International Collaboration International Collaboration

through Global Networksthrough Global Networks

Mary Lindenstein WalshokAssociate Vice Chancellor for Public Programs

Dean, University ExtensionProfessor of Sociology

University of California, San DiegoFall 2006

Why Is There So Much Interest Today Why Is There So Much Interest Today in the Social and Economic Returns in the Social and Economic Returns

on Research Investments and Building on Research Investments and Building Science-Based Clusters?Science-Based Clusters?

Global economic forces are characterized by rapid shifts in technologies, growing and declining industries, market changes, mobility of capital and talent, which in sum have differing effects (positive and negative) on national and regional economies.

All economies need a critical component of what Michael Porter at Harvard refers to as “globally traded clusters” which bring outside resources into regional economies

General acceptance that knowledge is the primary resource which enables innovation and that innovation is what drives economic growth and new industries, new jobs and new wealth for regions and nations. Research is a primary source of this new knowledge.

The increasing cost of research, especially in fields like biotech – people, facilities, equipment and development timelines requires multiple funders and partners

Increasingly, companies and investors go where the talent is in contrast to labor going where the jobs are

Why Is There So Much Interest Today Why Is There So Much Interest Today in the Social and Economic Returns in the Social and Economic Returns

on Research Investments and Buildingon Research Investments and Building Science-Based Clusters?Science-Based Clusters?

This Transformation Happens Because This Transformation Happens Because of the Simultaneous Development of of the Simultaneous Development of

Different CapabilitiesDifferent Capabilities

Growth in basic research and development which increases the intellectual/creative talent pool substantially

A commitment to building the financial, business, legal and marketing competencies unique to science-based entrepreneurial enterprises

An understanding that frequent communication and overlapping networks among and between different science disciplines, investors and entrepreneurs is absolutely essential

A New Paradigm for Economic A New Paradigm for Economic Growth inGrowth in Globally Traded IndustriesGlobally Traded Industries

Creating and sustaining Rainforests versus designing and maintaining Plantations: a new path to innovation

Being ready to seize unplanned for opportunities versus linear management by objectives: opportunistic planning

The importance of knowledge flows, cross disciplinary and professional relationships to innovation in science-based companies

Entrepreneurship as a team process rather than an individual process

The importance of regions, community, culture, networks and identity to the innovation process

How this Challenge was Met How this Challenge was Met in San Diegoin San Diego

The research institutions on the Torrey Pines Mesa focused on growing their capacity: UCSD, Salk Institute, Burnham Institute, Scripps Research Institute, etc.

New organizations such as CONNECT were created to help build the business and finance infrastructure essential to innovation and the growth of successful entrepreneurial enterprises.

Goals of Leaders Goals of Leaders Who Started CONNECTWho Started CONNECT

Create a community of competencies and a culture of entrepreneurship which can support the growth of global knowledge-based companies which can provide high wage jobs and wealth for the region

San Diego’s Transformation in San Diego’s Transformation in Twenty Five YearsTwenty Five Years

Replaced 100,000 jobs lost in defense with 120,000 in new companies – 2/3 high wage

30,000+ employment in biotech; 25,000+ in IT; 12,000 attorneys – when started/800

$1.8 billion research base; more than doubled

$1.2 billion venture capital; increase of 8-10 fold

San Diego’s Transformation in San Diego’s Transformation in Twenty Five YearsTwenty Five Years

Dozens of global companies establishing facilities in San Diego today

Qualcomm Ericsson, Motorola, Nokia Hybritech & spinouts Merck, Pfizer, Johnson &

Johnson, Schering-Plough Biotech, Novartis

14 million square feet occupied by biotech research facilities compared to 11 million in shopping malls.

San Diego’s Transformation in San Diego’s Transformation in Twenty Five YearsTwenty Five Years

From 6 to 600+ IP attorneys No local angel/VC funds to 140 in Tech Coast

Angels and 29 NC funds In the last six quarters, 749 new start-ups in San

Diego (1/3 product – 2/3 service) – new company every 17 hours

Establishment of nearly $1 Billion in new locally-based philanthropic funds

San Diego High Tech Wages San Diego High Tech Wages Doubled in 1990’sDoubled in 1990’s

Source: SANDAG

*Estimates only due to SIC/NAICS code change.

Industry Cluster 1990 2002*

Biotechnology/Biomedical $ 34,029 $ 62,945

Telecommunications $ 37,904 $ 91,809

Electronics $ 34,221 $ 70,375

Software $ 39,101 $ 72,050

Defense Manufacturing $ 36,145 $ 61,669

Others $ 22,213 $ 34,606

Human CapitalHuman Capital

IntellectualIntellectualCapitalCapital

Financial Financial CapitalCapital

Leveraging Regional InputsLeveraging Regional Inputsto Build San Diego’s Industry Clustersto Build San Diego’s Industry Clusters

Regional IntegratorRegional Integrator

Industry ClusterIndustry Cluster Industry ClusterIndustry Cluster

University of California, San Diego University of California, San Diego CONNECT has been the Region’s CONNECT has been the Region’s

“Incubator Without Walls“Incubator Without Walls””

Access to diverse forms of financing -- seed, angel, venture, corporate

Business planning and market intelligence

Domain experience and management “know-how”

Continuing education and training for professionals

Linkages to national and global resources and partners

Technologically literate business and service sectors

Springboard ProgramSpringboard Program

Entrepreneur assistance for 6-10 weeks Formulate business plan and presentation

Graduation Investor presentation to a customized panel of domain

experts, CEO’s, investors, and service providers

20-30 companies graduate each year About 25% of total applicants

200 companies have graduated since program’s 1993 inception

$550 million raised by Springboard companies

58% survival rate 10+ years out

Technology and Life Technology and Life Sciences Financial ForumsSciences Financial Forums

Two annual forums: Technology Financial Forum (1985-present) Life Sciences Financial Forum (1989-present)

Forums showcase 30 innovative, fundable companies to capital providers

Companies are pre-qualified by competitive review process

400 attendees, 100+ capital providers per event

Presenting companies have raised $6.8 billion

Over 400 companies have presented

Most Innovative Most Innovative New Product (MIP) AwardsNew Product (MIP) Awards

Annual competition honoring the vision and perseverance that transform ideas and technologies into products

Judges review hundreds of applications and select winners

MIP Awards benefit San Diego! Innovative companies get recognition and exposure Showcases San Diego’s emerging technologies Builds community excitement and celebrates regional Builds community excitement and celebrates regional

successsuccess

How CONNECT Got StartedHow CONNECT Got Started

High unemployment and loss of large professional companies motivated leaders to pursue new approaches to economic growth

The early entrepreneurial successes of IMED, IVAC and Linkabit suggested entrepreneurial science-based companies might be the key to future prosperity

Community and university leaders worked together to develop an approach to implementing change, which built on knowledge about the early successes in the region

The change model was to create a new community of entrepreneurs, scientists and business service providers who had deep knowledge of where science and technology were going and had ready access to the distinctive business competencies needed in entrepreneurial companies

The UCSD Program in Technology and Entrepreneurship (soon branded “CONNECT”) was a program dedicated to achieving the above

What is Global CONNECT?What is Global CONNECT?

Channels for global businesses, entrepreneurs, and researchers to identify and access opportunity and expertise outside of their regions

Opportunities for regions to create stronger strategic partnerships through shared resources and outcomes

Methodologies and tools that allow SMEs to link to other SMEs on a peer-to-peer basis

A network of networks allowing for shared common infrastructure for identifying and qualifying opportunity

Educational and informational content creating stronger regional involvement and collaboration

Why Global CONNECT?Why Global CONNECT?

CONNECT Brand name and related programs are well recognized the world over as ‘best in class’ for the facilitation of regional collaboration

Established linkages allowing for cross-regional market access

Regional growth is significantly enhanced by understanding and accessing global market opportunities and research linkages

Greater viability and sustainability of enterprises transitioning from Idea Invention Product Business Growth Exit, Spin-out (or Spin-In)

Portfolio of ExpertisePortfolio of Expertise

• Regional Capabilities ResearchRegional Capabilities Research• Technical AssistanceTechnical Assistance• Market and Business AssessmentMarket and Business Assessment• Program DevelopmentProgram Development• Workforce DevelopmentWorkforce Development• Internship / Fellowship ProgramsInternship / Fellowship Programs• Membership NetworkMembership Network• Speakers Bureau Speakers Bureau • Online Tools and Resource DirectoryOnline Tools and Resource Directory

Network of NetworksNetwork of Networks

Providing leadership for understanding how organizations can effectively use global partnerships to accelerate international development in high technology and life science industries

Sharing of best practices and program infrastructure for accelerating the development of global partnerships and technology commercialization

Research on Innovation CapacityResearch on Innovation Capacity

Benchmarking and metrics Commercial ‘audit’ on regional assets

and capabilities Comparative assessment of findings

Technical Assistance - CapitalTechnical Assistance - Capital

Capital Formation and Access

Risk/ Seed Capital Kauffman ‘Power of Angel Investing’ Additional modules:

• Due Diligence• Valuations• Term Sheets

Business Models: Formation of Angel Networks The ‘Capital Food Chain Curriculum’

Technical Assistance – Technical Assistance – Technology CommercializationTechnology Commercialization

Tech Commercialization: a ‘hands-on’ approach to commercializing innovative technologies across borders

Global CONNECT ‘Bridge Program’ In-country technology assessment Remote Entrepreneurship Training In-country workshops Benchmarking / Metrics San Diego ‘Springboard’ Networking + one-on-one meetings

Program ActivitiesProgram Activities

Regional Springboards, Financial and Partnering Forums

Innovator’s Showcase (a program leveraging a Springboard-like coaching process to assist researchers and academics hone their business presentation skills)

‘Meet the Researcher’

Workforce Development through Workforce Development through Distance LearningDistance Learning

Innovation and Entrepreneurship Seminar Executive Programs for Scientists and

Engineers Leadership and Management Programs Financing a Start-Up Biotechnology programs

Medicinal Chemistry Computer Aided Drug Design Clinical Trials Management

The Core Principles of The Core Principles of All These Programs Are:All These Programs Are:

Build relationships among previously isolated scientists and professions

Rely on the knowledge and experience of successful entrepreneurs and practitioners

Be a membership based organization in order to assure action orientation and not theory

Create numerous programs that educate business people about science and scientists about business

Get people in the room many, many times for many, many reasons so that they will have fun, develop collegial relationships and be willing to take chances together

The program must be staffed by people who have been successful in science-based entrepreneurship