Australia
Australia is one of the most exciting regions in the world for technology transfer at present. This isn’t due to a well-established system like those in Europe or the US, nor is it for mega companies coming out from the country. It’s more due to the fact that technology transfer in Australia, a country with six universities in the top 100 of Times Higher Education’s World Reputation Rankings, is only recently beginning to come into its own.
As Matt Barrie, the CEO of Australia-based startup Freelancer.com, put it in a GUV guest comment last year: “With our population of 22 million and labour force of 12 million, there’s no other industry that can deliver long-term productivity and wealth multipliers like technology. Today our economy is hailed by our Prime Minister, Julia Gillard, as a “miracle”, but the reality is it’s in the Stone Age. Our gross domestic product (GDP) of A$1.6 trillion is 69% services but our “economic miracle” of GDP growth comes from digging rocks out of the ground (mining 19%), shipping the by-products of dead fossils (natural resources 5%), and stuff we grow (agriculture 3%). This is great while commodity prices are going up and we still have stuff left in the ground to dig up, and people still want to buy it.”
Barrie’s thoughts on the Australian economy would appear to be mirrored by many entrepreneurs and universities in the country looking to transform Australian knowledge into Australian dollars. However, there are numerous hurdles for the country to overcome before it can transform its resource-based economy into one that fosters high-tech innovation.
First and foremost is people to drive the innovation. While Australia is increasingly a high cost society which has seen numerous reports stating that the country’s future is in the hands of technological innovation, science, technology, engineering, and mathematics (STEM) graduates have been dwindling down under. The percentage of students enrolled in STEM subjects is down across the board, and has been hampered by a capacity gap due to a lack of teachers capable of educating in STEM areas. At university level, Barrie reports that of the 12,000 ICT graduates per year in Australia, two thirds are international students looking to take advantage of Australia’s strong academic output before returning home.
To counteract the imbalance, Australia has launched the Science and Technology Education Leveraging Relevance (STELR) programme. While it is early days for the programme, which has trained extra teachers and seen increased retention rates in schools, it seems to be delivering results, and is being replicated in Singapore, New Zealand, and Malaysia.
Another obstacle for Australian innovation comes in the form of the country’s lukewarm venture capital community. As Barrie noted: “According to the Australian Private Equity and Venture Capital Association’s 2012 Yearbook, the country has the lowest active number of VC managers doing deals compared to any time in the last 10 years. In the entire of 2012, outside of renewable energy, only A$40m was raised by three venture capitalists for new funds. This A$40m was half of 2011, which in turn was half of 2010’s total.”
This lack of venture action has also knocked on to Australian exits, with total exits for 2012 down 72% to A$28m from 14 companies.
To revert this trend, Australia must do what it can to bring the investors back into the country, and it seems to be making those first tentative steps in the right direction. The government has launched a $350m innovation investment fund to be spread over 14 years, offering up $25m a year to stimulate the commercialisation of Australian R&D.
Incubators are also springing up around Australian universities with a passion. Incubate, the subject of this month’s spotlight piece, has begun a national expansion. Starting at Sydney University, the accelerator, launched in 2012, has gone on to attract Google as a partner to provide financial and mentorship support, and has begun offering its programme at Adelaide. The University of the Sunshine Coast’s Innovation Centre also attracted international attention when it made the University Business Incubator (UBI) Index’s top 5 university incubators last year. Newcastle University is also hoping to put the Aussie coal town on the map with its new incubator, Slingshot.
Australian spin-outs are also showing their ability to edge into international markets. Hatchtech, a spin-out from Melbourne, recently landed $12m for a head lice treatment which is heading for the US. Similarly, life sciences spin-out of the University of Western Australia Iceutica recently got the nod from the Food and Drug Administration in the US for its anti-inflammatory drugs.
So while Australia may be a long way from being the tech paradise some would like to see it become, it would seem the winds are changing down under. Whether it can capitalise on this early momentum is a question to be answered throughout 2014 and beyond.
Israel
On paper, a cursory glance at Israel would have some overlook the country as a leader in innovation. Israel has little to no natural resources, is surrounded by enemies, and it has been involved in one conflict or another since the state emerged from the ashes of World War II. At just over eight million citizens, the country has a population comparable to Tajikistan, and has a grand total of nine universities conducting research.
And yet, despite all these disadvantages, the country has a thirst for innovation and startup generation comparable to another country of similar population size, Switzerland. News provider The Economist has noted that Israel has more high-tech startups and venture capital investment per capita than any country in the world.
So what’s driving this innovation? In the 2009 book Start-up Nation: The Story of Israel’s Economic Miracle, the authors’ conclude that Israel’s entrepreneurial spirit stems from two major sources – its mandatory service in the Israeli Defence Force (IDF), and the country’s immigrant background.
The influence of immigration is easy to understand. Both the US and the UK are countries that are built on diversity – even the English language itself a melting pot of settlers, immigrants, and invaders finding a home in Great Britain. Harnessing this same pool of international talent and knowledge that flowed into Israel over the past 60 plus years has been a key driver for innovation, and is far more integral to the makeup of the nation than either the US or the UK. In Israel, nine out of ten Jewish Israelis are immigrants or first or second generation decedents of immigrants. While this wave has caused plenty of well-documented friction in the middle-east, it has also spawned several generations of Israelis not averse to risk and starting from scratch.
The IDF isn’t as plain to see as a force for innovation, but Start-up Nation argues otherwise. The book says that IDF not only provides Israelis with army experience, but also technology-based skillsets and a wide array of contacts. This is underlined by a unique culture within the IDF where there is minimal guidance from the top, and junior officers are encouraged to call out higher ranking officers when they see them doing something wrong.
Israel’s universities have also provided substantial firepower to Israeli innovation. All nine of Israel’s universities operate a tech transfer office (TTO), even the Open University of Israel (OUI), modelled on the UK’s distance learning institution the Open University – which despite being rated as a moderate research institution fails to commercialise much in the way of its research nor does it encourage entrepreneurialism like its Israeli cousin.
The TTOs also take a proactive stance in weaving themselves i
nto other parts of the Israeli innovation ecosystem. The universities have adopted a tech transfer style similar to the US, with TTO professionals “working full time to tap into Israeli VCs, entrepreneurs, multinationals, seek innovation stemming from academia, and partner with programmes from the Office of Chief Scientists,” according to Saul Reichman, executive vice president of investor the Challenge Fund.
Israel is also home to Yeda Research and Development – the tech transfer office of the Weizmann Institute for Science and a leading example of effective technology transfer. One of the top performing TTOs in the world – earning $50-$100m per annum – the TTO takes a different approach to translating research to most of its peers. In a rare interview with news provider Globes, Amir Zaiberg, Yeda’s CEO, said: “We haven’t been tempted by alternative models, such as raising a venture capital fund to support our ventures in-house, or to set up a group of companies and float them on the Tel Aviv Stock Exchange (TASE).”
Instead, the company is relying solely on a royalties-only approach. Not even taking an equity position in a company, the TTO prefers the royalties approach as its share will never be diluted and Yeda has less to lose should a company fold. However, it is an approach that could be criticised as Yeda resting on its laurels, and the lack of early-stage investment means that some inventions at Weizmann are unlikely to see the light of day.
To counter, Zaiberg added: “Even though we have excellent ties with all the multinationals, we now need to make a greater effort than before to grab their attention, because they are flooded with good ventures from all over the world. The stage at which we commercialise our products, it’s hard for us to bet which of them will make money for us. It’s really a matter of luck, of the huge range of factors that are not under our control. That is why we don’t want to bet and invest our money, or what we raised, in a limited number of companies.”
Zaiberg’s first comments, aimed at peers at other Israeli TTOs, underlines a strong spirit of competitiveness which not only stems from the American model of tech transfer the country borrows from, but also a culture of a nation which has had to compete to survive. It is a spirit which Israel embodies fully as a nation, and evidently does little harm to its prospects for tech transfer.
New Zealand
The bird everyone associates with New Zealand is the Kiwi. However, universities in New Zealand are probably more concerned with being associated with the kakapo. Described by author Douglas Adams as the “world’s largest, fattest and least-able-to-fly parrot”, the kakapo is the perfect example of what happens when the outside world comes to visit. With no natural predators, the kakapo devolved any sort of defence against other animals, and came up with a bizarre and ineffective reproductive cycle that ensured that its numbers stayed in line with what the ecosystem could support.
The reproductive cycle and lack of defences weren’t a problem until man arrived with cats and dogs. Suddenly under threat, the kakapo responded in the only way it knew how – breeding slowly.
With New Zealand institutions falling down the main university rankings over the past few years as institutions in Asia improve their offerings, New Zealand is taking measures to avoid following in the kakapos nearly extinct footsteps. Often cited as one of the most peaceful countries in the world, New Zealand also has one of the highest costs of living – largely due to its need to import. To support this, the country must urgently switch to a more innovative economy.
From a tech transfer perspective, the New Zealand government is now proactively pushing the innovation agenda. Over the past year, the government has given Kiwinet, a consortium of 12 universities representing 60% of the country’s scientists, $6m for the next three years to provide pre-seed funding to promising innovations coming out of New Zealand’s universities.
The government has also established Callaghan Innovation, a new government body which intends to bring New Zealand’s scientific and business communities together. It has already entered into an agreement with Kiwinet to support commercialisation, as well as Auckland’s TTO Uniservices. The body aims to also reduce competition between universities. Bram Smith, Kiwinet general manager, said: “All of that drives researchers to work within their organisations, potentially even compete with each other. We can’t afford to compete like that, we can’t afford so much fragmentation in New Zealand.”
The land of the All Blacks rugby team is also generating some interesting and internationally reaching intellectual property and spin-outs. Last year, Otago Innovations, the University of Otago’s TTO, begun selling subscriptions to Toxinz, a database of poisons with over 190,000 items on it. A deal in the US with publisher Ebsco could see the university make millions on the database.
Smartphone manufacturer Samsung has also taken an interest in an Auckland spin-out, PowerbyProxi. Similar to the Massachusetts Institute of Technology’s Witricity, the company is developing wireless power transfer. An obvious technology to go hand-in-hand with the world’s ever growing addiction to smartphones and tablets, Samsung has invested $4m into the company, and also entered into a strategic partnership to pursue development of the technology.
New Zealand certainly has a way to go in rejuvenating its academic institutions and fostering collaboration between them to support innovation. With that said, it is definitely looking for inspiration from the warriors of the Māori to fight back rather than that of the flightless kakapo, and is long way from going the way of the dodo.
