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Financing the Knowledge Society Seed and Venture Capital Financing, the roles of the public and the private sector Claes de Neergaard CEO Industrifonden.

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Presentation on theme: "Financing the Knowledge Society Seed and Venture Capital Financing, the roles of the public and the private sector Claes de Neergaard CEO Industrifonden."— Presentation transcript:

1 Financing the Knowledge Society Seed and Venture Capital Financing, the roles of the public and the private sector Claes de Neergaard CEO Industrifonden

2 The commercialisation of R&D – the driving forces The technology transfer challenge – how does Sweden tackle it? The regional dimension of venture capital financing Can EU policy to improve technology transfers benefit from the Swedish experience? T H E M E S

3 The commercialisation of R&D – the driving forces The technology transfer challenge – how does Sweden tackle it? The regional dimension of venture capital financing Can EU policy to improve technology transfers benefit from the Swedish experience? T H E M E S

4 What do we get out of R&D investments? Financial Times Nov 8, 2005

5 Business sector Universities & colleges Government organisations R&D expenditures in relation to GDP 2003 Per cent of GDP Source: OECD 2005 New Zealand Ireland (2001) Norway United Kingdom Netherlands (2001) Canada France Belgium Denmark (2001) Germany United States Korea Japan Finland Sweden Israel

6 Commercialisation of R&D – EU vs. the US Stronger output from US research clusters Stronger tax incentives in the US Stronger incentives for US universities The US capital market is more powerful US military spending boosts research US one homogenous market. EU still too fragmented EU does not catch up!

7 The road map from idea to invoice Technology transfer Basic Applied R&D Market Collaboration industry – research organizations Licensing Creation of a new company

8 Good ideas can end up in KnowledgeMarket © Jan Edling The Valley of Death

9 The commercialisation of R&D – the driving forces The technology transfer challenge – how does Sweden tackle it? The regional dimension of venture capital financing Can EU policy to improve technology transfers benefit from the Swedish experience? T H E M E S

10 Enhancement of Technology Transfer – some Swedish measures Increase government funding for R&D Focus on cutting edge research in centres of excellence Public/private partnership program in six industry branches Improve the effectiveness of both Tech Transfer Offices in universities and Joint Research Institutes Innovationsbron – a dedicated financing vehicle for the commercialisation of research Maintain a strong Industrifonden A welcoming approach to venture capital

11 Basic R&D Applied R&D Pre- seed Seed Start- up Financing in different stages Expans ion Commercial financing Pre-commercial financing Private sector Public sector

12 Conclusions from a joint US-EU report The venture markets in US and EU invest too little in early stage start-ups Constitutes a market failure Public sector measures are justified to plug this gap Public measures should –work with markets and not crowd out private investment –support funds with the necessary track record and economies of scale Source: Department of Commerce and EU Commission, 2005

13 Venture capital investments in EU Seed EUR 148 m Total investments EUR 12,000 million Start-up EUR 2,200 million Expansion EUR 7,900 m

14 Market Criteria for an effective innovation system Idea Increases flow of high quality business ideas Provides rigorous screening Involves business angels Brings in market perspective early Based on centres of excellence

15 South West East Stockholm Uppsala Umeå Luleå Seed capital Three focus areas Seven regional companies Infrastructure - Incubators Academia – Business co-op.

16 Invests in high-tech companies in ICT, Life Science and Industrial and Energy Ventures Direct investments in about 100 companies Co-owner in 11 regional VC-companies and Innovationsbron Independent trust set up by the Swedish government in 1979 Total equity: SEK 3.2 billion Invested capital: SEK 1.6 billion

17 Regional venture capital companies

18 Venture capital investments Percent of GDP EVCA 2005

19 The commercialisation of R&D – the driving forces The technology transfer challenge – how does Sweden tackle it? The regional dimension of venture capital financing Can EU policy to improve technology transfers benefit from the Swedish experience? T H E M E S

20 The regional dimension of venture capital Private sector venture funds usually covers Sweden or the Nordic countries from one or several capitals There is room for smaller regional venture funds for early stage investments in proximity to companies Co-investment funds copied on the model developed in Scotland are helpful additions Proximity to companies is an advantage but company selection can be too much influenced by regional/local preferences Regional investment funds should not be seen as a tool of regional policy but of innovation policy

21 The commercialisation of R&D – the driving forces The technology transfer challenge – how does Sweden tackle it? The regional dimension of venture capital financing Can EU policy to improve technology transfers benefit from the Swedish experience? T H E M E S

22 Can EU policy to improve technology transfers benefit from the Swedish experience ? Measures to stimulate commercialisation of research must get a high priority Create two European incubator support programs; one for Life Science and one for Technology Focus on national and European R&D centres of excellence Positive attitude to mixing financing from the Commission, European Investment Bank, European Investment Fund and national sources Do not go too far in defining European interest. Good research benefits all EU-countries


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