Collaborazione , Innovazione, Ricerca e Imprenditorialita'

1. Collaborazione, Innovazione, Ricerca e Imprenditorialita' Alberto Sangiovanni-Vincentelli The Edgar L. and Harold H. Buttner Chair of EECSUniversity of California at Berkeley Co-Founder, CTA and Member of the BoardCadence Design Systems ComitatoEsecutivo, IstitutoItaliano di Tecnologia ComitatoScientifico, CNR Advisory Board (Walden International, Sofinnova, Innogest, Xseed (MDV)) Investment Committee (FondoAtlante, Fondo Next)

2. Outline Collaboration, Research, Innovation and Venture Capital Technological Opportunities driven by Collaboration and Research: The New Innovator!

3. Collaborate to Innovate: the Quest for the Virtual Corporation Manager • Firms will focus more sharply on what they do best, and they will enlist a growing diversity of suppliers for the rest. Organizations will increasingly look outside their walls not just to reduce costs but for innovation – in processes, product and service differentiation – to free up resources, transform their businesses, and facilitate sustainable competitive advantage. As supply networks become more global and complex, winning will depend on transparency, trustworthiness, and reciprocity. In a word: collaboration. (Alan McCormack et al. (HBS)) • The ideal collaboration model is the Virtual Corporationwhere the different firms involved in collaboration act as if they were division of the same corporation (or even better!!).

4. Silicon Valley: The Land of Innovation

5. Silicon Valley: Role of Universities

6. Factors in Success Infrastructure • Legal and financial services • Excellent Universities • The simultaneous presence of large, medium and small companies • The “network”: both inside and outside company boundaries

7. The role of VCs in the Industrial Innovation Landscape • As a complementary lens on technological and market change • VCs see the world differently • As a window on global technology development • Technology is global and driven by local/regional needs • As a supplement to or portfolio hedge against internal R&D programs • Not even the best and biggest corporate R&D can cover all possibilities • To drive new/expanded market development or other strategic (non-R&D) objectives (Intel; Microsoft) • Explicitly to develop risky new ideas that will initially flourish better outside the corporation (Cisco) • A form of outsourcing of innovation • The best VCs adhere to "simple" fundamentals: • world-class leadership and team; • large, growing market; • defensible big idea; • rigorous application of best innovation practices

8. Execution Risk Market Risk Technology Risk Variable Factors (dependent on sector or specific opportunity): Future Financing Risk Regulatory Risk Risk Factors in Evaluating Startup Opportunities

9. Liquidity and Returns • Exit options • IPO vs. M&A (see chart, next slide) • Bankruptcy vs Shut-down • Typical venture portfolio performance: • Historical data: • Out of every 10 investments • Half do not return capital • 1 returns >10X • Rest return 1-10X Source: M. Borrus, Xseed

10. U.S. Venture Capital Investment1995–2008 Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report; Data: Thomson Financial

11. Venture Exits—IPOs and M&A by Year, 1991–2008 Source: NVCA, Thomson Reuters

12. 2008-2010 Exits: Heating up Again (LinkedIn Story)

13. Portfolio Progress 8 companies past seed stage 1,700+ ideas/ researchers canvassed 18Companies funded 16 Live ~950 resulting start-up ideas analyzed in detail 2Shut Down DigitAB StemCor

14. What Drives Venture Returns? • Market growth not absolute size • Efficiency of capital deployment • Irrational exuberance in exit markets • A handful of big winners And most of all • Fundamental Innovation—The (Tech) world isn’t “flat” (next slide). Great Universities play a role!!! Source: M. Borrus, Xseed

15. The (Tech) World Isn’t Flat: Distribution of most referenced patents Boston (Medical, HiTech Harvard, MIT) Illinois (Motorola, U. Illinois) Michigan (GM, Ford, Chrysler, U. Michigan) Oregon, Washington (Microsoft, Intel U. Wash, Toronto) Silicon Valley Texas (Houston, TI, Freescale U. Texas) LA, S. Diego (Qualcomm, Defense UCLA, UCSD) Source: ATP and George Mason University

16. 2008 2007 Consequence: VC Investment by US Region (2008 vs. 2007) California (Especially Silicon Valley) Rules! $ in Millions—All Results Rounded # ofDeeds $14,264 $14,735 1,552 1,624 $2,974 $3,714 405 446 295 199 $1,203 $1,130 146 172 $1,299 $1,469 $955 $1,382 164 175 100 97 $813 $610 $708 $632 90 92 $603 $819 171 159 47 57 $491 $489 $499 $557 81 94 $23,069 $25,595 2,091 3,110 Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report; 2008

17. Human Resources in Highly Innovative Ecosystems:Meritocracy to the Hilt! • Biggest challenge is to acquire and retain highly-skilled workforce • Play on compensation based on bonuses, restricted stock and options as well as special claused for acquired talent via acquisitions such as earnouts and no compete agreements • Hiring and compensation is mostly decided by technical leaders and agreed upon by HR, HR guidelines may be violated if a good case is mounted • HR mostly focussed on internal issues: administration of the process, say on exec compensation, participate on the compensation plan set up at the Board level

18. Factors in Success 1 People and Technology: • Scientific and Technology education • Centers of excellence in research • Talent pools (people form Universities and companies interested in high-risk high-reward activities) • Ability to attract the “best” to the region (infrastructure for families and continuous learning) but attention to moving social and financial costs

19. Considerations of Use? YES NO Pure Basic Research (Bohr) YES Quest for Fundamental Understanding? Pure Applied Research (Edison) NO Pasteur’s Quadrant Use-Inspired Basic Research (Pasteur) D. Stokes

20. University-Industry Relationships • Professors are promoted on the basis of their contributions in all areas, including professional activities • Reciprocal respect and attention to respective roles • Unrestricted grants: “speed not patents” • Transfer of technology through visiting professionals and summer students • Formation of new companies favored • Companies compete fiercely on talents out of University • Educational agenda left in the hands of University

21. Factors in Success 3:The Valley “Culture” • Move fast • Leverage all you can • Do not be afraid of making mistakes • Learn from your errors • If you fail, try again • Re-invent yourself and your company constantly • Grow growgrow……

22. Israele • Più alto numero di Nobel pro capite (più che tutta l’area euro) • 4 università nelle top 100 in scienze • N° 3 in pubblicazioni scientifiche pro capite • N° 1 in laureati pro capite • Più di 1.700 laureati all’anno in Life Sciences • Più start-ups dopo USA (più seed investments di USA in valore assoluto) • Quasi 100 VC, ~10 miliardi di dollari under management • Governo imprenditore (Yozma, incubatori, Life Science VC) • Più alto numero di aziende quotate al Nasdaq dopo USA • Più alta spesa di R&D sul PIL • PIL 1948-2008: x50 (come Cina, >Giappone, Corea) • Global view 22

23. Haifa Herzliyya 90 KM: Stesso Range as in Silicon Valley Tel Aviv Gerusalemme 23

24. Italy Innovation 40-60% below comparable nations EU 27 “European Innovation Scoreboard” 0,55 0,50 0,35 Source: European Community:“European Innovation Scoreboard 2008”

25. R&D Gap is in the Private Sector ) R&D as% of GNL State and P.A. Private Companies Svezia Giappone Stati Uniti Germania Francia Canada UK Italia 0 1 2 3 4 Fonte: Intesa Sanpaolo, Servizio Innovazione della Divisione Corporate su dati OECD 2005 - The Economist - August 2007

26. Why should we worry about High Tech? SUNRISE Industries? SUNSET industries? Innovation and high tech can be as high in New economy as in old economy! Process vs Produc!

27. Outline Research, Innovation and Venture Capital Technological Opportunities driven by Collaboration and Research: The New Innovator!

28. The Enabling Technology: The Emerging IT Scene Infrastructural core Sensory swarm Mobile access

29. Predictions • 5 Billion people to be connected by 2015 (Source: NSN) • Web2.0 • The “always connected” community network • 7 trillion wireless devices serving 7 billion people in 2017(Source: WirelessWorldResearchForum (WWRF) • 1000 wireless devices per person? EE Times, January 07, 2008 [Courtesy: Niko Kiukkonen, Nokia]

30. The Birth of Societal IT Systems: Complex collections of sensors, controllers, compute and storage nodes, and actuators that work together to improve our daily lives

31. The Cloud • A multi-year tectonic and disruptive shift • Proprietary Bottoms up analysis leads to $100bn opportunity • Themes driving the shift: • Cloud and Mobile…made for each other • Cloud interoperability • Security as a Service • Mega-bandwidth and Intelligent Networks • Collaboration & Social Networking • Platform as a Service • Private Clouds: Old wine in new bottle

32. The Cloud! • Going back to centralized computing from distributed computing…like utilities • Delivering personal (e.g., email, word processing, presentations) and business apps (e.g., sales force automation, customer service, accounting) over the internet via a subscription model. • Cloud computing has been made possible by the shift to Internet built on Web-based standards and improvements in hard drives, processors, and Internet speed • Transfer of capital, implementation and maintenance risk

33. Massive Resources are Virtualized

34. Challenge of Integrating Intermittent Sources T. Boone Pickens Wind Farm Sun and windaren’t wherethe people – and the current grid – are located! www.technologyreview.com

35. The Big Switch: Clouds + Smart Grids Computing as a Utility Energy EfficientComputing Embedded Intelligence in CivilianInfrastructures Computing in the Utility Large-scale industrializationof computing

36. Energy + Information =Third Industrial Revolution “The coming together of distributed communication technologies and distributed renewable energies via an open access, intelligent power grid, represents “power to the people”. For a younger generation that’s growing up in a less hierarchical and more networked world, the ability to produce and share their own energy, like they produce and share their own information, in an open access intergrid, will seem both natural and commonplace.” Jeremy Rifkin

37. Towards Integrated Wireless Implanted Interfaces clock Moving the state-of-the-artin wireless sensing memory regulator DSP Tx LNA ADC electrodes Power budget: mWs to 1 mW [Illustration art: SubbuVenkatraman]

38. Engineering Tomorrow’s DesignsSynthetic Biology • Development of foundational technologies: • Tools for hiding information and managing complexity • Core components that can be used in combination reliably 38 The creation of novel biological functions and tools by modifyingor integrating well-characterized biological components intohigher-order systems using mathematical modeling to directthe construction towards the desired end product. “Building life from the ground up” (Jay Keasling, UCB)Keynote presentation, World Congress on Industrial Biotechnology and Bioprocessing, March 2007.

39. Microbial Synthesis of Artemisinin Off-the-shelf parts? HMGS BioShack idi atoB PMK tHMGR MPD MK ispA HMG-CoA AcCoA ADS AcAcCoA Mev Mev-PP DMAPP AMO CPR FPP Mev-P IPP Artemisinin

40. A Roadmap for Synthetic Biology • An educational program (Berkeley (lead), Harvard, MIT and Stanford) • To train the next generation of bioengineers • A research program • To determine how to set standards • To learn how to develop standard components • A BioFAB • To construct biological components and offer them open source • Applications

41. Applications of Synthetic Biology Energy Crop • Water saving • No fertilizer • Doubled photosynthetic efficiency • Biodiesel and biojet fuel • No compromise • Fully compatible with existing infrastructure • Natural product drugs • Capture all of the chemistry in nature • Construct a microbe that canproduce any natural product

42. Amyris • Amyris had its technological foundation in 2001 in the Keasling lab at Berkeley, when Jay Keasling and his team of post-docs pioneered a methodology to produce isopentenyl pyrophosphate, at rates with commercial potential, from yeast-fermented sugars. • Keasling’s magic bug, genetically enhanced from a soup of DNA obtained from bacteria and the plant world, is a five-carbon base chemical and a high-value target in the world of what is now known as the field of renewable chemicals — its a path to isoprenoids, which are themselves a family of some 50,000 molecules that have applications or pathways for pharmaceuticals, fragrances, cosmetics and fuels. • Keasling filed the patent in 2001, and Amyris itself was eventually formed and funded by 2006 with $14.1 million in Series A investments from Kleiner Perkins and Khosla Ventures among other early backers.

43. IPO in 4° Quarter 2010 • From 680Mil cap to 1.265Bil today

44. Raffaello Sanzio, The Athens School The SCIENCE-Application Dilemma

45. Teamwork!!!

46. Educational Challenge