ISM University of Management and Economics
Innovation and Technology Management
University in Vilnius
Lithuania is a “new joiner” to technology transfer process due to political, historical, and economic circumstances. Only from the 1990s, when Lithuania regained independence, its shift towards market economy began. In 2014, Audretsch and Göktepe-Hultén described the Lithuanian framework as ‘no special legal framework for patenting at universities – internal regulations within the universities’. This suggests that in Lithuania, technology transfer between academic organizations and business is quite a new phenomenon and still not a well-developed field. This may also be one of the reasons why the innovation level is rather low in Lithuania, and why Lithuania lags behind other members of the European Union (25 out of 28) (Innovation Union Scoreboard, 2015).
In this paper, we first look at the importance of the technology transfer process and different models for it. Then, to analyse issues in the technology transfer process in Lithuania and how the situation could be improved, we look at the more successful examples of Estonia and Belgium, and compare it to the technology transfer process in Lithuania. Estonia is particularly relevant in our case, because despite having the same political and historic background, it performs better and ranks higher in the Innovation Union Scoreboard (19 out of 28) (Innovation Union Scoreboard, 2015). Finally, we provide a discussion based on our findings as well as suggestions on how the technology transfer process in Lithuania could be improved.
2 THE GROWING IMPORTANCE OF TECHNOLOGY TRANSFER
The importance of technology transfer (TT) has been increasing with the growing need for modern technologies, innovation, inventions and R&D. It is also an important factor for sustaining the economic growth of a country. (International Intellectual Property Institute, 2010). The importance of innovation, and hence the importance of a TT-process, is illustrated in figure 1 below. Prosperous countries like Switzerland, Germany, Japan, etc – are all in wining positions in innovation.
In order to understand the impact of the technology transfer process on innovation performance, it is important to look at the generic technology transfer processes and different frameworks for implementation. In addition to this, the question of ownership and protection of intellectual property (IP) must be considered.
In general, the technology transfer process is managed by technology transfer organizations and other intermediary organizations. These organizations normally have three main functions: funding and research, intellectual property protection, and returns.
Below we analyze literature that explains the aim and framework for the technology transfer process and how it is managed and implemented and what are the factors for an efficient technology transfer process.
3 IMPLEMENTATION AND MANAGEMENT OF TECHNOLOGY TRANSFER
3.1 Governance and policy level
Compared to the USA, Europe has a lower level of technology transfer. The so called ‘European Academic Paradox’, described by Tijssen and van Wijk in 1999, means a low level of commercial activity in Europe compared to a high level of scientific performance and investment into research (Audretsch and Göktepe-Hultén, 2014). The European Academic Paradox shows that cooperation between academia and business is very important for technology transfer.
The main issues in the technology transfer process in Europe defined by Audretsch and Göktepe-Hultén, 2014, as well as Sukhochev, 2011, are the IPR regime at the universities, traditional and informal relations, establishing of competence centres, weak structure of technology transfer organizations, and a lack of entrepreneurial motivation among the scientists. This, according to them, may cause the pre-emption of university inventions by the incumbents and may impede new venture creation in respect of the USA.
There are several analytical frameworks on how universities interact with companies, government and institutions (Mowery and Sampat, 2006):
There is no-one-fits-all approach on the European and global level (Mowery and Sampat, 2006). However, there two key common factors: the higher share of researchers that are employed by the industry, rather than by higher education and co-authorship.
As argued by Mowery and Sampat, 2006, most commercially significant inventions come from non-academic research. However, in most countries, industry and university co-authorship in scientific publications has significantly increased over the years (Mowery and Sampat, 2006). This provides support for the ‘Mode 2’ and ‘Triple Helix’ frameworks – research collaboration between universities and industry is growing throughout the industrial economies.
Audretsch and Göktepe-Hultén, 2014, discuss that many industrial firms rely more on collaborative research with universities, instead of conducting basic research in their own laboratories or asking universities to solve their problems. This is due to the fact that for most industries, patents and licenses involving inventions from university or public laboratories were reported to be of very little importance, compared to publications, conferences, and consulting (Mowery and Sampat, 2006).
Although most commercially significant inventions come from non-academic research (except biomedical and biotechnical branches), university research was rated as ‘important’ or ‘very important’ for industrial innovation activities (based on the R&D Managers’ Survey) (Mowery and Sampat, 2006). Research groups, universities, and scientists often engage in competence centres or joint projects with several companies from within the same industry or complementary industries (Audretsch and Göktepe-Hultén, 2014; Mowery and Sampat, 2006).
Analysis by Audretsch and Göktepe-Hultén, 2014, suggests that the key factors which may contribute to the pre-emption of the university inventions by the incumbents and may impede new venture creation are:
- The IPR regime at the universities;
- Traditional and informal relations;
- Establishment of competence centres;
- Weak structure of TTOs;
- Lack of entrepreneurial motivation among the scientists.
3.2 IPR protection
Audretsch and Göktepe-Hultén, 2014, identify IPR protection as a very important factor in order to protect academic research. Whereas Mowery and Sampat, 2006, conclude that despite governmental ‘push’ to universities to patent or license their research, it provides very little benefits.
Four different regimes of IP ownership can be identified at European level (Audretsch and Göktepe-Hultén, 2014):
- University ownership (similar to the ‘Bayh-Dole Act’ based system in the USA);
- Organizational ownership;
- No special legal framework (internal regulations within universities);
- Professor’s privilege (the Swedish example).
It is possible to see a shift from the dual IP ownership system, where IP rights are owned partially by universities and professors, to being owned by universities only (for example, Austria, Belgium, Germany, Denmark, Finland, Hungary, Norway) (Audretsch and Göktepe-Hultén, 2014).
Generally, patenting by universities can be classified in two main groups: university-invented patents and university-owned patents (Audretsch and Göktepe-Hultén, 2014).
In Sweden, for example, a professor’s privilege exists allowing university researchers to retain IPR of their research results (Audretsch and Göktepe-Hultén, 2014).
3.3 Implementation of technology transfer
Sukhochev, 2011, analyses, how to transfer the university’s IP from liability into a valuable asset. The author measures it by looking at the transfer commercialization profitability (transfer income – development/IP expenses). Sukhochev, 2011, argues for the importance and need of a concrete structure for supporting the complicated process of technology transfer. Also, he points out the importance of interactive methods for management of disclosure, IP protection and licenses, as well as interaction of the participants in the innovation process. The author distinguishes the main parts of the technology transfer process (Sukhochev, 2011):
- Research management;
- IP handling;
- University IP marketing;
- Government and industry collaboration;
- Business incubation;
- University joint ventures creation.
The motivation of inventors (eg. prizes, options, professional promotion) as well as technology transfer managers (bonuses for licensing deals) shall be developed and introduced to support technology transfer (Sukhochev, 2011). Similar techniques for motivation were also discussed by Audretsch and Göktepe-Hultén, 2014.
For the issues identified above, Sukhochev, 2011, highlighted the main “ingredients” for a successful technology transfer process:
- Establishment of a long-term mutually profitable cooperation between private sector and the government.
- Marketing and promotion of university IP, skills, expertise for business.
- Publishing university achievements in the sphere of innovation, which is also an important part of know-how exchange, and directly supports university innovativeness.
- University spin-offs are not only a way for the commercialization of university’s technologies, but also one of the most effective ways for improving the quality of education. They also support the creation process of new hi-tech jobs, and the development and promotion of the university brand.
Due to the reasons mentioned above, Sukhochev, 2011, suggests universities should pay more attention to business incubation and entrepreneurship development.
A literature review leads us to these key findings:
- The key ingredient of successful technology transfer is establishing long-term and mutually profitable cooperation with private sector and government (Audretsch and Göktepe-Hultén, 2014; Sukhochev, 2011, Mowery and Sampat, 2006). This suggests the importance of mediators, such as technology transfer organizations, for the technology transfer process and their role as enablers of connections between universities, government and business.
- An established structure is important for the technology transfer process (Sukhochev, 2011; Audretsch and Göktepe-Hultén, 2014). A well-structured process is much easier to follow and implement, which suggests that all parts of the process should be clearly defined.
- There is no agreement whether IP protection of universities research has a significant benefit for universities. However, patents and licenses for commercialized inventions or innovations should be claimed.
- University research was rated as important for industrial innovation activities (Mowery and Sampat, 2006). There is a common agreement between all authors, that university research is a valuable tool for industry and it supports constant development.
4 SUCCESSFUL TECHNOLOGY TRANSFERS PROCESSES
Based on the Innovation Union Scoreboard 2015, Belgium is the innovation follower in the EU (9 out of 28). The Flanders region is the most advanced; it has strong sectors for life science and biotechnology. There are leading manufacturers and business (63 biotech companies), universities, R&D institutions, and venture capital; as a result innovation is well established. The Country is second in the world in biopharma exports (Geerts, 2013).
The technology transfer process in Belgium is based on community governments, which means that each municipality governs the technology transfer based on different systems. In the Flanders region all knowledge created by university staff is owned strictly by universities (Göktepe-Hultén, 2014).
One of the biggest structures and best known examples of the Belgian technology transfer success is the Flemish Institute of Biotechnology (VIB). It was established in 1996 and cooperates with four universities. It joins the best experts working in life sciences into one ‘institute with no walls’. For invention commercialization, VIB has a technology transfer center (TTC) which serves four universities (VIB website, 2016). The team of the TTC is composed of sixteen people divided into three groups: 1) innovation management (identifies inventions, record of invention, analysis of freedom to operate, helps with licensing and new company establishment); 2) technology transfer (invention sourcing, business partner searching, negotiation with business, ‘sales pitch’; and 3) commercialization (looks for investment, identifies commercially valuable inventions etc). (EETBio, 2011).
The VIB TTC’s mission and vision gives attention to three key factors:
- Inventions should have commercial value.
- Inventions should improve social and economic situation, in order to reach that ‘excellence science’.
- Motivated scientists should be present.
There are around fifty inventions annually, and since establishment, the VIB TTC has produced over 680 inventions. Invention screening goes through the VIB TTC team, without any external support. Specialists spend ~30% of their time on this, and there is at least one monthly meeting with team of scientists (Kurgonaitė, 2015).
Another interesting fact regarding the Belgian Technology Transfer process is that a few special degree programs were introduced in the country in order to support implementation and structure of the technology transfer process (Saragossi and van Pottelsberghe de la Potterie, 2003).
Estonia, the most innovative of the Baltic countries, and at the same time, one of the smallest (about 1.3 million), stands as number nineteen in the Innovation Union Scoreboard 2015 and is defined as a moderate innovator.
Technology transfer, research, development, and innovation systems in Estonia were established at the beginning of 1990’s. Nowadays, Estonia’s RD&I strategy is defined in the guideline document ‘Knowledge Based Estonia 2014-2020’ (European Commission Research and Innovation website, 2016).
Generally, innovation and R&D in Estonia are among the priorities of the Estonian Reform Program ‘Estonia 2020’ that aims to increase R&D investments up to 3% of annual GDP (Estonia 2020, 2016).
Despite being small, Estonia has already earned the nickname of ITC Center in Europe. Estonia is especially well known for ‘Skype’, ‘Kazaa’ and projects like ‘iRegions’ (international collaboration based setting up so-called Living Labs to create favorable real-world conditions for the development and deployment of new internet and mobile technologies), ‘Accordance’ (Tallinn-based company, Euprocom, is developing an ultra-high-capacity optical network capable of reaching data transfer speeds of up to 100 gigabits-per-second (Gbps)) and ‘BalticGrid-II’ (deployed technologies that today are enabling researchers to harness the distributed processing power of grid computing) (European Commission Digital Economy and Society, 2015).
When discussing the technology transfer process in Estonia, it is important to note that open-mindedness, flexibility, and variety of different structures, are available for both researchers and business. There is not a strict system to define ownership of IP created by university researchers; each case is different and defined by a separate contract (Kersti Peekma, Tallinn University of Technology, 2016).
4.1.1 Tartu University Town
Tartu university town is the most developed and key center for innovation and R&D in Estonia. The key priority for innovation in Tartu is biotechnologies and R&D connected to them. Tartu has a well-developed structure that connects more than ten different organizations to support innovation and the technology transfer process (Tartu Biotechnology Park AS website, 2014).
All game players of innovation support are closely connected and collaborate in order to create an easy to access and understand system to promote and support innovation and R&D, and assure IP protection. In total, between 2008 and 2014, organizations in the Tartu university town have supported technology transfer projects for more than 2 504 000 EUR (Tartu Biotechnology Park AS website, 2014).
4.1.2 Estonian Business Angels Network (ESTBAN)
Another particular and important organization for technology transfer and innovation support in Estonia is the Estonian Business Angels Network. Established in late 2012, it is an umbrella organization for business angels and business angel groups seeking investment opportunities in Estonia and its neighboring regions with an aim to grow the quantity and quality of local seed stage investments. At ESTBAN, they are looking for startups that need between EUR 20,000 to EUR 500,000 in capital (Tartu Biotechnology Park AS website, 2014).
A business angels network is a well-known tool to increase opportunities for business and science collaboration and new innovative solutions. As they describe themselves, the key request for applications is being innovative and/or inventive. ESTBAN is a full member of the European Trade Association for Business Angels, Seed Funds, and other Early Stage Market Players (EBAN), and Estonian Venture Capital Association (ESTVCA) (ESTBAN website, 2016).
5 TECHNOLOGY TRANSFER PROCESS IN LITHUANIA
Although the importance of technology transfer for economic growth has been long acknowledged, there have still been barriers for successful technology transfer process in Lithuania. This can be illustrated by Lithuania’s standing in the Innovation Scoreboard, where Lithuania ranks only 25 out of 28 member states.
seen that Lithuania has an increasing number of scientific publications, and ranks at the upper end in terms of R&D expenditure in public sector (however, the lower end in terms of R&D expenditure in the private sector). So, when it is about scientific research, Lithuania looks good enough. However, when it comes to real benefits of scientific research for the economy or for businesses, the situation is the opposite – Lithuania ranks at the lower end of patent applications, license and patent revenues, and SMEs innovativeness. This indicates that serious barriers to technology transfer exist in Lithuania.
Lithuania’s shift towards a market economy after 1990s was rather slow comparing to other Central and Eastern European countries (in terms of FDI investment) (Ignatavičius, Tvaronavičienė, Piccineti, 2015). As mentioned above, Estonia, with the same historic and political background, surpasses Lithuania almost twice in the Innovation Scoreboard.
Issues of innovation and technology transfer in Lithuania according to different authors include:
- No clear articulation of the technology transfer management model, no clear articulation of specific and measurable results (Kiškienė, 2009).
- Still rather rare cases of technological developments, eg. laser or bio technologies (Ignatavičius, Tvaronavičienė, Piccineti, 2015).
- Lack of supply and demand for potential commercialisation of scientific knowledge among business (Kiškienė, 2009).
- Interaction between business and universities is a casual and uncontrolled process (Ignatavičius, Tvaronavičienė, Piccineti, 2015).
- The economy is based on small and medium sized companies, which do not have favourable possibilities to use knowledge (Ignatavičius, Tvaronavičienė, Piccineti, 2015).
- Lack of knowledge about technology transfer and IP protection, eg. lack of IP management policy, and lack of internal documentation (Sakalaite and Kiškienė).
- Lack of entrepreneurship (Sakalaite and Kiškienė).
- IP owners lack skills for negotiating and selling their research with business (Director, Sunrise Valley, Laima Kauspadiene, 2016).
- Lack of systemic support (state policy) for technology transfer, especially management of the process (Kiškienė, 2009).
- Lack of highly profiled specialists for technology transfer process support (Director, Sunrise Valley, Laima Kauspadiene, 2016).
The Government of Lithuania has been stressing the importance of innovation and development of high technologies for quite a long time. The Government is an important actor in the technology transfer process because it can create structures and set rules for technology transfer, finance, R&D, regulate IP issues, and take measures to remove systemic errors, eg. create technology parks, incubators (Kiškienė, 2009).
In recent years Lithuania has established five technology parks that bring together scientists, universities, businesses, venture capitalists, and business angels. In general, this is a very positive trend, because technology parks create a platform for cooperation between various stakeholders, makes exchange of information easier and creating an environment for mutual trust. However, technology parks themselves do not guarantee success for the technology transfer process. One of the issues may be that these institutions themselves usually lack entrepreneurship (Ignatavičius, Tvaronavičienė, Piccineti, 2015). Moreover, they do not have any benchmarking system, thus, it is difficult to evaluate their performance, which discourage business to invest (Ignatavičius, Tvaronavičienė, Piccineti, 2015).
In general, technology transfer in Lithuania is based mostly on the Intermediaries model, which means that technology parks are meant to develop interconnections between universities and business (Ignatavičius, Tvaronavičienė, Piccineti, 2015). One of the examples of intermediaries is the Sunrise Valley, which is based on the Intermediaries with business approach model. Sunrise Valley is not only a technology park, but also an incubator for start-ups. It aims to stimulate establishment of new companies and provide consultancy support (Director of Sunrise Valley, Laima Kauspadiene, 2016).
Sunrise Valley was established in 2003. Founding stakeholders were Vilnius University, Vilnius Gediminas Technical University, and leading companies in key target sectors – such as Alna (IT), Bite (telecommunications), Ekspla (lasers); with the purpose ‘to put Lithuania on the map as a location for world-class business engaged in knowledge intensive activities’ (Sunrise Valley website, 2016). Sunrise Valley is one of the five integrated science, study, and business valleys established in Lithuania as part of the innovation development programs run by ministries of Economy and Education (total investments reached ~370 million EUR, which where one of the highest in the EU) (Kurgonaitė, 2015).
Sunrise Valley in Vilnius has the biggest concentration of academic community (15,000 students and 5,000 scientists) and innovative companies active in laser technology, nano-technology, physics, and bio-technologies (Sunrise Valley website, 2016). Although Sunrise Valley can still be categorized as developing, its results are positive. New companies established in Sunrise Valley:
A similar number of companies leave the Valley (mature) annually and ~5% not survive. (Director, Sunrise Valley, Laima Kauspadiene, 2016).
5.3 Drawbacks of process in Sunrise Valley
Despite the abovementioned benefits of Sunrise Valley, it still lacks important characteristics to enable an efficient technology transfer process. One of the reasons might be that it does not predominantly deal with technology transfer. Although it has an officially established technology transfer center, it is not very proactive. The technology transfer center should be more involved with different actors, especially focusing on SMEs, eg. those present in the incubator of Sunrise Valley, to advocate, consult, and promote technology transfer, should devote resources towards this aim.
In addition to this, cooperation between business and universities is still not a structured and well managed process (Ignatavičius, Tvaronavičienė, Piccineti, 2015). In our view, institutionalization of this cooperation is important, because otherwise cooperation is chaotic, business needs are not well articulated and understood, and results of scientific research are not promoted. Sunrise Valley should become a structure for conducting business rather than just a platform for cooperation.
A large portion of the projects in Sunrise Valley are supported by EU funds. This might be seen as a sign that businesses do not see Sunrise Valley as a credible partner and do not invest in joint-projects. This might be detrimental to the technology transfer process, because the success of technology parks also depends on involvement of a large number of businesses into the process.
Finally, Lithuania still lacks clear, stable and systemic support for technology transfer. The Government support is sometimes more declarative, policies keep changing, important decisions take a long time to make. Technology transfer is affected negatively because there is no clear articulation of the technology transfer management model, and no clear articulation of specific and measurable results (Kiškienė, 2009).
6 DISCUSSION: COMPARING LITHUANIA WITH OTHER EXAMPLES
Although there is a no-one-fits-all approach (Mowery and Sampat, 2006) to technology transfer, certain factors have been identified which can explain the difference between technology transfer in Belgium, Estonia and Lithuania.
First, the VIB in Belgium, the Tartu university town, and Sunrise Valley, not only create a platform for cooperation between business and academia, they all provide a great deal of support for innovation and its development. However, Belgium and Estonia seem to have a better-developed technology transfer structures, especially more efficient technology transfer organizations. The importance of the technology transfer structure has been noted by Sukhochev, 2001. The most evident difference is efficient technology transfer organizations. In Sunrise Valley, the technology transfer centre does not have employees who are dedicated to the functions of the technology transfer centre (Director of Sunrise Valley, Laima Kauspadiene, 2016). The centre, moreover, is not very proactive in supporting and developing technology transfer.
It must be noted, that there is not a completely defined model, how exactly and from what supporting structures the technology transfer process should be composed in order to reach maximum utility for innovation and R&D. However, evaluating the examples in all three countries analyzed, we can see, that the more advanced and the more developed the structure for technology transfer is, the more real value it can bring to both business and researchers. Comparing it to the Estonian and Belgian examples, we can see, that close collaboration between different players and founders of the supporting structures are the key factors, that lead to a successful operation of the structures. This can explain why the results of technology transfer process in Belgium and Estonia are better than in Lithuania. On the other hand, even though Sunrise Valley is still in its developing stage, we can see real value – forty-six new businesses brought into operation in the last three years. It is important to note that the Director of Sunrise Valley, Laima Kauspadiene, raised concern about the need to have highly profiled employees working in the organizations. This is an example of Belgium, where different study programs exist to prepare technology transfer specialists.
Secondly, after analysis of the technology transfer process in Lithuania, Belgium, and Estonia, we can see a strong tendency towards ideas of Mowery and Sampat, 2006, where intellectual property firstly needs to be useful. Even though the technology transfer process cannot be performed smoothly without IP protection, there is still a question if all inventions, innovations, and R&D have to be protected, and if protection brings fruitful results for universities and researchers. Even though the Lithuanian technology transfer process is not settled and IP protection is applied differently in each case, there can be a favourable side to this. Different situations and different products or processes usually require flexibility. Taking into consideration that in Lithuania innovation management and technology transfer are still in a ‘new-born’ stage, flexibility allows business and researchers to easily come to agreement and are more favourable for attracting business investments. It is hard to compare with Belgium, due to the completely different political, historical and economic background and duration of evolution of the technology transfer process. On the other hand, Estonia is a great example of the successful development of the technology transfer process and as we can see, Lithuania now has a similar model – as different project intellectual properties ownerships and protections are defined by contracts. This type of model seems to be much more attractive to business.
Finally, an example of the Estonian Business Angels Network with a successful investment in 65 businesses in 2014, leads us to believe that in Lithuania a similar network could bring real value for new SME creation and innovation enhancement. As described by Laima Kauspadiene, Director of Sunrise Valley, another key concern in the Lithuanian technology transfer process is lack of business engagement, which leads researchers to seek funding in European or/and National funds. Thus, more financial support from business and an established dialogue could ease and strengthen the technology transfer process and bring more economic gain to all players: government, researchers, universities and business.
7 SUGGESTIONS FOR SUNRISE VALLEY
Improvements in the technology transfer process in Sunrise Valley could be implemented to increase innovativeness and performance of the economy:
- It is important to have a defined structure with clear respons-ibilities. Most evidently, Sunrise Valley lacks a technology transfer centre which would have dedicated staff and be proactive. Clearly defined responsibilities would help to attract more trust from business. and collaboration in the process.
- To support technology transfer, as was noted by the Director of Sunrise Valley Laima Kauspadiene, there should be established a study programme to prepare young specialists of technology transfer to support an organizations development process and ensure qualified employees’ choice.
- The business angels network should be given special attention, to support and develop it, to allow for communication and collaboration between researchers and business in order to obtain business investments.
- There is no significant need to change the technology transfer process regarding intellectual property protection. It is more business friendly to continue defining intellectual property ownership based on different projects and particular needs. As Lithuania still lacks financial business injections, no change in the system can attract more business investments.
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