French research revamps its relationships with business

The CNRS: hunting for contracts.

The new structure sets out to enable relationships with large and small companies. Marc Ledoux, director of the new policy, told Science Business: “From now on the message is clear: contracting with the industry is priority number one!”

It’s a big change for an organisation oriented to fundamental research. The CNRS already organised the patenting and licensing of the 400 inventions and 200 patents it claims each year. But it wasn’t enough: last year only 205 licences of the 2,649 patents and 9,804 extensions granted over the years generated a financial return.

The most tangible change within the new strategy – known as DPI – will affect the patenting process. Ledoux has vowed to speed up the patenting process to three months between declaration of invention and first patent deposit. If he does that, he will overcome one of the competitive disadvantages that European researchers face vis-à-vis Americans, who can publish their results before patenting and still be protected.

To do it, the new DPI will consolidate two existing tech transfer structures: Fist (France Innovation Scientifique and Transfer), a private company owned by CNRS that looks after the technical and commercial steps of patenting and licensing, and RéSPV, the regional agencies in charge of commercial partnerships. It is also creating a new board (CESPI), open to industrial members, to define its strategy and the operational team that will implement it. CNRS has also created recently a web portal to help companies browse research that may be of interest for them.

Has it done enough?

Will those new initiatives be enough to rescue an institution brought to a halt since the 1980s? Founded in 1939 to run all public research labs, the CNRS played a key role after the Second World War, filling France with large fundamental research projects.

But life was easier then. Most applied research was conducted by other public institutions, such as the CEA (for atomic energy) or CNET (for telecommunications). Today CNET no longer exists and though CNRS has been trying to improve relationships with business since the 1970s, many complain it has never really succeeded in doing so. That might be an exaggeration, but Ledoux admits that “business has benefited greatly from CNRS-published works but the institution has hardly seen any financial return from”.

Things started to change few years ago with the introduction of so-called framework contracts. The five that CNRS signed last year with big companies (Bayer Cropscience, Alcatel, EADS, France Telecom and Airbus) brought the total of framework contracts to 39. But that's still 19 per cent (or around €70 million) of all its research contracts – about the size of the funding coming from the European Union, and much less than the money coming from the new Agence Nationale de la Recherche (32 per cent) and other public contracts (25 per cent).

Ledoux reckons that the creation of DPI has nothing to do with mounting budget pressure. True, the French government is hiking the CNRS’s public funding to €2,308 billion in 2007, up from €2,226 billion in 2006. But with social security contributions up €60 million and a wage bill up €17 million, the budget is basically flat.

The message is loud and clear: find money elsewhere. On 16 October, CNRS president Catherine Brechignac slashed the CNRS’s life sciences budget by 5 per cent. And it got worse. On 30 October she declared in the business newspaper Les Echos: “In life sciences, we have to make tough choices. I won’t finance every project. With all the money we have poured in, I believe the quality/price results are not so great.” No surprise, then, that the CNRS is now looking to increase revenues from the private sector.

Running out of royalties

With about 200 new patents a year, and €53.3 million in licensing revenues last year, the CNRS appears to stack up well against, say, MIT, whose 11,000 researchers eat up a research budget three times a big in return for royalties of €35.3 million. But just one CNRS licence, on Taxotere, a cancer drug sold by Sanofi Aventis, accounts for €46.5 million of the total – and the patent runs out in 2011.

The first priority for Ledoux is to increase licensing revenues dramatically. He’s aiming for 60 licences in 2006 and 100 next year. As with many other research institutions in Europe now, creating start-ups is going to come a poor second to gaining licensing income from existing companies.

The CNRS has spun off 246 start-ups since 1999, 213 of them still going. But with only 1,876 jobs created between them, the economic impact is less impressive. For Ledoux, “start-ups will be created when a patent does not find a licence with an existing company”.

But that doesn’t mean he thinks small is not beautiful. A decentralised organisation with its 1,200 labs spread all over France, the CNRS is asking small company managers to meet its project directors to tell them about SMEs’ technology needs, and develop partnerships. A trial run in Strasbourg with 40 SME directors has landed 18 further negotiations for prospective deals. In 2005 the CNRS signed research contracts with SMEs worth €21.6 million. Ledoux wants more, but he would not give a precise target.

The new focus on industry – and the new budget cuts – underline the difficulties the CNRS is facing as it tries to find its place in the new public research landscape the French government is slowly moulding.

Opponents of such changes like the union Sauvons la recherche (Save research), which was behind the French public researchers’ strike in 2003, say the CNRS is falling victim to the ANR, the new grants agency built along the lines of the US National Science Foundation. Ledoux denies this: “The ANR funding is just a bonus on top of a CNRS budget which has not been reduced by the government.”

The abrupt departure of CNRS president Bernard Meunier in January 2006, followed four days later by general director Bernard Larrouturou, highlighted the divide between business-oriented managers and conservatives. With the new DPI and the life science budget cut, it looks like the conservatives are losing.