Boston Innovation Ecosystem – Role of Universities and Lessons for Russia

From Science to Business ForumSt. Petersburg, May 16, 2012

Daniel Satinsky, Esq.Partner, Russia Innovation Collaborative, LLC

Government Universities

Business

We Create Innovation Systems for Russia and Connect to International Best Practice

• Policies to promote & create innovation systems

• Action plans to achieve return on investment

• Promotion of Russian regions internationally to create foreign direct investment and promote Russian expertise globally

• Cooperative Exchanges with US universities

• Educational Programs on innovation, entrepreneurship and IP

• Open Innovation Systems

• Building Successful Companies through Incubators

• T2+2 Tech Commercialization Portal

InnovationCreation

• Open Innovation Programs

• Routes to international markets

• Market Entry Studies

• U.S. Representative Offices

Working across government, universities and business, we create innovation systems that generate real returns:

Boston as Center of Innovation

Over past 200 years, Boston has been one of most innovative cities in the world as site of innovations in industry, medical treatment and consumer goods, including:•Inoculation for Small Pox (1712)•Ready-made suit (1826)•Anesthesia for surgery (1846)•Alexander Graham Bell’s telephone (1876)•Gillette Safety Razor (1903)•First modern mutual fund (1924)•Polaroid instant camera (1947)•First kidney transplant (1954)•First vacuum tube computer at MIT (1945)

Cycles of Growth and Decline

• Economic history of growth, then decline as industries mature and existing innovation becomes obsolete.

• Great decline of manufacturing and stagnation of the economy in Massachusetts in period 1920’s to 1945.

• Decline again at end of 1970’s from defense spending cuts & decline of minicomputer industry in 1980’s.

• Revival began in 1990’s led by combination of highly educated workforce and leading universities, with supportive government policy.

• Deindustrialization followed by Knowledge-based economy

Knowledge Economy Thrives in Boston/Cambridge

• Most innovative city in the world in Innovation Cities Global Index for 2011 (www.2thinknow.com)

• Massachusetts #1 innovation state in Kauffman Foundation ranking.

• 2010 Boston hospitals, universities, medical schools and research institutions were awarded almost $2.1 Billion in National Institute of Health (NIH) research grants, top city for these competitive awards for 16 consecutive years.

• Percentage of jobs in hospitals + colleges – Boston: 21% & Cambridge 24%.

Today Boston/Cambridge is the Number 1 Biotech Cluster in the World

• More than 100 biotech companies in Kendall Square alone, including HQs of Genzyme, Biogen Idec & Millennium.

• R&D facilities for Amgen, Merck, Pfizer, Wyeth, Schering-Plough & Novartis.

• Massachusetts has the second largest concentration of medical device companies in U.S. (over 300 companies).

• Top 25 publically traded life sciences companies in Massachusetts doubled their annual sales revenues between 2002 & 2006.

• One in six working people employed in this sector.

• Biotech now employs around 30,000 workers in Massachusetts, growing at around 10% a year for a decade.

• Biotech accounts for 18% of the state’s venture-capital investment, 27% of its R&D spending, one sixth of its public companies, 10% of its market capitalization and produces 8% of the world’s pipeline of new medication

Kendall Square, Cambridge1970 and Today

Cluster Development:Biotech in Massachusetts Supports many

Sub Sectors

Source: Professor Michael E. Porter: Harvard Business School Texas Economic Summit San Antonio, TexasNovember 14, 2006

It’s not ju

st

BIOTECH!

Key Change Factors

• Government: clear regulation; infrastructure construction and tax supported economic development programs at state level.

• Success of local universities & research hospitals in obtaining Federal government funding.

• Highly educated work force.• Adaptation of manufacturing skills to new industries.• Reorientation of ecosystem around new tech sectors

and fostering startups.

Concept of Innovation Ecosystems

• Ecosystems began in ecology (interaction of plants, animals, soil, minerals, water… )

• Today, Ecosystems are communities together with their environment, functioning as a unit

• Innovation exists within ecosystems…..

Academic Excellence

Innovation Ecosystem

Venture Capital

Thriving knowledge based sectors

Tech transfer and commercialization Serial Entrepreneurs

Public and Seed Funding, grants and

loans

Institutional Components of an Innovation Ecosystems

Government / Policy

Industry Associations and

Networking Groups

What Makes a Successful Innovation Ecosystem?

• Ecosystems are not a collection of institutions.• Creating or supporting an Innovation ecosystem is not an end

in itself. It is a recognition of importance of historically evolved system for creating healthy economic growth.

• Heart of innovation ecosystem is the regular and constant interaction bringing together great science with entrepreneurs and established companies who can bring science to market as new products or services.

• Recognition of the importance of ecosystem is leading to purposeful policies to strengthen and expand innovation ecosystems.

Institutions for Collaboration:Innovative Clusters Require Networks

Source: Professor Michael E. Porter: Harvard Business School Texas Economic Summit San Antonio, TexasNovember 14, 2006

From Historical Evolution to Planned Activity by Universities

• Universities as catalysts for local & regional economies.• Key role of Technology Transfer Offices as intermediary

link for interaction with broader markets.• University support for stage of technology development

from idea to feasibility for license or new company. • Systematic training of both faculty and students in skills

of entrepreneurship.• Creating physical spaces for mixing of academic

disciplines and creating interdisciplinary teams to promote collaboration.

Russian Universities Leading for the Future – What Should be Done?

• Inventory local innovation ecosystem for strengths & weaknesses.

• Develop internal programs and lobby government to promote strengths & remedy weaknesses.

• Create as many as possible spaces and opportunities for regular interaction between all elements of innovation ecosystem.

• Develop resources & capabilities of TTO as market link for Russian and International markets.

• Develop broad programs of entrepreneurial education for students & faculty, involving local business, to create entrepreneurial human capital.

Working Together for Answers

The Russia Innovation Collaborative looks forward to working together with our Russian colleagues in adapting international best practices to Russian realities as part of

the historic task of transforming Russian national research universities into leaders of the new innovation

ecosphere.

Thank you for your attention.Daniel Satinsky

cbouthot@russiainnovation.comwww.russiainnovation.com