Technology Transfer:an Industry PerspectiveFederal Laboratory Consortium Mid-Atlantic Regional MeetingOctober 24, 2007

Robert J. CoraorAir Products and Chemicals, Inc.

2007 Air Products and Chemical, Inc.

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Who Is Air Products? Global atmospheric, process and

specialty gases, performance materials,equipment and services provider

Serving industrial, energy, technology andhealthcare markets worldwide

Fortune 500 company

Operations in over 40 countries

>20,000 employees worldwide

Known for our innovative culture andoperational excellence

Corporate responsibility commitment

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Innovation-Driven

FY’06 R&D spending: $151 million

Focus on creating value in highgrowth / emerging markets

Applications focus is at the heartof our brand

Alliances / technology partnershipswith universities, labs, consortia,other companies

Investments in venture capital fundsto gain technology access

Open Innovation approach

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Sales into Diverse Markets

~$9B in sales

Diverse markets and geographies

Positioned for long-term value creation

FY06 Consolidated Sales

By Reporting Segment

MerchantGases (31%)

Chemicals

(10%)

By Destination

United States(49%)

Asia (16%)

Europe(29%)

Rest of World (2%)

TonnageGases (25%)

Healthcare(6%)

Electronics and Performance Materials (22%)

Equipment and Energy

(6%)

Canada/LatinAmerica (4%)

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Four Global Businesses

Tonnage Tonnage Gases, Gases,

Equipment and Equipment and EnergyEnergy

Merchant Merchant GasesGases

Electronics and Electronics and Performance Performance

MaterialsMaterials HealthcareHealthcare

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Changes in Innovation

Businessneeds

Ideas

Res. Dev. Commercialization

NewProducts/Processes

Scale-up

FROM:FROM:

Companies

Universities

Government Labs

NeedsIdeas

Products &

Processes

APCICommercialization

GlobalNetwork

APCIR&DTO:

Air Products in 1995

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(FROM:) Closed Innovation

Science and Technology

Base

The Market

Research Development

ResearchInvestigations

Development New Products/Services

Chesbrough in 2003

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(TO:) Open Innovation

Internal Technology

Base

CurrentMarket

Research Development

Technology Insourcing

External Technology

Base

NewMarket

Other Firm’s Market

Universities OutsideCapital

Acquisitions

Licensing

Technology Spin-offs

Chesbrough in 2003

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Drivers for Technology Partnership Leveraging in 1995

New ideas / perspectives to feed the pipeline Add complementary strengths / fill missing

competencies Pre-competitive collaborative areas Solve common problems Spread risks on high-impact, high-risk areas Monitor leading edge technologies Access to best skills and capabilities Accelerated development / commercialization cycles Lower costs

Drive for external sourcing becoming more evident today….

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The message is….

“Companies can find vital knowledge in customers, suppliers, universities, national labs, consortia, consultantsand even start-up firms. Companies must structure themselves to leverage these distributed pools, insteadof ignoring them in the pursuit of their internal R&Dagendas.”

Henry Chesbrough

External Resources

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Outside Inside

Do nothing

wait

watch

search

Technology Transfer

contract research

joint development

strategic alliance

acquire

attract

External Resources – External Resources – Spectrum of InvolvementSpectrum of Involvement

license

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HOW: External Technology Global Sourcing of New Ideas Internal technology teams

– Centers of excellence– Tech service teams

Customers

External partners– Universities– Institutes– Government labs– Venture capital fund (e.g., NGEN)

“The Web”– Emerging technology identification (ETI)– Corporate Web site

Technology Fairs – (e.g. WBT, DOE Opportunity Forum)

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ETI Technology Alerts - External Information Sources R&D newswires and press releases

(EurekaAlert, Science Daily, Unisci)

University Tech Transfer Offices

Rare/unusual technical journals(Croatica Chemica Acta, Chemicke Listy, Hungarian Journal of Industrial Chemistry)

Federal Government Programs(NSF, SBIR, DOE, etc.)

Universities, national laboratories, and small R&D companies

Newsletters and other “gray” literature

Consultants & Tech Transfer Conferences

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How we do it…. External Sources

University Connections– xxxxxxxxxxxxx– xxxxxxxxxxxxxxxx– xxxxxxxxxxxxx– xxxxxxxxx– xxxxxxxxx

Federal Laboratories– Argonne– Sandia– Naval labs– Air Force labs

Contract Research– xxxxxxxxxxxx– Xxxxxxxxxxxx– xxxxxxxxx

Government Programs– PITA – California Discovery Funds– NSF Matchmaker– NASA Tech Fusion – DOE Opportunity Forum

Small Company JDAs and Investment

– zzzzzz– Zzzzzzzzzzz– zzzzzzz– zzzzzzzzzzzz

Other Countries– Institute of xxxxxxx– Other institutes– Chemical manufacturers

Networking Opportunities

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IP and Open Innovation

External Technology • Universities• Venture Funding• Partnerships• Alliances

Enabling and Support for SBU• Identify/source• Contract mgmt• License in/JDA

Examples• University “A” • Fed Lab “B’ • Univ “C”/Univ “D”• ….

Licensing • Sorting• Selecting• Marketing/Offering• Executing

Support SBU

Examples• License to “A”• License to “B”….

IP Management • Idea Expansion• Assist Inventors• Business Development• Another set of eyes

Support SBU• Claims review• Maintenance

Examples• Technology “X”• Technology “Y”• …..

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Using Networking Opportunities

Association of University Tech Transfer Managers (AUTM)

Licensing Executive Society –(LES)

IRI – External Technology Directors Network (ETDN)

IRI – New Business Development Network

NGEN venture fund

NSF Matchmaker program

DOE Opportunity Forum

World’s Best Technology Showcase

Coalition for Commercialization of Applications of Superconductivity (CCAS)

Product Development and Management Association (PDMA)

Federal Laboratory Consortium (FLC)

Collaborating with Federal Laboratories

……a conversation with the IA Management Team

July 26, 2007IAM Management Team Meeting

R. Coraor

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Federal Labs are more than National Laboratories Dept. of Defense – Army Army Research Institute for Behavioral and Social SciencesVirginiaMid-Atlantic Dept. of Defense - Air Force 30th Space WingCaliforniaFar West Dept. of Defense - Air Force AFRL - Directed Energy DirectorateMinnesotaMid-Continent Dept. of Defense - Air Force AFRL - Human Effectiveness DirectorateOhioMidwest Dept. of Defense - Air Force AFRL - Information DirectorateNew YorkNortheast Dept. of Defense - Air Force AFRL - Materials and Manufacturing DirectorateOhioMidwest Dept. of Defense - Air Force AFRL - Propulsion DirectorateOhioMidwest Dept. of Defense - Air Force AFRL - Sensors DirectorateOhioMidwest Dept. of Defense - Air Force AFRL - Space Vehicles Directorate - Hanscom AFBMassachusettsNortheast Dept. of Defense - Air Force AFRL - Space Vehicles Directorate - Kirtland AFBNew MexicoMid-Continent Dept. of Defense – Army ARL - Vehicle Technology Directorate - Structures ProgramVirginiaMid-Atlantic Dept. of Agriculture ARS - Beltsville AreaMarylandMid-Atlantic Dept. of Agriculture ARS - Mid South Area MississippiSoutheast Dept. of Agriculture ARS - Midwest AreaIllinoisMidwest Dept. of Agriculture ARS - North Atlantic AreaPennsylvaniaMid-Atlantic Dept. of Agriculture ARS - Northern Plains AreaColoradoMid-Continent Dept. of Agriculture ARS - Pacific West AreaCaliforniaFar West Dept. of Agriculture ARS - South Atlantic AreaGeorgiaSoutheast Dept. of Agriculture ARS - Southern Plains AreaTexasMid-Continent National Science Foundation Advanced Technology for Large Structural Systems CenterPennsylvaniaMid-Atlantic Dept. of Defense - Air Force Air Force - 311th Human Systems WingTexasMid-Continent Dept. of Defense - Air Force Air Force - AFRL - Air Force Office of Scientific ResearchVirginiaMid-Atlantic Dept. of Defense - Air Force Air Force - AFRL - Air Vehicles DirectorateOhioMidwest Dept. of Defense - Air Force Air Force - Aeronautical Systems CenterOhioMidwest Dept. of Defense - Air Force Air Force 30th Space WingCaliforniaFar West Dept. of Defense - Air Force Air Force AcademyColoradoMid-Continent Dept. of Defense - Air Force Air Force Center for Environmental ExcellenceTexasMid-Continent Dept. of Defense - Air Force Air Force Civil Engineer Support AgencyFloridaSoutheast Dept. of Defense - Air Force Air Force Flight Test CenterCaliforniaFar West Dept. of Defense - Air Force Air Force Institute of TechnologyOhioMidwest Dept. of Defense - Air Force Air Force Medical ServiceDistrict of ColumbiaMid-Atlantic Dept. of Defense - Air Force Air Force Research LaboratoryOhioMidwest

Plus 225 more at http://www.federallabs.org/labs/results

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How: National LaboratoriesInnovation on Tap High levels of expertise and capability A mission to commercialize through

collaboration with industry Technologies are often more mature than

university research

ARGONNE

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Office of Research and Technology Applications (ORTA)

Each Federal Lab with 200 or more technical positions is required to have an ORTA

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Air Products External Collaboration Award Presentation

Recognize globally

– Acknowledges partner bringing high value

– Initiated in 2002– Includes Federal

Labs Argonne National Laboratory

2006 Awardee

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When Do We Consider External Innovation Sourcing?

Primarily

But never sayNever orAlways!

Development Process – generic view

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Moving into the Future

Companies that remain internally focused to meet strategic technical needs

– Will be left behind

Reward technical community for solving problems - not just inventing

– Change from “Not Invented Here” (NIH) to “Proudly Found Outside” (PFO)

The fraction of R&D budget dedicated to open innovation will increase in growing companies

Reach out globally to build relationships

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Summary Conclusions & Take Aways Match strategic needs with partner strengths

Insure alignment of goals

Build a flexible but formalized agreement

Develop personal relationships– Build openness and trust

Create & document a work process– Efficiency– Consistency

Communicate, communicate,communicate

Thank you

tell me morewww.airproducts.com