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iNNOVEX2014: The future of the industry lies precisely in academia

By: Shlomo Gerdman, CEO of ISG, Co-Chairman, iNNOVEX2014

Shlomo Gerdman. Photo courtesy of him
Shlomo Gerdman. Photo courtesy of him

We recently witnessed a heated debate in the Israeli government regarding the Horizon 2020 program - the European Union's R&D program for the next seven years (2020-2014). This is a program of between 80-70 billion Euros, which was feared that Israel would not be a partner because of the Union's boycott directives on bodies in general and research bodies in particular, that operate beyond the green line. At the end of the day, a compromise was found that was accepted by most members of the government and will allow cooperation between Israeli and foreign research bodies, but what is equally important is an important injection of approximately 300 million Euros (net) which will be allocated to Israel for the benefit of local technological developments.

A closer and more fruitful cooperation than the existing one is very important for the future of the knowledge-rich industry in Israel, and that is why we decided to dedicate the main panel at iNNOVEX2014, Israel's international innovation conference, which will be held on January 29 this year, to this topic.

The space of technological developments in Israel is divided into two worlds. The academic world where professional researchers are engaged in the research of subjects in which they find interest or a technological challenge and the commercial world where development engineers are engaged in the development of the next generation of products. Many studies in which many financial resources are invested do not find their way to the market and slowly die out in the academic laboratories, others may give respect and professional prestige to their researchers but do not contribute much to the development of industry and the needs of modern man.

On the other side are the commercial companies whose entire existence is based on maximizing profits on the basis of internal developments or advanced technologies developed in other companies and purchased by a certain company in order to improve its supply to the relevant consumer market. These companies try to reduce their research and development expenses to a minimum and often bury ideas for in-depth research or complex developments that could have led to the company's technological superiority and a new source of profit but were sacrificed on the altar of the company's focus on short-term products and dealing with day-to-day challenges.

What would be more natural and logical than a combination of forces between academia and industry in a way that would allow each side to bring to the table its abilities and advantages and at the end of the day would make up for each side what it lacked? The industrial companies would receive the results of the in-depth university experiments and research, while the universities would receive significant funding sources that would allow them to promote and finance their subsequent research.

A good but unusual example of fruitful collaboration between academia and industry can be found in the development of the drug Copaxone. In the late 60s, three Weizmann Institute researchers Prof. Michael Sela, Prof. Ruth Arnon and Dr. Deborah Teitelbaum worked on a study in which they examined the effect of protein-like synthetic polymers on the immune system of mice. The work of the three led to Teva's interest in their findings. Teva continued to test the effect of synthetic polymers on humans and with the help of a two billion dollar grant from the US National Institutes of Health, the tests were carried out that led to the development of the drug Copaxone sold by the Teva company since 1996. In 2012 the sales volume of Copaxone reached about 4 billion dollars and it is Teva's main source of profit. At the same time, Teva committed to pay the Weizmann Institute royalties amounting to approximately 8% of sales.

Since 1996, Copaxone's cumulative sales have amounted to tens of billions and the Weizmann Institute has already received billions of dollars in royalties and is at the top of the world of academic institutions that have successfully transferred technologies from academia to industry. There are other examples of the successful transfer of technologies from the Academy of Industry, including Mobileye Vision Technologies in UK, and Brainstorm Cell Therapeutics Ltd., but they are few and random.

Already 10 years ago (in 2003), the Shmuel Naaman Research Institute next to the Technion conducted a study in which surveys were conducted among members of the academic staff and the hi-tech industry in Israel with the aim of examining the positions of the parties on cooperation between academia and industry. The study indicated the existence of an awareness of the importance of the relationship between academia and industry, which is manifested in the existence of a variety of mechanisms for technology transfer and other communications between academia - faculty members, and industry. Among the mechanisms, it is possible to mention employment of graduate students and graduates in industry, professional consulting services provided to industry by academic faculty members, use of publications and information exchange at conferences, purchase of licenses to use patents developed in academia, and funding of academic research by industrial parties. But all these did not lead to the creation of a permanent and well-oiled system that succeeds in permanently transferring technologies to the industry for further development and production in commercial quantities. Today, when many universities yearn for new sources of funding, they are more attentive to finding ways to commercialize the technology they have and all of them have established commercialization companies that operate as separate economic entities. These companies are interested in the rapid realization of the technological assets in their hands and therefore turn mainly to the registration and sale of the patents they possess. The problem with this method is the lack of monitoring of the technologies developed and in most cases the lack of maximization of the profits that could have been generated for the academy.

At Harvard University in the USA six years ago they started a pro-active program in which instead of the university's commercialization offices waiting for the researchers' inquiries to them and for applications to register patents, the representatives of the OTD (Development Office of Technology) began to act proactively, walking around the university, inspecting the laboratories, meeting with researchers and contact the faculties in order to locate innovations and inventions of commercial value. But then the OTD people discovered that diamonds are indeed hidden in the university's laboratories, but they are unpolished diamonds that are not yet ripe for sale to commercial customers, so a way must be found to "cross the valley of death" of the immature ideas. The solution came in the form of a fund called the Technology Development Accelerator Fund - a fund of 10 million dollars that was raised by Harvard graduates and made it possible to cross the valley of death.

Since its inception, the fund has been used to finance 33 projects, 25 of which have been completed and for half of them the OTD office was able to sign cooperation agreements and receive royalties from companies in the industry including mature companies and start-up companies. Drew Forrest, President of Harvard University expressed the importance he attaches to the fund when he said "The fund has enabled Harvard University to invest in important research discoveries that have led to the creation of a better world. The foundation created an atmosphere of entrepreneurship and innovation at the university thanks to its support for the talents and technologies that will build our future."

There is no doubt in my heart that a similar program can be realized in Israel and also find additional creative ways that will increase state and industry investments in research and development, improve the important relationship between academia and industry and provide the essential fuel for the development of Israel's next generation of innovation.

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