WORKSHOP 4: Development of new knowledge intensive sectors Funding and help for knowledge intensive projects Bob Hodgson Zernike (UK) Limited Bilbao February

WORKSHOP 4: Development of new knowledge intensive sectors

Funding and help for knowledge intensive projects

Bob HodgsonZernike (UK) Limited

BilbaoFebruary 2004

ZERNIKE (

UK)

Plan de Ciencia, Tecnología, Sociedad 2005-2008

ZERNIKE (

UK)

Structure

Structure and purpose

messenger key messages examples success factors

Bob HodgsonBilbao February 2004

Purpose

promote integration, differentiation and flexibility

ZERNIKE (

UK)

Messenger: Cambridge structure


CAMBOURNE

WEST UNIVERSITY

CAMPUS

ST JOHN’S INNOVATION CENTRE

CAMBRIDGE SCIENCE

PARK

PETERHOUSE

THE BABRAHAM INSTITUTE

GRANTA PARKMELBOURN

SCIENCE PARK

CAMBRIDGE

Small city region

Small high quality university

High level entrepreneurship

Private sector driven

ZERNIKE (

UK)

Thinking world class region


Greater Cambridge

Strengths:• World class research base• Dynamic high tech community• Specialist property

Weaknesses:• Congestion / greenbelt• Growing issues of affordability• Disparities across the sub-region

Bedfordshire and Luton

Strengths:• Research specialisms at Cranfield• Growing expertise in the

environmental sector• Expertise in manufacturing and light

engineering

Weaknesses:• Comparatively weak skills base and

a lack of entrepreneurialism• Some structural economic concerns

Milton Keynes / North Bucks

Strengths:• World class specialisms in

education and learning• Infrastructure for further growth• Focus for inward investment

Weaknesses:• Footlooseness• Skills

Oxfordshire

Strengths:• World class research base• Dynamic high tech community• Specialist property• High quality workforce

Weaknesses:• Congestion / greenbelt• IT Infrastructure• Labour and skills shortages

ZERNIKE (

UK)

Messenger: Zernike model


Integrated technology entrepreneurship

Specialist property

Seed and start-up funds

Business networks and globalisation

Consultancy and positioning

ZERNIKE (

UK)

It can be done ….. it must be done

Key messages

Passion

Willingness to pay

Make a market

Integrate flexibly but target assistance

Connections and flows not agencies and infrastructure

Differentiation and equity needed


Common experiences

Trust is at the heart of every success Some shared vision A language to communicate Incentives to motivate behaviour Building a history

Worry about sustainable business model Grant Capital Income

Build in market motivation and reward

Bilbao February 2004

ZERNIKE (

UK)

Bob Hodgson

ZERNIKE (

UK)

Everybody is doing it so is a moving target

Key features of knowledge enterprises scene

What needs to be integrated?

Skills

Money

Infrastructure

Information


The starting point is

What do these firms need?

What do these firms need?

ZERNIKE (

UK)


So the diagram becomes

WHAT HELPDO FIRMS

NEED

Money

Know-How

Information

Infr

astr

uctu

re

Bilbao February 2004 Bob Hodgson

The key characteristics of each need are

WHAT HELPDO FIRMS

NEED

Money

Know-How

Information

Infr

astr

uctu

re

Wideraccess

Longerduration

Physical

Policy

Technology

Aidprogrammes

Business

Markets

Lowercost

Corporatepersonnel

Professionalspecialists

Trainingfor skills

ZERNIKE (

UK)

Bilbao February 2004Bob Hodgson

With tools to help in each area

WHAT HELPDO FIRMS

NEED

Capital

Know-How

Information

Env

iron

men

t

Wideraccess

Longerduration

Physical

Policy

• Fairs & exhibitions• Communications• Special property• Transport

• Fiscal• Sector/cluster• Trade treaty• Legal framework

• C of C• Professional promotion• Entrepreneurs’ clubs

Technology

Aidprogrammes

Business

Markets

Lowercost

Corporatepersonnel

Professionalspecialists

Trainingfor skills

• Local presence• Regional programmes• National• Donor/ international

• Regulations &procedures

• Requirements/access

• Channels• Intermediaries• Networks

• Productperformance

• Processimprovement

• Energy efficient• Environmental• Innovation• Standards• TQM • Networks

• Registers & regulation• Training & standards• Consultancy Initiative

• Managing transition• Business growth• Investors in People• Fiscal incentives• Communications

• Entrepreneurship• Financial• Productivity• Marketing

• Investment credits• Second exchange• Business angels• Equity• Third Party Financing• International investment

• Banking efficiency &new technology

• Targeted grants• Retained income• Treasury management

• Factoring• Information• Asset registers• Guarantees • Leasing• Working capital


ZERNIKE (

UK)

Perspectives and dilemmas: firms

Innovate or die NTBFs global giants

Prime area for partnerships

Innovate and die cost minimizer buyer defined

commodity businesses

Product and service mix


ZERNIKE (

UK)

Where do firms look for technology and innovation?

Technology sources

Customers Capital equipment suppliers Competitors Shows and exhibitions Peer professionals . . . . Public agencies Universities


ZERNIKE (

UK)

Avoid current emphasis on spin outs

Contributions in order of significance:

Universities – contribution and role

Graduates Knowledge reservoir Facilities and equipment Magnet and networks Social and cultural Research and development


ZERNIKE (

UK)


Cambridge University roll call

Glaxo

SmithKline Beecham

Marconi

http://bizednet.bris.ac.uk/cgi-bin/loglink.pl?unilever+http://www.unilever.com/

http://www.hitachi.com/

http://www.microsoft.com/

http://www.aventis.com/

ZERNIKE (

UK)

A different model of leading edge development

Silverstone and Formula 1

Advanced engineering cluster Not university based Business innovation centre Funding and state aids…….

Competition and IP Events and engineering


ZERNIKE (

UK)


Differential research intensity

10%

0%

20%

30%

40%

50%

60%

70%

80%

90%

20% 40% 60% 80% 100%0%

Proportion of firms undertaking R&D

Ave

rage

pro

port

ion

of tu

rnov

er d

evot

ed to

R&

D

More extensive R&D

Mor

e in

tens

ive

R&

D

Biotechnology

Software R&D Consultancy

Instrumentation

Telecomms Services

ZERNIKE (

UK)

A process to develop high growth firms

Incubation and incubators

Climate and culture

Assistance pre launch

Launch and market

Harden and move on

Celebration and empowerment

Post graduate assistance and pay back


ZERNIKE (

UK)

Born or made?

Entrepreneurship

Illogical behaviour

Knowledge and skills can be added

Challenge for the trainer

Enterprise in education – Oslo example

EMSEN internal and external networks


> Market consolidation

> Market expansion

> Market penetration

> Product enhancement

> Sales & distribution

> Product development

> Marketing & research

> Prototyping

> Market definition

> Innovation & R&DTier 0 Tier 1 Tier 3 Tier 4 Tier 5Tier 2

Product Development Stage

The Commercialisation Cycle

Tier 3 - Post-incubation Funding Structuring Relationships etc

Tiers 4/5 - Commercial Maturity

Business Development Tiers

Risk Of FailureHIGH LOW

CommercialValue

R&DAngels/3F’s

Seed

VC/IIF

VC/Expansion

IPO/MBO/Trade Sale

SourcesOf Funding

Tiers 0/1 - Pre-incubation Direction Collaboration Guidance Resources etc Pre-Seed funding

Tier 2 - Incubation Mentoring Seed funding Contacts Consulting Clients

Fiscal approaches

ZERNIKE (

UK)

Entrepreneurs create firms in response to market needs

But they need help including from public incentives

Some examples of fund interventions

Great Eastern Investment Forum

White Rose Consortium

Regional Investment Funds


ZERNIKE (

UK)

Making a place of exchange

Great Eastern Investment Forum

Forum to bring together those with ideas and those with capital Ideas helped to become investment ready Led to elevator pitch Forum meets for breakfast each month Web site and open access Lots of investment results No public role


ZERNIKE (

UK)

Competitive funding for university spin outs

White Rose Consortium

Competitive bid for university challenge funds Consortium of three universities York Sheffield Leeds 3 million euro Managed by private agents After proof of concept and before seed Emphasis on biotech


ZERNIKE (

UK)

Filling the equity gap

Regional Venture Funds

3Fs and angels below 300,000 Commercial funds above 1.5 million Gap in between Regional partnership funds Leverage State aids problems Commercial behaviour


ZERNIKE (

UK)

Typical model: Callon et al


ActorsFinancial servicesMinistries ....

ActorsDevelopment andDesign Dept

ActorsMarketing DeptManufacturingDept .......

ActorsLaboratoriesCollective R&Dcentres .....

ActorsAcademic lab.Industrial researchcentres ....

ActorsFirmsCustomers....

SCIENCE POLE

TRANSFER POLE

FINANCIAL POLE

MARKET POLE

DEVELOPMENT POLE

TECHNOLOGICAL POLE

ActorsFinancial servicesMinistries ....

ActorsDevelopment andDesign Dept

ActorsMarketing DeptManufacturingDept .......

ActorsLaboratoriesCollective R&Dcentres .....

ActorsAcademic lab.Industrial researchcentres ....

ActorsFirmsCustomers....

SCIENCE POLE

TRANSFER POLE

FINANCIAL POLE

MARKET POLE

DEVELOPMENT POLE

TECHNOLOGICAL POLE

ZERNIKE (

UK)

Typical model: Kline-Rosenberg


R E S E A R C H

K N O W L E D G E

C O R P O R A T E

Potentialmarket

Invent Design Produce Market

R E S E A R C H

K N O W L E D G E

C O R P O R A T E

Potentialmarket

Invent Design Produce Market

ZERNIKE (

UK)

To summarise what is needed


Purpose - having a clear shared vision of future

Language - being able to talk to each other

Incentive - funding to lubricate and rewards

History - no substitute for doing it

USEFUL TOOLS

Exactly this sort of exercise

Do it with passion

Documents

WORKSHOP 4: Development of new knowledge intensive sectors Funding and help for knowledge intensive projects Bob Hodgson Zernike (UK) Limited Bilbao February