GETFUNDED HANDBOOK FOR RESEARCHERS SEEKING INVESTMENT FOR SCIENCE TO BE APPLIED VERSION 0.9 MAY Jun-17 Page 1

GETFUNDED HANDBOOK FOR RESEARCHERS SEEKING INVESTMENT FOR SCIENCE TO BE APPLIED VERSION 0.9 MAY 2016 Jun-17 Page 1

ABOUT KIWINET The Kiwi Innovation Network (KiwiNet) is New Zealand s network of Universities, Crown Research Institutes and other publicly funded research organisations who are dedicated to taking a collaborative approach to research commercialisation. Together these research organisations represent a total combined research expenditure of over $500 million and represent 70% of the publicly funded researchers in New Zealand. KiwiNet s role is to empower people who are involved in research commercialisation by helping them to access the tools, connections, investment and support they need. By collaborating on projects, combining capability and sharing networks we can better leverage the resources available for commercialisation, and help one another achieve better commercial outcomes for New Zealand. BACKGROUND This document has been prepared by KiwiNet and is a work in progress. We welcome feedback on how it could be improved or more information that could be added. Just phone us or email admin@kiwinet.org.nz. Future versions will hopefully include: More examples and case studies. More information on incorporating Vision Matauranga objectives into research funding proposals to MBIE. More comprehensive list of support agencies and useful organisations. Jun-17 Page 2

SUMMARY Kiwi scientists are ambitious explorers, pushing the frontiers of knowledge to better understand the world around us. They are elite problem solvers, boldly confronting challenges in society and exploring opportunities to help improve our quality of life. That s why New Zealand science has a global reputation for punching above its weight in research excellence. The challenge for New Zealand is unlocking the huge potential of our publicly funded science system to drive business innovation and economic prosperity. For many scientists, seeing their expertise and ideas transformed into new products, services or processes is an exciting prospect. However, while there are various pockets of success, OECD data shows New Zealand performs poorly at connecting science with business innovation. New Zealand businesses are hungry to tap into scientific knowledge that will help them to innovate and give them a competitive advantage. Researchers have specialist expertise that can solve hightech business challenges. Research exploration also often leads to unexpected discoveries that enable exciting new innovations and commercial opportunities. The challenge is that too often research expertise and scientific discoveries are not presented in a way where business can see the value. Science needs investment and researchers usually turn first to highly contested government funding. For applied science, businesses can offer an alternative source of science investment combined with an established channel to market. Like government, businesses must see compelling benefits and a plausible implementation pathway before they will invest. However, often both government and businesses are frustrated with poorly articulated science plans which are heavy on scientific exploration and light on pathway to application. This document is intended to help researchers articulate a more compelling pitch for investment into their research programmes, whether from government or business. The focus is on early market engagement, tapping into external support, forming multidisciplinary teams, mapping a plausible technology transfer pathway and demonstrating a compelling return on investment. This isn t market-led science, its market-aware science. Researchers maintain their freedom to explore but with a clearer understanding for the utility of their research and planning for how their ideas ultimately would be applied. Scientists who develop these skills are much more likely to attract investment, achieve academic success and see their ideas being used in society. New Zealand has a global reputation for research excellence. The challenge is converting research excellence into new products, services and processes. Businesses are hungry for high-tech new innovations. Business and government are often frustrated by poorly articulated science proposals with unlikely pathways to implementation. This document aims to help researchers present compelling science plans with plausible pathways to market and benefits to New Zealand. Jun-17 Page 3

SCIENCE POWERING THE INNOVATION ECONOMY Governments around the world are racing to build innovation economies that will drive economic growth. They are implementing a range of incentives to encourage business innovation and entrepreneurship. In New Zealand, Universities and Crown Research Institutes (CRIs) are expected to play an increasingly central role in powering an innovation economy. The government seeks innovation opportunities from research organisations that will create economic growth as well as address important social, environmental and health challenges in society. Realising this ambition will require a more concerted effort towards applying technologies from our science system. It will also require a stronger culture of widespread engagement between research and business in order to drive business innovation and economic growth. Innovation = Knowledge Creation + Application Innovation encompasses the processes of both knowledge creation and its application into society. The New Zealand science system is well structured around knowledge creation. However, many clever scientific creations never reach application due to poor implementation planning. Researchers must continue to explore scientific frontiers. But they must also plan early to ensure that when they make an exciting discover, it has the maximum chance of getting to end-users. PLANNING FOR APPLICATION This document presents recommendations for researchers to consider when they are preparing investment proposals to government or private sector investment. It is not designed to replace instructions already available from MBIE. This document is presented from a commercial perspective and therefore focuses on communicating science in a way that is more compelling for investors and industry. A compelling proposal for investment into science should address each of the following areas, which are sections in this document: Science with clearly defined novelty and value proposition. Validated market need Credible implementation pathway Plausible benefits to New Zealand Scientists are not expected to do this alone Throughout the document different support agencies are mentioned that can provide advice, support and investment. A longer list of support agencies is provided in Appendix 1. Jun-17 Page 4

WHAT IS TECHNOLOGY TRANSFER? Government investment into science benefits New Zealand society through 3 main channels: Higher education - building a well-educated and skilled workforce. Research excellence - pushing the frontiers of scientific knowledge seeking answers to society s questions and dissemination of knowledge through publication and conferences. Technology transfer direct application of scientific expertise and technologies into society. Technology Transfer The diagram illustrates the role of technology transfer. Scientific knowledge and discoveries are transferred out for application in society as products, services or processes. Meanwhile research priorities are informed by understanding private sector needs and market opportunities: The result is science excellence influenced by end-user needs leading to greater impact. TECHNOLOGY TRANSFER CHANNELS Technology transfer is typically achieved through one or more of the following channels: Advice & consulting - researchers provide scientific advice based on their current knowledge. Targeted research and contract research - researchers carry out specific research to solve a problem or pursue a new opportunity. Technology licencing - intellectual property and expertise is developed at a research organisation and licenced or sold to business for application. Start-up company - a new company is created to develop and distribute a product or service. Movement of people researchers with specialist expertise move from research organisations into industry (e.g. a graduating PhD student moving into a company). Researchers should consider these tech-transfer channels early in their research programmes. It might be too early to choose which channel is most appropriate. Different research organisations also prefer different channels. Some science will take years to generate benefit to end-users and pathways to impact are often unclear at the outset. The key is to consider the options early, identify support that is available and incorporate tech-transfer strategies into research proposals. Jun-17 Page 5

DEFINING THE SCIENCE Defining the science is an opportunity to show that the proposed research programme is useful, distinctive and realistic. Be specific Be brief and clear It is frustrating to read a proposal where it is unclear what has already been done and what needs to be done, why the research is novel and why it is useful. Market Pain What specific problem does the proposed research plan aim to address? Who experiences this problem? Science Describe the specific science behind the proposed research What is the goal of the research programme? How will a successful outcome address the market pain? Novelty What specific aspect of the research is novel compared to other science, technologies or expertise that already exist? Be brief and clear about novelty. Value proposition What specific benefit will the proposed technology or expertise resulting from the research provide? How is the research different from what others are doing? Be brief and clear about value proposition. Current status Describe the current status of the science that this research plan will build on. What specific science has already been done by yourself and others? Justify your hypothesis What leads you to believe that the goals of the research programme are achievable. Jun-17 Page 6

VALIDATING MARKET NEED Science investment proposals are often light on market validation. Comprehensive information might not yet be available. However, it is worth commenting on each of the points below and incorporating a plan to learn more as the research programmes progresses. End-users Who will be the end-user of the technology or expertise? Why will they choose to use it? Existing alternatives How do end-users currently deal with the market pain? What other technologies or expertise are available to address the market pain? Market size What is the potential market size for the technology or expertise? What fraction of the market is realistically accessible? Who makes the purchasing decision? Channel to market What companies could manufacture, distribute or sell the technology or expertise. What are the benefits for channel to market partners to take on the new product or services. What regulatory constraints exist (if any). Intellectual Property protection Summarise results of your IP and freedom to operate searching. Describe the IP protection strategy that is anticipated (e.g. patent, trade secret, etc). Help You don t have to do this alone: TTPs - Research organisations have Tech Transfer Professionals who can help with this work. KiwiNet & Return-on-Science investment committees provide useful advice & connections. See Appendix 1 for other examples Jun-17 Page 7

IMPLEMENTATION PATHWAY An implementation pathway for early stage research may be light on detail at first. However, a research proposal should demonstrate a realistic strategy is in place so when opportunities emerge, they have the best chance of getting to market. Multidisciplinary team Assemble a team that mixes scientists with TTPs, independent experts and end-users. Justification: Multidisciplinary teams bring a range of ideas and expertise to a research programme. Commercial experts may only play a minor role initially (e.g. monthly progress meetings), but it is important to define their role in a proposal. Benefits: Opportunities for application of research outcomes are identified earlier. Commercial experts help with market validation, IP protection, industry engagement and connecting the team with additional funding and support. Researchers are freed-up to focus on science. Shows commitment to implementation. Support: TTPs can support business engagement. Callaghan Innovation's free Global Expert service provides connections with experts. Tech-transfer training Plan for research staff to receive tech-transfer training in areas such as market validation, pitching to business and IP protection. Justification: Research staff who understand the principles of tech-transfer and know where to find support are more likely to see their ideas be applied. Benefits: Research team members better understand how to work with business. Researcher team members gain a new perspective on their research. Shows commitment to implementation. Support: Various entities run tech-transfer training, some at no charge (e.g. TTPs, KiwiNet). End-user relationships Plan to build strong end-users relationships throughout the research programme to help shape research priorities to align with market needs. Justification: Researchers with strong connections to end-user are more likely to produce research that has an impact on productivity and wellbeing in society. Outputs: Research has a more compelling value proposition and attracts more financial support. Researchers understand which end-users make the purchasing decisions and why. Shows commitment to implementation. Support: TTPs, EDAs, Business associations, the CPN partners and Callaghan Innovation can all help connect with end-users. Jun-17 Page 8

Channel-to-market connections Map the potential pathway to market for a new technology early and building connections with manufacturers and distributers. Justification: Strong relationships with channel-to-market partners are essential to understanding how a new product or service will get to market. Outputs: Researchers better understand the needs of manufacturers and distributers. More likely to attract industry investment into a research programme. Identify opportunities to partner with Maori business. Shows commitment to implementation. Support: TTPs, CPN partners and the Global Expert service are willing to help connect to channel to market partners. Tech-Incubators can help connect with potential investors for start-ups. Market analysis Plan ongoing analysis of the technology landscape, validating market size, accessibility and freedom to operate early in a research programme. Justification: Ensuring that the market opportunity is worthwhile, defining a realistic value proposition for the proposed product or service and understanding competing solutions. Outputs: Competing technologies and expertise identified early. Industry partners and end-users identified early. Potential intellectual property issues and regulatory barriers identified early. New, often unanticipated, market opportunities identified. Support: TTPs at research organisations can help. CPN Investment Committees are a great source of advice and industry connections. Planning for application Map a pathway to follow-on funding and investment early in the research programme for prototyping, IP protection and tech-transfer once a discovery is made. Justification: Planning and budgeting for tech-transfer costs up front will enable access to additional funding and support resources being exhausted just as when research outputs are ready for taking to the market. Outputs: Follow-on sources of investment and funding is identified early. A clear strategy for implementation when a discovery is made. Support: There are a variety of sources of tech-transfer for research programmes such as: PreSeed, Tech-Incubators, Callaghan Innovation and research organisations own internal techtransfer funds. Jun-17 Page 9

BENEFIT TO NEW ZEALAND When applying for government investment for science, the proposed research must be able to link back to productivity and wellbeing benefits for New Zealand. This is an area that is poorly addressed in many proposals, particularly where economic impact is an objective. The Government invests tax payer funding into science to deliver benefit to New Zealanders. A focus on impact does not mean a focus solely on applied or close-to-market research. However, research programmes must present a line-of-sight to eventual impact. There are various forms of impact that can arise from research including social, environmental and economic impact. This handbook focuses primarily on pathways to economic impact from technology innovation. Economic benefit to New Zealand can be assessed through growth in New Zealand business revenue, including export earnings, and through high-value job creation in New Zealand. These impacts can be achieved as a direct or indirect outcome of research programmes. It is also important to consider how a research programme builds capability that will enable greater outcomes in the future. For example, by developing researchers who have greater tech-transfer capability, stronger business connections and who are inspired to pursue innovation in the future. The table below lists some of the benefits that may result from a research programme. Publicly Funded Research Techtransfer Tech-transfer Channel: Movement of people Consulting Contract research Licensing Start-up Output: Increased business productivity and efficiency Increased Business investment in R&D New and improved products & services made in NZ Technology licenced offshore New business formed Economic benefits to NZ: Reduce imports Protect existing export earnings Create new export earnings Create jobs Other benefits: More innovators and entrepreneurs in New Zealand New connections between research and business More researchers inspired to tech-transfer Social, health and environmen tal benefits to NZ Financial returns to research organisation Jun-17 Page 10

Economic Impact Economic benefits resulting from a research programme may include: Creating new high-value jobs in New Zealand This typically includes jobs in knowledge- or technology-intensive industries. More high-value jobs are likely to drive further innovation and competitive advantage for New Zealand. Growing revenue for New Zealand firms, including through higher export margins Consider the degree to which a research programme will help a New Zealand firm and the degree to which profits are likely to be retained in New Zealand. Growing investment capital available to New Zealand firms and research organisations this may be a consideration where product or service development is likely to lead to an offshore trade sale, but where the recycling of capital back into New Zealand will provide benefit in the future. Protecting existing export earnings that already generate substantial economic benefits for New Zealand this could be a technology that doesn t grow an existing market, but lowers the risk of an existing market being lost resulting in a substantially reduced in export earnings. Earning income from licensing or selling IP offshore this may not directly benefit New Zealand unless it includes other initiatives that bring jobs or income to New Zealand. However, it can create export earnings and important relationships with offshore multinationals. Other impact considerations A research programme can have other important benefits to the economy that don t directly result in export earning or jobs created. Capability benefits are harder to evaluate and will usually be complementary to economic benefits. These may include: Vision Matauranga The opportunities created by the research to unlock the innovation potential of Maori knowledge, resources and people to assist New Zealanders to create a better future. Productivity of firms - The nature and extent to which a research programme could lead to productivity improvements in existing New Zealand firms or industries. Capability development A research programme can create opportunities for researchers to develop capabilities around innovation and tech-transfer that they may use in future research programmes or in the private sector to support business innovation. Private sector engagement A research programme can result in stronger relationships between research organisations and end users or firms. This can set a strong foundation for future research programmes to achieve successful economic outcomes. Social, Health & Environmental impact Programmes that generate economic impact often have social, health and environmental impacts that benefit New Zealand. Jun-17 Page 11

APPENDIX 1 - TECH-TRANSFER SUPPORT AGENCIES The organisations below can help research organisations with various aspects of tech-transfer. TTPs CPN partners KiwiNet Return on Science CDC Innovation EDAs Tech- Incubators Tech-transfer professionals (TTPs) include staff employed by research organisations to help researchers connect with businesses and funding (e.g. business development managers, investment managers, research offices and commercialisation offices). When to engage: It s never too early to talk to your organisation s TTP. Commercialisation Partner Network (CPN) is an MBIE supported initiative to drive better economic outcomes from commercialisation of publicly funded research. It s a free service for anybody pursuing tech-transfer with research organisations. The CPN includes KiwiNet, Return on Science and CDC Innovation. Kiwi Innovation Network (KiwiNet) (www.kiwinet.org.nz) is a network of public research organisations, working together to transform scientific discoveries into marketable products and services. KiwiNet runs a range of activities to support tech-transfer including tech-transfer training, industry engagement activities, an investment committee and access to PreSeed investment. Researchers from any organisation can present their ideas for feedback, advice and connections to the KiwiNet Investment Committee, which runs meeting around the country. When to engage: To access prototype funding, support or connections for research commercialisation. Return On Science (www.returnonscience.co.nz) is a MBIE supported programme that supports delivery of new research to market from universities, research institutions, and private companies. These services include connecting science and technology with experts, industry, investors and entrepreneurs. Researchers from any organisation can present their ideas for feedback, advice and connections to one of four specialist investment committees run by Return on Science: ROS Physical Sciences Investment Committee ROS Biotech and Life Sciences Investment Committee ROS ICT Investment Committee ROS Agritech and Agbio Investment Committee When to engage: To access support or connections for research commercialisation. CDC Innovation (www.cdc.org.nz/what-we-do/cdc-innovation) is an MBIE supported initiative to accelerate the commercialisation of innovation in Canterbury. They have networks through the local economic development agency, research organisations and investor networks. They can support researchers in Canterbury to connect with industry, investors and entrepreneurs. When to engage: To access support or connections for research commercialisation. Regional incubators, technology parks and Economic Development Agencies (EDAs), have good networks into their local business community and will often help researchers connect with businesses and end-users. Examples include ATEED in Auckland, Waikato Innovation Park in Hamilton, CreativeHQ in Wellington, CDC in Christchurch, BCC in Palmerston North, Upstart in Dunedin and others. When to engage: To connect with local businesses and entrepreneurs. Technology focused incubators are privately owned businesses focused on commercialisation of complex intellectual property primarily sourced from public research organisations, such as universities and Crown Research Institutes. The Jun-17 Page 12

Callaghan Innovation Global Expert Service PreSeed Business associations technology-focused incubators can access repayable grants from Callaghan Innovation for start-up companies they incubate. The tech-incubators include: Powerhouse Ventures - www.powerhouse-ventures.co.nz Astrolab www.astrolab.co.nz WNT Ventures www.wntventures.co.nz When to engage: To access investment and support for new start-up ventures. Callaghan Innovation is a government agency supporting hi-tech New Zealand businesses with services that researchers may find useful such as: Global Expert Service (see below). National Technology Network Managers and Cluster Managers work to connect businesses with research expertise. Business R&D Grants that can provide grants that businesses could use to tap into research expertise. Business connections They have extensive networks across many of New Zealand s most innovative businesses. When to engage: To get support for connecting with businesses and external experts, for student internships in business or for a business to get R&D funding. Run by Callaghan Innovation, this is a service to help find an expert in a certain field somewhere in the world. The process of finding an expert is free, however the experts will usually need to be paid to provide advice. When to engage: To connect with a global market or technical expert who can help set a research strategy, understand a market or engage with a commercial partner. PreSeed Accelerator Funding (PreSeed or PSAF) is provided by MBIE to support early stage technology commercialisation activities to maximise the commercial benefits to New Zealand from publicly funded research. PreSeed is also available to research organisations to support development of commercialisation capability and linkages with the private sector. PreSeed is a 50% matching fund. The following organisations hold PreSeed contracts with MBIE: UniServices University of Auckland Otago Innovation University of Otago Health Innovation Hub - DHBs Scion KiwiNet, on behalf: Universities: AUT, Victoria, Canterbury, Lincoln, Waikato Research orgs: NIWA, AgResearch, Plant & Food, ESR, Landcare, Cawthron, Callaghan Innovation RTS group. When to engage: Your TTP will help you determine the best point to access PreSeed. The CPN partners can also help. Various business associations can be a good source of market intelligence and enduser connections. There are a large number of levy groups in New Zealand such as DairyNZ, Horticulture NZ, AquacultureNZ, Foundation for Arable Research, NZ Pork, Beef and Lamb NZ, Federated Farmers, IrrigationNZ and Deer Industry NZ. Associations and independents research facilities often also have strong industry relationships such as NZBio, HERA, Cawthron, IRANZ and many more. When to engage: To access end-user connections and understand market needs. Jun-17 Page 13

VISION MATAURANGA Not every funding proposal is expected to contribute to the objectives of Vision Matauranga, but every proposal is expected to consider how it might contribute. Maori knowledge, people and resources create distinctive opportunities and experience distinctive challenges. Researchers preparing funding proposals are encouraged to consider how their research will address these challenges and leverage these opportunities to grow economic and social prosperity in New Zealand. For example: Health and Social Wellbeing - o Does your research address a distinctive health or social issue that disproportionately affects Maori? o What are the economic or social benefits of addressing the issue (e.g. improved quality of life, reduced government dependence and increased productivity)? o Are there organisations you can partner with who are particularly targeting this issue? Environmental Sustainability o Does your research address a significant environmental issue that overlaps with Maori interests (e.g. waterways, forests and farms under Maori governance)? o Are Maori organisations willing to support your research (e.g. access to facilities, cofunding, etc)? o How does partnering with Maori organisations create greater benefits to New Zealand? o Do Maori have distinctive knowledge or practices that support your research? Distinctive knowledge and resources o Does your research leverage distinctive Maori knowledge and/or resources to create commercial advantage for New Zealand products and services in global markets? o Are Maori organisations willing to support your research (e.g. access to facilities, cofunding, channel-to-market connections, etc)? Spillover benefits o Does your research develop new capability in Maori organisations that will accelerate future innovation? o Will your research increase Maori engagement with research organisations in future? Consider Provide evidence of the size and distinctiveness of the problem in New Zealand. Estimate the social or economic cost. Vision Matauranga does not mean: The ethnicity of your research team is not important unless it serves to reinforce the capability of the team. For example, a researcher of Maori decent may bring a distinctive understanding of the application space or channel-to-market connections. It is not important whether a business partner on your research programme is owned by Maori, unless this ownership provides access to distinctive Maori Knowledge and resources. What matters is partnering with business that can generate maximum direct and indirect economic and social benefits for New Zealand. Jun-17 Page 14

Useful contacts James, On 7 th July 2016 I met with: Prue Williams Prue.Williams@mbie.govt.nz Tamati Olsen Tamati.Olsen@mbie.govt.nz jez.weston@mbie.govt.nz I explained what we were trying to do with Vision Matauranga in the guide book. My main message was: It s a complicated space, better to send someone into a forest with a guide than just a map. We need to help people find mentors and contacts in this space. Tamati recommended the following: Hemi s group at Callaghan Innovation TPK Maori Business Facilitation Service - They have business mentors spread out across the country: https://www.tpk.govt.nz/en/whakamahia/maori-business-facilitationservice/regional-account-managers/ o The regional account manager I contacted was: Martin Mariassouce Commercial Development Manager (Northern) Hamilton DDI : +64 4 819 6000 M : +64 27 845 6189 Maori Trustee As far as I understand, these guys look after Maori Trusts that are too small to have their own administration. I m not sure they would eb that helpful, but you never know. I think it might be these guys, but not sure: http://www.tetumupaeroa.co.nz/themaori-trustee. I tried contacting them, but no luck. MPI Tamati suggested contacting Ben Dalton who is a deputy director at MPI and runs the Maori and partnerships group. I tried contacting him, but it might be worth emailing instead. Karen Clark Unlimited Ltd. I haven t tried contacting them yet. o Jun-17 Page 16