Transcript Galvanizing the Next Era of Breakthrough Innovation

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the center foradvancing innovation
INNOVATION
ANDJuly
IP6,BUSINESS
SUMMIT
Discussion Document:
2009
GALVANIZING THE NEXT ERA OF BREAKTHROUGH INNOVATION
By: Rosemarie Truman, Founder and CEO, The Center for Advancing Innovation INC.
April 30th, 2015
Contents
The Innovation Arms Race
Opportunity
Case Study
Proposal
2
THE INNOVATION ARMS RACE
3
US patents
Current State USPTO: Lost leadership position in 2007 and 2008 to foreign inventors
US Patenting by Origin (1963-2010)
1989 Utility Patents Issued
300,000
2007 Foreign Based
Apps >50%
No. Patents
250,000
200,000
US
Origin
53%
2008 Foreign Based
Issued >50%
150,000
2009 Utility Patents Issued
100,000
US
Origin
49%
50,000
Foreign
Origin
51%
2007
2003
1999
1995
1991
1987
1983
1979
1975
1971
1967
1963
0
4
Foreign
Origin
47%
U.S. Utility Patent Applications
Foreign Patent Applications
U.S. Utility Patent Grants
Foreign Utility Patent Grants
Source: USPTO Patent, Technology Monitoring Team
and The Center for Advancing Innovation Analysis
*The primary regions for patent filing are the US,
Europe and Japan, but the USPTO had the most
complete data sets
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US patents
In the USPTO, growth is driven by foreign countries
Growth of USPTO Patent
Applications (1996-2009)
28.9
26.5
India
China
China
S. Korea
14.2
Brazil
9.4
30.0
India
Singapore
16.1
Growth of USPTO Patents
Issued (1996-2009)
25.6
22.9
S. Korea
14.6
Singapore
13.1
Russia
4.1
Canada
3.9
6.7
Canada
6.5
EU
Brazil
3.9
5.9
US
Japan
3.4
5.8
Japan
US
2.3
5.7
Russia
EU
2.1
20.0
10.0
0.0
% Growth Rate (13-Yr)
0.0
10.0
20.0
30.0
% Growth Rate (13-Yr)
Source: USPTO Patent and Technology Monitoring Team, and The Center for Advancing Innovation Analysis
5
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US patents
China will have the largest share of US patents by 2031
2009 Patent Applications
Other
25%
China
2%
2009 Patents Issued
India
1%
S. Korea
5%
S. Korea
6%
Forecast 2031 Patent Applications
India
10%
US
53%
US
49%
Japan
18%
S. Korea
7%
China
1%
Other
3%
Other
8%
Japan
5%
China
57%
US
13%
EU
14%
Japan
23%
Forecast 2031 Patents Issued
Japan
7%
India
6%
Other
1%
US
12%
S. Korea
12%
China
59%
EU
3%
Sources: The Center for Advancing Innovation Model, USPTO Patent and Technology Monitoring Team
*forecast based on data 1996-2009
6
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Global patents
Global forecasts predict similar trends: lost leadership position in 2014
CAGR Forecast Patent Applications
(based on 1996-2009)
CAGR Forecast Patents Issued
(based on 1996-2009)
Patent Applications
1200000
20
900000
China
(surpassed the
US in 2014)
10
0
2009
800000
700000
2031
1000000
US
800000
600000
Millions Patent
Grants
1400000
1000000
30
Patent Grants
Millions Patent…
1600000
30
20
China (surpassed
the US in 2014)
10
0
2009
2031
600000
500000
US
400000
300000
400000
200000
200000
100000
0
0
2009
EU
India
2016
Japan
2021
2026
S. Korea
2009
2031
US
EU
2016
India
Japan
2021
2026
S. Korea
2031
US
Sources: CAI Analysis Model, WIPO
7
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Global patents
This is an ongoing trend….as the US has had patent effectiveness declining
Patenting Effectiveness by Region
(Averaged in 3-Year Bins, 1998-2010)
Region
1.40
Patent Effectiveness
1.20
US
1.00
China
0.60
S. Korea
Russia
0.80
India
US
Japan
Brazil
0.40
Russia
0.20
EU
0.00
1998
2001
2004
2007
2010
US
China
S. Korea
India
Japan
Brazil
Russia
EU
%CAGR
(’96-’09)
%AAGR
(‘96-’09)
-3%
-2%
6%
8%
1%
0%
0%
1%
-1%
7%
18%
1%
5%
27%
3%
-1%
Sources: The Center for Advancing Innovation Analysis Model and WIPO
Patent Database
Effectiveness is the ratio of patent grants to applications, averaged over 3year periods to account for processing lag
8
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Global R&D
In addition, R&D forecasts show China will surpass the US by 2019
CAGR Forecast of GERDII Expenditure
(based on UNESCO 1996-2009)
3,500
3,000
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2009 RE Top 5:
China
RE ($Billions, PPP1)
Brazil
Canada
2,500
China
2,000
India
2019
1.
2.
3.
4.
5.
US
EU
Japan
China
S. Korea
Japan
1,500
2031 RE Top 5:
Russia
S. Korea
1,000
500
US
EU
1.
2.
3.
4.
5.
Singapore
US
EU
China
US
EU
Japan
S. Korea
2009
2011
2013
2015
2017
2019
2021
2023
2025
2027
2029
2031
-
Sources: CAI Analysis Model, UNESCO Institute for Statistics
1PPP: purchasing power parity (PPP) asks how much money would be needed to purchase the same goods and
services in two different countries
II Gross Expenditure on R&D
9
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Global GDP
So What? China’s GDP will surpass the US by 2024
CAGR Real GDP Forecast Applied to Nominal GDP
(based on 1996-2009 World Bank)
$40,000
$35,000
China
2024
$30,000
Singapore
GDP (Billions)
United States
Japan
$25,000
US
$20,000
South Korea
Canada
EU
$15,000
GDP Growth Rate
US = 2.32%
China = 9.25%
Russia
Brazil
India
$10,000
EU
China
$5,000
2009
2011
2013
2015
2017
2019
2021
2023
2025
2027
2029
2031
$0
10
1PPP: purchasing
power parity (PPP) asks how much
money would be needed to purchase the same goods
and services in two different countries
Sources: CAI Analysis Model, UNESCO Institute for Statistics,
World Bank GDP Estimates
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Global RETURN ON INNOVATION
Globally, return on innovation is declining; the US is not declining as fast!
CAGR Real GDP (Applied to Nominal) Forecast /
CAGR GERD Forecast
(based on 1996-2009 World Bank, UNESCO)
GERD CAGR
90
Country
80
US
Brazil
China
70
CAGR
‘04-’09
2.6%
6.5%
China
Russia
2.6%
9.4%
India
Canada
2.1%
6.2%
Japan
US
1.3%
0.04%
Russia
EU
1.0%
0.93%
S. Korea Brazil
-0.9%
11.3%
Singapor Japan
e
US
S. Korea
-2.1%
-1.5%
-2.8%
-4.0%
EU
China
-2.9%
6.9%
Singapore
-4.3%
2.6%
50
40
30
20
10
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0
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
GDP / RE
60
Canada India
CAGR
‘02-’09
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11
Sources: CAI Analysis Model,
UNESCO Institute for Statistics,
World Bank GDP Estimates
THE $1.5 TRILLION DOLLAR OPPORTUNITY
12
PROBLEM: identifying/finding the best inventions and furthering R&D
Federally
Funded
Research
Invention
Disclosed and
Inability to
Potentially
Find and Fund
Patented
Promising
Inventions
Licensed
Move to translational research
More funding in lab; science continues
No funding in lab to continue
Withdrawn/terminated license
Terminated by inventor
Product
Translational Research,<.1%
13
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OPPORTUNITY: At present, there are 125,000 from the top 145 institutions
3000
12-74
Additional
Inventions
2619
2500
96%
2000
114/Federal
Lab
915
804
27%
42%
40%
458
500
20%
132 12%
122
0
0%
Federal Labs
14
1150
31%
# of
Institutions
80%
60%
55%
Segment
100%
79%
1500
1000
120%
7-25
Additional
Inventions
% of Disclosures Removed from Shelf
Additional Disclosures Removed from Shelf
Yearly Additional Disclosures Removed from Shelf by Segment –
Best-in-Class Performance
(% Removed from Shelf)
Top Hospitals
Top Med Schools Top Universities Bottom Hospitals
Bottom Med
Schools
Bottom
Universities
Federal Labs
Top Hospitals
Top Med Schools
Top Universities
Bottom Hospitals
Bottom Med
Schools
Bottom
Universities
8
5
35
3
16
41
45
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There is ENORMOUS head room in Universities and Federal Labs (Best in Class)…
Current Universities vs. BIC
Potential (AUTM 2002-2009)
15
License Income
Patent Applications
Key Insight
US universities and federal labs
have >500% potential growth in at
every stage of commercialization
Patents Issued
License Income
Patent Applications
Patents Issued
Invention Disclosures
Licenses & Options +
Startups
Current
State
Invention Disclosures
Potential
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Licenses & Options +
Startups
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Current Federal Labs vs. BIC
(NSF/NIST 2002-2009)
Sources: CAI Analysis Model, NIST, NSF, AUTM Survey 20022009
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…even if we had all Universities and Federal Labs performing at average levels
Current Universities Potential
vs. Average
(AUTM 2002-2009)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
90%
80%
Potential
70%
60%
50%
40%
30%
Key Insight
US universities can still improve by
at least 25%, while federal labs
have >80% potential growth in
every stage of commercialization
20%
License Income
Patent
Applications
Patents Issued
0%
Invention
Disclosures
10%
Licenses &
Options +…
License Income
Patent Applications
Patents Issued
Current
State
Invention Disclosures
Licenses & Options +
Startups
16
Current Federal Labs Potential
vs. Average
(NSF/NIST 2002-2009)
100%
Sources: The Center for Advancing Innovation Analysis Model,
NIST, NSF, AUTM Survey 2002-2009
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CASE IN POINT: Maryland
Capitalizing on innovation
Washington-area universities have lagged in spinning out research to the
private sector. They face an uphill climb in competing with the Stanfords
of the tech transfer world but vow to be more entrepreneurial.
Washington Business Journal by Michael Neibauer, Staff Reporter
December 7th
USM
• RE: $1 billion
• # startups: 6
• Licensing Income: $1.3
million (steadily
declining from $1.7
million)
The slow slog to tech transfer
……
Things haven’t gotten much better. Reporter Michael Neibauer spent a few
months kicking the tires on the tech transfer operations at local campuses
and found that we have a long way to go before these places become
innovation engines for the private sector
Washington Business Journal by Robert J. Terry, Managing Editor
Date: Friday, December 14
17
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Opportunity at stake – just in the US - $1.5 Trillion in GDP
Dimension
GDP
# Licenses
Dimension
GDP
# Licenses
Dimension
GDP
#Licenses
Current Universities Potential
Current State (2009) Opportunity
$49,068,748,297
% Difference
$864,230,818,581
1661%
3922
43885
Current Federal Laboratories Potential
1019%
Current State (2009)
$4,056,551,354
Opportunity
$623,614,223,359
1462
31667
Cumulative Potential
Current State (2009)
Opportunity
% Difference
15273%
2066%
% Difference
$53,125,299,651
$1,487,845,041,940
2701%
5384
75551
1303%
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Sources: CAI Analysis Model, NIST, NSF, AUTM Survey 2002-2009
18
VALUE AT STAKE: THE US ECONOMY
6% Inventions
19
*.08% of those available out of the
120,000 available from 145 institutions
$500 billion to $1.5 trillion
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CASE STUDY
20
Looking for Growth Breakthroughs at the NIH – Assessing Commercial Viability
CAI’s Operational Model for Revenue Growth
H3: Make a Market
Industry
Expansion
Value
Chain
Expansion
New /
Improved
Products/
Services
Horizon 3 (H3): Make a Market
DRIVE PROFIT, REVENUE, SHAREHOLDER VALUE
• Create new market – customer, product/ service,
operational model, business model
Horizon 3 (H3): New Market:
“DRIVE PROFIT AND REVENUE”
• Build on core capabilities to enter new markets
H3: Enter New Market
Business
Model
Expansion
H2:Current Market
H1:Tactics
Extend Base
Geographic
Expansion
Channel Expansion
Horizon 2 (H2): Current Market:
“DRIVE PROFIT OR REVENUE”
• Build on core capabilities, customer access,
products/services, business and operational
models to drive scale across the enterprise
Horizon 1 (H1): Tactics:
“PROTECT THE PRESENT”
• Incremental, Tactical, Optimized Growth
• Foundational Independent Capabilities
• Client Account Management, Lean Sigma etc.
“Corporate Center Strategy”
21
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Part 1 of the Story: Found ~50 inventions that were commercially viable
Gather Demand Data
Mature
Company
Needs
NCI
Inventions
Synthesize
Short-List
Assess
Inventions
MATCH NCI
Commercially
Viable
Inventions
with Demand
Priority
R&D
Short List
Market
Opportunity
22
Commerci
ally
Viable
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High
DEF
Value Capture Business Resiliency
5
Attractiveness
Universe of NCI
Patents
4
Valuenet Integration
ABC
Infra
for Packaged Apps
Pervasive
ABC
Networks
Opportunity Siz
$ 25 B in 05
$ 12 B
Risk-Compliance
3
Security
BI
Retail Bank of the
ABC
Future
M&A
Opportunity Matur
Life Sciences
2
Value Chain
Digital Media
Assetizing
ITSABC
Services
1
1
Low
Difficult to Execute
2
Near Term: 1–2 Y
Long Term: 3–5 Y
XYZServices
Web
Health Delivery
3
4
Ability to Execute
5
Easy to Execute
*Analysis indicated low variability across opportunities dimensions including Sustainability, Adoption Rate. These criteria have been removed.
More
R&D
Discont
inue
Part II of the Story: 56 commercially viable inventions. No match between large
pharma strategic requirements and inventions
10 years of Avon
Foundation grantee
inventions
Evaluated thousands
of NCI patents
Found 56 Commercially Viable Inventions
Evaluated potential match between great inventions and biotech/pharma demand
NO MATCH BETWEEN PHARMA COMMERCIALIZATION PRACTICES AND INVENTIONS
Opportunity
Launch the first ever business plan and start-up challenge with a sole
purpose of creating viable start-ups to impact public health
23
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Challenge Phases: Very high bars in each phase
Planning
10
Inventions
Phase 1:
Letter of Intent
10 Teams for
Each Invention
Invention 1
Phase 2:
Business Plan
Phase 3:
Startup
3 Teams per
3 Startups for Each
Invention Go to Ph3
Invention
Post-Contest
“Startup
Winner”
Has Licensing
Agreement and
Seed Funding
Invention 1
CAI Start-up Mentoring/Curriculum and Brain Storming/Q&A with Inventors
24
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*Current companies excluded; most provide guidelines but discourage retail, consulting and Franchises
Differentiators: Deliberately structured to deliver a
ACCELERATE and CREATE A HIGH PROBABILITY OF SUCCESS
1. Systematic invention selection
2. Mandatory cross-disciplinary teams
3. BOTH business plan and start-up
4. Rigorous training
5. New model for foundation funding – more bang for the buck
TANGIBLE RESULTS WITHIN 12 MONTHS; EVERYONE WINS
25
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Other Statistics for the Breast Cancer Startup Challenge
Entries:
Out of 200 teams interested, 46 teams made it in (468 people, ~10 people per team)
Team Strength:
4356 years of experience ~100 years per team
University Diversity:
83 universities participated on teams
Geographic diversity:
20% of the people participating were from outside the US
Winners:
30% of the winners were from outside the US
26
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BCSC is now the largest in the world based on participation and team size
Status
Quote
Rice
“Super Bowl and World Series
Combined – the World’s Richest
and Largest Business Plan
Competition” CNN and Fortune
Our Challenge
“We are looking forward to start-ups launching
around these inventions to accelerate research
and break the mold of how research is funded,”
Marc Hurlbert, Ph.D. executive director, Avon
Foundation for Women
13
2
# of Years
Running
Teams In
Team Members
Seed Funding
42
126, ~3 per team
$1.5 million
46
478, ~10 per team
$1.5 million (SO FAR)
# of Sponsors
145
1 monetary; 1 non-monetary; others
Most Inventions Technology oriented – selected
by student
Breast Cancer
Deliverables
Business Plan, Pitch and Elevator Speech as well as
Launch Startup, Licensing Agreement and Seed
Funding Applications
27
Business Plan, Pitch and
Elevator Speech
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Why did Avon Foundation support the Breast Cancer Startup Challenge?
Benefits of Challenge
Avon Foundation:
• Innovative, efficient
model of venture
philanthropy, with
the equivalent of
one investment,
push forward 10
inventions
• Impact mission with
multiplier effect –
raising awareness to
breast cancer issues
• Network expansion
– AUTM, BIO, White
House, etc.
• Reputational
benefits – innovative
model, media etc.
28
Other Side Effects:
• Train 277 new entrepreneurs
• Create 11 startups and 38 jobs
• Eventually: Contribute to GDP
through new products
BENEFITS
CAI: - Drive high growth business by:
• Accelerating and increasing the
volume of commercializing promising
inventions to create out-sized benefit
HHS/NIH:
• Multiplier effect in
impacting public
health
• Supports the
Presidential
Memorandum and
Startup America
• New paradigm of
commercializing
inventions
• Reputational benefits
– NIH innovator
• Network expansion
• New platform to
train the next
generation of
scientists
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THE REAL RESULTS – 11 STARTUPS! 9 logos below
29
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We exceeded expectations!
30
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VALUE AT STAKE: THE US ECONOMY
6% Inventions
$500 billion to $1.5 trillion
10 challenge
inventions
$24 to $50 billion
100 inventions*
$500 billion
With 10 challenges with 10 inventions each (100), there’s a chance
to successfully commercialize 10 inventions
31
*.08% of those available out of the
120,000 available from 145 institutions
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PROPOSAL
32
Consider this…
Twitter, iPhone, Facebook, Netflix all share one thing in common…
….they didn’t exist in the year 2000
Nearly 60% of Apple’s revenue is coming from…
….products that didn’t exist 3 years ago
Over the last 25 years, nearly ALL
net new jobs have come from firms
less than 5 years old, Friedman
Alumnae from one university has launched > 25K firms
Employing 3.3 million people and generating $2 Trillion
High value products come from the intersection of design and STEM multi-disciplinary talent.
IBM’s CEO survey found that creativity is an employee’s most important asset
33
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BIG PICTURE
Opportunity
Determine strategies to maximize
companies’ commercial potential
Derisk new startups
through non-dilutive
funding, accelerators
and go/no-go decisions
Create/nurture 100 of
the Best Startups
Drive Ideation
and identify
commercially
viable
inventions and
High Impact
Companies
•
•
Region is recognized as
a national leader in
transforming economic
development
•
•
OUTSIZED IMPACT ON RESEARCH
INSTITUTE MISSION
NEW JOBS, STARTUPS: ECONOMIC
DEVELOPMENT
ENTREPRENEURIAL PLATFORM
INNOVATION ECOSYSTEM
Thousands of new
jobs created
34
SUSTAINABLE
Round 2 non
dilutive
funding for the
best startups –
entrepreneurs
are whole!
Accelerator
mentoring and
go/no-go
decisions
VC, PE and
Corporate Funding
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GALVANIZING THE NEXT ERA OF GROWTH BREAKTHROUGH INNOVATION
IDENTIFY GROWTH
BREAKTHROUGHS
Part A: Invention and Startup
Selection
O
Short-list
the P
• Systematic
Due
P
most
Diligence
and
O
R
commercially
Portfolio
T
viable
U
Selection
N
inventions
• INSIGHT
I
and startups T
MAXIMIZE
COMMERCIAL
SUCCESS
Realize the Value
LAUNCH/
NURTURE
STARTUPS
Part B: Bifurcated Challenge
• Crowd Source
• Lean Startups
• Entrepreneur
Training
• Accelerator
Optimizes/Accelerates
New Startups based
• Fund
on Inventions
• Apprenticeship model
ANALYSIS
I
Existing Startups
E
S
Elevator
Speech
Phase
Business
Plan
Phase
Startup
Phase
QuikScan Investigation Transfer
DCP
DCP
DCP
35
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