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Success Factors in Technology Transfer
Oxford Case Study
Tim Cook Director, Isis Innovation, University of Oxford
Visiting Professor in Science Entrepreneurship, Said Business School
Tim Cook
> BA Physics, DPhil Cryogenics - Oxford University> HNC Mechanical Engineering - Oxford Polytechnic> Diploma Accounting & Finance - Institute of Certified Accountants
> Managing Director of tech based companies (1983 – 90) 7 yrs> Oxford Analytical Instruments> Microsystem Design Limited > Micrelec plc
> Private Investor (1990 – 97) 7 yrs > Founding Managing Director Oxford Semiconductor > Founding Managing Director Oxford Asymmetry
> University Technology Transfer (1997 – 2007) 10 yrs > Director Isis Innovation, Oxford University (1997-2007)
> Visiting Professor in Science Entrepreneurship, Oxford University (2006)
Contents
Universities
Academics and Industrialists
Investors and Three Dimensions
Oxford Results and Tricks
Universities in a Commercial Environment
Speakers message
> Knowledge transfer is stimulating communication between very different cultures
> The cultures will not in general spontaneously understand each other> But there has always been the occasional multi linguist!
> Therefore intermediaries are required > at least to start with
> It only works if the intermediaries have a real understanding of both cultures
> There is not a single recipe that always works> But there are some underlying principles
What are Universities for?
> Research & Teaching> The creation and transmission of knowledge
> These both have a major economic impact> Creative thinkers (in science, arts and humanities)> A workforce trained in some useful areas
> But not all useful areas!
University Innovations
> Range from inventions & new processes to new philosophies & political thought
> Most of this talk is about the former but let’s not forget the others They may well have a more profound long-term impact on our lives
Why is it difficult 1 - Academics
> Universities have developed a self consistent set of values and behaviours which have enabled some of them to survive and prosper for a long time (Darwinian)
> This ethos can be summarised as:> The pursuit, preservation, development and dissemination of
knowledge
> Many of the most successful practitioners in universities are independent individuals who really see themselves as self-employed
Why is it difficult 2 - Industrialists
> The commercial world has also developed a self consistent set of values and behaviours. These can be summarised under two headings
> Internal coherence> All members of the company must have the same version of
the master plan and work to it
> Management accountability> The company is accountable to the shareholders and the
employees to the company
> These are not the same as university values
The Challenge
Researcher> Self directed> Next step defined by
yesterday’s results> Free exchange of ideas
Commerce> Driven by external needs> Clear goals with
shareholder commitments> Commercial confidentiality
So we can expect it will be challenging to build a mutually trusting relationship
“Academics never deliver” “Industry is out to cheat us”
Orthogonal Value Sets
Academic axis€ ->Research
2D Intermediary
Research -> Products
Commercial axis
Licence or consultancy
An additional challenge
> If we are talking about spinout companies, rather than consultancy or licensing there is a third axis
> In addition to academia and industry there are investors
> Investors are not the same as industrialists
Why is it difficult 3 - Investors
> Investors have yet a third set of values and behaviours, which again are self-consistent but differ from both industry and academia
> They evaluate an opportunity, invest, if it doesn’t perform they get out and try somewhere else > and what happens to the firm is not their responsibility
> These are not the same as university or industrial values
The third axis
Academic axis€ ->Research
€ -> €€€Investor axis
2D Intermediary
3D Intermediary
Spin-out
Research -> Products
Commercial axis
Licence
To summarise
If it’s not working get out
If it’s not working fix it
If it’s not working find a workaround
• Evaluate • Invest• Monitor
• Coordinated plan• Coherent activity
• Route is undefined at the start
Lots of concurrent activities
One companyOne major interest
OutsiderInsiderInsider
InvestorIndustrial ManagerAcademic
How it goes wrong
> A company signs a licence with a university> The company asks for a commitment that
> no-one in the University will work on anything that will devalue the company’s licence and
> the university will offer the company any improvements that any of its staff make to the original invention
> A year later a new academic joins the University who is a greater expert in the field than the original inventor
> Can the University tell him that all his future work in the field is restricted for the benefit of the company?
The clash
> This simple case exemplifies the issue:
> The Academic does not see himself as a “bound employee” he feels he is essentially an “independent trader”
> On the other hand the company has paid the University and can reasonably expect that the University will not devalue the product that it has sold
The common currency
> The only real common values between these different civilisations are personal relationships
> What about money?> Certainly they all deal in cash but the returns come in
multiple currencies with undefined exchange rates> Academic return> Personal cash return> Personal feel-good return
I would like to spend a bit if time expanding on this because I believe it is the most important point I have to make
Academics
> Academics are our shareholders> Isis Innovation is a wholly owned subsidiary of Oxford
University> Which is owned by the academics
> Academics are our customers> We only get to transfer knowledge from the ones who choose
to come to us
> Academics are our suppliers> Our raw materials are their inventions
> So they have big impact on our future prospects
Initiation by researchers
> All Isis Projects start with an approach from an academic
> Of course we devote much effort to internal marketing to researchers
> We make them welcome and they participate in all decisions but
> They have to decide to start any new project
A = fn (S, C)A = Attractiveness of project
S = Strength of science
C = Commercialisability of academic
Least attractive
Most attractive
Dr Quiet
Attracting Inventions
All the inventions in the University
0% 100%
The Beeson Gregory Project
> Oxford needed a new Chemistry building costing €90m> The Department had raised €15m> If the University matched it government offered €45m> So the University needed €30m
> Beeson-Gregory offered €30m for 50% of the University’s interest in Chemistry spinouts and licences for 15 years
> Was this a good deal for Oxford?
Requirements for intermediaries
> Must understand both value systems> Ideally should have lived in both
> Must be fluent in both vocabularies > And able to translate
> Must be trusted by both sides> So the academics will risk “being cheated”> And the industrialists will risk “having their time wasted”
Sources of intermediaries
> University technology transfer offices> As long as they employ bilingual staff
> Diplomatically adept property owners> Science parks, private developers
> Public sector (government officers)> If they really do understand both values systems
> The Professionals > Accountants, lawyers, consultants, investors, etc.> As long as they can suspend their self-interest long enough for
the creative interactions to start> Divisive advisors inhibit the process> Protect their client and kill the deal
Results in Oxford 1997-2007
36
330
280
55
0
50
100
150
200
250
300
350
400
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Year to March 31st
Lic
en
ces, C
on
su
ltan
cie
s
0
15
30
45
60
Sta
ff, S
pin
ou
ts
Staff in Tech TransferCompany
Cumulative licences
Cumulative consulting
Cumulative new cos
The difficulty
> In the long term it is in everybody’s interest
But
> In the short term the costs are from a single party
Culture Change
> All three must proceed together but the University must lead the change because..
> The ideas are in the University> If University provides TT resource,change will happen faster> Oxford pre-Isis 1 spin-out every 4 years, post Isis 8 per year
> If the University doesn’t lead, the University may not receive its share of the benefits
University entrepreneur culture
University & its technology transfer
resource
Local professional environment
Executive(policies)
Other academics
Gene pool Commercially
active scientists
The University
Tech transfer
office
StudentsBrokers
Itinerant managers Consultants
Sub-culture in a barter economy
VC’s Lawyers
Headhunters
PR agents
Realestate
LeasingBanks
Accountants
Specialist suppliers
Otherstart-ups
Message for Government
> We have some great universities> If you fund research you get more and better research> If you fund knowledge transfer you get more and better
knowledge transfer> This gives a better commercial return on the research
spend > and the return is disproportionately high
> because you are investing in an under-utilised asset (research results)
PS badly managed research, or badly managed knowledge transfer is a waste of money
but does not devalue properly managed research or knowledge transfer
Success Factors
Do> Expect it to be difficult> Work hard to understand the different civilisations> Invest in the interface> Use only intermediaries fluent in both value sets> Focus on building trust (particularly with researchers)
Don’t> Tell them to understand each other (they won’t!)> Think you will ever get it all right> Despair
“Managing” your relationship with a university
Walk along with the elephant> In whichever direction it chooses to go> Until it gets used to you
Start to pull gently on your rubber band If you pull too hard or too suddenly
> You will break your rubber band and> Have no further influence over the elephant
The UniversityYou
Like leading an elephant with a thin rubber band
But
> Don’t think you will ever have complete control
Cartoon by Stoney, Ravette Publishing +44 1403 711443 Tony Lopez (Copyright)
Contacts
Isis Innovation LtdEwert HouseEwert PlaceSummertown Oxford OX2 7SG
T 01865 340314E [email protected] www.isis-innovation.com