Innovation, Investment and Industries Division.dot€¦ · Web viewAs a web based tool VNS can handle tens of thousands of enquiries, creating awareness and demand for innovation

Business DirectorateInnovation, Investment and Industries Division

E: [email protected] Mr A J [email protected]

Your ref: [email protected]

19 February 2013

Dear Mr White

Thank you for your request dated 30 January 2013 under the Freedom of Information (Scotland) Act 2002 (FOISA) for:

“copies of all relevant correspondence between Ms Nicolson, and Paul Hagen ; Ms Nicolson, and Kevin Cullen; Ms Nicolson, and Steven Beaumont, on the matter of a single TTO Office for Scotland and Between Ms Nicolson and any other, and all other persons, on the same matter. Being the matter of the Single Tech Transfer Office, Shared Resources, Univ Glasgow’s role (or putative role) and views on this and related matters and any and all related matters and documents between 2010 to date.” We have now completed our search for the information you requested. Ms Nicolson was a copy recipient in two pieces of email correspondence and these are attached below. We are not aware of any further correspondence involving Scottish Government officials on the proposal you have described.

If you are unhappy with this response to your request, you may ask us to carry out an internal review, by writing to:

Andrew Scott, Director, Skills and Lifelong Learning The Scottish Government 5 Atlantic QuayGlasgow G2 8LU

Your request should explain why you wish a review to be carried out, and should be made within 40 working days of receipt of this letter, and we will reply within 20 working days of receipt. If you are not satisfied with the result of the review, you then have the right to make a formal complaint to the Scottish Information Commissioner.

Yours Sincerely

Karen McAvenue, Head, Innovation and Life Sciences Team

Atlantic Quay, 150 Broomielaw, Glasgow G2 8LUwww.scotland.gov.uk



COPY OF THE ATTACHMENT IN THE ABOVE EMAIL DATED 24/1/11

The Shared Service TTO for Scotland

This proposes a model for the development of a shared Knowledge Transfer Office for Scotland. We propose that a shared TTO Office would:

On the supply-side:- increase the efficiency and quality of the assessment of IP through the use of an investor consortium.- Increase the focus of commercialization onto a relatively small proportion of IP in partnership with our investor consortium and

convert these opportunities to invested propositions..- Increase the efficiency of transfer of the other IP through a shared Easy Access IP portal.

On the demand-side:- Increase awareness of the benefits of innovation amongst Scottish companies through a high profile campaign.- Address the immediate demand using the Venture Navigator Scotland (VNS) web-based business support tool.- Use VNS to identify innovation needs, clusters of demand and then target the appropriate support towards these companies,

increasing massively the number of companies engaged in the innovation process.

We are clear that the model would complement KE activities within individual universities rather than replace them and the objective is to increase efficiency and reduce duplication rather than to replace institutional autonomy or responsibility.

BackgroundThere is an opportunity to create real value through a shared and collaborative approach to Knowledge Exchange across Scotland. Scotland has an excellent research base, generating world class knowledge, but also an extremely vibrant and innovative Knowledge Exchange environment, with a wide range of mechanisms and support available to support university/company engagement.

There is a view, however, that, given the size of the country, a significant amount of duplication has been created, with all universities putting in place all of the mechanisms and all seeking to engage with the same company base. There is an opportunity to rationalize the system by combining, in one location, certain of the KTO functions that are appropriate for sharing whilst leaving in place or focusing those activities best conducted locally within each University.


The proposal involves two, complementary components, one focused on the supply side and how to manage IP, the second focused on the demand side and stimulating greater demand for innovation from Scottish companies.

1. The Supply-side. IP, Developing Opportunities & Doing DealsA core activity of all university KTOs is to review, assess and decide what to do with invention disclosures. We believe that this process should be led by the universities and that the first assessment should be conducted by the institution that owns the IP.

We believe though that the current process is far from perfect and that the information and expertise available to universities for this assessment are sub-optimal. We would propose to make available to all universities a central IP assessment mechanism.

- Collaborative assessment of IP OpportunitiesWe will create a consortium of investor and Angel partners who will collectively review the IP opportunities brought forward and make an early assessment of whether to protect, develop towards licensing or spin-out opportunity.

We believe that some universities will use this as their primary assessment mechanism, whereas others will use it to assess that proportion of their IP where they feel that additional input would be useful. We propose that this approach will ensure that the right level of expert input will be applied to IP from across Scotland and will identify that, relatively small, proportion that has significantly commercial potential.

The consortium would be created from currently active players within the Scottish scene, including the IP Group, Braveheart, Archangel and LINC Scotland. Early discussions with some of these partners indicate that there is a willingness for them to work together.

This centralized and coordinated assessment of the IP portfolios across the Universities will also enable bundling opportunities to be identified, creating opportunities for value creation from the various IP portfolios.

The IP and IP bundles with significant commercial potential will be developed in partnership with the investors and Angels, with their early stage funding being used to develop these opportunities as investible, high growth opportunities.

- IP Without Significant Commercial PotentialThat IP that is identified not to have sufficient commercial potential to be taken forward by the investing partners will revert to the host university for decision on how to take the IP forward. A default option will be that all of this IP will be considered to be offered for free through Easy Access to Innovation mechanisms, ensuring that the IP is transferred to the user-community as efficiently as possible, to support economic development and wealth creation from the industrial base making use of university knowledge and IP.


The Easy Access to Innovation model, which is already successfully transferring IP to companies, is planned to grow using support from the UKIPO Fast Forward competition to offer easy access to facilities, services, reagents and tools through a ‘click-to-buy’ mechanism. The Fast Forward funding would be available to support the creation of this Scottish Easy Access portal, as roll-out of the model is central to the Fast-Forward bid.

The two mechanisms above represent a highly efficient means of assessing IP at an early stage, making use of expert investor partners, and making early decisions around whether the greatest value is created through commercialization with investor partners or by putting the IP into the hands of the company base, through a simple and low cost mechanism, to enable them to create economic value from it

2. The Demand-side – Stimulating Company InnovationIt is well recognized that one of our greatest economic challenges is the lack of investment in innovation amongst the Scottish company base, with BERD in Scotland being significantly lower than that for the UK as a whole.

We propose here an approach to stimulating and creating greater awareness of the potential benefits of innovation to companies and simple, efficient and low cost mechanisms by which they can become engaged and through this increase direct company involvement.

The model is based upon the promotion of companies from innovation unaware status to becoming innovation interested and from innovation interested converting them, through products, services and partnerships, into innovation engaged companies.

Innovation-engaged companies: We believe that in Scotland there are a few hundred companies that are genuinely engaged in innovation with the HE base. These companies are generally highly innovative, successful and understand how to derive benefits from innovation. The potential for creating more value from greater engagement with these companies is limited.

Innovation-interested Companies: These are companies who are interested in the potential for innovation and engagement with the HE knowledge base, but who have not yet taken the first step. Enquiry and contact statistics from Glasgow University and from Interface suggest that there are a few thousand companies in Scotland When we make entry to the system simple (Interface/Nexxus etc) or low cost (First Step Awards/Vouchers/Easy Access IP) we see the numbers of contacts and enquiries increase, showing that there is a latent demand in the Scottish company base. We think that there is significant potential to convert a greater number of these innovation interested companies into innovation engagement and to see competitive advantages develop for these companies and economic benefits to result.

We believe that a more coherent approach to managing this system would deliver benefits of scale and remove significant duplication. A single point of contact for enquiries, networking, vouchers and support would simplify the landscape significantly.


Innovation-unaware Companies: This is the single biggest category of company within Scotland, with our SME base of around 300,000 companies. Whilst many of these companies are not VAT registered and many have no employees, it is still clear that this category of company represents the majority of our economic base.

Whilst we do not know what proportion of these companies would be capable of innovation (broadly defined), what is clear is that the vast majority are not aware of the opportunities for or potential benefits to be gained from innovation. A major awareness raising exercise needs to be undertaken to reach these companies and, as importantly, an offering must be ready for those companies who hear the message.

In the past, a major issue for the innovation system has been our inability to address demand that we could potentially stimulate. For example, if a major PR exercise generated interest from even 10,000 companies, we do not have the infrastructure to be able to respond to the demand, nor necessarily the product offerings to meet the demand. Recognising this issue, Glasgow partnered in a HEIF4 funded initiative called Venture Navigator, led by Essex University and championed by Doug Richard. This £4m project created a web-based business support tool which enables entrepreneurs and companies to carry out web-based assessment of their own businesses, identify development needs and, through Venture Navigator, access web-based content, training material and support. In 2009 SFC funded the further development of Venture Navigator through the SPIRIT stream of funding to create Venture Navigator Scotland (VNS), designed specifically to meet the needs of Scottish companies. VNS has its own assessment tool and is populated with Scotland specific resources and support. The VNS platform was completed late 2010 and is ready for deployment. This system is therefore developed and ready to deploy, free of charge by the shared KTO.

Under an ERDF proposal currently being considered, the University of Glasgow and our university and Business Angels partners will use Venture Navigator as a promotional and screening tool. We have agreements and partnerships with a range of organizations, including Business Gateway, SCDI, Federation of Small Businesses, Chamber of Commerce, Nexxus and others, to promote VNS widely to the Scottish SME community and encourage use. The expectation is that high profile promotion will drive large numbers of companies to try the site and create awareness of the support available and potential for innovation. Through VNS companies can increase their understanding of the possibilities and learn about innovation in their own time, on their own premises and free of charge. This will both increase awareness amongst companies of what they need, but also, through the data analysis platform in VNS, identify clusters of need within the SME community and enable us to target training, programmes or other support on those companies whose own self-assessment has identified that they need it.

As a web based tool VNS can handle tens of thousands of enquiries, creating awareness and demand for innovation and also delivering support for innovation online, addressing the capacity issue referred to before to the extent that really high profile advertising and promotion


can be undertaken without the risk of creating dissatisfaction due to lack of capacity. This scalability presents the opportunity to create large scale awareness, converting to a step-change in interest within the company base. The ability to mine the data presents the opportunity to target the right interventions (training, management support, placements, first step-awards) to the companies that recognize the need. Acting as an extremely high volume, web-based complement to Interface and presenting a coherent support package to a wide range of SMEs, deploying FE and private sector support in many cases, this system will help to drive the promotion of companies from Innovation-unaware, to Innovation-interested and finally to Innovation-engagement. As with the Interface model, the most appropriate partner would deliver the support to the company.

This aspect of the shared office would be responsible for driving the development of companies through the system, with tens of thousands of companies accessing VNS, doubling the numbers of innovation interested companies and doubling the number of innovation engaged companies, with these companies doing business directly with the appropriate individual university or partner. This model builds upon the Interface model, with a shared central resource generating demand and creating opportunities across the sector.

In SummaryWe propose that a shared TTO Office would:

- increase the efficiency and quality of the assessment of IP.- Increase the focus of commercialization onto a relatively small proportion of IP in partnership with our investor consortium.- Increase the efficiency of transfer of the other IP through a shared Easy Access IP portal.

- Increase awareness of the benefits of innovation to Scottish companies through a high profile campaign.- Address the immediate demand using the Venture Navigator Scotland web-based business support tool.- Use VNS to identify innovation needs, clusters of demand and then target the appropriate support towards these companies,

increasing massively the number of companies engaged in the innovation process.

It is important to stress that the activities undertaken in the single-shared office would necessarily be complemented by KE staff in each of the institutions. Both on supply and demand sides there must be KE resource in the universities to:- stimulate disclosure of IP- in some cases to conduct the first assessment of IP- to manage the institutional relationship with the investor consortium for those cases where the IP is to be commercialized.- to work with the other partners to identify the clusters of need on the demand-side- provide the necessary support through consultancy, training, collaboration etc


Risks, Costs & Sustainability

Track recordThere has been a resistance to the idea of shared TT facilities since the days of BTG, which effectively had a monopoly on all IP emanating from UK universities. In 1991 BTG was transferred, by a parliamentary bill, to the private sector and was to become a leading technology transfer company. Its business was the profitable commercialisation of intellectual property from UK universities and sought to license it to industry. It was to share he revenues it received with the inventive source.

BTG is often cited as the best reason not to attempt shared Technology Transfer as the perception from universities was that the mechanism did not work, the processes for decision making were unclear and the mechanisms cumbersome. There were no serious successes and the monopoly enjoyed by BTG was removed in XXX.

The proposed model is very different to BTG. Rather than seeking to replace KTOs and take-over commercialization, the proposed office will offer mechanisms to help universities both to make decisions on IP and also to implement these decisions. Also, the BTG model was based on the traditional TTO approach where all IP was assumed to have potential commercial value and time and energy was expended on developing IP which probably did not have sufficient potential, whilst increasing the IP portfolio over time as the rate of IP coming in exceeded the rate at which IP could be transferred, as is always the case in the traditional TTO model. The proposed model here, with Easy Access IP as a key route, enables KTOs to ‘exit’ from investment in and development of IP at an early stage.

We believe that we can justifiably explain that the proposed model adds value within the system, focusing on early decisions and putting in place clear and easy to implement routes for all IP.

Resistance to useThere will be a natural and expected resistance by some TTOs to using the shared office as they will see it as a potential threat to their own operation. It is important that the concept of the shared TTO adding value within the system as a whole is bought into at the most senior level within the HEIs on the basis that the shared office will offer additional resources and expertise to help universities to assess and make decisions on their IP rather than taking over responsibility for university IP. It is also important to stress that the shared office will not seek to take ‘a cut’ of commercialization income, but will instead seek only to help that the right IP is channelled into the right route (primarily high value/investment or low value/Easy Access) at the earliest opportunity, to remove university costs associated with assessment and development. The proposal is, therefore that the shared office will add value through efficient, high quality decision-making shared resources and also potentially remove costs from individual institutions by supporting early decisions and providing low cost exit channels.


Addition of costsThere is obviously a concern that adding a shared office into the system without the necessity of removing TT capacity elsewhere in the system could lead to duplication and additional costs. As above, it has to be clear from the outset that the shared office is offering new mechanisms and channels for Knowledge Transfer rather than seeking to replicate those already in place. These will add costs in the early stages, which we hope to offset to a large extent with other funding sources, but will, due to the fact that new routes are made available for IP, reduce the cost base in individual universities as the requirement for development and marketing of IP reduces. The objective is to shift the balance within individual universities from Licensing development to company relationship development. High value IP will be identified early and commercialization options put forward by the investor consortium. The other IP will be used as a means of developing university-company relationships rather than as a basis for licensing arrangements.

SustainabilityThe shared office proposal is to create better, more efficient channels for the transfer of knowledge and IP into the economic base, rather than to create a commercial proposition. We believe that the economic development benefits of the approach will be very strong and that there will be significant public benefit as a result. We do not propose any sort of revenue sharing model for the shared office as this will create tension with the HEI partners and also remove clarity from the mission. In the first instance we are confident that external funding can be identified to part-fund the shared office. Over the medium to long term we believe that public funding support will be necessary ongoing, in exactly the same way as Interface has demonstrated that benefits are created, but ongoing support is necessary.

The significant overlap between this proposal and Interface activities should be considered and there is a clear opportunity for integration. The ongoing funding for the shared office and Interface will have to come, at least in part, from SFC funding and we propose that a proportion of KTG funding could be top-sliced to support this shared resource.

Potential Location and Support for the Shared OfficeThe single office should consolidate the mechanisms described above: investor consortium identifying high value IP; Easy Access IP as a channel for lower value IP; Interface and VNS as means of generating university/company interactions.

Glasgow University can offer significant elements of the proposal from existing and planned funding streams, making it very financially efficient for SFC and the sector.

We propose that current and expected University of Glasgow funding could make a significant contribution to the costs of the proposal and that much of the suggested activities could be based upon the scaling up of existing infrastructure (IP Group partnership model, Easy Access IP, VNS) keeping to an absolute minimum the start-up and running costs.


Glasgow University has an ERDF proposal being considered at the moment which involves a partnership between four universities and the business Angel network in order to create a coherent offering to Innovation interested companies and to increase the rate of conversion into innovation engagement. The ERDF funding would be available to support the single office and the integration of all of the universities into the project would be viewed extremely favourably by ERDF and the Scottish Government.

Accommodation alongside Nexxus and TMRI within Glasgow University could be an ideal option – both of these already being collaborative projects across multiple institutions. Note that Interface could be incorporated within this office, with the ‘West’ component of Interface to be co-located in this office whilst retaining the current Interface presence in Edinburgh.

KEC 10/2/11



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Innovation, Investment and Industries Division.dot€¦ · Web viewAs a web based tool VNS can handle tens of thousands of enquiries, creating awareness and demand for innovation