SRI Five Disciplines of Innovation

An Introduction to SRI

World of abundance- unlimited opportunities

Rapid, exponential change

Intense, global competition

“Valley of Death” Universities, Large Companies, National Laboratories SMEs, New Ventures

Basic Applied Product Discovery Research Research Development Production

Universities, SRI Large Companies, National Laboratories SMEs, New Ventures

Basic Applied Product Discovery Research Research Development Production

▪ Founded by Stanford in 1946 ▪ Based in Silicon Valley ▪ Non-profit corporation ▪ Independent from Stanford in 1970

SRI headquarters, Menlo Park, CA ▪ 2,000 staff members ▪ 43% with Masters and PhDs ▪ More than 20 locations worldwide ▪ Consolidated 2015 revenue ~$500M

Sarnoff, Princeton, NJ

SRI Harrisonburg, Virginia SRI Tokyo, Japan SRI Washington, D.C. SRI St. Petersburg, Florida

Mission: Create world-changing solutions making people safer, healthier, and more productive

Robotics & Automation Information & Computing

R&D PROJECTS

LICENSES Multidisciplinary R&D VENTURES IDEATION

PRODUCTS

Integrated business models: Multidisciplinary scale: From research and development to customer Breadth and depth to solve the hardest problems transition

Nonprofit status: Independence: Return on investment is measured by impact Absolute customer focus, with the responsibility to “see

© 2017 SRI International. All Rights moreReserved. than dollars beyond our customers’ headlights” S/W stabilization for mobile chat Confidential project Pharmaceutical development Scientific digital imagers

Vehicle-to-vehicle Medical device for continuous Education products communications Mobile banking assistant blood pressure measurement

Content summarization Automotive lane sensing Dioxin abatement Innovation eco-system

Bringing Innovations to Market Iris biometrics Underwater mass spectrometer SRI R&D

Confidential project Confidential project projects

ISRG (NASDAQ) acquired by Google acquired by Lighting Science acquired by Redbrick Health

ORCH (NASDAQ) acquired by Dow acquired by ConVerge One acquired by Parker Hannifin

Bringing Innovations to Market acquired by Salesforce SRI Spin-off acquired by Cascade Microtech ventures

Over $20 Billion market cap

Over 50% successfully exited

IMPACT ▪ Create an environment that encourages and expedites the dissemination of new knowledge for the greatest public benefits

▪ Promote, preserve, encourage and aid scientific investigation and research.

RETURN ▪ Create incentives to conduct research and provide upside for intellectual capital.

▪ Investments should be net profitable

▪ Technology transfer office

▪ Partnership and transfer of all IP to an external management group

▪ Creation of internal evergreen fund + Accelerator ▪ Most successful approach

Extraction of value versus Mechanics of Financing

Understanding the use cases Royalty terms

Targeting the technology to the Equity terms proper market

Milestones Creating the strong team

Making the right financing choice

© 2017 SRI International. All Rights Reserved. Example SRI Business Model 2003 to 2008 – DARPA initiates new R&D program called Cognitive Assistant that Learns and Organizes (CALO). SRI selected to lead team of 20+ research organizations. $150M funding over 5 years.

2007 – SRI works on several industrial projects with computing and mobile companies.

SRI also brings on Dag Kittlaus, former Motorola executive as an EIR (entrepreneur-in-residence) to explore market Late 2009 – Siri launches mobile opportunities for CALO technologies. app.

2008 – SRI scientist Adam Cheyer joins Dag Kittlaus and Tom Gruber to found Siri as an SRI spin-off venture. Siri raises $8.5M series A financing, followed by $15M series B.

May 2010 – Siri acquired by Apple. The Local/Regional U.S. Eco-system

© 2017 SRI International. All Rights Reserved. Confidential Trend Example: Global R&D Spending (% of GDP) Country R&D (US$B) % of GDP Israel 9.4 4.2% South Korea 55.8 3.74% Japan 160.3 3.67% Sweden 11.9 3.3% Finland 6.3 3.1% United States 405.3 2.7%> Austria 8.3 2.5% Denmark 5.1 2.4% Germany 69.5 2.3% Taiwan 19.0 2.3% Switzerland 7.5 2.3% Iceland 0.3 2.3% Singapore 6.3 2.2% China 296.8 1.97%^ France 42.2 1.9% Canada 24.3 1.8% United Kingdom 38.4 1.7% Australia 15.9 1.7% Source: World Bank 2011 data

R&D Spending - Current Dollars 500 000

450 000

400 000

350 000

300 000 Government R&D (Millions of current Dollars) 250 000 Business R&D (Millions of Current Dollars) 200 000 All R&D (Millions of current Dollars) Millions of Current Dollars Current of Millions 150 000

100 000

50 000

2003 2005 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2004 2006 2007 2008 2009 2010 2011 2012

SOURCES: National Science Foundation, National Center for Science and Engineering Statistics, Federal Funds for Research and Development (various years), National Patterns of R&D Resources (various years), Survey of Industrial Research and Development (various years) and Business R&D and Innovation Survey (various years);

© 2017 SRI International. All Rights Reserved. © 2017 SRI International. All Rights Reserved. © 2017 SRI International. All Rights Reserved. © 2017 SRI International. All Rights Reserved. U.S. Department of Energy Laboratories

Economic Knowledge Education Research Growth

“Prevailing discourse… emphasizes the university’s place as a paramount player in a global system increasingly driven by knowledge, information, and ideas…. Knowledge is replacing other resources as the main driver of economic growth…”

Harvard President Drew Faust – June 2010

TRL 1-3 NCEBPC I-CORPS

Pre-seed Seed Early Stage Late stage Mature Enterprise Development

Large Manufacturing Each Consortia has: Academia Companies

Universities & • Clear technology focus National Labs Small & Medium Enterprises • TRL level suited to specific

technology challenge Community Colleges Start-ups • Shared user facilities

• Ability to address critical

challenges Place-based innovation that builds regional advanced manufacturing ecosystem • A balanced portfolio Development of advanced manufacturing of projects workforce in key technology areas

Accelerated RD&D and commercialization of new technology products in the U.S. 30

LIFT Light/Modern Metals REMADE Detroit, MI Sustainable MFG Rochester, NY AIM Photonics Photonics Rochester, NY Process Intensification 31 New York, NY

NextFlex DMDII America Makes Flex. Electronics Digital Mfg. Additive Mfg. Chicago, IL San Jose, CA Youngstown, OH AFFOA Adv. Textiles Boston, MA

IACMI CESMII Adv. Composites Smart Mfg Power America Knoxville, TN Los Angeles, CA Power Electronics Raleigh, NC

NIMBLE • Over $800 million federal funding BioPharma MFG catalyzed over $1.2 billion Wilmington, DE from consortia ARMI Adv.Tissue • Manufacturing Institutes have attracted Manchester, NH hundreds of companies and ARM universities as active partners Advanced Robotics Pittsburgh, PA

• Federal resources flow downwards • Mission agencies have different missions, & operate under different conditions • Federal agencies required to increase R&D ROI • Significant resource allocation occurs locally • Partnerships determined locally • Open innovation as the prevailing model

Roland Stephen [email protected] +1-919-522-5589