Prof. Edges company, whose mission is “value creation from technology” is the leading international organisation in this field. So it was music to the audience’s ears to hear him say early in his talk that “The highest added value is available from materials science and technology” in the context of manufacturing innovative products.

Having been a founder of Cambridge Consultants, then PA Technology before establishing Generics in 1986, as well as being an Associate Professor at the University of Bath (among many other academic distinctions), there cannot be many people better qualified than Gordon Edge to talk on the art of translating science into business. This was the topic of his presentation at the Empa Academy Afternoon Talk on October 27th.

Not that easy

In the first part of his presentation, held in the Theodor Erismann Auditorium, the professor aimed to show us that successfully commercialising innovative technologies is a complex process of business creation. It is simplistic to assume that all that is needed for a start-up is a good idea and some cash, with the rewards followowing automatically. There are many different forms of start up, with no single definition covering all. Flexibility in thinking about the optimal form of start-up is therefore the key to success.

Education a key factor

At the simplest level, translating science into business actually means moving science into a technology and then exploiting it. In discussing the fundamental nature of exploitable science one has to ask questions such as what are the sources of growth and competitiveness in a developing business, and what are the limitations to growth? Is there an optimal road to growth, and what are the best exploitation business models? Prof. Edge then discussed a generalised model of technology exploitation, which effectively shows all of the vertical elements in the translation from science into the market place. The model shows very clearly that even the largest enterprises are totally dependent on the underlying technology and science base at hand and, therefore, ultimately rely on a high quality education system. The model also shows that market opportunities occur in a horizontal as well as a vertical sense so that, for example, intellectual property within materials science can be separately exploited in its own right. Liquid crystals, light emitting polymers and titanium dioxide have all been exploited in this way.

Exploitable science?

Next the speaker examined the characteristics of an exploitable emerging science, the first point being that it must be convertible into an exploitable technology. To be exploitable an emerging science should be capable of diffusion and combination with other existing or emerging science or technologies, preferably in an inter-disciplinary manner, and the underlying science must be thoroughly understood. This is the reason for the failure of high temperature superconductors to fulfil their early potential, but there are plenty of success stories. Recordable CD technology based on the physics of the moth-eye, for example, or the Kramer Elastics “Decept” snowboard which applies advanced computational fluid dynamics to give substantial benefits in speed and controllability – over 10,000 were sold in the first season.

Ideally, according to Prof. Edge, an emerging technology should be capable of creating a platform technology, one that can address very differing markets from a similar technological origin. One example of such a platform technology is based upon a single same raw material, titanium dioxide, used in radically different ways. Traditionally, titanium dioxide is used as a pigment, but new processes include the simplified conversion of titanium dioxide to metallic titanium (with enormous market potential as a replacement for aluminium), and using a highly conducting form of titanium dioxide to replace structural lead in lead acid batteries.

Added value and the culture of innovation

The speaker then moved on to discussing R & D innovation and added value, a vital point because competitive advantage in the marketplace is controlled by the value added to a product or service. One important source of added value is creative, innovative and effective research and development, but cultural factors also play an important role. Thus, if a company believes in innovation from the top, then innovation becomes a cultural value of that company and it will be more likely to innovate - and innovation is the key to success. The most important culture-associated factors, according to Prof. Edge, are probably multidisciplinary and interdisciplinary working, and an environment which encourages innovation.

Technology financing and growth

In the second part of his presentation, Prof. Edge concentrated on the business development models used in creating science and technology based businesses.

The first stage of the process is the identification of a new technology to be commercialised, and Prof. Edge encouraged researchers to attend conferences, exchange ideas in interdisciplinary workshops and visit other laboratories. This process requires inspiration, creativity and serendipity – a process he called non-rational management (not to be confused with irrational management, as the professor pointed out with a twinkle in his eye!). This is fostered by an externally oriented, interdisciplinary organisational culture. The best way to extract an important piece of emerging science from a mass of research was by peer review, following which the successful project moves to the seeding stage. This is an extremely important phase, which enables work which may be still at an academic stage to be developed so that it may become of exploitable potential. It is the basic science or early technology stage, where pivotal experiments are funded and steps must be taken to protect intellectual property. It is often difficult to obtain funding at this point from more traditional commercial funds, but Prof. Edge gave several examples of successful ventures, which had been supported by Generics at this stage of their growth. As the new technology matured, there followed further stages of incubation where the new business gradually come into existence without losing the advantages of its location in a multidisciplinary and challenging environment. Creating an independent start-up too quickly without this nurturing process increases the risks of failure. On the other hand, closure of the unsuccessful emergent business is easy at this stage if this becomes necessary.

The next stage of development is the spin-out, where a group of employees leave their parent organisation to form a new business in which the parent has equity. There are other ways the process can take place too, for example by Development Companies, Start-ups (the conventional venture capital funded model), various kinds of joint ventures, and by licensing (the traditional approach to intellectual property exploitation).

Due diligence

Prof. Edge drew his presentation to a close with some thoughts on the due diligence process, which is basically the identification of any pivotal technology issues around which the success of the complete development hinges. These pivotal areas must be explored first in any concurrent engineering programme. Due diligence is the precursor and foundation for the detailed investment planning process, and involves creating phased plans for the R & D programme of the new company, and for developing marketing and sales.

The Chairman, Dr. Xaver Edelmann, then opened the floor for questions. When asked for his views on the role of governmental agencies in the process of business development, Prof. Edge felt that the most effective action the authorities could take would be to ensure that a cultural climate existed which fostered innovation – and then step back and let the entrepreneurs get on with it unhindered. Another member of the audience asked what the first step is for a scientist with a good idea with commercial potential. The answer was to build a demonstrator, a lab prototype, to show people that it actually worked – the best way of convincing sceptics. Another Empa scientist was already this far along the road, and wanted to know if he could get funding from Generics. Prof. Edge’s short answer was a qualified „Yes”.

All told, Prof. Edge’s presentation, delivered with quiet assurance and enthusiasm, was interesting, informative, thought provoking and above all inspiring. Surely any Empa staff members in the audience who had been toying with the idea of commercialising a novel technology were encouraged by his talk to take the first steps in the direction of establishing a spin-off!

Peter Dias