There is no shortage of advice for academics who want to spin their research out into a new business. A lot of that wisdom is based on experience and conventional wisdom rather than detailed studies of the process. Nothing wrong with that, but it helps to have some numbers to support the current enthusiasm, in the UK at least, for university spinouts. That’s why it is interesting to read the latest issue of the journal R&D Management.

In their paper “Commercial exploitation of new technologies arising from university research: start-ups and markets for technology” R & D Management , Volume 37 Issue 4 Page 319-328, September 2007, Fred Pries and Paul Guild report on a study of 57 “public start-up firms created to commercialize the results of university research”. The reason why this paper is particularly interesting is that the researchers have compared start-ups built around products with those that set out to commercialise a technology.

The advice to most academics wanting to bring their science to market is that they should find a product that they can make. Science looking for problems is, says the conventional wisdom, unlikely to succeed. Pries and Guild found that this isn’t always the case. In their paper they distinguish between “startups that operate through product markets and start-ups that operate through markets for technology”.

There’s a clear difference between how the two sorts of businesses make their money. “When a start-up operates through product markets, it produces goods or services based on the new technology.” So it is likely to get revenue from selling products and from contracts for products or services. “When a start-up operates through markets for technology, it is expected to derive its revenue primarily from intellectual property-related sources.”

If a start-up is in the products business, then it has to be involved in technology development and production. For a technology start-up, the idea is to be involved in technology development while the businesses that plan to use the knowledge will carry out product development.

Pries and Guild decided to look at the two different types of business because they thought that too much attention had gone to the product start-up. In the event, they found in their survey of a sample of new businesses in Canada and the USA that while product oriented businesses made up about a half of new start-ups, technology firms “represent 14% of the start-ups examined and 20% of those that have emerged from development stage”.

These results, they say, “demonstrate that operating through markets for technology is a common and viable method of commercialization for start-ups”. They found big differences in the activities of the two types of firms.

Among the lessons that they draw from their results is the need for “commercialization models that reflect the existence of markets for technology”. There is a message there, then, for the ‘knowledge transfer agents’ in universities and elsewhere.

They also suggest that there should be research into the choice of “operating through product markets vs. markets for technology in commercializing the results of university research”.

The fact that there are different role models for innovative businesses should be grounds for thinking about the best way to bring ideas to the market. The automatic ‘think product’ advice may not always be valid. Are there, the paper asks, “different ways to operate through markets for technology?” For example, “It may be possible, for instance, for start-ups to retain ownership of the rights to a technology while letting established firms acquire limited rights to use the technology through, for example, non-exclusive licenses.”

After all, as they say, “University researchers forming start-ups to commercialize technologies they invent may have technology development skills but typically lack product development and business development skills.”

Pries and Guild suggest that “a strategy of operating through markets for technology is a more focused approach than a strategy of operating through product markets and may pose less risk and require fewer resources”.

There is another issue for that universities should consider. “For some early stage technologies, a viable strategy may be to use start-ups as a method of financing technology development before licensing the technology to established firms. Universities typically do not have the resources to finance technology development but use of a start-up may provide a method of accessing capital for technology development from venture capitalists or public markets.”

The paper doesn’t mention this, preferring to focus on lessons for the spinners out, but there could also be lessons here for the people who back those start-ups. Perhaps they should pay more attention to researchers who want to shift technology rather than stuff.

Yet more research into local innovation comes from the National Governors Association (NGA) in the USA. Janet Napolitano, Governor of Arizona, now chairs the NGA and has made “Innovation America” the them for her term of office.

As a part of this activity, the NGA asked the Pew Center on the States to look into the issues that states face. The result is a set of reports on aspects of innovation.

The catalyst for the activity is no surprise. “Huge new overseas competitors like China and India are competing for the same pools of cash and people as California, Indiana and the rest.”

One of the reports, Innovation America: Investing in Innovation, has some useful guidelines on how to succeed in this business:

Develop a statewide research and innovation strategy that not only puts in place all the components for innovation, but aligns them in ways that provide advantages to in-state companies;

Make investments to gain talent, build topnotch research enterprises and compete for federal dollars in those focused areas where the state can be world-class;

Encourage, even mandate, collaboration among universities, the private sector and other institutions;

Put world-class professionals, not political pals, in key positions;

Create an organization and consistent funding source that facilitates a continuity in R&D partnering and spending; and

Hold the recipients of public investments accountable for delivering on promised benefits.

Number four on the list will come as a surprise to many in Europe where we don’t talk about putting “political pals” in charge. Whether or not it happens is, of course, another issue.

The NGA’s web site also lists Recent State Initiatives to Promote Innovation. Interestingly, many states begin with initiatives in education. Others are active in creating the infrastructure needed for innovation, such as universal access to broadband telecoms.

Hawaii, home of the famous guitar, has come up with an interesting one and has “invested in its creative industry by developing a Music Enterprise Learning Experience, which will apply the successful ‘Nashville’ model from Belmont University to build the technical and business skills of native musicians”.

Another of those much loved statistical blasts showing how good the UK’s higher education institutions (HEIs) are at knowledge transfer has just surfaced. You can read the take of the Higher Education Funding Council for England (HEFCE) in its annoucement Spin-offs rise as business-HE links flourish.

Among other headlines, we read that the HEIs’ income from “intellectual property” has risen by 51 per cent since 2003/04. And after a fall from 161 to 148 between 2003/4 and 2004/5, it went back up to 187 in 2005/6.

The smallest increase over the period, just 5 per cent, was in “Contract research income from commercial business”. This went up from £287 million to £300 million.

The new Department for Innovation, Universities and Skills (DIUS). which seems to have picked up this bit of the R&D portfolio, has put out its own announcement, Spin offs rise as business-HE links flourish. The obligatory ministerial quote, from Bill Rammell, Minister for Lifelong Learning, Further and Higher Education, tells us that “UK businesses clearly recognise they can improve their performance by drawing on the knowledge and skills within higher education, with commercial business spending over £300 million on contract research and a further £115 million on consultancy in 2005-06.”

The announcement of the performance of the HEIs coincides with publication of the Third Annual Survey of Knowledge Transfer Activities in Public Sector Research Establishments (PSREs). DIUS’s press release tells us that “public sector research bodies were also boosting their interaction with business, with increases in the number of licenses and spin outs since the survey began in 2003-04 and £186m being generated in 2005-06 through IP licensing agreements”.

They have now mended what was a broken link for this report. So now anyone can read the tea leaves.

The medical community has always resorted to language that baffles the rest of us when describing its science, but you would have thought that they might try to get on to the same wavelength when talking about something like knowledge transfer. This does not seem to be the case, as you will find if you consult the document Accelerating the Translation of Medical Research.

A report of a workshop, the first thought might be that it is something to do with communicating with foreigners. This didn’t seem likely, so we sought another meaning. Reading the document we find that it talks about “translational research”.

This turns out not to be an arcane area of molecular biology but, it seems, the process by which research gets turned into something useful to the outside world. The clue comes in the description cooked up by the MRC’s Clinical Research Advisory Group which describes translational research as

“the process of the bidirectional transfer of knowledge between basic work (in the laboratory and elsewhere) with that of the person, in health or disease.”

It is then, better described as the “translation of research”.

Or is it? Read on and they may be talking about the research that has to happen to take up a piece of research and to translate it into something useful.

If this is what they mean, then the medics have, once again, devised a new way of talking about something that the rest of the research community happily discusses, and does, without any need for fancy jargon.

Does any of this matter? Not if they are talking among themselves, but if they want the people who might want to take research and translate it into new drugs, medical technologies our clinical routines, then there’s a good chance that the audience gets lost very quickly.

They could start with adopting a phrase that cuts out gibberish like “bidirectional transfer of knowledge”. They could just borrow a phrase of increasing popularity, “knowledge exchange”.

The “exchange” word doesn’t just convey the “bidirectional” flow of the knowledge, it also hints that it can flow in other directions. Around a triangle for example, which may be a good model if you are taking about something like medicine, which depends on regulators as well researchers and innovators.

As to the document itself, it repeats some familiar lessons. There is nothing wrong in that, especially given the changes that are under way in health research in the UK following the Cooksey report.

The MRC’s document says that the council should “continue to build on its high quality basic research portfolio but a much greater focus must be placed on the management of the findings from MRC funded research. Resources needed to be provided for the proactive brokering of partnerships between researchers and research users and for catalysing bottlenecks in the process in order to facilitate translation.”

They could add to this resources to make their output a bit more business friendly.

Read on in the document and you will find some of the usual messages.

The research environment in academia does not encourage knowledge transfer. This type of activity is not supported generally by major research funders and is not recognised in the RAE process.

There is much more like this, and in more detail. All in all, an interesting insight into some of the things that the combined MRC/NHS research operation will have to do if they want the UK to reap greater returns from its investment in medical research. Of course, they have to add to that lists of tasks something about avoiding confusing jargon.

Hot on the heels of the news from the USA that the Department of Homeland Security has lots of money to spend, comes an announcement that QinetiQ, the UK’s defence technology business, “has secured from the MOD’s Research Acquisition Organisation a five-year, £9.3m programme to engage with industry and academia and focus on de-risking future procurement and raising technology readiness levels (TRLs) for the development and exploitation of advanced Electronic Surveillance (ES) technology.”

While it does not really explain what they mean by “derisking,” or “technology readiness levels,” the press release, QinetiQ wins £9.3m / five-year Future Electronic Surveillance Programme, does tells us that “As part of the programme QinetiQ will engage with industry, small and medium enterprises (SMEs) and academia to establish where capabilities can be exploited to enhance innovation and raise TRLs, and to optimise the exploitation route into service.” So there may be some opportunities for the UK’s technology upstarts to chip in, if, that is, they can unravel that jargon.

Researchers are great at rebadging their work to fit in with whatever subjects are currently fashionable. Look no further than “nanotechnology” for proof of this.

Many researchers in the USA are now climbing aboard the “homeland security” bandwagon. A report on Washington Technology, DHS to spend $60m on R&D for new technologies, shows why. This reports that the Science and Technology Directorate of the Homeland Security Department’s will spend $60 million on “research and development of innovative border and maritime security technologies and border officer safety tools through fiscal 2011″.

The ideas knocking around include such wacky notions as a buried “optical tripwire” that will alert the authorities to clandestine entries into the country. Big place the USA, lots of border to monitor.

The real opportunities there could be in sorting out the data that the tripwire churns out. How do they know that the brown bear sneaking in from Canada isn’t Osama bin Laden? Could be openings there for the signal processing brigade.

In the UK at least, there is less emphasis on homeland security, even though we seem to get a bit more attention from crazed bombers.

There is plenty going on in the security area in the UK and elsewhere in Europe. It just doesn’t assemble under a chest beating label. Let’s hope that researchers here are aware of the opportunities.

It is almost obligatory to trot out the cliche about the “not invented here” (NIH) syndrome whenever writing about innovation. It is now so much a part of the perceived wisdom that The Economist can use the crosshead “Not invented here, and very welcome” in a recent article on Apple, the computer company, Innovation | Lessons from Apple.

Is there, we wonder, any evidence to substantiate the idea that companies reject ideas from outside? Maybe that was once the case, when companies maintained R&D operations that were better than many a university lab. But with the death of the corporate lab, and the acceptance that universities are nearer to the frontiers of science, maybe the time has come to ask if this lazy jibe still has any substance.

This is not to get at The Economist, which uses NIH in a very different way, showing that Apple goes out of its way to learn from others. At the article puts it, Apple’s “skill lies in stitching together its own ideas with technologies from outside and then wrapping the results in elegant software and stylish design”.

So, back to the point. Is there any evidence of the continued existence of NIH? Come to that, how would you measure this tendency?

There are some seriously good analysts around of the R&D scene. It would be nice to know what they say about NIH.

There seems to be a mania for producing “atlases” of strange things. We recently saw one on nanotechnology in the USA, and now the EU has chipped in with The Atlas of Ideas. This one, ” the outcome of an 18-month study,” once again raises the spectre of China, India and South Korea.

One of the reports recommendations as that the EU should “unleash mass collaboration”. This naturally raises questions as to how you can compete if you share everything in sight. Will calls for the EU to beef up its R&D spending deliver benefits at home or away?

The answer is that it isn’t so much the R&D that matters, but what you do with it. According to this write up, the report seems to recognise this. calling as it does for the EU “to double the share of the budget devoted to ‘competitiveness for growth and employment’”.

They may not be on the road to nation status yet, but the Scots continue to set themselves apart in the biotech business. In their latest move, they have persuaded the “largest dedicated life science property specialist in North America” to invest in its first foreign property development.

The announcement of the deal, Research Centre to Boost Economy, boasts that “the project is expected to generate an additional £350 million per annum for the Scottish economy with the development creating one of Europe’s top centres for biomedical research”.

The development, next to the Royal Infirmary of Edinburgh and the university’s Queen’s Medical Research Institute, already has planning permission for around 1.4 million square feet of academic, institutional and commercial life science space.

Anything this big naturally needs a name. Perhaps worrying that something truly different would upset people, so it is not known as the Edinburgh Bioquarter.

No company can ignore the environment. It isn’t just that they live in it, but they have social responsibilities and legal obligations. Then there are the chances to make money. So it makes sense to check out another new report from the OECD,
Business and the Environment.

The book provides “an assessment of the effects of environmental policy and other factors on environmental management, performance and innovation”. It is based on a survey of business. One finding is that “70% of facilities reported that they had designated somebody as being
explicitly responsible for environmental concerns within the facility”.

It used to be that university professors set out to produce clones of themselves, more men (sic) who would go on to do research in a university. This has changed a lot in recent years, perhaps because more profs really that there is life elsewhere. More likely, though, their own experiences with bringing their own ideas to market have made them aware that innovation can be fun, but that it also needs some skills that you won’t get in the average university degree.

Cambridge is one of the universities that has put a lot of effort into “education for innovation”. It’s latest move is to fund places for physics and engineering students on “an innovative entrepreneur programme”.

It all happens at The Centre for Entrepreneurial Learning.

The US government seems to have gone off spending money on R&D. The latest projections from the US National Science Foundation (NSF) tells us that “Real R&D funding from the business sector increased 4.9% in 2006, whereas real R&D funding from the federal government did not change significantly.”

• Trawling: making in-house information explicit, particularly information that is not known to be there.
• Mining: extracting explicit intelligence information from internal resources such as libraries and databases.
• Targeting: focusing on new technologies outside the company and monitoring their development.
• Scanning: keeping abreast of any unforeseen developments beyond the firm that could have an impact on the business.

“Often technology, market and competitor information is collected separately. It is important to encourage communication between the three areas as both market and competitor intelligence can contribute valuable information about new technologies.”

• How can the rate of innovation be increased to enhance economic growth and competitiveness, while the direction of innovation simultaneously steered to achieve social and environmental sustainability?
• What are the options for public policy at different levels to increase innovation and steer towards such policy objectives?
• What economic, social and managerial factors enable an economy such as the UK to best capture high value from increasingly global innovation processes?
• How is it best to model and measure emergent innovation activities and systems?

• £40 million for advanced manufacturing projects - including design engineering technology to boost competitiveness and sustainability in sectors such as aerospace, vehicles and energy.
• £15 million for energy technologies - both renewable low-carbon options and ensuring the continued production of hydrocarbon reserves
• £15 million for lightweight materials
• £5 million for plastic electronics - to build on the UK’s current competitive edge in this field.
• £7 million to areas of medicine which bring together materials, nanotechnology, tissue engineering with surgical and clinical sciences.
• £8 million for ICT - developing technologies to support better networked business

“This has gone further than we expected and along with the establishment of the specialist R&D units reflects the GovernmentÕs enthusiasm for encouraging innovative activities in the UK.  Even after taking into account the various changes in the corporation tax rates in the coming years, the net benefit of the relief should be greater for SMEs and Large companies.”

“The Royal Society will be closely monitoring the flow of money to ensure that increases in investment result in more research being done and do not disappear amidst changing accounting practices.”

New money to support science and education is vitally important but really needs to be focussed on those areas where industry is crying out for high level skills.

Route 128 may have become a run-of-the-mill strip of expensive Boston real estate, but the myth still looms large. It is where the technology boom of the last half of the 20^th century got going. It is the strip that launched a thousand articles. Silicon Valley is an upstart in comparison.

How did this Boston, or Cambridge Massachusetts if you want to be picky, drag come about? Was it really all down to MIT and its bright scientists? If so, is there anything we can all learn from the place?  Like bribing a load of future Nobel laureates to move in and lift the neighbourhood?

MIT is, after all, the institution that Gordon Brown, chancellor of the exchequer and Prime Minister Òin waiting,Ó turned to for lessons in how to turn research into innovation into profits, resulting in the controversial Cambridge MIT Institute.

Rory P. OÕShea and a bunch of too many colleagues to name have written a paper on the subject in the journal R&D Management (vol. 37, issue 1, 2007). Their assessment, ÒDelineating the anatomy of an entrepreneurial university: the Massachusetts Institute of Technology experience,Ó is that MITÕs success is a multifaceted phenomenon.

They focus on MITÕs role as a spinner out of companies. While earlier studies looked at different bits of the process, OÕShea et al. reckon to have put the package together.

The abstract says it all really. ÒThe highly complex mechanism of spinoff generation is typically considered the result of either the characteristics of individuals, organizational policies and structures, organizational culture, or the external environment. Explanations of spinoff activity have in the main focused on only one of these dimensions at a time.Ó

Heed MIT, they say, but donÕt go overboard. (They donÕt talk of the wisdom of putting £60 million of taxpayers’ money into an attempt to clone MIT in the UK.) ÒWe argue that university administrators and academics can learn from the case of MIT, but that efforts at transposing or replicating single elements of MITÕs model may only have limited success, given the inter-related nature of the drivers of spinoff activity.Ó

Juicy quotes:

ÒÉ the MIT story is about a formal, deliberate approach to commercialization, which is supported by a university mission advocated by university leaders who view MIT operating with industryÓ

ÒÉ four attributes of a university are important in supporting spinoff activity. These are the science and engineering base of the university; the quality of research by university staff; the commitment to spinoff activity within management in the university É ; and the culture within the universityÓ.

ÒÉ the regional context influences the level of spinoff from a university.Ó

ÒÉ a simplistic attempt by an institution to replicate and transpose current policies and practices without a deeper and more holistic understanding of both their own history and MITÕs history will probably be unsuccessful as they ignore the inter-related nature of the drivers of spinoff activity.Ó