Beyond the Breakthrough: Álvaro Ossa

It may sound crazy that any government could try and reclaim project funding plus 5% from a spinout, but that is exactly the situation that Álvaro Ossa, the director of transfer and development at Pontificia Universidad Católica de Chile, has been facing. The lobbying effort to get the article removed from the law is ongoing, and this is one of the topics covered in this interview.

Ossa also tells us about why it’s important to attract local VC funding first before trying to raise from overseas investors – a lesson he learned the hard way – and how he created an online course on tech transfer in Spanish on Coursera that has attracted more than 11,000 students to date.

Ossa is also the author of ”Del Laboratorio al Mercado”, a book on technology transfer written in Spanish and filled with local experiences that was an Amazon bestseller at launch, and he tells us more about what inspired him to write this.

Subscribe

Transcript

Please note that the intro and outro have been omitted.

Álvaro, welcome to the podcast.

Hi Thierry, thank you very much for the invitation.

I look forward to the conversation. To start with, can you give me an overview of innovation at PUC with some headline figures?

Sure. Universidad Católica de Chile is one of Chile’s oldest universities and as well one of the most recognized educational institutions in Latin America. This has been ranked as the best university in Latin America by the QS World University Ranking and according to the latest version, that was the previous year’s, the Católica University was ranked 121 in the world. So, we have a high prestige as well. Our university has a school distributed though Santiago, the capital city of Chile, and as well we have one campus located in Southern Chile in a very amazing place. And as well, we probably cover all sites of studies from science to art, from medicine to law, engineering, architecture school as well who are known around the world. We have more than 30,000 students, more than 3,500 faculty members.

And as well, we have a very long tradition of public commitment. For example, some Chilean presidents have studied here and several ministers of the state have studied here too. So, it has always been involved in the public sphere. The tech transfer matters, 40 years ago, Universidad Católica registered the first patent.

Almost 20 years ago, the first startup based on science, Solex, was created. Regarding the intellectual property for example, the university received for seven consecutive years, the recognition by the Chilean government as an institution that patents the most in Chile. That is very strange because in general, the companies are who apply for patents in each country, but in our case, it is the university for the seven years. So, we have more than 1000 patent application, and we have already transferred more than 130 patents to the market.

Just finally, some of the figures. The previous year we achieved 21 transfer agreements. In total, we have more than 130 transfer agreements to this side to the market.

Quite some impressive numbers. As a follow up to that perhaps, what are the opportunities in your ecosystem?

Well, Chile and Latin America have a very novel innovation ecosystem and it is just developing now. So, in addition, public and private investment in science and technology is still very low. That is one of our big issues. So, for example, Chile’s domestic expenditure on R&D is expressed as a percentage of GDP has been 0.3%, just 0.3%. And that was more or less the same in the last decade. While in the US, it is around, more than 3%. The same in the UK.

So, we have a big challenge there. Anyway, we have high support from the government. So, around 60% of our investment in R&D came from the public funds. So, it is the second challenge. How the private sector could be more involved in that matter. That is one of our challenges. Well, on the other hand, our economy is based on natural resources exploitation. For example, the Chilean GDP is driven by minerals, even fruits, seafood, and probably have a very good wine market as well developing in Chile the last decade.

So, we face the challenge of developing new economy-based knowledge in education, in science and technology et cetera, that we are very good. That Chile has world classic scientists. So, we have a huge opportunity to do it.

Wine may be a more traditional economy, but I remember having Larry Loev from Ariel University on the podcast and he was telling me about how one of their innovations was wine barrels. So, you really can innovate anywhere.

Absolutely. In fact, we have many technologies related with the wine industry. Some of our technologies now are selling in Europe, actually. So yes, we could develop as well in the areas that we are very strong, like an economy.

When you do create spinouts, do they tend to stay in Chile or do they go elsewhere?

It depends. For example, we created two spinoffs previous year. One is called IC Innovations by an engineering professor called Daniel Hurtado. It is a startup that developed a mobile respiratory evaluation system for athletes. It is called CHASKI. As well we developed another spinoff called Illico Genetics, it is owned by professor of medicine, Alejandro Corvalán. It is a spinoff that developed an early detection test for gastric cancer.

So, currently we have more than 30 spinoff companies that have been born from results from Católica University or together. All together they are valued at more than $250m, and the previous year raising more than $10m in gross investment. So, we have quite interesting numbers.

Anyway, we are just started on that matters. The majority of our spinoffs start their business in Chile and few of them can move to other countries, but probably it is because we are as very novel in that matters and as well because Latin American in particular, together I mean, is a very good market to develop some of our technologies.

Do they raise money from domestic investors or do they look to overseas backers? I know for example, SoftBank has a big Latin American fund.

That is a very good question. Because at the beginning, when we started, our goal was to raise money from international investors, that was our role. So, we invested a lot of money to move our researchers to other markets, start to raise money, but we raised around zero donors. It was, we thought, a big problem.

That was because we understood that if some international investors wanted to invest in some technology, first he needed some local investor being bold, because it could be very strange if there is local money and good technologies, why does the local not invest in that type of technology. So, we changed our model and we started to raise money from local investors in the first round, and in the second one, we start to contact international investors.

So, for that reason, the majority of our venture capital or private investment is from Chile, and some of them, we start to raise money from other countries.

That makes sense. I can see how an American VC would not want to invest in a Chilean startup if the local investors have not put any money in it yet.

That is the point. In addition, the investors in general, in Chile, in Europe, in the United States, want to be close to the entrepreneurs. So, for that reason they are available to invest, but if the company moved to the new country, and we are available to do it, but of course not in the first round, probably in the second, in the third. So, that is other reason why we must raise money in the third round from the local investors.

You are also a founding member of the Network of Technological Managers of Chile. It is a relatively young organization. It was only founded in 2012. But what has the impact been so far?

The Network of Technological Managers has huge importance in Chile. That is because we are a very small country, we have close to 20 million people, and who are related to tech transfer, the technology managers, we are a very small group as well, so it is easy to have contact between each other. Probably all of them are in my mobile phone, because now it is very easy. So, for that reason, when we start to work together, we can make big change of support, big change that was happening in the country. For example, when the minister of science and technology started to discuss the creation of the new minister, we were part of that or even when the government change because we have a presidential system that we change our president every four years.

So, we need to start again with new policies, with new policy makers etc. So, part of our role as well was to try to maintain that policy. So, not just in Chile of course this type of network works in another country. In the UK, in fact, the association were in 20 years ago, something like this. So, we started 10 years later. Anyway, the impact is very high because we can share good practices. For example, we can influence in some public policy, and it is now easy to connect with the private sector as well because the private sector must knock just one door and know many, many different doors. I think that the relevance of these types of networks are very relevant or very useful for many countries, even for Chile.

How easy is it to find tech transfer practitioners in Chile?

Well, it is still very challenging to find tech transfer practitioners in Chile and in Latin America in general. This field, as you mentioned, is still quite new in our region. There are a few postgraduate programmes, for example, that focus on these topics. Moreover, tech transfer requires a good combination between people and technical skills. So, that is no easy to find in the market. So, it is not the same to transfer, for example, an education innovation than a biotech innovation. For that, we need people that understand the science and the different type of science, but at the same time, the capabilities to link with the industry, talk with the government.

So, must be a kind of dictionary and this type of practitioner must speak this different language. So that is not easy. However, in 2017 we created an annual programme called From University To Industry Summer School. This is a one-week summer course. It is organised by Católica University and the research office of the University of Cambridge. Every January, we carry out this programme in order to provide advanced training in subjects related to tech transfer, intellectual property, strategy, entrepreneurship, research collaboration, et cetera. And that is from Chileans and from Latin American people. So, this type of initiative helped to develop more practitioner related with the matters.

I may, just because you brought it up, jump ahead to another question I was going to ask you. You created an online course on tech transfer on Coursera, the first one in Spanish as well. Was that the same motivation behind this? Did you want to create more practitioners through that course?

Yes, that was an amazing project, Thierry, because we relate it with tech transfer in Chile from more than one decade. We know that we did not have the opportunity to participate in the formal training process, even more in Spanish because we do not have, or still now we have just a few alternatives. So, for that reason, I remember when they I was in the cafeteria or the place where we start the new ideas you know, we thought in order to create a massive programme, so for that reason, we called Coursera and we explained we want to create a massive programme in tech transfer and you know the answer they say? I do not know if I can say that. Anyway, I will tell you. They said, you know what MOOC means? MOOC means massive. So tech transfer is not a massive topic in the world, it’s more specific. Anyway, we explain to them the relevance of that.

And even more in Spanish, we did not have this type of programme.

Finally, they agreed to start and we developed very nice scores. It is very good and well rated. Now we have more than 11,000 students from different parts of the world. So, that is amazing. And through Coursera it is a free course, so everybody can take the course without paying. Anyway, if you want certification, you have to pay, I am not sure, but around $30. So, let me go back in general in Coursera they tool a percentage of the student payment for the certification, in our case it was more than 10%.

So, what does this mean? It means that people need this type of programme and they want to certify in this type of programme. So now Coursera are very happy with that. I am very happy as well, because we could give from Chile the offer, or the possibility to develop more that area that is still very new.

On that note, what could your international peers learn from Chile?

So, like I told you before. We do not have enough R&D funding. So, for that we must be very efficient in our resources. So, if we compare with the OECD countries, Chile spent a limited budget in science, technology. Nevertheless, we have been able to develop a top-level science. So, if we compare, for example, the quality of our research, there are many measures for that, for example, citations or others we are in the top of the rankings. So, we do not have so much money, but our results are very good.

So, we are very efficient in the use of the resources. Initially a strong trade strategy that began in the late 19th, the Chilean government at that time signed many trade agreements. So, Chile became one of the countries with the largest amount of trade agreements in the world. We are a very small market, or a small country with a small market, but we have agreements with many different countries, more than 60 or something like this.

So, in order to facilitate the relationship in that way. So, we are a small market, but we have connection, or easy connection, with the best of the developed countries in the world. Finally, we created 10 years ago more or less, Start-Up Chile is an iconic program in the country where entrepreneurs from all over the world were attracted to our country, giving financing, work visa, to develop their ventures in Chile. So that public policy had great impact to our entrepreneur ecosystem in Chile because we understand what entrepreneur means, how our entrepreneurs work, Chilean entrepreneurs want to be part of that. So, that was a very successful programme from Chile.

The government also created the Ministry of Science, Technology, Knowledge and Innovation a few years ago. What impact has this had?

Yeah, w8e are, of course, just in the middle of the process. Anyway, the government has been promoting the creation of tech transfer offices at Chilean universities during the last 10 years. In Chile, CORFO is the national innovation and entrepreneurship agency to support these matters and recently in Chile was created, like you said, the science and technology minister. So, in this way, we receive high support from the state to develop the tech transfer process. But of course, it is still insufficient, and we need more public and a private investment in R&D.

However, recently, the president Gabriel Boric announced that increased the science and technology budget to 1% of our national budget in the next three years. So, if it happens, it will represent a role of 300% with respect to the current budget. And of course, the creation of the Ministry of Science and Technology supports this type of policy. So, we are a small country, we have a small amount of investment in R&D, but we have huge, huge support from the government to develop innovation and the transfer.

Not to put you on the spot too much, but there was some controversy around the original article nine when the ministry was created. Can you tell me what this is about and what the situation is like currently?

Yes, that was a huge controversy. From my perspective, we have not got enough time to solve it because when some law is in discussion, we need to limit time because the previous government end, because policy situation happens, so we need to finish the discussion. From my perspective, what happened is we could not modify because we have not got time.

What was the problem? The article was originally in fact called number nine, we talk about article number nine, everywhere in Chile you know what that means, that if a project is financed by the public resources, but in the earliest stage of development, it means basic science, okay, it must return the funding to the government, plus 5% to the state, if the technology will have success in the future. So, if it has success, must return how the state invest and plus 5%.

So, if someone does not know very well about that matter could make sense, because if someone give you money, you are success, you must give back the money that could be said. But where’s the problem, Thierry? The problem is that it is related just with investment in the earliest stage of the research. The problem is that it’s related just with investment in the earliest stage of the research. And while related with that matters, we know that that stage is support by the government. It’s impossible. The international experience said that just the state invest in that very early stage, the private sector never, never will invest in the early stage because it’s high risk technology and commercial risk. So that is the role of the state.

For that reason, it’s crazy to think that if you will have success, you must give back the money for a couple of reasons. First, because it is very difficult to track the project event. If somebody were to give back the money, which money? To whom? In the pay day, that is impossible basically to do it. And the second, because in that early stage, like I told you before, it is part of the role of the state. So, the commitment is to change that article. I am sure that probably in the next year we could modify and fix it.

When I was researching for this interview and I came across the law, I obviously looked it up and then article nine said something else. So, I thought it had been crossed off. And obviously I think it is article 25 now. It is crazy. So, I am glad to hear you are still working on this.

In happier news though, you are also the author of a tech transfer book, Del Laboratorio al Mercado. Can you tell me more about this, how it came together and what prompted you to write it?

You know, I am an engineer. Do you know how hard it was for me to write a book? That was a sign similar, that set an inspiration. So it was, for me in particular, it was very hard to find some literature about tech transfer. Not just in Spanish, because now you can translate everything. But with the local experience, Chile, Latin America, help to connect with other countries. So, as well, I had the opportunity to visit different tech transfer offices in Latin America, in Europe, in United States, even in New Zealand, I used to live in New Zealand.

So, I could research the key for successful tech transfer. So, for that I decided to start to write a book. I spent more than four years writing that. I am very clear because I started when my first daughter was born, the same year, and I finished when my second daughter was two years. So, I am very clear when I started and when I finish. After that I worked with a publisher for around one year. So that book talks about, of course, IP, tech transfer, entrepreneurship, how to manage a tech transfer office from Chile, from Latin America to other countries.

It is written in Spanish until now we will have probably have news, current news in a few weeks more, but until now it is Spanish, and includes as well, many successful cases from Latin America. And that is very interesting because in general, when we talk about tech transfer and successful cases, in general, we know the Gatorade experience, cherry tomato, and et cetera, more famous experiences.

That book talks about local experience and very subtle local experience. So, the book was a bestseller on Amazon when we launched it, even in Chile, so was amazing. So many people are interested in that and was a bestseller when we launched it. So it was a bestseller not because the book was good because nobody had read the book before. It was because the people were interested in how science and technology could improve our quality of life and help to manage that. So, I am very happy with that experiment and it’s very successful in Latin America.

How fantastic. My Spanish is not quite good enough, I fear, to follow a whole book. So, I look forward to it being available in English. I have already got Tom Hockaday’s book on the shelf here behind me, as you can see, so I can put yours right next to it.

Sure. When I was finished, in fact, the book was in the publisher, I participated in the launch of the Tom Hockaday book. So, it was a good inspiration to accelerate the process of my work.

You have been at PUC since 2011. You previously worked at the Instituto 3IE, the incubator of Universidad Técnica Federico Santa María, you were a professor during your time with Universidad Santa María. How did you end up in tech transfer? What made you join PUC?

So probably, such as many of us that we’re involved in innovation, tech transfer, was just opportunity. So, my point is when I was in high school, I did not see that I want to work in innovation. And even when I was at the university, I decided to move to the innovation. I just arrived to the innovation area. Anyway, I started my professional life in an incubator in Chile, in one of the most successful Chilean incubators. And after that at Católica University it started to find someone who could create the tech transfer office inside of the university. So, that was amazing challenge. I wanted to be part probably with my experience, I thought with my experience I could help on it.

So, I applied for the position and a couple of months later, I started to work at Católica University. So, I moved from one university to another very good university as well. And you know what was one of the key reasons that I decide to always start in UC, and it is part of my book as well? It is because the president of the university was absolutely convinced that innovation and transfer were necessary, was important for the future of the university.

Because if not, it is very hard to work in a very high-risk activity like innovation. So, that probably finish to convince me that that was the place that I wanted start to work. And so now that was more than 10 years ago. Until now I am very happy because I know just to move the university up the ranking in innovation, patents, tech transfer as well, I could contribute to mobilize the other universities and even the country in order to go to the follow level. Even I participated in the discussion of the creation of the Ministry of Science, for example, the discussion of the IP law that was some modification of the law presently. So, from that position, I could as well contribute to develop the ecosystem around the country.

What advice would you give to someone starting out in this career today?

ÁO: Two advice. One, it is very important to develop skills on that matter. So, that is necessary. Currently we have more opportunities, more offer around the world, free courses, books, formal courses as well, masters degree, diploma, many. So, develop skill, prepare, that is really important. And secondly is make relationships. So, tech traffic is basically relationship support. You need to meet others. You need to know others. You need to have the opportunity to pick up the phone, texting other, relationships. So, it is important to participate to international conference, for example, different congress, spend time in another place, some internship, I do not know, there are many ways, but my point is one, develop skills, technical skills. Second, relationships.

If you had a magic wand, what would you change?

Like Harry Potter?

Yes, like Harry Potter.

Now, a couple of things. First more administrative things if you want. I would like to modify the patent application process. From my perspective, it must be easier, cheaper. Now it is very, you need to know about one patent. You need support from a lawyer to apply one patent. So, it is very hard for entrepreneur, for example, to do it alone. Basically, it is impossible. So, I know that in the last year now it is changed and now it is easier. It is cheaper as well. Anyway, I would like to modify that makes it simple. That could be my first action. And the second I would like to modify the mind of many policy makers in order to make them understand the relevance of the innovation, particularly for the undeveloped or developing countries, poor countries, developing countries must invest in innovation if they want to move to become a developed country. Wrongly people think that they cannot invest because they are poor. The problem is the countries are poor because they do not invest in R&D. So, I would like to modify the mindset of the policymaker.

I have a feeling a lot of people would share that wish. You have already mentioned a few spinouts during our conversation, but I would just give you another chance to mention any you may have in your notes because obviously I had a specific question about this.

Sure. We have some examples of UC Chile startups or spinoff. One is called, for example, Zippedi. Zippedi is the first Chilean robot using artificial intelligence. It was designed to verify that there are never any mistakes in the order or prices of products displayed in the stores. So Zippedi zips around the aisles of the supermarket and retail stores independently, performing tasks that are typical in the industry, such as ordering produce and checking prices, for example. Last February, it raised $15m in investment funds and now is valued at more than $100m. So, it is one of our successful cases.

Anyway, we have others. For example, one from other area, from the medicine school, is called GeneProDX. The company develops tests that are available to detect more presently whether the thyroid nodules are benign or malign and avoid a large number of unnecessary thyroid removals. So, this invention consists of a genetic signature that can predict with 97% of certainty whether a nodule is benign or malign. That is amazing because it can prevent that unnecessary surgeries that now are happening worldwide.

Finally, I wanted to talk about Sirve. Sirve was one of our first spinoffs we created 15 years ago or more. It is a technology that developed a solution related with earthquake resistant devices. Chile and the Pacific coast were exposed to earthquakes all the time. So, that company developed an innovative earthquake resistant solution to further the industrial funds. For example, they have device solution to announce the performance of a structure when hit by earthquake and to mitigate the huge material, human damage of course caused by the earthquake. Not just in Chile, even in New Zealand, Peru, and other parts of the world.

A very broad array of companies there. Fantastic. We are almost out of time sadly. Is there anything else you want people to know?

A message that I would like to share with others, Latin America probably is one of the most prosperous regions in tech transfer. I am sure that in the next 10 years, the history will be other. So, we will show huge successful cases because we are working very hard from more than one decade. So, it is a good place to visit, to know, to view in order to understand what happens. I really expect that we could change the world from that part of the planet.

I look forward to keeping an eye on Latin America. Álvaro, it has been a real pleasure speaking with you and learning more about Chile. Thank you so much for joining me today.

Thank you, Thierry. I have really enjoyed the conversation today.