Medical Device Link.

DESIGN

Funds and knowledge path

Technology transfer, whereby research results from Universities or research institutes are converted into processes or devices for industry, is vitally important. Universities are an important source of new ideas and government funding of research and development (R&D) in Universities is large and growing, particularly in the United Kingdom (UK).

In a period when industry has been limiting or reducing its research spend, publicly funded research has been on the rise. Between 1987 and 2000, UK industry’s expenditure on R&D as a percentage of gross domestic profit fell from 1.5% to 1.2%. In contrast, during the period 2003–2005 the spending of the six research councils² rose from £1859 million to £2190 million (e2760–3250).

At a recent workshop held at the Biocity Incubator in Nottingham, UK,³ Professor Gareth Lloyd Jones, Chairman of Medilink Yorkshire & Humber Ltd, emphasised the importance of technology transfer in creating the high value/knowledge intensive industries that will be the future source of employment.4 “Never before has technology transfer been so important, but make no mistake, there is intense [global] competition.” It is not only essential to engage in technology transfer, but also to do it efficiently.

Current situation

It was amid concerns that Universities were not as effective as they could be in working with industry that the Lambert Report was commissioned by the UK government and published in 2003.¹ Now, three years after publication, it is time to consider whether the recommendations made have prompted any changes in the way Universities are engaging with industry. Lambert recognised that the most effective transfers of knowledge involve human interaction and made recommendations to encourage more frequent and easy communications between business people and academics. However, in many cases these interactions are conducted by intermediaries such as Technology Transfer Offices (TTOs), which is not always as beneficial as direct interaction. Each university has taken a different approach and some are much more effective than others. A good example of an effective TTO is Sheffield University Enterprises Ltd.⁵

Another concern raised by Lambert was that Universities may be setting too high a price on the value of the knowledge (intellectual property) they create. When seeking to license technology to industry or enter into joint development contracts, the negotiations are becoming more protracted, rather than simpler. The provision of standard template contracts suggested by Lambert does not help if there is a basic cultural divide between the two parties.

The Lambert Report also suggested that there had been too much emphasis on developing University spinout companies rather than working to transfer technology into existing companies. There was a surge of start-up companies in the 1990s fuelled by the technology investment boom, but by the time of the report the climate had already changed and the balance has now been restored. It is recognised that start-ups are a risky option and funds for these ventures are more difficult to raise, therefore licensing is back in favour.

Many of the most successful University start-ups have resulted from partnerships between an individual academic and an entrepreneur. This enables the academic to stay in his University post and take up a role of scientific advisor and ensure a flow of technology enhancements into the start-up. The entrepreneur is the risk taker in the partnership and is totally committed to building the business. Plastic Logic Ltd⁶ (Cambridge, UK) is an illustration of how this can work with the partnership between Stuart Evans, the Chief Executive Officer entrepreneur, and Professor Sir Richard Friend and Professor Henning Sirringhaus of the Cavendish Laboratories.The company has recently raised US$24m investment from major corporate and financial backers.

New developments

Even if the recommendations from the Lambert Report are not being acted on, at least it provoked a debate on how to improve the efficiency of technology transfer. There is now widespread recognition that there is a gap between the academic and industrial communities that will have to be bridged. The gap can be in several areas: cultural, financial and knowledge.

Figure 1. The financial and knowledge gap.

The cultural gap is best illustrated as follows. Whereas industry tends to be working under extreme time pressures and budget constraints, the academic community, by virtue of its support from the public sector, can work on long-term challenges and sometimes apparently without any time pressures. The industrial situ-ation demands a pragmatic approach, that is, not necessarily finding the “right” answer, but one that gets the job done on time and within budget. The financial and knowledge gap is illustrated in Figure 1. Technology being developed in the research community is typically taken no further than proof of concept. In contrast, commercial production can rarely start before a pilot scale manufacturing plant is set up.

The funds required to cross the gap can be considerable and may be as much as ten times what has been spent to reach the proof of concept stage. It is no wonder that the gap is sometimes referred to as the “Valley of Death.” Only two types of organisation are able to cross this gap: large industrial companies with considerable resources or spinout companies that have been successful in raising large levels of venture capital funding. Many initiatives have been set up to encourage small- and medium-sized enterprises (SMEs) to engage with academia. The fundamental message from Figure 1 is that SMEs are not equipped to cross the gap.

Recent progress

Table I. Summary of the major differences in the requirements.

Bridging the gap is a challenging activity, but one where significant progress is being made. In the 1990s a whole raft of intermediary organisations came into existence, many funded by short-lived government initiatives. Now, ten years later it is possible to reflect on what has worked well and what has not. A good strategy is to focus on individual niches. The focus can be on technology, application sector or geographical area. In some cases success has come from a narrow focus on all three. Table I compares three recent initiatives in the UK. Although based in the UK, companies from across Europe can engage with these centres.

Biocity is an incubator to support transfer of biotechnology into the health-care sector.³ Funded by the East Midlands Development Agency as a joint venture with the Nottingham Universities, it has achieved rapid growth while maintaining a tight focus.

Nanofactory is a different type of initiative.⁷ It promotes technology transfer from all seven Yorkshire Universities. The main delivery mechanism is via 16 existing Centres of Industrial Collaboration. Each of these has a particular application focus although the overall Nanofactory target is high volume consumer applications including, pharmaceutical, health-care and personal-care products. Nanofactory focusses on the technology base of nanoparticles, nanocomposites and formulations.

The East of England Regional Development agency is supporting its own technology transfer initiative labelled “i10.” The name comes from the 10 Universities and tertiary education establishments in the region; i10 is servicing nearly all application sectors from biotechnology to tourism.⁸

In the Yorkshire Region there are several other technology transfer initiatives in addition to Nanofactory. In common with most areas of the UK, there is a National Health Service Innovation Hub known as Medipex Ltd.⁹ The hubs were put in place to take ideas from the drawing board to proof of concept and beyond. The service provided by Medipex includes documentation, patent and literature searches, confirmation that the product concept meets a clinical need and provides valuable contacts with industry.

One of the previously mentioned Centres of Industrial Collaboration also has a health-care focus. The Biomaterials and Tissue Engineering CIC (BITE CIC)¹⁰ provides a channel between academic excellence in Yorkshire and Humberside and industry. It is a useful intermediary that is customer driven and staffed by people with industrial and commercial backgrounds. BITE CIC sources University R&D capacity in health-care technology on behalf of the medical device industry. It also provides project management services that reduce the effort needed by the industrial partner to manage the relationship with academia.

Driving up efficiency

Technology transfer will always be an inefficient process if it is driven from the technology end. Market pull is needed and this can only be provided by companies, whether large or small. The secret to successful technology transfer schemes is to make sure that industry is involved and drives the process. Intermediary organisations can support the process, but to be successful they must serve their customers in industry rather than the academic establishment.

Dr J Malcolm Wilkinson is Director of Technology for Industry Ltd, E-Space North, 181 Wisbech Road, Littleport, Ely, CB6 1RA, UK, tel. +44 1353 865 400, e-mail: jmw@tfi-ltd.co.uk www.tfi.co.uk