Turning ideas into products European style
More protection for intellectual property, closer links between fundamental research and industry, and motivating people are the secrets to the successful exploitation of research results, suggested various participants at a conference in Brussels on 7 February. The Altran Innovation Conference brought together industry representatives, researchers, and policy-makers. While some speakers used the platform to call for action or commitment from key players in the knowledge exploitation process, others spoke about what had worked for them. Altran brings together 16,000 high technology and innovation consultants worldwide, and assists corporations all through the innovation process. 'We are not bad as Europeans at coming up with ideas. Our problem is how to turn ideas into products,' said German MEP Jorgo Chatzimarkakis. 'We are bad at turning knowledge into money. That's innovation,' he said, clarifying exactly how the sometimes nebulous concept of 'innovation' should be defined. 'Lots of politicians use the buzzword innovation, but don't know what they're talking about,' he continued. According to Altran's Chief Executive Officer Yves de Chaisemartin, Europe must face two major challenges if it wishes to exploit its ideas and research better: Europe must make choices and implement them, particularly in relation to where EU money is going; and must form closer links between fundamental research and industry. Another Altran perspective came from Pascal Brier, the group's Deputy General Manager. He compared mentalities in different stakeholder groups and in different countries, to explain why technology exploitation often loses out in Europe. The research community's lack of vociferousness has not helped to put innovation on the political agenda, he claimed. New technologies are also rarely given coverage in the press in Europe, but do fill column inches in the US press. For Mr Chatzimarkakis, increased protection for intellectual property (IP) and advice to policy-makers from industry are key. 'We [MEPs] need information - quality information,' said Mr Chatzimarkakis. Receiving that information from industry lobbyists is not problematic as long as the source is known. 'That's why I want transparency,' he said. On IP he warned that China will overtake Europe for patents filed in five years from now. He called on industry to protect IP. 'This is our European problem - we're not able to understand how important an idea is and turn it into money.' The MEP did however concede that often it is a lack of capital that holds back exploitation. He cited the examples of the iPod and Skype. Both were invented in Europe, but the idea was taken up elsewhere. Ray Edgson is Ventures Director at Cambridge Consultants in the UK. The company has created 15 spin-offs in 30 years, and has had a 50% return on its investment. The most successful spin-off has been CSR, a designer and manufacturer of the Bluetooth chip, which holds 60% of the market for short range wireless communications. Cambridge Consultants has a five-point checklist for successful spin-offs: how a venture is selected; motivating people; partnerships; holding back cash; and governance. The chances of selecting a successful venture for investment rise significantly if people with both technology and market knowledge are involved in assessing an idea, Mr Edgson told CORDIS News. Once the relevant experts are in place, they should look for an idea that disrupts the status quo. And finally, an independent validation of the idea should be carried out. Speaking to potential customers at an early stage can also have the added advantage of a company agreeing to invest alongside the original investor, as well as giving the developers the confidence to push ahead with their idea. 'There is a tremendous correlation between great people and great results,' said Mr Edgson. At Cambridge Consultants, the ventures that went ahead without the involvement of a director are the ones that made no money, while the higher the number of investors involved, the more money has been made. If good people are willing to commit, it confirms that the idea is a good one. Good people also impress investors and attract other good people to the company. Keeping investors happy is also important. 'Most entrepreneurs are motivated by recognition,' said Mr Edgson. The owners of the spin-off must therefore find a way to share the fruits of their success with the entrepreneur. Forming the right partnerships can also make or break a spin-off. The right partners will give the product or idea faster and wider market access. Being linked to a good partner will also attract other investors, explained Mr Edgson. Another key to success is finding a way to conserve money so that capital is available when the time is right to exploit an opportunity. 'You don't always know when a market will change and adopt a new technology. You will lose the opportunity if you have run out of money by that time,' Mr Edgson told CORDIS News. The optimum strategy is therefore to find a way to keep the fledgling company ticking over at the lowest possible level of cash consumption until the time for market exploitation is right. Cambridge Consultants' final rule is self-governance for the spin-off. Not only does granting the spin-off independence mean that it is able to set up the company in the most fitting way for the idea, but it protects Cambridge Consultants from any risks that the company may take. These pointers clearly are a recipe for success, as of the 15 spin-offs established by Cambridge Consultants, 13 are still running, 5 have raised capital through IPO (initial public offering), 3 have been sold and only 2 have gone bankrupt.