Growing Competitiveness through support for Innovation, Research and Development

1. Growing Competitiveness through support for Innovation, Research and Development Professor Tim Cook, Oxford University Managing Director, Isis Innovation Visiting Professor in Science Entrepreneurship Said Business School, Oxford

2. Contents • Economic contribution from higher education • What are universities really for? • The challenge of cross-cultural communication • Catalysts to support technology transfer

3. UK Higher Education generates • 350 000 jobs directly (300 000 full time equivalent) • For every 100 Higher Education jobs 89 generated are from knock on effects • 560 000 f.t.e. jobs through direct and knock-on effects • 2.7% of UK workforce in employment • €53 billion of output http://bookshop.universitiesuk.ac.uk/downloads/economicimpact.pdf Rounded figures!

4. 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!

5. 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

6. The third stream • Since 1997 UK national government has become increasingly aware of a very useful by-product from universities • The so called third arm, third leg, third stream • I.e. inventions with commercial potential

7. Before 1997 • 1950 Treasury Circular 5/50 (TC5/50) • Government claims rights to Intellectual Property from publicly funded research • 1985 Thatcher Government rescinds TC5/50. • Universities that can commercialise IP will own inventions funded by the taxpayer • Universities were free to commercialise • But no public resources available • Odd scattered initiatives but not much money

8. Since 1997 • Increased government support • 1997 Biotechnology Exploitation Platforms • Mar 98 University Challenge Seed Funds €75m • Feb 99 University Science Enterprise Centres €45m • Jun 99 Higher Education Reach-out to Business €132m • Dec 01 Higher Education Innovation Fund 1 €120m • Dec 03 Higher Education Innovation Fund 2 €300m (2 years) • Mar 06 Higher Education Innovation Fund 3 €357m (2 years)

9. U.K. tech transfer 1982 - 2000 • 1982 • Universities started to open technology transfer offices • 1995 onwards • Steady rise in technology transfer • Change of government 1997 • By 2000 • Majority of institutions had dedicated personnel (1>36) • Most have a tech transfer office or company • 90 belong to UNICO – www.UNICO.org.uk • Some belong to AUTM - www.AUTM.net

10. 1 2 3 6 8 8 7 3 4 6 Companies Started with Isis support OGT Opsys Prolysis Oxxon Mindweavers Ox Ancestors Zyentia ReOx OMD Ox. Nanolab Synaptica Celoxica Dash BioSensors Novarc Oxitec Riotech G-Nostics RF Sensors Avidex Oxonica Biosignals Ox ArchDigital Immunote OCSI Surface T Oxbr. Pulsars Abington TolerRx NaturalMotion ORRA EKB Ox. Catalysts OMIA OXIVA Inhibox Glycoform Celleron ThirdPhase PharmaDM Pharminox BioAnalab TdS OxLoc Minervation VASTox Ox Bee Co Spinox Isis Innovation 1997 - 2006 Y/E Mar 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 University investment £0.04 £0.3 £0.5 £1.0 £1.0 £1.0 £1.0 £1.0 £1.2 £1.2 £m p.a. Staff 3 9 9 17 21 23 34 36 36 33 Projects 168 243 319 415 476 629 725 764 784 Patents filed 31 51 55 63 82 65 52 55 50 Licence 4 8 18 21 36 42 37 31 38 44 Consultancy 34 50 48 51

11. UCSF FSMA Isis staff, spinouts, licences & consultancies

12. Oxford University Economic Impact • 8% of Oxfordshire’s employment • University colleges and students inject • €723 000 p.a. into local economy • €411 000 p.a. local disposable income

13. Universities Inventions are not new • Over the years there have been lots of useful inventions from universities: • Cephalosporin came out of Oxford just after the war • Monoclonal antibodies from Cambridge • What is new is the increasing effort and resource being spent on maximising the transfer of ideas

14. Maximising Economic Impact • If we accept that university innovations are a resource for economic development and • This resource is currently underutilised • It might be useful to look at why • and what we can do about it

15. Researcher Self directed Next step defined by yesterdays results Free exchange of ideas Commerce Driven by external needs Clear goals with shareholder commitments Commercial confidentiality The Challenge • “Industry is out to cheat us” • “Academics never deliver” • So we can expect it will be challenging to build a mutually trusting relationship

16. 2D Intermediary Commercial axis Licence Academic axis Orthogonal Value Sets Research -> Products £ ->Research

17. 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”

18. 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

19. The difficulty • In the long term it is in everybody’s interest But • In the short term the costs are from a single party

20. 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

21. 2D Intermediary Commercial axis Licence 3D Intermediary Spin-out Academic axis Investor axis The third axis Research -> Products £ ->Research £ -> £££

22. Conclusions • More commercial benefits can be extracted from Universities • But let us not turn universities into contract research companies • Its worthwhile teaching academics about industry and teaching industry about universities • So they can communicate constructively but.. • It is generally a waste of academics to turn them into industrialists & • It is generally a waste of industrialists to turn them into academics • Multi-lingual intermediaries make a difference • Positive if they are competent • Negative if they are not competent • Science parks & intermediaries can contribute to this interface and benefit from it

23. Contacts Isis Innovation Ltd Ewert House Ewert Place Summertown Oxford OX2 7SG T 01865 280830 F 01865 280831 E innovation@isis.ox.ac.uk www.isis-innovation.com