Understanding Technology Transfer Understanding Technology Transfer
Total Page:16
File Type:pdf, Size:1020Kb
www.apax.com Understanding technology transfer Understanding technology transfer Contents ACKNOWLEDGEMENTS 1THE FOCUS ON TECHNOLOGY 4THE PATH TO Page 2 TRANSFER COMMERCIALISATION Attention is increasingly focused on More patents do not necessarily the role of the universities in the mean more licences and more creation and commercialisation of revenue. Could universities do a PREFACE innovation. People and passion are better job of picking the winning Page 3 the main ingredients of success. technologies of tomorrow? Page 6 Page 22 EXECUTIVE SUMMARY Page 4 2RESEARCH: PREREQUISITES 5THE ROLE OF VENTURE CAPITAL FOR SUCCESS From the perspective of most venture Understanding the elements of capitalists, university inventions take successful transfer requires an too long to become viable understanding of the funding and commercial propositions. There is structure of university research. broad consensus on the need to Page 12 expand public seed-funding initiatives further. Page 26 3EMPOWERING RESEARCHERS 6IN CONCLUSION AND UNIVERSITIES Universities cannot do it all. The For disclosure of an invention to lead expertise of outside professionals to commercialisation, both should be systematically leveraged. researchers and universities must be Page 32 incentivised. Page 16 1 Understanding technology transfer ACKNOWLEDGEMENTS This report was prepared by Apax Partners with the help of © 2005 Apax Partners Ltd/The the Economist Intelligence Unit. We would like to thank Economist Intelligence Unit. All rights reserved. Nick Valery, Dominic Ziegler, Daniel Franklin, Andrew Palmer and Mike Kenny of the Economist Intelligence Unit. Neither this publication nor any part of it may be reproduced, stored in a retrieval For their significant contributions to the report we would system, or transmitted in any form or by also like to thank following people at Apax Partners: any means, electronic, mechanical, Christian Reitberger, Alexander Wong and Torsten Krumm. photocopying, recording or otherwise, without the prior permission of Apax Siobhan Loftus and Clare Sillars produced the report. Partners Ltd (“Apax”) and the Economist Our thanks also go to a number of outside individuals and Intelligence Unit. institutions for their time and insights. We would Nothing in this publication is intended to particularly like to thank the following: constitute an offer or solicitation to buy or sell investments of any description in ■ Stephen Allott, founder, Cambridge Computer Lab Ring any jurisdiction. Apax makes no ■ Scott Carter, Office of Technology Transfer, California representation that the information or materials in this publication are Institute of Technology appropriate for use in all locations, or ■ Charles Irving, co-founder, Pond Ventures that any investments or services which are referred to in this publication are ■ Laurent Kott, VP for Technology Transfer, INRIA; CEO, available in all jurisdictions, to everyone, INRIA-Transfert or at all. You are responsible for compliance with local laws or regulations ■ Kenneth Morse, Managing Director, MIT and for obtaining your own legal, tax and Entrepreneurship Center financial advice before entering into any ■ Amnon Shashua, School of Engineering and Computer transaction. Science, Hebrew University of Jerusalem All the information in this publication is verified to the best of the authors’ and ■ Dany Star, Intel Capital – Israel Innovation Center publisher’s ability, but we make no ■ Ajay Vohora, Policy Research Manager, Library House representation that it is accurate, reliable or complete. All such information and ■ Miranda Weston-Smith, Case Executive, Cambridge opinions are subject to change without Enterprise notice. You must in any event conduct your own due diligence and investigations rather than relying on any of the information in this publication. We cannot accept responsibility for loss arising from decisions based on this publication. The investments or services referred to in this publication may not be suitable for everyone. If you have any doubts as to suitability, you should seek advice from an investment adviser. 2 Understanding technology transfer PREFACE Survey: Participating institutions The ability to innovate is widely recognised as a critical source of competitive advantage for Universities economies. Universities are increasingly pivotal Brunel University, UK players in the process of innovation, and the past two California Institute of Technology, US decades have seen the emergence of structured Cambridge University, UK mechanisms for transforming university inventions Carnegie Mellon University, US into commercial products and services. These Dresden University of Technology, Germany mechanisms are critical elements of university Georgia Institute of Technology, US technology transfer, the process by which discoveries The Hebrew University of Jerusalem, Israel made on the laboratory bench are transformed into Imperial College, London, UK commercial products, and the subject of intensive Massachusetts Institute of Technology (MIT), US scrutiny by policymakers, academics, businesspeople Oxford University, UK and the investment community. Stanford University, US This report aims to inspire a deeper understanding Technion, Haifa, Israel of this critical area by examining the enablers and UCLA, US hallmarks of best practice in technology transfer in Universität Stuttgart, Germany five countries—France, Germany, Israel, the UK and University College London, UK the US. As part of our research, we carried out a University of Manchester Institute of Science and survey of technology transfer offices at 16 of the Technology (UMIST), UK world’s leading universities into the factors, outside Venture capital firms the university and within it, that drive successful transfer. To compare their views against those of the Amadeus Capital Partners investment community, we also conducted in-depth Apax Partners interviews with a number of early-stage venture ARCH Venture Partners – Southwest capital firms. The institutions that participated in the PolyTechnos Venture-Partners survey are listed on this page and our thanks are due Pond Venture Partners Ltd to all respondents for their time and insights. Wellington Partners Venture Capital GmbH The report has five main sections. The first assesses the intensifying focus on universities as wellsprings of innovation. The next three broadly follow the process of technology transfer, from initial research, through disclosure and patenting, to commercialisation. The fifth chapter analyses the financing challenges that university technology transfer poses and assesses the role of venture capital in this process. A conclusion offers some final reflections. 3 Understanding technology transfer EXECUTIVE SUMMARY n a knowledge-based world, innovation is king. demands a set of exceptional skills rarely found within Everywhere you look, money from public as well as universities. The time required to take an embryonic private coffers is being heaped on efforts to hasten invention to market is longer than the lifespan of most Ithe innovation process along—in a bid to spur prof- venture capital funds and there is a scarcity of private its, employment, regional development and national funding in this space. The experience of even the most competitiveness. successful and sophisticated US research universities In recent years, spurred by the experience of the US is that technology transfer accounts for only a small in particular, policymakers, enterprises, investors and proportion of overall revenue and that very few tech- academics throughout the industrialised world have nologies deliver significant revenue. paid increasing attention to the role of universities as Technology transfer has a better chance of success in drivers of innovation. Ironically, the principal contribu- some industries than others. Life sciences is one field tion that universities make in this regard is often over- that is better aligned with university research activities, looked—whether attracting the entrepreneurs of for example, thanks to its dependence on basic science, tomorrow to study in a particular country or supplying increasing reliance on out-of-house innovation and start-ups and established companies with smart, structured development processes. But a sense of real- problem-solving graduates, universities are critical ism is necessary—technology transfer from universities actors in importing, refining and supplying the human is tough, expensive, constrained by environmental fac- talent upon which economies ultimately depend. tors, and likely to fail more often than succeed. This report focuses on structured forms of technol- This report, imbued by this sense of realism, points ogy transfer. Many universities have established for- to the issues that need to be adressed, by policymak- mal offices and processes for identifying promising ers and universities, to improve the odds of technology discoveries made within their walls and turning them transfer success. Most underscore the importance of into revenue streams through licensing or spinouts. people. The results are not to be sneezed at. By 2000, US university and college patents accounted for 2% of all More specialist early-stage capital. There is a struc- US utility patents granted and 4.4% of US corporate- tural financing gap at the heart of university technol- owned utility patents, discernibly up on figures of ogy transfer that is mainly bridged by government 0.5% and 1.1% respectively in the mid-1980s. Net funding mechanisms.