Paul W. Gilgen: The Ideal Technology Incubator

Workshop in Warsaw/Poland, February 7. 9, 2007: «NanoScience and Technology to Business (NST2B)» Paul W. Gilgen: The Ideal Technology Incubator February 7, 2007, 1100. 1130 AM: Paul W. Gilgen, Head of Marketing, Technology Transfer and Knowledge Management Department at Empa, Swiss Federal Laboratories for Materials Research and Testing, CH-8600 Duebendorf/Switzerland: «The Ideal Technology Incubator» 1

Overview I Definitions to avoid linguistic confusion Innovation Technology Transfer Nanotechnology Incubator Public Private Partnership (PPP) II Overall goal of the transfer «from science to market» III Interests as driving force on the way to an ideal technology incubator looking different at first glance, turning-out to be common at second glance How to match the interests apparently looking different The I 4 process Bringing scientists and business people in an easy contact Joint R&D projects as the main vehicle to match the interests Bridging the «valley of death» along the S2B process IV Obstacles on the way from science to business (S2B), and how to remove them Culture Technology Market Politics Academia V The ideal technology incubator is characterized by seven attributes VI Summary February 7, 2007, 1100. 1130 AM: Paul W. Gilgen, Head of Marketing, Technology Transfer and Knowledge Management Department at Empa, Swiss Federal Laboratories for Materials Research and Testing, CH-8600 Duebendorf/Switzerland: «The Ideal Technology Incubator» 2

I Definitions to avoid linguistic confusion Innovation The completion of the following process: The transfer of an invention (coming from science, and based on an idea), into an innovation i.e. the answer to market needs for which customers exist that are willing to pay ( = the business) and ending-up with sustainable integration of the resulting business in the economy; the full cycle is an I 4 process Technology Transfer: The shift of hardware and software (and often also of humanware, because people and not folders are carrying the required knowledge and kow-how) from science to business («S2B»), thus transforming knowledge into enterprise value Nanotechnology: Handling systems containing man-made particles which, at least in one dimension, are below 100 Nanometers Incubator: A well structured setting where young enterprises and other start-up companies can reach economical fitness required to survive the competition in the market Technology park (and also science park) is often used synonymously with incubator Public Private Partnership (PPP): The collaboration between institutions from the public sector with companies or associations from the private sector to jointly cope the many common challenges February 7, 2007, 1100. 1130 AM: Paul W. Gilgen, Head of Marketing, Technology Transfer and Knowledge Management Department at Empa, Swiss Federal Laboratories for Materials Research and Testing, CH-8600 Duebendorf/Switzerland: «The Ideal Technology Incubator» 3

II Overall goal of the transfer «from science to market» European OECD economies are suffering from sclerosis, and therapy according to EU's «Lisbon Agenda» and its Seventh Framework Program (FP7) for the funding of research and technological development in Europe is expected from science: Lack of growth due to insufficient competitiveness But growth is the only way to finance the states' increasing expenditures in a sustainable way, i.e. by contributing to an increased GDP Growing of growth is enabled only through innovations «Best for economy, a true blessing and essential for prosperity: innovation (Joseph E. Stiglitz, Professor of Economics, Columbia University, New York/USA; Nobel Prize in Economics 2001)» Innovations are based on inventions (emerging from ideas), and inventions are emerging from science (from where else?) February 7, 2007, 1100. 1130 AM: Paul W. Gilgen, Head of Marketing, Technology Transfer and Knowledge Management Department at Empa, Swiss Federal Laboratories for Materials Research and Testing, CH-8600 Duebendorf/Switzerland: «The Ideal Technology Incubator» 4

II Overall goal of the transfer «from science to market» Therapy is expected from science which is closely cooperating with industry: Thus, a closer link between academia and industry enables to pick-up inventions, facilitates the process to transform them into innovations, innovations leading to economic growth economic growth generating an increased GDP an increased GDP generates all the money needed to preserve the economical, ecological and especially social achievements OECD countries have built-up during economical boom periods in the past and facing now severe challenges due to globalisation and demography this is the convincing five-step chain of rationales for strengthening the link between science and business, and to make much greater use of academic knowledge via entrepreneurial conversion into a commercial benefit: «valorisation» by transforming knowledge into entreprise value February 7, 2007, 1100. 1130 AM: Paul W. Gilgen, Head of Marketing, Technology Transfer and Knowledge Management Department at Empa, Swiss Federal Laboratories for Materials Research and Testing, CH-8600 Duebendorf/Switzerland: «The Ideal Technology Incubator» 5

II Overall goal of the transfer «from science to market» Science cooperating with industry in the view of a Nobel Prize Laureat: «There is no knowledge-oriented science without action-driven high technology; just as there is no pioneering technology worthy of the name without outstanding science.» Heinrich Rohrer Nobel Prize for Physics 1986 February 7, 2007, 1100. 1130 AM: Paul W. Gilgen, Head of Marketing, Technology Transfer and Knowledge Management Department at Empa, Swiss Federal Laboratories for Materials Research and Testing, CH-8600 Duebendorf/Switzerland: «The Ideal Technology Incubator» 6

III Interests as driving forces on the way to an ideal technology incubator: looking different at first glance, turning-out to be common at second glance Science is knowledge-driven: Competition as a way of disproving inadequate theories (Karl R. Popper's philosophy) Universities enjoy considerable autonomy: «Freedom of education, research, study» «curiositas», «libido sciendi» Inventions Contribution to the creation of knowledge; publications Owners of Intellectual Property Rights (IPR) Recognition from the science community: the highest scientific award is «This scientist has become a Nobel laureate» Business is bottom-line driven: Competition as a way of eliminating inadequate customer benefits (Marketing as defined by Michael Porter) Companies have little autonomy: «The customer is always right» «Commercial viability» Innovations Contribution to creation of values, of sales and earnings, of jobs Users of Intellectual Property Rights (IPR) to exploit knowledge Recognition from the market: the highest business award is «This product has become a premium brand» February 7, 2007, 1100. 1130 AM: Paul W. Gilgen, Head of Marketing, Technology Transfer and Knowledge Management Department at Empa, Swiss Federal Laboratories for Materials Research and Testing, CH-8600 Duebendorf/Switzerland: «The Ideal Technology Incubator» 7

III The full transfer from science to business consists of four parts: The complete I 4 process: Idea Invention Innovation Integration February 7, 2007, 1100. 1130 AM: Paul W. Gilgen, Head of Marketing, Technology Transfer and Knowledge Management Department at Empa, Swiss Federal Laboratories for Materials Research and Testing, CH-8600 Duebendorf/Switzerland: «The Ideal Technology Incubator» 8

III The full transfer from science to business (S2B) consists of four parts: The central part within the I 4 process: Idea Invention Innovation Integration science business Transfering an invention (in science) into an innovation (in business) is the core element of knowledge and technology transfer (KTT) February 7, 2007, 1100. 1130 AM: Paul W. Gilgen, Head of Marketing, Technology Transfer and Knowledge Management Department at Empa, Swiss Federal Laboratories for Materials Research and Testing, CH-8600 Duebendorf/Switzerland: «The Ideal Technology Incubator» 9

III The core element of knowledge and technology transfer through S2B Tax revenue Risks of time to market (TTM), return on investment (ROI) and the uncertain nature of commercial success Tax spending State Private sector Invention SCIENCE Education; pure basic research Applicationoriented basic research Applied research Service Innovation Universities, colleges, research institutions, universities of applied sciences Feasibility studies Business idea Market research MARKET T e c h n o l o g y Setting up a company (or entering into partnership with an existing company) Product and process development Marketing Manufacture t r a n s f e r Sale for the original drawing (modified by Paul W. Gilgen) By courtesy of Dr. Thomas von Waldkirch, Technopark Zurich/Switzerland February 7, 2007, 1100. 1130 AM: Paul W. Gilgen, Head of Marketing, Technology Transfer and Knowledge Management Department at Empa, Swiss Federal Laboratories for Materials Research and Testing, CH-8600 Duebendorf/Switzerland: «The Ideal Technology Incubator» 10

III The PUSH-PULL model of science to business (S2B) process How to match the interests apparently looking different: Bringing people together establish a zone where scientists and business people can easily meet each other face-to-face PUSH Science Universities, colleges, research institutions, universities of applied sciences Knowledge-driven PULL Business Companies and umbrella organisations (associations) in the industry sector and in the services sector Bottom-line driven From science to business, «S2B»: transforming knowledge into enterprise value February 7, 2007, 1100. 1130 AM: Paul W. Gilgen, Head of Marketing, Technology Transfer and Knowledge Management Department at Empa, Swiss Federal Laboratories for Materials Research and Testing, CH-8600 Duebendorf/Switzerland: «The Ideal Technology Incubator» 11

III The PUSH-PULL model of science to business (S2B) process Bringing scientists and business people in an easy contact: Like with all junctions it is the interface between science and business which is crucial, not the bulk PUSH Science Universities, colleges, research institutions, universities of applied sciences Knowledge-driven PULL Business Companies and umbrella organisations (associations) in the industry sector and in the services sector Bottom-line driven The business incubator (often called technology park) is this interface's physical site, it enables easy face-to-face encounter between scientists and business people February 7, 2007, 1100. 1130 AM: Paul W. Gilgen, Head of Marketing, Technology Transfer and Knowledge Management Department at Empa, Swiss Federal Laboratories for Materials Research and Testing, CH-8600 Duebendorf/Switzerland: «The Ideal Technology Incubator» 12

III The physical site where scientists meets face-to-face business people is called business incubator or technology park Joint R & D projects as the main vehicle to match the interests across the interface and acting as the bracket to link the PUSH and the PULL half: Encouraged and financially supported by the national agency for the promotion of applied R&D PUSH Science Universities, colleges, research institutions, universities of applied sciences Knowledge-driven PULL Business Companies and umbrella organisations (associations) in the industry sector and in the services sector Bottom-line driven Research is performed mainly by science which is (mostly) public; and development is performed mainly by industry which is (mostly) private; thus, the interlinked cooperation between the sectors becomes a public private partnership (PPP) February 7, 2007, 1100. 1130 AM: Paul W. Gilgen, Head of Marketing, Technology Transfer and Knowledge Management Department at Empa, Swiss Federal Laboratories for Materials Research and Testing, CH-8600 Duebendorf/Switzerland: «The Ideal Technology Incubator» 13

III Technology parks in Switzerland Note: Not all of the sites are hosting both scientific and business activities under the same roof, only a few are really uniting university labs and their spin-offs in an ideal collaboration, namely interlinked; others are yet too small to reach the critical mass of the host for a fruitful interaction between university labs and spin-offs and start-ups February 7, 2007, 1100. 1130 AM: Paul W. Gilgen, Head of Marketing, Technology Transfer and Knowledge Management Department at Empa, Swiss Federal Laboratories for Materials Research and Testing, CH-8600 Duebendorf/Switzerland: «The Ideal Technology Incubator» 14

III How to survive financially along the process from science to business Foreseeable financing which can be anticipated by the actors in both the public and the private part of a PPP is a decisive success factor: R&D funding and seed money in the public half; venture capital, bank credits and equity in the private half PUSH Funding from public sources PULL Funding from private sources February 7, 2007, 1100. 1130 AM: Paul W. Gilgen, Head of Marketing, Technology Transfer and Knowledge Management Department at Empa, Swiss Federal Laboratories for Materials Research and Testing, CH-8600 Duebendorf/Switzerland: «The Ideal Technology Incubator» 15

III How to survive financially on the walk through the «valley of death» within the S2B process Foreseeable financing which can be anticipated by the actors in both the public and the private part of a PPP is a decisive success factor: R&D funding and seed money in the public half; venture capital, bank credits and equity in the private half PUSH Funding from public sources PULL Funding from private sources Like in the valley of death: danger to die with thirst! February 7, 2007, 1100. 1130 AM: Paul W. Gilgen, Head of Marketing, Technology Transfer and Knowledge Management Department at Empa, Swiss Federal Laboratories for Materials Research and Testing, CH-8600 Duebendorf/Switzerland: «The Ideal Technology Incubator» 16

III Consecutive financing is building a bridge over the «valley of death» Consecutive financing by public institutions and private organisations: R&D funding and seed money in the public half; venture capital, bank credits and equity in the private half PUSH PULL The money burnrate of technology-oriented start-ups is often very high, therefore all the available sources for a sufficient financing have to be exploited: e.g. public R&D funding, seed money (both public and private), family/friends/fools, banks, VC funds, equity, etc.; later eventually an IPO February 7, 2007, 1100. 1130 AM: Paul W. Gilgen, Head of Marketing, Technology Transfer and Knowledge Management Department at Empa, Swiss Federal Laboratories for Materials Research and Testing, CH-8600 Duebendorf/Switzerland: «The Ideal Technology Incubator» 17

IV Obstacles on the way from science to business (S2B) and how to remove them Culture: A fresh perception and altered understanding of the roles of the various parties involved in science and business Science and business must come to a new understanding of each other, following the code «S2B» Science must stop regarding business as a stage full of simple-minded egomaniacs who pursue ethically less honourable and morally dubious goals and who only ever think of making money Business must stop regarding science as an ivory tower peopled by unworldly dreamers obsessed by theoretical niceties with no practical relevance, and who never produce anything of real use The objective is to establish an atmosphere of mutual confidence which is necessary to jointly master the challenges of nanoscience and nanotechnology, and to use both as source for the revitalization of economies February 7, 2007, 1100. 1130 AM: Paul W. Gilgen, Head of Marketing, Technology Transfer and Knowledge Management Department at Empa, Swiss Federal Laboratories for Materials Research and Testing, CH-8600 Duebendorf/Switzerland: «The Ideal Technology Incubator» 18

IV Obstacles on the way from science to business (S2B) and how to remove them Technology: Nanoscience and nanotechnology are challenging topics Nanoscience and nanotechnology are far away from being commodities, thus their products and services cannot be purchased anywhere, but have to be based on a well established relation to a nearby research institution (like e.g. a technical university) Know-how about nanoscience and nanotechnology cannot be found in books, but in people Therefore, transfer of people is even more important than it is in today's well-known mainstream technologies Scientists (and others) should establish educational and training courses for business people (CEOs of industrial enterprises, large and small ones, of banks, of institutional inverstors etc.) to increase their understanding of nanoscience and nanotechnology and the peculiarities of its applications, including realistic SWOT analyses (to prevent another hype: no «window-dressing») February 7, 2007, 1100. 1130 AM: Paul W. Gilgen, Head of Marketing, Technology Transfer and Knowledge Management Department at Empa, Swiss Federal Laboratories for Materials Research and Testing, CH-8600 Duebendorf/Switzerland: «The Ideal Technology Incubator» 19

IV Obstacles on the way from science to business (S2B) and how to remove them Market: Nanoscience and nanotechnology are emerging markets Even in markets dominated by today's technologies the PULL half of the transfer process is underdeveloped; all the more this is valid for the emerging nanoscience and nanotechnology market Industry and finance associations, together with scientists, should organise information trips and training courses, both on appropriate levels: most presidents and CEOs/COOs, most bankers, most investors do by far not have sufficient knowledge and insight The large majority of companies are small and medium-sized enterprises (SME) having limited management resources, which are, furthermore, most often fully used by daily business problems leaving almost no capacity to develop the required strong PULL activity (large enterprises have their own experts in nanoscience and nanotechnology, as well as specialized staff personnel; but in any economy there are only a few such big players) Industry and finance associations should organise the regular exchange of experiences made by their members February 7, 2007, 1100. 1130 AM: Paul W. Gilgen, Head of Marketing, Technology Transfer and Knowledge Management Department at Empa, Swiss Federal Laboratories for Materials Research and Testing, CH-8600 Duebendorf/Switzerland: «The Ideal Technology Incubator» 20

IV Obstacles on the way from science to business (S2B) and how to remove them Politics: Is committed to sustainable development, hence has to master economical/societal/ ecological challenges like e.g. establishing a legal framework enabling the economy to reach competitiveness, supporting up-to-date research and education funded by public means, handling risk perception of new technologies by the public etc. The government (including the corresponding administration) together with high-level representatives from science and business should commonly draft a «National Action Plan in Science and Technology» This multi-year plan should show government's intention to invest public money in those fields judged as being crucial for the future of the country, for its economy and for its welfare Nanoscience and Nanotechnology are top-ranking among these topics In general, politics should increase listening to scientists and should accept more advise from science February 7, 2007, 1100. 1130 AM: Paul W. Gilgen, Head of Marketing, Technology Transfer and Knowledge Management Department at Empa, Swiss Federal Laboratories for Materials Research and Testing, CH-8600 Duebendorf/Switzerland: «The Ideal Technology Incubator» 21

IV Obstacles on the way from science to business (S2B) and how to remove them Academia: Universities are committed to contribute to the science community by pursuing the search for knowledge and cognition While keeping and preserving the academic autonomy of education and research without any cuts, universities should significantly widen their traditional educational scope and societal understanding to become a more important partner in politics, to play a more active role in the society, and to take in general more responsibility for the future of the country everywhere problems have become so difficult they cannot be left to politics alone as in the past: science has to enter, and that in a publicly perceptible manner Universities and research institutions should be forced by law to install technology transfer offices (TTO) Professors, directors of research departments and laboratories etc. should be encouraged to develop entrepreneurship in their organisations As incentive the budgets of their organisations should be double-sourced: only two-third public means, but one-third private means acquired in the market Universities should offer entrepreneurial lectures and declare them as mandatory for academic education in science and engineering curricula technology management lectures and declare them as mandatory for academic education in economics curricula February 7, 2007, 1100. 1130 AM: Paul W. Gilgen, Head of Marketing, Technology Transfer and Knowledge Management Department at Empa, Swiss Federal Laboratories for Materials Research and Testing, CH-8600 Duebendorf/Switzerland: «The Ideal Technology Incubator» 22

V The ideal technology incubator is characterized by seven attributes 1 It follows the PUSH-PULL model of knowledge and technology transfer, uniting under its roof scientists with entrepreneurs, hosting both in a sufficient number to achieve the critical mass for successful interactions between them 2 It is propped on two solid bed-plates: the first being a recognized scientific competence in nanoscience and nanotechnology, the other a recognized business competence in this high-tech market exploited by start-ups, spin-offs and other young enterprises 3 It is constructed as public private partnership (PPP) and hence capable to manage the various tasks appearing at the interface where public and private sector are meeting institutionally each other 4 It offers a full portfolio of coaching and mentoring through the aid of e.g. business angels and consultants, in particular in those fields where young entrepreneurs running technology-oriented businesses are showing the most difficulties: marketing and finance 5 It facilitates the access to public R&D funding and to seed money, as well as to private venture capital, to bank credits and to equity 6 It acts as stimulating and growth-promoting business environment, with limited time-of-stay for its companies, i.e. after three to five years the young enterprises will have become mature and leave the incubator 7 Due to its success as incubator, it has become a brand; and as such it attracts young talented scientists and demonstrates them how attractive it is to become an entrepreneur in the promising field of nanoscience and nanotechnology business February 7, 2007, 1100. 1130 AM: Paul W. Gilgen, Head of Marketing, Technology Transfer and Knowledge Management Department at Empa, Swiss Federal Laboratories for Materials Research and Testing, CH-8600 Duebendorf/Switzerland: «The Ideal Technology Incubator» 23

VI Summary Many OECD economies need revitalising, and this process must be really fundamental (look at EU's «Lisbon Agenda» as just one example) Economic weakness has several causes, but most important is the missing growth due to lack of capacity to innovate The problem will be resolved not by «more of the same», but only by a really fresh approach Novelty comes from science from where else? Because it is science that produces inventions Business exploits inventions who else? It does so by converting these inventions into commercial innovations A continuous transfer process, from invention to commercial innovation, requires close and interlinked cooperation in a public private partnership (PPP) between science and business the code is «S2B», in particular «NST2B» for nanoscience and nanotechnology This close and interlinked cooperation between public science and private business depends on a fundamental shift in the attitudes of both parties to one other Politics must be an element in this close cooperation, its mission is to enable the linkage between science and business by defining an adequate framework (including finances) Academia should think about how to play a more active role in the society, about how to get more influence in politics (in particular in the important science and technology policy), and how to consider the strong interaction between technology and economics in the students' curricula February 7, 2007, 1100. 1130 AM: Paul W. Gilgen, Head of Marketing, Technology Transfer and Knowledge Management Department at Empa, Swiss Federal Laboratories for Materials Research and Testing, CH-8600 Duebendorf/Switzerland: «The Ideal Technology Incubator» 24