Takuji Hara Graduate School of Business Administration Kobe University

1. Roles of Technology Licensing Organizations (TLOs) in the Commercialization of Life Sciences～Japan’s Situation and Problems Takuji Hara Graduate School of Business Administration Kobe University Takuji Hara, Kobe University

2. Contents • The Process of Innovation • The Bridging Problem • TLO as an Organization for Bridging the Two Cultures • The Area of Life Sciences • Some Case Studies • A Survey • Conclusions Takuji Hara, Kobe University

3. The Process of Innovation • The Linear Model Sciences Technologies Products Takuji Hara, Kobe University

4. The Interactive Model Products Takuji Hara, Kobe University

5. The Interactive ModelAn Example: Pharmaceuticals Hara, T. (2003), Innovation in the pharmaceutical industry, Edward Elgar Takuji Hara, Kobe University

6. The Two Cultures • The Culture of Academic Research (Universities) Pursuing Knowledge Diverse and Longer-term Perspectives • The Culture of Market Economy (Business Enterprises) Pursuing Profits Focused and Shorter-term Perspective Takuji Hara, Kobe University

7. The Two Culture and Innovation • To achieve innovation requires both of the two cultures and their interaction. • Bridging the gap between the two cultures is the key to innovation. Takuji Hara, Kobe University

8. The Bridging Problem Bridging → Innovation Research World Understanding Nature Reputation in the Academic Society Business World Making Profits The Growth of the Company The Need of Research FundsThe Need of New Products The Desire for Contribution to Society Takuji Hara, Kobe University

9. The Gatekeeper • Receiving Information and Translating Takuji Hara, Kobe University

10. The Boundary Spanner • Receiving and Sending Information • Translating and Arranging Research World Boundary Spanner Business World Takuji Hara, Kobe University

11. The System Builder • Linking Elements Social Actors Technological Components Takuji Hara, Kobe University

12. TLO as an Organization for Bridging the Two Cultures • Receiving and Sending Information about Technology and Market • Valuing and Enclosing Technology (Translating) • Marketing Technology (Translating and Arranging) • Choosing Licensees (Linking Elements) • Licensing (Arranging and Linking) • Management of Intellectual Properties and Licensing Contracts (Arranging) • Consulting (Translating and Arranging) Takuji Hara, Kobe University

13. TLOs in Japan • Institutionalized in 1998 by so-called Japan’s TLO act. • 32 Official TLOs in Japan (March 2003) • Different Forms 　　　　・Stock Corporations 　　　　・Intra-university Organizations 　　　　・Foundations Takuji Hara, Kobe University

14. Examples of TLOs in Japan • Corporations: Hokkaido TLO (Hokkaido U. etc.) Tohoku Technoarch (Tohoku U. etc.) Institution of Tsukuba Liaison (Tsukuba U. etc.) CASTI (Tokyo U.) Kansai TLO (Kyoto U. etc.) • Foundations: Osaka TLO (Osaka Prefecture, Osaka City, Osaka U. etc.) Hyogo TLO (Hyogo Prefecture, Kobe City, Kobe U. etc) • Intra-University Organizations: Keio University Intellectual Property Center Waseda University Intellectual Property Center Takuji Hara, Kobe University

15. Innovation in the Area of Life Sciences • Very Long Lead-time • Huge Costs • High Risk, High Return • Decisive Patents • Exclusive Contracts Are Often Required. 　　　↓ • Significance of Each Licensing Contract 　　→Finding Excellent Partners Is Crucial. Takuji Hara, Kobe University

16. Case Studies • OTM, UC San Francisco • OTTL, Harvard Medical School • IC Innovations, Imperial College, London • CASTI, Tokyo University Takuji Hara, Kobe University

17. OTM，UC San Francisco (Aug 2001) • One of UC’s TLOs (Largest Income Source) • 4 PhD Licensing Associates in Life Sciences • ２ Associates Have Experience in Technology Transfer in Life Sciences • 170 Contracts a Year, $(2)77m Income • Personal Network Is Important • Focus at First, Then Go Open • Bio-network in the Bay Area Takuji Hara, Kobe University

18. OTL, Harvard Medical School (Feb 2002) • Intra-University Organization • 4 PhD Associates in Life Sciences • All Have Experience in Technology Transfer or Business. • Income $25m • Personal Network Is Important • Bio-network in Boston Takuji Hara, Kobe University

19. IC Innovations，Imperial College, London (Jul 2001) • Stock Corporation Owned by Imperial College • 5 Associates (2 PhDs in Life Sciences) • 3 of Them Have Experience in Business • 77 Inventions in Life Sciences • 32 Patents in Life Sciences • Human Network Is Important • Bio-network in London Takuji Hara, Kobe University

20. CASTI，Tokyo University (Aug 2001) • Stock Corp. Owned by a Group of Academic Staff at Tokyo University • 4 Associates (None Works Biotechnology Only) • 2 Have Experience in Business but NOT in Life Sciences • 10 Contracts (10 More Close to Agreement) • Co-marketing with Recruit Co. Ltd., a Human Resource Management Consultant Takuji Hara, Kobe University

21. A International Comparative Survey on the Situation of TLOs in the Life Science Area(conducted in October 2001 - March 2002) • Licensing Associates in Life Sciences • Social Networks • Activities • Performance Takuji Hara, Kobe University

22. Licensing Associates in Life Sciences Takuji Hara, Kobe University

23. Social Networks Takuji Hara, Kobe University

24. Activities Takuji Hara, Kobe University

25. Performance Note) 1 dollar (Canada) = 0.6 dollar (US), 1 Yen = 0.008 dollar (US) Takuji Hara, Kobe University

26. Conclusions • TLOs are playing a role of bridging academic and business cultures. • In the area of life science, each licensing contract is important. • Ability in both life science and business is a key to successful technology transfer. • Human network is another key to success. • Life science expertise in TLOs is insufficient in Japan. • Network in the life science area is underdeveloped in Japan. • The linking function of TLOs is weak in Japan. Takuji Hara, Kobe University

27. Key Tasks for TLOs in Japan • Reinforcement of Expertise in the Life Science Area with Business Experience • Development of Social Network in the Life Science Area • Activation of the Linking and Arranging Functions of TLOs Takuji Hara, Kobe University

28. Recently… • The number of experts in life sciences in TLOs is increasing. • Social networks and industrial clusters in life sciences are emerging. e.g.The Kobe Medical Industry Development Project “Saito” life science park, Osaka • More and more university-industry technology transfers in the life science area are achieved. Takuji Hara, Kobe University

29. Selected References • Allen, T. (1977), Managing the Flow of Technology, Cambridge, MA: MIT Press. • Friedman, R. A. and J. Podolny (1992), Differentiation of Boundary Spanning Roles, Administrative Science Quarterly, 37, 28-47. • Hara, T. (2003), Innovation in the Pharmaceutical Industry, Cheltenham: Edward Elgar • Harmon, B. et al. (1997), Mapping the University Technology Transfer Process, Journal of Business Venturing, 12, 423-434. • Hughes, T. P. (1987), The Evolution of Large Technological Systems, in The Social Construction of Technological System (W. E. Bijker et al. eds) , Cambridge, MA: MIT Press, pp. 51-82. • Jamison, D. B. (1984), The Importance of Boundary Spanning Roles in Strategic Decision-Making [1], Journal of Management Studies, 21(2), 131-152. • Powell, W. W., K. W. Koput and L. Smith-Doerr (1996), Inter-organizational Collaboration and the Locus of Innovation, Administrative Science Quarterly, 41, 116-145. • Wiesendanger, H. (2000), A History of OTL, http://otl.stanford.edu. Takuji Hara, Kobe University