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Technology-Based Innovation and Corporate Registration

Professor Bruce Walker Ferguson, Head, Masdar Institute Center for Innovation and Entrepreneurship

9 March 2015

Friday, April 24, 2015

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A Question

Friday, April 24, 2015

Why should a research university

care about

corporate registration?

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International Perspective

Friday, April 24, 2015

• In 1997, 4,000 MIT-related companies employed 1,100,000 people.

• This single research university fostered the creation of companies with

combined 1997 world sales of $232,000,000,000, greater than the GDP of

Thailand.

• All these companies had at least two things in common:• At least one founder was an MIT graduate

• The company was registered

→ Corporate registration can help promote the success of technology-

based startup companies.

Source: MIT, Impact of Innovation, 1997

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Department of Engineering Systems and Management

Department of Electrical

Engineering and Computer

Science

Department of Mechanical and

Materials Engineering

Department of Chemical and

Environmental Engineering

2009

MSc Engineering Systems and Management

MSc Mechanical Engineering

MSc Material Science and Engineering

MSc Computing and Information Science

MSc Water and Environmental Engineering

2011

MSc Chemical Engineering

2010

MSc Electrical Power Engineering

MSc Microsystems Engineering

2014+

MSc Sustainable Critical Infrastructure

MSc Geomechanics

ACADEMIC DEPARTMENTS

FACULTY

STUDENTS

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95+

500+

2012

PhD program

Practicing Professionals

Masdar Institute’s Academic ProgramsGraduate Education as a Foundation for Research

2013

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Evolution of Research at MI

• Activity to Date

– Capacity building and development of research capabilities aligned with themes that are relevant globally and locally

• Path Forward

– Establishment of multi-disciplinary research centers

– Expanded local and international partnerships

– Technology transfer and establishment of local innovation systems

MI ResearchEvolution and Path Forward

Energy

Water and Environment

Microsystems

Sustainable Engineered

Systems

MI Core Research Domains

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MCIP: CREATIVELY BRIDGING TWO

“VALLEYS OF DEATH”

Exte

rnal

Fu

nd

ing

A

vaila

bili

ty

Commercial SalesProof of Concept

Incorporation Venture Capital

SELECT DIRECT CONNECT MARKET

Basic Research

Seed Funding (TIP, MMIP)

Mentors (Catalysts); Training; Industry Connections

Accelerator / Incubator

Education (Entrepreneurship, Technology Management)

Technology R&D

Sequenced Assistance for Technology Startups

iInnovation: Vision and Mission

Development Stage

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MI-MIT Innovation Program (MMIP)

Friday, April 24, 2015

• Seed grant program for joint MI-MIT

faculty teams.

• Call for proposals issued in March 2014.

Four joint grants planned by Fall 2014.

Partly funded by BP.

• One-year, translational, educational.

8Friday, April 24, 2015

BP Collaboration

• An exciting new collaboration

between iInnovation and BP was

announced in January 2014 at Abu

Dhabi Sustainability Week.

• Masdar Institute and BP have

committed US $7 million to develop

new ways of accelerating

sustainable technology innovation.

• The collaboration has already

accelerated introduction of new

student scholarships, seed grants

and seminar speakers.

9Friday, April 24, 2015

• In many industries venture capitalists

and large corporations are moving

away from technology R&D.

• Neither the “triple helix” nor new

investment sources such as crowd

funding meet the financing need for

technology start-ups, thus slowing

innovation in these industries.

• In many cultures, start-ups present

high opportunity cost, high financial

risk and high reputation risk to

individual entrepreneurs, thus

discouraging entrepreneurship.

A Growing Chasm for Start-Ups

10Friday, April 24, 2015

Taking a New Perspective

• Extend the role of the research university farther downstream, helping to

bridge the “valley of death.”

• Do this by creating new university programs that encourage students to

form start-ups before graduation.

• By positioning start-ups as primarily education rather than business,

the new model reduces entrepreneurial risk:

Student succeeds early: Join a start-up.

Student succeeds later: Graduate with degree.

Shift the frame of reference for technology entrepreneurship

View early translational work as investment in education rather than as a business investment.

11Friday, April 24, 2015

BP Innovation Scholarships

Press Release

Masdar Institute Announces BP Innovation Scholarships

New Scholarships to Encourage Pre-Graduation Student Start-ups

Abu Dhabi-UAE: 11 March, 2014 – The Institute Center for Innovation

and Entrepreneurship (i-Innovation) at Masdar Institute of Science and

Technology today launched the BP Innovation Scholarship program.

The first two scholarships . . . . .

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MCIP: CREATIVELY BRIDGING TWO

“VALLEYS OF DEATH”

Exte

rnal

Fu

nd

ing

A

vaila

bili

ty

Commercial SalesProof of Concept

Incorporation Venture Capital

Basic Research

Commercial PhaseEducation Phase

Adjusting the Frame of Reference

Technology Development Stage

Work with universities to create a new education-based paradigm of entrepreneurship with

innovative corporate registration processes.

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Innovative Students

Friday, April 24, 2015

2013

• Five Masdar Institute students won national or regional business plan competitions:• Intel Global Business Challenge finalist in Silicon Valley.

• SeedStars WorldwideStartup finalist in Geneva.

• Two students formed startup companies.

2014

• One student won the UAE’s Ibtikari Competition.

• One student won the Khalifa Fund’s

Technopreneur Competition.

• One faculty member formed a startup company.

2015

• One startup company formed; two more in process.

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International Perspective (cont.)

Friday, April 24, 2015

• “Today the majority of UK companies are formed the same day electronically. . . . Most agents offer company formation packages for less than £100.”

Source: Wikipedia, Company Formation

• 2014 Country Rankings: Ease of Starting a Business

5 Rwanda

7 Kyrgystan

32 Jamaica

39 USA

47 UAE

49 UK

Source: The Global Innovation Index 2014

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Friday, April 24, 2015

Resource Availability Matrix - Current

Ecosystem R&D People Funding Suppliers CustomersLaws &

Regulations

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Conclusions

Friday, April 24, 2015

• High-technology startup companies can contribute tremendously to national wealth.

• The corporate registration process is a vital step in translating high-tech research into useful products, services and processes.

• At present in many societies, the transition from education to commerce occurs at corporate registration.

• For many societies, a later transition under an “education paradigm” of entrepreneurship is highly desirable.

• Innovative models of corporate registration may therefore promote the formation of high-technology startup companies, particularly in industries characterized by long product life cycles.

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iInnovation. Sustainable Innovation.

Thank You!