Thursday 27 October 2016

Campus brain banks' global spin-off

Ireland's campus incubation centres house our brightest and best, who are all working on the Next Big Thing in science, tech and engineering. Simon Rowe investigates what they do and profiles the top 10 spin-outs set to conquer the world

Simon Rowe

Published 15/11/2015 | 02:30

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'Trinity College, has produced more spin-outs than any other Irish university, many of which have become leading companies in their field such as Havok and Demonware in the games sector'

Every Irish campus spinout company dreams of becoming the next Google, Yahoo or Cisco - global behemoths that all started life as university projects.

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But Ireland is not short of its own world-beating campus spinout success stories.

Iona Technologies, which began life in Trinity College Dublin in 1991, is a homegrown poster boy for campus spin-outs. Launched with an initial investment of €4,000, the company became one of the largest top 10 software companies by revenue in the world in less than a decade, with over 1,200 staff in 22 offices worldwide.

Iona's alma mater, Trinity College, has produced more spin-outs than any other Irish university, many of which have become leading companies in their field such as Havok and Demonware in the games sector.

So, if you want to know where the next Google, Iona or Havok will come from, a good place to start is Ireland's campus incubation centres. They are the 'brain banks' which house the brightest and the best talent this country has to offer - the dreamers of dreams who are dreaming up 'the next big thing' in science, technology and engineering.

Ireland boasts 30 campus innovation hubs including eight university incubation centres, 16 Institute of Technology incubation centres, and six university bio-tech incubation facilities. That's a lot of brain power.

All of Ireland's higher education institutes (universities and institutes of technology) have a dedicated incubator facility to develop early stage campus companies. As well as office and research space, campus start-ups have access to expert advice on intellectual property (IP), mentoring, networking and professional services.

Trinity College Dublin, for example, has set an ambitious target of creating 160 start-ups by the end of next year at its new €70m 'creative quarter' which links students and academics with industry partners.

Since 1998 Enterprise Ireland has invested nearly €60m in the establishment of campus incubation centres. At present there are 347 companies occupying 23 EI funded campus incubators employing 1,600 people.

But transforming a great campus incubation idea into a money-spinning spinout is a lot more difficult than it sounds.

Knowledge Transfer Ireland (KTI) was set up in 2013 to solve this problem. It has been a key driver behind Ireland's success in transforming campus blue-sky thinking into commercial reality.

KTI is all about the commercialisation of campus research by encouraging collaboration between Irish universities and business, including the protection and exploitation of intellectual property arising from publicly funded research.

Having a great idea is one thing, but making money from it is an entirely different prospect, says Brendan Cremen, director of enterprise and commercialisation at UCD's campus innovation hub NovaUCD.

"Campus innovation hubs are specifically focused on developing great ideas," he explains. "We are all about identifying great ideas, capturing them and protecting them in terms of intellectual property and then taking them on to the commercialisation stage."

NovaUCD is currently assisting about 30 campus start-up companies at its Belfield hub with another 20 firms in 'next-stage development' at its Nexus hub.

"Research generates good ideas and our aim is to transfer those good ideas into something commercial. But commercialisation of research can only occur well if the research is funded in the first place," says Cremen.

By international standards, however, research funding from the private sector in Ireland is low at just 6pc.

While there are notable examples of industry-backed research such as Glen Dimplex's €12m RealValue energy efficiency project in collaboration with UCD and the €300m O'Brien Centre for Science at the college's Belfield campus, the majority of Irish research funding (65pc) comes from government funding sources. A further 18pc comes from the EU.

On average, the percentage of research expenditure by individual universities derived from private sector sources ranges from about 3pc to 12pc, according to the latest Knowledge Transfer Ireland survey.

Government expenditure on campus science research represents less than one per cent of GDP and funding has declined from a 2008 peak of €938m to an estimated €724m in 2014.

However, Irish universities have chalked up success in winning EU money. Irish institutions obtained 18 European Research Council grants in 2014 worth more than €30m with 10 of these being starting grants.

Business group Ibec has urged campus innovators to up their game in terms of winning EU research funds. It knows that cutting-edge research is vital in order to maintain Ireland's business competitiveness.

"Ireland needs to take full advantage of the opportunities that Horizon 2020, the European Commission's new framework programme for research and innovation (2014-2020) presents," Ibec says.

"With an overall budget of €79bn, there will be significant opportunities for Irish-based companies of all sizes to access grants to support R&D across a wide range of sectors, in particular health, ICT, environment, marine and energy. Ibec welcomes the ambitious national target for securing funding of €1.25bn from this programme."

Brendan Cremen of NovaUCD says the challenge for Irish campus incubation centres is to make their start-ups more investable at an earlier stage.

"Our focus is now on how we make our companies more investable at an earlier stage of their development. One of the challenges globally for university start-ups is that they take longer to mature so the investment from venture capital doesn't come in immediately so they struggle in their early days."

But how does Ireland rank worldwide in terms of its track record in transferring campus know-how into commercial clout?

A European Commission report from 2013 ranked Ireland at the top in an international comparison and scored it highly in other categories.

In a global comparison of 'patent applications' from campus research, for example, Ireland was ranked second only to tech-savvy Israel.

And while Portugal produces the most start-ups per 1,000 research staff in publicly resourced organisations with an average of 6.4 start-ups per 1,000 research staff, Ireland ranked third with an average of 3.8 start-ups per 1,000 research staff. We lie just behind Sweden with an average of 4.7 start-ups per 1,000 research staff.

Brendan Cremen says Irish universities and campus spin-outs are achieving international benchmarks

"We are generating the quantity of companies that we need to generate but now we've got to focus on the quality of those companies such that the investment comes in earlier.

"Certainly from a strategic point of view that is our focus at UCD. We are generating three or four start-ups a year, which is up to international standards. Now what we want to do is, with every one of those four companies that we generate, we want them make them as investable as possible as early as possible and of a higher quality as we go forward each year."

The Government's long-overdue strategy for science, technology and innovation, which is finally due for publication next month, is eagerly awaited as it will signal the future direction for Ireland's campus innovation hubs and their role in growing Ireland's tech economy.

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