DR JEFF SKINNER AND DR EDERYN WILLIAMS

TUESDAY 19 NOVEMBER 2002

  600. I accept that may not be the main motivation, but do you think universities are exploiting at full commercial potential?
  (Dr Williams) No, absolutely not.

  601. And if you could pick one thing that you think is preventing them doing that, what do you think the main thing is?
  (Dr Williams) It is primarily expert people.
  (Dr Skinner) That is right. It is the limitation on the number of individuals who we have in the tech transfer offices to work alongside the academics. They are spread too thinly. Do not think of commercialising technology as something that stands alone. We have a bit of IP, we have a patent and then it is brought to our attention and then we try to exploit it and find licensees. The relationship starts an awful lot earlier when we are working with academics, understanding what it is they have, advising them on a patenting strategy. Also, looking not just at the technology they have but sometimes the expertise they have, because those two are packaged together in any deal that you do, and helping them to develop collaborations with particular companies. The whole thing comes as a package. As somebody said, you have to be near by; it is very much a contact sport, as we say. At UCL we are spread very thinly. This somewhat goes against what Dr Williams said about why do universities do this, but universities are investing in these people for the best return to the university, both financial and reputational, whereas the benefit in terms of getting the technology out there is a benefit, if you like UK plc. It is not a priority area for universities to invest very heavily in technology transfer people; there are other priorities which may not match with the optimal level of getting technologies out of universities and into commercial use. I do not think I have said that very well but I hope you understand it.
  (Dr Williams) You asked a previous witness how many universities were doing this well and we agreed that we thought it was about a dozen. What I am noticing, for instance, is that Keele University and Aston University in our region have just recruited their first technology transfer people and they got them from Manchester and Oxford respectively. There is now a transfer market between these leading centres where anyone who wants to set up a technology transfer office sees it as easier to take somebody from one of the established offices than to train somebody up because it is not a very obvious and easy thing to train somebody up on.

  602. Would it not have been sensible for the successful university tech transfers to, in effect, commercialise themselves and offer themselves to other institutions? We have something like 190 different universities or places that could claim to be in that position.
  (Dr Williams) Not quite that many.

  603. A hundred and forty, is it.
  (Dr Williams) Yes. I am glad you mentioned that because I wanted to mention a project that we have in the West Midlands funded by Advantage West Midlands and the Higher Education Innovation Fund called Spinner which is the eight universities of the West Midlands. It is led by Warwick and Birmingham explicitly trying to pull up the standard of the other six, which is why, for instance, I was up in Keele doing the interviewing for their first technology transfer person. We are, indeed, paid to give consultancy to the other six universities who have set up their tech transfer offices.

  604. Sorry, you are not answering the point I am making. What I am saying is, why do you have to reinvent the wheel for every institution?
  (Dr Williams) No we do not.

  605. Would it not be more simple just to have technology transfer companies that could home in on particular universities without having to have the overheads and the staffing arrangements. Given the number of institutions, you are going to have a very variable quality. Would it not be better for them to commercialise themselves rather than being an in-house facility?
  (Dr Williams) We do actually believe in the in-house facility because we believe the link between the tech transfer people and the academics is terribly important. Being on campus, being part of the same institution, being available at very short notice is part of the process.

  606. But with respect you would say that anyway, would you not?
  (Dr Williams) No. I genuinely believe it. We had this argument about this Spinner thing where we were arguing through the point of should we have a regional office that acted for all eight universities, or people in each one. We decided in the end that this link between the tech transfer person and the academic was so important that we would do it in terms of a virtual team. We see the eight universities and the people in the eight universities working almost together, under one project.
  (Dr Skinner) I think the location of these individuals is very important. Then you have to separate out who is their employer, if you like. I run UCL Business which is much wider than just the tech transfer. It is all the high funded business development people who are generating activity in all sorts of different fields, commercial interactions, including short courses, including all the contract research side, as well as generating opportunities for pure technology transfer. I run the contracts office; I run the technology transfer unit as well; I run the consulting arm as well. The interaction between those four units is very, very close. You never do a deal which is pure technology. You always do a deal which is a bit of technology, or a bit of contract research, or a bit of consultancy. All these things are woven in to any one deal. These units have to be very much co-located. Who they are owned by and who they are run by and report to is a different matter. How would you incentivise that other company or the unit that was actually running these individuals? It is quite a difficult thing. Are you going to incentivise and make them into a purely profit making organisation? Or is it going to be some sort of mixed objective of this sort of regional body?

  607. It was you who suggested the regional one; I did not suggest that. The thing that is a danger, surely, in technology transfer is that you spread yourself rather thinly across a number of scientific disciplines and you might not really know that much about any of them. I am arguing the devil's advocate for an alternative model of companies that would go across the country, home in on institutions at the invitation of the institution and have someone who is an antibody specialist but not Cambridge specific, for example.
  (Dr Williams) There are people like that; we employ them as consultants. There is a lot of money flowing through our office now. We are paying third parties to do those sorts of jobs on our behalf. That is where the greater funding is helpful. We used to write quite a lot of business plans ourselves a couple of years ago and one of the aspects of the HEIF fund is that now we are mainly contracting other people to write business plans, people who are slightly more expert than us in a particular area. So you are absolutely right.

  608. In fact the hands-on model that Dr Winter was suggesting may not be quite as appropriate in some institutions.
  (Dr Williams) I was very interested by Dr Winter's comments about the bureaucrats. A lot of academics talk like that. I see part of my job as helping the academic inventor to overcome all sorts of bureaucracy (you get it at the VAT office, the tax man or the university itself). That, again, is part of the business of being localised and that is where a consultant could not really do the job.

  609. It is also perhaps recognition that sometimes academics are innocents abroad.
  (Dr Williams) Absolutely.
  (Dr Skinner) Also it is quite hard to negotiate from the industrial side with somebody who is actually very, very uncomfortable and new to all the issues. Incidently, we do this for some of the London universities. We manage the IP for Birkbeck, for instance, but it has to be by their choice, not ours.

  610. Just to explore institution to institution, what sort of links do you have to exploit research jointly? Do you have joint projects which help you between one institution and another? You said you are a bureaucrat, but do the bureaucrats introduce one set of researchers to another to exploit together?
  (Dr Williams) There are a lot of multi-university research projects. I have one at the moment with nine universities involved in silicon germanium, as it happens. We try to establish good networks between ourselves so that we can negotiate inter-institutional agreements quickly when something exploitable comes up. I think this works quite well in many instances.
  (Dr Skinner) I introduce a lot of academics to each other because I find that that person is working on that, and that person is working on that, and then I try to make the link between them to get them talking to each other. But it is very difficult to do much more than that. I have always said you can combine technologies fairly easily, but it is much harder to combine technologists. They have to want to work together and so the most we can ever do is to effect the introduction and hope that they find something in common.

  611. Are there success stories? Are there gains here or are there dangers as well?
  (Dr Skinner) You have to ask who should be combining these technologies. In one sense you can say that it is the universities that should be working together to combine these technologies because it sounds sensible to them, but there is another view that says it should be the people who license these technologies who are saying: We know the bundle we want, we will be the ones who create that combination of research groups. I think we would have to be very careful before we started in universities thinking to ourselves that that would be useful if we bundled technologies for various institutions.

  612. Can I just explore the sort of support you give to scientists regarding financial help and advice, legal advice, management expertise, help with marketing? Can you say something about that? We heard earlier on—I do not know whether you were in the room—that it is patchy across universities. What is your experience?
  (Dr Williams) It is patchy because there are so many things that we have to do effectively. I made a list of a dozen of these. It is everything from identifying the markets where technologies could be exploited in, market analysis and all those things. It is all the mechanisms of setting up spin off companies; it is all the details of setting up licences; it is acting as interim managers; it is going out and finding venture capital. We basically have to do the lot which is part of the reason why you either have to have a big office or you have to have some virtual team. It is a challenging task because, generally speaking, the academics do not have any of those skills and yet the technology is not going to move forward unless they are introduced in the right way.
  (Dr Skinner) We do find experts. The last speaker you had was saying that they would not ever want a tech transfer office to draw up a patent because they do not have the expertise. Of course we do not. It is daft; we would never even dream of it. We are the ones who would look for the best patent agent with the most relevant experience from the number of firms we work with and we would say: You work with that patent agent; we do not do that. I think sometimes there is a danger in the land of the blind that the one-eyed man is God and if we are not careful we are considered not to be experts at everything, which we are not. We have to combat that and realise that actually we are a jack of a very wide number of trades and when we need experts, as early as possible, we need to find the master in the field that is critical to the exploitation of the technology at that time.

  613. Do you offer sector-specific help as well, apart from general services?
  (Dr Williams) Yes, we have our technology specialists, we have specialists in chemistry and materials, in IT and electronics. Once you get your office up to about eight or 10 people it is possible then to have a reasonable spread of specialisms. Then you can bring in superspecialists as consultants when required.

  614. One point on facilities. We heard a wee bit about LMB and how it had been able to offer rooms. It seemed from the previous witnesses' experience that sometimes accommodation was only temporary in character to get a job done, kind of thing. Do you have that sort of flexibility in availability?
  (Dr Williams) We are located on the University of Warwick Science Park ourselves and we work very closely with the Science Park. Spin off companies or other users can get in fast. We are working at the moment on specific bio-incubator space which they do not currently have but given the number of biotech companies which are now spinning off they now see a case for doing.
  (Dr Skinner) For UCL space is an issue. We do manage to find fairly limited facilities for a fairly limited period of time within the academic's own research environment, if those are available. Thereafter it becomes very difficult. The stage after that is easy because they go off to Cambridge or Oxford or wherever you like on the science parks. This is for spin offs, not for licensing obviously. We overcome it but not without a huge amount of energy being put into it which could have been spent better on other things, and time being lost.

  615. Particularly where spin off companies are concerned, what has been the experience of yourselves or your colleagues from universities of the extent to which they have survived or what their exit strategies have been?
  (Dr Skinner) Like when you are lending from a bank you do not want all of them to succeed otherwise you would not be taking enough risks. Another problem we have is with the living dead, the companies who can go on with such a little burn rate, they just stay alive but you know they are never going to do very much. Remember also, that not all the companies that we generate are meant to flourish into great venture capital propositions to grow up and to become huge great things that float. There are very few of those. Out of the 50 or so we have done I would reckon that about eight are venture capital, high growth, which will float and that is where we will take our exit and they will go off and have lives of their own. Another 10 will be very good, aiming for middle sized companies, never experiencing the very high growth, but nevertheless becoming quite nice companies. The rest of them would be ones we wished we had not started.

  616. So that is about a third, or thereabouts, will actually produce a significant return to the institution on the original investment of IP, as it were?
  (Dr Skinner) Probably less than that. I would say eight out of the 50 would do that and then we would have another 10 which we are proud of but they are never going to be producing the major returns back to the institution.

  617. Is that a key measure on which you would expect to be judged in due course?
  (Dr Williams) Oh yes, oh yes. Jobs created or cash returned to the university are both measures on my set of targets.
  (Dr Skinner) Induced investment I am very proud of, technologies that have come out of the institution, sophisticated investors of one kind or another invested in those technologies.

  618. I think we have just about covered everything. Just one last question, Dr Williams, how does Warwick Engineering relate to your functions?
  (Dr Williams) Warwick Manufacturing Group is part of the University. It is one of the departments that we canvas in order to find opportunities and we have spun about three companies off from there in the last two years.

  Chairman: Thank you very much, gentlemen. That has been very helpful.