Success Factors in High Technology part 1

nothing with you Sharon Coulomb salami call me shigella kenny sanity has commissioned social form ma fille as a mood with a ciabatta me fan Shalom Lamar see when Hoover do enough no way but to limit our kisses a bus a faing wig will now switch to English I would like to welcome our distinguished guests on stage and off stage and introduce the moderator of the first part of this program professor shlomit el shamah mattel’s served for 11 years as academic director of team technol institute of management he is a co-founder of the israeli chapter of the MIT enterprise forum the first such chapter launched outside of north america he taught the 20 sama summers in professor egg roberts management of technology MSC program at MIT the Hebrews translation of his book innovation management will be published by the hebrew university press in March shall we meet at vivica sha allah thank you welcome everybody to the annual MIT enterprise form of Israel conference allow we did an event last year if you recall and we had for economists this year we made a lot of progress except for me and I don’t count we have no economists we’re moving ahead I’d like to call on professor mo sheds villain who is vice dean of the faculty of business here at Tel Aviv University to bring greetings professor sphere on hi good afternoon I didn’t know this is a situation i could call some economics here it’s easy just a couple of floors above it is a great pleasure to welcome everybody here since that the faculty of management and the recanati business school is probably the natural place in Israel for this type of conference and actually Israeli seems to be the natural place to hold such a conference on entrepreneurship and innovation I think those words about Tel Aviv University and the faculty of management because we realize that in addition to the typical mba programs we should lead towards management of technology and the preneur sheep and innovation and as a matter of fact we have launched a program an MBA program in this field just this year and it kind of converges to an apology that they need to carry which is unfortunately I’d not be able to be here at the conference in five minutes from now because I have to move and try to make a speech to new students that are coming to our new program of Technology Management and innovation so it kinds of it’s a kind of a loop of bringing then I hope the new talents of maybe deal 2020 or a bit earlier or later bringing the new talents to the technology arena in Israel but meanwhile I do hope that you are going to have a very fruitful conference and I wish you a very pleasant afternoon and what’s getting dark afternoon evening so thank you very much for coming and enjoy the evening thank you from Thank You professor to Iran before I introduce the program and introduce our speakers Ayla this is a very serious gathering is it okay to tell a joke it’s okay all right but it has a point this joke by the way it’s from a book called startup nation how many of you have heard of it or perhaps read it worth well worth reading startup nation about Israeli innovation so four guys are standing on a street corner an American or Russian of Chinese and in Israeli our reporter comes up to the group and he says excuse me excuse me what’s your opinion on the meat shortage the American says what’s a shortage the Russian says what’s meet the Chinese says what’s an opinion the Israeli says what’s excuse me the point of the story is that Israeli innovation in part stems from Israeli hutzpah professor Murray you know that word you know that word well the willingness to break rules and not to understand what excuse me means this conference is about success factors in high tech entrepreneurship and perhaps one of those factors is indeed the Israeli hoots father doesn’t know

what what excuse me means so we have a good program for you built by Eleanor team the first half will be in English the second half after the break in Hebrew the first half is about the macro-level the macro-environment of high tech entrepreneurship the second half is on the micro at the level of the entrepreneur and the firm we have two speakers and then a panel discussion in this first half the first speaker will be professor Fiona Murray from MIT Sloan School of Management I’ll introduce her in a moment she’ll be speaking about the role of university and successful high technology entrepreneurship education and ideas our second speaker is professor Yaakov XIV of the Technion and he’ll be speaking about science policy and RD infrastructures the Israeli perspective so let me introduce professor Fiona Murray who’s been gracious enough to agree to come and speak using part of her vacation to do so as I mentioned she associates ER at MIT Sloan School of Management please in your book or your pamphlets you can find biographies of all our panelists and all our speakers I won’t repeat what’s in that material but I just do want to mention one additional fact about professor Murray she works with a range of firms designing global organizations that are both commercially successful and at the forefront of science by the way she has a bachelor’s degree in science these firms seek to leverage the ideas of a wide range of internal scientists as well as external innovators accessed through traditional research contracts as well as something called open innovation mechanisms and she focuses on relationship that span the public and private sectors she’s very interested in new organizational arrangements for commercializing science including public-private partnerships and and other this is an issue that’s vast importance here in Israel and that will be discussed in this panel in trying to find new ways and better ways to commercialize some of the basic science work that is done in universities professor brewing thanks a lot for coming alright what I hope everybody can hear me if you can’t in the back pls wave can you hear me no you need me to speak up alright you want well I’ve got to so I’m not quite sure which one is going to be the most effective so let me is that better alright you can continue to bother me I’d rather you tell me to speak louder than going to sleep ok so alright so first let me say thank you for the invitation and I very much appreciate the opportunity to be here and thank you very much for summer for your very kind introduction I also want to say how much I appreciate all the very wonderful work that either has done in organizing this event I only hope I can take her home with me to help me organize some of the things that we have at MIT because this is really wonderful and I do also want to thank some of my family members who are here who have taken great care of me and the rest of my family during my time here which it’s very nice it’s particularly nice for me to visit Israel because i have actually a very large number of Israeli students and many of my classes at MIT I have Israeli students on the MBA program from the engineering school and they certainly display a fair amount of the hood spur that you talked about sometimes that means they interrupt a good deal during class and they are some very hard and interesting questions and I would encourage you to do the same i’m happy to be interrupted I’m quite used to that style I’m also happy to say that many of them have come back to Israel which is obviously very good for the economy here I’ve recently had the opportunity to work with a company called you test which as a company started by some Israelis is actually based in Boston which has a very interesting model of doing distributed software testing which i think is a particularly interesting example of the kinds of entrepreneurship that so we might talk about but what I wanted to do today is really speak about the role of the University in the entrepreneurial ecosystem and by entrepreneurial ecosystem I mean the institutional arrangements formal and informal that brings together ideas people and money

now I notice the MIT Enterprise form says bringing together ideas technology and people I guess I’d like to see the money part in there as well because in entrepreneurship unfortunately we need that to the ecosystem is a place where we make sure we have all those three key ingredients and we bring them together to be able to create and grow new companies and the grow pass i think is particularly important not just to create companies and while the university is not sufficient to have a successful entrepreneurial ecosystem for successful growth i think without the university it’s very difficult to do it effectively and frankly i think that there are very few examples of successful entrepreneurial ecosystems which do not have at their core one or more very engaged universities that are open and part of the entrepreneurial community so close universities that don’t talk to the outside world and not very helpful in this regard as i want to talk about that role because i think it’s quite controversial and there’s something we can learn the reason i’m going to talk about MIT is not because i think we’re the best nor because we’re the worst but rather we have a long history of trying to participate in the entrepreneurial ecosystem around us we are not shy about that and we have quite self-aware and so they’ve been a number of recent studies and analyses that I’ll talk about that talk a little bit about this sort of activity and so I hope that that will be useful as part of our conversation now before I jump into my discussion of MIT I want to put my analysis into context now for me as some of you might be able to tell although I live in the United States I’m actually originally from England and so for me putting something into context means having to take you back to the 17th century and I’m actually not going to say excuse me for doing that but rather say this is a good part of educating ourselves that the the challenges we face identifying the right role of the university and not new challenges this is not a new problem this is not a new debate but it’s still a central a debate of central importance so if we go back to the 17th century we go back basically in Britain at least to the Enlightenment and fanzine of the royal society and what was that that was a place where scientists and tinkerers entrepreneurs and inventors could come together and as they said they could improve the knowledge of natural things and useful things useful arts manufactures mechanic practices engines and inventions by experiments well what did they mean by this they actually meant doing science engaging in useful things but useful was an important part of that and so originally when we thought about science and intellectual endeavors we thought about usefulness that was true several hundred years later when you look in the 19th century you see very tight but informal relationship between universities and Industry and what would those universities doing while we look in the United States they were establishing industry relevant disciplines I think a good example of that would be Chemical Engineering much of the development of chemical engineering was really there to help the build the foundations of the chemical industry they were focused on education educating scientists for industrial research labs and for entrepreneurship and over there to generate ideas mostly though those ideas got out into the economy through individual faculty members giving advice serving as consultants exchanging views so you go back to the late 19th century and you find academics talking to companies being consultants again this is not a new challenge and you see this in the US with places like the University of Delaware who had an intimate relationship with DuPont the University of North Carolina who were deeply engaged in science around tobacco processing mi T’s role in establishing chemical engineering education if you look over the north from here to Germany in the UK the university’s played a great role and found in the chemical industry and many of the great chemistry departments which I received my undergraduate degree in the UK was intimately involved in industrial development now if you then move a few years later decades later you begin to see what can really only be described as a sort of decoupling a separation between universities and Industry and the emergence of this expression the ivory tower the ivory tower was not some we first saw when we started to think about science the ivory tower is really a conception that emerged at the beginning of the 20th century particularly in Europe and you end up with scientists basically sitting around and this would be the question by what great scientific mystery cries for my attention today not what useful problem should i be solving today not what’s useful and interesting but rather let me just be very disown you soreness and so this is a caricature of academia but nevertheless I think are fairly true a

statement as industry trackers academia try to separate itself from industry and see itself is this very distinct special enclosed place far from the kind of dirty business of Industry and money-making and really that decoupling is something that I think we struggle with today because the legacy of the ivory tower is really one that we have to deal with try to understand the right relationship between academia and Industry the right role that the university should have in this entrepreneurial ecosystem so if we turn back again to the United States we actually find in post-world war two that there’s some reaffirm ation of the role of science and the university in the economy and in economic growth and this was reaffirmed by somebody called Vannevar bush another MIT alum the base if he says look advances in science went put a practical use mean more jobs higher wages shorter hours so a really tight coupling that he sees between what scientists should be doing and economic growth which is a continuous theme then in the work of a number of economists who really think about so they increasingly identified the role of science and technical change in economic growth however the way that he conceptualizes this is not really in a tight relationship but rather as a commitment to basic scientific research and a large amount of funding from the National Science Foundation from the national kind of government into science but organizationally this is kind of done in the very separate sort of way and one way to visualize that is to say look we’re going to have University do this basic research and they’re going to do this work for fun for freedom for love of knowledge and then we’re going to have companies who do useful applied stuff and they’re going to do it because they want to work the money and they want to be useful and we’re going to see this well there’s two really very separate places and frankly we’re not going to think about how all the investment in one all the investment in science and and basic knowledge in any way flows into industry we really aren’t going to even answer that question it’s an unfair boundary if you had to describe it and if you force somebody to articulate it you sort of assume that companies are out there waiting to catch great ideas as they fall out of the university I think that’s the mental image as the companies are running around trying to catch the ball of the great idea and that’s an idea that was pervasive through the 1950s 1960s a very kind of linear model that if we build investments in basic science somehow something will go well something good will happen for the economy now by the late 70s there was a great deal of impatience on the part of the federal government in the United States this sort of impatience I think came a little later to some of the European countries to the to the United Kingdom but it’s been followed by similar in patients around the world now what what did that mean well it meant in the United States at least congressional debates that have you follow the Congressional text and so on they’re really serves look what are we getting for our money we’re spending millions of dollars billions of dollars every year in these universities what are we getting from our money what do we have to show for ourselves there are a number of studies that suggested that a small percent of university ideas were used by companies now we could kind of do an academic exercise and take apart those studies they’re actually not very well done but nevertheless the underlying point is clear there’s a lot of impatience and we don’t believe that fuzzy boundary between industry and academia was working very well there’s a lot of pressure then on funding and in particular there was a lot of institutional confusion over the ownership of the ideas that were being generated in the University in particular you had government money and you came up with a new idea and you want file a patent intellectual property on that idea nobody could quite decide who owned that patent effectively the government owned the patent and so if you wanted to use the patent you had to get permission from the federal government’s that your university could take title and could manage it and that was very complicated and so the basically what happened was that there was a commitment made to deal with this problem through something called the bayh-dole light and so the government tried to reconsider as a source of new ideas and newly educated people and engine for the economy but the precise legislation dealt with this mostly in terms of intellectual property and I think that’s been the focus for the role of the University in entrepreneurship from that point forward and I would argue that that focuses is a narrow one and probably an incorrect a way of thinking about things so we have a 1982 by da light which basically puts ownership of patents into the hands of universities it places the burden on universities to commercialize those through structured licensing arrangements and requires the university to favor small entrepreneurial firms in their licensing and what do we get this graph shows the number of technology

transfer programs in American universities from the early 1970s now mit has had a program of this type since long before the by da light but what you see is universities around the country setting up technology transfer officers I know you have one of those here and Tel Aviv you have them in technion most universities now don’t feel like they’re a real university unless they have one of these entities now this is what the government did what they really were hoping for was this what they really wanted is to say let’s not just how the university’s doing basic stuff because they like fun and interesting ideas the sort of pure science and in the industry doing the stuff in the bottom right-hand side so the bed Estonian applied research we want something in that top right hand box and no management talk would be complete without a two by two matrix and it’s always the right place to be in these matrices as those of you’ve done an MBA know is to be in the top right-hand side and the top right hand side here is what call Pasteur’s quadrant that is basically science with a useful focus so what the government really wanted was for universities to do great science that responded to and was relevant to industries needs in my view what they got instead because of the way that they constructed the problem was basically this this says class today’s lesson on sharing has been canceled it will be replaced by a lesson called protecting intellectual property and so in my view what they really wanted was a coupling between the problems of great science and the problems of Industry what they actually got was an obsession with patterns and with intellectual property and so for the rest of my time I want to talk a little bit about what I see as some of the issues with that and I kind of recon sexualization of the university as being as much about people as it is about ideas and about the way universities should in fact think about their ideas way beyond just a pure kind of narrow patenting view so the university is indeed responded I mean this is a case in which you get what you measure you get what you pay for the universities were incentivized to respond to the bayh-dole act and you get this incredible uptick in university patenting so the black bars are the numbers of inventions disclosed by US universities and the yellow bars are just a number of patents that get files by American universities and by the mid-2000s but you get you get about 10,000 patents granted each year to US universities on about 30 billion dollars in research funding that’s about 3 million dollars of patent it’s not clear whether we think that’s a high number or a low number it simply shows you a real shift in focus of these universities it’s not that these universities have stopped publishing and I think that’s an important point to make a lot of my research has been to sort of document that academics are not shifting away from publishing towards patenting you can do both and the efficient academic writes a publication manuscript and just before they send it to science or nature they send it off to the patent lawyer and so this is how this process actually works but nevertheless the legislation is constructed around patterns and so patents you get academics actually do respond to incentives and to kind of rules and regulations now increasingly and in my view I think it’s about time that there’s a strong recognition that patenting in this sort of licensing obsession doesn’t actually help us as much as we thought it would solve the problem of the University having a real and deep impact on the economy in particular this role of patenting and licensing was cast certainly in Europe in the UK for sure and I think in the United States as this idea that the university would get all these patterns those would then be licensed to companies in return companies would pay the university royalties and those royalties would become the third leg of the funding for the university you have research funding funding from educational fees and you’d have this third leg of the stool which will be licensing revenue it turns out that that would be a very uncomfortable stool to sit on because it would be very skewed the licensing is really very small across the United States it provides less than five percent of the total university research expenditure now MIT is in fact among the most successful licensing operations among the United States universities but just to put this into perspective in 2006 we received and I say only 30 million dollars in licensing revenues but let me put that in context that’s on an annual research base of about a billion dollars so mighty has about a billion dollars that comes in every year ninety-five percent

of that from the federal government and only 30 million dollars comes in from licensing and so even as an extraordinarily successful licensing operation this is about the percent that we can deal with that doesn’t make for a very comfortable role of Licensing as a new revenue source for the university and again just to put this into just to give you the real numbers so about a billion dollars and remember that this is not just 2006 you know we have had that every year for the last however many deck age throws off about 500 invention disclosures about 300 patents about 120 licenses about 23 startups created that’s about one for every 50 million dollars in annual funding and a licensing office of about 15 professionals now as a university we see this is actually quite important part of what we do but the reasons there’s a very different from the let’s use the licensing office to generate revenue and generate funding and certainly if you look across the board of academic institutions operating at different scales you see that even in Massachusetts only 15 of the 14 institutions that we have a lot of information on make more than a million dollars per year from their licensing revenue across the country only quite a small fraction actually break even in their licensing operation and what you see is a hugely skewed distribution so as normally one license gives you all the money the rest of them have a useful impact on industry but don’t generate revenues back from the University it’s normally a single blockbuster drug that you happen to have invented in one of your labs and so there’s really a sense that this is not a useful way to conceptualize the role of the university and so this licensing focused operation has been very sharply criticized actually by the federal government by industry who increasingly find the universe is very difficult to deal with very kind of picky about the contracts and the contractual terms and in fact by the academics themselves who don’t find this a pleasant way of having their ideas have impact and so MIT at least has tried to kind of spearhead a reorientation of the role of the university towards the university as a locus of ideas and people so again to come back to what the enterprise forum does as a place that tries to help generate ideas but people to think about the fact that our most powerful impact on the economy is through the people we train and as a place that helps bring together this ecosystem that brings together the people the ideas and the money and helps create the connections among them and we think that we can play a very powerful role in that if we get our focus away from this pure licensing kind of focus or so I was going to spend the rest of my time just talking a little bit about what that looks like inside MIT now from the point of view of ideas this means reconceptualizing the role of the licensing office not to maximize licensing revenue but instead to maximize the impact on the commercial world that the ideas that we have actually might have that might mean creating a license that allows you to actually push these ideas outside who developed a developing country to reserve rights to use for say some developing country project as well as a more commercially oriented project it may mean non exclusive licensing it can sometimes mean exclusive licensing it’s a much richer way of thinking about it for the faculty this means thinking about patenting and commercialization as a way to have impacts keep their students happy create jobs and occasionally get rich I’ve recently did some work on this around the life science entrepreneurship and if you actually look across our experiences in life science startups even those that do an IPO if you actually think about the probability once you started a biotech company of actually doing a public offering it’s only about one in a hundred faculty members that actually become very wealthy through this activity this is not a very sure fire way of making money now when you do you get very rich and you have a nice car and everyone on campus notices your car because nobody else has a nice one but it’s really not a way of trying to for sure get rich but it is a way of having impact with a quite high level of certainty and that’s a much different view that faculty might have of this whole process for the university it means maximizing impact not revenues and for the licensing office this means not necessarily being rewarded on the number of licenses but rather on efficiently executing licenses so that industry and business can do its job well to try to license in a way that allows for better commercial outcomes that bundles intellectual property and that avoid some of the mistakes of the 90s of which I’ve lookin at excruciating length I think you said you read some of my papers I am sorry for that they’re very long mostly there’s a long history of the licensing of this mouse in the bottom right this is the on komme aus it’s a mouse genetically engineered have cancer which is very useful in drug

discovery there’s a long history of universities Harvard in particular licensing this to dupont who then impose very stringent sub licensing requirements on academia and companies and in doing so you can really document very clearly how do actually a dampening effect on follow on innovation and commercialization that’s also true in stem cells in the united states which has actually operated in some of my work at least we can document much to the benefits of the research around stem cells in israel or some other countries but in the united states the licensing structures have been very problematic and so we’re trying to think about licensing as enabling not kind of locking up our ideas so let me just give you a quick sense of how this might work this is probably very familiar to many of you the most recent example that we like to talk about we always have a favorite example which is almost recent successful company and our favorite company at the moment is a one two three this is a company recently IP owed founded from yet min qiangs lab and material sciences new lithium-ion battery cathode material it was patented by MIT which then exclusively licensed it to the company with a minimum guarantee payment of fifty thousand dollars per year once the company had any kind of earnings and then single digit equity to the university and single digits i think is what’s probably unusual but very typical of MIT so we never basically take more than single digit equity and the benefits of that equity a shared a third a third a third among faculty departments and the main university and an equity is sold on IPO and the university actually does not in our case invest in the companies the founding faculty of course can gain additional founders equity depending on their role in the company but this is not through the university this is found as equity that they would take as a role as founder perhaps the most interesting and important point though here is not the licensing agreement but rather that the co-founders and indeed several of the co investor’s were MIT alumni one of the alumni Rick Phillip was an alumni of the Sloan School was as he is wont to do wandering the corridors of MIT looking for good ideas came across this lab he’d not work with professor Chang before I started a conversation about investing in these new ideas he’d had several actually unsuccessful entrepreneurial ventures behind him this one is a successful one but it speaks to the role of the alumni in entrepreneurship in the ecosystem so I just want to finish with a little bit of an insight into what our alumni do for us is the University and my colleague at roberts who professor mitel mentioned who spent his entire career since the age of 17 as MIT did an alumni study recently we have over a hundred thousand living alumni it’s actually when you think about it not actually the enormous number they surveyed them in 2003 probably some of you here may receive the survey there were 43 thousand respondents of whom at least 8,000 had founded at least one company now that means that between what eight percent and twenty five percent are entrepreneurs that’s actually a high number they are over-represented in entrepreneurship they founded about 25,000 companies that’s a conservative estimate because we’re not counting those that have subsequently been sold like deck all those like HP where the Alumni founder is actually no longer with us twenty-five percent of those companies are in Massachusetts so even individuals who are from other countries have often stayed in Massachusetts to found their companies and how many jobs have they created well if you look about five percent of the companies have created about ninety percent of the employment and that’s employment on the order about 3.3 million employees or 3.3 million jobs so our alumni have done good work for us and that let’s just compare it to the number of actual spin-out companies there are about 500 spin-out companies some of them have gone on to be very successful but the alumni contribution to the regional economy and so the entrepreneurial ecosystem much dominates the direct tech transfer so what that does is remind us that we have to focus not to some ideas but on people and just to tell you these people come from a variety of backgrounds they’re not just management school students in the 1990s only fifteen percent of the companies are from those with management degrees more than twenty percent have degrees in electrical engineering and computer science about five percent and life sciences so our alumni from across the university are very important and they think the university is important in their entrepreneurial activities but look at the 1990s what do they say fifty percent of them say it’s the entrepreneurial Network thirty percent say it’s our business plan competition twelve percent say it’s the

Entrepreneurship Center as the recent associate director of that Center I’m hoping to increase that number only about ten percent say it’s technology licensing so it really is the fact that the university is a place that brings together people and ideas not just the ideas part that really matters so we try to amplify what we see is this internal entrepreneurial ecosystem and this is a new picture that we put together that tries to make sense of the many things we do within the university to try to help this it’s organized by stage of entrepreneurship and as you’ll see and the other people who look at this faith you know the Entrepreneurship Center thinks it does everything we believe that’s true we certainly educate the students to think about all the stages of business formation and growth but the venture mentoring service is very important the deshpande Center the licensing office for all parts of this complicated ecosystem just to give you an example of mentoring we have three different mentoring programs in the university for would-be entrepreneurs and and the center itself takes the education piece very seriously we we have these courses built on what we call mens and manners that’s MIT is motto mind and hand what that means is that i’m often in the classroom together with something like Jonathan Fleming who’s a local by science a venture capitalist a long time entrepreneur so he and I might teach together we have local entrepreneurs who actually teach their own classes so we really have deep engagement of the entrepreneurial community with our students through mentoring they serve as catalysts on projects and so on as well as the more traditional classes we do a whole bunch of other things and then let me just finish by selling you something that I do which I like particularly so I’m going to steal an extra minute to tell you which is a class that I think it pitta Mieses this idea of the role that we can play in this ecosystem I stick a school I teams which basically is joint between the management school in the engineering school we take real technology projects going on in MIT labs and we match them up with teams of students from engineering and from the management school they have the faculty advisor myself but also a catalyst somebody from the outside entrepreneurial community who works with them on a weekly basis and the project faculty member and their goal is to evaluate the commercial potential of these ideas so the idea is that in the short term they develop a commercial plan in the long term they build the lasting network and expertise and in the short time we’ve done this which is only three semesters we’ve already seen three spin-out companies kind of begin with real student participation and we think that this is a very important way of bringing ideas and people and the community together so I think just to conclude clearly from an ideas point of view we have to focus on encouraging new enterprises not on the tight control of our ideas from the people point of view we need to educate our students to really be engaged and we need to educate them with is written to play of faculty and entrepreneurs we need to engage alumni if money is limited as is as it often is the university may need to do things about that but most importantly we need to create ties in that ecosystem and so that’s very much how we conceive of our role and so I’m happy to have the chance to share these ideas with you I want to thank you very much for your time and attention and I’d be happy at the end to answer any questions Thank You professor Murray Fiona brief comment Fiona you mentioned men said Manos the MIT motto which has actively used today MIT was founded in 1865 144 years ago by a man named William Barton Rogers and he founded MIT and a grubby industrial part of Cambridge and a grubby old building and he had a vision and the vision was of course in Latin as was customary in those days men set monos mind and hand do great excellent basic research in science but at the same time find ways to make it of practical use to humanity and that vision has driven MIT for 144 years and it’s as powerful today as it ever was great example of a powerful vision our next speaker is professor Jacobs Eve and professors Eve his head of the forum for national rd infrastructure and has a very unusual career path professor is eve after graduating from the Technion as an electrical engineer worked in the israeli minister of ministry of defence mm-hmm he then went to MIT good school for his doctorate and while doing his MIT worked in industrial rd he later worked for the Ministry of Defense he

spent time at bell labs and then joined technion full-time only in 1970 became dean of electrical engineering in 1974 and what’s amazing the thing he’s known for best he has many accomplishments the xiv Lempel data compression algorithm which succeeds in compressing data by half saving all that storage space without losing any information revolutionary algorithm roughly I think comparable to perhaps the Google algorithm by Sergey Brin and Larry Page it seems to have developed that algorithm well you were Dean of the electrical engineering faculty working with Professor Lim pole which is which is quite amazing a career path coming from industrial rd and military rd toward academic life and professors eve is going to speak to us about the science policy and RD infrastructure the israeli perspective professor Z thank you for introduction i just mentioned to feel that i am one of the 100,000 living MIT graduates and i was also involved early in my career with a start-up one of the early startups nizzle take him okay so I features 56 I’m going to talk about policy but before talking about it the question is do we need a national policy at all is well known that Israel is doing very well scientifically it’s well known for its technological achievements if you don’t believe me just listen to our president every prime minister keep saying it but it’s true so if all this happen and I must say as I will say later and later it all up all this happen without really having any general national policy some people might say that it happened not despite of but because of the fact that there was no no really national effort to regulate all this process but if this is the case whether it push me and so despite of the fact that what HAP’s happening here is more like a random walk management of very complicated process perhaps with some good spy as you said and why should we consider to look at it again and ask yourself whether we do need some national policy on certain issues well even when we look back actually the random walk was not really random because there were three major development which on the micro manage management level where well managed the first was the fact that is I had managed to establish a very successful higher education system an independent one less now and secondly in parallel to that in the Israeli Academy of Science established the National Science Foundation we just to give you some numbers 1980 it was half a million dollar and since then that was a government decision to start to two foundations one to support basically search the other one for applied research but that was it the half a million dollars which was dedicated to plastics in Norway applied research disappeared but the university system itself took took it upon itself from its own budget to slowly grow the National Science Foundation and from half a

million 98 it’s not a closer to 60 million per year so this was a very major step toward supporting basically so the universities and the other one was of course a capital investment huge capital investment in defense and agricultural R&D which we still benefit from today and the third one was actually the establishment of the chief scientist office with it and policy to support industrial research sometimes combined with academic research and also to a much more extent the missile defence the Ministry of Science supposed to some of it too so if Israel has done so well why should we do something else now and try to perhaps coordinate national are indeed well the question the ground rules have been changed something is happening now during the last not now John the last at least 15 years or 10 years for some areas we need massive investments for example even investment which what seems to be basically said but it’s also important to apply for example a building as a synchrotron radiation actually a facility is something which which is very important to research in chemistry in physics in medicine so forth is a matter of a few hundred million dollars not to take into account the running costs and the only way to achieve it is to join other countries not even universities other countries in that airport and the same applies to areas like biotechnology and the nanotechnology and so forth they all call for huge investments and now since the garganta walls have been changed if you don’t do look for ways to get those massive investments is simply fall behind and there is no way back so what do we do well aside from the fact that you must find ways to find those sources for the massive investment a crucial problem is the one which will touch in the first lecture the relations between universities and the industry this is a very crucial point it’s probably the main topic of this session at this meeting today and this is why I decided to join it actually does it’s important but they’re very important stumbling very difficult tumbling not important the stumbling blocks endangers the IP issue was very beautifully represented beforehand and let me just mention to you that serving myself happened to serve on a committee which was appointed by the Council higher education we actually adapted to change the IP policy of the universities here especially in the IT area and actually dubbed the MIT model the result was that the report was fully adapted in principle which means that nothing happened and but it’s there I mean we are aware of what’s going on in MIT where you are convinced it is the two of us and convinced that this is the way to go but this is a very important stumbling block and there’s a similar I mean it’s perhaps even more important when it come to the biomedical industry I mean it’s all almost impossible to get a doctor in a hospital do something with this area in if there is one guy who invented some biological glue nowadays is represented as being a criminal of trying to you know to steal some ideas from his hospital and sell it for

nothing so but i’m not going to explain know that i’m sure that we get more the table discussion later one the other one of course it is a real danger I mean there is a fear in the universities that being involved in more applied problems might result in short term horizons in research and but this can be avoided and the third one is again as mentioned earlier the dream of the University to make a lot of money of the IP from IP which is both impractical as we have a theater heard and also dangerous bit was not only the University one won’t make a lot of money how to fit on the average in some areas it’s different but it might transmit a message convey a message to the government that they don’t have to worry about supporting research universities let the universities and the industry worry about it why should we worry about it so this is very dangerous and complicated but nevertheless this doesn’t mean that we should not encourage the interrelation between the universities and and the industry so how do we proceed well let me tell you what’s happening here now in Israel I’m not sure at all of you know there are two problems one is on the level of infrastructure good infrastructure projects how do you deal with huge project like nanotechnology or getting involved getting a be power a partner in a in a synchrotron radiation facility on seven so forth the other one has to do with policy I mean how do you how do you propose to the government if they want policy that indicates as to whether how much money will be spent on nano as come to buy or mean and what are the missing areas perhaps we should do something else so I’m going to separate my talk into these to issue the first first one is something that I would like to tell you about which is going on now it’s a very practical down-to-earth solution to the problem of not full solution to the problem of getting huge inter infrastructure funded and Lonnie the there there was a an initiative which was taken by you by the way by the israeli academy of science about 12 years ago and which is the following huge projects are not started by government agencies by either one of two reasons first of all it’s too costly and secondly insist it is as important why should i do it the other guy should do it if it’s a thing if you know if it’s some research facility let the University Grants Committee support it and on the other hand if it’s applied why should the universe evolved about it let the me and the chief scientist they’re worried about it and so forth so how do you solve it well the idea was to take all the chief supporter of our Indian ISM together get them together in an informal informal form and the idea was that if the members of this forum agreed on a project which is very essential infrastructure as a project which is very central to Israel the idea was not to go to the government class for extra money but to share the resources of all the members together and move ahead and it’s voluntary he can this model walks in Israel and not sure about other countries there is it a the form consists by the way of the chief scientist of the means of Industry the chairman of Fatah do University Grants Committee must add the music defense the director-general of the mists of science

and the Treasury the treasure we like the idea of sharing resources in court but I mean and it was getting it was encouraging this process but in order to let him and become a member the condition and it is being satisfied fulfilled until today that once a project is approved they cover fifteen percent of the cost and somehow it’s running for last 12 years there’s one other country which has a similar model with one simple different the country is Finland and the only the only difference is that this committee is not shared by a retired professor on the voluntary basis like me but by the prime is a villain but but the model the volunteer model really fit Israel because of social reason that I’m not going to go into now but anyhow what this phone is called tell’em and the and the project that we covered until now i just mentioned it clear quickly I mean these are the general ideas and the the largest project of tell until now was the initiative in non technology before that the few other projects like becoming a partners in the European facilities a synchrotron radiation facility there was a project in a second generation internet now you don’t need it by the way ed again saw was the chairing the committee that checked the idea and the breed body before telling for final approval the few other project I’m not going to talk about all together until now the total expenditure was around 1.3 billion shekels but the largest a project till now was the Israeli initiative in nanotechnology and I would like to talk a little bit like that because what a medicine that is a nice model that he can be adapted for future with such 3 ok sure and the so that was the mission and those are the general ideas what we wanted to achieve I’ll go to this quickly and the first step was actual to start 12 comes in those views six universities and the by the way the money is not evenly distributed among the universities there is an International Committee which ex the program periodically and it does change the money allocation according to performance which is important but I want to mention the model the model is how do you guys I mean the total investment was on too high a 232 million dollars in five years how do you raise that much money well the idea was to establish a triangular model where the govern bring a gives one third the university’s itself out of their own running budget gives the other third and the last third part was coming from donation via the universities I mean for the DA knows it was sort of a very tempting imagine I’m in two thirds for one third so it worked very well and the so this is the idea as you can see now what happened I mean first of all let me see what a survey which was taken in 207 and shows well you can see the data and the is another table which shows you what happened you since this

project started by the way I tell them and that its participation and now it’s up for any to continue with the triangular model except that I must say that the way to run it in the same model depends very heavily on perhaps replacing the donors model which doesn’t exist now after what happened with Madoff enroll all these guys and replace the donors part by pet private investment and investment fund so forth but the government should still take a play its part in the universities as well okay so this is what I just mentioned to you and the other thing is I didn’t talk about policy so these are just project that we deal with and the point is that if you deal with if you decide to run a project maybe it’s too late I mean if everybody agrees it’s needed maybe I mean it was needed the 10 years ago nobody notices for this you need a long-range strategic look and hopefully this will be done one day by the recently established counselor are in the county national R&D council it was the law was passed in 2002 but we have some problem with it too I mean some of the years in three world the government does not let go I mean it was supposed to be an independent entity and the that was the law then the laws change again and now it’s caught between offices government offices so forth but hopefully I mean one day we’ll have it running and running well thank you thank you very much professor XIV for your interesting address now we’re going to have a panel discussion our two speakers will remain as part of the panel and we’ll add two speakers I’d like to ask shimano poised and Zora Zeese Apple the police join us on the stage and let me give brief introduction to chi minh and Zoar although most of you are highly familiar with them first let’s begin with with zardozi sapo it asked me to mention that rad the rad companies that Zoras founded is a national supporter of the MIT enterprise forum and fe bhakta was president and CEO of rad data is an MIT forum vice chairman and chi minh echoes is also a member of the MIT enterprise forum board so we thank you both very much indeed brief introduction you can read the bios of czar and Shimon in your brochures that you received a couple of quick points about a buds or he founded the red group of companies five of the red group companies are listed on NASDAQ including rad visions aragon radware rad calm and silicon he spent 12 years doing rd and the israel defense forces before becoming an entrepreneur in fact this is a common denominator between czar and Chauhan they both came to entrepreneurship not as 25 year olds but as seasoned veterans with extensive experience in in in doing R&D Tsar flies economy and he wears jeans and his is very informal and his companies export 850 million dollars worth every year here in Israel Simone Simone I don’t know if you remember you spoke at the Technion about 15 years ago to our entrepreneurship class and we asked you to please talk about your secret and being successful entrepreneur and you revealed your secret and had to do with gray hair so Simon was a an engineer working at Rafael the weapons development authority for many years and retired I think at age 55 and at age 55 became an entrepreneur not a usual career path okay sorry but that I’m it’s a good story and what you mentioned was mmm because you started a bit late in the Entrepreneurship game you had to come to market quickly with a product

that met a real need you had to do it efficiently and quickly and you didn’t have a lot of time for fooling around or making big mistakes and that practical feet on the ground approach i think has been part of your part of your success and it’s amazing because you’ve started personally funded and started nine companies and they all have the same hallmark practical device or approach that meets a real need using relatively little money to get to the market quickly even though it’s in the area of medical devices and you have to go through the the fda hoops in order to to get to market so we thank both door and she 14 for joining our panel and I’d not like to open the discussion to questions from the audience please make your questions short punchy to the point and if you please use the microphone so that we can all hear your question please can you pass the mic Graham Jackson University of Haifa I would like to ask the members of the panel whether they think there should be national priorities established for rd and israel and if so how do you think those priorities should be established according to which create criteria panelists when it comes to a long-range policy I think that it’s up to the console microphone centered on sat down okay it’s up to the newly established research and developing country but this has to do with the first step should be done and things that they are doing it is to collect data there’s no data on what what we have now and they’re based on that data they should oversee what’s going on and perhaps a command new direction and so forth but on the operational level I don’t think that any government office should tell or should put pressure on on researchers and universities or even the industry and tell them what’s important what’s less important i think that the current model by the way is pretty good i mean when you go to the chief scientist I mean the chief scientist policy is not to tell the industry what to do but it did when it comes to cooperation between industry and the clear academia he waits for proposal from the industry that involves the universities and if you liked it and support it and the second approach is what tell’em is doing I mean you can affect general direction by supplying R&D infrastructure there’s an old saying it as a saying by which I’ve heard in England by the way that if you want to influence if you want these two to take their height somewhere else you don’t make you don’t order them you simply put some honey in the place that you want them to go list the whole idea with supporting important infrastructure so clearly if the government support the big infrastructure in another technology something will happen both in the industry and in the research level because if the facilities are there more and more scientists in basic research OPP called basically that will be tempted to use the facilities and do something which fits the facilities but I’m against a more direct approach where the government decides to put money in research and research contract facilities yes deciding which research is better or not but it’s up to the universities and the industries to pop up ideas and as to support if they can convince ago under their work work so too long until we have not okay I think two points one is that I think that we should put more money into research in the universities by doing

the industry as well but now we’re talking in academia so in academia I’m kind of afraid of deciding on priorities on directions because take myself as an example 15 years ago I decided that biotech is the best thing to do in Israel seven years why decided is the wealthy do anything was I right 15 years ago Emma right now nobody I don’t know now I know something about technology do you think about it what happens when someone be in the government makes that decision and at least there was one chief scientist by the way many years ago that decided that rope robotics is the best thing to invest and he took all the money of the chief scientist kind of ninety-five percent of it and put it into about this company how many of about this company do we have now in Israel so put more money but let the industry order academia decide on the way thank you I have a question too professor Murray but to all the panelists as well and I’ll phrase it provocatively because this is the point that I think is hurts me a lot I come from the University 40 years in the university environment universities are struggling today in Israel their budgets are being cut donations are falling tuition they can’t raise tuition for political reasons so all universities have big holes in their pockets one of the responses has been the goose that lays the golden egg approach the golden egg is university research and patents and the idea is to grab on to the IP created in universities ever more tightly in order to fill the hole in their pockets that comes from falling revenues the result is the opposite they the geese don’t lay golden eggs they don’t lay at all because venture capitalists who find that universities have an interest in patents run a million miles away because the university’s tend to be obstructed question based on your experience and MIT and so on how do we persuade universities that it’s in the national interest to create knowledge and give it away rather than try and appropriate it and in fact hurt their own interests not just the national interest so I think that’s a leading question which is fine i mean i think that the evidence is in a son speaks for itself right so if you look at places like MIT if you look at the m are they the American example the universities that have done the best increasingly are those that have allowed the ideas not to walk out of the door completely unencumbered but to walk out of the door with relatively few provisions associated with them and at and I think the data also showed that even on a scale that’s so much bigger than the scale here it’s the university is never going to be able to fill that hole so MIT also has a hole in his pocket because donations are down the endowment is collapsed for all the reasons that we know i think the university understands that we can’t fill it by trying to up the licensing revenue because as i said before you know you take a hundred licenses one of them makes you money and you don’t know in advance which one that’s going to be and the more you add strictures the worst that is and i think that as i say you know it’s you you would like to believe that in a university data would speak and the people would actually look at the evidence and think about it accordingly i think the higher administration in the university can see that and the government has to understand also that this is not the solution i think in the UK there are some very similar problems it’s taken some persuasion to try to convince universities I think the academics understand and if you show them the data it’s very clear this is not the way to make your fortune it’s the light it’s the way in which the licensing offices are rewarded that’s the problem and I think you have to solve it that way and start say we want the universities to have long-term impact and recognize this as a long-term problem and you have to put more money into basic research I agree that the government can’t decide on each and every project I think that the word autonomy which you mentioned earlier on is very important at the level of which particular research project it has to be done on excellence basis I think that the National Academies councils on competitiveness can shape direction and have a voice but the government can’t be choosing each and every project I think that’s a fundamentally flawed ideas okay thank you just for interest how many of you here in the audience are entrepreneurs already or hope to be plan to be entrepreneurs in the future raise your hand Wow excellent everybody’s an

entrepreneur you people you people are our future questions please for our panelists yes could we bring the microphone please quickly pass it over tell us who you are okay my name is Yale and I’m from bio petrol clean which is a start-up in the bio bio cleantech energy section so from hearing these lectures actually I got the impression that the university went in the path of you know having a lot of IPs but I think the problem is not doing enough looking what is the need so what happened is that you have a lot of IPs that doesn’t mean anything and what happened in our company and I guess in any other visas is there is a very impressive professor maybe that speaks high about the technology but it has no idea what the market is and then vc puts medicinal dollars which is private money for actually something that doesn’t meet the market and maybe this is the issue the issue is not that we run from the university because they’re okay maybe we ran from the University because they out there in the space and even when trying to be a connected to the ground by making IPS actually not the way catalyst see one do you want to respond to this one I’m not sure what the question is but how do we get university professors to have more awareness of market needs to develop things that are more related to marketplace well I I mean they’re getting back to the first two questions and then relating to to this one I think we are all very confused I mean in a way and in the ways are put it is the best one we just don’t know because we we don’t even know if in the longer-range capitalism works I mean it sounds like a very philosophical statement but if you think about it and think on the way the world is changing over the last year and a half two years we have basic questions on this relationship between what government does is a government and what business does it does is a business and whether the model that we all admire and like and of course being on the successful side of enterpreneurs at least in some cases i love this model and you know enjoy it very much but the question on what government should do in universities i believe is part of a much broader question on on this you know whether this model that we live was really will work in the long range from my personal experience all i can say is you know I’ve been blessed by getting my bachelor’s degree in the Technion and i believe it was nineteen sixty-seven quite a few years ago and working and studying in a in an institute which had by the way i think at that time the same number of staff members as it has today forty-two years later i’m not sure about the number of students and the real the real main thing was the excellence of and in the spirit of being I remember in those days my professor saying we need to compete with MIT there was no MIT forum at that time and I didn’t know what MIT was so it didn’t impress me too much so I think the the main the main point that I’m trying to make referring to do these two questions and the last one is I think the most important part is really promoting excellence you cannot do it without putting money into it I mean at the end of the day if if you are allowed at a certain department to get to new stuff members and you have five that retire you add it up over 20 years and you find out and again this is a department I know that the physics department in the Tachyon has less staff members now than it had in 1967 and then then result of that no matter what you do is research is degradation in the quality of students that you get out of that and that you know is going to impact us 10 years 20 years 30 years down the road in what and what we can do on this whole IP thing with universities and these technology transfer offices that that they have I think they’re things are basically wrong because in a

way we have the wrong people trying to play rose in the wrong places because of the way and I think it was mentioned here in the sense of how are they awarded I mean who decides if they did a good job or or or a bad job and what they do and and I think that that that creates lots of distortion the worst thing I would think about is to have these technology transfer offices go to professors and say I would like you to write a patent on this because there is a great economical future in it because you know as are pointed out you know he is not so bad in technology and he didn’t know why he did what he did 15 years ago didn’t know why he did it seven years ago and he still doesn’t know you know what he’s doing and don’t take it personally I mean this is the way these these things are evolved so this is a very long answer to a question that I didn’t fully understand but I’m saying the this whole notion of let’s organize it let’s put it in let’s put order into it so the professors and and their PhD students and everybody knows what to do in order to create I don’t know what wealth in the long range for everybody I don’t think this really works a lot passed me a note and mentioned that professor can I make just a quick comment about that yes I think that no I think that there’s a so I think we have to be very very careful and I agree with your comments about the idea that we’re going to come in and tell every professor this is what you’re going to do because we think it’s useful not only because the whole notion of the university is about the autonomy that individuals have and and selects to engage in that environment but also because we don’t know right and so I think what we have to do is have people do excellent science and technology and hope that that’s guided by a sense of what might be useful in the long run and then we have to let faculty do what they do best which is do technical kind of experiments and really do leading edge research and then I think that the other part of this is the market experiment you have to experiment with what works in the market and what there’s need for and that changes over time and that has to be done outside the university and I think that we know that faculty members are probably some of the worst business people I mean biogen is a nice example in boston right started by Wally Gilbert he subsequently won two Nobel prizes but he was fired by his board because he was a terrible CEO I mean he wanted to do everything and so we know that faculty members the quicker you get the idea out there and allow the market experiments to work in the hands of investors and entrepreneurs who understand how to do that the better and so I think while it’s frustrating having the faculty in the right role which is more of a technical advisory role and letting the market kind of operate quickly and with capital efficiency is probably what you want to do not to put a heavy hand into the university thank you a la passed me a note and mentioned that professor guzzi is here professor guzzi would you would you like to join us we’ve said a lot your your title is vice president for rng for Tel Aviv University we said a lot of critical things about people in your job what do you like to tell us about how you do your job and and perhaps rebut ok so the first time I actually I gave a presentation to MIT forum I would feel a profess just a professor and a lab I introduced me as intrapreneur and indeed I’m i see myself first of all as in that professor and the scientists but also as a inventor and as the vision of intrapreneur button now I have the official position of the chairman of our mortises our technology transfer rate company I think that the basis for innovation is truly named universities it is true that and we see it very well in the American and experience the this example of biogenesis is indeed true and i always recommend scientists to be at the first stage when when you need to really to have to know but then to move on and let the business people to to make those to make the decisions that are more red and related to business development rather than innovation I have to protect that the academic system i truly think that in train but in many cases academic system in israel as well as in of course in other countries and mainly in the united states is the prime basis for rent for innovation by

Professor themselves with patents and intellectual properties that is being developed but also in as the as the place in which we educate people in the industry will become inventor will become leading innovators in the industry and this is very important in but I disagree sometimes with certainly with those this appellant I’m the way that we should develop an academic academic knowledge but I I do think and we have we have few examples in Israel for technology that came out of academic institutions and and became important for Israeli economy I think that the best one is a Pakistan from from the vitamin Institute but there are many more in the pipeline and I’m certain than in the next year’s we will see more and more technology from the universities will affect Israeli and a column thank you thank you very much let me remind you that the topic is success factors one of the success factors is of course powerful basic science but there are many others questions from the audience yes microphone can we get the microphone over here thank you didn’t know turn it on can you hear it you hi my name is Reena levy and I’m in Israeli who returned from the United States I recently worked at a company called Myra Cooper Myra Corporation which is started this MIT research and the reason why I mention it because we talked today about the lack of funding and the decay of the Israeli University industries and the need for more money for us to be more productive and I want to tell you but the model that we worked The MITRE corporation is a not-for-profit organization there’s research and consulting for the US government in it it’s a non-for-profit organization just like university but it’s the very rich organization and the reason why that company is done very well is because for every concept by every industry project that that company does and it has about 8,000 employees and over 1 billion dollars in revenue we charged we used to i’m not there anymore i’m here in Israel we charged between three and five percent of research fee and that was very acceptable but all I client so i’m offering a suggestions for some a revival of the industry Israeli universities to connect research to the industry that perhaps you guys who have a lot of influence and Israeli government and viaduct and all kinds of other places that you might want to suggest some kind of a model there are a lot of people a lot of companies here especially in the IT industry which I belong to make a lot of money and do a lot of consulting while one day contribute to the university’s panel press receive and that different places to the IP issue University first of all there’s a big difference between IT and biomed because when it comes to biomed it’s natural that you know to move a project research per second that you need big groups so for in IT sometimes idealize in the crazy head of one faculty member and the time constant between a new idea and its applicative it is not more than two your phobias or else what is so secondly at least when it comes to the IT area which I know more familiar with the times where a professor was an isolated guy with a with a white coat you know with holes made out by acid and so forth in there and isolate the basement are gone I mean young faculty members know exactly what ideas they have they have a very good feeling I like perhaps in biomed what the industry

needs and what we need is not to prevent them from getting from established relation consulting relation windy industry this is something that they really want and sometimes we cannot hire new faculty member if we don’t assure them that the University will allow them to do consulting with the industry so this is that aspect of IP so right now because of the odd IP model I must say and I know that some people don’t agree with me here either universities hit because of the IP model which is not like the one which was introduced by Fiona and is that when a guy when a sec team members is applauded by the industry and they want him to consult on a specific problem he cannot do it without first having the company sign an agreement with University that every IP which will be generated during the consultant process not in the university will somehow benefit university itself this is a big stumbling block which prevents and discourage young it is the young faculty member to do consulting with industry and that’s bad of course secondly it prevents many young and bright faculty potential faculty members to try and join University even if they want to do research because the other aspect that of consulting is very important to them and rightly so so this is something which should dissolve and as I have said most universe in Israel including the Institute that I’m very proud of the Technion I mean doesn’t don’t allow right now this should we change and this is part of the commendation of the committee that saw in myself where Ian which will as you had adopted in principle so now the issue of what kinds of returns the faculty member gets foreign invention which was done within the university this varies i mean it is a big issue it university invested a lot of money especially when it comes to biomed so forth they should get part of the shell but then there’s the question of who does the commercial commercialization of the invention and they I don’t believe that University can do it well think of a simple thing I mean if you want to hire a good patent lawyer I mean how much it university is allowed to pain they are not allowed to pay him much and of course what you get is either you don’t get anybody at all you get somebody that you’re better not have so but this is second issue i’m seeing that the crucial the real crucial usually right now at least in the IT area is to encourage faculty member to consult and this is the number one if you like i want to relate to the idea in the university in my opinion to put it simply all the IP should be given away not given away given to the researcher then it’s also should be able to do whatever it wants with whatever you want to ditch easy as long as it does it in israel and that is very simple i mean where does the manifold for the university research come from it all come from taxpayers money so this is all money it should go back to their to the community and it goes back best by establishing companies stomach making jobs etc now if you do that it will open such a flow of knowledge coming from the university into industry into comparison to everyone now i am not worried too much about the purpose of all but the professor would find the right business people the business people will come to them don’t worry there is money needed to write patterns but this is more money it should be could be given by their government by the way to any profession once why the pattern you should get a lawyer that would write a pattern for him that’s not a problem it’s such a small minute money anyway now the only thing i would do is that if that IP is

being sold abroad then very simply by the same logic 90-plus that ninety percent of it goes back to the government I wouldn’t take it to the government i would give it back to back that and then spread it around the university for that give it back to as research money okay now nowadays every university is building its own commercial arm and if you talk with researchers they will tell you that they hate them and they are important that so they will use well that you wouldn’t be able to use here if you talk with the business people they will tell them you the same know about the about the commercial people know about the commercial arm of the university photography and the end of the day there is not too much I pin IP University IP being used by industry okay so we all lose if you want now i think that’s that’s the way we should push it and if we do that I mean and this is by the way they’re mighty word way I’m just taking it a little bit further with they’re doing it free all the way but think about what is free it’s ours and who is the university university other researchers so unless let’s do some research here how many of you agree with czars idea suggestion that patents should be vested to the University researcher that developed a research how many of you agree raise your hand how many of you think this is not a good idea hey who decides up the commercialisation arms are related to research but there is only one copaxone and we keep on mentioning it ended up going to one University and the others are and it so tel aviv university by the way unfortunately i’d like to make a comment because I I think I think we had a serious problem with how much money in simple terms goes to academia in Israel in from the point of view of how we build up things in the long range I I don’t think and I I’m less familiar with what’s going on these days with iti kind of you a little bit more about it the way it used to be 10 or 20 years ago I’m much more familiar with what’s going on with medical devices and I can tell you that we have no lack whatsoever of ideas patents IP whatever you want to call it I mean the number is far larger than what Israel can support in terms of how much talent you can get to each of those initiatives and I think we have a serious excuse me for the expression screw up in our wonderful model which really works but doesn’t of the of the government support that is given through the chief scientist to start things were typically what any initiative can get is around half a million dollars but then when it needs to go to the next step there’s not enough money around but even worse than that there is not they are not enough people around that can support and my estimate is something like a thousand startups just in the area of medical devices so I I don’t think you know we need to encourage people in the university to to develop IP I think they do it on their own to a large extent because of the the point that was raised before which where we said everybody in this country is an entrepreneur and that includes university professors and allowed by the way a large portion of that are the past successes that we have in Carcassonne is of course the example that everybody wants to quote but there are many others and there are many others of course in the area of IT and the communication and so on and so forth so I don’t think we lack anything there I think that what we lack is is building up you know high level or keeping the high level of

universities and academia and academia and university research that we had 20 years ago that is deteriorating all the time because you know there’s not really enough money to get excellent people into into the university now once you have them and they do research there will be IP generated I don’t think we need to encourage them or say to them you know why don’t you invent something because I see it all the time I see it more by the way in in in a system which is somewhat parallel which is the medical system in Israel of hospitals and the various insurance companies that employ a large number of MDS and they generate more IP than we can handle I don’t think there’s any lack of that what is really missing is the ability to sort it out properly and to really focus on some areas or some companies that can generate lots of value but there is no lack of innovation and no lack of new IP being generated could we get the microphone to this this gentleman and well while we’re doing that a quick comment about copaxone copaxone is a copolymer it’s a very large complicated molecule it’s not a typical drug pharmaceutical molecule producing it to exact requirements and so that each dose is exactly the same was a hugely difficult task it was done by teva so a large part of the success of copaxone is not the basic research only it’s a powerful partnership with a powerful company with very excellent production capabilities and such as such as tiba please hi my name is our non-gaap and i am one of those lucky students that their earlier time was able to take an idea from university commercialize it and start a commercial company and hopefully successful at the time and i did have some quite a bit of trouble with the commercialization institute at stanford not maybe not maybe MIT is better but Stanford was sort of tough but my question really doesn’t relate to that we all think about invention as somebody gets up in the morning gets a whack on the head and comes up with the idea but there’s a science to invention and my first question I have two short ones my first question is do we really teach in our universities the science of invention how to invent how to look at problem how to solve them I mean just be systematic about going about the invention as opposed to kind of random walk and find new things that’s my question number one my number 2 question is is there enough incentives to the students and the researcher to invent and file cabinet as opposed to publish papers which is usually what people are being judged at in an academic institution panelists would like to respond as a first of all yeah I don’t think that you can teach a guy to how to become an innovator I mean I was taking part in a very interesting in workshop at Stanford last summer held by the world economic sale innovation 100 and a good time with the day is it dedicated the question to the pression how do you define innovation and I think that this reminds me of an old physical principle which is that in quantum theory that if you try to measure a phenomena you might kill it and on the other end this doesn’t mean that we cannot expose students to ideas as to how the outside world is performing this is nothing but how to innovate I don’t believe that it’s possible to teach it on and let me just end by one remark that I wanted to keep to the end I must compliment myself by bringing this panel to the point where I was talking about innovation and the industrialist were pressing the fact that the budget of research in universities should be increased I’m just what I do all the time and I was very conscientious not to mention it but it doesn’t mean that this is a very crucial point of course as mentioned by Zoya thank you I’m not sure I should say anything now because that seems like a very important point that you’ve made and i think it is on video so everyone is on camera of saying that so i think it’s possible to teach people how to be systematic in problem-solving how to think systematically about evidence right what’s the hypothesis where there is a technical one a commercial one and

market one so i think that we can require our students to think clearly and to think carefully about the evidence is presented to them and to understand what the key risks are when they’re doing something technical or something more business oriented and something that i think that we have to do better in business schools only teach entrepreneurship is not just tell a bunch of successful stories which were very good at right we select on the dependent variable and we simply tell success after success we have to talk about failures and whether we think that the people who are successful will lucky or whether they had a combination of luck and good strategy obviously luck is always important and so I think that we can do that as far as those incentives are concerned you know I don’t know the system as well here as perhaps I should or as I’d like to understand it but I mean I think that if you look at the MIT example and we don’t quite put the IP in the hands of faculty and we don’t do that for the reason that we believe at the scale love our institution there’s some economies of scale associated with having an office we don’t have a commercialization office in my opinion we have a technology licensing office and that’s a very narrow construction we don’t actually try to build companies we provide incentives for faculty members entrepreneurs and investors to build companies that I think is a very important distinction the incentives come through sharing of any economic benefits they also come through the incentives of creating jobs for your students creating an exciting lab that’s connected to industry into interesting problems and they come from faculty having a variety of opportunities to participate in industry and so I think and the other thing is our licensing office is constructed to basically do what the professor wants with their idea so if I as a faculty member do not want a patent I can choose not to I can choose to make my idea publicly available i can write open source code if i want to if I want it patented I get to basically choose the route of commercialization and so I think giving the empowering faculty members to do that creates incentives because then you can construct a lab that you want and you also recognize now maybe in Israel this is different at least in the US and at MIT we recognize that probably eighty percent of our patterns come from less than a third of our faculty the two-thirds of the faculty do research this either not practical I don’t want to do it we don’t want to make everybody an entrepreneur I think that would be a bad idea now as I say maybe nizoral everyone’s an entrepreneur and it’s different i don’t think so actually but and the same with our students we don’t want all of them to be entrepreneurs and nor do we want them all to the entrepreneurs the moment they walk out the door the advice we normally give them is to do other things first and then to do entrepreneurship later whether it’s spread gray hair comes or not i’m not sure but and so I think that we try to give incentives but not to require everybody to do something I would like to respond to your question can we teach people and universities students and faculty to be more inventive and I’ve spent 40 years trying to do this and I think there is a simple principle that would help a lot of we could simply instill it in our faculty and our students and that is this Israel has many startups with incredible technology driven products that do absolute magic and that are totally useless because they meet no real market need the principal here has to be be involved in society get out of the ivory tower we don’t have a moral right to be in an ivory tower anymore we’re using public money and it’s getting scarce er get into society the involved with society figure out what the main issues are what are the big problems and then go back and try and use your knowledge your technology to solve real problems it sounds so simple but we people in universities we are so isolated very often from what’s really going on in society we don’t even know what the questions are Paul Samuelson the late Paul Samuelson passed away to two weeks ago amazing man a greatest economist of his generation from MIT he he said good questions are far better than easy answers and I think a lot could be done to improve innovativeness in universities if we simply help people to ask better questions ask good questions what’s on the national agenda and then step up and try and solve them even if it’s even if it’s difficult do we have time for one last question haila yes who will take the last question way in the back you got it can we get the microphone back there thank you I need there to defend the most hated the i think part in this in this room my name is tomorrow’s i’m from remote that technology transfer company of tel aviv university and i have to say that we know we we realize that we are the party that everybody likes to to hate and the reason for it is that dude we do the

toughest job because we are really in the eye of the stone and I’m sure everybody realize that they are here to totally pause I’m opposite cultures that are trying to talk with each other and these are the researchers of the University from one hand in the industry from the other hand and each one is talking a different which and I’m sure you industry people realize it I think that the professors in the university’s sometimes realize it less and our job is to do the connection and I think that part of the job would do very well part of the job probably less and just to give you an example it’s from the really biotech section so maybe it’s not the relevant for IT or high-tech industries but out of Tel Aviv University in the last four years came out six new ideas for new drugs for Alzheimer’s disease all of them are out there in the market being developed few by startups few by bigger companies to in Israel for in United States and in Europe they might all fail in in the future we don’t know but this is our job to take the technologies out from the University give them two companies and let them do the job definitely we are not trying to be the business there are people we are trying to do the commercialization to take it out or the technology transfer to take it out from the University of the into the industry and regarding the IP question I have two remarks most of these technologies were able to go out from the University after we have invested few tens of thousand dollars on each IP with the best IP people or the best IP attorneys in Israel or from the United States I doubt if the IP was given to the professors at the first stage it will even come to this stage the most of them will not do this but the IP will get lost and I have one example from Italy that I think till three years ago the law in Italy was that the IP was not of the universities and of the professors and I think the statistics there was very bad that there was the amount of IP that was generated from universities and going out to the industry was very very low I say three years ago because i don’t know the statistics or what’s a situation at the moment and one last remark to resolve i’m not sure if we do not need to see the university as the employer of the professors and i’m sure that in every high-tech company if an employee is having an IPO an idea it’s it belongs to the company so it might be that within the university it should really belong to the University and of course the professor’s needs to have their share and i think that the university is eaten israel a very very dent generous and if somebody doesn’t know from every dollar that the university does from commercialization forty percent go to the inventors not to the University not to the research back to the inventors themselves so i think this is such quite a good incentive for the professors good good rebuttal i think i need to to summarize so that we can take a coffee break let me use a metaphor that Fiona professor Murray used the echo system the innovation ecosystem so Israel has a complex ecology of innovation and it includes startups basic research universities theses funding government industry and the ecosystem is like the Olympic hundred and ten meter hurdles in order to succeed you have to successfully leap over each of those URLs and there are a lot more than ten in becoming a successful startup in other words this complicated ecology every part of it has to work and has to work well and if parts of it don’t work well then we lose a lot as a nation and I think we are agreed that there are parts of our innovation ecosystem that aren’t working well I’m not sure that we agree about how to fix it but at least we had a fruitful discussion I like to thank our panelists very very much for interesting discussion and now you’re about to take part in a MIT enterprise forum tradition we have very long coffee breaks you have 45 minutes for coffee please come back at six forty-five this is purposeful right Fionna the idea is for you to network

and to discuss things and one last task thanks for reminding me Fiona a very long way to give us the stock we appreciate it thanks for inviting us thank you very much enjoy our coffee break