Sigvald.Harryson@hik.se Assistant Professor and Program Director Project Managers:

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@hik.se Assistant Professor and Program Director Project Managers: Sandra.Kliknaite@hik.se Rafal.Dudkowski@hik.se Stockholm, December 1st, 2005 Sigvald.Harryson@hik.se

Agenda Executive Summary Ten Key Questions with Answers Four Emerging Models for Industry-University Collaboration Sigvald.Harryson@hik.se

Executive Summary Sigvald.Harryson@hik.se

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 Sigvald.Harryson@hik.se

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 A*STAR in Singapore Sigvald.Harryson@hik.se

Ten Key Questions with Answers Sigvald.Harryson@hik.se

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 Sigvald.Harryson@hik.se

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 Sigvald.Harryson@hik.se

3) What are the most critical factors that influence the selection of university partners? • Demonstrated world-class knowledge with critical mass (incl. equipment) ina 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 Sigvald.Harryson@hik.se

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 University’s side • IPR ownership and publishing conflicts Sigvald.Harryson@hik.se

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 Sigvald.Harryson@hik.se

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 Sigvald.Harryson@hik.se

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 Sigvald.Harryson@hik.se

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 Sigvald.Harryson@hik.se

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 Sigvald.Harryson@hik.se

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 Sigvald.Harryson@hik.se

Four Emerging Models for I-U Collaboration Sigvald.Harryson@hik.se

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 Sigvald.Harryson@hik.se

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 anvil’s 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 Sigvald.Harryson@hik.se

Combibloc collects know how from universities, but outsources collaboration to a spin-off company instead of sending away their own researchers Sigvald.Harryson@hik.se

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 Sigvald.Harryson@hik.se

1. / 2. semester Catch general interest (SP/power/ Acoustics) 4. - 6. semester (Filter best 30%) Last semesters (Filter best 50%) General Mid project Final project RTA/TPD Education Special Courses + Preparing courses Results Projects from TP Roadmap, or "Free" RTA projects A comprehensive training/university education program is given at two selected universities to steer knowledge-creation towards the ICEpower standard Sigvald.Harryson@hik.se

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 B&O 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 Sigvald.Harryson@hik.se

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. Sigvald.Harryson@hik.se

Unsuccessful cooperation due to the change in IPRs laws • A PhD project was initiated and co-funded by B&O 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 Sigvald.Harryson@hik.se

The Spin-Off Model of B&O is based on continuous knowledge creation by bringing students into their own lab and to the manufacturing plants of their customers Sigvald.Harryson@hik.se

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 Sigvald.Harryson@hik.se

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 Sigvald.Harryson@hik.se

Porsche integrates a large portion of university students to mix their research straight into their melting pot of production-oriented know how Sigvald.Harryson@hik.se

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 R&D 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 R&D 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 Sigvald.Harryson@hik.se

The On-Campus Model of SCA: How the model was established? • It was mainly driven by the former SCA director of R&D 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 R&D 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 Sigvald.Harryson@hik.se

The On-Campus Model of SCA: Key Elements of the Model • Open atmosphere delivering creative and implementable research • University’s 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 Sigvald.Harryson@hik.se

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 R&D, 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 Sigvald.Harryson@hik.se

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 Sigvald.Harryson@hik.se

The On-Campus Model of SCA is bridging application oriented and science based knowledge for collective breakthrough innovation Sigvald.Harryson@hik.se

Model Advantages Disadvantages • Outsourced • Spin-Off • Insourced • On-Campus • Saving time in R&D 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 R&D 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 Sigvald.Harryson@hik.se

Sigvald.Harryson@hik.se Assistant Professor and Program Director Project Managers: