Crown Research Institutes Science Outcomes
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The CROWN RESEARCH INSTITUTES SCIENCE OUTCOMES A report prepared for the Ministry of Research, Science & Technology by McKinlay Douglas Limited January 2003 36-42 GreySt P O Box 13 125, Tauranga Tel: (07) 579 4217 Fax: (07) 579 4218 www.mdl.co.nz email: [email protected] Contents Page 1. Introduction............................................................................................................. 1 2. Approach ................................................................................................................. 3 3. Doing “Good Science”............................................................................................ 4 4. Background • A Brief Overview of Concerns About Transforming Knowledge to Innovation................................................................................ 11 5. Commercialisation • Some International Perspectives.................................... 15 Culture.....................................................................................................................................17 Capability ................................................................................................................................18 Incentives................................................................................................................................22 Summary.................................................................................................................................26 6. Commercialisation • Some New Zealand Perspectives.................................... 28 Introduction .............................................................................................................................28 Informant Observations...........................................................................................................28 International Comparisons ......................................................................................................29 Financial and Management Considerations ............................................................................32 Obstacles and Opportunities...................................................................................................34 7. Possible Initiatives for Improving the Commercialisation Process .................. 36 Intellectual Property ................................................................................................................36 Crown Research Institutes ......................................................................................................38 Private Sector..........................................................................................................................41 A Different Perspective............................................................................................................42 8. Access to Capital .................................................................................................. 45 Government As Owner............................................................................................................45 Capital Markets and the National Innovation Strategy.............................................................46 9. CRI Contributions to Wider Economic, Environmental and Social Goals................................................................................................................ 48 10. Concluding Remarks .......................................................................................... 51 Crown Research Institutes • Science Outcomes Page i Page References.................................................................................................................. 54 Appendix One – Barriers to More Successful Commercialisation............................... 57 Appendix Two – Bayh-Dole Act.................................................................................. 60 Crown Research Institutes • Science Outcomes Page ii 1. INTRODUCTION This report is the second of two being completed for the Ministry of Research, Science and Technology (MoRST) by McKinlay Douglas Limited (MDL). Its purpose is to act as a think piece on Crown Research Institute (CRI) outcomes, especially commercialisation 1. The context is MoRST’s ongoing work on the recommendations in its recent report “An Appraisal of Crown Research Institutes 1992-2002” . Those recommendations were: Q Government must be explicit about its expectations that CRIs focus on the present and future research capability needs of the nation. Q The success of CRIs should be seen by the impacts of their operations on the wider public (social, economic, environmental) good. Q Government should appoint boards with the skill mix appropriate to roles for CRIs that are focused on the wider benefits that their activities deliver to the national innovation system. The brief for this report, as agreed between MoRST and MDL, is to explore issues including: Q Doing “good science” (linking this outcome to the capability issues in the first paper.) Q Different options for commercialisation including newly-emerging initiatives such as the Australian Institute for Commercialisation as well as the learning available from continuing research on apparently successful models such as Silicon Valley, Route 128 and Cambridge. Q The implications of making further capital available to assist with pre-seed or spin-off funding – an area where the need for combining flexibility on the one hand with controls/processes to protect against new perverse incentives may be particularly important. Q Contribution to wider economic, environmental and social goals. The overriding purpose of this report is to stimulate discussion of approaches to commercialisation, including access to capital and other resources, that could promote different or complementary strategies to those currently being pursued by government, especially through CRIs and in relation to the research they undertake. This is consistent with the recognition that restoring New Zealand to the top 50% of the OECD in terms of per capita income will be critically dependent on adding value through, amongst other means, the application of research outputs. As with the companion report “Crown Research Institutes: Governance and Capability” , the intention for this report is that MDL’s work should seek to raise questions that might 1 In this report the term ‘commercialisation’ is used to encompass activities whose purpose is to maximise the full economic return from R & D expenditure. Most often, this will be through processes that are commercial in the sense that they are undertaken by for profit entities with the purpose of generating an economic surplus. However, as used in this report, the term also encompasses processes that exploit research in order to produce improved environmental, social or cultural outcomes for New Zealanders. Crown Research Institutes • Science Outcomes Page 1 not necessarily emerge through the conventional departmental policy process. Essentially, the requirement on MDL is to provide an alternative perspective regarding commercialisation. We start by describing the approach taken in preparing this report. In the balance of the report we: Q Discuss what could be meant, in New Zealand, by doing “good science”. Q Provide an overview of current concerns about translating research outputs into commercially viable innovations. Q Provide some international perspectives on commercialisation. Q Provide some New Zealand perspectives on commercialisation. Q Outline some possible initiatives for improving the commercialisation process. Q Discuss access to capital. Q Consider CRI contributions to wider economic, environmental and social goals. Q Make some concluding comments. Crown Research Institutes • Science Outcomes Page 2 2. APPROACH In preparing this report we drew, to varying degrees, on: Q Discussions with individuals involved in research within CRIs and with experience in innovation both as managers/owners of innovative firms and as investors. Q Scanned current writings on research and innovation, drawing particularly on material available through the Internet. Q Spoke with officials and others involved in New Zealand’s economic development programmes. Q Drew on MDL’s own previous research and advisory work on science policy and on economic development. Crown Research Institutes • Science Outcomes Page 3 3. DOING “GOOD SCIENCE” The question of what doing “good science” means needs to be answered in the context of the role and purpose of Crown Research Institutes, not just from a perspective of science as such. The CRI Act provides some guidance with the Section 4 requirement that “The purpose of every Crown Research Institute is to undertake research” coupled with Section 5’s statement of the principles that CRIs should follow in fulfilling that purpose. These include: Q Research undertaken by a Crown Research Institute should be undertaken for the benefit of New Zealand. Q A Crown Research Institute should pursue excellence in all its activities. The term “benefit of New Zealand” is not defined in the Act nor has government, either as owner of CRIs or as principal funder through the Foundation for Research, Science and Technology (FRST), itself made any definitive statement. Nonetheless, in considering what doing “good science” might mean, the benefit requirement and the associated requirement for excellence in all activities represent as good a starting point as any. One attempt to define “benefit of New Zealand” is the FRST paper “National