THE EIT: FACILITATOR OF OPEN INNOVATION FOR THE FUTURE OF EUROPE

Alexander von Gabain – Chairman of the EIT Governing BoardEIT AWARENESS DAY- THE NETHERLANDSThe Hague, 4 June 2013

ABOUT DISCOVERY, INVENTION, TRANSLATION & INNOVATION

1 2

3 4

Discovery:Finding out something not yet known

Invention: creating or designing something not existing before

Translation: processing discoveries and/or invention into innovation

Innovation: making changes with societal impact based on discoveries and/or invention

Excellent science & research are necessary yet not sufficient ingredients for innovation

INNOVATION IS COMPLEX, TAKES TIME AND NEEDS INVESTMENTS AND IS RISKY

Phase I1st year

Phase II1 - 2 year

Phase III3 - 4 year

Clinical development

10 - 20 20 - 50 50 - 90Likelihood of success(percent)

Research Development(pre-clinical)

Productlicensing

5 10 99

Submissionof license

90 - 95

20 - 200 50 - 175 100 - 125Cost(m US$)

10 - 40 20 - 225 5 - 1010 - 15

$ 215 - 1.000

Time(years)

4 - 6 1 - 2 4 - 6 1

Example: development of new pharmaceuticals

NEW PARADIGMS IN INNOVATION:FROM SINGLE GENIUSES TO COMPLEX NETWORKS

Source: Science, Vol. 308,

p. 640

• Go for the best individuals• Make sure they understand the master plan• Make sure they form a strong team• Create respect for the involved competence areas• Complement strength/weakness profiles of the team members

• High level of education & solid academic base

• Historical power houses of research & science

• Increasing number of centres of excellence

• Impressive corporations and SMEs

• Long tradition of product development

• Growing European interactions between national R&D

players

EUROPE‘S UNLOCKED POTENTIAL TO SUPPORT WORLD-CLASS INNOVATION

Europe Bio Report for 2007

CREATING VALUE - CREATING JOBSEurope USA

No. of employees 63,000 172,000

Average Investment per year

EUR 6 bn EUR 18 bn

Public listed <10% >30%

Total value ofcompanies

EUR ~30 bn

EUR ~300 bn

Origin of patents ~ 28% ~ 52% from commercialenterprises

EXAMPLEBIOTECH – WHAT CAME OUT FOR EUROPE

Many proposals & smart ideas that could help to improve Innovation in Europe

Communication cross disciplines is key: Creative Ideas are children of solitude, yet are rarely conceived in isolation G Schatz, Former President of the Swiss Reserch CouncilScience, 2011

Innovation isfostered best in Multicultural,Interdisciplinary &Game-changing EnvironmentM Schuurmans; Founding Chairof he EIR, at the SemmeringSymposium 2011

Fund early stage venturesSupport innovative companiesInvest into Education Celebrate entrepreneurs

F Brown, Dean of Insead J-P Courtois, President of Microsoft , The Wall Street Journal, 2009How to integrate

all them?

Scientists must be taughtto manageJ. Seliger, Ass. Prof, Nature 2012

THE SMOKING GUN: AGE DISTRIBUTION OF INNOVATIVE COMPANIES

US: approx. 21%EU: approx. 2%

Bruegel policy brief 2009 Reinhilde Veugelers

HOW TO ENCOURAGE THE GROWTH OF YOUNG VENTURES IN EUROPE?

Europe has a history of brilliant entrepreneurs but data suggest we

need an ‘entrepreneurial

renaissance’to strengthen our ability to compete

globally

wanted

THE EIT PROPOSITION FOR INNOVATION: INTEGRATING THE KNOWLEDGE TRIANGLE

Partners and people within the knowledge triangle are at the core of the innovation web beyond the traditional R&D consortia

Higher Education

Research & technology

Industry & SMEs

ENTREPRENEURIALLY DRIVEN

INNOVATION

THE EIT STRATEGY

Create the entrepreneurs of

tomorrow and prepare for the next innovative breakthroughs

Place ownership, accountability & entrepreneurship into the centre of

innovation

Create innovative ecosystems with

global impact,targeting societal

challenges

Overcome the silo mentality of the

players within and between Member

States

Seed-fund & catalyze the

integration ofthe innovation

triangle

COME IN WITH SEED INVESTMENT WHERE A STEP CHANCE IS MOST NEEDED

Its aim is to boost the innovation process:

from idea to product

from lab to market

from student to entrepreneur

in areas of high societal need through its Knowledge and

Innovation Communities (KICs).

THE EIT’s OBJECTIVES

THE LABORATORY AND THE FACTORY: KNOWLEDGE AND INNOVATION COMMUNITIES

Higher Education

Business

KIC

• Innovation around a common theme

• Output focused: ideas exploited and

entrepreneurs ‘launched’

• Excellence

• International partnerships

• Long term, sustainable & autonomous

• Integration and exchange

• Bringing people together: co-location

• Clear governance: CEO and BP

• Up to 25% EIT funding

Research

How do the KICs work in practice?Industry/SMEs -

Higher Education Institute -

Research Institute -

Entrepreneurship -

KIC Co-location Centre -

Using KIC InnoEnergy as an example

Climate KIC:

Co-location centre

RIC (Regional Implementation and

Innovation Centre)

EIT ICT Labs:

Co-location centre

Associate Partner

KIC InnoEnergy

Co-location centre

KICs EUROPEAN IMPACT

Climate-KIC

• Mission: to accelerate significantly the innovation required for a transformation to a low-carbon economy, and to ensure Europe benefits from new technologies, company growth and jobs

• Thematic Focus Area: assessing climate change and managing its drivers, transitioning to resilient, low-carbon cities, advancing adaptive water management and developing zero carbon production systems

• Governance: CEO - Mary Ritter, Chairman - John Schellnhuber

• Partners inc. Bayer, EDF, GDF Suez, DSM, Schipol Airport ETH Zurich, Imperial College London, Potsdam Institute for Climate Impact Research PIK, Technische Universität Berlin, Forschungszentrum Jülich GmbH, l’Institut national de la recherche agronomique INRA, Delft University of Technology & Utrecht University,…

KIC InnoEnergy

• Mission: To become the leading engine of innovation in the field of sustainable energy.

• Thematic Focus Area: energy from chemical fuels, renewables, clean coal technologies, sustainable nuclear and renewable energy convergence, intelligent, energy efficient buildings and cities and European smart electric grid and electric storage

• Governance: CEO - Diego Pavia, Chairman - Karl-Friedrich Ziegahn

• Partners inc. EnBW, Vattenfall, Karlsruhe Institute of Technology (KIT), Grenoble Ecole de Management, CEA, EDF, VITO, ESADE, Gas Natural Fenosa, TNE, K.U. Leuven, ABB, KTH, AGH University of Technology, Central Mining Institute,…

EIT ICT Labs

• Mission: EIT ICT Labs intends to turn Europe into the global leader in ICT innovation by establishing a new type of partnership between leading companies, research centres and universities in Europe.

• Thematic Focus Area: smart spaces, smart energy systems, health and wellbeing, digital cities of the future, future media and content delivery and intelligent mobility and transportation systems

• Governance: CEO – Willem Jonker , Chairman – Henning Kagermann

• Partners inc. Alcatel Lucent, Fraunhofer, KTH, Nokia, Aalto University, Ericsson, INRIA, Philips, Orange, SAP, Siemens, TRENTO Rise, Universite Paris Sud, Telecom Italia, VTT,...

KIC PARTNERS: 2010-2013

In 2013, the three KIC brought together over 350 partners

EIT FUNDING: 2010-2013Leverage impact and sources of funding

KIC ACHIEVEMENTS SINCE THEIR IMPLEMENATION IN 2010

• 17 innovation hotspots spread across Europe

• More than 350 partners from business, higher education and research and

other relevant institutions

• Approx. 300 million € EIT investment into the existing three KICs with more than 1.1 billion € leveraged from external sources

• KICs have recruited more than 1000 students into about 20 specific

educational programmes integrating interdisciplinary innovation and entrepreneurship

• Approx. 90 innovation projects initiated by the KICs, 108 start-up companies,

400 business ideas incubated.

EIT MILESTONES TO DATE2011 - 2012: Consolidation of EIT and KIC activities

April 2010: Implement Headquarters in Budapest

PARTNERS, TALENTS, NETWORKS, EDUCATION, MINDSET CHANGE, NOVEL CONCEPTS & PLATFORMS

PRODUCTS SERVICES

& FINANCIAL SUSTAINABILITY

ENTRE & INTRAPRENEURS, PRIVATE INVESTMENT,

PROMOTION, MARKETS & CUSTOMERS

IMPACT

SUSTAINABILTY

HIGH QUALITY JOBS

COMPETITIVENESS

SOLUTION TO SOCIETAL

CHALLENGES

EIT INNOVATION - AN INTEGRATED APPROACH TOWARDS SUCCESFUL KICs

• THE EIT NEEDS TO MANAGE AND TO MONITOR THE INVESTMENT INTO THE

KICs

• THE KICs NEED TO MANAGE COMPLEXITY TO BUILD THEIR PAN EUROPEAN

‘INNOVATION FACTORIES’

• ENTREPRENEURS AND INTRAPRENEURS FOSTERED WITHIN THE KICS NEED

TO BE EDUCATED TO TAKE ADVANTAGE OF MANAGEMENT SKILLS

• THE GROWTH OF KIC PARTNERS RELIES ON MANAGEMENT SKILLS

• HOWEVER, A SMART BALANCE BETWEEN ENTREPREUNERIAL ‘OBSESSION’

AND MANAGERIAL SKILLS NEEDS TO BE MAINTAINED

MANAGMENT WILL BE KEY ON THE EIT JOURNEY TO UNLOCK INNOVATION IN THE KICs

THE FUTURE OF THE EIT

Consolidate the current KICs and set up 6 further KICs:

• 2014: healthy living & active ageing, food4future, raw materials (TBC)

• 2018: added value manufacturing, smart secure societies & urban mobility (TBC)

Together with the KICs create ecosystems

• that attract private investors, regional and public funds (e.g.: EIB and EDB)

• that become accepted and interconnected by/with the global innovation arena

• that become financially self sustainable in the long term

EIT to become a hub providing knowledge to all stakeholders within the innovation knowledge triangle

THE EIT’s ROLE BEYOND THE FOSTERING OF THE KICs

• Share and disseminate good practices and learnings on its integrated innovation approach to the European innovation landscape

• Educate talents from all members states towards an integrated innovation approach built on entrepreneurship and leadership

• Integrate regional approaches into the EIT innovation ecosystems

• Foster a European innovation landscape that is attractive to entrepreneurs and risk capital

IS THERE AN EIT MISSION BEYOND THE EUROPEAN INNOVATION GAP?

Established socio-technical systems tend to narrow down the diversity of innovations, because the prevailing technologies develop a fitting institutional environment (Garud and Karnøe, 2001)

Source: C. Rammel 2006 and recent presentations; more recent Stirling 2011; Geels 2002

THE CREATION OF ECOSYSTEMTS THAT RENEW TECHNICAL LANDSCAPE

TimeTime

Landscape developments put pressure on existing regime,

which opens up, creating windows of opportunity for novelties

Socio-technical regime is ‘dynamically stable’.On different dimensions there are ongoing processes

New configuration breaks through, takingadvantage of ‘windows of opportunity’. Adjustments occur in socio-technical regime.

Elements are gradually linked together,and stabilise in a dominant design.Internal momentum increases.

Learning processes take place on multiple dimensions.Different elements are gradually linked together in a seamless web.

New socio-technicalregime influences landscape

Technologicalniches

Socio-technical’landscape

Socio-technicalregime

Technology

Markets, user preferences

CulturePolicy

ScienceIndustry

experimentation / learning

alignment / stabilisation / momentum

saturation / incumbent inertia

windows of opportunity / breakthrough / reconfiguration

environmental drivers / political pressures

environmental drivers / political pressures

TECHNOLOGICAL NICHES

TECHNOLOGICAL NICHES

SOCIO-TECHNICAL

REGIME

SOCIO-TECHNICAL LANDSCAPE

Source:Geels, 2002

… Innovation powered by the EIT! …

... Research on the move! …

… Entrepreneurs in the making! …

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HOW TO BUILD FUTURE INNOVATION FACTORIES?

Identify organisations who are excited and eager to take ownership

Find a topic that is “KIC-able” within the given themes

Select a strong consortium of excellence integrating all stakeholders across the knowledge triangle

Build upon or create a local and pan-European ecosystem that supports the business plan and overcomes the local and global silo-attitude & don’t forget CLCs

Integrate contributors from regions and communities (regional centers)

Plan the 25% EIT contributions to catalyze activities that are not already anchored at the existing partners

Academia, innovation & industry: traditional model (Francis Bacon; 1561 – 1626)

LINEAR TECHNOLOGY EVOLUTION

Academic research

Appliedresearch &techno-logies

Basicresearch

Addedvalue

Academia, innovation & industry: the Californian model (Adam Smith; 1723 – 1790)

BRANCHED TECHNOLOGY EVOLUTION MODEL

Acad.research

Old technology(industry)

New technology(industry)

Added value

More than half of economic growth in the USA, 1945 – 2002 is attributed to innovation within the high-technology sector** Leary et al

2002