Jack LangUniversity of Cambridge

European Innovating MindsEuropean Innovating Minds

Research and innovation: what Research and innovation: what about private sector?about private sector?

jal1@cam.ac.ukjal1@cam.ac.uk

Director of Studies in Management, Emmanuel College

Entrepreneur in Residence, Judge Business School

Affiliated Lecturer and Faculty Board member, Department of Computer Science and Technology

Steward, Cambridge Angels

ISBN: 0273656155

ISBN: 0273656155

Cambridge ClusterCambridge Cluster

About 1500 companies– Employing about 50,000

Largest European cluster– 8% of all EU VC investment

$20 billion value created by Cambridge Alumni

– Stanford $1000 billion? Billion $ market cap

companies – ARM, – Virata, – CSR, – Autonomy, – Cambridge Antibody

Cambridge Angels

Source: Cambridge Technopole Report

Cambridge ClusterCambridge Cluster

About 1500 companies– Employing about 50,000– Technion ~30

Largest European cluster $20 billion value created

by Cambridge Alumni– Stanford $1000 billion?

Billion $ market cap companies

– ARM, – Virata, – CSR, – Autonomy, – Cambridge Antibody

Cambridge Angels

Source: Cambridge Technopole Report

University IPR Policy changed

Until 1985

1986-1990

1991-1995

1996-2000

2001-2002

Cambridge

University

AcornHermann

Hauser

Acquired by Olivetti

Olivetti Research Lab

Andy Hopper

Adaptive Broadband

Cambridge BroadbandAcquired 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

ANTAlex van Someren

Nicko van Someren

nCipherAlex van Someren

Nicko van Someren

NetchannelHermann Hauser

Jack Lang

Acquired by

NTL

ARMElement 14

Stan Boland

Simon Knowles

Acquired by Broadcom

Amadeus Capital PartnersHermann Hauser

IQ BioHermann Hauser, Chris Keightley

Part of DAKO Diagnostics

DakoCytomation - Merged with

Cytomation Inc

CDT

Richard Friend

Richard Friend Plastic Logic

Analysys

David Cleevely

Cambridge Network

David Cleevely

Hermann Hauser

Alec Broers

Cambridge 3G

David Cleevely

CPSPeter Duffett-Smith

Polight Technologies

Stephen Elliott

Pavel Krecmer

ART

Daniel Hall

Pilgrim BeartActiveRF

Pilgrim Beart

Antenova

Zeus Technology

Adam Twiss

David Reeves

Cambridge Semiconductor

Gehan Amaratunga

Florin Udrea

MuscatJohn Snyder

Martin Porter Enterprise

AcceleratorJohn Snyder

John SnyderWebtop

Smartlogik

Acquired by Dialog

Small World

Richard Green

Authur Chance

Dick Newell

CADShape Data Charles Lang

Acquired by GE

TensailsRichard 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 expressJack 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-ScanR. O. Frisch

M-SpatialAdrian 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.uk

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

EU-27 Science and Technology Indicators 2007

Source: OECD April 2008

CFO’s viewCFO’s view

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

Stick to the knitting– Until external factors force change– Then use resources to purchase external

innovation– Evolution, not revolution

Big companies should not Big companies should not innovateinnovate

Innovation vs process improvement 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?

SMEs are the engine of innovation– Cheaper to buy when needed– Spin out the trouble makers

Piloting the rocket of radical Piloting the rocket of radical innovation,innovation, Stevens and Burley, Stevens and Burley,

Research Technology Management, Research Technology Management, Mar-Apr 2003Mar-Apr 2003

They analysed the personality of the project leaders in a big chemical company over 10 years

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.

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!) 

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.

Moral: Creative people are the most profitable, the least appreciated.

Spin-out – lets get rid of this square peg– Our founder has resigned to spend more time with the research department

Lip serviceLip service

70% of senior managers say innovation is among their top 3 priorities

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

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 2007

Douglas McGregorDouglas McGregor, "New Concepts of , "New Concepts of Management” 1960Management” 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.

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Theory X and Theory YTheory X and Theory Y Theory X:

– People don’t want to work and create but must be made to do so

– Motivated by pay and fear

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

Perverse IncentivesPerverse Incentives Governmental Grants, incubators etc

– Market distortion– Create competition for funding, not the

market

Strong IPR regimes– False markets– Create monopolies and slow innovation– Are long monopolies the best way to

reward invention? Instant fixes don’t work

– 10 years from lab to consumer– Culture change takes time

• Inventors are not always mad!

– New financial regimes

ACCTOACCTO Criteria for customer acceptance

– Everett Rogers “The Diffusion of Innovation”• Simon & Schuster International; ISBN: 0743222091

A - relative Advantage– Loose IPR regime; Tax regime

C - Complexity– Can I understand what I need to do?

C –Compatibility– Social, professional

T -Trialability– Can I test it without risk first?

• Sabbaticals• Part-time posts

O - Observability– Can others see the benefits?

• Local heroes, people networks

Role of Universities and Role of Universities and Government as enablers Government as enablers

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

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)

People want to be innovators

but are stopped by the system