ACADEMIC ENTREPRENEURSHIP, TECHNOLOGY INCUBATORS AND R&D ENTERPRISES

1. THE THIRD HANOI FORUM ON ICT “ ICT IN KNOWLEDGE ECONOMY” ACADEMIC ENTREPRENEURSHIP, TECHNOLOGY INCUBATORS AND R&D ENTERPRISES Nguyen Ai Viet ITI, Vietnam National University

2. CONTENT • Challenges and New Opportunities • An implementation model: APPP and lessons from the international practice • A practical model in Vietnam

3. OBJECTIVE • Seeking for a model for Technology Transfer and National competitiveness building. • Further development of the APPP model. • A proposal for real actions.

4. 1. CHALLENGES AND NEW OPPORTUNITIES

5. THE MARKET FOR DOMESTIC ICT COMPANIES • Vision: The current domestic market for ICT is not enough to sustain the current high speed growth and ambition (annual rate of 25-40%) • Looking for International markets is an obvious tendency for domestic companies. • The main benefits of Software Outsourcing Services: Revenue, Human Capital and Management Skill Development. • Challenges: Brain-drain, opportunity costs and competitiveness • The current success does not guarantee the future in the changing world

6. R&D CAPACITY AND THE GLOBAL COMPETITION • Financial Crisis is not necessarily a dramatic issue for the Vietnamese ICT enterprises. • But it warned about the stability and limit of this market. • So while the United States, the European Union and Japan have so far been the leaders in R&D, countries such as China and India have a growing research and innovation capacity. • The role of R&D in the global competition is without doubt. • Big challenge: How to build R&D capacity for Vietnamese ICT companies? The author has been proposing approaches to domestic companies like VNPT since 2000.

7. CHALLENGES AND OPPORTUNITIES • New trend: The shift from the Merger and Acquisition (M&A) Model  Internationalization of R&D. • The driving force: cost reduction, competition and time to innovation become more critical and more firms are looking for R&D outsourcing. • MNE’s are the main R&D (95% of the largest R&D firms are MNE, accounting for one half of the world expenditure of R&D). • A recent survey of UNCTAD: 69% of R&D firms have increasing foreign R&D  R&D outsourcing opportunity • The Question is how to be ready in the right place at the right time for the opportunity. “No one hires you to make his shoes if your shoes are not all right”

8. 2. AN IMPLEMENTATION MODEL: APPP AND LESSONS FROM THE INTERNATIONAL PRACTICE

9. Academic Public Private Partnership • APPP model has been proposed by the author since 2007 for the R&D capacity development in developing countries. • Combining the strengths of different sectors: academic: research and brain, private: quick decision and market oriented, public: long term view and initial investment. • Preconditions for APPP: Interactions between two approaches. a) Top down: Government commitment and inter-ministry coordination b) Bottom up: Pilot example for Academic Area.

10. ACADEMIC ENTREPRENEURSHIP • The common practice in USA: academic spinoffs. Example Google and Technology Transfer Center at Stanford • In China: a lot of academic spinoffs became successful ICT companies. Example: Huawei, Lenovo,… • Academic Entrepreneurship is essential for ICT and KE • Spontaneous Wild Academic Entrepreneurship in Vietnam: no organization and instructions  no legal status  small businesses or unofficial abuses  cannot be reversed and must be handled. • More strategic models must be developed as many problems may arise: brain-drain, academic quality deterioration.

11. TECHNOLOGY INCUBATORS • A successful model: Israel • Goal: Excellent Tech into Marketable Tech • Support novice entrepreneurs at the earliest stage • Help transforming ideas or into commercial and exportable products or services • Stakeholders: - Government: financial support and approval, -Incubator Manager: business support and external resources and -Tenant: Ideas to products and oriented to international market demands

12. TECHNOLOGY INCUBATORS FINANCING • Budget: $350K/2 years, Grant: 85% of the total budget • Ownership: • At least 50 % – entrepreneur • At least 10 % – key staff members • Up to 20 % – provider of supplementary financing for project implementation • Up to 20 % – incubator (Center)

13. R&D Enterprises • Defined as: - A company that has invested in R&D more than 3M NIS in the last three years and recognized by OCS. - Or an incubator company, which invested at least into three R&D companies with at least 3M NIS in the last three years. • Regulations at IPO - Lower required number of shareholders 100 35 - Lower requirement for institutional investment by 50%.

14. OUTCOMES • Studies shown that 90% of incubated start-ups in the US and EU became active, much higher than un-incubated ones. • Success rate is 51% for incubated tenants.

15. 3. A PRACTICAL MODEL IN VIETNAM

16. ACADEMIC INCUBATOR ADVANTAGES - High educated Human Capital - Relations with Universities and Education Programs - Government Research Funds - Mechanism: Degree 115 with a lot of tax, freedom,… - International relations with international academic institution. - Lessons learned from other countries. - Approval and support from upper level management

17. NEW SLOGAN FOR UNIVERSITY • University as The Incubator for Educated People and also R&D enterprises. • “10 year strategy is to incubate plants, 100 year strategy is to incubate people, 20 year strategy is to incubate R&D enterprises”

18. DISADVANTAGES • A pilot model without previous example • Lack of understanding and awareness from different level of administration. • No public finance infrastructure: the most difficult is the start up investment and human resource mobilization. • Wild Academic Entrepreneurship is hard to change.

19. KEY FACTORS FOR SUCCESS • Support, approval and commitment of the upper management and all level administration. • International collaboration for Knowledge Transfer and Brand Name promotion for R&D outsourcing. • Partnership with private sector for developing competitive products. • United high quality staff.

20. THANK YOU FOR ATTENTION FOR ANY COMMENTS AND SUGGESTIONS CONTACT DR. AIVIET NGUYEN E-mail : naviet@vnu.edu.vn Mobile: +84-91-200-6861