The European Research Council

The ERC Proof of Concept Grant

Laura PONTIGGIA ERC Executive Agency Support to the Scientific Council

Workshop on Proof of Concept (PoC) in South Eastern Europe Trieste, 21-22 September 2017

Agenda

• The ERC Proof of Concept (PoC) grant

• Assessment of early impacts of ERC PoC • The division of labour in the innovation process

The PoC in the ERC funding landscape

Proof of Concept Grants

Starting Grants

Advanced Grants

Consolidator

Grants

Fro

nti

er

rese

arch

(1) Increasing the stock of useful knowledge Both codified (e.g. in terms publications) and tacit (skills, knowhow and experience).

(2) Supply of skilled graduates and researchers

(3) Creation of new scientific instrumentation and methodology

(4) Development of international peer networks

(5) Enhancement of problem-solving capacity

(6) Creation of new firms

(7) Provision of social knowledge The benefits from publicly funded research

Martin and Tang, SPRU 2007

ERC Proof of Concept

0 Valley of Death

Cash Flow

Time

Unsuccessful

Unsuccessful

Moderately successful

Successful

Idea Development Early commercialisation

Typical Primary Investors

-Universities -Funding Agencies -ERC

-Entrepreneur -Seed/Angel Investors

-Venture Capitalists

-IPO

ERC PoC funding: support to crossing the Valley of Death

RESEARCH

KNOWLEDGE

Source: Adapted from "An Assessment of the SBIR Program, Charles W. Wessner, Editor, Committee on Capitalizing on Science, Technology, and Innovation: An assessment of the Small Business Innovation Research Program - National Research Council of the National Academies (2008)” and “Stephen Kline, Nathan Rosenberg (1986) An overview of innovation, in R. Landau & N. Rosenberg (eds.), The Positive Sum Strategy: Harnessing Technology for Economic Growth. Washington, D.C.: National Academy Press, pp. 275–305”.

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The objective of the PoC

Provide funds to bring ERC-funded ideas to a pre-demonstration stage for: • potential commercialisation opportunities or • potential societal benefits

Maximise the value-creation* of the excellent ERC-funded research

*Creation of new value (socio-economic benefits) for users and return for innovators

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Commercial opportunities

Financial profit Venture-funded start-up Licensing to new or existing company

Commercial innovation

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Societal benefits

[… but also a new product, production process or technology]

a social venture, ICT-based social network,

web-based platform, non-profit organisation,

new grass-root organisation

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PoC – what is it?

What for: establish the innovation potential of the idea: technical validation, market research, clarifying IPR strategy, investigating business opportunities

Who can apply: Holders of an ERC grant with an idea substantially drawn from an ERC-funded project

Amount: up to €150,000 per grant (18 months) Total budget for 2017: € 20 million

Evaluation: Experts in technology transfer check the innovation potential and that the plan is reasonable

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PoC – some figures

Budget

10ml

Budget

10ml

Budget

10ml

Budget

15ml

Budget

20ml

Budget

20ml

2011 2012 2013 2014 2015

2016

TOTAL

Proposals* 139 120 279 426 323 408 1 695

Funded 51 60 67 121 160 159 618

Success 37% 50% 24% 28% 49% 39% 36%

* withdrawn and ineligible not taken into account

Steady increase in the number of applications (from ≈ 140 to ≈ 400 per year) Increase in the annual budget (from 10m to 20m) It attracts ≈12% of ERC grantees; ≈ 5% of them hold a PoC 3 deadlines per year – only 1 eligible application per PI, per year ≈ 620 PoC projects funded by end-2016 (average 36% success rate)

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ERC Proof of Concept 2011-2016

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Innovative Solutions for Encapsulation

Tool assisting search for a parking place in cities

Novel solution to Haematopoietic Stem Cell regeneration

Therapeutic Applications of Light-Regulated Drugs

High-Resolution 3D Copying and Printing of Objects

Some successful PoCs

Assessment of early impacts of the

ERC Proof of Concept grant

Assessment of the Early Impact of the ERC PoC how well does the PoC achieves the goal of

maximising the value-creation of ERC-funded research?

4338 PIs of

ERC Projects • Target population:

FP7 ERC grantees

2069 responses

1821 complete responses

• Final sample

1375

Other ERC projects (not POC

applicant)

204

by POC applicants not

funded

242

by POC grantees

Core focus of the study

115 continuing with value-creation activities

89 not continuing with value-creation activities

75 applying to other valorisation funding program (36 funded)

1301 not applying to other valorisation funding program

Divided in:

Assessment objectives

• Awareness

• A. Motivations

• B. PoC activities • C. PoC outcomes

Creation of IPRs Licensing agreements R&D collaborations/R&D contracts Consulting agreements New company formation Public engagement

• D. Access to additional developmental funding

• E. Skills development and other outcomes

• F. Recommendations for the PoC funding scheme

Assessment – (preliminary) key findings

PoC programme is sound in concept and effective in operation

Open call; bottom-up; timely; feedbacks on a go/no-go strategy on and how to go further

150,000€ enough? It depends on sector. In general it provides resources and time to concentrate on a project beyond the researcher scientific knowledge –Flexible and easy

Significant numbers of PoC grantees are making progress in:

Commercialisation of their technologies and products

Start-up creation (and many have received additional funding)

Actual sales have been achieved and revenues generated from licensing IP and/or from consulting services

10-12% of ERC grantees apply for PoC; 5% of ERC grantees are awarded a PoC; if only 1% of them will be successful, this is fine!

PoC grantees are dropped in the middle of the Valley of Death, not on the other side!

Strong suggestion that with additional funding and time, the results would show even greater improvement

The division of labour in the innovation process

Who should bear the cost?

Source: Copyrights belong to Oxford University Innovation

Source: Arun Majumdar, Safeguarding the future with public endowments for research

Who should bear the cost:

existing vs disruptive technologies

Over-reliance on VC to fund innovation?

…. in the digital/ social app world

new ideas forged from new science take time to mature into market-ready products

• new ideas based on existing technologies • producing returns within 5 years • attract venture capital investments to scale-up start-ups

• new ideas based on new science • technologies for which a market doesn’t exist yet • first product revenues in 10-15 years (too long for VCs) • “common good” - very high inherent risk, but high gain if succeed • need for patient capital and time to scale-up technologies