WIPO-IFIA INTERNATIONAL SYMPOSIUM ON THE COMMERCIALIZATION OF INVENTIONS IN THE GLOBAL MARKET

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WIPO-IFIA INTERNATIONAL SYMPOSIUM ONTHE
COMMERCIALIZATION OF INVENTIONSIN THE GLOBAL
MARKET organized bythe World Intellectual
Property Organization (WIPO) andthe
International Federation of Inventors
Associations (IFIA) in cooperation withthe
Korean Intellectual Property Office
(KIPO) andthe Korea Invention Promotion
Association (KIPA) Seoul, December 4 to 7,
2002 PARTNERING WITH VENTURE CAPITALISTS TO
ACHIEVE GROWTH AND DEVELOPMENT Document prepared
by Dr. Finarya Legoh, Assistant to the Deputy
Minister for Science and Technology Diffusion
Mechanism, Ministry for Research and Technology
of the Republic of Indonesia, Jakarta
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ST FACTS IN INDONESIA (1/3)

1. OECD Globalization - Links between investment,
   productivity and growth greater investment can
   increase TPF (total productivity factor)- RD and
   ST development play a crucial role in economic
   growth
2. Government/regional governments should create
   motivation and provide stimulation and
   facilitation, as well as build a conducive
   environment to the development of a ST system
   so that the government must define direction,
   main priorities, focuses and policies, which is
   stated in THE NATIONAL STRATEGIC POLICY OF ST
   DEVELOPMENT
3. Priorities and policies must include
   strengthening the development of basic science,
   strategic ST, capacity-building of RD
   institutions, strengthening the development of
   technology-based industry, and strengthening the
   capability of technology audit

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ST FACTS IN INDONESIA (2/3)

• Function of Ministry for Research and Technology
  
• define policies, direction, main priorities,
  focuses for national development of ST
• Coordinating RDE institutions, including set
  annual budget through ST sector within national
  budget 0,54 from total
• Accelerate linkages between RD sector and
  industry such as give incentives for RD with
  different targets accordingly
• Total IPR risen significantly
• Year Local Abroad
• 1998 202 1785
• 1999 320 2808
• 2000 369 3772
• 2001 408

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Strength of Regional Innovation (3/3)
Above Average
Manado
Medan
Around Average
Padang
Samarinda
Below Average
Bandung
Jogjakarta
Surabaya
Semarang
Mataram
Makassar
Source PERISKOP PROJECT 2001 - MRT
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POLICY HIERARCHY FOR NATIONAL DEVELOPMENT OF ST
ST Nat Syst Law No 18 / 2002
Long term National Guidelines
GBHN 1999
(Regulations for ST doers interaction)
Short Term Guidelines
PROPENAS
National Research Agenda
(Milestones, focus industry)
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KEY PERFORMANCE INDICATORS - NATIONAL STRATEGIC
POLICY OF ST DEVELOPMENT -

• Increasing ST products within national and
  international levels, including prototype,
  intellectual properties, and national standards
• Improving the RD products/results (including
  innovations) which are applicable and utilized by
  the community within national and international
  levels through increasing and strengthening
  techno-industrial cluster and techno-preneurship
  
• Increasing cooperation among RD institutions and
  business sectors
• Improving the quality and quantity of ST
  resources

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ST SYSTEM INSTITUTIONS
IPR Inst
Standardization Inst
Public Institutions
RD Inst
Professional Organization
Consultant Inst
Private Sectors
Universities
Environmental Condition
Consumer Inst
Policy Making Inst
Supervision Inst
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RD ORIENTATION MANAGEMENT DEVELOPMENT FLOW
Focus on research activities in various
scientific fields (uncertainty, risk taking)
Research Capacity
Innovation Capacity
Focus on clusters of technologies and scientific
competencies/ino. impr
Tech Marketing
Active search for applications of developed
innovations, comm. gap
Tech Licensing
Gain additional value through patents and
licensing
Establish high-value collaborations with business
enterprises
Tech Partnering
Leverage intellectual property through spin-off,
equity positions, etc.
Venturing
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Identify opportunities Develop prospective
clusters of technology roadmap Building up
network of competency resources
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INCENTIVE PROGRAM FOR SUPPORTING CAPACITY OF
TECHNO-CLUSTER AND TECHNO-PRENEURSHIP

• NAT. STRATEGIC COMPETITIVE RESEARCH
  (RUSNAS) -2000
• COOPERATION COMPETITIVE RESEARCH (RUK) -1995
• TECHNOLOGY INSURANCE (ASTEKNO) -2001
• IPR STRENGTHENING INCENTIVES
• - PATENTS, INDUSTRIAL DESIGNS -2000
• - IPR CENTRE -2000
• - TRADITIONAL KNOWLEDGE PROTECTION -2002
• TECHNOLOGY AND MANAGEMENT STRENGTHENING
• (SIPTEKMAN) -2001
• ST EMPOWERMENT IN INCREASING REGIONAL
• INVESTMENTS (PRIDA) -2003
• BUSINESS FORUM -2003
• TECHNOLOGY INFORMATION KIOSK (WARINTEK) -2001
• START-UP CAPITAL -2003

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OBJECTIVES(1/4)

• To bridge and accelerate the gap between industry
  (technology users) and RD (technology suppliers)
• To increase capability and competitiveness of
  industry and investment on RD activities
• To create atmosphere of productivity, value
  added, creation and innovation
• To increase utilization of local technology by
  industry
• To minimize risks in RD investments

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COLLABORATIVE MODEL
(2/4)

• RD institution (one/more) should have an
  agreement with the industry partner (one
  industry/more) to implement the program actively
• Cost sharing between RD institutions (funded by
  Government through MRT) and industry partners
• Industry partners are responsible to continue the
  activities after finishing the RUK program
  (within 2 years), and to develop/apply
  technologies produced by RUK
• Royalty produced through IPR within RUK
  activities should be shared appropriately
  including the amount of funding
• Outcomes of post-RUK activities are evaluated by
  MRT

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Example 1 BOGIE FOR TRAIN COLLABORATION OF
PRIVATE COMPANIES UNIVERSITY GOV., RD
INSTITUTIONS (3/4)
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Example 2 DEVELOPMENT OF BIOFERTILIZER INDUSTRY
(4/4)

• Collaboration among RD Inst. (Bogor Plantation),
  Semi-private RD Inst., (Biotecnology
  Institution) and Semi-Gov. Owned company (PT
  Nusantara Plantation III, V, VII, VIII)
• Competitiveness
• reduce 50 of artificial fertilizer usage
• 20-40 lt cost of fertilizers
• environment friendly
• can be used in all crops
• has been patented No. ID 0 000 206 S.
• has been licensed by PT Bionusa and a
• biofertilizer factory has been constructed and
  
• operated in Purwakarta (West Java) its
  capacity
• 5,000 tonnes/year

Biofertilizer EMAS
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TECHNOLOGY INSURANCE (1/3)

• For new business/business that applys new/local
• technology -- face critical period in the
  up-scaling
• phase
• To bridge mis-match risks between pilot scale and
  
• commercial scale
• Risks
• - Real risks - in general covered by
  insurance
• company
• - Speculative risks ? not always covered
  by
• insurance company, unless has specific
• characteristics
• Participants
• inventors, investors (industry esp. SMEs),
• insurance company consortium, and MRT as a
  facilitator

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TECHNOLOGY INSURANCE (2/3)
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TECHNOLOGY INSURANCE (3/3)

• The program started in 2001 and was
  implemented
• successfully, and at the moment 3 packages
  were
• given to 3 industries
• development of Industry for Flower Seedling
• (investment of US61,000)
• development of Type B Gelatin Business as a by-
• products from leather industry (investment of
  
• US103,500)
• development of Activated Bleaching Earth
• Technology for Bentonit Refinement Industry
• (investment of US940,000)

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WARINTEK(Technology
Information Kiosk) (1/3)

• Incentives to increase and to empower ST
  information by improving ST information access,
  developing IT quality and HR competency for
  regional development, in order to support SMEs
  development, includes
• 1. ST information services
• 2. Development of local/regional ST
• data-bases and packages
• 3. Training, HR capacity building in the field of
• documentation, information, library, etc.

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BUSINESS MODEL OF WARINTEK (2/3)

• Partnership between MRT and private providers -
  MRTs role giving supervision/TA, management
  training and IT content starter-package, and
  making sure that the program is implemented
  properly according to terms and conditions
  providers role provide funds for hardware
  investments, technical assistance, ST
  information development, technical training (IT
  platform products and services), internet access
  services
• The business model pattern is adopted - to
  create better management, quality and standard of
  services
• This model is quite popular - approximate 2,300
  outlets within community (IT providers,
  universities, libraries, regional governments)

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WARINTEK (Warung Informasi Teknologi) (3/3)
( July 2002 2,358 kiosks in 30 Provinces
Target 9,000 by end of 2003 )
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START-UP CAPITAL (1/2)

• Technology commercialization process is in
  emergence phase, usually need investment that is
  difficult to be given by a bank loan, because
• Innovation products still dont have reliable
  markets (innovation based)
• Investment is needed in the long run
• New company usually doesnt have track record
  (not solid business road map) and minimal
  business system development (lack of qualified
  management to develop business plan), as well as
  less physical asset for collateral
• To develop technology-based industry in emergence
  phase - need early-stage financing to help new
  industry
• To prove concept and develop business plan
• To develop products and to explore potential
  market
• To make limited production

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START-UP CAPITAL (2/2)

• Incentives given as seed capital to a new
  business applying domestic/ new technology
• Collaboration between MRT and PT PNM
  Techno-Venture
• At the moment very limited business candidates
  fulfil requirements of investment through venture
  capital
• Proposals that not yet reliable for venture
  capital, will be re-evaluated for start-up
  company incentives within 2-3 years - to bridge
  the gap towards venture capital financing
• BPPT has a Research Institute for Incubator
  Technology - at the moment has several tenants to
  be nurtured towards start-up companies

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www.ristek.go.id inventorindonesia.com

• The Ministry for Research and Technology of the
  Republic of Indonesia
• The Indonesian Inventor Association
• Assistant to Deputy Minister for ST Diffusion
  Mechanism - Deputy for ST Utilization and
  Socialization
• Building II BPP Teknologi, 6th floor,
• Jl. MH. Thamrin No. 8, Jakarta 10340
• Tel [phone]
• Fax [phone]