Policy Implications for National Innovation Strategies

EIRMA - OECD Paris 2009

Dr. Lorenz Kaiser

Head Division Legal Affairs and Contracts

Fraunhofer Gesellschaft e.V.

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Orientation for Funding

Technical pilot

plants, prototypes

R & D

100 % public

Basic research

Applied research

Development

100 % private

Universities

basic research org.

i.e Fraunhofer

Industry

Funding Rate

analogous?

i. e. 50 %?

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sFramework in force since 01.01.07-Table illustrating the aid intensities

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Forms of Activities in Research and Development

Portefolio

building

internal

research

cooperation

alliance/

clusterlicencing

spin off

Joint

Venture

contract

research

foundation

RTO

University

Company

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Research-Key Figures 2007 on Science

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sExample for sources and allocation of funding:The German Research Landscape in 2007

ZV-A2/ March 05

Market for Applied Research

HGF Hermann von Helmholtz-GemeinschaftWGL Wissenschaftsgemeinschaft Gottfried Wilhelm LeibnizAiF Arbeitsgemeinschaft industrieller ForschungsvereinigungenMPG Max-Planck-Gesellschaft

Characteristics of Research

Fundamental Research

Applied Research

Industry

(internal and external

expenditures)

HGF*

2.3Fraunhofer*

1.3

WGL*

1,1

Federal/

German

Länder

Institutes

0.9

Univer-

sities

9,2

55,4MPG*

1.3

AiF

≈ 0.25

billion €

Source: Bundesbericht Forschung 2007, Stifterverband Wissenschaftsstatistik,

Research Organizations, Federal Statistical Office Germany

* Overall Budget

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Usual Funding Models in Europe

Institutional (singular) funding

depending on the mission (100 %)

project funding

previously development sector

(to 50 %)

premarily national funding

cooperation models in

precompetitive research

(50 % to 100 %)

national european

funding for platforms

and joint ventures (0 %- 100 %)

universities research labs industry

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s Institutional Funding and

Funding for Basic Research

Precompetitive Sector

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R & D - Cooperations between Science and Industry

RTOIndustrial

PartnerUniversity

AP 1 AP 2 AP 3

Cooperation based on division of labour

and exchange of information/results

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sCooperation Model: "Annex"-Institut (Research Institute associated with a University)

basic research-projects

in focused fields

UniversityCompany donating

Funds

Conjoint

Appointment

Cooperation Contract

Annex-InstituteUniversity

institute

University

institute

University

institute

Approval

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sCooperation in a joint program (basic research without compulsory access rights for industrial partner to IP)

Mutual interest on a research field

with open end

(the "better JTI" -idea)

Company RTOJoint funded

Research program

with jointly defined

single projects

No IP access rights

for industy

information

50 % financial

contribution

50 % financial

contribution

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Product Vision - Examples

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s Project Funding and

supporting TT

Development Sector

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sR & D - cooperation in the development sector(reality or nightmare ?)

1. Recognise what the product is:

2. Locate and identify the associated markets:

3. “Speak” to the target market in language they understand:

4. Deliver a clear and consistent message

5. Describe the exploitation in terms of the Consortium as a whole:

*SPECIAL REVIEW ON PROJECT RESULTS EXPLOITATION AND DISSEMINATION ACTIVITIES;GRID

TECHNOLOGIES, FP5 PROJECTS;Held in Brussels on 14-16June 2004

RTOIndustrial

PartnerUniversity

AP 1 AP 2 AP 3

Cooperation based on division of labour

and exchange of information/results

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Contract Research as "funding" strategy ?

RTO/University

Client

3.2 Indirect state aid

3.2.1 Contract research

through RTO

3.2.2 Collaboration of

undertaking and RTO

not under Art. 87 of the

EC-treaty if (alternative)

• market price

• ful cost + profit margin

not under Art. 87 of

the EC-treaty if (alternative)

•the undertaking bears the full

costs of the project ???????

•dissemination of unprotected IP

-

and allocation of IP from the

project to the not-profit

organisations

•compensation for IP on the

basics

of market prices

The ideal situation of state aid law....3.2.2.

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sCooperation Model "Spin In" Indirect + Direct funding

product oriented research,

i.e. production methods

Subsidiary or

Branch lab:

Development

and/or

Production

Research

Institute

Company

Cooperation/licensing/

joint development

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Platform Science / Industry: joint lab with joint investment

sharing of costs. Joint use:

labs with high investments

-Microelectronics-

Company = private

Investment

of xx Mio €

and/or

equipment

Institute = Public

Investment

of xx Mio

and/or

equipment

Institutes Research-Lab

Using Proportion

i.e.

Industry

i.e. 60%

i.e.

Institute

40%

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Funding KTO‟s and TT offices (esp. at universities)

Licensing Problem: The Development Gap:

In most sectors, companies will only license fully developed technologies

• engineering, electronics, physical sciences

patent protection phase is 20 years

• Life Science longer development and clinical test series

patent protection phase can be prolonged to 25 years

Therefore: funding of KTO‟s means:

1. business model only on long term investment

2. return on invest over years is the exception

3. linking with mission and core business

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sPromotion of Spin-Offs through establishing a Connection between Know-how and Capital - Funding ?

Spin-offs

RTO

• Investment in

the form of

"IP"against

Equity

• management

support

e.g.businessplan

• Market

Capital investors

• Institutional

investors

• Other

venture capital

companies

Strategic

Investors

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sExample of an actual and successful spin offConcentrix Solar GmbH

Business

production of Concentrator-Photovoltaic-power stations for sunny splashed areas

Technology

direct sunlight is focussed with fresnel-lenses

2005 created as Spin-off

2007 first power station works

© Concentrix Solar GmbH

power station in spain

the lab in Freiburg

http://www.venturecommunity.fhg.de

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sTechnoloy award 2007Sausage nonfat

development of a process to introduce spices

into meat without the flavour carrier ‚fat„

Dipl.-Ing. Christian Zacherl, Dr.-Ing. Peter

Eisner, Dr. Klaus Müller (v.l.n.r.)

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The Never ending stories

of Funding Strategies

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Different National Models

Funding Technoloy Transfer (TT)

as sole business

esp. from universites

(Transfer offices)

Funding Spin-off Programs

incubation centres and

technology parks, funds ...

What an idea……. : patent funds

PPP: However, whatever, but always useful for politicians

open access: methods and databases

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Open Access in Fraunhofer

Fraunhofer signed the Berlin Declaration on Open Access to Knowledge in the Sciences and Humanities 2003

Fraunhofer welcomes the OECD Recomendation 2006 concerning research data from public funding

Fraunhofer launches own Open Access Policy with recommendations for practice (July 2008)

Fraunhofer Information Center for Planing and Building in Stuttgart is operating an Information data base with an accessible research library and data base (http://fraunhofer.de/fachinfos/WissPub/openaccess/OAallgemein.jsp)

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sFraunhofer GesellschaftOpen Access

Extract of the letter Fraunhofer to OECD of July 2006:

...

Concluding, from the Fraunhofer Gesellschaft point of view, the "draft OECD recommendation concerning access to research data from public funding" (Version may 2006) and the included "Principles and Guidelines" do not interfere with its interests.

Substantial Effects ???

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Open Access in Fraunhofer

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Open Access in Fraunhofer

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Where do we go - Funding Strategies?

National:

given structures on institutional funding

(dimensions and structures statically)

basic funding programs on project funding

European

project funding on subsidiarity to national

switch to program funding (NoE, JTI, EIT, ETP)

non funded (own) intitiatives - rare - (i.e. Fraunhofer Portugal)

Abroad

only singular intitiatives

direct public funding often impossible or extremely difficult

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Paris 2009

GAME OVER

Policy Implications for

National Innovation Strategies