1. Jack Lang University of Cambridge European Innovating Minds Research and innovation: what about private sector?

2. jal1@cam.ac.uk l Director of Studies in Management, Emmanuel College l Entrepreneur in Residence, Judge Business School l Affiliated Lecturer and Faculty Board member, Department of Computer Science and Technology l Steward, Cambridge Angels

3. ISBN: 0273656155

4. Cambridge Cluster l About 1500 companies – Employing about 50,000 l Largest European cluster – 8% of all EU VC investment l $20 billion value created by Cambridge Alumni – Stanford $1000 billion? l Billion $ market cap companies – ARM, – Virata, – CSR, – Autonomy, – Cambridge Antibody l Cambridge Angels Source: Cambridge Technopole Report

5. Cambridge Cluster l About 1500 companies – Employing about 50,000 – Technion ~30 l Largest European cluster l $20 billion value created by Cambridge Alumni – Stanford $1000 billion? l Billion $ market cap companies – ARM, – Virata, – CSR, – Autonomy, – Cambridge Antibody l Cambridge Angels Source: Cambridge Technopole Report University IPR Policy changed

6. Until 1985 1986-1990 1991-1995 1996-2000 2001-2002 C ambridge University Acorn Hermann Hauser Acquired by Olivetti Olivetti Research Lab Andy Hopper Adaptive Broadband Cambridge Broadband Acquired by American Microwave Acquired by Western Multiplex Corp Andy Hopper Peter Warton IPV (Telemedia Systems) Andy Hopper Virata(ATML) Hermann Hauser Andy Hopper Merged with Globespan Acquired by AT &T RealVNC Virtual Network Computing Level5Network Andy Hopper ANT Alex van Someren Nicko van Someren nCipher Alex van Someren Nicko van Someren Netchannel Hermann Hauser Jack Lang Acquired by NTL ARM Element 14 Stan Boland Simon Knowles Acquired by Broadcom Amadeus Capital Partners Hermann Hauser IQ Bio Hermann Hauser, Chris Keightley Part of DAKO Diagnostics DakoCytomation - Merged with Cytomation Inc CDT Richard Friend Plastic Logic Analysys David Cleevely Cambridge Network David Cleevely Hermann Hauser Alec Broers Cambridge 3G David Cleevely CPS Peter Duffett-Smith Polight Technologies Stephen Elliott Pavel Krecmer ART Daniel Hall Pilgrim Beart ActiveRF Pilgrim Beart Antenova Zeus Technology Adam Twiss David Reeves Cambridge Semiconductor Gehan Amaratunga Florin Udrea Muscat John Snyder Martin Porter Enterprise Accelerator John Snyder Webtop Smartlogik Acquired by Dialog Small World Richard Green Authur Chance Dick Newell CAD Shape Data Charles Lang Acquired by GE Tensails Richard Green VBN online TerraPrise Ubisense Andy Hopper Steve Pope Andy Hopper Andy Ward Pete Steggles Simon Elliott David Cleevely Electronic Share Information Acquired by E* Trade Hermann Hauser Jack Lang Top express Jack Lang Splashpower Lily Chang James Hay Saviso Group Adam Twiss Bryan Amesbury Innovia Collin Ager Garraint Davies Cambridge Interactive Systems Hermann Hauser Mike Muller Tudor Brown Jamie Urquhart Dick Newell, Tom Sancha Figure 1 - The hi-tech start-ups associated with the Cambridge University Stan Boland Simon Knowles Icera Laser-Scan R. O. Frisch M-Spatial Adrian Cuthbert Jon Billing version (Sept 2005) – not to be used or copied without permission Copyright – Y.M.Myint - y.myint@jbs.cam.ac.uk, Dr. Shailendra Vyakarnam - s.vyakarnam@jbs.cam.ac.uky.myint@jbs.cam.ac.uks.vyakarnam@jbs.cam.ac.uk

7. Hermann Hauser Graham O'Keeffe Richard Youell Andrew Dames Ray Anderson Andy Hopper Mike Muller Duncan Stewart Chris Wade David Cleevely Gerald Avison Stephen Ives Richard Friend Bob Pettigrew Peter Wynn Alex Van Someren Robert Hook Robin Saxby Jamie Urquhart Laurence Garrett Pilgrim Beart Jack Lang Phil O'Donovan Robert Swann Stephen Elliott John Paul Auton Gordon Edge Dr. Peter J. Duffett-Smith Nigel Berry Charles Cotton Simon Segars Sir Alec Broers Michael Ledzion Richard King Cambridge Cluster Common Directorships/Investments Source: Yupar Myint and Shai Vyarkarnam Judge Business School 4 links & above 3 links 2 links 1 link

8. EU-27 Science and Technology Indicators 2007 Source: OECD April 2008

10. CFO’s view l Our new project will – Spend $100M+ – Have only a small (<1%) chance of success (recovering investment) – Take 10 years before break-even (average time from lab to mass product) – Cannibalise our existing customers and revenue l Stick to the knitting – Until external factors force change – Then use resources to purchase external innovation – Evolution, not revolution

11. Big companies should not innovate l Innovation vs process improvement l Big companies need innovation like a hole in the head – Haven’t recovered from the last one – Too many innovations look like whims Confuse staff Confuse customers – Managements whim of iron – Risky 3x budget, 10 x time <1% success Investment? Is this what the shareholders signed up for? – Risk adverse People make their careers on stability, not change – Authority- who can initiate major projects? l SMEs are the engine of innovation – Cheaper to buy when needed – Spin out the trouble makers

12. Piloting the rocket of radical innovation, Stevens and Burley, Research Technology Management, Mar-Apr 2003 l They analysed the personality of the project leaders in a big chemical company over 10 years l The most creative half of the leaders ran teams that produced 13 times more profit over that time than the least creative half, and completed more projects. l Over half of them were no longer with the company at the end of the period (almost all of the least creative half were still there!) l They looked at WHY the creative leaders did so much better, and decided that it WASN'T because they got better projects, but because they were better at getting round the obstacles in the way. l Moral: Creative people are the most profitable, the least appreciated. l Spin-out – lets get rid of this square peg – Our founder has resigned to spend more time with the research department

13. Lip service l 70% of senior managers say innovation is among their top 3 priorities l Less than a third do anything about it – Budget, protect resource, team, support, culture, deal with failure; – 22% schedule innovation audit as a leadership team agenda item l Close down or sell research labs as not cost effective – Bell, IBM, Xerox PARC, BT, Unilever, MoD... Source: How companies approach innovation: A McKinsey Global Survey Sept 2007How companies approach innovation: A McKinsey Global Survey

14. Douglas McGregor, "New Concepts of Management” 1960 Intellectual creativity cannot be 'programmed' and directed the way we program and direct an assembly line or an accounting department. This kind of intellectual contribution to the enterprise cannot be obtained by giving orders, by traditional supervisory practices, or by close systems of control. Even conventional notions of productivity are meaningless with reference to the creative intellectual effort. Management has not yet considered in any depth what is involved in managing an organization heavily populated with people whose prime contribution consists of creative intellectual effort. -

15. Theory X and Theory Y l Theory X: – People don’t want to work and create but must be made to do so – Motivated by pay and fear l Theory Y: – People want to work and create but are stopped by the system – Motivated by “higher order” needs, such as peer esteem and recognition E.g. Open Source movement People want to be innovators but are stopped by the system

16. Perverse Incentives l Governmental Grants, incubators etc – Market distortion – Create competition for funding, not the market l Strong IPR regimes – False markets – Create monopolies and slow innovation – Are long monopolies the best way to reward invention? l Instant fixes don’t work – 10 years from lab to consumer – Culture change takes time Inventors are not always mad! – New financial regimes

17. ACCTO l Criteria for customer acceptance – Everett Rogers “The Diffusion of Innovation” Simon & Schuster International; ISBN: 0743222091 l A - relative Advantage – Loose IPR regime; Tax regime l C - Complexity – Can I understand what I need to do? l C –Compatibility – Social, professional l T -Trialability – Can I test it without risk first? Sabbaticals Part-time posts l O - Observability – Can others see the benefits? Local heroes, people networks

18. Role of Universities and Government as enablers l What Universities and government should do: – Teach skills Money management Legals Project Planning Market research – Mentor Contacts, exemplars Friendly infrastructure Banks, lawyers, patent agents, accountants etc – Encourage Business Plan competitions Sabbaticals/part time Soft entry (eg EIS) Favourable tax regimes Publicity Networks and heroes l What Universities (and government) should NOT do: – Run incubators Better done commercially – Run Seed funds Specialist skill – Run Venture Capital funds Competition – Give large grants Market distortion – Grab IPR No EU University has made money on IPR licensing – Discouraging tax regime (including IPR)

19. People want to be innovators but are stopped by the system