The incubator

Taking an innovation from the laboratory to the marketplace is no easy task. It requires sound business judgment, secure funding, an established plan and the personnel to carry it through to commercial reality. Too often in the past universities have allowed the eureka moment and the possibility of a successful product to be wasted through naive investment or overspending in the initial stages. Fortunately, though, the days of great UK ideas falling at the first hurdle appear to be numbered, and across academia the technical expertise, commercial nous and imagination required to nurture an idea from concept to finished product are flourishing. Nowhere is this more evident than at Imperial Innovations, the impressively successful technology transfer arm of Imperial College, London. By helping academics realise the full commercial potential of their work, the company has, since 1986, created over 60 spin-out firms and attracted £175m of external investment, creating over 550 jobs. Traversing this line between product development and business acumen is Brian Graves, the company’s enthusiastic head of engineering and physical sciences technology. A trained engineer with a background in business strategy and product development, Graves heads a small team responsible for looking at inventions, identifying whether the technology should be licensed or spun out, organising the incubating teams and working on the funding strategy. The key to the organisation’s impressive track record is, said Graves, the emphasis it places on the incubation of companies. ‘We put a lot of time and effort into developing the companies. We are committed to developing real products, rather than a fashionable bit of technology that you can dress up and sell on to unsuspecting investors.’ But despite the company’s success, spotting a commercially viable technology doesn’t get any easier, said Graves, adding that there are no hard and fast rules to developing a successful spin-out: ‘Because this is all at a very early stage and cuts across a huge range of applications, it is difficult to be prescriptive. But having had a career in product development in mature engineering industries, one tends to be more imaginative about how the technology can be applied. ‘You cannot really discriminate between what is going to be successful or not,’ he continued. ‘It’s a process of iteration in that you get a sense of where the technology is going to have an application and benefit.’ This iterative process has served Imperial Innovations well over the years. Ceres Power, a medium temperature solid oxide fuel cell derived from research at Imperial College’s Department of Materials, was floated in November 2004 and now has a stock market value of £136m. Likewise, in early 2005 Graves spotted the spin-out potential of research conducted by the university’s Prof Colin Caro, who demonstrated how arterial geometry causes the flow in blood vessels to swirl and suppress stagnant regions which are preferred sites for the development of vascular disease. This led to the creation of two companies: HeliSwirl Technologies, which is using this knowledge for applications in the oil industry, and Veryan Medical, which develops medical devices for patients with vascular disease. A promising one for the future, said Graves, is the emerging field of body sensor networks. This technology, under development at Imperial’s Department of Computing, concerns the use of wearable or wireless implantable sensors to monitor vital signs in a user’s body. Preliminary work has led to the development of an ear-mounted sensing device for joggers, which contains two accelerometers for recording gait and a heart-rate monitor. Once the user has finished exercising, data from the sensor can be downloaded and performance and running style analysed. The device is currently being trialled by a UK group of orthopaedic patients. Graves said that it could also be used for a number of medical applications and to monitor people working in hazardous industrial environments. But though successful, Imperial Innovations hasn’t resisted change, and has been innovative in pursuing and securing funding. Last year, for instance, it sold a 29 per cent chunk of the company to private investors — ploughing the results of this deal into a number of spin-out interests. It has also increasingly begun looking outside for deal-flow, a process encouraged by contracts with the Carbon Trust and Waste and Resources Action Programme (WRAP) for providing commercialisation and incubation services for low-carbon and recycling technologies. ‘We have had an increasing interaction with external businesses as a result of that and it has whetted our appetites to look beyond just Imperial,’ Graves explained. This change in approach isn’t unique to Imperial Innovations. Graves claimed to have noticed a cultural change throughout academia over the past few years. ‘Universities are improving. There is a larger cadre of people in the business who are more experienced. I have been involved in innovations for five years, and in those early days it was noticeable how, from the point of view of recruitment, it was very difficult to find appropriate experienced people. But today there are increasing numbers with technology transfer experience. ‘I also sense a lot more understanding of IP and its role and value, and the importance and need for innovation in business in a way I haven’t seen in the past.’ Graves cited the progressive reduction in company R&D budgets as a contributing factor to this. placing pressure on in-house resources has led to a more strategic approach to identification of innovation and technology, forcing companies to think harder about where to get their technology from and how to deploy it. The disparity between university and corporate spin-outs was the subject of a report by the British Venture Capital Association (BVCA) at the end of 2005. Its primary findings revealed an imbalance in funding between university and corporate counterparts. Graves, however, believes universities with access to research facilities are in a stronger position since companies are reluctant to gamble on a ‘mere’ patent, preferring tangible evidence of what the technology can do. With access to proof-of-concept funding, the technology is developed as far as possible before a spin-out is created. ‘Universities are in a better position to do the early development work,’ said Graves, ‘but when you get to the commercialisation, the field trials, pre-production prototypes and building up working capital — where you spend a huge amount of money — then that is where industry has the better resources.’ Perhaps so, but with Graves’s knowledge and shrewd judgment, Imperial Innovations is well placed to guide its technology into the marketplace for a long time to come. ‘Its always fascinated me how a supplier understands what a customer needs and then harnesses an organisation to create a product. It is all about being able to pre-empt what is useful to customers,’ he said.