Entrepreneur’s guide to 2010: Don’t give up

If you’re an academic entrepreneur with a new business, the key word for 2010 is uncertainty. It’s uncertain how sustained an economic recovery will be, how quickly you will find customers, and how much support – or hindrance – you’ll get from the public sector.

But, say the experts, that doesn’t mean you should forget about starting a business and stick to the university lab. Instead, success in 2010 will take extra perseverance, skill and luck, according to innovation experts speaking at Science|Business’ annual Academic Enterprise conference, held on December 10 at Paris City Hall.

Roch Doliveux, Chairman and CEO of UCB, a big Belgian pharma company built partly on academic research, notes that, contrary to the gloomy talk of many analysts, “there is money out there for good projects.” “Today we have more money than candidates” for an investment fund he helps steer. But, he warns, getting the money takes “energy and persistence. Persistence is definitely a must.”

Likewise, Alfons Sauquet, dean of Barcelona’s ESADE Business School, warns academics starting a company that “you have to become a seller”. You have to persuade people that you have got something valuable, he adds, a notion that does not comes naturally to most researchers.

A wild card: good or bad government?

Uncertainty about the role of government in 2010 is especially high – with opinion split on whether it will prove to be good or bad news for entrepreneurs that governments across Europe in 2009 began focusing more attention on innovation as a way to stimulate the economy.

Denis Payre, co-founder and president of Brussels-based logistics company Kiala among other innovative businesses, is particularly worried about France. “We are seeing some of the bad habits of the past in this country coming back,” he said in Paris.

The French government has started to put more of its own money into start-ups, in IT businesses for example. There are also hints that the government would reverse favourable treatment of entrepreneurs. Remove these tax credits, Payre warned, and “we will see entrepreneurs moving elsewhere”.

A particular concern for Payre was proposed legislation that would force new investment funds to allocate half their money in six months and the rest within a year - a timetable, he complained, that would not allow proper evaluation of technology businesses.

Philippe Pouletty, CEO of the French venture capital firm Truffle Capital, is less pessimistic. “The environment is pretty positive,” he said. “The [state] is often a bit heavy, but it produces a lot of benefits.”

A free lunch?

Pouletty told the meeting that, thanks to favourable government treatment, French venture capital has survived better than most, including Germany and the UK, the previous stars. And it took just one lunch, he said, to persuade a French senator behind the proposed investment timetables for new funds to accept an amendment to exclude some funds on the ground that the idea would not work for businesses in the innovation sector.

Events in the world of finance have had other effects - on our expectations of the impacts of academic research, for example. Several speakers at this year’s conference talked of looking beyond the economic returns from knowledge transfer from the academic sector. The operative word in many of these comments was impact.

“Is our activity in producing and licensing knowledge having an impact on decision-making at the government level?” asked Riccardo Pietrabissa, vice rector of the Politecnico di Milano. The winner of this year’s Bridge Award at the Academic Enterprise conference, a recognition of achievement in knowledge transfer, Pietrabissa believes that universities “have to produce something that is having an impact on society”.

The impact word has risen up the agenda over the past year. Indeed, in the UK it has come to dominate thinking on how to assess and fund academic research. Government ministers demand evidence of impact, so the Research Councils and agencies that distribute public money for research are falling over themselves to prove that the science they back has “impact”.

The UK plans to ask researchers to flag up the potential impact of their science when they bid for research funds. The very idea of this has aroused ire among some scientists who fear that it would be the death knell for “blue skies” research.

All this looks puzzling when innovation thinking is taking hold in the minds of the scientists who will do this research. The notion of innovation from research is catching on, thanks partly to the efforts of some universities. They have added entrepreneurship to their student training.

In France, Cyrille van Effenterre, President of ParisTech and co-host of the conference with the Paris Mayor’s Office, said that PhD students can now spend four weeks on an intensive crash course on business aspects of research. In Spain, ESADE runs a programme for scientists where the idea is to “bridge the gap and produce mini MBAs,” says Sauquet.

Even if there is money out there for new ventures, and a growing cohort of people who understand what it takes to turn research into successful ventures, governments can easily wreck the party. Don't use financial woes as an opportunity to stop spending money on science, is the key message from the innovation community.

Marja Makarow, CEO of the European Science Foundation, offers a role model. We now hear of governments cutting money for science, she said. Bad idea, is her message.

In the 1990s, when Finland experienced its worst recession in a century, the government’s response was to invest in research, education and development. “This proved to be a very clever decision,” said Makarow.

People now hold up Finland as a role model for how to transform an economy. Indeed, Odile Quintin, Director General for Education and Culture at the European Commission, says that the EU uses the Finnish example to encourage other countries to invest in R&D.

The past year certainly saw the EU staking out its territory on the innovation landscape. The European Institute of Technology finally began to take shape. The European Investment Bank has a new facility that includes €5 billion to complement the 7th Framework Programme, as Quintin put it. On the negative side, she added, Europe applies too little of its economic-development money (structural funds, in EU parlance) to innovation.

There is still money out there. Ideas continue to flow. Researchers are more keen, and more capable, than they ever were to capitalise on their work. The biggest questions are those hanging over what governments will do to assist, or hinder, this growing enthusiasm.