(Welcome, innovationDAILY readers!)
Last updated on June 2, 2011.
On May 18 and 19, the Ontario Centres of Excellence (OCE) hosted Discovery 2011, a signature innovation conference for Ontario. It enables “key players from industry, academia, government, the investment community as well as entrepreneurs and students to pursue collaboration opportunities.”
I attended the conference on May 19. In addition to meeting exhibitors and commercialization experts, I attended an interesting discussion panel on exemplary and emerging commercialization models. OCE described the session and its participants as follows:
At the inaugural International Commercialization Forum, held in Ottawa in March, a group of thought leaders and practitioners from 18 countries discussed exemplary practices in commercializing research outcomes and effective innovation models. Participants shared the most compelling novel ideas to improve the state of global innovation. At the Forum’s conclusion, 48 organizations with a common vision focused on openly sharing knowledge and expertise, formally established the International Commercialization Alliance to work together on projects of global interest. This session will provide a synopsis of thought-provoking insights gained from the discussions and an overview of the Alliance established and where it goes from here.
Dr. Mario Thomas, Senior Vice President, Strategy, Programs and Partnerships, Ontario Centres of Excellence, and Managing Director, OCE’s Centre for Commercialization of Research
Richard Bendis, President and Chief Executive Officer, Innovation America (USA)
Ari Huczkowski, Chief Executive Officer, Otaniemi Marketing Ltd. (Finland)
George Ross, Deputy Minister, Ontario Ministry of Research and Innovation, Ontario Ministry of Consumer Services
Nava Swersky Sofer, Co-Chair, NanoIsrael (Israel)
I outline below some of the main points brought up during the discussion:
Examples of successes and failures in commercialization
Nava Swersky Sofer noted that, while Israel is a small country that has a small number of academic units, the state has been doing very well in the entrepreneurial field; by working closely with the industry, universities in Israel have produced millions of dollars in annual production revenue. One prolific commercialization success example she notes is Yissum Research Development at The Hebrew University of Jerusalem (where she served as the president and CEO).
Swersky Sofer also explained that companies with a strong technological focus will not succeed in commercialization if they are not also market oriented. She refers to an Israeli company that had a promising idea, and yet the organization “missed the boat” because it could not address market research as it went along. She did not name the company, but said that it was recently in the media spotlight.
Ari Huczkowski cited Nokia’s opening of intellectual-property rights through Innovation Mill as a case in point of successful commercialization; this Open Innovation program led to the creation of more than twenty new start-up companies, such as Sports Tracker. Another example Huczkowski referred to was Otaniemi’s virtual-incubation model, which focuses on the actual development of start-up companies—as opposed to simply renting space. The virtual-incubation model created between forty and seventy new start-up companies per year.
Huczkowski believes that universities that patent “for the sake of it” will not prosper in the commercialization field; instead, the university needs to plan to produce patent “families,” which would have improved chances of success and commercial development.
Richard Bendis referred to a commonly employed analogy in the United States: whether to invest in the “jockey” (i.e., the entrepreneur) or the “horse” (i.e., the technology or science used to create products). He believes that the “jockey” is an important factor to take into account when investing in a promising technology. As a case in point, he recalled an inventor once approaching him with a robotic arm that was used to salvage items from the sunk Titanic. The inventor needed access to capital; however, he had no desire for marketing and no potential joint partners. Bendis defines this type of business as a “lifestyle business,” and refused to provide capital for this particular inventor. Bendis believes that entrepreneurs need to understand market potential on a global basis; they need business teams, and should not focus on on the technology (the “horse”).
George Ross emphasized the Government of Canada’s role in maintaining a business climate and policy construction that would encourage entrepreneurship. Based on historical experience in Ontario, he believes that five attributes are necessary conditions for successful commercialization:
- market focus: the need to be globally oriented and connected to financial markets
- organizations and activities that reflect an authentic understanding of strengths, the quality of life, talent, and so forth
- critical intellectual-property and talent mass around commercialization activities
- supporting leadership in organizations and business-development opportunities
- intensive programs to support entrepreneurship and the growth cycle of companies
How can commercialization talent like the panelists’ be acquired?
Bendis asserted that neither formal training nor an academic education is not necessary. In his view, the successful candidate must possess multidisciplinary characteristics and life experience. Such experts also need to be empathetic toward entrepreneurs by having worked with them. Moreover, because failing is acceptable in an entrepreneurial culture, some exposure to failing in life is important.
Swersky Sofer stated that encouraging more entrepreneurial talent in Canada will require life being less “comfortable” than it currently is in the country. She explained that entrepreneurship—an uncomfortable path—implies the possibility of failure and the willingness to take risks. Swersky Sofer refered to Israel’s nanotechnology program as a case in point: governmental funding is based on outcome measures that include commercialization aspects like patents, commercialization agreements, and start-up companies; if researchers failed to meet such outcomes, funding was cut off. The “culture of discomfort” is inherently obvious in this example.
Intellectual property versus open innovation
Bendis believes that intellectual property and open innovation (specifically, open-source software) are not mutually exclusive. Because the world is gravitating toward open innovation and open-source innovations, it is more likely that others will be able to add value to one’s ideas. In short, he is a proponent of open-source innovations as well, and he believes it can work if everyone is able to comply with the process and system.
Ross added that the Government of Canada has been supportive of open-innovation initiatives. For example, funding changes are currently taking place in the pharmaceutical pharmacy: some of the funding will be allocated to open innovation for drug discovery.
Evidence-based approaches to measuring success
- Has something been created that someone is willing to buy?
- Has research revenue been generated?
- Can production be scaled for mass production to attain profit?
One example of an innovation-intermediary metric he cited was the number of commercialization projects that have actually achieved success (“success” as defined by measurable outcomes).
Speaking on behalf of the Government of Canada, Ross said that one important metric is the growth in the gross domestic product (GDP). A GDP subcomponent that is particularly important for the near future is job creation; the government wants “good news” from that front.
Huczkowski offered two recommendations: First, it is important to be careful about what is being measured, as that would determine the outcome. Because each country is different, measures need to be built according to the country’s individual goals and needed outcomes. Second, he emphasized the importance of taking measurements using the scientific model, and employing a third party to perform such measurements.
Swersky Sofer explained that there is no “magic bullet” of defined criteria and measures. Because Canada differs from Finland, Israel, or the United States, the former needs to select what may be applicable for its region. She also recommended Start-Up Nation: The Story of Israel’s Economic Miracle: the book explains what makes Israel’s success stories tick. (She receives no royalties for the book, and has no vested interest in promoting it.)
Ross reminded the audience that innovation parks alone do not work; one needs to take into account other factors, such as the quality of the place, the rule of law, access to academe, and the business climate.
Connecting entrepreneurship with the ultimate market
Taking the perspective of an Israeli, Swersky Sofer said that Israel has no “local market.” With that being said, the Government of Israel provides some tools for entrepreneurs. For instance, it sponsors booths for small companies, as well as trade fairs on a regional basis.
Ontario Centres of Excellence. (2011). Ari Huczkowski. Retrieved on May 28, 2011 from http://www.ocediscovery.com/bio_2011.aspx?id=37
Ontario Centres of Excellence. (2011). Discovery 2011: Agenda & speakers. Retrieved on May 28, 2011 from http://www.ocediscovery.com/agenda2011.aspx
Ontario Centres of Excellence. (2011). Dr. Mario Thomas. Retrieved on May 28, 2011 from http://www.ocediscovery.com/bio_2011.aspx?id=59
Ontario Centres of Excellence. (2011). George Ross. Retrieved on May 28, 2011 from http://www.ocediscovery.com/bio_2011.aspx?id=34
Ontario Centres of Excellence. (2011). Nava Swersky Sofer. Retrieved on May 28, 2011 from http://www.ocediscovery.com/bio_2011.aspx?id=35
Ontario Centres of Excellence. (2011). Richard Bendis. Retrieved on May 28, 2011 from http://www.ocediscovery.com/bio_2011.aspx?id=33
Senor, D., & Singer, S. (2009). Start-up nation: The story of Israel’s economic miracle. New York, NY: Hachette Book Group.