Canada (2004 study tour)

REPORT TITLE: Managing and promoting research and enterprise activity within Higher Education Institutes (HEI): Learning from the Canadian Experience AUTHOR: HITESH H PATEL UK ORGANISATION: ROYAL HOLLOWAY COLLEGE UNIVERSITY OF LONDON HOST CANADIAN UNIVERSITIES: UNIVERSITY OF ALBERTA, ALBERTA AND UNIVERSITY OF WESTERN ONTARIO, ONTARIO MONTH YEAR APRIL 04

Acknowledgments This project would not have been possible if it had not been for the support offered by various individuals and their institutions. Their time in helping to outline the programme for the visit was critical.

Visit to University of Alberta and University of Western Ontario I would like to thank the following people for their contribution in enabling the project to be implemented: • • • • •

Ms R McDonald, Mr R Khan and Ms Y Fei in the International Office at University of Alberta.

Dr P Robertson, Director of Industry Liaison Office at University of Alberta.

Dr D Gill Head of Office of Industrial Liaison at University of Western Ontario.

Mr F Keenan Head of International Relations Office at University of Western Ontario.

Mr M Miller Secretary at Royal Holloway College, University of London.

Funding for project Without the generous support of the following organisations it would not have been possible to arrange the visit to Canadian Universities: • • • • •

The UK Canada Collaboration Programme.

British Council.

The Association of University Administrators.

The Joan Balchin Memorial Fund.

The Research and Enterprise Office, Royal Holloway College.

I would like to thank these organisations for their interest and financial support to this project.

Project contributors The key element of this Project was the keen interest shown by many individuals within University of Alberta (UoA), University of Western Ontario (UWO), University of Toronto (UoT) and the Provincial organisations to the aim of the Project. They shared their knowledge and expressed their views and so enabled this Project to succeed. I am particularly grateful to these people.

Last but not least I would like to thank the Director of Research and Enterprise Office at Royal Holloway College, Dr B Ferrari, for his support and encouragement to take forward the visit and for accommodating the time away from work that was necessary for the programme of visit to the Canadian Universities.

Section

Contents

1 2 2.1 2.2

Executive Summary Background Policy issues Why choose Canadian HEIs as a source of best practice model for innovation and enterprise activities?

The choice of host universities in Canada Aims of the visit Objectives Methodology - approach adopted to gather information for the project Gathering of evidence, analysis and development of best practice guidelines Support for promoting research funding Seeking and developing collaboration with industry Intellectual Property Rights (IPR), Technology Transfer and Licensing Spin-out company programmes Innovation Centres and Business Incubators Entrepreneurship Programmes Clusters and other mechanisms for SME access to Universities Use of Management Information Systems Investigating opportunities for collaboration and developing programmes of exchange visit for academic staff and students Analysis of information gathered, conclusions and key outcomes Structure and functions of the Offices supporting research, enterprise and technology transfer Support for promoting research funding Internal authorisation process Support to enhance funding Incentivisation policy Seeking and developing collaboration with industry Support for promoting university – industry collaboration: national and provincial organistations Role of local government agencies in promoting university – industry collaboration Intellectual Property Rights (IPR) Technology Transfer and Licensing Spin-out company programmes Spin Out Case Studies Innovation Centres and Business Incubators UWO Research Park Entrepreneurship Programmes

2.3 3 3.1 4 4.1 4.1.1 4.1.2 4.1.3 4.1.4 4.1.5 4.1.6 4.1.7 4.1.8 4.2

5 5.1 5.1.1 5.1.2 5.1.3 5.1.4 5.2 5.2.1 5.2.2 5.3 5.3.1 5.3.2 5.4 5.4.1 5.5

Page Nos

3

5 8 8 9

11 12 12 14 15 15 15 15 16 16 16 16 16 17

17 17 19 19 20 22 23 25 27 28 31 34 39 43 44

Section

Contents

5.6

Clusters and other mechanisms for SME access to Universities Use of Management Information Systems (MIS) Managing research grants and finance information Managing IPR and Spin Out information Investigating opportunities for collaboration and developing programmes of exchange visit for academic staff and students Appendix Programme of meetings for visit to University of Alberta (UoA) Programme of meeting for visit to University of Western Ontario (UWO) Table 3: Summarising structure of the offices supporting research, enterprise and technology transfer Table 4: Outlining organistation and local and national programmes to support university – industry collaborative activities Table 5: Summarising the IPR situation at RHUL and at UoA, UWO and UoT Table 6: Summarising the various early stage funds at RHUL and at UoA, UWO and UoT Table 7: Summarising stages of development of UoA Spin Out Table 8: Summarising case study information on Spin Outs Table 9: Summarising cost for finance, research and technology transfer Management Information Systems (MIS) References Tables within main text Table 1: Summarising schemes to promote enterprise in UK and Canada Table 2: Summarising profile of RHUL, UoA and UWO and the funding secured for promotion of innovation, enterprise and technology transfer at the three universities

5.7 5.7.1 5.7.2 5.8

6 APPENDIX 1

APPENDIX 2

APPENDIX 3

APPENDIX 4

APPENDIX 5

APPENDIX 6

APPENDIX 7

APPENDIX 8

APPENDIX 9

7

4

Page Nos 47 47 47 47 49

50 51 52

53

56 57 59 60 62

64 10 11

1. Executive Summary This report presents information for the benefit of Royal Holloway’s (RHUL) Research and Enterprise activities and for similar departments at other UK and Canadian Universities following a visit to two Canadian universities, University of Alberta (UoA) and University of Western Ontario (UWO). It outlines recommendations based on how successfully the Canadian Universities have implemented policies, projects and structures to make sustainable changes in the way their universities work with the Knowledge-Based Economy.

The key outcomes were: Implementing a internal review process for bids to large schemes To increase the number of applications being submitted and successfully secure funding, it is essential for Universities to implement a review process for applications to major funding initiatives.

Seeking and developing collaboration with industry University of Toronto (UoT) has developed a strategic partnership model to work with commercial companies. This enhances UoT’s collaboration with industry and research income from industry. The concept behind this model is to promote the opportunity to access expertise from the University that is capable of providing a complete package of services covering the broad range of needs of the commercial collaborator.

Role of local government agencies in promoting university – industry collaboration In Canada, the Provincial government was highly proactive in funding initiatives to aid university – industry collaboration. One such mechanism is the concept of ‘Centres of Excellence’. This promotes a range of activities to build strong university – industry collaboration and develop mechanism for exchange of knowledge and people, similar to the concept of the national Faraday Centres funded in the UK. Intellectual Property Rights (IPR), Technology Transfer, Licensing and Spin Out company programmes Canadian HEIs were more active and successful in Technology Transfer and Spin Outs because their Universities have mature and well developed IPR policies and mechanisms for commercialising these ideas. Early stage funding is a critical component in all this but was not as readily accessible to their HEIs. This however did not prevent Spin Outs.

Within the UK the lack of early stage funding is not likely to be a major problem following the launch of the Government funded University Challenge Fund and Higher Education Innovation Fund (HEIF). RHUL has secured £4M through the University Challenge Fund and set up a £1M PARK fund. Both these funds are in collaboration with local HEIs and commercial partners.

Supporting a single Spin Out is a resources intensive effort and typically can take well over 24 months to get to the stage of securing early stage funding.

Consequently if a University has ambitions to develop a successful Spin Out program

5

it is necessary for Research and Enterprise Offices (REO) to have sufficient manpower resources and funding.

Innovation Centres and Business Incubators This visit was not able to provide any conclusive recommendations but any strategy developed for incubation and innovation capacity needs to take on board some of the recommendations outlined in this report.

Entrepreneurship Programmes As a result of UK Government funding, mainly through the Science Enterprise Challenge and Higher Education Innovation Fund, UK Universities have the capacity to develop workshops on entrepreneurial training.

Westlink which is an organisation promoting Universities in Western Canada, has developed an innovative pogramme that provides training for Technology Transfer staff. This initiative involves taking student interns which could be MBA students through an 18 month programme which in-corporates working for 6 months with a Technology Transfer environment, 6 months with a venture capitalist and 6 months with a Spin Out company. It would be useful for such a programme to be implemented here in the UK. UK universities could equip their students with entrepreneurial skills by developing structured activities, for example: • At UWO their IVY School of Business has developed a New Venture Management Programme which runs over 3 months and aims to target students seeking to develop entrepreneurial skills or those whose careers will take them into a technology based venture.

• Their IVY School of Business also runs an IVY Client programme which involves students tackling a project within a real business environment. For the final stage this requires the students to present a business plan for finance to an external panel.

In the UK Robert Gordon University has tackled the problem of promoting entrepreneurship within its student body by setting up a Student Incubator with support from a commercial partner.

Implementing a suitable Management Information System (MIS) The report identifies the following commercial products that could provide the capability to meet research and enterprise management information needs; Info Ed, ResearchMaster, Inteum (formerly DEALS), KSS Tech&TracS, ResearchAdminsitration PKI and RACE2. A review of these products is able to offer the following two options: Option 1- Buy a product which provides all the functions required The complete InfoEd system is approximately £220k (C$553k) where as ResearchMaster was £150k (C$366k). Both the products have the necessary functionality and capabilities to meet the needs of managing research and technology transfer activities. Such cost however could be restrictive to available budgets of Universities such as Royal Holloway. If only modules essential to the office’s work 6

were purchased then the cost could be reduced to £90k (C$220k) for InfoEd and £89k (C$218k) for ReseachMaster.

Option 2 - Purchase separate systems to meet the different needs From the separate systems reviewed a combination of ResearchAdministration PKI and either Inteum (formerly DEALS) or KSS Tech&TracS could meet most Universities technical requirements at a cost of £34k (C$83k) or £48k (C$117k) respectively.

7

2. Background 2.1 Policy issues The past 10 years has seen a significant change in the UK HEI funding environment with the result that Government funding has not kept pace with the demands required for maintaining high quality teaching and research facilities in the present international market for higher education. This is in spite of the £1.8billion jointly invested by the UK Government and Wellcome Trust for infrastructure funding through the Joint Infrastructure Funding (JIF) scheme. It now looks highly unlikely that it will be possible to close this gap through public funding alone.

In the 1998 White Paper ‘Building the Knowledge Driven Economy2 the Government placed universities at the heart of its strategy to harness knowledge skills and creativity to foster high productivity business processes and high value goods and services. This was followed in 2001 by the White Paper ‘Excellence and Opportunity – A Science and Innovation Policy for the 21st Century’3. As a consequence to the outcomes of this report the UK government has emphasised that UK HEIs will need to develop and implement strategies to better exploit the knowledge generated through publicly funded research. A number of initiatives termed 3rd Stream funding have recently been implemented by the UK government to encourage HEIs to develop mechanisms that will enable them to generate additional income by exploiting their knowledge.

The aim of the 3rd Stream funding schemes is to enable HEIs to develop policies to establish working partnerships with business, exploiting their research, developing an entrepreneurial culture, carrying out consultancy work and Spin Out companies.

In the UK, the recently formed Regional Development Agencies (RDA) has also endorsed the role HEIs can play in helping the local economies. All clearly see the Universities in their Regions as major players in the knowledge driven economy. In the South East Region the South East of England Development Agency (SEEDA) report ‘Delivering the Regional Economic Strategy’ 6, highlighted the flagship economic development policy as the establishment of business led ‘Enterprise Hubs’. The involvement of local universities in these hubs is seen as one of the necessary conditions for their formation.

Through various 3rd Stream schemes Royal Holloway has recently been successful in securing funding to establish an incubation centre, have its own seed stage fund and take on additional staff to promote knowledge transfer by building on and strengthen the current interactions that the college has established with business, the public sector and local agencies.

Royal Holloway has implemented a number of activities over the last few years to establish closer links with industry and to develop an enterprise culture within the college. A key element of this is Commercial Connections. The aim of this programme is to establish core groups that have expertise that could be targeted as technical services to national and local businesses. This activity has been strengthened by the funding from the Higher Education Reach Out to the Business Community (HEROBAC I) bid through the appointment of a Business Liaison Officer and Business Support Officer within the Research and Enterprise Office. Through 8

the recent HEIF round the college has been able to secure jointly with Brunel University funding for four sector specific knowledge transfer managers whose responsibility is to identify opportunities in information technology, health, environment and media. The key objectives of these new activities are: to build on current links and expand contacts with industry with particular emphasis on SMEs, to identify and respond to their needs, to strengthen activities in Intellectual Property Management and Technology Transfer and to enhance enterprise culture on campus by establishing a ‘Professional Expertise Pool’, which will include information on patent agents, venture capitalists and legal advisors.

Every situation is different and there are many geographical, cultural, social and economic factors with the capacity to interfere with the new initiatives that are coming on stream and to frustrate their objectives. To help universities embed this culture within their environment the UK government and other public funding bodies have commissioned and published numerous best practice documents on topics such as ‘Optimising Consultancy – A good practice guide to the management of consultancy in universities and college’ 7, ‘Partnership for Research and Innovation between industry and universities’ 8 and ‘The Management of Intellectual Property in Higher Education’ 9.

For a majority of the UK HEIs the funding provided for activities under these scheme is new and unchartered territory. Therefore, like most other HEIs, the staff in the Research and Enterprise offices at Royal Holloway may not have the necessary knowledge or skills to enable them to effectively exploit these opportunities. While best practice documents are a useful source of information and guidance there is no substitute for getting first hand experience and learning from those who are more advanced down this road and have already successfully implemented such activities within their HEIs. 2.2 Why choose Canadian HEIs as a source of best practice model for innovation and enterprise activities?

The awareness of how US HEIs have embedded innovation and enterprise is well understood by UK HEIs. Canada has also successfully embedded such activities in their HEIs but little could be referenced on how they have managed this.

Canada has experienced a similar scenario in R&D investment as the UK. In Canada between 1987 and 1998 Federal R&D investment had declined by 2% in real terms (Statistics Canada, Science Statistics, Vol. 22, No. 5, October 1998 1). This is in spite of also implementing large investments programmes for infrastructure funding. The Canadian Foundation for Innovation (CFI) provided funding of £840M (C$2050M) and £970M (C$2367M) to support infrastructure development. Like the UK, the Canadian Federal Government launched a major Science and Technology Review in 1994. The review group commissioned various reports, including two titled Public Investments in University Research: Reaping the Benefits 4 and Paths to Commercialisation of University Research – Collaborative Research 5, to provide guidance to the Canadian Government on how to harness the research from their universities for the benefit of their economy.

Both the UK White Paper study and the Canadian Science and Technology Review identified common threads which pointed to barriers that prevented Universities from 9

fostering closer collaborations with industry and exploiting the research they generated for the benefit of their economies. Some of these common issues were: i. Lack of adequate resources within the HEIs to develop and promote industrial collaboration and technology transfer. ii. Poorly developed Intellectual Property (IP) policies. iii. Limited pool of people with the right entrepreneurial, business and technical skills to promote innovation. iv. Problems with attracting researchers of the highest calibre and retaining those already within the system. v. Lack of incentives for researchers to collaborate with industry and to consider opportunities for exploiting their research.

Like the UK, Canada has implemented a range of funding schemes which have broadly similar aims and to help germinate activities that will foster an entrepreneurial environment in Universities, see table below.

Table 1 Summarising schemes to promote enterprise in UK and Canada UK Scheme Aim Canada Scheme Aim Higher Education Reach Out to the Business and Community Fund Higher Education Innovation Fund

Science Enterprise Challenge

University Challenge

Royal Society-Wolfson Research Merit Awards

To assist HEIs to increase their capability to respond to the needs of business and the public sector organisations To help HEIs develop mechanism to promote innovation.

Commercialisation of University Research

Canada Foundation for Innovation and Ontario R&D Challenge Fund, some NSERC programs, some CIHR programs Canadian Community Investment Plan (CCIP)

To encourage entrepreneurship through the introduction of ‘Enterprise Centres’ into selected Universities to bring training in business skills into the science and engineering curricula.

Set up to enable HEIs to target venture capital funding for university Spin Out companies.

To provide institutions with additional support to enable them to attract to this country, or keep here, respected scientists of outstanding achievement and potential.

Most research-intensive Canadian universities have established offices of industry liaison.

To provide support for infrastructure funding for university research.

Business School professors specialising in management of innovation. A federal government program which helps new businesses to become investor-ready.

Seed stage funds

Various sources of funding to commercialise research and supporting Spin Outs.

The Canada Research Chairs Program

To help HEIs attract high calibre academics in an increasingly competitive international academic market.

An important factor which made Canada a useful choice for the study visit was that amongst the G7 countries it has the highest % of its national R&D expenditure carried out in universities, 21% compared to 14.3% in the USA 4. This can in part be attributed to the industrial sector in Canada traditionally preferring not to have in house research capability and therefore outsourcing its R&D to the Universities. As a result of this set up Canadian Universities have achieved notable successes in commercialising research results in the absence of any special government initiatives. A second factor that made this exchange visit more interesting is the different mechanism by which Universities receive support from Government/Federal sources. In the UK there is a dual support system. This involves the Funding Council providing support for teaching and research through a formulated funding mechanism. In parallel the Research Councils support academic research projects and this includes indirect cost. In Canada the Federal Government primarily provides support to Universities through grants in aids to cover some of the research project 10

cost. Indirect costs are not covered by these grants, instead in a majority of the cases the indirect cost must be provided by Canadian Universities out of their income from provincial grants, tuition fees and private donations. This consequently has a negative impact on Canadian Universities ability to innovate. Despite these drawbacks Canada does more of its R&D in Universities and therefore depends more on Universities for their new knowledge.

In summary it was evident from the brief background study that HEIs in both UK and Canada have had similar pressures placed on them by Governments policies, such as: i. Increase interaction with industry. ii. Develop mechanism to ensure that public funded research is exploited for the benefit of the countries economy. iii. Develop an entrepreneurial culture for staff and students.

2.3 The choice of host Universities in Canada For the proposed exchange visit the institutions targeted were the University of Alberta (UoA) and University of Western Ontario (UWO). Royal Holloway (RHUL) had already established some links with both these Universities through visits by senior members of the management. Both universities are keen to strengthen and build on these arrangements. As the table below shows, both Canadian Universities are considerably larger than Royal Holloway however there are some common overlapping elements and some areas where one University has developed structures and mechanisms that could be valuable to the other partners. The choice of visiting these two universities was expected to provide a good opportunity to compare and contrast mechanisms for promoting entrepreneurship, innovation and exploitation.

Table 2 Summarising profile of RHUL, UoA and UWO and the funding secured for promotion of innovation, enterprise and technology transfer at the three universities Activity Nos of Academic staff Student nos Faculties Technology Transfer Office Support for Innovation

Support to promote entrepreneurship Seed funding

Royal Holloway 430

Univ of Alberta 2855

Univ of Western Ontario 1204

5100 Arts & Humanities, Sciences and History and Social Sciences.

Head, Research and Enterprise Manager, Business Liaison Officer, IPR Officer and Support Officer.

Funding from Higher Education Innovation Fund and SEEDA to establish Incubation Centre and Enterprise Hub.

36000 15 including Arts, Science.

Industry Liaison Office (ILO) set up in 1994.

24000 12 including Arts, Science and Social Sciences.

Office of Industry Liaison Director reports to VP (Research), set up in 1996 Visit to be used to learn how these activities are supported.

Science Enterprise Challenge funding to support activities to promote entrepreneurship to both academics and students. Develop courses to provide staff with the necessary skills.

University Challenge funding to provide source of seed funding for Spin Outs from university research.

11

Visit to be used to learn how these activities are supported.

Visit to be used to learn how these activities are supported.

Visit to be used to learn how these activities are supported.

Visit to be used to learn how these activities are supported.

Visit to be used to learn how these activities are supported.

3. Aims of the visit To learn at first hand what systems and practices Canadian Higher Education Institutions (HEIs) had adopted to encourage successfully embedding exploitation of knowledge within the academic environment. Such information will be valuable in helping Royal Holloway College, University of London (RHUL) to create and develop structures that will enable it to make a valuable contribution to the economic growth and competitiveness of the UK. The exchange visit to the Canadian HEIs was to: i.

Develop a better awareness of how to manage and implement innovation and enterprise activity. ii. Broaden knowledge related to establishing university incubation, Spin Outs and Science Park activities. iii. Obtain improved understanding of managing Intellectual Property Rights (IPR). iv. Provide an insight into developing Management Information Systems (MIS) to record and track research and enterprise activities.

3.1 Objectives The main objectives of the project were to help identify: 1. How to develop college policies which motivate and encourage exploitation and protection of intellectual property, particularly through formation of Spin Out companies.

2. Mechanisms for supporting University Spin Out companies and the types of early stage funding they will need.

3. Routes for communication to build relations in order to promote stronger interaction between the local regional economy and the research and teaching activities at Universities.

4. Programmes and structures to implement in order to develop a culture of entrepreneurship within the academic environment.

5. Identifying process operations to help set up and manage Business Incubation Centres.

6. Identify MIS that can be implemented to help HEIs better manage and develop the promotion of expertise to the local economy, exploit its research and track activities related to knowledge exploitation.

The logic diagram on the following page provides a schematic outline of the key aims of the project and what methods were employed to obtain the necessary information.

12

Logic diagram outlining aims of visit and methods adopted to gain information on how Canadian HEIs are implementing processes to contribute to the growth of the Knowledge Based Economy Learning from the Canadian experience and process of implementing activities to enhance research activity and develop a culture of exploiting knowledge within their HEIs

Overall Aims

Gathering information to develop processes to help RHUL manage reseach, industrial collaboration and knowledge exploitation

Strategic Objectives

Programme Objectives

Programme Activities

Measurable Output

How Canadian univs develop collaborative links between HEIs and industry

W hat policies have been implemented to encourage protection and exploitation of knowledge

What mechanisms have Canadian Univ put in place to encourage Spins Out & creation of incubation centres

Meeting with key individuals within the Industry liaison office and exchange best practice

Through discussion with IPR office establish polocies that have been implemented to encourage exploitaion

Meeting with technology transfer officers to learn about how their technolgy transfer mechanisms work

Looking into how key Government initiatives have been implemented to forge these links

Gathering views from the academics on their precption of the policies and how it mpacts their work

Looking at case studies of successfuly implemented Spin Outs and incubation centres

Managing process of setting up activities to enhance collaboration with industry

Develop college policies which encourage exploitation & protection of IPR

Mechanism for establishing Spin Outs, seed funding and establising incubation centres

What measure have Canadian Univ put in place to promote a entrepreneural culture

Analysis of the role Canadian HEIs have played in promoting an enterpreneural culture

Indentify activities to encourage culture of enterpreneurship

13

Look into how they work with regional agencies to meet the needs of the local economy

Exploring the potential of establishing collaborative links with a Canadian Univ

Meet with tindustry liaison officersto find out how they interact with tocal business and mechanisms used

Meet with departments that have research synergies with RH to explore potentail for research collaboration

Getting local agencies prespective on the role Univs can play in the local economy

Investigate mechanisms for setting up student and staff exchanges

Produce information on mechanism implemented by Canadian Univs to work with the local economy

Promote awareness to academics of opportunities to establish collaborative links with Canadian HEIs

Support structures to promote research funding

Meet with the research support offices

Idemtify process that can be implemented to enhance reseach funding

4. Methodology - approach adopted to gather information for the project The main mechanism for gathering information for the project was through developing a programme of visits to Universities in Canada. During this visit the aim was to learn how their HEIs developed and implemented processes to enhance collaboration and research, promote a culture of entrepreneurship and exploit the knowledge they generate. Where necessary this was supplemented by looking at practices adopted by HEIs in the UK. Initial contact was made with the UoA and UWO to identify suitable personnel within their equivalent of the Research and Enterprise Departments and to seek their assistance in developing a programme for the visit. The timescale allocated for this visit was 4 weeks with the aim of spending 2 weeks at both Universities. The close proximity of UWO to Toronto provided the opportunity to arrange a visit to University of Toronto (UoT). Obtaining funding was essential to be able to carry out this visit and this was secured through the UK Canada Exchange scheme and The Joan Balchin Memorial Fund for university administrators.

The main body of the work programme was divided into in two parts.

Part 1: Desk study to collect information and relevant documents Gathering of evidence, involved mainly collecting information and documents which would form the basis of the discussions with collegues in Canada. The documents included Government reports and policy documents, University policy documents and Best Practice reports produced for the activities related to Research and Enterprise.

Part 2: Visit to Canadian HEIs and to meet people involved with exploitation of research The second phase involved visiting the two Canadian Universities and exchanging views and best practice on the issues related to research and enterprise. During this part of the project, meetings were arranged with staff working in Research, Enterprise, Technology Transfer, Industrial Liaison and Finance/ Information Management. Through contact made with offices involved in research and enterprise at the two Canadian Universities the programme shown in Appendix 1 and 2 was developed to meet key players from the University, government agencies, research technology organisations and industry. Through the analysis of the discussions the information collected would be used to provide guidelines that can be of value to Royal Holloway and other UK HEIs and both Canadian Universities to enable these universities to become engines of growth for the Knowledge Based Economy.

The aim of the visit was to draw information on the following issues: • Exchange views on what policies the Canadian Government have implemented to support research and enterprise within their Universities.

14

• •

• • •

What mechanisms they have adopted to forge closer links between the University and the industrial collaborator.

Policy documents that they have implemented within the University to protect knowledge, exploit the research and reward academics.

Mechanism implemented to encourage Spin Outs.

Activities related to establishing viable Innovation Centres and Science Parks.

Mechanisms adopted to interact with the local economy and in particular SMEs

For each of the above areas the overall aims was to analyse and develop guidelines for the establishment of mechanisms to enable Universities to become engines for growth of the Knowledge-Based Economy.

The detailed work programme was as follows and Appendix 1 and 2 shows the meetings that were scheduled to gather information on these various aspects: 4.1 Gathering of evidence, analysis and development of best practice guidelines This was undertaken to look at the wide range of methods and mechanisms deployed by Universities to interact with local and regional economies. The aim was to draw questions on the following issues and areas of interest: 4.1.1 Support for promoting research funding Looked into how their equivalent of the Research and Enterprise Departments were structured in Canadian Universities particularly in promoting and assisting academics to source research funding.

4.1.2 Seeking and developing collaboration with industry Studied and analysed schemes developed through government support and their effectiveness. Looked into how Universities used these schemes especially in targeting SMEs. In the UK, government and business support agencies have raised concerns at the lack of SMEs working with Universities and taking up technology from university research. A key aim was to develop case study material of developing industrial collaboration.

4.1.3 IPR, Technology Transfer and Licensing This involved a review of practice adopted with particular reference to considering how the policies in Canada differ from those in UK Universities; do they take into consideration work done by students, how are the policies implemented, is there an incentivisation for academic staff, how is the IPR portfolio managed. The work looked at the whole range of technology transfer mechanisms, especially those that work through local contacts and the transfer of people.

15

4.1.4 Spin-out company programmes The economic situation in South East England has many aspects that can favour the establishment of University Spin Out companies (availability of finance, entrepreneurs and willing university staff). However, there are also many barriers to be overcome. This study looked at practice employed in creating University Spin Out companies. Discussions centred around what structures the university had developed to handle Spin Outs eg the method of financial stake in Spin Outs, the incentivisation mechanisms implemented and how they area funded. The visit also attempted to collect information on case study material.

4.1.5 Innovation Centres and Business Incubators The objective here was to define in general how property-based initiatives could act to encourage interactions between University and the local economy in the South East region. Particular areas of interest included the range of objectives that such Centres had, the range of services that such Centres offered and the balance between commercial and policy reasons for the establishment of such Centres.

4.1.6 Entrepreneurship Programmes This included an analysis of the role Universities can take in promoting entrepreneurship in their regional economies, what government mechanisms had been but into place to assist universities, what programmes have been developed by the Universities to promote entrepreneurship and how does it impact students.

4.1.7 Clusters and other mechanisms for SME access to Universities In the UK one proposed mechanism suggested from Universities to interact with local businesses in particular SMEs is the general principles of the establishment of cluster groups. The issues for this include the preferred role of Universities in creating cluster groups; the different methods for creating and managing cluster groups; the range of different methods and mechanisms that may be used to serve the needs of clusters; different means of communication with the clusters. Other mechanisms for University/business interaction and SME access. The key issue was to look at how differently the Canadian Universities worked in this area.

4.1.8 Use of Management Information Systems It is evident that as the level and areas of responsibilities that Research and Enterprise departments are having to manage widens within restricted resources it is important that efficient use is made of IT technology and that suitable MIS are implemented.

16

Here the aim was to get first hand view of any Management Information Systems implemented by the Canadian Universities to help them better manage the various interactions, collection of data and flow of information in relation to research and enterprise activity.

4.2. Investigating opportunities for collaboration and developing programmes of exchange visit for academic staff and students The visit gave an opportunity to investigate research areas of mutual interest where arrangements for collaboration can be fostered and also to explore the possibilities of developing exchange visit programmes for academic staff and students.

5.Analysis of information gathered, conclusions and key outcomes 5.1 Structure and functions of the Offices supporting research, enterprise and technology transfer An overview of how the Research and Enterprise activities are structured and resourced at Royal Holloway (RHUL), University of Alberta (UoA) and University of Western Ontario (UWO) is outlined in Appendix 3.

At Royal Holloway the Research and Enterprise office has two sections. The post and pre award activities have recently been merged to form the new Research Support Centre. A key reason for this change is to provide more efficient support to academics and to eliminate duplication of activities eg holding of research grant proposals. The technology transfer functions are handled by the Enterprise Centre. To support the various functions the office has 4 staff handling pre and post award research activities and 8 involved with a range of technology transfer and collaborative activities.

UoA has a Research Grants Office (RGO) that handles pre award issues related to research funding while the Industry Liaison Office (ILO) deals with enterprise and technology transfer. Post award matters for research grants are handled by the Finance Trust Accounts Office (FTAO). However following a recent government audit and internal review, staff looking after post award areas in the FTAO have been moved to become part of a single office comprising RGO and ILO. As part of the restructuring all of the research intensive faculties will get dedicated staff to provide administration support for research funding. Integrating the offices in this manner is expected to lead to a more efficient mechanism for supporting research and technology transfer and will provide better management of grant finances.

Currently at UWO functions related to pre award grant funding activity are handled by the Office of Research Services (ORS). Once the proposal is funded ORS authorises the Office of Research Account (ORA) to set up a trust account and this office then deals with all post award financial issues.

The technology transfer activities including commercial research contracts are handled by the Office of Industrial Liaison (OIL). At one time these two offices were part of a single section. Like UoA, UWO has support devolved at faculty

17

level for research funding. To reach critical mass OIL see the need for 3 additional staff.

At UoT the technology transfer activity has now been set up as an independent section which has enabled more flexibility particular when making policy decisions and has helped with overcoming any issues with conflict of interest.

The visit to UWO provided the opportunity to see a range of different set ups within the hospital and medical research institutes to support IP exploitation and technology transfer. The hospital and research institute attached to Universities incorporated enterprise activity within the Business Development Office (BDO). (i) London Health Sciences Centre (LHSC) – off campus hospital The offices in the hospital had limited resources in relation to both staff and funding. At most it was 1 business development staff with some administration support. The office was expected to provide support for IP, confidentiality agreement, business plans and developing Spin Outs. Research contract activity was handled by a separate office. Where possible external expertise was used for legal advice. (ii) London Health Sciences Centre (LHSC) – on campus The LHSC campus site deals with clinical science and like in UK medical schools there has been lack of emphasis on those involved on clinical side to explore exploitation of research and IPR. This is mainly due to lack of resources to raise awareness and funding to protect IP. The problem at UWO was the remote location of the hospital which led to the problem of access to the Office of University Industrial Liaison resources. One consequence of this was that because OIL did not have resources to provide dedicated support, Spin Out opportunities were generally being taken forward through the BDO resources. This raised the issue of why the University Centre should have a share in the Spin Out formed. (iii) Roberts Research Institute (RRI) RRI was independent from UWO and the hospital has its own funding with its own board of directors to govern the institute. The independent structure enabled RRI to contract people with the appropriate skills by providing competitive salaries as they were not restricted by university pay structures.

For RRI it was not imperative for staff recruited to have technology transfer skills rather the quality they were looking for in the individuals was drive and motivation. It was more desirable to recruit individuals with focus and if possible those who have just come out of academia.

18

Key point: Managing technology transfer Both the Canadian HEIs had a much larger Technology Transfer office with a significantly larger IPR budget compared to RHUL. However since RHUL is a much smaller institution in comparison to the two Canadian HEIs its difficult to make any realistic comparisons on the resourcing of the two offices. A general observation that can be drawn is that Canadian HEIs seem to be more well resourced and more mature in particular in the area of Technology Transfer.

5.1.1 Support for promoting research funding Research grant applications is a critical activity at most Universities as it: • Provides opportunity for researchers to explore new ideas and raise their international standing.

• Brings in much needed additional income to the University.

• Raises the profile of the University internationally and nationally and thereby attracts new collaboration with industry and public sector.

• Is instrumental in benchmarking the research excellence of the University and for attracting government funding.

• Is a key factor which attracts new academic staff of international reputation to the University.

A principal responsibility of the Research Office is to implement and enforce a well defined internal process in order to: • • • • •

Ensure overhead returns to the college are maximised.

Meet the funding organisations requirement eg submitted with correct costing.

Ensure that funding for resources are maximised eg staff, consumables.

Enable Research Office and Finance to use their expertise to add value.

Collect accurate Management Information data for the College.

5.1.2 Internal authorisation process Practice at RHUL At Royal Holloway a well defined internal process is in place which requires that proposals are sent to REO 7 working days in advance of the closing date of the funding opportunity. Support for developing contract research and consultancy has a similar internal process as research funding. This is supported by use of various internal forms to produce costing of the projects.

Policy on overhead recover is minimum 30% on all direct cost for contract research and 15% on CPD/ consultancy. On these activities anything earned over the minimum overhead is returned to the department.

19

Practice at UoA and UWO At both University of Alberta (UoA) and University of Western Ontario (UWO) the equivalent of the RHUL Research Support Office did not have any structured internal authorisation process in place. Reviewing proposals only involved quality check and financial control. This is because the primary role of the Research Office at UoA and UWO was to support activities to enhance research funding and check overhead recovery is appropriate to college policy. If requested the office reviewed proposals to strengthen the case for support. However at both HEIs a structured support was available at Faculty or department level for review of proposal in addition to having administrators who provide support on costings. When proposals were being submitted for infrastructure funding, they were required to go through the procurement section. The authorisation process was initial check by Research Support Office and then the Dean signs off the proposal on behalf of the college.

As at RHUL, both offices at UoA and UWO, also experienced the same problem of proposals being submitted too close to the submission deadlines.

The policy adopted to prevent applications bypassing the college authorisation process was that if a proposal was not seen by the office and a grant is awarded then the college had the authority not to open an account for the project. The office was able to monitor how closely applicants were adhering to the internal process because all proposals submitted through the office were logged on a grants database and when a grant was awarded it was checked against this entry. Through this monitoring system the Research Support office was confident that proposals were not by passing the college authorisation.

At neither University was there any college policy in place to benchmark the College’s performance against its peers. Although in some cases departments did carry out their own benchmarking exercises. Also no targets were set on overheads.

5.1.3 Support to enhance research funding Practice deployed at RHUL For major grant funding initiatives there is no structured support from within the college at RHUL. The college does however have a pump priming fund called the Research Strategy Funds (RSF) which is administered by REO. The funds provide grants upto ÂŁ5k (C$12.2k) to carry out a pilot scale project provided there is a clear strategy in place to show how this will enhance external funding applications and provided suitable external sources are identified and a timescale is outlined for submitting applications to these sources. In addition Departments have put in place their own support structures and funds to enhance research funding. Although this varied from department to department.

20

Currently support provided by the office on research funding through workshops is on an ad hoc basis but plans are in place to implement a more structured support.

Post award practice deployed at UoA and UWO At UoA for large initiatives the Vice President (VP) office provides targeted support to applicants. On high profile schemes such as Canada Foundation for Innovation (CFI) and Canada Research Chairs Programme (CRC) the University had an internal committee to review proposals. Proposals judged to be of good quality would have access to university discretionary funds and resources from Alberta Provincial government as well as technical support from Western Economic Diversification, Government of Canada. At UWO a college fund was set up with funding from the Ontario Provincial government to support development of large bids. In addition a Research Infrastructure office was established which gave more proactive support to help develop bids for large scale infrastructure funding.

A key strategy at UoA was to ensure that new academics are given an overview of the support available and college requirements. This was done by tagging seminars on the support RGO provides to the ‘Orientation’ day for new academics. To enhance research funding both Canadian HEIs also had pump priming funds but administered with a very light touch. At UWO the Faculty also provided pump priming grants for new academics. In addition at both universities the office ran support seminars on topics such as proposal writing, project management etc. To enhance research funding those wanting support had access to a grant review committee that includes academics who had a strong successful research grant application track record. The office felt that this approach would lead to academics being more receptive to comments feedback to them on their proposals. For new academics a mentoring programme was also set up and they were encouraged to take advantage of the presence of any emeritus professor in their departments.

Academics were also encouraged to take on review committee opportunities and faculties had representatives to liaise with funding bodies.

At UoA and UWO funding opportunities were provided through subscription to Community of Science (COS) funding database and through intranet and newsletter. Neither university had developed any structured support mechanism for use of COS and limited monitoring was in place to look at how academics were using the system. In addition the internet was used as a primary mechanism to make academics aware of college policy on research funding and support available. At UoA grant advisors were set up who provided support at faculty level on sourcing research funding.

Pre award practice deployed at UoA and UWO On pre award matters the RAO at UWO had set up a system which did not require allocating cost centre codes for separate categories of expenditure for a grant. Instead the applicants charged expenditure against single cost code.

Invoicing was handled by RAO and was not expected to be done by

21

departmental administrators. For internal management reporting no information was given on overhead recovery and a conscious decision was taken not to show revenue by faculty in order to avoid issues when funds needed to be split for collaborative proposal.

Key point: To enhance research funding At Institute level • Good quality bids had access to college discretionary funds and support from Provincial government to help develop a large scale bid.

• New academics given a good overview of support available to them across the campus and offered mentoring programme.

• Potential applicants for funding had access to a review committee.

At Faculty level • The Faculty had implemented workload models to enable academics to seek funding eg at end of current grant academic may get only 80% workload. Less research active staff are expected to take on more of the teaching load.

• For large initiatives eg CIF and NCE there is a committee which reviews proposals submitted to these schemes.

• All Faculty members have mentors and are expected to have formal review with Deans where target are set eg all new faculty members should have one own grant and one collaborative grant.

• All grants are reviewed by two members.

• Within the faculty of Medicine benchmarking is carried out as a requirement by CHIR. This was not the norm in other departments across the campus.

5.1.4 Incentivisation policy Policy at RHUL At Royal Holloway as an incentive to reward grant funding activity overheads are returned to the department as follows; Research Council (RC) 38% of the 46% claimed, European Union (EU) 38% of the overhead claimed and charities 4.275% of all income. On other types of contract if a PI secures more than 30% the difference will be returned to the PI as free spend.

The recommended college policy on split between PI and department is 60/40.

Policy at UoA and UWO Like Royal Holloway the incentivisation mechanism developed at both Canadian universities involved distributing the overheads between Department/ Faculty and Principal Investigator. At UWO the distribution of overheads was 22% to University co-operate section, 22% Vice Principals (VP) office and the other 56% was split between Faculty and Department.

22

UoA had a similar overhead distribution mechanism which was administered by the VP office. They have no fixed figure on overhead distribution but efforts are made to ensure that a proportion is distributed between the Department, Faculty and applicant. At both UoA and UWO if PI is new then most of the overheads are returned to the applicant in order to assist them in establishing a research group and encourage activity to recover overheads. A key problem however in Canada is that their Canadian Research Councils do not provide overheads on grants. Instead overheads are given as a one off payment dependent on proportion of total funding received by University. Many HEIs have raised concerns at the sustainability of supporting Universities using this funding method. Consequently their RCs are now in the process of looking into steps to include overheads on research grants.

Key point: To enhance research funding •

For new PI’s the college returned all the overheads to academic to assist them in establishing a research group.

5.2 Seeking and developing collaboration with industry As highlighted in the report titled Public Investment in University Research: Reaping the Benefits, May 19994 ,the visit confirmed that since a high proportion of Canadian companies outsourced their R&D the issue of seeking and developing relationships was not a major area where systems were being developed to enhance collaboration. Nevertheless the visit provided an opportunity to get views from a number of Provincial and national government agencies and industrial associations to highlight any key problems in this area.

Situation at RHUL Most UK HEIs have some form of collaborative activity with industry in place, some universities have more well developed activities in this area then others.

At Royal Holloway the active researchers have over time built up strong links with large multi national companies, SMEs, research technology organisations (RTO), public sector research organisations and public sector social services.

Here the role REO plays is to provide the service and support to strengthen these links and help both partners gain maximum benefit from the collaboration.

The REO has established the Commercial Connections activity which is made up of members from industry who bring with them strategic commercial skills.

This knowledge is used to help identify mechanisms of utilising the expertise and research resources of the university. For example Commercial Connection has helped develop marketing of its technical services around core strengths, eg information security, support for clinical trials of new drug developments, technical services such as MRI scanner. More recently through collaboration with Brunel University, funding has been secured through HEROBAC and HEIF to taken on 4 sector specific knowledge transfer managers who work with the academics to develop opportunities with external 23

stakeholders. Through this collaboration a network called Partnership for Access to Research Knowledge (PARK) has been set up. A core activity of this is to bring on board paying members who in exchange get access to series of workshops and seminars, networking events, access to university facilities and more importantly access to expertise. The collaboration is expected to benefit from any synergies on key areas of expertise of the two HEIs and to develop multi-disciplinary teams to exploit new major initiatives eg in health, sustainability and environment to name but a few. As this activity is in its early stages, its not possible to draw any firm conclusions on its success and lessons learnt. A key area that the board of Commercial Connections has suggested needs to be developed is to provide support to follow up on how the client viewed the University’s ability in meeting their contract requirements and the quality of service they delivered.

Situation at UoA and UWO At both UoA and UWO the industrial liaison offices did not provide any proactive support to help develop collaborative links or partnerships.

At UoA the main role of the office was risk management and in particular being aware of any key pitfalls and ensuring that any potential risks were manageable. For contract research activity there was no formal monitoring process to gauge client’s satisfaction with the service provided by the research group. However following the new reorganisation the aim will be to provide a more targeted and proactive support by placing contract staff within in each Faculty. At UoA the college policy on overhead recovery was15% on industrial grants and 40% on research contracts. Government grants implemented special rates which varied depending on the activities of the department. However Federal government and Provincial government work did not attract any overheads. On government contracts the funder owned the IP like the UK. Key issues: • Contract research: University owns IP. • Overhead distribution; 20% PI, 23% Dept, 9% Faculty.

• VP Research Office gets 9% to support research initiatives.

• University keeps the remaining 39%.

If the project were leveraging funds from other sources then for exceptional cases the overheads being requested would be lowered. Where legal advice was required this was provided by external lawyers because of the large workloads and varied nature of the activities carried out.

At UWO, OIL did some proactive promotion of collaborative opportunities by attending conferences or workshops but rarely made direct approaches to companies. The Community Of Science (COS) is used to promote University expertise but the office have noticed that most academics are not diligent in updating their expertise records.

24

The visit to UWO provided an opportunity to have an in depth discussion with Deans from the Faculty of Engineering and the Faculty of Medicine and Dentistry. From this it became evident that most departments had strong industrial collaboration and in many cases chairs had been funded through University Industry Partnerships. Strong industrial funding was seen as a useful marketing tool for attracting good students. Within Medicine the nature of the companies activities demanded the need to have good awareness of developments in University research and this naturally led to greater opportunities for collaborative activity. Some funders such as NSERC and CIHR had developed programmes to encourage collaboration with industry.

And like UK schemes required matched industry funding Situation at UoT UoT has developed a programme to enable them to build strategic collaborative partnerships with industry. In past when a particular collaborative project was completed there was no effort made to further develop the partnership. The new approach is to explore other opportunities that can be built on to a specific collaborative project eg develop programme to fund chairs, support for junior post, funding for laboratory infrastructure, funding for research and funding to develop specific master courses or CPD activities. In return the company gets access to students, junior researchers and rights to IP on research they fund. It also provides opportunities to access other expertise within the University which is of value to other divisions within the company eg testing products, marketing departments requiring psychology profiles of customers, tackling social science issues of relevance to their Human Resource department eg law, policy issues etc. The key mechanism that ensures this works without any conflicts of interests was the creation of a committee. It is made up of members from the company and from the University to oversee and advice on all the activities.

Key point: To promote developing industrial collaboration •

UoT has developed the approach of forming Strategic Collaborative Partnerships with key industrial collaborators. Through this partnership the industrial partner is offered a portfolio of expertise to meet the differing needs of the various sections across the company.

5.2.1 Support for promoting university – industry collaboration: National and Provincial organistations The visit provided the opportunity to meet up with a number of Provincial and National associations and organisations within Alberta and Ontario to get an overview of the support and schemes they have developed to promote university and industry collaboration. This is not an exhaustive list as the duration of the visit only permitted the opportunity to meet some of the key players. Table in Appendix 4 summarises the organisations and the schemes they offered.

25

There are nationally supported organisations such as Industrial Research Assistance Programme (IRAP) at UoA and Integrated Manufacturing Technologies Institute (IMIT) at UWO whose main function is to foster university industry collaboration. The former schemes aim is to foster innovation within SMEs by providing funding to support programmes to access university research expertise. A number of these schemes are similar to the feasibility and R&D projects that are funded through the UK DTI schemes. (see Appendix 4) At a local level there were organisations set up by the Provincial government with the objective of promoting collaboration between universities and industry in their Province. Within Alberta the Alberta Research Council (ARC) had a range of funding schemes to foster collaboration between industry (sometimes inds sponsors), university, government (sometimes govt sponsors). ARC has also developed a ‘Yellow Pages’ type directory to promote university research expertise. In Ontario the Provincial government funding helped set up the Ontario Centres of Excellence (OCE) which included Materials and Manufacturing Ontario (MMO) to help tackle concerns that universities lacked knowledge of technology transfer and to help promote culture of collaboration between industry and academia. This organisation had funds to support collaborative projects and also provided an opportunity through networking to help identify new areas of research. These Centres also ran training programmes for students and a business planning competition targeted to 4th year engineering students as well as funding fellowships. The fellowships enabled new graduates to get experience of technological innovation and R&D in industry, in particular SMEs. Both BioAlberta and Information Communication and Electronic Technology (ICET), which receive Provincial funding are sector specific organisations within Alberta which work with local Universities to find out what new companies needs are and to help seek opportunities for collaboration. The latter also promoted networking events and had a business planning competition to raise awareness amongst academia about partnerships opportunities with local companies.

A group called Westlink was set up to promote collaboration within the12 Universities based in the Western Provinces with support from Federal funding. The organisation helped to develop contract work, arrange networking event and promote technology transfer skills and awareness as well as entrepreneurial skills. The internship programme to develop technology transfer scheme is covered in more detail under Section 5.4.

In both Edmonton and London, Ontario also had agencies similar to UK RDA’s which helped promote economic development of the city and surrounding regions. London Economic Development Cooperation (LEDC) had a number of programmes and activities supported through the city, provincial government, Canadian government and industry to promote technology transfer and collaboration. A key activity supported by LEDC and Edmonton Development Agency was support for an Innovation Centre. The LEDC centre is a franchise concept which is funded through Federal,

26

Provincial and industry funds. Both provide brokerage services, small matching grants, support for developing business plans and mentoring programmes. LEDC also facilitated internship opportunities by working with Ivy Business School in UWO. The programmes aim was to use this as a mechanism of encouraging 5% of the students to consider London as a place for employment opportunity. They also ran a competition for science and technology students where a team of 3/5 students would carry out case studies within a commercial environment eg look at current marketing activities and produce a report on recommendations.

Like the UK, the Canadian Research Councils have also developed schemes which provided funding for basic research. One such agency was the National Science and Engineering Research Council (NSERC) which provided funds for collaborative activities with industry. Key concern is that these grants did not pay overheads.

At a national level significant funding has been provided to set up National Centres of Excellence (NCE) to help develop collaborative mechanism between Canadian HEIs and industry in strategically important areas. The main role of these Centres is to provide a mechanism by which to tackle key problems through setting up multidisciplinary research activities. The Centres receive funding for up to 7 years with reviews every 3 years. These NCE’s act as a one stop shop to develop contract research activity with companies.

A Synergy Award was set up at a national level by the Federal government to reward effective university and industry collaboration that has cultural fit, match between R&D, led to new product development or involved the University doing high risk research.

Key point: To promote collaboration with industry •

National Centre of Excellence is a similar concept to the UK Interdisciplinary Centres (IRC) and Faraday Partnerships but there are operational and programme activities within these Centres which could benefit UK by understanding how they are implemented in Canada.

5.2.2 Role of local government agencies in promoting university – industry collaboration The visit to Canada highlighted that local government, known as the Provincial government ,is highly proactive in funding initiatives to aid university – industry collaboration. Parallels cannot be drawn with the UK due to the difference in education funding structures, taxes and the geographical size.

Particular mechanisms and the support these provided for promoting knowledge transfer between university and industry could be worth implementing in local regions across UK. This would need RDA’s in UK to adopt a similar role as the one taken by the Provincial governments in Canada.

27

One such mechanism is the concept of Centres of Excellence (CoE). Within Ontario the local government had funded the formation of Ontario Centres of Excellence (OCE). This centre had four main technology specific organisations: Materials Manufacturing Ontario (MMO) CRESTech, It and Photonics Research Ontario. This visit provided the opportunity to find out what the five main strategic objectives of MMO were: • • • • •

Supporting university-industry collaborative research projects.

Giving graduates and undergraduates the opportunity to acquire training in a commercial environment.

Promoting technology transfer.

Running networking events and Creating opportunities for promoting awareness of technologies within Universities.

The Provincial government saw support for such activities as being a major force in driving the economy and promoting inward investment for the benefit of the local economy. The OCE is the forerunner to the NCE that have been funded in key research topics more recently across Canada.

Key point: Support UK Regional Development Agencies (RDAs) can provide to promote developing industrial collaboration •

UK RDA need to look into the concept of supporting technical centres of excellence within a University to provide expertise and service to local companies particularly SMEs. Thereby stimulating vibrant local economy.

This is likely to require significant investment, at least £8M - £10M over 3-5 years. Currently such support in the UK is provided by Faraday Partnerships.

5.3 Intellectual Property Rights (IPR), Technology Transfer and Licensing A notable difference between UK IP policy and that employed in Canada is that in the latter case the academic owns the IP. At UoT the push by Canadian Universities to be more innovative led to the review of the IP policy which originally stated that IP was owned by the University. Under the new policy the academic owns IP. However UoT ensured there was a mechanism in place which enabled ideas to be protected while allowing the academics to publish as well as gain financial reward for taking forward an idea to exploitation stage. Consequently Report of Invention (RoI) has increased by 400%.

The subsequent sections provide an outline of how IP is dealt with at UoA, UWO and UoT. They result from discussions with technology transfer offices, local economic development agencies and organisations which support and promote commercialising research within universities. A key issue that will become evident from the preceding sections is that the Canadian IP policy has not prevented Canadian universities from having a successful Spin Out

28

activity. This supports the literature review summarised in Section 2.2 which highlighted that Canadian universities have been as active as US universities in this area.

Appendix 5 has a table summarising the key aspects of the IPR and Technology Transfer policies within RHUL, UoA, UWO and UoT. IPR and Technology Transfer practice at RHUL, UoA, UWO and UoT Below is a summary of the key steps adopted by RHUL to identify IPR that has potential for exploitation.

• • •

• •

Inventor completes Invention Disclosure Report (IDR) Form.

Preliminary checks carried out to verify who owns IP depending on type of funding from which IP is generated.

Meeting 1 with Inventors – to assess viability and this is followed by: o Prior art search (Espacenet tool) o Preliminary review of market size o Preliminary review of likely impact on market of technology o Outline comercialisation strategy o State of development of technology: spin-out: licensing.

REO takes decision in principle to proceed with patent application.

Meeting 2 Full consideration of patent capability and instructions to file with Inventors and Patent Agent

Following the outcome of the 2nd meeting the office reviews commercialisation options which could be: • Licensing and market.

• Spin Out. • Assign.

• Seek further research funding.

The policy outlines that the incentivisation will be dependent on the number of inventors, their effort in taking idea forward, the amount of external investment required, financial benefits generated by inventor from the company and cost associated with obtaining advice and in seeking funding. It is expected that researchers will normally be minority shareholders in a Spin Out company.

The college is currently revising its IP policy in light of greater opportunities for seed stage funding and technology transfer programmes.

The process adopted at both UoA and UWO for disclosure of an invention, its protection and how any benefits are shared between the inventor and University were similar. This involves submitting a RoI to the Industry Liaison Manager and then the inventor has 30 days to decide if they want to assign ownership to the University. If they do not assign then the University takes no role in commercialising the invention. If it is assigned to the University then the Industry Liaison Office spends 3 months to evaluate and decide whether to invest further time and money in the idea. A one page non confidential disclosure agreement is produced to send to potential partners or investors. In cases where the area is technically more demanding specialist external 29

agencies are used. A patent search is the key mechanism for the evaluation.

At UWO, OIL encouraged the academic to carry out the patent search. This can be done through the library which has students trained to carry out IP searches. At both UoA and UWO MBA students are used as interns to provide support for the market evaluation exercise. This is generally the most demanding and can take up to 20% of the effort.

At UoT the technology transfer office does the due diligence, which is done within 3-6 months of IPR being assigned to the University. This involves developing a business plan and strengthening the IP and working with a Venture Capitalist (VC) to find appropriate management team for the venture.

At UoT the technology transfer activity was set up as an independent section which allowed them more flexibility particular when making policy decisions and helped with overcoming any issues regarding conflict of interest.

At UWO it is highlighted to the academic that an added benefit of the academic going through the University is that the opportunity is assessed by an internal review committee. It meets every 2 weeks and includes Head of OIL, technology transfer manager and investor. At the review an overall rating is assigned to the opportunity using a grading questionnaire.

In Canada the Provincial governments and Universities recognised the importance of innovation and commercialisation of university IP as a critical mechanism for improving the local economy and attracting inward investment while enhancing the Universities income. As a result Universities and Provincial governments worked closely to ensure that the Industry Liaison Offices were adequately resourced. At UWO NSERC also contributed to the resources of the OIL. It was evident that for a University to implement an effective technology transfer process it is necessary to have a significant IP budget. The patent budget at UoA is £0.5M (C$1.22M) and at UWO it is £90k - £103k (C$220k – C$250k).

Because of resource issues neither UoA nor UWO had a proactive process in place to see whether there were opportunities of bundling IP together.

In the case of hospitals which are attached to the University their IP policy states that IP belongs to inventor but is obliged to share it with the hospital. At UWO the college had the Roberts Research Institute (RRI) which does medical research and is funded through private support. At RRI and the hospitals revenues is shared with the inventor. The nature of the incentivisation depended on what use the inventor had made of the BDO. If BDO support is used then hospital expected to have a higher stake in the opportunity. With a Spin Out the hospital preference is to split equity 50/50 as this can act as an incentive to retain high calibre staff.

Within Western Canada the lack of staff with relevant technology transfer skills has been tackled through the development by Westlink of an internship programme. Further details on programme are provided under section on Entrepreneurship culture Section 5.5. Students who have been through this

30

internship come out with a good grounding to support Spin Out efforts at the University.

Key point: To protect IP and promote technology transfer activity the HEI will need to: •

• •

Have adequate resources and people with knowledge of technology transfer, eg experience of academia, business environment and worked in finance.

Have in place a coherent, transparent and flexible IPR process.

Have a champion who has the drive and who has developed opportunity through seeking funding which allowed them to build a relationship through contract research.

5.3.1 Spin-out company programmes After a potential idea has gone through the evaluation process outlined in Section 5.3 the Industry Liaison office has to make a decision on what route to take when exploiting the opportunity. The visit provided an opportunity to collect views from the Industry Liaison office at UoA, UWO, UoT as well as getting the opportunity to hear how the local regional agencies supported technology transfer. Views were also gathered from a number of hospital business development offices within medical hospitals, medical research department such as the Roberts Research Institute (RRI) as well as getting the opportunity to get first hand knowledge from academics and students who had Spun Out companies.

Appendix 6 and 8 has a summary table with information on sources of funding available to develop these early stage opportunities, brief outline of some Spin Out Case Studies and summary of key issues to note when Spinning Out an opportunity.

Within both Alberta and Ontario there was lack of access to early stage funding from the VC’s and the Business Angles (BA’s) compared to what is available in UK. Also there was limited Provincial and National government funded schemes to help take technology forward. While this was a problem it did not appear to be a major barrier to development of Spin Outs. Within Alberta the Western Economic Diversification Programme provided some support to match the needs of the local economy. Economic Development Edmonton (EDE) had set up a partnership fund called Calgary Seed Cooperation. The Information Communication and Electronic Technology (ICET) alliance were at the time of the visit in the process of launching a £20.5M (C$50M) Seed Stage fund with £900k (C$2M) secured from National government and some from Provincial government. The Alberta Research Council (ARC) had a C$8M fund to support its own institutions, which were similar to the ones supported in UK by the BBSRC and NERC, with Spin Out opportunities. The fund is currently being managed internally and Universities can apply but only if collaborating with an ARC institute.

31

To encourage the private sector to inject funding for Spin Outs a key strategy adopted by the Canadian Government was to provide low tax credits to the private sector funders. In the Province of Ontario a number of funds for early stage ventures were setup through support from Labour Unions. These were the Canadian Medical Discover Fund, Labour Venture Fund and Canadian Science and Technology Seed fund. Under Ontario Law this meant additional tax write offs for those people investing money in these funds. A £1M (C$2.5M) University of Western Ontario Internet fund set up in collaboration with Toronto investment funds provided support for projects related to ecommerce or software issues. However with the recent economic downturn the fund is currently only supporting projects which have a product already in place or one which has identified a key market.

Within London Ontario a new group called the London Technology Group was set up to identify early stage opportunities and offer Universities support to commercialise opportunities. The organisation assists the Spin Out in finding a suitable location in exchange for equity/ debt. It also provides access to a team which has business mentoring skills, experience of running a company, advice on IP, support to develop Business Plan (BP), help identify a management team and seek finance.

When supporting Spin Outs the Industry Liaison office policy was to target support to those individuals who demonstrated commitment to wanting to commercialise their research particularly as resources were limited. Following on from the outcome of the evaluation a decision is taken to either license or Spin Out. The preferred approach is to target licensing deals as these generate predictable income requiring less staff resources and is less risky.

At UoA currently the rate of creating Spin Out’s is 10 – 15 per year compared to approximately 4 per yr at UWO. If the decision is to go through the Spin Out route, then at UoA the University provides funding in the region of £12.2k £36.6k (C$5k – C$15k) to pay for key services such as lawyers and to develop a BP. Todate the University has Spun Out 75 companies of which the university has a stake in 30.

To motivate academics to consider Spin Out’s UoA has the following incentivisation process depending on the Spin Out scenario: • If academic has done the hard work in creating Spin Out then University takes 15-17% equity. This can be lower if the Spin Out is at much earlier stage.

• If academic goes independently university takes 5 -15% equity, on average 10% with 1-2% royalties.

• If University provides major support then 10-20%, on average 15% with 1-2% royalties.

At UWO the University takes a flexible approach and if at very early stage will not insist on onerous upfront royalty payments, rather it opts for the licensing approach. Preference is to use a combination of equity, royalty and licensing income.

32

UoA is currently looking towards a more strategic approach to Spin Outs since a success in the long run could provide a significant payout to the University compared to the time invested in licensing option where the income can fluctuate. The new approach will focus on the director representing the companies interest and the University interest represented by the Spin Out manager. The process adopted is likely to involve: Stage 1 - Business Plan This involves evaluating the opportunity to look at potential for IP, the strength of technology, market opportunity and context. This last point will look at issues such as who are the partners, what business people need to be brought on board, historical background of the inventors and access the political and cultural attitude of the inventors. The decision to take forward the venture to Spin Out would be a mutual one between the University and academic.

Stage 2 - Concept development.

If Stage 1 provides strong supporting evidence for the potential for exploitation then the next step is to begin developing the Business Plan (BP). This will require putting in place a strong management team by sourcing the people externally. To attract the right people an equity stake in the company would be offered as an incentive. Once the management team and BP is in place efforts would be made to secure Finance. At this early stage UoA would typically be able to provide £2k - £10.2k (C$5k – C$25k) from OIL budget. In unique cases this could be £20k (C$50k) and in exceptional cases the support could be upto £40k (C$100k).

Typically a Spin Out could emerge following a process at the two extreme ends of the spectrum. At one end of the spectrum is the orthodox process which involves the inventor from the University driving forward to create the Spin Out. At the other end which is the technology push end it is the University that creates the Spin Out. The ideal scenario would be a process somewhere between these two extremes but with some bias towards technology push. In creating the Spin Out a typical effort is 10% on technology and 90% on Business Planning and Finance.

At UWO the hospital and medical research activities in contrast to Industry Liaison Offices had even less resources. Major problems were: • Inadequate budget to protect IP, however most clinicians were able to use their own resources to fund protection of the IP. • Industry liaison office had inadequate coverage for the hospital BDO’s.

• University process was too slow and was not flexible.

• Biggest problem was with approach to marketing opportunity. BDO had limited resources so most of the time the clinicians did this themselves.

• BDO were not able to provide any proactive support or raise awareness of IP.

33

At RRI to date nine companies have been Spun Out and 12 licenses signed with approximate revenue of £410k (1MC$). The equity value in the Spin Outs is estimated at about £3.3M - £3.7M (8-9MC$). The Institute holds equity in the Spin Out but when they are sold the revenue is distributed on a pro rata basis. The issue of the Institute having ownership of IP is important to RRI as this gives them greater control on how the idea is Spun Out. This was also critical as it gave them the ability to attract the right CEO with the necessary experience since they were able to offer equity in the Spin Out as an incentive. When developing the BP they pay close attention to creating sound cash flow projections and if possible seek grants to support the activity.

At UoA they have reverted back to the policy where the academic owns the IP. As a result over the last 24 months 21 investments opportunities were brought forward and secured £7M (17MC$) funding to take forward 16 Spin Outs. The fund is managed by external fund managers.

5.3.2 Spin Out Case Studies RHUL Case Study The Spin Out venture is a new activity at RHUL and so there isn’t a track record to draw knowledge from in order to highlight what the key recommended mechanism is for commercialising a opportunity. The following is a brief outline of the process adopted in the first Spin Out at RHUL called Holviz Ltd. Formation of the Spin Out is still in the early stages so we are not able to report on our experience of the complete cycle involved.

The opportunity for the Spin Out arose as a result of the academic identifying an application of their research which provided a cost effective way of enabling current security scanners from converting 2D images to 3D as well as proving the ability to view objects occluded from a fronton view. The academic approached REO to discuss the idea and the initial assessment highlighted the potential opportunity of commercialising the idea. To push forward the idea the college provided support through the Research Strategy Fund for the patent cost and to carry out initial proof of concept project.

Further meetings took place with the inventor to produce a brief outline of the technology and also to check that the idea was patentable. Initially a patent search was carried out to see if any IP had been already filed on the technology. The outcome was negative and so a patent was then filed. The next step was to develop a BP and carry out a market evaluation with the assistance of the IT Knowledge Transfer manager. The office also produced a one page confidential summary of the idea which was targeted to potential commercial users of technology or partners. Having an integrated Research and Enterprise office was useful when it came to sourcing funding to develop the idea for commercial application. The Research Office highlighted the potential of applying to the NESTA Innovation and Invention Scheme for early stage funding. An application was submitted which was successful and this was followed by forming a limited company called Holviz Ltd. Through discussion with NESTA and REO it became evident that this was a rapidly

34

moving area of technology and that it would be beneficial if additional funding of £50k - £60k (C$122k – C$146k) could be secured to accelerate the development. The DTI SMART scheme was identified as a suitable source of funds and a proposal is in the process of being submitted. Applications to this scheme require match funding which is being sourced from the Colleges’ early stage PARK fund. SEEDA are in the process of setting up a growth fund which could also be a useful source of match funding.

Some key early issues that have emerged as a result of experience from this first Spin Out are: •

•

•

•

It was beneficial when an academic is aware of the potential of their research having a commercial application particularly when the research office does not have resources to proactively seek opportunities.

The project needs to be championed by the inventor who must have a genuine interest in commercialising the idea and devoting additional time over and above normal teaching and research duties.

A key benefit is the presence of a number of funding sources for funds of up to £100k (C$41k) for proof of concept work. This access to government funds to the College for supporting early stage development ideas has been a key benefit.

Taking an idea to Spin Out requires considerable input and support from a range of people with different skills both within REO and externally. The effort to date is summarised below: University personnel o Inventor 2 man months o IP manager 0.75 man months o Knowledge Transfer Manager 0.2 man months o Research Office staff 1 man months o Head of REO 0.5 man months External Personnel o Small Business Link SMART project consultant o Legal advice

0.5 man months 0.15 man months

From the above it is clear that taking an idea to commercialisation requires considerable support from staff with a range of skills. Holviz Ltd has required to date approximately 6 F/T man months to patent the idea, develop the BP and market evaluation and seek early stage funding. Most UK REO type activities do not have such skills or resources ready at their disposal.

UoA Case Study The opportunity brought to UoA ILO by mature graduate student. The table in Appendix 7 provides a time line for the progress of the Spin Out with key actions and were possible indication of major expenses.

35

Key issues: • The time to get to the funded stage was not critical as the technology in principal was time independent.

• Exercise demonstrated that to be successful a partnership approach required between UoA and external providers thus not impacting on University resources.

• If PI approaches office with the idea first then important need to gauge inventors interest.

• Market evaluation should be the 1st step, to identify customers and what other solution out there. If negative this will save lot of funding and time.

• The patent should be robust in order to give market advantage.

• Taking an opportunity to Spin Out is a long process in this case it took 26 months from time ILO approached.

• Developing a Spin Out also requires significant investment from the University, evident from £88k (C$216k) spent on this venture.

UWO Case Study At UWO there was an opportunity to meet up with inventors of the following companies; Viron, CVD, EK3 and Plantigen and the findings of these meetings are summarised in Appendix 8.

Viron emerged from research funded by RRI and as a result of the inventor having a clear awareness of IP. CVD came about from a technology project within the laboratory which then moved onto collaboration with MMO in order to get access to facilities and funding necessary to take it forward. In the case of EK3 the opportunity was Spun Out by an MSc student. The Spin Out Plantigen emerged from the on campus hospital despite the lack of promotion of IP awareness and potential for technology transfer.

Once the Spin Out is formed an attempt should be made to maintain collaborative arrangement with University in order to get access to expertise, facilities and resources. The critical next step to consider is how to transfer the technology. This would need to tackle issue of a inventor being involved full time or part time. Where possible the inventor role should be limited to Vice President (VP) technology and product development but not Chief Executive Officer (CEO). Its important that if University is keen on promoting Spin Out opportunities then it should have a flexible process in place as the problems and issues facing one Spin Out will not be the same as the next one.

Putting in place the right champion is another critical factor and this can be achieved by offering an incentivisation package which includes equity in the Spin Out. Underpinning all this is the need to implement a flexible IP process.

If this process is too rigid this may obstruct the development of the company.

Even more important is to develop a structure which allows the company to use the technology and a mechanism to take the technology forward. There also must be a structure to enable the inventor to devote the time required to develop the venture eg reduction in teaching load. Therefore to develop a successful Spin Out environment it is necessary to have appropriate structures and mechanism in place and staff with technology transfer skills.

36

Licensing a learning tool ILO approached by Department with CD ROM learning tool. Initial evaluation indicated the concept had a market.

• VP Academic office provided £80k (C$200k) to develop demonstration version. Funding offered in return for 15% equity stake in future income.

• Summer intern taken on to do market evaluation from which potential users identified.

• Evaluation of product showed good fit with current activities as the company was working with developing internet based teaching tools to enhance the learning experience.

• Signed NDA with potential company and product now on market as CD ROM. As a result of discussions with the inventors of these Spin Outs and other meetings at UWO and UoA a number of key issues emerged which need to be taken into consideration when an HEI is looking into Spin Out opportunities. These are summarised below.

Key point: When developing a Spin Out • Not all technology is suitable for taking through to the Spin Out route: − Useful to target those with low entry barrier to market. eg need low investment or must be sound technology which acts as barrier to others to enter. − Is the business a good investment opportunity eg does it have high growth potential. − Even if technology is strong a key area to look at is the likelihood of the concept having commercial viability. Ensure that expectation are realistic.

• Look for opportunity that has ability to be developed into platform technology which provides an option to target other market opportunities through multiple licensing. If the technology has a global application this would also be a distinct advantage.

• Look at the people behind the idea: − Reputation of the inventors, are they leaders in their field? − What level of commitment do they have eg have they been pushed by University to take Spin Out along and are not being forced to leave University to take forward company? − Have they got drive and focus, is the chemistry right and is the management personnel appropriate to the technology field? − If the inventor has no real interest in taking forward the idea then its best to put in place proper management team.

• If possible the strategy should be to take equity stake in venture. Be prepared to be flexible and look at what is on offer.

• Caution needs to be taken about ventures with very high capital investment.

• Structure needs to be in place to enable the inventor to reduce teaching load in order to devote time and proper attention to the venture.

37

Key point: Need under pinning policy covering the whole area of IPR and Spin Outs which clearly outlines: • what the ownership rules are, • what the IPR process is and the mechanism adopted and • support provided to decide if an opportunity is worth exploiting and how the opportunity is taken to commercialistaion.

The key questions that that the Research and Enterprise Office (REO) would need to consider before embarking on promoting the need for the University to protect its IPR and develop opportunities for commercialisation are: • • •

Do we have a transparent and robust IPR policy?

Do we have a clear and well defined mechanism for highlighting opportunities and taking these to commercialisation?

Do we have the funding resources and staff with necessary technology transfer skills?

1. Do we have a transparent and robust IPR policy?

The college is currently revising and updating its IPR policy.

2. Do we have a clear and well defined mechanism for highlighting opportunities and taking these to commercialisation?

When developing a well defined mechanism for spotting new opportunities and taking these to commercialisation the guidelines should take into account: • The parameters for selecting opportunities for commercialisation should take into consideration the barrier to enter to the market, future growth potential, how broad is the technological innovation and is it commercially viable.

• Implementing a process for examining the people behind the opportunity, are they international experts in their area, what commitment do they have to commercialising the idea and how well can they work with one another?

However this should not prevent the technology transfer process since these barriers can be overcome by seeking the right people externally to manage the opportunity. Implementing psychometric profiling may be a useful tool to implement for assessing the teams potential.

• Developing an incentivisation mechanism which is flexible and able to deal with a range of different scenarios is essential. The constant in this should be that the preferred option should be an equity split.

• Introducing a structure and mechanism will enable those who want to drive the opportunity forward to be able to devote more time to it by for example enabling them to reduce their teaching load and its impact on pay and promotion.

3. Do we have the funding resources and staff with necessary technology transfer skills?

In conjunction with the above the other two issues that need to be borne in mind are:

38

•

•

Ensuring that the Research and Enterprise Office has adequate resources and people with necessary knowledge of technology transfer to support the Universities ambitions in developing income from commercial opportunities.

Creating opportunities for access to relevant finance and developing a support mechanism to provide Spin Outs with legal, financial and human resources services. A key aspect will be a mechanism to develop the shareholders agreement.

On the second point UK HEIs now have access to early seed stage funding through the UK Government University Challenge fund and HEIF. RHUL has been successful in securing funding of £4M to set up the CASCADE fund through this fund. In addition a PARK fund of £1M has also been set up through partnership between RHUL, Brunel, HSBC and JRA technology Ltd. Both these funds now provide access to finance in the region of £25k for small scale proof of concept studies and large scale development projects requiring funding of up to £250k.

Currently REO does not have sufficient manpower and staff with the necessary skills to provide the sort of support that is required for an effective technology transfer mechanism. REO’s experience with Holviz Ltd has shown that it will require one person working full time for 6 months just to take the opportunity to the stage where it has secured financing and a company structure is in place. The outcomes of the visit to Canadian HEIs supports this view. Establishing a Spin Out will involve dealing with a wide range of issues such as submitting a patent, evaluating the market opportunity for the venture, looking into and getting suitable finance, creating a limited company, sorting out a shareholder agreement, identifying a suitable management team, creating a structure to provide the Spin Out with financial, legal and human resources services.

5.4 Innovation Centres and Business Incubators Approach adopted at RHUL The SEEDA strategy for building on the highly productive local economy has placed knowledge exploitation from regional Universities as a vital mechanism for delivering this objective. This led to SEEDA allocating funds for an Enterprise Hub Project to establish regional nodes or ‘hubs’ for enterprise support. Through this programme RHUL successfully secured funding in partnership with Surrey University and the Leatherhead Food Technology research organisations to set up a hub focused towards IT, Media and Information Security sector. As a result of these funds the campus now has an Enterprise Centre which is an incubation facility for companies involved in the IT sector, Media Arts and Information Security. Tenants wanting space must be involved in the target sector groups and there must be some match with the strengths across the University campus. This letter aspect provides the company with access to expertise on college campus and in return the

39

relevant college departments have the opportunity for collaboration and student placements. The centre offers a range of flexible office space at lower then market rents but its business strategy is to make the activity self funding and generate revenue to support future expansion plans. The Centre provides access to the necessary infrastructure and services but there is no add on services such as legal advice, BP and excess to finance. Space charges are approximately £25/sq ft (CS61/sq ft). To date the centre has been hugely successful as evident from the fact that it is completely occupied.

To support Spin Out activity from the campus and for those located in the Enterprise Centre the college has secured through government funding its own £4M (C$9.76M) early stage fund called CASCADE. This fund provides up to £30k (C$73.2k) for proof of concept work and up to £250k (C$610k) for more development type activity. The fund is in collaboration with other regional universities; Brunel University, Reading, Sussex, Surrey and managed by Generic Asset Management. More recently the college has created a £1M (C$2.44M) PARK fund in collaboration with Brunel University, HSBC and JRA Technology Ltd. This fund supports proof of concept projects and the funds can also be used as match funding for government type schemes such as SMART. In addition the proximity of the college to the University of London has also given it access to a fund set up by the London Technology Group.

The long term strategy at RHUL is to build on the development of the Enterprise Centre by firstly expanding on this facility and then to look into the financial viability of setting up a Science Park. An initial study on this has already been commissioned, the findings to assess options for development of an innovation support facility were reported back in April 2001. The two main points that were the recommendations of this report are: •

•

The facility may take the form of new build or re-use of existing space, with financial support coming from the income generated through the Enterprise Hub. There is strong demand for ITC based Science Park in the locality and there is significant demand from RHUL itself for a Spin Out facility.

Approach adopted at UoA The University has set up a Research Transition Facility (RTF) which provides incubation space and other administrative support for Spin Outs. The facility is referred to as a Transition Centre because the University view is that the concept of incubation is more applicable to the laboratory development stage work which most project should have already been through. Although the facility falls under the responsibility of ILO its run as an arms length venture to avoid problems with conflict of interest. It was established in 1999 with funding of £800k (C$2M) from UoA and £600k (C$1.5M) for infrastructure from the Federal Government programme ASRA. A commercial business model is used for running the RTF but this is neither a real estate model nor an academic model. The funding acquired for the set up including even the grant, is seen as a debt which revenue needs to cover. At the early stages

40

there were no ready Spin Outs to move in so, considerable effort was put into raising awareness of the facility across the campus. The main targets were research active academics as it was felt that they were more likely to have developed a culture of wanting to commercialise their ideas. The business plan proposes to payback £400k (1MC$) to University over 10 years. This facility has 9000 sq feet space, of which 50% is available for academic Spin Outs and 50% for commercial users. Operating rent charged at £2.5/sq ft ( $6/sq ft) sq foot.

An RTF advisory committee would evaluate the suitability of commercial Spin Outs as tenants; in the case of a university Spin Out’s it would be expected that ILO will have carried out the relevant evaluation. A key criterion when assessing suitability of a tenant is their ability to pay rent. A University Spin Out is provided some support initially by UoA within the University environment to reach a stage where the viability of the technology is demonstrated. Consequently when the Spin Out moves to the RTF it should have a better chance of surviving. RTF does not provide any support services such as business planning, lawyers or access to finance. In the case of university Spin Outs, ILO is expected to provide this. For commercial Spin Outs RTF can facilitate contact with such services. Currently the facility has a 75% occupancy rate. There is no fixed policy on length of tenancy offered, it generally depends on the circumstances of the individual venture and their needs.

Within Edmonton there are limited private sector Incubation facilities. The Edmonton Capital Region Innovation Centre has access to Innovation Centres which will provide support to meet balance between commercial issues and policy reasons. Within Alberta a new franchise has been set up on the basis of the Montreal Innovation Centre. It’s a virtual Centre and its main objectives are to target support to 8-10% of companies which show the greatest potential for developing from a Spin Out into a new company. The priority target area is life sciences, information and communication technology and advanced manufacturing. The key aspect of the Centres activity is to provide a brokerage service eg mentorship, help with business planning and finding partners. This has been a highly successful model and other states across Canada are establishing similar Innovation Centres.

The Alberta Research Council (ARC) works closely with the regional, local and national agencies to provide Spin Out support. Currently working in partnership with City Edmonton Provincial Government to set up a Techno Park to provide space for companies moving out from the UoA RTF. The Natural Research Council (NRC) also works closely with Western Economic Diversification Programme to help generate economic development and technology. Edmonton also has the Edmonton Innovation Centre which has been set up with joint funding from Provincial government and Federal government. More recently the Provincial government has funded Innovation Centre Alberta (ICA). The aim of the ICA will be to generate 15 new Spin Outs per year.

41

Practice adopted at UWO In London Ontario a London Biotechnology Innovation Centre has been set up on land provided by the University on its campus and funded with £2.1M (C$5M) from the Provincial government. The Centre has established a relation with OIL Technology Transfer managers in order to work together in identifying opportunities on the basis of the following key criterion: • Venture must be involved in a product which will have impact on local economy.

• Should be a potential growth area and the venture should demonstrate it will be able to establish a strong lead in its market sector.

Total rental space is 50000 square feet with 1/3rd for office, 1/3rd wet laboratory and 1/3rd dry laboratory. The facility would provide support which adds value by: • Providing access to business analysis expertise through UWO MBA School.

• Obtain access to legal advice to strengthen IP. • Act as brokerage between science and other services across the campus eg MRI, testing facilities.

• Provide mentoring service.

• Develop relationship with Venture Capitalist and Business Angles.

Run on commercial basis with rent charges of £12/sq ft (C$30/ sq feet), target is £9/ sq ft (C$22/ sq feet). The long term aim is for the majority of tenants to be Spin Outs from University but currently spaces targeted to external Spin Outs eg commercial. The Centre has developed contact with the city Bio Park in order to provide new space for tenants that are ready to move out.

A major barrier for Spin Outs is lack of private or government supported early stage funding. To overcome this problem the Centre is working to set up a London Venture Group fund with £2.1M (C$5M) funding from a major VC which will be matched by private donations.

At UoA the view is that its not critical for the University to have an incubation centre but that its more important to have adequate support to raise profile and awareness of opportunity within the private finance sector. To achieve this its critical that there is positive support from Provincial and Federal government bodies and this could involve providing resources to ensure university industrial offices have adequate support for technology transfer.

At UWO the NRC have established a Institute of Manufacturing Technologies Institute (IMTI) on their campus. IMIT provides support to Spin Outs by offering access to space and infrastructure. It can also provides assistance to collaborative ventures with access to early stage funding.

In summary an incubation facility should:

42

•

• •

Be able to provide access to modern infrastructure facilities eg internet, telephone connection, services, business contacts, finance partner opportunities, and mentoring service.

Create an environment where tenants have opportunity to network and exchange views with each another.

Provide space to activities that are likely to have an economic impact on the local region.

5.4.1 UWO Research Park The Research Park was completed in 1995 and established as separate venture which is a wholly own subsidiary of the University. Land for the development of the Research Park was leased from the University. The land offered was left to the University by a benefactor who had an estate which was sold to a private developer who has now established a hotel there. This has been beneficial as the Research Park has established a partnership with the developer to enable tenants to use the facility as accommodation and conference facility when entertaining guest and clients. Initially the head of OIL was also director of the Research Park but because managing the facility is a significant undertaking the decision was made to split this role and take on an external person to manage the facility and to avoid conflicts of interest.

The Research Park was developed with the help of a commercial loan which in hindsight has now proved to be burden. A better option would have been to set up the Park in partnership with a developer and offer equity in exchange for funding.

The Park was set up to provide space for university Spin Outs but because of the structure of the loan it became necessary to ensure that it was fully occupied with external clients paying commercial rents. An opportunity has now arisen to develop a infrastructure for university Spin Outs following access to Provincial funds as a result of recent government policy which sees universities having a key role in innovation and economic development for the local region. The funds are being used to establish an Enterprise Centre in collaboration with a local college to provide teaching environment for training students from the Hospitality and Management faculty. Land for the development will be leased from the Research Park and the next stage is to use any income from this to build a new facility for university Spin Outs with some space for external users. The external space would be targeted to a single tenant as there will be option for large office space. If this is a successful strategy then it will be valuable to UWO in providing opportunities for student placements and developing collaborative contract research opportunities for the academics.

43

Key point: For establishing access to suitable incubation space.

Some general observations which need to be take into account in the operations of its Enterprise Centre are: • Important to ensure that tenants have access to the most modern infrastructure services for telephones, internet, video conferencing.

• Essential to add value by providing access to business and finance contacts (Venture Capitalist and Business Angel’s) and legal advice. This could be through the colleges own expertise or through contact with external provides.

• Particularly useful to give access to mentoring service.

• Acting as a brokerage service to identify experts across the University campus who may be able to provide for example business analysis expertise through the MBA School, access to scientific knowledge or access to universities facilities eg MRI scanner is important.

• Its also vital to create an environment where tenants have the opportunity to network and exchange views with other tenants.

To help current tenants that have outgrown the Centre, it will be necessary for the Enterprise Centre to develop good contact with local private sector Innovation Centre and University Science Parks. This will enable the Centre manage a good rate of turnover of tenants particularly those which have grown beyond the incubation stage.

5.5 Entrepreneurship Programmes Activities at RHUL At RHUL recent government funding targeted at enterprise activity has enable the University to develop a structured training workshop to develop entrepreneurial skills for academics and students. The programme involves three separate two day workshops spread over the course of the academic year. The 1st workshop deals with how to go about generating an idea and this is followed with a 2nd workshop which provides information on developing a business plan and the final 3rd workshop looks at how to seek finance for the venture. This is the first year that this workshop has been run and so its too early to assess its value.

REO has also recently launched the Young Enterprise (YES) Graduate programme across the campus. The programme enables students to gain entrepreneurial training through setting up and running their own company. It also helps them to gain an understanding of the potential of SME's as future employers, and to consider self-employment and business creation as possible future career option.

Activities at UoA and UWO There was no specific policy within the Industry Liaison Offices at either UoA or UWO to provide any entrepreneurship programmes targeted to academics or students. Also within the Medical School and hospitals there was no

44

proactive process to promote entrepreneurial culture. In the case of the clinicians the nature of their work leads to individuals themselves developing an entrepreneurial outlook.

At UWO the Ivy School of Business has developed specific entrepreneurship courses targeted to graduates and postgraduates. One such course looks at the entrepreneurial aspect of developing a technology based company. This is an intensive four month programme covering topics such as entrepreneurship process, technology and entrepreneurship and IPR. There is also a team project which involves developing a Business Plan (BP). The aim of this exercise is to give the students an insight into what investors look for in a BP, technology commercialisation process, developing strategic alliances, financing and governance issues. For those in the Engineering and Biotech faculty the School provides a course on entrepreneurship as part of their fourth year curriculum. The School also runs an Ivy Client programme which is open only to students from science and technology backgrounds. This programme provides an opportunity for teams of 3-5 students to look into a comprehensive case study of a real company over 5-6 month timescale.

During the course the students have to complete a project which includes getting experience within a real business environment by being involved in such activities as market research.

A novel development aimed more at producing people with technology transfer skills is the Internship Programme developed by Westlink. This course is an 18 month programme incorporating experience which involves 6 months working in a technology transfer environment, 6 months with a VC and 6 months working in a Spin Out. The students for this Internship Programme could be MBA students or students from other Faculties. The activity is seen as a useful source of trained manpower for technology transfer office’s across Western Canada and has been wholly heartedly supported by the sector.

Within Alberta the Innovation Centre Alberta runs mentoring programme to support a person setting out on a new Spin Out. They also organise workshops to develop entrepreneurial skills. In Ontario the London Venture Group runs a mentoring programme to develop entrepreneurial skills.

Key point: For developing structured entrepreneurial training The provision of structured entrepreneurial training or exposure was not strongly evident at either UoA or UWO however this does not mean that other Canadian Universities had no targeted entrepreneurial training activities.

For staff Royal Holloway has recently developed an Entrepreneurship workshop with 3 core modules covering information on how to develop an idea, how to develop a Business Plan for the venture and how to seek financing. This course will provide valuable training on entrepreneurship to staff and is also accessible to students. Academic staff also have access to entrepreneurial seminar and workshops run by a group called the London Technology Network and the national Enterprise Challenge Centre’s. The problem again is lack of awareness and it requires a similar awareness raising exercise as mentioned above.

45

Key point: For developing structured entrepreneurial training (continued) For students Up until last year there was no structured activity at RHUL which gave students an opportunity to develop an awareness of enterprise activities. As a consequence of this RHUL first step in exposing its undergraduates to enterprise has been through REO launching the Young Enterprise (YES) Graduate Programme to all students across the campus. Within the UK there is strong evidence to indicate that there is a need for structured entrepreneurial training for students. A survey carried out by the White Rose Centre for Enterprise showed that 74 per cent of first year students were interested in taking up enterprise activities if these 11 were available at their University . More interestingly 39% of third year students had indicated that they had been involved in some form of enterprise activity during their time at the University.

At UWO this provided the opportunity to see the following programmes developed by their School of Management: 1. A short intensive course lasting approximately three and half months to provide a grounding necessary to a business focused on new technology. The aim of this course was to target two groups of students, one seeking to explore their entrepreneurial potential and the second who will be aiming to work in a technology based environment.

2. An Ivy Client programme targeted to all students from science and technology backgrounds. The programme involves teams of 3-5 students being assigned to develop a comprehensive case study within real company environment over 5-6 month timescale.

As part of the programme the students have to complete a project and do a presentation to external business panel at the end of the course.

In the UK the following are examples of support for student enterprise: 1. At Stirling University a SURE Student Enterprise Incubator has been set up to provide an opportunity for students at the University who have a good business idea coupled with entrepreneurial flair to take their first steps into self-employment and learn business management skills as they develop their idea, supported through advice and training from SURE and Small Business Gateway. The SURE Incubator provides serviced office space, computing equipment, Internet access, telephone, fax, and secretarial support.

The facility is located within Stirling University Innovation Park and this provides students ample networking opportunities with other young companies whilst being close to the University.

2. A new initiative, Student Innovation and Enterprise Fellowships, to encourage student entrepreneurship has been launched by Loughborough University. Its open to undergraduate and postgraduate students of any discipline and the fellowship offers ÂŁ500 and a comprehensive support package from the Enterprise Centre to help the students venture off the ground. Funding for the scheme has come through the Loughborough University Development Trust through funds from its thriving alumni. The Initiative has been a huge success in its first year and for the next one funding will be offered for 3 Fellowships.

3. South Bank University has launched Enterprise Prize competition which invites innovative ideas and these are then assessed by a panel. Winners then get additional support to take the idea forward. One such example was a students coming up with idea for developing side view mirrors for large lorry trailers which rotated with the movement of the trailer during reversing. This enabled the driver getting a much more clear view of any rear obstruction while reversing.

4. A Student Business Incubator has been set up at The Robert Gordon University’s Aberdeen Business School through support from commercial partner. It offers help to students and graduates start up and grow successful businesses and has been set up to meet the desire of more and more students to start their own business. The Incubator has helped launch 11 new businesses to date, mainly in technology sectors and has recently won an award as the best business support unit.

46

5.6 Clusters and other mechanisms for SME access to Universities The extensive programme of meetings that was set up for the visit did not leave sufficient time to explore this issue in any great depth. A few meetings were held for example with the London Economic Development Co-operation and NRC who promote activities to encourage clustering in particular to support SMEs. This however did not go into any significant detail to warrant the need for any reports to be presented here.

5.7 Use of Management Information Systems 5.7.1 Managing research grants and finance information At RHUL the office does not currently have any Management Information System for research grant. The data on grant submission is logged onto a simple Access database set up by the office. Consequently information sought on systems used by the Canadian Universities provided a useful guidance for a future review of identifying a suitable system.

Within the research grants and finance office at both Canadian Universities an Oracle database product developed by University of British Colombia was being used. Report Writer was used to interrogate the database and extract the necessary data and analyse it for management information. Within the finance department People Soft was used to produce financial management information on grants and Microsoft products to pull out data for further analysis. At UoT they have developed their own system which is used by both the Research and Finance offices.

5.7.2 Managing IPR and Spin Out information As with the research funding data, RHUL does not have a specific system for managing technology transfer activities. The present system is a simple Access database. At UoA and UWO the Inteum (formerly DEALS) management information system was being used to hold information on all the patents and to monitor the filing of patents and deadlines for renewal fees.

This system was also used to record information on other aspects of technology transfer exploitation. For example to keep track of milestone payments for licensing agreement and information on material transfer agreements, confidentiality agreements. To extract information for management reporting Report Writer was used to produce tabulated data. It also provided template letters which can be exported to Microsoft products and modified to fit individuals needs. A major drawback was that the system did not have any facilities to generate automatic e-mails to alert the office about impending milestone payment deadlines or IP renewal dates. On the operational level the system would require its own dedicated server.

This visit provided the opportunity to compliment information that was already in the process of being collected on the various management systems available for research and technology transfer administration. The information collected to date on the systems is summarised in table in Appendix 9. The

47

figures in the table are not current data but have been included for indicative purposes. It should be pointed out that this work is still on going and in order to take a closer examination of the wide breath of systems it was not realistic to complete our findings within the timescale of this project. However there is sufficient information here to make a case to the college for a pressing need to provide resources in order to carry out a more thorough review.

The systems identified so far are InfoEd, ResearchMaster, Inteum (formerly DEALS), KSS Tech&TracS, ResearchAdminsitration PKI and RACE2. Of these InfoED and ResearchMaster provide a product that can manage both by research and technology transfer activities and their data. Whereas Inteum (formerly DEALS) and KSS Tech&TracS are specifically designed for technology transfer activities. RACE2 is just a costing tool and ResearchAdminsitration PKI is a research and finance database. So far we have reviewed Info Ed, ResearchMaster, ResearchAdminsitration PKI and RACE2. In conjunction with this review a mailbase survey through RagNet a UK research administrators network has been carried out to see what other UK universities used.

Key point: On Management Information Systems to manage IPR/ contract research For managing IPR and licensing information both Canadian Universities used Inteum (formerly DEALS) which was found to provide adequate functionality for managing IPR and Spin Out activities. DEALS cost £10.8k (25k C$) and provides approximately 7 user licences. There is then the annual user software licence fee which is approximately £1k (2.5k C$). The developer’s of the product are currently upgrading the system to improve and increase its functionality.

More recently a system called KSS Tech&TracS was being launched by NASA. This product has been modified from the system used to develop NASA’s extensive IP portfolio. The estimated cost for the system is in the region of £25.6k (C$62k). For Spin Out both Universities were using a product developed by University of British Colombia.

The complete InfoEd system is approximately £220k (C$536k) where as ResearchMaster was much lower but at £150k (C$366k) likely to be still too expensive for an institution of RHUL’s size. Since both these products have separate modules for different functions some cost reduction could be achieved if only those modules essential to REOs work are purchased. This could reduce the cost approximately for InfoEd to £90k (C$219.6k) and for ReseachMaster to £89k (C$217k). The former is still probably out of the REO budget but the latter may be worth considering if the current budget can be stretched.

The separate systems identified could meet a small institutes needs. Buying a combination of PKI and either Inteum (formerly DEALS) or KSS Tech&TracS would cost approximately £34k and £48k.

48

5.8. Investigating opportunities for collaboration and developing programmes of exchange visit for academic staff and students At both UoA and UWO the visit was used as an opportunity to make initial contact with Deans from a number of Faculties to explore opportunities for collaboration and exchange programmes. Through these meetings specific areas of activities were identified and these are being pursued through discussion with relevant Deans at RHUL.

49

APPENDIX 1 Programme of meetings for visit to Univ of Alberta (UoA) Monday, June 24/02 1. Meeting with International office.

2. Meeting with Manager, ILO, Partnerships & Development 3. Lunch Dr. Rand Harrison and Mr. Renny Khan 4. Meeting with ILO Contracts Team Tuesday June 25/02 1. Meeting with ILO Biomedical Tech. Transfer Team: 2. Industry Meeting 3. Meeting with ILO-SEA (Science/Engineering/Agriculture) Wednesday June 26/02 1. Meeting with Edmonton Capital Region Innovation Centre 2. Industry Meeting 3. Meeting with BioAlberta 4. ICET Appliance seminar/ dinner Thursday June 27/02 1. Meeting with Colleen Mead, Director RGO 2. Meeting with Research Accounts Office 3. Meeting Director National Institute of Nanotechnology 4. Meeting ICET Alliance President Friday June 28/02 1. Meeting with IP Manager 2. Industry meeting Tuesday July 2/02 1. Meeting with with ILO SpinOff Manager 2. Meeting with Dean of Arts Wednesday July 3/02 1. Meeting with External Relations & Alliance, Alberta Research Council 2. Meeting with Dean of Research, Faculty of Science 3. Meeting with Management Info Manager, RGO Thursday July 4/02 1. Meeting with Regional director IRAP 2. Meeting with Director, Technology Management, Alberta Innovation & Science 3. Meeting with WestLink Innovation Network chairman 4. Director RTF Friday July 05/02 Depart for International Airport, Destination: University of Western Ontario

50

APPENDIX 2 Programme of meeting for visit to University of Western Ontario (UWO) Monday, July 8/02 1. Meeting with Director OIL and Head International Office 319 2. Meeting with International Office 3. Meeting with Director OIL Tuesday, July 9/02 1. Meeting with Office Research Services/ Office of Research Infrastructure programme 2. Meeting with VP Business Development, London Health Sciences Centre 3. Meeting with President London Biotechnology Commercialization Centre 4. Meeting with Faculty of Engineering Associate Dean, Research & Graduate Studies Wednesday, July 10/02 1. Meeting with Director OIL 2. Meeting with Industry Liaison Officer 3. Meeting with IVEY Business School 4. Meeting with Industry Liaison Officer Thursday, July 11/02 1. Meeting with Business Development Office, London Health Science 2. Meeting with IRP 3. Meeting with Spin Out Viron Friday, July 12/02 1. Meeting with Spin Out CVD Diamond 2. Meeting with BioTech Manager, London Economic Dev. Corp.

3. Meeting with Technology Transfer Office, Robarts Research Institute Monday, July 15/02 1. Meeting with PRIMAXIS Technology Ventures Inc, Toronto Tuesday, July 16/02 1. Meeting with President London Technology Group Inc. 2. Meeting with Associate Dean, Faculty of Medicine 3. Meeting with Office of Research Accounting 4. Meeting with Integrated Manufacturing Technologies Institute 5. Meeting with Spin Out Plantigen Wednesday, July 17/02 1. Meeting with President Materials and Manufacturing Ontario (MMO), Toronto 2. Meeting with Innovation Foundation, Univ Toronto Thursday, July 18/02 1. Meeting with Spin Out EK3 2. Meeting with Director of UWO Research Park 3. Meeting with Director OIL and Head International Office

51

APPENDIX 3

Table 3 Summarising structure of the offices supporting research, enterprise and technology transfer Royal Holloway Univ of Alberta Univ of Western Ontario Univ of Toronto Research, Enterprise and Technology Transfer handled by integrated office (Research and Enterprise Office)

Currently office handling grant proposals is separate (Office of Research Services – pre award) and (Research Accounts Office – post award) from the office handling Enterprise and Technology Transfer (Office of Industrial Liaison). Separated from Office of Research Services

Currently office handling grant proposals is separate (Research Grants Office – pre award) and (Finance Services – post award) from the office handling Enterprise and Technology Transfer (Industry Liaison Office).

Both offices amalgamated Aug 2002.

Not available

Enterprise Office

Industry liaison office

Office of Industrial liaison

Foundation of Innovation

Head of REO, 1 Operation Officer, 1 Business liaison office, 1 IPR Manager and 4 sector specific Knowledge Transfer managers plus 1 admin support for Enterprise Centre.

Section with 4 Technology Transfer officers plus a number of interns from Business School, 1 Contracts agreement office and 1 Partnerships network officer. Total 30 staff.

11 staff in total, Director, 3 industry liaison officers plus MBA interns, 1 admin assistant., 1 Legal manager, 1 legal assistant and 1 admin assistant.

Recently created into an arms length office which is supposed to be self financing. 3 technology transfer managers and 1 person handling contracts and IP.

Research Support Centre

Research Grants Office

Office Research Services

Manager of office, 1 Research support officer and 1F/T and 1 P/T Research Finance staff.

Handle about 230 grant applications per year and 400 active grants.

Staff of 4 plus senior manager. Key activities outreach, supporting application process, look at grant performance and target applications to large schemes. Handled about 2800 applications per year excluding contract research. Total 20 staff.

Key activities outreach, supporting application process, look at grant performance and target applications to large schemes. Handled about 1300 applications each year.

Finance Trust Accounts

Research Accounts Office

16 staff in total. Deals with grant contracts and management of budgets. 7300 active grants.

7 staff in total.covering 3 accounts. Plus 1 admin support for each area.who deals with grant contracts and management of budgets.

Not available

Management information system Using Access database to hold records on research funding, contract research and IPR. Finance management system to hold info on grant income.

Subscribe to COS funding database for funding opportunities.

ILO developed a Oracle based database to manage research funding info. Use report writer to interrogate information and simple Oracle query builder. Inteum (formerly DEALS) a propriety software used for IPR/ contracts and a separate database to monitor Spin Outs.

RGO used a system developed by University of British Colombia (UBC) for research funding. Grant application data entered by one person and another person enters funded grant information. Finance management system. Subscribe to COS funding database for funding opportunities.

Oracle database developed internally. Inteum (formerly DEALS) is a propriety software used for IPR/ contracts. Subscribe to COS funding database. RSO used People Soft and a modular system which incorporated modules for Finance, HR and Higher education.

52

Have developed a system tailored to their needs for finance and research.

APPENDIX 4

Table 4 Outlining organistation and local and national programmes to support university – industry collaborative activities (examples of some main schemes, not an exhaustive list) UoA

RHUL

UWO

Associations and Non government organisations involved with supporting university – industry collaborative activities Organisations to help develop university – industry collaborative activities • Association of University Industry Liaison Office (AURIL) • BioAlberta is an industry focused organisation within promotes university / industry collaboration.

Alberta which works with Provincial Government to address shortfall in public funding.

• Runs training development programmes to enhance technology transfer skills.

• Role to help find out what new companies needs are and to help seek opportunities for collaboration.

• Develops best practice documents.

• ICET alliance is a key Provincial organisation within • London Economic Development Co-operation (LEDC) had a Alberta. The alliance key function was to be a driver of key aim is to develop university industry collaboration economic activity in local region. Its role involved culture. developing networking opportunities to help promote • LEDC facilitates internship opportunities by working with Ivy collaboration between universities and local companies.

MBA school in UWO. Aim is to encourage 5% of the Has developed Business Planning competition to raise students to consider London as a place for employment awareness amongst HEIs about partnership opportunities opportunity. Also run a competition for MBA students where with local companies. a team of 3/5 students carried out case studies eg look at • ICA – InnoCentre Alberta current marketing activities and produce a report on recommendations.

• Westlink set up to promote collaboration within the12 universities based in the western provinces with support from Federal funding. The organisation helped to develop contract work, arrange networking events and promote technology transfer skills and awareness as well as entrepreneurial skills.

Government and Local Government programmes to promote university – industry collaborative activities • Faraday Partnerships, DTI and in many cases jointly funded with UK Research Councils. Sector focused activities.

• 3-5 years funding to facilitate flow technology and skilled people between university and industry.

• 16 funded to date.

•

Economic Development Edmonton (EDE) works with ILO through Edmonton Capital Region Innovation Centre.

•

•

53

Ontario the Provincial government funded MMO over the past 15 years to develop collaborative culture between industry and academia.

Support given to programmes to set up collaborative projects of relevance to industry, sponsor early stage research, provide environment for communication to explore new opportunities between industry and academia. Fellowship funding provided to enable new graduates to get experience of technological innovation and R&D in industry. Key target is SME.

UoA

RHUL

•

• • •

•

• •

• • • • • •

UWO

Government and Local Government programmes to promote university – industry collaborative activities (Continued) DTI funded LINK Initiative usually in partnership with a UK • Western Economic Diversification provides support. This • Provincial support provided to set up Ontario Centre of research Council to promote research collaborations is a government of Canada agency.

Excellence (OCE) after concerns were raised that between industrial organisations and the research base. universities lacked knowledge of technology transfer or Funding for of pre-competitive collaborative research how to work with industry. Funding of several millions between industry and the research base, from the Canadian dollars per year for a period of 5 –7 years biological sciences to engineering. provided.

DTI fund 50% of industry cost and Research Councils • The centres provided funding for small scale projects, 1 – 100% of university cost.

2 years, within university which had industrial application potential. Overarching agreement held by centre on DTI funded Knowledge Transfer Programme (KTP). ownership of IP and would be responsible for protecting Funding to support high calibre graduates (known as IP. Universities given 2/3rd of the income from licence and Associates who are employees of the supplying institution) royalty payments.. Also supported training programmes on 2- 3yr projects to tackle a problem in company R&D for students and business planning competition open to environment work. Work with a knowledge-based partner 4th year engineering students.

(University, higher education institution, or research organisation) with joint supervision with company.

Funding for project cost up to £35,780 per year. Large companies (> 250 employees) contribute approx £21k/yr (60%) and SME (<250 employees) contributes approx £14.3k/yr (40%).

• The NRC has also funded a number of centres like the DTI funded SMART Initiative • The National Research Council (NRC) has setup IRAP Integrated Manufacturing Technology Institute (IMTI) whose aim is to foster innovation in SMEs. Run similar Grants to help individuals and SMEs to be innovative programmes to DTI eg the SMART scheme to support which occupies a building within UWO Science Park. through R&D or buy external expertise eg university to proof of concept and research and development activities. improve exploitation of technology. Six elements to • The aim of these centres are to work with industry, SMART awards, with the following eligibility criteria: • Proof of concept projects provided funding of between £8k university to develop essential expertise for the benefit of Canadian Industry. Key focus is to run project in close - £10k (C$20k- C$25k) for such projects.

Technology reviews, 50% funding upto £2.5k. collaboration with industry which bring on board other • R&D type activity given funding to take ideas to Technology studies, 75% funding upto £5k. partners which could be universities. In such projects commercialisation with funding of up to a third of the Development projects, 30% funding between upto £150k. universities get 100% funding. project cost up to a maximum of £200k (C$500k).

Exceptional projects, 30% funding upto £450k.

• The centre also runs programmes to develop Feasibility studies, 75% funding upti £45k. collaboration in which university provides it own match Micro projects, 50% funding £5k. funding which is facilitated through inkind support.

National Research Council Initiatives to promote university – industry collaborative activities

• UK Research Councils typically fund a range of schemes to provide graduate and postgraduate training with an industrial collaborator on industrial or commercial projects of between one and three years duration.

• CASE awards, help graduates under take full time PhD training with industry collaboration.

54

•

•

Alberta Research Council was set up to link science and technology activity in universities and industry in order to help develop the local economy.

Grant programmes to foster collaboration between industry (sometimes inds sponsors), university, government (sometimes govt sponsors).

UoA

RHUL • Engineering Doctorates, 4 year PhD with a greater focus of work in industrial partners R&D labs.

• Collaborative training Packages (CTA), funding for a package of programmes to promote university industry collaboration with a training element for graduates in industry environment.

• Postgraduate Training Partnerships (PTP), funding for graduate to carry out research work in a research technology organisation.

• Research Councils Small Business Research Initiative.

• Open only to SMEs to secure funding for innovative projects through competitive peer review.

• Funding can be used to transfer expertise from university.

55

UWO

APPENDIX 5 Table 5 Summarising the IP situation at RHUL and at UOA, UWO and UoT

RHUL

UoA

UWO

UoT

IP policy

Univ owns IP. Policy currently being revised.

IP owned by academic but obligation to report to ILO. Can take forward opportunity on their own or through the univ. 90% assign to univ.

Recently revised with requirement that it should be reported to university. Joint ownership and academic has option to assign to university.

Incentivistation

Split dependent on the number of inventors, their effort in taking idea forward, the amount of external investment required, financial benefits generated by inventor from the company and cost associated with obtaining advice and in seeking funding.

Researchers are normally minority shareholders in a spinout company. Under review.

If taken forward on their own than spilt is 1/3rd univ, 2/3rd academic.

If assigned to univ then 1/3rd univ, 1/3rd academic and 1/3rd univ, some of which goes to ILO for commercialisation cost. Most of univ share goes to Faculties. Same policy for students.

Disclosure of invention

Submit a invention disclosure form.

Service level agreements under review.

Submit Report of Invention (RoI) form.

Turn around RoI within 30 days to carry out assessment of opportunity. If taken forward then a further 3 months to do market research, literature review and patentability..

IP budget

£50k (C$122k)

£0.5M (C$1.22M)

Staff

1 IP manager plus support of 4 sector specific knowledge transfer managers.

Total 5 staff.

6 technology transfer plus 4additional MBA internships as required and 1 dedicated admin support staff. Legal section with 2 staff, 1 IP manager, I intern and 1 admin person.

Total 16 staff + Office admin + Finance staff. £3M (C$7.32M), 1/3rd from univ core funding, 1/3rd from licensing agreements revenue and 1/3rd from external stakeholders eg Provincial govt, Federal govt.

Recently revised. IP owned by Faculty members (academic) but obligation to report to OIL. Can take forward opportunity on their own or through the univ.

If taken forward on their own then 1/3rd of income goes to univ and 2/3rd retained by academic. If copyright and no involvement of OIL then univ get 10% but if univ resources used then 20%.

If assigned to univ then 60% univ, and 40% academic. No income to OIL. Recently changed to 50:50split. Students assign to univ and have same revenue sharing policy.

Submit Report of Invention (RoI) form.

Inventor has 30 days to decided if they want to assign to univ. If taken forward then OIL takes 3 months to do market research, literature review to asses patentability and decide if potential for investing further time and money. £90k – £102k (C$220k – C$250k) 4 technology transfer managers and during summer taken on internships from MBA course. 2 staff dealing with admin and 1 IP manager and 1 IP assistant. Plus have access to 3 IRAP staff.

Total 11 staff. £0.53M (C$1.3M), Over 50% from univ core budget, about 25% from univ discretionary budget, 10% from NSERC. On top of this also get some support from IRAP. About 22 patent applications, About 15 taken to action stage of which 7-8 taken to full application stage and of these 5-6 taken to start up stage.

Funding

Statistics

2/4 patent applications / year. Spin Out activity at an early stage and so not possible to give a track record.

70/80 patents applications / year, about 50% issued. 25 licences/ year and 8 Spin Off companies former per year formed.

56

If assigned to univ, academic gets 25% share and univ concerns IP cost. If not assigned to univ, academic takes forward idea and assigns 25% to university. Has resulted in 400% increase in disclosure of inventions. Under old system where univ owned IP RoI were decreasing.

120/130 RoI. No additional info available.

N/A 2 section one 2 staff 1 negotiate contracts and 1 manage IP and 2nd section 3 technology transfer managers. Now formed Innovation Foundation arms length section.

N/A

N/A

APPENDIX 6

Table 6 Summarising the various early stage funds at RHUL and at UoA, UWO and UoT RHUL UoA UWO • DTI/DfES funded HEROBAC & HEIF funds to develop resources and activities within UK HEIs to promote university / industry knowledge transfer and collaboration.

• Permanent 3rd leg funding for period upto 3yrs and funding from £0.5M - £3M/ yr

•

local provincial government and economic development agencies provide support to match the local regions needs eg Western Economic Diversification Programme.

• Canadian Medical Discover Fund. Not done well.

UoT Because Toronto has a vibrant financial centre early stage seed funds more prominent.

One such VC created 3 early stage funds: Pramixis. Mile stone Medica Life Sciences and ForegenAgBio. • Pramixis is a £21M (C$52M) fund with investments from 6 other partners. Able to fund early stage proof of concept projects with durations of 18 months – 24months and funding in the region of £25k – £33k (C$60k – C$80k).

• OST funded, University Challenge Fund to help UK HEIS setup early stage seed funds managed by an external board • CASCADE is £4M fund secured in partnership with RHUL, Brunel, Sussex, Reading University.

• Funds focused towards IT, Media Arts and Food processing technologies.

• The fund will proving support for Stimulus projects with funding up to £30k (C$73k) and Growth projects with funding upto £250k (C$610k).

• Fund is managed by Generics Asset Management Ltd • The PARK seed fund is a £1M (C$2.44M) fund jointly set up between Brunel Univ, RHUL, HSBC and JRA. • Fill a funding gap for early stage high growth companies that will be based in the West London Region. Funding provided between £25k - £50k (C$61k – C$122k) and will focus on the following specific sectors.

• Health and Quality of Life.

• Environment and Sustainability.

• ICT and New Media.

• Industrial Product Design and Materials.

•

Calgary Seed cooperation which is a fund set up by the Economic Development Agency (EDA) and partnership with private funds.

• Canadian Science and Technology Growth fund, but focuses not on early stage start ups but companies about to be listed on stock exchange.

•

ICET alliance looking to launch £20M (C$50M) Seed Stage fund with £0.82k (C$2M) secured from government and some from Provincial government.

• Canadian Science and Technology Seed Fund, Labour sponsored fund for early stage start ups.

57

RHUL

UoA

• NESTA, set up from lottery funding to fund innovative and inventive ideas in science, technology and arts.

• Has a Innovation and Invention scheme which provides funding of upto £60k (C$146k) for early stage concepts and ideas.

• Fund is open to anyone including individuals and is generally between £50k - £80k (C$122k –C$195k).

• SEEDA South East Finance Ltd £10M (C$4.10M)Early Growth Fund.

• Support for not just early stage development projects but also high growth potential companies.

• Funding of £25k up to £100k C$61k – C$244k).

• UK Research Councils Business Planning Competition.

• Finalist chosen to get targeted training workshops to help develop business plan for early stage projects.

• Finalist win £10k (C$24.4k) funding to develop idea.

•

UWO

Alberta Research Council (ARC) supports their own institutions, which are similar to the ones supported in UK by the BBSRC and NERC, with Spin Out opportunities by setting aside £3.28M (C$8M) fund.

• University of Western Ontario Internet fund set up in collaboration with Toronto investment funds. Has £1.02M (C$2.5M) fund and provides support for projects related to e-commerce or software issues.

• Labour Venture Fund, set up by Labour business man.

58

UoT

APPENDIX 7 Table 7 Summarising stages of development of UoA Spin Out Date May 00 July 00

Nos of months 0 3

Comments • •

Aug 00

4

•

Expenses

Idea brought to ILO Evaluation showed positive outcome. IP and prior art search completed using ILO and library resources.

Developed provisional plan and protect IP.

External provider used for market search. Developed business concept and financial projection.

• Market report positive and so funding for next step was not a problem. Formed company and started to develop BP1.

• BP ready but graduate moved onto another project for which £1.23M (C$3M) was already secured. UoA sought external person to takeover venture.

• New Chief Technical Officer (CTO) appointed with background in electronics industry. Offered equity stake in venture to bring on board.

• An MoU was signed between Inventor, University and new CTO to licence technology to company. The equity split was 68% Inventor, 26% University and 26% new CTO. • Each partner contributed £1352 (C$3300) to demonstrate belief in technology and commitment to venture.

• Next step search for new business person in consultation with inventor and new CTO. • New business person found but wanted to come onboard if remuneration included salary with some equity. UoA provided C$40k. The business person brief was to: • Develop story, Develop BP1.1, Find funding 3 months later funding still not secured: • Getting patent filed was still a problem so sought a firm from Toronto.

• BP1.2 developed which lead to 1 local VC and 1 national Business Development Bank Canada (BDC) showing interest provided a more stringent evaluation of technology carried out and paid by UoA. • At this stage Innovation Centre Alberta (ICA) funded and idea taken to them. ICA charge was on basis of successful outcome.

• ICA who went back to BDC and local VC. Following from this funding agreed provided all concerns were addressed.

• Management board set up and paid bank finance person to do VC coaching. st • Outcome following due diligence 1 round VC funding of £0.2M - £0.41M (C$0.5M – C$1M) but in exchange for C$300k income and 8-10% equity.

• Letter of intent signed.

• Complete through due diligence. Signed service agreement with ICA. At this stage the venture still needed to go through ICA committee who will query the venture and if questions answered then approve support.

•

Oct 00

6

Nov 00

7

Jan 01

9

May 01

12

Sept 01

16

Oct 01

17

June 02 July 02

25 26

59

£800 –£1220 (C$2000 – C$3000) £800 (C$2000) £800 (C$2000)

£16400 (C$40000)

£8200 (C$20000) £41000 (C$100000)

£20500 (C$50000)

APPENDIX 8

Table 8 Summarising case study information on Spin Outs at UWO Case study Key factors Viron Developed technology from research funding. Spin Out formed through co-operation with the Roberts Research Institute and ILO. At early stage took decision to look for management externally and inventor took role of Chief Scientific officer. Brought in CEO from Financial/ Business background.

• key problem was lack of awareness of Finance and Business.

• University should try to raise awareness of IP but with short workshops not week long activity.

• University IP and exploitation process needs to be more flexible.

Opportunity was taken through the university because the RRI funded the research and also because wanted to carry on with academic activities. Currently spending 20 - 25% of time on Spin Out. University would need to reduce teaching load if required to spend more time on venture.

Idea may have developed at an earlier stage if was made aware of IP issues. The university process provided good mentoring and networking support but was too beaucratic.

CVD Developed technology to apply coating on cutting tools which improved lifespan of tools by 20%.

Initial aim was to license technology. The key issues was getting IP which covered a wide application area. This is vital if aim is to attract VC funding. Initially faced problems in funding a partner to provide testing facility in order to assess benefits of technology. Working with MMO solved this problem as it enabled access to testing facility and expertise as well as funding to do work. The next stage was to get a CEO from industry but problem was trying to explain the technology to the new CEO. But key issue was to get someone on board to get the company started rather than be concerned about ability to understand technology. CEO offered equity and a contract as an incentive. Time significant commitment to Spin Out idea is a negative factor.

• aim for IP that protects wider range of applications.

• need to find an external CEO. • to get the right person need to provide equity in venture as incentive.

• important to have structure to allow the company to use the technology and a mechanism to take the technology forward.

• structure to enable the inventor to be able to when necessary commit extra effort to developing the opportunity eg reduction in teaching load.

A flexible approach is necessary to the issue of IP. If too rigid this may obstruct the development of the company. College technology process and structure needs appropriate resources and personnel with the right skills to support the formation of the Spin Out. EK3 MSc student Spun Out idea which arose from the research project. Keen to work for himself but had lack of awareness about IP and college policy. Keen to take idea forward but was not aware of OIL or any entrepreneurial schemes targeted at graduates. Developed contact with Technology Park on university campus and was offered assistance to get access to facilities and get a mentor to take forward project. This lead to contact with OIL who provided office space for 4/5 months and permission to test product on campus environment. An added benefit of this was opportunity to supply product to external client. Next stage OIL helped with getting space in Research Park at a preferentionally lower rent on space. With the help of OIL and LTG secured

• better awareness of Spin Out risks.

• access to funding.

• support services need to be in place.

• inventor must be committed to idea and have in minded a clear vision.

60

Case study

Key factors

EK3 (continued) 1st stage funding of £80k (C$195k). Key issues was getting good internal advice and build trust.

Further clients secured and this lead to 2nd stage funding of £0.49M (C$.2M) from HDL merchant bank. The equity split agreed was 70% inventor, 10% university and 20% funder. No management team as yet but was offered mentor from IBM. Plantigen Spin out started to commercialise idea but problems was funding to protect IP. The IP was used to attract investors and the resources from this was used to cover cost to protect the technology.

Inventor provided time as their in kind support to the project. Was able to get limited support from the Institute to Spin Out so had to get other resources from external sources. Essential that organisation has clearly defined IP policy which is understood by inventor and has flexibility. With Plantigen negotiations still underway after 8 years. Also need to have staff with technology transfer skills to support the Spin Out. These staff also must have the time required to push forward the company. Lack of early stage funds was a problem. Being involved with the Spin Out did not add to material for teaching activities. Taking forward the opportunity to commercialisation provided valuable insight into entrepreneurship.

61

• funding needed to protect IP. • need to develop an entrepreneurial culture of risk.

• critical to have staff in technology transfer office with knowledge about commercialisation.

APPENDIX 9 Table 9 Summarising cost for finance, research and technology transfer management information systems Product application SPIN/ GENIUS Info Ed

Research Master

Research Administration PKI

DEALS) US PC based

US Webbased

UK Web based

UK Web based

Y Y

N N

N N

Y N

Y Y

Y

Y

N

N

Limited capability main use costing tool

Most of the items

Y

Y

N

N

Limited capability main use costing tool

Most of the items

Y

Y

N

N

N

Y

Y Y Y

Y Y Y

N N Y

N N Y

N N N

Y Y N

Country of origin Type of system

US Web based

Australian

Proposal costing Pre Post

Y Y

Research Funding management info reports reports to provide grant data say by funding organisation, success rates, by department, by resources requested on the grants, collaborators on grants etc Research Contracts and Research Consultancy ability to produce same management info reports as research funding with additional capability of flagging up invoice payment dates Ability to track progress of the various types of activities Research publications database Capability of recording financial data Capability of managing IPR and tech transfer portfolio Additional information Cost of system License License subsequent years Additional users Subtotal Other Modules cost Proposal development Proposal tracking Proposal developing & tracking combined Project management Tech transfer

Product Name and Supplier Inteum KSS Tech TracS Race 2 STCS (Formerly

Web based

£0 Core users upto 10 £0 £0 10 - 49 users £0

£9500 £0 £33000 £42500

£6,148 £1,000 £820 £7,968

£4,099 £0 £0 £4,099

£38,000 Projects £25,000 Contracts £47,250 Publications

£11000 £11000 £11000

£0 £0 £0

£0 £0 £0

£0 £0 £0

£0 £0 £0

£50,000 Finance Feeder £45,000 HR Feeder

£11000 £11000

£0 £0

£0 £20,496

£0 £0

£0 £0

62

£12,000 Single £2,820 £0 Upto 5 £14,820

£5,995 £0 £9,995 £15,990

Product application SPIN/ GENIUS Info Ed Subtotal Systems implementation cost Proposal development

Product Name and Supplier Inteum KSS Tech TracS Race 2 STCS (Formerly

Research Master

Research Administration PKI

DEALS) £55000

£0

£20,496

£12860

£0

£0

£0 Single user

£1,050

Proposal tracking Project management

£2,900 1st year maintenance cost for purchased license and modules £2,900 £7,250

£0 £0

£0 £0

£0 £0

£1,750 £2,250

Technology transfer

£1,450

£0 Includes cots for up to 7 users £12860

£2700

£0

£0 Upto 5 users £0 Installation and server configuration £750 per day.

Based on 3 days £0

£1100

£0

£0

£5,050

Subtotal Training cost Proposal Development

£205,250

£14,500

£0

£0

£0

£45000

£0

£0

£0 Training £750 per day. Based on 2 days

£1,500

Proposal Tracking

£1,450 With data migration and intensive training implementation costs £1,450

£0

£0

£0

£1,500

Project Management Tech Transfer Subtotal Other cost

£3,625 £1,450 £7,975 £0

£0 £0 £45000 £0

£0 £1,700 £1,700 £0

£0 £0 £0 £0

£227,725 This is a total, with an £155,360 ongoing annual component .

Maintenance includes all updates and upgrades as well as support services to a limit (beyond which they are user pays).

£10,668

£24,595

£0 Additional consultancy £750 per day. Based on 2 days £0 £0 £0 £0 Third Party software - Microsoft SQL Server or Sybase SQL Anywhere (license to be purchased by yourself) - as an alternative we are currently exploring the use of MySQL which is Open Source (usually free) £14,820

Grand Total

NB: Some of the costs are not current figures but give an indicative idea on cost of systems.

63

£0 £0 £3,000 £0

£24,040

7. REFERENCES 1. Statistics Canada, Science Statistics, Vol. 22, No. 5, October 1998 2. 1998 White Paper ‘Building the Knowledge Driven Economy’ DTI, Command paper 4176 3. 2001 by the White Paper ‘Excellence and Opportunity – A Science and Innovation Policy for the 21st Century’ 4. Public Investments in University Research: Reaping the Benefits, May 1999, Advisory Council on Science and Technology 5. Paths to Commercialisation of University Research – Collaborative Research, April 1999, Conference Board of Canada 6. Delivering the Regional Economic Strategy, July 2000, South East of England Development Agency (SEEDA) Strategy Report for the South East of England 7. Optimising Consultancy – A good practice guide to the management of consultancy in universities and college, June 2001, Universities UK 8. Partnership for Research and Innovation between industry and universities- , April 2001, CBI publications 9. The Management of Intellectual Property in Higher Education, Sept2001, AURIL 10. NCIHE - Higher Education in the Learning Society: Report of the national committee, The National Committee of Inquiry into Higher Education, 1997 11. Enterprise learning: an analysis of questionnaires distributed to students of the three White Rose universities during the 1999-2000 session, Jan 2001, Report carried out by HEPU, University of Leeds for White Rose Enterprise Centre.

12. Annual UNICO-NUBS Survey on university commercialisation activities, 2001, UNICO – Nottingham University Business School.

13. Feasibility study for the development of an Innovation Centre, Angle Technology Ltd, April 2001.

14. Entrepreneurship in Europe, European Commission Green Paper, COM200327, 21 Jan 03.

NB – conversion rate of £1 – C$2.44 used in the report based on exchange rate in Aug 02.

64