The leadership forum to help Europe innovate

MAKING INDUSTRY-UNIVERSITY PARTNERSHIPS WORK Lessons from successful collaborations This report was commissioned by the Science|Business Innovati on Board AISBL. The Board is a Belgian not-for-profi t scienti fi c associati on that performs original policy research, engages with policymakers and the press, and works generally to improve the climate for innovati on in Europe. Its members include Science|Business, ESADE Business School, INSEAD, Microsoft , BP, SKF, Foley & Lardner LLP, Aalto University and Imperial College London. Further informati on, including other innovati on-policy research, is at www.sciencebusiness.net.

The Science|Business authors

Gail Edmondson Editorial Director

Lori Valigra Contributi ng Editor

Michael Kenward Editor at Large

Richard L Hudson CEO & Editor

Haydn Belfi eld Researcher

Design: Peter Koekoek

© 2012 Science|Business Innovati on Board AISBL

The views expressed here are of the authors, and do not necessarily represent those of the Board or the Board’s members. ABSTRACT

Universiti es and industry have been collaborati ng for over a century, but the rise of a global knowledge economy has intensifi ed the need for strategic partnerships that go beyond the traditi onal funding of discrete research projects. World-class research universiti es are at the forefront of pioneering such partnerships. They are designed to run longer, invest more, look farther ahead and hone the competi ti veness of companies, universiti es and regions. In short, they transform the role of the research university for the 21st century, anchoring it as a vital centre of competence to help tackle social challenges and drive economic growth.

But it’s a big leap. It requires each side They include: to engage far beyond the conventi onal exchange of research for funding. When 1. Keep the ship steady. Policymakers need they work well, strategic partnerships to ensure a predictable, stable environment merge the discovery-driven culture of of funding and regulati on for long-term the university with the innovati on-driven strategic partnerships to thrive. environment of the company. But to make the chemistry work, each side must 2. Give universiti es the autonomy to overcome the cultural and communicati ons operate eff ecti vely, and form partnerships. divide that tends to impair industry- The best people to decide a university’s university partnerships of all types and strategy are its own board and faculty undercut their potenti al. heads, not government ministries. Without freedom to operate – with appropriate This report aims to address the challenge checks and balances – they cannot form of bridging the industry-university divide eff ecti ve partnerships. by highlighti ng what makes universiti es attractive as industry partners, what 3. Reward activist, collaborative structures make for excellent partnerships universiti es – and encourage more to and what approach produces seamless be that way. Funding incenti ves work: interacti ons. It builds on a growing pool government policy should reward, or at of academic research about the state of least not discourage, universiti es and industry-university collaborati on and off ers companies that form strong partnerships. concrete lessons and recommendati ons New government programmes, such as from experienced managers on both sides proposed by the EU and some nati onal of the divide. governments, should enti ce others to take the same step. The empirical lessons in this research lead to some obvious policy conclusions.

3 4. Help universiti es strive for excellence. were recommended by members of the Companies want to work with the best – Board, among other experts. The authors and so Europe must take care always to would like to thank the Board members, feed and promote its best universiti es, in company executi ves and academics for order that more job-creati ng partnerships their contributi ons to this report. can be formed. The board is grateful to Androulla Vassiliou, The report was commissioned by the EU Commissioner for Educati on, Culture, Science|Business Innovati on Board AISBL, Multi lingualism, Sport, Media and Youth, a not-for-profi t scienti fi c associati on create for her encouragement and comments on to improve the climate for innovati on and this research. Europe. The case studies of innovati ve and successful partnerships featured

4 TABLE OF CONTENTS

I. OVERVIEW Key Lessons

CASE STUDIES II. Partnerships that impact teaching and learning Case 1: Microsoft -Cisco-Intel-University of Melbourne Case 2: Aalto University: Internati onal Design Business Management Programme Case 3: BP’s Energy Biosciences Insti tute, University of California, Berkeley Case 4: Audi’s Ingolstadt Insti tute of TU Munich

III. Partnerships that develop new funding streams Case 5: Imperial Innovati ons

IV. Partnerships that rethink the role of the research university Case 6: University of California Case 7: Karolinska Insti tutet Case 8: Calit2

V. Partnerships that go strategic Case 9: IBM-ETH Zurich Case 10: SKF-Imperial College London Case 11: IBM-Imperial College London Case 12: GE Global Research Munich Case 13: Siemens-TU Berlin, MIT Case 14: Nokia-Aalto University, UC Berkeley

VI. RECOMMENDATIONS

5 I OVERVIEW KEY LESSONS When companies and universiti es work in tandem to push the fronti ers of knowledge, they become a powerful engine for innovati on and economic growth. Silicon Valley is a dramati c example. For over fi ve decades, a dense web of rich and long-running collaborati ons in the region have given rise to new technologies at a breakneck pace, and transformed industries while modernising the role of the university. For an elite group of world-class research have some visionary companies and their universities, this kind of strategic academic partners successfully overcome collaborati on is top priority. The benefi ts their inherent diff erences to forge a higher have long been obvious to these insti tuti ons: level of strategic partnership? These are substanti al streams of external funding, the key questi ons addressed in this report. enhanced opportuniti es for professors Its fi ndings are based on the views and and graduates to work on groundbreaking experience of senior industry executi ves research, vital inputs to keep teaching and and university offi cials engaged in managing learning on the cutti ng edge of a discipline, successful partnerships. and the impact of delivering soluti ons for pressing global challenges. The most producti ve collaborati ons are strategic and long-term, according to the If only it were so easy. For most universiti es practi ti oners who contributed to this report. – even those with cutti ng-edge research – They are built around a shared research partnering with industry does not come vision and may conti nue for a decade or naturally. Most European academics are beyond, establishing deep professional not engaged at all in collaborati ons with ti es, trust and shared benefi ts that work industry and only few cooperate with to bridge the sharp cultural divide between business to a high degree, according to a academia and industry. “It is individuals May 2010 study of Ewuropean university- who understand both worlds – academia business cooperati on.1 And when European and business – that are the driving force universities form partnerships with behind successful partnerships,” says industry, too oft en the potenti al for synergy Alan Begg, Senior Vice President, Group is thwarted by failures of communicati on.2 Technology Development, SKF Group.

What makes for a seamless relati onship Strategic partnerships designed to run for between university and industry? Why fi ve to ten years deliver greater and oft en do so many partnerships produce unanti cipated benefi ts to all parti es through disappointi ng results or fail? And how a virtuous circle of interacti ons. For the

6 university, they provide a longer stream of business to drive innovati on. The future secure funding that can bolster academic EU programmes on educati on (Erasmus for strength. They help modernise teaching and All) and research and innovati on (Horizon learning by fostering an exchange of ideas 2020) will ensure that such interacti ons are and developing people with the skills and fostered and fully exploited. competences needed as new innovati ons transform markets and industries. The Commission already has launched a number of initi ati ves to enhance closer Above all, long-term alliances build the and more eff ecti ve ti es between the three vital human capital needed to make the corners of the knowledge triangle, including industry-university collaborati ons work. the European Insti tute for Innovati on and It is the human ti es, understanding and Technology (EIT), the Knowledge Alliances trust on both sides of the partnership that pilot project and the University-Business count most. Over ti me, a well-managed Forum. partnership produces a growing number of professors and graduate students who But the cultural divide between universiti es can think and act across the cultural divide, and industry runs deep. It conti nues to act connect with the key research interests as a brake on eff ecti ve collaborati on with of a company and work harmoniously to the business world, according to an October defi ne big and common strategic goals. 2011 study on European University Business That substrate of human talent not only Cooperati on undertaken by Technopolis.3 ensures the success of existi ng projects; it The experts who contributed to this study is key to developing future collaborati ons. believe the cultural divide can be overcome, but it requires strong university leadership, One example: IBM’s new $90 million faculty who understand business, and nanotechnology center in Zurich illustrates incenti ves and structures for academics to that virtuous circle. The Binnig and Rohrer bridge that gap. European universiti es could Nanotechnology Center is the cornerstone signifi cantly increase their att racti veness of a new 10-year strategic partnership in to industry, these experts said, by making nanoscience between IBM and the Swiss industry partnerships a clear priority and Federal Insti tute of Technology (ETH Zurich) by developing a pool of academics who aimed at advancing energy and informati on have worked in industry. technologies. Ties between the two parti es run deep; the investment caps many years This report was commissioned by the of collaborati on. Science|Business Innovati on Board AISBL, a not-for-profi t scienti fi c associati on formed Creati ng more strategic industry-university to improve the climate for innovati on in partnerships such as this would substanti ally Europe. The Board strongly concurs with improve Europe’s climate for innovati on. the European Commission’s university The agenda for the modernisati on of modernisati on agenda and the need to Europe’s higher-educati on systems has make universiti es more responsive to made it a priority to strengthen the links demand in the marketplace and acti ve between higher educati on, research and parti cipants in their innovati on markets.4

7 Karolinska Institutet, the University of The aim of this report is to complement California, Audi, IBM, GE, and Aalto – and add more of a business perspective University. Interviews were conducted to – a growing body of academic studies on from 6 January through 3 February 2012. the state of European industry-university partnerships. It was designed to be The Science|Business Innovation Board selective in nature, with a focus on the is grateful to all the interviewees for their insights and lessons learned from a handful contribution to this report. It is our hope of groundbreaking partnerships. Each case that this breadth of perspective will prove study was based on lengthy interviews with useful. senior executives and university managers who oversee these partnerships. Several KEY LESSONS FOR PARTNERSHIPS cases focus on US university partnership initiatives, reflecting the fact that American The industry-university partnerships educational institutions have spearheaded analysed for this report varied widely, but the evolution of large-scale industry- the executives and academics managing university collaborations. But Europe also them agreed on the core elements needed has many prominent, and productive, to make a partnership work well. Their strategic partnerships. key lessons and recommendations were the following: The cases included in this report vary widely in their aims, and each had a variety of 1. University leadership is vital impacts on the university partner. They have been grouped here under three key ■■ University presidents need to make categories based on particular points of industry-university partnerships a interest to policymakers: strategic priority and communicate partnerships that increased funding the message regularly to the entire streams for universities academic community. partnerships that had a significant impact ■■ Strategic partnerships need input on teaching and learning, and at the highest level from both the partnerships that prompted a rethinking of company and the university. Create a the role of the research university. joint steering group including senior academics and company executives. This report draws on the direct experience ■■ Make the goals and benefits of of the Board’s members– on both sides of partnering clear to the entire faculty. the ‘market’: the universities supplying ■■ Design incentives for university faculty talent and ideas, and the companies and provide resources to manage a demanding them. It also benefits from the cultural shift that does not undercut input of practitioners from companies and basic research but puts a clear priority universities identified by Board members on engaging with industry for mutual and others regarded as pioneering a new benefit and for the benefit of society. era of industry-university partnerships, including Siemens, Nokia, ETH Zurich,

8 2. Long-term strategic partnerships with ■■ Senior executives and university built-in flexibility work best experts should map out together the key questions and research ■■ The most fertile starting point for a challenges that are a high priority partnership is one that allows industry for both. Encourage sufficient high- to do something it can’t do itself, level exchange of information and executives said. The world’s leading brainstorming to enable common technology multinationals have areas of interest to emerge. dozens, if not hundreds, of strategic ■■ Understand the three different types partnerships with universities. But of possible partnerships – strategic, increasingly, the trend is to narrow operational or transactional – and the focus on a handful of strategic select the type that fits your needs. partnerships that aim higher, receive ▫▫ Strategic partnerships run for significantly greater funding and last five to 10 years and need a longer. These partnerships increasingly broad, flexible agreement. The will drive richer benefits to fewer knowledge produced by the universities. collaboration is likely to influence ■■ The growth of these alliances reflects the university’s future research the evolution of corporate R&D away and teaching and a company’s from basic research toward research strategy. that is much nearer to the company’s ▫▫ Operational partners have a immediate needs. As a result, a gap research project with a division has emerged in industry’s ability to or particular R&D lab and run peer into the future, and industry is for one to three years. They can increasingly turning to universities to be valuable for building ties that know what is going on at the frontiers lead to a strategic partnership. of research. ▫▫ Transactional partnerships are ■■ Long-term strategic partnerships focus lesser interactions, such as an the university’s creativity and talent executive agreeing to teach on enabling future innovations that a course, which may lead to can be taken to market by industry doing more and bigger projects and deliver benefits to society within together in the future. These, five to 10 years. too, can ultimately give rise to a strategic partnership. 3. Start with a shared vision and develop ■■ Strive for a partnership of equals with a strategy shared decision-making. Successful partnerships are based on a win-win ■■ The first step to a healthy partnership situation for all the parties. is assessing the core academic strengths of the university and the core 4. Put the right people in charge – those research competence of the company who cross boundaries to identify promising opportunities for collaboration. People determine the success or failure

9 of industry-university partnerships. To seeking to answer, universities should attract industry involvement, universities create advisory boards of executives from must have people capable of building and selected industry sectors where they are managing partnerships. Collaborations well positioned to develop partnerships. only work well when they are managed by people who cross boundaries easily and Once a potential industry partner is in who have a deep understanding of the two view, universities should engage with cultures they need to bridge. top management. Academics need a relationship with someone who is senior University programmes need to be enough at the company to allow strategic strongly orientated toward helping solve issues to emerge and to be addressed in the scientific and technological challenges research. that companies care about. That means breaking down barriers inside the university When a partnership has been launched, and engaging faculty who have industry an executive board should be formed and experience. meet regularly to encourage strong two- way communications between academics Universities must become more open to and senior company officials. The chair giving people leading positions who bring should follow up regularly with members more than just a research pedigree. They to keep the dialogue flowing and encourage need multidisciplinary individuals who impromptu feedback on the project from are mentors and bridge-builders. Most both sides at any time. universities engaged in partnerships are “learning by doing,” and lack academics Develop two-way exchanges to build a with experience in industry or the proclivity substrate of academics who understand to network outside their area of expertise. industry. Universities should encourage professors to work in industry and invite 5. Kick-start the dialogue – encourage industry researchers to teach. cross-fertilisation of ideas 6. Don’t get hung up on intellectual There is no short cut to cultivating personal property (IP) ties that can lead to the most creative and promising collaborations. Universities Develop a broad overarching framework should create opportunities for academics agreement and work out details on a case- and company researchers and executives by-case basis. A framework agreement with shared interest to come together and saves time and avoids the acrimony that develop a dialogue. Informal exchanges often results from too narrow a focus on over lectures or seminars that bring both who owns what. Company executives tend sides together can spark conversations and to walk away from universities that have lead to new relationships. too inflexible an approach to IP, no matter how good the science. To understand the key scientific and technology questions companies are

10 IP is important but it should not be viewed 8. Don’t get hung up on measuring the as the centrepiece of industry-university results of a strategic alliance relations. Instead of a narrow focus on IP as income source, universities should The most fruitful partnerships take time to be engaged in providing solutions for the bear fruit. Setting up artificial metrics to economy – the income stream will be measure them can undercut the alliance greater and benefits wider. and fail to capture the unanticipated benefits that accrue when a strategic The role of IP is overemphasised. The true relationship is built on trust, structured well value in R&D is often the tacit knowledge and managed by people who understand it produces. both worlds.

Universities seeking to form partnerships Projects should have defined objectives, for with industry to modernise teaching and example, finding a class of materials that learning should not insist on protecting IP have certain properties. But companies that comes out of that research. The key and universities should avoid trying benefit to the university is the impact on to measure the value of an industry- teaching and learning from industry-based university partnership in metrics such as projects. papers published or patent applications filed. The quality and nature of scientific 7. Promote a multidisciplinary approach breakthroughs vary, and volume does not to research and learning automatically equate with value.

Innovation increasingly depends on the Focus on quality instead of quantity of ability of university and industry experts output. Select projects from the outset to work together across a number of with a focus on excellent science through disciplines, such as technology, design and peer review of projects and funding. This engineering. Encourage multidisciplinary builds in quality control up front, attracts academic programmes and promote industry investment and ensures better the engagement of industry in such results. programmes. 9. Redefine the role of the research Setting up a multidisciplinary institute on university as a source of competence and campus in partnership with industry can problem-solving for society help break down traditional academic silos and drive a new multidisciplinary culture Bold, visionary partnerships between and curricula. industry and universities can accelerate innovation and help deliver solutions University officials seeking to develop to pressing social challenges. But to partnerships with industry risk losing harness that tandem, the mission of the projects if they are not willing to embrace research university needs to be redefined. a multidisciplinary approach to research. Collaborating with industry should be linked to a redefinition of the role of the research

11 university for the 21st century. That role 2 Technopolis Group, University Business now extends beyond teaching and public Cooperati on, 15 Insti tuti onal Case Studies service research to tackling key social on the Links Between Higher Educati on challenges and helping drive economic Insti tuti ons and Business, October 2011. growth. 3 Ibid. Today’s universiti es largely embrace a model of higher educati on developed over 4 Science|Business Innovation Board. 100 years ago. A new vision should include “Time for university reform – with market producing the highly skilled workforce for principles.” 30 August 2011. a globally competi ti ve economy.

The university in the 21st century should be viewed not just as a generator of ideas but as a source of knowledge and competence that can benefi t society.

References:

1 Todd Davey et al., The State of European University-Business Cooperati on. Science- to-Business Marketi ng Research Centre, Münster University of Applied Sciences, 2011.

12 II PARTNERSHIPS THAT IMPACT TEACHING AND LEARNING The primary focus of most industry-university collaborati ons is joint research, but many have an impact on teaching and learning that develops naturally out of the partnership. Professors join a project inside the company and researchers agree to lecture, creati ng a fruitf ul ongoing exchange that helps modernise curricula. But a growing skills gap and fi erce competi ti on for global talent have prompted some forward-looking companies to develop partnerships with universiti es specifi cally aimed at modernising teaching and learning. The partnership itself becomes a groundbreaking experiment in developing new skills for a next-generati on workforce and a conduit for future recruitment of top talent. Two such partnerships are included here (ICT21S and Aalto’s IDBM programme).

Another groundbreaking approach involves partnerships that establish a multi disciplinary research insti tute in which industry researchers and academics pursue soluti ons to complex, systems-level problems that require cross-disciplinary experti se. The creati on of high-profi le multi disciplinary insti tutes can help break down traditi onal academic silos by creati ng incenti ves for new areas of research, seeding new courses of study and multi disciplinary degree programmes, while also driving innovati on (e.g. BP’s Energy Biosciences Insti tute at the University of California and Calit2). These and other cases highlight the increasing role industry can play to modernise curricula, improve the knowledge base and skills of future graduates and foster economic competi ti veness.

CASE 1 with the University of Melbourne that set out to transform educati on for the 21st MICROSOFT-CISCO-INTEL- century. Their goal was to have a game- UNIVERSITY OF MELBOURNE: changing impact by fi rst identi fying the A partnership to forge skills for the 21st higher-order skills that students need for century success in schools and in the workforce and then transforming the assessment and Key interview: Greg Butler, Senior Director teaching of these 21st-century skills. The Worldwide Educati on Strategy, Microsoft ; partnership, called ATC21S – Assessment and Visiti ng Research Associate, School of and Teaching of 21st Century Skills – Business Management, Open University, UK focuses on the criti cal skill sets for a global knowledge economy. In 2008 Microsoft , Cisco and Intel agreed to launch an industry-university partnership

13 Microsoft, Cisco and Intel have all had 60 research institutions to successfully long-running individual programmes to develop a new set of tools (computer-based boost skills in the classroom, but none collaboration and problem-solving) to felt as if they were having enough impact. assess skills that will form the basis of new “Young people were not being equipped curricula. Cost of project $2.5-$3 million with the skills needed to be successful (additional resources were contributed in employment. You only have to look at by the many academic and multilateral unemployment and mismatch of skills and organization partners). jobs,” says Greg Butler, Senior Director Worldwide Education Strategy at Microsoft. The assessment tools present complex, multi-step, cognitively challenging problems Moreover education has been slow to to be solved in real time by pairs of students respond and to take up the challenge who communicate via computers to arrive of the assessment and teaching of new at a solution. The computer-based program 21st century skills. “The partnership of then assesses how each of these students corporations and university set out to lead collaborate. the way to new forms of assessment that would drive new approaches to teaching “This remarkable initiative… has cracked the and curriculum. A radical shift in the code on how to set standards for, and assess three pillars of education was needed,” the acquisition of, 21st-century skills,” says says Patrick Griffin, the project’s executive Robin Horn, education sector manager for director. the World Bank, adding that “measuring skills such as critical thinking, problem- To tackle the task, the core partners formed solving, collaboration and teamwork, ICT an executive board to manage a three-year competencies, and information literacy, multi-stakeholder effort, involving some in a rigorous and pragmatic way, has 250 academics and multilateral institutions been totally out of reach until now…. It including the OECD and UNESCO. The is a harbinger of a wholly new approach partnership identified two discrete skill to standards and assessment for the 21st sets: collaborative problem-solving and century.” digital literacy. And the three-year research effort produced knowledge, tool sets and Andreas Schleicher, special adviser on common standards that transfer across education policy to the OECD and founder borders. of the PISA (Programme for International Student Assessment) study says: “ATC21S KEY INNOVATION has played an essential pathfinder role to move the assessment agenda forward. This multi-stakeholder industry-university It fills a critical gap between existing partnership overcame general skepticism basic research on assessment design and that collaborative problem-solving skills methodologies, on the one hand, and the and digital literacy could be accurately implementation of large-scale assessments measured. It managed a highly complex that provide reliable data at reasonable global academic research effort across cost, on the other. Its latest venture, the

14 piloting of tasks to assess collaborative party. “If you ignore the other party’s problem-solving skills, provides important agenda, the partnership won’t work,” says insights for OECD’s efforts to broaden Butler. “I had to understand the agenda future PISA assessments to encompass of the academics at the University of interpersonal skill dimensions.” Melbourne. We call it brokering. Too often, it’s ‘let’s partner’ and six months later it all RESULTS blows up because no one asked, ‘What are your objectives?’ ” Five white papers defining the skills of the 21st century, peer-reviewed and published 3. Ensure equity in the partnership. “Rarely in leading journals does everyone have equal power around ■■ Assessment tools created for two the table,” says Butler. “The attitude of core skill sets: collaborative problem- industry could be, ‘We are funding, so you solving and ICT literacy. do what we tell you.’ You need to negate ■■ Six countries (Australia, Costa Rica, that power imbalance. If we pulled the Finland, the Netherlands, Singapore, power play it wouldn’t work. The academics and the United States) piloted the won’t trust us. It would be contractual. If assessment skills in cognitive labs on we wanted to do a contract that’s easy. 5000 students. Fieldwork trials are You’d say, ‘I’ve got money and work and continuing. can you do it?’ But you lose the diversity ■■ Results presented at the 2012 and innovation that the partnership Education World Forum in London brings. If [an equal] partnership drives ■■ Singapore developing strategy to the innovation, you get more innovative deploy the assessment tools broadly solutions and better solutions. “You can’t The OECD PISA study will incorporate be half-hearted in the partnership – we are assessment of 21st century skills in 2015 all in control and everyone is responsible. ■■ Curricula recommendations to The executive director came from the support an improved workforce will University of Melbourne, so in one way we be published in June 2012. report to the university. We have meetings where everyone has an equal say. We spent LESSONS time to make sure everyone’s objectives are clear. A partnership has to deliver mutual 1. Partnerships have a high cost in human benefits. A guiding principle to partnering capital. Do them as a last resort – when should be the following: ‘Is everyone you can’t accomplish the goal alone. “If getting mutual benefit out of this work. If Microsoft had chosen to do this work alone, so, you get better results.’ ” it would have had minimal impact. There was tremendous value in the partnership,” 4. In some cases where the goals are says Microsoft’s Butler. broad and social in nature, success may depend on dropping claims to intellectual 2. Build partnerships on a set of principles. property. The golden rule is understanding each other. Spend time on the agenda of each “All the output from ATC21S is in the

15 public domain. This was critical in References: building a partnership with researchers and governments,” says Butler. “If we ATC21S website: http://atc21s.org had said, ‘You do the work and we will Statement on ATC21S by Robin Horn, copyright it,’ I am sure we would not have been successful. World Bank: http://blogs.worldbank.org/education/ “Most of the cross-boundary transactions how-can-school-compete-with-social- we do at Microsoft are done by contract. media The same is true with universities. The purpose of a contract is to shift risk. Most CASE 2 of risk ends up lying with a person who receives the contract – it says you are liable AALTO UNIVERSITY FORMS if you don’t adhere to the contract. But PARTNERSHIPS WITH INDUSTRY with complex problems we have today – in TO TRANSFORM TEACHING AND education, environment, global warming LEARNING – we will never solve those problems if we continue to only try to shift risk. Key interview: Mikko Koria, professor of We have to build mechanisms to share international design business management, accountability. Because problems by nature Aalto University cross boundaries. You can’t write a contract to solve environment problems today.” In 1995 the then rector of the University of Art and Design Helsinki, Yrjö Sotamaa, 5. Partnerships need to be flexible: The proposed a graduate programme blending ATC21S partners aimed at concluding design, technology and business courses their work within three years – in June across three universities to create a new 2012, but they are now considering field of multidisciplinary study. The goal extending the work plan to engage with was to develop students with an innovative ministry officials in governments around mindset through collaborative, cross- the world on how to deploy the results. disciplinary problem-solving. “We think this partnership might evolve into a number of masterclasses for The programme, International Design government leaders, helping them build Business Management (IDBM), was set policy and implementation plans,” says up as a full-year minor study offered jointly Butler. “We never thought about that by the Helsinki School of Economics, the at beginning. We realised only recently University of Art and Design, as well as the risk if we published the results of the Helsinki University of Technology, the work and ministries didn’t take it on to complement majors in engineering, board. Partnerships can’t be rigid. You need design or business – or other subjects. The flexibility and the ability to evolve.” programme is balanced equitably between business, engineering and design learning.

The IDBM challenged the notion that a university’s role is to pass on existing

16 knowledge, and that absolute answers airport asked a team to figure out how exist. “The real world doesn’t work like to tailor the design of the airport’s new that. Sometimes, you don’t even know the terminal and services to appeal to its Asian question, says IDBM professor Mikko Koria. passengers. The team included a Japanese “Our answer was to work with industry. We interior architectural student, a Chinese want to bring the real, confusing world into business student, a Finnish architectural the teaching of the master’s programmes. student and a British business student. You cannot simulate something like that The students travelled together to all the because it is not open-ended enough. You major Asian airports to research cutting- cannot simulate the messiness of the real edge design and services that cater to Asian world. You have to involve real companies.” passengers. Out of some 30 proposals made by the team, Helsinki airport implemented IDBM is now part of the offering at Aalto over 20 in the new terminal. University, which was formed by the merger of the same three universities in 2010 INNOVATION to promote multidisciplinary learning – another initiative proposed by Sotamaa. At the time of its introduction in 1995, Now in its 17th year, the IDBM has become the IDBM’s engagement with industry a strong platform for ongoing collaboration in using cross-disciplinary teams was a with Finnish industry that offers competitive groundbreaking approach to transforming advantage to companies while creating a teaching and learning. Through project- real-world learning experience for students. based learning that takes place inside Multidisciplinary teams tackle industry companies, it developed the missing problems and produce innovative solutions skills and experience vital for workers over the course of a one-year programme. in a networked, global economy while In return, each company agrees to pay the strengthening ties substantially between school roughly €20,000 per project. the universities and industry.

The IDBM projects involve teams of “Society’s problems do not exist in silos. multicultural and multidisciplinary students Pollution, for example, is a systemic who drive their own learning experience. problem involving scientific, economic Companies offer students real-world, open- and environmental issues,” says Koria. ended problems to solve that the company “The IDBM is an effort to create cannot address itself. The teams seek to individuals who can think outside their offer new perspectives and ideas that cross- own profession because we recognise that fertilise with what the company already breakthrough innovations are often done knows, says Koria. in interdisciplinary teams.”

Work projects range widely from fathoming RESULTS new applications for mobile radar or waste-water technologies to assessing ■■ The programme has significantly the innovative potential of Vietnamese enhanced Aalto University’s ties companies. In one project, the Helsinki with industry, training 703 students

17 in 168 company projects with 114 before approaching industry. partner companies and establishing 2. Develop win-win partnerships. a direct recruitment platform for IDBM Companies have to have a real commitment students. to make these kinds of projects work, so ■■ Seven to ten per cent of the IDBM the proposal has to be a win-win situation. projects lead to the development “What we offer is essentially to help of a real-world service or product companies think, says Koria. “One of key innovation, creating major value for problems is companies don’t have the time the industry partner. to sit back and reflect. We offer new ideas. ■■ The university is closer to market They can take them up and implement. developments because its students are We help them to improve their business engaged with cutting-edge business through these inputs (we don’t run their models, including service design. business). Because we offer them value, Many entrepreneurs emerge from the they are willing to open up their doors IDBM context.Aalto is now considering – and create a training ground inside the replicating the real-life case studies in organisation for our students. other courses. “It takes a lot of work to convince companies ■■ IDBM helped pioneer multidisciplinary they get benefits from working with learning at all three universities where students. I spend 20 to 30 per cent of my it was initially offered, and was a time setting up projects with companies. convincing example with a 12-year This has to be allowed for – and you need track record at the time of the Aalto to define from the beginning this is also University merger proposal in 2007. intended as teaching programmes.” ■■ The IDBM programme has helped evolve university governance through 3. Don’t seek to protect IP. “Many its different incentives and structures. universities want to own any intellectual “It doesn’t fit into the traditional lines property developed by students who work of command at Aalto,” says Koria. for companies,” says Koria. “This IDBM IDBM management reports directly partnership is not research for companies. to the vice rector of teaching. Our objective is to create a situation for real-life learning. We throw away the profit Lessons for building multidisciplinary motive. It’s not in our interest. Who would programmes that engage industry want to collaborate if the university owned the IP?” 1. Create a strategy. To attract industry involvement, university programmes 4. Communicate the benefits of a new must be strongly orientated to industry. generation of innovative thinker. That means commitment from the top Multidisciplinary teamwork is a vital and leadership to breaking down barriers inside sought-after skill in the labour market. the university and within the company. It Programmes like the IDBM create a window requires faculty with industry experience. If on future recruits that could sharply reduce the partnership involves other universities, internal training costs. “Companies may they should forge a common understanding save two to three years of training when

18 people come in with these capabilities,” the balance of resources must be used for Koria says. “That’s a tangible benefit for teaching. Normally its 50-50. And we have the company. a real mission to engage with industry and society at large, creating tangible benefits 5. Develop a pool of academics with deep through our interaction.” understanding of industry and business experience. When it comes to managing (IDBM director Markku Salimäki has 20 industry collaboration, you have to rethink years of industry experience, an MSc in the type of people running programmes in technology and a PhD in economics. Koria academia, advises Koria. “Most university has an MSc in architecture, an MBA in teachers have no idea what the business design management and PhD in economics.) world is about. You have to break down academic silos. Normal academics don’t 6. Develop student communities to have much incentive to do this. They are overcome silo thinking. For multidisciplinary judged by publications and it’s difficult to and cross-cultural projects, it’s vital to publish while managing programmes like create a community among students so this. they learn to understand and appreciate differences in how others think. “We spend “The key issue is having people who cross a lot of time doing this – it’s intensive in boundaries – you need multidisciplinary the first year,” says Koria. “After that they individuals who are mentors. The university have a community of practice together. has to be open to giving people leading During the first year they learn how people positions who normally wouldn’t be think differently in other professions. We chosen. You need bridge-builders. That’s don’t want to erase those differences. the bottom line. This kind of collaboration They are key to innovation. That’s why the doesn’t happen by itself. People make programme requires people at a graduate this kind of change happen. If all the key level with strong professional background. If people running the IDBM today would everyone is a generalist, no one contributes leave, it would fall apart. You have to be to new ideas. We’re interested in benefiting constantly on the lookout for people and from the differences.” create incentives for them to grow.” References: This kind of programme most suits colleges of applied arts and technical universities IDBM website: http://www.idbm.fi/ where publication in academic journals is Karjalainen, T-M; Koria, M & Salimäki, M not priority number 1. But any university (eds.) (2011) IDBM Papers vol.1. Helsinki; can do it if it creates the right incentives. IDBM Programme, Aalto University. ISBN “We dedicate 70 per cent of our resources 978-952-92-8642-3 to teaching and 30 per cent to research. And the research done must be directly useful for the teaching programmes,” says Koria. “We take away the academic liberty of researching almost anything and say

19 CASE 3 at UC Berkeley, the deputy director is a professor of plant and crop sciences at THE ENERGY BIOSCIENCES University of Illinois, and associate director INSTITUTE (EBI): Paul A. Willems is technology vice president of energy biosciences at BP. “Rather than Key interview: Paul A. Willems, EBI [having] a single leader, it’s a triumvirate,” Associate Director, Vice President for Energy says Willems. “We have a lot of input on Biosciences, BP a strategic level, but not on day-to-day implementation. The management team The EBI is a ground-breaking strategic creates the annual work plan and budget. research partnership created in 2007 to The governance board approves the tackle the application of modern biology strategy and budget, but does not have a to energy problems. The main focus now is line-item veto. There’s no mechanism for on developing sustainable next-generation the university or BP to say, ‘We don’t like biofuels and reducing the impact of fossil project number 17 – take it out.’ Everything fuels on global warming. BP supports the we do is through influencing and being institute with a 10-year, $500 million grant. part of the scientific process as opposed Its partners are the University of California, to formal authority.” Berkeley, the Lawrence Berkeley National Laboratory and the University of Illinois RESULTS at Urbana-Champaign. The institute hosts 60 research groups including 129 faculty ■■ The creation of the EBI has had a major members and over 300 postdoctoral impact on teaching and learning at researchers and graduate students. BP’s partner universities, increasing the multidisciplinary studies focus at INNOVATION UC Berkeley and University of Illinois. Energy biosciences was not its own BP’s desire to bring multiple disciplines discipline in 2007 when the institute to bear on the challenge of creating was launched. As talented faculty sustainable biofuels through the EBI forged publish papers and win grants based a new academic field – energy biosciences – on their work at the EBI, BP’s university integrating biology, chemistry, engineering, partners are starting to develop a environment, agriculture and economics. formal energy biosciences curriculum, The institute combines a long-term research which is an independent endeavour vision with a mission to drive step-change by the universities – something BP innovations that will pave the way for encourages but does not directly sustainable fuels. It covers the entire value sponsor, Willems notes. chain, from crop selection and sustainable ■■ The EBI has enabled young and farming all the way to conversion of established faculty from various crops to fuels. The EBI is governed by a disciplines to become recognised three-person directorate including two leaders in a new cross-disciplinary academics and a senior manager from BP. field and to start winning federal The Institute director is a professor in the grants for which they might not department of plant and microbial biology

20 have been competitive before EBI. 3. Build in progress reports to monitor the “For the university, this then brings direction and relevance of the research. more research dollars and more One major worry for both sides was recognition for faculty,” Willems the fact that academics had to report says. One example: Madhu Khanna, on ongoing progress to continue their a professor of agricultural economics funding every year – a review process at the University of Illinois, started which multi-year federal grants typically do applying her expertise to the field of not require. This could have been seen as lignocellulosic biofuels. She has since bureaucratic; but in fact, the review process won additional related DOE grants and helped accelerate the innovation process. been called to testify in Congress on Pathways that did not look promising often the subject. triggered new ideas. “It’s more a matter of redirection and allowing research to evolve LESSONS in a new direction in a real-time basis,” says Willems. “No one wants to work on a 1. Commit to a long-term partnership. dead-end project just because you wrote “A 10-year partnership is very important the proposal two years ago and you still because it puts everyone in a serious frame have one year to go. Typically, this kind of of mind about the collaboration,” says flexibility to change course is not there in Willems. “Company managers tend to do other partnerships.” one- or two-year partnerships, and it ends up getting five per cent of their attention. 4. To attract industry, universities must That’s like a hobby. You have occasional embrace multidisciplinary research interactions, but you don’t follow the BP took proposals from teams of collaboration closely.” universities around the world to ensure they covered all the capabilities needed for 2. Create time, space and freedom to the new institute. On the final cut, all five achieve your partnership’s goals. The contenders had world-class science, but creation of a new discipline and a separate the UC Berkeley consortium was the most EBI building allowed people to opt into it – enthusiastic about taking a multidisciplinary that was a key feature. “We didn’t have to approach. “That was a big differentiator,” show up somewhere on campus and make says Willems. a department do things differently. We had a new space and new people who were self- 5. Ensure company scientists and selecting for doing multidisciplinary work. researchers engage with the Institute on No one was forced to be in an EBI mode a daily basis. of working. This helped create a positive BP has several company scientists embedded atmosphere. The students still have deep in the EBI and some 50 researchers and departmental exposure through professors, managers that connect with the institute but everyone’s lab in EBI was next to people regularly. The EBI directors hold a formal doing all kinds of other things. You might be quarterly research committee meeting working on a biology aspect of a problem with BP business leadership to highlight while your neighbour is working on a what happened in the previous quarter chemistry aspect.” and what’s coming up. 21 6. Design a clear IP framework as part default/files/recommendations-reports/ of the master agreement. “A master tf_uip_report-final1.pdf) agreement should apply to everything that flows out of the partnership. Otherwise you CASE 4 lose a lot of time to sorting out the same issues over and over. Also, if you want to AUDI AG – BUILDING A bring in a partner institution – you just UNIVERSITY INSTITUTE TO FUEL point to the agreement and say, ‘take it or INNOVATION leave it.’ A framework agreement where you define non-exclusive and exclusivity Key interview: Peter Tropschuh, Head allows freedom for everyone. Some IP is of Scientific Relations and Corporate owned by university. Some is owned by BP Responsibility, AUDI AG and some by the co-inventors. Within its field BP has non-exclusive right for having In 2004, Audi proposed a deep and funded the research – that’s the default. strategic collaboration with the Technical For additional licensing fees, it can have University of Munich (TUM), through the exclusive rights.” establishment of a research institute near Audi headquarters in Ingolstadt that would 7. Universities are not well-suited for support over 100 PhD students working doing research that business immediately on technology and innovation issues vital needs. “The strength of universities is to Audi’s competitiveness. The company blue-sky discovery and proof-of-concept had recently set a goal of becoming the where it’s an early stage of innovation and world’s number 1 luxury auto brand, and there’s a lot of work to be done to bring was seeking new ways to enhance the a product to market. Universities can do company’s ability to innovate. exploratory research which companies cannot realistically do. When you need the The institute brings professors and students unbounded mindset and capability that a close to Audi’s researchers, streams university offers, it’s the right choice. If you innovative new ideas into the company and are too close to the marketplace, working is a vital pool of future talent. Audi invested with universities can be an unreliable in the infrastructure. The university created business proposition.” the possibility for faculty to work closely with Audi. The local government provided References: a site.

EBI website: http://www. The institute is managed by a strategic energybiosciencesinstitute.org steering committee which meets twice a year to define areas of research interest, Christopher Kutz et al., Report by the UC review progress, address problems and Berkeley Academic Senate Task Force discuss goals. Representatives of Audi’s on University-Industry Partnerships: executive board are on the steering Principles and Guidelines for Large- committee, including people with Scale Collaborations, July 2010 (http:// technology, production and human academic-senate.berkeley.edu/sites/ resources expertise. Two thirds of the 22 ideas for projects come from Audi and ■■ Highly successful recruitment channel. one third from the university. Each project Eighty per cent of candidates stay with has to have the potential to improve the the company following three years of company’s products or processes. work on their PhD. ■■ Successful replication. Audi has INNOVATION transplanted the university institute concept to China by including Tongji The Ingolstadt Institute of TU Munich University and to Hungary with the established a large-scale strategic Budapest University of Technology and relationship between university the University of Györ. researchers and Audi, designed for major impact on teaching and learning as well LESSONS as the company’s competitiveness. It extends beyond transactional research 1. Define a clear strategy and listen. projects to create a large competence Universities should listen to industry and centre focused on getting cutting-edge ask, what does it really need? technologies to Audi’s doorstep. Top faculty and 80 PhD students from TU 2. Meet and talk regularly. “We talk about Munich and 50 from other universities the good things and the bad things. The tackle research topics selected for their important thing is having this personal relevance to global competitiveness in the contact – seeing each other across the automotive sector: production systems, table. That’s one of the secrets to why quality control, engineering, software, the projects are running so well,” says man-machine interface technologies, Tropschuh. “Cooperations live through lightweight construction, new materials people. We want the chance to meet.” and aerodynamics.

RESULTS

■■ A steady flow of technology process innovations built into Audi cars and production lines. Current models incorporate advances in lightweight construction, suspension technologies electronics, man-machine interface software. Innovative management solutions adopted. ■■ Improved competitive edge. ■■ Strongly enhanced exchange of knowledge. A total of 130 PhD candidates are now working on technical research topics at the Ingolstadt Institute.

23 III PARTNERSHIPS THAT DEVELOP NEW FUNDING STREAMS FOR UNIVERSITIES Most industry-university partnerships generate income for the academic insti tuti ons involved, but some have done this on a much grander scale and in a nearly self-sustaining fashion. Each case described in this chapter evolved from a special set of interests, goals and strengths among the partners. The lessons highlight the commitment required on both sides to create and manage ambiti ous large-scale partnerships that provide signifi cant new funding streams to the university.

CASE 5 group has invested a total of £83 million, and its portf olio of 78 companies has raised IMPERIAL INNOVATIONS – TAKING investment of over £300 million. A TECHNOLOGY TRANSFER OFFICE PUBLIC Imperial Innovati ons has a technology pipeline agreement with Imperial College Key interview: Susan Searle, CEO, Imperial London that extends unti l 2020, under Innovati ons which it conti nues to act as the technology transfer offi ce for the university and has a What is now Imperial Innovati ons Group right to IP emerging from research. Investors PLC began in 1986 as the technology hence are wagering on the future of new transfer offi ce for Imperial College London technologies developed by the university, and became a wholly owned subsidiary and on Imperial Innovati on’s ability to of the university in 1997. In 2006, it was commercialise them. The group invests registered on the Alternati ve Investment in technology spin-outs in healthcare, Market of the London Stock Exchange energy, engineering and the environment, and raised £26 million in an initi al public and provides scienti st-entrepreneurs with off ering – one of the fi rst university TTOs investment as well as operati onal experti se to make the transiti on to listed company. and assistance recruiting high-calibre management teams. Imperial College’s grand experiment in handling technology transfer from In January 2011, Imperial Innovati ons raised a privately listed company so far has an additi onal £140 million (before issue produced a sizeable war chest for the costs), enabling it to accelerate investment university. Since 2005, Imperial Innovati ons acti vity, increase the size of its investments has raised approximately £206 million and broaden its investment remit to include (before issue costs) from investors. In the companies supported by its collaborati ons fi ve years following the IPO in 2006, the with Cambridge Enterprise, Oxford Spin-out Equity Management and UCL Business. 24 Imperial Innovati ons’ strategy following of investments and holding them the 2011 fundraising is to invest larger longer. amounts and maintain its involvement ■ Early successful investments include over a longer period of ti me to maximise the 2010 trade sale of RespiVert, exit values. The group focuses on six to a small-molecule drug discovery ten companies a year, ensuring they have company, which generated £9.5 strong boards and management teams and million of gross cash proceeds from are well capitalised. It seeks to create and an investment of £2 million; and Ceres seed three to four new companies a year. Power Holdings, a domesti c fuel cell manufacturer, which has so far realised INNOVATION £4.8 million from an investment of £0.65 million. In additi on, a £1.5 Imperial Innovati ons pioneered the noti on million investment in obesity drug of raising funds from the stock market to developer Thiakis has the potenti al, accelerate the commercialisati on of the subject to milestones, to return £16.1 deep pool of new technologies conti nually million, following its sale to Wyeth in being produced by a world-class research 2008 (now Pfi zer) for £99.4 million. university. A key att racti on for investors ■ Fundraising has enabled the group to is the close relati onship with Imperial increase the size of its investments College London through its shareholding and leverage them. In 2011, Imperial and commercial pipeline – but the company Innovati ons led a £40 million funding has gone beyond that to invest in other round for Nexeon, a batt ery materials companies. The Innovati ons story is unique and licensing company, investi ng £15 in taking a technology transfer operati on million alongside existi ng investor and adding an incubati on business and an Invesco Perpetual. investment arm. LESSONS RESULTS 1. Universiti es can develop signifi cant ■ At 31 July 2011, the group’s net assets funding from the investment community totaled £224.1 million (2010: £91.1 by rethinking the traditi onal TTO model. million). Imperial Innovati ons has Imperial Innovati ons has gone beyond generated £20 million in returns from the traditi onal TTO role in seeking to divestments to date. identi fy promising new technologies and ■ In the 2011 fiscal year, Imperial commercial opportuniti es for Imperial Innovations launched six new College London. In August 2011, for companies and invested £35.1 million example, the group’s investment team co- (2010: £14 million). The portf olio founded a spin-out based on research at companies raised £129 million in cash GlaxoSmithKline (GSK), aft er convincing GSK and investment commitments. The that University College London had deep group’s pre-tax profi t was £600,000, experti se in the same technology which down from £5.5 million in 2010, as its could support the new company. The spin- focus shift ed to building the portf olio out, Auti fony, is developing treatments for

25 hearing disorders together with University them. How do you help CEOs deliver?” says College London’s Ear Institute. Imperial Searle. “You’ve got to think about growing Innovations committed £5 million and holds a pool of industrial partners and sponsors a 33.6 per cent stake. “The original idea [for them]. and technology does not come from the university. But we believe the university “I hate the word ‘spin-out’ because it has more insights on how to progress those connotes something small,” says Searle. ideas,” says Imperial Innovations CEO Susan “We see seriously good companies Searle. “The benefit is that the university emerging. Circassia has raised £60 million gets a funding stream (from the start-up), – the third largest funding round for a and it gets access to interesting technology private European biotech company in 15 from which the science could progress. years. These companies can grow into “The old model where the academic comes future industrial employers. We think about up with an idea and you find a CEO does how to create value and build companies.” work. But it’s a very linear approach and Venture capital companies have a fixed restricts you to only one aspect of what the timescale for a return on investments, university can offer,” says Searle. “We’ve but Imperial Innovation’s structure allows tried to experiment more. We look at where the company to take time to build larger there is deep research competence, where companies. there are emerging gaps and what the market needs. It’s a different approach – 3. Industry-university collaboration works it’s a market-led approach that moves away best with big framework agreements from thinking of the university as just an based on broad principles. “Too often idea generator. We see the university as people view partnerships in black and a big source of expertise.” At the same white. You need to sit around the table and time, Imperial Innovations now looks across talk about the opportunity and what each four UK research universities to develop party brings. Each side has to be rewarded. the strongest research collaboration Get a working framework that everyone teams possible for its companies. Several signs. You need capable people who take a spin-offs based on research at Imperial sensible approach. People get too hung up College, including Plaxica and Circassia, are on ownership of IP instead of the outcome, now working with researchers at Oxford the incentives and rewards for all parties. University. “Different scientists are all trying Establish the broad principles and then as to understand the same mechanism,” says situations crop up, just decide how to deal Searle. with them. When it comes to negotiating IP, it’s all about being practical and pragmatic 2. To create large companies out of spin- – and not getting hung up on rules.“ offs, universities need to accompany them further. Once university spin-offs 4. Entrepreneurs-in-residence can help are officially incorporated, many TTOs a TTO scout more effectively. Imperial typically congratulate themselves on a job Innovations encourages partnerships well done. But the toughest challenges for that are more exploratory about market a newly formed start-up lie ahead. “The key opportunities and encourage researchers challenge is how to take spin-offs and scale 26 to apply their science to work on market TTOs can develop new funding streams problems. “We bring in teams to work by “turning the telescope around” and with scientists and we often provide them engaging with industry. “Identify the top with money,” said Searle. “We also retain 50 technology companies [in a region close entrepreneurs-in-residence for a year to to the university], sit down with each CEO find and build an opportunity to launch and ask what he or she needs to grow the a new business. Venture capitalists have company,” says Searle. “You’d get a lot of always used entrepreneurs in residence answers and requests. That’s really where or venture partners to source new you should be looking… The approach is to opportunities but they mostly work with look at companies and what we can do to existing companies. We said, ‘Let’s take make their life easier. The university piece entrepreneurs to look at what the scientists is part of that – technology companies need are working on.’ ” You put these people a relationship with universities.” together with academics and things come out of discussions. References:

5. Managing a publicly listed TTO requires Imperial Innovations website: http://www. huge resources and commitment from the imperialinnovations.co.uk university. Replicating Imperial Innovations’ achievement at another university would Imperial Innovations Annual Report: be “an enormous task” says Searle, who http://www.imperialinnovations.co.uk/ admits the approach may not transfer annualreport2011.pdf easily. “It’s a complex story and it has taken a long time to build the business… What we’ve done is quite unique – it took a lot of time, resources, and investment.” One of the biggest challenges is building a team with the right skills – including the blend of business development experience and scientific expertise to identify opportunities. “Today we are an early-stage investment business. We have an integrated technology transfer office creating opportunities and providing knowledge and insight on how best to work with a university.” At the same time, Searle says European TTOs have come up the learning curve and are more effective today. A number of successful approaches developed by Imperial Innovations, such as playing a more active role matching industry research interests with the university’s science, don’t require listing the TTO on a stock exchange.

27 IV PARTNERSHIPS THAT REINVENT THE ROLE OF THE RESEARCH UNIVERSITY IN THE KNOWLEDGE TRIANGLE A handful of pioneering universiti es and companies in the US forged novel, large-scale strategic partnerships in the 1990s. The following two cases, one a matching-grant programme and the second a multi disciplinary research insti tute, sought a step-change in ways of collaborati ng. Both projects were given top priority by the University of California and the State of California, and were aimed at helping transform the university culture and mission, intensifying its role in service to the economy through partnerships with industry that drive innovati on.

CASE 6 of research funding across UC’s nine campuses. UNIVERSITY OF CALIFORNIA’S INDUSTRY-UNIVERSITY The IUCRP’s matching grants, called the COOPERATIVE RESEARCH UC Discovery Grants, invested $20 million PROGRAM (IUCRP)– DEFINING A a year from the State of California and UC NEW ROLE FOR THE RESEARCH in faculty research projects on the conditi on UNIVERSITY that each grant was matched dollar for dollar with funds from a California R&D Key interview: Susanne Hutt ner, former fi rm. The IUCRP cast a wide net across Executi ve Director, IUCRP; former Associate fi ve fi elds of science and engineering. The Vice Provost for Research, Offi ce of the research proposals were similar to US NIH President or NSF investi gator-initi ated proposals and the work was early stage (basic through In 1996 the University of California (UC) proof of concept). All funded projects System launched an ambitious new supported student researchers. approach to collaborati ng with industry. Under its Industry-University Cooperati ve The grants bridged the gap between Research Program (IUCRP) it used matching the university research community and grants to catalyse hundreds of strategically California companies, advancing the focused partnerships, dramatically scienti fi c knowledge base, intensifying increasing the number of faculty, students the relevance of research and educati on and companies parti cipati ng in such joint programmes, and accelerating the collaborati ons. The approach promoted applicati on of new discoveries in the a new research and educati on paradigm, economy. and created an important new source

28 At the outset, the university and state appropriate and essenti al to the university aimed to do the following: mission,” says Hutt ner.

■ Expand industry access to the university RESULTS and increase discovery research that could form the foundati on for enti rely ■ A new and large funding stream for new technologies and products university research. From 1996 to ■ Leverage industry, state and federal 2007 the IUCRP brought in $450 million R&D investments in state and industry research funding ■ Build a diverse science-and-technology to hundreds of faculty laboratories in portf olio relevant across a broad array all nine UC campuses. The Discovery of R&D-intensive industries Grants supported more than 2,100 ■ Expose faculty and students to how research assistantships for graduate R&D is planned and managed in the students working for an average of 18 private sector months on a sponsored project. ■ Promote high-risk/high-impact ■ Companies drawn into earlier- research with rigorous quality controls stage research, with enhanced R&D ■ Create R&D leaders, develop a performance and job creati on. The highly skilled workforce, and expand investment risk for companies was technology transfer parti ally off set by state matching funds ■ Tackle major social problems including and the quality control provided by health, clean air, water, energy, faculty peer review of proposals and manufacturing and public safety. progress reports. Ninety six percent of companies responding to a survey INNOVATION reported that parti cipati on enabled them to undertake something they The IUCRP sought to create a large-scale could not do in-house due to, for transformati on in the way the university’s example, insufficient expertise, triparti te mission for educati on, research financial resources, or research and public service was pursued. It set infrastructure. These fi rms created fi ve out to rapidly increase the number and thousand net new jobs in California quality of collaborati ons between UC between their fi rst matching grant faculty, students and industry and to focus and 2003. those collaborati ons on strategic areas of ■ Joint research collaborati ons between research to benefi t the economy. At the faculty and companies that had same ti me, the IUCRP aimed to change never before worked together. In the university culture and create greater the fi rst seven years of operati on, the openness to innovati ng with industry by UC Discovery Grants engaged 353 building a wide and deep pool of academics companies in more than 595 research who were skilled at working in partnerships. partnerships. Some 40 per cent of “We aimed at making it very clear that companies sponsoring grants had working cooperati vely with companies not sponsored research at UC before on compelling research problems was engaging in an IUCRP matching grant,

29 according to those who responded challenges that might be addressed through to a UC survey of participants. About a joint effort with university researchers,” 36 per cent of UC researchers who said Huttner. “We explained to them that responded to the survey had not we are in it for the long haul.” That helped participated in industry-sponsored the university and industry partners agree research previously. on five broad fields and attracted strong ■■ Expanding circles of collaboration. company partners to begin to fund the Eighty-four per cent of UC researchers matching grants. As the matching grants said their experience encouraged them attracted top faculty, the IUCRP triggered to build research relationships with a growing dialogue within the university other companies. and with more companies. ■■ Enhanced survival rate of start- ups that formed partnerships with 2. Tackle the culture gap on campus – university researchers. Of the 51 create incentives and bridge the divide. sponsoring companies with 10 One of the best incentives for academics employees or fewer, 84 per cent were is a new opportunity for funding which still in operation at the time of the enhances their research goals and career. survey. These young firms reported “We identified the target-rich areas by doing that participation helped them raise cooperative planning between university capital, recruit key personnel and and industry communities. We came up accelerate R&D. with a strategic focus that was of mutual ■■ Enriched career paths of students. interest – defined by both communities. By Student experience in industry- talking about it, they started to learn about relevant research programmes each other,” Huttner says. “We also did the made them attractive recruits for usual sorts of things: we hosted faculty companies and some students started research events on campus and invited their own firms. The programme companies, participated in industry events seeded the future R&D leaders. and organisations, and shared databases and mailing lists. That all worked well. LESSONS We also hired staff with direct experience doing research in university and industry 1. It’s hard to get companies to invest settings, and gave them the job of looking long term. So communicate in their terms for partnership prospects and helping them while creating incentives grounded in develop UC Discovery Grant projects. The the university mission. Strong ties and matching grants were an opportunity for continual communication on key research those more entrepreneurial academics areas can convince industry to commit to to try something new. For other faculty, continual cycles of research investment. however, it was hard at first to explain that Set up an advisory board with top-level this wasn’t simply about bringing more industry executives and university research grants to the university to support more experts to determine priority targets for research, but that it was about enriching research. “We worked with the companies the context for research and making it more and asked them about the greatest R&D relevant and applicable in California – and,

30 in the process, educating people in fields Ongoing communications is essential. fundamentally important to the economy. Ensuring accountability while streamlining The most important factor in convincing administrative and financial requirements academics to enter into joint research is also essential. While most programmes programmes with industry was the opinion fail because the people running them of their peers – colleagues who had had don’t have the necessary knowledge and positive experiences introduced them to skills, the reason the IUCRP was successful the programme and gave them advice on is because we had enough people who how to work effectively with companies. had done it before and understood these There were, of course, countervailing forces things.” and disincentives inherent in university culture and traditions. An important one, 4. Leadership, vision and resolve are especially for young faculty, is the failure essential. Partnering with industry requires of the tenure and promotion process to a long, sustained commitment and focus. recognise and give credit for the additional University presidents face incredible effort invested in industry-university pressures on many fronts. If they do not cooperative research, invention licensing make industry collaboration top priority, and participation in entrepreneurial startup they will end up with series of incremental firms.” initiatives and short-term partnerships, and little or no evidence of substantial impact. 3. Select managers who can cross University leadership has to lay out a vision university-industry boundaries. Most for the institution’s role in innovation in partnerships don’t work well, according the 21st century. “It’s a revitalised view of to US National Science Foundation (NSF) the tripartite mission and not just about studies. They require institutions to teaching, research and public service. It’s do something they haven’t done in the about higher education’s growing role past. “It’s a management challenge,” says in fuelling the economy,” says Huttner. Huttner. “Most faculty gained experience “Institutional innovation to accomplish this in competing for and managing federal new mission is absolutely critical. research projects while they were in training, but they have not learned how to “We had very strong backing from develop and manage cooperative research University of California President Richard programmes. There is a gap in the needed Atkinson – that was so essential. If the understanding, experience and skills. university president hadn’t made this a priority in his strategic planning, speeches “You need to ensure that academics and and budgets, we would have run into a wall. industry researchers work together to The campuses would not have developed develop and meet agreed upon milestones the resolve to stand behind the goals and and timelines or to revise them in a timely address the challenges that evolved over way, as needed. Recognize that companies time…such as those associated with more will only co-fund research if it is relevant complex research grants, industry relations, to their priorities and goals, and those conflict of interest and technology transfer. priorities and goals can change over time. We also would have never gotten state

31 legislators to invest the additional money something new and potentially risky. Don’t in university research. They thought they start with exotic, all-new grant solicitation were already providing adequate funding. and administration mechanisms. Try to keep Atkinson kept telling the story – he pointed processes well grounded in experience and to Silicon Valley and San Diego, he brought proven effective mechanisms.” in companies – and then the Legislators and Governor came along, as well. Industry- 7. Use peer review to build in quality university partnerships became a State control. ‘Rigorous peer review offers the priority for building the economy.” business community a trusted stamp of quality control for the research programmes 5. Aim at a broad spectrum of outcomes. in which they co-invest. It increases the Build an active role for the university confidence of company decision-makers in serving economic growth, not just and, for young firms, impresses their commercialising IP. Measure outcomes prospective investors.” that reflect factors critical to industry competitiveness. “IP management is 8. Engage university leaders in the important to get right and it protects transformation. “Fostering champions interests – but it does not reflect industry- among university leaders is essential. As university relations in any robust sense. Too important is engaging them in widening often IP is seen asthe means for industry- networks of business and other leaders who university relations. Instead, engage the can help them develop the value proposition university more broadly in providing and explore how to build leadership and solutions for the economy. Companies want management for institutional change.” to know what’s next – not what’s already done. That’s where universities need to References: position themselves. Annual Report, Industry-University “In judging research partnership outcomes, Cooperative Research Program, University don’t ask how many jobs were created of California, Office of the President, 2003 or how many new businesses. Those are the wrong questions because research is CASE 7 incremental and impacts are difficult to KAROLINSKA INSTITUTET – tease out of company R&D programmes GOING FOR A UNIVERSITY-WIDE (which are complex and generally STRATEGY confidential). Consider, instead, the critical issues (of competitiveness) that Seventeen years ago, Karolinska Institutet companies have to grapple with every day. was like many European universities: Collaboration can’t be measured. It has to venerable, august and slow at driving new do with leadership skills and risk-taking.” technologies out of lab to market. The innovation revolution that occurred under 6. Build an administrative and funding Hans Wigzell, its radical former rector, framework that is familiar to faculty. provides a key lesson for other would-be “Remember that you are asking faculty to do reformers: the entire system must promote innovation.

32 Karolinska Institutet is a pillar of the floated on the stock market last year, raising Swedish establishment. For generations it €63 million in addition to some €140 million has trained the nation’s surgeons from its in private funds already raised. The funds privileged position in northern Stockholm. will ensure a portfolio of over 40 companies More famous for the prestige of awarding moves through the critical first two phases the Nobel prize for medicine rather than of product approval, creating a ‘product its best known invention – the pacemaker pipeline’ to quickly and efficiently groom – the university seemed unable to leverage spin-outs for sale to the pharmaceutical its strong assets. But a cultural change industry, which will return dividends spearheaded by Rector Hans Wigzell in the to Karolinska Development that can be 1990s has catapulted Karolinska Institutet reinvested. Karolinska Institutet researchers into the top leagues of Europe’s most (who under Swedish law, hold the patent) innovation-driven universities. It produces are encouraged to serve on the board a steady stream of spin-outs, new products of the spin-outs rather than be active in and entrepreneurial graduates. Key to the business team. In the words of CEO Wigzell’s success was the introduction Torbjorn Bjerke, this means that both sides of new management and a system-wide can “focus on doing what they do best”. It approach to fostering innovation. provides an incentive for researchers to innovate without requiring them to become Karolinska Institutet’s innovation system entrepreneurs. has four main elements: the Innovation Office, Karolinska Institutet Innovation, 3. Go for excellence. Karolinska had a key Karolinska Development and the Unit for advantage in appealing to industry in an Bioentrepreneurship. innovation tandem – it is one of the best medical schools in Europe. That has made LESSONS it easier to attract funds.

1. Build commercial competence into the 4. Encourage and leverage ties to local university governance system. Karolinska industry. Karolinska Institutet has benefited Institutet Innovation was set up to from deep ties to the successful and promote commercial-minded research close-knit Swedish biomedical industry. and partnership with businesses. For Bo- Karolinska Development was able to draw Ragnar Tolf, its director, this broad remit on a group of investors willing to provide can extend from evangelising among seed capital with long-term commitments colleagues to matchmaking companies – a reflection of the trust engendered by with researchers. When researchers think long collaboration. they have a market-ripe innovation, the next step is to consult Karolinska Institutet 5. Embed students in industry. The Innovation, which offers advice and project Masters in Bio-Entrepreneurship (or management at this early stage. MBE) at Karolinska Institutet is an MBA programme designed to appeal to science 2. Raise funds for spin-offs. Karolinska graduates who prefer a business suit to Development, the university’s spin-out arm, a lab coat and is focused specifically on

33 the biopharmaceutical sector, training supervisor less. Incorporating a spell in people for pharma industry jobs and business as a key part of the curriculum biotech start-ups. Its founder, Carl Johan is becoming ever more common in MBA Sundberg, describes it as a “tailored programmes around the world. What programme on how to make practical use” distinguishes the MBE is that it is tailored of these students’ scientific background to science students who want to work in in the commercial side of the life sciences the bio-medical industry. The importance industry. The programme’s key innovation of placements to the programme is inspired is extensive embedding of students in by the ‘Team Masters Project’ at the Keck companies and businesspeople in the Graduate Institute in California, which curriculum. Industry executives are invited was first started in the late 1980s and is throughout the two-year programme to now widely respected by students and teach, advise and host students. This businesses. Sundberg intends to increase collaboration starts in the classroom, where the number of companies that are ‘repeat businesspeople deliver guest lectures on customers’. the nuts and bolts of the business: on market analysis, or business development. CASE 8

The programme goes beyond textbooks CALIFORNIA INSTITUTE FOR and gives students a toolbox of practical TELECOMMUNICATIONS AND skills. To this end, small teams of students INFORMATION TECHNOLOGY take part in three internships at various (CALIT2): A PARTNERSHIP TO companies in the Life Sciences industry. For SHAPE THE “UNIVERSITY OF THE example, Erika Bulger spent six weeks at FUTURE” AND SPARK ONGOING IMS Health working on an internal report on INNOVATION the restructuring of the Swedish healthcare system. Now at a German biomedical Key interview: Larry Smarr, director of consulting firm, she says that this practical California Institute for Telecommunications experience helped complement the theory and Information Technology (Calit2), she learnt in class, “bridging the gap” University of California, San Diego between her training as a scientist and the commercial reality. The MBE offers In 1999, the State of California was sitting on students practical skills that make them a financial surplus, courtesy of the Internet more employable, and a set of personal bubble. Governor Gray Davis wanted to put industry contacts. Companies get a project the money to work in a way that would done that they wouldn’t have time to do support innovation and the California themselves, and access to new talent. Hans economy. He suggested a partnership Andreasson of SLS Invest noted that small involving the state, the 10-campus businesses have little coaching capacity, University of California and industry that so students must work independently. The would boost cooperation among the programme is designed to encourage this parties, increase the benefits to society of independence through team internships the public university system and “make a where students tend to solve problems down payment on California’s future,” as among themselves and contact their Davis noted at Calit2’s 10th anniversary 34 celebration in 2010. The president of the Calit2 as a platform to launch public- University of California at the time, Richard private partnerships. It [innovation] doesn’t Atkinson, said the proposal could create come because of an individual professor the “university of the future”. or individual department or an individual school. Calit2 has 1,000 researchers from 24 “He wanted to do something with that departments between the two campuses money that would keep on giving to and 170 staff. We are set up to handle innovation and the California economy,” things [on a large] scale.” Undergraduates said Larry Smarr, director of Calit2. The ten also have access to the multidisciplinary campuses have faculty who are among the activities. best in the world, he said. “But they didn’t have an institution to provide consistent KEY INNOVATION support for cross-disciplinary work and that engaged industry more naturally with The multi-stakeholder partnership allows the university.” Calit2 to cast a broad net and take on large, multinational partnerships, while The following year, Calit2 was formed as at the same time focusing on individual one of four new research initiatives created students or companies. It also has technical by the State of California, the University professionals with industry expertise who of California and industry. At the core of return to academia, and who can lend Calit2 are the University of California’s expertise for as little as a few months on San Diego and Irvine campuses, located a specific project, then go on to another an hour’s drive from each other. The state project. Companies have access to both legislature agreed to provide $100 million professors and the technical professionals. in capital construction funds for each of the four institutes. The state mandated that for “A key innovation is providing this persistent each $1 it contributed, the institute had brainwork across two campuses in to raise $2 of industry and federal funds. disciplines ranging from engineering to Now, a decade later, the Calit2 initiative arts,” Smarr said. “It is an institutional has a faculty of 600 from fields as diverse structure that very few places have.” as telecommunications, nanotechnology, digital cinema, art and environmental Despite its large structure, Calit2 has monitoring, along with some 300 industry stayed nimble enough to adapt to changes. partners spanning the globe. While its initial funding came from a dot- com surplus, companies subsequently To Smarr, the scale of the application areas downsized. As Smarr explains, “We got and underlying technologies under one organisational pledges from industry just roof, as well as an institutional structure before the market bust, and then we went that exists in very few other places, caused out to collect the money as the NASDAQ what he called a “cultural revolution” fell from 5200 to 1200. Companies actually among researchers. “We drive cultural disappeared during the time they pledged change and a set of services the campus the money. So we had to work with our didn’t have before,” he said. “We have industrial partners to figure out how to keep

35 their interest in university research while foster multidisciplinary studies they were undergoing a life-and-death ■■ More than 25 spin-outs launched from struggle in their own company.” Calit2 had the university research to reaffirm commitments one by one. “We ■■ Establishment of the first nanotech don’t have gold, silver, or bronze status with cleanroom facility on campus and fixed contribution amounts,” Smarr said. in San Diego. It is shared with more “We worked with the companies, stretching than 60 companies, which pay hourly payments, reexamining agreements. fees to use it or to receive training Most companies stuck with us. It really on use of the equipment. Revenue was a partnership.” The longevity of the has grown 25 percent compounded founding partnerships and new projects annually. As Smarr explains, companies are a barometer of success. are outsourcing everything that is not in their core competency. Companies join the partnership to get ■■ More than $100 million in funding access to university research, perform from over 300 industrial partners research they cannot do themselves, and since 2000, according to the Harvard to have their technology showcased in study, plus federal research funding of university research projects. According to more than $600 million for 570 federal a Harvard Business School case study on grants Calit2 published last year, the president ■■ Calit2 has helped researchers win of AT&T, in his supporting letter for nearly 1,000 federal, state, not-for- the institute, wrote: “Calit2 provides a profit, industrial and international platform for components manufacturers, grants to date. “That is unbelievable,” software innovators, device makers, and Smarr said. telecommunications providers to work together creatively on issues such as LESSONS availability, quality of service, seamless operations between wired and wireless 1. Treat companies as individuals and devices, and policy issues such as as partners. This approach can keep privacy.” The study also quoted Henry partners with short-term financial hiccups Samueli, founder of networking products investing long term, and build trust in the manufacturer Broadcom, as saying: relationship. “As industry has become increasingly competitive, companies need to focus on 2. Make sure everyone understands near-term innovation that can be brought intellectual property. Calit2 is part of the to market within five years. We have come University of California, which has explicit IP to rely on universities for longer-term rules. “We make sure the company knows research. That is the sweet spot of Calit2.” our rules. To engage with us they have to abide by those rules,” Smarr said. “They RESULTS complain a lot about the rules, but we work with them and we have never lost a ■■ Development of horizontal links partner due to those rules. My advice to among university departments to them: choose how you interact with us so

36 the outcome is what you want.” the US Navy was interested in using a 4K camera on blimps for surveillance and 3. Know your partner’s needs. Companies streaming the resulting video. don’t like projects that do not generate internal support in their company, Smarr Calit2 is now working on managing global said. “In sponsored research we put digital workflow. Said Smarr: “None of technical professionals and professors these companies [partners], including the in a room with companies till they agree studios, have a global optical network in both sides will get something out of a place to support workflow in this digital project. Then they come out and bring it world.” They now plan to create a public- to management.” He said such a bottom-up private partnership to look at IP workflow approach to projects works better than a on the Global Lambda Integrated Facility, top-down one. which connects Calit2 with innovation centers worldwide. “This is a causing radical 4. Look for research results to keep on rethinking of how to distribute work in the giving. For example, CineGrid is one of the film industry.” first major research collaborations at the UC San Diego division of Calit2. The five- References: year-old project focuses on next-generation 4K digital video that has four times the Calit2 Web site: http://calit2.net resolution of today’s HD video. All major Hollywood studios are part of the project, «Calit2: A UC San Diego, UC Irvine which essentially will allow for a global 24- Partnership,» by Linda A. Hill, Alison Berkley hour digital movie production schedule. “It Wagonfeld. Source: Harvard Business costs $1 million a day to make a movie,” School 38 pages. Publication date: Jun Smarr said. “Bits follow the sun around the 08, 2011. Prod. #: 411105-PDF-ENG world, so it lets your day be 24-hours long.” The movie Avatar, for example, used 800 computer graphics specialists all over the world. The Netherlands CineGrid group in Amsterdam streamed a live opera with 4K resolution at 0.5 gigabits per second from the Holland Festival 2007 to San Diego, the first successful demonstration of trans-Atlantic streaming over photonic IP networks of 4K digital motion pictures and 5.1 surround sound. “Once we had debugged how to stream the digital, high- resolution video of the remote opera to Calit2, we experimented with how this could be interesting to science, such as streaming visualisations of supercomputer simulations of tornadoes. Another example:

37 V PARTNERSHIPS THAT GO STRATEGIC

Strategic partnerships have to start somewhere. And they usually begin small and decidedly non-strategic. Of course, how can you tell whether your deal has the potenti al to go strategic, or wither and die? Therein lies the skill of the managers.

CASE 9 exploratory research to applied projects, as well as generati ng knowledge about the IBM-ETH ZURICH scienti fi c foundati ons of nanoscale devices at the atomic level. Key interview: Matt hias Kaiserswerth, Director and Vice President, IBM Research, Zurich LESSONS 1. Set up broad framework contracts. Decades of research collaboration Relationships between the two between ETH Zurich and IBM led to the organisations developed considerably creati on in 2011 of the $90 million Binnig during the negoti ati ons over the new and Rohrer Nanotechnology Center, centre. For example, they took the the centrepiece of a 10-year strategic opportunity to create a set of framework partnership in nanoscience between contracts for joint projects. “It makes it very IBM and ETH Zurich where scienti sts will easy for our researchers to meet with their research novel nanoscale structures and counterparts at ETH to negoti ate. They can devices to advance energy and informati on just pull out a template. We don’t spend technologies. The new centre is, according any more ti me with lawyers negoti ati ng,” to IBM, the fi rst ti me that industry and says Kaiserswerth. It helps, he adds, that academia have created shared research ETH has a realisti c understanding of the faciliti es in Switzerland. value of intellectual property rights. “ETH accepts that industry is in a bett er positi on The IBM-ETH Zurich nanotechnology centre to get value out of patents.” is a state-of-the-art facility for exploratory research and is not a producti on or pilot 2. Devote time and leadership to line with fi xed processes or wafer sizes. partnerships. It takes work and leadership One goal of the partnership is to att ract and from the top to create and maintain good foster top nanotechnology talent in Europe relati onships between companies and by investi ng in leading-edge exploratory universiti es. Kaiserswerth says that IBM research. Scienti sts and engineers from and ETH have forged much stronger links IBM and ETH Zurich will pursue joint over the past decade, thanks to both sides and independent projects ranging from putti ng more eff ort into the partnership. 38 Kaiserswerth credits the presidents of ETH aspects of computi ng. For example, the with leading the way on the university’s Aquasar project studies “green computi ng”. side. IBM, ETH Zurich and other partners built a new type of supercomputer cooled by hot 3. Long-term partnerships generate the water. The heat from the computer heats largest benefi t. The 10-year research buildings at ETH. partnership underpinning the Binnig and Rohrer Nanotechnology Center crowns 4. Take a win-win approach to partnerships. decades of collaborati on between IBM and Both sides benefi ted greatly from the ability ETH. IBM fi rst set up a research laboratory of ETH to join in the project. The university’s in Switzerland in 1956 and the company involvement and its ability to share the cites the presence of ETH Zurich and costs made it easier for Kaiserswerth to other universiti es as a reason for choosing sell the idea of the new laboratory to IBM. Rüschlikon on Lake Zurich in 1962 as the Because IBM has land already earmarked home of its European Research Centre. for expansion at the Rüschlikon research Swiss physicist and Nobel prizewinner centre, it could design and build the new Heinrich Rohrer studied at ETH Zurich facility much more quickly and cheaply than before eventually joining the IBM Research if ETH had tried to go it alone. Lab in Zurich. “The opportunity to see each other regularly is very helpful,” says 5. Long-term partnerships are the ideal Kaiserswerth. platf orm for impact on teaching and learning. There is a constant fl ow of people The nanotechnology centre is named between the company and the university. aft er two IBM researchers who received IBM managers teach at ETH, while students the Nobel Prize for inventi ng the scanning from the university work on projects in the tunnelling microscope at the IBM Zurich company’s laboratory. “They get to give Research Lab in 1981. In 2001, IBM and their students a good idea of what it is like ETH Zurich opened the Center for Advanced to work with industry,” says Kaiserswerth. Silicon Electronics. In 2003, along with Credit Suisse, they formed the Zurich CASE 10 Informati on Security Center. Scienti sts and engineers from IBM and ETH Zurich work SKF GROUP-UNIVERSITY OF together in the centre and on their own CAMBRIDGE projects. Three ETH professors and their Key interview: Alan Begg, Senior Vice teams have moved into the new building President, Group Technology Development, and will conduct part of their research in SKF Group nanoscience on a permanent basis. The building cost $60 million with $30 million for Swedish multi nati onal SKF Group has tooling and equipment which, along with developed five university technology operati ng costs, are shared by the partners. centres since 2008 as part of a move towards Together they employ staff and share the highly strategic, long-term collaborati ons costs of some of the key equipment. IBM on core technologies. The centres are and ETH also work together on various modelled on a concept pioneered by

39 Rolls Royce in the 1980s, which focused Other SKF university technology centres on strategic alliances with universities as are located at Imperial College London, opposed to a plethora of ad hoc research Chalmers University of Technology and projects. Begg, who heard first-hand about Tsinghua University in China. They focus on the programme’s success from Rolls Royce friction, wear and lubrication, sustainability executives, was intrigued by the notion of management, sensorisation and condition building more productive alliances with monitoring and polymeric materials. university partners. “We had hundreds of relationships with universities but not LESSONS much focus,” says Begg, who launched the university technology centre programme 1. Companies who develop strategic at SKF. relationships with universities may deepen research ties through their university Building on a long, successful research work and decide to innovate together. relationship with the University of Both SKF and Rolls Royce have set up Cambridge, in 2009 SKF established a separate strategic research partnerships University Technology Centre based in with Cambridge focused on materials the university’s materials science and research – and that is bringing them closer metallurgy department. Professor Harry together. “SKF’s relationship with Rolls Bhadeshia, a world expert in the physical Royce has been transformed in the last metallurgy of steels, leads the research. four to five years partly because of our university relationship with Imperial. We’re Under the terms of the partnership, the moving from a standard customer-supplier University of Cambridge is conducting relationship to much more of a partnership both pure and applied research, with SKF with Rolls Royce. Their interest and desire providing funding, technical expertise and to work closer with us is driven in large practical knowledge. Together, the two part by what’s developing at Cambridge organisations have the goal of advancing in our materials science research. SKF has the knowledge of the physical metallurgy a team of seven people there, and Rolls of bearing steels, and to use it to drive the Royce (which has its own technology centre development of new and improved bearing at Cambridge doing materials research) products. employs a PhD alongside us.”

Researchers at the SKF University 2. Be selective: Develop strategic Technology Centre are concentrating their partnerships. “It’s got to be based on efforts on ways to manage the detailed a kind of complementary relationship microstructure of steel, to enhance where companies go to university to do its bearing properties. They are also something they can’t do themselves,” says investigating ways in which modifications to Begg. “Many companies are seek to harness the composition of steel can enable complex universities as a cheap source of research – operational demands to be optimised, I’ve done it myself – and it’s disappointing. while predicting material performance Academics are not employees and don’t relative to the steel production and heat always do what you want them to do. treatment processes. 40 “Companies should engage universities Studies Centre at Imperial College and co- because [they] want their ability, creativity founded Design London. and their different mindset on the world. That’s the approach to having a very LESSONS successful relationship. This is true with our engagements at Cambridge and Imperial.” 1. Understand the different types of partnerships. Nine years ago when Gann 3. Encourage a two-way exchange. “Our moved to Imperial College London from relationship with Imperial is unique. Our the University of Sussex, a requirement former chief scientist, Stathis Ioannides, for funding his work was collaborative worked for us for 30 years. During at partnerships with industry. “We established least 20 of those years he was a visiting a very good advisory board which included professor at Imperial. He retired about several captains of industry. They said we three years ago but still works actively for couldn’t partner with everyone, and that us as consultant and supports our research we had to make strategic choices. They at Imperial. Ioannides has been important also made clear that different kinds of for us in driving the collaborative work partnerships are beneficial in different we did over the years with Imperial. He ways. supervised our projects there. In any university relationship it’s important to get “We put in place three-tiered relations: the coordination working well – someone Strategic, operational, and transactional. who understands both sides. You get out They are all important with us. We have of a university relationship very much what seven to eight strategic partners – that put into it.” means they influence research and the results influence the company’s strategy. CASE 11 Operational partnerships involve a research IBM-IMPERIAL COLLEGE LONDON project with a division or particular R&D lab and can run for several years. For this Key Interview: David Gann, head of kind of alliance, professors don’t need Innovation and entrepreneurship and to know the heads of the company. (His Deputy Principal for Research and Business group has 100 operational partnerships.) Engagement, Imperial College London. Transactional alliances include short- term collaborations such as an executive Gann is in charge of Imperial College’s teaching a course, joint events or a student strategic relationship with IBM, working doing a stint in a company. We have a few closely with them in the Digital Economy thousand companies working with us in Lab – tackling cross-faculty research on this mode. systems and services innovation for the digital economy. He also leads a large 2. Don’t overlook the benefits of non- portfolio of research in collaboration with strategic partnerships – they can grow firms in design, manufacturing, engineering, and develop into strategic partnerships construction, ICT services and healthcare over time. Imperial College and IBM industries. He directs the EPSRC Innovation worked together for some 20 years on

41 operational projects before the alliance 3. Academics driving the partnership need became strategic. “It was five years ago regular access to top management. To that we decided to create a college-wide be a good strategic partner for industry, strategic partnership,” says Gann. “We took you must ensure academic leaders have time to get to know IBM. One of their chief good relationships with people on the technology officers is an Imperial alumnus. company’s main executive board. You need He’s grown in seniority and is now president a relationship that is senior enough to allow of the IBM Academy – the most senior strategic issues to emerge and to be dealt group of IBM scientists and technologists. with so that research and teaching have We decided to create a partnership and set sufficient resources. “Secondments are very up an executive team. I’m the partnership important – in both directions,” says Gann. executive for Imperial College – and we “Universities should use adjunct professors have other faculty representing academic from industry. We’ve learned a lot about work across the College. The IBM team how these relationships work. You have to includes counterpart experts from work at crossing the cultural chasm.” different sides of its business. We meet every two months to develop and manage 4. Select a handful of strategic partners. the relationship. The executive team has Strategic partnerships are time consuming. enabled us to deepen our relationship. We Professors can only have a small number have a memorandum of understanding to of meaningful relationships with company work in certain fields and a joint agenda. It board members. covers topics from deep research in science to business models in the Business School 5. Choose the right people. “It all boils and executive education programs. down to interpersonal relationships, trust and appreciating the difference between “The relationship has deepened over the what universities do and what companies years. I work with some of the senior do. You can maintain different cultures executives in North America as well as the while being prepared to work together. If former chairman of IBM Europe, who now universities try to become too corporate chairs our Digital Economy Lab advisory they may lose the very essence that board. So there is strong engagement at companies come for in the first place. Good all levels. We enjoy a vibrant and deep relationships result in positive outcomes relationship. We produce an annual report from the creative abrasion that exists by on the relationship and explain how it’s bringing two different worlds together. If moving forward. It’s managed as a proper you do that, you can grow together.” partnership. CASE 12 “We’ve got arrangements like that with GE GLOBAL RESEARCH, MUNICH several other companies. It’s important Key Interview: Carlos Härtel, Managing not to just let alliances evolve unattended, Director, GE Global Research, Europe but to manage them in a way that allows both partners to gain the most from the GE Global Research in Munich, Germany collaboration.” is one of five worldwide research centres

42 set up by the US multinational. It acts as or tying in experienced university experts an R&D service provider to the company’s as consultants. business units, focusing on longer-term and higher-risk research projects likely to have 3. Choose the right people, define an market impact in five to 10 years. At the objective. Many partnerships falter due corporate level, it helps top management to poor leadership. “I’m always skeptical understand new technologies and their – companies often seem to send money market potential. GE Global Research, to universities or government labs hoping Europe, has a strong partnership with the that research done by smart people is Technical University of Munich. automatically going to produce something of use… It takes spotting the right people LESSONS – that is key – you have to have people who have the right attitude and share the 1. Corporate research labs are a good same objective. Even if it’s more open- bridge to industry. “Corporate research ended research, the partnership should centres like ours are much better at bridging start from clearly agreed deliverables. to the academic world,” says Härtel. “We are You need to define together what success the ones who come closest to the academic means, and how you will go about achieving mindset… Our job is to demonstrate it. Partnerships can’t be based on an idea feasibility of advanced technologies, be that just sounds interesting. That is recipe it in manufacturing of composites, image for failure. If both parties agree on specific processing, turbine aerodynamics or any objectives and speak the same language, other field relevant to GE. And by staying I bet the collaboration is going to be in touch with universities, we ensure we’ve successful.” got the line of sight to the latest scientific discoveries.” 4. It’s about collaboration rather than sponsorship. That means people have 2. Build trust. Härtel takes time to get to to get along very well – and spend time know university researchers and work together. Proximity matters a great deal in with them on smaller projects before R&D and innovation. “I do not recommend engaging in large-scale collaborations. GE partnerships with universities where people Global Research is funded by its internal are hundreds or thousands of miles away,” business customers, so partnerships with says Härtel. “The close way we interact universities have to be paid by regular with TU Munich would not be possible with project budgets. “Before our business unit universities in Hamburg, Berlin or other customers trust us to collaborate on their remote places because we can’t just walk work with a partner university, we have over for an afternoon to sit and discuss to build credibility. GE Global Research results. You have to spend a significant and TU Munich built that trust by doing amount of time together to make it work smaller programmes and showing they well.” could deliver results together.” Starter projects might include sharing a lab or 5. Promote cross-disciplinary work. equipment, thesis projects for students Members of GE Global Research projects

43 are evaluated on the success of an overall Research Board. (Achatz moved on 1 April project – not only on their individual 2012 to ThyssenKrupp as head of Corporate contribution. If team members don’t deliver Center Technology, Innovation & Quality) together what they committed, “no one gets rewarded, so they have an incentive Like many technology multinationals, to collaborate across disciplines. That’s Siemens has shifted to long-term strategic very different than university culture. partnerships with a handful of universities Incentive schemes in university research to foster an intensive transfer of knowledge. are not conducive to collaboration. That’s The move is away from “a large number of why academics often live in departmental not very structured relationships,” Achatz silos and rarely talk to each other.” said. Siemens chooses its key university partners based on topics of strategic 6. Don’t let IP be a stumbling block. “IP is value to the company. It currently has important, no doubt. But its role shouldn’t eight such partnerships – four in Europe, be overemphasised in industry-university two in China and two in the US. The relations, says Härtel. “Companies can be company seeks universities with an “open overly concerned they will lose control over culture.” With the Technical University of critical know-how; and some universities Berlin, the company works on innovations seem to have unrealistic expectations as related to energy-efficient cities. At MIT, to how much licensing income can be the partnering focuses on health care and generated from patents. We do have patents medical technologies, and at the Technical that came out of our university programs, University of Munich, the focus is electric but the true value of collaborative R&D is in mobility and optimising ICT embedded accessing and leveraging tacit knowledge. systems. “Some of the best known universities have such restrictive IP terms that we simply The results of partnering range from the cannot work with them. If IP protection creation of basic knowledge that will feed goes to the extreme on either side, trust and into the development of future products, a productive relationship are hard to build. to innovations in existing products, A few years back, European industrial R&D highlighting the evolution towards open association EIRMA published guidelines for innovation. As part of a Siemens-MIT responsible partnering between companies collaboration in the area of brain research, and academia. It’s a great baseline from for example, Siemens provides MIT with which to start discussions. the prototype of the latest magnetic resonance imaging technology to use in CASE 13 research, which then helps MIT researchers advance the base of knowledge about brain SIEMENS-TU BERLIN, MIT function. “We don’t see this as product development, we see it as partnering in Key interview: Reinhold E. Achatz, former basic research or in some cases applied head of Siemens AG Corporate Research research,” says Achatz. Ultimately, the work and Technologies (2006-2012), former leads to an improvement in devices and a member of the Siemens Innovation Steering better understanding of the human body. Committee, member of the European Area

44 “It’s a lot of knowhow and knowledge and 3. Make sure university technology eventually a number of publications which transfer organizations don’t hinder create tangible value.” strategic partnerships with industry. The most difficult thing about partnering often Achatz notes that university collaboration is is the start, including negotiations with the vital to companies working on technologies legal and technology transfer organization. that are part of a paradigm shift. Company “They have their own special focus and research departments may have a harder are less flexible,” says Achatz. “They want time driving innovation in new technologies to market their own ideas and sometimes if they must displace existing ones that are that does not allow a win-win partnership successfully established in the market. In structure.” Use framework agreement for universities, we find that people are more IP to avert the need for ongoing contract open,” says Achatz. Together with the negotiations. Addendums can adapt the TU Munich, for example, Siemens began agreement to special circumstances. two years ago working to develop a new Universities should not overestimate the architecture for electric cars that is simpler opportunity of making money from patents. and cheaper than that of today’s electric This happens once in the lifetime of big cars. “In the future, everything can be organizations and is hard to predict. IP is a made simpler with a new structure,” says critical topic, but it’s totally overestimated Achatz, adding the likely market arrival of by universities. It’s less important for such a vehicle is still 10 years away. universities than for companies. We use it to protect our products and solutions. LESSONS 4. Collaboration on teaching soft skills can 1. Identify a win-win situation. Start accelerate innovation. We do not have by understanding the objectives of the enough managers who understand both IT university and the needs of the company. and the business aspects of international This works with US, Asian and European collaboration. We are now training PhD universities. students in soft managerial skills, working in a global organisation, teamwork skills 2. Establish strong structures to cooperate and entrepreneurial skills. with universities.The right structures help nurture successful partnerships. For its strategic partnerships with academia, Siemens places a Center of Knowledge Interchange (CKI) as a single point of contact on each campus to manage the projects and the relationship with researchers. “It’s a person or a small group of people that create the link between the university and the company. Both universities and companies are complex systems. You need someone who understands both.”

45 CASE 14 systems or standards that will hit the market a few years from now complements NOKIA-AALTO Nokia’s in-house R&D. “It’s typically on the leading edge and would be too risky for us UNIVERSITY, UC to pursue. It can include new, disruptive BERKELEY business ideas.”

Key interview: Hannu Kauppinen, acting RESULTS head, Nokia Research Center Nokia partnered with UC Berkeley’s University collaboration is vital to Nokia’s department of traffic engineering in research efforts and competitiveness, research focused on enabling improved particularly as it seeks to transform itself traffic circulation. The project, called from a product company to one focused “Traffic Works,” collected the data of people increasingly on services. The company’s driving with GPS systems to access traffic current focus is strategic collaborations patterns and predict traffic jams in real in energy efficiency, communications time. The GPS data is much more accurate technology and location-based services. than sensors, which have been used up They are exploring technologies that may to now, says Kauppinen. Nokia used the impact the market in three to five years. research to launch a traffic data service offering to mobile phone users. Nokia has a long-running collaboration with Aalto University in wireless technologies LESSONS and multimedia technology research. The company has two teams working in 1. Company and university leaders must university labs, and Aalto researchers also understand each other. Partnerships start work at Nokia’s Research Center. “Aalto with people. Universities have to listen to has over the years developed world-class companies because they are the customer competence building wireless systems from and they are spending either a lot of money components to managing the networks or time on the collaboration. The trick to themselves,” says Kauppinen. “It’s been a getting this right is to have the right kind very tight relationship resulting in a high of people on both sides. number of patents, publications and people Partnerships that have not worked well flowing to Nokia.” for Nokia are those where it “poured a lot of money in the form of a grant or direct Finland’s national technology funding funding and the university did not listen to programme, administered by an us. The results were not meaningful for the organisation called Tekes, helped enable company and we have stopped that kind the partnership. It allows companies to of work,” says Kauppinen. apply for research funds that are channeled to universities and SMEs. “It’s a tight and 2. Cross-disciplinary research capacity is fruitful collaboration. Aalto has excellent key. UC Berkeley is a very good example competence and high-quality research,” of a university where people mix across says Kauppinen. Work focused on new

46 different disciplines of technology and science – from engineering and physics to computer science and business. The model comes from North America’s top schools. The University of Cambridge and the Swiss Federal Institute of Technology in Lausanne are also good examples of universities with a strong cross-disciplinary approach.

3. Make sure IPR is not a stumbling block. “Wherever we fund research, we have to make sure IPR is not a big obstacle to the collaboration,” says Kauppinen. “We pay for the competence-building and being part of the network.”

47 VI RECOMMENDATIONS

Innovati on does not happen in a vacuum: A context – the economy, society and policy – shape how easy or hard it is innovate. Policymakers set that context. Throughout our interviews, the role of government was ‘the elephant in the room’. No professional R&D manager, on either side of the university/ industry divide, were in any doubt that politi cians are important. And while their opinions diff ered on some points, on at least a few key issues a clear message emerged.

1. KEEP THE SHIP STEADY

Long-term, strategic partnerships of the kind illustrated in this report require correspondingly long-term, strategic policy. An on-again, off -again, crisis-driven approach to economics or regulati on merely rewards short-term tacti cs, from companies or universiti es.

This is especially so with budgets: Examples are rife of sharp run-ups or run-downs in public research funding that cause turmoil and some damage to a country’s science and technology base. A prime example is the famous “NIH Cliff ”, when a near-doubling in US government funding for the Nati onal Insti tutes of Health during the late 1990s and early 2000s induced many universiti es and companies to expand their biomedical research – and then even more rapidly, as budget austerity bit, to stamp on the brakes. Many new labs were shutt ered, and young research careers were derailed – and that was the consequence merely of a few years of unexpectedly fl at federal budgets, rather than any deep cut. In Europe, similar funding uncertainti es have slowed the progress of alternati ve energy research – promised in the EU’s Strategic Energy Technologies Plan, but not delivered by the member states in their annual budgets.

But the need for stability goes beyond budgets. By defi niti on, the potenti al impact of new technologies is unpredictable; there’s a natural human tendency to over- or under- react. But frequent changes in the regulatory environment for such nascent fi elds as nanotechnology, geneti c engineering or “unconventi onal” gas technologies discourage industry from investi ng, and starve the very research partnerships that could answer the regulators’ questi ons.

2. GIVE UNIVERSITIES AUTONOMY TO FORM PARTNERSHIPS

The Innovati on Board has stated this before, and repeats it here: The best people to

48 decide a university’s strategy are those directly responsible for its success - its board and its faculty heads. In an educati onal marketplace, each actor must have a certain freedom of acti on to react quickly to demand, problems and opportuniti es. They cannot forever be second-guessed by an educati on ministry, or have their budgets set – down to the line item – by a research or defence ministry. The best European universiti es already operate with a fair degree of autonomy from politi cal control. More should do so.

Several corollaries follow from this – and they should be encouraged, or at least not discouraged, in nati onal law. University boards should be diverse, open and have real governance powers – including over budget. They should be free to set the university’s strategy, and set employment and admission policies. And they must be held accountable for their decisions. They should, in consultati on with stakeholders in government, industry, the local community, staff and students, specify a set of performance metrics by which they will be judged. And if they are failing, it must be easy to replace them. Whatever the mechanism in local law or custom, it should be possible for a sizeable plurality of dissati sfi ed stakeholders to sack the board expediti ously.

3. REWARD COLLABORATIVE UNIVERSITIES – AND ENCOURAGE MORE

Carrots and sti cks are the language of incenti ves everywhere – including for university administrators and corporate executi ves. If strategic partnerships are good, then government should reward those universiti es and companies that pursue them successfully. For the universiti es, this can be a bonus in public funding – such as the Briti sh government, with its innovati on incenti ve programme, provides; or as the German government, with its Excellence Initi ati ve, has permitt ed. For companies, it can be a specifi c tax incenti ve for collaborati on.

But equally important is to get more universiti es and companies to try their hand at partnership. The record of university-industry collaborati on is spott y across Europe – with a long and deep history of it in the UK, Scandinavia, the Netherlands and Germany, and a comparati ve rarity in Portugal, Greece, the Czech Republic, Hungary and other EU states. We applaud the Commission’s eff ort to establish its Knowledge Alliance programme to encourage more experiments in university-industry relati ons. And while the jury is sti ll out on so new a programme, we are encouraged by the speed with which the European Insti tute of Innovati on and Technology was able to get its fi rst collaborati ve “innovati on factories” established and operati ng across the Knowledge Triangle.

4. HELP UNIVERSITIES STRIVE FOR EXCELLENCE

Companies want to work with the best – always. They cannot aff ord to do otherwise. That means that all EU and member-state eff orts to encourage the best in research are to be applauded, especially if they selecti vely funnel money to the best. As this research indicates, the most successful technology multi nati onals have deep partnerships with a

49 relatively small number of universities; they do not scatter their money across the globe, in hopes of stumbling into a breakthrough. As a result, if Europe wishes to compete in the global marketplace for science and technology, it must strengthen a small number of top-class universities.

This may sound undemocratic, unfair or politically unrealistic. In every country, there is a natural budget conflict between feeding the best and feeding everyone. Nothing in this report suggests that government support should be denied the less-developed regions or universities; a broad base of technical training and varied research is a prerequisite for a 21st-century economy. But this worthy assistance should not come at the expense of Europe’s true towers of excellence. A Cambridge, Karolinska, ETH, Heidelberg or Paris- VI are priceless jewels in the Europe’s crown, and need continued support. Likewise, the best individual researchers – such as those supported by the European Research Council regardless of what institution they come from – require sustenance. We note that the Commission says, in its Horizon 2020 programme, that excellence shall be the “sole criterion” for research grants. That’s great. But as so often happens in politics, we also note a range of additional programmes proposed to support a wider spread of funding across the EU. Inevitably, in a time of economic difficulty, a choice will have to be made – and we urge the Commission and the Parliament to recall the primary importance of excellence, when budgetary push comes to shove.

A clear result of this research is that, for sustained success in innovation, deep, long- term, strategic partnerships are essential between industry and academia. The role of government is to facilitate this natural tendency.

50 ABOUT THE SCIENCE|BUSINESS INNOVATION BOARD

The Science|Business Innovation Board ACES, awards give public recognition to AISBL is a not-for-profit Brussels scientific those researchers, engineers, professors, association bringing together Europe’s students and government officials in leading innovators, in industry, academia Europe who have done the most to foster a and policy. The Board was founded in culture of enterprise on campus. So far, 66 2007 as an exclusive, invitation-only club outstanding individuals or start-up teams for European innovation leaders – to in life sciences, ICT, materials and energy stimulate new thinking in EU innovation technologies have been recognised by policy, promote its members’ innovation the ACES awards programme. capabilities, and to build strategic relationships among decision-makers. It TRANSPARENCY, INDEPENCENCE is a unique organisation in the European AND HIGH QUALITY innovation community: Top-level, exclusive, insightful – and effective. The Board is funded by its private-sector members; and its university members HIGH LEVEL DISCUSSIONS perform research. It is governed by an Executive Committee of the membership, With the objective to improve the climate which decides its annual budget for innovation in Europe, the Board meets and workplan of meetings, research four times a year with senior EU officials projects and conferences. Transparency, to discuss current and future aspects of independence and high quality are its innovation policy. operating principles. It is managed by Science|Business, a Brussels and London GROUNDBREAKING RESEARCH media and communications company focused on research and innovation in The Board commissions original policy Europe. research from its university members. It also conducts policy studies as a group. SCIENCE|BUSINESS It then meets privately with EU officials to discuss the research, and after Science|Business was begun in 2005 relevant feedback publishes the results by some of the leading science and – in influential, forward-looking reports technology journalists and communicators discussed in high-level conferences. in Europe – from Nature, the Wall Street Journal, New Scientist, Business Week BOOSTING ENTREPRENEURSHIP – who now apply their skills to helping ON EUROPEAN CAMPUSES European universities, companies and policy-makers communicate to the Annually since 2008, the Board has innovation community. run the only pan-European awards programme for university spin-out For more information visit: companies. The Academic Enterprise, or www.sciencebusiness.net/innovationboard