26-05-2021

Five questions for Constantijn van Oranje

Five questions for Constantijn van Oranje

Techleap strives to build a powerful ecosystem for Dutch startups. We met up with special envoy Constantijn van Oranje and asked him five questions about the value of Thematic Technology Transfer.

1. The Netherlands and the world face major challenges pertaining to e.g. health and the climate. What role do startups and spinoffs play in the realization of solutions and why should we expect so much from these businesses?

“We are currently seeing major transitions in climate, energy, food, digitization and mobility. That present enormous challenges, but it also creates new opportunities. Technology plays an important role in this, as do new business models and changing value chains. Existing businesses cannot be expected to compete with new technologies. On the other hands, startups can only be successful if they are doing something fundamentally new, better and/or cheaper. That is why startups are so important, especially in a time of major transitions. They are (far) more flexible and can react quickly to new trends.”

2. Why do we need a TTT and what do you expect it to bring us?

“Those are really two separate questions. Why do we need Tech Transfer and why do we need “thematic” TT? When you look at the Dutch universities and startups, Tech Transfer is still often overlooked. Selling licenses to businesses is easier than starting and growing successfully and scaling up from a startup. That is especially true if a startup is trying to develop and market a new technology. It is not the latest technology but the serviceable market that determines a startup’s odds of success. In part, this is due to the fact that it is very difficult to introduce new technology into existing value chains. Similarly, incorporating innovations into optimized business processes is quite a challenge. Creating entirely new value chains – think of Tesla, for example – is incredibly expensive and time-consuming.”

Why do we need TT from spinoffs?

“First and foremost, to bridge the gap between research and the market. Technology must be developed far enough so that it becomes available to market parties that solve market problems. In other words, better coordination between supply and demand and funding a development for which there is no clear application or no revenue model yet.

Thematic TT offers certain advantages because it is easier to bring parties from both sides – i.e. supply and demand – together within a specific theme, provided that the theme concerns a sector or a societal challenge. Think of e.g. the food or energy transition, rather than a technology such as AI or nanotech. Within a theme, it is also easier to develop chain agreements. Furthermore, the collaboration between multiple universities has certain advantages when it comes to scale, efficiency and concentration. A TTT creates a framework for bringing together technological and sector-specific expertise. It also facilitates a greater deal flow, a gathering of stakeholders, mentors and investors and a concentration of assets and interests surrounding a specific theme. This makes it easier to identify bottlenecks and make chain agreements.

There are also risks involved. Vested interests might try to keep out new ideas. Homogeneity may lead to compartmentalization, which creates fewer opportunities for cross-fertilization and interdisciplinary innovations. All in all, the pros appear to outweigh the cons – which are easily resolvable, by the way.”

3. Knowledge institutions, the government and venture capitalists are combining their strengths. What role do you envision for corporates and capital investors in this ecosystem?

“Corporates are crucial in the ecosystem because of the role they play in setting the agenda and co-funding research. In the ideal situation, corporates can also serve as launching customers. With the help of partnerships, they can instantly globalize a startup’s distribution network. A good example of this is the partnership between the Vegetarische Slager and Unilever. Techleap.nl recently conducted a study which showed that corporates rarely work together directly with startups on scientific research. That means valuable opportunities are being missed. As you can imagine, research results that corporates are not immediately interested in go unused, while a startup might have been able to develop them further. In particular, this can inhibit disruptive technology or market-creating innovations that threaten vested interests.

The challenge for corporates is that they have built their business on the “compartments” that startups can and must break through. An ambitious corporate has the vision and the guts to constantly innovate and they are willing to work together with startups and scale-ups for this, even if that proves difficult in practice. The differences in culture, organization and processes between corporates and startups are sometimes hard to overcome and many corporates mostly innovate incrementally (horizon 1), based on their traditional revenue model and strategy.

I should note that there are several examples of collaboration in applied research institutes or programs where corporates and startups are able to find each other more easily to work together on projects. Besides TTT, there are several other excellent initiatives that tie into this, such as the Faculty of Impact that will launch this year. In it, universities will work together to help PhD students found a startup based on their doctoral research.

The major challenge for many technological innovations continues to be the fact that it can be many years before an appealing business case is found and there is no funding for further development. Scientifically speaking, the Netherlands is a major player, but the investments in deeptech in our country do not reflect that. Many investors are only willing to invest once the biggest uncertainties have been eliminated and the economic returns are in sight. That leaves a gap in the early-phase funding for high-tech startups. Although public funds are available at the regional level, we believe there is certainly room for improvement. Think of e.g. funding municipal laboratories and research infrastructure, but also financing instruments such as SAFE notes [1] that are already being used in the US. The fact that Innovation Industries and Shift Invest are also participating in the TTT is a powerful signal of commitment at the national level. The national government should also make more assets available for early-phase funding. Techleap.nl primarily advocates the introduction of fiscal measures such as those available in the United Kingdom, rather than direct investments in stocks.”

[1] Simple Agreement for Future Equity

4. TTT is a new and ground-breaking form of technology transfer that transcends knowledge institutions. How do you envision the next phase of technology transfer in the Netherlands or perhaps even in Europe?

“TTT is a major step in the right direction and it ties into the transition that knowledge institutions find themselves in. More and more, valorization is about addressing societal issues, collaborating with regional stakeholders and experimenting on the cutting edge between science and application. This means the TTT also serves as an example and a pilot for other forms of collaboration.

In the next phase, this type of collaboration must become much easier and more commonplace, because the societal challenges we face require new connections. As a country, we can also have a greater economic impact if we combine our strengths more effectively. To realize that, we as a society must critically assess the mission, frameworks and funding of our knowledge institutions. Valorization was made a core task of the universities sixteen years ago now, but it has been largely overlooked for a long time. Perhaps we need to realize that we must give knowledge institutions more space and tools to allow them to become a radically greater source of innovations and entrepreneurs, just as they already are with regard to research and education. We must also make sure that the ecosystem better supports the path from scientific research to upscaling in the market.

All this requires a fairly fundamental social discussion about vision, ambitions and roles, which Techleap.nl is eager to contribute to.

Internationally, technology transfer is more and more about the ecosystems and the clusters within which that tech transfer takes place. The most activity can be found where that infrastructure is available in all its facets, i.e. researchers, labs, ground-breaking pilot clients and the digital infrastructure. It is constantly reinforcing itself. That works in themes as well, whereby the dynamic of the technology transfer can differ significantly between themes. Just think of the differences between HealthTech and ClimateTech, both of which present important opportunities for the Netherlands.

Within Europe, the hotspots for specific themes are becoming increasingly important. EU funding enforces European collaboration. In that regard, it is interesting for both scientists and entrepreneurs to find a regional partner cluster within Europe that – like TTT – brings together cutting-edge science with entrepreneurship and investors.”

5. Lastly: what message do you have for the collaborating parties within the TTTs? What should they focus on in order to create an ideal environment for startups?

“No matter how brilliant their scientific finding may be, a startup’s success is largely determined by the entrepreneurs, their ambition and the talent they manage to gather around themselves. That requires training, coaching, honest feedback and diversity in every aspect. An effective TT system puts the entrepreneur first and centers not around a technology ‘push’ but around a market ‘pull.’ It is essential that the scientific entrepreneur has sufficient ownership over the intellectual property. The university should actively support this process. TT is not a major source of revenue for universities anywhere in the world, but it is a source of inspiration, innovation and impact. It should be organized as such. It is primarily about impact. If you do it very well, you can earn money from it in the long run as well. When universities use this principle to combine their strengths in a TTT, incredible breakthroughs can be achieved.”

Contact

Smart Industry

Nico Nijenhuis

n.nijenhuis@novelt.com

 

Circular Technology

Maurits Burgering

maurits.burgering@wur.nl

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