IV. Understanding the Innovation Ecosystem
The word “ecosystem” is often used to describe individuals and organizations working in communities that aspire to develop technology-based high-growth businesses. The word describes the interdependence of multiple parties and the vulnerability of the whole should one element of the system be underdeveloped compared to the others. The ABB has prioritized an initiative to increase the supply and accessibility of “risk capital” because multiple parties have weighed in with their opinions that this is the weakest link in the state’s innovation ecosystem. Following is a brief analysis of six components of an innovation ecosystem, annotated with notes from discussions with Arizona experts: 1. Innovators • •
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Contributes – New technologies, business models or improvements to existing technologies with market potential sufficient to merit the development of a new company. Needs – “Proof of concept” funding, often from employers or grant-makers; connections to entrepreneurs experienced in developing viable business models to commercialize technologies; reasonable opportunities to “transfer” intellectual property into private businesses. Includes – Research faculty at the University of Arizona, Arizona State University and Northern Arizona University; independent SBIR grant recipients; scientists at the Air Force Research Laboratory; any citizen with a great idea for a commercial product or service that requires OPM (“other people’s money”) to develop (i.e., can’t be bootstrapped).
Breakthrough innovation can truly come from anywhere and anyone, so well-functioning ecosystems are receptive to the outside-the-box concept from unusual sources. For volume, ecosystems primarily tap into university and industry clusters for “spillover” technology – intellectual property developed as a product of significant research expenditures but not readily licensable to major industry partners or a commercialization priority for a corporate lab. Like “baseball scouts,” there are special kinds of people that know how to find high-potential, undeveloped innovations in difficult to extract areas. They know how to converse with researchers in very technical terms, yet also translate ideas into laymen’s terms and help researchers understand how to communicate with potential sponsors and investors. The best tech transfer offices know how to find and recruit these innovation scouts to validate what they’re hearing directly from the researchers. The challenge is that many tech transfer offices are resource constrained and must prioritize the hiring of intellectual property attorneys to handle the basic functions of their offices. Generally, interviewees for this report were satisfied with the innovation infrastructure provided by research institutions and industry clusters. However, a common view was that innovation development could be accelerated by universities being more “customer oriented” in licensing processes and decisions. The good news is that there are proven measures to increase the supply and development of innovation, but require substantial resources and many years to produce results. Examples of innovation supply initiatives that have produced tangible outcomes include the Georgia © The Arizona Bioscience Board and Cromwell Schmisseur LLC, 2016
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