knowledge economy forum vi developing networks and a market for knowledge brokerage gilbert nicolaon...

KNOWLEDGE ECONOMY FORUM VIKNOWLEDGE ECONOMY FORUM VI

Developing Networks andDeveloping Networks anda Market for Knowledge Brokeragea Market for Knowledge Brokerage

Gilbert NicolaonGilbert Nicolaon

CambridgeCambridge

April 19, 2007April 19, 2007

Knowledge economy and Knowledge economy and traditional sector industrytraditional sector industry

R&D and the EconomyR&D and the Economy

The “end” users of R&D The “end” users of R&D (Knowledge)(Knowledge)

MultinationalsMultinationals

High tech SMEsHigh tech SMEs

Traditional sectors SMEsTraditional sectors SMEs

Public R&D and Industry Public R&D and Industry

Public R&D relation with industry :Public R&D relation with industry :

Multinationals :Multinationals : Through Industrial R&D labsThrough Industrial R&D labs

High tech SMEsHigh tech SMEs (often spin-offs) : (often spin-offs) :

Usually tight relationsUsually tight relations Traditional sectors SMEs :Traditional sectors SMEs :

Very limited cooperationVery limited cooperation(research scientists and traditional SMEs managers do (research scientists and traditional SMEs managers do

not know each other)not know each other)

Industry in Europe Industry in Europe

Industry in Europe :Industry in Europe :

Multinational : a few hundredMultinational : a few hundred

High Tech SMEs : a few thousandHigh Tech SMEs : a few thousand

Traditional SMEs : over 200 000Traditional SMEs : over 200 000(+ Recently, Services sector SMEs)(+ Recently, Services sector SMEs)

« Traditional » sector SMEs represent« Traditional » sector SMEs represent

a large potential market for technologya large potential market for technology

Traditional Traditional SSectorectorss and Technology and Technology

The demand for technologyThe demand for technology from « Traditional » from « Traditional » sector industrysector industry is limited is limited

BUT :BUT :

Technology is important for SMEs competitivenessTechnology is important for SMEs competitiveness

SMEs competitiveness is essential for the economySMEs competitiveness is essential for the economy

Economic growth is essential for every countryEconomic growth is essential for every country

A Paradox !A Paradox !

Traditional sector industry (mainly SMEs) Traditional sector industry (mainly SMEs) offers a very large market…offers a very large market…

BUT…BUT…

……This market is usually not This market is usually not targeted by Scientists !targeted by Scientists !

Because traditional sectors industrialists :Because traditional sectors industrialists :Have limited interest for R&D.. Have limited interest for R&D.. Use outdated equipment…Use outdated equipment………..

« …Technology « …Technology absorption is as absorption is as important as important as innovation… »innovation… »

Shigeo KatsuShigeo KatsuV.P. World BankV.P. World Bank

April 17, 2007April 17, 2007

Absorption and InnovationAbsorption and Innovation

Traditional sector industry offers a Mkt. for :Traditional sector industry offers a Mkt. for :

Technology AbsorptionTechnology Absorption Which requires technology servicesWhich requires technology services

++ InnovationInnovation

Technology PushTechnology Push Market PullMarket Pull

Push or Pull ?Push or Pull ?

Technology PushTechnology Push From the Lab to the marketFrom the Lab to the market

Idea of a scientistIdea of a scientist

Limiting step : selling the ideaLimiting step : selling the idea to :to : AnAn industry industry AAn entrepreneurn entrepreneur

TOP DOWNTOP DOWN

Market PullMarket Pull From market needs to the lab From market needs to the lab AND Back to marketAND Back to market Need identified by industryNeed identified by industry Limiting step :Limiting step :

Identifying the customerIdentifying the customer Identifying the needIdentifying the need

BOTTOM UPBOTTOM UP

Push or Pull ?Push or Pull ?

Technology Technology PushPush

Market Market

PullPull

TechnologyTechnology High to Med.High to Med. Med. To LowMed. To Low

MarketMarket ?? Well knownWell known

RiskRisk High to Med.High to Med. Med. To LowMed. To Low

Rate of ReturnRate of Return High to Med.High to Med. Med. To LowMed. To Low

Success rateSuccess rate LowLow Med. To High Med. To High

A double « challenge »A double « challenge »

Traditional sector industries are not very Traditional sector industries are not very attractive for research scientistsattractive for research scientists

Technology is not the priority for Technology is not the priority for traditional sector industries managers’traditional sector industries managers’

BUT…BUT…

The « Challenge »The « Challenge »

Technology is essential for competitivenessTechnology is essential for competitiveness Competitiveness is essential for economic Competitiveness is essential for economic

developmentdevelopment

CONCLUSIONCONCLUSION Technology demand has to be « stimulated »Technology demand has to be « stimulated »

““Stimulated” bottom upStimulated” bottom up

A 3 Partners cooperation :A 3 Partners cooperation :

Governments or/and International Org.Governments or/and International Org. Stimulate the process to boost the economyStimulate the process to boost the economy Provide training Provide training Provide support and « assistance »Provide support and « assistance »

The Public Research laboratoriesThe Public Research laboratories Provide the appropriate technology servicesProvide the appropriate technology services

The Industrial SMEsThe Industrial SMEs (+, recently, service SMEs)(+, recently, service SMEs) Identify the market needsIdentify the market needs

Technological InnovationTechnological Innovation

Requires a wide range of expertiseRequires a wide range of expertise Usually not available « internally »Usually not available « internally » Networks are widely used to :Networks are widely used to :

Identify appropriate technology providersIdentify appropriate technology providers Identify appropriate partners :Identify appropriate partners :

• Financial engineeringFinancial engineering

• Market analysisMarket analysis

• I.P.R.I.P.R.

The components of InnovationThe components of Innovation

Large Large GroupGroup

High T. High T. SMESME

Trad. Trad. SMESME

Public Public lablab

TechnicalTechnical YY YY ?? YY

EconomicalEconomical YY YY YY NN

FinancialFinancial YY ?? ?? NN

LegalLegal YY NN NN NN

I.P.R.I.P.R. YY YY NN ??

Technology NetworksTechnology Networks

Many active networksMany active networksNational (and Regional) Innovation agenciesNational (and Regional) Innovation agencies

Venture CapitalistsVenture Capitalists

Federation of IndustriesFederation of Industries

E.U. Framework ProgramE.U. Framework Program

International networksInternational networks

National NetworksNational Networks

Ministries of Industrial DevelopmentMinistries of Industrial Development Many countries have a national agencyMany countries have a national agency

U.S.A. : S.B.A.U.S.A. : S.B.A. France : Oséo groupFrance : Oséo group Netherlands : SenterNetherlands : Senter Finland : TekesFinland : Tekes Croatia : Bicro Croatia : Bicro (created with W.B. support)(created with W.B. support) ……..

A National Agency :A National Agency :OséoOséo--innovationinnovation (France)(France)

Assistance for innovation and Technology Dvp.Assistance for innovation and Technology Dvp.Financial supportFinancial support

Soft, conditional loansSoft, conditional loans Small grants to support external consultingSmall grants to support external consulting

• Economical (Market studies)Economical (Market studies)• Legal (Legal agreements,; I.P.R.)Legal (Legal agreements,; I.P.R.)• PartnershipPartnership (Partner search) (Partner search)

« Expertise » assistance« Expertise » assistance TechnicalTechnical Financial Financial (Business Plan)(Business Plan) LegalLegal

A National Agency :A National Agency :OséoOséo--innovationinnovation (France)(France)

A networking activityA networking activity TechnicalTechnical

Through the Technology Dept.Through the Technology Dept.

BUT ALSO …BUT ALSO … EconomicalEconomical

With specialized consultantsWith specialized consultants Financial Financial

With V.C., Banks, Business Angels…With V.C., Banks, Business Angels…

International NetworksInternational Networks

World BankWorld Bank An activity which started in the 80s’An activity which started in the 80s’ Covering numerous eligible countriesCovering numerous eligible countries

European UnionEuropean Union Framework ProgramFramework Program ERA-NETERA-NET Eureka Eureka

Brokerage eventsBrokerage events

Invented in the early 90s’Invented in the early 90s’ The goal :The goal :

For technology providersFor technology providers

To meet withTo meet with Technology buyersTechnology buyers

The « challenges »The « challenges » A good balance between Buyers and ProvidersA good balance between Buyers and Providers A « qualitative » mutual interestA « qualitative » mutual interest

Brokerage : an exampleBrokerage : an example

Euro-Trans Days Oct. 15-16, 2007Euro-Trans Days Oct. 15-16, 2007AA E.U. E.U. event on Surface Transportation event on Surface Transportation

GOALSGOALS Stimulate SMEs, R&D, Stakeholders cooperationStimulate SMEs, R&D, Stakeholders cooperation Stimulate Tech. TransferStimulate Tech. Transfer

CONTENTCONTENT Plenary sessionsPlenary sessions WorkshopsWorkshops

One to One confidential meetingsOne to One confidential meetings

A few examples A few examples

An example of successAn example of success

An applied R&D projectAn applied R&D project A French SME (Elmetherm, 40 employees)A French SME (Elmetherm, 40 employees) A major British china producer (Royal Dolton)A major British china producer (Royal Dolton) An academic lab. (University of Limoge)An academic lab. (University of Limoge)

An innovative way of producing china cupsAn innovative way of producing china cups With assistance and support from :With assistance and support from :

The French Innovation AgencyThe French Innovation Agency A French Regional administrationA French Regional administration D.T.I.D.T.I.


World Bank Tech. Dvp programWorld Bank Tech. Dvp program

India(1988-96)India(1988-96)

NCL restructuration programNCL restructuration program

NCL 1988 : A R&D public InstituteNCL 1988 : A R&D public Institute Limited contact with Indian industryLimited contact with Indian industry Limited financial resourcesLimited financial resources


NCL restructuration programNCL restructuration program

An “ambitious” restructuration programAn “ambitious” restructuration program Intensive training focused on Mkt. Oriented R&DIntensive training focused on Mkt. Oriented R&D Training about I.P.R. (B.T.G., London, U.K.)Training about I.P.R. (B.T.G., London, U.K.) Equipment financingEquipment financing ……

A “side” success A “side” success A patented new plasticA patented new plastic A partnership NCL-G.E.A partnership NCL-G.E. A major R&D investment by G.E. in IndiaA major R&D investment by G.E. in India

An example : An example : The The FrenchFrench textile industry textile industry

80s, 90s Competition from Morocco, Turkey80s, 90s Competition from Morocco, Turkey Numerous Numerous French French enterprises have disappearedenterprises have disappeared Some have survived and are profitableSome have survived and are profitable Which are those which survived ?Which are those which survived ?

Those which improved productivityThose which improved productivityby introducing technology in their production facilitiesby introducing technology in their production facilities

Those which improved their productThose which improved their productby focusing on « technical textiles » with high Added Valueby focusing on « technical textiles » with high Added Value

In this « traditional » sector the enterprises which In this « traditional » sector the enterprises which survived are those which focused on technology survived are those which focused on technology

ConclusionConclusion

Technology commercialization requires a very wide Technology commercialization requires a very wide range of expertise:range of expertise:

• TechnicalTechnical

BUT ALSO :BUT ALSO :• Economical, Financial, Legal, Cultural….Economical, Financial, Legal, Cultural….

Bringing these expertise together is a key success Bringing these expertise together is a key success factor for technology developmentfactor for technology development(whether it is Tech. Push, Mkt. Pull, or Tech Absorption)(whether it is Tech. Push, Mkt. Pull, or Tech Absorption)

Thank you for your attentionThank you for your attention


[email protected]@club-internet.fr

Suggestion Nb. Suggestion Nb. 11

Give more attention to traditional sectors :Give more attention to traditional sectors :High Tech industries need innovationHigh Tech industries need innovationBUTBUTTraditional sector industries need technologyTraditional sector industries need technology

To update their production facilitiesTo update their production facilities To adapt to environmental regulations To adapt to environmental regulations To save energyTo save energy To improve their competitivenessTo improve their competitiveness

DO NOT « NEGLECT » TRADITIONAL DO NOT « NEGLECT » TRADITIONAL SECTORS INDUSTRIESSECTORS INDUSTRIES


Do not think only : “Technology push”Do not think only : “Technology push”(Selling what you know how to do)(Selling what you know how to do)

BUTBUT Think also “Market Pull”Think also “Market Pull”

(Offering what your potential customers needs)(Offering what your potential customers needs)

THINK « MARKET PULL »THINK « MARKET PULL »


Do not neglect close by potential customersDo not neglect close by potential customers

Every industry needs technological servicesEvery industry needs technological services(Including traditional sectors industry)(Including traditional sectors industry)

International markets are more risky and costly to tackle International markets are more risky and costly to tackle (*)(*). They should not be your only target . They should not be your only target

DO NOT NEGLECT CLOSE BY CUSTOMERSDO NOT NEGLECT CLOSE BY CUSTOMERS

(*)(*) : : Rule of thumbRule of thumb : : The cost of a cooperation The cost of a cooperation is proportional to the square of the distance is proportional to the square of the distance between the partnersbetween the partners

Suggestion Nb. 4Suggestion Nb. 4(For policy makers)(For policy makers)

The Process has to be « catalysed »The Process has to be « catalysed »

Strong incentives are neededStrong incentives are needed Researchers have to be motivatedResearchers have to be motivated Industrialists have to be motivatedIndustrialists have to be motivated

Financial incentives on top of legal incentivesFinancial incentives on top of legal incentives Financial support for Research/industry partnershipsFinancial support for Research/industry partnerships Individual financial rewards for researchersIndividual financial rewards for researchers

« STRONG » INCENTIVES ARE ESSENTIAL « STRONG » INCENTIVES ARE ESSENTIAL

Suggestion Nb. 5Suggestion Nb. 5(For policy makers)(For policy makers)

A legal framework stable over a long period of A legal framework stable over a long period of time is time is essentialessential

Innovation takes timeInnovation takes timeIncentives should be stable over long period of time Incentives should be stable over long period of time Legal (Tax) system should be stable Legal (Tax) system should be stable

THE RULES SHOULD NOT CHANGE WHILE THE THE RULES SHOULD NOT CHANGE WHILE THE INNOVATIVE PROJECT IS GOING ONINNOVATIVE PROJECT IS GOING ON


1/3 R&D 1/3 R&D (1963-1975)(1963-1975)University (France and USA)University (France and USA)Industry (Franco-American joint venture)Industry (Franco-American joint venture)

1/3 Scientific « diplomacy » 1/3 Scientific « diplomacy » (1976-1985)(1976-1985) (Sci. policy)(Sci. policy)U.S.A. (Houston, Chicago, New York)U.S.A. (Houston, Chicago, New York)U.K. French Embassy (London)U.K. French Embassy (London)

1/3 Innovation engineering 1/3 Innovation engineering (1985- )(1985- )• ANVAR French Innovation agencyANVAR French Innovation agency

• British Technology Group (London)British Technology Group (London)

• EUREKA program (European mkt oriented program)EUREKA program (European mkt oriented program)

A few exemplesA few exemples

The rusty cans The rusty cans Convince SMEsConvince SMEs The expensive chocolateThe expensive chocolate Legal agreementLegal agreement The rickshawThe rickshaw Local innovationLocal innovation The tea cupThe tea cup Sme/Univ/Large CoSme/Univ/Large Co The microplaneThe microplane Invest. AbroadInvest. Abroad The endless C.D.The endless C.D. Large and smallLarge and small The biodegradable The biodegradable Large and smallLarge and small The by-productThe by-product Serendipity (CLEF)Serendipity (CLEF) The very High Tech.The very High Tech. Spin-off (Soitec)Spin-off (Soitec)

An example : An example : The European textile industryThe European textile industry

25 years ago25 years ago : : Numerous enterprises in Western EuropeNumerous enterprises in Western Europe Very different in sizeVery different in size

Some with international marketsSome with international markets Some with regional marketsSome with regional markets

A very tough competition from cheaper labour A very tough competition from cheaper labour countries (Turkey, Morocco,…)countries (Turkey, Morocco,…)

An example : An example : The European textile industryThe European textile industry

Tomorrow :Tomorrow :

Turkish textile industry is now moving to… Turkish textile industry is now moving to…

… …China! (*)China! (*)

(*) learned yesterday, from a Turkish participant.(*) learned yesterday, from a Turkish participant.

knowledge economy forum vi developing networks and a market for knowledge brokerage gilbert nicolaon...

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