Assistant Professor and Program Director

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Vinnova Project on the Entrepreneurial University
Industry-University Alliances Defining Best
Practice Mechanisms and Models for Universities
to support Growth Through Innovation in
Industry-Collaboration
Sigvald.Harryson_at_hik.se Assistant Professor and
Program Director Project Managers
Sandra.Kliknaite_at_hik.se Rafal.Dudkowski_at_hik.se
Stockholm, December 1st, 2005
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Agenda

• Executive Summary
• Ten Key Questions with Answers
• Four Emerging Models for Industry-University
  Collaboration

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Executive Summary
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Executive Summary some quotes by CTOs

• Our problems are very practical and not often
  fulfilling the academic requirements in terms of
  scientific relevance as imposed by the
  universities
• It is difficult or impossible for universities to
  keep the results of our collaboration
  confidential, so we are forced to limit
  collaboration to areas that are nice to know
  and we are not able to work jointly on truly
  strategic areas
• Students do not have any understanding of our
  business-reality so their start-up time before
  really adding any value to our business is too
  long
• Academic researchers often lack the project
  management skills to act as reliable partners in
  a business-context
• What we need is to get a few solid answers to one
  clearly defined problem, but academic research
  more often aims at developing a long list of
  additional questions as interesting spin-offs
  from the originally defined problem

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Companies covered so far

• Akzo Nobel
• Bang Olufsen ICEpower
• Gambro
• SCA
• Swisscom
• Telia Sonera
• Tetra Pak
• Additional Input can/will be collected from
• Alfa Laval
• BMW
• Volvo
• Procter Gamble with ASTAR in Singapore

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Ten Key Questions with Answers
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1) What is the best model for University
Collaboration?

• Focused collaboration in defined problem areas
  involving academic researchers ideally from
  several disciplines (Telia-Sonera Business,
  Psychology and Technology)
• Concrete projects, executed by joint
  company-academic project oriented teams, tapping
  the potential of Professors
• Coaching diploma works of internalized Master,
  Licentiate and PhD students, who are focused on
  finding new solutions to a specific
  business-problem

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2) What are the key characteristics of successful
models?

• Mutual interest in making a difference through
  breakthrough results
• Full time dedicated persons from both sides to
  accomplish mutually shared goals which requires
  new incentive models for academic professionals
• University researchers with strong dedication to
  understand challenges and problems faced by the
  company in question
• Balancing fair IP agreements with open sharing of
  results

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3) What are the most critical factors that
influence the selection of university partners?

• Demonstrated world-class knowledge with critical
  mass (incl. equipment) in a certain subject that
  is strategically important to the company in
  question
• Strong past experience in successful
  collaboration with companies and ability to speak
  the same languages
• Ability of the academics to compromise in the
  creation of joint solutions pragmatism and
  flexibility as opposed to perfection
• Geographic proximity

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4) What are the barriers and challenges that
reduce the impact of university collaboration?

• Lack of understanding of the driving forces in
  the business environment by universities, pure
  academic mindsets of professors with limited
  experience in business collaboration
• Using the same words but with totally different
  underlying mindsets, meaning structures and
  intentions often causing inability to translate
  industry problems into academic problems
• Lack of project management skills from the
  Universitys side
• IPR ownership and publishing conflicts

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5) What are the main-enablers that increase the
impact of university collaboration?

• Selection of the right problem, which is
  business-relevant, and stimulating for the
  academic partners as well while being easy to
  implement
• Defining joint targets, making those targets
  explicit and monitoring how they are reached
• Proximity of units and/or co-location of
  researchers with honest communication and social
  competence to enable a genuine dialogue and build
  further joint interest in the topic
• Systematic and transparent reporting and follow
  up on milestone-based progress

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6) What are the most important deliverables of
the collaboration (short and long-term)?

• Short Term
• Assessing the impact and viability of a concept
  or a technology
• Know-how transfer through regular meetings or
  co-location
• Long Term
• Strengthening of the scientific reputation and
  brand (Gambro)
• Recruiting ready-made PhDs with a demonstrated
  track-record
• Build-up of knowledge in a defined area in which
  the company has no possibility to do this based
  on internal resources alone

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7) What are the most important factors in the
behavior of a university in order to be perceived
as an attractive collaboration partner?

• Demonstrated ability to understand and work on
  business-driven problems with companies
• Strong organizational and project management
  skills
• Ability to network and build trust with company
  partners including honesty about delays or
  inability to deliver the expected results
• Willingness to support the implementation of a
  solution so as to make a business impact

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8) How can companies influence the behavior of
universities to adopt approaches that favor
seamless collaboration?

• Meeting regularly to have continuous interaction
  at different levels Professors and researchers
  with middle level managers, top management
  meeting with university rectors or deans and
  public funding organizations, in order to develop
  the network across the triple helix
• Top Management of the company can be involved in
  the advisory bodies of academic institutions and
  provide sponsoring of company-relevant research
• Docents from universities can be invited to make
  sabbaticals in companies to become familiar with
  real-life business problems

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9) What functions are expected from a university
to act in a professional way towards companies?

• Access to government/EU funded research consortia
• Professional patent function offering clearly
  defined IPR related process
• Network function offering access to other
  faculties and universities

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10) What strategies, models and tools do you (the
company in question) use to establish mutually
rewarding collaborations with universities?

• Specifying clear and measurable targets at the
  beginning, with milestones and active follow-up
• Clear influence on people selection to get the
  winning scientists
• Co-location of the collaboration project to
  secure that a shared practice is developed
• Treating students and researchers as employees
  who are fully integrated in the team
• Socializing arrangements for the right trusted
  networks to be established

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Four Emerging Models for I-U Collaboration
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The Outsourced Model of Combibloc was established
to enhance access without increasing complexity
of collaboration

• The outsourced model was established in order to
• Increase access to academic brainpower without
  increasing complexity
• Leverage a wider and deeper network of academics
  to solve concrete customer problems
• The outsourced model was established by
• Encouraging a Professor who knew Combibloc and
  their business problems very well to establish a
  research company
• Giving him enough funds to recruit 3 graduating
  Doctoral students, who all had done their theses
  in collaboration with Combibloc
• The key elements of the outsourced model are
• Specific research problems are given/outsourced
  to the Invention Center (IC), which is working on
  an exclusive basis for Combibloc
• IC identifies the right skills within their vast
  networks spanning several universities in Eastern
  Europe
• The main benefits of the outsourced model are
• Enhanced reach into wider and deeper networks
• Clear interface and ease of collaboration
• Drawbacks and challenges of the outsourced model
• Obligation to feed the IC, or else it may turn to
  competitors

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CB is skilled at leveraging science for
innovation designing an anvil for ultrasonic
sealing

• One success-example was with the IC at Dresden
  University for the development and design of an
  anvil for ultrasonic sealing
• The task was to calculate the actual behavior of
  the anvil and find out why certain problems occur
  using previous models of anvils
• IC leveraged the required brainpower within
  Dresden University to analyze the anvils
  behavior through a special computer simulation
  based on the science of self-frequency
• By better understanding and estimating ultrasonic
  vibration problems it was possible to use a
  smaller screw can that took more pressure than
  the previous much larger screw
• The results could be commercialized and applied
  to several commercial packaging machine platforms
  moving from science to sales in six months

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Combibloc collects know how from universities,
but outsources collaboration to a spin-off
company instead of sending away their own
researchers
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The Spin-Off Model of Bang Olufsen was
established to drive university education towards
the new breakthrough technology standard

• The spin off model was established in order to
• Increase access to academic brainpower without
  bringing them into the main company
• Drive the training of engineering students
  towards their new ICE standard
• The spin off model was established by
• Establishing a new company close to leading
  universities in Copenhagen and Lund
• The key elements of the spin off model are
• To bring in the same amount of university
  students as internal employees to do master
  projects
• To carefully select the master candidates through
  training courses, special projects and bachelor
  theses
• The main benefits of the spin off model are
• Wider attack on innovation through free access to
  students
• Drawbacks and challenges of the spin off model
• No possibility to work with PhDs in Denmark since
  the new I-U legislation was enforced

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A comprehensive training/university education
program is given at two selected universities to
steer knowledge-creation towards the ICEpower
standard
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Success case From development to
commercialization in 9 months

• A new technology platform for an amplifier of a
  mobile phone was developed by a master student in
  six months
• After another six months the technology was
  licensed to this commercial partner. Except for
  the master student the CTO of BO ICEpower was
  also involved in this project.
• The student was doing a six month thesis project
  without a salary and was hired for three months
  after getting his degree spending most of this
  time in Korea
• The first prepaid royalty for the technology
  licensing exceeded the total project cost by more
  than three times
• The first two years of royalties will give
  another tenfold return on the total project cost

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One success leading to another

• A very advanced bachelor thesis project was
  defined to develop the first 3D digital sound
  processor (amplifier) chip for a mobile phone.
  The student started to work on new algorithms
  that were integrated into a PCM-PWM (Pulse Code
  Modulated Pulse Width Modular) chip
• The whole amplifier chip measured 5x5 millimeters
  and the actual DSP required less than 10 per cent
  of that space. This second amplifier chip now
  provides louder and better quality big stereo
  sound with a 3D effect giving the impression
  that the small loudspeakers on the mobile handset
  move five meters apart
• The exclusive customer of this amplifier produces
  more than 100 million mobile phones per year. In
  2006, one fourth of all phones will have the new
  technology, which gradually also will be applied
  also to lower-end phones
• The initial licensing fees amount to
  approximately 100 times the project cost.

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Unsuccessful cooperation due to the change in
IPRs laws

• A PhD project was initiated and co-funded by BO
  ICEpower prior to the project start. The IPR laws
  changed one year after the project start
• Hence, when the student came up with a good idea
  he was forced to hand it over to the Patent
  Office of the University
• The University tried to sell the patent to a very
  large American company, and required as much as
  15 of the total turnover of the company as a
  whole not just on revenues generated by the new
  patent

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The Spin-Off Model of BO is based on continuous
knowledge creation by bringing students into
their own lab and to the manufacturing plants of
their customers
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The Insourced Model of Porsche gives a unique
competitive advantage in terms of cost-efficient
innovation leadership

• The insourced model was established in order to
• Bring in low-cost academic brainpower to solve
  tasks too focused for internal employees
• Enhance creativity and compensate for lacking
  internal resources in research
• The insourced model was established by
• Turning master student internships into a
  web-supported and fully institutionalized core
  process
• The key elements of the insourced model are
• To bring in 600 master students per year into an
  organization of 2000 internal employees
• To carefully select and recruit the top 5 and
  use a significant portion of the ones who leave
  for strategic intelligence
• The main benefits of the insourced model are
• Deeper exploration of innovation through low cost
  access to highly motivated students
• Drawbacks and challenges of the insourced model
• Students can join competitors
• Limited possibility to work with PhDs on
  strategic topics in Germany due to enforced
  openness

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Porsche defines very specific and usually highly
challenging tasks for the students

• Exploring and analyzing new laser welding
  technologies
• Testing new forms of surface treatment in
  collaboration with new pre-selected key suppliers
• Building and structuring new internal knowledge
  databases for optimal access to and sharing of
  technological knowledge
• Scanning and assessing new research sources for
  and suppliers of high performance parts in ultra
  light materials
• Adopting the transmission software to allow for a
  specific car model to be driven the American
  way in the US market, i.e., giving it smoother
  and less aggressive temper so that coffee and
  drinks are not spilled out

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Porsche integrates a large portion of university
students to mix their research straight into
their melting pot of production-oriented know how
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The On-Campus Model of SCA Why the model was
established?

• SCA wanted to use proximity to establish closer
  collaboration with the Mid-Sweden University and
  get a more entrepreneurial atmosphere than in
  their traditional RD centers
• SCA also wanted to proactively support the
  build-up of a research program at the Mid-Sweden
  University by co-funding the program and
  co-locating some of their own RD people
• The main idea underlying this decision was to get
  a quicker and better payback on external research
  investments and break the tradition of
  zero-impact consortia
• The Leadership of Mid-Sweden University wanted to
  build a new area of research in closer
  collaboration with the industry to acquire enough
  research capability and resources so as to get
  full university status

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The On-Campus Model of SCA How the model was
established?

• It was mainly driven by the former SCA director
  of RD Alf DeRuvo and supported by the Vice
  President (the Dean) at Mid-Sweden University
  Kari Marklund and the Mayor of the County
  (Landshövdingen in Västernorrland) at that time,
  Börje Hörnlund
• In 1999, at the same time as SCA was doing the
  reorganization of their RD center, the Swedish
  government decided to put 300mio SEK into a
  Forest Industry Program part of which was
  allocated to MSU and thus contributed to the
  build-up of critical mass
• When SCA transferred two research managers
  Prof. Hans Höglund and Prof. Lars Wågberg into
  the research program, the way of working became
  professionalized and more project driven at the
  University

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The On-Campus Model of SCA Key Elements of the
Model

• Open atmosphere delivering creative and
  implementable research
• Universitys leadership is supporting industy
  collaboration
• MSU can carry out full scale experiments in SCA
  mills as they have very good relations with the
  management at the mills in Sundsvall and beyond

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The On-Campus Model of SCA Main benefits and
drawbacks

• Benefits
• We gain speed by focusing on product developments
  while getting qualified scientific input that we
  would not have the time or qualification to
  generate ourselves (interview, Folke Österberg,
  Research Programme Director, SCA Packaging RD,
  19.11.05)
• One of the university researchers core strengths
  is that even though they are pursuing fundamental
  research, they are very good at implementing the
  results. This is partly enabled by their full
  access to the different SCA paper mills
  (interview, Prof. Myat Htun, 23.11.05)
• Through this closeness to Mid-Sweden University
  we got contacts in other areas of their research
  that turned to be useful. The on-campus setup
  also created a more entrepreneurial atmosphere as
  a side effect that has already resulted in
  several spin-off companies (interview, Ulf
  Carlson, Vice President, SCA Corporate Research
  and Development, 19.11.05)
• Drawbacks
• If the industrial research center is too far away
  from the business and the company, it becomes too
  university like
• Mid-Sweden University can be perceived as a part
  of SCA by other companies

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The On-Campus Model of SCA Examples of the
results accomplished through the model

• Several science-to-sales examples can be
  identified
• The wood materials group of Mid-Sweden University
  had a PhD student, who made significant
  contributions to the energy optimization of a new
  newspaper mill owned by SCA, where the PhD is
  now employed
• SCA and Mid-Sweden University had a joint project
  on the optimization of the forest road-net that
  is now having positive impact on environment and
  business
• One SCA sponsored PhD student developed a unique
  process control system for pulp production that
  has now been implemented in all SCA paper mills
• This on-campus setup has lead to a couple of
  spin-off companies in areas of paper electronics,
  developing breakthroughs like intelligent paper
  and electronic diapers

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The On-Campus Model of SCA is bridging
application oriented and science based knowledge
for collective breakthrough innovation
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Advantages
Disadvantages
Model

• Outsourced
• Spin-Off
• Insourced
• On-Campus

• Saving time in RD while keeping risk capital
  under a certain control
• Securing a clear interface with a vast network of
  universities
• Proactively driving the education of new
  engineers and explore bold ideas at low cost
• Reaching a new customer-base by deploying a core
  technology new application areas
• Access to cheap, fast and flexible brainpower to
  perform impossible tasks and recruit the best
  engineers
• Alumni replacing the R in the RD activities
  and providing continuous technology intelligence
• Mutually enriching exchange and
  cross-fertilization between academic and
  corporate researchers including research
  infrastructure
• Faster and more systematic science-to-sales
  yielding new spin-offs with significant business
  impact

• Need to feed the external unit with regular
  business, or else this unit may have to turn
  towards new customers
• Potential loss of control of the evolution of the
  core technology
• Geographical distance between main-company and
  the spin-off
• Risk of leakage of strategic information when the
  students leave
• Constant introduction and training of new
  students
• Company dominance of a public university
• Risk of overdependence on one university and loss
  of touch with the rest of the business