into new industry– AkronAkron, OH: tires -> advanced polymers., OH: tires -> advanced polymers.– Rochester, NY: cameras, copiers -> opto-electronicsRochester, NY: cameras, copiers -> opto-electronics

Upgrading of existing industryUpgrading of existing industry– Tampere, Finland: industrial machineryTampere, Finland: industrial machinery– Turku, Finland: biotechnologyTurku, Finland: biotechnology

Lester, R. (2005). Universities, innovation, and the competitiveness of local economies. Summary report from the local innovation project — phase I. Industrial Performance Center Working Paper Series. Cambridge, MA, MIT Industrial Performance Center.

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University roles depending on the local University roles depending on the local economic development patterneconomic development pattern Creation of new industries (type I)Creation of new industries (type I)

– Forefront science and engineering research.Forefront science and engineering research.– Aggressive technology licensing policies.Aggressive technology licensing policies.– Promote / assist entrepreneurial businesses (incubation services, etc.).Promote / assist entrepreneurial businesses (incubation services, etc.).– Cultivate ties between academic researchers and local entrepreneurs.Cultivate ties between academic researchers and local entrepreneurs.– Create an industry identity.Create an industry identity.

• Participate in standard settingParticipate in standard setting• EvangelistsEvangelists• Convene conferences, workshops, entrepreneurs’ forums, etc.Convene conferences, workshops, entrepreneurs’ forums, etc.

Importation / transplantation of industries (Type II)Importation / transplantation of industries (Type II)– Education / manpower development.Education / manpower development.– Responsive curricula.Responsive curricula.– Technical assistance for sub-contractors, suppliers.Technical assistance for sub-contractors, suppliers.

Diversification of existing industries into technologically-related new ones (Type III)Diversification of existing industries into technologically-related new ones (Type III)– Bridging between disconnected actors.Bridging between disconnected actors.– Filing “structural holes”Filing “structural holes”– Creating an industry identityCreating an industry identity

Upgrading existing industries (Type IV)Upgrading existing industries (Type IV)

– Problem solving for industry through contract research, faculty consulting, etc.Problem solving for industry through contract research, faculty consulting, etc.– Education /manpower development.Education /manpower development.– Global best practice scanningGlobal best practice scanning– Convening foresight exercisesConvening foresight exercises– Convening user - supplier forumsConvening user - supplier forums

Lester, R. (2005). Universities, innovation, and the competitiveness of local economies. Summary report from the local innovation project — phase I. Industrial Performance Center Working Paper Series. Cambridge, MA, MIT Industrial Performance Center.

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Type IType I Type IVType IV

Creating new industriesCreating new industries Upgrading existing industriesUpgrading existing industries

FinancingFinancing Angel / venture capital (private & Angel / venture capital (private & public)public)

Internal financing, supplier Internal financing, supplier financing, governmentfinancing, government

Innovation Innovation

cultureculture

Science-driven: entrepreneurialScience-driven: entrepreneurial Customer driven, TQM, Customer driven, TQM, continuous improvement, “best continuous improvement, “best practice”practice”

Local anchorsLocal anchors Research UniversitiesResearch Universities

Government labsGovernment labs

Lead firms - lead customers - Lead firms - lead customers - usersusers

Education Education

AndAnd

trainingtraining

Ph.D. level scientists and Ph.D. level scientists and engineers: entrepreneurial engineers: entrepreneurial business educationbusiness education

BS/MS level engineers: faculty - BS/MS level engineers: faculty - student knowledge of industry student knowledge of industry practices and business practices and business problems. Internships, rotations.problems. Internships, rotations.

Leadership Leadership

in the in the

public spacepublic space

Creating an identity Creating an identity (“evangelism”): standard setting(“evangelism”): standard setting

Participate in regulatory Participate in regulatory processes: global scanning for processes: global scanning for best practice: ‘foresight’ best practice: ‘foresight’ exercises.exercises.

Technology Technology transfertransfer

Proactive technology transfer Proactive technology transfer from univ. & gvt labs: start-up from univ. & gvt labs: start-up orientedoriented

Long term relationships Long term relationships between univ. and established between univ. and established firmsfirms

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ConclusionsConclusions

Academic spin-off creation and growth works better under certain Academic spin-off creation and growth works better under certain conditions of industry, technology and commercialization.conditions of industry, technology and commercialization.

It requires significant resources and commitment.It requires significant resources and commitment.

Spin-off creation and licensing university patents is only one of several Spin-off creation and licensing university patents is only one of several mechanisms of technology transfer.mechanisms of technology transfer.

Economic development strategy of universities needs to be aligned with Economic development strategy of universities needs to be aligned with the particular industrial development in the region.the particular industrial development in the region.

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ENDEND