Commercialisation of new technologies through spin-offs the Tasmanian perspective

Transcription

1 Commercialisation of new technologies through spin-offs the Tasmanian perspective TSBE seminar: 04/04/2014 Helmut Fryges Australian Innovation Research Centre (AIRC) Dr. Darren Cundy Director: Business Development & Commercialisation University of Tasmania

2 Overview Modes of technology transfer (PFRO) Comparing licensing & spin-offs An example of Examining spin-offs o Performance and success factors Challenges for commercialising university technologies A hybrid TTO model Technology Tackling the challenges A UTas Spin-Out?

3 Channels for University Technology Transfer Informal interpersonal contacts Use of university publications and reports Private firms employing university graduates and scientists University-Industry partnerships» consulting» contracting research out to a university» joint research projects/research joint ventures Science parks / incubators Patenting and licensing Spin-offs

4 Can we usefully conceptualise commercialisation*? Innovation System Participants External Investor / Industry Support Basic Research Applied Research POC Investable Opportunity UNIVERSITIES CSIRO/CRCs INCUBATORS Impact Mature Company Early Stage Company * With respect to Technology based products and services: Commercialisation is the process by which 4 the benefits available from an innovation are made accessible to a market(s) in exchange for fair consideration.

5 License or Start-Up: Pros & Cons Advantages Disadvantages Co-Development with Industry Partner Access to funds to support further development Research opportunities Low Financial Risk Commercialisation Path identified Experienced partners Lower risk (investment, market, execution) (relative to start-up) Typically short(er) negotiation periods Earlier commercial returns Good if inventors don t want to manage a business Potentially higher returns (relative to licensing) Higher level of control A level of Ownership of the business ESOP Good if inventors want to be actively involved in the business Licensing Potential limitations on academic freedom Potential encumbrance on IP (joint ownership) Reporting and compliance obligations High partner switching costs Loss of control Lower potential returns (relative to start-up) Lower potential to scale Limited ability to influence the evolution of the opportunity No participation/employment in the Licensor s business Start-up / Spin-out High up front costs / large investment required Long time to crystallise returns Tough if not comfortable with accountability High failure rate Tough if not comfortable with dilute / reduction in control Fund raising process is draining

6 RISK Risk vs Reward A simplistic view Create & Grow A Spin-Out License out Less Common Commercialisation Option Assign for $ Most Common Commercialisation Option Anecdotally Rare REWARD

7 Exclusive licence Royalties Licensing for Impact : ConTag UTAS UTAS Other Technologies ORI Aus. Prawn Farmers UTAS SEAFOOD CRC IP Oysters Aus FRDC Curtin Uni Tas. Seafood Flinders Uni ORI ConTag Oyster Retailers

8 Firm level spin-off mode A Closer Look at Spin-Outs Table 1: Typology of spin-offs University context New firm QUADRANT 1 Environmental context Commercial context QUADRANT 2 Alumni start-up Academic spin-off (pure) Academic spin-off (hybrid) Corporate spin-off (use of intellectual property/assets) Employee spin-off (no direct use of intellectual property/assets) Existing activity QUADRANT 3 Privatization buyout/buy-in of university research agency/station QUADRANT 4 Parent spin-off (divesture) Management buyout of division Management buyin of division Source: Fryges and Wright (2014)

9 Characteristics of corporate spin-offs 1. Transfer of business ideas developed within the parent firm new product, production process, marketing/management concept codified knowledge (e.g. patents) or non-codified knowledge (e.g. tacit knowledge) 2. Transition of employees founder of the corporate spin-off (usually the inventor) group of employees that worked together at the incubator firm

10 Characteristics of academic spin-offs 1. Transfer of knowledge and technologies generated at a university to the new firm codified intellectual property non-codified knowledge, technologies, research results 2. The firm s team of founders comprises members from a university researchers and non-academic staff members (e.g. lecturers, technical employees) usually involving at least a partial employment transition of the university employee from academia to the for-profit private sector

11 Figure 1: Number and share of corporate and academic spin-offs in Germany % 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% # of corporate spin-offs # of academic spin-offs share of corporate spin-offs in total number of start-ups share of academic spin-offs in total number of start-ups Weighted results. Source: ZEW survey start-ups from academia 2008, KfW/ZEW Start-up Panel.

12 Performance of corporate spin-offs Corporate spin-offs survive longer than other start-ups (Muendler et al. 2012, Buenstorf 2007, Eriksson and Kuhn 2006, Agarwal et al. 2004). Corporate spin-offs perform better in terms of innovation output (Fryges et al. 2014) Corporate spin-offs do not preform better in terms of employment growth than other comparable start-ups (Fryges et al. 2014)

13 Success factors of corporate spin-offs Transfer from the parent firm to the corporate spin-off:» business idea as input and stimulus for innovations» skilled employees» rules, routines, procedures» social capital and networks (with customers, suppliers etc.)» financial capital» patents, trademarks, designs Collaborations between parent firm and corporate spin-off in innovation, production, marketing

14 Performance of academic spin-offs Academic spin-offs survive longer than other start-ups (Zhang 2009; Cantner and Goethner 2011, Egeln et al. 2007). Academic spin-offs perform better in terms of receiving external equity financing, both angel financing and venture capital (Fryges et al. 2007, Toole and Czarnitzki 2006). Academic spin-offs perform better in terms of innovation output (Toole and Czarnitzki 2006, Lejpras 2014, Stephan 2014) Mixed results for sales growth (Colombo and Piva 2006, Cantner and Goethner 2011) Mixed results for employment growth (Cantner and Goethner 2011, Egeln et al. 2007, Czarmitzki et al. 2014) Academic spin-offs pay higher wages for comparable occupations (Brixy et al., forthcoming)

15 Success factors of academic spin-offs Academic spin-offs superior knowledge base Use of patents from academia On-going contacts with academia» informal interpersonal contacts» sales of products/services to universities» internship for students, facilitates finding new employees» collaborative research projects Ability to achieve economies of standardisation or scale Ability to overcome initial lack of business knowledge

16 What about academic spin-off costs? The costs of academic spin-offs are incurred mostly by the not-for-profit research sector. administration costs; costs of a technology transfer office reduced commitment to research reduced faculty research productivity ( academic brain drain ) public disclosure of knowledge is delayed / restricted reduced commitment to teaching reduced student learning

17 Challenges for commercialising new technologies Determining the main goal of commercialisation at the university:» to facilitate technology transfer» to maximise university revenue» to maximise social benefits Determining the type of the technology transfer unit most suitable for your university» degree of independence» degree of centralisation» organisational structure

18 Challenges for commercialising new technologies Creating an incentive structure within the university that motivates researchers to engage in commercialisation of their technologies. Choosing the best channel of commercialisation with spin-off as just one potential option. Alleviating asymmetric information between the inventor and» industry partners/customers/suppliers» external financiers Facilitating knowledge flow between different units/department within the university

19 Example: A hybrid Technology Transfer Office University of Ghent, Belgium (32,000 students, 7,100 staff members, 11 faculties) Hybrid TTO model composed of centralised and decentralised elements Decentralised TTO level: Industrial liaison network» network of business development centres that group complementary research departments by application area» 21 business development managers Centralised TTO level» central point of contact for industry and back-office for the industrial liaison network» 30 staff members

20 Figure 2: Proximity as an antecedent of boundary spanning activities for spin-off creation at different TTO levels Source: Huyghe et al. (2014).

21 Technology Tackling the Challenges» Building a Technology Transfer Culture» Education and alignment» Incentivizes (corporate / individual)» Technology Transfer Systems» Capitalising on the Demonstration Principle Publicising our successes!» Partnering for Success Partnering for Impact» Understanding our competitive differentiation» Meaningful commitments understanding and addressing market realities» Equitable but realistic commercial terms» Sustainable models

22 A UTAS Spin-Out: The Sense-T Opportunity? Sense-T is creating the world's first economywide intelligent sensor network that integrates different data sources so that the data can be used by everyone for different purposes. Sense-T is now working with researchers and commercial partners to examine the case for a spin-out. We recognise;» A strong case for private-public partnership» Good strategic alignment between corporate partners and Uni» Delivery of benefits requires more capital/ risk than public sector can address» Market needs to drive the research questions to underpin the technology solutions» Commercial returns to fuel more research» Adherence to shared principles is key to sustainable co-existence.» Scalable, and meets UTAS triple bottom line agenda» Watch this space!

23 Thank you for your attention!